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QUEST MEANS BUSINESS
U.S. Markets Close at Record Highs; Fed Vice Chair: Fed Must Stay Independent; Trump to Detail Policy Priorities; Trump Sparks Conflict of Interest Concerns; 7.3 Hits Northeastern Japan; Trump Vows $1 Trillion for Infrastructure; Tsunami Warning in Japan after Strong Quake; Trump Taking More Conciliatory Approach; France Powers Ahead with Solar Roads; Fantastic Haul for "Fantastic Beasts". Aired 4-5p ET
Aired November 21, 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 HOST: A record on all three major markets, the Nasdaq, the Dow Jones and the S&P 500. Trading is up nearly 100 points for the
Dow, and on the New York Stock Exchange.
We call that a firm gavel that brought trading to an end on Monday, November the 21st.
Tonight: this is no time for games. The Fed's vice chair, Stanley Fischer tells me Donald Trump should let us do our job.
Also, the bank of Mexico's central bank governor says Hurricane Trump can be avoided. Our exclusive interview with Augustan Carstens.
And controversial guests in the corridors of power: The Trump organization faces more claims of conflicts of interest.
I'm Richard Quest, live in the world's financial capital, New York City, where I mean business.
QUEST: Good evening.
Tonight there is a new meaning to the phrase, "Don't fight the Fed." It's a phrase usually used to talk about the way the markets, which indeed have
just closed at record highs, treat the Federal Reserve. In fact, look at the Dow and you will see it's up 88 points at the close, now at a record
level along with the S&P 500 and, indeed, the Nasdaq as well. All three major markets at record highs.
The markets very much giving their opinion on what they see as being the likely future economic and business policies, less regulation, of the
incoming Trump administration. Now "Don't fight the Fed," was a phrase that was always taken to mean don't bet against Fed monetary policy.
But now the vice chairman of the Fed tells me Donald Trump's administration must let the central bank be independent, telling me we have got a job.
It's defined and we must do it. Stanley Fischer has made it quite clear his views on the Fed's independence.
the Fed and its chair, Janet Yellen, have been preparing the U.S. economy only for its second interest rate in a decade likely this December. It all
happens as the president-elect has openly criticized Fed policies.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT-ELECT OF THE UNITED STATES: We have a Fed that is doing political things, this Janet Yellen of the Fed, the Fed is doing
political by keeping the interest rates at this level and, believe me, the day Obama goes off and he leaves and he goes out to the golf course for the
rest of his life to play golf, when they raise interest rates, you're going to see some very bad things happen because the Fed is not doing their job.
(END VIDEO CLIP)
QUEST: Now for political candidates to speak in such terms about an independent Federal Reserve is pretty unusual. The Fed so far has merely
contained itself by saying that they are apolitical and that politics is not discussed at monetary meetings.
Now speaking to me, Stanley Fischer's warning, political pressure would harm the U.S. economy.
STANLEY FISCHER, VICE CHAIRMAN, U.S. FEDERAL RESERVE: Having an independent central bank is a very important aspect of the way the economy
runs. There is one body in this economy which has control of a critical element of policy, namely, the interest rate, which is independent, which
has a well-defined task and which has the apparatus to implement that task.
We have a very good staff. We have the tools that enable us to set the interest rate. And we will do it. And this is important especially when
there is uncertainly about what's going to happen.
We meet every six or seven weeks and we will get on with doing what, from the viewpoint of our goals, looks like what should be done at that time.
And that's our legal mandate.
QUEST: But the Fed could find itself the victim of the same forces of change, or at least in the public arena, that other institutions --
including the press -- have found, from a president-elect who chooses to make statements off the cuff.
And even if I go back a couple of weeks, Theresa May made the statement to her political conference against the Bank of England and the governor.
You're all under attack in some way by politicians.
How do you withstand that attack?
FISCHER: Well, when I was in the IMF, I used to discuss this issue with the then-head of the IMF. And he always said exactly the same thing when I
said to him, well, they're attacking us --
FISCHER: -- from here and they're attacking us from there.
What should we do?
And he always had The same story and I now give that answer.
"We must do our work. We have got a job, it's defined, we'll do it."
QUEST: Even if it gets to the point, though, it becomes more difficult as the public responds to political pressures against you, if necessary?
FISCHER: Well, if that would happen, that would be very undesirable. It would not be good for the economy but we'll do what we are supposed to do.
QUEST: In one respect, you -- and you've talked to me about this on many occasions -- the concept of fiscal policy playing a greater role, the
monetary policy. In your speech today, you talked about -- you quoted Mohamed El-Erian, the Fed being nearly the only game in town.
Well, you won't be as of January the 20th. You're about to get somebody who's going to help you out, aren't you?
Are you looking forward to a fiscal policy that plays a greater role?
FISCHER: There is a lot being spoken about infrastructure investment. We have been saying for some time that that would help deal with a
productivity problem if the infrastructure investment is well aimed and well crafted. And so we hope to get some help on that, too.
Whether it will go forward over time and play a relatively important countercyclical role is a little harder to say.
QUEST: But if the fiscal policy is expanding, that does mean that you can normalize to neutral monetary policy, perhaps quicker than you would have
otherwise expected to do so.
But at the same time you don't want to negate what fiscal policy is doing.
FISCHER: Well, we'll make our decisions on the basis of the law, which says we should keep prices stable and we should aim for maximum employment.
And those are the things we will be aiming at throughout.
So to the extent that fiscal policy affects those two variables, which is generally does, we'll have to take it into account. But we're not going to
have a game played in which we try and do something and they try and do something. We have got our role, we'll carry it out and the economy will
QUEST: You have a meeting coming up in a few weeks.
Do you feel the wind of change in the economy is about to happen?
Do you feel that the slow growth of the last five, six, seven years post- recession is about to change?
FISCHER: There are reasons to hope that growth might be a little bit fast in moving ahead. And depending on the government's policies and the new
administration's policies, there could be a basis put in place for that to happen.
QUEST: We'll have more from Stanley Fischer later but on the question of an interest rate rise in December. But the speech that he made this
morning at the Council on Foreign Relations about the role of fiscal policy in boosting the economy, it all contributed to this idea of stocks
continuing to rise across the board.
The three major -- well, let's look at the Dow first, well up 88, 19,000 is looking highly doable before the end of the week if this trend continues.
Major indices all closing up high, the Nasdaq, the S&P and the Dow Jones, I beg your pardon, with some strong gains, particularly for the tech-heavy
Expectations also now growing for an OPEC production cut that would boost the core profits. Paul La Monica has been following the movement.
We'll come to Stanley Fischer's comments in just a moment. But the markets with this very -- I mean, at the time, Stanley Fischer talked about
uncertainty, there is uncertainty about the new administration, which begs to question, what is driving this market?
PAUL LA MONICA, CNNMONEY DIGITAL CORRESPONDENT: I think you still have this expectation that there will be some form of stimulus, particularly
with infrastructure spending. And that's lifting a lot of the stodgy Dow Industrials. But I think also everyone expects Trump, for better for
worse, will turn inward.
You don't have that up here, but the Russell 2,000 small cap stocks, which are mainly domestic focused, that is also at an all-time high. So I think
investors are bullish on the notion that Trump is really going to try and keep the U.S. economy growing and at a steady pace better than what it has
been growing at for the past few years.
And that should boost earnings for retailers, for smaller banks, not necessarily the big banks but regional banks, infrastructure companies
again if you do have that --
QUEST: Now Stanley Fischer there talks about --
QUEST: -- the fiscal policy playing its role but to some extent, look, if fiscal policy becomes majorly expansionary, as Donald Trump says, with
infrastructure, with projects, with tax cuts, at a time of full employment and inflation already, almost on Fed target, it just means the Fed will
raise rates quicker.
LA MONICA: I think the Fed will raise rates more quickly and it will be interesting to see whether or not Trump likes that considering that he was
so critical of the Fed for keeping rates low.
He might be in that case where it's careful what you wish for because the fed could very well raise rates several times in 2017.
QUEST: But they're doing so -- just to be clear on this -- they're doing so not to negate or encounter the government's policy but to maintain the
LA MONICA: Exactly. No, this would not be something that would conflict with what Trump and the Republican-led Congress look to do from a fiscal
standpoint. I think the challenge becomes the Fed has sometimes gotten it wrong and have raised rates too aggressively.
If that happens, you wind up having a more sharp contraction in the economy than one would like.
If the Fed makes that mistake again, George H.W. Bush learned the hard way when Greenspan was raising rates the way that he did, he was a one-term
president. If Donald Trump winds up with a super aggressive Fed, even though that's exactly what he wanted for, then you might have more people
in 2020 attacking him for what Janet Yellen is doing.
QUEST: 2020 is a long --
LA MONICA: It'll be around the corner before you know it.
QUEST: Oh, I feel the pain already. Paul La Monica, Politics.
Campaign in poetry and govern in prose, as they always say. After the rhetoric of the campaign, Donald Trump is preparing to lay out his
priorities on national security, energy and immigration. Sara Murray is following the latest. Sara is outside Trump Tower.
I hope you have got your winter woollies on, Ms. Murray, because the weather has turned chilly and you're on the outside.
What is our next expectation from the administration-elect?
SARA MURRAY, CNN CORRESPONDENT: Well, right, that's a great question because Donald Trump really, since he became the president-elect, has not
come, aside from one interview with "60 Minutes," to really express how he wants to prioritize the things he wants to get done as president.
Now his campaign says they're going to be releasing a video today that will outline some of those priorities. But so far, they're just giving us sort
of the 10,000-foot view that he's going to talk about trade deals, he's going to talk about TPP, he's going to talk about some of the regulations
he can roll back.
We expect to hear more about that in terms of the energy sector but also how he plans to approach national security and how he plans to approach
Obviously this is a video that they're producing from within the campaign. So we may just hear campaign promises reiterated or we may hear what other
people are looking for, which is for him to delve into some of these specifics of what would be a realistic view of what he could get done in
the first 100 days.
What is the first bill he wants to work with Congress on?
That's what we're waiting to hear.
QUEST: Just bring us up to date, if you would be so kind.
How behind or ahead of schedule is he, compared to previous administrations, do you think?
We've had some of national security appointees but we've had none of the economic appointees: Treasury, USTR, Commerce, Labor.
MURPHY: That's right, and I do think that they have gotten a handle on this, the transition situation, more so by the end of last weekend going
into this week than when it first fell on Donald Trump's footsteps. He didn't really pay attention to this when he was running. It is not
necessarily normal to fire the person who was the head of your transition - - Chris Christie, who got demoted in this case -- and put someone else in charge and then ask a bunch of different people at some of these lower
Now they seem to be filling some of these vacancies. They're sending landing teams to a number of these different agencies which will allow
folks, for instance, in the State Department to talk to their counterparts on the transition team and say here is what you need to know about how this
Here's what you need to get up to speed and hit the ground running. So they're certainly making progress but Kellyanne Conway said just today, one
of Trump's senior advisers, that they don't feel rushed to put more picks out there. They want to do this correctly, they're not working on some
kind of arbitrary timeframe.
And Richard, I think the other thing we need to remember is they're now talking to more people than were willing to meet with him and talk to
Donald Trump when he was just a candidate. They're realizing there is a whole new pool of candidates now that he is the president-elect.
QUEST: Sara Murray, stay warm outside Trump Tower as the snow flurries arrive.
On the Trump schedule today includes meeting with some of the possible candidates as we've heard. And the former House Speaker Newt Gingrich
expected at Trump Tower later.
An unusual set of visitors, executives from anchors from major TV networks including CNN have been also paying the president elect --
QUEST: -- a visit amid the political transition claims that Trump is trying to do business at the same time. He received three Indian
businessmen last week. Now the importance here, these Indian businessmen are doing business with Mr. Trump on real estate and tower deals and
skyscrapers in Pune and in potentially in Mumbai.
The Trump executive described the meeting as nothing more than a brief passing and exchange of hellos, saying there'll be no conflicts of
interest, according to the man to be chief of staff, Reince Priebus. He says the public shouldn't be concerned.
And Cristina Alesci is with me here
So tell first of all about this Indian incident.
CRISTINA ALESCI, CNNMONEY CORRESPONDENT: It seemed like -- there was a picture that appeared on social media that has Trump in the frame with
three business partners, who have partnered, one of them, possibly has partnered with Trump before.
Here is the problem. There has been a string of incidents now that really highlight Trump's conflicts of interest and he doesn't seem to care too
much. And that's because there are no real laws restricting him from running his businesses here in the U.S. except for one, which is -- has to
do with the constitutional amendment.
And he may run afoul of that specifically as it relates to his foreign ties with foreign business leaders.
Take a listen.
UNIDENTIFIED MALE: Place your left hand on the Bible and raise your right hand and repeat after me.
ALESCI (voice-over): The president is sworn to preserve, protect and defend the Constitution.
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: So help me God.
GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: So help me God.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So help me God.
ALESCI (voice-over): But conflicts of interest between Donald Trump's businesses and his presidency are already sparking talk of a constitutional
The concern is over potential insider dealings, a topic he railed against on the campaign trail.
TRUMP: More pay for play.
ALESCI (voice-over): Trump's empire spans the globe, from Canada to the Philippines.
UNIDENTIFIED FEMALE: Here at Century City a Trump Tower, Manila, will gloriously rise.
ALESCI (voice-over): -- to Dubai.
TRUMP: Think you're going to get major, major retirements here in Dubai.
ALESCI (voice-over): This weekend, new evidence showed that Trump is still clinging to his international business ties.
First three Indian developers appeared in a photo at Trump Tower, standing next to their business partner, the now president-elect.
According to "The New York Times," the executives also met with Eric and Ivanka Trump.
On Friday, the Trump international hotel in D.C. entertained a group of foreign diplomats, marking the new hotel's exclusive townhouse suite.
Cost per night: $20,000.
(INAUDIBLE) say that creates an unprecedented opportunity for pay-to-play.
Want to get on the president's good side?
Some diplomats thing that booking a high-end room will do the trick.
Finally, "The Post" reported that since the beginning of his presidential campaign, Donald Trump has launched eight companies in Saudi Arabia,
possibly tied to a new hotel.
That's only part of a larger international portfolio. Trump's companies do business in 18 countries, according to "The Post." Ethics experts question
UNIDENTIFIED MALE: Every time that he has an engagement with a friend or a foe, internationally in a place where he has an economic interest, the
question arises, how are his personal financial interests potentially conflicting with the national interests of the United States?
ALESCI (voice-over): Trump's chief of staff says the White House will police itself.
REINCE PRIEBUS, CHAIRMAN, RNC: While it is unique, it is certainly compliant with the law and obviously we will comply with all of those laws
and we will have our White House counsel review all of these things.
ALESCI (voice-over): And that White House counsel is going to be very busy.
QUEST: Cristina, this was inevitable, wasn't it?
ALESCI: It was inevitable. And one of the things that dictates the way presidents -- what they do with their assets after they become president is
norm and tradition. It's not really written in law. And that's one of the problems that Trump is facing here. He is not being forced to do anything.
But he's suggesting and his people are suggest that he will do something. The problem is to resolve and really protect himself from any criticism, he
is going to have to get rid of this business and he is proposing handing it over to his children and it's not clear that that cures it or really
prevents him from being criticized for it.
QUEST: With the next four years ahead, Cristina Alesci, our conflicts of interest correspondent. You've got your work cut out for you.
ALESCI: I do.
QUEST: Now this report, I do need to bring to your attention. We're getting reports of a 7.3 earthquake that struck in northeastern Japan.
There has been a tsunami warning, according to Japanese media.
QUEST: The U.S. Geological Survey measures the depth of the earthquake at 10 kilometers. By my reckoning, it must be early in the morning, about
5:00 or 6:00 in the morning in Japan. We'll update on that as things move on. QUEST MEANS BUSINESS.
QUEST: Breaking news, a report that a magnitude 7.3 earthquake has struck northeastern Japan. There has been a tsunami warning for the Fukushima
prefecture. Now the U.S. Geological Survey measures the depth of the earthquake at around 10 kilometers. Obviously this has huge importance
bearing in mind where it has taken place.
You'll be aware, of course, the last earthquake in exactly this particular area, a devastating earthquake several years ago in Japan, in which the
nuclear reactor at Fukushima was very badly damaged, leading to a massive release of nuclear contaminated water.
However so far, let's not get ahead of ourselves, we're waiting for more information as soon as we get it, we will bring it to you.
We talked in the first part of the program about how the Fed is going to welcome infrastructure spending by the new incoming administration. Well,
Donald Trump has spent his career building offices, casinos and hotels and then he puts his name on them. The president-elect is putting together a
blueprint for America's infrastructure. You heard the Fed's vice chair say the Fed would welcome such a program.
Donald Trump says he wants to spend $1 trillion to fix crumbling bridges, highways and airports. CNN's Clare Sebastian reports.
CLARE SEBASTIAN, CNN CORRESPONDENT (voice-over): Thirty years ago this month, Donald Trump opened the Wallman (ph) Rink in New York's Central
Park, a project the city had spent six years and $13 million working on, he completed in four months, he said, for less than $3 million.
TRUMP: The city couldn't get it built. They had no clue.
SEBASTIAN (voice-over): Louise Sunshine (ph) was executive vice president of the Trump organization in the early '80s.
LOUISE SUNSHINE, EVP, TRUMP ORGANIZATION: Number one, there are construction skills involved. Number two, there are skills knowing how to
deal with labor unions involved. Number three, there are great political skills involved.
SEBASTIAN (voice-over): The Wallman (ph) rink was Trump's way of proving to many in New York that private investments could be more efficient than
public. As president, his infrastructure plan relies on that very same principle, private money for public projects.
The question is, can he achieve this kind of success on a scale the United States has perhaps never seen before?
TRUMP: We're going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals.
SEBASTIAN (voice-over): The plan, as laid out in October by two of his economic advisors, proposes using massive tax breaks to spare up to $1
trillion in private investment in addition to public-private partnerships like New York's LaGuardia Airport renovation.
TRUMP: And then I get back on my plane, I --
TRUMP: -- land at LaGuardia with potholes all over.
SEBASTIAN (voice-over): Some experts worry relying on for-profit companies, though, might mean some crucial projects are left behind.
UNIDENTIFIED MALE: We have nearly 8,000 bridges scattered across the country that are both fracture critical and structurally deficient. And
they have been ignored for so many years that maybe we're not going to find public-private partnerships, private interests, who want to correct those
That's what government has to step in --
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (voice-over): The highway construction program initiated by Ike is the biggest peacetime enterprise ever undertaken.
SEBASTIAN (voice-over): Trump has compared his plan to Eisenhower's interstate highway system, bold, visionary, cost-effective.
SUNSHINE: He is a visionary and he's not a politician. And he is coming at this with a fresh point of view.
SEBASTIAN (voice-over): In the days after Donald Trump's election win, unions and stock markets cheered the promise of major spending. The
challenge come January 20th is keeping up that momentum.
SEBASTIAN: Right, Richard, well, if you want to keep up that momentum, one thing he could do is build something big in the manner of Eisenhower, as
you saw in FDR with the New Deal, something to inspire a generation.
Now "The New York Times" has put out a list by one expert. Now these are a couple of examples. So we're just going to start here with his home state,
the Hudson River rail tunnel --
QUEST: Now this is big. This is the tunnel between Manhattan and New Jersey.
SEBASTIAN: -- well, this would be a set of brand-new tunnels to replace the existing ones. So cost, $23.9 billion, that's only an estimate at the
moment and so far this is only in the design stage. But this is 90,000 commuters a day. It's a crucial project.
So staying with rail, Richard, I want to move onto high-speed rail, because this is something Trump spoke a lot about on the campaign trail. We've got
the California high-speed rail here; ground has already been broken on that. There's a project in Texas that's in the planning stages and the
QUEST: If we look -- but these are across the country.
QUEST: They are across the country, from water projects to even building new bridges.
SEBASTIAN: That's right, a new bridge here, possibility in Detroit, linking to Ontario, Canada. Detroit, as you know, very badly hit during
the financial crisis. That could help its resurgence.
And the I-70 East in Denver, another highway expansion project.
QUEST: You'll watch it. We have our conflict of interest correspondent, Cristina Alesci, you will be our infrastructure correspondent in the
administration. Thank you there, to keep watch on.
Breaking news and reports, a 7.3 earthquake has struck northeastern Japan. Brandon Miller is at the World Weather Center and joins me now.
OK, Brandon, where is this and how close is it to where there was the previous and major Japanese earthquake?
BRANDON MILLER, AMS METEOROLOGIST: Yes. Richard, if you will remember, back in March of 2011, we had the big one there in Japan. This one is
located pretty close, along the same faultline there. It's only about 50 kilometers off of the coast of Fukushima there in Eastern Japan, only about
50-60 kilometers away from that ill-fated power plant we remember so well back in 2011.
Now this one is 7.3 initially but they have downgraded it here, Richard, just here in the last couple of minutes to a 6.9. So that's good news. It
came down a little bit and that is significantly -- very significantly weaker than what we saw back in 2011.
There is a tsunami warning that has been issued for the Fukushima coast, for a tsunami, 1-3 meters in height. So if you felt that shaking, you're
anywhere near the coast of Eastern Japan, you need to get away from the coastline there.
So that's 1-3 meters -- that tsunami would be happening right about now. So now is the time when you felt that shaking.
QUEST: And obviously that will take time to move across.
Are we expecting, would you expect aftershocks from an earthquake of this size?
MILLER: Sure, absolutely. You would expect probably one aftershock in that probably 6.0 range or so and then a couple of more that are in the 5.0
range. So, yes, you would absolutely expect some aftershocks from this.
This happened right at about top of the hour, 6:00 am local time there in Japan so probably shook some people out of the bed. There will probably be
some more shakes and shimmers later to go during the day here on Tuesday.
QUEST: And finally, Brandon, how long would you expect a tsunami warning to be relevant for?
And when will -- I suppose what I'm really saying, when will we know if there is a tsunami heading that way, albeit a relatively small one?
MILLER: I would think within the hour we would probably start to hear if a tsunami actually took place and within, say, by the noon hour there, you
will probably be able to start to hear an all-clear, if not before. Obviously the farther away you are from the epicenter, the longer it would
take that tsunami to travel but also the more it would start to lessen over that time as well.
QUEST: Brandon, please, I will let you get back to your duties so that you can bring more to us, thank you for joining us.
It's QUEST MEANS BUSINESS. Very busy day, as you can tell whether it's politics, earthquakes, markets, the markets are at a record high, all three
major U.S. markets closed at a record. We'll talk about that a lot more. It's QUEST MEANS BUSINESS.
RICHARD QUEST, CNN HOST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. We're going to be talking about all sorts
of things concerning the Trump administration. Always remember, this is CNN and, on this network, the news always comes first.
QUEST: So breaking news at the top of the hour reports that a magnitude 6.9 earthquake has struck northeastern Japan. Our correspondent in Tokyo
is Will Ripley, who is in Istanbul on other duties at the moment but Will joins me now.
Look, one agency, the National Geological, says no tsunami warning has been issued but the Japanese Fukushima prefecture has issued a tsunami warning.
Should we make anything of this difference?
WILL RIPLEY, CNN CORRESPONDENT: Well, certainly the Japanese meteorological agency is going to take every precaution --
RIPLEY: -- to make sure that coastal residents have as much time as possible to get to higher ground because the scenario that we saw unfold in
March of 2011, which was one of the largest earthquakes in Japanese history that hit this exact same area, that was a 9.0 earthquake. This earthquake
is significantly smaller and the tsunami that resulted, those waves were 30 feet.
These tsunami waves that they say are imminent could be hitting portions of coastal of the eastern coast of Japan. Those are about a third of the
I'm watching NHK's live feed right now. This is the first time that I have seen a red bar on the screen, urging people along the coast to evacuate
immediately. They're simulcasting in multiple languages to make sure that everybody in this affected area is aware. And they're saying that some of
the first waves could come in the next few minutes.
So we'll have to obviously watch and monitor what happens. You remember, I'm sure, Richard, just those horrific images back in 2011, when the waves
started coming in, taking cars and homes and boats.
And certainly Japan has been working very hard to avoid a repeat of that. There's a major seawall construction project underway. I was just in the
area earlier this year, covering the fifth anniversary of the tsunami and the disastrous meltdown that followed.
QUEST: Right, I do remember it well, Will. I was on air at the time of the earthquake. I was on air when the first pictures of the farmland being
covered by water.
But, Will, give us a perspective as we wait for more details on how this will be -- what will be going on on the eastern coast of Japan?
How will they be regarding the seriousness of this?
RIPLEY: This is a very serious -- this is the most serious earthquake that Japan has experienced in my three years of being the Tokyo correspondent.
It pains me a bit to be so far away when this is happening but I have been communicating with some of my colleagues who are in Tokyo, who were jolted
awake just before 6 o'clock Tokyo time, feeling this earthquake. And the earthquake, the shaking lasted for several minutes.
They were telling me that it was very similar to the accounts of people who lived through the earthquake back in 2011. The shaking lasted for several
minutes. This was definitely an earthquake that Japanese people, who are very accustomed to earthquakes, they happen all the time, every week there
are often minor tremors that you'll feel.
But when there is shaking this strong, a quake this shallow, that goes on for so long and then a tsunami warning issued, it is a very serious event
that Japanese will be taking very seriously at the beginning of their workday, 6:00 a.m., a lot of people are already waking up, a lot of people
have long commutes to get into work in Japan. And so we can only hope that people in these affected areas are getting the message to move to higher
friend, even if it is only precautionary measure. It's vital that they do that.
QUEST: Will Ripley in Istanbul. Will, thank you.
Mexico's central bank governor says his country could do without Donald Trump releasing what he described as a hurricane. Mexico is preparing for
the worst and hoping for the best from a Trump presidency.
In an exclusive interview, Agustin Carstens told CNN's Nick Parker he is feeling hopeful.
AGUSTIN CARSTENS, GOVERNOR, BANK OF MEXICO: We have now President-Elect Trump. We have seen some markets' reactions but we really haven't seen the
actual policies that will be implemented. What we want to avoid is to overreact.
It is like when you're a doctor and the patients come, you want to give them the right doses. We want not to give them a insufficient amount of
medicine. But at the same time we want to avoid an overdoses. So for that, we need to have the right information, the adequate information and
therefore a gradual approach has (INAUDIBLE).
NICK PARKER, CNN CORRESPONDENT: You were quoted previously as saying that a Trump win would hit Mexico like a hurricane.
Do you stand by that comment?
CARSTENS: Certainly President-Elect Trump has a -- stricken a more, I would say, conciliatory approach. I understand that there are some things
that are said in the campaign and then, you know, once the person is in power, different decisions have to be taken.
And in a way, in some fashion, he has measured -- he has mentioned sort of that type of principle. I mean, I hope that we don't get to the European
PARKER: What key signals will you be looking for from the Trump presidency when he takes office?
CARSTENS: Well, obviously his fiscal stance will be very important.
CARSTENS: The assessment of what they will be, the impact of that fiscal stance, in terms of a growth, in terms of indebtedness.
PARKER: So you're talking about infrastructure and tax reform?
CARSTENS: Yes, and the impact on growth, the impact on expected inflation and of course signals about the openness of the U.S. economy.
PARKER: What in particular vis-a-vis the relationship with Mexico?
CARSTENS: Well, it's the optimist to the degree of access of Mexican exports.
PARKER: So NAFTA will be a key flashpoint?
PARKER: Let's talk about the weakness of the peso for a moment if we would. Investors holding Mexican bonds have seen the value of these
investments decrease sharply.
How much of a concern is capital flights to you?
CARSTENS: Well, certainly it's an issue that we have in our mind. In a way you can say that that's why we have been increasing interest rates.
At the end of the day, from the (INAUDIBLE) the value of all these assets. Now in the short term, there can be volatility that can (INAUDIBLE) from
(INAUDIBLE) values and I think that today, some of the uncertainty is being reflected in those variations.
My sense is that if adequate policies have preserved (ph) in Mexico and there is a way forward for Mexico to work with the U.S. in the future, I
think that the levels of the exchange rate that we're seeing today are not compatible with fundamentals or the peso would be widely undervalued.
QUEST: Agustin Carstens from Nick Parker and you can read more about those comments from Governor Carstens at cnnmoney.com. Nick's article is one of
the top stories on the International home page and other trending stories of course.
And the QUEST MEANS BUSINESS newsletter, cnnmoney.com. More in a moment.
QUEST: Now let me remind you of the breaking news that we are following very closely. An earthquake measuring at 6.9 magnitude has struck
northeastern Japan, and according to NHK, our affiliate, the Japan Meteorological Agency has issued a tsunami warning for the coast of
The U.S. Geological Survey says the earthquake happened at a depth of 10 kilometers, which is regarded as quite shallow by these things.
On a day when U.S. markets broke records across the board, European stocks finished mostly higher. The market on energy shares led the way, oil
stocks were supported by a surge --
QUEST: -- in the price of Brent crude with some speculation that oil producers are closer to an agreement to limit production. Only (INAUDIBLE)
slipped into the red.
For answers, environment ministers are (INAUDIBLE) fighting for the Paris agreement on climate change, even as the U.S. walks away. (INAUDIBLE) is
pushing a scheme to turn French roads into a source of clean energy. As part of our special "Europe 2020" series, our correspondent in Paris,
Melissa Bell, has sent this batch.
MELISSA BELL, CNN CORRESPONDENT (voice-over): France's energy minister believes she is on the path of the future. On a wet October morning in
Normandy, (INAUDIBLE) led a team of workmen down a road that they were about to transform into an energy source through these sticky solar panels
laid directly on the surface.
It's a concept that has already been tested in Holland on a bicycle path. Surfaces like these can be hit for up to 90 percent of the daylight hours
by the sun's rays.
Here in Cromelly (ph), the bike path generated in just six months enough energy to power one household's need for a year.
Back in Paris, (INAUDIBLE) says she wants to build on that with 1,000 kilometers of solar road over the next five years.
UNIDENTIFIED FEMALE (through translator): It's a very innovative project. It's the future for transportation and energy production. The energy
produced will light the road or houses along the highway or feed back to the network.
The equivalent of one kilometer of road produces energy for 5,000 houses.
BELL (voice-over): Technological advances mean that the panels can be put directly on existing surfaces, which makes them cheaper to lay down. But
the electricity they produce remains expensive. At six euros per watt, it is six times more expensive than the electricity produced by ordinary solar
(INAUDIBLE) the roads will pay for themselves through the electricity they'll produce.
UNIDENTIFIED FEMALE (through translator): We're financing the first kilometer; after that, we think orders will come in so the project will be
BELL: Is this a sign that France intends to be a leader in what will be a global green revolution?
UNIDENTIFIED FEMALE (through translator): Yes, France wants to do their green revolution. There are 400 territories across France using positive
energy and tax credits for people who produce renewable energy who insulate their homes and save energy. We have three levels to help businesses,
territories and citizens.
BELL (voice-over): France is keen to remain a leader of the global green revolution. One year ago, the world's first universally binding deal on
the climate was signed in Paris. (INAUDIBLE) helped lead those negotiations.
UNIDENTIFIED FEMALE (through translator): We were just hit by a terrorist attack. And yet we managed to host all the heads of states and governments
to make this Paris accord a success and a historical moment.
Most importantly, we were the first country in the world to apply the Paris accord as we have already passed the laws and have the appropriate low
BELL (voice-over): In all, France has a million kilometers of road. Until now, (INAUDIBLE) says they were just ribbons of bitumen (ph). If the first
kilometer of solar road is a success, she hopes that many more will be transformed, perhaps even one day becoming symbols of energy creation
rather than of energy consumption -- Melissa Bell, CNN, Paris.
QUEST: Now Harry Potter fans know exactly where to find fantastic beasts.
You have known for 24 hours (INAUDIBLE) that magical beasts live in New York.
QUEST (voice-over): $218 million in one weekend is no conjuring trick but the IMAX theater also took its fair share on a stellar start for the new
J.K. Rowling contract -- after the break.
QUEST: So imagine if you have the power to bring back the Harry Potter film franchise and you do so without Harry. That's exactly what Warner
Brothers and J.K. Rowling have achieved. The creator of the world's most famous wizard managed to conjure up $218 million at the worldwide box
It's with the Potter prequel, "Fantastic Beasts and Where to Find Them." Now Rowling wrote the screenplay; four more movies in the same series are
promised and remember, of course, Warner Brothers is also owned by CNN's parent company, TimeWarner.
The IMAX chief executive, Rich Gelfond, (INAUDIBLE).
Good to see you, sir.
RICH GELFOND, CEO, IMAX: Good to see you, Richard.
QUEST: Were you surprised at how well this did?
GELFOND: No, I think a lot of people, including us, saw it coming. It had all the elements. It had visual splendor, fun characters, British accents,
taking place in New York City and the lineaged (ph) Harry Potter, as you said, a great team, director, producer well-known and it all really worked.
It's not an easy one, if you think about it.
How do you bring back something that is already gone?
But they did it.
QUEST: Right. With the -- I'm interested to see the U.S. numbers were good but not brilliant. And many people, you know, it's a question, did
they get the Potter fans?
GELFOND: I think they did but I think many of them have grown up so they got their kids and their relatives. At IMAX in 20 percent of our runs, we
set records. We beat all the grosses for Potter franchises previously. So it is a difficult thing to do.
Other people tried to bring back franchises that have run their course but they did a great job of it.
QUEST: And if we look at the (INAUDIBLE) you have 1,100 or so screens at the moment, going up by 100 or so a year --
GELFOND: 150 --
QUEST: -- 150 a year.
Where is that growth primarily being concentrated?
Because I know we talk frequently about China.
Is that still where the growth is predicated?
GELFOND: It's still a significant amount of growth that's coming from China, despite what you hear on CNN and other distinguished places. It is
doing well. China is doing extremely well.
Also the Middle East is doing terrific. So in Dubai, we have the number one theater in the world for "Sully," a film about a plane crash in the
Hudson River, right?
So that's surprising. Western Europe is doing pretty well. And North America is doing better than it has done recently.
QUEST: And your company has just done a deal for original content over the Marvel franchise.
GELFOND: So we looked at companies like Netflix and HBO, that build networks. And we said, what is their next step, what do they do beyond
releasing Hollywood films? Which is what we do.
So we said how do we migrate (INAUDIBLE) content area?
So we made a deal with Marvel, Disney and ABC to do the pilot of this new series called "Inhumans." The first two episodes will be only in IMAX
theaters throughout the world and then we will own an equity participation, not only in the movie part of it but also the TV series.
QUEST: For further distribution (INAUDIBLE) medium.
GELFOND: And it's international. And we're in 74 countries, so who else can launch a series like this all over the world?
QUEST: But the sums involved in production, in original content, as they have discovered with "The Crown," are enormous.
Have you got deep enough pockets?
GELFOND: We do, we have no doubt. We have several hundred million dollars in cash --
GELFOND: We make over a billion dollars in box office a year around the world, so we're doing OK.
I have known you for a while, Richard, so it's a fair question. We couldn't have years ago. Now we can.
QUEST: Right. But this movement into content because you and I have discussed content is king whether it is on the small screen or the big
screen, the IMAX screen, content is king.
Do you see content creation as a big future for you?
GELFOND: I do see it as a big future. When I look out, I think our core business is terrific --
GELFOND: -- and distributing Hollywood films is always going to be our main business but not only investing in content, we also have a move into
virtual reality now. And we're building a distribution platform there. So you'll be able to go see Tom Cruise climbing the (INAUDIBLE) and then you
and I can race him to the top of the (INAUDIBLE) and there is going to be a market for that.
QUEST: We'll need to do that.
Thank you, sir.
QUEST: I do need to update you -- thank you, Richard -- but I need to update you, the Japan Meteorological Agency has posted a bulletin on its
website, saying that a tsunami has been observed offshore and is expected to be higher as of course it gets closer to the coastline. According to
our CNN affiliate, NHK, the tsunami was seen 22 kilometers off the coast of Iyawaki (ph) City in Fukushima prefecture.
The warnings, as people should expect a tsunami that could be three meters high, 10 to 12 feet high, we'll have more on what the warnings are and the
possible effects. And a "Profitable Moment" after a highlight from "Make, Create, Innovate."
QUEST: Tonight's "Profitable Moment," Stanley Fischer gave us a new version of "Don't fight the Fed," when he reminded the incoming
administration that it was the independence of the Fed which was one of the strongest points of the U.S. economy. The Fed would be wise, Fischer says,
to make these warnings to the administration and the administration would be wise to listen to what is being said.
And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it is profitable.
And we will continue to update you on the earthquake in Japan.