Return to Transcripts main page
QUEST MEANS BUSINESS
U.S. Stocks Plummet on Trump Crisis; Saudi Finance Minister Says Trumps Visit Will Cement Relationship; Undercover in the Heart of Venezuela's Crisis;
Aired May 17, 2017 - 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: A rout on Wall Street. The Dow Jones of the low point of the session, off 1.75 percent, ironically on a
day that the New York Stock Exchange itself rings the closing bell, celebrating its 225 birthday. A strong gavel. Just look at the sea of red
before we show you the date. Down 1.75, 368. That will tic for a bit longer. The lowest point of the day. It is Wednesday. It's May the 17th.
President Trump's credibility crisis now spreads from Washington to Wall Street. How deep is the crack?
Closer relations with Saudi Arabia. The kingdom's finance minister says the president's visit will seal the deal. You'll hear him on this show.
And digging through the trash to survive. We go inside Venezuela's crisis.
I'm Richard Quest, live in the world's financial capital, New York City, where I mean business.
Today is day 118 of the Donald Trump presidency, and for the first time, we see a major crack showing on Wall Street. The Dow has just suffered its
worst fall since Mr. Trump entered the White House. In fact, it's worse fall arguably since September before the election. And it all happens on
the same day that the Senate Intelligence and Judiciary Committees have confirmed they've asked to see James Comey's memos. You'll remember this
is the one where he reports the conversations that he had with President Trump in the Oval Office on February the 14th, when he was allegedly asked
to end an investigation into the former national security adviser Michael Flynn.
Now, obviously, we're going to give you all the details on the politics of it, but QUEST MEANS BUSINESS and we need to show you exactly the business
effect of it all. Let's start. This is the Dow, it's ticking down a bit further down to where we started the show, down 1.75 points. It's the
worst point fall since September 371.
But before we get into the individual stocks, I want to show you the broader markets and I want to give you the big picture, if you like. The
Dow Industrials is off 1.75 percent. That's only 30 stocks. The broader market, the S&P 500, is down 1.8 percent. The NASDAQ composite, that's
down 2.5 percent. Tech stocks, which have been so strong of late, have led the fall. But there's more to understand about what happened today.
For instance, get in there and you'll see the dollar index. The dollar index, which was at 103 just back in October, November, is now down at 97.
That is against a basket -- DXY is a basket against six currencies that the U.S. trades with. It lost a half percent, that's a large fall for the DXY
in one day.
Gold held its own. You would expect it maybe to raise but it held its own. But this, this is the market volatility index. It's 14.75. It rose 38
percent, up four. Now look at the stocks that moved the market. Goldman Sachs was down. This is a broad based -- Goldman Sachs down 5.33 percent.
JPMorgan, 3.9 percent. They were the largest losers. Not surprisingly, if the Trump presidency is in any form of trouble, then obviously, the banks
are going to suffer, because it's the banks who are hoping for banking reform that will be passed. So, American Express was also down. But this
was broad based. You end up with Boeing down, Caterpillar, Disney. In fact, everybody was down. These were just up on frolics of their own. The
market was considerably hit left and right. We asked traders at the New York Stock Exchange what they were seeing that caused this sort of rout.
UNIDENTIFIED MALE: Once again, our markets are being dictated by Washington.
UNIDENTIFIED MALE: The stuff that came out Monday night seemed to have no impact at all. On Tuesday, yesterday, whether it's two days back to back,
clearly were having an impact today.
UNIDENTIFIED MALE: We enjoyed it on the way up, the headlines that we've seen. Clearly today we've had some negative headlines that are putting
pressure on our markets.
UNIDENTIFIED MALE: The problem is they're worried right now about policy. If he can implement the policies. If he can't implement the policies,
you'll see the market go lower.
UNIDENTIFIED MALE: I think that right now this is a one-day event.
[16:05:00] UNIDENTIFIED MALE: The real question really is, is what's going to happen over the next couple of days. Is there going to be a follow-
through to this? And is it really going to be a correction?
UNIDENTIFIED MALE: The markets have been waiting for some sort of a headline, weather from Washington or a geopolitical headline. This market
needs to take a break at some point and we're seeing that pullback today.
QUEST: Peter Tuchman, on the floor of the exchange, the issue and the question is whether or not this is a crack, is it a fissure, is it a canary
in the mine? I mean, what is today's out of the blue fall of nearly 400 points?
PETER TUCHMAN, FLOOR BROKER, QUATTRO M SECURITIES: So, you and I have been talking for the last couple of weeks that the market is completely divorced
-- any kind of interaction with what's going on out of Washington. But eventually the market is going to finally latch on to something. First
some reason, every day we had some headline come out that was questionable. It could have caused a selloff. But by the end of the day they were able
to figure it out. It's been building up, day after day.
The questionable behavior is basically putting his presidency in a state of vulnerability. I don't think it's a fissure. I think it's a crack. It's
a beginning crack. We don't know if there's going to be follow-through tomorrow. But this is a broad-based selloff. This was basically people
just deciding, I'm going to take profits. There was no short covering at fell line. We closed at the low of the day. It's the beginning of a
crack. It may disappear tomorrow.
QUEST: Now, is this, from your view on the floor of the market, is there a difference between this allegation over Comey, asking Comey to clear Flynn,
in other words questioning the independence of the FBI, is there a difference between this crisis and the previous ones that have hit this
president, this short presidency?
TUCHMAN: I kind of think so. And I think the market responded that way. I think we've been having questions about his judgment. And now we're
actually maybe going -- we're breaching the ground over to things that potentially could be actually illegal, right? They keep bringing up the
Nixon thing, right? So, I think we've gone from lack of judgment to actually behavior that could be denoted as completely illegal behavior. As
the leader of the free world, we're in a state where his -- it's not a matter of him being able to put through the tax thing and the health care
thing. It's a matter of whether he can sustain himself in that office. It just seems like this job is a little bit out of his wheelhouse, and the
forces are building up against him.
This is only one day, Richard. We could have a complete bounce back tomorrow. People could focus on something else that's more positive. But
I don't get that feeling. I kind of get the feeling, we may see some follow-through. I'm not here to predict what's going to happen. We'll
know more tomorrow. But we did close at the low of the day. It was a billion shares that traded hands. You could tell the feeling was, not
panic, but definitely people saying, you know what, I'm going to take some profits here, I'm going to hit the sell button. Go ahead.
QUEST: I'll see you tomorrow on the floor of the exchange, I'll be there, we'll see you then.
TUCHMAN: I look forward to it, Richard, good luck.
QUEST: Thank you, Peter. "QUEST EXPRESS" will come from the floor of the exchange as it does indeed most days.
The White House has a crisis of credibility on its hands. It comes down to who in Washington do you believe. I hope you can let this go. That's what
Comey's memo reportedly says the president told him in that closed-door Oval Office meeting, when there was only the two of them there. The other
two had been asked to leave the room. And it refers to the investigation into Michael Flynn.
The White House denies that it ever happened. Here you go. "I hope you can let this go."
"The president has never asked Mr. Comey or anyone else to end any investigation." Now, hang on a second. Let's just repeat this.
"I hope you can let this go." The president has never asked Mr. Comey or anyone else to end any investigation. These are the two views. Donald
Trump has still not addressed the Comey claims directly. He did seem to reference the controversy in a message at the U.S. Coast Guard graduates
(BEGIN VIDEO CLIP)
[16:10:00] DONALD TRUMP, U.S. PRESIDENT: Never, ever, ever give up. Things will work out just fine. Look at the way I've been treated lately.
Especially by the media. No politician in history, and I say this with great surety, has been treated worse or more unfairly.
(END VIDEO CLIP)
QUEST: Well, that's the view of the president. But his Republican colleagues won't or cannot now ignore the scandal. The head of the House
oversight committee, Jason Chaffetz, has scheduled a hearing for next week. He says he's prepared to issue subpoenas to get hold of Comey's memos.
Senator Lindsey Graham called on Comey to testify in the Senate Intelligence Committee has already offered the invitation. And the
Speaker, Paul Ryan says he will wait for all the facts before reaching any judgment.
David Gergen is in Cambridge, Massachusetts. David, explain and tell me why this is qualitatively different than say, for example, firing the
director of the FBI, firing the acting Attorney General, releasing the information. What makes this different?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, I do think, Richard, it's a combination of things, which have added up and made this the latest
question, the Comey conversation more important. And that is, if you have back to back to back, we've had three bombshells in about a week here in
Washington, and that's been very, very upsetting, and finally now upsetting to the markets. But the Comey firing, and then we found out that the
president disclosed top secret codeword intelligence to the Russians of all people, and in the Oval Office, and then on top of that, of course, here
this memo that's damning, if it's true.
What's also very different, Richard, is that we're now in new territory. Before, the president had the discretion to fire Comey. The president had
the discretionary power to disclose information to the Russians. As bad judgment as he may have shown, he was well within his legal rights in both
cases. In the third case, telling Comey to basically not go after General Flynn. The president may have, you know, gotten himself into questions of
obstruction of justice. There are many lawyers now, constitutional lawyers, who think that that is a serious question, of whether, under the
federal law, if you corruptly -- if you corruptly impede or influence an official proceeding, that's obstruction of justice. And what we also know,
Richard, and I've gone through this, I've been through two presidents over these issues, obstruction of justice was at the heart of the impeachment
proceeding launched against Richard Nixon and why he quit.
Obstruction of justice was one of the key charges against Bill Clinton when the House, outrageously in my judgment, House Republicans impeached him.
So, obstruction of justice for a lot of people who have any memory of things is, this is a big deal and what it's going to mean. Next week we'll
have more hearings, we'll have more memos, there will be more stories. The controversy is going to rage on. And I think if you're on Wall Street,
you're saying, whatever happened to the possibility of getting health care?
I don't think you're going to get it anytime soon. Tax relief this year now looks increasingly unlikely. Earliest, next year. Regulatory reform,
getting Dodd/Frank, and dealing with all that, is going to take more time than people expected. The elements that went into the so-called Trump
rally are now turning the other way. And I think it's fairly natural that after being protected, having a wall between Wall Street and Washington,
that wall is coming down. And what's happening in Washington is having a negative impact on Wall Street.
QUEST: We're going to stay with you because this is important material. David, the idea here that what has happened, it's also raised the issue of
the competence and whether the suitability. People are -- look --
GERGEN: I agree.
QUEST: You are better plugged in than anybody else we talk to. You tell me, sir. Are the people who used to whisper, "Is the man up to the job"
now saying it openly?
GERGEN: Much more openly. And disturbingly, I had a conversation with someone who knows him really well and said that he thought, rather than the
president stabilizing, he thought he was becoming more isolated in the White House, more frustrated with the power and the people around him,
their competence. And frankly, more irrational. My hope is -- I really want this president to succeed, as someone who has worked in the White
House on several occasions, I believe very strongly it's important for the country for our presidents to be effective.
QUEST: OK, but David --
[16:15:00] GERGEN: It deeply disturbs me to say this, but I think there are real questions about his fitness right now.
QUEST: All right, but if that's the case, and we can discuss how bad the situation is and we can debate all these issues, but the issue becomes what
you do about it. I mean, he's there for four years.
GERGEN: I agree.
QUEST: He's there for four years, unless he's either impeached or resigns. I mean, that's the bluntness of the situation, or he cleans house and
brings in people like you to run a professional operation in the West Wing.
GERGEN: Well, he may need to strengthen his staff. I think there are definite things you can do to strengthen that staff. However, having said
that, you know, leadership starts from within. It starts at the top. And I think he has to look at himself. There's an old joke, if I may use this,
it's not a joke in time. But there are no jokes. How many psychiatrists does it take to change a light bulb. Answer, only one, but the light bulb
must want to change. You know, there's not much evidence that in this case the president wants to change very much. That's disturbing.
I do think, yes. What Democrats are increasingly talking about, Richard, is they understand there's not going to be an impeachment proceeding with
the Republicans running the House of Representatives, it's not going to happen as a practical matter, whether he broke the law or didn't break the
law, it's extremely unlikely to happen as long as Republicans control the House.
But the chances are now emerging that the Democrats could conceivably pull off an upset, and it would be a major upset to take the House back in 2018.
And after that, they then could launch impeachment proceedings. There are serious lawyers in this country, including the constitutional scholar
Laurence Tribe, who has been here at Harvard for a long, long time, who are now laying the groundwork with court cases, trying to amass evidence that
they can get proceedings started in the courts so there will be something ripening already by the time of the 2018 elections.
QUEST: Good grief, 2018 is a long way, we're only four months in.
GERGEN: A long way away.
QUEST: David, thank you as always, sir, we're very grateful. Thank you.
GERGEN: OK, Richard, it was great to talk to you.
QUEST: The White House wanted to talk about tax reform on Capitol Hill today. The reality was very different. And then Paul Ryan says things are
still on track.
QUEST: The markets our nervous today about Donald Trump's tax plans and what might happen. The House Speaker, Paul Ryan, does not share their
pessimism. While on the Hill he insisted, everything was still on track despite all these controversies.
(BEGIN VIDEO CLIP)
PAUL RYAN, U.S. SPEAKER OF THE HOUSE: People in America turn on the TV and they think this is all that's happening, this is all we're doing and all
we're discussing. That's just not the case. I want the American people to know that we're busy, hard at work fixing their problems. You just heard
the chairman of the Ways and Means Committee talking about moving down the path of getting comprehensive tax reform done. Because we know it's really
important to unlocking economic growth and competitiveness for American companies.
The point I want to make here is -- you've heard me say this before -- we're going to walk and chew gum at the same time.
(END VIDEO CLIP)
QUEST: Richard Clarida is PIMCO's global strategic advisor. Methinks he talked, protests too much.
[16:20:00] RICHARD CLARIDA, GLOBAL STRATEGIC ADVISER, PIMCO: Perhaps a bit so. It's hard to tell if this is just a one day story, probably not. But
Richard, for the last couple of weeks we've had this tension. The U.S. data has been soft. Market pricing is frothy, shall we say. And politics
has sort of been supportive. Eventually we'll get a tax cut. Markets like that. I think what the issue today -- there is uncertainty and people are
starting to challenge the whole politics will deliver the tax cut.
QUEST: Why is the economy softening? We know it is from Q1. But the unemployment numbers remain strong, unemployment remains low. What is
driving this weakness that could push growth down to 2ish 2.5ish?
CLARIDA: I think that's the big issue. So, data was soft in Q1. The hope and expectation is we get a rebound in Q2. It's fair to say the data has
been on the soft side. Auto sales are starting to tail off.
I think right now we're in a situation of expecting a rebound but waiting to see it.
QUEST: What's driving that softness?
CLARIDA: I think a couple of factors. I think that the fact is that the U.S. is now relatively late stage of the business cycle. I think the
consumer has not been spending, as many people thought. Income gains are strong but the savings rate is up. And so far, you know, the sentiments,
the frothy sentiments have not translated into aggregate demand.
QUEST: If you're right, and I don't doubt that you are, to be late in the cycle at 2.5 percent and never having achieved 3 or 4 percent, certainly 4
percent, this does not bode well for the president. You can juice the economy up with tax cuts and with other things, maybe to 3, 3.5 percent.
But you can't get that through against deficit hawks if at the same time, you are weakened by political scandal.
CLARIDA: And I think that is the issue. I think the other thing, Richard, initial the focus and perhaps hope was that we would have a tax reform
package like 1986. I think more and more, as this gets more complicated, it looks less like tax reform and more like tax cuts. Although that helps
some folks, it's not going to be the boost for the economy.
QUEST: Tax cuts are easy to do. They may be political difference of opinion. Tax reform is very difficult to do.
CLARIDA: We do it like every 30 or 50 years. It is hard to do. I think there was some hope, given that Paul Ryan had a plan, there was bipartisan,
Republican control of Congress that it would happen. Some said August of this year. It probably won't even happen this year. It's getting pushed
out. News coming out of Washington today further complicates the political story.
QUEST: What are you telling your people about the current situation vis-a- vis Washington and Wall Street?
CLARIDA: Sure. I think what we've been saying really all year is that the markets were getting ahead of the reality of what we were likely to see
coming out of Washington. This is a 2 percent economy right now, it's not a 3 or 4 percent economy. As you said, it would be a challenge to get
there. And the more noise that we see and the less substance that we see, the more likely it is that we stay as a 2 percent economy, which is OK, but
that's where we've been for seven or eight years.
QUEST: And that's not what the president promised.
CLARIDA: Exactly. Thank you.
QUEST: Good to see you, sir.
CLARIDA: Good to see you, Richard.
QUEST: Manufacturing and mining. There are two sectors that catch the president's attention. Much less has been said about retail, particularly
bricks and mortar retail which we now know is in deep crisis. Today Target reported a rise in earnings and revenue for Q1. But don't be fooled, same
store sales, which is the important number, fell 1.3 percent. It's a trend across the industry. Target's chief exec, Brian Cornell, said, no one was
doing any high fives in the room today.
Retail workers are bearing the brunt. Job losses -- look at them -- are far greater than in sectors Trump focuses on like manufacturing and mining.
Look at that, 32 percent, 46 percent of job losses in department stores. All in all, no secret, but maybe it's a bit hidden that Americans are doing
more and more shopping online. And when big retail names like Macy's and JCPenney's have shut dozens, literally dozens of stores, the effect is
especially chilling on the Americans mind. Clare Sebastian went to see for herself in New Jersey.
CLARE SEBASTIAN, CNNMONEY CORRESPONDENT (voice-over): There are few things quite as eerie as an empty mall. On a recent Tuesday afternoon at the
Burlington Center mall in New Jersey, we found just 24 stores open out of 118 retail spaces.
PAUL LUCCA, OWNER, VUTT OPTICAL & SUNGLASSES: It's sad to me because I had to leave $2,000 of mirrors there, all the improvements. It was very
SEBASTIAN: After 13 years, Paul Lucca packed up and left his eyewear store six weeks ago.
LUCCA: I was always a big advocate of the mall, I thought it was a gold mine. The location is perfect. It has great parking. It has everything.
It's just that it had to change and it didn't change. It stayed with its model of 1980. And that's not working anymore.
SEBASTIAN: A few doors down at Muskan Eyebrows, they're worried.
[16:16:25] UNIDENTIFIED FEMALE: It seems like, hey, let's leave this place as stagnant and let the small companies do what they have to do.
SEBASTIAN (on camera): What's happening here at Burlington is happening at more and more malls across America. The pressure from growing internet
sales, traditional mall stores are closing in droves. This, for example, was a Macy's. That shut down in 2010.
(voice-over): Many here feel that was the beginning of the end for Burlington. Another anchor store JCPenney followed in 2014. Both JCPenney
and Macy's will close dozens more stores in the U.S. this year, helping put around a quarter of America's 1200 malls at risk. According to commercial
real estate firm Costar.
(on camera): Are there too many malls in America?
STEVEN MAKSIN, CEO, MOONBEAM CAPITAL INVESTMENTS: Way too many malls.
SEBASTIAN (voice-over): to Steven, who owns Burlington and around ten other malls around America, it's an opportunity. Plans include offices,
restaurants, even a warehouse for an e-commerce company.
MAKSIN: If we're going to be able to do our plan, we'll bring thousands and thousands of jobs to Burlington.
SEBASTIAN (on camera): You bought it in 2012. It's now 2017.
SEBASTIAN: Why is it taking so long?
MAKSIN: The retail environment has changed so drastically since 2011 and `12 until now, that the original plan that we spent significant time and
resources on developing proved to be inadequate. We had to scratch those plans and start all over again about two years ago.
MAKSIN: The retail environment has changed so drastically since 2011 and 2012, until now, that the original plan that we spent significant time and
resources on developing proved to be inadequate. So, we have to scratch those plans and start all over again about two years.
SEBASTIAN (voice-over): Paul Lucca says he got tired of waiting. He now has a new store and has expanded his eyewear business, adding a
LUCCA: You have to adapt. We adapted by changing the actual whole structure of the company.
SEBASTIAN (on camera): So, retail is not enough?
LUCCA: Retail is not enough.
SEBASTIAN (voice-over): A painful lesson for malls like Burlington.
Clare Sebastian, CNNMoney, Burlington Township, New Jersey.
QUEST: You're watching QUEST MEANS BUSINESS tonight. There are so many aspects and avenues of all this that we need to cover, whether it be the
Comey firing or indeed the allegations that he tried to interfere, that the president tried to interfere, or indeed the simple question of the release
of significant information. After the break, the Russia investigation. We'll be talking about that.
[16:30:00] QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment, when Saudi Arabia's finance minister tells us
what he expects from Donald Trump's visit. The first foreign trip later. It's a CNN exclusive. And our special undercover report from Venezuela,
where people are digging through trash to survive. Before all of that, this is CNN and on this network, the news always comes first.
The Dow Jones has closed down 373 points, the biggest fall of the Donald Trump presidency, as the drama in Washington and worries that President
Trump may not be able to implement his policies continue to push the market lower and markets around the world are following.
Vladimir Putin has offered to provide a transcript of the meeting between President Trump and Russian Foreign Minister Sergei Lavrov.
Police are combing through video of a brawl involving the Turkish ambassador in Washington. A state department official says it appears to
be a mix of security from the president's team involved in this violence.
[16:30:00] Japan's princess Mako plans to give up her crown to get married. She's set to become engaged to a paralegal and a rad school student. Under
Japan's imperial law, it requires the princess to leave the royal family to marry a commoner. Mako is Emperor Akihito's granddaughter.
The investigations into President Trump and his staff and their connections to Russia are gathering apace. And they're now starting to overlap. For
instance, the senate intelligence committee is asking Comey to testify, one of four investigations on Capitol Hill at the moment, focused on Russian
influence on the election. The FBI -- so you've got congressional over here, the senate, and the house. The FBI investigation is focused on the
election interference and the Trump collusion. Congress, FBI, pentagon. Also, investigating Michael Flynn. Wherever you go in Washington, it seems
there is an investigation of one sort or another, into what Donald Trump has been up to and maybe allegedly what relationship there is to all of
this with the Russians. Now, professor Alan Dershowitz, this is the pentagon, the FBI, and congress. Professor Dershowitz is with us, good to
ALAN DERSHOWITZ, LAWYER: Good to see you.
QUEST: Now, before we come to your plan or your suggestion, long experience, I don't want to say how long, but you've certainly seen a few
crises in Washington, I think we can agree on that.
DERSHOWITZ: I have.
QUEST: How bad is this?
DERSHOWITZ: I remember vividly the Lincoln Douglass -- no, I wasn't there for that. I start my crises basically with Watergate. This is not even
close to that, because we don't have a president doing anything unlawful. He's not destroying tapes. He's not tearing up subpoenas. He's firing the
head of the FBI. He has a constitutional right to do that. He's asking the head of the FBI to drop an investigation. It's a unitary executive.
In the old days, the president would tell the FBI who to investigate and who not to investigate. Now, I don't remember this personally, but when
Thomas Jefferson told the attorney general, go after Aaron Burr, and if you don't get him, I'm going to have consequences.
QUEST: There is questioning about whether there is obstruction of justice.
DERSHOWITZ: It's not
QUEST: The president provided Comey interpreted it as just a request or a comment from the president, if you can do this, please do it, not a threat,
I want you to do it. Then he has committed an offense.
DERSHOWITZ: Of course not. I do this every day. I go to prosecutors and say, my client's a good guy. Sometimes I have to put my fingers behind my
back, crossed, when I say this, he's a good guy, lay off him, end this investigation. Now, he's the president, when he asks you to do him a
favor, it may be more like the godfather saying, I have an offer you can't refuse. But on the other hand, he is the president. He is in charge of
the executive branch. The FBI is part of the executive branch. Being the president cuts both ways.
QUEST: What about the Russia issue?
DERSHOWITZ: The whole issue has to be subjected to an independent commission set up by congress. Remember when the "Challenger" crashed,
everybody was suspicious, what was wrong with it? They got the world's greatest scientists, lawyers. They looked to the bottom to get the truth.
Nobody was pointing fingers.
QUEST: But that wasn't political.
DERSHOWITZ: I understand. It could have been political.
QUEST: They wanted to figure out how deaths took place. This, you couldn't get a commission off the ground.
DERSHOWITZ: I'm not so sure. An independent counsel is Ahab going after the white whale. He has one target, and he's putting a finger of
prosecution. Prosecutors are not interested in the truth. They're interested in admissible evidence.
QUEST: Who would you have on this commission?
DERSHOWITZ: Former Supreme Court Justice, David Souter. I would have the leading chief priest, rabbi, minister. I would have a Nobel Prize winning
scientist. Nobody who has ever been in politics, people who are neither Democrats or Republicans.
QUEST: Power of subpoena?
DERSHOWITZ: Of course, crucial that you have power of subpoena.
QUEST: It's a lovely idea. Is there any hope that it will happen?
[16:35:00] DERSHOWITZ: Yes. There are Republicans who will want it because they don't want a special prosecutor. If Donald Trump would call
me, and he's not going to do it, and say how do I get out of this mess, my first question to him secretly would be, are you innocent? If he said yes,
I would say, independent commission is the best you could do, best for Republicans, best for Democrats, best for Americans, and best for the
QUEST: And best for us that you came in to talk to us about it. Thank you for talking to us, as always.
President Trump will leave on Friday, first stop is Saudi Arabia. First is Israel and the Vatican before the g-7 meetings which take place in Brussels
and Sicily. The Saudi Arabia's finance minister says the kingdom will be making significant investments in the United States, the details to be
announced during the trip, Trump's visit. CNN's John Defterios spoke to the minister, it is an exclusive interview and I asked him if the visit
will give a lift to the deputy crown prince transformation plan at home.
MOHAMMED AL JADAAN, SAUDI ARABIA, FINANCE MINISTER: This visit, the president has gone to cement the relationship more. Having the private
sector respond to one of our key initiatives in Saudi Arabia of having the private sector participation grow in our GDP from where it is now to 65
percent. This the obviously one way to showcase opportunities in Saudi Arabia. And we have a lot of opportunities that U.S. companies can tap.
JOHN DEFTERIOS, CNN CORRESPONDENT: We've heard of $100 billion in arms deals at least, $40 billion into infrastructure spending. But does the
door swing both ways, U.S. money coming into the Saudi economy to help the 2030 plan?
AL JADAAN: There will be significant investment from Saudi in the U.S. also there will be significant benefits to Saudi. There will be employment
in both, there will be investments on both sides. You will see it when the deals are announced in a few days' time, that there are significant
investments in both sides.
DEFTERIOS: You made quite a policy U-turn by reinstating the salary cuts for workers. Is this weakness or wise?
AL JADAAN: This is a very interesting question. What we have done over the last 18 months are significant reforms. A lot of reforms, including
one of them is the allowances for the employees. And it was then at the time, when we were really worried about the oil price, worried about
various stresses in the economy, the king decided that maybe it's about time to inject more funding into the people's hands so that it will help
DEFTERIOS: Tell us about the excise tax or a syntax on tobacco products, for example, even a tax on non-resident Saudis for income.
AL JADAAN: We are moving with our friends and brothers from the GCC, and we are going to implement excise.
DEFTERIOS: But a nonresident income tax would be revolution.
AL JADAAN: We won't be implementing that until `20 or beyond, we are not introducing income tax on our people, on residents, on expats.
DEFTERIOS: If we're still having the conversation in `20 about 50 or $55 oil and Saudi Arabia surviving, has the plan failed?
AL JADAAN: We would not really care much whether the price is 40, 45, 50, $55 at that time. We are planning to be living totally the dependency
we've been living in in the last 40 or 50 years. Hopefully by 2030, I wouldn't care if the oil price is zero, although I would like it to be at
DEFTERIOS: We've seen pricing increases for petrol, water, power. Are the Saudi people really willing to stick with the plan of the deputy crown
AL JADAAN: They understand that the oil revenue that is a fluctuating price can't be a sustainable means of supporting the economy. We really
need Saudi Arabia to act like the leaders. We need to utilize all of these to enhance our economy and make it thrive, make our people live a better
QUEST: The political and economic crisis in Venezuela is reaching a breaking point. Its once vibrant capital is a shadow of its old self.
People are desperate. We'll have a report from Caracas. It's disturbing but it shows you the depths to which people will now go just to live.
[16:40:00] (COMMERCIAL BREAK)
QUEST: The UN Security Council is discussing the crisis in Venezuela. For the very first time, I know it sounds extraordinary, U.S. Ambassador Nikki
Haley said the country is on the verge of a humanitarian crisis. The names on the crosses you see in this protest are in memory of those who have
died. The government says it's sending 2,000 national guard troops to its border with Colombia. CNN's Nick Paton Walsh went into Venezuela
undercover, we'll see your report in a second or two, but tell me what we need to know.
NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: It feels like the whole crisis is entirely man made. The utopia went wrong because of
the oil price crash. A family's weekly wages are worth 13 coconuts. Now some of them are eating trash.
WALSH: Venezuela's dark lurch into poverty and chaos is in display. This food truck breaking down for mere seconds before it was looted. Basic food
is scarce. No shortage of bleach, but long lines for bread. This crisis all created by the policies of a government that now wants to hide the
collapse, cracking down on and intimidating journalists. We had to go undercover and most of our filming was done covertly to avoid arrest.
Lives are lost as desperation meets tear gas and police birdshot. A Molotov cocktail would be too simple for a once-suave gas-rich state. This
is a sewage bomb. Mixed with gas and ammonia prepared directly for the police to throw tear gas bombs worth $60 each.
The crowd sometimes attacks when pro-government thugs on motorcycles open indiscriminately. It doesn't stop the daily battle to eat. Virginia has
been doing this for 18 months, to feed her five kids. She can't find work since she had this little one, but here sometimes finds what she calls
meat. "Sometimes I find stuffed bread," she says. Rice, meat, beans. Some people are conscientious, she says, putting it in clean bags when
putting it out.
[16:45:00] How did oil-rich Venezuela get so bad? In most countries, it's the market that sets the price of, let's say, for example, rice. Here in
Venezuela, the government decides what people pay for foodstuffs and what wages are. Because oil prices crashed globally, they have not been able to
keep one in line with the other and they ran out of money.
A bag of rice costs a month's minimum wage. Wherever you look, hunger haunts this once-proud city. This man is a juggler. He was beaten heavily
in yesterday's protests. Now he's begging for food when we found him. He says he spent two days on the street and two days at home. He says, before
I get calls to do magic parties but now with the country the way it is, magic doesn't help. They mourn the dead, indignant. South America is
looking to see if Venezuela can fix its crisis without major bloodshed. They're falling so far, so fast, and the ground is getting nearer.
QUEST: You have been in many difficult, unpleasant, ghastly places in your career.
WALSH: And I'm here now.
QUEST: Quite. Thank you. What was it about this place that got you?
WALSH: Because it's so avoidable, really. Yes, there's poverty there. Yes, there's problems with the economy. You really would think, frankly,
they could have sorted this out. It's all about the way the company needs to be run.
QUEST: Is there any indication that Maduro will run? As long as he has the security forces, are daily protests having any effect?
WALSH: No. I've seen lots of countries where the country is on the brink of losing power. They're not organized or in large enough numbers to make
Maduro leave his office.
QUEST: Once the treasury is bankrupt and the country does go bust, which can't be that far away, if you look at the levels of foreign reserves, what
does -- what does cause a climax on this?
WALSH: It normally is the soldiers. The security forces have enough of going out and beating their own people. I think we're close to that point.
We're seeing them be deployed, as you mentioned, 2,000 to the border province. That's possibly the government turning the screw a little too
far and it's whether or not that causes things to crack within the loyalty. It always comes down is this soldier willing to fire that tear gas at
somebody whose protest, frankly, he totally agree with.
QUEST: Tomorrow what do you have for us?
WALSH: More on the health crisis, sadly. It's pretty bad. This is a country which was sophisticated and first world in its medical treatment.
Now we report on a 14-year-old girl who had to have her leg amputated because the cancer, which normally would have been treatable, had spread up
QUEST: Good to see you, thank you.
The fallout of President Trump's sacking of the FBI director has been brewing for several weeks. This is QUEST MEANS BUSINESS.
[16:20:00] (COMMERCIAL BREAK)
QUEST: News coverage of President Trump's firing of the FBI director reveals strikingly different approaches. To understand the reaction, you
need to understand the media landscape. There is the mainstream media, "The New York Times" and the right-wing media. "The New York Times" says
Trump asked Comey to end Flynn inquiry. The right-wing media give us a very different approach. "The New York Times" does have an element of
confidence in its own abilities to report. It does actually have a story about the fact that the right is seeing things very differently. Brian
Stelter is CNN's media correspondent. Brian, we shouldn't be surprised at this difference.
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: It's important to examine it and study it. What people are consuming, what they're reading about
these scanned affects their perceptions. We live more and more in these echo chamber, filter bubble worlds more and more. It's getting worse every
year, we all feel that in our Facebook feeds and our television lineups. People are choosing their own realities more and more.
QUEST: Right. And the interesting thing is, I talked to some friends, colleagues, whatever, they will say "The New York Times" would say that,
wouldn't they. And they would say, you know, Fox News, for example, or Breitbart News, they have a true version and we are fake news. How do you
answer the question, when people look you in the eye, Brian, and say, come on, you just work for fake news?
STELTER: You're getting closer. There are many options for media and none of them, whether it's Breitbart or CNN or "New York Times," are fake. The
only fake news are stories that are made up to trick you and deceive you. Normally there is a wide spectrum of news outlets that are trying in
various ways to get it right. I would even include Breitbart. Breitbart what's a clear political bent.
QUEST: If you take this latest thing, the White House says that the president did not ask for Comey to stop Flynn. The memo, we haven't seen
it yet, says that he did. We haven't seen the memo yet. How does one report this in a way that the viewer or the reader is not left just
thinking, well, I don't know what's happening here.
STELTER: Number one, we do emphasize what we don't know as well as what we do know. We explore why we believe these anonymous sources are telling the
truth, why we have confidence in the information. And we point out the credibility issues this White House has. In conservative media, I see
three types of reactions. What you were just showing. Number one, just deny it. Go with the White House line, say it's not true. Number two,
deflect it, say there's bigger, more important things going on. Number three, distract. Diminish the story and say it's not that big a deal.
We've seen versions of all three of those reactions.
QUEST: But "The New York Times," where you used to work in a different life, today I read their editorial on the Trump thing, it basically talks
about the end of a presidency, their opinion piece. "The New York Times" has been splenetic about the presidency ever since before he was elected,
they couldn't say a good word about this presidency. So, when you read it, surely one is entitled to say they would say that, wouldn't they, they
can't stand the man.
STELTER: When it comes to editorial borders in "The New York Times" or "The Wall Street Journal," left-leaning outlets like "The New York Times"
editorial board, yes, there has been a critical reaction to Trump. It does not mean they're wrong. If they say Trump's presidency is unraveling, we
should take that seriously. At the same time, we should listen to pro- Trump sites that are trying to finder a path forward for him.
QUEST: Where should we read you?
[16:55:00] QUEST: After the break, we'll have our Profitable Moment.
QUEST: Tonight's less than Profitable Moment. Take a look at the market. Down 1.75 percent. We don't know whether -- we know the reason why. It's
because of what happened today in Washington with the allegations over what did Trump tell Comey about Flynn. We know that this is a rising crisis.
It follows on from the intelligence leak. But what we don't know is whether this is a crackup or just a blip. Anybody who tells you otherwise
is simply making it up. Peter Tuchman earlier today admitted on this program that we just don't know. What we can say with a certain degree of
sincerity is that there is now serious worry and concern on Wall Street that the president's plans will not come to fruition and the market gains
had been predicated on those plans coming into place. That's of course QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever
you're up to in the hours ahead, I hope it's profitable. We'll do it again tomorrow.