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Quest Means Business
Trump Backs Plan to Curb Legal Immigration; German Car Bosses Discuss Diesel Emissions; Instagram Founder on Snapchat Battle; Dow Breaks 22,000 for the First Time; Barcelona Confirms Neymar Wants to Leave. Aired 4-5p ET
Aired August 02, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] ZAIN ASHER, CNN HOST: Everybody on Wall Street is talking about -- take a look here. We have reached yet another brand-new milestone. The
Dow reaching -- closing I should say -- above 22,000. We're pretty much in the green all day. Helped by earning season particularly Apple stock. We
are going to talk about this milestone and what it means a little bit later on in the show.
My friends it is Wednesday, August 2nd. German car maker meet to clean up emissions and their image as the Tesla treat looms. And President Trump
backs sweeping changed to legal immigration. We'll assess the Trump effect on migration and tourism. And hashtag no filter. Mike Krieger, the
founder of Instagram speaks exclusively to CNN about being competitive with Snapchat.
Hello everyone, I'm Zain Asher and this is QUEST MEANS BUSINESS.
Good evening everyone. So, we finally made it. Breaking the 22,000 barrier today just by a tiny bit closing at 22,015. It happened minutes
after the opening bell, around 9:30 in the morning, my time here in New York. And that was down to better-than-expected profits during this
earning season. We have been talking about how earnings have pretty much trumped politics when it comes to breaking milestones and pushing the Dow
to record highs. Now if you track the Dow over the course of the day you can see it was hovering just above and below that milestone, 22,000, all
day.
Let's take a look at some of the stocks that actually got it there. Of course, there is Apple to begin with, where investors cheered a very rosy
outlook. And then, the second stock, McDonald's come back under Steve Easterbrook continues to please Wall Street. McDonald's share price is up
nearly a third so far, this year.
So, walk with me over here because I have something to show you. A brand- new milestone, of course, as you can see means a new hat. These are a fixture at the New York Stock Exchange. Every single time a new milestone
is reached -- it's a tradition that goes back 20 years or so. So, for example in 1999 when the Dow first reached 10,000 you see here a picture of
the New York Stock Exchange chairman at the time, Dick Grass and Rudy Giuliani basically wearing those Dow 10,000 hats. Really to show so much
excitement ahead of the dawn of a brand (INAUDIBLE).
And then -- this is important -- it actually took another 14 years, it took 14 years from that point in time when the Dow reached in 1999 to reach the
next major milestone the Dow 15,000. But now these milestones are becoming more and more frequent. They're coming up faster and faster. Basically,
this bull run guys, has really been wild. So, we've had four major milestones since Donald Trump selection. We actually reached 19,000 late
last year on November 22nd. We reached 19,000, or rather 19,000 November 22nd. So, it was three weeks after Donald Trump got elected. And then we
reached 19,999 in the first week of the year. We got to 20,000 -- I'm sure this is messing up my hair -- but anyway we got to 20,000 January 25th.
There's my hat for you. And then the next major milestone just 24 trading days later. So, you can see that these milestones are becoming more and
more frequent. We got to 21,000. And here we are today the Dow reached 22,000 major milestone. This is 109 trading days later. This is by the
way, the first time the Dow has hit three milestones in a single calendar year. What a year it has been.
Tim Anderson is managing director at TJM Investments. He joins us live now. So, Tim, you know, there's always this debate are these milestones
purely psychological? How much should we be focused on them? And why these milestones are becoming that much more frequent? Walk us through
that.
TIM ANDERSON, MANAGING DIRECTOR, TJM INVESTMENTS: Well clearly as the market goes higher the milestones become a smaller percentage of the
overall market. A thousand points at Dow 20,000 is only 5 percent. Now that being said, I think the market has a psychological aspect to it right
now. So even though a lot of this round number hype might be psychological, there's times when psychology is very important to the
market and I think this is one of those times.
I think the other thing that's very important to look at is the Nasdaq composite. On Monday, we opened close to 6400, reversed off it within a
short period of time, in the next 90 minutes or so. And the Nasdaq closed Monday near its lows of the day. This morning we opened right near 6400.
Sold off a little bit below where we were on Monday at the lows. But then rallied back sharply.
[16:05:07] And even though we didn't close above 6400 the Nasdaq closed pretty much flat on the day give or take a couple of points.
ASHER: So, Tim, here's one thing I don't understand. There's been so much talk about the fact that the focus is on earnings season. And everybody's
focused on earnings and that is why today was really all about Apple. Apple helping push the market higher. But why has the market completely
sort of shrugged off the chaos we're seeing in Washington. Why is that?
ANDERSON: I think that the market pundits have significantly underestimated the positive effect of all of the regulatory rollback that
the Trump administration has done. To the same extent that they underestimated the negative effect of all the regulations that have been
imposed during the prior eight years. And now the big debate is whether or not a tax cut is being discounted by the market yet. If you ask people in
Washington they would say, there's probably less than a 50 percent chance that we get a tax cut. And then you look at the market performance and
say, well if we really do get one, there might be significant upside even from this level.
ASHER: All right, Tim Anderson, thank you so much for joining us there on the floor. Appreciate that. Thank you so much.
U.S. official said the Trump administration is gearing up for an investigation into China's trade practices. There's been a cooling -- this
is interesting -- there's been a cooling of the President's rhetoric on the subject in recent months. As Washington looks to China to use influence
with North Korea. Now Mr. Trump seems to be losing patience and wants to put pressure on Beijing. Patrick Chovanec is a chief strategist at
Silvercrest Asset Management where he joins us live now. So, Patrick, the fact that the U.S. is launching this little trade investigation, is it a
smart move given how much the U.S. needs China especially when it comes to North Korea?
PATRICK CHOVANEC, CHIEF STRATEGIST, SILVERCREST ASSET MANAGEMENT: So, on a day like today with the market hitting new highs with economic growth and
earnings growth looking steady, is logical and a good time to ask what can derail that. And a trade war has loomed large in people's minds as
something that could derail that. But it's important to realize that he's just talking about studying what kind of steps. And there's --
ASHER: We should get ahead of ourselves.
CHOVANEC: Before we get ahead of ourselves we want to look around the next corner. But it's very difficult because there are a whole range of
different things that he can do with very different ramifications. So, remember, he's talk a lot about leaving NAFTA, doing all sorts of things,
but they haven't materialized yet.
ASHER: And also labeling China a currency manipulator. That didn't materialize because they're not. So, how does China interpret the mixed
messages they're getting from Trump? Obviously, during the campaign there was all this tough rhetoric on China. Then that sort of calm down as the
administration realized, oh wait, we need them to handle North Korea. And now it's heating up again. How do they handle the mixed messages do you
think?
CHOVANEC: Well see, this linkage with North Korea is interesting because each of these issues with China, whether it's inbound Chinese investment,
whether it's overcapacity and steel in China, whether it's theft of intellectual property, all of these are long-standing issues. And there is
an argument that the United States should push back, push harder on China on these things.
And Trump certainly during the campaign argued that he was going to get tough for economic reasons. And he actually sat a couple of months ago
that well, if China helps out with North Korea then we might go easy on these other things. And then he said, we are unhappy with -- that we're
disappointed with China and is not doing it and now are here. So, the question is are these economic priorities that he's pushing? Or are they
bargaining chips to get China on board with North Korea? What does the United States really want out of pursuing these trade measures?
ASHER: Yes, that's an important question to ask.
CHOVANEC: And if we're asking that question, I'm sure the Chinese are asking that question too and scratching their heads a bit and saying, what
is the U.S. bottom line here?
ASHER: But we just sort of put North Korea to the side for second. Let's leave them out of this. In terms of what can be done to make the practice
of American companies who do business in China much fairer especially when it comes to intellectual property. What is your answer to that?
CHOVANEC: My answer is that the chronic trade imbalance between the United States and China actually hurts China as well as United States. And that
China has realized that it needs to rebalance its economy. We need to make the case for them how they can do that, how we can be helpful for them to
do that. And sometimes that means exerting pressure. The concern is that if you make it a tit-for-tat sort of thing, you know, China has its own
politics. U.S. has politics that push it to try to get tough on China. China also has its own internal politics.
[16:10:03] Xi Jinping is going in and this fall he's going to have a big party Congress. He wants to look strong. He just led a big military
parade. He was talking very tough about defending China's interest. And in the past when the United States has launched a trade measure against
China, China has usually responded in a tit-for-tat way that targets something very vulnerable in the United States. Whether it's agriculture,
which hits farm states very hard, or orders for Boeing planes or things like that. So, they have when it's gone to WTO, China has generally
complied. WTO takes a long time. And so, the question will be if Trump actually moves forward with any of these measures what will China's
response be? Will it push back?
ASHER: And to be fair, the last thing anyone wants -- especially when you're talking about protecting Americans -- the last thing anybody wants
is a trade war. So, we shall see. Patrick Chovanec life for us. Thank you so much, appreciate that.
Donald Trump -- more news today -- Donald Trump is supporting a Republican effort to cut the number of legal immigrants to the United States. The
bill which faces plenty of opposition in Congress proposes moving to a skills-based, or a points-based system of immigration. Mr. Trump says
applicants would get a high score if they can, number one, speak English. Number two, support themselves financially, and number three, if they have
skills to contribute to the economy.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: For decades, the United States was operated and has operated a very low skilled immigration system.
Issuing record numbers of green cards to low-wage immigrants. This policy has placed substantial pressure on American workers, taxpayers, and
community resources. Among those hit the hardest in recent years have been immigrants, and very importantly minority workers competing for jobs
against brand-new arrivals.
(END VIDEO CLIP)
ASHER: And Kaitlin Collins is at the White House. She is joining us live. So, Kaitlin, what do people actually need to know? People who are thinking
about immigrating to the United States. People who are looking to potentially apply for a green card. What do they need to know at this
point in time?
C, CNN WHITE HOUSE REPORTER: Well, right now we're just at the stage where the president has thrown his support behind this bill. It hasn't gone
anywhere yet. It's going to be met with a lot of skepticism from Democrats and those Republicans who live in moderate states with a large immigration
population. But basically, the President is casting this as a way to protect American workers by reducing the number of low skilled immigrants
who are allowed into the country. Because he thinks that number has increased too much over the past few decades.
This essentially would be a points-based system that gives you extra credit for being able to speak English. Financially support yourself and your
family, and "contribute to our economy." But this doesn't come as much of a surprise. Because this is something the president talked about at length
on the campaign trail. He said that he thinks a merit-based immigration system would be more favorable to Americans and would protect them from
being displaced by immigrants who come into the country who he thinks are taking these lower skilled jobs.
ASHER: So, Kaitlan, obviously, we're an international program. We have people watching from all around the world, who maybe in the process, or
want to at some point apply for a green card. Is this bill actually likely to make it through all of the skeptics that you've talked about in the
Congress?
COLLINS: That's a great question. It would be the first major piece of legislation for Donald Trump besides those sanctions bill that he signed
this morning. So, is likely that he's going to have an uphill battle with it.
ASHER: Right, Kaitlan Collins, live for us there. Thank you so much, appreciate that.
Six months into the Trump administration and international travel to the U.S. remain strong. Official figures show the number of overseas visitors
was actually up more than 5 percent in May, from the same month in 2016. Chris Thompson is the president and CEO of Brand USA, which actually
promotes the country abroad. This is interesting because you would expect that given the number of attempted travel bands that we've seen from the
Trump administration, and also the news that we got today about this brand- new immigration policy trying to tighten legal immigration, that those figures would have been the reverse. Why is tourism in the U.S. so
resilient do you think?
CHRIS THOMPSON, PRESIDENT AND CEO, BRAND USA: So, I think may be start the conversation by saying travel as an industry can transcend politics. And
basically, when you look at the reality versus the perception of what's actually happened there's been lots of conversation by a new administration
on policy that can potentially affect travel. But as you and I are talking today, nothing about how anybody around the world gets a visa changed. And
very little about how people are welcomed into the country change -- has changed as it relates to what people's perception of that is.
[16:15:00] And our job at Brand USA, if the destination marketing organization, is to promote the entirety of the United States. And also
communicate accurate and timely visa and entry policy, which are the things that dramatically affect people's abilities to get here. And very little
has actually changed legally, although there's been lots of conversations about what would happen.
ASHER: But in terms of the U.S. reputation abroad, in terms of the reputation, how people see the country in terms of how much they welcome
immigrants. Hasn't that change? And do you think that change might indeed affect tourism at some point in the future?
THOMPSON: So, here's what we talk about, what travel means to the United States. His about the destination, the experiences within those
destinations, and us as Americans welcoming people. So, let's take each one of those. Nothing about the destination or the experiences has
changed. As a matter of fact, is better today than it was yesterday. It'll be better tomorrow than it is today, because the brands keep
reinventing themselves. Us as storytellers about what there is to see and do, get better at doing that. And when you focus on the people, all of us
are still Americans proud of our country and welcoming people. So, that makes the United States aspirational to travel from around the world hasn't
change. The destination hasn't changed. The experiences hasn't changed. There's been a lot of conversation about policy with the new
administration, but even in that regard what has legally changed --
ASHER: But do you fear that it will change?
THOMPSON: The numbers show differently. Actually, when this all started, the conversations about policy, it was talking about leading indicators.,
So searched to the United States was softer, down. Advance bookings to the United States were softer, down. So, the numbers you just quoted suggest
that the reality of whether people are actually choosing to come or not is actually to the contrary of that. So, the numbers where you've said that
travel in May was up 5 percent, in April was up 6 percent. The U.S. Commerce Department just released its numbers in January. Travel from
around the world is up 2 percent.
So, the numbers of whether people are coming or not have actually held firm and speak to the contrary of what people were speculating on the front end.
ASHER: And just quickly, President Trump, obviously, talks about jobs, jobs, jobs. That's his focus. How important is the American tourism
industry when it comes to the U.S. economy?
THOMPSON: Most people don't think about travel as an export, but that's exactly what it is. So, as a service export, it's 1/3 of everything the
United States exports. It's 11 percent of the largest economy in the world exports is tied to travel and tourism. So, it is one of the things that
fuels our nation's economy and employs millions of people around the country. And it is one of the things that can actually continue to benefit
the United States in this administration as they onboard themselves.
ASHER: All right, Chris, thank you so much. Appreciate you being with us.
The biggest automakers in Germany have met in Berlin as they try to save the diesel car from falling into the abyss. And electric cars may be the
future, so do they make any money. Tesla's earnings are due out literally any moment now. We'll bring that to you when we get it.
(COMMERCIAL BREAK)
ASHER: Welcome back everybody. The bosses of Germany's biggest carmakers have met in Berlin as they try to come up with a way to cut diesel
emissions.
[16:20:06] Volkswagen admitted -- of course, remember in 2015 that it rigged engines to deceive official testers and make them appear cleaner
than they really were. Earlier audio executives vowed to take action.
(BEGIN VIDEO CLIP)
HARALD KRUEGER, CEO, BMW (through translator): we are clearly committed to the measures suggested today. I would like to emphasize that the BMW
makers were not rigged.
MATTHIAS MUELLER, CEO, VOLKSWAGEN (through translator): NOx emissions will be cut considerably and the air quality will be improved. We will offer an
exchange premium and we will announce the details about this in the coming days.
DIETER ZETSCHE, CEO, DAIMLER (through translator): Many people think that the NOx admissions has been increased in the past, but it's the opposite.
Since 1990 we have reduction in traffic NOx by 70 percent, in this has been confirmed by the authority.
(END VIDEO CLIP)
ASHER: Chris Burns is joining us live now in Berlin. So, cutting diesel emissions in Germany a tall order, Chris. What exactly is going to be done
from this point onwards? And who -- this is the big question -- who is going to pay for it?
CHRIS BURNS, JOURNALIST: Well, Zain, this was a major meeting today between the heads of the seven major automakers. Seven German states that
host those automakers and a number of German ministers, government ministers, they battered out this agreement. And is seen as a first step
by all those participating, 5.3 million diesel cars will get an update in their software that will reduce the auto omissions that they have. Will
that be enough though? What we understand is that this will reduce those emissions by about 25 percent. Will that be enough to stop the diesel ban
that is going on -- that will start in January in Stuttgart, for instance.
Will that stop other diesel bans that are in the offing? That is a big question. Will it placate a lot of people who would like to see their cars
refitted completely? Now just that update of the software is going to cause hundreds of millions of euros. Refitting those cars to really reduce
those emissions could cost billions. And that is what the German automakers are trying to avoid. They've already taken a big hit since that
diesel scandal started out in 2015. Now what's going to happen, will there be enough action?
And we also keep in mind, we've got these elections coming up. Some of those people -- some of those parties could suffer in that election if
there's not enough solution that the voters seek. We saw two polls coming out in the last couple of days. One showing 38 percent of Germans surveyed
have lost faith, do not trust the German automakers anymore. More than 70 percent think that the German policy, German government policy, regarding
the environment favors German industry, German auto industry. So, Zain, this doesn't bode very well for both the politicians and the companies
involved today.
ASHER: All right, Chris Burns, thank you so much, appreciate that.
German carmakers are facing another threat. For years BMW, Mercedes, an Audi virtually had a lock on the premium end of the auto market. But now,
Tesla is barging in and threatening an important industry that's a source of pride for Germany. I'm joined now by Rebecca Lindland, a senior
director at Kelly Blue Book. So, before we get to Tesla, Rebecca, I do want to ask, how much have Germans really sort of lost faith, lost faith in
their auto industry? Especially given the number of scandals we've seen so far.
REBECCA LINDLAND, SENIOR DIRECTOR, KELLY BLUE BOOK: Yes, as Chris just said a few moments ago, the numbers are pretty dire when you think about
Germany itself. It's quite different when we look at the U.S. market. So, were still seen strong sales for German products like BMW, Audi and
Mercedes. And so, we've actually seen a resurgence in Mercedes in particular. So, Americans still like there German cars and still like
their petrol cars. So, we'll still take them.
ASHER: But in terms of German car companies losing market share to electric car companies, how is that sort of playing out in Germany?
LINDLAND: Playing out in Germany?
ASHER: Right, yes.
LINDLAND: So, in Germany it's the challenge -- Germany is facing similar challenges that we are here in the States when it comes to electric
vehicles.
[16:25:00] They tend to heavily incentivize. We have to offer -- you know, the government basically has to offer a sweetness to the pot for people to
purchase an electric vehicle. There's a lot of range anxiety. People say, when my going to be able to recharge it? Where can I recharge it? So, we
have infrastructure issues in Germany as well. Especially when you think about the congested cities. It's really hard to retrofit and get charging
stations there.
Now, with the vehicle like the Tesla that has upwards of two, 300 miles of range, arguably you shouldn't have range anxiety per se. But you still
need to be able to go someplace and recharge that vehicle. And that's not a five-minute process like it is with a petrol vehicle. You're looking at
a minimum of 30 minutes, and you get about 150 miles range, and then you need another 30 minutes to get even more than that. That's assuming you
have a supercharger. If you're doing it at home it can take hours.
ASHER: So, there is an infrastructure issue in Germany. But I do want to talk about how other European cities are dealing with diesel emissions. We
know that Paris, Madrid, Athens have all pledged to ban diesel vehicles by the year 2025. Do you see a lot of German cities going in that direction?
Or is it too early to tell, what are your thoughts?
LINDLAND: It's very complicated. And of course, it's very ironic as well. Because for years the regulators pushed German vehicles, diesel vehicles in
particular. So, they had lower registration. They had lower taxes, the fuel was less that a gasoline vehicle. So, this is sort of a problem of
the regulators own making. And now they're trying to backtrack on it. But we certainly have to do something. And one of the things that came out of
the agreement today or the discussions today, was that they were going to spend hundreds of millions of euros in investment in upgrading buses, in
modernizing cities for bike lanes, in trying to facilitate less use of vehicles. Which even as an automotive analyst I'm in favor of doing.
Because we do have to get cleaner air. So, I like that investment that's coming a lot.
ASHER: Yes, I'm all for public transportation and greener -- I actually walked to work every single day. I'm a green person.
LINDLAND: How lovely.
ASHER: All right, Rebecca, thank you so much, appreciate that.
LINDLAND: Thanks, Zain, very much.
ASHER: North Korean missiles could pose a risk to passenger jets. On Friday, Pyongyang test fired a long-range missile that splashdown east of
the Korean Peninsula. According to online flight data and Air France flight jet was in the air about 100 kilometers from that spot. However,
Air France says, North Korea's missile test zones do not interfere with its flight path. David Soucie is CNN's aviation safety analyst. He joins us
live now from Denver. David, it's been a while.
So, here's the thing. As these sort of North Korean missile tests become more and more frequent, and obviously, there is no warnings issued, what's
going to be done in terms of securing aviation safety?
DAVID SOUCIE, CNN SAFETY ANALYST: It's a very complex issue in that North Korea does not belong to the IKO states. It's not part of the agreement
that says that they have to notify of what they have on the ground and what they're doing that might interfere. So, picture the problem -- although
the probability of having an intersection, a collision between an ICBM and an airplane is very remote. Billions to one. But yet at the same time it
still has to be considered the bigger picture. The worst thing that's going on, which is that North Korea, if they're going to play in a global
society, if they're going to be part of the global world, which he's trying to be, he needs to understand he's got to get his big boy pants on and play
like the rest of us. If he's going to be playing with these types of missiles.
ASHER: You mention the chances of an ICBM colliding with an airplane is a billion to one. Obviously, the chances are very, very small, but I can't
help but be reminded of what happened with MH-17 just three years ago with that boot missile. So, how worried -- people watching this program all
around the world, particularly in Asia, how worried should people be?
SOUCIE: I don't think there is a great deal of worry, because the airlines themselves are assessing this risk. The airlines themselves know what the
risks are if they fly through that area, which I have to mention, very few do. Very few airlines actually go through that area. That area is very
open and has been for years. The French have put out a warning saying, please don't fly in this area. There's two particular air routes that they
request that people avoid completely. So, there's not a big risk to people even traveling from Seoul to Japan. You're not going to be going in this
area. So, it's a very low risk to travelers at this point. It's not something I would worry about it their level. It's the airlines that need
to make sure that they are assessing this risk of what's happening here.
ASHER: All right, David Soucie, live for us. Thank you so much, appreciate that.
[16:30:00] By this point you've been enjoying tonight's program for about 1/2 an hour. That's also how long Instagram's youngest users are spending
on the app every single day. We have an exclusive interview with the founder of Instagram. That is next.
(COMMERCIAL BREAK)
[16:32:41] ASHER: Hello everyone, I'm Zain Asher there is more QUEST MEANS BUSINESS in just a moment when Instagram's founder takes on allegations
that his Copied Snapchat. And Neymar is a $262 million transfer in his science, he will have to dodge some obstacles to reach his goal.
Before that though, these are the headlines at this hour. U.S. President Donald Trump has signed a bill slapping new sanctions on Russia, Iran and
North Korea that Congress overwhelmingly approved. The measure also restricts Mr. Trump's ability to change the sanctions without Congress's
approval, that is one reason why the president called the measure unconstitutional and significantly flawed.
Venezuelan President Nicholas Maduro is set to swearing members of his new constituent assembly at any moment, this despite a voting firm saying
earlier that turnout figures in Sunday's election were inflated by at least 1 million. The assembly has a right to rewrite the Constitution giving
more power to Mr. Maduro.
And Prince Philip is wrapping up the last of his public appearances before heading into retirement, Wednesday the 96-year-old husband of Queen
Elizabeth attended a parade of the Royal Marines at Buckingham Palace. Since his wife's ascension to the throne, way back in 1952, the Duke of
Edinburgh has attended a massive 22,219 engagements by himself.
Four men have been found guilty of plotting a terrorist attack in the U.K., the group was dubbed Three Musketeers after setting up a telegram account
with that name. Police said they found evidence on phones and other devices along with a weapon discovered during other searches. Three of the
men were previously convicted in 2012 on terrorism offenses.
Welcome back. So, Tesla shares are rising right now in after-hours trade after releasing numbers that beat expectations across the board. Sales
from Tesla's car division in Q2 crossing the $2 billion mark, that is almost double the number when you compare it to the same period last year.
This all comes after the recent arrival of the model three, now whatever the numbers of this quarter or that quarter, Tesla CEO Elon Musk is a man
with a much broader horizon, as his empire expands musk is facing more and more pressure to deliver on his bold promises.
(BEGIN VIDEOTAPE)
[16:35:00] UNIDENTIFIED FEMALE: Elon Musk is getting a rock star reception as Tesla fans are celebrating the first deliveries of his more affordable
model three. Despite that sheer success is far from certain.
ELON MUSK, CEO TESLA INC.: The thing that is going to be the major challenge for us over the next 6 to 9 months is how do we build a huge
number of cars.
UNIDENTIFIED FEMALE: It has been a nonstop summer for Musk. Test of his superfast transportation project the hyper loop is underway in Nevada. His
Boring Company is out with plans for underground highways. In Space X is readying a rocket docket one day send people to Mars.
MUSK: It will be like really fun to go. You're going to have a great time.
UNIDENTIFIED FEMALE: His schedule is punishing, Musk says he suffers from terrible lows and unrelenting stress. Experts say wrapping out Tesla
production remains his most pressing concern.
SHELLY PALMER, MANAGING DIRECTOR, SHELLY PALMER: I think Tess only has one job and that is to get to 500,000 cars annually. So, 10,000 cars a week
let's go. And if they do that, people are going to have actually some opportunities to buy the car and drive the car and everything is going to
work itself out. Because it is a pretty nice car.
UNIDENTIFIED FEMALE: Tesla deliveries have been disappointing this year triggering some turbulence in the company's share price. Meantime, there
is new competition in the rearview mirror. Volvo says it will begin its transition to electric vehicles by 2019. MGM's Chevy Bolt electric car
will be sold nationwide soon. All this as Tesla continues to burn through billions of dollars in cash, investors will one day want to see results.
PALMER: When you think about Tesla and you think about Elon Musk you immediately draw a comparison to Jeff Bezos who is entitled to and enjoyed
the lowest cost of capital of any growth company in history. And you wonder if shareholders are going to give Elon Musk the same kind of pass to
go out there and change the world.
MUSK: Those are actual owners getting actual production cars.
UNIDENTIFIED FEMALE: Musk does not take investors or customers for granted. We're going to everything we possibly can to get you a car as
soon as possible. So, we are going to work day and night to do right by the loyalty that you have shown us.
UNIDENTIFIED FEMALE: He knows it is make or break time for Tesla.
(END VIDEOTAPE)
ASHER: And when Instagram decided to take on Snapchat with its own disappearing messages it was accused of being a copycat. Now year after
releasing Instagram stories the company says that is beating Snapchat at its own game. Just compare Instagram's new face filters on the left, take
a look here, with Snapchat's famous, that's Richard Quest. I just realized that is my colleague with Snapchat's famous feature, of course it looks
very familiar.
Now, Instagram says young users are spending more time with their app than they do with Snapchat's app. CNN's Laurie Segall has been speaking
exclusively to Instagram's founder and joins us now, some people it is so unfair that Instagram has found huge success with Instagram stories given
how much the company by its own commission has ripped off Snapchat.
LAURIE SEGALL, CNN SENIOR TECHNOLOGY CORRESPONDENT: But when you look at Silicon Valley, sometimes a lot of tech companies they borrow features from
each other and it's all about can you iterate, can you do it well. If you can't, it is anyone's game.
ASHER: It's common.
SEGALL: It is very common. I mean this is happened in the past, and is it can you do it well, and can you do it better? I mean it's very clear that
they took a look at Richard's face there, very clear that looked familiar but it seemed to work. Yes, there it is. It does look very similar. But
a year later, the numbers are astronomical. You have people spending 30 minutes a day on Instagram. You have this focus on video. I caught up
with Instagram's cofounder and he talked to me about the success of that borrowed feature and how the company is looking to capitalize on
authenticity.
(BEGIN VIDEOTAPE)
SEGALL: So, it has been a year since Instagram launched stories, what have you guys learned, where are you guys seeing?
MIKE KRIEGER, CO-FOUNDER, INSTAGRAM: What we were saying was all the ways in which people were kind of circumventing our product to trying to what
stories lets them do now. Instead, you can actually just feel like you need to edit every single one of those moments to share more videos of your
daily life. And that fits in very well with the product that we already have which is more about your highlights and the things that you felt like
wanted to stick around, 250 million people are using it just a year. People under the age of 25 spent 32 minutes on Instagram, and people over
the age of 25 spend 24 minutes on Instagram.
SEGALL: Face filters, live video. Disappearing messages. These were all features that were popular on Snapchat. So, what is your response to the
criticisms that you guys did this but Snapchat was there first.
[16:40:00] KRIEGER: We looked at Snapchat, they have the stories format. If we just plopped it into Instagram in the same way, it wouldn't have
worked. So, we just didn't bring stories over, we said, hey, we can bring stories but can we add hashtags to stories and even have a story that you
can watch of everything that you hash tagged in a certain way. We did take this format that was out in the world. But we made it our own by bringing
in innovations and complementing with Instagram.
SEGALL: People want these moments the kind of show behind the scenes, is that also kind of push for letting people be a little bit more authentic?
KRIEGER: It is absolutely a way of letting people be more authentic. And I think it removes one of the filters or edits that people are putting in
already on Instagram, and instead it is like this is my life, and it is perfectly edited. It can be more like straight off your video and post it
straight to Instagram.
SEGALL: What are the most challenging questions you're asking yourself now looking towards the future?
KRIEGER: The top thing on my mind in terms of big challenging questions as we scale, how do we maintain Instagram as a safe and positive space. Back
in the early days, if we spotted a negative comment or negative account, we would go shut it down. That obviously does not scale to 700 million
people. But now it is bringing to bear things we can do around machine learning and artificial intelligence specifically to break out more well-
being on Instagram. So, we have a filter that looks at harmful comments and filters amount, and you can turn that off if you want. But we believe
that is a good thing for our community to have.
SEGALL: How about Instagram's mission from the beginning was to capture photos, and then moments because you guys added video. Now it is more
about strengthening relationships, what is behind that?
KRIEGER: Kevin and I and the rest of Instagram's leadership stepped back and said, all right, why are we doing this? What matters about capturing
and sharing moments? And for us it's really about those connections and those relationships and are you spending those 32 minutes in the best way
possible?
(END VIDEOTAPE)
SEGALL: It is interesting to see the company like Instagram use artificial intelligence to try to curb harassment. They are also taking on mental
health initiatives for their users. I think we're beginning to see some grown-up problems with social media and harassment, and you are seeing a
lot of these founders, I've known Mike and I have seen him from the beginning for seven years, these are some very different problems that the
companies are facing now versus what they were facing years ago.
ASHER: So, Instagram has grown up, another company that has grown up is Facebook. Mark Zuckerberg. When you interviewed him, he talked about
building communities that was his sort of core mission evolving. He sort of seemed a bit more humanitarian and a bit more sort of philanthropist.
And he is talking about, Mike, eventually he was talking about building relationships. Where does that come from?
SEGALL: I am hearing it more and more in Silicon Valley, this idea putting empathy back into the equation and building the human connection. And I
think because we have gone one way, we were looking at all the hate spewing offline so much so that it is actually coming off-line. And I think we
have seen some real, real issues with social media and I think a lot of these founders as I said before they have to take on these larger problems.
They have to try to use artificial intelligence to curb some of the hate online, try to take on some of the world's biggest problems because tech is
now in under layer to just about everything. And its impacting everything from our well-being to jobs and I think these founders are sensing that
there is a responsibility there now.
ASHER: Laurie, stay there, I just want to update our viewers on something, another sort of text away that we are following. Square has just released
its quarterly earnings that is the payment company run by Twitter CEO Jack Dorsey, shares are rallying after hours, after Square reported a slightly
smaller loss, smaller loss and Wall Street had been expecting. The stock has gained 96 percent so far, this year. And 160 percent over the past 12
months. Laurie, I know that you interviewed CEO Jack Dorsey, and you were talking to him about what the company is doing to protect people's jobs
especially given automation?
SEGALL: Absolutely, I mean, if you look at what has happened and people losing their jobs. And the risk that people have with technology now, I
actually met up with Jack in Webster City, Iowa. A small town in Iowa, and what is the founder of Twitter doing there? A lot of the people in this
town have lost their jobs because the factory had gone under. And the manufacturing jobs went elsewhere that is just the beginning of it.
Because robots are going to take jobs, automation will take jobs. And I asked him, why are you here, which was to help small businesses get
empowered. And what can Silicon Valley do to help this trend towards automation and losing jobs, what is their responsibility? Listen to what
he said.
(BEGIN VIDEO CLIP)
JACK DORSEY, FOUNDER, TWITTER: I think the challenge for anyone and anything is just shifting your mindset. Being dependent upon one factory
or one company to being more and more dependent upon yourself.
SEGALL: Is Silicon Valley doing enough?
DORSEY: We all have to focus on what our strengths are, by focusing on those strengths making sure that the tools that we are building become more
and more accessible, and more affordable. It is a great start but are we doing enough? I don't know if anywhere can say that, not just the tech
industry.
(END VIDEO CLIP)
[16:45:00] SEGALL: You could actually see Jack going into these small businesses and teaching them how to use Square so that they can try to
empower themselves and still make money despite the fact that that factory when under. But this is just the beginning because there is going to be a
lot change happening of the next five years. A lot of people are going to be out of work. It is interesting to see tech leaders really try to step
up and talk about these things because technology can replace jobs.
ASHER: Good point, all right, Laurie Segall, life for us. Thank you. We have actually been bringing you Laurie's series "Mostly Human". I know
I've mentioned a few times on the show. Conversations on the critical issues that are facing Silicon Valley from automation Laurie was just
talking about to sexual harassment which also you have been talking about. You can see them all at CNN tech.
Now the Mafia has extorted money from Sicilian businesses from more than a century. No wonder Sicilians are tired of it. Now they have decided to
take a stand, that story next.
(COMMERCIAL BREAK)
ASHER: Welcome back, everybody. Businesses in Sicily have been under a Mafia stranglehold for more than a century now. Many people are forced to
hand over a slice of their earnings and refusing to fall in line could actually end up meaning bloodshed. Now the people of the island are
banding with the government to fight back. Here's our Nina dos Santos with more.
(BEGIN VIDEOTAPE)
NINA DOS SANTOS, CNN MONEY EUROPE EDITOR (voice over): For more than a century the Cosa Nostra has held sway over Palermo streets demanding a
share of trade and absolute loyalty. It's been 25 years since some of the Mafia's most violent episodes, Sicilians are fighting back. Refusing to
pay the protection money upon which the Mafia's whole business model was originally built. Backing those taking a stand is AddioPizzo or goodbye
for the racket. A grassroots movement providing legal, moral and social support.
SALVATORE CARADONNA, CO-FOUNDER, ADDIOPIZZO (through translator): The idea came in about 2004 when a few of us wanted to open a bar, and we thought to
ourselves, what do we do for, and ask for protection money? Change is difficult because the Mafia has been in the city for 150 years. But we are
seeing a cultural shift, for the first-time extortion is being discussed openly.
SANTOS: With over a thousand firms signed up, AddioPizzo's community is growing. Thanks in part to $1 million donation from the E.U.
(on camera): Less than a generation ago, refusing to pay protection money could be a death sentence for a business. Those shops that wouldn't comply
faced being torched, their owners were sometimes threatened or even worse. But today such defiance actually seems to be rewarding. Shopkeepers say
the sales are up and visits from the Mafia are down. And while authorities reckon that the Cosa Nostra has diversified into drugs and money
laundering, the falling income from racketeering is a problem for the world's most famous crime syndicate.
[16:50:00] FRANCESCO LO VOI, PALERMO CHIEF PROSECUTOR: The Cosa Nostra members who are aware of the possibility that one of their victims can
report to the police, keeps them away. The fight against Cosa Nostra cannot be done only at the judicial or law enforcement agencies level. It
must involve all the population.
SANTOS: In the village of Caccomo, 40 kilometers from Sicily's capital, is a man who knows the Mafia well. Giorgio Scimeca says his cousin was gunned
down by the mob when he ran for mayor. When he set up his own bar, they soon made their demands.
GIORGIO SCIMECA, CAFE OWNER (through translator): They pretend to be your friend. First, they borrow money. Then they borrow the car. Then they
try to get you to buy stolen goods from them. They try to trap you to try to compromise you.
SANTOS: Scimeca refused to pay and called in the cops. But that nearly cost him his livelihood, locals shunned him fearing mob revenge. Until
AddioPizzo came to the rescue.
SCIMECA: They got their friends to come from Palermo to my bar every weekend. Every Friday and Saturday I got busier.
SANTOS: Thirteen years later. Scimeca has a thriving pastry business selling all over Italy. Like a growing number of Sicilians, he has found
the best protection from the Mafia today is joining the ranks of those who refused to pay. Nina dos Santos, CNN, Palermo, Italy.
(END VIDEOTAPE)
ASHER: Now to destroy that we have been teasing all day, Paris Saint Germain has 1/4 of $1 billion to spend the summer and they're going to try
to spend it on when very, very famous footballer. We will have that story in just two minutes.
(COMMERCIAL BREAK)
ASHER: The studio people are laughing at me because I am trying to pretend like I have skills but I don't clearly. The transfer deal that could
change modern football is well and truly on, Neymar has told his club in Barcelona that he wants to leave paving the way for him to join Paris Saint
Germain. Now the fee of $262 million would actually end up shattering the current world record, in fact would actually be twice as much as Manchester
United ended up paying for Paul Pogba who is currently the world's most expensive player. And there are a few things kind of sort of standing in
the way of Neymar's goal go, Barcelona says that if he is going to leave they want the money up front. They want that entire $262 million in full
upfront.
[16:55:00] And while Paris Saint Germain may be able to afford that, thanks to their Qatari owners, Spanish league bosses say they could block the deal
if financial fair play rules were broken.
Stefan Szymanski is a professor at the University of Michigan, he joins us live now, Stefan, the fact that you have Paris Saint Germain willing to pay
1/4 of $1 billion for one player, what does that tell you about how much Neymar means to this game?
STEFAN SZYMANSKI, PROFESSOR OF SPORTS MANAGEMENT, UNIVERSITY OF MICHIGAN: Well, it tells you he is just about the biggest star in world football
today, which is probably no surprise to most people. And it tells you that he wins games for you, he could actually bring the club to the very
pinnacle of world success.
ASHER: In terms of what Barcelona is going to be losing, I mean, what is Barcelona going to be losing if they continue without a player like Neymar?
SZYMANSKI: Obviously, Barcelona has for the last decade or so been one of the very best clubs in the world, for some years they have reached heights
which are unknown in the game. And this obviously will limit their capacity to do so going forward. There are other big star Lionel Messi is
getting older now, and he won't have many more years in the club, and so in many ways this is a turning point for the club. That said, if they have
this amount of money, 200 odd million dollars to go into the market to buy other players, that they might be able to find somebody who would help them
ASHER: And terms of whether or not this will actually end up paying off, with this actually, give us your thoughts, with this actually end up paying
off, a Paris Saint Germain. What you think?
SZYMANSKI: It all depends on what you mean by paying off? Football clubs have never been really run as conventional businesses where they make
money. They have normally been money losers, and their reasons to only football club other than making a profit. So, in particular right now, the
club Paris Saint Germain is owned by Qatar a nation which is politically embattled at the moment facing a boycott from Saudi Arabia and other Arab
nations. And just won't do them any harm in terms of global publicity.
So, there are many reasons why the owners of Paris Saint Germain my want to pay out this kind of money.
ASHER: I see. You mentioned a key point, no harm in terms of publicity, this is probably one of the biggest stories in the world today. Stefan
Szymanski, life for us, thank you so much.
And that is, my friends, QUEST MEANS BUSINESS for this evening. I am Zain Asher in New York, the newest continues right here.
END
