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QUEST MEANS BUSINESS
Increasing Number of Terrorist Attack in Egypt; European Project Under Immense Pressure; Emmerson Dambudzo Mnangagwa Sworn in As Zimbabwe's Third President; Black Friday Shopping; Paris Protests Slave Auctions in Libya. Aired 4-5p ET
Aired November 24, 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] PAULA NEWTON, CNN CORRESPONDENT: Santa Claus is ringing the bells at the New York Stock Exchange, for the second session in a row they
are breaking those records. Now, he's already out of there for the weekend, he's elsewhere, this closing bell actually rang a few hours ago as
traders took that half day off for the Thanksgiving holiday.
It's Friday, November 24 tonight. You wait one European crisis and then two turn up at once. Angela Merkel has hopes for new talks. Now, another
European government is on the ropes. Zimbabwe has a new President for the first time ever and says it's time to restart the economy.
And Amazon's boss finds new reasons to be thankful, so it's a dark time on Black Friday for his brick-and-mortar rivals. I'm Paula Newton and this is
Quest Means Business.
Good evening and we will bring you today's business news in just a moment, but first though, at least 235 people have been killed in a militant attack
on a crowded mosque in Egypt. Now, some of these images you're about to see showing the immediate aftermath inside the mosque are very disturbing.
The coordinated attack happened in the north Sinai region first. At least two explosions targeted a Sufi mosque during Friday prayers. Gunmen then
fired on worshippers as they fled the scene. Now, Egypt's President has vowed to respond with "brute force." It appears this is the country's
deadliest terror attack in history.
CNN's Ian Lee joins us now. Now, he spent nine years in Egypt and was just in the region last year, I mean, Ian, it's been hours now that you've been
working the story. You've been seeing the death toll mount, I mean, what hits you at a certain time when Egypt is still unsure about who perpetrated
this, how many attackers they were and yet are vowing to respond fiercely.
IAN LEE, CNN CORRESPONDENT: I think the sheer scale of this attack, Paula, 235 people killed, over 100 people injured just is shaking Egypt tonight.
Just seeing what's been posted on social media by Egyptians, they're shocked by this.
Egyptian President Abdel-Fattah el-Sisi came into power on two promises -- security and stability. And Egypt has been fighting this insurgency in the
northern part of Sinai for years now, at least five, six, seven years. And so, attacks like this have occurred from time to time, but this one is just
showing that Egypt's military efforts, the security forces' efforts in northern Sinai still haven't been able to stamp out the militancy there.
And just the coordination and sophistication of this attack by setting off these explosives on the outside to draw people outside the mosque and start
shooting them, then going inside to execute them, stopping ambulances, shooting at them as they're able to come, it does send a message to the
Egyptian authorities. And that's when we see President Sisi come out very strongly saying that he is going to use brute force going after them.
We're being told that the military along with the air force is combing the desert looking for the culprits that carried out this attack. But, again,
Egypt has been going after the militants for quite some time. We've seen after time after time when we do get large attacks like this, the
government says it's going to come out strongly, and yet still these attacks persist.
NEWTON: And this region as you told us before, Ian, is just so notorious in terms of trying, keeping it secure. We've not have a claim of
responsibility. How much does it matter in terms of what's going on there even if ISIS doesn't come out and distinctly claim responsibility for this?
LEE: Yes. This region has had trouble well before Egypt's revolution and for decades, the northern Sinai, you can talk to Bedouins who live there,
they'll talk about being marginalized, that they don't get the economic opportunities, the social opportunities, the political opportunities that
other Egyptians get. They don't believe that they're getting a fair shake of the tourism industry that is so prominent in the southern part of the
And that has led to a lot of resentment among the Bedouins and for a long time they've resisted the security forces in that area. But it really is,
since Egypt's revolution, we've seen it take this whole new form where it's now religious militancy in the northern part, with militant groups in 2014
pledging allegiance to ISIS, and there's concern, too, that with the fall of ISIS in Iraq and Syria that militants may be looking for other places to
go and Egypt may be one of them. And that's one concern Egypt's president has expressed.
NEWTON: Yes, absolutely, earlier this month as we've noted before. Ian, thanks so much for keeping us up-to-date on this important story and the
staggering toll it is taking on everyone in Egypt, appreciate it.
Ian Lee there for us.
Now, Egyptian President Abdel-Fattah el-Sisi has declared three days of national mourning. In a televised speech to the nation this evening, he
vowed to fight terrorism with full force.
(BEGIN VIDEO CLIP)
Abdel-Fattah el-Sisi: (Foreign language).
TRANSLATOR: This act aimed to destroy our morale, destroy our steadfastness, make us doubt our abilities. This cruel terrorist act will
strengthen our resolve, our strength and our will to stand up to and resist and battle against terrorism.
(END VIDEO CLIP)
NEWTON: Now, there have been an increasing number of attacks in Egypt's Sinai in recent months. In July, at least 23 soldiers were killed in a car
bomb attack targeting Egyptian soldiers at a military checkpoint in Sinai Peninsula.
In January, seven Egyptian police and one civilian were killed at a bomb attack at another checkpoint at the city of al-Arish. In October 2016,
armed terrorists attacked a security checkpoint using four-wheel drive vehicles. It's quite an audacious attack that happened in the city of Bir
al-Abd. A dozen military personnel were killed there.
Now joining us is H.A. Hellyer from London. He's a senior fellow at the Atlantic Council and an associate fellow at the Royal United Services
And right of the bat, as I was going through those unfortunate terror attacks. This one is so much different not just for the scope and the
scale but the fact that it brutally targeted civilians. Do you think this is a game-changer for Egypt?
H.A. HELLYER, SENIOR FELLOW AT THE ATLANTIC COUNCIL: I think it's a very dangerous precedent. You've seen obviously ISIS target various forces
You've seen attacks on churches. You've seen attacks on different parts of the state apparatus, security forces, army and so on. This is the first
time that I can remember ISIS in Egypt targeting a civilian target of this size and magnitude and, indeed, it's quite possibly the largest terrorist
attack in modern Egyptian history. And the way in which it happened, I fear, is a precedent that we'll see at least attempted in the future.
NEWTON: Yes. Your words, your analysis, quite chilling especially as we continue to view those pictures, and all of us can put ourselves in the
shoes of being there and trying to help people and yet the attackers just keep coming.
In terms of el-Sisi and how he responds now, he is a former military commander, he is quite a strong presence in Egypt to say the least, and yet
even he earlier this month said, look, ISIS is coming for us. ISIS did not claim responsibility for this but in the face of everything that is going
on in the region, what can his strategy be?
HELLYER: So, I want to make something very clear, that ISIS in the Sinai has been targeting and has been waging a campaign for some years, going
back probably, I mean, the originator group behind what eventually became ISIS in the Sinai goes back to around 2010.
So, this is a longstanding history. It intensifies over the past few years, but it is a problem and goes back quite a long time. And, indeed,
the way in which the Egyptian state has tried to deal with it hasn't eradicated it. And today if it is indeed ISIS which we all suspect it is,
today would be more evidence of that, that this is a longstanding problem and will require quite a comprehensive and complex solution.
But the precedent is really quite devastating, 235 people by the latest count, in a mosque which means really what, that the definition of civilian
for these types of groups has become so malleable that really anywhere is the target, anybody is a "legitimate target' and there are no real
civilians for groups like this, that we are indeed all in the same boat of being possible potential targets by groups like this.
NEWTON: And yet in terms of what this means in the region now, many people have warned that with ISIS being thrown out of Iraq and Syria, being so-
called defeated in those areas that this is going to cause more trouble in the region. I mean, is this the shot across the bow?
HELLYER: I don't know if it's one shot across the bow or really what we have to expect this across the world as ISIS loses territory in Syria and
Iraq, that you're still going to have a lot of people who were inspired by ISIS that bought into this radical ideology, and they will now want to go
and operate in different theaters elsewhere.
Egypt may be one if today, indeed, is an ISIS attack. Libya. On our own shores within the United Kingdom and within Europe, but terrorism, alas, is
a phenomenon that we have to learn to deal with, that we have to learn to protect ourselves from without allowing them to change the way in which we
live our lives.
And I think that, indeed, is the struggle that governments and societies have to face up to, that terrorism isn't about to change the way we live
our lives unless we let it. And we need to have a very comprehensive strategy against it without, again, giving them the victory that they want
which is indeed to change how we live our lives and how our children will live theirs.
NEWTON: Yes. Salient points all and yet what a struggle it will be for those families in Egypt really to try and deal with everything that's
transpired there. We thank you for your insights, really appreciate it.
NEWTON: Now, Brexit, Catalonia and now possible general elections in Germany and Ireland. The European project is under more and more pressure
as the British Prime Minister flies to Brussels to try and forge ahead with Brexit.
NEWTON: Germany's main opposition party has had a change of heart. Somewhere in Germany, I'm sure, they were taking bets on this one. SPD
Leader Martin Schulz now says he is willing to try and negotiate with Angela Merkel to end the political deadlock in Berlin. Now, both sides
will have plenty to think about throughout this weekend.
CNN's Atika Shubert tells us more.
ATIKA SHUBERT, CNN CORRESPONDENT: Well, earlier this week, Germany was plunged into political crisis. Now at the end of the week, there is a
possible way out.
This is all due to German President Walter Steinmeier. He has been talking to party leaders throughout the week and he has managed to get the leaders
of the two biggest parties to agree to sit down for talks next week.
Now, those two parties being, of course, Chancellor Angela Merkel's Christian Democrats, the CDU as well as the left-leaning Social Democrat,
the SPD led by Martin Schulz.
Now, there is a hitch to all this. While Merkel might be happy with having another grand coalition of the two biggest parties, Martin Schulz of the
SPD had previously ruled it out, saying it would not be possible. So, it's not clear what exactly will happen next when they sit down for talks.
Are we looking at the beginnings of another grand coalition or are we looking at something more like a minority government led by Merkel but
propped up by the SPD? Now, we should have a better idea next week when party leaders finally sit down for another round of talks.
Atika Shubert, CNN Berlin.
NEWTON: OK. Now, just because Germany's political crisis may be closer to getting resolved, it doesn't mean the continent, yes, the entire continent
is out of the woods yet. Now, the Irish government is on the verge of collapse -- yes, in case you missed that over this holiday weekend -- after
one of the coalition parties tabled a motion of no confidence in the deputy leader.
Now, the Irish Prime Minister says it could unfortunately trigger a general election. Now, I don't have to remind you, the Irish border is an
extremely delicate issue as Britain prepares to leave the European Union.
Now earlier, the British Prime Minister flew to Brussels to try and break a deadlock in Brexit talks.
(BEGIN VIDEO CLIP)
THERESA MAY, BRITISH PRIME MINISTER: Well, I've had a number of positive discussions here today. I also had a very good summit at least in
partnership, but I've taken the opportunity to have meetings with the President of the European Council and a number of other European leaders
about our negotiations on the run-up to the December European Council.
And there are still issues across the various matters that we are negotiating on to be resolved, but there's been a very positive atmosphere
in the talks and a genuine feeling that we want to move forward together.
(END VIDEO CLIP)
NEWTON: Quentin Peel is an associate fellow at the think tank Chatham House and he joins me now from London. Thanks so much.
Lesser continents will have completely collapsed by now under the political turmoil. The Eurozone economy, let's make it clear, is doing
extraordinarily well under the circumstances. But when you see everything that is going on, can the EU really handle much more?
QUENTIN PEEL, ASSOCIATE FELLOW at CHATHAM HOUSE: Well, they also has Catalonia, remember, and Spain looking pretty wobbly.
NEWTON: Oh, I remember.
PEEL: And nothing is really resolved on the refugee crisis front. There are an awful lot of things going on. I think the biggest worry for them at
the moment is indeed Berlin. The report you had there saying well, maybe they are going to get a coalition government together after all because as
I think somebody was saying in Brussels today, if Berlin is not stable then the European Union is not stable.
So, Angela Merkel still remains really the key player here, and it was very interesting that we saw today when Theresa May went to Brussels and went to
have talks with Donald Tusk, the President of the European Council, guess who was sitting in on the talks but Angela Merkel.
NEWTON: And as you said, it is quite a pillar, because she will be pivotal in trying to bring Europe past this whole Brexit negotiation and also
obviously continue to have it on a sure political footing.
Some people have noted that maybe this will be cathartic for Europe. They will come through all of these individual political crises and all of these
countries will come out stronger. Possible? What do you think?
PEEL: Yes. I mean, what we saw last year, remember, was that vote for Brexit in Britain followed by the vote for Trump in America and those two
things were really, really undermining for Europe. That was a big political shock.
Well, since then we had Emmanuel Macron elected as French President with a very pro-European passionate platform that he's very keen on. If he can
get his act together with Angela Merkel, then I think there is a chance for if you like a European revival.
But those Brexit negotiations are going to drag on. They're going to be very difficult and they're going to be, I fear, rather poisonous. It's
money on the table. It's the very belief in the European project that the British are undermining by saying they want to leave.
NEWTON: Yes, absolutely. And I have to ask you before I let you go, when you see these Brexit negotiations and maybe slightly more positive than
they might have looked last week, what worries you? What do you think can still be a issues, and there are many?
PEEL: Well, at this very moment it's that Irish border question. That is incredibly difficult because the border between southern Ireland and
Northern Ireland suddenly becomes an external frontier of the European Union. And the last thing they need in Ireland is to have a rigid border
which could restart the whole conflict in Northern Ireland and undermine the peace process. That would be a disaster.
NEWTON: A disaster indeed. It is an understatement to say that is a delicate border at this time. Bill, thank you so much for your insights.
Have a good weekend and we hope it's uneventful on many different themes for the weekend. We need a quite weekend in Europe, put it that way.
PEEL: Thank you.
NEWTON: Thanks so much, appreciate it.
Now, the political uncertainty we were just talking about, as you imagine, isn't weighing too heavily on the European markets. The Eurozone economy
has a lot to do with that. They ended the trading week mostly higher. The FTSI though was, of course, the exception. We just talked about why, it
finished marginally in the red as investors continue to digest the UK's new budget, let's just say it was a horror show.
Let bygones be bygones. Zimbabwe's new leader says he wants to put the past behind him calling his predecessor Robert Mugabe his father. Emmerson
Mnangagwa was sworn in as interim President.
Now, he promised a democratic Zimbabwe, called on the west to drop sanctions and acknowledged the need for international investment.
(BEGIN VIDEO CLIP)
EMMERSON MNANGAGWA, INTERIM PRESIDENT OF ZIMBABWE: Key choices will have to be made to attract the foreign direct investment to tackle high levels
of unemployment while transforming our economy.
The many skilled Zimbabweans who have left the country over the years for a variety of reasons must now come into the broad economic calculus designed
for our recovery and the takeoff as a nation.
(END VIDEO CLIP)
NEWTON: Farai Sevenzo is in Harare and he joined us. You've been out there all day trying to take in these momentous events with the people of
Zimbabwe. I mean, what did you hear? What did you learn, especially when the new president really seems to be very conciliatory towards the past.
Some people may not appreciate that.
FARAI SEVENZO, CNN CORRESPONDENT: Well, Paula, it is a case in point that there is no way he would divorce himself entirely from that past with
Robert Mugabe. As you said, he called him his father. He called him his mentor and he acknowledged that he is the founding father with many others
of the Zimbabwe nation.
Now, what was the atmosphere like? Well, it seems that with the change of guard to Mugabe to Mnangagwa, from the old to the new, relatively new
leader, there was an infusion of great energy in that stadium today. And this is how the day unfolded.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (voice over): Eighteen days ago, this man was fired by Robert Mugabe, a single act set off a minor revolution leading Zimbabwe to
Every revolution has a soundtrack. This is Zimbabwe's, a popular song here called Conga Quar (ph). The crowds sing along to the tune about a hero who
The hero today is their new President, Emmerson Mnangagwa, because the new man is not the old.
Another of the people's heroes is the army general who made it all happen.
MNANGAGWA: I, Emmerson Dambudzo Mnangagwa.
UNIDENTIFIED MALE (voice over): Zimbabwe's new President took the oath of office and signed the paper work as the crowd roared their approval.
UNIDENTIFIED MALE: Emmerson Dambudzo Mnangagwa has put pen to paper and has become the third President of the Republic of Zimbabwe.
UNIDENTIFIED MALE (voice over): Mnangagwa spent most of his career serving Mugabe and even went out of his way to praise him this day. He asked the
nation to let bygones be bygones.
MNANGAGWA: There is a lot we can do in the present and the future to give our nation a different, positive direction. As we do so, we should never
remain hostages of our past. I thus humbly appeal to all of us that we let bygones be bygones.
UNIDENTIFIED MALE (voice over): With incredible speed, the posters and the flags have been printed for this new dawn and the country is in the grid of
a new positive energy. It's quite something to witness the people who have had no voice suddenly come back to life.
UNIDENTIFIED MALE: And so, here we are, Zimbabweans very excited. A new energy has been infused into this nation which has been asleep for so long.
They have a younger president and people are very happy.
UNIDENTIFIED MALE (voice over): This apparent coup has been very strange. Everybody expected the sound of guns, but the only sound that guns made
were in celebration.
Make no mistake, this is the army's man. For decades, he ran the forces from behind a ministerial desk. Now, they happily salute him as Zimbabwe's
new commander-in-chief and the nation's president.
The honeymoon with the army shows no signs of abating, selfies with the men in camouflage were the fashion of the day and a new all-embracing language
began to emerge.
UNIDENTIFIED MALE: This is not about color. This is not about race. This is not about anything; it's all about Zimbabwe -- white, black, red, green
or what -- Zimbabwe for Zimbabweans, we are all Zimbabweans. Let's unite. Let's work for Zimbabwe.
UNIDENTIFIED MALE (voice over): And it's this nation's hope that they and their new president can do just that.
(END VIDEO CLIP)
SEVENZO: And there you have it, Paula. It was an incredible change of direction by the new man. It wasn't negative. He didn't rattle against
the west. He called for more investors. And even the people I have spoken to all out through this week were saying they're tired of Robert Mugabe's
look east policy to China. They don't want to look east. They say they want to look everywhere and that Zimbabwe now is waiting to see what kind
of cabinet he appoints and whether the many he appoints would stay away from the corruption that has so riddled this country throughout the 37
years of Robert Mugabe's control.
NEWTON: Absolutely. I really want to thank you for your report because it gave me a sense of what it's like to have been there even for a few
minutes. I've not spent a lot of time in Zimbabwe. What I do know is that the grace, the utter grace with which the Zimbabwean people, just when they
talk to you, it is such a joy to spend time with them.
What has it been like for you to cover the story the last few days, just to see them finally realize such a dream?
SEVENZO: Well, Paula, those stories that I cover whether I'm talking about Bocadishi (ph), whether I'm talking about Kenya, I feel Africa very much in
my bones, but this is the land of my birth. This is the city of my birth. I have family here.
And it was very difficult especially the night that Mugabe resigned, not to feel choked up and to take no distractions from over this feeling. It was
completely taking me over and I'm very proud, I'm very honored to have witnessed this with my own eyes and not be too far away.
NEWTON: Yes. And let's hand on to that piece of hope, Farai, because there's a lot to talk about and certainly in terms of surmounting the
economic problems. But let's hold on to it because you and I both know, the people of Zimbabwe deserve it.
SEVENZO: Yes, they do and there's a lot of work to do after this party is over.
NEWTON: OK. Right. Thanks so much again.
Soundtrack of the revolution; remember that line.
Still ahead, ready or not, here they come, shoppers are out in full force this Black Friday. And Cyber Monday is right around the corner. Yes, can
you take it, more shopping, our retail roundup next.
NEWTON: Hello. I'm Paula Newton. Coming up in the next half hour of Quest Means Business, Jeff Bezos has a personal reason to celebrate today's
Black Friday shopping.
And fix the Middle East in the morning, bring back American jobs in the afternoon and squeeze in 18 holes with Tiger Woods while you're at it.
Donald Trump says he's having an extremely productive Friday.
First though, these are the top news headlines we're following for you this hour.
The Egyptian President has declared three days of mourning after a deadly attack on a Sufi mosque in the north Sinai. Now, at least 235 people are
dead and more than 100 others wounded. The attackers set off explosions, then shot worshippers as they fled Friday prayers.
Zimbabwe's new President Emmerson Mnangagwa is promising to lift the African nation out of poverty and stamp out corruption. He calls Robert
Mugabe a mentor, plans to shun the ousted former leader's policies. Now, he took the oath of office on Friday. Mugabe resigned this week after
nearly four decades in power.
The Argentine Navy says it is not giving up a search for a submarine missing now for nine days in the South Atlantic. The military revealed
Thursday it detected a sound consistent with an explosion the day the sub vanished near its last known location -- 44 crew are on board that
One of London's busiest underground stations is back and open again after a reported incident created mass panic earlier. Police responded to reports
of shots being fired at Oxford Circus Station, but found no evidence of that. Police said officers responded to the incident as if it were
terrorism, but later stood down.
The South African Supreme Court of Appeal has more than doubled Oscar Pistorius' prison term for the 2013 murder of his girlfriend, Reeva
Steenkamp. The court found the former Olympian's original six-year sentence too lenient. Steenkamp's family welcomed the longer sentence, saying she
can now rest in peace.
The day after Thanksgiving traders, yes, got themselves out of that food coma as they pushed stocks, yes, to a new record even on low volume. Both
the NASDAQ and the S&P 500 hit record highs today with retail stocks, especially feeling the holiday spirit and getting a boost from Black Friday
Now, all three indices closed in the green. The S&P closed above 2,600, as we were saying, for the first time. Now, call it the big gamble, brick and
mortar retailers pulled out all the stocks on Black Friday and their bid to remain relevant in the digital age.
It all began in the wee hours of Friday morning at many stores across the U.S., including Macy's flagship store in midtown Manhattan. It will be
days before we find out whether aggressive discounts, and believe me they were aggressive, boost to turnout for struggling stores, but it is sure to
be an uphill battle.
For the first time Americans are planning to shop more online -- think about that, shop more online than in traditional stores this holiday
season. Almost $3 billion was spent online at sites like Amazon on Thursday alone. That was just Thursday, an18 percent increase compared to
last year. The relentless rise of internet shopping has helped lead to the closing of a record 6,700 brick and mortar retailers this year.
Mark Cohen, the former CEO of Sears Canada, joins me now. He is the director of Retail Studies of the Columbia Business School. Thank you so
much for joining us especially today. I want to point out that for a long time you have been saying it is all about Amazon.
I have question for you. Does this mean though that with the new developments online, especially with Amazon, that retail is perhaps
rightsizing and that we will get retail to a point where it fits the customers' needs and we will coexist peacefully and profitably with online?
MARK COHEN, CEO OF SEARS CANADA, DIRECTOR OF RETAIL STUDIES OF THE COLUMBIA BUSINESS SCHOOL: There's no doubt that brick and mortar shopping will
remain a staple of our retail industry. But the balance point between physical shopping in a store and shopping online through the internet
remains to be seen. Obviously, the internet is growing in leaps and bounds. This is going to be another incredible step up this holiday
And brick and mortar is suffering, anybody's guess where these two wind up one in balance with the other. But right now it's all-in on online
NEWTON: All-in and yet what can the retailers do? I mean a lot of people still want to go into a store, but what do they have to do in your
experience as a retailer in terms of trying to really capture people, get them to the store, and keep them in the store, because apparently the
margins are still better when you get them in the store.
COHEN: A store has to be inviting. It has to be a driveway destination decision. It has to be something that is filled with merchandise customers
really want, and the ambiance and the service that they receive have to be compelling as opposed to just being there.
Unfortunately, up until about 20 years ago, if you wanted to shop, you pretty much had to go to a store. In fact, you had to go to your local
store, your local mall. Today, the internet lets customers shop everywhere, anywhere in the world at the stroke of a key. So they have
choices. And those choices are increasingly for the internet, not for physical shopping.
NEWTON: When I talk about that balance, though, between having to go to a store, wanting to go to a store, because sometimes you just want the look
and feel of it or as you say it might be an experience. How much longer are we going to be in as I call it this rightsizing?
And what kind of a toll is it going to take almost brick and mortar stores in the meantime?
COHEN: If I had to guess this is another 5 to 10 years.
NEWTON: 5 to 10.
COHEN: The industry is in tremendous turmoil. There are winners and losers, big winners, big losers. Right now the big winners are the
internet players, specifically Amazon. The big losers are the legacy department stores who have to regain their viability.
They have to right-size their portfolio of locations. And they have to do an awful lot more toward attracting customers who now do have a choice.
NEWTON: Yes. Even in the academic armchair for a while here, if you look back on the experience in Sears Canada, which is completely different,
which is I might add in bankruptcy right now in Canada. When you look at the lessons learned from that, I mean, what do you say to leaders in retail
COHEN: The business is very simple. You have to buy things at a wholesale price, sell them at a higher retail price. Earn some gross margin and
cover your expenses. It is not quite that simple, but that is really what the industry has always banked upon.
The problem is the level of discounting has reached a point where much merchandise is being sold below cost, expenses are exceeding retailers'
ability to cover them through gross margin.
So the levers are all misaligned. They are out of whack. And that is unfortunately happening because the legacy business is being hollowed out.
In the `60s, `70s, and `80s, the great American shopping mall decimated downtown or High Street retailing throughout hundreds of U.S. cities.
NEWTON: And now Amazon is doing the same.
COHEN: So now Amazon and its cohorts are doing the same thing to that great American shopping mall. It is also a social media component. Just
as recently as a few years ago, young people would congregate religiously, reliably, regularly at a mall to hang out with their friends. They do that
now in no small measure using technology.
NEWTON: I am a bit fearful when we talk about the -- we have covered them here on CNN Monday, these ghost malls that you have now, they are
completely shut down, now some of that is starting to happen on the main streets as well.
In terms of how much our economies have depended on actually opening a door into the store and going in to buy that. You say 5 to 10 years, can we
expect to have a healthier-looking sector at that point in time? Or we have all just cut -- it all shakes out or is it just going to be gloomy?
Because believe me some of those retail spaces in America right now look pretty bad.
COHEN: Well, the industry at face value is fine. There is no shortage of customers. They have plenty of disposable income. They still haven't lost
this tremendous need to acquire things that they want, but don't need.
It's the players inside the industry, they legacy players, specifically, the folks running those stores who have lost their touch not only with
their customer but with the metrics that keep them in business. And so they are going to continue to struggle. This is a Darwinian process.
There is big winners, big losers. And right now the big losers are the legacy department stores.
NEWTON: Yes, so much more pain. And it is so important that you point out the holiday sales in the United States could be up as much as three or four
percent from last year. The Grinch has not stolen Christmas, at least not yet, so it is important to also keep that in mind.
Mark thanks so much for coming in. I appreciate it. Have a good weekend.
COHEN: You bet.
NEWTON: And this is something you are going to want to listen to. This won't surprise you at all. In terms of the contrarian view, Amazon
investors do not appear to be threatened by the brick and mortar shares of Amazon.
It finished Friday's session up 2.5 percent, yet another all-time high. The rally helped push founder Jeff Bezos -- okay, get this, his net worth
now, more than $100 billion. That is just him, folks.
As his wealth soars, Bezos continues to experiment as you were saying with those brick and mortar stores. Yes, this is online, again getting its
revenge, showing up on the High Street. Amazon's latest venture Packed Up in London, our Samuel Burke checked it out.
(BEGIN VIDEO CLIP)
SAMUEL BURKE, BUSINESS AND TECHNOLOGY CORRESPONDENT FOR CNNMONEY: So, Paul, Amazon's home of Black Friday and this is the kitchen.
PAUL FIRTH, AMAZON DIRECTOR ON BRICK AND MORTAR DRIVE: That's right.
BURKE: But the real question for you guys is Amazon was always supposed to be a digital space. That is what made you more efficient. You didn't to
have to pay for brick and mortar shops, so why a place like this kitchen for a Black Friday?
FIRTH: We have always tried to experiment at Amazon. We did that when we first brought Black Friday to the U.K. back in 2010, that year we just had
300 there, it was just on Black Friday.
BURKE: Why spend all the time creating this beautiful kitchen when you guys own Whole Foods now? There is a Whole Foods right down the street
here in London where you could be doing all this. Isn't that why guys bought Whole Foods?
FIRTH: Because we are selling to people in their homes and we want people to see how this product will work in their homes. And what we have done
here is tried to create a home might look like.
BURKE: It is interesting because you see the tentacles of Amazon expanding. You've got Amazon Lockers by my work. You have this pop up
shop. And it does make some people wonder, where will it stop?
I mean is Amazon's goal to be in all parts of our lives, literally from the living room to next door to our work?
FIRTH: I think Amazon's goal is to make things easier for our customers. And if that means by putting a delivery locker in near work it's easier for
you to get your parcel, if by putting in place like this together so that people can understand how products work easier, then that's what we will
do. It is all about focusing on what makes it easier for our customers.
BURKE: As long as they sign up for Prime.
(END VIDEO CLIP)
NEWTON: So interesting, isn't it? Well, apparently not to Donald Trump because on this holiday weekend, he wanted everyone to know it's a holiday,
but he is working now.
In a tweet early Friday morning, President Trump says he has already made Black Friday plans. This is what he said he did today. He did do it,
bringing even more jobs and companies back to the USA after a quick round of golf with Tiger Woods at Mar-a-Lago in Florida.
Okay. CNN's White House reporter, Jeremy Diamond, a special treat for us, he is here with us in the studio. And not traipsing around Asia with the
president. Listen, this is extraordinary.
All in a day of tweets, he is saying, "Yes, we're going to fix up that little Middle East mess. I am going to go play golf quickly with Tiger
Woods." No idea how that gets done. But now quite seriously, having his phone call with the president of Egypt and then linking that to the wall
and his travel ban.
JEREMY DIAMOND, CNN WHITE HOUSE REPORTER: Yes.
NEWTON: I mean give us some insights as to when he has got these four or five days where is at something like the Winter White House at Mar-a-Lago.
How was he conducting business? Because today was crazy.
DIAMOND: Yes, all in a day's work, right, as you said. I mean it is our job, I think, to try and figure out exactly what the connection is between
these things. So let me give you my best assessment here.
When the president is talking about a wall and he is talking about bringing back the ban in light of a terrorist attack thousands of miles away in
Egypt, he is sampling calling attention to the fact that terrorism is still going on.
That this is still a threat happening in the Middle East, happening in the United States. It can happen anywhere, and therefore he is once again
bringing up this idea of more stringent immigration restrictions.
However, Egypt was never on that list of countries he banned in either iteration of that travel ban.
NEWTON: No. It was not.
DIAMOND: And of course, the wall would be between Mexico and United States. So it's hard to do that. But, again, it's about once again
reminding people that this is a really present threat. And any opportunity that he can get to call attention to that, something that is politically
savvy for him to do help him with his base, helps him rally the country around this central threat of terrorism, it's a winning playbook for him or
at least it has been in the past.
NEWTON: And one thing he is not calling attention to though, not tweeting about so far is Michael Flynn and the fact that he apparently now has
stopped, his lawyers have stopped cooperating with other lawyers that is looking into this Russia investigation and the special counsel's
There has been a lot of speculation as to what that means if anything, but certainly it must mean that the investigation continues to get further and
further into exactly what happened.
DIAMOND: That's right. Listen, at its worst, it means that Michael Flynn is cooperating with the FBI to give them incriminating information about
the president or about someone else. That is the worst possible case scenario for the president here. At its best it means that Michael Flynn
is simply having discussions about either a potential deal or perhaps about cooperating with the investigators, but we don't know exactly where that
But again this, once again puts this front and center for the president, for the White House as something that they constantly have to have looking
behind their shoulder and trying to make sure that there is nothing that is going to come in and quash plans whether it's with tax reform or with
We have seen how this issue of the investigation can be such a potent distraction for the president. And even his White House Chief of Staff
John Kelly has said that it is a distraction for the president to have this investigation hanging over him.
So once again, regardless of where this leads to with Michael Flynn, it is another sign that this continues to cast a shadow over the White House or
in this case over Mar-a-Lago.
NEWTON: Absolutely. And before we all get to what we hope is going to be a restful weekend, we still have tax reform next week. I mean, Jeremy,
it's easy to forget that that is a major piece of legislation and yet when we look at the Senate, is it a sure thing?
DIAMOND: It is not. It is not. I think at this point it is probably a toss-up. The interesting thing is we have seen some senators like Ron
Johnson who would typically be a reliable vote for corporate taxes, for lowering taxes overall already coming out right out the gate before this
even makes it even to the Senate floor to say that he has problems with the way the bill has been crafted so far.
So, these are major, major problems. And the White House is not going to have an easy task to wrangle 52 Republicans. This is a very slim majority
that the president keeps running up against and despite having a majority hasn't really been able to get that signature legislative accomplishment.
NEWTON: Yes. And he is still not tweeting about it and tweeting about the NFL and golf and all sorts of things and not that, so we will see.
DIAMOND: More pressing concerns at Mar-a-Lago.
NEWTON: Apparently. All right. Jeremy, have a great weekend. It is nice to see here in person.
Now, you've tried renaming it at dropping zeros over those money makeovers, but Zimbabwe still needs to find a stable currency of its own. It uses the
U.S. dollar. We'll look at ways this country can finally put hyperinflation behind it.
NEWTON: Zimbabwe's new leader, Emmerson Mnangagwa, has promised new reforms to jumpstart a lifeless economy. The country without a currency of
its own, yes, without a currency of its own before the U.S. dollar was adopted in 2009, Zimbabwe's inflation rate reached 231 million percent.
Yes, not even worth thinking about. The economist Steve Hanke joins me now. He is an expert in hyperinflation and he joins me now from Baltimore.
I mean, it looks like a bit of a hopeless situation, and yet there must be a step by step program that the government can follow.
Please let us know what that is and is the toughest thing about that is getting the government to actually follow it?
STEVE HANKE, ECONOMIST: Well, Paula, good to be with you, just one correction, the inflation peaked actually in November 14th of 2008 at 89.7
sextillion percent, so your number's off. To get that Paula, get your pencil, write down 897 and then 20 zeros after that.
It was the second highest hyperinflation in the world. And then, what happened, the Zimbabweans stopped using their own currency because it
wasn't worth anything. The $100 trillion Zimbabwe note was worthless; $100 trillion wasn't worth anything in Zimbabwe.
So they stopped on November 14th, 2008 and the U.S. dollar became the coin of the realm so to speak. In 2009, they officially went to U.S. dollar and
what they should do, the problem is they still have the Reserve Bank of Zimbabwe. Now, in 2016, they started issuing funny money. They called it
the museum dollar. And what happened? As night follows day, they had another hyperinflation, the second one in 10 years. And there has only
been Peru and a few of the former Soviet Republics that have had two hyperinflations ever.
And that really was one of the major factors that did kleptocratic economic disaster Mugabe in and got him out of there. The people just were fed up
NEWTON: But what do you do? What do you do to get out of it? Now, that there seems to be some kind of goodwill from the government?
HANKE: Okay, the first step is that the reserve bank of Zimbabwe should have been mothballed and put in a museum a long time ago, so they could do
that right now, so they can stop printing money and the U.S. dollar should be the one that they use.
Thirty-three other countries in the world are dollarized and they do very well. Of course, the big one close by that we know about is Panama, but you
have even got Ecuador and El Salvador that are dollarized.
And the economy in Zimbabwe could run perfectly well without the central bank. That is the first step. The other thing is that they do have a
problem. You have kind of alluded to it, Paula and that is all the actors on the scene except Mugabe are the same ones that have been on the scene
for 37 years.
And all the institutions are the same institutions, even including the reserve bank, so the first step that they really have to do to get a
confidence shock is to get off of this kind of kick that they are on. They think if they pass the begging bowl, that they will veiled out foreign aid
and foreign institutions. They key is, in these situations Zimbabweans made the mess they are in and Zimbabweans will fix the mess that they are
And they have to make it easy for people to start doing private business.
NEWTON: Right, right. And to have some confidence that their currency will be worth something the day after.
We have to leave it there, Professor Hanke, thank you very much. Appreciate it. As we continue to follow this extraordinary story. Thank
Now, modern day slavery is real and it is rife. Protestors are demanding an end to the practice following CNN's exclusive reporting on the sale of
human beings in Libya.
NEWTON: Now, more protests are expected in Paris in the wake of CNN's exclusive reporting in the human slave auctions in Libya. Now, the global
response has been absolutely staggering. The president of France wants the U.N. to take action immediately. Melissa Bell reports.
(BEGIN VIDEO CLIP)
MELISSA BELL, CNN PARIS CORRESPONDENT: For the second time in a week, protestors gathered in Paris to express their anger and to call for an end
to slavery. The trigger? CNN's exclusive reporting on Libya's slave markets.
UNIDENTIFIED MALE: We talk about the weight of words and the shot of images. People were able to see for themselves.
BELL: This is what people were able to see. Dozens of men in Libya being sold at auction, many for as little $400. President Emmanuel Macron wants
the U.N. to act.
EMMANUEL MACRON, PRESIDENT OF FRANCE: It is a crime against humanity. It is one of the forms of trafficking that is the most profitable today and
that leads to the most serious crimes and that hits in the terrorist networks.
BELL: The French president was joined this week in Paris by the head of the African Union. He too wants more than words.
MOUSSA FAKI, HEAD OF THE AFRICAN UNION: We are in a situation where human beings are threatened. Imagine you find yourself in a state where human
beings are sold and are sold in a souk to the highest bidder. This is abominable. And no conscience is going to accept it. We have to act and
we have to act now.
BELL: That sense of outrage has also been expressed this week in France's national assembly. VNP (inaudible) the great, great, grandson of a slave
received a standing ovation when he delivered a passionate plea to Parliament to act.
And it was the viral Facebook post of another descendant of Guadeloupian slaves, the journalist, Claudy Siar that led to last Saturday's protest in
Paris. But he believes that the consequences maybe felt elsewhere.
CLAUDY SIAR, JOURNALIST: It has to serve as a wakeup call to African leaders. And I think that would regards to the pictures, there will be a
before and after. It is not impossible to imagine that some political systems, that some governments in Africa may wobble and even fall in the
coming months because there has been an awakening and there is a desire for revolution today.
BELL: The numbers in today's protests are down than what they were last week. But the anger of those here is undiminished. And the organizers say
that they will continue holding these protests so that the momentum is not lost.
Melissa Bell, CNN in Paris.
(END VIDEO CLIP)
NEWTON: And that is Quest Means Business, I am Paula Newton in New York. Please enjoy your weekend. And I can tell you, Richard will be back here