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QUEST MEANS BUSINESS
Trump Says the U.S. Recognizes Jerusalem as Israel's Capita; Poundland Owner Hit by Accounting Scandal; Google Removes YouTube from Amazon Devices; Wildfires Rage near Los Angeles; Ford Predicts the Future to Set Business Strategy. Aired 4-5p ET
Aired December 6, 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] RICHARD QUEST, CNN HOST: Closing bell ringing on Wall Street. Dow Jones is up 34 points. S&P is down, as well. The Nasdaq is the only
market that's gaining, certainly no record. The S&P eking out a small gain, going backwards and forwards. Come on, sir, you didn't push the
bell, and you're having difficulty doing the gavel. This is not exactly an impress performance at the end of trading -- when trading is over. I hope
he doesn't got a very serious job, on Wednesday, December the 6th.
Tonight, President Trump upends decades of foreign policy precedents. CNN, we are live in Jerusalem and the West Bank. The owner of Poundland finds
its a few pennies short. Steinhoff shares get a massive price cut. And stuck in the middle with YouTube. Google escalates its fight with Amazon.
The Titans are at war.
I'm Richard Quest, live in the world's financial capital, New York City, where I mean business.
Good evening. What happened today may be President Trump's most dramatic decision-making so far. The U.S. President has declared Jerusalem to be
recognized as Israel's capital in the eyes of the United States. A few hours ago, the White House, the President said he was making the move in
the interest of achieving peace in the Middle East. In doing so, his decision breaks with decades, more than 70 years, of U.S. foreign policy.
It's already received praise from Israel's government, and condemnation various others. Mr. Trump said he was merely stating the obvious.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: This is nothing more or less than a recognition of reality. It is also the right thing to do. It's
something that has to be done.
(END VIDEO CLIP)
QUEST: Something that has to be done. With me is Nic Robertson in Jerusalem. Ian Lee is in Ramallah. Gentlemen, you're going to give me the
views as seen from the people on your sides of the border. Start with you, Nic. Benjamin Netanyahu, widely welcomed this. How is this decision going
down in Israel?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: It's going down very well. If you look at or if you could see around the corner behind me, the
walls of the old city at the Jaffa Gate here. You'd be able to see a projection of the U.S. and Israeli flags flying side-by-side. It is felt
by people here to have been long overdue. Prime Minister Netanyahu called this courageous. The minister of transport earlier today Israel Katz said
this was an historic day. And anyone who didn't recognize Jerusalem as the capital of Israel didn't recognize the state of Israel. The mayor of
Jerusalem, Nir Barkat, stood right where I am here a few hours ago and said that he welcomed this, welcomed the United States decision. So, it's
pretty much across the board. Not entirely. Some left politicians here pushing back again. But widely, widely welcomed, widely received as a very
positive thing at this stage.
QUEST: Ian Lee, isn't the President right when he says it's a statement of the obvious, even though obviously, from where you are, the move has been
IAN LEE, CNN CORRESPONDENT: Well, for the President, when he says that he's stating the obvious, possibly referring to the fact that Israel's
government is based in Jerusalem. They Knesset is there, Israel's parliament, the Prime Minister's office is there, the President is there.
And so, the government is run out of Jerusalem. But for the Palestinians, they see this as a blow to the peace process, and to the fact that they
want East Jerusalem to be the capital of their future state. And we've heard from a number of Palestinian officials. Palestinian President,
Mahmoud Abbas, consulted other Arab after President Trump's speech. He talked to President Sisi of Egypt as one of them to get their beliefs in
[16:05:03] And he released a statement. He said that, you know, this is going to embolden extremists. It's going to harm the region. He also
brushed it aside a bit and said, well, even though the United States said this doesn't mean the international community is going to follow suit.
That's one country believing Jerusalem is the capital of Israel, but the rest of the world so far doesn't have that opinion -- Richard.
QUEST: Ian Lee in Ramallah, thank you. Staying with you, Nic Robertson, for the moment. Nic, the issue now becomes, you know, where it goes next.
Is this as damaging to the peace as those in opposition suggest?
ROBERTSON: It depends in large part as all politics does, with what happens on the street. What's the popular mood. Now, if there are
widespread demonstrations, and we've heard -- what's been described as three days of rage, from different Palestinian groups. If this happens,
and if this transpires, certainly that will embolden Palestinian leaders to take a firmer position. But where they're at right now, and if you listen
to what's -- the detail of what they have been saying as we have been doing through the day, is that they say the United States really is not an honest
broker, cannot be seen as a mediator between Israelis and Palestinians here.
So, if you're Palestinian leadership, you're probably wanting to tap into that widespread international, you know, international feeling that what
President Trump has done here is the wrong thing. That's certainly what British Prime Minister Theresa May said. That it wasn't helpful, it was
the wrong thing. That Jerusalem should be decided as part of negotiations. If you're Palestinian negotiators, you want to tap into that and harness
it, and perhaps try to further internationalize the negotiations of the future, the peace talks between Palestinians and Israelis. And we didn't
get detail on that from President Trump today.
QUEST: Nic Robertson in Jerusalem. Thank you.
Christiane Amanpour is with me now. Christiane, the question will follow what I'm about to say. But I want to make sure you -- the Czech Republic
recognizes Jerusalem as the capital of Israel, as well as the future state of Palestine. The French President called it regrettable and said France
does not approved. Jordan's King Abdullah warned ignoring Palestinian, Muslim and Christian rights could fuel terrorism. The Secretary General of
the U.N. says he's opposed to any unilateral measures. Now Christiane Amanpour, we need your assistance, guidance and help here. How much of a
mess is this tonight?
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: It's a pretty big mess precisely because of the reaction that your seeing, which was
anticipated. Look, the President, who likes to call himself a disrupter, who likes to sort of appease various of the political groups in the United
States, without really thinking about what it's going to do abroad.
You know, he has challenged his allies now on NATO, to begin with. Remember no commitment to Article 5 from him. On the climate, remember
pulling the U.S. out of climate. On the Iran nuclear deal, making it, you know, more possible for the U.S. to pull out of that. And now on this.
Breaking with, you know, literally decades of U.S. and international consensus on this. And that's -- I've been told by those who I'm talking
to is going to make it very difficult and dangerous and isolating and potentially dangerous for the United States. Forget about the people in
the region, but for the United States as well. And it's going to make Arab leaders less able, even if they want to, according to my sources, even have
the U.S. around the peace table. Because their street won't tolerate it. I think that's a problem.
QUEST: Right. But surely, all these arguments were known by the President, and by the White House. And certainly, in the days -- in the
previous days -- these have been made clear. I suppose I could really sum this up very simply. Why did he do it?
AMANPOUR: Well, it's a really good question. He likes to say that he is the man who actually for the first time ever keeps his campaign promises.
So that's how he likes to bill himself. He has a very, very important evangelical core group who are his supporters and who are Mike Pence's
people. He has very important deep-pocketed donors in the American Jewish community, and others who are very important to him. So, while it's a
narrow tranche, it's an important tranche of supporters that he has who like and approve of this.
The problem with it, of course, is that as -- again, it was said to me, the President has also, along with all of this, touted that there is an art of
the deal, peace deal of the century, you know, amazing megadeal to be made. But having done this, it is possible that this deal, which has been sort of
talked about, but not put on the table, could actually be in the words of one former negotiator, stillborn. And there is no detail about any deal.
And we don't know anything about what may or may not be in the offering.
[16:10:00] But I tell you, the Palestinians are now saying publicly, and I had Saeb Erekat, the former chief negotiator on, that, you know, the
President may have committed America to continuing the two-state solution. But what he said crashes and burns that principle. And what will make it
much more likely that there will be a one-state solution, he said, from the Mediterranean to the River Jordan or vice versa, and that it will either be
in Israeli in his parts apartheid sate or won't be a Jewish democratic state because of potentially being outnumbered by the Palestinians,
Muslims, Arabs the future to come. So, it is really hard to see where this leads to a peace process.
QUEST: Christiane, thank you for staying late and talking to us tonight. I appreciate it, thank you.
Now we returned to our agenda now. In addition to the decision on Jerusalem, President Trump is making a bold statement on long-term
potential of the U.S. Economy. Saying GDP is gathering steam and heading higher. Listen to what he said.
(BEGIN VIDEO CLIP)
TRUMP: If you look back in your notes, you'll say when I said 4 percent, people said that would be years. Well, it's turned out that I'm right.
Because without the hurricanes, this last quarter, we would have hit 4 percent. At 3.3 percent, which was adjusted previously, this is far beyond
what anybody thought we would be at. So, we're at 3.3 percent GDP. I see no reason why we don't go to 4, 5 and even 6 percent.
(END VIDEO CLIP)
QUEST: The last time GDP hit 6 percent was in the third quarter of 2003. Very different days. Lindsey Piegza joins me. The chief economist at
Stifel Economics. She joins me from Chicago. What did you make when you heard President Trump say earlier today? Is it realistic four, five or
even 6 percent growth?
LINDSEY PIEGZA, CHIEF ECONOMIST, STIFEL ECONOMICS: It's certainly very optimistic. Remember for the better part of past decade now the U.S.
Economy has been growing at closer to a 2 percent pace. So significantly below what the President is calling for. Now, certainly we have seen a
pickup in growth in the latest second and third quarters. Closer to 3 percent. But a good portion of that was temporary support from inventory
rebuilding and really pent up demand from businesses that have been sitting on the sideline.
QUEST: Lindsey, the President says it would have been 4 percent, but for the hurricane. Firstly, is he right? And secondly, as we saw in a graph
that we have just shown, that rate of growth, which is now hitting 3.1, 3.3 percent, does seem to follow on from his election and taking office as
President. He's entitled, surely, to say that this is his 3, 4 percent.
PIEGZA: Well, he is entitled to say that. But we also have to factor in what happened in the initial quarter following his election, which was just
1.2 percent growth. So thus far for 2017, we're still talking about a moderate pace of right around 2.5 percent. Now, as far as the hurricanes,
remember, the hurricanes hit in late August, early September. So, by mid- September, which is still in the third quarter, we were already seeing that rebound in consumption and a rebound in rebuilding. So really, that
initial drop in activity was more than offset by the rebound that was included in the end of the third quarter. So, I don't think the hurricane
can be attributed or blamed for that lack of growth beyond 3 percent in the third quarter.
QUEST: At the end of the day, is he hoping it will all become a self- fulfilling prophecy. If I say it will hit 4 percent, it will hit 4 percent. If talk up the market enough, it will eventually rise. If I say
consumer confidence is at an all-time high, and unemployment is at an all- time low, people will believe it because that fact is true and eventually becomes a self-fulfilling prophecy.
PIEGZA: He's not the first politician to try and talk up the market. And certainly, the average person does turn to our politicians for a more
positive spin on what's happening out in the marketplace. And we do know that a lot of market activity is driven by consumer psychology. So, the
more confident consumers feel, the more likely they go out in the marketplace. Particularly during this key holiday spending season. So, I
think 6 percent, Yes, maybe a little optimistic. But we certainly want to hear a Rosie spin from our leaders in Washington.
Lindsey, thank you. Your first time on QUEST MEANS BUSINESS. I do hope you'll come back again and we'll talk about these things.
PIEGZA: Thank you very much.
QUEST: We look forward to having you with us.
PIEGZA: Look forward to being back.
QUEST: Thank you.
Investors are not counting on 6 percent economic growth just yet. Lackluster session for stocks overall. Just look at that. Oil prices
fell. Brent was down over 2.5 percent. The story got much of the financial headlines, another milestone for the virtual currency bitcoin.
And the market that we're looking at the moment was just all over the shop.
[16:15:00] PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: Yes, you really have the market searching for direction right now, Richard. Because we're
waiting on a lot of things. We're waiting to see what's going to happen with tax reform. We're waiting to see what's going to happen with the jobs
report that comes out on Friday. Those are two key things. Obviously, there's the possibility of a government shutdown, as well. So, there are
things that investors are just sitting back and waiting to see how they develop before making any firm commitments.
QUEST: Bitcoin, bitcoin.
LA MONICA: Woo. No one's waiting on bitcoin. Are they?
QUEST: What happened?
LA MONICA: It is just -- in some respects, you have to say it is a bubble that is brewing, and this could end badly. Because it's just hyperbolic,
the price rises we have seen, above now 13,000. But in fairness to bitcoin, bitcoin is growing in legitimacy, because you have the CBOE, the
CME and Nasdaq all talking about trading futures on it, and that definitely could bring in bigger institutional investment type money into this
cryptocurrency. And a lot of people do like the fact that bitcoin is not something you have to worry about with regard to central bank policies.
QUEST: But if it's a currency, whether it's a crypto or otherwise, currencies are not supposed to move at that sort of rate.
LA MONICA: No, they definitely aren't. And I think you even had Alan Greenspan talking a little bit earlier on CNBC, warning about how rapidly
this has risen. I think it is unprecedented to see something go up this much. I mean, this puts even the tech stock boom of the late 90s in
comparison. It really makes that look like it was just a tiny blip.
QUEST: At .com. Whatever was called.
LA MONICA: Ah, yes.
QUEST: Good to see you. Thank you.
LA MONICA: Thank you.
QUEST: As we continue tonight on our conversation, imagine you get an Amazon smart device for Christmas, and by New Year's Day, it stops running
YouTube. That could be the result of a new and very nasty battle between Amazon and Google. After the break.
QUEST: The true titans of tech. In a row between Amazon and Google own smart devices is getting ever nastier, and it's their customers are left to
suffer. Two of the world's biggest tech companies, biggest companies, full stop, are now lobbying rocks at each other from their own side of the
Join me in the walled garden of tech, where each was to remain on its own side of the fence. From January the 1st, the YouTube app will no longer
work on Amazon devices like the Echo show or Fire TV. It's a response to Amazon not stocking Google's devices like Google Home and Chromecast. They
want to keep their consumers, their buyers -- they want to keep their customers in their own walled garden. Amazon and Google are fierce
competitors on both smart devices and streaming services. In fact, Amazon Prime Video already won't work on Google devices like Comcast. Is the
walled garden going to become a new war zone over the hedge?
[16:20:00] Scott Galloway is with me. Good to see you Scott. He's the professor at NYU. And we need to have some perspective on this. Also, the
author of "The Four," a book on --
SCOTT GALLOWAY, PROFESSOR OF MARKETING, NYU STERN SCHOOL OF BUSINESS: Good to see you.
QUEST: -- the Fangs. What do you make of this battle, where, you know, one is not going to be available on the other?
GALLOWAY: I think this is really just a border skirmish. It's similar to when one of the broadcast networks couldn't come to terms on payments to
some of the cable companies, and they would go dark for a couple days. Some positioning, and they both figured out ultimately, I think they start
selling on each other's platforms. The more serious question is, these guys are full throttle going after each other in the home, even in search.
Amazon had 44 percent of product search. Now it's 55. So, the titans, if you will, are going head-on into each other. Each wakes up in the morning
and feels they're the rightful heir to the iron throne. They're all going after each other's business now. But in this instance, Chromecast,
YouTube, this is small ball. They'll figure this out.
QUEST: Why would they want to annoy customers like this? If you've just - - you've just bought an Amazon device and you can't get YouTube, which is pretty ubiquitous for most of us who just want to quickly look at something
and a link takes you to use one. You certainly found it wasn't available on your Amazon device, you'd be pretty annoyed.
GALLOWAY: Yes, they don't want to upset their consumers. But what you had was Amazon refusing to stock certain --
QUEST: Google devices.
GALLOWAY: Google devices. And Google brought out the big gun and said, fine, we're no longer going to let you stream YouTube on the Amazon Show.
So quick query. Who is Google's biggest customer? Who spends more on google than any company in the world?
QUEST: Give me the answer.
GALLOWAY: Amazon. So, these guys have a vested interest in working with each other where they have to. But this stuff, like I said, is just a
border skirmish. They'll figure it out.
QUEST: So, the bigger picture of getting into each other's business. At the end of the day though, Amazon has real hard infrastructure to deliver
QUEST: I admit, Amazon web services is slightly different. And Google can move into those sort of -- and is moving into those sorts of areas. But
it's not as easy for Amazon -- sorry, for Google or for Facebook or for any of the others to certainly deliver hard goods.
GALLOWAY: So, I thank you summarized it perfectly, Richard. The model for creating potentially being the first trillion-dollar market cap company,
and I think it's going to be Amazon, is you use kind of digital and network technologies to scale really fast and get hundreds of billions of market
cap. And then you use that access to cheap capital to build analog moats that give you 5, 10, 20 years. Apple has built 550 temples to the brand.
It's going to take Samsung 10 or 20 years to catch up. Amazon has built a fulfillment network that costs them $7.5 billion a year. They have a
warehouse within 20 miles of 45 percent of the U.S. population. Google would take 20 years to do that.
So, the idea is, build digital businesses, get the markets excited, go raise a ton of money and then build analog moats with that capital. And
Amazon has done the best job and is the reason why they're going to be the first trillion-dollar company, even though there the furthest away.
QUEST: So, when you have Amazon and Alibaba, they're not completely analogous to each other, but it's pretty similar in terms of the core. Who
wins between those two?
GALLOWAY: So, Alibaba, an incredible company. I personally believe that Amazon will get their first. Because the key to getting to $1 trillion I
think is global appeal and global scale. And while some of the Chinese big companies have incredible scale, owning a huge portion of the fastest-
growing economy in the world, China, typically Chinese companies aren't great at going global. So, would you know Alibaba as a consumer if you
weren't reporting on a business show?
QUEST: Probably not.
GALLOWAY: Right. Whereas a lot of people in Europe, a lot of people abroad, a lot people in Canada do know Amazon. Amazon is a global brand.
I would argue Alibaba isn't.
QUEST: Good to see you, sir.
GALLOWAY: Good to see you. Thank you for your time.
QUEST: Thank you so much.
GALLOWAY: My pleasure.
QUEST: Helping us understand this.
The owner of the British retailer, Poundland, has a few misplaced pennies. There's an accounting scandal rocking one of the biggest companies in South
Africa. Shares in Steinhoff international lost more than 70 percent of their market value. And they commit a major financial crisis. So, who is
this company? This country that you've heard of? You probably don't know its parent company. It's a retail empire. In the U.S., it's got mattress
firm, which used to be Sleepy's. In the U.K., it owns Poundland.
[16:25:02] In Europe, it's got Conformer. In Australia, Freedom Furniture. And in South Africa Ackermans. Eleni Giokos is in Johannesburg. What has
gone wrong with Steinhoff?
ELENI GIOKOS, CNNMONEY AFRICA CORRESPONDENT: Yes. Well, I mean firstly, Steinhoff announced that it wasn't able to release results today and that,
of course, sending extreme panic through the market. That's why you saw $10 billion, Richard, wiped off its market cap in just one day. You've got
the CEO that has been pushed out. Markus Jooste, a man at the helm for over 20 years, and he's the guy that took the company from just an African-
based company to a global entity.
So, everyone is saying this has got to be really big and kind of emanates from the fact that the German -- you know, German prosecutors are currently
investigating the company for what they say is accounting irregularities. Now you and I know, it's a very big statement, it's very broad. It could
mean a lot of different things. And people are saying that it could mean, you know, issues with tax -- we have seen multinationals, Richard, globally
looking for the most attractive tax jurisdictions. It could be that. But it could be a lot worse.
QUEST: All right. But when we look at what has gone wrong here, Steinhoff made it clear that they have great brands, and that hasn't changed. And
there is a certain truth in that, isn't there? The company may be a bit dodgy on the books. May or may not be. We don't know. But the underlying
companies that it owns are very strong.
GIOKOS: Very strong. And it's interesting that in a statement today, kind of had, you know -- that is sort of a last statement, saying we have very
strong assets. You know, we are reminding shareholders of this. But these strong assets don't mean very much if you can't service your debts. And
the company has acquired a lot of debt because of this in massive spree that it's been on over the last few years. It doesn't really help when
your share prices plummeting to the extent it has, and investors have lost all the confidence in your company.
They're going to have to turn this around very quickly. And They're going to have to send the right messages to investors. And it's interesting
you're saying cooking books. Let me tell you, there's two schools of thought about the company in South Africa. Some say that Markus Jooste was
an accounting genius. And others say that he knew how to fudge the numbers. And it's really going to be interesting to see how this, you
know, German investigation goes on.
QUEST: Good to see you, Eleni. Eleni Giokos in what's obviously, a rather breezy night in Johannesburg tonight. Battling on through against the
wind. Thank you.
Donald Trump has delivered on another campaign promise. This time it involves one of the most sensitive issues in the Middle East. The
recognition of Jerusalem as the capital of Israel.
[16:30:05] QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. When tens of thousands of people are forced to
flee as wildfires are scorching Southern California. The pictures are quite dramatically worrying.
And Ford, the motor company, looking into the future to figure out what we'll want to buy. The futurist -- the chief futurist will join me in the
present. Before that you're watching CNN and on this network, the facts always come first.
Donald Trump has officially recognized Jerusalem as the capital of Israel. And announced plans to move the American embassy there. A decision breaks
with seven decades of U.S. foreign policy. Israel's prime minister praised the move. Many world leaders have condemned the decision.
Vladimir Putin, Russia's president, announced his decision to run again in 2018. His announcement was met with cheers from a crowd of veterans and
workers on Wednesday. If elected next March, it would be his fourth term as president separated by a term as prime minister in the middle.
Donald Trump Jr. Made a long-awaited closed-door appearance from Wednesday before the U.S. House Intelligence Committee on Capitol Hill. Multiple
sources claim he told house investigators he spoke to a White House aide not his father. When confronted about news reports on a Trump Tower
meeting in June last year. The committee is investigating the Russian involvement in the presidential election.
The popular French musician, Johnnie Halliday, has died. He was 74 years old. He is reported to have been battling lung cancer. The French
president's office issued a statement, saying the public today is in tears in the whole country is in mourning.
Returning to our top story this hour, President Trump recognizes Jerusalem as the Israeli capital, highly controversial, breaks with decades of U.S.
Sara Murray is at the White House. And as I asked Christiane Amanpour, I can keep it really simple tonight, Sara. Why now?
SARA MURRAY, CNN WHITE HOUSE CORRESPONDENT: It's a great question. What we saw is president Trump wanting to fulfill what he believed was a key
campaign promise from his presidential campaign. He came out and when he made this announcement today, essentially said, we are no closer to
reaching a peace agreement between the Israelis and the Palestinians. Now, the White House has argued this will not undermine any future agreement,
but they haven't been able to give any kind of explanation as to why they think this might help the process.
QUEST: OK. So, if that is the case, there are other -- there are other campaign promises that he didn't keep. And I'm thinking naming China as a
currency manipulator. The idea of what he was going to do about NATO. Even just -- a variety of others that he either fudged or chose not to go
forward to. Was this seen as sort of a -- and easy to get in difficult times?
MURRAY: I think this was one way for him to play to the base. I think that the White House is certainly optimistic or perhaps others would say
naive that there would not be a major backlash to this in the middle east, although we have obviously heard a lot of concern, consternation in
promises of days of rage already.
And that is where some people are saying the White House is simply naive in this. But we know the president has been preoccupied with shoring up his
base, with doing things to make his base supporters happy. It is also worth noting, this is kind of thing that is going to take time. White
House officials acknowledge that just because they're moving forward with this today, you it could still take three to four years before they move
the U.S. Embassy.
QUEST: Finally, briefly, Sara, this is going to absolutely -- his base is going to love it.
MURRAY: President's base, sure. I mean, to the extent that this revs them up, Yes. This might make them happy. I think the question is, OK, does
this undermine some of your broader policy goals? Remember, the president had his own son-in-law, Jared Kushner, working on a Mid-East peace
agreement. This is the kind of thing that as much as the White House says won't impact it, it's hard to imagine that this will have no effect on that
process. And on what Kushner has been working on and seen as his key agenda item since day one.
QUEST: Sara, thank you, as always giving us time from the White House.
One Palestinian-led group is calling for more economic pressure on Israel in light of the president's decision. It's the BDS movement calling for
boycott, disinvestment and sanctions from companies allegedly involved in violating Palestinian rights.
[16:35:00] Sanctions on the Israeli government itself. Benjamin Netanyahu, the Israeli Prime Minister's moved to bar supporters of the campaign from
entering the country.
Orin Libermann is our Jerusalem correspondent and fortuitously for us, with us tonight. Good to see you.
ORIN LIBERMANN, CNN CORRESPONDENT: Pleasure to be here.
QUEST: The BDS movement. How successful has it been?
LIBERMANN: They have claimed a few successes. Most notably probably is SodaStream, which moved their offices from the West Bank into Israel,
partly because of pressure from BDS. They have also claimed a few other successes whether it is G4S the security company essentially moving their
operations, moving the contracts out of Israel. And a cell phone company, partner splitting and not renewing their contract to work together.
They have claimed those successes, even if those companies said, look, we weren't influenced by BDS. The question of how much economic pressure they
have actually been able to bear on Israel, a much more difficult question to answer. Israel wants to downplay that number.
QUEST: All right. On the substantive issue talked about today, again, I can ask simple questions tonight. Is this going to damage the peace talks,
such as they are, and why? Explain to a viewer why this recognition should damage.
LIBERMANN: Let me say something I'm sure has been said over and over again. Jerusalem, the most sensitive issue in the conflict wasn't supposed
to be decided until the end of negotiations. You can't say, we recognize the Israeli side, now let's start
negotiations. You have prejudged, pre-decided, predetermined, the most sensitive part of the negotiations that wasn't supposed to happen until
very end. That's part of the answer there. Why this makes it more difficult.
QUEST: But everybody has always known that ultimately, Israel was going to be -- Jerusalem was going to be recognized as the capital of Israel. Now,
whether or not it's the whole city, the west versus the east, which part of it, that's the bit that has to be decided right at the end.
LIBERMANN: The whole thing has to be decided together. It's a process. And this avoids the process. It skips the process by deciding that
Jerusalem is the capital of Israel, and there is an end in this sentence or a but. It's where does the Palestinian side fall here? Is it east
Jerusalem as the capital? That's what hasn't been decided here.
And that's why the Palestinians are saying, look, the U.S. Is no longer the impartial negotiator in the peace process that they were always supposed to
be. Now Trump tried to use some subtle and nuanced language to say, look, Jerusalem is the capital of Israel. Boundaries, negotiations, we'll deal
with all of that in the peace process. The problem is, and you know this, Richard, the middle east doesn't do well with nuance and subtlety. And
we're seeing that in the reactions we're getting from world leaders.
QUEST: Let me just -- could this -- see from the president's point of view. Could this be the key that does unlock a process? Everybody's
frothing at the mouth at the moment. In saying how dreadful it all is.
But the president has a valid point when he says, for 22 years, since 1995, and the congressional bill -- act was passed. That hasn't opposed Oslo in
all of that. That hasn't helped.
LIBERMANN: You're asking me to predict the future in the middle east. Only a fool would go so far as to that. Clearly the process has not
QUEST: Right. It hasn't worked. So, if that hasn't worked, you might as well try something else.
LIBERMANN: Let me point this out. I know it's a related answer. Prime Minister Benjamin Netanyahu, who had a call with Trump, didn't comment
before Trump's speech. And when he issued a statement, it was fairly generic and accepting. The question is, and perhaps we'll get a better
answer of this in the coming days or weeks, what price does Netanyahu have to pay for the recognition that Trump just gave him?
Is it come out and recognize the two-state solution? If there is a price like that, then perhaps there is some sort of movement on the process.
That perhaps is what Trump has in mind. He grants Netanyahu the greatest diplomatic victory that Israel can ask for. What is the price, Netanyahu,
what is the price the Israeli government has to pay? You don't know the answer yet.
QUEST: When are you going back?
LIBERMANN: Sunday. If not earlier.
QUEST: Don't let me stop you. Airport is that direction. Thank you. Thank you. Orin, great to have you with us, thank you.
Frightening scenes from California, where raging fires are rapidly burning across the northern and western edges of Los Angeles. The whole of So Cal
is up in (inaudible).
[16:40:00] (COMMERCIAL BREAK)
QUEST: QUEST MEANS BUSINESS in this week's "Traders." An inventor with a head full of dreams. He is turning rock concerts into magical experiences
and he is doing all of that with a little help from Coldplay.
UNIDENTIFIED MALE: Thousands of football fans gathered at Seville Stadium to watch a match against Liverpool. This synchronized light display to
help warm up the crowd is an ingenuous British invention that starts with a tiny electronic light.
JASON REGLER, XYLOBANDS INVENTOR AND CEO: We consider ourselves the Wallace LED Solution company. I'm not massively clever. I'm not a
postgraduate. I'm not, you know, a grade 'a' student, but I think I'm quite driven, motivated and determined and all those other sort of things.
UNIDENTIFIED MALE: Xyloband's create wristbands with integrated radio- controlled dancing lights, capable of being programmed to respond to music and enhance any event. The desire to use LED lights was born out of Regler
finding himself in a dark place.
REGLER: I went through a really sort of crappy time. But at the same time, if I hadn't, possibly this wouldn't have happened.
UNIDENTIFIED MALE: Inspiration came from the music of Coldplay, a series of events that Regler calls fate connected him to the band.
REGLER: All those lyrics. I saw them triggering things, and in a way triggered good things for me. I know, I'm going to do a wristband, and
it's going to bring people together and we're all going to be forgetting. That was the whole thing about the wristband, was about unity, switching
off, so you can go somewhere and once that euphoric moment happens, you don't think about anything.
UNIDENTIFIED MALE: The first project debuted in the Spanish capital of Madrid in 2011. The concert gave Xyloband global exposure. The LED Glow
has become a visual signature for Coldplay performances ever since.
REGLER: We were the first to do this, and we created the market.
UNIDENTIFIED MALE: The trade-onomics of the LED sparkled. The Nobel Prize winning invention has generated a market expected to top $90 billion by
2022. Consuming up to 80 percent less electricity, its potential outshines that of an ordinary bulb burning both brighter and longer, 25 times longer.
Small in size, made without mercury, at a lower cost, and recyclable, as its integration into smart tech grows, the future for LEDs looks bright.
REGLER: You can use a wristband, you can return it, and we'll give you money back for it, and we can recycle responsibly.
UNIDENTIFIED MALE: As the multimillion dollar company grows, 3-D printing will play a big part in its future. But it's a hands-on labor of love that
ensures each wristband functions. He continues to be driven by a passion to connect people.
REGLER: I was always a Coldplay fan. They gave me confidence in myself. They encourage me to believe in myself. So, follow your dreams, Yes. Work
hard and chase what you want to do, and you will get there, you will get there, trust me.
(END OF VIDEOTAPE)
[16:45:00] (COMMERCIAL BREAK)
QUEST: Now, I was just looking at this new report. It's "Looking Further with Ford, 2018 Trends." It's a new study that says people are feeling
more overwhelmed by a political change and more uncertain about the rise of technology. While the findings may not be surprising, the author of the
study might be. It's the Ford Motor Company behind this research as part of this report. Cheryl Conley is Ford's in-house futurist and joins me
now. Good to see you.
CHERYL CONLEY, FORD'S IN-HOUSE FUTURIST: Thanks for having me.
QUEST: I have my crystal ball here, looking in to see what's happening. What is the main trend that you're seeing? We'll come to why Ford does
this in a minute. But what is the main trend that you are seeing?
CONLEY: I think there is a strong sense of disorientation, maybe a low simmering anxiety that we see worldwide.
QUEST: We can see that in political terms, Brexit, you can see it obviously in the results in Germany's election and obviously in the U.S.
Presidential election, that dissatisfaction. But why are people feeling this? Does your research tell you?
CONLEY: You know, there are a couple of theories. One is there is a backdrop of economic prosperity and, so I think it gives us time to focus
on other things. And right now, we're in this creative time of great polarization. Some people are looking at the changes as the best thing
that's ever happened. And others think it's the beginning of the end. And what's worrisome is that there is very little appetite to try to meet in
the middle ground or try to understand someone else's point of view.
QUEST: But I'm looking at the sort of things that you talk about in this report. Society treats unmarried people differently than married people.
I would like to see cities do more to ensure affordable housing. Saudi Arabia gave citizenship to a robot. All of the sort of very macro issues.
I do not mind sharing my personal information with companies. I should take better care of my emotional well-being. These are pretty big issues
that people are grappling with.
CONLEY: Indeed. And, you know, as a corporate futurist, we look to those issues to try to understand what are the forces that are shaping consumer
behavior? You know, in the auto industry, it takes three to five years to kind of build a car. So, we are constantly trying to get ahead of that
curve. And these insights. We went to nine different countries, surveyed over 9,000 people, held workshops around the world. And these were the
conversations that were taking place.
QUEST: Now let's come to you, and corporate futurist. What a delightful title. What purpose -- I mean, how does a futurist differ from a research
department that comes up with studies that manufacturing their muses?
CONLEY: So, I think that it's very complementary to market research. But where one thing ends the other begins. So, you can't quantify the future,
right? You can measure current attitudes about shifts happening right now. But there is no crystal ball that will tell you exactly what's happening.
My job within Ford isn't to predict the future.
But it is to provoke new thinking, the challenge.
QUEST: Let's just take some of these things then the people are worried about. How does Ford use that information to either redesign a car or
design a new vehicle? How do you design for anxiety, for worry, for concern about jobs futures, affordable housing, climate control? I suppose
climate control you can.
[16:50:00] CONLEY: There are a couple things. The book is put together completely outside consideration for the automotive industry. We don't get
biased by that. Sometimes there isn't always a straight-line tie to what we do. But when I look at the edge of reason and how people are worried
about this anxiety and their concern for trust, we think that brands that are stable, that are consistent and transparent, that those are -- can be
anchors during all of this uncertainty.
And so, if Ford is associated with trust, that's something we can never take for granted and we have to work really hard to protect it. So that's
the kind of conversation we might have. In terms of affordable housing, the future of cities is so tied to the future of mobility. And you've got
to understand how to make quality living there.
QUEST: You are a futurist. Take a look in there and tell me what the stock market will do tomorrow.
CONLEY: We'll talk about that after camera.
QUEST: Thank you. Good to have you.
CONLEY: Thank you.
QUEST: Johnny Hallyday, the rock 'n' roll star known as the Elvis of France, has died. We tell you about it in the news He was 74 years old.
The cause of death has not been released. Last March, he announced he was being treated for cancer. France's president, Emmanuel Macron, says he was
a vibrant icon for more than 50 years.
CNN's Jim Bittermann in Paris now, on Hallyday's life on and off the stage
JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: He was one of France's most identifiable personalities. Appeared on the cover of French
magazines more than 2, 000 times. And enjoyed a musical career that spanned more than a half century. And while outside the French-speaking
world, Johnny Hallyday was barely known, inside there was only one Johnny. His career began with the birth of rock and roll. Elvis was gaining
prominence in the U.S. And it was a music and style that he emulated.
JOHNNY HALLIDAY, FRENCH ROCK AND ROLL STAR: My first idol was Elvis, of course. He made me want to be a singer. Be a rock and roll singer.
BITTERMANN: But it would be entirely wrong to dismiss him as a French Elvis. He was far more. He captivated French young people in the '60s,
introducing them to the twist, motorcycles and fast cars.
BERTRAND DICALE, MUSIC CRITIC, FRANCE INFO RADIO JOURNALIST: Elvis was abroad. Elvis was English-speaking. He was some kind of myth. But Johnny
was a rock and roll. He was a real rock and roll. The rock and roll that you can understand about love, about fury, about rebellion. About writing
a motorcycle. Having a brand-new car. Every myth of the rock and roll was in Johnny's voice.
BITTERMANN: Yet he also branched out from his rock and roll origins, catching new trends as they came along, trying practically every sort of
popular music. From rhythm and blues to country to acid rock. In all, throughout his long career, he recorded a thousand different titles and
sold millions of records.
PHILIPPE MANOEUVRE, MUSIC CRITIC, ROCK AND FOLK MAGAZINE, EDITOR IN CHIEF: Sold more records than David Bowie, in France. David Bowie worldwide, 140,
Johnny sold 150. It's like incredible, when you think of the figures. And it has been a play in the music of the French people since the '60s.
BITTERMANN: Over the years, Hallyday developed a bad boy notoriety which turned off parents but endeared him more to their children. His reputation
grew more and more scandalous. Alcohol, girls, drugs, girlfriends, multiple marriages, he never denied any of it. And the gossipy stories
seemed to bounce off of him and seemed to enhance his career.
MANOEUVRE: Many times, people said, that's it. That's the last straw. That's the something that's going to stop his career. And it was never
more evident than in the '90s when on the front page, Johnny Hallyday has a cocaine problem. The record company was worried, and they thought, this is
it, you know. Johnny is not going to -- and he always, the people regroup. He has this army of fans. Some of them have seem him hundreds of times.
This is incredible. You have people really follow his tours from city to city.
BITTERMANN: And it was the tours Johnny and Johnny's fans look for. He loved the live audiences and went on nearly 200 concert tours, playing not
only the big cities, but to the jubilation and delight of his fans, he always managed to include small towns, as well. If there was a
disappointment for Hallyday, it was that he could never seem to transfer his appeal outside the French-speaking world.
He tried recording in English and going on tour in the Anglo-Saxon countries, but only with limited success. It didn't matter. In his
homeland, Johnny Hallyday was a legend.
[16:55:00] So much so that when it came time to commemorate the first anniversary of the terrorist attack of Charlie Hebdo, organizers chose him
to sing in tribute.
Johnny Hallyday, a rock 'n roller whose life was woven into the life of France for more than a half century.
QUEST: Johnny Hallyday who died today.
We'll just take one quick look at the markets, as we always do towards the end. To remind you how the trading day went, the Dow absolutely all over
the place. Up a bit down a bit. Round a bit. Finally ending down. But the interesting part of the day is that picture.
The Nasdaq, which we thought was going to be up, then it closed just off a smidgen, just literally a smidgen. But -- sorry, the S&P. But the Nasdaq
ekes out again, which reverses exactly what we saw yesterday. So, it's difficult to say that a rotation is underway, when the rotation seems to
have rotated as it rotated towards the rotation in the opposite direction. If you get my drift. There will be a Profitable Moment after the break.
QUEST: Tonight's Profitable Moment. In the 1990s, AOL perfected what they called the walled garden. The idea is you keep your consumers to yourself.
You don't let them go looking elsewhere for goods and services. We're seeing the same thing now between Amazon and Google when it comes to their
audio and visual.
Amazon and the question of not having access to YouTube, Google with this Amazon video and what is available. The idea is to keep your consumers to
yourself. As we heard on QUEST MEANS BUSINESS tonight, these are just skirmishes in a much bigger war between these titans of technology.
They will all win some and lose others. But it's fascinating to see just how they are doing battle to keep everybody keeping them inside, behind the
gate. Who will win?
And that's QUEST MEANS BUSINESS. Garden or not. I'm Richard Quest in New York. Whatever you're up to in hours ahead, I hope it's profitable.