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QUEST MEANS BUSINESS
Multiple Fatalities in U.S. Train Derailment; Records All Round for U.S. Markets; South Africa Ruling Party Picks New Leader; Atlanta Airport Back Online After Power Failure; New "Star Wars" Film has Second-Best Opening Ever. Aired 4-5p ET
Aired December 18, 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. The Dow Jones Industrial not quite as topper today, but not bad either.
All three major markets, the Dow, the Nasdaq and the S&P 500 are closing at records. We'll get into those details in just a moment. Oh, that's right.
That was a rather late but an energetic spurt to the gavel that brought trading to a close. It's Monday, it's December the 18th.
Tonight, on the West Coast of America serious rail accident as a train comes off a brand-new piece of track in the U.S. state of Washington. We
have no idea the number of deaths or dead or injured.
Records all around on Wall Street. The Dow 25,000 it could be just insight. And a rally for the rand as South Africa's ruling party picks its
I'm Richard Quest, live from the world financial capital New York City. Where of course, I mean business.
We begin tonight with breaking news from the United States at this moment. A passenger train -- look at the pictures -- dangling over a major highway
in the state of Washington in the Pacific Northwest. The train derailed during the morning rush hour. There are multiple fatalities, that much we
know. And we also know that 13 of the 14 cars of the train left the track. A short time ago Amtrak's co-Chief Executive, Richard Anderson, said that
the semi-anti-speeding technology was not activated on the tracks at the time of the derailment. It was the trains first public use of the tracks.
Here's the conductor's emergency call after the accident.
AMTRAK 501 CONDUCTOR: Amtrak 501, emergency, emergency. We are on the ground. We are on the bridge l-5 at (inaudible) on the freeway. We need
EMS ASAP. It looks like they are already starting to show up.
DISPATCHER: EMS to train dispatcher 501 come in.
AMTRACK 501: Amtrak 501 answering from north, over.
DISPATCHER: Hey guys, what happened?
AMTRAK 501: Uh, we were coming around the corner to take the bridge over I-5 there, right north into Nisqually and we went on the ground.
DISPATCHER: Ok -- is everybody OK?
AMTRAK 501: I'm still figuring that out. We got cars everywhere and down onto the highway.
AMTRAK 501: As soon as I know exactly where all my train is I'll let you know.
QUEST: Now, let me show you the route that train 501. It is known as the -- or is known as the Cascades route. It's way up in the Pacific Northwest
and it runs from Vancouver all the way down to Seattle, Portland Oregon and down to Eugene, Oregon.
The derailed area -- this is the route that it used to take which hugs the coastline around there, however, it derailed at DuPont, Washington. And if
you look closer at this -- we go back there, and you can see that's the derailment point. And if you actually look at the route it was taking, you
can see how it came in land more than the tradition route that the Cascades take which is further out.
Drew griffins is with me to talk about this, and the aspect, Drew, of a new route, that we'll be focusing on obviously. As we'll hear in a moment, one
assumes this had been tested, the new route, the tracks for the old trains. But that's going to be where the focus of the attention will be.
DREW GRIFFINS, CNN SENIOR TRANSPORTATION CORRESPONDENT: Yes, and how that testing? We know it was tested, Richard. It's how the testing took place?
Did they weight test it to simulate actual passengers onboard? How fast -- we do know how fast this train was running, supposedly 81 miles an hour.
Was it safe for this particular part of the track? But although this was a new route, it is not new track. This is an old line that has been
reconfigured as you said to take hump around Tacoma Washington out of the equation and try to improve the time, the trip time, basically between
Seattle and Portland. So, the government spent $180 million re-fabricating this line and making it accessible to passenger traffic train. And this
was the first day that passengers actually rode on it.
QUEST: But again, one assumes that those train had run on the refabricated track.
GRIFFINS: Absolutely. Testing was done. Testing was completed. There was concerns in local press, in Seattle, and Tacoma, about how that testing
[16:05:03] But obviously, the federal agencies, the local state agencies there thought this was safe enough to open. They cut the ribbon on Friday,
and they started the serve this morning.
QUEST: Drew, it could have of course, been an entire rabbit hole that we're going down in terms of the fact that it's a new route. We could be
looking at something completely different here, couldn't we?
GRIFFINS: Absolutely. We have no idea what caused this. Was there something on the track? Was there something wrong with the track? Did
somebody mettle with the track? Was there other factors involved that involve the operation of the train itself, of equipment malfunction in the
engine itself? We really don't know. This is all highly speculative. But it is interesting, Richard, that on the very first day passengers took this
new supposedly faster improved route, we have a train -- as you can see there -- that is off the tracks on the ground.
QUEST: Drew, when there's more to report on this, please come back to us so we can understand the nuances of what's obviously, going to be a complex
investigation. And as we talk about that Deborah Hersman is the president and the chief executive of the National Safety Council and the former head
of the NTSB. Which is the regulatory authority that will investigate accidents, not only in the air, but also on rail and obviously, on road. A
few minutes ago, she joined me from Chicago and I asked her what the investigators will be looking for.
DEBORAH HERSMAN, PRESIDENT AND CEO, NATIONAL SAFETY COUNCIL: Really, looking at this single train derailment, the investigators will want to get
on scene, look down all of the perishable evidence as quickly as possible. This was a busy highway corridor, with a lot of holiday travelers on it.
One of the things that's going to work against them is the short number of daylight hours with the sun rising late and setting early. And so, they're
going to have to document that scene and release that space as soon as possible. A lot of pressure on them to do that quickly.
HERSMAN: That's right, so the NTSB really has to hold the line and use as many of the local and national partners as they can to help accelerate that
work. Local law enforcement and first responders will do a lot of that firsthand documentation. Particularly as the first priority is rescuing
any survivors. And so there might be some damage that's done as they're extricating those individuals. But also, FBI and other assets can come in
and help to do some of that GPS documentation and make sure they've got a good picture before they start moving anything.
Deborah Hersman talking to me a short while ago.
Let's talk about the markets and how they traded. You have to bear in mind that the markets have all been boosted by hopes of the tax bill that's now
going to go to Congress, both houses during the course of the week. Green, absolutely green, lighted up like a Christmas tree. You've got records on
the Dow. You have record on the S&P 500, and a record on the Nasdaq. We haven't had a record on the Nasdaq for a few weeks. But look at this, the
Nasdaq at one point did go through 7,000 and then fell back. So, I need to just bring this up to date for you. Make a mess here, will tidy up later.
Gives you an idea of where we are, 70 on the Dow, 70 records.
[16:10:00] It's the most records ever in a single year. 62 for the S&P 500 and 72 for the Nasdaq. It shows you, the reason it was because, of course,
the tax bill, better corporate profitability in the future, lower regulation, and European stocks also were helped and no records, however.
You can see the numbers on the European stocks. The FTSE was up, Xetra DAX was the best of the today, up 1.5 percent, as was the CAC, all of them were
up. The bank stocks saw strong gains, but those are the records we have so far. Paul La Monica, guru La Monica, is with me. Paul, this was a -- I
mean for no obvious reason this was a very strong day?
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: Well, I think the obvious reason is the tax bill.
QUEST: Look, what I mean is, we knew this was coming.
LA MONICA: Right. Well, it came Friday after the market closed, we had the rally heading into that day, but of course, getting all the details
confirmed, and that the investors, of course, really love that corporate tax cut, going down from 35 percent to 21 percent is something that people
will view as potentially a very big boost to earnings going forward.
QUEST: I was talking at the exchange today, they all seem to say that this is appropriate enough, a green light for future gains. Let me make it
clear, nothing that we suggest here should be implying that you should buy or sell or anything like that, but this is giving you a view of what those
in the market, those traders on the floor, are telling us their view is this is a green light.
LA MONICA: I think it is a green light in the sense that there is nothing on the horizon that will derail the good news, per se. Obviously, the one
potential negative is valuation. There are very, very expensive stocks now that are leading the market. I mean, if you look at a company like Amazon,
for example, the devil's advocate argument would be, it's always been overvalued so how can it be a problem now? So, that could be something
people would say. But we are starting to get valuations being a little stretched. But if earnings growth justifies it, then maybe it is just
higher and higher and higher.
QUEST: And you obviously, have to think about whether those traditional rules of earnings -- I'm not saying throw the baby out with the bath water,
EPS has all changed, the old rules don't apply, the new rules. But I am saying they may need to be tweaked.
LA MONICA: I'm not so sure about that. I mean, companies -- Amazon is obviously, still a little bit of an anomaly. When you look at Apple,
Facebook, Google, Alphabet, and Microsoft, they all report real earnings on normal accounting standards. They're not necessarily trying to justify
these ridiculous valuations on metrics that are a little bit more arcane. So, I don't think we're necessarily seeing the end of earnings growth and
valuations as something that we need to be talking about for this market, it's just that it's all in context. If the growth is there, we can justify
the higher prices.
Paul La Monica.
LA MONICA: Thank you.
QUEST: Thank you.
President Trump puts America first in no uncertain terms. We'll discuss his security strategy speech that targeted China and Russia. And we'll be
in South Africa where major political change has taken place with the ANC choosing its new leader.
[16:15:00] (COMMERCIAL BREAK)
QUEST: A message from the U.S. President Donald Trump, America first remains in his heart. And he says we're in the game and we are going to
win it. It was a speech outlining a new national security strategy. The President put the U.S. Economy front and center. And to underscore this
he had tough words for two world superpowers.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We also face rival powers, Russia and China, that seek to challenge American influence, values and
wealth. We will attempt to build a great partnership with those and other countries, but in a manner, that always protects our national interests.
(END VIDEO CLIP)
QUEST: Max Baucus is a former U.S. Ambassador to China, joins me from Bozeman in Montana. Good to see you ambassador and thank you again for
joining us. The idea of the relationship between the U.S. and China, and the range of competitive values that's now relevant. What will the Chinese
make of it?
MAX BAUCUS, FORMER U.S. AMBASSADOR TO CHINA: Well, China's a very strong, proud country. And they are moving ahead, according to their strategic
vision and we Americans have to recognize that. We have to of course stand up for ourselves, our national security comes first, just like Chinese
national security comes first for them. China as the country that recognizes strength and believes in strength, I think more than anybody
else and they can smell weakness. And what this really means is we do have to stand up for our rights in our national security and our economic
security, but in a way where we work with China not against China.
QUEST: So, how do you envisage when you hear what the President said today, how does he translate this new national strategy into practice?
Because strategy is nothing if it's not followed through with execution.
BAUCUS: Well, we'll see. We have heard a lot of words today. Actions always speak louder than words. We do need to stand up in my judgment a
little bit more than we have in the past. I think that China tends to take advantage of all western countries when it comes to trade. After all they
know how to divide and conquer, not just countries but also companies. But the trick here is to figure out how we stand up in a way that makes sense
that does not cause a trade war. We have tools, but they're limited. But we have to do what we can, but working with China. But standing up for our
rights. You know, we're in this together.
QUEST: Do you see what the President said today vis-a-vis China, as a sizable shift in policy?
BAUCUS: No question. It's a major shift. And frankly, it's a shift that I think is used properly is somewhat in the right direction. I'm concerned
that he's that he's going a little too far. I'm concerned that he comes across as a little too belligerent, a little too tough. Verging on may be
a trade war, if not a military war. I think that's dangerous. China will see that. China will calibrate that. China will move ahead in its own
way, but China is also a bit of a bully. If we do stand up, as with most bullies, they tend to back off a little bit. We have no choice. We've got
to stand up for ourselves in a right way and in a very considerate way. We also have to come across as very strong, strong in every sense of the term,
not just militarily, but economically. We have to be strong on our consistencies, sticking with our rights. We're being put to the test now.
QUEST: Do you see any contradiction between this new policy, this major shift as you put it, on commercial grounds, trade and the like, and the
need that the U.S. has to have China on board over North Korea?
BAUCUS: Well, I think they're frankly separate. On the economic side, we got to stand up for our workers, our companies who have been taken
advantage of in China. We also have to protect our national security with respect to North Korea. I think they're separate. If we start staying to
China, oh, well, you take care of North Korea and we'll back off on our trade concerns, that would be a big mistake. Because they're both very
important, but there separate.
[16:20:00] QUEST: And finally, in China -- I heard what you said about how they will respect a strong leader, how they will respect a firm position.
But do you see what President Trump has announced as being that, more than say just bellicosity?
BAUCUS: Well, I'll wait to see what President Trump does. If he retaliates without consulting with China, China itself will retaliate back,
actions against certain American countries. They're not going to just stand still. They'll keep working in a way that protects their interests.
But what have to understand is that however, this is tricky. This is very, very complicated. It's very profound in a sense that Trump and America
have to work out some kind of understanding with each other. We're separate countries. We do not want a trade war. And we're on the verge of
entering into one.
QUEST: Ambassador, good to see you. I appreciate it, sir, thank you.
South Africa's ruling party has name the countries deputy president, Cyril Ramaphosa, as its new leader. It Anza fierce battle to fill the shoes of
President Zuma. He spent a decade at the helm of the ANC. Now the party conference in Johannesburg had them dancing and singing. Mr. Ramaphosa is
now in a prime position to become the future president when Jacob Zuma stands down in 2019. The results had driven the rand nearly 3 percent
higher against the U.S. dollar. You see the numbers on the screen. David McKenzie, our correspondent is in Johannesburg. Does this effectively dot
the I's and cross the T's to make Cyril Ramaphosa the next president of South Africa?
DAVID MCKENZIE, CNN CORRESPONDENT: Well, Richard, the precedent within South Africa since the democratic transition would definitely suggest that.
Because the ANC has traditionally been in such a dominant position politically. If the guy comes in and is now the head of the party, he will
become the head of the country in the next election. The question really is for me, will Jacob Zuma the embattled national President step down or
get pushed out before his term ends in 2019 -- Richard?
QUEST: What's the prevailing view in South Africa, because I think that there is a -- from my visits there -- there is a view that Jacob Zuma has
heaped ridicule, sometimes contempt upon the office that he holds?
MCKENZIE: He faces so many allegations of corruption and so many court cases. So, the general sense you get from people on the street, from
business leaders, from investors overseas is that they're pretty happy to see the back of Jacob Zuma, I think as the leader of the ANC and then
eventually as leader of the country. So, there was a collective sigh of relief from many. Those who would disagree are those who would have been
supporting the other candidate who wanted to push more of a radical economic transformation. But there is a sense that the markets were even
pricing this in and they got what they wanted. The key will be will Ramaphosa have the kind of political power within his own party, Richard,
to push through reforms and to get tough on corruption?
QUEST: All right, but are we in danger of facing -- or is Africa in danger of facing a situation, maybe not as bad, but similar as Zimbabwe. In the
sense that the person who's taking over, has sat at the table during the recent or at least been around and part of the infrastructure during the
bad years. He's seen what's gone on.
MCKENZIE: Well, that's a very good point. And you had this moment that Zuma was making his introductory speech and right at his right side behind
him sitting there taking notes, was not the head of the AMC, Cyril Ramaphosa. He has somewhat politically managed to keep distance between
himself and Jacob Zuma. He does have his own track record and he has spoken out directly on the issues of corruption. But he has been part of
this administration, and either he willfully kept his eyes averted from what's going on or didn't want to say too much of it publicly until he held
the reins. So again, what he does next I think is critical. He will be tainted by his association with Jacob Zuma, but he does have his -- the
sense within the country at least, that he's his own man. And those who support him think he could bring his trade negotiation skills as a former
union boss, his skills at business, and just seen as a tough manager to bear potentially on this country.
QUEST: David McKenzie in Johannesburg. David, thank you.
[16:25:00] To Israel now, where new strikes have been called. There's plans by one of the country's biggest companies to lay off a quarter of its
work farce. Teva pharmaceuticals plans to cut 14,000 jobs worldwide, and including 1,700 of those jobs in Israel. Where it will close a
manufacturing site. The matter is so serious that Israel's Prime Minister, Benjamin Netanyahu, is preparing to meet with Teva's chief executive this
week. Think about it, Teva accounts for between 1 to 3 percent of Israel's GDP. On Sunday, workers briefly brought Ben Gurion Airport to halt. There
the striking staff came out in support of Teva.
Oren Liebermann is in Jerusalem for us tonight. I can understand the strike over a large number of job losses, why is Teva having to cut back?
OREN LIEBERMANN, CNN CORRESPONDENT: This is a consequence of months if not years of bad management, bad purchases and a company that relied one cash
cow. Going back to earlier this year, Teva purchase in $40 billion an Irish generic drug manufacturer, that didn't pan out. A much smaller
purchase a couple of months later of a Mexican generic drug manufacturer, bad didn't pan out either. And Teva relied essentially on one drug,
Copaxone, which other companies were making inroads on with generic drugs.
All of that created this perfect storm which caused Teva to have a dramatically horrible year, losing 50 percent of its stock price. That put
it in the situation it is in the today. The CEO resigned earlier this year. A new CEO came in in September and basically said, look, if you want
to keep the company, we're dealing with a pretty drastic financial situation and he's talking about the major cuts and closing of facilities.
QUEST: What can Benjamin Netanyahu do? I mean, if this is a commercial decision -- of course, a government can get involved by making guarantees
and promises, but that's unwise, if the business is flawed.
LIEBERMANN: One of the big questions and you're exactly right, is what will Netanyahu do? And let me give you a better sense of how important
Teva is to Israel. You've talked about its GDP, but beyond that its stock was called the stock of the people. And that's how important it is to this
country. Netanyahu and the Israeli government have given huge tax breaks to Teva, including a decade where they didn't pay any income tax to the
savings of $6 billion over that time. So, there is this public sense that Teva owes it to the country to keep the jobs here.
But Netanyahu also realizes the financial situation the company is in. But what he could do is try to put some sort of pressure on Teva to at least
keep the cuts and the closing of facilities outside of Israel. Close a plant in Ireland, that idea has been floated. Keep the cuts outside of
Israel, that would go over very well here. The question is does Netanyahu even have the leverage to do that? Is Teva in enough of a financial
situation where it can absorb a cut like that and keep them outside of here? That is what's unclear right now.
QUEST: And related to what you've just been saying, is Teva still regarded as a darling of Israel? In the sense that when it started -- it was
amongst the largest generic drug manufacturers worldwide. And therefore, it had a certain gotcha about it in Israel, didn't it? It was respected.
It had come in -- it was a startup that had taken on the global pharma industry.
LIEBERMANN: And it still carries that sort of legacy cachet, because of what it did and how it started. Here's a relatively small company and
became one of the world's largest generic drug manufacturers. And it still has that, it still has that sense to it. And yet because of that perhaps,
Israel feels that Teva owes it something in return, owes it to keep those jobs here. Keep it where it started instead of making those cuts here, and
that puts additional pressure, not just political pressure, but public pressure to do something to keep the jobs here. The new CEO who just came
in at September, though dealing with a very tough situation for Teva, trying to find his way out of this mess.
QUEST: Oren, thank you. Oren in Jerusalem for us tonight, appreciate it.
Now the power outage that quite literally rippled around the world. The lights may be back on at Hartsfield Airport in Atlanta, but the headaches
are far from over. And all this as the holiday travel period gets underway.
[16:30:25] QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. When we'll be live at the world's busiest
airport as it tries to get back on its feet from a power cut. And I'll be joined by the chief executive of IMAX after the biggest box office weekend
of the year. As we continue tonight this is CNN and on this network the facts always come first.
The head of Amtrak in the United States has positive train control was not activated when a train derailed on Monday morning, south of Seattle,
killing several people. The technology is meant to automatically slow and stop a train if it senses dangers. Up to 77 people were taken to
South Africa's new President Cyril Ramaphosa is the new leader of the African National Congress. The party delegates elected him on Monday. He
is replacing the embattled President Jacob Zuma, who is facing corruption and fraud allegations. Ramaphosa is likely to become the country's next
president when Mr. Zuma leaves office in 2019.
President Donald Trump says that America is coming back strong, in a speech laying out his national security strategy she blasted the actions of
previous administrations. Insert Americans voted for a new era of U.S. foreign engagement. He also called Russia and China rival powers the
challenge U.S. influence.
And the European commission is investigating IKEA's tax affairs in the Netherlands. Is concerned that two tax rulings have given IKEA an
advantage over competitors by allowing it to pay less tax. IKEA denies any wrongdoing.
The President of the American Sports Network ESPN has resigned citing a substance addiction problem. In his statement John Skipper says he feels
embarrassed and that he let people down. He says the most important thing that he can now do is take care of this problem. His resignation takes
Trump says the derailment in the pacific northwest shows the importance of spending money at home not overseas. President Trump says $ 7 trillion
spent in the Middle East while our roads, bridges and tunnels and railways and more crumble, not for long. We're talking about Amtrak. Amtrak's
government funds were cut in 2015 after a dispute in congress. Mr. Trump's budget calls for further cuts to Amtrak's federal subsidies and a 13
Take a look, this is the Amtrak network, you have some of the very famous routes, like the California Zephyr, which runs down from Chicago down to
San Francisco and comes right across the country in that way. You have the one that goes from New York down to Miami, the Silver Meteor, which is very
well known, and you have the New Orleans, which obviously goes Chicago.
And perhaps the biggest part of the network, the most, if you like, widely used is the Corridor, from Boston to New York, down to Baltimore and
Washington, D.C. Amtrak is in the middle of a leadership transition, Richard Anderson, seen on the left, by the way the former CEO of Delta
Airlines for many years is taking over as chief executive in January after the co-CEO Wick Moormon announced last Thursday that he is stepping down.
So, two cos at the moment, but he takes over in the new year. Earlier we heard from president and chief executive of the National Safety Council,
also the former head of the NTSB. Deborah Hersman told me there is massive opportunity to find passenger rail in the United States.
DEBORAH HERSMAN, PRESIDENT AND CEO, NATIONAL SAFETY COUNCIL: I would absolutely say there is a huge opportunity in the United States to invest
more in our infrastructure. If we want to have world class transportation, and multiple options for people, particularly between large city pairs, we
have to invest more in the infrastructure.
[16:35:00] QUEST: And does that mean, as it relates to Amtrak, it's very well-known globally, it has an exoticness of these trains with the horns,
going across the Midwest. But does Amtrak have a good safety record in your opinion?
HERSMAN: Amtrak does have a good safety record, one of the things that you want to look at, though, is the number of trips that they're taking each
and every day. They own infrastructure in the northeast corridor, so that is a heavily traveled corridor and it's also a legacy system, so it has
been around for a long time, when you look at those tunnels that go under the Hudson River, they've been there for almost 100 years. So, there is
certainly an opportunity to invest in the infrastructure particularly infrastructure that has tremendous usage and it is in places that have
great potential economy.
QUEST: But if we take a look at this particular case here. The trains were owned by the two states that -- between which they were traveling, the
track was owned by somebody else, and Amtrak was running the service between the two places. It is a bit of a hodgepodge isn't it?
HERSMAN: It is. There's a lot of different ownership schemes and operating establishment across the United States. So, it is a patch work
system across the nation, many states operate their own service and here you see Washington and Oregon jointly working together to operate this
passenger service. It would be great to have a national footprint and an investment in rail along the lines of what we do on the highway side.
QUEST: Deborah Hersman on the real crash on the pacific crest. In the south of the United States, it was the power outage at the world's busiest
airport that had everybody talking. And that's Atlanta, the day began with long lines at Atlanta's Hartsfield Airport flights are now starting to
return to normal. Thousands of passengers around the world are trying to rearrange their travel plans.
Officials say an electrical fire was to blame, they do not know how it began, it damaged the backup systems that should have kept the lights on.
Employees found themselves facing stranded passengers with no information to give them.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Once we have power, you will know what because the monitors will start working, until the monitors start working, we don't
have any computers, until we have our monitors, we can't answer any questions because we don't know anything.
(END VIDEO CLIP)
QUEST: Atlanta airport is a critical node in the global air traffic. Delta serves 200 cities from Atlanta, air traffic in and out was shut down.
This is what it was like last week at 4:00 p.m. in the afternoon. 270,000 passengers a day going in and out, that was last Saturday or Sunday last
Now let's look at yesterday, Sunday, you get an idea. Over 1,100 flights were cancelled. And because the traffic wasn't going here, much else in
this part of the world, it's a quirk of the Atlanta system and the Delta system that, it hubs more of its passengers to its main headquarters hub
than do the other airlines, United and American.
And this morning things started to get back to normal. But this was all traffic that was going to Atlanta, so this is Atlanta based traffic, so
obviously not, you get an idea, just how desperate the situation becomes. Security checkpoints re-opened back up at 3:00 this morning. 400
cancellations today. Schedules are supposed to be back to normal this afternoon. Martin Savidge is at the airport, are things back to normal?
MARTIN SAVIDGE, CNN CORRESPONDENT: Normal, I would say no, functioning, fully functional, the airport appears to be at least 90 percent if not 100
percent. There have been a few electrical hiccups we have been told of, but otherwise it is working here, and that is of course that was not
happening 24 hours ago.
Look at the lines, well, they're gone. There is clearly another good indication not necessarily normalcy, because there could be a lot of people
that just cancelled their flights or are aren't here because their flights are not leaving. But the other thing that looks good is the on-time
departure in the lease for Delta the major carrier out of here, on-time departures have been on the rise throughout the day.
So, all that is a positive trend. But again, it's not necessarily normalcy, you have that backlog of those passengers that didn't travel
yesterday mixed in with people who are already scheduled for today, and its peak holiday travel time, so many of the planes are already very, very
crowded. So, try to find room. It is a logistics nightmare.
[16:40:00] The biggest signs you will find right now or in baggage claim were all those people that didn't go anywhere, trying to find a bag to
could be almost anywhere.
QUEST: Martin, how does this happen, a fire, understandable, regrettable? But unless it's a massive conflagration that's going to require the
evacuation of the terminal, it shouldn't take down every system.
SAVIDGE: Correct. Course. Number one. The city is saying that this fire happened to occur at a critical point in which it took out not only the
main power line but also the backup power line, it's not a good idea by any expert's opinion to have two main power lines that are so close together
that it takes them both out. That's not a backup system.
However, the airport has come out and said that has worked well for 40 years, we have not had a problem. It still requires some sort of review,
if you are going to boast that you're the largest airport in the world, you have to live up to that reputation and for 11 hours yesterday, it did not
and it's going to raise some very important questions.
QUEST: Martin Mark Savidge, thank you.
Now bit coin is getting some help from the future as the virtual currency starts trading on the world's largest futures exchange.
QUEST: Bitcoin prices fell after the virtual currency makes its futures debut, one of the world's biggest exchanges, found itself within 2 percent
of climbing within touching distance of $20,000 for the first time. Bart Chilton is the former commissioner of the U.S. Commodity Futures Trading
Commission, the CFTC, joins me from Arkansas. This is the bitcoin phenomenon; the conundrum gets ever more weird and wonderful. What do you
make of it?
BART CHILTON, FORMER COMMISSIONER OF THE U.S. COMMODITY FUTURES TRADING COMMISSION: Hi, Richard, well, it is weird, but I think it's becoming more
wonderful because as a former regulator, more regulation is good, to a certain extent, of course, nothing that would thwart innovation, I don't
think that's what we have. We saw with the Chicago Board Options Exchange, CBOE, last week, there is some reduction in volatility, but CBOE is a small
player compared to what you say, CME group, which is the largest, most liquid exchange in world. When they started trading, they didn't have the
little fits and starts that CBO had last Monday. None of these circuit breakers that tripped. I am positive on the whole thing.
[16:45:00] QUEST: Why should the futures market make it better to trade or for bitcoin as a currency. Normally options and futures although they can
often give transparency, did you increase volatility.
CHILTON: It depends on how many people are in the market, as you know, if there's deep liquidity, and CME certainly has deep liquidity in almost all
of their contracts, you should not see that volatility, it doesn't mean it won't occur. We see anomalies all the time. Here's why I think it's
better, Richard, one, right now, the bitcoins are traded off the exchange, in the dark, and we're sort of trusting these exchanges that are out there
right now are doing good work and perhaps they are.
But we have no idea who's in these markets, is it institutional investors, is it average individuals, are there pension funds in their investing
people's pension? You know, what is it comprised of and more importantly, are there any side boards, there's no rules currently against manipulation,
in the futures industry, there are, they can stop manipulation, fraud, abuse, there will be transparency, we'll know who's in there, and if we see
bad actors in the futures and all the derivatives, the futures and the options, my old agency can go after them. And I know for sure they will.
QUEST: Does it bother you that the big discrepancy between bitcoin and all the others ask that there's no underlying asset? For example, in a
currency, you've got a government, in a company, share price on a futures market, you have the company, a, the chief executive, the board of
directors, there is nobody that the CME can turn to and say ah you are CEO of bitcoin.
CHILTON: It does bother me that there's no there, there. And we have seen in the last month or six weeks, that these digital wallets, which is where
people hold some of the underlying bitcoin, not the futures and the options. And it is just gone poof, your money is gone, tens of millions of
dollars. So, I am concerned about that, and I have been talking for a long time about how I think the longer-term future of digital currency is
probably going to be based upon something. Richard, for the exact reason by the way that you said. To me, I would want something that is real,
something that I can touch and feel, then of course something that has at least a modicum of regulation associated with it to protect investors. So,
Yes, I agree.
QUEST: Good to see you, sir, thank you.
Now one point to note this week or next week will be showing you how we bought a bitcoin. It is not as easy as it looks. You can also subscribe
really QUEST MEANS BUSINESS podcast, all of the usual providers, or you can listen at cnn.com/podcast.
[16:50:00] (COMMERCIAL BREAK)
QUEST: The force is strong with that one. That one of course is Star Wars "The Last Jedi." We had our box office opening in North America, second
only to its predecessor.
Disney says the movie brought in an estimated $220 million on its first weekend. Only
"The Force Awakens" opened with a better result of $30 million so we're talking very large numbers here. Chief executive of IMAX Richard Gelfond
joins me now in the C suite. Good to see you.
RICHARD GELFOND, CEO, IMAX: Good to see you, Richard.
QUEST: This was extraordinary.
GELFOND: We had high expectations. I think going in, most people thought it would do 70 percent or something like that of the last one. But it beat
that, it was a combination of the reviews, the rotten tomato scores, it had an a-cinema score this weekend coming out of the theaters. I think people
were surprised was a really good movie.
QUEST: And in terms of IMAX and for yourselves with these movies.
GELFOND: We did about $41 million in something like 750 theaters, which it opens in China in January, it opened everywhere in the world except for
China, and it's sold out next weekend in a lot of places. It's an extraordinary franchise, Disney is to be commended, his blessing to buy the
franchise, it is another thing to make really good will be side of it. And Kathy Kennedy and the Disney team are amazing.
QUEST: What do you make of the Disney Fox deal? The President says it should be good for jobs. Most analysts seem to suggest that it's actually
not a vertical integration, it was a horizontal integration with vertical overtones. What do you think?
GELFOND: I think it was a great move by Iger, I think if you look at the big battles going on between Silicon Valley and Hollywood, Silicon Valley
was way ahead, and the reason is they have free money, they don't have to manage for P&L, Hollywood has to manage for P&L. And I think Iger stepped
back, he announced he was doing streaming, that he faced the question, how do I get there? And it is either get bigger or get out.
On the other hand, I think what Murdock did, he tried to get bigger with Time-Warner several years ago, and when they rebuffed him, I think he had
also the right answer, which was get out because he couldn't get bigger.
QUEST: which throws the whole -- that's the whole industry into play, doesn't it?
GELFOND: It really does.
QUEST: Who should we be watching?
GELFOND: I think there will be a reaction to it, I think it will be interesting to see what Netflix does, some of the other big standalone
entertainment companies, Viacom, CBS, Paramount, which is owned by Viacom obviously, so I think how the chess pieces fall will be very interesting.
QUEST: Is this what everybody is talking about in the industry at the moment?
GELFOND: They are, everyone is. So, this weekend I was with a lot of entertainment people and that's all everybody talked about, is it good, is
it bad, why did Rupert do it, what about the sons? Now that is the buzz.
QUEST: you have got more buzz of your own, Saudi Arabia. Now we have talked about Saudi Arabia on this program quite a lot, but the decision to
reopen movie theaters, you have one IMAX already in the country, which is not in general release, it's for specific purposes?
GELFOND: We have the only theater opened in Saudi Arabia, and it is in a science museum there. So, it is showing mostly documentaries. And we have
heard rumblings of this for about a year what was going on in Saudi Arabia.
And we have started to talk to a number of exhibitors some in the middle east and some in America, and as a matter of fact, we can't disclose it
yet, but we signed a four-theater deal in Saudi Arabia and we'll be talking about it next week sometime. But there is a lot of discussion going, it is
somewhat surprising, but it's not going change the movie world, but in fact, they could have 2,000 screens open in Saudi Arabia in the next few
years, and this is going to happen fast, Richard, you're going to see these things opening in March, April of this year. '18.
QUEST: '18, We had the head of AMC theaters who's also looking to be there. One assumes everybody is going to look to be there because in
mature markets this is a brand-new bonanza.
GELFOND: I think not everybody, I think a lot of people will. But you have to know the region. It is still a business, right. So, if you are an
operator in the Middle East, you need to know how to program the theater. You know the audience. You know the sensitivities.
It think it will be limited also in terms of who knows the real estate and who has access.
I happen to know AMC is going to partner with some local companies, so they're in a good position to do it. The middle east earn companies are.
But for other people it will be like any new market, it will look at the gold rush, but some fools will get burned.
QUEST: Be like bitcoin?
GELFOND: I'm not commenting on that.
QUEST: Good to see you as always, thank you very much.
We will take a Profitable Moment after the break.
[16:55:00] (COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment. The QUEST MEANS BUSINESS trading post tells its own story. Record highs on the Dow, the S&P, even on the Nasdaq. And when you look over here, you see the Dow 70 records this year. year.
That is an all-time record. We're now getting records upon records about records and you have the S&P and you have the Nasdaq. Wherever we look in
the U.S. Markets, we are seeing records. You may well ask, what is the reason for all of this?
And of course, it's because of the tax, the tax plan is moving forward, and very likely this week will be passed by both houses of congress, which
allows President Trump to sign it into law for that great big Christmas present he's been talking about. But there's more than just tax driving
this market, you've also got the ability of the companies to repatriate the profits, you've got good corporate earnings, as you'll see when we do the
earnings showcase in the first quarter. There are solid reasons to believe this market's games are valid and will hold. That doesn't mean to say
there could not be a correction. But the prevailing view is that this market still has some legs.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York, whatever you're up to in the hours ahead, I hope it's profitable.