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QUEST MEANS BUSINESS
Dow Hits 25,000 for First Time; Trump Lawyers Try to Block Bombshell Book; Intel Shares Hit by Chip Security Scare; Mark Zuckerberg Reveals Goals for 2018; Qatari Jewels Stolen from Venice Exhibition. Aired 4-5p ET
Aired January 4, 2018 - 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 Industrial at a record. Nasdaq at a record. S&P 500 at a
record. Second day of the trading day -- don't applaud. My word. That's a far brisk, robust way. We've got records across the board. We're going
to really get into this tonight. This is Thursday, it's the 4th of January.
Tonight, the Dow is making history at a record pace. The global market rally, the FTSE also at a record high. We'll talk about that. Cease and
desist. Donald Trump's lawyers are howling over Michael Wolff's new book. And the chips are down for Intel, where the stock fell sharply. A huge
security fraud is revealed in almost every computer in the world. I'm Richard Quest, live from the snowy world's financial capital, New York
City, where the snow is still falling. But, of course, with records, where I mean business.
Good evening. The markets have just closed, and the bulls are picking up the pace and passing major milestones. It may be a snowy day in New York,
but the Dow Industrials rose very fast and stayed. A sharp fall in Intel couldn't stop the gains. It passed the 25,000-mark seconds after the
opening bell in New York. Records are falling faster and faster. Let's look at this in some detail.
It took the Dow 76 years to reach 1,000. The "New York Times" said that was compared to beating the four-minute mile. But the curve has become
steeper since. Investors are responding to solid economic fundamentals, corporate earnings, and the Trump agenda. We'll dissect each one of those
during the course of this hour.
Think about this. The Dow hit 20,000 five days after Donald Trump's inauguration. By the summer, it had reached 22,000, and political turmoil
was in its wake. It ended the year 24,000, and that was on the back of tax reform. And now just four weeks after that last one, 25,000. It is the
fastest 1,000-point gain in history. New records mean that we must update the trading post. Join me a we look at the markets, and I show you exactly
Bear in mind, January the 4th, and we're already making some major changes. So, the Dow has had two records. The S&P three. The Nasdaq also has had
three. This is the Dow's best performance since November. And all of the markets are up for every day of trading day of this year. So please, green
lights. And not only green lights for the New York market, but in London, as well, the FTSE, which hit a record high, as well. We'll keep track of
that throughout the course of the year.
Looking at the fear and greed index, do not be surprised that as things move, as the markets go higher, so volatility is at record lows and the
fear and greed index continues to rise. Let's talk about this with Teddy Weisberg, who is with me. Good to see you. 25,000.
TED WEISBERG, PRESIDENT, SEAPORT SECURITIES: Happy new year.
QUEST: Happy new year. We know that 25,000 is a gain of 4.2 percent over the 24,000. But we've looked at this today, and the speed of gains is
increasing, even though the percentage is actually getting lower.
WEISBERG: Yes. And it is pause for some concern, because we keep talking about the fact that trees don't grow to the sky. But clearly the momentum
is absolutely on the up side. And a rising tide is not floating all ships, but it is sure floating a lot of ships.
QUEST: Today two of the biggest gainers, IBM and --
QUEST: And GE.
WEISBERG: You've got to love it, right?
QUEST: Now, they were the dogs of the Dow from last year, two of the worst performing. Is this because, you know, the dogs of the Dow theory say, you
invest in the worst and at least you get a good dividend yield, and they can't -- perform better?
WEISBERG: I guess with the benefit of three days of 20/20 hindsight, you have to say yes.
[16:05:03] Though the rally -- IBM traded at 140 much earlier in 2017. And its sort of been a rally since it traded at that point. So, its momentum
clearly started well into last year. GE, on the other hand, which I hesitate to talk about, because it's a stock that we have suffered with
like a lot of other folks all through '17 but that we bought quite heavily the last two or three days by design. We waited until the very end of the
year, apropos of the Dow theory, dogs of the theory, to add to our GE positions and initiate new positions on the theory that stock was down 45
percent last year and perhaps the worst was well-priced in. It's much too soon to tell. But clearly, it's off to a great start.
QUEST: Right. Because GE has to do a fundamental restructuring of the company.
QUEST: IBM is really tinkering with the cloud to make sure they get it right. On this overall thing -- look, again, we looked at the numbers. If
you go back, it seems to have taken an average of about 50 to 60 days to do 1,000 points. In the last three or four years. Now that's down to 42, 43
days. But, of course, 1,000 points isn't what it used to be.
WEISBERG: Well, you know, we can get into the weeds, though, with this, unfortunately. Clearly, the markets actually acted reasonably decent all
throughout the Obama administration, from the trading lows of march of '09. But the fuel really was thrown on the fire after the election results.
Now, we understand it's controversial, at the least, and there's a lot of unhappy people. But the market is a forward-looking indicator, not a
lagging indicator. And the market has been telling us, since he got elected, and it continues to tell us that the economy is going to improve,
and it's going to improve a lot better than a lot of folks think.
QUEST: Let's have a listen to how the president celebrated this. He did obviously celebrate with a tweet promising major cuts. But his former
communications director, Anthony Scaramucci, told CNN the president is just getting started. Have a listen.
(BEGIN VIDEO CLIP)
ANTHONY SCARAMUCCI, FORMER WHITE HOUSE COMMUNICATIONS DIRECTOR: There's a lot of legs to his agenda. He's got to work on the health care plan. He's
got to work on DACA. You've got to give the administration a little bit of credit for the following. They have set a pro-growth, pro-business agenda
that is now filtrating through the economy. Wages -- I study wages. I am trained as an economist. Wages have blown in the United States from 2006.
They're down 11 percent in real economic terms.
Since he became president -- let's not give him credit for the first quarter -- but the last two quarters, they have been staggering wage growth
on his watch. That's because he's a pro-business person. People were reserving cash, reserving capital, under the Obama watch, because he was
anti-business. Now president Obama will say I wasn't anti-business, but you know what, sir, that was your perception. The president's perception
is that he's pro-growth. he's pro the economy, he's pro --
CHRIS CUOMO, CNN HOST: And numbers will tell the story. The numbers will tell the stories and be reflected at the polls.
SCARAMUCCI: And hey, pal, if you're not a team player, get off the field.
(END VIDEO CLIP)
QUEST: So, what does the market want next from this administration?
WEISBERG: Well, I'm not sure what it wants next, because I think right now it almost has a Goldilocks environment. And so, we don't want to be too
greedy, because the markets have certainly rewarded those people that are long stocks for the last 13, 14 months. And every indication is that that
will continue as long as the market improves, and we don't have some dramatic change with interest rates or something from the Fed.
QUEST: Thank you for always talking -- thank you for braving the snow. How difficult was it to get up here?
WEISBERG: The subways work.
QUEST: The subways work. I got to work on the subway, and I'll be going home on the subway. Good to see you, Ted. Thank you very much indeed.
Stocks around the world also showing the benefits. Look at this. The big screen tells the story. The Dow, you've obviously got the U.S. markets.
Look at the European bosses. The euro bosses, the FTSE we've already told you about, record high. Xetra DAX 1.5. But the best gains were in Paris,
and we can expect overnight even more gains, probably, in Asia. The Nikkei in Tokyo put on 3 percent. Shanghai is lagging a bit, because obviously,
issues in China itself. But you get an idea of how the fundamentals, the economic fundamentals, are in the United States are -- if you like, moving
across the globe.
According to the ADP job numbers smashed expectations. 250,000 private sector jobs were created in the United States. The eurozone is seeing the
best economic growth in seven years. Manufacturing services both seeing growth accelerated, and also, by the way, with the eurozone, you're going
to start seeing the ECB retrenching, or at least deciding how to start pulling back on their positive easing.
[16:10:00] And then to China, second-largest economy in the world. The services sector showed the fastest pace since 2014, and business growth has
quickened to a one-year high in December. Is this the Goldilocks scenario? Diane Swonk is the founder of DS Economics. Happy new year. We spoke at
the end of last year. And now we have to factor in what we are seeing, which is somewhat of an extraordinary start to the year.
DIANE SWONK, FOUNDER, DS ECONOMICS: It is an extraordinary start to the year. The good news is the U.S. economy is on solid footing, and the
expansion continues. We're 102 months old now on this expansion, the third longest of the post-World War II period. That's great. We want to embrace
it. However, take some issue, no, wages, aren't accelerating like we would like to see. The stock market is not the economy and that's important to
delineate. The euphoria we're seeing, and complacency within the market and lack of volatility, is very reminiscent, in fact, even over what we saw
during the tech bubble in the latter part of the 1990s and early 2000s. That's when we had those help wanted pulse required kind of help wanted
signs out there. We're nowhere near that in the economy today.
QUEST: All right. But you say -- you've drawn the parallel, if you like, from those days. But the difference here is, these are companies -- the
stock market may not be the U.S. economy, but it's a large part of it. To some extent. And to the extent that the companies are making good money,
paying dividends, raising wages, low unemployment, low inflation, it's difficult to see the fly in the ointment.
SWONK: I absolutely agree. It's great news. The wages aren't growing as rapidly as they were insinuating. In fact, tomorrow I think we'll see 2.5
percent average hourly earnings over a year ago. That's a sharp deceleration from the latter part of last year. So, the comparisons are
hard, because we had a nice acceleration in wages, and I do believe wages are going to reaccelerate this year as we crash through that 4 percent
threshold on unemployment. That's good news. But this is an economy that the stock market says it's better than it was in 1999 and 2000. We are
nowhere near that kind of economy at this point in time. So, there is a disconnect. And there is a euphoria.
QUEST: What do you mean by that? Because when you say the economy is not what it was then, explain that.
SWONK: Well, I think the biggest issue is, we know we've got 4.1 percent unemployment rate, the lowest in 17 years. But with a lower participation
rate among prime age workers. So, you don't have as many people throwing their hat in the ring or even on the dance floor participating in the labor
market, as you did back at the peak of labor force participation back in 1999 and 2000. So, you had an economy where the overall averages
encompass, and hit a lot more people. They were reflective of a lot more individuals' economic well-being, rather than just an uneven distribution
of well-being, which is what we're seeing today. And certainly, it's great to have great dividends. I love that. I get dividends. Not -- we still
have fewer people in the stock market today than we did prior to the crisis in 2007.
QUEST: Would it -- I mean, I can't remember the exact number now of how many years it's been since we've had a correction, 10 percent correction in
the market. To some extent, one almost hopes we get it, if only to create -- to put concrete into the foundations, rather than an ever-rising
SWONK: You know, I agree, although my husband is always saying, I want a correction, so I can buy in. And I'm always saying, be careful what you
wish for, because we don't usually get an orderly correction. We usually get a disorderly correction. I would rather we move sideways and catch up.
That said, I think there is an issue about the euphoria you're seeing, the individual investors. I've got my hairdresser, I've got waiters telling
me. I'm waiting for the cab drivers to tell me what they're buying now. These sort of individual investors that feel they can't sell, they have to
That's something that is one of those warning signs, one of those stupid red flags that economists watch, of complacency without being able to price
in the real risk that we could have a government shutdown. The real issue about lifting the debt ceiling by March and April. And the real
geopolitical risks associated with NAFTA, protectionism, we're talking about actual tariffs on China. All these things would disrupt business and
profits right here at home, as well. Pretty dramatically, in fact.
QUEST: We know that thankfully you'll be with us throughout the course of the year to help us understand the undercurrents. Thank you as always.
Happy new year. Thank you.
SWONK: Happy new year.
QUEST: The U.S. president has threatened legal action to suppress the top- selling book on Amazon. Some critics are calling it censorship, others saying it's a marketing gift. Think about it. The book has gone from 400
and something on the best-selling list, to number one on Amazon. It's QUEST MEANS BUSINESS live from New York.
[16:15:00] (COMMERCIAL BREAK)
QUEST: Michael Wolff's hugely controversial book on the Trump presidency is now going on sale Friday. That's just in what, eight, nine hours from
now. It's going on four days early. The publisher says it's being brought forward from Tuesday because of massive interest in "Fire and Fury: Inside
Donald Trump's White House." An avalanche of advance orders has made the book the number one best-seller on Amazon. In the interest of disclosure,
I went online and bought it from Amazon this morning. And I'm not expecting to get it until next week. Lawyers for President Trump are
threatening legal action in a bid to prevent publication. The author and publisher, Henry Alt, have received a cease and desist letter. Brian
Stelter is here with me. You can't blame the publishers, can you?
BRIAN STELTER, CNNMONEY SENIOR MEDIA CORRESPONDENT: It's what --
QUEST: Ride the horse, baby!
STELTER: It's what I would do if I were the publisher, absolutely. Although yesterday they told me this wasn't possible. They said there was
no way to move up the release date. I suppose now they found a way, Richard, in the past few minutes, they say it will go on sale 9:00 a.m.
Eastern time Friday. Why is that specific? Because Wolff starts his TV book tour at 7 a.m. So, this could not be going better for the publisher.
It could not be going worse for President Trump.
QUEST: What's behind the -- fir of all, the statement yesterday?
QUEST: Then the cease and desist. Then the threatening of legal action, which has almost no hope of success in a country that has the first
amendment at its core.
STELTER: Right. The strategy could be to please President Trump. Meaning, he's ticked off, he wants to see this book go away. he calls up
his lawyer in a fury. he says, do something. So, the lawyer did something. The lawyer sent off a pretty standard cease and desist letter
and now he can say, OK, boss, I went ahead. I told them not to publish the book. There's not much more they could do. I did reach out to Charles
Harder, who is the attorney representing Donald Trump in this matter. I asked him, do you have any new comment. Now the publishers moved up the
book by four days. He hasn't responded. But it is telling that instead of the publisher responding to the cease and desist letter, instead of, you
know, going ahead and retracting the book, they have done the opposite. They have moved it up.
QUEST: We're a business program with a wide agenda. Any PR exec would say, do not put oxygen to this flame.
QUEST: And what the president has done is taken a story that -- Yes, all right, the book would have stayed at number one. But it would have
dwindled. The story would have dwindled down in the next two or three days, and he's ratcheted it up.
STELTER: It really is more fuel for -- forgive me, the "Fire and Fury" book. It is more fuel for the book by sending a cease and desist letter
first to Steve Bannon and then the publisher and author. It created a national story, helped make it international. President Trump has a
history of doing this, ordering cease and desist letters to be sent. He threatens lawsuits from time to time before becoming president and did not
follow through. Remember he claimed to sue the "New York Times" last year and didn't do it. The difference now is, he's actually in office. He's
actually the president.
[16:20:00] So, to see the president, even through a personal attorney, wanting a book to be taken off the shelves, highly, highly unusual. We're
in unchartered territory here.
QUEST: I've watched your coverage very closely. And I'm guessing that it gives you no pleasure to get ever-closer to basically questioning the
sanity of the U.S. president.
STELTER: You know, I've been watching -- my job is to watch a lot of TV. Watching a lot of TV. You're hearing this more and more and more. Yes,
I've been bringing it up. A lot of people have been bringing up the president's stability, his fitness for office. It is deeply uncomfortable
any time you're asking that about any leader, especially the leader of the United States. But this book forces those questions. It forces that
conversation. And that's why two days in a row, Richard, we've heard this brought up in the White House briefing room. You know, he's getting a
physical next week. So, we might have some answers then.
QUEST: I suspect to physical will show man in perfect health.
STELTER: The best health ever?
QUEST: The best health ever.
STELTER: The most presidential health?
QUEST: Brilliant health.
STELTER: Well we'll see. And then hopefully everyone can judge it for themselves.
QUEST: You haven't read the book yet?
QUEST: Would you like to borrow mine?
STELTER: I will. Can I? Yes.
QUEST: When it arrives.
QUEST: Thank you.
The White House talking of this. The White House says Donald Trump is furious and disgusted by the claims made in the book. The Press Secretary,
Sarah Sanders, spoke to reporters earlier and pushed back hard at questions as we were talking about then on President Trump's mental fitness.
(BEGIN VIDEO CLIP)
SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: It's disgraceful and laughable. If he was unfit, he probably wouldn't be sitting there,
wouldn't have defeated the most qualified group of candidates the Republican Party has ever seen. This is an incredibly strong and good
leader. That's why we've had a successful 2017 and why we're going to continue to do great things as we move forward in this administration.
(END VIDEO CLIP)
QUEST: OK, Chris Cillizza, is CNN politics editor-at-large. He joins me now from Washington. You heard Brian, and you've heard -- you have seen
the extracts from the book. Chris, before we talk about the president's mental health, if you like, how true, from your understanding -- how true
are the -- is the gravamen of the book?
CHRIS CILLIZZA, CNN POLITICS EDITOR-AT-LARGE: Let me first say, like Brian, have not read the book. I have read Michael Wolff's excerpt that
was in "New York Magazine." I've read the "Guardian's" sort of summary of the book. But I have not read the entire book. So, I'm speaking to a
relatively limited amount of the content of the broad book. I think the broad outlines that Wolff lays out are right. A White House that operates
sort as chaos as its founding principal. Donald Trump as someone who is mercurial, who is impetuous. Who is easy to anger. Does look to scapegoat
people. I mean, these are all things that, frankly, Richard, are not new to Donald Trump and the White House. This is who Donald Trump has long
As to specific episodes, I think that we owe it to ourselves as journalists and to the viewing public to let's examine these things. If there are
issues, questions that are raised about the validity, veracity of a passage or something like that, let's look into it, and get Michael Wolff's answer.
One thing I will know, Steve Bannon, nor the White House has questioned any of his on the record quotes. They may take issue with what Steve Bannon
said, but no one is saying that Steve Bannon didn't say it.
QUEST: OK. So, if that is the case, and -- why are they pouring more petrol on the flames with all these actions? What from your understanding
is the rationale for doing what they're doing?
CILLIZZA: So, you only have two options when a book like this comes out. This doesn't have to do with Donald Trump. It has to do with any high-
profile figure. You have the ignore it option. Hope it withers on the vine or you have the full-frontal assault on the book. They have clearly
opted for the full-frontal assault on the book. Donald Trump is not someone who ignores things all that well. So, it's probably the only
option that they had. I think when you see Sarah Sanders out there talking, Richard, she's doing so at the behest of Donald Trump. Donald
Trump does not like the portrait of him cast in this book.
QUEST: Stay with me.
QUEST: Listen to S.E. Cupp's interview with Sean Spicer. Have a listen. We'll come back to you for your thoughts.
S.E CUPP, HLN HOST: Do you think you maintained your credibility?
SEAN SPICER, FORMER WHITE HOUSE PRESS SECRETARY: There were times where I screwed up. There's no question about it.
CUPP: Give me one.
SPICER: I mean, the inauguration. You brought it up. I would say that's first and foremost. There's an event where I was trying to talk about how
evil Assad was.
SPICER: And I screwed that up royally.
CUPP: Brought up Hitler.
SPICER: Thank you for reminding me. But there's -- those are days when I went back, and, look, I'm a very self-critical person.
SPICER: And I sat back and said, you know, that's -- it's not my credibility. I honestly went out every day to do the best job I could for
the president of the United States who gave me an unbelievable honor.
[16:25:00] And to basically do the best job I could for the American people. Because that's ultimately who you serve. And so, when I screwed
up, Yes, it felt really bad. Because you realize that you're tarnishing your personal reputation, your family's reputation, your friends who like
and you support you. You know, some of your colleagues. And ultimately, again, this administration and the American people who I wanted to do my
best job for every single day.
QUEST: That interview airs in full at 5 o'clock. It's just 40 minutes from now, on HLN. Sean Spicer, you heard what he said. Obviously not
addressing specifically. But, you know, when he was there, that was the early days of chaos, which is what Wolff talks about.
CILLIZZA: Yes, on the Hitler comparison, Sean sort of went down a rabbit hole he shouldn't have and got in way too deep. I'm willing to say, I
understand when you're speaking extemporaneously, those things can happen. He apologized for it, fine. The inauguration crowd incident to me is more
indicative of the impossibility of the job and how he failed to do it well. Which is, the reason that he came out and demanded that it was a largest
inauguration crowd, period, was because Donald Trump wanted him to do that. Donald Trump was his boss.
He said and did lots of things that Donald Trump sort of was prodding him behind the scenes to do, in order to keep his job. You could say, he could
have easily resigned, and he could have. But this was -- this was not Sean Spicer, freelancing, Richard. This was Sean Spicer either taking direct
orders from Donald Trump on what to say or trying to figure out what would help him keep his job.
QUEST: Chris, you can borrow the book that I bought on Amazon last night, which may be delivered tomorrow or not, as the case may be. After Brian
Stelter has read it.
CILLIZZA: I will be up in New York next week. Maybe I'll come and read it then.
QUEST: Something tells me you have well thumbed through it in all its glory by then.
CILLIZZA: I think that's right. Thank you, sir.
QUEST: New York's two biggest airports are now officially closed as temperatures in the north closed in. Have a look at these. The governor
declared emergencies in five states, including New York and storm warnings have been issued from Maine to South Carolina. More than 4,000 flights
were cancelled on Thursday, according to FlightAware, and more than 2,000 have been delayed.
This is the misery index from FlightAware. You can see these the worst delays. Newark, EWR, Chicago, Kennedy, Atlanta, LaGuardia. Then you get
right down to some of the other airports, Midway, Baltimore, and -- Tom Sater is here. Tom, I think the issue we need to understand, obviously,
the misery index is really sharp at the moment. How much worse have we still got to come?
TOM SATER, CNN METEOROLOGIST: Well, the winds are going to be picking up in around the Boston area. We're looking at power outages now just in the
last hour. The deep south, you know, we had more snow in parts of South and North Carolina than let's say Philadelphia, with just a few
centimeters, as well as Washington. So, Reagan National and Dulles Airport really no big concerns. But as you mentioned, yes, they did shut down
LaGuardia and JFK. We're 150 kilometers away, the center, that is, from Nantucket. Ask that's where we're starting to see some problems now,
22,000 without power. I think easily later in the evening, we could have over 200,000. And with the coldest air of the season moving in, Richard,
it's just going to be miserable.
QUEST: You raised this point, because look at this, Central Park, that's the shot we showed at the start of this program. The view over Central
Park. Twenty centimeters expected, nearly 2 feet in old money. But Tom, it's this weekend cold weather that I'm hearing about. This arctic blast
that's going to be even more dangerous.
SATER: Yes. We have already endured 12 straight days with below-normal temperatures east of the continental divide. And because this is such a
broad circulating storm, it is already now uncorking the coldest air to be moving into the Northeast. Wind chill values in New York City, you're
going to be down to around, you know, minus 30 degrees, Celsius, wind chill. Some areas minus 40 in Boston and interior New England. That's
QUEST: Tom Sater, thank you. Thank you for that.
SATER: You're very welcome.
QUEST: We want to quickly show you over here. We come back over to -- if you are flying to the United States, let me just show you exactly where the
worst delays are. New York City there, delay 24, cancelled 142. These are to the major New York airports. But other, obviously European destinations
that come to the U.S. Look over at Washington D.C., 28 and 18. Even down in Miami, delays and cancellations. Nothing really on the West Coast,
other than what's come in. And as you're coming from Chicago, or going to or from Chicago, these are the major destinations, obviously, you're
looking at, delayed, 29, cancelled, 17. And that's for the two airports in Chicago, obviously. Chicago O'Hare. Coming up after the break, a security
flaw in computer chips all over the world. Almost every tablet, PC, is at risk. We'll have the details after the break.
[16:32:23] QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. When Mark Zuckerberg reveals his new year's
resolutions for 2018, there may be a hard one to keep.
And real-life Italian job, Qatari jewels stolen from a Venetian palace. We'll have those details. As we continue, you are watching CNN. And on
this network, the facts always come first.
The number of people who have died in a passenger train wreck in South Africa has risen to 18. Hundreds of people are injured, including the
train's driver. The authorities say the train was traveling from Port Elizabeth to Johannesburg when it slammed into a truck and burst into
flames. Most of those killed were trapped inside, and died in the fire.
11 people have been killed in the latest suicide attack in Kabul in Afghanistan, and the interior ministry says 25 people are also hurt.
Officials say the bomber blew himself up next to police officers as a protest. The afghan capital has seen a number of deadly attacks in recent
The joint military drills that infuriate Kim Jong-un in North Korea are to be put on hold during the Winter Olympics. The decision comes a day after
north and south revived a hotline and started talking again. The U.S. and South Korea have long described the exercise as defensive. North Korea
considers them a practice for an invasion.
The United States government is suspending security systems to Pakistan. The state department spokeswoman Heather Nauert made the announcement early
on Thursday when she said the U.S. will not be delivering military equipment or transferring security-related funds until the Pakistan
government takes decisive action against terror groups.
An attorney for President Trump has sent a cease and desist letter to the author, Michael Wolff, and his publisher. As Mr. Wolff looks to -- as Mr.
Trump, I beg your pardon, looks to limit the impact of the explosive book on his administration. The letter demands the publisher stop any further
publication or release. The book is now releasing on Friday, four days early. The publisher says that's due to unprecedented demand.
[16:35:00] Intel shares took a hit, down 1.5 percent after a much steeper loss in early trade. Research has revealed massive security flaws with
computer chips bid by at least three companies, including Intel. The flaws are found in the processors at the heart of billions of devices. It means
all computer laptops, smartphones, across the world, are at risk of being hacked into. Clare Sebastian is in London, following this story for us.
This sounds rather serious.
CLARE SEBASTIAN, CNNMONEY CORRESPONDENT: It's extremely serious, Richard. Literally billions of devices could be affected, because they all have
these chips in common. Not just Intel, AMD, A.R.M., as well. The reason this is so widespread, this is much more than your average software flaw
which can just be patched. This is about the hardware in the chips themselves.
It exploits one of the things that makes them so fast and efficient, so sophisticated, what everyone wants from their devices. It's called
speculative execution, it's the way that these processors carry out tasks, execute code, before they have even been asked to do that, speculatively,
if you will. And that is when these bugs can move in and access the data that these chips are accessing themselves. So, this really is a flaw in
the hardware, Richard. And it's now up to the companies and the chip- makers themselves to try and do something about it.
QUEST: Maybe this is a question for our next guest, but I'll start with you. I don't understand. I mean, these are chips made by different
companies, but all have the same bug. How is that?
SEBASTIAN: Well, they all have this speculative execution tool in common, essentially, Richard. They all -- for of the past ten years or so have
been able to do this. It optimizes their functionality. It makes them work faster. So really the irony here, as I said, is as these things have
become more sophisticated, they have become more vulnerable. But I did speak to one of the researchers who has been involved in this, and he did
say, you know, it took them at least a year, maybe even more, to come to this conclusion.
When they originally started exploring this potential vulnerability, they weren't sure it was going to work. And eventually several groups of
researchers came together and found that it did. But the key thing to remember is, there has been no evidence as of yet of any real-world hack or
malicious activity surrounding this. So far, they only know that it can happen in the confined controlled environment of a laboratory.
QUEST: So, I've got a computer from which we're doing the program. I've got my mobile phone and looking at the reactions. We've got dozens of
other various devices. How on earth do I start to put this right?
SEBASTIAN: Well, the first thing you've got to do is pay attention to the patches that are coming out all of the time. Microsoft has released a
patch for Windows. Google has issued guidance for its users. Google and Amazon are both trying to update their cloud software. And Intel says that
by the end of next week, it will have released updates for 90 percent of products in the last five years. That, of course, may not be enough. This
goes back much further, Richard. Take a listen to what the CEO of Intel, Brian Krzanich, told CNBC. Have a listen.
(BEGIN VIDEO CLIP)
BRIAN KRZANICH, CEO, INTEL: We believe we have the right fixes in place. We have been testing those fixes, and making sure that we understand how to
implement those. And those are going to get distributed out to the OEMs, and they start next week, early next week. But I think they'll roll out
depending on the OEM schedule, and whether, for example, you do automatic updates or whether, you know, you as a user have to go to the website and
get the update yourself.
(END OF VIDEO CLIP)
SEBASTIAN: Now, Intel actually had to step in and defend their CEO, Brian Krzanich after it emerged he sold around $39 million worth of stock in late
November last year, several months after the company found out about the flaws in their chips. Intel says that that was a preplanned sale, and it
was unrelated. But it's certainly not a good headline for them today, Richard.
QUEST: Clare Sebastian in London. So, to Charles Carmakal, vice president, Mandiant joining me from Washington. Look, here's the problem.
I feel I've heard it all before. I feel I've been warned about chips and hacks and bugs and, you know, nothing really drastic or dramatic ever
happens. But is this the one?
CHARLES CARMAKAL, VICE PRESIDENT, MANDIANT: You know, this is actually pretty game-changing. This not only infects certain operating stems,
because it impacts microprocessors across the various chip manufacturers, really all modern computers are impacted by this. So, the good news is, a
number of organizations have developed software to fix this, or to temporarily mitigate the risk. But ultimately, the actual microprocessor
is always going to be broken and it will really require a replacement of the chip in order to fully mitigate and fully fix the vulnerability.
[16:40:00] QUEST: How come -- same Question I asked Clare. How come chips from different manufacturers all have the same flaw?
CARMAKAL: Yes. I mean, from an architecture perspective, they're using very similar technology to essentially speed up processor speeds. So,
because different manufacturers are using essentially the same technology, or the same processes, that's why it's impacting so many different
QUEST: So, let's take a computer -- all right. So, at some point, this will no doubt be updated online, and the flaw will be -- or the bug will be
dealt with. But what you're saying is, that the chip itself will always be compromised.
CARMAKAL: Well, the chip is always going to be vulnerable until there's a replacement. And at least that's what the initial indication suggests. I
guess it's really difficult to fix a hardware in a computer. So right now, the operating system vendors have come up with software to mitigate the
risk. I think there's really two problems here. First, a security vulnerability that might allow attackers to get access to sensitive data on
a system. So, passwords, encryption keys. The second thing is the patches that have been developed by the operating system vendors are actually --
have the potential to slow down processing. And that's going to have a pretty big impact to corporations.
QUEST: But here's another thought. You know, besides the billions that are in use, there are many more -- lots of billions that are sitting in
shops, Best Buy, you know, shops around the world, stores, ready to sell computers and phones and things. Are you saying that every single one of
them is compromised?
CARMAKAL: Well, so I want to be very clear. I'm not saying it's compromised. I'm saying that it's susceptible to being attacked in the
future. So, with software updates and with hardware updates over time, they could be safe.
QUEST: Right. But what I mean is, I might go out and buy a computer now, and that computer, even before I've switched it on, needs an update to deal
with the chip that's in it.
CARMAKAL: Yes. So, the answer is yes. But the reality is that pretty much any computer you buy at any point in time does require an update. So,
when you buy a mobile device and you turn it on for the first time, it's actually downloading a number of updates, because there are software
vulnerabilities that were present in a device that need to be updated, as well. So, it's no different.
QUEST: Thank you for joining us. Thank you.
Now, the palace was once the seat of the Venetian government. It's now a crime scene after thieves stole precious jewels in a daylight robbery, an
QUEST: Sometimes the most remarkable crimes end up as folklore. This one from Venice. [
16:15:00] Thieves entered the Doge's Palace a major tourist attraction in the city
and they did it in broad daylight. Brazenly, they stole selected items from an exhibition of jewelry owned by the Qatari Royal family. Barbie
Nadeau is in Rome, you know, at one level, we sort of gasp at the Oceans 11 nature of this. Of course, it is a real crime, and that must be taken very
seriously. But it's extraordinary.
BARBIE NADEAU, CNN CONTRIBUTOR: Absolutely. This is much more than a who done it at this point. It's how do they do that. These people were in the
return o'clock in the morning. The museum had been open for a good hour and a half. And it was the last day of this particular exhibit. The two
thieves, police haven't told us if they're men or women, don't want to give too much away, being extra vigilant a little bit too late.
The thieves walked up to this alarmed glass case, did a couple of maneuvers, and somehow opened that case, grabbed a handful of jewelry, and
left before the alarm went off. That means they're able to somehow delay that alarm in the case by one minute, and that one minute was enough for
them to meld into the crowd and escape out into St. Mark's Square where they could be anywhere at this point.
The police say they have four credible leads. They won't say what those leads are, obviously. And they say that it's very unlikely that this
jewelry, a broach and some earrings they know were stolen, could be resold as actual whole pieces. And they are likely already being disassembled and
the gems will be sold individually -- Richard.
QUEST: Now, that's the awful -- besides the awfulness of the crime. Because there is a certain value in jewelry in the piece as it's
maintained. And it's whole. Once you start breaking it apart, then it loses a lot of its collective value for its intrinsic worth.
NADEAU: Absolutely. And this was all jewelry, this spanned the course of five centuries. Very, very important collectors' pieces. Indian gems.
And this particular exhibit travels from time to time, but it's not one of these exhibits that you see all over the world. It comes to special places
like the museum in Venice, and it goes back into the locked box in London where it's kept. So, you know, they're looking at all sorts of things,
though, including how it was insured, who knew about it, who was on the security, all those sorts things are being investigated.
QUEST: What do the Qatari say about it?
NADEAU: Well, we haven't had a comment. And that's one of the big questions right now that everybody wants to know what the owners of this
jewelry have to say about the loss. And they also aren't giving a full value of these pieces that are missing. They don't want to -- apparently
don't want to tip off the thieves to tell them how much their individual loot is worth. So, there are a lot of questions to be answered. But this
is young. This was just a little bit over 24 hours ago. I suspect we'll have a little bit more information as the investigation continues, Richard.
QUEST: And the moment there is more information, please come back here and tell us more about it. Thank you. Joining us from Rome.
Download our show on our podcast, QUEST MEANS BUSINESS. Subscribe to the podcast. It is available for all the major providers. You can listen at
Mark Zuckerberg says the world in 2018 feels a lot like it did in 2009. Anxious and divided. And so, he set himself an ambitious target for the
year. QUEST MEANS BUSINESS.
[16:50:00] (COMMERCIAL BREAK)
QUEST: Mark Zuckerberg says his New Year's resolution is focus on tackling Facebook's problems. Specifically, that means stopping hate speech and
warding off foreign meddling. I might have arguably said, never mind that being a New Year's resolution that's your job if you're the chief executive
of the company. But let's be fair. It an unusually abstract goal for someone who usually focuses on personal achievements.
So, Zuckerberg has in recent years -- his resolution was to visit every U.S. state, run 365 miles, build an artificial intelligence assistant, and
learn Mandarin, which we know he speaks. Setting New Year's resolutions is always the easy part. Keeping them is harder. And the reason we're doing
it today, of course, it's January -- first week of January, January the 4th. And by now, if you have made a new year's resolution, you're probably
wilting and whittling under the weight. Elizabeth Crowder is an executive coach and career strategist, she tells me there are three ways to make your
New Year's resolutions last.
(BEGIN VIDEO TAPE)
ELIZABETH CROWDER, EXECUTIVE COACH AND CAREER STRATEGIST: Well, first of all, number one, you want to keep it simple. Pick one or two. Do yourself
a favor. Number two, you want to write it down. Have it visible so you're reminded. Studies show those who write their goals down have more of a
chance of succeeding in achieving those goals than those who don't. And number three, you want to have a strategy. If you want to lose weight, how
are you going to do it?
QUEST: All right. So, keep it simple. Write it down. And have a strategy. So, if that's the --f that's the way -- it's done, why do so
many of us fail?
CROWDER: Because they don't have a strategy. They don't have a plan. So, when you're keeping -- you choose your resolution, right? Then you write
it down. You have it visible. But what about the action plan? How are you going to lose weight? Are you going to join a gym, Weight Watchers?
Then what? You've got to put it in the calendar. You've got to make time to work out. You've got to choose something.
QUEST: Right. If I suddenly decide I'm going to -- as my New Year's resolution, I'm going to learn Mandarin, there is no way on earth that I
can learn Mandarin.
CROWDER: Well, Rosetta Stone, you get the tapes, YouTube.
QUEST: But that's an unrealistic -- for me, that's an unrealistic -- I'm going to learn how to be a chef. My cooking is dreadful.
CROWDER: You want to set a time line. Maybe you need the entire year for that, Richard. But if you want to be a chef, what do you have to do? Sign
up for classes, put that in the calendar. Then you want to practice, prepping and cooking at home. You've got to put it in the calendar.
You've got to write it down and have it visible. Post it. I've got clients that post it on the bathroom mirror, on their desk, on their night
stand. So, they don't forget it.
QUEST: So what purpose does the resolution serve? And is useful. We are deliberately talking to you about this in the first week of January, not
the back end of December, because most of us fail to keep them. Every research shows that most New Year's resolutions don't last until mid-month.
CROWDER: People don't have a proper plan. This is what I say. For a New Year's resolution, keep it super simple. Something you can just check off
on the box. Just check off that box. And then what you really want to do is have a set of goals for 2018. OK? Something more intricate. You want
-- you're kind of building the life that you want. What do you want your life to look like in 2018? So, it's in your document. Have a vision.
What do I want my life to look like?
QUEST: You have very elegantly shifted from New Year's resolutions to lifetime goals. These are not the same thing.
CROWDER: They're very similar. You know why? New Year's resolutions are also a goal. OK? So, you want to keep that -- so you're telling me, well,
you know, maybe mid-year, end of the year, what happened to the resolution? Keep it simple. You want to know what my resolution was this year,
Richard? I have crappy handwriting, OK? It's messy and sloppy. And I want --
QUEST: Join me.
CROWDER: So, we're together on that. So, I signed up for a short calligraphy class to get some pointers, improvements, I learned some new
tips which I'm happy to share with you. I'm finished. I've already done it. Checked off the box. Now I've moved on to my goals for 2018. What I
want my life to look like, I write in the vision. Then month by month, I write the goals and I have a mini action plan for each goal.
(END OF VIDEO TAPE)
[16:55:00] QUEST: Extraordinary. The Dow closed above 25,000 for the first time on Thursday. The president celebrated the milestone by
promising to cut regulations, all the major markets were at record territory. The Dow, the Nasdaq and the S&P 500. And everybody suggests
there is more to come. We'll have a Profitable Moment after the break.
QUEST: Diane makes the point, when her hairdresser, her barber, her whatever, doorman, even her cab driver, when everybody is talking about
what stock they're getting into, then that might be time for some cause and concern. Not that there is anything wrong with everybody being in the
market. But a rising market that entices people in, purely on the speculative hope of a bubble is a dangerous place to be.
Now, on average, we get a correction every 365 days. But we haven't had a connection in over two years. And the last one wasn't that severe, back in
2015, and you have to go back to 2011 before then. So, a correction is entirely possible. Correction being 10 percent or round about. The truth
of the situation is that every reason to hope that this market rally continues, but it will only have legs and stability if every now and again
it takes a pause.
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.
I'll see you tomorrow.