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QUEST MEANS BUSINESS
Trump Hails Economy`s Strength After Jobs Report; All Apple Devices Contain Major Security Flaw; Macron Dismisses Turkey`s EU Chances; Iran Blasts U.S. for Hypocrisy Over Protests; U.S. Draws Fewer Visitors in First Half 2017. Aired 4-5p ET
Aired January 5, 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: Wonderful day on Wall Street. Closing bell ringing, Meredith ringing the closing bell. And the markets absolutely
roared to records. All the major indices are at record highs, and some in Europe, too. And, yes, that`s the way to do it, ma`am. A strong, robust
gavel. What a day, what a week. It`s all over. It`s Friday, it`s the 5th of January.
Tonight, jobs growth in the U.S., it`s slowing. The markets are rising. And Donald Trump, well, he`s still smiling and taking credit.
Apple admits that every iPhone now needs a security upgrade.
And no entry yet. Emmanuel Macron says there is no chance of Turkey joining the EU any time soon.
I`m Richard Quest, live in a freezing New York City. Snow may be gone. Temperatures going down. It`s the world`s financial capital, where I mean
Good evening. The markets in the United States have just closed and so end the week with new records. Even as the U.S. economy is perhaps creating
fewer jobs than expected. But let`s not be curmudgeonly about this. The Dow has closed up more than 200 points. I`m guessing this is almost the best of
the session up 218 points. The Nasdaq is at a record, as well. The S&P 500 is at a record. And the U.S. president says, whether it`s jobs, the stock
market or tax cuts, everything is rosy.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The stock market is up very, very big today. We have set new records, and I think they`ll be continued
to set. The tax cuts are really kicking in, far beyond what anyone thought. Numerous companies have today come out and announced that they`re going to
make big payments to their employees, something that nobody really had in mind. So, we`re very honored by it. But the market is good. The jobs
reports were very good, and we think they`re going to get really good over the next couple of months.
(END VIDEO CLIP)
QUEST: So, in the trading post, let`s get to the jobs report that the president was talking about. The numbers came out before the market had
opened. Now, 148,000 new jobs, that`s we than expected. Strong gains in construction was one of the reasons they were talking about, and
manufacturing. The actual unemployment rate -- remember, there were two different surveys that are done, one on new jobs, one on unemployment. That
stayed steady, up 4.1 percent. The wage growth rate -- that`s interesting, that`s always one we talk about -- at 2.5. Below what the Fed wants, 3
percent, but better than it has been of late. And the labor participation rate.
This one is really important. Because until -- this one is not quite all- time lows but until this number starts to rise, the general view is that the rest becomes somewhat not meaningless, but not quite as significant.
But even though this might have been regarded as a mediocre report, you can see the Dow, the S&P and the Nasdaq closed at record highs. Which means I
have too a little bit of poor penmanship or chalkmanship over here.
The Dow now has three records. The S&P has four. The Nasdaq has four. And so, these have had records for every trading day of the new year, which, of
course, is all four days. This on three of them, really, I should take some calligraphy lessons about how to do this. And in Europe, the FTSE was also
at a record. And indeed, the SMI index, the Zurich SMI, also closed. So, you`re seeing what an extraordinary week it has been. With me, Patrick
Gillespie from CNN Money. Happy new year to you, sir.
PATRICK GILLESPIE, CNNMONEY REPORTER: Happy new year to you.
QUEST: Guru La Monica.
PAUL LA MONICA, CNNMONEY CORRESPONDENT: Happy new year.
QUEST: Right, we need to understand. Let`s start with you, guru, on this question of green -- which, of course, I didn`t call --
LA MONICA: Green everywhere.
QUEST: Green everywhere.
LA MONICA: The weather outside is frightful, Richard, but the markets are obviously so delightful. And I think that it really is -- yes, about that
wage growth number. Wages, as you noted, have picked up a little bit. But they`re not so high to spark any inflation fears yet. And I think that`s
why this market is roaring higher again. The Federal Reserve is likely to raise rates a couple of times this year. What do you think, two, three at
most? I think the market can handle that.
[16:05:00] If the markets start to see inflation pick up and the fed had to raise rates more aggressively and Jerome Powell might tick off his boss by
doing so, that could have been a reason to pull back. We didn`t get that there.
GILLESPIE: Richard, wages have really been the bad actor in what has otherwise been an exceptional performance by the U.S. economy. But 2018
really could be the year we see more meaningful wage growth. We`re starting to see some underlying signs that wages could pick up. But -- of course,
it`s not looking like it`s going to change the Fed`s plans.
QUEST: But this 2.5 percent -- look, this 2.5 percent, which this is getting better.
GILLESPIE: Better. But we`ve been in this range now for about two years straight. That`s 24 months straight. So, we really need to see something
more in the 3 percent, 3.5 percent range that would really start to catch the Feds` attention and change their expectations for rate hikes.
QUEST: OK. So, Patrick, what would get that number up? You`ve gotten -- still got -- not -- record low interest rates. You`ve got good corporate
profitability. Now you`ve got a tax cut. Bonuses do not really count in this wage growth. So, what will get that number up?
GILLESPIE: Better job skills and employers across the board saying we cannot find the workers we need so we are forced to raise wages.
Interesting number, Richard. 23 percent of employers and small businesses say they are going to pay their employees more in the next six months. That
figure is at its highest point in 17 years. So, we are starting to see signs that employers are feeling the pressure. Employees have the upper
hand right now.
QUEST: Paul, look at the market. Look at the Dow 30. All right. I know it`s only 30 stocks, but they are very good barometers of the U.S. economy.
There is no obvious reach why Boeing, which was the best performing Dow stock in 2017, four percent in a day on a mature stock like Boeing. Goes
over $300 a share.
LA MONICA: Yes. That`s the reason why the Dow is up so much, again, 30 stocks, it`s a price-weighted average. So, when you have the highest priced
stock going up this much, that brings the entire market higher. I think there are hopes that Boeing will continue to benefit from potentially
increased defense spending, also the airlines are very healthy right now and are spending more on new planes. That`s something that I think has
helped them in their rival Airbus, as well.
QUEST: And the dogs of the Dow theory that the laggards of last year -- now we saw in the first couple of days IBM and GE putting on 2 or 3 percent on
each day. That`s petering out a little bit, isn`t it? IBM only a half percent today. GE cannot even withstand the dogs in the Dow theory, and
it`s just barely eked out a gain.
LA MONICA: Poor GE. Look at the other stuff.
GILLESPIE: Everything they have.
LA MONICA: I know, Yes.
You look at some of the other companies, though, that are leading the way. Microsoft and Apple are two that really stand out. And tech stocks just had
a surge in 2017. And I don`t think that`s going to end any time soon. Because the fundamentals are very, very solid for all of the big technology
companies out there.
QUEST: That Apple up 1.1 percent, how -- and we`ll talk about later in the program about the software glitch in all of the iPhones. But for Apple to
withstand -- to rise one percent -- it`s a rising market -- is quite an achievement.
LA MONICA: I think it is. I mean, when you look at the glitch we`re seeing, it`s obviously across the board. It`s not just an Apple-specific problem.
And so far, we haven`t seen any major reports of people having significant technology problems because of the glitch. It`s just that there is glitch.
GILLESPIE: Also, a sign that a rising tide lifts all boats. A strong, healthy economy can help alleviate the pressure that might be on Apple
because of this glitch right now. So, I think it`s a -- as Paul said, a sign that there aren`t major problems, and the U.S. economy is humming.
QUEST: Have a good weekend.
LA MONICA: Thank you, sir.
QUEST: We`ll need both of you back next week in fine fettle to go into battle. Good to see you.
The U.S. Secretary of State, Rex Tillerson, has spoken exclusively to CNN. Secretary Tillerson says he`s never questioned the president`s mental
fitness, a topic thrust back into the spotlight by Michael Wolff`s hugely controversial new book on the Trump administration.
(BEGIN VIDEO CLIP)
REX TILLERSON, U.S. SECRETARY OF STATE: TILLERSON: I`ve never questioned his mental fitness. I have no reason to question his mental fitness. My
relationship with him, and it is a developing one, and I remind people, and I think it`s well-known, that he and I did not know one another before he
asked me to serve as Secretary of State. So, we don`t have a lot of history in the past. So, part of this is us coming to learn and understand one
ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: You are also two different people.
TILLERSON: We have different styles. How I make decisions, how I process information, I have to learn how he takes information in and processes it
and makes decisions. And that`s my responsibility. I`m here to serve his presidency. So, I`ve had to spend a lot of time understanding how to best
communicate with him, so I can serve his needs, with information.
(END VIDEO CLIP)
\ QUEST: Michael Wolff`s claimed in his book that Mr. Trump senior`s staff described him as child-like and a moron. And what`s interesting, David
Gergen, who joins me now.
[16:10:00] David, what`s interesting is, when asked about who talks about the president in such terms, Michael Wolff says, let me set a standard
here, draw a line in the sand. 100 percent of people in the White House that he spoke to are calling the president those things. That`s very
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Listen, Richard, there`s a complete disconnect between the sizzling economy we have and the withering
attack that the president has come under in this book. The Trump supporters, I should tell you, are dismissing the book. They say we knew
all of this before. People elected him knowing a lot of these things. And he`s doing exactly what he promised, and look at the results in the stock
market. He deserves a lot of credit for that, et cetera.
But at the same time, I must say, there are a lot of other people who are not Trump supporters who are looking at this aghast. Looking at the book
and what it claims. I think that, yes, we have known a lot of this before, but there are two things that are new that stand out to me. And one is,
after 200 interviews, Mr. Wolff found a widespread feeling within the staff that the president was mentally slowing down. That he`s not -- that in the
past, when they first got there, he might tell three stories, the same three stories over a period of 30 minutes, and now it`s often he tells the
same three stories within ten minutes and doesn`t remember he`s told them. That is obviously very concerning.
The other thing is, what you put your finger on, and that is Mr. Wolff claims that 100 percent of the people he talked to think the president is
not fit for office. Whether it`s mental or emotional or tempter mental, not quite clear, but 100 percent think he`s not fit for office. This from the
people who work with him every day. That has to be concerning and disturbing, as well. Where it goes politically, I don`t think we know yet.
But these are new hits under the waterline for a president who otherwise, when you look at the economy, should be enjoying a great, smooth ride.
QUEST: You touched on there in your answer, where it goes politically, we don`t know yet. Because you can have -- A, if we knew much of this, but
it`s confirmed by the Wolff book -- even if part of the book is true, it`s still pretty horrific.
Secondly, what does happen? How do -- I mean, there`s only, you know, legitimately two or three ways that you basically remove a president from
power. And most of those are not viable at the moment.
GERGEN: Well, that`s right. Wolff also claims from his interviews, there`s a widespread feeling in the White House staff, senior staff, that the
president will not survive the Mueller investigation. I think that`s the big one that people are waiting for, to see which way that goes. Does he
have enough real evidence of collusion or money laundering, which I think is pretty critical here. We don`t know yet exactly where.
But what I do think is clear is the congressional investigatory process is almost coming to a halt. It is now a partisanship has taken hold. I don`t
think we`re going to get much out of this congressional committee, we never had high hopes. But I think Mueller is very, very important. And think
about this, too, Richard. It was Bannon himself who was quoted in this -- the Wolff book -- as saying he thought the president had about a one-third
chance of finishing his first term. And that`s when he was getting along with him.
QUEST: David, we heard Rex Tillerson say that he had to learn, he has to learn how to engage with the president. It`s somewhat of an extraordinary
comment, in a sense, from a man who was the CEO of the world`s largest oil company. But putting that to one side, as a man yourself, who has worked
with presidents in the oval office, at the very heart of government, you had to learn how to work with presidents, engage them.
QUEST: What for you is the most disturbing thing of everything we now know about what`s happening in the White House?
GERGEN: Well, I think the most disturbing thing is the portrait we have of a president whose mental capacity for the job may not be all that we need
in the job. And also has this -- almost uncontrollable temper. He could flair very easily, according to this reporting from Wolff. There are times
when the staff just sort of tries to get away from him and let him settle down some. That`s not -- the most discomforting thing, is that the person
you want with a big nuclear button on the desk?
QUEST: Is anybody -- is it your understanding that the president is listening to anybody on these issues?
[16:15:00] I mean, obviously, he`s going to watch the evening news tonight in the United States, he`s going to be horrified and angry and irritable at
what`s being said.
GERGEN: Oh, he must be extraordinarily horrified. He does -- he has some people he calls. There`s a fellow named Tom Barack, who is a very
successful businessman on the West Coast who I think is a very -- has a stabilizing voice. This president does spend a lot of time on the
telephone, talking to others, maybe Rupert Murdoch, Tom Barack and some of his former aides, people he`s fired. He continues to call and talk to. He`s
talked to Bannon, we know, in the last few weeks.
So, he does talk to people. Whether he listens and takes aboard or tries to explain and tell them how wonderful he is, that is a little unclear. Most
presidents I know, and what`s been fundamental to the presidency of success -- of a successful president, is having at least one or two people whom he
trusts in an inner circle who are also willing to go square with him. And tell him shoulder-to-shoulder, no holds barred, telling what`s going right,
what`s going wrong. It`s really important for a president to have a couple of friends like that. I don`t see that kind of friend in this White House
or in his inner circle.
QUEST: David, we`re very appreciative. Thank you. We needed to hear from you tonight.
GERGEN: Thank you.
QUEST: Thank you.
The book that we`re talking about there, Michael Wolff`s book, literally and figuratively flying off the shelves. "Fire and Fury" went on sale a few
days early -- four days early, despite a legal threat from President Trump. Midnight cues in Washington, the sort of mania, you might expect, with a
new Harry Potter book or indeed a new iPhone launch. The launch was also brought forward in the U.K., where this book shop sold out in less than 15
minutes. Michael Wolff is not well-known for humility. In this case, he says there`s one person in particular who deserves credit for the book`s
(BEGIN VIDEO CLIP)
MICHAEL WOLFF, "FIRE AND FURY: INSIDE THE TRUMP WHITE HOUSE " AUTHOR: Actually, what I say is, where do I send the box of chocolates?
UNIDENTIFIED FEMALE: You think he`s helping you sell books.
WOLFF: Absolutely. I mean -- and not only is he helping me sell books, but he`s helping me prove the point of the book. I mean, this is extraordinary,
that a president of the United States would try to stop the publication of a book. This doesn`t happen -- has not happened from other presidents,
would not even happen from a CEO of a mid-sized company.
(END VIDEO CLIP)
QUEST: There is a bitter irony in trying to suppress a story and then watching it go gang busters as a result. It puts the president in esteemed
company. Now, the name in the PR industry, and media industry is called "The Streisand Effect." It dates back to 2003 when Barbra Streisand filed a
lawsuit to take down a picture of her Malibu mansion from a tiny website that was all about coastal erosion. She lost the lawsuit, only six people
had seen it until then. And millions ended up looking at the picture. Including you right now. Brian Stelter is here. You`re familiar with the
Streisand effect in that sense.
BRIAN STELTER, CNNMONEY SENIOR MEDIA CORRESPONDENT: Yes.
QUEST: It`s a well-known doctrine.
STELTER: And it came to mind this week when President Trump had his personal attorney fire off letters to Steve Bannon, and then to the
publisher of this book, trying to threaten them with legal action. Everything president Trump did this week just fanned the flames of this
book, added to the fuel of this book.
QUEST: The book would have been big anyway. As the first kiss and tell from the administration, inside the White House.
QUEST: He just made it bigger, yes, yes.
QUEST: Again, do we know why? Why would anyone -- look, you heard David Gergen then. People must be saying, Mr. President, don`t this, don`t this,
the Streisand effect. You are going to make a bad situation worse.
STELTER: And there are two answers to your question. Number one, President Trump, before becoming an elected official has a long history of cease and
desist letters and other legal attempts to try to stop things he doesn`t like.
Number two, it`s the point -- you know, Wolff made a great point in the interview on "Today," he said, look what Trump is doing. He`s proving the
point of my book. He`s been erratic. He`s been being angry. He`s lashing out. He`s firing off legal threats. This is the point of the book, that he
may not be fit for office. So, I think that comment from Wolff was really revealing. Because if you look at the behavior this week, the legal
letters, then the tweets from the president which continued today. He`s actually just juicing up interest in the book, and it`s clearly backfired
QUEST: Right. On this question of -- you`ve now seen the book.
QUEST: Let me ask you what I asked David Gergen. What for you is the most distressing or disturbing aspect of what Wolff talks about?
STELTER: I think it`s disturbing that he says 100 percent if the aides, both the senior staffers and the lower level aides in the White House, all
of the people, the men and women that surround the president every day, that all of them felt he was not capable of being president. That all of
them, for various reasons, felt he wasn`t competent.
QUEST: Brian, I`ll just read a quick tweet that`s come out from Twitter. And in the past few moments, Twitter itself has explained why it will not
block world leaders from its platform, saying, blocking a world leader from Twitter or removing their controversial tweets would hide important
information people should be able to see and debate.
[16:20:00] It would also not silence that leader, but it would certainly hamper necessary discussion around their words and actions. This is all
about the idea that Twitter should not allow world leaders to tweet on such issues.
STELTER: It was three days ago that President Trump tweeted about his nuclear button.
STELTER: That`s why users started submitting it to Twitter, saying, this is a violation of your rules. He`s threatening violence. That kind of tweet
wouldn`t be allowed if an ordinary user posted it. I had asked Twitter for comment. The company originally didn`t comment at all. But now, three days
later, they have come up with an answer. And even though they don`t mention President Trump, this is clearly a response to that nuclear button
controversy. I understand their position completely, though. When a leader of any country is using a social platform to make an announcement, to issue
a press release, these companies can`t be in the business of deleting that.
QUEST: "RELIABLE SOURCES" on Sunday.
STELTER: I`ll See you then.
QUEST: As we continue, Turkey seems to be forever on the threshold when it comes to EU membership. After the break, the country`s president in Paris
looking to breathe life into a troubled relationship. QUEST MEANS BUSINESS.
QUEST: President Emmanuel Macron tells his Turkish counterpart, the EU isn`t considering letting Turkey join the club any time soon. The two met
in Paris. President Macron voiced concern over the fate of thousands of people detained after the attempted uprising in Turkey in 2016. CNN`s
Melissa Bell is in the French capital for us tonight.
MELISSA BELL, CNN PARIS CORRESPONDENT: Richard, the entire point of this meeting was to try and bring Tayip Erdogan, those so isolated on the
international stage since that failed putsch of July 2016, and the subsequent crackdown, back into the international fold. But there was a
great deal of tension in that room as the two men stood before the assembled members of the press, not least on the question of Europe. The
Turkish president clearly expressing his anger that has country had been in what had been called the anti-chamber of Europe for 54 years, with no clear
explanation from the EU as to why. For his part, Emmanuel Macron recognized that there had no doubt been mistakes. Mistakes on the part of the EU and
how it expressed the possibility of Turkish succession. And that was something that Emmanuelle Macron was determined to fix. Have a listen.
EMMANUEL MACRON, FRENCH PRESIDENT (through translator): It is clear that recent developments don`t allow any progress. We`ve had a very frank
discussion. We must stop this hypocrisy of natural evolution towards opening new chapters.
BELL: Emmanuel Macron also clearly referred to the human rights abuses that Erdogan is accused of since that putsch, that failed push in July of 2016.
For his part, Richard, Tayip Erdogan warned of the gardeners of terrorism. Never quite being clear whether he was referring to the supporters of
Fethullah Gulen. Who he blames for the failed putsch, the journalists or indeed the lawyers that are even now incarcerated in his country.
So, a great deal of incomprehension. A number of issues still unresolved. A great deal of water between these two men, and yet one thing that did come
through, the bilateral talks on business. It was one of the things the French had hoped for. They want to raise from the current $11 billion of
bilateral trade between the two countries to $20 billion. And that Airbus deal that was signed, 25 Airbuses sold to Turkish airlines. Some business
done on the sidelines of a meeting that remained on the questions of international diplomacy, on the key questions perhaps facing Turkey right
no now, extremely difficult, leaving so many things unresolved -- Richard.
[16:25:00] QUEST: Melissa Bell in Paris, thank you.
Turkey and the European Union have had a customs union since 1995. Now, it means no tariffs on manufactured goods, agriculture is excluded. But
crucially, there`s no right of free movement of labor services or capital, so-called four freedoms the EU, of course, has within its borders. And as a
result of this customs union, trade has quadrupled thanks to it. The World Bank says the framework of deal now needs rethinking.
Look at Germany. It`s now trade -- Turkey`s top trading partner. But Angela Merkel has halted trade talks after the dispute over jailed journalists.
And now Turkey`s foreign minister says it`s time to make up. So, joining me, James Jeffrey, former U.S. ambassador to Turkey, joins me from
Washington. Good to see you, sir. Thank you. Interpret this for me. This customs union agreement, which is unique in that sense with Turkey. But it
does -- can it withstand this latest battle?
JAMES JEFFREY, FORMER U.S. AMBASSADOR TO TURKEY: Absolutely, Richard. It`s extremely important for both countries. Turkey is, according to Fitch,
going to be the third-largest growing economy in the developing world in the next five years, right behind China at 4.8 percent. Moreover, almost
half of Turkey`s trade, thanks to this custom union, is with Europe. So, it is absolutely essential to maintain that trade relationship. On the other
hand, what Macron is doing now is trying to support the geostrategic relationship with Turkey that goes far beyond trade.
QUEST: A lot of people have said, of course, that -- and you may even be one of them, this agreement is exactly the sort of agreement, once it`s
been updated, that Turkey needs, because realistically, France is never going to let Turkey join the EU, and arguably, if you look at values,
Turkey can`t join the EU.
JEFFREY: Richard, you`re absolutely right. Thus, much of the sternum and thunder of this meeting about EU membership and human rights. What is
happening behind the scenes is Turkey is trying to get a commitment for an updated trade union and better business with Europe. Macron as essentially
though last remaining leader in Europe is trying to get Turkish support for his geostrategic agenda.
QUEST: Right, but if, Ambassador, if the EU does not use the leverage of this customs union to reform or to improve human rights issues within
Turkey, then they`ve lost that particular weapon, and frankly, Turkey is never going to reform, unless, arguably, some would say, it does -- it is
forced to do so in that way.
JEFFREY: A good point, Richard. But the weapon the EU uses is stalling on the excision talks to become a member. They don`t want to mess with the
trade relationship, first of all, Europe benefits from it.
QUEST: But that`s -- but you say the weapon they use is stalling on the membership. But membership is so unlikely, any time soon. Turkey knows it,
and has pretty much admitted it. The EU knows it, although they still choose to ignore it. I mean, that is not a weapon that is viable.
JEFFREY: No. What is really going on with Macron, who understands geostrategic issues is that Turkey is keeping 3.5 million Syrian refugees,
perhaps more, if the situation doesn`t clear up, from flooding Europe again, and creating even more chaos as in 2016.
QUEST: So, in your opinion, ambassador, in this tug between the EU and Turkey, who really holds the whip hand?
JEFFREY: Both do.
JEFFREY: You go after Daesh the terrorists who keep refugees out, the EU needs Turkey. For Turkey`s economic survival and growth, it needs the EU,
not as a future partner state, but as a trading partner.
QUEST: Ambassador, come back again, please, and help us understand exactly what`s going on there. We need you.
JEFFREY: Thank you, Richard.
QUEST: Thank you. Good to see you. Have a good weekend.
As we continue after the break, a warning from one of the world`s biggest tech companies. Apple reveals it`s affected by -- actually, never mind
Apple being affected. Because Apple is affected, every one of us is affected. We`ll talk about it after the break.
[16:30:30] GHOLAMALI KHOSHROO, IRANIAN AMBASSADOR TO THE UNITED NATIONS: -- that falls outside the scope of its mandate. Putting on display the failure
of the council to fulfill its real responsibility in maintaining international peace and security.
It is a discredit for the security council to take up a matter that is of a pure domestic nature, while failing abjectly to lift a finger when it comes
to genuine issues such as the long-lasting occupation of Palestinian territory, to which this item is dedicated, and indiscriminate bombing of
Yemen in the past three years, which has so far resulted in the deaths of thousands of human lives, human beings, and has brought hunger, disease and
destruction on the Yemeni people. To lift up the least of such failures of the council are all attributable to the obstructionist by the U.S.
delegation, and goes on and on. Mr. President, this is nothing but another desperate attempt by the U.S. administration to escape as it has lost every
shred of moral, political and legal authority and credibility in the eyes of the whole world.
Following such acts of disruption taken by this U.S. administration, as flouting international law, and disrespecting the practices of civilized
behavior and international politics, this administration is now desperately reaching for every straw that keeps it afloat. There is a long history of
U.S. bullying at the U.N., but this is a preposterous example. The purely internal affairs of a nation. In this case, protests that the Iranian
government has expressed, with the utmost respect for the rights of the protesters, and ever attempt to deal with it peacefully.
Despite violent infiltrators and direct encouragement by foreign forces, including by the president of the United States. It is not a subject of
debate by the world`s most important security order. I would be remiss if I didn`t mention for those who may not remember, also the United States` long
history of intervention in the internal affairs of Iran. It continues a pattern of disruption in the course of the Democratization process in Iran,
can be traced back to the coup staged by the U.S. against Iran`s Democratically elected prime minister in 1953.
Hostile acts, intensified once, Iranians rose up to overthrow the dictator ruler, who was, unsurprisingly, loved by the U.S. government. Since then,
among others, the U.S. has backed attempted military coup and acts of sabotage in Iran imposed illegal and in human unilateral sanction against
ordinary Iranians and unconditionally supported Saddam Hussein in his eight-year disruptive war against Iranians, including by providing him with
chemical weapons and even directly engaging military confrontation with Iran in the defense of Saddam. I should also refer to the 290 innocent
lives lost, including 66 children, on board Iran Air 655 shot down in July 1988 by the U.S. Navy in the Persian Gulf.
It would be remiss of me not to recall that the U.S. shamelessly decorated the commander who gave the order to fire. Mr. President, while President
Trump may be enamored of the fact that no protesters demonstrating against his prisons while he was in our neighborhood a few months ago, he may be
unaware that they have no right to protest.
[16:35:00] The fact is that this -- every Democratic country, citizens will, from time to time take to streets to protest one thing or another.
And Iran is no exception. In every country, the security forces, be they police, national guard or others, are present to ensure that protests
remain peaceful, and Iran is again, no exception.
However, while the U.S. accuses Iran of suppressing protests, one can only guess about the hypocrisy when viewing images of occupy Wall Street
protesters beaten and were dragged by American policemen. And to go back in time, when national guardsmen fired and killed peaceful student protesters
at the Kent State University, or watching film of the protests outside the Democratic National Convention in Chicago in 1968.
QUEST: There we leave the ambassador from Iran to the United Nations. Ambassador James Jeffrey joins me again from Washington. This is your
bailiwick, ambassador. You`re well-familiar with Iranian affairs. Listening to the ambassador, it`s a clever argument, isn`t it, to turn, you know, the
U.S. rejoicing at sort of the anti-government protests, and excoriating the Iranian government. But he`s cleverly turned it on its head.
JAMES JEFFREY, FORMER U.S. AMBASSADOR TO TURKEY: This is the only argument he has. He`s dredged up everything since 1953. Most of it, technically
true, to show that the United States is the pot calling the kettle black. But the point is, the Iranians are extremely nervous, Richard, at what`s
going on in their country today. This in some respects is much more serious than the last time in 2009, because it affects the working class throughout
the country. They don`t know whether they have lost control of their revolution. And if they can get back control.
QUEST: Right. But hang on a second. There were several days of protests, which I -- several dozen deaths as a result. There have been counter
protests in favor of the government. Are you telling me that the two -- the government is seriously worried that the anti-government protesters could
get out of control? They haven`t got a handle on this?
JEFFREY: It`s not the protesters per se. It`s that they come from the heart land, if you will. The Iranian ayatollahs can deal with the elite middle
class from northern Tehran when they go out on the streets and protest. They know how to deal with them, because they`re seen as pro-western by
instinct and tradition. But these people are coming from the same communities, the same working-class background as the folks who support the
ayatollahs and frankly who are marching in the pro-government parades.
QUEST: So, what`s this protest about? We are a business program, as you`re well aware, ambassador. And sometimes we get a bit lost into what the
machinations of these protests, the people in the north you talked about, those not in the elite. What are they protesting about?
JEFFREY: Primarily and initially a bad economy. They haven`t seen the economy boom after the nuclear agreement was signed, and after reelecting
President Rouhani who promised them economic reforms. They still see corruption. They still see high unemployment. They don`t see the economy
growing, and they`re very, very upset about that. That is leading to political questions about a system that at its heart is basically a
QUEST: Now, you were in office, and you have seen the nuclear agreement put in place. In your opinion, and you come from the same political party, or
at least you served under president of that side. Is it your view that this nuclear agreement is a bad agreement, that does need to be revised or
JEFFREY: I served under both Obama -- not Trump, but Bush. This agreement is basically -- does the job. It`s got some flaws, including the sunset
clauses that the Iranians will get out of in less than ten years. Missile controls, and a few other things. And we need to revise it, but we
shouldn`t get rid of it.
QUEST: So, can you revise it without getting rid of it? Will the Iranians, who, let`s face it -- I mean, all the Iranians have to do is say, no
revision, because it`s the agreement we signed up to.
[16:40:00] [JEFFREY: You`re absolutely right. But at a certain point, for example, in the U.S. Senate, they`re looking at after ten years, if the
Iranians exercise the rights under the agreement to expand dramatically their uranium enrichment, at that time we would pull out of the agreement.
So therefore, we would ask them to voluntarily stay within the limits beyond the terms of the agreement. There are various ideas like that out
there, and the Europeans, particularly, Macron, is quite interested in looking at some of them.
QUEST: Ambassador, I think you`ve got your work cut out for you to come back and explain any other areas of the world we should be looking at.
You`ll come back and talk about them more in the future. Thank you, sir.
JEFFREY: Thank you.
QUEST: This is QUEST MEANS BUSINESS. the markets are at a record high. The geopolitical situation seems to be rather severe. But it is a Friday.
QUEST: A stark warning from Apple. All of its devices, iPhones and iPads and Macs are at risk of being hacked. Security flaws have been revealed in
computer ships made by at least three companies. And those chips found in Apple devices across the board. The tech giant telling customers keep your
devices and apps updated. CNN`s Erin McLaughlin is in London. So, PCs, Macs, but it`s really the sheer number of iPhones in the world, and these
other devices that is causing concern. And yet I keep sort of coming to it, there`s been no evidence that there has been any hack.
ERIN MCLAUGHLIN, CNN CORRESPONDENT: Yes, that`s right. I was just speaking a while ago to one of the researchers who helped discover essentially what
are two flaws here and he said there has been no evidence of a hack exploiting either of these two flaws just yet. However, he added that if
these flaws had been exploited, it`s entirely possible that we wouldn`t know about it, because it is possible to exploit these flaws without
leaving a trace. So that is something that is concerning to researchers, as well as, of course, to these companies. And it`s why we`re seeing the likes
of Apple and Microsoft release patches to at least one of the flaws in particular, which is the meltdown flaw, Richard.
QUEST: So, once they have released the patch, is that it? I mean, are you safe?
QUEST: Oh, sorry. Go on.
MCLAUGHLIN: Well, essentially what we`re talking about here are two flaws. The most pressing flaw is the meltdown flaw. That pertains to the Intel
chips primarily. So, it`s bad news for Intel. That flaw is easily exploited. One of the researchers telling me all it would take is a hacker
introducing four lines of code on to your phone or your device, and then could access potentially your information.
The good news with the meltdown flaw is that it is easily patched, which is why we`re seeing the likes of Microsoft, the likes of Apple, releasing
their patches now. There`s then the matter of the specter flaw. And there is no fix, comprehensive fix, for the specter flaw as yet.
[16:45:00] The good news, when it relates to the specter flaw, though, is that it`s incredibly difficult, costly and time-consuming for a hacker to
exploit that flaw. So, researchers I`ve been talking to say that, yes, they do expect software fixes for specter in the future, but they do believe
that ultimately, these chips will need to be replaced.
QUEST: But they can`t be. That`s the point here, isn`t it? They can`t replace these chips, in all the existing devices, and the millions of
devices waiting in shops around the world at the moment.
MCLAUGHLIN: Yes. And one of the researchers I was talking to said, you know, really acknowledged that. But he did point out, again, that that
specter flaw is incredibly difficult to exploit if a hacker wants to exploit that flaw, it has to go after each and every device, which is
costly and is time-consuming. So, you know, his advice, this researcher was telling me, to the average consumer is don`t panic. You should be OK. As
long as you practice safe computer usage, you update your security on your devices, specifically relating to that meltdown flaw, Richard.
QUEST: Erin, good to see you. Thank you for staying late on a Friday to talk to us.
As we continue after the break, the U.S. sees a different tourism. New figures show Donald Trump`s America perhaps is having some difficulties. We
have the CEO of Dream Hotels. Come and join me, sir. Going to join me in the C suite after the break. We`re going to be talking tourism and hotels.
Come over here.
QUEST: So, the quick question, as America lost its allure for tourists. New government figures show visitor arrivals fell 4 percent in the first half
of last year. Many reasons are being given, obviously, perhaps some would suggest that the U.S. is not as welcoming to foreign visitors since the
change of administrations and president Trump took office. Dream hotels is looking to expand into new markets beyond. The CEO of dream hotels, Jay
Stein, is with me. Good to see you, sir.
JAY STEIN, CEO, DREAM HOTELS: Thank you.
QUEST: Let`s start with the down side, in a sense in that this falloff of numbers, 4 percent, it`s the first concrete proof that maybe people are
staying away, because the U.S. is not perceived to be as welcoming as it once was to tourists.
STEIN: Yes, I think it`s true. I think -- I travel a lot internationally, and I do hear from people that it`s difficult to get their visas. They feel
it`s not as welcome as once was. So, I`m -- I think there is some truth to that. Now, as you said, there are many other factors. Brexit and the dollar
-- the dollar goes up and down. But certainly, I think the trend over the last year, this issue about not being as welcome is --
QUEST: How worrying is that? Because you`ve got a really good expansion plan under way. Now, it won`t necessarily affect that. But it`s not
[16:50:00] STEIN: Not helpful. I don`t think it will have that much impact. I still think there is ebbs and flows. America is still a place where
people do want to come. So, we have a lot of product here and a number of things internationally we`re looking to grow. We are strong in Asia, we
launched our first deal in the U.K.
QUEST: Is that where your focus is going to be, outside the U.S.?
STEIN: U.K. and Europe. Asia and the U.S. is our main focus. And Middle East.
QUEST: I saw during the week Disney has decided it`s not going to be putting do not disturb signs on its rooms. It follows on, of course, from
the Las Vegas incident. Is this something you would consider, just putting a room occupied, but still sort of allowing staff to knock on the door?
STEIN: Definitely. We have been doing this for some time already. If a guest stays, for the second day with a do not disturb sign, we would call
and ask if we could come and give service. By the third day give service automatically and let them know we need to come into the room.
QUEST: Would you bring that forward? Because at the moment, what you`re saying is a call on the second day and an entry on the third. Would you
bring that further up?
STEIN: Yea, we were talking about it. We are open to revising our policy on that, as well. I think it`s good. I think it adds safety for the guests,
safety for the employees, safety for the neighborhoods that we`re in. And, you know, the world is changing. So, I think the guests will understand it.
QUEST: You say the world is changing. And we see that so clearly in hospitality with a sharing economy. I`m aware, obviously, from CNN business
traveler, that hotels believe that the Airbnb of this world, the sharing economy has grown the cake and they`re not really taking business. If you
look at the latest surveys, suggest rates remain high and business hasn`t been taken. But many hotel companies are looking to get into some aspect of
the sharing economy.
STEIN: Yes, that`s not for us. That`s not what we do. They have taken some share, and nobody likes to lose any share. But they have their own issues
now with restrictions in government policies that perhaps they didn`t follow exactly, the way it should have been initially, Airbnb is forcing to
QUEST: What`s your weapon to fight back?
STEIN: That`s easy.
QUEST: Because, you know, look at the last -- the major survey. It has -- the price differential is really quite extraordinary.
STEIN: Our core guests are looking for fun, they`re looking for excitement. We have great food and beverage. We have unbelievable night life, great
places to meet and socialize. So that environment, you`re just not going to find at an apartment around the corner somewhere. So, we differentiate our
hotels very differently than just a plain big box hotel or a select service hotel. So, we offer something very different.
QUEST: Even within that, what you`ve just said, you know, beautifully exemplifies the difficulties now within hospitality, and the opportunities.
Because when you`ve got Marriott with 30 different individual brands and IHG opening new brands and lifestyle brands, it gets more difficult for
smaller chains like yourself, arguably, to compete, but you were telling me it`s more -- gives you more opportunity.
STEIN: 100 percent. They can`t do what we do. They`re not as nimble as we are. They don`t have the background we have. We`ve been doing lifestyle
hotels for over 20 years. We have access to do partnerships. We don`t really bring just the formula and try and repeat it. Each market we go in,
we look uniquely to it and make sure we design our amenities to that market. Whereas big brands look to take a formula and roll it out.
QUEST: But you are going for different brands, aren`t you? You are expanding your brand.
STEIN: We have four brands.
QUEST: Yes. You`re playing that.
STEIN: Well -- we didn`t want to go to the market and only have one option, and have 90 percent of the people we talk to not have the ability to do
what we offer. Dream brand requires significant food and beverage, a lot of public space is needed, most hotels don`t offer that. Or they`re not even
in the right market. So that why we offer time, we offer scripted which goes great in secondary market. And Chatwal which is our luxury brand.
QUEST: Book me into that rather nice-looking suite of there.
STEIN: You got it.
QUEST: Friends and family rate. Not paying any of those high rates.
STEIN: You talked to the right guy.
QUEST: I know a friend. I know a man in the business. All right. We will have a Profitable Moment after the break. QUEST MEANS BUSINESS, the markets
at record highs.
[16:55:00] (COMMERCIAL BREAK)
QUEST: Tonight`s very Profitable Moment. The marked roared up 220 points, the Dow 30 shows just a sea of green. All of the three major indices are at
record levels. But this morning`s "The New York Times" drew my attention. An article by James Stewart this morning. The Dow hits 25,000. The party
will end one day, but when? And that really is the issue that everybody is talking about. Yes, the market has rallied 25,000, 4 for 4 for the S&P and
Nasdaq this week. The Dow has had three records, and we`re only in the first week of trading.
We sort of know it`s going to come to an end. But when? The reality is, there`s no inevitability to a crash happening. What we really need to see
now is concrete going into the market. An element of consolidation at these high levels. Because the truth is, unless we start to see that in the weeks
ahead, well, it`s going to be a case truly of the party will end one day, but when?
And that`s QUEST MEANS BUSINESS for tonight. I`m Richard Quest in New York. Whatever you`re up to in the weekend ahead, I hope it`s profitable.