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QUEST MEANS BUSINESS

Dow Surges on Hopes for Trade Talks; E.U. Harsher Measures against Russia Could Come Soon; U.S. Federal Trade Commission Investigating Facebook; U.S. to Expel 50 Russian Diplomats Over Poisoning of Ex-Spy; Fire Exits Blocked in Russian Mall Devastated by Fire Kills 64; Stormy Daniels Details Alleged Trump Affair; Day One of Voting Ends in Egypt Presidential Elections; Oil Hovers Near $70 a Barrel Amid Middle East Tensions; Chinese Oil Futures Begin Trading in Shanghai; Qantas Airline Makes a Historic 17- Hour Nonstop Flight from Perth, Australia to London; Bill Gates Publicly Rebukes Nigeria's Leaders; Kenya Regroups after a Divisive Presidential Election; Remington Files for Chapter 11 Bankruptcy. Aired 4-5p ET

Aired March 26, 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]

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RICHARD QUEST, CNNMONEY EDITOR AT LARGE: Off the highs of the day but still a very impressive performance by the Dow Jones industrials, the third

largest points gain on record. (INAUDIBLE) never looked back. All of the markets are similarly higher.

And I guess that's an OK sort of gavel to bring trading to a close on Monday, it's March the 26th.

Tonight, China's ready to talk. Investors are ready to buy. Stocks are soaring on hopes of a trade war breakthrough.

The Russian diplomat sent to coordinate kicked to the curb, now Europe says more measures will follow.

And Facebook shares continue to fall, it's officially -- the company is officially under federal investigation. I'm Richard Quest, live from the

world's financial capital, New York City, where the markets are rallying, I mean business.

(MUSIC PLAYING)

QUEST: Good evening. Tonight, after shedding a thousand points last week, the Dow is roaring back. It has rallied more than 600 points, one of the

biggest points gains in history. Look at the numbers, 670. Off the tops of the day but still a most impressive performance.

It's all on hopes that a trade war with China can be averted. And on an extremely busy day across all continents. Tonight I'll speak to Sweden's

former prime minister, Carl Bildt, as Europe and America unite against Russia.

You'll also hear an exclusive interview with Bill Gates, who says Nigeria's leaders must do better. I'll be joined in the studio by Kenya's central

bank governor. We'll talk about the Kenyan economy at a time of political turmoil.

We begin on Wall Street. Now U.S. soared higher after three sessions of heavy losses. Join me at the trading post and you see what I mean. No

records for the Dow or for the European forces but this was the biggest percentage gain in some 3.5 years, 2.8 percent on the Dow, S&P up 2.7

percent and over 3 percent on the Nasdaq, which means damn the man, the red lights are green today, full green lights because you got strong

performances.

And, indeed, over 24,000 for the Dow. All the sectors up by at least 1 percent. The tech, the financial, the consumer stocks, up 3 percent or

more. And the reason, perhaps, fears of a trade war subsiding, both sides talking tough in public, negotiating in private.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (through translator): We have always maintained that China is willing to negotiate with the United States in accordance with the

principles of mutual respect to quality and mutual benefit properly manage differences.

We always keep open the door to dialogue and consultation.

(END VIDEO CLIP)

QUEST: Now we need to understand these machinations because a market that can lose 1,000 points at the end of last week over two sessions and then

rally 600 or 700 points, the perverse nature of this investing economy needs further explanation.

Patrick Gillespie is tracking the trade data.

When we left on Thursday and Friday, the worry was, with the tariffs on China, things were getting worse.

What really happened?

PATRICK GILLESPIE, CNN CORRESPONDENT: Richard, Wall Street is beginning to believe that Trump's bite on trade is not as bad as his bark. Let's think

about this. Throughout the month of March, we've had numerous, huge extreme threats that get rolled back.

You've got the steel and aluminum tariffs, looked like every country was going to get hit by them. Then Europe and six nations got exemptions.

Think about this, Richard, 70 percent of the steel that comes here into the United States is getting exempted from those tariffs.

(CROSSTALK)

QUEST: Only temporary exemptions, only temporary. Some of those could -- I mean, Australia, where I've just --

GILLESPIE: -- temporarily indefinite.

QUEST: True. All right.

GILLESPIE: Let's think about this. NAFTA, President Trump has routinely said we're going to tear up NAFTA.

What did Peter Navarro, the White House adviser, say today?

We're going to get a good deal on NAFTA. So you're constantly getting this very dire rhetoric that gets diluted down on trade action.

QUEST: Art Hogan, chief market strategist of B Rally FBR (ph), joins me from Boston.

Art, listen to what Patrick's just said. The idea that you get this very position that's then watered down, you do end up with that pendulum effect

in the markets. You take shock on Friday and recover on Monday.

ART HOGAN, MARKET STRATEGIST: Yes, you sure do and it's interesting, you know, I think Patrick nailed it. You have the -- you lead with your strong

hand, right?

Steel and aluminum tariffs on the world and then you start carving out Canada, Mexico and a host of other countries, hoping the same thing is

happening here with China. Very tough talk; $60 billion worth of Chinese goods --

[16:05:00]

HOGAN: -- we're going to put tariffs on them and now we're going to negotiate behind the scenes. That's the best-case result.

If we can get to negotiations, nobody wants tariffs and nobody wants trade wars. China is not a free and fair trader. But we certainly don't want to

start a trade war with them and have retaliation.

So I think this would be the best-case scenario and that's exactly why the market reacted the way it did on Friday and is bouncing back today.

GILLESPIE: We're getting multiple, not just the markets but you're getting Boeing, Starbucks, Nike, what do they all have in common?

Their second biggest market is China. And they're all up 2 percent today. So it's not just all at the broader macro market level. It's also at the

individual company level. Companies and their investors feel much more confident and eased about possibility of no trade war.

QUEST: So Art, when the president this morning tweets that the U.S. economy is in the best shape it's been in, corporations are in the best

shape that they've been in, he is technically correct?

HOGAN: Yes, to an extent, when you think about they have got a lower corporate tax rate. They've got a pile of cash for the most part on most

balance sheets and you've got an economy that both in the United States and all of the developed world is in expansion.

So I would agree with the fact that they're in a very good place right now, both global economic growth is very strong; earnings estimates for 2018

look very good. Then as we look at the fundamental backdrop, that is correct.

What could call that into question?

Making a trade mistake. A trade policy mistake, either walking away from NAFTA, which looks like we're backtracking on, could take 50 basis points

out of GDP growth this year. So not making a trade mistake is imperative here. But the ascertation (sic) that corporate America is in good shape, I

think is true and I think a lot of that has to do with the global economy.

QUEST: All right, but, Patrick, on this question of trade, global economy, if you're saying that the president cries wolf and then everything

automatically gets better thereafter, it won't be long before the market takes that into account.

But --

GILLESPIE: He's losing some of his credibility on threats. And these are what economists are saying is that as we get these trade actions that

continue to be diluted down, again, he threatened to terminate the South Korean trade agreement.

What did we get today from South Korea?

We have a new deal that economists say is, on paper, not particularly different than the one they originally negotiated five years ago.

QUEST: Patrick, we'll see you.

Art, last one to you and the issue -- look, in February, it was a torrid month when volatility was the story of the day. Now we're back in that

position again.

Whether we blame it -- whether the blame is put at the White House or economics or North Korea, would you say to our viewers tonight that

volatility remain the story for pretty much the rest of the year?

HOGAN: I certainly think that's the case. I think volatility -- first and foremost, we didn't have any volatility at 17, so it feels a lot greater

than it is. But I think that our concerns right now, in a very good economy with a very strong fundamental backdrop, is we're going to make a

mistake either on monetary policy or trade policy.

And we've come close on both those things. We're watching that very closely.

QUEST: Patrick, thank you.

Art Hogan, thank you very much, indeed.

Now the West is uniting against Russia. The U.S., E.U. and Canada have expelled more than 100 Russian diplomats. It is in response to Moscow's

alleged nerve agent attack on British soil.

You'll be well familiar with the allegation the Skripals were -- attempted to murder them with this nerve agent in Salisbury in the United Kingdom.

Well, this coordinated effort, it shows support for Britain. These are the numbers of diplomats that the country is expelling. That's the highest

number, by the way, that the U.S. has ever expelled in one go.

Across the European Union, I think it's 14 member nations now have expelled. The U.K., of course, is the highest at 23. And that has already

been met by tit-for-tat. But the ones to note are Germany at four, France is also at four, Spain at two, Czech Republic at three.

Also, Donald Trump, besides losing 60 from the embassy, is closing the Russian consulate in Seattle. And Iceland, which is also doing a

diplomatic boycott of the World Cup. The council president of the E.U., Donald Tusk, says more could be coming to punish Russia.

(BEGIN VIDEO CLIP)

DONALD TUSK, PRESIDENT, EUROPEAN COUNCIL: Additional measures, including further expulsions within the common E.U. framework, are not to be excluded

in the coming days and weeks.

(END VIDEO CLIP)

QUEST: The U.S. and E.U. do have more options if they've got the stomach to do it. A huge number of wealthy Russians live in London. There could

be asset freezes and travel bans that could directly impact the people helping to keep President Putin in power.

Although the person responsible for managing sanctions in the U.K. has specifically said you can't just sanction somebody because they're Russian.

There have been longstanding calls for a --

[16:10:00]

QUEST: -- crackdown on money laundering. Lawmakers (INAUDIBLE) creating international version of the Magnitsky Act, which has allowed the U.S. to

go after corruption around the world.

And in 2014, sanctions over Crimea hit Russian banks. Arms makers, tech companies and oil. But not Russian gas. Now the E.U. has admitted these

sanctions do hurt Europe's economy. So the market reaction tells you where the weakness may be in all of this.

European markets turned red with companies with exposure to Russia all falling, (INAUDIBLE) Zeeman's were down some 1 percent. And that's

interesting when you look at what the European bosses did because they'd seen New York was positive but still did not manage to rally.

Carl Bildt is the former Swedish prime minister, he joins me now from Stockholm.

Carl Bildt, when we look at this, this is a very impressive performance by Europe and the United States that's taken quite a bit of negotiation to get

a coordinated response.

CARL BILDT, CO-CHAIR, EUROPEAN COUNCIL ON FOREIGN RELATIONS: It is a rather massive reaction that is coming, coordinators, as you say, across

the Atlantic. So it's taken some days. But that is fairly logical.

I think it also is a reaction, virtually what happened, needless to say. And the reaction is that the way Russia has reacted to it that they have

completely ignored everything and not been ready to cede anything but treated the accusations more with disdain. And now the reaction that we've

seen here is really a demonstration of how seriously this is taken not only by the U.K. but by virtually every single European government.

QUEST: To the question that would the U.K. have been able to get this response, this coordinated response, if she'd been out of the European

Union?

Some are suggesting that she would not have been able to because Theresa May would not have been at the summit meeting and, therefore, could not

have made the personal case.

But that would greatly weaken Europe's position, wouldn't it?

BILDT: It would have been (INAUDIBLE) differently if they had been outside. Now I think there was -- I think deliberately also a

demonstration by the European countries that in spite of the fact that the U.K. is leaving, this affects us all.

So I think it (INAUDIBLE). And the fact that there is somebody who was there, be able to directly (INAUDIBLE) the leaders of the different

European countries, argue the case and perhaps the details that are not available to the public domain.

I think that was important.

QUEST: Would you expect other E.U. countries to be prepared to go further?

Now we're obviously waiting for the response from Russia. We expect some form of tit-for-tat on the initial expulsions.

But this was a very serious, albeit, allegation, attempted murder, which could have had dramatically dreadful consequences on a much wider scale.

So do you think leaders in Europe are prepared to do more?

BILDT: I think they are prepared to do more because you should see it in the broader context. We had the Litvinenko murder, polonium in that

particular case in 2006, was a fairly strong reaction to that.

But obviously not enough. In order to prevent those that are responsible for this. And you would assume there would have to be sort of a political

responsibility fairly high up. It didn't prevent them from doing another similar thing, not polonium in this particular case but a nerve agent.

Is there not a very strong reaction now. I mean, no European country can be certain that this will not happen on their soil tomorrow

QUEST: Carl Bildt, you have studied this, you know the Russians, you've looked at this in detail.

Putin, President Putin, must have known, assuming that he did have knowledge of this, that there would be a strong reaction.

Why do you think he would have or would anybody in Russia have engaged in this attempted assassination in the first place?

What did they stand to gain?

BILDT: I think they probably stand to prevent further lawsuits perhaps. I think the message is not primarily to the U.K. I think the message is

primarily to other people that are serving in the Russian security intelligence services, that they should know that they will be treated by

polonium or nerve agents wherever they are.

I think that's the purpose of the entire exercise. Then that particular policy line, it included alliances to kin (ph), is almost certainly

authorized at the very highest level in Russia. We've had sort of public pronouncement by President Putin previously on how he looks at these

particular cases. Whether he knew the exact details, the timing --

[16:15:00]

BILDT: -- that's a separate issue.

QUEST: Carl Bildt, thank you.

And by the way, we did enjoy hearing the dog -- what's the dog's name?

The dog's name is Pixel. Yes.

QUEST: Pixel. Give Pixel a treat from QUEST MEANS BUSINESS.

Thank you.

BILDT: I will do that. Thanks very much.

QUEST: Thank you.

Now as we continue tonight, Pixel and all, U.S. regulators, actually appropriate, Pixel, talking about Facebook and the like and the digital

economy. The company's crisis is intensifying with new revelations about how it handled your data. We'll find out a little bit more about this and

get to grips with it after the break.

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(COMMERCIAL BREAK)

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QUEST: Facebook is under intense scrutiny now that the regulators are stepping in. The U.S. Federal Trade Commission has confirmed it is

investigating Facebook's privacy practices. On the news, Facebook shares tumbled more than 6 percent at one stage.

The shares revalued late in the day and they are riding the wave of market euphoria. Facebook and its CEO spent the week last week apologizing for

the way it handled the revelations about Cambridge Analytica.

CNNMoney's Dylan Byers is following the developments from Los Angeles, joins me now.

There are two tracks here, aren't they?

There are the official, the FTC investigation, the calls for Facebook to testify before Congress. And then you've got the idea of dump Facebook and

ordinary people's reactions.

Which is more damaging at the moment for the company, do you think?

Where is the company drawing that line?

DYLAN BYERS, CNN CORRESPONDENT: Well, it's a very good question, Richard. I think they're concerned about both. I actually think the question about

users, actually using the platform is ultimately the more important question.

In many ways, Facebook might be too big to fail because they have so many users, more than 2 billion around the world, and they have so much money.

So at the end of the day, an FTC inquiry, various government regulations, they can sort of curb Facebook. They can fine Facebook.

If users drop off in a massive way, that is much more damaging to the platform ultimately. Of course, FTC, Congress, regulations in Europe could

affect that change. But again, so many users, can you really put a dent into the Facebook business model given the amount of users that they have?

QUEST: Look, Dylan, I tried to fully understand unsuccessfully, I might add, the whole Cambridge Analytica, who did what, where, when and why, but

if you boil it down to the basics for the simple like myself, what is it that people are annoyed about here?

Because we know that Facebook has been gathering material. We've known for years that the privacy settings have been complex to the point of

banality. So what is it that they've done?

BYERS: You know, Richard, it's a --

[16:20:00]

BYERS: -- phenomenal question. The truth is we have known that for a very long time. But we haven't quite come to terms with it. We have sort

of been in a state of willful naivete, believing that Facebook and Google and other platforms that relied on our data and that harvested our data

were good stewards of that and that they kept that data safe.

What issues like Russian meddling, the Cambridge Analytica scandal, even today we're seeing a new controversy for Facebook, that they might have

scraped data from Samsung phones, all of that reinforces this idea that Facebook is actually not a company you can trust.

And the hardest thing for Facebook going forward is that they are trying to continue being Facebook, continue being a company that uses our data,

harvests our data, gives our data to third parties while simultaneously saying, even though you couldn't trust us in the past, you can trust us

now. It's a very hard argument to make.

QUEST: Good point. Thank you, Dylan joining us from Los Angeles.

And let's continue with that point that Dylan was talking about, the Samsung phones and the harvesting of data.

Android users are furious after Facebook revealed is collected data on phone calls and messages from some users. It affects people who installed

Facebook Messenger or Facebook Lite. CNN's Samuel Burke is in London and sent this dispatch.

(BEGIN VIDEOTAPE)

SAMUEL BURKE, CNN CORRESPONDENT (voice-over): Facebook is keeping records of every phone call and text message you've sent. That's the surprise some

Android users are disc g as people across the globe start taking a closer look at the data tech companies are collecting about all of us.

BURKE: If you want to see everything that Facebook knows about you, just go to the upper right hand corner and scroll down to settings. That'll

take you to this page, where you'll click, "download a copy of your Facebook data," then click "start my archive" and Facebook will email you a

copy of all the intimate details the social network knows about you.

BURKE (voice-over): Inside that file, Android users are seeing Facebook has been collecting logs of all their phone calls and text messages for

years. Android maker Google hasn't responded to our requests for comment but Facebook says Android users explicitly opt in for this feature when

they download its Messenger app or a slimmed down version of the social network, an app called Facebook Lite.

Facebook says they do this so Android users can find people more easily but they don't explain why they take the extra step of saving the data on

their servers. Users who don't realize they've been sharing this data are getting a rude awakening when they delete their Facebook accounts and look

through this archive data for the first time.

"Oh, wow, my deleted Facebook zip file contains info on every single cell phone call and text I made for about a year. Cool. Totally not creepy."

Even users who don't have the main Facebook app on their phone are finding out they've given over their call and text message logs, too.

"Don't have Facebook installed but I do use Messenger and Instagram. Interestingly they only tracked when I rang my parents and girlfriend.

I've never used Messenger in regards to my parents. Weird."

A new Reuters Ipsos polls shows that only 41 percent of Americans trust Facebook to obey U.S. privacy laws.

BURKE: Facebook says you can opt out of this feature at any time and they'll delete all the call and text message logs they have saved about

you. To do that, Android users will have to go to home, tap on their profile picture, then tap People and under "synced contacts," that setting

can be turned on or off.

And with the tech giant under scrutiny, every piece of data we share with the company knowingly or not is getting a second look -- Samuel Burke, CNN,

London.

(END VIDEOTAPE)

QUEST: Facebook's data collection isn't always obvious. This is the point. This is Cow Clicker. Now a satirical game released eight years

ago. Even the creator would agree, perhaps, it was a silly app that became surprisingly popular. Literally you clicked away on the cows and the game

was milking its users' personal data from Facebook. (INAUDIBLE) is the professor at Georgia's Institute of Technology who wrote the game and still

has the player data on his server.

So look, assume I know virtually nothing about the data collection process. What were you getting back from Facebook, from the people who used your app

or the friends of people who used it?

What sort of data were you able to retrieve?

IAN BOGOST, GAME DESIGNER: Right. So when you authorize an application like Cow Clicker on Facebook, you say I'm going to use this app, you get a

little dialogue and you say, yes, I'm ready to use the application.

Facebook starts sending me data. And that data includes your name, your profile picture, your gender, your friends list and anything else that you

might have made public.

This was true at least at the time when I made this game in about 2010. So if you had exposed your birthday publicly, then I would have received that,

too.

And it's kind of important to understand --

[16:25:00]

BOGOST: -- just how brazen Facebook was in presenting that data to developers like myself. The moment that you access the app, every single

request from Facebook to a third-party application, which is hosted remotely, gets this bundle of data like that, which then I had access to in

part to run the program.

QUEST: Right, now, so, what about those other sites where you log in using your Facebook name and your Facebook login details, were you getting data

from that?

BOGOST: Yes, so if you use -- it was called Facebook Connect or you have these other choices for logging in to separate websites -- and there were

so many different types and methods of connecting to Facebook with applications at different periods in time, all of them had access to

different kinds of information --

(CROSSTALK)

QUEST: Now so far, the data that you're talking about is -- I don't want to minimize it but it's certainly rudimentary. My name is Richard Quest.

I'm 56 years old and I live in New York. I'm male and -- where does this start to get tricky?

Where does it start to get personal?

Where does it start to get uncomfortable?

BOGOST: So one of the pieces of data that I had access to was work or educational affiliations as well an identifier, a numerical identifier for

your Facebook user account. You take that, you take your name, your full name and because the Facebook user I.D. had the capacity of being used

anywhere else on Facebook, I could take that information, at least in theory, combine it with other information then retarget you on Facebook.

QUEST: Right. Now this is the core point, though. What use is that information when sold or given to another developer?

This is one of the things I'm having difficulty understanding. You get 150,000, 200,000 names.

What do you do with it?

BOGOST: Well, one of the reasons people are so concerned about this Cambridge Analytica situation is because that retargeting sold political

messages that then were addressing people and maybe attempting to manipulate their opinions because all Facebook's business is built on

advertising just like that, the capacity to then address new information and to take the materials you've already shared with application developer

like me, I could then combine that with offline data, too, from other data brokers and either use that to address you on Facebook or to advertise to

you in different ways offline.

QUEST: To the point I was just asking, to the point we've known that Facebook has been doing it. They're not the only ones doing it. Twitter

does it. Instagram, they all do it in some shape, form or description. All doing it.

Is there an element of naivete about us in not thinking, hang on, of course they're doing it?

BOGOST: I think people were misled to some extent but also they didn't fully understand what Facebook was doing. When you went to an application

like Cow Clicker on Facebook it appeared, to the average user, that they were never leaving Facebook. I don't think a reasonable person might have

known that they were even sharing that data with me.

I'll just look like Facebook to them.

QUEST: And finally, Cow Clicker.

Does it still exist?

BOGOST: It still exists. You can still play it and click -- it's a kind of complicated but you -- the cows are gone but you can still click.

QUEST: Hang on. The cows have gone but you can still click.

BOGOST: Yes. I shut the thing down in 2011 in this cow rapture and people sometimes still click where the cows used to be.

QUEST: Right. I think that's worth a moo, if ever there was one.

So I can play a game with a cow -- thank you. I can play a game with cows without the cows.

Good to see you, sir. We're going to come back to you again in the future, to help us understand what exactly they've been up to. Thank you, sir.

As we continue, it's not every day there is history on the international oil markets. Brent and West Texas now have new competition from China.

We'll talk about it after the break. It is QUEST MEANS BUSINESS, we're live tonight, as always, from New York.

(COMMERCIAL BREAK)

[16:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I'm Richard Quest, there's more QUEST MEANS BUSINESS in just a moment. Well, Bill

Gates tells his wife Nigeria's leaders have to do better.

It's an exclusive interview and you'll hear it on QUEST MEANS BUSINESS. And a 200-year-old American gun company goes bankrupt days after a giant

march for gun control.

As you and I continue tonight, this is CNN, and on this network, the facts always come first. President Trump has ordered the expulsion of 50 Russian

diplomats, it's a response to Moscow's alleged use of a nerve agent to poison a former Russian spy in the United Kingdom.

The European Union countries, Canada and Ukraine were also expelling Russian diplomats. Russia's ambassador to the U.S. has called the

expulsions a grave mistake. Officials say fire exits were blocked and an alarm system was turned off at the Siberian shopping mall that caught fire

on Sunday.

It's now at least 64 people were killed and many of the dead were children. Domestics say the blaze started on the building's fourth floor near a

cinema and children's play area. Some 10 people are still missing.

The porn star Stormy Daniels is suing Donald Trump's lawyer Michael Cohen for defamation. Daniels went public on a "Cbs" show "60 Minutes" with new

details about an affair she claims she had with President Trump in 2006.

The White House says Mr. Trump continues to deny the affair. Daniels' lawyer says to expect more evidence of the election affair in the coming

weeks. The first day of voting is over in Egypt's three-day presidential election and polls closed in the last hour.

The incumbent President el-Sisi, and he is facing only one challenger, multiple candidates say they were squeezed out of the race. The winner

will be announced Next Monday.

Tensions in the Middle East are pushing oil prices to around $70 a barrel, as for the brent crude, just off of that, but it's the 70 that's the

important number. In spite after Saudi Arabia and just started a missile attack from an Iranian-backed rebel in Yemen.

Now comes on a historic day for the world markets. Until now, the main blends have been brent crude for the north sea, and then the west Texas

intermediate here in the United States.

So you have brent and west Texas and between the two of them, there was pretty much -- that's the ones that you bought. There's competition on the

horizon. Chinese oil futures began trading today in Shanghai.

Antoine Halff is a former chief oil analyst at the IEA, joins me now to talk about this interesting development. Why did the Chinese decide that

they ought to have the Shanghai blend encroachment as a benchmark?

ANTOINE HALFF, FORMER CHIEF OIL ANALYST, IEA: Well, the Chinese have biggest importer of crude, but they've been relying on benchmarks and

exchanges in the U.S. and Europe.

So they wanted to bring it home to better price crude near the market that was consumed.

QUEST: Right, so where is this crude that will follow the Shanghai blend coming from?

HALFF: Well, its importer --

QUEST: From where?

HALFF: From everywhere. The Chinese are the biggest importer, they import from Russia, they import from Africa, they import from the U.S. They

produce -- their last producer, but they're not importer.

QUEST: Right, now, if you're importing from the Gulf or you're importing from Russia, you will more often than not use the chart, the brent blend as

being the benchmark price reference point.

HALFF: It could be the brent, it could be the WTI, it could be the Oman, Dubai mix of benchmark --

[16:35:00] QUEST: So how are you going to get people to adopt the Shanghai blend?

HALFF: Right, that's a big question in terms of participation in the exchange, right now today, the launch was a huge success domestically,

right, the volume was huge, the price were not rapidly -- the question is with the international market participants joining -- it's an R&B

denominated contract.

So that involves a foreign exchange risk --

QUEST: Which is denominated in R&B?

HALFF: Right --

QUEST: The moment -- now, I mean, you just talked with respect, you just talked the kiss of death onto it, haven't you? In the sense that you're

asking a blend on a market that is regulated by the Chinese to just who knows to what standard.

It's denominated in a currency that floats and in somewhat constrained circumstances. Why would anybody want to go with that?

HALFF: Well, it's a challenge, but quickly interesting. Because again -- because it's going to be a very liquid market probably. It majors in China

participating but also moment in part, and even like in Japan for product market, yes.

QUEST: Let's talk about Russia, yes. The ability of Russia to use gas as a geopolitical weapon, particularly over the scruple incident, the

attempted murder of the spy in London.

Could you see a scenario -- I mean, we're kind of out of Winter now, so the same stranglehold doesn't exist. But can you see a scenario where Russia

gas pump will do what they've not done before, which is turn off the dabs.

HALFF: Well, they've done it with Ukraine.

QUEST: Right, but I mean --

HALFF: Right --

QUEST: That's the exception.

HALFF: Yes, I don't really see it. I could see them trying to pretend they might, but I think they depend on the exports, they depend on the

money, and it's not the tight-enough market. There's plenty of gas, not quite as much of a gloat as people now feared a year ago, two years ago.

It's a tighter market than people expected, but it's not so tight that any kind of threat could really run the market.

QUEST: And the prices though we're seeing at the moment, brent at 17, WTI slightly less.

HALFF: Right.

QUEST: Is that based on fundamentals at the moment or speculation because you know, you have got obviously non-traditional fracking in the U.S. which

has --

HALFF: Right --

QUEST: Kept prices down.

HALFF: Yes --

QUEST: But you have these other factors, particularly Saudi Arabia, Yemen pushing prices up. So what -- how would you gauge that price?

HALFF: So it's the opposite from the -- from the gas, Russian gas situation. It's both fundamentals and speculation. The fundamental market

has tightened dramatically. There's been a huge straw and inventories over the last six months or eight months.

As a result, the OPEC have minus much, but also very robust market(ph). So in this context of tightening markets, concerns about the Middle East,

concerns about the Iran and nuclear accord falling apart, concern about Venezuela falling apart as a country are having a bigger impact on the

market.

QUEST: Good to see you, sir, thank you for coming in, thank you very much indeed. Now aviation continues to amaze with innovation on world first,

and that includes the first scheduled non-stop flight from Perth to London at the weekend.

According to this flight QF9, where we pushed back on Saturday night, there it was, the aircraft, I was onboard for the 17 hours, 2-minute trip of more

than 9,000 miles -- yes, before you ask, I was at the front.

It was an amazing experience, and everybody thoroughly enjoyed it on board. It was history making even though there had been other aircraft that could

do this route, they wouldn't have been economic.

The Dreamliner was the first that could do it profitably, and it was a big moment for the Qantas chief exec.

(BEGIN VIDEO CLIP)

ALAN JOYCE, CHIEF EXECUTIVE OFFICER, QANTAS AIRLINE: Oh, I feel very proud, very proud of Qantas, very proud of our people, and it's a very

historic occasion. And you know, I think everybody onboard is feeling the history.

When the aircraft took off, there was a big round of applause which you don't usually get on an aircraft. So, I think this is an amazing moment.

(END VIDEO CLIP)

QUEST: Yes, we both are wearing the Qantas special Dreamliner pajamas which was quite something else. Coming up, I'll be on the next business

traveler as I follow the original kangaroo route from Australia to London.

You can see both journeys next month. As we continue a rare public review for Nigeria's leaders by the billionaire philanthropist Bill Gates, and

we'll have 10 years --

PATRICK NGUGI NJOROGE, GOVERNOR, CENTRAL BANK OF KENYA: Yes --

QUEST: As central bank coming up. What's troubling the governor and join us after the break.

NJOROGE: Thank you.

[16:40:00] (COMMERCIAL BREAK)

QUEST: Billionaire Bill Gates says Nigeria's leaders must do better to investing in the country's young people. Mr. Gates is warning that what

they're doing now just isn't good enough.

In a rare rebuke, as CNN's David McKenzie brings us this exclusive interview.

(BEGIN VIDEOTAPE)

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: This is where Bill Gates is quietly spending more than $1.6 billion of his fortune. His money

helping to eradicate the scourge of polio in Nigeria, but grinding poverty remains.

And for many, an excellence of political leadership.

BILL GATES, FOUNDER, MICROSOFT CORPORATION: As a partner of Nigeria --

MCKENZIE: So the once silent partner is speaking out.

GATES: You know, I am saying that the current plan is inadequate.

MCKENZIE: Directed squarely at politicians. The public rebuke is a rare departure for Gates and his foundation, but it comes at a critical time.

Africa's biggest economy is heading into the 2019 elections with the continent's largest youth population, maybe 8 million of them are

unemployed.

Why are you thinking that it is good to give hard facts to Nigerian leaders right now?

GATES: Well, Nigeria has all these young people, and the current quality and quantity of investment in this young generation, the health and

education just isn't good enough. And you know, so I was very direct.

MCKENZIE: Out on the streets they say, the government is often absent or present in the form of an official asking for a bribe. Nigeria is rated

one of the most corrupt countries.

So you know, what do you think of the message that Bill Gates is bringing here?

UNIDENTIFIED MALE: Bill Gates is saying the truth.

MCKENZIE: Most of the trendy works in a bank near the market. He says vendors like this woman selling efo don't have steady electricity, and they

can't access loans.

All these people are trying to survive, and are they being helped?

UNIDENTIFIED MALE: No, people are struggling to survive every day.

MCKENZIE: The government says it has welcomed Gate's message and is working to do better for the people. A population that by 2050 will be

bigger than in the United States.

Do you see the potential for Nigeria when you visit people in this country and go out onto the streets?

GATES: I really do think that all the countries I've seen, it really hangs in a balance. If they can get -- have an education right, they will be an

engine of growth, not just themselves, which will be those 400 million people, but for all of Africa.

MCKENZIE: Moses says Nigerians don't need to be given much to succeed.

UNIDENTIFIED MALE: We are frustrated, yes.

MCKENZIE: If they could just be provided with the basics. He says the talents of Nigerians will shine through. David McKenzie, CNN, Lagos.

(END VIDEOTAPE)

QUEST: That was inside of the African continent. In Kenya, the political angst of (INAUDIBLE) starting to ease off. Two weeks ago, the newly

elected President Uhuru Kenyatta shook hands with the opposition leader Raila Odinga. It was a symbol of unity after a turbulent election.

The country has now focused on economic progress. Patrick Ngugi Njoroge, the governor of the Central Bank of Kenya, he joins me now. Governor, good

to see you, sir --

[16:45:00] NJOROGE: Good to see you.

QUEST: And tell me how damaging economically -- we will take you into the political sphere, economically, how damaging to the country's economy was

it to have the political upheaval?

NJOROGE: The political upheaval was damaging primarily because you had the -- a sort of a -- a lot of investors adopted a wait-and-see attitude. And

secondly, we also had a lot of other consumers, frankly, private consumers and all that also adopted a wait-and-see attitude.

So growth rates, manufacturing for instance was at a stand-still, manufacturing sector. And that is a significant contributor to our

economy. So in terms of just actual impact on the economy, I think it was primarily on the manufacturing sector.

QUEST: Do you now see --

NJOROGE: Yes --

QUEST: A period of stability ahead, and if so, what are your forecasting for growth?

NJOROGE: OK, the economy has turned a corner, definitely 2017 was a -- was not an -- was a difficult year. But now we're looking forward in 2018, we

are focused in growth in the order of 6.2 percent --

QUEST: You just started that last year --

NJOROGE: Much higher than last year, last year we expected growth rate to be around 5 percent, maybe shy of 5 percent. But remember last year, we

had also in addition to the politics, we also had the drought.

So that was a significant downward pressure on the economy.

QUEST: You enjoy the luxury of independence, your Monetary Policy Committee in that sense. And what is it do you think can you -- now needs?

Having had tourism disrupted by terrorism, having had manufacturing disrupted by electoral and political unrest.

What now does the country need in your view?

NJOROGE: OK, first thing is we need a strong macro policies. That is for sure. So in particular, we need to strengthen the fiscal policy. So a bit

of consolidation which is a big item, and that is -- that is --

QUEST: Austerity?

NJOROGE: I would say consolidation, not austerity. The reason there is that they're actually -- there's hope for reducing expenditures, maybe

raise -- increasing also revenues appropriately. But these will rebalance the economy appropriately.

But that is one --

QUEST: Right --

NJOROGE: Major item. The other thing is strengthening of institutions. We still have a long way to go in terms of strengthening even the Central

Bank, and also have the institutions that work.

The tar dry element which I think is important is also improving the economy -- the economic -- the environment for doing business. So those

are the three items --

QUEST: But when you're talking about the -- improving the environment --

NJOROGE: Yes --

QUEST: Are we back to our old favorites or our old -- recognize, corruption --

NJOROGE: Yes --

QUEST: Red tape, bureaucracy, all the things that gets in the way, that's constantly gotten the way.

NJOROGE: Yes, those things will need to be dealt with. But I think the way to deal with them is by strengthening institutions, making the outcomes

of things predictable in terms of licensing.

You know what needs to be done in order to get a license, you know what needs to be done in terms of -- you have to pay a fine and things like

that. So predictability of business, I think that is key.

QUEST: Now next -- later this year --

NJOROGE: Yes --

QUEST: We will be in Kenya, we're coming when Kenya Airways is starting its new flight to New York, we will be doing this very program for QUEST

MEANS BUSINESS from Kenya.

So when we're all there, what should I be looking for? What should I be going to see?

NJOROGE: OK, the first thing you need to see is the vibrancy of the private sector. That is key. Actually Kenya is running on the private

sector. It's less now on the public sector, public investment is really private sector.

And that is really quite varied. As a matter of fact, what you will see, what you should see is also the diversity of the economy. That is

essential. The diversity of the economy. And thirdly, you need to see the dynamism of the people.

Innovation in terms of the young people that are there.

QUEST: I hope so that you'll show me some of that when I'm there. I hope that we'll have a chance -- how attractive are these things?

NJOROGE: I look forward to seeing you when you visit Kenya and I'm not sure I'll be on that flight, but you will be on the flight to Nairobi and I

look forward to welcoming you there.

QUEST: Very on, governor, thank you very much indeed.

NJOROGE: Thank you Rich.

QUEST: As we continue tonight, QUEST MEANS BUSINESS live from New York. One of America's oldest gun makers is filing for bankruptcy protection.

[16:50:00] Remington's problem is in how dull they were, after the break.

(COMMERCIAL BREAK)

QUEST: Amid all the protests against the use of firearms in mass shootings, one of America's oldest gun maker has filed for bankruptcy

protection, its debt, not demonstrations that pushed Remington outdoor's brands over the edge.

The company wants to reduce its debt loan by $700 million. And by entering chapter 11, it can stay in business and make the necessary changes and keep

making guns. One of its products, the AR15 style riffle was that used in the Sandy Hook killings.

The victims' families are suing the company over that of course. Clare Sebastian is here, why are they gone bust?

CLARE SEBASTIAN, CNN: It's a number of factors, Richard, actually, it's really informative when you look at the kind of the overall picture of the

U.S. gun industry and how it operates.

So when you talk about the AR15, the Bushmaster style rifle that was used in the Sandy Hook massacre. That led to some problems for Remington. The

owner which is Cerberus Capital; a private equity firm wanted to sell the main after -- less than a week after Sandy Hook, they couldn't do it.

They couldn't find anyone to buy them who wanted to be associated with this company. So you take that, then you add in what happened last year. So we

have -- in the lead up to the 2016 elections, gun sales rocketed --

(CROSSTALK)

QUEST: Right, so that's good for them.

SEBASTIAN: That's good for them. But then what happened after that, as soon as Trump was elected or as soon as it looks in the polls like he might

be, it starts to come down again.

Last year, background checks, FBI background checks fell 8 percent, that's the most since the FBI started collecting that data, and that really is

what took them over the edge.

QUEST: But is it Remington's problems or is it problems for all the gunmen you factor at the moment.

SEBASTIAN: I mean, so it's both, it's actually. Remington's got a particularly bad probably because of their reputational damage after Sandy

Hook partly because of the debt that they were settled with when they were bought out by private entity in 2006.

And it's all just precipitated, Richard. But there's a really interesting part in the bankruptcy filing that I dug out earlier --

QUEST: Me too --

SEBASTIAN: And I think this speaks to a lot of -- the kind of political noise that we're seeing around the gun industry. Lazard; which is the

investment bank that was working on restructuring their debt, they approached over 30 funding sources to try and find someone to lend to the

company before they ended up filing for bankruptcy.

Out of all of them, only one came forward and offered the -- to fund them with $100 million credit facility, then they changed their mind. So no one

will do it. The reason they say as they were reluctant to providing financing to firearms manufacturing.

So I think, you know, we've seen the protest --

QUEST: Wow --

SEBASTIAN: Over the weekend, we've seen the unprecedented -- that's when corporations, I think people -- you know, there's a moment there.

QUEST: All right, there's a moment. But Remington now has a chance of the existing management to restructure before -- you know, chapter 11 versus

chapter 7, and it goes out of business.

And how will they -- I mean, will they do it, briefly? Will they do it?

SEBASTIAN: Well, that's what they say, they say they're going to continue operating, they're going to continue making guns as well as cutting their

debt by $700 million.

They say they're going to take 145 million and add that to their operations, kind of invested in their operations. So we've seen this

before with gun makers. You can't emerge from chapter 11, but look, this is a 202-year-old company.

[16:55:00] They were founded when James Madison was president. They have a lot of history running this, so I think they're all going to be fighting

for it.

QUEST: Good to see you, thank you. Well, on a profitable moment after the managerial(ph) of the markets, the Dow Jones strong ahead over, 2.5 percent

for the Dow, a gain of nearly 700 points, 2.8 percent, we'll have a profitable moment in a moment.

(COMMERCIAL BREAK)

QUEST: Tonight's profitable moment, what a day on the markets. The Dow up 2.8 percent, the Nasdaq over 3 percent, I could watch (INAUDIBLE) to the

next few minutes about just how good a day it was.

But that will be a complete another waste of time. If you think about it, last week, we were down a 1,000 points, now we just happen to be up 700,

who knows what the rest of the week will provide.

Instead, let's talk about the Qantas flight from Perth to London. The first nonstop flight from Australia to the U.K. Now there have been planes

that could do that flight for many years.

The 777, the 200LR, the 350, 500 and so -- but this was the first plane that could do it profitably. So it was a tremendous sense of achievement

when we were on board that plane, and you really did see how to cross the Indian Ocean, up past Indonesia or right over the Middle East through

Europe and then into London Heathrow.

It was an extraordinary occasion, and once again, reminded us that yes, aviation has its problems. To be sure, airlines often fail in their duties

and then what we expect from them. But ultimately, it is one of the industries that truly has pushed the boundaries and I think really given us

the golden age of travel.

And that's QUEST MEANS BUSINESS for tonight, I'm Richard Quest in New York, whatever you're up to in the hours ahead, hope it's profitable. We will do

it again tomorrow.

END