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QUEST MEANS BUSINESS
ECB Said It Is Time To Stop The Stimulus At Last; It's New York Versus The Trumps As The President Gets Sued Over His Charitable Foundation; A Battle Of The Oil Producers In The World Cup Where It Has Not Been A Great Day For The Lads From OPEC; Host Russia Hammers Saudi Arabia in World Cup Opener; U.K. Remembers Victims of Grenfell Tower Fire; New York Attorney General Sues Trump Foundation; Trump Salutes North Korean General in State Media Footage; Meghan Markle, Queen Elizabeth, Step Out for First Royal Engagement Together; Apple Closing iPhone Loophole Used by Law Enforcement; Justice Report Faults Comey But Finds No Political Bias; Serious U.S. Trucker Shortage Driving Up Costs; Paddy Power Donates to LGBT Every Time Russia Scores; FIFA Sponsorship Revenue Down Sharply in 2018. Aired: 4-5p ET
Aired June 14, 2018 - 16:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN HOST: I'd get up earlier in the day, they butt the games as the session wore on and as you can see on the strong sort of
robust wave board, one, two, three -- oh, look at that. You know, trading is over on Thursday, it's the 14th of June.
Tonight, they think it is all over. ECB said it is time to stop the stimulus at last. It's New York versus the Trumps as the President gets
sued over his charitable foundation, and a battle of the oil producers in the World Cup where it has not been a great day for the lads from OPEC.
I am Richard Quest, live from the world's financial capital, New York City, where of course, I mean business.
Good evening. Three trillion and three years on, the ECB is finally turning off the eurozone's monetary life support system.
The money printing program, the quantitative easing is to end in December and that means the European Central Bank thinks the eurozone's economy no
longer needs emergency support.
The ECB President, Mario Draghi, today delivered an upbeat economic assessment.
(START VIDEO CLIP)
MARIO DRAGHI, EUROPEAN CENTRAL BANK PRESIDENT: With longer term inflation expectations well anchored, the underlying strength of the Euro economy and
the continuing ample degree of monetary accommodation provide grounds to be confident that the sustained convergence of inflation towards our aim will
continue in the period at hand.
(END VIDEO CLIP)
QUEST: So, looking at the period ahead from September, bond buying will be tapered to just over $17 billion a month. In December stimulus ends
completely and the following summer could see rate rises if the conditions are right.
Michael Purvis is with me, chief global strategist at Weeden and Co., good to see you.
MICHAEL PURVIS, CHIEF GLOBAL STRATEGIST, WEEDEN AND CO.: Great to be here.
QUEST: We always knew that the ECB was going to stop. It wasn't really a surprise that they had done it now.
PURVIS: Not at all, no. Going from $30 billion to $15 billion a month from September down into next winter, not a big move. Something the market
has expected there, and I think what -- you know, when you step back for a second and you look at all of these Central Bank balance sheets in context
-- together -- that's really where the story goes.
The ECB is I think the most important one. It's been the biggest contributor of global stimulus, and what it does after -- it's one thing to
go down to zero, but how quickly do they actually reduce the balance sheet after that?
QUEST: But their tapering has been -- I mean, certainly a few months compared to say the Feds because it's much more multi-led, but then the Fed
was the first one to do it. So, the ECB can gain from the experience of managing the repo market and the cash market after you start tapering.
PURVIS: Absolutely, but I think the magnitude there, even though the ECB you know, sort of was following our lead, they took it to a much bigger
level, right? And so, their relative contribution to what I call the global Central Bank balance sheet, the Bank of England, the Fed, the Bank
of Japan and the ECB together, they are the big swing factor and they are also -- despite what Mario Draghi said this morning, you know, the biggest
unknown in terms of how quickly they take it, they really started cutting back the balance sheet after that.
QUEST: Why is there an urgency to cut back the balance sheet? I mean, once you've stopped your purchases, and you've stopped your reinvestment,
which are still going to continue reinvesting into next year, but once you then have to run down the balance sheet as opposed to just let it run off?
PURVIS: Right, you know, you step back and what is all of these QE to begin with, right? Before the financial crisis, the Fed had $800 billion
then they grew that to 4.6, the ECB has about $6 trillion. Enormous extraordinary measures that they kept doing it, so it became common place.
It wasn't extraordinary anymore, and so I think, the ECB in theory would certainly like to get back to an old normal balance sheet.
In other words, not having a huge long-term debt security is another --
QUEST: Right, and the reversal of that is in itself a form of monetary tightening as you do it, but now, let's just look and put the two together.
You have the Fed yesterday raising rates, two more this year potentially on the dot blot and three next year.
So, we are looking at the new normal of about 2.5% to 3% to 3.25% at the top end of the spectrum of the cycle. Now, we've got the ECB starting its
tightening process. So, the cycle is well and truly underway.
PURVIS: Correct. Correct. And I think the real question is how fast is the -- you know, we have a pretty good sense where Powell is and where the
Fed is. There is more unknowns with respect to the ECB, it's the velocity of the tightening that I think the markets are really trying to contend
with and there's one other real swing variable in this mix, too, which is that Mario Draghi, you know, some people might consider a permanent dub.
But he doesn't have you know -- he doesn't permanently govern the ECB and his term expires September of 2019, so after that, the expectation is that
there will be "hard money" German or Fin running the show there.
And they may want to normalize at a much faster rate and that I think is going to be a very, very thing to watch because --
QUEST: We will be watching it closely.
PURVIS: Yes, we will.
QUEST: Please come back again, sir.
PURVIS: You bet.
QUEST: Thank you very much indeed. Good to see you. Thank you. Now, Europe reacted positively at the end of the bond buying, at least, the
equity markets did -- they closed higher across the board. The greatest gains were seen in Germany where you see it's up more than 1.5%.
And so the story that is going to dominate for the next four weeks or so, the World Cup. The host nation, Russia, has kicked off the World Cup with
a thumping 5-0 victory versus Saudi Arabia, 5-0.
All right, so expectations were low. Two lowest rank teams, but look at this -- a stunning volley and Russia's fourth goal, and it was cut off in
the 20-yard free kick, and now look at the curve on the ball.
With such playing -- look at that -- Vladimir, Vladimir ecstatic fans in Moscow, three billion TV viewers expected over the coming 32 games. Look
at them in the fan zones, watching the results. Amanda Davies is in Moscow.
Amanda, less of a victory, more of a route?
AMANDA DAVIES, CNN CORRESPONDENT: Richard, sometimes, in life, you just have to put your hands up and say, you've got it wrong and we have to say
everybody here over the last few days has been absolutely playing down Russia's chances, including the Russian sports journalists as well. You
have to say -- saying, "We've got no chance, we'll be lucky if we get a draw on our first three games." And we have all been absolutely proved
To such an extent, the celebrations going on in the streets behind us, it is this -- Russia has made it through to one of the later knockout rounds
such is the jubilation that this wasn't just avoiding embarrassment, but it is a win and a big, big win in their opening game.
You can probably hear the cheers and the horns blaring behind us. The atmosphere was absolutely fantastic in the Luzhniki today, the big question
now is whether they can go on from this win, which was in fact against, you have to say, not very good Saudi Arabian outfit, and whether they can go on
and build on it against two opponents that will be much tougher.
QUEST: So, we are of course, as you will discover in great detail, we've put this into some sort of business economic and market context; you'll
remember from four years ago. Now, look, the big banks think they know who will win.
They have used the kind of complex mathematics reserved for predicting markets, so UBS sees Germany as the likely victor. IMG says it will be
Spain, and Goldman Sachs believes Brazil is going to win.
Now, Goldman has predicted the entire tournament. They expect to see Brazil and Germany in the finals, although do beware, they have predicted
it four times in a row and they have been wrong every single time, so they have been consistently wrong in the last three.
Now, what do you make of those predictions? I mean, I guess, it's not exactly earth-shattering to say Germany, Spain or Brazil would be -- you
know, look, you know me and my knowledge of football. Even I could have had a haphazard guess at that?
DAVIES: Yes, they haven't exactly gone out on a limb, it's fair to say. They are the big three of everybody. I think even you could have predicted
will be there or thereabout, so there's also the likes of France and Belgium and Argentina that people are throwing in to the mix. But I think
with those three, they are pretty safe.
In terms of Germany, you know, they went through qualifying scoring more goals than anybody else, but arguably, not the team they were four years
ago. Spain have gone into absolute meltdown in the last couple of days having sacked their coach two days before their first game, talk of big
divisions now in the camp. That could galvanize them. We don't know how they are going to come back from that, so I think of those three, I would
go with Brazil partly because I am an old romantic and wants to see Brazil -- I would love to be there to see Brazil win the World Cup final.
But also, Neymar has a point to prove after that massive defeat, that we talked about four years ago, they were thumped by Germany. Go on.
QUEST: All right, I want you to give me -- because I promise you, I won't hold it against you for the next 32 days. I want you to give me the
outside team -- the outside team that you think could be the dark horse, maybe not get to the final, but at least is going to be the one that will
say (inaudible). Did you see the little team that could?
DAVIES: Now, you see, in this position, it's really hard. Michael Holmes said to me last night, "Amanda, Australia is the dark horse." Everybody is
actually -- now we don't say it often, but people are actually talking about England as the dark horse, for once, we are not talking up the
chances of being. Everybody is being realistic, but slowly, slowly, they are doing quite well.
It's really (inaudible) to ask me that, Richard, because we are one match down, 63 to go. But I think, yes, Belgium everybody says there's got to be
the point that Belgium put in a decent tournament. This might be it. But, yes, can you come back to me in a couple of weeks?
QUEST: Oh, don't worry, it will be a nightly business. Good to see you. Thank you very much in Moscow. Amanda Davies, joining us there. Now,
today's match pitted the world's top two oil producers against each other with the exception of the United States.
The Russian President, Vladimir Putin watched his nation demolish Saudi while sitting beside the Kingdom's Crown Prince MBS, Mohammed bin Salman.
John Defterios has more on the diplomacy happening off the field.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Their national teams are not known for their football prowess, but Russia and Saudi Arabia certainly
have clout when it comes to oil.
Vladimir Putin hosting the young Crown Prince of Saudi Arabia, Mohammed bin Salman before the big match for what one could call the World Cup diplomacy
of oil. The Crown Prince telling Putin he wants to continue their collaboration, fully aligned is the message according to sources in both
The so-called Petrol Alliance formalized at the end of 2016 cut supplies by 1.8 million barrels a day and helped rescue prices, they worked with crude
surging to $80.00 a barrel. But that is when it started to get complicated. U.S. President Donald Trump took to Twitter again this week
suggesting oil prices are too high, OPEC is at it again, not good.
For Saudi Arabia and Russia, it is a game of managing market expectations as it tries to put about a million barrels a day back on the market. There
is also pushback from Saudi's regional foe, Iran, and Venezuela. Neither one is Trump exerting influence over OPEC.
It will come to a head a week from Friday when OPEC and non-OPEC producers gather in Vienna. In the meantime, the media in Russia showed when it
comes to oil, the two plan to stay in this great game together.
John Defterios, CNNMoney, Abu Dhabi.
(END VIDEO TAPE)
QUEST: And so, over the last four weeks while I have been out of New York, all sorts of things have been happening in the markets and we are seeing
some more results of that today. Join me as we go to of course the QUEST MEANS BUSINESS trading post.
Now, the U.S. stock market indices climbed modestly. It followed the ECB's announcement, you also saw Fox shares rise after that latest $65 billion
counterbid against Disney for the Fox asset.
And so, whilst we are still 11.14 on the NASDAQ, the NASDAQ actually eked out another gain. It held another one yesterday, which means -- I will
tidy it up later, it's the 20th record of the year for the NASDAQ, so whilst these two are just holding their own, the NASDAQ plows on. The DOW
was done, the NASDAQ and the S&P -- by the way, just a quick look at the -- we need a bit tidying up here. The FTSE is up nine, remember, that has had
a few records while I have been away.
The DAX and the SMI holding their own as well. That's how the markets are looking. President Trump is about to impose $50 billion in tariffs on
Chinese goods. Experts are warning, this stretch could turn into an all- out trade war. After all, once you start with this, where does it finish?
We will talk about it after the break. It is QUEST MEANS BUSINESS live from New York.
QUEST: New York's Attorney General is suing the U.S. President and his three oldest children. The allegation is that they engaged in persistent
illegal conduct in the course of their charitable foundation. Now, on Twitter, President Trump has defended his foundation's record and called
the work of sleazy New York Democrats.
However, the New York Attorney General, Barbara Underwood told us that the case against the President was about evidence, not politics.
(BEGIN VIDEO CLIP)
BARBARA UNDERWOOD, ATTORNEY GENERAL, NEW YORK: I am unaware of a case in which the foundation involved was run by a sitting President, but there is
no reason why a foundation owned and operated by a sitting President should be exempt from the laws that we routinely apply to other foundations.
(END VIDEO CLIP)
QUEST: Jean Casarez is here. What did they do? What is the fundamental allegation that this foundation did wrong?
JEAN CASAREZ, CNN CORRESPONDENT: : The allegation is that this really wasn't a charitable foundation, that it was a shell that the purpose of it,
it was really to benefit Donald Trump and benefit his businesses.
It is a verified petition, a civil suit in court here in New York saying that he has violated state law and the foundation along with charitable
law. Let me give you one example, it says in the verified petition that to settle lawsuits during the course of time, what would happen is that the
foundation would pay an amount of money to a charity and that would settle the suit.
Here is an example. Palm Beach, the town of Palm Beach issued a citation to Mar-a-Lago saying their flag poles are not the appropriate distance that
they didn't get a building permit. There was a negotiated settlement and Palm Beach agreed to a charity donation of $100,000.00 to the charity of
their choice, but it came out of the foundation moneys. And that is where they say that there was a conflict right there.
QUEST: So, there was a benefit to the President and/or his family, an alleged benefit. But the charity did still get money?
CASAREZ: That's correct. The charity did get money. Another example, the Iowa -- days before the Iowa caucus, when there was monetary for the
veterans. They collected all this money and what they said was that there was an interlocking of the political campaign and donations to the veterans
and it violated law.
Now, we have got to wait to see exactly legally what the foundation's response to all of this. They may have reasons for this that obviously are
not alleged in the petition.
QUEST: Does this case go ahead or does it have to wait while the President is President?
CASAREZ: Well, we will see what they do because they are the defendants here and we will see if they ask a stay until he gets out of office because
he's not the only defendant -- the foundation and three of his children.
QUEST: Good to see you. Thank you.
CASAREZ: Thank you.
QUEST: President Trump is set to announce tariffs, some $50 billion worth of Chinese goods. Experts widely believing it is going to be tit for tat
and it could spark a full blown trade war, so on Friday, we learn which Chinese goods will be subject to the new 25 percent tariffs.
Then on June 20th, Europe plans to post tariffs on the U.S.. That's when the first Canadian tariffs go into effect on several grounds. Mexico also
holds its presidential election and that could hurt NAFTA negotiations.
The former labor secretary is Robert Reich and he joins me now live from Berkeley, California. Good to see you, Mr. Robert Reich.
Okay, we are beyond now whether or not it is a question that these are going to take effect. How worried are you?
ROBERT REICH, FORMER LABOR SECRETARY: I am worried, Richard. Because trade wars hurt everybody. We know from the 1930's example when
Congressman Smoot and Congressman Hawley set out to impose tariffs on the rest of the world, the rest of the world responded with retaliatory tariffs
and it was a downward escalator. Everybody suffered as a result.
The Great Depression was much worse, and here, we have in miniature exactly the same kind of beginning as we had with Smoot-Hawley. Canada, Europe,
China, Mexico -- these countries are not simply going to sit back.
QUEST: If though the President has a point and many people do agree that there is a trade unfairness and that the U.S. has been treated badly even
though there are wrongs on both sides, but by and large, if we take for example, tariffs on trucks with Europe or tariffs on dairy products, the
U.S. has got the worst side of the deal.
But nothing seems to change and that is what this Prseident is trying to do.
REICH: Well, you could say that this President -- Donald Trump is trying to change and disrupt the current international trade regime. The United
States is not really, really all of that disadvantaged.
I think China is a separate case, Richard. We can talk about China, but with regards to Europe and Canada and Mexico. I mean, these are major
trade partners. These are allies, both in economic and political centers. They can make a case as strongly as we can about unfairness from the United
States in terms of subsidies from the Defense Department. We have a gigantic defense machine that provides all sorts of subsidies to American
industries. They complain about that periodically.
When you have a trade regime, ideally, you have an opportunity for both sides to work out any differences. Both sides understand that they have a
kind of a win-win interest in maintaining that trade regime to go into a trade war with Europe, with Canada, with Mexico -- it makes absolutely no
sense, and all with Japan for that matter.
It is counterintuitive. It is irrational. It is illegal. Legally, morally, economically, it makes no sense whatsoever.
QUEST: And that indeed, sir, stay with me. That indeed was the point made by the Canadian Foreign Minister, Chrystia Freeland.
(BEGIN VIDEO CLIP)
CHRYSTIA FREELAND, CANADIAN FOREIGN MINISTER: The idea that we could pose a national security threat to you is more than absurd. It is hurtful. The
232 tariff introduced by the United States are illegal under WTO and NAFTA rules. They are protectionism, pure and simple.
(END VIDEO CLIP)
QUEST: Is it your view, do you think that the President will abrogate NAFTA?
REICH: Well, he wants to, at least according to the White House, improve his bargaining leverage in the NAFTA negotiations. That's why he wants to
separate Mexico and Canada into to two separate negotiations and wants to apply maximum pressure on both countries. But you know something, they are
not going to agree.
Certainly, after the Mexican election, it is very, very likely that the new Mexican President is going to be even less inclined to go along with what
America wants. In Canada, we have a Prime Minister and a government in Canada that is standing very firm against what they consider to be American
And let me just add, the idea -- the very notion that Canada poses a national security threat to the United States is -- would be laughable if
it weren't so serious right now.
QUEST: Except, this is playing very well, not only to President Trump's hardcore base. Middle America believes that the U.S. has been taken
advantage of and wants to see a more muscular response when it comes to trade.
REICH: Well, Richard, when the President of the United States says over and over again, the United States has been taken advantage of. Obviously,
Middle America is going to begin to think that that is the case.
But when American farmers start suffering because they are our major exporters, they are major exporters to Mexico and to China, and to some
extent to Canada. Those exporters are Republicans.
Those agricultural belts are farmers and all of the economy that depends on farm income, they are going to suffer. I don't think that President Trump
is going to have a great deal of support once the actual consequences of this come through.
Also, all the downstream users of steel and aluminum in the United States are also going to be paying more? They are not going to be great advocates
of this once these things get put into place.
QUEST: Robert Reich, good to see you, sir from California. Thank you.
REICH: Thank you, Richard.
QUEST: We appreciate it, as always. Now, you need to keep -- well, we all need to keep on top of the day's business headlines. We can all fit you in
just 90 seconds. It's the daily business briefing. It is updated twice a day before and after the bell rings on --
QUEST: -- Wall Street. Ask Alexa or Google device to play it for you every week day. In a moment, Apple makes it harder to crack an iPhone.
First, the "Business Frontiers." The smart phones that are helping save eye sight in developing worlds.
(BEGIN VIDEO CLIP)
ANDREW BASTAWROUS, CO-FOUNDER AND CEO, PEEK VISION: There is 36 million people at the moment who are blind worldwide and four and five of them
don't need to be, they are blind from a curable condition or a preventable condition and that for us is the tragedy, but also the opportunity.
I am Andrew Bastawrous, I am co-founder and CEO of Peek Vision.
It started a long time back when I was about 12 years old and I found out through an optician that I couldn't see, but I had no idea that I wasn't
seeing. I just knew I wasn't doing well at school and was struggling socially. And when I got a pair of glasses, it completely transformed my
Within Peek, we have a set of systems that allows to do population level screening and diagnosis. The screening is done through vision tests such
as an acuity app where it can tell me how well somebody can see.
If you could point in the direction that it is pointing. And then you also have this device Peek Retina that goes on the phone that can tell you why
somebody can't see by imaging the lens in the back of the eye, the retina to determine the potential cause of vision loss.
The technology came about from when my wife and I were living in Kenya and we were establishing a hundred eye clinics and it was part of my PhD
program at the London School of Hygiene and Tropical Medicine. We were taking state of the art equipment and a large team to some really remote
difficult locations, many of which have no roads or electricity.
But what was consistent there were the huge queues of people who had a need that could be treated, plus mobile phone connectivity. Loads of these
places that were off the grid had really good mobile phone connection and we have seen that huge potential for connection that the idea came from
that maybe we could reach these communities in a different way, and it was from there that we started building the individual tests and then the
systems that incorporate those tests to ensure hundreds of thousands of people don't remain needlessly blind.
In Botswana, we have an agreement to work with them to screen and treat every school child in the country. We will be providing the team and the
processes to find everyone as well as the technology to track them through, and the government commit to all of those people who we find getting
treated and it makes Botswana the first country in the world where an entire generation of school children has access to vision services.
For us, we are completely connected to impact first, but we want to do it sustainably. We have gone from last year being 95% grant dependent to
being 60% grant dependent this year and the reason we have been able to do that is by having partnership agreements with governments and NGO's who are
now paying for our services to support them to deliver our comprehensive programs.
Eye care is not just a global health issue. It affects education, economic and prosperity, building community, social value. When somebody can't see
it doesn't just affect them, it affects their entire family and their community and with a potential to transform the entire country's prospects
and opportunity is there with vision.
(END VIDEO CLIP)
[16:30:00] QUEST: Hi, I'm Richard Quest, a lot more QUEST MEANS BUSINESS in just a moment when we'll go behind the scenes of an 18 wheeler on why
there's a truck shortage on the great American highways.
And already, only one match played and a very profitable World Cup when LGBT charity after a British bookie is looking to turn the tables on the
Russian government. We'll find out more, this is Cnn and on this network the facts, they always come first.
World Cup 2018 has kicked off in Moscow and the tournament after a perfect start with the host Russia beat Saudi Arabia, made it look easy. An early
lead and three goals from substitutes and Russia came away with a 5 nil victory.
A memorial service has been held one year to the anniversary of the Grenfell Tower tragedy. The anniversary took place of course in the United
Kingdom to remember the 72 victims who died and one of Britain's deadliest fires.
In west London, a silent walk took place as many holding green balloons or scarves, as color green has come to symbolize the disaster. New York
Attorney General is suing President Trump and his children. The Attorney General Barbara Underwood is alleging that the Trump Foundation repeatedly
violated charity laws for more than a decade.
And she's asking them to dissolve the foundation and for millions to be made in restitution. On Twitter, President Trump has called the suit
ridiculous. New video from North Korea state media shows President Trump saluting a North Korean military general during the Singapore Summit and
displaying respect to a hostile regime breaks the American president.
U.S. official tells CNN, the White House is not viewing the president's salute as a mistake, it's meant to show respect to Kim and his entourage.
The Duchess of Sussex stepped out for a royal engagement with her majesty, the queen. Prince Harry was not in attendance, and the fact that the
Duchess and the queen were there together and alone, well, it's a serious of events and it was taken part of including this visit to Cheshire town.
Well, and his wife is seen as the ultimate seal of approval from her majesty. All right, well, we've talked enough about my iPhone over the
years, but Apple is now closing the loophole on this. Not my phone, but all iPhones has been exploited by hackers and law enforcement.
In the past, the authorities have used hacking software to access information and lock phone via as you're familiar the lightning port at the
bottom. Now, Apple says the change is designed to protect personal data, not to frustrate law enforcement agencies.
Philip Mudd for the FBI and the CIA on national security and counterterrorism joins me from Memphis. Philip, you're familiar with the
arguments, we've been over them a million times, particularly over when the FBI wanted to crack open the phone of the California bombers, so --
So you, what do you make of Apple now closing that loophole that has allowed them to get the information?
PHILIP MUDD, EX-DEPUTY DIRECTOR, CIA'S COUNTERTERRORIST CENTER: Well, I didn't look at it as a technical issue, I looked at it as a more
fundamental issue, and that is a change in culture and global economics.
I mean, 50 years ago, if the FBI wanted data from AT&T, how many Americans would have been so suspicious of the government that they would have said
the government shouldn't have that data.
I mean, part of this is a transformation of how the public views government. But on economics, 50 years ago, AT&T is not worried about
giving data to the American government and about worried about competitiveness in China or India today.
If I'm Apple, I'm saying, why would I give data to the FBI, some customer in China or India or some rivals are going to beat me if I say they're
never going to turn over that data. So I view this as a global issue in terms of globalization itself, but also changes in perception among the
American people about whether they trust government.
QUEST: Right --
MUDD: They don't --
QUEST: They may not, but from a law enforcement perspective, is this hobbling law enforcement or requiring them to do their duties with one hand
tied behind their back.
MUDD: Well, that's an understatement. There are two ways typically you can acquire information and investigation especially when you're dealing
with somebody who doesn't know they're being followed.
[16:35:00] Number one is to find and inform, that's human source information to get next to somebody in an investigation. But especially in
a digital age when you wake up as I do, I transfer every dime I spend electronically. I have written a paper check in 15 years.
I pay every bill electronically, I text maybe 300 times a day, Richard, if you want to build a digital picture of somebody's life, even in contrast of
where we would have been 10 years ago, you can do it lightning fast with a phone.
The inability to access that data isn't just about information, it's about the inability now to draw a picture of somebody's life, it's that basic.
QUEST: Let's turn to the Comey investigation. You received the Inspector General's report which basically says Comey behaved inappropriately in
dealing with the Clinton e-mail investigation. But there was no -- there was no malice, there was no political -- I thought.
Now, Comey, in his view of "Times" article says look, I respect what the IG says, I don't agree with it, but he has a valid point or at least he has a
point. Where do you stand?
MUDD: I think Comey was wrong and I think the Inspector General was right on two fronts. Number one, if you're in the FBI, you don't speak about an
investigation and particularly when Mr. Comey spoke about his personal views of Hillary Clinton's use of e-mail after he said the FBI is not going
to continue the investigation.
Why the heck is he speaking about the -- about Hillary Clinton when he says we're not going to prosecute her, that's inappropriate. The other thing
I'd say is a surprise, the second piece is I was a little surprised that the IG was so clear on sending -- Inspector General so clear on saying
despite all this inappropriate behavior, and I read the summary of the report, we did not see anything that indicates bias in the overall
Pretty remarkable report I'd say in terms of its mildness.
QUEST: Sure, finally, I've got to ask you that so much is being made. The video of President Trump saluting the North Korean general at the meeting.
Now we just showed -- we'll show it again.
Does it bother you, does it bother you as a law enforcement that the president saluted supposedly a general of a hostile regime. What's the
difference if he's saluting the general and shaking his hand?
MUDD: I agree with you, I mean, I'm going to spend more time figuring out what kind of coadunated(ph) drink tonight than I am worrying about that
shot that video. This is a common courtesy that the President of the United States showed a foreign military leader.
I met former KGB people who were chasing the United States in terms of sending in KGB aides and sent to the United States. I shook their hand, it
was a common international courtesy. Can we find something serious to worry about than whether the president shook somebody's hand or saluted
him, that doesn't mean anything to me, Richard.
QUEST: All right --
MUDD: You want my real opinion now.
QUEST: No, I want to know what coadunate(ph) you get a drink before tonight is out.
Good to see you, Philip, have a second glass on me, thank you --
MUDD: Thank you --
QUEST: Good to see you.
MUDD: All right, I will.
QUEST: Well, put it a lot into perspective as only Philip ever manages to do so. Finally, country music has long romanticize the life of the long
haul trucker as a glorious fading into a shortage of drivers, we'll talk much on this program.
It is also announcing consumer prices as a result. It's QUEST MEANS BUSINESS with the truckers.
[16:40:00] (COMMERCIAL BREAK)
QUEST: There we go. Now, many of the largest companies in the United States are wondering about the same thing, the rising cost of trucking.
Trucking cost are going up and the cause is a serious shortage of drivers.
Indeed, if you ask the industry, they say that 63,000 more drivers are needed in the United States. It's not so bad that the U.S. Congress is
considering what measures they need to take for example, lowering the age limit for inter-state truckers.
It's currently 21, dropping to 18. Now, to put this into true perspective as to why it is significant. Seventy percent of all U.S. goods rely on
truckers to get to their destination. You also think of air, well, air is just non-value stuff and railway is just book(ph) stuff.
But 70 percent of goods go by road. Clare Sebastian is with me. What's the fundamental, we've talked about this before --
CLARE SEBASTIAN, CNN CORRESPONDENT: Yes --
QUEST: A few times on the program, what's the issue?
SEBASTIAN: So, it's a private problem(ph), it's not just the fact that there's shortage of drivers. It's the fact that we're seeing a rising
demand for trucking as well. That's the fact that the economy is growing and the rising e-commerce as well.
And all of this is bringing it together into this -- you know, fundamental issue where the companies are really having to step up. So you know,
although it might not, sure, Jersey, climb it on board a truck -- the trailer to really find out what exactly people in the industry are
UNIDENTIFIED MALE: We're going to pick up an 18 trailer.
SEBASTIAN (voice-over): Forty nine-year-old Elmer Frunos(ph) still remembers the day he got his trucking license.
UNIDENTIFIED MALE: And then when I got the license, I got -- I'm not going to do something I like and I'm going to make it for my family.
SEBASTIAN: That was 20 years ago. Back when Americans still had romantic view of the trucking industry, see in the movies like convoy. And the
first, Elmer(ph) says, life really was that good.
UNIDENTIFIED MALE: When I started driving, more work, you can do you know, a lot of money. Now, it's not the same. Companies -- most of the
companies, they want to pay you, you know, for the experience. That's why a lot of people quitting -- you know, quit doing this because the way the
system is running now is not fair for -- you know, for the driver.
UNIDENTIFIED MALE: It is tougher to find truck drivers, I think that we have to be much more aware of what those drivers are looking for and
providing them a better experience.
SEBASTIAN: For Clement Singel (ph) who took over his century-old family business 15 years ago, this is as tight as he's ever seen the labor market.
The American Trucking Association says by the end of this year, the industry will be short of 63,000 truck drivers.
UNIDENTIFIED MALE: We have started to set up some internal training processes that allow us to take newer drivers or student drivers basically
and put them through our own training process.
SEBASTIAN: And as the economy expands, the need for truckers is only increasing.
(on camera): Almost three quarters of all freight in the U.S. would at some point travel on a truck just like this. That's everything from your
Amazon deliveries to wholesale shipments for companies is critically important for the economy.
And now, with the rise of e-commerce, demand for trucking services is actually going up.
(voice-over): Elmer (ph), says so far he isn't seeing that rise in demand reflected in his pay check, and yet despite the challenges, he still feels
the pow (ph) of the open road.
UNIDENTIFIED MALE: All right, I like it being along the truck, I like to be, you know, in the road, I like to see new things every day.
QUEST: Wonderful report. Tell me, why aren't the natural laws of economics coming to play here because if there's a shortage and the rising
demand all go -- wages should be forced higher which would draw people into the industry. Now, economics 101.
SEBASTIAN: Right, well, if you look at the numbers from the Labor Department, the wages are growing up, they've grown up about 20 percent,
say in the last 10 years. But we asked this company, things with trucking, why -- you know, what exactly is going on.
How are they able to plan? And they said, the problem is you can't commit to new work from customers if you don't know you're going to have the
drivers. So that means that the amount of work for the drivers isn't really increasing because the companies aren't getting the drivers to
So you get this vicious cycle, yet another paradox of what's going on in that industry.
QUEST: So at some point, the demand will overwhelm the supply and wages will go up. And yes, there may be the inequality mainly to rising freight
SEBASTIAN: Right --
[16:45:00] QUEST: As well, but that's just the law of supply and demand.
SEBASTIAN: I think that's what we're seeing at the moment is they're still in transition to that. Obviously, the unemployment rate has been dropping
really fast and we've seen -- we're now only --
SEBASTIAN: Right, we're only just in a situation where there's more job openings, so now want people to fill them. So I think it's -- you know,
there's some cause of going on.
But what you think with this company is they're having to really act urgently and think of actually how to bring people in. This company says,
they're even considering bringing in convicted felons to, you know, finish prison terms because they're not desperate for drivers.
QUEST: Did you enjoy the truck?
SEBASTIAN: I did.
QUEST: Oh, you did?
SEBASTIAN: Yes, go for road.
QUEST: Trucker, I think we should do something in that direction, next time, I will do, we'll get you a driver --
SEBASTIAN: Got an 18 wheeler.
QUEST: Clare Sebastian, an 18 wheeler going across America, thank you. Russia has a surprising bed fellow in this World Cup. The nation doesn't
support the LGBT communities, thanks to an Irish (INAUDIBLE), it's a very perverse way of looking at it.
But the better Russia does, even though it's anti-gays laws, the more the LGBT community benefits.
QUEST: Russia's 5-goal round of Saudi Arabia turned into an expensive match for Paddy Power, it will cost the bookmakers more than $65,000 in
donations to LGBT charities, I will explain as you watch the first $10,000 or 10,000 pounds being donated -- there you go, yes, there you go.
Paddy Power is donating 10,000 pounds or $13,000 for every goal that Russia scores at the World Cup. Isn't that a 10,000 about to go? Oh, thank you.
The idea is to challenge prejudice on and off the field as it relates to LGBT issues.
That's a lot of money, because it also wants to support footballers coming out as LGBT and it is a knock(ph) to Russia, adds more money -- thank you,
education programs in schools and colleges also there.
So the fundamental point is to -- thank you, make grassroots teams safe for LGBT issues and those in the box, all right. Lee Price is head of PR at
Paddy Power. Who came up with this idea?
LEE PRICE, HEAD OF PUBLIC RELATIONS DEPARTMENT, PADDY POWER: It was an internal idea that we knocked about for a while, and we're happy of how it
went even as it's been an expensive style.
QUEST: Yes, but you know, you guaranteed 50,000 already, so you really just paid your guarantee. And why? Why this particular issue over all the
others? Why did you decide to do it -- it's highly controversial within Russia obviously --
PRICE: Yes --
[16:50:00] QUEST: Not elsewhere.
PRICE: Yes --
QUEST: But it's highly controversial, and you put yourself well and truly on the block.
PRICE: Yes, it's the right thing to do, I guess, crucially, and very few brands will be brave enough to tackle an issue like this. We've worked in
this area before, we've done campaigns previously a few years ago, we are the title sponsors of the biggest private event in the U.K., right in
I mean, just felt like anyone was going to do this, it was us, and our brands tone is that of humor and mischief, so it wanted to use a bit of
mischief here to make it more palatable and mess in your face, but also more impactful, I think.
QUEST: And it's very -- I mean, it is significant that you are putting a sizable amount of money behind this boiling issue. I mean, I think back to
the sort of gains and you look at the movie "To Russia" and all of those sort of thing, an issue there.
Well, there was no major statement made by athletes. But --
PRICE: Yes --
QUEST: Here, you're saying, it's significant to do -- to be seen to do something.
PRICE: Yes, and also we've seen a lot with various high profile LGBT-plus ambassadors support this, and not just an Irish bookmaker doing this, it's
various people around the world standing up and saying, you know what?
Let's do it on Russia to fund LGBT community if they don't want to.
QUEST: Is there -- I mean, realistically, you priced internally what you think this could cost. What do you think it's going to cost you? I mean,
obviously, every game is -- every game is not going to be like Saudi Arabia tonight, what --
PRICE: Well, I hope so --
QUEST: Are you preparing? What are you prepared today?
PRICE: Well, the mathematician are on our trading floor texted me before we started this tournament, Russia will score 5.2 goals, so that's how much
we'll pay out. Well, one game in and they've scored 5 goals already.
So they're a little bit off we think. If Russia go the way and continue this way, they'll score 35 goals and I'll be out of a job, but we think
that this was their easiest fixture, this is the game that they're going to score most goals in --
QUEST: Right --
PRICE: Much trouble in the next two.
QUEST: OK, just finally, briefly, if the bill does come to -- it work up the 35, but you know --
PRICE: Right --
QUEST: It then comes to a couple of 100,000 or 100,000 or whatever 100,000, I assume you're going to pay the bill.
PRICE: Of course, that will be great, it will do great then.
QUEST: Right, brilliant story, thank you sir, I appreciate the company --
PRICE: Thank you, Richard Quest --
QUEST: Putting its money exactly where its mouth is, thank you. And as we were just talking there, the controversy over Russia and Russia's
controversial reputation has not only encouraged some like Paddy Power, but has also put up some World Cup sponsors, in its route(ph), others have had
to take up the sack and familiar names are in this year's tournament. Anna Stewart reports.
ANNA STEWART, CNN CORRESPONDENT (voice-over): On the streets of Moscow, the finishing touches have been applied, a city ready for the biggest
sporting event on the planet. Take a look at the fine print though and you'll see some unfamiliar names.
A slew of Chinese companies sponsoring the event for the first time.
STEVE MARTIN, GLOBAL CHIEF EXECUTIVE OFFICER, M&C SAATCHI: You've seen the likes of Wanda which is the biggest property developer, you see Vivo which
is one of the biggest smartphone developers and manufacturers are coming in to take those official top-tier sponsorships and that's unheard of.
STEWART: World Cup watchers should expect to see ads like this one from FIFA's that will change to Chinese consumers. China is moving in because
western brands are dropping out. Their fear being too closely associated with the host.
This week Nielsen reported that FIFA's sponsorship revenue between World Cups is down 11 percent.
(on camera): Is Russia a hard sell?
UNIDENTIFIED MALE: Certainly in the west. Russia right now is an incredibly hard sell, and I think you specifically hear or around for
example LGBT rights through to issues around the annexation of Crimea, industrial skill doping, right through to the Skripal poisoning in
STEWART (voice-over): M&C Saatchi has worked on Coca-Cola's World Cup ad campaigns since 2006. According to global CEO Steve Martin, sponsors have
stayed away from invoking Russia ahead of the tournament.
MARTIN: What you haven't seen is amusing, and the cultural references to Russia, it's all about the World Cup. It reminded me of me, but it has to
be focused on the preparation for football, what's going to happen on the pitch.
Well, if you cast your mind back into 2002 to Korea and Japan, it was incredibly rich culturally. You know, you look at the vuvuzelas that came
out and became a massive strand of culture in South Africa, it was really rich.
STEWART: It's not just Russia that's scaring away advertisers. In 2015, Johnson & Johnson, Sony and Castrol put sponsorship in the wake of the FIFA
UNIDENTIFIED MALE: Only FIFA has been through an era where the brand has become rather toxic or also now beginning to see is that FIFA sponsorship
contract is a highly political decision.
STEWART: And with Qatar next, sponsors may not find themselves on safe ground until 2026.
[16:55:00] GIANNI INFANTINO, PRESIDENT, FIFA: Canada, Mexico and USA have been selected by the FIFA Congress to host the 2026 FIFA World Cup.
STEWART: Anna Stewart, CNNMoney.
QUEST: With the World Cup underway, we will have a profitable moment after the break.
QUEST: Tonight's profitable moment, the ECB today laid out the conditions for the ending of the EMT, the extraordinary monetary transactions. They
basically will stop buying bonds by the end of the year and into next year, they will start to run down the balance sheet.
And so ends the latest of course in the quantitative easing and printing of money. We're now at a situation where both the ECB and the Fed are engaged
in tightening a different point of the cycle, but the Fed's raised interest rates with more on the way, the ECB's stop printing money will run down the
balance sheets and future rate rises will come next year.
And so we now have the really tricky question of how far and how high will interest rates go as part of this cycle. In the U.S., it's believed that
the top of the cycle may be around 3 percent, in Europe, it could probably be slightly less.
But we don't know because we still don't really understand what the inflation outlook will be in this new environment. Can we say that
inflation has been tamed or with the accommodation that we've enjoyed so far, are we literally looking for it to take off in the future.
I promise you this, the next few months will be as tricky as the past. However, at least, now, we're doing it from a position of good growth. Low
unemployment and moderate inflation. All in all, it could be a lot worse.
And that's QUEST MEANS BUSINESS for tonight, I'm Richard Quest back in New York. Whatever you're up to in the hours ahead, I hope it's profitable,
let's do it again tomorrow.