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The Economic Chickens Are Coming Home To Roost, And Certainly When It Comes To The Emerging Markets, Fantasy Football Season Is About To Begin In The United States, And A New League Says Blockchain Can Make People Care About Fantasy Sports Like They Were The Real Thing, One Of President Trump's Cabinet Members Is Under Close Scrutiny For Alleged Conflicts Of Interest. Aired: 4-5p ET

Aired August 14, 2018 - 16:00   ET


[16:00:59] RICHARD QUEST, CNN INTERNATIONAL HOST: Closing bell ringing on Wall Street. Coca-Cola ringing the closing bell, I'm not quite sure why.

The Stock Exchange doesn't what the honor is, it's the global transformation or something similar, but Coke ringing the closing bell.

One -- yes, good solid fizz. I think we'll call it our fizzy gavel for Tuesday, it's August the 14th.

Tonight, Turkey versus US debt. President Erdogan is calling for a boycott of Apple. Tinder's co-founder is suing his own bosses, our exclusive

interview on what's gone wrong and we'll talk to Sean Rad and Tesla's board says, "not so fast," it's still not ready to approve going private.

I'm Richard Quest live tonight in London where of course, I mean business.

Good Evening, appropriate that I'm in Europe because most of the breaking news tonight comes from this side of the Atlantic. We begin with breaking

news from Northern Italy where rescuers in Genoa are scrambling through the rubble of a massive bridge collapse.

At least 23 people are dead, dozens are injured, and the number of people who have died is expected to rise as the search continues. The bridge

crumbled in a violent storm. In doing so, at least 30 vehicles including several heavy trucks plunged from the high bridge on the highway that

connects Italy to France.

Genoa's mayor says the collapse was, in his words, not absolutely unexpected, which makes one to wonder what he meant. The bridge dates back

to the 1960s and was undergoing maintenance. We'll catch up with the latest details from Nic Robertson who is in Genoa in just a moment.

First, let's watch and listen to his report as he sets the scene at the bridge.


NIC ROBERTSON, INTERNATIONAL DIPLOMATIC EDITOR: The rescue effort has been going on all afternoon. Rescue vehicles, fire trucks, ambulances, police

vehicles lined up at the side of the road, where you can see where the bridge just sheared off, debris hanging from the side there. And at the

other end of the bridge, several hundred yards away, that truck just close to the drop-off, a driver there who had a hugely lucky escape. The road

was busy, nose-to-tail traffic, torrential rain, thunder and lightning, water rushing down the road.

The bridge itself had a road sign showing road repairs at this, no indication yet why it actually collapsed. Dozens of vehicles feared to

have careened off, down into this valley here. It spans the canal and several rail lines linking to the port.

This, of course, a tremendously busy highway at a very, very busy time of year. National holidays in Italy, national holidays in nearby France.

This -- the main highway that connects along the Mediterranean France and Italy, a very busy day, a terrible, terrible tragedy for this city.


QUEST: Nic Robertson, much to talk about. But please update me on the number. I realized of course that it's going to change. We thought it was

in the 30s, and the Prime Minister advised and that's creeping up again, do they believe there are many more bodies to be found?

ROBERTSON: The expectation here seems to be that there are potentially more bodies to be found, that there are potentially more vehicles

underneath all that rubble. The recovery efforts continues into the night. There are sections that the crumbled concrete are illuminated by huge

search lights. You can hear the occasional sound of a mechanical digger in that area. Although, one of the heavy lifting equipment would be seen as

dusk fell, that heavy lifting equipment was brought to today, it rather gives the impression that this is really recovery, not rescue, and that

whomever may be under that rubble sadly, it is not a positive outcome.

QUEST: Nic, I referred in the introduction earlier to the calling from the Genoa mayor that said this was not -- this was actually not unexpected. Do

we know what he meant by that?

ROBERTSONL He said it was his responsibility as mayor to keep the city functioning and the government's responsibility is to provide financial

wherewithal to keep the country's infrastructure running. It smelled a little bit of a whiff of political differences there, but I think at this

stage it really is hard to say, but what's very clear is even at this very early stage, the state of repair or disrepair of that bridge, particularly

when you talk to locals here who feel that it's been in a state of disrepair for too long ...


ROBERTSON: ... that is going to be central to this investigation. But the mayor seemed to imply -- seemed to imply from his whole sentence when

he spoke there that there were issues about the maintenance and the maintenance of the upkeep of this bridge.

QUEST: Nic, thank you. Nic Robertson in Genoa tonight. And so to Turkey where the President is vowing to boycott all electronics made in the United

States. He did so as the lira was stabilizing, which is still down 40% on the year.

In the face of Donald Trump's tariffs, President Erdogan says Turkey doesn't need any American imports.


RECEP TAYYIP ERDOGAN, PRESIDENT OF TURKEY (Through a translator): We will produce every products we are importing from abroad with foreign currency

here and we will be the ones exporting these products. We will impose a boycott on US electronic products. If they have iPhones, there is Samsung

on the other side.


QUEST: And he didn't just recommend Samsung as an alternative. He also suggested the Vestel Venus, it's the Turkish made smart phone though even

he -- if he does persuade the Turks to give up their iPhones, the tech boycott won't be easy. Now, let's just take this so-called Vestel Venus

5000, that runs on android software. Who makes Android or who owns Android, it's made by Google, although it is open source.

Then there's the Venus v5. That runs using American Qualcomm chips. So, it remains to be seen if President Erdogan will even impose an official

boycott or even if the ordinary Turks are worried.


UNIDENTIFIED MALE (Through a translator): I am thinking the dollar rises because this country has not been governed. The economy is managed badly,

because of that the dollar rises.

UNIDENTIFIED MALE (Through a translator): I think the Turkish government does not know about economy because there are no real economists within the

government. The administration is based on family relations.


QUEST: John Defterios is on the ground in Istanbul joins me now. This idea of a boycott of American technology, it's politics and it's hyperbole.

It doesn't stand much chance of reality.

JOHN DEFTERIOS, EMERGING MARKETS EDITOR: Yes in fact, Richard, we had major cross currents today. The first rally in the lira in three days and

we have the hard line for President Erdogan calling for the boycott and this was followed up by his son-in-law, now Finance Minister taking a swipe

at the dollar at the same time.

He suggested even though the dollar is rising and he's starting to lose its luster and that role as the reserved currency. He spoke at the 17th

anniversary of the party, his father-in-law founded, the AK Party, today in Ankara. Let's take a listen.


BERAT ALBAYRAK, FINANCE MINISTER OF TURKEY (Through a translator): The dollar has lost its credibility. We will ensure that steps will be taken

to continue to do business with our own money. We will see that our Turkish lira will strengthen. If one country's economy does not overcome

the difficulty that it faces, it will have a butterfly effect and this has the potential to shake all global trade, foremost in Europe.


DEFTERIOS: And a little bit of a threat there, Richard, saying if we don't solve this problem in Turkey which represents 1% of global GDP, it could

particularly spill over to Europe right now because of the exposure of the European banks of course to Turkey, about $150 billion. No word on

interest rates. No word about the International Monetary Fund. The finance Minister following the line of the President saying, "We'll tough

it out on our own."

QUEST: And isn't that the problem? Because even if they do attempt to tough it out on their own, the underlying economics are against them. And

as we've talked about on this program last week, that is the biggest issue. They have a balance account that they can no longer be sustained. They've

got a falling currency, and they have very high inflation. That's the problem.

DEFTERIOS: And Richard, this is a problem that's been surfacing for the last two years and President Erdogan thinks he can ride it out on his own.

A $57 billion current account deficit is what you're referring to, inflation nearly at 16%. I'm starting the think about this as the sleeper

event that could creep up on emerging markets because of the vulnerability of Turkey, but there's five other emerging markets that have been


We've seen the initial contagion of this with Russia and the South African rand losing 10%. But we have 30 emerging markets analyzed by the Institute

of International Finance suggesting that their overall debt to GDP is running at 200%. It's crept up since the last financial crisis, Richard.

So we have to watch this carefully and find a common ground, and not have the arguments between Trump and Erdogan, where we are today.


QUEST: John Defterios in Istanbul tonight. Thank you. And why we are reminding Turkey as US political risks are very real in this economy, the

sun is shining on the German economy. GDP is up 0.5% on the last quarter. It beat estimates and it shrugs off Trump and trade fears. Carsten Brzeski

is in Frankfurt. The Chief Economist ING Germany. These numbers taken on the back of the US numbers are also good, but if we look at the rest of the

Eurozone, we know there that there has been a slowdown. So is Germany once again having to do all the heavy lifting?

CARSTEN BRZESKI, CHIEF ECONOMIST, ING GERMANY: Well, together with the Netherlands right now because the Dutch also outperformed the rest of the

Eurozone. But yes, I think Germany remains the powerhouse of the Eurozone. And normally you would have expected the other countries actually to

overtake the German growth numbers. They haven't. So, actually it's still up on the German shoulders to push on the Eurozone recovery.

QUEST: Now, of course, Europe and the union reports quarter on quarter on quarter as opposed to annualized, which always makes it difficult when you

see a 0.5% versus a 4.1% or 4.2%. What do you expect in Germany will grow in 2019?

BRZESKI: I think for the rest of this year and also for 2019, I'm expecting Germany to grow around 2%, which is not the 4% you see in the US,

but which is taller than -- which is actually more than the so-called potential growth rate of the German economy because Germany currently is

really benefiting from low interest rates. The ECB's monetary policy, strong domestic demand.

And then everything above 2% would depend on how the entire trade tensions will play out. Will we get a trade war between the US and the EU? Maybe

we'd also have to realize downwards driving growth numbers. If we won't get it, I think Germany could end up with anything north of 2% over the

next couple years.

QUEST: And at the moment, it's too difficult or uncertain to factor in the trade tariffs, the effect at the moment, we know, but the longer-term

effect if the situation gets worse, can't be accounted for yet.

BRZESKI: Not exactly what the second quarter GDP numbers showed. Right now, we only have a kind of confidence impact on the German economy which

is extremely small. The only tariffs that are there are on aluminum and steel. That's everything. So, therefore, if we get a sentiment- a

negative sentiment loop in the next couple of months, yes, it could leave its marks on the German and also the European economy, but right now -- and

that's the interesting -- right now, all these trade tensions have not had any impact, any significant impact on the entire Eurozone.

QUEST: In terms of Angela Merkel, with this sort of economic performance, does it take the pressure off her? Under huge enormous pressure because of

migration and the internal disputes within her coalition, but does it take that pressure off that the economy is doing so well?

BRZESKI: Somehow, not entirely. Because the funny thing right now, when you look at the numbers, Germany is almost enjoying a golden decade. So

this is -- they are now go into the tenth year of almost consecutive growth. Never ever before had so many people a job, wages are increasing,

the economy is really booming, but somehow most people do not feel as if they are in the middle of an extremely booming economy.

So therefore, other issues like migration, like integrating the refugees, but also like the lack of structural reforms, clearly running behind in

terms of digitalization, is also feeding into this entire political debate right now in Germany. So, therefore, I'm afraid that the strong economic

numbers do not really take the pressure off Mrs. Merkel.

QUEST: Right, but Carsten, in your role as Chief Economist, if you look at the whole Eurozone and put it into that wider context, the ability of the

Eurozone, do you feel that they have put in place sufficient fiscal macro potential measures that the -- obviously, it's safer than it was in 2008

and 2009, but what about things like fiscal deficits? What about the way they run it on an annual basis?

BRZESKI: I think, this is -- you're right, the most sensitive point, what the Eurozone does need as a whole is more investment. More investment

always is contradicting the rules of the annual growth, namely not running fiscal deficit. I think Germany is the best example.


BRZESKI: So Germany is running a fiscal surplus, at the same time there's a high need for further investments to maintain the strong role of Germany

in the European and global economy. So, therefore, I think European politicians, yes, they have made the Eurozone -- the monetary union much

more crisis resistant, but to go ahead -- they would need to open more possibilities for investments.

QUEST: Good to see you, sir. Thank you for the perspective. Please, you always have an invitation to come and talk here on "Quest Means Business."

Thank you. As we look at European stock markets that finished the day mostly flat, bank stocks remained under pressure. UK unemployment fell to

a 43-year low. And the Dow is in triple digits higher with the S&P snuffing a four-day losing streak.

The Tapestry -- I always feel the need when you mention companies like Tapestry which of course is the old Coach, it still has Coach as part of

it, but it's now called Tapestry had strong earnings boosting other consumer stocks.

As we continue tonight, taking a swipe at Tinder, the co-founders of the dating site say they've been stood up for billions of dollars.

QUEST: Let's go to Elon Musk's attempt to take Tesla private where the board of directors seems to be saying well, maybe not quite so fast. The

board itself has set up a committee to study Elon Musk's plans to go private and it says more than one hand must be on the wheel for such a

momentous move.

Claire Sebastian is here to put that perspective. Clare, the board haven't obviously said no, they want more details. They know now that it's the

Saudis with the Saudi sovereign fund, so what is the board's reticence here?

CLARE SEBASTIAN, CORRESPONDENT, CNN: Well, Richard, I have to say this is about the first normal thing that has happened in this whole process.

Today, we got the first SEC filing which is an 8K filed and that was the one announcing that the board set up a special committee to evaluate this

deal. Well, they did say though is that nothing else so far has been decided. I want to read you a quick statement from that quote, they said,

"The special committee has not yet received a formal proposal from Mr. Musk regarding any going private transaction, nor has it reached any conclusion

as to the advisibility or feasibility of such a transaction."


SEBASTIAN: So, obviously, it's become increasingly clear, you could say glaringly obvious from the statements we've heard from Musk over this past

week that he doesn't actually have a proposal. He said that he's talking to the Saudis. He says that he is talking to other investors. He said he

wants to keep existing shareholders. It's not exactly clear how he's going to do that. So now we have that confirmed by the board.

So, the next step is for him to come up with a proposal, then they have to negotiate. The board might want more money, for example, they might want a

higher premium for shareholders and then we have to go to a shareholder vote, which sets up a whole wealth of other complexities in there, so it

could be a long process.

QUEST: And at the same time, he owns about 20%, I think, of Tesla. So he's a major shareholder in his own right, but if and when his does come

forward with a bid, his dual roles as shareholder or multiple roles as shareholder, Chairman, CEO, whatever other roles he may have, they would

all be in conflict and he would be recused in many of the debates at the board level.

SEBASTIAN: Well, certainly, there have been reports about that. I think it's interesting that he's been saying in several of his statements that

he's doing this in his capacity as a bidder for Tesla, not the CEO. It's unclear at that point whether that was something that was advised by his

lawyers after his initial tweet, but he'll be looking to see how many of the other shareholders, obviously not his stake and perhaps not that of his

brother which we think makes up about 25% of the total, how many other shareholders will come on board. That is entirely unclear at this point

whether index funds will actually be able to do this, whether non- accredited shareholders will be able to do this.

There's a lot that's still unclear about this and I think that's why, Richard, you saw the stock price dip today about 2.5% after a couple of

flat days. People are less confident at this point that they are going to see a good deal or at least see one through.

QUEST: Okay, but Clare, with the short passage of time since the tweet and since the announcement, what's the feeling in the markets and amongst

investors? Does it make sense for Tesla to go private?

SEBASTIAN: I think it's interesting with Tesla, Richard, because you saw this time a week ago and you still see now that the investor community is

deeply polarized. There are those who still believe deeply in Elon Musk. They are willing to stay with him. They want to keep their shares and move

over to a private company if that's what he sets up. There are those who are increasingly frustrated.

You see Elon Musk is someone who keeps trying to fly in the face of the regulations on wall street and who can't seem to get this process off the

ground in a way that inspires confidence.

QUEST: Clare, you're going to have your work cut out for you in the days, weeks and months ahead as we watch this one if it goes forward. Thank you.

Clare Sebastian is in New York. Let's stay in New York.

We're all familiar with the dating app, Tinder, in some shape or form. Well, now the co-founders of Tinder and others are suing the parent

company, Match, for billions. They're also leveling serious charges against Tinder's former Chief Executive. Match has fallen more than 3% on

the news.

Laurie Segall has been doing some exclusive investigative work on this. Laurie, who's suing who and for why?

LAURIE SEGALL, CORRESPONDENT, CNN: It's very interesting. It's an explosive lawsuit. I think you have to remember that Tinder wasn't just

founded as Tinder as a separate company. It was founded under IAC. So, there's always been this complicated relationship between the founders and

the early employees at Tinder and IAC, especially as it exploded. And now these founders are saying that they are victims of corporate greed and that

they are owed billions of dollars. Check it out.



SEAN RAD, CO-FOUNDER, TINDER: This contract said that if we work hard and if we build a successful company, which we did, that we would be

compensated with the value that we created.


SEGALL: It's an explosive lawsuit. At the center of it, major media giant IAC, which owns, Match Group, the parent company of Tinder.


RAD: They violated their promise to us. They manipulated financial information. They lied and essentially paid employees billions less than

they actually owed them.


SEGALL: Sean Rad co-founded Tinder in 2012 while working at an incubator owned by IAC. Now, he along with former and current employees are suing

IAC alleging they purposely lowered the value of Tinder.


SEGALL: Why do you think IAC, Match, tried to undervalue the company privately?

RAD: Because they wanted to pay us less. There is a contract here that says that they have to pay us based on the fair value of Tinder, and they

just did the most egregious, insane things to fabricate that valuation, corrupt it and get a valuation that objectively is ridiculous.


SEGALL: The suit says IAC installed Greg Blatt as Tinder CEO ahead of the valuation process. His role according to Rad and the lawsuit, to purposely

paint a pessimistic view of Tinder to the banks valuing the company. That included downplaying new feature and withholding financial data.


RAD: At one point, there was even a revised financial projection internally that far surpassed the projections that were given to the banks

and they ignored that and they ignored that that even existed. The banks just had to go off of the information that they were given.

SEGALL: Did you ever try to go to them and say, "I don't think you have all the data," or "I think this is being undervalued. Here are the facts?"


RAD: The executives who are part of this lawsuit attempted to tell the truth to the banks, and when they did they were threatened to get fired.


SEGALL: In a statement to CNN, IAC called the suit meritless and said that it would vigorously defend against it. It said Match went through a

rigorous valuation process with two independent banks and that Rad and other executives who left the company may not like the fact that Tinder jas

experienced enormous success following their respective departures, but sour grapes alone do not a lawsuit make.

IAC valued Tinder at $3 billion in 2017. That valuation relied on the information provided to the banks.


ORIN SNYDER, ATTORNEY, GIBSON, DUNN & CRUTCHER: Two years before the correct valuation, the defendants themselves valued tinder at $3 billion.

Fast forward two years, 600% growth in revenue and the defendants say it's still valued at $3 billion. It's absurd.

SEGALL: Some would argue that in that time, you had all of these different apps doing similar things that Tinder was doing and gaining in popularity

and that could have been a part of slowing in growth.

SNYDER: Anyone who said that would be wrong. Everyone who looked at this company understood that in 2017, Tinder was the number one product in its

category and it was going to the moon as it continues to grow today.


SEGALL: The lawsuit seeks at least $2 billion in damages, suggesting the company was undervalued by at least $9 billion. The suit also alleges that

soon after Blatt was named Tinder's CEO in late 2016, he groped and sexually harassed Tinder Vice President of Marketing and Communications,

Rosette Pambakian at a company holiday party.


RAD: I actually reported that misconduct to the company and the board -- and the board had a choice. They could either do the right thing and

properly investigate and take the right action, or they can keep that executive in a place where he can finish the job of corrupting the


SEGALL: Did you specifically talk to Blatt about these allegations?

RAD: Yes, I did.

SEGALL: And what was that conversation like?

RAD: I was threatened. I believe it was, "If you take me down, I'm going to take you down with me."


SEGALL: CNN has reached out to Blatt and IAC for comment and has not heard back. It's not the first time Tinder has been wrapped up in a sexual

assault lawsuit. In 2014, former Tinder VP Whitney Wolfe sued Tinder, Match and IAC. Wolfe accused co-founder Justin Mateen of sexual harassment

at Tinder and Rad not stopping it. That lawsuit was settled out of court with no admission of wrongdoing.


SEGALL: We can't ignore that someone who was accused of sexual harassment is now part of a lawsuit that's claiming sexual harassment . How do you

negotiate the two?

RAD: Look, Justin, along with all the employees, was also made a promise. As far as, you know, the past and his breakup with Whitney and his conduct

there, he's paid the consequences for that. He was fired from the company. That's not relevant to the fact that this company made promises to all the

Tinder employees including Justin and reneged on those promises and overlooked the contracts they had with us.



SEGALL: And Richard, we've heard IAC and Match respond to many of these allegations but we didn't hear back from them when it came to the sexual

harassment allegations. I am told, we will have a statement coming soon. As you can see, some very serious allegations against this company.

QUEST: Very serious and extremely interesting and almost voyeuristic as one listens. I mean, it's got it all. It's got sex, money, the whole lot.

One question though. Tinder itself -- how successful does it continue to be bearing in mind all the other apps and the segmenting of the dating app


SEGALL: Earnings just came out last week and it showed tremendous success and so much so that it gives them a little bit more of a case when you're

looking at it on -- looking at these numbers now which show that Tinder accounts for much of Match's success and it's a number that's only growing.

So you had years ago in the private valuation some of these executives saying, "Well, growth is going to stall, it's not going to do well." It

was the most popular app according to Facebook in all of July. So, that's just not true.

It will be a who's who and it will be interesting to see how they defend this. You can expect a lot to come out. The attorney that's representing

Sean Rad and these plaintiffs is very well known in the tech world, Richard. He represented Facebook. He's represented Apple and Uber and

he's done so successfully, so it will be interesting to see these guys go up against this major media company.

QUEST: And you will be there to watch every step of the way and to report back to us in great detail. Thank you. Laurie Segall with me. As we

continue tonight on "Quest Means Business" coming from London, gaining strength, losing respect, the dollar's summer time rally continues and some

believe its dominance will not last. But that begs the question of what's pushing the dollar higher and the ability of it to continue.

Hello, I'm Richard Quest. There of course is more "Quest Means Business" in just a moment. When Russia's Foreign Minister says countries will start

abandoning the dollar if Washington doesn't change course, and when a former White House staffer has dominated newscasts worldwide, her book is

only now starting to move its way at the bestseller list.

As you and I continue, this is CNN. And here on this network, I promise you, facts always come first.

The Italian authorities have revised the number of people who died from the shocking bridge collapse in Genoa. It now says 26 people were killed and

15 people have been wounded. A section of the Morandi Bridge crumbled at about noon local time during thunderstorms. Crews are still searching for

survivors and bodies and the bridge that was built in 1968, was undergoing maintenance.

Police have searched three addresses in the English midlands after a suspected terror attack outside Westminster in Parliament. Two people were

hurt when a man drove a car into cyclists and pedestrians. Officials says the suspect is a British citizen who originally came from another country.

Five European countries have agreed to take migrants rescued off the coast of Libya by the Aquarius ship. France, Germany, Portugal, Spain and

Luxembourg will take in the 104 migrants on board. Malta and Italy have refused the ship dock on Monday.

Dozens of cars were burned in Sweden in what officials are calling an organized act of vandalism. Most of the vehicles were torched in and

around Gothenburg, which is Sweden's second largest city. The police have made two arrests so far.


QUEST: A recent uptick in the violence comes ahead of national elections next month.

The White House Press Secretary Sarah Sanders, said she could not guarantee that President Trump has ever used the "N" word. Mr. Trump has denied ever

using the word. His former aide, Omarosa Manigault-Newman, claims she heard a tape of him saying it. Sanders says she had never heard the

President use the term.

So, the economic chickens are coming home to roost, and certainly when it comes to the emerging markets. The Indian rupee has hit a record low

against the US dollar, as the fallout of the Turkish currency crisis continues, and now, some emerging markets are starting to question the role

of the US dollar and thereby the United States plays in the global economy.

And as we discuss this, keep in mind, the dollar is the world's number one reserve currency by a long measure. It's a petro currency, it's the one

used as the backbone of trade. So, now factor in the idea that for example Turkey, Turkey's Finance Minister saying that the dollar has lost

credibility and Turkey's large debt in dollars is of not really much concern. Then of course you get to the point that it becomes more

expensive to repay these debts as the lira goes down, so the dollar of course goes up. If your debts are in dollars, you need more liras to pay

them off.

And so to Russia where Russia is also suggesting that the dollar could shift its move into the currency market as the reserve currency of the

world. Sergey Lavrov is visiting Istanbul at the moment and he corrected and he talked about and criticized the US sanctions.


SERGEY LAVROV, FOREIGN MINISTER OF RUSSIA, (Through a translator): I'm certain that with such abuse, the role of the American dollar as the world

reserve currency will weaken and more countries, even countries not affected by the American sanctions, will get away from dollars.


QUEST: It's not just Russia, wherever you look, China as well, trade tensions are starting to show. New data in the case of China is showing

investment at a two-decade low. And the common thread throughout all of these is without a doubt the US dollar.

Joining me now is Eswar Prasad, he is a senior fellow at the Brookings Institute and author of the "The Rise of the Renminbi," joins me now.

Let's talk about this in some detail. Is the dollar under threat in any shape or form as the reserve currency as a result of what we're seeing at

the moment?

ESWAR PRASAD, SENIOR FELLOW AT THE BROOKINGS INSTITUTION: There is much talk, Richard, about shifting away from the dollar and many countries are

frustrated by the dominance of the US dollar and the fact that they have to rely on a dollar-based financial system to conduct international

transactions, but the reality is that there isn't much of an alternative.

As you pointed out, the dollar remains the dominant currency in international trade and finance. About two-thirds of the world's foreign

exchange reserves are handled in US dollars and since the financial crisis, that share has barely budged. There are certain currencies like the

Chinese renminbi trying to make a move, but the chances they will supplant the dollar are pretty slim, again, because there really is not much of an

alternative to the US dollar right now.

QUEST: If there's no alternative, what purpose does it serve for these countries to criticize, and more crucially, bearing in mind their own

economies are in trouble. Certainly the case of turkey and Russia, then you ask the question, well, they just stand to make a bad situation worse.

PRASAD: What they're trying to do is basically send a message domestically - they have said their economies face maybe not the result of their own

policies, but perhaps because of these inimical policies undertaken by the US, that's of course very easy for some to maintain when the US continues

to take actions that might be interpreted as hurting those economies.

When turkey's lira was falling, Mr. Trump decided to impose tariffs, interpreting the move in the lira as somehow being directed against the US,

which it certainly was not. So it will have Mr. Erdogan in Turkey to make a plausible argument to his populace that in fact, the US is kicking Turkey

when it is down.

So the US is not helping its case right now, but these countries are not helping themselves either.


QUEST: Right, now, on that point where Turkey is concerned, at the end of the day, it doesn't really - the battle with the US to some extent is a

side show in that if Turkey doesn't change its macroeconomic policies, it becomes a little bit academic because the policies themselves are driving

the currency down and making a bad situation worse.

PRASAD: What is really driving the lack of investor confidence, both domestic and foreign investors in Turkey, is the fact that Mr. Erdogan

since his re-election in June took steps to appoint his brother-in-law as the head of the Treasury and Finance Ministry and has made it very clear

that he's not going to support the Central Bank if it wants to raise interest rates in order to preserve the currency's value and to fight

inflation which is now about 15%.

In fact, he's referred to interest rates as the mother and father of all evil, giving foreign investors no confidence at all that he is going to

allow the Central Bank to hike rates, and indeed, in July, the Central Bank should have raised interest rates, it did not. That I think is the key


Now, of course the fact that the US Federal Reserve is on the rate- tightening cycle at this stage and Mr. Trump has imposed sanctions and tariffs on Turkey is adding fuel to the fire and it allows Mr. Erdogan to

argue that what is happening in Turkey and to the lira is a consequence of US actions, not Turkish policies, but the reality is much as you point out,

it's really Turkish policies that are the key factors here.

QUEST: Finally and briefly, Ken Rogoff speaking to us last week, Ken said that this was all going to add - and I'm paraphrasing - it was all going to

end somewhat badly and probably with the IMF having to come into pick up some of the wreckage. Do you think that, too?

PRASAD: If Mr. Erdogan is not willing to do what is needed with domestic policies, especially with interest rates, there's going to be no recourse

back to Turkey. Mr. Erdogan has talked about looking for friends and allies abroad, but I think it's unlikely that Russia, Turkey, Qatar, China

are going to be able to help Turkey in this case. It's really going to be up to the IMF to bring Turkey back on its feet and help restore investor

confidence if Turkey cannot do it itself.

QUEST: Eswar Prasad, thank you for joining us. Still ahead, a former White House aide tell-all book has been slow to climb the bestseller list,

Omarosa may not be getting the reception that she had hoped for.


QUEST: Fantasy football season is about to begin in the United States, and a new league says blockchain can make people care about fantasy sports like

they were the real thing. The Crown League as it's called says it will let fantasy players go pro. Fans will each own a part of a professionally run

fantasy football team and share the prize money afterwards. The whole thing will use blockchain to keep tabs on all the results.

Dan Nissanoff is the founder of the Crown League and joins me now from New York. I love the idea and I love the way it's been put together, but I

have a natural cynicism at the moment when anybody starts saying they're about to use blockchain as if it's sort of a panacea for every ill. So

tell me what does blockchain give you?

DAN NISSANOFF, FOUNDER AND CEO, CROWNTHROWN INC.: Richard, that's a great question. Blockchain gives us the opportunity to allow the public, massive

amounts of people, to actually become owners of a professional sports team.

Before blockchain, you could only do that by taking a company public. Blockchain essentially now allows us to take the league and 12 franchises,

12 teams public, and offer opportunities for the public to invest in the Crown League.

QUEST: If they invest in you, what do they get?

NISSANOFF: They get three things. They get the right to governance, so they get to vote on critical matters associated with the league and

associated with the teams, they also get to participate in the profits of the Crown League.

So, in traditional sports entertainment platforms, you make money by aggregating fans around entertainment and then selling sponsorships,

advertising, merchandise, live event tickets, we offer all of that and will instead of that money going to the owners of a traditional sports team, it

will go to the public, which are not only the owners, but the fans of these teams.

QUEST: This is again another enterprising idea and one of many in a time - I guess, at the end of the day, is this an investment or is this something

for the fans? If it's an investment then - you'll probably tell me it's both, but I suggest there needs to be an element of love of what you're

doing rather than necessarily worrying about the EPS and the PE and ratio and the amount you're going to get back.

NISSANOFF: So, we actually call this investment gaming. We've coined that term. The Crown League allows you actually to invest in something that is

also entertaining, that you have a passion for. When you buy stock in a company like Amazon, the way you consume that investment is by going onto a

site and tracking the graph to see if you're making money or losing money.

Here you get to consume your investment by actually watching football, by watching the game you love. The better your team does, the more money you


QUEST: All right, what sort of sums are we talking about here, A, in terms of the investment, and B, the possible return?

NISSANOFF: So, the Crown League launches its public offering of its tokens where you can invest in the league for as little as a dollar. Once we

launch the actual sale of the teams at the end of this year, the entry point will be fairly minimal. We haven't published the starting price of

our tokens, but it will be accessible to the average person.

QUEST: I feel a small investment coming your way from "Quest Means Business." No, no, we'll go for the least amount we can so that we can

follow our investment and our teams and see and put it to the test and in 12 months time or two years time, and see how we've done. Anyway, good to

see you, sir.

NISSANOFF: We'll look forward to that. Thank you so much.

QUEST: I want my money back. Thank you. It was a rough day for crytocurrencies. Bitcoin fell below $6,000.00. It's now just a smidgen

above it, but as you can see it's off 2.5%, 165 down, that's some 6,000.

Investors dumped other crytocurrencies as well. Ethereum was off 8%, Litecoin coin fell 7% and Ripple dropped over 4%.

You want to keep on top of the day's business headlines in just 90 seconds, then try our Daily Briefing Podcast. It's updated twice a day, before and

after the closing bell - the opening bell on Wall Street. Alexa, and your Google home device, cnnmoney/briefing is all you need to say to hear our

dulcet tones. We'll be back in a moment.


QUEST: One of President Trump's Cabinet members is under close scrutiny for alleged conflicts of interest. A government watch dog says the

Commerce Secretary, Wilbur Ross, should have recused himself from working on policies that directly impact his assets. CNN's Cristina Alesci has the




DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We have the legendary wall street genius, Wilbur Ross here. He's our Secretary of Commerce.


CRISTINA ALESCI, CORRESPONDENT, CNN: He's a Wall Street wiz with the kind of wealth the President finds appealing.


TRUMP: In those particular positions, I just don't want a poor person. Does that make sense?


ALESCI: But while Commerce Secretary Wilbur Ross has kept a low profile, quietly keeping away from the presidential spotlight, reports of ethnically

questionable dealings are piling up. Now a government watch dog group is calling for the tycoon turned Cabinet member to be investigated.

In a 100-page report to the Inspector General obtained by CNN, the Campaign Legal Center lays out several cases in which it says Ross appeared to

engage in criminal conflicts of interest.


BRENDAN FISCHER CAMPAIGN LEGAL CENTER: We're hoping that the Inspector General will investigate Commerce Secretary Ross to preserve the public's

trust in government and to demonstrate that ethics still matter.


ALESCI: After Ross joined the administration in 2017, he was either supposed to part ways with investments that may influence his work or

recuse himself from matters that presented conflict. For example, he'd need to divest from a company called Invesco which planned to invest in

steel before he worked on a policy affecting the steel business.


WILBUR ROSS, COMMERCE SECRETARY OF THE UNITED STATES: The tariff actions taken by the President are unnecessary to revive America's essential steel

and aluminum industries.


ALESCI: One of Invesco's subsidiaries posted a multi-billion dollar Chinese steel deal soon after Ross took office. As for Ross, he claims he

had divested, filling out this form and signing on the dotted line for the government ethics office. The only problem is ...


FISCHER: He maintained tens of millions of dollars in investments in assets that potentially posed an ongoing conflict of interest.


ALESCI: Still, Ross says everything he's done is on the up and up.


ROSS: Everything that's been done has been done in compliance with the office of government ethics.



QUEST: Cristina Alesci with this story of Wilbur Ross, there will be those who will say that such issues and conflicts of interest were inevitable

when you had so many wealthy people going into the highest echelons of government.


QUEST: Now to the markets, let me take you over and show you exactly what's been happening. The markets, the Dow Jones Industrials, interesting

today for us today just to take a look at it because it opens higher. We had a wobble right about 10:00 in the morning, but it stays up for the

course of the day. And, arguably you could say, a half a percent gain, 112 points, arguably, you can say middle of the summer, low volumes, but I

think it is interesting that it does hold up rather than go in the opposite direction.

Because for example, the S&P 500 also was up and in doing, so snapped a four-day losing streak. You will also look at Europe where there was a

whole host of different issues taking place in European markets. London had a frolic of its own with some results, XETRA DAX, I'm not quite sure

why it is showing that, but the only one that's actually showing up overall was Zurich and that these sorts of numbers in August, it pretty much means

flat. We will have a "Profitable Moment" after the break.

Tonight's "Profitable Moment," so the dollar rises and other currencies are feeling the effect. Well, South Africa's currency has fallen very sharply.

India's rupee is at an all-time low against the US currency. And you've got Turkey and Russia where leaders are both saying that the dollar is no

longer - or should no longer be a reserve currency.

The interesting part about all of this is that the dollar has the position it does as a position of strength even at a time when Donald Trump is

talking up the dollar. Remember, he said he wants a higher dollar. He wants a more value dollar. Well, that would have a problem in terms of

trade. It would make those US exports even more expensive.

So whilst he's got at the moment in the United States this issue of tariffs and trade on one side and a rising dollar on the other, what it ends up

doing for exports, we'll see in just a few months' time. A rising dollar is not necessarily good for the United States.

And that's "Quest Means Business" for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable.

I'll see you tomorrow.