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Quest Means Business
Tesla Stock Is Under Pressure Once Again; Pepsi Makes A Bet On Bubbles With A $3 Billion Deal For SodaStream; U.S. Markets Closed Higher Across The Board; The Bolivar Is Getting Its Zeroes Trimmed; It's Part Of Maduro's Magic Formula For Recovery; Greece Has Successfully Finished The Third And Final Round Of Its Emergency Loan Program; Greece Exits Bailouts Designed to Stop Debt Crisis; Pope Francis Breaks Silence on Catholic Abuse Scandal; Flooding Claims at Least Eight Lives in Southern Italy; Trump Takes a Shot at Fed Chairman for Raising Interest Rates; Iranian Foreign Minister: U.S. has an "Addiction to Sanctions" Problem; French Oil Giant Total Officially Withdraws from Iran; Kevin Spacey's New Film Takes in $618 at the Box Office; Dorsey: Twitter Has a Problem with Toxic Content. Aired: 4-5p ET
Aired August 20, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BIANNA GOLODRYGA, CNN INTERNATIONAL HOST: The Dow is at its highest level in months as the closing bell rings on Wall Street. It's Monday, August
20th. Tonight, market analysts are turning on Tesla and Elon Musk. I'll speak to one of the company's biggest champions.
Pepsi makes a bet on bubbles with a $3 billion deal for SodaStream. And the end of an ominous era, Greece is finally out of its bailout program.
I'm Bianna Golodryga and this is QUEST MEANS BUSINESS.
And tonight, Wall Street turns on Elon Musk. Tesla stock is under pressure once again. Shares were down as much as 4 percent, crashing below $300.00
before recovering. America's largest bank, JP Morgan slashed its price target for Tesla to just $195.00 a share. It's a far cry from where Musk
claimed he'd secure funding for a private takeover. That was when it was $420.00 a share.
The Tesla CEO is also back on late night Twitter. In a 2:30 a.m. tweet at Arianna Huffington, Musk admitted his marathon shifts on the factory floor
are all that stands between Tesla and bankruptcy. Huffington wrote a plea for him to get more sleep. Musk says that is not an option.
Well, Ross Gerber is one of Tesla's most vocal and supportive investors. He is joining us in Los Angeles. Ross, you are still fighting for Tesla,
and a supporter of Elon Musk. Why are you so optimistic when others are turning sour?
ROSS GERBER, TESLA INVESTOR: Because I have the car and others do not. So they have no idea what they are talking about. I literally drive this car
every day, and it's the best car that's ever been made since the original Model T, so this product is a game-changer. So while everybody is
distracted, worried about what Elon Musk is doing at 2:00 in the morning, what he's done is built just an amazing, transformative product, and I
think that's being lost in this whole production.
GOLODRYGA: Well, the car has not gone without some of its issues and hiccups along the way. You've had whistleblowers, you've had the death of
a passenger who was driving in an autonomous car. Tell me about beyond the structure of a car, the structure of the company and the dire, some would
say dire financial shape that the company is currently in.
GERBER: Well, this dire financial shape with over $2.5 billion in cash and now we think the company's cash flow break even as of now and possibly cash
flow positive going into the next quarter, but the main issue is scale. Could they get to 5,000 cars? Could they get this to 10,000 cars? Now,
what they've been able to prove, at least in the last month is they can maintain an over 5,000 car a week runway for the Tesla Model 3, and they're
moving towards 6,000 cars and now, some analysts are saying they might even be at 8,000 cars by the end of the quarter.
And we're modeling 10,000 cars a week by the end of the year, so the truth of the matter is, things are going pretty well, because he's had to put in
a Herculean effort to make this work, but he is right, he has got to doing what he's doing to make sure that this gets to where it needs to be.
GOLODRYGA: If Tesla - Tesla without Elon Musk at the top?
GERBER: No, it's not, and we're betting on Elon Musk. I mean, this guy is a genius, and we can all give him a hard time when he's down, but this is a
guy who can land rockets on moving ships. This is a guy who has transformed our space industry and has now has one of the greatest
solutions for global climate change. It's so hot in the world, and we need Tesla to be successful, and Elon Musk is the driver of this. And some
people just like to kick a guy when he's down, but please.
GOLODRYGA: But he's not just any guy, he's the head of the company. He's the man who is tweeting, without admitting - even himself admitting that he
spoke to the Board about taking the company private. The SEC is launching an investigation. You've got headlines saying that Tesla suppliers fret
about getting paid. I mean, would this work for a CEO to act in such erratic ways at any other company?
GERBER: Well, first of all, the President of the United States is the most erratic person who has ever been on Twitter, and he's running the country
and somehow we're not all dead yet. So, I think that this modern style of management is new for a lot of people. I'm sure if Steve Jobs had Twitter,
we might have different feelings, too.
I don't know if I like the way he's handling his Twitter per se at this point, but, you know, once again, this is the modern world and this is the
way people communicate, including myself and the media.
[16:05:03]
GOLODRYGA: Elon has said that Tesla is going to be profitable and cash flow positive this year. If that doesn't happen, does your position on the
company and Elon Musk himself change?
GERBER: Not to the point of like if it's a dollar short or something. We've modeled out that if they make 120,000 Model 3s in the next six
months, they'll be break even or cash flow positive. So that's what is most important to us is that the cash flow drain stops. It doesn't
necessarily have to be a huge positive, but I think the main thing is taking the financial stress off the company of that - of very heavy CapEx
spending.
But what most people are discounting is that this pressure on Musk is making him a more disciplined investor in Tesla, and the way they're
spending money in Tesla and the way they've slowed down the spending money of money in Tesla is actually very positive for the shareholders.
So, I think this pressure on Elon is a good thing to have to run the company, to be more profitable or to be more sustainable, and I think
ultimately, when we look back at all of this, this will actually end up helping Tesla a lot be a better company in the long-term.
GOLODRYGA: Yes, he says this has been his worst year yet, so from your lips to - let's hope shareholders share your optimism going forward, and he
puts that - go ahead.
GERBER: Yes, I just wanted to say, I have yet to ever see a CEO work so hard to achieve his goals, put so much - his whole life into it. Honestly,
there are so few CEOs that even come close to putting in the effort that Elon is putting in to be successful. So we're going to back him and we
wish him the best and hopefully, he gets some rest, but at the same respect, get these cars out there, they're a game-changer.
GOLODRYGA: Yes, we all wish him the best, that is for sure. Ross Gerber, thank you so much. We appreciate it.
Well, the future of PepsiCo just got a little bit clearer. The company is paying over $3 billion for SodaStream, the Israeli company known for home
sparkling water makers. The deal is part of Pepsi's push into healthier products. CEO Indra Nooyi has split PepsiCo's offerings into three
categories: Fun for you, high calorie snacks and Doritos - it's like drinks and Doritos, and well, of course Pepsi. We have them on display here.
Better for you, things like diet sodas and smart food popcorn. There it is in the middle.
And then good for you, SodasStream will land in this group with products like the Naked Juice and the Sabra hummus. Brand management expert Bruce
Turkel joins me live from Miami, Florida.
So Bruce, Indra has announced that she's leaving the company. This is, I guess, her parting gift and parting decision - a huge decision as the CEO
with this acquisition. Is it the right one?
BRUCE TURKEL, CEO, TURKEL BRANDS: Well, what you said earlier, the segmenting of Pepsi products into those three areas, that's a very smart
way for them to deal with the different pressures they have.
Now, notice they didn't call the first group of products bad for you, they called them fun for you. So clearly, it's a very strategic program. And
the bottom line is, Pepsi sells soda, and they don't really care how it's made, how it's manufactured. They want to be in that distribution chain.
So in the world of customization that we all live in today, if you want to make it yourself, they want to make sure you're still buying it from them.
GOLODRYGA: You know, I remember SodaStream being a really hot product around five or six years ago. There were some celebrity endorsements. It
was buzzed about almost on a daily basis. I haven't heard much lately, and that begs the question, why now? And is $3 billion a bit too much?
TURKEL: Well, why now? I think that's quite clear. Pepsi is looking to maintain its competitive level, and they want to make sure that they are
taking all these different routes. Amazon has proved that direct to consumer is the future. And let's face it, if Pepsi doesn't do this,
Amazon will soon be selling Amazon soda and we will be going on our Echoes and our smart devices and ordering it. So they want to make sure that they
can put themselves into the area.
Whether $3 billion is the right number or not depends on a lot of things. I mean, the company wasn't worth that just a few years ago, so you could
question it. The bigger question is, is it critical to Pepsi's future plans? Do they need this to make sure that they're not sitting on the
wayside while they're watching us make our own custom coffee, make our own custom products, make our own custom soda.
GOLODRYGA: Well, it's clear that the trend line shows that the sale of sugary beverages and pop sodas have gone down, the sale of water has gone
up. People have become more health conscious. So what does this decision mean for Coca Cola, obviously, Pepsi's archrival?
TURKEL: Well, remember that Coca Cola had gone with Kuerig with their cold device and they look to walk down this same path just a few years ago, they
didn't have much success with it.
[16:10:04]
TURKEL: Does that mean it was a bad idea and will prove to be a bad idea now or does it mean the timing was wrong back then, and now, the timing is
right? I don't know the answer. What I do know is that Pepsi owns a lot of water brands, a lot of bottles that you buy, that have different names
on them that you like, are owned by Pepsi. So I think you can be pretty clear that Pepsi would build a brand extension model, where you'll be able
to use your SodaStream in order to incorporate those brand names.
Once again, Pepsi doesn't care where the product comes from, they only care that you buy it from them.
GOLODRYGA: And obviously like so many other companies, really watching that behemoth Amazon take over market shares from lots of different areas
wanting to compete and avoid having to have Amazon eat their lunch. All right, we'll have to leave it there. Thank you so much.
TURKEL: And eat their lunch or drink their water --
GOLODRYGA: Or drink their water, that's right, in this case at least. Well, U.S. markets closed higher across the board. Nike shares helped
boost the Dow. The S&P 500 also finished close to an all-time high. On Wednesday, the current U.S. bull market will become, get this, the longest
in history. This will be a big week for U.S. retail earnings. Kohl's reports tomorrow, Target on Wednesday and GAP on Thursday.
Also on Thursday, new tariffs are scheduled to take effect in the trade war between the U.S. and China. On Friday, Jerome Powell speaks at the Federal
Reserve's annual symposium in Jackson Hole. One trader told Paula Newton on "QUEST EXPRESS" that he's still optimistic.
(BEGIN VIDEO TAPE)
MATTHEW CHESLOCK, EQUITY TRADER, VIRTU FINANCIAL: We expect that U.S. earnings to be good for by and large, they were good. They took us to
these levels here. Now we're seeing more of a broader based rally, which is good. We're not just seeing this tech focused or the FANG names really
drive us to new highs, we're starting to see other companies participate and that's been the key to the strength of this market.
PAULA NEWTON, CNN CORRESPONDENT: Now, the earnings have been stellar, but what about the market's resilience or perhaps some would call it hear no
evil, see no evil about trade, just about some of the dark debt issues that have been coming, both from the fiscal point of view, both from government,
and in corporate debt. Any of those issues - higher interest rates, anything - give me something, Matt. Anything.
CHESLOCK: You know what, I'm normally kind of negative and bearish as a whole --
NEWTON: Cautious, right?
CHESLOCK: Yes, a little cautious is good, that would be nice. But I think right now, this is time. I mean, we're seeing - if we can get retail back
on board this week, we've got a lot of big retailers coming out, and this was after Walmart. So we have Kohl's and we have got Target, we've got all
of these other U.S. company retailers that are - we're hoping for good things. This is a good sign for the economy. This says that main stream
America is on board and they're using their money. So, I don't see anything right now. The worry for me was always the midterm elections.
NEWTON: Got you.
CHESLOCK: And I'm not so sure that's raising its head just yet.
(END VIDEOTAPE)
GOLODRYGA: The midterms just a few months away and I see some optimism there though. Well, Brazil, Zimbabwe, Turkey, and now Venezuela. The
bolivar is getting its zeroes trimmed; it's part of Maduro's magic formula for recovery. So, will it work? We're live in Caracas.
And Greece has completed one of the biggest economic bailouts in history. We'll hear from the country's former Finance Minister, Yanis Varoufakis
who says nothing has changed.
[16:15:00]
GOLODRYGA: Venezuelan President, Nicolas Maduro claims he's found the quote, "magic formula" to get his country's economy back on track. A new
currency, the sovereign bolivar slashes five zeros off of the old one. It effectively drops the bolivar's value by more than 90 percent after rampant
inflation.
He also announced that next month, the minimum wage will be multiplied by 60 times. It all comes as thousands of Venezuelans fleeing the crisis are
facing increasing hostility in the region. Brazil is deploying troops to the border after a mob destroyed a migrant camp. Peru and Ecuador are
putting restrictive measures in place to curb the exodus.
Stefano Pozzebon is in Caracas with the latest. So, Stefano, do the locals there believe this magic formula will get the country out of the economic
crisis it's in?
STEFANO POZZEBON, JOURNALIST: It's hard to believe so, Bianna, because what does formula do? It's effectively just taking five zeros out of the
previous currency, the strong bolivar, the bolivar fuerte as it was called. From today, starting today, all those zeros will be taken back. We're
going to stop paying coffees by the million. I remember yesterday, I paid for a coffee with about 2.5 million bolivars and this will change. I am
going to go back and spend and counting our currency by the units, like 25 bolivars, 20 bolivars.
This is - I have here, this is the new bolivar. So one thing that I wanted to show you, Bianna, one of the reasons why people are so skeptical about
this measure is that nowhere in this bank note you can read the sovereign bolivar, nowhere in this bank note - you can read that this note is
actually different from the previous one. There is a lot of uncertainty, a lack of clarification, a lot of traders are still asking themselves and
trying to ask the government what they're supposed to be doing with this monetary transition - uncertainty, lack of - a lot of doubt, a lot of doubt
is definitely what's pervading the ground here in Caracas.
Whilst it's been transpiring in this Monday here in Caracas that has been declared a bank holiday, because the government wanted to avoid any trouble
and wanted to smooth this economic transition as much as possible. So they declared today, all offices and all - and most of the shops are closed, so
this uncertainly still prevails, Bianna.
GOLODRYGA: And Stefano, I was just in Peru a few weeks ago, and while they said that they feel for Venezuelans there, and initially were opening the
doors for migrants to come in, as we mentioned in the lead, many of the countries are just overwhelmed - the neighboring countries - by the
thousands of Venezuelans fleeing by the day. What can be done?
POZZZEBON: Exactly. The Venezuelan economic and social collapse is spreading to the rest of Latin America, just a few days ago, the Ambassador
to the United Nations, Nikki Haley, was on the border between Venezuela and Colombia. She was on the border there to say to the Colombian authorities
and to show to the Colombian authorities that the U.S. where they are present and ready to help.
Hundreds of thousands of Venezuelans aren't leaving this country, fleeing this social and economic collapse and they're going south. They are going
mainly to Colombia, Ecuador, Peru as you mentioned, Argentina and Chile and Brazil, of course on the other side. The rest of the region has organized
themselves in a sort of informal group called the Group of Lima of countries - 14 countries in the west hemisphere trying to put pressure on
Nicolas Maduro and his government - on the Maduro government to try and open up the economy and try to at least decrease this massive, massive flow
of migrants that are spreading all over Latin America, Bianna.
[16:20:06]
GOLODRYGA: And it's just heartbreaking to watch, and of course, this comes just a week after that failed drone attack against Maduro as well. Stefano
Pozzebon, thank you for joining us.
Well, Greece has successfully finished the third and final round of its emergency loan program. The one that has stopped the country from going
bust. It has been part of the biggest economic bailout in financial history, with severe cost to the Greek people for nearly nine years.
Richard Quest reports.
(BEGIN VIDEOTAPE)
RICHARD QUEST, CNN INTERNATIONAL HOST: Greece, a country about to stand on its own two financial feet again. At midnight on Monday, Greece exited its
final bailout program.
(BEGIN VIDEO CLIP)
PIERRE MOSCOVICI, EU FINANCE CHIEF: There is no more program for Greece. There won't be any more program for Greece.
(END VIDEO CLIP)
QUEST: It marks an end, at least for now, to nearly a decade of financial life support.
(BEGIN VIDEO CLIP)
THANOS VAMVAKIDIS, BANK OF AMERICA, MERRILL LYNCH: This is a pause to development particularly now that the Greek economy has finally started
recovering, and the end of the program coincides with an agreement on the debt.
(END VIDEO CLIP)
QUEST: Greece's odyssey began in the wake of the financial crisis. Teetering on the brink of bankruptcy, the EU and IMF initiated the first of
three Greek bailouts.
(BEGIN VIDEO CLIP)
MOSCOVICI: Last night, we reached an agreement.
(END VIDEO CLIP)
QUEST: Hundreds of billions of dollars were provided, in exchange, for a promise of Greek government reforms, tax increases, and relentless
austerity for the Greek people. The drama played out on the streets of Athens and threatened to tear apart the architecture of the Eurozone.
Cutting with a cord from financial rescue won't be easy. Since 2010, the Greek economy shrunk by more than a quarter, and unemployment still hovers
around 20 percent.
(BEGIN VIDEO CLIP)
VAMVAKIDIS: There is no doubt that the fiscal assessment in Greece has been brutal. Historically, this has never happened before in any country.
(END VIDEO CLIP)
QUEST: Despite Europe's generous relief package, Greece's debt levels are still the highest in the EU. And in a July report, the IMF was skeptical
about the country's long-term prospects.
(BEGIN VIDEO CLIP)
VAMVAKIDIS: Is it going to be going back to old habits? Which will be very negative for markets, or we're going to finally see an ambitious
agenda for reforms that will lead to more investment and more growth in the long-term?
(END VIDEO CLIP)
QUEST: Many Greeks saw the terms of the bailout as a humiliating life sentence. Monday's exit may be the start of a long parole. Richard Quest,
CNN.
(END VIDEO TAPE)
GOLODRYGA: Well, since the Greek crisis started, Europe has gone through a political transformation, from the rise of populist parties to Brexit, not
to mention a whole new system to cope with financial crises.
(BEGIN VIDEO CLIP)
MOSCOVICI: Greece's transformative reforms have laid the foundations for sustainable recovery, putting into place the fundamental conditions needed
for sustained growth, for job creation, and for sound public finances in the years to come.
And while I say it's the end of the crisis, it's the end of a cycle for Greece, but it's also the end of a crisis for the Eurozone.
(END VIDEO CLIP)
GOLODRYGA: But while the European union touts the success of the reforms, the austerity has been brutally severe on much of the Greek people.
(BEGIN VIDEO CLIP)
MICHALIS KONSTANTINIDIS, ATHENS RESIDENT AND PENSIONER (Through a translator): I'm a pensioner, and on the 30th of every month, I await to
see whether my pension has been cut. What have I got to celebrate?
VICKY PAPACHISTOU, ATHENS RESIDENT AND ACCOUNTANT (Through a translator): The exit from bailouts doesn't mean anything because wages won't rise,
health services are terrible - everything is terrible, so it means nothing to us.
(END VIDEO CLIP)
GOLODRYGA: George Papandreou is the former Prime Minister of Greece and George Papaconstantinou is one of the country's former Finance Ministers.
Both men were in power during the first bailout and of course, gentlemen, I remember the effortless work that you put in, the hours of dedication to
keeping your country from going off the brink. Let me start with you, Mr. Prime Minister. Seeing where things are today, are things better than you
would have expected them to be or worse all these years later?
GEORGE PAPANDREOU, FORMER PRIME MINISTER, GREECE: Thank you for the question. Yes, we were at the brink of bankruptcy. We were able to stop
that. Luckily, it would be a great day to celebrate, but I don't think we can celebrate. I think as you mentioned in your program, the cost has been
huge - 25 percent loss of GDP, huge unemployment, a continuous sense of insecurity over these years. I think we could have done this with much
less pain much quicker.
[16:24:55]
PAPANDREOU: And of course, I think we also still need to further deepen reforms in our country. I would say that the only justification of this,
of course, is that in the very beginning there was - we were in unchartered waters in the European Union. No country really knew how to deal with
this. The European Union had never dealt with this, neither had even the IMF dealt with something within a currency zone.
So this was of course, a trial and error in the beginning, and unluckily, there was also a sense of punishment that Greeks had overspent. We did
have our problems, we did have our responsibilities. The previous government before I took over had ballooned the budget deficit and doubled
the debt, yes, but then we were there on making big reforms, and I think rather having more solidarity from the European Union, there was a sense we
had to be punished and Greek people have taken the brunt of these sacrifices.
I think we could have done it much more easily. Still, there would have been pain, but we could have come out much more quickly. There is another
one other point I would like to make is that, compared to other countries such as Ireland, Portugal, and Cyprus, we did not have the political
consensus inside Greece, which was there in those countries, and I think that played an important role in not giving the support but also the
credibility to the global markets and the European Union.
GOLODRYGA: Yes, that's an understatement. We all recall the protests and fires that we would witness there almost on a daily basis on the streets of
Athens. Mr. Finance Minister, let me ask you this because we talk about the country turning a page now, maybe very slowly, nonetheless turning a
page, but you have a third of the population of 10 million people near poverty. Unemployment has fallen, but it's still at 19.5 percent, the
highest in the Eurozone. What can be done to avoid a dark decade or a lost era and decade like we saw in Japan in the '80s?
GEORGE PAPACONSTANTINOU, FORMER FINANCE MINISTER OF GREECE: Well, if you look forward, the main problem the country will have is that nobody gives
its growth prospects exceeding 1 percent, 1.5 percent a year in the long run. That's really slow. It's too slow to repay the debt, it's too slow
to create jobs, it's too slow to increase people's incomes. And the only way to do better than that, is to have massive inward foreign investment.
And together, with something like a productivity revolution, that's the only thing I will say it works.
Because as it looks at the moment, we're going to be going in a slow growth road, of which we'll simply not be able to bring back what Greeks have lost
over those years. And make no mistake, given the situation we were eight years ago, nine years ago, a lot of what happened was completely
unavoidable, but it's true, just like Mr. Papandreou said before me, part of it was avoidable. Part of it was due to mistakes made both on the Greek
side and the part of our European partners.
GOLODRYGA: Mr. Finance Minister, let me ask you about the other crises that are continuing to play out throughout Europe. You've got Brexit,
obviously, you've got the economic crisis in Turkey. What has you most concerned as an expert and as somebody who has taken part in an economic
crisis?
PAPACONSTANTINOU: Well, we are now nine years since the Eurozone crisis started. We realized too late that it was not just a problem of one
country, Greece, we had a systemic problem having to do with the architecture of the euro, and the financial architecture of the Eurozone.
This was a discovery that came too late.
We started repairing the house. We have done a number of things, but we're not - we haven't yet been able to say that we have created an environment
which is - can withstand the future crisis better than it did the last one.
Because remember, today, for example, debt levels are higher everywhere than they were before. We have no mechanisms to deal with crisis better,
but we're still susceptible. So whenever we think of Italy and its debt level, when we think of Turkey destabilizing the whole region, it is very
easy for the whole of the Eurozone to succumb to a repeat of the crisis, and that's because we were not courageous enough at the European level to
complete the banking union, because the problem with the banks was at the core of the Eurozone crisis to move much further in the fiscal union, and
to have a truly economic union, which was supposed to be designed in the first place.
GOLODRYGA: And to add to that, you have the uncertainty coming from the U.S. and the President's tariffs, as well, with European traders. Mr.
Prime Minister, let me finally ask you --
[16:30:16]
PAPACONSTANTINOU: Indeed --
GOLODRYGA: Let me ask you about your thoughts on how one of your successors Mr. Tsipras is doing now in his job as prime minister running
the country. Do you have faith in the direction that he's taken the country thus far and going forward?
PAPANDREOU: Well, let me just add to the previous comment that Zoe Konstantopoulou(ph) made, Europe show that when it works together in unison
-- for example, when Mario Draghi came out and said we will do whatever it takes, we actually calm the markets.
So I think what came out of this is that, one hand, Greece said we want to remain, we're not leaving Europe, we believe in Europe despite the fact
that we think things should change. But on the other hand that we must believe that Europe does have capacity, we slowly built up some mechanisms,
we hadn't completed this project, we need to do more.
And I think more Europe is what will be able to help us mitigate some of the global crisis, whether it's called the refugee crisis, whether it's
dealing with Internet privacy, whether it's dealing with financial crisis or pandemics or whatever.
I think we need to see on this experience that going back to the populous, nationalist view of solving our problems is not going anywhere. We're not
going to solve climate change or refugee issue by going it alone. I think that's the first thing.
I think the second point that you asked me about -- well, we are paying dearly for the -- particularly the first few months of the Tsipras
government. We avoided bankruptcy in 2010, we almost went to bankruptcy in 2015 with capital control of the banks, almost left to Europe, and that
cost him, cost him some credibility, cost him in more borrowing and cost him more recession and therefore more cuts to be able to deal with the
budget deficit.
Obviously, after that, Tsipras fell in line, but as he was an anti -- to anti-adjustment program, he didn't really have much else to do, so when he
did fall in line, I believe he missed an opportunity to go deeper into making the necessary reforms for Greece.
My belief is that austerity was over emphasized when you get to do deeper reforms. I'll just give you an example --
GOLODRYGA: OK --
PAPANDREOU: When we brought in --
GOLODRYGA: OK --
PAPANDREOU: Transparency --
GOLODRYGA: OK --
PAPANDREOU: The E-prescriptions in the medical sector, we cut graph that cost like 50 percent, that's 3 billion, we cut -- that's as much as we make
and properly, that is in Greece. So there are ways that we should have had more emphasis on reform, less emphasis on austerity.
That's partly a European and the IMF blame and partly of course blame of successive governments that were not really committed to make a deal with
vested interest and make the changes necessary. That's what we need to do now --
GOLODRYGA: We'll --
PAPANDREOU: I think now we can think about the rules of the crisis, it's a new phase, but we need to move forward and research great capacities
sustainably following.
GOLODRYGA: And this phase and nonetheless a big milestone as well. Gentlemen, thank you so much for joining us, we appreciate it. And we will
be right back.
[16:35:00] (COMMERCIAL BREAK)
GOLODRYGA: Hello, I'm Bianna Golodryga, coming up on the next half hour of QUEST MEANS BUSINESS, Twitter's chief executive tells us the company may
have fallen behind in cleaning up the site. And one of the world's biggest oil companies is giving up on Iran as new sanctions loom ahead.
But first, these are the top news headlines we're following this hour. Pope Francis has acknowledged the Catholic Church's failure to act over
sexual abuse against children, describing his shame and repentance. A thousand children were alleged abused by priests in Pennsylvania.
Pope Francis says the children were abandoned and that no apology would ever be enough. And in Italy's Calabria region, authorities say at least
eight people have been killed in flooding. Heavy rains pushed what's normally a small stream over its banks.
It's not clear how many people have gone missing, but more than 100 rescuers are searching for survivors. And some news just in, U.S.
President Donald Trump is again criticizing the Federal Reserve over raising interest rates. In an interview with "Reuters", he said he was not
thrilled with Fed Chairman Jerome Powell.
Trump then said he should be given some help by the Fed. Historically, presidents private preserve the Fed's political independence by not
commenting on its policy.
The United States has a disease, that's according to Iran's foreign minister. The country is addicted to sanctions. In an exclusive interview
with Nick Paton Walsh, Mohammad Javad Zarif says he was wrong when he believed America had learned from past mistakes.
(BEGIN VIDEO CLIP)
MOHAMMAD JAVAD ZARIF, FOREIGN MINISTER, IRAN: I believe there is a disease in the United States, and that is the addiction to sanctions. Even during
the Obama administration, the United States put more emphasis on keeping the sanctions that they had not lifted rather than implementing its
obligations on the sanctions that they've lifted.
(END VIDEO CLIP)
GOLODRYGA: Meanwhile, Iran's oil minister says Total has officially left the country and pending U.S. sanctions forced the French oil giant to
unwind all its Iran operations including a major development to develop a natural gas field.
John Defterios joins me now. John, how significant is this move from Total?
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Well, it's one of the most telegraphed moves in the business, Bianna, that's for sure. But it still
comes as a blow for Iran because total is the first international oil company to go back in after the lifting of the sanctions.
In fact, Patrick Pouyanne; the CEO told me back in May during the CNN roundtable there, Vladimir Putin summit that sometimes politics and
business don't dovetail together, and this is one of those instances without exemptions they couldn't stay in the market.
And it boils down in large part because of Wall Street, that's where they get a third of their shareholder base, two-thirds of their financing comes
from Wall Street, they have physical plans in America. We also have to think about the repatriation of funds, once you make money in Iran because
of their reach of the U.S. Treasury and the Federal Reserve.
CNPC of China was in the front seat to take over the share, but I would imagine they're driving a pretty hard bargain because there's not a lot of
buyers out there. So Iran was not able to announce somebody taking over the state as Total decided to exit the market.
[16:40:00] GOLODRYGA: What was the point that Zarif was trying to make in his statements there that the U.S. has an addiction. Who was he speaking
to?
DEFTERIOS: Well, he was speaking in particular to the U.S. Congress because they have to follow through in the Trump sanctions and both houses
of course controlled by the Republicans right now. But as the trigger- happy Donald Trump using sanctions right across the board including with the ally of Iran right now which is Turkey.
Let's take a look at where Iran stood in terms of overall production and what's going to happen to their exports going forward. They're the third
largest producer within OPEC right now, Bianna, at 3.8 million barrels. But it's the exports, what I found interesting here.
They surged in the last couple of months at 2.9 million barrels a day. When I went to those fields at the end of 2015, they were pumping out just
a million of exports and they said they would try to get it up to 2.5, nobody thought they could get close to 3 million barrels a day.
The target by Donald Trump by the way is to take it down to zero in the second round of this snap-back sanctions in November. Realistically, FACTS
Global Energy is saying there should be about 700,000 barrels a day. We have to watch the big three buyers of that crude.
China, India of course are one and two, and number three is Korea. Korea has a sanctions on by the U.S. I don't see China bending because there
are investors in the projects right now, and India with a relationship between Donald Trump and Mr. Modi; the Prime Minister, you could see them
caving, but the Prime Minister of India said we're going to try to stay with Iran right now.
And again, they got a good deal because Iran doesn't have all the customers they had just six months ago.
GOLODRYGA: John Defterios, we'll have to leave it there, thank you, we appreciate it.
DEFTERIOS: Thanks.
GOLODRYGA: Well, Kevin Spacey's latest film is giving Box Office laugh a whole new meaning. The movie is called "Billionaires Boys Club", but the
money, well, it isn't exactly falling in, we'll explain more coming up next.
(COMMERCIAL BREAK)
GOLODRYGA: Well, Kevin Spacey's new film has taken just $618, that's right, $618 in theaters across the U.S. this weekend -- not millions or
even thousands. Just $610.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The (INAUDIBLE) investors to pay investors, oh, you knew?
UNIDENTIFIED MALE: I'm from Wall Street. You think people really get rich playing by the rules?
(END VIDEO CLIP)
[16:45:00] GOLODRYGA: The movie billionaire boys club actually gained a little momentum over the weekend after it took just $126 at the Box Office,
Friday. This all follows allegations of sexual misconduct against Kevin Spacey. CNN's Chloe Melas joins me now.
And a lot of people were having double takes right there, saying that number, thinking there's no way a movie can only gross $618, it opened in
10 cities.
CHLOE MELAS, CNN ENTERTAINMENT REPORTER: It is a jaw-dropping figure especially when you're talking about a man, a leading man in Hollywood who
at one point had a $52.5 million opening for "Superman Returns" in 2006. So obviously, that number right there is jarring.
Also there was a big cast in this movie, he had a supporting role, Kevin Spacey. You had Ansel Elgort who was a big heart drop here in the U.S.,
you had Emma Roberts, so you had some other big names that you would have thought might help carry this.
So it only opened in 10 theaters, right? But again, if you're going to compare it to some of like the worst movies of 2017 when it comes to Box
Office opening weekend, the movie, "The Comedian", starring Leslie Mann and Robert De Niro, that made $10,000 at the Box Office, so again, not a lot.
Maybe if this had opened in more theaters, they put no marketing behind this, and when you look at all the money in the world where Sony cut Spacey
out and recast him with Christopher Plummer.
The film studio behind this movie "Billionaires Boys Club", they said that they didn't have the budget to go do that. That's so expensive to have to
reshoot scenes and cut him out. We were hoping that people were going to still go see it.
GOLODRYGA: It just makes Gillie(ph) look like a cash cow, but if this was filmed three years ago, given everything that's developed over the past
year with the Me Too movement, why even release it at this point?
MELAS: Well, so first of all, if this had been years ago, probably would have done --
GOLODRYGA: Right --
MELAS: Millions at the Box Office. I think that they felt as though Kevin Spacey had a very small role in the film, well, not too small, but a
supporting role, and that the other big names would carry it.
I think that what this goes to show you is that the Me Too movement, when allegations come out against these very powerful men in Hollywood, oh, how
mighty they fall and it really does affect Box Office success. And that is, now studios have to look at this as an example as to, all right, well,
if we have some other leading men have allegations against them, it might hurt us.
So maybe better to recast or put the movie on pause and then revisit it later. But again, this is a perfect example of how the Me Too movement --
GOLODRYGA: Right --
MELAS: Can hurt Box Office success --
GOLODRYGA: Drizzle(ph) effect, and have we heard from Kevin Spacey at all?
MELAS: Nothing. I was just talking to Ashleigh Banfield who is an anchor here at CNN about this, and Cricket from Kevin Spacey, ever since those
first allegations came out against him in October and after our exclusive report at CNN about the misconduct on the set of "House of Cards" on his
show on Netflix.
So now we've heard nothing from him, you would expect some sort of a statement at some point, nothing.
GOLODRYGA: A lot of negative reaction though when he said he was going in for therapy and seem to equate his sexuality --
MELAS: Yes --
GOLODRYGA: With the accusations against him, which you know, the two are extremely --
MELAS: Coming out and apologizing, but also saying, well, I didn't mean to come on to that boy when he was a teenager, but I'm also gay. Again --
GOLODRYGA: Yes --
MELAS: To equate these two things enraged many people.
GOLODRYGA: Yes --
MELAS: But perhaps he still just doesn't have quite the right words of what to say.
GOLODRYGA: Well, I don't know how you respond to a movie opening at the "Billionaires Boys Club" too at that title, $618 --
MELAS: No --
GOLODRYGA: Wow, yes, Chloe, great to have you on --
MELAS: Thank you --
GOLODRYGA: Good to see you, thank you. Well, Twitter is facing a barrage of criticism from spam and abuse to misinformation. CEO Jack Dorsey opens
up to CNN about the challenges the company is facing, that's just ahead.
[16:50:00] (COMMERCIAL BREAK)
GOLODRYGA: The chief executive of Twitter says the social platform has a toxic problem with content. Jack Dorsey was speaking to our very own Brian
Stelter who is here with me. Fascinating interview played --
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Yes --
GOLODRYGA: Out over the weekend. You addressed a lot of issues, did you walk away with the feeling that he has a grasp of the level of issues and
the severity of the issues that they're dealing with?
STELTER: Well, I think he's asking the right questions, I think he's addressing the right problems. But he doesn't have all the answers yet, he
doesn't have the solutions, and he readily admits that. You know, he sounded at times like a philosopher, thinking about the impact of
technology.
And less like the CEO of a major tech company. But he did acknowledge that individuals increasingly have fears of big tech companies. Here's a part
of what Dorsey told me.
(BEGIN VIDEO CLIP)
JACK DORSEY, CO-FOUNDER & CHIEF EXECUTIVE OFFICER, TWITTER: When we started the company in the service 12 years ago, we weren't necessarily
thinking about some of the repercussions from our actions. And they looked quite small at the time.
For instance, we thought, you know, well, people are following you, so we should count them and then we should put that count right on your profile
page and obviously people care about that, so we should make it big.
But that one small choice and it felt very small at the time and it felt obvious at the time. Put an incentive to grow that number, is that the
right attention? Is that the right incentive that we should be driving? I don't think it is today, I don't think it matters as much in context of how
many conversations you have or how much you contribute back to the network.
And like is another good example where you know, when you tweet and you don't get a lot of likes and you feel bad about it, is that the incentive
we really want to drive? Is that what we're actually trying to encourage people to think about?
The answer is yes because it's in the product. And another good example that I think will help a lot of what we're trying to do and health is what
we see with eco-chambers. We only give people one tool right now which is to follow an account.
STELTER: You want people to be able to follow stories or subjects or hashtags?
DORSEY: Yes, I mean, we've been focusing a lot of the service today more, and vying(ph) it more towards topics or towards interests.
STELTER: It sounds like you are willing and ready and willing to rebuild the entire house, to renovate everything.
DORSEY: We're ready to questions everything. I mean, I -- we've cleaned so much in Twitter over the past 12 years, and I know it doesn't always
feel that way, but we've changed a lot, but we haven't changed the underlying fundamental.
STELTER: What is the timeline for re-examining how you so follow accounts or the use of the like button.
DORSEY: You know, we're looking at and thinking about all these things. Right now, we've definitely had conversations about them --
STELTER: But would you say like by the end of the year there's going to be those fundamental changes to Twitter?
DORSEY: I don't -- I worry about a timeframe like that because we also need to take into consideration -- we're a small company, I mean, we in
comparison with our peers -- we're a small company, but we have this out- size impact and I believe the importance.
And there's a lot of what's in Twitter that you would find in a public square, to use the older analogy --
STELTER: You mean all the graffiti on the walls?
DORSEY: No, well, there's part of that, but there's also a really amazing open conversation, and I'm going to see if we're ready to walk up to anyone
and strike something up. So there's positives and there's what people perceive to be negative as well.
[16:55:00] STELTER: Look, I met my wife on Twitter, I'm always going to love Twitter. And I kind of feel like it's a garden that's been overrun by
weeds. Do you feel like you're the gardener just struggling to keep up?
DORSEY: There are certainly times where we felt like we're behind. But that goes back to my point of like we need to be really good with
prioritizing and sequencing and understanding what matters most. So if the incentives are going to have greatest impact, then we should prioritize
that.
(END VIDEO CLIP)
GOLODRYGA: So clearly, a lot of challenges, he's addressing them, and you said that was a big step for him to speak out to you. The president also
is addressing this issue in an interview with "Reuters" as we speak --
STELTER: Yes, in an interview with "Reuters" in the past few minutes. The president is reiterating his complaints about these big tech companies,
saying it's very dangerous that they self-regulate content. I think what he means is the rules of the role, the Twitter and Facebook and Google have
to decide when you violate terms of service, when something might be hate speech or something, these are issues that Twitter and Facebook grappling
with.
And we're hearing prominent conservatives including up to the president of the United States saying, you know, these rules, you have to be careful, it
seems like you're targeting conservatives. Now the companies very much deny that.
Dorsey denied that to me in the interview, he said this is not a bad ideology and we're deciding whether to suspend or block someone, we're not
doing it based on political point of view. But that idea of discrimination of bias is a very powerful potent idea and it's been used in the midterm
elections here in the U.S. to say the new problem is big tech.
That it used to be the liberal mainstream media, now it's the liberal technology companies --
GOLODRYGA: Yes --
STELTER: And with that in mind, it's so interesting to hear Dorsey say we're not that big.
GOLODRYGA: Yes --
STELTER: We're small compared to our peers.
GOLODRYGA: Yes --
STELTER: We don't have unlimited resources to monitor and police this website. It's kind of like hearing someone who is in charge of a town say
we only have so many cops, we can't hire more police officers, it's not a very encouraging thing to hear.
GOLODRYGA: Not as if he prefers to be in the shadows with the Facebook in the spotlight, now that it's his turn, he's facing a lot of questions as
well, you've got the First Amendment, you've got hate speech, you've the president weighing in, but I was happy to hear that there's good news
coming out of Twitter, and that people still fall in love, like you and your wife.
STELTER: Yes --
GOLODRYGA: You've got a beautiful baby out in the --
STELTER: I love Twitter for that reason --
GOLODRYGA: Yes --
STELTER: That's right, but Twitter seem really pleasant in those days, not so much anymore.
GOLODRYGA: Yes, lot to the world now --
STELTER: Yes --
GOLODRYGA: Same -- even for a so-called small company.
STELTER: Yes --
GOLODRYGA: Brian, thank you --
STELTER: Thanks.
GOLODRYGA: And that's QUEST MEANS BUSINESS. I am Bianna Golodryga in New York, the news continues right here on CNN.
END
