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Chinese GDP At 6.5 Is The Slowest In Years, The Worst Of The Trade War Is Still To Come; One Of The Most Powerful Members, Qatar Is Now Questioning Whether To Bailout Of One World; U.S. Charges a Russian with Trying to Sway Midterm Election Vote; Chaos Erupts at Mexico-Guatemala Border as Mexican Officials Try to Prevent Flood of Migrants from Heading to the U.S.; More Than 40 Killed in India Train Disaster; New Reports Suggests that Turkish Officials Suspected Khashoggi's Murder Hours After He Disappeared Inside the Saudi Consulate in Istanbul; Wheelchair-Bound Manafort Appears at Court Hearing; Facebook Hires Nick Clegg as Global Affairs Chief; U.K. Businesses Paralyzed By Brexit Uncertainty; U.S. Markets Near End of Volatile Week. Aired 3-4p ET

Aired October 19, 2018 - 15:00   ET


RICHARD QUEST, HOST, QUEST MEANS BUSINESS: And now from the closing bell on Wall Street, and the market is clinging on. Good gains in the morning,

evaporated early afternoon, went back uo to - well, it's a bit of a rollercoaster, even a bit negative, there. But holding on, 60-odd - 8

points, as you move to the closing bell and one big number that we've watched throughout the course of the day, 6.5%, Chinese GDP impacted into

the market's performance because these are the drivers of the day. That 6.5 is the slowest in years, the worst of the trade war is still to come.

It's not reflected. Triple digit swings having a rocky week for the Dow. The Fed's former Vice Chair Stanley Fischer coming up in just a moment, and

Facebook finds a new friends in the halls of Westminster, Britain's old Deputy Prime Minister is joining the company.

Live in the world's financial capital, New York City on Friday, October the 19th, I'm Richard Quest, I mean business.

Good evening. We are now in the last hour of trading in what's been a volatile week. So hang on to your hats, who knows which way the next 60

minutes will go. Holding on to the gains with strong earnings from Procter and Gamble, the NASDAQ however is lower. And what you're seeing is Wall

Street caught up in a battle between strong corporate earnings and political and economic factors.

Look at the week of swings. These are the points of 200 or more. Every day, this is the way it's gone, 239 on Monday, 567 Tuesday, 331 Wednesday,

471 Thursday. If you take a look overall, even with those numbers, it is better than last week's 800-point swings. And a volatile week, too in

China with the stocks there, which ended on a positive note. The Shanghai composite closed not more than 2.5% on Friday. Three top Chinese

regulators issued statements promising to help support Chinese companies.

Put into context, the major index in Shanghai is down 23% so far this year, Hong Kong is off 14% and the fear of a trade war seems to have hit stocks

harder. Now, the interesting thing is, it hasn't actually hit the growth rate yet, so the stocks are falling in anticipation but if you look today,

we've got GDP numbers from China, GDP in the third quarter through its slowest rate in 10 years largely because of government efforts to reduce

debt and put growth on a sustainable path.

CNN's Andrew Stevens reports from Hong Kong.


ANDREW STEVENS, REPORTER, CNN: It's bad and it's likely going to get worse. That is the take away, Richard from the latest GDP numbers from

China. Growth is now at a 10-year low at levels not seen since the depths of the global financial crisis in 2008 and 2009, but China's economy is

being set not by the trade war as you might expect, but by Beijing's campaign to cut alarming levels of debt. Currently, it's at 300% of GDP.

Investment which is a key driver of the economy and has been for years is being slashed. The Chinese Academy of Social Sciences says that this year

alone, Beijing has pulled the plug on some 2,000 projects worth about $350 billion and now, Beijing is bracing for a power new headwind that is the

trade war with the US.

Now, the tariffs already put in place by the US came too late to hit third quarter growth, but they wanted fourth quarter growth. So China now faces

a dilemma and a focus on the debts, if export start to slow under the weight of tariffs or will it have to rev up investments and head into a

deeper debt problem.

Investors certainly are already spooked by all of this. Shanghai's composite is now down 28% that since late January, and that's sapping

consumer confidence. Beijing has, I should point out, already begun taking steps to support the economy, but it is likely they are going to have to do

a whole lot more, Richard?


QUEST: Andrew Stevens in Hong Kong. China's GDP growth is just one worrying factor for investors. The volatility and it is reflected in the

VIX index. The volatility for the past two weeks is the worst that we've seen since the beginning of the year. There you saw the index going up to

38. That was by far in away the worst moment, but this fall off over the summer and then the spike in October were still off the worst of it.

Now, analysts believe that -- or some of them do that volatility is here to stay and the reason it is going to continue for the time being, three major

pressures. First of all, global pressures of things like trade war and the budget showdown in Europe and even for example, Brexit.

So you've got the global pressures, the geopolitical stuff, then you've got the black out in share buybacks. Companies stopped buybacks two weeks

before reporting earnings. Now, when the buybacks stopped, they removed huge buys from the market, but they returned and that creates a new

volatility and understanding who is really buying them for what purpose becomes much more difficult.


QUEST: And then let's not forget our own friends at the Fed. The Fed's rate rises, now the tech shares were hit the hardest, but even so, the

prospect of another this year and more to come. Well, the Fed's rate decisions have drawn repeated attacks from President Trump. Saudi

officials say the President's comments could backfire. He should know, he is former Vice Chair and he joins me.

Good to see you, sir in the C-suite tonight. And there's many things to talk about. Let's just continue our line of thought on trade. We're not

yet seeing the effects of trade tariffs in China's numbers, nor are we seeing them in the US economy, but is it your belief that we will?

STANLEY FISCHER, FORMER FEDERAL RESERVE VICE CHAIRMAN: Well, it depends what the President is actually planning on doing in the negotiations with

China. If it's a very hard negotiation, then the pressure is kept on for very long, it will have an impact. If we're looking at a strategic

tactical announcement of what is going to do when that we will end up in this case, as we have in others with a compromise, a reasonable compromise,

it won't matter as much as it could.

QUEST: How much does the Fed -- the tax hadn't come along obviously while you were in -- in lieu of the last year meetings, but how much does the Fed

look at those sort of issues because if we look at the minutes of recent meetings, they are alluding to there could be an effect but not wishing to

give too much weight to it.

FISCHER: Well, because nobody knows at this stage precisely what we're talking about. It introduces an element of uncertainty which is itself a

factor for increasing the VIX a little bit and they don't want to talk about it because they don't know very much about what is going to happen

and what it's going to do.

QUEST: If we take -- and I know the Feds always stay independent. I think you must ...

FISCHER: ... you must have been a good student, yes.

QUEST: No, I just heard it -- but if you were there now, would you be voting for more rate rises in the shorter term, December for example and

beyond or would you say let's wait and see now what's happening.

FISCHER: You know, being asked those questions when you don't have the information that they have is not very helpful. They've got much more

detailed knowledge about what's going on -- they, the members of the board than I have out here. I tend to put a lot of faith in what they decide

eventually, because it is a result of a series process and as of now, I don't know whether if I was there, I would vote to raise the interest rate

or to raise it less or something like that. I just don't know.

And I certainly wouldn't rule out that they are going to raise the rate for the fourth time as they've said repeatedly that they will.

QUEST: These rate rises which the President has criticized says that -- he says they are not warranted because inflation is low. We'll deal with the

President's criticism in a moment, but do you agree that it's getting more finely balanced now because inflation is low. It does seem harder to

justify a rate rise when you are at the target.

FISCHER: Well, you're at one of the targets and the other one, you have an enormously strong growth at the moment, stronger than we can sustain and

we'll just have to see whether inflation rate comes along. I expect inflation rate will come along.

QUEST: So the trajectory if you like, even though it is data dependent, the trajectory is a established.

FISCHER: Well, the prediction is established yes.

QUEST: How damaging is it to have a President criticizing the Fed in the way Donald Trump has been doing? I mean, as far as I can remember, I've

never known a President that is say -- if you look at some of the phrases the President has used "a big mistake, loco, crazy, too aggressive,

ridiculous, going wild, I'm not happy."

FISCHER: Well, that's moderate by his standards, so I don't know what to make of that. This hasn't been done before. Former Presidents have

stepped back after they've understood the difficulties they are creating. The difficulty there of creating is that they are trying another element

into a decision, and we know precisely what the members of the Board will try to do which is to ignore it.


FISCHER: But it's not easy to do that.

QUEST: Well, precisely. If some of these sort of placed this big thing in the middle of the table, he is the President after all. You may

unconsciously even take some of it into account, so I don't don't think it's helpful in anyway, except to provide an excuse for the President if

indeed they economy slows down and he will say, "I told you." And if it doesn't slow down, he won't say that's the opposite of what I told you.

QUEST: I was wrong.

FISCHER: Heaven forbid.

QUEST: Did you ever hear at any meeting anybody -- has anybody had a chitchat, you know, listen to what we've got to put up with now.

FISCHER: I didn't hear any of that and they are aware that there is a transcript of the ...

QUEST: It comes out some years later. We'll ...

FISCHER: It comes out only five years later. Some of them are still there.

QUEST: In the end, were you surprised that Janet Yellen wasn't renominated? Were you in anyway upset or felt that she was cheated out of

a second term?

FISCHER: Well, I mean, nobody has the right to a term and she is from a different party. It was clearly a close decision, I think, and I thought

she deserved it. If she got it, I'd have said she deserved it and if she didn't get it, I'd say, well, political factors which are not surprisingly

taken into account.

QUEST: Sir, are you enjoying being out of the hot house?

FISCHER: Yes. But it's getting winter now and it's harder getting used to that. It was enormously interesting. I was very lucky to have that

opportunity and I am sure that the people who are there now are doing an excellent job. It is one of the remarkable things of this process that

they've made -- they've appointed a very good Board of the Fed.

QUEST: They always say -- when you got the job at the Fed, I was told Stan Fischer has one big job, one last big job having been governor of the bank,

that means well -- and now having been at the Fed, what's next?

FISCHER: What's next? I'm looking for a job.

QUEST: Anybody who wants -- where applications to be sent in, good to see you, sir.

FISCHER: Good to see you, Richard. Thank you.

QUEST: Thank you very much indeed. Now, after the break, a major player in the airline industry. He runs Qatar Airways and he is the Chairman of

the Board of IATA. Good to see you, Akbar Al Baker -- who will -- well, look at this, this is what you call a busy C-suite. Former Fed Chairs,

Chairs of airlines, all at "Quest Means Business".


QUEST: So there you have the One World Alliance and one of the lynchpins of the global network is indeed Qatar Airways. One of the most powerful

members, Qatar is now questioning whether to bailout of One World. Akbar Al Baker is the Chief Executive of Qatar Airways says he is tired of taking

heat from his One World partners.

Now, the reality is though, wherever Akbar flies, he is running into some kind of dispute. So, we've just going to sort of a map to show you. When

it comes to the United States, now, the US has long complained that they face unfair competition from Gulf carriers. Now, we know of course that

Qatar tried and failed to buy a 10% stake in the American airlines last year, thus leaving a lot of bad taste in the month between Qatar and

American and maybe the CEOs.

US carriers are also worried about Air Italy. Now, Air Italy in which Qatar owns a best part of half of a percent and certainly, probably has

control, Air Italy is flying to the US and the US Secretary of State has raised a question as to whether this is improper and breach of the

agreement that Qatar, the nation, made with the United States.

Then there are clashes with Qantas which is unhappy over Qatar's new routes to Australia. And if you talk about the Gulf itself, where you've got a

whole host of problems there. You fly to Qatar, it used to fly to all the neighbors in the region. Now, the diplomatic dispute between Qatar and the

other countries continue and all of those routes have gone leaving Qatar isolated in the blockade.

Akbar Al Baker is the Chief Executive. Chief, you join me in the C-suite, good to see, sir.


QUEST: You just heard some of the troubles and woes. You seem to be making mischief wherever you go.

AL BAKER: I always like making mischief, so do you.

QUEST: What is the relationship now between yourselves and One World. You said you're thinking of leaving, how serious are you?

AL BAKER: You know, Richard, whenever I say something, I am very serious. There is no point of us staying in One World when we are being bullied by

the big boy and continuously trying to undermine our progress and trying to pull the carpet from underneath us having a relationship with other


QUEST: By the One World members, you mean Qantas for their Australia routes and American Airlines in the United States.

AL BAKER: Exactly.

QUEST: And they would say, they're merely protecting their territory.

AL BAKER: Well, their territory is too big, so they need to protect us not from us, but they should also protect it from other people who are players

in this very big field. The United States is the largest aviation market. There is business for everybody, but because they cannot keep up with the

product, with competition, with the standards that we provide to our passengers and this is all about quality of product that we have.

QUEST: And this argument that you're having with the United States over Air Italy, you have an -- I mean, you may not have legal control, but

effectively, you own the airline and there will be -- the Secretary of State has said, this is in breach of the agreement between Qatar and the


AL BAKER: Let me stop you here. First of all, we don't control the airline, we are a minority shareholder. The AQA, the foundation of Aga

Khan owns 51%. When we talked about taking us taking Air Italy it was in 2015, we signed the acquisition in 2016. We started applying and got

permission to fly to the United States in 2017 and we did an agreement drafted by the United States government in January of 2018, and none of

this issue was raised at that time.

But because now, Air Italy is competing on the Trans Atlantic route, that the three big boys are complaining. It has nothing to do with our

agreement. We have not violated -- Qatar never violates an agreement that it signs?

QUEST: The argument would be of course, I mean, what you've done with Air Italy is very similar to what Etihad did with Darwin when it then rebranded

-- oh, admittedly, it rebranded Etihad Regional, but you get to the maximum ...


QUEST: ... allowable legal, but if you have effective ownership?

AL BAKER: No, you are not comparing apples to apples. Darwin is a domestic European carrier. We are flying to the United States directly

from our hub. We do not and will not break our agreement that we have with the United States and this is all about for freedom and we are not doing

any for freedom from Europe to the United States.

QUEST: Don't -- you seem to be fighting on a lot of fronts at the moment.

AL BAKER: And I am winning.

QUEST: Well, okay, but you've got obviously, the effects of the blockade, but you told me before is having obviously an effect on your business and

your traffic. But shouldn't you be trying to make friends elsewhere rather than fighting on all fronts?

AL BAKER: We have big friends. We have friends in IAG, LATAM, Cathay Pacific ...

QUEST: You own them.

AL BAKER: We don't own them, we are just a shareholder, but don't forget that these people who are creating so much noises about our freedom over

Europe don't realize that we own 21% of their JV.

QUEST: We need to talk about Saudi Arabia and the situation there. Now, obviously, Qatar and Saudi -- I was going to say sworn enemies but it would

appear to be at the moment, at least a government level, so the vitriol between the two, now you've got the Khashoggi situation. What do you make

of it?

AL BAKER: First of all, we are never a sworn enemy of anybody. We treated them as families. Actually, they undermined us. They blockaded us, so we

never undermine anybody, but let me tell you something. Now who is practicing terrorism? It was my country or them. Secondly, this shows

that we are a victim of MBS's recklessness. He is not only becoming reckless for our region, but he is now also becoming reckless on the global

scene and it is now time that the West, especially the United States put a real stop to it.

QUEST: What does that mean? When you say put a real stop to it because the administration here seems to suggest that it's going to go along with

this idea of a rogue killer or rogue team or whatever and as quickly as possible go to business as usual back to normal.

AL BAKER: I am sorry, rogues don't come in aero planes, they don't come in a planned entry and exit. They don't carry such acts which is state

sponsored, so I don't buy this rogue killer. I am sorry. But let me tell you ...

QUEST: So what should they do?

AL BAKER: Let me tell you something that arms is playing a great part in the US looking the other way and I don't think that this is as per the

principles of the foundation of the United States. Let me quote you something that Eisenhower said in his farewell speech in 1961. "We must

guard against a position of unwarranted influence whether sought or unsought by military industrial complex. This has a potential for

disastrous rise of misplaced power." This is exactly now being practiced and I think this is not in the best interest of the United States in front

of the public opinion around the world.

QUEST: Is there a certain -- satisfaction is the wrong word -- Schadenfreude, a maybe, at the discomfort at the Saudis. I mean, the

Saudis have been attacking Qatar pretty heavily and being the leaders in the blockade ...

AL BAKER: But we are winning.

QUEST: Why do you say that?

AL BAKER: Yes, we are winning because the whole world opinion has now changed against them and in our favor and I take a great pride in what is

happening that the world has now realized who is the victim.

QUEST: At the end of the day though, the world continues to want to do business with Saudi, this conference this weekend. Everybody will be back

there. In the same way that nobody has broken ranks commercially with Qatar because you've all got so much money to spend and every country and

every business needs it.

AL BAKER: It's not about money. It's about principle and don't forget that this Davos in the Desert, don't you think has collapsed because all

the major players, all the who is who in the world have all withdrawn for the sake of principle.

QUEST: Finally, we've talked broadly. You've been very honest. How can you be the Chairman of IATA which is the governing body, if you like, or

the representative body of airlines when you're at loggerheads with so many of the other members. I mean, what happens at the meetings?


AL BAKER: You know when I sit on the -- as the Chairman of IATA, I look at the interest of all the airlines, but when I am the CEO of Qatar Airways, I

only look at the interest of Qatar Airways and this is the difference. I have been working very, very studiously and I have been working very

dedicatedly for the interest of all of the airlines as the Chairman of IATA.

QUEST: And enjoying it?

AL BAKER: Yes, I always enjoy my job.

QUEST: How long are you going to do it for?

AL BAKER: As long as they want me.

QUEST: That's probably quite a role. Thank you very much. Good to see you, thank you, Chief.

AL BAKER: Thank you.

QUEST: Thank you very much indeed. As we continue, we were just talking about the Saudi conference in the desert. Now, another major figure drops

out in response to the apparent killing of Jamal Khashoggi. I asked a prominent Russian investor why he is still going, Kiril Dimitrov explains

the reasons that Russians still think it's worth turning up.

This is "Quest Means Business" live from New York.

Hello, I'm Richard Quest. There is more "Quest Means Business" in just a moment. When the head of Russia's direct investment fund tells me why he

is still going to the Saudi investment conference next week and an important status update from Britain's former deputy prime minister.

Status update, it's complicated; actually, it's not. He's got a new job scene -- he is at Facebook. As we continue tonight, this is CNN and on

this network, the facts always come first.

A Russian woman has been charged with attempting to interfere in the upcoming US elections. The Justice Department says Elena Khusainova, from

St. Petersburg, is charged with conspiracy to defraud the United States.


Russia said she's part of the social media troll operations that includes the internet research agency.

Chaos at the border between Guatemala and Mexico as a crowd of Guatemalan migrants tries to push its way through and crossing the gate. Mexican

police blocked the way and they apparently responded with tear gas.

Migrants reportedly plan to seek asylum in the United States. More than 40 people are dead after a train plowed into a crowd celebrating a Hindu

festival in northern India. Officials say the train barreled into the people who were burning an effigy near the railway tracks.

The incident happened near the city of Amritsar on a Friday. Officials say the list of casualties may not be final. New information today about the

missing journalist Jamal Khashoggi. Cnn has learned that Turkish officials suspected he had been killed in hours after he disappeared inside the Saudi

Consulate in Istanbul.

The sources say intelligence officials raced to the airport where a private Saudi plane was waiting to take off, but when they searched the plane,

nothing suspicious was found. Donald Trump's former campaign manager Paul Manafort is suffering from significant health issues, according to his


Manafort was in a wheelchair in a court hearing in Virginia, and today, his lawyer says his condition is related to the terms of his confinement.

Manafort is awaiting sentencing for several tax fraud and banking charges.

More now on the fallout from the disappearance of Jamal Khashoggi. Airbus says that Dirk Hoke; the head of its Defense Division won't attend next

week's international investment conference in Saudi Arabia where they have been planned to go.

The list of now shows is growing, but not everyone is dropping out. Earlier, I spoke to Chief Executive of the Russian Direct Investment Fund

Kirill Dmitriev.


KIRILL DMITRIEV, CHIEF EXECUTIVE OFFICER, RUSSIAN DIRECT INVESTMENT FUND: Before the results of this official investigation, we believe it's wrong to

jump to conclusions. And we believe it's very important to support the transformation that is happening in Saudi Arabia.

It's a difficult transformation, but the vision of moderate Islam, the vision of new economy is important and we support that vision in Saudi


QUEST: I understand the argument that, you know, until we know all the facts, but from the facts that we do know, something clearly abhorrent

happened to Mister -- to Jamal Khashoggi. With that mind, don't you feel the need to make a protest of sort, at least, say, hang on until we know we

don't want to be associated with.

DMITRIEV: Well, actually it feels that the looks of publications is there are really lots of unverified accounts from anonymous sources. And we

don't know whether to believe them or not. And we know the kingdom has lots of enemies, we know a lot of people are against the vision of moderate


And frankly, as the cover chose this story, turned into really big attack on the leadership of Saudi Arabia result in a verified accounts. So we

really have the accident and the terrible tragedy that happened, need to be separated from the real reforms that are happening in Saudi Arabia.

And we know that young generations supports those reforms. We've seen it happen, it's in great support for the king of Saudi Arabia, for Crown

Prince of Saudi Arabia. And we believe that only through dialogue and engagement, I can say it's a difficult transformation process in Saudi

Arabia be overcome.

And frankly, Saudi Arabia needs support in its transformation.

QUEST: If we look at what's happening within Russia at the moment, the economy is still unduly and heavily fossil-fuel based or at least commodity

based. And there are difficulties of course over the pension reform plans that President Putin put forward.

Is it your feeling that the economy is on the right track?

DMITRIEV: Well, it feels that the economy is actually having some good growth, it's around almost 2 percent and oil prices likewise stable which

is of course, it's in Russia, also it's undergoing some economic transformation trying to reduce its dependence on oil.

So definitely, maybe the north have great grounds, but you look at some growths and generally, because of the trade wars in the world, we believe

that growth for the whole world economy is starting --

QUEST: Right --

DMITRIEV: To slow down, we see that impact in China. But Russia is not doing so badly right now.


QUEST: As we continue, those who have walked the political corridors of power and demand tech giants like Facebook are keen to tap their expertise.

A look at the growing over latitude in politics and tech.


QUEST: As I told you in the news headlines, a Russian woman is being charged with trying to manipulate voters in the upcoming U.S. elections.

Investigators say she is a part of the social media troll operation that includes the internet research agency. Special counsel Robert Mueller's

office brought criminal charges against that agency earlier this year.

Kara Scannell joins me from Washington. Kara, was this woman -- first of all, as I read it, she's not in the jurisdiction, so it's an indictment

that won't necessarily bring to a trial anytime soon. What she's supposed to have done?

KARA SCANNELL, CNN REPORTER: Oh, that's right. She's still in Russia as far as we know, so it's not likely that she will show up in the court in

Alexandria to face these charges. But what the prosecutors have charged her with is being part of this project known as Project Lodger(ph) that was

operated and run and funded by giving a promotion known Putin Shelves, all part of that concord management group.

So what they alleged that she's done is she was the accountant, she created, you know, sort of run the funding of the --

QUEST: Right --

SCANNELL: Heavy itemized receipts, you know, all to try to sow discord in the U.S. election. And in this instance, what we've learned is that this

was not just the presidential election, but it continued to target the midterms that are coming up in just a few weeks.

They -- what we've learned is that the budget for this operation, Project Lodger(ph) which included the U.S. but not exclusively the U.S. election,

but $35 million that it released from January to June of this year, that it was a $10 million budget, and they were targeting, you know, hot topics and

issues such as the debate over kneeling at the --

QUEST: Right --

SCANNELL: NFL games, LGBT rights. They were targeting the Las Vegas shooting, you know, really hot-button issues to try to sow discord and

discomfort. It was interesting, one detail in this indictment is that, you know, they were so detailed, but had a playbook for how to do this.

I mean, one example, they said if you're going to target liberal groups, don't "Breitbart" new story. If you're going to target conservative

groups, don't use the "Washington Post" or "BuzzFeed".

QUEST: Interesting. Keep watching, one, this environment and how it proceeds. Appreciate it, thank you very much indeed. As Facebook looks to

ramp up its response to election interference, it's hiring Britain's former deputy Prime Minister Nick Clegg, he's expected to start work on Monday as

Facebook's head of global affairs.

He'll report to the chief operating officer Sheryl Sandberg and he's moving his family to Silicon Valley in the new year.

[15:40:00] Silicon Valley companies keen to put political cloud on the board and for good reason. So Uber had the former European Commissioner

Neelie Kroes to its public policy board. Vocal Uber supporter, enjoying her time in the post. Uber is battling regulatory issues in Europe.

Amazon liked the look of the former White House Press Secretary Jay Carney, he oversees its public-policy relations and public policy. Lisa Jackson

joined Apple responsible for minimizing impact on the environment.

Now, she used to run the U.S. Environmental Protection Agency. Cnn's Donie O'Sullivan joins us from Washington. Nothing new about the revolving door.

Nick Clegg though, deputy Prime Minister going to Facebook. I mean, why and what?

DONIE O'SULLIVAN, CNN REPORTER: Well, Richard, he really has his work cut out for him. As you mentioned he starts on Monday and is coming into a

company that has has an extremely difficult year or past two years really since the 2016 election.

The company is under investigation by federal investigators and government investigators on both sides of the Atlantic and Congressional and

parliamentary investigation. So Clegg is going to be quite busy and it will be interesting to see, you know, how he'll make his mark on the


QUEST: Right, and all of these -- all of them joining Uber, Amazon, Facebook -- all of them joining -- what is it that companies really want?

Because let's face it, they certainly don't want -- do they need strategy at the highest levels? Are these people qualified to give them the PR

consulting type of information they need or is it just the name?

O'SULLIVAN: Well, I think what we've seen both in Europe and here in the United States over the past two years is that Silicon Valley and Washington

and Silicon Valley and Brussels are really trying to get to grips with each other. You know, there's talk of -- there's new regulation in Europe and a

possible regulation here in the U.S.

And you know, the folks in Silicon Valley don't necessarily speak the same language as the folks inside the Beltway here in Washington D.C. So we're

seeing more and more, you know, ex-politicals joining these companies like Nick Clegg and he's going to be overseeing a former Bush adviser called Joe

Coppmann(ph) here in the U.S.

And also, it's going both ways actually. The Democratic National Committee has hired ex -- former Yahoo and Uber executives to head up their security


QUEST: So -- but the -- I suppose what I find interesting is that they take positions with these companies. And with these positions come the

responsibilities. It's not like you're being employed as a consultant or an adviser or a special adviser to Mark Zuckerberg on privacy issues or

whatever it may be.

They are taking full throttle titles at the very senior levels.

O'SULLIVAN: Yes, I mean, I guess what we've seen with a lot of the congressional investigations is that even though there are a lot of folks

in these companies with very senior positions and who -- you know, to the outside, it would seem that they have quite a lot of power.

You know, the main -- the main senators on the Senate Intelligence Committee, the folks who are really looking into Facebook here in D.C.,

they want to talk to the CEOs, they don't want to talk to folks like Nick Clegg. They want to talk to the guys at the very top who are making the


So it will be interesting to see, you know, how somebody who is the deputy Prime Minister of the United Kingdom will take to working for Mark

Zuckerberg and Sheryl Sandberg.

QUEST: Good to see you, sir, thank you very much, appreciate it. Nick Clegg for one, lobbied for Britains to rethink Brexit as he prepares to

leave that behind. British businesses are looking for answers. Cnn's Nina dos Santos is deep in the country in Bournemouth.


NINA DOS SANTOS, CNN EUROPE EDITOR: The Brexit wave gearing up to hit businesses in this coastal English town hard.

PETER PHILLIPS, CHIEF EXECUTIVE OFFICER, UNICORN TRAINING: The biggest problem with Brexit at the moment is we have no idea what it is. It could

be anything on this very wide spectrum.

DOS SANTOS (voice-over): Peter Phillips is the CEO of a company that develops online corporate training programs in Bournemouth; a place that

voted to leave the EU by 55 to 45 percent.

(on camera): Give a sense that anecdotally be reaching in minds.

PHILLIPS: Almost everybody included the Brexiteers agree that every option on the table now is worse than staying where we are. But it doesn't seem

to necessarily change people's minds.

DOS SANTOS (voice-over): Businesses like his have rejuvenated the tone in recent years, transforming its rather sleepy sea-side city to a vibrant

London alternative. It's now home to dozens of digital startups, designed firms and a JPMorgan office that employs more than 4,000 people.

PHILLIPS: It is a financial services hub and it's a high tech hub with lots and lots of small businesses. And I think both of those two sectors

are going to be adversely affected by Britain.

[15:45:00] DOS SANTOS: As British Prime Minister Theresa May comes back from Brussels with out-of-Brexit solution, some businesses here are

considering leaving the U.K. before the U.K. leaves the EU.

DUNCAN MCWILLIAM, CHIEF EXECUTIVE OFFICER, OUTPOST VFX: My employees want to know what's going on for the -- in the next year. They want to know if

they're safe here.

DOS SANTOS: Outpost VFX works on some of Hollywood's biggest blockbusters. The visual effects firm employs 70 people and plans to add another 30 more

staff at least. But if May's final Brexit deal fails to grant them freedom of movement, it will be Barcelona, the company expands in, not Bournemouth.

MCWILLIAM: Thirty three percent of my workforce and the U.K.'s VFX workforce is made up of EU citizens. Anything that slows down the

employment of a movable workforce is a massive problem to me.

DOS SANTOS: And so with Brexit urging closer and no deal in sight, small enterprises in Bournemouth and beyond are visualizing their future across

the channel. Nina dos Santos, Cnn, Bournemouth.


QUEST: And investors continue to watch Brexit development. Look at the numbers as we saw them in markets. And as you look at those numbers, bear

in mind what the Europeans were seeing at the end of the new -- or the beginning of the New York day.

So the markets were up, that still wasn't enough. The FTSE managed to finish higher, it was the only one that shrugged off the weakness in the

global market. The Italian stocks finished flat after falling on tensions surrounding the Italian budget. That budget of course likely to be

rejected by the European Commission.

As we continue tonight, the charm and the beauty of the Dubrovnik, dazzled visitors for years. Some are asking if its magic has gone west, those

people keep talking. I'll be speaking to the Dubrovnik's mayor about the perks and the perils of the "Game of Thrones" tourism.


QUEST: Now, how would you like to see the emerald eye(ph) landscape of Northern Ireland transformed into fiery nice. If you're a "Game of

Thrones" fan, I am guessing that's quite likely and it could be soon possible. After "Hbo" announced plans to open up its filming locations to

the public. "Hbo" of course owned by Warner Media which is the parent company of this network. And it all could give a massive boost to tourism

in northern Ireland.

[15:50:00] Even though playing up to "Games of Thrones" can in itself be a dangerous game, at least depending on who you ask. Now, bear in mind, I've

never actually seen one edition of "Game of Thrones", I am the only person probably in the world who can -- has to admit to that.

But the city of Dubrovnik in Croatia has been flooded with tourists and why? It's where the point that UNESCO is warning its world heritage status

could be at risk. "Game of Thrones" filming there has created an amazing amount of tourism. The trigger fans that are coming along to a worrying


And it's not the only place. The breaking bad house in New Mexico that's had to put up a fence to stop people throwing pizza on it. Maybe you've

seen the show, you'll understand why it all happens. Now, one man who sees all of this first hand -- there's the pizza and there's the house.

One man who understands this, that is the Mayor of Dubrovnik, Mato Frankovic who joins me now from the city. Good to see you, Mr. Mayor,

thank you for joining us. The reality is, "Game of Thrones" has brought great publicity and large numbers of people. So why are you complaining?

MAYOR MATO FRANKOVIC, DUBROVNIK, CROATIA: First of all, thank you for the invitation. We are not complaining, actually, we are very proud of our

city, we are very proud of our tourism. But we think that we actually need to take a bit of break in releasing and slowing down the number of the

tourists that are coming at the same time to Dubrovnik.

Why is that? It's not just because of the citizens, of course, it's because we want to provide the high quality tour of our tourists. A lot of them

are coming to Dubrovnik, some of them are coming of course because of the "Game of Thrones", but mainly, they're coming because of the beauty that

this city really has.

And it is a really action city with a rich history and we want for all --

QUEST: Right --

FRANKOVIC: Tourists really to have a great --

QUEST: All right --

FRANKOVIC: Quality of the situation.

QUEST: Now, you raised a good point, but all of this was eminently foreseeable. I remember going to Dubrovnik, it must be what? Ten, twelve

years ago, and even then, you could see that you were going to be the victim of your own success, particularly when cruise ships arrived which

disgorged huge numbers of people completely overtaking your beautiful town and town squares.

How can you prevent it?

FRANKOVIC: Yes, it's correct. Actually, what we did last year, we actually approached to CLIA that work -- organization of cruise ship

companies, and we said, listen, guys, we have a problem and we need to solve that problem as soon as possible because we have a lot of tourists

coming into the city with the cruise ships at the same time.

And this is a problem. So what we actually did for the first year, this year, 2018, we spread the number of arrivals. We have some of the ships

that are coming in the morning time, some of them are coming in the afternoon time, and by doing that, we're already slowed down the number of

immediate guests in the whole city.

For the next year, we have a new approach, and this is the limitation of maximum of the cruise ships --

QUEST: All right --

FRANKOVIC: Two cruise ships at the same time in the whole city.

QUEST: The reality is you've got too many people coming, the streets are crowded, the experience is starting to become unpleasant. That's a real

worry for you.

FRANKOVIC: It was a real worry if we do them, our key to success, how to overcome with this. But I'm sure that we already did great things in 2018

and you will see in 2019 to Dubrovnik, will be mentioned in all media as the city of sustainable tourism.

We need to cut some things down, we actually lost some money because of that, but we were ready to do that in order to gain the future success of

Dubrovnik tourism. We want all of the tourists to come to Dubrovnik. But we need to give them an information, what is the best time for us.

We have now Dubrovnik visitors --

QUEST: Right --

FRANKOVIC: System, the web page with the forecast of what is the best time to come to Dubrovnik.

QUEST: When we come next time, sir, we'll be doing QUEST MEANS BUSINESS from Dubrovnik and we look forward to having you live and joining us at the

show at some point. Thank you sir, good to talk to you tonight from Dubrovnik --

FRANKOVIC: Thank you, Rick.

QUEST: Of Dubrovnik. Now, the final markets, we do need to send a moment or two as we end our day, because we'll show you in a second the volatility

over the course of the week. The triple-digit numbers that we have seen time and again.

[15:55:00] Very sharp open, meddling, everything falls away over lunch time, by the afternoon, and really there's no -- you know, it comes off the

back of yesterday's sharp fall over 1 percent fall. You got one bit of loss over there just after 2 O'clock. And again -- and interesting, bulk

building and increases in the market towards the end.

Over the last hour, it's not only held the gains, it's actually increased them. And you can see why P&G is at 9 percent on superb earnings. As long

as compute -- as long as consumers staples like P&G are doing well, and at least not odd one. Caterpillar again, yesterday, it was the largest loser,

now again, it's the largest loser.

This is worries on industrial earnings and particularly on China and ways about that. Slow growth in China means less industrial earnings for

companies like Caterpillar. Otherwise, a nice meddling section for the overall market. The Dow is up, the S&P is expectedly flat, the Nasdaq;

that is the only one that is down.

FANG continues to suffer and if the day continues as it has, well, we will continue with a triple-digit move as you've seen throughout the course of

the week. Let's see how Friday finishes. A profitable moment after the break.


QUEST: Tonight's profitable moment. On this program, you heard the former vice chair of the Fed say it is unwise for the President of the United

States to criticize the merger policy of the Federal Reserve, why? Because inadvertently, the Fed, governors may take this into account.

It's another element on the table. There's a reason Stan Fischer says why former presidents have not criticized the chair or the Federal Reserve.

It's unhelpful, they don't understand the complexities of the monetary policy, and they do risk on ending the very fine debate on economics.

Unfortunately, as Stan Fischer also said to me, that doesn't seem to matter to this president, because his criticism is designed one way and one way

only, to make him look good if he is proved to be right. And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York.

Whatever you're up to in the hours ahead, I hope it's profitable. We're in Kenya next week, the bell is ringing --


The day is -- oh, look! AT&T; our parent company ringing the closing bell - - oh, wonderful!