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QUEST MEANS BUSINESS

NYSE Prepares to Light Christmas Tree; Trump Cancels Putin Meeting Over Ukraine Situation; Cohen Admits to Lying About Proposed Moscow Trump Tower; Israeli President: Anti-Semitism "Corrupts Society"; Rappler News Website Indicted for Tax Evasion; Trump Says He's Close to Making a Deal with China; Trump Praises Proceeds of Trade Tariffs; Theresa May: Reopen Brexit Negotiations and Risk the Unknown; Former ECB President Trichet Says Brexit Renegotiation is Off the Table; Fed Paves Way for December Rate Rise; Police Raid Deutsche Bank in Money Laundering Probe; SAP Buys Qualtrics for $8 Billion, Aims to Combine Data; German Chancellor's Plane Diverted Over System Failure. Aired 3-4p ET

Aired November 29, 2018 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


RICHARD QUEST, HOST, RICHARD QUEST: We're an hour away from the closing bell. The last hour of trade and just look, once again, the Fed has done

it, I will explain why in a moment. Down all day, until just after 2:00, not quite like a rocket, more like a strong takeoff of a plane heading

upwards and it is across all markets. The best gain being seen on the Dow, but the S&P and the NASDAQ are all up and you want to know why? This is

what, or these are what is moving the markets.

Donald Trump defends his business deals with Russia as his former lawyer admits lying about them to Congress. We've got Deutsche Bank shares

tumbling as German police raid its headquarters and the reason the market is up, the Fed does it again. Stocks turn positive, the Central Bank says

it will be flexible on interest rates.

Live from the world's financial capital, New York City, on Thursday, November 29, I'm Richard Quest, I mean business.

Good evening. Tonight, Donald Trump's former lawyer says he lied to Congress about what the President knew of a deal to build a Trump Tower in

Moscow. Today, in Federal court, Michael Cohen said he spoke about the deal with Mr. Trump, even after he became the presumptive Republican

nominee for the White House. In other words, he was going to get it. Adam Schiff, the Democratic Congressman who will soon take over the powerful

House Intelligence Committee says this apparently cover up could mean that the Kremlin holds financial leverage over the President of the United

States.

(BEGIN VIDEO CLIP)

ADAM SCHIFF, US CONGRESSMAN, CALIFORNIA, DEMOCRAT: If Mr. Cohen is stating now that he misled the Congress about the extent, the nature and duration

of the Trump organization's business efforts in Russia, denials the President made about business interests in Russia turned out to be false,

then it means that the financial entanglement is more than we knew in terms of Trump and Russia. It also underscores the imperative of finding out, do

the Russians continue to hold some financial leverage over the President?

After all, if the President was willing to mislead the country about efforts to get a Trump Tower deal in Moscow, during the Presidential

campaign, is he still willing to mislead the country about financial connections that continue to this day?

(END VIDEO CLIP)

QUEST: Revelation changes the time line by only a few months, but that is significant, because as a result, questions are raised. From documents

obtained by CNN, we know that as early as October, 2015, Donald Trump signed a letter of intent, an LOI, for the Trump organization to explore a

downtown hotel in Moscow. Cohen initially told Congress those plans were scrapped in January of 2016. That was before any votes were cast in the

primaries.

Now Cohen is saying the project actually continued until June of that year just before the convention, by which time of course, Donald Trump was

already the presumptive nominee. You will remember, Donald Trump took a softer tone on Russia, more than anyone else in the race. He even forced a

change in the Republican platform, to gut its anti-Russia stance on Ukraine.

So at no point during the campaign did the President mention that he had a deal on the table with the Russians. From then, and to today, Donald Trump

consistently denies having any business conflicts with Moscow.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I know nothing about Russia. I know about Russia, but I know nothing about the inner workings of Russia.

I don't deal there. I have no businesses there. I have no loans from Russia.

I have no dealings with Russia. I have no deals in Russia. I have no deals that could happen in Russia because we've stayed away and I have no

loans with Russia.

We had a position to possibly do a deal, to build a building of some kind in Moscow. I decided not to do it. The primary reason, there could have

been other reason, but the primary reason, it was very simple, I was focused on running for President.

[15:05:10]

TRUMP: There would be nothing wrong if I did do it. I was running my business while I was campaigning. There was a good chance that I wouldn't

have won. In which case, I would have gotten back in the business, and why should I lose lots of opportunities?

(END VIDEO CLIP)

QUEST: Kara Scannell, joins me now from Washington, what exactly, at the core of it Kara, what exactly is the problem here?

KARA SCANNELL, REPORTER, CNN: Well, so Michael Cohen is saying that he lied about this deal, ending in January, and in fact, it continued, as you

just explained until June. He also said that he told the President about it, more than just three times. He said he had extensive communications

with him and he also said he had briefed family members of the President.

And all of this is contrary to what he had told Congress and also contrary as you just laid out about what the President's representation has been

about this deal. So now we know when the President was campaigning that he actually knew about this deal and Michael Cohen said he was also in talks

about traveling himself, but also the candidate, to Moscow. And so these conversations were taking place during the campaign, while Trump was

representing that he had no conflicts, no business interests with Russia.

So this is really a brand new development today. Very contrary to what the public statements have been. And it is interesting, Rudy Giuliani, one of

the President's attorneys has told us that you this is one of the written questions that Robert Mueller had put to Trump. He had questions about

this Trump tower potential deal in Moscow.

Now, Giuliani says that Trump's answers are not conflicted by what Cohen is saying today, but we don't know the exact tone of those - we don't know the

exact written answers there, what he said verbatim so it will be really up to the special counsel's office to determine whether the President was

accurate.

Now that he has Michael Cohen's cooperation, which we also learned today Cohen has been cooperating since August. He has been in with the special

counsel's office seven times and as part of the plea agreement, he will continue to cooperate with them, Richard.

QUEST: Thank you. That has set the scene beautifully for us to talk to CNN Chief Legal analyst Jeffrey Toobin who is here. Good to see you, sir.

JEFFREY TOOBIN, CHIEF LEGAL ANALYST, CNN: Sir.

QUEST: You had that --

TOOBIN: Good to see you, Quest.

QUEST: So that is the scenario we are in, and how serious is it?

TOOBIN: It is very serious because look, you alluded to it in your introduction. All throughout the campaign, one of the great mysteries was

why is Donald Trump so solicitous of Vladimir Putin? Why did he change the platform? Why did he always say nice things about Russia when the

Republican Party has never been that way before?

Now, we have an explanation. He had business interests ongoing, immediate business interests, with Russia, during the campaign, which was kept from

the American people.

QUEST: He would say the two things are not connected, that there was a potential of a deal, which never came to fruition as he said. He decided

not to, because he was running for President. The deal was long since dead.

TOOBIN: Well, it was not long since dead.

QUEST: Well, by June, it had --

TOOBIN: Well, but June, all of the primaries were over. I mean the primaries were between January and May.

QUEST: But can anybody make a connection that says he went, I mean what I'm trying to understand - get from here, is at the moment there is a lot

of smoke.

TOOBIN: Yes.

QUEST: And there is a lot of potential presumptive accusation, but to connect, he had this deal, with he went easy on Putin, on Russia, that is

an assumption, rather than a proven fact.

TOOBIN: It is an assumption. You're right. I'm saying, it is a suggestive series of facts. But what makes it especially suggestive, if it

was also innocent, if it was just why didn't he disclose that he had these connections during the campaign? He kept them secret. That's what is so

significant about this. That is one of the things that is so significant, is because it was only later that these Russian deals came out.

QUEST: His family is also getting ever closer to the fire of Mueller?

TOOBIN: Yes, but I wouldn't overstate that. I mean it is true that the business interests, you know, his family's business interests appear to be

increasingly under investigation by Mueller. But in the spirit of only saying what we know, there is no credible accusation of wrongdoing against

Donald Trump Jr., his other son, either as far as I'm aware so far.

QUEST: You have been around this sort of stuff for a long time. What is your feeling of where Mueller is going? And I mean, are we heading to the

denouement?

TOOBIN: Yes, I do think we are heading to the conclusion of Mueller's investigation. Probably in the first third or half of 2019; however, at

that point, it will move entirely into the political realm and the Democrats will be in charge of the House of Representatives, will have to

decide how and whether to pursue it, and it may simply just lie there.

[15:10:08]

QUEST: Would you agree that so far, and I know we haven't heard the final bit from Mueller, but so far, all of the offenses and the convictions, and

all of the plea bargains, are all ancillary to the core complaint, or what he was set up for, that there were improper dealings, or matters relating

to Russia and the Presidential election.

TOOBIN: So far, that's right.

QUEST: There is nobody who has being done for what this thing is really all about.

TOOBIN: Not yet, but what we have established, what has been established was there was this clear effort on the part of the Russians, whether

through WikiLeaks and the disclosure of the tapes, of the e-mails, and the meeting in Trump Tower, you know, set up to help the Trump campaign,

through the Russian government, but was there any knowing activity by people in or with the Trump campaign to help the Russian help them? No,

not yet.

QUEST: If they do not find something like that, not just a smoking gun, but a ticking bomb, or whatever you want to describe it, if they do not

find that, does the Mueller investigation become basically the President has always said a witch hunt?

TOOBIN: Not at all. I mean, there have already been multiple criminal convictions and multiple people, you know, already heading off to jail

because of the Mueller investigation. Will it lead to Donald Trump's departure from office? No. If the scenario is as you described, will it

lead to Donald Trump's departure from office? No. In fact, the overwhelming likelihood is that Donald Trump will finish his term in

office, but that doesn't mean that the Mueller investigation is a waste of time, by any means.

QUEST: We've got plenty more to talk about, haven't we?

TOOBIN: Yes, indeed.

QUEST: Good to see you, sir.

TOOBIN: All right, man.

QUEST: Thank you very much.

TOOBIN: As always.

QUEST: As we continue, the Panama papers strike again, this time Deutsche Bank's offices in Frankfurt have crushing weight of scandals at Germany's

biggest bank and the share price just about collapsing over the last 12 months.

Present business, a new raid on Deutsche Bank is raising questions about a legacy of scandals at Germany's biggest bank.

[15:15:01]

QUEST: A 170 police officers and tax inspectors swarmed Deutsche's headquarters in Frankfurt and also five other properties in Germany. The

authorities are investigating a massive money laundering scheme at the bank that was first revealed in the Panama papers. Deutsche Bank's head of

communications says the company's officials have cooperated with the authorities, and will continue to so do.

(BEGIN VIDEO CLIP)

JORG EIGENDORF, GROUP SPOKESMAN, DEUTSCHE BANK: We thought that we had provided to the authorities all the relevant information regarding Panama

papers and of course, we will now cooperate closely with the prosecutors here in Frankfurt and in Germany, as it is also in our interest to clarify

the facts as soon as possible.

I have to say, we in the last couple of years, we have proven on several occasions that we have been willing to cooperate closely with the

authorities when needed and authorities even have confirmed that.

(END VIDEO CLIP)

QUEST: Atika Shubert in Berlin, he says there that they are willing to cooperate with authorities. That is really not the point here, is it? The

fact is that these scandals happened in the first place.

ATIKA SHUBERT, SENIOR INTERNATIONAL CORRESPONDENT, CNN: Exactly. I mean, Deutsche Bank has said it has cooperated, it has given information before

in the Panama papers but what it has not done is it has not been able to root out the problems within the bank. In fact, it got to the point where

in September, the German government said, "Listen, if you can't do your own compliance properly, if you're not going to be able to actually crack down

on money laundering, then we are going to appoint an independent auditor," and that's exactly what they do.

They clearly don't have the confidence that Deutsche Bank can really police itself and the fact that there is now this new investigation on top of it,

really shows that perhaps there is much, much more going on within the bank than we're aware of.

QUEST: Right, but how much of all of this Panama papers are historic in nature? In other words, five, six, 10, 15 years ago, before all of this

new focus on compliance came into the bank?

SHUBERT: Well, this is one of the interesting things that the prosecutor mentioned to us today. They said this is not, we're not looking at

historic parts here, we're looking at a time frame between 2013 and 2018. Now, that's after the Panama papers information was leaked.

So there is a lot of questions here about what kind of activity was still happening as of this year. They said they're looking specifically at those

transactions and they pointed out that in 2016, prosecutors believed they have enough evidence to show that as many as 900 Deutsche Bank clients or

customers used these offshore accounts to launder as much as $350 million. Now, 2016 is not so long ago, so it is concerning.

QUEST: Is the prosecutor saying that the bank was negligent in not looking into it or was culpable and that it actively took part, do you think?

SHUBERT: This is the part we're not sure of yet. What we do know is that they're looking at two suspects. They won't give us the names, but they

say they're Deutsche Bank employees. They have two suspects for now, but they are also looking at a wider network. And the things that they're

looking for is whether or not there is evidence that the bank actually helped to set up these offshore accounts, specifically to launder money, or

if they simply neglected to report such suspicious activity.

QUEST: Atika, thank you for staying up late in Berlin tonight. Deutsche's scandals are adding and pushing down the results of the stock, and look at

the beginning of the year, it's around about 16 and that really was the last time we'd ever saw that because we're down now 48%, 50% or so over the

course of the year, and perhaps worse than just the stock price, the Deutsche tier one bonds are the ones that, that's what pushes up if you

like, the take on capital are most at risk if the company collapses and they're at the worst level so far this year.

If you really want to understand the problem, just look at it of what's going on at Deutsche. Let's start first of all with the question of the

series of scandals, misleading investors before the financial crisis, violating sanctions. Multiple money laundering penalties, and now this

latest investigation in Frankfurt.

If that was bad- that was the bad stuff, but actually, the bank itself, what it is doing, a very slow turn-around with repeated losses, cutting of

the work force, struggling to offload risky assets. Many of which came about from misconduct. All of which raises the question of the financial

health of the company because now, the bank has failed the stress test in the United States.

One of the few I might add who has failed the stress test leading to, needing to boost up its capital, and I mean there is always an element of

this, Donald Trump appears and yes, more headaches ahead because the relationship between Donald Trump and Deutsche Bank ...

[15:20:10]

QUEST: ... and the deals that they were financing on his behalf, the Democrats are vowing to probe ties with later.

Now, can Deutsche recover in all of this? Rana Foorohar is the CNN global economic analyst, and a columnist for "The Financial Times," joins me from

FT's office. So there, I set it all out.

RANA FOOROHAR, GLOBAL ECONOMIC ANALYST, CNN: You did. You did a great job.

QUEST: Am I being unfair in saying the bank is troubled?

FOOROHAR: Absolutely not, Richard. I mean, you're hitting Deutsche - for those of us who cover the financial markets, we've known that this bank has

a lot of risk for some time, right? It has always been talked about as one of those that had some of the biggest problems in the 2008 financial crisis

and its aftermath and I mean, as you've already pointed out, just last year, it settled a major deal with the US government, $7 billion deal for

packaging toxic mortgages and selling those knowingly. It's had numerous money laundering scandals, but what worries me is not just Deutsche, but

the way it is emblematic of the fact that the European banking sector as a whole has not really recovered from 2008.

The US banks have done well. They have gotten risky assets off their balance sheets. The Europeans have not.

QUEST: The Europeans have not done as well, but are there other reasons? I mean the softening debt crisis, which followed from the financial crisis

in its purest sense and then you have the debt crisis and then you've had Euro issues. I mean, all of these are reasons perhaps, but they have all

boosted their tier one capital.

FOOROHAR: They have boosted their tier one capital, but I would argue that the Europeans really have not gotten their heads around risk management to

the extent that some of the largest US banks have, and I think that Deutsche is really case in point.

I mean whatever was happening and whether we find out that it was knowingly happening or unknowingly happening, in some ways both are very problematic,

right, because it just reminds me so much of the situation we had before 2008 where the heads of the risk management, the biggest institutions

didn't know what was happening in their own offices.

QUEST: The extraordinary thing about the Deutsche story perhaps is it is Germany's largest bank.

FOOROHAR: Yes.

QUEST: And I mean if we think of that, let's say in the US, it would be JP Morgan Chase and the UK would probably be what? Barclays or HSBC, and to

have - I mean it is systemic to the German banking system, whatever the ECB may say on systemic rules.

FOOROHAR: That's absolutely true and you're raising two important points. One is that the German banking system has never been a model of good

governance. You know, we hear a lot these days about the Germanic model in terms of exports and how to run a rich country economy but the Berman

banking system is never something to look up to. It's always had a lot of problems in part because there is a lot of state involvement.

But you're also raising the bigger issue, what does this mean for Europe as a whole? I mean, do you start to see a toppling effect of Deutsche, gets

into trouble, does that spread to other banks? How do the effects of bond issues in Italy play into that? This is all to be discovered in the next

few months, I suspect.

QUEST: Now, you and I must talk in the future, on this question of what effects a falling share price has on a company, and why it is relevant, we

saw that Deutsche's share price is down by 50%, but if you're not planning to sell, and the company doesn't need to raise, I mean, we'll talk about

that. That is something for the future.

FOOROHAR: Okay. Sounds good.

QUEST: Thanks. Now, a few moments ago, the Fed minutes came out and it paved the way for a fourth rate hike in December and beyond that, little

things are more flexible. Before - look at the Dow, look at the Dow, because it is not quite as dramatic, but it is a replica of yesterday.

That's where the minutes came out, and the Dow goes up very sharply and what did the Fed minutes say that caused that sort of reaction?

Well, first of all, the minutes showed nearly everyone agreed another rate hike is needed fairly soon. We can just scrub out "fairly soon" and just

read December. A few participants expressed uncertainty about the timing of future increases and the Fed praised the strength of the labor market.

In other words, job growth is there, which is an upside of the Fed's mandate.

Clare Sebastian, Clare, what did you make of these minutes?

CLARE SEBASTIAN, CORRESPONDENT, CNN: Well, Richard, I think two things, first of all, I think if we've known what was said at that meeting when it

happened, I don't think Jerome Powell would have made such an impact yesterday, because this reinforces essentially what we got from him that

the Fed's thinking is closer to the markets than the markets had thought.

They do see risk on the horizon. They are starting to debate what comes after December, because of those risks whether or not it is appropriate to

keep raising rates at a level of three to four hikes this year, which they've previously had to forecast.

So I think not only did they say that they're uncertain - some of them - about the timing, some of them think that they're close to the neutral

level, but they're even debating revising the language in the statement when it comes to further gradual increases which is obviously a phrase that

has been part of the Fed's --

QUEST: What are they looking at or they're not telling us what it is ...

SEBASTIAN: They didn't say, they just debated that.

QUEST: So December is it.

SEBASTIAN: Pretty much.

QUEST: December is pretty much it, why does the Fed feel the need to return, you know, to remind everybody that it is going to be data

dependent?

[15:25:10]

QUEST: When most of us always assumed that they're not going to go on a frolic of their own just going - they're always data dependent.

SEBASTIAN: Right, well, I mean, certainly that was the phrase that Janet Yellen used over and over again, but I think it's interesting to consider

whether or not there is a feedback loop between the Fed and the markets. They did talk about the equity markets in the minutes and how that has led

to a tightening in financial conditions, and they're looking at whether or not that could lead to moderating in expectations, and all of that, so the

question is, Jerome Powell stated essentially what was factually true yesterday that they are close to the range of neutral. But was he

deliberately sending a message to the markets there in doing that despite saying something that was essentially not news? Was he deliberately trying

to bring the markets into an understanding of where his thinking was?

QUEST: Oh yes. Yes, anybody who has read Ben Bernanke's book on the crisis, and the way he describes the care when any Fed governor, let alone

the Chair, speaks, they don't give these statements, speeches, they are well crafted.

SEBASTIAN: Nothing is accidental.

QUEST: Nothing is accidental.

SEBASTIAN: Right, and particularly for this Fed Chair because don't forget in November --

QUEST: Yes, in front of the Economic Club of New York.

SEBASTIAN: Exactly. Because November, the November meeting, it was the last one that we're going to have, especially under Jerome Powell, with no

press conference. He is going to be giving a press conference at every meeting next year.

So transparency matters a huge amount to him. You could argue, because of all of the criticism that he is getting from the President, it puts even

more of an onus on him to explain his moves and why he is doing it, and why there are economic reasons behind it and not political ones.

QUEST: So look at the Dow and if we interpret where the Dow and the market is, the Fed says the market is not overvalued.

SEBASTIAN: Right.

QUEST: I mean, it's not going to be sort of - not specifically, but the reaction there, it is only Fed statements, a maybe. The President talking

about trade to get that sort of turnaround.

SEBASTIAN: Well, it was not - not only was it a much smaller turnaround than yesterday, but a much slower one, Richard. I was keeping a close eye

on it after the minutes came out and it took 20 minutes or so for the Dow to turn positive, whereas yesterday when we got Jerome Powell's comments

released ahead of when he actually said them, there was an immediate reaction and it was several hundred points.

So I think, they had the big jump yesterday and they're now waiting for the other shoe to drop, which is trade.

QUEST: Which will happen maybe in the G-20. Thank you. Good to see you, as always, thank you.

As we continue, "Quest Means Business," Donald Trump is at the G-20 in Argentina even behind the current saga heading into a trade battle with

China. Those are the stakes, next.

[15:30:00]

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

[15:30:00] (SINGING)

(END VIDEO CLIP)

RICHARD QUEST, HOST, QUEST MEANS BUSINESS: United with the air of lighting the Christmas tree and there -- oh, look at that. Wall Street rarely looks

prettier than Christmas when it's all it's happened, everyone forgets about the color of money.

I'm Richard Quest, there is more QUEST MEANS BUSINESS, who can compete with a cute girl singing Christmas carols. But we have to continue. When we

continue as we continue tonight, Jean-Claude Trichet will be here in the C- suite, I'll ask the former ECB president about the latest Brexit tensions and I'll speak to chief executives of SAP and Qualtrics about their $8

billion tie-up.

As we continue, this is Cnn, and on this network, the facts always come first. President Donald Trump on Thursday abruptly canceled his meeting

with the Russian President Vladimir Putin, just two days before they were scheduled to sit down at the sidelines of the G20 Summit in Buenos Aires.

Mr. Trump pinned the cancellation on Russia's refusal to release the Ukrainian Navy ships and sailors seized during a confrontation of the

weekend. Meanwhile, the U.S. president is lashing out at his former lawyer Michael Cohen after Cohen put in a stunning guilty plea in the Russia

probe.

Cohen is admitted to lying to Congress about a proposed Trump Tower in Moscow, acknowledging that he was indeed communicating with the Russian

government about it months before the election. Donald Trump says Cohen is lying to get a reduced time in jail.

Israel's President Reuven Rivlin is warning that anti-Semitism and the hatred of minorities corrupts society. In an exclusive interview, Rivlin

responded to Cnn's survey on anti-Semitism in Europe, saying Israel must always stand strong against anti-Semitism in all its forms and all its

locations.

A Philippines news website "Rappler" is facing tax evasion charges, officials say the company failed to clear almost $3 million in 2015 tax

returns from an investment fund. The chief executive has denied the charges.

President Trump gave Melania -- oh, there it was, it was so quick, he might have missed it, a quick peck on the cheek as the two of them left the

United States. Well, you're probably hoping for a warmer reception from the Chinese. Before leaving, he said he was very close to making a deal on

trade.

Then again on Twitter, he paints a slightly different picture on Twitter, the president says "tariffs are pouring billions of dollars into U.S.

coffers, and there was a long way to go." U.S. firms with serious exposure to the world's second largest economy, hoping a deal can be done.

According to Market Watch, these firms have the greatest to lose in terms of sales with China.

Obviously, Apple, it manufactures there and returns there, sends -- and of course, it sells there as well. Qualcomm, chips, Boeing, large planes, all

waiting nervously to see if China retaliates. Kurt Campbell was behind the Obama administration Give It Asia policy during his days at the State

Department.

Now chief executive of the Asia Group, advises companies doing business in China. Good to see you, sir.

KURT CAMPBELL, CHIEF EXECUTIVE, THE ASIA GROUP: Great to be with you.

QUEST: The company QUEST MEANS BUSINESS is planning to do business in China, should we be favorable with their trade or not? What is the outlook?

CAMPBELL: Richard, can you wait a few days? You know, we've seen many high stakes, high wire acts between the United States and China. The coming

summit between President Xi and President Trump is probably the most important bilateral meeting between these two leaders, between any leaders

between the United States and China in decades.

[15:35:00] And I really think there is a chance. These two guys actually get along, the structural impediments right now are all trending towards

competition, even confrontation. But I think both of them want to strike a deal. It may be a short-term deal, but I think the president wants to

indicate that he can work with President Xi. And so I wouldn't be surprised if we saw some signs of an easing on the trade front.

QUEST: All right, but are you suggesting it will be a fudge in that sense. That -- you know, I mean, you're an expert at this, you can -- you can put

together anything that looks like a deal, but is actually nothing more than a bit of a wall paper.

CAMPBELL: Yes, look, Richard, it's exactly right. I think the relationship between the United States and China is trending

confrontationally. And I think if I were really making long-term judgment, I would be concerned about the Chinese market. It doesn't mean that in the

short-term, I think the Chinese are going to buy a lot of Boeing jets, a lot of GE engines, a lot of farm and ranching products, I think that's

still on the table.

But ultimately, long-term technology plays, deep-imbedded business decision in the Chinese market, I'd be cautious about that right now.

QUEST: What about this idea that the transactional nature of this presidency -- now, we saw it perhaps never clearer, than with Saudi Arabia

over Khashoggi's murder. How far do you see this president going to make a deal, to get a deal or an agreement done, whatever the price?

CAMPBELL: Look, I think the Asian countries generally at the outset, Richard, thought they had Trump figured out, that he was simply

transactional, it's just finding the right price. But I think what they've come to understand is that he is more complicated. There have been a

couple of deals, prospective deals that have been floated between the United States and China, which would involve essentially a Chinese-buying

mission for American products.

But each time, the president has said that's not good enough, it's not enough, we need to see some structural changes inside China, and there are

some of it, his advisors that are saying no deal is good enough, and that ultimately China and the United States have to separate a bit.

QUEST: A question, the president's statement, his tweet about billions and billions of dollars coming in, in tariffs and taxes. Now, that's

transactional, that is looking at tariffs and taxes as a revenue-raising operation, rather than as an operation of trade policy.

CAMPBELL: Yes, you know, if you're looking for a high grade in the economics class, I think the president would probably disappoint you. He

focuses almost exclusively on bilateral trade balances, all economists would say that's not a very good measure. He also is looking at his tool

of choice, which is these sanctions, and tariffs, which I think everyone --

QUEST: Right --

CAMPBELL: Understands ultimately impedes trade and impedes the accumulation of wealth.

QUEST: Kurt, I implore you to come back again please, and help us understand these things as we get more details, not only from G20, but a

potential deal.

CAMPBELL: I look forward to it --

QUEST: We're very grateful --

CAMPBELL: Thank you --

QUEST: Thank you. And now, as we continue tonight, Jean-Claude Trichet; the former head of the ECB, come on in sir, good to see you --

JEAN-CLAUDE TRICHET, FORMER PRESIDENT, EUROPEAN CENTRAL BANK: Good to see you --

QUEST: We have much to talk about, Brexit, borders(ph), banking, economies, have a seat.

[15:40:00] (COMMERCIAL BREAK)

QUEST: Britain's Prime Minister Theresa May says there can be no extension of next year's Brexit deadline, the article 50 deadline. She says

extending it would make the old deal invalid. She means the deal, she's just turning right in Brussels. Now, the Prime Minister is pushing back

against re-opening the Brexit deal with the EU.

It is quite just about everybody we speak to who agrees that it's a mess, and it's a mess that potentially could get worse or probably will. Joining

me now in the C-suit, the former ECB President Jean-Claude Trichet, good to see you.

TRICHET: Good to see you.

QUEST: Thank you, do you agree it's a mess?

TRICHET: Yes, I mean, it was a bad decision, obviously, we have to all organize that, that I'm not surprised that we made it through a very

difficult and I would say painful fashion.

QUEST: OK, so, the deal -- if the British parliament doesn't pass it, then they're going to be coming back to the Europeans to say, tinker with it,

renegotiate it. What would your advice be?

TRICHET: No, I think negotiations seems to me something which is totally out of the table. I would say in that case, we are -- we have probably

the choice between the new referendum or new elections, and then we will see what happens. That depends on the Prime Minister, and perhaps also on

the labor position and also on the conservative position. I mean everything is a political --

QUEST: But tell me, if you are Europe --

TRICHET: Yes --

QUEST: And you want the U.K. to stay in, now is the chance for you to start to play your own policies, to ensure --

TRICHET: I mean, all the 27 are eager for the U.K. to stay. You remember I said, this is of the U.K., there was not a single other country calling

for the U.K. to leave. The U.K. created its own problems which are two- fold. One is simple Brexit with the deal as has been negotiated. The costs for the U.K. is going to be -- is very significant, very substantial.

Perhaps 2.5 percent, 3 percent of the GDP, if there is no deal, it is according to the Treasury, according to the Bank of England, something like

9 percent of the GDP, between 8 and 10. So it's a gigantic mess, that's obvious.

I noted with some -- I would say hope that Theresa May said, we have three options, in case it is not adopted, either we have no deal or we have

possibly remain. And of course, she mentioned that in any case, the deal had to -- her deal had to be adopted.

QUEST: Yesterday, Jerome Powell spoke and sent the markets roaring like a rocket, today the Fed minutes came out, and they were up to -- and it was

all talking about being more flexible. And from what you see of Fed policy at the moment, did it look as if they were on an automatic trajectory

rather than data dependent?

TRICHET: No, they always said that they were data dependent --

QUEST: But we all agree, we always have --

TRICHET: But I mean, they had forward guidance which was quite clear, and it seems to me that they have decided to stress the fact that there were

data dependent because I said to Chairman Powell, they are close to what would be considered by themselves by the Open Market Committee as neutral

rates.

QUEST: So do you think, but --

TRICHET: Well, see, I mean again, what counts are not necessarily on the rhetoric, what counts are the action. And we will see exactly what they

will decide.

QUEST: When you --

TRICHET: But I have confidence in the Federal Reserve, they proved that they were very reliable in the past and I have full confidence for the

future.

[15:45:00] QUEST: When you were president of the ECB, how aware were you that every word you spoke was interpreted as being, is he going to raise

rates --

TRICHET: No, they --

QUEST: Or lower rates?

TRICHET: No, the danger of course is that there is a tendency to over assess, over interpret what you're saying. It might have been a little bit

of the case for Chairman Powell, and the last time he spoke, it was considered very hawkish rhetoric, which I trust was not his own intention.

And this time, it has been considered incredibly dovish, which again, I trust is not necessarily his intention. What counts, again, is the

action, the decision.

QUEST: The Deutsche Bank is in the news again for a scandal, Rana Foroohar earlier on the program says that the European Banks have been slower and

less efficient at restoring their risk assessments and compliance abilities than the American banks. Would you agree?

TRICHET: Well, first of all, in the U.S., the financing of the economy at the time of the crisis was 25 percent on the -- for the banks and 75

percent on the markets. In Europe, it was exactly the contrary, 75 percent from the banks, 25 percent on the markets.

So you see, we are living on both sides of the Atlantic in a different universe on that standpoint of who finances the economy. Which is -- which

are the entities that are advancing the economy.

QUEST: Yes --

TRICHET: And I take it that from that standpoint, it was easier for the U.S. to recapitalize their banks because all things being equal, it was

three or four times more easy for the U.S. than for Europe. So we have to take that into account. That being said, a lot of hard work has been done

in Europe, even if I agree of course that we still have a lot of hard work to do.

QUEST: The G20, I've often wonder -- I mean, truth, in 2008 and 2009, London and then Pittsburgh or Philadelphia, they were in many ways the

height of G20. But now, you've got Saudi Arabia at loggerheads with Turkey, you've got the U.S. and China barely speaking, U.S. and Russia,

you've got Europe and the U.S.

Is it worth --

TRICHET: I mean --

QUEST: What comes out of the G20?

TRICHET: There is still a global economy, totally inter-connected. We are all interdependent, so that is still there. So the governance of the

global economy remains absolutely of the essence. It's true that there are a lot of tensions here and there.

It is also true that the G20 is very efficient when we are in a full-blown dramatic crisis. And it was the case in London and in Pittsburgh, when you

are not in a full-blown crisis, well, you have the feeling that things can go on and so forth. And what I would say, we have to be fully aware of is

that the situation is very demanding, very dangerous.

That we have all to be vigilant, and it is more or less what we are saying in the report we presented to the G20.

QUEST: Good to see you sir.

TRICHET: Pleasure.

QUEST: Always good to have you here, sir, thank you.

TRICHET: Pleasure.

QUEST: The dying art of the IPO, SAP and Qualtrics celebrate an $8 billion deal. Now, the chief execs of both companies tell me why keeping it among

friends was more attractive than taking projects public. IPO over best friends in a moment.

[15:50:00] (COMMERCIAL BREAK)

QUEST: So they rang the bell at the Stock Exchange, SAP and Qualtricks, well, SAP made Qualtrics an offer it couldn't refuse. The business

software giant waved an $8 billion cash at the starter tech company and they both celebrated the union ringing the closing bell earlier this month.

It came after Qualtrics did an abrupt about-face, cancelling its plan debut on Wall Street. And usually companies pop the cork when they go public,

not usually when they cancel the IPO. The Qualtrics CEO Ryan Smith says he felt real peace after the private sale.

So both gentlemen -- anyway, this is the CEO of SAP, Bill McDermott spent months convincing Ryan Smith to ditch the IPO and take the offer. They

both join me now from Los Angeles. Ryan, what did he say? What did he say that made it so attractive? Because IPO's are normally a way you get out

and run for the hills.

RYAN SMITH, CHIEF EXECUTIVE OFFICER, QUALTRICS: Well, first, Richard, thanks for having us on. I think this one is less about what Bill would

say because I've been doing this a long time, I started Qualtrics 16 years ago in my parent's basement and we have a vision of experienced management

to take the experiences of the world and power among the Qualtrics platform.

But it's more about what SAP does. I mean, they're the only company in tech that's end-to-end, whether it's, you know, the CRM, the HRM space or

HIRS and ERP, and we believe that products, customers and --

QUEST: Right --

SMITH: Employees are what really matters, and SAP has the full platform. So when I looked at the opportunity, I started talking with Bill, it became

much more about what SAP does as opposed to convincing me that, hey, this is a great sell job --

QUEST: All right --

SMITH: Or there's a number that's there, and that's what I'm most excited about, is the future.

QUEST: So Bill, related to this, you gave -- watched Qualtrics become part of the family. How worried are you at this new call for regulation of the

digital economy? Not so much as on privacy grounds, but time and again, people are saying there needs to be more regulation for the digital sector.

Do you worry about that?

BILL MCDERMOTT, CHIEF EXECUTIVE OFFICER, SAP: Well, Richard, as you know, from covering SAP for a long time, not only are we the market-leading

business software company in the world, but we're also on the front line of making sure the privacy of every consumer that does business with our

customers is fully protected.

The British Standards Institute, for example, acknowledged that SAP was the forerunner in making sure that data privacy and protection was absolutely

rock solid.

QUEST: Right --

MCDERMOTT: So we're with you on that data privacy and protection is essential, and we're proud to be the first and market-leading company in

that department.

QUEST: Ryan, is there a gap developing between, if you like, where public demand is and where politicians are, and where digital companies are, and

the two are heading inextricably for conflict at some point?

SMITH: Yes, I think -- I think ultimately, we're all trying to have the same -- the same goal. I think people are coming about it from different

ways in different areas, but look, as Bill said, I mean, before we were even considering SAP, I mean, we just had our fed ramp certification, all

right? So 27,000 and one. We're all trying to have this promise of this global internet and technology to be as powerful as it can, but with the

safest, the safest platform that exists.

Now, there's a lot of unintended consequences that we're watching in tech - -

QUEST: Right --

SMITH: That what happens when 8 billion people use a platform, I think we're all understanding that. It's no different than a telephone, and

weird stuff happens.

[15:55:00] But I think what we've got from an enterprise technology standpoint is we're gathering data that is allowing organizations to power

their business in a way they've never done it before. And our job is to make it as secure and as fast and as actionable as possible, so that the

world runs --

QUEST: Right --

SMITH: Better. And between SAP and Qualtrics, that's what we're able to do and there is nothing else in the world like it.

QUEST: Bill, you got the last word, more deals to come?

MCDERMOTT: Well, the deals -- you know, this is a big one, obviously, and there won't be any big ones for a while. But what I can tell you, and I

think it's very important for your viewers, Richard.

SAP has 77 percent of the world's transactions running through our systems. By far, the market-leading software company in the enterprise. With

Qualtrics, we now claim a new category --

QUEST: Right --

MCDERMOTT: Called Experience Management. And this is really important. We need to know, as leaders of companies, how our customers are doing in

real-time. What is their sentiment about our products? How are our people in the company completely obsessed with the customers outside the company,

and what's the impact of that relationship to the brand?

Qualtrics completes us.

QUEST: All right --

MCDERMOTT: This was a beautiful move, and Richard, SAP and Qualtrics is an unbeatable combination. Thank you for having us today --

SMITH: Yes, appreciate it, Richard.

QUEST: Gentlemen, thank you. I need to leave it there as I bring some news that we're getting into Cnn. The German Chancellor Angela Merkel's

plane flying to the G20 in Argentina has been forced to turn around and make an unscheduled landing.

Apparently, there was an electronics systems failure according to our affiliate "Rdl". Asher(ph), our reporter on board says they were flying

over the Netherlands when they were told there had been an electronics systems failure, they turned around and went to London -- Cologne, they've

now been told their plane is getting a replacement part. We will have a profitable moment after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's profitable moment, all you really need to know is that the gains that followed the losses has now gone, and the market is showing

losses once again across all the major indices. But it doesn't really matter tonight, because they're lighting the New York Stock Exchange

Christmas tree, the 95th lighting ceremony.

And on the Exchange, well, Santa Claus is ringing the bell which is all we need to know because that is 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.

(BELL RINGING)

The bell is ringing, Santa's doing the bell ringing, the day is done.

END