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QUEST MEANS BUSINESS
Ten Killed in Paris Apartment Building Fire; Controversy Over U.S. Weapons Lost in Yemen's War Zone; ISIS Hostage John Cantlie is Believed to Be Alive; Pope Francis Celebrates First-Ever Mass on Arabian Peninsula; New Questions Raised About Death of James Brown; Theresa May Visits Northern Ireland to Discuss Backstop Issues; U.K. PM to Meet EU Leaders on Thursday; White House States Trump will Discuss Infrastructure in His State of the Union Address; Prosecutors Seek Trump Organization's Executives Interviews; One Hundred and Forty Five Million Dollars in Cryptocurrencies Frozen After Founder Dies; Solid Earnings Drive Stocks Higher; Boeing Partners with Supersonic Jet Maker. Aired 3-4p ET
Aired February 5, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: We have an hour to go on Wall Street as we head to the close of trading. Look at the Dow, it took a dip
at lunchtime, but since has rallied back up again, gains over a half a percent. It's a good, solid day on the market. You can see that looking
at the breakdown of the Dow 30.
Boeing has the best. We'll explain why it's at 3%. Also, Apple has had a good session. Green outweighs red so far this afternoon, with an hour to
go, this is what's been moving the markets.
Consumer stocks are today's must have. It's a surprising luxurious day for the markets across the board. Donald Trump dines with the Fed Chair on the
eve of his State of the Union address. We'll try to pass what was on the menu.
And I showed you Boeing was the best gainer of the Dow. We'll show you how and why Boeing has investing into a supersonic company.
Live from the world's financial capital, New York City, on Tuesday, the 5th of February. I'm Richard Quest. I mean business.
Tonight, the State of the Union is strong and those are the word we are expecting to hear from President Trump in six hours' time as he gives his
State of the Union. However, with the government divided, the threat of another shutdown looming and the Fed striking a note of caution, the State
of the Union can also be described as uncertain. Look at the facts.
Administration officials say the President will call for bipartisan solutions to immigration, infrastructure, high drug prices. Now, that's a
similar message to last year. What's changed, though, however is the balance of power and particularly this man, Paul Ryan - Speaker.
Well, he is a symbol of what has changed because the Democrats now control the House and where Paul Ryan was, Nancy Pelosi will be Speaker this year,
and those Democrats of course, are showing few signs of compromise.
CNN's Abby Phillip is in Washington. Abby, we're going to get -- I assume we will get a draft of the State of the Union in a couple hours or so
embargoed before delivery. But here with the President, it's always what he says unscripted, not what he says, is he likely to go off script
ABBY PHILLIP, WHITE HOUSE CORRESPONDENT, CNN: Well, it is very much always about what President Trump wants to say, sometimes at the very moment
before he says it. The White House hasn't really promised any excerpts because they're expecting him to be editing the speech up until the last
But they have been giving us some clues as to what he is likely to do tonight, and one of the themes as you mentioned is going to be
bipartisanship, going to be plotting a way forward or a path forward in a divided government as Nancy Pelosi has taken the gavel of the House of
Representatives, President Trump is facing a significant difference in the political climate than he faces here in Washington.
And in response to that, the White House is going to suggest the Democrats can work with Republicans on a number of different issues. They will use
criminal justice reform, which passed last year with bipartisan support as a sort of template for how this can go in the path forward but they're
going to suggest that infrastructure could be a major issue in which they could cooperate, perhaps, on drug pricing as well, but the looming issue as
you know, Richard, is going to be this issue of the border ball.
It is likely that the government could either be closed on February 15th, yet again, or President Trump might use executive action to build his wall
if Republicans and Democrats can't come to a compromise in on that border wall.
And by all estimations, the President is not backing down from his demand for a wall. However, White House officials have said that he is not
expected to declare a national emergency tonight.
QUEST: All right.
PHILLIP: He is holding off on that for another few days. But what he will say tonight to maybe take the temperature down from this debate is really
an open question especially since he's not really been willing to do that the days preceding this, Richard.
QUEST: Abby Phillip, thank you. Now, I want you to get your phones out, and go to cnn.com/join. Tonight, we are asking you what should Donald
Trump's focus be in his State of the Union address? The U.S. economy? Trade? Infrastructure? Or Immigration?
As you look at it, what is the most significant factor that you want to hear addressed tonight? It's cnn.com/join and you'll see the results on
your screen. It's the economy? Its infrastructure? Its trade? Its immigration? Of those issues, which do you consider to be the most
QUEST: Now, on the question of the economy, tonight's State of the Union will be a chance for Mr. Trump to tout his economic success over the past
year. We'll get a chance to see how he's carried out his agenda.
Back then, Donald Trump a year ago celebrated sweeping tax changes in the tax system.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Since we passed tax cuts, roughly three million workers have already gotten tax cut bonuses. Many of
them, thousands and thousands of dollars per worker and it's getting more every month, every week.
Apple has just announced it plans to invest a total of $350 billion in America and hire another 20,000 workers. This, in fact, is our new
American moment. There has never been a better time to start living the American dream.
(END VIDEO CLIP)
QUEST: Now, it is true following on what he said that workers got one-time bonuses. There is the tax law effect, and you see how, indeed, that fanned
out through against the annual rate of change on wage growth. But you need to remember, rising inflation has cut into these gains.
Then you've got the business investment. Now, business investment has been short lived. Sure, there is the effect of the tax cut. There is the tax
law effect. There is the 11.5%. And then it dwindles off again. Many businesses spend the windfall on buying back stocks, buybacks and even
One of Donald Trump's most important talking point jobs and jobs and jobs again. Last year, he honed in on the auto industry and how major
manufacturers were boosting growth at home.
(BEGIN VIDEO CLIP)
TRUMP: Many car companies are now building and expanding plants in the United States, something we haven't seen for decades. Chrysler is moving a
major plant from Mexico to Michigan. Toyota and Mazda are opening up a plant in Alabama. This is all news Americans are totally unaccustomed to
For many years, companies and jobs were only leaving us, but now they are roaring back.
(END VIDEO CLIP)
QUEST: Now, General Motors announced it will add 1,000 jobs. GM has already cut thousands over the past year. So the net effect on U.S. job
autos. Now, 2014 had 40,000-odd thousand, but going to 2018 last year, and only 23,700 jobs were added.
That is the lowest number for some four or five years. Donald Trump's purported an ambitious infrastructure agenda in his last address. He's
been pushing for reform on infrastructure since he got on the campaign trail.
(BEGIN VIDEO CLIP)
TRUMP: I am asking both parties to come together to give us safe, fast, reliable and modern infrastructure that our economy needs and our people
Tonight, I'm calling on Congress to produce a bill that generates at least $1.5 trillion for the new infrastructure investment that our country so
(END VIDEO CLIP)
QUEST: A D-plus, infrastructure plan failed. At least that is according to the American Society of Civil Engineers, which gives infrastructure a D-
plus for the administration. The Chamber of Commerce says it's a priority. You seem to agree. It's the highest number, 44%.
Sarah Bloom Raskin served as Deputy Treasury Secretary and as a Governor at the U.S. Federal Reserve. Good to see you. Thank you. Well, now you have
the wrath of economic issues. What will you be listening for most carefully?
SARAH BLOOM RASKIN, FORMER GOVERNOR OF THE U.S. FEDERAL RESERVE: Well, Richard, I think you've laid out very comprehensively many of the economic
issues that Americans are going to be looking for. And I have to say, looking at some of these areas, I think there are some focal points.
One, the tax bill. That was a very expensive tax bill. I mean, it blew a big hole in our deficit. And I'd like to know and I think a lot of
Americans would like to know, whether the net benefits have really panned out for middle Americans? So that is really one area of focus.
QUEST: The economy seems to be doing extremely well. Not as well as it had been, and there are huge risks on the horizon. The shutdown wasn't
really a major long-term risk as such. So what do you see as the biggest risk?
RASKIN: So there are a number of risks and they are taking the form of what I would say developing headwinds to some momentum in our economy.
RASKIN: One having to do with a slowdown in global demand, so we are seeing some of the powerhouse countries that had been good sources of
exports for our businesses. Those countries are experiencing slowdowns in their demand. So global demand, slowing down, big headwind.
Trade tensions, right? These trade wars are continuing. I haven't seen much of a resolution of them to date. That is starting to wear quite thin.
RASKIN: On American businesses. Those are two of the headwinds.
QUEST: Right. Stay with me. Don't go away. I just want to brief on another issue ahead of the State of the Union address. Donald Trump dined
with the Fed Chair, Jerome Powell on Monday night at the White House.
Apparently, they had steak. It was an informal dinner. The Vice Chair was there as well to discuss the economy, Sarah, how unusual is it for the Fed
Chair and the President to dine in such fashion?
RASKIN: So it is not particularly usual. This was, I would say, problematic from a couple of different perspectives. One is the timing
that this dinner occurred. Right before the State of the Union. It undermines the sense of independence that the Fed, as our Central Bank is
supposed to maintain.
I don't think Americans like to see a Central Bank that is appearing particularly political. It should not be a political or be perceived as
political. And that dinner could have given the impression that there were discussions that were of a political nature.
QUEST: Right. But if we go back to when Donald Trump was highly critical of Jerome Powell and saying he regretted appointing him. At that time,
just thereafter, Powell said the Chair said, he would meet with the President and if the President asked him to resign, he wouldn't. Do you
think Jerome Powell has sufficiently stated his willingness to stand up against political pressure?
RASKIN: I think he - I think the Fed is doing everything it can. This is not a great situation for the Fed to be in. A situation where the
President is haranguing constantly the moves that the Fed is making. That is something that is quite problematic from the perspective of policy
I think Jay Powell has done a very good job through his press conferences, through his prepared remarks, through other speakers, who are members of
the FOMC to make the case that the Federal Reserve is independent. It is not going to be pushed around with political motivation.
So I think he has done what he can. I think the Fed must have been attempting to inoculate itself a little bit by having this dinner, as you
point out, Richard. The Fed had agreed at a certain point to actually have the dinner. And so probably wanted to go through with that commitment to
have the dinner.
RASKIN; But we don't know what happened. We really don't know what transpired. I know the Fed put out a comment, as they should. It would be
good for the American people to actually see the White House do a readout of what happened at that dinner.
QUEST: Good to see you. Thank you for joining us. Please come back again to help us understand what is happening in these issues in the future.
Much appreciate it.
As we continue tonight, BP doubles its money with a big bet on shale. And Boeing takes flight. We will bring you the highest of the trading day in
the closing hour. And the untimely death of a cryptocurrency platform's chief executive, now, there's millions of dollars in limbo, locked away
from the rightful owners, and all because no one can find the password.
QUEST: So there you have the way the day has gone, and look at that dip at lunchtime, it was quite wondering whether or not the gains of the day would
evaporate completely. Here in the "Quest Means Business" trading post, we can show you the losses or at least, the full off at lunchtime was reversed
and we're back to smiles all around.
The Dow is up 150 odd points. The NASDAQ is up nearly three-quarter of a percent. All in all, it is absolutely green across the field. That's the
color of the day so far. It's the trading now the market is trading at a two-month high with consumer stocks driving the gains.
So, for example, Estee Lauder was up 12% and Ralph Lauren saw a bounce of holiday sales. Boeing, now, Boeing is fascinating. The stocks are about
$407.00. It is at a record high. Record high at the moment. And even the bad news wasn't that bad. Google's parents, Alphabet actually paired early
We need to talk about this to who know most. Samuel Burke is in London. Paul La Monica is here with me. Gentlemen, start with you, Paul La Monica.
Today was interesting. Strong stock, solid day. It looked as if the market was about to topple and then it came back quite strongly late
PAUL LA MONICA, CORRESPONDENT, CNN: Yes, I think investors, as you pointed out, Richard, they are very, very excited by the steady stream of good
earnings news that we continue to get.
You mentioned Estee Lauder and Ralph Lauren. These are two consumer stocks there showing that it's not just a world where Amazon and Walmart reign
supreme so to speak. Although, I've got a piece up on CNN Business right now about how Wall Street actually hates a lot of big consumer stocks,
particularly the ones that don't have pricing power and are getting squeezed by Amazon and Walmart.
But Ralph Lauren and Estee Lauder apparently not two of those companies.
QUEST: It's nice to see stocks move that much on the back of earnings, particularly -- Samuel, last night, Alphabet, the results were interesting.
The stock did not react in a favorable way.
SAMUEL BURKE, BUSINESS AND TECHNOLOGY CORRESPONDENT, CNN: Impressive revenue, but the guidance wasn't as strong as people had hoped and Google,
rather, is spending big bucks to be able to get the revenue that they have and the stock went down at first. But today, as you pointed out, it went
up at the end of the day, Richard, a few months ago, everything was looking very bleak and these earnings reports for tech companies are incredibly
strong. The proof isn't in the pudding. The proof is in the earnings.
QUEST: Are we seeing rotation back into FAANG and tech as a reversal of what we saw in November-December?
LA MONICA: It's starting to look that way, I mean, Apple, we might look back and say that Tim Cook was a genius for warning as early as he did?
You are right after New Years that sales in China were going to start to slow because then the numbers came out. They weren't great. But they
weren't as awful as he made them sound they were going to be.
Apple is on this nice little rally now, stock is up more than 12% since they reported earnings last week, and once again, Apple is now ahead of
Microsoft, Amazon and Alphabet as the world's most valuable company.
QUEST: Samuel, is it the feeling that when you look at the FAANGs, each of them had their individual problems in the reporting season going into 2019.
Have they allayed much of the fears? Amazon on its growth? Facebook on its regulatory issues. Netflix on its spend and competition and Google as
BURKE: By and large the answer to your question is, yes. They've enjoyed great success and they've had pretty strong guidance going forward and
they're being careful.
I want to just put up on this screen what the big three takeaways are from FAANGs now that earnings season is finished for them. Number one, Amazon
is hitting Google hard, whether it's Cloud computing, devices like the Alexa or display advertising. But there is also fierce competition for
Amazon. We saw that Target, Best Buy and Walmart are catching up and last, Facebook reigns supreme socially for years.
You and I have been talking about that moat they've built up with WhatsApp, Instagram and Messenger and that is protecting Facebook, even though the
core social app is doing pretty well considering an entire year - a year of bad press.
QUEST: Boeing, the stock is up 3.5% or 3%. It's at a record high, Paul. This deal with Aerion, for supersonic. It is getting involved in
supersonic business jets. I look at the share price. I mean --
LA MONICA: Stunning, over $400.00 a share. You probably can't wait to get on one of these supersonic jets. They are going to launch, 2023, I believe
is when they are going to do the first transatlantic flight.
QUEST: Just look at that stock. Up from about 200 to -- about 300 to 409 in a month, a gain of 30%.
LA MONICA: I think investors had gotten so worried about China and it's true that Boeing has significant exposure to China, but as the company has
reminded us, Chinese airlines are still spending to improve and enhance their own fleets as well, it's not just U.S. carriers and European
carriers. They just got a big deal as well, Boeing from Japan's ANA, so obviously, Boeing is benefiting from global carriers upgrading their
fleets, and it seems like right, Boeing has a legs up or wheels if you will on Airbus.
QUEST: Samuel, Slack and it's - we talked yesterday about its decision to go to market in a confidential way. I was talking down at the Stock
Exchange today. Interesting, they don't know quite what to make of it?
BURKE: Well, listen, Spotify really changed the game in terms of public offerings, that they went about it without going through the traditional
banks. So I think we are going to see a complete reset especially in 2019 and Slack may be just part of the fact that they are being so confidential.
But the real question is do you Slack, Richard, in case the audience doesn't know, this is the rebirth of Instant Messenger, but here at work,
are you on Slack, Richard? Because I feel like I can only get you via WhatsApp.
LA MONICA: We talked about that yesterday, Samuel. He is not on Slack. The rest of us painfully often, too often Slack.
BURKE: Get with the program, Quest.
LA MONICA: We need a Slack channel about why Richard is not on Slack.
QUEST: No, no. I'm going to -- I'm going to hold out. I'm going to be the one that resists come what may.
BURKE: Like you and your Netflix account.
QUEST: I've got one now. I have a Netflix account.
BURKE: Yes, years after everybody else. You will finally get all those Slack messages I have been sending you.
LA MONICA: I don't see the Blackberry anymore.
QUEST: Hey, hey. Will you two stop ganging up?
BURKE: Ring the bell, Paul. Ring the bell for me.
QUEST: Don't even --
LA MONICA: I know that I'm not allowed to touch that bell, done you worry.
QUEST: Right. Let's just move on. Let us - we will leave the guru and the youngster, the millennial to themselves. It was a stellar day for
European markets. London FTSE saw the best gains of the day, 2% up, thanks to a falling pound that makes British exports higher.
BP shares soared trade on Tuesday closing up over 5% in London. They're all major reported blockbuster earnings. Profits doubled in 2018. Anna
Stewart has the details with me now. Anna?
ANNA STEWART, REPORTER, CNN: Yes, profit jumping over 65% compared last year compared to 2017. Pretty impressive numbers, particularly given the
oil price in the last quarter. Oil and gas production particularly, Richard, up 8% last year. So significant.
Some of it to do with new projects coming online, some of it to do with efficiencies. But a big part of this is of course the acquisition of BHP's
U.S. shale assets.
QUEST: Okay. But, Anna, BP obviously is so connected and tied to the oil price.
QUEST: But still a behemoth of a company that paid fortunes for cleaning up messes.
STEWART: Quite and they're still paying a fortune to clean up messes, although, it is coming to the end of the oil spill disaster. But in terms
of the oil price, Bob Dudley today thinks that the oil price is firming. Their belief if that oil will trade between $50.00 and $65.00 barrel this
year, assuming it stays in that band. They are looking at another probably fairly successful at least first of 2019.
QUEST: Anna, stay with me. I've got Paul La Monica as well. To both of you, why is the FTSE so strong? I can see why on an individual day like
today, you've got the export play going on here, but Paul La Monica, why is the FTSE just not falling over?
LA MONICA: Yes, it is surprising given all the concerns about Brexit, I'd imagine, that, you know, investors are not viewing Brexit as a sign that
U.K.-based companies, particularly those with strong businesses overseas are all of a sudden going to not be profitable or as profitable because of
what might happen, but, you know, that would be my guess.
QUEST: But Anna, it makes a nonsense of what we say frequently, which is, you know, markets have certainty. Markets want certainty and the one thing
they haven't got is certainty.
STEWART: I mean, it's a very fair point, and I think what we are seeing is a largely reaction to sterling, I'd say, in addition to some powerful
earnings that we've had with BP. However, most investors believe at this stage that Brexit isn't going to happen by the end of March.
The ones I speak to believe that it will have to be extended. Of course, as we get closer to that deadline that certainty will start to shiver and
shake. So it will be very interesting to see how the FTSE trades in the next few weeks.
QUEST: Now, we are looking at a one-year chart there for FTSE, but if you look at the 10-year of a 15-year chart of the FTSE, you see that actually
it is only where it was, roughly in 2007.
LA MONICA: Yes, you obviously have an index that is still just barely coming back from the pre-financial crisis days. That obviously is a cause
for concern, but I think to Anna's point, I think a lot of big companies like BP are proving that they are global in nature, that they can do well
even though Brexit may or may not become reality in the not so distant future.
But as Anna pointed out, it's probably going to get kicked the can down the road yet again. And I can't speak for what's happening in Fleet Street in
London. But I mean, Wall Street, I think we are growing tired of hearing, Brexit, Brexit, Brexit. Is it going to happen or not? Wake me up when it
QUEST: Anna thank you.
LA MONICA: It's the arrogant yank.
LA MONICA: I'd never say that.
QUEST: Guru La Monica, Anna Stewart there. Thank you. As we return, we'll stay with the issue of Brexit. Theresa May was talking to Northern
Ireland on business, looking to win support for her altering the Brexit deal days before a climatic meeting with E.U. leaders. She is meeting
Jean-Claude Juncker on Thursday. We will be live in Belfast after the break.
It is "Quest Means Business" with the old fogies here in the house.
[15:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: I'm Richard Quest, hello, there's more QUEST MEANS BUSINESS in just a moment. When federal
prosecutors are looking for interviews with executives of the Trump Organization, and the legal problems are mounting for the president.
Now, we've all forgotten the password in our time, it's not every day, cost you more than a $100 million, think about it. On this program, this is
Cnn, and here on this network, the facts always come first. In Paris, at least ten people have been killed and dozens of people injured when flames
engulfed an eight-storey apartment building during the night.
Officials suspect foul play and they've arrested a woman who lives in the building. A top U.S. military commander says there are no plans for the
U.S. to ends its support of Saudi-backed forces in Yemen. Even though, Cnn reporters revealed that many U.S. weapons end up in the hands of Islamic
militants. One U.S. senator says the report should be a wake-up call for the U.S. to get out of the Yemen civil war.
A high profile ISIS hostage John Cantlie is believed to still be alive and in the terror group's captivity. According to the British government, the
journalist was captured more than six years ago in Syria and is being paraded in ISIS propaganda videos.
Pope Francis is headed home, back to Rome after a historic trip to the UAE. The pontiff celebrated mass in front of more than a 100,000 people in Abu
Dhabi earlier, becoming the first pope to do so on the Arab Peninsula.
A Cnn investigation is raising new questions about the death of the soul legend James Brown. At least, 13 people who knew the singer have said they
want an autopsy or a criminal investigation. Brown's official cause of death in 2006 was from a heart attack and fluid in the lungs. He died in
the hospital at the age of 73.
Only 52 days, that's how long Theresa May has left to come up with a deal to avoid a disorderly Brexit. The successful failure of that mission
largely depends on what happens in Northern Ireland and on the island of Ireland. The seamless border between the north and the south, between
Northern Ireland and the Irish Republic.
Theresa May is in Belfast today, and she said she will not put Northern Ireland and the border at risk. However, she had to admit that the
backstop guarantees demanded by the EU are holding her Brexit deal hostage.
(BEGIN VIDEO CLIP)
THERESA MAY, PRIME MINISTER, UNITED KINGDOM: Many people, businesses, farming, organizations and voluntary groups in Northern Ireland agreed with
me. They spoke out in support of the Withdrawal Agreement and they defended the backstop.
I know that wasn't an easy thing to do, and I'm grateful to them for doing so. I fought hard to make the case for the deal as it stands. I believed
it could command a majority in the House of Commons.
But I've had to face up to the fact that in its current form, it cannot, and to the need for changes to the backstop is the key issue.
(END VIDEO CLIP)
QUEST: And so, Theresa May will take that message to Brussels on Thursday when she meets with the EU Chiefs Jean-Claude Juncker and Donald Tusk.
Charming and polite they will be, but to what benefit will be the issue. Cnn's Nic Robertson is in Belfast.
And Nic, the issue of course is how well the prime minister's message was received?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, Richard, I mean, what Theresa May faces now, you know, tomorrow, when she wakes up here in
Northern Ireland, which is quite a rare occurrence in the first place, not only has she been here to give this speech to the -- that we're talking
about that -- to the -- to the businessmen here in Northern Ireland with her pitch across the community, of course.
[15:35:00] But she's going to meet with all those individual political parties. But I think the line that she's given to the Democratic Unionist
Party is that I am a tough negotiator, I can get this done with the European Union. They offered me a backstop that wasn't suitable and I
turned them down on it.
So -- but she also had a message there for the European Union which was, you know, I wanted this deal, the deal worked for me, but I've had to
accept that the parliament doesn't support it. So I have had to accept that there has to be a change to it, implication being you, the European
Union also need to accept that there's going to be a change here.
But the difficulty here in Northern Ireland is not just about winning over the Democratic Unionist Party or prop up personnel in the majority. The
difficulty about all this talk is, it opens up -- there are sort of old issues here that led to so much violence and years gone by in Northern
Ireland, which are the different aspirations here to stay in a strong union with the United Kingdom or aspire towards the united Ireland.
And thus, Brexit has unfortunately opened up that debate again, and this is what Theresa May is going to hear about from all the politicians tomorrow
of many different stripes. Unfortunately, the difficulty for her is she only needs the DUP to win them over and all the other politicians know
that. So that inherently puts tensions in all those discussion, Richard.
QUEST: Nic, can you hear me? Are you able to hear me, Nic?
ROBERTSON: I've got you now, Richard.
QUEST: Good. So with this in mind, I mean, the real problem here is not in Northern Ireland, the real problem she's going to find is when she goes
to Brussels on Thursday with such a united front and so many comments saying, they won't re-open the Withdrawal Agreement, but will tinker with
the political declaration. I just don't see what comes out of it.
ROBERTSON: Well, this is going to be the difficult -- the tough part of her discussion with the DUP because, clearly, she'll have to prepare them
to accept something less than what they're demanding. And this is not something that the DUP are really very good at.
They never signed up to that Good Friday Peace Agreement in Northern Ireland. It's not in their political DNA to compromise the union across --
between Northern Ireland and mainland Britain is not something that they feel that they can have any degradation in.
So when she, as you say, is very difficult there for her to see how she can win the support for whatever deal --
QUEST: Right --
ROBERTSON: She gets back in London by falling short in Brussels. The answer to that has to be, she has to turn the other way in London and reach
out across the party divide, to the Labor Party, maybe compromise her position on the Customs Union, there's been talk about that.
But the analysis has been so far Theresa May has taken the line that keeps her party united. Any change from this --
QUEST: All right --
ROBERTSON: Reaching across party-divide could threaten that unity to the conservative party.
QUEST: Nic Robertson, thank you, in Belfast, good to see you, sir. Democrats say they won't fund President Trump's border wall. It's a more
complicated question for infrastructure. The White House says President Trump will try again tonight to build support for an infrastructure plan.
We'll discuss that, think about it after the break.
[15:40:00] (COMMERCIAL BREAK)
QUEST: Our top story tonight. In the past is any indication, infrastructure is going to be a talking point for the president at
tonight's U.S. State of the Union. It will be big and Congress' week too. White House, Democrats are going to hold infrastructure hearings on
Thursday. On "NEW DAY" this morning, the White House Press Secretary Sarah Sanders stressed that political parties need to work together to bring
(BEGIN VIDEO CLIP)
SARAH SANDERS, PRESS SECRETARY, WHITE HOUSE: Infrastructure is one of the easiest ones for us to look at. Everybody in this country knows that we
have crumbling bridges and roads that need to be fixed. We also have a technology infrastructure that needs to get better.
Whether it's securing networks, whether it's protecting our tech infrastructure, those are things that Republicans and Democrats agree on.
They know we need to work on.
(END VIDEO CLIP)
QUEST: U.S. Chamber of Commerce says now is the time to invest in infrastructure. Joining me now, Clarence Anthony is the executive director
for the National League of Cities. He chaired a meeting with the chamber this morning. Good to see you, sir.
The problem with infrastructure is everybody says, oh, we really must do something about it. And, A, how is it paid for, and, B, who is going to
get on and do it?
CLARENCE ANTHONY, EXECUTIVE DIRECTOR, NATIONAL LEAGUE OF CITIES: Well, I mean, you know, the National League of Cities and the U.S. Chamber agree
that this should be the priority for the administration as well as Congress.
It's a non-partisan issue. It's about jobs, it's about getting water and bridges fixed in America, and we realize that if we don't -- have not been
doing it over the past year, it hasn't been getting done. We want the Congress and the administration to work together in a non-partisan way to
get an infrastructure plan.
QUEST: You know, we talk about this, and I know perhaps the analogy is a poor one. But in the last month, I have been through London, which has
world class, too, where they've invested billions into it. Expensive to work, but Zurich and Switzerland, well, you know the Swiss roads, they're
in appalling conditions.
And Finland and Helsinki, which has stunning bridges and stunning roads and airports. Now, if they can do it, why can't the U.S.?
ANTHONY: Well, I think that the U.S. government has been committed in some sense, but not enough. I mean, we have a D-plus when it comes to
investment. I think that for local leaders, mayors and council members all of America, when they go to the grocery store, when they go to the post
office, people are saying, I'm driving with -- on roads that have potholes.
My drinking water is not up to standard.
QUEST: But --
ANTHONY: And what we're saying here as the U.S. Chamber as well as the National League of Cities is that we're tired of the band-aid discussions.
We need a bulldozer, we need jobs, we need businesses --
QUEST: Right --
ANTHONY: To get invested.
QUEST: So --
ANTHONY: And I think that this is the issue that the administration and Congress can get together on.
QUEST: All right, but if a man who can build towers can't build roads -- in the president, do you say that this is the time when it can get done,
because the president is a developer, he does know construction, he does understand infrastructure and he can bully to get it done?
ANTHONY: I think this is the time. And I think we're looking for the State of the Union address to be that kickoff for this real commitment to
infrastructure. It's easy to talk about it.
QUEST: Yes --
ANTHONY: But I can tell you, city leaders have used bond issues, they have used the P3 process. They've used assessments on water and sewer
infrastructure because they can't wait for the federal government to get it done. What we are saying is that we need a partner at the federal level.
We need the --
QUEST: Right --
ANTHONY: Administration --
QUEST: Sure --
ANTHONY: As well as Congress in a non-partisan way to get back to work.
QUEST: Clarence, everybody I speak to -- and when I travel and they visit the United States, they say beautiful country, lovely people, like the
food, the weather is not bad, the infrastructure is that of a developing world?
[15:45:00] ANTHONY: Yes, I hear that, too when I travel abroad, and I can tell you that it is not where I think it needs to be, but I will say that
city leaders aren't --
QUEST: Wait --
ANTHONY: Waiting, but we need a partner. I know that sounds like a messaging point, but I will tell you, San Antonio is stepping up, investing
in their infrastructure, the fastest growing city in America. We look at Miami, Florida, they are investing themselves.
But we can't --
QUEST: Right --
ANTHONY: Do it alone. So we're waiting on the president in this message tonight to say, the number one thing that he wants to focus on is
QUEST: All right --
ANTHONY: Because it is about jobs, it is about creating communities that people want to live. So I'm excited, hopefully, to hear that. But not
only to hear it, because talk has been -- we've been talking about this for years. What I want to see is some action.
ANTHONY: Because we can't afford to keep talking.
QUEST: Good to see you, sir, thank you.
ANTHONY: Good to see you --
QUEST: All right --
ANTHONY: Thank you for having me.
QUEST: You're welcome, come back again. And, indeed --
ANTHONY: Well --
QUEST: Infrastructure is exactly the one issue you say, concerning that you want to hear from tonight's U.S. State of the Union. The economy,
infrastructure, trade and immigration. We've closed the voting, but infrastructure is a majority.
And it's an absolute majority, 53 percent of you say that. Hanging over tonight's State of the Union, tentacles from two of the sprawling
investigations around the president. Now, Cnn has just learned that the New York federal prosecutors want to talk to Trump Organization officials,
that follows Monday's news that prosecutors subpoenaed his Inaugural Committee.
Kara Scannell is Washington. Why do they want to talk to the Trump Organization?
KARA SCANNELL, CNN REPORTER: Well, you know, the special counsel's office, you know is working on the Mueller inquiry. And now we see the New York
prosecutor is getting into the fray in a real big way. And now, they're the ones that are doing this investigation into the inauguration, and also
into the Trump Organization.
Now, they brought that case against Michael Cohen and the campaign finance violations there. Now, we're understanding that investigation, they also
have this other one in the inauguration, and in this process, they want to talk to some top Trump Organization officials.
QUEST: Right --
SCANNELL: Now, it's not clear exactly --
QUEST: Right --
SCANNELL: Which of these organizations it fits into, but they are really honing in on --
QUEST: To what end?
SCANNELL: The Trump Organization.
QUEST: To what end? What is the fundamental -- for global viewers, if we strip away the politics, what's the fundamental accusation here?
SCANNELL: Well, I mean, when you are looking at the inauguration, which is what this subpoena came in late yesterday. What they're really looking at
is whether any foreign donors had donated money into the campaign improperly. That's illegal in the U.S., that can't happen.
So looking to see if any money -- you know, sort of shady illegal money had entered into the inauguration, and if it was done so to curry favor, to buy
influence, I mean, that's one piece of this that seems like a pretty significant piece, what they're looking at.
And it also seems like they're looking to see, you know, if it was -- you know, they were also trying to hide this by having some donors make
donations directly to pay vendors, kind of bypassing the entire inaugural process and evading the requirements to file those --
QUEST: Right --
SCANNELL: And make those public. So you know, it seems like they're looking at this big picture thing of, you know, was there an effort to
influence the inauguration and a campaign in a way that was hidden?
QUEST: All right, Kara, good to see you, thank you, thank you very much. Coming in a moment, thousands of customers want access to their millions of
dollars in cryptocurrency. The problem -- the one person who knew the password has died very suddenly and the password gone too.
[15:50:00] (COMMERCIAL BREAK)
QUEST: I have been trying to get my head around this one all day, $145 million worth of cryptocurrencies may be lost forever, locked away from the
people who own it. The only person with the password to access the money is dead. A Canadian digital platform Quadriga has hired a team of hackers
to retrieve the cryptocash.
Its founder tragically suddenly died in September. Nolan Bauerle is here; Director of Research at CoinDesk, explain how this happened.
NOLAN BAUERLE, DIRECTOR OF RESEARCH, COINDESK: Well, it looks like they had some pretty obfuscated key management policies. So what we're dealing
with here is key management. So for example, when people are worried about Trump having the button, right?
He doesn't really have a button to nuclear bombs. Key management is a major part of how weapons are run. This came from the military, this came
from security protocols to manage the security of certain military weapons. So key management is still at the heart of a lot of cryptocurrency
What this one seems to find a bit of a hole in, is that there is a demand for institutional quality, custodianship and management of these keys.
Other people in the industry are the people that know better and know the important security parameters always says, don't share your keys, keep
your keys, not your keys, not your bitcoin, that's kind of a big mantra.
But within there, there is an area where people are taking possession of people's keys, and it looks like they didn't have great key management
QUEST: So this storage facility took possession of other people's keys with their consent?
QUEST: Kept them offline in a box, literally in a box somewhere, and now no one can find them?
BAUERLE: Yes, so within this world of institutional quality, you'll see a company like Xapo, they've got a hollowed-out Swiss mountain top where they
keep a lot of these keys. Another exchange like Kraken, they have an incredible policies for this cold storage of keys, where they're
underground somewhere and we don't know where and they'll never share where that is. It looks like these guys didn't quite have that kind of
grade of securing --
QUEST: All right --
BAUERLE: In key management.
QUEST: But these keys are quite long, aren't they?
QUEST: So it's not as if it's like, you know, "the dog, might, homework" type of password that you could put in?
BAUERLE: Well, and this is where the story starts to get really interesting. So most exchanges know the actual wallets that are used,
whether they're cold storage or hot, right? So because we see a lot of balancing of accounts going between exchanges. We know certain wallets
that existed with this exchange. We don't know all of them.
QUEST: OK --
BAUERLE: That will --
QUEST: Is it --
BAUERLE: Come out.
QUEST: Is it likely that this money, these whatever cryptocurrencies they represent has never able to be retrieved? Nobody knows the password,
there's no obvious retrieval network?
BAUERLE: If the keys were stored in a laptop, I think they'll be able to get to them. We'll know a lot more when the courts order disclosure about
these wallets. Because right now, they said they have the wallets, but a lot of other exchanges don't know where they are. The little bit of
forensic investigation that have been going on has not identified these wallets yet --
QUEST: It's highly likely, but you know, is it likely we get to the end position where nobody can retrieve and they just become dormant and they're
BAUERLE: If the story is as simple as they had terrible key management, everything was done with this one CEO, they had no policies --
QUEST: Yes --
BAUERLE: Where they used multi-signature addresses, where he would sign and I would sign and another person would sign, another C-level person in
their company would sign. Most companies will do this if they had none of that and he did die.
QUEST: Oh, he did die.
BAUERLE: We'll see, then we'll find out, then it would be that.
QUEST: Right, OK --
BAUERLE: People do want --
QUEST: How damaging is this to the whole cryptocurrency palaver, but you know, something that's seemingly as I mean -- put it at its crudest --
BAUERLE: Sure --
[15:55:00] QUEST: There is a password and no one has access to it.
BAUERLE: So I would say that this is a problem that would have smelled and looked a lot more like 2014, we don't expect these kinds of problems to
come about at this point in the industry. As I mentioned, the sophisticated users manage their own keys and there's a lot of businesses
and services that help people do that.
The institutional quality ones would never practice the kind of thing that Quadriga practiced. So I'd say that this is along the lines of how the --
QUEST: Right --
BAUERLE: Industry has been splitting into anywhere.
QUEST: I realize each time you come here, it's like talking to the complete engineer, and we're grateful you come in --
BAUERLE: Thank you so much --
QUEST: To explain it to me, thank you. Stay where you are while I go and have a look at the markets. Boeing has put on even more ground, look at
that, now up 3.25 percent, the best of the day. The Pfizer's -- the one at the end, strong day across the market, off the tops of the day overall,
with strong earnings, solid earnings, driving momentum, consumer stocks, particularly doing well and if you take a look, we're off the best of the
day, we're still up half a percentage point and barely four minutes left to trade.
But I think the day is best exemplified by Boeing with its new deal on supersonic jets, it leads the way, we'll have Disney and Snap reporting in
the next hour. Profitable moment next.
QUEST: Tonight's profitable moment, ahead of the State of the Union, Eisenhower started and built much of the U.S. inter-state network.
President Kennedy started and took America fully into space into the moon. Bill Clinton and Al Gore helped build the internet.
But in those days, it was called the Information Super Highway, remember that? Now it begs the question, what will Donald Trump's infrastructure
legacy be? Everybody seems to agree that the roads are in a terrible mess, the bridges are falling down, the airports look like something from a
And yet, at the same time, this country which can afford billions and billions in share buybacks cannot afford the infrastructure seemingly
that's needed to put it into the 21st century. Let's see what comes out of tonight's State of the Union that might actually make things better.
And 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 is profitable.
The Dow is up, not the best of the day, the Dow is up, the bell is ringing.