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Quest Means Business
Drug Lord El Chapo Found Guilty, Faces Life in Prison; Battle Rages as ISIS Clings to Last Enclave in Syria; White House Official: Trump Likely to Sign Deal to Avoid Shutdown; Nissan Takes $83 Million Charge Over Ghosn's Disputed Pay; Top French Journalists Used Facebook Group to Harass Women; Former Starbucks CEO Howard Schultz Considering White House Run; Starbucks Shares Soar Under New CEO; Video Games Giants Lining Up to Take on Fortnite; Call of Duty Maker Activision Blizzard to Announce Layoffs; EA's Apex Legends Outpaces Fortnite in First Week Growth; Government Shutdown Fears Subside and Trade Hopes Lift Stocks. Aired 3-4p ET
Aired February 12, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ZAIN ASHER, ANCHOR, CNN: There we have it. Triple digits. Al green for the market today. The markets are loving what it sees coming from
Washington. Potentially no government shutdown. Also potentially, it looks like there might be an end in sight when it comes to that trade war
with China. This is what is moving the market on Tuesday, the 12th of February.
No likely shutdown and maybe, just maybe, extra time with China. Donald Trump taking risks off the table to the delight of investors. You saw just
there, the markets are up about 363 points so. Also, rising oil prices are pulling the market higher as OPEC says it will be cutting production. And
a new challenger enters the videogame industry looking to defeat Fortnight.
Hello, everyone. I am Zain Asher, in for my colleague, Richard Quest, and this my friends, is "Quest Means Business."
All right, everybody. I am Zain Asher. Tonight, as I was just mentioning earlier, optimism certainly abounds on Wall Street. Lots of positive
energy in terms of what stocks are doing, stocks are pushing higher as lawmakers in Washington secure a deal to avert, to avoid another government
shutdown. And also, also talks are resuming in Beijing to end the U.S.- China trade war as well.
Let's take a look here. The Dow is up about one and half percent. You see just there, 363 points up, so stocks like for example, Caterpillar, 3M, Dow
DuPont, which have exposure to China, also leading the way as well. And as I mentioned, optimism is really the buzzword. That is really the key word
here with two issues both stemming from Washington that have been, I would say, really the thorn in the sides of a lot of investors.
On, the shutdown, Donald Trump still needs to have his say. It's not quite a done deal just yet. White House official says he is likely to sign the
deal, although he is not exactly thrilled with the details. And on China, negotiators have just 16 days before the trade truce dissolves. The White
House admits that both sides certainly do have a long way to go.
Donald Trump says he still needs to study the shutdown deal, but as of yet, we can't exactly say that he is happy with it.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I have to study it. I am not happy about it. It is not doing the trick, but I am adding things to
it and when you add whatever I have to add, it is all going to happen where we are going to build a beautiful, big, strong wall that is not going to
let criminals and traffickers and drug dealers and drugs into our country. It is very simple. It is very simple. We are building a wall.
(END VIDEO CLIP)
ASHER: Building a wall, as Trump refers to it, a big, beautiful strong wall. I want to bring in Sunlen Serfaty joining us live now on Capitol
Hill. So, he is building this wall as he says, Sunlen, but apparently neither Mexico nor Congress is going to pay for this wall. How does Donald
Trump spin this as a win? Because let's be real, it is clearly somewhat of a loss.
SUNLEN SERFATY, CONGRESSIONAL CORRESPONDENT, CNN: That's right, it certainly is, Zain, and I think you have a lot of people on Capitol Hill
mentioning that today, noting what parts they had to give on in this negotiated agreement. But I think to your question, I think we saw
President Trump really grappling with what his next step is. It is clear that he is still weighing his options here.
We know that he is unhappy. He said that on camera earlier in the day and in the clip you played from the Cabinet room, but we also know, and this is
according to White House correspondent, Jim Acosta, according to a White House official that President Trump at this point will sign this agreement.
But of course the big caveat, of course with the President is that nothing is final until it actually is there and a signature is on the bill. So we
say that of course, importantly, and of course, he is waiting what comes next. We heard him say there in that Cabinet spray that potentially,
additional steps could be taken. What form that is, we just don't know. Whether he will declare a national emergency or whether he will take some
executive action, a lot of people up here on Capitol Hill are against him declaring a national emergency.
But I think the acknowledgment is that to avoid a government shutdown at midnight on Friday night, that this agreement is the best one to be taken
at this moment.
ASHER: So in terms of declaring a national emergency, I mean, Trump has dangled that fruit several times, I mean, over the past month or so. What
sort of legal problems would that present to the President do you think?
SERFATY: Well, I think it certainly would provide huge legal problems and we have heard that from Republicans up here on Capitol Hill as this threat
has loomed large over this debate in these negotiations. We have heard Republicans say that, "Look, this would likely lead to a protracted court
battle," and certainly they are worried about the precedent it would set. Back to you.
ASHER: All right, Sunlen Serfaty, live for us. Thank you so much. Appreciate that.
[15:05:01]
ASHER: Meanwhile, Donald Trump told reporters he would be happy to hit China with new tariffs. His Treasury Secretary, Steve Mnuchin is in
Beijing for another round of trade talks. They have until March 1st when tariffs are set to escalate again. Now, Mr. Trump says he would consider
pushing that deadline if he feels a deal is close. Take a listen.
(BEGIN VIDEO CLIP)
TRUMP: If we are close to a deal, where we think we can make a real deal and it is going to get done, I could see myself letting that slide for a
little while. But generally speaking, I am not inclined to do that.
(END VIDEO CLIP)
ASHER: Larry Hathaway is in London, he is a chief economist at GAM Investments. So Larry, thank you so much for being with us. Appreciate
that. So in terms of what is moving the markets today, guys, can we pull up the big board? The Dow has been pretty much up triple digits all day.
On the one hand, you have the avoidance of a potential government shutdown. On the other hand, you have got this trade deals looming with China. Which
one of those factors do you think is moving the markets the most today?
LARRY HATHAWAY, GROUP CHIEF ECONOMIST, GAM INVESTMENTS: Well, I think it is both of them. But if I had to choose, it is probably the trade deal.
It is not because we are anymore certain that we will get one done, but it has cast a shadow not just over the U.S.-China bilateral relationships, but
over the entire global growth story for 12 months now.
If we can find a deal and either hold tariffs where they are or even better, perhaps, roll back the tariffs that were introduced last year, I
think that that will be very important, not just for capital markets, but actually for growth conditions, particularly in places like Europe or in
emerging markets that have been hard hit by fears of this trade conflict.
ASHER: So I mean, if a trade deal doesn't get done, if there's more uncertainty, especially because China is in such a difficult position, just
in terms of Xi Jinping trying to save face with what is happening with Huawei and the U.S.' stance on that, if a trade deal is sort of postponed
or kicked down the road, what then happens to markets?
HATHAWAY: Well, postponement doesn't help very much. We have already seen markets respond very favorably in the course of this year to things like
the Fed taking interest rate hikes off the table, to fears of recession in the U.S. proved to be unfounded, and now to this as well.
We have advanced a long way in equity markets, I think it is time now for actually concrete steps to emerge that will suggest that some of these
bigger risks are actually receding. So postponement probably doesn't help us now at this point in time. It is really about finding resolution.
ASHER: So aside from what is happening with the U.S. government shutdown and the good news on that front, and also this potential - this
willingness, I would say, from Donald Trump to negotiate a bit more with China, what else, aside from those two factors, what else is the market
really have to concerned about over the next few months? What is next on the horizon?
HATHAWAY: Well, I think we have to see that signs are improving of growth outside of the U.S. The U.S. story is still pretty intact. We have seen
strong jobs growth, final demand and some recovery of leading indicators. But in Europe and China in particular, is where the weakness is most
profound. So people really want to see China continuing to take steps to stabilize its economy, somewhat through credit easy, and maybe through some
infrastructure spending.
And in Europe, really they want to see some stability return, so that those sectors that have been hard hit in the last year, for example, autos or in
shipping can now begin to recover and we can see a recovery of the Eurozone growth story. So I think the markets are looking for stability in the
political and policy arena, to allow the adjustments to take place and to get back into a world that is more synchronized in terms of growth.
ASHER: And just specifically talking about the U.S., when a deal, obviously it is going to the President's desk in terms of this deal with
Congress, when it is eventually signed, I mean, is the sort of good news already built into markets right now? Or when the deal does get signed,
can you see markets moving even higher?
HATHAWAY: I think there will probably be some further gains for markets. To be honest with you, I think it is also about looking at bond markets
where yields are very low these days and if the world is improving and if we get that improvement in the equity market feeding through into corporate
optimism, then how long can the bond market ignore the possibility that the Federal Reserve will have to come back and revisit whether it needs to
raise interest rates.
So I think the market that is the equity market can advance, but we also have to be ready for the idea that bond yields could begin to resume their
rise.
ASHER: All right, Larry Hathaway, thank you so much. I appreciate that. Good to see you.
HATHAWAY: Thank you.
ASHER: All right, turning now to another top story we are following here for your on "Quest Means Business." He once appeared on the Forbes
billionaire list for decades. He ran a murderous cartel with an iron fist and along the way, he became Mexico's most infamous native son. Now, El
Chapo Guzman will likely spend the rest of his life -- the rest of his life -- in an American prison.
A short time ago, in Brooklyn, El Chapo was found guilty after a trial that pulled back the curtain on international drug trafficking.
[15:10:04]
ASHER: Brynn Gingras is outside the courthouse. So, Brynn, here we have it, international drug lord El Chapo found guilty on multiple counts. Were
there any surprises here?
BRYNN GINGRAS, NATIONAL CORRESPONDENT, CNN: Yes, ten counts, Zain, and you know, with that first count of running a criminal enterprise, which carried
the most weight, right? That was the life in prison count that jurors needed to find to continue to look into the other counts as well.
But a judge is going to actually sentence him, but at minimum, life in prison is where Guzman is going to spend his life. And yes, it was a long
trial, right? It was very dense. Two and a half months. The jurors heard testimony from 53 witnesses and they deliberated for more than six days at
this point, and they came back with those guilty verdicts.
And I think some people were starting to worry because they were taking so long to deliberate, but again, they had a lot to consider there. We know
we've got some reaction from Guzman because our producer was in the courtroom for this whole entire trial from Day 1, Sunny Mogi (ph), she says
that when that verdict came down, he really didn't make much of an expression. He looked at his wife, who has also been in the courtroom
throughout this whole trial, and he did smile at her.
Behind closed doors, his attorneys say he is upbeat. They say they are going to fight this in an appeal. As far as prosecutors are concerned,
this is a huge victory and they say this is a huge victory for America because this was a victory on the war on drugs. So a highly publicized
trial. And one that now will send El Chapo behind bars for the rest of his life -- Zain.
ASHER: All right, Brynn Gingras live for us there in a beautiful, but I can imagine, very cold snowy New York. Brynn, thank you so much. Tom
Wainwright is the Briton editor of "The Economist" and the author of "Narconomics." He is live for us in London. Tom, thanks so much for being
with us.
So what are we learning, when you look at the trial, what are you learning about the extent of corruption in Mexico? I mean, El Chapo could not have
gotten -- he could not have risen in the ranks in the way he did without compromising and bribing airport officials, prosecutors, military
personnel? What are we learning about corruption in Mexico?
TOM WAINWRIGHT, AUTHOR, "NARCONOMICS": All kinds of things. It is a trial that has really lifted the lid on this very secretive organization and some
of the stuff we have learned has been about the violence that he used. And we have heard about the gruesome murders that he oversaw. But we have also
learned all kinds of funny personal stuff about what he was like as a person.
He seems to have been incredibly vain. He is said to have gone through rejuvenation treatments in Switzerland and so on. But on the business side
of his operation, we heard claims in the trial that he had bribed officials as senior as the President of Mexico, Enrique Pena Nieto. Now, there
wasn't convincing evidence supplied to back that up and Pena Nieto, would, I am sure dispute that. But we have heard associates of El Chapo say that
he bribed officials as senior as that. So it seems to have been supposedly a pretty comprehensive corruption operation.
ASHER: I mean, you mentioned, the former leader of Mexico and various other people he is alleged to have bribed. But really, El Chapo, could not
-- I mean, the bribery and the level of corruption in Mexico is obviously a major problem. But the real reason why El Chapo became a billionaire,
listed at one point on the Forbes list of billionaires, is really because the United States has the greatest demand in the world for illegal drugs.
That is really the problem here.
WAINWRIGHT: I think that is right. Yes, I mean, people today are correctly saying that this is a victory for the United States Justice
System and I think that is true. We shouldn't underplay that. But Americans who are celebrating this and indeed, Europeans who are
celebrating this should remember that they really are the consumers who helped to put El Chapo on that billionaires list because his products were
overwhelmingly going to the United States and the products of many of his rivals are going to Europe.
And so people saying that this is a victory in the States need to see that actually America is a big part of the problem here because really, as long
as America continues to import tons of this product while simultaneously insisting that these products remain illegal, there is going to be a big
criminal problem in countries like Mexico, and enormous criminal opportunities for people like El Chapo and his successors.
ASHER: You know, as you know, I'm sure you have been following the news here in the United States, there has been so much talk about more building
a border wall. Donald Trump has mentioned this $5.4 billion border wall he wants to build along Mexico. He talked about getting Mexico to pay for
this wall.
And one of the things he is really sort of honed in on is this idea about the drugs that are coming through. I mean, doesn't this trial prove that
even with a wall, a wall wouldn't necessarily do much because the Sinaloa cartel is famous for building tunnels underground. That is how they get
the drugs into the United States, so what would a wall even do?
WAINWRIGHT: Well, not very much. I mean, Trump is absolutely right that large quantities of drugs cross that border and that making that border
more secure would be a good thing. But the wall isn't really the obvious way to do it. Those drugs aren't being carried across the border in the
desert by migrants in little backpacks.
We are talking about tons of this stuff crossing over the border and as you say, much of it goes through tunnels which go under the border. But most
of it actually goes literally by the truckload in trucks which are crossing the border through the perfectly legal checkpoints.
[15:15:10]
WAINWRIGHT: So if you want to make the border more secure, and I think that is a decent idea and principle, what you really want to be spending
money on is doing those checks at the border, checking the trucks, spending more money on intelligence-led operations which allow you to know which one
of those trucks are the ones to check in the first place.
Building a wall in the middle of nowhere isn't really going to stop, well, it certainly is not going to stop drugs. And I am not sure it would even
stop migrants either.
ASHER: Tom Wainwright, thank you so much. The United States is taking on China, trying to gain allies in the battle for 5G dominance and playing
defense in the war for artificial intelligence. President Obama's top economic adviser will tell me why the advantage -- United States.
(COMMERCIAL BREAK)
ASHER: Welcome back, everybody. China is hitting back at a U.S. led crackdown on Huawei. China's Foreign Ministry has accused the United
States of trying to sow discord between China and other countries. That accusation came after this morning from the U.S. Secretary of State, Mike
Pompeo to European governments. You will need to have a listen.
(BEGIN VIDEO CLIP)
MIKE POMPEO, U.S. SECRETARY OF STATE: What it is imperative is that we share with them the things we know about the risks with Huawei's presence.
It also makes it more difficult for America to be present that is if that equipment is co-located in places where we have important American systems,
it makes it more difficult for us to partner alongside them. We want to make sure we identify them and the opportunities and the risks associated
with using that equipment.
(END VIDEO CLIP)
ASHER: The American pressure campaign is getting results. All of the countries highlighted on the map here have imposed restrictions on Huawei
or are considering restrictions. Those restrictions are mostly on the equipment, like for example, routers and towers and that sort of thing that
power superfast networks like 5G for example. Huawei is the global leader with 28% of the telecom equipment market. Its share of the 5G market in
Europe is actually even higher than that.
Nokia, Ericsson, Cisco and ZTE are all far behind. I want you to get out your phones, get out your phones right now and go to cnn.com/join.
Tonight, we are asking you another very simple question, what is your opinion of Huawei? What do you think of Huawei? Do you trust it? Do you
not trust it? Or perhaps you haven't even heard of Huawei at all. Do you trust it? Do you not trust it? Or maybe, you haven't heard of it at all.
Go to cnn.com/join and you now, you are going to be seeing the results very shortly bottom of your screens.
[15:20:07]
ASHER: Samuel Burke is in London for us. So Samuel, just walk us through what sort of impact. I mean, I explained a little bit, but just walk us
through what sort of impact Mike Pompeo, the U.S. Secretary of State's comments are actually having on European countries.
SAMUEL BURKE, BUSINESS AND TECHNOLOGY CORRESPONDENT, CNN: Zain, this is an incredible ratcheting up of rhetoric. We have been hearing that this has
been going on in private. The U.S. putting pressure on its allies to remove this equipment, but now we are seeing it in full public view.
And if you really listen to what he is saying, he went on to say, "Well, we would have difficulty partnering with you if you are using Huawei." That
is really just saying either it's them or it's us. You use Huawei or you work with us. And that is really just short of an ultimatum.
Huawei says if they continue down this path, the United States is going to cause progress to go backwards for technology as well as economic progress.
So we have heard from all of the players. I just want to put up on the screen for you, Zain, my three big takeaways from this entire round with
Huawei.
Number one, we still have no public proof that Huawei is committing some type of espionage. We have heard from all of these intelligence agencies,
but once again, we did not hear any public proof from Secretary Pompeo.
Number two, telecoms companies are finally voicing their frustrations publicly about these accusations. I heard from the BT CEOs that, "I have
been using this equipment for years in my company. We've never seen an issue."
And number three, there is U.S. candidate to replace Huawei. I don't know if you can go back to that screen that you had just before you came to me,
Zain, looking at the break-up of the market when it comes to market share for 5G all around the world. But there are barely American companies
there. Look at the top ones -- Nokia, Ericsson would be the natural successors. You don't see Cisco until much later until a much smaller
number. Those are Finnish and Swedish companies which makes this all the more vexing.
ASHER: So here is the thing. I mean, I want to look at this, Samuel, in context because right now we have got this sort of trade war between the
U.S. and China that is looming. There might be a deadline extended, but it is sort of on the horizon as you know.
When Mike Pompeo travels to Europe and makes these demands that, "Listen, it's either us or Huawei. If you use Huawei, then you can't really be
dealing with us." What sort of impact does all of that have on the U.S. relationship with China as a whole especially as it is in the middle of
trade negotiations?
BURKE: It makes everything so blurry for everybody in between. In Dubai, I head from world leaders who were saying, it is so hard now to distinguish
between what is cybersecurity concerns and what is the trade war because President Trump made that statement after the CFO, the daughter of the
Chairman went to - was arrested in Canada. And he said, President Trump, that yes, he might consider letting her go as some part of a deal.
Well that is really what blurs the lines here. I think what is so frustrating for leaders and companies, they say without Huawei, they may
not have as good technology, and they also say it might set them back on their 5G plans but I do just have to point out, Zane, people have the
question, so does the equipment spire no -- a lot of experts say, it's not about what the equipment can do or not do right now, it is about the level
of control that the Chinese exert over companies including companies that say they are independent like Huawei.
ASHER: All right, Samuel Burke, live for us, thank you so much. Good to see you. Okay, so, guys, the results are actually in. According to those
of you who are voting on cnn.com/join, you are pretty much split, pretty much even on whether you actually trust Huawei's technology or not. So
there we have it, pretty much 50-50 on whether or not you actually trust Huawei.
So 5G is one of the key components that will make artificial intelligence a reality everywhere. President Trump this week called for the Federal
government to support the development of AI technology and maintain America's leadership in that arena.
The President's executive order is aimed squarely at China who it is competing with which has had an AI plan in place since 2017. China's
government set three strategic objectives by 2020, catch up to global standards and establish a core AI industry; by 2025, establish AI laws and
regulations and begin using AI in sectors for example like medicine and agriculture as well; and by 2030, lead the world.
China's plan is already yielding results by some measures like funding and for example, academic papers as well, it matches or even beats the United
States. Jason Furman led President Obama's Council of Economic Advisers and actually co-authored that office's report on AI, on artificial
intelligence. He teaches Economics at Harvard. I asked him how President Trump's executive order is going to be implemented. Take a look.
(BEGIN VIDEO TAPE)
JASON FURMAN, FORMER CHAIRMAN, WH COUNCIL OF ECONOMIC ADVISERS: That is the big question because some executive orders are just nice symbolism, and
no one ever really follows through on them, and others become a real organizing tool that get the whole executive branch to mobilize.
And just by reading the words, you cannot ever really tell which of those is going to be the case.
ASHER: It's interesting because with this executive order, there is no funding attached.
[15:25:09]
ASHER: Is that normal? Did that surprise you somewhat?
FURMAN: You know, it doesn't surprise me because sometimes an executive order, the President's budget will be out later, and item one in this
executive order on artificial intelligence is more funding for AI. I think that is really needed. I think that is something the government needs to
do. I am hoping it is something we see in President Trump's budget, but right now, we just don't know whether or not it will be.
ASHER: There are 18 other countries that have already launched AI strategies, including the U.K. You know, the fact that the U.S. is 19th on
this, I mean, why are they so late in the game, do you think?
FURMAN: I worked in the Obama administration and we put down some of the first steps on an AI strategy. President Obama was very focused on it. I
think for the first two years of this administration, there was a lot more focus on what could be done about steel and industries of the past, as
opposed to what could be done about AI and industries of the future.
So I would rather have been number one on the list than number 19 on the list. But I am glad to see the United States is somewhere on that list
now.
ASHER: One country that is fierce in terms of its AI strategy, and really just technology strategy overall, is of course China. They are investing a
huge amount of money, resources into AI. How does the U.S. compare with China in terms of competition? Is there some fear there that several years
from now, 10, 20, 30 years, China will be far, far, far ahead of the U.S.?
FURMAN: Certainly some of the motivation for this is competition with china. If you read the language of the executive order, it refers a lot to
American values, privacy, and so this isn't going to be the route that China is going.
The United States has a lot of strength that China does not have. It has tremendous openness. It has immigrants. I think that is critical to keep
that going. And our companies are spending a lot of money, even if the government didn't. So I would still give the advantage to United States,
but regardless, I think we are going to learn from China, China will learn from the United States and this competition will be good for everyone.
ASHER: As you know, over the past two years since President Trump took office, the priority, Jason, as you know, has been jobs. He wanted to be
the jobs President. How -- what will AI mean for the labor market in the United States?
FURMAN: I think it will pose a challenge for some workers because it can replace some of what they can do. There is no reason we couldn't meet that
challenge with equipping people with better training and skills so that they can get even better paid jobs, but that will take some effort and
focus to make sure you get the good outcome and not just the greater inequality and greater challenges for workers that we have often seen with
innovations in the past.
ASHER: And finally, I have always seen this sort of push for AI to come from the private sector. The fact that the government is really seeing
this as a priority right now, what does that tell you?
FURMAN: Look, the private sector wants the government to be focused on this. Setting some basic rules of the road so that everyone has confidence
is important. AI relies on large data sets. The government is sitting on a lot of data. It needs to make an effort to get those out into private
hands, and then basic research has always played a role in innovation and economic advancement. And that basic research, a lot of it is going to
have to come from the government. So I think this is complementary to private efforts, and if the administration follows through on it, it could
be important.
(END VIDEO TAPE)
ASHER: All right, Jason Furman there on the importance of the administration following through and implementing this AI executive order
correctly.
All right, coming up here on "Quest Means Business," once hidden behind secret Facebook groups, several French journalists have been exposed for
coordinating online harassment of women. We will be live in Paris for you, after the break.
(COMMERCIAL BREAK)
[15:30:00] ZAIN ASHER, HOST, QUEST MEANS BUSINESS: Hello everyone, I'm Zain Asher. Coming up in the next half hour of QUEST MEANS BUSINESS,
Howard Schultz is getting ready for Cnn's town hall tonight, you won't want to miss, the company he's built though is trading at a record high as we
speak.
And makers of "Call of Duty" are about to announce massive layoffs. Now, new games in town to take on the Fortnite phenomenon. But first though,
these are your headlines at this hour.
All right, the Mexican drug lord known as El Chapo was found guilty Tuesday of ten federal crimes by a New York jury. The conviction carries a mandate
in sentence of -- mandatory sentence of life in prison. Prosecutors say the verdict is proof the war on drugs works.
The international coalition is encountering fierce resistance as it battles to clear out ISIS from its last piece of territory in Syria. Kurdish
forces on the ground are getting air support from western allies including the U.S. and the U.K. The top U.S. General in the region says just because
ISIS is losing territory, it does not necessarily mean that's the end of the militant group.
A White House official says U.S. President Donald Trump is likely to sign a budget deal that would avoid a government shutdown. That is despite Mr.
Trump saying he doesn't like the deal, which does not give him all the wall funding that he wants. The White House is considering other ways of
financing a wall if Congress will not allocate the funds.
A few months after its former chairman's departure, Nissan is still feeling the effects of the Carlos Ghosn scandal. The company revealed an $83
million charge related to unpaid earnings for its former chief executive. Nissan also cut its 2019 profit outlook to its lowest level in six years.
Anna Stewart is live for us in London to give us a huge breakdown, really, of the Nissan earnings. Nissan is really dealing with issues that a lot of
carmakers are dealing with. Trade issues, diesel, China, Brexit, that sort of thing. When you listen to what the Nissan CEO is saying, how is
his strategy different from the Carlos Ghosn era?
ANNA STEWART, CNN REPORTER: Yes, we're seeing quite a shift change actually. As you said, there are so many headwinds, and we see them time
and time again as each of these big car makers report same issues as you said with Brexit, diesel, sales in Europe abysmal.
But what was really interesting about these earnings reports was the sales in the U.S. Now, they were down 19 percent in January compared to the year
before. So significant drop.
[15:35:00] And actually, the CEO today in the earnings presentation was talking a lot about the strategy in the past and the strategy now. The
strategy in the past, he said and I have to say this echoes what analysts were telling me earlier in the week.
That unfortunately, they put a lot on customer incentives, cutting prices, they put almost all their marketing strategy in the U.S. doing that, try
and boost sales. It hasn't worked, it's hit the bottom line, so now, the focus he says is enhancing the brand value.
As you said, Europe was also down, China wasn't great, although they say that it's plateauing, that they expect longer-term China to grow for them
as a market, Zain?
ASHER: And with all of the turmoil obviously relating with the -- relating with Carlos Ghosn, I mean, where does that turmoil leave the partnership
between Nissan and Renault? Walk us through that.
STEWART: Yes, there's a lot of concern about the Nissan-Renault alliance. And as ever we got another confirmation today from Nissan CEO, saying they
are committed to this alliance, I believe there will be a meeting between Nissan and Renault very soon.
However, tensions are what analysts are worried about, particularly going forward. Of course, Carlos Ghosn has denied all the allegations regarding
financial misconduct. But interestingly, he said the allegations are the result of plot and treason by Nissan executives who opposed his plan for
deeper integration with Renault.
So there is a lot of subtext here, and of course, Renault, weren't nearly as quickly to remove Carlos Ghosn from the executive board as Nissan was.
So there was definitely a step change there. So going forward, this is what people will be most interested in, how does this alliance go further?
ASHER: Right, Anna Stewart life for us there, thank you. In France, the media world has been badly shaken by a cyber bullying scandal. Several
well-known and prominent journalists have been suspended for participating in a secret Facebook group called the LOL Ligue.
The group actually encourages the harassment of female journalists online. Melissa Bell is live for us in Paris. So Melissa, I'm really having a hard
time understanding why professional journalists would engage in this kind of behavior.
Aside from the fact that some of the comments were sexist and racist. It just seems to me downright childish. The sort of thing you would expect
from badly-behaved teenagers.
MELISSA BELL, CNN CORRESPONDENT: That's right, Zain, I think childish is exactly the word. Their actions were sexist, homophobic, they were racist
as well. The journalists who were attacked were young journalists coming up, just beginning in the profession full of doubt.
And they were violently, brutally, cruelly attacked very publicly through this almost systematic system of harassment. It went on for years. This
was a group after all that was created in 2009. But what's extraordinary is how so few people -- how so few people really knew about it.
We only found out about it in the last few days. There had been rumors about it, of course, its victims were aware of it. But the wider country,
the wider profession here in France and the wider world have only just become aware of it. And of course, when you look at the fact that these
were seasoned journalists.
These were well-respected French journalists with proper jobs in the industry, who were responsible, it seems quite extraordinary.
(BEGIN VIDEOTAPE)
BELL (voice-over): For many years, the only people aware of their existence where the victims. Women journalists mainly, but also LGBT
journalists and journalists of color who were harassed violently online by a secret Facebook group that was formed in 2009 and made up of some 30-
something high-profile, but anonymous, mainly male journalists who called themselves the Ligue du LOL or Laugh Out Loud.
Victims have accused the LOL Ligue of orchestrating targeted harassment campaigns that would result in streams of vitriolic messages on social
media platforms like Twitter.
LEA LEJEUNE, TECH JOURNALIST: We were younger than them. And we were just starting to be journalists. So we didn't have any confidence after that.
The thinking is when this stuff happened, at first you were shaken, you were blushing, you don't know how to respond.
You try to respond with humor, you try to respond also with logic, but it doesn't work. You cannot focus on your work.
BELL: It took 10 years and this article by the French newspaper "Liberation" fact-checking website for the group to be exposed and for the
names of its members to be revealed. Among them, two journalists at "Liberation" itself. In what many are describing as France's own Me Too
moment.
Cnn reached out to Facebook, but on Tuesday, it had received no response. Many of the journalists involved have now apologized. Like "Liberation's"
Vincent Glad; the group's founder who wrote that he was presenting his most sincere apologies to those who were harassed by the Ligue du LOL.
What happened was intolerable, and I was responsible. Or "Les Inrockuptibles" David Doucet who wrote that he did not think of the extent
of the trauma that his victims had suffered. There are -- he wrote, "no excuses. I am sorry."
[15:40:00] Too little, too late for many of their employers. Likely "Liberation", the French music magazine "Les Inrockuptibles" and the
advertising group "Publicist" who were either laying off or suspending those involved. "Liberation" has also opened an internal investigation and
France's antiracism body has called for the Paris prosecutor to investigate as well.
LEJEUNE: I think it's right that they should be named and shamed in article in order to make their films -- their newspaper react. But the
thing is, I don't like people to be arrested on the internet even if it's wrong.
BELL: It's unclear whether the original Facebook group has now been closed. But those responsible now say they're ashamed. Although many
wonder why it's taken 10 years for them to feel that way.
(END VIDEOTAPE)
ASHER: And Melissa, the fact that a lot of these members, these journalists have been laid off or suspended, obviously that's a good thing,
a step in the right direction. But this group being exposed as a whole, do you think it will lead to more victims of online bullying and harassment
being able to find a voice and speak up?
BELL: I think no doubt, it well. I mean, many people here have described it as France's Me Too moment. And I think one of the things that's
interesting about it, Zain, is the fact that, many of these journalists who obviously were victims of it before, felt that they couldn't speak out, but
now have been heard.
As soon as it came out now, now that this conversation has began about Me Too, about discrimination, perhaps more broadly, suddenly, the people who
employed them had to act. And so, there is this sort of soul-searching going on that goes beyond the borders of France.
There's this conversation that's going on, this moment of reckoning that goes far beyond France's borders. Until now in many ways, France had been
fairly, tightly sealed culturally compared to say the Anglo-Saxon world. I think this is one of those examples where actually the internet
globalization means that when you have phenomenon, say United States or United Kingdom or in other countries, these things spread.
And there is a cultural shift which means that they can't be ignored. And I think perhaps, this speaks also to something that is going on more
broadly within French society. This question of, what kind of country it wants to be. Of course, Emmanuel Macron very keen to the way -- to change
the way that France is governed, to change the way that his companies are governed.
Who has been faced with this Yellow-Vest protests, who's been faced with this setback on the Siemens-Alstom deal that he was hoping would help
reform France as well. He's also faced setbacks, we were just hearing from Anna Stewart there in London.
When it comes to Renault as well, it was after all Emmanuel Macron who had -- wanted Renault to have a bigger stake, the French state rather to have a
bigger stake in Renault way back when he was economy minister, and he is now facing the Carlos Ghosn scandal in a slightly belated waking up of
Renault itself opening this investigation into Renault's expenses in the way they might have been tied to some of the spending by Carlos Ghosn.
So I think perhaps more broadly, France is going through a sort of reckoning, a sort of waking up, a sort of moment when it is looking at the
way that its companies, its corporate companies are run and the way that, that relates to what kind of country it wants to be.
Clearly, what is happening in the world of journalism is slightly different. But it is related to the question of how France relates and
speaks to and understands and reflects, perhaps the changes happening elsewhere in the world, Zain.
ASHER: Yes, it sort of seems to be having an existential crisis right now, given all the reasons you listed. Melissa Bell live for us there, thank
you so much. Right, coming up, the former CEO of Starbucks gets closer to the campaign trail. Howard Schultz will be speaking to voters in Texas.
That story, next.
[15:45:00] (COMMERCIAL BREAK)
ASHER: Howard Schultz faces a key test tonight in his potential bid for the White House. The former Starbucks Chairman and CEO will take questions
from voters at a Cnn town hall event in Houston, Texas. Schultz is considering, still considering running for president as a centrist
independent.
Which by the way has a lot of Democrats, as you know, Paul, very upset because I think that if he runs as an independent, that will basically give
the vote essentially gift wrapped to President Trump. Whatever happens tonight, it is a good week for Howard Schultz's portfolio.
Starbucks shares are trading at an all time high. A decade ago, shares costs as much as a (INAUDIBLE), now, there are more than 15 times that
amount. Shares have fed well since Schultz left the company. They're up more than 20 percent since his departure last Summer.
Starbucks has also expanded in China and grown its mobile app as well. So much for Howard, Paul La Monica, good to see you, my friend.
PAUL LA MONICA, CNN BUSINESS DIGITAL CORRESPONDENT: Thank you.
ASHER: So what I found so interesting is that, we have spoken so many times on this program about how companies like Apple can really not weather
the slowdown in China. But Starbucks, you know, is just brushing it off. It really doesn't seem to make any difference to them, why?
LA MONICA: Yes, Starbucks is aggressively opening new stores, they are out reporting increases in sales, and I think a lot of it might have to do with
the fact that there's less competition for Starbucks on the coffee side than there is for Apple on the mobile phone side.
But also it's kind of an affordable luxury, yes, we all joke about how expensive Frappuccinos and Lattes are, but it's one thing to spend 5 bucks
on a vent-size drink, you're not spending thousands of dollars on a new phone.
ASHER: It's not a $1,000 --
LA MONICA: Yes --
ASHER: To buy a coffee at Starbucks like it is --
LA MONICA: It takes a long time to get up to a $1,000, I'm a staff.
ASHER: Although, my husband is seriously --
LA MONICA: I'm a caffeine addict, no, I don't want you to know how much I spend.
(LAUGHTER)
ASHER: So when -- let's talk about this town hall tonight hosted by our very own Poppy Harlow in Houston, Texas with Howard Schultz, he's going to
be talking to voters. Doesn't -- if Howard Schultz becomes president, and that is a very big "if", it is a long shot. Doesn't he sort of run the
same sort of conflict of interest issues that President Trump had when he was running?
LA MONICA: I think that is a very good point. And I expect that Poppy will ask Howard Schultz about that very fact. I mean, you look at it right
now, Schultz still owns a significant chunk of Starbucks stock worth more than $2 billion. It's the reason why he's a billionaire.
And it's a very valid question to say Starbucks is growing in China, say you put your Starbucks shares in a blind trust, you still know even if
you're not managing that money that you are a big Starbucks investor.
ASHER: Yes, of course --
LA MONICA: Would you act in the interests of Starbucks and in yourself interest?
ASHER: In the country --
LA MONICA: Or in the interest of the country --
ASHER: Yes --
LA MONICA: If there is some contentious economic battle with China, which odds are, they very well may be.
ASHER: Of course, Paul La Monica, we've got to leave it there, I appreciate you being on the show. All right, coming up, forget Mario
versus Sonic, when it comes to videogames in 2019, it is Fortnite. Everybody -- Paul, do you play Fortnite? Do you -- your kids, I'm sure.
LA MONICA: My kids do not play it, but they do the dances.
ASHER: My kids does --
LA MONICA: Everyone does the dances, yes.
ASHER: But purchasers are lining up to topple the online game which has dominated players attention for several months. That's next.
[15:50:00] (COMMERCIAL BREAK)
ASHER: Welcome back everybody. The world's biggest videogame publishers are all trying to beat Fortnite at its own game. The free-to-play online
cheater has become a cultural phenomenon, and its competitors are certainly struggling to keep up activation blizzard.
Makers of the record breaker Call of Duty has seen shares for 11 percent year-to-date. The company is planning to announce a new round of layoffs
after the closing bell this hour. And take two interactive, it has seen its shares fall 13 percent year-to-date, despite publishing the bestselling
game of 2018 Red Dead Redemption 2.
And this week, Fortnite makers have finally met their match. EA or Electronic Arts says its own free-to-play game, Apex Legends smashed
Fortnite's record for first week growth. Twenty five million players have signed up, investors rejoiced, shares rose 28 percent this year.
Joining me live from London, Guy Cocker is global brand director at "Stuff Magazine" and a former editor at GameSpot. Guy, thank you so much for
being with us. So when you look at these companies --
GUY COCKER, GLOBAL BRAND DIRECTOR, STUFF MAGAZINE: Pleasure --
ASHER: Take two EA, Activision, how on earth -- what do they need to do to compete with the likes of Fortnite?
COCKER: Well, the interesting and exciting things about the videogame industry is that it's always at the forefront of technology that everything
is moving very quickly. And that presents a challenge to people like Activision, who just a few years ago had franchises like Call of Duty,
Guitar Hero, Skylanders, massive sellers that were doing well year-on-year.
But because it moves so quickly, and as you mentioned, I mean, in the intro there, Fortnite has come in and sort of stolen away all of that attention,
all of those eyeballs. Fortnite has a staggering 200 million unique players per month at the moment.
So while EA's games own 25 million, it still got a long way to go to match Fortnite. And it's really just that attention, especially with younger
players that's being taken away by these free-to-play games. The free-to- play games monetize through in-game purchases that people can buy small amounts as they go.
The barrier to entry is zero. You can download these games on your Xbox, on your PlayStation, on your PC, with Fortnite even on your mobile device.
So these games are everywhere. They're free to play and premium publishers like Activision have had a hard time competing. And as we've seen,
they've got their earnings called very shortly and we expect some layoffs tomorrow. So some heavy restructuring for Activision.
ASHER: So when you think about -- of course, you said 200 million unique players for Fortnite, that's -- I mean, I'm not a videogame player, but I
know a lot about Fortnite just because of nieces and nephews and that sort of thing. I mean, what is it about the game that makes it just so
addictive?
COCKER: Well, I mean, it's a family-friendly size all for one. So it is usable for all ages. There's a mild amount of violence in it, but there is
a lot of -- there's a lot of team work that's involved. There's an addictive element to it, you know, the last person standing wins all of
these players.
[15:55:00] But it's really had a cultural moment. A lot of people have heard of this game being heavily-streamed on the videogame-streaming
platforms Twitch. Famous players like Drake, massive streamers getting involved in this. Let's go back to Activision for a second.
Activision did have the biggest selling game of last year of 2018 with Call of Duty. Which actually did outsell Red Dead Redemption, at least in
stores in America. But right now on Twitch, which is where people watch other people playing games as crazy as that sounds.
It's about the 43rd biggest game. And Fortnite and this new game that EA has just announced, Apex Legends, the number one and number two games that
are being streamed by people and watched by people. So the market is changing very quickly.
And actually, last week with EA, it did have a disappointing earnings call, and investors were shocked with the results. But they managed to, they've
not completely turned it around, but get investors back on board with this game, Apex Legends which almost in a sort of Beyonce-surprise-release kind
of way just dropped and has racked up in like you said, just over a week, 25 million players, which is -- which is --
ASHER: Incredible --
COCKER: Just phenomenal, surprising even to myself.
ASHER: So Apex Legends did well, but it did have battlefield, that title flopped during the holidays, right, so it's had to deal with both sides of
the coin. But Guy, we've got to leave it there, thank you so much, appreciate that.
COCKER: Thank you.
ASHER: All right, there are just moments, just about five minutes or so left to trade on Wall Street. We'll have the final numbers and the closing
bell for you right after this quick break. Don't go away.
(COMMERCIAL BREAK)
ASHER: All right, so there has -- there are just seconds left to trade in what has been a really good day. As you can see behind me for Wall Street,
the Dow started off strong and is set to finish with its best gains in actually two weeks. Investors seem to be optimistic for two main reasons.
Number one, that President Trump is going to be agreeing to a bipartisan deal to keep the U.S. government open. They're also hoping that the U.S.
and China can actually make a deal on trade or at least move or extend the deadlines that's helping lift industrial stocks.
Let's take a look, you see the screen right there pretty much almost all green, the likes of Caterpillar, 3M, Dow, DuPont and Intel are seeing good
gains, and that's important because some of those companies would actually be the hardest hit in a trade war because they're heavily exposed to China
as well.
So we're hearing the applause behind me, that is QUEST MEANS BUSINESS everyone, I am Zain Asher, the closing bell is about to ring, you're
hearing the applause, it's almost there, "THE LEAD" -- there it is.
(BELL RINGING)
And "THE LEAD" with Jake Tapper is next.
END
