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QUEST MEANS BUSINESS
Algeria`s President Abdelaziz Bouteflika Resigns; Theresa May to Request Further Delay to Brexit; Comey Tells CNN: Barr Deserves Benefit of the Doubt of Some Chance to Show Mueller Report; Donald Trump: Hundred Percent Ready to Close Border with Mexico; Theresa May Seeks Compromise with Corbyn Amid Brexit Deadlock; Lyft Remains Below IPO Price After Volatile Trading; Bitcoin Price Soars to Highest in Months; Boeing 737 Max Software Update Delayed. Aired 3-4p ET
Aired April 2, 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: As we enter the last hour of trade on Wall Street. The Dow was down at the open, the red continued
throughout the course of the day, a bit of a rally once or twice, and the losses are not big and when you think of how the market has performed, it`s
not bad, it`s just knocked 73 points. Now we need to understand the factors for investments and what`s moving the market on Tuesday, April the second.
These are desperate times that call for desperate measures. Theresa May says she`s going to work with the leader of the opposition. President Trump
says he`s ready to shut down the border with Mexico. U.S. car makers are warning that would shut them down, too.
And a Bitcoin mystery, an anonymous buyer sends the crypto currency to is highest value in months.
Tonight, we`re live from London. I am Richard Quest and I mean business.
Good evening. Tonight, the British Prime Minister Theresa May has taken no deal Brexit off the table. And what`s more, she says she`ll aim for a
softer and unified approach to break the deadlock in Westminster. Mrs. May says she will ask the E.U. for a further Brexit delay that would allow time
for this to be sorted out. During this period, she says she`ll get around the table with the opposition leader, Jeremy Corbyn to try to find a joint
solution. He has already said he`s willing to meet and happy to meet the Prime Minister.
If they cannot come up with a joint plan and the Prime Minister says that she hopes that they will agree, a series of alternative of arrangements to
put through the Commons. Crucially, Theresa May now says that the government will be bound by whatever the Parliament passes. In other words,
she has abandoned her red lines, promising to take forward whatever plan the House of Commons comes forward with.
It was all happening after an emergency Cabinet meeting. It lasted seven hours and the Prime Minister saying leaving the E.U. with a deal was still
the best policy.
(BEGIN VIDEO CLIP)
THERESA MAY, BRITISH PRIME MINISTER: I know there are some who are so fed up with delay, and then these arguments that they would like to leave with
no deal next week. I`ve always been clear that we could make a success of no deal in the long term. But leaving with a deal is the best solution. So
we will need a further extension of Article 50. One that is as short as possible and which ends when we pass a deal.
(END VIDEO CLIP)
QUEST: Bianca is with me. Quick question, firstly, leaving the E.U. without a deal is now not an option.
BIANCA NOBILO, CORRESPONDENT, CNN: No. And the Prime Minister had said in the House of Commons that she wouldn`t allow that to happen unless
Parliament voted for it. And we knew because Parliament have expressed its opposition to no deal and several of --
QUEST: So a no deal Brexit is not a possibility.
NOBILO: It`s still the legal default. But politically no, it`s not.
QUEST: Taking away the red lines. What does that mean?
NOBILO: She softened her red line. So Theresa May has stood firm, she said we`re going to leave the Customs Union and the single market, stop freedom
of movement. Now, she`s softened if not abandoned some of those red lines by saying that she`s open to meeting with Jeremy Corbyn who we know stood
on a manifesto and has since repeated he wants a Customs Union. He wants dynamic alignment with the single market -- all these things that are going
to make Brexiteers quake in their boots.
QUEST: All right. And this idea of unity that John Major, the former Prime Minister, Sir John Major talked about -- is this -- I mean, it`s not a
unity government, but it`s on this policy. She`s seeking something more than we`ve seen before.
NOBILO: Yes, and there are characteristics of what is happening now with Parliament taking control with cross party support for various different
motions with her offer to work with Jeremy Corbyn, with Jeremy Corbyn saying he`s very happy to work with her. This is not normal government. It
has characteristics of a national unity government and Corbyn also need some political cover here.
Because he`s voted against Maastricht Lisbon, against the EEC, yet he has to also appeal to remain voters. So working with the Prime Minister here
could be a way out.
QUEST: What comes out of it? What comes out of in terms of the vote -- you know, she`ll have this meeting with Jeremy Corbyn, he says he is very happy
to meet up. They will try to come together with a deal. Sure. My guess is and it is just a guess. My guess is that they won`t be able to agree a
unified approach, but they will agree a series of options to put on the table for the House.
NOBILO: I would -- I think that`s probably the most likely. Jeremy Corbyn and Theresa May have thus far struggled to find any common ground on
anything that I can call to mind. And so I think it`s likely that they`ll come up with a selection for Parliament and that`s what we`ll see.
QUEST: When we talk about, I mean, if all of this is done in the next week, we`re talking about just a technical extension, up until May the 22nd. She
can`t go -- I mean, we`re all getting excited about an extension, but it can`t go beyond May 22nd because then, there would have to be elections.
NOBILO: And there`s this issue of April the 12th. Because that`s when in the U.K. under domestic law, you have to say we`re going to participate in
the European elections.
QUEST: So all of this still has to be done by next Friday?
NOBILO: Yes. They`ll still need to be a decision made by then. So the clock is definitely ticking. Theresa May also has risk, she`s has taken upon
today. She`s planted our flag, and she has annoyed suave of her Party who actually --
QUEST: She doesn`t care.
NOBILO: Well, I`m sure she cares. But what are the options?
QUEST: So she`s going to go through with the opposition -- which some says she should avoid them. Good to see you. There`s more work for you to do.
It`s only eight o`clock, carry on.
NOBILO: A few more hours.
QUEST: Tend to your duties. The president of the European Council, Donald Tusk, has responded to Theresa May`s statement saying, "Even if after
today, we don`t know what the end result will be. Let us be patient."
Erin McLaughlin, in Brussels, Erin, come on, what are they expecting? They`ve seen tonight. They must be encouraged. But what`s their hope?
ERIN MCLAUGHLIN, CORRESPONDENT, CNN: Well, there`s plenty of skepticism here in Brussels, Richard, but I think patience is the word of the night.
It`s also the word of the Danish Prime Minister Lars Rasmussen. Let me just pull up what he had to say on Twitter. He said, quote, "Since we could
agree to postpone Brexit to right before the European parliamentary election, given the approval of May`s agreements, we should also be patient
if there`s suddenly is a cross party way forward in the U.K. But is it too good to believe. #Brexit."
So you can check there, a note of optimism, but also a note of skepticism in what the Danish Prime Minister had to say. And it`s also reflective of
the mood of other diplomats that I`ve spoken to. So far tonight, the thinking of one diplomat being, she`s tried to go cross party before and
failed, what would be different this time?
QUEST: Right. But if -- let`s assume she does manage to do it. They are still going to pass the withdrawal agreement. So we`re really talking about
attaching something to the political declaration, which most people seem to think isn`t worth the paper it`s written on anyway.
MCLAUGHLIN: Yes, I think timing here will be absolutely critical. As the Danish Prime Minister just referred to there, in that tweet, they`ve agreed
to that May 22nd extension. If she can get the withdrawal agreement past prior to April 12. If she`s not able to do that, that technical extension
goes away, unless and perhaps the U.K. participates in those European parliamentary elections, which is a crimson red line to the E.U., which she
also said tonight, she explicitly does not want to do
QUEST: Right. So we are talking here about coming back. I`m trying to just get the tick tock right. We`re talking about coming back to Brussels for
the council next week, with some sorts of cobbled together agreement, which would allow an extension. But Erin, my question is still leaving by May the
MCLAUGHLIN: Yes, that`s right. And that would entail having had that withdrawal agreement passed with parliamentary majority in order for a
technical extension to even be considered, which is problematic. And that`s why we`re getting that hint of skepticism there from the Danish Prime
Minister, that she`ll be able to pull this off, that she`ll be able to get Corbyn on side, get all the MPs on side, come to some sort of consensus,
pass the withdrawal agreement, come forward with some sort of amended political declaration and have it all signed off by the E.U. next week is
really a tall order given -- especially given what we`ve seen play out there in Westminster so far.
QUEST: Erin, you summed it up beautifully. Thank you, as always. Thank you very much. The British Chambers of Commerce says businesses in the U.K. are
hitting the brakes, because of the chaos in Westminster.
It says in the service sector, a number of firms with rising exports no longer outweighs the number of singular exports, more firms and are
reporting that cash flow is declining, compared to those who say it is rising. It is the first time it`s happened since 2012.
Investment intensions in manufacturing and services are the lowest in eight years. Anna -- Anna Stewart is with me. Yesterday, you were looking --
you`re continuing to look at the effect of all these developments. What was it today?
ANNA STEWART, REPORTER, CNN: Today, from the BCC is a survey of 7,000 businesses representing some one million people. And I think as you
highlighted there, the services data was particularly shocking. It showed that services sector is showing bit of a decline for the fourth quarter, I
think it is -- it`s not good news. Business investment is slowing.
QUEST: All right, but the FTSE was up 1% today. The FTSE rose. I mean, and the FTSE hadn`t seen the Prime Minister`s statement this evening. So they -
- London traded throughout the course of the day, at the worst point of day, I didn`t see the pound.
STEWART: Investors are getting very used to another day of Brexit chaos. You know, this is -- we`re getting a survey every week -- yesterday, every
day. Yesterday, we were talking about two surveys talking about GDP.
QUEST: There is the pound. It is up just about half a percent. Now, that`s not so good. I mean, this is the weirdness of the day. The pound is up, so
that`s not so good. The exports are already in difficulty. The FTSE rises and that there was a scintilla of optimism tonight because of what the
Prime Minister said.
STEWART: Well, this is it. I think the pound probably is reacting to that and now we have had some business reaction already as you would expect.
STEWART: The idea of potentially some compromise, a softer Brexit, well that is music to business` ears, so we had something from the IOD, but they
were saying that was good, they welcomed it, but they said -- what did they say there? There are many obstacles on the path ahead. The BCC you brought
out the survey today, let me bring you their quote. "The Prime Minister may have issued a revised roadmap, but business communities still have little
sense of the destination. It is like being asked to follow a set nav to an unknown location with a nagging worry that the directions may yet lead to a
This is the problem. Yes, it`s looking good. But it`s more uncertainty. Until a deal is reached in Parliament and in Brussels, it`s the status quo
and businesses aren`t investing. It`s the slowest business investment we`ve had since 2009, Richard.
QUEST: Anna, good to see you. Thank you. Anna Stewart. The weak pound continues. The London FTSE we are talking about. That closed with a six-
month high. One percent, but let`s focus on the rest of the market. Zurich was down and the other markets went up any way there. All things
considered, they were down, but they did manage to finish in the green except for the Zurich SMI.
Other news now, we`ve got breaking news in CNN. Now, Algeria`s President has resigned after three decades in power. Abdelaziz Bouteflika has bowed
to pouncing public pressure. For months demonstrations have drawn huge crowds calling for his resignation. Last week, Algeria`s Army Chief join
the cause for the ailing President to step down.
Tonight, economists are warning President Trump -- close the border and risk catastrophic economic damage. A report from the border with Mexico,
the U.S. border that is in just a moment.
QUEST: "Quest Means Business" tonight live from London. Automobile industry experts in the United States are sounding the alarm as President Trump is
warning again that he will close the border with Mexico. Mr. Trump has been threatening to act over what he calls an immigration emergency.
Moments ago, at the White House he said, he will close the border even if it hurts the economy. Think about it, 37% of the auto parts imported into
the U.S. come from Mexico. Economists say entire U.S. auto industry would shut down within a week. Also affected flat screen TVs, medical devices,
avocados, tomatoes, strawberries, you name it.
Rosa Flores is that the McAllen Hidalgo International Bridge in Texas and sent this dispatch.
(BEGIN VIDEO CLIP)
ROSA FLORES, CORRESPONDENT, CNN: Well, Richard, you see the international bridge that you see behind me. There are 29 ports of entry here in the
state of Texas. And every hour that an 18-wheeler with produce with avocados, the tomatoes are stuck in Mexico, the more expensive that that
product gets for Americans here in the United States.
And so even with the threat of a possible border closure, we`re already seeing delays here along the border. I just talked to one gentleman who
said that for pedestrians, it`s about 35 minutes to an hour by car to cross over. It`s about three to four hours, he was saying.
Now, I talked to one expert who pretty much put it this way. He said, this is like murder-suicide. Yes, by doing this, the United States would hurt
Mexico, but it would hurt the United States just as much.
Here in the state of Texas, trade accounts for $650 billion, that`s the latest number from the Texas comptroller and those are from 2015 and they
support 1.6 million jobs. So it impacts real people.
Now the impact here locally for people who live along the border, it`s catastrophic. People walk across the border and come back, for example,
they go to Mexico to buy tortillas and avocados and they bring them back and eat them here in the United States. People on the Mexican side with
visas, come into the United States, buy something and then go back. So imagine if the border were suddenly closed. That would mean that Mexicans
would be stuck in the United States and U.S. citizens would be stuck in Mexico.
From talking to locals here, they say that they`re really tired of being used as political pawns. There`s a lot of politicians that come to this
area, get photo ops and then leave. But then what happens? There are no policy changes that can actually solve the problem.
(END VIDEO CLIP)
QUEST: Christine Lagarde thinks economic growth is losing long term momentum. The Managing Director of the IMF says Brexit, high debt and
flaring trade tensions are combining to create a delicate moment for the global economy.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, MANAGING DIRECTOR, IMF: But again, to be clear, the expected rebound in global growth later this year and into early 2020 is
precarious. Why is that? Because it is vulnerable to downside risks including country related uncertainties such as Brexit, for instance; and
broader uncertainties such as high debt in some sectors in some countries. Tensions around trade policy is still uncertain, and a sense of unease in
QUEST: Now, the Managing Director has frequently used weather scenarios, weather forecast scenarios when talking about economic growth such as the
sun is shining, it`s time to fix the roof.
Well, now let`s dive into Madame Lagarde`s weather report for the global economy. Bearing in mind what we were saying a moment ago, a year ago, she
was saying the sun is shining. Countries should fix the roof. Seventy five percent of economies were importing an upswing when Christine Lagarde said
that. But the clouds started to gather.
Six months ago, she was talking about clouds of risk on the horizon. Today, the weather is increasingly unsettled.
QUEST: Seventy percent of economies are now slowing down. The WTO too is worried. It says new tariffs, weaker economic growth and market volatility
are slowing down world trade. Just look at the progression of this storm. The Director General, Roberto Azevedo spoke to me earlier on "The Express"
when he said things could be taking a turn for the worse.
(BEGIN VIDEO CLIP)
ROBERTO AZEVEDO, DIRECTOR GENERAL, WORLD TRADE ORGANIZATION: I think we`re very worried. You know, ever since we began to issue reports on trade
restrictive measures, which were adopted by the G-20 countries last year. So that was at the end of last year, we noticed that the coverage of these
trade restrictive measures had increased by six times over the previous period.
So we were at that point in time with $480 billion of trade covered by trade restrictive measures. And $350 billion of those, because of the U.S.-
China tensions and whenever you have that type of environment out there, there is a lot of uncertainty in the market. There`s a lot of uncertainty
for investors. And the moment that investors pull back, the moment that investors decide that they`re going to hang on, before they make, you know,
their actual investments, we have a problem because not only does the global economy slow down, trade slows down even faster, because of the
impact of investments for trade.
QUEST: The President, the U.S. President talks about all the huge amounts of money coming in from what you described as the lovely tariffs. The U.S.
government is bringing in billions. How do you convince him not -- to take away his tariffs even when he sees it in terms of making money on the back
of tariffs and customs duties?
AZEVEDO: It is an interesting conversation, because at the end of the day, that income is not coming from the exporter outside, it`s being paid by the
consumer. It`s the American taxpayer who is paying for that additional amount of revenues that are going into the U.S. coffers.
So at the end of the day, yes, the government is definitely getting more revenues. But it`s also acting in a way that slows down the economy because
it`s taking purchasing power away from the citizens. But it`s a complex conversation, and not a very simple one.
(END VIDEO CLIP)
QUEST: Now, looking towards the future in Christine Lagarde`s forecast. If you look forward, then she says the future, there`s a chill has descended -
- precarious and delicate are the words being used. The outlook is serious challenges ahead.
Also unsettling at the moment, a key indicator is predicating a recession. It`s the U.S. three-month yield, which went higher than a 10-year called an
inversion. It`s happened before in recessions of 1990, 2001 and 2008.
It`s the gray lines in the middle, which is the recession, which follows the crossing of the blue, and the red parts of the graph. Bradford McMillan
is the Chief Investment Officer at the Commonwealth Financial Network. He joins me now. The reality of this inversion, I know people always say every
inversion doesn`t lead to a recession, but every recession had an inversion. What do you make of this particular one? I was reading your
BRADFORD MCMILLAN, CHIEF INVESTMENT OFFICER, COMMONWEALTH FINANCIAL NETWORK: Well, when you look at an inversion, generally speaking, it is
indeed a sign of trouble ahead. But not very quickly ahead. So this says we probably have a problem. But historically, it`s been at least six months,
often more than a year. So this is just one sign. And it`s a sign that yes, we have trouble ahead. But it`s not a sign we have anything coming this
year, for example.
QUEST: Yes, but when it does come, I mean, that`s a bit like saying there`s a hurricane coming. But don`t worry, it`ll be next year. What will it look
like when it arrives?
MCMILLAN: Well, first of all, when you look at the timeliness of the signal, this says yes, risk levels have risen. We need to see a couple of
other things to see a recession, we need to see job growth slow down. Typically, when job growth drops below about two million a year, that`s
when we have trouble and we`re still well above that.
We need to see consumer confidence tick down by about 20 points year on year. Again, we`re still well above that. And we also need to see business
confidence tip down. There`s four things that have to happen, and only one has. So the clock is ticking, but it`s not immediate.
QUEST: But Brad, I remember sort of late last year, Alan Greenspan said to my colleague Julia Chatterley, that if the market recovers, that is after
the lows of sort of mid-December-ish. If the market recovers, be warned, that can be followed by the almighty crash thereafter. Now, does this
inversion suggest that there`ll be a sinister market fall in the future?
MCMILLAN: Well, I can almost guarantee you at some point, we will see the market go down. You know, when we have a recession, we typically do see
markets pull back. But one of the things you need to remember is that we`re still seeing growth at the moment, it`s slowed. But at the same time, we`ve
had a slow first quarter for the past several years. There seems to be something about the first quarter. So we are likely to see growth pick up
We`re likely to see -- we`re seeing some of the headwinds start to fade. So we are going to get a recession, we are going to get a pullback at some
point. But this is not a sign that is happening anytime soon.
QUEST: Does it matter? Does it matter whether the short -- in terms of an inversion -- whether the cause is primarily a short - the short end rising?
Or the longer end falling? I mean, the effect is the same, you do invert, but does it matter, which is the dominant movement?
MCMILLAN: It doesn`t seem to. We don`t actually have enough data. There`s not a big enough data set to draw any conclusions. But what the inversion
of the yield curve is really telling us is that people are more concerned about the future than they are optimistic about the present. And so how
that happens, whether it`s they feel a lot more -- whether the Fed feels more confident and raising short term rates, it doesn`t matter.
QUEST: You`re the chief investment officer, take all that we`ve just talked about, and factor it in what should -- I mean, as a long term investor?
What should they do?
MCMILLAN: A long term investor should have looked at the pullback at the end of last year and said, am I comfortable with my risk? If they are
comfortable with their risk, then in that case, they should do absolutely nothing. If they weren`t comfortable with the risk, if they got nervous at
the end of last year, then they should probably de-risk their portfolios.
But right now, nothing has really changed from an investment perspective than where we were a couple of months ago.
QUEST: Brad, I think this is the first time we`ve been fortunate enough to have you on "Quest Means Business." Sir, I hope you`ll come back again in
the future. We need to hear this sort of good common sense into economic matters. Thank you, sir. Much appreciated.
MCMILLAN: Thank you.
QUEST: Now the British Prime Minister wants to plot a new path out of the E.U. with the help of the opposition. I`ll hear from the former Political
Director to Tony Blair. Next.
[15:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I`m Richard Quest, there`s more QUEST MEANS BUSINESS in just a moment. When Theresa May
says Britain needs more time. We`ll have the latest from London.
And the Boeing 737 Max isn`t returning to the air anytime soon. We`re going to talk about the fix that is needed to be delayed. Before that, this is
CNN, and here the facts always come first. Algeria`s president has resigned after three decades in power. Abdelaziz Bouteflika has bowed to mounting
public pressure. For months, demonstrations have launched huge crowds, calling for his resignation. Last week, Algeria`s Army Chief joined calls
for the ailing president to step down.
The British Prime Minister Theresa May says she`ll ask the European Union for further delay in Brexit. The Prime Minister also says she wants to meet
the opposition leader Jeremy Corbyn to see if they can find a way to get a Brexit deal through parliament. Mr. Corbyn says he is willing to discuss
the way forward with the Prime Minister.
The FBI Director James Comey spoke to CNN`s Christiane Amanpour about the fight over the special counsel Robert Mueller`s report. Congressional
Democrats are threatening to subpoena the full report. But the Attorney General William Barr says he must redact sensitive material first. This is
what Mr. Comey said to Christiane.
(BEGIN VIDEO CLIP)
JAMES COMEY, FORMER FBI DIRECTOR: He is an institutionalist, he loves the Department of Justice, the only thing he has to lose at this point in his
career is his reputation. I think he deserves the benefit of the doubt, and us uncharacteristically showing some patience to give him a chance to show
(END VIDEO CLIP)
QUEST: President Trump says he is 100 percent ready to close the southern border with Mexico if he can`t reach a deal with Congress on illegal
immigration. The president made the remarks a short time ago at the White House with NATO Secretary-General, Jens Stoltenberg by his side.
Returning to Brexit, Richard Ashworth is an independent member of the European parliament. He was the leader of the U.K. conservative delegation
before he was expelled following a vote in the European parliament where he defied the Prime Minister.
So tonight, what do you make sir, of what has been -- what the Prime Minister has said and how it can actually factor into a solution?
RICHARD ASHWORTH, INDEPENDENT MEMBER OF EUROPEAN PARLIAMENT & EUROPEAN PEOPLE`S PARTY: Well, it`s a significant move because in talking to the
Labor leader, the one thing he is almost certain to demand is that we factor in a Customs Union for the United Kingdom.
But remember, that was one of the red lines that the British Prime Minister had, and so once she starts talking to the House of Commons about a Customs
Union, she will inevitably have problems not only with her own party, but with the house. The other thing I think you need to remember through all
this, that it was those 28 -- 27 heads of state in government who on March the 29th said, we`ll give you an extension until April the 12th.
And in effect, that means over the next council meeting which is April the 10th, just a week away from now. But only on the condition that you come
back to us with some substantial substantive proposition. Now, I very much doubt whether saying, well, we`re prepared to consider a Customs Union is
QUEST: All right, assuming that all to be the case. The Prime Minister -- is it possible that they agree some variety of things, Customs Union or
whatever it might be, it goes into the political declaration, but it really is meaningless when it comes to the second part of the negotiation after
the U.K. has left?
[15:35:00] ASHWORTH: Yes, indeed, it is. That`s absolutely right. And I think that in Britain proposing a Customs Union, it would almost certainly
come with the reassurance that there would also be a public vote on the whole deal on whether the British public preferred the Prime Minister`s
Withdrawal Agreement or the new Customs agreement or perhaps to withdraw it all together.
But remember that this is also a problem for the 27 Prime Ministers because they are now engaged in the European election campaign. And the one thing
they are telling me is that they think this European election campaign is important, they want to talk to the European public about the issues which
they have border control, jobs growth, climate change, the things that they think people care about.
And they`re finding that with Britain still here as part of the European Union, but not intending to stand --
QUEST: Right --
ASHWORTH: In an election or are they, they`re finding that is clouding the whole issue, and they`re not happy.
QUEST: Do you think there is any possibility, assuming the Prime Minister comes back next week with nothing, that they would finally say, you know,
something, this is going nowhere. I mean, President Macron hinted as much today. Do you think they would actually ever refuse an extension, thus,
forcing the U.K. out?
ASHWORTH: Yes, absolutely right. I think the default setting you can take from this is that they are willing us, United Kingdom, willing them to come
forward with something positive. But make no mistake, they said that the 12th of April was the cutoff date. Unless, there is something substantive
QUEST: Right --
ASHWORTH: And proposed on the 10th of April, then there is no point in going on talking until the 22nd of May and still leaving. No point at all.
QUEST: Good to see you, sir, I much appreciate your time tonight, we`ll talk more about it as it continues, thank you. Now, the leader of Britain`s
opposition Jeremy Corbyn says he accepts Theresa May`s offer to meet. The Prime Minister said she wants to negotiate a unified approach to leaving
the union, saying the deadlock must be stopped.
(BEGIN VIDEO CLIP)
THERESA MAY, PRIME MINISTER, UNITED KINGDOM: This debate, this division cannot drag on much longer. It is putting members of parliament and
everyone else under immense pressure, and it is doing damage to our politics.
(END VIDEO CLIP)
QUEST: Matthew Doyle is with me; former political director to Tony Blair. Good to see you --
MATTHEW DOYLE, FORMER POLITICAL DIRECTOR TO TONY BLAIR: Hi --
QUEST: So what do you make of tonight?
DOYLE: Well, we are where we thought we would be yesterday, which is that parliament didn`t make a decision last night to come up with a strong
alternative. And you`ve seen these really unprecedented meetings today with the cabinet, trying to come up with some sort of agreement.
QUEST: So the Prime Minister -- let`s just go through. Let`s tick off to say yes or nay, she has dropped no deal Brexit.
QUEST: She has abandoned her red lines for the time being.
DOYLE: In realty, that must be the consequence of this, yes.
QUEST: By the fact that she says she would accept -- abide by parliament.
DOYLE: Right --
QUEST: She is going for a unified approach.
DOYLE: Yes, she is trying to seek the consensus that she should have been going for from the beginning.
QUEST: She is going to try and pass this with Labor, not her own party.
DOYLE: Right, and that presents a problem because Labor isn`t just going to fall in behind supporting a Brexit. Don`t forget, one of the challenges
that you`ve got for both party leaders, for Theresa May and for Jeremy Corbyn is that across parliament, these divisions aren`t so much along
party lines, they are ultimately on leave and remain lines.
QUEST: OK, so now let`s assume they do get a vote and they get -- get to be an indicative vote --
DOYLE: Yes --
QUEST: In the Customs Union or common market, whatever it`s going to be.
DOYLE: Yes --
QUEST: She`s crossed the red line. They passed it, they passed the Withdrawal bill, she goes to Brussels, the U.K. is out.
DOYLE: Right, and for a lot of Brexiteers, that`s their paranoia. They`re - - if they don`t agree to something, then leave will never end up happening. Look, Theresa May --
QUEST: But if they attach to this, something to do with or parliament professes an intention for a Customs Union, they won`t be bound by that in
DOYLE: No, and there`s a hell of a lot of weaknesses with some of the silver bullets that you`re seeing politicians scrapple around for now. The
Customs Union is deeply flawed. It doesn`t solve some of the issues that have been at the heart of this, such as what you do when it comes to
Such as what do you do about negotiating future trade arrangements? So you know, there is a lot of phrases being thrown around at the moment that
still don`t actually deliver on the fundamentals of defining a leave that will reach a consensus position.
QUEST: Right, you are a political consultant of the highest caliber. In the sense -- so you understand the nasties. Is it possible? I mean, they just -
- the Prime Minister just wants to get into the transitional period?
[15:40:00] QUEST: Just wants to leave and get into the transitional period. What happens after that is really fair game and for all.
DOYLE: Yes, and it`s also a game that she said she`s not going to be a leading player in.
QUEST: Right, but -- and once she`s left, there is no going back. I mean, not --
QUEST: So is it tonight more likely that the U.K. leaves on May the 22nd, having agreed to the Prime Minister`s deal plus whatever parliament tax on
DOYLE: No, I think what`s more likely is that what you`re going to see is that by May the 22nd, the proposition that is in parliament is a much
softer Brexit, and I think what you`re going to see is a lot of hard Brexiteers who are going to really look at themselves and think, we`ve
really botched this up --
QUEST: Well, hang on, you`re -- but surely, everything has to be dealt with by April the 10th next week, so that they can delay the 14th to the 22nd.
DOYLE: Well, but look, she -- Theresa May`s strategy here reminds me of when I was at university. Once you realize you can get an extension for
your homework, then you just keep asking for another one. What we`re seeing here is a strategy from the government where what they`re trying to do is
really delay and delay and delay what is the ultimate point of decision.
The question tonight is whether the European Union will be happy to continue facilitating that.
QUEST: As for your homework analogy, I`m afraid I have no idea what you`re talking about. Mine was always on time --
DOYLE: And I`m sure you got a gold star every time.
QUEST: No, usually, I say that the dog --
Good to see you.
DOYLE: Me too, Richard.
QUEST: Thank you. So analysts are warning, Lyft shareholders, you`re in for a very bumpy ride, and may even have a flat tire before it`s all over. Less
than a week into the IPO and the stock gets its first sell rating. The price continues to fall, the Lyft is clearly going down -- rather good.
QUEST: Lyft shares had another bumpy ride today. They opened almost 3 percent lower, and they`ve recovered somewhat. The stock is still well
below the IPO price of $72 after a steep plunge on the second day of trading. Now $42 could be the next lookout.
Paul La Monica, guru Monica joins me from New York. By the way, I`ve never actually taken Lyft. Have you ever taken them?
PAUL LA MONICA, CNN BUSINESS REPORTER: I honestly take Lyft now over Uber. I kind of --
[15:45:00] LA MONICA: I didn`t go as far as deleting the Uber app after the backlash, but I started using Lyft instead, and I`ll be honest, I find it
to be a superior service.
QUEST: Well, there we are. We`ve got that out of the way.
LA MONICA: Here we are --
QUEST: So if it is a superior service, why are the shares falling? Is it just simply a mis-pricing? I mean, is there a fundamental weakness here or
do they just simply were overly optimistic?
LA MONICA: Yes, I think they were overly optimistic, clearly. It seems now that, you know, these unicorns that are going public clearly want to have a
big pop at the open, they want the multi-billion-dollar valuation. And the problem with Lyft even though I do like the company as a service is that,
they are going to continue to compete very aggressively with Uber in the United States and maybe other markets.
And that means they have to spend very aggressively on marketing and other initiatives, and that`s going to likely lead to further losses. This is a
company that is losing nearly a billion dollars last year, and Richard, that is not something that I think public investors are going to tolerate
the same way that the VCs in Silicon Valley are accepting of.
QUEST: Right, so when you -- I mean, will this moderate what Uber does when it comes to -- is it going to -- is it going to moderate any of the
unicorns in their pricing do you think? A reality --
LA MONICA: Yes --
QUEST: What do you think about that?
LA MONICA: I wouldn`t be surprised if this example does cause some of the other unicorns that could go public later this year to maybe moderate their
expectations for what their initial price is going to be. Maybe it will be a little bit lower.
But I think, you know, we also have to be careful here to not write the obit if you will, for Lyft on day three that it is publicly traded.
Remember, Richard, Facebook had an IPO that had a lot of hitches and then that stock tumbled in the first few months after they went public, and now
Facebook is still despite a lot of the -- you know, concerns they`re having this year, a very successful company worth hundreds of billions --
QUEST: Yes --
LA MONICA: Of dollars, not saying Lyft is going --
QUEST: No --
LA MONICA: To do that, but --
QUEST: I`m going to trade your Facebook for my Snap.
LA MONICA: I didn`t want to bring that up, but yes, Snap is obviously another example, at least --
QUEST: Yes --
LA MONICA: You know, SnapChat is still below its offering price, you know, by a much wider margin than Lyft is right now. So that one, you know, it`s
going to take some time before people like you are back in black on that particular investment.
QUEST: Oh, you`re being so delicate, to be polite. Good, La Monica, thank you, sir.
LA MONICA: Thank you --
QUEST: Bitcoin prices have jumped to the highest in a month -- in months. Analysts say a major order by a mystery buyer spurred the selling. The
cryptocurrency soared as much as 20 percent on Tuesday, briefly topping $5,000. Right now, it`s up about 15 percent and more than $4,700. It`s the
biggest one day gain since April 2017. Samuel Burke with this report.
SAMUEL BURKE, CNN BUSINESS & TECHNOLOGY CORRESPONDENT: Richard, I`m in Dubai for a block chain summit, that`s the technology that underpins
bitcoin. And nobody I talked to attending this summit was moved by this jump in bitcoin. And that`s because they say if you look at the markets,
there wasn`t any news to move the market.
They`re looking at this single $100 million transaction from a single buyer and they believe there is such little liquidity in the bitcoin market right
now that something like that can move the entire market. Now, many of these folks were burned by bitcoin in the past year, but they still believe that
it will play a role, just not an outsized role that some may have thought a year ago in the world economy.
That said, they`re still fervently supportive of block chain. If you look and see what companies have done well, the winners and losers from the
conference this time last year compared to now, well, you see a lot of the bitcoin-type startups aren`t around this year.
But the companies that have really focused on bureaucracy, making bureaucracy smoother with block chain, well, they have done a lot better.
So a lot of government finance is done by block chain now. Those startups have done very well. Others that focus on the bureaucracy of education,
making your transcripts available on block chain, so you can move them from a university to an employer, those companies are even profitable now.
And a very interesting aspects I`ve noticed is governments are seeing now that they have rubber stumpers who literally don`t need to rubber stamp
anymore because the technology is taking over those aspects of the jobs. Well, they`re trying to use the money saved to train those same people to
learn and understand bitcoin so that they can use it as part of their jobs.
Move that information, make sure that the data is correct and continue getting their payment so that they are not replaced by automation, Richard?
[15:50:00] QUEST: Samuel Burke in Dubai. When we continue tonight, Boeing 737 Max planes won`t get back in the air just yet, the plane maker said
it`s fixing its flight control system and that`s taking longer than expected.
QUEST: Welcome back. Grounding of the Boeing 737 Max jets won`t be lifted just yet. only last week, Boeing promised a software update which it said
would ensure the planes were safe to fly. Now, it`s told the Federal Aviation Administration that additional work will be needed, and that will
be carried out in the coming weeks, no specific reasons were given.
Tom Foreman is with me from Washington. Perhaps -- I mean, this is -- this is just a mess all around to some extent, but in all that you`re hearing --
in all that you`re hearing from the criminal investigations that have been launched, the investigative committees, what`s the -- where should we be
looking most at, at the moment?
TOM FOREMAN, CNN CORRESPONDENT: Well, I think we should have to look most at, at the moment is whether or not Boeing can simply move forward, whether
it takes a couple more weeks or several more weeks to take a step that is universally seen as a positive step.
I think one of the reasons for the delay right now is Boeing knows, the FAA knows and all these investigators know that Boeing cannot stand another
stumble on this. The next move has to be a definitively positive move that rewards the people out there who are waiting with some degree of confidence
It`s not going to get easier by the way, Richard, this afternoon, the news is that the Senate, Commerce, Science and Transportation Committee chair is
launching an investigation into whether or not the FAA safety inspectors were properly trained when they were looking at this automatic leveling
system, the MCAs system.
Whether they were looking at it properly and whether they knew what they were doing. And according to this, they were allegedly saying something to
this about the FAA, whistleblowers who were raising this in August of 2018. So even before the Indonesian crash, let alone the Ethiopian crash. So this
is a difficult needle for Boeing to thread amid all these --
QUEST: But Tom --
FOREMAN: Very high stakes.
QUEST: And of course, the various discovery processes will be looking for that e-mail, that note, that report from somebody in Boeing to somebody
else internally, saying, should we be giving pilots training, should we not? Should we be making more of the MCAs? Should we putting angle of
attack warnings and somebody saying, no, it`s not necessary.
FOREMAN: And as you`ve noted, those who need the kinds of things that would simply be glossed over, not really thought much of if you had not had two
[15:55:00] When you do that, suddenly, everyone looks back and says, this normal bit of business was not normal. It wasn`t good. It works for that
scientific principal of normal failure. There are things that are considered that will fail, but sometimes that creeps up to the point where
suddenly you have catastrophic failure and everyone looks around and says how do we get here?
That`s what`s happening right now inside Boeing and outside of Boeing. And the ability to answer that question will determine when and if these planes
can ever fly again with confidence.
QUEST: Tom, you cover the industry, please make sure that you continue watching closely and --
FOREMAN: Good job --
QUEST: When there is anything more to talk about, tell us -- tell us that.
FOREMAN: Thanks very much, Richard --
QUEST: We have the last few minutes of trading on Wall Street, and the Dow, it has remained in the -- it remained in the red throughout the entire
session. Not even a hint of green even at the open. But the losses have been paired, it`s being dragged down the Dow by the shares of Walgreens`
boots, the stock is down more than 12 percent.
There you have Walgreens is down 13 percent on an earnings, Walgreens. And if you take a look at the Dow, but worst is Walgreens, best is Dow. That`s
because it`s split and de-merged. Today, Apple is having a good session. As for Boeing, Boeing is middling, as you can see, pretty easy, even Stevens.
We will take our profitable moment after the break.
QUEST: Tonight`s profitable moment. I listened to the Prime Minister Theresa May with very careful interest. Everybody is always wanting to hope
that this is the moment that there is a unifying process that a common arrangement is reached, and that the commons passes the deal and whatever
political niceties it needs, and then goes on to Brussels.
The U.K. leaves and everybody is happy. But listening to Matthew Doyle tonight means -- suggests it`s far from over, that there`s only more
uncertain in the days ahead. But let`s remember, next week, there`s the summit in Brussels and that`s followed by the supposed Brexit day on April
My guess is that`s not going to happen, but whether they can even reach agreement this week -- in fact, it`s all been a little bit too much, we`re
all exhausted. Which is why I`m going to be off for the next couple of days. Which allows me to say that`s QUEST MEANS BUSINESS for tonight, I am
Richard Quest in London.
Whatever you`re up to in the hours ahead, I hope it is profitable.
There you have it, Designer Brands clapping away. The day is over, the Dow is done.