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QUEST MEANS BUSINESS
Boeing Boss Wishes Airbus Happy Birthday; China Readies New Tactics for U.S. Trade War; More Violent Storms Slam Midwestern U.S. Aired 3-4p ET
Aired May 29, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST, QUEST MEANS BUSINESS: We are an hour away from the closing bell on Wall Street, and a miserable sort of day
it has been. Down from the open, low point round about 12 o'clock and we're on we're on another downward trend. Now 1.3 percent off. The market
is clearly unhappy.
And if you look, there's only one stock, one bit of green, biggest loser J &J. So all -- Boeing is down. China is part of the reason. I'm fact
these are the markets and these are the reasons why.
U.S. yields are tumbling, and they are taking stock prices with them. China is preparing new options in its trade war with the United States.
You'll hear from Professor Jim Rogers in this hour. And Boeing's chief executive says his company faces a defining moment with the 737 crisis.
We're live in the world's financial capital, New York City on Wednesday, the 29th of May. I am Richard Quest, and yes, I mean business.
Good evening, we have a busy day. The U.S. stock markets are down more than 1 percent and we're going to be watching closely because obviously, in
this hour, this is when you could actually get direction and if yesterday was anything to go by, you and I were talking and then all of a sudden the
market drops a further 60 to 70 points in the closing moments.
But we do begin tonight with breaking news from Washington, Robert Mueller, the Special Counsel has broken his silence. Speaking publicly for the
first time since the investigation began more than two years ago, he said, "If Donald Trump had not committed a crime, he would have said so in his
report." That directly contradicts the President's repeated claims that he has been completely and totally exonerated.
Crucially, Mueller argued that he could not bring charges against the President in the first place. And he suggested the power to hold the
President accountable resides within the U.S. Congress. That's code word for impeachment.
The Special Counsel reiterated what his investigation had confirmed -- the Russian government made multiple systemic attempts to interfere in the 2016
presidential election with the effect of damaging Hillary Clinton and helping Donald Trump.
Here's a Special Counsel in his own words.
(BEGIN VIDEO CLIP)
ROBERT MUELLER, U.S. JUSTICE DEPARTMENT SPECIAL COUNSEL: If we had had confidence that the President clearly did not commit a crime, we would have
said so. We did not, however, make a determination as to whether the President did commit a crime. The introduction to the Volume 2 of our
report explains that decision.
It explains that under longstanding department policy, a present President cannot be charged with a Federal crime while he is in office.
(END VIDEO CLIP)
QUEST: Kara Scannell is in Washington watching these events. So let me just say, we need to obviously understand why he would speak today to wrap
it up. He hasn't spoken so far. But did you -- but reading between the lines, was he telegraphing that he would have charged -- the Special
Counsel would have charged if he had been able to?
KARA SCANNELL, CNN REPORTER: I think what he is saying is that, you know, he could didn't even consider it. But if you go back and even look at the
report, he went through 10 potential obstructive acts by the President and analyzed each one of those individually, both with ones that he thought
there potentially could have been obstructive acts and ones where he found that it was less likely to be an obstructional act.
So he did all of the research and all of the investigation. I think when you pair that with what he was saying today, really reiterating that they
couldn't even consider this because of DOJ policy, he is laying out there that there would have potentially been an issue there for obstruction.
And I think we've heard from a lot of people, a lot of former prosecutors that said, but for this DOJ policy that prohibits indicting a sitting
President, that there would have been charges against just about anyone else.
QUEST: And on the question of why. Why would he do it? He hasn't spoken so far. He has basically told us today, "My report speaks for itself if
you call to give me evidence, my evidence is my report." Why the need to wrap it up in a bow and say goodbye?
SCANNELL: Very interesting, right. I mean, he is under pressure right now by Congress who wants him especially the Democrats want him to come in and
testify and answer a lot of questions about his report and some questions that still remain unanswered.
[15:05:12] SCANNELL: And so Mueller has resisted that. The question on the table remains, will the Democrats try to subpoena him? Or will they
take his statement today as enough to satisfy whatever else they wanted to hear and know from him, but it is very remarkable to hear Robert Mueller,
in his own words, two years after this investigation, and he chose to do it on a day with the Attorney General Bill Barr was in Alaska, not even in
Washington to stand there beside him, so it actually just the Robert Mueller show today.
QUEST: Michael Zeldin -- sorry, Kara Scannell, thank you. Michael Zeldin is with me. He once worked under Robert Mueller, as a Federal prosecutor.
He is in Washington for us tonight. Was he telegraphing -- read between the lines for me -- was he saying, "I would have if I could have, but I
couldn't, so I didn't."
MICHAEL ZELDIN, CNN LEGAL ANALYST: I don't think quite that clearly. I think what he was saying was that in respect of obstruction, there were 10
events that he was looking at, as Kara said, he said as to them, three presented substantial evidence of obstruction.
But he goes on to say that there were complicated issues of law, in fact, in making a decision, not just the Office of Legal Counsel opinion that
prohibits the sitting President from being indicted, but other issues under the Constitution Article II: Powers the President has to act.
As what Mueller said, these would take a long time to flesh out, since I can't indict him, I'm not going to flesh them all out for you. But
Congress, here it is, you figure out under your lesser standard of obstruction -- lesser standard of obstruction, an impeachable offense.
QUEST: Right. But on that point, the opinions says -- this is from what Mueller said today, the opinion says that the Constitution requires a
process other than the criminal justice system to formally accuse a sitting President of wrongdoing. Is he inviting Congress to impeach?
ZELDIN: He is inviting Congress to inquire as to whether impeachment is appropriate. He says in his report that one of the reasons he didn't make
a decision about indictment or no indictment was because if he made it a decision about indictment, that would preempt Congress's power.
So what he's saying is, Congress, it is in your hands. I'm not saying he committed an impeachable offense. But I am saying that you really do need
to look at it by opening a preliminary inquiry as to whether it is worth your impeachment.
QUEST: Is it helpful what he did today? When I see that quote that we were just showing now this quote of people saying, if we could have said we
had cleared him completely, we would have done so. But it isn't that just a version of nod, nod, wink, wink? Isn't that just a sort of a tangential
way of saying that basically, we didn't like any of it?
ZELDIN: Well, I don't think Mueller liked the obstructive behavior that he investigated. I think it offended him to see the President of the United
States acting in the way he did.
QUEST: Can I just interrupt you, Michael, because now the Speaker of the House, Nancy Pelosi is speaking, and I would like to listen to what she's
saying. It's just a few seconds.
ZELDIN: Okay, sure.
GLORIA DUFFY, PRESIDENT AND CEO OF THE COMMONWEALTH CLUB: ... statements about the President not being able to be convicted of a crime while in
office -- tell us -- I know you've made one comment already this morning. What is your reaction to the statements this morning?
REP. NANCY PELOSI (D-CA): Thank you, Gloria, for your question and for the invitation to be here today. It's also wonderful to be at the Commonwealth
Club with many members of the club and concerned citizens and especially my family. My daughter, Christina has been with Honorable Phil Kauffman, and
our grandson, Octavio.
And understand, my son, Paul -- our son, Paul is here. Paul, Jr. some place. Paul, welcome. At any event, this is a family affair for us
always. We're always flying here whether we're present or viewing or listening to what is of interest to our community.
And I want to salute Gloria Duffy, she's just so remarkable and we are so blessed in having her.
Well, she mentioned when I was doing -- while they were having a late Central America style dinner, I'll tell you what she was doing during the
day. And this was so remarkable to all of us because it was -- we were there to see what was happening.
Madeleine Haas Russell, I mean, if you've maybe heard of Madeleine Haas Russell, she had something called the Columbia Foundation, which sponsored
a California trip to Central America. And this is history. So we went and it was Democrats and Republicans.
[15:10:07] QUEST: Well, we're going to continue to listen. Michael, while we wait for the Speaker to actually say something relevant, at least to the
subject of the discussion, she seems to be reminiscing, rather. I suspect she will answer the question in just a second or two. But Michael, would
you expect Congress to now move on this?
ZELDIN: I think that Congress really needs to call witnesses so that the American people can hear like what Mueller said today, what the others who
were involved in these allegations that Mueller investigated from their mouths, what they did, what they were told, and then the American people
can draw a conclusion for themselves.
I think the problem here, Richard, is that most people in the United States and around the world have not read this report. Four hundred and forty
eight pages, and it's quite dense.
And so in order for the American people and the world population to understand what happened in our election, and in the aftermath of it, live
witnesses need to be called. Mueller was the first important witness. He probably should be called, again, to give more comprehensive testimony.
But then we really need to hear from all the other witnesses who are involved in the investigation that he undertook.
QUEST: Why? I mean, what -- what does it add to the sum of understanding? Before you answer that? Nancy Pelosi.
PELOSI: Now, former Special Counsel Mueller with what he had to say, and as Gloria indicated, he did say, if he saw any evidence that the President
was not -- was innocent, he would have let us know. If he had any evidence that the President was not guilty, he would let us know. But he didn't.
He didn't. And I think that was very, very important.
Well, I have the deepest respect for him. And thank him and his team, from the presentation of facts that will further lead us to help us in the
Congress and in the courts. This is a very valuable contribution.
I am gravely disappointed in the Justice Department for their attitude, their misrepresentation of the Mueller report to begin with because they're
hiding behind something that you could never find in the Constitution that the President is above the law, and their misrepresentations, even under
oath by the Attorney General to the Congress of the United States.
So we -- as we will continue on our path, which was led by our sixth Chairman who is magnificent, Adam Schiff, who is coming, Jerry Nadler,
Judiciary; Elijah Cummings, Government Reform and Oversight; Maxine Waters, Financial Services. Richard Neal, the President taxes, Ways and Means; and
Eliot Engel, Foreign Affairs -- he said this. Last week, we had three victories in the courts.
One, Elijah Cummings won that President's accountants that they had to share the information to Maxine Waters. The Deutsche Bank decision, which
is they had to share the information. And three, not related to the fresh investigation of that, but related to other problems we have with the
President and his view of the Constitution is that the court said that he cannot use Defense Department funds to build a wall, to use that money to
build a wall.
We also had with Adam Schiff's committee and that the Justice Department, under threat of subpoena and legal action, decided that that they would get
certain important documents to the committee and that was the victory. That was four days. Four decisions in five days, very important to
advancing our getting the facts to the American people, getting the truth for the American people. Where it will lead us? We shall see. Nothing is
off the table.
But we do want to make such a compelling case, such an ironclad case that even the Republican Senate, which at the time seems to be not an objective
jury will be convinced of the path that we have to take as a country.
DUFFY: So you mentioned the victories in court, you mentioned the various committees and their investigations, some in Congress who want to go
further, Representative Steve Cohen of Tennessee over a dedicated Impeachment Inquiry Judiciary Committee potentially.
PELOSI: A Judiciary Committee what?
DUFFY: Well, open a specific investigation of impeachment.
PELOSI: You mean, he as a member of the committee.
PELOSI: Because the committee has not recognized.
DUFFY: So there are Democrats in Congress who want to go further than the existing committee investigations. How do you feel about that? Do you
think there's a role for an additional dedicated investigation?
[15:15:15] PELOSI: Well, let me just say that I'm very proud of our House Democrats, they've been very, shall we say, conscientious about how they've
reached their decisions. And I think it's like 35 of them out of 238, maybe it's 38 of them out of 238 has said that they want to -- has spoken
on impeachment and many of them are reflecting their views, as well as those of their constituents.
Many constituents want to press on, but we want to do what is right and what get some results when it gets results. I mean, it has been
inevitable. So yes, there are some and the press makes more of a fuss about the 38 than the 200 who are over half of the Congress, and half of
the Democrats in the House sit on one of the six committees.
So they're all on a path of finding more information, just to recall -- we are not ordering, but what would not become impeachment, but the
impeachment investigation of Richard Nixon. That took months and months of a Senate committee that was solely dedicated to serving impeachment, before
they then decided to have Articles of Impeachment come from the House, which were never executed, because the House and Senate agreed and was a
democratic House and a Democratic Senate. I mean, it's a different scenario now.
So the case has to be very compelling to the American people. So we are legislating and we wish the press would cover more of that. Thank you,
Gloria, for pointing out some of the bills that we had passed and sent to the Senate about gun safety, women's rights, equal pay for equal work,
violence against women and gun safety. The list goes on. Climate action now, the list goes on.
But in any event, we're legislating, we're investigating and we are litigating. And we're going to, as we go down the path, make a decision
based on the strongest possible case to get the best results for the American people and the action taken by the Special Counsel today.
I commend him for the work that they did to present the facts. Now, we have to get it un-redacted for the public. But nonetheless, and for the
Congress, by the way, they will say, we will show you -- I said, that's not it. The American people to know. They're going to show me, and then I'm
bound by classified rules of the House not to tell anybody, no, I don't think so.
In any event, I think that, you know, everybody wants justice. Everybody wants the President to be held accountable in the most serious way. And
everybody believes -- I mean, I am talking, I don't want to criticize -- that no one is above the law especially the President of the United States.
DUFFY: We will come back to the remedies, the 2020 election on the run up to it.
PELOSI: I thought there would be some questions from the guests?
DUFFY: But let's talk about legislative priorities. We mentioned some of the bills. I didn't notice, but I read recently that the first 10 HR
numbers are reserved for the Speaker's priority. So that is House Resolutions or --
QUEST: Right. There is a good moment to leave Nancy Pelosi, the Speaker, Michael is still with me. Listening to that, Michael, I mean, we are now
in a very, very dodgy area in terms or difficult area, I should say, in terms of the Congress having to make the decision whether to open some form
of proceedings that could eventually lead to an impeachment where there it is at the moment, no chance of a conviction in the Senate.
ZELDIN: Right. And we saw that in Watergate, and we saw that in Whitewater, Monica Lewinsky with Bill Clinton. But that doesn't mean
because of political expediency, you avoid your constitutional responsibilities. And so you asked the question before we broke to Speaker
Pelosi, why would we want all these witnesses?
And I think that there is information process that the American people deserve, which is to hear from witnesses, who the Special Counsel and/or
Congress heard from, but which were behind closed doors so that the American people can understand what happened.
QUEST: Michael, I know that we will be talking many more times as we move all the way through to an electoral process with this. Thank you very much
[15:20:06] QUEST: The market is down heavily. This man, Art Hogan, is going to help me to understand what is happening and why when we come back
after the break, it looks ugly. This may be not as ugly as it looks with the red, but we do need to know why. After the break.
QUEST: Miserable day on Wall Street. It is double trouble for the markets. First, the trade worries. Investors are fearing another
escalation in the battle of tariffs with China. Now we're off over 311 points. There's also a warning from the bond market. The yield on the 10-
year U.S. Treasury has fallen to a 19-month low.
There's an inversion, but it's the shorter end of the curve. That's where the actual -- it's more expensive to lend short than it is long. Art Hogan
is with me, chief market strategist at National Securities. Good to see you, sir.
ART HOGAN IS, CHIEF MARKET STRATEGIST, NATIONAL SECURITIES: Good to see you.
QUEST: How worried are you by what we're seeing? Is this just noise froth off the top? Or are we seeing something? A rotation? A serious
reallocation of risk?
HOGAN: Well, I would say this. I am not concerned about the yield and version yet or certainly not now. I think that one of the problems is
there's a lot of things to be concerned about globally. And when that happens, you tend to have a risk --
QUEST: Tick them off. Which ones globally are you worried about?
HOGAN: U.S.-China trade. What happens in Venezuela? Italy's relationship with Brussels and what could happen in Iran if it escalates. All four of
those things, and what are we talking about the most? U.S.-China trade.
So that's what is most near and dear to us. But all of those things potentially, could force you to get more defensive and by getting more
defensive, the largest and the most liquid market is the U.S. Treasuries. So that demand for U.S. Treasuries is driving down that yield.
We've seen that happen before, it doesn't last for a long period of time. But right now, that's what's causing the inversion. It has nothing to do
with this being a predicate for a recession.
QUEST: We went into this year with everybody saying slow growth, slow growth. There was a revision of that thinking in the first three months,
people thought it might be faster, but now I'm hearing people like yourself saying no, it will be two to three percent if we are lucky.
HOGAN: If we are lucky and a lot of what was assumed in the front end of this year was that we're going to actually successfully have a U.S.-China
trade deal sometime in the first half of this year. And now it looks like we're miles apart from that and maybe that's wrong. Maybe that new
impression is the saber rattling gets the loudest the closer we get to getting a deal done.
But right now, it feels like everyone has to change their numbers because this could drag out to the end of the year.
[15:25:01] QUEST: Listen to the chief global strategist at JPMorgan Asset Management, David Kelly, who you will know told me why people should be
putting -- on this whole question of allocation of risk. He likes emerging markets.
(BEGIN VIDEO CLIP)
DAVID KELLY, CHIEF GLOBAL STRATEGIST, JPMORGAN ASSET MANAGEMENT: The biggest mistake that people are making is that they're avoiding
international. I get it, the dollar has been rising for most of the last five or six years that international equities have underperformed.
But what we're seeing in the United States, and actually, this is true for a lot of developed countries, is we're seeing a slowdown in demographics.
The U.S. economy is not going to sustain 3 percent growth, if it's lucky, if everything goes well, it will sustain 2 percent growth.
But that means, you know, we've got high multiples, the economy has done very well, but it just doesn't have the growth prospects that for example,
EEM has, so I think the next five years, 10 years, EEM will do much better than U.S. equities. I think people need to have money there.
(END VIDEO CLIP)
QUEST: We agreed later that all EM is not equal.
HOGAN: Right, right.
QUEST: And that's the problem.
HOGAN: That is the problem. And how do you play that? You do find an ETF, like the EEM, which is 40 percent China, and right now it is right now
to be that, you know, that loaded up on China.
I think Mr. Kelly makes a very good argument demographically, that probably that argument right now is what is going to keep the dollar from
strengthening from where it is. And if you're going to be an emerging market investor and believe in a strong dollar, then you're at odds with
QUEST: But you need that strong dollar investment as your hedge, because rightly or wrongly, even with U.S. debt, the dollar will rally as a safe
haven, perhaps unjustifiably, but it does.
HOGAN: Right, a hundred percent. And when you think about the things that rally as a safe haven, the dollar is one of those and if that runs counter
to what will help growth in emerging markets.
Typically, they're going to have a lot of dollar denominated debt, they're going to be -- they're going to be needing good commodity prices, which
don't do well in the stronger dollar environment.
So all of the things that you sort of think about that would be great for emerging markets, bounce up against a wall, when you talk about
strengthening the dollar.
QUEST: Later in the program, Jim Rogers is going to be with us today. I spoke to him earlier about the same thing. He was talking about a bear
market. He is absolutely convinced there'll be a bear market within the next two years or so, the likes of which we've never seen before. And I
suggested to him that somewhat perverse when you look at the economic fundamentals. Could a Chinese -- could the continuation of the Chinese
trade war, which I think we all agree it is a war now, precipitates a major correction of that nature?
HOGAN: You could certainly lay out a narrative that would be completely of it --
QUEST: But you buy it?
HOGAN: Yes. Well, no because I think it's -- I think both sides see a mutual benefit at ending this at some point in time. China because of
their economic growth, the United States because we have an election in 2020. Neither one of those is benefited by a mutually drawn out
destructive trade war.
Right now, we're in the saber rattling phase of this. Jim Rogers would be right, if in fact, we went from where we are right now to total escalation.
China pulls out every card in the deck and says, "Okay, you know, rare earth, we're not going to sell your treasuries, we're going to boycott your
goods, we're going to restrict everything in terms of doing business with us." And the United States says the same thing.
But I think you'd need to have that to have the kind of cataclysmic selloff that Mr. Rogers is talking about. Not impossible, because it sounds like
that's what's happening right now. But not intuitive because both sides benefit from making this go away.
QUEST: It looks a bit horrible, though, when you see these sorts of this red across everywhere.
HOGAN: Yes, we're down 5 percent, a little more than 5 percent in five weeks. Every year historically, for the last 45 years, we've had three 5
percent pullback starting out. This is kind of normal, it just feels terrible when we're going through it.
QUEST: Thank you for putting that into perspective.
HOGAN: Thank you so much.
QUEST: I will totting up my 5 percent falls for the rest of the year and come back to you. Thank you.
HOGAN: Thank you.
QUEST: 2020 campaign trails and in the halls of Congress, the calls to impeach Donald Trump are getting louder. We're going to be live on Capitol
Hill. The reaction on the day Robert Mueller finally spoke out loud. It is QUEST MEANS BUSINESS live from New York.
[15:30:00] QUEST: I'm Richard Quest, there's more QUEST MEANS BUSINESS in a moment when Boeing's chief executive takes a moment to wish his biggest
rival a happy birthday, and China is threatening to use rare earth as the latest tool in its trade war with Washington. As we continue tonight, this
is CNN and on this network the facts always come first.
U.S. special counsel Robert Mueller said if his investigators were confident President Trump had not committed a crime, they would have said
so. In his first public remarks on the Russia probe, he said according to policy, a sitting president can't be charged. Mueller's comments are
fueling talks of impeachment amongst Democrats.
Israel could be on the brink of a full blown political crisis. Prime Minister Benjamin Netanyahu is doing last minute maneuvering ahead of a
midnight deadline to form a new government. Should he fail, it could mean new elections next Fall.
Millions of Americans are bracing for more severe weather after nearly two weeks of violent storms. A woman drowned in flood waters in Arkansas on
Tuesday. A tornado injured more than a dozen people in Kansas and caused widespread destruction.
The racing world bid a tearful goodbye to the legendary Niki Lauda on Tuesday. Lauda died last week at the age of 70. His lungs never fully
recovered from a brutal crash he suffered in 1976. The eulogy was delivered by Arnold Schwarzenegger who was a life-long friend of Lauda.
Robert Mueller has broken his silence and his words are reverberating through Washington. The special counsel said he didn't have the authority
to charge Donald Trump with a crime. That's a matter for the U.S. Congress. Moments ago, Nancy Pelosi said her house Democrats are still
finding more information, nothing is off the table.
Jerry Nadler is the chairman of the House Judiciary Committee, he isn't ruling out the prospect of impeaching the president.
(BEGIN VIDEO CLIP)
REP. JERRY NADLER (D-NY): With respect to impeachment question at this point, all options are on the table and nothing should be ruled out. What
special counsel Mueller said loud and clear today for the American people is that President Trump is lying when he says no collusion, no obstruction
and that he was exonerated.
If Mueller wanted to exonerate the president from having committed the crime, he would have said so. Instead, and he says he would have said so.
Instead, the special counsel makes clear that obstruction of justice which he found substantial evidence of is a serious crime that strikes at the
core of our justice system, and that the constitution points to Congress to take action to hold the president accountable. That's exactly what we will
(END VIDEO CLIP)
[15:35:00] QUEST: Phil Mattingly on Capitol Hill. Are the impeachment dogs of war now baying?
PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: You know what's interesting is if you watched that clip that you just played, and Jerry
Nadler very carefully reading off a piece of paper, usually he talks pretty off the cuff to us.
There's a reason for that, and that is the chairman of the Judiciary Committee who would be crucial in any impeachment inquiry and impeachment
process is being very cautious and so is the speaker of the house Nancy Pelosi saying it's not off the table, but certainly saying it's not on the
And the reason why is this, at least, at this point in time, even after what we saw from the special counsel today, leadership, Nancy Pelosi in
particular does not want to move forward on an impeachment inquiry. They want to have broad investigations, they want to keep digging into the Trump
administration, but the concern about how divisive an issue impeachment is, that's still the prevailing theme.
The bigger question right now is actually beneath the leadership level, beneath the chairman level. Those rank and file members, they have
certainly been growing in their desire to launch an impeachment inquiry. How long can leadership, can Chairman Nadler actually keep them at bay,
given the urgency they feel to do something, that is probably the operative question right now, Richard.
QUEST: Why are -- why are Democrat candidates like Kamala Harris baying so much for impeachment when frankly if you do it and you get it wrong, the
backlash could be so serious against you?
MATTINGLY: Yes, which is exactly what explains why Nancy Pelosi is right now. Look, the reason why is they're running in a Democratic primary. The
Democratic base, more than 75 percent of Democrats, usually between 70 percent, 75 percent want to pursue impeachment.
If you're running for those voters in Iowa, New Hampshire, South Carolina, Nevada, you want to line up with where they are, and that's where they are.
I think the difference between what you're seeing from presidential candidates, whether it's Kamala Harris or Cory Booker and the like, and
Nancy Pelosi is -- Speaker Pelosi has a broad 240-plus member caucus.
A lot of those members come from districts that they won in 2018 that were previously won by President Trump. That's what she's concerned about.
There's basically just different kind of focuses, different people that they're trying to reach out to right now, and that explains why they are so
divergent at least at this point in time.
QUEST: So give us an idea, where does the economy play into all of this? We've seen that the trade war with China continues to get worse, there's
lots of bellicosity on both sides. The markets salami slice down. At what point does it become an issue for members of Congress?
MATTINGLY: You know, it's an interesting question. I think there's two things here. One, how the market prices in an impeachment risk to the
extent it exists. And I feel like it's always been kind of out there for a long period of time, and so there's no kind of immediate snap reaction
based on anything public that occurs.
But the disintegration of the potential for getting anything done if they actually pursue impeachment. What does that mean legislatively? When you
say, oh, nothing is really going on Capitol Hill. Well, you have to raise the debt ceiling by September, you have to fund the government by the end
If those things are suddenly because of the political stale mates and political fights on Capitol Hill suddenly seem to be more at risk, you're
absolutely going to see a market reaction and you should. I think the broader question is going into 2020, given the economy that the president
has so thoroughly focused on, at least his advisors have wanted him to.
If there's some type of shift market-wise or some type of shift in the numbers that we're seeing, what does that mean for his broader election,
given that on just about every other issue right now, his approval numbers are certainly below 50 percent.
QUEST: Phil, thank you. Phil Mattingly is on Capitol Hill. Jim Rogers, Professor Rogers, the investor Professor Rogers says the worst bear market
of his lifetime is just around the corner. The billionaire tells me why the bull run is coming severely close to home.
And it all takes on a certain importance when you just look at that number. We're off the lows of the day, but we are still heavily down the fifth(ph)
day session of losses, down about 1 percent or so far.
[15:40:00] (COMMERCIAL BREAK)
QUEST: China is looking for more leverage in the escalating trade war with the United States. Investors are fearing -- now, the various things that
they could do. You heard by the way Art Hogan talking about this, the fear is it could restrict exports of rare earth materials.
This would be absolutely devastating, by the way. These are 17 chemical elements they're in just about every consumer electronics and military
equipment, and China has by far, by far, the vast majority of them within its borders.
It is the non-military nuclear weapon, if you like, the rare earth's part. And Huawei is reviewing its relationship with FedEx, it claims its diverted
parcels destined for Asia to the United States. And Huawei is also pressing on with a lawsuit against the United States.
It says Washington is using the strength of an entire nation to come after a private company. You can get -- you get an idea here of just how bad the
situation is getting. Now, some would say these are skirmishes around the trade war, I happen to think it's actually part of the trade war, and so
these are the battles within it.
Professor Jim Rogers says he's got a plan to navigate the U.S.-China trade war. Now, the investor of course lives in the region, is an expert in its
economics and he's made a fortune investing in EM Asia, Azion for example. When it comes to U.S.-China trade war, the worst is yet to come, says Jim.
(BEGIN VIDEO CLIP)
JIM ROGERS, CHAIRMAN, ROGERS HOLDINGS: Every trade war in history has been a failure, has been a disaster. Nobody has ever won a trade war, there's
no such thing. Now, Mr. Trump either thinks he's smarter than history, we know he thinks he's smarter than history, and he thinks it doesn't matter.
This is not going to be good for the world, but what will happen soon is good news will be announced, Washington and Beijing will announce
something, it will sound like good news, the markets will rally, then next year when things are bad, Mr. Trump will come back with another trade war
and that will be the worst bear market we've had in my lifetime.
QUEST: You see next year -- hang on a second. But you see next year as being the bear market?
ROGERS: I'm not smart enough, watch CNN, they know when the bear market --
QUEST: But what I mean is --
ROGERS: Is coming, but it's coming, it's coming.
QUEST: You believe it is still to come?
ROGERS: I know it. This is not a bear market, you wait, the next bear market and we're going to have one, is going to be the worst in my
lifetime, and I'm older than you, so it's going to be the worst in your lifetime.
QUEST: Predicated on what? What's going to be the cause of it?
ROGERS: Well --
QUEST: Look, let's just split the good -- I've known you long enough that I can be blunt.
ROGERS: Be blunt.
QUEST: Jim, the economy is growing, low unemployment, low inflation, risks are relatively contained, only a fool sits here and says there is a bear
market around the corner some would say.
ROGERS: You finally found a fool to come on your show. The way these things always start, they start when nobody is watching. In 2007, Iceland
went bankrupt, nobody knew or cared. Then Ireland, then Bear Stearns, then Northern Rock, then Lehman.
And by then, it was on CNN, everybody knew there was a bear market. That's already started. Turkey, Indonesia, Latvia went bankrupt, Venezuela,
Argentina, Indian banks, it's already started. It hasn't made CNN yet, but by this time next year it will be on CNN. Why? Well, first of all, it's
been over ten years since we had a bear market, doesn't mean it has to happen, but that's the longest in American history --
QUEST: But --
ROGERS: Longest in American history.
QUEST: What's going to punctuate it? What's going to actually be the precipice of it?
[15:45:00] ROGERS: Well, probably -- well, who knows? But it might be the new trade war after the first peaceful resolution, then we'll have the real
trade war after that, but it's probably debt. I mean, debt is -- you know, in 2008, Richard, we had a problem of too much debt. Since then, debt has
skyrocketed all over the world. So it's much worse now.
QUEST: This is valuable information if one knows what to do with it.
ROGERS: Yes, well, watch CNN, then you know what to do.
QUEST: No, we watch CNN and I'll ask you, what do you do with this information because let's take at the moment, you don't really want to get
out of a market like this at the moment which is in the doldrums because of --
ROGERS: The trade war.
QUEST: Because of trade war. When do you do -- and once you're out of it, what do you do with the money?
ROGERS: Well, I -- my plan, but who knows?
QUEST: Yes --
ROGERS: Is that when the good news comes, there will be a rally, that will be the last rally, that will be the end, and then I hope I'm smart enough
to sell my U.S. stocks and move into something else. Where? Probably China, maybe Russia, Korea perhaps by then. Good things happening in some
places in the world. There's always a bull market somewhere.
QUEST: Are you worried about the inversion in the yield? We've only seen it in a very narrow area.
ROGERS: Yes, and that's why I'm not so worried yet. Normally in history, it has to be inverted for a while, and it has to be really inverted. So
far, it's just piddling around. It's not -- so far it's not serious.
(END VIDEO CLIP)
QUEST: Highly technical word, piddling around. This idea with the bear market that's coming inevitably, and by that I'm talking about a really
serious message, I don't mean a salami slice --
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, he says the worst in our lifetimes. And 2008 was pretty darn bad. So if it's going to be worse
than that, that's pretty scary.
QUEST: But I just don't know what to make -- I mean, Jim has made a lot of money by being right and being contrarian and being on the wrong side of
the right argument or the right side of the wrong argument, I don't know which it is. What do you make of it?
LA MONICA: Yes, I mean, he has a point about corporate debt levels. A lot of people are worried about the rising debt loads for companies that are
not in the financial services industry. I mean, everyone looks back to 2008 and says it was the banks who were the big problem.
We're probably not going to have the banks lead us into the next recession, whether or not that becomes a global financial crisis also remains to be
seen. But there are a lot of other companies that are highly leveraged and that could potentially be a problem. But by the same --
QUEST: But --
LA MONICA: Token, interest rates are low and are not going to go up all that dramatically, so I'm not sure when the debt-ticking time bomb, if you
want to call it that, actually explodes when now everyone --
QUEST: Right --
LAMONICA: Expects the Fed to be lowering rates.
QUEST: And I also know, fully understand them, it seems almost perverse to dis-invest out of the market which could go up another 15 percent whiles
you're out of it on a prayer and a whim, whatever, that there might be a bear market. And I don't know.
LA MONICA: Yes, I mean, it is, I think, a very dangerous thing to do if you're trying to invest for the future to stay out of the market because
you're worried about that bear that might eventually come. Yes, they are going to periodically come, but you also have the bull markets as well.
I mean, if you use that as a sort of philosophy, then that's kind of like, well, I'm going to die some day, so I guess I'll just stay in bed. I mean,
where is the fun in that?
QUEST: The market, look at it, we're off the lows of the day, we've rallied somewhat. But there's no real reason for this today.
LA MONICA: No, I think there are just continued concerns obviously about what's happening between the --
QUEST: Right --
LA MONICA: U.S. and China, the lack of any evidence that there's going to be a deal struck at whatever the last hour may be to avoid a full blown
trade war. I mean, we're pretty much already there and I think --
QUEST: We are in a trade war.
LA MONICA: We are in a trade war --
QUEST: I don't --
LA MONICA: We don't need to piddle around anymore --
QUEST: No, we don't need a --
LA MONICA: And say it's a skirmish --
QUEST: No --
LA MONICA: Or a battle --
QUEST: No --
LA MONICA: We can call it a war.
QUEST: If this is not a trade war, what would you like?
LA MONICA: I wouldn't like this, so I definitely don't want things to escalate.
QUEST: Good to see you, sir. After the break, Boeing set aside old rivalries and congratulated Airbus, clocking up an aviation milestone.
We'll offer to show you developments in the 737 Max crisis and when that plane might get back in the air. It is QUEST MEANS BUSINESS live from New
[15:50:00] (COMMERCIAL BREAK)
QUEST: Developments to bring to your attention in the aviation duopoly between Boeing and Airbus. The 737 Max is unlikely to return to the skies
before August according to the IATA, the International Air Transport Association. The regulators will have the final say on that date.
Meanwhile, Airbus is celebrating its 50th birthday with a private fly-pass from its Toulouse base. Now, it was a pretty low key. The company is
grappling with management upheavals. You remember of course the A-300; the first plane that they brought out, that's long since gone.
And then of course became the 320; the narrow-bodied and all the other planes, and of course in the different national colors of the aircraft. So
looking at a 350. Magnificent. You can always tell a 350 of course by the curve of the wing and the sunglasses on the -- anyway, no, that's what
we're saying, Airbus did get a pat on the back from Boeing.
The CEO Dennis Muilenburg sent his arch rival congratulations on Twitter. In New York, Mr. Muilenburg described the Max prices as a defining moment
for Boeing. However, he remains confident that the two fatal crashes haven't hurt the company's long-term growth prospect.
Clare Sebastian joins me to talk about it. So the Max --
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes --
QUEST: They've still got to get the FAA to sign off before they can then do the certification flight.
QUEST: And only then -- of course, you've then got this problem with all the other international regulators.
SEBASTIAN: Absolutely. The CEO of Boeing today, Dennis Muilenburg was speaking in New York, he said there's still no clear timeline, he said
they're working on an hourly, daily basis with the FAA. But we know that they haven't actually officially submitted the software fix to the FAA yet,
they're still involved in a dialogue of a back and forth with them.
The FAA has told us that, that's normal. But of course, the wild card here is not just the FAA, Richard, it's the global regulators as well.
Muilenburg said he hopes they will be broadly aligned, but if they're not, that could push out the time and even further to get this fleet off the
QUEST: But that's why the FAA has put together this college of regulators constantly inviting them in, which is very -- which is unique, but the one
thing they don't want is the EASA in Europe and the Japanese and the Australians, all to say, well, we're not happy. They want to speak with
one voice. Can they do that?
SEBASTIAN: Right, I think there's a lot of stake for the FAA here as well, Richard, don't forget they were the last ground to the flight, they may be
the first to recertify it. EASA and the Canadian regulators have already come out and said, they want, you know, independent guarantees that the
safety of this plane, they're not going to be beholden to what the FAA does.
But it remains to be seen. There may be training issues as well. The FAA hasn't said yet that they want, you know, extra simulator experience for
these pilots. The other regulators might want that. And again, that could really extend the timeline for this.
[15:55:00] QUEST: Watch -- reading what Muilenburg was saying, there still doesn't seem to be an air of we got it wrong or this was a problem or
we should have known better. At some point, is there going to be a mea culpa from Boeing?
SEBASTIAN: Yes, that was definitely missing today, Richard --
QUEST: Are we ever going to get it?
SEBASTIAN: I mean, I think if they hadn't done it yet, I don't see that they will. They said, you know, repeatedly the refrain from him was that,
you know, the key for the company now is to get the plane back flying and to do it safely. He said that, you know, very much on message before he
commented on anything about the company's financials or about other success stories going forward.
And so, you know, that is the message from the company at the moment, the key priority is to get the plane back in the sky safely.
QUEST: Moving to the markets, thank you. As we've shown let's go and oh, and talk this. What a sea of red there is. Johnson & Johnson is having a
horrible day, maybe this is probably the delayed reaction, we didn't see yesterday to the opioid trial. Now you are seeing delayed reaction down
4.5 percent, awful for them.
Boeing is off in the terms of the general market that is sharp. Three that are up all for individual reasons, but not very much. The growth -- the
gains are minor, the losses are considerable. And although we are well off the lows of the day from just before 12 O'clock when I was with you with
the "EXPRESS", as you can see, it's still going to be a down day when the closing bell rings after our profitable moment in a moment.
QUEST: Tonight's profitable moment. So Airbus celebrates 50 years and Boeing congratulates. Airbus has done a phenomenal job. Now, look, we can
argue about whether they've got government subsidies and help from the Germans, the British, the Spanish, the French, yes, they did amid the long
argument that's really not worth it.
But from the 300 through to the 320 series through to the 380, which I still love the whale of a plane, there's no doubt that Airbus was needed.
There had to be something that would compete against McDonnell Douglas which then part Boeing and then part Boeing.
And they've done so extremely successfully. But it is now time for Airbus to stand on its own two feet. The duopoly is complete with Embraer and
Bombardier moving there, short, tall planes into that. And now, we wait to see how they battle it out post-Max.
What's impressive is the way that Airbus has made no hay of Boeing's misfortune. And that's QUEST MEANS BUSINESS for tonight, I am Richard
Quest in New York, whatever you're up to in the hours ahead, I hope it is profitable. A down day on the Dow, the bell is ringing, the day is done!