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QUEST MEANS BUSINESS
President Trump Imposes Hard-Hitting Sanctions on Iran; Turkish Opposition Candidate Wins Mayoral Vote Re-Do; Bitcoin Rallies Past $11,000. Aired 3-4p ET
Aired June 24, 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: The markets and how they are trading, we are an hour away from the closing bell on Wall
Street. You can see the gains of the day, we are still up but barely and things have evaporated towards the end. We might just end up positive.
Those are the markets. And these are the reasons why.
Donald Trump put sanctions on Iran's Supreme Leader and that puts pressure on the country's crumbling economy. How much pressure? We need to
discuss. Caesars Palace has a brand new owner after its rival goes all in. And Bernie Sanders says Wall Street bankers can help pay off America's
giant student debt.
Live from London. It is Monday. It is the 24th of June, I am Richard Quest, and of course, I mean business.
Good evening. We begin tonight with the United States and the President Donald Trump who is turning up the heat on Iran with a new wave of
sanctions. He called them hard hitting. They target Iran's Supreme Leader amongst others, and they block his access to international financial
resources. The U.S. Treasury Secretary says billions of dollars have now been locked up.
During the announcement, the President offered both carrot and stick to Iran.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: I think a lot of restraint has been shown by us, a lot of restraint. And that doesn't mean
we're going to show it in the future. But I felt that we want to give this a chance, give it a good chance. Because I think Iran potentially has a
(END VIDEO CLIP)
QUEST: Michelle Kosinki is at the U.S. State Department. It's very weird. He talks about the huge potential of Iran. And as you and I were talking
earlier in the day about the possibilities, but at the same time, these sanctions, however symbolic, will be damaging.
MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: Yes, and it sounded like a lot of the same language he uses when he talks about North
Korea. In fact, he then brought up North Korea kind of on this riff on U.S. policy towards these rogue states.
So you're right, the U.S. wants to crush the Iranian economy to the point that the Iranian leadership has no choice, but to come back to the
negotiating table, and at the very least get in touch with the United States.
But U.S. actions, the tightening of sanctions up to this point has just made the hardliners dig in even deeper, seemingly more determined than
ever, not to go back to the negotiating table. To some extent, at least, they have U.S. allies on their side on this.
They feel like they can, you know, worst case scenario, ride out the Trump administration, if this is going to be the end with this term. So there we
are, I mean, U.S. allies see U.S. actions as bringing us to the point of tension where we are today.
They see a direct line between the ratcheting up of sanctions and all of the other designations that U.S. has done, and this kind of impasse where
we find ourselves, Richard.
QUEST: And the idea that Steve Mnuchin suggested afterward that Javid Zarif, the Foreign Minister would also be sanctioned. Do we have any more
confirmation that that was the Zarif they were talking about? And, of course, the damaging effects of effectively getting into any diplomacy.
KOSINSKI: Yes, well, it seems that way at this point. And over the past couple of days, we've been seeing this ugly Twitter back and forth between
Zarif and the President and his administration. So that's what we think is going to happen.
Mnuchin said that that was going to happen this week. So this is highly unusual to sanction a leader of a country, a head of state that is
The U.S. has only done it a small handful of times, to sanction a Foreign Minister who is supposed to be the envoy, the source by which you can
actually conduct any kind of diplomacy with another country where things are not going well.
[15:05:12] KOSINSKI: This is highly unusual, so the U.S. is banking on tightening the screws, being the key to get back to some place of
negotiation, but it seems like the Iranians see it absolutely differently.
QUEST: Michelle, thank you. Michelle Kosinski at the State Department with that part of the story, but in a press conference shortly after the
order was signed, U.S. Treasury Secretary Steve Mnuchin touted the impact of the penalties on Iran that they've had so far.
(BEGIN VIDEO CLIP)
STEVE MNUCHIN, U.S. TREASURY SECRETARY: There's no question these sanctions have been very effective in cutting off funds going to the RGC
and other people. And I can only presume -- I am not going to presume why they're doing things, but these are highly, highly effective on locking up
the Iranian economy.
And as the President said, we look forward to a time in releasing sanctions if they're willing to negotiate.
(END VIDEO CLIP)
QUEST: Now, the question is how effective those sanctions have really been? The impact on Iran's behavior? It is hard to measure. And
certainly, of course, you can do it much easier when you look at the Iranian economy.
Now, Iran -- the IMF predicts that the Iranian economy has shrunk by roughly six percent this year. It also forecasts inflation could reach
some 40 percent. Our senior international correspondent Fred Pleitgen is in Tehran and CNN's global economics analyst and "Financial Times" global
business economist, Rana is with us. Rana Foroohar is in New York.
Fred, let's talk to you before we get Tehran and to put things into perspective. From -- on the ground, the existing sanctions are having an
effect. Tell me how.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: I would say that the biggest effect of the sanctions are having so far is on ordinary
Iranians, Richard. If you go around here in Tehran to the markets, and if you look really at the economic data as well, and all the people that we've
been speaking to, a lot of them will tell you look, they lost their jobs, a lot of them have lost their incomes.
Many people also don't really see an economic way out of this anytime soon. You also have the currency, which of course has been tumbling, and then you
have the oil exports, as well.
Now, as far as the U.S. saying that all this has in any way, shape or form altered what the Iranians are doing, very difficult to say. There might be
certain instances where maybe as far as their foreign operations of the Revolutionary Guard, maybe things have changed.
But the big question is, you know, the Revolutionary Guard is also an organization that's very good at adapting to new situations and the big
question is, how much of a long term effects will the sanctions have on their foreign operations in places like Iraq, Syria, Lebanon, and other
places as well and whether or not they're already working on ways to try and get around it.
Certainly, on the one hand, you have the administration saying that these sanctions are having an effect on Iran's behavior already, and on the other
hand, the administration is saying that they believe that Iran is causing a great deal of instability in the Strait of Hormuz, in the Persian Gulf and
in neighboring countries as well. So the big question is, what exactly is it of those two?
Now, of course, one of the big things that the Trump administration wanted to achieve was getting the Iranians back to the table. And I think what
Michelle Kosinski was saying describes the fundamental disconnect between Tehran and Washington, D.C., which is that the United States says -- the
Trump administration says they want to bring the Iranians back to the table through sanctions. The Iranians are saying sanctions mean, they're not
coming back to the table, Richard.
QUEST: All right. So that that that is that fairly clear cut, it ain't going to work. Rana, from a geopolitical point of view, factoring it --
we've already heard the economics. But what's the point if the Iranians or if it's just going to dig them further?
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: You know, the U.S. has never done a great job of understanding Iran or the Middle East in general,
frankly, but particularly Iran.
I mean, the Iranians really do view themselves as a regional power, they want to become more powerful in the region. They've been hit hard by the
sanctions already. It is hard to imagine how much more damage they could do that would really change the political situation that might require
But you know, if you go back to Donald Trump's campaign promises, one of the most popular and clarified point that he has ever made was that he
didn't want to get into costly wars.
You've also got to factor in the role of China here because China is increasingly an actor in the Middle East. They're very interested in
Iranian oil, and the U.S. and China are in a trade and tech dispute themselves.
So how is that going to play in? A very, very dangerous line that Trump is walking? And it reminds me again, of a great geopolitical expert I once
spoke to that said, "This guy can disrupt, but he can't close."
QUEST: Right, now, Rana, you stay with me. Back to Fred, on this particular one, Fred, the President said time and again, that he will not
allow Iran to get a nuclear weapon. That is that the red line, that is the ultimate red line.
So to some extent, that's all what this is geared towards, but you get the feeling that if Iran does get close, then it's bets off for this President.
[15:10:06] PLEITGEN: I'm sure it would absolutely be bets off for this President and probably for the international community as well. But I
think there's several things that the Iranians would counter to that.
On the one hand, the Iranians are saying, look, if you don't want Iran to have a nuclear weapons program, and Iranians actually didn't have a nuclear
weapons program before they had the nuclear agreement, then the nuclear agreement was in place to prevent that.
There were checks and balances. There are still checks and balances, because the Iranians are still abiding by the nuclear agreement. So the
Iranians will say from that vantage point, look, there's never been more oversight over Iran's nuclear program than there is right now.
On the other hand, the Iranians will say, look, the Supreme Leader has said that Iran does not want nuclear weapons. They say for religious reasons,
that's not something that they want.
President Trump alluded that today. He said, those are all words, he would like to have more oversight and he would like to make sure that that's
really the case.
But the other thing that that the Iranians have also said, and I think this was interesting, was also the Supreme Leader. I think about a week ago, he
said, if Iran really did want a nuclear weapon, there really isn't anything the United States could do to prevent them from getting a nuclear weapon,
whether there are sanctions in place or not.
They have centrifuges, they have the scientists. It's something that they say they could do if they really wanted to. But at this point, they say
it's simply something they don't want and they say with the nuclear agreement, you at least have a degree of oversight over their program --
QUEST: Fred Pleitgen in Tehran, Rana, stay with me for a moment or two. We have more duty for you to do on economic matters in a second.
Now Bernie Sanders, the socialist Democrat hoping to run -- well, to be the nominee for President is proposing a sweeping new Robinhood tax.
His arrow is aimed at eliminating $1.6 trillion in student debt, an ambitious plan that would impact around 45 million Americans.
Now the bow is a Wall Street tax, a tax on speculation, a trading tax. We've seen these sort of things before. A half a percentage point on stock
trades and smaller fees on bonds and derivatives.
The White House is the target. In the Democratic field, Sanders is sitting in the second place in most polls to stake on Donald Trump next year.
This plan goes further than any of his rivals to address the student loan crisis. If you want to join the conversation, out the phones, please or
devices, digital devices -- cnn.com/join. Who should bear the cost of writing off student loans? The government? Wall Street? Or the students
In other words, should students pay for their own education? Go to cnn.com/join, vote. We'll see the results. We will talk about them.
On Capitol Hill, Bernie Sanders said Wall Street bankers owe the American taxpayer a debt for bailing them out in the financial crisis and this
transaction tax is how they can repay.
(BEGIN VIDEO CLIP)
SEN. BERNIE SANDERS (I-VT), PRESIDENTIAL CANDIDATE: Ten years ago, because of their greed and illegal behavior, Wall Street banks were on the verge of
collapse and the United States Congress with taxpayer assistance came to their aid.
Well, now we've got millions and millions of families in this country who are struggling with outrageous levels of student debt and maybe instead of
just worrying about Wall Street, we start worrying about those families and that generation and give them a break.
(BEGIN VIDEO CLIP)
QUEST: Ryan Nobles is our Washington correspondent, how popular is this? Writing of $1.6 trillion in student debt. And by the way, the concept of
student debt is not exactly unknown in the rest of the world. But virtually nowhere else in the rest of the world ends up with as much
student debt as you do.
RYAN NOBLES, CNN CORRESPONDENT: Yes, I think you're right about that, Richard. And I do think that among millennials, a big part and an emerging
part of the American electorate, it is going to be a very popular proposal. They are dealing with student debt in a way that their fathers, mothers and
grandparents were not dealing with and that's part of Bernie Sanders' argument here today that the $1.6 trillion in relief that he is offering
them is a necessity because of how much the cost of education has skyrocketed in the United States and how much the student loan industry has
ballooned over that given time.
But there are certainly critics of this plan. You know, there are many Americans who worked very hard to pay down their student debt and get it
taken care of on their own and they're asking where is the assistance that we're going to get?
And there's also certainly a sector of the financial industry that's asking, why are you implying that this money should come from our sector in
order to pay for it?
But the one place that it's going to be very popular for sure is going to be in the Democratic primary electorate and that is specifically who Bernie
Sanders is targeting here.
Elizabeth Warren, who right now has become a Sanders chief rival in the Democratic primary process had already put out a plan like this, but --
QUEST: Right, okay.
NOBLES: Sanders has gone much further than she has in saying that basically, if you have college debt, he wants to get rid of it.
QUEST: Ryan, thank you. Ryan Nobles. Rana is still with me in New York. I was just and I was listening to Ryan closely and I just wanted to --
[15:15:10] QUEST: Do you know what the undergraduate tuition and fees, well, not only few years ago -- I've got the up to date fees for Harvard.
FOROOHAR: I certainly do. I have a daughter who is about to -- and I am outraged. We are talking about $70,000.00, Richard, if you don't get aid,
and guess what the average American student graduates with about $30,000.00 of student debt?
So I'm going to argue that yes, we do need some student debt write down. It's interesting. The New York Fed actually published a piece of research
last year showing that student debt was actually a headwind to overall economic growth because these kids are graduating. They can't afford
anything. They can't afford homes. They can't afford to buy anything. Now, who should pay for it is another question?
QUEST: Wasn't it always the intention though that student debt done through the various state enterprises, the various banks backed by the
government would always be at a lower interest rate. The idea was a concession re-rate for students?
FOROOHAR: Well, you're bringing up a great point. A lot of people think that the interest rates which are not particularly flexible are too high.
And actually you have some FinTech startups coming in and trying to disrupt that paradigm.
But to be honest, there's a different problem here, and it's the arms race and fees in American schools. I mean, you made this point earlier, no
other country in the world has a system like we do where you have to pay $70,000.00 a year to send your kid not just to Harvard, but to pretty much
any private four-year school.
This is something that -- forget about the poor not being able to pay, but the middle classes can't pay for.
I, by the way, I think Sanders is being rather clever because you can also make a strong argument for a financial transaction tax, a lot of people
would like to see that for completely separate reasons to get rid of speculation, short termism in the market, linking those things together.
That was very interesting. It's really going to feel the kind of populism and voter divide that we saw in 2016, I think.
QUEST: The problem though, is you can link a transaction tax, and so- called greed on Wall Street. You can link it to anything. You can make an argument. You can link it to better healthcare, you could link it to
veterans who allowed, you know, these banks to survive. You can link it to better housing.
I mean, what sacredness comes with education from Bernie Sanders' point of view that that should be the one to have the transaction tax?
FOROOHAR: Well, this is the question, and clearly this is a political move. I mean, this plays so well with his base, Richard. You know, you
think about the average 20-something coming out in the job market since 2008, weaker than average job market that impacts their lifelong earnings.
They've seen the hypocrisies of our system all around them. They are going to buy this message. I think it's a very savvy political message.
QUEST: Which school did she get into?
FOROOHAR: We're applying. Fingers crossed. I'm just glad I've been saving in the 529 although who knows if we have a debt write down, maybe
that'll be a bad thing.
QUEST: I'll buy the coffees when I am back in New York.
FOROOHAR: Thank you.
QUEST: There you are. Good to see you. Good luck.
FOROOHAR: Thank you.
QUEST: Good luck with applications. It's QUEST MEANS BUSINESS. Tonight, we are in London. Still to come, Eldorado Resorts is taking a gamble.
It's buying a rival. It will create the biggest gaming company in the United States -- Caesars Palace. I'd say -- it is an orgy to excess. But
you've got to go there once and see it. QUEST MEANS BUSINESS.
Also, the Malaysian Prime Minister has been talking to CNN about the disappearance of MH 370. Some new reporting points a critical finger at
the former government of Malaysia. The Prime Minister's comments, next.
[15:21:28] QUEST: New developments in a mystery that continues to stir intense speculation.
Malaysia's Prime Minister has told CNN it is possible Malaysia Airlines Flight 370 was hijacked. Now, it's more than five years since the plane
vanished as it flew from Kuala Lumpur to Beijing, 239 people on board disappeared with the plane and are presumed dead.
The Malaysian government's role in the investigation is also under scrutiny. An article from "The Atlantic" magazine, which is heavily
critical of Malaysia's authorities.
CNN's John Defterios has been speaking to the Malaysian Prime Minister and started asking for some response to the idea and perception that the
investigation was bungled by the Malaysian government.
MAHATHIR BIN MOHAMAD, MALAYSIAN PRIME MINISTER: I think not only Malaysia but Australia and America and many other countries, but despite that, in
the search for debris and things like that, and they never found anything.
The plane that size with passengers simply disappeared. I think something has happened which some people might know but are not telling.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Do you think you will get to the bottom of it in your time in office?
BIN MOHAMAD: You know, I read the "Flight International," a very reliable magazine. In 2006, "Flight International" reported that Boeing was given a
license to take over a plane in flight. This is reported. I am not accusing Boeing but the capacity to take over planes in flight is
And somebody might use it. Maybe not Boeing, maybe somebody else. They can take over a plane fly to other places, and --
DEFTERIOS: So you're suggesting that the system might have been hacked?
BIN MOHAMAD: It might be. It might be. Nowadays, you can do wonders with electronics and the new devices that we have.
DEFTERIOS: That is cybersecurity broken in a massive scale if that was the case.
BIN MOHAMAD: Well, it could be. It could be. Why not? There are lots of things that are happening today, which we had never thought of before.
QUEST: Now, David Soucie is former F.A.A. and Safety inspector and the author of the book, "Malaysia Airlines." He is also CNN's safety analyst.
He joins me from Denver, Colorado.
A couple of points, first of all, on the Boeing question and Boeing being able to take over a plane. When I did my research and looked at it, Boeing
specifically denied. I asked them outright, they specifically denied that they have the capability or had ever sought the capability to take over a
plane in flight.
DAVID SOUCIE, CNN SAFETY ANALYST: Yes, what he is referring to, Richard is a report in 2006 that came out that was saying that the safest thing to do
in a case -- and this was back when we were talking about major problems with people getting in the cockpit, things like that -- that had to be --
that was one of the options they looked at was can we just take over the aircraft and have the pilots not have any responsibility for what's going
on the airplane and just bring it home? That was ruled out very quickly and no, that capability does not exist.
QUEST: The Prime Minister there talks about people knowing things more than they should and all of those, but he is in a position to know what
Malaysia knows that they haven't revealed. All he's got to do is ask for the files. It's a weird form of construction that he is putting on it.
SOUCIE: It is. It is bringing into question things that are simply not questionable. We know how long it took for Malaysia Airlines or for
Malaysia, the government to respond to get search crews out. We searched in the -- they searched in the wrong area for six hours before they
realized it had gone the other way.
[15:25:10] SOUCIE: So this was botched. There's no question in anyone's mind, even in the "Flight International," it refers to that a little bit.
So I really don't see what he's trying to do other than bring question about to divert attention away from this article, it puts them in bad
QUEST: And the other -- I mean, the other thing, of course, is still, the Ocean Infinity search, which when it was finished, the Malaysian government
refused to renew or at least, was reluctant to renew the license, even though I understand the company was prepared to go back out and continue
SOUCIE: They most definitely were prepared to go back out and search more. Their contract, was really a no risk contract for Malaysia. They could
have continued it. The costs and expenses were only incurred if the aircraft was found. So there's really nothing to lose for them to allow
that thing to continue other than why are they -- are they hiding something? Do they not want something found?
QUEST: What do you think, David? I mean, you wrote a book, I wrote a book. I think we both sort of agree, at least, that the mechanical option
remains on the table. The latest "Atlantic" article, which you will have read pretty much says he does not believe in the mechanical and he puts the
whole thing firmly and squarely on Captain Zaharie.
SOUCIE: Yes, I think that's unfair, Richard and as you mentioned in your book, you clearly say that there's two sides to this, as well as I do in
ours. In my book, too, there's too little known. There's no way that anybody can put anything squarely on anybody. There's no questions
answered at this point. So I really think it's unfair to continue to put this on Captain Zaharie without firm 100 percent evidence.
QUEST: David, good to see you, as always. It looks like it's a nice day in Colorado. Thank you.
SOUCIE: You, too, Richard.
QUEST: As we continue tonight, you and me -- after the break gambling in the business world. Eldorado is buying Caesars and creating America's
largest casino business.
[15:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I'm Richard Quest, a lot more QUEST MEANS BUSINESS in just a moment when I'll be
speaking with chief executive of Brazil's GOL Airline about how he's working to make his 737 Max jets safe again. Bitcoin supposedly back or at
least it's showing its head above the parapet.
The cryptocurrency is above 11,000, as you and I continue, this is CNN and on this network, the facts and the news always come first. President Trump
says he's imposed a hard-hitting new sanctions on Iran in part to retaliate for the downing of the U.S. drone last week. The sanctions target around
the supreme leader and its top diplomats and military officials.
Iranian Foreign Minister Javad Zarif said it's clear the Trump administration has, in his word, "thirst for war". The man described as
the ringleader of a failed coup in Ethiopia over the weekend has been shot and killed on Monday while on the run from authorities. He was a brigadier
general in the Ethiopian army.
Two celebrations in Istanbul after the opposition dealt a blow to the Turkish president and his ruling party. The candidate lost redo election
for mayor by a big margin. The new mayor-elect who represents a secularist opposition party has called it a win for democracy.
A British television debate planned between the two candidates fighting to become the country's next Prime Minister has been canceled after Boris
Johnson refused to take part. Calls are growing for him to fully explain an alleged dispute at the London home he shares with his girlfriend where
the police were called. Johnson has avoided any questions about it.
The first match of the knockout stage was a lot closer than expected for team USA at the women's World Cup. The star midfielder, Megan Rapinoe
scored twice on penalty kicks to help the U.S. advance 2-1 over Spain. The favored Americans will next face the host France in the quarter finals.
Place your bets, ladies and gentlemen and a warm welcome to the QUEST MEANS BUSINESS casino where we will spin the wheel of fortune. El Dorado Resorts
is buying Caesar Entertainment to make the biggest gaming company in the world. Now, the deal is in cash and stock, thank you.
That's number one, $17.3 billion deal. It includes Caesar's mountain of debt which is $9 billion of that, and El Dorado pulled the lever -- will
buy Caesar's for $12.75 a share. It will create a giant with 60 casinos across 16 states. Caesar's stock was up 14 percent, El Dorado's slumped 13
percent. Paul la Monica joins me now.
Paul, we need to understand in this environment of these numbers. Caesar's was up, El Dorado's is down, what's the un-denying -- underlying dynamic
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, El Dorado buying Caesar's which is the much more well-known name and that's why Richard, Caesar's
name will survive if this merger does wind up, you know, getting approved. And I think what's really interesting here is that it has the backing of
Carl Icahn who stands to be among the biggest winners in this deal.
He recently got three of his affiliates on to Caesar's board. He was pushing for a deal, parts of Caesar's did go bankrupt a couple of years
ago, it has emerged now. But what I'm really fascinated by is, as you pointed out, this is going to be a gaming colossus in the U.S., but it
doesn't have the exposure to some international markets, particularly Macau that rivals like Las Vegas Sands and Wynn Resorts and MGM has.
So, I'm very curious to see whether or not Caesar's is going to try and go after that market next since that really seems to be where a lot of the
opportunities are for the gaming business right now.
QUEST: Right, but the -- I mean, Macau, particularly, of course is very much one of those places, but Caesar's has a -- has a cache, doesn't it? It
has a name, it has the boxing, it has -- you know, I remember the first time just as I was a student, I could barely afford my right through the
front door, but I went to Caesar's.
[15:35:00] LA MONICA: Yes, I think Caesar's does have that cache. When you go to Las Vegas, you go to Caesar's Palace even though a lot of the
newer casinos are more glitzy now, I think there is something to be said that this is one of the well-known preeminent names in Las Vegas, you think
of all the great boxing matches --
QUEST: Right --
LA MONICA: That have been held there, so there's that cache, I think though that, you know, the gaming business is increasingly global and there
are a lot of affluent, Asian gamblers going to Macau. This is a market that I think Caesar's has to get in at some point.
QUEST: It's extraordinary when you go there, absolutely extraordinary. Paul, before we go -- let you go, look at the markets, let's get your take
on it. The Dow isn't far away from a new record high, it's only a few dozen points often, it's mostly flat in the last hour of trading.
Investors are waiting for the big meeting between the president, U.S. president and the Chinese leader at the G-20 later this week in Osaka.
They want to see if there's a new trade war. But what is the underlying dynamic of the market at the moment. It is surprising with such
uncertainty that almost by stealth and without you noticing, the S&P and the Dow just about back at records.
LA MONICA: Yes, I think we've noticed and a bunch of people definitely have the mindset that this is a market that might be a little ahead of
itself because you do have all those concerns about what's going to happen at G-20. But underpinning right now for stocks is that we know the Fed is
the market's friend.
Jerome Powell pretty much made it fairly clear that unless there is a major breakthrough, I think, regarding trade that, you know, boosts the global
economy and stock markets even --
QUEST: But --
LA MONICA: Further, you're probably going to get a rate cut in July. Whether or not it's needed is a question for open debate, but the market
obviously would like it.
QUEST: But Paul, the -- if the Fed is once again the only game in town and it is the Fed put on the market that's pushing this thing higher. Earnings
certainly are -- I mean, I was reading a report today that earnings are disappointing and they don't look like they're going to get much better.
So, you're saying the Fed is the game in town, the only game in town to make the metaphors without gambling.
LA MONICA: Yes, I think it probably is. I mean, you could argue obviously the ECB and other central banks as well. But you're right, Richard, I
mean, I'm seeing --
QUEST: Right --
LA MONICA: Estimates, that second-quarter earnings for corporate America, S&P 500 likely to be down from a year ago, and that also third-quarter
results could show a decline. So, that would be three straight quarters of a drop in earnings, but the market still near all-time highs, that pretty
much does speak to the fact that Jerome Powell, the market likes him even if President Trump isn't the biggest fan for whatever reason --
QUEST: Principle, thank you very much, good to see you, thank you. When we continue, GOL CEO joins us after the break. GOL has more than 177 Maxs
on order, he's already had to ground several of them, obviously. We need to know what he wants from Boeing as this crisis continues of the 737 Max.
[15:40:00] (COMMERCIAL BREAK)
QUEST: Well, the 400th airline pilot who flew the 737 Max planes are now suing Boeing, accusing the company of putting profits ahead of safety. The
plane was grounded after the -- around the world after two crashes totaling 346 deaths. After the first crash, the CEO of GOL told me he has complete
confidence in Boeing.
Now, the airline has seven 737 Max planes in its fleet, more than a hundred Boeing aircraft on order. Paulo Sergio Kakinoff joins me now from New
York. Good to see you, sir, and first of all, let me apologize to you, I know we would love to be with you in New York, but I'm here in London on
The 737 Max, obviously, you will be watching and waiting like others. What is it you need to hear from Boeing to make you comfortable with putting the
plane back in the sky?
PAULO SERGIO KAKINOFF, PRESIDENT & CHIEF EXECUTIVE OFFICER, GOL: Hi, Richard, so thank you very much for this opportunity. Actually have been
kept posted by Boeing since the very first day of the accident. And we have followed all the recent developments in the products and in the
software. We are pretty confident that the plane is already able to fly again, it's a matter of time to have the regulators allowing us to do so.
QUEST: And in terms of your own -- your airline's claim basically for compensation, not only for the loss of the use of the existing aircraft,
the extra costs of other aircraft you've had to bring in and of course, the loss of the other aircraft. Assuming -- has Boeing said how much they'll
KAKINOFF: Actually, we have all the contracts already protecting us in such kind of events. This tragic accidents happened exactly in the
beginning of a low season in Brazil, so we have not been affected by revenue reductions while we have been also able to operate the same fights
with the current 77 MG fleet.
So, we don't believe that is going to have any kind of friction with Boeing because the additional cost related to this grounding period is really
QUEST: OK, let me tell you maybe -- where do you stand on the idea of pilots having to re-train on the sim to fly the Max, because if they do
that, if that is a requirement, then obviously that will delay your pilots being able to take the new aircraft and you'll have to put them through
another six months of training -- three, six months of training. So, are you -- do you believe that they should re-train on the Max in sim?
KAKINOFF: Actually, it took this opportunity of having the planes -- the planes being already grounded to re-train all of our pilots. It's
important to manage on that. We had a trainer then much earlier the first accident, comparing the two projects with the two pilots, I'm sorry, will -
- and together with the Brazilian sea view of the Asian authorities.
We decided that the MCAS system was among several other differences that deservedly should be properly trained. So, I think that where our pilots
were well prepared for a deal with such kind of new systems, we are now taking this opportunity of having the planes grounded. To re-train them
and therefore, I believe that even if further training would be requested, we -- it's not going to take much time to have all of our crew members
being -- attending these additional requests.
QUEST: We look at your airline, I mean, the Brazilian -- the Brazilian market -- well, the Brazilian economy ain't doing that brilliant at the
moment, and that of course has its own issues and problems for the country's airlines. But it is an airline industry that is -- in Brazil and
in Latin and South America, it is particularly brutal, that is often noted by airlines and having financial difficulties. How bad is the economy in
KAKINOFF: You know that we went through the worst economic recession in Brazil along the last four years. Fortunately, that period seems to be
gone. And you know, we are Brazilians, we've got to use it to face volatility. That brought us a kind of resilience mode that made our
company so successful.
We achieved the market leadership exactly within the crisis period, and now we're holding 37 percent of the market and we have further developed our
business model in order to face any kind of further surprise that could come up.
[15:45:00] But I need also to tell you that there is a clear optimism toward an up-cycle which seems to be ahead of us. You know, Brazil is
living quite low inflation rate at the moment considering the Brazilians and others. We have also a low prime rate and then finally, a positive GDP
ahead of us.
There is a public -- fought and the politician seems to be committed to reform our pension fund scheme, the public pension scheme which is probably
allowing us or --
QUEST: All right --
KAKINOFF: Unleashing the clear potential of our country. So, I believe there is clearly an up-cycle head of us.
QUEST: Good to see you sir, and thank you, always nice to have you on the program. Please come back again, thank you.
KAKINOFF: Thank you very much, will do, bye.
QUEST: Bitcoin is continuing to enjoy a surge, it's standing on a 15-month high, it's over $11,000, 10 percent up over the weekend. You can see the
bounce-back over the course of the year, and some analysts are putting this trend down to the tensions between China and the U.S. is being attributed
to the launch of Libra, Facebook's own digital currency.
Nolan Bauerle is the director of Research at CoinDesk which is a news site that specializes in digital currency. Always -- you are the man, sir, that
we turn to when it comes to digital and cryptocurrencies.
NOLAN BAUERLE, DIRECTOR OF RESEARCH, COINDESK: Yes.
QUEST: Why should bitcoin be on a bit of a roll at the moment? Why has Libra given bitcoin an oomph?
BAUERLE: I think in a lot of ways it kind of charges an entire population to start imagining ways that money can be programmable. And if you just
start going through Facebook's interface, for example, it becomes pretty easy to imagine. You can insert a lot of financial instruments into there
and make a -- do a lot of stuff. We don't know if any of this stuff is going to work.
But nevertheless, it kind of charges and let's say ionizes people to what bitcoin can do which is even more than that.
QUEST: But is bitcoin in favor? I mean, you know, we go back to when you and I first started talking about it, it was perceived to be renegade, wild
west, all the things that orphans and widows should not be investing in. Is it your view now that bitcoin is more mature?
BAUERLE: I think so. I think a lot --
QUEST: Oh --
BAUERLE: Of that had to do with -- you know, bitcoin can be different things to different people. People want to be able to save money and have
hard currency, hard money that doesn't devalue like what's going on in China right now. You know, you see devaluation looming as there weren't,
maybe exchange reaches $7 so that can happen in bitcoin.
So, the unstoppability of it is important. You see lots of people getting demonetized on various platforms, they've all been attracted to bitcoin as
well. So, and the more and more people talk about that, the more and more opportunities there are for people to accept that it's an important
QUEST: Right, but if Facebook gets involved in a Libra, and you start getting -- for want of a better word reputable organizations willing to put
their integrity and brand behind it. Now, look, I agree you're not going to get the renegade, you're not going to get the Mavericks, you're not
going to get those who believe that they need to hide everything under a mattress because there's Armageddon coming. But normal people will go
towards those names they recognize.
BAUERLE: Well, Libra will still be a stable coin. So it will still be attached to fiat currency. So you'll still be part of the policy, the
unintended consequences of those policies. So, you know, I've said for a long time that it was important in China because they know how much ticket
to Disney World will cost if they come to America.
And if the exchange rate continues to change the way it has, between the (INAUDIBLE), they wanted it. Normal people in China want it. They don't
have such a -- their memory of the government influencing that currency in China is long. It's happened since -- and I think it's a few times and
we've seen it happen since 2015 a few times.
And each time bitcoin has responded, you've seen a lot of flight towards bitcoin for that reason. So this in China, anyway, can be considered
everyday people especially as that rate reaches up toward $7.
QUEST: Though, excellent, thank you. Skiing, snowboarding and skating. The 2026 Winter Olympics host has finally revealed the economically-
challenged country that took the prize after the break.
[15:50:00] (COMMERCIAL BREAK)
QUEST: A winner has been crowned to host the 2026 Winter Olympics.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The host is Milano-Cortina.
(END VIDEO CLIP)
QUEST: Milan won over Stockholm after the four other bids pulled out. There's a debate over whether Italian government would fund the games at
all. Italy says it could cost $1.7 billion. The IOC has agreed to contribute at least $925 million. CNN's Don Riddell joins me now from
Atlanta. I'd love to talk to you about the sport of the Winter Olympics, but the reality is, this is all about money and the ability to bear the
fund and put it on.
DON RIDDELL, ANCHOR, CNN WORLD SPORTS: Yes, absolutely. I mean, I would say $1.7 billion, Richard, is a snip, sounds like a lot of money, but it's
a snip when you consider that the Russians spent $51 billion reportedly putting on the Sochi games in 2014. And that is the reason, frankly, why
you could have settled this debate today with the toss of a coin.
Only two cities were bidding for this. The same as with the last Winter games, 2022 which was won by Beijing, it was then, well, Kazakhstan, and
that is a real problem for the IOC that less and less countries are interested in investing in the Winter Olympics. And so they're hoping that
this one can be financially sensible, a success and perhaps more people will be interested in bidding for it in the future.
QUEST: I also noticed today, I'm just reading the details that Coca-Cola announced a major with a dairy company, a Chinese dairy company, a major
sponsorship team-up for the Olympics, that will go until well into the next decade and beyond.
RIDDELL: Yes, well, I mean, that's great for the Olympics. I mean, of course, it does remain very attractive to sponsors and advertisers. It is
a huge event when it comes around. The Winter games less so, the Summer games is the one that more people get excited about, of course. But yes, I
mean, that I guess is good news for the Olympics because they've had a -- they've had a run of bad news and as I say, spiraling costs and waning
interest in the Winter Olympics in particular has been a problem for them.
QUEST: But, Don, tell me, I mean, the scandal over gains and rides and all those issues that have bedeviled the IOC and which indeed left many
sponsors shunning for some time. Are those scandals behind the Olympics?
RIDDELL: Well, I'm not sure that the scandal is ever really truly behind any major sports organization. There seems to be bad news often around
every corner. But they are certainly hoping that they're more transparent and more open, and though, there can be less scandal.
But I mean, I remember the last Summer Olympics in Rio where, you know, there was so much controversy about doping and who should be allowed to
compete and who shouldn't, and what is the deal with the Russians and can they be there and can they not be?
[15:55:00] So, there's always plenty to talk about off the track and away from the arenas. But you know, the IOC is touting this as a good day
despite the fact that there weren't that many people interested in hosting this event. And to give you an idea of how much the IOC has had to concede
here, they were willing to let, you know, more than one city, more than one region, more than one country host this.
If Sweden had won this, the Bobsleigh, for example, would have been held in Latvia in a completely different country. So, the IOC is making a lot of
concessions to make hosting these events more appealing.
QUEST: Good to have you, Don, as always, thank you very much indeed.
RIDDELL: Right --
QUEST: And with the last few minutes of trade on Wall Street, going to show you how we are ending the session and we're pretty much -- and I think
what's interesting, the Dow is near a record, it's not quite there yet. The Nasdaq and the S&P are flat. But what I think is fascinating is the
way in which we've stayed in this very tight range for the last two hours.
The chemical firm Dow is leading and the Dow 30. Home Depot, as you can see, Home Depot down at the backend, Dow at the top, interesting, you don't
often get those two as being the ones with opposite sides. Boeing is just above the parapet and Coca-Cola also on the back of that deal with the
It's a nice mix and match which shows you the market betwixt and between, and you and I will have our profitable moment after the break.
QUEST: Tonight's profitable moment. Dr. Mahathir's comments in Malaysia about 370 are interesting because as the Prime Minister, he is now well
positioned to find out exactly what they know about MH-370. And to those of you who have written to me and asked me what I think of William
Langewiesche's article in "The Atlantic", Langewiesche basically says it was the captain that did it.
I think he makes a strong argument, but not conclusive. The reality is that we know no more about it -- oh, I can make an argument that says the
captain Zahiri(ph) probably did it, but that's not proof and that was the problem with the "Atlantic Article". You read it and there's an
obviousness to its answer that I can fully go along with.
But if you're looking for cast-iron proof, if you're looking for something that actually says this is what happened, we still do not know. And that's
a fact. And that is QUEST MEANS BUSINESS for tonight, I am Richard Quest in London. Whatever you're up to in the hours ahead, I hope it is
The bell is ringing, the day is done, the Dow is up.