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QUEST MEANS BUSINESS

Hong Kong's Economy Is Showing Strain From Months Of Protests; A Former British Prime Minister Is Suing The Current One; An August To Remember; Nine-Year-Old Tests Positive for Ebola in Uganda; U.S. Service Member Killed in Afghanistan; Hurricane Dorian Strengthens to Category 3. Aired 3-4p ET

Aired August 30, 2019 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ZAIN ASHER, CNN INTERNATIONAL HOST: All right, a bit of a seesaw day on the market. The Dow going back and forth between positive and negative

territory. On the one hand, investors are very, very hopeful that there could be movement between trade talks between the U.S. and China. On the

other hand, it seems as though one third of American consumers are worried about tariffs.

Hong Kong's economy is showing strain from months of protests. You'll hear my interview with the activist, Joshua Wong.

And Donald Trump takes aim at the euro. The U.S. president says that it is dropping like crazy.

And Google finds a flaw with Apple's iPhone saying they could have been hacked for years.

Coming to live from the world's financial capital. It is Friday, August 30th, I am Zain Asher in for my colleague, Richard Quest, and this is QUEST

MEANS BUSINESS.

ASHER: All right. Good evening. Tonight, protesters in Hong Kong say the time for talk with the government is over. This financial capital is

starting to sigh under the economic pressure of the demonstrations now entering their 13th week.

The government has crackdown on pro-democracy activists, arresting at least seven in the last 48 hours. Joshua Wong was arrested early Friday morning,

later released on bail. Speaking with me moments later on "The Express," he said the government's tactics will backfire.

(BEGIN VIDEO CLIP)

JOSHUA WONG, HONG KONG PRO-DEMOCRACY ACTIVIST: It is a must to let President Xi Jinping and Carrie Lam learn a lesson. Political crisis was

solved by political system reform. And we know that mass arrest or prosecution is not the way out.

It would just trigger people with even stronger determination because Hong Kong people are the ones who deserve democracy.

(END VIDEO CLIP)

ASHER: The protests are taking an economic toll. Tourism visits in July fell nearly five percent compared to a year earlier. July show the weakest

month over month gains since the British handover of Hong Kong back in 1997. Figures for August are likely to be worse since that's when

protesters took over the airport.

Retail sales, meanwhile show the biggest drop off in three and a half years. They were down more than 11 percent from a year earlier. Our Paula

Hancocks reports from Hong Kong.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Police here in Hong Kong say that they have arrested more than two dozen people since Thursday night

in relation to the recent protests, including this time around, a number of prominent pro-democracy and anti-government activists.

The most well-known out of these is probably Joshua Wong. He was one of the leaders of the 2014 Umbrella Movement. He has been very vocal this

time around as well and has been arrested a number of times and served prison time.

Now on this particular occasion, police say that he has been charged with organizing, inciting and participating in an unauthorized assembly. Now he

has since been released on bail along with a fellow activist and he spoke to journalists once he was released.

(BEGIN VIDEO CLIP)

WONG: I urge international communities to send a clear message to President Xi, sending troops or using emergency ordinance is not the way

out. We will continue our fight, no matter how they arrest and prosecute us.

(END VIDEO CLIP)

HANCOCKS: It's worth reminding ourselves though, that this is still technically a leaderless movement. The movements -- the different groups

involved wanted this to be the case so that authorities couldn't just take one particular leader into custody and then cut the head off the movement.

It is still very much being led by people on social media.

Now another development this Friday. We also have a report from Reuters saying that the Chief Executive of Hong Kong, Carrie Lam had suggested to

the Central Government in Beijing that they do agree to one of the five demands of the protesters that they completely withdraw this controversial

Extradition Bill, which is where these protests started.

Now, according to Reuters, they say that said that the Beijing government rejected that and said none of the demands should be agreed to.

Now, we do have calls into Carrie Lam's office. We've also called the Hong Kong-Macau Affairs Office for confirmation. If this is confirmed, though

it would show the protesters that what they believe is happening is in fact true -- that Beijing is pulling the strings behind the Hong Kong government

and this one country two systems is under threat.

Now looking ahead to Saturday, we were expecting a very large rally from one of the main and most peaceful protest groups, but that has been denied

by police. They say that they're worried about civil unrest.

So that particular group has not called for its supporters to come out onto the street. They say they can't guarantee their safety. But what we could

see is a number of people coming out anyway.

Now police have said that if that happens, and if it is peaceful, then they will act accordingly. They have also said though, that if protesters do

decide to be violent, they will take appropriate action. Paula Hancocks, CNN, Hong Kong.

(END VIDEOTAPE)

[15:05:25] ASHER: Pro-democracy protesters warned the government's crackdown will only increase tensions. Earlier, I spoke with the activist

Joshua Wong, he began by telling me what he has been charged with.

(BEGIN VIDEOTAPE)

WONG: I was charged with organizing, inciting and participating unauthorized assembly outside of Hong Kong Police Headquarters.

Two months ago, I was released out from prison and directly joined the strike that we describe as the summer of discontent with our cause on free

election. It's no surprise that they will arrest me in the future.

But how they targeted activist leader, including me and other servant lawmakers were detained in the police station one day before the mass rally

happened, which just shows the crackdown of human rights and how Hong Kong government and Beijing have no intention to solve the political crisis by

political system reform. They just try to conduct mass arrest and prosecution.

I need to face the trial on November again, and might be jailed for next year. But I will still continue to fight and urge government, withdraw the

Extradition Bill, stop police brutality and respond to people's call.

We need to elect our own government. Leaders of Hong Kong should not be handpicked by Beijing authorities.

ASHER: So I mean, obviously you say that you weren't surprised by your arrest. But what do you make of this strategy of Hong Kong Police

targeting and going after leaders of past movements like yourself. You were a prominent figure in the Umbrella Movement five years ago, going

after leaders like yourself who are tied to past movements and linking them to this movement which everybody knows is a leaderless movement.

WONG: We have more than a hundred facilitators engaged in this movement and even they arrest me or other activists or lawmaker, people will still

come out to the street.

In fact, how the number of participants get on tomorrow's protest is not dependent on the announcement or mobilization of structural law or not. So

these tactics are useless and meaningless. It is just show that how Hong Kong government do not respect on the voice of Hong Kong people, when we

strongly realized that one country two system eroded to be one country one and a half system.

ASHER: So what is your message to Carrie Lam?

WONG: Carrie Lam should realize that, now is the time listen to our voice. I will protest continue for 12 weeks already. Just imagine from the

generation of millennials to the generation of baby boomers, the youngest arrested activist at the age of 12 is still just a primary school kid, but

still joined the protest with his brave courage and determination, which means that Hong Kong people will never stop, and we will never give up. We

shall never surrender.

(END VIDEOTAPE)

ASHER: Joining me live now is Robert Kuhn. He is a longtime adviser to Chinese leaders and corporations. He has also written a book called, "How

the Chinese Leaders Think." Robert, thank you so much for being with us. So won't arresting prominent figures like Joshua Wong simply backfire and

lead to an inflammation of more tensions?

ROBERT KUHN, AUTHOR: The perception that China wants to repress or control Hong Kong is completely misguided because Hong Kong has been the vehicle by

which capital and technology has come into China over the last four decades of reform and opening up.

And now even more importantly for what they call the New Era is that Hong Kong is the linchpin for what's called the Guangdong-Hong Kong-Macau

Greater Bay Area Coordinated Integration Plan, which seeks to make the economy of this region, world class in every respect.

Already, it's a trillion and a half dollars more, probably $1.7 trillion in GDP; 12 percent of China's GDP. If it were an independent country, it

almost would be in the top 10 in the world. Projected 2030, maybe three and a half trillion, so it's extremely important.

So China has no interest in stopping this. They want to accelerate that, but China has four red lines that it won't allow to be crossed endangering

national security which they would look upon as any move towards independence or quasi independence like a universal suffrage or elections.

Challenging the authority of the Central Government and using Hong Kong as a base to undermine the political system in China. Those are three

political red lines, then, of course, unending chaos would hurt the economy, because stability is the foundation of the economy.

[15:10:16] KUHN: So China doesn't want to have any negative impact. They're not trying -- what they're trying to do is maintain stability and

also rule of law, which is important for civil society.

ASHER: But if they want -- I mean, look at these pictures, this is hardly stability. If they want stability, Carrie Lam actually went to the Chinese

leadership and said, "Listen, if we want to de-escalate tensions, the one thing we can do is withdraw this controversial Extradition Bill." China

said no. Was that a mistake?

KUHN: There are five demands if you count them. And originally, there were I think six.

ASHER: But Carrie Lam was willing to at least put that one forward.

KUHN: Well, we think that. We don't know exactly what was happening inside. The attitude of the Chinese government is they want to let the

local government do everything possible. But they will not allow these red lines to be crossed. So they'll give them every chance so that the Central

Government will ratchet up the pressure, only to what they think is the absolute minimum required to achieve these goals, which are the red lines

won't be crossed.

Now, in terms of withdrawing the Bill, there's a very fine-grained distinction between saying "it is dead" because it can always be

resurrected. So you don't want that. But withdrawing it, I mean, you could always reintroduce it.

So it's -- I'm not sure it's a difference with a distinction with a real difference. But it has symbolic significance. But from Beijing's point of

view, they believe that if you give in to one thing, it'll just encourage more.

So that's the tradeoff that we have. What are the kinds of agreements that can be made that will not signal to the Chinese government that these three

political red lines -- endangering sovereignty challenging the government and using Hong Kong as base -- those won't be crossed?

ASHER: So it's sort of give them an inch, they'll take a mile sort of thinking. Now, Joshua Wong actually released a statement on Twitter after

he was arrested. And he said, "Listen, it's entirely unfair to arrest me as a leader of a previous mass sort of pro-democracy movement, the Umbrella

Movement five years ago and link me to this current movement. Now, it's entirely unfair. I'm not sure why they're doing it, it's no doubt going to

backfire." Does he have a point that Beijing shouldn't have sort of brought him into this?

KUHN: Beijing will do whatever they have to do to make sure that these four elements are maintained. That chaos doesn't continue. We have the

70th anniversary of the founding of the People's Republic of China, October 1st. This Hong Kong festering is something that is obviously

counterproductive to that.

So China will do everything that they can, the minimum that they have to do to maintain these areas. They won't allow a sense of weakness for the

Central Government because the Chinese people are very nationalistic, all peoples are. China has a special reason because of a century of

humiliation and invasion that they've had. So they're very sensitive to infringements on their sovereignty.

So you have this tension and the large majority of the Chinese people, whether we like it or not, are not in favor of the protest. So there's a

domestic sense in China as well. You see nationalism in both places.

We only -- we largely show what's happening in Hong Kong for good reason. But there is another side of it. So you have this dual tension. Again,

China will do the absolute minimum that they have to, but they won't allow these red lines to be broached.

ASHER: Robert Kuhn, thank you so much for your perspective. Appreciate it. All right. Let's turn out to the market. The Dow -- let's see --it's

just about flat here, down 29 points. So basically flat. The NASDAQ and the S&P 500 are both trading lower. We saw some gains early in the session

thanks to optimism over cooling U.S.-China trade tensions.

Investors may now be worried about a fresh wave of U.S. tariffs on Chinese exports and Beijing's retaliation which goes into effect on Sunday.

Trade hopes have also boosted European stocks. Let's take a look here. You see most of the European stocks there actually ended in the green --

not all of them though. Italian stocks pulled back as the haggling continues over a new coalition government.

A former British Prime Minister is suing the current one, John Major wants to join a legal action against Boris Johnson's decision to suspend

Parliament for five weeks. Major, a prominent remain a led the U.K. for seven years in the '90s, and what's especially interesting here is that he

is from the same party as Mr. Johnson.

Bianca Nobilo joins us live now from London. So Bianca, how much weight does this carry that you have, a former Prime Minister, John Major who is

also a conservative joining this legal fight by Gina Miller against Boris Johnson.

BIANCA NOBILO, CNN CORRESPONDENT: Yes, Zain, we've got some blue on blue legal action there going on within the Conservative Party. It's not

surprising, but it is damaging.

So John Major has been outspoken about the prospect of Boris Johnson proroguing Parliament for several months now and he did indeed threaten to

take this kind of action if Boris Johnson followed through on any of the hints that he might do this.

So in that regard, we shouldn't be surprised. Something which undermines his wading into this episode slightly, is the fact that John Major himself

prorogued Parliament back in 1997. Now, his Labour critic said he did that specifically to avoid the publication of a report that was going to be

embarrassing and damaging to his own government.

[15:15:36] NOBILO: Now, Boris Johnson maintains in a defiant tone that proroguing Parliament is simply to refresh and revitalize his domestic

agenda. After all, this has been an incredibly long parliamentary session.

But John Major joining forces with Gina Miller, who is the woman back in 2016, who successfully managed to get a court ruling, which meant that

Parliament had to legislate to trigger Article 50, and the government couldn't do it itself.

The fact that both of them are joining forces to try and get some kind of guarantee to block the suspension to Parliament is significant. And

something which I'm sure does concern the government that Boris Johnson maintains that Parliament will have sufficient time to scrutinize whatever

they need to depending on whether or not he gets the deal with the E.U. Let's take a listen.

(BEGIN VIDEO CLIP)

BORIS JOHNSON, BRITISH PRIME MINISTER: This Parliament has been dragging its links like a wounded worm for more than any time since the Civil War.

I think you will find that Parliament has ample opportunity between now and the 31st, before and after that crucial E.U. Summit of October the 17th to

express their views, and we're going to have a Queen's speech as well.

(END VIDEO CLIP)

ASHER: Boris Johnson there not backing down. Bianca, what is the events of the past week? Tell us about the type of leader that Boris Johnson

actually is?

NOBILO: It's a good question. I've been wondering myself, Zain, the extent to which he has been trying due to his word because Boris Johnson

from the get-go, when he put himself forward to be leader of the Conservative Party, most recently maintained that he was committed to

leaving on that date, the 31st of October. And he has signaled that that is what he's intending to do.

He has upped his rhetoric when it comes to underscoring that Britain is prepared to leave the E.U. without a deal. He has repeated that at any

opportunity that he has had, whether it's at the G7 or if it's in press conferences or statements that he has made.

He has also come out in addition to his key Ministers, and underscored the readiness of the U.K. to leave without that deal. So saying that

government departments are actually much better prepared than the U.K. public might expect them to be.

Also, the fact that he has taken the step to prorogue Parliament is received by his hardline Brexit supporters as a signal that he is fully

committed to this.

So as far as his commitment to Brexit is concerned, all signs are pointing to the fact that he is being true to his word. However, he has flipped

flopped on some of these issues before even on the issue of proroguing Parliament during the campaign to become leader. He has sort of

equivocated on that.

But so far, he seems to be relying on his hardline Brexit supporters, those are the ones who spearheaded his move into power in the first place. He

has maintained that he is working and ready to have a deal with the E.U. He said that that is his preference.

He clearly thinks that his pressure strategy on the E.U. is working. Because for so long, Theresa May had taken a more compromising approach to

these negotiations. And all of her critics said, well, the E.U. is never really going to believe that you would allow the U.K. to leave without a

deal.

Boris Johnson's strategy, his approach is entirely different. He has a slimmer working majority than Theresa May did, but he is going into this

guns blazing, saying, "We are ready to do this." He is taking a very firm, decisive approach to that.

Now, there are some people that still think that at the 11th hour, he could, quote, "bottle it" from a source that I was speaking to the other

day and decide that he is not prepared to take Britain out without a deal. But he is in a very difficult situation.

The Brexit Party have also promised a non-aggression pact in any form of election if Boris Johnson does indeed leave without a deal, so he's got a

lot of forces acting on him.

So far, Zain, he has acted fairly consistently with what he promised during that campaign to become leader of the Conservative Party.

ASHER: Boris Johnson, a man who seems to be so far mostly true to his word. Bianca Nobilo, live for us there. Thank you so much.

Okay, so August is typically a quiet month for stocks, but that was not -- not the case this year. We'll take a look at what 30 days of trade

tensions and recession fears have done to the market. That's next.

(COMMERCIAL BREAK)

[15:22:24] ASHER: We are now in the final hour of trading for what has certainly been an August to remember -- to put it lightly. The Dow is set

to close flat today. It had been up earlier in the day after the U.S. and China tamp down on their trade war rhetoric.

Let's broaden out and look at the week as a whole. The Dow is actually having its best week in nearly three months. Take a look there, you see

what it's been doing the last five days. It's actually up 3.1 percent, the biggest rise since the first week of June.

Despite a good week, the Dow is still down around 1.7 percent for the month. August, let me tell you has certainly been a roller coaster. The

stocks, you've got the trade tariffs, retaliation, harsh rhetoric, and recession warnings as well, flashing from the bond market. All of that

have really dominated the past 30 days.

August is shaping up to be the second worst month of the year. The only month that was actually worse than August was May.

Scott Wren is Senior Global Equity Strategist at Wells Fargo Investment Institute. He joins us live now. So Scott, when you're dealing with so

much volatility, I mean, how do you trade in that kind of uncertain environment?

SCOTT WREN, SENIOR GLOBAL EQUITY STRATEGIST, WELLS FARGO INVESTMENT INSTITUTE: Well, Zain, I think if you're a trader, you're probably trying

to trade the range, although I'd say in the S&P 500, that's been tough to do. Because really, a few weeks ago, overnight, we traded to the 200-day

moving average, but we have not during the U.S. day. So it's been rather difficult for traders.

You know, the range has been relatively tight here the last few weeks. But on a day-to-day basis, obviously, it's been pretty wild.

So you know, this is a tough market to trade and our clients tend to be invested for the longer term. So what we've tried to do, and we've done it

in a couple of legs this year, is just reduce some portfolio volatility. We had a good bounce obviously off the Christmas Eve lows in the S&P 500.

So we've taken a little money off the table. We're not leaning toward equities as hard as we had been for a number of years. So I think with

these trade risk, which could go either way. We're trying to be a little bit neutral relative to what we would call our strategic allocations.

ASHER: Do you see a recession on the horizon? Or do you think that the U.S. consumer is too strong for that at this point in time?

WREN: Well, I'll tell you, the consumer is obviously every number you see from them practically is good in terms of spending. For us, our outlook

really is modest growth, modest inflation, low probability of a recession over the next 12 months.

But, you know, based on recent weeks, I mean, the negative risk to that constructive outlook have increased. And so that's part of the reason why

we've taken some of these measures.

[15:25:10] WREN: We don't see an imminent recession, although there's probably plenty of reasons you can point out to why you would expect one in

the next 12, 15, maybe 24 months. But we're not calling for that right now.

But we're being a little bit more careful for now because we think the risks have increased.

ASHER: Okay, so you're not necessarily worried about a recession, but do you find the inverted yield curve alarming, and also, just really the

weakness in manufacturing? Some people say that the weakness in manufacturing could easily seep into the service sector as well.

WREN: It has, you know, and if it does seep into the service sector, of course, here in the States, services is what's driving the economy; the

consumers is what's driving the economy. The inverted yield curve, I mean, you know, you have to pay attention to that. And I'm never one really to

say, it's different this time, because in the 35-plus years, I've been doing it very, very rarely is it different this time. You have to pay

attention to that.

But we also have to know that when the curve inverts, you do get some false signals from time to time. And typically, the recession is just not right

around the corner, you've got some time where the S&P 500 actually gives you positive returns between now and the recession.

So we're not -- I don't know if I would call it trying to thread the needle. But I think there's some things with the curve this time where,

you know, obviously, we have high yields in the U.S. relative to the rest of the world. It's good, safe haven. So there's been some buying based on

something other than just, you know, the Fed is behind the curve, which they probably are.

But we don't see it imminent, but we will -- as I said, we want to be a little bit more cautious here.

ASHER: Scott Wren live for us there. Thank you so much. All right, President Trump is unhappy with the strength of the U.S. dollar and blaming

the Fed for it. He tweeted that the euro is quote, "dropping like crazy" giving the E.U. a big advantage in exports and manufacturing. He falsely

claimed the dollar is the strongest it's ever been.

The euro is down at three quarters of a percent on Friday. Anna Stewart is following the story, live from London. And so Anna, when you look at the

euro, I mean, this is just a casualty of the slowdown in Europe.

ANNA STEWART, CNN REPORTER: It is and I have to say the President does have a point. The euro has been dropping like crazy, but not just today.

It's kind of been on this trajectory since beginning of 2018. Although today, he did actually hit a new low for over two years, going below that

$1.10 handle I think is pretty extraordinary. And it is to do with the Europe side of things.

We are looking at very weak inflation data coming out this week that is exacerbating all those expectations for a rate cut from the ECB, lots of

dovish noises, whether that in and of itself is a reason to lambast the Federal Reserve, well, not so sure. But at least, from a European

perspective, I'm sure that the ECB is relieved that at least they're not being accused this time by the President of currency manipulation -- Zain.

ASHER: And Anna, one other piece of business news that grabbed headlines was Siemens corporate bond with negative interest rates. The fact that

Siemens is actually able to borrow billions of dollars without paying a penny in interest rates, is that a sign that investors believe that rates

are actually going to fall even further?

STEWART: It is and it's extraordinary. They have managed to borrow $1.6 billion without paying a penny and I think it is fascinating, the two-year

was the most negative corporate bond ever to be priced in the primary market. It is extraordinary.

Now, we've almost gotten used to government bonds going negative in Europe, it's become old story. This is fairly interesting. I think it just speaks

to that bigger picture that we're looking, a slightly miserable few quarters coming forward. Rate cuts not just from the ECB, across

continents, we're looking at really weak environment.

But plenty of investors out there who need invest-grade assets, this Siemen's bond is still more attractive perhaps than the German bund and

obviously also, overseas investors with their currency hedge that actually ends up being maybe a slightly positive yield, but it is an extraordinary

economic environment we're looking at -- Zain.

ASHER: All right, Anna Stewart live for us. Thank you so much. All right. Still ahead, a state of emergency in California -- or rather

Florida. People are being told to stockpile before Hurricane Dorian makes landfall. We head to the World Weather Center to see what damage it could

inflict. That's next.

(COMMERCIAL BREAK)

[15:30:00] ZAIN ASHER, HOST, QUEST MEANS BUSINESS: Hello everyone, I'm Zain Asher, there's more QUEST MEANS BUSINESS in a moment. When a Google

researcher says hacked websites may have been exploiting your iPhone for years.

And it's happy birthday -- Warren Buffett will show you what he has to celebrate as he turns 89 years old. Before that though, these are the

headlines we are following for you here on CNN. A nine-year-old girl has tested positive for Ebola in Uganda near the border with the Democratic

Republic of Congo. The Ugandan Ministry of Health says that she was quickly isolated and transferred to an Ebola unit where she's being

managed. An official says she'll be sent back to the DRC.

Hong Kong activists say they will never give up their fight for democracy. At least seven activists were arrested including prominent campaigners

Joshua Wong and Agnes Chow. They were later released on bail. The arrest came as fresh Chinese troops pour into Hong Kong, China claims it's a

routine rotation on its garrison.

And a NATO-led mission in Afghanistan announced Friday that a U.S. service member has been killed during combat operations. The statement said they

cannot specify where in the country the operation took place or identify the service branch of the individual until family members are notified.

U.S. President Donald Trump's long-time personal assistant has abruptly left the White House. Madeleine Westerhout was forced to resign as

executive assistant to the president after Mr. Trump learned she had shared intimate details about the president's family with reporters.

And Hurricane Dorian is strengthening in the Atlantic and is now a category 3 hurricane. Storms that are category 3 or higher are considered major

hurricanes. Forecasters say Dorian will hit the Bahamas on Sunday, hurricane watchers are already out there.

People in Florida are being told to stockpile a week's worth of food and supplies. This is how the storm is looking on our weather radar. Tom

Sater is at the World Weather Center to tell us more. So, Tom, we know that this is now a category 3 storm, it's likely going to be a category 4

by the time it hits Florida. Just for our viewers who don't know, just walk us through the type of damage that a category 3 or a category --

TOM SATER, METEOROLOGIST: Oh, wow --

[15:35:00] ASHER: Four storm can inflict.

SATER: Well, obviously, you have the storm surge and we're looking at maybe -- oh, gosh, I mean, we could see several meters, 5, 6 meters. We're

looking at wave heights that could be say 28 feet, that's three storeys high in the waves offshore. It's really about the wind and the rain. Now,

if we look at this system, I mean, the forecast, Zain, has been crazy, it's been changing every day and is still changing.

I know you mentioned that maybe landfall Sunday night, it could be Tuesday morning, it could not happen at all. That's how crazy the forecasts have

been dealing with this. Not only will the size get larger visually, but those strong winds that have been close to the center are going to start

fanning out.

So, I know we always fixate on where will landfall be for those strong winds, but the entire peninsula of Florida and all of Bahamas are going to

feel some winds strong enough to knock power out, and that could be the entire state of Florida. Watch is in effect, Freeport may have a direct

hit first of all, and that could be at a category 4.

Winds could get up to 220, 225. Here are the models, this is what we want to see, Zain, we want to see good agreement and that's what we have.

Remember these tropical systems, no matter where they are on the planet, their only job is to transfer heat to colder waters and colder air.

So they're always trying in the northern hemisphere to get to the north and they want to take the path of least resistance. Well, it isn't able to go

north because high pressure is blocking it. But if the longer it takes to get here, and there's some models I'll show you and if they slow down, that

area of high pressure could break down enough to really let it go up to the north.

We don't want it to do that over land because it would scrape the entire state, all of the cities, all of the communities, and then a slow pace drop

unbelievable amounts of rainfall, maybe over half meter of rain. And they've already had record rain, the ground can't take anymore.

It's saturated. So, instead of trying to fill an empty bucket with a bucket, we're going to be filling a full bucket with a dump truck full of

water. The winds are concerning here because a category 4, it's catastrophic. I mean, roofs down, power lines down, it just looks like a

war zone and it continues to hold the strength that a category 1 -- this could be a name storm for several days.

But now, let's talk about the differences and what we're starting to see now in the models. This was earlier in the day. This is the U.S. model,

this is the European model, now, they've been changing every day, some of them wanted to take it across the peninsula, but now look at what happens.

Let's put these side-by-side and you'll see where the eyes are in the timing.

Monday, 11:00 p.m., still offshore, that's not a landfall, so that could be overnight into Tuesday morning. Somewhere in the south of Melbourne and

then the European, that's by 4:00 in the morning, it's still offshore but it's a little further to the south.

So, we don't know exactly what's going to happen, but we're still hanging with some hope, and it may have come a couple of hours ago, this is just

one model run, but the European now wants to go ahead and find that path of least resistance a little bit earlier.

This would be great if it comes to our free -- not good for Freeport, keep them in your thoughts and prayers. But now this model keeps it offshore,

that's not a landfall for Florida. I mean, it will still scrape the entire populated communities up and down the coast like Matthew did a couple of

years ago and then they had record flooding in the Carolinas.

So, we're hopeful that could happen. That's better than a landfall obviously, and the models show that heavy rain there, but that's just one

model. We've got to continue to look at both of them and we put them both side-by-side, here in blue is the European model, here is the U.S., it

still wants a landfall here but you'll see the differences, landfall compared to no landfall.

This is anyone's game, Zain, I mean, I know we're playing scenario here, one scenario after another, but we have to. These are guidance models,

they guide us to be prepared. The problem is who evacuates and when? And then the windows is going to start shutting, so this is going to be chaotic

on what was --

ASHER: Right --

SATER: A holiday weekend --

ASHER: Because people have no -- people have no idea what to do, it's so difficult to plan. I mean, you thought it was going to hit Puerto Rico and

then it changed directions, we don't know when Florida is going to hit --

SATER: Right --

ASHER: What are the factors that have made this particular storm so unpredictable?

SATER: Well, first of all, a couple of days ago and it was down towards Barbados, I mean, you would have asked most meteorologists and forecasters

no way this would have been a storm. There's too much dry air. Until we found a center which was still well south of Puerto Rico, you can't gauge a

track.

And even then, Zain, we thought it was going to be well off toward areas of Hispaniola and we missed that by hundreds of kilometers. The hard part

about this is, it's in open waters now, but it's all about the steering currents. Could an area of low pressure developing over the gulf which it

is, start to give those winds that are counter-clockwise and push it up, or will high pressure remain strong and push it in towards Florida?

Here you go, there's 10 meter -- 10-meter waves right there, that's not the storm surge and we're looking at high tides. So, again, so many

significant problems with this when Irma moved through a couple of days ago -- or a couple of years ago, folks are traveling to one coast or the other

because it kept changing all the way towards landfall.

I hope that's not the case here, but the best case scenario is offshore. Let's hope that European model holds true, but a lot is going to change.

[15:40:00] ASHER: We'll be watching, Tom Sater live for us --

SATER: Yes --

ASHER: Thank you so much. All right, airlines and tour operators are being forced to take evasive action on one of the busiest holiday weekends

of the year. You're looking at pictures from Orlando; one of Florida's biggest tourist destinations. Flights, trains and the cruise lines are

either cancelling services or waiving fees for people who need to change plans last minute.

Disney is expecting disappointment with as much anticipated "Star Wars: Galaxy's Edge" land likely to see less foot traffic. Dianne Gallagher is

at Orlando International Airport, she joins us live now. So, Dianne, it looks relatively calm behind you. It looks sort of a normal travel day,

but I'm assuming that in a few days, we could see mass disruption.

DIANNE GALLAGHER, CNN CORRESPONDENT: Yes, Zain, it's exactly that. It's a normal travel day, a normal Friday in Orlando, Florida. This is one of the

busiest weekends for this particular airport because it's the last holiday weekend of the Summer.

They're already expecting about 130,000 people a day to come through, each day of this long weekend, and that was before the hurricane was factored

into this. So, they've got extra staffing to begin with, they've added additional staffing to deal with the hurricane and any individual sort of

residual effect from that.

And at this point, they are simply doing exactly what you were just talking about before, watching, waiting and attempting to anticipate when this

storm is going to make landfall and where it's going to happen. And that's going to determine how long the airport remains open to the public and

whether or not those flights stay on track.

And so, we've watched most of the people coming in and out of here whose flights are still going, people are still taking their vacations that we

have run into here and spoken to here at the airport, Zain. You can see there are plenty of people who have their vacations starting to wait in

these lines here, but look, that's nothing.

I waited in a longer security line this morning just to get down here to a totally different airport not affected. And so this is something that they

are prepared for, they've got cots, they have beds here waiting for their employees to keep them through this hurricane as they stay on site, but

it's just a waiting game, and that's really what it is for them at this point.

Airlines make their own decisions about flight paths, and so they're watching as well, and even if the airport remains open, your flight may be

canceled. And so, for a lot of people, it's that uncertainty, Zain, they've been saving money to take these flights, they've been taking these

vacations.

Whether or not they want to cut it short as some did so they can get home and not risk getting stranded or if they just want to forgo the vacation

all together. And if you were coming to Disney, they allow you some exchange on another trip instead, they're not going to penalize you because

a hurricane is coming.

Various other theme parks do the same thing, but it's a waiting game right now.

ASHER: Yes, couldn't have happened at a worst time with the holiday weekend.

GALLAGHER: No.

ASHER: All right, Dianne Gallagher live for us, thank you so much. Google says it found evidence of a potential iPhone hack. What security experts

found over a two-year period, and what data could have been affected, that's next.

[15:45:00] (COMMERCIAL BREAK)

ASHER: Cyber security experts at Google discovered a plot to hack a massive number of iPhones over a two-year period. Researchers found a

group of hacked websites that exploited vulnerabilities in Apple's software that would have given hackers access to users contacts, photos and location

data.

Google alerted Apple on February 1st and the company updated its software six days later. Apple prides itself on its privacy efforts, one of its

latest ad campaigns even uses a slogan, "what happens on your iPhone stays on your iPhone." CEO Tim Cook has said time and time again that privacy is

vital to the company's mission statement.

(BEGIN VIDEO CLIP)

TIM COOK, CHIEF EXECUTIVE OFFICER, APPLE: We've always been very deeply committed to people's privacy. We've always viewed it as -- in the United

States, we viewed it as a fundamental civil liberty. And these things are guaranteed to us because our forefathers had the vision to know how

important this was.

So, that to us, it's a basic human right. Well, I think the privacy thing has gotten totally out of control, and I think most people are not aware of

who is tracking them, how much they're being tracked and sort of the large amounts of detail data that are out there about them.

(END VIDEO CLIP)

ASHER: CNN's Ahiza Garcia joins us live now from San Francisco. So, Ahiza, thank you so much for being with us. So, what is the most important

thing at this point that iPhone users need to know?

AHIZA GARCIA, CNN BUSINESS WRITER: Update your phone. Right now, if you go into your settings and you do the general and look at the update, you

should be on 12.4.1. That's one of the best things you can do to try to prevent, you know, possible bad effects from this potential data breach.

But the thing is, you know, it's something that you have to stay vigilant about, you have to keep on track of. Because as you pointed out, when

Apple was informed about this, they did, you know, within a week or so in finding out, they did roll out another update. So, that's why it's super

crucial to make sure that you stay up-to-date with these updates.

But the other thing too, the biggest problem about this is that we have no idea how many people were affected, what websites were being used, there

are so many questions, you know, was I affected, were you affected? There's right now -- there's just not a lot of information out there, and so that's

kind of the unsettling part, is that, you know, it took kind of more than a year for or around a year for us to find out about this in the first place.

And then now, there are so many unanswered questions about, you know, the magnitude of this, Zain.

ASHER: Yes, Ahiza, that's really what makes it most alarming. So, how was this potential hack uncovered by Google?

GARCIA: So, essentially, they kind of, you know, discovered it and they detected that there were about 14 different points where this exposure had

happened and where information might have been compromised. But essentially, wasn't actually people trying to hack into phones, it was

accessing, you know, website that had been affected.

And then that was how, just by simply accessing that, and again, we don't know what websites these were. But potentially thousands of visitors were

coming to these websites. So, you know, big traffic, potentially big ramifications. And so, essentially, by simply visiting whatever these

websites were, that was how the, you know, breach was being propagated to phones.

ASHER: Is there any way to know? I mean, you mentioned that there's so much we don't know. Is there any way to actually find out whether, say you

or I were affected by this?

GARCIA: At this point, it's unclear, we're still -- you know, we've reached out to both Google and Apple to try to get more information. But

so, you know, as we have that, we will continue to update the viewers and the general audience.

But right now, it's really unclear to know who was affected, but the biggest thing you can do to ensure that, you know, from here forward, your

phone is a little bit more protected is to make sure that you stay up-to- date with updates.

ASHER: All right, Ahiza Garcia, thank you so much, appreciate that. OK, still to come here, not so much robo-cop as robo-consultant. We head to

Dubai where the future of financial advice is going digital. That's next.

[15:50:00] (COMMERCIAL BREAK)

ASHER: In a world of business, a good financial adviser can literally be the difference between make or break. So, if you're an investor, would you

trust something called a robo-advisor? As our John Defterios found out in the UAE, plenty of people actually would.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: My name is Daryl, I'm one of the wealth associates with --

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR (voice-over): In Downtown Dubai, Ellis and his 8-year-old son Travis attend an investment boot camp.

UNIDENTIFIED FEMALE: And you start seeing money --

DEFTERIOS: Ellis hopes his son will learn the valuable lesson that it's never too early to invest.

UNIDENTIFIED MALE: We wanted to get him started early, and we figure that with the youngsters of today and online, this would be the best way to do

it, so we've invested -- how much did we invest, Travis?

UNIDENTIFIED MALE: A $1,000.

UNIDENTIFIED MALE: A $1,000.

DEFTERIOS: The event is hosted by Sarwa, the region's first robo-advisory. A robo-advisor is a digital platform providing automated financial

investing based on computer algorithms. The hot topic here tonight is how best to navigate these turbulent times.

UNIDENTIFIED FEMALE: What I hear does scare me, but at the same time, what I learn is that basically, when a market isn't doing that well, you're

buying on sale, that's how you should see it and just don't look at it every day and be patient. And anyway, my plan is on a long-term.

UNIDENTIFIED FEMALE: Can you guarantee me returns? No.

DEFTERIOS: Robo-advisors are gaining momentum, partly because the absence of a broker equates to a lower fee. People here are interested in using

the platform for long-term investing rather than making a quick buck.

UNIDENTIFIED MALE: The key thing for me, why I went to the robo-advisor was because it takes away the emotions, hopefully, this will show us that

this is actually a mechanism that proves a better performance than the standard broker that you try and engage with.

DEFTERIOS: Sarwa is part of Dubai's fast-growing Fintech sector. Reshaping the investment landscape and enabling people to take control of

their finances.

MARK CHAHWAN, CHIEF EXECUTIVE OFFICER, SARWA: It can be quite daunting because the industry made it that way. So, you don't know where to start,

you hear with minimums that are quite high for someone starting out and the fees seem to be heading sometimes.

DEFTERIOS: Robo-advisors began popping up around a decade ago. Since their inception, markets have enjoyed near continuous growth. But as talks

of trade wars loom and economic uncertainty rises, many are asking if this new robo-advice gives you the best value for your money.

[15:55:00] UNIDENTIFIED MALE: There's a lot of unknowns and especially what happens when the markets move against algorithms. How quickly can you

rewrite the algorithms? These are the things that we need to understand and have experience with.

UNIDENTIFIED FEMALE: And you can also follow us on any of the platforms --

DEFTERIOS: For the time-being, investors here seem happy to sit back and let technology take the rein.

(APPLAUSE)

UNIDENTIFIED MALE: And what are you going to do? Are you going to do that for a long time or are you going to take your money out and you're going to

spend on toys now?

UNIDENTIFIED MALE: Not toys.

UNIDENTIFIED MALE: Not toys, OK, so you're going to spend your money some day?

DEFTERIOS: John Defterios, CNN.

(END VIDEOTAPE)

ASHER: There are just moments left to trade on Wall Street, we'll have the closing bell right after this.

(COMMERCIAL BREAK)

ASHER: All right, news just into CNN about update, when we told you about iPhone users potentially being hacked. We're just getting word that Jack

Dorsey, Jack Dorsey's Twitter account has also apparently been hacked as well. Dorsey is Twitter's co-founder and CEO. More than a dozen messages

have been posted on his account in the past few minutes, they include racial slurs, offensive language and unsubstantiated bomb threats as well.

We're waiting on a statement from Twitter.

All right, just moments left to trade on Wall Street, the Dow is -- let's see, mostly flat, although it's up about 48 points or so now. It shed

earlier gains, it's still on track for its best week since June. The month as a whole has actually been very rocky for markets. August has been very

volatile, new U.S. tariffs on China this weekend could cause even more volatility as well.

"The most important investment you can make is in yourself", so says Warren Buffett who turns 89 today. The oracle of Omaha bought his first stock

when he was just 11 years old. Today, his net worth is estimated at$80.5 billion. Buffett is promising to give away over 99 percent of his fortune,

his company Berkshire Hathaway has had a bit of a rocky 8 months but the party still goes on.

Top guests with major returns this year include MasterCard, Costco, Visa. Sitting out with celebration with losses are Kraft Heinz, American Airlines

and United Airlines as well. All right, everyone, thank you so much for being with us, that is QUEST MEANS BUSINESS, I am Zain Asher coming to you

live from New York.

The closing bell is ringing on Wall Street and "THE LEAD" with Dana Bash starts right now.

(BELL RINGING)

[16:00:00]

END