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QUEST MEANS BUSINESS

Democrats Question Career Diplomat George Kent on Ukraine Experience; UEFA President Calls for "War on Racism"; Actress Felicity Huffman Reports to Prison for College Admissions Scam. Aired 3-4p ET

Aired October 15, 2019 - 15:00   ET

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


[15:00:19]

RICHARD QUEST, CNN INTERNATIONAL HOST, QUEST MEANS BUSINESS: There's minutes to go before the closing bell rings on Wall Street. Our bell is

ringing.

Now, as we look at the markets, and we have a strong day. It's all about trade. We'll get to the details in a moment. But the Dow is up nearly 300

points, just off the best of the day. A gain of more than one percent and these are the reasons why.

Turkey counts the economic cost of its Syria offensive. The U.S. is imposing sanctions and major companies are postponing investments in

Turkey.

A precarious situation. The IMF says, growth in the global economy is the weakest since the financial crisis.

And a deal within reach, possibly perhaps. Sterling soaring on optimism that a Brexit agreement is close.

We are live in London on Tuesday. It's October the 15th. I'm Richard Quest and of course, I mean business.

Good evening. We begin tonight with Donald Trump's threat to swiftly destroy Turkey's economy and how the announcement on sanctions has fallen

flat. The sanctions were meant as punishment for Turkey's attack on the Kurds in Northern Syria.

But just look what actually happened. The lira is actually up against the dollar, and stocks in Istanbul went up on a rally.

It's a whiplash decision from the White House after all, put it in perspective, a week ago Donald Trump effectively gave the green light to

Turkey's invasion of Northern Syria.

But the Trump administration is raising tariffs on Turkish steel and cutting off trade negotiations with Ankara. It says there will be personal

sanctions on Turkey's Ministers of Defense Interior and Energy.

Elsewhere, the U.K. is joining France, Germany, Finland, Norway, and the Netherlands, all in suspending arm sales to Turkey. And on the corporate

side, Volkswagen has paused plans for a new $1.4 billion plant in Turkey.

There's a as a range of issues. Timothy Ash is here, the Senior Emerging Market Strategist at Bluebay Asset Management. Good to see you, sir.

TIMOTHY ASH, SENIOR EMERGING MARKET STRATEGIST, BLUEBAY ASSET MANAGEMENT: Good evening.

QUEST: Let's start with the announcements that we saw overnight from the White House on sanctions, which -- but the reaction as you just heard me

say has been quite the opposite.

ASH: Really because the market expected much and this was a big nothing burger from the Trump administration, to be honest. I mean, remember the

S-400 issue with the missiles from Russia.

The whole the D.C. establishment was trying to push more aggressive sanctions and Trump blocked them. There's some relationship between Trump

and Erdogan, and we are kind of seeing that again. This was real reluctance from the Trump administration to do anything really serious on

Turkey.

QUEST: Okay. So if the U.S. administration is going to be wishy-washy, and the sanctions may ratchet up a bit, but not much, what about the

measures being taken by the various countries I mentioned to hold arm sales?

ASH: Well, they are not really a big impact on the Turkish economy. There's a lot more, certainly, the U.S. could do and European countries

could do if they wanted to. Dollar sales, dollar transactions, the U.S. could certainly do that.

I mean, interestingly, the Secretary of the Treasury Mnuchin earlier in the week said, you know, he could totally cut off Turkey from dollar financing.

They've not done that.

QUEST: Right. But if they were to use, even if not at the same level of severity, the same sorts of sanctions that have been used elsewhere.

For instance, where you ban or you restrict a country or companies access to dollars or to dollar clearing or any form of dollar transmission - that

would have a serious effect on Turkey.

ASH: Sure. Remember last year, there was very moderate sanctions on Turkey. Again, a couple of ministers were sanctioned, and it was

devastating in terms of the impact on Turkish markets.

Things are a little bit different now. The Turkish economy has turned around quite a bit. The current account deficit is reduced. The dollar

financing needs have reduced as well. But still, they are very vulnerable through that external financing channel.

Short-term debt maturities are about $100 billion a year for Turkey. They need to find $100 billion every year to cover their debt needs.

So any efforts by the U.S. Treasury to restrict dollar liquidity to Turkey would really be devastating, but, you know, the U.S. Treasury doesn't want

to wreck the Turkish economy. I mean, even --

QUEST: Even though President Trump says it.

ASH: Well, Trump definitely doesn't. I mean, there are a lot of hawks in D.C. that want to be more aggressive on Turkey, particularly in Congress.

But there's a real reluctance from this administration to do anything really very serious.

[15:05:09]

QUEST: I'm getting a feeling from what you're saying that I mean, obviously, Russia is the principal player in all of this, and arguably

where the U.S. and others fail to deliver Russia and/or China could move in and take up some slack.

ASH: Well, yes, certainly in terms of arm sales. I mentioned already, S- 400s, so whatever NATO allies don't sell to Turkey, Russia is more than eager to step in.

I mean, so it's really important. I mean, also Turkey's geopolitical direction, this is really important because of this, which is probably why

people -- the U.S. in particular and Trump is very reluctant to be overly aggressive in terms of the economic sanctions.

QUEST: You just aren't impressed with these sanctions. I mean, not just these sanctions, but you don't sound impressed with the sanctions regime as

a method of bringing Erdogan to heel?

ASH: Well, sanctions I think can be effective. I think they have been effective in terms of Russia, in terms of moderating Russia's behavior in

Ukraine. I think what's more important, actually is what Congress think of the sanctions.

Congress have been egging to impose sanctions on Turkey since I mentioned the S-400 issue. Do they satisfy people like Lindsey Graham in the

Congress? If Trump -- if the Congress doesn't feel or think that the sanctions are enough, do we see Congress legislating sanctions against

Turkey? Which would be very negative for Turkey.

QUEST: You've beautifully taken us on to our next part of our coverage tonight. Thank you very much indeed.

ASH: Thank you, my pleasure.

QUEST: Good to see you because Donald Trump's sanctions are having an effect on Capitol Hill, which is exactly what we were just saying.

The Republicans angered by the White House's policy on Turkey and are rallying behind the President. Lindsey Graham had been preparing sanctions

from the Senate. He says it will give Donald Trump reasonable time and space.

Lauren Fox is on Capitol Hill. There is a distinct difference as our previous guest was just saying between seemingly Congress's wish to get the

bit between the teeth, and the President, who seems to want to let the horse run without bolting the door.

LAUREN FOX, CNN POLITICS U.S. CONGRESSIONAL REPORTER: Exactly, Richard, and I'm standing right now outside of Lindsey Graham's office trying to get

an answer as to whether or not he is satisfied with the President's position announced last night.

And I will tell you that yes, he wants to give him reasonable time and space for these sanctions that they are planning to be implemented to see

what kind of effect it could have.

But obviously, he is somebody who has been outspoken in the past when he doesn't think the Trump administration is doing enough to help U.S. allies

abroad.

And I will tell you that Nancy Pelosi, the Speaker of the House, may be the person who moves this forward in Congress. There is bipartisan sanctions

legislation in the House of Representatives. She could bring that to the floor.

She said last night in a letter to Members that the President's sanctions do not go far enough to curb the humanitarian crisis.

So that gives you a sense of where she might be going. Of course, Mitch McConnell, the Majority Leader in the Senate is a Republican, whether or

not he does anything related to these sanctions is still an open question.

Of course, we'll be watching key allies of the President's like Senator Lindsey Graham -- Richard.

QUEST: But what's interesting, Lauren, from what you're saying is that there is as close as we'll ever get to a united front here.

I saw McConnell's comments overnight. I've heard Lindsey Graham. You've got Nancy Pelosi. It seems that these warriors of foreign policy are

pretty much united about what needs to happen.

FOX: Well, that's true, Richard and I think it's really interesting when you look at the broader landscape of what's happening right now on Capitol

Hill. There's an Impeachment Inquiry. That is a very partisan issue on Capitol Hill right now between Republicans and Democrats.

But behind the scenes, of course, and even publicly, Republicans are willing to rebuke the President when it comes to foreign policy, especially

when it comes, of course, to defending U.S. allies abroad -- Richard.

QUEST: Lauren, good to see you. Thank you. Stay outside Lindsey Graham's office and when he comes out, tell us what he says. Thank you.

Now some news just in to us. A U.S. official is telling CNN the Turkish- backed forces have come close to a combined SDF and coalition base, an action that puts U.S. forces at risk, violates the agreement between U.S.

and Turkey.

U.S. forces responded with a show of force. Nick Paton Walsh is in Erbil. How did this happen?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: I don't know much more information, but a U.S. official is saying frankly with some

urgency, this is an event when which Turkish-backed Syrian rebels who a U.S. official has characterized as being mostly extremist in recent days,

some former ISIS, some former al Qaeda, a group of these got close to a coalition base West of Ain Issa.

Now, we know that there are coalition bases near Kabani, some quite big ones, not clear where this happened precisely. But the Syrian rebels

backed by Turkey despite the agreement with Turkey that they would not get close to U.S. forces seem to have got close enough that the U.S. called in

air support.

[15:10:12]

PATON WALSH: They called in aircraft, possibly helicopters, I'm speculating here as a show of force to show the Syrian rebels that they had

to pull back. They had to move away.

Now, that is startling because as we all know, the U.S. is leaving. Leaving very quickly indeed. So it begs the question, why do these Turkish

backed forces feel the need to go so close to a coalition base, the point where those Americans feel threatened. They call an aircraft to protect

them.

Startling -- maybe they're trying to chase them out of town. But clearly the incident was deflated, says the U.S. official by using the channel they

have with Turkey to try and deflate the situation.

But it's amazing here. Proxy forces run by a NATO member approaching a U.S. base as they're withdrawing, making them feel so threatened they call

an aircraft to support themselves.

Remember, too, just a matter of days ago, Turkish artillery shell landed near U.S. forces outside of the town of Kabani causing great concern, too.

It's remarkable how two NATO allies here seem too often be at the other end of barrels of guns pointed at each other -- Richard.

QUEST: Nick Paton Walsh in Erbil, and if there more information, please come back to us to report it.

The IMF is warning the global economy is growing at its slowest pace since the financial crisis. It is forecasting only three percent growth this

year, the least in a decade.

The IMF is also trimming its forecast for next year by a tenth of a percent, and that now comes in at 3.4. Trade wars and geopolitical

tensions are to blame. Clare Sebastian is in New York. Were we surprised by this?

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: No, not really, Richard. Certainly, not having heard the speech from the incoming IMF Chief last

week where she warned that this was happening; that the trade war was going to cost the global economy $700 billion into next year, that she put a

number on it, which is something that we haven't seen before.

And so there might be a need for a coordinated policy response to support this.

The IMF is clearly very concerned. I want to pull up, Richard, one of the reasons why they're concerned. It's not just confidence that is dropping.

It is trade itself.

It looks like global trade this year is stalling in terms of its growth to about a standstill compared to 5.7 percent year-over-year growth in 2017.

This year, expected just 1.1 percent. And then something of a rebound next year, but not up to the previous levels.

So they are extremely concerned. They say, look, we're not there yet. This isn't at a point where we're going to see the global economy tip into

recession. But they're warning that if there's a policy misstep that this could happen. Three percent is a precarious situation.

QUEST: Right. Because to those viewers who are wondering, well, three percent sounds quite a lot. One has to balance the fact that that's the

combination of OECD, mature economies that grow between two and three.

But the faster growing economies, Clare, of which we will be familiar that we should be seeing growth of five, six or seven percent.

SEBASTIAN: Absolutely. This is -- I mean, the IMF continues to say that it's around two and a half percent of global growth at which point they

start to worry that recessions are starting to hit, Richard.

And yes, you know, they are concerned with economies like China in particular really starting to slow down. They're expecting 5.8 percent

growth from China in 2021. That's down from more than 10 percent a decade ago, Richard.

So clearly, a major change going on there and it's these systemically important economies -- China, the U.S., the Euro area, Japan -- that are

really proving to be a drag.

The lifts that we're seeing next year, unlike the slowdown this year, is not broad based. It is driven by many economies that had seen the sharpest

slow down this year, and might be rebounding next year, the likes of Venezuela, Argentina, Iran, and not by these systemically important

economies, Richard, which account for about half of global GDP, so that's why there's concern.

QUEST: Clare Sebastian, thank you. Now, as we continue tonight, there are just any hours left to reach a Brexit deal.

Well, I say that because the text has to be delivered by midnight tonight according to one negotiator, we will discuss it after the break.

(COMMERCIAL BREAK)

[15:16:40]

QUEST: The British pound is climbing on reports that negotiators in the E.U. and the U.K. are close to finalizing a draft of a Brexit deal. The

sterling surged to its highest levels against the dollar, the best to nearly four months.

The E.U.'s top negotiator said midnight was the deadline to hammer out the texts of an agreement, after all, two days from now, the leaders will meet

at a Summit in Brussels.

And the Irish Foreign Minister has already said they ain't going to be going through the text line by line.

Melissa Bell is in Brussels. All these deadlines of midnight tonight, we won't go through text line by line. It's all nonsense, isn't it? In the

final analysis, it will be what Council wants then.

MELISSA BELL, CNN CORRESPONDENT: That's right. But the idea of that midnight deadline, Richard and that is what is really focusing the minds

here in Brussels is that by tomorrow morning, some kind of texts can be approved that can then be put before the leaders before their eyes.

But of course you're right, things will slide if they need to. So determined are the British and the Europeans that some kind of orderly exit

for the United Kingdom needs to be organized.

This is where it's all happening, Richard. Sixth floor of that building, you can see them. It is a room in which the Task Force 50 takes place.

That is where E.U. and British negotiators are holed up even now.

You can imagine the banging of heads, the frustration, the sense that they're having in that room of having gone around in circles for years now,

because let's be clear, what we're talking about - that relationship with Northern Ireland with the rest of the European Union, its Customs Union in

particular, is what has been at the heart of so many of these blockages so far.

Finding some kind of way out of that is their priority in there. But what we've heard over and over today, Richard is that the ball is essentially in

London's court.

While they are looking at the details here that might allow some kind of deal to be found, it will be up to the British to make the concessions that

are necessary that that legal text can be put together by tomorrow morning.

Have a listen to what the Deputy Prime Minister had to say, as he emerged from a meeting earlier today in Luxembourg.

(BEGIN VIDEO CLIP)

SIMON COVENEY, IRISH DEPUTY PRIME MINISTER: There will not be a negotiation of text at that Summit. The E.U. is very, very clear on that.

So if there's going to be a deal at this Summit, well then, the task force and the British negotiating team have to finalize text and as I said, today

is a key day in terms of being able to do that in time.

(END VIDEO CLIP)

QUEST: And Melissa, I was very unfair earlier I asked you whether you thought they were going to get a deal before all is said and done.

The reality is we've got -- none of us can really know. But what is -- briefly, what is the mood?

BELL: The mood is one of optimism and I'd say for the first time in many, many weeks, Richard, that there may be even a sliver of a hope that some

kind of agreement can be hammered out was beyond the expectations of so many people involved in these negotiations until only a few weeks ago.

So hope, but still an awful lot of gaps to use the expression used by Michel Barnier, the chief E.U. negotiator earlier today, a lot of gaps that

remain and it is for London, we're hearing from the E.U. officials to find some way around them in order that that deal can be reached -- Richard.

QUEST: Melisssa, I'll see you in Brussels on Thursday morning, if not sooner. Thank you, Melissa for joining us from there.

Myron Brilliant is with me. He is the Executive Vice President of International Affairs for the U.S. Chamber of Commerce, which part of the

world do we start in? Let's relate --

[15:20:10]

QUEST: We will come to Brexit in a second. But there are perhaps one or two more pressing issues. Firstly, U.S.-Turkey relations, if we may do

that, because of course, you're involved in in those issues. How worried are you? I mean, what do you want the U.S. government to do vis-a-vis

Turkey at the moment?

MYRON BRILLIANT, EXECUTIVE VICE PRESIDENT OF INTERNATIONAL AFFAIRS, U.S. CHAMBER OF COMMERCE: Richard, it's great to be back on. First, what we

want is for the U.S. to engage in diplomatic ties with Turkey.

I'm encouraged that the President has the Vice President Pence heading over with the National Security adviser, we've got to let diplomacy work. If

that doesn't work, there are options, but first and foremost, we want to see the two sides try to put a resolution to this.

QUEST: But the sanctions that have been put in place so far, are relatively minor and as we've reported at the top of the program, you may

have heard, are seemingly having no effect. Would you be against ratcheting them up at this point?

BRILLIANT: Well, just because the lira went up doesn't mean they won't have effect. I think these sanctions should not be ratcheted up. We've

got allow diplomacy to work.

We run the U.S.-Turkish Business Council, so clearly we're invested in the future of the U.S.-Turkish economic relationship. And we have a big strong

defense and energy relationship. These are the sectors that have been targeted by the sanctions.

So, are we concerned yet? No, this is early, but we don't want to see sanctions imposed because sanctions don't roll off easily. And they have

unintended consequences, which is to hurt the business community and also hurt the people who do work for the company.

So we've got to look at first diplomatic solutions. We're not here to say that there isn't a crisis. There is a crisis on the border. But we hope

that Turkey --

QUEST: That's the difficult part, isn't it? That's the difficult position that you find yourself in because this isn't -- there is a crisis where

lives are being lost.

BRILLIANT: Well, you've got to start with the United States and Turkey talking, but Europe is also part of the solution. Right?

Germany, France, Brussels, they need to be engaged as well. One hopes that Turkey will take the right steps pull back. There will not be an

escalation. They won't be lives loss. That's the first priority.

QUEST: U.S.-China, I mean, you are --

BRILLIANT: Turkey, China, let's talk about it all.

QUEST: You're the guests for all seasons, because you're -- I mean, the Chinese have very lukewarm about this deal that was done on Friday.

BRILLIANT: Well, I spent 75 minutes with Vice Premier Liu He on Wednesday, just ahead of the talks he had with Secretary Mnuchin and Ambassador

Lighthizer and eventually the President. I think they realized the urgency to get something done.

This is a first step they view it as confidence building measures. We don't have a deal yet. We've got to get a deal signed there is no question

about it.

QUEST: At the moment, there is no deal.

BRILLIANT: There is no deal yet.

QUEST: Right.

BRILLIANT: There could be a deal signed at APEC when President Trump and President Xi meet, and if there is a deal signed that would be welcomed by

the business community. It won't get us the home run, the grand slam to use a baseball analogy, but it puts us in the ballpark of getting the

atmosphere calmer, trade truce, no further escalation and some things will come good out of this phase one deal.

QUEST: I'm trying not to be pejorative in the way I phrase this, but did the administration and by that you can read Lighthizer, Mnuchin and the

President, did they over sell it on Friday, when we were all left of the view that a phase one deal has been done?

BRILLIANT: Devil is in the details. We're waiting to see what those details will be. We know the outlines of what was agreed to, we don't know

the details.

But at the end of day business wants stability. We crave certainty. So one thing we haven't had is certainty in the U.S.-China relationship.

This phase one deal is not going to bring us certainty, but it's a step in the right direction and it creates a more positive atmosphere for them to

get at the bigger, higher standard, more comprehensive enforceable agreement we seek and the administration seeks.

QUEST: How difficult is it for a U.S. company at the moment? So I'll give an example. You've got 25 percent or 20 percent tariffs on some things,

which were going to go up to 30 percent. So you set all the systems ready for it.

BRILLIANT: Well, that was put on hold. That was part of the outcome on Friday.

QUEST: That's what I am saying. You set to a point all systems ready for that. And then you have to take it all off again.

BRILLIANT: Right.

QUEST: And then you had 50 percent sanctions -- tariffs on Turkish deals, which went down, which have now gone back up again. I mean, it must be a

minefield of difficulty.

BRILLIANT: Okay, well, we're mixing two different issues.

QUEST: No, I am talking about the handling of tariffs.

BRILLIANT: Well, look, the tariffs that went up from 25 to 50 percent on steel from Turkey is really negligible impact because we're already not

getting much from Turkey.

With respect to the United States and China, that's a different ball of wax. We need to see ultimately the tariffs roll back on both sides. This

tit-for-tat escalation is not helping China, United States or the world economy.

QUEST: Well, we did invite you originally to talk about Brexit since you're here in London. So we ought to finish there.

[15:25:08]

QUEST: The ability to do a deal. It looks like that there might be. The interesting thing is, from the U.S. point of view, you've got an

administration saying, go, break off, leave.

BRILLIANT: That's not with the business community wants.

QUEST: Exactly.

BRILLIANT: That's not what we want.

QUEST: That's exactly --

BRILLIANT: Let's be clear. We want a deal that brings certainty. We do not want a hard Brexit. There's nothing good about a hard Brexit. It's

just hard.

What we want is rules of the game. We want to understand what can happen with mobility of people, mobility of goods, we want to understand the

backstop.

We want to understand how the United States engage both Europe and the U.K. in the aftermath of Brexit.

QUEST: So last night, I'm sitting where you are, we had the Vice Chair of E&Y, their study on merger and acquisitions, and they said that the U.S.

and the U.K. are still the number one destinations for M&A and corporate activity.

BRILLIANT: Absolutely.

QUEST: Is that borne out by what your members tell you?

BRILLIANT: Oh, there's no question. We have a huge M&A activity and think about the amount of jobs in this market that are produced by American

companies doing business here. The stakes are huge. And we are not innocent bystanders, we're stakeholders in what happens.

We're invested here, we want more M&A activity. And hopefully on the other side of this, we will get U.S.-U.K.-FTA. It's down the road, but hopefully

we'll get there.

QUEST: We will have a drink before and after. We will have a bet on how long it takes.

BRILLIANT: Well, last time we talked about tea tip, we are over a tea tip. We are talking about U.S. and U.K. now.

QUEST: Tea tip. What have you done for me lately? Good to see. Thank you very much indeed.

BRILLIANT: Thank you.

QUEST: U.S. Democrats are squaring off tonight in the most crowded primary debate. Elizabeth Warren is on the stage at the moment. They're looking

to see what is what and she is getting the feel for the stage.

She's being explained by some folks there exactly how it's all going to run.

And of course, what she won't be able to tell any of them and what she would be able to tell us and what she needs to do to knock it out of the

park tonight. It's the Democrats. It's only on CNN. We'll be right back.

(COMMERCIAL BREAK)

[15:30:00]

RICHARD QUEST, HOST, QUEST MEANS BUSINESS: I am Richard Quest, there's more QUEST MEANS BUSINESS in a moment. U.S. stocks are rallying, they're

celebrating the start of the earnings season and what might be happening with trade. Bank shares are close to record highs, we need to analyze

exactly how, why, what and where? Matt Egan will be with us.

Wall Street though is bracing for a bashing at tonight's CNN Democratic debate, we'll be in Ohio in a moment. You are watching CNN, and here on

this network, the facts always come first. In the U.S. impeachment inquiry, George Kent; the Deputy Assistant Secretary of State is being

grilled on his time in Ukraine.

The president's former top adviser on Russia testified on Monday. A source says Fiona Hill spoke of what she called a rogue operation in the White

House, cutting the State Department out of the loop on foreign policy. The head of the Bulgarian Football Association has resigned after a match

between Bulgaria and England in Sofia was halted twice due to racist abuse directed at English players by some fans.

The British Prime Minister Boris Johnson has described the taunts as vile. The president of football's governing body in Europe says it's time to wage

war on racism. The "Desperate Housewives" czar Felicity Huffman is now serving two weeks sentence in California. The actress is the first of more

than 30 parents who were charged in a college admission scam. Huffman's representative said the star will later serve 250 hours of community

service and a one year under supervised release.

Tonight, 12 U.S. Democratic hopefuls face off on the biggest presidential primary debate stage so far. Every candidate is trying to stay competitive

in a crowded field. It's unfolding amongst the party's impeachment inquiry into President Trump. Now, Catherine Rampell is the CNN political

commentator, she joins me from New York.

What do they have to do tonight? Joe Biden is already looking a little bit damaged around the gills, but what do the others have to do?

CATHERINE RAMPELL, CNN POLITICAL COMMENTATOR: I think if you're talking about those who are sort of simultaneously jacking for the left-most lane

of the Democratic primary people like Bernie Sanders, Elizabeth Warren for example, what they will be trying to do is sort of three-fold. One is

convince voters that their specific ideas, things on antitrust, on healthcare, immigration, et cetera, that those are, you know, of their own

merits the best ideas.

Second is to signal to the public that independent of whatever the specific proposals are, they will be toughest, they will be most competent, they

will hold Wall Street to account. And third --

QUEST: Right --

RAMPELL: Of course is a sort of a more overtly strategic question, which is, how do they bait the most desirable enemies out there into picking

fights with them? For example, Elizabeth Warren has been tweeting back-and- forth with representatives of Facebook about political advertising. She could not choose better enemies than those that she has on Wall Street.

And Bernie Sanders is trying to claim those very same enemies for himself. So, you have all of those objectives on the table right now.

QUEST: Right, now this -- we are as you know, obviously a business program, and if we put this into context, all the leading contenders except

Joe Biden have policies on the left, some would argue bordering on socialism. Is it going to be de rigueur for Democrats to beat up on banks

and Wall Street?

RAMPELL: I would not exactly characterize all of the candidates except for Biden in quite those terms. I mean, there are other moderates on the

stage, including Amy Klobuchar for example. But yes, I do think that banks are a reliably useful foe for Democrats regardless of whether they're

considered liberals, progressives, moderates, you know, whatever the branding may be.

They are a very useful enemy to have. They are all going to be trying to signal that they will be tough on Wall Street just as they will be trying

to signal that they will be tough on tech. Tech turns out to be an advantageous enemy. Whether you're on the left or the right these days

although for different reasons, depending on your ideology and political party, but yes, you'll see a lot of beating up on those particular

adversaries within the business world.

QUEST: And is that a -- from what you can tell, does that play well to America? Because my -- I mean, America sort of has this love-hate

relationship.

[15:35:00]

It's not quite the tall poppy syndrome of Australia. They revel into a certain extent in the success and wealth of some of these people.

RAMPELL: I think that some of these segments of the business world are more hated than others. Tech used to be beloved, right? In America --

QUEST: Yes --

RAMPELL: At the very least. It used to be that's what young people aspire to go into. It was sexy, it was popular, they were making the world a

better place, you know, all sorts of other platitudes. And now of course, public opinion has turned against Silicon Valley for a number of reasons.

Again, it depends on whether you're on the left or the right for what your rational might be.

But in that particular case, public opinion has turned against tech. With the banks, public opinion has pretty much always --

QUEST: Right --

RAMPELL: Been against big banks. There is more admiration, let's say or warm and fuzzy feelings for --

QUEST: Yes --

RAMPELL: Small business, however.

QUEST: Good to see you, thank you.

RAMPELL: Good to be here.

QUEST: The next Democratic presidential debate hosted by CNN and "The New York Times", it is tonight. Now, if you want to watch it live, it's 8:00

p.m. in the United States, which is 1 O'clock in the morning. You could also -- 8:00 a.m. if you're in Hong Kong and of course, it would be

repeated. So, you don't have to stay up all night or get up too early to watch it.

And there, you see the various candidates who will be on the stage. The possibility of a Democrat in the White House with plans to make life

tougher for banks isn't the industry's only worry right now. There's also the backdrop of declining interest rates and great uncertainty surrounding

global trade.

And yet, JPMorgan shares hit an all-time high after quarterly earnings beat expectations. Goldman Sachs and Wells Fargo both missed, but they're still

trading higher, but not in the same league as JPMorgan for better or for worse. Matt Egan is with me in New York. Matt, we can -- I think we can

put Wells Fargo on its own because they've got so many problems that it's just relating to their own scandal.

Correct me if I'm wrong. You know, you really have a burning interest to get into Wells Fargo. But I think Chase versus Goldman gives us more

fodder.

MATT EGAN, CNN BUSINESS SENIOR WRITER: You know, that's fair enough, Richard. I think that really, the big take-away from all these earnings

reports, even Wells Fargo, even Goldman Sachs and certainly JPMorgan is that, you know, maybe the sky isn't falling after all. Like despite all of

the gloom and doom we hear from the IMF, and all these recession fears, the big banks are basically saying the economy might not be booming, but it

doesn't appear to be falling apart, either.

I mean, JPMorgan reported record quarterly revenue, its earnings blew away estimates. The consumer bank held up pretty well, double-digit credit card

and merchant processing volume. So, pretty good numbers, and you know, Jamie Dimon, we all listen to what he has to say about the economy. He

weighed in, and he said that he thinks American households continue to be healthy, although he did warn that that's being offset by weakening

business sentiment --

QUEST: Right --

EGAN: And capital spending which is mostly being driven by geopolitical risks, including tensions in global trade. And then, we have Goldman

Sachs, its results were a little bit disappointing and that was really not because of main street, its mainstream business isn't really that big, that

was mostly Wall Street business.

QUEST: Right --

EGAN: That's because M&A and IPO activity has been lower.

QUEST: OK, but when you -- the banks are favorite whipping boys for the critics, particularly that you're going to hear tonight. If you take the

overall performance, and if you look at the numbers -- now look, I know JPMorgan Chase is a very large bank. But the revenues are huge and the net

earnings are absolutely vast.

EGAN: Right, absolutely. And listen, these banks, we listen to what they have to say because they're at the front lines of the economy. And that's

why it's so interesting to see that JPMorgan is reporting double-digit growth in credit card volume, in merchant processing volume and its loans.

It didn't grow that much, but still positive loans.

So these banks are reporting pretty steady numbers, they're not really signaling any sort of red flags. And as far as the politicians go, if

there's a bank that the --

QUEST: Right --

EGAN: Politicians are going to beat up on, it would probably be Wells Fargo.

QUEST: But further reason -- OK, Matt, stay there, I want you -- we're going to squeeze the asset as they send the market. U.S. markets are

rallying as the season gets under way for earnings. It is a strong start, the Dow is up around 1 percent. Its banking and health stocks, Matt, is

this -- is this earnings? Is this trade? Is it a bit of both?

EGAN: I think investors are just relieved that they can stop trying to decipher the latest developments in the trade war, the latest tweets from

both sides about the trade negotiations, and they can actually go back to focusing on the fundamentals, which in this case is the corporate earnings

outlook.

[15:40:00]

Listen, the expectations have been pretty low for corporate results. But so far, so good. We just talked about JPMorgan and then we've got the

healthcare sector. That's actually the strongest sector today. That's because United Health put out very strong numbers, even better --

QUEST: Right --

EGAN: They lifted their outlook, they talked about optimistic outlook for 2020. And so, right now, investors are pretty happy that the earnings

picture looks better than feared, Richard.

QUEST: Before I let you go, you have one more question briefly and a yes or no -- have you ever played Fortnite?

EGAN: I have never played Fortnite.

QUEST: Yes, so, I'm not the only person in this company that's never played Fortnite. Matt, thank you.

EGAN: Thanks --

QUEST: Matt Egan with that. We will be talking about Fortnite after the break. The video game that vaulted a man on to the "Forbes" list of

richest Americans is back. It had a two-day hiatus. Fortnite has re- emerged with all new features, Paul La Monica will have to admit whether he's ever played it after the break.

(COMMERCIAL BREAK)

QUEST: For those who are involved, it was living hell, two days without Fortnite? Staring at a blank screen. Well, now Fortnite is back online and

it has a new chapter. Users began to panic on Sunday when the old landscape blew up, tracking players into a black hole literally. The

hugely popular video game now features a fresh landscape and previously unreleased weapons.

Paul La Monica is with me. Paul La, I spent the break, the commercial break learning from my younger and more nimble colleagues about how to play

this game. But I was very taken by what you told me earlier. This was risky of Fortnite to go dark while they prepared for the -- or was it

really? Could they almost have known people would come back?

PAUL LA MONICA, CNN BUSINESS REPORTER: I mean, I would have to think that the people at Epic, the company behind Fortnite, probably had an inkling

that by doing this, they would clearly risk alienating some of their core gamers and make people get a little panicked about what's happening. I

mean, there have been all this hyped about season 11 for the game is coming.

And instead, they turned it around and said, well, forget about that, it's now chapter two of a new iteration of the game.

[15:45:00]

And having this black hole, I mean, Richard, the hilarious thing to me about this is that, you had people on Amazon-owned Twitch and YouTube owned

by Google owned by Alphabet staring at live video streams of people, their Avatars just staring at this black hole.

And obviously, it was compelling enough to keep people watching and engaged and wondering --

QUEST: Right --

LA MONICA: What's next? And if you can --

QUEST: Right --

LA MONICA: Do that as a media company because that's what these guys really are now. Media big games are media, it's -- you know, a feather on

the --

QUEST: But Paul --

LA MONICA: Cap for doing this.

QUEST: Paul La, we talked earlier, I was just learning, of course, that there's no entrance fee to play, and the only revenues come from these

various accessories that Epic sell you to play with the game, but they're not essential. You don't have to pay a penny to do this. But apparently,

everybody does.

And that's the -- and that's where the money -- it's a very strange business model.

LA MONICA: Yes, I think, you know, some might argue that it's, you know, no less strange than a media company selling ads and hoping that you get

enough clicks to generate more ad revenue. But let's be honest here, gamers know that to have the optimum experience with these types of games,

these titles, they need to have all the bells and whistles to enhance the experience of the game.

So Epic as well as other companies like Electronic Arts that are big in the gaming business, they sell these add-ons, it's a kind of premium model if

you will. And they generate a lot of money. I mean, Epic games which is backed by Tencent, you know, they were said to have brought in over $2.4

billion in revenue in 2018, just from Fortnite alone.

So, these are, you know, virtual goods in a not real environment. But it's very real cash for Epic games.

QUEST: Have you played it?

LA MONICA: I have not. My kids fortunately don't play it either, they just do all the dances which I am not going to embarrass myself --

QUEST: Yes --

LA MONICA: By replicating on live TV.

QUEST: You knew exactly where that was going.

LA MONICA: Of course, sir --

QUEST: Paul La Monica, absolutely. No, we've got to find -- we have to find a millennial in the office who can teach Egan, you and me, at least,

how to play this thing.

LA MONICA: No, my kids could do it, but I don't let them play, I just let them do the dances.

QUEST: Right. I think we've heard more than enough about Fortnite for the moment. As you and I continue tonight, Mark Zuckerberg's new friends are

garnering him, trying to fuse 'dislikes' following reports of secret meetings with conservative figures.

(COMMERCIAL BREAK)

[15:50:00]

QUEST: The Chief Executive of Facebook Mark Zuckerberg is now under fire for the latest edition to his friends group. It comes after a report that

Zuckerberg held private dinner meetings at his home with conservative -- leading conservative figures. He reportedly hosted the Republican Senator Lindsey Graham who accepted his friend's request, the "Fox News" anchor

Tucker Carlson who also indeed a conservative radio host, Hugh Hewitt amongst others.

Zuckerberg responded on Facebook saying "meeting new people and hearing from a wide range of view-points is part of learning. If you haven't tried

it, I suggest you do. To be clear, I have dinners with lots of people", he goes on to say. Brian Stelter joins me from New York.

BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Right, as to dancing, right?

QUEST: And quite -- yes, absolutely, listen, quite simply, Zuckerberg's right, isn't he? He's absolutely right. There's nothing wrong with him

meeting the leading conservative opinion-makers in the United States.

STELTER: I think it's a smart strategy for Zuckerberg. He's been criticized for the past several years by the likes of Tucker Carlson on

"Fox". Carlson is often times calling out Facebook and other big technology companies. So, it makes sense to bring those men and women in,

have conversations with them. Try to get them to see it Zuckerberg's way.

I did think there was a major reaction, said this scoop by "Politico" though. For example, Democratic politician Bruno Wu(ph) saying, hey, if

Zuckerberg likes talking to people he disagrees with so much, he should invite Elizabeth Warren over next. Warren of course, calling for the

break-up of Facebook and really challenging the big term companies.

And Warren is just reacting to the "Politico" story. Also today, saying, hey, this is a problem, we need to take a look at this, Facebook should not

be intimidated into allowing lies and propaganda to be promoted on their website.

So, Warren using this as a campaign issue -- I don't know if she'll be getting an invitation to dinner with Zuckerberg any time soon.

QUEST: It's going to be very interesting, though, the way in which those like Warren are using social media to engage directly with their critics,

and their critics responding. That seems to be the difference. The old -- in the old days, you just ignore it. But now, there seems to be an

engagement of battle.

STELTER: These companies have come a long way in the past couple of years. And that's absolutely true. You can really market to the 2016 election and

the shocks that resulted from the fake news scourge and the surprise of Trump's victory. These technology companies, Facebook, chief among them

have had to really change their strategy.

You're seeing Facebook once in a while give more interviews, bring reporters in, bring lawmakers in, they're at least trying to step up their

game. I would argue several years too late. And these meetings with Zuckerberg are one part of it. But look, he's only one person, he only has

so much time. The company has lots of other ways, it's also trying to influence people and bring them along for the ride.

QUEST: Want to quickly change subjects, Brian. I know you've been talking a great deal about the Ronan Farrow book and the allegations and what's now

being seen within corporate America. NBC is in the firing line along with others. We've got a situation now where corporations are defending

themselves against -- I mean, having been saying we will go out forefront and sort it out or we would get rid of the miscreants, now, they're having

to defend themselves against what they may have done or not --

STELTER: Yes, and this book is really a reckoning, it's called "Catch and Kill", it hit bookstores today in the United States and in some other parts

of the world, although, there have been some legal challenges to this book in certain territories including Australia. This book is a reckoning for

"NBC" about why it let Farrow walk out the door with his Harvey Weinstein investigation.

Why didn't "NBC" publish his reporting? That's at the heart of this story, it's really a mystery, Farrow alleges a corporate cover-up. He says there

are systems designed to enforce silence that need to change. And he's talking about secret settlements, payouts to women who allege harassment.

He's saying "NBC" is a part of the problem, "NBC" is denying that, saying there was no cover-up and his reporting just wasn't ready.

But the book is remarkable for that reason because it gets into those nitty-gritty details. And it's a reminder that two years into the Me Too

movement, there's still a lot that's happening. There's still a lot of fallout as a result of this movement. And there are still some people

having to be dragged along the way. Farrow says "NBC" is one of those, in this case a corporation that isn't making enough changes.

He is saying the company had lots of secrets --

QUEST: Right --

STELTER: That it was trying to keep.

QUEST: Brian Stelter, always good to have you --

STELTER: Thanks --

QUEST: By the way, have you played Fortnite? Have you played Fortnite?

STELTER: Of course, I love Fortnite? When is it going to be back?

QUEST: Well, it is back, and you can --

STELTER: Oh!

QUEST: Come downstairs --

STELTER: All right, great --

QUEST: You can come downstairs and give Matt Egan, Paul La Monica and myself a tutorial --

STELTER: I will --

QUEST: On how to play it.

STELTER: I've got to go, I'll see you on Fortnite.

[15:55:00]

(LAUGHTER)

QUEST: Oh, Brian Stelter, right, why am I not surprised at Brian, of course, he's an aficionado, probably a leader up there. Don't forget the

next Democratic presidential debate hosted by CNN and "The New York Times", it starts four hours from now in Ohio, 1 O'clock in the morning, if that is

too late for you, it does replay on Wednesday morning, 6:00 a.m. London, 7:00 a.m. in Paris.

And the last few minutes of trade on Wall Street. Well, we've given back a bit of the gains, just 40 points or so, but the S&P and the Nasdaq are up

by more than 1 percent. The Dow is 1 percent, it is strong earnings, you've got United Health, JPMorgan. There's the Dow 30, UHG at the top,

JPMorgan, Caterpillar, that's trade talks, strong showing.

So, if you come down to the bottom and you wonder why, I'm guessing it's all individuals for example. Boeing will be down just on problems of 73

and the usual stuff. We will take a profitable moment after the break. There's a market for you, good day.

(COMMERCIAL BREAK)

QUEST: Tonight's profitable moment. So, the black hole that was there for two days with Fortnite -- and you've got to admit the sheer bravado,

chutzpah, whatever you want to say of Epic to actually go dark for two days without telling anybody what was happening and then come back not within

new game or a new iteration, but a new chapter.

Now, as we told you tonight, Fortnite doesn't make money through playing, but you make money by having to have skins and having to -- all the

accessories. And my colleagues Scotty(ph) and all of them were just texting me one after the other that basically suggest costing them a

fortune because their children are playing.

Everybody seems to have a Fortnite story which clearly means, I need to learn how to play it. You've got to admire whether you like it or not,

whether you think it's addictive or you think it should be banned. You've got to admit that somebody that makes money with this sort of project or

this sort of model is worthy of respect, particularly when they take a risky strategy, oh, and they try to increase the business and bring in a

new version.

And that is QUEST MEANS BUSINESS for tonight, congratulations to Ronan on your first program. I am Richard Quest in London, whatever you're up to in

the hours ahead, I hope it's profitable. The market -- the day is -- the Dow is up, the day is done.

(BELL RINGING)

END

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