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QUEST MEANS BUSINESS

U.K. Police: Thirty Nine Bodies in Truck were Chinese Nationals; Lebanese President Addresses Nation Amid Protests; President Trump Thanks Republicans for Defending Him as Democrats Try to Impeach Him. Aired 3-4p ET

Aired October 24, 2019 - 15:00   ET

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


[15:00:11]

RICHARD QUEST, CNN INTERNATIONAL HOST: Sixty minutes left to trade on Wall Street, and we look at the way the market has gone -- down, but as I often

say, when we see this sort of day, there`s a little bit of a blip there of green. Paul La Monica will explain why that is there.

The rest of the session has been down, but not by much. Just 50 odd points. Hardly really worth talking about when you put it into the context

of what`s happened.

Those are the markets and these are the reasons why.

Tonight on this program, Donald Trump`s top trade adviser says the U.S. deal with China is almost complete, although it could still fall apart.

Wild swings from some of Wall Street`s biggest stocks. Twitter for example tumble sharply. Tesla soars, 20 percent in either direction. It is the

busiest day of the earnings season so far.

And arrivederci, Super Mario. The ECB Chief delivers his final interest rate decision.

Tonight, we are live in the world`s financial capital, New York City on a Thursday, October the 24. I am Richard Quest and yes, I mean business.

Good evening. We begin tonight, Donald Trump`s top trade adviser, Peter Navarro, who on this program will tell us, the U.S. might get left at the

altar in a trade deal with China.

It comes on the day the U.S. Vice President made a strong attack on China`s trade tactics and accused some U.S. businesses of being too quick to cave

to Beijing`s demands.

Meanwhile, earnings reports from major U.S. companies show business chiefs fears are coming to pass. The White House`s trade war is raising costs,

squeezing profit margins, and Mike Pence says the U.S. isn`t backing down anytime soon.

(BEGIN VIDEO CLIP)

MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: America will stay the course. The American people and their elected officials in both parties

will stay resolved. We will defend our interests. We will defend our values, and we will do so in a spirit of charity and goodwill for all.

(END VIDEO CLIP)

QUEST: Now, the White House has been adamant that Phase 1 of the deal with China is secure and that it is a significant step towards a wider deal.

So a while ago, Peter Navarro, the White House Chief Trade Adviser joined me and I asked him well, the U.S. administration is talking about Phase 1

deals and seems very optimistic, but Beijing`s message is much less optimistic.

(BEGIN VIDEOTAPE)

PETER NAVARRO, DIRECTOR, WHITE HOUSE OFFICE OF TRADE: The best thing for investors in particular to do is not pay attention to the press releases of

either side, right? It`s all happening. The White House rule is, all negotiations happen behind closed doors.

So we have firm commitments from them that we will have a Phase 1 deal. They were good faith negotiations. They`ve left us at the altar before,

maybe this time, we`ll get the deal, but so far --

QUEST: So it is a real deal? Phase 1 is real?

NAVARRO: Well, I can tell you -- I can tell you what`s in it.

QUEST: But a lot of people that I`ve spoken to have sort of said this is smoke and mirrors.

NAVARRO: Of course, it`s a real deal. Okay. I can tell you kind of kind of chapter and verse what`s in it.

The centerpiece of it is an enforcement mechanism that will apply to all phases. That`s -- we can`t have a deal without strict enforcement and it`s

going to be an enforcement mechanism that allows us rapid response to any violations.

Now having said that, the most important part of the deal when this is fully formed, is the intellectual property theft.

We get virtually the entire chapter that we had from 150-page agreement. There`s a good start on forced technology transfer, there`s good stuff on

currency manipulation. Some things are not in there -- dumping subsidies, for example.

QUEST: So if this is Phase 1, Phase 2, and Phase 3 are still to come.

NAVARRO: Yes.

QUEST: Which means these tariffs are going to remain for some time. The wider economic effect of these tariffs has created a level of uncertainty,

but just about every economist we speak to on this program says it`s the uncertainty caused by your trade tariffs that`s now harming the global

economy.

NAVARRO: I strongly disagree with that premise. First of all, there`s two big economies to look at. There`s China and then there`s Europe.

With respect to China, there`s no investment uncertainty. Basically, companies know that they don`t need to invest anymore in China, the supply

chain is moving to Vietnam, Malaysia, Indonesia and Thailand.

[15:05:00]

NAVARRO: There`s no investment uncertainty. The problem, in my judgment is a slow European economy, which is primarily driven by high taxes, high

regulation in Germany, which is too heavily export dependent. Doesn`t the consumer invest enough? It desperately needs fiscal stimulus.

QUEST: But Germany is suffering because China is slowing down.

NAVARRO: Correct.

QUEST: And China is slowing down because of the tariffs.

NAVARRO: You`re absolutely right and so --

QUEST: Therefore, your tariffs are transmitting themselves.

NAVARRO: There`s no therefore. Therefore, the correct therefore, Richard, is the Germans could kind of look in the mirror and say, you know what, we

don`t want to be 50 percent dependent on exports for growth. We want to basically have a domestic economy that`s strong, therefore, we need fiscal

stimulus. We need tax cuts. We need deregulation.

We need the Trump recipe for growth in Europe. Yes. Now think about it. It`s working here. Strongest economy in --

QUEST: Well, let`s not -- let`s not go too far.

NAVARRO: Lowest unemployment rate, Richard.

QUEST: Rising deficits.

NAVARRO: Since the man walked on the moon.

QUEST: Rising deficits from a Republican administration that must be --

NAVARRO: I`ll do one, you do one. We`ll see who runs out of stuff first. Six million jobs. Half a million manufacturing jobs; 3.5 percent

unemployment rate, $66,000.00 average median household income, up eight percent.

Remember during Bush and Obama-Biden it was flat.

QUEST: Greater growing inequality in the United States.

NAVARRO: Oh, you anticipated. The greatest part of the income that`s being generated is going to the bottom decile. In other words, the blue

collar workers are the ones that are reaping the disproportionate benefits.

QUEST: The number of uninsured healthcare Americans rising for the first time in years.

NAVARRO: This is a good game. Three thousand approvals of generic prescription drugs saving $26 billion for the American people who need

pharmaceuticals.

QUEST: But not for those who aren`t insured. Anyway, we`re good -- let`s move on.

NAVARRO: Okay.

QUEST: I want to talk about deficits because the republicans are supposed to be anti-deficit or at least trying to get towards a balanced budget.

NAVARRO: Sure.

QUEST: The deficit has risen faster. Let`s not forget 2008-2009 because that was exceptional spending. Those times were --

NAVARRO: Well, let`s not forget that Obama doubled the deficit from $10 trillion to $20 trillion.

QUEST: For understandable reasons.

NAVARRO: With Joe Biden cheering on.

QUEST: For understandable reasons because they were trying to prevent the collapse of the economy.

NAVARRO: Well, no --

QUEST: More to the point --

NAVARRO: We can argue about that. That`s an interesting discussion. I would argue that instead of cracking down on China and getting our

factories back, they pursued the road to Keynesian ruin, mistaking a structural problem for a --

QUEST: Well, I am not revisiting the great financial crisis. We`ll have to save that for another day.

NAVARRO: That was two or three years. They were in office for eight.

QUEST: The method of decision making in the White House.

NAVARRO: Sure.

QUEST: Is it appropriate that we find out about higher tariffs by a tweet? There seems to be no policy -- formal policy making. It seems to be at the

whim of the President.

NAVARRO: I strongly disagree with that premise. If you just simply look at trade policy, we have a trade team that consists of myself, Larry

Kudlow, Steve Mnuchin, Wilbur Ross, Bob Lighthizer. We meet once a week religiously, amongst ourselves often in the Situation Room. We meet at

least once a week with the President and we have informed discussions.

The beauty of our five team is that we have a very diverse set of views. The President loves that. I think he makes his best decisions by listening

to diverse views.

And if he has tweeted something on whatever, it`s certainly because we`ve done weeks or months of discussions and prep work before that. So, I

disagree with that.

QUEST: So you`ve never -- you`ve never discovered a tariff move by tweet.

NAVARRO: No, of course not. Of course not, no. Look, I think we have one of the best trade teams and economic teams in modern history and the

strength of it is from its diversity of opinion.

You`ve got, you know, Steve and Larry who are kind of from the Wall Street and I`m kind of like the Main Street guy. Lighthizer spent years in the

trenches understanding trade dating back to the Reagan years and he was --

QUEST: Why does it feel --

NAVARRO: He was a star in his own right during the Reagan administration.

QUEST: So why does it feel haphazard or ad hoc? Why does it feel as if the President turned a page and decided to tweet tariffs were not going up

or they were going up. Well, they weren`t going well. Because that`s what people say.

NAVARRO: No, it doesn`t feel that way to me. All I can tell you is, listen to the Trump signal, ignore the noise. The Trump signal is

basically, he goes back to the campaign, focus on creating good jobs, good paying jobs especially for the men and women of America who work with their

hands, secure borders, and protect our national security.

[15:10:16]

NAVARRO: And if you look at just that, and ignore the circus, the Capitol Hill dysfunction, and all of that, life is pretty good --

QUEST: One could arguably say, the circus of both ends of Pennsylvania Avenue. But anyway --

NAVARRO: You know, the thing about -- there`s a great new biography about P.T. Barnum that I was looking at and reading that, the hucksterism that`s

coming out of the Democrats right now seems a lot more akin to P.T. Barnum than anything that might happen on the other end.

(END VIDEOTAPE)

QUEST: Peter Navarro who joined me earlier for a spirited discussion on trade. Now, at the corner of Wall and Broad in Lower Manhattan, it is the

busiest earnings day of the season. Nearly one in 10 companies on the S&P 500 are reporting today.

You`ve got big names like Amazon, Intel, American Southwest, and of course Tesla, which reported after the bell last night. So we`ll lump it into

today because that`s the first chance we`ve had, a real reaction.

And you have a clear, of course, you have some other stocks here. We have also Northrop Grumman. Interesting because you get a good view of the

overarching economy from strong manufacturing or heavy manufacturing to social media, to banking to travel and aviation.

The bottom though is falling out of Twitter`s stock. Now, while it added plenty of users last quarter, it struggled to sell enough ads to save them.

Half of Twitter`s share price gains are now gone. It`s now down some eight percent, but it was down nearly 20 percent at one point.

So it was down 20 percent, now it`s down just -- I say just eight percent. Oh, I do beg your pardon, do forgive me. I`m looking at the wrong side

here. It`s down 21 percent. I thought that was very surprising.

It is heavily off. It is off down at $30.00.

Paul La Monica, I was momentarily overwhelmed by what was happening at Twitter stocks.

PAUL LA MONICA, CNN BUSINESS REPORTER: It`s a lot of red for Twitter today.

QUEST: Why?

LA MONICA: Yes, Twitter -- the issue with this company is that they have to turn user growth into better revenue gains and profit growth. They did

have a bug that affected some of their advertising in the quarter. That was a problem.

But I think there is this overarching concern about Twitter even though as you pointed out in your spirited interview with Mr. Navarro, the President

loves to tweet, but presidential tweets do not necessarily make Twitter the best social media company out there.

These are not great numbers and you look at some of their other social media companies, they may not be apples to apples entirely, but Snapchat

which I know you love, they are up today.

QUEST: Just looking to see.

LA MONICA: Pinterest is up. Facebook is kind of flat. Obviously, Facebook has a lot of issues of its own, but Twitter didn`t drag down

social media. Investors are looking at what`s going on with Twitter as Twitter specific problems.

The good news for Jack Dorsey is, his other company, Square, is actually up pretty nicely today.

QUEST: So when we talk though about what`s happened with Twitter, the stock fell very sharply a couple of years ago. It pulled itself back

because there was a feeling that things were getting better. Are you saying that`s now no longer the case?

LA MONICA: I think they are still going to continue to struggle with this notion that they are maybe a bit of a niche social media company.

Obviously, they`re very important.

But in many respects, it`s inside baseball. I mean, yes, people in our industry can`t live without Twitter. My mom is not on Twitter. I know

everyone in my family is on Facebook, and they`re increasingly on Instagram, which oh, yes, that`s owned by Facebook.

So I think Twitter -- everyone loves to mock Facebook because everyone`s on it now, but the ubiquitous of Facebook is what makes it a billion dollar

industry where you know, Twitter is still struggling.

QUEST: Let`s talk Tesla.

LA MONICA: Yes.

QUEST: Tesla shares. Now, the stock is that more than 16 percent. Tesla unexpectedly reported third quarter profit. It is the first time the

electric car maker has been profitable in three quarters. It says progress at its Shanghai factory is ahead of schedule. Are Tesla`s problems behind

it?

LA MONICA: I wouldn`t go so far as to say that the problems are behind it. Tesla has obviously had production issues in the past.

Elon Musk, last I checked, still has a lot of balls he is juggling in the air because of SpaceX, the Boring Company, that`s always going to be an

issue as long as Tesla has a bit of a brain drain in their own management ranks.

But give credit where credit is due. This is a company that for this quarter, profitable solid sales with Model 3 and you`ve got the Model Y

coming, the Giga factory in Shanghai is ahead of schedule. Model Y ahead of schedule.

[15:15:00]

LA MONICA: So for now, all things look good for Tesla and Elon Musk. But that can change in a heartbeat.

QUEST: Right. But it`s the sustainability ...

LA MONICA: Yes.

QUEST: ... of the profitability that is that the market is seeking. Is there evidence in this earnings report of that sustainability?

LA MONICA: Yes. Expenses have come down and I think that is a key positive for Tesla. And also, it is very important that Tesla can still be

profitable, as it shifts more to the Model 3 and then the Model Y. When that comes, because those are going to be vehicles that are not as

expensive as the Model S and Model X, so if they can make money off of the quote unquote "cheaper cars," that`s great news for Tesla.

QUEST: Good to see you. Thank you.

LA MONICA: Thank you.

QUEST: Let`s not wrap up the markets though. We have another 45 minutes of trading in U.S. stocks. They are just off 33 points.

The Dow is around -- I mean, you get the idea. Paul is still with it, any particular reason why we have a blip at the beginning and a market down

throughout the rest of the day.

LA MONICA: I have no idea where you had that blip. I think it`s a bit of an anomaly. I mean, we were down most of the day, but we`re not down all

that much.

And if you look at the other indexes, S&P 500 and NASDAQ are up. A lot of the Dow is down today because of 3M.

QUEST: You say indexes, I say indices.

LA MONICA: Tomato, tomato --

QUEST: We`ll discuss it a little bit later. As we continue, in a moment, Chile`s President says sorry for decades of economic injustice. The

protesters are on the street and the governments all over South America are trying to deal with inequality as best they can, in a moment.

And Mario Draghi keeps the door open to even more stimulus in the ECB. He is now leaving and the Central Bank is deeply divided over his policy, in a

moment.

(COMMERCIAL BREAK)

QUEST: The Chilean government has extended curfews in the capital for a sixth day. A presidential apology has done little to quell the protests.

At least 18 people have been killed since demonstrations began on Saturday. The President has apologized for decades of problems and is promising more

social and economic reforms.

The government has already canceled a planned rise in electricity prices.

CNN`s Dario Klein is in Santiago. It`s a noisy day for you. I realize you`re having difficulty hearing me. What is the mood at the moment?

DARIO KLEIN, CNN EN ESPANOL CORRESPONDENT: Hi, Richard, it`s pretty hard to listen to you. We are here in Italia Square. This is the place where

people has been gathering every day since the protest started here in Chile.

[15:20:09]

KLEIN: Well, today here, in the air, is still floating a lot of teargas that has been -- they have been throwing every day, the military police,

but actually right now, people here is singing, is dancing and is saying, Chile has waken up. That`s what -- that`s their motto. That`s what they

say all the time. Chili has waken up.

This is something that started, but nobody knows how it is going to end and people right now, it`s becoming a sort of a party right now.

But the last days, these parties have ended with confrontation with military police, throwing teargases, water with irritant for the skin and

bullets -- rubber bullets.

Actually, the National Institute of Human Rights has said that there are more than 15 people who disappeared, besides the 18 people that has already

been dead and they are investigating five people that are dead, that they don`t know the reason, plus 30 people that have filed suit for torture,

abuses on seven women that are being investigated about raping.

That`s all the information of the National Institute of human rights. Actually, the Human Rights Commissioner, Michelle Bachelet, she is Chilean.

She will come here probably next week to investigate the situation of human rights here in Chile.

So this is the situation. Right now, there is no violence, but I`m seeing that the military police is arriving right now. So we don`t know what`s

going to happen later -- Richard.

QUEST: Thank you. Stay safe and come back when there`s more to report. Chile is just one of many South American countries that has been gripped by

protests. And they all seem to have a different spark in some shape or form.

But continent-wide, you get a view that things are deeply unhappy at the moment.

Let`s start with Chile, and the issue, of course, the thing that started it up was subway fare increase.

Now the subway fare increase was the trigger. However, that was later suspended. And now as you`ve heard, they are protesting wider economic

inequalities, living costs and rising debt that`s making it just about impossible for people to live.

Go further north into -- within the region, and of course it is Ecuador. The trigger in Ecuador was a fuel cuts or the subsidy was being cut. Now,

that has also been suspended by the government.

However, in the case of Ecuador, you`re talking about policies, which are linked to IMF funding and the various mechanisms from that. And the IMF,

of course, also comes along when we deal with one of the largest countries and economies in the region. It is, of course, Argentina, which of course

has had its own issues with its IMF program.

Now there, the protests have been going since late last year, and the trigger was specifically the IMF conditions of the bailout.

But the important thing is the underlying factors. It`s the same in many of the cases. It is firstly, falling commodity prices -- falling commodity

prices that`s reduced government revenues.

As those revenues have gone down, so the public debt, the debt to GDP ratios of South America. Now, we`re only talking -- bearing in mind after

the global recession in 2011, which you`re talking about 50 percent.

Now, you`re heading up towards 80 percent on debt to GDP as the governments continue to cut services.

Joining me from Washington, independent political analyst, Juan Carlos Hidalgo to put this in perspective. How much of the problems are the

issues of their individual governments of mismanagement over many decades?

JUAN CARLOS HIDALGO, INDEPENDENT POLITICAL ANALYST: There has been a lot of mismanagement. Some of these governments, for example, the one in

Ecuador, the one in Argentina have been trying to tear the mess that they inherited from previous socialist governments.

This pink tie that many people talk about that came into power in many governments in Latin America the early 2000s and they stayed in power until

like 2015 or so, they also -- it also coincide with that rising commodity prices.

So these governments used that bonanza in order to increase in spending, create a lot of social benefits, but then when the prices of commodities

fell down, they left the fiscal mess that these other governments have been trying to clean up, but of course, that`s filled with political landmines,

cutting subsidies, freezing salaries in public employment, and so on.

[15:25:00]

QUEST: So if those are the -- I mean, the problems are well known, and the usual economic answers are austerity, cutting of subsidies.

But as you`ve seen in both -- in all three, the reversal of the policies to accommodate the protesters, I mean, at the end of the day, that`s not going

down if you still owe the money, and you`ve still got an economy where debt to GDP is rising, and you`ve got rising budget deficits. So, sir, what is

the solution?

HIDALGO: Indeed, in the case of Ecuador, people knew already from a couple of years ago that fuel subsidies needed to be cut, it was one of the low

hanging fruits in terms of trying to bring down spending. We`re talking about $1.3 billion.

However, the President was afraid of doing this. We know that that`s extremely toxic when it comes to his politics that their rail of politics

is cutting fuel subsidies. And he eventually did it under an IMF bailout when his popularity was already down, so the consequences were clear.

In the case of Argentina, the same. President Macri adopted gradualism instead of implementing what is called shock therapy, cutting spending, he

decided to bet on cutting spending gradually, trying to bring inflation down by substituting inflation for foreign debt. It didn`t work and

inflation went really high.

QUEST: So what -- I mean, I know you can`t really say one size fits all. It`s a vast area. But they are all in the same region of the world.

They`re all suffering similar economic problems that traditionally required austerity or cutbacks, which they can`t do. What`s the answer?

HIDALGO: I think the answer is conveying the message to the population that austerity needs to be implemented, that governments cannot live beyond

their means, because that has consequences regarding growth, that has consequences regarding creation of wealth, and that has consequences

regarding investment and employment.

Unfortunately, these Presidents tried to sell the message that reforms are going to be easy to swallow when that`s not the case.

QUEST: Good to see you, sir. I really appreciate you taking time. We`ll talk about this more in the future.

Now as we turn to Boris Johnson, he says that if Parliament wants more time to study his Brexit plan, they can have it. The catch -- a general

election on December the 12th, in seven weeks. Parliament will vote on that on Monday.

This is QUEST MEANS BUSINESS tonight live in New York.

(COMMERCIAL BREAK)

[15:30:00]

QUEST: Hello, I`m Richard Quest, there is more QUEST MEANS BUSINESS in just a moment. We`re live in London, Boris Johnson is calling for a

general election and before Christmas, if you please. And Mario Draghi has delivered his last rate decision as the president of the ECB.

Now, we`ll take a look at where Europe`s Central Bank goes from here. As we continue, this is CNN, and on this network, the facts always come first.

The police in the U.K. say all 39 people found dead in a truck container were Chinese nationals, they were eight women and 31 men. Police in Essex

don`t yet know how they died. They are extending the custody of the 25- year-old driver who was arrested on suspicion of murder.

After the largest demonstrations in a decade, the Lebanese President Michel Aoun has addressed the nation, telling protestors that their rallies would

not be wasted. He promised to fight state corruption which he said had eaten the country to the bone, and says he`ll listen to the protesters

demands.

In Bolivia, angry protesters are taking to the streets, accusing authorities of fraud. They claim Sunday`s vote was rigged, and say

President Evo Morales is trying to steal the election. Many of the results initially indicated a tight race only hours ago. President Morales has

declared victory, but said, he`s open to holding a runoff if necessary.

President Trump has tweeted his thanks to house Republicans for being tough, smart and understanding in what he calls the greatest witch-hunt in

American history. His gratitude comes a day after a group of Republican lawmakers barged into a closed door deposition demanding transparency in

the impeachment process.

Remains of Spain`s former dictator, General Francisco Franco have been exhumed and will be reburied at a cemetery north of Madrid next to his

wife. His remains were taken from an elaborate state mausoleum where he was buried in 1975. The plan was approved by Spain`s socialist government.

However, it was opposed by Franco`s family. The fascist leader ruled Spain from the late 1930s until his death.

Let`s go to Brexit. Britain`s opposition leader has just said that the Prime Minister Boris Johnson can have the election he wants if and only if

he takes a no-deal Brexit off the table. Mr. Johnson says if lawmakers want more time to study Brexit deals, they can have it only if they agree

to a general election which he wants to call on December the 12th. He explained why setting an election date is important.

(BEGIN VIDEO CLIP)

BORIS JOHNSON, PRIME MINISTER, UNITED KINGDOM: The reason for having that deadline is because otherwise I don`t think the people of this country are

going to believe that parliament is really going to do it by that deadline. Where they spent three and a half years failing to do it, so let`s get it

done, and let`s come out of the EU.

(END VIDEO CLIP)

QUEST: Now, the Prime Minister has caused part a small sell off, and the pound which have been creeping higher in recent weeks, but not much. Nic

Robertson is following all the -- following the developments for us in London. Nic is with us. Now, just clarify one point for me, Nick. Would

--

ROBERTSON: Only one?

QUEST: Would the EU`s granting of the extension to the end of January, would that be sufficient no-deal Brexit off the table for the purposes of

Corbyn agreeing to an election?

ROBERTSON: I don`t think so. I`ve just looked at his statement, it was quite a brief statement. He answered a couple of questions, and this was

just 30 minutes ago. And the last line of when he was questioned he said, you know, on the issue of a -- of Boris Johnson always having this threat

of a no-deal Brexit, he seemed to be implying here into the transition phase, that transition phase that`s supposed to end on the end of December

2020, 14 months away. And the reason I say that is because he says --

QUEST: Right --

ROBERTSON: That this is in the legislation that Boris Johnson is trying to push forward, and there was a proposed amendment to get around that, to

have parliament be able to essentially ask for more extensions from the European Union --

QUEST: But --

ROBERTSON: For the transition period.

[15:35:00]

QUEST: Right, it`s interesting. I mean, an election in the middle of December, two weeks before Christmas, normally, any politician would run a

million miles from this.

ROBERTSON: Well, to the point, the last time there was an election in December which was 1923, it ended up being a hung parliament, and surely,

Boris Johnson doesn`t want that. It`s not a popular time of year. There`s --Brexit has become unpopular and there`s a sense that people want to get

it -- want to get it done --

QUEST: Right --

ROBERTSON: And the idea that an election might clear the air. But no, it`s not a popular time, and the first reaction of Labor MPs just after

this was put forward by the Prime Minister was to say no.

QUEST: And of course, it`s a vote, the vote on Monday will require two- thirds majority, it`s not a simple majority. So, he really does need opposition support here. Let`s mind map it, Nic. It goes from where we

are now, EU grants the extension, either that is good enough for Corbyn and so he allows the election to take place or it`s not good enough for Corbyn,

no election takes place and there`s three months of arguing over the bill which has been paused anyway.

ROBERTSON: You know, but what you said sounds very logical, but there are so many moving parts to this, and one of those is when the EU announces its

decision, and there`s a sense that what -- they`re waiting for clarity from the British parliament. And there`s a sense that although the ambassadors

are meeting again tomorrow to discuss this, there`s a sense that what Boris Johnson has said today about an election and the possibility for a little

more time to negotiate the deal, it removes some of the clarity they thought was there.

And there`s a sense of the moment that we`re getting from Brussels that they may not in fact deliver their verdict on an extension until precisely

when and the nature of it and any details that may be held within that statement until perhaps after the vote on Monday. Of course, what we heard

from Jeremy Corbyn and his statement was, well, the EU is going to make its announcement tomorrow, being Friday. And the --

QUEST: Right --

ROBERTSON: So, if the EU doesn`t, then that clouds again what the Labor Party might do here. Look, as we both know, there are so many moving

parts. It`s very difficult to predict, but it is -- but this juncture, it just isn`t quite clear what it is going to look like --

QUEST: Right --

ROBERTSON: Going into the weekend.

QUEST: Have a good -- well, we`ll talk tomorrow. I`m sure that there`ll be developments. Well, Nic, thank you. In his last decision at the ECB,

the Central Bank President Mario Draghi left interest rates alone, and they`re at all time lows. The man credited with saving the euro, whatever

it takes also chose to stick to his controversial stimulus program to boost the Eurozone despite unprecedented levels of dissent the policy has caused

within the governing board and officials.

Speaking earlier, Mario Draghi described how he sees his legacy.

(BEGIN VIDEO CLIP)

MARIO DRAGHI, OUTGOING ECB PRESIDENT: If there`s one in general that I`m proud of, it`s the way in which the governing council and myself have

constantly pursued our mandate. This is something we collectively should be very proud. This is -- this is part of our legacy. Never give up.

(END VIDEO CLIP)

QUEST: Fabio Balboni is the director and Senior European Economist at HSBC, he joins me now. Good to see you, sir. I was reading your

interesting comments that first of all, the decision obviously today to continue with the monetary actions, but the reality is, it`s not going to

be enough. If there`s monetary easing will not solve this problem, will it? It`s going to be what you call the fiscal bazooka.

FABIO BALBONI, SENIOR EUROPEAN ECONOMIST, HSBC: Yes, well, absolutely. And I think Draghi was a pretty clear -- pretty clear about that, he said

we are certainly what we`re doing is helping, but for us, it will be so much easier if the fiscal authorities would help us a little bit more.

Unfortunately, I mean, you have seen now why nothing -- what I also argue is that there is no fiscal bazooka in the Eurozone.

There`s more like a water pistol if anything, and that`s because, you know, we are looking at a very mild expansion or fiscal policy, about .4 percent

of GDP, so that is dwarfed, for example, by what is happening in the U.S., and that almost certainly will not be enough --

QUEST: OK --

BALBONI: For the ECB to get anywhere near their inflation mandate.

QUEST: So, if the governments don`t play along and only deploy the fiscal water pistol, what happens? Because monetary policy can`t prevent -- can`t

do anymore. Your exact words were, the ECB has done what it can.

[15:40:00]

Now, in that scenario, what happens to the Eurozone economy?

BALBONI: Well, first of all, there`s -- the Eurozone is fundamentally and externally-driven economy and for a lot of what will happen in the Eurozone

depends on what happens globally. And there`s a scenario here where things do take a turn for the better or at least, they stop deteriorating, and

that in itself should be a relatively good scenario.

Of course, you know, we`re not going to see growth in excess of 2 percent like we had in 2017, but at least growth could return towards a rate that

are --

QUEST: Right --

BALBONI: Closer to potential growth, about one and a quarter. But of course, if things do take a turn for the worse, and we`ve seen some pretty

bad data again today out of the Eurozone --

QUEST: Sure --

BALBONI: The PMIs are falling, there are signs of contagion --

QUEST: Well --

BALBONI: Between the manufacturing and the -- and the services sector. Well, then, it will come down to an existential question for the Eurozone.

And I think you know, we -- you were speaking before about Draghi`s legacy. Clearly, one of Draghi`s main legacy is the euro itself, but now it is up

for the political, fiscal authority to take the next step --

QUEST: Sure --

BALBONI: And so far, we have lost five years in terms of integration. Draghi for example was today very clear that one very obvious things that

the Eurozone -- any monetary unit needs is a common budget, and so far, there still is no agreement on the Eurozone to have anything like that.

QUEST: Good to see you, sir, I appreciate it, thank you very much indeed.

BALBONI: Thank you very much --

QUEST: Now, for WeWork, space is the place. A deep dive into just how it`s disrupted so much of it after the break.

(COMMERCIAL BREAK)

QUEST: The former WeWork Chief Executive Adam Newman will be getting a multimillion dollar severance package as SoftBank bails the company out to

the tune of several billion dollars. Staffers are outraged that Newman is generously rewarded for bringing the company to the brink of failure, and

horrified naturally that their own jobs could be in serious risk.

WeWork set out to disrupt the traditional office space model. In some ways, it did exactly that. Now as Clare Sebastian reports, its financial

troubles could absolutely cause disruption of a very different kind.

[15:45:00]

(BEGIN VIDEOTAPE)

BILL RUDIN, CHIEF EXECUTIVE OFFICER, RUDIN MANAGEMENT COMPANY: We`re coming into dock 72 and we --

CLARE SEBASTIAN, CNN REPORTER (voice-over): It`s sad to say WeWork`s newest New York City location comes with a pretty stylish commute.

(on camera): How much of the building is acquired by WeWork?

RUDIN: They`ve got about 220,000 feet, which is about a third of the building. Welcome to WeWork at dock 72.

SEBASTIAN (voice-over): So, Bill Rudin, a major New York City developer, this is now the second time he`s taken on WeWork as a tenant.

RUDIN: This is the main lounge area, coffee --

SEBASTIAN: He`s also an early investor in the company and despite its failed IPO attempt and spiraling losses, a true believer in the business.

RUDIN: If you look at the space and what we`ve created together with WeWork and Boston Properties, it really I think resonates in terms of where

the real estate market is headed in terms of co-working and flex space. They were probably growing a little bit too fast, and now, they`re going to

throttle back and I think have a more reasonable-paced growth.

SEBASTIAN: A little bit too fast may be an understatement. WeWork is now the biggest private office tenant in Manhattan, and between the second

quarter of 2018 and the same period this year, the company almost doubled its square footage in the U.S. according to a real estate firm CBRE.

DAN ALPERT, MANAGING PARTNER, WESTWOOD CAPITAL: The problem is, WeWork was an enormous leaser of space, of course, in the last three years, especially

the last two years. You know, they leased in this market alone over 3 million square feet of space. And so if you eliminate them, you may have

significant impact on pricing in the market.

CRAIG DEITELZWEIG, CHIEF EXECUTIVE OFFICER, MARX REALTY: So, this is our club floor.

SEBASTIAN: Developer Craig Deitelzweig says WeWork approached him six months ago, wanting space in this 1930s office tower, right by Grand

Central Station. WeWork declined to comment on this and didn`t respond to questions about its broader business.

DEITELZWEIG: They were willing to at least, well, in advance, and they were willing to pay a premium to be in this building.

SEBASTIAN: So, it was a pretty aggressive approach?

DEITELZWEIG: It was. They wanted to get our attention.

SEBASTIAN: The problem was, he wasn`t comfortable with their business model.

DEITELZWEIG: They signed long-term leases with landlords and short-term licenses with their customers. And the concern is, what happens during a

down-turn and all these tenants that are now leasing with them decide, you know, they don`t need to be in the WeWork, they could be in a coffee shop

or at their home.

SEBASTIAN: He now sees opportunity in WeWork in a different way.

DEITELZWEIG: We as a landlord, you know, we`re always looking to expand, and we`re looking at some of the buildings where WeWork has too much space

as a target for us to acquire in the future.

SEBASTIAN: Clare Sebastian, CNN, New York.

(END VIDEOTAPE)

QUEST: Fascinating. And when we return, the culprit behind Twitter`s earnings flop. The company says advertising software glitches are to

blame.

(COMMERCIAL BREAK)

[15:50:00]

QUEST: Mark Zuckerberg got a roasting on Capitol Hill, we talked about it yesterday over lawmakers who are angry, not only over the cryptocurrency

plans, and but also the question of political ads, and whether or not Facebook should be responsible for fact-checking their content. Are

politicians allowed to lie on Facebook in their ads?

Camille Francois is a former Google executive who`s tackled misinformation on social media. She`s now working to detect interference in the U.S. 2020

elections. She`s speaking at the Mokfest(ph) in London this weekend. She`s with me from Paris.

What is -- we`ve had a discussion, a debate in the office about this. What is so wrong? Why shouldn`t politicians be allowed to lie in their ads? I`m

not saying fake news business, but if a politician wants to put out an ad that`s got lies in it, that`s up to his opponents to point out.

CAMILLE FRANCOIS, CHIEF INNOVATION OFFICER, GRAPHIKA: I think that`s a great question. So, one of the main problems that we have when we talk

about disinformation is that it`s very wide in scope, right? People tend to put everything in that concept from things that your uncle says on Facebook

that you disagree with to much more sophisticated campaigns that run, for instance, you know, by the Russian government to manipulate elections.

And so now, you know, in this big concept of fake news, we have this new concept of stuff like what should politicians be allowed to say on the

internet, which is again, very different than preventing election interference from foreign governments.

QUEST: Right.

FRANCOIS: Or very different than educating people to have, you know, critical spirit when they read the internet.

QUEST: Because I can`t help feeling that in the last, you know -- the cry of fact-checking. Well, if you want to pay to spew a lie and it`s not --

again, we`re not talking here about -- we`re not talking about governments or trolling or anything like that, good old-fashioned, honest, miserable --

FRANCOIS: Yes --

QUEST: Political advertising, you should be able to do it. I mean, that`s a -- you know, is a what am I missing in the argument here?

FRANCOIS: You know, I`m in favor of free expression of people using their freedom of expression to say whatever they have to say on the internet.

But, again, I think it`s a very different story than finding actors who are pretending to be someone radically different --

QUEST: Right --

FRANCOIS: On the internet with the intent to manipulate audiences, right? So, for instance, the work that we just completed found Russian accounts

who were pretending to be American activists, who were pretending to be black activists, LGBTQ activists and who were really working to create a

division and chaos and to attack politicians.

That`s a very different story than people, you know, saying --

QUEST: Right --

FRANCOIS: Bullshit on social media, really --

QUEST: I agree. But is there -- do we stand any realistic chance of rooting out widespread systemic fraud of the sort you`re talking about. I

saw Facebook remove so many accounts and a quarter of a million followers and all of this, but you know, you`re kicking out the front door and

they`ll come in through the window upstairs.

FRANCOIS: Yes, and that`s the -- that`s the role of cybersecurity, right? It`s always a cat and mouse game. I think we`re slowly waking up to the

threat that our social media is being targeted by actors who are trying to manipulate their audiences, and that we just need to be on our toes and

make sure we`re able to detect those campaigns when they happen, to really -- you know, as you said, deactivate them and share the data about what

happened.

It`s always going to be -- I caught you on the front door, you`re coming back by a window, it`s kind of --

QUEST: Right --

FRANCOIS: It`s kind of the --

QUEST: So --

FRANCOIS: Role of cybersecurity these days.

QUEST: Do you get the feeling of -- Facebook clearly got caught with its pants down, sleeping on the job, ignoring what would have been a risk that

should have been spotted. But do you believe that they are now serious at dealing with and rooting out this issue?

FRANCOIS: Yes, listen, I`ve been doing this type of work for a few years now, and the difference between where we are now and where we were in 2016

is enormous. In 2016, it really was a taboo, a lot of the platforms didn`t even acknowledge that this sort of activity was happening. Now

indeed, you have people with clear policies --

QUEST: Right --

FRANCOIS: And that are really trying to apply them. You have entire teams that are dedicated to finding this type of activity online. I think we

really are in a better spot.

[15:55:00]

QUEST: Good to have you, thank you, come back again, when you`re in New York, come back here, we`ll discuss these issues --

FRANCOIS: OK --

QUEST: More, I appreciate it. Lovely evening tonight --

FRANCOIS: Sounds good --

QUEST: In Paris. Now, the last few minutes of trade on Wall Street -- well, we`ve had a bit of a resurgence, a bit of a recovery. Look at this,

we`ve come back up a bit, we were about 60-odd points down over here. We`ve now come back up again, only down four.

You know, we might just eke out a small gain when the thing finally finishes, 3M is at the bottom on the back of its earnings, bad earnings.

But by the same token, Dow is also up on good earnings. But this market today, Boeing is up strongly, possibly, its own factors. The market here

is being moved by -- for example, McDonald`s is still on an earnings bit of a thing as indeed is Caterpillar over there.

So, the market is on its own frolic with individual stocks responding particularly to their own factors like Microsoft, for instance or Visa and

Intel which will report after the closing bell. I will have a profitable moment with the market -- I don`t know will be positive at the close --

profitable moment after the break.

(COMMERCIAL BREAK)

QUEST: Tonight`s profitable moment -- so Peter Navarro on this program tonight, he specifically said that he`d never been taken back or aback by a

presidential tweet on tariffs. Nothing by surprise that there had been long policy negotiations and discussions beforehand. Well, I suppose

that`s a great relief that those in the White House are not merely the victims the rest of us seem to be of a presidential tweet that raises

tariffs, drops tariffs, extends them and then retracts them.

But I do question just how much notice anybody is getting. And I do wonder just how much of those presidential tweets when suddenly we`re told tariffs

will be added -- oh, no, they`re going down to 10 percent, they`re back up again. It`s the result of proper, coordinated policy-making versus a

president who has seen something on a rival television network and decides he wants to ratchet up the pressure.

If that`s the world we`re living in, so be it, we have to live in it. But every CEO I speak to says that it makes it more difficult to make business

decisions when trade policy is being made by tweet. And that`s QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York. Whatever you`re up

to in the hours ahead -- oh, it`s nice to be back in New York -- I hope it`s profitable.

(BELL RINGING)

That -- oh, we fell a bit more, the Dow is down, the bell is ringing.

END