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Quest Means Business
Lebanese Protesters Demand End of Political Standstill; Iran Makes Arrests in Ukrainian Plane Shoot-Down; Locust Invasion Poses "Unprecedented Threat" in Kenya. Aired 3-4p ET
Aired January 14, 2020 - 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, QUEST MEANS BUSINESS: In an hour's time, the closing bell will ring and the Dow may or may not be at a record.
Look at the way the day has gone, strong performance until lunchtime, and then a bit of a wobble, we will explain why that happened. The other
indices, the NASDAQ and the S&P, they are lower.
During the course of the day. Oh, this is what has happened. BlackRock has gone green. The world's biggest asset manager is making fighting climate
change a key pillar of investment strategy in 2020.
Stay with banking. The giants kicking off -- banking giants that is -- an earnings season. Excellent records and sending the Dow to new highs.
And long live the Alliance. Vive Alliance. Nissan cautious claim, it is planning breakup with Renault.
We are of course live in the world's financial capital, New York City on Tuesday. It's January the 14th. I'm Richard Quest and yes, I mean business.
CNN breaking news to start our hour. Violence on the streets of Beirut in Lebanon, as protesters are calling for a week of anger in the country. Now,
the protesters have blocked off streets as they march to the home of the man who is designated to be the Prime Minister.
The demonstrators wants a new government installed as quickly as possible focusing on the country's crumbling economy. Ben Wedeman is in the middle
of the demonstrations. He joins me now.
Ben, stay with me and keep talking until it's unsafe or whatever, or you feel you need to stop, at which case don't sort of hesitate to wander off.
Tell me what's happening.
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Okay, we're on Hamra Street, which is Beirut's equivalent of perhaps New York's Fifth Avenue
where we are right behind the line of riot police, and just about 70 meters up the road are protesters who earlier were outside the Banque Du Liban,
the Central Bank of Lebanon where they tried to get over the barricades that have been set up in front of the bank because of course, as you know,
the banks are very much the focus of the anger of many Lebanese who feel that the Lebanese financial system has been horribly mismanaged.
Many people can no longer have access to their savings accounts and whatnot. So what we've seen here on Hamra Street, is that for the last few
hours, there have been these running battles between basically young demonstrators and the riot police. Riot police firing dozens and dozens of
rounds of teargas. They've just brought in a few minutes ago two trucks with water cannons as well as another truck that fires multiple rounds of
teargas, trying to clear this road out.
But so far, they're having very limited -- despite firing all that teargas, and it's important to point out, Richard, that this isn't just a business
district. There are many, many people who also live in this part of town. So all of this teargas is just added disruption to the disruption that the
Lebanese have been living under for the last 90 days since these protests began -- Richard.
QUEST: Now when I was with you last week in Beirut, things were simmering certainly, Ben. What has taken them to boiling point?
WEDEMAN: What has happened in the last week or two is that the Lebanese lira, which lost a good bit of its value in the last few months, has lost even more, about 60 percent of the value of the lira against the
dollar has been lost.
In addition to that, people are simply fed up. There have been unofficial limits on how much you can get out of your bank account. Some banks simply
not letting people take any money out. Others maybe $150.00 $200.00 a week, which if you've got to send your children to school, if you have hospital
bills, if you have to pay your rent, they simply cannot make ends meet.
So all of these things have piled up, and on top of that, sort of the icing on the cake of utter frustration is that Lebanon has been effectively
without a government since the end of October. Nobody is really addressing the financial crisis, the economic crisis, very little is being done to
resolve this country's problems despite the amount of suffering of ordinary Lebanese, who as you can see have simply had enough -- Richard.
[15:05:07]
QUEST: They've had enough for a long time. Hariri has been on holiday. He says he is not going to be Prime Minister. There is a Prime Minister-
designate who has been trying to put together a Cabinet.
But Ben, do you -- I mean, the contradiction between these politicians playing around and the protesters' demands seem vast.
WEDEMAN: Yes, it's vast and there's no real attempt to be made to bridge this gap. You know, what you see here is just a manifestation of what is so
desperately wrong with this country, many of these soldiers, these riot police suffer from the same problems that the protesters are.
Some of them aren't being paid. They can't get their salaries out of the bank. And meanwhile, the very wealthy political elite is squabbling among
itself -- among themselves and there is very little to solve the problems.
QUEST: Ben Wedeman. Ben in Beirut. Ben, we will let you get back to -- we can see there's are rather nasty fire burning in the distance over there.
We'll let you get back to what's happening, and we'll speak to you again, hopefully, before the end of the -- sorry, Ben, you were saying.
WEDEMAN: We're good. We're good, Richard. Thank you for taking the time to speak with us here in Beirut.
QUEST: Good. All right, Ben. Thank you. We will come back to you as time moves on. Ben Wedeman there. Now, let's return to our business agenda.
There is a Green Revolution in the world's largest asset manager, it's BlackRock, where the chief executive is warning that climate change will
disrupt the global financial system sooner than we think.
Larry Fink says he is putting sustainability at the heart of BlackRock's investment strategy. In practical terms, dropping investments and
businesses like thermal coal producers that pose a climate risk, increasing access to sustainable investments by creating new funds and pressuring
companies in which BlackRock high stress to disclose and manage climate related risks.
BlackRock doesn't come to the table with clean hands. Activists are saying for years, attacking the company or its environmental record.
Alison Kosik is following it all. So what is he saying, Larry Fink?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, first of all, there is a tinge of hypocrisy. Let's go back to what some of these activists are
saying because it's important to remind everybody what they found.
Activists call BlackRock's big problem found that some of these funds that BlackRock goes ahead and markets to U.S. investors as sustainable actually
contribute to the global climate change problem. Ten of the funds worth hundreds of millions of dollars go to support fossil fuel companies. $29
million in funds go to support companies linked with deforestation.
In fact, BlackRock is seen as the world's single biggest investor in companies that develop coal-fired power plants. But so now, what you're
seeing is BlackRock realizing, wait a minute, there could be catastrophic changes in the economy because of climate change, and now, says Larry Fink,
we're going to go ahead and make it our focus to only invest in companies that don't pose a risk to sustainability.
QUEST: I guess, there's never a wrong time to do the right thing. And if they are doing this now, with a barrage of evidence, but BlackRock is huge.
KOSIK: Yes, $7 trillion in assets. I mean --
QUEST: Most of us, if we have a pension fund of a 401(k) in the United States or elsewhere, somewhere, have a BlackRock component to it. I know, I
do.
KOSIK: Right. But here's the thing, that means we're all exposed to possible catastrophic, you know, possibilities if climate change continues
to roll forward.
I want to go over some of the things that he had in his letter because these were pretty strong points. He said, "Investors are increasingly
reckoning with these questions and recognizing that climate risk is investment risk. They are seeking to understand both the physical risks
associated with climate change, as well as the ways that climate policy will impact prices, costs and demand across the entire economy."
This point he is making is that climate change affects the economy. Climate change affects our portfolio. Climate change --
QUEST: How?
KOSIK: Well, I mean, where do we begin? Let's see.
QUEST: I could certainly see carbon fuels with things like motor vehicles and things like that. But if climate -- I mean, Central Banks, too are now
saying that climate change needs to be part of a monetary policy format.
KOSIK: And that's what you're seeing BlackRock do and not just BlackRock, but ING as well. ING is among a group of European banks that have said that
they will align their lending practices with the goals of the Paris Climate Accord.
I think that you're seeing a lot of investment companies catch on and saying, look, we may be businesses, but we also have a societal role as
well, especially when it comes to climate change.
[15:10:09]
QUEST: Good to see.
KOSIK: Good to see you, too.
QUEST: As always, thank you. Now to understand how significant the BlackRock shift is, we need to get a sense of the scale that BlackRock
controls. $7 trillion in investments, more than anybody else. It's amongst the biggest investors in the global blue chips.
Four percent or more of Apple, McDonalds, Citi, BoA, nearly five percent of Chevron and Exxon.
Climate activists say BlackRock hasn't used its heft for good. They have targeted the company and its CEO over and over again. One study found
BlackRock voted in favor of sustainability proposals just 10 percent of the time.
On that measure, it is near the bottom of the rankings of institutional investors. Let's talk about this, joining me is Bruno Sarda. Good to see
you, sir.
BRUNO SARDA, PRESIDENT, CDP NORTH AMERICA: Good to see you.
QUEST: Make yourself comfortable. He is the President of CDP, nonprofit working to increase the environmental disclosures. Let me -- how can
climate change adversely affect economies and companies? The sorts of things we were talking about.
SARDA: In a variety of ways, and that CDP, our main vehicle is actually we get disclosures from over 8,400 of the world's companies representing over
50 percent of global market cap. So we hear it from companies themselves, along with investors.
Just last year, over $250 billion of stranded asset risk. So, capital assets that will depreciate in value potentially all the way down to zero
if the purpose of that asset is diminished or eliminated from the economy. Thermal coal was recently mentioned.
QUEST: But if -- I mean, someone like BlackRock, the announcement is huge, but it's a bit like turning around an oil tanker. You know, when BlackRock
doesn't just -- it can't just suddenly divest itself of those shares. It would be -- it would be carnage.
SARDA: And that's not what they're saying. What they're saying is they need management and boards from all large companies to start taking climate
change seriously in the way they make decisions.
Disclosure, for sure is a first step. No company these days, a listed company, especially a high emitter can be taken seriously if they hide
behind the lack of strong regulations around climate disclosure.
QUEST: But how -- you know, companies all over are aware of this. They are falling over themselves to give us their transparency on climate change
issues and what their rules are. I mean --
SARDA: Well, to date, for example, only 75 percent of the S&P 500 discloses meaningful climate data. So we're still -- you know, we're still
missing a quarter.
QUEST: Right. But when you say only 75 percent. I mean, 75 percent is a huge number, it is three quarters. And B, I'll bet your lunch in a
restaurant of your choice that all the major -- the top 100 companies all disclose.
SARDA: Not quite but it's about more than --
QUEST: Oh, you're saying I'm buying you lunch. It looks like I am buying you lunch.
SARDA: That's right. Disclosure is the first step. Clearly, it's not enough.
QUEST: What do you want? What do you need?
SARDA: Well, what we need is meaningful action behind the disclosure. So transparency is important so that we can keep score and see how fast
progress is happening. Climate change is here today. I mean, this is not a future risk. This is a present risk.
We need, you know, we need things to move at an unprecedented scale, frankly, at the speed and scale of business. That's why BlackRock's
announcement is a strong signal to the financial marketplace of you know, we need action now and not just words.
QUEST: Good to see you, sir. Thank you.
SARDA: Good to see you.
QUEST: Now, in Australia, the cost of the climate crisis is becoming very clear. The bush fires that have just spread in the southeast of the country
could be nearly five billion Australian dollars' worth damage and reduce economic growth by up to half a percentage point.
Of course, that doesn't even get close to the devastation to people's lives and the loss of life. The estimates just released by the bank, Westpac,
According to the Prime Minister, Australia is open for business.
Speaking earlier, Scott Morrison thanked the U.S. for revising its travel warning to a less severe level.
(BEGIN VIDEO CLIP)
SCOTT MORRISON, AUSTRALIAN PRIME MINISTER: We very much appreciate that being revised. And that will be I think, a welcome encouragement to our
tourist industry, and not just in the bushfire affected areas because these things affect the tourist industry more broadly.
(END VIDEO CLIP)
QUEST: Now, Jonathan Kearsley is a reporter for Australia's Nine Network. He joins me now from Canberra. Let's first of all, before we talk, the
business side of this such as it is. Are the fires -- where do we stand between sort of under control and still raging out of control?
[15:15:02]
JONATHAN KEARSLEY, REPORTER, NINE NETWORK: Well, fire authorities, Richard will say that they are still out of control. We have had much cooler
conditions this week as to that week we saw of the New Year when those fires really hit hard along the New South Wales South Coast and
particularly down into Victoria where we saw those extraordinary scenes of people being evacuated on Navy ships in the darkness.
Also, those cooler conditions have really helped firefighters this week to try to get on top of those fires, but this fire season is going to run
until sort of February or March. So certainly far out of the woods yet, Richard, some time to go.
QUEST: Okay. So if we do turn to -- I've got nothing to diminish the human and animal cost in all of this or people's lives, literally, but the bills
when they start to run in, the government has said that can help out, but this has had a seriously major impact on business and the economy.
KEARSLEY: As you mentioned, Richard, it's going to hit the economy incredibly hard. $5 billion is the estimate from Westpac. We've seen
massive losses in the agriculture sector something like two million cows and eight and a half million sheep, 1.2 billion wildlife, native animals
have been lost in these.
There are tourism sectors that are going to be hit incredibly hard because most of the towns that were hit particularly along the New South Wales
South Coast, which is part of that eastern seaboard area of Australia, have a massive tourism trade at this time of year. They rely on that summer
trade to get them through the next 12 months.
And right now, they're missing on that money. I'm talking to people who are canceling tens of thousands of dollars' worth of bookings over the next few
months. So that is going to hit them very, very hard.
We're also saying the government now try and respond to these. We've seen a number of announcements over the last few days about recovery assistance
packages, basically to try and help with people's mental health, but also to try and get some economic stimulus on the ground.
They want people to spend money. They've reopened roads. They're telling tourists in Australia to get back into those areas. You mentioned that
American travel warning that had been lifted or altered yesterday, the Prime Minister said he pushed the White House heavily for that because the
American tourism sector is worth something like $4 billion to the Australian economy.
So right now, Australia and the Australian Government does not want to be missing out on that sort of level of income, but there is going to be a
massive hit to people's pockets. You're talking about people who are losing their homes, something like 300,000 homes have been lost over the course of
these bushfires since September last year.
So it really is quite staggering when you look at the numbers.
QUEST: Jonathan Kearsley in Canberra for us this morning. It's early morning for you. Thank you, sir, for taking the time to join us.
The earnings season is underway, of the banks. Mixed results. Absolute stonker of a session for JPMorgan shareholders. Wells Fargo delivers more
disappointment in just a moment.
Democrats -- the U.S. Democrats are getting ready for the last TV debate before the critical Iowa caucuses. We are in Des Moines, Iowa to find out
more. This is QUEST MEANS BUSINESS. We all live in New York.
(COMMERCIAL BREAK)
[15:20:37]
QUEST: Stocks in the United States are somewhat all over the place. You saw that with the Dow. For much of the day, the Dow was trading above
29,000 and set a new intraday record. Before there were reports that U.S. tariffs on China will stay until after the 2020 election.
Come on over here, sir and when that report came out, it went -- slight recovery throughout the course of the day. We are now just 16 up. The
broader market is tootling, but the S&P and the NASDAQ, they are all -- I'm sorry, the broader markets, they are down.
Major U.S. banks and airlines are starting the earnings season with very strong numbers. JPMorgan Chase and Citigroup are rallying after fourth
quarter earnings that beat estimates. Both said they saw a rise in fixed income trading.
Wells Fargo is down five percent. Five percent. They are at one and a half. They're at one and three quarters. And even Delta is soaring after results
topped expectations because of lower fuel prices and strong demand. That's on the back, of course of good economic numbers. It's the only U.S. major
carrier that doesn't fly the 737 MAX.
There's a lot here. Paul La Monica. Guru La Monica, as we parse this, we need to start with JPMorgan Chase. Well, what happened?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, it was a record quarter and a record year for profits for JPMorgan Chase and Jamie Dimon talked about it
in a call with reporters this morning. He said that the consumer in America is still very healthy.
You're seeing -- thanks to wage gains -- even though they've come down a little bit from last year, wages are still rising, home prices are rising,
the consumer is confident. They're spending and they're taking out loans for autos and credit cards and mortgages.
QUEST: Right. Is that where they made the money? I mean, we always think of the big banks like JPMorgan. You know, they make a lot of money on the
back of the retail customer. But we always think of them as doing their own trading on their own investment banking.
LA MONICA: Yes, you're right. Well, both JPMorgan Chase and Citi are benefiting from the fact that consumers are spending, but also, businesses
were confident once again in the fourth quarter once we had that Phase 1 trade deal announced and you saw a big spike in bond, fixed income
underwriting for JPMorgan Chase and also equity, so IPOs definitely doing well.
QUEST: Right, so just to explain, when you say there was a big uptick in fixed income, we're not talking here about U.S. government or what bond
prices are. We were talking about companies paying corporate --
LA MONICA: Right, corporate bonds, exactly.
QUEST: Companies paying the banks to issue corporate bonds.
LA MONICA: Exactly. Underwriting fees for fixed income, corporate bonds, but then obviously, the IPO market, despite all those flops last year, Uber
et cetera. They've had, you know, a pretty solid year.
QUEST: What happened at Wells Fargo?
LA MONICA: I think new management has come in and once again, is doing the proverbial kitchen sink sort of earnings. They're saying that, yes, things
were not good. Revenues were down. Profits were down. Things may be still bad for the foreseeable future. They need to regain the confidence of not
just Wall Street investors, but also consumers, of course, because of the fake account scandal.
And the CFO at Wells Fargo pointed out that you know, expectations may still be too high. They have to cut costs more aggressively.
QUEST: Good to see you, sir. Thank you.
LA MONICA: Thank you.
QUEST: Now, as Paul mentioned, JPMorgan's CEO, Jamie Dimon says the American schema is in rude health. He says evidence for that was a robust
Holiday spending season. Credit card transactions up 10 percent in Q4. He welcomed the Phase 1 U.S. trade deal with China resolving at least some of
the uncertainty for banks.
Consumers are doing well. Consumers are spending, which is just as well because Clare Sebastian is taking the temperature of the U.S. retail
sector. Live from the world's largest retail conference in New York, so if consumers are doing well, then there must be a bumper crop of things to see
there.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Richard, this is where retailers go shopping. This actually isn't really a retail show. This is a
tech show. And one of the things that we're really seeing is more and more automation, more and more robots.
We're used to seeing them in e-commerce facilities behind the scenes, but now, we're really starting to see -- and I'm not sure if you can make this
out behind me, the robots that are going to be roaming the stores, the aisles in your grocery store, in your retail store.
[15:25:13]
SEBASTIAN: This is a company called Bossa Nova. Walmart has just announced this week that they will be deploying these shelf scanning robots in a
thousand of their stores by the summer. If Walmart is doing it, rest assured, everyone else is going to follow.
So I want to bring in Red McKay MCI is the head of Europe for Bossa Nova and the VP of Global Sales. Red, first of all, tell me how this works. What
are we seeing here?
RED MCKAY, VP OF GLOBAL SALES, BOSSA NOVA: So what you're in effect seeing is a demo situation that happens in store now every day three times a day,
where we're scanning each shelf, every product in retail. That sounds simple, but what that is, is that we are enabling the retailers to get that
data in real time and then take action with it.
So whereas the colleagues, instead of scanning the item, they can actually go and put the item on the shelf.
SEBASTIAN: So I was looking for -- if we look at an aisle here, it is looking for things that might be out of stock, it is looking for price
discrepancies, things that would take humans a long time to do. Can you tell us how does this make a Walmart store better? What does it save them?
MCKAY: Okay, so to give you a real-time example, all of us shop online. So you've ordered grated mozzarella and it's gone on the shelf. The colleague
in store hasn't seen that it is out of stock, and it hasn't been replenished.
So actually, they give you a -- they'll pick off that shelf. They'll put it in the basket, but they're giving you a substitute. They're giving you
sliced cheddar. That makes a very different pizza.
So in real terms, that's what we're helping them to resolve in terms of online shopping but also in terms of you're going in with a shopping list,
you want a colleague to ask where something is because of seasonal changes, we will make sure that product is there for them.
So the colleague is released from that scanning product process and actually take that customer to the shelf where that product is now
available.
SEBASTIAN: All right, Red McKay, exciting times for your company. Thanks for joining me, sir.
MCKAY: Thank you so much.
SEBASTIAN: So Richard, the point of this is that we live in a world where brick and mortar stores, there's no room for error. If they want to compete
with online, they have to make sure that the products are in stock, otherwise, you know, one mistake and people will just shop online in the
feature. They won't come back.
QUEST: I think you are more horrified at the thought of Parmesan cheese or sliced cheese being offered up instead of grated parmesan when you'd been
wanting for fresh stuff at your table.
SEBASTIAN: I know. Yes.
QUEST: Good to see you. Clare Sebastian.
SEBASTIAN: Certainly now, Richard, you know, you want everything perfect when you shop in stores, as you know, I do a lot of shopping online myself,
so if I go into a store, I am expecting things to be there and they do so that there's a booth around the corner with a robot, but they do say that
these robots are going to save a lot of time and money.
The big question though is, will they replace jobs. Walmart has said no. They're going to be an assistant to their staff. But overall, I think that
is something to watch going forward.
QUEST: We've heard that one before. Clare Sebastian in the shopping aisles of New York. Thank you.
Now three European allies say Iran has been violating the 2015 Nuclear Deal. Now, their force to respond in a moment. It is QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[15:30:00]
QUEST: I'm Richard Quest. Hello, there's more QUEST MEANS BUSINESS in a moment. We'll be back in the Middle East where Iran's nuclear deal is in
great jeopardy as relations between Tehran and the European powers are soaring. Nissan is now dismissing reports and rumors that it plans to break
up with Renault. We'll hear what his former chief Carlos Ghosn has to say about the alliance.
As you and I continue in our conversations tonight, this is CNN, and here, the facts come first. Police have fired teargas on protesters in violent
demonstrations in Beirut. The protesters smashed windows on busy shops during what's being called a week of anger. Demonstrators want a new
government as quickly as possible to focus on Lebanon's crumbling economy.
Iran has announced the first arrests in connection with the shoot-down of the Ukrainian passenger plane. No details were provided about who's being
arrested or the exact number and their roles. The Revolutionary Guard Corps has apologized, saying the downing of the plane was a mistake. President
Rouhani has pledged those responsible will be punished.
In Washington, the House Speaker Nancy Pelosi says a vote will be held on Wednesday on a resolution to name the impeachment managers and send the
articles to the Senate. Those steps are necessary before the Senate trial of President Trump can begin. A short time ago, the Senate Majority leader
Mitch McConnell said the trial will likely begin next Tuesday.
Almost 1 million people living within a danger zone around the Philippines to have a volcano are being warned to leave and not return. The volcano has
been spewing ash and shaking the ground since Sunday. Scientists are warning an explosive eruption could happen in days or even hours.
Swamps of locusts have invaded Kenya and the government says it's wreaking havoc on the food supply. The locusts have destroyed a vast amount of farm
land. The Kenyan government is spraying pesticides in the affected area every day although, it admits it's struggling because of the remote to the
area.
France, Germany and the United Kingdom have jointly triggered a dispute mechanism in the Iran nuclear deal. The three countries say although they
remain committed to the agreement, growing Iranian violations --
(CLEARS THROAT)
Excuse me, could not go unanswered. President Trump of course pulled the U.S. out of the Accord in 2018. Nic Robertson is in Abu Dhabi. Nic, can I
just clarify with you, the violations of which the British, German and French are talking, are they violations that happened as a result, in other
words, where Iran has said well, because the U.S. has backed out, we're no longer bound by X, Y, Z?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Exactly. The Iranians gave a year after the United States backed out, and then they started the
sequential process where they would say what they were going to do, it would be a sort of micro-step, but it was never a less step. You know,
deciding to stockpile more enriched uranium than they'd agreed to than in enriching it to a higher level, then using more centrifuges, and then
basically no holds barred.
The one thing that they did do is allow the inspectors to continue, that sort of would have been the saving grace of it, and the Europeans have
lived with it until now. But now, they really seem to be taking a diplomatic initiative here in a stalemated, tense scenario, and --
QUEST: Right --
ROBERTSON: Have called Iran out on it, and now going into this mechanism.
QUEST: And you've got, for example, these countries. They're not all united, remember, well, I say they are united to a point. But the British,
for example, and Boris Johnson see more -- are seeing more merit in the U.S. position.
[15:35:00]
ROBERTSON: Certainly, Boris Johnson said that today in an interview, you know, how much this was sort of thought through and coordinated with the
foreign secretary who was given slightly different speech in parliament, not clear. But look, Boris Johnson, we know, use a closer line to President
Trump, he knows that if there's going to be a big deal in the end, then it has to involve President Trump.
Trump wants more than the nuclear deal as it is right now. He wants longer sunset clauses before Iran can get out to do some of the things it wants to
do. I mean, wants control of the --
QUEST: Right --
ROBERTSON: Ballistic missiles as well that Iran has. So, yes, Boris Johnson, yes, says he sees the -- a Trump plan could be good, but he says
where is that plan? That's the problem. That's what I mean when I say the Europeans --
QUEST: Right --
ROBERTSON: Have taken the initiative because President Trump doesn't appear to have a strategy at the moment.
QUEST: And how -- I mean, to the novice coming at this afresh, does this deal even exist anymore, this agreement even exist? If Iran is just
basically saying we will -- we will press this as much as we like whenever we like?
ROBERTSON: The Iranians are saying they can do that. And there's a difference. They are still allowing the inspectors to come, so the
inspectors would be able to raise a red flag and say, hello, we see Iran racing to try to make a weapon, stockpiling significant amounts and
enriching to a very high level, which they haven't as best we know started to do. If they did that, that would be all --
QUEST: Right --
ROBERTSON: The signs that Iran was racing to make a weapon.
QUEST: Nic Robertson in Abu Dhabi, thank you sir, as always, we appreciate it. Now, in a few hours, the top six U.S. Democratic presidential
candidates will take the debate stage in Iowa. It's the last debate before the Iowa caucuses. In a recent poll from CNN and the "Des Moines Register"
and the media puts progressives in the lead among Iowan Democrats.
Bernie Sanders is at 20 percent, Elizabeth Warren at 17 percent. And Sanders' recent resurgence is very bad for shares of U.S. health insurer
Cigna, United and Humana all fell sharp here after the poll came out on Friday. Just look at that. CNN's Leyla Santiago is in Des Moines, Iowa,
inside wise I'm sure among the Iowan Winter. OK, so, who needs to do what tonight?
LEYLA SANTIAGO, CNN CORRESPONDENT: Well, Richard, we should really keep an eye out tonight on Senator Sanders and Senator Warren right now, especially
given this like sort of rise in tensions between the two of them over the last few days. A lot of people will be watching, not just what they say,
but as soon as they step foot on that stage, even how they shake their hands.
They will not be next to each other. You'll have Biden in between the two, but remember, these are the two progressives that have really stuck
together for most of the things. When they're asked questions about their differences, they constantly say we're friends, they won't criticize until
now.
And that is after CNN's M.J. Lee reported that in 2018, Senator Warren claims that Bernie Sanders said that a woman could not win the presidential
election in 2020. This is something that Sanders is calling ludicrous. So, we should definitely be keeping an eye on that tonight. You also want to
keep an eye out on Biden, especially when we talk foreign policy and Iran, how -- what he has to say --
QUEST: Right --
SANTIAGO: About that. The latest Quinnipiac national poll says 51 percent of registered voters do not agree with how Trump is handling Iran. So how
will these candidates stand out in that area?
QUEST: As for the history of winners in Iowa going on to get the nomination, what's the history there?
SANTIAGO: Well, I think Barack Obama is a great example of that, you know. That was -- Iowa was sort of the first very big thing that sets the tone.
And you said it best, you really put a lot of emphasis when you said this is the last debate before the Iowa caucuses --
QUEST: Right --
SANTIAGO: Because the timing here matters. After the -- well, the Iowa caucuses, you should think about them sort of as a scoreboard. We won't
necessarily be talking about polls or pundits and what they think about what voters feel. But what --
QUEST: Right, so --
SANTIAGO: Actually have what the voters think, and how they're willing to vote.
QUEST: And of course, it's retail politics as opposed to the wholesale politics that you get more at the general election. But one final thought,
Mike Bloomberg, now, he's not on the stage in Iowa, does he even exist in this race at the moment?
SANTIAGO: Well, Michael Bloomberg is taking a little bit of a different approach here. Because he is sort of putting all his eggs on the Super
Tuesday basket. He's basically not putting all the focus in the early voting states as Warren and Klobuchar, and well, pretty much everybody else
on the stage has taken an approach to doing.
[15:40:00]
He's saying I am investing in Super Tuesday when you know, in March, when all of these states come together to vote on one big day, that is where he
is putting his money and efforts. So, you're right, he is not on this stage, people are still getting to know him and what he is putting in his
ads is really an argument of --
QUEST: Right --
SANTIAGO: Electability trying to make the case that he can beat Trump. But you really won't see him full-fledged until Super Tuesday, that's more of
his strategy.
QUEST: Good to see you, thank you. We'll be watching very closely tonight, I appreciate it. Carlos Ghosn said last night -- last week Nissan-Renault
alliance is not being run efficiently. Nissan's response on Tuesday to rumors it wants out. Apparently not. We'll tell you why in a moment.
(COMMERCIAL BREAK)
QUEST: Nissan is denying rumors it's trying to split up its alliance with Renault. A growing number of reports have said relations between the
companies have been strained after the downfall of the former chief Carlos Ghosn. Speaking to me last week in Beirut after his dramatic flight from
Japan where he's awaiting trial. Ghosn says his absence isn't what's causing problems.
(BEGIN VIDEO CLIP)
CARLOS GHOSN, FORMER CHAIRMAN, NISSAN-RENAULT: Yes, the alliance is not going well. It's not because I am indispensable. I think -- but I think the
methods which are being used today in the alliance are absolutely not efficient. And that's what I avoided.
(END VIDEO CLIP)
QUEST: Rebecca Lindland is the founder of rebeccadrives.com, she joins me now from Vail, Colorado. Before she's even opened her mouth, she has won
the prize for the best shot of the day, it's in her vehicle. We'll ask what vehicle that is in a moment if it is indeed it. All right, is your
understanding that the alliance is in trouble?
REBECCA LINDLAND, FOUNDER, REBECCADRIVES.COM: You know, it really is, Richard, and I saw you at the press conference last week while I was
watching it from CES. And you know, I think that Mr. Ghosn was actually a bit modest. I do think that he is absolutely integral to the success of
this alliance. And Renault-Nissan has several hundred people that work within this alliance.
[15:45:00]
But it's really -- it's not a marriage. It's not -- it kind of held together very loosely and based on relationships. And so, without him at
the helm, I do think that it's in trouble --
QUEST: So --
LINDLAND: I really do.
QUEST: Why cannot the two CEOs, I read statements from both of them after the Ghosn press conference. Why can't the CEOs not just get on the phone to
each other? I presume they're speaking, hey, we're doing this, well, do this. All right, I'm sending my chopper over there, yes, we'll send ours
over there -- yes, great.
LINDLAND: I know. It seems easy, but as we've seen by many of the presidential elections lately, nothing is easy when it comes to these kinds
of alliances. You know, one of the biggest challenges is simply that Renault controls more than Nissan, so Renaults owns 43 percent, and Nissan
only owns 15 percent of Renault.
So, there's a basic imbalance there. They're looking at reshuffling the board -- and actually, the CEO of Renault expressed concerns that this
alliance could --
QUEST: Right --
LINDLAND: Exist. So I do think that there's doubt. It's also very much a moving target because I think I was on with you last year right after Mr.
Ghosn was arrested, and I myself didn't think that the alliance would be in trouble. I also thought it was more tightly woven, but it's really started
to unravel this year.
QUEST: Do you -- let's just talk Carlos Ghosn. Do you still think that he was done over by the Nissan lot? They wanted him out, they found a way, a
certain element of an overzealous prosecutor and a very difficult Japanese legal system, good-bye Carlos Ghosn.
LINDLAND: You know, I think that what he said in his press conference about basically thinking that he was going to die in Japan, I think that
was an accurate statement. And when faced with that reality, in his mind, I think he's -- you know, he took the opportunity to run and to escape to a
country where, you know, he's very comfortable as a Lebanese. His wife is Lebanese. She's a Lebanese New Yorker.
So I think that, you know, he needed to do this for his own sake because with a 99 percent conviction rate --
QUEST: Right --
LINDLAND: In Japan, it's really hard to say he's going to get a fair trial.
QUEST: Final question. Will anybody miss or mourn if the Renault-Nissan- Mitsubishi alliance falls apart?
LINDLAND: I think that it will be more of a financial issue than anything. About one in nine vehicles are sold globally through this alliance. So, I
do think that it's going to be a more financial --
QUEST: Right --
LINDLAND: Issue than anything. And I just have to say I'm in a GMC Sierra Pickup truck utilizing their WiFi hotspot, so hopefully it's been a good
connection for us.
QUEST: It's been a superb connection. I'm only distressed that you're not practicing safe broadcasting with your seat belt on! Next time --
LINDLAND: We're stationary! We're stationary!
QUEST: Whatever next --
LINDLAND: Otherwise, I would --
QUEST: I should hope so too. All right, practice safe broadcasting, good to see you, thank you, ma'am.
LINDLAND: Absolutely --
QUEST: Thank you. Now, some news into CNN. The Fire Department in Los Angeles is on site at an elementary school where apparently, there have
been multiple patients according to a tweet from the Fire Department, it's because of an apparent dump of fuel by an aircraft on final approach to
LAX.
The Fire Department says the fuel may have hit the playground where -- we've been working of course to get more details -- there you see the
picture, you obviously, you see the ambulances close by and all of that. But the reasons why all the talks seem very round and about. Back in a
moment.
(COMMERCIAL BREAK)
[15:50:00]
QUEST: It is the cloud wars, the battle over the Pentagon's Jedi contract is getting much nastier. The empire that would be Amazon is striking back.
Amazon is to ask a federal court to prevent Microsoft from working on its new plan, the Jedi Project. Amazon claims President Trump exerted improper
force over the contract because of his relationships and his animus of Amazon CEO Jeff Bezos.
Brian Fung is in a city far away, Washington D.C., never mind whether it's really far away, it's -- mentally, it's light years away. Brian, so they
are going to go for this. What hope -- I mean, what's the smart word as to why?
BRIAN FUNG, CNN TECHNOLOGY REPORTER: Well, a lot of this goes back to as you said, Amazon's perceived perception that Trump has a bias against
Amazon and in particular its CEO Jeff Bezos. It traces back to a number of tweets that Trump has sent, criticizing Bezos as a bozo, criticizing "The
Washington Post" which Bezos also owns privately as Amazon's lobbyists has also gone after Amazon for paying the U.S. postal service submarket rates
for its shipping.
QUEST: Right --
FUNG: All of this is contributing to what Amazon says in its court filings is an overall sense of animus by Trump, which then got involved --
QUEST: Right --
FUNG: When the adjusted -- I'm sorry, when the Defense Department approved this contract for Microsoft.
QUEST: So as between AWS and Azure, which of course, is Microsoft, as between these two. Now, AWS, Amazon Web Services has a much higher
percentage of the market. But Azure is no slacker in all of this. I mean, they're reputably well known. So, could they not have got this on their own
merit?
FUNG: Well, that's what the Defense Department argues when it made its contract award decision in October. It said that Microsoft was, you know,
legitimately the best option. Amazon fired back, saying it was going to protest that decision, asking a court to revisit it, roll it back and give
Amazon another shot at trying to win this contract.
And now, you know, the two sides are kind of locked in court with the U.S. government also involved here. And Amazon is saying that it's going to file
a request for an injunction, asking a court to prevent Microsoft from working on the deal, and that filing could come as early as January 24th.
Now, let me read just a little snippet of what Amazon said when it complained to the federal court about how this was handled. And it said,
"these areas were the result of improper pressure from President Donald J. Trump, who launched repeated public and behind the scenes attacks to steer
the Jedi contract away from AWS" -- that is Amazon Web Services, "to harm his perceived political enemy, Jeffrey P. Bezos", founder and CEO of AWS'
parent company Amazon.com and owner of "The Washington Post".
So, clearly, Amazon coming out with very strong language saying that the president is using his influence over the Defense Department to push --
QUEST: All right --
FUNG: His personal and political agenda.
QUEST: Good to see you, thank you, we'll watch it closely, it's an absolutely Titanic battle between Amazon, Azure, Microsoft and the
president. Good to see you, Brian, thank you very much indeed. We have just a few moments left to trading on Wall Street, what an interesting sort of
day it has been.
The stocks are mixed, you have a strong performance throughout the course of the morning which completely falls apart just as there are reports the
U.S. tariffs on China will stay until after the 2020 election.
[15:55:00]
You then have some excellent numbers of JPMorgan which is one of the best Dow performance after fourth quarter earnings which beat. So Pfizer is
still on top, they also had good numbers, JPMorgan is also at the top, down to the bottom, Apple. But remember, Apple was up 2.5 percent yesterday. So,
that's just reversing a little bit out.
Microsoft is down, that might be on the back of the announcements that have been made. More green than red just barely. There is the triple stack, no
records today, I'm afraid for you. But you do have the Dow up, the S&P and the Nasdaq are down. It's a market of mixed. We'll have a profitable moment
after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. We started the show tonight with those awful pictures out of Beirut of more protesters coming up against riot
police and teargas just about everywhere as a result of the protests. Look, in Beirut, it would be bad enough if there was a government trying to put
things together in difficult times.
But the fact that they're doing so against protesters when the economy is on the verge of total and utter collapse is nothing short of criminal. The
Prime Minister designate is trying to do a deal between the Christians, the Shiites, the Sunnis and the supposed constitutional requirements which by
the way, everybody I met in Beirut said it was custom and practice, not in the constitution.
All this would be bad enough if it wasn't so dreadful. The situation of the economy is dire. The Lebanese economy is basically out of money, it's
teetering on the brink of bankruptcy, and other than infusions of capital from other countries and other regions, it would not survive.
And they're still arguing about who sits where in what post in the cabinet. No wonder people are on the streets protesting as they are. I'd be on the
streets protesting if I was in their position, having seen my currency devalued by 60 percent, a government that -- no government at all. All of
which brings us back to the people of Lebanon who've suffered so much and continue to face even more.
And that's QUEST MEANS BUSINESS for tonight, I'm Richard Quest in New York. Whatever you're up to in the hours ahead, no records today, I'm afraid, but
the bell is ringing, and of course, I hope it's profitable.
(BELL RINGING)
END
