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First Move with Julia Chatterley
Saudi Aramco Says That Multiple Listings Are Coming Very Soon; Softbank Reportedly Pushing Wework To Cancel Its IPO; How Bitcoin Billionaires, Winklevoss Twins Bounce Back From Facebook. Aired 9-10a ET
Aired September 10, 2019 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:50]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, FIRST MOVE: Live from the New York Stock Exchange, I'm Julia Chatterley. This is FIRST MOVE and here's
your need to know. Ready Steady IPO: It's Tuesday. Let's make a move.
Welcome once again to FIRST MOVE and it's a very special one today because FIRST MOVE is one years old today. Happy birthday to us. Happy birthday
to the team. It feels like 10. Only one. Let's move on. Let me take you a look at what we're seeing as far as the U.S. markets are concerned,
setting off our second year together with a bit of a soft performance here, not helped by weaker economic data from China following a pretty muted
session from the United States yesterday too, though, I know the Dow did manage to rise, but a fourth straight session, all the action focused on
the bond markets right now where prices continue to ease pulling back from multi-year highs.
Remember prices lower, yields push higher, maybe bit of nervousness ahead of upcoming Central Bank meetings. Will the European Central Bank
disappoint? Will they announce more bond buying and please remember hopes for fresh stimulus have driven bond yields lower over the past few months.
I can tell you though, European stocks looking pretty calm today.
It was a mixed close in Asia, too. The major news there though deflationary pressure, the data coming from China, particularly worth
noting, if you're hoping for fresh stimulus from the Chinese, too. Wholesale prices suffering the sharpest drop in three years. Remember when
demand weakens, businesses cut the costs of products to try and stimulate that demand.
An interesting signal of course, as tariffs have ratcheted higher, one of those spillover effects here though of weakened growth has been pressure on
energy markets, pressure on oil. That has been a challenge, of course for OPEC and a challenge for Saudi Arabia to specifically and that's where
we're going to kick off the drivers because Saudi Aramco CEO says an IPO will be coming quote "very soon."
It follows the appointment of a new Oil Minister, of course, this weekend, John Defterios -- I've got it again. John Defterios joins us once again.
And this is exactly what we were talking about yesterday. Do the changes that we've seen over the last few days, accelerate the timetable for the
IPO? Can we say yes?
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: I would say absolutely, yes. In fact, the narrative has changed dramatically in the
last 48 hours since Prince Abdulaziz Bin Salman has become the Minister of Energy. We went from being ready according to Amin Nasser to being ready
very soon, as you suggested Julia.
Many added, "that's the bottom line," very much like a businessman. We also know how important Riyadh is to their future listing. It was even
alluded to the fact that will be their main market going forward. This is a safe bet, because it is the home field advantage. Here's our brief
interchange and what was a gigantic scrum after his speech.
(BEGIN VIDEO CLIP)
AMIN NASSER, CEO, SAUDI ARAMCO: That's a shareholder decision we took when it comes to the listing. As I always say, you know the decision is with
the shareholder from Aramco side, as I say, we always say we are ready for whatever the decision is, either to list locally, which is the going to be
the primary listing is to list locally, but we are also ready also for listing outside -- in other exchanges.
DEFTERIOS: Sorry, I don't mean to interrupt, the other jurisdiction would be a Tokyo preference where there is less litigation?
NASSER: It's a shareholder decision not Aramco's.
DEFTERIOS: Do you have a preference on that? Do you have a preference for that?
NASSER: We are ready as I said to list whatever the shareholder decide. We are prepared for different jurisdictions.
(END VIDEO CLIP)
[09:05:04]
DEFTERIOS: How's that for a scrum, Julia? I tell you, he wouldn't confirm, Tokyo but he didn't reject that. He had the opportunity to reject
it, and Tokyo makes a lot of sense if you think about it because Japan is one of the largest customers alongside China for Saudi Aramco and a lot
less risk when it comes to jurisdictions, when it comes to litigation on Wall Street or even in London for that matter.
CHATTERLEY: Good work, John. I call that severe dedication there in the thick of it. Rumor has it though, that the new Oil Minister is not wasting
any time, I believe the Russian Energy Minister already touched down in Saudi Arabia. What do we know about this?
DEFTERIOS: Interesting that he decided to go to Saudi Arabia before coming to the JMCC, that's committee within OPEC. It is my understanding from
very senior sources in Saudi Arabia and elsewhere that he went to Dhahran to the Eastern Province to visit his old friend, Khalid al-Falih first as a
courtesy, which I thought was interesting, and then went on to the capital of Riyadh to see Prince Abdulaziz.
The signal here is it is a priority of the Alliance. Number two, we wonder if Prince Abdulaziz said, "Look, Russia last month, you produced better
than 11 million barrels. Come on down. So this Alliance actually works to prop up prices for our IPO going forward." How's that?
CHATTERLEY: We like it. Good job, JD. No one messes with you there in the thick of it at scrum. John Defterios there. All right, let's move on
to our next driver. WeWork's biggest investor, Softbank, pushing the company to shelve its IPO. That's according to report in "The Financial
Times." The valuation, it seems between potential private market and future public market seems to have halved just this year alone.
Paul La Monica joins me now. Uncomfortable. Everything about this has been uncomfortable from the moment we started talking about it. I'm not
surprised by this reporting. What do you think, Paul?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I am not surprised either, Julia, because as you and I have talked about on the show before, WeWork is
a bit of an odd duck. It's not a company that is the most exciting of tech firms out there. They are really just a real estate company that has a lot
of glitzy cool features for the workers that are working at WeWork locations, but with that comes staggering losses.
WeWork lost nearly $2 billion last year, almost another $700 million in the first six months of this year, and we've seen now in the past couple of
weeks, how Wall Street has cooled to all of these unicorns that have recently gone public in the past couple of years and are still
unprofitable.
Snap is tumbling again, they got hit hard yesterday. Slack has really been crushed since they reported earnings, which weren't earnings in the past
week. And then Uber and Lyft also are not doing well and Softbank has backed a lot of these companies, Uber and Slack are two big losers in the
portfolio for Softbank.
CHATTERLEY: Yes, I mean, we're talking about an IPO here of $15 billion to $20 billion. They were raising money from the likes of Softbank with a
valuation at $47 billion. Even if there weren't questions about the corporate structure here about the payments to the CEO, about what actually
this company is doing ultimately, these kind of numbers are a fear factor here in addition to the ongoing losses that the company is making, I just -
- I think everybody is looking at this thing going, "We need a reality check here."
LA MONICA: Exactly. And I think one issue that could be a problem for some of these companies is that they have been private for so long that
they are already starting to mature and you're having the revenue growth starts to slow down, but they're still not profitable. That is a recipe
for disaster on Wall Street at this point.
Investors clearly when you look at stocks that have done well this year, utilities have done well because their yield place investors are clamoring
for safety and even within tech, say what you want about Apple and Facebook and Google and their Alphabet, even Amazon, their revenues are still
growing at a decent clip and oh yeah, they're all profitable. And some of them are even paying dividends when you look at Amazon, Microsoft, Cisco,
and other big tech companies.
CHATTERLEY: Yes, I'll tell you what? If they decide to shut off the IPO and go back to Softbank for more money, the terms are going to be a little
bit different. What did you call them? An old duck?
LA MONICA: Yes, I did. Quack, quack.
CHATTERLEY: I'll call them the lame duck. Quack, quack, lame duck here.
LA MONICA: Happy one year anniversary, by the way.
CHATTERLEY: Thank you. Thank you. Thank you. Thank you for being part of it. Paul La Monica, thank you so much for that. All right, let's move
on. Apple is set to unveil a fresh lineup today, think new high end phones and software updates, but don't hold your breath for anything too radical
here.
Samantha Kelly joins us from the event in California. Samantha, fantastic to have you with us. I can forgive them for not announcing any bold new
phones. But where's the 5G phone because Samsung is already doing it? Why aren't Apple?
SAMANTHA KELLY, CNN BUSINESS EDITOR: Okay, exactly. So don't expect anything to radical no foldable phone, no 5G phone like you mentioned. But
to your point. Yes, so Samsung has already announced two 5G phones, LG has a 5G phone out on the market. And there's sort of a few reasons behind
this.
[09:10:17]
First, there's not a ton of user cases right now, especially in the U.S., the Dallas Cowboys Stadium and down in Texas, they're using sort of a
customer experience. But there's not really any major use cases. Service across the U.S. is pretty spotty. It's pretty limited. It's only in a few
cities. I've tried it out myself. And then sometimes on one block, it'll work; and the other, you turn the corner, and then it won't work. So it's
still pretty spotty and working things out.
It's also really expensive. These devices are -- they start at $1,000.00 and this gives Apple a little bit of time to bring down the cost of the
modems. And that's another reason why it's reportedly a reason why that they're waiting a little bit, too.
They were using Qualcomm modems, shifted over to Intel, now maybe back to Qualcomm. And so that reportedly put some delays in the mix, too. But I
think for the most part, eventually, soon, everything will be set with 5G. But it's amazing when you think about 4G, how that gave us streaming
Netflix and Uber and all these different technologies.
And now in the next year or so, that's when we'll start to see 5G really matter, but this will probably not be the year for 5G with Apple.
CHATTERLEY: Yes, it's such a great point, actually. I mean, why not wait a couple of years and not miss the current upgrade cycle? Perhaps there's
a financial reason thereto. What's the likelihood then that there's more excitement surrounding things like the iPhone Watch, rather than the
iPhones here and any additions that we see there? Talk to me about the upgrade there.
KELLY: Sure, so we're expecting about three new devices, the rumors that are trying, you know, that are kind of kicking around as far as the names
go, could be the iPhone 11, iPhone 11 Pro, maybe an iPhone 11 Pro Max, maybe iPhone 11 R. So you know, we're not quite sure.
But the Pro name sort of hints at like a premium model. Some experts are saying that maybe we might see an Apple Pencil also, the higher end
devices, I'm not quite sure we'll see that yet. But the devices are going to have larger look just like the old models. We might get some new
colors, green and purple are in the mix, maybe a matte finish, but it'll largely look the same.
However, this year will mostly be all about the camera. So expect to have three different cameras on the back sort of in a square light fixture and a
lot of new software to kind of complement that as well.
Another thing that a lot of people were buzzing about was reverse wireless charging. So you could have an iPhone and you could put another iPhone on
top of to charge or you could charge your air pods, but late last night, there were reports coming out that maybe they squashed plans for that, so
we don't know, we'll wait and see soon.
CHATTERLEY: Wow, the charging technology sounds fantastic. I'm looking forward to that. Samantha Kelly, thank you so much for giving us that
preview there. All right. Let me bring you up to speed with some of the other stories that we're following around the world.
One week after returning from summer break, the British Parliament is now suspended for five weeks by order if the government its longest suspension
since World War II. Some lawmakers protested as the House of Commons was closed chanting "shame" and holding signs with the word "silenced." It
follows a series of defeats over Brexit for Prime Minister Boris Johnson, who has called for a snap election in October was defeated in the Commons
for a second time last night.
(BEGIN VIDEO CLIP)
BORIS JOHNSON, BRITISH PRIME MINISTER: They have now twice denied the British people their say in the election. The House cannot choose, it will
not let anyone else choose, Mr. Speaker. It resolved only to be resolute, decides only to be undecided, determined to dill adamant for a drift.
And, so now, the House will move to adjourn and resume the state opening in the Queen's Speech on October the 14th and I hope the opposition will use
that time to reflect.
(END VIDEO CLIP)
CHATTERLEY: All right, let's move on. The death toll in the Bahamas has risen to 50 as recovery efforts continue more than a week after Hurricane
Dorian ravaged the islands. Nearly 5,000 people have fled since the Category 5 storm reduced parts of the Bahamas to ruins.
The Prime Minister is assuring evacuees they will be able to return home as communities begin to rebuild.
South Korea's military says North Korea has launched two unidentified projectiles just hours after Pyongyang said it was willing to resume
nuclear talks with the United States later this month.
The two projectiles were launched east towards the sea. It's North Korea's 10th launch since May.
All right, so we're going to take a quick break here on FIRST MOVE, but still ahead windows of opportunity. I speak to the president of Microsoft
live on FIRST MOVE to talk about the future of the technology industry.
And there's nothing accidental about these billionaires. We hear from the author of the book that would become "The Social Network" to find out what
the Winklevoss twins did next. Stay with us. We're back in two.
(COMMERCIAL BREAK)
[09:18:27]
CHATTERLEY: Welcome back to FIRST MOVE. Google is facing antitrust investigations in 48 of the 50 US states. This, after State Attorneys
General joined forces on Monday. The probe will look into whether the tech giant abused its dominance harming consumers and competitors.
The announcement comes as more people are calling for a tighter regulation of technology. And that includes our next guest, who is Brad Smith,
President of Microsoft. He's also co-author of a new book, "Tools and Weapons: The promise and the Peril of the Digital Age." Fantastic to have
you on the show, Brad, thanks for joining us.
BRAD SMITH, PRESIDENT, MICROSOFT: Thank you.
CHATTERLEY: Great book, loved it.
SMITH: Thank you.
CHATTERLEY: "Tools and Weapons," a perfect description of what technology I think represents to society. I want to start with the idea of regulation
because as you'd sort of talk about in the book, Microsoft was at the forefront, perhaps of the first sort of backlash from society over that the
dominance, the strength of technology, and it was a tough battle for Microsoft.
SMITH: We talk about it, honestly, I think candidly in the book. It was a tough experience for us. It was I think sort of technology's first
collision with the world, so to speak. We had to adapt. We had to change. We, I think became older and wiser but we also found a new path. And I
think in that path, there's an opportunity for all of us in tech. I think the whole industry is at a point where we need to mature to some degree.
CHATTERLEY: When you said it was painful, Microsoft, though avoided being broken up which was what calls were at the time. I mean, that was what you
were risking at that point. Do you think today is different? Is it better? Is it worse is it more likely that we again, see these cries for a
breakup of some of the big tech giants here?
[09:20:13]
SMITH: I think the issues today are broader and deeper, and that's really what we try to address, my co-author, Carol Ann Brown in our book. It is
issues like privacy and security and the impact of artificial intelligence on whether humans remain in control, whether our jobs change.
So when you think about the concerns that people have, they are so much more far reaching than the ones we had to address at Microsoft 20 years
ago. But nonetheless, I think the fundamental lesson is the same. You have to take stock with other people's concerns and you have to take steps
to address them.
CHATTERLEY: I mean, the conclusion of the book, and I don't want to spoil it is that the technology companies themselves have to be better at self-
regulating, but governments need to move quicker and faster at keeping up with technology and understanding the implications, I think, of that
technology.
One of the phrases that comes up a lot in the book, "minimum viable regulation." What's that?
SMITH: Well, we tell this story about how software development is in fact, based on this concept of a minimum viable product. The notion is you may
not have every feature that you will want in five years, but get a product produced, start selling it, learn from the real world and then add to it
and make it better.
CHATTERLEY: Yes.
SMITH: And our basic point in something like facial recognition is we don't know all of the things that the law is going to need to address in
five years. But we know some of the things it needs to address today, like steps to prevent bias and discrimination.
Rather than have governments debate this for five years, get something done and learn from the real world experiences.
CHATTERLEY: You're not going to be able to perfect this, you have to do something and then you can build on it in the future.
SMITH: Yes.
CHATTERLEY: Act faster. Cyber security -- you've said this is the new battleground, cyberspace, ultimately, there's a brilliant story where you
talk about Microsoft's battle with Russian hackers heading into the 2016 U.S. elections, it is important as we head into 2022. Is this a problem
that we're on top of? Or do we have to accept that actually 2020 U.S. elections is still at risk here.
SMITH: I think there is a great deal at risk. I don't think we've yet grappled fully with everything that we now understand about, say the U.S.
elections in 2016, or the French elections in 2017.
CHATTERLEY: Right. It's so much bigger than one.
SMITH: Exactly. And it's the weaponization of e-mail, with hacking of candidates, it is threats to voting systems, it is disinformation. So we
still have to catch up with the problems that exist today. That's why we tell these stories behind the scenes about what has been unfolding.
But I also think we need to recognize the other side is not standing still. There is impressive, unfortunately, impressive innovation by hackers, by
disinformation designers. And so with each step we take, we have to assume that the other side will respond.
CHATTERLEY: There is also a brilliant story where you're looking at the United States and China, and you describe where you became peacemaker at
Microsoft with Xi Jinping of China coming to the United States for a meeting with President Obama, a couple of months before, there's a huge
hacking incident. And, and you kind of have to step into the breach here. What's ultimately resulted is what is being called a trade war. But it's a
far bigger battle over technology. How is this war won, ultimately?
SMITH: It was one of the hardest chapters to write in the book, because I don't know that it is a war that either country can ever win, and I don't
know that it's a war that the world wants one country or the other to win. The real question is how we create a stable peace. A peace that benefits
both countries, but one of the points we make is that almost 80 percent of the people in the world don't live in either the United States or China,
and we need a technology base in both countries that serves the world as well as the two respective populations. So it's very complicated, and we
have to find our way through this.
CHATTERLEY: Do other nations benefit if the United States and China are battling it out and attacking each other? Are others going to come up
around the sides, or actually, is everybody going to be hurt by a sort of technology battle where the United States shuts out China, and the
innovators in the United States can't use the sort of resources and the consumers that China represents here? Innovation suppressed as a result.
SMITH: I think that is the key point. One of the things we described is how software innovation is different from that in a lot of other
industries.
CHATTERLEY: Yes.
SMITH: A lot of it happens at the basic research level, and even at the practical level, a lot of source code is published in open source form. If
you buy a product that looks like it's from a German company or from an American company, it's probably in fact made around the world, not in the
manufacturing sense alone, but in the development sense, because you have researchers and engineers literally working together on a global basis.
[09:25:21]
SMITH: So if somebody tries to create a new digital iron curtain, you're more likely to hold yourself back than somebody else.
CHATTERLEY: I want to ask you as well about what we're seeing today in terms of valuations. Microsoft is an investor in in Softbank's Vision 2
Fund, a lot of questions being asked about a disconnect between the valuations that we see right now in the private markets for companies like
WeWork, like Lyft, like Uber, versus what public investors are willing to acknowledge their value is, what do you see going on here?
SMITH: Well, look, I'm obviously not in a position to speak about any specific company, but I do think that we live in a world with quite varied
business models. That's one of the fascinating things about tech. I mean, even among the established players, there are very different business
models.
And I think that's what people are starting to learn more about, not just with the big tech companies, but with the new entrants. And you always
have to ask, is the business model sustainable?
For many years, I think people felt that if a company could grow and add users, even if it didn't have a business model, it would get bought.
CHATTERLEY: It would make money.
SMITH: Yes, and people said it's okay, one of the big tech companies will buy them. I think in the new antitrust environment in the U.S., Europe and
globally, that might be a little bit different, and people are going to be under more pressure to have a sustainable business model earlier on.
CHATTERLEY: A reality check. One heck of one. Brad Smith, the President of Microsoft. Thank you so much.
SMITH: Thank you.
CHATTERLEY: It's a great book. Recommendation coming from FIRST MOVE here. The market opens next. Stay with us. We are back in two.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to FIRST MOVE from the New York Stock Exchange. That was the opening bell this morning and as expected, yes, I can see
we're seeing a bit of a spotty start to the trading session this morning, as you can see, under a bit of pressure here.
Investors eyeing higher bond yields. We were talking about this earlier on in the show. Ten-year Treasury yields bouncing from those multi-year lows.
We're currently sitting what? Just above 1.64 percent. I call that a crawl high quite frankly. But there it is, rising yields, though helping
trigger a rally in bank stocks in the session on Monday.
In fact, one of the strongest days for the bank stocks this year, Citi, the big winner up over four percent. Rising bond yields improve a bank's
ability to make a profit fits hereto. So we will watch those in the session again today.
For now, let me walk you through our global movers early on in the session. Shares of Apple pretty much unchanged as you can see ahead of the big
product launch today. The company is expected to unveil its latest iPhone today. It should have some new bells and whistles like more powerful
cameras -- three in fact -- as we were hearing earlier on in the show. Also expected today, an update to the iPad and MacBook Pro and what it will
charge for its new streaming service, too. So that's what is to watch for.
What about shares of Ford? They are lower again in the session some three and a half percent. Moody's lowered its credit rating on Ford to junk.
The rating agency says Ford is likely to see continued weak earnings and cash flow as it continues to restructure.
Target shares also under pressure, about some three tenths of one percent. The company announced its holiday hiring plan in September, plans to hire
some 130,000 seasonal workers higher than last year -- 120,000 was the number then, perhaps a bullish consumer side? Well, we will see. Right
now, off some four tenths of one percent.
All right on to another asset class now. The ups and downs of cryptocurrencies have offered a unique opportunity to get rich quickly or
potentially lose some money, too. Two entrepreneurs though that saw an opportunity early on and seized it are the Winklevoss twins. You may
recognize them from a movie about the origins of Facebook.
(BEGIN VIDEO CLIP FROM THE MOVIE "THE SOCIAL NETWORK)
UNIDENTIFIED MALE: Mark Zuckerberg walked into our dorm room and stole our computer at the University.
UNIDENTIFIED MALE: I really don't know. This office doesn't handle petty larceny.
UNIDENTIFIED MALE: This isn't petty larceny, this idea is potentially worth millions of dollars.
UNIDENTIFIED MALE: Millions?
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED MALE: It might just be letting our imaginations run away with you.
(END VIDEO CLIP)
CHATTERLEY: The story of the Winklevoss twins and their origins of their feud with Mark Zuckerberg is portrayed, as you saw there in the movie, "The
Social Network." It was based on a book by Ben Mezrich. The twins allege Zuckerberg had stolen their idea for Facebook. They eventually settled for
reported $65 million. And that money was then put to pretty good use.
In his next book, "Bitcoin Billionaires," Ben Mezrich talks about what came next, and how Bitcoin offered the Winklevoss twins a way back into Silicon
Valley.
(BEGIN VIDEOTAPE)
CHATTERLEY: They had settled with Facebook, but then they kind of became pariahs in Silicon Valley as venture capitalists.
BEN MEZRICH, AUTHOR: Right.
CHATTERLEY: No one wanted their money.
MEZRICH: No one wanted their money. So they settled with Facebook for $65 million. They took it in stock. So it became $500 million, and then they
decided they would become, you know, Silicon Valley investors. So they go out there, and no one would touch their money, because everyone's endgame
is to sell their company to Zuckerberg.
So there's this crazy clique scenario going on in Silicon Valley, where if you're not in with the right people, you know, you can't sell your company.
So they couldn't give their money away. They couldn't buy a cup of coffee in Silicon Valley, and they ended up going to Ibiza, as one does --
CHATTERLEY: As you do.
MEZRICH: Right? You know, and they were partying on the beach at the club, one of the beach clubs there and someone walked up to them and said,
"Have you ever heard about Bitcoin?" And that's kind of where their journey restarts.
So for me, it was really neat going back to characters who I had seen as one thing. ZYOU know, they were the bad guys. They were the guys in the
skeleton costumes chasing the karate kid around the gym. They were the jocks, you know, and then seeing them in a totally different light now, not
just because they made a billion dollars, but because they had the foresight to understand there was a revolution going on, when most people
missed it.
CHATTERLEY: You talk about one specific incident in in the book, and it actually resonated with me, and that was what we saw in Cyprus during their
financial crisis, and the bail-in of savers in Cyprus.
And I think everybody watching that was horrified for many different reasons that basically, nothing ultimately is safe in a worst case
scenario.
MEZRICH: Right. I mean, you think if you put your money in the bank and it is in a bank account, and that's my money, but the reality is, it's not
your money. It's money being held by a bank for you.
[09:35:06]
MEZRICH: So one day in Cyprus, when the country went bankrupt, the government said, the banks can now take your money and they took half of
everyone's money. And all of these people started to realize there needs to be a safer way to store your value. It can't just be something the
government can take tomorrow.
CHATTERLEY: And that resonated for them, too. They recognized that that perhaps was a great catalyst.
MEZRICH: Right.
CHATTERLEY: It fueled the rise.
MEZRICH: Well, the twins first of all, they had already been buying lots of Bitcoin. They had accumulated one percent of all Bitcoin.
CHATTERLEY: Right.
MEZRICH: That happened and they knew this really spoke to what they thought Bitcoin could be. You know, Bitcoin is that safe place because you
don't have to trust people. You don't have to trust governments. You don't have to trust banks. You don't trust middlemen, you only trust math.
And as boring as a math is, it's trustworthy. You know, it doesn't lie. And I think that that's what really turned them on.
(END VIDEOTAPE)
CHATTERLEY: The truth is, most traditional investors remain cautious about the benefits of investing in cryptocurrencies. Given how much time Ben
spent with the twins, I asked him why he believes at this point, people are still questioning Bitcoin's legitimacy.
(BEGIN VIDEO CLIP)
MEZRICH: That's a lot of the reason why still big money waits on the side, why still institutions are a little scared of it, why my parents wouldn't
buy Bitcoin, because they think of it as this world of drug dealers and gun runners and all of kind of this illicit stuff. And that's the battle that
is inherent, it's going to go on, I think.
What is Bitcoin supposed to be? Is it going to be that? A libertarian paradise? Or is it going to be something we can all use? And I think you
know, that's where the drama comes in. As an author, I'm looking for these Shakespearean dramas, and I think that's the drama of Bitcoin is what is it
going to be?
CHATTERLEY: Where are we along that path?
MEZRICH: Well, we're definitely -- yes.
CHATTERLEY: Because this is key, too?
MEZRICH: Well, one of the big things had to happen, of course, is Facebook jumping in with Libra. The idea that something like Facebook, which is in
all of our lives will suddenly have a form of crypto. And that changes the game, I think. It mainstreams it. It may not happen because we don't
trust Facebook. We don't love Zuckerberg, for good reason. I think we're all scared of what Facebook might do with all the information they get.
But the idea of crypto is now here in a very big way. And so I do think the battle is being won by the Winklevoss twins, people who believe crypto
will be part of our future and not just this battle, you know, not just this thing that brings down banks and governments but something that has to
work in the system.
CHATTERLEY: I mean, the twins have also said perhaps that they could be involved in Libra somewhere too, so we're going full circle in that
relationship.
MEZRICH: Well, you know, listen, I think the twins' point of view in this is that "Welcome to the party, Mr. Zuckerberg. If you need help, we're
here to help you."
CHATTERLEY: Better late than never.
MEZRICH: Right. Because they're so far ahead of Zuckerberg in this world. They've been doing this for a while now. So I think in the end, this is
positive for everybody and positive for the twins. So I could see them being involved in some way.
CHATTERLEY: Do you think they are amused by the fact that he is --
MEZRICH: Oh, they are absolutely amused. I mean, they really come back into town as billionaires, and suddenly Zuckerberg is looking at them
again. The intertwining of these characters is really something unique.
Zuckerberg and the twins, I mean, the fact that they're back again, it's so bizarre, isn't it? I mean, why are these two groups of people suddenly
coming together again, in this whole new revolution? So yes, they do find it amusing that Mark is back, and suddenly he is back in their lives. They
can't quit him, you know.
CHATTERLEY: Whether they'd like to or not. You raise an interesting point there, though, about the fact that we simply don't trust Facebook. They've
been so many breaches. You threw something else out there actually behind the scenes, which was what if Amazon decided to do crypto because we
haven't had the same kind of scandals surrounding Amazon and that has the same kind of breath here.
MEZRICH: Right. Well, the thing is, we trust Amazon, for better or worse. I love Amazon. I'm on Amazon all the time. And so is everybody. We all
put our credit card information to Amazon without thinking twice, right? I mean, I remember the first time I did that, and I was scared; now, I do it
five times a day.
And so the idea Amazon having a form of money, it doesn't seem strange to me because they are using my money all the time anyways. So I could see
Amazon launching Libra and succeeding in a way that Facebook can't. Facebook has already proved us that they're not good with our data; that
they're going to capitalize on our data. That's what they do. Amazon doesn't or if it does, it doesn't in a ways that haven't been thrown in our
faces.
(END VIDEO CLIP)
CHATTERLEY: Bitcoin was invented more than a decade ago, in fact, but the cryptocurrency market itself still feels like it's in its infancy in many
ways. Now, let's spin what's next -- how regulation can help and whether the U.S. will lead that going forward?
(BEGIN VIDEO CLIP)
MEZRICH: I think America has to decide soon where it stands on this because it would be sad to see us step back and allow this to explode in
China or somewhere else. Bitcoin is here. It's not going anywhere. So you can either oppose it or you can get in with it. And I think in the
end, it is very American, and America will get it with it.
CHATTERLEY: Do you think unregulated, it poses a danger?
MEZRICH: I think it definitely ought to be regulated, at least the inroads and outroads to it. You don't want people getting onto a crypto exchange
and having the exchange disappear tomorrow. And that's what's happened before, the idea of these exchanges being fly by night or not run out of
the United States, or not having any sort of insurance to them. And I think that's scary. So there needs to be some form of regulation like any
commodity to make it a fair playing field.
[09:40:25]
CHATTERLEY: Gold, but better.
MEZRICH: Gold, but better. Digital gold. Yes, I really think it will be.
CHATTERLEY: Well, would you be happy with your parents investing in it right now?
MEZRICH: You know that's a good question.
CHATTERLEY: It's where we started.
MEZRICH: Is that going to be money they were going to give to me? I actually do think that it has a very strong future. So I actually think,
you know, I don't ever give advice on investments because everything I've ever bought has gone to zero. You know, I own Pets.com and WorldCom. And,
you know, I'm the worst. Yes, I really do.
CHATTERLEY: Wow.
MEZRICH: But I do truly believe that there is a place for this in our future, and because the supply is so limited, you know, it has only one
direction really to go if it stays around. And so I do think it's not a bad investment.
CHATTERLEY: But you don't own one right now?
MEZRICH: I don't own any Bitcoin. I mean, I don't own anything you know, like --
CHATTERLEY: You leverage to the book.
MEZRICH: Right. I am highly leveraged in my own books.
(END VIDEO CLIP)
CHATTERLEY: I had to ask. Are you crazy for crypto yet? Well, worry not, there's more to come later this week. Tomorrow, I'll be speaking to the
CEO of Ripple to help explain what their platform does and all about their cryptocurrency XRP.
All right, we're going to take a break. But still ahead. The stuff of legends, the man behind Alibaba didn't need to say "Open sesame" to find
his fortune. Now Jack Ma though standing down from the company that bears his name.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE with a look at today's "Boardroom Brief." It's a happy birthday and happy retirement for China's richest
man. Jack Ma is officially stepping down as the Executive Chairman of e- commerce giant Alibaba. The 55-year-old will now focus on philanthropy and the work of his foundation. He says Bill and Melinda Gates were an
inspiration to him. Ma spent two decades turning Alibaba into a business worth $460 billion. Wow.
In doing so, he pioneered online commerce within the Chinese market. But long before that, Ma, was an English teacher, one who would never lose his
passion for education. FYI, September the 10th also happens to be Teacher's Day in China. How apt.
Now, the person Donald Trump calls Europe's Tax Lady will stay on as the E.U.'s Competition Chief. Margrethe Vestager is known for her record fines
against Google, as well as demanding the island claw back taxes from Apple. She will stay in her position for another five years, part of the European
Commission's newest lineup.
[09:45:50]
CHATTERLEY: And Volkswagen has unveiled a brand new electric car, the ID.3. It's roughly the size of a Golf on the outside but with a shorter
foot and a larger passenger area. The German company says it wants to return to its roots by making fun cars like the iconic Beetle.
In the meantime, the shipping industry will soon face fresh regulations demanding its cuts down on fuel emissions. One company, Hurtigruten is
already on its way introducing hybrid ships. John Defterios has more from Norway as part of "The Global Energy Challenge."
(BEGIN VIDEOTAPE)
TEXT: The Global Energy Challenge.
DEFTERIOS: On this edition of "The Global Energy Challenge," we're in the fjords of Norway, exploring fuel innovations in the shipping industry.
DEFTERIOS (voice over): In this part of the world, the sea for centuries has delivered a bounty from fisheries to oil to cruise tourism. But with
big industry comes in impact on the environment. A cruise company, Hurtigruten has been trying to offset with a new fleet of hybrid ships.
The industry itself is going through a sea change with regulations coming in 2020, demanding shipping companies slash sulfur emissions from heavy
fuel oil. But Hurtigruten is already ahead of the curve, transforming these engine rooms into a new hybrid system. Combining marine gas oil with
electric battery packs, and even bio gas produced from organic waste from Norway's fisheries and forest.
(BEGIN VIDEO CLIP)
DANIEL SKJELDAM, CEO, HURTIGRUTEN: Our aim is to show that it's possible, that we can build the world's first hybrid powered cruise ship with
batteries that we can be the first ones to start using bio gas from a circular economy and then we expect all other ones to pick it up.
UNIDENTIFIED MALE: This is the battery racks where all the batteries go in. You throw them in.
(END VIDEO CLIP)
DEFTERIOS (voice over): Rune Andreassen is one of Hurtigruten'S most experienced Sea Captains, and has now been brought back on shore to project
manage construction of the newest hybrid.
(BEGIN VIDEO CLIP)
DEFTERIOS (on camera): We didn't see a lot of change. And then people are saying look, climate change is a real threat. Shipping has a role.
RUNE ANDREASSEN, PROJEC MANAGER, HURTIGRUTEN: Yes, of course. Big role because there's a lot of vessels worldwide still burning heavy fuel. It's
-- if you asked me 10 years ago, I will never say that this is possible at all. No ocean going West, it is nowhere here and I think it's just
beginning.
(END VIDEO CLIP)
DEFTERIOS (voice over): While Hurtigruten has a relatively small fleet and smaller vessels than the giant cruise liners, some holding 10 times the
passengers, the CEO is hoping his company will have a giant role influencing the industry with over a century of experience in these
pristine waters.
(BEGIN VIDEO CLIP)
SKJELDAM: So we have chosen as a company to be in the forefront to lead and not wait for the regulations. And then the investors start requiring
change, things will happen.
(END VIDEO CLIP)
DEFTERIOS (on camera): The regulations were first announced four years ago, but reality is coming in January. More FIRST MOVE just ahead.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
[09:50:54]
CHATTERLEY: Welcome back to FIRST MOVE. Today we're marking our first year of FIRST MOVE on CNN. It's been one wild ride for us, as well as the
markets. Clare Sebastian joins us now. Clare, also wild ride for you personally, because right before we were set to launch, you broke your leg
and weren't around. So I do have to mark that, too. We are very grateful that you're back.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, I nearly tripped up on my way work, Julia. This is one thing to mark the occasion.
CHATTERLEY: I know.
SEBASTIAN: Just in memory of last year. All healed, though. But it has been, as you say a wild ride for the market. The S&P 500 is now up about
3.7 percent compared to last year. But within that, as you can see, a lot of big swings driven largely by trade and monetary policy. And we've
tallied up some of the things that have been moving the markets this year, Julia.
Have a look, we think about 3,600 Trump tweets that's based on the JPMorgan estimate of 10 tweets per day. That's actually probably a conservative
estimate. I think he has been ramping up the tweets recently in an increasing number as we were discussing yesterday, are market moving.
We've got one trade war, unresolved. Hundreds of millions of tariffs have been implemented, still no resolution. The talks there continue. And of
course, how could we forget, three rates changes, two up and one down with another probably set to follow this month.
So there's been a lot of change, a lot of moves, Julia. And a lot of ups and downs. You of course have been up and down the stairs at the New York
Stock Exchange multiple times and you even climbed a Swiss mountain. So have a look Julia at some of your highlights from the last year.
(BEGIN VIDEO CLIP)
CHATTERLEY: I am Julia Chatterley at the New York Stock Exchange, and this is CNN.
This is FIRST MOVE and here is today's need to know.
Where do you see the greatest opportunities at this moment?
UNIDENTIFIED MALE: The greatest opportunities around the world without doubt are still in the United States.
CHATTERLEY: Do you think we're still a bull market, an equity bull market?
ALAN GREENSPAN, FORMER U.S. FEDERAL RESERVE CHIEF: Not really. Now, we need to fumble. I can see it by reaction in recent days.
CHATTERLEY: You've had great earnings, a great response from investors as well. Can we say it's Cloud Nine or is that number not big enough?
GINNI ROMETTY, CEO, IBM: Yes, you know that with any cloud.
PAUL KRUGMAN, AMERICAN ECONOMIST: I've been saying to my British friends, you know it's interesting, our bad guys are much worse than your bad guys.
But you have no good guys.
CHATTERLEY: We are live from Abingdon Green, outside of the Houses of Parliament here. Are you suggesting that the British people -- I think --
I think they were lied to, I think they were lied to by politicians. They were given false truths.
UNIDENTIFIED MALE: They were not lies. No, they were not lies.
CHATTERLEY: I think they were.
UNIDENTIFIED MALE: Well, we --
CHATTERLEY: So I do think this was stupidity. I also voted in this election. I do think people are stupid.
UNIDENTIFIED MALE: We will agree to disagree.
CHATTERLEY: Okay. I have an extraordinary guest joining us today. Hi, there.
ROBOT: Sorry. Could you say that again?
CHATTERLEY: I just said hello.
This, I have to say is the most unusual guests we've ever had in the "Chatt Room."
I spy -- an ice palace.
I'm not sure you would believe how comfortable and cozy this bed is. But all I can say is, it's like you know, lying on a cold cloud.
RICHARD QUEST, CNN INTERNATIONAL HOST: It could be prophetic to go all the way on this.
DEFTERIOS: I don't agree with that. I think you're going to have the key for what we have. We have to disagree about something.
CHATTERLEY: Go off set and disagree, please.
QUEST: The monetary policy, having gone like that, they're going to take a pause.
CHATTERLEY: I had a conversation that said someone could actually cut -- they could bring rates down again in 2019.
TEXT: Good call, Julia.
CHATTERLEY: Austerity, Richard, I blew the budget on the jumper.
QUEST: But he was rather good.
CHATTERLEY: She was brilliant.
QUEST: They will catch on.
CHATTERLEY: Well, I've definitely seen worse.
QUEST: I'm rather glad, they've gone.
CHATTERLEY: Yes.
That just about wraps it up.
That's it for FIRST MOVE.
Time to go make yours.
Now, this is the way to exit.
(END VIDEO CLIP)
[09:55:10]
CHATTERLEY: I'm trying not to cry. I'm waiting for a cake and flowers. I didn't even know what to say. Molly as well, David behind the scenes. But
you saw their pictures there. We have such a great team here and I'm hugely proud and privileged of all the work that's gone into this.
So yes, I'm trying not to. I'm trying not to cry. What flavor is the cake, by the way? That's very important, too.
Clare, thank you so much, and for everyone that put that together. You know, I said earlier on the show one year down feels like 10. But
somewhere in the middle, in a good way. Yes, here's too many more. I hope. Thank you so much for being part of it.
SEBASTIAN: I am raising a glass, Julia, with a FIRST MOVE mug. A very British cup of tea for you and I. A lot more to come in the next year or
so, and election season, more China trade talks -- plenty more fun to be had.
CHATTERLEY: Oh my goodness. Yes, there is a lot to come, yes. Absolutely. Well, from everyone at FIRST MOVE to my whole team, here is to
many more years. Thank you so much. Now, I'm going to go and cry.
That's it for the show. You've been watching FIRST MOVE. Time to go make yours.
Thank you.
(COMMERCIAL BREAK)
[10:00:00]
END
