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First Move with Julia Chatterley
Oil Producers Paying Buyers To Take Delivery As Crude Prices Go Negative; President Trump Threatening To Ban U.S. Immigration; Concerns Over The Health Of North Korean Leader Kim Jong-un. Aired 9-10a ET
Aired April 21, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:14]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from New York, I am Julia Chatterley. This is FIRST MOVE here is your need to know.
Worse than worthless? Oil producers paying buyers to take delivery as crude prices go negative.
Temporary suspension. President Trump threatening to ban U.S. immigration.
And in grave danger. Concerns over the health of North Korean leader Kim Jong-un.
It's Tuesday. Let's make a move.
Welcome once again to FIRST MOVE. Great to have you with us this Tuesday. I hope you are staying healthy and staying safe.
Today, we begin, though, with the economic implications of the coronavirus outbreak once again front and center. We saw U.S. crude oil prices trading
below zero. That's below zero dollars a barrel for the first time ever yesterday. In English, as I just mentioned there, that means oil producers
effectively paying buyers to take the oil off their hands.
Just imagine that. That's the world we're living in. Let me show you where oil is trading at this moment. This is the June contract. It's a June
futures contract. The price of oil for delivery in a month's time right now, as you can see, that's below $16.00 a barrel, down more than 23
percent intraday.
So what's going on? Well, a few things. Demand has dropped, of course. We're driving less, we're flying less, the manufacturing sector is using
less. You name it -- and that's going on all around the world.
Supply, of course, has been cut by some of the biggest oil producers in the world, but as we discussed at the time, that cut was not big enough, and
then the latest fear here in the United States is that we run out of places, simply to store all the oil that's being produced and delivered,
and we could do that in just a couple of weeks' time.
There are some 10 million workers in the U.S. oil and gas sector and associated industries. The real question is, what does that mean for them?
Right now, let me give you a look at what we're seeing for markets. U.S. futures pointing to a second day of losses. Of course, energy stocks
dragged the market lower yesterday. They are weaker premarket once again today, but sentiment was hit all around the world.
In Asia, Hong Kong stocks took their biggest fall in almost a month. Also keeping an eye on Singapore there, too, the stocks there falling by almost
two percent as the nation extended its partial shutdown to June 1st due to a jump in coronavirus cases, so a lot to be watching at this moment.
Let's get to the drivers because I want to talk oil with Mike Sommers who is the CEO of the American Petroleum Institute and he joins us now via
Skype.
Mike, great to have you on the show once again.
MIKE SOMMERS, CEO, AMERICAN PETROLEUM INSTITUTE: Great to be with you.
CHATTERLEY: Great to have you here. Let's talk about the implications first and what was driving prices yesterday, specifically, and what this means
for the sector.
SOMMERS: Well, what you saw yesterday was really a confluence of a number of different issues. First of all, you mentioned in the opening that we
have historically low demand because of coronavirus.
We've gone from about a hundred million barrels a day of demand to about 80 million barrels a day of demand and that's only going down.
And then on top of that, you have huge increases in supply. That came as a consequence of the Russia and Saudi price war, and those cuts aren't going
to come until May 1st, based on the deal that the President negotiated.
And then finally, you have the last day of the futures contracts for May that came into effect over the course of the last just 24 hours and because
of a lack of storage in the United States and elsewhere, you had a significant drop in oil prices into negative territory.
CHATTERLEY: Let's talk about potential responses, because obviously President Trump reacted to this yesterday, and he suggested that he was
looking into the possibility of restricting Saudi imports of oil into the United States. We know tankers are on their way here already. What do you
make of that? Would you like to see that?
SOMMERS: Well, one thing that we would be concerned about is any kind of a blockade of oil coming into the United States. Many of these contracts were
signed prior to this crisis, so in the early March, late February time frame.
As you can appreciate, this is a world market for oil in the world, and as a consequence of that, we need to make sure that our refiners, in
particular, have the grades of crude that they need to run their refineries.
Refineries are already operating at about 30 percent lower than what they usually do, and we need to make sure that they have the stocks that they
need, so many of the refineries in the United States don't run the kind of crude that is produced within the United States.
[09:05:21]
SOMMERS: One thing is for sure. At some point, demand is going to come back, and we need to make sure that American companies are able to actually
respond to the -- when the demand comes back for these products.
CHATTERLEY: Yes, it's critical to understand what kind of oil is being used for what process and the supply chain here as well. You mentioned, and you
said it to us the last time you were on the show as well, that we've already seen in the United States a reduction in production capacity by
around a third.
I've seen some conversations or had some conversations with those in the sector that say in order to match the level of demand that we're seeing at
this moment, that production capacity has to reduce by another third, so two-thirds of capacity taken out in the United States. Would you agree with
that, or do you think that assessment is wrong?
SOMMERS: You know, we tend to think that that assessment is wrong. Ultimately, what you're seeing right now is because of this historic price
drop, you're seeing -- the energy information agency actually suggests that we're going to see about two million barrels a day come off from American
production this year.
So if, in February, we had record high production of 13 million barrels a day, and as a consequence of a price drop, you're going to see about --
that go to about 11 million barrels a day, and then there are significant drops in terms of supply from other places all over the world.
So, of course OPEC has decided to cut their production as well. Canada has cut production. Other big production areas are cutting their production
also.
What we need to make sure is that this industry can continue within the United States after this pandemic concludes.
American energy leadership has been very important for American economic recovery and we need to make sure this industry survives through this
terrible crisis.
CHATTERLEY: I mean, I mentioned at the top of the show even just for the United States, we're talking 10 million jobs within this sector, but
associated, that of course, are supported by this sector as well.
What are we talking about in terms of job cost as a result of the low prices that we're seeing? And I know that depends how long it goes on for,
but you said also last time, you're not in favor of bailouts. What support is needed for this sector?
SOMMERS: Well, there are a couple of different things that we can do. First of all, we're working very closely with the Department of Energy in the
United States to figure out new and more creative ways to store oil that is not needed in the market today.
That is one of the biggest concerns that we have right now. It is a lack of storage in the United States.
Second of all, we need to make sure that the facilities that have been set up by the Federal government, whether it's the small business program or
the program through the Federal Reserve, that our companies have access to the liquidity that they need to survive the crisis, just like any other
company that is dealing with this crisis right now in the United States.
And we also need to make sure that our trade commitments are being met. Of course there was a big China Trade Deal at the beginning of this year, and
we would be very hopeful that China and other countries that have made commitments to the United States as to take American energy will honor
those commitments.
We need to make sure that markets that are open are taking American product, particularly when it comes to liquefied natural gas.
CHATTERLEY: Fulfill your contract is the message. The CEO of the American Petroleum Institute, Mike Sommers. Great to have you on with us once again,
Mike, and stay safe.
SOMMERS: Great to be with you.
CHATTERLEY: Thank you.
SOMMERS: Thank you.
CHATTERLEY: All right, President Trump also tweeting his intention to suspend U.S. immigration temporarily blaming the coronavirus outbreak and
the need to protect American jobs.
Joe Johns joins us from Washington. Joe, how feasible is it just to turn the immigration taps off for however long a time, and what implications
might that have for jobs in the United States? I'm talking critical jobs that are being done by foreigners.
JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, we don't have a full understanding of what the President is talking about because a lot of
people in the administration say they're still working on this Executive Order that the President tweeted about last night, but what we do know is
the President's tweet indicating that this was to protect American jobs and that does seem to be the case.
Sources telling CNN that what the President is interested in doing is cutting off new green cards, as well as work visas for a temporary period
of time. What does temporary mean? Well, we're told about 120 days or so by some administration officials.
[09:10:10]
JOHNS: On the other hand, the National Security adviser for the U.S. was out here on the lawn a little while ago and we asked him about it and he
said that the virus essentially would dictate how long this order would last by the President.
Also important to say that a lot of the immigration issues that the President wanted to deal with during the coronavirus crisis have already
been dealt with in large part, especially on travel and immigration from Europe, as well as China.
He's already moved in that direction. So, we would like to see what else the President has to say about that. It's not clear at all how the
President is going to do this, what vehicle, in other words.
What we do know from Supreme Court precedent is that the President appears to have the power to move forward on something like this, at least on a
temporary basis.
Nonetheless, when the President does sign and put into effect an order like this, you'd almost certainly have some court challenges and they've had to
go back and forth again and again because this President has been hardline, if you will, on the issue of immigration, even before he was elected to the
job -- Julia.
CHATTERLEY: And this is a critical point, I think, because I do fear that we're conflating two issues here, one which is a health crisis and the fear
that sick people could be coming into the country when we've closed the borders to many nations, versus a jobs crisis in the country.
I mean, Katherine Rampell of "The Washington Post" said 18 percent of our healthcare workers in the United States are immigrants to the United
States. Thirty percent of nursing home, housekeeping and maintenance is done by non-Americans, which I think is a critical point.
Was this a distraction technique, Joe? It's a winner with President Trump's supporters.
JOHNS: As you know, the President is famous for distraction techniques and uses them very often. Not clear at all just how sweeping this order will be
at the end of the day, and we're also told there is room to believe that they will leave space for people coming across the border to work in
critical or essential jobs, so there's that piece of it as well -- Julia.
CHATTERLEY: Okay. Yes. Food supply, another one, I think, that's also critical here. Joe Johns, thank you so much for your analysis as always.
Let's move to North Korea now. A U.S. official telling CNN Intelligence suggests that Kim Jong-un, the North Korean leader, is in grave danger
after undergoing surgery. Will Ripley is live in Tokyo with the latest.
Our colleague, Jim Sciutto, getting this information, Will, but you only have to look at images of the North Korean leader. He is clearly heavily
overweight. We believe he smokes. What more do we know, if anything, about his current health?
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Yes, Kim Jong-un's health has been a subject of speculation and fact that he has had health problems.
We've known about them for years. He disappeared from public view back in 2014 for 40 days, Julia and then later reappeared in state media walking
with a cane after having surgery on his foot.
He is 5'7", almost 300 pounds, a heavy smoker. He is often photographed with a cigarette in hand, and he also has a very stressful job and those
are all factors that are not conducive to a healthy heart.
So, there certainly is believed to be legitimacy to these reports that he underwent some sort of surgery. In South Korea, an online publication says
it was heart surgery, but his condition is what is really in question because these U.S. officials are telling Jim Sciutto it is grave.
South Korea and China though pushing back on that saying that everything seems normal in North Korea to them, although back in 2011, before Kim
Jong-il was pronounced dead, it took two days for the country to do that and during those two days, everything also appeared normal.
Som the fact is, we are not going to have answers until we get them directly from Pyongyang, and that's only going to happen when they are
ready to release something.
Kim Jong-un's health is a national state-guarded secret and they're going to be very cautious about what information they choose to reveal.
CHATTERLEY: I mean, we're making a huge supposition here, but I think clearly questions will be asked about succession, whether the leadership
will be kept in the family. Who's most likely to replace Kim Jong-un in the future if something did happen?
RIPLEY: It is a valid question. It's an important question when you're talking about a country that has a growing nuclear arsenal and if Kim Jong-
un is not in command, the legitimacy of this family dynasty and North Korea wouldn't like you to call it that, but that's what it is. It's been family
succession from Kim Il-sung to Kim Jong-il to Kim Jong-un, so who is now in the spotlight?
Well, we know that his sister, Kim Yo-jong has been by his side very strategically and deliberately in recent years, Julia. She was there for
the Summits in Singapore and Hanoi. In fact, just days before Kim was conspicuously absent from the day of the Sun Holiday on April 15th, Kim
presided over a politburo meeting where his sister was given a powerful title, further consolidating power inside the family.
[09:15:10]
RIPLEY: So, it's key that a member of the Kim family play a crucial role if there was some sort of transition. Kim Yo-jong is the obvious name that
pops up on the list. There might be other family members behind the scenes, who also could play a role, not to mention a circle of powerful elite who
would assist.
But in the end, it's going to require somebody in the Kim family and Kim Jong-un does have three children, Julia, but they're all very young.
There's a newborn and other children that are still in primary school, so certainly they're not yet of age to take over, so to speak.
CHATTERLEY: So, Kim Jong-un's sister potentially in succession or at least in line. Will Ripley, great to have you with us. We shall watch this
closely. Thank you.
All right. We're going to take a break here on FIRST MOVE, but coming up, track and trace. The President of Microsoft talks about the importance of
good data in the coronavirus fight and beyond.
Plus, more on oil's historic collapse. What are the broader implications? Stay with us. We'll investigate.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. Futures here in the United States still pointing to a lower open for U.S. stocks as the collapsing U.S. oil
prices creates fresh uncertainty for the global economy, weighing on energy stocks in particular.
In the meantime, major U.S. multinationals continue to warn that they have little earnings visibility going forward due to the COVID-19, and when we
simply come out of the shutdown that the broader economy and the world is in.
IBM just the latest firm to pull its 2020 guidance. It is also reporting a more than 3 percent drop in Q1 revenues. Its shares down some five percent
premarket.
We've also got Netflix reporting results later today, too, to keep an eye on. Also, biotech stocks continue their outperformance. Moderna, Novavax
and VBI all soaring Monday, each company trying to develop a COVID-19 vaccine and they are all, as you can see, significantly higher premarket,
too.
Critical to the fight against COVID-19 data, collecting data to track and trace recent cases. Data, of course, also fueling the rise of the digital
economy, allowing us pretty seamlessly, let's be clear, to transition to at-home working for millions of people around the world and beyond the next
few weeks and months. It will also play a crucial role in the fight against climate change, something our next guest, we know, is very passionate
about.
Brad Smith is Microsoft's President and joins us now. Brad, always a pleasure to have you here on FIRST MOVE. Let's just talk about that.
[09:20:37]
BRAD SMITH, PRESIDENT, MICROSOFT: Thanks, Julia.
CHATTERLEY: And the challenge of one, fighting COVID-19, but also the shift that we've seen for millions of people working from home that even five
years ago, I don't think would have been as possible as it was today.
SMITH: Well, I think that's really well put. It just shows how rapidly digitization has been spreading around the world and through our economy,
and let's face it, we would not have been able to sustain operations as an economy, globally, over the last two months without digital technology the
way it works today.
I think, really, in two fundamental ways, while not everybody can work from home, many people can. That's keeping businesses going. It is keeping
governments going, at least in many instances.
And then we're seeing data as the fundamental, really, the indispensable tool for the decisions that public health authorities are needing to make
all the way from the local to the global level, when to reopen economies, how to reopen, how to measure the spread of the pandemic in the future.
So, digital technology and data are really coming together here.
CHATTERLEY: I mean, you said it's the currency of the digital economy, the data that fuels us and drives us. You've announced today an open data
initiative just to try and create a more even playing field between perhaps the largest companies in the world that are capable of collecting most and
using most data versus some of the smaller companies that are at relative and increasingly large disadvantage. How will that work in practice?
SMITH: Well, I think that the COVID-19 challenge really demonstrates the importance of opening up more data and closing the data divide, if you
will, between the largest companies on the planet and everybody else.
You know, even when it comes to local authorities, states in the United States making health decisions, you know, what we have found is that it has
been very difficult because data has been siloed, it's not always usable because it cannot be aggregated in a seamless way. This is something we
need to address for the future.
So, interestingly, we started work in January on an open data campaign. We've moved forward. We've launched it today. We want to provide the tools
that small businesses can use, that governments can use to create the kind of future that will harness data, really, for every part of the economy and
not just the largest players.
CHATTERLEY: And it's a process that's clearly going to continue to evolve over weeks, months, and years. You know, it brings me back to a
conversation that we were having in Davos, which feels like years ago, quite frankly, even though it's only a few months, and the progress that
Microsoft is making and the battle that you're facing with -- between now and 2030 going carbon negative and we discussed what Greta Thunberg's
carbon zero would look like and to some degree as I look around the world, we're seeing that as we see skies clear and waters look cleaner.
And the economic costs of that, the offset of shutting down even just here in the United States. What's the takeaway here, Brad, do you think?
SMITH: Well, I think that a lot that was true in January is going to be true not just in June, but is going to be even more true at the end of the
decade than when the decade began.
We've got to sustain economic growth and separate that growth of the economy from the constant increase in letting more carbon into the
environment.
And so, we're having to shift. That's what we did as a company at Microsoft when we announced in January that we'll be carbon negative by the end of
this decade.
It's what we're going to have to do around the world and throughout the economy. We look to data and digital tools as part of what will enable us
to get there, but clearly, it requires a whole lot more, and while we're fighting, we can work from home.
We need a better solution than telling everybody to lock themselves in their houses in order to reduce carbon emissions, and you know, this may
not be the issue of April. It will remain the issue of this decade. I think, of that, we remain confident.
CHATTERLEY: You know, people watching this will say that Microsoft is at an advantage here because it has more money, it has scale, and it continues to
invest.
As we look at the economic damage that's being wrought just fighting COVID- 19, do you think that businesses, companies are going to be as willing to invest in their carbon footprint, making sure they're cleaner companies
than perhaps they were even three to six months ago?
[09:25:21]
SMITH: I think our role as a company, frankly, has to be to create technology and tools that enables and empowers small companies as well as
large ones; governments as well as entities in the private sector.
You know, we've existed as a company for 45 years. If there's one constant since the invention of the PC, it has been using technology to empower the
smaller participants that, frankly, are the fundamental fuel of economic growth. It is always where the most jobs are created.
We're going to have to go through a couple of years that, let's face it, are about adjusting to an unusual health situation and recovering
economically, and then we'll be able to look beyond, but I do think one constant is going to be the accelerating use of digital technology and data
to actually accomplish all of these things together.
CHATTERLEY: Yes. To help us do it quicker and more efficiently as well.
Brad, talk to me about what that back to work and some degree of normality looks like for Microsoft. What are your plans here? And as other big
companies like amazon, for example, talk about possibly setting up their own in-house testing, is that something that Microsoft is discussing, too?
SMITH: Well, I think we're very sensitive. We don't want to divert the test kits that right now are the critical supply -- in short supply -- from the
first responders, from the health authorities, from the people with symptoms that need it most, but we'll have the chance all together to look
beyond that.
I think the most important thing to really think about is that getting back to work, unfortunately, in the short-term, doesn't mean getting back to
normal.
I think, you know, our workplaces were not designed around the world to keep people six feet apart, but as we bring people back to work, we're
going to need to keep them six feet apart.
It means we're going to have to bring people back in phases. I think for some period of time, those companies that can have people work from home to
some degree are probably going to have a bit of a split workforce. Some people will be in the office. Some people will be at home. There will be
social distancing in the office.
I think we'll see self-attestations in terms of health every morning across the economy, many of us will just wake up and that's one of the things
we'll do.
We'll see more temperature checks, probably not just in businesses, but in more public places. That's what we learned from China.
You know, we'll see technology in other ways play a role, including in tracing people and tracking people, but I think if there's one conclusion
that has really become clear, there is no single approach that is a panacea.
We're going to need a layered approach as a society that relies on broader testing by the public health authorities for COVID-19, self-attestations,
temperature checks, COVID-19 checks, serologic testing as it becomes available, tracking and tracing.
We'll have to put these pieces together, really, to sustain the economy and get as many people back to work as quickly as we can.
CHATTERLEY: Yes. Our daily lives are going to be very different, I think, for a while, but that is the new normal. Brad Smith, great to have you with
us, sir, as always, the President of Microsoft there. Stay safe, please.
SMITH: Thank you. You too, Julia.
CHATTERLEY: Thank you. All right. The market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:32:02]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stock markets are open for trading this Tuesday, and we have a lower open. Oil continues its historic
slide, and that's putting pressure on energy stocks in particular.
Both Brent and U.S. crude sharply lower again today. All of this after U.S. crude's contract plunged to a negative $37.00 a barrel price yesterday.
That was U.S. crude, and the March contract, to be specific.
Meanwhile, we're watching what's going on for earnings season. Coke announcing before the bell that demand is falling sharply this month with
global volumes down some 25 percent.
Just for relative comparison, actually, the price of a bottle of Coca-Cola is currently more expensive than a barrel of U.S. crude on that expiring
futures contract. Wow. That gives you some degree of perspective here.
As we've been discussing on the show, oil demand this week, supply remains high and there's a storage facility issue, too. The fear is we're running
out of space and could do so in the next couple of weeks.
The CEO of Canary, the oil field services company says it's particularly bad here in the United States.
(BEGIN VIDEO CLIP)
DAN EBERHART, CEO, CANARY: There's just physically nowhere to store the oil, so this isn't really a market problem. This is an actual physical
storage problem and we've hit that before the rest of the world here in the U.S.
The industry is not built to work backwards, to shut in production it doesn't need, and so the industry is having to work in reverse right now,
and it's just not set up for it, and we aren't a coordinated producer like these petro states, Saudi Arabia, Russia, et cetera.
We have many companies in the U.S., many medium-sized independents, and they're having to act in concert, but not under directive from the
government, so it's really kind of a crap shoot right now and everyone's scrambling.
(END VIDEO CLIP)
CHATTERLEY: Scrambling is the word. Let's discuss this with John Defterios. He just said there, John, history is not meant to work backwards but
whether it's backwards or topsy-turvy, quite frankly, it's clearly having an impact on the oil markets and not just U.S. crude because as we were
just showing there, Brent, also, under significant price pressures here, too.
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Indeed, Julia, and I think what Dan had to say was very interesting. When do you throw up the
white flag and say, I have no storage or hang in there and keep on shipping, hoping this market will turn around? Because then you shut in
your production and you have had cost of exploration and then you lose it.
So, this is the decision making that's going on in the Permian Basin and throughout the oil states in the United States, and as you suggested,
Julia, this is almost like the COVID-19, it's very contagious, the selling. We had this recovery in that May benchmark, 88 percent, and we're still
negative four.
But as you've suggested, we've moved to June and WTI down -- what -- 30 percent? It's like from a different world.
We had Brent down at an 18-year low, down 25 percent, and still in that direction and a half hour after the market closes today, the shift of
attention will go to inventory, as you spoke to the CEO of American Petroleum Institute, they released their latest numbers, the expectation is
a record 16 million barrels added.
When I looked at the numbers today. We're about 20 million barrels shy of the March 2017 high of 535 million barrels. We're bursting at the seams.
[09:35:27]
DEFTERIOS: And then when we did try to correct that market, it took nine, 10, 12 months to eat up those inventories. Another point I would make here
is that people are not focused on the rig count, but we should be and that happens on Fridays normally, but it's down five weeks in a row and the rig
count is down nearly half over the last year.
What does that translate in terms of production? At least a loss of about two million barrels in 2020 and perhaps even more depending on how long the
selling goes on because we don't see the demand coming back just yet -- Julia.
CHATTERLEY: Yes, and I mean, when we're talking about negative prices just again for our viewers to understand, what it felt like was a squeeze here
where those who had to take delivery of the oil were saying, you are going to have to pay us to do this because we know we've got nowhere to store it
and that's going to cost us.
We're going to have to negotiate somewhere to put this, quite frankly. President Trump suggested yesterday that he would look, perhaps, to do the
same to the Saudis, and we know oil is on its way to the United States and just say, we're not taking it. Is that an option, John? And what impact
would that have?
DEFTERIOS: Well, we have to keep in mind, this is a presidential election year so it is an option for the President, and someone who was touting the
fact that we had 13 million barrels a day in February and if this correction goes very badly, it could be around nine or 10 and below Saudi
Arabia, so we have to think about that politically.
The senator from North Dakota, which is an oil-producing state, Kevin Cramer, has put forward that bill that the President is considering. If you
look at the May shipments from Saudi Arabia to the United States and the special grades that they need in the States, it's about 600,000 barrels, it
gets very complicated because Saudi Arabia owns the largest refinery in Port Arthur, Texas called Motiva.
Also, we see James Inhoff of Oklahoma, another Republican senator from an oil state, saying, okay, if we're not going to go with an all-out ban,
let's throw some tariffs on to oil coming in from Russia, Venezuela, and also Saudi Arabia.
And so, this is going to get politically charged. They asked the President to intervene. He did do so. He ended the price war. Now, that we have
prices collapsing despite that intervention, the President is going to have the heat on it.
It reminds me of the 1970s, first the Arab oil embargo, then the response from the United States, remember, Julia, if you go back to the history
books, it was to try to put in price controls. Will it get that radical during the election year? It all depends when demand recovers in the second
half and by how much.
CHATTERLEY: Yes. Such a great point, and in the interim, the pressure it places on oil jobs, not just in the United States and those oil states, of
course, but all around the world. John Defterios, thank you so much for that.
So, how does this all affect the oil sector and what more is needed for the industry now in terms of support? Well, we're joined by the U.S. Chamber of
Commerce CEO, Tom Donohue. He joins us on the phone.
Sir, great to have you with us. Plenty to discuss with you, but I do want to start with the oil and gas sector and the businesses, the industry that
is supported by this sector. There's real fears here, I think, for jobs. What should be done by the government in your view?
TOM DONOHUE, CEO, U.S. CHAMBER OF COMMERCE (via phone): Well, first of all, the major oil companies are not looking or in need of federal financing or
loans. Where the problem is, is in the fracking businesses, the smaller oil companies who want and will take advantage of the loans that then turn into
grants that allow them to keep for up to three months their employees on the payroll, pay the rent, and take care of some of their other expenses.
And when those -- when the additional money this week is put into that system, I believe that some of those people will be helped. That will give
them a period of time to see some of the oil prices and demand change, particularly if a large group of people in the United States go back to
work and begin to consume more gasoline and travel more on public conveyances.
CHATTERLEY: Demand will come back once we get the economy restarted again. You mentioned there the Paycheck Protection scheme. We're waiting for U.S.
Congress to top up the money available. It has come under some criticism that corporations with thousands of employees have also got access to this
money.
It's fine. They're legally allowed to do that, of course, but at what cost for smaller businesses? Tom, in your view, should there be access for
companies and companies and should there be restrictions on this money to ensure it gets to some of the smallest businesses in the United States?
[09:40:31]
DONOHUE: Actually, the companies that are being criticized, and as you indicated, it's legal, they have many small independent units throughout
the United States in large restaurant companies and then they have these small local groups, and the whole idea is to keep people working, and the
money that is going to those entities is the money that's keeping those folks open and not closing them and laying everybody off.
On the other hand, we have the same problem with generally small companies. The ones that are well organized, strong enough that they have their own
banking relationships, are the first to be helped. Others that don't know where their tax return is, don't have a strong banking relationship, have
to look around for their business contracts that they get from the Federal government or the state government, those people are going to take longer,
and here's the critical issue.
The banks are still required, under the PPP law to use and know your customer and anti-money laundering activities, and that takes more time, so
when the customer is known and has a strong relationship with a bank, it happens sooner, and all of that -- all of that -- when they finish with the
banks, has to go to the Small Business Administration to be cleared through them.
It frustrates small companies, it frustrates the media, but the bottom line, you have to follow the rules, but we've got to speed up the rules.
CHATTERLEY: Yes, I agree with you, and in no way do you think that perhaps the larger banks in this country suppressed smaller business applications
because they get more money for arranging bigger companies' loans because of the bigger size. You are confident that didn't happen?
DONOHUE: Oh, I think, if you look at how a larger bank is organized and run, and the big money that they're involved in is the kind of thing that's
being handled now by the Federal Reserve and the Treasury.
The pods of the bank that deal with small and medium-sized businesses and deal with these loans soon, hopefully, to be grants, are simply following
the rules that they have to follow under the Federal requirements and under the need to clean -- clear the loans with the SBA.
And what they're doing is moving the ones that are easiest and quickest to move and spending more time and having to offer more help to the small
companies for the ones that don't have these relationships and don't have people that are professional, able to help fill out the requests and make
available the documentation that's needed.
It's frustrating, but everybody is working on it. We're going to put more money in it this week. We're going to keep doing it, and that, over time,
it's going to be, I believe, a very successful program.
CHATTERLEY: Tom, very quickly, and I hope -- and I agree with you on that. I want to ask you about reopening. We have states in the United States like
Georgia that are reopening businesses like gyms, like tattoo parlors in the next few days. How risky is it for a company, and are they concerned that
if they open up and people get sick, they will be sued. What's the balance here between following what your state tells you, you can do and the risks
that you pose, perhaps, to your customers?
DONOHUE: Well, clearly, if you're an individual business person and you're about to open up when the state says you can, you think about those issues.
First of all, if I -- if it were me, I would look to see what the medical leadership in the state was telling me that I could and should do, A, to
open up, and B, to protect from the expansion of the disease.
So, you're going to have to decide, are you going to spread out your place of business so people can stay further away from each other? Are people
going to wear masks? What is your -- what are your employees going to do to protect themselves?
These are challenging issues, particularly if you don't have the support of the medical community.
[09:45:31]
DONOHUE: On the matter of lawsuits, you just put your finger on one of the most serious matters we face. A class action law group in the United States
has already begun to sue anybody and everybody they can. They're already blaming the banks for the issues that we discussed and suing them.
They're going to sue the nursing homes and the hospitals, and we're going to work very aggressively with the Congress of the United States to put a
stopgap in front of a lot of that. It's just not fair. It's just not something you do when you have a once in a couple of century pandemic.
CHATTERLEY: Yes. An eye-opening look at the future, I think. Sir, fantastic to have you with us. The CEO there of the U.S. Chamber of Commerce, Tom
Donohue. Stay in touch, please, and stay safe.
DONOHUE: Thank you very much.
CHATTERLEY: Thank you. All right. Up next, tech meets medical science as the CEO of Pinterest joins up with a CRISPR pioneer. Could their app bridge
the current testing gap? That's after this.
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CHATTERLEY: The CEO of Pinterest has partnered with CRISPR gene therapeutics pioneer Feng Zhang and other medical scientists to identify
coronavirus cases without testing.
They've created an app in which users can anonymously self-report symptoms and this way, they hope to bridge the gap in information that makes the
epidemic so difficult to contain.
[09:50:04]
CHATTERLEY: Joining us now, Ben Silbermann, the CEO of Pinterest. Ben, always a pleasure to have you on the show. Great idea for this app. Tell me
who has already signed up and what the hope is with this.
BEN SILBERMANN, CEO, PINTEREST: Yes, well, thank you for having me. I appreciate it.
Look, we created the app because as everyone knows, there's a severe shortage of testing, and that testing has led to gaps in our understanding
of how the virus is spreading.
So, working with a group of volunteers and Professor Feng Zhang at M.I.T., we created How We Feel, and the app lets people crowd source data in an
attempt to fill that gap and beat the virus faster.
CHATTERLEY: How do people feel about sharing this kind of data, particularly when it concerns their health?
SILBERMANN: Well, we've found that there actually has been really broad participation and part of that is because we don't ask people for their
name or their e-mail address or to create an account. We just ask people for their zip code and just the information that we need to understand
whether they might have symptoms that are linked to COVID-19.
CHATTERLEY: It is so important, because we keep talking about a lack of tests and I mentioned that in the intro. If you can identify, in your
community, a spike in cases, you know you probably, without being told, have to go back to physical distancing of some sort.
SILBERMANN: Yes. I mean, the approach of using crowdsource data has been successful in other parts of the world, in countries like Israel. We think
that approach could be successful here as well.
And actually, just yesterday, we announced with the Governor Lamont in the State of Connecticut a partnership so How We Feel can help provide them
with data to do just some of the thing you mentioned, identify new hot spots, find groups who are at risk and put resources into their hands.
And then get better data to inform when we might be able to ease some of the social isolation policies that are currently in place.
CHATTERLEY: Do you think this is something that could be used statewide, countrywide, for example, again, in the absence of a broader testing
program?
SILBERMANN: I don't think it's a replacement for testing and we're definitely fully in support of getting as much testing out to as many
people as possible.
But I do think it can be a tool that complements that testing infrastructure and can give us an early warning system and that's the hope,
and so a lot of people have asked, you know, is there one thing that I can do as a regular person to help fight the spread of COVID-19?
This is one really simple thing that people could do. It just takes 30 seconds.
CHATTERLEY: A data donation, basically, to help provide information and educate people about what's going on out there in the absence of anything
else. It's so important.
Ben, thank you so much for joining us on the show. Stay in touch, please. Ben Silbermann, CEO of Pinterest.
SILBERMANN: Sure. Thank you for having me.
CHATTERLEY: No, thank you. It's always great to talk to you. Thank you.
All right. Coming up, after the break, going beyond borders, a taxi driver's extraordinary lengths to get a student home, another inspirational
story to get you through the day.
(COMMERCIAL BREAK)
[09:55:15]
CHATTERLEY: Welcome back to the show. And finally, a tale of extraordinary kindness in the midst of the coronavirus crisis. A taxi driver in Spain
helped a stranded Italian student get home to Italy. That's a journey of more than 1,500 kilometers or over 900 miles. Twenty-two-year-old language
student, Giada Collalto was stuck after her plans to catch a flight home from Madrid went wrong.
A friend phoned a Bilbao taxi driver she knew who brought her home from the airport and the next day, they went to Montebello near Venice in Italy.
They completed the journey in 12 hours and best of all, it was free. Giada said the parents -- said her parents cried tears of joy.
I think a lot of parents would, too.
And before we go, on behalf of FIRST MOVE and his legion of fans, I want to send a big kiss message to our very own Richard Quest, who confirmed
yesterday that he tested positive for coronavirus.
He's in isolation at home with mild symptoms and I'm very, very pleased to say he's able to carry on broadcasting from his lounge and he'll be back
with "Quest Means Business" in five hours' time. He looks fantastic.
But to Richard, we send a big kiss and to everyone around the world dealing with this condition, we wish you all a very speedy and successful recovery.
That's it for the show. Stay safe, please. And we'll see you tomorrow.
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[10:00:00]
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