Return to Transcripts main page
First Move with Julia Chatterley
Bill Gates' Stark Warning On America's Handling Of COVID-19; Wirecard Is Ordered To Say They Were Victims, Too; Verizon Joins The Facebook Advertising Boycott. Aired 9-10a ET
Aired June 26, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:23]
JULIA CHATTERLEY, CNN ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE, and here is your need to know.
Not even close. Bill Gates' stark warning on America's handling of COVID- 19.
Sophisticated deception. Wirecard is ordered to say they were victims, too.
Zucked off. Verizon joins the Facebook advertising boycott.
And saving the best for last.
[VIDEO CLIP PLAYS]
The reds take the title.
It's Friday. Let's make a move.
Welcome once again, to FIRST MOVE. Good to be with you, as always as we take the pulse of the global economy this hour with Nobel Prize winning
economist, Joseph Stiglitz and not forgetting our own personal pulse rates, too. The Fitbit CEO, James Park will also discuss the latest research and
whether his health tracker can help join in the fight against coronavirus. Never more essential, as the U.S. reports its largest daily jump in COVID
cases.
We're now talking 40,000 people infected, and of course, the U.S. isn't alone in seeing cases rising once again. Balancing the economic risks of
unsafe reopening, let's be clear, versus delayed reopening, is the ongoing challenge we face around the world.
Here's a look at the global stock picture. We're mostly lower premarket, as you can see, in the United States, and keenly watching what's going on with
the banks today.
U.S. regulators eased trading and investment rules for the sector yesterday and the bank shares popped higher. Then last night, the Federal Reserve
ordered banks to suspend share buybacks and cap dividends, aka, they were told to hold more cash. It's clearly an indication, I think that the Fed
remains very concerned about the economic stresses going forward.
Compare and contrast, Blackrock saying the European recovery is looking very V-like, at least for now, French consumer confidence numbers beat
expectations this morning, too, as you can see the stock market outperforming.
Asia, the Friday session was mostly positive. China investors were out once again. Australia's Qantas was the big loser, falling more than nine percent
after they announced job cuts, and a capital raise, just another airline buying time until we return to global travel in some form of normality once
again. Until that time, we will take you around the world, instead.
Let's get to the drivers.
The global coronavirus crisis still deepening. Now, we're approaching nearly 10 million confirmed cases. In Latin America, Brazil alone has
recorded more than 1.2 million infections. Almost wherever you look, the numbers are accelerating. In Russia, well over 600,000 cases; almost half a
million in India. Look at the U.K., too, still not halting the spread of the disease with more than 300,000 infected.
But they are all dwarfed by the numbers here in the United States, Thursday bringing in new daily high of more than 40,500 new cases, with the
situation in California, Florida and Texas getting rapidly worse. CNN's Lucy Kafanov is in Dallas, Texas, with more.
(BEGIN VIDEOTAPE)
DR. PETER HOTEZ, DEAN, SCHOOL OF TROPICAL MEDICINE, BAYLOR COLLEGE: Unfortunately, I don't see an end in sight. We are going to continue to
have this acceleration of cases.
(END VIDEO CLIP)
LUCY KAFANOV, CNN CORRESPONDENT (voice-over): Nearly 6,000 people testing positive here in Texas, another single-day record for the state.
(BEGIN VIDEO CLIP)
DR. RICHARD BESSER, FORMER ACTING DIRECTOR, U.S. CENTER FOR DISEASE CONTRO: The situation in Texas is a warning shot.
(END VIDEO CLIP)
KAFANOV (voice-over): The state seeing record hospitalizations, too, with that number steadily increasing each day over the past two weeks.
(BEGIN VIDEO CLIP)
MAYOR SYLVESTER TURNER (D-TX), HOUSTON: We started opening up in May. We'll agree that it was my opinion then we were opening too quickly, too soon.
(END VIDEO CLIP)
KAFANOV (voice-over): Texas was one of the first states in the country to begin reopening 56 days ago. But, now, the recent surge forcing Governor
Greg Abbott to hit pause on the state's reopening plan.
(BEGIN VIDEO CLIP)
GOV. GREG ABBOTT (R-TX): We work on a daily basis and you should anticipate more orders coming out in the coming days.
(END VIDEO CLIP)
KAFANOV (voice-over): But his earlier reopening order would still allow many businesses already open to continue operating, including malls,
restaurants, and gyms.
Neighboring Louisiana and New Mexico also pausing their reopening, trying to stop the possibility of similar increases like Texas, and other states
like North Carolina, Kansas and Arizona, pausing, too.
[09:05:11]
(BEGIN VIDEO CLIP)
GOV. DOUG DUCEY (R-AZ): We expect that our numbers will be worse next week and the week following in terms of cases and hospitalizations
KAFANOV (voice-over): In California, Los Angeles County has more confirmed cases than any other county in the nation. In Florida, where 5,000 more
cases have been confirmed, Governor DeSantis still resisting implementing a statewide mandate to wear masks.
And in Ohio, the state reporting a staggering number. Nearly 60 percent of new cases are people ages 20 to 49.
(BEGIN VIDEO CLIP)
DR. ASHISH JHA, DIRECTOR, HARVARD GLOBAL HEALTH INSTITUTE: They've got to get aggressive if they're going to bring this virus outbreaks under control
or they are going to be forced to shut down.
(END VIDEO CLIP)
KAFANOV (voice-over): At a CNN Town Hall, Bill Gates saying that the global and domestic picture are bleaker than expected.
(BEGIN VIDEO CLIP)
BILL GATES, CO-CHAIR, BILL AND MELINDA GATES FOUNDATION: The U.S. in particular hasn't had the leadership messages or the coordination that you
would have expected.
ANDERSON COOPER, CNN ANCHOR: Basically, we're still not doing enough now on this pandemic?
GATES: No, not even close. I mean, just -- you know, people died today.
(END VIDEO CLIP)
KAFANOV (voice-over): Despite President Trump repeatedly insisting that the country needs to reduce testing to keep totals low.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: If we didn't do testing, we would have no cases.
(END VIDEO CLIP)
KAFANOV (voice-over): The C.D.C. believes that for every one person who tested positive with the virus, ten have gone undiagnosed, which means that
an estimated 20 million more Americans have possibly been infected.
(BEGIN AUDIO CLIP)
DR. ROBERT REDFIELD, CDC DIRECTOR: The virus causes so much asymptomatic infection. We probably recognized about 10 percent of the outbreak.
(END VIDEOTAPE)
CHATTERLEY: All of this, of course, risks to the strength of the economic recovery and why stress tests on banking systems are so important, while
stress tests on the U.S. banks showed they are in good health, but to keep it that way, the Federal Reserve ordering large banks to suspend share
buybacks and cap shareholder dividends.
Joining us now with all of the details, Clare Sebastian. It was like a pound in the head with a kick in the teeth, I think in the last 24 hours.
Loosening some of the Volcker rules that kicked in after the financial crisis, but at the same time, saying, guys, you need to hold more cash and
be prepared for the economic challenges going forward.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, I think you put it perfectly, Julia. On the one hand, earlier in the day on Thursday, we got
the news that some parts of the Volcker rule were being relaxed. Banks would be able to easily trade in derivatives and invest in venture capital
funds. That sent the share prices of those bank stocks up.
But then, of course, after the market closed, we get the news about the stress test and the extra sort of protections that the Fed is putting in
place just to make sure that these banks are well enough capitalized given the uncertainty ahead.
They said that so far, the banks are healthy and should be able to withstand even the most adverse scenarios, but they didn't just conduct a
normal stress test, they added sort of an overlay sensitivity test that laid out three different scenarios of the pandemic, a V-shaped recovery, a
U-shaped recovery and a W-shaped recovery.
And they said that in the cases of the U and W, some of the banks came pretty close to their minimum capital ratio requirements and that's why
they are putting in place these extra protections.
I think not a huge surprise to many, but one thing that was perhaps a surprise is the level of oversight we're now going to see from the Fed. The
banks have to submit their capital plans again later this year and they will be subject to scrutiny from the Fed Board once every quarter, Julia.
So a lot of oversight and I think that speaks again to the level of uncertainty in the economy.
CHATTERLEY: I couldn't agree more. And also the Federal Reserve is saying, look, we just have to be prepared here. They've been sending warnings about
the risks here now for weeks and weeks, particularly to Congress as well to say step up.
You would be forgiven for thinking if you looked at the stock market that we're likely to see a V-shaped recovery, but when you look at the share
prices of some of these banks, in contrast to some of the outperformers like Amazon, you see that these bank stocks are pricing in trouble.
SEBASTIAN: Yes, they are up, most of them, since the March lows, but they're not really outperforming the market. They're sort of moving around
the middle there.
I think what we know, Julia from the earnings of the last quarter is that these banks are having to set aside a lot of money for loan and loss
provisions. We are about to get earnings again in the second quarter and that could show the situation worsening.
And that is what the Fed is trying to protect. They want the banks to continue to be able to lend to businesses and individuals and to be able to
cushion against these losses. And there was, I should note, some opposition, even from within the Fed Board to the Fed allowing dividends to
still go ahead while obviously capping them at the rate paid out in the second quarter.
Lael Brainard, one of the Fed Board members said, I do not support giving the greenlight for large banks to deplete capital, which raises the risk
they will need to tighten credit or rebuild capital during the recovery.
She says this policy fails to learn a key lesson of the financial crisis and I cannot support it. So, people are extremely worried, even within the
ranks of the Federal Reserve.
[09:10:06]
CHATTERLEY: Yes, shareholders rank second to borrowers in need and that must be remembered. Clare Sebastian, thank you so much for that.
Wirecard's woes are escalating. The E.U. launching a preliminary investigation into the German digital payments firm involved in a massive
accounting scandal. Questions have also been raised about regulators, including Wirecard's auditor, EY.
Fred Pleitgen is in Berlin, and has been following the story for us. It's got all of the makings of a movie plot, quite frankly, Fred.
But quite frankly, when an auditor comes out and says, look, we were duped, too. Hang on a second, what was your job here for a number of years?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, you're absolutely right and that's exactly what some German capital investors,
Julia, are actually saying. There's been a lawsuit against EY about their auditing of Wirecard that has been going on since at least Friday and the
German capital investors that are part of that lawsuit are saying, look, they've been talking about this for a very long time that they believed
that there was something wrong at Wirecard and that EY wasn't doing what they were supposed to do to get to the bottom of it.
But you're absolutely right, EY -- Ernst & Young is saying, look, there was nothing we could do about this. This was all so elaborate that it would
have duped anyone is basically what they are saying.
I want to read you part of the statement that EY put out about this. They said, and this is quote, "Collusive fraud designed to deceive investors and
the public often involve extensive efforts to create a false documentary trail that even the most robust and extended audit procedures may not
uncover a collusive fraud."
So essentially they're saying they believe that they did their job, but as you say, they believe that they were duped themselves. Now, of course,
German authorities are saying that that simply isn't good enough for them. There's a lot of criticism that's coming out from the German banking
regulator, BaFin, as well who of course has also been quite self-critical, also.
They're saying that they also probably should have done more in the way of oversight to get to the bottom of what was going on there at Wirecard for
such a very long time, apparently, with of course large assets just simply not being there.
And Germany's Finance Minister, we've been talking about this, also has been coming out. He's been quite self-critical over the past couple of days
as well, and he said that look, Germany really needs to take a look at this regulator's process and at the way regulation is done here, and if mistakes
are uncovered, those mistakes need to be corrected very, very quickly.
Obviously, the Germans do feel that this was a big embarrassment for this country as a financial marketplace, as a place to do finance business and
to do business in general. And of course, the Germans understand that really part of what makes them so successful is the fact that people have
trust in regulation here, trust in processes here in this country.
So, it is certainly something that the Germans are taking very serious as well. And then, of course on top of that, Wirecard itself not looking good
at all for them, as we're also hearing that Mastercard, Visa, potentially going to sever any sort of ties with Wirecard and that of course, for some
of these clients for Wirecard, big problem also, as well.
As you say, aptly correctly, all of this has the makings of a very, very large thriller movie here in Germany.
CHATTERLEY: Yes, not so great for investors and people who have lost money as a result there. Fred, great to have you with us on that. Thank you. Fred
Pleitgen, the plot thickens.
All right, let me bring you up to speed now with some of the other stories making headlines around the world.
Okay, the German government is hosting a Meat Industry Summit in the wake of several COVID-19 outbreaks in processing plants. The government is
pushing to increase meat prices by 45 U.S. cents per kilo to improve animal welfare and conditions for workers.
Anna Stewart joins me now. Not just a German problem, of course, we've seen this in terms of ensuring food supply chains, in terms of protecting
workers all over the world. Why is it so challenging to operate this business, Anna? What have you been finding?
ANNA STEWART, CNN REPORTER: It's a really worrying trend, isn't it? This is specifically meat processing plants and slaughterhouses. There have now
been at least four outbreaks in the U.K. in factories like this one. This is in Wales. This is a poultry factory and I've been speaking to people in
town. I've been speaking just now actually to a worker who worked here and did contract the virus early on in their outbreak.
No one knows for sure exactly why the virus seems to spread so quickly in these factories. The worker I spoke to said there was plenty of PPE. There
was plenty of sanitizing stages, he felt very safe, and yet it happened.
So here's a deeper dive into why the virus is really spreading so quickly in plants like this.
(BEGIN VIDEOTAPE)
STEWART (voice-over): It's the third meat factory in the small country of Wales to register a coronavirus outbreak in recent weeks. This one, at the
2 Sisters poultry factory is the biggest, 200 cases so far.
That's dwarfed by an outbreak at the Tonnies meat-packing plant in Germany, where over 1,500 workers have tested positive for COVID-19, leading to a
local lockdown, more than 360,000 forced to quarantine.
[09:1510]
STEWART (voice-over): It's a worrying trend in meat processing plants and slaughterhouses across the world. Despite many adopting COVID-19 safety
measures, PPE and social distancing where possible.
(BEGIN VIDEO CLIP)
JAMES WOOD, PROFESSOR, CAMBRIDGE INFECTIOUS DISEASES, CAMBRIDGE UNIVERSITY: The temperature is something that is a feature particularly in cutting
plants, it's harder to have a cold temperature in slaughter lines. But one of the features of a slaughter line is the fact that they're very noisy
places. People have to stand close to each other and sometimes shout in order to make themselves heard.
And all of these things can promote the risk of spread of infection.
(END VIDEO CLIP)
STEWART (voice-over): In the U.K., more than two-thirds of sector workers are from other European countries. In the U.S. and Germany, migrant workers
make up around a third of the workforce.
Back in the town of Llangefni, home to the closed poultry plant, the streets are practically empty.
STEWART (on camera): Many of the workers, their families and their contacts are still self-isolating at home. It's a small town and almost everyone
we've spoken to knows somebody that is affected. The biggest concern has been the employees who felt sick early on in the outbreak didn't stay home
as they couldn't afford to.
(BEGIN VIDEO CLIP)
PADDY MCNAUGHT, UNITE REGIONAL OFFICER: These people were all paid. They don't have sick pay schemes in place. So when people have a slight
temperature or something that could have been related to COVID-19, whether it's a slight cough or a slight temperature, people have been less likely
to take time off and isolate.
(END VIDEO CLIP)
STEWART (voice-over): The 2 Sisters, say unions like Unite are leveraging this crisis to improve workers' conditions, and added that all their staff
are now on full pay since the factory is shut.
STEWART (on camera): There's a confluence of factors at play, as outbreaks continue to crop up at meat plants across the world, there are concerns
about the safety of the workers and their communities.
(END VIDEOTAPE)
STEWART: Here in Wales, the lockdown is still very much in place, unlike neighboring England, and that means that the outbreak here in the factory
is less likely to spread through the wider community.
But as lockdowns are lifted across areas of Europe, look at Germany, look at that huge outbreak there and the fact that 360,000 people have had to go
back into lockdown, back into quarantine. That is the risk and that is why it is so important that they figure out exactly why these slaughterhouses,
these meat processing plants are such hot beds for the virus and to make sure that these workers can be protected going forward -- Julia.
CHATTERLEY: Absolutely. It doesn't get more essential than these people when we're talking about food supply. Somehow we have to protect them
better.
Anna Stewart, great job. Thank you for that.
All right, coming up here on FIRST MOVE, after the break, Nobel Prize winning economist, Joseph Stiglitz is on the show to talk people power and
profits. And could your smart watch know you have COVID-19 even before you do? We'll discuss the latest research, that's next.
(COMMERCIAL BREAK)
[09:21:06]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. futures are on target for a lower open in the final session of the week. This, as new numbers confirm
that pent-up consumer demand following the lockdowns has helped boost U.S. spending.
Personal spending rose more than eight percent last month, though admittedly, from a low base and with almost 20 million Americans still
collecting jobless benefits, and an unemployment rate stuck at 13 percent, at least on paper, the health of the consumer remains in question.
Nike is seeking cautious consumers. Shares are lower premarket after the company posted a surprise loss for the fourth quarter. Sales fell by a
greater than expected 38 percent.
Now, despite the challenges, White House Economic Adviser, Larry Kudlow remains upbeat on U.S. growth. He still believes the economy can rebound
some 20 percent in both the third and fourth quarters.
Joseph Stiglitz is a Nobel Prize winning economist and Professor at Columbia University, and also an author of the book titled "People, Power
and Profits: Progressive Capitalism for an Age of Discontent."
Professor Stiglitz, fantastic to have you on the show, sir. Thank you for joining us. Your view on the probability here of a V-shaped recovery. Can
we rule that out?
JOSEPH STIGLITZ, NOBEL PRIZE WINNING ECONOMIST: Yes, it's a fantasy. You know, what they meant when they talked about a V-shaped recovery back in
March was that you put the economy in a hospital for four weeks, eight weeks, ten weeks, and by beginning of June at the latest, the end of July,
we would pick up where we left off. No one thinks that that is going to be the case.
And the best forecast, both from the Federal Reserve and from the I.M.F., is that the U.S. won't be back to where it was at the end of 2019 until
2022. I think what has been happening in the United States with the up- surge in cases makes even that look rosy.
CHATTERLEY: What is your prediction based on what we're seeing? Because we know that the bar seems very high for a more sustained announcement over
lockdowns, but it seems like we're going to see localized lockdowns, people being told to shelter in place again, particularly given the spikes in
cases that we're seeing?
STIGLITZ: Well, the basic point that I've maintained all along is that you are not going to have an economic recovery until the pandemic is under
control, and under control in almost the entire country, and in many ways throughout the world, we're very interconnected.
And as long as the disease is raging in some part of the country, people are going to be anxious. And we have now good data showing it isn't the
lockdown that is really causing the economic slowdown, it's fear.
In the Great Depression, President Roosevelt said we have nothing to fear but fear itself, but in this case, we have two things to fear. We have the
fear of the pandemic, which is real, and we have the fear of the inadequate government responses, economic and health responses to the pandemic.
CHATTERLEY: Short-term, what can be done to at least address and support the economy? Because a lot of stimulus, whether it's from the Federal
Reserve or whether it's from Congress, has been applied here. How can we make policy steps today that don't take us back to where we were in 2019,
but actually facilitate growth going forward in a better and a more sustainable way?
[09:25:13]
STIGLITZ: That's a really good point, that the administration talked about picking up where we left off, and where we were was not a good position.
One of the reasons why the disease is taking a devastating toll in the United States, much worse than other countries, is that our health status
was the worst of the advanced countries. We have the shortest life expectancy and the one country whose life expectancy today is lower than it
was in 2016.
We have a lot of inequality, a lot of racial discrimination, and we hadn't moved in a way that we should toward a knowledge economy and towards a
green economy.
So there are lots of things that we should have been focused on when we put up, you know, several trillion dollars, but there was no vision of what
kind of an economy that we want to emerge from the pandemic.
So, what we need to do is make sure the way we allocate the money goes in ways that supports this vision and these values, and that will also entail
putting some conditions on those who received the money, that they don't spend the money for big bonuses for the CEOs, but instead pay livable
wages. That's one example.
In other countries, when they give money to the airlines, they impose the condition that the carbon footprint of the airline be reduced.
CHATTERLEY: American stock capitalism ultimately needs to change and rising stock markets is only going to accelerate, I think, and see those voices
that are calling for this become louder and louder. We're already seeing it with social unrest in this country.
Joseph, what's the risk and what happens if we don't see these changes and this greater scrutiny and conditions attached to money?
STIGLITZ: Well, I think what we've been seeing is exactly what we're likely to get, except it could be much worse. The social unrest. We have not been
able to respond anywhere near as well as other countries to the pandemic.
New Zealand was able to actually to almost completely get rid of the disease. One of the reasons is a high degree of social cohesion, a high
degree of trust in the government. The government is seen as a government of the people, for the people and by the people.
I don't think people see the American government in that way. Sometimes, I say -- I wrote an article describing it as of the one percent, for the one
percent, and by the one percent, but it's more accurately by the corporations and by other special interests.
And so there needs to be trust in science, expertise. That's been denigrated.
And in responding to the crisis, we realized that we need a government. Markets are not going to take care of it. Markets couldn't even produce the
masks and the tests and protective gear that we needed.
But 40 years of denigrating the role of government has meant that we were ill-prepared.
CHATTERLEY: Very quickly, I have just 30 seconds or so, does leadership change fix this, Professor Stiglitz? Because you said this has been
decades. This is not one administration's failure.
STIGLITZ: Yes, it's necessary. Clearly, it's necessary. And that leadership change, but with the grassroots movement of the kind that we've been seeing
can, I think, actually make a difference. I think there's a clear progressive agenda of a different kind of country with a different --
reflecting, I think, the values of a vast majority of Americans.
The problem is, our democracy has not been reflecting these deep values that are held more than two to one, three to one, across the country.
CHATTERLEY: These values need to shine through and be allowed to shine through. This is at the core of your book as well, which is fantastic. I
recommend our viewers read it. Professor Stiglitz, come back and join us soon, please, sir. It's always fantastic to talk to you. Thank you.
STIGLITZ: Thank you very much.
CHATTERLEY: All right, we're oing to take a break here on FIRST MOVE. But coming up, the unfriending continues. Verizon joining the boycott against
Facebook. We will discuss with tech investor and early Zuckerberg mentor, Roger McNamee. That's next.
(COMMERCIAL BREAK)
[09:33:08]
CHATTERLEY: News just in to CNN, police in the Scottish city of Glasgow say they are dealing with an incident on West George Street, which is currently
closed. They say the situation is contained at this time and that there is no danger to the general public.
The Scottish First Minister has asked the public to avoid the area. We'll bring you any further information on this as soon as we get it.
All right, for now, we'll move on and give you a quick look at what we're seeing as far as the U.S. stock markets this morning. They're open and they
are moving lower.
Bank stocks are under pressure following the Fed moving to suspend their stock buybacks and limit their dividend hikes as we discussed already on
the show. It's all about making sure banks have enough cash during the COVID-related crisis, and that of course sparking further uncertainty, too.
In the business world, Apple closing stores again in Florida and Texas where cases are spiking. Macy's and General Motors both announcing
substantial job cuts in the last 24 hours, too, and another big market test coming this session when the New York Stock Exchange launches its first
major IPO since the march lockdowns, grocery chain Albertson's making its Wall Street debut. As safe a stock as it gets, I think in these troubled
times. Grocery stores.
All right, and Facebook meanwhile trying to contain the growing ad boycott over alleged misinformation on its platform. Verizon joined the stop hate
for profit boycott Thursday making it one of the largest companies to join the campaign and the first telecom giant to do so.
Other major companies include Jen & Jerrys, North Face, Patagonia, Magnolia Pictures and more.
Let's talk this through. Joining us now, Roger McNamee, co-founder of Elevation Partners. He was an early mentor to Mark Zuckerberg and an early
investor in Facebook, too. He has also written a book called, "Zucked: Waking up to the Facebook Catastrophe."
[09:35:09]
CHATTERLEY: Roger, fantastic to have you on the show. Good to see you looking well. You and I have talked in the past, nothing changes for
Facebook until users disappear. They're not doing it. Or until advertisers turn around and say, hey, we have a problem with this, too. What do you
make of the advertising moves, a drop in the ocean or something more substantial?
ROGER MCNAMEE, CO-FOUNDER, ELEVATION PARTNERS: So Julia, I think there are two levels you have to look at. As investors, people are going to look at
this and say, will it affect the revenues and the earnings? And the answer is not any time soon. But I do think there is a profound second effect you
should pay attention to, and that is that when advertisers are expressing serious concern about the spread of hate speech, which is what really
drives this.
Remember, the stop hate for profit is created by the NAACP, Color of Change, the Anti-Defamation League and Commonsense Media. So these are
civil rights organizations and they're going to advertisers and saying, listen, what's going on right now in terms of the spread and amplification
of white supremacy and other kinds of hate speech is intolerable and advertisers should not be comfortable placing their ads side by side with
that.
Obviously, as we all know, Facebook has created the world's greatest advertising platform, so it's hard for marketers to give that up, even for
a month, which is what this campaign is about.
But what the campaign is doing is forcing a reckoning about the impact of Facebook's business practices, because there's really no reason you can't
have the good of Facebook without all the hate speech. The hate speech is there because it maximizes engagement, and Facebook's algorithms are there.
They are tuned to maximize engagement, so things like hate speech, disinformation and conspiracy theories are always going to get amplified
more than regular content and that's been a big issue, as we've talked about before.
CHATTERLEY: Another recognition or a revelation about Facebook, and we've been here so many times before, election interference, concerns over
content, and yet nothing changes at Facebook. I guess I ask you, Roger, does anything change? Because they've said, look, we'll have monitoring,
moderation. Does that change anything?
MCNAMEE: This is exactly the point. For 15 years, Facebook has been able to say we're really sorry, we promise to do better, and then it goes right
back to doing what it was doing before. Because people's attention is too short.
I think, though, Julia, I mean, as Professor Stiglitz just pointed out, we may be at a moment right now where the culture is changing and where
expectations for what corporations should do will change with that. And in this particular moment, I think Facebook has put itself in a very
uncomfortable position. Even relative to YouTube, which does all the same kinds of harm.
Facebook's essentially willingness to be a bad guy relative to election interference, it's saying that really it doesn't think that lying in
political ads is a problem. That, I think, is just not going to age well. And so if there is a change in administration, Facebook, I think, looks at
four different kinds of regulatory threats.
There's now actual serious talk about amending Section 230, which is the safe harbor that protects internet platforms from third-party content.
There's very serious discussion about new levels of privacy. There are antitrust things going on at states as well as the Federal government level
and internationally.
And then lastly, I think there are real issues in securities law because of the way that Google and Facebook in particular have managed their
advertising networks.
That's four different kinds of regulation, none of which are factored into the stock price today. And you wouldn't say that the outcome is known for
any of them, but those things are going to create doubt going forward and I think for investors, you just have to pay attention because the numbers are
still really good, but this company has -- they have a business practice that is going to be, I think, very controversial essentially until
something is done about it.
CHATTERLEY: It looks Teflon. Do politicians need to put their money where their mouth is? I mean, I look at the spending that President Trump, that
Joe Biden is pumping into Facebook at a time when we're worried about election interference, when we're concerned about content. I mean, give me
a break. The irony here is insane.
MCNAMEE: Nobody is going first. Yes. You know, Julia, nobody is going to go first. Facebook has the greatest advertising platform on Earth. That is why
the stock is where it is today. But I liken it to the chemicals industry in the 1950s.
The chemicals industry in the 50s was effectively the internet. It was a fast-growing, incredibly profitable industry because they poured waste
products wherever they wanted. They put toxic fumes in the atmosphere. They would pour mercury into fresh water and there was never any cost to that.
And eventually society said, you know what? You guys are harming public health. You are harming the environment. We're going to make you pay a cost
to clean up, but we're also going to put things in place to keep you from doing it.
Now, I think that is what we're going to do with all the Big Tech companies. We're going to do this way to, things like facial recognition,
artificial intelligence before they get too broadly deployed and then we're going to go back and look at the big things like YouTube, like Facebook,
like Instagram, like Twitter, and ask what are the things that companies like that should be doing to be good citizens, as opposed to just super
profitable?
CHATTERLEY: It's coming, but it could be a long time coming. Roger, very quickly --
MCNAMEE: Oh, they will.
CHATTERLEY: Yes, I just think it's going to take too long, quite frankly. Very quickly, your tech investor mind, would you be investing at this
moment, given health challenges, economic challenges?
MCNAMEE: Julia, keep in mind, I'm 64 years old, so as a consequence, you know, I'm at a point in my life where I don't have forever to earn it back.
I think what's going on in the United States right now is terrifying. The notion that the E.U., that Canada, Mexico and our trading partners in Asia
will treat the United States like a plague ship, that is just terrible for our economy, it's terrible for your outlook. It is terrible for everything.
And the notion that we have no response to this rise in cases again, and even if it turns out there are a lot fewer fatalities because there's a lot
more young people in the mix, this is just terrible for the economy, and it makes me incredibly nervous and for myself, again I'm not managing other
people's money, but for myself I'm very conservatively postured because I don't understand how we can have a great market forever, right?
I mean, obviously I see why it's been good now. The Fed has pumped a ton of liquidity into the system, which has kept everything going really, really
well, but eventually the economy matters, earnings are going to matter, and I just don't see us having any kind of predictable path out of this mess,
at least until January.
CHATTERLEY: Yes, I want to argue with you and I can't. Roger, always great to chat with you and get your wisdom.
MCNAMEE: Julia, it's the best -- you're the best. Thank you so much for having me on.
CHATTERLEY: Thank you, sir. Roger McNamee, co-founder of Elevation Partners, and author of "Zucked: Waking up to the Facebook Catastrophe."
All right now, some very special pictures. I want to take you into orbit around the Earth. You are looking at live action from the International
Space Station and a spacewalk under way right now. NASA astronauts Robert Behnken and Chris Cassidy are replacing lithium batteries that provide
power to the International Space Station, the third U.S. crew member on board right now is Colonel Doug Hurley, also known as Astro Doug.
And if you look closely, you'll see he is wearing a Fitbit in this picture. Yes, I see it. James Park, the CEO of Fitbit is next, and we'll be talking
all things research into COVID and maybe a bit of space, too. Stay with us.
(COMMERCIAL BREAK)
[09:46:21]
CHATTERLEY: Welcome back to the show. We're following breaking news from Glasgow, Scotland. Police say they have shot a male suspect and that an
officer was injured during the incident.
They say the situation in West George Street is now contained and that there is no danger to the general public.
Video posted on social media shows several people leaving a building with their arms raised as armed police wait for them to exit before going in.
We'll bring you further updates the moment we get them.
But for now, the police saying the situation there is contained.
All right, let's move on. So whether it's up in space or down here on Earth, there's close to 30 million active Fitbit users. If you didn't know,
these are health tracking wearables.
What's interesting is that they generate one of the world's largest databases of activity, exercise and sleep, and now research is under way to
see if they can give an early warning of infections like COVID-19.
With the results of the study, James Park, CEO and co-founder of Fitbit joins us now. James, fantastic to have you on the show. What can you tell
us about the research?
JAMES PARK, CEO AND CO-FOUNDER, FITBIT: Thanks, Julia. So it's kind of astonishing. I co-founded Fitbit 13 years ago and it's amazing to see how
much more useful devices like Fitbit and smart watches and fitness trackers continue to be.
And as you pointed out just very recently, we've been doing a lot of interesting research and we do believe that wearable data can actually be
used to help detect COVID-19 before symptoms start.
And this is building on research that we have been doing with Stanford University and Scripps Research in the United States, and we launched a
COVID-19 study actually around this topic that right now has almost 100,000 participants who are contributing data to this effort. So, it's really a
global effort.
And already we're seeing that the data that we're collecting off of our devices using metrics like your breathing rate and the timing between your
heart beats, can start to change one to two days before COVID-19 symptoms are actually reported by users.
I think that's incredible and it's important not only due to the fact that there's a possibility that, you know, these devices can detect COVID-19 one
to two days before symptoms start, but because existing tests like nasal swab tests are not great at detecting COVID-19 in the first few days of
symptoms because of the viral load and just because it's too early in the stage where your body starts to respond. And we all know that temperature
checks aren't foolproof either.
We've seen that only 50 percent to 85 percent of people who are eventually diagnosed with COVID-19 actually exhibit a fever. So, what's exciting again
is that wearable data, we think can be a great addition to a comprehensive testing solution for COVID-19.
CHATTERLEY: Potentially. I have to say, James, every medical expert I speak to is very cautious and concerned at this stage that we point out that this
is research. It doesn't have sort of clinical evidence or proof at this stage that it actually works. This is the very early stages here. I think
we have to make that clear, too. Do you agree with some of their caution? Because we don't want to give people false hope.
PARK: No, absolutely. I think, you know, the severity and seriousness of the pandemic lends itself to, you know, being pretty cautious in the
solutions that are proposed. I mean, we've already seen that with kind of the varying, you know, suggestions about masks in the early days, that they
weren't effective, and now we know that they can be a great tool in managing the crisis.
[09:50:08]
PARK: So, I do think we need to be cautious. But, you know, I think it's very promising in terms of the early data that we're seeing and it's great
that we have some excellent research partners in Stanford and Scripps to help us in the effort.
CHATTERLEY: We spoke to Oura's CEO this week, the ring that also tracks similar changes. Do you see them as potential competition going forward and
smaller, perhaps more easy to use than wearing an additional watch? Could that be fierce competition?
PARK: Yes, I mean, the way I think about it is, this is a global health crisis and I think it's great that there's a lot of companies participating
in a lot of different ways to help, you know, everyone in the world start to address this, whether it's just people in the community, employers,
institutions, national governments, and I don't think there's a one size fits all to addressing the issue.
So, you know, I think it's great that there's a lot of different companies and solutions that are out there.
CHATTERLEY: It's phenomenal. We can't wait to hear more about this and come back and talk to us soon because the wearables is a fascinating space and I
know you've got a lot going on. James Park, CEO and founder of Fitbit. Great to have you on the show, sir.
All right, coming up, the 30-year wait is finally over. We'll take you to Liverpool, England where football fans celebrate their first Premier League
title. Yay! That's next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. Big celebrations under way in Liverpool, England, after the city's football club clinched their first
league title since 1990. Wow. Fans flooding the streets outside Anfield after their team ended the 30-year drought.
Alex Thomas is live in Liverpool for us. Alex is outside broadcast. It doesn't get better than this. What was last night like?
ALEX THOMAS, CNN SPORT: It was pretty hectic, Julia. It's fair to say that people of Liverpool no doubt know how to have a good time on a night out
anyway, and add into the mix this end of an agonizing 30-year wait and it was quite a party.
We can show you more social media video filmed by some of the Liverpool players who were still celebrating this morning, it seemed, judging from
what Andrew Robertson, the fullback said about coming down to breakfast and finding the likes of Virgil Van Dike there, star central defender dancing
and partying.
Also a video of Jurgen Klopp, the instrumental coach of this successful Liverpool team, also dancing. I think we can forgive them having hangovers
and enjoying the party because it's been such a long wait.
Liverpool now the English, European and world club champions. What a turnaround for a club that's really, despite a couple of Champions League
victories in the last 30 years, had not anywhere near as much success as they had in the previous 30 years from 1990 going backwards.
All morning, we've seen the clean-up operation here outside Anfield, bottles of beer, cans being cleared away.
[09:55:10]
THOMAS: But even those having to do the clearing away, doing it in cheerful spirit, knowing what the cause was, even though people were probably not
social distancing at all last night, it is fair to say when we came down.
As we left after midnight, there were still people arriving at nearby Stanley Park just to join in. Let's hear from their manager, Jurgen Klopp
who was pretty emotional after the win by Chelsea over Manchester City on Thursday night which handed Liverpool the title and he said, it was all
about the fans.
(BEGIN VIDEO CLIP)
JURGEN KLOPP, MANAGER, LIVERPOOL: It's for you out there. It's for you. It's incredible. I hope you stay at home or go in front of your house, if
you want, but not going out more and celebrate it. It's all here and it's all here. We will do it together in this moment. It's a joy to do it for
you, I can tell you.
(END VIDEO CLIP)
CHATTERLEY: What a win. Alex, amazing to have you with us. Thank you so much for that. Such a great moment, I think for Liverpool fans and for the
players, too. No excitement clearly on my part here. Great to have you there. And for the fans, please be safe this weekend with your
celebrations. We can celebrate next year when we bring it home again.
That's it for the show. You've been watching FIRST MOVE. Stay safe this weekend and we'll see you on Monday.
(COMMERCIAL BREAK)
[10:00:00]
END
