Return to Transcripts main page

First Move with Julia Chatterley

Arrests In Hong Kong Under The New National Security Law; COVID Uncontrolled: Dr. Fauci Warns The U.S. Could See 100,000 Cases A Day; Boeing Backlash With New Reports Saying The Plane Maker Kept Key Information From Regulators. Aired 9-10a ET

Aired July 01, 2020 - 09:00   ET

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

[09:00:24]

JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need-to-know.

Criminal conduct. Arrests in Hong Kong under the new National Security Law.

COVID uncontrolled. Dr. Fauci warns the U.S. could see 100,000 cases a day.

And Boeing backlash. New reports say the plane maker kept key information from regulators.

It's Wednesday. Let's make a move.

Welcome once again to FIRST MOVE, as we kick off the second half of 2020 after an extremely challenging start to the year, to say the least. One

thing is certain, we'll be right here on FIRST MOVE to help you make sense of it all, if we can.

Also here to help us on the path today, former U.N. Secretary General Bang Ki-moon with his views on Hong Kong, on North Korea and what a sustainable

recovery from COVID-19 should look like -- lessons learned.

But first, as always, a look at U.S. futures were softer after 1.5 percent gains yesterday. A strong finish for the quarter. Investors, I think,

taking Dr. Fauci's grim COVID warning in stride, comforted by a reminder from Jay Powell and Secretary Mnuchin yesterday that yet more help for the

economy is on the way.

On that note, in a surprise move, too, the U.S. Senate voted to extend the Paycheck Protection scheme, loans to small businesses for a further month

last night. A smart move, I have to say in my view with a recent survey from the National Federation of Independent Business saying two-thirds of

borrowers could have used up all the loan money already, of course the economy, anything but normal, more help for many of those businesses will

be required.

Speaking of jobs, the private sector added some 2.4 million jobs last month, a hint that payrolls here in the U.S. tomorrow could be strong, too.

Remember, we're expecting three million further job gains. Most of the gains, in fact, in that report coming precisely from small businesses. So,

that program looking hugely important, as we've discussed in the past.

To Germany now, the unemployment rate rising to a five-year high, but manufacturing there moving closer to expansion. In Asia, the stock market

performance was mixed. In Japan, the TANKAN survey showed business confidence falling to an 11-year low.

Meanwhile, in South Korea, factory activity fell for a sixth straight month. The challenges of export-driven economies in the current slowdown.

Now, all eyes remain on Asia, of course, focused on Hong Kong, where a tough new security law has just gone into effect, and that's where we begin

today's drivers.

Police in Hong Kong making their first arrests under the law, at least nine people were arrested amid protests earlier today on suspicion of violating

the law.

Anna Coren is live in Hong Kong for us. Anna, we also need to underscore the importance of what July 1st is. Its establishment day, the handover day

that's been celebrated since 1997. Talk us through what we saw today in terms of action and those arrests.

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Yes, Julia, it's certainly a day of celebration for the Chinese regaining control of Hong Kong, but it's

also typically a day of protests.

Well, when protesters asked to have a permit to carry out a march that they've been doing since 1997, they were denied, and I can tell you that,

despite that, thousands of people turned out onto the streets today and more than 300 have been arrested.

You mentioned the nine under the new National Security Law, some have been arrested behind me and you can probably see just over my shoulder police

there with protesters handcuffed on the ground.

A few moments ago, a big bus filled with protesters was just taken away, people who had also been arrested. Now, those who have been arrested under

this new National Security Law, Julia, some of them were just holding signs. Some of them were handing out fliers that said "Independence for

Hong Kong." That is now a criminal offense.

If you chant slogans, calling for freedom in Hong Kong, independence in Hong Kong, that is a criminal offense. It is such a stark contrast from

what we have been seeing here in Hong Kong over the past year.

But now with this new law that came into effect today, China is firmly in charge, and we heard from Hong Kong's Chief Executive, Carrie Lam, she said

the new law is going to restore stability to Hong Kong. She is hoping that it will act as a deterrent rather than having to prosecute all of these

people.

Here is another bus, which will no doubt be taking more of these protesters who have been arrested, taking them away. But protesters have only been out

on the streets since 12:00 to 1:00 this afternoon, and they have arrested more than 300 of them is an extraordinary number and it just gives you an

idea, Julia, that they are tolerating no protests, no dissent whatsoever.

[09:05:51]

CHATTERLEY: I mean, the message from the Chinese side here has been, look, we are just specifically targeting a few troublemakers and we saw in the

protests last year in particular that some of them got violent here.

But to your point, now that we understand what this law contains and what it means, it gives the Chinese authorities huge scope here to step in and

take very, very controlled and detailed action.

COREN: Yes, we do know what the law is about. It's banning sedition, subversion, terrorism, as well as colluding with foreign forces. Terrorism,

Julia, is vandalizing public property. That has now been the definition of what terrorism here is in Hong Kong.

As for sedition and subversion, I mean, they are extremely vague and broad terms. So really, it's up to interpretation; and no doubt, Mainland

interpretation.

Here we can see, police taking away more of the protesters that they have arrested and we've seen their faces. I mean, you're talking about young

students, young Hong Kongers who are calling for greater freedom, something that they have been doing for the past year. But now, Julia, that is a

criminal offense.

Now, the maximum penalty, I should note, for this National Security Law, being in breach of this National Security Law, is life in prison. And

whilst most of the cases will come under Hong Kong jurisdiction, the exceptional cases will be handed over to the Chinese and the Chinese will

also be operating a security agency now in Hong Kong. So, it won't be just Hong Kong Police making these arrests for those exceptional cases, it will

be Mainland Secret Police who are now allowed to operate here in Hong Kong.

So for protesters, it is absolutely terrifying, and those exceptional cases will be taken to the Mainland where they will be tried, and if convicted,

they will spend time in Mainland jails.

And it's just ironic to think that this was what people in Hong Kong were fighting for this time last year over their Extradition Bill that had been

proposed.

Well, the fears of Hong Kongers have truly been realized, because China doesn't just have the Extradition Bill, they have so much more. You cannot

speak out against the CCP. You cannot oppose them, and that is terrifying people here.

If the aim is to fear and intimidate, it certainly is achieving that goal, except for the few that have taken to the streets today to protest about

this new law -- Julia.

CHATTERLEY: Incredibly brave, and we were just seeing them there being put onto the bus, and it was, to your point, young people. There were girls.

There were all sorts of very young individuals here that have taken a stand, despite the risks and the potential high costs. Anna Coren, great to

have you with us. Thank you so much for that.

All right, let's move on. A stark warning from a leading member of the U.S. Coronavirus Taskforce. Dr. Anthony Fauci says if the current trends

continue, he wouldn't be surprised if the country goes up to 100,000 cases a day. He spoke at a Senate hearing on Tuesday.

(BEGIN VIDEO CLIP)

DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: I have to say, the numbers speak for themselves. I'm very

concerned and I'm not satisfied with what's going on, because we're going in the wrong direction.

If you look at the curves of the new cases, clearly we are not in total control right now.

(END VIDEO CLIP)

CHATTERLEY: Senior medical correspondent, Elizabeth Cohen is with us. Elizabeth, we've talked about this nowadays after days, but this was, I

think, Dr. Anthony Fauci being as alarmist as he felt he could be at this stage and saying, the situation isn't under control and actually, more

action is needed now.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Yes, absolutely, Julia. You know, in a way when you hear Dr. Fauci's tone, he sounds very calm. I

know Dr. Fauci well and I know that he always tries to put out a tone of calm, but when you actually just listen to the words, this is quite serious

and his words are actually quite severe.

He went on to say that right now, we've got about 40,000 plus cases a day in the United States, and he's thinking that we could go up to 100,000.

That is a huge jump.

[09:10:25]

COHEN: He is not saying this lightly. He is saying this looking at the numbers as they grow. In the United States, we now have 36 states, 36 out

of 50 states that are seeing spikes this week. Last week, it was only 23 states that were seeing spikes. That's an enormous jump in one week.

So when Dr. Fauci says something, he is not being hyperbolic, he is doing it based on the data -- Julia.

CHATTERLEY: Yes. Based on sheer concern. The Surgeon General also had some advice for Americans as well. I just want to play that for our viewers.

(BEGIN VIDEO CLIP)

DR. JEROME ADAMS, U.S. SURGEON GENERAL: Please, please, please, wear a face covering when you go out in public. It is not an inconvenience. It is not a

suppression of your freedom. It actually is a vehicle to achieve our goals.

(END VIDEO CLIP)

CHATTERLEY: Elizabeth, even Goldman-Sachs weighing in yesterday saying, look, you can help with the health crisis and you can perhaps help with the

economy, too, and avoid shutdown if you just wear a mask.

This has become so politicized and it's so nonsensical, too.

COHEN: It is, Julia. I will have to say that I have tried to explain the reluctance to wear a mask to friends of mine who are not from the United

States, and they are completely confused. It is as if I am trying to explain something preposterous to them.

They say why aren't -- why is that such a significant proportion of Americans resisting this? And so part of it is, as you said, it's really a

political statement.

It's as if wearing a mask is admitting that somehow you are wrong or Trump is wrong, that there's something in your soul that is wrong. And of course

that's not the case.

We wear masks to protect the people we love and to protect the people we don't know. You wear a mask because if you're infected and you don't know

it, and there's a reasonably good chance that you could be infected and not know it, you could get someone sick who gets someone sick who gets a child

with leukemia sick and kills that child. Who would want to kill a child? No one would.

But this has become so politically and emotionally charged, it is as if we are telling people you're wrong, you're a bad person, wear a mask. Of

course, that's not what we're saying, but that is unfortunately how people are taking it. This has become very personal and very emotional.

CHATTERLEY: Yes, we have to take the emotion out of it, just wear a mask. Elizabeth Cohen, thank you so much. We'll keep repeating it back and forth

to each other, and know at least, we're listening.

All right, for all the fears, investors continue to look at the positives, it seems, setting aside rising health concerns in view of the enormous

scale of stimulus that's been provided and perhaps more to come, too.

With now that the NASDAQ is just one percent off record highs, the question is what comes next in the second half of this year? Richard Quest joins me

now.

Richard, you've been too polite so far to call me out on this, because you called it. You called the lows of the market and I remained incredibly

nervous and remain so. But what do we think happens next? And it is a balance between stimulus and science, I think, as we've discussed all

along.

RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: It's more of the same. And the reason is the Fed put. The Fed -- as long as the Fed is fueling the market

with cheap money, it continues to rise because two reasons, Julia. Firstly, search for yield.

There's no yield in money markets, there's no yield really in bonds, there's no yield -- if you need to make yield, the only place to do it is

in the market, in the stock market. And when you maybe get three percent, five percent, seven percent there, you could do even better. So that's

going to push the risk premium up quite sharply.

The second reason, of course, is that technology stocks are going to still be the future. Technology stocks are the way in which working from home,

greater digitization, they are driving economic growth.

You're seeing it as you see the NASDAQ powering forward. Everything else comes along in its wake. So I do think you're going to have a slow trudge

in Q3, election time, no one wants to wake waves. I do think Q4 gets very difficult because you're based on earnings. And so I think more of the

same.

Now, can I just take a second, if I may, Miss Chatterley. Masks, masks, masks.

CHATTERLEY: Oh, you got there before me. Go for it. Yes.

QUEST: Goldman-Sachs -- go on, you tell the story.

CHATTERLEY: No, no, you tell the story. I'll just sit comfortably in my chair. This, for me, is critical.

[09:15:19]

QUEST: All right. Goldman has pointed out that masks can actually save five percent of GDP if used, and the way they've done it is, they've looked at

different metrics and they've worked out that if we don't use masks, there will, de facto, inevitably be lockdowns.

Therefore, the price of not having those lockdowns is about five percent -- or the benefit, I should say, of not having more lockdowns is around five

percent of GDP.

It's a long 13-page report with formula that you would understand that I don't. But that's the nub of it.

CHATTERLEY: You're just being kind. The key, the ultimate key for me here is a national mandate on wearing masks.

QUEST: Yes, yes.

CHATTERLEY: It has to come from the top. Fifteen percent rise or increase in the number of people wearing masks. Yes, I don't like to make it

political, but this is --

QUEST: I think that staggering statistic of five percent GDP is saved, because there will be lockdowns otherwise by a national mandate. It's not

going to happen.

But any rightwing conservative who likes to live their life by the fiscal nature of probity can't ignore that particular fact.

CHATTERLEY: The fiscal nature of probity, I agree. Help on the crisis and help the economy at the same time. No brainer. Richard Quest, a pleasure,

always.

All right, coming up later on in the show as Hong Kong faces a new Chinese reality, the former U.N. Secretary General, Ban Ki-moon is here and we've

got a pro-democracy campaigner on the ground to talk through their thoughts, and what next, too.

And the CEO of the arts and crafts super site, Etsy is on a tear right now as sales face higher charges, though -- can we ask -- and we will ask, is

it a stitch-up? That's next. Stay with us.

(COMMERCIAL BREAK)

[09:20:13]

CHATTERLEY: Welcome back to FIRST MOVE and a return to our top story today. Police in Hong Kong have made their first arrest under a new security law

imposed on the territory by Beijing.

It came as some Hong Kongers marked the anniversary of the former British colony's handover to China in 1997. Let's talk through this and more.

Joining us is a former U.N. Secretary General, Ban Ki-moon.

Sir, fantastic to have you on the show with us this morning or this evening in your time. Great to be with you.

Can I start by asking you your thoughts on what we're seeing in Hong Kong at this moment? Do you see this as the beginning of the end of the one

country, two systems?

BAN KI-MOON, FORMER U.N. SECRETARY GENERAL: I have been closely up following the situation, current situation on what is happening in Hong

Kong. What is important at this time, the Chinese government should allow the Hong Kong citizens within the one state -- two different state, two

different regions.

Hong Kong has been one of the most important commercial and economic cities and there has been a lot of transactions and commercial activities and

trade, and therefore, this kind of a free trade movement should be definitely allowed within the longstanding tradition in which the Chinese

government and British government has agreed upon many years ago.

At the same time, we know that there are serious concerns among the people in Hong Kong, so their freedom of speech and freedom of assembly should

always be respected by the Chinese government, while allowing this two systems to continue to be upheld.

CHATTERLEY: You raise a very important point about the importance of Hong Kong to the economy, to global finance, for example. How should the

international community respond to what we're seeing?

The United States has perhaps threatened or could threaten to withdraw special trading privileges for Hong Kong. Is that the right or the wrong

decision in your mind?

BAN KI-MOON: This Hong Kong issue has become one of the very serious points in terms of bilateral relationship between the United States and China. I

also understand the deep concern by the United States, but at this time, it would be advisable and definitely necessary that the United States and

China, instead of raising the political profile to political bickering on this issue, should try to sit down together and try to address this issue

in a mutually agreeable solution.

Now, there are many people around the world, many countries in fact are deeply concerned about continuing political crisis and confrontation

between two big powers, G1 and G2.

Now, because of their strong concern, now people say that there may be G-0 instead of G1 and G2. Therefore, it would be wise for both United States

and China to address this issue in a mutually agreeable way.

CHATTERLEY: It makes perfect sense, but I have to say, COVID-19 and the fallout from that has only made those discussions and that relationship

more conflicted.

You've written a recent op-ed saying that the COVID-19 handling has been a colossal collective failure of global leadership, and that's cost lives.

BAN KI-MOON: Unfortunately, I have to say that the global leadership on a global scale has been shamefully absent at this time. The COVID-19 crisis

is unprecedented, and this is since the end of the Second World War.

The humankind has never experienced this kind of global scale pandemic at this time, therefore, there is not a single country in this world, United

States and China and whoever that can handle this global pandemic challenge alone.

We have to work together, all of the resources and political will should be exercised so that we can handle this issue on a global scale.

Unfortunately at this time, China and the United States have been finger pointing each other, which really make the international world leader

system very much under disarray. This is exactly what I really want and hope as a former Secretary General of the United Nations, we need to

address all the resources possible, first of all, to save human lives.

There are many people who have died unnecessarily, more than one million people have been confirmed contracted by this coronavirus and more than 500

million people -- or 500,000 people have died.

Therefore, I sincerely hope that the United States and China sitting together handle this matter in a more harmonious way for the benefit of

humanity.

CHATTERLEY: Yes. One of the lines that stood out to me, you said to further politicize the current health emergency is not only immoral and

irresponsible, it's almost criminal. I don't think it can perhaps be better said.

But I do want to pull out something else that you said. Inequality is the root cause of every modern social disease, from poverty to terrorism. Mr.

Ban, how do we rebuild in a better way, whether it's the planet, whether it's putting people first? Because I know you're very passionate about

rebuilding in a better way. How do we do that?

BAN KI-MOON: We must do everything possible to make this world much better, much better in harmonizing and mobilizing all the resources and political

will.

This is a most unprecedented crisis which humankind has ever experienced now, and therefore there's no time to lose.

CHATTERLEY: You talk about green investment specifically, and we've had a taste of a better environment during lockdown, and as we re-engage and get

economies restarted, we're seeing that slip away again. You're also very passionate about the need for making reinvestment green.

BAN KI-MOON: We must understand why this coronavirus has hit humankind in such a way, complete lockdown all around the world. This is because of

human beings degrading actions in our ecology.

Therefore, we must do all possible while trying to resuscitate our economy affected by the global crisis, and at the same time we should never forget

that we should do much more and much better to address the climate crisis, which is happening much, much faster.

All of these viruses will continue to happen again. They will emerge unless we take urgent action to make our humankind, our ecological situation much,

much greener.

At this time, many countries have been holding a tremendous amount of money, an astronomical amount of money, a trillion dollars have been spent

on this. At this time we'll never forget that the climate actions should come first.

Green economy as well as Green New Deals have been all of this high priority policies led by the European Union and many countries, including

my own country, the Republic of Korea.

CHATTERLEY: Yes, it's such an important point. As much as we've provided money to support this in the interim, we need to focus on the future, too.

Very quickly, sir, I want to ask you about North Korea. A very public display, we saw destroying of a building that was used for diplomacy

between North Korea and South Korea. What do you think Kim Jong-un was trying to achieve with this, and again, what should the response be?

[09:30:15]

BAN KI-MOON: The most belligerent attitude by North Korea in recent history between South and North Korea, while the South Korean government has been

doing utmost effort to promote the better relationship between South and North Korea, with reconciliatory policies, the destruction of this joint

liaison building which is located in Kaesong was a great shock.

It has given the whole South Korean people and also the whole, peace-loving people around the world very much a shock. At this time, we need to very

carefully consider why this kind of situation has happened now. During the last 30 years, at least, many administrations in South Korea has been

taking many different reconciliatory gestures.

The most important --

CHATTERLEY: Sir, I have to interrupt you there, because we have to take a break. My apologies. It's such an important subject and we will come back

to it. Forgive me. Thank you again for talking to us this morning. Fantastic to have you on the show.

Ban Ki-moon speaking there. Thank you.

(COMMERCIAL BREAK)

CHATTERLEY: All right, welcome back to FIRST MOVE.

The U.S. stocks are open for trading this morning as the curtain rises on Wall Street's third quarter. And we're beginning with solid gains. Airlines

and cruise line stocks are rallying, so is FedEx, which is out with strong Q4 results, too.

Before the bell as well, we got a strong reading on U.S. private sector jobs growth. Some 2.4 million jobs were added last month.

Small businesses, in fact, making the biggest contributions to those hirings. The PPP program, the Paycheck Protection scheme for small firms

that Congress extended by one month yesterday has been pretty important for saving U.S. jobs.

[09:35:23]

CHATTERLEY: An estimated 16 million, according to Moody's. The fear though is that new lockdowns will undo a lot of this progress, or at least stall

it.

The New York Fed says it's starting to see a slowing pace of recovery in states experiencing large-scale COVID-19 outbreaks.

All right, back now to our top story, the new security law imposed in Hong Kong by China and what implications there may be. Hong Kong's Chief

Executive Carrie Lam says the law was necessary.

(BEGIN VIDEO CLIP)

CARRIE LAM, HONG KONG CHIEF EXECUTIVE (through translator): It shows that the Hong Kong government, after a whole year of ceaseless escalating

violence and riots, is determined to restore stability to Hong Kong.

It shows the Central Government's determination to protect the absolute majority of lawful Hong Kong citizens from the harms done by a small

minority of people who endanger national security.

(END VIDEO CLIP)

CHATTERLEY: Isaac Chen was the Vice Chair of Hong Kong's the pro-democracy movement, Demosisto and he joins us now via Skype.

Isaac, thank you for taking time to talk to us today. Tell me how you're feeling in light of what we've seen in the last 24 hours.

ISAAC CHEN, FORMER VICE CHAIR, DEMOSISTO: Actually, you can see a really chaotic and fearful movement in Hong Kong especially inside the Hong Kong

society and there is 100,000 of Hong Kong people to come out and fight against this brutal regime.

But actually, you can see that the National Security Law has started to be executed by the police and Hong Kong people who are just shouting out "Long

Live" are being arrested, because inciting Hong Kong independence and reached the National Security Law bottom line, and also 300 people have

been arrested for peaceful assembly.

So you can see there is huge restriction of the Hong Kong Civil Rights and also the Hong Kong freedom in this National Security Law passed.

CHATTERLEY: Isaac, you immediately disbanded the resistance group, Demosisto because you recognized that it was flouting this new law that

China has now imposed. Are you and your fellow protesters still willing to go out there and protest, or are you now too frightened?

CHEN: Actually, I can promise to every Hong Kong people that I will keep on fighting and keep on protesting, fighting against this brutal regime of

this Communist Party.

But actually, disbanding the organization is to protect every organization member, and actually, the Demosisto do a lot of international connection

work in the past and so this kind of works actually may be threatened every people's personal security in the future after the National Security Law

has been passed.

CHATTERLEY: So Isaac, what you're saying is you and your colleagues are still willing to go out there, even if it means being sent to Beijing, to

China somewhere and face prison, perhaps life imprisonment? You're willing to face that?

CHEN: Yes, actually in the past, there is a lot of Hong Kong people and today willing to come out and fight against the regime, and no matter under

the threat of the National Security Law, they are willing to come out.

So, I didn't think that there is any reasonable reason for me to step down.

CHATTERLEY: Isaac, is there any point where you would consider leaving? I know the British government is working on perhaps allowing people with

passports to come and live in the U.K. Would you be willing to leave or will this fight continue no matter what?

CHEN: I will say that the fight will continue, no matter what, and actually, the BN(O)s have been upgraded by the British government and this

is an important lifeboat for the Hong Kong people.

But I won't say that the Hong Kong people will be leaving because the Hong Kong people believe in ourselves and believe in our power, and no matter,

will go out protesting on changing the government in order to fight back the things that we earned.

And also, actually the basic rights of coming out for protests is now fundamental. So, actually the government who are overriding are the ones

who are not reasonable. So, we won't step back.

[09:40:04]

CHATTERLEY: Isaac, very quickly, the Chinese have said this is purely about preventing violent protests, that there were just a few people there that

were creating violent protests and that was wrong. What is your response to that?

CHEN: Definitely you can see that. Today, there is a march and protest that no lies, only truth, every people knows that there is a risk of being

prosecuted or arrested joining this protest. But still, 200,000 people coming out for protests because of fighting against the National evil

Security Law.

So, you can see that there is no one to incite the people to come out, but the people come out by themselves. And actually the movement, its leaders,

and the organizations, so it is the people who have decided to come out, but not by anyone.

CHATTERLEY: Isaac, stay safe, please, and stay in touch with us. Let us know how you're doing. Isaac Chen, former Vice Chair of Demosisto.

All right, we're going to take a break. Coming up, Etsy's valuation rockets as sellers respond to huge demand for facemasks. But is that sustainable?

We'll piece it altogether with the CEO, next.

(COMMERCIAL BREAK)

CHATTERLEY: Stock in Etsy, the marketplace of craft and handmade goods has tripled in value since March driven by an explosion in demand for face

coverings.

Etsy went public on the NASDAQ five years ago and is in closed period right now, but in April, it sold 12 million facemasks globally. In the same

period, non-mask sales though rose nearly 80 percent. There are over 65 million items on offer, too.

Josh Silverman, the CEO of Etsy, and he joins us now. Josh, so you've seen an explosion of growth for facemasks, but nor non-mask products, too. How

sustainable is that and how much has been bought by new customers, which I think is key here as well?

[09:45:10]

JOSH SILVERMAN, CEO, ETSY: First of all, our hearts go out to everyone that has been so impacted. Retail stores have had to close, many, even online

places are having a hard time shipping products to customers. And this really highlights the power of cottage industry.

There are over 2.7 million sellers on Etsy and these are people who make products just for you. Eighty seven percent of them are women, 91 percent

are businesses of one working from home and they can sell all over the world.

And so, there's a lot of people who weren't buying online at all before the pandemic who suddenly now are buying online, and so we are definitely

seeing a lot of growth of brand new customers to Etsy.

We're also seeing people who thought of us only for maybe one type of product or one purchase occasion who are now realizing that Etsy has a vast

breadth of supply and can meet many, many different purchase needs.

CHATTERLEY: It is such an important point as well to yours that this is supplementing people's incomes and your ratio of male to female sellers

here is actually quite fascinating.

My key question though is, is it sustainable? Because even if I go back 12 months, people were questioning whether this kind of business model, these

kind of products really had growth potential? Are you saying this is sustainable now because people see the value?

SILVERMAN: Of course we won't know for some time, but here's what I'm really encouraged by. People are having great experiences when they're

buying on Etsy.

What we see is that our sellers are doing a great job making high quality products. They're shipping on time. And buyers are delighted by the quality

of product that they're receiving and also by the human connection with the person who actually made the product.

So, you know, shopping behaviors are really habit driven and there are very few times in your life when you really reconsider a habit. The traditional

ones are when you get married, when you buy a home and have a baby.

And suddenly in this moment, everyone needs to pause and think before they buy anything, where can I go? Who might have that available? And in that

pausing, those habits are broken and Etsy is one of the places that I think many people think of.

So we have a chance now to reshape habits and we're working really hard to communicate with buyers both on Etsy and through things like television

commercials and advertisements online to make sure that buyers realize that Etsy is a great option and to reform those habits.

CHATTERLEY: Supporting small business, particularly at this time I think is absolutely critical. Though there has been some criticism, I have to say,

on social media of the fact that you take a cut of the shipping fees from the sellers, that you've raised the fees from sellers, and that they have

to use your payment system and not PayPal.

What is your response to those sellers that are saying, hang on a second, you're taking our money? You're taking more of our money.

SILVERMAN: Etsy is the highest value place for any seller to market. So, for 20 cents you can get a store up and running and sell all around the

world. And Etsy's commission on sales is only five percent, which is far less than you would see if you were marketing on any other marketplace or

if you ran your own website and were having to pay for your own marketing.

And so we feel great about the value that we're providing to sellers, and the proof is in the pudding. We've seen the number of sellers on Etsy grow

very substantially over the past several years, and so what's important is that we're delivering great value for buyers and then delivering more and

more buyers who are able to deliver great value for our sellers.

I also want to point out that for the very small fee increases that we made, we've committed to reinvest those in our sellers through things like

more marketing. And so Etsy is investing tremendously right now to make sure that our sellers have the opportunity to really rise to this important

occasion.

CHATTERLEY: Yes, and that's important to understand. I mentioned your valuation as I was coming in. I'm sure you're not going to comment on the

share price, but your relative valuation now is higher than amazon.com. It's higher than Alibaba. It is higher than eBay, it is even higher than

JD.com.

Josh, how do you feel about that?

SILVERMAN: I think what people are realizing is that the market opportunity for Etsy is enormous. As the world becomes more commoditized and there are

more things you can buy cheaply that will arrive immediately and you would have forgotten in three weeks.

People crave for things that have meaning. Maybe you want to buy fewer things, but you want them to mean more and there's an incredible array of

things you can buy on Etsy. Almost everything you can buy anywhere else, you can buy on Etsy. The difference is it will be made just for you and

you'll have a personal connection with the person who actually made it.

So every morning when you drink your cup of coffee, why not drink it in a mug that was made just for you so you can remember and think about that

maker. I think people are craving that and I think the market opportunity for that is absolutely enormous and I think people are realizing that.

[09:50:16]

CHATTERLEY: Meaningful. Making everything in our lives more meaningful. I like it. Josh, great to have you with us. Thank you so much for talking

about your business and what you're doing.

Josh Silverman there, the CEO of Etsy.

All right, up next, a damning report finds Boeing withheld key information about the 737 MAX jet involved in two fatal crashes. We've got all the

details next.

(COMMERCIAL BREAK)

CHATTERLEY: Welcome back to FIRST MOVE. A government report into Boeing's grounded 737 MAX jets has found that the company withheld key details about

the plane's flight systems from regulators. The system has been implicated in two fatal crashes.

Pete Muntean joins us now. Pete, great to have you with us. What more do we know?

PETE MUNTEAN, CNN AVIATION CORRESPONDENT: Well, this damning report, Julia, comes at a critical time for Boeing, especially since it's trying to show

that the 737 MAX is safe to fly again.

This comes on the day, the third day of test flights for Boeing, the third of three test flights as it's trying to recertify the 737 MAX that's been

grounded since last March. This report from the Department of Transportation Inspector General essentially says that Boeing shielded the

F.A.A. from knowing everything it possibly could about the M-CAS system, the maneuvering augmentation system that essentially led to the two fatal

crashes of the Boeing 737 MAX.

The most interesting part in all of this, it says that in 500 slides that Boeing presented to the F.A.A., there were only two lines that talked about

the M-CAS system. Boeing essentially downplaying the significance of this. The I.G. says that Boeing said this was essentially just a minor

modification.

Now, Boeing has said that it's leaning into this investigation trying to provide the I.G. with all the information that it possibly can. It's also

leaning into making significant changes to how it does business with the F.A.A., also saying that it is making changes to the 737 MAX and how it

flies.

The M-CAS system is no longer able, Boeing says to overpower pilots and would not automatically engage if there was a single sensor failure, which

is what led to these two incidents.

Even still, this has major implications for the entire aviation industry in general and for lawmakers who are looking at this report saying that there

needs to be significant changes to how the F.A.A. certification process takes place, something that's been lengthy for a long time and something

that has been expensive for a long time.

So real systemic changes possibly coming down the pike here, something that the industry does not welcome, more regulation on Boeing, more regulation

on the industrywide -- Julia.

CHATTERLEY: Yes, so Pete, basically what we're saying is this is handing a whole load of leverage to lawmakers who want to shake up how the F.A.A.

goes about approving aircrafts.

[09:55:08]

MUNTEAN: That's exactly right, and lawmakers are already saying that there needs to be changes to the system -- the coziness essentially between

manufacturers like Boeing and the F.A.A. So we'll see how this plays out on Capitol Hill.

CHATTERLEY: Yes, with a whole host of further evidence provided, it seems, in this report. Pete, great to have you with us. Thank you so much for

that. Pete Muntean there.

All right, a quick look at the U.S. markets and what we're seeing on the first trading day of a new quarter and the second half of the year.

Relatively unchanged with the Dow holding in positive territory.

Richard will be back with "QUEST MEANS BUSINESS" in a few hours' time. But for now, that's it for the show. You've been watching FIRST MOVE. Stay

safe, guys, and I'll see you tomorrow.

(COMMERCIAL BREAK)

[10:00:00]

END