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First Move with Julia Chatterley
Lawmakers Still in Deal Deadlock Just Hours before the Democrats' Deadline Ends; The Final Presidential Debate Will Use a Mute Button; Two Countries, Two Vaccines, a Spotlight on Efforts to Find a Way Out of the Pandemic. Aired 9-10a ET
Aired October 20, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:10]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
Stimulus standstill. Lawmakers still in deal deadlock just hours before the Democrats' deadline ends.
Silence secured. The final presidential debate will use a mute button.
And trialing times. Two countries, two vaccines. We spotlight efforts to find a way out of the pandemic.
It's Tuesday. Let's make a move.
A warm welcome to you, all our First Movers all around the globe. Great to have you with us. As the stimulus soap opera drags on in Washington. It's
do or die deal time as Democrats have that 48-hour window that closes by the end of today. And as a result, stocks are yo-yoing up and down.
U.S. futures, as you can see right now are higher, taking back at least some of Monday's losses on words that progress is being made and talks will
continue today. We shall see.
European and Asian stocks pretty mixed as you can see on the board there, too. The S&P and the NASDAQ fell some 1.5 percent on Monday. The heavy
hitters like Apple, Microsoft, and Tesla pulling back some 1.5 percent, as you can see, or more.
Remember, Senate Republicans still have to agree and their message has been bigger, it is not necessarily better.
President Trump, though, said just minutes ago he believes that the Senate Republicans will back a deal. We'll see what happens. I have to say, I
remain skeptical, and amid all the stimulus uncertainty, profit uncertainty, too, at least on Wall Street.
IBM falling premarket after failing to provide guidance about the outlook. Investors are rewarding businesses that can give that guidance and are
increasingly less forgiving of those that simply can't.
The banks with strong trading businesses, meanwhile, continue to surprise, too. Swiss giant, UBS out with its strongest Q3 results in a decade,
profits rising almost 100 percent. It also set aside fewer than $90 million for bad loan provisions, a third of the money booked in the previous two
quarters.
And one breaking story at this hour, too, sources telling CNN that the U.S. will sue Google for alleged anti-competitive abuses related to search
functions later today. All the details on that coming up later on in the show. There's plenty to get through. Let's get to the drivers.
The microphones of President Trump and his Democratic rival, Joe Biden will be muted at key moments of Thursday's final presidential debate after
chaotic interruptions disrupted their first face-off.
Boris Sanchez joins me now. Boris, the Commission acknowledged that one party here is going to say, look, you're not going far enough, and the
other party, aka President Trump, is going to say, hang on a second, that's not fair. That's kind of exactly what we got.
BORIS SANCHEZ, CNN WHITE HOUSE CORRESPONDENT: Yes, there's a lot of contention about this decision from the Commission on Presidential Debates.
Essentially, the debate is broken up into six 15-minute segments and each candidate gets two minutes at the beginning of that segment to speak
without interruption.
And the way that the Commission is going to enforce that rule is by muting one of the microphones of these two candidates as their opponent is
speaking. This is not something that the Trump campaign is eager about.
A Trump campaign official effectively saying that this reveals the Commission's bias for Joe Biden. The President himself actually this
morning on a conservative news outlet saying that he believes that this has happened to him before. The President delving into conspiracy here after he
had a mic issue during a 2016 debate with Hillary Clinton.
Of course, there was no muting of his mic. The audience could hear everything he was saying. It appeared to just clip at different points.
That's not stopping the President from moving forward with that claim, though.
Of course, one of the big questions here is, how Republicans are going to ultimately defend this stance from the President, considering that many of
them argue that during the first debate, Joe Biden started the interruptions by interrupting President Trump during one of his initial
responses.
It is going to be a huge night on Thursday. It is going to be the final opportunity for these two opponents with such a huge audience to go head-
to-head and deliver their message to the American people -- Julia.
CHATTERLEY: Yes, it's going to be a big night to watch. Boris, someone else who wishes that perhaps they could hit the mute button on President
Trump is Dr. Fauci. The President calling into question Fauci's credibility once again yesterday.
Fauci, cool as a cucumber said, look, it's a distraction and quoted "The Godfather." talk us through this.
[09:05:00]
SANCHEZ: Yes, Fauci channeling Michael Corleone saying that this is not personal, it's strictly business, that Fauci just wants the American people
to be protected and to follow the science when it comes to protecting themselves from the coronavirus.
The President, though, this morning, once again going after Fauci with a bit more tame remarks than we've seen in the past.
Previously, the President falsely arguing that Fauci has been wrong on an array of issues when it comes to coronavirus, claiming that hundreds of
thousands more people would have died if he had followed Fauci's advice than already have in the United States.
Today, the President saying that he believes that Fauci is a Democrat, a good friend of the Cuomo family.
Quick fact check, Fauci is not affiliated with either political party. The President, though, yesterday making clear that he feels that firing Anthony
Fauci would present a lot more problems for him, so it's just something he apparently has to stomach -- Julia.
CHATTERLEY: Yes. And if I remember in the movie, when you say, nothing personal, strictly business, it's right before you bump someone off, which
is interesting, too. But we will say no more about that.
Boris Sanchez, thank you so much for that.
SANCHEZ: Thank you.
CHATTERLEY: Now, besides stimulus plans and earnings reports, many analysts say what's going to be pivotal for economic recovery and turning
and corner here is the timing of a vaccine.
And in China, the world's number two economy, they are now cautiously rolling out coronavirus vaccines before the conclusion of Phase 3 trials
and demand is already high, as David Culver reports.
(BEGIN VIDEOTAPE)
DAVID CULVER, CNN CORRESPONDENT (voice over): They arrived early from all over China, folks lured to the international manufacturing hub of Yiwu
City, specifically to this small community hospital.
This is one of the first public locations where China has rolled out an experimental COVID- 19 vaccine. They began injecting people over the
weekend. The cost, about $60.00 for two doses.
Word spread quickly. Some showed up Monday thinking they would get a shot. Anny Ku among them.
"This is something important to you, isn't it?" I asked her. "Yes," she replied. Adding, "Because, well, if you have the vaccine it's much safer to
leave the country."
For more than twenty years, Ku has worked in import/export in Chile and returned home to China amidst the outbreak. She flew to Yiwu the night
before we met her. It's a two-hour flight from her home in Southern China. Eager and admittedly, a bit desperate for immunity.
CULVER (on camera): And so, they told you they don't have any and so you have to go and find another place.
CULVER (voice-over): Hospital staff confirmed to CNN that they had run out. Local officials later announced this distribution was only for those
with specific foreign travel needs and preapproval.
Ku was not the only one disappointed. Notice the groups of people waiting around the hospital parking lot. Some of them traveled in from neighboring
provinces, wanting the vaccine.
CULVER (on camera): Yes, would you take the vaccine?
CULVER (voice-over): Originally from Syria, we met Anas Chahouta, as he pulled up with his young daughter and wife in the backseat of their car. He
was curious, if not also a bit hesitant.
CULVER (on camera): If you were to walk in there, and they had it, would you take it today?
ANAS CHAHOUTA, YIWU RESIDENT: Actually, I don't know, I don't have the answer.
CULVER: As you kind of go through this main entrance here, we do know folks are going in to inquire about how they might be part of this trial,
essentially. Because you've got to remember, this is part of the Emergency Approval Use granted by the Chinese government. This is not an actual
release of an approved drug as of yet.
CULVER (voice-over): The vaccine distributed at this Yiwu hospital is made by Sinovac Biotech. CNN took you through the Beijing-based biotech
company in August. It is one of more than a dozen Chinese companies working on a coronavirus vaccine.
At the time of our visit in late summer, they were constructing a new facility to meet the production demands, while still going through Phase 3
clinical trials which have not yet concluded. It all seemed to be happening at rapid speeds.
HELEN YANG, SINOVAC YOU BIOTECH: None of the staff is sacrificing any quality of our vaccine. Because Sinovac's goal is to provide a vaccine with
good quality, good safety, good immunogenicity to the people in the world.
CULVER (voice over): China has been trying to push past the early allegations of mishandling, cover ups and silencing of whistleblowers
surrounding the initial outbreak in Wuhan. And instead, officials here have highlighted their swift and seemingly successful responses to many cluster
outbreaks.
The most recent in Qingdao last week, following a major travel holiday.
After only a handful of confirmed cases surfaced, health officials began strict contact tracing and tested more than 10 million people in less than
a week, and life it seems quickly returned to near normal again.
But that's mostly within China, a bubble of sorts. For some whose livelihood is rooted in other parts of the world where cases are surging
once again, their only hope may be the vaccine.
Anny Ku others on to the next location to track one down.
David Culver, CNN, Yiwu, China.
(END VIDEOTAPE)
CHATTERLEY: Well, let's move on to the next location in the United Kingdom. The government is launching the first human challenge studies for
the novel coronavirus.
A group of volunteers will be deliberately infected with COVID-19 after being injected with a potential vaccine. Phil Black joins us from London.
[09:10:07]
CHATTERLEY: Phil, the critics here would say without a proven vaccine, this is unethical. These people are certainly brave, taking part in this
study. What more do we know?
PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: The way these trials will work, Julia, is that volunteers, indeed, brave, courageous, but financially
incentivized volunteers and compensated volunteers will be given a potential vaccine, and then some weeks later, they will come here to
London's Royal Free Hospital where they will be deliberately dosed with the virus and doctors will then assess whether the vaccine does its job.
And they believe that this is useful to more efficiently assess and identify the most promising of the many vaccines that are being developed
around the world. Even before they get to that point, though, they need a round of volunteers who will simply be exposed to the virus itself in what
they call a characterization study.
This is a very specific study to increase understanding of the virus, but also to refine and develop the specific dose that will be used to then
challenge the vaccines in those trials which follow.
I spoke to Dr. Martin Johnson, one of the doctors responsible for setting up this challenge trial program. This is what he explained to me in terms
of why they need to, first of all, infect volunteers or seek to infect volunteers before you even introduce potential vaccines.
Take a listen.
(BEGIN VIDEO CLIP)
DR. MARTIN JOHNSON, SENIOR MEDICAL DIRECTOR, HVIVO: So basically, we're watching disease in motion, right from the very start of inoculation right
through to the disease going out of the body.
So, it gives us an absolute view of what is happening to the human body during an infectious process.
BLACK (on camera): And what is the ideal reaction that you're trying to trigger?
JOHNSON: So what we're trying to do is we're trying to get the minimum number of symptoms that are safe and then gives enough scientific evidence.
(END VIDEO CLIP)
BLACK: Ethically, risk minimization is key to conducting these trials. But they are controversial because you need to minimize risk, you need to
use young, healthy volunteers. Critics of challenge trials say that means you're dealing with a very limited profile and these are people who do not
represent those in the broader community who most need protection from an effective vaccine.
But there is still risk because as you point out, there is no effective guaranteed treatment for COVID-19. It will all be assessed and monitored
and overseen by an Ethics Committee, and the job of that committee is to ensure that risk is minimized, but also that the risk is balanced by the
potential rewards that could flow from conducting these trials -- Julia.
CHATTERLEY: And that's the challenge, isn't it? Balancing all of these things to get a vaccine as efficacious as possible in the soonest possible
time. Phil Black, thank you so much for that update there. Fascinating to see.
All right, let me bring you up to speed now with some of the other stories that are making headlines around the world. Russia has recorded its largest
daily increase in coronavirus infections, but despite the rise, officials don't believe a full lockdown is necessary.
Russia has the fourth highest number of coronavirus cases now in the world.
That's in contrast to Latin America where the trend in most countries is now downwards. New cases slowing right down, particularly in Bolivia,
Brazil, Chile, Peru and Colombia are also moving in the right direction. Argentina, however, has just surpassed one million cases.
Now, staying in Latin America, it is not official yet, but the socialist candidate appears to be the winner of Bolivia's high stakes presidential
election. Luis Arce, handpicked by the former President, Evo Morales is already receiving congratulatory messages and his rival has accepted
defeat.
All right, still to come here on FIRST MOVE, the cost of Bidenomics. Americans will be poorer and unemployment will be higher under President
Biden, says a new report from the Hoover Institute, we discuss with author, Kevin Hassett.
And building resiliency, the Executive Chairman of high-end gym chain, Equinox joins me as the industry grapples with the coronavirus pandemic and
a brewing winter.
Stay with us. That's next.
(COMMERCIAL BREAK)
[09:17:17]
CHATTERLEY: Welcome back to FIRST MOVE. Former Vice President Joe Biden is promising faster economic growth and a robust or more robust jobs market
than we've seen during the Trump years if elected President.
Moody's Analytics says almost 7.5 million more jobs will be created under a Biden administration than under President Trump. But a new study from the
Hoover Institute warns that Biden Economics will have the exact opposite effect.
It says Biden's tax and spending plans will lead to almost five million fewer full-time jobs by 2030. It sees GDP contracting by some eight percent
by 2030 to a loss of some $2.5 trillion in economic output, and it sees the medium household income of Americans falling by some $6,500.00.
So, what's going on? Well, Kevin Hassett joins us now. He is former Chairman of the White House Council of Economic Adviser under President
Trump. He's also a coauthor of that Hoover Institute report.
Kevin, fantastic to have you on the show.
KEVIN HASSETT, CNN ECONOMIC COMMENTATOR: Oh, it is great to be here, thanks.
CHATTERLEY: Lots of components to this. Tax, regulation, energy, healthcare, what do you see as the most damaging aspect of Bidenomics?
HASSETT: Right, well, I think that you listed them correctly and you know, before we even go into the scale of the effect, we should sort of put the
policies on the table, which with everybody focusing on the President's foibles, Hunter Biden, and so on that no one is actually looking at the
policy proposals, especially in totality and that's what our paper at the Hoover Institution does.
So I think the tax policy, to answer your question, is probably the most harmful and it is really because Vice President Biden has proposed removing
the cap on Social Security, which is 12.4 percent tax that gets added for every pass-through entity of the U.S.
And to put that in perspective, with the marginal tax rate on small businesses from a little under 40 percent in the U.S. to about 55 percent
and that tax hike affects firms that employ, you know, about 50 million people, 40 million or 50 million. It's something you have to estimate.
And so that's a really big negative effect. When we consider that small businesses right now, they are just barely hanging on because the economy
has been shut down for a year, if they really do hit the economy with a tax hike like that, which I doubt they would, I think they're not that silly.
But if they did, then it would be catastrophic for the U.S. economy.
The second best or, you know, biggest effect in the proposal is their energy proposal, which basically moves all miles in the passenger fleet to
electric cars just about, which increases the demand for power generation in the U.S. by 25 percent.
To put 25 percent in perspective, that's how much power generation has increased in the U.S. since 1979, so it's a really big change. At the same
time, they take fossil fuels completely offline and right now, fossil fuels produce about 70 percent of power in the U.S.
So you're basically putting 95 percent of power generation in the U.S. on the table and again, that's an extremely disruptive thing. Now, we can talk
about the climate benefits. I think they might be significant from that.
But the, you know, actual economic disruption from it is really significant.
[09:20:28]
CHATTERLEY: Okay, I'm going to stop you there because I want to go back to the first thing that you talked about which was taxes, because I do
think this is incredibly important. I mean, a lot of people are talking about, look, if you earn less than $400,000.00 a year, and we can separate
tax rises on payroll taxes and personal income from the loss of deductions, which you've also mentioned.
I think the thing that people have to understand here as well is that for many small businesses, it is one to two people. They often get taxed at
their personal tax rate.
So, if you're raising taxes on individuals, it can impact small business operations as well, and this is also a point that you're making.
HASSETT: That's right, and especially, if you think about the small businesses that you deal with, some of them employ a lot of people, and
some of them don't, but the ones that employ people tend to probably, the person who owns the business, makes more than $400,000.00 in the U.S.
And so therefore, this huge tax hike from less than 40 percent to about 55 percent and that's even before we count state and local taxes, that big tax
hike affects firms that basically employ about half of workers in the U.S., and so what the Democrats are saying is, oh, well, it's not that many tax
returns, which is true. But it's a huge amount of the employment in the small business sector.
CHATTERLEY: Yes, we have to understand the difference here, Kevin, and to go to your point on energy as well. I mean, the President -- sorry, Joe
Biden has said, look, he doesn't officially support the Green New Deal, and neither does Kamala Harris, but what you're saying is some of the measures
that they are already proposing go way beyond anything that we saw in Obama's era.
I guess the counter to this would be, they are saying, and I think you're agreeing that a net 1.3 million additional workers would be required as a
result, in addition to the quantifiable benefits of the climate, but what you're saying is at this point in time, economically, it's a stranglehold
on the economy.
HASSETT: Yes, and just to use an extreme example. Like, suppose that we said that you're not allowed to ride around in taxis or Ubers, everybody
has to take a rickshaw. You would create a lot of jobs because there would be a lot of people out there pulling rickshaws, but you wouldn't improve
the efficiency of the economy.
And so when you're looking at a change like this that create jobs, you have to think about, well, what are those people doing compared to what they are
doing now and that change in productivity, we estimate, is a reduction of about two percent.
But again, to be fair to Vice President Biden, that's our job, it is to look at it from both sides. President Obama had a bunch of very, very left-
wing policies, so you might recall that he was like really opposed to NAFTA and criticized Hillary Clinton when he ran against her in the primaries for
supporting NAFTA.
But then he was in the White House and he kind of dropped that stuff, and I think that, you know, moderate Biden supporters expect that all of these
far-left proposals are going to be dropped as soon as he is elected and that he just basically did that to get the Sanders supporters, not to
revolt against him.
And so I think that that's possible. But the argument against that would just be that they're going to control Congress if he is elected, almost for
sure, and there are a heck of a lot of people in Congress that love these ideas.
And if they pass it, is Biden going to veto it? You know, probably not. And presidents, especially first-term Presidents tend to have a hard time
controlling their own Congress when it's under their party.
One Bush administration official once said to me that when they lost the House, it actually made their life easier.
CHATTERLEY: Yes, I mean, this is the challenge, isn't it, as well, and when you're trying to predict, and to your first point, and I think it's a
really important one, we're not talking about policy, we're not talking about economic policy and we're in a tragic situation with over 10 million
in this country still out of work, potentially more that we don't quantify.
HASSETT: Right.
CHATTERLEY: So, give me your sense, to your point as well about the difference between what Moody's Analytics is saying when they have assessed
the two plans and said, hang on a second, you now, Joe Biden is going to create seven million more jobs than President Trump would have over the
next four years.
Does it simply come down to a fact that they put more weight behind government spending, consumption and stimulus in general, versus you look
at some of the drawbacks, perhaps, of higher taxes and higher regulation.
HASSETT: Right. Well, the Moody's study is really fundamentally flawed. You know, the author of the study fund raises for Democrats and so on and
so we don't have to attack his motives.
But the fact is, that all of this like -- like you can't -- just think about it. You can't increase tax rates and pass though the employees or
just about everybody for a little less than 40 to 55, and not have a negative impact, right, and so therefore, they are assuming there is no
negative impact from that.
You can't put 95 percent of power generation in the U.S. on the table and then not have a disruptive effect if you're really doing it, so of course,
they are not modeling that. They're just modeling a really big stimulus, which they expect the Democrats will pass and they expect that President
Trump won't.
[09:25:10]
HASSETT: But in fact, President Trump is on the record saying he wants a stimulus and in fact, Secretary Mnuchin was negotiating yesterday for more
than an hour with Speaker Pelosi about it still.
So anyway, I think their counterfactual is wrong and I think they've ignored the negative policies, so they have done that because, really, the
person who is a Democratic fundraiser is abusing the Moody's name in order to make political points and if I were a Moody's CEO, I would be pretty
upset about it, frankly.
CHATTERLEY: You know, it is interesting, Kevin, some critics would perhaps look at this analysis and look at you and say your analysis is
fundamentally flawed because of your association with the White House. How would you respond to that?
HASSETT: Oh, that's why I focused our conversation not on the sort of eight percent of the stuff that you led with, like, you could like my model
or not, but I can say that our model is, you know, we've got code, we'll share with anybody if anybody that wants to try to fiddle with it and see
what they get. We will share the code with them.
But we focus just on the policies and so, just right now, if you and I were having dinner and I said, hey, we're lifting the tax rate on tax remedies
from about 40 percent to about 55 percent, you know, and that employs more than 50 billion people, how many people will be affected by that and lose
their jobs?
You would guesstimate that it would be something negative, right? You're not going to get a positive out of that. And if I said, hey, if you do that
and you also spend a trillion on government spending and that will jack up the economy, what's the net? You're still going to probably have a hard
time getting the massive job creation that Moody's does.
So I think that by putting the facts on the table, you guys here at CNN International are doing an amazing service because basically what we need
is all the world's economists and financial market participants and individuals to look at these things and, you know, decide for themselves
what direction they think they take and I think getting into a positive direction is really kind of a leap worthy of that old motorcyclist Evel
Knievel.
I just got that really --
CHATTERLEY: Yes, no. I agree, we have to debate.
HASSETT: You could do that.
CHATTERLEY: We have to be able to debate the differences between policies, and thank you for making the model open access, because people
need to understand the numbers here and the implications.
Very quickly, Kevin, your view, if stimulus is not agreed by the Democrats' deadline; one, do you think it can be? Is there any chance? And what
happens to the economy if we don't see further stimulus before January and the Inauguration of whichever President wins?
HASSETT: Right, well, the third quarter in the U.S. is really a rip- roaring quarter that, you know, there are whispered numbers that make it so big, the growth rate, that you almost recapture the ground that you lost in
terms of output in the second quarter.
And so the question is, what happens after that? And I think that if Vice President Biden is going to come in and lift those taxes and things, you
know, and again, I gave you the argument for why he might decide not to do that, then you're going to need a huge stimulus because all of these
businesses, they are just about out of cash because they've been treading water for eight months, they're going to probably give up, because they're
just like, oh with the tax hike, they are not that much -- there is no point in operating.
But you know, I think that if you had no policy at all, it's possible that we've recovered enough, especially if we get the virus under control.
In the U.S., the red states are basically wide open and their economies are humming. The blue states are basically shut. Here in D.C. where I live,
about 40 percent of businesses are still shut. And those blue states that are shut, they're going to have to open up or they are going to have to go
bankrupt. They're going to have to choose.
And if they open up, then you can probably get by without much of a stimulus, but if you're going to hit the economy with a big negative policy
shock, then you sure better stimulate it at the same time.
CHATTERLEY: Yes. And the $1.8 trillion question though is if we get the virus under control. Kevin Hassett, great to have you on. Thank you so
much.
HASSETT; Thanks a lot. Great to be here.
CHATTERLEY: Thank you. The former Chairman of the White House Council of Economic Advisers under President Trump.
The market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:31:50]
CHATTERLEY: Well, welcome back to FIRST MOVE and U.S. stock markets are up and running this Tuesday, as expected, a higher open on Wall Street.
Tuesday's talk is cheap. Stocks are rising as hope springs eternal for a U.S. emergency aid deal before House Speaker Pelosi's deadline tonight. We
shall see.
Also in focus, corporate earnings, Procter & Gamble -- P&G reporting a better than expected nine percent sales jump and raising its 2020
forecasts, too. Consumers keep stocking up on the essentials.
It matters if they can provide guidance and this is one company that has.
Also, Netflix results out later today. The streaming service could announce its first U.S. price hikes in almost two years. In the meantime, sources
tell CNN that the U.S. could file an antitrust suit against Google as soon as today in what would be the largest U.S. antitrust case against a tech
company in decades.
The suit allege that Google stifles competition in search. More on all of this coming up later on in the show.
In the meantime, moving the indoors outdoors is just one of the ways businesses like gyms are responding to the COVID age, but with winter
coming, for many of us, that's just another economic challenge facing the sector.
Equinox, the luxury gym chain is holding outside classes as you can see, and indoors. Strict protocols are in place like mask wearing and
temperature checks among others.
Harvey Spevak is Executive Chairman and Managing Partner of Equinox Holdings and he joins us now.
Harvey, fantastic to have you on the show once again. The last time you and I spoke, you were just starting to get the New York gyms up and running.
Talk us through what you're seeing in terms of people coming back and how the business is doing.
HARVEY SPEVAK, EXECUTIVE CHAIRMAN AND MANAGING PARTNER, EQUINOX HOLDINGS: Hi, Julia. Thanks for having me back.
You know, we've been really, really pleased with what we've seen so far in New York. Our members are thrilled that we have reopened, and what they're
really appreciative of is our standards.
I mean, we've taken, oftentimes, what is required by local government to a whole another level, working with our own team of epidemiologists and
experts to make sure we protect our employees and our community to the best extent possible.
And so our members, you know, we survey them and 90 percent plus, almost like 95 percent, are extremely satisfied with the standards that we have in
our clubs, and so they are really excited to get back to more of a normal routine.
They've fatigued doing Instagram live in their living rooms or pushing the coffee table out of the way. So, they're engaging with us in the clubs.
They're engaging with us outdoors in the wild at Equinox and they're engaging with us digitally, so very excited about what is happening right
now based on our opening in New York in September.
CHATTERLEY: Harvey, full disclosure, and you and I talked about this the last time you were on as well. I am an Equinox member and in the past week,
I have been back and I have to say, I am incredibly impressed by the cleaning, by the measures that you've taken.
What I fear for, for you, and it's my gym and it's anecdotal but I've spoken to a number of people who feel the same, there's barely anybody in
the gym. At times you're sort of dwarfed by the number of people in there cleaning.
Harvey, how is this sustainable? How long can you sustain having relatively so few members back in the gym?
[09:35:10]
SPEVAK: So, Julia, first, I'm very happy to hear that you have come back and have had a great experience as I just suggested what we've heard from
other members because I was going to ask myself whether you did or not.
You have to now look at the day a little bit differently. So, historically, you know, you've come whenever you've wanted to come and so oftentimes,
that means that we would have peak times throughout the day.
Now, because you're through the app scheduling when you come to the club, we're elongating the day and spreading out that usage throughout the day.
And while there is still more demand, let's call it after work or in the morning, people are now coming more thoroughly throughout the day.
So you definitely have less people at any given hour, that's to protect everybody, but at the same time, over the course of the day, we still get a
lot of visits.
And so what we're seeing is those members who have resumed their memberships, on balance, are using the club with the same frequency they
have before. What we need to see happen is more people get comfortable that it's okay to come back where even more people, even more importantly,
coming back to the major urban cities.
So when a city like New York, the office occupancy right now is 10 percent, and so a lot of those people have, you know, gone back, whether they're
young, they've gone back to their home with their parents, or they've relocated temporarily and so we need more of those people to come back to
the major cities, whether it be New York or Boston, particularly the East Coast of the U.S.
London is a little bit different. We're seeing a higher usage than we see in New York, even though we have the same protocols in terms of scheduling.
CHATTERLEY: Can you give me a percent how many people are back? Is it more than a third of people? Just based on what you were saying about New
York, if we look at the whole portfolio, are more than a third of customers back using the gym or is it less than that?
SPEVAK: So, no, it's dramatically more. It's about 2X of that. A third is our occupancy requirement, so we're only allowed to have a third of the
members using the club any given time based on our occupancy.
And so that's what we're controlling through the scheduling. But in terms of the members who have come back, it's more than 2X that.
CHATTERLEY: Okay, Harvey, talk to me about the financials, then, in that case. As you said, you're optimistic that you can encourage people to come
back, but it is progress and we're heading into the winter months.
There's reports that you're in restructuring talks. I saw an article in the "Wall Street Journal" about no one ruling out the risks of bankruptcy at
some point in the future. What can you tell us here and can we rule that out here and now?
SPEVAK: We can rule that out. That article is false and was irresponsible journalism. We are not in restructuring talks. We are not talking about
bankruptcy. We're comfortable with our current financial situation.
Obviously, we are under -- continue to be under a lot of pressure, and the sooner COVID gets resolved through, I'll say, all three: vaccinations,
treatments, and testing, it will make a big difference in our business, but none of that is accurate.
CHATTERLEY: Okay. We're setting the record straight here on FIRST MOVE. And finally, I believe you held a fundraiser for Joe Biden and Kamala
Harris.
Do you see the Democratic Party here as being the party for business? Because traditionally, and if we look at the potential tax rate rises in
their plans, it may not be in terms of the financials. Talk me through the thinking here.
SPEVAK: Well, first, I think it's important to recognize Equinox and any of our brands with Equinox, Soul Cycle or Blink, or Equinox Hotels are not
political. So, none of the companies endorse candidates and I think that's very important and we also believe very strongly that everybody has their
right to vote regardless of their affiliations.
What I'm hoping for, regardless of who wins, is on the other side of the election, is two things happen. One is we double down our efforts around
COVID, because we've got a long way to go, and that's going to help our business dramatically, and that's really important. And then secondly, what
I hope for is we spend a good amount of time coming together and uniting versus being divisive, but uniting and healing as a country.
Because the U.S. and the world needs a lot from us and we've got a lot of things to do going forward.
So that's my hope, regardless of who wins.
CHATTERLEY: Yes. I'm with you, my friend. Transcends politics. Unity more important if we can get there.
SPEVAK: Correct.
CHATTERLEY: Harvey Spevak, fantastic to have you on the show, sir. Thank you so much, and come back soon. The Executive Chairman and Managing
Partner of Equinox Holdings.
All right. Up next, nearly half of the people who work in the city have lost income because of the pandemic. I speak to the head of the Robin Hood
Foundation about helping those who can't afford to take that sort of hit.
Stay with us. More next.
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[09:43:04]
CHATTERLEY: Welcome back to FIRST MOVE. The Robin Hood Foundation is a charity whose mission is to lift New Yorkers out of poverty. Last year,
they raised almost $130 million.
That mission was made both harder and more critical when the city became the epicenter of the U.S. COVID-19 outbreak earlier this year.
Even before the pandemic hit, nearly half of New Yorkers had less than $400.00 in savings. Now many have lost jobs and/or income.
Earlier this year, the charity set up an entirely separate fund to provide emergency COVID support and to date, they've raised $60 million. Joining us
now, Wes Moore, CEO of the Robin Hood Foundation.
Wes, fantastic to have you on the show, and incredible work that you and your team are doing here. I believe half of the cash that you gave out in
that separate fund went out in the form of literal cash handouts and grants and food. Just explain the scale of the challenge.
WES MOORE, CEO, ROBIN HOOD FOUNDATION: Well, one of the things that we have seen throughout this crisis is not just the fact that COVID-19 has
exacerbated the levels of disparity that we see in our communities, it's also exposed it.
And your point earlier was a very important one where even if we look at before COVID-19, the fact that we had over 40 percent of people who could
not afford a $400.00 shock with cash, the fact that 23 percent of people who have lost their jobs due to COVID-19 are people who are living in
poverty before COVID-19, i.e., we're talking about the working poor.
So, we already saw this massive level of instability that existed within the City of New York and beyond even before COVID-19, and so when we
launched our Relief Fund, which, by the way, was only the third time in our organization's history we have done that.
Once was after 9/11. The other was after Hurricane Sandy. But we saw that the distinct needs and the direct needs for people at that moment were
actually simple things like food and things like cash assistance. To be able to make it just day by day and month by month, and so that's why we
mobilized and decided that those were the areas that we wanted to target our resources.
[09:45:16]
CHATTERLEY: Yes, and I want people to understand as well, I believe your first grants went out March 20th, so before the government acted, you were
already on the ground, getting money, getting support to people who were clearly immediately and desperately in need.
MOORE: Yes.
CHATTERLEY: Wes, it's not even just about the people that manage to get hold of some of that money from the CARES Act, though, because I know you
highlight the fact that many people were immigrants. They simply didn't have access to support that was provided in the CARES Act that came from
the government. Because this is the sort of forgotten people in this city and in many cities around the country and even around the world. The
forgotten workers.
MOORE: That's exactly right, and almost intentionally forgotten about, which makes that so heartbreaking. The fact that we passed this CARES act
and we actually tried to move and lobby and move the government to be able to capture everybody, but the reality is, even when you look at the cash
assistance elements that were inside of the CARES Act, it left millions of people out.
If you were undocumented, even if you were working and paying taxes, there was no cash assistance support for you. If you were part of a mixed status
household, i.e., you had someone in your household who was undocumented, there was no cash assistance element for you.
If you were a student, there was no cash assistance element for you. If you were working but not making enough money in order to meet the tax filing
threshold, i.e., again, the working poor, there was no cash assistance element for you.
And so, in many ways, what we saw was an exacerbation about policy. It really has this almost dastardly focus of saying the people who need the
support most actually end up getting the least. And that's the thing that we felt that philanthropy and our work at Robin Hood, uniquely, could help
to try to fill that hole that was being created by, frankly, uneven policies.
CHATTERLEY: Yes. And there's a racial element here too, and I've heard you say many times there's a direct link between your race and poverty,
quite frankly, and this is something that begins very early and it follows you throughout your life and we just did a study, and I know you're an
intrinsic part of that.
We talked about on the show, the University of Columbia saying 26 percent now of minority families are living in poverty in the United States. It's
bigger than just New York City. Talk to me about this, and then we can talk about fixes because they're desperately needed.
MOORE: And you can't talk about economic instability without also talking about how race plays into it, I mean, because even if you just look
at what the data continues to tell us, so, take education as one example where the data shows us that a college degree increases lifetime earnings
by nearly $1 million, so people would say, well, then, of course it makes sense that we have to encourage not just college acceptance but also
college completion.
But the research also shows us something else. That black college graduates, on average, earn less than white high school dropouts. So if you
think about that, it's impossible to separate the role that race plays into these various dynamics, and so I think part of our responsibility is to be
honest and disaggregate what the data continues to show us and show the fact that if race is and still is currently the leading indicator of life
outcomes that we have within the United States, you know, whether it's life expectancy or whether it's academic achievement, income or wealth or mental
or physical health, the type of treatment that you receive in hospitals, maternal mortality.
If race is the leading and most reliable predictor of life outcomes, it's impossible to come up with solutions that we think are going to be color
blind because that's not the way the society continues to be structured and operates.
CHATTERLEY: Yes, it's -- you raise so many great points and I know you've just been added as well to the Board of Under Armour, as well, which
is all part of what the business community needs to do to tackle this as well, but we are all in it together.
Wes, what are some of the key fixes? I feel very passionately about education. Talk me through what needs to change and are we going to see
that in the next four years?
MOORE: I think we will continue to see it for four years, but I think the thing that we'll continue to see is it's not because we're waiting on a
day. It's not because we're waiting on an election and it's not because we're waiting on a leader.
It's because we're watching everyone step up. It's because we are watching the business community that are making real strides in order to say, what
becomes the business community's level of influence to be able to use economic levers to be able to address the racial gaps? It's the activist
community that's pushing the business community to be better.
And you know, when we're looking at movements that have happened, I think one thing you should look at is the Washington football team. It's not that
they changed the name to the Washington football team, it didn't just happen because activists had been pushing for something for years.
[09:50:08]
MOORE: It's because at some point FedEx and other businesses said, we don't feel comfortable with our name on the stadium if you keep the name of
the old football team for Washington.
It's because policymakers are actually thinking about the fact that we have different levers that we have to pull, so this has to be something that we
have to move in a unified fashion to be able to address a central problem of inequality and inequity within our society.
CHATTERLEY: Yes, we all have to be activists. Now, speaking of activism, Wes, next week, the investor conference, 65 speakers and 21 sessions. It's
a veritable who is who.
We're showing some of the names as well. George Yancopoulos, the Regeneron Chief Science Officer; Hank Paulson, you name it, you have them, and you
raised so much money and you have done over the last seven years.
First virtual one. Talk us through what we can expect and people can still buy tickets.
MOORE: And they can still buy tickets and we're very excited about this. You know, over the last seven years, the conference has helped us raise $45
million in order to fight poverty. It's because, you know, 100 percent of the proceeds go towards the benefit of Robin Hood and go towards this issue
of the poverty fight.
And so yes, it's a chance where you will get a chance to see and hear from everyone from Stan Druckenmiller to Mellody Hobson and Hank Paulson and Ray
McGuire and a collection of others and also to include Robin Hood Board members like Paul Tudor Jones.
It's a chance where for two days, you get not just great investment advice and it's a must-see event for anybody who is putting money in the market,
but also to know that your resources and capital are going directly to the poverty fight. It's going directly to those who need it most.
And so we're thrilled to see as many people, especially now in a virtual environment, where we're excited to invite the world to come join us for
those two days.
CHATTERLEY: Phenomenal, Wes. Good luck next week. I know it's going to be amazing, and come back and talk to us soon and thank you to you and your
team. You're doing an awesome job.
Wes Moore, the CEO of the Robin Mood Foundation, thank you.
All right, still to come, major moves to rein in the power of Google. More details next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. The U.S. Justice Department expected to file a massive lawsuit against Google alleging the company has
stifled competition to maintain its dominant position in search.
Paul La Monica joins me now. We should say Alphabet, but Google is obviously the search function.
Paul, this is massive, the biggest we've seen for what -- two decades. What are we expecting?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, this would be the biggest, Julia, since the landmark case against Microsoft two decades ago.
CNN's Brian Fung reporting that you are going to see the D.O.J. come out with anti-competitive investigation into Google mainly for the search
practices, which is important, of course, because search, despite all the diversification in the broader Alphabet parent company, it really still is
Google and search revenue that drives that train, so to speak.
[09:55:10]
LA MONICA: It's about 85 percent of total revenues, and you know, the government is expected to make the case that Google has stifled
competition, which is bad for other businesses, as well as consumers.
CHATTERLEY: So much of the traffic that no one else can get a look in, quite frankly. What you have to prove in an antitrust case, though, is that
the consumer is harmed and that counter that Google will always put forward here is, it's free.
LA MONICA: That is a great point. And I think that what you are seeing right now is just a possible reconsideration of what really constitutes an
antitrust case in Big Tech.
I mean, you look, also, at companies like Facebook that are really coming under the crosshairs of regulators as well, also a free service, and then
Amazon, Apple, not necessarily free services, but also companies that consumers may not feel that they are being harmed necessarily, but it
really is a case where the dominance of Facebook, Amazon, Apple, and Google may really just stifle competition and be bad for the tech industry writ
large.
That's the case that obviously the government will take. The companies clearly disagree with that notion.
CHATTERLEY: Yes, you don't know what you're missing because you missed it. We'll see.
LA MONICA: Yes.
CHATTERLEY: Paul La Monica, we have to go. We will talk about this again. Strong views on both sides, I can see. Great to have you with us.
Thank you.
All right, that's it for the show. One hour is not enough.
FIRST MOVE is back tomorrow. I'm Julia Chatterley.
Stay safe, and we'll see you tomorrow.
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[10:00:00]
END
