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First Move with Julia Chatterley
U.S. Congress Seeking Compromise with a Smaller Financial Aid Package; Tighter Restrictions for the U.K. Capital as COVID Cases Spike; The E.U. Talks Big Fines and Breakups for Bad Behavior of Big Tech. Aired 9-10a ET
Aired December 15, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:33]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here's what you need to know.
Benefit bargaining. U.S. Congress seeking compromise with a smaller financial aid package.
London lockdown. Tighter restrictions for the U.K. capital as COVID cases spike.
And tech take down. The E.U. talks big fines and breakups for bad behavior.
It's Tuesday. Let's make a move.
Welcome once again to FIRST MOVE. Great to have you with us this Tuesday. It's a day when the science is scintillating and the stimulus signals are,
at least more encouraging than we've seen for a while.
Operation Warp Speed got vaccines to all 50 U.S. states and Puerto Rico in warp speed timing yesterday, brilliantly executed example, I think of
Operation Oomph, an essential part of that plan, the pharmacy giant, Walgreens, they'll be joining us later to discuss all the logistics.
Staying with the science, just released F.D.A. data confirming another vaccine. This time Moderna's vaccine is more than 94 percent effective and
qualifies for emergency use. An F.D.A. panel meets to review the data on Thursday this week, and then Emergency Use Authorization is expected soon
after.
Meanwhile, we may be closer to a D.C. aid deal involving dropping the most contentious parts of that deal, dropping the size of the package, too,
unfortunately. All the details coming right up.
Take a look at what we're seeing for U.S. futures because they are reacting accordingly. The Dow and the S&P are set to recover some of yesterday's
losses as you can see.
Investors pulled out of the economic reopening stocks Monday, piling into some of the tech stocks on fears, I think, of fresh U.S. shutdowns perhaps
even in New York City according to the city's mayor.
Europe, meanwhile, a bit mixed as you can see. Germany and parts of the U.K. entering more stringent lockdowns again tomorrow. Fears now growing of
a double dip recession, possibly in Germany, too.
Compare and contrast this with solid economic data from China overnight. Retail sales there rising, some five percent, the fourth straight monthly
jump in fact and the strongest year -- strongest growth in a year for industrial production. That grew seven percent in November.
China's economy well and truly back to pre-pandemic levels, something we, in the West, can only dream about. And until that comes, people need
financial aid; they need help.
Let's get to the drivers. The stimulus debate is so complex, and so polarizing that lawmakers are now seeing double.
Christine Romans joins me now, sadly, Christine, not double the size, we're talking about two potential deals, dropping some of the more thorny,
contentious parts as we've long talked about. Liability protection for businesses, potentially dropped; also dropping money for state and local
governments, which is a real problem.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: You know, it shows you how these battle lines are drawn just so strongly here, they
haven't been able to cross them. They really haven't.
You know, the Democrats from the beginning have said state and local aid is essential here so that you don't have layoffs of public workers and public
services, things that will happen soon without help.
You know, the states can't balance their budgets. It's not like the federal government, they can just, you know, borrow more money and keep spending in
deficit. That's not what can happen to the states here. So they're going to need money, they're going to need aid. That's what the Democrats believe.
There are Republicans who believe that's just blue state slush fund money. They've already gotten stimulus money. They can just use that.
Also Republicans are very keen on liability protections and there are some Democrats who have said, look at those provisions in those, at least those
proposals and said, wait a minute, we shouldn't be protecting businesses that aren't keeping their workers safe.
We should not give blanket shield liability to companies who are not being frugal and prudent in how they are managing their workplaces in an era of
COVID.
So you still have these two battle lines here that they have not been able to cross.
Now, there is a feeling that with government funding running out, an omnibus bill deadline here on Friday, they'll be able to tack something on
to that to get some relief, but this is not the big bipartisan push that many have been hoping for earlier this summer.
CHATTERLEY: Yes, but we've long said something is better than nothing. And even I know at the U.S. Chamber of Commerce coming out and saying, look, we
were the ones as well that were pushing for those liability protections. Not if you're negligent, but some form of liability protection and then
going ahead and saying, look, just get something done here, which I think makes sense.
And you know, it's Mark Zandi at Moody's who was saying, look, we're already seeing the signs of recession, even if we agree this, we're still
going to have a tough few months and the people that are struggling to feed their families that are going to run out of benefits this month, there's
still going to be a gap here. And you and I've talked about this for a long time, too.
[09:05:33]
ROMANS: You know, the Biden administration, too, is saying that this, whatever happens now is just a down payment on what has to happen next year
as well.
I mean, if you think of it, and I think you agree with me, this really isn't stimulus we're talking about here. This is just stopping the -- you
know, stopping the economy from falling into a double dip recession. It's not necessarily spurring it forward. That's one way to look at this.
Another way to look at it, though I started to hear from deficit hawks again, and I laughed a little bit about this, who, you know, when you were
spending borrowed money to give tax breaks to companies worried about deficits, but now in the middle of a crisis where American families are
really hurting are worried about deficits.
They're pointing out that even this sort of revision now of the $700 billion range, if you got that, that's about the size of the first big
bailout from the -- the only big bailout, right? The original bailout in 2008-2009. Think of that.
So this is still a lot of money, but we're facing a crisis that is bigger than we faced in the Great Recession, much bigger and it's still ongoing.
CHATTERLEY: Yes. And we do agree. Christine, you and I both came into this crisis as conservative economists. And now we're like, just got to make
sure we're in a position to recover. The vaccines are coming, don't beat people up so badly that the recovery takes longer. Yes. Wish we could
disagree, but we never do.
ROMANS: Smart woman.
CHATTERLEY: All right, thank you.
All right, President-elect Joe Biden delivered an emotional call for unity last night after his victory was made official by the Electoral College.
Jessica Dean reports.
(BEGIN VIDEOTAPE)
JOE BIDEN (D), PRESIDENT ELECT OF THE UNITED STATES: The integrity of our elections remains intact. Now, it's time to turn the page.
JESSICA DEAN, CNN CORRESPONDENT (voice over): President-elect Joe Biden speaking directly to the American people after the Electoral College
affirmed his decisive win, delivering his most direct criticism of President Donald Trump's post-election legal challenges.
BIDEN: In America, politicians don't take power, people grant power to them. We now know nothing, not even a pandemic, or an abuse of power can
extinguish that flame.
DEAN (voice over): All states where Trump challenged the vote count, casting their electoral votes for Biden, despite unprecedented efforts from
the President and his allies.
GOV. GRETCHEN WHITMER (D-MI): The people have spoken. It was a safe, fair and secure election.
DEAN (voice over): Addressing Trump directly, Biden called the legal tactics extreme, accusing the President and his legal team of trying to
subvert the will of the people.
BIDEN: The presidency to a candidate who lost the Electoral College, lost the popular vote and lost each and every one of the states whose votes they
were trying to reverse. It's a position so extreme, we've never seen it before.
DEAN (voice over): Still, some Republicans on Capitol Hill refusing to acknowledge Biden's victory. Asked by CNN whether Biden is the President-
elect, Senator Jim Inhofe responding, quote, "I'm not going to comment on that." Senator John Kennedy also dodging saying, quote, "I don't have
anything for you on that."
Senate Majority Leader Mitch McConnell and House Minority Leader Kevin McCarthy have yet to recognize Biden's win as well. One retiring
congressional Republican is changing his party affiliation in the last weeks of his term.
REP. PAUL MITCHELL (R-MI): It became clear to me that I could no longer be associated with the Republican Party that leadership does not stand up and
say the process of the election is over. It's over today.
DEAN (voice over): The President-elect also calling out Republican lawmakers and state Attorneys General after a failed last ditch effort last
week to get the Supreme Court to overturn the results in four swing states.
BIDEN: This legal maneuver was an effort by elected officials and one group of states to try to get the Supreme Court to wipe out the votes of
more than 20 million Americans in other states. The courts sent a clear signal to President Trump that they would be no part of an unprecedented
assault on our democracy.
(END VIDEOTAPE)
CHATTERLEY: Jessica Dean reporting there.
To Europe now where countries are issuing tough new COVID-19 restrictions, all of which come into effect on Wednesday. The Netherlands announced it's
going to go into its strictest lockdown since the pandemic began.
Schools and universities will largely close along with nonessential shops and all public gathering places. Germany will impose a nationwide hard
lockdown that will last until at least the 10th of January after a record number of daily infections and loss of life.
France has implemented a new curfew that will last until at least January the 20th. Meanwhile, in the United Kingdom, London is returning to strict
lockdown as cases in the city and surrounding areas soar. The tier three restrictions begin at midnight tonight. And it comes as the government says
a new variant of COVID-19 has been identified in the South East of England.
Salma Abdelaziz joins us now. Salma, great to have you with us. Just walk us through what these updated and tightened restrictions in London and the
surrounding areas actually mean in practice.
SALMA ABDELAZIZ, CNN REPORTER: Well, Julia after seeing a surge in cases here in London and the surrounding areas, as you mentioned and a rise in
hospitalizations across this area, officials now say this city must go under England's toughest coronavirus restrictions. That means tier three.
That means rules to curb people's social behaviors.
So pubs and restaurants will be shut down. Nightlife will be closed. Households will virtually be banned from mixing together unless they want
to stand in the freezing cold.
But here's the catch, Julia. If you go into Central London right now, all those shops are absolutely packed, shoulder to shoulder. That's not going
to change because all nonessential shops can remain open. Christmas shopping can continue.
And here's the other catch, schools can remain open as well. They only have a matter of days until the Christmas break. But this is concerning experts
because the fastest rising infection rates are among people between the ages of 11 to 18, so students. That's why the government has rolled out a
testing program in some of the most affected neighborhoods here in London.
But a lot of people worry that this isn't enough. You also have a special Christmas time dispensation coming up between the 23rd and the 27th. That
will be a further easing of restrictions -- Julia.
CHATTERLEY: Okay. I'm now really confused, Salma. So it's pubs, clubs and restaurants that are going to close under this tightest tear of lockdown.
But retail, you can still go into shops, you can still shop but you just can't congregate in places perhaps where you'd socialize or eat. Is that
what we're looking at?
ABDELAZIZ: That's exactly what you're looking at. The idea behind these rules is essentially to allow the economy to continue so that businesses
can allow people to shop, Christmas shopping can continue. People can continue spending money while at the same time limiting people's social
behaviors.
The idea is you can't meet your friends at the pub and go drinking, but you can go to the store and buy them a gift -- Julia.
CHATTERLEY: That makes sense. I mean, it's trying to find that balance, isn't it between protecting the economy and trying to keep COVID cases
down? We'll see how well it goes.
Salma, great to have your explanation, to have you with us today. Thank you for that.
All right to East Asia now, also challenged, Japan now has more COVID patients in intensive care than ever before. A new poll shows more than 30
percent of people in Japan saying next year's Olympics should be canceled.
Meanwhile, over in South Korea, the government is considering whether to raise coronavirus restrictions to the highest level. Paula Hancocks has
more from Seoul.
(BEGIN VIDEOTAPE)
PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: There is close to 900 new daily coronavirus cases here in South Korea, officials are seriously
considering raising those social distancing measures to the highest level. Currently, in the Greater Seoul area where the majority of the outbreaks
are happening, it is at 2.5. They are considering raising that to three and if they do, that means that everyone has to work from home, apart from
essential personnel. It means that all schools and all churches go online.
Now, the Prime Minister said they don't want to miss the window for making that decision, but they also don't want to make a hasty decision knowing
the impact that it is going to have on the economy.
Also hundreds of military personnel have been dispatched this week to help centers around the Greater Seoul area and they will start to help with the
contact tracing process.
Now, meanwhile, in Japan, they have just reported their highest number of patients in intensive care since the pandemic began saying it is now at
588. Also this week, they have temporarily canceled the government travel subsidy scheme. This was really an effort to try and convince Japanese
people to travel internally to boost domestic tourism and also to boost the economy. But they have decided to temporarily put that on hold because of
the high numbers that they are reporting from that country.
In addition when it comes to the Olympics, an NHK poll, which spoke to 1,200 people by phone found that 32 percent of those who replied believe
that the Olympics should be canceled. Thirty one percent believe that the Olympics should be postponed again, it's already been postponed from July
of this year to July of next year.
But the interesting figure is, 27 percent of those who replied said it should go ahead. Now just a couple of months ago, in October, that number
was 40 percent. So we're seeing that as the numbers of cases and those in intensive care rise in Japan, then there are more reservations about
holding the Olympics.
Paula Hancocks, CNN, Seoul.
(END VIDEOTAPE)
CHATTERLEY: All right, coming up here on FIRST MOVE, as the first Americans receive the COVID vaccine outside clinical trials, the monumental
task begins of wider inoculations. The man leading the charge at pharmacy, Walgreens joins us next.
Plus, from pharmacies to petrochemicals, the CEO of state-owned Malaysian oil giant, Petronas is on the show later, too.
Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE live from New York where your U.S. stock futures are green. Investors hopeful of a potential aid deal
breakthrough over in Washington, D.C. We've got the S&P 500 set to bounce after what -- four straight losing sessions, right now higher by seven
tenths of one percent.
Small cap stocks and tech continue to advance. The Russell 2000 up more than seven percent over the past month versus a relatively flat performance
actually for the Dow and the S&P 500.
A new Bank of America survey showing that a record 31 percent of fund managers are now in fact long; small cap stocks, the recovery trade. Bank
of America says tech is the major pandemic winner and remains one of the most crowded trades, too, with managers holding on to a mere four percent
in cash.
And speaking of pandemic winners, deal making, too in the pharmaceutical sector today, Eli Lilly buying gene therapy firm, Prevail Therapeutics in a
deal worth more than $1 billion. Prevail shares currently up more than 85 percent. Wow look at that -- premarket.
Eli Lilly also raising its full-year guidance. That stock up some one percent, too.
Now, as you heard earlier, there are also positive developments on the vaccine front this morning. The U.S. Food and Drug Administration, the
F.D.A. says it has no safety concerns about the Moderna vaccine that would stop it from issuing an Emergency Use Authorization.
[09:20:13]
CHATTERLEY: Now, the U.S. pharmacy giant, Walgreens will play a central role in the distribution of vaccines along with rival CVS.
Walgreens will start delivering the drug in nursing homes by Christmas, and next year, vaccinations will be available in 9,000 stores.
We're now joined by Rick Gates, the Senior Vice President for Pharmacy and Healthcare at Walgreens. He's also the pharmacy's COVID-19 vaccine lead
executive.
Rick, fantastic to have you on the show. I think it's safe to say, you guys are the off-site clinic experts. You've done thousands and thousands and
thousands of these over the years.
RICK GATES, SENIOR VICE PRESIDENT FOR PHARMACY AND HEALTHCARE, WALGREENS: Yes, so you know, offsite clinics are something that are very core to what
we've done for both flu, pneumonia and other types of vaccines.
In fact, we've done about 150,000 such clinics over the last five years, a lot of them in long-term care facilities. So although there's some nuances,
this is something we're very, very good at and it's core to what we do.
CHATTERLEY: Talk to me about the nuances here because I think the first thing is the fragility of this particular vaccine when we're talking about
the Pfizer-BioNTech vaccine and the cold storage requirements. What's that meant in terms of pre-planning and getting ready to administer this drug?
GATES: You know, you need to think about the Pfizer vaccine, which does have more challenging storage requirements. But that's something that's
just we've had to plan for. So we are putting out about a hundred ultra- frozen freezers -- sorry, ultra-cold freezers in about a hundred sites across the U.S. and then dry ice as well.
So we're planning for it, and it's all about the storage. Remember, after we store the vaccine, it comes back to preparing and shipping to the long-
term care facilities. That's a pretty standard process, we just have to worry about the storage, which were planned for.
CHATTERLEY: Talk to me about hiring, too, because you've clearly had to ramp up hiring to have people available to administer this vaccine as well.
GATES: Yes, we've been hiring since the beginning of the pandemic, quite honestly. We started when it came with the ramping of COVID testing that
we've done across the nation, 70 percent of those sites have been in underserved areas. So we've been hiring very consistently since then.
I think as you look at broad general vaccine administration, when you come into the spring, we are going to be hiring about 25,000 total team members,
about 9, 000 or so pharmacy team members just to ensure that we're absolutely ready to administer the vaccine in a safe and efficient manner.
CHATTERLEY: Are you struggling to hire that many people? Or is there plenty of people available at this moment?
GATES: You know, I think that we are set to go for long-term care facilities. We're very confident with what we have in front of us. That's
going to start next Monday in earnest. I think as you look to the general population, we have some time to ensure that we are hired up and ready to
go for that time.
CHATTERLEY: How much time do you think we have? I mean, the Health and Human Services Secretary is still saying, look, we can vaccinate a hundred
million people by the end of February. Can you hire enough people? Obviously, it's yourselves and it's CVS that are going to be on the
frontlines of administering these drugs in addition to whatever else that can be done.
Can you get the staff in order to be able to meet that timetable? Assuming we've got the vaccine doses available, too?
GATES: Yes, I would say the first question is going to be when will a vaccine be available and at what quantity? So, I think once we understand
kind of when it's going to be available and in what quantities, you're going to see not just Walgreens or CVS, this is a pharmacy effort. And
we're all going to step forward and ensure that we're ready to help protect Americans across this nation.
CHATTERLEY: But talk to me about education, about concerns. There was a Kaiser Foundation survey done and they released the results just this week.
And they were suggesting, actually that, despite some of the concerns about a broad swathe of skepticism in the United States, actually, according to
their survey, around 71 percent of people are open and willing to get this vaccine, which actually surprised me.
It's significantly higher than the 63 percent that their survey suggested in September. Do we need to see more education? How are you handling that,
too, even as you go into these people's homes and try and provide these vaccine doses?
GATES: Yes, I think vaccine hesitancy is something I think everybody needs to work on and it has to be based in the science and the facts. And so we
will be working closely with C.D.C. and with the manufacturers to ensure that what we're educating the public on is factual and they can understand
what they should expect when they receive the vaccine, and our pharmacists have always been there to really help with any vaccine, let alone the COVID
vaccines and really counsel on what to expect.
If they need to take a Tylenol as an example, for a potential fever and just how they should really feel after taking the vaccine. What we've seen
thus far shows that it was an efficient process to approve and we feel really confident with where we are on the safety protocol with the vaccine.
CHATTERLEY: So what are you actually telling people once you've administered the dose, look, these are some of the symptoms you might
experience. That's okay. That's what you need to expect. Just to give our viewers a sense of what people are being told.
[09:25:07]
GATES: Yes, you know, I think it does come back to the normal response that you get from a vaccine that you're going to get and just letting them
know the timing and expectations for that and how to treat the symptoms. And if symptoms go beyond that, what they should do at that point in time.
You know, look, from a hesitancy perspective, you know, we've had this for vaccines for a long time, you think even to flu this year, we had a record
flu season, and over 50 percent of Americans still didn't receive a flu vaccination.
So I think the question is going to be really important that we've got to educate the public on the importance of the vaccine and how we actually
pivot out of the pandemic, when we get enough herd immunity. I know that you've heard quite a bit about with vaccines administered across America.
CHATTERLEY: The other thing that worries me about this is data and making sure that people come back for the second dose. We were discussing on the
show yesterday, you've got 50 percent efficacy, after the first dose. It then ramps up to the 94 to 95 percent efficacy once you get that second
dose.
Rick, how are you going to make sure that it's perhaps easier if you're going into care homes to go back and do the second dose? But again, when we
get to more broader inoculations, making sure people come back?
GATES: And it's a great question, and quite honestly, series completion, especially on this vaccine is absolutely critical to get maximum efficacy
for the consumer.
So when you look at it, the long-term care facilities, we are going to schedule multiple clinics at that site to ensure that we not only get the
first vaccination, but the subsequent vaccination for anybody that's wanting to get the vaccine. So we feel very confident that we have a plan
in place for long-term care facilities.
When you pivot to the general population, it's still going to be we've got to share information with state registries, which is a requirement for all
vaccines that we do. So a couple of things. One, if you come into Walgreens, we will absolutely ensure that you have a second vaccine
scheduled so that we can get you in that timeline.
Otherwise, we have access to data that would show you what vaccine and what timeline that you got it, whether you're at Walgreens or somewhere else,
and then we can get the second dose in an appropriate fashion.
There are all sorts of reminders and things that we're going to do from calls from pharmacists to text messaging to e-mails to ensure that we have
that second dose and even old fashioned cards will hand out. You know, we need to do everything we can to ensure that that second dose is
administered and we're ready to do that.
CHATTERLEY: Yes, brilliant. Please come back and get the full mandated vaccine requirement. Rick, thank you to you and your team for the work and
thank you for making time for us today. Rick Gates of Walgreens, COVID-19 vaccine lead executive. Great to chat with you, sir. Thank you.
GATES: Welcome. Thank you.
CHATTERLEY: All right, we're counting down to the market open, which is next. Stay with us.
(COMMERCIAL BREAK)
[09:30:47]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running this Tuesday and we are higher, as expected in early trade on stimulus and
science hopes. Newly released F.D.A. data today showing the Moderna vaccine more than 94 percent effective and no safety concerns that would prevent it
from receiving emergency use status later this week.
So fingers crossed on that one. Moderna shares are up some two percent in early trade with their shares rising some 700 percent so far this year.
Wow. And it's not just the science of course, emergency aid talks appear back on track again, a slimmed down bill gaining support in Washington,
D.C. before lawmakers head home for the holidays.
All this, of course, amid new economic fears. U.S. retail sales out tomorrow could show a negative print as more parts of the country announce
fresh rollbacks.
We've got the U.S. Federal Reserve beginning its last policy meeting of the year today, too. A policy statement due out tomorrow. Fed Chair Jay Powell
sure to address the emergency aid situation tomorrow, too. A further nudge from his direction, I'm sure.
Meanwhile, the E.U. putting more pressure on American tech giants, the European Commission is expected to unveil sweeping new regulations
targeting big tech, including Google and Facebook.
Anna Stewart joins us now with the details. So-called gatekeepers, that's what they're going to be called, I believe, Anna, but break it down for us.
Two different acts tackling two different things from the E.U. walk us through it.
ANNA STEWART, CNN REPORTER: Yes, and we're expecting that press conference to start any moment. This will be the latest salvo from the E.U. really in
its big battle against tech, and as you say, it's on two fronts, two separate pieces of legislation.
The first, the Digital Markets Act, now, that will really tackle competition issues, trying to prevent the so-called as you said, gatekeeper
firms like Google and Amazon with big dominance in the market from squeezing out smaller rivals unfairly.
The second the Digital Service Act, quite interesting is going to make large social media firms responsible for harmful content that is uploaded
to their platforms by users with big penalties for those companies that flout it -- Julia.
CHATTERLEY: We're going to pick up on those big penalties in a second. But the U.K. government announcing something similar, the Online Harms Bill, is
that the same thing? Illegal behavior online they're going to crack down.
STEWART: It's interesting, isn't it? The U.K. and E.U. aren't really in harmony when it comes to trade talks, but they are on point today with
this. Yes, this is very much like the second half of the E.U. legislation Online Harms Bill, again, shifting that responsibility onto firms making
them responsible for what users experienced in terms of the darker sides of the web.
CHATTERLEY: You know, we can talk about tech as being too big to fail, we can also talk about them being too big to care, quite frankly. Anna, talk
to me about those big fines. Are they enough to make these Big Tech firms care enough to change their behavior or to act?
STEWART: This is the thing, how big are the fines? And will they actually stop companies in the act because currently, fines takes years and years
and they are very much retrospective.
Now, we're talking about the major fines in terms of the online content legislation, for the E.U., a fine could be up to six percent of global
turnover. And in the U.K., that would be up to 10 percent.
So for a firm like Facebook, that could potentially be a fine of up to $7 billion, so that's pretty sizable. In addition to that, on the E.U. side of
things, there are other penalties. For instance, they could force a company to be broken up within the market. In the U.K., they could simply block a
service from operating in the U.K. altogether.
Before we get too excited, though, Julia, these are proposals. They both have to go through their respective parliamentary processes. And as we
know, that can take months, it can take years. Of course, all of these proposals could get watered down in that process.
CHATTERLEY: What's your bet, Anna? Months or years?
STEWART: I'm going to go for years. Look at Brexit.
CHATTERLEY: Oh my. Yes. Thank you, Anna. Great to have you with us. Sadly, once again on this show, we agree.
All right, moving on. We're learning more today about one of the worst cyberattacks on the U.S. government in years. U.S. officials believe
Russian linked hackers were behind a data breach of multiple agencies, including the Departments of Homeland Security, Agriculture and Commerce.
Well now, "The Washington Post" reports the State Department and the National Institutes of Health were breached as well. CNN tech reporter,
Brian Fung is in Washington. It's all very alarming, Brian. What more do we know about this?
[09:35:18]
BRIAN FUNG, CNN TECHNOLOGY REPORTER: Well, Julia, this is a very concerning attack and let me just explain why in a few brief steps. You
know, first, as you mentioned, you know there are a number of U.S. federal agencies that are affected here, including the Department of Homeland
Security, the Agriculture Department and the Commerce Department and those are just the ones we know about.
As we continue to hear more and talk to more officials, we're going to learn more about what agencies may have been affected by this and you know,
according to experts who CNN has spoken to, a number of agencies were also clients of SolarWinds, the tech company that was at the heart of this
vulnerability, including the U.S. Postal Service, the Centers for Disease Control, the National Institutes of Health.
So there could be a whole range of other agencies involved here that we simply have not confirmed whether or not they were affected. And the
cybersecurity company FireEye, has said that other companies in the tech, telecom, energy and consulting sectors may also have been affected by this
vulnerability.
So overall, a very concerning widespread and potentially historic breach here. Another reason to be concerned about this particular hack is that the
culprit behind it, U.S. officials believe that Russia-linked hackers may have been behind this attack.
It's not just cyber criminals looking for a payday here. We're talking about sophisticated government-linked hackers with a motive to gather
information for unknown ends.
And then finally, of course, Julia, here, the how is really important. This is again, not just your average cybercriminal looking to do a smash and
grab job, taking advantage of indiscriminate targets or indiscriminate methods, you know, to make a bit of money. Here, we're talking about very
specific and targeted attempts to go after, you know, specific victims looking for very specific information using software or malware that was
loaded into these companies via legitimate -- what appear to be legitimate software updates.
So all these companies are doing and government entities are doing exactly the right things, patching their systems, keeping everything up to date,
and they still managed to be able to be breached by this attack, which is partly why it's so concerning.
You know, who else may have been affected by this who were simply doing exactly what they were supposed to do?
CHATTERLEY: I mean, you know when cybersecurity experts like FireEye, who we've had on this show will also say, look, we were hacked, too. You know,
this is a sophisticated operation.
Brian, very quickly, we heard news that Google, YouTube went down yesterday, any connection or are these two separate events?
FUNG: Well, at this stage, there's no indication that these two issues are linked. Google said that its outage yesterday was the result of some
account authentication issues on its end. So far, we've heard no evidence to suggest that Google's outage was related in any way to this SolarWinds
vulnerability.
CHATTERLEY: Perfect. Thank you for being on top of it. Brian Fung, great to have you with us in Washington, D.C. there for us. Thank you.
All right. Up next, the International Energy Agency warns that it will take months before the vaccine rollout begins to boost demand for oil. We speak
to the CEO of Malaysia's state-owned oil giant, next.
(COMMERCIAL BREAK)
[09:41:54] CHATTERLEY: Welcome back to the FIRST MOVE. The International Energy Agency has trimmed its oil consumption forecast for 2021. The agency says
it will be months before we see demand recover with fallout from the pandemic set to last longer than expected.
It's bad news for Malaysia's state-owned oil and gas giant, Petronas, it says volatile prices and low demand make this a challenging environment for
energy companies.
And joining us now is Tinku Mohammed Taufik. He's President and Group Chief Executive Officer of Petronas. Sir, fantastic to have you on the show.
Clearly, it's been a challenging year with the backdrop of the pandemic, not only for energy companies, of course, but also for the nation states as
they try to cushion their economies. What has it meant for your business?
TINKU MOHAMMED TAUFIK, PRESIDENT AND GROUP CHIEF EXECUTIVE OFFICER, PETRONAS: Oh, well, first of all, let me thank you, Julia, for having me.
I think what descriptions can you throw this way to describe the pandemic? Unprecedented. Challenging. Every adjective has been thrown this way, I
think, none have done it justice.
We have really not yet fully fathomed the impact of the pandemic and I think the descriptions we gave in our outlook for the rest of the year are
a fair and fitting description. Indeed, it is going to be very difficult to read the rest of the year for us, and I think even for the next 12 to 18
months, the rest of the industry is still doing a lot of guesswork.
Seventy three million cases, we've got decent recovery rates. Malaysia itself, well, it has been hit quite badly. Our Finance Ministry had
estimated anywhere between $400 million to $500 million of economic activity disrupted on a daily basis when we had the full lockdowns.
Demand all but disappeared, and of course within this region at a time when we were already flushed with product and flushed with natural gas, I think
the world knows the market saw Brent going to $12.00 as far back in April and negative territory for WTI.
Much like every other player, our first paramount concern was to make sure our continuity of operations wasn't put under threat at all. Reliability,
of course, we need to make sure that the lights could still be switched on.
We have 48,000 people in the Petronas family as I like to call it, working with a universe of over 44,000 vendors around our supply chain. Immediately
when the pandemic was declared, of course we hunkered down. Four key focus areas emerged looking at our first of all -- first and foremost, of course,
the safety and the health of our employees.
The corporate command center helped that. We had a pandemic preparedness center response team working to deploy our team and deploy responses as and
when required because it was never going to be business as usual, like getting a team onto an offshore platform working at plants. There's never
going to be the simple same way like we could do it in the past.
Of course, we have to deal with the immediate challenge of liquidity. Customers, counterparts, the entire supply chain had to be deconstructed
and reconstructed, and of course, giving us a lot more of a longer term outlook, we also had to plan already while we were still reeling from the
impact of the pandemic, how we would rebound and recover post the COVID-19 pandemic?
[09:45:18]
TAUFIK: Taking a step back, in consultation with the Board, and the executive leadership team, we decided we had no choice, we needed to do
what everybody else did, but also taking it a step further, reshape our portfolio to respond to what is already an imminent energy transition.
We also realized that given the way that we operate and how we had to respond beyond this pandemic, retooling our human capital equation was
going to be a key part of the solution to remain both relevant and sustainable beyond this current very challenging period. All of this --
CHATTERLEY: Mr. TAUFIK, I'm going to stop you there because you've said so much and there are so many questions that you could have given me while
you're talking.
Just for now, yes, it's brilliant. I mean, it's fascinating to hear, because even just operationally, just protecting your people in this kind
of environment, particularly given how many people you've got in the family, it's huge.
Just in terms of what you're predicting, in terms of oil prices going forward, I believe you're sort of basing it on a $40.00 oil price. Do you
even breakeven at a $40.00 oil price, because I've read over the last five years, you provide the government with what -- 15 percent of their revenue.
So when you're talking about a pivot to cleaner energy, and I totally understand that we've all been sent the message here that that has to be
part of the plan.
How do you balance those two responsibilities, because that takes investment?
TAUFIK: Well, our government is a shareholder and like any shareholder, it wants value creation, and of course, it would like to have returns on a
more regular, more transparent pathway.
I think the challenge is not that far departed from any listed company. I think shareholder advocates or more evangelical shareholders would say, if
you don't have anything to do with the money in hand, give it back to us.
I think in this case, we've been managing the pathway to growth, servicing the returns requirements. We are state-owned, but at the end of the day, we
were incorporated as a company. So value creation remains at the center of our being; that is our reason for being.
And I think at the end of the day, having an outlook $40.00 to $50.00 Yes, we're still breaking even. There are some places, which are very, very
challenging right now, which is why I mentioned earlier, Julia, that looking at our portfolio and reshaping it, making these tough decisions,
drawing a thick red line where certain assets just don't make sense within this foreseeable $40.00 to $50.00 future will need to be real, can we fix
it? Do we reduce our risk and partake of less exposure in it? Or do we divest it outright?
And these are questions which are constantly ongoing, portfolio optimization sounds like a cliche for some businesses, but it is something
that needs to be always something that needs to be always in place.
CHATTERLEY: Which assets do you shed in that environment? Because I couldn't agree more with you, you have to increase efficiency somehow and
you have to do it quickly. Which assets do you shed in this case? And are you already thinking about that? Because you're making investments in
India, I know, and in Singapore in solar.
So you're making investments in the cleaner, energy providers, and technologies. Hydrogen, I know is another one. But what do you shed today,
in this scenario?
TAUFIK: The Board and me have come to a very vigorous deliberation, it's quite clear what we need to retain. Those that clearly make cash flow
positive contribution, those which have a strategic play as part of a larger integrated value chain.
But I think more importantly, a lot of the assets we have in the portfolio will need to give us a clearer pathway to first cash i.e. in our context
plus gas plus oil. We need to make sure that fiscal regime still makes sense for us.
And so the challenge is one where we have to look not only at assets being able to help us from a cost to serve dimension, i.e. getting it to
customers and clients within the market tolerances. You know, it can get extremely challenging when spot prices for natural gas in Asia, where for
the better part of the year, mostly under $4.00 per MMBtu.
We also have to make sure that at a $40.00 to $50.00 scenario, it now also has to be cleaner. Emissions need to be accounted for because customers not
only ask for the cheapest, they're also asking for the cleanest.
So there's already a couple of lenses that we apply in determining what we keep and what we have to either fix or ultimately and then when the hard
decision comes, to divest.
CHATTERLEY: But you're ready to do that and the financials are sound.
TAUFIK: The financials are sounds so far and we do believe that we can withstand the shocks coming. But if this continues, as I mentioned to you,
the sheer scale of economic disruption brought about by a pandemic, believe me, I think I join a litany of many other industry CEOs who really are
praying that the vaccine comes readily accessible next year.
[09:50:23]
CHATTERLEY: I know and as soon as possible. Sir, it's been brilliant to have you on the show. Come back and talk to us soon because we're just
scratching the surface and I know it's challenging. You stay safe, too, and great to have you on the show.
TAUFIK: Thank you.
CHATTERLEY: The President and Group Chief Executive Officer of Petronas. Great to chat with you, sir. Thank you.
You're watching FIRST MOVE. More to come.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. Gaming stocks have been true pandemic winners as we have all turned to various forms of home
entertainment. The industry that was already booming, and the City of Dubai believes demand will only continue to grow as Anna Stewart reports.
(BEGIN VIDEOTAPE)
STEWART (voice over): Dr. Noah Raford's job as Device Futurist-in-Chief is to spot the next big thing in tech. A key role in a city betting big on the
likes of AI, blockchain and VR for its economic development.
DR. NOAH RAFORD, DEVICE FUTURIST-IN-CHIEF, DUBAI: Our job is to help identify what is exciting, what is new, what has potential for device
economy and for device culture and indeed, potentially for the UAE to help advance into the next generation of industry, of society, and of
technology.
STEWART (voice over): Raford is at Dubai's GITEX Conference, the only live in-person tech event of the year, and he is checking out some of the
world's most promising technologies. Everything from autonomous robots to flying vehicles, and virtual reality systems are on display.
But the next big tech to really change our lives, according to Raford is video games.
RAFORD: This might seem strange, why do we think video games are the future? I like to say video games are the New Hollywood because today,
video games are already three times larger than the film, television, and music industries combined.
STEWART (voice over): Video gaming is a $150 billion plus industry with over 2.5 billion gamers worldwide.
RAFORD: Now, that's exciting. But then it gets really exciting when you start to add on in-game economies. Take Fortnight for example, one of the
world's most popular games. It's free to play and yet, every month, it makes hundreds of millions of dollars. Why? What are people doing? They're
buying clothes. They're buying guns. They're buying dances. They're buying fashion.
STEWART (voice over): Some 80 percent of gaming industry revenue comes from free to play games like Fortnight.
Raford says the gaming community has rapidly evolved into more than just a money making machine. It's become a culture where players can meet friends,
express themselves and develop lifelong careers.
Dubai is part of the fastest growing regions in the gaming industry. Raford believes the future potential of gaming will soon disrupt societies and
economies around the world.
[09:55:10]
RAFORD: Ultimately, I firmly believe that the game's economy as in the economy that takes place in games, from fashion to business creation, to
intellectual property generation, to just the exchange of services and goods is going to be as big if not bigger than the physical economy.
STEWART (voice over): It's a growing economy, Raford says Dubai is keeping an eye on and positioning itself to capitalize on in the near future.
Anna Stewart, CNN.
(END VIDEOTAPE)
CHATTERLEY: E.U. watching in windy Windsor to a digital Dubai. We are keeping Anna Stewart busy today.
That's it for the show. You've been watching FIRST MOVE. I'm Julia Chatterley. Stay safe. We'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
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