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First Move with Julia Chatterley
President Trump Calling for Last Minute Changes to the COVID Relief Bill; Supply Concerns as U.K. Borders Reopen, Ports are Struggling to Clear the Huge Backlog of Lorries and Trucks, The U.S. Says Hundreds of People could be Infected Already with the New Coronavirus Variant. Aired 9-10a ET
Aired December 23, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:15]
RICHARD QUEST, CNN BUSINESS ANCHOR: Live from New York, I am Richard Quest. Julia Chatterley is off this week. I'm at the helm. And this is your
FIRST MOVE. This is what you need to know.
Aid delay. President Trump is calling for last minute changes to the COVID relief bill.
Supply concerns as U.K. borders reopen, ports are struggling to clear the huge backlog of lorries and trucks.
And COVID warning. The U.S. says hundreds of people could be infected already with the new variant.
It's middle of the week, it's Wednesday. We need to make a move.
A very, very good day to you. This is FIRST MOVE. This last full trading day of the working week on Wall Street and it is an interesting day so far.
The futures are higher despite all the uncertainty about the spending bill and the vaccine and all of those sort of things.
We're up just about a quarter to a third of a percent across the board, but I'm expecting short day -- well short day for the rest of the week, but
thin markets and that gave us weird numbers.
President Trump is demanding that lawmakers rip up the legislation and greatly increase the amount of direct payment checks sent to Americans. He
wanted to go from $600.00 to $2,000.00, even suggesting $4,000.00 and in doing so, calls the spending bill, by the way, one that his officials
negotiated, he calls it a disgrace.
The Democratic House leadership says it's on board with extra aid. Republicans could balk at the cost of the bottom line and that the
Americans may have to wait even longer for needed pandemic relief to arrive, all this after another 803,000 Americans filed for first time
jobless claims last week, numbers out just half an hour ago. It is a drop from the previous reading.
It's still over 800,000 and more than 20 million Americans are still seeking employment assistance.
U.S. futures would be deeply in the red, it is worth mentioning if traders believe this new aid was in real jeopardy. In other words, this is
political posturing, arguably. We'll talk about it in a moment.
To Europe, higher shares. The E.U. and U.K. negotiators still trying to hammer out a Brexit trade agreement. The Irish Prime Minister has warned
that no deal will be a shock to the economic system.
Asia, three greens. Nikkei, Hang Seng, Hong Kong and the Shanghai Composite.
To the drivers of the day. Donald Trump is signaling he might veto the coronavirus relief package. Sarah Westwood is in Washington and joins me.
He hasn't said he will veto it. This is a sort of threat to go back and do it again because he knows, Sarah, if he were to veto it. The majority in
Congress is veto proof.
SARAH WESTWOOD, CNN WHITE HOUSE REPORTER: That's right, Richard, this bill passed overwhelmingly in Congress and both sides of the aisle were shocked
by the President last night because he had ample time prior to the bill's passage this week to weigh in if what he wanted were larger checks.
The $600.00 checks to individuals was the proposal that his own Treasury Secretary brought to Capitol Hill. It's one that Republicans could get
behind those concerned about the deficit. The reason those checks weren't larger is because larger checks couldn't pass Congress, and this bill was
the product of weeks of negotiation.
So a lot of Democrats and Republicans were baffled that the President waited until after a bipartisan agreement was reached and passed, which is
no easy feat for this Congress to weigh in and ask for something that didn't have a chance of passage.
QUEST: And that $600.00 was actually Steven Mnuchin's number. I mean, the President has, I was going to say undercut. He has done more than under. He
is shocked in both feet, and probably an arm as well. His own negotiated it.
So Sarah, with your experience, what's the end game here? I mean, why is he doing it? Is it just to make himself relevant? To make himself part of a
process in the news, as they say?
WESTWOOD: Well, some sources that we spoke with him said that the President was bothered by some of the commentary, the conservative
commentary pointing to items that were in the Omnibus.
Now, remember, the government funding bill was passed at the same time as the stimulus bill and that package was something that weeks ago, the White
House signed off on, the idea of Senate Republicans passing these two big bills this way.
So even some of the things that the President was objecting to that he claims were in the stimulus were actually in a totally separate bill, so it
shows he might not have a very good grasp on what is actually in this legislation, but Republican and Democratic staffers on Capitol Hill, they
tell us, they are hoping this just blows over. That the President wants to sort of demonstrate that he is on the populist side of trying to get people
have more money.
But that the hope is that relief checks can start going out within the next week and that can really only happen if the President signs the existing
piece of legislation that's already passed.
[09:05:29]
QUEST: Okay, so here we have an interesting moment, if you like, to say nothing of the dreadfulness of those people waiting for the help. What is
likely to happen? Is it likely that Congress says, all right, give them another 200 or 300 a week for the unemployment or to give him another 500
on the stimulus checks, let's just get this thing out and done. And if it costs us another couple of billions, so be it. Or will they stare him down,
force him to veto and then override it?
WESTWOOD: Well, House Speaker Nancy Pelosi has already seized on this. She said on Thursday, she is going to bring a bill to the House floor, try to
pass it by unanimous consent that raises that level of for the individual checks to $2,000.00.
That's not very likely to pass because when you're doing it by that method, unanimous consent, any one Member of Congress can object to it, and
Republicans again, we're concerned about putting more money in those individual checks, some of the more fiscal conservatives there.
But this does put pressure on lawmakers. They were trying to sort of go home for the Holidays, wash their hands of this, say they'll pick it up
again and run with the ball again, once the Biden administration is in place.
This sort of puts even some Republicans and some of the President's supporters in a position to have to be defending $600.00 checks that many
critics said were inadequate.
So this is a difficult situation that Trump is putting lawmakers in. But remember, he is not exactly threatening to veto the bill. He is saying he
wishes the checks were higher, but we haven't gotten a veto threat as explicit as say the NDAA or other things the President has threatened to
veto.
QUEST: Sarah, good to see you. Have as much of a festive holiday time as one can in these difficult days.
Now the chaos in Washington couldn't come at a worse time for millions of Americans who are trying to make ends meet. Jobless claims remain near
four-month highs. New poll -- new numbers, sorry -- show personal income and spending falling fast.
Cristina Alesci joins me with well over 800,000. It is not really the headline that's important here, it is the trend. When we look at the trend,
it's still high.
CRISTINA ALESCI, CNN BUSINESS POLITICS AND BUSINESS CORRESPONDENT: That's right. This week continues that troubling trend of more and more people
filing for unemployment benefits for the first time, and we see an elevated number of 803,000.
If you add in all of the special pandemic programs, you're talking about 1.3 million, Richard, which is not what economists wanted to see at this
point in the recovery and this really underscores the fact that we can't have a healthy economy here in the US, when we have new cases averaging
over 200,000 a day. The two are just not possible.
When you look at continuing claims that is the number of people filing initially and then the week after that number is still elevated, over five
million, 5.3 million people. This underscores the need for that stimulus bill without delay, despite what the President is saying.
This is a matter of getting money in the hands of the American people as soon as possible, and those $600.00 checks, although they are not very much
and we have heard from many people around the country who have told us it's not enough, it will help support as you just noted that personal spending
number which is the backbone of the U.S. economy, no doubt about it.
The Biden administration probably wants to do more; whether or not Congress will sign on to that is another question. But also what this report today
shows us is that we are in for a grim January, the monthly unemployment report when we get it in the first week of January and economists are
really worried that we will see the number of jobs actually fall for the first time in this recovery and that would be simply terrible -- Richard.
QUEST: Okay. So if this is the situation and Joe Biden yesterday made it quite clear, he said a down payment. He said, I'm coming back for more in
January. He's put Congress on -- or the new Congress on notice, which again, it really comes down to what happens in Georgia in January, the
Georgia Senate races.
ALESCI: That's correct. People in Georgia will ultimately decide how easy it's going to be to get another round of relief into the hands of the
American people. If the two Democrats win there, then it'll be phenomenally easier for Joe Biden to push a much bigger stimulus and relief bill
through.
What is disturbing here is that this relief bill, not only is it delayed, but if you look at the unemployment benefit of an extra $300.00 a week for
those who are unemployed, that's half of what it was in the spring and if you -- like you and like me -- we've talked to every single economist who
said, those payments were really critical for upholding the economy for these troubling months when we seem to not be able to get the virus under
control.
[09:10:30]
QUEST: Cristina Alesci who is watching over job numbers, thank you.
The border between France and the U.K. has been reopened to some travelers, if they can prove they are COVID negative. Thousands of truck drivers are
now scrambling for tests after days of being stuck on the English side of the border.
Salma is with me at the Port of Dover. All right, let's do the logistics here. First of all, they don't need a PCR, they can have a flow test, which
can be done quickly, and you get the results quickly. But Salma, where are they getting this test in the middle of an airfield?
SALMA ABDELAZIZ, CNN REPORTER: Richard, before we get into the logistics, I just want to tell you where I'm at. Do you hear that sound? That sound is
the sound of protests.
I'm going to just step out of the shot to give you a look. What you're looking at right there is drivers who have been lined up for days. That is
them honking their frustration at the authorities. You can see the police standing there. The port -- the entry to the Port of Dover right now is
closed.
I'm just going to explain to you what's been going on here because we have seen scenes of frustration playing out all day long.
Yes, there is an agreement between French and U.K. authorities to reopen the border. How it is playing out, though, is entirely different. Police
this morning would not allow any truckers to pass. They said no one, even if they have a coronavirus test can pass. Most of these guys do not have a
negative test.
But what happened essentially was, once they got frustrated, we saw dozens of stranded drivers essentially march towards the police line right in
front of the Port of Dover. The police response was to call in more reinforcements and shut down that entry.
We're right in the middle of this standoff right here and they are asking the same questions you are, Richard. How are we going to get tested? How is
this going to work?
Now the police tell us that right where I'm standing here, there should be at some point a mobile testing unit to set up to test all of these drivers.
But at this point, you have some 5,000 drivers at least distributed over, I don't know how many sites all across this region all waiting to get tested
in a safe, efficient, and quick manner. It's a logistical nightmare.
But beyond the logistics, there are people caught in the middle, Richard, who have been living on the streets, living in their vehicles for days now
with no access to food, water, and sanitation.
QUEST: Okay, the situation is pretty awful. But I wonder, Salma, how much of this was inevitable? Once France and the other countries closed their
borders, and once the U.K. had gone into tier four, I mean, what -- this was sort of going to happen.
ABDELAZIZ: Richard, this was always going to be a difficult situation. But I think everyone will tell you, the handling has been entirely wrong.
I'm just going to give you one example. Prime Minister Boris Johnson went on air on Monday when this standoff first started and said there are only
175 truck drivers who are in this one part of the highway and we are going to fix this in a matter of hours.
I'm standing here on Wednesday, days later, no solution. There's not 175 drivers, Richard. There's thousands. Thousands. They don't even know
exactly the full number. They're distributed over all of these sites.
And again, I just want to emphasize, these guys have been living with no sanitation in the middle of a pandemic and it's not just about their health
and safety, it is about the critical job they do, transporting goods, keeping this critical supply line open.
So yes, this was always going to be a difficult situation. But I think anyone can tell you, they could have handled it better than this --
Richard.
QUEST: And I think you raise a very valid point here, Salma. Truck drivers are well used to sitting in long lines, from traffic jams to customs of
ports, to delays because of accidents. They are not -- it is meat and veggies to them to sit for dozens of hours.
However, what we're seeing here by what you're reporting is boiling over into more than just anger.
ABDELAZIZ: It is a lot more than anger. It is a feeling of disenfranchisement. It is a feeling of marginalization. It is a feeling of
exclusion.
Most of these drivers are from Eastern Europe. They're from Romania, Poland, and Bulgaria. They don't even speak much English and they are being
told, oh, get on the N.H.S. website. Get on the National Health Service website and navigate your way through an English website to get a
coronavirus test.
I have heard truck driver after truck driver come up to me and ask me: why are we being treated this way? Why is it that Western Europe gets one form
of treatment and Eastern Europeans get another form of treatment?
This isn't just about sitting in your car for hours, Richard, this is about the feeling that their lives, their families, their access to get home at
Christmas time doesn't matter. It doesn't matter to Britain. It doesn't matter to the international community. It doesn't matter that they're
stranded here without food or water.
They are feeling -- as one man told me -- that they are being treated like animals.
[09:15:25]
QUEST: Salma is at Dover, I'm afraid Salma, you have many more hours ahead of you reporting, but we're grateful that you're there. Thank you.
Now, to the stories making headlines around the world. Hospitalizations for COVID-19 have hit another record in the United States with 117,000 people
on Tuesday. It is the highest since the pandemic began.
And U.S. officials reported 3,400 deaths from coronavirus yesterday. That's the second highest number in a single day. It's about the third or fourth
that's been over 3,000.
And the virus has made its way all around the world, surfacing now on every single continent. Antarctica just recorded its first case, the Chilean Army
says 36 people tested positive on a research base.
Meanwhile, authorities in Central France say a man shot and killed three police officers as they responded to a domestic violence call. It is the
deadliest attack on French security forces in years outside of terrorist incidents. The suspect fled the scene and was later found dead in his car.
Still to come, this is FIRST MOVE. U.S. buys an additional 100 million doses of the Pfizer vaccine as the company tests its drug on the new
variant found in the U.K.
IPO changes are making waves on Wall Street. The Vice Chair of the New York Stock Exchange, John Tuttle is with me about new improved direct listings.
We can all go direct, buy direct, after the break.
(COMMERCIAL BREAK)
QUEST: It is FIRST MOVE. I'm Richard in for Julia who is off this week and we are live in New York.
Stocks on track, higher open. There you have it. The three major indices. The Dow, the S&P -- look at that, pretty much -- the laggard today is the
NASDAQ, but they are reacting calmly to emergency and chaos in Washington. No clarity whatsoever about what happens next in Congress.
[09:20:09]
QUEST: President Trump pulled his support for the newly passed U.S. spending bill and demanding more generous direct payments to Americans.
Worth remembering, he can veto this bill, but Congress probably has enough of a majority to override that veto. This is posturing.
The stakes are very high for the U.S. economy, 803,000 Americans filed for first time jobless claims last week, 12 million Americans could lose
extended benefits the day after Christmas if the aid is delayed any further, which of course, is possible now we've got this wrinkle with the
President.
Personal spending and income in the U.S. fell last month, too, before President Trump signaled he might veto the virus aid package.
United and American Airlines say they plan to bring back thousands of furloughed workers thanks to the bill. The company say the additional funds
pays the workers through to the end of March.
Pete Muntean is at Reagan National Airport at Washington. This is very good news for the thousands of workers who are going to be brought back. They
will get their December pay. I mean, they'll have still lost some money. But Pete Muntean, how long realistically will it last? Can they keep going
when passenger numbers are so low?
PETE MUNTEAN, CNN AVIATION CORRESPONDENT: Well, what you have to consider here, Richard, what a roller coaster these employees have been on since
October when these CARES Act funds ran out even before and now that President Trump has poured cold water on this stimulus plan.
American Airlines has not updated its plan even though the President released that video yesterday saying he would potentially veto this bill,
only after hours after American Airlines told employees yes, it would bring them back from furloughed, 19,000 employees coming back on the job, at
least in theory right now, and that they would get back pay to December 1st.
So it's a real ride these workers are on right now and you really have to feel for them.
QUEST: Let's talk briefly, if we may about transatlantic. The deal that Cuomo did -- Governor Cuomo did with British Delta and Virgin. But still,
you know, there's no direct policy yet coming from the U.S., and when you look at the C.D.C. website, it's all a bit vague about quarantining in
terms of flying across.
MUNTEAN: Well, we know there was a White House meeting, a taskforce meeting about this yesterday, Richard, where this whole idea came up, of
potentially testing passengers coming from the U.K. inbound to the United States for coronavirus.
You mentioned the deal with New York, Delta -- sorry, Delta, British Airways and Virgin Atlantic all now saying they will test passengers as
they arrive from the United Kingdom. Delta is actually doing that at places beyond just JFK, but also in Atlanta.
So this is something where the airlines are really picking up the slack in the void of any new regulations from the Federal government. I asked the
F.A.A. about whether we would consider banning flights much like Canada did, it says it is monitoring the situation. No change yet.
QUEST: Pete Muntean at Reagan National. Thank you, sir.
Now jobless claims remain at near four-month highs and spending and income is down. Jason Schenker is joining me, President of Prestige Economics and
the author of the new book, "After the COVID Vaccine."
I think we'll start with after the COVID vaccine. Because I mean, in any given month, the new sort of agenda like this morning shows, you've got the
President saying one thing and the other. But after the vaccine, what's left? I mean, how much permanent damage is being done, lost productivity
that we'll never get back.
JASON SCHENKER, PRESIDENT, PRESTIGE ECONOMICS: Yes, so that's one of the big things that isn't going to change this labor market dynamic. We are
going to see things get better, but it's not overnight, everyone will suddenly be back at their jobs again. It's going to take time for some
sectors, especially as you've already talked about: tourism, travel, entertainment, leisure, those things aren't going to come back overnight,
because the vaccinations are going to take a little bit of time here to really get to the entire population.
But it's not all negative, though, right? There are some positives that will remain as well.
QUEST: On this number, 800,000 jobs, we are over 800 now for several weeks, I do wonder once we get into January, are you expecting the number
of jobless claims and their rate of unemployment to go back up again as a hard winter bites?
SCHENKER: We could see that. We have seen in the last few weeks. This week, the jobless -- the initial jobless claims fell, but in the last
couple of weeks before that, we've seen either flat or increases across different categories.
So it is possible we'll see things either kind of stay at this level, it could go a little bit higher and most disconcertingly is that 20.4 --
almost 20.4 million Americans who are collecting some level of unemployment benefit right now, it is beyond the headline number. This includes the
pandemic unemployment assistance, as well as other pandemic emergency compensation.
Those numbers make -- 20.4 million is a very big number and it's going to take time for all those folks to go back to work even after the vaccine.
[09:25:24]
QUEST: What does it take, though, in that sense, because there is going to be a change in government and a whole raft of new policies? One assumes
they will be more expansionary -- they will be fiscally more expansionary if the President can get -- the new President can get that through.
But we are looking at it at a higher rate of unemployment for the foreseeable future.
SCHENKER: That's right. We expect it'll take years before the unemployment rate gets back to where it was in 2019. You know, if we think of 2019 as
the old normal and 2020 as the new normal, in 2021, it is going to be some mix of the two, some kind of a new, new normal where it's not as good as
2019 was, but better than 2020 has been.
It's just going to take time. Big tail winds that are positive for the job market. Monetary policy is going to remain very accommodative. Interest
rates near zero from the Fed for years, as well as continuing to buy mortgages and Treasuries and to expand the Fed's balance sheet.
Fiscal policy though still going to be a question on what happens on January 5th in those Georgia Senate runoffs that will determine what
happens for fiscal policy in the year ahead.
QUEST: On this question of interest rates down at zero, they've been effectively down there for the last 10 years and beyond. How difficult is
that making the whole functioning of monetary policy/the transmission mechanism when you effectively have zero interest rates?
SCHENKER: Well, it makes fixed income investments less attractive, that's for sure. And, you know, in the United States, we did see the Fed raise
rates and reduce the size of its balance sheet in 2018 and 2019 and that actually triggered an investment recession last year in 2019 so that by the
end of 2019, the Fed was cutting rates and expanding its balance sheet again.
So you know, we saw already that the Fed had to really be very careful about trying to stop these dynamics and the European Central Bank, they had
tried to reverse the size of their balance sheet. They've been buying stuff. They reduced their balance sheet from 2012 to 2014, and since then,
the European Central Bank has had negative deposit rates for now over six years.
So you've got to be really careful when you expand your balance sheet as a Central Bank and you try to stimulate the economy, it's very difficult to
walk that back or unwind that and it's also true with near zero percent interest rates.
QUEST: Jason, good to have you, sir. I appreciate it. Thank you.
The market opens in just a matter of moments, less than three minutes from now. We are expecting it to be higher, not much, a little bit. We'll have
the details in a moment.
(COMMERCIAL BREAK)
[09:31:18]
QUEST: Welcome back. It is FIRST MOVE. The markets are up and running on the last full day of trading for Christmas. It's an early day tomorrow and
I think they might even -- tomorrow might be the day they are also singing -- well, there won't be singing of "Wait till the Sun Shines, Nellie," but
they might do it visually. We'll find out.
We will ask John Tuttle about "Wait till the Sun Shines, Nellie."
U.S. stocks are mostly higher in early trading as we await more clarity on what comes next in the stimulus drama unfolding in Washington. President
Trump calls the newly passed spending bill a disgrace, and he has raised the possibility he would veto it.
The President wants bigger aid checks sent to Americans. We should know what Congress's next step will be in a matter of hours.
Walmart shares are under pressure. The U.S. Justice Department has filed a civil charge against the retailing giant saying that Walmart filled
thousands of invalid prescriptions for opioids like OxyContin and failed to report suspicious opioid prescription orders.
Walmart says the suit is filled with -- in their words -- factual inaccuracies.
Health experts are pleading with Americans to change their holiday plans. The U.S. is set for another record for COVID-19 hospital admissions.
Researchers are warning hundreds of people in the country may already have the more infectious new strain of the virus.
Our senior medical correspondent, Elizabeth Cohen is here. So two things to talk about. Firstly, Pfizer has done -- excuse me -- has done a deal for
100 million more vaccines for the U.S. government and an option for another 400 million more. What's this all about?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: It's all about getting enough vaccine for everyone who wants it in the United States. And what
Secretary Azar said in a press release that was issued today was he said that these new purchases should give Americans confidence that everyone who
wants a vaccine should be able to get one by June 2021.
He didn't promise anything, but he said that this should give confidence that you can get one if you want one by June. But also note that he said by
June, not right now, not next month, not March, not April, it's going to take a while to vaccinate the entire country, both in terms of getting
enough to do that and in terms of just making it happen.
QUEST: You've been talking to experts who say the new vaccine may not work quite as well against the new variant. We've got two things going on here,
Elizabeth. Every expert that we talk to says no, you know, we're well used to mutations or shifting and new strains and things like that.
The vaccines are powerful enough, but dot, dot, dot, dot. What happens next?
COHEN: Right. So what happens next is they have to study this because this is not just any mutation. This U.K. variant has 17 different mutations, and
we're told that that's an unusually high number. Plus, it's unclear what they will do in combination.
So I have to say that through the months when I've talked to experts about these variants and different strains, they're like, this isn't such a big
deal. This happens all the time. This one is a little bit different.
They're not saying the vaccines won't work, but the experts I'm talking to are saying, it might not work quite as well. Instead of being 95 percent
effective, which is what was found in the clinical trials, it might be 85 percent effective, it might be 80 percent effective.
They don't know, but they are not so convinced that it's nothing.
They think that the vaccine might take a slight modest hit with this variant.
QUEST: Hear me out. So let's assume the vaccination plans go according to plan and by April, May June, those who are not most vulnerable -- the most
vulnerable have been vaccinated.
Even though the virus is still out there, doesn't that mean it will have a less morbid effect on the population?
Sure, there could be some middle aged or younger people who will be hit by it and could perish, but the severity diminishes, even if it doesn't
eliminate it.
COHEN: That's right. The more people we get vaccinated, the better. It protects -- when you get vaccinated, you're not doing it just for yourself,
you're doing it for everyone around you. And second of all, even if this variant or another one that might pop up, you know, in the coming months,
even if the vaccine doesn't work quite as well, even if it just works 80 percent, 80 percent is still spectacular.
[09:35:50]
COHEN: I mean, the F.D.A. was willing to approve a vaccine that only worked 50 percent, so even 80 percent is quite good. Now the CEO of
BioNTech, which is working with Pfizer on their vaccine, he said, look, if there is a variant that isn't working so well with the vaccine, we can
tweak the vaccine. That's actually relatively easy to do.
Now getting that vaccine manufactured and getting that vaccine out that tweaked vaccine, that's a whole other question. But it is good to know that
it is possible to adjust these vaccines so that they will work if there are variants that show up where the vaccine isn't working completely.
QUEST: Elizabeth, thank you. Elizabeth Cohen joining us. President-elect Joe Biden has lashed out at the current President over a massive
cyberattack on Federal agencies. Russia has been linked to the data breach, and President-elect Biden has accused President Trump of downplaying it
all.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT ELECT OF THE UNITED STATES: The Trump administration failed to prioritize cybersecurity. It did that from
eliminating or downgrading cyber coordinators in both the White House and at the State Department. To firing the Director of Cyberspace and
Infrastructure Security Agency, to President Trump's irrational downplaying of the seriousness of this attack.
Enough is enough. In an age where so much of our lives are conducted online, cyberattacks must be treated as a serious threat by our leadership
at the highest levels.
(END VIDEO CLIP)
QUEST: George Kurtz is the CEO of the cyber security technology company, CrowdStrike with me now. All right. This is a grave threat that by all
accounts we don't know the full extent of and we suspect it was Russia. So what do we do now?
GEORGE KURTZ, CEO, CROWDSTRIKE: Well, I think now we have to continue to look through our logs, system files, work with customers and really
understand how this attack unfolded, what potential indicators are out there, and really what the extent of it is.
And it's one of those attacks because of how it unfolded as a supply chain attack that makes it very difficult to really understand the full impact
across the entire landscape.
QUEST: So I mean, what were they after? This is what I can't -- I can understand sort of the Treasury attack, but I can't work out. And anyway,
once they've got in, this volume of data coming back everything from receivable orders to invoicing to e-mails, how do they handle it?
KURTZ: Well, you know, at CrowdStrike, we categorize these attacks into three categories, nation, state, e-crime and hacktivism. This clearly looks
like it's a nation state actor
And in this particular attack, many of the vulnerable versions of software that was out there actually weren't activated.
We believe there's a much smaller population, and it was very targeted in what this adversary was looking for. Typically, they are gathering
information and gathering Intelligence, trying to understand information about a particular target.
Obviously, many government targets are out there, and that information that is collected and used as part of an overall campaign by the adversary.
And you know, the good news about this is we haven't seen any destructive attacks, but it is more information gathering.
QUEST: Right. So how do you stop it? How do -- bearing in mind the number of computers involved and the number of systems involved, how do you root
it out and deracinate it out of the systems?
KURTZ: Well, it starts with having good visibility across your environment, both on your endpoints, your computers, as well as your
network and using things like artificial intelligence to try to root out a very difficult problem because these adversaries were hiding in plain
sight. They were trying to blend in as normal users and it becomes very difficult.
The amount of effort that they went into to hide themselves and blend in is unparalleled. So I think gathering information, understanding activity on
those endpoints and workloads and then using artificial intelligence and behavioral detection to try to identify this is critical.
It's not an easy task, but it's something that the technology industry and the security industry has to continue to focus on.
[09:40:12]
QUEST: I'm not asking you to make a political comment here, I'm asking you for your expertise, as a CEO of a cybersecurity firm. Is Joe Biden right
when he says, the current administration was asleep at the switch?
KURTZ: Like you said, I'm not a politician and what I do know is that both government as well as the private sector have to focus on a very competent
and very determined adversary, and I think this just shows and highlights how determined they are and what needs to be done.
So there is always more that can be done in all areas, and I think it's a wakeup call for lots of folks to understand this level of attack.
QUEST: But George, you say it's a wakeup call, but I don't -- I mean, why were they asleep? Ever since my bank account was hacked, for the last 10
years, we've had every department store, every bank, every institution at some point has been hacked.
KURTZ: Well, obviously, the threat environment continues to evolve and I think how this hack unfolded as a supply chain hack really shed new light
on it. There's always new novel ways that the attacker and the adversaries are targeting systems.
In 2017, we saw a supply chain attack and that was NotPetya that was focused on a particular piece of accounting software. It is very difficult
if the adversary is in a supply chain, to be able to identify that and I think what's novel here is their level of understanding of networks and
their ability to really blend in.
So attacks unfold. The good guys have to understand how they happen. They have to be able to try to create systems to identify and detect against
these and you know, it's -- obviously it's an ongoing effort and the industry learns and I think one of the areas with artificial intelligence
is you have to have the machines continue to self-learn so they can identify and react to these attacks in real time
QUEST: George, it is good to have you. I appreciate it, sir. Thank you.
KURTZ: Thanks.
QUEST: As FIRST MOVE continues, cutting out the middleman. U.S. companies can now go public by selling directly to investors. The Vice Chair of the
Stock Exchange -- New York Stock Exchange, and what it means in a moment.
(COMMERCIAL BREAK)
[09:45:32]
QUEST: U.S. regulators approved a new way for companies to go public, and it's likely to radically reshape the IPO market. Direct listings, it means
companies will be able to sell shares directly to investors instead of having the underwriters and the Wall Street investment banks who stand in
between.
John Tuttle is with me, the Vice Chair and Chief Commercial Officer at the New York Stock Exchange. John, it is good to see a friendly, familiar face
in difficult days. I wish you well, sir. It is nice to have you with us.
Now, so why? I saw Spotify. I know Spotify was the direct listing that sort of was the catalyst. What do you hope direct listings does that the current
system doesn't?
JOHN TUTTLE, VICE CHAIR AND CHIEF COMMERCIAL OFFICER, NEW YORK STOCK EXCHANGE: Oh, Richard, it's great to be back with you and great to be here
at the New York Stock Exchange.
Look, this is a game changer for the capital markets. We've been working for quite some time with different market participants and stakeholders to
create more pathways to the public markets, more tailored to meet company's objectives and providing more access to investors and that's what the
direct listing with a capital raise does.
You mentioned Spotify. That was the first company to pursue a direct listing. Soon followed with Slack, Palantir, Asana, and now what we're
doing is taking the very best of the IPO, which means the ability to raise capital and bring it together with the very best of the direct listing,
like what you saw with Spotify, and the ability to have efficient pricing and democratize access and bringing them together into a new offering.
QUEST: Now, I have railed and fumed for months, if not years, at what I see as the incompetence of the banking system in pricing and the
investment.
Let's take a look. I want to show you three. You know them as well as I do. You've got Airbnb listed at 56, opens at 146, closes at 144 first day.
You've got DoorDash. You've got listing at 102, opens at 182, closes at 189. I mean, you know if this -- these latest examples, bring into ridicule
the whole pricing mechanism and you've got to say to the bankers involved, what were you thinking?
TUTTLE: Well, look for companies that value efficiency of pricing and the ability to raise capital, they now have a new option. We work closely with
the banks. The folks there are the best in the world at what they do. But we can see from time to time, there's often a big dislocation between where
share is priced and where the public values them when they open here on the New York Stock Exchange.
So again, for some companies, the well-worn path of an IPO is still an option, but for those that value the efficiency of pricing with a direct
listing, plus capital raise brings will now have that option.
QUEST: Just a quick -- a couple more quick points. How are you getting -- Spotify was chaotic. It was beautifully chaotic. Don't get me wrong. It had
a wonderful majesty to the process of democratization. But I guess you don't want that every IPO.
TUTTLE: Look, this is about bringing as many buyers and sellers together in one place at one time to find the best price to open a company's stock
and to welcome them into the public markets in a fair, orderly and democratized way and that's what we're doing with the direct listing.
QUEST: One other things, you've asked the DMM -- Designated Market Makers to work remotely. Is this just because of regulation or has there been an
infection?
TUTTLE: Now, look, from time to time, you know, we're going to continue to monitor events here in New York and across the country, and from time to
time, we may dial up or dial back our posture here when it comes to the people we bring into the building and we're following very, very good
safety protocols here.
We want to lead from the front in showing companies how they can bring their workforces back in a safe way. We brought our floor back online in
May. Again, we're going to continue to monitor the events.
So if there is an uptick in the New York area or in other parts of the country, we want to be able to respond accordingly here at the New York
Stock Exchange.
QUEST: John, wishing you, Stacey and everybody in the Exchange and of course, your family a great Christmas and New Year, well, as best as we
could all make it, let's face it, but I do wish you well. Sir, lovely to see you.
TUTTLE: Great to be with you, Richard. Stay well.
QUEST: Thank you. Now, in a moment, it is FIRST MOVE. Elon Musk says he once tried to sell Tesla to the world's most valuable company, but they
didn't answer the phone.
Well, it is a posh way of saying that. What happened, after the break.
(COMMERCIAL BREAK)
[09:52:16]
QUEST: A last look at the U.S. markets in this hour and they are mostly higher, early trading though. Investors ignoring the new stimulus
uncertainty and techs are slightly lower. Let's not get ourselves excited about a drop of 18 points. The S&P is higher for the first time this week,
a good half point.
Our senior writer is Matt Egan. He is with me now. What's the story about Tesla trying to sell itself to Apple and they didn't pick up the phone.
MATT EGAN, CNN BUSINESS SENIOR WRITER: Yes, Richard it's an incredible story sort of another reminder of the incredible rise of Tesla and the near
death experience for this company.
Elon musk sent out a tweet last night, I'll read it to you. He said, "During the darkest days of the Model 3 program, I reached out to Tim Cook
to discuss the possibility of Apple acquiring Tesla for one tenth of our current value. He refused to take the meeting."
Now, Apple has not replied to a request for comment. But what Musk is saying essentially is that he offered to sell Tesla for just $60 billion.
Keep in mind, this is now a $600 billion company. It's worth more than the next seven years combined.
QUEST: Matt, what's the point in Musk doing this other than --
EGAN: I think the point is, you've got to look at the timing of when he did this. He is doing this at a time when Reuters had just reported that
Apple is thinking about developing its own car using new battery technology. That means that Apple, while it may be according to Musk could
have acquired Tesla on the cheap years ago, in the next few years, Apple could actually be a competitor to Tesla. So I think that's why Musk is
bringing this up right now.
QUEST: Right, but it is shocking for us, isn't it? I mean, would you expect Apple to respond?
EGAN: No, I wouldn't expect Apple to respond. And also you know, Musk is also drawing attention to sort of the high wire act that he has at Tesla
and he's talked before about how this company nearly went bankrupt. And perhaps Apple was waiting for it to actually go bankrupt before stepping in
here -- Richard.
QUEST: That's a good strategy if ever there was, wait for it to go bankrupt and then pick it up. Well, they didn't, and they haven't.
Matt, the best to you and the family as always. It's a short trading day tomorrow. So thank you, sir, I appreciate your time and -- well, tomorrow
is just a short day in the market, so there is no FIRST MOVE tomorrow. We've decided to give it a break.
But there is a "Quest Means Business." There's "Quest Means Business" this afternoon in a few hours from now so we need to wrap it up. I will be with
you for QMB at three o'clock Eastern, eight o'clock, nine o'clock, wherever it is in your part of the world.
[09:55:06]
QUEST: Thank you for your time and trouble, on behalf of Julia, whatever you're up to in the hours ahead, to First Movers everywhere, I hope it's
profitable.
(COMMERCIAL BREAK)
MAX FOSTER, CNN INTERNATIONAL ANCHOR: I am Max Foster in London, in for Becky Anderson. Hello and welcome to "Connect the World" beginning here in
the U.K. where coronavirus cases are surging due to the new variant.
We're expected to hear from the U.K. Health Secretary in the coming minutes with new restrictions possibly coming into play. We'll bring you that live.
We've got our cameras up. He is not quite there yet.
As we wait for that news conference, I want to take you to Dover though where there's finally movement of trucks from the U.K. into France, but the
going is really slow and tension is very high.
[10:00:07]
END
