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First Move with Julia Chatterley

Scientists Investigating the Origins of COVID seem to Back China's Theories; The Second Impeachment Trial of President Donald Trump Gets Underway; The Tesla Inspired Bitcoin Rally Accelerates. Aired 9-10a ET

Aired February 09, 2021 - 09:00   ET



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

W.H.O. knows. Scientists investigating the origins of COVID seem to back China's theories.

Impeachment Day. The trial of former President Donald Trump gets underway.

And Bitcoin buy-in. The Tesla inspired rally accelerates.

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

Welcome once again to FIRST MOVE. Great to be with you on a very busy Tuesday, a day when the impeachment trial of former President Donald Trump

begins in Washington, D.C., an unimpeachable rally pauses, for now, at least on Wall Street and Bitcoin closes in on the once seemingly

unreachable $50,000.00.

Wow, take a look at that. News of Tesla's $1.5 billion Bitcoin investment continues to push the cryptocurrency higher touching a record $48,000.00

per Bitcoin in yesterday's session. Earlier on, MicroStrategy CEO, Michael Saylor, the crypto enthusiast who indirectly helped fuel the recent rally

joins us on the show later, he is the one who urged Elon Musk to invest in Bitcoin late last year.

Saylor believes other CEOs will now be going crypto crazy with their own cash holdings soon, too. We'll discuss.

Bitcoin not the only asset at record highs though. U.S. stocks there, too, though as you can see, a touch softer premarket. Europe under a bit of

pressure here, too, despite positive December export numbers out of Germany.

Asia though, as you can see having a strong session overnight. Alicia Levine, analyst at the BNY Mellon called it the-everything rally, if you

remember yesterday, fueled by vaccines, stimulus hopes and recovery pricing that all applies to what we are seeing in the commodity sector, too,

whether it is energy, precious metals, coffee, even soybeans all rising in what Goldman Sachs is now calling a new super cycle.

True or false? We'll discuss later on in the show, too. Nothing simple about the outlook though and plenty of trials for the global economy ahead.

But first to one of the biggest unanswered questions out there: how did this all begin?

Well, a team of investigators from the World Health Organization are saying coronavirus is unlikely to have leaked from a lab in Wuhan, China.


PETER BEN EMBAREK, WORLD HEALTH ORGANIZATION: However, the findings suggest that the laboratory incident hypothesis is extremely unlikely to

explain introduction of the virus into the human population.


CHATTERLEY: Nick Paton Walsh joins us now with more. Nick, they also leave open the possibility that it was imported into China. Some eyebrows will be

raised here. Just walk us through the details of what the investigators are saying.

NICK PATON WALSH, CNN INTERNATIONAL SECURITY EDITOR: Yes, I mean, this is a preliminary report and it was one that was read out initially by the top

Chinese official on this joint W.H.O. mission that's been there for 14 days looking at data, going to various sites.

A couple of things we kind of knew, yes, the first one, that it wasn't a lab leak as far as they can see. There was very little evidence of that

from the beginning when it was first started by the then Secretary of State, Mike Pompeo pointing the finger at a leak from a key laboratory in


Also, they do believe the most likely way this got to humans was through what they call an intermediary animal. Now, most scientists think that this

virus originated in some form close to what we have now in humans in bats and then a middle animal, it was infected by a bat and then passed the

virus on to humans.

Those are the things we thought were kind of the case and the W.H.O. mission confirmed, but they spent a lot of time on that stage offering up

versions of what could have happened that were frankly very favorable to the Chinese government.

They were pretty clear in their analysis that they could see little evidence to suggest that the virus initiated in a large form, in a big

outbreak before it was acknowledged by Chinese authorities in December.

There was a suggestion by Peter Ben Embarek, the leader of the W.H.O. mission that there may have been an onset of symptoms in a patient in China

in late November, but he wouldn't go into details there.


PATON WALSH: They also spent a lot of time talking about frozen foods which is extraordinary frankly because it is a key part of the Chinese

government's narrative as to how possibly the disease got into China from outside of it. Let me get to that in a moment.

But the scientists on the stage talked a lot about how frozen foods might possibly in the seafood market in Wuhan that so many talk about as being

kind of Ground Zero for this, they might have played a role in transmitting from diseased animals or possibly even bringing in the virus into the

country from outside, which brings me to the next thing, which came up a few times as well, the possibility that they need to keep looking outside

of China at blood samples or at possible frozen products that may have brought the virus into China.

Now, there is very minimal evidence for that at this stage. So much of the preponderance suggests that this transfer from animals, the intermediary

transfer may have occurred inside of China, but a lot of this discussion focused on what may have occurred that essentially passes the blame to

outside of China.

And so I think a lot of people will look at this preliminary report and say that it tells us a lot of things that we thought, with the case, it

clarifies a bit more about what they now believe perhaps based on the data they have seen to be more likely and it does frankly, China, a lot of

favors too.

It says, they didn't drop the ball by missing earlier signs and it possibly even suggests that frozen food or other possible countries may have been

where this originated and not something that occurred inside China itself. Very interesting early days -- Julia.

CHATTERLEY: Early days for sure, but it is one year after event, it is Chinese data controlled in terms of what we are seeing over there, so there

will be some deep skepticism even given that it is early days.

Nick, great to have you with us. Nick Paton Walsh there on that preliminary announcement there from the World Health Organization.

All right, to a historic day now here in the United States where the second impeachment trial for former U.S. President Donald Trump will begin in a

few hours' time.

John Harwood is in Washington for us. John, and my understanding is first, we have to debate whether it is even constitutional to hold this

impeachment trial. That's where former President Donald Trump's defense is coming from at least.

Harwood: That's the main aspect of his defense and he has the advantage of 45 Republican senators, 45 out of 50, having already voted to say they

think it is unconstitutional to hold this trial, that is the least common denominator objection to what the House Democrats are trying to do in this

impeachment trial and it signals that it's very likely that President Trump is going to be acquitted of these charges.

Now, we do expect that the Republicans making the unconstitutional argument will be defeated today. Four hours of debate and then there will be a vote

and then we will get on to the arguments, the substantive arguments about what the President did not just on January 6 itself, but for a couple of

months leading up to that after the election when he had indicated that he thought the election was stolen, which of course was not true and incited

the opposition, the intensity of that opposition that exploded at the Capitol on January 6 and cost five people their lives that day.

CHATTERLEY: I mean, that's the point. It shouldn't be partisan. It should be bipartisan. We should look at the events of that. It was the entire

nation's Capitol that was attacked that day, but, John, as far as the likely acquittal of President Trump, if we get to the point of the

impeachment trial as you are saying we likely will, that remains the case.

HARWOOD: That's right. Look, this was an attack on American democracy itself and it tells you that so many Republican senators oppose even

holding the trial about how radicalized the party has become.

This is a long-term trend as the Republican Party has locked into a particular demographic, that is the white working class voters that is

shrinking as a share of the population that feels increased fear and anxiety over the fact that the country is changing culturally and

economically. They are trying to resist that.

President Trump tapped that fear, that anxiety and it exploded on January 6 and the Republican Party is having difficulty coming to grips with the fact

that it is positioning itself to some considerable degree at odds with the democratic process itself.

CHATTERLEY: Yes. John Harwood, we'll watch that closely, too. Thank you for joining us.

All right, oil prices rising to their highest levels since before the pandemic began with the global benchmark topping $60.00 a barrel on Monday

and that's not the only commodity making a comeback.

John Defterios joins us. John, great to have you with us. I mentioned the whole host of commodities including precious metals that are making gains

here as well.

Goldman Sachs saying we're at this beginning of another commodity super cycle. What do you make of it?

JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: I think it is a bit premature, but I have to say, Julia, the mood music has certainly changed

really rapidly, right? It's far more upbeat, but there is no consensus out there. This is what I find most fascinating.


DEFTERIOS: Some are just saying this is a normal rebuild after the atrocious 2020 that we saw today. The camp that says this is the beginning

of a super cycle going back to 20 years ago when we had this major demand coming from the developing world and the third camp which is saying this is

a V-shaped recovery as in vaccine-induced recovery, supported by a lot of government spending. This seems to make the most sense.

Just take off the United States, for example, if Joe Biden gets his $1.9 trillion that takes government spending in the United States to $5 trillion

or five times what we saw during the global financial crisis.

We had $10 trillion in the front half of 2020 from the G-7 countries alone. Extraordinary. Then you pick up one commodity, Julia. Let's take a look

back for a year of oil. Right?

We started February of 2020 at $54.00 a barrel. There was some softness. You know what happened. The pandemic set in. We had a price war between

Saudi Arabia and Russia. That played out for five weeks and we went negative on U.S. prices and below $20.00 a barrel for Brent.

But think about it, if OPEC Plus didn't come in with a cut of nearly 10 million barrels and then nearly eight million barrels and they are still

cutting, and then Saudi Arabia added another million barrels for February and March, would we be at $60.00 a barrel?

OPEC sources said, boy, are we happy that Saudi Arabia decided to step up because we don't see the demand just yet, and if you roll back to pre-

pandemic levels, the demand for oil globally was a hundred million barrels a day. We got down to nearly 90, we are around 95 right now.

Most don't think we will get to 100 million barrels until well into 2021 depending how the vaccines go. So I think, calling a super cycle is rather

early indeed.

CHATTERLEY: Yes, it could just be a slow start, John, and then it builds so your point about timing, I think, here is a critical one. But the point

they were making and I do -- if it happens, it does make sense to me is this idea of the energy transition period that we are going into now and

that will create some kind of supply gap and Goldman Sachs is saying we could see $1 trillion to $2 trillion worth of infrastructure spending on an

annual basis over the next decade as we move to things like electric cars, to greater use of solar panels and that will creates demand for raw

materials like copper for example.

I mean, you're the expert on this. Can you envisage that? We have to leap over perhaps the next two to three years before we get into the super

cycle, but that makes sense to me.

DEFTERIOS: Well, I love the way you asked it. It does actually. There are a couple key factors at play here. Let's cover off inflation because a lot

of this could just be a lot of investment funds piling in worried about inflation, so they are going to hard and soft commodities.

Lawrence Summers was talking about the threat. The former U.S. Treasury Secretary looked back at inflation 1980, it was 13.5 percent. Could we get

there again? I don't think so with Janet Yellen as U.S. Treasury Secretary and the Federal Reserve Board being very cautious of not doing that yet

again, right?

But the other one is the lack of investment which is what Goldman Sachs is talking about. We saw that copper is up 40 percent in six months, soybeans

up 50 percent, and you could have a perfect storm of that underinvestment taking place.

Again, if you single out oil, over the last week alone, you saw BP and Total go in together on a wind project in the U.K. We know Shell is getting

out of exploration as well. So there is a shortage of money going in to oil exploration, this will favor those like Russia and the Gulf producers like

Saudi Arabia because of the low cost producers and they are still investing.

But you made a great point here about infrastructure spending. That will help the hard commodities in the future. You need the aluminum and steel

and copper for the energy transition for windmills and the solar panels of the future -- Julia.

CHATTERLEY: I love the way you speak about this in a narrative. John Defterios, oh, get your name right, John Defterios, thank you so much. I

always do that. It's been a while. That's just a cue to carry on more.

DEFTERIOS: J.D. is fine. J.D. is fine.

CHATTERLEY: These are the stories making headlines around the world. The party of Myanmar's deposed leader Aung San Suu Kyi says police shot at

protesters in the capital today seriously injuring two people. Demonstrators across the country defied a new ban on rallies turning out

again to protest the military coup.

A new U.N. report is accusing North Korean hackers of stealing hundreds of millions of dollars in virtual assets last year to fund the country's

missile programs.

It saw that the money was used to pay for nuclear and ballistic weapons and help keep North Korea's struggling economy afloat.

All right, still to come here on FIRST MOVE, testing school pupils across Massachusetts for COVID. I'll speak to the CEO of the company that is

helping schools reopen safely.

And shaping up shipping, the founder of Pandion and why every retailer should be able to ship as fast as Amazon.

Stay with us. We're back after this.



CHATTERLEY: Welcome back to FIRST MOVE live from New York where U.S. stocks look set to pull back slightly from record highs. For all of the

action, look at crypto. No break in Bitcoin's momentum. The cryptocurrency pushing to fresh records fueled by news of Tesla's $1.5 billion investment.

Crypto rival, Ethereum also hitting all-time highs. The broader crypto space rallying, too. Bitcoin miner Riot Blockchain and the investment

vehicle Grayscale Bitcoin Trust all soaring on Monday, too. Wow. Look at those gains.

Credit Michael Saylor, the CEO of business intelligence software firm MicroStrategy with getting Tesla electrified on crypto. Saylor whose firm

currently owns more than two and a half billion dollars' worth of Bitcoin tweeted Musk back in December urging him to sink Tesla's cash into the

alternative currency, too, quote, "Elon Musk, if you want to do your shareholders $100 billion favor, convert the Tesla balance sheet from

dollars to Bitcoin."

That tweet helped lead to Tesla's big disclosure yesterday. Michael Saylor who believes other CEOs will soon follow Musk's high profile lead joins us

now. Michael, fantastic to have you on the show.

How should we view Tesla's decision and what it means for others?

MICHAEL SAYLOR, CEO, MICROSTRATEGY: Well, we're in an environment where the money supply is expanding at 15 percent a year or more and we expect

that to continue for the next four to eight years.

So for corporations that are cash rich, cash is the dilute of asset on the balance sheet. It is losing 15 percent of its purchasing power every year,

so by converting a nonperforming asset into the best performing asset which is Bitcoin, they converted to dilutive asset into accretive asset and it is

really good for shareholder value.

CHATTERLEY: So you're basically saying you prefer to have volatile appreciation versus stable depreciation if the value of the dollar is


SAYLOR: I think that's well put.


CHATTERLEY: But what about the risk profile of Bitcoin? I mean, if you're talking about Treasury Departments for these corporates and Tesla perhaps

is a separate issue, traditionally what they would invest in is short term instruments, hold it in cash because they want to preserve capital.

SAYLOR: You know, the world before March of 2020 was a different world where we had low monetary expansion and high interest rates, and the world

for the next eight to 20 years looks like a world where we are going to have low interest rates, high monetary inflation and it is nearly certain

that cash on the balance sheet is going to lose 75 percent to 80 percent of its shareholder value.

And so switching it out to a digital asset like Bitcoin, which has been going up more than 200 percent a year on average for the past decade, it

might be short term a little bit volatile and certainly it is new as a paradigm shift, but if you're looking out for the long term interest of

your shareholders, I think they would prefer that you double their money every six months than lose 75 percent of their money with a guarantee over

the next eight years.

CHATTERLEY: I mean, do you think the Federal Reserve should be asking big questions of its health here where it is a better investment decision to

invest in an asset that is what -- 13 years old versus something that the government itself issues.

I mean, I know this is part of the thesis why people are getting so excited about Bitcoin and those that believe that fiat currencies are being

debased, but the Federal Reserve surely has to take action here when this is the argument we are making.

SAYLOR: Well, you know, I think the story here is that Bitcoin is digital gold and it is engineered to be like gold, but superior to gold in all

aspects and is also the world's first digital monetary network.

So imagine a block of a billion dollars of gold that moves at the speed of light that you can program a million times a second in order to provide a

framework for the 21st Century finance system.

This is monetary technology and just like all Big Tech, it is making financial systems more efficient. I don't think it is going to replace the

dollar. I think that what is happening is Bitcoin is replacing gold as a non-sovereign store of value running on a Big Tech network.

CHATTERLEY: How quickly do you think other corporates decide to invest in digital assets like Bitcoin? And do you recommend diversifying? It is not

just about Bitcoin, there are other options.

SAYLOR: You know, it took us months to work through the issues and we uploaded our corporate playbook for Bitcoin and open sourced it to the rest

of the world and now, it just takes days.

Last week we had 7,000 different firms attend our Bitcoin for corporation summit. The materials have gone viral with a quarter million or more views

in just a matter of days.

I think a thousand companies adopted Bitcoin as digital gold after March of 2020 and there is a stampede on in 2021, so it's a story you are going to


CHATTERLEY: You know, if I look at you specifically and you are a software company and I look at your share price and I look at the price of Bitcoin

and the two charts basically match, and so I guess a critic would look at this and say, actually your fundamental business now has become a sideline

and you're a digital stock. What would your response be, Michael?

SAYLOR: We have two strategies. One strategy is to grow our software business and that is a good business, it makes a lot of money and it is

growing and our second strategy is to acquire Bitcoin and Bitcoin is the emerging dominant digital monetary network.

It is going to be a hundred times bigger than Google or Facebook and when companies like Amazon plugged into the internet, you know people didn't

say, are you an internet company or a retail company?

I think they are a technology company that embraced the future. Everybody is eventually going to plug into a digital monetary network like Bitcoin

just like everybody eventually plugged into the internet.

CHATTERLEY: But how do these two businesses connect that you're now in?

SAYLOR: Every business has a P&L and it has a balance sheet. And if your balance sheet is sitting in U.S. dollars that are yielding zero interest,

losing 15 percent of their value, they're depreciating.

And so every single business can convert their balance sheet from a depreciating asset to an appreciating asset. That's good for every


So look, if we run a country in Argentina and I told you that the peso was going to devalue against the dollar by 99 percent, every business in

Argentina would be wise to convert their pesos into dollars on the balance sheet for the benefit of their shareholders.

CHATTERLEY: And that's such a great point to make, though I do love how we are comparing the United States now to Argentina.


SAYLOR: Well, you know, every company has a basic balance sheet currency whether it's euros or dollars or something. The difference after March is

that those fiat currencies are weakening at a more rapid rate, in essence.

The cost of capital tripled after March and so, conventional Treasury approaches that worked for a decade have to be reconsidered and why you see

a thousand companies embracing Bitcoin as digital gold.

CHATTERLEY: Yes, it has to be part of your fundamental thinking as a business now. I think you make a great point on that.

Tesla is an S&P 500 company. What proportion of S&P 500 companies do you think switch to putting some of their cash on their balance sheet into

digital assets and over what time horizon? Like when do we get five percent or 10 percent of those companies doing this?

Because it is a shift and it requires Board approval.

SAYLOR: Yes, public companies take longer. Sometimes, they take three to six months depending upon their situation. I think that this is a trend

that is going to run for the next decade and this year, you are going to see many public companies do this.

We saw Tesla, we saw Marathon, we saw Square, and we saw MicroStrategy. I think that you will see double, triple, quadruple that number come and

then, I think, every year that follows traditionally Bitcoin is growing 200 percent to 300 percent a year.

I think if you crank in a 200 percent growth rate across all of the various dimensions of growth, you will see that continue for the next five years

and then it will taper down to 150 and 100 and then 50 and then 30 and then 20. It's a story for the decade.

CHATTERLEY: Yes. How do you manage the quarterly plunge, let's say in digital asset prices because we talked a little bit about the volatility at

the beginning of the interview. If you're a corporate treasurer in a big company that has to manage that cash and perhaps needs that cash, how do

you manage that?

SAYLOR: Well, many, many companies have assets and they don't need them in the coming 12 weeks. They're holding them to capitalize the company. Like

an endowment at a university, you're holding it for the long term benefit of the customers and the shareholders and the employees.

At MicroStrategy, we keep about $50 million in working capital and convert all of our excess cash flows into our primary Treasury reserve asset which

is Bitcoin.

For companies that are cash flow positive, they really don't need ready cash in large quantities because they are generating cash. What they need

to do is to avoid debasing their Treasury at a rapid rate.

If money debases at 15 percent a year and if you generate 15 percent operating income, you're working as hard as you can to general rate nothing

for the shareholders for the year because you're losing as much money in your Treasury as you're actually generating from your business operation.

So this is a cash sweeping into Treasury so that the balance sheet accretes in value instead of diluting in value with time.

CHATTERLEY: Or even just holds flat quite frankly.

SAYLOR: Yes. All these companies -- Apple, Google, Facebook -- they generate massive amounts of cash, so if they take that cash and invest it

in an asset which is losing purchasing power at 15 percent to 20 percent a year, they're destroying shareholder value. They don't --

And by the way, the volatility is only over the course of days and weeks. If you look at volatility with a four-year timeframe or a 10-year

timeframe, the only thing you see is it just going up 200 percent every single year.

CHATTERLEY: And these companies like Apple are putting this money to work in better ways, just, they haven't taking the step into crypto yet. Michael

great to have you with us --

SAYLOR: I would say --

CHATTERLEY: I have about 30 seconds, go on, what were you going to say?

SAYLOR: Well, the traditional approach of companies was to borrow money and generate cash flow and buy their own stock back, but that means they

are decapitalizing their company.

Another approach is to take that money and invest in an asset which is appreciating against their working currency. That provides a much firmer

capital base for the company.

Again, it is like if a university gave its entire endowment away, it wouldn't make it better institution and companies should be building an

endowment, building a capital base so that they can make good on their obligations to their employees and their customers and their vendors over

the long frame of time.

CHATTERLEY: Yes. The Federal Reserve should be shuddering. Michael Saylor, great to have you with us. Thank you so much for joining us and explaining

your thoughts.

The CEO of MicroStrategy there.

All right, the market opens next. Stay with us.



CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running this Tuesday. A little bit of consolidation under way, I think for the U.S.

majors after rising to records Monday.

The bulls proving once again that you don't need GameStop or crypto to boost your portfolio, just a mere S&P 500 index fund will do the trick

these days. I hope I haven't hexed it.

Now, 10-year yield is a bit softer representing today's cautious tone, too, a flight into the quality of bonds. Goldman Sachs now saying that the

recent rise in bond yields, nothing to worry about just yet, it says interest rates would have to go much higher before derailing recent stock

market gains.

And speaking of rallies, a weaker dollar and stronger commodity prices have been boosting emerging market stocks, too. An ETF, an Exchange Traded Fund

tracking the MSCI Emerging Market Index is up nine percent year-to-date, and you can see that on the chart in front of you.

Now, in terms of economic recovery, a question being asked all around the world is how to get children back into classrooms safely?

Well, here in the United States, President Biden called closed schools a national emergency. Yet, testing is one solution and working to provide it

is U.S. biotech firm, Ginko Bioworks.

The company was picked by the State of Massachusetts to provide mass testing to all its public schools every week.

And joining us now is Jason Kelly, cofounder and CEO of Ginko Bioworks. Jason, fantastic to have you with us. Just explain how your mass testing

program works.

JASON KELLY, COFOUNDER AND CEO, GINKO BIOWORKS: Yes. So the core idea, Julia is to test a whole classroom at once instead of trying to test the

students individually, right, and so it's a simple protocol. Students will actually swab themselves, so it takes about 10 minutes for a whole

classroom to do it.

They walk in the front of the room, put like basically a Q-Tip into a tube. The school nurse or administrator comes by, closes the tube, puts in a box,

and scans the barcode, ships it off to a lab, and it takes about 10 minutes in the classroom. It is non-disruptive and importantly, it ends up costing

about 20th as much because you get sort of 20 tests for the price of one. So it is scalable at the level of a state.

CHATTERLEY: And so if the test, that pool test is negative, you can carry on with the class. What happens if there's a positive in there?


KELLY: Yes, so if there's a positive, then you follow up with just that classroom now and test those students individually to determine who is the

positive in the pool -- and then that student would go home and the rest of the class could stay in class. That is a protocol.

Ultimately, schools could choose the best way to handle a positive pool, but we are seeing that done frequently.

In Massachusetts, they are recommending a rapid antigen test, so a test that you get the result in 10 minutes to be done on those say 20 students

to determine who the positive is.

CHATTERLEY: Yes, it is brilliant. What feedback are you having from the schools? Because it is not just in Massachusetts, you are doing this for

all sorts of schools. What feedback are you hearing both from the teachers? Because we hear fear, I think, from teachers that it is okay being in

class, but everyone feels exposed.

KELLY: Yes, this is really important to us, so we wanted to make sure that this wasn't something that would say just work in a suburb of Boston.

So you know, we actually did a nationwide pilot. We tested over a hundred schools, 11 states, including for lower income districts, majority-minority

communities in the U.S.

For example, we did up level schools down in Dallas Fort Worth area in Texas, KIPP in D.C, and it has actually worked really well across a range

of school districts.

I think what people like is they feel empowered, you know, both the students and the teachers. Randi Weingarten who is one of the heads of the

AFT, it is one of the larger teacher union here in the U.S. She wrote an editorial in "U.S.A. Today" with the Rockefeller Foundation just a couple

of weeks ago saying teachers want to come back, but regular testing of students is one of the ways to do that safely.

And so I think this is a really important thing to get right. It has not been an easy time to be an educator in U.S. over the last year, and I think

this is one of that solves to get the schools open.

CHATTERLEY: And just for our international audience as well, the teachers unions in this country are incredibly powerful politically, but also -- and

to your point, they have legitimate concerns about safety at this moment.

What conversations are you having beyond an individual state like Massachusetts? Because if this were widespread, it goes with the point I

made in the introduction here, a national emergency it is, we should be tackling it with mass testing like this.

KELLY: Yes. You know, Julia, I think this is a core issue. Like you mentioned these teacher unions. I think you are seeing really frustrating -

- you know, difficult things, right? Chicago Teachers Union was threatening to go on a strike. There is a number of educators in my family; my mom

teaches at a pharmacy school and my sister-in-law is a PT at a public school district.

This has been the hardest time to be an educator, right, and so the last thing we want to be doing is having fights with teachers unions, right?

The answer is to find a scalable solution and I think what made it hard is people didn't believe there was a way to meet the demands that teachers

want to open schools safely in a way that's was inexpensive and scalable and what Massachusetts is proving is that you can.

And it is not going to be that much. I think in Massachusetts, the Governor's plan will end up being probably you know, 20 million to 30

million to open the schools this spring.

You know, I think if you're a state depending on your size, it is going to be somewhere between five, ten to maybe up to $50 million to do this in the

spring semester. That is in the state budget. That could be done.

I think what's been challenging is there has not been options for people and what we and others like folks at M.I.T. and the Broad Institute have

been proving in Massachusetts is that this approach can actually work at scale and that's sort of the new news.

CHATTERLEY: Yes. This is the key. It is fine having the money and that's hopefully being agreed at the Federal level and will filter down to the

states, but actually having the science in place is the critical part of this as well.

Jason, let's hope, fingers crossed, we can do this more broadly. What about life beyond COVID? Just for normal childhood diseases, things that go into

a classroom and they -- thinks like chickenpox, for example, I think is another one.


CHATTERLEY: Is this a system that could perhaps be used to protect classrooms beyond COVID?

KELLY: I think that's an interesting idea. You know, I don't know. We have been very focused on this just current crisis, right. You know, I think,

you know, COVID is really the thing that is pulling us out of the norm.

I think you could imagine a world like for example, you're seeing this in cancer where you're looking to catch -- the earlier you catch cancer, the

more successful you are at treating it.

So you're trying to see a move where you don't end up with that cancer diagnostic just because you got -- once you've got symptoms, it is sort of

too late. Could you create screening systems to catch that much earlier? Yes, I think absolutely if you have this sort of thing regularly in

people's lives, you could start to look for many more diseases where when you catch them early, it helps.

Cancer is a great example, but so obviously is the case of infectious disease. The earlier you catch it in a school and can pull it out, then the

more limited the impact is.

I mean, we are seeing very low levels, you know, if we look across all of our schools, something like one in 200 kind of prevalence, much, much lower

than what you see at people driving up to the sort of drive-in testing with symptoms, so --

CHATTERLEY: That's such a great point. This -- the data that this is providing is so critical as well to understand what is actually going on in

schools as well and what you're finding.


KELLY: Yes. That's right. It gives them -- and that information for teachers and administrators to -- you know, like the comments we hear back,

it is the first time it felt normal since March, you know, I heard that from a principal of a school recently, right, because they know the level.

You know, other than just being afraid and not knowing what is actually going on, you have the information, you have the data to know, hey, you

know, these classrooms are clear or if there is one, we find who the person is and we send them home so they can be isolated and it works great, right?

And that information is empowering. It is what we are going to need to open our workplaces and schools quickly in this country.

CHATTERLEY: Yes, and get people back to work as well, who are playing the role of carers. Jason, great to have you with us.

KELLY: Yes, I am getting tired of this, I don't know about you.

CHATTERLEY: I am not lucky enough to have children, but yes. Jason Kelly, great to have you with us. Cofounder and CEO of Ginko Bioworks, thank you.

All right, still ahead, we have all heard the expression "to cut out the middleman" but one entrepreneur is embracing that role. Next up, we speak

to the CEO that aims to deliver on deliveries themselves. Stay with us.


CHATTERLEY: Welcome back to FIRST MOVE. Around the world, many of us have found ourselves more aligned on e-commerce deliveries because of COVID-19,

and while Amazon leads the way, one of its former employees has jumped on a gap in the market.

Scott Ruffin is the founder and CEO of Pandion, which works with retailers to get you your parcel as quickly as possible. And thanks to expertise in

logistics and supply chains, and Scott joins us now.

Scott, fantastic to have you with us. Just explain what the vision of the firm is and what makes Pandion unique?

SCOTT RUFFIN, FOUNDER AND CEO, PANDION: Yes, Pandion is the first purpose built shipping network for e-commerce. We are powered by machine learning,

intelligence and data in order to make sure that we can get packages delivered to e-commerce consumers on time much higher percentage at the


We are focused on the middle mile, that portion between where the package originates and right before it gets on the truck that goes to your home.


CHATTERLEY: So explain the data part of this because I do think this is critical. You route packages in real time, rather than deciding look, I am

going to send this package in this manner, and it will get there on this date.

You change your mind in order to be most efficient.

RUFFIN: Yes, absolutely. So go ahead --

CHATTERLEY: No, please.

RUFFIN: Yes, so absolutely. So we are building out algorithms that will allow us to look to see what is happening in the network and how packages

are behaving and make decisions every step of the way to optimize the path of that package.

So it does two things. One, we can make the most economical choice to send it on the path that cost the least amount of money, but in addition to that

and more importantly, it allows us to avoid these hotspots that cause a package to be delayed.

So retailers today, they will promise to a particular day, we are going to deliver your package on Thursday, and when consumers don't get that package

delivered that day, it's a real negative experience and quite frankly, it really hurts their repeat rate and the long term value of that customer.

So by us avoiding those hotspots and those delays by making those optimization decisions every step of the way, we're able to improve that

on-time delivery rate substantially for our customers.

CHATTERLEY: Where do you fit in the market at this moment? I mean, we have got what -- Amazon with 40 percent of the U.S. e-commerce market, you've

got UPS and you've got FedEx and what we've seen throughout COVID is that even Amazon struggled with the demands that they had. UPS and FedEx had to

raise rates.

Where do you see yourself fitting?

RUFFIN: Yes, so we are really providing services for that other 60 percent of the market that's not Amazon. So all consumers, all of those customers

can have the same type of positive delivery experience that Amazon has really set that bar for.

At least traditionally, obviously, there are some parts in COVID where Amazon might have had some delays, but they have really invested to get

that back up to pre-COVID type of levels.

You know, last week, Carol Tome, the CEO of UPS said in her earnings call that in the peak season last year in 2020, there was roughly three million

packages per day of a shortfall between the capacity and the demand that they had available to them.

And that she saw that continuing throughout 2021.

What we are looking to do is to create new capacity and provide an alternative for all of these retailers so they can have the same type of

customer obsessed delivery experience that many of Amazon's customers have.

CHATTERLEY: So I mean, you worked at Walmart, so you're talking like the Walmarts of the world, perhaps Wayfair, Target, for example. You can allow

them to compete with Amazon for the speed of delivery.

RUFFIN: That's exactly right. I mean, there's hundreds of retailers and a variety of different sizes, merchants, and a variety of different sizes

that fall into that 60 percent of the U.S. market that Amazon doesn't own that.

CHATTERLEY: So how many packages can you handle? And is the cost going to be equal?

RUFFIN: Well, yes, so our intent is to have very highly competitive cost points to what the same type of service offering would have with other

players that are out there.

Right now, we are building out the early pieces of the team, the technology et cetera and by the end of this year, our plan is to have a handful of

buildings to cover 30 percent to 50 percent of the U.S. population and roughly five million to 10 million packages per month by the end of 2021

and that 2022 will be a big growth year and we will continue to grow from there.

CHATTERLEY: Wow. And you don't see any slowdown in e-commerce spending?

RUFFIN: No, I don't. I mean, the stat mentioned from Carol Tome in her earnings report last week is a good data point.

You know, in addition "The Washington Post" recently had an article and talked about how baby boomers are now ordering online when they weren't

before, and they don't anticipate that will ever change, and that that will continue post-pandemic.

Our thesis is that, we're going to have significant e-commerce growth on top of that uber level of growth that we had last year in 2020.

CHATTERLEY: Fantastic. Scott, great to have you with us. Scott Ruffin there, the CEO of Pandion. We look forward to watching your progress. Thank

you for joining us today.

All right, coming up on FIRST MOVE, "Chipageddon," automakers being hit by a global chip shortage. That's next.



CHATTERLEY: Welcome back to FIRST MOVE. Japanese automaker, Honda's quarterly profits jumping nearly 70 percent. They also raised full year

profit forecast by more than 20 percent.

On those rosier outlook comes as many automakers idle production lines because of a shortage of microchips as Kristie Lu Stout has been



KRISTIE LU STOUT, CNN CORRESPONDENT: It is so easy to take them for granted. The tiny silicon based semiconductors that fuel our modern lives,

our smartphones, our laptops and our cars.

Now, the average car has between 50 to 150 chips that are used to monitor important engine and safety systems along with GPS and navigation or driver

assistance when you try to parallel park.

But when the pandemic hammered auto sales last year, top chip makers shifted capacity away from car makers to gadget makers resulting in a

critical shortage of car chips that's been called Chipageddon.

EMMANUEL BULLE, SENIOR DIRECTOR EMEA CORPORATES, FITCH RATINGS: One million cars could actually be lost in the coming months. That's quite a


If you take the average value of the car which might be say what -- $20,000.00? $30,000.00 maybe? It would actually lead to about $20 billion

to $30 billion in lost revenue.

STOUT: There is a growing list of automakers cutting production because of the chip crunch.

In Japan, you have Subaru, Toyota, Honda and Nissan; and in the U.S., Ford and GM.

Now, in a statement GM says this, quote, "Despite our mitigation efforts, the semiconductor shortage will impact GM production in 2021. We are

currently assessing the overall impact, but our focus is to keep producing our most in-demand products."

As the chip crunch disrupts production, analysts say it may delay a global recovery in the auto sector. U.S. senators are urging the White House to

take action.

In a letter sent earlier this month, 15 U.S. senators from auto producing states warned that the shortage threatens our post-pandemic economic


It's also a diplomatic issue. To resolve the shortage, the U.S. is working with Taiwan, home of TSMC, the world's largest contract chipmaker.

The Taiwan chip giant says, the auto chip shortage is its top priority saying this, quote: "TSMC is currently expediting these critical automotive

products through our wafer fabs. While our capacity is fully utilized with demand from every sector, TSMC is reallocating our wafer capacity to

support the worldwide automotive industry." Unquote.

As Taiwan pledges help, a warning from the other chip making giant in Asia. Samsung Electronics says the auto chip shortage could hit smartphones and

if you're planning a new purchase, consider this.

BULLE: If you need something, just buy it now if it is on stock, otherwise, unfortunately, you will have to wait another three to six months

according to our latest working estimates.

STOUT: Huge ripple effects are being felt across tech, auto manufacturing and the global economy all from a tiny piece of silicon.

Kristie Lu Stout, CNN, Hong Kong.


CHATTERLEY: And finally, the chance to walk in presidential shoes, literally. Well, that's if you happen to have a mere $25,000.00 going spare

that is.


CHATTERLEY: Sotheby's is offering collectors a slam dunk of an opportunity selling these Nike sneakers, trainers, created exclusively for Barack


This is the sample pair. The only other pair actually being owned by the former President and these are in pristine condition.

The shoes were created back in 2009 recognizing Obama's love for basketball.

If you're interested, they are U.S. size 12.5 and will go on sale on Friday. Maybe a nice gift perhaps for Valentine's Day. Ouch.

All right, that's it for the show. I am Julia Chatterley. Stay safe. "Connect the World" with Becky Anderson is next.