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First Move with Julia Chatterley
The U.S. Gathers Regional Partners to Talk Tough on China; Calls for a National Lockdown as COVID Cases in Brazil Surge; Europe Facing More Delays in Vaccinating Citizens. Aired 9-10a ET
Aired March 12, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York. I am Julia Chatterley. This is FIRST MOVE and here is your need to know.
Pacific powers. The U.S. gathers regional partners to talk tough on China.
Brazil on the brink. Calls for national lockdown as COVID cases there surge.
Shortages and suspensions. Europe facing more delays in vaccinating citizens.
And do not adjust your screen. It is art, but not as we know it. Christie's CEO explaining why this digital masterpiece is worth $69 million.
Welcome once again to FIRST MOVE. Great to be with you on another day where vaccine news is dominating the agenda. This time, it is Novavax. Remember
we spoke to the CEO last week on Novavax saying that their vaccine has 96 percent efficacy against the original COVID strain, 86 percent efficacy
against the U.K. variant in their late stage trials. No surprise, their stock up more than 15 percent premarket now as we discuss with the CEO, it
is about the quest for approval, so fingers crossed there.
President Biden in then meanwhile issuing his de facto barbeque challenge last night. He wants vaccines available for all Americans by May 1st, and
small groups to meet for the July the Fourth holidays, fingers crossed on that, but what about the rest of the world?
Well, vaccine hopes like that at least and stimulus shocks from either side of the Atlantic powering global stocks yesterday and we are giving back a
little as you can here premarket, why? Well, that's of course, take a look at bond yields have become for much of the week.
Well, now, U.S. yields are back up just shy of that 1.6 percent earlier today, and European yields are higher, too, despite the European Central
Bank's pledge to front load their bond buying purchases.
It is a case of whack-a-mole as far as Central Banks and bond yields are concerned. It is a global story, too.
In the meantime, lots of news out of Asia. Hong Kong taking a hit as the U.S. blasted China for new efforts to weaken their democracy in Hong Kong.
The Hang Seng now down 23 percent from its all-time highs.
China state also fining 12 of its tech firms for what it calls monopolistic behavior, including Tencent, which fell as you can see more than four
percent on fears of a wider Beijing clamp down on its business.
The fines, let's be clear were puny, but the point, I think, is potent, and on that note, in the past hour, the CEO of Ant Group, announcing his
resignation as China moves to limit their company's power in the Fintech space.
Beijing, if you'll remember forcing Ant Group to pull the plug on their expected IPO last year. Simon Hu says he is stepping down because of
Well, there's a lot going on there, too.
All right, there's lots to discuss. Let's get to the drivers.
President Biden currently meeting virtually with members of so-called quad, the leaders of Japan, India, Australia, and the United States strategizing
over regional issues like security trade and recovery from COVID, not to mention how to handle China.
Selina Wang joins us live from Tokyo. Selina, no shortage of issues to discuss, particularly given what we've seen in China in the last 24 hours.
Talk us through the quad meeting.
SELINA WANG, CNN CORRESPONDENT: Julia, absolutely. We are expecting discussion around increasing capacity for COVID-19 vaccines, collaboration
on climate change, as well as securing the Indo-Pacific region.
But of course, the real symbolism here is that these four countries are all increasing their concerns about China's growing assertiveness.
Now, while high level officials from each of the countries have met before, this is the first time that the leaders of these nations are meeting
together in a Summit.
Now, Beijing for its part has denounced the quad as anti-China bloc, as being emblematic of poisonous, cold war mentality.
But in recent months, we have seen relations between China and each of these quad members deteriorate dramatically.
Here in Japan, there is increasing alarm about increasing Chinese military incursions in the disputed East China Sea. When it comes to Australia,
after Australia called for an open investigation into the origins of COVID- 19, many analysts saw China impose what they see as politically motivated sanctions on a variety of Australian commodities.
WANG: And then when it comes to India, China and India tensions have simmered ever since the border crisis.
So it is clear that among these countries, there is a growing cohesion that they need to have joint push back against China -- Julia.
CHATTERLEY: Yes, and the response is, I mean, you called it there, the Chinese Foreign Minister last year calling this an anti-China frontline or
a mini NATO. It reflects America's, quote, "cold war mentality."
Selina, China making it really clear how they feel about not being included in this discussion.
WANG: Absolutely, but experts I speak to say that though this meeting does break new ground, there are limits to what the quad can achieve and that it
is unrealistic this would become a formal institution, that it would become a formal military alliance like NATO.
And part of the reason is that to be effective, analysts say that this needs to be more than a shop to talk about the mounting risks of a growing
China. There needs to be actual concrete action and China state tabloid has called this a flimsy group and that it will ultimately amount to nothing.
The real challenge is that while the quad members all agree that they are concerned about a rising China, they have struggled to find cohesion around
the strategy. They have differing priorities and strategic ties to China.
However, RAND analysts say that if Beijing does step up its military aggression on other countries, we could see this turn into a more robust
military alliance. But what we do know is that multilateral engagement, deep work with allies, is a key pillar of the Biden administration's
strategy in dealing with China.
And what's telling is that next week, the U.S. Secretary of State, as well as the U.S. Defense Secretary will be coming to Japan in their first
international trip, and that means that they're sending a signal that America is back. They are on the side of their allies, and they are not
going to leave them out in the cold -- Julia.
CHATTERLEY: Yes, but the toughest talk here is probably going to be on climate change rather than on China, and that's the bottom line.
Selina Wang, thank you so much for that.
All right, Brazil's richest and most populous state shutting down. The State Governor of San Paulo announced and emergency lockdown on Thursday
and warned that Brazil collapsing under soaring coronavirus cases and deaths.
Matt Rivers is there for us. Matt, great to have you on the show. I read this morning that 22 out of 26 states, the intensive care occupancy now has
surpassed 80 percent. This wave of the virus far worse than what we saw first time around.
MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Yes, you know, the last time I was in Brazil, Julia, was only about six weeks ago and we were in the
Amazonian city of Manaus when a brutal second wave was hitting that city, deaths and cases soaring at the time.
Experts were telling us that it was in part due to gatherings, in part due to a Brazilian variant that all signs point to being more contagious than
previous versions of this virus.
What was happening in Manaus is now basically happening in the rest of the country. You mentioned 22 states where the ICU capacity is at or above 80
percent, just today, that number has actually gone up to 23 of 26 Brazilian states, as well as the country's Federal districts.
So 27 different districts, 24 of them at 80 percent ICU capacity or higher and 11 of them at this point are at 90 percent or higher which puts them at
the risk of collapsing. It is an absolute disaster in Brazil right now.
Just this week, Julia, we have seen two new daily records set in terms of coronavirus deaths recorded in a single day. Tuesday and Wednesday -- it
was on Wednesday, nearly 2,300 deaths were reported in a single day.
And we know, the United States has the most coronavirus deaths cumulatively throughout this pandemic, but Brazil's seven-day moving average, which we
can show you on the screen here, it is trending in the wrong direction. It is obviously going up at the same time that the number of deaths in the
U.S. is going down.
Brazil's seven-day moving average is actually higher than what we are seeing in the U.S. right now, and Julia, despite all of this, Jair
Bolsonaro, the President of Brazil actually told Brazilian people this week, this is not a joke, to, quote, "stop whining."
And he said the biggest risk to the country is due to economic crisis, due to shutdowns, despite the fact that right now, in Brazil, we are in the
worst days of this pandemic indisputably so far.
CHATTERLEY: Yes, Matt, I mean, every nation has faced the balance between lockdowns and economic crisis versus the health implications of this virus.
But there is a middle point, there is wearing masks, there is social distancing, there is behaving responsibly.
The idea of calling people wimps for acting like this, for wanting lockdown measures is crazy to me.
How can you find a balance, and is that balance simply not being found anywhere?
RIVERS: I mean, I think in certain places in Brazil, people are taking this more seriously than others.
But we know for example in Rio de Janeiro -- we are in Sao Paulo right now -- in Rio de Janeiro, there are still bars that are open until 5:00 p.m. I
mean, there is absolutely a need for people to continue to make money, to continue to earn a living. No one is denying that.
But as you say, there has to be a middle ground especially at a time when so many Brazilians are dying every day and it is not going to get better
If you look at the occupancy rates in these ICUs, those are staggering levels across the country. It is really bad at this point, Julia, and I am
not exactly sure especially with the shortage of vaccines in this country how things get better substantively anytime soon.
CHATTERLEY: Yes, you're forced to go into lockdown when your healthcare system is so completely overwhelmed.
Matt Rivers in Sao Paulo, thank you for being there for us and telling the story.
AstraZeneca fights back. The company says there is no evidence that its vaccine causes blood clotting. Several European countries have stopped
using it for now while reports of clots are investigated.
Melissa Bell joins us. Melissa, can you give us any sense of the numbers here because it is actually quite fascinating that AstraZeneca felt the
need today to come out and say, look, we have done big trials and this is not anything that we found to give us concern.
Oh, yes, I think we've lost her there. Well, we shall try and get Melissa back. She looked very beautiful there in her frozen state. We will try and
get her back.
But for now, we shall move on.
All right, let me bring you up to speed with some of the other stories making headlines around the world.
A top U.N. official says Myanmar's deadly crackdown on protesters likely meets the threshold for crimes against humanity. At least 12 more people
were killed by Security Forces, Thursday, according to a watch dog group. It says more than 2,000 have been detained since the coup, many of whose
whereabouts remain unknown.
For the third time this year, there's been a mass kidnapping in Nigeria. Police say, armed men stormed a college in the northwest of the country
early Friday and abducted an unknown number of female students.
One witness says the men made a quote, "beeline" for the girls' hostel, even though the boys' dormitory was closer.
Pakistan has banned TikTok for the second time. A court in Peshawar ordered the ban saying the mobile video app spreads quote, "unethical and immoral
content and is detrimental to youth"
TikTok says it has strong safeguards to keep inappropriate content off the platform.
All right, still to come on FIRST MOVE. The African Development Bank warns of a quote, "lost decade" unless more is done to relieve COVID-19 debt.
And a digital only artwork sells for near $70 million at Christie's. We take a look at the technology behind the newest art craze.
That's all coming up. Stay with us.
CHATTERLEY: Welcome back to FIRST MOVE live from New York where tech stocks are set to open lower. The Dow, however, on target for fresh
records. Call it Freaky Friday on Wall Street.
The Dow and the NASDAQ switching leadership roles once again today, just like Jamie Lee Curtis and Lindsay Lohan in the movie. Yes, it is a Friday
tech volatility, all tied to the bond bungee jump.
Treasuries triangle for much of the week, but they are moving higher today, pressuring rate sensitive tech stocks. Now, speaking of trading places, new
evidence of growing pains in the post Brexit area. U.K. exports to the E.U. plunging more by more than 40 percent in January, in its first month
outside the E.U.
The E.U. imports into the U.K. also taking a hit, down almost 30 percent. The U.K. of course went into lockdown in January, so that also will be
playing into these numbers as well.
Now, AstraZeneca fights back, take two. The company says there's no evidence that its vaccine causes blood clotting. Several European countries
have stopped using it for now while reports of clots are investigated.
Melissa Bell, we hope is back. Will this -- Melissa, are you there -- yes, you are, you're moving. Good.
Talk us through this. I was saying before that -- do you have any sense of numbers here? Because it is quite fascinating to see AstraZeneca come
forward here, and say everybody, this is not what our data suggests is a problem for this vaccine.
MELISSA BELL, CNN CORRESPONDENT: That's right. We have had another statement today explaining that in fact the level of illnesses related to
blood clots was less in the vaccinated population than it was in the general one that in fact, fighting back, as you say, Julia, in favor of the
safety of its vaccine.
Now, in terms of the figures, we do have an idea, because we heard yesterday from France's Health Minister, a number of countries have taken
the other view, continuing to vaccinate with the AstraZeneca vaccine, and France is one of them.
What the Health Minister said was that look, five million Europeans have been vaccinated so far, we are talking about issues with about 30 of them.
Those are the words of the French Health Minister, and yet, of course, on the other side, all of those countries, one after another, Bulgaria the
latest, announcing either that they are stopping, pausing the use of the AstraZeneca vaccine entirely or at least batches of it.
And of course, the consequences of that are twofold, Julia. First of all, there is that ripple effect when it comes to doubts about the safety of the
vaccine. We also heard from Thailand overnight pausing its rollout of the AstraZeneca vaccine as it awaits the results from the European
But the other consequence is, of course, for Europe's vaccination rollout. We have been following these last few weeks, Julia, and as you know, it has
been painfully slow.
This, in terms of one of the three vaccines that are currently available to Europeans, a fourth has now been approved, the Johnson & Johnson, but it
has yet to be delivered to Europeans.
The three vaccines -- of the three vaccines that are currently available, this one is going to be unavailable in a number of European countries. This
will do nothing to help with the vaccination rollout that's been pretty slow area already and already beset by substantial supply issues -- Julia.
CHATTERLEY: Yes, multiple challenges there. Melissa Bell, thank you for joining us and have a good weekend.
All right now, now, onto an exclusive interview on FIRST MOVE.
The African Development Bank unveils its 2021 economic outlook very shortly, and we've got a preview.
The bank sees growth of 3.4 percent in the year ahead, but warns that the continent faces a lost decade unless there is debt relief. It says COVID-19
related spending has swollen many countries' borrowings and without more aid, 39 million Africans are at risk of falling into extreme poverty.
Joining us now is Akinwumi Adesina. He is the President of the African Development Bank. Sir, fantastic to have you on the show. These are
AKINWUMI ADESINA, PRESIDENT, AFRICAN DEVELOPMENT BANK: Good to see you, Julia.
CHATTERLEY: These are devastating numbers. Good to have you with us. These are devastating numbers and just on top of the 39 million Africans that are
at risk this year, we already saw over 30 million Africans falling into extreme poverty in 2021. These are devastating numbers.
ADESINA: Absolutely. You know, I mean, we have never seen anything like this before. I mean, the project last time, we projected last time, it was
minus 2.1 percent. That is the lowest growth rate in 50 years in Africa.
Now, you don't see the variance, but the effects of it, it is just so mind boggling. The GDP of Africa went down by $175 billion. Last year, you know,
we had 30 million people who went into extreme poverty. This year that may continue, it is going to be 39 million people going into extreme poverty.
Hunger and all of that, it has been just quite a lot, and of course, the issue is that's not all just negative that we project that Africa will grow
back. You know, we project 3.4 percent growth back this year, but all of that is conditional on two things: one, is access to vaccines, and
secondly, is the issue of debt.
Now, on the issue of access to vaccines, earlier on this show, I was listening to that, that is actually a big problem for us because we don't
have that luxury.
You know, so far, Julia, 14.6 million vaccines have been delivered in Africa, you know, and people can't even get a shot in their hand. And that
14.6 million is only one percent of what we need actually, and we talk about getting to 60 percent of herd immunity.
So, we are way off mark on that. I think that is very, very important to improve access of Africa to vaccines. We need to have vaccines solidarity.
COVAX is doing a great job, but look, the amounts are still minuscule as far as we are concerned.
We need to actually have global solidarity on this, but more beyond that, we must have also vaccine justice, making sure that everybody has the
Look, Julia, if we deal with this pandemic in one part of the world and we don't deal with other parts of the world, we are all going back to the same
And so absolutely, we must make sure that we ramp up access to vaccine. Africa needs it in quantity, it needs it on time and it needs it at an
CHATTERLEY: Yes, I was going to say, it is the cost of it, too. Just very quickly, in terms of the predictions that you're making for 2021 and you
are anticipating a growth recovery of sorts. How long are you anticipating it takes to get some kind of herd immunity across the African continent?
I know it is an incredibly difficult number to try and predict at this stage, but we are talking years.
ADESINA: Well, the faster we get a vaccine, the better. You know, I just told you that we got only one percent in terms of people getting the jabs
in their hands.
And so, you know, you to get a herd immunity, you need to maybe at 60 percent.
So, you're looking at least 840 million doses. So it is going to take, you know, I don't see that happening for another year or two because of the
slow pace of producing the vaccine and getting them out. It is just going to be very, very difficult and I am quite concerned about that.
And of course, the longer it takes for Africa -- for Africans to get vaccinated, of course, now you see Europe saying you can't travel if you
don't have the vaccine passports, people are going to think Africa is the last zone to get access to vaccines. I don't want that to happen.
So for us at the African Development Bank, we also look at beyond just the current situation, we are looking medium term and also the long term.
I cannot accept that 1.4 billion people have to be running from pillar to post looking for vaccines. We are African Development Bank and therefore
decided that we are going to support Africa to have quality healthcare infrastructure and also make sure that it develops pharmaceutical capacity,
we all will be producing vaccines in Africa, not running for philanthropies.
CHATTERLEY: Yes, and it is not just about the short term to your exact point, it is about building for the medium and longer term, too. Final
question on the shorter term, then talk about what needs to be done by the international community to try and support the continent here.
I read a World Bank report that suggested that during the pandemic, around a third of workers in 15 of the largest nations in Africa stopped working.
It sort of ties not only to efforts to address the pandemic and the healthcare costs and supporting people who aren't working, but what about
risk of social unrest if more isn't done by the international community to support the recovery and a stronger recovery across the continent?
ADESINA: Yes, absolutely, you know, I mean, if you look at it, during the pandemic, everybody was talking about the lockdowns.
The lockdowns had a lot of impact on poor people. Social distancing was impossible because a lot of people were living in very poor neighborhoods,
very poor ventilation.
You know, for many people, they have a risk of dying from hunger than actually from dying from the COVID-19 situation.
And so when people can't have access to food, they don't have access to work because is a day without work is a day without food, you know, and so
that will actually create unrest because citizens get so nervous and so upset, and young people lost a lot of jobs.
And so a lot of work has to be done. So for us, really, it is how do you build back? Making sure you have economic resilience. Of course, doing that
with climate resilience, also make sure that we can secure the health of the population with health resilience.
ADESINA: Now, the political dynamics of this is very important, because when young people can't find jobs, you know, I mean, it can really result
in social, economic and political fragility of countries.
So everything, again, comes right back to making sure that we support African global community rallies around Africa to meet the fiscal deficit
that it has.
You know, Julia, we were looking for $154 billion last year, that was all. You know, developed countries was pouring in trillions of dollars, over $9
trillion, by many countries, but Africa couldn't just get $154 billion. I think there needs to be a total change in that to make sure Africa gets the
resources to expand its fiscal space. And in particular, the issue of debt, because, you know, you can't really run up a hill, you know, with a
backpack, you know, that is full of sand.
CHATTERLEY: And that's exactly where I was going to go next because what we have seen is efforts to delay repayments, and I think the underlying
core messaging in your report is, it's just not enough.
There needs to be debt forgiveness, to allow healthier growth, and at the same time, and I do think this is important, too, a contract between
nations, and those that do agree to forgive some of this debt to say, look, we will reform, we will do things better, we'll tackle things like
corruption, it's got to be a joint decision and a joint partnership to do this.
ADESINA: Now, Africa is not looking for a free pass, you know, we're just looking for an equitable way in which the edges of Africa's fiscal space
actually gets dealt with.
I must really commend the effort, you know, we've been working with G-20 with a debt service suspension initiative, okay, which was done okay for
many African countries.
Well, okay, but that's only about $5.2 billion to $5.3 billion and that did not cover more than $3.4 billion of the amount of bilateral debt that is
actually there, that is quite small. I think that needs to be extended so that the period of deferment continues to be helpful for African countries.
Now, the G-20, as you know, Julia, is actually working on another framework, which will have to include the private corporations because, you
know, the euro bond creditors actually own about almost three and a half -- $337 billion of Africa's $700 billion debt.
So if you're looking for how to resolve that debt, you can do it without getting them involved. Of course, the other official creditors like China
that holds about $14 billion in Africa's debt. So that's good.
But the problem is, immediately countries want to go into that. Of course, we get downgraded by the rating agencies, so nobody is going to take that
Now, what I find very, very useful is what Secretary Yellen, and Kristalina Georgieva, from I.M.F., my sister actually just gave me the SDR, you know,
that they're going to issue $500 billion in new drawing rights at the I.M.F.
Well, that's good, because that $500 million will allow developing countries to have almost $276 billion space, you know, liquidity space, and
almost maybe $25 billion will come to Africa.
But my issue really is we are going to work on that to make sure that that's good and stabilizing your reserves, you know, making sure that your
exchange rates become more stable and you can also go to the capital markets to borrow more money.
But actually, I don't want people going to capital markets to go borrow more money. We've got that right now $377 billion of commercial creditors.
What we should be also doing is making sure we use some of that money to make sure that you can support African countries to pay back the debt, so
we can run faster.
To grow, we've got to grow faster, but we can't do it with that debt over hanging behind us.
And finally, Julia, I think that, you know, to your point on policy reforms, you know, I think it's time really to have an Africa -- a
financial stability mechanism that is actually homegrown that works together to make sure that we mutualize our funds, we make sure we avoid
these kind of spillover effects that comes from global pandemics, or maybe any fiscal shocks that we get, and make sure that the policy reforms, the
macro policy reforms, and also the fiscal policy reforms that we need to do are endogenous, it is done in Africa.
And this is very important, because if you go to capital markets and borrow a lot more money, there are a lot of policy conditionalities that you can
use for anything you want. But I think that's not a prudent way to actually manage debt, and we've got to manage the debt of Africa, and that's exactly
what we are going to do going forward.
CHATTERLEY: I could keep you talking on this for several hours. Come back and talk to us again, please, because there were so many points that you
raised there, including the proportion of debt with China as well that has huge implications going forward.
We will discuss this again, sir. Great to have you on and a fantastic report to read. Tough reading.
ADESINA: Thank you. Stay well, Julia. Thank you.
CHATTERLEY: Thank you. The President of the African Development Bank there.
All right, the market opens next. Stay with us.
CHATTERLEY: Welcome back to FIRST MOVE and U.S. stocks entering the final trading day of the week. The Dow holding up, but we are seeing fresh
weakness in tech as bond yields rise once again.
Lots of churn for the U.S. majors in recent days, though still on target for the best week on Wall Street in more than a month because we've had
some really tough ones. Those $1,400.00 direct payments to U.S. households set to hit bank accounts as soon as this weekend and perhaps that will give
consumers added spending power, pretty soon, new earnings oomph perhaps for U.S. firms, too.
This week's volatility however yet another example of the march madness that has a habit of rattling Wall Street and Christine Romans joins us now.
Christine, Happy Friday. We've made it almost to the end of the week, a volatile week, but a week that has defined a year in terms of the point
that we're at in the COVID crisis, good for investors.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: It's just remarkable to me the context and perspective you can take when you look
over the past year, right?
A year ago, we could never have imagined the Dow would be up 38 percent over the year. We had just had a pandemic declared in this week. We had a
couple of the worst intraday moves we've seen in the Dow and the S&P in history.
The Dow fell something like 2,000 points on one day. We had, you know, triggers -- curbs that were triggered and just really a terrible feeling
for the stock market as we tried to figure out what was going to happen with this coronavirus pandemic, and it ushered in a recession.
But we know that there were green shoots in that scorched earth last spring. And in fact, this firehose of money from the Fed and from Congress
and this amazing scientific progress on vaccines, all of these things really saved the day.
And while Americans have had an unprecedented year, investors -- investors have been bullied all along the way. I mean, imagine the Dow, 38 percent
where we were a year ago this week.
And you know, we had these March panics. I mean, Julia, it was a dozen years ago this week that it was 666 in the S&P. Do you remember the Dow at
6,400? I mean the Great Recession so bad it had its own brand new nickname and the -- what the S&P is up 482 percent since then, so I say don't beware
the Ides of March, buy the Ides of March.
CHATTERLEY: I know. Never bet against the market. I guess that's the moral of the story. If you're a longer term investor, you're going to be fine
Speaking of longer term investing, digital art, Christine, what do you think of paying $69 million or near $70 million for a piece of digital art?
A sign of froth or a sign of a new asset class?
ROMANS: "Je ne peux comprendre." I cannot understand the economics of the art market in normal times, and certainly not in tech bubbly times. I
propose that you and I spend a couple of hours later this afternoon with our laptops and try to figure out something that we can contribute to this
frothy market because that sounds like an easy buck to make in my mind.
CHATTERLEY: I was going to say, it's all Greek to me, but you're going for French, so we will stick with that. Christine Romans, great to have you.
ROMANS: It is an international program, Julia, an international program.
CHATTERLEY: I know, I know and I love it. I really loved it. But actually, we don't have to wait a few hours because we're going to talk about it next
on the show. So stick around, viewers, and Christine, you can listen as well. We're going to do our best. Thank you.
All right, so let's talk about that art. It's an online auction of the artist Beeple, not so many others will never forget.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Millions.
UNIDENTIFIED FEMALE: What?
UNIDENTIFIED MALE: Look at that.
UNIDENTIFIED MALE: Oh my God.
BEEPLE, ARTIST: $69 million. I think it probably means digital artists here to stay.
(END VIDEO CLIP)
CHATTERLEY: Yes. $69 million dollars for digital art.
Welcome to the world of NFT's. The CEO of Christie's, the house that auctioned that art, up next.
CHATTERLEY: Welcome back to FIRST MOVE.
A digital artwork which took 13 years to create sold for nearly $70 million at auction. The piece is called "Everydays: The First 5,000 Days" and is
the work of an artist better known as Beeple who is now the third most valuable living artist behind Jeff Koons and Dave Hockney in the world.
CHATTERLEY: If you look, it's a collage. Every little square is a picture in its own right. But what's also special is that it is so-called NFT and
that stands for Non-Fungible Token, an asset that has been verified using blockchain technology.
Whoa. Stick with me. Let's just take a step back. What does this all mean?
Well, here's a physical fungible item, a dollar is fungible. One dollar, much the same as another. Now here is a non-fungible item. It's an art I
made before the show. It's one of a kind. I know, I know what you're thinking, I've missed my calling.
Now, in the case of the Beeple artwork, we're looking at a digital one of a kind. Now, it doesn't have to be a picture. It could be a GIF for music, or
even a video clip, all authenticated by the creator. That's part of what makes an NFT.
Now Jack Dorsey, the CEO of Twitter is even looking to sell the first ever tweet as an NFT. Why, you might ask? Why bother? Why not just copy and
paste it for free?
Well, by turning my masterpiece into an NFT, I digitize it, I authenticate it, I can sell it and using blockchain technology, I can track who owns it,
and I can even get a cut every time it changes hands. So if you buy it, you have the joy of owning a Julia Chatterley original, and you can store it in your digital wallet or sell it on for a profit once
I'm a world famous artist.
Yes, you could be waiting a while, but joining us now, the CEO of auction house, Christie's that facilitated the Beeple sale, Guillaume Cerruti joins
us now again. Guillaume, great to have you on the show.
I think there's going to be a lot of people out there that are completely mesmerized by what's going on. Just explain why Christie's decided to be
the first auction house to get involved with NFT's and this particular part of the market.
GUILLAUME CERRUTI, CEO, CHRISTIE'S AUCTION HOUSE: Hi, Julia, thank you for having me. Yes, it was yesterday one of these amazing moments, exciting
moments that sometimes we leave on the art market. The last one I remember like this was when we sold the Da Vinci's "Salvator Mundi" four years ago
for a record price.
Yesterday, it was something of the same magnitude. This feeling to discover a new world, and that clearly there will be a before and after. So we sold
yesterday a digital work of art for a record price using the blockchain technology, which provides, as you rightly said, the proof of authenticity
and unicity of the work. That's what happened yesterday.
It's very important to understand that this work, this art community did exist before. But today, the NFT and the blockchain technology together,
give this artist a safer marketplace, because their works, their digital works can be proved as being unique and authentic through the blockchain
And that's why Christie's decided to connect with this art community and the existing platforms to build these auction sale and to, you know, reach
this record price.
CHATTERLEY: And this is the key with NFT's or Non-Fungible Tokens. It's that authenticity, the immutability protections for something that's
digital versus what you would do probably far more easily in the physical art world where you say, look, we've authenticated this. It's far easier to
copy it in the digital world, until this moment where it's now authenticated and stored, to your point using blockchain technology. This
is the difference.
CERUTTI: Absolutely. That's a key difference. And that's what clearly was missing a few years ago. And then today, this market is much safer, and
especially for the artists, they can now create and sell their works in a safer environment where authenticity and unicity and the property of their
work is proved and secure in the blockchain technology.
CHATTERLEY: Okay, so let's just show our viewers the reaction of Beeple when he was watching this auction and then the price was finalized.
(BEGIN VIDEO CLIP)
BEEPLE: I don't even it's -- yes -- I probably should have put all these interviews off a few hours or days or weeks until it was more than like,
oh, what, I don't even know, like I can't even -- it's like an unfathomable number to be quite honest. It's just crazy.
(END VIDEO CLIP)
CHATTERLEY: Yes. He used swear words on Twitter which we won't repeat. Look, this is it. This is the moment where the auction ends and you see him
jumping up and down.
(BEGIN VIDEO CLIP)
BEEPLE: $69 million, I think it probably means digital art is here to stay. I am going to Disney World.
UNIDENTIFIED MALE: Congratulations, you're at $25,250,000. It's crazy, man.
BEEPLE: Jesus Christ. What the [bleep].
(END VIDEO CLIP)
CHATTERLEY: I mean, there are so many pieces to that, "Digital art is here to stay. I'm going to Disneyland." Some people will say this is Mickey
Mouse. Some people will be looking at this going, $69 million.
As the CEO of Christie's that has sold all sorts of art over the years whether its contemporary grandmasters, does some part of you look at this
and go $69 million for this?
CERUTTI: Well, you know, we are used to extraordinary prices for us. So I mean, I think the digital art is here to stay. And it's a new world.
So, of course, this price is extraordinary and it was difficult to predict such, you know, record and price before the auction. But we had absolutely
no doubt that there were real great artists in digital world. They were unknown to the wider world, but they exist, they are real, they are here to
stay. I have absolutely no doubt about this.
And I can also tell you that what we have done yesterday and over the last day with this sale will be repeated. That's the work that we will continue
to explore. We will partner with digital art platform and with artists because it's just connecting two words, the traditional world, the
traditional art market and these digital art market that still existed before yesterday.
What happened yesterday is just that we have revealed this work to the broader world.
CHATTERLEY: And using the crypto space -- did the buyer by the way buy in currency -- fiat currency or in digital coins? Ether? I know you accept
CERUTTI: Absolutely. We have given the option to pay in dollars or in Ether. So he will decide. We are discussing this with him. He has the
choice clearly, all our bidders yesterday, and before had the choice to do this. So yes, absolutely.
Interestingly, there were 33 active bidders in this sale. Thirty were new to Christie's which proves that you know that there is something real here.
We have opened a new -- you know, the door on a new world. Thirty three bidders, 30 were new to Christie's, 24 are aged less than 40 years old.
CHATTERLEY: Did the buyer buy in crypto? Guillaume, can you tell me?
CERUTTI: I think you will. Absolutely. He can and I think he will.
CHATTERLEY: Okay, very quickly, Beeple tweeted out a picture of what looks to be a digitized Mona Lisa, and I just wonder for people like Jeff Koons,
for David Hockney, who also sold physical art. Do you think they come back now and go, you know what, I'm going to digitize my art? Wrap it like an
NFT and sell it.
Do you think these guys will come back to this market and go I'm going to utilize the opportunity and what would that mean for the value of their
physical art, Guillaume?
CERUTTI: Well, they will decide. They are great artists. They will decide the way they want to express their art.
As you know, David Hockney is already using digital tools for his art. He will decide.
But I want to emphasize again that these digital artists have been active, take Beeple, for example, for many years, they have invested these segments
and this technology in this way of creating and expressing their creativity exclusively.
So while others have chosen to express their art in a different way, let's see, if you know, there can be a combination of the two, I don't know,
frankly, but I'm sure that in both worlds, the traditional and the digital world, they are great artists, I have absolutely no doubt about this.
CHATTERLEY: What you're saying is crypto basically unlocked the value and the opportunity by being able to authenticate and protect the intellectual
Guillaume, I have to let you go, but very quickly, I just wanted to get your potential valuation judgment on the physical form of my art or the
digital version of course, too. Do I have potential?
CERUTTI: Well, I didn't know you were also an artist, you are so versatile. I will suggest that you go to MakersPlace, which is the platform
we use and we partner with for this sale, because they will open a crypto space for you where you can sell your art and have it encrypted and
protected through blockchain.
That's my recommendation.
And then maybe one day you will be at Christie's, who knows?
CHATTERLEY: I am so excited. Thank you so much. I feel you're being polite.
CERUTTI: Thank you.
CHATTERLEY: But I am grateful either way. Guillaume, great to chat with you, the CEO of Christie's.
CERUTTI: Thank you, Julia.
CHATTERLEY: Fantastic work. Fascinating 24 hours.
All right, well, FIRST MOVE after the break and I will be here.
CHATTERLEY: Welcome back to the show. Ever heard of the Cloud-Kitchen? Well, with the growing demand for online food delivery, a new business
model is emerging. They cook only for delivery and offer multiple restaurants the flexibility to outsource their food production.
Eleni Giokos shows us one in Dubai as part of our Think Big series.
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT (voice over): It is peak lunch hour in Dubai and the chef's at Kitopi are preparing food for 40
different restaurants simultaneously.
It's a tall order made possible by a high tech commercial space known as a Cloud-Kitchen.
MOHAMAD BALLOUT, CEO AND COFOUNDER, KITOPI Think of it as a kitchen that allows brands to scale up. Our team members are actually the ones cooking
the food on behalf of brands in a shared resource logic.
GIOKOS (voice over): The restaurant industry's next big idea is outsourcing food production to Cloud-Kitchens like Kitopi.
CEO Mohamad Ballout launched Kitopi in Dubai in 2018 to integrate and digitalize restaurants supply chains. Global brands like Papa John's and
Ichiban use kitchens to save money on the physical restaurants and deliver its clients faster.
It all starts with an online order.
BALLOUT: That order goes straight into our kitchen. We cook the foods. We pay the brand a royalty fee and the right to use our brand. Then the
aggregator and 3PL services come in and pick up the order once it's done.
GIOKOS (voice over): Equipped with an in-house both smart kitchen software, Kitopi's Cloud-Kitchens can effectively cook for multiple brands
and process up to 3,000 orders a day.
BALLOUT: The purpose of the software is to solve three key things. From an operating perspective, the quality of food, availability of foods, and
speed of delivering that food.
GIOKOS (voice over): Thanks to license agreements with around 200 restaurant chains, Kitopi uses the same recipes and ingredients to meet
BALLOUT: They want the food delivered fast. They want excellent quality, and it's always a bigger system.
GIOKOS (voice over): This market is expected to grow to $71.4 billion globally by 2027 according to Allied Market Research.
Some brands like New York's Bondi Sushi are also outsourcing to Kitopi to expand in the region with lower costs, a move that's driving Kitopi's
growth in the Middle East.
BALLOUT: Your brand in New York, you want to expand to Dubai, you license your brand out to us. In a matter of two weeks, you're live.
GIOKOS: With smart tech and structured organization, Cloud-Kitchens are becoming the next business model for restaurant brands to keep thriving in
the online era.
Eleni Giokos, CNN.
CHATTERLEY: All right, one last look at the action on Wall Street. Another tale of two markets underway this session.
The Dow filled with reflation firms that will do well as economies improve on track for its fifth straight record close. Small cap stocks also
rallying, too, but tech continues to be where the volatility. It is down some 1.1 percent, this coming, as bond yields continue to rise.
The U.S. 10-year bond yield once again, as you can see above that 1.6 percent touching one-year highs. Look to the bond markets and you'll see
the reaction going on in the stock markets.
That's it for the show. If you've missed any of our interviews, today, they will be on my Twitter and Instagram pages. Search for @jchatterleyCNN.
I'm off to register some digital art. Look, there's my signature.
Stay safe. "Connect the World" with Becky Anderson is next.