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First Move with Julia Chatterley
Unrest in Israeli Cities as Jewish and Arab Citizens Clash; President Biden Calls for Calm; Elon Musk Abandons Plans to Accept Crypto for Cars. Aired 9-10a ET
Aired May 13, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:34]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
Riots and violence. Unrest in Israeli cities as Jewish and Arab citizens clash.
Diplomatic dialogue. President Biden calls for calm.
And Bitcoin backtrack. Elon Musk abandons plans to accept crypto for cars.
It's Thursday. Let's make a move.
And welcome to the show and we begin once again with breaking news from the Middle East.
A new front opening up in the escalating conflict between Israel and the Palestinians. Mob violence between Arabs and Jews erupting in some of the
country's mixed cities overnight. Deadly exchanges of rocket fire and airstrikes carrying on into Thursday. The violence has now killed 83
Palestinians and injured almost 500, and at least seven Israelis have died and over 200 wounded.
Hadas Gold joins us now live from Tel Aviv. Hadas, just explain exactly where you are, and what you are seeing for us, please.
HADAS GOLD, CNN CORRESPONDENT: Well, Julia. I'm in northern Tel Aviv, and throughout the day, Tel Aviv has actually experienced its own air raid
sirens. We are actually about to report a few hours ago and right before we went live, we heard those air raid sirens and had to run into this parking
garage where I'm standing.
This is actually the location of where a rocket fell overnight. You can see the impact here, just how big of an impact this rocket had. The sound
booms, the impact, the shrapnel breaking windows of the buildings around us, and balconies, and you can see through the garage here hitting cars,
destroying several cars all around us.
It just goes to show you how dangerous these rockets are. It's one of what the Israeli military says are 1,600 rockets they say have been fired from
Gaza into Israel. The Israeli military responding with airstrikes targeting more than 600 targets. They say that they have killed several, more than a
dozen senior Hamas operatives and as you noted in your introduction, the death toll is mounting on both sides.
It's a really intense situation, it is an escalating situation. It doesn't seem to be calming down any time soon. The residents here as far north of
Tel Aviv are not used to receiving these rocket barrage, they are not used to hearing these air raid sirens and they have been spending the last few
days running back and forth to their bomb shelters.
And we should keep in mind that the residents in Gaza often don't have the bomb shelters to run into when the Israeli military strikes. Now, the
Israeli military says that they are specifically striking militant locations that they take any reports of civilian casualties very seriously,
but what I want to note, Julia, is that we seem to be at a new level here because rockets hitting northern Tel Aviv, and the leveling of buildings in
Gaza that we've seen Israel doing is all saying that they leveled buildings that they say hosted important Hamas offices.
That happened at the end -- towards the end of the last conflict that we saw -- a major conflict we saw in 2014. We seem to still be sort of in the
beginning stages of this conflict and that seems to be where we're starting from.
CHATTERLEY: Well, the world is watching and fearful that this escalates further, Hadas. Prime Minister Benjamin Netanyahu, the Israeli Prime
Minister said what we are seeing in terms of the violence in the cities, too, and I alluded to this at the beginning as well is anarchy and it is
unacceptable whoever the target is.
Just talk through some of the clashes that we've seen in some Israeli cities over the last day or so as well.
GOLD: This is a -- yes. This is a really worrying new development here because it seems as though the tension has spread from East Jerusalem, of
course, down to the actions we're seeing with Gaza, but then also too these mixed communities within Israel where Arabs and Jewish residents live
amongst one another, and we have seen some really horrifying videos and hearing horrifying reports of mob violence both Jewish on Arab, Arab on
Jewish and it is really frightening for a lot of people here that that it has reached these level of tensions that they have not seen in many of
these places for several years.
These are communities like Lod, like Bat Yam, like Acre. These are communities that for some time have lived peacefully, Jewish with Arab,
Arab with Jewish, and now they are seeing this mob violence which is really unsettling for a lot of people here in addition, of course, to the rocket
attacks that we are seeing and as you noted, Prime Minister Benjamin Netanyahu putting out a statement saying that he doesn't care if anybody's
blood is boiling, that you cannot take action into your own hands and saying it's not acceptable. Whoever is doing it that this violence is not
acceptable.
[09:05:14]
CHATTERLEY: Hadas, thank you for joining us this morning and stay safe, please. Hadas Gold there.
All right, on Friday, the U.N. Security Council will meet to discuss the hostilities.
Meanwhile, U.S. leaders have reached out to both the Israeli Prime Minister Benjamin Netanyahu and Palestinian authority President Mahmoud Abbas to
urge them to de-escalate the violence.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: My expectation and hope is that this will be closing down sooner than later, but Israel has a right to
defend itself when you have thousands of rockets flying into your territory, but I had a conversation for a while with the Prime Minister of
Israel, and I think that -- my hope is that we'll see this coming to a conclusion sooner than later.
(END VIDEO CLIP)
CHATTERLEY: John Harwood joins us now from Washington. John, much was made here that it took President Biden four weeks upon entering the White House
to actually make that phone call to the Israeli Prime Minister even if that phone call was discussed as warm at the time.
What impact do you think the United States can have in mediating between the two sides here?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Limited, but the administration is trying to put pressure on mostly privately the -- Joe
Biden has not taken a high profile role in this. Those remarks yesterday were the only ones he's made publicly about it, but I do think it's
significant that he said he anticipates that it will end sooner rather than later, which reflects I think the results of those phone calls, more than
25 phone calls from White House national security officials to counterparts in the region, and you've also got the United States leaning on diplomats
in Egypt and Qatar that they hope will put some pressure on Hamas to try to ease tensions here and prevent this from spinning out of control.
The Israeli-Palestinian conflict is not one that Joe Biden has wanted to put at the top of his foreign policy agenda, and the potential that this
could spin out of control is a very worrisome development for the White House.
CHATTERLEY: What more can be done? As you said, it is a behind-the-scenes negotiation, and there is clearly a flurry of global diplomacy going on
here. It's not just about the United States.
HARWOOD: I mean, I think it is diplomatic pressure. I don't think you're going to see a more directly -- a direct intervention by the
administration, but it's trying to call on all parties to prevent this from getting much worse than it already is. We've seen these reports from Hadas
in the last few days. It is alarming, especially those clashes on the street.
But the more you have diplomats not just in the United States, but in the region around the world, all converging their attention on this problem,
urging the parties to back off that at least creates the hope, the potential that they will do so.
CHATTERLEY: Yes, anything to avoid a return to a repeat of 2014. John Harwood, thank you so much for that, in Washington, D.C. for us.
Okay. We will continue to bring you abreast of further developments over there throughout the programming on CNN today. For now, let's bring it back
to the FIRST MOVE for global markets, and it is a volatile one. Inflation gestation equals investor agitation. I think that's the message.
Big picture, U.S. futures bouncing from earlier losses with the NASDAQ set to claw back some of Wednesday's sharp 2.6 percent decline. Europe, as you
can still see, still firmly lower, and Asian markets finished deep in the red there too.
The Nikkei, the real underperformer ending down 2.5 percent and on the cusp now of that 10 percent correction territory. The global driver here,
stronger than expected inflation data in the United States, but also in China this week, too and what that means for the withdrawal of support from
global Central Banks.
Well, I can tell you, there is more trouble today. U.S. Producer Price Index measures the manufacturing price pressures and that rose by some 0.6
percent last month, double, in fact the expected amount. PPI is up a strong 6.2 percent year-over-year, too, as you can see on the screen in front of
you.
This matters because higher prices for businesses can ultimately lead to increase cost for consumers as businesses pass those higher prices on. The
debate, of course, is whether all this is transitory or merely reflecting the challenges of economic reopenings or whether inflation is truly taking
hold for the first time in decades.
It is a question for both market investors, too. U.S. 10-year yields steady today, but still near a six-week high, 1.69 percent as you can see
reflecting stickier price stress. Yields on German bunds as well at two- year highs.
One bright respond however, a massive auction of U.S. 10-year government bonds went off yesterday without a hitch. U.S. debt still in demand. The
current yields, and the sign that the transitory inflation story holds, at least for bond market investors for now.
Now from inflation infatuation to crypto chaos. Bitcoin, Ether, Dogecoin, all plunging overnight and the Techno King of Tesla is to blame. Yes, the
Tesla CEO, Elon Musk announcing that the company is suspending taking payments in Bitcoin. Musk says, this is due to Bitcoin's impact on the
environment.
Christine Romans joins me now. Words never fail me, and they fail me. What do we think of this?
[09:10:41]
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Okay. You know, look, this is a real U-turn as you say for him. He has been saying
that, you know, the wave of the future will be crypto, and that it is good for the future. Now, he is saying, well it is good for the future, it will
get legitimacy among conventional financial people, but I am focused on the cryptocurrencies that have less of an environmental impact as Bitcoin.
He says, cryptocurrency is a good idea on many levels, but this cannot be done to the detriment to the economy -- or the environment." Surprise,
surprise. We knew, right? We all have known that mining for Bitcoin is incredibly energy-intensive, and the idea of using cryptocurrency as a
downpayment or to buy an energy-efficient car, there's a contradiction there that many people have pointed out many times.
We don't know. The company is not saying whether he is just now learning of these environmental concerns or what in fact is prompting this change from
February when they said they were going to be investing $1.5 billion in their balance sheet in crypto and also, that they would be taking these
downpayments.
I would urge taking payments for their cars in crypto. You know, he has been very public, very kind of off the cuff about crypto. You know, let's
listen to him on "Saturday Night Live" just on May 8th when, you know, he kind of had a little dig at Dogecoin, and Dogecoin tanked after that.
Listen.
(BEGIN VIDEO CLIP)
ELON MUSK, CEO, TESLA: It's a future currency. It's an unstoppable financial vehicle that is going to take over the world.
UNIDENTIFIED MALE: I get that, but what is it, man?
MUSK: I keep telling you. It's a cryptocurrency you can trade for conventional money.
UNIDENTIFIED MALE: Oh. So it's a hustle.
MUSK: Yes, it's a hustle.
[LAUGHTER]
UNIDENTIFIED MALE: Why didn't you just say that, man?
(END VIDEO CLIP)
CHATTERLEY: I've got my head in my hands. I mean, Dogecoin also tanked overnight, let's be clear.
ROMANS: I know.
CHATTERLEY: This was seen as a marking point I think, for cryptocurrencies that a huge company like Tesla was accepting Bitcoin for payments for their
cars. I mean, this is -- it was a huge marker point. We saw Bitcoin rally 16 percent, I think, the day that it was announced, and now it has come
back again.
I mean, we can debate all sorts of angles here, and we will do that later on in the show, but Christine, for me, regulation, regulation, regulation.
ROMANS: Yes.
CHATTERLEY: Nothing about what we're seeing here whether him as a CEO of Tesla or the crypto environment, too and many of the big players are
saying, look, we need some degree of regulation, actually to enshrine this as an asset that is something that can enter the main stream.
ROMANS: And there are critics of Elon Musk who have said he is a walking S.E.C. violation, right? I mean, he tweets and talks about things.
CHATTERLEY: Many times.
ROMANS: Right. I mean, there's plenty of documented evidence for this, trying to be, you know, sort of a celebrity CEO figure, legitimatizing
crypto, and now what about all those small investors who follow him with such diehard enthusiasm? They are the ones left holding the bag when they
tank.
CHATTERLEY: Yes. And there is an inconsistency here for me, too, and either it's an environmental concern or it isn't. Either you can buy and
sell cars with it and you can have it on your balance sheet or you can't. You shouldn't be able to do both.
In my mind, you're saying there's a transaction issue here with Bitcoin perhaps rather than a store of value issue and we should discuss that later
on in the show.
ROMANS: Yes, it is a contradiction, isn't it? Yes.
CHATTERLEY: Christine Romans, yes, there's many contradictions in here. Too many to unravel. Thank you.
And as I mentioned, later in the show, we're going to hear from Anthony Pompliano of Pomp Investments. So, fasten your seatbelts for that.
Okay, let me bring you up to speed now with some of the other stories making headlines around the world.
Officials in Delhi say COVID cases are starting to decline in the Indian Territory, but nationwide, the infection rate and death toll are still
high. In the East, dozens of bodies have washed up in the Ganges River, prompting officials to install a net. They still haven't determined the
causes of death, but the victims are thought to have died from COVID.
Nepal is urging climbers on Mt. Everest to hand over empty oxygen cylinders so that they can be used for COVID patients. It comes as hospitals are
dealing with a severe shortage of oxygen supply amid a second coronavirus outbreak.
Just this Tuesday, Nepal reported its highest number of new death rates from COVID.
Okay, still to come here on FIRST MOVE. The Colonial Pipeline is back online after that cyberattack. We'll speak to the head of the American
Petroleum Institute about protecting America's emergency infrastructure.
And Alibaba sees an operating loss as China's crackdown eats into its revenue surge.
Stay with us. That's all coming up.
(COMMERCIAL BREAK)
[09:18:06]
CHATTERLEY: Welcome back to FIRST MOVE. The Colonial Pipeline restarting operations days after a massive ransomware attack. But the company says it
will take several days for deliveries to return to normal. Now, a growing number of gasoline stations along the U.S. East Coast are running out of
fuel as many drivers fill up their tanks in panic buying as Dianne Gallagher reports.
(BEGIN VIDEOTAPE)
DIANNE GALLAGHER, CNN CORRESPONDENT (voice over): Gas --
UNIDENTIFIED FEMALE: As far as gas, yes, we ain't got no more.
GALLAGHER (voice over): And patience --
UNIDENTIFIED FEMALE: I don't know how it's going to work for all of us.
GALLAGHER (voice over): Running out all along the East Coast.
UNIDENTIFIED FEMALE: I've gone to six different stations and nobody has got any gas.
GALLAGHER (voice over): Demand spiked by 40 percent on Monday in five states from Florida to Virginia.
TIEISHA BROWN, PENSACOLA, FLORIDA DRIVER: I was on my way to my dad's house, and my gas tank is basically empty, and all the gas pumps has out of
service.
GALLAGHER (voice over): Officials blaming public panic for what seems like a sudden short supply.
GOV. ROY COOPER (D-NC): The shortages that we are seeing are pretty much solely related to panic buying from people, and I want to encourage people
not to do that. Don't fill up your car unless you have to.
GALLAGHER (voice over): The nervous fill-ups sparked by last week's Colonial Pipeline cyberattack.
JENNIFER GRANHOLM, U.S. SECRETARY OF ENERGY: There should be no cause for hoarding gasoline, especially in light of the fact that the pipeline should
be substantially operational by the end of this week.
GALLAGHER (voice over): The 5,500-mile pipeline moves roughly 45 percent of the East Coast fuel supply. GasBuddy reporting more than 1,800 stations
are offline saying here in North Carolina, an eye-popping 65 percent are running dry.
With long lines stretching for miles, if drivers are lucky enough to find fuel, it is costing them.
LEATHER KERNEY, RICHMOND, VIRGINIA DRIVER: Six gallons of gas for $35.00, that's absolutely ridiculous.
GALLAGHER (voice over): The average price of a gallon of gas jumping to $3.00.
JEANETTE C. MCGEE, SPOKESPERSON, AAA: It's more expensive than we've seen in quite some time. Actually, the last time we were at that price point was
the end of October in 2014.
[09:20:06]
GALLAGHER (voice over): Experts warn that panic purchases could create a domino effect.
UNIDENTIFIED FEMALE: You don't want to miss out, you don't want to be the one that doesn't get gas.
GALLAGHER (voice over): Meaning, fear of a shortage could actually create one.
(END VIDEOTAPE)
CHATTERLEY: The U.S. oil and gas industry is represented by the American Petroleum Institute, the group's 600 members produce, process and
distribute most of the nation's energy.
And joining us now is Mike Sommers, CEO of the American Petroleum Institute. Mike, great to have you on the show. We were just showing our
viewers the --
MIKE SOMMERS, CEO, AMERICAN PETROLEUM INSTITUTE: Julia, great to be back with you.
CHATTERLEY: Great to have you with us -- the level of chaos actually that we're seeing at pumps all over the country. Mike, what's the industry's
response to what we've seen?
SOMMERS: Well, first of all, it was great news yesterday that Colonial announced that they are getting the pipeline back online. So we're pleased
with that result, of course, but I do think some of this panic buying has really led to this supply shortage. So you really were dealing with both a
supply issue because of the pipeline going down because of really a terrorist attack on this pipeline.
And then in addition to that, you've had of course, the issue of people panicking as a consequence. People shouldn't be hoarding gasoline at this
time. What they really should be focused on is making sure that they have the fuel, of course they need, but we're going to get this gas online very
quickly.
CHATTERLEY: What should CEOs in the industry, particularly pipeline CEOs be focused on at this moment? Mike, we've got the threat of cybersecurity
risk, we've got the challenges when that does happen and what we've seen in terms of the constraint that that places on providing energy supply to
parts of the country. What do CEOs need to be doing today? Well, yesterday.
SOMMERS: Well, I think all of our CEOs, particularly those that are members of the American Petroleum Institute, are keenly focused on making
sure that our cyber defenses are up and running.
All of our member CEOs are focused on making sure that they have their cyber defenses in place and we want to work with the Federal government on
making sure that there aren't vulnerabilities to our energy supply.
What I'd say is, is that this is an economy-wide issue. This isn't just something that exists within the oil and gas industry. Every American
company has suffered these kinds of cyberattacks, and we need to make sure that we have a robust system in place that can fight back against these
rogue actors overseas.
So we're focused on that. We want to work with the Federal government on building those robust defenses, and also doing things to make sure that
those people in other countries that are targeting energy infrastructure and other infrastructure are held accountable for what they're doing.
CHATTERLEY: Mike, I spoke to the head of the U.S. Federal Energy Regulatory Commission, Neil Chatterjee yesterday, and he had this to say
about the response in the private sector.
(BEGIN VIDEO CLIP)
NEIL CHATTERJEE, COMMISSIONER, U.S. FEDERAL ENERGY REGULATORY COMMISSION: Every CEO in the energy sector, and especially pipeline CEOs, should
immediately, immediately convene their incident management teams to do a deep dive review of their security posture and protocols.
I had a pipeline CEO a couple of years ago, tell me that he had been briefed by O.D.N.I., that his system was vulnerable, but no one in his
company had a security clearance high enough to even get briefed to know where to make investments to protect their system.
(END VIDEO CLIP)
CHATTERLEY: That worries me, like not having appropriate security clearance in order to be able to make the required investments even
understanding what the required investments are. We're all learning about new technologies and what their vulnerabilities are. And that's only
accelerated in the last year and a half.
Where do you even begin, Mike? And would you agree that actually we're nowhere near protected for this kind of threat? Wherever we are talking in
terms of infrastructure.
SOMMERS: Well, I mean, yes, I mean, trust me, every energy CEO, and I think every CEO in the country right now is looking at their systems to
make sure they're not vulnerable to these kinds of attacks.
I think every company goes through a very significant cyber review every year, and I think this attack, of course, was a wake-up call not just for
the energy infrastructure, but for every company CEO, who has some vulnerabilities in this space.
But we need to work with government to make sure that we are protected, both from a defensive measure to make sure that we have the proper controls
in place at every company in the United States. But also, we need to make sure the government is holding these overseas actors and these countries
that sponsor them accountable for what their countries are doing.
So we're focused on this. You know, the other big issue here, though, is Julia is, is the fact that we need to continue to build out this
infrastructure, our energy infrastructure, in particular, because the world is going to continue to demand and Americans are going to continue to
demand a lot of energy, and we can't continue to be dependent on the existing pipeline infrastructure. We need to build more.
[09:25:00]
CHATTERLEY: Yes, I mean, there'll be those listening to this saying, you build more pipes and you're going to have to provide even greater security
in order to protect them quite frankly, though I get your point about the need for greater provisioning and diversification.
SOMMERS: Yes, we shouldn't be talking about shutting down existing pipelines for sure. So for example, there's a pipeline in the State of
Michigan that they're talking about shutting down right now, the Enbridge Pipeline Line 5. There's a pipeline from the Dakotas, the Dakota Access
Pipeline, that there's discussions of shutting down right now. That is not the way to deal with these issues.
We need, of course, to take care of cybersecurity, but we also need to protect existing infrastructure from attacks from regulators and government
officials who want to shut these pipelines down.
So there are multiple issues in this space, and we want to work with the Federal government and state governments to make sure that we have the
energy infrastructure online to protect the American people.
CHATTERLEY: And I completely understand that Mike, there will also be people again, listening to this and saying, you know, private companies buy
these utilities because they think they're a stable cash flow, but they also have to invest in them in order to protect them from this kind of
threat. Is enough of that being done? Because when you say work with a government, there's a meet in the middle here, whether they need to provide
greater support, understanding information, but also investment from the private sector side, too.
SOMMERS: Yes, I mean, the oil and gas industry is ready to invest in this kind of infrastructure. They invest every year to update these pipelines to
make sure that they're safe, and they provide fuel that the American people need during these kinds of situations.
But we also need permitting reforms so that we can continue to build out that infrastructure. We're prepared to build out that infrastructure more.
We want to build more pipelines in this country, and we want to invest in cybersecurity as well.
Sometimes that requires the Federal government to give us some permanent reforms so that we can continue to build it out. But we also need
government support to keep us apprised of some of the cyber actors overseas and their new techniques that they're bringing online.
CHATTERLEY: Yes. And there has to be deterrence, too. Mike, you raise some great points. Great to have you on as always, Mike Sommers, the CEO --
SOMMERS: Julia, great to be with you.
CHATTERLEY: As always, the CEO of American Petroleum Institute, great to have you with us.
Okay, we're back after this. Stay with us.
(COMMERCIAL BREAK)
[09:30:19]
CHATTERLEY: Welcome back to FIRST MOVE and Volunteers of America ringing the bell this morning, and U.S. markets are up and running and ready for
trade this Thursday and we're seeing nice Thursday bounces for the rate sensitive tech stocks after more than two and a half percent thwacking in
yesterday's session, but the inflationary pressures that are triggering global market volatility, not going away anytime soon.
Just released data showing the U.S. Producer Price Index rose some 0.6 percent last month as we've mentioned. That's double what was expected and
the fastest rise in wholesale prices in over a decade.
Meanwhile, U.S. jobless claims remain a relative bright spot rising, yes, but by a weaker than expected 473,000 people last week. That is another
pre-pandemic low.
All this says McDonald's announces that it is raising wages by some 10 percent at many restaurants as it tries to attract new workers. Remember,
labor shortages, as well as part shortages have helped drive up recent inflationary pressures and certainly fears, too.
Earnings from reopening plays, Disney and Airbnb are on deck later today, too.
Cryptocurrency exchange, Coinbase, will also release its first results since going public also.
So that's the markets. Let's get back to our top story once again today in a deadly confrontation between Israel and militants in Gaza shows no signs
of letting up. The United Nations is warning the conflict could grow into a full-scale war, as rockets continue to be launched from Gaza and the
Israeli military responds with airstrikes.
Meanwhile, there's growing concern over violent unrest in a number of towns in Israel with a majority Arab population. Ben Wedeman is live in the
Israeli city of Lod with the latest. Ben, just talk about some of the violence that you've seen.
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, what we've seen here is that there has been several nights of violence here in this mix of
Palestinian-Israeli and Jewish-Israeli town. Many of the streets you drive through you will find burned cars like this.
And of course the Israeli government has imposed an 8:00 p.m. to 4:00 a.m. curfew here. Now, what we saw last night was some fairly disturbing images,
video that was shot and posted on social media of what appears to be Jewish-Israeli mobs attacking individual Palestinian-Israelis. And this
happened not just here in the town of Lod, where actually night before last, one Palestinian-Israeli was shot dead, but in the towns of Acre or
Akko in Hebrew, and other towns as well, but here, we've got the Israeli Border Police have been deployed here.
On the right is a school that has been partially burned and some of the houses here have been vandalized as well. Now, I spoke to one Jewish-
Israeli resident here who told me that night before last, when all of this was going on, there was rock throwing, fighting in the streets that she
fled her home with her husband and went to Jerusalem to stay with her mother.
She came back here just to see the state of her house. But she is going to go back to Jerusalem this evening.
Also the Palestinian-Israeli residents you talk to tell of the violence that has occurred here, what they suffered at the hands of Jewish-Israelis.
They also complained about the fact that traditionally, Palestinian- Israelis are not afforded the sort of municipal services in terms of education and whatnot, that their Jewish-Israeli co-citizens are provided.
But certainly this is something -- a further complication for the Israeli government that of course, is dealing with the situation with Gaza, the
situation in Jerusalem, but in terms of unrest, this is the worst that this part of Israel has seen since 1966 -- Julia.
CHATTERLEY: Ben, you were saying to us yesterday that we can't forget the importance of domestic politics in Israel at this moment. And we were
talking earlier on in the show about the flurry of diplomatic activity going on primarily behind the scenes here.
What's your sense and what is the sense of the people that you're speaking to there? Do they believe that the likelihood is that this is going to be
more of a protracted standoff?
WEDEMAN: All indications are that the Israelis have made it clear that they are not going to sort of stop halfway in terms of this operation, in
terms of the military exchange going on that they have certain objectives that they want to achieve, and they're not going to stop midway as a result
of diplomatic efforts.
[09:35:13]
WEDEMAN: In fact, Al Arabiya, the Arabic news channel is reporting from Cairo that the Egyptians offered to basically act as an intermediary
between Israel and Hamas in Gaza and the Israelis, according to Al Arabiya turned them down -- Julia.
CHATTERLEY: Ben Wedeman, stay safe, please. Great to have you with us. Thank you.
Flights to and from Israel are being curtailed because of the ongoing unrest. United, American, Delta, Lufthansa and British Airways have all
canceled or announced cancellations or waivers on flights in and out of Tel Aviv.
All right, coming up, from one of the biggest cheerleaders to a villain, I should say that with a question mark, as Elon Musk's Bitcoin comments and
ripple effects across the crypto market. We will speak to a prominent investor who disagrees with Musk.
Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE and returning now to our top business story. Elon Musk's backtrack on taking payments for Tesla's cars
in Bitcoin. He says he's become concerned about how Bitcoin mining and transactions affect the environment. The tweet has sent Bitcoin and other
cryptocurrencies tumbling.
My next guest says this energy narrative is inaccurate. And crucially, Musk is not selling Bitcoin. Crypto investor, Anthony Pompliano joins us now.
Anthony, great to have you on the show. Something tells me you didn't get much sleep last night.
ANTHONY POMPLIANO, INVESTOR, POMP INVESTMENTS: I slept pretty well except, you guys got me waking up early to come on the show. But thanks so much for
having me.
CHATTERLEY: Okay, let me read the quote. He said, "We are concerned about rapidly increasing (for emphasis) use of fossil fuels in Bitcoin mining and
transactions, especially coal, which has the worst emissions of any fuel." Misinformed or just plain wrong?
[09:40:03]
POMPLIANO: Well, listen, you know, Elan Musk is probably one of the greatest innovators ever and he has built two amazing companies in Tesla
and SpaceX, but I think that the exact comments or phrases that were used are inaccurate. And so one of them is increasing, right?
Actually, what we see is that there's been a big move away or a shift away from coal-powered energy to power the Bitcoin network. Instead, what we're
seeing actually is the adoption of renewable power, about 75 percent of all miners use some form of renewable power, 40 to 50 percent of miners use 100
percent renewable power.
And actually, what we're seeing is a shift from China now to the United States and Canada, which is a much greener grid. And so I think generally,
not only are we seeing kind of really great progress in terms of what we already have from a renewable standpoint, but also we're seeing that shift,
which is only going to lead to more and more renewable power, because it is the cheapest power available and miners need cheap power in order to be
profitable.
CHATTERLEY: I checked the source for that as well. I was looking for it. Cambridge University did a big study and I've read it. I guess, some of the
criticism that will instantly come is 65 percent, I believe, around of Bitcoin is mined in China. And whether they're using renewable or not, it's
tough to verify. Do you accept that that is a challenge here in terms of verification of the data?
But also, even if we're just talking about digital assets, in general, there are cleaner energy versions, Ether, for example, XRP, not mined. Is
that a fact that we can stick to at this moment?
POMPLIANO: I mean, I think one of the big things here, right, is to remember that money is energy, it is stored energy. And so you need some
conversion of energy to have money be valuable. We're seeing in the legacy world, when you have no energy, when you have nothing, when you can just
print money out of thin air, what happens -- and it's not good. It's not good for people all around the world.
And so I think that this narrative in terms of energy consumption is very misguided, frankly, for two different reasons. One is, the U.S. banking
system is way worse for the environment than Bitcoin or any other cryptocurrencies. And also, it consumes much, much more power.
And a lot of times what you'll hear is people will say something like, Bitcoin consumes more power than a small country, but also, the Americans
use of Christmas lights every year consumes more energy than some of the small countries. And so I think that those comparisons just aren't really
that great.
And when it comes to the comparison between cryptocurrencies, you know, again, the market has spoken. My opinion doesn't matter. Nobody else's
opinion has mattered. The market has spoken.
Bitcoin is the most valuable cryptocurrency. I think it will remain the most valuable cryptocurrency. It is a trillion dollar asset from zero to a
trillion dollars in about 12 years. And I think that we're going it to see go much, much higher in the coming months and years.
CHATTERLEY: I love your point about let's compare apples with apples, quite frankly, not apples with oranges. Don't care about relative energy
consumption versus countries care about other forms like the financial sector, and that's going to be -- you didn't answer my question though, it
is cleaner digital assets than the Bitcoin. We're clear on that.
And I think that's important for people to understand whether you love Bitcoin or not, or you like other digital assets or not.
Let's talk Tesla specifically because there's an inconsistency here for me, Anthony, maybe you can like, explain it. He is saying you can't buy cars
anymore, or at least for now with Bitcoin. But he is still holding loads of Bitcoin both on balance sheets of his companies, we believe, still, but
also he's holding it personally.
Either you're against the environmental costs of digital assets, or you're not. What he kind of is suggesting to me is that he is questioning the
transaction, the utility value of Bitcoin, not the store of wealth opportunity of Bitcoin, agree?
POMPLIANO: Yes, look, Elon Musk, again, not only is he one of the greatest innovators, he's also one of the greatest marketers. And I think that what
we're watching here is the first step in a master stroke of genius. And where Tesla, which is a renewable energy company, it's a battery company is
going to lay the groundwork to start a narrative and then they are going to come and save the day.
They're going to have this kind of heroic action, they are going to launch a product that allows people to use those power walls that they have to
basically mine Bitcoin with renewable power. And so you start to see kind of this almost footing or this foundation for a product launch.
I think that's why you're getting this narrative around renewable power yet, again, don't listen to what they say, watch what they're doing.
They're not selling any of their Bitcoin because of this. In fact, it when the price dropped, they may have bought more, we don't know. Right? Michael
Saylor, MicroStrategy announced this morning, they bought another $15 million. We'll see when Tesla announces again.
But I think that we've got to separate out kind of what they're saying from what they're actually doing and then also look to the future and ask why
are they saying this stuff? And I think it's because they're actually going to launch a product at some point in the future that will address some of
these components.
CHATTERLEY: But you disagree with the point that I'm making that actually there is a store of wealth argument that he's making here, and perhaps he's
going to try and help with the energy efficiency questions around digital assets.
But the point he is sort of making here is that -- and you made it with the financial sector point as well, I think, that there are more efficient ways
of improving the financial plumbing, or improving efficiency in digital currencies, if you want to do that, not using Bitcoin.
Whether you believe it's a great store of value or not, and many people do like yourself.
[09:45:22]
POMPLIANO: Yes, look, Bitcoin is the apex predator of financial markets. There was over $18 billion of on chain transaction volume in the last 24
hours. That's not exchange traded volume. That's not speculation around trading. That is simply people sending it from person to person on chain,
$18 billion, that is $6.5 trillion annualized, which is about 50 percent of all of Visa's annual transaction volume.
The Bitcoin network processes more transaction volume in a year than Apple Pay, PayPal or Venmo. This thing is an absolute monster. Not only is it
serving as the best store of value globally, but it is also serving as this great medium of exchange. And that $18 billion in a 24-hour period is done
without asking permission of any government, any Central Bank or any financial institution. And that's why I personally believe Bitcoin is
inevitable to continue to rise until it becomes the next global reserve currency.
CHATTERLEY: Anthony, why did he do this, really? Why did he stop people buying cars if it is such a great medium of exchange? Why? Why is he done
this, do you think? Do you believe it's because of his beliefs regarding the environment?
POMPLIANO: I frankly, don't think anyone was buying cars with Bitcoin to begin with, right? Why would somebody use Bitcoin to buy a car when the
dollar was just being depreciated? That's one big kind of elephant in the room.
But the second thing, I really do believe that this entire kind of conversation and the statement yesterday, is really laying the groundwork
so that Tesla will be able to come out and they will be able to launch some sort of renewable power mining equipment. And if you think about it, they
have the power wall.
And so if you have this battery at home that is storing power, how much power are you really going to consume for your car or for your home? If all
of a sudden you now can monetize that power by helping to run software to mine on the Bitcoin network, and you can actually monetize that power, you
should be able to pay off the power wall pretty quickly.
And then also, it can serve as an income stream for the folks who buy that power wall. So I think that there's, you know, a much bigger play here.
It's not really kind of what they're talking about in terms of transactions.
CHATTERLEY: You should be hired. There's some great ideas in there. Anthony, quickly, as an investor, are you concerned that one person can
have this much impact in terms of price? You made the point that he could be buying -- he just came out and tanked the market, probably knowing full
well what would happen when he made this announcement, by the way, then buying it up?
I mean, if you're a regulator watching this, your hair will be turning gray and your steam will be coming out of your ears. Is that a problem here?
Very quickly.
POMPLIANO: If that's what he was doing, then that's exactly what Wall Street does every day. They put out research that is negative. The price
goes down and they buy it. So I think that this is true in every financial market, if that's actually what's happening here.
But I know that I bought last night and a lot of my friends did and I don't think that anyone is going to stop buying because of anything that Elon
Musk said.
CHATTERLEY: Yes, I know a lot of people who were buying, too. Anthony Pompliano, great to have you on, as always. Thank you.
POMPLIANO: Thank you.
CHATTERLEY: We are back after this.
(COMMERCIAL BREAK)
[09:50:31]
CHATTERLEY: Welcome back to FIRST MOVE. The organizers of this Summer Olympics in Tokyo resisting pressure to cool off the massive sporting
event.
With literally weeks to go, the concerns are mounting about holding the games during the pandemic as Selina Wang reports.
(BEGIN VIDEOTAPE)
SELINA WANG, CNN CORRESPONDENT: We are just about 10 weeks away from the Tokyo Olympics and a growing course of high profile voices in Japan are
raising alarm about the games, including sponsors, athletes, politicians and the medical community.
Most recently, Toyota, a top Olympic sponsor said that the company is concerned about the public frustration against hosting the games in the
middle of rising COVID-19 cases in Japan and a strained medical system.
This comes after two of Japan's star athletes, tennis players Naomi Osaka and Kei Nishikori said they are conflicted about whether the Olympics
should be held this summer.
As we get closer and closer to the games, the setbacks continue to mount.
At least 35 towns in Japan said they are canceling deals to host international athletes citing COVID-19 concerns. The U.S. track and field
team has canceled its pre-Olympic training camp in Japan.
The torch relay has been cancelled or moved off of public streets in parts of the country. Several test events have been canceled or postponed.
On top of all of this, Japan has only fully vaccinated about one percent of its population.
Yet amid all of this, the International Olympic Committee continues to reiterate that they are determined to host the Olympic Games as planned. In
the most recent virtual press briefing, however, the press briefing was cut short by a protester that cut into the conference. Take a listen here.
UNIDENTIFIED MALE: No Olympics anywhere. No Olympics anywhere. No to the Olympics. We don't want the Olympics.
No Olympics in Tokyo.
UNIDENTIFIED MALE: Thank you. And on that that great note, I'm sorry to disappoint you that it was me not the President today, obviously would have
probably made that stunt a little bit more interesting. I'm used to it. So that's fine.
WANG: And here in Japan, the local polls show that the majority of the Japanese population think that the games should be canceled this summer.
Selena Wang, CNN, Tokyo.
(END VIDEOTAPE)
CHATTERLEY: Now from Olympic sports to Olympian style revenues. Alibaba sales, the Chinese internet giant soaring 64 percent year-over-year. The
company however, reporting an overall net loss as it reels from a huge Chinese antitrust fine.
As Paul La Monica joins us now, Paul, these were incredible revenues. And we've seen this from similar style businesses, the Amazons of the world,
for example, as we all shifted to online spending, but that fine was pivotal.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, the fine obviously leading Alibaba to report a net loss. If you exclude that the numbers weren't
nearly as problematic with profit growth of almost 20 percent.
I think the issue though, is that as you point out, Alibaba is benefiting from a surge in demand for online shopping, especially in China as that
country recovers from the COVID-19 pandemic as well, 925 million monthly active users for Alibaba's core commerce platform. It is a staggering
number and big growth from December as well.
But there are some questions.
CHATTERLEY: And I've got a huge question about the Cloud business, some data distress going on there. What happened do we think?
LA MONICA: Yes, Cloud revenue grew 37 percent from a year ago, which is obviously impressive, but what could be somewhat troublesome and Alibaba
hasn't given that much detail, they said that one of their top customers outside of the U.S. has decided to stop using Alibaba Cloud,
internationally. And we don't know what the reason is exactly, who that customer is.
But as we all know, Julia, Alibaba faces a lot of competition both in China from companies like Tencent, as well as from global American behemoths like
Amazon, Microsoft and Google or Alphabet, which have massive cloud computing businesses. So it's a very competitive landscape right now.
If Alibaba is starting to lose some traction, that's bad news for the company.
CHATTERLEY: Yes, hugely competitive landscape, but also the greater scrutiny from officials in Beijing as well. It's also going to give
investors perhaps pause for thought and that's a challenge going forward. It's not a one off.
Paul La Monica, great to have you with us. Thank you so much for that.
[09:55:04]
CHATTERLEY: And finally, the gas shortages in parts of the states have made this warning necessary apparently, with Americans being reminded here
by the Product Safety Commission not to fill plastic bags with gasoline.
Images have surfaced on social media of some people using unconventional means to carry petrol.
Better than using a handbag. All right, that's it for the show. I'm joking.
If you missed any of our interviews today, they'll be on my Twitter and Instagram pages. Search for @jchatterleyCNN.
In the meantime, stay safe. "Connect the World" with Becky Anderson is next.
And I'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
