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First Move with Julia Chatterley
Gaza Comes Under Heavy Fire from Israeli Airstrikes and Artillery; Cancel the Olympics Says One of Japan's top CEOs; Subscriber Growth is a Minus for Disney Plus. Aired 9-10a ET
Aired May 14, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:09]
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.
Lives lost. Gaza comes under heavy fire from Israeli airstrikes and artillery.
Rakuten rejection. Cancel the Olympics say one of Japan's top CEOs.
And streaming slowdown. Subscriber growth is a minus for Disney+.
It's Friday. Let's make a move.
Welcome to the show once again. We have breaking news from the Middle East. Israel intensifying its attack on Gaza overnight. The enclave has come
under heavy fire from Israeli war planes and now tanks and artillery. The military says it is not a ground incursion and no troops are inside Gaza.
The Palestinians are reporting that 119 people have been killed by the Israeli bombardment. Hamas militants continue to fire rockets into Israel.
The Israeli military reported an eighth casualty on its side earlier this morning.
Journalist Neri Zilber joins us now. Neri, fantastic to have you with us. There seemed to be some confusion late yesterday about whether or not a
ground offensive had begun. Can you just explain what we're seeing here and what the latest is?
NERI ZILBER, JOURNALIST: Sure. Well, as you mentioned, there was an escalation on the part of the Israeli military late last night. For the
first time, artillery and tanks were used to fire into the Gaza Strip but not enter the Gaza Strip.
So along with war planes and the Navy, they were targeting primarily Northern Gaza and primarily an underground Hamas tunnel system. Now, in
order to let's say make that operation as effective as possible, the Israeli military released a very vague statement ahead of the operation
saying that its ground forces were attacking Gaza. That led to several reports in various foreign outlets about ground forces going into Gaza and
that led to the confusion, but our report turned out to be incorrect.
CHATTERLEY: Okay. So that's what we're seeing now. We're showing some pretty graphic images of people injured as well. Just talk to us about the
domestic political situation, Neri, as you understand it. To what extent in Israel is that playing into both Israel's response here politically and of
course in terms of the offensive and the direction that they're taking in response to these rockets from the Palestinians?
ZILBER: Right. Well, as we know, Israel has been in a two-year political crisis, election after election with Israeli Prime Minister Benjamin
Netanyahu fighting for his political life.
This escalation both in Gaza, as well as inside Israel with various riots between Arab citizens of Israel and Jewish citizens of Israel have only
escalated tensions. And so, he, some people imagine, is trying to use those tensions for his own political benefits.
Late last night, high political drama here in Israel when a key opposition figure broke with the opposition and went back into Netanyahu's camp
precisely due to the conflict in Gaza and the unrest inside Israel.
It should be mentioned that it doesn't mean Netanyahu himself will have a government, will be able to see a government and end the political crisis
here in Israel, but it may mean that he holds on for a bit longer and perhaps, perhaps another election is on the horizon for Israel.
But really, all of this, the political, the conflict in Gaza and the riots on the streets inside Israel proper are leading many to question
Netanyahu's leadership, shall we say, but he himself is remaining strong. He says he will re-impose order both on the streets. He says he will crush
Hamas and bring the conflict to a close. Both of those propositions remain to be tested.
CHATTERLEY: Certainly do. Neri, great to have you with us. Thank you. Neri Zilber there.
All right, we will continue to bring you coverage of events in the Middle East throughout our programming today. But for now, a FIRST MOVE look at
global stock market price action around the world.
And the U.S. majors are set to add to Thursday's gains. Europe and Asia ending the week in the green. The reopening bulls dominating the inflation
bears with one day of stable and commodity prices easing for multi-year highs, too.
I also lost count of the number of Fed officials who downplayed the recent inflation data reiterating that yes, it's temporary and it won't force the
Federal Reserve to act and tighten early. There's nothing transitory about their view, but the bottlenecks in both parts, supplies and labor, will
ultimately ease, but I think, you have to prepare for volatility around the data points as that theory gets tested.
[09:05:14]
CHATTERLEY: While we wait, in the meantime, a down side surprise for U.S. retail sales which came in flat last month versus expectations for a one
percent rise. That said, March numbers were revised sharply higher. You can take a look at that, 10.7 percent gains and we saw big sales gains at
restaurants and bars, key to the reopening story, of course, too.
And another beneficiary, Airbnb reporting a solid booking bounce. It is predicting quote, "a significant travel rebound unlike anything we've ever
seen before," quote, and that will grow after yesterday's move by the C.D.C. perhaps to ease mask wearing restrictions for vaccinated Americans.
But I have to say, no one traveling to anywhere like Japan any time soon and that's where we begin today's drivers.
The Japanese Prime Minister is promising a safe and secure Olympics while one of the country's leading CEOs says hosting the games is a suicide
mission. The conflicting claims come amid growing opposition to the event which is less than 10 weeks away.
Our Selina Wang spoke exclusively with that CEO. Selina, talk us through it. Are the Olympics safe or a suicide mission? That is a bold statement.
SELINA WANG, CNN CORRESPONDENT: Hi, Julia. Well, certainly, we are seeing a growing chorus of high profile voices in Japan raise the alarm about
hosting the games in the middle of a pandemic.
But the comments of the CEO of Rakuten made to me are certainly the most prominent and strong critical voice against the Olympics coming from a
corporate leader in Japan. I started off by asking him if Japan should host the Olympics as COVID-19 cases are rising in Japan and as the medical
system comes under increasing strain. Take a listen to his comments here.
(BEGIN VIDEOTAPE)
HIROSHI MIKITANI, CEO, RAKUTEN: I have been very, very straightforward about this issue and the fact that we are so late for the vaccination, it
is dangerous to host the big international event from all over the world.
So the risk is too big and, you know, I am against having the Tokyo Olympics this year.
WANG: Do you think it's still possible that they could be canceled?
MIKITANI: I think -- everything is possible, right? I think, you know -- I see -- I probably talk with many government officials from other countries
and many people is not really supportive of hosting the Tokyo Olympics this year.
WANG: Why do you think the government has been so forceful in its determination that they will still go ahead despite the public opposition,
including from business leaders like yourself?
MIKITANI: I don't know. To be honest, I call it like a suicide mission, to be very honest and we should stop. I am trying to convince them, but no
success so far.
(END VIDEO CLIP)
WANG: I also asked the Rakuten CEO how he would grade the Japanese government's handling of COVID-19 and the vaccine rollout. Japan has so far
only fully vaccinated about one percent of its population. And the Rakuten CEO told me, he would give the Japanese government a grade of two out of
10.
He also said that amid the devastating effects COVID is having on countries around the world right now, it is not yet the time to celebrate. And this,
Julia, of course comes after high profile comments from other corporate leaders in Japan. You have the SoftBank CEO saying he is afraid of Tokyo
hosting the Olympics this summer.
And Toyota, a top Olympic sponsor, also said that the company is concerned about the growing public frustration against these games.
CHATTERLEY: You asked the pivotal question there. You were saying to him, look, in the face -- and we've been talking about it for weeks, a public
response in Japan that is saying, we don't think the games are safe. We don't want people coming to Japan potentially to spread the virus.
You've got business leaders now saying to his point, it is a suicide mission. Why do we think the government continues to push this? Surely, it
can't be about lost money. The investment in the Tokyo Olympics and what that means, Selina. Why are they continuing to push this?
WANG: Well, Julia, it really struck me that someone like Hiroshi Mikitani who is so well-connected in the political world, who he, himself is
actually pushing for the government to cancel these games. He says he doesn't know why the government is still so determined and publicly
forceful in pushing for these games to still go ahead.
But, I mean, experts point out to the fact that Japan's national pride is on the line. Some have pointed out that Japan does not want to lose face.
It doesn't want to be upstaged by China which is set to host the Winter Olympics in Beijing in 2022.
You do of course, still have the economic question. These are set to be the most expensive Summer Games on record. Japan has already sunk billions and
billions of dollars into this.
[09:10:06]
WANG: But the reality is that even if these games go ahead, but without spectators, Japan is still set to lose some $23 billion in economic losses.
This is according to an estimate by Kansai University.
So even if these games are held, still major losses for Japan. But as you say, the public opposition is snowballing. According to local polls, more
than half of the population here thinks the games shouldn't go ahead. Even a doctors' union said that they are concerned about the games going ahead,
and that they could become a super spreader event even without any spectators -- Julia.
CHATTERLEY: Yes, what's that saying? Prides comes before a fall and the fall in this case is human life and health and you can't put a price on
that.
Selina Wang, great job with that interview. Thank you. Great. Selina Wang in Tokyo there.
All right, let's move on. Pipeline payment? Sources are telling CNN that the Colonial Pipeline did pay a ransom to DarkSide, the group that carried
out the crippling cyberattack.
The pipeline is up and running again, but gasoline shortages in the U.S. are likely to persist for a few more days. Natasha Bertrand joins us now
from Washington. Natasha, great to have you with us, too.
It suggests that if they did pay this ransom, that terrorism pays and that's kind of the opposite of what we need right now. What details do we
have on what was done and what payment and in what form was made?
NATASHA BERTRAND, CNN WHITE HOUSE REPORTER: Hey, Julia. Yes, so we're learning that the company, Colonial Pipeline, did end up paying that ransom
that this group had demanded last week when they locked them essentially out of their systems. They had demanded about $5 million in cryptocurrency
from the gas line company, but it's unclear at this point how much the company actually paid them because there are negotiations that happened
surrounding these kinds of things.
What we do know though is that this ransomware group is based in Russia. The U.S. government is still trying to figure out who the exact hackers are
because this group is kind of a platform that hackers can go to, to use their technology and their ransomware to attack companies around the world
and try to gain ransom payments from them.
So the government now is trying to figure out who they should be going after in this instance, where they are located and whether they have any
additional targets here.
Colonial Pipeline, of course, did shut down its pipeline, the major pipeline in the United States because they were concerned that the billing
system of the company was compromised by these hackers.
So, it's starting to get back up and running now. Of course, there's going to be somewhat of a lag before people see everything return to normal, but
for right now, the U.S. government of course has recommended that companies do not pay ransom to these groups. So, it remains to be seen how the U.S.
government reacts to this new development.
CHATTERLEY: You know, it is interesting, because if you talk to the industry, if you talk privately to U.S. officials, they all acknowledge
that actually, for most of these companies, they have little choice but to pay. We need a new line on this.
BERTRAND: It is very tough. These companies are put in a very tough situation and that's something that the White House Press Secretary Jen
Psaki did acknowledge earlier this week. She said that the F.B.I. typically recommends and it is their policy to recommend against paying out these
ransoms, but sometimes the private companies simply have no choice.
They are locked out of very, very important data, things that are central to the operation of their companies and they just need to get it back up
and running as soon as possible.
Now, what one report said yesterday is that the company paid the ransom and ultimately the decryption tool that was given to them did not actually work
by this ransomware group, so they ended up using the U.S. government's help to unlock their data anyway making that ransom payment somewhat moot.
CHATTERLEY: Oh, my goodness. No words. And actually, I was just looking. Islands Health Service operator actually was shut down -- or shut down all
of its I.T. systems today, too, due to a significant, quote, "ransomware attack." So, the green flag here is coming up for all of these hackers
because people are sitting ducks. We need to do more. Globally, we need to do more.
Natasha, great to have you with us. Natasha Bertrand there.
Okay, let's move on. The streaming boom is flowing. Disney+ now has 104 million subscribers. It is clearly a big number, but analysts were hoping
for more this quarter. Quarterly revenues meanwhile for the company as a whole were down double digits.
Frank Pallotta joins us now with more. Frank, I mean, they are adding relatively less subscribers because we're out there doing more, which has a
positive impact on things like theme parks for Disney, it's just not kicking in yet. What do you make of these numbers?
FRANK PALLOTTA, CNN MEDIA WRITER: So they brought in about 103 million subscribers. They said that's where they're at right now, which is about
less than the 110 that Wall Street was expecting. So the stock went down.
It really goes to show how much Disney has transformed over this pandemic because now, it is completely tied to streaming while they have all of
these other units that are kind of coming back online.
[09:15:02]
PALLOTTA: You have parks really kind of getting back into the flow of things. You have movies coming back to the theaters, but yet investors are
still looking at that streaming number. But that's the good news/bad news for Disney.
The good news is they have all of these other units, unlike Netflix which is really tied to their subscribers. The bad news is investors might be
like, ah, well, that's great, but we really care more about your streaming endeavor.
CHATTERLEY: Yes, and ever increasing competition, too. But I did see that they reiterated their guidance, 230 to 260 million subscribers to Disney+
by 2024, so they are not shy in terms of numbers.
To your point though about -- and it's a great point, the diversification that Disney has, particularly relative to some of the challenges in the
streaming space, the C.D.C. change on mask guidelines for those who have been vaccinated, this could be a huge bump or bump up in terms of
attendance, people willing to go to places perhaps.
PALLOTTA: I mean, it definitely could be. I mean, Bob Chapek, the CEO of Disney yesterday said that this is a huge deal if you are going to
Disneyworld in Orlando this summer. Why? It is because Orlando in the summer is about 95 degrees and wearing a mask doesn't make meeting Mickey
too much fun. So, losing that might help.
But it also could work conversely, too, in a bad way, because think about this, we don't have a lot of data when it comes to children and the vaccine
and children and the coronavirus. And I don't know if you've ever been to Disneyworld, but as much as there's many people like myself walking around
Main Street U.S.A., it's mostly a place for children. So it could be a little bit bumpy along the road, but as you were saying, too, in terms of
the streaming, they're still on track in the long term.
So this looks to be more of a bump in the road rather than a long-term problem for Disney, and we will see how the rest of the unit kind of now
picks up the slack that the streaming has been carrying for the last year and a half.
CHATTERLEY: Yes. Next quarter is going to be pivotal. Frank Pallotta, great to have you with us. Thank you so much for that.
Okay, let me bring you up to speed now with some of the other stories making headlines around the world.
India's COVID infection total has now topped 24 million. It comes after the country recorded over 300,000 new cases for the 23rd consecutive day. The
government says it is ramping up the vaccination drive and expects to have two billion doses by year's end.
In Singapore, officials are tightening restrictions after several clusters of infections emerged. Curbs on social gatherings and public activities
will start on Sunday and last for four weeks.
Okay, we're going to take a break here on FIRST MOVE, but coming up, India's Modi speaks out at last on the COVID crisis, but what took him so
long? We'll discuss.
Plus, no vaccine, no job. Delta Air Lines lays out the law for future recruits. We go behind the scenes. Stay with us.
(COMMERCIAL BREAK)
[09:20:45]
CHATTERLEY: Welcome back to FIRST MOVE as we wind down a week filled with inflation news saturation.
Tesla's Bitcoin payment reevaluation, the Colonial Pipeline's hacked operation and on Wall Street, further market rejuvenation. I don't know how
I got through that.
The U.S. majors are on track to rise for a second straight session with tech in the lead. Investors pretty much ignoring yet another big data point
miss today with U.S. retail sales coming in flat for April, though the revision in March was pretty significant, too. More of a reflection of the
amount of gains we saw in March, I think, there, and any reason to fear a spending pullback.
Investors are more concerned by the rising prices consumers are starting to pay at the checkouts. Those inflation fears sparking plenty of market
volatility this week and we're coming into today's session with overall losses for the week. The NASDAQ down four and a half percent in fact, since
Monday.
Alicia Levine joins me now. She is Chief Strategist and Managing Director at BNY Mellon Investment Management. Alicia, great to have you on the show.
No inflation saturation allowed because we have to talk about it for the next five minutes or so. What do you make of what's going on?
ALICIA LEVINE, CHIEF STRATEGIST AND MANAGING DIRECTOR, BNY MELLON INVESTMENT MANAGEMENT: Yes, great to be back and great to see you, Julia.
Look, the inflation reads came fast and furious, starting with the labor report on Friday, which actually showed supply issues in the labor market
and increasing wages. The market, and particularly the bond market pretty much took it in stride. I mean, it's actually extraordinary where the 10-
year yield is considering the numbers that we had, and the overshoot.
We felt it in the equity market, and the equity market had a tantrum, and it had it in the long duration assets. So those speculative tech names,
long cash flowing streams, which you would expect would be impaired by inflationary environment. That's what took it on the chin. And we actually
expect that to last longer.
So we advise investors to be, you know, invested with cyclical growth and try to trim the names that are based on speculation and not so much on
earnings.
CHATTERLEY: So be specific if you can, because I get your point. What we're seeing here from the bond market, and I'd argue for the equity
markets, too, because yes, we've seen a bit of volatility, and a bit of a pullback, but not that much. It feels like investors are still looking at
the data that we're getting and the numbers that we're getting and saying, look, it's tied to bottlenecks, its supply -- it's tied to sort of short
term supply issues. And those things will work out and the Fed is probably right, it's going to be temporary.
Would you agree?
LEVINE: Well, I would agree, and particularly if you look at CPI and the components of it, we aren't surprised that autos are up 10 percent an
airline fares are up and hotel rooms are up.
I mean, that is exactly what you'd expect in the reopening and some of the friction that's involved in reopening a shutdown economy. It turns out,
it's easier to shut down an economy than it is to reopen it. And those numbers are really very consistent with a short term bump that more or less
by six months should even out, very consistent with the Fed messaging, and of course, very consistent with the market pricing of inflation. The
inflation curve is inverted.
So we have higher inflation in the short term this year and lower going out 10 years, higher than post 2010, but still, we do have that message from
the market that the market is buying what the Fed is selling. Short term inflation higher, evens out over time.
CHATTERLEY: How long does that last? Because I was saying earlier on the show, I lost count of the number of Fed officials that said, look,
inflation is transitory we're going to sit on our hands here. We're not doing anything this year.
For now, investors by and large, kind of ignore the commodities markets are buying that message. Will they do so for the whole of this year?
LEVINE: I think that'll be very difficult to do. Essentially, you have to get through this transitory by the summer, because I think after that, it's
a duration issue in terms of how long it lasts, then you start working on inflation expectations, and that's one of the things the Fed looks at for
where policy should be.
It needs inflation expectations to be anchored, and if those become unanchored, then there is an issue of runaway inflation.
In the real world terms, what do I worry about? I worry about wage inflation because that can be systemic. I don't worry so much about goods
inflation. We're going to see services come back online. That may be where the inflation takes root and that's something really to look at because I'm
assuming the bottlenecks elsewhere in the good sector will even out over the next few months.
That's where you want to look -- wages, housing, rent, and services.
[09:25:14]
CHATTERLEY: And the reaction if we see it? Oops, excuse me -- the reaction if we see it comes from the bond market. That was the alarm, by the way.
LEVINE: I think the reaction -- look, the reaction -- you know, if this were a normal world, would be in the bond market, you know, the Fed is
doing everything it can to kind of, you know, is it forward guidance that they're not going to move for another two and a half years? It should be in
the bond market. It could be in the equity market.
We saw an equity market tantrum this week, not so much in the bond market, it could be either. We do have mispricing of assets all over the place. So
in part, it's due to all of this liquidity and the largess coming from fiscal and monetary support.
So if there are fears of long term inflation going forward, you'll feel it probably both in bond yield spikes, as well as selloffs in the long
duration assets in the equity market, which is why we think investors should be in assets that really do well in mildly inflationary environments
like financials, like real assets, commodities, infrastructure, manufacturing and industrials.
And we like Europe. We like Europe, too.
CHATTERLEY: Yes, you like Europe, too. A recovery play in Europe.
LEVINE: Absolutely. Europe is three to four months behind in vaccinations. Yields all over the European bond markets are telling us recovery is
underway. We're about to get positive on the German 10-year bund. Can you believe it? Signaling that Europe is well underway to recovery, so we think
that given the cyclical and value nature of European equity markets, that's a great place for investors to be investing right now.
CHATTERLEY: Agree. Makes sense to me. Alicia, the Star Destroyer. Did you guys make that -- you and your family make that during the pandemic?
LEVINE: I did not do it at all. It's my children. My children are engineers and this is what we did during lockdown in New York City -- 7,490
pieces.
CHATTERLEY: Wow. Talented family. Thank you, Alicia. I've been dying to ask that for months and months and months. So, here we go.
Alicia Levine, great to chat with you. Chief Strategist at BNY Mellon Investment Management. Thank you.
We're back after this.
(COMMERCIAL BREAK)
[09:30:31]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. markets trading for the final trading session of the week and we've got that TGIF vibe for all the Wall
Street majors, I think, a continuation of the across the board bounce we saw in the trading session on Thursday, but there's no Wall Street magic
for Disney. Shares are falling in early trade on news that it signed up some six million subscribers less than analysts had hoped.
Revenues of the theme park that is still ramping up operations after lockdowns remain under pressure, too, as we discuss this quarter is going
to be pivotal.
And from Disney to Dogecoin. Dogecoin unleashed as Coinbase says that consumers will be able to buy and sell the coin on its app by the summer.
Elon Musk also giving Dogecoin a further boost perhaps tweeting that he is quote, "Working which Doge devs ..." I think he means developers, " ... to
improve system transaction efficiency. Potentially promising."
I mean, the founders left long ago, so I don't know about that. But we'll see.
ANNOUNCER: This is CNN breaking news.
CHATTERLEY: All right, returning now to our top story. The latest on the conflict between Israelis and the Palestinians. Israel stepping up its
bombardment of Gaza with planes, tanks and artillery. However, the Israeli military says no troops are inside Gaza after seeing confusion on that
matter earlier.
The Palestinians report 119 people have been killed by the Israeli bombardment with hundreds more injured. Meanwhile, Hamas militants continue
to fire rockets into Israel, killing eight Israelis.
Joining us now is Ian Bremmer, President of Eurasia Group and GZERO Media. Ian, great to have you on the show. Thank you for joining us.
I think a lot of people looking at this situation here and how quickly things have deteriorated and asking how close we are to all-out war. Your
view?
IAN BREMMER, PRESIDENT OF EURASIA GROUP AND GZERO MEDIA: It's possible, but I wouldn't say it's likely. I think one of the reasons why you see the
Israeli Defense Forces engaging in artillery and tank shelling, which is of course indiscriminate in terms of the ability to avoid targeting civilians,
that's because they're trying to put more pressure on elites in Gaza, those that are close to the Hamas leadership to show that there's going to be
real damage done if Hamas continues.
You know, meanwhile, I think if we had seen new Hamas technologies, they are using the same kind of rockets that they generally had almost 10 years
ago when we saw the last firing, we're not seeing advanced drones, for example. We're not seeing significant cyberattacks against Israel. That
would have been a game changer, the way we saw between Armenia and Azerbaijan, for example, with weapons provided by the Turks, which really
changed the balance of that war. We're not seeing that right now.
So I mean, it's horrible to see enormous amounts of violence and bloodshed, not only in terms of Palestinians in Gaza, but also increasingly between
Israeli-Arabs and Jews inside Israel proper, and it is going to be very hard to just Band-Aid over the political wounds that are going to be
emerging as a consequence of this.
But I would be surprised if it tipped into all-out war.
CHATTERLEY: There were posts this week, and to your point about the Israelis applying pressure here that Hamas asked for a ceasefire, and the
Israelis rejected it. What's the outcome here to your point if that was the request, it was rejected; how much further then does this go?
BREMMER: Well, a couple of things. Let's keep in mind that Israel doesn't have a government and that Prime Minister Netanyahu, if he had lost his
election bid as looked increasingly likely before this violence broke out, he was going to face these corruption charges, potentially be forced to
look at a jail term.
Now, just in the last 24 hours, the leader of the opposition trying to put a government together and they were very close to putting together a
coalition, Naftali Bennett has pulled out and said that they can't actually form a coalition with the number of other parties, it would have been razor
thin, including an Arab-Israeli party.
And the escalation of violence is precisely what made that fall apart. So now instead, Bibi Netanyahu is facing a fifth Israeli election and he is
still Prime Minister. So there was strong incentive for Netanyahu politically to escalate tensions, just as there has been some political
incentive for Hamas to escalate tensions because there were supposed to be elections for the first time in a decade in the Palestinian territories and
Mahmoud Abbas, head of the Palestinian Authority in the West Bank decided to suspend with no date in place those elections, in principle because he
didn't have a clarity on how they were going to have the vote in East Jerusalem, but in reality, because he knew he was going to lose to Hamas.
[09:35:27]
BREMMER: So you have two political players here, both in Israel and among the Palestinians that had incentives to make this worse.
CHATTERLEY: Does it remain contained to the Israelis and the Palestinians? I just wonder how much of a priority this is for other Arabs in the region.
I mean, we've already seen protests now popping up in Jordan.
My mind goes to the Abraham Accords, the sort of normalization agreements between Israel and other Middle Eastern nations, the UAE, Sudan, for
example. How does this play into that, if at all?
BREMMER: Well, there are two different questions. I do think it is a priority for Arabs in the region, and you will see demonstrations and
protests on the street. But that does not mean that it is a priority for the governments of the region. It is not.
You know, despite the fact that the Iranians have been engaged in significant support for organizations like Hamas, Saudi Arabia and Iran are
now engaging in direct conversations to try to broker some kind of rapprochement between them.
The Emirates have certainly condemned the violence, and they've asked for the Israelis to stand down. But this has, in no way threatened the Abraham
Accords that are brokered. Direct diplomatic engagement, a creation of relations between Israel and the UAE, Israel and Morocco, Israel and
Bahrain and closer relations with the Saudis, those things are all true, as well as for the Biden administration, I would say the prioritization of
Israel and Palestine, which of course, when Biden was Vice President, then Secretary of State Kerry spent his first year and a half, Israel-Palestine
was the absolute top priority for the Secretary of State when Biden was Vice President, it's nowhere close to that right now.
It's not for the Americans. It's not for most of the countries in the Middle East. And that, of course, puts the Palestinians in a dramatically
more difficult position.
CHATTERLEY: So, what's the most likely path to a calming of this situation, a mediation in light of all of the factors we just discussed?
BREMMER: Well, the fact that Netanyahu now lives to fight another day politically, and the fact that Hamas is in a stronger position vis-a-vis
the Palestinian Authority means that both have accomplished proximate goals for themselves in a narrow way domestically.
So I do think that you can see a ceasefire emerging in the next couple of weeks, little more punishment being meted out by the Israelis, more rocket
strikes, more violence from Hamas, but not much more than that.
And then you have, you know, of course, no resolution whatsoever on the broader issue, which is that the Palestinians don't have vaccines.
Palestinians living in Gaza have 50 percent unemployment. They've got massive hunger. They have no educational prospects, and they can't get out,
and they have no prospects at a Palestinian state.
The balance of power has shifted dramatically, and increasingly, both on the ground between Israel and Palestine and also in the broader region
towards the Israelis and I don't see anything that's going to change that in the near term future.
CHATTERLEY: It's bleak. When you put it like that, it is bleak either way.
I want to move on, because I want to get your wisdom on what we've seen in terms of the Colonial Pipeline. You tweeted: "Geeks with laptops shut down
a pipeline serving 45 percent of America's oil refineries." And that's the truth here and we were discussing earlier on in the show, Colonial it
seems, has paid the ransom to these cyber terrorists and you've been warning about this for years. The world, the United States deeply
unprepared to handle these kinds of risks, and they're escalating.
BREMMER: Yes, we just -- I mean, a cyber-offense is extremely strong on the part of government players like the U.S. and Russia and China, but also
on the part increasingly of non-state actors, of criminal syndicates.
And, you know the fact that this was a $5 million ransom that was immediately paid, they probably could have gotten a lot more than that, but
there's no defense capability of so much critical infrastructure in the United States and around the world to prevent this from happening.
What the Americans need to do, and yes, we need to invest more in cyber defenses for these companies, what we really need to do is we need to
create a cost for the governments that are harboring these organizations and know they are harboring them, that if they don't -- if they persist and
allow these organizations to make money with reckless abandon at the expense of rule of law around the world, then they're going to have to be
sanctioned in a much more serious and compelling way.
[09:40:12]
BREMMER: And that price has not been paid by the Russians so far, we're going to need them to pay it.
CHATTERLEY: And define "we." Is it a unilateral action by the United States or do we need to do it collectively?
BREMMER: The United State and American allies. I mean, this company that engaged -- this company that engaged in the hack does not attack companies
in Russia. And, you know -- but outside of the former Soviet states, they hit pretty much everybody and they even outsourced their malware and a Help
Desk, they licensed it to other organizations for a percentage of the ransom.
That kind of mature, sophisticated criminal network operating with reckless abandon inside Russia is completely the Russian government is aware of and
wholeheartedly tolerates that behavior.
And so, you're going to need to see sector sanctions, sanctions against oligarchs, targeted cyberattacks by the Americans against the Kremlin, and
against people that are close to the Kremlin, so that they actually think there are consequences from them persisting in this behavior; otherwise,
what you've just seen with Colonial Pipeline is the tip of the iceberg. This is going to expand.
There is no incentive for these organizations to in any way moderate their behavior right now.
CHATTERLEY: Yes, we need a material deterrent effect. SolarWinds and now, Colonial.
I want to move on and talk to you about India and understand what you think about what's going on there. The "Indian Express" headline caught my eye
today. I've got it online, and I can read it to our viewers. The headline says: "India feels like a ship that's totally adrift. The horror of what's
happening seems finally to have pierced the echo chamber in which Narendra Modi is sealed."
He spoke for the first time in three weeks today. He denied he said the pandemic was over. He was giving vaccines to other nations, and now, here
they find themselves, in chaos. What do you think of what's going on in India?
BREMMER: Modi preemptively declared victory over coronavirus when he spoke at the World Economic Forum virtually back in January. It was by far the
biggest mistake of his premiership to date.
And yes, the Indian government was sending out vaccines, a lot of Indians were very proud that they were able to do that. But they weren't actually
stockpiling for themselves and Modi, because he had centralized control -- remember, in the United States, President Trump was saying it's up to the
states. You guys have to get it done.
Now, in India, Modi took responsibility himself and then declared victory himself. And then as it started to explode, he disappeared. And it has been
a disaster where the Indian people feel like they have no one to turn to, they are on their own. And we've seen the record levels of cases and deaths
in India, they are the epicenter of the global pandemic today. You're going to see a lot more spread globally, you're going to see a lot more variants
globally, as a consequence of that being completely unchecked.
You're also seeing a suspension of Indian vaccine export and they are the largest producers of vaccines in the world. Modi clearly is going to face
consequences for this going forward.
CHATTERLEY: Very quickly, what consequences?
BREMMER: Well, his popularity is going to decrease. We'll see what happens in upcoming elections. I expect that he is going to -- he is going to feel
it in the polls and whether or not Modi -- I mean, for the last couple of years, Modi has been this untouchable, democratic, strongman in India, even
as he makes mistakes in rolling out demonetization or going after the farmers and the big demonstrations. This is by far the biggest hit to his
administration.
He is not facing re-election himself anytime soon, but his party is in states across the country. I expect they're not going to perform well.
CHATTERLEY: Ian, great to get your wisdom. Thank you so much for joining us today. Ian Bremmer there, President of Eurasia Group and GZERO Media.
Thank you.
More next. You're with FIRST MOVE.
(COMMERCIAL BREAK)
[09:47:27]
CHATTERLEY: Welcome back to the FIRST MOVE. Fully vaccinated Americans now allowed to shed the masks and putting vaccinations at work in the spotlight
is the CEO of Delta Airlines. He told our Richard Quest all new hires must be vaccinated before they start their job.
Delta has converted its flight museum into one of Georgia's biggest vaccination centers. Ed Bastian gave Richard an exclusive tour.
(BEGIN VIDEOTAPE)
ED BASTIAN, CHIEF EXECUTIVE OFFICER OF DELTA AIR LINES: Well, we have been involved with testing right through the pandemic. So we're testing all of
our employees every single week, tens and tens of thousands of thousands of our employees to keep them safe from the disease and understand the
asymptomatic spread. So -- and we're working very closely with CVS in doing that.
So it became natural when the vaccines came available that we already had the apparatus in place to then start turning it into vaccinations rather
than just simply testing, and we worked with the State of Georgia, and they not only have provided us allocations to do our people here in the museum,
but outside in our parking lot, we have drive-thru windows where we're doing up to 5,000 people a day.
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: Five thousand a day?
BASTIAN: Five thousand a day.
QUEST: So --
BASTIAN: Incredible. So, here we go. So here, we're coming to the Jet Age.
QUEST: Absolutely.
BASTIAN: So we -- we're coming into the Jet Age here in the museum, and we've moved from the registration area and now to the actual vaccination
center where you're going to get vaccinated.
QUEST: COVID-19 vaccine. Wow. Now, that's what you call a vaccination center.
BASTIAN: So that's what we call a vaccination, right under the Spirit of Delta.
QUEST: So are you going to require your staff, bearing in mind, you've pretty much vaccinated the entire workforce and their families.
BASTIAN: Yes. We have -- we have well over 60 percent of our employees have had at least one shot. So we're on our way and I expect we'll get to
somewhere between 75 and 80 percent of our employees vaccinated. I'm not going to mandate and force people, if they have some specific reason why
they don't want to get vaccinated, but I'm going to strongly encourage them and make sure they understand the risks to not getting vaccinated.
One caveat to that though, any person joining Delta in the future, future employee, we're going to mandate they be vaccinated before they can sign up
with the company.
QUEST: Right. So, there will be a requirement to be vaccinated to become a Delta employee?
BASTIAN: For the future, but anyone that is already here as an employee, I don't think that's fair to someone to force them to get vaccinated if
there's some philosophical issue they have.
QUEST: Right. But we've got philosophical issue, consequences in a sense as you would say to them, all right, it's your right not to be vaccinated,
but you can't do this or we're going to require you to do this.
BASTIAN: That's right.
QUEST: Or you have to have weekly tests or the other.
BASTIAN: That's exactly right.
QUEST: Is that what you're going to do?
BASTIAN: Yes. For example, you probably will not be able to fly an international flight if you are not vaccinated because it's going to be
mandated by local authorities in order to get into a country that you're vaccinated.
(END VIDEOTAPE)
[09:50:15]
CHATTERLEY: Wow, a look at the future. More FIRST MOVE after the break.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. Commission free trading apps have been opening up stock markets to millions of new investors, but financial
education is becoming a key issue with some platforms criticized for allowing novices to invest in risky assets.
In today's Think Big, Isa Soares takes a look at a new trading app in Dubai that focuses on education.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Here's what's up in the markets. Stock markets around the world slipped on Tuesday as investors --
ISA SOARES, CNN CORRESPONDENT (voice over): This is not your usual morning bulletin. It's the first of many podcasts that will educate a new
generation of online investors in the Middle East.
THOMAS HAYES, CHAIRMAN, GREAT HILL CAPITAL: I think we're seeing a boom of these online trading platforms right now. Everyone has access to
smartphones. So it's really easy access. You're seeing a lot of self- directed people because commissions are now zero.
SOARES (voice over): Free trading has encouraged millions of amateurs to invest and get involved in the markets. It's a trend that has been
accelerated with the access from platforms like Robinhood and eToro.
Retail investors accounted for around 20 percent in U.S. stock trading volumes in 2020.
In the heart of Dubai's financial district, entrepreneur, Feras Jalbout wants to help new investors in this part of the world navigate the world of
finance.
FERAS JALBOUT, FOUNDER AND CEO, BARAKA: The next big idea is educating, enabling and empowering Middle East investors with a commission free
investment platform.
SOARES (voice over): Jalbout is launching a new platform called Baraka that will help you amateur traders invest in the U.S. stock market.
JALBOUT: Baraka is a mobile app. You transfer funds into the account and you can start investing right away. The idea is that it is accessible, it's
easy to use.
SOARES (voice over): What makes this app different is the way it aims to educate its new investors providing access to educational content and
information about trading.
JALBOUT: A lot of people in Mena didn't even know what a stock was. We found that there's a massive gap in the market, whether it was related to
educational content or current events that spoke to our demographic.
SOARES (voice over): A team of web designers and finance experts produce videos, newsletters, infographic explainers and morning podcasts.
HAYES: The main risks and the mistakes that new traders make is they try to make too much money too quickly. They don't do enough research and
homework so that they know what they're doing and they know what they're owning on the underlying basis.
SOARES (voice over): Jalbout believes raising financial awareness and his platform is key to reducing risks as he continues his mission to
democratize the financial markets.
JALBOUT: We don't expect everyone to be a professional hedge fund manager or professional investor, but we just want to get people invested.
[09:55:08]
SOARES (voice over): Bridging the gap between the professional brokers and the amateur investors.
Isa Soares, CNN.
(END VIDEOTAPE)
CHATTERLEY: And finally, cartoon lovers of a certain age will remember this catch phrase from their youth.
(BEGIN VIDEO CLIP)
HE-MAN, FICTIONAL CHARACTER: I have the power.
(END VIDEO CLIP)
CHATTERLEY: Great hair. Oh yes, back in 1982, "He-Man and Masters of the Universe" reigned supreme as a massive cartoon and merchandise tie-up.
Well, now, the Masters are coming back with a new animated series coming to Netflix in July and expect plenty of lucrative collectibles to boot.
We are promised all the old characters with Mark Hamill from "Star-Wars" doing the voice of Skeletor and "Buffy" star, Sarah Michelle Gellar as
Teela. There she is. Oh, she is running in there to get some clothes. Yes.
That's it for the show. If you have missed any of the interviews today, they will be on my Twitter and Instagram pages. Search for @jchatterleyCNN.
Stay safe. "Connect the World" with Becky Anderson is next and I'll see you next week.
(COMMERCIAL BREAK)
[10:00:00]
END
