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First Move with Julia Chatterley
Bitcoin and Ether Hit Record Highs; GE, the U.S. Conglomerate Splits into Three; Four Astronauts Survive Six Months in Space and a Broken Toilet. Aired 9-10a ET
Aired November 09, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need-to-know.
Cryptos crescendo. Bitcoin and Ether hit record highs.
GE whiz. The U.S. conglomerate splits into three.
And SpaceX splashdown. Four astronauts survive six months in space and a broken toilet.
It's Tuesday. Let's make a move.
A warm welcome once again to FIRST MOVE in another reinvigorating show for you today, a remarkable run for global stocks continues as investors
celebrate growth re-buildings and reopenings and a splashy re-entry for SpaceX astronauts, too, and rejoicing in tech landers, Alphabet's market
cap hits $2 trillion.
In the meantime, no retreat for U.S. inflation. Data today shows prices of factory goods rising some 0.6 percent last month, a more than 8.5 percent
jump year-over-year. That is the highest on record, just to give you a sense of what we're seeing and it's a record repeat on Wall Street to with
tech on track to hit new all-time highs. The S&P in fact looking for its ninth straight record close, already the longest stretch of records in
fact, since 1997.
Global infrastructure stocks the big winners following the $1 trillion deal struck in U.S. Congress. Airlines advancing too as international tourists
surge back to the United States, lifting recovery and reflation. Stocks in retail and leisure.
No leisure allowed at Robinhood, the trading platform hoodwinked by hackers that accessed a list of five million e-mail addresses, two million names,
though the firm says just a "limited number of people," quote had more info exposed. We are talking a few hundred, I believe. A ransom request was
made. No compensation has been given on whether it was paid or not, shares down just shy of three percent as you can see that premarket.
And a revitalized share price for SoftBank over in Asia. As we said yesterday, a monster $9 billion buyback plan forgives all earnings since.
That stock gaining more than 10 percent in Tokyo trade.
Lots to discuss. Let's get to the drivers, and Christine Romans joins me now.
I'm going to quote FDR this morning, Franklin Delano Roosevelt, "There's nothing to fear, but fear itself." Christine, our Fear and Greed Index is
showing extreme greed at these levels.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Yes, not just greed, but extreme greed and that is what fuels Wall Street, right, fear
and greed. And right now, it is all greed and you see it sort of across the board here. But there are powerful fundamentals behind that feeling of
euphoria.
There was no taper tantrum, right? The Fed is slow and steady, going to take its foot off the gas here and tap the brakes maybe sometime next year.
Corporate earnings this quarter have been quite fantastic in many cases, managing wealth through the supply chain chaos. These are the big companies
I'm talking about. Small companies, that's a different story there.
The economy appears to be strong, and when you look at the labor market figures from last week and expectations for many economists for maybe
million job net added prints in the months ahead that shows you that this is an economy that is bouncing back.
So this has been a good mix of fundamentals for investors here, even as consumers in the U.S. and American families are maybe souring a little bit
on the economy because of gas prices. And because of inflation and sort of their pocketbook issues. We'll see if this big infrastructure spend that
the President will sign into law is something that will start to be felt in the coming months that maybe can help reverse some of that pessimism.
CHATTERLEY: Yes, and those inflationary pressures are only a problem if you think at least for investors, if you think the Federal Reserve is going
to act on it and they continue to reiterate that this is something of course that is going to go away and they are going to sit tight and not
perhaps tighten or over tighten, which only then becomes a concern for investors. So, a sweet spot for investors, a problem for consumers to your
point.
What we're also seeing and it's not just about stocks and it is not just about bonds and those kinds of asset classes, it's also attentive asset
classes like the crypto space as well and we see as I mentioned at the top of the show, Bitcoin and Ether at record highs.
[09:05:14]
ROMANS: Yes. I mean, some of these numbers are pretty eye popping, right. And then the daily moves of some of these cryptocurrencies, you know, is
astonishing. Yet, it gives -- it feeds into that whole greed picture, doesn't it?
The fundamentals for me, at least when I'm looking at crypto are a little more squishy than when I'm talking about, say the S&P 500, but you can see
that there is enthusiasm and there is money moving in this sector.
We can debate whether this is made up of internet money that doesn't really hold any value, or whether this is some alternative asset class that is the
wave of the future. That's a debate for another time. I'm just saying that the whole picture right here is a lot of things going up bond yields still
low and a sweet spot for investors overall.
Let me -- you know, the typical investor is invested in the S&P 500, right, and for the long term. That's up 25 percent so far this year, Julia. It's
just remarkable. It has doubled since the bottom after the coronavirus crash.
I mean, just where you know, your traditional blue chip plain vanilla stock investment has gone over the past year, it is just astonishing.
So I get all the energy over in crypto. Yes, there is money to be made quickly there, too. But wow, the boring investments have done quite, quite
well.
CHATTERLEY: Yes. I couldn't agree with you more, quite frankly, and as you said, infrastructure spending perhaps even more spending to come as well if
you're looking for more fuel for the fire of rallies, whatever asset class you're looking at.
Christine Romans, thank you so much, as always.
And you can stay with FIRST MOVE for more on the crypto highs and some of the underlying technologies, too. Later, I'll be speaking to you Brian
Brooks, the new CEO of crypto miner, Bitfury. They've got a lot more going on actually than just mining, we shall discuss.
Okay, let's move on.
Breaking up. General Electric, the industrial giant founded back in 1892 is splitting itself into three -- aviation, healthcare and energy divisions,
will each become separate publicly traded companies, and Anna Stewart joins me now.
I mean, this has been a work in progress for many, many, many, many, many years. I could do a few more many's there, but it really does feel like the
end of the conglomerate era and the untangling and the unbundling, I think of Empire GE and the share price reaction, I think is what we have to focus
on here first and foremost.
Investors liked what they heard today.
ANNA STEWART, CNN REPORTER: Yes, the share price up some 12 percent in premarket. Can't wait, see what it is going to do on the open. How
interesting is that? Investors really think that this company will be stronger divided, and Julia, that is despite a hefty price tag on this
strategy of over $2.5 billion.
Now healthcare is going to be spun off, it says in early 2023. That will be followed by energy, which brings together renewable energy, power, and
their digital units that will follow, as I said in early 2024, and that will lead GE as an aviation focused business.
Why? Well, in his statement today, the CEO said, by creating three industry leading global public companies, each can benefit from greater focus,
tailored capital allocation and strategic flexibility to drive long-term growth and value for customers, investors, and employees.
Now, Culp will remain a CEO and the Chairman until the second spin off. He will then be the leader of the aviation focus business, with a CEO for each
of the other three units.
There have been so many defining moments in GE's history, but I think this might be the biggest one to date -- Julia.
CHATTERLEY: But going back to 2017, and asking whether in the end, the focus for investors would be the three separate companies that we're now
talking about, and when the dust settles, GE just being an aviation or an aerospace company, and that's what we're looking at, at this moment. It's
hard to believe, if you go back in time, Anna, and track the history of where this has been.
I mean, this is a company that at one point owned NBC Universal Studios. It was a monster bank. It had insurance properties, and even when it is
stripped back now under the guise of -- and the work that that Larry Culp, the CEO has done, it still a monster business. It still employs so many
people,
STEWART: Over 160,000 employees across 170 countries. But you're right, you know, this was the lightbulb company. This has had so many chapters to
its tome of its history. And of course, not all of them a success. Just as it sold off its iconic lightbulb business, there have been big failures,
whether we look at its finance arm, which of course nearly sank the whole of GE following the financial crisis, or whether we look at other things
that were on the chopping block. For instance, as disasters move into coal fuel power, only five years ago.
Nothing is too sacred to be stripped from GE. They have made that very, very clear. And as you say, I think they're really focusing and doubling
down here on three very clear businesses, all very forward looking, all looking to the future -- aviation, healthcare, green energy. This is what
investors want to see and you can see them celebrating that share price, but we'll wait for the market open for more on that Julia.
[09:10:10]
CHATTERLEY: Anna Stewart, thank you so much for that.
Okay, let's move on. In China, embattled property giant, Evergrande, raising about $150 million ahead of another deadline for interest payments.
It sold a chunk of it shares in a media company to raise cash as Selina Wang reports, the crisis at the company is signaling the end of a high-
growth business model in the world's second largest economy.
(BEGIN VIDEOTAPE)
SELINA WANG, CNN CORRESPONDENT (voice over): Top celebrities disappear from China's internet, Chinese tech companies reel form regulation, and now
Evergrande, China's biggest property developer with $300 billion in unpaid bills teeters on the brink of collapse.
For Chinese leader Xi Jinping, it is all part of the plan. Xi is rewriting the rules in the world's second largest economy.
WANG (on camera): Getting rich is no longer glorious, neither is growth at all costs. The days of unrestrained borrowing that turned Evergrande and so
many companies into powerhouses are over.
LELAND MILLER, CEO, CHINA BEIGE BOOK INTERNATIONAL: There has been a decision at the very top that this buildup of reckless credit expansion is
becoming a danger to China and presumably a threat to the party rule.
WANG (voice over): Evergrande rode the boom of homebuyers rushing to urban cities as hundreds of millions across China were lifted out of poverty,
building more than a thousand developments in hundreds of cities.
Properties supercharged the economy, ballooning to account for as much as 30 percent of China's GDP.
By 2017, Evergrande's founder, Xu Jiayin became Asia's richest person. Evergrande expanded into bottled water, electric cars, even pig farming.
The strategy worked until China's economy cooled and Beijing started to crack down on excessive borrowing from property developers.
Beijing's stated goal: To lessen economic inequality as housing prices skyrocketed and to create more sustainable growth.
The stakes are too high for Beijing to let Evergrande fail. Nearly three quarters of household wealth in China are estimated to be tied up in
property.
In September, footage circulated of employees, contractors, and home buyers protesting Evergrande across China. CNN spoke to multiple buyers of
Evergrande properties. One provided CNN with these videos of people demanding their money back. The buyer told CNN that more than 900 people
have paid $340 million for this unfinished housing project that's been stalled since January.
Angry citizens have flooded online government feedback forms. This homebuyer in Sichuan Province asked for all of their hard-earned money had
went begging, "Please uphold justice for your people."
RANA MITTER, PROFESSOR OF POLITICS OF MODERN CHINA, UNIVERSITY OF OXFORD: If you talk to people about what might cause mass protests in China, the
answer you'll almost always get is it's not democracy, more and more its finance and its property.
WANG (voice over): Beijing says the situation is controllable, but fears grow of a crisis in China's real estate sector that ripples into the
broader economy.
In recent weeks, a slew of other developers have disclosed their own struggles.
MILLER: When you're decelerating or popping the property bubble, you're destroying wealth. You are going to be putting people out of business,
companies out of business. It's a big deal. It's why it's never happened before.
WANG (voice over): It marks the end of China's economic model as we know it.
MILLER: We are going from an area of high to medium growth to an area of low growth in China.
WANG (voice over): But Beijing is betting its top down model will make its 1.4 billion people prosperous.
The catch: Ever more control in the hands of the party.
Selina Wang, CNN, Tokyo.
(END VIDEOTAPE)
CHATTERLEY: And a splashdown. Four astronauts are safely back on Earth having spent six months in orbit. They were pulled from their SpaceX Crew
Dragon capsule after landing in the Gulf of Mexico overnight.
The capsule had suffered one major glitch, a broken toilet. Kristin Fisher joins us now.
Oh, no. And it is nine hours I think the journey back, Kristin, if I'm not wrong.
KRISTIN FISHER, CNN SPACE AND DEFENSE CORRESPONDENT: That's right. You know, Julia, I mean, this is something that believe it or not, astronauts
train for. I mean, astronauts are actually quite well-versed in having to deal with diapers, although NASA prefers to call them undergarments.
And when there was a press conference with the crew to astronauts before they hopped on that Crew Dragon capsule to come back to Earth, they
described the situation that they found themselves in as quote "sub optimal."
So that is kind of the mindset that they were taking heading into this because keep in mind, they had been on the International Space Station for
about six months. Now granted, they did have a working toilet on the Space Station, but they encountered quite a few other issues during their time in
orbit.
They were the crew that had to quickly hop into the Crew Dragon capsule in their spacesuits because there was a fear that they were going to get hit,
the Space Station was going to get hit with some kind of debris in orbit. It turned out to be okay, but a very scary start to their mission in orbit.
[09:15:10]
FISHER: This is also the crew that had to deal with the Nauka module from the Russian Space Agency, inadvertently firing its thrusters, spinning the
space station slowly, but spinning it out of control for about an hour and a half, another pretty anxiety-inducing moment to say the least.
And then on the descent, during the re-entry into the Earth's atmosphere right before splashdown last night, only three of the four parachutes fully
deployed. That fourth parachute finally deployed. There was no problem with splashdown.
But you know, it did, I'm sure probably get the adrenaline going for some folks in Mission Control. And then on top of all that, of course, they had
to wear diapers for that nine-hour trip back, not a major issue. They knew that this was -- they did this out of an abundance of caution. There was
essentially a leak in the tube that collects urine and they found it on a previous Dragon spacecraft, and they found it to also be the same with this
Dragon spacecraft.
It's a quick fix back on Earth, but in space, tough to do, so diapers or undergarments it was.
CHATTERLEY: Undergarments, exactly, sounds like a very British thing to talk about. And there they were thinking when they went up there that the
spiciest thing that was going to happen was growing hot chilies, which I believe they also did.
What did you call it again? Sub optimal.
FISHER: Sub optimal, yes. I hope they ate those hot chilies long before they headed back to Earth.
CHATTERLEY: I wasn't going to go there, Kristin, but thank you for that, relying on you.
FISHER: I'll go there for you.
CHATTERLEY: Kristin Fisher, thank you so much for that. I'm sure the astronauts are not thanking us at this moment, yes.
Okay, still to come on FIRST MOVE, mining net zero. Leading mining companies say decarbonizing one of the world's dirtiest industries can be
done, and we'll talk about how.
And tailwinds only, shipping giant, Maersk, one of the few winners in the supply chain crisis. Its CEO on how it intends to use the boom.
Stay with us. That's all coming up.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. It's looking like another Tech Tuesday on Wall Street. The NASDAQ set for fresh all-time highs once again
today and a bit of early session softness for the Dow amid a Tuesday torrent of news, another hot read on U.S. factory level inflation and a
breakup of one of the most storied U.S. conglomerates, General Electric.
[09:20:10]
CHATTERLEY: GE as we've discussed already splitting into three separate companies.
No roadblocks meanwhile, for Roblox. Shares of the video game developer surging more than 30 percent premarket after reporting a doubling of Q3
revenues, and a 31 percent year-on-year jump in daily active users.
Few spelling errors, too at Alphabet. Shares a bit softer premarket, but the company's market cap briefly hitting $2 trillion on Monday, only the
second firm to hit that bolted level after Microsoft and Apple. Alphabet, currently up more than 70 percent year-to-date.
Now, while the COP 26 Summit has meant a relentless push towards renewable energy and a focus on reducing emissions, it's easy to forget that much of
the technology needed to help us achieve it relies on what's considered one of the most polluting industries -- mining.
To name just three mined metals, copper used in power networks, cobalt, and lithium makeup key components for batteries in smartphones and electric
cars. The question is how do we find the balance?
The International Council on Mining and Metals is trying to do just that. It represents around a third of the world's mining industry including
Glencore. The Council is pledging a net zero carbon emissions target by 2050 or sooner.
Rohitesh Dhawan is the CEO and he joins us now. Rohitesh, fantastic to have you on the show. As I mentioned there, you represent around a third of the
global mining and metal industry, just explain who your members are, and most importantly, who you don't represent and where in the world they are.
ROHITESH DHAWAN, CEO, INTERNATIONAL COUNCIL ON MINING AND METALS: Julia, the International Council on Mining and Metals comprises 28 companies
ranging from those in the East all the way to those in the West. They account for sites that exist in over 50 countries, 650 sites in total from
the deepest gold mines in South Africa to the largest copper mine in Chile, and they account for a third of the global mining and metals industry.
And they come around the same table at the ICMM to find solutions to the most pressing sustainability challenges. So that as we supply the metals
that you referenced, that will form the backbone of the energy transition, we do so as responsibly as possible.
CHATTERLEY: Yes, we learned recently on the show that where the greenhouse gases are coming from when you're talking about the mining industry is to a
huge part, the vehicles that transport the materials, the metals, whatever it is that is actually mined.
And in certain cases, it can be as much as 80 percent of what we're seeing in terms of the mining operations that directly contribute to the
greenhouse gases. So, in order to reduce your carbon footprint as a miner, you need a solution to transport and the dirtiness of transport that's
required.
DHAWAN: That's right, Julia, because currently, the technology that's available to us means that the only way to transport the kind of materials
we need to transport as we mined these commodities, is to run these trucks on diesel. Some of them consume up to 3,000 liters of diesel every single
day because of the demands on power.
And together, there are about 28,000 such mining vehicles in operation today together accounting for about 68 million tons of CO2 every single
year. So there's a huge focus, Julia, on making sure that we can deploy alternatives to diesel as quickly as possible, and those alternatives will
be a combination of electric technology and trucks that run on hydrogen.
But we are with mining vehicles, where perhaps we were with the cars that we all drive 10 years ago. So 10 years ago, if you wanted to drive an
electric car, you probably could get your hands on one, but it wasn't readily available, the infrastructure didn't exist to make that happen.
Now in mining, those trucks are simply not available at scale yet and we've been working really hard with the manufacturers of the vehicles to
accelerate the development and the deployment of the vehicles across all of the main sites for all 28 company.
CHATTERLEY: You know, it's fascinating, and this is where I sort of took the conversation in the introduction for a purpose. The irony here is not
only as you were saying, we still need to see greater investment and at scale in alternatives to the vehicles required to reduce the carbon
footprint of mining, but also the materials required for those electric vehicles and the lithium ion batteries that we're talking about require
mining, too, and sometimes in difficult to reach places, poorly governed places, poorer nations as well.
You wrote a fascinating blog post about this, too.
[09:25:00]
DHAWAN: That's right, Julia. Just to give people a sense of what we're talking about here, an average electric car takes six times the metals that
your petrol or diesel car takes. But think about multiplying that across every car on the road and you get a sense of how many more metals and
minerals we're going to need to power this transition.
And so, it is incumbent on us as the industry and the partners we work with, to make sure that those are produced as responsibly as possible,
because the last thing we want to do is work towards solving one major challenge, which is climate change, but end up creating a whole host of
other problems as we do so.
The way to guard against that, I believe, is taking really strong leadership positions on the most important issues that ensure that those
metals are produced as safely as possible, as sustainably as possible and where the benefits of the production of those metals are shared as widely
as possible in the countries in which they are produce, because as you say, Julia, a lot of that occurs in places where there is a desperate need for
further development.
CHATTERLEY: I mean, in your blog, and I'm going to quote you: "Over the last 25 years, the number of mining-dependent countries has increased.
These 34 countries are now home to 30 percent of the global population, including 450 million that live on under $1.90 per day."
We have to understand that our renewable future is relying on some of the poorest nations in the world, weak governance structures at times. You
know, my conversation was going to begin before I read your blog post, and I did a bit more research on this. Is 2050 to get to net zero for some of
these mining countries -- companies and countries ambitious enough? But after reading this, I realized that the challenges here are vast.
DHAWAN: That's right, Julia, and that's why so much of the conversation here in Glasgow, and I'm coming to you right here from COP 26 has been
about how to make sure that this transition that we absolutely have to make is just.
Now, when we say just, what we mean is, we leave nobody behind because so many countries are dependent on the mining and metal sector for their
development. So, in that same blog, I talk about how, in the last 25 years, the number of countries that are mining dependent has increased over the
last two decades.
And here is what's really interesting, Julia, the countries where the mineral resources are governed maximally and most responsibly have seen
their rates of growth and development as measured not just by economic growth, but overall wellbeing substantially greater than countries where
governance is poor.
So we at the ICMM work really hard with our partners in government and with organizations like the Extractive Industry Transparency Initiative to
encourage governments to take on the highest standards of governance, because if we do this right, then not only will we supply the materials
that will enable the transition, but in doing so, we will also enable the development of many of the parts of the world that you've just referenced.
CHATTERLEY: Yes, and I know you're tracking the progress in 650 sites in 50 different countries and Rohitesh, it's just the beginning of the
conversation. Come back and talk to us again soon because I learned a lot just from preparing for this conversation and it's all part of the action
and information that's required to tackle the emissions and bring those reductions into play.
Rohitesh Dhawan, thank you so much. The CEO of the International Council of Mining and Metals. Great to talk to you today.
The market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:31:36]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running this Tuesday and as anticipated, tech is the best performer, but the S&P
500 is also at fresh records, too. Let me give you a look as we've talked already about GE shares leaping higher on news that the industrial giant is
splitting into three separately traded companies. Oh, look at that though, 5.5 percent less than we were anticipating premarket. Now focusing on
aviation, energy, and healthcare at a cost of just shy of $2.5 billion, they believe, the separation cost of achieving this.
In the meantime, oils still in a sweet spot higher for a third straight session. JPMorgan saying all demand now close to pre-pandemic levels. Brent
crude up almost 70 percent year-to-date, natural gas rallying more than 100 percent.
Energy, though not the only gainers. We've seen huge commodity price jumps this year is supply chains grow under the weight of reopening demand. Food
inflation, a particular concern especially for those having a hard time making ends meet. Oat prices up more than 95 percent so far this year,
wheat rising 20 percent. Other commodities, also soaring, cotton up 50 percent. Coal up more than 100 percent, too.
Price pressures of course tied to the post COVID surge in demand and supply chain bottlenecks that include all forms of logistics, including labor
costs, trucking, and container ships. Something Maersk, the world's largest container shipping company knows all about. They handle one in five
containers shipped around the world.
Joining us now is Maersk CEO, Soren Skou.
Fantastic to have you on the show, sir, as always, and it may be problems for some. You're also a beneficiary of this. I know you posted your best
results in your 117-year history in the last quarter. Your message though, as far as the supply chain bottlenecks is, things could get worse,
particularly in ports like Los Angeles and Long Beach where, of course, the U.S. government is trying to take action to improve it. What are you
seeing?
SOREN SKOU, CEO, MAERSK: Well, right now, I'm afraid we cannot see any improvements in the short term. I just asked my team in Los Angeles,
there's currently 79 ships waiting outside Los Angeles and Long Beach and of course, it will take quite a long time to clean up that long a queue.
The issue is really on the shore side in the sense of lack of labor, a lack again in the ports of Longshoreman, but also most importantly, lack of
trucking capacity.
CHATTERLEY: Yes, I mean, the government, as I mentioned, said, look, we can operate these 24/7 to try and ease the burden, but if you're talking
about labor being a problem, and other issues like that, then 24/7 surely is not going to address the problem as you're kind of indicating.
SKOU: Yes, yes. I think, the biggest issue for us right now is clearly lack of trucking power.
CHATTERLEY: What mitigation efforts are you taking?
SKOU: Look, I think a lot of mitigation is in routing cargo in other ports in Los Angeles and Long Beach to Canada, to the East Coast of the U.S. are
obvious choices. But all of that, of course also complicates already established supply chains.
But that's really what we can do, of course for ourselves where we cannot control warehouse space, we are also paying much higher salaries to get
people to come to work.
CHATTERLEY: Can you give me a sense of how much more, like in terms of percentages?
[09:35:10]
SKOU: Yes, 25 to 30 percent than pre-COVID, so quite a lot. Most importantly, of course, we have also added a lot of capacity -- ship
capacity in the Pacific. So today, we are deploying around 50 percent more capacity in the Pacific than we did in 2019 pre-corona. Unfortunately, a
lot of that capacity is not used to carry more containers, it's being used to sit in a long line outside Los Angeles and Long Beach.
CHATTERLEY: And you're also investing what -- I believe, around a billion dollars in your air freight offerings as well. So it's not just about
trying to mitigate via water, it's also looking at alternative transport options in general.
SKOU: Indeed, I mean, we are in -- at most, we are transforming from what used to be quite diversified conglomerate five years ago to being a global
logistics provider. As part of that journey, we want to have, if you will, all modes of transportation on the shelf to sell to our customers.
CHATTERLEY: You know, there will be people that look at this and look at what you were saying in terms of Q4 going to be strong, Q1 of 2022 is going
to be strong and tied to what we're seeing in COP 22, and saying, you've actually never been in a better position to start investing for a greener
energy future. At the same time, you're announcing an increase in stock buybacks.
Is that the right perhaps message to be sending, to, we distribute cash back to shareholders, when actually the time has never been more important
to be investing perhaps in, as you are, in your greater logistics operations, but also making them greener, wherever possible.
SKOU: Where we are, we are in fact doing both. I mean, about a quarter ago, we announced that we were going to buy up to two eight plus four, so a
total of 12 large container ships that can use green fuels, that's the first such order in the world.
Today, there are no production of green fuel for ships. So, we hope that we will get that established between now and 2025 when we're going to need a
lot of green fuel. So, we are certainly investing in a green future.
In 2018, already, we set a target of becoming carbon neutral by 2050. And now, three years later, we actually believe we have a quite clear pathway
to achieving that. And that pathway will go through moving from the heavy fuel we used today to green methanol or possibly green ammonia within the
next decade.
CHATTERLEY: You know, it's quite fascinating, and I would love your wisdom on this, I'm going to reveal what my personal life looks like, because I
was looking through the Danish Ship Finance Report, which I believe is a semi-annual release, and it was saying that the eight carriers that you're
investing in currently require the entire available production of green energy in Denmark in terms of the fuel.
And I just worry that given the excitement around COP 26 and this enormous push to move to renewables, we're forcing juggernaut companies like you to
invest in technologies that are unproven and risking perhaps that you end up making these big investments in what becomes stranded assets, if the
technologies of renewable energy move in a different direction.
How do you, as a CEO, make the decisions on these kinds of investments under pressure, I know, but without sort of knowing what the future is
going to bring, ultimately.
SKOU: Well, first of all, in Maersk, we are convinced there is a climate crisis. And secondly, we are also convinced that we are part of the
problem, and also that we are, as one of the leaders of our industry actually have to take action.
And with investment, it's a $2 billion investment in these eight plus four ships. We're basically putting our money where our mouth is, as you will be
sending a demand signal. Today, there's a chicken and egg problem in the sense that there are no ships using green fuel because you cannot buy green
fuel. But also they is nobody selling green fuel because there are no ships using it.
So at least we are making a step now, a first step on the ship side, and then we hope to with this demand signal that we will also create production
of green fuels going forward.
Actually, I'm quite convinced that we will be able to achieve that by 2025.
CHATTERLEY: Yes. That's so important. Someone has to take the step and then you create the demand that supply follows. Sir, always brilliant to
chat with you. Thank you so much for joining us today.
The CEO of Maersk there. We wish you well and we will speak to you soon. Thank you.
Okay, up next, crypto highs. Bitcoin and Ethereum hit record. We speak to the newly minted CEO of Bitfury. Up next.
(COMMERCIAL BREAK)
[09:42:31]
CHATTERLEY: Welcome back to FIRST MOVE. New highs for the world's two biggest crypto currencies, Bitcoin and Ether set records early Tuesday.
Bitcoin hit $67,000.00 in October, then still as much as 12 percent today touched $68,530.00. Wow. Just to be specific.
That's good news for crypto miners such as Bitfury, which has just hired the former U.S. Head of Finance as its CEO. And joining us now is Brian
Brooks, CEO of Bitfury.
Brian, always a pleasure to have you on the show. And I know, Bitfury has got a lot more going on than just mining, and we'll talk about that. But
first, I just want to get your take on what is now more than a $3 trillion market. What's driving prices?
BRIAN BROOKS, CEO, BITFURY: Well, a lot of things are driving prices, Julia. The most recent thing, of course, is the announcement of Bitcoin
future ETFs. That's a big thing. It's not big enough, but it's a major regulatory development that signals some path forward for the industry.
Also, the global economy looks very fragile. We could be recovering, but we could be facing high inflation. Bitcoin responds to that.
CHATTERLEY: And tied to this, and I'm sort of surprised a little bit that the market is not more concerned is some of the contours and the details of
what's in the U.S. infrastructure deal that was just signed.
Brian, how should we be taking some of the rules -- regulations, let's call them that that is contained within that agreement?
BROOKS: Well, the agreement says as much about the state of American democracy as it says about equity, Julia, and I'll tell you what I mean, by
that. I mean, many of your viewers will know, the bill has a provision, which requires not just traditional exchanges, but software developers,
decentralized finance protocols, all kinds of other things to report tax, you know, gains from people who participate in those protocols.
And yet the whole point of crypto is to allow for peer to peer transactions without an intermediary. So what the bill basically says is kind of like if
you asked a newspaper for a report on the taxation of transactions between its readers and the classified ad pages. I mean, the newspaper doesn't,
people are transacting with each other. Right?
And there are criminal penalties behind that. So, that's a little bit crazy. But the reason there's some hope is we know that a majority of House
members and a majority of senators actually oppose that language. We know that because a few months ago when the bill was being debated, 55 senators
in the Senate side and a number of House Democrats on the on the House side, oppose this language. So we expect it will eventually get cleaned up,
it's just a weird feature of American democracy that the majority doesn't always win.
[09:45:05]
CHATTERLEY: Yes, I mean it does feel like -- and you can give me your sense of this more that we're looking at a future of finance that under
Democrats rule here is far more controlled government oversight, to your point, and I think your analogy there with a newspapers is a brilliant one,
versus the image of what I think the crypto community and particularly for the underlying technology sees, which is a far more hands off,
decentralized, swifter, more efficient version of finance, and the banks, I guess, lie somewhere in the middle.
Are we headed off in that direction? Because I see huge challenges coming if particularly under this government, they are trying to head in one
direction and the crypto community is clearly heading in a different direction -- diametrically opposed option actually.
BROOKS: Yes, Julia, that is a great way of thinking about it. I mean, the way I've thought about it is for 150 years in the United States, we've had
this tense balance between public and private visions of finance, and the way we've balanced that is we've had these things called banks that sit in
the middle of the government on the one hand, and the people on the other hand.
This administration seems to want to move us away from the bank-centric model into a world where the government and specifically the Federal
Reserve control payments, control credit allocation, ultimately control the financial system. And the product of crypto is to move finance into the
hands of people, of actual users, so that they're not dependent on a central authority to make their decisions for them. That fundamental
philosophical debate is going to drive a lot of our politics over the next few cycles.
CHATTERLEY: But you're comfortable enough to be at a company like Bitfury in the interim, you're not worried perhaps about overreaching oversight and
confusing regulation.
BROOKS: Look, Julia, I think one of the roles that I can play is to be a voice of reason between these two sides. I mean, obviously, I ran the
banking regulator for a while. And my vision is ultimately we run that for the benefit of the users, not for the benefit of the government. So I think
most people will agree with that.
CHATTERLEY: Okay, so talk to me about Bitfury, and I mentioned the mining aspect of this, and of course, I'm sure as you work to raise money, as you
invest and you grow, and I know actually expanding the footprint as far as mining is concerned, particularly in light of what China has done, of
course, with the crackdown there, isn't the first question that you keep getting asked, but what about the energy intensity?
BROOKS: For sure. And look, one of the missions of Bitfury is to make crypto safe, sustainable, and useful. That's really what we're all about.
And on the sustainability side, I have to tell you, the misimpression that many people have about Bitcoin is truly profound.
The way in which Bitcoin will ultimately be a solution to a lot of the world's climate problems is simply this. Most renewable energy isn't
profitable, right? Just last year, California shunted one and a half million megawatt hours of unused solar production on to the grid because no
one could buy it, and that's why we don't have more solar power because it's not profitable.
Bitcoin comes along and locates mining sites near solar production and wind production, and consumes all the excess capacity making it profitable. It's
like you just said in your last segment, at the end of the day, that much demand will induce more supply. That's the market effect of crypto. And if
we let markets work here, we can make renewable energy profitable. That's what Bitfury will do, first and foremost.
CHATTERLEY: So you're going to take up the excess capacity is what you're saying, and actually drive down the cost of renewable energies.
BROOKS: Absolutely, and drive up the profitability to the operators. After all, government subsidized programs can only ever be so large. It's like
Margaret Thatcher said, eventually, you run out of other people's money, and so you can't keep shifting back to your dollars. But we want to buy
solar, we can do profitable work in the market economy. That's the best thing about Bitfury, and that's on the sustainability side, the way we can
be part of the solution.
CHATTERLEY: And in the interim? Liquid stack cooling systems to try and take some of the energy burn out of the data centers that we're talking
about now, whether it's crypto or others, I guess.
BROOKS: Absolutely. I mean, when I say making crypto useful, one of the great things about crypto is in a sense, it's sort of a basic scientific
research mission, right? We're discovering new technologies.
And what we've learned from Bitcoin mining is a huge component of the energy usage of Bitcoin isn't from the computer processing itself, it is
from the air conditioning necessary to keep these data centers from catching on fire. Right?
And so Bitfury has been the major global innovator in immersion cooling systems through its liquid stack subsidiary, the whole point of which is to
take as much as 90 percent of energy usage out of the cooling cycle. That turns out to be relevant not just to Bitcoin miners, but to the Microsoft's
and Amazon Web Services of the world.
So imagine if Bitcoin resulted in some fundamental discoveries that helps not only the mining business which is a very small part of the global
economy, but of the global data center business which is a giant part of the economy, but of the global data center business, which is a giant part
of the economy. Those are the kind of benefits that this innovation can deliver to the real world, not just to crypto.
[09:50:13]
CHATTERLEY: Brian, I can sense your excitement. I have to say, I think you're in the right place and you have other things going on. I'm going to
get you back to talk about them because we've run out of time, as always. I've asked you too many questions on other things, but I know you're
looking at in line with making the space safer, the data attached to some of the concerns within the crypto space as well with the Crystal part of
your business.
Come back and talk to us about that very soon, please. For now, I am going to thank you, Brian Brooks, Bitfury CEO. Great to chat with you as always.
More to come. Stay with FIRST MOVE.
(COMMERCIAL BREAK)
CHATTERLEY: Better late than never. The United States has reopened its borders to fully vaccinated international visitors, and a must see for many
of them heading to New York is of course the Empire State Building.
Richard Quest reports that the iconic skyscraper is ready to welcome crowds once again.
(BEGIN VIDEOTAPE)
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS (voice over): The highest structure raised by the hand of man. So said, "The New York Times"
when the Empire State Building opened in 1931.
It opened as the depression got underway. The building had the nickname of the Empty State Building. It was only a quarter full.
That nickname, the Empty State Building could have been used again last year when the pandemic hit.
TONY MALKIN, CEO, EMPIRE STATE REALITY TRUST: Well, there was a ban on all nonessential workers from the entrance into office buildings. By the middle
of March of 2020 to about three and a half percent of the turnstile swipes into our buildings that we had in the year earlier period in 2019.
QUEST (on camera): Were you surprised that more people didn't just hand out leases and finish it? Go out of business.
MALKIN: Let's put it this way, there was a lot of surprise in March, April and May of 2020. It was what we like to call the land of pivot and flex,
constant fluidity in the situation.
QUEST (voice over): For nine decades, the building has stood in the center of Manhattan, a defining feature of New York's burgeoning skyline.
MALKIN: It is bulletproof.
QUEST: $165 million renovation had just been completed when COVID arrived and tourism revenues went to zero.
But the owners held their nerve and in the spirit that this building was first conceived, they planned for the future.
QUEST (on camera): Now to this building itself, magnificent. The tourists are back.
MALKIN: The tourists are coming back, yes.
QUEST: Are you ready for the bonanza that is about to arrive once the U.S. opens up to pretty much Europe on those transiting through Europe.
MALKIN: I'll tell you, Richard, we are, and I'll tell you something else. What's really changed a lot when we shut down and we did shut down from
March through July here at the Empire State Building, we rethought, first time ever, we had already redeveloped $165 million redevelopment of the
observatory attraction, but for the first time ever, we went to absolute zero and we rebuilt our business in a different way.
ANNOUNCER: Welcome to the world's most famous building.
QUEST: This is 103?
MALKIN: That's right.
[09:55:27]
QUEST: All right, hold on to your hat. We can see The Edge.
MALKIN: Right.
QUEST: We can see The Rock and we can see the Summit.
MALKIN: Right.
QUEST: And on the other side is --
MALKIN: Down that way.
QUEST: The one we will take.
MALKIN: Right.
QUEST: I mean you're all showing a view of each other.
MALKIN: Well, actually no. We are at the center of it all. We are the center of New York City. There is an international recognition that lives
in the hearts and minds of everyone from five and six-year-olds to 90-year- olds, and how does that happen?
QUEST (voice over): The Empire State Building has appeared in many movies and TV shows, and when it comes to the Holidays, it's a colorful part of
the city's culture.
MALKIN: It speaks to the concepts of hopes and dreams. Everybody has hopes and dreams, and this doesn't long to one culture. It was built by many
cultures. And it caught the fancy and the fantasy moment of the world.
QUEST (on camera): It is 50 years since the Empire State as the tallest building in the world, but that doesn't matter. Because today there are
bigger, smarter, posher, taller buildings, but none quite like this.
Richard QUEST, CNN, at the Empire State Building in New York.
(END VIDEOTAPE)
CHATTERLEY: A very spunky Richard Quest there in his element.
And that is it for the show. "Connect the World" with Becky Anderson is next.
We'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
