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First Move with Julia Chatterley
German Parties Unveil Deal for Coalition Government; Ships in Chinese Waters Disappear from Trackers; NASA to Try to Change Asteroid's Path with Spacecraft; Russia-Ukraine Tensions Reach New Heights; Howard Marks on the Trouble with Trillions; Samsung to Build $17B Semiconductor Plant in Texas; Sport Business Court China Despite Alleged Abuses. Aired 9- 10a ET
Aired November 24, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:17]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from New York, I'm Julia Chatterley. This is "FIRST MOVE." And here is your need to know.
Coalition Clinched. Olaf Scholz to replace Angela Merkel as German chancellor.
Vanishing vessels. China removes its ships from a global tracking system citing security fears.
And Averting Armageddon? NASA practices knocking an asteroid off course.
It is Wednesday, let's make a move.
A warm welcome to "FIRST MOVE." Once again, great to have you with us on this high-flying Thanksgiving Eve edition of the program. No turkey on our
show today, instead lots to crow about.
We'll be talking about the global investment outlook, China, and the overuse of the world trillion with Howard Marks, billionaire founder of
Oaktree Capital Management.
In the meantime, tech investors ducking for cover amid fears of swift essential bank hikes with the Nasdaq falling almost 2 percent so far this
week. Fears that dovish Jay Powell might be a bird of a different feather in his second term, with perhaps a faster taper and a quicker invest --
interest rate liftoff. No need to grouse though, context is everything here on "FIRST MOVE."
The Nasdaq still up 22 percent year-to-date and still close to record highs. Blue chips have been proud as a peacock too. The Dow gaining for a
second day as investors migrate to banks and energy names.
Also, (INAUDIBLE) well, they're still in that poetries and we'll discuss them in December.
In the meantime, take a ganger of the global market outlook. That's where it gets more difficult. As you can see, a cautious picture as worries about
new COVID restrictions way on European trade in particular. France could impose fresh curbs as early as next week. Acknowledging they're in the
midst of a fifth wave of infections.
And Germany reporting its highest ever one day surge in COVID cases. That's going to be a major test for Berlin's next coalition government. And that's
where we begin the drivers.
Scholz is set to be in, Merkle is out of the months of political wrangling. Germany has a three-party deal for a coalition government.
Anna Stewart joins us on this. Just like in through in it, so no small and light significance, the wrangling I think that has taken place to achieve
this.
Anna, what do you make of the coalition? What do we know and what do we not yet know?
ANNA STEWART, CNN REPORTER: Well, you are seeing right now pictures of the party leaders all smiles walking towards this press conference where we do
expect finally a coalition deal to have been reached with Olaf Scholz taking the role of chancellor.
Now, what are we going to get from the press conference? Well, hopefully some guidance on which party would take which ministry. Widely, it is
expected that the FDP, the pro-business party would take the Finance Ministry with Christian Linder being the Finance minister. That was a red
line for them through the election.
And that would leave the Green Party with some really important ministries such as economy as well as climate obviously and maybe foreign ministry as
well. So hopefully some confirmation on who goes where.
It has taken two months for this negotiation to take place. Lots of wrangling. And it is really no surprise because these parties are not
natural allies. For instance, the Green Party wants big, big spending to enable a big green transition, but the FDP Party, they would like to see,
well, no rises in taxation and it also like to see a reimposition of the so-called debt break, reducing essentially government's spending.
So, how are they going to finance that transition? We are already getting some wires through from media outlets reporting that it's looking like they
want to phase out coal energy by 2030. That would be eight years prior to the plan that was currently in place the from last government. But also, a
suggestion that has been today from "Reuters" that perhaps they would signal an end for gas energy by 2040 which would be really quite
significant.
Looking at some of the German share prices going into this, and these prices were taken a few minutes ago. Daimler, Volkswagen, Lufthansa all
lower. And so that potentially suggest that investors are concerned that it could see some announcements around these stocks, around an acceleration of
reducing emissions. So really all eyes on those going forward.
We might not get all the policy detail we want today, but we should at least know who sits in which position. Julia?
CHATTERLEY: Yes. Good to know and we'll await further announcements. And of course, it's not a moment to lose because of course COVID remains a
critical concern.
[09:05:00]
And an escalating concern as we've heard from the health minister, from German Chancellor Angela Merkel. She remains chancellor of course for
another couple of weeks we assume. We're expecting announcements on this perhaps as early as today.
Anna, what do we know about COVID cases and perhaps future restrictions?
STEWART: Yes. Because of - today, you know this new government is being formed, wants to look ahead to all the policy announcements they have been
elected for. But on day one, they've got so much to tackle here because Germany as you say is really battling a dreadful fourth wave of coronavirus
cases.
Today actually reporting its highest single day surge in infections since I believe the pandemic began. More restrictions could be on the cards. That
would be very damaging for the economy as well. Which has already been dragged down by the supply chain crisis, the high prices of gas. So, all of
that.
And inflation, Julia, according to the Bundesbank could actually reach 6 percent this month. There is a lot for the new government to deal with.
Angela Merkel after 16 years as chancellor of course probably quite relieved. She might actually get a decent Christmas break. It's very
interesting. This could all happen. We could see Olaf Scholz sworn in by the 6th of December if the parties agree to this deal.
And that would mean actually that Angela Merkel will not as expected be the longest serving chancellor since World War II. She would lose that to
Helmut Kohl but just by 12 days. Julia?
CHATTERLEY: Whoa! We don't want to wish for her to achieve that I think because that means complications of its own. But she's pretty legendary,
yes.
Anna Stewart, thank you so much for that.
Now on to a maritime mystery. Ships in Chinese waters are disappearing from global tracking systems. It comes as China shows a deepening mistrust of
foreign influence.
Steven Jiang reports.
(BEGIN VIDEOTAPE)
STEVEN JIANG, CNN BEIJING BUREAU CHIEF: Analysts say they started noticing this problem towards the end of October. Normally, shipping data providers
are able to track vessels around the world because of something that's called AIS, Automatic Identification System. Those transceivers on ships
enable them to send information including its position, speed, course and name to stations based along coastlines via high frequency radial.
But in the past three weeks, the number of ships sending this information from Mainland China which is home to six of the world's top 10 container
ports dropped a whopping 90 percent. And industry analysts think that they know the answer. That is because of a newly enacted Chinese data privacy
law that took effect on November 1st.
Now, this law requires all companies processing data to seek and receive government approval before such information can be sent outside of Chinese
soil apparently over the fear that such information can fall into the hands of foreign governments.
Now, this law does not specifically mention shipping data, but experts think that Chinese providers may just want to err on the side of over
caution with one expert telling CNN that some stations along Chinese coastlines were removed in the beginning of November under the order of
national security authorities.
We asked the Chinese government about this and the foreign ministry in a statement sent to us on Wednesday claimed that all legally built stations
in accordance with international treaties have not been shut down and quote/unquote, "they are operating normally" as well as all publicly
available AIS platforms.
Now, of course satellites could still capture information from ships when AIS systems are not working. But when the ship is close to shore,
information captured by satellites is not as accurate as those gathered from the ground. And that of course is critically important for the global
shipping industry which needs accurate and timely information to streamline its operations and improve port efficiency.
That of course is why the disappearing Chinese shipping data according to many experts is going to cause a major negative impact on this industry
which is ready mired in a global supply chain crisis with badly congested ports struggling to cope with fast rebounding demand for products and goods
especially ahead of the busy Christmas season.
Now, all of this according to experts actually perhaps not surprising because the government's determination to retain absolute control over data
and information inside Chinese borders is the latest reflection of the country's growing isolation from the rest of the world and the leadership's
deepening mistrust of foreign influence.
Steven Jiang, CNN, Beijing.
(END VIDEOTAPE)
CHATTERLEY: With global implications.
All right. Let's move on.
To get "Ghostbusters," how about asteroid busters? Who you going to call? NASA. Yes? That is NASA's latest mission.
A CNN space and defense correspondent Kristin Fisher explains.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Three, two, one. And liftoff of the Falcon 9 and DART.
KRISTIN FISHER, CNN SPACE AND DEFENSE CORRESPONDENT (voice-over): The launch of NASA's first ever planetary defense mission.
[09:10:02]
Instead of carrying satellites, telescopes or people, this SpaceX Falcon 9 rocket is launching a spacecraft to test the technology that someday could
save the world.
BILL NELSON, NASA ADMINISTRATOR: It may be the way to save planet earth if there is ever an inbound big asteroid that could really challenge our
existence as a planet.
(VIDEO PLAYS SCENE FROM MOVIE "ARMAGEDDON")
FISHER: Even NASA Administrator Bill Nelson agrees that it sounds like a scene out of the movie "Armageddon."
(VIDEO PLAYS SCENE FROM MOVIE "ARMAGEDDON")
FISHER: But instead of destroying a killer asteroid with a bomb like Bruce Willis, NASA's DART mission, short for the Double Asteroid Redirection Test
is using something called kinetic deflection. That is a scientific way of saying that this DART spacecraft is on a kamikaze mission to smash into an
asteroid and try to push it off course.
NELSON: If it is successful, then if we had a real inbound killer asteroid, we could do that with it, and it would miss us.
FISHER: It would take the DART spacecraft 10 months to reach its target. The Didymos asteroid and its moonlet which is about the size of the pyramid
of Giza in Egypt.
It is so far away, that NASA says it will not create a dangerous debris field in low earth orbit like last week's test of a Russian anti-satellite
weapon.
NELSON: The DART mission is creating an explosion and debris field way out. Millions of miles in space where it is not harming anything.
FISHER (on camera): Now, this asteroid is not a threat to earth nor is any other asteroid that we know of, though it is likely only a matter of time.
But just in case, NASA did invite Bruce Willis to this launch.
Kristin Fisher, CNN, Washington.
(END VIDEOTAPE)
CHATTERLEY: Yes. It is Thanksgiving. He's probably got other things going on.
All right. Let me bring you up the speed on some of the other stories making headlines around the world.
More evidence of tensions between Ukraine and Russia. The Interfax news agency is reporting both Russian and Ukrainian military forces are staging
combat exercises in the Black Sea.
This comes after top U.S. and Russian generals talked by phone about concerns over a buildup of Russian troops near the border with Ukraine.
CNN's Fred Pleitgen gets a rare behind the scenes look at preparations on the Ukrainian side.
(BEGIN VIDEO TAPE)
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): On patrol in some of the most contested waters in the world. Ukraine's Navy
took us on an artillery boat in the Sea of Azov, just as tensions with Russia have reached a boiling point.
Our main goal is to defend and keep the sovereignty of Ukraine from the direction of the sea, the captain tells me. Russia has been massing troops
near Ukraine's borders. The U.S. says warning its allies, a large-scale invasion could happen soon.
(on camera): The Ukrainians believe that if Russia does decide to launch an attack of the Sea of Azov could be one of the main battleground. That's why
the Ukrainians are both modernizing their fleet, but also their infrastructure on land as well.
(voice-over): The Azov coastline holds a strategic value to Russia. It would allow President Vladimir Putin to establish a much-sought land
corridor to connect Russia to annexed Crimea.
Ukraine's defense ministry gave us rare access to the massive construction going on at the Berdyansk naval base. Kiev has now ordered this building
program to urgently be accelerated with the Russian threat looming large.
(on camera): In order to complete this project as quick as possible the Ukrainian military tells us they are now working seven days a week and they
say once it's finished, it will offer a formidable deterrent against any Russian aggression.
(voice-over): Upgrade seemed badly needed here with much of Berdyansk port in other disrepair. Ukraine says new facilities will allow them to base
more and bigger ships here.
We are ready, this officer says, that is why we are here so that at any time if there's any aggression on the Azov Sea, we can resist it.
Ukraine's president says Russia has positioned close to 100,000 troops near its borders, which the Kremlin denies.
These satellite images appearing to show dozens of military vehicles near Yelnya in Southwestern Russia.
The Biden administration has warned Moscow not to attack and is mulling more weapons deliveries to Kiev. CNN has learned one U.S. defense official
says Russia's aim may be to create confusion or to get concessions.
The Kremlin dismissed talk of a possible invasion as hysteria. Ukraine's armed forces say they are on constant alert preparing for an armed
confrontation they hope can be avoided.
Fred Pleitgen, CNN, Berdyansk, Ukraine.
(END VIDEOTAPE)
CHATTERLEY: Ethiopian state affiliated TV says the prime minister is now leading his army on the battlefield. It comes a day after Abiy Ahmed vowed
to go to the front lines of his country's civil war.
[09:15:02]
Residents meanwhile are patrolling the capital as Tigrayan forces advance.
Sweden has its first ever female prime minister. Social Democrat Leader Magdalena Andersson, the former finance minister was confirmed on a narrow
vote in a Swedish parliament following Nordic countries, Finland, Denmark, Norway and Iceland have all previously elected female national leaders.
Still to come on "FIRST MOVE."
Troubles in trillions. Oaktree's Howard Marks on his outlook for a post- pandemic world.
And tempted by Texas. Samsung vows plans for a $17 billion chip factory.
That is all coming up. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "FIRST MOVE."
On a crucial day on Wall Street ahead of Thursday's Thanksgiving holiday. Tech stocks set to lose ground for a third straight session. U.S. 10-year
bond yield in a one month high as investors are lessening their exposure to riskier parts of the corporate bond market, so-called junk bonds, at least
for today's session. The overarching theme, the Federal Reserve may move more quickly to raise interest rates. We're already seeing it.
And other parts of the world with New Zealand raising rates again today in a move designed to tame inflation.
Now, from Groundhog Day to the trouble with trillions. So, at least the word. In his latest memo entitled "The Winds of Change," the co-founder of
Oaktree Capital Management, Howard Marks provides his thoughts on a whole array of big macro issues. We're talking concerns about democracy,
political polarization, the impact of technology and the outlook for China.
But my personal favorite in his observation about the "T-word," trillion, which we throw around liberally in 2020 for the first time ever. And that
is my words, not his.
This is the fun part though for numbers geeks. A trillion dollars is the equivalent of $10 every second for over 3,000 years. Almost
incomprehensible. Now that is his word, not mine.
Joining me is Howard Marks co-founder and co-chairman of Oaktree Capital Management, a firm with over $158 billion in assets under management. And
among with more than four decades of investment experience. So, we listen to you.
Howard, fantastic to have you on the show. And happy Thanksgiving Eve.
[09:20:00]
HOWARD MARKS, CO-FOUNDER AND CO-CHAIRMAN, OAKTREE CAPITAL MANAGEMENT: Same to you, Julia. It's good to be here.
CHATTERLEY: Great. Howard, I wanted to pick up on that point that you made about the word trillion because it has profound consequences for us as
individuals, for investors. Policymakers shouldn't use this word lightly, none of us should. And yet we kind of did in 2020 and this year too.
MARKS: Well, not only should we not use the word lightly, but we should not spend these amounts lightly.
CHATTERLEY: And yet we have.
MARKS: Yes. You know, Everett Dirksen said 50 years ago that, "a billion here and a billion there." And pretty soon you are talking about real
money. But obviously a trillion is a thousand billion. It is really real money.
CHATTERLEY: Let's talk about it from an investment perspective first of all because then we'll broaden it out to other implications. It has profound
implications for investors in general. How do you distinguish between opportunities because when you are talking about this level of money
floating around in the system, it floats many boats? Some boats perhaps that it shouldn't.
MARKS: Well, this - this kind of spending and this kind of government behavior has the potential to have a profound impact on investments. That
is the easy thing to say. Unfortunately, however it is not clear what that impact will be. We've never been through this kind of experience. And it is
hard to be categorical about it.
But I mean, the traditionalist would automatically think that it's going to introduce considerable inflation and it has. And of course, the big
discussion is whether transitory permanent. Nobody knows. And you know, I don't believe in macro forecasts. It is very hard to generalize especially
when there is no precedent.
CHATTERLEY: And you make a fascinating point about inflation in your memo too. And you say, look, we've been warning about the extremes both of
inflation and deflation for many, many years. And now, we're in a world where we have a whole host of technologies, be it. AI for example, that are
actually deflationary. They bring down the prices of many of the technologies and the uses for them that we've seen.
And we're in a world where you're effectively able to substitute technology for labor, for jobs. And you envision an idea where actually we have higher
unemployment or less jobs available or jobs able to be filled quite frankly. But we also have arising growth environment because we're more
productive. What does that mean, what is the policy response required to in that kind of environment?
MARKS: Well, that is a great question. You know, we must anticipate inflation under these circumstances. But that doesn't mean that we're going
to have it. The conditions for inflation were present in the last 10 years leading up to the pandemic. Low interest rates and high deficits in the
U.S., and yet we didn't have inflation.
As you mentioned, people have been after me for many years, are we going to have inflation or deflation. Many people thought that we'd have both, which
of course that is a joke, it is impossible to have both at the same time. But the truth is we didn't have either. And nobody knows what's it going to
be.
We're leaning toward inflation now. It has been very lull for the last 30 plus years. Most people think it's going to pick up. It has picked up. Most
people think that at least some of today's readings are going to be lasting. And if you believe that, you should turn some of your portfolio
into floating rate debt as opposed to fixed because the interest rate can rise. And you should think about assets and companies that can keep up with
inflation and offset it. Rental real estate where the rents can be increased, companies where earnings can grow fast enough to keep up with
inflation. These are the kinds of things that one might do.
CHATTERLEY: It's also going to be a big question for the Federal Reserve. And we're still seeing at least in the short term some of those shifts
taking place. If you were Jay Powell and in charge of the Federal Reserve, what would you be doing and is that different from what you expect him do?
Because there are two questions there.
MARKS: Yes, I would be tapering the bond buying as has been begun within the last week or so.
[09:25:00]
But I would probably do it a little faster. I would raise interest rates a little sooner.
My chip in the game is not high rates or low rates. What I'd like to see is the rates that would occur if the Fed left rates alone. If it did not apply
pressure to either lower or raise them. I don't think that we have a free market in money. And I'd like to see a free market in money. So that the
economy could tell us what rates should be.
You know, government policies don't in the long run create anything, they only move things around. They favor one group, and they penalize another.
When you have ultra-low interest rates, you are favoring borrowers, you are encouraging borrowing which has risks attached, but you are also penalizing
savers, retirees, people on fixed incomes. I would like the economy to be making that decision rather than the Fed.
Having said all that, let me say that I don't claim to be smarter than they are, and they have been doing this for years. So, I would not super impose
my views on theirs, but I -- if I were in that position, I think I would be a little less activist.
CHATTERLEY: Yes. And well, you're sort of suggesting that we've lost all signaling power from the economy and I think we've gone full circle in the
conversation due to the amount of money that's slushing around into the system. And I think the expectation that the Fed is all-powerful and can do
everything. I mean in this country now, there is a hope that Jay Powell will tackle climate change as well. It's like what more do we expect from
our Central Bank governor.
MARKS: Exactly.
CHATTERLEY: I want to talk to you about China because I read in your note too, and I didn't know this and I think that it is very important, your
part at the Shanghai International Financial Advisory Council too. So, you get a window into understanding their desires to encourage foreign capital
into China despite some of the broader challenges and tensions at the political level.
Howard, what do you foresee for China, whether it is growth or the relationship with the West? Because you do have big investments there too.
So, it is important for many reasons.
MARKS: Yes, Julia. Oaktree has been a very active investor in China for a good period of time. And we think we're the largest buyer of nonperforming
loans. And of course, that is one of our specialties.
I think that China will continue to grow at an above average rate relative to the rest of the world which means that it will become larger relative to
the rest of the world. It is the number two economy today. I hope within - I hope I'm still alive to see. I think one of these days it will probably
be the largest economy in the world. It is growing aggressively and purposefully.
But you know, I think of China as an adolescent economy. I mean it is only 43 years since the end of the Mao period. And I think that - I think that
like any adolescent, if you've ever had one in your home, you know it can be turbulent, it can be up and down, that's impetuous. I think that you
know since the end of the Mao period, China has never had a recession. One of these days it will when cyclicality overcomes growth. And yet I do think
that China's best decades are ahead of it.
CHATTERLEY: And you still see them growing and outperforming the rest of the world and becoming the biggest country which some of the bears out
there and concerns particularly those that look at what we're seeing in terms of the debt levels in China are concerned about.
On that note, we shall see. And you say that at the end, on many things we shall see.
I can't have you on my show and not ask you about crypto given the interest. And I think the most popular word this year actually is not
trillions, it is NFTs. But I won't ask you about that.
I believe that your son invests in crypto infrastructure in particular. Can I ask how important a proportion of the broader fund that is, is it just a
tiny part and what are your views on that space?
MARKS: My son has a mandate for our family to make money. Not to worry about diversification, concentration, volatility. I take care of that in
the portion of our money that I run. I'm good at that. He is good at making money.
And so, he has, you know, a meaningful part -- a meaningful fraction of the part of our money that he runs is in crypto currencies and related
infrastructure. And we're very happy that it is.
[09:30:12]
Because you know, he and I live together, our families live together for a good part of the pandemic, and he worked me over on this subject. And he
has convinced me that my view was not up to date. He has tried to bring me up to date.
I do think that it is challenging generationally since crypto is not only an innovation, but it is entirely new concept. I think that it is hard for
generations like mine to get their hands around it. It is easy for him and his contemporaries.
But, you know, basically he has convinced me number one that I didn't know enough to have a strong opinion, which I absolutely have subscribed to. And
number two, that the cryptocurrencies have attractions and applications that I didn't appreciate before.
So, I don't opine on the subject anymore, but I would describe myself as more open minded as one should be. Because the opposite of open-mindedness
is a terrible thing especially in a changing world.
CHATTERLEY: I love that response. Open mindedness is all important particularly in this day and age. Do you still enjoy, Howard? Do you still
enjoy investing and doing the job that you do after so many decades? Because it has gotten more challenging, I think. You can come in the wrong.
MARKS: It has become more challenging. I used a quote in the memo from Don Meredith who was an American football player. He said they don't make them
anymore the way they used to, but then again, they never did.
You know we say tough times today, but boy, I really enjoyed the past. Well, the past wasn't so great either. We were worried. When I was a kid,
we used to get under our desks to protect against atom bombs. So those drills would really make us pretty scared.
But I think it's - investing is great because it is not static. It is not a field where the things that you learned 50 years ago are sufficient today.
It is not a field where there is a method to answering a question which is sure to work. Yesterday's solution may not work tomorrow, which keeps us on
our toes.
CHATTERLEY: The winds of change.
Howard, fantastic to talk to you. Please come and talk to us again soon.
MARKS: Thank you.
CHATTERLEY: Howard Marks, co-founder and co-chairman of Oaktree Capital Management.
Great to chat to you, sir. Thank you.
MARKS: And you.
CHATTERLEY: Market open is next. Stay with us.
(COMMERCIAL BREAK)
[09:35:53]
CHATTERLEY: Welcome back to "FIRST MOVE."
U.S. Markets are up and running on the last full trading day of the Wall Street week. Markets of course closed on Thursday for Thanksgiving holiday
at least in the United States. And it's a half day of trade on Friday, part timers.
This is traditionally a strong week for stocks but not this year. We're seeing a broad-based pullback today as Europe's COVID outlook worsens and
global interest rate fears rise.
New data are out today that supports the argument that the U.S. needs less robust economic support going forward. Weekly jobless claims now below
200,000. That's the lowest level since 1969. A strong sign that the American jobs recovery is gaining traction.
Speaking of new jobs in the United States, Samsung is making a big investment in Texas. The South Korean giant will build a semiconductor
plant for some $17 billion.
Christine Romans joins us to discuss.
Christine, Happy Thanksgiving Eve to you too.
The chips certainly aren't down. They are rising at least in the United States. Let's talk about this first.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Sure.
CHATTERLEY: This is a welcome change.
ROMANS: It really does. I mean look, COVID broke everything, right? It broke just in time inventory. It broke the global supply chain. And now you
are seeing companies work to make sure that this doesn't happen again. That they don't have their parts in far flung parts of the world and that
disrupts their ability to make their products.
So, Samsung investing $17 billion in Taylor, Texas. Just 16 miles more, it already has a production facility, a manufacturing facility there in
Austin. And the company going out of its way to thank the policies and the tax policies actually in Texas, but also thanking Congress and the Biden
administration for doing everything they can to invest in domestic manufacturing. So, the chips can be made here in the U.S. and we can start
to, you know, unwind some of these 30 years of globalization that saw parts far flung around the country. Labor all over - around the world rather, all
over the world. I think you're going to see people start to figure out how they can get control of these supply chains a little better and investing
in Texas is part of that here.
CHATTERLEY: Yes. I mean so much in there as well. I mean, Samsung, I believe has been in America since the late 1970s.
ROMANS: Yes.
CHATTERLEY: They have got 20,000 employees here. But the idea that they are saying look, Texas, thank you. Give us the tax incentives. Give us the
breaks and we'll come and invest here. And you know it helps America's supply chain as well.
Speaking of jobs, Christine, what do you make of that jobs report?
ROMANS: Really something, wasn't it? I mean to see a print below 200,000. I mean it made my heart sink. And maybe they will take some of that back next
week. You know these could be volatile week to week, so let's be very clear about that.
But the trend, Julia. The trend is our friend here. The trend has been getting better and better. I mean look, we're in a tight labor market in
the U.S. You hear one of the top concerns of CEOs is labor shortage. You're not going to be laying off a lot of people when you have a labor shortage,
right?
So that I think is the backdrop here. You know, you could make the argument this means that we have less support for the economy, or you could make the
argument we need even more support in the workforce, investing in working families and especially working women who many of whom have dropped out of
the labor market, right?
So, I think you can spin it both ways with these strong numbers mean. It does show American consumers say they don't feel good about the economy,
but we know the job market is getting better. We know that they are exhausted by COVID, right? And they are - you know they are exhausted by
inflation, but many of these other indicators in the economy are flashing bright green here.
CHATTERLEY: Yes. As one of my favorite working women, I wish you a Happy Thanksgiving.
ROMANS: Happy vax-giving.
CHATTERLEY: I hope you have a fantastic day.
Yes. We'll see you after this.
ROMANS: Thank you. You, too.
CHATTERLEY: Christine Romans, thank you.
The European Union, urging China to provide veritable fruit -- proof that tennis star Peng Shuai is safe. Peng had disappeared for weeks after
accusing China's former vice premier of coercing her to have sex. She reemerged this weekend and held a video call with head of the International
Olympic Committee which then stated she was well. But human rights groups are unconvinced and have accuse the IOC of being complicit in China's
rights abuses.
As CNN's Will Ripley reports.
[09:40:01]
(BEGIN VIDEOTAPE)
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT (voice over): Zhang Gaoli, China's 75-year-old former vice premier, the onetime face of the Beijing
2022 Olympics, and the man who stands accused of sexual assault by one of China's premier tennis stars, Peng Shuai. Her disappearance in the wake of
the allegations on November 2nd and mysterious reappearance over the weekend fueling a firestorm that threatens to dismantle China's worldwide
sport aspirations, or does it?
While the Women's Tennis Association's threat to pull a 10-year multi- tournament contract could cost China, contracts with Major League Baseball, the NBA, Formula 1 and others put China on course with its goal to make
sports a $780 billion industry by 2025.
SIMON CHADWICK, DIRECTOR, CENTRE FOR EURASIAN SPORT: This could be the biggest sport economy in the world.
RIPLEY: Sports is already big business in China, home to almost 1.5 billion potential fans. According to analytics company GlobalData, Chinese firms'
sponsorship agreements with the International Olympic Committee and Football federations FIFA and UEFA alone are worth more than $2.2 billion
and growing.
Athlete sponsorships and sports manufacturing accounts for lucrative deals for companies like Nike. In 2018, Nike made some $6.2 billion in China.
That number rose 21 percent from the previous year. Nike saw just a 7 percent increase in revenue in North America over that same period. So far,
Peng Shuai's sponsors have stayed silent in the wake of the allegations.
CHADWICK: What a lot of organizations are trying to do at the moment is to navigate the middle way.
RIPLEY: The WTA has a lot to lose by taking a stand. Reportedly one third of their revenue comes from China.
For the NBA, the outcome was remarkably different. Basketball is China's most popular sport. But after a quickly deleted October 2019 tweet by
Houston Rockets General Manager Daryl Morey, in support of the Hong Kong democracy protests, the backlash from China was swift.
The threat of sponsorship loss, broadcast denial, and severing of ties with the NBA proved a bridge too far for an organization that at that time made
10 percent of its revenue in the Chinese market. The NBA initially distanced itself from Morey and moved to do damage control, hoping to
salvage its relationship.
And the IOC looking at a multibillion-dollar revenue stream from China's hosting of the Winter Olympics just a few months away. That relationship
with China, like it was in 2015 when Zhang help negotiate Beijing hosting the 2022 Winter Games appears as strong as ever.
Will Ripley, CNN, Hong Kong.
(END VIDEOTAPE)
CHATTERLEY: And we're going to keep talking about this until her accusations are answered.
That's it for the show. Stay safe. Marketplace Europe is up next. And I'll see you tomorrow.
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