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First Move with Julia Chatterley
Rishi Sunak becomes new UK Prime Minister; Dimon, Solomon speak at FII Panel Moderated by Richard Quest; China's Yuan falls amid Fears about Xi's Third Term; U.S. Stocks mostly Higher after 2-day Rally; Saudi Ambassador speaks to CNN about Strained Ties with U.S.; Adidas Cuts Ties with Kanye West after Anti-Semitic Comments. Aired 9-10a ET
Aired October 25, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome to "First Move and fantastic to have you with us this Tuesday! A day of royal importance in
the United Kingdom as King Charles the third officially appoints Rishi Sunak as the nation's new Prime Minister.
Sunak warning in his first public comments outside number 10 Downing Street there have the "Profound economic crisis facing Britain". He also vowed to
restore public trust after the Liz Truss turbulence hopes that the new Prime Minister will provide much needed government stability.
And crucially, economic credibility has seemingly become markets for now with benchmark 10 year U.K. yields falling further below the 4 percent
level. U.K. stocks as you can see, they're pulling back a bit in Tuesday's session. But the pound also strengthened by some six tenths of 1 percent
versus the U.S. Dollar.
The dramatic action in fact, taking place in Asia overnight where the Chinese currency the - has tumbled to its lowest level in 15 years versus
the U.S. dollar. Growing concerns over what Chinese President Xi's consolidation of power might mean for the world's second largest economy.
It also follows a major sell off in U.S. listed Chinese stocks on Monday. Alibaba and other big names as you can see on the screen, they're falling
by some 10 percent or more. JD.com they're 13 percent lower in Monday's session.
However, JPMorgan countering by suggesting that the Chinese stock sell off might finally represent a buying opportunity. We'll get the perspective of
China watcher, Mandarin speaker and Former Australian Prime Minister Kevin Rudd later on in the show. For now, let me give you a look at what we're
seeing in terms of price action on Wall Street.
A cautious start, as you can see that to the U.S. trading session on tap as Investors await and are awaiting results of king-sized import from the
major U.S. tech firms. Microsoft and Alphabet report after the close Tuesday.
Monday sessions or stocks reached their highest levels in fact, in six weeks. Amid hopes that the Federal Reserve may begin slowing the pace of
rate hikes helping the mood we shall see. High hopes on Wall Street and in the U.K. as well as the Rishi Sunak era dawns.
And that's where we begin today's show, regaining trust after Truss. That is what the new British Prime Minister Rishi Sunak is vowing to do now that
he's seated at number 10 Downing Street. During his first speech, the Prime Minister said he wanted to "Pay Tribute" to his predecessor Liz Truss, but
that mistakes were made during her time in office.
(BEGIN VIDEO CLIP)
RISHI SUNAK, PRIME MINISTER OF BRITISH: Some mistakes were made, not born of ill will, or bad intentions. Quite the opposite in fact, but mistakes
nonetheless and I have been elected as Leader of my party and your Prime Minister, in part to fix them.
And that work begins immediately. I will place economic stability and confidence at the heart of this government's agenda. This will mean
difficult decisions to come.
(END VIDEO CLIP)
CHATTERLEY: And as the opposition Labour Party Leader suggested this week in number 10 Downing Street has had a revolving door recently. Liz Truss,
the fourth Prime Minister to resign since that Brexit vote back in 2016. And her time in office, just six weeks.
Rishi Sunak will surely be hoping to outlast his recent predecessors, six weeks and counting. Scott McLean joins us now. Scott, it was a far more
confident I think I'm poised version of Rishi Sunak that we saw today.
Even compared to just yesterday, laying out the challenges but also admitting that mistakes have been made and a bold plan for the future. The
question is how?
SCOTT MCLEAN, CNN CORRESPONDENT: Yes, Julia, I think that Rishi Sunak, mere presence in number 10 Downing Street has done something to calm the
economic nerves in this country largely because the markets know what they're getting, by and large with a Rishi Sunak premiership. But he also
has some eye wateringly difficult decisions in the words of the Current Chancellor Jeremy Hunt to make. And so any kind of honeymoon period that
Rishi Sunak may have enjoyed is likely to be a much shorter one.
Because they'll have to get to work right away there are tens of billions of dollars, tens of billions of pounds, as well in government deficit.
MCLEAN: That's going to build up over the next couple of years if nothing changes. And so the question is, where will Rishi Sunak decide to cut?
Would it be something like defense and going back on the promise to raise defense spending from 3 percent of GDP target in the next few years to just
2 percent, which is the NATO standard.
Could he go after pensions and have them not rise with inflation as Rishi Sunak, his predecessor, Liz Truss had promised to do. Could he ask some big
infrastructure projects and what might he do about taxes? Surely, he's had plenty of indications that he's not going to follow the same direction that
Liz Truss has done on taxes.
And could he even go after one of the taxes that Liz Truss did manage to keep in place which is the rise in National Insurance? All of these are
sort of open questions. There are not many people in this country right now Julia, who is betting that he'll change his Chancellor right off the bat.
Jeremy Hunt, the Finance Minister, all odds are that the odds on favorite or that Jeremy Hunt will remain in place. And that Fiscal Update for Monday
will go ahead as planned. It's an open question how much impact the Rishi Sunak will have in potentially tinkering with that or changing it?
He also has this huge challenge though of uniting his own party. And surely today as we get more news about whom the new cabinet will be? And how much
change there will be within cabinet?
We will know how much of an olive branch Rishi Sunak plans to extend to the other side of his party; those loyal to Boris Johnson are those loyal to
Liz Truss? Surely Rishi Sunak wants to reward those who have been loyal to him. But also, he has a long way to go to make sure that his party is much
fractured party is united going forward.
CHATTERLEY: Vitally important week begins today for this government. We shall see Scott, great to have you with us. Thank you, Scott McLean there.
OK, let's move on Russia will address the U.N. Security Council today. According to reports, the nation set to claim Ukraine might use the so
called Dirty Bomb on itself. Russia has insisted without proof that Ukraine plans to detonate an explosive mix with radioactive material.
And a so called false flag operation Ukraine denies the allegations and fears Russia is creating a pretext for escalation. Nic Robertson joins us
now from Kyiv.
Nic, great to have you with us two things! I think the first, that Russia has the ongoing ability to address the U.N. Security Council with their
concerns on this. And secondly, I think the genuine fear and you've been discussing this now for more than 24 hours of the leadership in the U.K.,
in the United States, in France and in Turkey, have perhaps what they perceive Russia to be doing here. Where are we today?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: You know both Ukraine and Russia are effectively going to the U.N. The U.N. Security Council is
going to debate. Russia's claim that Ukraine is in fact planning this dirty bomb Ukraine has appealed and offered to and it appears the International
Atomic Energy Agency, the EU.
Effectively the U.N.'s nuclear watchdog to come here and expect inspect its two sites. One is a scientific research center, which has a nuclear part of
it and another is a mining facility in the center of the country. Ukraine is throwing the doors wide open to the U.N. body to do that.
Russia is going behind closed doors at the U.N. Security Council to debate its claims to the point of the Russians have been speaking a lot over the
past few days a typically to Western officials specifically, the Defense Ministry, Defense Minister and the Military Chief of staff in Moscow,
speaking to counterparts in London, Washington, Paris and also in Ankara. This seems to indicate that Russia wants to talk now the question is what
is it want to talk about?
Let's lay out what we know. President Putin claims that he now controls these four regions is annexed illegally annex of Ukraine. And essentially
he thinks he's done. And he wants to try and get out of the war, which is actually losing.
So it creates the impression that his defense officials are having these conversations perhaps to see where avenues about ending the war could go.
But on the other hand, they're ratcheting up the rhetoric and the ante with the possibility of a nuclear dirty weapon.
They've gone down the road of speaking about the potential for tactical nuclear weapons. They know this issue gets the world's attention. So
they're bringing it up again, in a different form. I think this is where we're at.
CHATTERLEY: Trying to negotiate from a position of strength but seemingly without it, Nic. We shall see where it goes. Nic Robertson, thank you so
much for that.
CHATTERLEY: And just in the Russian court has rejected us basketball star Brittany Griner's appeal. She was sentenced to nine years in prison for
trying to smuggle a small amount of cannabis oil. She was arrested at a Moscow airport back in February just days before Russia invaded Ukraine.
It's not clear whether her lawyers will take the case to higher courts. But moments after the hearing a Senior U.S. Diplomat in Moscow continue to push
for Griner's release.
(BEGIN VIDEO CLIP)
ELIZABETH ROOD, CHARGE D'AFFAIRES, U.S. EMBASSY IN MOSCOW: Miss Griner appeared by video in the trial today. So we were not allowed to communicate
with her. Therefore, we will continue to request consular access. So we can be in touch with Miss Griner directly regarding her well, where her
welfare, how she's doing.
It is honestly tragic that Ms. Griner had to spend her birthday last week in a Russian prison rather than at home with her family and on the
basketball court with her teammates. Nothing in the previous sentence nothing in the result of today's appeal changes the fact that the United
States government considers Ms. Griner to be wrongfully detained.
(END VIDEO CLIP)
CHATTERLEY: Perhaps no surprise, the current state of geopolitics has been singled out as the biggest worry for one of the top names in global
finance. The CEO of JPMorgan Chase, Jamie Dimon said events around the world are an even bigger concern than the prospect of a recession in the
(BEGIN VIDEO CLIP)
JAMIE DIMON, CEO OF JPMORGAN CHASE: It's very good news right now, the United States people see it consumers, businesses, still spending so lots
of money, a lot of fiscal stimulus. But there's a lot of stuff on the horizon, which is bad and could not what doesn't necessarily but could put
the United States in recession.
That's not the most important thing for what we think about. We'll manage right through that. I would worry much more about the geopolitics of the
(END VIDEO CLIP)
CHATTERLEY: He was speaking at the future investment initiative and major investment conference in Saudi Arabia on a panel moderated by our very own
Richard Quest. And Richard joins us now. Richard, great to have you with us! First and foremost, what a powerhouse of a panel where you had the CEO
of Goldman Sachs, you had JPMorgan, the CEO of Blackstone, just to name a few.
No surprise, I think that the geopolitics was raised as a dramatic issue. But we're not just talking about a U.S. recession; we're talking about
potential for a global recession. And that's just one of the issues at the core of this.
RICHARD QUEST, CNN EDITOR AT LARGE: Yes, because of the Blackstone, and not just the Blackstone, just the deteriorating level of global discourse,
Russia, Ukraine, obviously. But that obviously has Russia-EU-U.S., U.S- China, U.S.-Saudi tensions there. France, Australia, over AUKUS
There are a lot of geopolitical tensions in the world that are going to make a deteriorating economic situation, harder to deal with. Whether it
makes it worse is academic, it's going to make it harder to deal with. And that's why David Solomon, of Goldman Sachs was pretty clear, the economics
are not good and a recession is likely.
(BEGIN VIDEO CLIP)
DAVID SOLOMON, CEO OF GOLDMAN SACHS: When you find yourself in an economic scenario like this, where inflation is embedded. It's very hard to get out
of it without a real economic slowdown. So I too am in the camp, that we likely have a recession in the U.S. going to have I think, most likely a
recession, we might be in a recession in Europe.
(END VIDEO CLIP)
QUEST: So either a U.S., a Europe or U.K. In fact, many people here are telling me that they think some of those places are already in recession,
whether technical or otherwise. But look, Julia, you know this part of the world.
This is really what it is about. It is about people coming here and doing business. And if you just look at this cross section, you will see major
changes. You will see, for example, the sheer number of women who are here in senior roles.
But women who are not covered, there is no requirement for people to be covered. You see Saudi men much more effortlessly. When they greet women,
shaking hands, you see a much more relaxed environment.
Now that's not to say that there aren't U.S. businesses here, or there aren't U.S. who want to stay away because of other problems with the
government. But changes happening, changes incremental. And I think that's what this year is really all about.
CHATTERLEY: Richard Quest back to ask you how many people are there? I can just hear the noise and the bars and the conversation behind you. It sounds
fantastic and congratulations once again on a magnificent McConnell. And we shall see more from those conversations later on "Quest Means Business" for
CHATTERLEY: Richard thank you so much for joining us. And as I mentioned that later in the show we'll hear more from Jamie Dimon and a part of an
exclusive interview with the Saudi ambassador to the United States about tensions with Washington.
Now speaking of global concerns, China's currency the Yuan fell sharply is Investors a pet issue deep concern about Xi Jinping is historic third term
in power. And the fact that officials who backed market reforms were missing from his new top team. Kristie Lu Stout has all the details.
KRISTIE LU STOUT, CNN CORRESPONDENT: Investors are still unnerved after that huge and historic sell off on Monday. And China's currency is feeling
the pressure today on Tuesday. The U.N. tumbled to an all-time low on international markets.
On the tightly controlled domestic market, the Chinese currency weakened to a new 15-year low. On Monday, the Hong Kong HANG SENG had its worst day
since the 2008 global financial crisis. Shares of the Chinese tech giant Alibaba and Tencent as well fell more than 11 percent wiping off $54
billion from their combined stock market value.
U.S. listed shares of Chinese tech firms also fell. China's tech industry has been a big target and Beijing's crackdown on private enterprise and
despite the release of a stronger than expected GDP report.
The markets are spooked by Xi Jinping's power grab at the 20th Party Congress. The Chinese Leader secured that unprecedented term as Party
Leader for the third time. He packed his new leadership team with loyalists. And he pushed out experienced economic policymakers like Premier
Li Keqiang, like Vice Premier Li Xi and the Central Bank Governor Yi Gang.
Justin Tang is the head of Asian Research at United First Partners; pinpoints why Investors are so concerned saying this. "The concern is the
lack of checks and balances in a partisan committee. Mr. Xi has never been supportive of consumer tech stocks and the market expects that stance to
continue or even more restrictions to arise."
Meanwhile, Michael Every, the Global Strategist at Rabobank tells CNN, "The Chinese Yuan so dramatically lower fixing today, and it's hitting fresh
cycle lows. If politics is now everything, and Chinese tech is nothing, then the Chinese Yuan is only going one way."
Now so far this year, the Yuan has weakened more than 15 percent against the dollar. It's on track to post its worst year in almost three decades.
Kristie Lu Stout CNN, Hong Kong.
CHATTERLEY: It's really that simple straight ahead foreign investors fleeing Chinese assets as President Xi tightens his grip on power. Kevin
Rudd, President of the Asia Society Policy Institute, joins us after the break with his take on what this entire means.
And port perturbation does a slow down at the busiest port in the United States mean fewer goods heading into the holiday season what's going on the
Port of Los Angeles. Executive Director will join us later this hour. Stay with us more to come.
CHATTERLEY: Welcome back and a dramatic week in politics in China leading to a more dramatic hit to financial markets in the region as we were just
hearing. President Xi Jinping formally beginning his unprecedented third term in charge presenting a leadership team stacked with loyalists and an
iron grip on power. Investors and analysts are left questioning the direction of policy going forward the potential negative impact on the
And the risk of further widening of the diplomatic divides with the West. The Chinese currency, the Yuan tumbling to its lowest level in 15 years or
stocks in Hong Kong had their worst day since November 2008 during the financial crisis.
It all comes as the U.S. discusses a possible meeting between Presidents Joe Biden and Xi Jinping at the G-20 next month. What does this all mean?
Well, Former Australian Prime Minister and President of the Asia Society Policy Institute, Kevin Rudd joins us now.
He's also the author of "The Avoidable War" the dangers of a catastrophic conflict between the U.S. and Xi Jinping's China. Kevin, always fantastic
to have you on the show!
I think the general consensuses this is going to mean far greater state control. But the investor response has been resolute and utterly negative.
There's always devil within the detail. What's your take of what we've seen this week?
KEVIN RUDD, FORMER AUSTRALIAN PRIME MINISTER: Well, I think one of the reasons you've started to see some bearishness in markets towards the
Chinese economy, is because Xi Jinping has been on a long trajectory of moving the center of gravity of Chinese economic policy towards the Marxist
left. This big trend began after the 19th Party Congress five years ago. A reassertion of the role of state owned enterprises.
More restrictions for the private sector, particularly in tech, and in property and in private education and also the emergence of new instruments
of industrial planning your doctrines of national economic self-sufficiency new concerns in China itself about the national security reliability of its
own supply chains.
And on top of that a new doctrine of common prosperity put all those things together. And you've had a relatively negative response from the Chinese
private sector itself, which represents some 61 percent of GDP. With the 20th party congress, what Xi Jinping did in terms of his pre-existing
ideological direction was not close, correct back to the market, and away from the party in the state?
In fact, you double down and you see that across the ideological pages, and the economic pages of the Congress report. Add to that the changes to his
economic team, and the loss of the - and the arrival of the new four. Then I think there is a question that analysts will pose, which is the ideology
looks increasingly problematic from a market perspective and from a private sector perspective domestically.
And furthermore, you've appointed a team with not a significant economic track record themselves. And how are they going to therefore sprinkle fairy
dust across the top of this in order to rehabilitate Chinese growth levels? I think that's what's causing concern out there in markets.
CHATTERLEY: Is it short sighted to your point, and I understand all the concerns you mentioned but if I look at some of the names that are now
joining the Politburo Standing Committee. And we're talking the potential future Premier Li Keqiang, Li Xi, Cai Qi.
I've got all the names and I can give people an indication of who I'm talking about. And you have to forgive my pronunciation. Because I know
you're fluent Mandarin speakers, so you can correct me afterwards.
RUDD: Pretty well actually --.
CHATTERLEY: Not bad, but they join after heading up rich provinces where the focus on growth was a top priority and a way that their performance was
judged. They understand the importance of growth, particularly at a time when they have such high youth unemployment in China. It's OK, shifting
ideologically towards the left.
But if you don't have growth in China, if you can't provide the jobs that are required. The dangers, the internal dangers, surely are increasingly
RUDD: If you look at the four new additions to the standing Committee of the Politburo.
RUDD: And you've mentioned that perfect pronunciation my friend Li Keqiang, who is likely to be the new Premier and he goes back to his days of working
politically with Xi Jinping in Georgia when Xi Jinping was party secretary in Georgia. If you look at Cai Qi, for example, that relationship goes back
even much earlier to Xi Jinping stays in Fujian Province when he was party secretary.
And Cai Qi has been subsequently promoted to take over as Party Secretary, the Beijing municipality. Plus, on top of that being deputy head of the
National Security Commission of the party center if you go to Ding Xuexiang, who is the Head of the General Office of Xi Jinping at the
In other words, his Chief of Staff, that relationship goes back to their time working together when Xi Jinping was Party Secretary in Shanghai. And
the Xi, a much older set of family based connections with the Xi family. Put all those things together, I think the overall analytical call is that
you don't have among them a leader who has been responsible for the tasks of macro-economic management.
Yes, a number of them have been in significant provincial positions. But running a province a bit like running a state in the United States of
America or Australia, for that matter, where the emphasis is on how do you roll out your infrastructure? How do you get major projects going?
It's somewhat different set of skills to those required in managing a macro economy. Where you're dealing with monetary policy, fiscal policy, as well
as long term productivity growth and the drivers of productivity growth, and the overall balance between public and private sector it's a different
set of skills.
So therefore, I think that's why there is some skepticism. Of course, these individuals may well prove us wrong in this substantive performance. But at
a first call, it's quite a different set of CVS that they bring to the table.
CHATTERLEY: Yes, and far more micro focus and greater control and therefore perhaps having a negative impact on growth because that's the assumption
that's the stage that's being made. I think, and I want to get your wisdom on what this means more broadly for diplomacy?
Of course, there's talk about a potential first meeting in person between U.S. President Joe Biden, and of course, President Xi Jinping as well. And
already I've seen people talking about the importance of Taiwan and their independent stances on that. But surely, by far, the bigger question at
this moment is China's stance towards Russia?
And at a time when we're actually seeing China warning its own citizens now that remain in Ukraine to leave this palpable perception perhaps. And
perhaps you can, you can tell me if I'm wrong. But actually China's concerned about the nuclear risk.
Or the greater escalation even further than we're seeing in the war at this moment what's your sense? How concerned are China and the Chinese
government about nuclear weapons threat?
RUDD: Well, an excellent question. Julia, can I tie off quickly on the earlier conversation on growth with one final thought, which is, to be fair
to the Chinese system. What the document also contains with 20th Party Congress is a preoccupation with better income redistribution within the
country. Some call this common prosperity.
But it's a wider remit than that. I think driving it is also a macro concern to do. What can be done to increase individual consumption levels
within China by acting more to support families with childcare costs, aged care costs, education costs? And frankly, to deliver more into the
pocketbooks of average Chinese in order to lift consumption, easy to say harder to do.
And that of itself could have an impact in terms of business confidence on the way through, if you change the profits wages share. But that at least
is a thematic worth examining further in the 20th Party Congress report. On the sixth national security questions you've just raised.
Can I say this? That you're right, China, in my judgment, would be fundamentally concerned about the real world risk of Vladimir Putin making
real his threats on multiple occasions to deploy tactical nuclear weapons in the battlefield in Ukraine. Given how bad his military badly his
military campaign is unfolding in that country.
The real question international community, however, is this. What leverage is China currently applying to the Russian system to prevent Putin from
doing that? As we all know, Russia now because of the invasion of Ukraine really has nowhere else to go in the world in the future for diplomatic,
political and economic support other than Beijing.
So the real question is, will China deploy whatever leverage it has in Moscow to say very directly at the leader to leader level at a military to
military level, and more broadly, through public diplomacy, to cause Putin to step back from the brink.
RUDD: If in fact, he is considering the actual use of these weapons systems, if he went ahead and used it, and China had not, as it were
publicly made efforts to prevent him from so doing this will also rebound significantly in terms of global perceptions of China's ultimate level of
comfort with Vladimir Putin's military and political behavior in the world.
CHATTERLEY: So I have about 30 seconds to answer the question that you pose to yourself, now is the time with the power that he's gained, and with the
national interest of his own to intervene directly and utilize that power?
RUDD: Absolutely, I wrote an opinion piece in yesterday morning, South China Morning Post to that effect, knowing that that papers often read in
the central Chinese leadership, and it's time for China to act.
The stakes are very high, and then won't just be catastrophic for Europe, Ukraine and the world to break this effective nuclear ban, which we've had
since 1945. But China will be criticized for not having used its equities in Moscow to prevent it. China needs to act.
CHATTERLEY: Kevin Rudd, Former Prime Minister of Australia and President of the Asia Society Policy Institute, sir, always a great pleasure to speak to
you. Thank you so much.
And just a reminder, his latest book "The Avoidable War: The dangers of a catastrophic conflict between the United States and Xi Jinping's China"
available now. We're back after this stay with us.
CHATTERLEY: Welcome back to "First Move". U.S. stocks are up and running on Wall Street this Tuesday and the major Reduce rebounding after a weak pre
market session as investor's way a deluge of important corporate earnings and results looking pretty good overall.
CHATTERLEY: Let me take you through some of those that we've seen. Coca Cola raising its full year guidance, it's been able to raise prices,
without impacting sales. However higher costs also hitting the bottom line.
And manufacturing giants General Electric 3M and Office Equipment firms Xerox profit at comical General Motors beating expectations it says that
supply chain issues at its manufacturing facilities are finally easing that's good news and ties to our next guest.
The Port of Los Angeles says it's winning the great supply chain challenge to the largest container port in the United States offering an encouraging
outlook on the shipping bottlenecks that have helped fuel the U.S. inflationary crisis.
Now as this graph dramatically shows, the daily backup of container ships at the port has virtually disappeared as import volumes soften. In fact,
September was the weakest month for inbound shipments at the port since 2009 with imports falling some 26 percent.
Now some of this is due to ongoing labor negotiation issues leading to cargo being redirected to other ports and also weakening U.S. consumer
demand. To give us the context, Gene Seroka, the Executive Director of the Port of Los Angeles joins us now. Gene, welcome to rainy foggy New York
with your amazing suntan!
As always, it's great to have you here. When I saw these statistics, my first reaction was wow. And I'm glad to have you with us to get context.
What part of this slowdown is because retailers have pre bought early to avoid not having goods on the shelves ahead of the holiday season?
What part of it is rerouted traffic because of the labor negotiations that you're undergoing? And what part is slowing consumer demand? What's your
GENE SEROKA, EXCUTIVE DIRECTOR, PORT OF LOS ANGELES: Well, good morning, Julia. It's great to be here in New York. Look at a 20 percent drop over
the past two months and it's broken down into two segments about 12 percentage points is cargo that's moving to the east and Gulf Coast
premeditated by importers, because they were worried about protracted labor negotiations and potential disruptions.
None of that has happened yet both sides have put out two media releases saying that they won't cause any problems while they're at the table
bargaining for this all important contract. The other piece about eight percentage points are cargo that came in earlier than normal.
June and July were our peak months because importers did not want to get their cargo caught up in delays and make sure that they had it going
through the Omni channel distribution network.
We've also seen some bulkier cargo appliances, sporting goods and furniture taper off just a little bit. Those one time purchases during the pandemic
don't repeat themselves.
CHATTERLEY: OK. And so what we didn't talk about there was some inherent slowdown in purchasing and lessening of demand. Gene, is there any sense
because we're keep searching around for signs of sort of pre recessionary behavior or recessionary behavior? Are you saying you're simply not seeing
that it's other things going on?
SEROKA: That's right, Julia. What we've seen for July, August and September, that consumer buying has been about flat, which is good, because
it's still elevated above pre pandemic days. Yet we're all watching this very closely in the face of 8.2 percent inflation and higher producer
wholesale prices as well.
CHATTERLEY: Yes, flatten this case, when you're talking about the inflation rates that the country is facing is a positive I think? You mentioned,
you've sent out these two press releases that have said look, we may be negotiating and we're talking of what 22,000 dock workers are involved with
this union across 29 West Coast ports 70 terminals, I believe that are involved as well. I mean, it sounds dramatic on paper.
Is that message getting through and are people saying fine, we may have redirected some of the traffic that we've planned over the past couple of
months, we're going to redirect that back through the Ports of Los Angeles now is the message getting through?
SEROKA: We've got to keep bringing that message to the import and export community because the cargo volume is not showing that. Unfortunately,
we've got backups in Gulf Coast and East Coast Ports, which do nothing for us as a nation from a competitiveness standpoint.
We've got to make sure we bring certainty to the supply chain and keep this cargo moving fluidly as we head into the all-important retail season and
the harvest season for our American agricultural farmers.
CHATTERLEY: If, let's say you did manage to get that message across and we did see the pickup in deliveries. Can you cope with it because we showed
that chart and it showed that the backlog that we've been talking about now you and I for many months are virtually disappeared? Is that just a product
of the slower level of deliveries or if they did pick up again would you be able to handle it?
SEROKA: I believe we can. We've learned so much over the last couple of years, Julia. We brought those ships that were backed up from 109 vessels
down to single digits, all while moving near record amounts of cargo in the first seven months.
Only the last two months have we seen a softening in the marketplace. So we've been able to move the containers out at a higher velocity than ever
before through our partnerships with importers, exporters, and our service providers.
The Los Angeles marine terminals have done a tremendous job. That cargo coming back our entire key indicator shows we can handle a large surge here
before the holidays and help our retailers and others get product to market.
CHATTERLEY: Good to know. In the past I've also asked you about trade between the United States and China. And we talked amid the lock downs in
China the emphasis that the authorities put there on keeping those ports open and working and ensuring deliveries and exports were taking place.
What are you seeing Gene because there's clearly a lot of focus on the numbers that are coming out from China and the obvious slowing that we've
seen in the economy and obviously they're still running the zero COVID policy across the country when necessary? What does the data tell you?
SEROKA: The prioritization is still there. Folks like Yan Jun, who runs the Shanghai Deep Seaport Nan Shan Deep Seaport outside of Shanghai has been
doing a tremendous job as have Ports in Ningbo and South China.
60 percent of our trade imports and exports, emanates to and from China, really important market. Now with Xi Jinping taking for a third term, there
will be a lot of eyes on how we can continue to fuel that export market for China of which were the biggest buyer here in the United States? So there's
a lot to continue to work on keeping that supply chain fluid between the two largest trading nations, and biggest economies is key for success.
CHATTERLEY: But you're not worried. I mean, clearly, if you look at the financial markets, just in the last week or so there's real concern that a
greater level of control for Xi Jinping is going to mean policies that result in the suppression of growth.
Any sense from you or the conversations that you're having that that will have a significant impact from you because as you point out, when 60
percent of trade volumes, this has huge import for you.
SEROKA: It remains to be seen, of course, with the information that's come out of the meetings over the weekend and into the early part of the week.
Exports play a huge role in China's GDP.
And I know that's very important after having worked there on the ground for many years living in Shanghai.
But also American companies, both on the import and export side of the ledger have been reevaluating their supply chains whether it's moving to
other nations in Southeast Asia for production and sourcing, bringing cargo back manufacturing to near and, and onshore locations, all of that is being
evaluated to make sure that we have resilience in the supply chain.
This is not just one flip of a switch. Many of these relationships on sourcing from China have been built over the past three and four decades.
More and more will come of this. And we'll have to see how the supply chain can continue to modernize.
CHATTERLEY: Yes, it's interesting to hear just your thinking now, particularly in sort of ending of unopposed COVID while the resilience of
supply chains is so important, and we're talking about it more than ever before, which can only be a good thing.
Gene, once again great to have you in New York thank you for joining the show and we'll speak again soon! Gene Seroka there the Executive Director
of the Port of Los Angeles thank you, sir! OK up next, we return to Riyadh find out what the CEO of JPMorgan Chase thinks about streams between the
United States and Saudi Arabia.
CHATTERLEY: Welcome back to "First Move"! The cost of living crisis gas prices inflation have become pivotal issues in the U.S. midterm elections.
The decision by OPEC Plus to cut oil production has therefore further strained ties between the United States and huge oil producers Saudi Arabia
speaking at the FIA Institute meeting, JPMorgan CEO, Jamie Dimon. So disagreement between long standing allies should be expected and can be
(BEGIN VIDEO CLIP)
DIMON: Saudi Arabia and United States with allies for 75 years. I can't imagine any allies agreeing on everything and not having problems. They'll
work it through. And I'm comfortable that folks on both sides are working through and these countries will remain allies going forward and hopefully
help the world develop and grow properly.
(END VIDEO CLIP)
CHATTERLEY: And CNN's Becky Anderson recently spoke with Princess Reema Saudi Arabia's Ambassador to the United States, about the Kingdom's
increasingly rocky relationship with Washington, his part of that exclusive interview.
PRINCESS REEMA BINT BANDAR AL SAUD, SAUDI AMBASSADOR TO U.S.: It's clear where to the point of disagreement, and many people have tried to
politicize this, but you're hearing it from the horse's mouth.
This is not political. This is purely economic, based on the expertise of 40 or 50 years of mapping and trends. We do not engage in the politics of
anyone. We engage simply as a balancer and a stabilizer of the economy through the energy market, as we've done historically.
BECKY ANDERSON, CNN CORRESPONDENT: Well, let me provide as a counter argument to that. The White House perspective, the White House has accused
Saudi of siding with Russia is the Kingdom, siding with Russia?
AL SAUD: Now the kingdom has a policy of engaging with everybody across the board, those we agree with and those that we disagree with. The
relationship that we had with Russia is what allowed us to free prisoners of war, two Americans, five Brits, one Croat, and a selection from other
countries. We view our role as a mediator and a communicator.
We've supported Ukraine humanitarianly. We have given over 400 million. We collaborated with Ukraine and Poland to give 10 million to allow for the
refugees that were coming out of the Ukraine and spilling into Poland, a safe landing. That's what we do. That's the value of our engagement. Is it
siding with Russia?
ANDERSON: No. Have you personally spoken to the administration about this? What's the communication?
AL SAUD: I do very regularly with the administration. And frankly, it's an administration that I have profound respect for. I have only had the most
gracious and direct communication as we should. That's how partners communicate with each other.
And by the way, it's OK to disagree. We've disagreed in the past, and we've agreed in the past. But the important thing is recognizing the value of
ANDERSON: Can the Kingdom do without a relationship with Washington?
AL SAUD: Becky, the world can't do without a relationship with the United States of America. I have no doubt. The United States is the United States.
For 80 years, it has been our strategic ally. For 80 years, it has been our partner.
You know, I hear a lot of people talk about reforming or reviewing the relationship with the Kingdom. And I think, actually, that that's a
positive thing. This Kingdom is not the Kingdom it was five years ago. It's not the Kingdom it was 10 years ago.
So every piece of analysis that existed is no longer relevant. We are a young population. We have young leadership. We have an aspiration and a
goal to engage with the world in a way we never did before.
(END VIDEO TAPE)
CHATTERLEY: And you can watch the rest of Becky's interview with the Ambassador on "Connect the World" after the show at 10 am Eastern time at
5pm in Riyadh. OK coming up after the break, a near $200 million mistake. Adidas unties itself from Kanye West following anti-Semitic remarks, the
sportswear giant throwing in the towel the details next.
CHATTERLEY: And welcome back to "First Move". Adidas cutting ties with EA, formerly known as Kanye West, this after he made Anti-Semitic remarks in
recent weeks. Christine Romans joins us now on this story. Christine, fantastic to have you with us!
I'm afraid it's not a better story, to be honest. But this partnership has been under review since October when I believe he wore a white lives matter
shirt in public. For me this latest comments is a question of where free speech ends and where hate speech begins this is clear cut I think?
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes, I think it is. And you know the company has been criticized for taking too long to cut ties.
But in a statement released today, they said after a thorough review, they have taken this decision to terminate him.
So they've been looking at this for some time. They don't tolerate anti- Semitism. And it is not in you know, the core beliefs of the company and how it treats its employees and how it expects his customers to be treated
It's interesting to me, because you know, he's a rapper, musician, but his shoe line that he's had with Adidas since 2013, has really built a lot of
his wealth. I mean, Forbes puts his net worth at $2 billion, and says that much of that is from his work with Adidas.
And Adidas pointing out, you know how deep these ties run as well, in its statement saying they're going to take a financial hit for this and trying
to quantify that for their investors and for the public short term negative impact of up to 250 million Euros on net income for 2022 given the highest
seasonality, they say, of the fourth quarter, so a big hit there.
We've also been watching Mr. West sort of pull himself away from many of his other strategic alliances. You know, back in September, he received a
letter from JPMorgan Chase saying that he would need to find a new bank account after he had been on CNBC sort of publicly firing JP Morgan.
And you've got his - his partnership with GAP which unraveled really about a month ago and that was Ye saying that a gap wasn't fulfilling its end of
the bargain different you know, different strategic sort of idea. So one after another more recently you're seeing these brands back away from him
because of things he said hateful things he said. But his sort of business life has been unraveling here for stumped for some weeks now.
CHATTERLEY: Yes and your monetary value doesn't protect you. But on that infamous podcast, "I can say Anti-Semitic S-H-I-T and Adidas cannot drop me
wrong". Way to go Christine Romans, thank you so much for that!
ROMANS: Nice to see you.
CHATTERLEY: Now, as you've heard, the UK's new Prime Minister says he's the man to lead the country out of the unprecedented challenges it's facing.
Rishi Sunak laid out his leadership vision just hours ago at Downing Street. But before that, a vision of a different kind grace disguise of the
Fireworks in the night sky over the English City of Southampton it was to celebrate Diwali the Hindu festival that symbolizes the power of light over
darkness. This year's show was extended in honor of Prime Minister Sunak becoming the UK's first Hindu Leader. The display was organized by temple
co-founded by his grandparents.
And across the Atlantic Joe Biden also took part in Diwali festivities and hailed the groundbreaking nature of Prime Minister Sunak's win.
(BEGIN VIDEO CLIP)
JEO BIDEN, PRESIDENT OF THE UNITED STATES OF AMERICA: As my brother would say, go figure. And the Conservative Party expected to become the Prime
Minister I think tomorrow when he goes to see the King. Pretty astounding a groundbreaking milestone it matters, it matters.
(END VIDEO CLIP)
CHATTERLEY: And he was right it was today. And that's it for the show. "Connect the World" with Becky Anderson is up next. We'll see you tomorrow.