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First Move with Julia Chatterley
U.S. Futures Unsettled after Monday Sell-off; China Holds State Memorial Service for Former President; Klarna Cut its Workforce by 10 Percent in May; IATA: Airline Industry to Return to Profitability in 2023; UAE Space Chief: Waste must not Keep us from Accessing Space; Morocco Play Spain, Portugal Face Switzerland. Aired 9-10a ET
Aired December 06, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST: A warm welcome to all our First Movers around the globe. Another game on, edition of the program today, call it a World
Cup Football Fiesta. As Portugal, Switzerland, Morocco and Spain battle it out to reach the quarterfinals over in Qatar.
The "First Move" world cup warm up coming up over the next hour and from football's frantic pace to the race to outer space. Yes, it's all happening
on the show today Qatar's neighbor, the United Arab Emirates, shooting for the stars and Mars hoping to harness the benefits of space exploration.
We'll hear from the Chairwoman of the U.A.E. space agency. Her Excellency Sara Allen Mary later on in the program.
And the view of the heavens looking great but oh heavens, the number on Wall Street take a look at this U.S. stocks thudding back to Earth on
Monday all the major U.S. indices falling well over 1 percent a cold winter wind chilling that Wall Street sentiment that we can say that most clearly.
As you can see C, for consumer strength new numbers, it's showing a big jump in U.S. spending on services. That's actually a red flag for the
inflation fighting Federal Reserve, which meets next week to raise rates once again.
O, in the meantime for oil whipsawed by U.S. recession concerns and uncertainty over that brand new $60 cap per barrel cap on Russian crude. L,
in the meantime for layoffs Pepsi the latest big firm to announce hundreds of layoffs as it braces for an economic slowdown and D for diminished
demand Tesla's stock tumbling 6 percent on Monday.
On reports it's slowing production in China as lockdowns weigh on sales. Tesla, in the meantime denying that report and Monday's news may have been
cold today's picture also not so bold U.S. futures remain pretty unsettled.
As you can see that Europe also softer after a mixed handover during the Asia session though I have to say Taiwan is all the talk today with a
monster new investment in the United States. And that is where we begin today's show.
The world's most valuable chip company, Taiwan Semiconductor betting more chips on U.S. growth the firm is set to announce it will triple its
investment in the state of Arizona to some $40 billion. Marc Stewart is here with all the details on that story. Great geographical
diversification, I think for Taiwan semi, but it's also a big win for the United States in terms of FDI and their supply chain for big companies like
Apple, of course and Nvidia.
MARC STEWART, CNN CORRESPONDENT: Absolutely, Julia, there's certainly a political side to this and then there is a practical side to this. Let's
first talk about the practicality. As you mentioned this $40 billion investment, it's been touted by the company as one of the largest
international direct foreign investments in history that again, according to the company.
So there's certainly some novelty to this, but there's also some necessity. As we have been discussing now, for months, more than a year, there has
been this big push in the United States to increase domestic semiconductor production. As we saw during the pandemic, it proved to be a big challenge.
Certainly, we use these chips for our laptops, but they also are needed in our smartphones, washing machines, automobiles, the list goes on and on.
And big companies like Qualcomm, like Apple all depend on Taiwan Semiconductor to help make these products. And these chips are not
something that everyone can necessarily make.
They require a finite production style. They require a lot of intellect, a lot of smarts and Taiwan Semiconductor has been able to refine that
process. So for the United States to have a plant here of this scale, of this capacity, of this intellect, it's a very big deal.
In addition to the facility itself, this will generate thousands of jobs. At least 10,000 jobs are what the company is saying. And it's something
that President Biden will likely discuss when he tours that facility, Julia, later today here in the United States.
CHATTERLEY: Yes, the practicality is so important here. And I think the statistic that underscores this best and I think it came from the White
House last year, they said that U.S. semiconductor is around 12 percent now of the global total.
If you go back a couple of decades, it was 37 percent. And we saw, as you pointed out during the pandemic, how vulnerable that made global supply
chains and of course all the things we use here in the United States or in the West, which leads me to the challenges of the politics in this moment.
[09:05:00]
CHATTERLEY: And Taiwan strategically incredibly important globally for the economic growth outlook, and of course, as we know, challenged in terms of
relations with China.
STEWART: Right, we have three economic superpowers, we have the United States, we have China, and we have Taiwan. And to say that the relationship
between all three is complicated would be a big understatement. In fact, in recent months, we heard from President Biden talking about the need to curb
China's access of semiconductor and chip making technology from the United States that is thorny within itself.
We also have these complicated relationships about autonomy with Taiwan. So there are several ingredients in this which make this a politically
complicated situation. And it's something that perhaps we will hear more from the White House.
Not sure exactly, you know, as far as specifics after that meeting with President Xi and President Biden. But we have to acknowledge that the
dollars and cents of this along with his intellectual property. I mean, it sets up the road for a very complicated discussion.
CHATTERLEY: It most definitely does Marc and I love the illustration of your point about three superpowers but prepared to get a Harry style Howler
from the European Union after that comment. Thank you so much for that Marc Stewart. OK, moving on, and remembering Jiang Zemin, China holding state
funeral for the Former Leader who died at the age of 96 years old last week.
Speaking at the service, President Xi Jinping called for unity after recent protests against COVID restrictions. Ivan Watson joins us on this now. And
I think we can agree it was a show of unity at this funeral with moments of silence across the nation. But this was also a very different leader
presiding over a very different China from that which we see today and of course, that under Xi Jinping.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's right and his death last week did trigger waves of nostalgia that were appearing in the
heavily censored Chinese internet. Despite that, I mean, the current government pulled out all the stops to commemorate Jiang Zemin to afford
him the highest honors. So for days now, there have been ceremonies leading up today's Memorial, which was held in the Great Hall of the People.
For instance, Xi Jinping was at the airport in Beijing there to greet Jiang Zemin's body. Last week, he was at the military hospital on Monday, bidding
farewell to Jiang Zemin who was in an open casket there and greeting his widow and embracing his son in an unusual kind of sign of affection really,
for a Chinese Leader.
And then speaking at this memorial after Jiang Zemin was cremated on Monday, Tuesday in the Great Hall of the People and just applauding his
predecessor, who governed in the 90s in the early aught for some 10 years, calling him an outstanding leader with high prestige, a great Marxist, a
long tested communist fighter, and calling his death and incalculable loss for the country.
As you also pointed out, there was a call for unity. And this coming at a somewhat sensitive time after a last week we witnessed the biggest burst of
public basically disobedience and frustration with the authorities that we've seen in a generation in China. This is his people in nearly 20 cities
across the country who protested against the strict zero COVID policies. So there was sensitivity here and concerned because there is historical
precedent for other communist leaders when they pass for that to kind of set the stage for calls for reform and protests.
We have not seen that in connection with Jiang Zemin's passing. Instead, we saw people lining the streets earlier of Shanghai, his home city, and then
Beijing today paying their respects to their departed leader. And among the people who had gathered there, this is very interesting was Xi Jinping's
predecessor, and the man that Jiang Zemin handed off too handed power to Hu Jintao the last time we really saw him in public was at the end of October
at the communist People's Congress.
When he was somewhat uncomfortably ushered off stage he was sitting beside Xi Jinping and there was this strange moment where he was basically led out
of the rumor a bit against his will. He was filmed paying his respects to Jiang Zemin on Monday.
[09:10:00]
WATSON: He had an aide next to him, but we did not see a repeat of that strange moment in an otherwise very scripted ceremony honoring a fallen
leader, Julia.
CHATTERLEY: Fascinating to see him there. It's exactly what I was going to ask you, actually. Ivan, thank you so much for that and actually, to your
point, other things to protest about and that's where we had next. Ivan, thank you.
And more changes in China, Beijing's two major airports will no longer require departing passengers to show a negative COVID test to enter their
terminals. This comes as a number of Chinese cities begin to ease COVID restrictions. And Selena Wang has all the latest.
(BEGIN VIDEOTAPE)
SELINA WANG, CNN CORRESPONDENT (voice over): This is the kind of line Beijing are stand in. Outside in the cold to get there COVID tests a 48-
hour test are required to get into most places. But there aren't many places to go. Much of Beijing is still closed down.
WANG (on camera): This is one of the most popular tourist places in the city. But the restaurants are largely closed and the malls are pretty
empty. So this McDonald's is still open, but for takeaway only.
But even to get takeaway, you've got to prove that you're clear of COVID. Here's how I do it I open up the health app on my smartphone, I scan the QR
code. So it says I've got a green code, and I've got a recent COVID test so I'm good to go.
This code dictates all of our daily lives in China green means good to go. Red means I may have to isolate at home or go to a mass quarantine
facility. This allows China to track the movements of virtually all 1.4 billion people in the name of contact tracing. I've got to scan my code to
get into a taxi or Public Park or mall or a coffee shop or even a public bathroom.
WANG (voice over): I ran into a group of delivery people on the street, they've got to do COVID tests every single day to do their jobs. This woman
tells me the pandemic has been hard on her. I asked her why she says it's because she's scared at the virus.
WANG (on camera): Getting COVID in China is unlike anywhere else in the world. You and your close contacts all get sent to a quarantine Center.
This is a convention center in Beijing that's been turned into a massive quarantine facility with thousands of beds.
But some of these facilities in the country they are in very rundown and unsanitary condition and then your whole building or community could go
into lockdown.
WANG (voice over): I spoke to a man who has been in and out of quarantine six times already just this year. He tells me his whole building of more
than 200 families went to a quarantine facility last month because they were considered close contacts. He says he's not scared to get COVID
because omicron is less severe and his whole family has been vaccinated.
I approached a few people just released from this mass quarantine center here. I asked if they had tested positive for COVID. Yes, the man nods and
says they have recovered. How many days did you spend in there? I asked. 7 days he said. Unprecedented protests recently erupted across China.
WANG (on camera): They're chanting that they don't want COVID tests. They want freedom.
WANG (voice over): Authority swiftly crackdown on the protesters, but they are finally softening their stance on zero COVID. Some cities are lifting
lockdowns changing COVID testing requirements. Under some conditions people can now quarantine at home if they have COVID which is a huge deal.
But this country has already built up a whole infrastructure around zero COVID spending all of its resources on quarantine facilities and COVID
testing. So it's going to be a long and slow exit from zero COVID, Selina Wang, CNN, Beijing.
(END VIDEOTAPE)
CHATTERLEY: To Ukraine now, a new evidence that the country may be raising the stakes and the war with Russia by showing its ability to strike deep
inside enemy territory. A Russian official said Tuesday a drone attack took place at an airfield in the Kursk Region, setting an oil storage tank on
fire. The admission comes one day after the Kremlin accused Ukraine of drone strikes on two Russian bases one more than 500 kilometers from the
Ukrainian border.
Kyiv has not claimed responsibility for the attack. And shortly afterwards, Moscow launched a barrage of missiles at Ukraine hitting targets connected
to the energy sector and civilian homes. President Zelenskyy said Ukraine intercepted most of the missiles.
(BEGIN VIDEO CLIP)
VOLODYMYR ZELENSKYY, PRESIDENT OF UKRAINE: Every Russian missile shut down is concrete proof that terror can be defeated. But we still cannot give
complete security to our sky. There were several hits, unfortunately, there are victims.
(END VIDEO CLIP)
CHATTERLEY: And more hopeful signs. We're just learning about a prisoner swap between Ukraine and Russia involving dozens of soldiers on each side.
CNN's Will Ripley has the details.
WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Right now I'm assuming Ukraine about 25 miles from the Russian border and we've just received word
that a prisoner exchange has taken place. 60 Ukrainians coming back from Russian prisons and 60 Russians headed back home at this hour.
[09:15:00]
RIPLEY: This is the result of negotiations between the Ukrainians and the Russians that have been going on for likely quite some time. We expect to
learn more details as we head to speak with some of the people who've been involved in this. These prisoner swaps have been one of the few bright
spots for the families who have endured so much suffering in this unprovoked cruel war that is going on some nine months now.
These family members who have been waiting desperately for worried about their missing loved ones. Will be able to actually see them in the coming
hours and days, and they'll be able to share their stories of what happened when they were captured and what their life was like as prisoners of war.
Meanwhile, there is new concern that the situation may actually be escalating with Ukraine launching apparent drone strikes far into Russian
territory even though the Ukrainians are not claiming responsibility here.
Russia is blaming Ukraine for these massive explosions caused by Soviet technology, jet drones that have flown in one case just 500 miles outside
of Moscow to his strategic military base. That is a situation that we continue to monitor here in Northeastern Ukraine. Will Ripley, CNN, Sumy,
Ukraine.
CHATTERLEY: OK, we're going to take a quick break here. But coming up after this, the U.A.E. mission to be a global leader in space we'll hear from the
woman who's driving the country's efforts later in the show. Plus, we'll talk buy now, pay later on the outlook for financial services with the CEO
of FinTech Giant Klarna that's next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move", it's clearly the season for spending but it also arrives at a difficult time for both the consumers and
the global economy. Last year, the buy now pay later market was worth $132 billion worldwide that forecasters say it will grow to nearly $4 trillion
by 2030 and that's something that FinTech Giant Klarna, of course, as we've spoken about before, is looking to capitalize on.
The Swedish lender may be best known for that, but it's also got plenty of other credit options too and operates with a full banking license in
Europe. It's also been a turbulent time across the FinTech space with falling valuations, job losses and questions about the path to
profitability. And joining us now is Sebastian Siemiatkowski. He is the CEO of Klarna.
Always fantastic to have you on the show, welcome. You clearly have a lot going on, as we've discussed in the past during growth phase, but I think
it's clear to see as well that the operating environment has changed pretty dramatically too.
[09:20:00]
CHATTERLEY: Talk to me about some of the challenge and so how you tackling it? How you're thinking about this moment?
SEBASTIAN SIEMIATKOWSKI, CEO OF KLARNA: Sure you know, I mean again, we have a little bit of a benefit to the fact that I've been doing this
company for 18 years. So I've been around for a while. So this is not the first recession that I see and, you know, we already believed in back in
January this year that, you know, macro conditions were starting to worsen slightly.
So we did some tightening to our underwriting for a longer term credit. And then in May, we did further tightening on the underwriting side. And in
addition to that, also, we obviously concluded that the investor sentiment has shifted dramatically.
People don't want to lean as much into the future, they want to see profitability now. Fortunately, Klarna has been profitable for its first 15
years of existence so we can have, we know how to do it and so we have to make a shift, and unfortunately, lead those who are still making have to
make changes to organization.
But right now, we are in this path back towards profitability that we hope to accomplish on a month by month basis of the summer. And actually, macro
economical speaking, were a little bit positively surprised by especially, you know, Cyber Monday and Black Friday and so forth. In regards to
consumer sentiment seems slightly stronger than, you know the portraying of it in media, so to speak. So if we look at like what we're actually seeing
from spending, it actually looks slightly more positive, but obviously, still a tough macro environment.
CHATTERLEY: It's interesting, isn't it? So you, what you're saying is you're seeing less spending overall, but actually, it's stronger than, than
you anticipated?
SIEMIATKOWSKI: Well, - large degree, still primarily online transactions and it isn't necessarily comparing apples and bananas. At this point of
time, because a year ago, we still had COVID restrictions in most of our jurisdictions and now we don't, right, so we're not really, it's going to
take another six months before that cycle is out of the system entirely and we will have really apples and apples to compare.
And I think that's also a little bit what you saw in Q3. August was quite slow and ecommerce, you're starting now to see some fairly good indications
in the growth rate. We saw about 10 percent growth rate on, you know, Black Friday compared to a year ago, which, you know, is surprisingly strong
growth, considering that at that time, there were COVID restrictions, and there are none today.
CHATTERLEY: Yes, and I want to talk about the point that you made about the underwriting tightening as well, because I do think this is a vital point.
And it ties to keeping down any form of delinquencies, which I can also see that you're doing, but I'm sort of interested in their rationalization that
we've seen across this space. And that's obviously translated to a dramatic lowering, let's call it that a valuation too.
How that is tied to the conversations that you're having with investors? The ability perhaps, to raise money, the focus on growth, and I think that
perhaps ties to the point that you made about, you know, 15 years of profitability, and you've said, you'll get back to that in the latter half
or post the summer next year. Is the conversation from investors far more about, hey, talk to me about profits, perhaps and it than it ever has been
before?
SIEMIATKOWSKI: For sure, you can definitely see that shift, but also thing here. We took those decisions and kind of bite that, you know, in May, and
you also have to remember that because we're regulated bank. We cannot do liquidation preference and all types of special equity types, so we only
have common equity.
So do you think, to some degree, the market correction that still was on par with public peers, like PayPal, and others, you know, down to about 85
percent.
CHATTERLEY: Yes.
SIEMIATKOWSKI: On these representatives, what's happening in the private markets, but a lot of FinTech's out there and other companies? Right now,
we're able to sustain the illusion of high valuations through, you know, special equity instruments. But in our case, obviously, yes, there's a
tremendous, the question is very different from investors right now, profitability when it's going to happen? How fast you're going to get
there?
At the same time, I would say to some degree. Right now, no investors are talking to us, because they're basically well, Klarna took the actions that
are needed. They have a portfolio of other companies in the tech industry, who maybe haven't taken the decisions yet and haven't taken the actions
necessary in this new world and I think they seem to be more concerned with them than with us to be honest. So right now, I'm not hearing that much
from investors, they seem to be fairly busy with other companies.
CHATTERLEY: Yes, I mean, I think this is a tough one and I'll just point out to my viewers, we're having a little lamb trouble. We're establishing a
picture with you. So we're showing lots of adverts, which are perhaps good for you, but we're not seeing your face.
So if there are viewers that are wondering why they can't see you, I'm just making that point clear. You did, let 10 percent of your staff go and as
you said, you sort of did this early on, because you saw the warning signs, I think early on. You've also as you said, been in this now for almost two
decades.
Did you learn anything as a leader about this process because it's never easy? I think anyone who's either had to let people go or has been let go
themselves knows that it can be quite a devastating time whether you're the leader or the person, let go. Did you learn anything?
[09:25:00]
SIEMIATKOWSKI: Yes, I think, you know, unfortunately, it is very difficult and obviously, I do think, you know, if you're a same person, you will
always, you know, reflect a lot on what you could have done differently and try to improve the next time you do it. Unfortunately, as it is with these
things, there is no good ways to do that. There's only bad ways and really bad ways, so to speak.
So you're trying to do the very best, I think, in this case, also, you know, we tried to do the best that we could. We were also; I think, you
know, there was a lot of attention from media to what we were doing, obviously, because we were quite early. I do think that, you know, there's
obviously learning from it, but you know, I think it's also it was necessary.
Unfortunately, the investor sentiments had changed, and there was simply not support for the level of investments that we were having at that point
of time, leaning that much into the future. So unfortunately, you know, that's part of one's job that you have to take the actions that are
necessary.
CHATTERLEY: It's inevitability about economic slowdown, unfortunately, to your point, we've seen this many times, and it's a cyclical thing. Talk to
me about the change that you and the changes that you made in underwriting because I think there is a perception and it's funny. Even on my team this
morning, we were talking about this that you see a rising credit, you see a rise in credit, delinquencies and an economic slowdown, irrespective of the
kind of underwriting tightening that you make.
And when I look at what you're doing, you can tell me whether this is a product as a percentage of an increase in sales volume that actually you're
maintaining or managing to maintain your credit losses at what less than 1 percent of your sales volume. Where do you see that going? And how much
tighter are you making these adjustments?
SIEMIATKOWSKI: So this is one thing that it's really poorly understood in media.
CHATTERLEY: Yes.
SIEMIATKOWSKI: I think, to some degree in the mobile app is it because like, there is a fundamental difference to buy now pays later from a credit
card, right? So credit card underwrites you when you sign up for the credit card. And also, unfortunately, the incentives of the credit cards are to
make you revolve to pay as little as possible every month and to build up a balance because that's how they make money.
So in general, the overall average balances on the credit card, maybe 3, $4,000. We don't our product doesn't work that way. It's a for pain for
pain, three, so our balances are only outstanding for up to about two months.
So that means that we turn around their balance sheet 12 times a year, and the average outstanding balance is only $70. So what happens when an
economical-recession comes like this one, it gives us a very different level of agility? If we change your underwriting models, within two months,
50 percent half my balance sheet is underwritten according to the new standards, which may be tighter and tougher in that perspective, right?
And that's different the credit card or a big bank, the durations are so long, when an economical-recession hits. They cannot just simply change the
composition of their balance sheet, because it takes a lot of time for that to translate into the balance sheet, right so there is actually a very
favorable aspect of the product that we half that losses that level of agility?
And that is why we can react in a better way and with their storm, like an economical-recession and so forth better than your traditional credit card
industry and you also see that in lower losses light. So in general, our losses are about 20, 30 percent below credit card industry standards even
independent of what kind of economical-environment, Julia.
CHATTERLEY: Yes, but I think your point about being so dynamic, and actually making an adjustment and it feeding through incredibly quickly is
a very important one compared with credit cards. Do you think the mentality is different, by the way too from a consumer? They don't treat, buy now pay
later, in the same way that they would a credit card just in terms of as you pointed out the volume of spending, but also, hey, I have to pay this
back in two weeks or over the next, you know, two weeks every four weeks? Do you think the mentality is different?
SIEMIATKOWSKI: I think you know one of the best things I recommend for everyone who's interested in these topics is to watch Netflix credit cards
explain. And you will see how I mean, a lot of people of the older generation will remember the back in the days when you would have a card
from your bank, and you would swipe it in the store. That would be press 1 for debit press 2 for credit.
So a healthier way of spending is to almost take that debit credit decision on transactional basis. Credit cards didn't like that, because you weren't
building balances enough. Your monthly statement was too low when you were doing that, which reduced the likelihood of you revolving, which reduced
the likelihood of them earning the high interest that they earn on revolving, right? Revolving is a very confusing concept for a consumer
because you're like borrowing against all your spending and you don't really understand when you're going to pay it all back, installments are
clear.
They have a fixed term period, and so forth. So we're seeing consumers choosing our product because it's about self-discipline, they understand
their spending better. They are in more control and we say you know 10 years from now if less people have credit cards, more people have debit
cards, but occasionally use buy now pay later as an option for specific purchases.
That is going to be a healthier environment and healthier form of credit. So we really genuinely believe that this is still credit right? The point
is like we're fighting fire with fire, right?
[09:30:00]
CHATTERLEY: Yes.
SIEMIATLOWSKI: And if you don't like credit. If you don't like credit at all, and you think nobody should borrow for anything, then yes, I'm not
going to win the argument with you, right? But if you compare forms of credit, we think this forum is better and we have the data to prove it.
CHATTERLEY: Yes. And as we've discussed the challenge over profitability, perhaps as well, a temporary challenge.
SIEMIATLOWSKI: Right.
CHATTERLEY: We'll reconvene on this. Always great to have you on the show thank you for the education! You've kind of given it to me before, I
apologize.
SIEMIATLOWSKI: Not at all.
CHATTERLEY: But I do think it's important to discuss. It's great to have you.
SIEMIATLOWSKI: It is nice to get a chance to talks about these things.
CHATTERLEY: It's important. Thank you. CEO of Klarna there Sebastian we'll reconvene thank you. OK, coming up after the break heading back into the
black Airlines is set to fly into post pandemic profits. The question is though, when that's next?
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move"! After this seismic pandemic shock and of course billions of dollars' worth of losses it's now predicted the
world's airlines will return to profitability next year. IATA the International Air Transport Association sees the industry making a net
profit just short of $5 billion in 2023. It will be the first industry wide profits since 2019.
And Paul R LA Monica joins us on this story now. Let's be clear, still billions of dollars' worth of losses this year. But this is far quicker
recovery actually than I think anyone thought at the beginning of the pandemic and welcome.
PAUL R LA MONICA, CNN REPORTER: Yes, thank you very much. Yes, I think it is a faster recovery than many were anticipating. But of course keep in
mind these are still Julia just projections and also $4.7 billion profit for the global airline industry is a lot smaller than those pre pandemic
2019 levels.
And also the margins are racing razor thin. I mean it's hardly something to celebrate when the IATA is also predicting that revenue will be nearly 780
billion next year.
[09:35:00]
MONICA: Which would be up from this year as well, but a $4.7 billion profit on revenues that large does the math, we're talking about margins less than
1 percent. Not exactly a profitable business.
CHATTERLEY: Wow! I mean a margin of error there huge. And I was just looking at their predicted losses for this year, somewhere between $6.9
billion and $9.7 billion. So wow, they've got a lot to catch up from as well over the past few years.
What about the risks to the outlook? We're talking economic slowdown? Surely a lot of this depends on what we're sort of seeing at least the
initial stages of reopening in China critical - to the story. Yes.
MONICA: Exactly. Yes. I mean, you have to hope that China is a market where travelers will be free to go places, despite some of those COVID lock
downs. Will people be willing to go to China in light of the outbreak there? That is a big concern.
But I think Julia, the other issues, you obviously have oil prices, which have been in flock sale, that is something inflation could impact this
outlook. And again, we are talking about the balance between pent up demand, there are a lot of us that want to travel again, we're tired of not
going anywhere for a couple of years.
But by the same token, everyone is talking about a recession and how bad is it going to be if you do wind up having an economic downturn, especially in
the United States? Are consumers really going to be going to Disney World and Disneyland? I'm not so sure.
CHATTERLEY: Yes, lots of pent up demand, but the budgets allow for the travel that people would like to do. We shall see. Paul, thank you so much
for that. Paula R LA Monica there!
OK, after the break speaking of travel, we're off into space. The latest on the Artemis moon mission and why the UAE is also reaching for the stars. We
hear from the head of its very own space agency next.
(COMEMRCIAL BREAK)
CHATTERLEY: Welcome back to "First Move"! NASA's unmanned Artemis moon mission is one step closer to coming home. The Orion Spacecraft
successfully fired its main engine setting it on a course back to Earth. And if all goes well, Orion will splashdown in the Pacific on Sunday.
[09:40:00]
CHATTERLEY: The Artemis II is slated to repeat the mission in 2024 this time of course with humans not a plush Snoopy toy on board. And in the
meantime, the United Arab Emirates also has its sights on the moon with an upcoming mission to land a vehicle on the lunar surface carried onboard a
SpaceX rocket.
The UAE which is home to five space research and development centers is also making new discoveries about Mars. Its Hope Spacecraft in orbit above
the Martian surface is sending back data about the red planet's atmosphere.
And two this week, Abu Dhabi hosts an international space debate attended by the likes of NASA, India and China exploring the challenges that lie
ahead, put it all together, and you can see the Emirates commitment to space.
And Her Excellency Sarah Al Amiri is the UAE Minister of State for Public Education and Advanced Technology, and the Chair of the UAE Space Agency.
Your Excellency, welcome to the show. That is a pretty cool job title. Just start by explaining your vision for the space industry in the UAE and what
the role of this debate that you've held over the last few days is?
SARAH AL AMIRI, UAE MINISTER OF STATE FOR PUBLIC EDUCATION AND ADVANCED TECHNOLOGY: Thank you, and a very good morning to everyone. The last few
days have seen us discussing and having dialogue with regards to space, how we continue to expand our efforts in development and that's a global
effort?
How we need to maintain space free of debris? How we need to continue to collaborate as space faring nations? And how that all ties together is
bringing in people from various backgrounds. Space agencies usually speak to each other, we sometimes include commercial space, but rarely do we
bring in space commands.
Rarely do we bring in regulators and policymakers and also diplomats. Space is ever becoming an area that needs to be discussed. And dialogue needs to
be pushed forward on the global sphere so that we can actually harness space for humanity, rather than making it the next front for disruption.
CHATTERLEY: It's such an important point. I actually wasn't going to go there but that you've made the point. I think it's critically important. I
think competition in this space and all forms of technology is a good thing. I think there is a danger perhaps that the space race gets taken too
far.
Do you see the UAE in that regard is some kind of bridge between what were the traditional space powers, the United States, and Russia, of course, and
those now that we're all getting on board, and I include China in this because there clearly is a danger perhaps for conflict in the future beyond
that competition?
AMIRI: If we don't have a form of dialogue, that supports the growth of the space sector, and if we continue taking the trajectory that we've taken in
political dialogue, and politicizing all other facets of potential cooperation, we will reach to the point that you've just mentioned.
What we're pushing for is ensuring that emerging space nations such as the United Arab Emirates, and existing space nations who have been doing this
for decades upon decades, and have pioneered same thing with companies, so the companies that have again, been doing this for decades upon decades,
and then the new entrants into the space field.
We need to start working together. We need to draft a more modern mechanism of working together and ensuring that waste does not dominate the space
sector. And waste does not stop us from being able to access space.
CHATTERLEY: You know it's fascinating, I mentioned your moon mission and the Emirates Lunar Mission aboard a SpaceX Falcon 9 Rocket it was, I
believe, scheduled for November, and perhaps you can give us some greater sense of the date.
But I think key to your point about collapsing the cost and reducing waste has been the importance of the private sector to get nations like the
United States, but others once again up to speed and out there whether it's low Earth orbit or beyond.
How important is the private sector in the UAE? And what are you in the government doing there perhaps to I don't know one day create your own kind
of SpaceX and push the frontiers of space forwards?
AMIRI: So the private sector now globally is expanding the realm where emerging space nations are able to access for example, the surface of the
moon. What we're looking at is developing and transferring on a lot of the knowhow and experience that has been built from our mission to Mars and has
been built from Earth observation missions into the private sector.
We actually encouraging our engineers and our scientists and our researchers and also the financial units as well to start investing in
space to transfer on their capabilities there, and we're supporting them with contracts.
We have a space fund that has been announced this year. We have two major projects that we are guaranteeing off take agreements to those young
companies that are establishing the sector. Of course we will never do this in Silo the UAE will continue to play as a global player as will our
private sector.
[09:45:00]
AMIRI: And we continue to ensure that we are responsible in our access to space. And we are responsible in our global dialogue to ensure that there's
transparency and cooperation to ensure that we're creating the necessary impact and outcomes in terms of development.
And to ensure that global dialogue and global legislations moving forward, I think something that's interesting to point out that we saw across the
debates, and we all agreed on, and this is, if there were emerging nations here, we had more than 50 countries representative, over 40 space agencies
with space commands.
CHATTERLEY: Wow!
AMIRI: We all agreed that legislation that has been drafted in the 60s is no longer relevant, that we all have a defense mechanism that we need to
start having a dialogue in that space has no space intended in global politics, and that we need to ensure that we're collaborating differently.
And that we're pushing and striving forward and taking on a stance of what we are traditionally known in terms of having dialogue. And I I've given an
analogy to where we've reached in climate dialogue will not get us to where we want to be in space, we need to create new mechanisms.
New regulatory mechanisms, new sense of internal accountability from the private sectors perspective, and a new global governance mechanism that may
be for once perhaps, we all agree on certain aspects of rules of the road of exploring space.
CHATTERLEY: I love your ambition. It does feel like that at this stage, given the reference that you made to climate in particular, we clearly have
to move quicker above anything else I think where space is concerned.
The challenge I think for a lot of people watching this will be never mind getting to the moon never mind getting to Mars, we have huge problems on
this planet. Climate is a great example that that need fixing.
And I think helping our citizens understand the benefits, the economic benefits, perhaps beyond anything else of space exploration, the data that
you're now pulling, for example, from the Mars mission. Have you quantified the economic benefits of this so that the people can understand? And do you
think that's also something that that nations have to consider for those that perhaps are saying, why when we have so many other problems to solve?
AMIRI: Let's target needs first before we try to get the economic impacts of the return investment. From a needs perspective if I take the climate,
climate change and the weather systems and the dynamics that we're now seeing.
One of the only ways that we can study that over time is using satellites. And those satellites typically operate in low Earth orbit around Earth.
That is the most congested part of Earth. If we talk about communications and expanding our communications capabilities, we see companies now
utilizing low Earth orbit. Starlink is an example of that.
So that's how we just connect with each other. These are all fundamental needs, they do create economic benefit, but they are making our lives
better, and they're impacting our lives positively.
If we do not address the issues that we currently have in low Earth orbit, and just to contextualize that we actually within a decade will have a real
problem in low earth orbit.
It might lead to a point where spacecraft's might collide with each other cause more debris, render that area of space, not accessible, which means
the spacecraft's the satellites, that we rely on, for our data for our information for our connectivity, will no longer be able to safely operate.
And that's going to be a world that we don't want to live in.
And that's why I always like this to the climate agenda. Right now it's too late to solve the climate change issue. If we don't solve the space issue
within the next three years, and have the mechanism to be able to deal with debris, the mechanism to agree that we will not cause any conflict or even
scattered and sustainably access space only then will we be able to realize the full potential of that. And the time to act is now we cannot wait a
year from now. We cannot wait for a decade when the problem is staring us in the face.
CHATTERLEY: Yes.
AMIRI: And that's why one of the calls of actions that we all had during the Abu Dhabi Space Debate is the time to act is now and we've all taken it
forward to be able to have it on our national agendas and on our international agenda.
[09:50:00]
CHATTERLEY: Absolutely. We're playing catch up on climate and this is something that we can tackle over the next few years and not have the
problem that you're talking about in the next 10. Vitally important, you know, I read a great profile on time that you loved space and being a 12
year old.
And I wanted to ask you what it feels like to be in this position today because our viewers will see that you're clearly young and in a position of
great power. But we shall reconvene. Please Your Excellency and we'll have that conversation because you're certainly flying a flag I think for women
in science too, a pleasure to chat to you. Thank you, her Excellency there Sarah Al Amiri there.
AMIRI: Thank you.
CHATTERLEY: Chair of the UAE space agency will speak soon please. OK, coming up. The final matches for the round of 16 at the World Cup will take
you to Qatar for today's action. That's next.
(COMMERECIAL BREAK)
CHATTERLEY: Welcome back! U.S. stocks are up and running after the worst date for tech in weeks but we're moving from the Wall Street bears to
football fans prayers too. Big laughs 60 matches in the World Cup today the faceoff between Morocco and Spain and later today its Portugal versus
Switzerland expect to see some players with tired limbs.
But what about stock market wins? Time now for ongoing feature "The Chatterley Cup" a look at which football giant's financial markets have
come out on top this year. And today's Chatterley Contenders we can start with Morocco and Spain Spanish stocks edging it out.
As you can see they're down 4 percent so far this year to Morocco is down 16 percent and also Portugal versus Switzerland Portugal's PSI 20 up over 5
percent this year the SMI however a serious Swiss Miss, that's down 13 percent.
And in the "Chatterley Cup Challenge" yesterday market underperformance, Croatia topped Japan, while Brazil and its buoyant beat out stock Laggard,
South Korea. Amanda Davies joins us from Doha. The Chatterley Cup continues Amanda; the question is who's going to win today?
AMANDA DAVIES, CNN WORLD SPORTS: Well, Julia it's been fascinating rounds of matches. Yes, I mean, it's been fascinating after all those shocks that
we had in the group stage matches that we were talking about the thrills and spills actually, when it comes to this rounds of 16. It's the
traditional foot balling heavyweights who've made it through so far.
But Morocco and Switzerland, hoping to change that one today, Morocco just in about five minute's time about to kick off their match against Spain you
can see the players lining up for the national anthems. It's a match that the Moroccan Coach Walid Regragui has described as the biggest in his
country's foot balling history looking to book a place in the quarter final of a World Cup for the first time.
And they're not just waving the flag for the African countries here at this tournament, the last African teams still standing but also for the Arab
nations and we know that this has been such a tournament hoping to raise the profile and the enthusiasm the support for football in this region.
[09:55:00]
DAVIES: They had such a troubled build up to this tournament, having changed their coach with just a couple of months to go but then really made
such an impact against Belgium and Croatia finishing above them in their group.
So Spain can take nothing at all for granted in this one. Their Coach Luis Enrique has made five changes from the side that was beaten by Japan in
their last match. That performance he described from his side as a 'B' plus. And he is all too aware of what happened when these two sides met at
the World Cup in Russia four years ago. They've got a late, late equalizer to earn a point so he's made sure his teams have been practicing their
penalties ahead of this one.
CHATTERLEY: Wow! What an exciting day? I saw your interview earlier, the biggest game in Morocco sporting history. That's how it was described. We
love it. We shall see Amanda, see you tomorrow. Have a fun rest of day. Amanda Davis there thanks you.
And that's it for the show. If you missed any of our interviews today, there will be on my Twitter and Instagram pages. You can search for
@jchatterleycnn "Connect the World" is up next stay with CNN.
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[10:00:00]
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