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Quest Means Business
Nigeria Opposition Claims Election Victory; Indiana to Fix Controversial Religion Law; Turkish Prosecutor Died After Being Held Hostage; Report Says Video Shows Seconds Before Germanwings Crash; Cockpit Rules; Iran Nuclear Talks Extended to Wednesday
Aired March 31, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:59:56] (NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: Well, the US Army is ringing the bell. The market was up sharply yesterday, down 1 percent today. Now, we should get
a good gavel from the army. Man with lots of brass, he should know what he's doing.
(GAVEL HITS)
QUEST: Oh, by jingo! That's how you close the market on Tuesday, it's the 31st of March.
Tonight, change has come to Nigeria. Goodluck Jonathan has lost the presidential election.
Change is coming to Indiana. The governor has changed course on his religious freedom law.
And big changes on the market. The first quarter screeches to a close, as you can see, with a loss of 1 percent.
I'm Richard Quest. No change here -- I mean business.
Good evening. We begin tonight in Africa, where the largest economy has a new leader, and people in Nigeria tonight are dancing in the street.
The opposition says President Goodluck Jonathan has called his challenger, Muhammadu Buhari, and conceded defeat.
The result has not been officially confirmed, but early tallies show Buhari with an unbeatable majority of votes. And as you can hear, there's
cheering in the streets.
(BEGIN VIDEO CLIP)
(CROWD SINGING, CHEERING, DRUM BEATS)
(END VIDEO CLIP)
QUEST: This is the first time that Nigerians have unseated a sitting president. Buhari's been in power before; twenty years ago, he was head of
a military government. He's promised to tackle corruption and the Boko Haram insurgency in the north. He also faces slowing economic growth and
widespread frustration among voters.
(BEGIN VIDEO CLIP)
KHADIJA USMAN, BUSINESSWOMAN: Our kids don't have jobs. We want change in the country. We want a turn-around.
(CROWD CHEERS)
(END VIDEO CLIP)
QUEST: Now, it's a new government with the old challenges. At the top of Buhari's agenda, it is of course that of tackling corruption. Just
about everyone in Nigeria admits that corruption's a huge problem. The country sits not far from the bottom of corruption perceptions index from
Transparency International. Earlier this year, Mr. Buhari told CNN unless Nigeria kills corruption, corruption will kill Nigeria.
There's also the horrific violence of Boko Haram. President Jonathan was criticized for not doing enough about it. The Islamist militants have
killed something like 13,000 people in the north of the country.
And of course, the key challenge, the falling oil revenues that's made it tougher for the government, with a slump in government finances.
Nigeria is Africa's biggest oil producers and the consensus is oil needs to be above $120 a barrel to balance the budget, never mind to actually create
growth. The current price is well below half than that.
Last night on the program, Kingsley Moghalu was with us. He is the deputy -- or was the deputy governor -- the former deputy governor of the
Central Bank of Nigeria. You're back with us, sir. Now we have a result, or it looks like we have a result. Are you surprised?
KINGSLEY MOGHALU, FORMER DEPUTY GOVERNOR, CENTRAL BANK OF NIGERIA: Well, the Nigerian people have spoken, and so it is a reflection of their
will. One of the two candidates was bound to win, and so in that sense, I am not surprised at all. I think it's a historic day for Nigeria, and I
think Nigeria as a country as won.
QUEST: Right. But what does this -- what is this vote telling us? What is this vote saying about whatever -- I mean, look, sir, you know your
country backwards, upside down, and inside out. What does this vote tell us about the unhappiness of Nigerian people?
MOGHALU: I think clearly what it says, this vote, is that Nigerians were having a sense of frustration and wanted a change. I think clearly
they wanted a new driver at the wheel of their car, of the car of the country.
Now, and I should say very clearly that if as we hear the reports that President Jonathan called Buhari and conceded defeat, I think he also
deserves to be congratulated, because a successful election outcome calls for maturity on both sides. But I think clearly Nigerians have spoken and
made it very clear that they want a change in direction.
QUEST: As long as I can remember, we've talked about Nigeria dealing with the issues of things like corruption, dealing with good governance,
dealing with the economy. You know this economy inside-out. What needs to change?
[16:05:00] MOGHALU: Well, I think the most important thing that needs to change is first of all a hunkering down and the development of a
long-term -- with short-term milestones or medium-term milestones, but a longer-term master strategy for the Nigerian economy.
And it needs to be embedded within some sort of philosophical context. And that requires social organization so that the consent of all Nigerians
can be manufactured into a vision of the future. And so everyone can work towards an objective that they all agree to.
I think this is very important. Nigeria's economic transformation will not just depend on economic equations. A lot of political economy
issues, a lot of political and social reorganization will have to take place as well.
QUEST: Right. But when I first reported from Nigeria -- we went there some years ago "Business Traveler," people talked about the issue of
corruption. How do you -- you're now sitting in Washington -- how do you root out corruption in an economy where it is endemic?
MOGHALU: Corruption is a problem that reflects a mental state, and it's not impossible to address. There are two ways that you can quickly
tackle corruption, or even three ways.
First of all, you need to recognize that corruption is a symptom of the deeper problem in Nigeria and many other countries in Africa. It's a
symptom or a manifestation of a lack of a world view of economic transformation and development --
QUEST: Right.
MOGHALU: -- and what it's going to take to achieve that world view. And one of those things is a value system. And so, a value system needs to
be established through mobilization of the Nigerian people. That's number one.
Number two is that there has to be leadership by example. And number three is that there has to be accountability for acts of corruption.
Now, corruption is not peculiar to Nigeria, contrary to what a lot of people like to think. I mean, corruption is everywhere in the world. But
we don't want corruption at the center --
QUEST: Right.
MOGHALU: -- as a lot of people seem to perceive. It should be at the periphery and very much marginalized.
QUEST: Now the election's taken place, sir, do you have aspirations to be part of any new government in Lagos, in Nigeria? Do you have
aspirations?
MOGHALU: Well, Richard, I thought you would have given up this mischief, which you --
QUEST: Never! Never!
(LAUGHTER)
MOGHALU: You asked this type of question yesterday, and I told you I cannot respond to it. As you know, I've just finished five years as deputy
governor of the Central Bank of Nigeria, and it was a very tasking experience, but it was a very rewarding one, I must say.
And now, I've moved on, I'm a professor at a US university and doing a number of other things with which I'm very comfortable.
QUEST: I'll take that. Thank you very much, sir. You can't blame a man for trying.
MOGHALU: Well, thank you.
QUEST: Thank you. We call him professor now.
The governor of Indiana has promised to fix a controversial religious freedom law. We're going to hear from the mayor of Seattle who says his
employees won't be going to Indiana on the city's dime until the law has been changed. QUEST MEANS BUSINESS.
(RINGS BELL)
(COMMERCIAL BREAK)
[16:09:58] QUEST: The governor of the US state of Indiana says he will fix a controversial religious freedom law that critics say authorizes
discrimination against gay people. Mike Pence has been faced with a tide of condemnation from the political and the business communities.
And although at first he said he wouldn't change the law, now he says there will be legislation this week to clarify it. He still insists the
problem isn't the law but how it's being perceived.
(BEGIN VIDEO CLIP)
GOV. MIKE PENCE (R), INDIANA: After much reflection, and in consultation with leadership in the General Assembly, I've come to the
conclusion that it would be helpful to move legislation this week that makes it clear that this law does not give businesses a right to deny
services to anyone.
(END VIDEO CLIP)
QUEST: The religious freedom laws are designed to make it illegal for the government to force people to do things against their religious
beliefs. So, for example, supporters of the Indiana law say it protects religious liberty. For example, a photographer can refuse to film a gay
wedding, or the florist example that was big in Indiana, if they feel the wedding is against the teachings of their religion.
Now, the opponents, they say that this amounts to legalized discrimination because it allows the business to deny services to someone
because of their sexual orientation. Governor Pence said he didn't expect people to interpret his law this way.
(BEGIN VIDEO CLIP)
PENCE: Was I expecting this kind of backlash? Heavens, no.
(END VIDEO CLIP)
QUEST: Heavens no, indeed. But if you want to look at just how that backlash -- join me at the super screen. The list of companies that
rallied against the legislation is growing. You have, of course, the NFL. You have the NCAA, you have the Lilly, you have Levi's, Starbucks.
One of the key ones, of course, was Apple. When Tim Cook came out and made his statement, that really galvanized the whole issue. You've then
got Gap, Accenture, and on it goes. Yelp also very much led the charge against.
Now, this issue has truly divided Americans. You'll be familiar with the map, obviously, of the United States. But let's look at position
Indiana, right in the very heart of the Midwest. That, of course, with the exception maybe of the South, the most conservative and some would say the
most right-wing parts of the country.
But 19 other states have similarly-constructed laws on religious freedom. Obviously Texas, Florida, and down through into the Carolinas and
out through to the west, Nevada and Arizona out into the west.
Now, as a result of this, even in as you can see over here, now the states of Washington and New York, with Seattle and Portland, San Francisco
on the west coast, Chicago in Illinois which, as you can see, has a similar law on its book in Illinois, and New York on the east, they are also
banning public employees from traveling on business to Indiana.
The governors of Virginia and Connecticut and the mayor of Chicago are using the opportunity to court investment from business who want to leave,
and jockeying for the next presidential election is underway. Republican hopefuls like the former governor Jeb Bush down in Florida rushed to
declare their support for the Indiana law.
(BEGIN VIDEO CLIP)
JEB BUSH (R), FORMER GOVERNOR OF FLORIDA: I think Governor Pence has done the right thing. Florida has a law like this, Bill Clinton signed a
law like this at the federal level. This is simply allowing people of faith space to be able to express their beliefs, to have -- to be able to
be people of conscience. I just -- I think once the facts are established, people aren't going to see this as discriminatory at all.
(END VIDEO CLIP)
QUEST: Well, whether they do or not, the mayor of Seattle in the Pacific Northwest says he opposes the Indiana law, and I spoke to him
earlier and asked him, with all the pressure facing the governor, what he thinks finally forced him to change his mind.
(BEGIN VIDEOTAPE)
ED MURRAY, MAYOR OF SEATTLE: So, you know what turns a politician's mind is their constituents. I think it's the good people of the state of
Indiana who do not want to be associated with a discriminatory law.
QUEST: Were you surprised at he speed with which this got out of the gate? It is very unusual. I've lived in this country for some years, and
there are very few occasions that I can think of where cities and states have said we are banning travel to another part of the union.
MURRAY: Well, I think because this law was so beyond the pale. This law was not like, some people have said, 19 other laws. This law was a
radically different law. It actually gave for-profit businesses the right to discriminate, an issue that many of us thought was settled in the 1960s.
I think that's why you saw the reaction that you saw across the nation.
[16:15:02] QUEST: But if you take the Hobby law, or the Hobby case in the Supreme Court, isn't that decision to give -- since corporations do
have a religious freedom by the decision of the Supreme Court, isn't it a natural extension of that that they can exercise that freedom as they -- in
such an environment?
MURRAY: Only if you're willing to turn back 50 years of civil rights legislation and basically say you can start picking and choosing who you
can discriminate against. Because believe me, if it's today and gay and lesbians, bisexual and transgender people, tomorrow it will be people based
on their own religious beliefs that are different than the religious beliefs of the business owner.
It'll be women, it'll be people with disabilities because a restaurant can't adjust for it. This isn't a path we want to go down.
QUEST: In all of this, did you -- you're obviously a member of the LGBT community yourself, with your husband. Did you take up the cudgel on
this because of that, or would you have in other circumstances?
If it hadn't been perceived -- because I can see you're going to say, obviously as the mayor, you want a wide and broad church, but you can see
how some people will define it in a fairly narrow sense.
MURRAY: Yes, and I'm glad you asked the question. If they had passed a law targeted towards any group of Americans, I would have done exactly
the same thing.
And I think my record here in Seattle gives an example of that. We're the first city to raise the minimum wage to $15 an hour. We are a city
that is stepping up on a whole series of issues around equity. So, I think it reflects who I am.
It also reflects this city that elected me. So, it's not about the fact that I happen to be a gay man. It's actually about fairness
regardless of who is being discriminated against.
QUEST: One of the things that I found fascinating was this -- not just Tim Cook, who clearly led the charge, but the speed with which
corporations came out and said, oi, we ain't having anything of that. That must have played a part in this.
MURRAY: Absolutely, I think it did. And what businesses realize is they need the best and brightest people as their employees, and they're not
going to get the best and brightest employees if they're working in an environment that discriminates.
We've seen our great businesses from Amazon to Microsoft to Starbucks step up for equality because they want the best and brightest employees.
It's good for business.
(END VIDEOTAPE)
QUEST: I need to update you with some sad news at the moment. The Turkish prosecutor who had been held hostage by a far-left group in
Istanbul has died from his wounds, according to medical sources and from Turkish officials.
According to an official who tells our sister station, CNN Turk, the prosecutor was dead when he arrived at the hospital, and they tried their
best, but -- The Turkish foreign minister and the prime minister confirmed this.
You'll be aware, of course, that the two captors were killed after police stormed the room where they'd been holding the prosecutor after a
six-hour standoff. We'll have more details as the details -- as they become available.
There have been new developments in the investigation into the Germanwings plane crash. The chief executive of one European airline
speaks to me about the change in the way things work in the cockpit. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:20:03] QUEST: Now we have new information in the crash of Germanwings Flight 9525. I'm going to take this rather slowly because it's
a situation that's changing even as we're talking now.
The reports in a German newspaper and a French magazine say a cell phone found at the crash site contains video taken inside the plane in
extremis before it crashed. It's "Bild" and "Paris Match" that say they got the information from a source close to the investigation. The video
itself has not been published.
That's been the story of the last few hours, but in the last couple of moments, a spokesman from the Paris Gendarmerie has told CNN that those
reports are completely wrong. Let's see what they're saying, bear with me.
He says they're completely wrong, unwarranted. The spokesman for the Gendarmerie explained that cell phones have been collected on the site, but
they hadn't been exploited yet. But that, I suppose he means downloaded.
He said -- asked whether the rescue staff could potentially have leaked a memory card to the media, the spokesman said categorically no.
So, that one we'll watch in the hours ahead as that becomes be clear one way or the other.
We're also learning more on what Lufthansa, German airlines, new about the co-pilot's mental health. The airline says its investigation has now
revealed that it was aware that Lubitz had suffered from a bout of depression during his training and left training as a result. He then
subsequently rejoined training and continued to become a pilot.
He was certified fit to fly last summer. Lufthansa doesn't test for psychological problems. The airline doesn't see psychological forms filled
out by pilots and passed to the aviation authorities.
The Norwegian Air Shuttle, the budget airline, was one of the first to insist on having two people in the cockpit at all times after the 9525
incident. I spoke to Bjorn Kjos, the founder and chief executive of Norwegian, and I asked him -- because the core question remains -- would a
rule of two people in the cockpit have made a difference? Could it have prevented Flight 9525 happening?
(BEGIN VIDEOTAPE)
BJORN KJOS, FOUNDER AND CEO, NORWEGIAN AIR SHUTTLE (via telephone): That is a very good argument, because if you had a second crew member in
the cockpit, you have to disable that person so -- because that person can -- it's easy to unlock the cockpit door.
QUEST: Do you think pilots should have regular psychological testing as part of their annual or biannual medicals?
KJOS: Yes, I think you are touching a very good point there, because all the airlines have top priority on safety. And if we can prevent only
one accident by having such tests, we should have it. We actually have implemented a normal basis since 2011. We might look into have it even
more professional.
QUEST: Right. So you do a regular examination, or you do a regular check on the psychological aspect as well as the physical at the moment, is
that correct?
KJOS: Yes, when they start to get with a simulation, when they fly in the simulator.
QUEST: So, will you be introducing regular psychological examinations, not just when you get -- employ them, will you be introducing
them ongoing for your crew?
KJOS: I think that we have to work out a procedure to do that. I think that all safety agencies should definitely look into this, because
there has been one more accident to the memory, and as long as we can try to prevent, it's good. And if it is a possibility that we can prevent it,
we should definitely do it.
QUEST: One of the criticisms -- and this is something that I know you'll want to address -- is that first of all, the number of hours
required to fly in the right-hand seat is lower in the EU than, say, the United States.
And the question of low-cost carriers, whether or not there is an element here of low-cost carriers putting more inexperienced crew into the
cockpit at a time when they're already under greater pressure?
KJOS: Actually, we have much tougher requirement than most of the legacy carriers that I know about. If we should allow pilots with very low
time experience, they have to go through very different sets of rules in order to be able to fly for us, so they can adjust the put in to the right
people.
(END VIDEOTAPE)
QUEST: Bjorn Kjos of Norwegian talking to us.
A major update in negotiations over Iran's nuclear update. We're going to be talking to a former US ambassador to the UN to find out why
he's skeptical about a deal. QUEST MEANS BUSINESS.
[16:25:00] COMMERCIAL BREAK
[16:27:16] QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. We're going to be hearing from Mohamed El-Erian
on how volatile volatility is now ruling the stock market.
And the new host of "The Daily Show" has big shoes to fill and some skeletons in his closet that are already rattling.
Before that, this is CNN, and on this network, the news will always come first.
Nigeria's opposition party is claiming victory in the country's presidential election. These are pictures just coming into CNN from the
APC Party. They show Muhammadu Buhari apparently receiving the phone call from the incumbent, Goodluck Jonathan, to concede defeat. We're still
waiting for official confirmation from the country's electoral commission.
A Turkish prosecutor held hostage in an Istanbul court has died. An official told our sister station, CNN Turk, the man was dead on arrival at
the hospital. His captors were killed after a six-hour standoff with police.
A video shot from inside the cabin of the Germanwings plane that crashed in the Alps has reportedly been found with the wreckage. A German
newspaper and French magazine published a description of what it says was video on a cell phone showing the scenes in the cabin. To be clear,
though, the police -- the French police, the Gendarmerie, are now denying that any such video has been found.
Talks over Iran's nuclear program are likely to go past tonight's deadline and into Wednesday. The US State Department says enough progress
has been made to justify the extra time.
The latest on the talks that we just talked about there in the headlines, that the talks will go beyond. Hala Gorani is in Lausanne
covering. Good evening, Hala. The way I see it said is the US believed that enough progress has been made at the talks to merit staying past the
deadline. Since they don't lose face, what's your understanding of what that progress has been?
HALA GORANI, CNN INTERNATIONAL CORRESPONDENT: Well, it appears as though on some of the fundamental issues, which is good news, really, for
those who want a deal, progress has been made. The number of centrifuges, for instance, that Iran can keep.
But then there are some sticking points, some obstacles in the way. And they're not small obstacles. They're about, for instance, how much of
Iran's stockpiles -- existing stockpiles -- of uranium can the country keep?
[16:30:04] How quickly are sanctions lifted? Iran wants the sanctions lifted all at once, and they also want no sanctions to be
reimposed in case the deal is broken. Western powers, the P5, the five permanent members of the Security plus Germany, want sanctions to be scaled
back incrementally in order to be able to verify that Iran is abiding by a deal.
So, just these two that I just gave you, Richard, this gives you a sense that, yes, progress has been made, that all the parties -- apparently
they're all behind me in this luxurious hotel, there, day seven it will be tomorrow -- want something to come out of this. March 31st is this
preliminary framework agreement they were aiming for. A final deal wouldn't be until the end of June.
QUEST: Right.
GORANI: But so therefore, they are saying we've made enough progress, it's not -- we're not all going home. We're all still here. We're going
to give it a few more hours.
QUEST: but it's a self-imposed deadline, isn't it? In the sense if they can keep moving -
GORANI: Yes.
QUEST: -- that deadline. And really the question becomes at what point one side or t'other feels it's time to pack it up and leave?
GORANI: That's the question - that's question one. Question two is at what point do those forces opposed to this deal - including for instance
Republicans in the United States, some Democrats as well - say you guys can't even stick to the self-imposed deadlines that you've announced
previously, therefore we are going to press forward with plans for instance with legislation to impose sanctions on Iran if the deal is not absolutely
hammered out in a definitive way in June. So you have lots of forces working against this. So the more the
participants in these talks appear to not be capable of sticking even to their own deadlines, the more these forces may gain some strength.
QUEST: And this deal is multi-year - it goes well into the future, and one of the sticking points has been the ability of Iran to develop a
nuclear industry - a peaceful nuclear industry -
GORANI: Right.
QUEST: -- five/10/15 years down the road. How can anybody be looking that far into the future?
GORANI: And that's a good question because you'll have and you'll remember the Republican senators - the 47 who signed that letter - and who
addressed the Iranian leadership directly and the Iranian people directly saying you know, President Obama may support this Iranian nuclear deal
that's being discussed in Switzerland but he's not going to be in the White House forever so you might want to look a little bit forward because we,
those who were opposed to the current negotiations, fully intend on trying to dismantle it.
So that is a question looking forward. That being said, once an official deal is signed with these world powers and Iran, and once it is something
that has been in existence for about a year until President Obama leaves office, it would be extremely -
QUEST: Right.
GORANI: -- difficult to scale back on it. The big - the big challenge is get the deal done.
QUEST: Well by my reckoning it's half past 10 where you are in the evening and I hope you've got some warm long underwear on because I suspect
those talks are going to go long and late into the night. Hala Gorani joining us there.
Let's bring in Bill Richardson. He's a former U.S. ambassador to the United Nations. He's live for us in Santa Fe, New Mexico. Governor, you
are - you are a student, an academic of these very long talks that go late into the night. Do you think it's right that the U.S. and the P5+1 stick
it out on the grounds that progress has been made or is it time to ratchet up the pressure?
BILL RICHARDSON, FORMER U.S. AMBASSADOR TO THE U.N.: Well, it's both. You're ratcheting up the pressure, the world is watching you, there's a lot
of politics involved. I don't have a problem with extending another day or maybe another day beyond that. My concern is in the haste to get a deal,
are we going to be vulnerable in several areas? Us being the United States and the European countries.
One would be the sanctions - the timing and scope of sanctions. When are they taken off? How many? And then secondly, Richard, what I think is
very important is the access to technology that Iran would get that would produce a nuclear weapon. They claim it's going to be for science, for
medicine, for energy, but there's got to be verification. There's got to be the International Atomic Energy Agency and inspectors.
And then the last point is, what is Khamenei going to do - the supreme leader? You know, he's undercut the negotiations -
[16:35:02] QUEST: Right.
RICHARDSON: -- in the past. Is he going to support a final deal? And then you've got the U.S. Congress that I think is moving towards
additional sanctions -
QUEST: Right, but -
RICHARDSON: -- during this interim period until June if it goes 'til the end of June.
QUEST: But as this deal formulates tonight do you lend more towards the Obama position of let's get a deal and work with it or tonight do you
lean more toward the Netanyahu position - maybe not as extreme - that basically says whatever comes out of this process is going to be flawed.
RICHARDSON: Well, I have to see what the final detail is. I would probably lean towards giving my administration, my president, the Secretary
of State, an opportunity to present a deal to the American people. I'm not convinced for instance that we should have taken off the table issues like
Iran support state sponsor of terrorism -- their activities in Syria with Assad, with Hamas, Hezbollah. They have an American Marine, they have a
journalist there. I want to see them in the international community in the Middle East not be such difficult players and actors.
QUEST: Right.
RICHARDSON: So maybe there'll be an opportunity to send that in to the negotiations and maybe they are discussing these things right now. I
don't know, Richard.
QUEST: Longer term as you heard me talking to Hala Gorani - longer term. The problem with all these deals is once they're done, they are done
and you've got to make sure the verification and the monitoring and all the stuff that follows on. And that really remains perhaps in all of these
issues crucial in this particular case. Would you agree with me on that?
RICHARDSON: Yes, I would agree with you in two areas - one, the enriched uranium. Is it going to be taken outside for inspection to Russia
as everybody planned? It now seems that the Iranians are against that. So then is there a capability to dilute it in country?
And then the second issue is, again, what is the period in which Iran has to get a bomb -- the breakthrough period. And then the access to
technology, Richard. You want to keep the Iranians away from that very rich technologies research and development that can produce a bomb, and if
you can't find a way to monitor it and inspect it, you know, you're out in the cold.
QUEST: All right, but finally, Ambassador, is - do you think the U.S. and John Kerry in this sense - do you think that they would have the guts,
the will - I'd use a more slang phrase if it weren't on television - but do you think they have it to walk away? So much is vested in importance by
both the Secretary of State and the President - do you think they could save face and say we don't like this deal, we are walking away?
RICHARDSON: Well, yes. I think they're very honest about that. If it does not look like we can secure a deal, we're going to walk away. And,
you know, my successor as energy secretary - Ernie Moniz - is negotiating the nuclear components. I have enormous faith in him because he knows he's
a nuclear scientist - a nuclear weapons specialist - and I know he's going to get us the best possible -
QUEST: Right.
RICHARDSON: -- deal. And if he doesn't, I think the administration will walk away. And I don't think it's going to be that bad if we walk
away.
QUEST: Ambassador and Governor - I'm not sure which title comes first, but whichever one comes first, it's been very good to see you on the
program and helping us understand. Thank you, sir. I'm sure there's a protocol in there - I'm sure there's a protocol
somewhere. It must be governor before ambassador. Or maybe it's ambassador before. Anyway, upon such matters we shall ponder.
Whether or not your 401k, your investments, your market - just look at how we ended the first quarter. Wow, that slipped since we closed the
(inaudible) - since we closed the market at the beginning of the program. Two hundred points (RINGS BELL). The volatility of the month has been
extraordinary. We'll talk about it and see why, where and what happened, next.
(COMMERCIAL BREAK)
[16:41:34] QUEST: Well in days gone by, we would've been perhaps rather concerned when the market closed at the quarter - and it closed
incidentally today at the lowest point. In fact, it went to 200 points which is after the lower point of the day, down 1.1 percent.
Put it into perspective, there was the strong rally yesterday - very strong rally. It was up 1 and 1/2 percent. What does it mean? It means the Dow
is now back to the position where it was at the beginning of the - it's basically a quarter of a percent up.
Stocks have been played by what some have called volatile volatility. Absolutely. Join me over at the Super Screen. Now in quarter one, the Dow
has swung by more than 1,200 points. Just look at the way it's gone - it went down to 1706 (ph) through where we started in January, up to 18,289.
Look at that range! 17,068 to 18,289 to a point where a 17,776 now. And the factors that have played into this - well you've certainly got the
dollar and the dollar range again against the euro largely on the back of the QE, of cooling Fed messages - mixed messages. And look at how that's
moved. We've been up and we've been back down again. That's an enormous range for currencies.
And of course the second factor which is the price of oil which bottomed out at 47 in January and we've been up to 63 and now we're hovering around
47. The areas of course involving this concern shale oil production, various issues of consumer growth and questions of consumption.
All these are the numbers, this is the net result. Claire Sebastian now gives us the first quarter of 2015 in its own words.
(BEGIN VIDEOCLIP)
CLAIRE SEBASTIAN, CNN PRODUCER: Out of 61 trading days in the first quarter, more than half came with triple-digit changes. Given a market
governed by numbers, this was a quarter where words really mattered. Define this quarter in one word.
ART CASHIN, DIRECTOR OF FLOOR OPERATIONS, UBS: I would say uncertainty. A kind of a sleepwalk.
SEBASTIAN: If it was a sleepwalk, it was a restless one right from the start.
CASHIN: Any day, we don't know which way the market's going to go.
SEBASTIAN: In January the word on the trading floor was Greece.
Male: This unfolding, never-ending debacle.
CASHIN: We want to get Greece off the table - put that behind us.
SEBASTIAN: An extension for Greece in February brought some optimism. By early March, the selling had accelerated. The phrase was 'dollar euro
parity' which was edging perilously close.
CASHIN: The dollar has been a bit of a challenge here and it's going to affect the earnings of the multinationals.
SEBASTIAN: And as the quarter ended its final bumpy stretch, talk amongst traders was all about the Fed.
JANET YELLEN, U.S. FEDERAL RESERVE CHAIR: Just because we removed the word 'patient' from the statement doesn't mean we're going to be impatient.
SEBASTIAN: Perhaps the watershed moment of the course of the Fed ending its use of the word patient. One thing that hasn't changed -
traders here are still very impatient for clues as to when interest rates will start rising.
CASHIN: The market became almost obsessed with the Fed. Markets are never raised - ready for a raise in interest rates and we'd like to see
them low because that brings more money into the stock market.
[16:45:06] SEBASTIAN: With earning season just ahead, the volatility of this first quarter could continue. And when every word counts,
sometimes it takes the numbers people to choose the right one. Claire Sebastian, CNN New York.
(END VIDEOCLIP)
QUEST: Speaking of numbers, Mohamed El-Erian is the chief economic financial adviser to the financial group Allianz. A tug of war between
fundamentals and monetary policy. Mohamed, that's not new. We've seen this tug of war pretty much since 2008. So what's changed?
MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ: So what's changed is that people have become more uncertain - not only about the tug of war,
but about each side. So on the policy side, there's a lot of questions about will the Fed hike rates? What happens if the Fed is hiking rates
while the ECB is loosening policy? So there's a lot of concerns within the policy side which has tended to be very supportive.
On the fundamental side, what's happening to the economy - the simple equation that don't worry, the U.S. is going to pull the rest of the world
up is being questioned by soft data in the first quarter about the U.S. We have a lot of fluidity going on between these two things -
QUEST: Ah.
EL-ERIAN: -- that accentuating the tug of war.
CASHIN: Can - we've seen volatility - I mean, we go back two years, three years. We saw it start and it's been with us for the last couple of
years. How much of this volatility is fundamental? How much of it is - for want of a better phrase - high-frequency trading that's exacerbating
the trend that's already there.
EL-ERIAN: So what's different this time around, Richard, is that people have less confidence in the ability of central bank to repress
volatility. In the old days, yes, you would get volatility, but people were confident that the central banks would repress it and therefore they
were comfortable living with the periodic bouts of volatility. This time around when it happens, no one wants to take the other side of
the trade. There isn't the liquidity that you need to dampen this. So this is different and that's why this concept of volatile volatility has
come in. It's a second degree of volatility.
QUEST: Right. But I'm looking now at some graphs over here - the three-month graph that you'll be familiar with. Virtually back where we
started, it would take a one-year graph of the Dow. Yes, we are considerably higher over the one-year period. But it's all - I mean look
at that hot sharp fall in October of last year. It's almost impossible for any reasonable, ordinary, sensible, decent, honest investor long-term to
know what to do in this environment other than buy and put it in a - and wait.
EL-ERIAN: Yes and this is the problem when you've depended on artificial boosts to the markets. We all depend on a handoff from policy-
induced rallies in markets to genuine supported rally in markets. And people are waiting for this handoff - they're hoping for this handoff - but
they're worried. And therefore there isn't big conviction. All you need is something small.
And you know what? Everything you talked about early in the show - the geopolitics - that hasn't even factored in. Greece hasn't factored in for a
while. So we haven't even seen those factors play out.
QUEST: The one thing we can say is - I mean - monetary policy, the loose policy, made investments in the market the best game in town.
Frankly it was the only game in town. Now we're going to see the same in Europe. Do you see a bifurcation - oh, I do like that word - where the
U.S. decides to market - suffers a little bit because of higher rates, but Europe's market - let's face it - with a trillion euros on the table, off
to the market - off to the races.
EL-ERIAN: So what you're mentioning is what's called the QE trade. When a central bank decides to use its balance sheet and to get involved in
markets, two things happen - and we've seen it first happen in the U.S. after 2010, then happened in Japan after 2013 and now it's been happening
in Europe. Equities take off, the currency weakens. That is the QE trade, and markets love something that's familiar.
What's different is in the past you could be confident that this increase in equities will be part of a general rally in global equities. That's not
the case today, so there is an argument for the relative trade for Europe versus the U.S., there's an argument for the currency trade but it's not as
obvious as it used to be.
QUEST: I guess I should just put it in a sock and keep it under the mattress. Good to see you, sir. Thank you - very glad to make sense of
all of this. Thank you very much indeed. The currency trade, the QE trade and of course the trade you've heard about here on "Quest Means Business."
The European market and the trades that (inaudible) all the major markets, all the major indices were down. The FTSE was absolutely clobbered over
the head. Down 1 and 3/4 points. The U.K. election is now underway. I think we have to take every aspect of the U.K. market with a certain tinge
and pinch of salt. [16:50:15] Frankfurt DAX and the CAC both put in around a 1 percent down.
It wasn't much better for the SMI in Zurich. Look at the U.K. growth number. It came in at 6/10ths of 1 percent. So obviously one of the
reasons - one of the reasons - that you've seen the U.K. market down is the question of higher interest rates and when that's likely to take effect and
that quarter one-quarter growth is one of the driving forces. The new host of "The Daily Show" was announced yesterday and tweets from
years gone by have landed Trevor Noah in hot water. What did he tweet? We will discuss how unpleasant or not as the case may be after the break.
"Quest Means Business."
(COMMERCIAL BREAK)
QUEST: The backlash against Trevor Noah has begun only one day after he was unveiled as the next host of "The Daily Show." The South African
comedian is already being criticized for old tweets which some people are describing as misogynist and anti-Semitic. He tweeted this in 2012 -
"Originally when men proposed, they went down on one knee, so if the woman said no they were in the perfect uppercut position." Then there was this
in 2009 - "Almost bumped a Jewish kid crossing the road. He didn't look before crossing but I still would've felt so bad in my German car." Quite.
Noah has more than two million followers on Twitter. Our business correspondent Samuel Burke is here to discuss it. Well, they're neither
funny nor particularly clever, but it's what comedians do. And comedians take - poke - fun at the disadvantaged, the poor, the disabled, the
whatever. That's what they do in the satirical world.
SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: You know what the problem here, Richard, is that Trevor Noah doesn't have the credit in the bank as a
comedian. He's an unknown entity at least here in America. So he's put out these tweets, but you know when a comedian like Bill Maher who's so
well known here in the United States makes a joke about gay people or gay marriage - the gay community doesn't mind because they know he is for gay
marriage. Whereas here people are just getting to know Trevor Noah. He's only been on "The Daily Show" three times, but he has years of tweets to
plow through.
QUEST: All right. Comedy Central has stuck by him - actually more than stuck by him. They've had a robust defense of him. So either they
knew exactly what they were dealing with and they're basically saying long- tow, this is going to go away or they didn't - -which is it?
BURKE: Well there's a lot of debate about that because if they did their due diligence that an employer must do when a comedian enters a big
stage like this, one would maybe think that they might have told him maybe you should delete some of those tweets.
QUEST: Ah! You're saying - so what you're saying is delete rather than not give him the job because they're there.
BURKE: Well that's the big question tonight. If they had known about them, they probably would have asked him to delete them, so some are saying
it doesn't look like Comedy Central went through all those tweets and found them. But we have to be fair - like you said a robust defense.
Comedy Central put out a statement and this shows really the type of heat that they're under with these tweets. And they said the following, quote,
"Like many comedians, Trevor Noah pushes boundaries, he is provocative and spares no one - himself included. To judge him or his comedy based on a
handful of jokes is unfair. Trevor is a talented comedian with a bright future at Comedy Central." That's what they're saying at the network
tonight, Richard.
[16:55:23] QUEST: He will survive - that's my feeling. Nothing's come out so far that's going to get rid of him yet. Samuel Burke, thank
you. We'll have a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment" - or maybe it wasn't so profitable. It really depends on what - look at that. This is how we
ended the quarter - down 200 points. What does it all mean? The 'volatile volatility' which just simply won't go away. Tonight we were lucky to hear
Mohamed El-Erian put it into perspective. It's not surprising - you've got monetary policy that looks like it's going to tighten in the U.S.
Meanwhile, the so-called QE trade that we heard about is just getting going in Europe. And of course it's well underway in Japan. It makes it almost
impossible for the ordinary investor - me, you, our relatives - to know what to do. You want to be part of these great gains that we hear about -
markets fizzing and rising. But you don't want to lose your shirt at the same time. And so we invest in our mutual funds, we try to make the best
we can, but the true secret is volatility just means invest and leave it there. Make slight distinctions, move your portfolio a little bit one way
or the other. Don't panic, keep calm. The alternative of course is a nasty bout of indigestion, serious worry and probably an early heart
attack. Because that's what the markets are doing everyday with this 'volatile volatility.' And that's "Quest Means Business" for tonight. I'm
Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. Let's get together tomorrow.
END
