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Quest Means Business
Migrants Break Free from Hungarian Holding Camp; E.U. Divided over Mandatory Migrant Quotas; Dow Soars 390 Points Tuesday; Trade Falls Faster Than Expected in China; Uber Plans Massive Push into Chinese Market; Aired 4-5p ET
Aired September 08, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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RICHARD QUEST, CNN HOST: And on the Dow, just a moment or two ago, the market wasn't able to sustain that very high level best of the day. And
now all comes to a close. A strong gavel to bring trading to a close on Tuesday, September the 8th.
As European leaders bicker, the migrants break through (INAUDIBLE) on the Hungarian border. We are there tonight.
China shows more signs of strain as Uber drives in.
Days of hunting for remote controls may be coming to an end. There are new ways of communicating with the future. I'm Richard Quest. Of course I
mean business.
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QUEST: Good evening. Tonight, as the politicians in Europe bicker on how to fix Europe's refugee crisis, the migrants on the border between Hungary
and Serbia have taken matters into their own hands.
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QUEST (voice-over): The migrants are being held at a border camp there. They've been complaining of uncomfortable, awful conditions. And finally
they became too much to bear.
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QUEST (voice-over): Hundreds of migrants ran to escape. They broke through the police lines and into the cornfields. CNN's Arwa Damon was
with them as they fled.
ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: We're running now with these migrants and refugees, who just broke out of the holding area right
along the border with Serbia. The police are literally right behind --
I'm CNN.
DAMON: The police are literally right behind them and in front, trying to bring them under control.
There are hundreds of them that staged this breakout because they were fed up at the conditions they were being held in. They couldn't take it
anymore. Young, old men, parents with families.
QUEST (voice-over): Now police say to stop the migrants, surrounded them before bringing them food and water.
Arwa is at the Hungarian-Serbian border for us tonight.
Good evening to you, Arwa. We don't -- we need to understand from you the conditions -- never mind the protocols or the regulations -- what are the
conditions in the camps?
DAMON: Richard, let me put it to you this way. First of all, we're back in Budapest right now. But basically when these people, who are mostly
refugees fleeing the wars of Syria, Iraq and Afghanistan, when they come along those train tracks, cross from Serbia into Hungary, they're taken to
a holding area.
It's only meant to be a place where they spend 2-3 hours. But many of them are there much longer. Some are there for days. And the conditions in
this holding area, you have a few very thin tents. It gets very cold at night. There is some basic food and water being distributed, yes.
But it's not the sort of environment that an individual who has spent two, three, four weeks on the road, traveling through Europe, having risked
their life trying to cross the seas and then days spent walking up to 8-9 hours, it's not the sort of conditions that a person wants to stay in,
especially not when they're supposed to have crossed into the gateway of the European Union.
So a lot of them are quite shocked by the conditions there, by the state of it. It's fairly dirty; the trash pickup is not happening quickly enough
because of the sheer flow of people coming through. The buses aren't arriving quickly enough. The transit camps they're supposed to go to --
it's just not happening fast enough.
So they can't mentally handle what's happening to them and they do reach these breaking points, like what we saw today.
QUEST: On this question, though, the Hungarians say, of course, that many of those people arriving are not genuine refugees; they are migrants,
economic or otherwise. But they are taking advantage of the situation to make it into the European Union.
You've been there. Give me the assessment.
DAMON: Well, look, the vast majority of them have been fleeing the war in Syria. If you look at the statistics, at least 50 percent-plus upwards of
them have been fleeing ISIS, Syrian regime barrel bombs, being stuck on various different front lines.
Others are fleeing the war that never really stopped in Iraq and the war that never really stopped in Afghanistan. These are people that are
seeking --
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DAMON: -- safety and security. And there is the argument being made of whether or not they should just stay in Turkey or Lebanon, for example.
But Turkey's a country that has already taken in close to 2 million refugees. That's just the number that's been registered. The real number
probably double that. Lebanon's population right now is made up of 20 percent refugees. These are two countries where, even though, yes,
hypothetically speaking, they're safe, they don't have jobs. They don't have an education for their children.
So the security that they're seeking is not just their physical security; it is also securing a future for their children. They're not here because
they want to take European jobs or be a drain on the economy of the country they're going to be ending up.
And these are people that are genuinely fleeing war. And they're looking for opportunities that do not exist for them back in their homelands.
QUEST: Arwa Damon, who is in Budapest this evening, the capital of Hungary, we'll be talking in just a moment to the international
spokesperson for Viktor Orban, the Hungarian government.
Now while chaos is reigning on the outskirts of Europe, Angela Merkel says it's time to force countries to take in more migrants. The German
chancellor says all E.U. member states should have mandatory migrant quotas. And she says it should be done in the name of European solidarity.
Also, too many countries are shirking their responsibilities at a time of profound importance for Europe.
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ANGELA MERKEL, CHANCELLOR OF GERMANY (through translator): I've rarely been so convinced inwardly that this is a task which decides about the
future of Europe and whether we are accepted as a continent of values and individual freedom.
The whole world is looking at us. And we can't just say, listen, Syria is too far away. We won't deal with the problem. This would create huge
damage, also for the acceptance of Europe.
(END VIDEO CLIP)
QUEST: Now the European Commission plans to announce some kind of mandatory quotas on Wednesday. And that might please the chancellor in
Berlin; it's a policy that has almost split Europe down the middle.
If you'll join me at the superscreens, you'll see what I mean. V4 Group says quotas are unacceptable. So those who oppose any form of quotas --
it's Hungary, it's the -- it's Poland, it's the Czech Republic, Slovakia and it's Romania. The Romanian president says quotas should be voluntary.
E.U. quota force would remain -- would force Europe -- particularly Romania -- to take in more people, particularly those who I've described as
economic migrants.
France now supports quotas, having previously opposed them. Spain has backtracked and now says it will accept a quota system.
Meanwhile, Austria supports quotas only for refugees, not for migrants and, of course, up towards Scandinavia you see the way the countries behave
there.
Hungary and Italy, they are exempt. The countries that are exempt, the -- obviously the U.K.; it's not part of Schengen, anyway, part of Denmark as
well, Italy and Greece and Hungary are exempt.
The quotas are designed to relieve those countries; the others, of course, are exempt. U.K. says it is taking refugees voluntarily from the various
places.
Let's talk about this with Zoltan Kovacs, the spokesperson for the Hungarian government, who joins me now from Budapest via Skype.
Sir, good to see you. I know these are very busy days for you.
So let's just talk about the quota system. We have much ground to cover. So the quota system that Europe is planning to put forward tomorrow,
Hungary is exempt, but you still don't believe that this is the right way forward?
ZOLTAN KOVACS, HUNGARIAN GOVERNMENT SPOKESPERSON: Well, the last political decision of the council back in June made it clear mostly because Central
European countries, the bishigrat (ph) force and the Baltic countries were against a compulsory quota. The quota is bad by principle.
But the situation -- as the situation deteriorates on our borders, as you reported, we see that it is not no time -- we are not there yet to raise
the question of a quota.
First things first, we have to address the real problem. Unless you stop the flood of illegal migrants to Europe, you will -- you are not able and
you are not entitled to talk about a quota, because you don't know who and how many people you have to distribute.
QUEST: Can -- when we heard you, you will have heard Arwa Damon talking a moment or two ago, you've seen the pictures of the events of today. Now I
accept fully, of course, that nobody in the Hungarian government wishes to have this sort of ordeal inflicted on arriving people fleeing from war.
But can you agree: this has not been Hungary's finest hour in the way these people have been provided with sustenance and treated?
KOVACS: Again, Hungary is fully capable of treating these people according to the European standards. We are equipped --
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KOVACS: -- we do have the means. And those spots, like in Germany and elsewhere, which has been assigned for that. And the real problem is that
these people won't go there. They would like to go to Germany at all costs.
But you see the pictures coming from Ruskat (ph) is just another symptom and that is there's no one on Earth can tell you how many people are going
to come next day. One battery is not good; it drops below 1,000 a day, illegal migrants coming across European borders, police have to --
(CROSSTALK)
KOVACS: -- and when the weather is good, like for the past 2-3 days, then it jumps over 3,000.
So there's no institutional system that would be able to prepare and which is designed to cope with this kind of challenge.
QUEST: But if I accept, for the purpose of this question that you have a valid point on the question of a border or at least a fence of some sort,
can't your government do better at providing food, shelter, basic medicines, the necessities for these people, many of whom are fleeing death
and destruction from war?
KOVACS: Again, we can't do everything you are requesting and what you are suggesting. The problem is that without compliance on behalf of the
migrants, it's not going to work.
The scenes you've been -- you witnessed today is exactly due to that problem. They arrived with something in mind. They've been told, they've
been suggested they are being equal in their head by human traffickers, by gossip, by all means that there's only one thing they have to do, that is
reach Germany as soon as possible.
Until you cut this thread of ideas like these or attitudes like this and you cut the flood of illegal migrants at the borders, then you won't be
able to take care of the situation at all.
And people decide on their own to walk more ways. They walk on the railways. And we are very close to human tragedies at times because is it
impossible, again, to put (INAUDIBLE) each migrant who is trying to come to Hungary just to leave Hungary as soon as possible.
QUEST: Finally, I want to quote your prime minister. You know the quote well.
The prime minister says, "All of a sudden, we will see that we are minority in our own continent." He said that at the weekend. He's referring, of
course, to the number of people coming across.
I do wonder whether these sorts of questions or these quotes, whether they are helpful and certainly don't they create a perception that this is not
just about migrants but it's about putting up borders and keeping people out?
KOVACS: When -- well, when you face numbers like this on a daily basis and 170 -- 100,000 illegal migrants this year, this is not about images or
concepts. It is about hard evidence and facts. I mean, this is an unprecedented invasion of migrants which had to be stopped because it is by
principle wrong.
You have to -- you have to address these issues in a very outspoken manner. And if you listen to the speech of the Hungarian prime minister, which was
given at the meeting of Hungarian ambassadors from all over the world, I think these were very outspoken but very clear words and messages about a
very fundamental issue we all have to face here in Europe.
This is about the future of Europe, whether you are able to control that future or whether you just simply let it (INAUDIBLE) of migrants coming to
Hungary and to Europe.
Zoltan, thank you for joining us this evening, always good to have you on the program, sir. Thank you for taking the time in difficult times.
Now to the markets and a rally on Wall Street. What a rally indeed. Not the -- it was about -- I think we've got -- just got about 401, 402 points,
looking at my colleagues here, to see they were watching much more closely than I was in those last few moments of trade. We did break 400 but it
fell back just at the close. We'll have more. It's QUEST MEANS BUSINESS from New York.
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QUEST: So no trading on Monday; Tuesday, first day back at work for the market and what a market it was, up 400 points at one stage, closing the
day with a gain of 390 points, just shy of 16,500.
CNNMoney's Fear and Greed Index shows investors are still deeply fearful. The index now is having -- it's still in the realms of extreme fear. We
had been maybe a little further even more towards extreme fear; not so much greed. This sort of means when you see it in this territory, then you know
sales are on the horizon.
Alan Valdes is the director of floor trading at DME Securities and he's with me from the exchange with a splendid jacket and tie.
My word, you're determined, Mr. Valdes, not to let the last vestiges of summer escape you.
ALAN VALDES, DIRECTOR OF FLOOR TRADING, TME SECURITIES: It was just as hot in here on the market as it was outside. So that's why I'm wearing this
linen suit. But it was a great day for us today in here, that's for sure.
QUEST: Linen suits after Labor Day, whatever next?
Listen, what did happen? Why -- the market was up very sharply at the beginning. It never looked back. Interestingly, it couldn't hold up 400
at the close.
VALDES: No. But you know what? We had mediocre numbers out of China, not great but it was enough to get the European markets going. And that really
just filtered over into our markets and then, like you mentioned, we got up a size 425, I think at one point, and then we came back in a little bit.
Still a good day.
But you know, there wasn't really strong buying as there was so much technical buying. I saw a lot of short covering going on. I mean, guys
went home on Friday for the long weekend here after the worst -- second worst week of the year. There were a lot of shorts. And then when they
saw what happened in Europe, they just started covering.
QUEST: OK. So you -- but that also tells me -- that also tells me that that selling pressure is not -- the big downward pressure doesn't exist for
the moment, because if you're covering your shorts, you're not expected to have -- you're expecting not to go long or at least you're not worried
about the future.
VALDES: Right, good point. And you saw that today because up to about 11 o'clock, the market was holding right in that 200 range. And then when the
shorts saw there was no selling coming in via very right say (ph), all the way around, they started buying it right back at covering their shorts,
because they knew, like you just mentioned, there was no real selling pressure.
QUEST: So as we go into September -- and I'm aware the Fed next week -- and everybody's looking at the Fed -- by the way, yes or no, do you think
they do it next week?
Does the Fed --
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VALDES: I think they do it. I think they backed themselves in the corner. I mean, we had good GDP. We had good labor number -- even though it wasn't
great -- still enough for them to move inflation. They can't do anything when inflation is -- wage inflation -- so they can write that off.
I think they have to.
QUEST: All right. Alan, thank you very much indeed with a linen jacket. You'll get one right out of that and it'll be straight to the dry cleaners.
VALDES: Right. Thank you, Richard, have a good evening.
QUEST: Thank you very much.
Linen jackets, every time I've ever tried to travel anywhere with a linen jacket, out it comes from the case and straight to the hotel laundry.
European markets closed higher on Tuesday.
I'm not sure why that was relevant today.
Stronger than expected trade data from Germany, Xetra DAX up 1.5 percent. China's economy may be pumping the brakes just marginally; Uber is still
full steam ahead. The ambitious startup puts 100 Chinese cities in one year. But as we're going to talk about, doing business in China is not
easy.
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QUEST: There's a new crack in China's economy. August figures show trade is still falling at a worse-than-expected rate -- look at the numbers.
Exports are down some 6.1 percent, perhaps even more worryingly in terms of the -- bearing in mind most of those exports go towards developed
countries.
But imports, now that's commodities, not only from places like Australia, Brazil, but also other emerging markets -- Indonesia, Malaysia, large parts
of APAC and Southeast Asia. And that's down a whopping 14 percent and that's why you're getting so much of a currency issue in emerging markets
at the moment.
After the late rally on the markets, the Chinese markets took it all in their stride. It was up some 3 percent for the Shanghai Composite, a
highly dubious market at the moment. You're never sure which way it's -- and even more dubious is the Shenzhen Composite was up 4 percent. Hong
Kong's Hang Seng far more regular in all its modalities; that was up 3.25 percent.
Patrick Chovanec is the chief strategist at Silvercrest Asset Management, joins me now.
Good to see you, sir.
PATRICK CHOVANEC, CHIEF STRATEGIST, SILVERCREST ASSET MANAGEMENT: Good to see you.
QUEST: Well, the Chinese say that they are -- the volatility's over. It's all finished.
Do you believe them?
CHOVANEC: Well, no. And when these numbers were announced, these trade numbers were announced, the market actually went down. And it was in the
afternoon that the market went up. You got to put quotations around "market" there because there was probably heavy intervention.
QUEST: Right. So how much of this market is just being supported by government money at the moment, do you believe?
CHOVANEC: I think a lot of it is and I think that every time that they even talk about the government stepping back, you see the Chinese stock
market go down and often go down hard.
QUEST: Intervention will work for a very limited time and it can have long-lasting benefits if macro policy changes.
Are you seeing macro policy change?
CHOVANEC: No. And in fact, I think what we're seeing in these -- not just the export numbers, which a lot of people have focused on, because that's
important for Chinese growth, but the import numbers really tell you that China's construction and its heavy industry-driven economy is slowing
severely. And that's not changing.
QUEST: Right. But as I look at those numbers, both sides of those numbers tell appalling stories for other countries. Now exports -- because it
means that they're just not producing enough. But imports, because that means, as I said, emerging markets are not going to be selling as much.
CHOVANEC: There are -- if you are selling into China's investment boom, which is now collapsing, then you are taking a hit very hard.
(CROSSTALK)
QUEST: And what companies are we talking about?
CHOVANEC: We're talking about -- well, look at -- in the S&P 500, there are three sectors that are down this year in terms of earnings. There's
materials; there's energy and then there's industrials, and particularly industrials that feed in either directly or indirectly into China's
investment boom.
And that's a global story. So Australia saw its exports, primarily driven by iron ore to China, fall off by a quarter this year, year-on-year.
QUEST: But those exports from China, they should be dependent on growth elsewhere.
CHOVANEC: Yes, but China -- but I think a key here is that it's not just cyclical; it's structural. China has outgrown the export-led investment-
driven model that it had up to this point. And it really needs to drive domestic growth through domestic demand.
And that's reflected in the static export numbers that you see and they try to get around that through an investment boom. And that now is --
(CROSSTALK)
QUEST: But just before you finish here, can there be a decoupling between China and the rest of the economy?
CHOVANEC: Oh, I don't think there's any decoupling. But there is a very nuanced effect in terms of it's bad for some sectors globally; it doesn't
affect others and it actually helps others.
QUEST: Good to see you, sir. Thank you very much indeed.
Now we're going to talk more about this when we look at the question of those companies who are going into China. Uber isn't feeling that slowdown
in China yet.
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QUEST: The chief executive Travis Kalanick says Uber is expanding at a breakneck pace in China and plans to operate in 100 cities before long.
Uber only had about 1 percent of the Chinese ride market at the beginning of the year; nine months later and it controls as much 35 percent.
But it is a standoff with a local competitor, which is called Didi Kuaidi - - I think I'm pronouncing that right -- in a race for control in China.
So let's begin. Gentlemen, start your engines.
Uber has raised the princely sum of around $1.2 billion in China; over the same period, Didi has raised $3 billion, much more money than Uber. But
Uber has partnered with Baidu, the Chinese search giant. It will get access to giant maps and help build relationships with local governments.
Not a bit of it. Didi Kuaidi is backed, in this case, by powerful (INAUDIBLE) Alibaba, two huge Internet firms.
Still with a $50 billion value, Uber is going to use its global size and muscle to force out the competition by brute force and is already heavily
subsidizing rides in China to become the dominant player.
Building a business in China is not easy, is it, Rana?
RANA FOROOHAR, CNN CORRESPONDENT: Indeed.
QUEST: Good to see you.
FOROOHAR: Nice to see you.
QUEST: What are the structural difficulties that are involved?
FOROOHAR: Well, for starters, tech companies in China, particular Western tech companies going to China, have a spotty record. You know, technology
is a strategic sector in China, which means the state favors certain domestic players. And you can look back at the history of companies like
Google, for example, that started -- there was a lot of optimism and they had to get out of that market.
The Chinese government can turn on a dime, particularly in these sectors. So it's risky.
QUEST: Right. But they turn, as you say, on a dime.
We've got an extraordinary example of how the Chinese government can be very fickle, a reminder of how difficult things can be. We're given
another reminder with the Bon Jovi concert.
(LAUGHTER)
QUEST: Now there's Bon Jovi, Jon Bon Jovi.
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QUEST (voice-over): He says we're going to hold on to what we've got. But apparently, during a concert, some years ago, three years ago, he had a
picture of the Dalai Lama behind him. And as a result, the Chinese government have now said they've canceled his concerts.
FOROOHAR: Yes. Well, that's a big no-no, no Dalai Lama, no Tiananmen, no politics if you're going to do business or be an entertainer in China, you
have to know that.
And you can see it in the way the censorship runs with technology companies. I have no doubt that Uber will fall afoul of those things if it
would venture into those areas, either.
QUEST: Right. But when you do get the comforts of a Western company, in China, you have the Google issue.
FOROOHAR: Yes.
QUEST: Well, you know, you have to question whether you're going to compromise. But then you have the Disney question, the Murdoch issues,
where they were prepared to make certain changes.
So I'm wondering, what would you advise is the single biggest risk?
FOROOHAR: I think the idea that the government would eventually favor a local player -- it's possible that the government could invite Uber into
the market, let it expand, let it teach other local players how to do business and then things change and the market goes back to local players.
That's happened before, it could happen again.
QUEST: Some years ago, a very senior executive of a Western company based in Beijing said to me the Chinese want our technology, they want our know-
how, they want our experience and then they want us out of here.
(LAUGHTER)
FOROOHAR: That's a great truism and I completely agree with that.
It reminds me actually of a conversation I had with a big wind turbine maker. Number one in China for a long time.
I asked him about his prospects and he said, "I'll be number four next year."
And I said, "Number four? How do you know that?"
And he said, "That's what the government says."
QUEST: Good to see you.
FOROOHAR: And you.
QUEST: You're always number one with us.
(LAUGHTER)
FOROOHAR: I won't ring your bell again.
(LAUGHTER)
QUEST: QUEST MEANS BUSINESS, we are going to continue. The appalling situation as it affects migrants in Europe and the European Union's
response. We'll be talking about that and the question of quotas after the break. Good evening.
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[16:31:34] QUEST: Hello, I'm Richard Quest. There's more "Quest Means Business" in a moment when the migrant crisis strains the finances in some
of the Middle East's poorest countries.
And with a wave or a shout - a way you can show your electronics is changing before your very eyes. This is CNN and on this network the news
always comes first.
Hundreds of frustrated migrants and refugees broke out of a holding center in Southern Hungary after complaining of poor conditions. They were
eventually caught by the Hungarian police. Speaking in Berlin, the German chancellor says it's time for all E.U. member states to have mandatory
migrant quotas in the name of European solidarity.
(BEGIN VIDEO CLIP)
ANGELA MERKEL, GERMAN CHANCELLOR (VIA INTERPRETER): I've rarely been so convinced inwardly that this is a test that decides about the future of
Europe and whether we are accepted as a continent of values and individual freedom.
The whole world is looking at us and we can't just say, 'Listen, Syria's too far away. We won't deal with the problem.' This would create huge
damage also for the acceptance of Europe.
(END VIDEO CLIP)
QUEST: Major boost for President Barack Obama and the Iran nuclear deal. Three more Democrat senators announced they will back the agreement.
It means the President now has enough votes to potentially lock a final vote on the deal. One of the three senators, Richard Blumenthal, who said
the deal's the best the U.S. could get right now.
(BEGIN VIDEO CLIP)
SEN. RICHARD BLUMENTHAL (D), CONNECTICUT: This is not the agreement that I would have accepted at the negotiating table, but I am convinced that there
is no better deal now. There is no better deal available now.
(END VIDEO CLIP)
QUEST: Pope Francis is simplifying the process for Catholics who want to annul the marriages. The Pope has called the current system long and
burdensome. He changes the screen of the process taking effect on December the 8th at the start of what the church is calling "The Holy Year of
Mercy." The U.S. county clerk who has refused to grant marriage licenses to same-
sex couples has been freed from a Kentucky jail.
The judge's ruling said Davis could be released on the condition she did not interfere with the issuance of marriage licenses to all legally
eligible couples. Davis' (AUDIO GAP) says she was defending her religious beliefs.
At least 15 Turkish police officers have been killed and more have been wounded in a roadside bombing in Turkey according to the news agencies.
The attack was carried out in the Eastern Province of Igdir. It's being blamed on the Kurdish militants, the PKK.
Violence has escalated following the collapse of a two-year cease fire in July.
Returning to our top story tonight and the United Nations says there are 30,000 refugees currently on Greek islands with 2/3rds of them on the small
island of Lesbos.
Ministers there say the island's on the brink of what they're calling an explosion. Its entire population is just over 80,000. The islands are a
short boat ride away from Turkey. The "Washington Post's" Liz Sly joins me on the line from Izmir in Turkey.
So the situation, Liz, -- to understand - where have these migrants come from? Because there's so much confusion about their point of origin at the
moment. Where do you believe they've come from?
[16:35:07] LIZ SLY, BEIRUT BUREAU CHIEF, "THE WASHINGTON POST": I'm in Izmir which is across the - just across the -- border from Lesbos and it is
the jumping-off point for most of these people who are going to Europe.
The streets here are swarming with them. There's thousands of them. And the vast majority of them are Syrians.
You can find one or two people here and every now and then you'll see a group of Bangladeshis maybe. You bump into a group of people and one of
them might be from Gaza or Jordan, but overwhelmingly, these are people from Syria. And they're refugees, so refugees from the war there.
QUEST: Right. Now, the process - I mean, never mind the Dublin Agreement - the process is when they - they obviously don't want to stay -- well for
whatever reason they don't want to stay in Turkey. They're aiming to get to Germany.
When they cross into the E.U., that's the place where they're supposed to do the first registration as refugees and asylum seekers, correct?
SLY: Yes, I understand so, yes. I think most of the people I've been talking to here are a bit dizzy on the actual requirements and they will be
asking me a lot of details about that which I must say - because I'm covering from the other end - I'm a bit foggy on myself.
But, yes, these people certainly are hoping to get asylum and refugee status in Europe.
QUEST: Now, when they make the crossing from Turkey, what are they telling you? What are they saying about why and how and the wherefores?
SLY: If you mean in terms of why they're doing it, it's really very simple. It seems that at this point in this (stummer), in this fourth year
of war in Syria, a whole bunch of people have collectively decided from all over the country that this war is not going to end any more - any time -
soon. They don't want to keep fighting it, they don't want to stick around and wait for a solution, -
QUEST: Right.
SLY: -- they've decided it's over, the country's finished, they have no hope, no future there, no peace is in sight and they're on their way.
They're getting out and this is the best route they can think of.
QUEST: And when we look at for example Turkey's role in all this and we listen to what the Prime Minister Erdogan has said, when we listen to
what's been said, the role of Turkey in facilitating the ability of the migrants to move further on.
But at the same time, maintaining vast numbers of refugees in its own right.
SLY: Well that's right. Turkey's hosting about 2 million refugees, it's put them in camps. Some of the camps are pretty nice as refugee camps go.
But it's a hugely expensive effort.
Turkey spent over $6 billion of its own money hosting these refugees. That's more than any other single country. Turkey has been a bit kinder to
the refugees than many other countries. But at the same time, living in a camp is not a future. They don't give - they haven't given the Syrians the
right to work here, they haven't given them promises of permanent residency.
The Syrians here know very much that, you know, that generosity could end at any minute and they could be kicked back whereas in Europe there are
actually laws and procedures. And one of the things to think about as well is that President Erdogan is
in a bit of political difficulty right now. His party didn't win the majority -
QUEST: Right.
SLY: -- last election, there's a lot of political turmoil in this country at the moment. It's not out of the question that his party could lose
control of their government at elections on November the 1st. And if that happens, another party may be much, much less welcoming to these refugees
than he was. So a lot of them (ph) also are thinking of getting out now from Turkey.
QUEST: Liz Sly joining me from Turkey. Thank you. And my apologies, I misspoke - of course it's President Erdogan, not Prime Minister Erdogan.
And now as we discussed on last night's "Quest Means Business," some of the richest nations in the Gulf have been accused of not doing enough to help
refugees from Syria. Our emerging markets editor John Defterios explains that it's left to some of the poorer countries in the Middle East. Some of
those like Turkey which is of course East Asia to pick up the strain.
(BEGIN VIDEO CLIP)
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: The global spotlight may be shining on the Hungarian/Serbian border and Lesbos Island in Greece, but
the Syrian refugee crisis has been grinding away for four years here in the Middle East.
And those with the smallest populations are being hit the hardest. The numbers are staggering, which illustrate the strain on those defined as
"near neighbors" of Syria. In Lebanon 1.4 million refugees - over a quarter of the population with an annual cost of $4.5 billion.
In Jordan, nearly the same level of refugees -- one in five of the population with the a price tag of $2.2 billion per year. And Jordan, like
Lebanon, realizes this is not over and they are both at capacity already.
AYMAN SAFADI, CEO, PATH ARABIA: It is unfair to leave the pressure to fall solely on close (ph) countries like Jordan and Lebanon. It's simply (AUDIO
GAP) they've done everything they could and they've hosted more refugees than the whole of Europe combined despite their very meager economic
resources.
[16:40:03] And yet they cannot do it alone, they need help. That help has been very, very slow and very short in coming.
DEFTERIOS: Safadi, the former deputy prime minister of Jordan, knows the budget limitations well and there are less obvious strains on services and
society.
In Lebanon, unemployment has skyrocketed - doubling to 20 percent in four years as refugees compete against locals for jobs. More than $1 billion
has been spent for additional healthcare spending in Jordan There's over 120,000 students registered in public schools there as well.
SAFADI: You could imagine the strain that it's put on the economy, on the people. The schooling system in some areas is working three shifts,
hospitals are overcrowded. Job market is also overcrowded because only very small percentage of the 1.5 million Syrians in Jordan live in refugee
camps. The rest are all over the country, the cities, the villages from the north to the south.
DEFTERIOS: Even the very basics are in demand with subsidies extended to Syrians for bread, electricity and water. At the Zaatari Refugee Camp in
Jordan, the power bill is running at least a half a million dollars a month. And this comes with donor fatigue has set in. The U.N. says there's
a $4.5 billion requirement just for Syrian refugees, and so far less than $2 billion has been delivered. John Defterios, CNN Abu Dhabi.
(END VIDEO CLIP)
QUEST: This is "Quest Means Business."
(COMMERCIAL BREAK)
QUEST: A new era in late night television will begin in just over six hours from now. "The Late Show" on CBS will officially become "The Late
Show with Stephen Colbert."
It's an important moment for a cultural institution and a massive financial opportunity for CBS. Our own cultural institution Brian Stelter is outside
the Ed Sullivan Theater in Manhattan. You had a very good view of the theater until that large truck arrived just
to steal your thunder. Brian, how significant is this tonight in that vast wasteland of television?
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Ah, the vast wasteland it is, Richard, but with pockets of genius. And Colbert was received by many
as a genius on "Comedy Central" for many years. His fake blowhard conservative character was beloved by some, hated by others.
But tonight he's retiring that character. He's debuting himself for lack of a better word, and debuting in front of millions of people on CBS.
To give you a sense of how important the day is, we saw the CEO of the CBS Corporation Leslie Moonves come in this afternoon, visit the staff. He's
going to be back in a few minutes for the taping. There's hundreds of folks that are trying to get inside the Ed Sullivan
Theater for tonight's taping and we'll all be able to see it at 11:30 when the episode premiers.
QUEST: Right, but there has been a complete shift, hasn't there? All the major presenters on "Late Night" have changed in the last year or two.
[16:45:00] So it's an entire - look, I go back to when I first came to the United States in the 1980s and then that was the first shift, the shift
that brought us Letterman and co. - and Leno - they've all now gone away and we have an entire new generation.
STELTER: Yes, there has been a generational shift in late night. It's still mostly white men but you do see more pockets of diversity.
And I would say you do also see more interesting, experimental sort of things going on harkening back to Letterman's first years on "The Late
Show" in the 1980s. What we're seeing with Jimmy Fallon and soon with Stephen Colbert is a testing of what they can do with the format, how they
can change it in new ways. Next week Colbert has a sitting Supreme Court justice on the show for example. He also has the CEO of Uber this week and the CEO of Tesla. So,
yes there's going to be Hollywood stars like George Clooney but also Silicon Valley stars.
QUEST: Right, but the format remains largely the same. We don't know whether there's to be monologue followed by interview followed by a bit of
frippery and nonsense.
STELTER: (LAUGHTER).
QUEST: But is it likely that anybody's going to be brave enough to completely blow up the format?
STELTER: That's a very good point. It is largely the same - has been for decades. But people like Colbert are now also thinking in byte-sized
clips. They are thinking about how to make a three-minute version of the show that'll appeal to people that are watching on their phones.
CBS tonight is even streaming the show for people that don't have a cable connection or an antenna connection. They're trying to get people to sign
up for their new online subscription version of CBS. So what we can see here is in this golden age of TV and this new age of late night, all of
these hosts, all of these shows trying to adapt to the way we're increasingly watching TV.
But at the end of the day though, you're right - George Clooney, Jeb Bush, there are going to be sound bites, there are going to be interviews just as
we've seen for decades. And sometimes that's sort of nice. As everything changes in TV, it's sort of nice for a few things to stay the same I think.
QUEST: Brian Stelter joining us from "Late Show with Stephen Colbert." Thank you sir.
Now in a moment I'm going to show you new ways to change the channel without one of these. Don't you change the channel - we will be right
back.
(COMMERCIAL BREAK)
QUEST: It has to be here somewhere. That is one of them. But there's always another one hiding somewhere. Ah! There's the little thing. I'm
just trying to tune the TV here and as always it's a struggle to find the remote.
Some of the latest advances in technology may actually eliminate searching and moving around, and it starts with the big Apple announcement on
Wednesday.
(BEEPING SOUND)
QUEST: Imagine rumors are abounding that Siri will take on a greater role in Apple TV. So instead of using a remote control, you can say, "Show me
"Quest Means Business" and up it will come with maybe music, games and other voices.
You could even imagine a scenario where you say, "Show me Claire Sebastian's report" and how all these changes are going to work.
(BEGIN VIDEO CLIP)
CLAIRE SEBASTIAN, CNN PRODUCER: Come on, Siri, give me a hint.
SIRI: You'll have to wait until September 9th. I bet you are one of those kids who snuck downstairs to open presents early, weren't you?
[16:50:01] SEBASTIAN: Siri is good at keeping secrets.
SIRI: Well I hear there's something big happening on September 9th.
SEBASTIAN: And when it comes to Apple's next product event, she may have an extra reason to stay tight-lipped.
MAX WOLFF, VENTURE CAPITAL PARTNERS: The hint certainly does make it look like we're going to get bigger news than we had thought.
SEBASTIAN: It's tradition for Apple to put riddles like this in its invitations. In October 2012, "We've got a little more to show you" which
turned out to be the first iPad mini. This time last year "I wish we could say more" echoed Steve Jobs' famous
"one more thing" and heralded the Apple Watch, the first new category since Jobs was CEO.
SIRI: You're cute when you're desperate for information.
SEBASTIAN: So rather than asking Siri, perhaps we should take a closer look at Siri herself.
SIRI: Let me think.
SEBASTIAN: Siri started life on the iPhone 4S, now rumor is Apple will announce an iPhone 6S and 6S Plus. Among many upgrades, it could include a
better chip making way for the next operating system iOS 9 which we know features a superior Siri.
WOLFF: The dream of the Apple which has largely achieved with their audience of the iPhone is that it's the universal remote control of your
life. They would now like Siri to be the interface of that operating system.
So Siri is another way to really separate out.
SEBASTIAN: The iPhone needs to stand out. It accounted for 63 percent of Apple's sales in the last quarter, much more than any other product.
SIRI: I'm just a humble virtual assistant.
SEBASTIAN: Humble no more, Siri is moving beyond the iPhone and iPad. Apple is expected to announce she'll be part of a new, improved Apple TV.
And she's already integrated into Apple Music.
WOLFF: When you expect voice command and augmented reality to factor enormously into all consumer electronics futures, Apple has to be at the
forefront of this.
SEBASTIAN: Apple has to be at the forefront of every trend in tech. And with over a billion requests a week, Siri may be a reliable way to keep
this up.
SIRI: Who me?
SEBASTIAN: Claire Sebastian, CNN New York.
(END VIDEO CLIP)
QUEST: All will be revealed tomorrow. In the meantime, Samuel Burke has been visiting an Israeli company that's been pioneering gesture control
technology. That's a very fancy way that I can play Samuel's report to simply going (GESTURES TOWARD TV).
(BEGIN VIDEO CLIP)
ANNOUNCER: The greatest advance in television is an amazing new wireless wizard electronic remote control.
SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: The TV remote control -- cutting-edge technology of a bygone era. In living rooms since 1950, now
replaced by this -- your hand.
GIDEON SHMUEL, CEO, eyeSIGHT: Oh, I'm just turning on my TV.
BURKE: Today companies are looking at gesture-controlled technology to disrupt the way you interact with your TV and your entire home.
eyeSight is an Israeli startup leading the charge with a small gesture- controlled set top box it calls singlecue. The CEO barely lifted a finger to show us how it works.
SHMUEL: Just click it.
BURKE: Like that.
SHMUEL: Yes
BURKE: You use your finger to scroll and then pinch to click which device you want. Then you scroll to a setting like volume and start clicking up
or down. Is it a camera or it is a sensor?
SHMUEL: Today they are the same. It's the kind of camera you find on a mobile phone but we don't use it take pictures. We use it to find an
object in space so your hand or finger is an object and then track the object.
BURKE: I can turn up Christiane?
SHMUEL: Yes.
BURKE: I can turn down Christiane - something that I never do in real life. Gesture sensors had a major breakthrough in 2010 when Xbox brought
the connect into millions of homes. BMW is demoing hand gesture sensors to control the air conditioning and
radio on dashboards. Singlecue bills itself as first to market with fingertip-level recognition to control virtually anything in our homes with
a cord or a Wi-Fi connection.
SHMUEL: So everything around your TV, cable box, streaming devices and then there's the new family of products - your thermostats, smart lights,
smart locks.
BURKE: The potential is great. One group believes gesture recognition is a more than $23 billion market.
UNIDENTIFIED MALE: So I just hold it with my hand?
BURKE: Others are more skeptical and see confusion ahead.
UNIDENTIFIED MALE: Every single gadget that you have is going to have a different way of controlling it now where you might have to change the
channel by going like that on one TV but another TV you have to change the channel by going like that. And you're going to have to learn that for
every single device.
BURKE: Despite concerns, gesture control, once only imaginable in science fiction films like "Minority Report," could be set to enter many parts of
our lives that this device never did. Samuel Burke, CNN Herzliya, Israel.
(END VIDEO CLIP)
QUEST: Now some urgent news to bring you that we've just received. The chief executive of United Airlines, the second largest carrier in the
world, has resigned effective immediately. [16:55:03] Now CNN understands it's related to a federal investigation into
allegations concerning the Port Authority of New York and New Jersey.
United has a major - it's biggest - hub is at Newark, New Jersey. The new chief exec at United's named Oscar Munoz as the CEO. He's already a
current director. He won't be the chairman. The chairman will - (inaudible) is to be Henry L. Meyer III who will be - serve - as the non-
executive chairman. United Airlines' chief exec, president and chairman seems to be effectively almost fired and been replaced immediately. We'll
have more in a moment.
(COMMERCIAL BREAK)
QUEST: A slightly different "Profitable Moment" tonight. News just in - the chief executive of United Airlines is resigning effectively
immediately. Now we understand that it's in relation to a federal investigation.
Also leaving the company is the executive vice president of communications and government affairs and the senior vice president of corporate
government affairs have also stepped down. This is what the company says, "The departures are in connection with the company's previously-disclosed
internal investigation related to a federal affairs with the Port Authority of New York.
But for a CEO like Jeff Smisek who'd been with United and before that Continental for many years, is somewhat of an extraordinary development.
The new chief exec of United is Munoz - Oscar Munoz - who comes from CSX, a major transportation company. In the hours ahead, we'll find out exactly
what it means, but it certainly seems as if - at least looks as if - they were fired. Exactly why and under what circumstances, that still has to be
disclosed. Big changes at the top of United.
And that's "Quest Means Business" tonight. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. Let's be together
tomorrow.
END
