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Quest Means Business

Markets Nosedive to End the Week; Oil Prices Continue to Fall; U.N. Security Council Votes on Syrian Civil War; Turing Pharmaceuticals CEO Steps Down After Arrest; New Economic Tensions Between Russia and Ukraine; Spanish Elections Amid Economic Uncertainties. Aired 4-5p ET

Aired December 18, 2015 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[16:00:00]

PAULA NEWTON, CNN HOST: Get ready for the Christmas cliches. The Grinch sold this one. So much for the Santa Claus rally. Markets are nose diving

to end the week. Thanks goodness, of course, it's Friday, the 18th of December.

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(BEGIN VIDEO CLIP)

NEWTON: Tonight, Christmas cancelled, Wall Street falls into a trading tail spin. You think you've had a bad week, first he was arrested now Martin

Shkreli loses his job. And can't pay won't pay.

Ukraine says it will default, that's right, default on a Russian loan. I speak to Ukraine's Finance Minister. I'm Paula Newton in for Richard Quest

and this is "Quest Means Business."

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NEWTON: Good evening, this is an extremely busy news day, more business news to come today but we do want to keep you up to date with events at the

United Nations.

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NEWTON: Now a meeting on the U.N. Security Council is about to begin on Syria. They're meeting to vote on a resolution that will find a political

solution to the country's civil war. Now it's being chaired by U.S. Secretary of State John Kerry when he begins to speak. We'll bring that to

you live and we'll continue to update on what goes on there at the U.N.

(END VIDEO CLIP)

NEWTON: Now to the markets, as we were telling you, staggering over the finish line, absolutely stumbling. Maybe they're all at the Christmas

party. It's been absolutely a turbulent week of trading. More big losses to finish a week that was historic and at times very chaotic for financial

markets.

(BEGIN VIDEO CLIP)

NEWTON: Here's how the big board closed. U.S. Markets slumped for the second straight day. But what a slump. I mean the Dow closed down more than

2%, closing at some of the worst levels of the day and it caps off a week of big swings on the Dow after big gains earlier in the week. And wow, does

that seem like a lifetime ago? It was when the Fed hiked rates, the market went up.

(END VIDEO CLIP)

NEWTON: Tim Anderson from TJM Securities joins us now live from the New York Stock Exchange. I mean Tim, what do you have to say for yourself. I

watched the momentum on that selloff this afternoon, are they just -- should we not get worried? They're just taking money off the table right

now. It's the end of the year.

TIM ANDERSON, TJM SECURITIES: Paula there's a little bit of everything going on. It's a major option expirations day, it's a major quarterly and

annual S&P rebalancing day. And oil continues to be under pressure and I think really that's the dominant force the last couple of days.

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ANDERSON: Much more so than the Fed decision. The issue with oil is we all know that we're spending half of what we were a year ago to put gas in our

tank but what we don't know is all of the collateral damage that might be going on in the economy reverberating through a world of $35 oil.

And the market hates things it doesn't know because it just has a problem modeling it. So you know really it was a big round trip this week. The

intra-day low on Monday was -- on the S&P 500 was 1994. We just closed at 2005. So we're pro - you know we might test that 1994 level again next

week. That's where we had a very strong bounce off Monday which seems like a long time ago. It was really just last Monday.

NEWTON: Look Tim, I take your point and volatility is not all bad, I mean investors can really make some money off of that.

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NEWTON: But what do you think it's going to take for investors to regain some confidence for that trading floor where you had to regain some

confidence? I have heard more whispers about recession this week than I have pretty much the entire year.

ANDERSON: Well, you know, I hate to just say the same thing over again but investors really want to have a - we have to see where we start to form a

bottom in oil. Because if we can feel like OK at the $34 level or the $32 level or right here at the $35 level, if we hold it two or three times and

that may take a couple weeks, then investors will say OK, well that's the level for now, I can put that into my model.

And also another thing to keep in mind is December is typically one of the stronger months of the year. As scary as some of the action has been, so

far in December many times most of the gains come in the last two weeks. Now, there's really only seven and a half trading days left but I think

we've seen in the market this year sometimes a lot can happen in seven and a half days.

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NEWTON: Yes, It better happen, Tim, we're underwater on the Dow and I think a lot of people are looking for some relief in 2015.

(END VIDEO CLIP)

NEWTON: Important points you look into and we'll watch that oil play for sure. Thanks a lot, Tim.

ANDERSON: Thank you.

[16:05:00]

NEWTON: Now, perhaps we should have expected big moves on the Dow today. It is quadruple witching day. There she is. That refers to the third Friday of

every March, June, September, and December and that's the expiration date of various stock index futures, stock index options, stock options and

single-stock futures.

Now investors must close out their positions. They have to close them out today and that's basically what we're talking about. Now that brews

increased volatility, bakes it into that market as we mentioned there have already been triple digit swings every single solitary this week.

Double, double oil and trouble, mix in falling crude prices and they are down 15% this month alone. And then let's throw in a little dash of action

from the Central Banks; the markets are living in a new reality after the Fed raised rates on Wednesday.

Meanwhile, Japan's Central Bank goes the other way and launches new stimulus. I'll add that was a big surprise. Rick Rieder is Chief Investment

Officer of Fundamental Fixed Income at Black Rock. He is live for us here in New York.

Rick, again I was just talking to Tim about all of to this volatility. I mean if I ask you where's the safe harbor here, because I haven't heard a

lot of people talk about that i it's not bonds, is it? It's not stocks, is it? Where the heck is it?

RICK RIEDER, CHIEF INVESTMENT OFFICER, BLACK ROCK: No, I think there are opportunities in the world in the fixed-income markets. Listen I think - I

think what markets are reacting to is you have an economy that's been operating at a pretty solid pace I would argue in the U.S.

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RIEDER: That is, it is starting to slow which is ironic a bit in terms of the - in terms of the Fed starting the program today. Where is there safety

in the markets? I would argue that long end interest rates in the U.S., long municipal bonds when the Fed moves what normally happens, we think

will happen, will the yield curve flattens, meaning long end interest rates stay fairly stable.

We also like rates in other parts of the world, as you described, in Japan or in Europe. We have policy that is going to be easier than it's been -

than it's been over the last couple years or continuing to be easy so we think those interest rates will continue to decline. So that's where we're

looking for opportunity. As well as parts of the - of the yielding markets like commercial mortgages that we operate in.

(END VIDEO CLIP)

NEWTON: Interesting. Quadruple witching day is always a good day to talk to you about liquidity. We've heard a lot about that in the last few weeks.

Does that bother you? And some people have said that liquidity could start to become more of a problem down the road.

RIEDER: Yes, so I think liquidity is a double-edged sword. I mean one of the things, one of the benefits to markets that are less efficient is it

provides real opportunities, some of what you're seeing in markets today is a premium being paid for people that step up to buy bonds in the

marketplace, buy any assets in the marketplace. So it's one of those we have to be thoughtful about where you take advantage of opportunities.

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RIEDER: There are markets that are quite efficient. I mean, the amount that trading in parts of the - of the rates markets, or the government markets,

the ETF markets, there's still pretty significant volume and liquidity there. So we operate effectively then look for specific areas where we can

pick up opportunities where people are just - are looking to exit certain securities.

NEWTON: So we don't normally do this on the show but why not? It's the end of 2015.

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NEWTON: In terms of a - if you're just an investor, you're out there, do you leave it in, do you put some money to the side, do you wait to see what

2016 holds? I mean what would you tell people?

RIEDER: So I think we're in one of those environments where you have to diversify and you have to be flexible about where you take advantage of

opportunities around the world. I do think that when you think about the last few years I think people underestimate -- everybody talks about the

Fed and where the Fed keeps the fed funds rate. But interest rates have been extraordinarily low across the credit markets and have supported the

equity markets.

We think equities are still going to be OK, but upside is going to be harder I would argue in 2016. So we look for places you can diversify your

portfolio. We talked about long-end municipals; we talked about parts of Europe where you can get interest rate risks. I think it's diversify, have

some balance in your portfolio, something we like to think about today is you can actually get income in some areas of the bond market and even parts

of the high-yield market which are attractive today.

I think income and if you can create 4% to 7% income in some of the assets in a world next year where maybe not that much upside which you're seeing

the equity markets react to today is where you are going to have a fruitful portfolio going forward.

NEWTON: Yes, I would take 4% to 7% no matter how it comes, income or not, just for the record. I'm sure a lot of people around the world would.

I mean, what is one spoiler for here do you think? Well what could really spoil any kind of gains right now looking to the future?

RIEDER: So I think - I mean one of the things it's volatility across markets and anything that hits, I mean you know, we keep -- I would say

there's three or four things on the radar screen that are pretty important.

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RIEDER: You know one is clearly oil prices. By the way, oil prices falling is actually good for the U.S. economy. And I know there's some ambiguity

around that, but there shouldn't be. It's good for the U.S. economy but it does - it does create a dynamic in the world where you have a lot of

economies that are sensitive to it. Global growth is going to be slow so we have to watch what happens in terms of global growth, big deal. China being

a very big part of that going forward and -- because China is literally 65% to 70% of the commodity demand in global trade so keep an eye on China,

keep an eye on the Mid East obviously where oil price change has a big effect.

And then watch for volatility around all these - all these markets that I think are going to be a big deal going into next year. I don't think we're

going to move to an easier market in '16 than we had in '15.

NEWTON: Oh gosh I wish you had something else there. But OK, fair warned. Thanks so much and have a great weekend, I appreciate it.

RIEDER: Yes, thank you, appreciate it.

NEWTON: European stocks, also the Fed-inspired rally lost steam on that side of the Atlantic as well.

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NEWTON: Concerns over oil and a bit of profit taking ahead of the holiday season so a selloff in the region. Now the biggest losses as you can see

there were in Frankfurt, stocks in Paris didn't fare much better.

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NEWTON: Now shares in passenger cruise line though, that firm Carnival bucked the wider-market trend to close the day more than 4% higher. I now

it's extraordinary isn't it. That's after the company posted better-than- expected fourth-quarter profits.

Now earlier I spoke to Carnival's Chief Executive Arnold Donald and I asked him what he thinks is the major contributor to this recent success.

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ARNOLD DONALD, CHIEF EXECUTIVE, CARNVIAL: Yes, I inherited a great company with 120,000 passionate enthusiastic and committed employees. So a great

foundation to build on. And What we've done over the last couple years is create additional demand through all the efforts of the brands and some

corporate activities we engaged in, a super bowl ad campaign, the launch of a new brand was generated, lots of impressions and kept cruising and

consideration. Lots of hard work exceeding guest expectations on board the ships. And through those things we've been able to increase on-board

revenues as well as increase our ticket prices well below what the equivalent land-based vacation is in terms of pricing but still better

pricing, you know more appropriate for the value we bring. And so we've seen some good results.

NEWTON: And yet you know just a few years ago some would have said that cruising was done, that the brand was damaged, you guys were coping with

illness, disabled ships. I mean in terms of the turnaround in image, and I know that your company is doing a lot of work in terms of its ships and

certainly how safe they are each and every day, the branding, how difficult was that in order to convince people to continue to book those cruises?

DONALD: Well, you know those that had cruised before, they knew and they continue to cruise. The challenge for ourselves and for the industry has

always been to attract the new to cruise. You know, those who for various reasons, different myths that they believe have kept them from cruising.

And we've been very successful lately in addressing that and we need to continue to do it and we've done it on a global basis. The industry is

doing well but we are the largest in industry as you know and no doubt you know we're helping to lift the industry and we're proud to do that.

NEWTON: And you talked about continuing to lift demand. What do you think is going to do it for you in the year going forward in terms of keeping --

getting new people on your - on you cruise ships or inviting others that have been there before to keep booking?

DONALD: Well we have to keep news -- cruise in the news. And so we have four new ships coming next year and those are very exciting.

We have the (inaudible) for our Holland American lines, the Carnival Vista for our Carnival Cruise line. We have the Seabourn Encore and then the Aida

Prima for our Aida line.

So that's four new ships gives us lots to talk about. Additionally we have so many new features across the brands; it would take a bit of time to go

through them all. But new entertainment venues. We have new chefs; Thomas Keller is the chef for the Seabourn line with his per se and French laundry

restaurant profile. Lots of new chefs across and then each brand has many activities.

We have some T.V. programs in the U.K. We have battle chefs, so there will be five chefs well known in the U.K. overseeing folks who are going to

compete on board the ship and be judged by those chefs. We have a number of other programs out.

So our goal is to show how great cruising is what a great vacation value and great experience it is. Keep in the front of people so that when

they're thinking about holidays and they're doing vacation planning they consider a cruise.

NEWTON: But you can't even call that a comeback. They had all those problems on the cruise lines and really didn't skip a beat financially.

Now, one day after he was arrested over fraud allegations, biotech bad boy Martin Shkreli continues to make headlines.

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NEWTON: We'll tell you what he's done this time.

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(COMMERCIAL BREAK)

[16:12:00]

NEWTON: So breaking news here at CNN. As the United Nations now, we head to the floor where the U.N. Security Council is voting now on a resolution to

address the Syrian Civil War. Let's listen in.

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JOHN KERRY, U.S. SECRETARY OF STATE: I put this draft resolution to a vote now. Will those in favor of the draft resolution contained in document

S/2015/996 please raise their hand? The result of the voting is clear. It is -- the draft resolution has received 15 votes in favor and therefore the

draft resolution has been adopted unanimously as resolution 2254 of 2015.

I will now make a statement in my capacity as Secretary of State of the United States.

Mr. Secretary General, special envoy De Mistura, distinguished colleagues, I want to begin by thanking the other P-4 members who joined together to

help fashion this resolution and who spent time this morning working with our colleagues in order to bring us here this afternoon. Plus our non P-4

member, Germany, for whom we are grateful for their participation also.

I want to thank all the members of the council for coming together at the late hour and I thank you in particular Secretary-General Ban, and special

envoy De Mistura for your leadership and your commitment.

I also want to thank foreign minister Lavrov for his collaboration and efforts over the course of both Vienna conferences to produce the two

Vienna communiques that are integrated into this resolution here today.

By approving resolution 2254 today this council is sending a clear message to all concerned that the time is now to stop the killing in Syria, lay the

ground work for a government that the long suffering people of that battered land can support.

After four and a half years of war, this is the first time we have been able to come together at the United Nations in the Security Council to

embrace a road forward. During that time, one Syrian in 20 has been killed or wounded. One in five is a refugee. One in two has been displaced. The

average life expectancy of Syria has dropped by 20 years.

We need to reverse the course, and that is the council's goal here this afternoon; to put an end to the indiscriminate bombing, the acts of terror,

torture and bloodshed. And our shared task is to find a way to make that happen.

[16:20:05]

In support of this objective, President Obama has said for my country three interrelated goals. The first is to support our friends and to ensure the

instability created by the civil war does not spread further beyond its borders. And that is why we're providing a report amount of humanitarian

assistance. And it why we're doing more to help Syria's neighbors to help strengthen their capacity to safeguard their territory and to defend

against external threats.

Second, we are determined with our coalitional partners to degrade and defeat the terrorist organization known as Daesh. In the past half year,

the coalition and its partners have worked with Iraqi forces in liberating Tikrit, freeing Sinjar, removing terrorist commanders from the battlefield,

cutting off terrorist supply lines, hitting their oil facilities and depriving Daesh of more and more of the territory that it wasn't

controlled.

Now we are intensifying the pressure, helping our Iraqi partners retake most of Ramadi to squeeze supply routes into Mosul and we are pushing ahead

into northern Syria, assisting our partners along the Iraqi/Syrian border and on the recruiting and propaganda efforts.

Further, as evidenced by the finance ministerial that was held by this chamber yesterday we are multiplying our efforts to cut Daesh off from the

revenue sources that support its depravity, its criminality. But the truth is nothing would do more to bolster the fight against the terrorists than a

broadly supported diplomatic process that gives the Syrian people a real choice. Not a choice between Assad or Daesh but between war and peace,

between the violent extremes and newly empowered political center.

That is why we have joined with so many of you in support of an urgent diplomatic initiative. Again and again countries, not just around this day

as today, but countless meetings in various parts of the world have reaffirmed the notion that there has to be a political settlement.

Well, this is the test. This is why we've joined here in a broader, more action-oriented effort than ever before attempted regarding Syria to

isolate the terrorists and to put Syria on the road to a political transition envisioned by the Geneva Communique, now embraced by the

international community and the United Nations Security Council Resolution.

As the council's action today reflects, we have made important progress in recent weeks. And progress that should give us all fresh grounds for

encouragement. Last month in Vienna, the United States and other members of the international Syria support group agreed on a series of steps to stop

the bleeding in Syria, to advance a political transition, to isolate the terrorists and to help the Syrian people to be able to begin to rebuild

their country.

Last week in Riyadh with the support of his majesty King Salman and his government, a broad cross section of Syrian opposition representatives came

together to form a high committee for negotiation. Under the resolution approved today, the purpose of those negotiations between the responsible

opposition and the government is to facilitate a transition within Syria to credible, inclusive, non-sectarian governance within six months.

The process would lead to the drafting of a new constitution and arrangements for internationally supervised election within 18 months. I

might add Geneva never had those dates. It is the Vienna process and the Vienna Communique that produced a six-month and 18-month time horizon. And

it is the Vienna process that also has embraced the cease-fire concept as well as embraced a set of principles and values about the shape that a new

Syria might be able to take as directed by Syrians for Syrians.

It's our hope that a nationwide cease-fire can go into effect excluding only Daesh and Al Nusra and any other group that we might decide at some

time to designate.

So I would close by saying we're under no illusions about the obstacles that exist. There obviously remain sharp differences within the

international community, especially about the future of President Assad. We have emphasized from the beginning that for this to work the process has to

be led and shaped and decided and implemented by the men and women of Syria.

[16:25:06]

KERRY: It cannot be imposed by the outside and we are not seeking to do so. But we've also seen in recent weeks in Vienna, in Paris, and in other

capitals and then today here in New York an unprecedented degree of unity on the need to negotiate this political transition; to defeat Daesh and

then, indeed, to end the war.

The resolution that we just approved is a milestone because it sets out specific concepts with specific time frames. Accordingly, we need to work

hard together to help these political talks to go forward, to prepare for a cease-fire and to encourage all the parties in Syria to participate in good

faith.

In closing, let me just underscore the urgency of our task. Like many of you, I've met with refugees in and out of refugee camps. I've met with

survivors, as you have, met with caregivers as you have, met with many of the people who have been on the front lines of this conflict. I've talked

to women who've struggled to hold their families together despite constant danger, bitter cold, shortages of food, and great danger. I've heard the

blood-chilling stories of doctors and relief workers who have been dealing with humanitarian trauma on a daily basis, month after month, year after

year, now into the fifth year.

I am aware, as everybody in this chamber is of the atrocities that have been committed and are being committed even as we sit here this afternoon

and being committed too often against innocent civilians.

Looking ahead, we know that Daesh can never be allowed to gain control in Syria so we have a global imperative here to deal with a terrorist entity

but also to end the civil war and to bring legitimacy back to the governance of Syria.

President Assad in our judgment -- and not everybody shares this -- but the majority of people in the ISSG believe that President Assad has lost the

ability, the credibility to be able to unite the country and to provide the moral credibility to govern it into the future.

So I say not as a matter of ideology, not as a matter of choice but purely as a matter of reality, as a matter of fact given the situation on the

ground that if the war is to end it is imperative the Syrian people agree on an alternative in terms of their governance. That logic is compelling

and it provides the unifying principle for most people in our effort going forward.

We have a lot of distance to travel; some would say miles to go. But the truth is in the past two months we have started from a standstill, from a

non-existent process to have three meetings of the ISSG and now a United Nations Security Council embrace of a process. We have agreed on a plan of

action and the council's vote today is an important boost on the road to a political settlement. It's a particularly important step because it

reaffirms this body's endorsement of the Geneva Communique about the transitional governing body with full executive authority. And it also

endorses the progress and the statements that we made in Vienna to set a timeline, a timeline for transition, a timeline for election and standards

for that election; the highest standards under the supervision of the United Nations for a free, fair, transparent and accountable election.

It also brings fundamental values and principles that can guide the shaping of Syria by Syrians, for Syrians. So let us proceed with confidence from

here and the determination to end this war, eliminate the terrorist threat and enable the people of Syria to return safely to their homes.

I now resume my function as President of the Council and I give the floor to his Excellency, Mr. Sergei Lavrov, Minister of Foreign Affairs of the

Russian Federation.

SERGEI LAVROV, MINISTER OF FOREIGN AFFAIRS, RUSSIAN FEDERATION: (As translated): Thank you, President. Colleagues, first and foremost I would

like to thank John Kerry for his initiatives to conduct today in New York the third meeting of the ISSG.

This has been a time to meet in this room. The meeting of the ISSG underscored the commitment of all its participants to the Vienna process.

The resolution just adopted

[16:30:00 -16:35:20] (SERGEI LAVROV, RUSSIAN MINISTER OF FOREIGN AFFAIRS, SPEAKS AT U.N. SECURITY COUNCIL)

[16:35:21] NEWTON: You have been listening to the U.N. Security Council just after they voted unanimously to adopt a new resolution on Syria

What is important about this is that they have a six-month timetable in which in their words they're going to get a credible, inclusive - "and hope

to get a credible, inclusive and sectarian governance system in place in Syria."

We're talking about hopefully what will materialize in the next few months which is an inclusive ceasefire.

We have heard from John Kerry, we have heard from Sergey Lavrov, the counterparts there from the U.S. and Russia, arguably the most important

players at the table. We bring in our Elise Labott who joins us now from the United Nations.

She's been watching this with me. I mean, look Elise, what was different here that we heard is that finally they're agreeing to disagree.

John Kerry was very clear. They still believe Assad must go but they're willing to put that aside for right now.

And Sergey Lavrov saying quite clearly, look, we're here because this is a response finally we've gotten away from that reaction that we need to

attempt to impose a solution from the outside on that country. Elise, you've been following this for so many months now. Do you think they're at a point where, yes, we will have a productive process to a cease

fire?

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: I think that you can have a productive process to a cease fire, Paula, if the Russians are willing to

put pressure on their client -- in effect Bashar al Assad -- to at least stop the barrel bombing of his people.

I mean, it's really hard to have negotiations when one party is not playing by the rules and the other party is basically having their whole

constituency bombed by the party that they're sitting down at the table with.

So I think that if they were willing to have some kind of initial cease fire while the talks go on, you know, that could lead to some productive

political process. But unless the Russians are willing to say to Assad - and to the Iranians

obviously who were also now at the table - look, cut it out. You need to play constructively here.

I don't see how you can go forward. I mean, look, today's U.N. Security Council resolution very significant. You know that this council has

bitterly divided - four vetoes on a resolution about a political way forward.

They voted on some things about humanitarian access, about chemical weapons. But really this is putting the Syrian peace process under an

international umbrella. The U.N. has signed up to helping out here and it's really just about

whether, you know, Russia and Iran are willing to at least see where this goes and not have any preconceived notions.

And that's why the U.S. has kind of softened its talk about Assad going right now. They do hope that at the end of this political transition that

he'll fade from the scene. The question is will he be able to sit for another term in these elections that are supposedly going to take place in 2017.

These are the things that haven't been decided and also hasn't - what hasn't - been decided is what groups can take part in these talks and what

groups are considered a terrorist groups. I mean, while this resolution is a good step forward, it leaves out a lot of really key questions about the fate of Assad and which groups will be at

the table.

NEWTON: Yes, we could write quite a significant tome on the things that were not talked about here at the table.

They're just trying to get to a cease fire at this point. Quickly, Elise, in terms of the U.S. officials you speak to, do they see

some different posture from Russia? Especially with all the shuttle diplomacy that's been going on in the last few weeks.

LABOTT: Well yes and no. I mean, Secretary Kerry is always the eternal optimist. The fact that the Russians are at the table with Iran, with

Saudi Arabia and they're talking about a political transition is very positive.

But, you know, on the key issue of Assad, they still haven't moved. And so and they are also playing hardball on what groups to allow at the talks.

So they see movement in some areas, some movement - some, you know, kind of playing hardball on the others.

But I think that they feel that this process is inching forward and so they feel like this is the most - really the only way to try and stop the

bloodshed, Paula.

NEWTON: Yes, and in the meantime, Syrians begin another winter. I take your point, Elise, this is significant. We saw vetoes before and

now we see a unanimous resolution being passed. Our Elise Labott there at the U.N. who continues to follows this story for

us. And we will be right back with more of QUEST MEANS BUSINESS in just a moment.

(COMMERCIAL BREAK)

[16:42:31] NEWTON: Martin Shkreli has stepped down as CEO of Turing Pharmaceuticals after being indicted for securities fraud on Thursday.

Now the company's chairman is taking over an interim - is taking over now on an interim basis.

Shkreli is known for raising the price of an AIDS drug by - OK, this is true - 5,000 percent while at the helm of Turing.

His legal troubles actually stem from things he allegedly did at another biotech company and that's Retrophin where a U.S. attorney says he

basically ran a Ponzi scheme. Now after posting bond Thursday, he tweeted, "Thanks for the support." Although everyone is not supporting him. Take a look at this - the FBI

joked it didn't seize the famous one-of-a-kind Wu-Tang Clan album that Shkreli bought for $2 million.

That tweet was retweeted 25,000 times. Clare Sebastian joins me now with a story that you just can't make up.

Clare, this whole resignation, was this expected - he basically had no choice?

CLARE SEBASTIAN, CNN PRODUCER: In a word, yes, Paula. It was expected. Obviously Turing Pharmaceuticals as we know not embroiled in the latest

legal allegations. That concerned Retrophin, the company he led before that.

But there's no way they're not tainted by this, of course they are. Of course they are. So this company's getting out in front of this now.

And obviously we had the SEC saying yesterday in their press conference that the sanctions that they want to put against Martin Shkreli, that could

have an impact on his ability to upgrade going forward. They said they wanted to bar him from operating in the securities industry

at all. They wanted to bar him from ever working as the CEO or any officer of a public company. So, yes absolutely, this is expected.

This company very much getting in front of a PR disaster that really is only just beginning. This guy, you know, obviously Martin Shkreli could

get 20 years in prison (inaudible).

NEWTON: And it will be a hard-fought long legal investigation and court battle.

The social media vent to this. I mean, just seeing him the way he came out of court, I mean, when he posted bond -- $5 million - he came out as

something that looked like a Darth Vader get up. He had a hoodie on, in black. I mean, you could not - Hollywood could not

create a better villain here even if he is completely innocent.

SEBASTIAN: He is the villain, Paula, the social media loves to hate. Social media has absolutely lit up over his arrest and over the events

following that. One of my favorite tweets, I'll read it out to you - "On the fourth day of Christmas my true love gave to me a warrant for Martin Shkreli."

NEWTON: (LAUGHTER).

(CROSS TALK)

SEBASTIAN: I mean, you can't make this up - people tweeting whether his - you know - that his bail should have been jacked up by 5,000 percent

referring to the drug Daraprim that he - his company -- Turing Pharmaceutical was there, he was jacking up 5,000 percent.

SEBASTIAN: He's a villain they love to hate. And this is a measure of course of how angry people still are about the fact that the company jacks

up that drug and the fact that there was very little remorse shown about that.

[16:45:09] So, you know, it's really, it's a very interesting phenomenon. And his followers as well have gone up. He had 27,000 followers when he

was arrested yesterday morning. He's now up to around 33,000. So people can't get enough of this.

NEWTON: It's incredible. Two small points to bring up to you - they're probably actually large points. One, drug companies were actually

apparently drug executives relieved - we want this bad boy. He makes us look bad and we want him out.

And the other people is - you know - a lot of people have been speculating including me.

If you're the prosecutor's office and you've got a stack of files and you could prosecute all these people, perhaps his prosecution just moved to the

top of the list because he really was a hated person in so many different circles, notwithstanding what this court process - what the result of this

court process will be.

SEBASTIAN: Absolutely. He's been very much in the public eye ever since the news broke in September about the fact that Turing Pharmaceuticals

jacked up the price at the company. But he is a very interesting character. There's this dichotomy, Paula,

between the social media exhibitionist that we see and the man who, you know, has a high level of intelligence. You know, he essentially taught

himself how to invent drugs. I did a search on the U.S. Patent Office. I found two drugs for neurological treatments -

NEWTON: Wow.

SEBASTIAN: -- where he was listed as the inventor. You know, he's a very interesting character.

And, you know, it may be - we don't know - that there were more reasons behind his - you know, his arrest.

NEWTON: Yes. I mean, this is a person who's dropped out of school but is essentially as you've just pointed out, brilliant.

Clare Sebastian, thanks so much for putting that story into perspective for us, especially with everyone talking about it, in New York and otherwise.

Thanks, Clare, I appreciate it. And we will have much more of QUEST MEANS BUSINESS in just a moment. First, a highlight from "Make, Create, Innovate."

(COMMERCIAL BREAK)

NEWTON: Tonight a new wave of economic tension between two uneasy former Soviet comrades.

Ukraine says it will not pay a $3 billion bond it owes Russia by its deadline on Sunday.

Now the Kremlin says it will take Ukraine to court if it doesn't pay. Moscow and Kiev are locked in an acrimonious dispute over Russian military

involvement in Eastern Ukraine. Russia is Ukraine's lone holdout creditor in an $18 billion debt restructuring program.

Now the deal was brokered earlier this year as part of the IMF's $40 billion assistance package for the war-torn country.

And now that whole deal looks shaky after the Ukrainian parliament rejected a new tax code in a draft 2016 budget.

Now earlier I spoke to Ukrainian Finance Minister Natalie Jaresko. I asked her if the Russian bond dispute would actually wind up in court.

(BEGIN VIDEOCLIP)

[16:50:07] NATALIE JARESKO, UKRAINE FINANCE MINISTER: We did a temporary suspension of payments today and we had to do that because the payment

coming due on the 21st of December we cannot pay and remain in our IMF program.

We have financing obligations in that IMF program that we need to meet. The targets could not be met if we were making full payment on the December

Eurobond. In addition to that, making full payment would breach the contractual obligations that we have to the other Eurobond creditors that just recently

completed a debt restructuring.

So it's - this in no way prohibits us from trying to reach a consensual agreement alongside the temporary suspension of payments.

But the temporary suspension was necessary before the December 21st payment date.

NEWTON: There seems to be some confusion. The IMF seems very concerned right now with the fact that there was a failure to pass any kind of a

budget measure yesterday.

JARESKO: I think the IMF's concern is that the tax reform submitted by the government and approved by the National Reforms Council and - which is led

by the president of the country - was not put on the agenda and that forms the revenue line of the budget that was put on the agenda.

So there is a bit of a disconnect in what's happened. The parliament has decided not to put on the agenda for today the tax reform and instead to

try and take the revenue sources and put them on the - into the budget through another means.

That gets very complicated and there is a fear that something might get dropped in what has been a very difficult, as I said, matching of revenues

and expenditures at a time when we're cutting taxes and yet financing our military and financing larger social expenditures while maintaining a

smaller deficit than ever of 3.7 percent of GDP. That -

NEWTON: OK, but -

JARESKO: -- combination of measures is complicated.

NEWTON: OK, but now you're getting to the heart of the matter. At this point, it may be complicated, but already having a lot of IMF funding that

could be held up because of this.

JARESKO: Well, I think that the parliament, the president, the government - they're all united in agreeing that they want to meet the IMF target of

3.7 percent. I think the devil is always in the details. There are a number of

expenditure cuts which are more than expenditure cuts, they're the beginning of very important structural reforms in our IMF program.

(END VIDEOCLIP)

NEWTON: Spanish voters are heading to the polls this weekend for the most uncertain national election in decades.

Now the outcome could disrupt the economic policies that have helped Spain pull out recession.

Richard spoke to Spain's economy minister and asked him about the progress the Spanish economy has made in recent years.

(BEGIN VIDEOCLIP)

LUIS DE GUINDOS, SPANISH ECONOMY MINISTER: I think that when you look to the turnaround of the Spanish economy has been quite remarkable. I think

that it has been phenomenal I think that this acknowledged by everybody and we have (inaudible) to see

the fruits of their policy and (). This has not been easy. We had to, you know, to reduce our public deficit, we had to withhold our labor code, we

had to restructure of our banks, we have to live our lives - markets. But as I said before, we have started to reap the fruits and to reap the rewards of this policy and now we have been growing for two and a half

years. And the Spanish economy is going to create this year more than 600,000 jobs. And I think that this an important turnaround. It's something that

is remarkable and for sure that the Spanish population that is mature, that is wise, will recognize this modification of the economic environment in

our country.

RICHARD QUEST, CNN HOST: Do you expect the separatist argument to feature large finally in this election?

Obviously post-Scotland's referendum and of course the U.K.'s referendum - the whole question of separatism in Spain has been raised.

But the prime minister has been very resolute in, if you like, shutting that down. And yet at a time of an election, it is always a moment when

those who are separatists can go to the ballot box and vote strongly against.

DE GUINDOS: But you have to be reminded the two mainstream parties - mainstream parties Spain this is the both the Popular Party and the

Separatist Party, are clearly, you know, against the independence of Catalonia.

And at the worst, you know, one of the newcomers, the Ciudadanos (ph) is also clearly against Eventianos (ph).

It was born in Catalonia and, you know, the agenda - the political agenda - of Ciudadanos (ph) is very clear against separatism.

So the result (ph) - they are majority in Spain, of the Spanish population, against secession, against independence.

Independence is out of the question. It's out of the question not only because of legal reasons, it is because it will extremely detrimental not

only to the Spanish population overall, but also especially to the Catalan population.

[16:55:09] So my perception is that the secession movement is going to fade away and that, you know, a rational approach to the problem of Catalonia

will prevail for sure.

(END VIDEOCLIP)

NEWTON: And there is more of QUEST MEANS BUSINESS right after the break.

(COMMERCIAL BREAK)

NEWTON: Now what would you do if you lost $32,000, and how would you feel if somebody actually returned that sum to you?

Well that's exactly what happened to one California family. Now, they were taking their money, the earnings from several businesses, to

the bank but the bank didn't have any safety deposit boxes - I don't think I've ever heard of that - so the family went to lunch at Applebee's

Restaurant instead and accidentally left the money there. Now thankfully an honest waiter found the pouch and so the story, of

course, thankfully has a happy ending. Now, the waiter refused a reward, but, oh gosh, I hope there was a big tip in there for him - for him or her.

There may have been some traders as well who have had that money gone missing from Wall Street on Friday, a reminder of what happened on the Dow.

Look at all the red. Stocks fell more than 2 percent, a drop of some 367 points and that's the fourth biggest decline of the year - what a footnote.

Investors seem to be losing confidence that the Fed has actually picked the right moment to raise rates.

European stocks, unfortunately, fell as well. Concerns over oil and a bit of profit-taking ahead of the holiday season saw a selloff in the region.

The biggest losers were seen in Frankfurt. Stocks in Paris, as you can see there, didn't fare much better.

And that's it for QUEST MEANS BUSINESS. I'm Paula Newton in for Richard. Thanks for watching. Have a great weekend. Stay with CNN.

END