Return to Transcripts main page
Quest Means Business
President's Gun Control Measures Increase Sales; Chinese Central Bank Attempts to Prop Up Stock Market. Aired 4-5p ET
Aired January 05, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00]
(BELL RINGING)
RICHARD QUEST, CNN HOST: A topsy turvy day on Wall Street. The movements were
fairly narrow and as you'll see later in the program up and down, up and down. And now hit the gavel. Oh I say that's what you call a robust gavel
on Tuesday the 5th of January.
(MUSIC PLAYING)
(BEGIN VIDEO CLIP)
QUEST: Tonight, gun shares hits all time high on Wall Street as the U.S. President calls for more gun control. Shanghai stocks settled down but it
comes at a cost we'll tell you what that was. And have a safe flight. That airline of course is now considered to be the safest in the world. We'll
reveal who else is on the list later in the program.
(END VIDEO CLIP)
QUEST: I'm Richard Quest. We have an hour together, and of course, I mean business.
(MUISC PLAYING)
QUEST: Good evening, there was an emotional plea from the leader of the free world to curb gun violence in America. The White House has unveiled a
new requirement expanding mandatory background checks for gun buyers. It all aims to limit the so called gun show loophole whereby small gun sellers
have been exempt from keeping sales records.
Speaking in Washington, President Obama allowed his passion and his well vented frustration over what he calls common sense reforms to come through.
He fought back tears as he recalled the gun massacres that have marred and marked his presidency. And now he's calling on the American people to act.
(BEGIN VIDEO CLIP)
BARACK OBAMA, U.S. PRESIDENT: All of us need to demand a congress brave enough to stand up to the gun lobby's lies, all of us need to stand up and
protect its citizens. All of us need to demand governors and legislators and businesses do their part to make our communities safer. We need the
wide majority of responsible gun owners who grieve with us every time this happens and feel like your views are not being properly represented to join
with us to demand something better.
(END VIDEO CLIP)
QUEST: The President talked about some gun owners there but others certainly don't like it. When the President talks about gun control and
every time he does, it causes a rally on stock prices of gun manufacturers. Come and look at what happened today.
(BEGIN VIDEO CLIP)
QUEST: Fascinating, absolutely Stum, Ruger & Co., were up 6.8%. Meanwhile Smith & Wesson have been up 11% and that's an all-time high for the
company. They raised their sales outlook after the bell. They have cited strong growth in markets. And what's interesting about this is of course is
the fundamental - the fundamental fear that eventually guns will be restricted and, therefore, more sales will happen now as people buy them
before any new laws are put into place.
But let's look at how many background checks actually are taking place at the moment. I want to show you this chart. This chart shows the number of
background checks, which of course is what President Obama is proposing. They are checks conducted through the FBI during the Obama presidency.
Now they ramp up the end of 2008, as you can see over there. That's when the President was elected in 2008. Then you've got in December 2012. You've
got the Sandy Hook shooting. And here you have a massive ramp up in the number of background checks as a result of the shooting of 20 elementary
school children who were murdered.
There are 2.8 million background checks that are taking place. You can see that here a lot more than when he started. And now last month after the San
Bernardino terrorist attack, gun control back on the agenda and a record month here of San Bernardino, 3.3 million background checks taking place.
Put this together, you've got the background checks that the President is wanting, you've got the loophole that he wants to restrict or close for
guns at small sellers and shows and you have this extraordinary share price rise up 11% for Smith & Wesson.
(END VIDEO CLIP)
QUEST: Cristina Alesci is with me. Good to see you.
CRISTINA ALESCI, CNN CORRESPONDENT: Nice to see you too Richard.
QUEST: This is a fundamental fear by the gun manufacturers that they are going to -- that guns will be restricted.
ALESCI: It's really a fundamental feel for the consumers of the guns and they rush out to get more guns, which is why we see background checks surge
after these mass shootings. As you indicated this is a pattern that Wall Street knows very well, right.
[16:05:11]
ALESCI: You talk about that record month in December. Well that was on the heels of Paris and then San Bernardino. Both of those experts analysts say
did contribute to that run up in December, a record month, the biggest month ever for those background checks.
(BEGIN VIDEO CLIP)
ALESCI: Now just to put additional context onto this, this is not just a national conversation. This is a conversation that is going on at the state
and city levels which also has gun owners very anxious.
(END VIDEO CLIP)
ALESCI: Because states and cities are putting additional controls on guns where the federal government isn't and that's causing background checks to
increase as well.
QUEST: OK, but this background checks as a barometer of the number of sales taking place -
ALESCI: That's right.
QUEST: -- the rest of the world finds it quite difficult to understand this peculiar to some might say, love affair that American has with its guns.
(BEGIN VIDEO CLIP)
QUEST: But the core of it is - the core is a fundamental right -- belief here that you can have a gun and you're going to get one because it's the
only way to protect yourself.
ALESCI: That's right it's really core to the constitution, it's the core to the American way of life.
(END VIDEO CLIP)
ALESCI: And it really strikes a chord. In fact President Obama today talked about listen, I know the constitution. I was a constitutional professor. I
know the constitution. I have nothing against the constitution. This was his words. But we can find a way to be safer about our gun laws.
(BEGIN VIDEO CLIP)
ALESCI: And what he said was look at the no fly list. There are people that can't fly an airplane that can buy a gun.
QUEST: Now, when we look at Smith & Wesson up 11%, and I think I'm (inaudible) I'm not a gun owner so I may have mispronounced that. Up 7% --
ALESCI: You got that right.
QUEST: -- thank you. What's driving that share price?
(BEGIN VIDEO CLIP)
QUEST: Is it the prospect of further sales as a result of this fear?
ALESCI: That's right. Wall Street is always looking ahead and you're absolutely right. It is seeing stronger background check numbers in the
future. In fact Smith & Wesson, as you said, executives are already saying we expect stronger gun sales. And we saw that guidance today - yesterday
and we expect to see more of it. This is not going to end.
Plus we have one of the largest gun shows that will take place in Vegas in just - just next week actually.
QUEST: Thank you.
ALESCI: And look at that, they are holding up against the S&P going down. So they're holding up in a bad environment.
(END VIDEO CLIP)
QUEST: Thank you.
ALESCI: Thank you.
QUEST: Cristina Alesci. The National Rifle Association, the NRA, has released its own statement and not surprisingly it's criticized the
President's push for gun control.
(BEGIN VIDEO CLIP)
QUEST: What they say is the American people do not need more emotional condescending lectures that are completely devoid of facts. The fact is
that President Obama's proposals would not have prevented any of the horrific events that he mentioned.
(END VIDEO CLIP)
QUEST: Joining us Grover Norquist, is the President of Americans for Tax Reform. He's been outspoken certainly against gun control and the
President's executive action. ]
Mr. Norquist, it's -- it's always lovely to have you on the program, sir, thank you for taking the time. The President is a constitutional scholar.
He knows his constitution and he says that his acts in his decisions and actions today are lawful.
GROVER NORQUIST, PRESIDENT AMERICANS FOR TAX REFORM: Well, he certainly is acting unilaterally. He could have come to congress and introduced
legislation. He doesn't have the support in the house or the senate. A lot of democrats have not been willing to support his efforts on gun control in
the past. And certainly in the States, we've been talking about it over the last 30 years. Not only sales and background checks, but another indicator
of where the country is on gun and gun ownership issues are that today there are 12.8 million Americans with active Conceal Carry Permits.
(BEGIN VIDEO CLIP)
NORQUIST: That means they have a permit to carry concealed in their car, in their purse, on their person. That number is from the spring. So it's
probably up another million and a half, they've been growing at a million and a half. More women adding to the concealed carry numbers than men each
of the last several years.
5%, 5.3% of the adult population in the United States has a conceal carry permit. That's up from almost 0% 30 years ago.
(END VIDEO CLIP)
QUEST: -- Let me - let me - OK, so taking your statistics onboard, if - look what it really comes down to is this, I mean we can pass the various
semantics of the legislation, but what it really comes down to is this. How -- what is your solution to reduce the number of violent gun deaths in the
United States if you do not reduce the number of guns in the wrong hands.
NORQUIST: Well two things. You want to reduce the number of guns in the wrong hands. You also want o to have guns legally available to citizens who
want to protect themselves.
(BEGIN VIDEO CLIP)
[16:10:10]
NORQUIST: There's a very strong study and book, "More Guns, Less Crime", by John Lott which walks through as each state passed concealer carry, Florida
for instance has 1.5 million Americans with conceal carry permits. Murders, rapes, robberies, significantly lower now that more people in Florida
honest citizens are armed than before. We've seen this in all the states that have passed shall issue concealed carry laws --
(END VIDEO CLIP)
QUEST: No, no, I understand - I understand the point you're making, but to prevent - but to prevent guns from getting into the wrong hands, what is
the Republican's preferred option? If you don't like President Obama's solutions, what's yours?
NORQUIST: Well, several things. First of all, you want to make sure that honest citizens have the right to self-defense. Two, you want to make sure
that real criminals go to jail for significant periods of time and that that's treated seriously. And then we also need to rethink how many people
we have in prison for crimes that aren't really crimes. We have police out there as in Ferguson giving tickets. There were 9,000 warrants for people
not payment of tickets in a city of 21,000 people in Ferguson. They turned the police force into a tax collection agency. We have been doing that to
too many police. They ought to be putting criminals in jail and not handing out tickets.
QUEST: So after - and forgive me that I don't remember the particular massacre that we were talking about. I think it was the church massacre
earlier last year, but in that particular - after that one, the President said that the United States has more violent gun deaths pro-rota than
anywhere else in the world added up. I mean, it's not even close.
Now the European Union, which has a population of roughly the same size as the United States has a minuscule number compared to the U.S. So are you
prepared to continue with this high level of violent gun death or do something about it?
NORQUIST: Well, first of all, several thoughts. One, when the government - when the President puts out statistics it would be -- he did
today make the observation that two-thirds of violent gun deaths are suicides.
So there's a little - there's a big difference between worrying about somebody breaking into your house and shooting you and people who
tragically make a decision on suicide. To add those in to crime statistics is an inflation that is less than honest in the presentation.
I do think that the most important thing we can do is to maximize human liberty and opportunity and allow citizens to protect themselves. The more
honest citizens with conceal carry, the fewer murders, the fewer rapes in the United States compared to other countries. And the President also does
something where he talks about other civilized countries, which isn't very nice to some of the other countries he's leaving out but there are many
more violent cities, towns, countries than the United States.
QUEST: I want to give you sort of this rare opportunity - this rare opportunity. You know to our viewers around the world who simply cannot
understand this American love affair with the gun. And the Second Amendment by definition wasn't part of the original constitution. It is an Amendment.
Therefore, it could be amended once again. So explain the American love of the gun.
NORQUIST: Sure. Well what it is is an American commitment to liberty and the First and Second Amendments, there were ten amendments put in; remember
there was an effort that opposed having those amendments in because they thought they were self-evident. They said you don't need to put in the
Second Amendment or the First Amendment, everybody knows those liberties are god given freedoms that every American has. Other people said, put them
in writing, trust me, you'll want this done. And the First and Second Amendments are central to maintaining a free society.
There are a lot of countries have lost their freedoms completely at times. Some have been lucky enough to regain them. The United States has not lost
its liberties and one of the reasons is the First Amendment and the Second Amendment and actually they go quite well together. An armed populous is
not going to be treated like subjects. They are going to be treated like citizens.
QUEST: Mr. Norquist, Grover, if I may, it's wonderful to have you on the program, sir, thank you.
NORQUIST: Good to be with you.
QUEST: Plenty more discussion on this issue on CNN this week. There's a special look at guns in America with President Barack Obama. Anderson is
hosting an exclusive - Anderson Cooper one-hour live town hall with the President and you can see it on Friday at 1:00 a.m. in London on CNN.
[16:15:15]
QUEST: your thoughts -- I think it is one of those days where we need to have a few tweets and maybe an odd bell or two (bell ringing). Your
thoughts on this @richardquest, on this question.
You may not agree with Grover Norquist, but he has an argument and makes it well and he makes it cogently and the question for the right to bear arms
in the United States, which goes to the core of what many people believe.
As we continue, we're going to turn our attention back to our normal business conversation and the violent eruptions may have eased but China's
stock market is still looking distinctly queasy.
(BEGIN VIDEO CLIP)
QUEST: Beijing administered a large dose of fresh cash, the prognosis from Ken Rogoff, next.
(MUSIC PLAYING)
(END VIDEO CLIP)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST: Now the U.S. markets struggled to recover a day after a brutal start to the trading day. The Dow literally seesawing. And I think this is
indicative in the same way that we saw the heavy losses yesterday to see this seesawing of up, then down, then up, then down, then up, down, up,
down, up, and it manages to end with a small smidgen of a gain. A mere 9.7 points, just a fraction on there and it's all showing just the uncertainty
and volatility even if you don't get vast numbers involved.
(BEGIN VIDEO CLIP)
QUEST: Europe was a bit between itself. You had the FTSE look at - if you take a look at the trading day on The FTSE, you get a similar - look at
that, starts there goes down, goes up, goes down, and I'm guessing the Xetra Dax which also just had a quarter of a percentage gain during the
course of the day. Look at that. Exactly the same; down, up, down.
The real volatility comes in Asia where the Shanghai Composite bounced again between losses and gains throughout the course of the session ending
down just a fraction, as you can see by the end.
Now those relatively small losses in Shanghai came at a cost for the Chinese government. The Central Bank pumped nearly $20 billion into the
financial system on Tuesday. Basically they saw money markets starting to freeze up. The cost of money between banks and financial institutions so
they literally pumped $20 billion into the financial system. That's on top of the quarter of a trillion that they spent last year to prop up the stock
market.
(END VIDEO CLIP)
Ken Rogoff served as Chief Economist at the IMF, Professor at Harvard. Ken, look, some would say that by intervening in what they did today, they got
big companies to buy shares, they pumped money in, they did all these things, they merely are preventing the inevitable.
KEN ROGOFF, ECONOMICS PROFESSOR, HARVARD UNIVERSITY: Well, it doesn't inspire confidence that they're using these heavy handed interventions
instead of letting the stock market move you know capping the amount of movements. But at the same time I think what people really want to look to
is what they are going to do with the underlying economy. How are they going to manage this transition to more consumer-like growth, how much
stimulus are they going to put in, how brave are they going to be about allowing the economy to slow down as need while they make the transition.
[16:20:08]
QUEST: What are the fundamental changes that you believe now need to be made? Because we're heading towards the emperor's new clothes when we talk
about the Chinese economy. You know, they say one thing, everybody else believes something else. What are the fundamental changes they need to
make.
ROGOFF: Oh, I mean I think it's pretty clear that they're investing way too much. I mean sure, you know, they're building railroads and they're
building airports, but after a while that runs out.
(BEGIN VIDEO CLIP)
ROGOFF: They invest twice what everybody else does as a share of GDP. And consumption is, you know it's almost half of what it is in the United
States as a share of GDP. They need consumption to come up it doesn't have to come up to the U.S., it needs to come up and investment to come down.
But you know that's not that easy to do when you have all your construction workers, your ways of doing business. So every time they do that, it does
tend to slow things down a little bit, simply the transition consumption led growth is less fast than export led growth.
(END VIDEO CLIP)
ROGOFF: And then they you know see it slowing down too much and they reverse course. So they're having trouble politically, economically
managing this in a smooth way and it is not easy.
QUEST: If China does have more of a harder landing than people are expecting, does that transmit itself vastly around the world? We've seen
some dislocation earlier last year. But if it gets worse how much will we feel?
ROGOFF: We'll feel it a lot. I mean emerging markets will get flattened.
(BEGIN VIDEO CLIP)
ROGOFF: That's already happened as China just gradually slows down. Countries like Brazil, Russia are in recession. Saudi Arabia of course has
a lot of tensions in the Middle East, but it's also under tremendous fiscal pressure from the falling oil prices.
(END VIDEO CLIP)
ROGOFF: So it's something that will hit everyone. You know, of course, it hits the stock markets because the U.S., Europe gets a lot of profits from
selling to emerging markets. It doesn't necessarily mean those economies themselves are in the same kind of danger. I think the advanced economies
by and large are healing from the financial crisis, but the emerging markets are still you know, getting over their own boom.
QUEST: Ken, good to see you, sir. Happy New Year and thank you for being with us this evening.
ROGOFF: Happy New Year to you Richard.
QUEST: I'm looking forward to seeing you (inaudible).
None of us fliers, those of us who white knuckle it onto the arms of the chairs. Well the world's safest airline has been named.
(BEGIN VIDEO CLIP)
QUEST: And while it's not United Airlines, the carrier did get an honorable mention. We'll explain why. We'll tell you who also topped the list. I
think that's a rather splendid - (inaudible)
(MUSIC PLAYING)
(END VIDEO CLIP)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
(BEGIN VIDEO CLIP)
QUEST: Queensland and Northern Territories Air Services, maybe better known as Qantas has once again been named the safest airline in the world. The
third year in a row that the carrier has claimed the top spot in a list that's drawn up by airlineratings.com.
Now the website names 20 leading airlines which scored 7 points or the best scores for highest safety. You've got a fascinating range from Qantas at
the top. You've got European carriers like Swiss and Lufthansa. You've got other Asian carriers, Cathay.
[16:25:12]
QUEST: In the U.S. carriers you've got American and United. And interestingly two of the Gulf three, Etihad and Emirates.
Now the criteria; what enables you to get 7 star ratings? Well you get various stars if you manage to hit certain parameters. 2 stars for example
if your IOSA which is part of the IATA accreditation system.
You get one star if you've been fatality free for ten years. If you're FAA endorsed and if you're not on the EU blacklist. So this is how you build up
more and more stars.
Geoffrey Thomas is the Editor in Chief of Airlineratings.com and he joins me from Perth, Australia, via Skype.
Good morning to you Geoffrey.
(END VIDEO CLIP)
GEOFFREY THOMAS, EDITOR IN CHIEF, AIRLINERATINGS.COM: Hi Richard, Happy New Year to you.
QUEST: And to you. So look, you know when I look at this list, what really distinguishes a Qantas from a Cathay, from a Virgin Australia, from a
Lufthansa. Because they're all - they are all at the top, top level of safety, would you agree?
THOMAS: Oh look absolutely. Our top 20 are the best of the best. It's a very, very fine line between the very best and number 20, if you like. And
that's why we actually don't rank them within that 20.
(BEGIN VIDEO CLIP)
THOMAS: But when it comes to Qantas; Qantas is fatality free in the jet era. Never lost a passenger on a jet airplane, which is an extraordinary
record. And Qantas also has been number one or number two in introducing every major safety innovation in the cockpit or operationally over the last
60 years.
(END VIDEO CLIP)
QUEST: But Geoffrey, I don't see for example, a British Airways, I don't see an Air France or an Air Italia, or even a Delta. Now the Temptation is
to say, well, they're not as safe as these airlines, but that's not really what you're saying.
THOMAS: Now, it's not and you're absolutely right. I mean those three airlines you just mentioned are also 7 star airlines. But when it comes
down to the final analysis we do, we look at what they have done over the last 20 years for instance. We also look at what's happened over the last
12 months. And in the case of Delta, they had an accident in New York with the overrun. British Airways had the accident in Las Vegas. And we're still
to determine what happened there.
So those sort of factors come to play. And we also look at the numbers of incidents over the last 12 - more minor incidents and then we sort of
refine down the top 20.
QUEST: Your list puts airlines in an uncomfortable position. You know this as well as I do. Because those who are - those who are on the top of the
list, they don't want to brag about it because safety is not a selling point for airlines, but they quite happily whisper yes but we were on the
top list of airlines -- so it's a betwixt and between isn't it?
THOMAS: Look indeed. And it's interesting because airlines don't trade on safety, it's almost a taboo not to do it. Yet the car industries trades on
it, so many other industries trade on safety whether this is rated correctly or not. But the airline industry is almost like, as you say,
it's a taboo subject. Although more airlines are starting to say yes, we're interested in being nominated, we're interested in being put up there
because safety has become such a massive issue over the last couple years with the tragedies with the MH370 and 17 and very high profile bizarre
accidents have really focused people's attention on yes, my life is worth - my life is worth something.
QUEST: Geoffrey Thomas, thank you very much indeed. Geoffrey getting up early in the morning to do service for us in Australia.
The Chinese government is spending billions to prop up the market we talked about that earlier in the program. And yet there are grave concerns for the
economy.
(BEGIN VIDEO CLIP)
QUEST: One of the world's top businessman is Sir Martin Sorrell, and after the break he's still bullish on China when you take the long-term view. He
will explain his views.
(MUSIC PLAYING)
(END VIDEO CLIP)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
[16:31:49] RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Hello, I'm Richard Quest. There is more
"Quest Means Business" in just a moment. We'll tell you about how the riot police guard the Venezuelan Parliament as the president declares an
"economic emergency." And we're going to show you the electric concept car is planning to take on Tesla.
Before that, this is CNN and on this network the news always comes first. President Obama has called for a national sense of emergency to tackle gun
violence in America. The U.S. president announced a series of executive actions to control gun violence.
One narrows the so-called gun show loophole and expands background checks for gun buyers.
Kuwait is the latest country in the Middle East to cut diplomatic ties with Iran, saying it was recalling its ambassador to Tehran in the latest
fallout from a dispute between Iran and Saudi Arabia over the Saudi execution of a Shiite cleric.
Bahrain today announced it is suspending all flights to and from Iran. In Afghanistan U.S. defense officials say one American soldier was killed
and two were wounded when their medical helicopter was hit by mortar fire. It happened in Marjah Helmand Province. The officials say the helicopter was on the ground and was still able to take off and that it was not shot
down. British lawmakers are to hold a debate on whether Donald Trump should be
banned from the United Kingdom. Now, the debate will be held on January the 18th after more than half a million people signed an online petition
calling for him to be banned. It came after Trump's call to ban all Muslims from the United States. It's
not believed to be binding on the government. And so to Venezuela where a political showdown is looming between the president and lawmakers over the country's Central Bank.
Now riot police have been stationed outside the National Assembly as the country's Opposition Party which of course won in the last election --
decisively won in the election - takes control of Parliament. Before the new Assembly was sworn in, Maduro - President Maduro - issued a decree restricting Parliament's powers over the Central Bank.
The move angered Opposition lawmakers. Maduro says he's also considering declaring an "economic emergency," and if that happens, his supporters in
Parliament have vowed to back it.
(BEGIN VIDEOCLIP)
DIOSDADO CABELLO, OUTGOING VENEZUELAN NATIONAL ASSEMBLY PRESIDENT: As soon as President Maduro sends us that emergency economic decree, the deputies
of our block will support it and defend it here from the Opposition.
(END VIDEOCLIP)
QUEST: CNN's Shasta Darlington is covering this story from - Shasta's in Rio. This was a battle that was going to happen as soon as the Opposition
won control of Parliament, it wasn't a question of if there'd be a showdown with Maduro, it was when.
[16:35:09] SHASTA DARLINGTON, CNN CORRESPONDENT: You're absolutely right, Richard. And in fact, the showdown started even before the lawmakers were
sworn in. The decree that you talked about regarding the central bank, well that was
passed before they were sworn in precisely to prevent the Assembly from taking some of the measures that it could have taken if that hadn't been
passed, whether that would be appointing directors or really preventing the Central Bank from printing money so freely the way it does currently.
And you'll - you've - seen the reaction in the markets. Among economists the concern is this could actually speed up hyperinflation, Richard.
QUEST: All right, so how does this resolve itself? Because for those of us, myself included and I'll put my hand up, who are not as 'oh corrol'
(ph) with the constitutional niceties of the Venezuelan government, if you have a parliament that is clearly in opposition to a sitting president,
does Venezuela - who's in control here?
DARLINGTON: Richard, it's going to be a long-term power struggle here. The Opposition won a two-thirds majority, a supermajority, in these
elections last December with 112 lawmakers elected. But today what we saw is that three of them weren't sworn in, and whether or not this is another political play is of course a question many are
asking, it's because the Supreme Court ruled that those three couldn't take office because they were still facing legal objections to their victories.
Well that means they no longer have that supermajority that limits some of the measures they can take in Congress.
There's been a lot of discussion about that criticism in Venezuela outside of Venezuela.
We heard the U.S. State Department accusing the Venezuelan government of interfering in the constitutionally-mandated basically legislative process
there. So there is going to be a lot of back and forth. One of the things that the Opposition had hoped is with a supermajority they could actually take
some steps towards removing Maduro from office. It would be again a lengthy process, something that would have to be taken to the public for voting. But this will all depend on what happens to
those three lawmakers -
QUEST: All right.
DARLINGTON: -- that at this point have not been allowed to take office. We're going to see this battle played out of the coming months, Richard.
QUEST: And, briefly, the economy whilst this goes on, the economy just gets worse.
DARLINGTON: Absolutely. And I think that's something that we should all recognize. It's not like there's some magic wand - oh, if Maduro were no
longer president or oh, if the Opposition had the supermajority things would be solved overnight. They wouldn't
This is an economy that has been based on oil revenues for decades. It has become more dependent on them since Hugo Chavez sort of created this
socialist government beginning in 1999 using those revenues to fuel and to fund his social programs.
More than 90 percent of export revenues are from oil, but this is something that's going to be solved overnight, Richard.
QUEST: Shasta Darlington who's in Rio for us this evening. "Quest Means Business," we will continue in a moment.
(COMMERCIAL BREAK)
QUEST: China has pumped nearly $20 billion into its financial system a day after fears about its economy sent markets around the world into the red.
[16:40:02] Adding another $200 billion or so the government spent to prop up the markets over the summer, and yet through it all Sir Martin Sorrel
has remained bullish on China's long-term prospects. Sir Martin is the chief exec of the agency WPP. Sir Martin is with me from Las Vegas. Good to see you, Martin. Happy New Year to you, sir.
SIR MARTIN SORRELL, CEO, WPP: Good to see you, happy New Year to you, Richard. We're not an agency, we're a group, a parent company.
QUEST: You're a conglomerate. Right.
SORRELL: No, that's even more offensive, not a conglomerate. A focus group of advertising and marketing services company.
QUEST: Right, let's get on with talking about China if we may. Look, you -
SORRELL: Right.
QUEST: -- fundamentally believe that the - we - shouldn't necessarily focus on this very short-termism. But the economy in China is in trouble.
SORRELL: Right. Well, certainly the economy in China has slowed down markedly. I think we've said to you and others for a considerable period
of time even the official estimates of GDP growth of 6 to 7 or 7.5 percent were on the high side.
I think we've been talking about the economy growing at 4, 5 or 6 percent over the years. I heard somebody on a competitive network to you talk
about 2 percent I think it was early this morning here from Las Vegas. But whatever the rate is, you have to remember that the Chinese economy is now $11 trillion. That is the second largest economy in the world - second
only to the United States. But it took the United States 100 years to become the world's foremost
economic superpower. China is in the process of becoming the world's -
QUEST: Right.
SORRELL: -- biggest economy. I still think that will happen. It took 100 years for the U.S., China's done it much more rapidly basically since 1985.
I do think the last 200 years has been a blip in history, and looking at the long-term future of the BRICs and the Next Eleven - whatever is
happening to emerging markets or fast-growth markets or slow-growth markets -
QUEST: Right.
SORRELL: -- currencies - whatever is happening to their GDP, in the long term this where the population expansion is going to come from, this is
where the younger people of the future - the young consumers - are going to (inaudible).
And last but not least, I was talking to your colleague about the new competitor to Tesla which comes from where? From China.
So, technology - and here we are at CES - Chinese technology, whether it be Huawei, or Xiaomi or Lenovo -
QUEST: All right.
SORRELL: -- or this new competitor to Tesla, we have to get real about this, Richard. We may not like the idea or some of us may not like the
idea of there being a G2 world where U.S. and China dominate. But still the delta in our industry - the increasing growth in our industry
last year - came from where? Two -
QUEST: All right.
SORRELL: -- economies. China growing more slowly and the U.S.
QUEST: So, with that in mind, how then -
SORRELL: (Inaudible).
QUEST: -- do you - how then do you - balance the need to do business in China with the fact that -
SORRELL: Right.
QUEST: -- it is slowing down and there are these very damaging rippling effects across the emerging markets?
SORRELL: Well certainly, you know, I've been doing this some people think too long, but for 30 years, and I take a long-term view. I'm a long-term
shareholder in WPP. I'm not a short-term Johnny come lately. I'm going to take another 30-year
view not that I'm going to be here for another 30 years. But we focus on the fast-growth markets, we focus on digital, we focus on
data - those three areas. And here at CES, it's resoundingly clear that technology, data and content are going to become more and more important
and we are making -
QUEST: Right.
SORRELL: -- long-term investments, we're not scared by disruption. We're not scared by the short-term zero-based budgeters. We're not scared by the
activist investors who insist on looking maybe at the short term. What we are focused on is the long term and making sure that WPP is as strong in the future as it has been in the past.
So you come to Las Vegas for a healthy dose of paranoia --
QUEST: (LAUGHTER).
SORRELL: -- and worry about who's going to distance and mediate (ph) you -
QUEST: All right.
SORRELL: -- and what you have to do to invest for the future. Not to cut costs, not to worry about what Richard Quest says on CNN about the short-term prospects of China.
QUEST: Are you going to be in Davos, Martin? Will I see you there?
SORRELL: I am.
QUEST: Excellent.
SORRELL: I am, most definitely.
QUEST: We do it all over again in a couple of weeks in Davos. Martin, lovely to see you.
SORRELL: Well, thank you very much. Good to see you, Richard.
QUEST: We'll continue in Las Vegas where carmakers are driving onto center stage at the Consumer Electronic Show.
And one upstart is taking on Tesla as you just heard. We'll talk about that.
First, you need to pause, you need to think, you need to make, create, innovate.
(COMMERCIAL BREAK)
[16:46:41] QUEST: Martin Sorrell's already told us about the CES - Consumer Electronics - but it is a chance for the world's gadget makers to
show off their vision of the future. And this year, it's all about what's happening on wheels. For instance, in the garage at "Quest Means Business" you have Ford which is tripling the
self-driving car fleet. It is also partnering with Amazon. And the idea is it will join with a
connected home with a connective car. The goal ultimately, you go start and stop your car from the sofa although
why on earth you would want to do that, I have no idea. But you can also check the fuel range as well - it won't do you much good.
Now other carmakers - other industries - for example NVidia - yes, look at that. Now this little thing is a super computer for the car.
It senses the surroundings, it enables autonomous navigation. That's a posh way of saying self-driving cars.
But all these things they're talking about, but this is what everybody's really excited about. Open the garage at the Faraday Future which unveils
its all-electric supercar. It's called the FF01. It's up to 1,000 horsepower and a single seat. And it's all designed to
set up the competition with Tesla. Samuel Burke is at the Consumer Electronics Show.
(BEGIN VIDEOCLIP)
(APPLAUSE)
SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: Please meet Faraday Future's FF01 concept.
(APPLAUSE AND MUSIC)
BURKE: What is the goal of Faraday?
RICHARD KIM, HEAD OF GLOBAL DESIGN, FARADAY FUTURE: Most importantly, to have a seamless, beautiful experience. Everything is smart, everything is
intelligent. Why isn't the car smart? We haven't seen a car that's up to speed as basic consumer electronics. That's an important tic in the box that we're trying
to do.
BURKE: Is this an electric car or a driverless car?
KIM: Oh, it's definitely all electric and we are always working towards full autonomy (ph).
BURKE: What makes this car unique? Can you point out certain parts of the design that set it apart from other cars?
KIM: Yes, a really cool view is from front to rear. There are these endless tunnels so that the air can flow straight through the car, cool
your batteries, of course aerodynamics. And all of those things they sum up to be a range (ph) and that means we're going to go forever without charging.
BURKE: I just drove from Phoenix to San Diego for $30 --
KIM: Yes.
BURKE: -- for a tank of gas.
KIM: Yes.
BURKE: So was there a time when gas was so expensive, that was the time for electric car and maybe now it's passed?
KIM: No, no, no because it's about doing good things for the earth. We have to clean this pollution up. And you don't have to sacrifice anything
for being sustainable. This is a 100 percent sustainable electric, non-polluting vehicle and it could be as dynamic as a 1,000 horsepower.
BURKE: Is this exactly what we should expect on the road in a couple of years' time? S
KIM: This car concept is road worthy. You know, we could take this on the track. We don't have plans for that and we're not communicating that right
now. We're still focusing on our first production car. But this is an ongoing study. This isn't like a random sculpture. You
know, this is a serious project that we're doing in parallel to our regular work.
[16:50:05] BURKE: And how soon could I see one of these cars on the road?
KIM: In this concept or one of our first cars?
BURKE: Right.
KIM: A couple of years.
NICK SAMPSON, SENIOR VICE PRESIDENT, RESEARCH AND DEVELOPMENT, FARADAY FUTURE: At FF we believe with every bone in our body that the world is
ready for a new way of looking at mobility. Nine years ago this very month the iPhone was announced.
Apple didn't just redefine the phone, it transformed the way we communicate, organize and enjoy our lives.
And that is what we at Faraday Future are looking to do - help redefine the world of mobility.
(END VIDEOCLIP)
QUEST: His fingers were already going to get a workout after a pledge to code his own personal assistant in the year ahead.
Now Mark Zuckerberg has decided never mind the fingers and the arms, he's going to stretch his legs as well.
Zuckerberg is calling 2016 the year of running. The Facebook co-founder and chief exec says he'll jog 365 miles this year - oh, a mile a day - and
post updates on his progress to Facebook. With me is Jean-Pierre Regis, the founder of Swagger.com, a pop culture and lifestyle blog who we hope will be here much more often.
What do you make of this, Jean-Pierre, this - first of all he tells us he's going to do code, now he says he's going to run (RINGS BELL). Who cares?
JEAN-PIERRE REGIS, FOUNDER, SWAGGER.NYC: (LAUGHTER). Well listen, he's a brilliant businessman, right? He holds the spout to the social internet.
He can touch more people than any media outlet anywhere. And so why not use that to his advantage? Why not say -
QUEST: So what advantage though?
REGIS: To show that he is not only sort of a geek if you will, but he's a cool guy too, right? He is pushing people to not only be athletic but
also, smartly, be athletic on his platform. Sign up to Facebook to be on these public forums to show that you are
invested and spend time on his platform.
QUEST: Right, spend time on his platform which of course is one of the most unhealthy things to be doing - sitting in front of a computer or on
your phone instead of having a conversation.
REGIS: And I'm not denying that, but, again, as a business - as a smart businessman - who understands the importance of a brand and content
building a brand, he is doing just that.
QUEST: This has got as a guru about it. I'm going to read two books a month, I'm going to learn Mandarin, I'm going to run 3 - who I mean?
REGIS: In this day and age, Richard, you know better than anybody else the importance of a brand and building a brand.
Look at these celebrities here - Kim Kardashian for example - 65 million Instagram followers she can reach immediately with a touch of a button in a
tone that speaks to what she wants to put out there. He has 1.-some odd billion followers. He can control his brand, he can control what people think about him -
QUEST: To what end?
REGIS: -- and what he's doing. It is so smart. He doesn't need us. He doesn't need media, he doesn't need journalism, he really can control the
conversation that's being had around him and -
QUEST: But why? Why -
REGIS: Because -
QUEST: -- why's it necessary? Because, look, he's created Facebook and Facebook is great and people love it and it's exceptionally successful.
REGIS: Yes.
QUEST: So why does it need him?
REGIS: Great point. Because there are so many things that are happening around Facebook that are not - that are pejorative, right?
We have the internet.org. A lot of people are, you know, lambasting that. Why not then own the conversation and say don't read about that, read my
updates about running 365 miles a year. You know, read my update about how you can better yourself and share,
share, share. That's what he's doing.
QUEST: It's taken - I mean, I can honestly say I can't remember too many CEOs - in fact I can't think of any besides this case where we are
following them with such closeness.
REGIS: Oh, there are none. I mean, he is the first. That is not, you know, out of the Hollywood set, if you will.
QUEST: Musk - Elon Musk arguably, do we - no?
REGIS: No, not really. I mean, he can - again -- he cannot touch as many people with the click of a button.
He can't - and, again, we know socially Facebook decides what goes out there. He can have everybody read what he wants.
QUEST: Good to see you, sir.
REGIS: Good to see you.
QUEST: Come back again please.
REGIS: Thank you.
QUEST: OK, a look at how the stock markets finished both on Wall Street and in Europe.
We're showing you this because it really is fascinating. Up 9.75 percent - (inaudible) (LAUGHTER) - that gave you a heart attack -- up 9.75 points on
the Dow Jones Industrials. A topsy-turvy day which is indicative of what's happening.
And to Europe of course where you saw a variety of markets. You've got the - you've got the - FTSE, the Xetra Dax, the CAC Quarante and the Zurich
SMI. They were all higher but noticeably very small gains, all of which suggests
that there is still an exceptional amount of nervousness, unease about what's happening in Asia.
We will continue with a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
[16:58:32] QUEST: Tonight's "Profitable Moment." The annual Safest Airlines survey from airlineratings.com always makes fascinating reading.
For anyone like you and me who does a lot of traveling, you immediately compare the airlines that we fly with those that are on the list.
But it doesn't really tell the whole story because once you get to the global carriers, they're all much of a much (ph) when it comes to safety.
Yes, you can eke out small differences as airlineratings.com has, and you can make certain conclusions such as Qantas or Swiss or the Cathays and the
top echelons. But we needn't take this too far. Once you're talking about the best
airlines in the world, they're pretty much all at the top. The worrying part of course is those airlines way further down -- Indonesia Airlines which only got one star, those countries that go no stars. Those
airlines, frankly, I wouldn't get onboard and have a seat if you paid me. Now you're starting to talk about what airline safety is really all about. Fasten your seatbelt, tray tables in the upright and stowed position.
And that's "Quest Means Business" for tonight. I'm Richard Quest in business class. Whatever you're up to in the hours ahead, (RINGS BELL) I
hope it's profitable. Don't sit at the back of the bus.
END
