Return to Transcripts main page
Quest Means Business
New Hampshire Primary; Will Bloomberg Run?; Oil Price Discussed; Zika Virus Update
Aired February 09, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BELL RINGING)
[16:00:00]
RICHARD QUEST, HOST: The market held its nerve after triple digit losses over the past few days. Down just a fraction maybe 10, 20 odd points when
the closing bell rang. Time to hit the gavel and bring trading to a close - it is Tuesday, it's February the 9th in New York. It's already Wednesday
here in Dubai.
(BEGIN VIDEO CLIP)
QUEST: The road to the White House goes through New Hampshire. Voting's under way and record turnout is expected. It's a false dawn for oil prices.
The IA warned it's going to stay darker a while longer. And the Beyonce bounce which backfired. Red Lobster faces the wrath of the twitterati.
(END VIDEO CLIP)
QUEST: I'm Richard Quest live from CNN Dubai where of course I mean business.
(MUSIC PLAYING)
QUEST: Good evening. Voters in New Hampshire have the fate of the U.S. Presidential candidates in their hands. As we speak. As the first primary
election of the 2016 race is under way.
(BEGIN VIDEO CLIP)
QUEST: Remember, the caucuses are a bit of an amateurish sort of affair, but the primaries are where it really gets interesting. And now the stakes
are high. The implications for future contestants is crucial.
After months of campaigning and the debating and there's been plenty of that, victory in New Hampshire would be an big win for whoever takes home
the prize.
On the Republican side, the latest polls show the Donald Trump has twice the support of Marco Rubio and Ted Cruz. The polls indicated a healthy lead
for Trump at the Iowa caucuses and that didn't hold true.
As to that - look at that Trump 31, Rubio 15, Cruz, 13, and John Kasich, 11. Go to the Democrats and you see Bernie Sanders is expected to beat
Hillary Clinton by a wide margin. The senator is from the neighboring state of Vermont and therefore he's hoping not only for some local enthusiasm but
that this will gain momentum for the race ahead. That's a handsome victory or at least margin for Bernie Sanders.
Kate Bolduan is at the polling station in Chichester, in New Hampshire.
(END VIDEO CLIP)
QUEST: Kate obviously, New Hampshire in the middle of winter, give us a taste of the weather and the mood.
KATE BOLDUAN, CNN INTERNATIONAL CORRESPONDENT: There was snow yesterday but I will tell you, it doesn't even matter if there was snow. Because this is
New England my friend, and they can turn out in anything. It's actually a beautifully, sunny day out right now. Cold, but nobody cares about this. I
have to correct you; it is Chichester because I have been corrected several times since I have arrived here so I must get it right for my friends here
at this beautiful polling station.
This is a unique one Richard. Let me just show you what we're looking at.
(BEGIN VIDEO CLIP)
BOLDUAN: Through these yellow chains, people will arrive. This is a small, small old school house. This is an old, old school house. And what happens
here, this is one of the many polling stations. Almost half the polling places in New Hampshire still count by hand ballots and that is what goes
on here. They come on, they get the ballots and they can - they get their ballots, pink is for Republicans. Blue is for Democrats. They go behind the
curtain. They make their selection. And then they come over here and they drop it into the box. The box stays locked. The moderator (Ewan) will be
helping lead the count when this happens. Once the polls close at 7:00 o'clock. And Evelyn Pike has been here for 30 years and she is overseeing
all of it to make sure that it goes very, very smoothly.
They're having a lot of fun because they love all this. But this is a very, very obviously serious thing that they're following here. So you just --
come on over here, let's just do this, you just voted.
UNIDENTIFIED MALE: I did.
BOLDUAN: Were you undeclared beforehand?
UNIDENTIFIED MALE: I was undeclared.
BOLDUAN: And then you decided? Could you tell us how you voted today?
UNIDENTIFIED MALE: I voted for Donald Trump today.
BOLDUAN: You voted for Donald Trump. When did you decide? We have heard so often New Hampshire voters, I've heard people have been waiting until their
lunch breaks, waiting in line. When did you decide?
UNIDENTIFIED MALE: Quite a while ago.
BOLDUAN: Quite a while ago?
UNIDENTIFIED MALE: I did. I mean I did go back and forth a couple times, but I like his message and that's kind of how I went.
BOLDUAN: That's how you went. Thank you so much, Thanks for taking a moment. And this is how this is happening right here Richard. So this is
one polling station, but I'll tell you, it's pretty special; we're having a lot of fun here today.
(END VIDEO CLIP)
QUEST: Now, this is interesting. Because the way the voting can take place, the people who can go in New Hampshire, it's all -- I mean, you don't have
to be declared for one party or another or you can declare late in the day. It's quite - it's quite unusual, isn't it, the way Democrats and
Republicans can switch sides in New Hampshire.
[16:05:10]
BOLDUAN: Absolutely, and that is something that folks in New Hampshire, it's kind of a point of pride that folks in New Hampshire almost, I think
the number right now is some 40% of voters that will be voting in the New Hampshire primary, they expect are undeclared. And that means they're
undeclared. They walk into this voting station and they say they're either going to vote -- they want a pink ballot or they want a blue ballot and
that's when they decide.
It is truly unusual. But it's what also makes it so exciting and also so nerve-racking for all the candidates because there's a big x factor here.
And I'll tell you we've talked to some voters who say that they wanted to vote Democrat but they were also even considering voting in the Republican
-- voting Republican in order to vote basically against one particular candidate or another. So folks have a very interesting calculation when
they head into these polling stations and how they decide.
We've also talked to some folks who are deciding between Bernie Sanders, -- Bernie Sanders obviously running in the Democratic race and Donald Trump
running in the republican race. It is very unusual, and why there's a big unknown until all these ballots are counted later tonight.
QUEST: True tactical voting. Kate Bolduan who is on Chichester. I shall allow you on this one occasion the correction of an old English town,
Chichester. Kate Bolduan, good to see you.
Voting actually began overnight in a handful of places in New Hampshire, a tradition that dates back to the 1960s. In a few small towns. Dixville
Notch. Dear old Dixville Notch (inaudible).
(BEGIN VIDEO CLIP)
QUEST: Now in those places, the voters go to the polls at exactly midnight and the votes are counted immediately. In Dixville Notch, Bernie Sanders
and John Kasich came out on top after nine ballots. Historically, the town's not been a good indicator for the state's final results.
New Hampshire is known as the granite state. A reference to one of its abundant natural resources. It was one of the original 13 colonies and it
became the ninth state in 1768. It has a rich pedigree that goes back many years.
The state's motto is "live free or die." and as you might expect, it was written by a revolutionary war general. As for the major attractions that
you might wish to visit, Mt. Washington is the highest peak in the northeast. And spectacular, too, the view is, I'm told. The New Hampshire
motor speedway hosts two Nascar races every summer.
(END VIDEO CLIP)
QUEST: Ted Gatsis is the Mayor of Manchester, New Hampshire, and joins me now. Mr. Mayor, you citizens absolutely love the fact this is not only the
first primary but there is this unusualness about it, where people can be undeclared, tactical voting, go for one, change their minds. They love it.
TED GATSIS, MAYOR MANCHESTER, NEW HAMPSHIRE: They absolutely love it, there's no question. It's going to be record turnout today. We're already
seeing that the new registrars that are going in. There's an abundance of them. They're making decisions. And I think you might throw all these polls
out because i think there could be shocks and surprises. People are excited. They're going to the polls. They're waiting in line. It doesn't
matter how cold it is, New Hampshire voters are out here to make sure that people across this country recognize New Hampshire first in the nation
primary means an awful lot.
QUEST: Now, Mr. Mayor, I've been to Manchester, New Hampshire, and I've been there during primary season. But give our viewers the flavor for the
place. The sort of things that you get up to. The excitement of Manchester, New Hampshire. If I was there, what must I do?
GATSIS: Well, there's no question that visiting downtown Manchester is pretty exciting. Because I can tell you there's probably more T.V. cameras
here in the city of Manchester than there might be voters. You can go to any corner and somebody has a camera in their hand and are willing to ask
you a question. So the excitement is absolutely incredible in the city. The restaurants are doing great business. And it's just a wonderful, wonderful
feeling here in the Queen's city.
QUEST: And when you put this - I can hear the sirens in the background. I hope they're not coming for you. But when you take this excitement that
happens in Manchester every four years, describe the local people. Are they conservative? Is it liberal elite? Are they -- I mean, obviously, with live
free or die, there's a healthy choice of libertarianism about it.
GATSIS: Well people in the state of New Hampshire will certainly never make up their minds about a candidate until almost the very last minute.
People here want to make sure they see the candidate three or four times. Ask them a question three or four times before they make their decision.
They'll meet them in a coffee shop in somebody's living room, downtown, on a main street but they're always asking candidates the same question to see
if they get the same answer.
QUEST: Mr. Mayor, thank you for joining us. I look forward to being back in your wonderful state and your wonderful town and we can hopefully have a
coffee and discuss the local politics in the future. Thank you, Sir.
GATSIS: You have a great day, thank you.
QUEST: Now, Donald Trump says he hopes -- thank you. Donald Trump says he hopes another billionaire will jump into the presidential race.
In an MSNBC interview, Mr. Trump said he will welcome the competition if Michael Bloomberg decided to run.
(BEGIN VIDEO CLIP)
QUEST: On Monday, Mr. Bloomberg said he's continuing a bid for the White House for the first time. Rana Foroohar CNN's global economic analyst Rana
joins me now.
(END VIDEO CLIP)
QUEST: Ross Perot was the last billionaire that decided to put a chunk of his money into a fully fledged independent race. Why would Michael
Bloomberg want to spend a billion?
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: It's a really good question. I mean you know it could be to make a political point. He has said that if
this is going to be an election that is ruled that by outsiders that he would be thinking about getting in. I think in some ways, he's quite a
different candidate than Ross Perot.
(BEGIN VIDEO CLIP)
FOROOHAR: For starters, he's got a record of having run new york pretty well a lot of people think as mayor of New York city. He's built an
incredibly successful business that has a brand name that a lot of people know. And what's interesting about Bloomberg is, he does sort of cross
boundaries, party boundaries, in the sense that he's got the social liberalness a lot of democrats like. But he's a business guy. You know,
he's a self-made billionaire who ran a huge financial firm, has started a media company. You know this is somebody the Republicans can get behind as
well in that sense.
(END VIDEO CLIP)
QUEST: Now, Rana, I was also reading your comments today, those people - those women who are saying that vote for Hillary Clinton because she's a
woman and women must be seen to support other women. That had you frothing at the mouth.
FOROOHAR: Well, I did feel the need to jump in on that. Because you know I think that there's this assumption that woman are going to vote for Hillary
because she's a woman.
(BEGIN VIDEO CLIP)
FOROOHAR: There's many reasons to vote for Hillary. But I think young women in particular feel that gender is not a big issue in this campaign. I mean
if you look at Democratic voters for example a lot of younger people are favoring Bernie Sanders, and I think that's in part because for them,
gender politics are not as much of an issue as the economy.
You know young people came of age into the workforce after the aftermath of the financial crisis and the great recession. They really care about the
broken social contract in America. That's something that I think both candidates speak to but it would be wise for those who support Hillary to
remember that that's the real social issue I think here.
(END VIDEO CLIP)
QUEST: Finally, briefly Rana, I'm not letting you get away with not either taking credit or blame for your recession article earlier this year in
Davos. So, are you backtracking yet in the potential for the recession or are you confirmed in your belief?
FOROOHAR: Richard, I never backtrack. And I think the data has only gotten stronger actually that we could be in for a global recession this year or
next year. So stay tuned. I stand firm in my predictions.
QUEST: Let's see if you're still standing firm by Easter. Rana, good to see you, see you back in New York, in two weeks.
As we continue from Dubai tonight. The IEA says it's a false dawn if you think oil prices are about to go back up again.
(BEGIN VIDEO CLIP)
QUEST: And we're starting to see the first real effects or maybe I should say more effects of economies in this part of the world having to cut back.
It's "Quest Means Business" we're in Dubai.
(MUSIC PLAYING)
(END VIDEO CLIP)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
[16:16:03]
QUEST: Dubai, the famous wave hotel, which is on Jumeirah Beach, now eclipsed by other larger buildings. But that's of course the Burj Khalifa,
and the Burj Al Arab and that wave hotel was the first signature building that is on Jumeirah beach and remains there today.
Brent crude prices suffered a 6% fall, 6%, and settled around $31 a barrel. It's heading back down towards last month's historic low about 27 if that
pressure continues. The bounce that it got after that trough looks to be fading away. The issue is what's causing that bounce to evaporate. If it
was just a bounce or have fundamental change.
Probably not according to the International Energy Agency which has given its take now on the fresh slide in prices.
(BEGIN VIDEO CLIP)
QUEST: The IEA is calling the recent rebound a "false down." It says there's no sign of an OPEC production cut and indeed the opposite is
happening according to the IAE. Iraq, Iran and Saudi Arabia are adding to the output. At a time when many hope low prices will grow demand. The IEA
says that growth will be slower in 2016.
In other words, you've got exactly the wrong combination. Throw into the mix the weaker dollar and the IEA expects the U.S. dollar will stay strong
for the foreseeable. The slowdown in the U.S. shale production would curb global supply. And again the IEA says that any idea that the slow -- that
the fall in price would take out U.S. production, quoting from the IEA, is taking an awfully long time to happen.
(END VIDEO CLIP)
QUEST: Neil Atkinson is the head of the oil market division at the IEA. Explain why he doesn't think oil prices are stable any time soon.
NEIL ATKINSON, HEAD OF OIL MARKET DIVISION, IEA: We're still flagging up some concerns about the robustness of global oil demand growth. But perhaps
more worryingly on the other side of the balance, as far as supply's concerned, the high cost non-OPEC producers in the United States and Canada
seem to see far fewer signs than we expected of a big falloff in production. They seem to be more robust than we expected.
On the other side of the supply balance, the OPEC producing countries, Iraq and Saudi Arabia, both seem to have increased their shipments during
January and of course we've got the Iranian volumes to come back into the market during the next few months.
So we're a little concerned that maybe the market isn't going to improve perhaps as quickly as people might have expected and I think we've
reflected that in this month's report.
QUEST: If you take all the factors, would you say that the pressure on pricing is still down or has it reached some form of equilibrium, some for
the of stability?
ATKINSON: It may well have reached equilibrium; this is what we're not entirely sure of. But I think what we're saying in the report is that if
anything, the tendency is to be a major move in the short term at least could well be down. But that's short-term pressure, because we see the
supply over demand in the first quarter of this year being slightly higher than we thought a month ago.
But if we can weather this first quarter storm and the supply doesn't build up by as much as we think it might, then we could well have reached
equilibrium as you suggest.
QUEST: I mean we're not talking about a huge discrepancy here. 1.5 million barrels or so of excess supply over demand on more than 96 to 98 million
barrels a day. So we're not talking about a vast oversupply, which raises the question, why the market continued to fall so sharply, so violently if
you like?
[16:20:05]
ATKINSON: Well, I disagree with you. We've seen rising stocks through the whole of 2014, the whole of 2015 and we're expecting it to happen
through 2016 as well. In the OECD countries, the western countries for which we have extremely good data, stocks of crude oil and products are at
3 billion barrels. That's getting on for 400 million barrels above the normal average for this time of year. Stocks have been building up
remorselessly for some time. And there are some issues, as we go through 2016, of the efficiency of the oil market system to store barrels cost
effectively, whether there would be enough capacity.
And of course once we reach market equilibrium, where supply and demand do come into balance towards the end of 2016 early '17 of course, stocks will
start to fall as we move into surplus, but they'll be falling from a very, very high level indeed.
So the stocks, although you put it that it's only 1.5 million barrels a day out of 97 million barrels a day, that's an awful lot of barrels. And it's
been going on for - this is now the third year in a row where we're going to see stocks rising by, on average, 1 million barrels every single day.
QUEST: That's the IEA's view and the markets in the U.S. closed flat on Tuesday.
(BEGIN VIDEO CLIP)
QUEST: The big board finished down just some 12 points and that's quite an achievement if you look at that map, that graph, I should say. Very heavily
down at the open, 140 off at the open. Then goes through the day down with little peaks and troughs, but eeks out small gains towards the late
afternoon, finally given up 12 at the close.
Stocks have highly sensitive of oil prices of late. Here's a look at the price of Brent so far this year. Add in the S&P 500 and you see exactly how
these two have mimicked each other over the movement of oil prices. Look at that. Maybe you don't get quite the same peaks and troughs but you get that
same trend at a smaller level.
It's added to the volatility on the markets. The Dow has swung by triple digit tallies in 19 of the 26 sessions so far in 2016.
(END VIDEO CLIP)
QUEST: That's an extraordinary number to put into perspective. Governments have been reacting to oil prices.
(BEGIN VIDEO CLIP)
QUEST: Saudi Arabia announced today it will cut back scholarship programs as part of a 12% cut in education spending. It's tightening the -- it's
tightening the limits if you like of institutions where its nationals can go around the world. There's a key message from the world government summit
here in the UAE. The Gulf states must diversify their economies. The UAE's announced it's going to outsource government services and its cutting back
the number of ministries, making the remaining ones more focused.
(END VIDEO CLIP)
QUEST: Joining me in New York, Gillian Tett, the U.S. Managing Editor of The Financial Times. Wherever I'm looking, Gillian, and whatever I'm
reading, I'm seeing now people saying something's not right but we're not sure what that is.
GILLIAN TETT, U.S. MANAGING EDITOR, FINANCIAL TIMES: This really is the moment of worry. You see an incredible volatility in the stock market but
you also see it in private conversations and I've spent the last few days talking to some of the biggest money managers in America and there really
is a climate of great fear.
(BEGIN VIDEO CLIP)
TETT: Now, one reason, I'm actually holding tomorrow's "Financial Times" it's hot off the press, our proof. One issue is concern about bank stocks.
Deutsche's eyes emergency debt buy back as banks (inaudible).
(END VIDEO CLIP)
TETT: This really smacks of 2008/2009 when you saw bank CEOs and finance ministries coming out and trying to reassure everyone there was no reason
for the bank stocks to be selling off. But no matter what they said, that nervousness is definitely there right now.
QUEST: You see but that's the point, Gillian. There's no - I mean I saw the statement from the Co-CEOs at Deutsche, basically saying yes, we may have
to do debt buy back and we may have to do some various things, but any idea that Deutsche is not solid is simply untrue. So how much of it is just
sheer fear?
TETT: Well part of the problem people are saying right now is that issue of what's George Soros calls reflexivity.
Basically fear breeds more fear and it becomes fear of fear itself. Fear of recession creates a recession if you like, and that's definitely out there.
On top of that you've got the sliding oil prices. I mean we've got another great story in the FT tomorrow. ICAN racks up losing bets on energy.
You're starting to see these falling oil prices actually hit from the big asset management companies and the financial companies too.
[16:25:04]
TETT: The other issue though is falling interest rates. And rather negative rates. Everyone's going to be watching what Janet Yellen says tomorrow when
she gives her statement to congress and things. That could be very closely scrutinized for whether the Fed is going to have the stomach to keep
raising rates or actually is going to be forced to cut them later this year.
(BEGIN VIDEO CLIP)
TETT: And this concern we're sliding into this Alice in Wonderland economics world where investors can't make sense of what's actually
happening in the world of negative rates. It's weighing very heavily on the banks and on markets more generally.
(END VIDEO CLIP)
QUEST: Gillian Tett, Gillian good to see you, thank you, from the Financial Times, with the fear of fear, and the Alice in Wonderland of today's
economics. And fears of the Zika virus now seem to be spreading faster than the disease itself.
(BEGIN VIDEO CLIP)
QUEST: As one country thousands of miles away considers pulling out of the Rio Olympics or at least has the prospect of thinking of doing so. It's
"Quest Means Business" we are in Dubai tonight.
(MUSIC PLAYING)
(END VIDEO CLIP)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST: The Olympic games are just six months away and Kenya is considering pulling out altogether because of fears over the Zika virus. Some of the
best athletes in the world come from Kenya so any decision to leave would have a big impact. Others of course don't have the option of staying away.
CNN's Nick Paton Walsh met some of the people who live alongside the new stadia and also live under threat of Zika.
(BEGIN VIDEO CLIP)
NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Pedro is driving us to his home that's inside Brazil's nearly completed Olympic park. He's
no builder or developer but someone for whom the making of this Olympic dream means they will lose their own dream, their home.
He still lives inside the Olympic park, refusing to move it's of the way of the bulldozers, refusing to take the government's buyout. There are forms
of pressure, he says. The most common, to cut the water. What water is here is stagnant and that could mean Zika.
This was once a lake-side paradise but now stagnant water brings with it the risk of mosquitos. A construction site have taken away so much of the
greenery they used to know and they're now the reluctant new neighbor of the Olympic park.
A lot of mosquitoes, you're not worried about Zika?
UNIDENTIFIED MALE: No, I don't have fear, don't have fear mosquitoes. I have fear of my --
WALSH: (inaudible) means the city mayor whose office didn't return our calls. Just outside the park's fence, (inaudible) heads one of 50 of what
was once 500 families live hearing.
This was our little corner, he says, a paradise for us. Yes, they've been offered for new homes but won't leave their corner of Brazil. And it's one
he shows us where demolition means more still water for Zika carrying mosquitoes to breed.
Like all of Rio during carnival, they're partying, but they're not leaving home. Worrying that if they leave, they'll come back to find their homes
bulldozed. In the rubble, noise and Zika threat, Rafaela gave birth, seven days ago. Here a fever when pregnant spells panic.
The water pipes broke down she says, I and my children all got fever so we went to see the doctor but he told us it was from the bad water we drunk
and not Zika."
WALSH: Still, so much medical uncertainty meant only Sophia's (ph) birth let them feel totally safe.
UNIDENTIFIED FEMALE TRANSLATED BY WALSH: "I was happy," she says. "What mother isn't when their daughter's born healthy?"
WALSH: The idyllic waters where Brazil's Olympic dream, its health nightmare and its most disregarded growth and struggle inside of each
other. Nick Payton Walsh, CNN Rio de Janeiro.
(END VIDEOCLIP)
RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: People in Germany are in shock after a deadly train crash.
I was speaking to the man who runs the train operating company to ask him if he knows any more about what happened and more importantly, the latest
situation. That's ahead.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest in Dubai tonight. There's more "Quest Means Business" in just a moment when a steamy Beyonce song leaves Red
Lobster exposed to the claws of the internet. And "the Force" with Disney. The blockbuster "Star Wars" movie and how it
affected their blockbuster earnings. We'll talk all about that in just a moment.
Before it all, this is CNN and of course on this network the news always comes first.
We're just hours away from polls closing in New Hampshire but the granite state is known for surprises. And with nearly a third of Republican voters
still undecided, in the final days of campaigning there are very few certainties at this hour.
The two frontrunners Donald Trump and Bernie Sanders are far from shoe-ins. CNN's special coverage begins in just half an hour from now.
The government crackdown on illegal street food vendors which turned violent in Hong Kong on Monday as protesters clashed with riot police in
the shopping district of Mong Kok after officials tried to evict the vendors.
All joined the lunar New Year holiday. At least 54 people were arrested, 90 officers were injured and firearms were used by the police.
South Africa's top court will decide if President Jacob Zuma must repay $15 million in state money. The president has said the money was needed to
improve security at his home and he has offered to pay some of it back. These protesters say it's another show of corruption. Some upgrades to the
home included a swimming pool and amphitheater. [16:35:07] South Korea has recovered about 270 objects from the sea only a
few days after North Korea launched a satellite into orbit. The debris is believed to be part of the rocket that lifted the satellite into space. A senior U.S. defense official says the satellite is tumbling
in orbit and therefore essentially useless. In Germany tonight there's a search on to find out why two fast-moving
trains collided head on in Southern Germany on Tuesday. The crash left at least ten people dead and there were 17 others critically injured. CNN's Atika Shubert tells us what we know so far.
(BEGIN VIDEOCLIP)
ATIKA SHUBERT, CNN CORRESPONDENT: The mangled wreckage of the commuter trains both completely derailed in a head-on collision.
It happened just before 7 a.m. during rush hour. The trains were traveling at a top speed of 120 kilometer s an hour. Transport officials say drivers
on both trains were unable to see the other as they traveled around a bend on a single track line.
ALEXANDER DOBRINOK, GERMAN TRANSPORT MINISTER, VIA INTERPRETER: It is shocking that the two trains became wedged, one of the trains drilled into
the other one and the cab of the second train was totally torn apart.
SHUBERT: Police arrived within three minutes of getting the emergency call. The wooded mountainous area on the Austrian-German border was
difficult to reach. More than a dozen helicopters were needed to airlift survivors out. This
was the first accident for private train operator Meridian. Investigators will comb through the data recorders from the train, looking at two lines of inquiry. Whether it was an issue onboard the trains, human
error or technical malfunction or with the state-run rail infrastructure -- a possible signal failure.
CHRISTIAN SCHREYER, CEO, TRANSDEV: Usually there is an automatic system that automatically stops the train when you pass by a red signal. That's
why we don't know what happened. We assume that those signals weren't green but we don't know yet. On our trains there have been two train drivers each.
We had a train driver drive the train, driver instructor on the train. So usually not two people miss a red line and then there's that automatic
braking system that will work. So we really don't know exactly yet what has happened.
SHUBERT: This is the worst train accident in Germany in many years. The trains however were not as full as they normally would be due to a school
holiday and the annual Carnival celebration. Atika Shubert, CNN Berlin.
(END VIDEOCLIP)
QUEST: Now both of the trains were operated by the rail operator Meridian which is part of the Transdev Group.
The chief executive Christian Schreyer who you heard in Atika's report and joins me now from the town where the crash happened, and sir thank you. I
realize you have many duties this evening and we appreciate you taking the time to talk to me this evening.
What more do you know from the investigation?
SCHREYER: We still don't know what was the cause of the accident. Two black boxes of the trains could be secured and are recently with the
police. To be exact after the black - after these black boxes will be saved and examined by the police, we will know more.
But right now we still don't know if it was a technical problem or a technical problem and a human mistake in combination.
So there are a lot of speculations but we do not exactly know what really happened. What we did today was mainly taking care of all the injured
people could be saved, that we can help the relatives of the victims. But we don't know what exactly has happened.
Hello?
QUEST: The owners or the company that run - the company that runs the line Deutsche Bahn - they say that the line was checked, that the line was
safety checked only recently within the last week. Is that your understanding of the situation?
SCHREYER: No the Deutsche Bahn told us that they have checked the system as (ph) PCB system only last week but that's what Deutsche Bahn says.
We don't have more informations right now. So we don't know if the system worked today.
[16:40:03] QUEST: What will you do - right. What will you do to check the rest of your network - the rest of your trains? Because obviously you have
to - you have to deal with the situation as it is at the moment even though you don't know yet what caused the accident.
So what precautions, what measures can you take, if any?
SCHREYER: There is not a lot we can do right now. All our train drivers are trained properly, the communication with Deutsche Bahn works usually
quite well. You know, Germany has many thousands of kilometers of signal track lines and never ever something happened on these lines with this PCB system.
So we don't know what has happened today. We only know that usually the system works very good.
So there's nothing we can do right now before we exactly know what was the cause of the accident.
(CROSS TALK)
SCHREYER: (Inaudible) only do to support the prosecutor --
QUEST: And finally, sir, the injured and - right - and
SCHREYER: Hello?
QUEST: -- the injured, the people who are injured how your company is looking after and how your company is helping and supporting those people
who have been hurt?
SCHREYER: We will help everyone directly and immediately to - supporting them financially, supporting them mentally.
We don't know exactly who was injured because the police did not give us yet the personal data of the passengers. But we are saying we will receive
them within the next days and then we will directly support them financially and mentally wherever we can.
We plan to visit most of - (inaudible)
(CROSS TALK)
QUEST: Sir, thank you for joining us - we appreciate. Thank you for joining us , sir, we realize it's busy and we appreciate -
SCHREYER: Thank you very much.
QUEST: -- you giving us the time this evening. "Quest Means Business," we'll be back in a moment.
(COMMERCIAL BREAK)
QUEST: The earnings awaken and the Force is clearly there . Disney's revenue for the first fiscal quarter grew by more than expected to earn $15
billion. That's an extraordinary amount of money, and driving the success partly was the huge success of "Star Wars."
Brian Stelter is our senior media correspondent and he joins us now. Now I remember a quarterly report - the last quarterly report - from Disney which
roiled the market royally -
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Yes.
QUEST: -- and there was a lot of disgruntlement and complaining about the cable of the state - the cable networks, their ability to maintain their
growth and all of that. And then we get this report! Tell me what's the difference?
STELTER: Yes, well the difference of course is "Star Wars," it is the film division and this was really expected. So the success of "Star Wars" and
the performance of the film division was baked into the company's stock price.
We're actually seeing a decline a little bit in after hours trading and that is because of what you're describing - concerns about cable, concerns
about ESPN - the exact same reason why the company had a hard time in August and again in November and why media stocks in general have been
under severe scrutiny. [16:45:00] We saw drama at Viacom today, but staying with Disney for one moment, it looks like ESPN had another somewhat rough quarter, partly
because of tough comparisons but partly because of slightly lower advertising rates - advertising revenue.
So the stock is reacting to that, however CEO Bob Iger is saying he's actually seen a small uptick in ESPN subscriptions toward the end of the
year and early into January. So some good signs from Disney. And of course great news about "Star Wars." But as everything it's being overshadowed by the cable side of the
house.
QUEST: Ah, well you can't ignore the underlying trend with a bit of old flimflammery with a movie or two --
STELTER: (LAUGHTER)
QUEST: -- so the markets will say `All right, Viacom, now look - Sumner Redstone's gone from the top, there's a battle who was there afterwards,
but none of which solves the underlying problems at Viacom which, again, came into sharp focus, Brian.
STELTER: Yes, it's almost as if the executive changes are a sideshow for the core problems Viacom faces. Yes, Sumner Redstone as of last week is no
longer executive chairman. Now Philippe Dauman is the CEO as well as chairman.
So Redstone's starting to step out of the picture of both Viacom and CBS. But the headlines today were about another - yet another - tough quarter
for Viacom which owns MTV, Nickelodeon, Comedy Central and the Paramount Film Studio.
The company had hired time (ph) both on the film and the TV side, advertising and subscription weakness continues to affect the company. The
stock is down 21.5 percent today. I think what this was, was Wall Street rejecting Philippe Dauman even
though the board elected him executive chairman last week. Clearly there is a severe amount of concern about where that company is heading and whether it can reorient to the digital future.
You know one of the analysts at San (ph) Bernstein said they just don't have confidence that Viacom is going to be the company that reaches kids
and teenagers, young adults on tablets and phones. But they believe other companies are going win in that space, not Viacom. What did Viacom do today? They announced a deal with Snapchat, an ad sales
deal. So Viacom will help sell ads on Snapchat but the market did not think that
was a great sign, they did not think that was enough and the stock today was pummeled in a way I haven't seen a media stock pummeled in a long, long
time. Yes, Time Warner and Comcast and others are down somewhat today, but Viacom
was hit very, very severely and we'll see how Disney fares tomorrow morning now that Disney's earnings are up right now.
QUEST: Brian Stelter, and allow me dear sir to give the usual rubric. You mentioned Time Warner - parent company of this network.
Thank you, Brian.
STELTER: Thanks.
QUEST: Now, it's out with the old in Washington - well for the computers at least. President Barack Obama's embarking on a major cybersecurity
push. He's aiming to fix a creaking digital infrastructure that keeps springing leaks and he wants to cut a $19 billion check to so do.
(BEGIN VIDEOCLIP)
BARACK OBAMA, U.S. PRESIDENT: Our social security system still runs on a Cobol platform that dates back to the 60s.
Our IRS systems are archaic as with a whole host of other agencies that are consistently collecting data on every American.
If we're going to really secure those in a serious way, then we need to upgrade them.
(END VIDEOCLIP)
QUEST: Governments tend to be more analog than digital and the president's ambitions are extraordinary. Let our CNN Money cybersecurity reporter Jose
Pagliery whether or not, Jose, they can actually do it. He might get the money but is the system fundamentally - can you teach the new dog new - the old dog new tricks?
JOSE PAGLIERY, CNN MONEY CYBERSECURITY REPORTER: You can. I was actually very happy to hear that this is on the table now because one of the biggest
problems in government is that you've got this leaky infrastructure. It's crumbling at the bottom and you build things on top of it - all these new features. But if it's not safe at the core, that's where the hackers
get in. Not patching software, using really old computers that can't be upgraded anymore.
You know, later on in that meeting, what we didn't show was that the President mentioned how there are 400 people - let's just stick to the
summary (ph) for a second - 400 people whose job it is at the Social Security Administration just to deal with old gear, just to deal with the
old technology that can't be upgraded or is having a hard time upgrading because it's either unsafe or insecure.
QUEST: All right. I saw the story over the last 48 hours where the President is even complaining - or his daughters are complaining - about
the Wi-Fi strength at the White House, saying that there are parts of the White House where they have difficulty getting a decent signal.
Now, you can't even get a decent signal at the White House -
PAGLIERY: That's pretty funny.
QUEST: -- it doesn't bode well for your cybersecurity, Jose.
PAGLIERY: Oh, I don't know. I think that's a one off (ph). But you know what? The real issue here is that the government is - hey look, this
proposed budget is to spend another $19 billion on upgrading, really focusing on cybersecurity.
[16:50:03] And upgrading old gear, paying for more cybersecurity professionals to keep an eye on networks for incoming hackers.
And the government needs this. In fact, it's late to the game. When the office of Personnel Management was broken into and lost more than 21
million federal personnel records last year, that was a wakeup call. In fact this should have been done years ago.
QUEST: Jose Pagliery joining us from New York. Thank you, sir.
PAGLIERY: Always.
QUEST: Beyonce served a U.S. restaurant chain a gift on a silver platter. And then having received the gift, the company promptly dropped it.
Before we get to that, allow yourself the brain power you can Make, Create, Innovate.
(COMMERCIAL BREAK)
(BEYONCE MUSIC PLAYS)
QUEST: Yes, we can hardly bear you play the entire song from Beyonce. It's got so many words that you wouldn't want to hear on a family program.
But Red Lobster which is referred to in that song - the restaurant - is enjoying some Beyonce bounce after the superstar gave the seafood chain a
shout out in her new song when she performed it at the Super Bowl on Sunday.
Although it's the company that'll be singing all the way to the bank, executives says sales spiked by more than a third.
Well, that's the good side in a way. But the company Red Lobster's been widely mocked for this tweet. It's trying to make a pun out of some other
Beyonce lyrics. And it took several hours before the tweet was - was actually published.
All of which makes me ask Kim Lopdrup, the Red Lobster's chief executive. Kim's with me now from Orlando.
Sir, this really is the story that giveth and taketh. Because on the one hand, you get this remarkable shout out in many ways even though she
doesn't actually sing that part of the song at the Super Bowl. And then it all goes a bit wrong for you. What happened?
KIM LOPDRUP, CEO, RED LOBSTER: Well, Richard, first of all thank you for having me on the show, and let me say first of all what an incredible week
for Red Lobster. You know, we went into the week having no idea this was going to happen and we were delighted to find out Beyonce is such a fan - really delighted to
find that so many of her loyal fans have become Red Lobster fans. You know, we're very grateful to her for that -
QUEST: Right.
LOPDRUP: -we think this really speaks to her power as a star and the power of pop culture and social media in general. Yes.
QUEST: Right, on this question of social media. We're a business program, sir, so we need to talk business, and on this question, do we learn from
this that the social media has to be much more proactive for companies like yourselves.
I mean, you've obviously learned from this lesson that if something like this happens, you've got to move faster.
LOPDRUP: Well, you know, I think probably we could have moved faster, but I think the bigger lesson is that a genuine endorsement has a lot more
power than paid endorsements. [16:55:00] This was organic, we had nothing to do with creating it, and I think that's one of the reasons it's resonating so well.
We are absolutely delighted with the incredibly strong sales results. And, again, because you're a business program, our business was doing well even
before this. We have had positive comps every quarter since we became an independent
company. But there is no question, we've seen a meaningful acceleration as a result of the Beyonce bounce, and we are very grateful to her for that.
QUEST: And we are grateful to you, sir, for taking the opportunity. I was going to pop off to the Red Lobster here in Dubai, but unfortunately it's a
kilometer off me - a bit further - than I was able to get to. Thank you, sir, for joining us.
(CROSS TALK)
QUEST: Thank you. Red Lobster (inaudible).
LOPDRUP: It's at Dubai Mall, Richard. I hope to see you there, I can get you a good table.
QUEST: Yes, well never mind a good table, just offer to pay the bill and I might pop along - no, seriously. I'll go along and I'll pay it me'self.
Thank you, sir. Dubai Mall which is just about 15 kilometers from our studios here in
Dubai. We'll have a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." There is something deliciously tasty about the Red Lobster-Beyonce story.
First of all, because of what she did at the Super Bowl. Secondly, because of the reaction of the company. But finally, because the lyrics around
when she says Red Lobster are simply vulgar and offensive and can't be broadcast.
And everybody has managed to make a time of money out of that. And that's "Quest Means Business" for tonight. I'm Richard Quest in Dubai. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's
profitable. I'll see you tomorrow.
END
