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Quest Means Business
Trump, Clinton Dominate Ahead of Super Tuesday; Protesters Interrupt Trump's Speech; Migrants Force Open Fence on Macedonia Border; Syrian Opposition Says Government Violated Truce; Reformist Win Key Seats In Iranian Elections; North Korea: American Confesses to Hostile Act; Eurozone Slips Into Deflation; Deflation Increased Pressure on ECB; U.S. Stock Fall; Saudi Arabia Boosts Oil Prices; Iran Looking to Boost Oil Output; "Spotlight" Wins Best Picture; 88th Oscars Attracts Lower Viewer Numbers; "Spotlight" Win Seen as Victory for Journalism; Starbucks to Open in the "Country of Coffee"; Starbucks to Open Cafe in Italy
Aired February 29, 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]
RICHARD QUEST, HOST: The Dow closes down 106 points. It was very late selling in the day which has taken the market to (inaudible). Gotham,
they're advertising the New York Stock Exchange. Look at that, a robust gavel from Gotham bringing trading to a close. It is Monday. It is the 29th
of February. Leap year.
(BEGIN VIDEO CLIP)
QUEST: Will Super Tuesday become Trump Tuesday? It's looking very likely he will secure the nomination. You're going to hear views on that in this
program.
Also, Argentina gets the vultures off its back. Only three months into the Macri, Presidency. And better latte than never. I thought it was funny.
Starbucks decides to open a shop in Italy.
(END VIDEO CLIP)
QUEST: I'm Richard Quest. Of course I mean business.
Good evening. We begin tonight with just the United States days away from a two-horse race for Presidency possibly. It's the eve of Super Tuesday. And
that's when 13 states and one territory heads to the polls, the primaries. And whichever way you look at it, it's starting to look more and more
likely that Donald Trump and Hillary Clinton are going to be the two nominees for their respective parties and will go into the general election
with the face-off.
(BEGIN VIDEO CLIP)
QUEST: The new CNN/ORC polls show the two are well ahead of their closest competitors. This is how it looks on the Republican side. Just look at the
numbers. Trump dominates the Republican field at 49%. In fact, if you add up all, the next three, they don't really come straight to it. So he is
absolutely head and shoulders above Rubio, Cruz and Carson at the moment. And the supporters say they're obviously enthusiastic and committed.
Interestingly, also in the poll, the majority of Republicans who don't currently support Mr. Trump say they would get behind him if he gets the
nomination which is perhaps the most important aspect. Because many say they don't want Trump but if he becomes the nominee, the view is that they
will fall in behind. And that is a very sizable lead going into Super Tuesday.
On the Democrat front, Senator Clinton, former Secretary of State, extending the lead in the Democratic race. Almost all democrats are
prepared to vote for whoever wins. But you've got Hillary Clinton, 55 over 38. Clinton and trump have expressed confidence in their campaigns ahead of
Tuesday's massive delegate bonanza.
HILLARY CLINTON, U.S. DEMOCRATIC PRESIDENTIAL CANDIDATE: I believe that America is great. Right now what we need is to be whole. We need to be
whole, where all of us have a place. Where everybody feels like we're all in this together. That is what I want to do in this campaign and it is what
I want to do as your President.
DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: So, you know, CNN has just released a poll an hour ago. And it even surprised me, I'll tell you.
So there it is, okay, folks. 49, 16, 15, 10, 6. It's looking pretty good.
(END VIDEO CLIP)
QUEST: The mood at that rally that Trump had, did not stay quite so good natured.
If you take a look at the pictures, there were dozens of protestors who interrupted Mr. Trump's speech.
(BEGIN VIDEO CLIP)
QUEST: Activists were escorted out of the building. And one can assume if he becomes the nominee we're going to see much more of this sort of
disturbance in his various rallies in the months - weeks and months ahead.
Mark Preston is CNN Politics Executive Editor, joins me now from Washington.
(END VIDEO CLIP)
QUEST: All right, mark, I know you're going to caveat me that it's not over until it's over. But it's starting to look remarkably as if it's over.
MARK PRESTON, CNN POLITICAL EXECUTIVE EDITOR: Right, so let me caveat at you, that it is not over until it's over. But you are right Richard, at
this point right now, if you are to be putting your money on any candidate or candidates at this point, you would be looking to put it behind Hillary
Clinton and behind Donald Trump for two different reasons.
One, Hillary Clinton now has a small delegate lead over Bernie Sanders, the Vermont senator. However what she does have in her back pocket is about 500
other votes. We don't have to get too technical about it, that she can pull out at any time. These votes are basically governors, senators, elected
democratic officials who have pledged their support to Hillary Clinton. And if you look at the contest for the Republican and Democratic presidential
nominees, it's all about mathematics. So Hillary Clinton needs to get to a certain threshold. If she has these votes that Bernie Sanders doesn't have.
With Donald Trump what you're seeing right now is an amazing bit of support that's blowing at his back and pushing him along.
[16:05:20]
QUEST: Now, how -- just let's go into the cephalogical stratosphere in that sense. How does any of the other candidates manage to beat Donald Trump at
this stage? Is it -- I mean, it's mathematically possible. But it's not logically possible.
PRESTON: No, I don't think it's logically possible but I will tell you there are Republican establishment types who are trying to figure out how
to stop Donald Trump from getting the nomination. And how you do that is you try to deny him the number of delegates, the number of votes that he
needs in order to be crowned the Republican Presidential nominee.
(BEGIN VIDEO CLIP)
PRESTON: If that happens, then it would go to the Republican Convention in July in Cleveland, Ohio, and they would try to put somebody else up in
front of Donald Trump.
QUEST: But how do you deny him that? If I'm looking at the map now of the Republican Party for tomorrow. Its 595 delegates are up. Now if he sweeps
up a large number and goes on through the rest of the country, sweeping up large numbers, how do you go to a brokered convention once he gets to --
once he gets to the threshold?
PRESTON: Well once he gets to the threshold, game over because he will already have the support.
(END VIDEO CLIP)
PRESTON: However Richard, what they are going to try to do is you will at least see after March 1st, after tomorrow night, after we see the results,
you will see an incredible amount of effort to try to consolidate all the remaining candidates behind one candidate. That candidate right now appears
to be Marco Rubio. How do you do that? Then you try to get as much money behind Marco Rubio as possible.
(BEGIN VIDEO CLIP)
PRESTON: And also, we should point out to our viewers around the world who are watching tomorrow night, just because somebody wins a state doesn't
mean they win all of those delegates, that doesn't happen until later in the month. You only get awarded delegates based upon the percentage of your
win. So Donald Trump for instance could win Virginia, the state of Virginia and only walk away with 16 delegates and Marco Rubio perhaps could get 10
because the margin of victory is not as large, Richard.
(END VIDEO CLIP)
QUEST: And finally, just remind me, when trump goes against Clinton in any polls, are we seeing a definitive trend as to who wins?
PRESTON: No, we aren't. And it's interesting because a lot of people think that if Donald Trump does run against Hillary Clinton, that in fact he will
be a loser, that he will not win.
(BEGIN VIDEO CLIP)
PRESTON: I think that's crazy conventional wisdom at this point. You pointed out yourself, these rallies that Donald Trump is being able to form
all across the country, 25,000, 30,000 people showing up for him. Who knows what happens in November. What we do know is this; at the electorate, the
voters here in the United States are so angry right now somebody like Donald Trump could perhaps ride that anger to victory in November if he
wins the Republican nomination.
(END VIDEO CLIP)
QUEST: I'm asking all, and I use this word with respect, I'm asking all seasoned observers of American politics like you, Mark, have you ever seen
anything like this before?
PRESTON: Absolutely not. And if anyone tells you otherwise, they are absolutely lying. I'm going to tell you Richard, going back to 2008, I
never thought I would see an election like we did. The first black American elected President of the United States, the first woman almost elected
president of the United States. I thought that we had reached the peak of history. Well I've got to tell you what, we are now at the peak of history.
QUEST: For the moment. But there's another peak around the corner. Good to see you sir, thank you. We need your help as we wend our way through all
this.
Now I asked the former U.S. Treasury Secretary, Larry Summers, how the candidates should address this anti-establishment sentiment and anger that
Mark was talking about. It's felt deeply here by the American middle class who feel left out, feel badly done to, feel that they are victims of
inequality.
(BEGIN VIDEO CLIP)
LARRY SUMMERS, FORMER U.S. TREASURY SECRETARY: I think the only approach to that is a steady reasonable recognition of serious problems with meaningful
commitment to do things about those problems. $10 trillion tax cuts are extraterrestrial as solutions to these kinds of problems. Blaming our woes
on foreigners doesn't get us closer to addressing our economic challenges. Seeking to disenfranchise, condemn ridicule and trivialize the female half
of our population doesn't get us any closer to solving these problems. Seems to me this isn't fundamentally about Republican or Democratic
choices. It's about whether we are going to govern going forward within an American tradition of vigorous honest issues based debate and compromise on
a way forward.
[16:10:40]
QUEST: When you look at the tax plans that are on offer, if you like, particularly of course Donald Trump's tax plan, which aims he says greatly
simplify the tax code, fewer bans, fewer deductions, but a much greater cut level, do you see anything of sympathy in Mr. Trump's plans that you
believe could be workable?
SUMMERS: I think the impulse to simplicity is a good impulse. The impulse to have a lower rate with broader base is a -- is a good impulse. But
impulses have to be consistently with arithmetic. And I think everyone of either political party who has analyzed Donald Trump's tax proposals have
found them unprecedented in their fiscal irresponsibility. This is way beyond voodoo economics. Of the kind that was put forward in the 1980s. I
can't conceive it would ever be legislated in the United States. But the fact that it is being put forward is itself I think very troubling.
QUEST: On this question of inequality, do you see the -- this as being a strong argument that the Democrats can put forward in an election year when
they've held the White House for the previous eight years, even though not necessarily held congress so they've obviously been stymied. But does the
inequality argument or at least position play to a Democrat in this day and age?
SUMMERS: I'm going to leave the -- I'm going to leave the political judgment to others. I think there are a variety of proposals that President
Obama has put forward ranging from tax reform proposals to business taxation to greatly expanded infrastructure investment to raising the
minimum wage to providing basic assurance for family leave that have been blocked during his years and that will be strongly advocated, I believe
whoever runs as the Democratic Presidential candidate and I think are much more likely to be achieved for the country with a Democratic
administration.
QUEST: Larry Summers talking to me earlier today.
Three months ago, the President of Argentina, the new President, President Macri said he was going to negotiate with the bond holders in good faith,
and today we saw the results of those negotiations.
(BEGIN VIDEO CLIP)
QUEST: A deal was done. We'll have the details after the break.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
[16:15:30]
QUEST: Argentina has agreed to pay $4.5 billion to a group of American hedge funds which brings a bitter death dispute to an end 15 years after it
began. Now you'll remember 2001, Argentina defaults on $95 billion of debt back at the turn of the century. When a country defaults, there is nothing
bond holders can do. There was an agreement where some of them did get paid out and there was a restructuring of the bonds. But a group of hedge funds
set out to challenge that restructuring. They bought and now sued for their money.
Argentina's last President Kirchner, Cristina Kirchner, labeled those hedge funds as financial terrorists and refused to pay anything to them. As a
result the economy was shut out of world bond markets and crushed the economy without foreign investment.
Now the new President, Mauricio Marci vowed to settle the dispute and bring Argentina back into the global economy, as he told me when I spoke to the
new President in January.
(BEGIN VIDEO CLIP)
MAURICIO MACRI, AREGENTINA PRESIDENT: It's part of this process is important. That's why I send my team right away in the first month of my
government, to New York to say here we are, we want to reach a settlement at the New York courts, defer agreement and they had been postponing. Now
they have postponed the meeting for the 1st of February. But we are ready. Now things have changed. In the past, the previous government didn't want
to arrive at an agreement and the bond holders, yes, now we want, and they are delaying.
QUEST: But you think you can get a deal?
MACRI: I expect that we will have the - have the space to get a deal. That's why we have a mediator. I think that the judge designated a mediator
to find an agreement.
QUEST: I guess my question then to rephrase it is, you're attending this meeting, you're holding your talks in good faith?
MACRI: Absolutely.
QUEST: Unlike the previous government which wanted nothing to do with them.
MACRI: Exactly. We're in good faith, we want to cancel, all the conflicts of the past.
(END VIDEO CLIP)
QUEST: That good faith clearly proved to be the key because the deal was reached and if it's approved by Argentina's congress, then it will pay the
hedge funds 75% of their former claims, 25% of a haircut. Speaking earlier, the mediator, Daniel Pollack, explained how difficult it was to reach this
agreement.
(BEGIN VIDEO CLIP)
DANIEL POLLACK, ARGENTINA DEB SETTLEMENT MEDIATOR: It seemed like 1,000 years to me. They took every hour of every day of my time from the time
that I was first approached in December by the new administration to reach peace between these warring parties.
(END VIDEO CLIP)
QUEST: CNN En Espanol's Maria Santana joins me now.
MARIA SANTANA, CNN ESPANIOL: Hello, how are you?
QUEST: Come on let's do the deal first and then we'll do the politics.
Those who held out have got considerably more, 75%, than those bond holders that took the deal back in 2001.
MARIA SANTANA, CNN EN ESPANOL CORRESPONDENT: Right, when the other bonds restructured their debt in 2005 and 2010, they basically agreed to about
30% of the face value of this debt. And this really created a problem because the holdouts were asking for full payment. Argentina said no way,
we're going to pay them. But if they did pay anything to these holdouts or agreed to pay them the full value, then the fear was they would also have
to pay the others.
QUEST: Right, so what happens now they've pay 75% to these. Will the others say, hang on, now we want more?
SANTANA: The thing is the others haven't even been getting paid at this point because there was an injunction by Judge Grecia who was overseeing
the case here in New York. He gave -- he put in an injunction so that the government couldn't pay the ones who did restructure the debt until they
came to an agreement to pay the holdout. So they're not even seeing any money at this point.
So you know we yet have to see what their reaction is going to be to this. But it could set a bad precedent where any bonds -- defaulted bonds these
bonds could say you know we're going to go to court, we're going to ask for all of our money and it will be harder to rescue governments.
QUEST: Where's Argentina going to get the money from, the $4.5 billion for this?
[16:20:04]
SANTANA: Well, they have to raise up some capital obviously. They also have said that now that the injunction has been lifted, because this
injunction prevented them from issuing new bonds. But they're also going to issue new bonds for this debt.
QUEST: Let's do the politics.
SANTANA: Yes.
QUEST: This is a tremendous. I mean, it's a lot less than the $10 billion that people were talking about originally. So it is a tremendous victory
for President Macri, 3 months into his administration, 15 years after the two Kirchners failed him.
SANTANA: It is, and I asked Daniel Pollack at this press conference what the turning point was. And even though he said well the turning point is
the signing of agreement, he did -- I think it is widely understood that the turning point came with the new administration. This is an
administration that ran a campaign promise of them going to -- of restructuring this debt, of coming to an agreement of letting Argentina
enter once again enter the international markets. And, as you know, Christina Fernando Kirchner staunchly against dealing with the holdouts and
she even made it into a big political war saying you know, this was just North American imperialism and big governments trying to control smaller
governments and he came in very willing to talk to them. And it did seem to happen quickly but it did take a lot of time, a lot of hours as we heard
Daniel Pollock say there.
QUEST: Cristina, thank you for watching this so closely for us. Come back when there's more. Thank you very much.
SANTANA: Thank you.
QUEST: Argentina knows the risk of hyper-inflation all too well. And another country knows it even better in many ways, Zimbabwe where local
traders are forced to use all kinds of currencies after the collapse of the Zimbabwe dollar. CNN Money's African correspondent is Eleni Giokos and she
sent us this dispatch from Harare.
(BEGIN VIDEO CLIP)
ELENI GIOKOS, CNN MONEY AFRICAN CORRESPONDENT: Zimbabwe has nine currencies which are legal tender but not all of them are accepted on the streets of
Harare. And just a stone through away, I'm going to find out just how many different currencies are accepted in average retail stores. What about the
Chinese currency Yuan?
UNIDENTIFIED MALE: I don't know. Dollars and euros.
GIOKOS: Dollars and Euros.
UNIDENTIFIED FEMALE: Dollars and rand. You take dollars and rand, you take dollar and euros? Would you accept Chinese currency?
UNIDENTIFIED FEMALE: I don't want Chinese currency.
GIOKOS: Did you accept rand previously though?
UNIDENTIFIED FEMALE: Yes.
GIOKOS: So when did you stop?
UNIDENTIFIED FEMALE: I think when it started falling last year.
GIOKOS: Zimbabwe didn't always have a global currency mix. In the mid-2000s the country printed its way into hyperinflation with the local Zimbabwean
dollar devaluing at a rapid pace.
This is a one hundred trillion Zimbabwe note, you can't find this in the streets of Zimbabwe anymore, it was basically abolished in 2009 after
inflation hit 230 million percent.
JOHN MANGUDYA, GOVERNOR, ZIMBABWE RESERVE BANK: It was so traumatizing. The money which was being printed was to purchase the foreign currency from the
market. The exchange rate it moved from as low as 250 (inaudible) to one U.S. to around - ending like 350 (inaudible). That's why we changed from
the currency to the multiple currency system to ensure that it's stable.
GIOKOS: And recently there were rumors that Zimbabwe would ditch the greenback for the Yuan. The Yuan actually isn't accepted from what I
understand and a lot of people haven't even seen a Yuan.
MANGUDYA: Your observations are very correct. So we're saying that if - since you can import your products in the rand from South Africa, you can
use the rand. If you want to import and export to the China zone, you also can use Yuan for trading purposes. The U.S. is the initial (inaudible).
GIOKOS: There's a demand and liquidity crunch in Zimbabwe with deflation at -2.3% in January and no local currency means no monetary policy tools.
MANGUDYA: How then do you grow an economy and a (inaudible) Funds need to be purchased for the purposes that they intended, and that we have
minimized leakages from the economy. (Inaudible) the (inaudible) become much more.
GIOKOS: Zimbabwe might be years away from reintroducing its own currency. In the meantime, it has these coins called bonds. For each coin in
circulation, there's an equivalent U.S. dollar coin held in reserves just like the days of the gold standard. Now there are $10 million worth of
these in the country. It seems that when feared currency fails, going back to basics is the only option.
Eleni Giokos, CNN Money, Harare.
(END VIDEO CLIP)
QUEST: Now, What's App calls itself a cross platform mobile messaging app?
(BEGIN VIDEO CLIP)
QUEST: Well, if your platform is Blackberry, you're no longer cross platform. In fact you might just be cross. Because What's app saying
(inaudible).
(END VIDEO CLIP)
(COMMERCIAL BREAK)
[16:26:25]
QUEST: It was an unwelcome message from What's App to blackberry which basically said, hang on, we don't need you anymore. What's App says it will
stop supporting its messenger on Blackberry's by the end of the year.
Now Blackberry's operating system isn't the only one being dropped. But it is the only one under active development. The reason is, according to
What's App, the change is necessary as it develops new features.
Seven years since What's App began and the smartphone landscape looks very different. Blackberry's operating system powers just a third of 1%. A third
of 1% of smartphones sold globally.
Blackberry itself has actually started using competitors operating systems the new (inaudible) runs on Google's android software, and that will be
supported under the new What's App decision. So let's put all of this together with Shelly Palmer. Hello Shelly Palmer, Digital Living.
QUEST: What happened?
SHELLY PALMER, HOST, SHELLY PALMER DIGITAL LIVING: Is that a phone?
QUEST: Stop it.
PALMER: I'm sorry -
QUEST: Stop it, behave.
PALMER: What is that?
QUEST: Behave.
PALMER: All right, if you insist.
QUEST: Now, why did they do this? Why did they decide? It can't be that difficult to support existing --
PALMER: Actually, in practice, it is. Because there's customer service, you have to be really careful that all of the features you want to bring
forward will work backwards to a point. People start to expect a level of service. And even though you can't expect anything on that Blackberry
you're using, other people might and they don't want to get into that so it's easier to end of life it and just call it a day.
QUEST: All right, so they've called it a day. How damaging is it for Blackberry?
PALMER: Look, how bad is Blackberry doing so far? They actually had a fairly decent quarter last quarter.
QUEST: And John Chan - John Chan said specifically they are not going out of business.
PALMER: Well, they have a lot of cash. And they have been doing some really good enterprise software of late so their q & x product and some of their
enterprise products are extremely good.
But from a hand set maker's perspective, they're done. I have friends who just love the keyboard, who will not give up their Blackberry's. Some
people who I love dearly just won't let them go. But Richard, honestly, you probably should think about getting a real device to carry with you.
Something that has like a large glass screen. That has many capabilities, including an awesome camera.
QUEST: Let's talk about What's App.
PALMER: OK, let's.
QUEST: How much did they pay for it?
PALMER: What's App?
QUEST: No, no, when What's App was sold?
PALMER: It was 16 billion.
QUEST: 16 billion. 20 billion with everything else.
PALMER: Plus -- $3 billion when you get (inaudible)
QUEST: Yes, so is What's App ever going to make money when you bear in mind it was the best part of 20 billion that was paid for it?
PALMER: Here's the thing, a --
QUEST: Has it been a - has it been a - has it been a good purchase?
PALMER: It's a brilliant purchase. It's not even a good purchase, it's a brilliant purchase. Go find me 450 million, 500 million, or in this case, 1
billion online users a month. When the world is about scale, Facebook has really made some of the best acquisitions ever. And when the world is about
utility, they've made even better acquisitions. What's App is an amazing utility.
QUEST: OK, but I use What's App on this other -- just so you think I'm not a complete --
PALMER: Oh, wait you have something.
QUEST: Stop it, behave. How does What's App make money out of me?
PALMER: They will.
QUEST: No, no, but they're not at the moment. I send What's Apps to you, I'll send What's Apps to anybody out there if you choose to What's App me.
PALMER: So here's the thing, when you don't know what exactly is happening, you are the product. Right now Facebook is collecting a frightening large
amount of data about you. Who you know, what you know, how you do things, what you do, when you do them. At a center point, they will anonymize your
information, they will sell that information to the highest bidder fully anonymized. You will get value, because otherwise you leave WhatsApp.
That's been their model. That will be their model. They will come up with ways to monetize all of their products.
QUEST: But they haven't so far.
PALMER: Well they don't need to so far. What they need to do right now is understand what the dataset looks like. Remember we are in a world where
the velocity of data is increasing and will always increase. That's where the money is Richard. It's always in the data.
QUEST: That's that full disclosure, what are you using?
PALMER: This is an iPhone something or other. Wait it's a 6S plus. By the way I also have a Samsung Galaxy S6, and a 7 is coming soon. They're
great devices, but I don't have a Blackberry anymore, Richard. For some reason I don't know why I don't.
QUEST: Oh, wait. Just go, just go, while we're still on speaking terms with each other. Good to see you.
PALMER: Good to see you too.
QUEST: The pressure is on the ECB, European Central Bank. Deflation or at lease disinflation, possibly deflation is gripping the Eurozone. In a
moment QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:31:00] RICHARD QUEST, CNN ANCHOR: Hello, I'm Richard Quest. Of course there's more QUEST MEANS BUSINESS in just a moment.
When the awards for the third least watched Oscar ceremony ever goes to last night's awards.
And you can find it in over 65 countries, but not in Italy. Starbucks takes on its toughest challenge to date.
For all of that you're watching CNN, and on this network the news will always come first.
The new CNN/ORC polls shows that Donald Trump and Hilary Clinton have extended their leads ahead of their closest competitors. On the eve of
Super Tuesday when election contests will be held in more than a dozen states, Clinton and Trump told supporters they are ready to be Commander
and Chief.
(BEGIN VIDEO CLIP)
HILLARY CLINTON, U.S. DEMOCRATIC PRESIDENTIAL CANDIDATE: If I am so fortunate enough to be the nominee, I will turn my attention to whomever
the Republicans decide to nominate. And I can tell you this one advantage I have is they've been me for 25 years and I'm still standing.
(END VIDEO CLIP)
QUEST: Dozens of protestors brought Donald Trump's speech to halt at the in Bradford, Virginia. The crowd was escorted out of the building after
linking arms and shouting. The incident started after Trump asked if an activist who had interrupted him was Mexican.
[16:35:00] Scores of people have broken through a barbed wire fence on the border of Greece and Macedonia after a gate was forced open. Security
forces fired teargas and rubber bullets to keep the crowds at bay. Macedonian officials now say the border has been closed once again.
Syria's main opposition group says government forces have violated a ceasefire which began over the weekend. It says the government and Russian
forces launched airstrikes on the opposition territory. The United Nation Secretary General says by-in-large the ceasefire is holding.
Iran maybe preparing to usher in a new political era. With early election results indicating major support for reformists. It's a big nod of
approval to Hassan Rouhani who signed last year's landmark nuclear deal, bring sanctions relief to Iran.
North Korea has released a video showing an American confessing to trying to steal a political banner. He is accused of committing a hostile act.
Pyongyang say the U.S. Government encouraged him. It's unknown if his confession was forced.
Inflation in the European economy appears to be deflating once again. Whether you look at it as a balloon or whatever. Eurozone inflation is
down. Prices were down 2/10th of one percent points in February. Now it's the first negative reading since September. So the job of course for Mario
Draghi is to get inflation, that's what he wants to do. He wants to get it back to the two percent target rate, medium term target rate that the ECB
has set itself. Unfortunately down here you've clearly got prices falling not rising.
There are three ways that you can get them to rise again. The first of course is that he can extend his bond buying program. He can buy more
bonds. He can buy more for each month, and he can extend the deadline. And he can simple talk it up simply by saying he's going to go for longer.
He can widen the range of bonds that he's going to buy. Corporate bonds, mortgage back securities, more of them, but that would be controversial.
Because obviously, cooperate bonds do have anywhere near the safety and security for the ECB balance sheet that buying government bonds actually
has to.
And he can cut interest rates. Perhaps the most controversial of all. Already got negative interest rates at the margins on the deposit. Further
negative interest rates would hurt bank earnings and who know whether actually it would indeed be successful in whoosh up it goes.
Joining me know from London is Vickie Pryce, the Chief Economic Advisor at the Center for Economic and Business Research. He's clearly going to do
something, and they've already said at the governing council that they're going to review the existing policy at the March meeting. What does your
hunch tell you they're going to do?
VICKIE PRYCE, CHIEF ECONOMIC ADVISOR, CENTER FOR ECONOMIC AND BUSINESS RESEARCH: I think they're going to do a bit of everything. So in my view
their probably going to increase the amount that they buy every month. So from the 60 billion to something larger, maybe 100 billion. They will
reduce and Draghi will already have been discussing this, reduced interest rates even further, as you rightly said. The central bank deposit rate is
negative already and it will be even more negative, not by much, by a little bit more. Which of course would be quite bad for the banks, which
are not really making any serious profit anyway. Low interest rates are bad news for them.
But they will also probably extend the types of bonds they buy, just like you said, in order to have a wider impact. But overall I think, there is a
limit to what else can be done in terms of stimulating the economy. I think Draghi is getting to the point, which is the head of the European
Central Bank, where he has been saying and hinting that other things need to happen too. And I think the most important thing that needs to happen
is that there should be some fiscal expansion in Europe to get things moving again. So far we've seen a little bit of it happening, but not
much.
QUEST: Ok, the real problem of course is any of these unconventional, non- traditional measures would have been very affective at the beginning as indeed the United States saw. But four, five, six, seven years down the
road when balance sheets and the -- I think as your economists call it -- the transmission mechanism is clearly not working. He can do all he likes.
He's not going to get this rate up.
PRYCE: Well he may slowly get confidence improving. The problem is that right confidence in the European Union, particularly in the Eurozone is
declining. It's dropping.
[16:40:00] So what he's trying to do is say, well interest rates will stay low for quite some time so go out and borrow if you can, and spend it if
you can. So he's trying to influence expectations. And his real problem is -- and you're quite right about the transmission mechanism is that we're
entering a phase where first we had the decline of course in oil prices, which has had quite an impact on the inflation rate, and bringing it down.
Second we're our secondary impacts. In other words all those companies that are not spending, which have been hit in terms of profits and now
spending even less.
And the third one you have is that consumers are looking at prices and saying, well they will decline further. We're not going to spend anything
until we know where the bottom is. That's sort of Japanese impact. And that is really his problem. That he has to do something. Without doing
anything we probably would have recession right now in the Eurozone. So he needs to carry on doing what he's doing and trying to influence
expectations upwards if he can. He may fail completely.
QUEST: He's biggest -- and you touched on this in your first answer. His biggest problem is economies like Germany not being willing to expand their
own fiscal deficits or in their case surpluses. And even countries like France which are claiming that they don't have fiscal headroom. But that's
his real problem isn't it?
PRYCE: Absolutely, the interesting thing is that France is trying to spend more. Italy itself is telling the European Commission to get lost each
time the European Commission tries to stop Renzi, the Prime Minister, from lowering taxes, which he has done. So there is a bit of a revolt against
the very, very tight austerity that has been trying to be imposed on. Even the bigger countries in the Eurozone, let alone Greece and so on. So we
are seeing some of that happening. And of course France has in fact just now band and trying to reform labor laws to make it sort of tougher for
people to -- or rather easier for people to be sacked. So it's been very, very careful with what it does.
But what we've seen interestingly enough is the migrations crisis is already beginning to some loosening in terms of spending. Germany itself
is now taking about possibly having a deficit this year rather than the balance it has achieved so far. So there is some pressure to change, and
there is a very good excuse, which the migrants. Until now nobody wanted to do anything very much, but I think now they're being forced to.
QUEST: And we will talk more about that as the spring wears on. And we're very glad to have you with us to help us understand the machinations of
that need to be. Thank you Vickie, happy to see you.
On Wall Street there was a drop in healthcare stocks and that pushed the major markets all lower. Take a look it was a fascinating day, because
you've got this bit in the morning and got most of the day the market is up. And then you get this large fall late in afternoon. Oil prices were
up four percent. Saudi Arabia is pledging to work with other producers to limit volatility. You can see up 4.3 percent, $36.62.
Basically oil has now been up the best part of at 30% is something like 10, 12 days, two weeks. Saudi Arabia and other OPEC members are wanting to
freeze output in the bid. Iran of course is still having none of the idea of a freeze. As the sanctions are lifted the Islamic Republic wants to
pump more not less. Exclusively speaking to CNN's Frederik Pleitgen was Iran Deputy Oil Minister, and he told him the plan to freeze output was
quite simply a nonstarter for Iran.
(BEGIN VIDEOTAPE)
AMIR HOSSEIN ZAMANINIA, IRANIAN DEPUTY OIL MINISTER: We do not intend to sanction ourselves again, after coming out of the sanctions, by saying that
we are not increasing our production. Because that was the whole idea of sanctions. To limit our productions and our supply of oil to the
international market. We are not going to impose that sanction on ourselves voluntarily.
FREDERIK PLEITGEN, SENIOR INTERNATIONAL CORRESPONDENT: Does that mean you're sticking with the one million a day goal?
ZAMANINIA: We want to increase our production to the level that we used to produce prior to the sanctions. And at that time then we can get together
and discuss and strategize for the future.
PLEITGEN: How much foreign direct investment are you going to need to do that? Because there is considerable investment that will be necessary in
your oil and gas infrastructure.
ZAMANINIA: Iranian market, Iranian oil industry is very attractive. Our production cost is low. Most of our field are still untapped. And we a
have very well placed engineering tradition in Iran.
[16:45:00] With high degree of engineers being educated from Iranian colleges. Our human resources is excellent, unparalleled in the region and
we have no doubt that we can attract at least $40-$45 billion per day -- per year.
PLEITGEN: Working together within that system with Saudi Arabia is that something that you see as possible in a fruitful way?
ZAMANINIA: I think that political developments there is a momentum now also in the region, if the ceasefire holds in Syria it may allow for
further political discussion within the stakeholders there and I hope that through a process of reinforcement of politics and economy of oil, things
could move forward.
(END VIDEOTAPE)
QUEST: Now the top movie at this year's Academy Awards, it pushes the journalism industry right into the spotlight.
(COMMERCIAL BREAK)
QUEST: Lights, cameras, action, Sunday night Oscars have controversy, glamour and they had a few surprise. What it didn't have was many viewers,
the 88th award show had its third worst TV ratings ever.
And as for the big winners themselves, well, not surprising finally it was right one for Leonardo DiCaprio, who won after so many nominations and
failing to get there, now he got best actor for "The Revenant". And then you had Brie Larson who won best actress for "The Room". What a night it
was when journalism was absolutely from and center, and "Spotlight" was named the best picture. That film that recounts the Boston Globe's
groundbreaking investigation into sexual abuse by Catholic Church priests.
Brian Stelter now with more on how the award is being viewed by some as a win for the journalism industry as a whole.
(BEGIN VIDEOTAPE)
BRIAN STELTER, SENIOR MEDIA CORRESPONDENT: (voice-over) Everyone knows the sorry state of the news business, the internet taking over and thousands of
jobs lost along the way. Overall trust in media is at record lows
DONALD TRUMP, U.S. REPUBLICIAN PRESIDENTIAL CANDIDATE: They are disgusting, I tell you.
STELTER: (voice-over) With few signs it will improve any time soon.
UNIDENTIFIED MALE: It's such a shame what's happened to journalism over the last 15 years.
STELTER: (voice-over) But the new movie "Spotlight" is a rebuttal to all the doom and gloom. In "Spotlight" the reporters are heroes. Uncovering
Catholic Church corruption bringing sex abuse survivors out of the shadows. The Boston Globe won a Pulitzer for its work in 2002 and now the movie
about it has one two Oscars including best picture.
UNIDENTIFIED MALE: Show me the Church manipulated the system so that these guys wouldn't have to face charge.
MARTY BARON, AMERICAN JOURNALIST, FORMER EDITOR OF BOSTON GLOBE: This was a story that confronted us really.
STELTER: (voice-over) Marty Baron, the real life editor played by Liev Schreiber in the movie, arrived in Boston and read a column saying the
truth about priest abuse may never be known.
BARON: When you say the truth may never be known that should be a red flag to journalists go after something and really find out what the truth is.
STELTER: (voice-over) [16:35:00] The resulting investigation rocked the Vatican to its core. Now "Spotlight" is doing what its title evokes,
shining light on the ways journalism can truly help people.
[16:50:08] MARY DISPENZA, SURVIVORS NETWORK OF THOSE ABUSED BY PRIESTS: Since the movie "Spotlight" came out, many more survivors have come out.
Nothing in the past has done what "Spotlight" has done to bring out of darkness the issue of priest abuse, cover ups and the ongoing secrecy that
still exists today to protect the good name of the Church.
STELTER: (voice-over) In other words there's still more reporting to be done.
MICHEAL KEATON: Everybody knew something was going on, and no one did a thing.
STELTER: (voice-over) Reviewers say "Spotlight" has given inspiration to an industry that needs it. With some comparing Michael Keaton and Rachel
McAdams to Dustin Hoffman and Robert Redford, from the famed movie, "All the President's Men".
ROBERT REDFORD: There is no way the White House can control the investigation.
STELTER: (voice-over) Reporters have loved this movie, but the makers of "Spotlight" say they made the message to resonate with the general public
as well.
TOM MCCARTHY DIRECTOR AND CO-WRITER, "SPOTLIGHT": Hopefully not just as shot in the arm to journalists, but also to citizens to say, hey, we need
this. Good journalism as an essential element of our democracy. We have to what we can to protect it.
STELTER: Brian Stelter, CNN Money, New York.
(END VIDEOTAPE)
QUEST: So, you make coffee, you sell it round the world, and now you decide you are going to try and sell coffee in the home, in many way, of
the coffee culture. Starbucks is going to break into Italy, or so they think. We'll talk about it after the break when you've enjoyed a moment to
"MAKE, CREATE, INNOVATE".
(COMMERCIAL BREAK)
QUEST: Now you've heard of selling ice to the Eskimos, well this one may be even harder than doing that. There may never be a bigger challenge for
Starbucks than trying to sell coffee in Italy. So Starbucks has used their own words. They describe their intention to open stores in Milan and
beyond as being opening it with humility and with respect. Starbucks is to open its first Italian store next year in Milan.
In fact it was the very romance and theater of Italian coffee's culture that inspired the chief executive Howard Schulz to revamp the business back
into the 1980s and create the Starbucks of today. So the question of course clearly is can Starbucks, can the purveyor of the fast cup latte
manage to be successful? Joining me is Rosario Procino an Italian restaurateur, good to see you, sir.
ROSARIO PROCINO, ITALIAN RESTAURATEUR: My pleasure.
QUEST: Now look I've got my tall skim latte extra hot, what have you got?
PROCINO: I have a melody of [16:35:00] coffee, because in Italy we call coffee, we don't use a different word for espresso. Different things
coffee is one, and in a nice small ceramic cup.
QUEST: Well, it's not going to go very far is it?
PROCINO: No, no, no. Well, I have my doubts.
QUEST: So tell me what do you thing is going to happen with Starbucks? They've been very successful everywhere else. So why should they not be
successful in Italy?
PROCINO: I think they may follow the same path that many other fast food or casual chain from America did when they came to Italy. Some buzz at the
beginning because of trendy. Because of people's curiosity. They want to maybe know about it. We let Starbucks coffee substitute the Italian real
coffee, I have my doubt about it. People may like as a beverage, cafe beverage, but not as a substitute for coffee.
QUEST: OK, but I've been to Italy many times, and you know, the coffee is good. It's excellent.
[16:55:00] But you go into a little cafe bar or whatever, and you order it. You drink it quickly, and you leave. You don't sit around. This idea of
sitting around in cafe for hours, do you?
PROCINO: That's right. That's right. Starbucks get inspired by Italy. In Italy but I think as many think as many things came overseas they got
transformed. Both in the quality of the product, but also in the timing in this case. I this case many Italian one time they're faster than American.
We are used to go to coffee shop, grab the coffee, drink at the counter, go and leave, fast. No sit down.
QUEST: I put to you sir, that Starbucks know what they are doing and Italians are going to be surprised.
PROCINO: I'll take the bet. I'll take the challenge. I'm sure they know what they're doing, but our expresso, fast, quick and go is the ideal for
us.
QUEST: I think yours probably tastes better.
PROCINO: It was done there.
QUEST: We'll have a profitable coffee, a strong couple of hairs on my chest. Profitable Moment after the break. Good health.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment. Forget all that talk about Starbucks. Actually what you really do is you can't beat a nice cup of tea. And it's
a toast to President Macri of Argentina. He come into office. He says he's going negotiate with the bond holders in good faith. He does exactly
that and in three months he gets a deal that President Kirchner refused to do in more than 10. That's what you call leader.
And that's what you call QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead I hope it's
profitable. I'll see you tomorrow.
END
