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Quest Means Business
OPEC Agrees to Oil Output Cut; U.S. Stocks Surge After Oil Output Deal; U.S. Congress Overturns Obama Veto of 9/11 Bill; Wells Fargo Ending Controversial Sales Goals; Wells Fargo CEO Forfeits $41 Million, Keeps Job; The Life and Legacy of Shimon Peres. Aired 4-5p ET
Aired September 28, 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] PAULA NEWTON, CNN ANCHOR: Christmas comes early for OPEC, it's Wednesday, September 28th, we have a deal. The world's biggest oil
producers agree to cut their output. This is for the first time in eight years.
Wells Fargo ends a controversial sales practice and its CEO prepares for another grilling on Capitol Hill. And the world remembers Shimon Peres.
We'll hear from former Israeli Prime Minister Ehud Barak, and former U.S. Secretary of State, Henry Kissinger. I'm Paula Newton, and this is QUEST
MEANS BUSINESS.
And we'll have our business news agenda in just a moment. But first a historic vote in the U.S. Congress. Both chambers are overriding President
Barack Obama for the very first time. His veto of the 9/11 bill no longer stands. Families of those killed in the September 11th attacks are now
legally allowed to sue Saudi Arabia. President Obama vetoed it, warning it could damage relations with the oil-rich state. Both the U.S. Senate and
House of Representatives voted overwhelmingly to overturn the president's veto. And we will have much more about this later this hour.
Tonight, a stunner from OPEC. Members agreed to limit oil production which will likely boost prices worldwide. Oil ministers met in Algeria where a
deal was not expected. However, they were able to come together for an agreement that will take almost a million barrels of oil off the market
each and every day. At this hour, crude prices are surging more than 5 percent. The difficulty in reaching an agreement was up in part because of
the competing interests of member nations. Now, despite budget short falls due to falling oil prices, Saudi Arabia said it will not agree to any
limits unless it's arch rival Iran also agrees. Iran is still recovering from years of crippling sanctions and is trying to rebuild its economy.
But it agreed to cap production at around 4 million barrels, still an increase in over its current production.
Venezuela has been lobbying hard for a cap. Its economy has been devastated by the lower oil prices of the past two years. But then there's
Russia, a non-OPEC member. Russia is pumping oil at record levels not seen since the Soviet era that could have a counter effect on OPEC's decision.
CNN's John Defterios has been following it all live for us now from Algeria. I mean, John, what changed? I've been checking in all day, what
changed within the last few hours?
JOHN DEFTERIOS, CNNMONEY EMERGING MARKETS EDITOR: Well in fact, we have to give credit to the Algerian minister, Paula. He reshaped the proposal in
the last six hours. They've had five hours behind closed doors and the informal meeting, but let's just call it 48 hours of grueling negotiations,
which as you said here, will lead to the first cut in eight years since the financial crisis. When oil prices went from $147 down to $38. But the
reality is they wanted change. And they don't think hovering around 45 to $50 a barrel is enough in countries like Algeria and even the heavy weight
Saudi Arabia.
Let's call it the Algeria's plan. It's being sold to the member states, Paula, as a freeze. I'll tell you, here's the formula. They're going to
take an average for production in each member state over the year. This is the strategy right now. Not go from the peak and cut from there, but go
from the average and so you have to hit that average. They tallied it up, according to sources I've been speaking to, it'll add up to just over
800,000 barrels. They believe Russia and other non-OPEC players will come in to get to that million mark.
Now, as you've suggested, there are some exceptions, Iran, Nigeria, and Libya. Iran, the most important. I spoke to the Iranian OPEC governor as
the ministers were behind closed doors. He said the formula is we can go below 4, temporarily, we want to get to 4.1. 4 is very important because
as you suggested, Saudi Arabia did not want Iran to get to 4 million barrels. There is a compromise there. Nigeria, around 2 million barrels a
day, that seems to be fine. So the new quota number, which we haven't had for years within OPEC, would be 32.5 million barrels a day from a near
record peak where we are today of 33.4. A lot of numbers, but it's important to get them down below this average that we've seen for the last
two years.
If you think about it, Paula. The last two years, we had four major producers, including Saudi Arabia take up 3 million barrels of production.
Once you have that production and the market share, it's very difficult to take it away and it looks like the Algeria's plan is going to happen after
all.
[16:05:07] Twenty-four hours ago, Khalid Al-Falih and Alexander Novak, of Saudi Arabia and Russia said, Algeria is not going to be a meeting to come
up with a deal. But the minister was determined to put his stamp on it after hosting the International Energy Forum and having 70 countries here
that didn't want the bad blood between Saudi Arabia and Iran to spoil the party.
NEWTON: OK, even if we believe OPEC and we believe they're not trying to pull one over on the markets, does this not represent Saudi Arabia really
saying, look, our plan and if we rewind two years to take a lot of production, you know, off the table, especially that North American
production, it just didn't work that Saudi strategy.
DEFTERIOS: Well, there's two ways to look at that, Paula. This is the Saudi version of it, and then the harsher reality. The Saudi version is,
look, we were able to add to our market share. They took a million of production over the last two years when they declared that strategy at the
end of 2014. But it's been in reality extremely painful, really painful, because they're burning through about $100 billion a year in cash. Because
their balance for budget is about $75 a barrel. And we've been hovering as you know around $45 for 2016. So they wanted to take action.
There's another strategic reason for them to take action this time around. They want to get up to 60, $65 a barrel by 2018. It'll boost the
evaluation for Saudi Aramco and its proposed IPO. They want to have this valuation of $2 trillion eventually, that's important. And let's not
forget, Saudi Arabia this week before coming to the OPEC meet progress posed salary cuts of 20 percent for some ministers and other key officials,
a salary freeze from any others and a freeze on hiring of non-essential expatriates, this is quite desperate. They haven't paid contractors and
the rest.
Here in Algeria the breakeven price for years was $120 a barrel. If you're in 40 to 45 you're bleeding red ink. And I think they came to a
realization, we can't let it go on forever, but on the other side, the shale producers have lost 74 percent of their rig. They're more efficient
today, but the battle that goes on and the low cost producers are winning, they just can't survive off of 40 to $50 a barrel. They need to go above
that.
The reality is many sources I spoke to said the target is for 55, 60, and eventually, hopefully, $65, not too high to bring the shale producers by
2018. I call it the new goldilocks scenario. Not too hot, not too cold on prices, something in between is what they're looking at. They don't want
45 anymore.
OK, our John Defterios through the evening covering that goldilocks scenario, as you call it, for us in Algiers. Appreciate it, John.
Now, on Wall Street stocks spiked on news of that deal filtered out. The Dow ended up 111 points. Look at the dive in the middle of the day and
then look at when we got that oil deal. Paul La Monica joins me now. I mean, look Paul, is it not even if they're putting one over on the market,
it's mission accomplished, right? We grew up as much as 3 bucks, 6 percent on oil. Deal done as long as they can sustain this for the next few weeks,
months.
PAUL R LA MONICA, CNNMONEY CORRESPONDENT: I think now that is the question. How real is this production cut going to be? Cleary you're
seeing Exxon and Chevron, two of the leading stocks in the Dow, rising pretty sharply today, and that explains that chart you just saw. We went
from red to green pretty much in a heartbeat. Now though the question is going to be is there enough pressure on other countries to really make a
change to their production? And I don't think that's going to happen as John pointed out. U.S. producers, shale producers, they're going to
continue probably to pump out as much oil as they can. And that could lead to further pressure on oil prices. And Iran is exempted from this deal.
And we all know how important it is for Iran to really get supply back on the market. So I think it's going to be interesting to see if this is just
a one day move or you have another hike fake.
NEWTON: There are a lot of potential risks we can have to the stock market. We're obviously seeing some very good values in the stock market.
Everyone's wondering if it's gone a little bit too far. What role does oil play in that? A lot of people have been looking at this whole relation,
normally oil prices are good. High oil prices are bad. It's bad for the economy in general. How do you think the market is interpreting all of
this now? Do they feel we're never going to see $80 a barrel oil again, so why worry?
LA MONICA: That is a great question. I think there is this sense that we are never going to get back to $80 in a barrel of oil, let alone more than
$100 that we had at the peak. So I think right now what everyone, market observers, economists, are all trying to figure out, how high does oil have
to go before it will does is start to hurt consumer spending? The problem is that consumer spending didn't really get that big of a lift which oil
prices were as depressed as they were. So if they start to climb again, are consumers going to pull back or is oil and gas prices just one thing
that consumers adjust no matter how low or how high it is, and they just grin and bear it and don't really make any significant changes in the
behavior high or low? That could be the case.
[16:10:04] NEWTON: Yes, it'll billion interesting again especially going towards the end of the year how those production numbers come in fruition,
the effect it has on the market. Paul La Monica, appreciate it.
Now Wells Fargo is ending its controversial sales goals earlier than planned. The pressure to meet those goals sparked the banks fake account
scandal. CEO John Stumpf is expected to announce the change during more Capitol Hill testimony on Thursday. The bank had priestly said the goals
would be scrapped next January. Now the scandal is also costing Wells Fargo executives, community banking head Carrie Tolstedt, will forfeit $90
million in stock awards and CEO John Stumpf, as we were saying, is giving back $41 million in stock and part of his 2016 salary and bonus. CNN's
Clare Sebastian reports on the man at top of Wells Fargo.
(BEGIN VIDEOTAPE)
RICHARD SHELBY, U.S. SENATOR: The committee will come to order.
CLARE SEBASTIAN (voice-over): Even facing the wrath of Senators, John Stumpf never forgets his roots.
UNIDENTIFIED MALE: Five Thousands of big numbers.
JOHN STUMPF, WELLS FARGO CEO: It's bigger than my hometown. I do know that.
SEBASTIAN: The CEO of the fourth most profitable company in the Fortune 500 grew up in Pierz, Minnesota, a town of less than 1500 people. And
worked his way through the ranks at Wells Fargo becoming CEO in 2007.
STUMPF: The president was very encouraging to us to do the right thing for the country.
SEBASTIAN: He stayed through the fallout of the great recession, making what many described as his best move to date.
DICK BOVE, RAFFERTY CAPITAL MARKETS: His acquisition of Wachovia bank was really an incredible achievement from two perspectives. Number one,
Wachovia was bigger than Wells Fargo. And number two, Wachovia had an agreement already in place with Citigroup, and somehow, Wells Fargo wound
up with the company.
SEBASTIAN: The merger, more than doubled the bank's deposit base and helped to lead record profits.
STUMPF: We do business and lend money the old fashioned way, responsibly and prudently.
SEBASTIAN: In the wake of crisis, Stumpf championed community feel at the bank. Employees are always referred to as team members, and branches as
stores, a policy he personally policed.
UNIDENTIFIED MALE: 6,000 and some branches around the country --
STUMPF: Stores.
UNIDENTIFIED MALE: Sorry, stores. I'll get it right.
SEBASTIAN (on camera): Stump had another signature policy selling multiple products to individual customers or cross selling. In this, the 2010
annual report he writes, "I'm often asked why we set a cross-sell goal of eight. The answer is, it rhymed with great. Former employees have told
CNN that pressure to meet that target was so intense that opening fake bank accounts became common practice.
STUMPF: It was the first time that light bulb went on.
SEBASTIAN (voice-over): Stumpf says he didn't know until 2013 that widespread fraud had been taking place.
BOVE: My belief is that it's not a very detail-oriented CEO. He's not will say, the James Dimon type, and JPMorgan, or the James Gorman type at
Morgan Stanley. I think he works through individuals that he develops great deal of trust in.
SEBASTIAN: "Everything we do is built on trust," reads a quote from Stumpf on the company website. A trust he has now pledged to rebuild.
(END VIDEOTAPE)
NEWTON: And Clare joins me now in the studio. I mean, Clare, you and I have discussed this. This seems like a guy who just failed to grasp
exactly what this sales policy meant and meant for really how that bank conducted itself and its relationship with his customers. He just got it
wrong.
SEBASTIAN: Well, I think that's still remains to be seen. That is what the various investigations are trying to unearth. Certainly from the
people I've been speaking to. They believe it is certainly not a question of intent, perhaps more a question of delegating and not knowing what was
happening further down the company.
NEWTON: A criminal court may eventually decide what it was.
SEBASTIAN: Right, well this is the question, is whether or not they are going to be criminal charges going forward, certainly we don't know yet.
We know the DOJ has started the early stages of an investigation. We don't know if that'll lead to criminal charges. We do know that the calls are
growing louder. The leading proponent, Elizabeth Warren, was very vocal in the Senate last week, saying Stumpf should not only step down, but should
face criminal charges. She tweeted today, "As I said last week: Mr. Stumpf should resign, return every nickel he made while the scam was
ongoing, and face SEC and DOJ investigations."
She's not the only one. Hillary Clinton has made it a campaign pledge in an open letter to Wells Fargo customers last week saying, there should be
real consequences when firms on Wall Street break the law.
And today on Capitol Hill, the House Financial Services Committee, the very committee that Stumpf will be testifying in front of tomorrow, were
grilling Janet Yellen, the Fed chair, trying to find out why the regulators didn't catch this soon, and what the Fed could be doing to make sure this
doesn't happen again. Take a listen.
And that would be my question, why wasn't this caught sooner? In terms of how pervasive this is in the banking industry. We are starting to hear
from other whistleblowers, tentatively, that look, this is a problem in American banking. It maybe even a problem in banking in other countries.
[16:15:08] SEBASTIAN: Well, we don't have concrete evidence that it was going on elsewhere, but certainly we see there's increasing scrutiny on the
banking industry in general out of this. Janet Yellen saying today on the Hill that she would be scrutinized compliance across the banking industry.
People I've been speaking to are worried that could mean tightening regulation at a time when frankly those very Republicans on the Hill were
looking at pushing forward a bill that would scrap Dodd/Frank and replace it with something else. It's not only stirred old anger from the times of
LIBOR rigging and subprime mortgages and sanctions violations, this is something that's created a new intensity of that anger. Because this is a
Main Street scandal. This is something that used -- evolves recognizable banking products and real poem. And also frankly, because we're six weeks
away from an election and no one wants to seeing to be siding with banks that might've been behaving badly.
NEWTON: Yes, you certainly framed a very contentious debate that'll continue there in Washington and elsewhere. Clare, thanks so much,
appreciate it.
Now Israel is mourning the loss of former president and prime minister Shimon Peres. After the break, Henry Kissinger and Ehud Barak give us
their thoughts on his life and his legacy.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
SHIMON PERES, FORMER PRESIDENT AND PRIME MINISTER, ISRAEL: If you want to keep alive and be young, you have from time to time to count all the
achievements you have had in your life, but more importantly, to count the dreams you have in your brain. If you have more dreams than achievements,
you are young, if you have more achievements than dreams, you are retired.
(END VIDEO CLIP)
NEWTON: That was Shimon Peres response to Richard Quest who asked him in 2015 when he might retire. Richard told me today that at more than 90,
Shimon Peres seemed certainly in better form that he at the time of that interview. An extraordinary man, and tonight Israel is mourning the loss
of its former president and prime minister. Shimon Peres died early Wednesday at the age of 93 after suffering a devastating stroke. Born in a
tiny polish town, Peres went on to spend more than six decades in Israeli public life. Oren Lieberman reports, he will be remembered by many as an
architect of peace.
(BEGIN VIDEOTAPE)
OREN LIEBERMAN, CNN CORRESPONDENT (voice-over): The story of Shimon Peres is the story of modern Israel. He was the longest serving politician in
Israel's history. Peres was there from the very beginning. In government, he held virtually every major cabinet position and was prime minister three
times, but never won an election.
ETHAN DOR SHAV, SHALEM CENTER: Never got the public love that he was yearning for. He was never hugged by the populist as Israel as our leader.
He was hated as much as he was loved.
LIEBERMAN: In 1993, Peres signed the Oslo Peace Accord at the White House which recognized the possibility of a two state solution with the
Palestinians for the first time. It won Peres the Nobel Peace Prize, but a wave of Palestinian suicide bombings and other attacks which followed, left
him struggling to defend the peace process.
[16:20:02] PERES: I know that we are moving on a world full of dangers, but I know also that this is the right road, the best road, the only road
upon which we have to move.
LIEBERMAN: Ultimately, the increase in violence cost him the 1996 election. Israelis turned their backs on Peres in favor of the hardline
conservative, Benjamin Netanyahu.
BILL CLINTON, FORMER U.S. PRESIDENT: I'm very grateful to him for a lifetime of taking big thoughts and dreaming big dreams and figuring out
practical ways to achieve those.
LIEBERMAN: He never stopped striving for peace. He believed in a two- state solution up until the very end.
PERES: Maybe in the conversation, some people will say this and that, but the official position and the real desire of the Israel is to have two
states, an Arab state and a Jewish state. And I think that's also the conclusion of the Arabs.
LIEBERMAN: After nearly 50 years as a member of the Knesset, Israel's parliament, Peres became country's president, serving until his retirement
in 2014. But when asked how he wanted to be remembered, he didn't mention a life of civil service.
PERES: I would like that somebody write about me that they saved the life of a single child. This will satisfy me more than anything else.
(END VIDEOTAPE)
NEWTON: Ehud Barak, former prime minister of Israel joins me now live from Boston. In terms of our reflections over the last few hours, in terms what
have he meant to Israel. How will you take his life? Because as we just heard from Oren, he wasn't beloved and he would say that sometimes quite
bluntly to people.
EHUD BARAK, FORMER ISRAELI PRIME MINISTER: Shimon was one of the founders, he stood there when the state of Israel was born. Already as an active
player and in his early years under Ben-Gurion, he's charm and diplomatic skills played a crucial role in the creation of the nuclear reactor and the
building of Israeli strategic communities.
In a way, it has from that point where he was a founder of the safety net, the existential safety net for Israel that endured the courage of
conviction when time past and we that realized that we should look at the roots of the problems around us that peace is the solution. And it was the
same courage of conviction or the same inner strength, he assented his project of making peace with our neighbors.
He didn't care about -- in fact he cared about being loved, but it never kind of derailed him. He drew a heavier skin or a thicker skin and more
energy from the fact that tomatoes and eggs were thrown at him at the public events. And he showed to be more resilient than his opponent. And
at the end, as a president, he got so much love that he waited for all his life. And became a father figure for the whole nation.
NEWTON: And you were right about that. I have to say though that Israeli politics is different a blood sport. It is a survival sport. You clashed
with him in earlier times. In terms of you having disagreements with him, what did you learn from him and the way he conducted himself and the way he
then tried to get back to a point of agreement and a point of compromise?
BARAK: Together with Yitzhak Rabin, Shimon brought me to politics and after the assassination of Yitzhak, he promoted me to foreign minister. So
I learned from him a lot. The real lesson is to stick to what you believe in and keep the independent mind or independent spirit. At a capacity to
look around and sometimes to change your position. Shimon was not just the ultimate politician, but the ultimate man who even when he got -- although
he always remained young in heart as you put it.
NEWTON: In fact, you write in your statement about him today that had an inexhaustible curiosity of a young man, for every emerging innovation and
revolution. As you look to your new career, a lot of it is bound up in really trying to have that economic prosperity to really try to get to a
point of peace. He was a big believer in that. That through the young and through economic prosperity, the peace was possible.
BARAK: Yes. It's not just because of peace. It's stemmed out the very character. He had a very optimist character. He used to say that an
optimist and the pessimist are dying in the same day for the same reason, so it's better to be an optimist.
[16:25:00] He focused on the future and he sold the potential. He sold Jewish excellence along the generation that had to do with what happens
over the shoulders, not under the bed. And it's about this element that he so long before any other national leader, the edge of nanotechnology, of
what might come from a huge effort to penetrate the secrets of the human brain. And he was not a scientist. He was not an engineer, but he had
this teenager curiosity about anything that smelled from something new, promising that we shape the future. He was much less worried about the
past.
NEWTON: Yes, and interesting reflections there. And we thank you for your time today. Again, something that perhaps they did not know about the
former president. Appreciate it.
BARAK: Thank you.
NEWTON: Now former U.S. Secretary of State, Henry Kissinger, knew Shimon Peres for 55 years. I spoke to him earlier and he told me Mr. Peres will
be remembered as someone who was dedicated to peace throughout all of his life.
(BEGIN VIDEOTAPE)
DR. HENRY KISSINGER, FORMER U.S. SECRETARY OF STATE: As his life populates, he was always committed to defend that he was also increasingly
committed to a notion of peace. He wanted Israel to be strong, but he thought that in the long-term, Israel would have to build itself into a
relationship of cooperation and peace with its neighbors. And so increasingly as it opened up, he devoted himself to that project.
NEWTON: That was revolutionary in its day for him to think that way?
KISSINGER: To understand that ultimate security must have a major component of acceptance by the neighbors and to try to build the world of
cooperation rather than confrontation. That was revolutionary given the situation in which Israel found himself. And then so many of the
appearances compatriots, all of them had lived under conditions of extreme danger. His consistence, that on the one hand he was of course strongly
committed to defend issues, but that in the long-term, there had to be some vision of peace in the region. And that he developed any number of
projects. So he became a symbol of a peaceful evolution of the region. Even though he recognized what a painful and long process it might be. So
he will be deeply missed as somebody who acted in this sort of conscience to both Arabs and Jews in the region.
NEWTON: When you saw him a few months ago in your back room conversations and your private conversations, did you sense a lot of angst, a lot of
regret? A lot of anxiety about decisions --
KISSINGER: No. He was at peace.
NEWTON: Not at all?
KISSINGER: Shimon was -- by that time at peace with himself. There were earlier periods in his life when not every ambition he had had been
fulfilled. But by that time, it had been -- when we met, you know, we met in veterans of many wars we had seen. And he had a clear view of what he
thought needed to be done. What he could do, what he was doing through various educational efforts that he was engaged in. And I don't think --
there was a serenity about him, as a matter of fact, which was rather reason to him. We can save the last decade.
(END VIDEOTAPE)
NEWTON: Dr. Kissinger did confirm something for me that apparently that myth or thing that you hear that he would trade soviet jokes with Ronald
Reagan, is apparently 100 percent true. Dr. Kissinger there speaking to me about his great friend for more than half a century, Shimon Peres.
Now as we know, he dedicated his life to bringing peace in a very troubled region. As President of Ireland, Mary Robinson played a key role in the
peace process there and she will join us later this hour.
[16:30:05] We will be right back with more of QUEST MEANS BUSINESS in just a moment.
(COMMERCIAL BREAK)
NEWTON: Hello, I'm Paula Newton, and there's more of QUEST MEANS BUSINESS in a moment. When one of China's richest men tells us why he's got his eye
on Hollywood. Plus, Wang Jianlin weighs in on the U.S. election. Ahead of that and more on that stunning announcement from OPEC. We'll bring you
analysis of the cartel's surprise oil cut, but first to the headlines this hour.
The funeral for former Israeli leader Shimon Peres will take place on Friday. The former president and prime minister died on Wednesday at the
age of 93. U.S. President Barack Obama, Britain's Prince Charles, and German Chancellor Angela Merkel are among those who have been invited to
his funeral, Friday.
We have an update for you on a school shooting at Townville Elementary School in South Carolina. The sheriff's office says a teenager is now in
custody in connection with the incident. Three people were injured in the shooting, two students and a teacher. But the severity of their injuries
is not known. Local authorities searched the school and don't believe there are any other suspects on the scene. Students are now being reunited
with their parents at nearby church.
Team of national prosecutors says the missile that downed Malaysia Airlines flight 17 came from Russia. The plane went down two years ago over eastern
Ukraine. All 298 people on board were killed. Russia says the findings of an international investigation are quote biased and politically motivated.
Just a short time ago, the U.S. Senate passed a bill to avoid a government shutdown, the measure funds the federal government through the December
9th. The bill passed just two days before federal agencies were set to run out of money. The House is expected to pass the bill later Wednesday.
Both chambers of Congress meantime are overriding President Barack Obama for the first time. His veto of the 9/11 bill no longer stands. Families
of those killed in the September 11th attacks are now legally allowed to sue Saudi Arabia. Our Manu Raju is there on Capitol Hill. You know, this
has been a very contentious issue. Especially within the Democratic Party now for many, many weeks. Tell us how it all went down.
MANU RAJU, CNN SENIOR POLITICAL REPORTER: Well, overwhelmingly the White House was rebuked, Paula. And the president tried to put behind the scenes
lobbying campaign to get his party to sustain his veto even calling the Senate Democratic leader urging members of Congress to side with him. The
concern from the White House has been that this bill that would allow those families victimized by 9/11 to sue Saudi Arabia and other governments that
may have been a role in the terrorist attacks here.
[16:35:02] The White House has been concerned that this could open up Americans overseas to potential retaliatory actions from foreign
governments that have been similarly could say that U.S. military action is a reason why they could go after potentially American diplomats in a love
the countries. Now that argument actually did not really sell on Capitol Hill. Other than the Senate Democratic leader Harry Reid, he was the only
Democrat, only Senator to vote to sustain the president's veto. The president lost in the Senate by a 97-1 vote to override his veto.
Then it came over to the House of Representatives and the House they similarly over railroad the president's veto. That means that this bill
now is the law of the land. And it really could have significant implications for the United States/Saudi relationship. Saudi Arabia as
fiercely opposed to this measure and it could, as the White House fears, create this potential problem for Americans overseas if these foreign
governments use this as an effort to go after Americans overseas as well. So really a contentious issue on Capitol Hill, but one that the president
lost in a major fashion. With the hands largely of his own party.
NEWTON: Yes, 97-1. That's incredible, Manu. A real blow to the White House tonight. Appreciate that update.
More now on the top story, the agreement among OPEC nations to cut oil production. Member nations agreeing to take about a million barrels a day
off the market. Joining us now from Washington is oil export, Branko Terzic, a managing director at Berkeley Research Group. I mean, look, you
have to give it to us straight here. We keep talking about this production cut. We were really only looking for a freeze. They seem to have a very
complicated deal on their hands. Do you believe it can sustain itself and that any kind of momentum on the oil price will stand?
BRANKO TERZIC, MANAGING DIR., BERKELEY RESEARCH GROUP: It all depends with the Saudis do. This is the equivalent of the Saudis bending their arm
behind their back and finally yelling uncle. I mean, it was the Saudis that decided that they were going to not curtail the supply during this
last period. And unfortunately, the price stayed too low too long to the point where they're in fiscal trouble. They've got to borrow money.
They're cutting their salaries for employees by 20 percent. This is the Saudi Arabian show. And in all the past OPEC cuts, Saudi Arabia has taken
the brunt of the cut. The others cheat.
NEWTON: And that's the point here, the others cheat. I find it hard to believe when Russia needs cash desperately -- they are not a part of OPEC,
but the fact of the matter is if they can pump more, they will pump more. And not really is going to be the same for North American producers. Isn't
it? I was reviewing the North American numbers today. There has been some production cut. But what do you think will happen as this oil price goes
up even a bit, to that North American production?
TERZIC: North American production can come back quicker than anybody anticipated. It is stayed producing longer than the Saudis anticipated.
Many wells have just been drilled and capped. They can come on much faster than history shows. And therefore the benefits will auto accrue to the
United States. We'll see in November how they do this in detail. But right now it's more of a public relations game than it is reality.
NEWTON: Yes, and it seems to have worked for today and perhaps today only. We'll see what happens in the coming weeks. But is this it for OPEC? They
seem to not be -- no matter what they do, they seem to not be able to achieve those kinds of prices that they desperately want back. The Saudis
really thought they could do this if they would capture market share and see oil sustained at a higher price. They thought short term pain, a long-
term gain. Does that have any hope of working now?
TERZIC: It's hard to say. The Saudis needed an extra $20 a barrel. It's $48 now. They needed, according to the IMF and others, $67 a barrel to
balance their budget. There's nobody forecasting that I can see, that this modest cult is going to result in the price jumping up $20. It's a bets on
their part. They're hoping the others actually do cut. The cuts would have to be significantly greater. And once again, America production is
the big unknown. How quickly and how much can it come on? We Americans will surprise everybody.
NEWTON: You certainly have so far. When I looked the production numbers today. They've become efficient. A lot more mergers and acquisitions has
help. And wait to see what those production numbers look like in the next quarter. Thanks so much for weighing in. Appreciate it.
TERZIC: Thank you.
NEWTON: Still to come, China zooms in on Hollywood. One of the country's richest men tells us about his block buster ambitions.
[16:40:00] (COMMERCIAL BREAK)
(BEGIN VIDEOTAPE)
UNIDENTIFIED REPORTER: Strand by strand, like strings on a violin, these ropes stand taunt with purpose. Ready to prevent disaster. This is
Komatsu Seiren, a fabric laboratory in Nomi City, Japan.
It's now being called the world's first earthquake-resistant building made with a new material. Using the carbon-fiber composite developed in this
very lab, renowned Japanese architect Kengo Kuma has created his vision of the future.
KENGO KUMA, JAPANESE ARCHITECT: What we are trying to achieve is to go to the next step of artificial design. Always artificial design has been
changing. Now the fibers and softer material is a frontline of that kind of new technology. So the form is not hard material, the form is from soft
material.
UNIDENTIFIED REPORTER: Where Kuma sees this softness is in nature, something he has always brought into his designs.
KUMA: Before industrialization, most of the cities were made by local natural material. In Japan, we were using wood, we are using rice papers,
and the city itself was very light and warm, but the 20th century as the people the big decision was instead of natural material. As a city should
be built by concrete and steel.
It was a sad solution for the city. Now we should go back to that as a natural material because the new contemporary technologies. Komatsu has
many a program of natural material.
UNIDENTIFIED REPORTER: And Kuma did just that with the Komatsu Seirin building. Looking like, a cloak of fine spider webs, Kuma says these
carbon fibers are actually seven times stronger than iron, that's thanks to a traditional Japanese braiding technique.
It's also more lightweight, a 160-meter roll weighs just 12 kilos a roll of metal wire of the same strength would be five times heavier. Strong,
lightweight, and flexible. These rods are perfectly designed to absorb the force of seismic motion. While there may be a striking beauty in its
strength, Kuma wants the practical to always be the priority.
[16:45:00] KUMA: The beauty is the result of sustainability. And the beauty should be the result of the strength of the building.
(END VIDEOTAPE)
NEWTON: One of China's richest men is making a play for one of America's most well-known entertainment companies. Wang Jianlin's Wanda Group is in
talks to buy Dick Clark Productions the producer of the Golden Globes and Billboard Music Awards. Wanda got a taste for Hollywood earlier this year
when it brought the studio Legendary Entertainment. Now as Wang boosts his U.S. interests, he spoke to our Andrew Stevens about the upcoming election
in this exclusive media interview.
(BEGIN VIDEOTAPE)
ANDREW STEVENS, CNN ASIA PACIFIC EDITOR: China's richest man was one of the millions around the world who watched Monday's first presidential
debate, he has a bigger interest than most. Hollywood is a key part of his global expansion plans. He's already spent three and a half billion
dollars buying Legendary Entertainment, maker of the Dark Knight and Jurassic World amongst other movies, and confirmed he's in talks to buy
Dick Clark Productions which produces live Hollywood events, like the Emmy's. So, what does he make of the rising anti-China rhetoric on the
campaign trail? How worried is he?
WANG JIANLIN, OWNER, WANDA (through translator): I'm not worried. Whoever becomes the next president, their campaign rhetoric isn't the same as their
policies. The interdependence between China and the U.S. is quite high when it comes to trade. They are the world's two largest economies and
China is the biggest holder of U.S. debts. If bilateral ties change drastically, it would affect not just China, but the U.S. even more.
STEVENS: But, is it damaging relations, business relations now?
JIANLIN: There may be some impact, but it won't affect our pace of investments in the U.S. I like the U.S. It's the world's biggest market
with lots of freedom, innovation and cultures. I can't find a better country to invest than in the U.S. it doesn't matter which party takes
office, I'll continue to invest in the U.S.
STEVENS: Recently, a group of U.S. lawmakers raised concerns about Chinese investment in Hollywood. Their worry is that Chinese companies could exert
some form of censorship on Hollywood movies. What do you say to those lawmakers?
JIANLIN: I think they are over-worried. When Hollywood exports movies to China, they have to consider the taste of Chinese audience and market
demands. They may add more Chinese elements because they come here to make money. Although the number of Hollywood productions shown here is very
limited. They account for more than half of the market. That's why I think it's more like Hollywood influencing China than the other way around.
STEVENS: Earlier this year, you were looking to buy 49 percent of Paramount, that deal fell through. Are you still interested in buying one
of the big six studios in Hollywood?
JIANLIN: First, let me tell you that the story of us trying to buy 49 percent of Paramount is fake. If we to want buy something, our minimum
would be 50 percent. We are still interested in any one of the big six studios. We're waiting for the opportunity. It could come in a year or
two, or longer, but we have patience.
STEVENS: You've been very outspoken in your plans to smash Disney in China. You want to make them unprofitable within 20 years. You've
criticized the Chinese themselves for going to Disney. Sounds like it's almost personal against Disney. Is that true?
JIANLIN: No. We are both partners and competitors. When it comes to movies, Disney is our biggest partner and our market share is the largest
here. But when it comes to tourism, we are arch rivals. Of course, we want to smash them. We are launching multiple projects to encircle Disney.
I believe because of our cost, speed, and operational efficiency, we will certainly defeat our competitors, so it's not personal. It's where the
interest of the company lies.
STEVENS: And in the second part of that interview with Wang Jianlin tomorrow, we're going to be talking about the Chinese economy. One of the
risks of a hard landing, what about the property bubble? He describes it as the biggest ever. Where does the China economy go from here? Make sure
you join us for that. Back to you.
(END VIDEOTAPE)
NEWTON: That was our Andrew Stevens there.
Mary Robinson played a key role in Ireland's peace process and later served as a U.N. High Commissioner for Human Rights. I'll hear her thoughts on
the legacy of Shimon Peres and first a highlight from "MAKE, CREATE, INNOVATE."
[16:50:03] (COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED REPORTER: Although it had been described as only a courtesy call, it was the first of its type in 70 years and certainly the most high
profile meeting President Robinson has had with any foreign head of state.
(END VIDEO CLIP)
NEWTON: Mary Robinson was the first Irish president to visit Britain. She met the queen in 1993. She said it was a symbolic moment between two
countries with a very troubled past seeking that elusive reconciliation. And she joins me now. And Mrs. Robinson, of course that reconciliation
happened very much so years later, the queen even visited Ireland.
When we speak of Shimon Peres, he didn't get that moment. That moment didn't happen. It still hasn't happened for Israel or the Palestinians.
You have met him. You knew him, I mean, what was his approach to dealing with these very difficult negotiations?
MARY ROBINSON, FORMER PRESIDENT, IRELAND: We went as elders a number of times to the Middle East with Jimmy Carter in particular, and Gro
Bundtland, and Shimon Peres was a very good ally of peace. Wonderful ally of peace. He really wanted to move his country forward and he felt that it
had to be by having a peace that would recognize the dignity of the Palestinian people. But, unfortunately it hasn't happened.
NEWTON: It hasn't happened and in fact the whole process is unfortunately now in tatters. When you look at his legacy, is it -- do you think it will
always be bittersweet?
ROBINSON: I think it will be mainly to his credit to be honest because he tried. He tried over and over again. And I think he was concerned about
the way his country was going. And unfortunately, that's a way that's not helping the process.
NEWTON: You're at a youth conference right now, it's One Young World, there in Ottawa. Shimon Peres in his dying days actually turned to youth
to say, never give up hope. He was the eternal optimist. In your experience, do you really feel that that message is resonating? Because if
you look around the world today, there is a lot of contention over issues that perhaps should have been resolved decades ago.
ROBINSON: I do believe that we have to look to young people to understand the importance of there being hope in our world. Hope creates energy, it
creates the potential for moving forward. What we're seeing is too much hate speech, divisiveness, xenophobia, anti-Semitism, whatever. And I love
being here with One Young World because these are the doers, the actors, those who want to see a better future for everybody.
[16:55:00] And I'm very concerned about the climate issue. There's a climate justice prize here now. And I'll meet the winners tomorrow, who
are from very small islands, Seychelles and Mauritius, and they have a wonderful project about the oceans. And that's what we want from young
people is to reinvest that sense of optimism and hope, not optimism in an empty sense, but a working, looking forward and living together,
understanding each other, listening to each other sense.
NEWTON: And some of the young people that are there though will be from Ireland, other parts of Europe. They will be from Britain. They're
dealing with very serious issues that will mold their future. Namely Brexit right now, there is a 100-day anniversary coming up this weekend for
Brexit. It is -- Ireland is really in the middle of all of this. Do you think that reckoning is coming to Ireland to really understand how they
cope with such a transition?
ROBINSON: Well, obviously most Irish people and indeed on both sides of the island would not have wished for a Brexit. Northern Ireland voted for
remain. And the south, my part of Ireland did not want and does not want to change our relationship with Britain and preferably with Britain and
Europe. That's what we wanted.
he Good Friday agreement is predicated on both parts of the country as being parts of a wider Europe that would help. But now we have to deal
with the reality, and we certainly do not want, in any sense, a hard border or a big divide on our island. Because it's not there now, it shouldn't be
there.
It shouldn't be something that we re-impose and so we'll see what the future brings. There are other parts of the world with even deeper
problems, and above all else, you know, to be quite honest, I would be talking to the young people here about the biggest human rights threat in
our world today, which is climate change. We are seeing such rapid advances in the dangerous science.
We now see that the world is facing a world of 400 parts per million and that's the first time in human history. And the long history of the world
that we're facing that. And we need to understand the importance of moving forward collectively and in solidarity. We saw that -- I was in New York
for the signing -- for the ratification of the Paris agreement --
NEWTON: Apologies, we're going to -- we're going to have to leave it there. And I apologize but I thank you for your time today from the One
World summit.
ROBINSON: OK.
NEWTON: Appreciate it.
And as QUEST MEANS BUSINESS, I'm Paula Newton and I'll see you right back here again tomorrow.
END
