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Quest Means Business
Train Crash in New Jersey Kills at Least 1, Injures 112; Lawmakers Grill Wells Fargo CEO; Commerzbank to Cut 7,300 Jobs; OPEC Secretary General Speaks to CNNMoney; NTSB Investigating New Jersey Train Crash; Wang Jianlin: Huge Property Bubble in China; Volkswagen Unveils New Electric Car
Aired September 29, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA NEWTON, CNN ANCHOR: Nowhere near Halloween, and bank stocks continue to spook Wall Street. It's Thursday, September 29th. The second bruising
bout. Wells Fargo CEO returns to Capitol Hill for more punishment from Congress. China's richest man made his fortune in real estate. Now he's
warning it's the biggest bubble in history.
And a Volkswagen with no emission problems and no emissions. The automaker unveils its electric car. I'm Paula Newton and this is QUEST MEANS
BUSINESS.
Now we will get back to business news in just a moment, but we begin with this breaking story. A deadly train crash in Hoboken, New Jersey just
across the river from New York city. At least one person is dead and 108 others injured. And here is what we know right now. The packed commuter
train plowed into a bumper block, going airborne and slamming on to the platform at the height of morning rush hour. Now witnesses and officials
say the train never slowed down as it entered that station. The person killed was standing on that platform. Speaking earlier the governors of
New York and New Jersey emphasize the investigation is just getting under way.
(BEGIN VIDEO CLIP)
ANDREW COMO, NEW YORK GOVERNOR: The NTSB will come up, they will do full investigation. You'll have the facts, once we have the facts, if there is
a lesson to learn, we will learn it.
CHRIS CHRISTIE, NEW JERSEY GOVERNOR: We're going to let the law enforcement professionals pursue the facts. The folks from NTSB and the
Federal Railway Administration, they're working in coordination with our state attorney general, Attorney General Porrino and our state police to
gather all the facts and then they'll brief us appropriately when they come to conclusions.
(END VIDEO CLIP)
NEWTON: CNN's Deb Feyerick is live for us now from Hoboken, New Jersey. And Deborah, obviously, a terrible accident. The pictures are horrific,
and yet a lot of questions about how fast this train was going and how it obviously just didn't slow down.
DEBORAH FEYERICK, CNN CORRESPONDENT: Yes, absolutely, Paula. We spoke to a freight engineer who happened to be in the vicinity, who was near track
five when this happened. He said that normally the trains come in at about 5 miles per hour, but this one was traveling at a much greater rate of
speed. And that is something that has been confirmed by officials as well. When the front car jumped the track, it basically hit a bumper and then was
catapulted several feet in the air onto the busy commuter platform. And it just caused massive structural damage. The ceiling collapsed, beams were
taken down, there were live wires exposed. Also water was gushing from some burst pipes. And the number of people were injured on that platform.
That freight engineer that we spoke to, he said that he was passing by people who were bleeding. I One woman clearly dead. We do know that there
was one fatality, a woman, along with 108 others were injured.
People were trying to get out of the train. They report that just didn't slow down. They were climbing through the windows being helped, because
this was a very dangerous situation because of the live electricity, which authorities ultimately had to shut down to make sure there weren't any
additional casualties. But people were tossed about. It was a scene of chaos with a lot of passengers. A lot of those who were uninjured helping
those who were on the train get off, but also helping those who were bleeding, to get the help that they needed. This was treated, Paula, as a
mass casualty response. Multiple paramedics, multiple ambulances, multiple EMTs. They were going to bring in people from New York City as well
because this is just one stop across the river to get into Manhattan. And you can imagine a very busy area with this a major stop for people who work
in New York City.
This is a lot of chaos and authorities now investigating. The National Transportation Safety Board, they have a go team, about 30 investigators
who will be looking to see why this happened and why that crash took place. The question, the engineer, he was initially unresponsive. He was slumped
in the front of his cab, but he's alive. He was taken to a hospital critically injured, but we're told by officials that he is cooperating,
telling investigators what happened and why that train failed to slow down as it entered the station. Paula.
For millions of commuters here in the New York area, very important to find out exactly why it happened. Our Deb Feyerick continues on the scene and
we will continue with more in the next hour on that crash investigation.
Turning to business news now though, today brought round two in the Wells Fargo verse Congress battle. Now Wells Fargo CEO, John Stumpf, appeared on
Capitol Hill Thursday. This time facing lawmakers from the House of Representatives.
Now, several members of Congress claim Stumpf was running a criminal enterprise and could be fired or even jailed. And the hits just kept
coming from there.
JEB HENSARLING, U.S. HOUSE REPUBLICAN: Mr. Stumpf, I regrettably have a mortgage with your bank. I wish I didn't. If I was in the position to pay
it off, I would. Because you have broken my trust and you have broken the trust of millions of others and it will be a long, long time to earn that
trust back.
GREGORY MEEKS, U.S. HOUSE DEMOCRAT: Would you admit this? That not only did your bank have a black eye, that your bank, Wells Fargo, has given the
entire financial service industry a black eye. Your responsibility.
(END VIDEO CLIP)
NEWTON: Leading up to this vote, they made some concessions. He asked the Wells Fargo board to forfeit his 2016 bonus and salary during the
investigation. Stumpf offered his apology to lawmakers and said, he does take full responsibility.
(BEGIN VIDEO CLIP)
JOHN STUMPF, CEO, WELLS FARGO: I'm sorry that we didn't get this right. I take this very seriously. I'm not in denial, and we will get it right. We
will fix this. We do a lot of things really great.
(END VIDEO CLIP)
NEWTON: U.S. Congressman Gregory Meeks joins me now live from Washington. Congressman, we just heard you. You were incredibly angry they are. When
you actually look at the testimony from Wells Fargo what really gets you going.
MEEKS: When you look at the fact that their chairman and CEO has been there since 2007. And you then see time after time after time again, every
year, three or four times a year, they have been fined for really doing things, whether it's affording mortgagers, et cetera. For me, this is the
icing that tops the cake, and he needs to go. He's created a scenario where Democrats and Republicans agree. And if Wells Fargo ever intends on
getting the trust back of the public, it can't be led by Mr. Stumpf. It's got to be someone else. We see, the public sees time and time again that
individuals at the top, wrong is done and nothing happens. And that has to stop. We need confidence in the financial services industry and this puts
a black eye on the entire industry, and it shouldn't be.
NEWTON: They have a bipartisan agreement on that and that in itself is extraordinary. What do your voters want to see now? Especially since, I
have to point out, the regulators didn't catch this, Congressman. They didn't catch it.
MEEKS: We have to, you know, talk more to the regulators, they've got to be more on the case. I have already, along with a number of other members,
we are sending letters to these regulators, how they need to look. There are certain provisions that we put in Dodd/Frank that we believe should be
automatically enforced. For example, there's a claw back rule in Dodd/Frank. whereas if a bank has committed fraud or some bad acts, then
not just the bonuses of these individuals, of the CEOs and the vice presidents, et cetera, should be taken, their whole salary. They should
claw back all of that money. We need to see that enforced immediately. That is tremendously important I think.
NEWTON: What really resonated for me in terms of your questioning was you talking about your voters. Some of them who were basically left out on the
street after the 2008 financial crises. They had to pay for their mistakes. How many years is it going to take before the banks pay for
their mistakes?
MEEKS: Well, they have to get it. Listen. The example that I gave, I gave two. One if someone went to rob the bank, and they robbed the bank,
and then they got caught robbing the bank. Then they come and say I'm sorry I robbed the bank. I apologize. I want to get it right. I want to
make it right. Do you think the bank would not press charges of that bank robber? They would put him in jail, they would press charges. Something
would happen. There would be repercussions. Well here you have the scenario where there is a bank, and here's the CEO who said the buck stops
with him. And yet admitting that a fraud had taken place. Stealing people's ID, charging them fees that were not theirs et cetera. But yet he
says it's his responsibility, but there's no repercussions. He voluntarily gives up $41 million. What is that that's a drop in the bucket. He needs
to go. The Board of Directors need to remove him. And if the board doesn't remove him, then they need a new board also.
NEWTON: Do you think anything has changed since the financial crisis in terms of how the banks behave?
MEEKS: Well, you know, I hope so. Here's what, I'm from New York. I understand the significance of the financial institutions. I think that
they help make our country one of the greatest countries in the world. Now you're talking about international relations and connectivity all over the
world.
It is tremendously important. The one thing that can destroy it is when there is lack of trust and abuse in which you see taking place with
reference to Wells Fargo.
Today what you seen taken place back in `08 with the mortgage crises is where greed has just taking over completely. Where they have a scheme of
individuals taking advantage of the lower employees. Putting mandatory incentives on them that causes them to cheat. Turning the other way just
as they did with these fraudulent mortgages that they put people into. They made billions of dollars and then they go back and they blame the
small guy. And everybody from the top just walks away. That has got to stop. That cannot continue to happen.
And I say we sent letters to all the regulators putting them on notice. And I think that we've got to look at other pieces of legislation that we
can do because it is a danger to our national security. Because financial institutions are that important. But if people lose complete trust in them
then that's a big problem.
NEWTON: Ok, Congressman Meeks will leave it there for now. Appreciate your time.
Shares of Wells Fargo had a tough day. They handed down 2 percent and they're off more than 10 percent since reports of possible troubles
surfaced. Bill Rhodes, president and CEO of William R. Rhodes Global Advisors is with me now. Thanks so much. You're nodding your head. You
agree with Congress and Meeks. If we don't have a strong financial system, if you can't trust them then banking's not worth anything, it is it?
BILL RHODES, PRESIDENT AND CEO, WILLIAM R. RHODES GLOBAL ADVISORS: Exactly, and what is key for this to happen is the that public must trust
an institution. You must have public trust. And the reputation of the institution is the most important thing they have. If they lose your
reputation, it's very hard to get back again. It's very important also that the customer come first. All these are all really put together.
Because that's what gives public trust. Reputation and putting your customer first.
NEWTON: you been in banking for more than half a century in one way or the other. I will ask you the question, are they now too big and complicated
to manage, and to big and complicated to regulate?
RHODES: I would say the following. I think it depends on each institution. And an institution that has a strong culture, that embeds it,
monitors it, and then when they see a problem, enforces it. Including with compensation, claw backs and even dismissal I think can handle the
situation. So you can't make a generalization. It's case by case, bank by bank. And obviously the regulation is very important there to. The
institutions in the regulators have got to make sure that the risk-taking, the behavior is proper.
NEWTON: Let's talk about those regulators. At least two seem to have missed this. This first came to life after an investigation by a newspaper
"The LA Times." Today one question, the consumer financial protection, you're just one of the regulators who should've caught this, wouldn't
answer the question as to whether or not there be criminal charges. All they said is obviously, when we find evidence of any criminal wrongdoing it
is our responsibility to turn that over to the Attorney General. I've got to ask you. Why did the regulators not catch this? It's like there are no
cops on the block at all.
RHODES: I think you have the problem starting with the institution itself. They have to have a strong compliance effort and do all the things that I
mentioned. But obviously the regulators have to make sure they know what they're doing. And often times what happens here is the regulators do not
have the sophistication in some cases to track what the institutions are doing.
But that brings me to a point which I think is most important. Where does responsibility lie in the institution? It starts with the board. The tone
at the top. In other words, a Board of Directors has got to set the tone through the CEO, through middle management right down to the teller when
you talk about culture. And that is really where the key to all of this is.
NEWTON: And you outlined that in a report, last year I believe, indicating that look, this is where the oversight has to be, we have no indication
that there is that kind of oversight. I hate to say it, any financial institution in many different corners of this world -- I have to ask you,
you have more than a half century experience with Citibank, right? In one variation or another.
RHODES: Right.
NEWTON: What did you see at that bank? I mean, come on. A lot of water under the bridge for you. From the 70s up to now.
RHODES: Let me tell you when I started as a young trainee, which was a long time ago as you mentioned, it was imbedded in me that what counted was
two things. Number one, the ethics that you practice at the institution and also that you look after your customer. Those were key beyond anything
else. I think along the way some institutions have strayed from this. And as I said it starts right at the board, the CEO, right on through
management. That's why wrote this report. I was cochairman of this but it was my idea to do the report.
And of all of the group of 30 reports, which is made up of central bank has ministers of finance, leading economists around the world, this is probably
the most important report in a sense of number of copies that have been distributed. The problem is not saying it, it's doing it and living up to
it.
NEWTON: Thank you. Absolutely correct. That's why you're going to stay right there for a few minutes. We're going to get back and talk about
European banks in a second. But in the meantime, the state of California where Wells Fargo based, announced it will not do business with the bank
for at least a year. That's highly significant because Wells Fargo is based there. Now earlier I spoke with California State Treasurer, John
Chiang. He told me, it is time the banks are held accountable for their actions.
(BEGIN VIDEOTAPE)
JOHN CHIANG, CALIFORNIA STATE TREASURER: We want to look into corporate governance. One of the things I called for is separation of the CEO and
chairman functions and positions. We want to make sure they are operating with great integrity. They're operating legally. They're operating
ethically. We want to make sure they're doing the right thing. So were doing everything we can in the treasurer's office. We would encourage
others to make sure that Wells Fargo goes back to their core mission. That they have a stronger culture in place. I think they went off track and
that they had values and they hold values where they put their customer first.
NEWTON: How do you want Wells Fargo to behave in the future? You're saying it's at least a year, but what you want to see from them?
CHIANG: We want them to make sure that they operate at the highest level in regards to integrity. And in regards to making sure that they're
responsive. That they take care of their customer savings. These are hard-working Californians who do the right thing. Who are trying to pay
rent. Who are trying to save for their kid's college future. Who are trying to pay for a tank of gas. And here they have to be concerned. They
have to be worried where they shouldn't need any more worries about the bank that they trust. They need to make sure that that they restore trust.
That they view their customers as their neighbors, their friends, their relatives. So that they can implement the best practices and they start
fighting for and not against the customers that have entrusted their savings to them.
NEWTON: In terms of regaining that trust, you know, people like Elizabeth Warren are saying, look, this obviously needs to be investigated
criminally. Do you feel let down by regulators? I mean Janet Yellen got quite a grilling herself yesterday in Washington.
CHIANG: Yes, one of the things that we should have learned from the 2008, 2009 financial crisis, that too big to fail is that we've had tremendous
consolidation. We need more choices. We need more competition. We need more transparency and accountability. So the system still needs a
tremendous review and improvement.
(END VIDEOTAPE)
NEWTON: Dow Jones closed 196 points lower. I hate to say it, but that selling momentum really did pickup throughout the afternoon. That was
despite the global oil rallying. Banking stacks of course are also in the spotlight. Shares in Deutsche Bank are continuing to take over speculation
it cannot pay a $14 billion fine to the U.S. government. Now the drop in Germany could be attributed to in part to its second-largest bank saying it
will reduce its workforce by 7,300 employees amid a massive restructuring. Commerzbank is actually slashing 9600 jobs, about 20 percent of its
workforce. Although it will also create 2300 new positions.
Now this restructuring will cost $1.2 billion leaving Commerzbank with only a small profit this year. As a result, it is suspending its dividend
payments to shareholders.
And we are back now with Bill Rhodes. We have been watching the drama in Europe with the banks. A bit of a contagion there. You know, when they
looked at perhaps bailing out the banks in Italy, so many problems, especially as it relates to the European rules. As you see it, what is the
financial risk to Europe right now when you look at basically Deutsche Bank being in this kind of trouble?
RHODES: As I said on this show with Richard Quest numerous times in the last three years, the Eurozone regulators and the Eurozone banks were very
slow to meet the problems that they had with the great recession. In the United States, although you're making comments about the U.S. banks, one
thing that the regulators in the U.S. banks did is they raised capital starting in 2009. Wrote off bad loans and cut costs. This did not happen
in the Eurozone. The regulators never even got on the job until about two years ago with the banking union.
And so this is what you're facing now and is not just in Germany. You have problems in Portugal. You have problems in Greece. You have problems in
Italy, as you mentioned. And I think it's very important that they raise their capital. That they get rid of non-core businesses and cutting costs
as soon as possible, and write off the bad loans. It's been allowed to go on too long. And this is sapping the strength of Eurozone growth.
Because banking in the Eurozone provides 70 to 75 percent of total credit. In the United States it's just 25 to 30 percent, because you have a much
more active capital markets.
NEWTON: And do you think that's the problem right now. They just don't have the guts to take the haircut, to take the write-downs on the banks and
move on.
RHODES: Well, I think they're going to have to do it now, because you can't afford to have a problem with a major bank in the Eurozone. So I
think this will have to happen, and I think that it will happen, but it should have happened years earlier.
NEWTON: It should all happen without government intervention? It has to happen without government intervention?
RHODES: Well, I think it depends on the case. Now Chancellor Merkel has said that she doesn't want to do this apparently, but I think that what
going to happen here is if they don't do it on their own, in a sense of raising capital, they'll be forced to.
NEWTON: And yet we don't even know in terms of the rules of the Eurozone right now, I mean, Italy has tried and failed in that instance as well.
One of the things you point in and out this report, "Banking Conduct, and Culture" is that lessons were not learned from the great recession, whether
it's in Europe or the United States. Do you think we're there? Because we seem to be watching a slow motion car crash now and many people are
terrified of not having that strong backbone of the banking industry to hold onto.
RHODES: Put it this way, I think that lessons were not learned properly. This is why we did the report and why I co-chaired it. And I think that
now it has to be done if there will be any credible in the banking system. And as a matter of fact, I'm told that my -- that this report is now
circulating in Congress.
NEWTON: OK, so its circulating in Congress. Do you think any of your banking colleagues are trying to listen? You're talking about reform at
the board level. I know you know a lot of people that sit on these banking boards. Are they listening to you?
RHODES: I think in most part they are, but if they have not been they are certainly going to be doing so now.
NEWTON: We're not sure if John Stumpf would have listened before this and perhaps a couple of years ago had some lessons learned. Perhaps things
would have changed even at this board. I note that he was also the chairman of the board at Wells Fargo.
RHODES: Well, I think what you have there -- it's got to be the full board. Not just the chairman of an institution. And as I said, it has to
start tone at the top, which is the chair, the board itself, the CEO, right down to the middle management, right down to the teller. And they have to
believe in a culture which has to be positive in the sense of public trust, putting the customer first, and then it has to be implemented, embedded,
enforced, and monitor to enforce it. And what do I mean by that? Is up to dismissal. Not only claw backs and compensation but outright dismissal.
NEWTON: will continue to watch the story. Thank you so much for coming and staying here with us for a little bit here on QUEST MEANS BUSINESS.
Appreciate it.
RHODES: Thanks for having me.
NEWTON: A breakthrough in Algeria, meantime, OPEC members overcome some differences, both political and economic. We'll hear from the groups
secretary general. That's up next.
(COMMERCIAL BREAK)
NEWTON: Oil prices are rallying after a surprise deal by the world's major oil producers to lower their output levels. Now Brent crude is up more
than half a percent to just over $49 a barrel, yet prices had jumped up nearly 5 percent after the deal was first announced. In the news there is
that they have held on to those gains. European shares, meantime, got a big boost. BP and Total both closed more than 4 percent higher. Royal
Dutch Shell was the best performer of the lot, gaining nearly 6 percent on Thursday. Now after OPEC's failed talks earlier in the year, many
investors were surprised by the breakthrough in Algeria. The organization's secretary general spoke exclusively to CNNMoney's John
Defterios about how about deal came about.
(BEGIN VIDEOTAPE)
MOHAMMAD SANUSI BARKINDO, SECRETARY-GENERAL, OPEC: No single member country of OPEC, or including the non-OPEC friends that is insulated from
the impact of a price crash that we have seen since 2014. This is probably the most severe cycle in the last five cycles that we have seen in 30 years
or so. You could see the pressure on ministers from their counter parts in the ministers of finance, their colleagues and governors of central banks.
Not to talk of their leaders, everybody has been on their back asking what the hell are you up to?
JOHN DEFTERIOS, CNNMONEY EMERGING MARKETS EDITOR: You opted to go with a band 32.5 to 33 million barrels. You could have been more ambitious and
gone for the lower target. Will people be disappointed over time that you didn't bite the bullet all the way?
BARKINDO: No, OPEC has always been very practical, very flexible. These are weight issues that have huge implications. We needed the flexibility
to ensure that all fortune member countries could fit into this band.
DEFTERIOS: It raises the country about Iran. Does it fit into this band? Because it was pretty adamant about having 4 million barrels a day of
production. That was the target. How did you solve that? Has it been solved?
BARKINDO: I can tell you that I've got assurances from the highest level of government in Tehran. I went to Tehran. I met with the president
Hassan Rouhani. Together with his very able and competent minister, Bijan Namdar Zangeneh. And both of them assured me that they were committed to
building a consensus. To find a solution out of this severe cycle of price crash. And they also further assured me that Iran would do everything
possible not only to build, but to join the consensus. And today they proved it.
DEFTERIOS: Now you have over hang in the market over three billion barrels. This market is not balancing as fast as you would like to see.
Is this what really forced everybody's hand to come around?
BARKINDO: Because of this scientific inverse relationship between stocks and prices, you can understand why prices are depressed. So this decision
today will go a long way in stimulating stock draw down as we go along.
DEFTERIOS: Coming into this meeting, there was quite a bit of tension between Saudi Arabia and Iran and targets and the rest. Can they coexist
within OPEC in a much calm her way after this agreement in your view?
BARKINDO: They are both founder members of OPEC, and they are two leading members of this organization, together with Iraq, in terms of production.
OPEC is unique. In the sense that in the recent past, we had two of our founder members who are at war. I was really impressed with the way they
just focused on the fundamentals and came to this historic decision.
(END VIDEOTAPE)
NEWTON: Stay with us here at QUEST MEANS BUSINESS. We'll have more on that deadly train crash in New Jersey. At least one person has been killed
and more than 100 others injured and we will have a live report from the scene.
(COMMERCIAL BREAK)
NEWTON: Hello, I'm Paula Newton. And there's more QUEST MEANS BUSINESS in a moment. When China's richest man who made his fortune in real estate,
now he's warning it's the biggest bubble in history. And Volkswagen is taking on Tesla as it unveils its own electric car. But first. the
headlines this hour.
A devastating scene in New Jersey where at least one person is dead 112 others injured in a train crash. The New Jersey train slammed into bumper
block and then flew onto the platform inside the station in Hoboken. The person killed was standing on that platform.
A Palestinian delegation, including Palestinian Authority President, Mahmoud Abbas, will be among world leaders attending the funeral of Israeli
statesmen, Shimon Peres. The late President and Prime Minister's body is lying in state outside the Israeli parliament, the Knesset, until Friday
service. The long list of national leaders has Israeli security on high alert.
Tensions between India and Pakistan are reaching a point not seen in years. Pakistan says it will respond forcefully if India launches anymore strikes
along the border with Pakistan administered Kashmir. India says it targeted militants with surgical strikes Thursday to ward off a terror
attack.
We want to go back to our stop news story this hour the deadly train crash in New Jersey. CNN's Jean Casarez is at the scene there live for us there
in Hoboken. And Jean, of course such a horrific accident. Really shocking to see how that train slammed into this terminal. Everybody wants to know,
at this point, what could have caused such an accident?
JEAN CASAREZ, CNN CORRESPONDENT: We don't know because of the investigation with the National Transportation Safety Board is beginning.
It may take some time. I think the only thing we know right now is the excessive speed. But I want to tell all of your international viewers that
we're here in Hoboken, New Jersey right across the Hudson River from New York City. So it was 8:45 this morning. It was the height of rush hour.
People needing to get to New York City or even New Jersey for their work, and all of a sudden train number 1614, new jersey transit train, disaster.
(BEGIN VIDEOTAPE)
CASAREZ (voice-over): Witnesses say the train never seem to slow down. Hit a safety bumper, went airborne, even took down the roof.
UNIDENTIFIED MALE: It went up and over the bumper block, through the depot, and came to rest at the wall by the rating room.
CASAREZ: One person is dead. She is seen here on the platform.
I ended up stepping over a dead woman's body. That bothered me. I backed up and looked it -- nothing you can do for her.
CASAREZ: With over 100 Injured witnesses inside the front car described the impact.
UNIDENTIFIED MALE: It just didn't stop, and just got thrown around, lights went out. I think the roof caved in on the train.
UNIDENTIFIED FEMALE: Everyone was standing in the vestibule between the first and second car flew over into the first car, and many people were
like thrown. And there was a lot of blood.
CASAREZ: Officials say at approximately 8:45 a.m., New Jersey transit train 1614 struck the Hoboken terminal building on track five at a high
rate of speed leaving the structure unstable.
UNIDENTIFIED MALE: I heard a bomb like explosion.
UNIDENTIFIED MALE: It sounded like nails like on a chalk board, you know what I mean. And then justice followed by this deafening silence. And
then all of us sudden I just hear all the screams coming and terror like shrieks and everything. And then people just start running towards me up
the stairs from all the platforms just pouring in like right in front of me.
CASAREZ: Train workers and bystanders rush to the scene to help passengers trapped in the severely damaged train cars.
UNIDENTIFIED MALE: They were kicking out the windows and trying to get off the train.
UNIDENTIFIED MALE: They were jumping the turnstiles, climbing up the stairs, like hands and legs, you know, like running up the stairs with
their hands and everything.
CASAREZ: Tonight investigators focusing on the train engineer who was pulled from the train unresponsive.
CHRIS CHRISTIE, NEW JERSEY GOVERNOR: The engineer, who was operating the train, was also critically injured. He is at a local hospital and
cooperating with law enforcement officials in the investigation.
(END VIDEOTAPE)
CASAREZ: And CNN has confirmed an updated total of those injured, 112 injured, one fatality, and Paula, the one fatality, she was not on the
train. She was standing on the platform. So when the train crashed into the terminal with the structures coming down and the roof collapsing, that
is how at least the governor of New York, Cuomo, told us she was killed, Paula.
Absolutely horrific, our Jean Casarez there on the scene in Hoboken. The National Transportation Safety Board says it is investigating the crash, of
course. The former managing director for the NTSB, Peter Goetz, joins me now live from Washington. I mean, Peter, if we look at that single
explanation from people on the train and saying that, look, the train never seem to slow down. What is that tell you?
PETER GOETZ, FMR. MANAGING DIR., NATIONAL TRANSPORTATION SAFETY BOARD: Well, first we got to confirm that. And the train an event recorder in the
engine. The NTSB will get that tonight. They'll download it as quickly as possible. They'll find out exactly what the speed was. And if the speed
was excessive then they're going to dig in and see what was going on. Was there some sort of mechanical failure? Which is unlikely. But they will
look at it. Was there some sort of human failure? And they're going to dig deeply into the background of the engineer. Was this his first trip of
the day? His second trip? What did his past 72 hours look like? Did he get enough sleep? Were there any health issues involved? Was he suffering
from either a diagnosed or undiagnosed health issue? They'll start digging tonight and they'll be on scene at least a week or more.
NEWTON: And Peter, the implication here is obviously that the engineer was no longer able to operate the train. Of course we don't know that. But
Peter, tell me. In your experience with the NTSB, how many times have you guys looked at the situation and thought to yourselves, look, even on very
small aircraft there are two pilots. Why don't we just have two engineers and everyone's going to be a lot safer.
GOETZ: Well you know, that question has been debated particularly in the rail issue for years. The FRA does not require their examination says you
don't need two engineers. This accident will bring it up again. They will look at it to see whether statistically having a second engineer gives you
the safety improvement that the costs, you know, how much money it costs. And that's what it is. The issue is how do you run a rail system that can
be efficient and safe? And it is a real challenge. We don't invest in the rail systems the way we should as a nation.
NEWTON: Yes, and infrastructure bill hangs in the balance in this country for, I hate to say it, almost a decade now. And yet do you think that
there is anything here in the infrastructure, leaving alone the issue with the engineer for now, in the infrastructure the safety signals, the rolling
stock, the rails, anything.
GOETZ: In this case, you talk about positive train control. That really doesn't have an effect inside this kind of terminal switching area.
Positive train control although it is a safety advancement, and would not have affected this accident. I think the NTSB will look very carefully at
was there anything more that New Jersey Transit could do to have a safe operation.
We'll find out within six months or a year exactly what the story was and what the recommendations are that will see that this doesn't happen again.
But you know this is painfully repetitive event.
NEWTON: And you raise such a good point there, Peter. We have had some incredible accidents throughout north America with trains. Some people say
it is coincidence. It doesn't mean that they are any safer or less safe than they were just a few years ago. But what do you think, Peter, do you
think it is about time that you look at real rail safety and take it more seriously?
GOETZ: We have to look at rail safety and see if it is a national security issue. The European systems have had safety advancements in place for
decades that the U.S. simply has not had. The simple thing, like unguarded rail crossings. There are 18,000 unguarded rail crossings in the United
States. And each one of those is dangerous. For the rail system, and for humans. And we just don't have the money, resources, or will power to
address it.
NEWTON: Peter, thank you so much. As we continue to follow the investigation for the next few hours, appreciate it.
The Chinese government failed to combat the country's property bubble. That is the view of Wanda's chairman, Wang Jianlin. We'll have the second
part of his exclusive English media interview up next on CNN.
(COMMERCIAL BREAK)
(BEGIN VIDEOTAPE)
UNIDENTIFIED REPORTER: The signs of devastation still remain as a community tries to move on. In April this year, two earthquakes, a 6.2 and
then a 7.0 hit Kumamoto Prefecture, Japan within just a few days.
RYOTA KIDOKORO, STRUCTURAL ENGINEER, ARUP: You need a lot of other experts involved to plan for disasters and post disaster. OK, we survived it, most
people survived. What happens when your whole infrastructure is devastated? How do we get people home?
UNIDENTIFIED REPORTER: Home, it's what so many people here lost. And what 2014 Pritzker prize winning architect Shigeru Ban is trying to rebuild.
SHIGERU BAN, PRITZKER PRIZE WINNING ARCHITECT: I think the victim has had terrible experiences, mentally and physically, they must move into
somewhere comfortable.
UNIDENTIFIED REPORTER: With the warmth of natural wood, and a flood of sunlight, Ban's temporary houses are able to bring dignity to disaster.
UNIDENTIFIED FEMALE: I was expecting metal doors and cold material, but it was all built with wood, beyond my expectation. I was crying when I got
here, I was happy to live in a place like this.
UNIDENTIFIED REPORTER: His approach with each project is to utilize readily available materials while creating designs that volunteers can
easily build. Using prefabricated wooden panels, Ban and his volunteers have been able to build able to construct ten new homes.
BAN, (through translator): They need a place to live to make a step forward towards the future.
UNIDENTIFIED REPORTER: For Ban he will leave the future of his temporary buildings up to the people who use them.
BAN: Many of the commercial buildings mad by developers to make money in concrete are very temporary. Because some other developer buys the land
and destroy the building to put the new one, so even the concrete building can be very temporary. As long as the building is made to make money. But
even the building made in paper, as long as people love it, this becomes permanent.
(END VIDEOTAPE)
NEWTON: Billionaire Wang Jianlin says a property bubble in China could be the biggest in history. According to Foreign Policy magazine, house prices
are up a massive 53 percent in Shenzhen over the past year. There are also up 28 percent in Shanghai and Xiamen. Now the second part of Andrew
Stevens exclusive English media interview with the Wanda chairman. Wang shares his concerns about China's real estate sector.
(BEGIN VIDEOTAPE)
WANG JIANLIN, CHAIRMAN, WANDA GROUP (through translator): I have not seen a rebound. I think the economy is still at the bottom for another two or
three years. The size of the rebound in August was mainly due to the property sector and that is not going to last. Only when we see continued
growth of industrial profits and big jumps in consumer spending can we call it a rebound. I have not seen any such signs. But I'm still bullish on
the Chinese economy long term.
ANDREW STEVENS, CNN ASIA PACIFIC EDITOR: What about China's rising level of debt. The growth in debt is strong. A lot of international
institutions say there is a possibility still of a hard landing in China because of the debt situation. Do you have concerns about that, too?
JIANLIN: China's debts are rising. Government, corporate or individual debts are all increasing. So are leverages, but I don't see the risk of a
hard landing. The Chinese economy has one characteristic. The government has strong control over it. They still have a lot of policy tools. They
can take measures to gradually reduce leverages.
They can't do it too fast as we have seen in a stock market crash. The problem is the economy has not bottomed out. If we remove leverages too
fast, the economy could may suffer further.
STEVENS: Is there a bubble in the property market? A new bubble because prices have been rising for over a year?
JIANLIN: The biggest bubble in history.
STEVENS: How do you see that bubble deflating? Is it going to be a crash, is it going to be a slowdown, how do you get back to real sustainable
property prices?
JIANLIN: It is going to be very difficult. The problem now is that prices keep rising in top cities and falling in the several thousand other cities.
So the glut in medium and small cities is not going away, instead prices in top cities are pushed up. I don't see a good solution to this problem.
The government has come up with all sorts of measures limiting purchase or credit, but none have worked.
STEVENS: Wanda has evolved so quickly over the past 20 years or so, from a residential real estate developer to a commercial to now in the
entertainment industry and sports industry, tourism, what is your vision of Wanda in ten-year's time? What would you like it to be described as?
JIANLIN: In ten years, I hope Wanda is a multinational company, a juggernaut. Considering my personality and how the company has been
executing my plans, I think we will be number one in the world in real estate, entertainment, tourism, and sports. That's our goal and we're
determined to achieve it.
(END VIDEOTAPE)
NEWTON: Volkswagen is putting its emissions scandal in the rear view mirror or so it hopes with all electric concept car. The latest from the
Paris Motor Show but first a preview of "make, credit, innovate."
(COMMERCIAL BREAK)
NEWTON: Volkswagen is lighting up the Paris Motor Show with their new electric car.
We want you to meet the I.D. It is long range I know all the skeptics of electric cars, VW says they want you to forget all of that, because it can
cover 375 miles on a single charge. I will believe it when I see it. And it could be yours for less than $30,000, but you have to wait until 2020.
Step into the Tesla show room, the model 3 is expected to go on sale in late 2017. Several years earlier than the I.D. yet it's more expensive
with a starting price of $35,000. You know that has not stopped a lot of people from ordering it.
But it does have a shorter driving range, 215 miles. Not to be outdone, General Motors, the Chevy Bolt goes on sale later this year. It is the
most expensive with a starting price of $37,500, that is before the tax breaks though. And it can cover 238 miles and that is more than of course,
model 3.
Lauren Fix, known as the car coach. Thanks, Lauren, love to see you here to decipher all of this for us. If you start with Volkswagen, they have a
huge monumental P.R. problem with this dirty emissions scandal, what are they hoping to get at with the electric cars. Because apparently they are
going to have a lot of models within the next ten years.
LAUREN FIX, AUTOMOTIVE ANALYST, THE CAR COACH: Right, and that's part of the settlement that they are having with the U.S. federal government and
the EPA, is that they have to come up with more electric vehicles. They need to put our charging stations and put the charging stations out for
everyone. So it's not just about Volkswagen. Whether have a Nissan Leaf, you buy a Chevy Bolt, you buy a Ford C-Max, you will be able to use it.
So that is a part of that settlement. But I have to give VW a lot of credit. Because they are coming out and saying we're doing this now. We
are coming out to show you this vehicle has more range, and they have been having the E Golf in Europe for years. And sales in Europe are big, it is
great place to launch it at the Paris auto show.
NEWTON: And of course we have so many more emission standards coming in all over the world, Europe and North America. If grow to VW though, do you
actually think -- I am going to be skeptical about this.
Don't you think that huge emissions debacle where let's be clear they lied to their consumers, and also to the rest of us who were ingesting those
dirty fumes and still are by the way, that it could actually engage more people with the electric car because VW is essentially going to be
subsidizing it.
FIX: That is part of it. I have to say for U.S. sales, they are down in electric vehicles. They have to sell them in the state of California. At
some point with the cost of electricity going up, it will start to balance itself out. Because now you are talking about OPEC making less oil that
might causes prices to rise a touch. But the fact is there is a lot of oil available.
And we're not using as much because our vehicles get better fuel economy and there is a lot more that goes to that some states are requiring and
there are wonderful incentives. But bottom line, I have to give Volkswagen credit for doing it because they're getting a lot in their face after they
did mess up. There is no question about that. Will they be able to return trust to consumers? I don't know. It's going to take a long time. I will
tell you that.
NEWTON: Did you see this car?
FIX: Yes, I did.
NEWTON: What did you think?
FIX: I thought it looked really cool, but Volkswagen always does great. Remember VW group is a huge group than encompasses Audi, Porsche,
Lamborghini, Bentley, Ducati, Skoda and those are European brands. When you start looking at what is available and their technologies, you start
realizing they have a lot of technology that they can use.
But I really, truly have to give a ton of credit to Mary Barra for getting that Chevy Bolt out today. Because the fact is you can get them soon, and
they are actually up for North American car of the year, and that is huge for General Motors. Now I was just on the phone with a GM person, they are
very excited.
NEWTON: We have to point to -- we have very little time left, in some states the car is actually quite cheap because of the tax breaks, right.
FIX: Yes. You can get a $7500 from federal tax credit, you can $2500 from your state, and your company may offer so, and your municipality might, it
might cost you nothing just about.
NEWTON: Lauren Fix, come again, we'll get the car in the studio next time.
FIX: Oh, yes.
NEWTON: And that's Quest Means Business for this evening. I am Paula Newton in New York. The news continues right here on CNN.
END
