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Quest Means Business
Trump Calls for Trillion Dollar Infrastructure Plan; Dow Up 300 Points on Trump Speech and Fed Optimism; Trump Wins Praise for Presidential Tone
Aired March 01, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN ANCHOR: What a day. The Dow is up, a gain of some 300 points. The final number powered through 21,000 and went over
and above that. Hang on. They are both pushing it at the same time. A little bit of confusion there. Up 301 points. Not the best of the day.
Through 21,000 and it all happened on Wednesday, the 1st of March. The state of the market is strong. President Trump sends the Dow to new brand
new highs. The trouble with trillions. Congress wonders how to pay for Donald Trump's infrastructure plan.
And the parliamentary ping-pong begins. The government's Brexit plans and now there is a commotion as a result. I'm Richard Quest live in New York
and I mean business. Good evening. Tonight, optimism from two presidents that send stock markets roaring into new historic milestones. First of all
Donald Trump's performance in front of congress has instilled confidence in investors and so the rally, the hope rally continues. But also, pushing
stocks higher were the comments of the president of the New York Federal Reserve made on this program last night. Bill Dudley signaled an interest
rate rise likely on the way. He used the word compelling.
When you take the two presidents and put it together at the corner of wall and broad in lower Manhattan the Dow Jones industrial average settled at a
record. 21,000 for the first time. Over 302 up on the Dow. Straight out of the gate, up it went. Almost at the best of the session. 21,114.
Banking stocks surged and for good reason. In our exclusive interview, President Dudley said the case for an interest rate rise has become a lot
more compelling.
(BEGIN VIDEO CLIP)
BILL DUDLEY, PRESIDENT OF THE NEW YORK FEDERAL RESERVE: After the election, we have seen large increases in business confidence. We have
seen buoyant financial markets. The stock market is up, credit spreads are narrower and we have the expectation that fiscal policy will move in a more
stimulative direction. Put it all together. The case for monetary policy tightening has become a lot more compelling.
(END VIDEO CLIP)
QUEST: That's of course, normally interest rate rises wouldn't propel the market higher. It suggests these days the economy is secure and then it
can take these rises. There have been just 24 trading sessions since the Dow crossed through 20,000 on January 25. If you are calculating, you
don't count the weekends or bank holidays. You only count those trading sessions. That 24 days from January to now matches the record for the
quickest jump, the quickest thousand-point milestone in 1999 when the market went from 10,000 to 11,000. This proves the nature of the market.
We have gone from 17 to 21,000 in the space of just under three years. Peter Costa is at the New York stock exchange. Joins me now. Peter, look.
I know the argument, the percentage, 1,000 points at this level is not the same as 1,000 points when you're down at 5,000 or whatever. But the nature
of today's rise was quite spectacular.
PETER COSTA, PRESIDENT, EMPIRE EXECUTIONS, INC.: It absolutely was. I think this had all to do with Donald Trump last night. I think, you know,
we really didn't have such great data from the beige book which is one of the major tools we use. It really wasn't that great. So, this is all
about Donald Trump and about, you know, the optimism he broadcasted last night.
QUEST: Bearing in mind he said tax cuts will come after Obamacare repeal and replace.
COSTA: Right.
QUEST: That's going to be very difficult to do. How realistic is this expectation upon which the market is trading?
COSTA: I think it is very unrealistic. Although today's market is just strictly from last night, the overall market is way ahead of itself. I
think people's expectations of this quick fix to Obamacare or the quick change over from Obamacare to Trump care, the tax cuts that are going to
happen at some point in the next six to nine months, these things take time and they don't look like what everyone thinks they are going to look like.
I think there is a little bit of -- I'm not going to say irrational exuberance but there is a lot of optimism that may be just a little
misguided.
QUEST: William Dudley in the interview yesterday described it as animal spirits. Would you agree?
COSTA: I think that's a new way to describe it. We have gone from the irrational exuberance to animal spirits. I like that. I'm going to use
that from now on.
QUEST: The question, of course, is -- yesterday we took a breather. A 20, 30-point breather. When the market does properly take a breather as,
indeed, it invariably will the issue becomes whether it just treads water while concrete gets put in underneath or does it fully correct.
[16:05:00] COSTA: I think -- and I'm saying this from looking from the fundamental approach, not the technical approach. There should be a
pullback. It makes sense. It is probably really healthy for the overall market to have the corrective phase. Trading water, we have been in that
situation. We were in it last year. Nothing gets done. It is very hard to invest. It is very hard to look at things and invest. So I think we do
need that phase. I'm expecting to see it maybe for some geopolitical reason or just, you know, we'll get tired and the market will sell off a
little bit.
QUEST: Tired? I'm exhausted. Good to see you, sir.
I know the feeling, sir. A sea of green on the Dow 30. Only two. Interestingly Walmart. There were gains. It had better intel. That's a
frolic of its own. McDonald's up 1 percent. Besides the broader market rising, the company came out with the fact it won't start a delivery
service. It is changing earnings and the way it's forecasting things. The best gains of the day, absolutely, look at that. JPMorgan, American
Express, Travelers, even Boeing. You have the infrastructure ones. Goldman up, Caterpillar up 2 percent. According to the CME group the
chance of an interest rate hike in march has now doubled to 66 percent from 35 percent. It was all because of what President Dudley said on this
program. That helped the banks because low rates make it more difficult for the banks to make money. The U.S. managing editor of the financial
times. Joins me now. I hope that's tomorrow's paper.
GILLIAN TETT: U.S. MANAGING EDITOR OF THE FINANCIAL TIMES: It is indeed tomorrow's paper, Richard. Wall Street hits record high as markets bet on
fed rate rise. An exclusive interview with you. That echoes the central theme.
QUEST: Coming back to this idea of -- you may have heard peter down at the exchange. The realism of what we heard last night. It will be sooner
rather than later. We can factor that in. This idea, Gillian, of expectations that can't be met because of congressional difficulties.
TETT: Richard, you are absolutely right. If you look at the speech at face value yesterday and said was there nothing else to justify this
extraordinary sense of optimism not just by investors but the CEOs I have been speaking to recently and I'm sure you have, too. If you listen to
their words and look at the optimism, it doesn't add up. What a lot of you are betting on now is not all the issues creating animal spirits are going
to come from congress. Getting stuff through congress in the next six months will be hard. The Republican party is very divided. Talking about
Obamacare up front will make things incredibly complicated in terms of tax cuts, all of that. There is a lot the administration can do. A lot of it
is about tone, personnel changes. A lot of it is due with deregulation. That's one of the key things unleashing the animal spirits. Not just the
issue of tax cuts.
QUEST: You put your finger perfectly on it. It's true.
TETT: It's not all about congress. It's not about tax cuts or creating a better business environment in the United States which is really what the
president was talking about last night.
QUEST: Absolutely. It's interesting. If you talked to the CEOs of major Wall Street banks, yes, they like tax cuts. They don't need a full-scale
roll back of Dodd-Frank to feel confident and relaxed. That would require congress. They are excited that with a few personnel changes at the fed
with removing some of the gold plating on the regulations like putting the fiduciary rule on hold which happened today. Those are the things in the
business climate. Yes, tax cuts matter enormously. Yes, I think there is a lot of room for disappointment. But the key message is don't just look
at congress.
QUEST: Why is the market not giving more credence or importance to the potential for trade disruption? TPP, we'll talk about in a moment further
down the program. You have NAFTA. You have a president who wants bilateral negotiations in a multilateral environment.
TETT: Yes. It's absolutely right. Personally, I agree with Peter Costa. There is a lot of scope for disappointment going forward as people begin to
realize the markets are pricing in all the good things Trump says and ignoring the bad things. Here's a thought. One sentence which was not in
the speech last night was a clear-cut sentence about embracing the border tax. It sounded like he was leading up to it. As our columnist pointed
out that was missing in the speech. It looked like it was taken out at the last minute. That shows there is disagreement inside the Trump team about
the importance of clamping down on trade issues. My best guess is many people in the markets are betting the realists will win out over the
nationalists.
[16:10:00] QUEST: I've got a little bet for you.
TETT: Let's eat French cheese and talk trade policy.
QUEST: Better still, you have to come in one day and explain the border adjustment tax with graphics and diagrams. How about that?
TETT: I will test you on it.
QUEST: Good to see you.
Fail that test before it's out of the gate. The border adjustment tax is something we'll need to know about at some point. I have put it off as
long as possible to find out the details. President Trump was on capitol hill. He had a shopping list. He didn't bring his wallet. Who's going to
pay for the very expensive promises he's been making?
(COMMERCIAL BREAK)
QUEST: Investors liked it, voters liked it and the president is getting widespread praise for the way he addressed the U.S. congress last night.
So much so the White House has decided to postpone a rollout of a reworked travel ban. President Trump was expected to sign that today. However,
senior administration official told CNN the White House wants the executive order to have its own moment. One of the highlights of the speech is when
president Trump called for a trillion-dollar investment into infrastructure. A trillion dollars is a lot of money, even in a $16
trillion economy. So, what will a trillion dollars buy?
Well, 239 One World Trade Centers in today's money. More by the time we get there. It will pay for the space shuttle program three times over and
you would still have the best part of a billion in your back pocket to spare. And it would easily cover the cost of a thousand Hoover Dams out
west. The problem, of course, how is President Trump going to pay for his agenda? Well, look at the prices.
[16:15:00] The first one, of course, is the actual investment, the infrastructure investment. He put a number on it. We knew infrastructure
investment was coming. That was part of the campaign. Now the president has actually put a number on it and it is. He wants $1 trillion by way of
money to pay for all of this. He believes it can be done with a public- private partnership.
The exact mechanisms, of course, would be worked out. Public private partnerships aren't new. They are very tricky, as many in Europe have
discovered. Second one is the full repeal of Obamacare. It's going to be difficult politically. It will be expensive. The full repeal of Obamacare
would be $350 billion over ten years. Now as for the overall cost of the Trump plan on tax reform, when it arrives it is going to be expensive.
Particularly if the goal is to give the middle class a tax cut while at the same time not having any revenue raising measures elsewhere. And so far,
there doesn't seem to be many of those on the horizon. The Trump plan once it is put into place could cost $7 trillion over ten years. House
Republican plan would reduce money. We spoke to the U.S. treasury secretary after the speech and asked Steve Mnuchin how the administration
will pay for this ambitious agenda.
(BEGIN VIDEOTAPE)
STEVE MNUCHIN: TREASURY SECRETARY: Well, we are going to grow the economy. That's the number one issue. We have to get back to sustained
long-term growth rates 3 percent or higher. We'll have a tax plan that will bring business back to the U.S. and make it competitive again.
There's a lot to do.
UNIDENTIFIED REPORTER: One of the things that house Republicans were looking for is an embrace of the border adjustment tax that didn't come
tonight. Where does the administration stand on it. It's sort of unclear.
MNUCHIN: I think, as we said, there are many aspects of the border adjusted tax we like. Certain aspects that we are concerned about and we
are working with the leadership in the house and the senate. We are going to get tax reform done.
UNIDENTIFIED REPORTER: If the president embraced it speaker Ryan would have leapt out of his chair and hugged him. I'm not sure what senator
McConnell would have done.
MNUCHIN: We'll get tax reform done. There will be a unified plan between the administration and congress. We'll get it passed.
UNIDENTIFIED REPORTER: What's next up? This is a big moment for the president. The budget is presented on march 13, I believe. Has to be by
the 14.
MNUCHIN: Right.
UNIDENTIFIED REPORTER: What's first out of the box for the administration.
MNUCHIN: As you know, repeal and replace on Obamacare is the number one issue. Taxes will be the number two issue behind that. There is a lot we
are doing on the regulation side. A lot we are looking across the board. It is exciting. A lot of action.
UNIDENTIFIED REPORTER: Infrastructure, a billion dollars.
MNUCHIN: A trillion dollars.
UNIDENTIFIED REPORTER: OK. How is that paid for?
MNUCHIN: I think we'll look at a bunch of different things. We'll look at a bunch of different private and public funding opportunities. So, we are
excited.
(END VIDEOTAPE)
QUEST: Now one of President Trump's first measures when he came into office was to with draw from TPP. The Trans Pacific Partnership. Last
night before congress he made much of that and wore it as a badge of pride that he had withdrawn from TPP. A deal which he's described frequently as
being a disaster for American workers. The chairman of the senate finance committee and most recently for three years was the U.S. ambassador to
China in the last part of the Obama administration. He told me by withdrawing from TPP the Trump administration made a very bad situation
considerably worse.
(BEGIN VIDEOTAPE)
MAX BAUCUS, FMR. CHAIRMAN, U.S. SENATE FINANCE COMMITTEE: He did not really address the United States engagement and how we are going to be more
prosperous internationally. I was ambassador to China for three years. I can tell you that nothing of greater geopolitical importance crossed my
desk than the Trans Pacific Partnership. The failure of the United States to grant TPP, to vote for TPP, I think, will be the beginning of a long
slide where the United States will lose influence, lose economic influence and geopolitical influence in Asia.
QUEST: You say that, ambassador. Yet last night the president wore it as a badge of honor and pride that his first act was to with draw from TPP.
BAUCUS: That was a mistake. It was a tragic mistake. That may be a badge of honor. It may work today. When we look back a few years from now it
will be seen as a major mistake.
QUEST: Because it was a bad deal or he didn't renegotiate it.
BAUCUS: Because he -- the United States is withdrawing from the region. First of all, it was not necessarily a bad deal. It did not lose jobs.
Second, it reduces failure. Reduces our national security interests in Asia and signals to the world and China the United States is leaving, China
will be filling the void. China will get a major economic and geopolitical advantage.
[16:20:00] QUEST: But the president said I'm not president of the world, I'm president of the United States. That resonates in places like your
state.
BAUCUS: The United States is part of the world. They have to be involved more so with each passing year.
QUEST: Go back to TPP. When you realized it was going, what did -- obviously China. What were you hearing from the Chinese? Pardon the pun,
Chinese whispers coming back. The Chinese were salivating because they have their own.
BAUCUS: They do. It's called RCEP. They have other deals, too, in Asia. Whether it is AIB, Asian Infrastructure Bank. Whatever it is, they have
their own deal putting together agreements against the same countries in Asia to our detriment. We're not part of it.
QUEST: Did other leaders in other countries that were part of it, many of whom had expended great political capital like Malaysia or Australia and
New Zealand. Leaders had political capital into getting TPP under way. What were they saying to you?
BAUCUS: They are very disappointed. The ambassadors of the other countries. It's a mistake because what's going to happen? Ambassadors
from Vietnam, Cambodia, Singapore. We want the United States to be present in the region. We can push back against China if you Americans are there.
We have to deal with the United States. We have to deal with China. If the United States starts to pull out that will mean China will have to be
much more effective in pushing against us on things we don't want to do.
QUEST: Aren't you -- to use that famous phrase which you will have heard many times. With respect, ambassador, aren't you on the wrong side of the
argument here? There is a popular acceptance or a popular feeling that he's done a good thing in pulling out from TPP.
BAUCUS: OK. You have to do what you think is right. You have to speak truth to power. You have to believe in what you think is right. Most
people I talked to virtually unanimously have some understanding of this, especially in Asia agree it is a big mistake. My view is Trump ought to go
back, renegotiate it. I don't care what he calls it. He can call it Trump PP, call it anything. As long as we are still present in the region.
(END VIDEOTAPE)
QUEST: In the weeks and months ahead, president Trump used his speech to reassure allies saying he strongly supports NATO. Most interestingly he
took credit getting members of the alliance to spend more on defense.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT: We strongly support NATO, an alliance forged through the bonds of two world wars that dethroned fascism and the cold war
and defeated communism. [ applause ] but our partners must meet their financial obligations and now based on our strong and frank discussions,
they are beginning to do just that. In fact, I can tell you the money is pouring in. Very nice.
(END VIDEO CLIP)
QUEST: The money is pouring in. The president is right about the numbers. Perhaps maybe not the motives. Spending from NATO members and excluding
the U.S. did rise nearly 4 percent last year. Those spending commitments were made in 2014, long before Mr. Trump announced the presidential run and
of course as we have talked on the program, five of NATO's 28 members do make the recommended 2 percent of GDP spending on defense. Well, let's not
let the facts get in the way of what Mr. Trump said last night. When I spoke to the former secretary general of NATO, I was surprised the former
secretary general was clear about this. He agreed that Donald Trump was having a positive effect in making NATO members pay up.
(BEGIN VIDEOTAPE)
[16:25:00] ANDERS FOGH RASMUSSEN: Actually, I think he had the right strategy because many Americans have tried over time to get European allies
to pay more. After Trump's very direct statement they understood. Now it's serious business. In 2014 we decided at the NATO summit in Wales that
over the next decade our allies will achieve the 2 percent NATO goal for investment in defense. But nothing really happened until Donald Trump made
his statements and now money are pouring in.
QUEST: What is the -- I mean obviously in your time as secretary general you heard every excuse known to man for why countries wouldn't pay. It's a
guideline, the 2 percent. Did you get frustrated? What were the excuses you got?
RASMUSSEN: Well, first and foremost it was the financial crisis. When you don't have enough money it's a hard sell to argue that you should spend
more money on military. Until 2014 people thought there was no real danger in Europe that we were safe. We harvested what we called the peace
dividend. But in march 2014, things changed. Putin attacked Ukraine. We live in a completely changed security environment. To the fee, I would say
the security fee has gone up. That's why European allies now say they must pay more.
QUEST: Last night he could not have been clearer. The U.S. is 100 percent four square behind NATO. Did that reassure you?
RASMUSSEN: Yes, indeed. I think Mr. Trump is now more what I would call Reagan-like. Just like president Reagan, he understands that to make
America great, he needs to negotiate with the Russians from a position of strength and that's exactly what he argued last night.
QUEST: What is it now that the alliance is lacking?
RASMUSSEN: Well, if you have a look at the European allies they are lacking capabilities within what we call intelligence surveillance
reconnaissance and transport capacity. Actually, the Europeans do have more soldiers, more troops than the United States. They can't move them
because of a lack of transport capacity. For the European allies, those priorities are very clear.
(END VIDEOTAPE)
QUEST: Former head of NATO.
On the newsletter this evening it arrives after the New York markets close. We are discussing why the market is rising and whether or not there is
sustainability as well as a look ahead to tomorrow. Before Asia and Europe opens. CNN.com/quest to subscribe. The CEO of Uber is having a taste of
his own medicine after saying some drivers don't take responsibility for their own actions. Now he's taken responsibility for his own and says he
needs to grow up.
[16:30:00] (COMMERCIAL BREAK)
QUEST: The British House of Lords hands Brexit its first defeat inside parliament. I will talk to one of the lords who voted on an amendment to
the bill. Uber's 40-year-old chief exec admits it is time for him to grow up. We'll have those stories after the news headlines. This is CNN and on
this network, the news always comes first. Major milestone for the U.S. stock market. The Dow has roared through 21,000 for the first time.
Investors cheered president Trump's speech to congress. While the speech may have lacked specifics, Wall Street welcomed the optimistic tone. 303
points at the close of trading.
The Taliban claimed responsibility for two separate attacks in the Afghanistan city of Kabul. Car bombs exploded near police headquarters in
the first attack. In the second attack gunmen targeted an office of the Afghanistan intelligence agency. 15 people were killed. Dozens of people
were wounded in the attack. A blistering human rights report says rebels deliberately targeted civilians. The strident criticism focuses on it and
Russia accuses them of using banned weapons and bombings. Sources tell CNN three of president Trump's top foreign policy advisers believe Iraq should
be removed from a new travel ban. One of the main reasons is that Iraq's role in fighting is. It is unclear if the White House made a final
decision. New executive orders expected later this week.
The chief executive of Uber, Travis Kalanick says he'll get help with leadership skills and admits he needs to grow up. He was caught on camera
getting into a heated argument with an Uber driver over rates. Bloomberg said they got the video from the driver.
(BEGIN VIDEOTAPE)
UBER DRIVER: I lost $97,000 because of you. I am bankrupt because of you. You keep changing every day.
TRAVIS KALANICK, CEO, UBER: Hold on a second. What have I changed about black?
UBER DRIVER: You changed the whole business.
KALANICK: What?
UBER DRIVER: You dropped the prices.
KALANICK: On black.
UBER DRIVER: Yes, you did. It was $20. $20. How much is the mile now, $2.75?
KALANICK: You know what? Some people don't like to take responsibility -- they blame everything in life on somebody else.
UBER DRIVER: You emailed for town car.
KALANICK: Good luck.
UBER DRIVER: Good luck to you, too.
(END VIDEOTAPE)
QUEST: Kalanick then sends a company-wide email late Tuesday night. He says, to say I am ashamed is an understatement. My job as your leader is
to lead. That starts with behaving in a way that makes us all proud. That is not what I did. It cannot be explained away. It is clear this video is
a reflection of me and the criticism is a stark reminder that I must fundamentally change as a leader and grow up. This is the first time I
have been willing to admit that I need leadership help and I intend to get it. Mark Murphy is the founder of a consultant firm. Is the apology
heartfelt or is the apology because he got caught?
[16:35:00] MARK MURPHY, FOUNDER, LEADERSHIP IQ: I think it is a little bit of both. One thing to remember is that a lot of CEOs, especially founders
who grow their company, Bill Gates of Microsoft, et cetera. Even Steve Jobs ran into trouble early on. As the company grows in scale the
leadership styles that you could use as a founder, kind of the brash pugnacious style doesn't work when they are dealing with a billion dollar
enterprise. My hope is that what Travis is starting to realize is we have had enough of these things in a row now. One, two, three, four in the past
month or so. All of the sudden I do need to change. We can't endure. If I get any more trouble it starts to hurt the Uber brand.
QUEST: That sort of toe curling, cringe worthy mea culpa apology, you know, I do need to grow up. I hesitate to say this is almost as bad,
evidence. I'm not just a bad man. I am a terrible man. I'm dreadful. I should be horse-whipped.
MURPHY: Yes. It is a little over wrought. If you put in action steps as opposed to the emotive words in the apology. Sometimes when people get
bopped upside the head and they fall down the hole that they are lost for a little bit. They are scrambling around trying to figure it out. They are
reacting emotionally. What do I do next?
QUEST: How much of this is simply that -- Truman had the buck stops here on his desk. More than one president had to remind themselves. We all put
our pants on the same way in the morning. How much of it is you need somebody to say enough.
MURPHY: Yes. I think there is a tipping point that's been hit here with Uber. One of the things that I think Travis has started to realize, I hope
is that the way he acts as a CEO, he's not just making strategy decisions. There is actual real people involved in this. There are employees,
drivers. There is the customers. Whatever strategy decisions he makes, there are honest to goodness lives impacted here. He's got to show more
emotional intelligence in that regard.
QUEST: Finally, what does he need to do? He can go and lay on the psychotherapist's couch and discuss why his father never liked him or
whatever it might be. But that won't help him in terms of making business decisions that investors want. The banks want it. Give me three things he
needs to do.
MURPHY: Number one, avoid the emotional language. Going on the therapist's couch is the wrong thing. He needs to ensure there is
transparency, trust. That there is a mechanism for people to bring bad news. I would go out and whether it's in focus groups, town halls and a
survey. Reach out and get input from the employees, the drivers and from the customers. Beyond their normal rating system which I don't know that
everybody fully trusts at the moment. I would go transparent but from a business process lose the feeling language.
QUEST: We'll have you back again, sir. You can give us guidance and leadership. Thank you very much.
When we come back after the break, the Brexit bill working through parliament in Britain has hit a rather serious snag. One indeed which
could delay when Theresa May is able to invoke article 50. We'll discuss it after the break.
[16:40:00] (COMMERCIAL BREAK)
QUEST: The House of Lords has voted in favor of amending the Brexit bill. This is the law that's being passed that will authorize the prime minister
to invoke article 50. When she's ready to begin negotiations. Now, the amendment says E.U. nationals who legally reside in Britain should have
their status guaranteed after the country leaves the European Union. The amended bill will send back to the house of commons for consideration. In
other words the bill goes back and forth. The hope was it would be a clean bill that would not require ping-ponging between the lords and the commons.
The delay could threaten the government's aim of formally invoking article 50 by the end of the month. His lordship joins me now from London. Come
on, sir. You know ultimately, it's quixotic to vote for that amendment because the commons could overturn it and any way there is the parliament
act when push comes to shove. So why did you do it?
LORD BILIMORIA, MEMBER OF THE HOUSE OF LORDS: This is where the House of Lords has been challenged over this whole period saying you block anything
and we will get rid of you. The threats have come from the government. These threats have come from all quarters and the House of Lords rule and
role is to actually challenge government and do what it thinks is right for the country. In this instance, we believe in the house rules. To my
knowledge which is the biggest vote. It was over 600 peers who voted since 1999. The government was defeated by over a hundred votes with lots of
members of the conservative party actually voting for this amendment. It is a clear message sent from the lords that we think it is only fair the
European Union citizens who brought a huge contribution over 3 million to the British economy should have uncertainty removed and be allowed to stay
in this country.
QUEST: I see the argument. Let's deal with the argument. Then we'll come back to what happens to the bill. From the prime minister's point of view,
she turns around and says, hang on a second. You may be right. We know it's going to end up that way. This is a negotiating point because we need
to guarantee British citizen's rights in the E.U. and you have just taken away my negotiating position.
LORD BILIMORIA: We in the House of Lords who voted for this feel very strongly that this is not about using people and people's lives and
people's families as bargaining chips. We believe we take the moral high ground. We do it with integrity and unilaterally good faith say this is
what we believe in the faith that the over one million people in all the different European Unions, 27 countries will similarly be allowed to stay
on should they wish to. I think this is where we have to stand up for what we feel is right and what Britain stands for and not use people as
bargaining chips. It's very wrong for the government to think of doing that.
QUEST: To be fair to the government, the government did try to get an early agreement on the position of citizens on both E.U. and in the U.K..
It was the Europeans that refused on the grounds that no negotiations until article 50 had been invoked.
LORD BILIMORIA: The Europeans had made the point. She only spoke to a couple of countries.
[16:45:00] This is the whole process with all 27 countries with the commission. That's why it's important that we take a stand here and
recognize the contribution that these people have made to our economy. I think the home secretary wrote a letter to every single peer yesterday
giving us reassurances. What reassurances can she get when she's the individual who wanted last year for British companies to list foreign
workers. One of her ministers came up with the idea last year, well, recently saying British companies should pay 1000 pounds for every European
Union worker. Can we trust a home department with those sort of views, a prime minister who wants to bypass parliament? The only reason we are
having this vote is it had to be taken to the supreme court. We pleaded for a white paper.
QUEST: You accept you're going to lose.
LORD BILIMORIA: In theory, we can lose. We made such an overwhelming point here. People in the commons have been towing the line. We don't
have a serious opposition. We need a serious opposition leader.
QUEST: We need you to come back again and again as we go through the Brexit procedures to understand what's happening in the British parliament.
Good to see you as always in good health.
Impressive gains on Wall Street. The FTSE at an all-time high. The Paris and Frankfurt market were up extremely sharply as well. Here on "QUEST
MEANS BUSINESS" we have regular updates on Venezuela's crisis. The currency in free fall. Food, energy and medicine shortages and depleted
oil prices. Indeed, Venezuela is blocking residents from watching CNN international. Now the central bank says it has $10 billion left in
foreign reserves. Patrick Gillespie joins me now. At first blush, $10 billion sounds a lot of money.
PATRICK GILLESPIE, CNN MONEY REPORTER: Not at all. When you think about it, Venezuela is running out of time with just $10 billion. Think about
next door in Brazil. There is a country in its longest recession history. They have $350 billion in reserves. Argentina, a country also in recession
had a populist government for 12 years like Venezuela. They have $40 billion in reserves. $10 billion is a smidgen when it comes to foreign
reserves. A lot of the reserves are actually gold bars. Not even liquid cash.
QUEST: When you say this, it is something I have never understood, 30 years covering economics. I still have problems with foreign currency
reserves. What purpose do they serve?
GILLESPIE: These are debts. This is rainy day funds, backup money that you have to ensure international investors, hey, we are good for the money
to lend to us. When you continuously run down and Venezuela, keep in mind this is a country with the largest oil reserves in the world. Yet they are
not making more money. Oil prices have fallen so much. They owe so much money paid in oil to China which is one of the biggest lenders. You're not
making money on oil. On top of that, they are completing their reserves. Six years ago, they were 30, 20 and now 10.
QUEST: Of course, you know, the IMF was set up to help countries that got currency imbalances.
GILLESPIE: This is the money you should have that's ready to go.
QUEST: And of course, it helps you in terms of balance of payments, imbalances when people pull money out and the central bank.
GILLESPIE: This helps.
QUEST: For the longest period, we talked on the program about the crisis facing the Venezuelan economy. It is a crisis that gets worse. When does
it come up?
GILLESPIE: The floor is what we are looking for. Venezuela owes $7.2 billion this year. That leads us to thinking end of the year, maybe early
next year we could see a default and what's the significant of this? President Maduro is supporting the military with the money he has left.
That's keeping him in power. Once he loses the cash to support the military you could see the regime change, a coup. The opposition is
fragmented and they are not armed. That's the problem right now. Not enough cash. Running out of time and a government that has all the arms.
[16:50:00] QUEST: Good to see you, sir. Thank you very much indeed. After the break, making money out of snaps. I'm not talking about the IPO.
We'll meet the Snapchat influences next. I'm still trying to work out what Snapchat does besides sending risque photographs.
(COMMERCIAL BREAK)
QUEST: Any moment now we expect Snapchat will price its IPO, snap. It is not just the investors hoping to make a fortune. Big brands paying big
money to include their products in snaps and videos. Some users earn up to $100,000 a year. You want to know how to make money out of snapchat. If
you are a brand. Here's how it's done.
(BEGIN VIDEOTAPE)
MIKE PLATCO, SNAPCHAT INFLUENCER: Hey, my name is mike. I'm a Snapchat story teller here on this beautiful day in Washington Square Park to do
what I like to do -- make Snapchats obviously. Let's go. When I get a story started I first have to think of a really cool thing to make the
story about. For this I wanted to tell a cool story about how when it's beautiful in New York city all the cool Snapchat people come out. There
was a scene in "ghostbusters" where a thing came around that, like a big monster. We are going to do that. A beautiful day like this it's like
spring is here. They are all being super-duper nice. He said I could film a snap chat story. Snapchat is the platform I learned to tell a story on.
I made a story about how much I hate breakfast. Never again.
I have time to kill. Let's see if I can move this can of coke with my mind.
A Snapchat influencer has an audience of people that follow their content and engage with their content. Essentially I have half a million
followers. I am capable of through my content making those followers fans of brands. Making them into potential customers. That's something they
place a high value on. Disney was the first brand to reach out to me. They wanted to bring me to Orlando to launch their Snapchat account. My
blind was blown. I got a free vacation. Great. More brands started to reach out to me. I was absolutely shocked.
KFC asked me to be the colonel.
Especially when they offered me money.
This is Kentucky fried awesome.
You will give me popcorn and coke zero and only charge me $5.
[16:55:00] For AMC and Coca-Cola I did an activation where they wanted me to tell a story about going to the movies. I get to do the coolest stuff,
all of the things that 10-year-old me would absolutely not even believe. I really want a hot dog but they only have mustard. Who does that? Ketchup
or nothing. That's my Snapchat story.
(END VIDEOTAPE)
QUEST: So, we believe that the snap price is at the higher end of expectations. The range was 14 to 16. There are reports tonight -- not
confirmed but the reports are that snap will IPO tomorrow at 17 on the New York stock exchange. Trading begins at 9:30. We are not expecting the
stock to open for an hour, hour and a half, maybe later. The IPO price seems to have been set at 17. We'll have a profitable moment after the
break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, last night on this show frankly to be honest I was a little pissed off with the stock market, after all the
failure to reach another record high meant we wouldn't make the all-time high and beat that of 1897. Well, today the stock market came back in a
roar and managed to kiss and make up. Look at that. 303 points on the back of Donald Trump's comments and the prospect of interest rates.
21,115. The market didn't just tiptoe forward. It roared up like an express train! And never looks back and what I heard on the floor of the
exchange today is there's a quiet confidence about what's happening in the market one that's likely to continue for some time. That's QUEST MEANS
BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable. And we will do it all again
tomorrow. Good day.
END
