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Quest Means Business
Bitcoin Recovers Slightly after Plunge; Crisis in Catalonia; U.N. Adopts Tough New Sanctions on North Korea; Trump Signs Tax Bill; Spielberg's New Movie, "The Post"; Markets Feel the Trump Bump; Tech Companies' Valuations Reflect Real Sales; Social Media Used for Russian Meddling; Debut of the QUEST EXPRESS; The First Lady of Wall Street. Aired 4-5p ET
Aired December 22, 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]
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PAULA NEWTON, CNN HOST (voice-over): December 22nd. Tonight, bitcoin: Bah, humbug. Cryptocurrencies suffer a Christmas collapse. (INAUDIBLE)
and a standoff returns in Catalonia.
And tax reform, yes, it is a done deal. Now Donald Trump has his eye on infrastructure. That's bold.
I'm Paula Newton and this is QUEST MEANS BUSINESS.
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NEWTON: Tonight, a very unhappy Christmas for the bitcoin bulls. The cryptocurrency climbing back after a major plunge. So many investors
rushed to sell that trading was suspended on several major exchanges. Now at midnight Thursday, take a look at this in London time.
All was well. All was quiet. Bitcoin was worth almost $16,000. OK. Breakfast, it has fallen 20 percent by that time, putting it in bear market
territory.
Now if breakfast wasn't enough to upset your stomach, shall we say, lunch, you were feeling even worse. Bitcoin fell below $11,000, down a third from
the night before. And here's how it stands now. Above $14,000, it's still well off Sunday's high of $19,500.
Michael Casey is the chairman of the Coindesk Advisory Board and he is the coauthor of the book entitled, drum roll please, "Age of Cryptocurrency."
MICHAEL CASEY, COINDESK ADVISORY BOARD: Right. Also might I add senior adviser to MIT Media Labs Digital Currency Initiative. We got that on the
table.
NEWTON: And that's good that that's on the table.
What are you advising them today?
You saw that. That is not for the faint of heart. You know, you've seen it in the press today, a lot of people are saying, OK, this is what we
expected to happen.
CASEY: Right. And those of us following (INAUDIBLE) what we focus on, certainly, at MIT and elsewhere is really the underlying technology. So
this is an ongoing feature of life in the crypto world is this phenomenal volatility.
You know, it's still a very thin market, if you compare it to, say, you know, big global money flows. It's not a well-regulated market.
NEWTON: But it is a bubble?
CASEY: Well, yes, I think it probably was. But then again and it probably bubbles in a series of bubbles. I mean, I actually am just less interested
in where it goes in terms of the underlying price.
I think that if, at the end of the day, bitcoin and not some other currency like it becomes the underlying reserve asset of this digital decentralized
future we think is going to emerge out of this, then, yes, it could go to 400,000, 1 million. If something else is it, then it could go to zero,
right?
It's a binary sort of thing. And in that environment when you've got an enormous amount of hype and speculation, you get these very bubble-like
activities. I think we will probably find a base and, as we did exactly the last time, three years ago, when we have done it at intermittent times,
it will then recover.
You saw the move. It got to 10,000 and then to 14,000. Just as interesting as that fall, by the way, from 16 to 10, is the 10 to 14
recovery, right?
It's an incredibly volatile market. But it's just less interesting to me than why we should care about the --
(CROSSTALK)
NEWTON: OK but you know you're in the minority by saying it's less interesting to you. It is becoming much more interesting to governments
and regulators. Today in terms of the commentary, a lot of people, very self-righteous in saying, we told you so and a lot of that coming from more
of the institutions.
Is there a point to the risks they say are on the table and the fact that it could materially affect a lot of what's going on in the markets around
the world?
CASEY: Sure. I think that, you know, you shouldn't be involved in this if you are putting anything more than sort of a small amount of risk capital
involvement. And I think this is just a massive experiment.
So no one who takes this stuff seriously is saying this is something you should pour all of your money into. Again, the interesting thing here is
how are we going to apply this technology to the decentralization of the global economy, not necessarily am I going to make a quick buck, right?
So, yes, I think that from the perspective of those who care about where the price is, there is some concerns about their losses. We don't have
anywhere near the amount of leverage in this market that we do in sort of more established markets.
It's starting to appear and that is a bit of a worry but we don't have the kind of risks that you faced in the housing market, for example, back
before the collapse. Or for that matter even in the dotcom bubble. So you know, that leaves us sort of somewhat protected from broad systemic
fallout.
NEWTON: OK. And by now a lot of people have probably, you know, have been reading about the technology behind these cryptocurrencies, blockchain
technology, whatever else you want to call it in terms of what is branching off from that end.
Governments, though. Governments are still taking about the price. You know they are. They're not talking about the brilliant technology behind
it.
CASEY: Well, they are, actually. In fact, if you look at what a lot of governments around the world are doing, they're exploring digital currency
alternatives. You've got some of the big multilaterals, the World Bank, the IMF, the U.N., all with these --
[16:05:00]
CASEY: -- blockchain labs exploring how this technology can be worked. The conversations that I've had with SEC, with the CFTC, with the Fed,
even, there is some serious focus on this.
I think people who know what this is about know that you have these two worlds, basically, hype and speculation. And all of that is natural. You
have to have that to some extent.
Without the hype and the speculation, you don't get the sort of the buy-in and all the social infrastructure that has to come with this.
But the other side of it is to really think about all the stuff that still needs to happen, the scaling; there is an enormous amount of work that
needs to make this technology work. But it is real and has the potential to really, you know, level the playing field across all sorts of sort of
financial activities.
NEWTON: OK. I don't have a lot of time. I am going to put you on the spot for one second. One final answer. 2018. At the end of the day, if
we're sitting at the desk at the end of the year, are we going to say it was the year it went bust or -- and I don't mean on price. I don't mean on
price.
CASEY: No, it won't go bust. And certainly not blockchain technology and cryptocurrency ideas. This is --
NEWTON: OK, Michael, you're invited back then. You just bought yourself another seat in the chair. Appreciate it, Michael. Happy holidays to you.
Now European markets also finished in a sea of red, dragged lower by the political uncertainty in Spain. The Madrid IBEX was the day's worst
performer, falling more than 1 percent.
Catalan separatists are cheering pro-independence parties held onto their parliamentary majority in Thursday's election. The result is, of course, a
slap in the face, one that stung for Spain's prime minister, Mariano Rajoy.
He had hoped the vote would prove Catalans don't want independence. Carles Puigdemont, the former president of Catalonia, who right now is sitting in
self-imposed exile in Brussels, said it's time for the Spanish government to do what it has refused to do for seven years: start negotiating.
CARLES PUIGDEMONT, CATALONIAN PRESIDENT (through translator): Prime minister Rajoy has a wonderful opportunity to start siding with the
solution seekers and to not create any more problems than he has already created.
In this sense, I can already say that I am willing to meet with Prime Minister Rajoy in Brussels or in any other place in the European Union
outside Spain because of obvious reasons.
MARIANO RAJOY, SPANISH PRIME MINISTER (through translator): The person I should sit down with is the person who won the elections, which is Ms. Arie
Mathers (Ph).
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NEWTON: Now here's what Mariano Rajoy is talking about, the breakdown of the vote. This is so interesting. I woke up to this morning and I
actually took a while for me to figure this out. I'm not sure I have yet in terms of coalition politics in Spain but let's give it a shot.
The parties in blue support independence. The parties in pink oppose it. The pro unity party Solidados (ph) party has the largest overall share with
37 of the 135 seats in parliament. But separatist party together maintain their majority and that is the key point here, taking 70 seats.
The election was, of course, a disasters for Mariano Rajoy Partito Popular (ph), it went from 11 seats to just three. That's all they got on the
table. So the political picture has not changed since the crisis began. Yes, we have gone nowhere.
But the economic picture, unfortunately, has worsened. More than 2,000 companies have said they will now move their legal headquarters out of
Catalonia. Bank stocks, as you can imagine, fell further. Shares of Cachebank (ph) and Banco Sabadell (ph), the two largest banks in Catalonia,
fell more than 3 percent.
Joining me now, Vicki Pryce is an economist with the Center for Economic and Business Research.
I mean, in terms of just dealing with the political fallout, let's deal with that piece first. If you're Mariano Rajoy, how do you pull this back
together so that it doesn't continually take shots at the Spanish economy, more than anything else?
VICKI PRYCE, CENTER FOR ECONOMICS AND BUSINESS RESEARCH: Well, when you mentioned that what you would need to do is start talking, really, with the
separatists. Because what he had done before, which in a way sort of made the crisis even worse is use very strong-arm tactics, alienating lesser
people.
If you remember, the police had gone in and tried to, in fact, preventing people from voting in October, when they voted in the referendum first.
And now we have a situation where the leader of the separatists, certainly the person who was running Catalonia when the referendum took place, is in
exile. A couple of his colleagues are in prison. A couple of others are out on bail.
So there's no way that this situation can be maintained in any way. And it's true, I think, what a number of people have been saying, which is we
have gone back to square one. And now I think Madrid is going to have to compromise.
NEWTON: And, of course, that's what for. If it is compromise, will come from the other side. So let's deal with first things first. In terms of a
coalition government that can actually talk to Mariano Rajoy, how far away are we from that?
Because as I said, waking up to this, this morning, I looked at it and thought, OK, what now?
PRYCE: Well, the Citizens' Party would like to see whether it's been the largest can actually have a coalition. The trouble is that the parties
they could have a coalition with are separatist, where they're pro- unionist.
[16:10:00]
PRYCE: That's unlikely to happen. It seems to me that what we're going to have is a coalition yet again of the separatists. So -- and that question,
of course, will remain in terms of who leads it and from where and will it be recognized.
Obviously, if Puigdemont were to return, he faces an arrest warrant for him. So we don't really know whether he'll be able to go back to Barcelona
and, in fact, claim his -- what he would consider to be his rightful position as perhaps the head of the region.
So there are these issues to be sorted out and somehow or other, his departure from Brussels, without him being arrested, has to be guaranteed
before anything else can be.
NEWTON: And, Vicki, before I leave you, in terms of that separatist moment, looking at the hard economic facts, whether they like them or not,
do you think it will push them more towards compromise as opposed to actually leaving Spain?
PRYCE: Yes, I think what they really want is a little bit more autonomy than they have and recognition. The economy is so important for them. As
we know, it's 20 percent of GDP in Spain and a lot of exports go from that region, 26 percent. And loads of companies, as you mentioned, have been
headquartered there.
And, of course, they've been moving out. And I think it is very important, I think, for Catalonia itself to have a strong economic future.
NEWTON: Yes.
(CROSSTALK)
PRYCE: And to be separate it's going to be a problem.
NEWTON: A heck of a way to end 2017. That is for sure. Vicki, thanks so much as always for being here with us and have a good weekend and happy
holidays.
PRYCE: Thank you.
NEWTON: Now no such drama, thankfully, on the U.S. markets. OK, it was a really slow day. I watched this for the day. It was a weak finish. But
let's face it, there wasn't much volume out there. The Dow dropped 36 points, drifting from that next milestone of 25,000.
Now the Dow, though, has climbed, get this, a staggering 25 percent this year with 70 -- count them, 70. Richard is not here to count them for you
with the chalk but it's 70 closing records. The U.S. President Trump is now officially on his Christmas break. And he wanted to give his taxpayers
a gift before he left.
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NEWTON: The United States warns of a new round of sanctions against North Korea will cut even deeper than ever before. As the United Nations adopts
even more restrictions against the rogue nation, designed to strangle its energy supply.
In the past few minutes, President Trump tweeted his approval, saying, the world wants peace, not death.
Elise Labott is in Washington and joins us for more on this.
Elise, I was anxious to talk to you about this today. If you and I were talking about this last year before everything had transpired in the Korean
Peninsula, we would look at and say extraordinarily, a gamechanger. This I going to really put some pressure on the regime.
And yet is there any guarantee that these new sanctions will do that?
ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Well, I mean, Paula, we have had several rounds of these sanctions on North Korea. And they have
been kind of slowly ramping up. You remember they did --
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LABOTT: -- they banned North Korean coal exports. Then they started taking a look at these North Korean workers that are going overseas and
sending money back that's really funding the regime, which is also in this resolution.
I think that one of the things President Trump in particular has been looking for is for U.N. member states to cut oil shipments to North Korea.
And when we say U.N. member states, right, we really mean China because China gives North Korea -- I think it might even be 90 percent of its oil
supply.
And so I think key here is that China agreed to these sanctions; Russia, who also, you know, has ties to the regime and who takes a lot of these
foreign workers, about 40,000 foreign workers, I think, are in Russia, they have to be out of all these countries by the end of the year.
I think the fact that Russia signed out is very significant and I do think this could potentially be a gamechanger, if these countries actually
implement the sanctions. Just having them on the books is not enough.
But without oil, not only does that affect the North Korean military, it affects agriculture, because farmers can't use their equipment. I think it
could potentially be very significant. We'll have to see if, A, these sanctions are implemented. And, B. whether that is enough to squeeze the
regime.
NEWTON: And in terms of going forward, whether or not this will lead to any kind of a freeze of the nuclear situation, which seems inconceivable at
this point, or at least lead to dialogue, earlier this week, Rex Tillerson announced he would co-host a summit in Vancouver with Canada, foreign
ministers getting together.
It's been a roller coaster with him and what he said about any preconditions to get to the table. From what you're hearing, are they
hinging things on that meeting and thinking that they could come out with some kind of a breakthrough?
LABOTT: I don't think that meeting is really seen as, you know, kind of the pivotal thing that's going to bring North Korea to the table. I think
it's just continuing to slowly ramp up.
What you haven't really seen -- you've had these kind of, you know, loose coalitions of countries, you know, the U.S with South Korea and Japan and
Russia and China on the six-party talks. And you have the U.N. Security Council. You really haven't had this coalition of countries, who are
willing to work together to put the pressure on North Korea and also try and coax it to the table.
So I think the meeting will be good in kind of coalescing world attention and world focus on the problem. I also think that the trip by the U.N.
undersecretary for political affairs, the number three in the department, Jeffrey Feltman, to North Korea, is also very significant. He had about 15
hours of talks there. And he spoke to the North Koreans -- you know, he -- I don't think he had any breakthroughs. But the North Koreans were
engaging with him.
You did see a North Korean ambassador at the U.N. Security Council last week addressing a U.S. secretary of state directly. You heard a lot of
rhetoric coming out of that meeting but the fact that that ambassador was there, I think, is also significant.
And North Korea does seem to be reaching out in some ways to intermediaries to find out how maybe this could be solved. I do think there is a concern,
though, that, you know, North Korea is not going to get ready to talk until it has its program fully developed, its nuclear weapons, that are
deliverable fully in hand.
I think that's something --
(CROSSTALK)
NEWTON: And those concerns with the Olympic Games (INAUDIBLE) a few weeks away. Happy holidays, Elise. Nice to see you.
Now Donald Trump, he got it done. He really did get it done. We weren't sure this morning whether or not he was going to sign that bill before he
went to Florida. But he did. He signed the bill. The U.S. President was signing that Republican tax bill before getting on Marine One.
He says originally he was going to do it in January but after watching cable news this morning -- oh, he admitted he watches cable news, stunning
-- that he said that there was all this speculation about signing and that he said, forget it; I'm going to do it today. With that victory in the
bag, the president says his next big push could be on infrastructure.
(BEGIN VIDEO CLIP)
TRUMP: I really do believe we're going to have a lot of bipartisan work done and maybe we start with infrastructure. Because I really believe
infrastructure can be bipartisan. We've spent $7 trillion in the Middle East. Not to mention, all of the lives and all of the heartache and it's
so sad, $7 trillion. It's time for us to rebuild our country.
(END VIDEO CLIP)
NEWTON: He's absolutely right about that.
Boris Sanchez, who's with the president in Florida, he's not going to get much argument from many Americans about that entirely. And yet it seems so
ambitious to say this on the heels of signing that tax plan.
Is the Trump administration -- just seems --
[16:20:00]
NEWTON: -- to be building on what they perceive to be renewed momentum heading into 2018?
BORIS SANCHEZ, CNN CORRESPONDENT: Certainly to some degree, Paula. Although the president even admitted that his agenda would have probably
moved forward much easily, had he started out with an infrastructure bill. Because he believes that Democrats would have been enthusiastic about it.
And it would have been a place for Republicans and Democrats to find common ground.
And therefore, would have led to that kind of momentum that would have led him to accomplish many more things. This tax reform bill really the
singular major legislative accomplishment by the Trump presidency in its first year.
The president today also signed a continuing resolution that was agreed upon by both chambers of Congress late last night to keep the government
funded through January 19th.
Included in that bill is funding for Child Health Insurance Programs, a $4 billion missile defense plan that the president touted on Twitter. Not
included in the stopgap is a solution for the legal status of DREAMers, for DACA, something that democrats badly wanted to use to accomplish rather
during this government funding negotiation.
Aside from that, an $81 billion bill to help areas that were badly affected by hurricanes last year. Also not included on this. Those two things
lawmakers are likely to tackle early next year.
And then the president added this potential infrastructure bill to that list. The president also stressed to reporters that his time down here in
Mar-a-lago would not be all eggnog and golf but rather that this was a working vacation, that he was looking forward to working with some of his
advisers on major foreign policy areas of concern, like North Korea and tensions that are growing in the Middle East.
And just a few moments ago, Paula, we learned that the president was actually looking forward to holding an end-of-year, all-inclusive,
scheduled press session with reporters. He hasn't had one of those since February.
So he also is now breaking with tradition and not holding when we're told that advisers talked him out of holding that kind of press conference
because they were concerned that the president could potentially be besieged in their words by questions about the Russia investigation and
other distractions that would the president in an uncomfortable position -- Paula.
NEWTON: Well, Boris, we will continue to watch this, as will you in Florida. Apparently the president said he watches cable news, so you will
keep working hard and he may listen.
SANCHEZ: That's right.
(CROSSTALK)
NEWTON: There you go. Boris, thanks so much. Appreciate it.
Now before signing that tax reform bill, President Trump went on Twitter to, you guessed it, slam the media for not giving him enough credit. Now
the antagonism between a president and the media is not new. It plays out in Steven Spielberg's new movie, "The Post."
(VIDEO CLIP, "THE POST")
NEWTON: "The Post" is out Friday. The movie revisits "The Washington Post's" decision to publish the Pentagon Papers. Steven Spielberg agreed
to a rare interview with CNN's Chloe Melas. She joins me now live.
And incredible intrigue. As we said, it is quite rare. And if we talk -- the reviews are actually saying that Spielberg managed to make newspaper
publishing interesting. And that's quite a feat.
CHLOE MELAS, CNN CORRESPONDENT: You know, I definitely feel like I am a biased audience.
NEWTON: I am, too.
MELAS: Not just tackling the First Amendment, it is really spotlighting women and why women need to be in positions of power, because, you know, we
need a seat at the table.
And in the movie, Meryl Streep plays Katharine Graham. She is the publisher of "The Washington Post" and she ultimately makes the decision
for "The Washington Post" to publish the Pentagon Papers.
But "The New York Times" had to stop publishing, because the attorney general filing an injunction and, in the following week, they go to the
Supreme Court. And, well, unless you've read history and obviously I won't spoil the movie but it's already been out there. They obviously get to
publish the Pentagon Papers.
But, you know, Katharine Graham shattered such an incredible glass ceiling. And Steven Spielberg spoke to me about that. And she was the first CEO of
a Fortune 500 company in the '70s. And when you walk away from the movie, you feel like maybe we haven't come so far.
NEWTON: Oh, gosh, really?
MELAS: But I want you to hear what it, because it is very insightful.
NEWTON: OK, let's listen.
(BEGIN VIDEO CLIP)
STEVEN SPIELBERG, DIRECTOR: Many women have broken different glass ceilings over the last couple hundred years since the formation of our
country. But Kay Graham pretty much shattered a pretty important glass ceiling. But we still have a long way to go.
We're not anywhere near where we should have been based on the relationships that men and women have and the way women are perceived,
basically by men, or the way power is used and abused. Things are changing and they're changing faster than I've ever seen things change.
(END VIDEO CLIP)
MELAS: The thing is that this movie should invigorate all of us to support journalist, support the First Amendment and press and the truth to
be out there. And also --
[16:25:00]
MELAS: -- it should make us want to put more women in positions of power, because we can make decisions and we can make really good ones, too. So I
think that it's not a sad movie. It's rather uplifting and it should give everyone a renewed sense of hope in 2018.
NEWTON: It is sad that we're looking at this as a piece of contemporary history and not just history. And I will --
MELAS: That is true.
NEWTON: -- I will leave it at that only to say that I did check with you before I dressed today.
(LAUGHTER)
MELAS: Great minds think alike.
NEWTON: Happy holidays, Chloe, and thank you. You and I will geek out on that movie later. It's all good.
2017 has been a roller coaster ride for the business world from market highs to the lows of corporate scandals. We here have covered it all on
CNN, Caracas.
(BEGIN VIDEO CLIP)
NEWTON: What you see here is (INAUDIBLE) coming up against the National Guard, they are taking whatever material they can.
(END VIDEO CLIP)
NEWTON: On CNN, Seoul.
(BEGIN VIDEO CLIP)
NEWTON: This is kimchi, it's a staple side dish here. So what is the kimchi premium?
Paula Newton, CNN, kapiche (ph).
Do you know what it's like?
Anything, any roof could blow off, any tree could come down and we're just standing here.
Paula Newton, CNN, Moscow.
You know, I hate the cold so much.
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NEWTON: What I was telling you was a rock and roll day on the markets, I mean, really, it's because it's the first time I've been here on the floor
so they put on a good show for me today. Who cannot like this, it is 12 o'clock, people, and we have now broken through 21,000 again today.
I'm Paula Newton at the IMF in Washington. The spring meetings. Beware, the ides of protectionism. I'm going back to Shakespeare.
Look out for bear markets, bear markets, market bears. Whole Foods has just dropped into Amazon stock, it was shareholders signing off on the $13
billion takeover.
(INAUDIBLE) from around the world and across the United States traveled long and far for this, the great American eclipse.
It's an understatement to say that Washington might feel a little stressful these days. We're not too far from it here and I'm stressed.
It's an unspoken rule for Thanksgiving dinner in the U.S. Eat, drink and be thankful. And avoid all talk of politics. Look, my own mother has warned
me of this 1 million times. Don't get your aunt going.
Yes, you saw right. It is stabbing a tomato with a screwdriver. You don't need special glasses to see the problem there.
UNIDENTIFIED MALE: I think I'm going try and just take a picture of you, if I can, in live focus mode.
You are so spectacular.
(END VIDEO CLIP)
(LAUGHTER)
NEWTON: I'm supposed to be Canadian. I'm supposed to be able to handle that a little bit longer.
Chloe, really, I had no idea.
MELAS: It's incredible. You're absolutely hilarious --
(CROSSTALK)
MELAS: -- incredible reporter and so intrepid and so busy. You must be ready for a rest for 2018.
NEWTON: After all of that, I'm wondering, what did my kids get away with when I was at all of those places? Apparently (INAUDIBLE) Chloe, thank you
so much. Happy holidays. Thank you.
For everyone here at QUEST MEANS BUSINESS, that's it for us in 2017. Have a great 2018.
[16:30:00]
NEWTON: I'm Paula Newton. And these are the top news headlines this hour.
(HEADLINES)
NEWTON: Those are the news headlines this hour. "QUEST EXPRESS: STORIES FROM THE STREET" is next.
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RICHARD QUEST, CNNMONEY EDITOR AT LARGE: Hello and welcome to this special edition of the QUEST EXPRESS. I'm Richard Quest at the New York Stock
Exchange. Indeed, it is the season to be jolly on Wall Street, especially, of course, for investors, as the Dow savored its eye-popping run.
In Silicon Valley, tech companies were under fire after Russia used its platforms to meddle in the U.S. election.
And 2017 the year of the Fearless Girl, the statue foreshadowed a year of gains for women in the workplace.
Now from the corner of Wall and Broad, this is the QUEST EXPRESS: STORIES FROM THE STREET. Let's get the job done
(MUSIC PLAYING)
QUEST (voice-over): From the opening to the closing bell, week after week, we saw record after record fall in the New York market. It seemed there
was no end to how high this market would go. And, of course, with those gains came extreme volatility. Let's take a walk down Memory Lane.
(BEGIN VIDEO CLIP)
(MUSIC PLAYING)
UNIDENTIFIED MALE: Certainly a historic achievement. Reasons for a lot of optimism with regards to potential regulation being reduced in the months
ahead, hopefully. So certainly something to celebrate, no doubt.
UNIDENTIFIED MALE: It took everyone's breath away.
UNIDENTIFIED MALE: It's the train that's been traveling really fast. Anybody would want to hop on board this thing and participate.
MAGGIE LAKE, CNN BUSINESS CORRESPONDENT: I think it really shows how far we have come. In fact, a testament to that is that there was barely a
ripple down here when we went over 23,000, because we have been here so many times now.
UNIDENTIFIED MALE: It's a good thing for the mark, especially the corporate tax rate, still holds at 20 percent. It's great. But also great
for small caps. They benefit more than large caps. So it could be a big boom next year going into this market.
(END VIDEO CLIP)
QUEST: The big issue, of course, throughout the year remained Donald Trump, his election, his presidency and his economic policies. And related
to that were the undercurrents in the market, how they responded, for instance, to trade issues, the prospect of a massive tax cut.
It all had to be understood, interpreted and then analyzed. Here at the stock exchange, we're regularly joined by two of our favorites, Peter
Tuchman and Alan Valdes. They put it all into context.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Legends of the stock exchange.
QUEST: You have helped us understand. You have clarified when the misses have shrouded around us.
UNIDENTIFIED MALE: And the fog is laying low.
UNIDENTIFIED MALE: We get the answers. We get all the answers for CNN.
(CROSSTALK)
UNIDENTIFIED MALE: And we do have the answers to every question if you interview us individually.
QUEST: What do you make of the year that we've seen?
UNIDENTIFIED MALE: Great year. I mean, we've had over 80 new highs --
[16:35:00]
UNIDENTIFIED MALE: -- in the Dow this year, which is incredible, an all- time record. We have over 5 trillion savings accounts, an all-time record.
QUEST: Is this justified?
It may have happened and you don't argue with the fact that it's happened.
But is it justified, do you think?
UNIDENTIFIED MALE: You know what, I don't think that's the question we have to look at.
Is there real numbers, real valuations?
The market tends to tell us what it thinks is going on. The economy seems better. Unemployment is at a low. Corporate earnings have been better
than expected. Money is virtually free at 1 percent, the Fed rate.
OK? And the market has not engaged anything negative. Markets don't tend to engage with what goes on in Washington. There is nowhere else to invest
but here.
QUEST: So was it a case of you would have to work really hard not to make money in 2017?
UNIDENTIFIED MALE: Well, you know, you had to be in certain stocks, because, I'll tell you, if you look at 401(k)s, not all of them are making
money this year.
QUEST: How can that be?
UNIDENTIFIED MALE: There are different people in the market. There are investors and there are traders. If you're a day trader, OK, or if you're
in a hedge fund, it actually wasn't an easy year to make money because those funds are long short.
If you were a investor and you laid your money in on January 1 and you're sitting here and you've got a nice group of blue chips, you've made a lot
of money.
UNIDENTIFIED MALE: And if you weren't into techs at one point, if you were in energy at one point, you weren't making money. So it all depends on
where you were at that time.
QUEST: Viewers to QUEST EXPRESS, of which there are many, millions --
UNIDENTIFIED MALE: Millions around the world.
QUEST: -- thank you -- they will have hopefully enjoyed the benefit of your advice and made some money during the course of the year.
And now they'll be saying, ah, wise gurus, what do we do next year?
UNIDENTIFIED MALE: But look, a lot of this market's rally has laid it on the head of this tax reform thing. So interest rates, corporate interest
rates going for corporate tax rates from 32 percent to 20 percent, obviously is a much bigger thing than I think we are willing to
acknowledge.
It seems to me there is a business model locked in where people are going to be making a lot more money in the market. The investments are going to
be good and solvent due to that. And I don't -- I think it's beyond a lot of things that we even know.
UNIDENTIFIED MALE: And does the rally continue?
I think it does continue for exactly what Peter said. I think because the taxes coming down like they are, you're going to see the rally continue.
QUEST: Do you two ever disagree?
UNIDENTIFIED MALE: Very often. We have a completely different view on the market. I think we're going to see robust investment; we're going to see
wage growth; we're going to see just infrastructure building. You're going to see the market continue to go up, in my opinion. That's what it feels
like.
UNIDENTIFIED MALE: I agree. I think --
QUEST: Oh, you're agreeing?
UNIDENTIFIED MALE: We are agreeing. We're doing that just for you benefit.
UNIDENTIFIED MALE: 2018 is going to be a great year.
(CROSSTALK)
QUEST: All right, a prediction. A prediction.
How many thousands do you think we will go through on the Dow?
And what hat will I be wearing?
UNIDENTIFIED MALE: I'm the hat guy.
QUEST: You're the hat guy.
UNIDENTIFIED MALE: So we've seen this year markets going up 5,000 points. The investment in hats has really cost me a lot of money this year.
(INAUDIBLE) all my profits elsewhere. So anyway, we have seen actually a 1,000-point rally that took eight weeks. The last 1,000-point rally took
six weeks. I'm betting on a 1,000-point rally happening before the end of the year, closing out at 25,000. I would think we're going to see multiple
thousands, 30,000 --
QUEST: 30,000 next year?
(CROSSTALK)
UNIDENTIFIED MALE: -- by the end of '18.
(CROSSTALK)
QUEST: 30,000?
UNIDENTIFIED MALE: No question about it.
UNIDENTIFIED MALE: You're going to be wearing so many hats, Richard, you're going to be spinning around.
(CROSSTALK)
UNIDENTIFIED MALE: QUEST EXPRESS will have its best year ever.
QUEST: Thank you, gentlemen. We've loved having you on the EXPRESS.
UNIDENTIFIED MALE: Have a happy new year.
(END VIDEOTAPE)
QUEST: You get an idea of sort of the atmosphere that there is at the stock exchange.
Paul La Monica is with me to explain the year that we saw so far.
What we were -- what was up, what was down and the sectors that didn't quite make it.
PAUL LA MONICA, CNNMONEY DIGITAL CORRESPONDENT: There was a lot that was up this year, Richard. You would be very hard-pressed to find things that
were losers. And, of course, tech led the way.
Apple, Facebook, Amazon, Microsoft, Google owner Alphabet, the five largest companies in America. And all of them had a banner 2017.
Will that continue in 2018?
Or do investors start looking at some of the value sectors, like banks and energy?
That's the big question, I think.
QUEST: But, look, this is -- might I venture to suggest, it's somewhat of a false argument in the wider sense of when one looks at these issues?
Because as technology encroaches ever deeper into our business life or personal lives, every part of our lives, surely the technology leaders must
benefit, too.
LA MONICA: Oh, without question. And I think the good news for any investors that are looking at the large tech companies, they all are
obviously benefitting from real sales. This is not 1999 and 2000, where we're talking about monetizing eyeballs and all of these fake metrics that
--
[16:40:00]
LA MONICA: -- people came up with to justify sky-high valuations. Apple and all of those other companies have tons of cash. The revenue they are
generating is significant. And they're all very profitable. You can question valuations with Amazon, of course, but the others are all
reasonably valued.
QUEST: Paul La Monica, thank you.
LA MONICA: Thank you.
QUEST: Paul, good to see you. Have a hopefully a peaceful, happy New Year for you and --
(CROSSTALK)
LA MONICA: Thank you.
QUEST: Thank you.
Wherever you go here on the floor of the stock exchange, you can always see the scrolling ticker, telling you how the Dow 30 stocks are doing. The
ticker has been an essential part of the New York Stock Exchange and of Wall Street life, going right the way back to those heady days of the last
century.
(BEGIN VIDEOTAPE)
(MUSIC PLAYING)
UNIDENTIFIED MALE: This is one of the original Thomas Edison tickers.
QUEST (voice-over): This is the machine that changed Wall Street. Before radio and TV, the stock ticker was the way to get accurate financial
information, transmitted over telegraph lines.
UNIDENTIFIED MALE: And it revolutionized the stock exchange business because now you could effectively trade anywhere in the country and know
what the prices were that minute. So the ticker tape greatly enlarged the reach of Wall Street. And Thomas Edison was one of the inventors of it.
(VIDEO CLIP)
QUEST (voice-over): The movies portrayed Edison's breakthrough as a eureka moment. Soon after, a New York City tradition was born, a ticker tape
parade.
(MUSIC PLAYING)
UNIDENTIFIED MALE: Down go the common stocks, down, down, down they go.
QUEST (voice-over): The ticker tape also helped document one of the worst days in Wall Street history, the crash of 1929.
UNIDENTIFIED FEMALE: This is undoubtedly one of the most important pieces of historical ticker tape. It was recovered from a trading floor on the
morning of the 1929 crash. And this piece of framed ticker tape represents the first 45 minutes of trading on that tumultuous day.
QUEST (voice-over): Ticker machines are collectors' items. Some go for $15,000. Ticker tape was phased out in the 1960s. But we still call it
the ticker, as it crawls across the bottom of the screen.
And that's the ticker tape, another chapter in our stories from the street.
(END VIDEOTAPE)
QUEST: Throughout the year, there were so many IPOs, companies raising capital, launching themselves on the stock exchange. After the break, the
big board's John Tuttle on the year in IPOs.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST: Welcome back to this holiday edition of the QUEST EXPRESS on Wall Street.
Time and again throughout the year, we talked about Russia's involvement in the U.S. presidential election. The U.S. intelligence agencies certainly
believed the Russians interfered. But it was the way they did it that was revealed throughout the year.
The Russians use social media and various social media platforms to gauge the size of an audience that was never thought possible. Samuel Burke
explains.
(BEGIN VIDEOTAPE)
SAMUEL BURKE, CNN CORRESPONDENT: Richard, this was the year that we found out that --
[16:45:00]
BURKE: -- Russia may have a better understanding of social media than we do, than even Mark Zuckerberg does. You recall, around this time last
year, Zuckerberg said, "Personally I think the idea that fake news on Facebook influenced the election in any way is a pretty crazy idea."
But not too long after, we found out that 10 million Americans were exposed to ads from Russia. Then that number jumped to 126 million. Then it
jumped to 150 million, when you included Instagram. More than the American electorate, Richard.
Interestingly, Google and Twitter never told us how many people were exposed to Russian ads on their pages. And perhaps most telling, Snapchat
said they found no evidence, perhaps because the Russians thought not enough people were on Snapchat.
QUEST: Samuel, we also had the German elections, the French elections, a U.K. election. The Australians expressed some concern.
Overall, do we now pretty much assume that every election in a Western country may not have been influenced by but at least there might have been
interference from the Russians?
BURKE: Everybody knows that they have to cautious now, that they have to look for evidence of possible interference. But nowhere is it as clear as
the United States and the United Kingdom of this interference.
Those are the only places where we have seen tangible evidence, given to us both by Facebook and other sources. 2018 could be the year that we see
that many other places.
QUEST: Samuel Burke, thank you. Samuel, I'll give you a little Christmas present to enjoy. You'll be pleased to know my snap stock ends the year
roughly 42 lower than what I bought it at.
BURKE: Ooh, that's good for Hanukkah and for Christmas.
(LAUGHTER)
(END VIDEOTAPE)
QUEST: Like baubles on a Christmas tree, throughout the year, everywhere we looked, it seemed, there were IPOs. Some of them were not that
successful, which gave rise to the thought that no longer could you just put the money in the slot, pull the lever and make off with the winnings.
IPOs were more clearly scrutinized, as I heard from John Tuttle of the New York Stock Exchange.
(BEGIN VIDEO CLIP)
JOHN TUTTLE, NEW YORK STOCK EXCHANGE: It's been a strong year for U.S. capital markets. It's been a great year for the New York Stock Exchange.
Last year, worst year in over a decade for capital- raising, equity capital-raising. This year we had 88 new listings on the New York Stock
Exchange, raised more than double we did last year. And the pipeline for next year is strong, too.
QUEST: Why do you think that is?
What is it about -- I mean, or is it just one of the things that goes in cycles and favors?
TUTTLE: Well, the IPO window is open. What that means is that volatility is low and stable, interest rates are low but telegraphed to steadily rise.
The companies that have public this year have performed well, by and large, in the weeks, months and quarters following their listing. There is strong
investor confidence.
QUEST: And yet we've had some -- I'm going to -- don't look at me like that. Don't give me the eye.
We have had some IPOs, particularly in tech, which have not performed well in the weeks and months after. And some of them are heavily underwater.
TUTTLE: By and large, most of them have one well. But when you're referencing a couple of companies, you could argue it's idiosyncratic to
the market where maybe the competitive landscape changed in the period running up to the IPO or just after and you're seeing that reflected in
their share price now.
QUEST: In terms of capital raising through the market versus traditional debt raising or other ways of raising capital, what do you think remains
the advantage of the market?
TUTTLE: Everybody talks about why they don't want to be public. But there are a lot of advantages of being public. Number one is you have access to
a permanent capital base. Number two is you have some shares that you can use to go out and grow and expand your business, buying other companies.
But what you don't hear a lot and what matters now more than ever is that being a public company instills discipline from a financial and a
governance standpoint as well.
QUEST: Now we see you most days or on many days, up there, closing ceremony time.
TUTTLE: Absolutely.
QUEST: What advice do you give those involved in it?
Because some of them as you know, on QUEST MEANS BUSINESS in the evening we sort of have timid gavel. You can have a heavy gavel, a robust gavel.
TUTTLE: You've got one shot to get it right and you've got to let the world know the markets are closing for the day. It takes three solid hits
of that gavel and we close it out.
QUEST: Don't then we have any breaks this year?
TUTTLE: I don't think we did. I don't think --
(CROSSTALK)
TUTTLE: Not yet. The year is not over.
Richard, it was great.
QUEST: Great to see you. Happy holidays to you and your family.
TUTTLE: Likewise.
(END VIDEOTAPE)
QUEST: Now if you'll forgive and allow me an indigence, 2017 was also the year that we launched the QUEST EXPRESS.
[16:50:00]
QUEST: Every day, when it's noon in New York, Europe's trading day is over, the West Coast is under way, we are in the warmth on the floor of the
exchange with camera crews, producers and guests because we've got the EXPRESS.
I'm not alone here in the exchange, of course. Every day, Maggie Lake is here with CNNMoney. When we come back after the break, Maggie joins me to
talk about how 2017 was the year that many women found their voice in the workplace.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST: The bull and Wall Street, two concepts that go together. This bull has been here since 1989 and as you can see, is a popular tourist
attraction. This year, the bull was perhaps overtaken by the Fearless Girl.
MAGGIE LAKE, CNN BUSINESS CORRESPONDENT: You called?
QUEST: Maggie Lake is with me.
Maggie, what was the concept of the Fearless Girl?
And why was it so appropriate in 2017?
LAKE: Well, I think there was a feeling at the time that there needed to be a counter to the symbol of male-dominated money. So you had this statue
put there. But I don't think we knew all that it was going to foreshadow, what would come later in the year. Remember, this was back in March.
QUEST: So in March, the Fearless Girl arrives. Meant to be temporary.
LAKE: Right. So popular that there was outcry to make it more permanent.
QUEST: Right. And since then, of course, a complete revolution has taken place within the workplace, the whole issue of sexual harassment.
LAKE: That's right.
QUEST: The hashtag #MeToo even becoming "Time" Person of the Year.
LAKE: The silence breakers. And there is a feeling that this is a watershed moment, that this culture of harassment, of abuse of power, is
over and that people feel, women in particular, feel that they can speak up against it.
QUEST: Nowhere is that culture perhaps more prevalent than down here in the canyons of finance on Wall Street, where women have, for many years,
complained of sexism, of harassment. There were many cases. But there is one woman who has fought against all of that.
LAKE: And she was really at the forefront. We talk about these women paving the way. This was an early trailblazer, Muriel Siebert, who changed
how we thought about women on Wall Street. Have a look.
(BEGIN VIDEOTAPE)
(MUSIC PLAYING)
LAKE (voice-over): For much of its 225-year history, the New York Stock Exchange was a male-only bastion of influence and money. But that changed
in 1967, when a woman named Muriel Siebert smashed the status quo by becoming the first woman to own a seat at the exchange.
MURIEL SIEBERT, FIRST LADY OF WALL STREET: One of my clients gave me the idea to buy the seat. And I said, Jerry, what large firm can I go to where
I'll be paid equally?
"And he said, 'Don't be ridiculous. You won't. Buy a seat. Work for yourself.'"
LAKE (voice-over): Siebert, who never officially graduated from college, became known as an expert analyst, who dug deep into stock sectors that
others ignored.
SIEBERT: I was not loved down there. But when the men got to know me, I developed a -- I earned a respect.
LAKE (voice-over): Jim Maguire, whose father was a veteran broker on the floor, said Siebert had the raw talent to push past early bias.
JIM MAGUIRE, SON OF VETERAN BROKER: What I remember when Mickie Siebert came to the floor, my father ran to the other side of the trading post to
get me and said, I have someone I want you to meet. And he had that much respect for her that he wanted to make sure that I met her.
LAKE (voice-over): Rather than blend in, Mickie, as her friends called her, chose to stand out, wearing fur trading coats, one of which is now
enshrined in the boardroom the New York Stock Exchange named after her.
UNIDENTIFIED FEMALE: For Muriel Siebert to walk into an entirely male trading floor and say I have the right to be here and you're going to
welcome me with open arms and then have them turn around --
[16:55:00]
UNIDENTIFIED FEMALE: -- and do it, I think is such an accomplishment and not just for Muriel but for women throughout the world.
I started my career on the trading floor and I didn't give a single thought to whether or not I should be allowed to be there. And I didn't give that
thought, because Muriel already did it.
LAKE (voice-over): Siebert's vision extended beyond the exchange floor. In 1975, she started her own brokerage and was early to understand the
importance of Internet trading and discount brokerages. Those accomplishments over a 50-year career have prompted many to call her the
First Lady of Wall Street.
SIEBERT: I'm proud as to what I've done. I realize that life is not a -- it's not a dress rehearsal and that you make steps. And when you believe
in what you're doing, you do it and you do it with pride.
(END VIDEOTAPE)
QUEST: What does all of this tell us, Maggie, as we look to 2018?
LAKE: I think women are really beginning to sort of own the power that they have and understand that, united, they can make a difference.
Everyone talks about this being a watershed moment. I absolutely think it is.
But just as important is the question, what happens next?
You know, we're all outraged by this.
But are things really going to change?
Are policies going to change?
Are women going to get into the corner office?
QUEST: But every company has a raft of policies designed to prevent this. And it still happened. So we're talking about execution of policies.
LAKE: I don't think it's just policy. You don't see this as much in corporations that have an H.R. department. You see it happening in those
other areas, where there's not a clear line of who to go to.
I think it's not just about policies and implementing policies. I think it's about culture change, a way of thinking differently about this.
What's appropriate behavior?
What should you tolerate as a coworker?
And can you make a difference?
Does the power of the purse, you say, I'm not going to go to that movie. I'm not going to buy that product. I'm not going to go see that opera if a
person is doing it that I don't like. You're starting to see that and I think women are really beginning to wake up and understand that they wield
an awful lot of power when it comes to that, especially if they band together. So it's more than implementing policies. It's changing a
mindset.
QUEST: As that mindset changes, it becomes -- there becomes a sort of an environment in the workplace, which could become quite hostile.
LAKE: Or it could become a relief and an opportunity. See, old school, I think, is saying, how do we navigate this?
But there is another school of thought that says, now that it's all out in the open and you have more diversity and inclusion, it frees up
opportunity.
So many studies show that companies out of a diverse boardroom perform better. So maybe this is a moment not of uncomfortable change but of
opportunity for both employees and for companies.
(END VIDEOTAPE)
QUEST: All done here near Wall Street, Maggie Lake, a Fearless Girl and the bull. And that's the QUEST EXPRESS. It's been a tremendous year.
Made all the more worthwhile because, of course, you're there. I'm Richard Quest. Whatever you're up to in the year ahead, I hope it's profitable.
END
