Return to Transcripts main page
Quest Means Business
President Erdogan Says He Has Been Stabbed In The Back As The Turkish Lira Heads Ever Lower; Elon Musk Explains How A Meeting With The Saudis Led To That Infamous Market-Moving Tweet; Funding Is Secured; Concern Over A Weed Killer Causing Cancer Sent Bayer Stock Downhill On Monday; Virgin Atlantic Has Blasted U.K. Government Officials Running Heathrow Airports Passport Control; Leaders of North and South Korea to Meet Next Month; FBI Fires Peter Strzok After Trump Controversy; Turkish Currency Crisis Rattles Global Markets; Seattle Officials Say All Security Protocols were Handled Appropriately Before Plane was Stolen; Hundreds Injured in Spain After Platform Collapse; Erdogan: Economic Terrorists are Weakening Currency; Ride-Hailing Apps Seek Major Expansion; Tiger Woods Delights Crowds at PGA Championship; Turkish Ambassador Meets with John Bolton at White House Aired: 4-5p ET
Aired August 13, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: Closing bell ringing on Wall Street, Dow Jones Industrials down 126 points. The market down sharply,
the NASDAQ is also down and the S&P 500. As Charles River close things up. And I think we'll call it a firm gavel. Trading is over. It's the middle
of August, it's August 13th.
Tonight, President Erdogan says he has been stabbed in the back as the Turkish lira heads ever lower. Elon Musk explains how a meeting with the
Saudis led to that infamous market moving tweet; funding is secured. And he is the runner up they came all to see, absolutely. Tiger Woods is
electrifying the golf course all over again.
I'm Richard Quest, live in the world's financial capital, New York City where of course, I mean business.
Good evening. Tonight, Turkey's crisis reverberates through global markets. The Turkish lira is sliding sharply and continues to do so and
President Erdogan is defiant against possible emergency measures. Instead, choosing to blame a foreign conspiracy as he sees it against the Turkish
economy. So you need to look at the numbers and see exactly how things moved and this really does show it.
The Turkish lira versus the dollar over the past three months. Now, it's down some 26 percent over the last two days which is quite a dramatic fall
off even allowing for the relative stability, but this clearly shows the dispirit with the U.S., Erdogan's comments on his unorthodox economics and
of course, the lira falls out of bed.
The crisis in Turkey. We need to look at its origins. It's first of all the refusal to raise interest rates. When they refused to raise interest
rates, suddenly, the Central Bank lost its credibility since the market had been hoping and indeed expecting that something would be done.
So now, the contagion starts to move from Turkey to the other emerging markets. For instance, in South Africa, you've got the rand falling as
much as eight percent to a two-year low, and go across the Argentina and you have the peso hitting record lows. The hike rate is by five percent
and remember, the country is already an IMF program, and of course, straight up to Europe where it's the mature banks and the banking system
where stocks continue to fall and the ECB is watching closely. See just how deep the contagion is.
John Defterios is our emerging markets editor, joins me now. Are those three that I had sort of mentioned, John, the emerging markets --
Argentina, South Africa, all the banks in Europe -- which is the most pressing crisis?
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: I would think that banks in Europe, Richard because of the exposure of some $150 billion. I am
watching the commodity markets very carefully and you flagged it on Friday when we had our discussion. We've seen a drop in the commodity basket so
far by about 5 percent. This is nowhere near where we saw the Asian crisis in 1998 and 1999 where it had correction of 30 percent or during the global
financial crisis when commodities dumped out by some 37 percent, but I have to be candid here.
If I am an average Turk or an investor in Turkish assets, I'm a bit baffled tonight because as you know, Monday, President Erdogan said, "Look, don't
panic. The currency is going to recover. We have this emergency plan." On Friday and Saturday, he's saying, "Sell your gold. Sell your dollars.
We need support for the lira." Now, he's thrown assets at it. His Finance Minister and the Central Bank Governor, the Capital Markets Authority, they
have a hundred-day plan, but that's part of the criticism.
Criticism number two, you've covered in your lead in there, he doesn't want to raise interest rates. He's dead set against it. He's against the
International Monetary Fund and in fact, that's how he created the party coming back in 2000 against the global institutions. So he points
outwards, not inwards.
Let's take a closer look.
(BEGIN VIDEO TAPE)
DEFTERIOS: It's an economic disaster analysts say caused mainly by the man in charge. Turkish leader, Recep Tayyip Erdogan once again defiant on
Monday, quick to blame everyone else but himself for an economy in the firing line and a currency on the brink.
(BEGIN VIDEO CLIP)
RECEP TAYYIP ERDOGAN, PRESIDENT OF TURKEY (Through a translator): Do not worry about it. Be relaxed about it. We do not make concessions from the
rules of premarket economy. Nobody should listen to speculation that say otherwise.
(END VIDEO CLIP)
[16:04:57]
DEFTERIOS: The Turkish lira continues to crumble, dropping nearly 20 percent in the past week of trading. It's the result of years of
mismanagement at the top, critics say; lavish spending on mega-projects like airports and bridges, symbols meant to burnish Erdogan's image and win
in reelection. Now, he is faced with a soaring current account deficit, inflation of nearly16 percent and corporate debt, which is priced in lira
and rising.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The fall of the Turkish lira is only the beginning of a real economic crisis, of a possible recession in Turkey. We would need to
see a complete change in economic policies.
(END VIDEO CLIP)
DEFTERIOS: That change is unlikely as Erdogan now tightens his grip of the country's Central Bank after reelection in June and he installed his son-
in-law as both Finance and Treasury Minister.
(BEGIN VIDEO CLIP)
ERDOGAN (Through a translator): Don't panic about the dollar. This has nothing to do with the dollar. If they have their dollars, we have our
God. Stay calm.
(END VIDEO CLIP)
ERDOGAN: The lira's tailspin is starting to rattle global markets with European banks hit particularly hard. And there's a political plot twist
as well. Last week, President Trump said, he would slap new tariffs on Turkey -- a punishment for Erdogan continuing to jail an American pastor
named Andrew Brunson.
Over the weekend, Erdogan showed no signs of backing down.
(BEGIN VIDEO CLIP)
ERDOGAN (Through a translator): You can never bring this nation in line with the language of threats. We understand the language of law and
rights, but not threats.
(END VIDEO CLIP)
DEFTERIOS: He singled out the U.S. and currency speculators for waging quote, "economic war against Turkey" casting no blame on his own economic
policy.
(BEGIN VIDEO TAPE)
DEFTERIOS: So he was critical of President Trump, but he took a page out of his playbook today, Richard. They're going to go after 350 or nearly
that many Facebook uses and social media outlets trying to crack down on what they call fake news. It looks like emergency measures are starting to
crop up in Turkey as a result of this correction.
QUEST: John Defterios in London. Thank you, John. As President Erdogan resists typical monetary policy, orthodox policies, it is unclear where
this crisis goes next. Recession and a debt crisis absolutely on the horizon and worse, may be yet to come. It could require an IMF bailout
with the last one in 2000, but could they go to the IMF, would they be willing to withstand and take the austerity measures necessary?
Politically difficult, a bad history and the austerity would be paying for -- and go against everything that Erdogan said. Then they could go for
capital controls. Well, they've worked in the past and like Greece, it would help the lira, but it could hurt Turkish businesses and capital
controls only work in the short term to give confidence. And then Turkey could go it alone. The debt is manageable for now and hope for the best,
and maybe get money from Qatar or Russia or China.
Ken Rogoff is a former chief economist of the IMF and now at Harvard. This is -- whenever a leader starts to say that the interest rate laws are going
to apply to them, the market economic laws are going to apply to them. This usually ends badly.
KENNETH ROGOFF, FORMER CHIEF ECONOMIST, INTERNATIONAL MONETARY FUND: This has certainly had been done badly. I think the only way it can end okay
for Turkey, at least in the short run is to go to the IMF because he has to do those austerity measures you mentioned anyway.
People are not going to keep pouring money into Turkey. They are borrowing money heavily. That money is drying up and the IMF can give them a bit of
money, maybe more to help question that, but of course, he doesn't want to go to the IMF. He has campaigned against them and President Trump has veto
power at the IMF and he certainly doesn't want to accommodate him. He is in a very tough corner.
QUEST: How bad is the economic situation though? Can they brazen it out?
ROGOFF: I don't think so. Not without something that is tantamount to a default. You mentioned capital controls, but the trouble is, the way
Turkey has been buoyed over the years, what's really helped it is their Turks all over the world making money, putting their money back into
Turkey, and if they think there are going to be capital controls that are going to lock it in, they're going to depreciate their money, they're not
going to do that. So, I think it's very, very hard if you scare away your base, the expat Turks that are pouring in money.
QUEST: The former employee of the IMF have been warning about emerging markets and emerging market risk. Now, we know Argentina is already in a
program and you think Argentina may eventually default, but nobody seems to -- what has been the problem that the IMF is warning about? What is the
issue that the chickens have now come home to roost?
ROGOFF: I mean, very simply, we live in a dollar world. These countries borrow in dollars and they borrow a lot compared to the rest that they
take, and their income, their currencies, when they depreciate, it raises the burden of the dollar dead when the lira shrinks by 40 percent, it
expands the burden of a debt they have to pay in dollars that much.
[16:05:16]
ROGOFF: The markets look at that and they say, "Well, show us that you're prepared to do something," and if you're not, the currency goes more and
eventually it comes to an end. That's the crux of it and that's what has everyone nervous and I would amplify that by saying, they are worried that
maybe the IMF won't be there at every case when Brazil has to go to the IMF, you mentioned South Africa earlier, because President Trump can have
some condition that is politically unpalatable and they'd rather default. It's getting people scared.
QUEST: Are we talking about defaults here? I mean, it doesn't happen very often. Sovereign defaults happen few and far between and when it does, the
ripple effects are kilometers.
ROGOFF: In the case of Turkey, if they can't go to the IMF, maybe they'll get a bridge loan for a little while, from Cutter, from China, from
somebody, but it's not going to last and those places do not have the expertise to fix things. They really -- to buy time, there's one game in
town, they need to go to the IMF. I am not saying the IMF is perfect, but they're going to have austerity and at least, they can blame it on the IMF.
Argentina has done that, but the trouble is, if they don't undertake reforms, if they don't get their house in order after a few years, they are
still going to default. I think that may well happen, it happened last time.
QUEST: Ken, that's the depressing part. That is the depressing part about this. It's happened before, it's happened again and it begs the question,
did they learn nothing?
ROGOFF: Well, it's something that is not going to happen everywhere and people make a lot of money in the meantime, particularly in Argentina, it's
very sad because I think the government was doing a lot of right things. In Turkey, I mean, he is going off the rails -- the President -- in may
dimensions and needs to find a way to rein itself it. He has a son-in-law for the Finance Minister. He won't let the Central Bank raise interest
rates, an autocrat, all the recipe for having a big default.
QUEST: Ken Rogoff, we appreciate your time, sir, tonight. Thank you very much indeed.
Later, on QUEST MEANS BUSINESS," I'll be joined by Britain's former ambassador to Turkey, Sir Peter Westmacott and Peter will be with us to put
all of this into perspective.
U.S. stocks avoided the kind of heavy selling that we saw, at least during the course of the session, but very heavily down around 1:00 in the
afternoon. The morning session was bouyant, but it sort of recovered. I mean, it's off just -- well, as I said just under 125, a half a percentage
point. The S&P 500 fell for the fourth straight day. Now, this is the longest losing streak for the S&P since March.
And as for Tesla, well, Tesla shares, they were down some -- they were down again today just a fractional, so -- but they are up 20 percent overall in
August, so we're waiting to see of course how that was on and we now know why Elon Musk shocked the market by saying he was ready to take Tesla
private.
A new blog post from Musk later with a timeline of exactly what he's been doing. On July 31st, he met with the Saudi Sovereign Wealth Fund,
following in his words, multiple approaches from them. On August 2nd, Musk told his board that he wants to take Tesla private and that he'll reach out
to the largest shareholders because obviously, they have to tell them. However, telling the largest or discussing with the largest shareholders,
this would only be fair, he says that on August 7th, he made the infamous funding security announcement on Twitter.
Paul La Monica is with me to talk about this. So he makes all of these statements --
PAUL LA MONICA, CNN CORRESPONDENT: Yes.
QUEST: And he says what he's got to say, and it's the Saudis who's behind him.
LA MONICA: It is now clear that the Saudis are interested in potentially helping Elon Musk take Tesla private, but there's still are a lot of things
that I think need to be done, Richard, before that can actually be accomplished and clearly the market doesn't believe it's going to get done
because Tesla shares are now trading just under $360.00. That's a far cry from the $420.00 that he said he wants to take Tesla private.
QUEST: Does his explanation hold water? I mean, is it satisfactory? I read it in detail. It seems to be an entirely justifiable statement to say
funding secured. The Saudis are clearly wanting to do it.
LA MONICA: Yes, I think that he probably has enough wiggle room that he would not get into any trouble with the SEC because he is being as up front
as he possibly can be about the negotiations and what he sees at this time. It is the likelihood of a deal getting done, but again, there's a
difference between funding secured and actual --
[16:15:16]
LA MONICA: -- announcement saying, "We're talking Tesla private at this --"
QUEST: But his point is valid that he couldn't talk to the largest shareholders, and not tell everybody else. It would be inequitable.
LA MONICA: Yes, I think that is --
QUEST: Just to do one without the other. So, he had to and I am just wondering where -- I guess what I am really wondering is whether our angst,
gnashing and wailing of teeth is just the way he did it rather than what he did.
LA MONICA: I think that could be a part of it because yes, let's be honest here. This was a very untraditional Elon Musk-esque sort of way of making
the announcement to the world. Most people would have said, "You know, okay, we met with the board. Now, we're going to have the lawyers go over
this carefully crafted press release and we're going to have an SEC filing." Musk doesn't go for any of that. It's just boom-boom, a couple
of characters and tweets it out to the world $420.00 funding secured, which again is not the way most corporate executives would do things.
QUEST: No, but --
LA MONICA: This is 2018, a lot of --
QUEST: It's the way the President of the United States would do it.
LA MONICA: That is true. Not the way previous Presidents would have done it, even in the age of Twitter, I would argue.
QUEST: Good point. All right, as we continue, it's QUEST MEANS BUSINESS. Heathrow Airport is a disgrace when it comes to immigration. That's not
just me thinking or saying that. Virgin Atlantic has the numbers that prove Britain's home office fails 95 percent of the time in getting people
through on their target --
Concern over a weed killer causing cancer sent Bayer stock downhill on Monday. The shares were off 10 percent in the market. A judge awarded a
groundskeeper with terminal cancer $300 million in damages. Clare is with me.
CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, Richard. This is one case in California, but it's having ripple effects not only throughout the U.S.,
but around the world and that is because of the precedent it sets here in the U.S.. There are thousands of other cases against Monsanto which
produces this weed killer called Roundup alleging that it causes cancer and this is going to galvanize those cases. It could even cause those to
multiply.
The other reason that we care about this is because the active ingredient in Roundup is called glyphosate and that is a weed killer that is the most
widespread in terms of usage around the world. It's been approved by dozens of governments.
[16:20:16]
SEBASTIAN: And this could really send ripple effects so that we already see reactions over in Europe where its specifically controversial. One
member of the European Parliament saying that they should exercise precautionary principle here, Richard.
QUEST: But this is only one case.
SEBASTIAN: This is only one case, but there are many more coming. Many more coming. I spoke to the lawyer for the plaintiff today. He represents
another 2,000 plaintiffs. He says he now has a trial package -- a successful trial package set. All he has to do is travel around the
country with it and he's got another one in Saint Louis in January. And this could be a real headache for Monsanto, which obviously had been bought
by Bayer now.
QUEST: Right, I am not suggesting that they wouldn't win, but (inaudible) the company would settle rather than anything else, but he's going to have
to -- all of these other plaintiffs. Just because one won one place, a jury in a different place may come to a different decision and that's to
settle.
SEBASTIAN: Right, and I think one of the reasons why you see the stocks fell off a cliff today, down 10 percent is because of the surprise about
this frankly, because the science is inconclusive. The EPA has approved the product, so this plays in the face of existing regulation and many
people felt that it wasn't going to go through because of that.
QUEST: To get to $300 million, there has to be some element of punitive damages.
SEBASTIAN: It's a combination of punitive and compensatory.
QUEST: Right, compensation isn't --
SEBASTIAN: It's mostly punitive.
QUEST: Right, which suggests that they also felt that Monsanto and Bayer had avoided liability, had lied about it, had misdirected, had misled about
this potential risk or that they knew about it and didn't do anything about it.
SEBASTIAN: That's -- so there's two parts to this case. One is that the allegation that the product causes cancer or at least it was a significant
contributor to this man's cancer. The second part is that Monsanto didn't warn about it in advance. But the company is vigorously going to appeal
this. There's going to be pretrial motions and then they're going to appeal.
We have seen with past similar cases like Johnson & Johnson with their talcum powder, like with McDonald's and the hot coffee, the verdict can be
reduced or even overturned, so that's the way it's going now.
QUEST: Clare, thank you. Markets in Europe -- they were lower. It's even -- actually, they've seen New York was up, but it was obviously Turkey that
moved the markets down. They were rattled. Frankfurt was down some half a percent and not only Bayer dragged it down, but German banks and the
possibility of exposure to Turkey all pushed that market lower.
Virgin Atlantic has blasted U.K. government officials running Heathrow airports passport control. The waiting time for incoming international
passengers was up to 2.5 hours in July. Border Force missed the 45-minute target for 95 percent of visitors. Now, you don't have to be a
particularly frequent traveler through Heathrow whether its Terminals 2, 3 or 5. The reality is, it's a miserable experience if you arrive in the
morning and the U.S. and Asia flights are just landing.
Heathrow's Director of Airport Operations agrees with Virgin that something needs to be done.
(BEGIN VIDEO TAPE)
KATHRYN LEAHY, HEATHROW'S DIRECTOR OF AIRPORT OPERATIONS: We're really clear that the border at Heathrow is owned by the home office and they are
the only people that can resolve this problem. So, we are in absolute agreement with our airline partners who have come out and called for
changes and over border and as an airport authority, we will do the same and we continue to ask our home office to undertake improvements.
QUEST: I guess the home office will only undertake improvements when there is a concerted effort by all the airlines and people like yourselves to
force them to put more resources in?
LEAHY: We don't believe it's just down to resource. Over the last five years at the airport, we've invested in 60 electronic e-gates, and we
believe the solution to ease the pressure on the border that we are seeing today and that we've been experiencing over the summer is simple. The low
risk countries -- Australia, Canada, and America -- we believe could be turned on with all of the advanced passenger information that the home
office have on these traveling passengers, could be turned on tomorrow. And we could ease the pressure on the border.
We do not believe that it's just a question of the number of individuals manning desks to be the solution.
QUEST: Do you -- I saw border -- I saw the home office's statement, which is the usual canard that we won't take any risks with the nation's security
at the border, but I think you'd agree with me that efficient border security and respectable waiting times or decent waiting times shouldn't be
mutually exclusive.
[16:25:16]
LEAHY: We believe that the home office can provide a service and the service that we want the international arriving passengers to have at
Heathrow that they can provide a safe and a good service and that's why we would implore on Sajid Javid to invest in turning on the technology to
allow the low risk nations to use the e-gates that we have installed.
QUEST: Finally, I come through Heathrow more than most and indeed, we'll be there tomorrow morning coming from the United States and it is a
disgrace, if something does need to be done, do you think the home office understands the urgency of this?
LEAHY: We've been working with the home office over the summer. We have put in over 200 additional resources to man the border. We believe that we
understand the urgency, but we will call upon them to do more and use the technology that's available to them.
(END VIDEO TAPE)
QUEST: The Heathrow debacle. As we continue on QUEST MEANS BUSINESS tonight, we will return to Turkey where we will try to understand what
options they might think for a situation that is getting increasingly desperate.
Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. The Chief Executive of the ride-sharing app Via tells us why his
drivers make more money than working for Uber and Lyft.
As the golfing legend Walter Hagen once said, "No one remembers who came second," die-hard fans of Tiger Woods may care to disagree. This is CNN as
we continue and on this network, the facts always come first.
[16:30:16] South Korea's President will travel to the North Korean capital to meet face-to-face with Kim Jong-un in September.
The plans come as relations between North Korea and the U.S. deteriorate. Pyongyang has rejected Washington's proposal on denuclearization, calling
them gangster-like. The FBI has fired an agent who Donald Trump had accused of being corrupt.
Peter Strzok was removed from Russia investigation last year for sending text messages, though criticized the president. Mr. Trump celebrated the
move on Twitter, Strzok attorney said the decision is a departure from typical bureau practice.
Turkey's currency fell again sharply on Monday as the country continues to wrestle with the crisis, has markets rattled around the world. The lira
was down 11 percent against the dollar who recovered slightly as the day went on. Trading remains volatile and the Turkish government is so far
refusing emergency measures.
An official from the port of Seattle says all security protocols were handled appropriately. The plane was stolen from the city's airport on
Friday. The FBI has now recovered the data recorder and components of the voice recorder as well as human remains.
Police say the airport employee who stole the plane was suicidal. And more than 300 people were hurt at a music festival in Spain after a wooden
platform collapsed over the sea. It happened around midnight during an outdoor concert in the coastal city of Vigo.
Authorities tell CNN only one person suffered serious injury. President Erdogan of Turkey is accusing economic terrorists of targeting his country,
and pointing to both the U.S. sanctions and the network of social media accounts, all of which he accuses of spreading lies.
President Erdogan says he expects these attacks will continue.
(BEGIN VIDEO CLIP)
RECEP TAYYIP ERDOGAN, PRESIDENT, TURKEY (through translator): Just as it is in other areas, Turkey is also being encircled economically. It is
clear that the attacks which started with easy and continued and reached a peak with the coup attempt will continue for some time.
(END VIDEO CLIP)
QUEST: Now, when president intervenes in so dramatically in their economy, and doing so, shun, ignore or abandon proper economic traditional, orthodox
policies, the results are usually spectacular. Take Nicolas Maduro in Venezuela.
Now, despite what everybody says about economic laws, sweeping subsidies and price controls, it replaced the central bank governor with a political
ally that's losing the independence of the central bank. And then you go to Argentina where you have Cristina Fernandez de Kirchner, now she wanted
to stop capital flight, she nationalized the oil company, she imposed currency controls and she introduced import restrictions.
All the time when other economists were saying, no, don't do that, they aren't the right policies, they'll make the situation worse. Well, now, of
course, we know the situation in Argentina is as it's back in the capping hand with the IMF.
And as you heard on this program from Ken Rogoff suggesting that the country will default. Let's go back to 1997, and Mahathir Mohamad of
Malaysia; the current Prime Minister again at the age of '93 were back then during the economic crisis, the great financial crisis.
He railed against the IMF, he imposed capital controls, he pegged the ringgit to the dollar when everybody else said he should be devaluing that,
rather than trying to maintain its value. He got away with it, arguably because everybody else was taking the nasty medicine and he enjoyed the
recovery.
Peter Westmacott; British ambassador to both Turkey and the United States, he is in Southwest Turkey at the moment. Well, before you give us your
analysis, let's have some reporting from Westmacott in terms of what the situation is like.
What are people telling you about -- do they have confidence in Erdogan to get them out of this economic mess of his own making?
PETER WESTMACOTT, FORMER BRITISH AMBASSADOR TO TURKEY: Well, Richard, as you could imagine, it depends very much who you're talking to. This is a
country where just recently in the general election, more than 50, those who voted expressed their confidence in President Erdogan and his ruling
party, the HAP.
[16:35:00] And you still got an awful lot of people who voted for him who thinks that he is the answer or that if things are going wrong, it's not
his fault. At the same time, he's got an awful lot of people, particularly a more educated business leadership community.
Many of whom by the way have done very well at the 15 years of President Erdogan being in charge, who are now beginning to think that this is all
going perfect and they are bothered about what's going on. There are a lot of business leaders who are here, some of whom I have carried to, as you
could imagine, academics, journalists and so on.
Who are concerned about the direction of travel, are bothered by the bus stop and the fickle relationship with the United States. But probably more
forward that is coinciding with a significant run on the lira against the background of a series of structural problems that are going wrong with the
Turkish economy.
And which to be honest, they don't at the moment see the president as addressing in the kind of way that they think they should be addressing.
QUEST: Well, from a pity, he's actually going the other way. All the -- all of the docs, economic policies that one would -- that one would use at
this moment, he is saying no, no to raising interest rates, no to introducing some measures of austerity and no particularly instead,
choosing to attack foreign currency speculation which of course he says is a conspiracy.
WESTMACOTT: Well, that is right, and there was a lot of mess even here, not only abroad, when the president said they may have their dollars, but
we've got our Allah. That didn't appear in many people to be a kind of credible economic policy when the lira was in free-fall.
But bear in mind the background to this, which is that for some time now, President Erdogan and a lot of people around him and even those people that
are not his supporters have had this view that the United States is somehow operating against him and his --
QUEST: Right --
WESTMACOTT: Interest, that they are behind failed coup of July 2016. Personally, I don't believe that one minute, but there are a lot of people
here in Turkey who do. And so it's quite easy to work out a suggestion that somehow, just as sanctions against Iran are designed to deliver a
regime change there, that so here in Turkey, it's additional sanctions that America's applied --
QUEST: Right --
WESTMACOTT: Are designed to use regime change in Turkey. I don't think that's a tool, what's going on, but that's the background against which
people can quite easily be persuaded. But this is about some sort of soaring conspiracy rather than --
QUEST: Right --
WESTMACOTT: About who exactly as you've just described the wrong thing to address the economic problems of the country.
QUEST: Right, Ken Rogoff who you'll be familiar with and who was on our program earlier, former chief economist of the IMF. Ken Rogoff's view is
if this is going to get much worse and could lead, eventually lead to a default by Turkey, simply because you cannot back the laws of economics
forever.
If that does happen and the situation gets worse, how unstable does Turkey become?
WESTMACOTT: Right, Ken is making a good point. We were told that earlier today, the economic supremo, the signboard of the president was going to
announce a number of measures to reassure the markets, they didn't.
They didn't go nearly far enough and they didn't address the requirement to raise interest rates to stabilize the economy or to stabilize the currency.
So if things do start going wrong, then we've got a real problem. The difficulty is that the president has ruled out all sorts of economic
measures that most orthodox economists would think were unnecessary.
And if you're not prepared to address some of that, that you can't really go to the IMF and say help rescue program --
QUEST: Right --
WESTMACOTT: Because in this world, there are conditions, as you know, and if he's not prepared to apply those conditions, then there's a problem.
Capital controls are being ruled out because Turkey really is dependent on lots of in-flow of foreign capital, foreign investment, foreign loans.
So it's hard to see at the moment --
QUEST: Right --
WESTMACOTT: If they carry on, stubbornly saying we're not going to do what the economy requires, what the alternative is. And that is one of the
reasons why people here are worried and that is one of the reasons why the currency is going down.
It is one of the reasons why Turks are not doing what the president asked them to do which is to reach under the mattress --
QUEST: All right --
WESTMACOTT: And set all for that golden, hard currency, they're not doing so.
QUEST: Peter, I hope you're having a good holiday there in Turkey despite all the economic problems, and good to see you sir, thank you --
WESTMACOTT: Well, it is a wonderful place.
QUEST: Yes -- no, I disallow -- don't doubt that for a moment, and have been there many times. Thank you, Peter, lovely to see you. When it's
venny (ph), VT, via (ph), vua (ph), there -- do you say via or do you say vaia(ph)?
I'm going vaia (ph), I'm going via, it's the ride-hailing app who wants to conquer Europe. The chief executive takes us for a ride literally after
the break.
[16:40:00] (COMMERCIAL BREAK)
QUEST: A step forward into the future, Lyft is the latest ride-hailing app to bulk up, having signed the deal for car dealerships to use their
technology. Meanwhile, one of their biggest rivals Via is planning expansion in Europe. Samuel Burke has been talking to the chief executive.
Is it Via or Vaia (ph)?
SAMUEL BURKE, CNN BUSINESS & TECHNOLOGY NEWS CORRESPONDENT: It depends if you're British or American. It's interesting, you're actually the one who
got the Quest team on to this because you and I both reported in Israel, we know the sherut also known as the collativo(ph) in Latin America.
These vans are buses, they go from one neighborhood to another, getting people from home to work, but digitized. They started out here in New York
and now they're spreading into Europe.
(BEGIN VIDEOTAPE)
BURKE: Hello, I'm in the Via car with the CEO of Via, great to see you.
DANIEL RAMOT, CHIEF EXECUTIVE OFFICER, VIA: If Uber was trying to make a better taxi in a sense by allowing it digitally hail it, we are digitizing
a bus.
So you can book a private ride with Via van here in London or in Amsterdam, that's not what we are trying to promote and certainly not with the
focuses. I can tell you in New York, 99 percent of our rides are shared.
BURKE: And in the U.K., how many people are sharing? It's not as much as the U.S.
RAMOT: It's not as much. You know, it's interesting when we launched in the U.S., we only had the shared trips. Here in the U.K. when we launched,
we had a private ride from the very beginning. But still 85 percent to 90 percent are choosing the shared ride.
BURKE: A lot of what the Via platform is focused on is the down time of drivers. That's still a very big problem. So how it is your platform as
opposed to your competitors platform try to bridge that gap?
RAMOT: The way the Via system is constructed, we essentially will only allow onto the platform at any one time a certain number of drivers who are
going to be perfectly matched to the number of rides that we have.
BURKE: So you're not trying to cast the net as wide as possible?
RAMOT: No --
BURKE: In fact, the opposite.
RAMOT: In fact, the opposite. So drivers working on the Via platform are always busy, and on average, when you look at how much they're earning per
hour, their earnings seem to be higher than on any other platform.
BURKE: What is the kind of thread that you're taking throughout the different countries and cities that you're going to here in Europe?
RAMOT: Well, we realized that our software can be very useful to others, and that we can license our technology to those folks in order to prove
their transportation system.
BURKE: So what type of groups are you licensing the Via technology to here in Europe?
[16:45:00] RAMOT: Probably transit operators like Arriva, Arriva has used our system for over a year now in a town in Kent called Sittingbourne, it
is now the primary way for people who don't have a car, don't only use their car to get around Sittingbourne, it's been incredibly successful
there.
It's not different from here in New York, except to sitting on top of our technology, what we call our operating systems.
BURKE: After Europe, where do you see your next set of growth coming from?
RAMOT: We are particularly strong in Australia and New Zealand at the moment, so we have several deployments in that region. We're seeing really
strong growth in Asia. We have a deal with the government of Singapore, the line transit authority in Singapore to initially study the deployment
of on-demand bus systems like Via and potentially moving forward, actually deploy them in Singapore a significant scale.
BURKE: What your goal for the company in the long term?
RAMOT: I think our hope is to build a self, a standalone company that we can take public. Nobody has got this mix of a consumer service that's
operating in scale while providing nearly 2 million rides a month on the one hand.
On the other hand, think of it as a B-to-B, a business to business type. So we want to see as a first step our operating system deployed in a
thousand cities all over the world. We're powering the public transportation system of those cities.
And beyond that, we would love to see Via system in every city in the world.
(END VIDEOTAPE)
QUEST: So the way it works, the algorithm is the crucial part of it because it has to be able to know that -- let's say I am -- let's say I am
the first person to make the booking for that car --
BURKE: Yes --
QUEST: To go from Time Warner center here --
BURKE: Yes --
QUEST: To the Stock Exchange. Well, the algorithm can only add on people that are going in the same direction and they're not going to take me too
far out of my way because I am the one who is going to end up at the Stock Exchange.
And the algorithm then has to work out what the car is going to do after the Stock Exchange.
BURKE: Exactly, if you're going down Ninth Avenue, it's going to look for all the people after you, both to figure out if it's better to send this
person on Ninth, is it better to send them down a different avenue and try and get everybody together in that one ride and get you as close, but not
to the door.
They'll get you to the corner of where you need to go, but they're not like Uber taking you exactly where you need to go.
QUEST: Yes, is it successful?
BURKE: It's successful, and I think more so in the sense that it's technology that's spreading. They're not trying to create a fleet of cars
in every city the way Uber has, they're looking for places where maybe the regulatory environment won't allow them to get their cars in, but maybe
they can work with the city and license their technology instead.
QUEST: There's no Lyft, there's obviously Uber, guess who's got with Juno, you've got Via, there's a view that there's too many of them. And there's
a -- if you look at New York, of course, with its recent decision on capping the number of those drivers.
BURKE: And Via said they were deeply disappointed by the decision in New York, and I think any critic of that decision by the mayor here in New York
could say Via as the gentleman just said, the CEO in the piece, 99 percent of their rides are shared.
So if New York is complaining that there are too many cars, then why are you capping someone like Via if most of their rides are shared.
QUEST: Simple question for simple answer. Would you take Via home after this?
BURKE: Absolutely.
QUEST: Yes --
BURKE: And I'll take the bell home with me as well --
QUEST: But you're nothing of the sort, you'll stay exactly where you are, yes, with a stopper. Right, if you want to keep on top of the day's
business headlines, then try our daily briefing podcast, it's updated twice a day before and after the bell rings on Wall Street or just Alexa or
Google, CNNMoney flash briefing every weekday.
The biggest name in sport, what he has to offer, and he hasn't won a major title in a decade, but Tiger Woods is back on track and golf executives are
loving it.
[16:50:00] (COMMERCIAL BREAK)
QUEST: Golf gets more viewers now than it has in years and if you want to know why? Well, obviously Tiger Woods. He was agonizing close to winning
his first major in a decade at Sunday's PGA Championship. Eventually he finished two shots behind Brooks Koepka.
"CBS" said ratings were the highest in nine years, 69 percent from last year. Now Tiger Woods is in contention for a spot in next month's Ryder
Cup which would give him an even bigger stage. At the PGA tournament, even the eventual winner had to admit this was the Tiger show.
(BEGIN VIDEO CLIP)
BROOKS KOEPKA, GOLFER: So we knew what was going on, and it's pretty obvious when Tiger makes a birdie, I think everybody at the golf course
cheers for him.
UNIDENTIFIED MALE: Tiger was charging at times and that was filtering back through the groups, so annoying every leader bought the change no matter
what hole you were on, and knew what Tiger did, and it's a really fun atmosphere to be in.
TIGER WOODS, GOLFER: The people here were so positive the energy was incredible. But I'm just this -- the deposit mess of -- everyone was
willing, you know, every shot that everyone hit, there was no negative comments. No one was yelling(ph), no one was making snotty remarks,
everyone was a straight positive.
And they're excited, yes, they sometimes picks sides, yes, but they were respectful.
(END VIDEO CLIP)
QUEST: Jeff Benedict is the author of a new "Tiger Woods" biography, he joins me now. Jeff, was Tiger lucky or was his playing noticeably better,
was he back on form?
JEFF BENEDICT, AUTHOR: I don't think there was much luckier, what we saw yesterday, he's been building toward this all year. He's gotten better and
better as the season has gone on. We saw what he did at the British Open, he was ahead on the final day and yesterday, he was right there.
It's clear that he's back and he's in the midst of what's probably going to go down in history as a greatest comeback in sports.
QUEST: But why, how, what's he done? I mean, it's years since obviously the scandal of the last decade, and not only that, his playing has been
poor, he's had very bad health issues on injuries that have taken him out. So what's changed?
BENEDICT: Well, a couple of things have changed. One, he's changed physically. He's had his fourth back surgery, when this is the first
surgery that's actually worked. He's had infusion surgery, it's been a huge difference maker in terms of his ability to play golf again.
I mean, secondly, he's had a mental change. He's -- you can see there's expression in the way he interacts with crowds, we saw it all day yesterday
and in fact, all week. The way he exchanges with the media, he's -- he talks about different things.
I mean, so you're seeing two different things going on, it's the physical return of Tiger Woods, it's first time he's actually made a comeback that
he's been able to sustain and maintain. But in addition to that, the reason that all these fans are cheering for him so much is because he is so
much more likable now, he's so much more engaged.
There's a true form of appreciation in him for being able to be out there and play again.
QUEST: And as he does that, the future in a sense is his to take once more, isn't it? Do you think he'll go much further?
BENEDICT: I don't think we've seen the end yet of this story. I mean, he's on a trajectory right now that was unimaginable a year --
[16:55:00] QUEST: Right --
BENEDICT: Ago. If you think back to just one year ago where he was, when we were writing the biography of Tiger Woods a year ago, we were thinking
the end of this story is dark and abysmal --
QUEST: Right --
BENEDICT: And he has turned that around in a way that has I think captivated the world. People around the world are watching what he's doing
because at his age, he's doing something that's quite phenomenal especially when you consider where he was just a year ago.
QUEST: Good to see you there, thank you Jeff Benedict joining me, thank you, I appreciate it. And we need to bring you some news that's entered
CNN. The White House says the national security adviser John Bolton has met today with the Turkish ambassador to the United States at the White
House where of course they discussed Turkey's currency crisis and the current dispute between the two countries over the detain of an American
pastor.
The White House says the meeting was at the Turkish ambassador's request. We will have our profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, in just a few hours, I'll be on my way to London, and when I arrive at Heathrow Airport terminal, through the
queen's terminal tomorrow, afterwards I'm going to find. I'm going to find hundreds, maybe up to a thousand people waiting in line to get through
British immigration through border force.
Not surprisingly, Virgin Atlantic today said it's a disgrace that the U.K.'s home office failed 95 percent of the time to clear people through in
good order. When asked, border force of course says somewhat piously and pompously, they will not compromise essential checks for the nation's
security.
I've heard that before by the way from bureaucrats, the U.S. says it all the time. We will not compromise security. The answer is simple, they're
not mutually exclusive. You should be able to do efficient security and efficient checks and do it in an efficient manner and a reasonable time.
It's a question of resources, innovation and a bit of good luck. The reality of course is that most people prefer others to wait in line, and
that's not acceptable. And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York.
Whatever you're up to in the hours ahead, I hope it's profitable. Join me tomorrow in London.
END
