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Stock Markets Set Some Summertime Records As Jay Powell Promises The Economy Won't Overheat; Two Top White House Officials Are Quietly Lobbying Against Donald Trump's Tariffs Now That The Trade War Is Threatening A Company In Their Home State; The Legal Troubles Which Surround Some Of The US President's Former Associates Are Now Reaching The Very Highest Levels Of Donald Trump's Business Empire; Donald Trump Is Targeting The So-Called Social Media Giants And Accusing Them Of Censorship; Trump Calls Off Meeting with North Korea; Legal Challenge to Zimbabwe's Presidential Election Rejected; U.S. Senator McCain Discontinuing Brain Cancer Treatment; Trump Organization CFO Granted Immunity in Cohen Probe; Pope to Visit Ireland Amid Church Sex Abuse Scandal; Scott Morrison Ousts Turnbull as Australian Prime Minister; More Companies Take Action on Water Security; ESports Tournament Opens in Vancouver with Prize-Tag of Up to $25 Million; Bugatti Unveils New $6 Million Supercar. Aired: 4-5p ET
Aired August 24, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
STEPHANIE SY, CNN HOST: It's a record breaking end to the week on Wall Street. Trading is over on this Friday, August 24th. Tonight, stock
markets set some summertime records as Jay Powell promises the economy won't overheat.
Donald Trump's money man gets immunity in the latest White House legal drama, and it might be the most expensive super car in history. I'll the
ask President of Bugatti about the new five million euro Divo. I'm Stephanie Sy, this is "Quest Means Business."
Good evening. Tonight, this is good news. Those were the words of US Fed Chairman Jerome Powell who says the US economy is doing great and inflation
is in check. In short, Powell says his policy of interest rate rises at the Fed is working despite any criticism from President Donald Trump.
His comments sent markets flirting with a return to the record-setting ways. Let's take a look at the way the three indices ended today. The Dow
up 140 points, and you can see new records set by the S&P 500 as well as the NASDAQ. That brings our 2018 records here up. The NASDAQ setting 26
records this year and the S&P now at 15.
Earlier at the New York Stock Exchange, trader Tim Anderson told "Quest Express" that Jerome Powell's words are a breath of fresh air for
investors.
(BEGIN VIDEO CLIP)
TIM ANDERSON, TRADER, NEW YORK STOCK EXCHANGE: I think that clearly his comments are reassuring for the market and I also think there's this
underlying tone of his delivery not being a PhD economist. It's almost like a breath of fresh air. He's very understandable for a lot of people
to listen to him, you don't have to be a Fed watcher to understand what he's saying.
(END VIDEO CLIP)
SY: It was clearly an upbeat appearance from the Fed Chairman at Jackson Hole, Mr. Powell dismissed fears that the US economy is out of control
saying there is no sign of it overheating. He did not address the criticism he's received from President Trump over rate hikes; instead, he
insisted the Central Bank will stay on course for future rises. Powell also played down fears of rising inflation saying the Fed will do whatever
it takes to keep it in check. Paul La Monica joins me now.
Whatever it takes, that sounds actually like familiar verbiage. Let's start with the new records we saw. The S&P and the NASDAQ again beating
records. How long will the party last and what drove that sentiment today?
PAUL LA MONICA, CORRESPONDENT, CNN: Yes, I think today, Stephanie, you already talked about Jerome Powell's speech and I think that really did it.
He showed the market once again that he's confident about the US economy, but the Fed has to try and keep inflation in check as well that's why
they're are going to be probably a couple more rate hikes this year, maybe a few in 2019 as well and the market is okay with that.
So even though the President has been attacking the Fed and criticizing rate hikes, it's not something that Powell is going to change Fed policy
just because President Trump has been making noise about how rate hikes might be bad news because the market clearly disagrees with the President.
SY: Now, earlier this week, we did hear Jerome Powell sort of nod at the fact that trade tensions continue with Trump's aggressive trade policy
stance, that that could have future impacts on inflation as well as growth and yet the markets really seemed to be shrugging that part of story off
and we did not hear a lot of mention about that again today.
LA MONICA: No, in the Fed minutes, you're right. But the Fed did acknowledge some members that trade concerns are an issue. I think right
now, what we're still having is that while some companies have noted that tariffs and trade issues are starting to hurt earnings, a lot of companies
said it's still just talk, that businesses are mentioning trade issues as a concern, but it's not hurting the overall profit picture of the economy
just yet.
And I the same thing is happening with consumers because Stephanie, consumer spending has been great. Retailers have reported for the most
part really strong results. We're talking about brick and mortar retailers also, not just Amazon.
SY: Yes, and the Targets of the world are saying this is among the best consumer environments they've ever seen. Again, I go back to the question
of how long this will last and why it's important even for Powell to continue the gradual rate hikes in an environment where inflation doesn't
seem to be really going up at this point.
LA MONICA: Yes, inflation isn't going up all that much just yet, but it's the type of thing that if you let it go unchecked, all of a sudden, you
have rampant inflation and rates would have to go a lot higher than what the Fed would probably like.
[16:05:08]
LA MONICA: I think they're happy and the market clearly is as well, which is a couple of quarter-point hikes every few meetings. That's something
that's manageable. With regards to how much longer this rally can last, if consumers keep spending, corporations keep spending, profit should still be
pretty good. The dollar weakened today as well which should help multi- national companies going forward if that continues to go down.
So I'm not going to say that this bull run goes on obviously forever. It has to peak at some point, but earnings are still justifying this rally it
appears.
SY: Yes, and I think it's interesting that you bring up basically the notion of pre-emption being important with the gradual rate hikes. Paul La
Monica, thank you very much.
LA MONICA: Thank you.
SY: Later on in the program, I'm going to be speaking to Alan Blinder who was Vice Chairman of the Fed under Alan Greenspan. He'll be joining us
from Jackson Hole in just a few minutes.
Two top White House officials are quietly lobbying against Donald Trump's tariffs now that the trade war is threatening a company in their home
state. Martin Savidge has more from Winnsboro, South Carolina.
(BEGIN VIDEO TAPE)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The tariffs have been incredible and ...
MARTIN SAVIDGE, CORRESPONDENT, CNN: Even as they work for a President who has proclaimed tariffs are the greatest, CNN has learned from two members
of the South Carolina congressional delegation, UN Ambassador Nikki Haley and Budget Director Mick Mulvaney have been pushing for a tariff exemption
for a company in their home state.
(BEGIN VIDEO CLIP)
TRUMP: We are winning on trade.
(END VIDEO CLIP)
SAVIDGE: President Trump says he wants to level the trade playing field by imposing tariffs on as much as $200 billion more imported Chinese products
and parts. Corporate leaders have been telling Washington how much those tariffs will hurt business and the economy.
But behind the scenes, Mulvaney and Ambassador Haley are advocating for a small South Carolina company named Element Electronics to get something
every impacted company would love to have - an exemption for their Chinese supplier.
(BEGIN VIDEO CLIP)
MIKE FANNING, DEMOCRATIC MEMBER OF THE SOUTH CAROLINA STATE SENATE: We have advocates for South Carolina in this Element plant to include these
two individuals that are fighting for the unique case that we have that could - that makes this policy impossible for us to implement in South
Carolina.
(END VIDEO CLIP)
SAVIDGE: South Carolina State Senator Mike Fanning welcomes Mulvaney and Haley's help for Element which is in his district claiming Element deserves
the exemption because it's the only company in America assembling television sets, selling them to Walmart. Last month, Element shocked the
tiny town of Winnsboro, population 3,800 announcing it was shutting down, and laying off 126 employees blaming Trump's proposed tariffs which the
company says will make its TVs too expensive.
CNN has reached out to Element Electronics, but they have not responded to multiple requests.
(BEGIN VIDEO CLIP)
DAN RUFF, OWNER, RUFF HARDWARE: Anytime jobs are lost, there's a trickledown effect where people don't have money to spend. They can't
spend and so it affects everyone.
(END VIDEO CLIP)
SAVIDGE: Winnsboro and Fairfield County have had what one official calls the "year from hell." In July 2017, the construction of two nuclear re
actors was abandoned resulting in the loss of close to 6,000 jobs, next came the shuttering of a large textile mill that had provided jobs for more
than a century. The county hospital is closing, and now Element, Winnsboro's largest remaining private employer is poised to call it quits.
(BEGIN VIDEO CLIP)
FANNING: It rocked me to my core.
(END VIDEO CLIP)
SAVIDGE: Mulvaney and Haley both have a connection to Element. In 2013, then Governor Haley lured Element Electronics to the state by offering more
than $1 million of state money as well as tax incentives. Later, she was boasting about the economic benefits of the company in a promotional video
for Walmart.
(BEGIN VIDEO CLIP)
NIKKI HALEY, UNITED STATES AMBASSADOR TO THE UNITED NATIONS: ... Electronics, $7.5 million invested, 500 jobs in Winnsboro.
(END VIDEO CLIP)
SAVIDGE: Before he was Trump's Budget Director, Nick Mulvaney was Congressman Mulvaney representing the district where Elements set up shop
...
And you don't see the hypocrisy in his effort do that for his state?
FANNING: Absolutely not.
SAVIDGE: Fanning, a Democrat says Mulvaney and Haley's advocacy is neither hypocritical nor political pointing out in 2016, his district voted
overwhelmingly for Hillary Clinton. He says the pair are helping because it's justified.
But the President's tariff pain will be felt nationwide and these corporations want to cut backs and layoffs, many communities can only wish
they had two high level administration members fighting for them.
Officials with Elements say that if they were to get an exemption or if those proposed tariffs were to simply go away, they could be back in
business in a matter of months, possibly even think about expanding, which would be a welcome dose of good news in this small economically hard hit
down. Martin Savidge, CNN, Winnsboro South Carolina.
[16:10:01]
SY: For more on the trade tension and Jerome Powell's speech, Alan Blinder is the former Vice Chair of the US Fed and he joins me from the action in
Jackson Hole. Professor Blinder, thank you so much for your time. I want to just get your interpretation on Fed Chairman Jerome Powell's speech.
ALAN BLINDER, FORMER VICE CHAIRMAN, US FEDERAL RESERVE: I think it was very much in defense of status quo which, again, the status quo path, the
path is now - that the Fed is now on and he was giving every indication we'll continue to be on. I think if you want to place this in the - at the
margin, was this hawkish or dovish? I think it was dovish and whatever you believe, which does not contradict what I just said about interest rates
going up, because the dovishness is about the stopping point. How far do you push this?
So if you had to choose between reading this as a little hawkish, that there was a little bit of that and a little dovish, I think it was more of
the latter.
SY: There were, in this path that you're referring to, is that there are two more planned rate hikes before the end of the year. Now, based on that
rate of inflation, and Powell's comments that the economy does not seem to overhearing, do you predict the Fed will stick with both of those hikes?
Is that how you interpreted Powell's comments?
BLINDER: Yes, I think it's likely. The September one is baked in the cake, that's for sure. We're almost there. Things can happen between now
and December. That's still a few months away, but I think if the economy keeps trundling along the path on which it's been trundling, a December
rate hike of another 25 basis points is quite likely. That's when the Fed will start getting into serious decision making, how much further, if any,
do we want to go?
SY: They want to avoid that inverted yield curve, I know and the potential for recession. I want to kind of switch gears here, sir, because you
probably follow President Trump's tweets criticizing that path to gradually hike rates that his own appointed Fed Chair, Jerome Powell has set the
Federal on. How vulnerable do you think this Fed is to political pressure, especially with the high stakes midterm elections in the US coming up in
November?
BLINDER: It's a very good question. I think the answer is only modestly. Because you ask yourself what could Trump do to the Fed? He's already
appointed Powell instead of some incapable crony of his own, which would not have been a surprise from President Trump. Powell is a good man. He
believes in the independence of the Fed, he has said so, if necessary, he will say so. Again, he's got complete 100% banking - backing from inside
the Fed on that subject.
I think he has very substantial backing, though not a hundred percent from members of Congress in their oversight capacity. So what Trump can do is
two things. Her can make a nasty tweet as we've seen is his want in many, many, many context and sometimes they scare people and sometimes they
don't. I don't think the Fed will scare that easily; or he could use his remaining appointment powers. There's still vacancies on the Fed, in
great distinction to what he's been doing up to now to put terrible people on the Federal Reserve Board. That is not what he has chosen to do up to
now. His appointments to the Fed, his nominees have been good and we hope it will continue that way, but he does have the capability, if he gets mad,
to send people that will just make Jay Powell's life miserable.
SY: Before I let you go, I want to get your comment on another issue I know you've been talking about and that is the trade tensions that the
Trump policies have begun. The Fed did refer in their minutes to these ongoing tensions and the potential for negative effects. From the Fed's
point of view, what can they do to mitigate risks to inflation or potentially growth that Trump's aggressive trade policy might pose?
BLINDER: I think pretty much nothing. They're watching like all of us are with no ability to influence trade policy nor should they have, by the way.
The Fed has a great independence. We were just talking about - though within the prescribed area and that does not include trade policy. If it
happens - well, I shouldn't say if it happens, it is happening and the only question is how severe this trade shock is going to get.
A trade shock is a supply shock to the Central Bank, so it's analogous to giving them the same dilemma that they have in the old days when oil prices
would shoot up. That causes a bit more inflation. In this case, it's a bit more than the oil shock case way back, it was a lot more. But in this
case, it's a bit more and it takes a bit of a bite out of growth.
[16:15:10]
BLINDER: Neither one of those is good and that leaves the Fed with the same dilemma it had back in the oil shock days. Do you expand the economy
to make up for the lost growth or do you try to push against the man to stand against the rise in inflation? That's the kind of choice the Fed
will have with a big trade war.
SY: All right. Alan Blinder, thank you so much for your perspective from Jackson Hole.
BLINDER: Sure. You're welcome. Bye.
SY: Still ahead, the man who looked after the US President's business has been granted immunity in the probe into hush money payments. And Mr. Trump
says social media companies are censoring people at the same time, America's tech CEOs are meeting to talk about security during the next
election.
The legal troubles which surround some of the US President's former associates are now reaching the very highest levels of Donald Trump's
business empire. Sources tell CNN that the Trump organization's Chief Financial Officer has been granted immunity by Federal prosecutors in the
hush money probe against his former attorney - Trump's former attorney, Michael Cohen.
Cristina Alesci joins me now, lots of details to get to, Cristina. So, I'll let you jump right in. The man we're talking about is Allen
Weisselberg. He is the CFO of the Trump organization. Why has he been granted immunity and what did he give in exchange for it?
CRISTINA ALESCI, CORRESPONDENT, CNNMONEY: Well, Federal prosecutors granted Allen Weisselberg immunity in exchange for information about
Michael Cohen in connection to the investigation into hush money payments that Michael Cohen made to women who allegedly had affairs with the
President.
This is significant because of who Allen Weisselberg is. He's the Chief Financial Officer, yes, and that's a big title in most companies, but in
the Trump organization, this man knew everything about the company's finances. He worked for Donald Trump's father. And he knew exactly what
money came in and what money came out. He helped prepare the organizations - he helped prepare taxes. When President Trump left for Washington, DC,
he left the company in the care of his two sons and Allen Weisselberg.
[16:20:04]
ALESCI: So outside of family members, Weisselberg is probably the person who knows more about the organization than anyone else. This is not a
person that Donald Trump can say, "Oh, he doesn't know much. Oh, he's not that important," the way that he's been trying to do with Michael Cohen.
SY: Is it being suggested that he knows anything that would further implicate the President in potentially being a co-conspirator in what Cohen
has been charged with which we should remind our viewers which is basically a violation, a felony violation of US campaign finance law by paying hush
money which in kind is considered a campaign contribution.
ALESCI: Right. Undeclared ...
SY: Beyond the limits ...
ALESCI: Right. That's an excellent question. What we do know is that Allen Weisselberg was subpoenaed by Federal prosecutors and we know that
there was a deal between Allen Weisselberg's attorney and Federal prosecutors, but we don't know the scope of the deal. And when I say deal,
I mean what information is he going to provide. We don't have the specifics of that deal, so we don't know whether or not Allen Weisselberg
provided any significant information as to whether the President knew about these payments when he knew about the payments which is part of the whole
larger question that we're trying to get out since Michael Cohen turned himself in and that information suggested and implicated the President.
SY: Well, Cohen said straight up that the President directed him to do this to influence the campaign. We may see corroboration. I guess, that's
one of the questions.
ALESCI: Well, that's one of the questions out there. Can Michael Cohen really corroborate that? Does he have evidence of that?
SY: All right, Cristina Alesci, I know you'll keep following it. Thanks so much.
Donald Trump is targeting the so-called social media giants and accusing them of censorship. The President said they silenced millions of people,
that's before he went after CNN again.
Earlier this week, Twitter CEO Jack Dorsey told CNN that Twitter does not discriminate against anyone's political views.
(BEGIN VIDEO CLIP)
JACK DORSEY, CEO, TWITTER: The real question behind the question is are we doing something according to political ideology or viewpoints? And we are
not, period. We do not look at content with regards to political viewpoint or ideology. We look at behavior and we use that behavior as a signal to
add to relevance. We need to constantly show that we are not adding our own bias, which I fully admit is more left leaning.
(END VIDEO CLIP)
SY: Twitter is among a group of companies meeting today to talk about US election security. Clare Sebastian is here. Clare, good to see you. I
want to be clear, this is sort of two different stories. There's a story of Trump alleging bias at social media companies, that they're somehow
censoring specifically right wing voices within their newsfeeds, and then there's this meeting that's happening today between all these big tech
social media companies about how to secure their platforms ahead of the midterms, right?
CLARE SEBASTIAN, CORRESPONDENT, CNN: Right, exactly. This is a private meeting. We know from a source close to the meeting that it's happening.
We think it's happening at Twitter's headquarters in San Francisco, and it involves Twitter, Facebook, Google, Microsoft and a number of other tech
companies. And what's really interesting about this is that we're starting to see the seeds of coordination.
This is the second time that these tech companies have met in a couple of months. They met back in May as well - also with officials from DHS and
from the FBI. So we're seeing kind of more coordination between these tech companies themselves and potentially the government as well and what it
really speaks to is the fact that they're trying to get out in front of this problem of manipulation and misinformation before the midterms.
We've seen the precipitous loss of trust in these platforms after what happened in 2016 and since then, they're really trying to show that they're
getting out in front of it. They've been very active this week with a number of updates on how they've been taking down abusive accounts and
combating these issues.
SY: Besides it being sort of also an exercise in PR, do you foresee there being any technological breakthrough that would put these - they're all
such different platforms with different issues that happens, so is that the type of coordination we might see, a concrete way for them to better secure
their sites?
SEBASTIAN: Well, they will be investing heavily in cyber security and threat intelligence and ways to identify where the threats are coming from.
So, I think in that respect, they all have these highly - most of the big ones, Google and Facebook for example, have these highly developed units
that do security.
So, certainly perhaps those groups will be able to coordinate. But I think, it's interesting, if you look back at what we've seen, when it comes
to election interference and all the misinformation that we've seen since then, quite often, you see accounts mirrored across Twitter, Facebook issue
- so in that respect, I think it's certainly a good idea for them to work together.
[16:25:04]
SY: And a lot of times, those are trolls or bots. Speaking of that, we are learning, this is a really interesting story that the Russian operated
internet research agency which interfered in the US election according to US intelligence has now also been linked to the debate over vaccinations
and the anti-vax movement. Clare, how did this all emerge? And why would Russian trolls care about that debate?
SEBASTIAN: Well, this is a study from the "American Journal of Public Health" who had been studying tweets specifically over the course of three
years, 2014 to 2017 and they found automated bots, but they also found accounts that they say are linked to the internet research agency which is
this shadowy organization that has been closely linked by the Mueller investigation now to election interference.
And this is really interesting because it mirrors - it's a very different area, obviously public health. We haven't seen that before. But it
mirrors the kind of tactics we' seen before. They're not coming down on one side of the debate. They say that they found them on both the pro and
anti-vaccine side. And what we see there is again what we've seen before, they're trying to drive to the extremes, they're trying to polarize.
They've done an enormous amount of research into the divisive issues in American social and political life and they take them and they try and
amplify those divisions. That's what we're seeing here.
SY: Troubling. Clare Sebastian, thank you so much. No Australian Prime Minister has served out a full term in office in more than a decade. And
now, there's another new leader in Canberra. We'll take a look at Australia's political upheaval, next.
Hello, I'm Stephanie Sy, coming up on the next half hour of "Quest Means Business" we'll be live in Vancouver where there's $25 million up for grabs
in this weekend's e-sports tournament there and I'll be live with the President of Bugatti who has just unveiled a brand new $5 million hyper
car.
First these are the top headlines we're following on CNN this hour.
[16:30:05]
The United States has abruptly called off a meeting with North Korea. President Donald Trump cancelled plans for his Secretary of State Mike
Pompeo to begin another round of talks on denuclearization.
Mr. Trump cited insufficient progress on the issue and also blamed the trade battle with China for the cancellation. A legal challenge to
Zimbabwe's presidential election results has been rejected by its constitutional court. It upheld President Emmerson Mnangagwa's win in the
July 30th context.
Opposition leader Nelson Chamisa contested his loss at the polls which he called fraudulent and illegal. Mnangagwa's inauguration remains scheduled
for Saturday. The family of U.S. Senator John McCain says he has decided to discontinue treatment for brain cancer.
He was diagnosed a year ago and spent part of that time at work on Capitol Hill. McCain drew the ire of President Donald Trump by casting the
deciding vote to save Obamacare. A source tells Cnn that the Chief Financial Officer for the Trump Organization has been granted immunity in
the investigation into Michael Cohen.
The source says Allen Weisselberg was interviewed several weeks ago about the hush money paid up to two women who say they had affairs with the U.S.
President. Pope Francis heads to Ireland this weekend as the Vatican is urged to take action on the clergy's sex abuse scandal engulfing the
church.
The Pope will say a mass and is expected to meet with abuse survivors during his visit. The first by a Pope to that country in decades.
Australia has a new Prime Minister. Former cabinet member Scott Morrison were sworn in on Friday, becoming the fifth person to take the job in the
past five years.
Now, he's appealing to voters and businesses alike with calls for unity. Mr. Morrison's predecessor Malcolm Turnbull was forced out of office Friday
by rivals within his own party. As Scott Morrison assumes his new role, the former Treasurer-turned leader is already looking to shape economic
policy.
He made an appeal to voters, Friday, saying, quote, "the best form of welfare is a job." He says he believes Australians should keep more of
what they earn. Australia's stock market have fluctuated on the news from Canberra, stocks were gripped by a three-day losing streak as the
leadership crisis played out this week.
But rebounded Friday as Mr. Morrison took office. The CEO of Australian Airline Qantas says the uncertainty was quote, "disappointing and
frustrating", Alan Joyce called the shake-up not helpful.
Let's talk more about this leadership change and the market reaction with Steve Keen, professor of economics at Kingston University joining me via
Skype from Amsterdam. Steve, thank you so much for joining us. You know, the insurgency and Turnbull's party started as I understand it because MPs
actually wanted to install a man named Peter Duncan as PM.
And he's been -- that Peter Duncan guy has been compared to Donald Trump actually, and yet Morrison ends up Prime Minister in the end. Those guys -
- neither Duncan or Morrison would have been elected. So what are voters thinking, are they happy with this change?
STEVE KEEN, PROFESSOR OF ECONOMICS, KINGSTON UNIVERSITY: Oh, actually, you've got his name wrong, but that's not a problem because you're going to
be a forgotten in politics in a very --
(CROSSTALK)
SY: Peter -- excuse me? Peter Dutton, excuse me, Peter Dutton --
KEEN: Kind of stop them, yes --
SY: Yes --
KEEN: Is actually been mistaken for now, and finally nothing has been mistaken for an American entrepreneur selling pop-corn is never come to
people's Prime Minister choice down here, which was quite hilarious side trip to the whole thing.
It's really a fuss, an Australian populace(ph) has been a fuss pretty much for the last 10 years, and I've actually compared this now to at least
Australian or famous incident where an Australian won a ice stadium gold medal at the Olympics since 2002 in Salt Lake City, not because he is the
best guy, but because the four people ahead of him all fell over and he was the only one standing, crossing the line.
So I see Stone Mile(ph) which he's known down in Australia as the scathing(ph) bad breed(ph) of Australian politics.
SY: All right, but he's --
(LAUGHTER)
That's an interesting metaphor, I wouldn't have thought Australians were particularly good at ice skating. But look, Morrison is not -- he is not a
nobody, he's been in charge of the economy for what, the last three years.
The economy has been doing pretty well. What else do we know about Mr. Morrison and what his policies will be like going forward. Certainly,
investors seem to like this change.
[16:35:00] KEEN: Well, him he's got more -- I thought I was going to use a different expression, but he's got more background than Malcolm Turnbull
had and less ideology than Tony Abbott who was the previous conservative Prime Minister.
There's more likelihood he's going to be doing stuff as of course the property law, they did close for a substantial part of his pre-academic --
pre-political career, he was a lobbyist for the property lobbying in Australia when of course Australia has the longest-running property bubble.
So he'll be doing all he can to maintain that bubble and is the best thing right now. So he'll be pumping government money to keep the property mark
otherwise, that will make him really very popular in Australian business and potentially with the electorate.
But I think he's really on a hiding to nothing to be the last liberal party prime minister before the Labor Party takes over at the next election which
he'll delay for as long as possible.
SY: OK, you bring up a lot of stuff there, sir, so part of what you said, first of all, Australia's economy hasn't experienced a recession in more
than a quarter of a century, but you just referred there to one of the economic pressures that was facing Turnbull.
From what I understand, wages are extremely stagnant and also there are high housing costs. So were those economic pressures playing in to voters'
mind and did that lead in part to Turnbull, his fault?
KEEN: No, as entirely due to actually personal animosity, to go back and the liberal party 45 years when both Tony Abbott who was the previous prime
minister that Malcolm shafted to get the job, and they were both students at Sydney University.
Both on the conservative side, no tiny staunchly conservative actually like Australia back to 1950s in the Curtin's politics, whereas the Turnbull is
more a swath 1970s conservative in that sense. They hated each other at university and spent their entire time shafting each other there.
And now they're spending their time shafting each other in Australian politics in the house of parliament, and I think the most sensible thing
that Scott Morrison could do will be to appoint Tony Abbott to be the high commissioner to London and get rid of them and remember particular
council(ph) from the liberal party.
Whether he has the guts to do it, we'll find out shortly.
SY: All right, and we'll see how long the liberal party survives under all these circumstances. Steve Keen, thank you so much for your perspective on
this.
KEEN: You're welcome.
SY: With Australia divided over climate policies, activists are gearing up for World Water week which starts on Sunday. CDP which helps companies
manage their environment policies says more big firms are taking notice and putting plans in place over how they use water.
Cate Lamb is CDP's director of water security. Cate, thank you so much for being with us. First of all, how urgent is the issue of water security
around the world?
CATE LAMB, DIRECTOR OF WATER SECURITY, CDP: Thank you for having me this evening Stephanie, I really appreciate being on board. The issue is that
depends on where you are, ultimately, but for many, businesses is growing as an issue.
Just this year, we had more than 7,000 and -- excuse me, 3,770 risks that falls into CDP from the mid-west's largest growing at the world's largest
businesses, and this is posing a threat, not only to their bottom-line, from a range of different reasons.
But we're seeing a range of physical reputational and regulatory risks that are looking over just the risks -- sorry, this is a total mess, but they're
still coming around from a timeline of both short and long-term risks. Apologies, Stephanie.
SY: That's OK, you know, you know, essentially it's a pretty complicated set of risks that businesses face. Why don't you start by telling us which
industries are being most impacted and will be most impacted by water scarcity issues in the near term.
LAMB: Sure thing, so there are range of industries that will effectively have metals in mining, there's organizations responsible for the production
of food, of course, where agriculture accounts for more than 80 percent of global water use worldwide.
We have energy companies who is dependent upon water is really quite fundamental in order for them to succeed as an organization. And all of
these sectors are going to be adversely affected by the situation as it increases.
At the UN for example is estimating that the world's supply of water is likely to hit a supply demand gap of around 40 percent in just 12 years
time.
So while the world's -- as it turns water scarcity and water stresses off, impaired, what we're really experiencing is an increased competition for
this finite results, and businesses are finding themselves on the frontline as they compete for access to this resource with communities, with the
environment and with all that water uses within the basins that they're located.
[16:40:00] SY: Give us some examples, Cate, of how major corporations are taking action to protect their own bottom-lines, given these circumstances.
LAMB: Sure, at CDP, we believe that this closure is really a first and vital step in order to understand and mitigate the risks that companies are
facing. And what we're seeing as a result of that is more than two and a half thousand companies disclosing to us on an annual basis.
We provide the same work that ultimately enables companies to better understand the challenges that they're facing and take appropriate steps.
We have an example of Danone where they're pursuing nature as a source of solution to water-related risks.
They invested in a range of mine growth restoration projects in a wide range of locations -- apologies, in order to protect their fresh water
resources that they rely upon. Well, beverage company AB InBev did the same, they're investing in river basin management plans, and also again
they took solutions in order to protect the river that they're relying upon.
And Fiat-Chrysler, quite surprising perhaps to some of your watches today also have significant risks that they're facing and they planted 60,000
trees right across Latin America in a range of regions, in order to again protect the fresh water resources that they're relying upon, facing an
increasing number of companies turning to perhaps non-traditional nature- based solutions that tackle these risks.
And excitingly in a report that we released just a couple of days ago, these solutions are coming in at a much lower costs than traditional great
forms of infrastructure.
SY: There are of course long-term solutions and maybe also filling a vacuum where government policy in places like the U.S. and Australia are
not. Cate Lamb, thank you so much for joining us.
LAMB: Thank you Stephanie.
SY: Powerful heroes are battling for supremacy in Vancouver, at least in the world of professional video gaming. It's one of the biggest weekend's
on the calendar for the growing phenomenon of ESports, details next.
(COMMERCIAL BREAK)
SY: This weekend is one of the biggest ESports prices of the year. More than $25 million is up for grabs at the international; a professional
video-gaming tournament in Vancouver. Matthew Black is a reporter for the Canadian Broadcasting Corporation joining me from Vancouver via Skype.
[16:45:00] Matt, I know you've been covering this industry for a while, but what's the atmosphere been like at the International, and how is that
compared to what you might feel at a major sporting event?
MATTHEW BLACK, REPORTER, CANADIAN BROADCASTING CORPORATION: Well, people are very excited, it's a real big event, it's the biggest in the ESports
calendar, the biggest money tournament and the last big money tournament was the one before this.
So the last four TIs, the last four TIs are the biggest. As far as the atmosphere here, it's not all that different from a normal sporting event.
What the set up is like is you walk into the arena, the lights are turned down a bit, so it's a little different than your normal basketball, hockey
game.
And when you go down into the sitting area, it's all dark and you see two teams enter these last post that are sound proof, they come out to entrance
music, they come out to smoke and pyrotechnics, they begin playing and fans watch on a big screen, that's normally where the jumbotron would be where
you would watch the highlights and plan unfold.
There's a lot of fans -- a lot of flags rather in the crowd, a lot of fans who come from different parts of the world, a lot of these teams come from
one particular country or one particular part of the world. So it has a bit of a World Cup feel about it, but in terms of the actual atmosphere,
you have cheering, you have booing, you have (INAUDIBLE) and eyeing, it's not all that different than your usual basketball or hockey game which we'd
normally see at Rogers Arena at this time of year.
SY: So you've been covering ESports for a few years, Matt, and there are certainly some big media deals and sponsorships in the sector we've seen
recently. But do you see ESports really going mainstream? Maybe even being at the Olympics one day.
BLACK: Yes, it has a way to go before that, there's certainly more and more support building for that, they have a few obstacles to get through.
One of the realities is that videogames just change so fast, the most popular game on the planet right now is called Fortnight, it's the most
streamed one.
Five years ago, no one had ever heard of it, so you can't trust that with a lot of Olympics sports that have been around for generations and that don't
look all that different than they did a few decades ago. That will be one obstacle that they have to overcome.
But on the other hand, it's very hard to sell a hockey-size arena for one night, let alone six. And it's only that they're doing that, it's who is
going to these events, it's really young people, that young audience that so many industries credit, and ESports seems to be able to deliver that
better than anyone right now.
And so that's what's got organizations like the Olympics and many pro sports teams interested in this as well.
SY: Indeed, Matthew Black, a reporter for the CDC, thank you Matt, have fun. Now the International isn't the only big ESports event this weekend,
the over-watched ESports league is holding its first ever all-star game. The event is being held in a sold-out Blizzard Arena in Los Angeles, a
purpose-billed venue for professional video-gamers.
It's also being broadcast on Twitter. Brandon Snow is chief revenue officer of Activision Blizzard which operates this ESports League.
Brandon, nice to meet you --
BRANDON SNOW, CHIEF REVENUE OFFICER, ESPORTS BLIZZARD: Thanks --
SY: And thanks for your time. The over-watched league has struck this deal with Twitter, can you give us some more details, and what does it mean
for you guys and for Twitter, and for the burgeoning base of ESports fans?
SNOW: Sure of course. It's a wonderful partnership that we're going to enter in with Twitter. We're starting it off this weekend with our all-
star game as you mentioned.
They will be showing near-live highlights on Twitter of those matches of the games played, and that will continue on as a multi-year arrangement
into next season where they'll continue to show highlights of our games, a regular season games and we will have a weekly 30-minute live-streamed pre-
game show to watch point also airing live under our platform into the next season.
SY: Now, I know that last month, ESPN signed a deal with you guys for TV rights, and the Overwatch League as well. How much importance do you place
in the traditional media outlets versus say, the Twitters of the world or even comparing it to like the Amazon streaming Twitch --
SNOW: Right --
SY: As far as revenue?
SNOW: Sure, well, we want to make sure we have our content in every place where our fans are engaging with us. And Twitter is one part of that. We
have a very important relationship with Twitch who as you mentioned streams all of our games live on their platform and then into this finals playoffs
and final of this year, we entered into a relationship with "Disney" to show on linear our products.
And it was the first time to ever have live ESports event on the flagship products of ESPN. We had that on Friday night, and then rear of the entire
finals on "Abc" the following Sunday. So for us, it's about continuing to grow, expand the audience, there's 40 million people playing Overwatch
around the world and we want to make sure that we can engage them with the sport and in any way that they want to do that.
And that's whether it'd be digitally streamed linearly on television or through a short form, counting on Twitter.
SY: All right, I want to ask you the big, sort of the mountain top question which is where is the landscape for ESports right now. And how do
you see that changing in that landscape in the future?
SNOW: Sure, we are in the cost of mainstream. If you think about the 2.2 million gamers that are out there, there's already 380 million people
watching ESports.
[16:50:00] Eighty percent of those people are under the age of 35. And -- so we are in a situation of growth that is going to be impressive(ph), and
I think as it relates to potentially existing stick and balls sports that you're aware of.
And at the Overwatch League, we're taking that model, but yet, I think we're moving it beyond to where it has been and improving. So as -- what
I've commissioned is, we have a 12 league -- 12 team league, city-base franchise league, no different than you have with any traditional sports --
SY: Yes --
SNOW: And we have a vision of playing home and away games, no different than what you have in traditional sports. It's just that you engage in --
you do that in a digital space.
SY: I think one wants a piece of that ESports audience, I know that. Brandon Snow, Chief Revenue Officer of Activision Blizzard, thank you so
much --
SNOW: Of course --
SY: For joining us --
SNOW: Thank you very much for having me.
SY: How do you make a super car 30 miles per hour slower and then tag on an extra $3 million to the price-tag. Bugatti has done just that, the
company's president will join me to explain next.
(COMMERCIAL BREAK)
SY: Bugatti's newest super car has 1,500 horsepower, costs twice as much as the previous model, it's 8 seconds faster and even if you have a spare 6
million bucks, you can't buy one because only 40 are being made and they're already sold out.
All right, stop showing me, show the car. Bugatti unveiled the Divo, a few hours ago, it's actually slower in terms of miles per hour than the current
model the Chiron. But Bugatti says the Divo handles much better and so it goes faster around the track.
Stephan Winkelmann is the president of Bugatti joining me from Monterey, California. Stephan, how much --
STEPHAN WINKELMANN, PRESIDENT, BUGATTI: Hello --
SY: Hi, great to see you. How much of a technological leap is the Divo or is it just sort of a tweak version of your Chiron?
WINKELMANN: No, the Chiron is a different car, when we speak about performance, a different -- as you say, no, one is the longitudinal
acceleration and the other one is the latitudinal(ph) acceleration. So the handling being nimble and agile.
And this is what we wanted to underline with this car. So we have a much safer short seat, we have an impressive down force, we have -- a design
which is completely new.
[16:55:00] We have reduced the weight by more than -- so this is the real package which is very -- and which is bringing us to invest a lot of money
into a car like this.
And on top of it, as you said, we only want to do 40, so this balance would create a collector's item and also a state of the art technology -- like
this.
SY: You know, the Divo has been called the most expensive supercar in the world. You just talked about how much it costs to develop it, will the
sale of 40 of these be profitable for Bugatti and its parent company Volkswagen?
WINKELMANN: Yes, we are a business case, even if it's not important, it has to be a business case and this is what we're looking at.
SY: OK, you also talked about the sort of cutting edge technology. I'm curious, given all that you must spend for research and development into a
vehicle like this, how much do we see those technologies go into the design of other Volkswagen brands?
Could we see aspects of what we're seeing in this car? For example, in an Audi.
WINKELMANN: No, what we do here is specifically made for the Bugatti brand because we know our customers, we know the things we need to do, not only
for the customers, but also to keep the brand at the highest possible level.
And therefore this always has to be the tip of the sphere and to have automotive technology.
SY: OK, you are going to be producing the Divo as well as the Chiron, I'm sorry, I mispronounced it earlier at the same time, I understand it's the
first time that Bugatti is going to actually be producing two models at the same time. Is this the future for Bugatti?
And I have to ask since we see other luxury car-makers, even Rolls Royce, Bentley, Lamborghini branching out into things like SUVs, could you see
that being in the future for your brand?
WINKELMANN: So I have to tell you that -- high-end luxury and super -- was founded back in '99 and next year we are going to celebrate 110 --
SY: Right --
WINKELMANN: In time, we have much more models, now we're having today on this day, and today, we are doing the Chiron and we will do the Divo. And
if you ask me if that this is --
SY: OK --
WINKELMANN: Ready for more, then yes, the Bugatti brand is ready for more.
SY: Stephan Winkelmann, president of Bugatti, thank you so much, we'll have to end it there. And that's QUEST MEANS BUSINESS, I'm Stephanie Sy,
the news continues here on CNN.
END
