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The Arrest Of Huawei Executive Renews Trade Fears, OPEC Has Failed To Reach A Consensus On Cuts To Global Oil Supply On Thursday; Nations Gathering In Poland This Week Are Working To Keep Global Warming Under 2 Degrees. Aired: 3-4p ET
Aired December 06, 2018 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ELENI GIOKOS, BUSINESS CORRESPONDENT, CNN: One hour to go before the close of trade in New York and we've got the Dow down almost 1.5%, still triple
digit losses, but it is off the session lows of 700 plus points a little earlier in the day. It's Huawei effect that's driving the market down,
it's Thursday, December 6th and these are your top stories. The arrest of Huawei executive renews trade fears, could this be a new front in the
tariff war. It's a "no" from OPEC when it comes to an oil deal, and we're live from the Summit in Vienna, plus the Eiffel Tower closes along with
museums and the Opera, a French Tourism Minister says, "We should still visit despite the unrest." I am Eleni Giokos, and this is "Quest Means
Business."
Well, a very good evening to you. Tonight, Beijing is angry, investors are alarmed and there are new doubts about the fragile trade war truce. Now,
it comes after a top executive at a Chinese tech giant, Huawei was arrested in Canada and is facing expedition to the United States. The news is
sending shock waves through the markets -- London, Frankfurt, Paris, Zurich -- all fell more than 3%. Look at that, blood on the markets today.
The addition of Brexit fears pushed the FTSE to a new closing low for the year and all of its gains this century have been wiped out. Yes, we are
back to levels from 1999 and the DAX is nearing a bear market down from almost 20% from recent highs, so not good news at all.
Meantime, Wall Street is taking Huawei arrest as a reminder that the trade war is still very much alive at its worst, the Dow was down around 785
points today, companies like Apple and Boeing which have exposure to China are getting really hit and the worries in the bond market are hurting the
banks.
Remember, these are the kind of losses we saw on Tuesday as well, markets were closed over in the U.S. yesterday, so voluntarily is really high today
as well. Morgan Stanley, Citi Group, Bank of America -- all have been down more than 4%. So Teddy Weisberg is at the floor of the New York Stock
Exchange and I'm sure he has been holding on for dear life today. Teddy, thank you so much for joining us. Tell me what has it been like and what
are the reasons that investors are pretty much in panic mode? I mean, are things starting to subside now that we are off the worst levels of today?
TEDDY WEISBERG, PRESIDENT, SEAPORT SECURITIES: Well, I'm not sure if it's the investors or the programs because probably, we're told 90% of the
volume both Tuesday and today have been all program driven and of course, you know, the computers are pretty agnostic when the momentum causes the
programs to get triggered on the sell side, you know, it's Katie bar the door and everybody sort of runs for the hills and the problem we have is
you don't really know what is triggering that.
I mean, you basically went through the litany of issues that the market is dealing with at the moment and at the end of the day, it's uncertainty and
the markets could deal with bad news and the markets can deal with good news, but when you throw this much uncertainty at the markets it clearly
becomes very problematical.
GIOKOS: Yes, Teddy, I mean, it's a cauldron of bad news, I guess, that we've been seeing. I mean, how important is this arrest that we saw from
Huawei? How important are the bond yields that we saw playing up earlier this week, the tweets from Trump? What is on top of everyone's mind as we
close off the year?
WEISBERG: Well, I think at the end of the day, it's always going to be first and foremost the Fed. I mean, clearly they are the 800-pound gorilla
in the room and the other gorilla in the room, the 700-pound gorilla, if you will, clearly are the tariff issues. And you know, we get such a mixed
message, you know, we've got a reasonably positive message out of Argentina and then within 24 hours, you know, whether it was tweets or now 48 hours
later, you know, this arrest of this person in Canada, you know, you get the flip side of the equation.
So it's sort of this good cop/bad cop thing, the end result of which is it's just a lot of uncertainty and quite frankly, the markets just are not
programmed to deal with it.
GIOKOS: All right, Teddy, thank you so much. I'm hearing cash is the name of the game, but yes, thank you so much for your time, sir.
WEISBERG: My pleasure.
GIOKOS: Now, the arrest of Huawei's chief financial officer is an extraordinary escalation in the trade war between the U.S. and China. Meng
Wanzhou is a public face of the company which sells more phones than Apple. She is also the daughter of Huawei's founder as well as the deputy
chairwoman of its Board.
[15:05:03]
GIOKOS: Now, the U.S. government views Huawei as a security threat. Trump administration has been urging the U.S. allies to stop doing business with
Huawei. Now, back in April it was reported that the U.S. was investigating if the company violated U.S. sanctions on Iran. We've got Samuel Burke
covering this for us here in London. What a dramatic development that we've seen coming overnight. I mean, the point is we've got this executive
that is really important arrested, sitting in Canada, waiting for extradition. What are you hearing?
SAMUEL BURKE, BUSINESS AND TECHNOLOGY CORRESPONDENT: This is exactly what the trade war did not need. We have to underscore here how important this
woman is, even though likely your viewers have never heard her name before, she is the woman who is really running the business, who is talking to the
investors.
We don't know her the same way we would know Jack Dorsey, but she is the daughter of the leader of this company, a former military engineer. She
goes out and she talks to these people. This is incredibly serious. Imagine if I told you that Tim Cook was under arrest in China, or a
neighbor, an ally to China or his daughter if he had one and she were part of the company.
Imagine the domestic political pressure that Donald Trump would be under, now think about Xi Jinping caught off guard by all of this. Keep in mind -
-
GIOKOS: It will be total diplomatic nightmare, I mean, the kind of scenario you're describing.
BURKE: Of course, and think about the fact that they were caught off guard by this means that what we're seeing today was just a quick initial
response. They haven't had time to think this through. So imagine what we could see in the next 24 hours. And that's why we see the markets jittery
the way they are.
GIOKOS: Do you think there's going to be some kind of retaliation?
BURKE: Well, it's interesting, we just heard from the top cybersecurity official of Canada, not even the United States, and he says they are
preparing for retaliation. So imagine what could happen then between the United States and China who are the actual two folks here who are in the
middle of a trade war.
GIOKOS: An extradition doesn't happen overnight. This is the thing. We don't know how long this executive is going to be in Canada.
BURKE: I'm told that typically this goes on for months and months, if not a year in Canada. So we don't think that she would be in detention for a
year, but she would be stuck there for a year. So if this exacerbates the trade war, imagine a trade war now where we are talking about a year window
when just this past week we were hoping that maybe things could start to cool down in the next week.
GIOKOS: We are talking about 90 days, I guess, in terms of the trade war or trade truce playing out. But Samuel, thank you so very much for those
insights. Now the Americans are opening up this new front in the trade war with China just as new numbers know that the war isn't going in Donald
Trump's favor at all.
Now, the U.S. trade gap jumped to a ten-year high, it's climbing for a fifth straight month. Michael Hirson served as the US Treasury's chief
representative to Beijing. He is now the Asia Director at Eurasia Group. Thank you so much, sir, for joining us. I mean, look, when you are looking
at the most recent developments and what we've just heard from Samuel, we don't know how long this extradition is going to take, we don't know what
the charges are and we've got this whole motion of a possible trade truce, which now is dead in the water.
MICHAEL HIRSON, ASIA DIRECTOR, EURASIA GROUP: Well, I wouldn't say yet that it's dead in the water. I think, look, there is no question, this is
very serious. I think the Chinese side is going to be fairly disciplined and I don't want to be overconfident here because we don't know, but I
think the initial response is going to be fairly disciplined in terms of linking this too directly to the trade talks.
The Chinese side has a lot at stake in looking to see if they can make this truce hold. So I think this complicates the politics, no question. And in
particular, it complicates the politics of making progress on the technology issues that are at the heart of this dispute, but I don't know
that this incident in and of itself will derail the trade walks. I don't expect it to.
GIOKOS: So do you think that Beijing is going to stick to its earlier statement this week that they are going to try to meet the deadline on
those 90 days despite the fact that this is a diplomatic problem that is playing out on the sidelines?
HIRSON: I do. I expect them to take this next set of negotiations quite seriously, but again, I think what it does for Beijing is it makes it a bit
more difficult for the leadership to make concessions to the U.S. side because of the - this is a highly motive issue. You know, as you pointed
out, this is the daughter of Ren Zhengfei, who is a household name in China, the founder of Huawei, and so it will make it difficult for the
leadership, I think, to make concessions to the U.S., it will complicate the politics, and then the technology issues which are a direct part of
this negotiation are going to be quite difficult.
The U.S. is asking China to move away from some of the policies that it's made to advantage its domestic firms like Huawei precisely at the time when
China realizes that this kind of action underscores the vulnerability of China to U.S. actions so it's quite difficult.
GIOKOS: And, Michael, we've heard Huawei saying that they did not break any rules.
[15:10:07]
GIOKOS: You know, Beijing has also been relatively vocal on the fact that they are trying to tow the line on any breaking of rules or sanctions or
any deal that was Obama-Xi deal that came through in the previous administration. But at the end of the day, when you're trying to negotiate
and you have got not only this arrest but also other arrests in the past, how do you sit around a table to find a solution to what possibly could
impact the entire world?
HIRSON: Well, I mean, I think this is a law enforcement action by the United States, I don't view this as part of the trade war, I view it very
much as part of the U.S. push back against China and an intensifying geopolitical competition between the two sides.
But there have been, as you noted, Huawei has been under investigation for quite some time, this is linked most likely to some aspect of the ZTE
investigation. So there's a degree to which the two sides are able to separate law enforcement issues from trade issues, at least in terms of the
practical aspects of negotiation, but in terms of the politics, it's all quite complicated.
And I think what we need to watch for next is what is the fate of Huawei? If this is just an individual reaction targeted towards this individual,
it's quite serious, but if this leads, for example, to the U.S. placing an export ban on Huawei as was the case with ZTE, this is going to be very
serious and it will have global ramifications because Huawei is quite active in the technology infrastructure in many countries, including in
Europe. So that's a really important watch point. Is this just this one case or what happens next really with the fate of Huawei more broadly?
GIOKOS: Thank you so much, Michael. Appreciate your time. Michael Hirson from the Eurasia Group. Now, still to come on "Quest Means Business," the
quest for oil, OPEC leaders meet for crunch talks in Vienna. Find out what's in the pipeline right after this.
Welcome back, so OPEC has failed to reach a consensus on cuts to global oil supply on Thursday. This leaves the cartel and its allies with just 24
hours to strike a deal that would shore up crude prices. However, signals from ministers are pretty much pessimistic, that's spilling into the
commodity market with drops in excess of around 2% for both Brent as well as US crude, WTI.
[15:15:04]
GIOKOS: Brent is hovering just above the $60.00 a barrel mark. In fact, it's down 2.3% today; and WTI crude also pretty much on the same level. So
our emerging market editor, John Defterios is in Vienna, Austria where OPEC has been meeting. John, it must be so fascinating sitting on the sidelines
and just hearing what's happening in that meeting. I mean, a little earlier we thought - we knew it wasn't going to be the 1.3 million barrels
per day cut, but it's interesting that they haven't actually committed to a specific number as yet.
JOHN DEFTERIOS, EMERGING MARKETS EDITOR, CNN: Yes, that is for sure. We saw losses, Eleni of better than 5% at one point in this session. This
seemed to be a fairly clear mandate, cut 1.3 million barrels a day, send a strong signal to the markets that they're cohesive, that this collaboration
between OPEC and non-OPEC players would still live, but Donald Trump has different designs and actually sent a tweet before they started the meeting
24 hours ago, so that set a very different tone.
So instead of 1.3 million barrels a day, Saudi Arabia came in with something more modest, about a million barrels a day and they didn't get
the agreement. They are going to come back tomorrow morning at 9:00 a.m., meet for an hour and welcome in the non-OPEC players to try to find common
ground. But listen to the tone of the Saudi Minister Khalid Al-Falih and his counterpart from Nigeria, Emmanuel Kachikwu right after the meeting
broke, fairly negative tone. Let's take a listen.
(BEGIN VIDEO CLIP)
DEFTERIOS: Do you have roughly a target here of close to one million barrels a day?
KHALID AL-FALIH, SAUDI ENERGY MINISTER: Probably, but still debating distribution and participation.
DEFTERIOS: Are you confident you have an agreement set for tomorrow, though?
AL-FALIH: No, I'm not confident.
DEFTERIOS: Wow.
AL-FALIH: I'm not confident.
DEFTERIOS: I posted to the Saudi Minister if he was confident you will get a deal by Friday, he said no. Do you feel the same way?
EMMANEUL KACHIKWU, NIGERIAN PETROLEUM MINISTER: No, I'm - well, begin what has happened today, I think we're fairly close within OPEC, however, still
we need to talk to non-OPEC now. Depending on what happens in non-OPEC, if we do not have some level of balance and some equilibrium mix then we could
have some difficulties.
(END VIDEO CLIP)
DEFTERIOS: Pretty blunt language here to finish up day one of OPEC. As suggested, they are going to come back in in the morning over breakfast and
try to iron out the details. Two challenges we have Eleni. Russia is kind of holding on to cuts of about 150,000 barrels a day, OPEC players like to
see that a little higher and Iran is furious because of the pressure coming from Washington. They even sent the special envoy to Iran from Washington
leaning on the OPEC players to provide more oil in the market in 2019, so they can put tougher sanctions against Iran. So this is pretty nasty as it
plays out in terms of OPEC history.
GIOKOS: So, John, I mean, at the end of the day we know that you've got to get the buy in from the Russians, from Nigerians, from a lot of the OPEC
members, the question is how much do we really need to see cut so that they can achieve their, you know, special level, the kind of goldilocks level
that they're after?
DEFTERIOS: Goldilocks price was targeted at $70.00 a barrel just a week ago, the influence of the U.S. on Saudi Arabia seems to be pretty prevalent
today. It's about unity or disunity and it seems like the Trump administration is looking for disunity. In fact, after 60 years we saw the
Qataris say basically we're leaving OPEC in 2019.
They insisted it was a not a political decision, but you know, their regional rival is Saudi Arabia, which produces 11 million barrels of crude,
Qatar just 600,000 barrels. They want to focus on gas. Let's take a listen to the Qatari Minister, Saad al-Kaabi.
(BEGIN VIDEO CLIP)
SAAD AL-KAABI, QATARI ENERGY MINISTER: For us, as I said, it's strategic again, but there are a lot of voices around OPEC and non-OPEC and a lot of
things that are happening and it's becoming very geopolitical in general because of what's happening, but, you know, the U.S. is a huge producer,
Russia is a huge producer, Saudi Arabia is a huge producer, we are not. We are a big gas player and we want to remain in that basically area.
DEFTERIOS: Do you see a breakthrough coming, though, between Saudi Arabia and Qatar with the invitation to the Emir of Qatar, Sheikh Tamim to the GCC
summit in Riyadh? Is this an ice breaker or are we reading too much into it?
AK-KAABI: I don't think it's an ice breaker. We haven't seen, I think, moves from Saudi at least for me in the oil and gas industry, I haven't
seen any moves that showed me that there was willingness to come closer or to find a solution, but I hope that that suggests that that would be an
opener and we hope for the GCC to come back like it used to be, it was a very strong unity for the region, it's very good for the families and
people in the region, but what they have done is damaging to the region.
(END VIDEO CLIP)
[15:20:02]
GIOKOS: All right. Thank you so very much for this, John. And of course, we will be watching up with you tomorrow. I hope you will have a little
bit of clarity on what OPEC decides. All right, so 1.5 degrees if the earth's temperature rises any more than that, the result could be
disastrous. Nations gathering in Poland this week are working to keep global warming under 2 degrees, but experts warn that the target may not be
ambitious enough, so above 1.5 degrees over pre industrial levels, the impact of climate change grows exponentially.
CNN is exploring the consequences of past inaction and how - what comes next could be much worse if warming doesn't stop at that critical
threshold.
(BEGIN VIDEO TAPE)
MARK RUTTE, DUTCH PRIME MINISTER: It's simply no alternative. There is absolutely no alternative. If we are not going to achieve this, we as
mankind have a serious problem on our hands and what I sense all over the world, I was in Colombia last week speaking with the President Duque, I was
in Argentina at the G-20, I was now here - I am now here in Katowice at this Climate Summit. I see it all over the European Union, all over the
world. It's a huge sense of urgency. We have to deliver. That means for the European Union that we have to step up our commitments.
Already we are delivering more at the moment based on what we have achieved, agreed to, we are delivering more than what was the target during
the Paris Climate Summit three years ago, so we are improving on that. We see that China and other big economies are holding on to their targets in
terms of the climate change goals and ambitions.
So I do believe that they are still achievable, I also do believe that there is no alternative. We all as citizens of this world cannot only
benefit from this because we will survive, but also because our economies will thrive, because it will create new jobs, we will be less dependent in
terms of our fossil fuel at the moment from countries from which we do not always want to be dependent upon. So there are many geopolitical and
economic reasons also to do this.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Can it be done? I mean, are you aiming at a target that is simply not possible in the time frame,
however dire the consequences?
RUTTE: It can be done. There is no doubt, because when you look, for example, at European commitments at the moment, we will deliver based on
the existing commitments, a 45% reduction. So I believe we have to push it up, nudge that up to 55%. That can be done. When we look at the worldwide
ambitions, the most important thing now is to agree on what we famously call this rule book where it makes it comparable and measurable and very
transparent where countries are really doing what they have said they would do. That is exactly what we are doing in Katowice. We try to stimulate
each other to increase our overall ambitions whereas, at the same time, working very hard to make sure that those ambitions will be kept
measurable.
QUEST: You are not helped when the President of the United States says he's not a believer. Last week clearly, he said he does not believe in
climate change in the way that the rest of you do. So are you not hobbled with one step forward, four steps back, when the leader of the United
States doesn't seem to want to take part?
RUTTE: Well, it is true and we have to take into account that the new American president, the new American administration is having a different
view and policy on climate change than the previous one and we have to accept that. That's the sovereign right of President Trump and his
government and his administration.
At the same time, when we look at many states in the United States, when we look at many cities, when we look at many industry sectors being
responsible for the largest parts of CO2 emissions, they want to uphold the ambitions.
So I do think that the United States will still be able to deliver large parts of its commitments, at the same time we see that China luckily is
holding on to its commitments coming out of the Paris Climate agreement. So, yes, this is not helpful, but at the same time I still think we can
achieve what we want to achieve even with this new policy of the American president in place.
(END VIDEO TAPE)
GIOKOS: All right, so stern warnings there, but we're going to a very short break. When we come back, more "Quest Means Business." Don't go
anywhere.
[15:25:57]
GIOKOS: Hello, I'm Eleni Giokos. There's more "Quest Means Business" in a moment. When more on the arrest of a Huawei executive, which has sent
shivers across the market, plus the Deputy French Tourism Minister tells us why we should still visit Paris despite the recent violence in the city.
Before that the headlines this hour.
A final farewell for America's 41st President. Friends, family and other mourners paid tribute to George H.W. Bush today at the memorial service in
Houston, his adopted hometown. Mr. Bush was remembered as a man of humility, honor and humor, and praised for his lifetime of service.
After the funeral service Bush's casket was loaded on to a train, it's now on its way to the campus of Texas A&M University where the Bush
Presidential Library is located. Bush will be buried there next to his wife, Barbara.
Now for the first time in two years the internationally recognized government of Yemen is at the negotiating table with the Iranian-backed
Houthi rebels, U.N. brokered talks under way in Sweden and a positive sign the special envoy said the warring sides agreed to a prisoner swap as a
confidence building measure before the talks.
A UK Parliamentary committee has released hundreds of internal Facebook e- mails showing the social media giant targeted the video app called Vine. Facebook moved to restrict Vine's access to its user data on the day it was
launched in January 2013. Facebook says the move was in line with its then policy on competitors.
So Chris Hughes, one of the men who co-founded Facebook alongside Mark Zuckerberg says some of the company's recent decisions have been, quote,
"reprehensible." A little earlier today, I spoke with Hughes about the string of scandals at the company he helped create.
(BEGIN VIDEO CLIP)
CHRIS HUGHES, CO-FOUNDER, FACEBOOK: I'm watching it and I think like you and probably many of your viewers are trying to keep up. I mean, it seems
like every single day, there's some new revelation, there's some new headline about what either Mark Zuckerberg or the leadership team over
there has done.
And, I mean, particularly in the past few weeks, I mean, so much of this -- of these decisions have been reprehensible. I mean, the memos, the
research, I don't have to make a list. The question is how is Facebook and the leadership there going to turn the page?
I think that they do need a fundamental reset to regain trust from not just the market and investors, but from users because there are big questions
about some of the decisions that have been mad. And, you know, the clock is ticking and, like a lot of people, I'm watching to see what happens next
because it's clear something has to.
GIOKOS: Yes, Chris, do you think it's veered off course? Do you think that when you're talking about change and they've got to act fast, it means
leadership change and who would that then be?
HUGHES: I mean, I think leadership change is certainly something that a lot of people are talking about. I'll let Mark Zuckerberg and the Facebook
board decide what they want to do in terms of leading their own company. But there has to be accountability.
I mean, this idea that no one can be held accountable in the long run, not just for the issues that have cropped up recently with privacy, but also
for the election meddling that happened in 2016. They're making a lot of efforts to change things, but the problem is, the message that they're
sending is getting transformed by the fact that there are these new revelations every single day.
So I think it's time to pause, to have a reset and to truly embrace the transparency that I know Mark and many people over at Facebook believe is
so critical to the mention -- to the mission of the company.
(END VIDEO CLIP)
GIOKOS: All right, so returning to our top story tonight, the U.S. has opened a new front in the trade war with China. The CFO of Huawei; the
Chinese firm that sells more phones than Apple has been arrested in Canada at the request of U.S. authorities.
It sent global markets falling, creating new doubts about any truce between Washington and Beijing. Samuel Burke has more.
(BEGIN VIDEOTAPE)
SAMUEL BURKE, CNN BUSINESS & TECHNOLOGY CORRESPONDENT (voice-over): Global markets are trembling, a wild card has been thrown into the U.S.-China
trade war.
Huawei's Chief Financial Officer is facing charges in the U.S., potentially complicating sensitive talks to end the trade war. Meng Wanzhou isn't just
the Chief Financial Officer of Huawei, one of the largest telecom companies in the world, she is the face of the company, the daughter of Huawei's
founder and many see her as the heir apparent. Now just when it seemed like the trade war may cool down --
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: China has been terrific, President Xi has been terrific --
BURKE: Meng has been under arrest in Canada since Saturday at the request of the American government. So far China's response has been very
measured, merely asking the U.S. for an explanation.
UNIDENTIFIED MALE: This very much caught them by surprise, and so they're probably formulating what is the best way for us to move forward.
BURKE: Huawei says Meng faces unspecified charges in the U.S. In April, the "Wall Street Journal" reported that the U.S. Justice Department was
investigating whether Huawei violated U.S. sanctions on Iran. Huawei says it complies with all applicable laws, regulations and sanctions where it
operates.
Adding "the company has been provided little information regarding the charges, and is not aware of any wrongdoing by Ms. Meng."
UNIDENTIFIED FEMALE: Right now, we are seeing steep losses across the globe.
BURKE: Fears the arrest could open a new front on the trade war, the Eurasia Group writing," this type of action will affect the atmosphere
around the negotiations, making them less likely to bring a sustainable settlement."
Tech stocks among those bearing the brunt of the selling Thursday. Huawei isn't a public re-trading company, but its suppliers stocks plunged on the
news. Markets are concerned if China perceives the U.S. moves as political, it could retaliate.
UNIDENTIFIED FEMALE: Is it a coincidence the market right now is arguing it wasn't.
BURKE: Huawei and Apple are fierce competitors, and this year for the first time, Huawei moved ahead of Apple to become the second largest
smartphone maker in the world. Even though Apple has major exposure in China with around 20 percent of its revenue coming from there, making one
of America's most valuable companies a prime target.
(on camera): What happens next all hangs on what moves Washington and Beijing make next. Canada may well extradite Meng to the U.S. and China
could retaliate. The stakes are incredibly high. Samuel Burke, Cnn Business.
(END VIDEOTAPE)
GIOKOS: All right, so three appeal judges have questioned the U.S. Justice Department as to why they should overturn a lower court's approval on
AT&T's acquisition of "Time Warner"; the parent company of Cnn. Jessica Schneider joins me now from Washington. She was at the hearing, hearing
that we went over the hour that was actually allocated.
[15:35:00] Aggressive questioning that came through. Do we know which way the argument is heading?
JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: We don't, we can only speculate here. You know, but this was round two of that fight between the
Justice Department and AT&T. DOJ attorneys did argue their case for 40 minutes, that was double the time they were allotted, all because that
three-judge panel they kept grilling the government on its arguments.
So remember the Justice Department lost its first challenge to AT&T's acquisition of "Time Warner" back in June, and the judge in that case
heavily criticized the DOJ for even suing to stop the merger in the first place. Well, the judges in today's appeal, it's fair to say they also
expressed skepticism for the arguments that AT&T would raise prices for "Time Warner's" content which does include Cnn and "Hbo" and "March Madness
Basketball".
And the judges today also pointed to an arbitration offer that "Time Warner" extended even before the merger where they promised not to black
out its programming from other cable companies. But then on the flip side, the three judges were much more deferential to AT&T's attorney, they
asked far fewer questions there.
So Eleni, the question is how will these judges come down? We won't know for quite some time. In appeals courts, these judges seem to take a while
to issue their opinions, but they are up against a deadline at the end of February here. We're expecting we'll hear something before then.
You know, it's probably fair to say these judges seemed much more on the side of AT&T, but we'll have to see what comes out. Eleni?
GIOKOS: Yes, it could go either way, thank you so much Jessica Schneider standing by for us in Washington. So now, coming up, the famous Eiffel
Tower is shut, national football games have been called off, so should we still go to Paris? The deputy Tourism Minister tells us why we should,
next.
(COMMERCIAL BREAK)
GIOKOS: Welcome back. So France is shutting down some of its biggest attractions as the government warns of major violence on Saturday. With
nationwide protests show little sign of easing, iconic landmarks like the Eiffel Tower, the Paris Opera as well as half a dozen major museums will be
shut this Saturday and at least four major football matches will also be postponed at the request of local authorities.
Now, the ongoing violence and destruction will be a familiar sight to many French residents. Since the storming of the Bastille more than two
centuries ago, the French Republic has had a long and very turbulent history of protests and revolution. Jim Bittermann takes a look.
(BEGIN VIDEOTAPE)
[15:40:00] JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): Forty-year-old Emmanuel Macron is the first president of France with no direct memory of what happened on the streets here in May of 1968,
but many of those around the young leader recall graphically what took place back then and the consequences.
On the surface, the violent scenes of the protests that have taken place here look a lot like the scenes from 50 years ago. The street barricades,
burning cars, running battles between police armed with tear gas and protesters armed with cobblestones, all are signs in France that public
anger has reached a boiling point.
That people have had enough. Today, Laurent Joffrin today, editor of the left-leaning newspaper, "Liberation" was a university student in 1968 and
confronting the police on the streets.
LAURENT JOFFRIN, EDITOR, LIBERATION NEWSPAPER: It's France, you know, France is a country where you like rebellions, demonstrations, so that's a
cultural thing. And the fact that the government is lost, it was the same in mid '68, in front of a revolt that they didn't force it all and don't
understand in the first place.
BITTERMANN: While the '68 protest started in the universities, and today's began with higher prices at the gas pumps, both then and now, localized
demonstrations quickly spread throughout the country. Common to both as well was a growing sense that the government was having a difficult time
getting a handle on the situation as more and more groups joined in.
But a well-known French journalist who was a researcher for "Nbc News" back in 1968 says there are major differences today.
CHRISTINE OCKRENT, FRENCH JOURNALIST: First of all, the internet, the social media, the fact that this movement is amorphous, no leaders, the
very few people who come out immediately receive threats from the others, so it's very dangerous. The other dimension is that trade unions are
completely out, political parties are completely out.
BITTERMANN: Just like 1968, though, the demands of the protesters have broadened as the protests have worn on. Demonstrators demanding more and
more, and now just like in '68, some want the president to resign, even though he was democratically elected just 18 months ago.
President Macron's government has now made compromises, but is still trying to identify a leader of the grass-roots yellow vest movement to accept
them. Still looking for an exit strategy.
Back in 1968, President Charles de Gaulle faced a country paralyzed in protests. He decided to suddenly leave the country without telling anybody
where he was going or when he would come back. After a day of political uncertainty and high drama, he returned to make major concessions to the
protesters, dissolved the parliament and called for a new election, something that just strengthened his hand.
Macron is a committed follower of de Gaulle, and like de Gaulle, he has had to make major concessions to diffuse the threat from the streets, but just
like in 1968, it may take even more to avoid further chaos. Jim Bittermann, Cnn, Paris.
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GIOKOS: So an extra 65,000 police will be deployed to the streets of Paris this Saturday to help quell the expected violence. All this spells
disaster for France's all important tourism industry. A little earlier today, I asked the country's deputy minister for what tourism -- what he's
going to do to mitigate the impact on the French economy.
(BEGIN VIDEO CLIP)
JEAN-BAPTISTE LEMOYNE, DEPUTY MINISTER OF TOURISM, FRANCE: In terms of tourism, we were happy to see that there is no extreme consolations. And
so we are dealing with our professionals because, you know, all this week along, people were able -- tourists were able to shop in Paris, to visit
our museums are open, our transportation system is safe.
So of course, we have to deal with the image of the riots, but my message is clear, tonight as you can see behind me, people are safe, are shopping
and we are organizing everything so that next Saturday will be the safer day because, of course, we have to provide absolute security and calm, is
I think coming on.
GIOKOS: That's interesting, it's calm before the storm perhaps because Friday, tomorrow, on Saturday, this is when the riots and the protests are
going to start once again, and, in fact, as a preventative measure, you've actually shut down the Eiffel Tower on Saturday.
[15:45:00] You're also postponing key football matches that are happening in Paris as well as Toulouse. What message are you sending now to tourists
when you're taking such drastic measures, and of course, you're adding 65,000 more security forces on the ground?
LEMOYNE: Yes, the message is that we care about tourists. So we care about safety, and so we put all the measures we can in order to provide
safety. So that's why, of course, this Saturday will be a special one. But now, you know, the government has considered its measure on fuel tax.
So it's now a start for a dialogue. And now many prominent people from the -- from the corporations, from the business, from the politics, whatever
they are engaged are calling for quiet and peaceful demonstrations and are facing against violence.
So of course, I think that Paris remains (SPEAKING IN FOREIGN LANGUAGE) and Paris remain very attractive for this month of December, and we are --
GIOKOS: Yes --
LEMOYNE: Managing everything so that Paris remains safe.
GIOKOS: OK, so you've already got a lot of word from retailers on the ground that are saying that business is down between 20 percent and 40
percent. You've got the likes of restaurants talking about 50 percent drops in business. This is going to have a significant impact on the
economy and I'm wondering if you're seeing that filtering-through in the tourists numbers.
Are people canceling flights to Paris? Are they canceling trips? What are you seeing happening? And I know you're calling for calm, but that's not
what the protesters want right now, they want their demands to be heard.
LEMOYNE: Yes, hopefully, we had a good year in terms of tourism because, you know, December is only 5 percent to 6 percent of the total turnover in
terms of tourism, but I know that some shops and retail sectors of course are affected because people are preparing Christmas and December is crucial
for them.
You know, December is a month that is the double from a normal one in terms of business for them. So we are ensuring that they can open on Sundays,
what is not authorized everywhere in every case usually, but we are doing that so that they can have other business during these Sundays in order to
recover quickly because, of course, retail is important for the country.
(END VIDEO CLIP)
GIOKOS: All right, so coming up next, one of these public figures has been crowned "Forbes" most powerful woman. "Forbes'" executive vice president
joins us to reveal who reigns supreme right after this break.
[15:50:00] (COMMERCIAL BREAK)
GIOKOS: Welcome back. So "Forbes" has released its annual lists of the world's most 100 powerful women. Now, in third place, we've got Christine
Lagarde; Managing Director of the International Monetary Fund, number two goes to Theresa May; Prime Minister of the U.K., and embroiled in a very
hard negotiation right now in terms of getting a deal done on Brexit.
Then we've got the first place Angela Merkel of Germany, Chancellor of Germany, and she's actually been at the top eight times in a row, which has
held this position before. So she's been on this list many times over. So "Forbes" says these women have huge influence in a tumultuous time, and
that as leaders, they're challenging the status quo as well.
Joining us now in New York City, we've got Moira Forbes; Executive Vice President at Forbes Media. Moira, looking at this top three lists, what do
these women have in common? We know Angela Merkel is about to walk away from her political career basically, we've got Theresa May sitting in a
very difficult position trying to convince her constituents to agree to a Brexit deal. It seems like a really tumultuous time for the woman right at
the top.
MOIRA FORBES, EXECUTIVE VICE PRESIDENT, FORBES MEDIA: And indeed it is. I think what we're seeing is that the collective power women around the world
has never been higher, but for the top three women on the list, they're navigating some of the most tenuous and difficult political and geo-
economic times.
And while Merkel's power is obviously on the wane, she is still the head of the fourth largest economy, still has prestige on the world stage. May is
going through literally a political make or break moment where in a matter of days, her power could be either cemented or toppled on the world stage.
And Christine Lagarde given the backdrop again of many troubled economies around the world. Her power is on the rise as the IMF is stepping in to
help aid currencies and economies around the world. And so their power is huge, but it also is potentially in peril given how tenuous the landscape
is today.
GIOKOS: Exactly, I mean, peril and power, that seems to be quite a big theme. And I know you've written about this before, but what is it about
putting women in power in times of crisis and we've seen this coming through for General Motors as an example.
We've seen it coming through in the past with Yahoo and the likes of Marissa Mayer as well. Is this setting women up for failure in some way,
do you think it was because women are able to solve really difficult -- find really difficult crisis, find a way out of these difficult crisis?
FORBES: I think it's a confluence of a number of different factors. I think when there is a crisis, there is a power vacuum and an opportunity
for leaders, particularly untraditional or outside of conventional thinking to rise, and I think women bring unique skill sets to the table.
In those tenuous times where there are team building, consensus and the like, and so we do see women coming and rising to the top when their male
predecessors have had issues and have fallen off the power cliff. But today, power is tenuous, it has always been, but it's never been more fast
paced.
And what you'll see with this year's list is that a lot of the power of the women who have reigned supreme on the list for many years is at play.
GIOKOS: All right, thank you very much for that insight, Moira, much appreciated for your time. So we're minutes away from the closing bell,
stay with us for a market recap right after this.
[15:55:00] (COMMERCIAL BREAK)
GIOKOS: All right, welcome back. So as we approach the dying moments of today's trading, the Dow has actually rebounded from today's lows as you
can see, we're down around 104 points, down around half a percent in today's session, the big drop was stoked by fresh uncertainty over that
trade truce between the U.S. and China, which of course deepening following the arrest of that executive at the Chinese tech giant Huawei.
And we know that U.S. traders returned to work today after a day of mourning for former President George H.W. Bush. And don't forget that we
saw big losses a little earlier in the week, 800 points down for the Dow on Tuesday, and again red across the board, it's the banks that have been
coming under significant pressure.
We've also seen the tech stocks been taking quite a big knock, and we're down 101 points on the Dow. Let's take a look to see how the European
markets have been faring in today's session, it's pretty much the same picture, red across the board as well.
And we've seen massive drops. I mean, you've got the FTSE 100 down over 3 percent, the Dax in Germany 3.5 percent, we're worried about Brexit, we're
concerned about Paris riots, of course, the big talk about China as well as the United States.
Trade truce or trade war that is going to be playing out in the next -- while, of course, you also had OPEC not coming up to a meeting today and
making a decision about whether they're going to be cutting supply and at what level.
They were initially talking about 1.3 million barrels per day, it seems that they haven't reached consensus as yet. And of course, as adding
further uncertainty and further pressure on to the markets as a whole where you've got a slower, global growth environment that of course is
exacerbating what investors and traders are feeling on the floors of these exchanges.
Volatility is higher, you've got bond yields that are wreaking havoc on people's minds as well. And just a couple of seconds to go before we see
the Dow finally closing off for the trading day. And remember, many people are concerned about where the Dow is going to close for the end of
the year.
We're down around 3 percent year-to-date, and in fact, the European markets are back to levels that we last saw in 1999. So people are not feeling
very happy. That's it for QUEST MEANS BUSINESS, I'm Eleni Giokos, "THE LEAD" with Jake Tapper is next.
(COMMERCIAL BREAK)
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