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Quest Means Business
Trump Tells Intel Chiefs to Go Back to School; Seat Cushions Believed to Be from Sala's Plane Found; Dangerous Cold-Snap Puts U.S. Midwest in a Deep Freeze; Protests Reignite in Venezuela as President Trump Speaks with Self-Declared President Juan Guaido; Oil Prices Rise Amid Crisis in Venezuela; Saudi Finance Minister: We Want to Be Catalyst for Stability; Howard Schultz Mulls 2020 Presidential Run, Slams Democrats Tax Plans; Progressive Democrats: Schultz Trying to Buy Presidency; Virgin and Under Armour Team Up on Space-wear; Stocks Surge on Earnings. Aired 3-4p ET
Aired January 30, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ZAIN ASHER, ANCHOR, CNN: Take a look. The Dow is above 25,000. There it is. Around 500 points or so with just an hour left of trading today.
Let's get you more on what is moving the markets on Wednesday, the 30th of January.
The Fed tries a little patience. Markets rally on its latest statement. A is for Apple and B is for Boeing and C is for celebrating as earnings come
up big. And the U.S.-China trade talks are under way in Washington while more companies take a hit from the Chinese slow down.
Hello, everyone, I'm Zain Asher and this is "Quest Means Business."
You just saw that the Dow is up pretty much 500 points or so. As I mentioned, we are in the final hour of trading. Investors are reacting to
solid earnings and the Federal Reserve's rate decision as well. The Dow is up 524 points or so. You can see a spike, a spike that happened roughly
around 2:00 local time, just one hour ago when the Fed actually announced it would be cautious with future rate rises.
That is exactly what investors wanted to hear. The Fed Chair is speaking now. We'll tell you what he said in just a moment. But first, let's talk
a little more about earnings. Just two stocks are driving half of the Dow's gains. Boeing up almost 7% there. Apple also up 7%, slightly more
than 7%.
Expectations were low in terms of Apple. Both companies are heavily exposed to Chinese slowdown - China's growth slowdown. Paul La Monica has
been digging into the numbers for us. So Paul, let's start with Boeing. Because what's interesting is that their revenue reached - I mean, it was
record breaking, essentially.
PAUL LA MONICA, CORRESPONDENT, CNN: Yes, over $100 billion for the year.
ASHER: Over $100 billion, absolutely, record breaking. But they are exposed heavily to China. Just walk us through how they manage to do it.
LA MONICA: Yes, they are exposed to China, but right now, Zain, they are benefitting from the fact that aircraft - air carriers in China and around
the world are all upgrading their fleets. And as a result of that, Boeing is gaining a lot of ground over Airbus. They have gained market share
against Airbus as carriers are buying the fanciest new Boeing 737 Max planes and that is really helping this company.
An increase in defense spending is helping as well. Remember that NATO is going to be kicking in more money for global defense and I think that is
something that helps Boeing also. But obviously, the boom in the airline industry right now is the biggest driver of growth of Boeing.
ASHER: And it's interesting, because you and I were just talking a second ago and it doesn't seem as though there has been a reaction in terms of the
short-term. Obviously, what's happening in China in terms of slowdown of growth is a longer term issue. Could things change for Boeing down the
line?
LA MONICA: it's possible, depending how long trade tension lasts with China, and whether or not the Chinese government and Chinese carriers have
to cut back. But I think right now, the big difference is that Boeing because of these long-term contracts, they are more immune to some of the
day to day, month to month, quarter to quarter economic gyrations in China.
Apple, obviously, not as much. Big slow down in China. Consumers aren't buying as many iPhones, but the beauty, if you want to say that, what Apple
has done is that Tim Cook learned from a lot of other CEOs and said, "Hey, you know what, we're going to get this bad news out of the way." And they
set the bar lower and they beat by a penny. It kind of reminded me of the old Jack Welch GE days. And Apple is now surging because the results
weren't as bad as Cook led them to believe just a few weeks ago. It's that we're --
ASHER: Right, it's interesting that Apple does need to get its house in order in terms of iPhones and getting people to buy iPhones more
frequently. They also mentioned currency head winds being a problem for them as well, particularly in places like Turkey. Paul La Monica live for
us there. Thank you so much.
Okay, so the Dow hit its highs of the day in the moment after the Fed announced its rate decision. As expected, policymakers kept rates
unchanged. In a statement, the Fed said it would be patient. It would be patient with rate rises and is prepared to use a range of tools to steer
the U.S. economy.
Moments ago, the Fed Chair said policy makers were reacting to economic data and political developments like for example, the U.S. government
shutdown, trade discussions and Brexit. I want you listen to what was said.
(BEGIN VIDEO CLIP)
JEROME POWELL, CHAIRMAN, U.S. FEDERAL RESERVE: Today, the FMOC decided that the cumulative effects of those developments over the last several
months warrant a patient wait and see approach regarding future policy changes.
In particular, our statement today says in light of global, economic, financial developments, and muted inflation pressures, the committee will
be patient as it determines what future adjustments to the target range for the Federal funds rate may be appropriate.
(END VIDEO CLIP)
[15:05:07]
ASHER: To help us make sense of this, Mohamed El-Erian, the Chief Economic Adviser at Allianz. Mohamed, thank you so much for being with us. So, the
Fed obviously decided to hold the Fed funds rates steady between 2.25% and 2.5%. What does that tell you about their assessment of the sort of
general economic environment?
MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ: So their assessment of the general economic environment is that the balance of risk has shifted to
the downside. And what they did is they delivered exactly what the markets were looking for.
Two things in particular. Like you said, patience on rates. And secondly, flexibility on balance sheet reduction. Gone, completely gone is the
notion that was stated just a few weeks ago of the reduction being on autopilot. You know, when investors hear these two things, markets react
in a textbook fashion. Higher stocks, lower interest rates and a weaker dollar.
ASHER: So overall, how optimistic is the Fed about the state of the U.S. economy specifically?
EL-ERIAN: So I think they remain optimistic and for good reason. The labor market is very strong. We've got another indicator today that
surprised on the upside in terms of job creation. Last week, we got the lowest jobless claim in almost 50 years. So the U.S. economy is in a good
place. Yes, growth is going to slow because of the partial government shutdown, but that's got to be temporary and reversible.
The concern has been spilled back from weaker momentum in Europe and in China.
ASHER: So really, weaker momentum around the world just in terms of slowdown in global growth, and also volatility in the markets really forced
Jerome Powell to look and say, "Listen, it's important for us to brace ourselves and be more patient." Remember patience was really the buzzword
today.
EL-ERIAN: It is, and I think of the Powell-led Fed having learned what the Bernanke-led fed learned, what the Yellen-led Fed learned, which is when
push comes to shove, markets lead the Central Bank, not the Central Bank leading markets.
They tried to lead markets. And the result of that was a very messy selloff that risked contaminating the economy. Now, we're back to the old
regime, and what you're going to hear over and over again in the markets is the notion of a Fed put, that the Fed is there to support us. And that's
why stocks are doing so well in response to the statement.
ASHER: So let's talk about earnings. Obviously, we're in an earnings season and there are fears about sort of companies that are heavily exposed
to China.
Four companies that are exposed to China. I mean, obviously, Boeing did very well despite their exposure to China, but for companies generally that
are exposed to China, is winter coming, essentially?
EL-ERIAN: It's certainly going to be colder. You saw that in the Apple result. It's going to be in the Caterpillar - be careful Boeing, because
Boeing has lagged orders. So you don't see an immediate response. The Boeing results were terrific, but I wouldn't read too much into what they
tell you about China.
I think that the ones that are exposed to China at a high frequency basis are sensing weaker demand, and Apple said so very explicitly yesterday.
ASHER: Do they need to look at other emerging markets again? So for example, Apple obviously being heavily exposed to China. Do they need to
look at countries like India for example, that also have high - sort of high density population as well for future gains?
EL-ERIAN: Absolutely. I think that this is serving as a reminder, of don't over rely on China. China is a very big market but you don't want to be
overexposed to China. You should look elsewhere, Brazil, India, Indonesia, there are lots of other possibilities. And I would diversify among the
emerging economies and I think most companies are trying to do so.
ASHER: All right, Mohamed El-Erian, live for us there. Thank you so much. Appreciate that. All right, trade negotiations don't come much bigger than
this. Representatives from the world's two biggest economies, the U.S. and China are meeting in Washington for talks aimed at ending their every
expensive, very costly trade war.
Chances of a quick resolution to the trade crisis are regarded as pretty slim, we'll see what happens, but they are regarded as pretty slim. Deep
divisions remain over issues, for example, like intellectual property, protection and cybercrime as well.
For the companies caught in the middle of this trade war, a resolution cannot come quickly enough. A list of big corporations reporting damage in
their business in China is growing by the day. Ford's main joint venture partner in China say the sales have more than halved this year - more than
halved this year.
[15:10:00]
ASHER: Shares in Tupperware were down nearly 30%, at one point today, after it said Chinese consumers were souring on food shortage projects.
And on Tuesday motorbike maker, Harley-Davidson said tariffs would cost the company up to $120 million this year.
Christina Alesci is joining us live now. So Christina, just walk us through what is at stake here? Obviously, the threat - what China does
really desperately wants to avoid is that 25% tariffs and $200 billion worth of Chinese goods. But just walk us through what is at stake for
either side.
CHRISTINA ALESCI, CORRESPONDENT, CNN: So in the immediate term, you're right. More tariffs or a bigger number tariffs on Chinese goods coming
into the U.S. is immediately on the table and at risk.
But bigger picture here, what we are talking about is a potential slowdown in economic growth. Oxford Economics came out today and said if this trade
war persists, we could see global growth dip down below 2%, which would not be good for companies in China or in the U.S. or anywhere around the world
really, so that is what is at stake.
And to your point, the administration, what I am hearing from sources is really trying to lower the bar on expectations. They are trying to manage
expectations as far as what happens this week. In other words, we're not going to get to Friday and have a magical deal. Nobody believes that and
the administration officials I am talking to are trying to manage those expectations as well and say, this is only a step in the process. We're
going to probably negotiate right up to that March 1st deadline.
ASHER: And how much division - when you think about Robert Lighthizer, Wilbur Ross, Steve Mnuchin, Donald Trump himself, I mean, how much division
is there with the administration about how to handle China?
ALESCI: So you've identified the major obstacle to getting a deal done. It's really this disagreement among officials in the Trump administration;
on the one hand, you have Peter Navarro, who is a trade hawk telling the President that the U.S. should not concede unless the Chinese make these
big concessions, these structural changes to their economy, promise to stop stealing technology, promise to take down nontariff trade barriers.
And on the other hand, you have Steven Mnuchin at Treasury arguing that this will cause an enormous dent to the global economy and that a trade
deal has to be done.
So until the U.S. team comes together and decides how it wants to handle China and what it's willing to accept, it's kind of hard to see how they
can negotiate as one force against the Chinese.
ASHER: Right. I mean, they do need to come together and have an agreement in order to actually sort of make sure that they negotiate the right way
with the Chinese from the U.S. perspective.
But let's talk about Foxconn, because it has been a favorite talking point for the President, in terms of boosting U.S. manufacturing. But that
narrative might not be as accurate as people had anticipated.
ALESCI: So this deal is very interesting. Because it's one of the deals that the President touted as an example of what a great deal maker he is.
He was bringing a Taiwanese electronic manufacturer. He convinced them to come here and build a plant in Wisconsin to revive U.S. manufacturing. And
this was supposed to bring 13,000 mostly manufacturing jobs to America.
Well, now today, we get news that it may not be manufacturing jobs, it may be a tech hub, and that is going to involve researchers and engineers, not
exactly the kind of jobs that the administration promised.
Look, I've been all around the country talking to manufacturing workers, factory workers who really voted for Trump on the promise of bringing
manufacturing jobs back. He hasn't done that in the way that he promised. But the thing is, what's interesting is that these voters will still stick
by him because he's saying the right things and he's at least vocally standing up for them, and that's what they want to hear.
But this particular deal is very much in the spotlight because it was hailed as, you know, more to come, as a bright, shiny object for
manufacturing jobs here in the U.S. and it doesn't seem to be panning out that way.
ASHER: For Trump, I mean, he has reiterated that keeping his campaign promises is hugely important to him. But what you're saying is that this
might not actually be a huge problem for him come 2020?
ALESCI: That is the remarkable thing that when you get on the ground and you talk to these workers that you consistently hear, we know it's hard.
They give him this sort of out, we know it's hard to do this, we know it's hard to change the system. But as long as he's saying the right things and
as long as he is giving us a voice, we're there to support him.
ASHER: Very interesting. Christina Alesci, likewise, thank you so much. Good to see you.
ALESCI: Of course.
ASHER: Apple is putting the screws to Facebook after new revelations about a controversial app that Facebook distributed to track users' activity.
Facebook paid users, including teenagers - teenagers - up to $20.00 a month to install its Facebook research.
That according to "Tech Crunch," the app may have had access to information like private messages, web searches and location data.
[15:15:03]
ASHER: This wasn't an app you would find in Apple's App Store, instead as you can see in this screen shot from "Tech Crunch," Facebook distributed it
using Apple's enterprise program. That program exists for companies to distribute internal apps to their employees. Apple has responded by
blocking all of Facebook's internal apps from launching on Apple devices.
Samuel Burke is standing by with a reaction from Apple and Facebook. First though, we want to hear from you. Get out your phones and go to
cnn.com/join. Our question today for you, would you give Facebook access to your browsing history, private messages and location data if Facebook
actually offered you $20.00 a month? Cast your vote at cnn.com/join and we'll discuss the results in just moment.
But first, Samuel, just walk us through exactly how this research app works?
SAMUEL BURKE, BUSINESS AND TECHNOLOGY CORRESPONDENT, CNN: Zain, it's quite interesting and the app is called Facebook Research. So Facebook is saying
we were very obvious in what we're trying to do, at least, that's their defense. What's interesting this uses something called root access.
That means it can go deeper into your phone to get exactly the type of information you were talking about there, like private messages. The thing
is Facebook had tried this once before. If you look at the code in this app, it's very similar to an app called Onavo, which Apple had previously
banned.
After this was discovered, Apple said, "You're not allowed to have this type of app doing this type of activity," and they booted it. Same thing
they have done again here today.
But what's interesting, you could say, well, why is Apple allowing those types of apps into their store? Don't they check these type of things
first? Now, Facebook on the one hand, a lot of the times, people have said, why don't they take people instead of taking our data, instead of
using advertising? In one sense, you could say, well, at least they are paying people for their information here.
But the fact that it was for teens in some parts, may have some people feeling somewhat uncomfortable. But I just want to put what Facebook says
about all of this, they are not falling on their sword, at all, Zain, they are saying, "Well, this is an app that was obvious." And they go on to
say, "Key facts about this market research program," they call it, "Are being ignored. There was nothing secret about this. It wasn't spying as
all of the people who signed up to participate went through a clear on boarding process asking for their permission and were paid to participate."
Incredible. All of the privacy scandals that Facebook has, data scandals, yet, they have been able to move forward until this last year, it finally
built up for them, and we know they have their earnings coming up. I'll be interested to see if all of this has added up and if people are using it
less. What I did this year is my New Year's resolution, Zain, I just moved Facebook to the last page, so I'm not so Facebook addicted. I didn't
delete the app, but I thought it to be much healthier this way. I am using it less.
ASHER: It's so funny, I'm hearing a lot of people say the same thing that they have been so concerned with all of Facebook's privacy issues that they
are trying to wean themselves off the app. But one question I have for you, Samuel is, you know, obviously Facebook, their argument is we ask
people's permission, there is an opt-in consent form, there's a legal disclaimer.
Given all of that, what exactly are the ethics of what Facebook has been accused of doing?
BURKE: Well, all of the people I've talked to, experts in fields of privacy have said, they don't see where the violation of the new would have
been here. And strictly, yes, they were straightforward, if you're being paid and you saw the permissions right there that we showed on the screen,
I don't think it's so much that we should think about the ethical violations if there are any, I think it's the broader questions that we
have about how far is Facebook willing to go to be the data dominant company of our time?
Of course, there are others like it; Google, for instance. But how far will they go and how far will the public let them go? They haven't fallen
on their sword yet, but will they, in a few days, say "Okay, we're getting enough bad publicity from this that we'll fold." That's the type of
problem that we've seen for Facebook and the numbers that you're showing right now on the screen show, you know, at first when it came to Cambridge
Analytica, they didn't make it public. They didn't think that it was going to be such a big problem, they hoped it wouldn't be, and then everything
changed.
So I'm interested to see if these type of scandals will catch up to the companies tonight in their earnings report.
ASHER: And we just saw there just what's happened to Facebook shares over the past year and a half. We'll see what happens with their earnings,
Samuel Burke, live for us there. Thank you so much. So we have the results of our question and according to those of you who are voting at
cnn.com/join. Most of you say you would not install Facebook's app for $20.00 a month. A lot of people wary, of course, about all of Facebook's
privacy issues.
Only around a fifth of you say that you would. All right, still to come her on "Quest Means Business," 27 countries with one message for Theresa
May. There is no way, no way to reopen Brexit negotiations even if that's what British MPs voted for. We'll talk about that after the break.
[15:20:00]
ASHER: Welcome back, everybody. Less than two months to go until Brexit. It's taken Britain's government two and a half years to reach its latest
negotiating position and it took Europe less than 10 minutes to say, "What you're asking for is not an option."
European Council President said it again today, tweeting, "The E.U. position is clear and consistent. The withdrawal agreement is not open for
renegotiation. Yesterday we found out what the U.K. doesn't want. We still don't know what the U.K. does want."
His counterpart at the European Commission, Jean-Claude Juncker said a no- deal Brexit is now even more likely.
(BEGIN VIDEO CLIP)
JEAN-CLAUDE JUNCKER, PRESIDENT OF THE EUROPEAN COMMISSION (Through a translator): Ladies and gentlemen, allow me to tell you very clearly that
yesterday's vote has further increased the risk of a disorderly exit of the United Kingdom. We have to continue to do everything in our power to
prepare for all of the possible scenarios including the worst.
(END VIDEO CLIP)
ASHER: Back at home, the Brexit supporting segments of the press is rallying behind Prime Minister. The "Daily Mail" held Tuesday night's
votes by MPs is Theresa Triumph. The "Daily Express" calls it one of the most remarkable turnarounds in political history. Joining me live now from
Brussels, Philippe Lamberts, he is a member of the European Parliament and joins us now. Thank you so much for joining us. I appreciate that.
PHILIPPE LAMBERTS, MEMBER OF EUROPEAN PARLIAMENT: My pleasure.
ASHER: The E.U. at this point is saying they are not willing to renegotiate the withdrawal agreement. But my question to you is why not?
If not, what is a better solution to the Brexit impasse?
LAMBERTS: Well, the fact is there's a constraint here and that is created by the Good Friday Agreement. This was not created by the European Union,
but actually, this Good Friday Agreement was made possible by the membership of European Union of both the Republic of Ireland and the United
Kingdom that when the United Kingdom withdraws its membership, which is its right, it has to replace that membership by something else in order to
enable the continuation of the Good Friday Agreement and that's something is the Irish backstop.
There's no way around this. So it's not that we are inflexible on that, it's the fact that the absence of a hard border in Ireland is a legal
obligation that is imposed by the Good Friday Agreement.
ASHER: But isn't it in everyone's - I mean, I understand what you're saying that there's limited options beyond what's already been negotiated
in terms of the Irish backstop, but isn't it in everybody's best interest at this point to do anything to avoid a no-deal Brexit?
[15:25:02]
LAMBERTS: Well, I understand, of course the concerns of some British politicians that the backstop might last eternally. And the backstop is
not a very comfortable situation, so it would be much better to have a permanent Customs Union with the European Union that would solve a big
chunk of the issue. Or to limit the backstop to Northern Ireland. That is also a possibility. But you need something there.
And again, what the vote yesterday was basically saying, "We don't want the backstop." And like, well, we don't want rain, but we can't prevent that
from happening. So indeed, I understand that the hard Brexiteers would rather dispense with the backstop, but that stems from a legal obligation.
So I am afraid that the wiggle room there is very limited. Of course, you might dream of a situation where the Republic of Ireland would follow the
United Kingdom into exiting the E.U., that would solve a problem, but of course no one wants to demand it from the Republic of Ireland or you could
say, "Well, no problem, we allowed U.K. to diverge from E.U. legislation to have its own trading and all the rest of it," and we make no controls of
the 550 kilometers Irish borders. But that would equate to creating a gigantic back door into the single market, which would basically nix the
single market, and this is not something that the European - the E.U. 27 are willing to do.
So, yes, we take into account the fact that a no-deal Brexit would be damaging not just for the U.K., but also for the E.U. 27. But ruining the
single market would be even more damaging. And if we have to choose between two evils, well, we choose the lesser one.
ASHER: Okay, so just in terms of solution, is the best solution at this point, given that March 29th is just around the corner, is the best
solution from your perspective to delay Brexit until a better solution can be found to the Irish backstop in which everybody can agree on?
LAMBERTS: Well, delaying the Brexit is something that we are open to. Now, it creates some problems due to the fact that on the 23rd and 26th of
May, we are going to have the European election. And as long as the United Kingdom is a member, it is bound to elect an MEP. So that creates a
difficulty.
I think that that difficulty can be overcome if there's goodwill on both sides. But then again, we need to know for what and how long the
prolongation would need to be. Because again, the constraints of the Good Friday Agreement will not disappear. It's a permanent agreement into which
the United Kingdom has entered, which means that any future relationship we'll need to embody the basic parameters of the backstop itself.
So if the backstop is replaced, it will be replaced by something probably even more ambitious than just a backstop. So indeed, a permanent Customs
Union is something that is likely at least linking Northern Ireland to the rest of the European Union.
ASHER: It's so difficult to have all sides reach a consensus on this. And in fact, I mentioned the possibility of delaying Brexit. The Cooper
Amendment just yesterday was turned down in Parliament. So British MPs actually voted against that. Phillip Lamberts, we have to leave it there.
Thank you so much. Appreciate that.
All right, still to come here on "Quest Means Business," in Venezuela, the Supreme Court moves to freeze assets Juan Guiado's assets. We will have
the latest reactions as he and his supporters mount a fight. Next.
(COMMERCIAL BREAK)
[15:30:00] ZAIN ASHER, HOST, QUEST MEANS BUSINESS: Hello everyone, I'm Zain Asher. Coming up on the next half hour of QUEST MEANS BUSINESS, we'll
be live in Caracas as Venezuela's self-declared president has his bank accounts frozen by the Supreme Court. And the former Starbucks CEO Howard
Schultz tells us why he doesn't feel at home in the Democratic Party any more.
First though, these are the headlines we're following for you at this hour. U.S. President Donald Trump is firing back today at his own Intelligence
chief, suggesting they should go back to school. He's on the defensive after his director of National Intelligence and other top officials
contradicted his assessment of security threats from ISIS to Iran to North Korea.
Investigators say two seat cushions have been found that are believed to be from the plane that carried missing football star Emiliano Sala. The
cushions were discovered on a beach in northwestern France. Rescuers now plan under water search for the aircraft later on this week. The plane
went missing over the English Channel last week.
A dangerous cold snap is putting much of the northern U.S. into a deep freeze. Wind-chills temperatures plunged to record-breaking lows, extreme
cold has forced thousands of flight cancellations and mail deliveries have been suspended in parts of the United States.
In Minnesota, some people are still doing a grueling 250 kilometer marathon despite the bone-chilling weather. Right now to one of our many top
stories today. New protests have broken out in Venezuela, self-declared acting President Juan Guaido spoke with Donald Trump earlier Wednesday.
Mr. Trump re-affirmed his support after Venezuela's highest court froze Guaido's bank accounts. Guaido has called on his supporters to take to
the streets this afternoon, protesters are demanding that the powerful Venezuelan military throw its weight behind Guaido and his movements.
Stefano Pozzebon is live for us in Caracas. So Stefano, here is the thing, Guaido seems to have all of these assets at his disposal. For example, he
got the phone call from U.S. President Donald Trump, he's able to control billions of dollars worth of Venezuelan assets.
He's got several nations around the world saying that listen, we support you through and through. We are against the Maduro regime. How does he
translate all of that? Especially, listen, he's got thousands of protesters as well, taking to the streets of Caracas as well, voicing their support
for him. How does he translate all of that to actually real concrete power in Venezuela?
STEFANO POZZEBON, JOURNALIST: Yes, Zain, his speech has been -- Guaido's speech has been throughout the protest that have been -- have been
gathering support here in Venezuela for the past two weeks. His claim and pitch has been directed at the military forces. Increasingly, a look more
and more like that the final arbiter of this power tussle that we're seeing in front of our eyes here in Caracas between Juan Guaido and Nicolas Maduro
will be the Armed Force, will be the military apparatus, the general, the colonels, the admirals who have been on Maduro's side throughout his
presidency at least since 2013.
But who may be switching sides, who may think that Guaido now with the support of the international community has a better chance to clear the
country out of the dramatic economic crisis that is bringing Venezuela to collapse. But again, from today, I was able to spend time around the
protests, and I was able to speak with Lilian Tintori.
[15:35:00] She is the wife of one of the most famous political prisoners here in Caracas, Leopoldo Lopez, and a human rights activist. That's a
person who has been protesting against this government since at least 2013. And my main question today to her was like what is different now?
Why do you think you have the momentum on your side? And this is what Lilian told me.
(BEGIN VIDEO CLIP)
LILIAN TINTORI, WIFE OF LEOPOLDO LOPEZ: This time all countries support our fight. We work a lot in the fight last years, and we met President
Trump, and today President Trump called our President Juan Guaido. Thank you for the United States, thank you for the government of France, thank
you for all the countries that know us, know our fight.
(END VIDEO CLIP)
POZZEBON: What Lilian Tintori told me is that this time, it feels different because they have the international community on their side. All
of those countries who have been supporting Juan Guaido, all those countries who have been recognizing them -- I'm talking about the United
States, and she mentioned the call with President Trump.
But also, a lot of countries around the region, Colombia, Brazil, Argentina, Chile, they're all recognizing Juan Guaido's leadership in
leading these protests. And that's why the opposition here feels like that it has been as close as ever to taking Maduro out of the question. Zain.
ASHER: However, Maduro actually gave an interview with Russian state news agency RIA, basically saying that he's willing to talk to the opposition,
but that one thing he will not do is allow elections in the country. So given that impasse, where do things actually go from here? How can there be
an actual resolution to the crisis in Venezuela?
POZZEBON: Yes, Zain, that's what everybody is asking. Like, we have these enormous power tussle, and we see the international community picking
sides. Because behind Maduro, he feels strong right now because Maduro has the pledges of allegiance from countries such as China, Russia, Iran, who
have been supportive with Maduro throughout the years.
Again, it seems that the final arbiter will be the military here in Caracas because there's only so much that the international community can do to
force a negotiation here in Venezuela. And Nicolas Maduro has been used in the past negotiations and dialogue in order to slow down the momentum of
the opposition.
That happened in 2016, 2017 and again last year. And that's why the pitch and the claim and the message from Juan Guaido and the other members of
parliament here in Caracas has been always directed at the military. Without the support of the military, it's hard to see how all that support
around the international community can broker to real power in Venezuela.
How that muscle can be flexed logistically inside the country. And Maduro still stays strong because right now he still has the support of that
military. Zain.
ASHER: And that's why Guaido is actually offering amnesty to members of the military who end up defecting. Stefano Pozzebon live for us there,
thank you so much, appreciate that.
The crisis in Venezuela is continuing to put upward pressure on oil markets. U.S. crude is up nearly $1 today, and it's signs that supply is
tightening. West Texas is now above $54 a barrel. The White House is significantly stepping up its attempts to squeeze the government in
Venezuela by using new oil sanctions.
In Saudi Arabia, officials say fluctuating oil prices are not a big concern. Speaking with our Richard Quest in Davos last week, finance
minister addressed oil prices and the Khashoggi scandal, saying the government's main goal is to foster stability in the region.
(BEGIN VIDEO CLIP)
MOHAMMED AL-JADAAN, FINANCE MINISTER, SAUDI ARABIA: Well, oil price have been volatile for the case, not only for the last 15 months. So I think
vision 2030 came in Saudi Arabia which is a wide diversification initiative. Why the reform? Because social, economic, financial as a
response to that.
We wanted to diversify the economy, we wanted to make sure that we provide for the citizens of Saudi Arabia, and we wanted to be a catalyst for
stability in the region. And generally, we are actually making a serious positive impact. In 2017, we ended up with minus 0.7 GDP, in '18, we ended
up with 2.3 growth. So there is momentum, there's growth in various sectors.
RICHARD QUEST, CNN: One of the issues of course is the -- we have to deal with it is the -- is the cloud that hangs over Saudi Arabia and its
government following the murder of Jamal Khashoggi and the alleged involvement of the Crown Prince.
[15:40:00] I realize in asking you, these are not easy matters for you to discuss. But the reality is everybody is requiring you to discuss it.
AL-JADAAN: Two things I think are very important. One, I've said this before, we are very sad and saddened all over Saudi Arabia about what
happened. We feel bad about it, and we wanted to make sure as government, that those responsible are brought to justice.
I don't know if you were following, first time two weeks ago, we held an open court hearing for the accused. And this is in court now, so we'll
leave it to that. The second part, which is really important is we are committed to reform. We are reforming and we'll continue.
Whether it's the institutional reform within the government, the intelligence system has announced by the government, but also in the
economy. So there's a lot happening and we're committed to continuing that journey.
(END VIDEO CLIP)
ASHER: Right, still to come here on QUEST MEANS BUSINESS, former Starbucks CEO Howard Schultz is causing quite a storm. What he's saying that's
raising hackles among Democrats and Republicans next.
(COMMERCIAL BREAK)
ASHER: Howard Schultz is managing to upset people right across the political spectrum by slamming that tax policies of both Democrats and
Republicans. The former CEO of Starbucks is considering an independent bid for the White House. Schultz tells Cnn Donald Trump's corporate tax cuts
were a bad idea.
But he also dismissed progressive plans to get millionaires and billionaires like himself to pay more in terms of taxes. Poppy Harlow
asked how then would he tackle rising inequality?
(BEGIN VIDEO CLIP)
POPPY HARLOW, CNN: Income inequality --
HOWARD SCHULTZ, FORMER STARBUCKS CEO: Yes --
HARLOW: The story of your life, right?
SCHULTZ: Yes.
HARLOW: There are -- you've already condemned the Trump tax cut, right?
SCHULTZ: Yes --
HARLOW: Corporate tax cuts --
SCHULTZ: Yes, I was wrong.
HARLOW: There are a few different proposals out there now from progressive liberal Democrats on how to tackle this. So let's take two of them, OK?
First, Alexandria Ocasio-Cortez; a congresswoman from Queens supports a 70 percent marginal tax rate on the rich -- your eyebrows go up when I say
that.
That is on their -- you know, 10 millionth dollar and above. As you know, we saw a 90 percent marginal tax rate under a Republican, President
Eisenhower.
SCHULTZ: Yes.
[15:45:00] HARLOW: What do you think of that?
SCHULTZ: Well, let's go back to the idea that if I ran for president as an independent, I'm going to steal Democratic votes away from President Trump.
Let's go a different way. If the Democrats are proposing anything close to a 70 percent level of income tax, how many core Democrats are going to be
supportive of a move towards socialism? Not very many. President Trump will get re-elected.
HARLOW: How would your plan then reduce the income gap from what it is today, widening every year. If it's -- is it raising corporate taxes
immensely?
SCHULTZ: I think the 21 percent tax rate was wrong, I would not be supportive of that if I was president.
HARLOW: But would you raise corporate taxes?
SCHULTZ: I would not be supportive of 21 percent. That should give you some idea as to what I would do.
HARLOW: Elizabeth Warren's proposal is a wealth tax.
SCHULTZ: Oh, God.
HARLOW: It's an additional 2 percent --
SCHULTZ: Yes --
HARLOW: Tax on Americans whose net worth -- this isn't just an income tax --
SCHULTZ: Yes, I know --
HARLOW: Actually, it's an asset tax.
SCHULTZ: Yes, what do you think of that?
HARLOW: It's over $50 million.
SCHULTZ: Yes --
HARLOW: Good idea?
SCHULTZ: Well, first of all, it's an idea that has no merit. She knows that there's no way this could come to pass. These are just false campaign
promises to make noise. And again, it's punitive, no, I don't agree with that.
(END VIDEO CLIP)
ASHER: And you can actually see or get rather Poppy's full interview with Howard Schultz on her Cnn podcast "Boss Files". Just go to cnn.com-slash-
podcast. Elizabeth Warren is already fundraising on Howard Schultz's opposition to her plan.
She says he wants to buy the presidency so he can keep the system rigged. Alexandria Ocasio-Cortez who says income above $10 million should be taxed
as high as 70 percent. Tweeted, "why don't people ever tell billionaires who want to run for the presidency, that they need to work their way up to
that. Maybe they should start with city council first."
Maria Cardona is a Democratic strategist and Cnn political commentator. She joins us live now from Washington D.C. So Maria, here is the thing,
does Howard Schultz have a point that the Democratic Party -- the reason why he doesn't fit in with the Democratic Party is that it's moved so far
to the left.
They're thinking about, you know, Medicare for all, Kamala Harris or the wealth tax touted by Elizabeth Warren or even Alexandria Ocasio-Cortez,
talking about 70 percent taxes on people who make over $10 million. I mean, is he right? Does he have a point that the Democratic Party has moved
so far to the left?
MARIA CARDONA, DEMOCRATIC STRATEGIST: Well, it depends on how you look at it. And I think in general, the Democratic Party has gotten more
progressive. But I don't think saying that the Democratic Party has moved far to the left is correct.
Because even though the people you just mentioned do have very progressive platforms, there are other people, for example, in the midterm elections.
Yes, Alexandria Ocasio-Cortez was elected but so was Conner Lam in Pennsylvania, who is a very moderate, almost conservative Democrat.
There were so many districts that Democrats won back because they ran people who mirrored their districts. And those people were not way to the
left progressive Democrats --
ASHER: Isn't it different from the presidency?
CARDONA: Because if they were, they wouldn't have won.
ASHER: Isn't it different if you're running for president, though?
CARDONA: Sure, absolutely, but what that then also means is that you're going to have to talk to all of the country. You're going to have to talk
to all of the Democratic Party, conservatives, moderates as well as progressives. So even though right now the Kamala Harris platform when she
said Medicare for all is getting all of the attention, look at the possibility of Joe Biden running.
He is a more centrist, more moderate Democrat who can speak to the white working class voters who were the ones that defected to Trump. Look at
Sheldon Whitehouse, look at other people who are looking to jump in. And I think what you're going to have in the Democratic Party which I love and I
think is great not just for the party, but for the country.
You're going to have the whole spectrum of the Democratic Party talking about real solutions to the problems that we have before us. And you
know, I'm sorry, but if Howard Schultz is going to be true to his own words when he said that he will never do anything to re-elect Trump, I think at
the end of the day, he is not going to run.
Because right now all of the data shows, unless he can show us what data he's looking at that is not the data that every other operative is looking
at, that he will not steal votes from the Democrat? Right now he is stealing votes from the Democrat, maybe some from the Republican or
potential Trump voters.
But if he runs as an independent, he will -- he will not win and most likely he will ensure the re-election of Donald Trump.
ASHER: Is the backlash strong enough, do you think, to get him to change his mind?
CARDONA: Well, we'll see. I think that right now, he was not prepared for the kind of backlash that he's gotten --
[15:50:00] ASHER: He seemed so surprised.
CARDONA: Yes, he seems very surprised, which again, kind of tells me that --
ASHER: It tells you a lot --
CARDONA: He's not really in touch with where the --
ASHER: Right --
CARDONA: Democratic Party is. And maybe that's why he wants to run as an independent. But the thing that I really look at is that in the mid-term
election that just passed -- and you're right, presidential is different. But in the overall, in the mid-term election that just passed, Democrats on
the whole got 9 million more votes than Republicans.
Much of those votes were votes against Donald Trump. The people in this country are sick of what this president has done, the way that this
president has not just treated the Oval Office, but the way that he has denigrated the presidency and this country.
The standing of the United States of America in the world is an embarrassment. And I think that all of the candidates who are running on
the Democratic side are going to give voice to that. And I don't know if somebody that is going to be running as an independent who will have sort
of the shadow behind him or her as to the possibility that, that person running is going to re-elect Trump. I don't know that they're going to get
that far.
ASHER: Very interesting, Maria Cardona live for us, thank you, appreciate it --
CARDONA: Thank you so much for having me.
ASHER: You're very welcome.
CARDONA: You're going to hear from two more billionaires after the break. The founders of Virgin and Under Armour, don't want to run for president,
they want to help you get into space.
(COMMERCIAL BREAK)
ASHER: Under Armour is going from designing sportswear to designing space suits. It's partnered with Virgin Galactic to develop gear for space
passengers and crew. Virgin says it expects to take its first tourists into space later this year.
More than 600 people have signed up for a seat. Richard spoke last week with Virgin founder Richard Branson and Kevin Plank; the CEO of Under
Armour, they told him how the partnership came about.
(BEGIN VIDEO CLIP)
RICHARD BRANSON, FOUNDER, VIRGIN GROUP: We're sending people to space, and if you're going to space, you expect to wear a space suit. And Under
Armour of all the designed companies in the world, they've got, you know, some of the most cutting edge technology.
And you know, we thought it'd be great if we could work with them to design a space suit that people can feel really good in when they go to space.
[15:55:00] QUEST: How important is what they wear in the cabin?
KEVIN PLANK, CHIEF EXECUTIVE OFFICER, UNDER ARMOUR: If you're going to go 50-somewhat miles up into the atmosphere, you know, more and faster than
the speed of sound, and you know, pulling you know, close to, you know, five and potentially six Gs depending on what that means.
But that's an incredible amount of straining, so that's where our innovation with things like graduated compression can help you keep your
blood in the right places. It's a very serious event. This is not a -- you know, this is not just people getting on a train and going for a little
bit of a ride.
QUEST: What will be the challenges of designing such attire?
PLANK: Richard, we really see it as the opportunity. First of all, it's a closed-cabin system, and so, it's a strain off, they're not going to be
outside walking, and so the ability for us to use things like rush technology, our hover footwear technology, things at the same innovation
that we had in Tom Brady's sleep pajamas we're actually putting into this.
QUEST: Can we expect this to mushroom and balloon or at least blossom into a range that will be available in retail?
PLANK: There will be a commercial opportunity with the product too. Right now, we're really focused on getting the product off the ground and making
this right. And then we're utilizing the technology because everything we're making for space is actually something that's coming through with
technology that's going to be commercial for us this year in 2019.
QUEST: Everybody asks what is the date, do you think, for that first flight?
BRANSON: I am hoping that the 50th anniversary of the moon-landing is July this year, and I would hope that sometime in July, that we'll either go up
or will have been up. So we'll see how we go.
(END VIDEO CLIP)
ASHER: We're just moments left to trade on Wall Street. We'll have the final numbers and the closing bell in just a moment.
(COMMERCIAL BREAK)
ASHER: Welcome back everybody. Markets are about to close in New York. The Dow is just off its highs, but still as you can see there, over 400
points higher. It got a big boost at 2:00 p.m. when the Fed announced it would leave rates unchanged.
Policymakers are saying they will be patient when it comes to raising rates. Stocks were actually already up before we got that statement. Just
a take a look behind me at the Dow components, Apple and Boeing were by far the biggest gainers for the day.
Both companies reported the earnings that beat Wall Street's expectations. Boeing reported a record number of airplane deliveries in 2018. And says
it would deliver even more this year. Expectations were low for both Apple and Boeing since they make a large portion of their sales in China where
economic growth is slowing.
(BELL RINGING)
That of course is QUEST MEANS BUSINESS, I'm Zain Asher in New York, the closing bell is ringing behind me, and "THE LEAD" with Jake Tapper is next.
END
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