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Quest Means Business
At Least 8 Dead in Anti-Government Protests in Sudan; U.S. Designates Iran's IRGC a Terrorist Organization; Felicity Huffman to Plead Guilty in College Admissions Scam; Oil Prices Rise Amid U.S.-Iran Tensions; Jordanian Prime Minister Appeals for Investors; U.K. Government Proposes Tighter Rules for Online Content; Turkey Opens World's Biggest Airport in Istanbul; Boeing Drags on the Dow. Aired 3-4p ET
Aired April 08, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: We are in the last hour of trade on Wall Street. One hour to go, 60 minutes of trading and the Dow
has been down throughout the entire session round about half a percent, now off 112 points. There is one reason. There is one reason and only --
Boeing -- because this is what's been moving the markets on Monday, the 8th of April.
Boeing, once the darling of the streets, now Boeing is in investors' bad books. The shares are down some 5%. It's such a large components of the
Dow. That's what pushing the market lower.
It's all systems go with the Brexit talks. Theresa May is talking to every E.U. leader under the sun, and then some more.
The tensions from Tripoli to Tehran. Oil prices are hitting the highest point of the year. We will explore the reasons why. I am Richard Quest
tonight in London where of course, I mean business.
Tonight, Wall Street has decided it is time to drive Boeing shares and punish the company for what it perceives to be their misdeeds. Shares are
down more than 4.5 percent. Analysts of Bank of America have warned that production problems with the 737 MAX could last much longer than expected.
That has long lasting implications to the company's.
Boeing's suppliers are getting hit, too. There are a number of factors that investors are watching tonight. Firstly, the order book. A leasing
company in China has reportedly put an order for 100 737 MAX's on hold. The company says it's still believes the aircraft is fundamentally safe.
But that is now the issue as regards the 737 MAX, the long range safety of the aircraft.
So whilst Boeing sorts it out, more production cuts. Boeing will now put out forty two 737's each month instead of 52. One simple reason, they were
running out of places to park the planes after they've made them, so they're cutting back on the production. That market came after the markets
closed on Friday. So some of today's announcement, of course, will be built into that.
On flight cancellations, American Airlines is just one airline that has extended out into June. The world's largest airline is cancelling around
90 flights a day because they simply don't have the existing MAX aircraft and the ones that they were expecting to join the fleet over the next few
weeks a month.
The aviation expert Richard Aboulafia, he joins me now, the Vice President of Analysis at the Teal Group. It's worth pointing out though, isn't it?
Boeing rebounds quite often after falls. But this one, what is the fold based on? I mean, Boeing is not going out of business. So what is this
fold -- this current fold based on?
RICHARD ABOULAFIA, VICE PRESIDENT OF ANALYSIS, TEAL GROUP: Well, I think it's just the impact of this hugely important program. You know, the 737,
last year was about 26 percent to 27 percent of company revenues and it's a very profitable, very known program, up until now, until these tragedies.
So they'd gotten really good at converting operating cash flow into dividends and buybacks and investors like that a lot, because frankly, this
looks like a program -- it still does look like it for a program for the long haul.
QUEST: So this idea that there may be a fundamental design fault in the 737 MAX, because of the positioning of the engines of which you'll be
familiar, they are higher, they are longer and they are more powerful. That would be a completely different situation. At the moment, it's still
believed Boeing can solve this issue with a software patch.
ABOULAFIA: Yes, that's exactly right. And I don't think there are a whole lot of terribly credible voices in the industry in the engineering
community that believe that there's something fundamental about this that can't be sorted out.
So much of the current sentiment is driven by this change in timing expectations of when regulators will agree that the fix has been sufficient
to allow the planes to get back in the air. And as you mentioned, Bank of America and Merrill Lynch went from a three to six-month time horizon to
six to nine months today, and that seems to be the big needle mover.
QUEST: So on a simple technical basis, never mind feeling and worries and extrapolations, but simply on a technical basis of earnings, the company
will not bring in as much between now and whenever because it is -- although it is delivering the other 737s, it is not delivering the MAX's.
ABOULAFIA: Yes, that's exactly right, and it's sort of noteworthy. Their principal along lead subcontractor, which is Spirit AeroSystems, they build
the entire body of the plane.
[15:05:09]
ABOULAFIA: They're sticking with rate 52, the rate until they reduced it to 42 last Friday, maybe they know something that we don't or maybe they're
just being optimistic, but that implies that this might not be a six to nine months story because they wouldn't still say at that rate, if it were.
It could be that it's merely a way to avoid a production log jam, and of course, a way of avoiding holding too much inventory, which certainly would
happen if this extended.
QUEST: If the plane -- let's say, just for the point of argument in this question. It is a six to nine to 12 months, would they just continue
making the planes, parking them somewhere out in the desert on the basis that the fix is only software related. Therefore, for that hardware being
produced will be good -- just as good -- when it's finally there up into the air again?
ABOULAFIA: Yes, that's exactly right. You know, it's purely a software fix associated with training, too, but nothing that is, you know, speaks to
the external lines or manufacturing makeup of the jet, so you'd park them.
The real issue here is just production log jams coupled with holding way too much inventory, because at 52 per month, that's of course a lot of jets
over six months.
QUEST: Final question, toughest question of the interview, does Boeing get blamed? Does the share price suffer, does the company suffer if they get
the planes back in the air, even though they are probably -- it is probably their responsibility for putting a plane in the air that was not fit for
purpose?
ABOULAFIA: Oh, the aircraft itself, I really don't believe is at fault at all. And I don't think many people, if anybody, in the industry and in the
aerospace engineering community believes is at fault. What you had is well, two accidents, which involve like any accidents, a chain of events.
Now, the one common link in that chain of events is this MCAS system that can be fixed. There is going to be a lot of back and forth about who is to
blame for the execution of this system and how it all happened. But at the end of the day, it's not just the sole cause of these disasters.
QUEST: Richard, good to talk to you. We will talk more about this if we may in the future. I appreciate it. Well, we showed you at the beginning
of the program the loss of the Dow, Boeing is responsible for just about all of the Dow's losses so far this session.
The S&P and the NASDAQ are flat, even the Dow is picking up back up a little bit to 102 points. Wall Street is also reacting into another
downgrade. GE of course was kicked out of the Dow, so GE is not in the numbers. But an analyst at JPMorgan is urging investors in the company to
sell.
The shares are down more than 6 percent. Now that's only 65 cents on the share, but it is only 10 bucks and change, well, it was; now just nine and
change. Paul La Monica, Guru La Monica, why does this analyst say sell?
PAUL LA MONICA, CNN BUSINESS REPORTER: He is this the analyst at JPMorgan, who's kind of like the ax, the most influential analyst on GE. He thinks
that investors are ignoring some of the risks that are still out there, even though GE has made a lot of decisions to sell off some assets, they
still have what he referred to as a stubbornly high debt load and that that would really hurt the company if we have an economic downturn and that it's
going to take a lot more than just selling assets for GE to turn things around.
So he now has a price target of just $5.00 a share on the sock, which is about half of where it's currently trading. That is not good news.
QUEST: Okay, but why -- why should GE be in a worse position now than it was before with all the problems that we know of? I mean, at the end of
the day, Paul, there's never been good news about GE in the last year, except when it sold something.
LA MONICA: Exactly. I think the only time you're right that investors seem to be encouraged by anything is when the new CEO, Larry Culp has
announced some deals to sell off some assets. And in some cases, they've actually gotten rid of some of those assets and a decent price is not
necessarily a fire sale.
But I think the big concern right now really is that even though the Fed is probably on hold with no rate hikes for the foreseeable future, it's
possible that we could see that change and if rates creep higher, GE has a lot of debt, which just becomes more expensive to service and even if we
don't wind up having rate hikes, then you have the flip side, the economy is slowing down, highly leveraged companies are extremely vulnerable during
a downturn or dare I say, at a recession, which some are calling for in 2020.
QUEST: We'll talk more, Paul, you and I when I'm back in New York next week. Thank you.
It's shaping up to be another vital week for Brexit. All the main players are in communication only days before the U.K. is set to leave the European
Union.
[15:10:05]
QUEST: So the U.K. Government says it's holding further talks with the opposition, Labour Party. Those talks take place tonight. The chief E.U.
Brexit negotiator, Michel Barnier been in Dublin talking to the Taoiseach, Leo Varadkar, and the British Prime Minister has spoken to the E.U. Council
President, Donald Tusk and Theresa May is of course due to go to see Angela Merkel before the meetings on Wednesday and it's only Monday so far. No
breakthrough though. Time for more twists and turns on Tuesday.
This is what's going to happen. On Tuesday May visits Macron and Merkel. Wednesday, the emergency E.U. Summit. Friday, the Brexit deadline takes
place.
Bianca is with me. How has the day gone?
BIANCA NOBILO, CNN CORRESPONDENT: It's been frantic. There's been a flurry of activity in and out of Downing Street. The Prime Minister has
met with remain ministers. She has met with leave ministers. She has met with the chairman of her party. They've had to trigger the preparations to
take part in the European elections. She's had to meet with the influential 22 Committee, the ones with the power to depose her, who
haven't ruled out an indicative vote in her leadership. So basically another way of trying to hold a vote of no confidence.
So many things, in fact that I had to create a mind map to try and stay on top of everything when you came and spoke to me before the show. This is
what it looks like. It's a mess if the camera can check that out.
QUEST: We get the idea. But okay, but what's coming out of it?
NOBILO: This is the question because it seems like all the inertia and inactivity of the last two years has been squeezed into the last couple of
days.
QUEST: But May and Corbyn don't seem ready yet to have reached any form of deal.
NOBILO: The Labour Party have said they are frustrated at the lack of progress. They feel like the Prime Minister isn't abandoning her red
lines. And if she doesn't do that, then where is she hoping to find the compromise?
QUEST: The E.U. has already put on it table the flextension of a year. But when they go on Wednesday, they have to come out with something. Now
is no deal off?
NOBILO: The Prime Minister said that Parliament would have to approve a no deal. Parliament is not going to do that.
QUEST: Hang on. Parliament doesn't have to approve a no deal. The E.U. merely has to say we're not going to give you an extension.
NOBILO: That's the legal default. But the Prime Minister has said that she's not willing to do that. So infer from that what you will, does that
mean revocation? What does that mean?
QUEST: No, I don't think a revocation.
NOBILO: Well, that's what her Brexiteers are concerned about. So as it stands, she's going to go to the E.U. She's going to ask for the extension
to the 30th of June, again, which she has already asked for. Her spokesman said circumstances have now changed therefore, the E.U. should consider
that. But realistically it's going to be the long extension.
QUEST: They're not going to go for that June because if those talks fall down, then come July, they'll be ultra-virus for the E.U. parliament.
NOBILO: And this is why Brexiteers within the Prime Minister's party are apoplectic because not only are they angry that the Prime Minister as one
told me this morning, Mark Francois, is working with a Marxist who is political anathema to them, but she's also countenancing this long
extension, which is their worst case scenario on every front.
QUEST: Finally, forget the facts. I've noticed going around one's normal business here. I'm in London, with friends, family, acquaintances, people
don't want to talk about it. People are -- they're not tired, they're not Brexhausted. There's a deeper dismay in this country now, would you agree?
They just don't want it. It's too sensitive. It's too serious. It's too --
NOBILO: It's also human nature. When you feel like there is nothing you can do, but it does affect you. What can you do? People don't want to
acknowledge it. I've even spoken to Members of Parliament and feel so ineffectual and like they can't influence what's going on around them.
They're just trying to focus on anything else and trying to divert their energies into things that they can affect and changes they can make.
Because they know that this is out of their hands. I think that's why people don't want to talk about it.
QUEST: Good to see you. Thank you. We've got a busy week ahead.
NOBILO: Very busy week.
QUEST: We'll be in Brussels. Thank you. Warren Buffett has weighed in on the search for new Chief Executive at Wells Fargo. It's a matter of
staying streetwise and wary of Washington, he says. This is QUEST MEANS BUSINESS on a very busy week with Brexit, with Boeing -- we'll have it all
for you as we continue.
(COMMERCIAL BREAK)
[15:15:00]
QUEST: Wells Fargo's biggest shareholder is Warren Buffett and the oracle of Omaha has a message. The bank's next CEO should not -- not -- I'll say
it again, not come from Wall Street. Wells is recruiting new leadership for the second time since the scandal over the fake accounts in 2016.
Those revelations dragged the company's reputation to an all-time low.
The bank remains under Federal Reserve sanctions. It's conduct is under constant, close scrutiny. And Buffett told the "Financial Times" picking a
CEO from Wall Street would draw the ire of Washington.
Indeed, in the halls of Congress, on this program, politicians have sent that message loudly. There's a systemic problem and the problem starts on
Wall Street.
(BEGIN VIDEO CLIP)
SEN. ELIZABETH WARREN (D-MA), PRESIDENTIAL CANDIDATE: Wall Street executives who almost never hold themselves accountable, not now and not in
2008 when they crushed the worldwide economy.
REP. SEAN DUFFY (R-WI): is the problem fixed?
UNIDENTIFIED MALE: It's fixed.
DUFFY: It is okay. I'm surprised because as you come in and talk to the Congress, I'm shocked that you're not in an orange suit in a little jail
cell testifying today.
REP. DENNY HECK (D-WA): The structural changes and this evolution of Wells Fargo isn't what needs to occur. You don't need to evolve, you need to be
reborn.
REP. GREGORY MEEKS (D-NY): This was across the United States. It's a huge lapse. And so you know, you don't put the wolf in there to inspect what's
going on and expect the sheep. And that's what's happening again.
SCOTT GARRETT, FORMER U.S. REPRESENTATIVE: The elite, if you will, here in Washington or in Wall Street seemed to play by a different set of rules.
WARREN: You enabled this fake account scam. You got rich off it, and then you tried to cover it up. Wells Fargo needs to start over. And that won't
happen until the bank rids itself of people like you who led it into this crisis.
(END VIDEO CLIP)
QUEST: Rana is with me. Rana Foroohar is in New York. And are they right? Does it doesn't make sense to put a non-banker as head CEO of a
bank?
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Well, I think in terms of PR, yes, they are right. I mean, you know, you just heard all these clips. I
was down in Washington a couple of days ago talking to Democratic progressives, people are still very angry about the legacy of 2008.
I mean, what's kind of ironic here is that actually if you look at the balance sheets of the big institutions -- the Goldman Sachs, JPMorgan --
they're in better shape than they have been, certainly, for many, many years. Wall Street has actually cleaned up its act to a large extent.
But I think that what's happening is that the divide between Wall Street and Main Street is still as big as it ever was and that's what politicians
are responding to.
QUEST: Right. But surely, you need a professional banker to be the CEO of a bank.
FOROOHAR: I that you can find somebody from -- frankly, I think that you could look off of Wall Street. I think you can look in the community
banks. I mean, there are a couple of names that have been floated of ex Wall Street folks that are now running banks in the Midwest. I think
something that has a little more of a heartland feel at the moment is not a bad thing to do for Wells Fargo. I think Buffett has good instincts
actually, from a PR standpoint.
[15:20:10]
QUEST: But Rana, surely the answer here is one that I banged on about. It is to split the chairman and the CEO's job. Getting a -- I mean, it's fine
to have a professional CEO, but have a non-exec Chairman who is not from the industry, who is with integrity. But I mean, going back to the Cadbury
reports and all of those other things, that that's the way to go forward to have proper oversight.
FOROOHAR: Well, you're bringing up a larger issue and you could talk about this in the context, not just at Wells, but any number of companies. We
have massive corporate governance issues in the banking sector still, and in corporate America at large, I think that people are really saying,
"Look, should these positions be split more often than not?" Should there be, you know, all kinds of issues beyond this? Should there be
preferential shares given in certain kinds of companies?
Richard, I would push back a little bit about the idea that you need a Wall Street guy to run an institution like Wells. I mean, to be honest with
you, my last book was about the divide between Wall Street and Main Street. I think that banks could do with a little bit more Main Street, a little
bit more focused on average people, their needs and perhaps less wheeling and dealing, less of the stuff that gets them into trouble and that tends
to come from the street.
QUEST: I know what my next book that I shall be reading on a plane somewhere is. I shall be buying from Amazon before the pickups finish.
Stay with us. We'll be talking more in a second.
The Drector of the White House National Economic Council is denying Donald Trump's interfering with the Fed's independence. The President recently
moved to fill the vacant seats on the Fed Board. There are two controversial picks. He says he plans to nominate Herman Cain for a
Republican candidate for President who made his fortune running pizza, and Stephen Moore, a Republican operative and former CNN economic analysts who
also was an economic adviser at the White House, it must be said. Speaking to Jake Tapper, Kudlow insisted Mr. Trump isn't playing politics.
(BEGIN VIDEO CLIP)
LARRY KUDLOW, DIRECTOR, WHITE HOUSE NATIONAL ECONOMIC COUNCIL: President Trump has every right to put people on the Federal Reserve Board with a
different point of view. You don't have to rush pell-mell into tightening policy and raising rates just because the economy is growing. POTUS is
very well informed. He is a successful investor. He is a successful businessman. He wants people on the Fed who share his philosophy. This is
not a political issue.
(END VIDEO CLIP)
QUEST: Abby Phillip is joining our conversation. Abby is at the White House. Rana is still here, too. I want to start with you, Abby, bearing
in mind that the DHS Secretary is gone. The head of the Secret Service has just been dismissed or the Director is has just been dismissed. Is the
administration treating the government or is Donald Trump treating the government as his own personal fiefdom here?
ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Well, Richard, this is essentially how the President has run his administration from the very
beginning, that there has been this constant churn and turnover of senior aides in many cases just responding to the President's whims on any
particular issue.
In this case, we are two and a half years into the Trump administration, most of these officials that he is pushing out of their jobs, he put in
their jobs. So he is now removing people out of jobs that he installed them in to begin with, because he wants something different than what he
may be thought he wanted at the at the onset of their tenure.
And what's also happening in this particular case, as it relates to DHS, is that there are some new figures rising in the White House gaining some real
power. Stephen Miller being a key figure here. He has always been one of the strongest voices in the West Wing on immigration, one of the toughest
hardliners on this issue speaking to President Trump, but now the President in the recent weeks has given him explicitly a portfolio over Immigration
and Border Security that essentially has empowered him to push for some of these really big personnel moves.
QUEST: Abby, thank you. I'll let you go back to your newsgathering duties as we take what you've said, and talk about it with Rana, listening to what
Abby said, this idea of the management structure of the way the White House. Now, we have Herman Cain, and Stephen Moore. Now, when I heard
about Cain, I thought, "Oh, this is ridiculous." Until I looked at his background, the man has got solid Fed Reserve experience within the system.
FOROOHAR: Well, sadly, many of his calls have been flat out wrong though. I mean, if you look actually at both Cain and Moore right after 2008, were
worried about hyperinflation. They were worried that quantitative easing was going to cause massive inflation and we should tighten rates back then.
[15:25:00]
FOROOHAR: Now, they're saying keep rates low. Well, that seems a little opportunistic to me. It seems a little bit of a way for the President to
perhaps ease into 2020 with the economy still being on easy money. It all feels very, very political. And, you know, Richard, you know, as well as I
do, this is a very pivotal time for the Fed.
I mean, there's a lot of internal debates about how a monetary policy should be working. I would like to see the safest pair of hands in there.
I don't think that either of these two folks are.
QUEST: Right, but come on, Donald Trump has had the luxury of replacing the Chair, the Vice Chair. Qualls (ph) is one of his, there's one more,
his name escapes me. So he will, before he's finished, this President, unlike others, have had the chance of effectively replacing the whole of
the Fed Board.
FOROOHAR: Yes, and it's interesting, because as we were hearing earlier, he tends to dismiss people or turn on them if he doesn't like what they're
doing at any given moment. I mean, he was -- he put Jay Powell in and he's now regretting that because Jay Powell has done a very good job of doing
what the Fed should do, which is to be independent to look at the data.
So you know, I would be very worried if I were a Trump appointee. And the President turns on a lot of folks.
QUEST: Except when you talk about the Fed, because that's the one appointee that he can't get rid of.
FOROOHAR: Exactly. And you know, the thing that actually makes me feel good about the Fed right now is the fact that I think Powell has done a
good job of being independent. I think he's been very data driven.
Look, it's a difficult moment for the Fed. We have no inflation and yet we know that stock prices are completely out of whack with Main Street.
That's a difficult call to make as to where rates are going.
QUEST: Thank you, Rana.
FOROOHAR: Thank you.
QUEST: Good to see you. Thank you. As we continue, oil prices are hitting their highest levels this year partly because a warlord in Libya is
marching on the capital of Tripoli, and it's having an effect on the prices around the world. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[15:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I'm Richard Quest, there's more QUEST MEANS BUSINESS in just a moment. We're going to
take you a tour of Istanbul's brand new airport designed to be one of the busiest in the world and maybe someday the busiest.
And Jordan's Prime Minister tells us why companies should invest in his country, this despite new tensions in the Middle East that might have kept
you away. As we continue tonight, this is CNN, and on this network, the facts always come first.
More deadly crashes in Sudan as protesters are demanding the resignation of President Omar al-Bashir. Two died on Monday according to an opposition
union doctors, bringing in the total to eight deaths since Saturday. Sudan's defense minister says the authorities will not allow the country to
slide into chaos, that's according to state media.
Iran has accused the U.S. of being a state sponsor of terrorism. According to Tehran's state media --
(CLEARS THROAT)
Excuse me, it comes after the United States designated Iran's elite military force, the Revolutionary Guard Corps as a foreign terrorist
organization. The actress Felicity Huffman and 12 other parents have agreed to plead guilty in a college admissions scandal according to the
U.S. attorney from Massachusetts.
Huffman apologized and said she is ashamed of the pain she has caused her family and the education community. Prosecutors are expected to ask for
jail time for all defendants.
Look at the numbers, oil prices hit their highest levels this year. It's been pushed higher by tensions in Libya and Iran. Now, fighting on the
urge of the Libyan capital, Tripoli, has increased concerns of supply disruptions from that quarter. The U.S. is putting more pressure on Iran,
now designating Tehran's elite military force as a terrorist organization.
And oil prices have been boosted by U.S. sanctions on Venezuela which continues the production cuts by OPEC. Manouchehr Takin is oil and energy
consultant with me now. Good to see you, sir --
MANOUCHEHR TAKIN, OIL & ENERGY CONSULTANT: Good to be here --
QUEST: Simple question, is there actually a shortage of oil?
TAKIN: No, there isn't.
QUEST: Right, so why are prices rising?
TAKIN: In fact, supply and demand this year, 2019 on an average the growth in global oil demand and the growth in production outside OPEC, there will
be 1 million barrels per day in more supply than the growth and demand.
QUEST: So this rise in prices is predicated on what fear?
TAKIN: No, it is because United States imposes sanctions as you mentioned on Iran, on Venezuela, and there is this fight, unfortunately, which is
tragic for the people of Libya, but on the oil market, they might cut the supply --
QUEST: Might though --
TAKIN: Of course --
QUEST: So this is a reflection on the future prices rather than the current?
TAKIN: And that is another point, I told you about fundamentals, supply and demand, so much excess, so much. But really, the market works in
anticipation and sentiment of those who actually buy and sell. There is pay per barrel, there is positioning, there's some gambling and so on
going on. So those who actually buy and sell with money, they want -- expect work within the next few months.
QUEST: If we look --
TAKIN: Supply, demand balance --
QUEST: Right, the price --
TAKIN: Therefore, it's important. There's going to be a cut-off in Libya.
QUEST: So the price around 70 to 78, give or take, where do you expect it will settle?
TAKIN: If I knew, I will be a billionaire. But I think this year, it will be about 70 or so. Because looking at all this thing, that is my judgment.
Is unfortunately, there's going to be still pressure on the supply because of --
QUEST: But OPEC will -- OPEC will continue to -- hey, look at the numbers there, 71 for Brent, 64 for WTI. OPEC continues its -- manages to hold its
club together.
TAKIN: Of course, OPEC is doing it transparently. It is not like where the old cartels oil major used to do it behind scenes and quietly. So
everything is open as far as decisions of OPEC is concerned. And OPEC has cut its supply, and then there's demand, supply balance and it will change
its supply production based on the supply and demand balance in the coming months.
QUEST: But how susceptible is the market to the U.S. and the ability to increase supply through non-traditional methods?
TAKIN: Well, that is not from U.S. policy, it is the business --
QUEST: Exactly, but --
TAKIN: They will continue when the price is more than $50 or $60 --
QUEST: But my point is --
TAKIN: Just not OPEC, this is U.S., shale, oil will continue growing.
QUEST: But it will continue growing even more at these levels.
[15:35:00] TAKIN: Of course, when the prices are higher, those marginal ones, they will do. There are so many wells, millions and hundreds of
thousands of wells which have been rigged, but have not been completed in the shale, they can quickly be completed and brought on the stream.
QUEST: Good to see you, sir.
TAKIN: Thank you --
QUEST: Thank you as always for making a sense of the oil market. Jordan's Prime Minister says his country is a stable place to invest despite the
challenges it faces. Now, from fluctuating oil prices to receiving huge numbers of refugees, millions of people on the war in Syria. Speaking to
John Defterios at the World Economic Forum besides the Dead Sea.
He said "Jordan needs to continue its push to attract foreign investment."
(BEGIN VIDEO CLIP)
OMAR AL-RAZZAZ, PRIME MINISTER, JORDAN: It's a very good start. It's a process and we hope it's a trajectory. Jordan has done -- when we face
these challenges, we've done everything we need to do on the home front, on the physical tightening and we've invited all the countries to come and
look -- and international companies to look at opportunities in Jordan.
Having been so stable throughout these huge --
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Gyrations --
AL-RAZZAZ: Gyrations in the region, and think of Jordan as a hub for exporting services, for exporting goods, for the reconstruction process and
for doing good by doing well.
DEFTERIOS: Don't you worry about Arab Spring, too, though? I mean, looking at what's happened in Libya over the last few days, what transpired in
Algeria over the last month, even Sudan. I mean, people are very frustrated, you have to be launching with alarm, that it actually scares
away investment.
AL-RAZZAZ: There's a huge task attempt of encouraging youth to take an initiative and to take part, but in a constructive, not in a destructive
way. It applies to Libya, it applies to Latin America, Europe, the Middle East, everywhere. It's a challenge for everybody.
But we're hopeful that this energy that's coming out can be put to a good cause. That is a positive reconstruction in countries that have suffered
like Syria, Iraq and Libya, and for countries like Jordan where we can help leap-frog into the future.
(END VIDEO CLIP)
QUEST: When we return, the U.K. wants to clamp down on the harmful online content, telling social media giants to shape up or pay heavy price.
[15:40:00] (COMMERCIAL BREAK)
QUEST: The U.K. is proposing a major change in regulating what can be seen on the internet, suggesting new rules that would hold tech companies
legally responsible for the spread of harmful content. Now, it could ultimately lead to executives being fined if companies don't do enough to
protect users.
Joining me, Jeremy Wright is the Secretary of State for Digital Media, says Britain is showing the way for other countries.
(BEGIN VIDEO CLIP)
JEREMY WRIGHT, DIGITAL, CULTURE, MEDIA & SPORT SECRETARY, UNITED KINGDOM: What we're proposing here hasn't been done yet anywhere else in the world.
This is genuinely ground-breaking. And so it's important that we get it right. It's important we get it right to make sure that our package of
regulation will be effective, that it's properly balanced.
(END VIDEO CLIP)
QUEST: Now, to other countries who are also joining in to step up the pressure, Australia passed a law, requiring internet companies to remove
violent content or executives could face fines, of course, in the wake of the shootings in New Zealand.
Singapore has a bill that will make it illegal to spread false information on the net, and in New Zealand, the commission, the government's privacy
commissioner has called Facebook morally corrupt, saying in tweets, "the company refuses to accept any responsibility for content or harm."
With me is CNN's Hadas Gold and Samuel Burke, good to have both of you. Start with you, how realistic is it for all these companies to have --
sorry, countries to have their own rules and restrictions?
HADAS GOLD, CNN REPORTER: Right, definitely, it will be very hard for tech companies to follow all of these different rules, and I do think that what
Jeremy Wright; the digital secretary is trying to say is that they want to lead the way. They want everybody else to follow what they are doing.
One thing that is notable, compared to what other countries are doing, other than perhaps Australia, is holding people personally liable, holding
executives of these companies personally liable for what appears on their platforms. And I actually spoke -- I did that interview with Jeremy Wright
and he went into a little bit more detail on what that will be. Take a listen.
(BEGIN VIDEO CLIP)
WRIGHT: One of the things we're looking at in this white paper and we want to hear views on is whether or not we should pursue individual director
liability, whether civil or criminal, and of course, also even higher up the scale you might argue.
We're looking at the possibility, the website that refuse to comply with the regulator will find themselves excluded from the U.K. altogether. And
we think it's important that we consider all of these options, they all have practical challenges to them, but it's important that we consider
them all at this stage so that the regulator, when it does begin its work, has a suitable range of sanctions available to it.
GOLD: Are you now worried that some platform for those write-off operating in the U.K. entirely rather than deal with these regulations?
WRIGHT: Well, I think if they were going to take that approach, they would have to do it on the basis of their belief the U.K. would be the only place
to have such regulations. And I don't think that's realistic. We may be the first, and I will be proud of the fact that we are.
But I think we won't be the last, and I think other countries which are dealing with exactly the same kinds of pressures as we are, exactly the
same demands from their citizens to keep themselves and their children safe online, will want to pursue something very similar to what we're setting
out.
(END VIDEO CLIP)
SAMUEL BURKE, CNN BUSINESS & TECHNOLOGY CORRESPONDENT: Everything that Secretary Wright told Hadas there is sound and correct. The problem is
that unless the EU gets behind this, it's going to be a patchwork of laws all across the world. It will be hard for smaller start-ups to use these
laws, and at the end of the day, this is the power of the EU, and that's what they proved with GDPR.
So I think that unless the EU gets behind it, you're going to see something that may work for the U.K., but nobody else.
GOLD: But you do have to say that, at least, somebody is doing something. We have heard for so long calls for regulation of some kind, and although
this is still probably at least a year, if not years away from being enacted into actual legislation, it is somebody stepping out there on the
ledge, and saying this is how we can do this.
BURKE: But doing what's right for one small European country, no offense to the U.K., if the EU gets behind this, then they will set the standard --
QUEST: Well --
BURKE: For the whole world --
QUEST: The EU -- the EU will do something. Isn't this -- isn't this just the natural gestation of new regulation, that everybody does a little bit
themselves and then eventually it dawns on people, we better do it together. But then -- but will they be able to?
GOLD: That's -- I think a lot --
BURKE: Not without the EU --
GOLD: I think a lot of this is actually a carrot and a stick quest, where they're kind of throwing this out as a possibility, hoping that the tech
companies will clean up their acts a little bit before they regulate them.
QUEST: How justifiable or reasonable is it to expect the tech companies -- I remember -- you know, to talk about the Facebook and the measures
Facebook are now taking in terms of live streaming, I mean, where does their responsibility come to an end?
BURKE: They're asking for this regulation. Mark Zuckerberg has essentially -- to use an American football term, punted the ball and said
we can't do this, we welcome this regulation because they know that will take the pressure off of them.
[15:45:00] GOLD: But I think that there's a lot of amazing things that these technologies have proven that they can do, and that's why these
governments are saying, you can do all these amazing things with your platforms, why can't you at least make sure that this harmful content does
not get out there, too?
And maybe there's a way that they do this at different levels, if something reaches a certain level of virality, they have to check in on it. And it
is understandable, they do recognize, I think that it will be hard to absolutely regulate absolutely everything, and they will probably work off
sort of a complaint system similar to how Offcom here works with the media.
QUEST: Good to have you, Hadas, please, as our guest --
BURKE: Oh --
QUEST: I'm sorry --
BURKE: For years --
QUEST: Do have it, do have one --
GOLD: I've been at this network a decade --
QUEST: Thank you, bye -- he's just not qualified. When we return, years of planning billions of dollars and a few hiccups on the way. Finally,
Istanbul's new airport opens for tour, some day the government hopes it will be the world's busiest.
(COMMERCIAL BREAK)
QUEST: The aviation world was all a Twitter over the weekend as Turkey opened a massive new airport in Istanbul. President Erdogan says it will
soon be the world's busiest. In the extraordinary way in which they did this, moving all the planes, the 100 planes, at least, the equipment from
Ataturk over to this new airport.
The combination of years of planning and the $11 billion investment. And in the last few days, it saw a colossal, logistical operation, shifting
thousands of departures and arrivals from the old Ataturk to the new one, you get an idea. The Turkish government believes the huge bet on new hub
will pay off.
It expects Istanbul to overtake Dubai. Now, there you have London, Amsterdam, they're all traditional large ones, and then you've got
Istanbul. But you've also got Dubai over here, and then how they all compete, for example, with Hong Kong and Incheon in South Korea.
The beauty of these two hubs, of course, is the ability to fly through and on to the next destination. Unlike the old days, of course, where you
would change in London or Amsterdam. Well, we want you to get in the conversation, go to the phones, cnn.com-slash-join. Simple question,
simple question. What do you look for in a brand new airport terminal?
[15:50:00] What is it you want more than anything else? The food, the shopping, the ground transportation or the good free Wi-Fi?
What is it you want more than anything else? Somewhere like Istanbul, DSP, LHR or where ever? Go to cnn.com-slash-join and vote and you'll see the
results on your screen. I paid a visit to the new Istanbul airport as they were getting ready for what they called the Big Bang.
(BEGIN VIDEOTAPE)
QUEST (voice-over): Take a look at what could one day become the world's busiest airport. Istanbul's $11 billion mega-hub only weeks away from its
full launch. Eventually 200 million passengers are to pass through these halls every year.
And this is the man in charge of making it all happen, the Chief Executive of Istanbul's new airport Kadri Samsunlu, he's counting down the days to
what he calls the Big Bang.
KADRI SAMSUNLU, CHIEF EXECUTIVE OFFICER, ISTANBUL NEW AIRPORT: We call it Big Bang which means one airport will shut down, and this airport will
become fully operational. A giant operation of 17 -- in April, just 17 million passengers will shut down and everything will be moved to a new
location where we are sitting today.
QUEST (on camera): When you look now and you see one or two flights, and you think about what it's going to be like in a month, what do you think?
SAMSUNLU: Then all those flights move here, and since the systems are operating now, all they need to do is open more gates or business, and from
this perspective we're hearing now is giving us more assurance.
QUEST: This is huge. I'm exhausted, we've only done one escalator, there's a couple more to go. Is it too big?
SAMSUNLU: It is --
QUEST: Is this what passengers want --
SAMSUNLU: Right, no --
QUEST: These days? Big airports, vast distances, is this what people want?
SAMSUNLU: What people want is a space, and that's what we have.
QUEST: The planners here in Istanbul have been preparing for years for this great moment. They would do well to be sure. The history of airport
openings has not been a happy one. Denver, a total disaster, Bangkok, Vandenberg, it still hasn't even open --
SAMSUNLU: Yes --
QUEST: And Heathrow, terminal 5. What have you learned from looking at other airports' failures?
SAMSUNLU: Everybody has unique issues, OK? Some of them have -- I mean, problems with the construction, with the building itself. We have examined
all those, let's say, problematic cases, and we benefited a lot from the failures in other airports.
QUEST (voice-over): But Turkey's position as a global aviation hub has grown faster than many had predicted. Istanbul's current Ataturk Airport
built only two decades ago has become one of the world's busiest. And that success has brought challenges, and its critics claim Ataturk is overused
and overcrowded.
How important is this airport for Turkey?
SAMSUNLU: For Turkey, it's going to build up a huge economy. It's also going to be facilitating the growth of other sectors like logistics, like
tourism. But it's also very important for the road.
QUEST: For centuries, Turkey's position of the gateway of Europe made it a key bridge between east and west.
SAMSUNLU: Entry of distance of Istanbul, three continents, 1.5 billion people, 130 destinations.
QUEST: Like its competitors, Istanbul's new airport has had a few teething problems, a few false starts and a labor dispute. Now, though, the
airport is finally cleared for takeoff.
(on camera): I-S-T, international code for Istanbul. The designation will move from the old airport to the new when this building becomes fully
operational. And then Turkey's giant aviation project takes flight on day one.
(END VIDEOTAPE)
QUEST: And the airport is now up and running and open for business in all its extremities. According to those of you voting on cnn.com, you forget
about the food and the shopping, ground transportation, and that's the most important thing to you, in any new airport terminal. Half of you say
that's the most important thing, the thing that you value most.
A look at the markets. The last few minutes of trade on Wall Street. And after rising all of last week, now that the Dow has pulled back quite
nicely, it's pulled back as you can see now to 85 lower.
[15:55:00] But Boeing is off at about 45 percent and GE is down 6 percent after JPMorgan cast the price target. As you can see now, Boeing is still
holding that down at around 4 and a third percent. The Dow is down around a 100 points. Interestingly, look at that. Apple is the largest gainer,
Boeing is the largest loser.
And the way that comes together because Boeing is such a -- it's a -- we've said this many times here tonight, it is a weighted index based on price,
not market cap. So you get this sort of 4.3 percent fall in the Dow that's not counteracted by any large particular one on the other side, and Boeing
then takes the Dow of some 100 points. But it is off the lows of the day and it's progressing a little forward. We will have our profitable moment
after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. The opening of the new Istanbul Airport has set me thinking about how these hubs have changed. The
traditional hubs of course have Asia and of Europe, London, Heathrow, Amsterdam have been supplanted, we know, by obviously Dubai, Abu Dhabi to
some extent and Doha with Qatar Airways.
But this play by Turkish is perhaps amongst the most interesting. Turkish has built an airline that flies to more places than anyone else. And the
hub, it's almost like the hub that grew and nobody realized. The Turkish and the Istanbul hub has now taken on a new significance.
And if things continue as they do, then Turkish will become the largest hub in the world. It will overtake Dubai accordingly, which again will be
fascinating because Turkish is a government-owned airport. The airport is similarly government owned which raises the question of how these massive
hubs in the gulf and in Istanbul will all battle against each other.
And yes, indeed, traffic is growing, but is it growing at the rate fast enough? We'll discover that in the future. But it's the travelers' dream
with so much choice. And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in London. Whatever you're up to in the hours ahead, I hope
it's profitable.
(BELL RINGING)
The Dow is down! The day is done!
END
END
