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Quest Means Business
Tankers Attacked At The Global Choke Point For Crude Oil; The Chairman Of The House Intelligence Committee Warns Deep Fakes Are Coming; Beijing Denies Involvement In A Cyberattack That Coincided With Protests In Hong Kong; Mike Pompeo: Iran Responsible for Tanker Attacks on Gulf of Oman; Amanda Knox to Speak on Trial By Media; Mexico Sends National Guards to Border to Stop Migrants. Aired 3-4p ET
Aired June 13, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ZAIN ASHER, CNN ANCHOR: Despite geopolitical tensions, the Dow has been firmly in the firmly in the green pretty much all day. We are ending as we
gear towards the close. We are hovering around 60 points or so. We were down one point ever so slightly, but then it continued to soar well into
the green. We are the final hour of trading on Wall Street.
As I mentioned, we had a small bit of red around 11:00 a.m., but now, the Dow is firmly higher. Energy shares are leading the way. Those are the
markets and these are the reasons why.
Tankers attacked at the global choke point for crude oil. The U.S. lays the blame firmly at the door of Iran. And Telegram blocked. Beijing
denies involvement in a cyberattack that coincided with protests in Hong Kong; and lawmakers warn: experts so-called deep fakes could actually
inflict irreparable damage on businesses.
Live from the world's financial capital here in New York City. It is Thursday, the 13th of June. I'm Zain Asher, in for my colleague, Richard
Quest, and this is QUEST MEANS BUSINESS.
Good evening. Tonight, the U.S. claims it now knows who is behind a mysterious attack in the world's most important shipping route for crude
oil. In the last hour, Secretary of State Mike Pompeo pointed the finger of blame right at Iran. Two tankers were sabotaged while sailing through
the Strait of Oman.
One of them the front Altair oil tanker reported three explosions. The second, a Japanese-owned chemical tanker claimed it was attacked twice with
some sort of shell.
The U.S. Navy says it spotted an unexploded mine attached to one of the vessels. No one is claiming responsibility, but speaking a short time ago,
Mike Pompeo claimed U.S. Intelligence indicates no one but Iran could have carried out these types of attacks.
(BEGIN VIDEO CLIP)
MIKE POMPEO, U.S. SECRETARY OF STATE: It is the assessment of the United States government that the Islamic Republic of Iran is responsible for the
attacks that occurred in the Gulf of Oman today.
This assessment is based on Intelligence, the weapons used, the level of expertise needed to execute the operation, recent similar Iranian attacks
on shipping, and the fact that no proxy group operating in the area has the resources and proficiency to act with such a high degree of sophistication.
(END VIDEO CLIP)
ASHER: Nic Robertson is joining us live now from London. So Nic, just give us more context as to the sort of Intelligence that the U.S. Secretary
of State is basing his belief that it was Iran who indeed carried out these attacks.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, he is not telling us what that Intelligence is. What we do know and how the situation has
changed since four weeks ago, when there was attacks -- similar attacks -- we're told on for civilian tankers at a port near Fujairah in the United
Arab Emirates.
What has changed is, there's a lot more U.S. military assets in the area. Indeed, they were able to dispatch the USS Bainbridge to the scene that was
quite close by very quickly, quickly enough to help pick up and take on- board 21 of the crew members who were forced to evacuate one of the ships.
So that leaves the door open there that potentially the U.S. has been scrutinizing that area much more closely than it was before. What is
interesting and different also about this attack was these vessels were on the move. We do understand that at least one mine was found on the side of
one of the vessels.
We know according to accounts from people on the vessels, there were three explosions in one case, two explosions in another some sort of shell was
how one of the witnesses described the explosions that he was witness to.
But precisely what evidence physical evidence or satellite intelligence or eavesdropping intelligence Secretary of State Mike Pompeo has. He didn't
make that clear. In a scenario like this, he may not want to be telegraphing to Iran in this case, you know, precisely how the United
States has come about this information.
But that secrecy over how the information is gathered, and precisely what it is, of course, is part of what Iran plays off of here.
ASHER: So just talk to us a bit more about the timing of these attacks. Here you have a Japanese-owned tanker attacked at a time when the Japanese
Prime Minister Shinzo Abe has been in Iran to meet with the Supreme Leader and President Rouhani. Just explain to us the timing of these attacks.
ROBERTSON: Well, indeed, the Iranians give us to believe that Shinzo Abe was actually meeting with the Supreme Leader Ayatollah Ali Khamenei, and we
know what Ayatollah Ali Khamenei said. He said that, you know, that he is not -- President Trump is not a person to deal with.
[15:05:10] ROBERTSON: In essence, President Trump is not somebody who can be trusted to deal with. So that was the sort of context of the
conversation that the meeting that was being held by Shinzo Abe was really to get to these current tensions, and to listen to Iran's concerns.
Iran is, of course, under extreme economic pressure at the moment. These meetings came about because of the spike in tensions four weeks ago, when
those four other ships were targeted at a time when the United States and Iran were exchanging very tough language over the movement of U.S. Naval
assets into the region.
So Shinzo Abe's mission was really to sort of de-escalate the situation. He didn't -- he certainly didn't seem to get that reception from the
Supreme Leader, because he didn't seem to be intent on de-escalating with President Trump and the United States right now.
So in that way, the mission has been something of, you know, a failure, and it might raise the question, who would dare if you will? You know,
Secretary of State Pompeo says Iran did this. But would Iran really dare to target a Japanese vessel when the Japanese Prime Minister is meeting
with their Supreme Leader? Well, you know, part of the answer to that may be that this was not something that was sanctioned by the leadership in
Iran, but sanction by one of its military wings.
ASHER: Very interesting. All right, Nic Robertson live for us there. Thank you so much. Appreciate that. Okay, so news on the attacks and the
U.S. decision to blame Iran have sent price of crude oil higher.
Oil spiked as much as four percent before coming back down ever so slightly. Investors predict that rising geopolitical tensions in the
Middle East could disrupt oil supplies. The attack is certainly unsettling trade along one of the world's most important oil trading routes.
The Gulf of Oman is the sole waterway to the oil-rich Persian Gulf region at its mouth, the Strait of Hormuz, where some 18 and a half million
barrels pass through every single day. That's roughly 30 percent of all seaborne traded crude oil.
Branko Terzic is the President and CEO of Branko Terzic and Associates. He joins us live now from Washington. So Branko, thank you so much for being
with us. So how do you think this will affect oil prices in the short term, do you think?
BRANKO TERZIC, PRESIDENT AND CEO, BRANKO TERZIC AND ASSOCIATES: In the short term, of course, it makes prices go up. People are nervous, and they
will bid the price up. In the long term, the prices have to rely on supply and demand. If the Gulf does restrict the flow of oil that will restrict
the supply and that'll have an effect on the price.
So we don't know in the long term what will happen, but we do know in the short term, there is obviously nervousness. This has happened before.
ASHER: So you've got 30 percent of the world's crude oil basically transported through the Strait of Hormuz, if that strait is choked off or
limited or unable to be accessed, what sort of impact would that have on global trade?
TERZIC: Well, you mentioned the statistics that 30 percent of seaborne travel is through the Gulf, that's predominantly to -- not to the United
States and not to Western markets. So the markets that do buy through from the Gulf sources will be the most affected. Europe, for example.
China is the world's greatest importer of oil and they of course, had now have a fleet in the Arabian Sea. So they will have a significant interest
in this as well. And we have the question of who would make up that supply? Well, America has a sufficient opportunity to make up the supply
with our shale oil. It's a very, very complicated dynamic that will take some time to sort out.
ASHER: Let's just talk about the timing of this in terms of what else is impacting the oil market right now. You've also got -- I mean, obviously
there are fears now about oil supply. You've got oil prices being pushed higher because of this, but it comes at a time when you've got U.S.
sanctions on oil producers in both Venezuela and Iran. So just talk through us about the timing. How does this fit into other things that are
impacting oil prices right now?
TERZIC: Well, the oil prices have been low since last January. They hit their bottom, excuse me, in January, they've been coming up a little bit.
Right now, we've had steady U.S. production. We've had a slowdown in global demand, and the largest purchaser, China has had sort of weak
economic data.
So there isn't a lot of positive news to increase oil prices and of course against that, as you mentioned, Zain, we have the sanctions against Iran,
which are now being interpreted even more tightly than they were a month ago.
[15:10:05] TERZIC: And we have the Venezuelan situation, which I think is less people are concerned about the Venezuelan oil, because we figured
that's not coming in the market for a long time.
ASHER: So Secretary of State Mike Pompeo, as you know, has just come out and said that, you know, based on U.S. intelligence, he believes that Iran
is responsible for this attack. As tensions between the United States and Iran continue to increase, what sort of impact does that have just sort of
all that sort of geopolitical tension surrounding this, what sort of impact does that have on oil prices as well?
TERZIC: Well, the real question is, what is the impact on the behavior of the Iranian government? They are down $10 billion since the November
sanctions were put into place. That's a lot of money. They're looking at even further restrictions in sales.
And you know, this kind of rash action might be from one of the factions of the Revolutionary Guard or somebody. But it's very difficult to imagine
that a large country like that is going to just sit by and allow sanctions to destroy the economy, something is going to have to give.
We remember pre-World War II, the U.S. sanctions on the Japanese oil supply caused Japan to take heinous acts by attacking the United States, some
historians say. So we have a serious concern as to what Iran will do as much as what will be the impact on global oil prices.
ASHER: All right Branko Terzic live for us there. Thank you so much. Appreciate that.
TERZIC: Thank you.
ASHER: The United Nations Security Council is expected to discuss the attack on the two tankers. That meeting will be held next hour, I want to
bring in John Kirby. He is joining us from Washington. He is a former State Department spokesperson and a military and diplomatic analyst for
CNN. John, thank you so much for being with us.
So Mike Pompeo has come out and said that he believes it is Iran and that Iran is to blame for these attacks. Just walk us through the Intelligence
that you believe that that is based on?
JOHN KIRBY, CNN MILITARY AND DIPLOMATIC ANALYST: My guess is -- not having seen the Intelligence, it's based on perhaps overhead Intelligence
reconnaissance imagery that they might have. Certainly, it's based on the knowledge that this was at, you know, that they found a limpet mine, a
magnetic mine attached to one of the ships.
We have imagery of that unexploded. That is exactly the same kind of mine that we believe that the Iranians used to attack those tankers off of the
UAE just a couple of weeks ago. So that's consistent with their modus operandi. Certainly, it's consistent with their general concern in that
part of the Gulf of Oman.
So I think it's been a mosaic of information that they have, not to mention that, you know, we've had a chance to talk to some of the sailors that came
off one of those tankers that was on board one of the U.S. Navy destroyers. I have no doubt that they were talking to those sailors about what they saw
and what they heard, what their perceptions were of the attacks when it happened on their ships. So I suspect it's a mosaic of information that
has led them to this.
ASHER: I was talking to one of our reporters just about 10 minutes ago about the timing of this. She has given that you have a Japanese-owned
tanker that explodes that's attacked at a time when Shinzo Abe is in Iran meeting with President Rouhani and the Supreme Leader.
I mean, just because the Secretary of State believes that Iran is responsible, that doesn't necessarily mean it is the leadership of Iran
that sanctioned these attacks, does it?
KIRBY: Boy, that is a great question, Zain. I think you hit the nail right on the head. We have to understand that the Iranian Revolutionary
Guard, the Naval component, which is most likely responsible for these attacks doesn't report to the civil state government. They don't report to
Rouhani. They don't report to Zarif, the Foreign Minister, and they sometimes act unilaterally without advising anybody in the government.
They kind of report directly to the Supreme Leader, but even he has a very loose command and control over what they're doing. So I think it is
entirely plausible that this attack was conducted unilaterally by the IRGC who Trump designated as a terrorist group a few weeks ago, and not
necessarily in coordination or consult with the whole government.
It clearly wouldn't be in Tehran's -- the civil state government's interest -- to have an attack on a Japanese tanker with the Prime Minister of Japan
right there in the city. So I think that is a very good question and I would not be surprised at all to find out that it was a unilateral action.
ASHER: Okay, so going forward. What does this mean, though, for tensions between the United States and Iran?
KIRBY: Great question. So I suspect now the administration is considering what their options are, is it just going to be economic sanctions?
Increasing the economic pressure? Pompeo said today that the efforts still remains a diplomatic and an economic one, but we have added a lot more
military forces to the region in addition to what we already had, which was sizable.
So I suspect they're also looking at potential military options, though, I guess, that they would prefer not to have to use those. So I think they're
going to be looking at the range of options.
I think they're also going to be as you rightly pointed out, Zain, marshaling the international community bringing this up at the UN trying to
increase international pressure. And I suspect that's going to be the first arm that they try to get, which is international sanctions, you know,
international pressure, not just U.S. unilateral pressure.
[15:15:19] ASHER: So just given the geopolitical tension in the region, the Gulf of Oman and the Strait of Hormuz, I mean, how does shipping
companies guarantee the safety of seafarers at a time like this?
KIRBY: It's very difficult to do that. These tankers are not equipped for self-defense. Now, you know, in the age -- I said age -- back a few years
ago when piracy was big off of Somalia and off Yemen, some civilian commercial vessels were arming themselves and creating some sort of generic
force protection capability. These tankers don't have that. So there's no way to defend themselves.
It is possible that one outcome of all this could be some international naval escorting of tankers in and out of the Gulf. When I was a young
officer, an Ensign in 1988 that's what I did. My frigate escorted tankers in and out of the Strait of Hormuz, you could see a return to that possibly
if there's a considerable increase of Naval assets in the region, but they don't have the ability to protect themselves.
And look about a third of the global oil supply go in and out of the strait every single year. It is a choke point. It is also a crucial oil waterway
for the world. So I think the Iranians are trying to send the message that while they probably won't shut the straight down, because they would
suffer, they're certainly trying to send the message that they could definitely make that oil flow much more precarious.
ASHER: All right, John Kirby, thank you so much. Appreciate that.
KIRBY: My pleasure.
ASHER: The Chairman of the House Intelligence Committee has a warning, deep fakes are coming and social media companies can't wait until after the
next election to do something about it. Plus, the latest. It's all about security on the high seas. I was just speaking to Admiral John Kirby about
a suspected sabotage in a key Middle Eastern route. I am talking to the head of the world's largest international shipping association. That's
next.
(COMMERCIAL BREAK)
ASHER: The U.S. Congress held its first hearing on deep fake videos Thursday. Officials are worried about the next evolution of election
hacking. Now social media companies can't or won't do enough to stop it. The deep fakes use artificial intelligence to show people doing or saying
things they didn't actually do.
A law professor who testified explained how deep fakes can inflict damage in the corporate world.
[15:20:10] (BEGIN VIDEO CLIP)
DANIELLE CITRON, PROFESSOR OF LAW, UNIVERSITY OF MARYLAN: We can imagine the deep fake about sort of the night before an IPO, timed just right, with
the CEO saying something that he never said or did basically admitting to the company was insolvent. Right? And so the deep fake, it's the night
before the EPO could upend the IPO right? The market will respond far faster than we can debunk it.
(END VIDEO CLIP)
ASHER: All right, Donie O'Sullivan has been following these hearings. So what can actually be done? I mean, that's the scary scenario that she
paints there. What could be done to combat the effects, do you think and detect them?
DONIE O'SULLIVAN, CNN BUSINESS REPORTER: Yes, of course. So we have been speaking to some researchers based out in California who are trying to
build a system to detect these deep fakes. I think the fear though is, is that the technology to make the deep fakes is going to sort of out run the
technology to detect them.
It was interesting there to hear that professors speak about these sort of dangers to corporations that this technology could pose, you know, we've
heard a lot about how it could be used in the electoral process both on this side of the Atlantic and around the world.
But you know, the sort of scenario she outlines there is something that you can really imagine happening, you know, just the night before an IPO that a
video drops like this. And by the time that it's debunked, or if it's even ever debunked, the effect will have already kicked in.
ASHER: So it just in terms of combating that, because obviously that is a dire scenario as well. Is it -- whose responsibility is it? Is it private
companies? Is it the government? Is it lawmakers? What do you think?
O'SULLIVAN: And that partially was, I guess, the point they had these hearings today is Congress is really trying to get their hands around this
and try to figure out what to do about this new threat. This is technology that's really only sort of come on the scene over the past 18 months to two
years. So it really is sort of an unprecedented problem.
And I think what we will start seeing as the result of these hearings and sort of heightened interest in Washington as a result of briefings from the
Intelligence community who say that, you know, America's adversaries could use this technology, we will see lawmakers asking more questions of Silicon
Valley.
Facebook, for its part has said that, you know, they are funding some research into detection and how to handle this problem. The other
companies haven't said a whole lot about this, I think the truth is, is that everybody is still trying to figure this out.
But I think nobody wants to be caught off guard the way they were in 2016, with the sort of fake news epidemic of bots and trolls, and all that sort
of stuff that was going on, but prior to the election, they want to get out ahead of us, particularly here in the U.S.
ASHER: So for ordinary consumers who use social media, is there any way to detect whether a video is deep fake or not? Because when you know -- when
the video came out of Mark Zuckerberg, it was 90 percent believable, but not a hundred percent. Because oftentimes, what they're saying is so
unbelievable that you sort of realize there's something not quite right about this.
O'SULLIVAN: So there are -- I mean, there are steps, you know, you can take on certain, deep fake videos that you can sometimes see, you know, the
lips can be a bit off, the eyes or the face. But I think really, and probably a good general rule whether it's deep fake or any information,
particularly on social media these days is just to be skeptical, because, you know, it doesn't have to be --
ASHER: We're skeptical anyway because we work in news.
O'SULLIVAN: Absolutely.
ASHER: You have to be with this job.
O'SULLIVAN: Too skeptical. But we -- you know, I think when it comes to - - it doesn't have to be technology like artificial intelligence that creates a sort of impressive fake video in order to trick people. We saw
the Nancy Pelosi video a few weeks ago that wasn't using artificial intelligence at all. That was just a video slowed down using editing
software that's been around for decades. And that still had the effect of going viral.
So I think whether it's a deep fake or if it's a Facebook post, just be skeptical of what see.
ASHER: All right. Good advice, Donie O'Sullivan live for us. Thank you so much. It's not just the weight of Washington that Silicon Valley should
fear, cracking down on tech is in vogue and State Attorneys Generals in the United States are gearing up to get in on the action.
This week, Democrats in the U.S. House of Representatives kicked off their sweeping investigation into the power of tech firms. Meantime, the
Department of Justice and the Federal Trade Commission have divvied up the biggest names.
The D.O.J. is going to be looking at Apple and Google, the FTC is going to look at Amazon and Facebook. Now, the top floor men and women in at least
a dozen states are preparing their own inquiries while Washington can make sweeping structural changes and levy big fines, these states can nip at
tech's heels by bringing competition violations through the courts.
Hadas Gold is following politics, media and business, and she joins us live now from London. So Hadas, just walk us through what specifically these
Attorneys Generals across the United States want from the D.O.J. and the F.T.C.
[15:25:00] HADAS GOLD, CNN BUSINESS REPORTER: Yes, Zain, this can be a little bit confusing because while there are the Federal antitrust rules,
every state also tends to have a lot of their own antitrust and competition rules. And that's where you see these State Attorney General sometimes
bringing lawsuits against big companies.
We've actually already seen this happen in the past and states have actually started to become sort of the front line for a lot of these cases.
For example, there are already State Attorney Generals who are trying to block the Sprint and T-Mobile attempted merger.
But now this week, about 41 Attorneys Generals from different states, including from D.C. and Guam, they signed a letter to the F.T.C. urging
them to take a tougher stance on large tech platforms, saying that all of this ownership of personal data makes them pretty much insulated from
competition making it harder for startups to get up and into this business.
Now, this is where we're seeing a lot of this action coming forward on taking a stance against big tech. Because as you know, the F.T.C. and the
D.O.J. or divvying up all these platforms, but the State Attorneys Generals, they want to work faster. And actually, there was a specific
quote from the Nebraska Attorney General that really stuck out for me and he said, we need to do as Attorneys Generals is to steal a motto actually,
from one of the big platforms for Facebook, they said we need to move fast and see whether we need to break things -- Zain.
ASHER: And so just in terms of what these Attorneys Generals though, want, I mean, are they looking for these -- some of these companies, which is
what a lot of people talked about in the past to be broken up, do they want to see Facebook broken up? What do they want?
GOLD: Some of them do. And some of them, they see this as a competition issue because if it affects their state directly, if there's a company in
their state that they feel as though is negatively affected, the competition is negatively affected by these big tech platforms, they want
action against that, and for a lot of these State Attorneys Generals, they feel that the Federal government does not move fast enough.
And they are now we are finally seeing in the last few weeks, the F.T.C. and the D.O.J. starting to get involved, the House Judiciary Committee is
starting the hearings on this. But that can be slow moving and oftentimes that you do see State Attorneys Generals actually teaming up with on
another four big cases, and also teaming up with the Federal government to bring these cases forward.
And once you have that sort of momentum building that can really help in a case like this.
ASHER: A lot of people say that the government has been slow to adapt. I mean, you intimated this as well, the government has been slow to adapt to
a rapidly changing industry. So what can the lawmakers do to keep up?
GOLD: Well, some lawmakers say that actually the rules currently on the books are enough in order to bring some of these antitrust cases against
the big tech platforms that actually they should utilize what they already have, instead of trying to bring in new rules to change this.
But we are seeing a move actually to try to bring in some new laws to protect consumers. Actually, in the last week or so we saw "The New York
Times" editorial board even advocating for a U.S. style, European GDPR. That is the personal data protection laws that we have here in Europe, "New
York Times" saying it's time for something like that in the United States.
And if you actually look at polling from consumers, they do have big concerns, especially about privacy. But actually, when you look at the
polling about whether consumers think that big tech needs to be broken up, it's not as high so maybe the way in is through personal privacy.
ASHER: All right, Hadas Gold live for us there. Thank you so much. Appreciate that. Turning to turmoil in Hong Kong. China's foreign
ministry is denying knowledge of a cyberattack against the encryption messaging app Telegram.
Its founder pointed out the attack coincided with some of this week's biggest protest in Hong Kong. Protesters use Telegram and other apps to
coordinate demonstrations without ticking off authorities. Telegram says the attack was powerful and originated from IP addresses inside China.
Beijing says it's completely in the dark.
(BEGIN VIDEO CLIP)
GENG SHUANG, SPOKESMAN, CHINESE FOREIGN MINISTRY (through translator): I don't know about the situation you speak of, but I can tell you here is
that China has always been opposed to any kind of cyberattack. China is also a victim of cyberattacks. We have always advocated that the
international community should maintain security of the internet space through talks and cooperation on the basis of mutual respect, equality and
mutual benefits.
(END VIDEO CLIP)
ASHER: And Thursday saw fresh clashes between police and protesters. Government offices in the financial district remain shut. Eighty one
people were injured in Wednesday's violent clashes between protesters and authorities. Hong Kong's Police Commissioner says his officers had no
choice but to use force.
And investors are concerned by all the turmoil and the extradition law as well. The Hang Seng ended slightly lower again Thursday. Some experts
say, the ongoing clashes may jeopardize Hong Kong's reputation as a global financial center.
On Wall Street, U.S. stocks coming down ever so slightly. The major indices bouncing back from two days of modest losses. Energy stocks
rallied after a jump in oil price. You can see that the Dow there, we've got 30 minutes or so for trading. The Dow is up about 30 points or so.
When we come back, the U.S. claims Iran is behind attacks along a key shipping route in the Middle East. I'll speak to a shipping industry
official who is urging leaders to deescalate tension before the situation get any worse.
[15:30:00]
(COMMERCIAL BREAK)
ASHER: Hello, everyone, I'm Zain Asher, there's more QUEST MEANS BUSINESS in a moment. When the shipping industry warns an increase in attacks is an
urgent problem. And Tyson Foods gets in on the fake meat craze with the chicken free chicken nugget. Before that though, these are the headlines
we're following for you at this hour.
The U.S. is blaming Iran for attacks on two tankers today in the Gulf of Oman. Secretary of State Mike Pompeo said it was too sophisticated for any
proxy group in the region to pull off, but he didn't offer evidence for the claim. Both crews were rescued, the UN Security Council meets next hour on
the attacks.
Amanda Knox is back in Italy for the first time since her acquittal on murder charges there in 2011. She'll be there -- Knox spent four years in
prison for the murder of fellow student Meredith Kercher. Media outlets made a sensation of her trial over years of hearings and appeals.
Mexican officials say they're acting quickly to send National Guard forces to their southern border as part of a negotiated agreement to avoid U.S.
tariff increases. Mexico agreed to reduce the flow of Central American immigrants to the United States. The deal gives Mexico 45 days to show
results.
Returning now to our top story, the second major attack in a month along the world's busiest oil shipping route. The U.S. is blaming Iran for
sabotaging two tankers sailing along the Gulf of Oman. The incident has shaken energy markets, sending crude oil prices climbing.
[15:35:00] Industry leaders warn the increase in attacks and escalated threats are an urgent concern. Joining me live now from London, Jakob
Larsen is the head of Maritime Security for BIMCO; the world's largest international shipping association. So Jakob, thank you so much for being
with us. So just in terms of in-ness --
JAKOB LARSEN, HEAD, MARITIME SECURITY, BIMCO: Thank you --
ASHER: Climber of extreme geopolitical tensions, what can shipping companies do to keep seafarers safe?
LARSEN: Well, shipping companies can take a number of steps to reduce the risk to the ships and crew. One step which is often mentioned is of course
to completely stay away from the area. And of course, that's an option, but it's not an option that many ship owners really want to take.
And you could say that, if you did that, you would also sort of give the wind to those that are trying to interrupt international trade. So, I
think most ship owners, they are looking to the advice that we and I think other associations put out. So watch that way you're going.
When you're in port, use your propellers randomly, use your bow thrusters(ph), use your eco-sounder to create a lot of disturbance so as to
avoid vintage mines being put onboard the vessel. And when you're at sea, keep extra lookout, keep close dialogue with the military authorities.
There's a voluntary reporting area established for the whole region which is administered by the U.K. Maritime Trade Operations, and we encourage all
our members and international shipping generally to follow the recommendations and report to U.K. MTO so they can have veto which is as
good as possible.
ASHER: And you know, this might seem extreme. But if tensions get that much worse, can you see a future whereby certain tankers are escorted by
military Naval vessels?
LARSEN: Yes, I think that's a -- there's percentage in that. I mean, there's something that we have seen before in the aftermath of the Iran --
Iraq war. Back in the '80s, we saw this scenario unfolding in the Persian Gulf and it might just happen again. It all depends on what the next steps
are from the U.S. and whomever is behind these attacks.
ASHER: So just in terms of when an attack actually happens, what procedures are there in place? I mean, I'm sure that a lot of shipping
companies I assume are somewhat prepared for this sort of worst-case scenario.
LARSEN: Yes, I think most ship owners, they have their emergency response plans. It's all radiate, part of what you are required to have in
accordance with international regulations, so most ship owners have this in place and they drill these scenarios regularly. So for a ship owner going
into this area, I think the prudent thing is to really look into what are the risks and what would happen to the vessel in case it's struck by a
shell, a missile or a mine or whatever has actually hit these vessels.
You can take certain steps, you can keep your crew above the water line, you can ensure that the watertight integrity of the vessel is as good as
possible, and you go in, and as I said before also keep sharp lookout and then keep the -- keep a liaison with the U.K. Maritime Trade Operations.
ASHER: So when you have a situation whereby 30 percent of the world's oil suppliers travel through the Strait of Hormuz, you know, if tensions
increase significantly, you know, what does that mean for global trade?
LARSEN: Yes, what we have seen already is a spike in the oil prices, and if tensions continue, oil prices will probably go up a bit further. And we
all know that this hampers the general economic activity in the world, and that again has an influence on production, which again influences on world
trade.
So that's a big concern. That aside, of course, the tanker industry, all the oil tankers operating in the area, they would be particularly concerned
with the scenario we are seeing right now and with the potential scenarios we see for the future.
ASHER: All right, Jakob Larsen live for us there, thank you so much, appreciate it. All right, still to come, Boris Johnson is one step closer
to taking up residence at number 10 Downing Street. Have a report from London for you after the break.
[15:40:00] (COMMERCIAL BREAK)
ASHER: Boris Johnson is the clear frontrunner in the race to succeed Theresa May as British Prime Minister. He won the first round of the
contest to be the leader of the Conservative Party by a clear margin, with the backing of 114 Tory MPs, his nearest rival Jeremy Hunt trailed with 43
votes.
Phil Black is in London for us. So Boris Johnson felt -- received 114 votes. Is there anything at this point that you can foresee that will stop
Boris Johnson from becoming Britain's next Prime Minister.
PHIL BLACK, CNN CORRESPONDENT: Hi Zain, not in this first stage of the leadership election, you wouldn't think. So this first stage involves just
members of parliament, Conservative members of parliament. With that sort of support, if Boris Johnson maintains it, then he will go almost certainly
to the final two names which are then voted on by the broader Conservative Party membership across the country.
But even for Boris Johnson with a reputation for often conflicting political self-harm, it's difficult to see how he could lose so much
support over the coming week or so that he wouldn't make it down to the final two. After that, however, when he goes out to the broader party
membership, he campaigns, he meets with voters and speaks to journalists.
Under those circumstances, there's a theory that says Boris Johnson's unpredictability could in that situation get him into trouble. But at this
stage, the result today proves what's being suspected, and that is that it is his contest to lose at this stage, Zain.
ASHER: So, as you mentioned, he is unpredictable, obviously, he is fairly divisive. He's of course extremely pro-Brexit. I'm just curious in your
opinion, what do European leaders -- what do the leaders of Europe have to fear if Boris Johnson does become Britain's next Prime Minister?
BLACK: Well, Brexit credentials from the Conservative Party's point of view really matters in this leadership election. And particularly where
the contenders stand on the issue of deal or no deal. Are they prepared to walk away from the European Union without a deal? And Boris Johnson says,
yes, he is.
Come October 31st, the next deadline in the Brexit process, if there's no deal in place, he says Britain will leave regardless. Now, it's unclear
whether or not that is in fact possible. He is talking about trying to come to some sort of new arrangement with Europe, but it's also unclear
whether or not that has any chances as well because Europe has been pretty clear on this.
That is, they spent two years negotiating with the British government to come up with a very detailed withdrawal agreement that would allow Britain
to leave in an orderly way. From their point of view, that negotiation is complete. The withdrawal agreement is on the table and they've
consistently said they are not prepared to renegotiate that document.
And it's very likely that European leaders and officials will maintain that position. So, what it means is that Boris Johnson is promising to try and
renegotiate, which doesn't seem likely, and at the same time, he's promising to leave without a deal.
It's also not clear that parliament will allow him to do so. So even though, he can't guarantee being able to deliver these things, it's
important because this message really resonates with Conservative Party members and members of parliament. And that's why he's performing so
strongly, and it's why he will not be easy to handle for European leaders if he does become the next British Prime Minister, Zain.
[15:45:00] ASHER: All right, Phil Black who is in London for us, Phil, thank you. A freelance have Fiverr in the splash on Wall Street today, its
CEO tells us how the site works and where it wants to go, next. And the meat market is going green, two of the biggest names in business unveil
plant-based products. That's next.
(COMMERCIAL BREAK)
ASHER: Hi-fives all around for Fiverr. The Israeli start-up is soaring on its U.S. market debut. Shares were up more than 80 percent, they opened
$26 each on the New York Stock Exchange, $24 percent jump above the IPO price. Fiverr is an online marketplace that connects companies with
freelances, you can book tasks like for example logo design, translation, even 3D printing services.
Its CEO Micha Kaufman told Alison Kosik what makes Fiverr stand out in the gig economy.
(BEGIN VIDEO CLIP)
MICHA KAUFMAN, FOUNDER & CEO, FIVERR: I think as a company, the way we should be thought of is as a skilled platform. And I think that, that is
very different than other economy platforms. And we've been demonstrating very nice growth for almost a decade, and this is what we plan to do in the
future.
And there's a lot of hail wind in the market forces, freelancing is getting much more adoption. Yet, this whole market is giant, it's over $100
billion in the U.S. alone in the categories in which we operate in right now. It is still low single digit percentage online. The revolution is
just starting.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Walk us through exactly what Fiverr does.
KAUFMAN: So, Fiverr is basically a market that connects freelancers with businesses of all sizes for their digital needs. Things like marketing and
advertising, videography, website design, voiceovers, anything you can imagine, it's the everything store for digital services. But the
experience of buying a digital service on Fiverr is very similar to shopping on Amazon.
You browse, find something you like and you click order. It's that simple. You don't hire anyone. You buy very well defined products.
KOSIK: What about commission? Because this is where a lot of your revenue is coming from. What kind of commission do you take?
[15:50:00] KAUFMAN: So, basically, out take rate is slightly over 26 percent which is an industry-leading take rate. And we take the commission
mostly on transactions.
KOSIK: And does that go down at all as the -- as the seller, you know, earns more money for let's say one company?
KAUFMAN: No, it's actually the same take rate and here's why? For sellers, for the first time in the freelancing history, they don't need to actively
bid to win projects. They come into Fiverr, they create a profile, they use our tools to product their offerings, and they sit back and relax. We
do the rest of the work, we source the lines --
KOSIK: Isn't freelancing complicated when it comes to tasks?
KAUFMAN: Well, this is -- this is between freelancing and the fact, that's authorities. We are the platform that just connects those freelancers. We
don't hire them.
KOSIK: What concerns do you have about regulation and the impact of regulation on your company and its growth?
KAUFMAN: I think it's very clear the relationship between Fiverr and its freelancers is such where we don't employ them, and that is very clear.
So, I think that the current relation doesn't actually apply to us.
(END VIDEO CLIP)
ASHER: Tyson is trying to take a bite out of the fake meat market. They announced two new products Thursday, a chicken free chicken nugget made of
-- let me show you, pea protein, egg whites, flaxseed and bamboo fiber, and a blended party of meat and veggies. Shares are -- Beyond Meat which --
Tyson was actually an earlier investor, fell as much as 4 percent pre- market on the news there, down about 1 percent.
Paul La Monica is joining us live now. Paul, step into my kitchen here --
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, indeed, not a bad look, smells suspiciously like a real chicken.
ASHER: That is actually real chicken. So, just walk us through this, so with Tyson Foods, can they really at this point do you think -- I mean,
obviously, they're huge. They pretty much own the meat market in the United States. But, can they really compete with Beyond Meat at this
point, do you think?
LA MONICA: Yes, I think it's still very early stages for the plant-based craze that we have right now. And Tyson is probably smart to be trying
to get into it. As you pointed out, they actually were an early investor, they probably wish they sail --
(CROSSTALK)
ASHER: Hey, right, yes --
LA MONICA: Beyond Meat has surged. But what's interesting here is that Tyson, you know, egg whites, last I checked, that egg probably came from a
bird. So, it is not entirely plant-based --
ASHER: Right --
LA MONICA: In the way that Beyond Meat and Impossible is --
ASHER: So, this sort of -- Tyson is doing a sort of hybrid --
LA MONICA: Is a bit of a hybrid, yes, exactly --
ASHER: Yes, they're doing the hybrid thing. So, do you think that this whole sort of plant-based meat market that we're seeing explode in the
United States, is it becoming overcrowded? You've got KFC getting in on the game, you've got Tyson getting -- Nestle is even trying to get in, what are
your thoughts on that?
LA MONICA: Yes, Nestle is going to be launching its own product, that's going to be very interesting to see how that affects Beyond Meat stock and
what happened to Impossible as well, Impossible in some respects may be more well known to many Americans because they have the Impossible Whopper
at Burger King.
But Impossible still doesn't have the distribution in grocery stores the way that you're going to see with Nestle when they launch and Beyond Meat
already having their products in many grocery stores.
ASHER: I see.
LA MONICA: So, I think the biggest issue right now is that this is a legitimate, undeniable food trend. People want to eat healthier, they also
want to eat in a way that may be more favorable to the environment.
ASHER: Right --
LA MONICA: In doing that through these plant-based types of products, I think will be good. But in the same way, I'm going to date myself here.
In the late '90s where we didn't need to have 75 different alternatives to Amazon because there was only one Amazon that really survived and thrived -
-
ASHER: Yes --
LA MONICA: We probably don't need tens of dozens of --
ASHER: Right --
LA MONICA: Plant-based meat companies.
ASHER: So KFC is getting in, they've got a new sort of meat product they're calling the Imposter, I love that name, but here's my question, if
you're vegan, do you really go to KFC to buy food?
LA MONICA: It is a great question. I think that what a lot of these restaurant chains are hoping is that the fashionable term these days seems
to be flexitarian, which I find amusing because --
ASHER: Yes --
LA MONICA: I'm an old school guy, I still call them omnivores, you eat meat and you eat plants. You eat --
ASHER: Right --
LA MONICA: Vegetables, but I think people are increasingly wanting the texture of meat, but without all the side effects --
ASHER: Products --
LA MONICA: Of meat, red meat in particular --
ASHER: Right --
LA MONICA: Also white meat for chicken, but what's going to be interesting, yes, if you go to KFC, do you really want something made out
of fermented fungus, and I think that remains to be seen.
ASHER: And I actually want to make it clear to our audience that KFC is launching the Imposter in the U.K. for now --
LA MONICA: Yes, we don't know if it's coming to the U.S. just yet.
ASHER: Right, so when you think about -- just to get it back to the markets ever so slightly, when you think about Beyond Meat and just how
much it's surged since its IPO, over 250 percent or so above its IPO price. That is quite appealing for short sellers, don't you think?
LA MONICA: Yes, I think that one of the problems is that the volume for Beyond Meat, the number of shares available is still relatively small. And
that's one of the reasons why the price has been able to pop so dramatically as you have that low float.
[15:55:00] That makes it harder to short as well, so it's going to be fascinating to see whenever that lock up period expires, and insiders are
allowed to sell in a couple of months, is there going to be this wave, an unloading of Beyond Meat's shares because some of these investors are going
to be licking their chops so to speak --
ASHER: Yes --
LA MONICA: And saying, hey, I'm going to cash in now because you know, the stock is up dramatically --
ASHER: Yes --
LA MONICA: From that $25 --
ASHER: Of course --
LA MONICA: IPO price.
ASHER: So, when you think about a company like Beyond Meat and just how many different companies are jumping on the bandwagon on this especially
after seeing how successful they have become. What can they do to continue to stand out?
LA MONICA: Yes, I think that when you're a company like Beyond Meat, obviously, you want to have as many different restaurant partners as
possible, so the fact that they are working with Tim Hortons, which is a corporate cousin of Burger King is good news for them.
So, it shows that restaurant brands, the owner of Burger King isn't going all in on Impossible so to speak. So, having as many partners as possible
on the retail side would be great because they do have that leg up on Impossible. Because you can buy and bring home and cook for yourself a
Beyond Meat burger.
Impossible you can't do that yet, unless you're going to Burger King or one of the Impossible partners, you're not going to be able to just take an
Impossible patty and grill it yourself, yet because they're still trying to figure out retail distribution.
ASHER: All right, Paul La Monica, I have to offer you take some of this home.
LA MONICA: And I am going to have to decline.
(LAUGHTER)
ASHER: Oh, I thought you said -- I thought you were going to say you were going to take it home. You're going to decline, OK --
LA MONICA: Oh, sorry --
ASHER: I'll give it to the crew here --
LA MONICA: Yes, the kids are likely in need --
ASHER: OK, thank you so much. There are just moments left to trade on Wall Street. We'll have the final numbers and the closing bell right after
this break.
(COMMERCIAL BREAK)
ASHER: Reminder of our breaking news this hour. The U.S. is blaming Iran for attacks on two tankers today in the Gulf of Oman. Secretary of State
Mike Pompeo said it was too sophisticated for any proxy group in the region to pull off, but he didn't offer evidence for the claim.
The U.S. Security Council meets next hour on the attacks. News of the attacks add the U.S.' decision to blame Iran have sent the price of crude
higher. Oil spiked as much as 4 percent before paring gains. Investors predict that rising geopolitical tensions in the Middle East could disrupt
oil supplies.
Right, turning to stock markets. The major indices have come down a bit in the past hour. Actually, they're back up again as well as up about 74
points or so. Energy stocks are the major gainers for the day. And that, my friends, is QUEST MEANS BUSINESS, the closing bell is ringing on Wall
Street, I'm Zain Asher in New York for you, the news continues right here on CNN.
(BELL RINGING)
END
