Return to Transcripts main page
Quest Means Business
Italy's Center-Left Party Seeks Coalition With Populists; Boris Johnson Gets Frosty Reception In Paris; Trump Compares U.S. Economy To European Peers; Bernie Sanders Releases Climate Change Program; Fire Burns at Record Rate in Amazon Rainforest; Jair Bolsonaro: Brazil Lacks Resources to Fight Amazon Fires. Aired 3-4p ET
Aired August 22, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST, QUEST MEANS BUSINESS: Sixty minutes before the closing bell, and you see what an interesting day it has been on
Wall Street. Opens high, goes in negative, then the rest of the session, it is above and beyond. The reasons, well, those are the markets. And
these are the reasons why.
Emmanuel Macron is playing bad cop to Angela Merkel's good cop on Brexit. Boris Johnson got a frosty reception in Paris. President Trump hits out
again at the Fed saying the U.S. should act more like Germany. And the Amazon is on fire. Brazil's President is blaming environmentalists.
We are live tonight from the world's financial capital, New York City. What a magnificent view of the Hudson. It is Thursday. It's August the
22nd. I am Richard Quest and I mean business.
We begin tonight with the political developments in Italy. They came, they saw, they compromised and possibly a deal may have happened. A political
alliance once considered unthinkable, perhaps a reality. The center left PD Party look set to form a government with its biggest rival, the right
wing, anti-establishment, Five Star Movement. They are longtime adversaries, cobbling together a coalition after Italy's government
collapse on Tuesday.
In the last hour, Italy's President confirmed those talks will now stretch into the weekend. The outgoing Prime Minister has already warned of a
spiral of financial instability. Barbie is with us. Barbie Nadeau is in Rome, and I didn't quite fully appreciate when we spoke in "Express,"
Barbie that putting these two together is oil and water. What hope can there be of success in any form of government, when they are diametrically
opposed on pretty much every policy?
BARBIE NADEAU, CNN CONTRIBUTOR: It's what they agree on, I think that's going to keep them together, if in fact, they're able to get through this
weekend and make the compromises they need. Their priority is to keep Matteo Salvini, the far right League leader out of power. And if they
compromise on that, and they can stay together with that goal in mind, a lot of people think that maybe this is just crazy enough to work.
But the President did not say with certainty that he thought this would work. He did not rule out that if they can't come up with a compromise
that will get them a confidence vote victory in Parliament that there wouldn't still be early elections.
So next Tuesday, they start talks again, they resume these talks, but it's not over quite yet.
QUEST: Okay, just to be to clarify, is at all possible for Salvini to put together some form of coalition? Is there anybody else who would now go
into coalition with him and his party?
NADEAU: Well, you know, he has been talking to -- you'll remember the name -- Silvio Berlusconi, who still has a party and who is now able to run
again. And there are also members of the far right that have expressed willingness to work together. But that seems too much of a long shot.
And the election results from last March 2018 didn't give them enough power to form a government then; he'd have to pull in some other smaller parties.
It would be a real motley crew of people, and it probably wouldn't last. But that's would be a real long shot. And that doesn't seem to be what's
on the table right now.
QUEST: Okay, so let's talk about how the Italian people are reacting, and what sorts of pressure is coming from the populace against these
politicians. I mean, the population you said last night, you know, they may be fed up, and they may be angry, but it doesn't seem to be having the
effect necessary to get a stable government.
NADEAU: Well, that's true. But you have to remember that Matteo Salvini has a growing base that is behind him, and those people who support Salvini
want early elections. They don't want a party, they don't want a coalition party, they don't want to compromise. They want to go to the polls and
they want Salvini to have power.
And so you've got that faction of people. And you know, Matteo Salvini, very much like Donald Trump has just spent the last 14 months on the
campaign trail rallies, you know, getting people excited about his movement and things like that. So he's got a real popular base.
So it's the other part of the population that don't want Salvini in power that are willing to say, okay, whatever works just as long as we keep him
out of the Halls of Parliament, essentially -- Richard.
[15:05:09] QUEST: Keep coming back to us to report what's more that's happening. Thank you.
After meeting the good cop, it was time for Boris Johnson to meet the bad cop. The British Prime Minister got a much tougher reception in Paris
today than he did from Angela Merkel in Berlin on Wednesday.
The French President told him when it comes to Brexit, it's solely for the U.K. to decide its destiny. Mr. Johnson tried to make a case for
flexibility and a new approach. He wants to remove the Irish backstop from the withdrawal agreement. But the French President was having none of it.
(BEGIN VIDEO CLIP)
EMMANUEL MACRON, FRENCH PRESIDENT (through translator): You know, I've always been depicted as toughest of the group but it's because I've always
said very clearly, a choice has been made, and it's pointless to try and not implement it thinking that since it had lasted for a while, we will not
apply the will of the British people in the end and go around it. I think our democracy suffer from the lack of efficiency and clarity.
(END VIDEO CLIP)
QUEST: And the pound has reached three week high against the U.S. dollar after it had a more accommodating tone from Chancellor Merkel in Berlin.
She gave Boris Johnson 30 days to come up with an alternative to the backstop, a workable way that you could continue without having a border
that would guarantee there would be no border.
Later clarifying he has until the end of October. Nina dos Santos is in London. So where do we stand tonight? I mean, Boris Johnson, as I look at
it is no closer to getting anyone to open the withdrawal agreement.
NINA DOS SANTOS, CNN EUROPE EDITOR: It doesn't look as though he is, but remember that the E.U. continues to make this point saying, well, look
organize, and let's get past the withdrawal agreement, the so-called divorce settlement, if you like, and then we can add all sorts of
reassuring language to the future political declaration of the type of relationship that will have going forward. That is the way the EU
approaches it.
When it comes to Boris Johnson's government, even before he was in government, he was clear and a number of Members of Parliament who have
various different views on the outcome of Brexit have also been clear that they are not comfortable with actually putting the U.K.'s name towards the
first document if it includes that contentious Irish backstop issue.
What we really saw today, Richard, was a question of who will blink first really. You had Emmanuel Macron saying, "Look, I've been depicted as bad
cop versus Angela Merkel playing good cop and giving Boris Johnson a bit of time to come up with credible alternative arrangements earlier on in the
week."
The reality is the other thing that he said was that he would also protect the integrity of the single market. And that prompted Boris Johnson to
say, "Well, look, don't worry, we're not going to put any hard border infrastructure back. The U.K. does not want to reestablish a border in
Ireland." That essentially means that it could be up to the E.U. to do it. Neither side wants to be the one that advocates that hard border and says
we have to put in place Customs checks.
QUEST: Okay, but let's look at the British side here. We know there's no appetite for no deal. Probably, he couldn't get that -- that would be --
Parliament would rebel. He can't get the existing deal through. Where does he go from here, Boris Johnson?
DOS SANTOS: Well, probably towards a no deal and in fact, even before that meeting with Emmanuel Macron, the Elysee Palace had already started
briefing earlier on this week to the French press that they thought a no deal was probably the most realistic base case scenario here.
There's a number of investment banks actually, interestingly enough over the last couple of days that have also raised the chances of a no deal.
Barclays is the one who says that they think no deal is the most likely option as a result of this. And people like Investec put the chances of a
no deal at 40 percent.
All of this hinges upon whether or not Boris Johnson is really just engaging in a bit of a public PR here essentially trying to say to the
British people, "I went there, I put my case forward, but they just didn't buy it. So come October 31st, it's a no deal."
QUEST: But Nina, if there is a majority in Parliament against a no deal, is it not a travesty of democracy that the British Parliament would not be
able to stop him from doing this?
DOS SANTOS: This is where the Leader of the Opposition comments come in quite pertinently here. In fact, Jeremy Corbyn, we understand, has
actually canceled the trip that he was planning to take to Garner later on this week to make sure that he could rally around him various other pro-
remain MPs to have a sort of coalition of the willing.
He is going to start taking part in some of these meetings later on this week. This is to get people behind his idea of backing him if he tries to
table a motion have no confidence in Boris Johnson come the start of September when Parliament comes back from recess or the third of September.
Thus far, it hasn't looked as though he could be the candidate that they could coalesce around. But essentially you're seeing a lot of plotting
behind the scenes by pro remain factions to find some way of grabbing power essentially from Boris Johnson, who remember only has one seat in terms of
a working majority -- Richard.
[15:10:20] QUEST: Thank you, Nina dos Santos in London. This week's negotiations are the latest in a long history of run-ins between Boris
Johnson, the British Prime Minister and the E.U.
Anna Stewart now looks back at the way to his days as a journalist.
(BEGIN VIDEOTAPE)
ANNA STEWART, CNN REPORTER (voice over): His stance on Europe means he is hated by some, adored by others. But Boris Johnson's rocky relationship
with the E.U. began long before the term Brexit was even coined.
In the early '90s, Johnson's was posted to Brussels for British newspaper "The Telegraph," where he developed a niche, filing mocking stories about
E.U. bureaucracy. Charles Grant was a fellow Brussels-based journalist at the time knew Johnson well.
(BEGIN VIDEO CLIP)
CHARLES GRANT, FORMER BRUSSELS CORRESPONDENT: He gradually worked out that if you wrote anti-E.U. stories, exaggerated hugely, sometimes simply
invented stories, you'd go on the front page of the daily "Telegraph" and you became famous.
(END VIDEO CLIP)
STEWART (voice-over): Johnson's dispatches not only advanced his career but they contributed to a growing anti-E.U. sentiment back home in Britain.
(BEGIN AUDIO CLIP)
BORIS JOHNSON, U.K. PRIME MINISTER: I was just checking these rocks over the garden when I listened to this amazing crash from the greenhouse next
door over in England. It was really direct from Brussels where it had this amazing explosive event. It really gave me, I suppose, this rather weird
sense of power.
(END AUDIO CLIP)
STEWART (voice-over): It wasn't until 2016 that Johnson decided to stake his whole career on the issue of Europe.
(BEGIN VIDEO CLIP)
DAVID CAMERON, FORMER BRITISH PRIME MINISTER: The choice is in your hands.
(END VIDEO CLIP)
STEWART (voice-over): When the Brexit referendum was called, he first did it about which side to back.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Are you still making up your mind, Mr. Johnson.
(END VIDEO CLIP)
STEWART (voice-over): Perhaps calculating which will open the door to Number 10, his long held dream.
In the end, he surprised many by coming out for Vote Leave and took center stage in the campaign.
(BEGIN VIDEO CLIP)
JOHNSON: Can we go forward to victory on June 23rd? Yes, we can.
(END VIDEO CLIP)
STEWART (on camera): Only later did it emerge that Boris Johnson actually wrote two versions of the column which came out in his support for Brexit.
The first, the one we know of the published version, in which he said there's only one way to get the change we want. Vote to leave the E.U.
Then there is the other, the unpublished version, in which he actually warns of an economic shock and the break-up of the union should the U.K.
leave.
STEWART (voice over): As it turned out, Johnson picked the winning team.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: The U.K. has voted to leave the European Union.
(END VIDEO CLIP)
STEWART (voice-over): Now as Prime Minister, Europe is the biggest problem he has to face. He has made a firm commitment, Brexit will happen on
October 31st.
(BEGIN VIDEO CLIP)
JOHNSON: Do or die, come what may.
(END VIDEO CLIP)
STEWART (voice-over): He wants a revised deal to remove the Irish backstop, something Brussels has made clear it will not renegotiate,
setting himself up for a showdown.
(BEGIN VIDEO CLIP)
GRANT: Boris is about rhetoric. He is about facts. Boris is a cavalier, the E.U. is about runt heads. And I think the trouble is that when
cavaliers meet runt heads, they have to fight. And that's what's going to happen.
(END VIDEO CLIP)
STEWART (voice-over): Leaders in Europe say they are willing to work with Johnson but he has already built himself a reputation as a troublemaker.
He makes promises he can't keep and he is about to drive Britain off a cliff -- Anna Stewart, CNN, London.
(END VIDEOTAPE)
QUEST: The European stocks, well, look how they traded. Bearing in mind there's a huge amount going in on Europe besides Brexit. You have this
week German manufacturing data. And you've got the comments from the country's Central Bank, which said it did not see a need for fiscal
stimulus at this time, bearing in mind that they had said only last week when the Bundesbank was talking about the possibility of recession that
they did see them anyway.
The jump the pound pulled the FTSE lower the CAC was -- sorry, obviously the pound went up, the FTSE went down and you see the other markets in
front of you.
The wife of the embattled auto executive, Carlos Ghosn tell CNN he deserves a fair trial, and the sooner the better. Carole Ghosn is asking the French
President to intervene and discuss the case with the Japanese Prime Minister when they meet at the G7. I spoke to Mrs. Ghosn just before we
came on air.
(BEGIN VIDEO CLIP)
CAROLE GHOSN, WIFE OF CARLOS GHOSN: I'm hoping Carlos will get a fair trial. They will set a trial date, it's been 276 days, and until now, they
have not set a trial date and we're scared because we're hearing rumors from the Japanese press that they will not set a trial date until after the
Japanese Olympics, the Tokyo Olympics next summer. That's a long time and also, we still haven't seen the evidence. We've seen part of the evidence.
How can my husband defend himself and have a fair trial if we don't have the evidence?
QUEST: Is there any evidence, any suggestion that Macron will do what you want and will take this up with Shinzo Abe?
GHOSN: Well, I hope he does. Carlos is a French citizen. And the French is a big country on human rights. And I think the way Carlos has been
treated is very cruel and unfair and Japan, as part of the G7, they are the only ones that have this hostage justice system. And I also hope that the
leaders of the G7 will think critically about this Japanese hostage justice system.
(END VIDEO CLIP)
QUEST: You'll hear more from Carole Ghosn in tomorrow night's QUEST MEANS BUSINESS.
The Dow is edging higher after early swings. What a day. Investors reacting to Fed comments and the yield curve which is a bit inverted. It's
not so much, it is looking a bit flat. Anyway, we'll look at the markets when we return. This is QUEST MEANS BUSINESS live from New York.
(COMMERCIAL BREAK)
QUEST: Choppy for the U.S. markets. The Dow enjoyed a strong open and then suffered a 300-point swing deep into the red. The drop came as the
yield curve briefly inverted this morning. The second inversion since Wednesday. It's considered an indicator -- recession barometer -- but not
a predictor. Anyway, it is weak U.S. factory data that is also hurting stock and the President, again calling on the Fed to lower rates, saying
the Fed is preventing the U.S. from doing what it needs to do. Listen to the tweet.
"The question is being asked, why are we paying much more in interest than Germany and certain other countries?" Germany sold 30-year bonds with a
negative yield for the first time on Wednesday. That is seen that investors aren't confident in the health of the German economy.
The President seemed to have missed a key point. Germany failed to sell more than half of what they offered. So the cover was less than 50 percent
which is dramatic in that sense. Jason Draho is Head of American Asset Allocation for UBS. He joins me now. Good to see you, sir.
JASON DRAHO, HEAD OF AMERICAN ASSET ALLOCATION, UBS: Good to see you.
QUEST: All right. Let's just deal with this inversion. We know it's not a predictor, it's a barometer and all that sort of stuff, but we do need to
see a proper inversion for a sustained period of time before we can say it's meaningful. Would you agree?
DRAHO: I would agree. So if it inverts for 10 minutes, as it did last week, or you know briefly today, I reckon it is kind of yellow flag,
something we have to pay attention to. But in and of itself, it kind of -- if it re-steepens, if it is not inverted anymore, it's telling us that
something we have to watch for, but that alone is not necessarily a real red flag for the economy.
[15:20:14] QUEST: Okay, the idea of these negative interest rates. Now, this is where you land, you buy a bond, and you get back less than you
actually have given them in the first place.
DRAHO: That's right. Yes.
QUEST: And why would anybody in their right mind, why would any asset allocator, you buy that?
DRAHO: Well, if I have a choice, I don't want to buy that. Some investors, if you're in Europe, right now, if you're a German, a pension
fund or insurance company, you may not have no choice but to buy bonds, because you have assets, or you have liabilities, you have to pay out
potential like a pension benefit in the future, the best way to match that risk is to buy bonds. So they've been buying kind of longer duration
bonds, like these longer maturity bonds.
When rates fell so low in Europe, I think what you're seeing in the U.S. is those investors already coming to the U.S. to say, instead of paying or
getting minus 50 basis points on a bond, I can buy it in the U.S. and get over two percent.
QUEST: So let's clarify. So there's definitely carry trade almost, where people are saying, I can't get it in bunds or the other European individual
bonds, I'm going to go to the U.S. or the U.K.
DRAHO: That's right. So whether it is Europeans, Japan, same thing, very low yields there. So where do you go in the world? We can actually have
somewhat decent opportunity for returns in the U.S. The problems you're taking is exchange rate risk. And sometimes once you manage that, net it
out, you're not --
QUEST: I am sorry to interrupt you, but the exchange rate risk is partly because of what you're doing. You're shifting large amounts of money from
one bond currency to another, you're creating your own exchange rate.
DRAHO: Well, not necessarily because it also depends on what the policymakers do. So suppose you think the Fed is going to cut rates quite
aggressively, that should weaken the dollar as a sequel. If they don't, then that's the risk you're taking.
QUEST: How far is technical analysis no good anymore? I mean, you've just answered me there a very good example. You know, the Fed does this,
therefore, people do that, therefore, this, this and the other. And therefore, technically, these moves happen in sequence. But we're moving
into the areas of geopolitical confidence. And there, it's the safe haven theory.
DRAHO: So from a technical perspective, there's always kind of parts that could be useful and not useful. I think where it matters is that there's
more and more trading investing that's done sort of systematically to computer programs.
So if you know the strategies they're doing, sometimes you can look at these and say, there's a lot of buying because you know, those strategies
are moving markets. On the geopolitical front, that's a harder thing to calibrate. And that's really what's moving markets, a change in policy, a
tweet that can change the whole narrative in the markets.
QUEST: I want to read you some of your views earlier, I just want you to explain, "Until there's clarity ..." you don't see an end to the U.S.
expansion or a bull market. But you say, "Until this clarity, investors shouldn't make large moves one way or the other." That's very hard to do.
DRAHO: Well, it's at a time when right now, the markets this month have been reacting to the news that the administration wants to play a 10
percent tariff on their main imports from China. That came as a kind of surprise to me, as a surprise to the markets.
Last week, they dialed back and said well, we'll do some of that maybe in December. So that could be a good news, but they can also ramp it up. So
if I'm sitting there trying to calibrate what way could this go? On the one hand, things get better; on the other, they can go the other way.
On this point on -- on this whole point on geopolitical risk. It's really hard to calibrate that. So if you can't calibrate it, do you really want
to be making big moves one way or the other? You look at the economic fundamentals. U.S. looks okay right now, still pretty good. Europe
weaker. So why make big sort of bets one way or another when you're not sure of the outcome?
QUEST: Good to see you, sir.
DRAHO: My pleasure.
QUEST: Really appreciate it. Thank you very much, indeed. Thank you very much. Now, let's continue this idea. Donald Trump's feud with the Fed, it
caps off an extraordinary, a turbulent 72 hours for the President.
During that time, we saw Mr. Trump float an end to birthright citizenship, which may be unconstitutional since it's in the Constitution. There is a
step up with the feud with Denmark, one of the closest allies over a piece of Denmark or a province of Denmark that's not for sale. He used
disloyalty a claim about Jewish Democrats. And then of course, he said Russia should be invited to the G8 something that just about every other G7
member disagrees with on the grounds of Ukraine and Crimea.
And then finally last night, he compared himself to the chosen one, when it comes to the trade battle with China. Stephen Collinson joins me from
Washington.
Stephen, I read your excellent, excellent piece this morning on cnn.com politics about the unusual nature of these events. Give me a philosophical
thoughts about it. Why is this so unusual? What is it that's grabbed you about today's circumstances?
[15:25:07] STEPHEN COLLINSON, CNN WHITE HOUSE REPORTER: Yes. It's quite a run even for President Trump, Richard, that list that you just read out? I
think what it tells us is that the President is very good at being Donald Trump. There are increasing questions about how good he is about being
President, you know, he is excellent at pushing all of this charm into the water for conservative media, for stoking up his base, causing outrage and
controversy.
But when it comes to the actual business of governing, if you look at the President's comments, for example, this week on the economy, he is saying,
on the one hand, everything is going great. Two days ago, he was talking about the possibility of capital gains tax cuts, and a payroll tax cut.
Yesterday, he came out and said, well, that's not on the table at all.
So there's this real issue here over the last few days of consistency, and coherence. And I think that's what is missing from the White House. And
if you think back to the financial crisis, for example, in 2008, when the White House was under George W. Bush, it was absolutely crucial in the days
of that crisis. If we had a similar occurrence right now, I don't think you could be at all reassured about what might happen with Donald Trump.
QUEST: But, is it getting worse? So far -- I mean, we've had isolated -- well, not isolated -- we've had a series of these similar incidents over
the whole presidency, what's worrying you now?
COLLINSON: I don't think necessarily, it's getting worse. But I think it's becoming more and more obvious that there is no driving strategy
behind this White House other than perhaps to get reelected.
If you look at most political leaders, they have a strategy and a set of policies they want to put in place and everything -- every step is an
advanced towards that. There's nothing there with President Trump. He has only really passed one big piece of legislation, the tax reform and that
had actually more to do with Republicans in Congress than it did the presidency.
So it sort of raises the question to me about what is this presidency for other than the self-aggrandizement of Donald Trump and the expression of
his character, for example, in foreign policy. Foreign policies become very aggressive, incoherent, unpredictable, and that is exactly what Donald
Trump is.
So I think what I'm saying is, this presidency is now becoming more and more an expression of the President's wild character.
QUEST: Does it matter? I mean, at the end of the day, if that's what the people have voted for in this country, and everybody else just has to get
used to it. You know, once he's gone, everything gets back to normal in some shape or form. Why does it matter?
COLLINSON: And that's a good point. And we shouldn't forget that millions of people in the United States see Donald Trump's behavior and say, "This
is exactly what we voted for. And this is exactly why we'd like him to win a second term." Politically, I think it matters if the President of the
United States is now becoming a force for disruption and unpredictability in the world.
You know, much of the world has been based over the last 70 years on the U.S. being an anchor of stability. There are consequences if that's taken
away. And then politically, you know, it matters because this is going to be the basis for once the election, the 2020 election is fought. And you
have some Democrats, for example, Joe Biden looking at this behavior and saying, "This is exactly the reason why Donald Trump shouldn't get a second
term."
QUEST: Thank you, sir. I appreciate it. It was an excellent piece, which I commend to a good QUEST MEANS BUSINESS viewer to read. Thank you.
Now, the Amazon is in flames. The Brazilian rain forest is burning at an unprecedented rate. The country's President is pinning the blame on the
environmentalists. The UN Secretary General says he is extremely concerned.
(COMMERCIAL BREAK)
[15:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I'm Richard Quest, a lot more QUEST MEANS BUSINESS in a moment. Brazil's trading
accusations with environmentalists over the massive fires burning in the Amazon. Nineteen hours plus, how would you like that to be your flight? Is
some idea -- people's idea of how now Qantas wants to see how the human body handles more than 18, 19, 20 hours in the air.
As we continue, this is CNN, here on this network, the facts always come first. Italy's president says key political parties tell him they need
more time to try to form a ruling coalition. President Mattarella is giving them until next Tuesday to reach a deal, and he hasn't ruled out,
calling a snap election. The country's coalition government collapsed earlier this week.
The British Prime Minister Boris Johnson met in Paris with the French President Emmanuel Macron who told him it's up to the U.K. to come up with
Brexit solutions, but that the current agreement can't be substantially changed. Mr. Macron also tweeted that the British-French relationship is
essential, adding, let's work together.
U.S. Democratic presidential candidate Bernie Sanders has released his climate change program. It calls for a World War II-style mobilization to
stop and reverse the effects of global warming over a decade. Sanders believes his plan could create 20 million new jobs in the U.S.
Could there be any better reminder of what Bernie Sanders was talking about with climate change than what's going on at the moment in Brazil in the
Amazon rainforest? Brazil's president now says the country does not have the resources to fight the giant fires that you can see depicted here and
seen from satellite.
These are incredible scenes in parts of Brazil, and an ugly debate about the funding for conservationists is now under way. The Amazon rainforest
is burning at a record rate. Let me just let that sink in. This is happening now, faster and in more concentrated ways than ever before.
These pictures from space show the smoke covering huge parts of South America. Environmental groups say the fires were set deliberately by
cattle ranchers and loggers, they want to clear the land. Brazil's President Bolsonaro has been mocking those environmentalists making
baseless claims that NGOs are responsible, they're just upset about funding. Shasta Darlington has our report from Sao Paulo.
(BEGIN VIDEOTAPE)
[15:35:00] SHASTA DARLINGTON, CNN INTERNATIONAL CORRESPONDENT: Brazil's largest city plunged into darkness. Black clouds filling the sky,
blanketing Sao Paulo Monday afternoon. Thick smoke billowing from more than 2,700 kilometers away while fires are consuming the world's largest
rainforest.
The Amazon basin is burning at a record rate according to Brazil's research center, more than 72,000 fires have scorched the country this year, and
over 80 percent increase compared to the same period in 2018. Flames destroying one and a half football fields of rainforest every minute of
every day.
Smoke spreading across nearly half of Brazil, visible from space more than a week ago, even spilling into neighboring Peru, Bolivia and Paraguay.
Now, the haze stretches across South America, spreading along the East Atlantic Coast. Though fires are common here in Brazil's dry season,
climate scientists say this is far from the norm.
Instead, environmentalists point to land raised at unprecedented levels, as a new government encourages industry to develop the Amazon region.
Brazil's right-wing president has brushed off environmental concerns as he vows to open the rainforest to business interests.
Since he took office in January, rates of deforestation have soared as Jair Bolsonaro remains indignant to international criticism. Take your money
and reforest Germany, Bolsonaro bristled that Germany and Norway's decision to suspend funding to Brazil. Now, his attention turns to wildfires
surging at unprecedented rates, Bolsonaro is deflecting blame.
Without evidence, he points to non-governmental organizations.
JAIR BOLSONARO, PRESIDENT, BRAZIL (through translator): Regarding the fires in the Amazon, I am under the impression that it could have been set
by the NGOs because they had asked for money. What was their intention, to bring about problems for Brazil?
DARLINGTON: Home to hundreds of indigenous tribes, the Amazon rainforest is rich in wildlife and natural resources, often called the Lungs of the
Earth, the rainforest supplies 20 percent of the world's oxygen. If it burns to a point of no return, environmentalists warn it could turn into a
dry Savanna and begin emitting carbon instead, plunging the planet ever deeper into a climate change crisis. Shasta Darlington, Sao Paulo, CNN.
(END VIDEOTAPE)
QUEST: Roberto Troya is the regional director of Latin America at the World Wildlife Fund, he joins me now. What do you make of President
Bolsonaro's accusation that it could have been NGOs like yours that started these fires?
ROBERTO TROYA, REGIONAL DIRECTOR OF LATIN AMERICA, WORLD WILDLIFE FUND: Well, there is a level of responsibility, Richard, I always remember when
there's finger pointing, you have to always think that if you're pointing with one finger, three other fingers are pointing at you.
It's not about who is doing what, it's about the levels of responsibility that governments, civil society and everybody else has around the Amazon
Forest. If there is a rise on deforestation laws as you had rightly said in the previous note, it has rose to 178 percent this -- last year.
So, what's going on though? What are the laws that are not being enforced? What are the fines that are not being applied? Why is it that the fires are
happening all over the place and are spreading beyond Brazil which is concerning.
QUEST: There is a certain outrage, but you would agree nowhere near the sort of outrage that you see in other circumstances. For instance, your
organization has said, you know, why aren't the wealthy, the celebrities, those who for example, stood up for Notre Dame after it burned, quite
rightly. But where is their outrage over the Amazon burning and with fires set deliberately?
TROYA: Well, it is interesting. Now, we see the outrage, now the networks and the social media is really putting a lot of pressure in every -- in
every single area of this. What we feel, Richard, is that for the Catholics, Notre Dame Cathedral is a symbol -- a symbol of religion. For
the population on earth, Amazon is the cathedral of life.
That's how it's important for the conservation of life on earth. And that's why people are outraged now because they see life on earth
represented --
QUEST: OK --
TROYA: On the Amazon being disappeared.
QUEST: The loggers, the ranchers who set these fires, they must know, they live there, all right? They may well have large companies, but they are
often South American companies, they know the damage they're doing. Why are they doing it?
[15:40:00] TROYA: Well, the science is telling that the current available land for production of food is enough, you can use and you can intensify
production. And there're lots of studies that show that in the current agriculture frontier as it is right now, Brazil can increase significantly
the production of food with less water and could be less more efficient.
Now, we're talking about the rainforest. It's contradictory to the same producers to think about cutting the forest that is providing rain for
their production. So, there's no -- there shouldn't be a contradiction --
QUEST: Right --
TROYA: Of keeping that forest and producing.
QUEST: Good to see you, sir, thank you very much, I appreciate you --
TROYA: Thank you --
QUEST: Thank you. Tesla shares surge on reports that Volkswagen wanted a stake in the company until the German automaker set the record straight,
and says it wants nothing to do with it. After the break though, we will question whether Volkswagen is being a bit previous. It should have a bit
of Tesla.
(COMMERCIAL BREAK)
QUEST: Volkswagen is denying rumors it's interested in buying a stake in Tesla. It follows a report that says the CEO Herbert Diess wanted access
to Tesla's software and battery technology. Tesla shares briefly spiked on those rumors, adding more than $300 million to market cap.
The shares have cut -- fallen back throughout the course of the session. The first 18 months wild for Tesla ever since Elon Musk controversially
said he was planning to take the company private. Gene Munster joins me, managing partner at Loup Ventures.
I was interested in your comment -- good to see you, sir, that, you know, Volkswagen may have poured cold water on the idea, but actually, they
should be seriously thinking about buying into Tesla. Why?
GENE MUNSTER, MANAGING PARTNER, LOUP VENTURES: They're a long way behind. I think you can measure it in terms of years, potentially five years
behind, Richard, and I want to try to quickly put this in a perspective. Is that, today, if we look at the U.S. market, there are 17 models,
electric models on the market.
Two of those from Volkswagen, one of them is the Audi e-tron which is $70,000 or more. It starts at $70,000, and the second is the electric Golf
which is $30,000. I caution that the Golf is a 120 mile range on the battery which really is a non-starter for most people.
[15:45:00] In other words is that they're not in the electric market today, and part of the reason is that making an electric car is not as easy
as making a traditional internal combustion car, it's a very different process, it's a computer on wheels.
And I think that, that simple insight that they have not delivered on electric future, even though they talked about 10 million cars in the next
10 years being electric, I think they are a far cry away from that. And ultimately, they need help.
And I would point to an evidence that they're open to getting help is this partnership that they did with Ford in July where they put in --
QUEST: Right --
MUNSTER: A billion of 2.6 billion in total.
QUEST: If they're doing deals like that, why would they need Tesla? Because at the end of the day, which other CEO would want to shackle their
company to the fortunes, not of Tesla which makes wonderful vehicles, but of Elon Musk who's mercurial at best?
MUNSTER: Elon is a difficult figure, you could -- some investors may call him troubled. I try to keep clear-headed thinking here, and I think he is
flawed just like we all are. But at the end why would a company want to shackle themselves to Elon Musk?
And the simple answer is the alternative, is not inviting -- and the alternative I think is going to be difficult for some of these companies to
survive. I think we're going to look back in ten years and think about names that we've known, that companies will still be around -- I don't want
to illuminate which ones I think will be in that group.
But I think that they'll be much smaller businesses, much smaller brands than we think today. So, the simple answer is, yes, Elon is flawed and
would be incredibly difficult to work with, but the alternative is not good.
QUEST: And I was interested to see, Tesla's market share of electric vehicles -- well, bearing in mind, they only sell electric vehicles. So,
you know, every vehicle they make goes into that category, but it's quite sizable, isn't it?
MUNSTER: It is. In the U.S., it's 75 percent that market share has inched up in the past year. Even though the number of available models has gone
from 11 to 17, and the reason why the share inched up obviously is because of what's happened with the Model 3 over the past year.
And I think that there's this holding of the breath of investors and industry watchers for that market share to decline. News flash here, that
market share will decline over time, there's --
QUEST: Yes --
MUNSTER: No way they can hold on to that, but if they had something like 20 percent, that would be a big win.
QUEST: Of course, it declines, but that's only because the case got bigger and there are more people involved. Good to see you, sir, thank you, I
appreciate it.
MUNSTER: Thank you, Richard.
QUEST: Now, when a plane can be a pain, that's what Qantas wants to know. The airline is testing 19-hour flights to see the effects on the human
body. After the break.
[15:50:00] (COMMERCIAL BREAK)
QUEST: Imagine sitting here for 19 straight hours. Qantas wants to see how people handle the world's longest routes, and it's running test flights
before commence -- do you have to? Disgusting -- commercial, not -- these are much better, commercial services, it's all in aid of project Sunrise.
Get me out of here! They're going to be testing in stages.
The idea is the longest flights in the world from Sydney to New York, Sydney to London. Now, one flight will go that way, one flight will -- two
of them will be here. Over a period of three months, there will be 40 people on board, mostly Qantas employees.
And the idea is to see exactly how people react up there. How -- what's it like on these very long routes? By the way, London is longer in terms of
route distance than New York. The test flights will use the Boeing 787- 900s, but the revenue flights would use another aircraft, the 787 isn't suitable for this.
Instead, they'll use the Airbus A-350 or the Boeing 777-10, 777-X. Qantas has said it will decide by the end of the year which of those planes that
it'll be inspect, it will choose. Qantas is interested in the effects on health, monitoring brain-wave patterns, alerting movements.
Here's what the sleep expert, Peter Cistulli told us on a Qantas trip from Perth to London non-stop last year.
(BEGIN VIDEO CLIP)
PETER CISTULLI, PROFESSOR, CHARLES PERKINS CENTER: By traveling across many time zones in a short space of time, you create a problem for the
body's biological clock. That manifests as brain fogginess, sleeping during the day, being awake at night, having all sorts of issues with your
gut.
(END VIDEO CLIP)
QUEST: Oh, dear, I wonder what they've been downgraded to. Anyway, Qantas will share the findings of its tests with the civil aviation safety
authority. Join the conversation here. The question is tonight, would you fly 19 hours straightforward? Yes, no, or only in business class? Cnn.com-
slash-join on your device.
Yes, no, only in business class? Brian Sumers is the senior aviation business editor at Skift, he joins me now from Los Angeles. Three areas
you're going to talk about, firstly, the fact that Qantas is even doing these test flights. Do you think it's a scam?
BRIAN SUMERS, SENIOR AVIATION BUSINESS EDITOR, SKIFT: I don't think it's a scam, Richard, but I do think it's very good --
QUEST: Scam is the wrong word --
SUMERS: Public relations --
QUEST: Yes --
SUMERS: I mean, you flew from what? Perth to London, you survived, it's almost as long, Qantas has the data, they know people will be fine. But
isn't it fun to come out here and say we're going to have three test flights, we're going to test how people do, we're going to share the
results, we're going to get everybody excited, and then in 2022, we're going to sell tickets, people are going to be so happy.
They don't need to do these test flights, we all know what's going to happen, but it's cool that they are, and you probably wish you could be on
the plane, I know, I could -- I wish I could be on the test flight --
QUEST: Oh, you'll be on one of those flights, something tells me you have received the invitation to be on -- anyway, but before we get on to that,
the concept of the ultra-long haul, we wrote it in many times on "Business Traveler", the non-stop versus the one-stop, say for example, Singapore and
New York. What's the evidence on this?
SUMERS: Well, look, I mean, if you're in the back of the airplane, you know, you probably want the stop, you want to stretch your legs, you've
already chosen the cheapest options, so maybe you don't care so much about how you feel or time involved. But if you're a business traveler, that is
hilarious, Richard.
If you're a business traveler in London and you want to get to Sydney, you really don't want to waste that time --
QUEST: Right --
SUMERS: In Singapore or Dubai, you know, maybe it's just two hours of ground time, it feels longer, you're worried, will I make my connection?
You want to do it all at once -- business class is darn good, it's very comfortable, it feels like spending 19 or 20 hours on your couch at home,
it's a good place to be, and yes --
QUEST: Right --
SUMERS: I want to be the first person signed up to go from London to Sydney non-stop. I do not want to take that stop.
QUEST: All right, but what about the pilot? Because I know that there we are dealing with a totally different range of issues. Even though, the
fact that they have got fully-equipped beds with duvet and all the sort of things, at the end of the day, somebody has to take off and somebody -- and
probably, the same person usually has to land on those 20 hours in-between.
[15:55:00] SUMERS: Yes, you're absolutely right, Richard, I mean, I don't think passengers are going to have any trouble with 19 or 20 hours, they're
doing 17 or 18 now. But that extra hour or two is very important if you're a pilot, you know, how much stamina do they have? How long can they stay
awake?
What are -- what are their circadian rhythms like? Are they jetlagged on the flight back? It's possible regulators and pilots unions are just going
to say, no, we literally can't do this. It doesn't matter that we have crew bunks, 20 hours is too long for anyone to be on duty consecutively,
much less an airline pilot.
QUEST: Taking a look, Brian, not surprisingly, most people say they'll only do it if in business class. I'll make you a deal, I'll see you on
board London to Sydney non-stop if we both --
SUMERS: I can't wait, Richard --
QUEST: If we somehow manage to finagle our way on board, good to see you, sir. A final look at the markets. All right, it is up, but given back
some of the gains, we've lost a little bit of ground just over here, not much, but a heck of a lot better than it was earlier in the day when we had
those losses around about 11:00.
Boeing is having a really strong day, up 4 percent, that's on things looking better where the Max is concerned. The reason the Dow -- you want
to know why the Dow has been all over the place? This is it. United Health Group is the second or third biggest, that's down 2 percent, Boeing is the
biggest in the Dow.
That's up -- that's the number one in the Dow. Those two stocks are pulling in opposite directions on the market, and that's why we're having
such a betwixt and between day. We'll have a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, I actually did the longest flight in the world, and I don't mean the Singapore flight. It was a test flight by
Boeing from Hong Kong to London, the long way around, we went three- quarters of the way around the world non-stop. It was over 22 hours, 40- odd minutes from takeoff to landing.
And I tell you, it really does put tremendous demands on passengers to do that. But whether or not you want to stop on the way, the problem with
this is, everyone says they'd like to stop on the way and have a layover, but when push comes to shove, they say -- we're going to battle on through
and pay the price at the other end.
And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York, whatever you're up to in the hours ahead, I hope it is profitable.
(BELL RINGING)
Yes, eke out a small gain, the day is done.
END
