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Aired August 27, 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: The market is down in New York as we enter, the last hour of trading. It is only off 43,
it had been lower. But the indices are down -- all three major indices are down -- having been up quite sharply earlier in the session. We'll watch
and wait over the next 60 minutes. These are the markets and now to the reasons why.
A historic verdict against Johnson & Johnson is expected to spark more trials, more settlements. A Market Warning: The world's biggest wealth
manager tells its clients to sell stocks; and a funding fight, who is giving money to the Amazon -- the forest, not the company -- and whether
Brazil is going to accept it.
Tonight, we are live from London on Tuesday, August 27th. I'm Richard Quest, and of course, even in London, I mean business.
Good evening, tonight from London. After losing a historic trial, a vow to appeal from Johnson & Johnson. Shares in the drug maker are rising. The
first verdict of its kind for opioids. And a judge in Oklahoma found that the company played a role -- a deliberate role -- deceiving in the opiate
crisis, one that's ravaged the State of Oklahoma and many others.
Now, Oklahoma was asking for $17 billion. J&J will pay far less, $572 million, and in a perversion of that, their stock actually rose on the
news.
This story begins in the late 1990s. That's when companies like J&J assured the authorities that patients would not become addicted to their
new opioid painkillers. Now, to be fair, these painkillers were extremely effective. They did what they were intended to do, arguably a little too
well, because doctors began to prescribe them in massive quantities.
Look at the share price of J&J, and much of that share price baked in is the opioid price. J&J stock is up around 150 percent over the last two
decades. The drugs, however, proved highly addictive and wildly open to misuse.
The CDC is the Center for Disease Control. The experts on this in the United States. From 1999 to 2017, more than 700,000 people died in places
like Oklahoma from overdoses. Think about that? 700,000. And now the judge wrote that J& J engaged in false and misleading marketing of both
their drugs and opioids generally. It violated or he called the public nuisance laws.
This is an important precedent. We're going to discuss it tonight from a business and obviously, a medical standpoint. A Federal trial will begin
accusing the opioid makers of causing the epidemic. J&J shares surged after the verdict came out, and its market cap gained as much as $15
billion dwarfing the court order.
Other opioid manufacturers, Teva and Endo International and Mallinckrodt are dramatically lower. Teva by the way, it settled in Oklahoma, along
with Purdue. Abbe Gluck is a Professor of both Law and Medicine at Yale. Professor, good to see you. Thank you. I feel I'm in good hands with a
Professor of both the disciplines involved here.
The significance of this is it is the first. Now, give me the expert opinion of why it is significant.
ABBE GLUCK, SOLOMON CENTER FOR HEALTH LAW AND POLICY, YALE LAW SCHOOL: Right. So it's very significant. You are correct because it is the first
trial verdict in this landscape of more than 2,000 cases. But what's most significant, I think, is that this is the first time that we've seen a
company that's not Purdue, that's being told by a judge. "You're not just a bystander, you were not just caught in the crossfire."
The judge in Oklahoma found that the company engaged in affirmatively deceptive marketing practices. It wasn't just negligent, it was
intentionally deceptive. I think that's going to set a very important tone going forward.
QUEST: But is $572 million in quantum sets another tone, it sets, if you like what he believes, I mean, other judges, maybe unless there's egregious
evidence, otherwise will perhaps use this as a yardstick.
GLUCK: I think it's possible. Every state has been hit in a different way by the opioid crisis. And so the opioid crisis is not the same in Oklahoma
as it is in Arizona, for instance. The number I think is lower than some people expected.
The Attorney General wanted $17 billion, as you said. The market seems to have reacted favorably to the fact that the judgment was a little bit
lower.
[15:05:10] GLUCK: But keep in mind, in Ohio, another state, there are 1,600 cases pending together that are going to be settled in a global
settlement where the allocation of funds is going to be very different.
QUEST: Okay, what about juries? We haven't heard from a jury yet in this.
GLUCK: It hasn't gone to a jury. So what's interesting about this one is that there was a judge presiding over this trial. A jury is likely to give
more money based on the way jurors react in our country and based on the extent of personal toll that the crisis has taken on many communities.
QUEST: You know, the rest of the world watches and says, "Yes, it's those Americans at it again. First of all, they managed to have an opioid
crisis. Now, they have to find someone to blame. They have to find somebody to blame in the tort litigant society of the United States." At
the end of the day, the insurance companies will pay these damages, shareholders and companies will pay these damages, and drug prices will go
up for the rest of us to compensate.
GLUCK: Well, that's a question, I think, in the United States, yes, the way we do move regulation forward and change industry practice is through
litigation some of the time. Sometimes we go to the legislative arena, in this particular instance, as the Judge in Ohio has said several times, the
legislature has kind of failed us.
Congress hasn't done that much on the opioid crisis. State legislators have tried. Various states are reeling and they need damages, and the
court system is the way to get that right now.
QUEST: Right, but the price will ultimately be paid by the consumer either through higher insurance premiums from the insurers or through higher drug
prices. What I'm trying to understand is, you know, this is -- who actually ultimately pays the bill for all of this?
GLUCK: Well, the companies will be paying the bill. And you're correct that in some instances, they may pass things along. The health insurers
are not the ones at the moment who are going to be on the hook. They're in fact, the ones who are trying to get off the hook.
Some of the arguments here is that it is the insurance industry. And remember, in the United States, sometimes the state is the insurer. For
the poorer population, Medicaid is a state-run program. These States don't want to be on the hook for the healthcare costs of all of these people who
have suffered from addiction.
So part of why they're going after these lawsuits is money from the companies that have profited from the opioid sales to turn around and pay
back the healthcare costs that they are suffering.
QUEST: Professor, very glad to have you with us to help make sense of it all. Much appreciated. Thank you.
GLUCK: Thank you.
QUEST: The other analogy, of course, is being used are the tobacco companies. Well, today, tobacco companies, Philip Morris and Altria are in
talks to reunite. The two split years ago -- 12 years ago in 2007 -- combined, they would be worth more than $200 billion. Both are struggling
with sinking sales of tobacco, as most smokers quit. And of course, everybody is interested in vaping. Shares in both companies are down.
Paul La Monica is in New York.
First, let's start. Why would the shares be down, Guru La Monica?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think a couple of things. I mean, this has been rumored for a couple of days now, there was some
speculation about this. But also, there's a report, CNBC suggesting that there won't be any merger premium for the deal. So if it's really just a
merger of equals, a stock swap, then there's not much more money to be made for people buying the stock now. And I think that is why there's concerned
about that. And that's why the shares are a little bit lower today.
QUEST: And this deal, they split apart for a reason in 2007. I can't remember what it was, but it must have been a good one. Or at least, at
the time, they probably thought it was a good one. Does it make sense to put the two back together again?
LA MONICA: It's going to be interesting to see. I mean, at the time, obviously, Altria was a much bigger conglomerate. It was also spinning off
Kraft at the time, which is now part of Kraft Heinz, of course.
And there was the rationale that, you know, having Philip Morris in the international business, being separate from the slower growth U.S. business
might have been good for investors.
But now, cigarette smoking is obviously on the decline not just in the U.S., but in many other regions around the world. We know what the health
risks are. And these companies are going all in on vaping even though there are definite legitimate concerns about health risks involving that
product and you know, the FDA and others are also worried that maybe vaping is being marketed a little too aggressively to younger consumers as well.
So you know, Altria now has this big stake in Jewel Labs and that's something that I think is going to be very interesting to see how that
meshes with Icoast, the Philip Morris International electronic cigarette product if these two companies merge and then again remember, Altria has
also got a big stake in Kronos, a Canadian cannabis company.
So they are definitely trying to find new areas of growth, be it vaping or marijuana, and not traditional tobacco cigarettes.
QUEST: If they're going to get you one way, they'll get you the other. Thank you. Paul La Monica.
[15:10:10] QUEST: The similarities between Big Tobacco and the lawsuits of the 1980s and 90s, and the cases against the opioid manufacturers. Sanjay
Gupta joins me now.
And we know, Sanjay that the cigarette companies battled against until a very large jury awards were made to the point where, you know, they nearly
went out of business. Do you see similarities with opioids and drug companies?
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: I think that probably the best example or analogy here is the Big Tobacco settlement, those $250
billion, you remember, Richard, back in 1998?
The issue, I think, and when you now have a chance to look back on this is that where did all that money go? What exactly did it accomplish? And one
of the things that, you know, the critics will say is like about one percent of the money ultimately went toward the people who are most
impacted by tobacco, or toward tobacco cessation programs. Programs to help people to stop smoking. It's still incredibly hard to stop smoking,
maybe some of that money -- more of that money may have made a difference there.
With Oklahoma, and you know, this $572 million settlement, they have laid out a plan, or at least areas where they're going to focus the money,
focusing on treatment for people who are addicted to opioids, focusing on saving people from overdoses, law enforcement collecting lots of data,
because there's still, you know, a need to collect this data for future policy.
But all these things are where they want to lay out the money, but there are similarities, just differences in how the money will be spent.
QUEST: Okay, but I think one difference in that, if no one ever smoked again, the only people who would suffer will be tobacco farmers, and those
who manufacture cigarettes. But these medications, you will, as a doctor, now, you prescribe them. They're extremely effective. And if you did not
have access to them in your arsenal of treatment, we, the patients would be worse off.
GUPTA: Yes, I think there's definitely a legitimate use for these medications, and that's an argument certainly, that the drug companies have
been making for some time. These are medications that exists. They can be effective, if used as intended. All of that, that's been part of their
argument. And I think it's a very fair and important argument.
I think the thing that this really revolves around is just the ridiculous amount of usage. So in the United States, for example, at one point, there
were 80 prescriptions written for every hundred people, Richard. We're not even five percent of the world's population here in the United States and
we were taking 80 to 90 percent of the world's supply of some of these medications.
So yes, it can be useful, and there are people who are really dependent on it. But I mean, the numbers sort of speak for themselves. That is not
necessary.
QUEST: Are you -- I mean, in terms of the bringing it back to business, certainly, the drug companies are often end up now in a position of
feeling, we're damned if we do and we're damned if we don't. Every drug that we make, and I agree that the opioids is an extreme example.
GUPTA: Yes.
QUEST: But every drug that comes out eventually seems to end up in litigation with somebody somewhere claiming that it killed them or did them
harm.
GUPTA: Well, there's lots of medications, you know, medications for heart disease, statins, blood pressure medications, seizure medications and
things like that, which don't, you know, necessarily run into litigation.
I think people in the medical community have been seeing this train wreck unfolding for some time. Knowing that while again, there could be a
specific beneficial use of these medications, that they could be quite addictive to people and that addiction could occur within five days, that
the dangers were understated.
I mean, in the documents, they talk about something called pseudo- addiction. That's not even a medical term. They were using that basically to minimize the idea of addiction.
So yes, you're right. I mean, there's a possibility of other medications that could end up relegation, but this was a -- this was really in a class
of its own -- Richard.
QUEST: Doctor, good to see you, sir. As always, thank you.
GUPTA: Anytime. Thank you.
QUEST: As you and I continue tonight, a former Google executive is arrested, accused of taking trade secrets to Uber. We'll be live in
California to see who, what, where and why.
And why the world's top asset managers are joining the bears when it comes to stock markets. We need to understand, is it time to sell?
(COMMERCIAL BREAK)
[15:17:16] QUEST: A former Google Exec has been arrested and charged with taking trade secrets to Uber. Prosecutors are alleging that Anthony
Levandowski stole technology that was used in self-driving vehicles. The authorities are now charging him with 33 violations of the Federal law.
The F.B.I. spoke at a press conference in San Jose, California.
(BEGIN VIDEO CLIP)
JOHN BENNETT, F.B.I. SPECIAL AGENT IN CHARGE, SAN FRANCISCO DIVISION: Silicon Valley is not the Wild West. The fast paced and competitive
environment does not mean Federal laws don't apply or they can be ignored. The F.B.I. will not tolerate the theft of trade secrets.
(END VIDEO CLIP)
QUEST: Dan Simons in San Jose. Dan, who complained? Who brought this to everyone's attention?
DAN SIMON, CNN CORRESPONDENT: Well, originally, Google filed a civil lawsuit against Uber, stemming from the alleged theft of these files. So
this was in the civil arena to begin with. And ultimately, Google and Uber settled that lawsuit. But the judge who was overseeing that case,
recommended that this be subject to criminal prosecution. And that's what we saw today.
No question, Richard. This is really the talk of Silicon Valley. Obviously, companies here really guard their trade secrets closely, or they
hold on to them very closely. And what we have here is the person who was the lead engineer for Google's autonomous driving unit.
When he was out the door, he allegedly downloaded thousands and thousands of files that ultimately landed on his personal laptop. He then formed his
own company using that information. And then of course, it was bought by Uber.
QUEST: Dan, where are the sympathies in Silicon Valley? Because on the one hand, companies may be touching in some censorious fashion, but
there'll be plenty of people thinking, "Yes, I could have done that."
SIMON: Yes, it's a good question. You know, I think the sympathy here really will be with Google. I mean, this is somebody who made a lot of
money working for this company. He was given great opportunities, given great latitude, and then just suddenly, as he is out the door, take his
personal laptop and download thousands of documents and then take that to a competitor.
I think most people when they look at that, just from a common sense point of view, will say that's wrong. Of course, these are just allegations at
this point, as we know, he is presumed innocent.
QUEST: Dan Simon. Dan, thank you. The stock markets are flat. A day of seesawing between green and the red. Take a look at the big board, and
you'll understand. We, are of course, let me remind you coming up to a weekend -- a holiday weekend in the U.S. It is Labor Day, so it's highly
likely that you're going to see thin volumes, people going away early. This is going to get even worse during the course of the week and the yield
curve inversion continues, the spread between the two and the ten is the worse since 2007.
[15:20:19] QUEST: And when they sell, we better take note. Major investors are telling us it's time to take a long hard look at portfolios.
For the first time in the Eurozone crisis, the world's biggest wealth manager is bearish. UBS manages nearly a $2.5 trillion has gone
underweight, which is differing to sell, but it's not a very good idea.
According to TrimTabs Investment Research, corporate insiders have sold $600 million of stock per day in August. Insiders say it's insider trading
-- not trading -- insider selling on a scale comparable only with 2006 and 2007.
And Norway Central Bank overseeing the world's largest sovereign wealth fund says it should shift its focus from European stocks to North America,
which doesn't make a huge amount of sense as others are selling out of North America, even though Europe is probably worse.
Anthony Chan is the former Chief Economist at JPMorgan Chase. He joins me now. All right, let's take this bit by bit by bit, dissect it, if we may.
These calls -- UBS, the insider selling, are they bellwethers that it's time to sell.
ANTHONY CHAN, FORMER CHIEF ECONOMIST, JPMORGAN CHASE: I think that right now there is a lot of nervousness out there. So Richard, it shouldn't be
shocking that some large wealth managers are saying we have to be cautious, but there are other large investors that are suggesting that this may be a
good time to actually nibble and buy some because the prospects of a recession while the odds are not zero, they are not overwhelmingly above 50
percent.
So again, an opportunity, but again, for some, if you're really super risk averse, maybe they will lighten up a little bit, but I don't think it's a
real signal that we have to run for the hills, not just yet.
QUEST: Right, so three months ago, the call was -- you and I talked about it exactly where you're sitting now. You and I discussed the idea of
running for the hills, the next major rally to record highs would be eventually followed by crash of gargantuan proportions, some people are
suggesting, but is this now?
CHAN: I don't think so. I think that right now, you saw in fact, today that consumer confidence is still holding up there. Remember, consumers
are 70 percent of the economy. With that as a backdrop, and then on top of that you have a Federal Reserve that is not excited about raising interest
rates and killing this expansion.
In fact, they've been super preemptive and bending over backwards to add as much liquidity. So all of those things tell me that there are sufficient
cushions out there that tell me that this is not necessarily the time to actually abandon stocks.
QUEST: Okay, but if you don't abandon, the concern is, if we get down to brass tacks, the concern is that if the market rallies back up again, as it
did at the end of July to where we were at records. This is a market to sell into. The moment you get the chance, you get out the door before
others follow.
CHAN: That's a different question, Richard. And there, I would completely agree with you. Because I think that in this environment of so much
uncertainty, if we go up, it's an opportunity not to run for the hills, but certainly to lighten up and take some of the profits off the table.
Because again, more uncertainty can knock you over again.
So this is not a time where you should expect that the market will drop 20 or 30 percent from here, but if you see a five percent or six percent rally
from here, lightening up a little bit, I'd be the first person online to suggest that's a great idea.
QUEST: Okay, so finally, the political, the economic, the monetary, I mean, the Fed is likely to lower interest rates, because of trade
situations perpetuated by the administration, which wants the Fed to lower interest rates. This is a perverse world.
CHAN: Well, it's a different kind of world that we've been used to. And in fact, all markets are pretty cautious. You see the bond market with the
yield curve inverting, you see the equity market under pressure. So everybody is jittery.
Remember, we went through a period where he said she said about the Chinese calling us or not calling us that made the market rally because it lowered
the tensions. But the market also realizes that over a longer period of time, that kind of activity leads to mistrust, certainly at least on one
side and possibly on both sides.
And that mistrust means that this amount of tension is likely to last longer, rather than a shorter period of time, which is not good for the
equity market. It's not good for the U.S. economy, not good for the global economy.
QUEST: Anthony, good to see you, as always. Have a lovely long weekend when you get there as we get towards Labor Day. Thank you.
CHAN: Thank you.
QUEST: British opposition parties are joining forces to prevent a no-deal Brexit. Labour along with five other parties say they've discussed what
they'd like to do, and that includes a no confidence vote of the government.
The Prime Minister, Boris Johnson said he is still trying to reach a new deal with the E.U. He is going to send his Chief Negotiator to Brussels to
seek changes to the backstop.
[15:25:16] QUEST: The Brexit Party leader, Nigel Farage is warning Mr. Johnson, his whole career is at stake.
(BEGIN VIDEO CLIP)
NIGEL FARAGE, BRITISH BREXIT PARTY LEADER: Well, Boris, you talked about do or die, about leaving the European Union on the 31st of October. And I
would say to you deliver or politically die.
(END VIDEO CLIP)
QUEST: All of that, as the E.U. insists Britain must pay its bills deal or no deal. Ruth Lea is with me, economic adviser at Arbuthnot Banking Group,
also former head of the policy unit at the IoD. Good to see you, Ruth.
RUTH LEA, ECONOMIC ADVISER, ARBUTHNOT BANKING GROUP: Hello.
QUEST: First. Do you think that the U.K. should use the Brexit bill as a weapon?
LEA: Brexit bill
QUEST: I mean, sorry, the Brexit, the divorce bill, the divorce?
LEA: No, I was thinking you --
QUEST: Yes, please. Sorry, my apologies.
LEA: No, I don't, but I think the key thing is that Boris Johnson, of course, is trying to get some sort of renegotiation on the withdrawal
agreement. But I think he knows in his own mind, that actually, the chances of getting any major concessions from the European Union are very,
very slim.
And even if he did get concessions on the so-called Irish backstop, it would be unlikely I think that you'd still get the withdrawal agreements
through the Commons and time is running out.
QUEST: I'm not being rude looking at my phone, I'm just looking at what Guy Verhofstadt said earlier today, where he basically said, "Pay your
bills, Britain. Pay your bills, because if you don't -- if you leave, no deal, and don't pay, the first thing we will demand when we come to do a
free trade agreement is you pay the bill. So you're going to have to pay it one way."
LEA: That is when you start the negotiation for your free trade agreement once we've left, but you don't pay now --
QUEST: But you're going to have. They're not going to start that negotiation until withdrawal agreement is agreed, and the bill is paid.
LEA: No, no, because that's just not a realistic situation. The withdrawal agreement is not going to get through the House of Commons, the
withdrawal agreement is not going to happen. And I suspect that Boris Johnson will say, we will start negotiating the trade agreement when we
actually put the money on the table and we discuss the money at the same time. And he is right to do that.
QUEST: Do you -- where would you -- I don't know whether you're a betting woman. But do you -- what would you say the odds now of no deal?
LEA: I think about 85 percent.
QUEST: Really?
LEA: As high as that. Yes. Because as I've said, even if the E.U. were to provide some concessions on the withdrawal agreement, I don't think it
would get through the Commons.
The big problem is what will happen with the opposition parties that you've just discussed.
QUEST: But parliament-arily, what can they do?
LEA: Well, as you just sort of said that Corbyn, who is the opposition leader, he is talking about a possible no confidence vote in the
government. Now, Johnson could win it. Boris Johnson could win it, and that's the end of that.
But even if he lost it, then what would have to happen is that Corbyn or somebody else would have to form an alternative government, and then they
could start playing around with the exit date. But the chances that actually Corbyn and all the other Uncle Tom Cobley's and all in the House
of Commons that actually come together and form an alternative government is very slim.
QUEST: But let's assume that they don't go no confidence. They go the legislative way in the same way they did back in the spring. They take
control of the parliamentary agenda -- the parliamentary timetable with a friendly speaker, who is determined to doing the government.
LEA: Well, what happened in spring is because you had a so-called meaningful vote on the deal. And that is when the Commons actually took
control of the legislative agenda. But if it is no deal, no vote, no meaningful vote. They can't take over control like then again.
QUEST: But they passed the one clause bill if you remember, an Act.
LEA: But this is when they have the meaningful vote on the belt. But if there's no deal to actually vote on, then they can't do anything about it.
And it's interesting, it's not just my opinion, because I'm not a constitutional lawyer. But it is the judgment of the Institute of
Government which is an independent think tank on these things.
I think it should be almost impossible for the Commons to grab the legislative agenda again.
QUEST: Eighty five percent.
LEA: I think if not more. But the last time I put money in a horse, it almost came last.
QUEST: At least, it finished. It didn't fall at the final hurdle. Good to see you, Ruth. As always. Thank you.
Now, what is actually happening to the $20 million promise offered by the G7 for helping the Amazon? The President of Brazil, Jair Bolsonaro and his
office is sending two different messages. Will they accept or won't they? We will talk about it after the break.
Meanwhile, by the way, the Amazon continues to burn ferociously as these dreadful pictures show.
(COMMERCIAL BREAK)
QUEST: Richard Quest, hello, there's a lot more QUEST MEANS BUSINESS as we look at who's offering the money to fight fires in the Amazon, and more
crucially perhaps whether Brazil will accept it. The automotive world remembers Ferdinand Piech; who is the man who built Volkswagen into what it
is today, brought us iconic cars along the way.
As we continue, you and I, this is CNN and on this network, the facts always come first. Iranian President Hassan Rouhani says there will be no
talks with the U.S. until economic sanctions are lifted. Speaking in Tehran on Tuesday, he called on the U.S. to settle issues in a logical way.
President Trump on Monday said he would be open to meeting Mr. Rouhani.
Tropical storm Dorian is moving across the Caribbean, forecasters say it could become a hurricane before it reaches Puerto Rico and the Dominican
Republic on Wednesday and Thursday. The tropical storm warning that the hurricane-watch are in effect in Puerto Rico.
Two banks used by Donald Trump and his family have just half an hour left to tell a New York court if they have the president's tax returns. It's
the latest in a series of legal tussles as President Trump tries to block Congress from accessing his financial records.
It is not clear tonight whether Brazil will accept or not the offer of $20 million in aid from the G7 to fight the Amazonian fires. The Brazilian
president said to reporters and I quote, "did I say that? When I asked my team's offices statement declining the help.
[15:35:00] He said it's conditional on French President Macron withdrawing possible insults he made against the Brazilian leader. So, the pledges
that have been made so far, let's look at them to understand, $20 million from the G7, $5 million from Leonardo DiCaprio's new environmental
foundation, the Earth Alliance and an unspecified amount pledged by Apple.
We have reached out to Brazilian companies -- CNN has to see if any of them plan to donate, Petrobras has responded -- oh, and they said no. Join the
conversation, devices, phones, cnn.com-slash-join. Should Brazil accept international aid to fight the fires? Cnn.com. Really though, simple. A
yes or a no will suffice, 67 percent of you say so far, yes, they should, 33 percent say no, be interested to hear why?
Shasta is following the fires and the money, right more of the money than the fires at the moment. Shasta, why will -- I mean, what's happening with
this money?
SHASTA DARLINGTON, CNN INTERNATIONAL CORRESPONDENT: Well, Richard, it really looks like it's turned into kind of a political hot potato with the
French president sort of talking about the money in the same breath that he, according to Bolsonaro, insults the president of Brazil. This has
turned into more of a political issue than an environmental issue.
At least, as far as the government here is concerned. But what's interesting is when you look at polls of Brazilians, they believe that the
Amazon should be protected. In fact, the president's popularity, his approval rating has sunk in part because of his handling of the
environment.
According to an approval pole that was released today, his approval rating has plunged to 29 percent in August from 40 percent in February. And well,
again, the environment was just one of the issues that people cited. The poll was taken just as these fires flared up and really started to grab the
headlines. So, it's obvious that everyone wants these fires --
QUEST: Right --
DARLINGTON: Put out and this sort of bickering has become a sideline really just distracting people, Richard.
QUEST: Right, but most Brazilians love the rainforest and see it as a national emblem, and the last thing they're going to want is a president,
albeit a president who was popular at election, denigrating and destroying.
DARLINGTON: Well, Richard, I mean, I think you do have to look at the very complicated internal politics here as well. Again, the majority of
Brazilians want the Amazon protected, but Jair Bolsonaro was elected with the support of the agricultural lobby. They believe that -- or they
believe that Jair Bolsonaro would make it easier for them to overcome some road blocks when -- in developing agriculture.
But they also felt that he went too far with his rhetoric, and the fact is, while Brazil is the world's biggest exporter of beef and soybeans, a lot of
it is grown in the Amazon region. And in order for the world to buy their products, they need to convince the world that they're not tearing down the
Amazon --
QUEST: Right --
DARLINGTON: To do so. So, if you have some really radical policies or really radical rhetoric, you see these countries saying they're going to
boycott the goods -- boycott the goods and it ends up basically being counter-productive, Richard.
QUEST: Shasta, thank you. Interesting Shasta, 92 percent -- don't often see them, but that's high on our question, 92 percent of our good viewers
believe that Brazil should accept aid to fight the Amazon fires. Shasta, thank you very much indeed -- only 8 percent of you said no. The Amazon
Rainforest is a battleground to be sure.
As the indigenous people face losing their home, now the indigenous there are vowing to do whatever it takes to protect the exclusive. Pictures of
reports coming after the break.
[15:40:00] (COMMERCIAL BREAK)
QUEST: As the Amazon burns, a Brazilian indigenous tribe is fighting plans to open their land to business. Now, the Brazilian President Bolsonaro has
said he's looking to open up the land they've lived in for decades. He wants miners and cattle ranchers to exploit it. He says they'll do
anything to protect the forest and that includes risking their lives. The filmmaker Apple Gomez(ph) shot exclusive footage in the Waiapi village in
northeastern Brazil. CNN's Isa Soares has more in this exclusive report.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: (SPEAKING IN FOREIGN LANGUAGE)
ISA SOARES, CNN CORRESPONDENT (voice-over): For as long as anyone can remember, the Waiapi tribe have been the stewards of these waters, and the
land that caresses it. In return, the Amazon Rainforest has given back. With every drop and seeds safeguarding their livelihood, tradition and
ultimately, their survival.
UNIDENTIFIED MALE: (SPEAKING IN FOREIGN LANGUAGE)
SOARES: But the isolated Waiapi, 1,500 strong across 92 villages in Amapa State say they've never felt so under threat as they do today.
UNIDENTIFIED FEMALE: (SPEAKING IN FOREIGN LANGUAGE)
SOARES: And it seems not even the demarcation set by Brazil's 1988 constitution can protect them. That is now perilously close with President
Jair Bolsonaro calling for protected and demarcated sections of the Amazon to be opened up to roads, ranching, farming and mining, arguing this
demarcated area is too large for the indigenous and is hindering development.
On the ground, the Waiapi tell us they have already began to feel the impact of his words and policies.
UNIDENTIFIED MALE: (SPEAKING IN FOREIGN LANGUAGE)
SOARES: With (INAUDIBLE), wild miners, loggers and ranchers invading and assaulting their land.
UNIDENTIFIED MALE: (SPEAKING IN FOREIGN LANGUAGE)
SOARES: Audio provided to Brazilian journalists just after their chief was killed on July 22nd shows their urgency for action.
[15:45:00] UNIDENTIFIED MALE: (SPEAKING IN FOREIGN LANGUAGE)
SOARES: But they say the savagery didn't stop there.
UNIDENTIFIED MALE: (SPEAKING IN FOREIGN LANGUAGE)
SOARES: They may be shaken, but the Waiapi are not running scared. Instead, in silence, they ward off evil spirits and ready for battle.
Their fight has taken them all the way to the United Nations.
UNIDENTIFIED MALE: (SPEAKING IN FOREIGN LANGUAGE)
SOARES: The Brazilian government says there was no credible evidence that the chief was murdered. With the minister of the environment adding that
the chief drank too much and fell into the river, but according to Amazon watch, there have been at least 14 cases of invasions and assaults entering
indigenous territories by land grabbers, loggers and miners.
Who have left their dark stain on indigenous people and on the world's greatest rain forest where fires scorching the land at an unseen rate. The
Waiapi have luckily been safe from the fire, but remain threatened by Bolsonaro's environmental policies.
The yellow marks here show the scale of deforestation which has increased more than 60 percent in June compared to last year. That's over 750 square
miles of lost land. Put it simply, that's one and a half soccer fields being destroyed every minute of every day.
UNIDENTIFIED FEMALE: (SPEAKING IN FOREIGN LANGUAGE)
SOARES: The world of Waiapi wait for the world to act, life goes on here. Fifty-year-old chief Jari Ati(ph) goes to school to learn Portuguese.
UNIDENTIFIED FEMALE: (SPEAKING IN FOREIGN LANGUAGE)
SOARES: Teach the next generation.
UNIDENTIFIED FEMALE: (SPEAKING IN FOREIGN LANGUAGE)
SOARES: Traditions that have protected their ancient lands. Actions that defend the very air that we breathe. Isa Soares, CNN.
(END VIDEOTAPE)
QUEST: CNN reached out to the Brazilian President Jair Bolsonaro's press office about the government's policies in the region, he was told the
president will make no comment on the issue. CNN also reached out to Ministry of Environment and Brazil's National Indigenous Affairs Agency --
the Ministry of Environment did not reply to our request for comment, and the Indigenous Affairs Agency redirected us to the president's and the
ministry's press office.
As we continue, the car industry loses a giant, remembering the CEO who turned Volkswagen into an auto industry power house.
[15:50:00] (COMMERCIAL BREAK)
QUEST: The automotive world is remembering Ferdinand Piech, he died at the age of 82. Now, Piech helped build up Volkswagen as an empire when he was
chairman and CEO. He pushed for iconic vehicles, like the Porsche 917. People say he was responsible for spending as much as he did on it. Of
course, as you're all well aware became the most successful race car in history.
And in Audi, he launched the Quattro, and it help build it into a true luxury brand. The benefits of which easily live on today. He sure also
backs some expensive flops, developing the loss-making Bugatti Veyron; one of the world's fastest car, that this is the legacy he leaves behind.
Let's think about it.
The company now has a dozen brands under its ownership. From eponymous Volkswagen, VW, Audi, Bentley, Seat, all underway which they invested
elsewhere, places like Skoda, Lamborghini. Jack Ewing is the European Economics correspondent for the "New York Times", he joins us from
Frankfurt.
The way in which this company was reborn, I think would you say reborn, rebuilt? He did it.
JACK EWING, EUROPEAN ECONOMICS CORRESPONDENT, NEW YORK TIMES: Yes, absolutely, I mean, when he took over in 1992, Volkswagen was really in bad
shape, people thought it might go bankrupt. They had had a lot of trouble coming up with a car that was as successful as the Beetle and he totally
redid the product line and saved Volkswagen. I don't think there's any question about that.
QUEST: And as he did so, he generated iconic vehicles on the way. He gave us more than just a very profitable car company.
EWING: He was never actually all that concerned with money. I mean, he knew he had to be profitable to keep making cars, but he just loved making
cars. He was -- he was an engineer through and through, and his strategy always was to put the best engineering possible into the cars.
And sometimes he went too far. I mentioned you mentioned the Bugatti, there was the Faytyme(ph), a famous flop, but he was always concentrated on
making very good cars, cars that excited him.
QUEST: OK, what would he have made of the Dieselgate scandal?
EWING: Well, that's an interesting question because he sort of bailed out just before that, yes, but he was a big promoter of diesel, and in fact,
that was one of his big innovations. Volkswagen was really a pioneer and sort of civilizing diesel so that it could be used in the passenger cars,
and that was a big part of Volkswagen's success in the 1990s, in the early 2000s.
So, I think he would be disappointed, but I think that he would also have to take some responsibility because as I argued in the book, I wrote about
this that he was the one who really created this company culture that led to the cheating of this sort of --
QUEST: Right --
EWING: Go ahead.
[15:55:00] QUEST: What he did in building the company, earlier last week on QUEST MEANS BUSINESS, we were talking about Volkswagen and the electric
cars, and the point was made to me that Volkswagen seriously behind with the others in terms of electric vehicles, what they've got in the shop and
what's on the road. He would not be pleased.
EWING: No, he wouldn't. But one thing is I'm not sure he really liked electric cars, and I think one reason they were behind is because it was
something that he ever wanted to put any money into, but I think once they're committed to it, he would have set very tough goals and he would be
firing people if they weren't meeting those goals, and they would probably be further along than they would be -- than they are today.
QUEST: Jack, good to talk to you, thank you, sir, nice to have you with us --
EWING: Thank you --
QUEST: From Frankfurt tonight. Last few minutes of trade on Wall Street, and it looks, a moment earlier -- we take a look. When we started the
hour, well, we were down just around about here, and as I sort of confidently predicted, it did turn turtle somewhat more.
The Dow is set to close, not of the worst of the day -- and news just in, Purdue Pharma has acknowledged to CNN it is involved in settlement talks
over an upcoming trial in the U.S. state of Ohio, it's set way over 2,000 lawsuits concerned and connected with the opioid crisis.
Purdue says it's ready to defend itself vigorously, little good comes from years of wasteful litigation. We will take our profitable moment after the
break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. Ruth Lee sitting on this set said she thought it was an 85 percent likelihood that there will be a no-deal
Brexit. Now, admittedly Ruth Lee is an ardent Brexiteer, but even so, she's a very sensible woman who's been a good economist for many years and
we've respected her views and we take that extremely seriously -- 85 percent.
Now, think about that. And this is despite the fact that maybe parliament would try to stop it, but all the parliamentary tricks that we use in the
Spring are not available this time in the Fall. And so, the parliament may be against it, but the government is in favor and slowly but surely, ever
closer, they will come towards a no-deal Brexit -- 85 percent.
There's still a chance of the deal, but it really does depend who is going to blink on this question of the backstop in the Withdrawal Agreement.
I've been covering this from top to toe, and so far it seems highly unlikely anybody will blink and Ruth Lee might probably well be right.
And that's QUEST MEANS BUSINESS for tonight, I'm Richard Quest in London, whatever you're up to in the hours ahead, I hope it's profitable.
(BELL RINGING)
There's the bell -- it's down, the market -- well, the bell is ringing, the day is done.
END
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