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Quest Means Business
Tesla Shatters Expectations And A Few Windows At The Launch Event Of Its Electric Cyber Truck; Ray Dalio Tells CNN, Trade Conflicts Are Only Part Of The Picture When It Comes To Tensions With China; Huawei Caught Up In The Broader Trade Battle; President Trump Welcomes E-Cigarette CEOs to the White House; Colombia Hit By General Strike and Curfews as Unrest Grows; Israeli PM Benjamin Netanyahu Rejects Calls to Step Down After Charges Unveiled. Aired 3-4p ET
Aired November 22, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:21]
JULIA CHATTERLEY, CNN INTERNATIONAL HOST: It's the final hour of trading on Wall Street this Friday. Take a look at what we're seeing for the Dow
right now, fired by four tenths of one percent. It has rallied. This as you can see, it's around 11:00 a.m. Eastern Time.
Retail disappointing, but well and truly investors continue to focus on trading headlines.
Right now, we are a glass half full, it seems. But let me give you a look at some of the other reasons for what we're seeing today.
Tesla shatters expectations, and a few windows at the launch event of its electric cyber truck.
Advocates and enemies of e-cigarettes gather at the White House as President Trump considers a ban on some vaping products.
And the great sag. The head of the world's biggest hedge fund tells us why the global economy is headed for a rocky 2020.
Live from the world's financial capital of New York City. It's Friday, November 22nd. I'm Julia Chatterley, in for Richard Quest and this is
QUEST MEANS BUSINESS.
A warm welcome once again. Good evening and Happy Friday. Tonight, Tesla breaks the unbreakable. Shares are falling after a disastrous reveal of
its latest vehicle, it's called the cyber truck, an electric pickup meant to compete with the Ford F-150 and perform like a Porsche.
All opinions on the aesthetics aside, things started to go wrong when Tesla tried to prove the trucks windows were made of quote, "unbreakable glass."
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Oh my [bleep]. Well, maybe that was a little too hard.
(END VIDEO CLIP)
CHATTERLEY: Clare Sebastian is at the magic wall for us. It's a good job. Elon's reaction was beat out there because you heard his naughty laugh.
That wasn't meant to happen.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: It was not meant to happen with this vehicle. The whole point is it is being marketed as something
that was indestructible.
Now, in his defense, it did survive a sledgehammer to the side of it in that same presentation. So clearly, the alloy that's used to make this
vehicle which is the same as they are using in the Starship at SpaceX apparently is indestructible.
But it's interesting looking at the car itself because it's --
CHATTERLEY: It's ugly. You can say it.
SEBASTIAN: It's pretty ugly.
CHATTERLEY: It's pretty ugly. It's not like your usual pickup. But there are elements in the specs, Julia, that are designed to appeal to pick up
drivers. There's a towing limit of about 14,000 pounds, which is really competitive for the most expensive model.
The payload, you can see they especially build an ATV, a sort of a quad bike to show that it can carry 3,500 pounds, but it also is designed to
appeal to the kind of the diehard Tesla supercar lover, north of 60 apparently in 2.9 seconds.
CHATTERLEY: Yes, now, you make a great point there. I do think this appeals to the hardcore Tesla fans.
SEBASTIAN: Yes.
CHATTERLEY: I'm not sure your ordinary contractor that's going about his business is going to potentially purchase this. Talk about price.
SEBASTIAN: Well and the price of the car is at $39,000.00 -- it starts at $39,000.00 and goes up to about $69,000.00.
CHATTERLEY: Which is competitive.
SEBASTIAN: It is competitive. That is the mass market price. That competes with the likes of the Ford F-150. But I don't think the market is
seeing it as a mass market car. Look at the share price.
CHATTERLEY: That was a perfect circle by the way.
SEBASTIAN: Yes.
CHATTERLEY: We call that -- let's look at the low share. Ouch.
SEBASTIAN: Yes, the market does not see this as a mass market car. They're seeing this -- this isn't really about the broken glass. This is
about the missed opportunity when it comes to the pickup market in the U.S., which is about 18 percent of all car sales in this country. The top
three cars are all pickups -- Julia.
CHATTERLEY: Yes, I want to get excited about that, down six percent or 6.4 percent. But it -- whoa, boys have one heck of a run up.
SEBASTIAN: Right.
CHATTERLEY: Okay.
SEBASTIAN: This is it. Right here, we have the last earnings report.
CHATTERLEY: Right.
SEBASTIAN: Let's just circle that so everyone can see it. That was where they posted a profit which was a surprise. Since then, they've rallied
about 30 percent. They're still up about 30 percent even with the fall today since they are up about 50 percent in the last three months, Julia.
About flat for the year, performing slightly less well than their rivals GM and Ford over the year, but still, it's been quite a run up and we are
seeing some price targets being raised today even with this blunder.
CHATTERLEY: So even with the non-bulletproof/bulletproof glass, a lot of humor let's call it on the internet over just what this truck is. People
are raising their price tags.
SEBASTIAN: Yes, I think it's not -- it's not just Wall Street that is scared to call today. They were actually trolled by another company.
CHATTERLEY: Wow. Vodafone U.K.
SEBASTIAN: Yes, Vodafone U.K. say they are launching. This is -- this is clearly a joke, the cyber phone. They've got a cross by the shock proof
class. You can see they've mimicked the Tesla shatter there. There are various other comparisons out there that's more than we can possibly
include. The angular --
CHATTERLEY: Interesting looking teapot. What else do we have? This is great.
SEBASTIAN: We've got the dump truck.
CHATTERLEY: Oh, that's classic. It reminded me of a mouse, like the old Apple mouse or even a piece of cheese, actually when I first saw it. I was
like, maybe I'm just being a girl about this.
[15:05:09]
SEBASTIAN: Here is another -- I was a fan.
CHATTERLEY: Oh wow. "The Mandalorian."
SEBASTIAN: Getting into "The Mandalorian." So, yes.
CHATTERLEY: Wow. Elon, how is the reaction with this?
SEBASTIAN: He is certainly -- he certainly got a lot of reaction.
CHATTERLEY: Exactly. The PR on this one, not bad.
SEBASTIAN: Exactly.
CHATTERLEY: How interesting. Clare Sebastian, thank you so much for a wrap-up of an interesting day. That's all I can say.
Now Elon Musk makes bold claims about colonizing Mars, about connecting our brains to computers and revolutionizing transportation -- that aside.
The expectations though don't always match the reality. Let me take you through this.
For instance, Musk promised this was Tesla's truck that was in his own words, literally bulletproof. Then, of course, the windows were smashed
with relative ease.
Now, Musk cast himself as a visionary CEO when -- well, many might agree. It's actually his erratic behavior that often it makes the headlines.
For example, if you remember, he smoked marijuana while in a podcast. The next month, he'll actually stand trial for calling a rescue diver a
pedophile. Last year, Musk said he might take Tesla private, "funding secured," do you remember that? He tweeted that. Then the share price
soared. In reality he got slapped with a fraud charge from the S.E.C. The funding had not been secured and Tesla remains a public company.
All right, let's talk this through Daniel Ives is the Managing Director of Equity Research at Wedbush Securities. Great to have you with us, Dan.
DANIEL IVES, MANAGING DIRECTOR OF EQUITY, WEDBUSH SECURITIES: Good to be here.
CHATTERLEY: What, do you make of the cyber truck?
IVES: I mean, I think in terms of the launch, it was really a black eye for Musk and Tesla. I mean, these launch events are so key for Tesla and I
think if you look at the design --
Look, I mean, even though it's more of a Mad Max/Blade Runner, I think very limited and sort of niche opportunity for the market.
The Wall Street is disappointed because this was viewed as a potential market opportunity, and so I think they tripped over their shoes.
CHATTERLEY: I mean, we were joking about it. On "First Move," this morning, I said, is it a bird or is it plane? I mean, you were pretty
clear, you say it's a stealth bomber.
As far as you're concerned, this bummed. And it's a huge and very lucrative part of the market to your point.
IVES: Yes, there was a drumroll for this really for the last year about pickup theme. We've had about three million units in the U.S., F-150 sells
about $1 million per year. So there was an opportunity here.
But then fundamentally, what you're starting to see here is that it was disappointing because now I think Wall Street basically says could this
evening do 75 to 100K per year? And I think if you look at the launch event. Now, definitely our view is, it is a debacle.
CHATTERLEY: What about pricing here? And is it just the aesthetics here? Because we were just making the point -- Clare and I -- that maybe this
appeals to Tesla enthusiasts, but what about price? Because the starting price of this is lower than what we see on the market and you've got some
pretty steep competition, whether it's Ford, whether it's GM? Rivian, of course? That's another one.
IVES: And Rivian is $69,000.00, but here, the base model is a little deceiving because of it moves with additions and specs, it could be called
at $50,000.00 or $55,000.00. No doubt cheaper, and that's something that will appeal to a certain, you know, quote, "a roiled Tesla base."
But ultimately it comes down to it was cheaper, but it comes down to the design. And I think when you look at it, it almost looks like a bad sci-fi
project.
CHATTERLEY: A bad sci-fi project. Not what he was expecting. I mean, he was laughing when that glass was damaged there; perhaps not laughing.
You say in terms of demand, what we're looking at here 150,000 to 175,000 units for the first full year of delivery. So we're talking likely 2022
and that's kind of the line in the sand here. If they don't achieve that - -
IVES: Yes, that is sort of a bull case, and I view that as extremely difficult because realistically, it could be half that in terms of when we
look at it as an opportunity.
I can tell you from investors, investors really right now are sort of writing this off as they thought this could be called a double or triple
from a baseball analogy and instead it looks like maybe it's a bunt.
CHATTERLEY: Okay. We were just showing the price there. Price trading what? $330.00. You're 12-month price target - $270.00. We've seen
analysts today upgrading their forecasts despite the almost exponential rally that we've seen since the summertime. What do you make of what's
going on here? Because I know you -- and you and I've had this conversation many times -- you had clients, you got them into it and they
got willing truly chopped around in this one. What are you thinking right now?
IVES: Yes. I mean, look, obviously extremely volatile on the downside as we've talked about. It was never Armageddon, like that may be some of the
bears and the conspiracy theorists, but I believe the stocks run too much here because I think if they have any hiccup in the next few quarters, the
stock that's 250.
So that's right. Right now, I continue to be me more cautious on Tesla. A great rebound, a massive feather in the cap for Fremont Musk, but right now
it's still some heavy lifting ahead and I think that's what we need to see.
CHATTERLEY: So sort of the bias is to the downside here rather than upside.
IVES: Yes, I'd be selling in this sort of rally.
[15:10:10]
CHATTERLEY: Dan Ives, great to have you with us.
IVES: Thank you.
CHATTERLEY: Thank you. The stealth bomber there. Billionaire hedge fund manager at Ray Dalio tells CNN, trade conflicts are only part of the
picture when it comes to tensions with China. Dalio spoke with our Kristie Lu Stout in Beijing. I wonder what he called the great sag coming in the
global economy. Listen in.
BEGIN VIDEO CLIP)
RAY DALIO: FOUNDER, BRIDGEWATER ASSOCIATES: I think we're now touching at the end of a very touchy issue.
KRISTIE LU STOUT, CNN INTERNATIONAL CORRESPONDENT: Yes.
DALIO: I don't think that we are going to make the Chinese be doing the things that we want them to do anymore that they are going to tell us how
we should do the things that we want to do.
LU STOUT: Yes.
DALIO: And the question is, how intransigent is each side on that? In other words, to pass a bill is one thing, to take certain actions is
another -- I think that's a very sensitive point.
LU STOUT: Yes, you know, it is such a sensitive point. It could risk a trade deal between U.S. and China, you know.
DALIO: I think that trade deal is part of the picture. But it's only part of the picture. There are four conflicts that U.S. and China have that we
have to watch. Trade is one of them.
There's a technology conflict. There's a geopolitical conflict, Hong Kong, Taiwan and so on. And then of course, there's -- there is the capital or
currency conflict that could also be part of it.
These are all things on the table, and I don't think anyone knows exactly how they're going to be used.
LU STOUT: Yes.
DALIO: We're now in an election year, and so a lot will change depending on the elections and the post-election year.
LU STOUT: Yes, but looking at the political environment right now, are you seeing just the forecast for U.S.-China relations, it's going to get darker
and darker the year ahead.
DALIO: The one thing that most Democrats and Republicans are in agreement on is an antagonistic China policy. So that's correct. How it's going to
be handled by whom is up in the air. We don't know exactly.
LU STOUT: You're a student of history and history repeats itself. Are we on the cusp of not a recession, but a depression?
DALIO: We're in a situation in which a lot of liabilities are coming at us. To some extent, they are debt, to some extent they are pension
liabilities and healthcare liabilities. More liabilities than we can fund.
That would mean they will either be cut back and people who have those promises will not go to those promises filled. I don't think that'll
happen. I think that's politically too difficult.
Or they will be more of the monetization of those deficits. In other words, the printing of money and that process for dealing with it. So it's
very much --
LU STOUT: That's just spinning wheels though.
DALIO: That's just the machine. That's just how the machine works.
LU STOUT: Yes.
DALIO: So I think we're moving in a great sag. The impetus is for growth that began in 2008 and 2009 are largely behind us. The cutting of interest
rates, the cutting of corporate taxes, and so on. Those are behind us.
And I think we're now in a period where we have a lot of these financial assets, which are financial liabilities that are too big and they're going
to then have to be dealt with, with deficits and monetization and monetary policy.
LU STOUT: So it's not a recession. It's a great sag.
DALIO: That's what I would call it.
LU STOUT: We are in the midst of it right now.
DALIO: Yes, early stage, it seems.
LU STOUT: Your firm made a lot of money in 2008 because you were able to position yourself in anticipation of the recession. In anticipation of the
great sag, have you -- how have you positioned yourself to be able to ride this out?
DALIO: Well, I don't discuss a particular position for various reasons. But I would say what we have is a very, very highly diversified portfolio.
I think the most important thing for individuals is to know when cash is zero interest rates, and close to zero, or maybe below and bond yields are
low and so on, and equities are priced because -- they're fully priced because of that. That diversification across countries and across asset
classes is an important thing.
LU STOUT: Yes. So you're going to ride this out, of course, and profit well.
DALIO: We hope. Well, we try.
(END VIDEO CLIP)
CHATTERLEY: Kristie Lu Stout there with Ray Dalio and Matt Egan is here to discuss this with me. Great to have you with us. So we're heading for a
great sag or are we in a great sag, which is an interesting way to phrase it, I think. But what's also quite fascinating what we've seen today is a
report in "The Wall Street Journal" saying they've put a billion dollar bet on equities falling between now and March.
And now, Ray Dalio himself actually came out on Twitter and Social Media and pushed back and said, you've got it wrong. What's going on here?
MATT EGAN, CNN BUSINESS SENIOR WRITER: That's right. So at first it did look maybe all of this gloom and doom that we've been hearing from Ray
Dalio for some time now was perhaps being actually backed up with real money.
[15:15:06]
EGAN: "The Journal" reporting that his firm, Bridgewater Associates, one that we follow very closely had placed this billion dollar bet against the
market.
It was like taking out -- put options that would pay out if the S&P 500 or the Euro Stoxx 50 dropped by March. However, as you mentioned, Dalio went
on Twitter, and he said, listen, Bridgewater -- he wants to be clear that this story is wrong.
He said, I want to make clear that we don't have any such net bet that the stock market will fall.
Now the key word there net bet, right? It's possible that he does have a billion dollar bet, but this is the world's largest hedge fund, and they
have a lot of bets going on at one time. So it's possible that that billion dollar bet put options may have just been hedging some of his more
optimistic bets.
But still, you know, there is no disputing that as we just heard, Ray Dalio, someone who predicted the 2008 financial crisis, he is sounding
awfully pessimistic lately. He is worried about this great sag. He is really concerned about inequality and about the impact on politics,
particularly around populism.
CHATTERLEY: Totally. There are all sorts of risk events coming up. Why would you not pay a little bit of premium for some options to protect if we
do see stocks and equity markets fall? That's a very different thing to what "The Wall Street Journal" was alluding to today. So quite
interesting.
One of those risks, of course, trade. We continue to hear those headlines, more noise from President Xi and President Trump actually in the last 24
hours. What are we honing in on now as our options?
EGAN: Right now, it feels like the trade talks are pretty much stuck. I went back and looked at what happened October 11th. President Trump called
reporters into the Oval Office and he was there with Chinese negotiators and he said it had been a love fest.
He talked about how they had made reached this substantial Phase 1 deal, but he said it was subject to getting it written. He said that would take
three to five weeks. Well, it's been six weeks. It's been pretty hard to get that deal written as we might have expected.
And now there are some signs that behind the scenes that maybe things are actually going to potentially get worse before they get better.
Christine Romans, CNN's reporter, she said that she talked to a source from the White House who said, listen, there's two options right now one,
there's a mini deal between the U.S. and China. China agrees to buy U.S. agricultural products, opens up its financial sector and the U.S. decides
not to put those tariffs that are supposed to go into effect next month.
The other option is that the U.S. actually goes ahead with tariffs on this trade war gets worse. So I think all of this is sort of another reminder
that maybe investors jumped the gun a bit in October when they listened to the rhetoric around all of this optimism about a trade deal because there's
no guarantee that a Phase 1 agreement will get reached.
And even if it does, it doesn't mean the trade war is over. It would just be removing some of these obstacles that have been put in place in recent
months.
CHATTERLEY: Yes, and yet markets continue to trade around record highs. Glass half full and then some. Matt Egan there's going to be more to come
on this no doubt.
EGAN: Thank you, Julia.
CHATTERLEY: All right, Huawei caught up of course in the broader trade battle. Going back to black. The Chinese tech giant being blacklisted
again after a U.S. regulator declares it's a national security threat.
And President Trump meeting with all sides in the vaping debate. He is looking to find a solution to the public health problem.
(COMMERCIAL BREAK)
[15:21:04]
CHATTERLEY: Welcome back to QUEST MEANS BUSINESS. U.S. regulator, the F.C.C. voted unanimously to designate Huawei a national security risk. The
move bars American companies from using an $8 billion government subsidy to buy equipment.
This, after the Trump administration granted a 90-day extension for U.S. firms to continue working with the Chinese tech giant.
Our Hadas Gold spoke to Huawei's Head of Global Government Affairs on Wednesday.
(BEGIN VIDEO CLIP)
VICTOR ZHANG, HUAWEI'S SENIOR VICE PRESIDENT FOR GLOBAL AFFAIRS, HUAWEI: Extension for the temporary general license to Huawei will not impact on
Huawei's business either. This decision made by the U.S. Department of Commerce does not have the -- change of Huawei's situation to be treated
continually unfair.
GOLD: What about in places like Europe? How have you seen consumers and retailers react to the news of not potentially being able to have Google on
the phones?
ZHANG: This will cause some inconvenience for the consumer without the Google applications. We are very open to working with Google. The working
relation with Google is very good. We have done very good cooperation in the past 30 years. And continually, we hope we can work with Google. We
are hoping.
GOLD: We're talking a lot here about trust. So let's flip this. Do you think that the Chinese government should also be trusting American tech
companies like, say a Google?
ZHANG: I think the trust -- that globalization is based on trust, so we can say over the past 30 years, so the digital sector, which Huawei worked
in has benefited from the globalization.
So I think that globalization open and cooperation is a major trends for the industry.
(END VIDEO CLIP)
CHATTERLEY: Democratic sources say the House could vote to impeach President Trump by Christmas. It comes after 12 witnesses spoke over five
days in public hearings.
Lawmakers heard bombshell testimony about the President's alleged quid pro quo of Ukrainian security aid in exchange for an investigation into Joe
Biden and his son.
Donald Trump now says he wants a full Senate trial if the House votes to impeach him.
Charlie Dent, the former U.S. Republican congressman from Pennsylvania, and he joins us now. Sir, great to have you with us. Thank you for joining
Quest Means Business. Your view on this? Do you think it makes sense for the President to come out and say, Look, it's great. We'll have a full
Senate trial, if indeed they have House vote to impeach because no one expects the Senate to vote to impeach him anyway.
CHARLIE DENT, CNN POLITICAL COMMENTATOR: Well, Julia, thanks for having me on the program. I'll say this. I don't think the President wants to be
impeached. He is trying to put his happy to face on this as he can.
His feeling is that of course the House will impeach him, and then the Senate will acquit him -- that is, they will not convict him, and he will
declare victory saying see, they tried to force me out and I beat them. I think that's his thinking. But this is certainly a stain on his
presidency, should he be impeached.
CHATTERLEY: Do you think there's enough evidence at this stage, Charlie to move on with Articles of Impeachment? Do you think the house has enough?
DENT: Well, the fact pattern is very bad for the President. Let's be honest. I was a former Chair of the House Ethics Committee and I know that
you cannot use official resources of the United States government to one, solicit a foreign head of government and two, to ask for anything of value
that is opposition research on your opponent. That is simply wrong.
And frankly, it can get you in a lot of trouble. If a Member of Congress did that, he or she would be under Federal investigation, no doubt for such
an act.
Then of course, there's the issue of the quid pro quo or the this-for-that. You know, the Ukrainians will do the investigation in exchange for that, we
will release the $400 million in military assistance.
[15:25:01]
DENT: So I think this is really quite problematic. The fact pattern is bad. But what's interesting, as bad as the facts are, and as devastating
as the testimony has been, it seems to me that much of the public has not been moved by the impeachment process.
I don't think the President is any worse off now than he was before these proceedings began.
CHATTERLEY: And that's such an important point to make, as you said, you've just called it devastating testimony, but is and has this provided
any reason for the independents out there and the Republicans who continue to support Donald Trump or at least have until this point -- has there been
any reason for them to change their minds here? And you're saying no.
DENT: Well, I think there should be a reason to change their mind, but I suspect impeachment is just not -- it's just not at the fore of a lot of
people's minds.
I just saw a poll the other day, I think was the Morning Consult and showed the 10 issues, you know, impeachment was number 10. So it's not really
something that I think everybody is focused on as many of us are.
And I always had the sense, too, that much of the American public, from time to time do suffer from impeachment -- I should say from investigation
fatigue. They've seen a lot of scandals and investigations over the years, and I think they get a little bit tired of them, even though this, to me,
is a very serious and consequential matter, based on the behavior and the misconduct of the President.
In this case, it's simply alarming that he did engage in this type of activity.
CHATTERLEY: Yes, they were fatigued off the Mueller investigation, and then they've been hit with this Ukraine investigation. Is the bigger risk
here -- and I think we've been asking this all the way along, Charlie, actually for the Democrats here and the risk that if we do see some kind of
Senate trial as well, you pull the senators that are on the campaign trail for President here, off that trail in order to be in Congress while this
goes on and therefore not allowing them to get out there with the public and say this is why actually you have to vote for a Democrat here and not
allow Trump to take another four years.
DENT: Well, you know, hey, for these Senators, what I say to them is duty calls. And you know, you have to -- you have to mind the store and this is
as big as it gets.
If you're running for President and you support impeachment, you better make sure you're there as a juror to, you know, to hear the case, and then
make a decision.
But, you know, again, I still think there's a chance that some Republicans may defect. I think more so in the Senate than in the House. I think it
would be a mistake for the House Democrats to rush these proceedings, or force them.
By the same token, it would be a mistake for Senate Republicans to rush or force that trial. I think they have to do their due diligence. I think
they have to take the time necessary to make sure that the American public has confidence in the process.
CHATTERLEY: This White House is so noisy. Very quickly, Charlie, do you think this is all forgotten by the time we get to 2020 and actually, we're
talking about other things by the election?
DENT: Oh, you know what? It's unclear just how impeachment will affect the upcoming 2020 election. I think that is very unclear. I'll tell you
who it will impact. Swing state Republicans who are up for reelection, they have a lot to fear out of this, as do swing district House Democrats.
Many of them are also a bit anxious on this vote as well, so this can cut both ways. Although at the end of the day, at least in the House, I don't
think it's going to be as big an issue as many would think. This is my feeling today.
CHATTERLEY: Yes, I feel like Trump matters more. Charlie Dent, great to have you with us. Thank you so much for that.
All right. We're going to take a quick break now ...
DENT: Thank you.
CHATTERLEY: ... on QUEST MEANS BUSINESS. From the Middle East to South America, governments under pressure as people demand, better economic
conditions. What does the future hold? We will discuss.
(COMMERCIAL BREAK)
[15:30:00]
CHATTERLEY: Hello, I'm Julia Chatterley, there's more QUEST MEANS BUSINESS in a moment, when we'll be live at the White House as President Trump
discusses a ban on flavored e-cigarettes with the tobacco CEOs. And Colombia becomes the latest Latin American country to be rocked by unrest
as general strikes bring the economy to a halt.
Before that though, the headlines at this hour. U.S. President Donald Trump spoke on the full Senate trial at the House of Representatives' moves
to impeach him. He spoke to the "Fox News Network" after a house panel held its final public hearing in the impeachment inquiry.
Former U.S. National Security adviser John Bolton says the White House blocked him from using his personal Twitter account, and suggested it did
so out of fear over what he might say. Bolton tweeted quote, "we have now liberated the Twitter account, previously suppressed unfairly in the
aftermath of my resignation as National Security adviser. President Trump denied the White House shut down Bolton's account.
A defiant Benjamin Netanyahu is rejecting calls to resign after Israel's Attorney General unveiled corruption charges against him. In a video
statement Friday, Mr. Netanyahu did promise to accept any court decisions in the cases, but again claimed that investigators have acted illegally.
He calls the charges a, quote, "attempted coup".
Prince Andrews' private secretary who arranged his explosive "BBC" interview last week has left her role. CNN understands though that she
will continue overseeing one of his initiatives, Pitch at Palace. The Duke of York has been stepping back from public duties following that widely
slammed interview about his relationship with convicted sex offender Jeffrey Epstein.
Hong Kong's high court says a controversial ban on facemask can be enforced for the next seven days. That's ahead of this weekend's local elections.
On Monday, the court ruled the ban was unconstitutional, but now says it can remain in place while the government appeals that ruling.
Right, welcome back to the show. As the internet slowly trickles back in Iran, the U.S. is sanctioning the country's Telecom Minister over the
blackout. The government switched off the internet for several days after a protests flared across the country last week over a fuel price hike.
More than a thousand protesters have been arrested and Amnesty International estimates at least a hundred have been killed.
Robin Wright is a contributing writer for "The New Yorker" who has covered the country extensively, and she joins us now via Skype. Great to have you
with us on this story. The Iranian authorities at this moment are saying, look, things are getting back to normal, there's been a partial restoration
of internet access, and that this was a foreign-backed failure in terms of the protests. What's the truth here?
[15:35:00]
ROBIN WRIGHT, CONTRIBUTING WRITER, "THE NEW YORKER": The truth is that the Iranians have managed to quash through the use of force the protests over
their increasing price of not just fuel, but a whole slew of basics. And the problem for the Iranians is that they have not yet addressed any of the
problems that sparked this uprising. And so, there is the potential for future unrests particularly as the United States tightens its economic
squeeze on Iran.
That the tensions are flaring between Washington and Tehran, and the Iranians have not managed to figure out a way to ease the tensions over the
nuclear program that have in turn sparked economic sanctions. And so, there's kind of a race against time next -- over the next few months over
which side can take the toughest action and force the other one's hand.
CHATTERLEY: You know, we've seen these kind of public protests before. We saw them two years ago, too. But if I look at the spectrum of protests
that we saw, and the spectrum across the population, this time feels very different, and if you combine that with the fact that the economy is
expected to contract almost 9 percent in terms of GDP this year to your point, the squeeze here I think is incomprehensible. What happens now in
terms of protests?
WRIGHT: Well, first of all, this round of protest is not nearly as bad as they were in 2009 when millions of people turned out across the country to
protest what they believed was a fraudulent vote. But the reality is that Iranians are pretty bold in defying the system. They did, as you point out
two years ago, again over economic issues.
At the end of the day, Utopian ideologies always face the toughest challenge from economic realities, and when they can't deliver. And Iran's
revolution was carried out in the name of the oppressed, and there are growing numbers of people in Iran who believe they are now among the
oppressed from the revolutionary regime.
CHATTERLEY: We saw President Trump break six days of silence on it as well. I mean, he tweeted that the regime would shut down their entire
internet system so that the quote, "great Iranian people cannot talk about it." We've had Mike Pompeo saying, look, send us your images of the
crackdown that we're seeing from security forces here.
What are ordinary Iranians saying about the influence of the United States, that the calls here from the likes Mike Pompeo to openly talk about what
they're experiencing domestically, but at the same time recognizing that its U.S.-led sanctions that are increasing the pressure on the domestic
economy here.
WRIGHT: Well, I think Iranians do recognize that their own government is responsible for many of the problems, whether it's corruption, the increase
in basic prices of daily life. I think there's also a great deal of blame on the United States, a disillusionment. There was celebration across the
country at the time of the nuclear deal in 2015, and there's a sense that President Trump in walking away from it has abandoned any of the kind of
sentiment for the Iranian people that he's been expressing in the last few days.
That he is partly responsible for the difficulties they're all facing. But I think the fact that Iranians are demonstrating against their own
government is an indication of where many them lay the blame.
CHATTERLEY: What happens over the next few months because to your point, this is not as widespread, as violent as we saw two years ago, but at the
same time the deterioration in the economy is in fact far worse. What's the situation, if we fast-forward two, three, four months ahead?
WRIGHT: Well, the Iranians tend to use in the aftermath of protests all the forces they have to repress dissent. And I suspect we're in for a
period running up into the Iranian new year in March where -- and the anniversary of the revolution in February where you'll see the revolution
with the regime use all the might it has to prevent further protests.
It wants to appear to the outside world to be in charge. Remember, there's a lot at stake for them not just inside the country, but in its place in
the world. Can it keep the Europeans, the Russians, the Chinese on their side. Can they prevent further sanctions that will squeeze Iranians by
sticking to the -- you know, brokering an arrangement on the nuclear deal.
Can they break the impasse? And if they can't, I think, you know, in the Summer when -- by the Summer that I think you'll see some kind of intense -
- more intense reaction in Iran, if there is not a breakthrough on diplomatic negotiations and economic sanctions that are not -- and the
squeeze that Iranians are now feeling every day.
CHATTERLEY: Yes, the international community response here are going to be key. Robin, fantastic to have you with us, Robin Wright there,
contributing writer for "The New Yorker". Right, let's move on --
WRIGHT: Thank you --
[15:40:00]
CHATTERLEY: Not the only protests that we're watching here as well. Protests continue in Colombia after hundreds of thousands participated in a
general strike against the government. At least, three people have died, dozens have been injured. There have been a wave of protest across South
America in recent weeks including Bolivia, Chile, Ecuador over wide-ranging issues including economic conditions, equality and national politics.
Alberto Ramos is the Chief Latin American economist at Goldman Sachs and he joins us now. Alberto, great to have you with us. I know there are
idiosyncratic stories in each of these nations, but if we take a bird's eye view here, is it the fact that we've seen a number of years here of slowing
and particularly low growth for emerging market nations, in particular this contributing to the protests and the push-back that we're seeing from the
people here?
ALBERTO RAMOS, CHIEF LATIN AMERICAN ECONOMIST, GOLDMAN SACHS: I mean, there's no doubt about it. I mean, the more striking feature off the let-
down micro economic landscape has been the persistence of low growth, and just to give a few numbers. The last time, the region Latin America as an
aggregate has grown more than 2 percent, which is a very ambitious target was seven years ago.
CHATTERLEY: Wow --
RAMOS: The average of the last six years is 0.9, that excludes Venezuela. Venezuela has declined by 70 percent, that's three times the great
depression. So 0.9 is below the population growth, meaning that real GDP per capita is declining, living standards of decline. Latin America was
already the most unequal region in the planet. It just became worse in recent years.
And what the average citizen is facing is low growth of income and wages, a rising perception of income and wealth inequality, inadequate social safety
nets, inadequate provisions of basic public goods from infrastructure to public service such as education, healthcare and also security.
Recurrent cases of corruption and impunity and the political system in which they don't feel represented. As you can imagine, that's a very toxic
cocktail, that is leading people to the public square and brought this. So this is very genuine, it's very real.
CHATTERLEY: And it's deterioration, I think in trusts, and institutions and in governments. No matter what the policies are, it's allowing the
cover of the things like corruption that perhaps weren't revealed when things were growing in 5 percent, 6 percent, 7 percent. Now, they're being
more and more revealed. And actually, it's not just the smaller nations, Mexico stagnation, Brazil barely recovering as well -- it's even the
largest nations are suffering here, too --
RAMOS: Absolutely, I mean, the large economy has been underperforming severely from Argentina and Mexico, Brazil and it's the combination of a
slow social and economic progress, a combination of declining trust in key institutions and the government and political parties and Congress, in the
judicial system and also diminished expectations about the future, that is leading to increase in social and political frictions.
So, this is generally like this is not a reality that has been stoked by political activists, you know, for political gain. This is something that
the authorities have to be mindful, it's unacceptable that the average is 0.9. So, they have to find a way to channel that frustration into better
economic outcomes.
CHATTERLEY: How do they do that? That's their next --
RAMOS: Yes --
CHATTERLEY: Question and the critical questioning --
RAMOS: I mean, we don't have to over think about it, like in the end, growing is about capital accumulation. You have to create the conditions
to attract investment, only for investment and you create growth --
CHATTERLEY: Right --
RAMOS: And jobs and opportunity and social enfranchisement. We have -- you know, recently, the case of Chile which is an equal but well off
economy. Chile is not an equal poor economy, but even there, you know, people are questioning the economic model. But when you look for a simple
per capita in Chile, is more than double that of Colombia and Peru, more than 80 percent that of Brazil, more than 50 percent that of Argentina.
CHATTERLEY: Wow --
RAMOS: Certainly, the model that they have down there has not transformed Chile into Switzerland, but has transformed Chile into what Chile used to
be. So, we have to be careful not to fall into the temptation or given the shortcut or a populace elsewhere to those -- you know, to that social
pressure because you may end up going from a bad situation to an even worse one.
You don't know when the situation -- when it's bread for today, hunger for tomorrow. That is a challenge for the authorities, and we'll find a way to
increase investment and opportunity.
CHATTERLEY: And the challenge well and truly exists in 2020 because even though you've upgraded the growth outlook, it's very minor. So --
RAMOS: It is, it is still leading steel, you know, very disappointing to some extent. You know, average real GDP for this year, 2019 is 0.7, we
have an expectation going to 1.7, yet another, you have growth, you know, 2 percent.
CHATTERLEY: Yes, and more pressure. Alberto, great to have you with us --
RAMOS: Thank you --
CHATTERLEY: Alberto Ramos there from Goldman Sachs. All right, tobacco executives and public health leaders are all at the White House where
President Trump is holding a meeting that could determine the future of vaping in the United States. All the details after this.
(COMMERCIAL BREAK)
[15:45:00]
CHATTERLEY: Welcome back to QUEST MEANS BUSINESS. Donald Trump just wrapping up a meeting on vaping at the White House. The President was
joined by executives from the tobacco industry as well as public health leaders. President Trump discussed the debate around regulation.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: You watch the issue, you look at, you know, with the alcohol -- you look at cigarettes, you look at
all -- if you don't give it to them, it's going to come here illegally, OK? They're going to make it. But instead of Reynolds or JUUL or you know,
legitimate companies, good companies making something that's safe, they're going to be selling stuff on a street corner that could be horrible. And
so, once --
(END VIDEO CLIP)
CHATTERLEY: Boris Sanchez is at the White House for us. Boris, that sounds like the president well and truly backing off any prospect of
regulation on this. What do we think?
BORIS SANCHEZ, CNN WHITE HOUSE CORRESPONDENT: It certainly does. I mean, initially the White House had proposed this ban and made it public back in
September, and this is the most activity we've seen on this issue since then. It kind of gives you an indication that there is credence to those
reports that the Trump campaign looked at polling among its supporters, and realized that this was an issue of vaping that was important to them, and
as part of the reason that we've seen the president back off.
Effectively, what we had today was a debate in the cabinet room where the president pitted these vaping companies against health associations, and at
least one national lawmaker in Utah, Senator Mitt Romney who is very passionate about this. He was outspoken in the room, challenging some of
these vaping executives, suggesting that flavors in vaping are meant to attract kids.
The counter-argument from some of the executives was that, effectively banning these flavors would lead to lost American jobs. The senator's
response was that for each job lost, that would mean 100 teens lives, clearly a very heated issue. The president ultimately saying that he wants
what is best for the kids, Julia.
CHATTERLEY: Yes, I think it's interesting, isn't it? I mean, when you talk to health professionals, they say look, if this is an on-ramp for teenagers
through nice flavors into smoking traditional tobacco products, it's a disaster. But if this is an off-ramp for people who are traditional
smokers of tobacco products, getting off those on to vaping is a good thing. So where do you draw the line? You ban the sweet flavors that
appeal to children surely.
SANCHEZ: Yes, and that's really the argument that we heard from Mitt Romney effectively saying that, look, flavors like cotton candy and unicorn
poop are not meant to bring in adults. Those are meant specifically to attract kids.
[15:50:00]
Obviously, the president wants this to be an issue that's debated, but it's unclear exactly how this is going to move forward, given that, it is so
sensitive to some of his supporters, and that he has apparently a stake in this debate as well, Julia.
CHATTERLEY: Did I hear that right, Mitt Romney talked about unicorn poop?
SANCHEZ: Oh, yes, it was certainly the most amusing portion of his meeting. Mitt Romney is talking about this flavor which we've since
learned is like a mix of blueberry cupcakes with white chocolate, never tried it myself, can't speak for it, but that's something the senator
actually said in a cabinet room meeting at the White House.
CHATTERLEY: Wow, ban it --
SANCHEZ: Yes --
CHATTERLEY: Ban it. This is completely out of order. Boris Sanchez --
SANCHEZ: Thank you so much --
CHATTERLEY: Happy Friday at the White House for us there, wow. No words. All right, we're going to take a quick break here on QUEST MEANS BUSINESS,
but when we return, it's the end of an era for the Angels. Victoria's Secret cancels its annual fashion show amid growing backlash to the event.
That's after this.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to QUEST MEANS BUSINESS. Victoria's Secret pulling the plug on its annual fashion show after years of fallen ratings
in criticism that the event is sexist and anti-feminist. Victoria's Secret has seen its sales slide for months, its parent company L Brands reported
over $250 million loss last quarter.
Marvet Britto joins me now from Lyon in France, she's the CEO and founder of the Britto Agency. Great to have you with us on the show. What do you
make of this decision, declining view -- we're still talking millions on an annual basis. Are you shocked by this?
MARVET BRITTO, CHIEF EXECUTIVE OFFICER & FOUNDER, THE BRITTO AGENCY: I'm not shocked at all. The CEO, the Chief Marketing Officer, all the
leadership at Victoria's Secret did not evolve as culture evolved. They were really stale in their thinking, and they really weren't inclusive,
which is where you have to be in this emerging society. So, I'm not surprised, it's unfortunate because you saw so many models and so many --
you know, brands ignited and birthed(ph) basically any alignment with Victoria's Secret was gold.
And at this point, they have too much brand baggage to recalibrate from. So, it's really unfortunate to see this happen, but I'm not surprised.
CHATTERLEY: You think the brand itself has become tone deaf, and that this is a product ultimately that women wear, and it simply doesn't appeal in
the same way to women as perhaps it did in the past.
[15:55:00]
BRITTO: It used to have a sentimental value. You know, Victoria's Secret was a very aspirational brand. But at this point, culture is evolving.
People are evolving, and you have to reflect the plight of the community. You can't be tone deaf to the point where you discriminate in a way where
you're tone deaf to the Me-Too movement, you're tone deaf to all of the different movements and sensitivities that are happening.
Culturally, there are too many waves that Victoria's Secret just really didn't -- they didn't -- they weren't mindful of. And it was unfortunate
because everyone is (INAUDIBLE) around the brand. It was aspirational, and at this point, it's difficult to see a brand like that die, but a movement
will die if a brand doesn't innovate.
CHATTERLEY: Do you think it also has something to do with the CEO Les Wexner's long-term ties to sex trafficker Jeffrey Epstein? Because there
was a lot of noise around that, and noise around the brand, too. Do you think that's also been pivotal with the sort of tone change and the
sentiment surrounding Victoria's Secret here or is that just additional?
BRITTO: Well, it was additional, but it didn't help. And it didn't help that they weren't proactive in really distancing themselves from Epstein
and all of the drama, and all of the insensitive narratives that were being built around the brand. It would have helped if they had really stepped in
front of this and distanced themselves, and made a statement, and really stepped up and said that Victoria's Secret's values, their core values and
what their customer means to them meant more than an alignment and an affiliation, and they did not do that.
They were slow to do it, and when the CMO came forward and really was not inclusive of transgender models, that really put the nail in the coffin for
Victoria's Secret. So, again, you have to reflect culture, you have to be sensitive to what did happen --
CHATTERLEY: Marvet, I'm going to have to wrap you up, but yes, more sensitive to culture and the timings. Great to have you with us, Marvet
Britto, just moments left on trade on Wall Street. We'll have the final numbers after this.
(COMMERCIAL BREAK)
CHATTERLEY: Final look at the week. We are trading in the green, 0.4 percent higher, for the Dow though, still down around half a percent
overall on the week. That's the closing bell for the final time. That's QUEST MEANS BUSINESS. I'm Julia Chatterley in New York.
END
