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Quest Means Business
Officials Warn of Perilous Conditions as Fires Rage in Australia; French Chef Sues Michelin Guide Over Stripped Star; Syria Joins Iraq in Denouncing U.S. Airstrikes. Aired 3-4p ET
Aired December 30, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:13]
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: It is the final hour of trading on Wall Street. The Santa Claus rally has come to an end on Wall
Street. The Dow is off around half of one percent. Volume is low and this is what investors are watching.
Tesla delivers its first Chinese made cars, but analysts warn the company may not hit its targets. Shares are down.
On strike. Cabin crew at German Wings walk off the job. The Union warns the industrial action may go longer than expected.
And most chefs can only dream of getting a Michelin star. But one chef who has been awarded nine has decided he no longer wants any.
Live from the world's financial capital, New York City. It's Monday, December the 30th. I'm Eleni Giokos, in for Richard Quest and this is
QUEST MEANS BUSINESS.
A very good evening to you and great to have you with me. U.S. markets are slipping at the end of a stellar 2019. The Dow is down 100 points on very
thin trading volume right before the New Year's Holiday, so it's no surprise. Now, usually these days we do get very light volume coming
through and it exacerbates moves either to the up or downside.
Still, all three U.S. indices are up more than 20 percent in 2019. The S&P 500 is on track for its best year since 1997. Trade optimism and easing
from the Fed have driven stocks higher.
Steven Englander is the Global Head of G10 FX Research and North American Macro Strategy at Standard Chartered Bank. He now joins me.
Great to have you on the show. So let's talk about this. I mean, look, what a stellar 2019? If you were in these markets, you've obviously had
double digit returns. But the question is, are the bulls going to still be in play in 2020?
STEVEN ENGLANDER, GLOBAL HEAD OF G10 FX RESEARCH AND NORTH AMERICAN MACRO STRATEGY, STANDARD CHARTERED BANK: Well, I think it depends where they're
going to be in play. I mean, you know, Standard Chartered is a bank in emerging markets and we think that the cycle is swinging in favor of
emerging markets that they've lagged behind some of the U.S. equity indices.
A lot of discussion about their tapping out what's the new, new thing and U.S. equities, whereas I think the low rates and the low inflation globally
and the easing of trade talks will do very well for emerging economies, both in economic terms and in asset market terms.
GIOKOS: Yes. Okay. So I get there are going to be risks. And even the IMF has said that the global trade war has the potential of wiping off
billions of the global economy, but the point is, you're going to see a recalibration and you've got Central Banks ready to pounce.
In fact, we are still very much sitting in an accommodative monetary policy scenario. So how do you weigh up the pros and the cons here?
ENGLANDER: Well, you look at what's priced in and you look at which asset prices and asset markets have been weighed on most heavily by risk
aversion, by fears of disaster. I think it's pretty clear U.S. equities have done very well through this.
But it's also clear that the main victim of the concern about the trade war was emerging markets. And I think a lot of those concerns are dissipating
plus low inflation not just in the U.S., but globally means that Central Banks are in no hurry to, you know, reverse the accommodation.
GIOKOS: Okay, so what about emerging market strategies going into next year? We know that they have been the victims of global trade wars or just
negative sentiment, and even though lots of money is chasing yield, a lot of people have been staying away from EMs because they are just worried
about the risk profile of a lot of these countries.
ENGLANDER: Well, then -- I think that that perception of risk is dissipating and the risk return that you've been alluding to between these
days and the S&P or do you do you go into emerging markets where historically there's been more upside potential, but also more risk?
This year, I think that the countries that have continued to have high rates that those rates are going to be coming down and capital will flow
into them.
GIOKOS: Okay, so let's talk about the elections here in the U.S. What are you guys pricing in right now putting into your economic models, a
Democratic win versus Trump staying in power?
ENGLANDER: Well, let me put it this way. As far as we can tell, there's no evidence that markets are pricing in anything but a Trump win. So the
risk is very skewed or you know, with respect to any kind of development that if we do get a Democrat, even the most centrist Democrat, they are
advocating unwinding all or part of the tax bill. Asset markets will respond.
[15:05:14]
ENGLANDER: For us, the question is what's the best way of edging a year in advance against that kind of risk? We actually like the end on that basis.
GIOKOS: So, I know in your notes, you said if a Democrat wins the presidency, equities rates and the U.S. dollar likely to fall initially,
because there would be an anticipation of economic weakness?
ENGLANDER: Indeed, and that's not only what I've written, we did a survey a couple of months ago of our client base and it is very much the view that
they have.
GIOKOS: All right, Steven, thank you very much for those insights and Happy New Year to you. All the best.
ENGLANDER: And to you, too. Always a pleasure.
GIOKOS: Take care.
ENGLANDER: Thank you.
GIOKOS: All right. So Tesla shares tumbled Monday after a Cowen analyst issued a dire forecast, he predicts Tesla will miss its sales targets in
the fourth quarter, and that shares could be cut in half next year. The stock is down around four percent right now.
At the same time, Tesla reached a major milestone delivering its first batch of the Model 3 made in China. The carmaker only broke ground on its
Shanghai factory less than a year ago. The first customers were 15 Tesla employees, one of which seized the moment with a marriage proposal to his
girlfriend.
He lifted the car's hood revealing flowers underneath before asking her to marry him, it looks like she said yes. How romantic.
All right, so we've got Ross Gerber, the CEO of Gerber Kawasaki Wealth and Investment Management joining us now. I'm not going to ask you about the
proposal. Let's talk about Tesla. Okay, so really good to have you on the show, Ross.
And look, I noticed the shares are not performing well today. And I just wonder if it's because we not seeing very high volumes in the market or
whether it's just people are not feeling excited about this new, you know, China production or whether it's the fact that Tesla has actually been
doing quite well on the share price front for quite some time.
ROSS GERBER, CEO, GERBER KAWASAKI WEALTH AND INVESTMENT MANAGEMENT: Yes, it's the third reason. I mean, Tesla's had an amazing run in the last six
months. And if you would ask me six months ago that I'd be looking at Tesla 420, I would have said, probably two percent chance. So we're super
excited. And it's very normal to take little profits here, especially with the selling on the news with the first deliveries in China and the market
is down anyway.
So we're looking at any opportunity for Tesla to drop to add to our position at this point.
GIOKOS: So you are buying today, is that what you're saying?
GERBER: Not today. No, I'm not buying today. I'm not doing anything today, actually, in the markets. We're going to wait until the New Year,
and then we're going to start again.
GIOKOS: Yes. So tell me about how significant China production is going to be for Tesla? And I know you've actually said that this is a really
good sign in terms of U.S.-China cooperation in a way.
GERBER: Oh, this is great. I mean, people just do not understand how big this is. Okay, so when China allowed Tesla to be the first U.S. factory to
be wholly owned in China, they were hopefully betting that this would be the model for cooperation in the future. And that's what's happening.
With the timing of Phase 1 being signed, hopefully this month and the first deliveries, this is the best advertising that China can have to show the
world that they can partner with a U.S. company, make a great product and serve the market well.
And so, you know, we think Tesla is going to just have an amazing experience in China and we're so excited.
GIOKOS: I mean, Ross, we know that if a company can tackle the Chinese markets and can tap into that consumer base, it is an incredible markets
for any company and in fact, I want to take a look at Chinese rival Neo. Those shares are up more than 50 percent. The company delivered more cars
in the third quarter than in the second, and total revenue rose nearly 25 percent compared to a year earlier.
So this is a really interesting company, it is up of 63 percent. Do you think Tesla is going to come up against local competitors? And how will it
perform in that space?
GERBER: Well, yes, I think China has the best competitors to Tesla than any car company in Europe by far. So really the competitor to Tesla is
Geely, which owns Volvo and their released this Polestar 2 car that is a really nice EV, it's a bit more expensive, but they're making very good
cars.
I think Neo has issues and I'm not an investor in Neo and not planning on being, but I think the EV market in China is really exciting. What China
is doing and saying, we're going to take the lead in the two biggest themes of the next decade. One is dealing with energy. So I think solar power
and such and EVs and the second is 5G.
So if China is successful with their EV development power initiatives and 5G, they know they'll be a leader in the global economy in the next decade.
[15:10:06]
GIOKOS: So Ross, when you are buying into Tesla, are you buying into Elon Musk and his vision? Are you buying into the company and what it will be
able to do in the next few decades? Is this a long term play for you?
GERBER: Yes, it's a long term play for us because we think the biggest risk to our society going forward is climate change, and it's just going to
become the focus of every government in the world to address this so that our society exists in 50 years in the way that it exists today.
So Tesla is the only player that does all of this. So part of it is Elon Musk and I've got to give Elon credit for getting this product out and
done. Nobody thought he could do it. The analysts have been so wrong about this company for so long and it's all because of the fortitude of
Elon to just keep pushing through despite enormous odds against him.
So this is an incredibly exciting company and I think one of the best opportunities over the next decade.
GIOKOS: Ross, great to have you on the show. Happy New Year to you. All the best. We will speak soon.
GERBER: Thank you.
GIOKOS: Thanks. All right, so Lufthansa subsidiary, Eurowings says more than 85 percent of its flights will take place despite a Germanwings cabin
crew strike.
More than 170 flights have been canceled across three days. That's Monday to Wednesday. The Workers Union wants higher pay and better benefits for
staff. But Eurowings has called the strike incomprehensible.
Let's get over to London now, "The Independent's" travel editor, Simon Calder is there for us. Simon great to have you on the show. Firstly,
what do you make of the talks breaking down over the weekend and of course the Union wanting more and the airline, you know, pushing back?
SIMON CALDER, TRAVEL EDITOR, THE INDEPENDENT: The airline is extraordinarily frustrated with the attitude of UFO which is the cabin crew
union. They've been saying that actually the Union is in some state of disarray itself.
There have been various questions about some of the senior staff at the Union over the past year. But what the cabin crew union has done not just
to this particular strike, which is the Germanwings unit of Eurowings, which of course is the bread budget brand of Lufthansa. They've also been
taking action. There's been a number of strikes with Lufthansa itself.
And this comes at the end of the year in which we've seen also, for example, pilots of British Airways going on strike, as well as many other
airlines and a threatened strike by pilots at Ryanair, the biggest budget airline in Europe.
And everything we know about strikes in the airline business is that the only beneficiaries are the other rival airlines.
GIOKOS: That's a really interesting point, Simon. I mean, at the end of the day, airlines are not as profitable as they were, say around 12 years
ago. It's tough times in many ways. Competition is very high. But at the same time, the unions are saying that they want a better environment for
staff. There has got to be some kind of compromise here. Are they going to find it?
CALDER: Well, ultimately they will because it is inevitable. Lufthansa and Eurowings are certainly not going out of business and like Air France
KLM and like IAG which owns British Airways and Iberia or Spain and a number of other smaller European airlines, they are making billions of
dollars collectively in profit.
The trouble is, of course, as anybody knows, the airline business and particularly working in it has become much, much tougher. So everyone from
ground staff to cabin crew to pilots is having to work harder and not necessarily get any extra pay as a result.
So yes, there will be a solution found, but every day that this goes on, it sends passengers, well, an awful lot of flights canceled had been -- fairly
short one. So it sends Eurowings passengers to the railways in Europe because that is a reasonable substitute and it will also send them to other
airlines particularly the low cost carriers such as EasyJet and Ryanair.
GIOKOS: All right, fantastic. Thank you very much for that insight, Simon. Great to have you on the show. All the best. All right, still to
come, the owner of "Time" magazine is not mincing his words taking aim at the social media superpower, Facebook, our interview with him up next.
And tempers flare as fires burn across Australia. In Sydney, the New Year's Eve fireworks will go ahead as planned despite outrage from
residents
(COMMERCIAL BREAK)
[15:17:21]
GIOKOS: Welcome back. Now the owner of "Time" magazine says the world is facing a crisis of trust, and he is pointing his finger squarely at
Facebook. We will hear from him in a moment.
But first, it's been a difficult year for the social media giant. Let's take a look at some of the heats it's faced in 2019.
(BEGIN VIDEOTAPE)
ZAIN ASHER, CNN INTERNATIONAL HOST: Facebook.
RICHARD QUEST, CNN INTERNATIONAL HOST, QUEST MEANS BUSINESS: Facebook.
JULIA CHATTERLEY, CNN INTERNATIONAL HOST: Facebook.
QUEST: It's time to break up big tech according to the U.S. presidential hopeful, Senator Elizabeth Warren. She wants to take a saw to Amazon,
Google and Facebook.
SEN. ELIZABETH WARREN (D-MA), PRESIDENTIAL CANDIDATE: Here's the problem. These giant tech companies have so much power.
CHATTERLEY: Facebook, one of the Facebook cofounders, Chris Hughes is calling for the social media giant to be broken up.
ANA CABRERA, CNN HOST: Obviously, Facebook feeling a lot of heat.
DONIE O'SULLIVAN, CNN BUSINESS REPORTER: Mark Zuckerberg has published an op-ed in "The Washington Post" saying, lawmakers we need help. We need
regulation in four main areas: Harmful content. I mean, this stuff we saw with the New Zealand attack where it was streamed live on Facebook.
Election integrity. We all know about that from 2016 and the Russian disinformation efforts and privacy and data.
So that's a whole range of issues, which really I think crystallized by the Cambridge Analytica scandal.
PAUL LA MONICA, CNN BUSINESS REPORTER: Facebook, their stock is down pretty significantly today as well as Amazon. Some would argue that they
are monopolies and some have even gone so far as to suggest they should be broken up.
CHATTERLEY: What about antitrust because we did see the record F.T.C. fine of $5 billion, a fresh F.T.C. investigation and of course the antitrust
issues.
The House Judiciary Committee, the Senate Judiciary Committee, the Department of Justice, and now State Attorney General's, too.
LA MONICA: Are consumers at risk because of some of the high profile problems Facebook has had with its data?
UNIDENTIFIED FEMALE: Lawmakers repeatedly grilling the 35-year-old billionaire about Facebook's handling of election interference and data
privacy.
CHATTERLEY: He said, quote, "In a democracy, I don't think it's right for private companies to censor politicians or the news."
REP. ALEXANDRIA OCASIO-CORTEZ (D-NY): So you won't take down lies or you will take down lies? I think it's just a pretty simple yes or no?
PAULA NEWTON, CNN INTERNATIONAL HOST: Facebook CEO Mark Zuckerberg is prepared to sue the Federal government and if a future Democratic president
tries to break up his company.
MARK ZUCKERBERG, CEO AND FOUNDER, FACEBOOK: It's not the case that if you broke up Facebook into a bunch of pieces that you suddenly wouldn't have
those issues. You would have those issues, it would just be much less equipped to deal with them.
(END VIDEO CLIP)
GIOKOS: Well, as we just mentioned, the owner of "Time" magazine has zeroed in on Facebook. Marc Benioff is calling Facebook the new cigarette
and says the social media giant needs to be regulated. He spoke to our Brian Stelter earlier. Take a listen.
[15:20:08]
(BEGIN VIDEOTAPE)
MARC BENIOFF, CEO, SALESFORCE.COM: Facebook is the new cigarette for our society. It's something that badly needs to be regulated. It's something
that is not good for us. It's something that the company is out for our kids, and they're certainly not exactly about truth and advertising even
they have said that.
That's why we're really in squarely a crisis of trust when the core vendor themselves cannot say that trust is our most important value. Look, we're
at a moment in time where each one of us at every company has to ask a question, what is our highest value? What is the most important thing to
us?
And you asked why we got involved with "Time" magazine because that value of trust, well, that's been associated with them from the very first day of
their founding.
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: I know Facebook has been on a lot of scrutiny and you and others have said it should be broken up. Do
you expect that to actually happen?
BENIOFF: I do. I expect a fundamental reconceptualization of what Facebook's role is in the world and what Facebook's role is in regards to
the word, not just trust, but truth.
And when you have an entity that large with that much potential impact, and not fundamentally doing good things to improve the state of the world,
well, then I think everyone is going to have it in its crosshairs.
And since I first kind of made that statement, which was in January 2018. At the time, I don't think people really understood what I was saying.
Today, I think it's crystal clear that our fundamental role and our relationship with Facebook needs to change.
STELTER: And what about your own media consumptions? Patterns? How do you consume news media these days?
BENIOFF: Well, I consume media in a lot of different ways. And of course, one of my favorite ways to consume media is "Time" Magazine.
The second -- the second part of consuming media for me is, you know, I'm an avid user, actually of one of the social networks, Twitter. I know that
you and I are both on there. And that's been important to me.
And then also I have subscriptions, physical and digital subscriptions. And I spend a lot of time with that every single day.
STELTER: You mentioned Twitter. If Facebook is cigarettes, is Twitter heroin? What is -- what is Twitter?
BENIOFF: Well, I think Twitter is actually quite a bit different. And I - - you know, they still -- there's no finish line when it comes to building trust. They've gone through their set of challenges.
But for sure, Facebook has been the biggest offender and as an example, you know, you can see both organizations made very different positions in
regards to political advertising.
STELTER: That's true. That's a good point. So let me wrap up with, a big prediction for the next 10 years. Where will we all be in 2030? No
pressure.
BENIOFF: Well, I think -- well, artificial intelligence is probably the biggest driver of change in media, and also in all of our lives. You can
see that. I'm sure you, like I have a voice based ambient computing, you know, we're talking to our Alexa or Google Home or our Apple Home Pod to
get some of our news, to get our entertainment, to get information.
Our software and the systems that are around us -- our phones, our cars, our homes -- they're paying attention to us. They're listening to us. And
we're talking back to them. And that is going to become a huge major change in terms of media over the next 10 years because as those systems
know more about you and understand what you want, if you opt into that, it is going to start to give you feedback, and you're going to start to see
things that look a lot more like a scene out of the "Minority Report" than out of a page of "Time" magazine 10 years ago.
(END VIDEOTAPE)
GIOKOS: Well as lawmakers call to break up Facebook, let's go to a merger.
Truist has become the sixth largest bank in the U.S. after a $28 billion combination between SunTrust and BB&T. Matt Egan sat down with the CEO of
Truist to talk about the name, as well as financial regulation.
(BEGIN VIDEOTAPE)
KELLY KING, CEO, TRUIST: I would be less critical today of Dodd-Frank than I might have been 10 years ago, because what we've seen is that it has
generally been applied reasonably well.
And there's some really good things that came out of Dodd-Frank. For example, the Consumer Financial Protection Bureau. At its core, it is a
really good agency. We needed that. We needed broader consumer regulation.
Coming out of Dodd Frank was a requirement that the banks do more robust capital planning. Their so-called CCAR Process has turned out to be a
really healthy thing.
And so are there some things that we would like to change? Have there been a few things changed? Sure. But overall, you know, I would say that as a
long term banker, I'm comfortable with the level of regulation we have. I don't particularly think we need a lot more.
[15:25:08]
KING: Because if you over regulate the banks, then you stymie the economy.
MATT EGAN, CNN BUSINESS SENIOR WRITER: Elizabeth Warren has pointed out that the Federal Reserve has not declined any of the 3,800 or so bank
merger applications that it's received between 2006 and 2017. Isn't that a little alarming?
KING: The process that the regulators go through is very thorough. And what does happen oftentimes, is that as companies contemplate merging, and
then they discover more about what's required to be the new institution, they realize they don't have the capacity to perform according to the
regulatory requirements, and so they withdraw their application because they know they will not be approved.
And so to say that they don't approve -- reject any is a bit overstating the case. There are in fact lots and lots of lots of mergers that are
proposed that get withdrawn, which is effectively or de facto, a rejection.
EGAN: Can you tell me a little bit about how you came up with the Truist name?
KING: We want a name that doesn't carry baggage. We really wanted a name that we could build on what the future looks like for Truist and that's
what we got.
So the word Truist was a made up word and actually, when we did a lot of scientific research, we got exactly what we wanted, which was 91 percent of
the people said, I'm just kind of neutral to that word. Perfect.
Because what we want to be able to do is build on Truist now to be what we stand for.
EGAN: But there's also been some pushback to the Truist name. There was an informal Twitter poll by American Banker that found 68 percent of users
hated the name. Have you had any second thoughts?
KING: No. Because you know that's natural. People tend to think about words and names that they've always liked. But they don't think about
words that were created in the last 20 to 30 years. Take Nike, Verizon, et cetera et cetera things that we love now that are household words and are
all the same kind of scenario.
(END VIDEOTAPE)
GIOKOS: Australian officials are warning it's too late to leave as fires as approach towns in the State of Victoria. We will have a report from the
ground and an update from the World Weather Center, up next. Don't go anywhere.
(COMMERCIAL BREAK)
[15:30:00]
GIOKOS: Hello, I'm Eleni Giokos, there's more QUEST MEANS BUSINESS in a moment. When authorities in some parts of Australia warn it's too late for
residents to leave as fires rage. And a food fight. A French court is set to rule on whether the Michelin Guide must reveal why it stripped a chef of
his third Michelin star. Before that, the headlines this hour.
Syria has joined Iraq in denouncing U.S. airstrikes against an Iran-backed militia group. A report in Syria's state news agency says the strikes were
an act of aggression against Iraq and its people. The U.S. says the strikes in Iraq and Syria were a defensive measure after a series of rocket
attacks, including one that killed a U.S. contractor on Friday.
Somalia says it conducted several airstrikes in coordination with U.S. military against Al-Shabaab. The group has claimed responsibility for a
car bombing in Mogadishu on Saturday. That left at least 85 people dead and dozens wounded. Officials say Sunday's retaliatory strikes killed four
members of the terror group, including a senior operative.
A British woman accused of making a false gang rape claim in Cyprus has been found guilty of public mischief. She could face up to a year in jail.
She had accused 12 Israeli men of raping her, but recounted days later. Her lawyer says she was coerced into doing so and they will appeal.
The suspect in the stabbing attack at a Hanukkah celebration in New York has now been detained on federal hate crimes charges. Grafton Thomas had
already pleaded not guilty to charges of attempted murder as well as burglary. His lawyer told the court that Thomas was taking medication and
has issues with bipolar and schizophrenia.
Chinese state media says the scientist who helped produce the world's first gene-edited babies has been sentenced to three years in jail. The twin
girls were born last year with modified DNA to make them resistant to HIV. Many other scientists condemned He Jiankui's work as monstrous as well as
unethical.
All right, so, more than a 100 fires are burning across Australia despite a prolonged drought, a total ban on fires and city already sharded in smoke.
Authorities say they will move ahead with Sydney's annual new year's eve fireworks. CNN's Rosemary Church has more on the story. Take a look.
(BEGIN VIDEOTAPE)
ROSEMARY CHURCH, CNN CORRESPONDENT (voice-over): As the new year approaches, Australian authorities have a clear message for anyone in
eastern Victoria.
UNIDENTIFIED MALE: If you're holidaying in that part of the state, it's time that you left.
CHURCH: Tens of thousands of residents and vacationers in southeastern Australia are being told to evacuate as strong winds and soaring
temperatures fuel massive bush fires. Across the country, extreme warnings in effect as firefighters battle dozens of blazes. The worst blaze near
Sydney, where fireworks are set to be lit on new year's eve, despite a total fire ban there.
Officials say the world-famous display will ring in 2020.
SHANE FITZSIMMONS, RURAL FIRE SERVICE, NEW SOUTH WALES: Obviously, well, this is not a -- this is not a new thing, new year's eve and other events
coincide with bad fire weather and total fire bans. But what we will be doing is working with local fire and rescue, the authorities, and just
making sure that any perceived risk based on the conditions are ameliorated appropriately to ensure they can go ahead safely.
CHURCH: Despite assurances from officials, calls grow louder to cancel the fireworks. More than a quarter million people signed a petition to scrap
the event, asking that millions of dollars usually spent on the display be redistributed to efforts like firefighting and animal care instead. But
organizers say canceling would only hurt local businesses.
[15:35:00]
TANYA GOLDBERG, SYDNEY CITY COUNCIL EVENTS: Preparations for these celebrations began 15 months ago, which means that most of the budget
largely used for crowd safety and cleansing measures has already been spent. So, canceling would have little practical benefit for devastated
communities.
CHURCH: In some of those devastated communities, homes and businesses are left in ruins. Since September, the prolonged fires have left little
respite for those fighting the destructive flames, and they're often volunteers.
SCOTT MORRISON, PRIME MINISTER, AUSTRALIA: Payments for income lost --
CHURCH: The Prime Minister says volunteers will now be compensated for their efforts in the worst-hit state of New South Wales.
STEWART TEMESVARY, VOLUNTEER FIREFIGHTER: Fifteen, 16-hour shifts in a row, you're exhausted at the end of that, and you might have one-day break
and then they want you to go again. It's tough. It's tough. The payment is just a recognition of what we're doing. It doesn't compensate us for
what we're losing, but it's recognition.
CHURCH: Some volunteers saying they appreciate the acknowledgement after fighting weeks of raging fires that show few signs of stopping. Rosemary
Church, CNN.
(END VIDEOTAPE)
GIOKOS: Tom Sater is at the World Weather Center for us. Tom, you and I have been covering these fires for the past week, especially over the
Christmas holidays.
TOM SATER, METEOROLOGIST: Right --
GIOKOS: And there was a little bit of reprieve when you had a bit of moisture --
SATER: Yes --
GIOKOS: Coming through, but it's just these heat waves and the wind that is relentless. What are you seeing right now?
SATER: Yesterday, Eleni, was a bad day. It only takes one day of --
GIOKOS: Yes --
SATER: Erratic winds, that humidity drops into the single digits and everything goes haywire. This home was destroyed, but notice the one
back behind it, firefighters were able to save. I mean, they have saved well over 7,000 homes, many more structures and out-buildings. Something's
wrong, it's not just a fire crisis. Take a look at this, temperature anomalies.
Look at this, climate crisis, Australia, compare you to the rest of the world.
GIOKOS: Wow --
SATER: Something is not right here, and it's not going to end any time soon. Yes, it's Summer, we expect things to be dry, but we've got such a
depletion in soil moisture, we do not have the rains, the monsoon rains at the top end, so they're looking at fires, but we did have a front-move
through.
Notice the color of green, that is a cool change. Fires across Australia, again, we shouldn't have this, this time of year, so much up to the north.
Darwin's now reporting their warmest year on record. We have records broken everywhere. In fact, yesterday every state topped at 40 degrees,
even Hobart. In fact, look at the numbers from yesterday, Port Augusta, 46, the average is 31.
That's just north of Adelaide, Hobart broke a December record at 41. Since 1882, Hobart's topped 40 degrees only nine times. Let that sink in.
Adelaide, 41, that's after 40 yesterday and the day before that, 40 degrees, even Cambra. This was yesterday's fire map for south Australia.
This is a critical fire threat.
That's the worst it gets, and then you head in towards Victoria, where it was severe, and that's where we saw this, pyro-cumulus, where the heat from
these fires is so intense, develops like a thunderstorm, not producing rain, but those towering thunder heads with some lightning. And that's the
last thing you want, is more lightning.
Firefighters had their hands full east of Melbourne, again, where of course tens of thousands were evacuated. These fires were encroaching on those
homes. Yesterday, Adelaide before 10:00 a.m. was at 35 degrees, so this is nice to see 17. Now, yes, we still have some heat, but now our focus is
back into areas of Victoria where we're getting some rain on radar.
Got a little bit in Adelaide Hills where a week and a half ago, we lost over 100 homes, and the wine industry getting hit hard. They believe, if
they're assessing it right, they may have lost a third of their vines. But we want to see returns. Now, everything is not good news. We were down to
72 active fires, and we're back up to 115 with at least 49 that are uncontained.
Here's the smoke in Sydney, offshore and well inland to the Blue Mountains. Some of the biggest fires are in northwest of Sydney and to the southwest.
When you look at the air quality, this is like New Delhi in the Winter. You want to see areas of green and yellow. That's decent. We can handle
that.
And there's a little bit here. Anything above 150 is considered unhealthy, and that's Cambra. But look at this, 364, these are some fires that are
burning, 999, it doesn't get any higher than that. Now, off to the fire threat now for New South Wales. Most of the activity is on the south coast
now, and where we have this extreme. It's not critical, but that's bad enough because the winds are going to be blowing here.
Sydney is looking at a high of 37, Cambra as well, but these low 20s, that's great news for south Australia, Adelaide over towards Melbourne.
The front will continue to move through, we might have a chance of rain. The winds are going to continue to kind of come in off the shoreline, so
hopefully, that smoke will disperse. Yes, the fireworks going on.
They're going to be ready for that. It will add a little more smoke to the atmosphere. But again, 37 today, we're going to watch Sydney for Friday
and Saturday. Well, not just the winds pick up again, but the heat as well. Firefighters are doing an unbelievable job working these long hours.
[15:40:00]
In fact, it's been well over two months now --
GIOKOS: Yes --
SATER: That these fires have been burning across the area --
GIOKOS: Yes, stopping this kind of fire is -- just sounds almost impossible with the heat and --
SATER: Yes --
GIOKOS: The wind. And of course, we wish them all the best. Tom, thank you very much --
SATER: Yes --
GIOKOS: For that update, appreciate it, and happy holidays and happy new year to you.
SATER: You too --
GIOKOS: See you, soon. All right, the outgoing governor of the Bank of England issuing a stock warning for corporate assets. He says companies
and investors need to step up planning for climate change, or else.
(COMMERCIAL BREAK)
GIOKOS: Welcome back. You're watching QUEST MEANS BUSINESS. Now, the Bank of England's outgoing governor says finance firms must act faster to
cut investment into fossil fuels. In a "BBC" radio interview, Mark Carney said slow progress could lead to sharp temperature increases. The results,
he warns, could make certain financial assets worthless.
There is one fossil fuel, however, that's helping the energy transition -- natural gas. It may be key to reaching net zero emissions. John Defterios
has more in this edition of "THE GLOBAL ENERGY CHALLENGE". Take a look.
(BEGIN VIDEOTAPE)
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR (voice-over): Here on the edge of the Norio(ph) Sea, the energy tides are changing. Oil and gas rigs are
being decommissioned, and renewable assets are populating the energy landscape.
(on camera): But as the U.K. gears up for net zero emissions by 2050, there's also a realization that renewable production will not meet the
needs of power demand, and that's why there's a role for natural gas in the energy mix.
(voice-over): Around a third of the U.K.'s electricity generation mix currently comes from gas, more than any other source. In the United
States, it's even higher. By 2025, the International Energy Agency predicts the U.S. will be producing more than 1 trillion cubic meters of
natural gas a year, almost double its production back in 2000, and it's continuing to rise.
(on camera): What role is a natural gas playing, whether from the offshore fields of Scotland or elsewhere in the aims of the Paris Climate Agreement?
(voice-over): It is the cleanest fossil fuel with 40 percent less CO2 emissions than coal, and 20 percent less than oil per unit of energy
output.
[15:45:00]
MASSIMO DI ODOARDO, VICE PRESIDENT, GLOBAL GAS & LNG, WOOD MACKENZIE: Just over the last eight years, the switching that we've seen between gas --
between coal and gas globally has accounted for about 500 million tons of reduction in CO2. And this is about 4 percent of global CO2 emission in
the power sector.
DEFTERIOS: But it is a hydrocarbon, and by 2050, countries like the U.K. and Japan plan to reduce its presence.
(on camera): As natural gas begins its steady decline in this part of the world, for countries like China and India, there is recognition that
natural gas can help cut emissions, vis-a-vis coal.
DI ODOARDO: Combined, India and China account for about two-thirds of all coal consumption globally. This means that if those countries can move
part of this coal consumption into gas, and certainly other, you know, technology with the impact on CO2 reduction could be tremendous, and that's
really what the policy needs to focus.
We think that actually China could be on track to achieve that 15 percent share of gas in the energy mix that it wants to achieve by 2030. On the
other side, India has been lagging behind quite substantially.
DEFTERIOS: It may not be a permanent solution, but clearly, natural gas has a role in the energy transition. John Defterios, CNN, Aberdeen.
(END VIDEOTAPE)
GIOKOS: And you'll see much more in a new CNN documentary. John Defterios takes us around the U.S. to see how the shale, oil, and gas boom has
revolutionized the nation's energy policy and transformed the global landscape. It's part of our "GLOBAL ENERGY" series, which examines how we
can transition to cleaner energy while also satisfying our demand for more power.
"THE GLOBAL ENERGY CHALLENGE" airs Tuesday, 6:30 a.m. in London, 2:30 p.m. in Hong Kong. All right, so, a celebrated French chef has said he no
longer wants his Michelin Stars. The dispute began over a souffle that allegedly tasted like Cheddar cheese. We'll tell you what the issue is
right after this.
(COMMERCIAL BREAK)
GIOKOS: Welcome back to QUEST MEANS BUSINESS. Now, we know souffles are very important things, and this chocolate souffle, I hear, does not taste
like cheese. But a souffle that allegedly tastes of Cheddar has caused a dispute between a celebrated chef and the Michelin Guide. French chef Marc
Veyrat lost one of his three stars at his restaurant, Maison de Bois, and now he's taking the Michelin Guide to court.
[15:50:00]
The ruling is expected on Tuesday, while you watch Saskya Vandoome report, I'm going to dig in.
(BEGIN VIDEOTAPE)
SASKYA VANDOOME, CNN CORRESPONDENT (on camera): In France, food is given a special place. In the best restaurants, it is given an almost ceremonial
reverence. And for the top chefs, the ultimate measure of their success is the Michelin star. But what if far from being something to wish for, the
Michelin star was more of a curse?
(voice-over): Marc Veyrat, one of France's most famous chefs has earned nine stars in all. But in January, his Maison de Bois restaurant in the
alps lost its third star over a souffle that a critic said tasted of Cheddar, an affront that Mr. Veyrat has not even begun to digest.
MARC VEYRAT, CHEF: (SPEAKING IN FOREIGN LANGUAGE)
VANDOOME: Now, the 69-year-old is taking the Michelin guide to court. He says he no longer wants its stars and wants the Guide to clarify the
reasons behind its decision. But it turns out, it's not that simple. While Michelin says Veyrat's talent is not in dispute, it insists its first
duty is to inform the consumer.
GWENDAL POULLENNEC, INTERNATIONAL DIRECTOR, THE MICHELIN GUIDE: The food, especially in France, is about passion, it's about emotion. Chefs are real
artists, so they're quite proud, sometimes excessive, fragile. And I think in that case, it's saying, OK, I deserve three stars because I am who I am.
We have to avoid any kind of -- let's say emotional blackmail.
VANDOOME: It isn't the first time that the pressure placed on chefs by the star system has caused controversy. The 2003 suicide of the three-star
chef Bernard Loiseau was linked to a system of intense gourmet critique. Several chefs have even asked for their stars to be removed, citing the
psychological as well as financial pressure of maintaining their rating.
VEYRAT: (SPEAKING IN FOREIGN LANGUAGE)
VANDOOME: Veyrat hopes the case will force the Guide to be more transparent about how it awards stars, and more importantly, why it takes
them away. Saskya Vandoome, CNN, Paris.
(END VIDEOTAPE)
GIOKOS: OK, my souffle definitely not Michelin star quality, but I'm sure many of you feel like you over ate this holiday season, and I'm sure many
of you are planning to sweat it out as part of your new year's resolutions, of course. And right now, CrossFit is one of the biggest fitness trains in
the world. CNN's Anna Stewart has more on why people are using this sport to work up a sweat.
(BEGIN VIDEOTAPE)
ANNA STEWART, CNN CORRESPONDENT (voice-over): It was in Santa Cruz, California when CrossFit first popped up on the scene almost two decades
ago. Since then, it's spread, now operating in more than 15,000 gyms around the world. And setting up one of those gyms is relatively easy.
PATRICK VELLNER, PROFESSIONAL CROSSFIT ATHLETE: The accessibility is one of the major things about Crossfit that makes it so big. Is that it
doesn't take much, it just takes somebody with the will and the want to do it, and you can -- you can set up a gym in a warehouse, and if you've got
the interest in the public around, and you can captivate the right number of people, then off you go.
STEWART: The gyms are independently owned and operated, and that's the appeal.
NOOR GREENE, HEAD OF SANCTIONALS, CROSSFIT INC.: We require a license agreement, affiliate fee, a level one certificate course. Beyond that, it
is their affiliate to run, they open when they want to open, they close when they want to close, they charge the clients whatever they want.
STEWART: CrossFit gyms or Boxes as they're called, due to their simple structure, has seen a meteoric international rise.
VELLNER: It's trying to spread roots deeper and farther, and that's sort of the best way to do it, is to allow large communities in other parts of
the world to take that mantle and then spread it how they see fit.
UNIDENTIFIED MALE: Two, one, go!
STEWART: There are millions of CrossFit enthusiasts around the world. While most are in it for the workout, some have made it a career. Athletes
can make money from sponsorships and by competing in CrossFit games and sanctionals. The Dubai CrossFit Championship awarded more prize money
than any other sanctional last year, around $700,000. Athletes aren't the only ones making money, big brands are also cashing in.
[15:55:00]
BRENT FIKOWSKI, PROFESSIONAL CROSSFIT ATHLETE: I think what's really interesting about CrossFit from a business perspective, and that has made
it appealing for brands is the fan base is very active. So, you go to a football game, and I think the percentage of people that have played
organized football at a football game is extremely low.
You go to a CrossFit competition, it's like 90 percent, 95 percent of those people are actively pursuing recreationally that same stuff that the pros
are doing.
UNIDENTIFIED FEMALE: Go!
STEWART: CrossFit's long-running success is proving to be more than a fad.
FIKOWSKI: I think every year people doubt it, and every year it's still here. I know when I first started, people said two years ago was the sweet
spot. And I think that just keeps moving. So, I think it continues to grow, and I mean, I'll be here.
STEWART: It seems for now that CrossFit is on pace to keep racking up the dollars. Anna Stewart for CNN.
(END VIDEOTAPE)
GIOKOS: So, after you get the body you want, and if your new year's resolution is also to find love, we have a cautionary tale. An a-list
celebrity took a chance with a dating app, and it didn't go so well. The dating app Bumble blocked Sharon Stone's account, yes, Sharon Stone after
users reported her account as fake, but it actually wasn't fake.
The 61-year-old "Basic Instincts" actress posted on Twitter, "I went on the Bumble dating site and they closed my account. Some users reported that it
couldn't possibly be me! Hey, Bumble, it's being me exclusionary? Don't shut me out of the hive."
Eventually, Bumble restored her account, so the company says they reached out to Stone with an apology and says, they, quote, "hope it will be easier
to find her honey."
Well, there are just moments left to trade on Wall Street, we'll have the final numbers and the closing bell right after this -- and we're down six-
tens of a percent on the Dow.
(COMMERCIAL BREAK)
GIOKOS: With just moments left to trade on Wall Street. The Dow is down, as you can see, 200 points, seven-tens of 1 percent in the red -- remember,
trading volume is thin right now before the new year holiday. It's the penultimate day of trade as well. Let's take a look at the border market,
the S&P 500 and the Nasdaq formed more -- fell more than half a percent as well, as you can see across the board.
But don't forget, it's been a great year for markets. The S&P 500 is on track for its best annual gain since 1997, and that's the sound of the
close of trade.
(BELL RINGING)
That's it for QUEST MEANS BUSINESS, I'm Eleni Giokos in New York, happy new year to you, "THE LEAD" with Jake Tapper starts right now.
END
