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Quest Means Business
Markets Turn Negative As Coronavirus Spreads; Coronavirus Hits Autos, Airlines, Travel And Food And Beverage Industries; White House Tries To Calm Investors Amid Outbreak; Death Toll Rises As Iran Deals With Coronavirus Outbreak; Egypt Holds Military Funeral For Hosni Mubarak; Bob Iger Steps Down As Disney CEO. Aired 3-4p ET
Aired February 26, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:21]
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: An hour to the closing bell, and we really need to understand what's been going on here. Strong gains,
bouncing gains of nearly 500 points evaporated in the afternoon to the point where we're nearly at the lows of the day of 133 points. What changed
the sentiment? What was the decision?
Well, those are other markets, and we need to understand these particular reasons. It was a comeback that simply couldn't hold. The coronavirus fest
has now pushed stocks down and the outbreak spreads to more European countries and into Latin America, just about every continent except
Antarctica.
The situation is under control, says the President. He is due to speak to the American people tonight as he soothes on hopes to avoid market panic.
And Japan struggling to contain the virus. We will hear from a senior Olympic Committee member who tells us the Tokyo Games could be in jeopardy.
Live tonight from the world's financial capital, New York City on Wednesday. It's February 26th. I'm Richard Quest, and of course, I mean
business.
Good evening. Tonight, the coronavirus comeback has lost momentum. When the day started, the Dow looked as if there was a strong recovery underway. It
had fallen nearly 1,900 points over the last two sessions Monday and Tuesday.
Now on Wednesday, we opened up and we went up nearly 500, and now it's down to 140, a 600-700 point range. Markets around the world are lower as well.
Brazil's POVESPA is off six percent after the first virus cases have been found in Sao Paolo. Look across the board, the Xetra DAX is down. The
Nikkei is down. Hong Kong is down. Australia is off 2.3 percent.
Bruce Kasman is the Chief Economist and Head of Economic Research at JPMorgan. Good to see you, Bruce, as always.
It is very difficult for markets to hold their nerve when there is simply so much uncertainty.
BRUCE KASMAN, CHIEF ECONOMIST AND HEAD OF ECONOMIC RESEARCH, JPMORGAN: There's no doubt about that. And I think we're seeing two things here.
First, as you mentioned, we're seeing the virus spread. The second thing we're seeing is that the efforts taken in China to try to contain it are
very costly.
We've been in a process of adjusting our GDP forecasts. We now think the global economy is going to stall in the first quarter of 2020. That's an
outcome we have never seen in periods outside recession.
QUEST: Now, let's talk more about that. You're not looking for a global recession, though, are you?
KASMAN: No, we do think that containment efforts in China have been successful in slowing the spread. We think they will be elsewhere.
So while the damage is going to be quite significant, we think it's also going to be temporary and we do believe by the time we're sitting here in
the middle of the year, the global economy will be making a pretty decent recovery from this hit.
QUEST: And what about X China, as Italy deals with this and other countries put in place? It strikes me that we're all just waiting to see whether
Italy is sui generis, or we're going to get repeats?
KASMAN: Well, I think it's likely we're going to see repeats. The question is whether the containment efforts in Italy limit the spread and I think
it's likely that that will be the case.
But there's no doubt that the damage done by containment, the fear of the spreads is going to be significant in terms of economic costs.
QUEST: But in terms of your GDP forecasts, are you looking at, if you like, basically from what we've seen from China, and therefore extrapolating out?
KASMAN: Not quite extrapolating out, but significant damage. We're looking for the Chinese economy on a sequential basis to fall about a four percent
annualized pace in the first quarter. That's an economy that's usually growing about six.
We're looking for the Italian economy to be contracting two percent. We're looking for the Euro as a whole to be roughly stagnant. And we're still
working through estimates for the rest of the world on this.
QUEST: The Central Banks, I mean, there's a strong argument for saying this is exactly the warning of position not to get into that everybody said.
You've got monetary policy so loose that there's nowhere to go particularly in Europe if you need to prime the pump?
[15:05:10]
KASMAN: Well, I think that's true. Policy is constrained. But I think the important positive here is that liquidity is flowing and credit channels
are being supported by negative rates in Europe and by low rates in the United States, and I think that is really a key defense that's going to
work here.
If we're going to get support here to help immediately. I think it's got to be fiscal policy. We're seeing it in Asia now. It's not clear whether we're
going to see it in Europe.
QUEST: Bruce, finally, the question of liquidity. Anyone who has seen a crisis, a financial crisis knows that you tend to find it starts with
liquidity issues. Is there any evidence of liquidity? Banks not being able to find funding or money markets moving smoothly?
KASMAN: Well, it's very early still, but so far so good on that front. I think the Chinese government is doing a lot to keep things flowing there
and that's the key call we're making, the damage is going to be significant, but Central Banks are going to be able to provide the
resiliency to keep liquidity flowing.
QUEST: Bruce, as always, sir, I much appreciate your time in these difficult days. Thank you for joining us.
Now, we've heard the corporate world is also issuing statements and warnings. Wherever we look, the crisis seems to be getting worse.
Now we're seeing the tangible effects. The tentacles of the virus starting to move throughout the global economy, and there are a couple of key
sectors that we want to look at.
Autos, airlines, and obviously travel and food and beverage. Let's start with the food and beverage industry.
For instance, Diageo which makes Johnnie Walker, Smirnoff, Guinness and the like. Now, we've got bars closed in China and the company is saying
already, $420 million dollar hit this year. So drinks are hit. Look at an ordinary every day, large giant food company like Danone, and you get a
very good idea of exactly how this moves throughout the economy.
Now Danone, of course has Evian, Alpro yogurt amongst many other products. But the Chinese factory is closed and it is shaving $109 million of Q1
sales.
So two relatively seemingly -- you wonder why they would be affected, but that gives you the answer.
Same again, if we look at automobiles. Let's do automobiles first. The automobiles industry. Moody's says global car sales will slump two and a
half percent in 2020.
Now, Jaguar Land Rover says there will be no sales in China. Whilst Nissan, which has closed its plant already says that plant will now remain closed
until March the 11th.
Food, beverage, automobiles hardly surprising then. We turn finally to the one that arguably is the most obvious -- airlines.
Now, the airlines and aviation industry, KLM and Lufthansa today, both airlines coming out with announcements making major budget cuts.
In one case, Lufthansa for example has a freezing hire and asking staff to take unpaid leave. Lufthansa even has 13 aircraft on the ground.
Clare Sebastian is here with me. We've talked about this, and we're not surprised to see it. But the range of companies warning is remarkable. It's
not just Apple and airlines.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Its companies big and small across all sectors, Richard, that's consumer facing. It's travel, it is
those who have supply chains impacted.
I think with the airlines, what was particularly stark is this is no longer about just wait and see. They are having to take really serious action, the
warnings and the sort of cost cutting that's coming from them was really stark.
KLM Air France -- KLM saying this would affect their revenue very significantly, even with the measures they are putting in place, which is
basically taking out all non-essential spending.
CHATTERLEY: Right. But this is not just because they're not flying to China. The physical effects of not flying to China or not flying to Hong
Kong, is it? This is because across the board, people are cutting meetings, cancellations. We saw it most visibly with the Mobile World Congress.
SEBASTIAN: Absolutely. I think, if we look back at United Airlines as well who formally withdrew their guidance last week, they said that not only has
demand to China fallen to practically zero, but demand across Asia has fallen by about 75 percent, Richard.
We wanted to bring up sort of a couple of stocks that are particularly vulnerable to this that we can track throughout this. You can see United is
one of them. They're down, you know, to the best part of six percent today.
But all across the board, Qorvo is a chipmaker, an Apple supplier. They have about 75 percent of their revenues in China, also some manufacturing
there. Companies that depend on China, Nike, for example, for about 20 percent of their sales also affected.
Now, this is a market decline across the board today. So all of these companies are affected, but I think it's worth noting that, you know, it is
across all sectors. It is in all different areas.
[15:10:11]
QUEST: But what is it going to take to recover? I mean, the obvious, of course, is the people stop getting the virus or stop getting sick. And
these stocks are very much at the whim of a potential of a disaster.
SEBASTIAN: It's going to take factories to get back up and running in China. We know that the Chinese government is putting in some emergency
measures there. It is relying on charter flights, high speed trains to bring back migrant workers. It's going to take the money to come back. That
might take a little longer, but of course, confidence is being hit here.
People are very worried about, you know how fast this virus is spreading and how difficult it will be to get it contained.
And the other factor of this, Richard, it is not just the virus itself, it's the containment measures. Your previous guest was talking about that
they are now so stringent, the travel restrictions, the quarantines that that will affect economic activity in itself.
I think this is why you see companies withdrawing guidance, saying it's too early to say. Lufthansa said today, we don't know what the impact will be,
it is because there's so little clarity at the moment.
QUEST: Thank you. Now President Trump is due to speak about the virus in a matter of hours. The White House has been downplaying the outbreak to calm
fears on Wall Street.
Speaking today, the White House Economic adviser, Larry Kudlow claimed the economic impact would be limited.
(BEGIN VIDEO CLIP)
LARRY KUDLOW, WHITE HOUSE ECONOMIC ADVISER: I can't give much near term advice. Look, everybody agrees in the private sector, this is going to clip
something off our first quarter GDP. How much? I don't know.
You know, it's funny, again, we'll know more in the next two or three weeks and the quarter is not quite two thirds completed, but frankly, the
incoming data are pretty good. The incoming data, in fact let me amend that, it was surprisingly good.
(END VIDEO CLIP)
QUEST: Kevin Hassett, he is the former Chairman for the White House Council of Economic Advisers. He joins me now from Washington.
Kevin, always good to see you, sir. Thank you. The danger here is, I mean, I saw the President's comments talking about the media panicking markets
and the like, but by the same token, a Pollyanna view, through rose colored spectacles from the administration won't help either.
KEVIN HASSETT, FORMER CHAIRMAN FOR THE WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS: Right. But I think that what you're getting out of Larry, and
also the President is sort of the median expectation, which really is not much different from what we heard from your first guest from JPMorgan.
I actually am a little more pessimistic than him. I think the Chinese GDP could well drop at an annual rate in the first quarter by about 10 percent.
But if you look at normal correlations, what that means is that you lose a whole percent in the U.S. off the first quarter, and that probably takes
you down around one, one and a half, something like that.
And so what Larry's basically alluding to is, that if God-willing, and our thoughts are obviously with the people who are stricken by this, this goes
away relatively quickly because the warm weather as was the case with SARS starts to help people get ahead of the curve on this then that one percent
you lose in the first quarter, you'll get most of it back in the second quarter.
But, you know, I thought that Clare was right to emphasize that, you know, sentiment, and Richard, you've been covering this forever, sometimes
sentiment starts to go south, and then it just keeps on going.
And if there starts to be a little bit more news that this is going to last into the summer or something, then you really could be looking at a global
recession.
QUEST: And that, I mean, no one knows clearly because everybody thought China had a handle on it, but didn't. Italy is doing its best as the worst
case.
Here in the United States, the issue is not at the moment, actual cases of the virus, but supply chain worries, isn't it?
HASSETT: Well, I think that also, you know, there haven't been a lot of people tested in the U.S. and we're right at that moment, where, you know,
the uncertainty as you highlighted at the outset of the show is very, very high.
And I think that the President and the professionals that are going to brief us tonight it, I think at six o'clock East Coast time they are going
to inform us about, you know, the steps that are taken to make sure that that's all there is.
You know, I think that right now markets are worried as they were with SARS, that this is going to be a much bigger deal and much more widely
spread than the professionals think is the base case right now.
But if you go back and look at the SARS episode, and granted, there are a lot of other things going on in the economy at that time, and then run it
forward from when we sort of recognize it was there and compare it to the timeline for this, then equity markets would have about 10 percent more to
go down before -- if we follow the same sort of recovery path from SARS.
But I think the equity markets are so smart. Having seen that with SARS, they could look ahead and say, well, if I just held for three months
through that, then I came out ahead.
But it is the case that markets have headed down and they've headed down pretty much right on the path that they headed down for SARS.
QUEST: And obviously as you say, now, the interesting thing and it is a fascinating question, though, we will only be able to view in hindsight
whether or not they saw what happened with SARS and has responded accordingly or whether history has repeated itself, Kevin.
HASSETT: Yes, that's right. That's it.
QUEST: Good to see you.
HASSETT: Good to see you, too, Richard. Thank you for having me.
[15:15:08]
QUEST: Thank you. I appreciate you as always. Now, a call for calm in Europe, the coronavirus is cropping up across the continent.
E.U. officials are pleading with citizens not to panic. We're going to be in Rome after the break. Italy has turned into the European epicenter, if
you like, of the crisis.
(COMMERCIAL BREAK)
QUEST: -- from the European Union are calling for calm as coronavirus crops up in more E.U. countries. We've seen new cases in Italy, Spain and France
over the last few hours and in those cases, many times are the first time.
And more new cases reported outside of China than within on Wednesday.
Speaking in Rome, the Commissioner for Health and Food Safety, asked people not to give in to panic.
(BEGIN VIDEO CLIP)
STELLA KYRIAKIDES, E.U. COMMISSIONER FOR HEALTH AND FOOD SAFETY: This is a situation of concern, but we must not give in to panic.
We must also be vigilant when it comes to misinformation and disinformation as well as xenophobic statements, which are misleading citizens and putting
into question the works of public authorities.
(END VIDEO CLIP)
QUEST: Misinformation or disinformation. This is the real information. A new decree from the Italian government is suspending all public events in
Northern Italy to attempt to contain the spread.
Now, you'll see here, 20 plus cases -- 10 to 20, now 129. Italy is by far the epicenter, at the moment with growing upwards throughout the rest of
the continent.
From there, the next worse is, of course, Germany, the United Kingdom, which has a dozen, also Spain and France. And then the more minor number of
cases in Switzerland and Croatia, but it's even got up here, obviously to Sweden, Finland, and Russia. And that's the extraordinary part.
It's also gone as far as Brazil in South America, and they all -- all the - - or many, I should say, of these other cases, are linked back to Italy.
Barbie Nadeau is in Rome. So I've got my map here, and I see that they're all linked in some shape or form to Italy. What happened in Italy? And
what's now happening on the spread?
[15:20:06]
BARBIE NADEAU, CNN CONTRIBUTOR: Well, I mean, I think that really what happened and the Italian authorities have admitted it right away is that
they mishandled the first case, so-called patient one. They don't know patient zero is. They have no idea how it came to this country, or if
patient zero cured him or herself and is fine or still traveling around and spreading it.
But it's patient one who they mishandled and that's why we're seeing the clusters in the north of Italy and you're seeing someone that moved from
one of those clusters down to Sicily or to Brazil in this case, and they have the virus.
But what the government is doing right now and it's something I've never seen in Italy is this incredible transparency and this will to tell the
people what's going on to inform them and that's about countering the misinformation and trying to stem the panic which is difficult with just
solid information.
And that it does seem to be working to some extent. We're not seeing panic here in Rome, for example yet.
QUEST: Okay. So that seems to be working in Italy. But in terms of the spread by isolation, by quarantine, from patient one onwards, do they
believe they've nipped it in the bud against further infections?
NADEAU: No, they don't. And they've been very transparent about that, that that's why they have these locked down cities where you risk three months
in jail if you break the quarantine, and things like that.
The measures here are very draconian. You just can't believe this is happening in modern Italy. But they know that the virus is still spreading.
They have three cases in Sicily tied again to the cluster. And so that means someone got out of there. And that's one of the big concerns is they
want people to let the authorities know if they've been to one of these areas, to get checked if they show symptoms.
But so many of the cases here in Italy don't have symptoms, and we got kind of a breakdown of it today. A lot of people don't - they test positive, but
they don't actually show that they have it and that's the danger. How do you know you're passing something on if you don't know you're sick?
QUEST: Or you just feel like you've got a cold, after all, it is winter in the Northern Hemisphere. Good to see you, Barbie. Thank you.
Now, despite the coronavirus threat, preparations for the Tokyo Summer Olympics are continuing as planned. Other sporting events of course have
been canceled and scaled back because of the outbreak.
CNN's Matt Rivers report organizers are keeping a close eye on developments.
(BEGIN VIDEOTAPE)
MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT (voice over): Five months to go until Tokyo 2020 and rehearsals are in full swing, a practice torch run
outside Tokyo, though the flame hasn't arrived yet.
Some crowds cheer corporate sponsors.
RIVERS (on camera): This is the fun stuff. This is what organizers want to be practicing for, want to be preparing for, but given what's going on in
this part of the world, they're also preparing for something else.
RIVERS (voice over): Specifically the coronavirus outbreak. Dozens of cases have been reported in Japan as Japanese officials tried to stop its spread,
safe to say they're worried about crowds.
The new Emperor's birthday celebration canceled. March 1st Tokyo marathon called off for all, but elite runners. So the natural question, is the
Olympics next?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: There's no cause for any contingency plans of canceling the games. We're moving the games.
(END VIDEO CLIP)
RIVERS (voice over): Officials with the International Olympic Committee say they base that decision on guidance from the World Health Organization,
which has told them as of now, there's no reason to cancel.
RIVERS (on camera): I.O.C. officials have already set up a Virus Task Force and are working closely with Japanese health authorities. But for those
people who have prepared their entire lives for this summer, the athletes who will stay in this village behind me, any thought of the games possibly
being interrupted is tough to think about. So they're staying positive.
(BEGIN VIDEO CLIP)
TRELL KIMMONS, AMERICAN SPRINTER: It's a little bad now but I think knowing the Olympic Games is coming into the country that they have everything
under control.
FELISHA JOHNSON, AMERICAN SHOTPUTTER: Hopefully they'll have everything figured out and -- by then.
(END VIDEO CLIP)
RIVERS (voice-over): Here in Japan, ping-pong practice goes on unabated. The virus threat looms.
(BEGIN VIDEO CLIP)
YOSHIHITO MIYAZAKI, HEAD OF JAPAN'S TABLE TENNIS NATIONAL TEAM (through translator): I'm worried about whether Japan can actually host
international guests if this infection keeps spreading.
(END VIDEO CLIP)
RIVERS (voice over): But Japanese officials say that's currently their top priority.
It's important for us to have visitors feel safe and enjoy Japan while here, the Vice Health Minister says. So this is our big focus.
Japan wants the games to be safe and successful, but only so much is in their control. A lot is still unknown about the coronavirus. And who knows
what happens between now and the July kickoff.
(BEGIN VIDEO CLIP)
ERIC RUBIN, DEPARTMENT OF INFECTIOUS DISEASES, HARVARD UNIVERSITY: We don't know how far it's going to spread. And we don't know if it spreads how long
that will last. Could that put the Olympics at risk? Yes. I have tickets, though, and I'm not giving them up.
(END VIDEO CLIP)
RIVERS (voice over): Nobody wants a virus to ruin the games, the Olympic flame, after all, is designed to not go out. The hope that this rehearsal
turns into the real thing by the end of July.
Matt Rivers, CNN, Tokyo.
(END VIDEOTAPE)
[15:25:10]
QUEST: Dick Pound is with me, senior member of the I.O.C. and he joins me from Montreal, Canada. The mere fact, Dick, that we are talking about, you
know, having to make a decision and a deadline of how close or far that is speaks volumes as to the crisis that the games could be facing.
DICK POUND, FORMER VICE PRESIDENT, I.O.C. (via Skype): Well, we're not we're not there yet and that's sort of people are urging decisions to be
made long before we have enough information to know whether it's the right one or not.
I mean, at the moment, there's certainly an elephant in the room. But there's nothing to suggest that we won't be able to start on July 24th.
We're monitoring it and working with the World Health Organization and its related agencies, to just follow it and to get some handle on how serious
the virus is, how the -- what the impact of it is, whether it's stronger or the same as or weaker than the ordinary flu? I mean there are all kinds of
things that we need to know before thinking about changing the start of the game.
QUEST: Do you think it's alarmist to even be raising it? I mean, we are a good five months away, and if history is any judge of these, it will blow
itself out or dissipate. Is it alarmist to be raising questions now?
POUND: I think it's responsible to be thinking about the elephant in the room. There's no question about it. But it's alarmist to say that we
should, you know, the sky is falling and we should bail out of Tokyo.
I think you need an informed decision. And ultimately, if it starts to look like a postponement, or worse, we would need the best possible medical
public health advice we can get just to determine what, if anything should be done at the time when we know more about it. But we're learning
something every day.
QUEST: As for other sporting events much closer to home and much nearer on time, do you think really, you know, if you've got an event in the next
month or two, really, you don't have much hope of getting it done.
POUND: Yes, and I would say individuals sports events can be dealt quite simply. I mean, they can go to other places with a minimum of disruption
and a minimum of necessary infrastructure, but when you get 11,000 athletes and their supporting personnel and 28 sports, all of which have to be done
in a 17-day period, that's not something you move on a right angle turn very easily.
So it's not like, you know, the Olympics of, you know, the 1920s or something like that. This is a major international event.
QUEST: Thank you, sir. Always appreciate it. Thank you for joining me from Montreal.
Senator Bernie Sanders stood his ground in Tuesday's debate. It was a bitter, bad-tempered, aggressive, sometimes abusive debate. We'll talk
about it after the break.
(COMMERCIAL BREAK)
[15:30:00]
QUEST: Hello, I'm Richard Quest. A lot more QUEST MEANS BUSINESS in just a moment. We're going to look at how the Trump administration's been trying
to soothe the investors' fears over what's happening with the health scare. And its curtains for Disney's CEO Bob Iger. Look at how his successor could
shape the company's future. This is CNN. And on this network, the facts always come first.
Remember who have died from the virus outbreak in Iran, has climbed to 19. With more than 130 cases confirmed. Iran's president said authorities won't
quarantine any Iranian cities, including Qom, which was the epicenter of the virus outbreak. But the health minister now says Friday prayers will be
cancelled in affected cities. In Latin America, the first case of the virus has been seen.
A man in Brazil who's 61, tested positive, after a trip to Italy, this month. The health authorities are tracking the people with whom he has had
contact. Egypt had a military funeral in Cairo for the former President Hosni Mubarak. The country's observing three days of official mourning. The
current president, Abdel Fattah el-Sisi, attended Mubarak's funeral. He -- Mubarak, of course, ruled for nearly three decades until he was forced out
of office during the 2011 Arab Spring.
India's Prime Minister Narendra Modi, his appealing for calm after days of clashes over controversial citizenship law. At least 24 people have been
killed in rioting between supporters and opponents of the law. The act fast track citizens worship for non-Muslim asylum seekers from three neighboring
countries.
Look at the big board and you'll see how it's very likely that we'll end the session in just half an hour from now. Off the lows of the day, well
off the highs of the day, down 100 points also, but it's adding to the losses we've seen over the past two sessions. Nothing as bad as the 900 or
1.000. And the President is set out a press conference in a few hours to address the coronavirus.
In a tweet, he has accused the media of panicking. The markets insist the U.S. is in great shape in handling the disease. Meanwhile, the CDC is
warning the spread of the virus in the U.S. is inevitable. John Harwood is live in Washington. So, short of blaming the media, what else will the
President -- what's the -- what's the tone going to be tonight?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Whether other people besides the media he could blame, including Democrats or members of his own team.
But Richard, I think the tone is the crucial part, as you indicated a moment ago. I think the President is going to recalibrate his tone. He's
been talking optimistically. We've got this under control. Don't worry about the market drop. He was hoping for a bounce back in the markets,
yesterday, didn't get it.
The markets went down several hundred points. Thought he had one today. Markets were up several hundred points. Now that's been given back.
[15:35:07]
Investors are leaving stocks and pouring money into treasuries. We see that reflected in the declining bond yields. And so, I think what the
President's got to do is get closer to the science professionals, in his administration, who are saying realistically, this could hit us, we need to
prepare. It could have an effect on the economy, as well. There -- his former top economic advisor Kevin Hassett was saying today, the effect of
the Chinese economy itself could lead to a global recession, as he's running for reelection.
So, lots of concerns for the President. And I would expect that when he comes out at 6:30, with some other members of his administration, he's
going to reflect a little more realistic sense of the situation.
QUEST: But that's a tricky role for him to play. Because at the same time, on -- you know, on the opposite side of that coin, he needs to reflect, do
the more traditional presidential, you know, it will be all right, don't worry, we know what we're doing. It's under control.
HARWOOD: Well, I do think, Richard, the facts of the situation, help him make that case. Even the officials who are arguing for a more realistic
sense of what is ahead of us, are saying it's not that bad in the United States. We're going to get more cases. But the -- this is a less fatal
virus than experts initially thought.
So, it's not all gloom and doom, but it's just not all, as Larry Kudlow, my friend said yesterday, we've got it locked up tight, almost airtight. That
is not the situation and I think the Americans are going to look for some more realism from the President tonight.
QUEST: John, thank you. John Harwood at the White House. We'll have you tomorrow. Please make a note in your diary to discuss exactly what he said
and how he did it. Now, the Democratic presidential contenders trying to knock Bernie Sanders off his front runner pedestal in South Carolina. They
debated last night.
The Vermont senator faced a barrage of criticism from his rivals who cast him as a divisive candidate with unrealistic goals. And it's this weekend's
primary and Super Tuesday, three days later, which will, of course, dramatically reshape things.
Jeff Zeleny is live in Charleston, South Carolina. The town hall's, of course, tonight. Jeff, last night, I was jet-lagged from having just flown
back from the other side of the world. So, I snoozed off on the sofa, and I kept being awoken to shouting, screaming, arms throwing, and that was the
debate.
JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Certainly, no room for sleeping here in Charleston, Richard, I'll tell you. I mean, it was an
intense debate on the stage. Every incoming was happening for Bernie Sanders, you know, from every single direction there, in terms of criticism
about his past gun record, in terms of his criticism about how much his progressive policies actually will cost in terms of his electability.
So, every single person on that stage was making a different argument about Bernie Sanders. But he actually stood pretty tall through it all. I mean,
these aren't new arguments. The only thing that's new and different here, is the moment, is the time. And we are less than a week away from the
potential of Bernie Sanders, essentially walking away or running away with this nomination. So, that is what the candidates were trying to do is slow
his roll, if you will. We will see if it works.
Only the voters will be able to determine that here in South Carolina, it starts on Saturday. But then three days later on Tuesday, 14 states across
the country here, in the U.S., will be making their judgment on Bernie Sanders, think a couple things that may have stuck in terms of just getting
people to think about things are, you know, his view of Cuba, for example, sort of praising Fidel Castro. That does not necessarily sit well with some
people, certainly Florida Democrats, it doesn't.
But, Richard, the key thing here is what's going to be happening behind me tonight. Michael Bloomberg, he's never taken questions from voters. He is
never done that. This will be the first time he's doing that when he's with our Anderson Cooper here, this evening. So, that is going to determine how
big of a deal, Michael Bloomberg is going to be, going forward tonight here, in Charleston, Richard.
QUEST: All right. I see you're just pumping yourself in. Hopefully, we've solved that problem. And you can hear me and you hear yourself.
ZELENY: No problem.
QUEST: Thank you. But, quickly, why does --
ZELENY: Sure.
QUEST: I watched Mike Bloomberg last night. There is almost an air of I don't know why I'm having to go through this. Aren't I clearly the best
candidate and you should really just give it to me?
ZELENY: No question. I mean, look, it's perhaps you know, he's never been spoken to in that respect by a lot of things. But he was better last night.
No question. He's been practicing. He literally has the best debate coaches that money can buy, lots of money. So, we'll see. I mean, and we're still -
- he's advertising so incredibly. Those Obama ads, he's advertising with President Obama, you know, $38 million on those alone.
[15:40:07]
That's more than three times Joe Biden's entire advertising budget, spending $300 million overall. So, that can be very powerful. But let's see
what he does here tonight, right here at the Memminger Auditorium in Charleston, South Carolina, that will show how good of a candidate he's
becoming, Richard.
QUEST: And thank you. We will be there. We'll talk to you tomorrow, well, hopefully, about what happened afterwards. In the next few hours --
ZELENY: Right.
QUEST: -- the debate for the Democratic presidential town halls. This is where you get a lot more -- a chance to beat into questions, not just one
or two glances and maybe, but really drill down. Michael Bloomberg, Joe Biden, Amy Klobuchar, Elizabeth Warren, live tonight. You see the schedule
as to how we're going to get to grips with them all. And it's here, only here, on CNN.
The spread of the virus, after the break. Millions of people around the world are working from home. New strains on companies and we're starting to
discover, frankly, that all this homeworking and remote working isn't as easy when it's done on large scale, in just a moment.
(COMMERCIAL BREAK)
QUEST: Chevron is having some of its London employees to work from home after working with flu-like symptoms was tested for coronavirus. Currently,
there's no known outbreak in that office and workers are staying away until the results are known. In China, millions of people are working remotely as
governments and companies encourage workers to stay at home to prevent the virus from spreading.
I know numerous colleagues, for particularly in our Asia offices, some of whom are walking down to their homes in Sydney and in Melbourne and all
staying at home. Now, Silvina Moschini is the CEO of the TransparentBusiness who tell people -- you basically tell people about
remote work, you know, amongst other things, the ways in which it can be done. And you've donated a million dollars to help fight the coronavirus
outbreak. Where will that go towards?
SILVINA MOSCHINI, CEO, TRANSPARENTBUSINESS: Well, it's something that is happening right now. And it's expanding globally. And as you know, business
continuity is key, not only for governments but also for corporations. So, as a social entrepreneur, we are trying to help by pledging a million
dollars' worth of our technology to help businesses in China to actually effectively deploy work from home models, to bring transparency into remote
workforce management.
[15:45:08]
QUEST: Work from home can go so far. How do you think it can best help in this environment?
MOSCHINI: By bringing transparency into the remote work process, Richard. When you think of remote workforce management, you have to deal with three
issues, trust, engagement and accountability. Our technology makes all the work verifiable. So, the managers can rest assure that people, even when
they are at home, are actually working. It also brings collaboration tools, like video conference and video chats.
QUEST: Because of course, the old thing of working from home, unless it is a structured, remote working plan, working from home, I'm not saying it
means doing nothing, but it means I'm having a lighter day.
MOSCHINI: Actually, people are more productive working from home. But what it is important is when you deploy this type of programs at this scale, you
need to have a process and you need to have transparency to make sure that our people are actually working in a much more structured way without
having to show up at work. Meaning, you shift the monitoring from the person's physical presence into their work process. And this is key.
QUEST: How realistic is this to scale up quickly, as this virus continues?
MOSCHINI: I think it's very realistic and not only because of coronavirus, because coronavirus is an accelerator, but millennials are going to be 75
percent of the workforce in the next five years, and they want to work remote. They want to work from home, from anywhere, with flexibility. So --
QUEST: But the limit -- what -- okay. What do you see is the limitations from working from home? Clearly, I can't work from home, most days, because
I had to be here at a particular hour. So, what are the limitations?
MOSCHINI: The limitation is when you have to do scenes that are not computer-based. If this is something that is can done -- can be done in the
computer, you can actually log in in the computer, the technology can make the work that you do, visible. So, your supervisors or your team members
can actually see how your work is evolving.
QUEST: All the different things we've seen over the -- over the years, flexible working, working from home, remote working, share hot desk
sharing, all these different -- the workplace today is quantumly different from how it was when I started in the 1980s and probably when you started
too.
MOSCHINI: We started pretty much at the same time.
QUEST: No, I don't believe that. You're (INAUDIBLE)
MOSCHINI: Yes, absolutely. And it's going to change dramatically because we are living a perfect storm for digital transformation. We sell things on
the internet, we do online banking, we do pretty much anything, even finding our couple or our significant other. So, we need to make work,
digital. And through technologies that exist today, this can work better for the employers, but also for the employees. So, it's shifting massively
and it's shifting very, very fast, Richard.
QUEST: Working from home, but you do get a chance to shake hands today. Thank you very much for joining us.
MOSCHINI: Very nice.
QUEST: Thank you. Now, Walt Disney said, all our dreams can come true if we have the courage to pursue them. Bob Iger got lots of dreams from Disney.
He spent a great deal of money. And it all came true. Now, he's gone or will be, or thinking? Well, you get the idea, after the break.
(COMMERCIAL BREAK)
[15:50:00]
(COMMERCIAL BREAK)
QUEST: The Magic Kingdom has a new monarch, so to speak. It's not quite the fairytale ending Disney have been hoping for. For the announcement, the Bob
Iger is handing over as CEO. The stock is down some 3-1/2 percent. Now, having said that, has been up quite considerably over the last few months.
Bob Iger is widely considered to be one of America's most successful CEOs. And of last course, he's stepping down.
He helped turn the 100-year-old company into a media powerhouse, overseeing major acquisitions like Pixar and the Star Wars and Marvel franchises. More
recently, he helped launched Disney Plus. He spent a great deal of money in the billions over here, in the tens of billions over here, will be replaced
by Bob Chapek, he's the current head of Disney's theme park businesses.
So, Frank Pallotta is with me. Frank, this is a fascinating corporate move. We knew he had to go at some point, if you're wanting to go for some time,
but I guess the reason is why now?
FRANK PALLOTTA, CNN BUSINESS MEDIA WRITER: I think the reason is right now, is what he has said. He wants to focus more on the creative side of the
company, which is really interesting, because you would think that's a real big step down from Bob Iger, to be the CEO to Disney and then suddenly just
be the creative head of Disney. But it's not for Disney. Because if you think about the foundation of Disney, back in 1923, it was Roy O. Disney
and Walt Disney. Roy was the business and Walt, his brother, was the creative.
So, I'm not saying that's exactly what we have now. But if you think about Disney's history, it's run pretty well two prosperous times. Frank Wells
and Mike Eisner in the 1990s with two people at the top. It could be the same thing, this time out, for the next 22 months, at least.
QUEST: Right, but who's the boss?
PALLOTTA: That's a good question. I --
QUEST: But does it matter or --
PALLOTTA: That's a better question. I don't think it does. Because I think Bob Iger has created such a well-oiled machine at Disney, that it can
almost be a company by committee. You look at Kevin -- you have you have the Kevins, you have Kevin Feige, running Marvel Studios, the biggest
blockbuster brand in all of Hollywood, if not all of cinema. Then you have Kevin Mayer, who's running Disney Plus, which is the future of the company.
Then you will have other people running their own little departments, whoever's going to run the parks, which is the most solid part of the
business for the company. It can work with Bob Chapek, is kind of the business operation day-to-day and Iger as the big picture guy.
QUEST: But you always end up with these situations, companies like Disney, the vision thing.
PALLOTTA: Yes.
QUEST: The leader, the boss. Now, traditionally, after a very big famous name --
PALLOTTA: Yes.
QUEST: -- the next person tends not to do terribly well because they tend to be more of a technocrat and a bureaucrat.
PALLOTTA: That's true. But then you look at Apple, at the time, Tim Cook, had to follow --
QUEST: How long did it take him thereafter?
PALLOTTA: That's fair.
QUEST: How long did it take?
PALLOTTA: That's really fair. But what I'm trying to say is, that it can be done. Yes. After Walt Disney died in 1966, Disney went through pretty much
two decades of dark times when they were almost bought in a corporate rate. And it wasn't until Michael Eisner and Frank Wells came back to the head of
Renaissance. Then Iger basically did everything on his own. And that's where we are now.
I think that Iger has created such a company of strength that it can survive, really, whoever the next person is, and let's be quite honest,
Chapek is a good CEO. He's run -- he's not just like somebody they found on Bonavista Boulevard. He ran the Disney Parks unit, which has been one of
the most solid units for the company.
QUEST: But is he what I suppose when we're calling governmental terms, a technocrat? He will -- Chief Operating Officer type of mentality.
PALLOTTA: I mean --
QUEST: He makes the trains run on time there.
PALLOTTA: He does make the trains run on time. He's a really good manager, really good operator, but look at it this way, in the next 22 months, he
can learn alongside Bob Iger. And he can become more and more like Bob Iger, in the same way that Iger learned alongside Michael Eisner.
[15:55:11]
QUEST: We need to look at the markets. Thank you, sir. The day is coming to an end. The last few minutes of trade on Wall Street. While we have pull
back, there is some green, Pfizer's up obviously on individual news, Boeing's up, Disney is down 3.4 percent. But Frank Pallotta has clearly put
that into perspective. That really is just a sort of a knee jerk reaction, as for the market itself. Well, we are down, but it had been a great deal
worse, it was off over 150 points.
Now we're down just 59. A long way, though, a long way from being up 400 and some points which we are earlier in the day. And have a "PROFITABLE
MOMENT" after the break. Poor Disney down so much.
(COMMERCIAL BREAK)
QUEST: Tonight's "PROFITABLE MOMENT," the U.S. President says that everything's under control, and that there's no need for panic. And once
again, of course, man and when it comes to the virus, and once again, has managed to blame the media. That's basically the likes of me for causing
panic by pointing out that the global economy is slowing down, that China's manufacturing is probably in recession, and that this coronavirus as its
own CDC, has seldom is likely to get much worse.
But tonight, the President has to do more than just a bromide. He has to show that he understands the seriousness of what's going on, and that there
is in place, proper rules, regulations and procedures for dealing with it. When the person in the government whose head of pandemics has not been
replaced, and the CDC is saying, get ready, this is going to get worse. It begs the question, is the administration ready to cope? Now, Europe has
exactly the same issue.
But we've heard from the commissioner today, that they are getting their act together. They're watching Italy and they're ready to respond as
necessary. So far, the U.S. administration has not created that same level of urgency and preparedness, at least in the public eye, that would need to
be done.
Tonight, the President has a chance to put that right. And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're
up to in the hours ahead, I hope it's profitable. We are down nearly at the lows of the day.
END
