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Quest Means Business

U.S. Stocks Rally As Market Volatility Reigns; New Zealand Reports First New COVID-19 Case In Three Weeks; Florida Restaurant Faces Uncertainty Amid State Virus Surge; Twenty Indian Soldiers Dead After Clashes With Chinese Troops; MTA Seeking Another $4 Billion In Coronavirus Relief; Ghana Renews Efforts To Woo African-Americans Amid Protest. Aired 3-4p ET

Aired June 16, 2020 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:01:55]

RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Sixty minutes before the end of trading, and if we look at the way the markets are, they are encouraged and

pleased. It seems to be because of the Fed. We will go into all the details over the course of the next hour.

Off the best of the day, but also off the worst of the day. Those are the markets. What's behind it?

Well, firstly, a supermarket sweep through U.S. retail. Sales have smashed through expectations. Clearly, shoppers are prepared to go back in to buy.

And the Fed Chair tells lawmakers it is still a long road ahead to the recovery. That suggests interest rates remain low for the foreseeable.

New Zealand reports its first new COVID case in weeks. It is an imported case. The country's Central Bank Governor will be with me to discuss what

economic measures will need to be made overall.

Live from New York on Tuesday, June 16th. I'm Richard Quest, and of course, yes, I mean business.

So, the volatility continues in the U.S. markets, and we saw that throughout the course of today. But the market remained positive

throughout, and that's one of the big differences. The bouncing around was a case of giving back gains, and now, late into the afternoon, you see them

back up again.

So we are up across the board. The Dow is up 2.25. NASDAQ is 1.75. Holding the gain of 26,000 for the Dow. The NASDAQ -- so strong gains, and these

are the reasons why.

Jerome Powell says the recovery is uncertain, that more support will be needed, and there is report of a trillion dollar Infrastructure Bill that

will be coming along.

There were some extremely interesting and impressive sales numbers. A rebound last month of 17.7 percent. Economists had expected eight percent

on the U.S. retail sales numbers, and that's the possibility.

Well, you see it there. If you look from the bottom, that looks like a V. Is it going to be a V recovery? The Fed Chair, Jerome Powell speaking to

Congress, he told senators that the pace of the U.S. economic recovery would depend on the way the coronavirus spread continued. And he reminded

everybody the Fed is buying corporate debt.

(BEGIN VIDEO CLIP)

JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: It was out of an excess of caution to preserve these gains for market function by following through.

And I don't see us as wanting to run through the bond market like an elephant you know doing things and, you know, snuffing out price signals or

things like that.

We just -- we want to be there if things turn bad in the economy or, you know, if things go in a negative direction. We want to make sure that we --

you know, that we are there. Also, with the ETFs, remember it is a very small part of the market.

The actual bonds give us a better purchase should we need it. We clearly don't need it now.

(END VIDEO CLIP)

[15:05:09]

QUEST: Julia, why are they buying bonds? This was one of the unique aspects of this crisis. It's taken them weeks, if not months, to put together this

bond-buying program which is now under way.

JULIA CHATTERLEY, CNN BUSINESS ANCHOR: This is a great question. Speaking of snuffing out price signals. This is a goldilocks scenario for investors

of all forms. Jay Powell stands ready to support asset prices and support the economy if things go bad. And if the data is good well they are still

doing lots of support measures and it is kind of good anyway.

In the beginning, there was this sense that we could see all sorts of corporate bankruptcies that would be bad for jobs, it would be bad for the

economy.

The idea that you need to buy debt to support many of these weaker companies in particular made sense at that time. Weeks later, Richard, as

the data starts coming in stronger, there is an argument to be made here that -- is it too late now and we just see how the economy evolves? We will

never know.

But there is an argument to be made here that the V-shaped recovery is being insured for the wealthiest in the United States, the stock market

investors.

QUEST: Right.

CHATTERLEY: We can't ensure the same kind of V-shaped recovery for ordinary people.

QUEST: You are looking at the chart there, Julia. You are seeing it as well of U.S. markets year-to-date. You know, I always said it was tick

backyards, a reverse checkmark, at least we might see that elsewhere.

It is a full throttle V for the stock market. There is no equivocation on that.

CHATTERLEY: Absolutely. And Jay Powell was attacked today with questions about inequality, all the things that we are seeing fueling the racism

debate, the underlying recovery, leaving huge swaths of the population behind.

He was asked about the fact that we are seeing jobs coming back for white Americans, for example. We are seeing those for Latinx, for black African-

Americans lagging and will this be a similar recovery? He said, we can't ensure that.

And I think that's why the real message coming out of today was as much as we are seeing a rebound in the economy in terms of some jobs, in terms of

retail sales.

QUEST: Right.

CHATTERLEY: A lot of that came down to the stimulus that was provided by Congress. Most of that ends end of July, by August. What more to support 20

million people than that are still out of jobs?

QUEST: So, the U.S. government says that it is not looking to increase or extend the amount of time when they were paying an extra $600.00 a week for

people who are out of work. Instead, there is this idea that it is actually paying people to be out of work. It's actually a disincentive to go back to

work. Do we have a proposal yet?

CHATTERLEY: Not yet. Remember, the prior jobs report that we just got is there was some argument against that, if net 2.5 million jobs came back,

then that $600.00 bump up every week has not been a disincentive for those workers.

There is the suggestion that perhaps we could see people paid a sum of money paid to incentivize them to go back to work. Idaho, I think, one

state that is actually testing this at this moment.

But I go back to the point I made, Richard. We have 20 million people at this moment that still don't have jobs. You can't just switch off that

extra $600.00. It has to be a graduated process because there are many people that are going to need more support for the coming weeks and months.

Having said that, in 38 states, on average, people are earning equal to or more than what they were earning before. So, that does argue that those

that argue there is a disincentive effect here, do have a point.

QUEST: Julia Chatterley will watch closely on "First Move," and with us of course, helping us understand what is happening. Thank you.

Now, let's talk about those May retail sales numbers that Julia was referring to. More than double what economists had expected and certain

sectors saw massive spikes in sales as stores began to reopen.

There is a strong argument that says, well, that's just a sort of a bounce back. If you bounce the ball down, it come back part of the way. You saw

the graph there of the retail sales that we showed you. It is the beginning nus if you like of the V shape.

But there was growth in every sector. Clothing and accessories were up 188 percent. Furniture and home furnishings, up 89.7 percent. Sporting goods

and hobbies, up 88 percent. Food and beverage up two percent. Perhaps, that was already up because of course that doesn't really change much overall

anyway.

Retail sales were still down from last year. Nestle is one of the companies adjusting to the new consumer behavior. The Chairman, Paul Bulcke joins me

from Fribourg in Switzerland via Skype.

Paul, it is good to have you.

[15:10:10]

QUEST: Paul, a few weeks ago you said that one of the key challenges was understanding what consumers wanted to buy, not only during the crisis, but

in the post -- immediate post crisis world.

Are you better now at understanding what that is?

PAUL BULCKE, CHAIRMAN, NESTLE (via Skype): Well, Richard, good to be with you. To better understand, I mean, at the ends of the day, the COVID is

just accelerating some trends. But what we see is that people do go for more bang for money.

They buy differently, e-commerce has gotten a spike, and so much of this e- dimension has accelerated. And what it means also, in-home, out of home almost stopped in many areas. So that, we have to adapt to that.

We have quite an important business in out-of-home, but that is partly compensated in in-home, and that's what we work on.

And so, the biggest challenge for us when the crisis struck was three things. First of all, safety of our own people to be able to continue to

produce. It is the safety of our people and their families first.

Second, activity, do what we are best at, which is producing food and beverages, actually, affordable nutrition, and continue doing that. It is

even more important in this crisis, and then the third one was solidarity, just connecting with the communities we are working on, and has shown

empathy, and that is what we have done.

QUEST: So when you look at that, the economic crisis and what it means for each of our product categories within the framework of the three thing that

you have just said -- I mean we always think -- I mean, we have always thought of things like Nestle has been those goods, yes maybe at some end,

it is discretionary, but they are the basics that people need and will continue to buy.

BULCKE: Well, first, we are in the food business, so in other words, we are more resilience in crisis like we have now and it is not over. And second,

we are actually very local. We have operations in 187 countries. We are very local.

So our supply chains are pretty local. Supply -- the farmers that we care for, we produce everything relatively local. So, in that sense, to some

extent, fortunate that we could also be wider with our partners or supply chains. That is continual. That's what we want to be, dependable. And

that's what we have to secure to continue producing affordable nutritional food.

QUEST: As you look to open up the company and you look to bring people back to work in different places, and I understand it will be at different

speeds in other parts of the world to do so safely. That in itself creates an entire raft of challenges.

Do you fear that it is -- the way in which it's happening?

BULCKE: Well, we understood the whole crisis, depending on country by country, when the country was in the eye of the storm and we had short-

lived disruptions, but we have been able to go through the crisis. We worked almost at 80 to 90 percent of capacity.

That, again, referring to the food business and the food industry as I said is quite resilient. And also the empathy with local communities and

authorities was there to keep us as active as possible.

So in this sense, going back to work on the frontline, which is our factories and all of that, it is basically not a very big change for what

we have been able to continue.

Office work and all of that, we have moved into working from home. We are coming back to this slowly. But I must say, this out of home -- from home,

working from home has been quite efficient and effective. No, we are returning back to offices.

I just came from the office, and it is not full. We are 40 percent to 50 percent back. But that is working quite well, I must say.

QUEST: Paul, good to see you. Thank you for joining us. Paul Bulcke joining us from Switzerland tonight.

The coronavirus has been eliminated almost from New Zealand. One imported case has been reported, but the economy of course, itself has some extreme

difficulties to face.

The governor of the Reserve Bank of New Zealand is with me after the break.

(COMMERCIAL BREAK)

[15:17:45]

QUEST: New Zealand reports its first case of coronavirus in some three weeks. It is not a case of community spread. Rather, two women arrived from

the United Kingdom. They were relatives traveling together and the contact tracing is now under way.

It is a cautionary tale on travel. New Zealand until now had prevented community spread. It comes at a time where there is a debate in New Zealand

over the alert level that the economy should be at.

There are those within the Coalition Party that believe that New Zealand should now move to a higher opening, virtually pretty much a full-scale

opening of the economy.

The Governor the Reserve Bank of New Zealand is Adrian Orr. He joins me now from Wellington in New Zealand. Good morning to you, Governor.

Don't worry, sir, I am not about to enmesh you in the internal politics of the coalition about which alert level New Zealand should be in. But I am

going to ask you how concerned you are that if the economy did have to be restricted again, what the effect that would be on the economy.

ADRIAN ORR, GOVERNOR, RESERVE BANK OF NEW ZEALAND: Well, thank you for having me on the show. I think the simple answer is very concerned.

This is the challenge that everyone globally has that whilst you can contain this virus, you have to remain on alert. This is why for example,

when doing our monetary policy such as I am sitting, we strictly avoided specific predictions.

We were running scenarios, really, around shifting between the different levels of constraints that may have to happen in the economy if and when we

see the COVID virus break out again.

So it is a difficult situation. We are a small trading nation. We need to have borders reopened like all countries at some point. But it is such a

difficult situation. What we are talking about at the moment is whether there is what we call some kind of South Pacific bubble that transcends

between Australia and New Zealand and hopefully the South Pacific Islands as well which are the South Pacific Islands that are COVID free and

Australia is almost free.

[15:20:15]

QUEST: Well, you stand ready, obviously, to do more if necessary. Where do you believe that more comes from? Does it come from you at the Central

Bank? Or does it come are the government in fiscal policy? And even if it is a bit of both, who bears the brunt of keeping the country going?

ORR: Well, without a doubt, it is fiscal policy. This is exactly the type of economic shock with some government expenditure, government investment,

training, infrastructure -- all of these types of activities which will take the forefront.

And monetary policy is much the full chiasm in the efforts that we are making. Having said that, I mean the efforts are extremely significant. We

have quantitative easing, as many other country as Central Banks around the world and we have interest rates at or near zero and a very flat yield

curve.

But our challenge for monetary policy is you can't force people to borrow and you can't force people to lend. And so, really, it is about direct

spending, direct investment. The wage subsidies, the labor mobility, capability -- that is all fiscal policy.

QUEST: In terms of your monetary tool box, which -- I mean you are at zero de facto, and the argument over negative rates is one that is not going to

be solved in this crisis.

But between forward guidance, yield curve manipulation, statements keeping the rate at zero, where do you lie? What for you is the next tool that you

will deploy if required?

ORR: Yes, I mean a very good question. And I would just say the principles around effectiveness, efficiency for the economy, cost on the fiscal books

and actually operational capability, it always helps if you can actually implement policy that you are talking about.

Setting them, that's why we have been pleased with the impact of quantitative easing it has had. We have seen interest rates have come down

and the yield curve flatten. Those had the impacts we were anticipating across the economy. What would be next? Well, we can increase the size of

the QE. We can increase the instruments that can come into the quantitative easing.

Beyond that, we haven't taken negative interest rates off the book, a negative OCR, so negative wholesale rates. But there are operationally some

banks that are not ready, but we have said get ready, and it has really been optionality, we've got that signaling.

Beyond that, there is long term lending that we can do so banks can come to us and we can provide that much longer term lending.

Forward guidance, we have always been in that place. We have always provided full projections anchored around what we need to achieve. We are

confident though, there are plenty of tools and we are also sure that we have the main game in town, it will be their fiscal policy.

I just would want to say that you know, if you have gotten into a crisis like we are in, New Zealand was a good place to wait for it from not just

geographically, but also we had very low unemployment, high employment, high engagement inflation about the midpoint and especially our fiscal

position was very strong.

So, even with all of this fiscal spending, the government is still talking about there being 50 to 60 percent debt to GDP if they had to deploy

everything on the table.

QUEST: Oh. Well, 50 to 60 percent debt to GDP, I know many countries that would be salivating at the prospect of that sort of number in this day and

age.

Governor, it is good to talk to you. Thank you for your early start in your part of the globe. I appreciate it. Thank you very much, sir.

ORR: Thank you.

QUEST: The Governor of the Reserve Bank of New Zealand. We are looking at as we always do on this program at those who are doing business and how

they are doing business.

Portugal's economy, yesterday, Fred Pleitgen was talking to us about how he got to Portugal on his Lufthansa flight. Now, he is there. He is finding

out about reopening the tourism industry.

(BEGIN VIDEOTAPE)

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): Even in these times of pandemic, Lisbon's most famous bakery Pasteis de

Belem is still churning out cream cakes. But owner Miguel Clarinha says his business has been hit hard by the lack of tourists, and he doesn't think

that will change soon.

(BEGIN VIDEO CLIP)

MIGUEL CLARINHA, OWNER, PASTEIS DE BELEM: We're hopeful, of course. But we also know that this year is going to be a very, very slow year even with

the borders opening up.

(END VIDEO CLIP)

PLEITGEN (voice over): Even as many European countries are lifting travel warnings, only a few tourists can be seen in Lisbon's historic old town.

[15:25:08]

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: In free areas, it's not very dangerous. Only in small spaces, in rooms or something. And so we are not scared about that.

(END VIDEO CLIP)

PLEITGEN (voice over): Among European nations, Portugal is one of the most dependent on tourism. The country is now launching a campaign to win

travelers back. I caught up with the Prime Minister just as he unveiled the program.

(BEGIN VIDEO CLIP)

PLEITGEN (on camera): What is Portugal's strategy to try and bring tourism back to this country in a safe way?

ANTONIO COSTA, PRIME MINISTER, PORTUGAL (through translator): We've created protocols between the health authorities, all the hotels to create a

specialty clean and safe to give everyone guarantees that they can come and they'll be safe.

(END VIDEO CLIP)

PLEITGEN (voice over): Portugal is viewed as having dealt successfully with a pandemic so far. Having shut down early, the COVID-19 death toll here

remains low, and anti-coronavirus measures remain on prominent display like temperature checks at the airports for all those arriving.

The Prime Minister says he believes Portugal's track record will help the country beat out other nations and the quest to lure wary tourists.

(BEGIN VIDEO CLIP)

COSTA (through translator): We're among the countries that tested the most, one of the countries that better knows the real spread of the virus where

the numbers are the safest and where people can come with confidence. And confidence will be one of the differentiating factors at the moment of

choosing where to go on holidays.

There, I think Portugal is a good destination.

(END VIDEO CLIP)

PLEITGEN (voice over): Portugal's economy has been hit extremely hard by the coronavirus pandemic. Now, the country is battling to come back making

reviving its tourism sector a top national priority.

Fred Pleitgen, CNN, Lisbon, Portugal.

(END VIDEOTAPE)

QUEST: So, you heard the Portuguese Prime Minister there talking about confidence, the ability to have confidence in the safety of where you are

going.

Let's turn to Florida because there has been an uptick in cases in Florida that's dented that confidence and that uncertainty. Take for example, the

Gallery Restaurant, which in St. Petersburg reopened its main dining room on May the 4th. Closed it again after staff reported symptoms.

Now, it has lost $25,000.00 in being closed just several days. Pete Boland is the owner of the Gallery Restaurant. He joins me now. Reading what's

happened there, Pete, what went wrong? I mean why -- why did -- why was there this uptick, in your opinion, what happened?

PETE BOLAND, OWNER, GALLERY RESTAURANT: Well, thanks for having me. You know, I am not sure exactly what or where anything went wrong. But, you

know, some of it is just that, you know, being in the hospitality business in downtown St. Pete as a very popular bar and restaurant district. We are

kind of one of the funnest places in the U.S. to visit to that was open.

So we have had a lot of tourists that are still coming down here to Florida to kind of get away from the lockdown and people kind of were very

confident in going out for a good while.

For most of May, you didn't have any problems. If you asked anybody here on the streets, no one knew anybody that had contracted the virus or was

really suffering from symptoms.

So, maybe it was just a little bit of overconfidence and kind of like our just passionate desire to go out and be amongst each other. You know? We

can't stay locked down forever.

QUEST: No, we can't, and at the Gallery Restaurant, you have learned a lesson in some ways the hard way. What would your advice -- bearing in mind

you are talking now to the rest of the world, where people are facing exactly the issue of reopening that you faced. What would your suggestions

and advice be?

BOLAND: That we have to be very fluid. You have to be agile and be able to adapt. You have got to respond and take care of your staff.

I think that you should be honest and forthright about what you are doing and what you have got going on. You know, be proactive and take some

positive measures.

But, you know, we had a lot of people that were really happy that we were open and inviting people in and you know, having live music all the time

and offering a little sense of normalcy.

I don't know that we are ever going to be able to completely escape or keep ourselves safe forever from the virus. I mean, I even hear experts like

Anthony Fauci say, even if there is a vaccine, it may not last much more than six months. So we are just going to get everybody tested and try to

create some confidence amongst our staff to work and serve in the public and for our guests to come in and enjoy our dining rooms.

[15:29:53]

QUEST: And finally, and briefly, when it does come to reopen that dining room again, I guess you'll do it with a lot more caution.

BOLAND: Yes. We were pretty cautious on the -- on the front end, and it just that, you know, the hospitality, especially, it just such a tight-knit

community where people are romantically involved with other bars and restaurants and people work a lot of part-time.

It just -- no, we were -- we were using abundance of a precaution and trying to follow every guideline to the best of our abilities. But I just

seems like, you know, no matter what could be done if people are going to go out and the guests can't eat or drink with a mask on, you know, it just

seems like the coronavirus seems to be one of the things that's going to be here to stay and we just have to mitigate those effects going forward.

QUEST: Pete, I'm so glad we had you with us tonight, because that really is what we need in terms of giving us a picture from those who have now been

through that part of it and come out the other side, and now experience. Very grateful. So, we will talk to you again as the summer goes on if we

may, sir, to find out more. Thank you, (INAUDIBLE).

BOLAND: Thank you, Quest.

QUEST: I appreciate it.

BOLAND: Thank you.

QUEST: Yes. As you and I continue tonight, I'll have a news headlines for you, of course in just a moment or three. And two nuclear powers class. The

violent standoff ends with at least 20 soldiers dead.

It's an in the Himalayan mountains, and we'll find out what happened, or least attempt to, in just a moment. This is QUEST MEANS BUSINESS. The

market is up and we're in New York.

(COMMERCIAL BREAK)

GRETA THUNBERG, CLIMATE ACTIVIST: I hope that we can see now that the scientific community are stepping up and they are -- they are speaking out

more than they have -- they have done before because obviously, this is a crisis that would require the scientific community to speak up.

It feels like science is getting -- the role of science is changing now, it's becoming more -- people are starting to realize that we are actually

depending on science and that we need to listen to scientists and experts. And I, I really hope that we that, that, that stays and that's -- that also

is for other crises such as the climate crisis and the environmental crisis that we understand that we have to listen to, to the scientists.

QUEST: Hello, I'm Richard Quest. There's a lot more QUEST MEANS BUSINESS in just a moment. Some -- we'll be talking about India and China and the

simmering tensions which have reached some deadly incidents in the last 24 hours. We'll to discuss that.

We'll also be talking to the head of the MTA, which is the Metropolitan Transit Authority. It runs New York's buses, trains, and public transport

system. About the difficulties of running a system, one of the largest in the world at such a time.

This, of course, comes after we have the news headlines because this is CNN, and on this network, the news always comes first.

[15:35:09]

QUEST: South Korea's Ministry of Defense, says it will respond strongly if North Korea carries out a military provocation. Tensions between the two

countries are high after Pyongyang destroyed a liaison office on its side of the border on Tuesday. It had been used for a landmark bilateral talks

two years ago. Excuse me.

Preliminary research from a large medical study suggests that commonly used steroid reduces the risks of dying in the sickest coronavirus patients by

about 35 percent. The drug is Dexamethasone is cheap and widely available. The findings which are part of a U.K.-based recovery trial are still being

compiled.

In Britain, Downing Street now says there will be a COVID summer food fund for hungry children. The decision follows pressure from Manchester United's

Marcus Rashford. The prime minister had initially rejected the call to extend the food voucher scheme for low-income families.

European regulators are announcing formal antitrust investigations into Apple Pay and its App Store. Apple is accused of violating competition

rules by requiring customers to use its in-app purchasing system and charging app developers a commission.

The E.U. Commission is also probing Apple's conduct on competition in mobile payments.

The Indian army now says 20 Indian troops are dead following clashes with Chinese troops. It's the result of a very violent standoff along the de

facto border in the Himalayas.

It occurred during a de-escalation process in the disputed area. Sam Kylie is with me from Abu Dhabi. Sam, when I read the very idea of a clash

between India and China along what is a controversial border or, at least, a tense border. I mean, what went wrong here?

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Richard, as you were saying in the intro there, these clashes so-called followed what was

supposed to be de-escalation negotiations between India and Pakistan over what's called the line of actual control.

A border effectively separating the two countries but not recognized by either. Running some 3-1/2 thousand kilometers mostly through the

Himalayas. Now, periodically, in 1962, '67, and '75, there were clashes that led to fatalities. But not since '75 as things got -- have things got

this bad.

Now, bear in mind that the Indians now renouncing, Richard, that they've lost 20 soldiers, including a lieutenant colonel no less, all as a

consequence of non-firearms injuries.

In other words, the two sides, the Chinese and the Indians, and there are reported to be Chinese casualties, although, we've reached out repeatedly

to the Chinese authorities to get more detail on that. But the Indians are now admitting that they lost 20 men in hand-to-hand combat that was not

involving guns. This was stones, rocks, cudgels, a very primitive form of combat at this very high altitude, because it is such a potentially

inflammatory area between what has now become.

In 1975, the picture was very difficult different. 19 -- this year now, 2021, you've got a situation in which you have nuclear powers. Both

countries are nuclear-armed, both are much more powerful in the world economically, and both are beginning to flex their muscles across the

region.

With the Chinese, of course, we've got used to their efforts to expand their territorial waters in the South China Sea. But this area of the

Himalayas is another contested area and clearly these two very powerful nations are literally it seems been butting heads.

The Indian authorities saying that the large number of these deaths, Richard, were followed injuries that were exacerbated by the cold and the

very high altitude, Richard.

QUEST: Sam Kiley in Abu Dhabi. Thank you.

As we continue tonight, we will be talking to the head of the New York Metropolitan authority -- Transport Authority. It is the -- they are the

people who run all the trains and the buses, and all the public transport, and are responsible, of course, and they are having to face some

exceptional challenges. After the break.

(COMMERCIAL BREAK)

[15:42:18]

QUEST: Welcome back. New York has turned the corner in the pandemic. That much seems to be clear. It has one of the lowest infection rates in the

United States, and of course, is now well and truly into the phased reopening plan. The whole state is now being reopened slowly but surely,

and the governor remained -- the New York City, of course, remains in phase one until July. The governor has touted the state's progress.

(BEGIN VIDEO CLIP)

GOV. ANDREW CUOMO (D-NY): We have the lowest number of hospitalizations since we started. Amen. And we have the lowest number of deaths since we

started, once again, same numbers yesterday, but on the three-day average, we are at a new low. And you want to talk about congratulations and

something to celebrate. That is something to celebrate.

(END VIDEO CLIP)

QUEST: Well, how to get around the city? Well, the New York City MTA, Metropolitan Transit Authority has paid a severe price during the pandemic.

Look at the numbers and you'll see what I mean.

Subway ridership is down more than 82 percent. It's from this time last year. The authority is projected to lose $7 to 8-1/2 billion in the course

of the year, and will need federal help.

But this is the most telling of all, more than 100 employees, 123 employees have lost their lives. Now, getting the track, getting the whole thing

going again is not easy. It's one of the world's biggest public transport systems. They have to sanitize roughly 8,800 subway cars and buses every

day. And they're doing so, of course, and they've got to keep 472 subway stations open and safe, and there are roughly 2-1/2 billion journeys being

made.

So, putting this into perspective, the MTA is now seeking nearly $4 billion more in federal support to help breach those numbers.

Pat Foye is the agency's chairman and chief executive, joins me now. Pat, thank you.

First of all, before we even talk about anything, let me -- I suppose condolences and thoughts at the number of people that have -- that have

been directly related and who have lost their lives, the subway, and the bus drivers and those who work in the stations who lost their lives helping

to keep essential workers on the move. It is a terrible toll.

PAT FOYE, CHAIRMAN, METROPOLITAN TRANSPORTATION AUTHORITY: Right, Richard, it is a terrible toll, and you're quite right, they were heroes -- moving

heroes. During the pandemic and continuing, our employees on subways, buses, Long Island Rail Road, Metro-North are moving doctors, nurses,

firefighters, police officers, utility workers, their colleagues as transit workers, those working in the pharmacies, and groceries.

[15:45:12]

QUEST: Right.

FOYE: Extraordinary -- extraordinarily important work. Good news is that nearly 10,000 of them have returned to work after having been on home

quarantine. Some of those infected by the virus, most of them are quarantined because they had contact with someone who was.

QUEST: Right.

FOYE: And that's good news.

QUEST: Pat, if you don't get this money from the federal government, what will it mean?

FOYE: Well, look, just to be clear what we're talking about, we got $3.8 billion early in the year from the so-called CARES Act. The Heroes Act,

which Speaker Pelosi passed with support from the New York congressional delegation, and Senator Schumer is an additional $3.9 million. That will

close our operating gap for 2020.

One of the reasons that the gap is so high is that, first, New York is the epicenter of the pandemic in the United States. Point one, point two, our

ridership is so high. When Governor Cuomo put New York on pause, our customers like all New Yorkers listened and stayed home, unless they were

first responders who were essential employees.

And the other reason why the gap is so high is because New York's fair box recovery, the amount that our customers' pay is so -- as a percentage,

greater than other transit agencies around the country. So, the financial toll has been -- has been significant.

QUEST: But it all comes down to, at the end of the day, at some point, either, the worry of a cut in services, or a hike in fares. Do you see

either of those possibilities, maybe even both of them, becoming necessary in the next 12 months?

FOYE: Well, Richard, getting the second chunk of federal money is absolutely essential. If we're able to do that, the $3.9 billion provided

in the Heroes Act, that will deal with our operations during the course of 2020. And then, of course, we'll have to deal with 2021.

Happily, ridership is -- we've increased service a week ago. Ridership is today 380,000 riders higher on subways and buses than it was the Monday

before we increased service.

So, New Yorkers are returning. 380,000 customers is actually the size of a small respectable transit agency. It's by MTA measures, those are low

numbers. But riders are coming back, and riders returning to the system is going to be fundamental to the economic recovery of the New York City, the

New York City region, and the MTA.

QUEST: Right, but as they've discovering, as London transporter firm, you will be very familiar is discovering with the tube which, you know, that

the trains aren't as big, so it crowds more easily. But they're seeing crowding -- some crowding on the tube, which raises issues of safety.

Now, you're some way off that at the moment, but if you do get large numbers coming back, then you do have that same problem, don't you?

FOYE: Well, I suggest it's a different problem, Richard. One is, we've been candid with our customers throughout before the pandemic, during, and

after. Second is, the most important thing that our customers and employees can do is masks, masks, masks.

Governor Cuomo has made the wearing of masks on transit a state requirement -- a state law requirement. 100 percent of our employees are wearing masks.

We did a physical study about 10 days ago, and that reported 92 percent mass compliance by customers, we did it again this week. We're now up to 95

is the latest data point.

So, a combination of increased service, masks on all customers and employees, and we have way finders and platform controllers and others that

are monitoring that. Last week, we distributed about 2 million masks to returning riders who didn't have them, or we're distributing hand

sanitizer.

The research clearly indicates and we've been -- sorry, we've been candid with our about social distance. Social distance of six feet is not possible

on mass transit, hence, the name mass. And our colleagues at TfL in London are experiencing the same thing.

So, what we are telling our customers is the truth. You've got to wear a mask, your co-commuters have to wear a mask, employees have to wear a mask,

we're going to disinfect every subway car, every bus, every Long Island Rail Road at Metro-North car multiple times a day.

In the case of the subways, the stations were disinfecting twice a day. If customers -- if customers wear masks, we will continue the disinfecting

regime, of course.

[15:50:04]

FOYE: We're also filing in two innovative disinfecting programs, which should give customers additional assurance.

(CROSSTALK)

QUEST: Right.

FOYE: Which is one, an ultraviolet-C wide project. We were the first working with the Columbia professor Dr. David Brenner that indicate that

the COVID-19 virus is killed by ultraviolet C light. And we're filing in antimicrobials, which we have applied a number of times to our subway cars

and buses.

Which we believed and we're waiting for independent labs to verify this. We'll kill the COVID-19 virus and do it for a weeks and months after an

application.

QUEST: Pat, it is good to have you. Thank you. You are an extremely busy man, I'm grateful you gave us time. Let's talk more as the summer moves on

and we can work out exactly where we stand at the moment. Thank you, sir. Now --

(CROSSTALK)

FOYE: Look forward to that, Richard. Thanks for having me.

QUEST: Thank you. Now, as the Black Lives Matter campaign and protests go in the United States, one African country is saying (INAUDIBLE) into its

nationals and its expats overseas, come home. After the break.

(COMMERCIAL BREAK)

QUEST: President Trump has signed an executive order on police reform. Of course, it comes amid the violence in the United States, and the protests

that have been taking place over George Floyd, and of course, the incident in Atlanta over the weekend.

And now, officials in Ghana are renewing their efforts to get their expats to come home, to get their citizens to return. Our correspondent Stephanie

Busari, reports.

(BEGIN VIDEOTAPE)

STEPHANIE BUSARI, CNN INTERNATIONAL CORRESPONDENT: One African nation is sending a message to African-Americans in the wake of George Floyd's death.

BARBARA, OTENG-GYASI, MINISTER OF TOURISM, GHANA: We continue to open our arms and invite all our brothers and sisters' home. Ghana is your home.

Africa is your home.

BUSARI: Ghana recently unveiled a monument of Floyd and is openly calling for black Americans to move there. The country has courted the black

(INAUDIBLE) for some time.

Last year, the president launched the year overturned initiative, marking 400 years since first documented arrival of West African slaves to America.

Young and old flock to the country for a number of cultural events, such as Accra Fashion Week and a music festival, Afrochella.

[15:55:03]

BUSARI: Ghana's finance minister hailed the scheme a massive success, saying it recorded as much as $3 billion in added GDP. The government in

Accra is now building on that momentum with another initiative called, Beyond the Return, which aims to encourage investment in Ghana.

AKWASI AGYEMEN, CHIEF EXECUTIVE OFFICER, GHANA TOURISM AUTHORITY: The clarion call now for the Box to Africa movement to be reignited is really

something that is natural. Africa is home and we are hoping to open arms to our kith and kin to come back home.

BUSARI: One African-American man who came for a business trip in February, says he chose to stay and see the pandemic through there. And he urges

others to follow in his footsteps.

RASHAD MCCROREY, AMERICAN ENTREPRENEUR: Really consider moving to Africa. Really consider moving in Ghana. This land of resources, the riches,

everything is here for you to succeed.

BUSARI: A country once central to the trans-Atlantic slave trade, now offering a safe haven for those looking to restart their lives. Stephanie

Busari, CNN, Lagos.

(END VIDEOTAPE)

QUEST: And we will take a "PROFITABLE MOMENT" after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's "PROFITABLE MOMENT". On the program, we brought you two voices. The one from the Galley restaurant in Florida, where they've had to

close the dining room having reopened it, and then, of course, from the New Zealand Reserve Bank governor, of the central banker.

Both have very salient and sobering messages that we cannot be, you know, the problem is, we think this is going to be over and it's not. We think

that COVID is going to be -- one of those things that by the time we get to the middle of the summer, we can all forget about.

No matter how many warnings from the scientists which we hear every day, which we come inured to in many ways, we still think it's not going to

really be as bad as they do. Well tonight, we brought you two voices that really prove that this thing could get worse again. And if we're not

careful, the economic implications of that could be more lockdowns and shutdowns, which would be even worse, of course, for economic growth.

Despairing you just of thought to keep it with your mind.

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 is profitable. The

closing bell on Wall Street. The Dow is up, the day is done.

END