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Quest Means Business

Global Stocks Tumble over Delta Variant Fears; Olympic Events to be Held without Spectators; Scientists Say U.K. Government Plan to Reopen Fully Is "Dangerous"; Call to Earth; Biden's Big Promise to Amtrak. Aired 3-4p ET

Aired July 08, 2021 - 15:00:00   ET

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

[15:00:17]

RICHARD QUEST, CNN BUSINESS HOST: Well, how have things changed. An hour before the closing bell, and the Dow has been off as much as 530 points

over the course of the session. The markets, you can see we are off the lows of the day, but we are still heavily down.

We seem to have hit a sort of a sludgy bottom where we are going through. The markets and the reasons why.

Worldwide investors are knocked off their perch over fears of the delta variant. It's like they are coming home to roost.

One reason the Tokyo Olympics is now behind closed doors, Sir Martin Sorrell will be with us on the disaster that spells for sponsors.

And England will scrap quarantine rules for vaccinated arrivals, but the devil is absolutely in the details. Not everyone stands to benefit.

I'm live in New York with you on Thursday. It's the 8th of July. I'm Richard Quest and I mean business.

Good evening. There are cracks in the global economic recovery, and they are starting to show. Investors' nerves are being rattled around the world.

So, markets are down on both sides of the Atlantic. The U.S. averages on the top line there and are following European counterparts earlier in the

day which were down and that feeding lower continued once they saw there was to be no resurgence out of New York.

The troubling signs are everywhere. New jobless claims rose last week in the United States. It was a surprise after previous job growth last month,

good growth. Investors are turning to safety, the yields on the 10-year is at its lowest since February. The E.C.B. is raising its inflation target to

2.5 percent and says it won't necessarily worry if it overshoot asymmetric inflation targeting, it is known as.

And a sobering reminder the pandemic is far from over. Japan has extended its state of emergency, and in doing so, banned domestic fans from

attending the Olympics.

You can see the evidence. The VIX, a measure of market's volatility today up around 18 percent, having spiked 25 percent earlier in the day.

Matt Egan is here. Matt, the delta variant, yes; slowdown in growth, yes; inflationary fears, we know about. So what changed?

MATT EGAN, CNN BUSINESS SENIOR WRITER: I don't think really all that much changed, Richard. To your point, all of those things were really here 24

hours ago and 24 hours ago, the S&P 500 was closing at a record high. I do think that one thing that has happened is there is a little bit more

tension about the seriousness of the COVID variant, this delta variant which is described as COVID-19 on steroids.

And the fact that Japan is banning spectators from the Olympics is a big deal, it is significant. Japan is in a state of emergency, and investors

are banking on spectacular economic growth. So, anything less than that is going to disappoint.

But to your point, the market was probably due to pull back and it could have been any number of things that was the trigger. And today, it does

feels like it is about COVID and growth concerns. But we do need to put all this into context.

I mean, heading into the Fourth of July holiday weekend here in the United States, the S&P 500 was up at a record high for seven consecutive days. We

haven't seen that since 1997, Richard. So, the market was due to pull back.

QUEST: So, okay. And as you can see, today that sort of upward pressure is still there by virtue of the fact we were sharply down and now, we've come

back a bit, and the same with the NASDAQ. But it begs the question, is there something out there that could turn a fissure into a crack?

EGAN: Well, I do think that people are watching the bond market a bit nervously. We've seen people pile into ultra-safe U.S. Treasury. So, prices

have gone up. The yield has gone down. It went down below 1.3 percent today. We haven't seen that since February.

I mean, when you think about that, back in February, most people hadn't even had the opportunity to get vaccinated. That was long before Joe

Biden's American Rescue Plan got through Congress. So, it is surprising that we've seen the bond market react that way.

[15:05:10]

EGAN: And I do think that could make people a little bit nervous. There is a little bit of a vicious circle there. But we also have to remember, there

is a lot of people who have been waiting on the sidelines to get into this market.

Every day, they see it go up and up, seemingly hit a record every day, and I think that is one of the reasons why we've seen the market cut its

losses. I mean, earlier this morning, Dow futures were down almost 600 points. It took a bit, but we've seen them bounce back. If things stays

like this, they won't be closing at the low, so there are some bargain hunters out there -- Richard.

QUEST: And there will be more. Thank you. Good to see you. Nice to see you back in. Thank you.

Now, the Chief Executive of AllianceBernstein is telling me the recovery won't be straight forward by any means. I spoke to Seth Bernstein earlier

and he reminded me, the situation for investors continues to be, in -- these are his words, quite unpredictable.

(BEGIN VIDEOTAPE)

SETH BERNSTEIN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, ALLIANCEBERNSTEIN: Very little is linear in a recovery like this. We've never been in this

kind of context with unprecedented monetary support, fiscal support that I couldn't have imagined two years ago.

And so, it is quite unpredictable and it is no surprise people are concerned about inflation, just by virtue of what the government has done

so far to avoid the pitfalls of the pandemic.

QUEST: And yet, just about everybody to a person says that the inflation such as it is, is not going to be sticky. It is not going to hang around.

The argument being, we know where it is coming from and it is not of concern. Do you buy that?

BERNSTEIN: I think it is more complex than that. I think that there are transitory effects, base effects from last year, which I agree are

transitory. I think the critical question, Richard, for all of us is, what gets built into expectations?

If we continue to see food and energy prices rising for an extended period of time, people are going to start building that into wage expectations,

and that is going to find its way into inflation.

Ultimately, we're not all that alarmed by it. The Fed needs inflation. It needs it badly, and so, to the extent we got to 2.5 percent or three

percent over the next couple of years, I don't think that that would cause the Fed to stop priming the pump.

QUEST: But the rest of the world -- Latin America, Africa, large parts of Southeast Asia, they are not going to recover as fast, at least not until

vaccinations reach there. And I'm wondering, the ability of the U.S., which is a huge economy in its own right, but the ability to thrive and grow and

the markets to grow, if the rest of the world is still mired in COVID woes.

BERNSTEIN: I think you're right. Longer term, the emerging markets will have a hard time catching up. I think Europe's recovery is slower and more

intermittent than we would have anticipated by virtue of rollout of the rollout of vaccinations.

So, I think this is an issue that is not going away anytime soon. It is going to be fitful.

QUEST: What investment strategy should one follow at this point? Which is like saying, how long is the piece of string? But if -- you know, there

seems to be a consensus rightly or wrongly that there are still good gains to be had between now and the rest of the year.

If that is the case, what is the strategy you're following?

BERNSTEIN: I think you stay invested. You're not smarter than the market. We're not going to collectively figure out when to exit and reenter at the

right times. People need the compounding of the value.

Ultimately, U.S. equities are priced to perfection. We know that. U.S. fixed income yields are, you know, near historic lows and spreads are even

at historic lows in different elements of the market.

So, we would be sitting comfortably where we are which is basically neutral.

QUEST: Finally, we got through other side. Where do you stand on the working from home? Are you Morgan Stanley? Get yourself in the office or

are you Google and Facebook, work from home if you want to.

BERNSTEIN: Look, this is an issue that we -- and I suspect everyone else was facing slowly because we couldn't hide behind the fact the technology

didn't work. The technology worked incredibly well. Everything worked remarkably well, despite the fact no one was in the office.

But the fact of the matter is, culturally, this firm -- I think the financial services industry in general, was not built by people who were

great people managers. It was built by people with inspiration, people who have a fascination with investing.

We hired people because they were brilliant at trying to do things others of us didn't see or were the best salespeople in the world.

[15:10:10]

BERNSTEIN: We didn't hire them because they were great managers. And I think working remotely forces to us address this issue right now, because I

can't wind this back up for my people. And the truth is, we're price takers of talent.

So no, we're not forcing people into the office in a regimented way. What we are doing is we are being more flexible about it. Two days off, three

days in the office. But we're trying to make sure we're creating structure around each function, which is integrated and gets all of our people

engaged.

So, it is a work in progress.

(END VIDEOTAPE)

QUEST: Seth Bernstein, a work in progress, but stay invested.

Olympic fans planning to attend this year's games are going through disappointment. They won't be allowed inside Tokyo's venues as the city's

state of emergency continues.

(COMMERCIAL BREAK)

QUEST: Tokyo is once again under a state of emergency and that means no fans will be allowed inside its Olympic stadia and arenas. Protesters in

the country are urging the government to cancel the Olympics altogether as COVID cases surge.

For now, fans will only be banned from the Tokyo venues. They will be allowed at event in other parts of the country. Just about two weeks before

the games, and the organizers apologized for this sudden and rapid change of plans.

(BEGIN VIDEO CLIP)

SEIKO HASHIMOTO, TOKYO 2020 PRESIDENT (through translator): Those people who are looking forward to seeing the competition, ticket holders, this is

a sorry message that we have to announce. I am very sorry for these people who will be disappointed. But in order to prevent the spread, this was the

choice only available for us to take. I hope that you understand the difficult choice that we make.

(END VIDEOTAPE)

QUEST: Will Ripley is back in his old stomping grounds. He was a correspondent for many years in Tokyo. Besides that, it is also 4:14 in the

morning, I believe. So, kudos to you for that as well.

Now, look, isn't this a statement of the obvious now? The situation in Tokyo probably doesn't merit the Olympics taking place, but they are going

ahead with it anyway.

[15:15:10]

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: At least for now. I mean, there is mounting pressure globally and certainly domestically here in

Japan for them to just pull the trigger and cancel this thing, but they have invested so much.

There is television advertising to think about. Sponsorships to think about. And so, it seems as if, they are just plowing ahead with holding

with games, bringing in thousands of athletes and trainers and foreign delegations from hundreds of countries in a matter of days and weeks to

hold these events, but they are acknowledging the fact that there is a delta variant that is spreading quickly, that is more contagious, highly

contagious.

And so they -- even though they wanted to have spectators in the stadiums, they even lowered the state of emergency level, of course, they're now

raising it back up. It will be Tokyo's fourth state of emergency since the beginning of the pandemic. They are going to hold these events in these

beautiful venues that were built, that they spent billions of dollars on, with absolutely nobody in the stands watching exempt for VIPs and sponsors

and that sort of thing.

QUEST: Now, we are going to talk about sponsors in just a second. But to a certain extent, they are authors of their own misfortune, in the sense that

the vaccination -- the speed of vaccination to get to 50, 60, 70 percent, I mean, the number is distressingly low in Japan for a G7 country.

RIPLEY: It is. And part of that was because of simply the bureaucratic headaches that have plagued Japan's pandemic response from the beginning.

It was months into the COVID-19 pandemic that Japan stopped telling doctors to handwrite and then stamp and fax documents in to report test results.

And even now, they don't have enough people to administer shots because they require only doctors and nurses to be able to do it, even though it is

relatively simple to train people to actually give a vaccination, and then you also have vaccine hesitancy as a factor, although certainly as people

around the world are seeing, countries like the United States with higher percentages of their populations vaccinated and life getting back to

normal, that is certainly appealing, not to mention the terrifying scenario of an even more contagious variant developing in places like here in Tokyo.

Imagine the delta variant combining with others, you know, doctors say that could be a really, really nightmare scenario. So now, people in Japan are

getting vaccinated at the rate of around one million per day, but it was not easy getting here and they just got to that vaccination rate relatively

recently.

QUEST: And Will, I see the First Lady of the United States, Dr. Jill Biden is deciding whether or not she will attend. I guess others will attend.

Because, I mean, at the one hand, they want to support their national teams, if you are representing the head of state. But on the other hand,

you don't really want to be in an empty stadium, sort of making -- rubbing salt in the wound to real fans who couldn't go.

RIPLEY: Yes. And these are people who had to enter a lottery, to spend in some cases more than $1,000.00 for their tickets. So, could you have the

IOC members and foreign dignitaries and sponsors, sitting and kind of clapping and hearing their own echo in the venue? That absolutely sounds

possible. It sounds very surreal and frankly quite sad.

I mean, Japan, you know, spent big on the Olympics hoping they would bring this tourism boom. That people would fly from all over the world and see

all these beautiful new -- you know, the new stadium that was built in Tokyo and then travel out into the hinterlands and spend their money and

rediscover Japan as this global destination.

And instead, the reality is that you have these big structure that are going to be sitting empty. Most people in Japan don't want the Games here,

because not only can they not go to the events and watch themselves, but they feel that they are running the risk of getting sick as a result of all

of these visitors coming.

QUEST: Will Ripley at 4:00 in the morning. Thank you, sir.

The prospect of those empty stands, the clapping reverberating around a few people, and the number of rising cases, not surprisingly, sponsor are

getting cold feet. Companies have already begun scaling back ad campaigns in Tokyo according to Reuters.

The top Olympic partners, these are the ones you're seeing on the screen. Billions of dollars to fund the games.

Now, in the past, it was a deal absolutely worth making. Companies banking on those Hollywood moments. The star athletes performing at their world

class best in front of rapturous crowds in corporate logos all beautifully framed.

The present, far more murky. For instance, Toyota expressing concern about the public frustration and worry that the athletes will become targets. The

fear is, this is the future.

Nervous athletes, jittery sponsors, and not a soul in the stands. The IOC undeterred. Its Executive Director told me last week, the Olympics are

worth it.

[15:20:10]

(BEGIN VIDEO CLIP)

CHRISTOPHE DUBI, IOC OLYMPIC GAMES EXECUTIVE DIRECTOR: This is world united behind their colors, their uniforms, their music, their pride, and this is

priceless.

To see that, to see the athletes coming in as one is something that is absolutely unique. Then of course, we do it for the athletes. But we do it

for the symbolism of having the whole world together in Tokyo on the 23rd of July. And yes, it is most definitely worth it.

(END VIDEO CLIP)

QUEST: Sir Martin Sorrell is with me, a man who has negotiated more deals of these sorts of natures than most of us in terms of sponsorship. He is

the Executive Chairman of S4 Capital, former head and founder of WPP.

Martin, if you were advising a company who had sponsored the Tokyo Games, what would your advice be?

MARTIN SORRELL, EXECUTIVE CHAIRMAN, S4 CAPITAL: I would still go for it, Richard. I heard a little of your piece before. I might sound a bit horse,

it is because I was at Wembley last night for the Denmark game and I'll be there on Sunday. And so, live sport events, Richard, are particularly

driven as a result of the pandemic and post of the pandemic have become even more important and even more motivating.

So, I think you're being a bit unduly cynical if I could say so, maybe, a little too cutting about the Games.

Obviously, it has been affected and Tokyo will be affected and has been affected by the pandemic and I would guess that Beijing, the Winter

Olympics next year, will start February of next year, will also be affected, but when one looks longer term and the top sponsors that you

referred to, Richard, of which there are about 15, if my memory serves me right, a lot of package goods companies, but a lot of tech companies, too.

And I think you will see more tech companies embrace the IOC and the Olympics in coming years around Paris and L.A., and we will probably have -

- or we will have Brisbane in 2032. So, the prospects for the Games over the coming years, I think is strong.

You're right, I think, in saying that there will be some turbulence, if I can put that it that way, around Tokyo, and understandably so, given the

pandemic. There will be some turbulence around Beijing as well for other reasons, too. But I think long term, top sponsors really do get significant

value.

At a local level, Richard, for them to rake about $3 billion in Tokyo from local sponsors, I think that's where the turbulence will be the greatest.

QUEST: Would you change --

SORRELL: Because that will impact those.

QUEST: would you change the messaging that you would be putting forward in somewhere like Tokyo? Because getting that balance right, because there are

athletes who are still there, who are doing a phenomenal job, and we want to celebrate that. But at the same time, be in tune with what's happening

in the rest of the world.

SORRELL: Well, I think, we will be in tune. I think NBC, of course, who will be doing the broadcasting will slow on their coverage, if I can put it

that way, away obviously from the audience because the stadia will not have spectators, and will focus on homes in how the Games are affecting people

positively, I think you can see at home and abroad and how the athlete's families, for example, are reacting to the performance.

So, I think you will see a very different games. The window will be on the world and its impact on people at home.

You know, you see it here with Euro 2020, which is effectively, Euro 2021. It's had had a massive impact, a very significant -- the run that the

English team have had has had a very significant emotional impact on the population.

Interestingly, I had a note from Germany today saying, a depressing note about Euro. But that was probably because the Germans got knocked out

fairly early in the competition. But the performance is critically important, but I think you're being unduly negative.

There will be short term issues, but long term, the Olympics have been around for 125 years. It is an extremely strong brand and it will continue

in my view with modifications. So, I other thing I should say is the online impact of the Games is going to be huge.

You will see what we have seen with the pandemic, and in our business, at S4, it has accelerated all the digital trends and the digital

transformation that we saw before, you will see that with the Games, too. It will be a much more digital event and will be much more modern in that

sense.

[15:25:15]

QUEST: Right. I want to ask you finally, I am asking all CEOs this. How do you feel on this question of hybrid working from home or office as you're

building out S4. Now, in the old days at WPP, you might have had more of a -- be in the office. Be in the office.

You know, the mad man with a variety --

SORRELL: I may be 76, Richard, but I'm not in the command and control school. I don't believe that just people can go to a restaurant, they

necessarily have to come into the office. We will be hybrid. We will be about 60 percent, I would say, Wednesday, Thursday -- sorry, Tuesday,

Wednesday and Thursday, maybe in the office.

We'll probably be 60 percent utilization of pre-pandemic. We'll have more distance working, more varied commuting, and more flexibility. That's what

I think the modern workforce is looking for. We can monitor productivity online. We can monitor -- it hasn't suffered in the pandemic.

QUEST: So you haven't gone soft, Martin. You haven't gone soft.

SORRELL: No, no, Richard. It's not about command and control. The world has changed. Maybe you haven't noticed, Richard.

QUEST: Good to see you, Sir Martin, thank you, as always. I hope the family is all well. Thank you, sir.

Now, a change in quarantine rules has Britons rushing to book holidays. The floodgates have opened, and one caution, a major caveat to our dear

viewers, to you. If you are fully vaccinated and thinking of visiting Britain, hold your horses. Don't book the tickets. You may not or most

certainly not be involved.

(COMMERCIAL BREAK)

[15:30:00]

(MUSIC PLAYING)

QUEST: I'm Richard Quest. There's more QUEST MEANS BUSINESS in a moment.

We'll assess England's new travel rules for benefits -- who stands to benefit and, more importantly, those of us who don't.

And the CEO of Amtrak tells me how Joe's trillion-dollar infrastructure plan could revolutionize the rail industry. They call him Amtrak Joe,

that's the president, by the way. We'll talk about that in a moment.

This is CNN and, on this network, the news always comes first.

(MUSIC PLAYING)

QUEST (voice-over): Police in Haiti say they have six people in custody in connection with the assassination of the president. Among them, a man the

election minister says is believed to be a U.S. citizen. The chief of police says they are looking for the masterminds behind the operations and

the authorities have called the public to help in the manhunt.

President Biden says the United States has achieved its objectives in Afghanistan by degrading the terror threat that led to 9/11. The president

defended the U.S. troop withdrawal, saying America was never there to nation build. The president says the military mission will end on August

the 31st.

The former South African president Jacob Zuma has handed himself over to the police hours before a deadline passed. Last week, the constitutional

court sentenced him to 15 months in prison for contempt of court. On Friday, a high court judge will rule on whether to release him pending a

hearing on July the 12th.

(MUSIC PLAYING)

QUEST: Some 4,000 scientists and health care workers are condemning the British government's plan to fully reopen the country on July the 19th. The

letter, in the medical journal, "The Lancet," is calling it a dangerous and unethical experiment.

Meanwhile, government officials are sticking to their timeline, estimating that 100,000 people a day could come down with COVID this summer. That

would surpass the previous peak. One of the doctors who signed the letter explained to us the possible impact.

(BEGIN VIDEO CLIP)

DR. CHAAND NAGPAUL, COUNCIL OF THE BRITISH MEDICAL ASSOCIATION: We have got about 400 people in the U.K. fighting a -- on a ventilator, fighting for

their lives. And we had less than half that number a month ago. So it is increasing.

The other issue today is, just because you're not in hospital doesn't mean you're not ill. And we have, as I said, about one in 10 people suffering

long-term effects of COVID and that's not good for the economy if people are off work, off sick.

(END VIDEO CLIP)

QUEST: Now the U.K. government says it will ease restrictions on international travel. British Airways and easyJet says they're seeing a

huge increase in bookings, easyJet said up to 400 percent to take account of the change in quarantine rules.

However, this only applies to U.K. residents who live in England and have been fully vaccinated within their National Health Service as well as

children. The nuts and bolts are from July 19th. Those people will no longer have to quarantine when returning from countries on the so-called

amber list, which is most of them, by the way.

The change does not apply to visitors who have been vaccinated elsewhere. So let's look at this. Say you're an Italian, vaccinated in Italy and you

want to go to England on holiday. You have to quarantine even though you're fully vaccinated because the U.K. is not recognizing the European digital

passport so far.

And even if you're a British citizen living in Spain, for example or, indeed, a British citizen living in the United States, where I got my two

shots of Pfizer, and if I want to go back to Britain, I still have to quarantine on arrival in England, for the full whack, with tests on day

one, day two, test and release on day five and test on day eight.

Nina dos Santos, I will not be coming to London soon to buy you coffee.

NINA DOS SANTOS, CNNMONEY EUROPE EDITOR: Oh, that's a shame to hear, Richard. But at least we can talk about this and bemoan the complications

of these different systems from where we are in our respective parts of the world.

The reality is that, yes, the government is coming under increasing pressure from Britons who want to travel abroad but also from the

international travel agency that has been -- industry that's been on its knees for quite some time.

And the reality is what the government also wants to try and do is extol the virtues of its vaccination program to champion this, because this has

been the big gamble and big success for this government.

[15:35:00]

DOS SANTOS: Grant Chaps (ph), the transport secretary, made it clear in announcing this change of legislation, which, by the way, comes hot on the

heels of repeated announcements about removing those COVID restrictions from the health secretary earlier on in the week.

We also had the prime minister at the start of the week and then the education secretary as well. All of these different ministers trying to

signal that the U.K. is now -- has now vaccinated the lion's share of its people. It is likely to have vaccinated, they hope, or at least offered two

doses of the COVID-19 vaccine to all adults by the autumn.

And so they're starting to remove those last vestiges of COVID-19 restrictions. But for travelers, as you were just pointing out before, it

is --

(CROSSTALK)

DOS SANTOS: -- a landscape that's fraught with difficulties. Even if, for instance, you got two shots of the COVID vaccine here in the U.K., you

might not necessarily be able to be allowed into some of those amber list countries.

QUEST: And are there any -- are there any talks about putting -- you know, I mean, inbound tourism is on its knees because of this.

So are there any thoughts of reducing the restrictions?

And for example, once more, the famous U.K.-U.S. corridor.

DOS SANTOS: Well, so far, I'm not sure that there are anything -- that there's anything concrete to talk about as yet. But the reality is, this is

the pressure is on, isn't it, Richard, as we know because obviously France has started to welcome vaccinate U.S. tourists. Other destinations as well.

And so this is one of the big questions. And it is a big thing for those airlines as well, isn't it, Richard, because the transatlantic travel

corridor is the most profitable routes. It is also extremely important for business tourism as well.

When you speak to many international hospitality bosses and airline bosses, as you do on a day-to-day basis, you will know that what are they're saying

at the moment is that domestic tourism is the first thing that's going to be rebounding. Then they hope tourism will rebound this summer.

And then of course, you know, the last thing is probably also going to be business tourism, which -- for which that international corridor,

particularly across the Atlantic, is going to be crucial.

I want to come back to one quick thing that you mentioned in your introduction as well and that is the backlash here, the U.K. against the

lifting of all of these COVID-19 restrictions. That also includes this one that has been announced with regard to quarantining as well, Richard.

You know, we've had this raft of removals of restrictions that are going to be out in theory on July the 19th. But before that, we have got a big

soccer championship that's happening in a day's time.

People are starting to not comply with some of these rules. So the government is also very, very aware of that. What they want to do is try

and lift things, give people a breath of fresh air, if you like, before, of course, they get concerned about those numbers spiking as we go toward the

fall -- Richard.

QUEST: Nina, thank you.

Shares of Volkswagen and BMW closed more than 2 percent down in Frankfurt. The carmakers were fined $1 billion by the European Commission, saying the

companies colluded with Daimler to try to hold back the development of technology that could have reduced harmful emissions. Clare is with me and

following this story.

Now this is -- how is this related -- or is it related to Dieselgate and the whole business of gerrymandering the filters?

CLARE SEBASTIAN, CNN CORRESPONDENT: It's not related, Richard. This is a separate issue but obviously very sensitive to the carmakers because of the

history of alleged emissions cheating and the many, many billions in fines that Volkswagen in particular has had to pay.

This is different. This is related to E.U. competition law. And it is sort of new territory. This is what Margrethe Vestager, the E.U. competition

commissioner said.

She said, "This is the first time the commission finds that cooperation on technical elements, as opposed to price fixing or market sharing, amounts

to cartel behavior." What she has alleged in this investigation started several years ago. Is that over a period of about five years, between 2009

and 2015, which, by the way, overlaps in some of those Dieselgate years, that these carmakers -- this is BMW, Daimler and VW, whose (INAUDIBLE)

include Audi and Porsche -- that they got together and they held technical talks over issues of how the technology used to clean up the emissions in

their exhaust.

And in the course of those talks, they agreed not to compete on improving those technologies so that that wouldn't be an issue that would be

something that lured consumers to one of them or another.

She said that amounts to cartel behavior. The carmakers not at all happy. Volkswagen have said it's considering an appeal and they point out, both

Volkswagen and BMW, that this doesn't matter, in a sense, because they never actually complied with what they agreed to in those talks. They ended

up actually improving the technology in their cars anyway -- Richard.

QUEST: Clare Sebastian, thank you.

In a moment, Amtrak Joe. The president is well known for his love -- or use, I should say, maybe -- of the train. He's making a big promise to the

train company. The chief executive of Amtrak on how he will benefit from Joe Biden's infrastructure plan.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

[15:40:00]

(MUSIC PLAYING)

QUEST: In today's "Call to Earth," we explore the extraordinary world of seahorses. Amanda Vincent is on a lifelong mission to protect these tiny

creatures from the threats that they currently face.

(BEGIN VIDEOTAPE)

(MUSIC PLAYING)

AMANDA VINCENT, SEAHORSE CONSERVATION EXPERT (voice-over): I think the first time you ever look at a seahorse, you're fascinated by them. They're

almost mythical.

UNIDENTIFIED FEMALE (voice-over): Fabled fish of the ancient gods and now an aquarium favorite, meet the tiger tail, the hedgehog and the pigmy, some

of the 46 species of seahorse that scientists have struggled to identify due to their expertise in camouflage, which helps them avoid predators.

VINCENT (voice-over): They change color when they court. They form permanent pair bonds. The male and female come together and dance every

morning. I mean, these animals are the coolest fish. They really are.

UNIDENTIFIED FEMALE (voice-over): One predator that seahorses haven't been able to avoid is humans. Their habitats in coral reefs, sea grasses and

mangroves across the world are increasingly under threat.

VINCENT (voice-over): The biggest single threat to seahorses is bottom trawling every day. Hundreds of thousands of trawlers scrape the ocean

bottom and they remove everything in their path, leaving devastation behind. And it's annihilation fishing, pure and simple. And it has to stop.

UNIDENTIFIED FEMALE (voice-over): Amanda Vincent is a marine conservationist and one of the leading experts on seahorses.

VINCENT (voice-over): I think I loved seahorses the moment that I discovered only the male gets pregnant. There's just something about that

that grabs you.

UNIDENTIFIED FEMALE (voice-over): She spent over 30 years studying these tiny creatures with big personalities.

VINCENT (voice-over): We usually tell people not to touch a seahorse if you see it. But I've had to touch them in my professional work. And it is

riveting. You tickle their little tails.

[15:45:00]

VINCENT (voice-over): And they let go of whatever they're holding and they grasp your hand instead.

I mean, when did you last have a fish hold your hand?

It's just a feel -- an instant surge of connection with this animal.

UNIDENTIFIED FEMALE (voice-over): Vincent co-founded Project Seahorse in 1996, a conservation and research organization, which campaigns for

stronger regulations on fishing practices and wildlife trade.

They have succeeded in changing national and international legislation to help protect seahorses and established 35 marine protected areas in the

Philippines, home to 10 species of seahorse.

During her research, Vincent uncovered a huge global trade in seahorses, a popular ingredient in Chinese medicine worldwide, including in her native

Canada.

VINCENT (voice-over): We tallied it up to be 20-30 million animals a year among about 80 countries. It was huge. In terms of the number of individual

animals traded, it is one of the biggest wildlife trades by far. So it was really important to take action.

We then generated the first-ever export controls on marine fishes. That led to a lot of countries actually closing down their seahorse trade legally.

UNIDENTIFIED FEMALE (voice-over): After a lifelong crusade against harmful fishing methods, Vincent is always on the lookout for sustainable

alternatives. And she finds it here in a village in Vancouver.

VINCENT: Hey, you've got (INAUDIBLE) prawns.

UNIDENTIFIED FEMALE: We have live (INAUDIBLE) prawns.

VINCENT: They're caught by traps: no habitat destruction, no bycatch of other animals. They're the only shrimp I ever eat.

So when were these guys fished?

UNIDENTIFIED FEMALE (voice-over): Questioning where your seafood comes from is one way to help protect marine life, Vincent says.

VINCENT: If you can avoid eating anything connected with bottom trawling, you will have done a great service to the ocean.

(MUSIC PLAYING)

UNIDENTIFIED FEMALE (voice-over): And for Vincent, serving the ocean means making us fall in love with these mysterious mythical creatures.

VINCENT (voice-over): I find that, when you talk seahorses, everybody cares. Essentially, we're using seahorses to help save the seas. If we get

it right for these funky little fishes, we will have done a lot for the ocean.

(END VIDEOTAPE)

QUEST: Gosh, that's absolutely wonderful to watch, at least the seahorses, not the effects. But it does bring it home what we all need to do.

Let us know what you're doing to answer the call. #CallToEarth.

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(COMMERCIAL BREAK)

[15:50:00]

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QUEST: What an evocative sound across the Heartlands, the East and the West Coast of America, the sound of an Amtrak train whistle. Well, President

Biden is hoping to live up to his name of Amtrak Joe, spending billions on railroad infrastructure, staking his legacy on his bipartisan

infrastructure plan.

The White House wants to make the economy more sustainable. In Illinois Wednesday, the president made it clear, it will create jobs.

(BEGIN VIDEO CLIP)

JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: Last week, I was up in Wisconsin to talk about a bipartisan agreement to modernize American

infrastructure and in the process, create millions of good paying jobs. That's not my estimate. That's Wall Street's estimates. That's everybody's

estimates, millions of good paying jobs.

(END VIDEO CLIP)

QUEST: The plan sets aside $66 billion for passenger and freight rail development. The president said it is the largest invention in Amtrak since

it was created. Joining me now, is the CEO of Amtrak, Bill Flynn.

So pleased that you're with me, joining me from Washington. At the end of the day, whether it is $66 billion or $45 billion, I've seen numbers in

between, what are you going to spend it on?

BILL FLYNN, CEO, AMTRAK: Good afternoon, Richard, great to be back with you again.

It was great to hear from President Biden. We celebrated Amtrak's 50th anniversary on April 30th. And President Biden led that celebration in

Philadelphia. We have a few key areas to invest in in Amtrak. And I think it is a transformational period of time.

We have core infrastructure needs, bridges, tunnels and stations. We're investing in rolling stock and -- in particular and we're also investing in

growth. And between those three elements, really, that is the opportunity set for to us transform, grow Amtrak and grow and roll in our nation's

mobility strategy.

QUEST: What do you see as the core role?

For example, it is always said that Amtrak would love to get rid of them but they can't. The famous ones, the New Orleans ones, the big -- the

California ones that go across country. They're great for tourists but they don't do much else. But you concentrate on the commuter rails, the

northeast corridor.

So where do you see that growth?

FLYNN: So it's a really good point. There are three elements of our service. Our northeast corridor is about 50 percent of Amtrak's passenger

ridership. Washington to Boston, 20 percent of our population live on that corridor. And it is certainly a core element of what we operate.

And that's where our infrastructure needs are the greatest. We operate 27 services we call state supported. Our customers are the various states. The

states contract with Amtrak that operate along corridors, ranging from 100 miles eventually up to 700 miles. Our longest corridors would be Chicago to

the Twin Cities or the corridors that we have in California from San Diego, up to Los Angeles and beyond.

And the long distance services, as you mentioned, our 50 longest in services, which are historic services but they provide essential service in

many of the communities we serve are not otherwise served by inner city transportation.

Limited inner city rail -- sorry, limited inner city air transportation, that has been reduced over a period of time so there is strong support for

Amtrak to continue to provide these services. So it is really all three.

QUEST: You've got great support now with the president.

Do you believe you can get high-speed rail?

In the sense that we talk about it in Europe or in Asia because that's what you need if you grow the network but make the cities come closer.

FLYNN: Yes, we absolutely believe in high speed rail and our strong high speed rail supporters. I lived in Japan in the mid '90s and I was a regular

customer on Japan rail. Where that worked best is where corridors are done (ph).

Washington to Boston is an example of where high-speed rail works and will work very well. The newest selling train sets that we're taking delivery

of, will have an operating speed in some corridors of 186 mph, have higher speeds.

They will operate along that corridor, side by side with traditional regional rail services that operate at a slower operating speed but make

many more stops. High-speed rail makes fewer stops over a corridor so there are indeed big corridors across the country where high-speed rail will make

a big difference. We're a supporter of that.

But our view is that high speed rail needs to be developed in combination with and along corridors where traditional rail also is --

[15:55:00]

(CROSSTALK)

QUEST: All right.

FLYNN: -- a service. So one feeds other, exactly what happens in Japan and Germany and France.

QUEST: Bill, next time we take QUEST MEANS BUSINESS on the road -- we've done it before with California -- which is your favorite long-distance

route we need to take QUEST MEANS BUSINESS on?

Which is the best you think we need to go and see?

FLYNN: We should go on the Empire Builder. You have to love that name. Riding across the northern part of the United States through several of our

key national parks, Glacier National, et cetera, you've got to love that one, Richard.

QUEST: We'll -- you will join us. But we will certainly take QUEST MEANS BUSINESS on the Empire Builder I love the sound of it.

FLYNN: A great name. We have to get you on there.

QUEST: We will. Thank you, CEO of Amtrak joining us.

We will take a profitable moment, an empire builder profitable moment after the break.

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(COMMERCIAL BREAK)

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QUEST: Tonight's profitable moment, gosh, I am conflicted when it comes to the Olympics. Part of me says they are barking mad irresponsible, foolish,

bordering on criminally negligent to be holding the Olympics at a time when COVID cases are rising, the Delta variant is there and vaccinations aren't

high enough.

The other part says, no, of course, we must have the Olympics. Life goes on. Those athletes, the best in the world, already are older by a year

because it didn't happen last year. This could be their only chance.

And then I think, well, yes, competing in an empty stadium, where you can just hear the echo of a few people applauding. So what do I come down to?

It's you and me that have to make the most of it. We have to recognize life goes on, the Olympics will take place. They'll take place in very difficult

circumstances to protect people from COVID. And we still cheer on those men and women who have done their best and will reach pinnacles the likes of

which you and I can only dream about, sitting in an armchair having a drink.

That's why I say, yes, let the Olympics take place. May the games begin.

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. The market is down but don't worry. Whatever you're up to in the hours

ahead, I hope it is profitable. We are off the lows of the day.

END