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Quest Means Business

Corporate America Ramps Up Vaccine Requirements; Amid Government Pressure, E.U. Catching U.S. in Vaccine Race; Robinhood Down after IPO Debut at Lower Range of Valuation; Israel Offers Third Vaccine Dose to Over 60s; U.S. Economy Recovers Pandemic Losses; U.S. Real Estate Boom. Aired 3- 4p ET

Aired July 29, 2021 - 15:00:00   ET

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

[15:00:21]

RICHARD QUEST, CNN BUSINESS HOST: With an hour to go before the closing bell and there is the possibility of records for all three of the major

indices in this last hour of trade, whether we do or not, I'm not sure. These are the markets as they are trading.

Look at that. The Dow is just barely up, 1.4 is the number, so perhaps not for the Dow. The other three may be a little bit closer. Those are the

markets, and these are the main events of the day.

Get a jab to keep your job. Corporate America is now stepping up, demanding COVID vaccine mandates.

Israel says it will offer a third dose of the vaccine to its over 60s.

And not a very merry start for Robinhood on the NASDAQ. The shares fell as much as 10 percent before they rally. You'll hear from the Chief Executive

on this program.

We are live in New York. It is Thursday. It is July 29th. July nearly finished. I'm Richard Quest and I mean business.

Good evening. Tonight, the latest numbers show for the first time, the United States is starting to fall behind the European Union in the race to

vaccinate its population. As a result, Corporate America says, enough is enough with this slow vaccine, and whether it is your boss or your

government, it now seems that someone is demanding you get vaccinated and whether it happens depends on where you live.

In Europe, the vaccine mandates are coming from governments like France and Greece that have put them in place. They are controversial, but the data

shows that when these mandates are introduced, more people go and get vaccinated.

It's a different story or has been so far in the United States where the private sector is increasingly stepping in. Companies are requiring

vaccines for employees and in some cases, customers. The Federal government is getting in on the act, too, with Joe Biden expected to make an

announcement about some sort of requirement for Federal employees to be vaccinated in the next hour.

From Silicon Valley to Hollywood, hospitality to Wall Street, executives in H.R. Departments are telling people get vaccinated or face the consequences

in their strict testing, unpaid quarantine, even termination.

Matt Egan is with me. Let's start first of all, we've already had New York City and several of the cities who demanded that had healthcare workers and

employees and that's often hundreds of thousands of people, be vaccinated or have regular testing. The Federal government is going to do something

similar, but it is corporations, Matt Egan, that is pushing this hard.

MATT EGAN, CNN BUSINESS SENIOR WRITER: Yes, Richard. This does feel like a key moment in the pandemic. Corporate America is clearly getting frustrated

with how some employees still have not gotten vaccinated, and after months of merely suggesting or encouraging that their employees get vaccinated,

some businesses are now demanding it. The message is, step up and get vaccinated or get out.

We've heard in just the last few days from some major Silicon Valley companies, Google and Facebook, they're saying employees have to get

vaccinated if they want to come back. A similar message from other major companies including Netflix, Blackrock, Morgan Stanley, The Durst

Organization, which is a New York City real estate company, they are saying that employees are actually going to get fired if they're not vaccinated by

Labor Day.

And the goal here of course, is to make the vaccinated employees more comfortable with going back to work. But also, to boost vaccination rates

before even scarier variants come around.

QUEST: The legality of it is somewhat questionable at the moment, although there does seem to be a view that you can fire people provided you don't

transgress the Disabilities Act, the Civil Rights Act and all of these other things.

But really, it is about which employer wants to be seen to be mandating that somebody gets a vaccine.

EGAN: Right. It is a tough question for companies to answer. Now, from a legal perspective, the Federal government is signaling that yes, they

believe that it is in fact legal for private companies to require their employees to get vaccinated. To your point, there are some exceptions

around religious exemptions and disability ones.

And so far, the people who are fighting this in court, they haven't really had much luck.

[15:05:10]

EGAN: But to your point, Richard, this is not happening in a vacuum. I mean, there are sort of enforcement and just -- it is a messy situation if

you're a company and you're trying to mandate this.

And let's not forget, there is a war for talent right now. There are record number of job openings in the United States. A lot of companies, they can't

afford to lose or demoralize the workers that they have.

QUEST: Well, I could argue the other way around. You could also say, in your talent search, you could say to people, come here, we are a fully

vaccinated company. So I guess it is sort of -- yes, go ahead.

EGAN: Yes, well, I mean, you're right. You could use this as a way to attract the best talent and say, listen, this is a safe place to work and I

think you'll hear that from some companies.

QUEST: Matt Egan joining us. If you want a real life example of how this plays out, Danny Meyer runs Union Square Hospitality, a major presence in

New York City's restaurants. He says his restaurant staff must be vaccinated within 45 days or they'll lose their jobs.

And by the way, if you're a customer, if you're not vaccinated, eat elsewhere.

(BEGIN VIDEO CLIP)

DANNY MEYER, FOUNDER AND CEO, UNION SQUARE HOSPITALITY GROUP: Look, in a city that has got 26,000 restaurant, if you want to smoke, you're welcome

to do that somewhere else, and I would say the exact same thing here.

If you want to go unvaccinated, you could you dine somewhere else and you can also go work somewhere else. I really hope that the small number of our

employees who have yet to be vaccinated will say, I actually like this place even better because they cared about me.

(END VIDEO CLIP)

QUEST: Kathryn Wylde is the President and CEO of the Partnership for New York City, a group of top CEOs from New York-based companies. She joins me

tonight from Puerto Rico.

Kathryn, this is a tricky one. Nobody wants to be seen to bully force somebody to have a vaccine, but at the same time, I'm getting the feeling

that CEOs have had enough. Enough is enough. Get vaccinated or get out.

KATHRYN WYLDE, PRESIDENT AND CEO, PARTNERSHIP FOR NEW YORK CITY: I think that is true, Richard, but it isn't at the expense of the health and safety

of their work force and part of that is the stress associated with forcing people to do something they don't want to do. And we've got a very diverse

work force in New York City.

Ninety percent of the professional office employees are vaccinated according to our reports and the feedback we get. So, this is a situation

where you've got communities and clusters of people in the city, large numbers, who almost half our population is not fully vaccinated. We've got

just under a 60 percent vaccination rate right now.

QUEST: But what --

WYLDE: And so we've got -- we have -- the problem is not in the professional workplace or work force. The problem is much more diverse than

that.

QUEST: Okay, but here in New York, that problem, if the work force is -- professional work force and in time, the wider work force is vaccinated, it

could be the customers. It could be those people going to theaters and restaurants eventually. It could be those Americans from the rest of the

country who refuse to be vaccinated that when they come to New York, I see your wry smile there, when they come to New York, that they are the ones

who are told, I'm sorry you can't eat here. I'm sorry you can't visit this museum. I'm sorry you can't do that. You're not vaccinated.

WYLDE: And that is exactly the case. We are having requirements of vaccination for theaters, for public venues, for the big celebration the

mayor is going to have in August in Central Park. Those are going to require that people come vaccinated.

And most employers are requiring vaccination or testing to come back to the office, but they are not firing people who are not. And that would -- it

does get into, as you mentioned earlier, some issues of potential discrimination charges, particularly when the Federal government, the

F.D.A. has still not finally approved the vaccines.

So, you're taking a real risk as an employer if you're telling somebody you have to have a vaccine and someone has a bad reaction to it, who is liable?

As you know, the Federal government here refuse to pass any liability protections for the private sector employers. So, they're looking at this

as a public health matter for everything else during COVID where we've had a public health issue, the Federal government has set the guidelines and

set the rules.

QUEST: Kathryn, okay, so Kathryn, so you've got an employee work force that is predominantly vaccinated. You've got somebody who refuses to be

vaccinated, first of all, it could be an ADA, American against Disabilities Act. It could be a religious objection.

But ultimately, it could just be, I don't believe in the vaccine. The first two create legal difficulties, the third arguably, you should be able to

fire. Is that the way you look at it?

[15:10:03]

WYLDE: No, because the vaccine has not yet been authorized as finally approved. We're still under emergency utilization.

QUEST: Oh, come on. Kathryn, that's semantics. When you've got tens of millions of people who have taken it, it is -- I say a sematic point, a box

ticking that they haven't gone to that next stage of giving authorization.

WYLDE: Well, if you talk to the communities and the people most concerned and are afraid to get vaccinated, they're saying, they've read, they've

heard on social media that this is not finally approved and they are correct.

So, it is pretty hard to argue that we have got a sure thing until the F.D.A. acts and we are told it could be as long as January before that

happens. And in the meantime, the Federal government is now starting to move, why didn't we as soon as the vaccines became universally available,

there should have been a mandate that everybody get vaccinated.

I was a polio pioneer in the '50s, so we all got vaccinated.

QUEST: Kathryn, I was as well, and was, the little sugar cube with the vaccine. I doubt whether they still do that, but they probably got

something more sophisticated work, that wouldn't probably work now.

Good to see you, Kathryn. We'll talk more. Thank you.

QUEST MEANS BUSINESS, tonight, the online broker that says it is bringing the market to the masses has gone public itself. It is Robinhood trading on

the NASDAQ. Did they price it well? We'll talk after the break.

(COMMERCIAL BREAK)

QUEST: In the next hour, Joe Biden is expected to announce vaccination requirements for all Federal workers, or instead, they have to submit to

regular testing. The United States is lagging behind Europe in terms of vaccinations.

Look at the numbers. Partially vaccinated, the U.S. 56 percent, the E.U., 58 percent. Fully vaccinated, the U.S., 49 percent; the E.U. 48 percent.

But the E.U. can be expected to soon overtake as it introduces stricter mandates from European governments.

For instance, in Italy, healthcare workers and pharmacists have faced vaccine mandates since March. At the end of August, French workers in bars,

restaurants, and theaters will be required to be vaccinated, mandatory for healthcare workers as of October.

[15:20:03]

QUEST: In England, it is care homeworkers who will need to be vaccinated by October and patrons of nightclubs and large venues will need proof of

vaccination by the end of the summer. In Greece, nursing home staff and healthcare workers face a vaccine mandate by September.

Christos Staikouras is Greece's Finance Minister. The Minister is with me from Athens. It is good to see you, Minister, as indeed always.

We'll deal with the economy and those issues in a moment. Let's deal with mandates. Are you in favor of the widest possible mandate to cover

government employees and private sector workers to get them vaccinated?

CHRISTOS STAIKOURAS, GREEK FINANCE MINISTER: First of all, thank you for inviting me, Richard. We have to admit that in Greece, the vaccination all

around is quite successful. Already, we will have fully vaccinated five million people.

At the same time, we are taking concrete actions in order to enhance this process. So, for example, as you mentioned before, we have mandated all

Greek healthcare and social care workers to be fully vaccinated, and at the same time, we have introduced a policy whereby only vaccinated people can

be served at indoor cafes, restaurants, and bars.

At the same time, we have created incentives for younger people in order to be vaccinated, that I think, we are following a holistic approach.

QUEST: Right, but do you think that this holistic approach is going to have to become harder and harsher with those, first of all, those people who

don't want to be vaccinated. Secondly, those tourists who arrive who aren't vaccinated. You're basically going to have to say, if you're not

vaccinated, there is a consequence.

STAIKOURAS: We have taken significant actions, as I mentioned before, but at the same time, we have very efficient process regarding testing and

tracing system. So in this case, if you combine the vaccination process with the testing and the tracing system, we think that we will keep

visitors safe, and a low hassle, free travel to Greece.

QUEST: I want to talk if I may about the redevelopment funds. The multibillion investment funds and the redevelopment of the Olympic Athletic

Center of Athens that you're going to be putting money towards.

It is appropriate we talk about it, since the Olympics are underway at the moment. This stadium that you're putting money into, it has never made

money. Since 2005, it has created losses of seven million. It has cost you hundreds of millions. Why are you putting valuable redevelopment funds into

what is arguably an albatross that will never make money?

STAIKOURAS: Because first of all, we have proved in the last two years that we can attract investments and make valuable approaches. One of these has

to do with a development with a sustainable development, as you mentioned before, of the Olympic Athletics Center of Athens.

In this case, we will put some money as a state from the budget, 40 to 30 million euros, and at the same time, the private sector will add 150

billion euros. We expect that after a couple of years, at the end of 2023, we must create 1,400 permanent new jobs. We will create the first class

sporting arena and at the same time, we will enhance the environmental footprint of our culture.

QUEST: The 31 billion or so that Greece will get from the E.U.'s post- pandemic fund, the recovery fund, given its title, this is an opportunity that governments will rarely, if ever, get again and the money can't be

wasted.

How aware are you that this is a once in a lifetime opportunity?

STAIKOURAS: We know that, and at the same time, I would like to inform you that today, Greece was the first country to conclude the partnership

agreement on cohesion for the period 2021-2027, of the size of 21 billion euros. Twenty one more billion euros, 77 billion euros is the whole

envelope until 2027, and we have created an excellent government statute. We are proactive in designing our plan as advanced maturity is a

prerequisite for the project to be included in the envelope.

At the same time, the IRF is a performance based plan, thus maximizing our motivation to meet all milestones and targets.

QUEST: Minister, I'm grateful you've given us time. Thank you. We'll talk more as the year moves to see where you stand. It is good to see you as

always. Thank you, sir.

STAIKOURAS: Thank you.

[15:20:06]

QUEST: Now, the markets have a half an hour left of trading on Wall Street and they are up. The Dow had appeared to be heading toward a record close.

It still lost a bit of steam. I've got the number somewhere, it is still up as you can see over 172 points. It needs to be up more than 210 to set a

fresh record.

Wall Street's latest debut got off to rocky start. Robinhood priced at the bottom of its range. It is now around -- it is now down some five percent.

Now, that suggests pricing reflecting the difficulties the company faces.

Before its debut, its CEO, Vladimir Tenev told CNN it is fair to call the company's IPO pricing conservative. Robinhood tried to stay users of its

trading app towards its IPO. It has reserved 35 percent of the flow of shares for customers.

Clare Sebastian is at the NASDAQ. Let's talk first of all about, it is only down five percent. Bearing in mind the difficulties, regulatory, the public

perception, blah-blah-blah, bearing in mind that, I suggest, Clare, they price this right.

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Richard. I think this shows that going for the bottom end of the range was probably the right

call here. But they didn't get that coveted, or, I mean, there is still a half an hour of trading left, but so far they have not had the coveted IPO

pop that everyone is looking for. That is something that they want from a PR perspective, even if it means raising less money in the IPO.

This is something that by the way, so far this year, the average first day return, according to Professor Jay Ritter of the University of Florida, the

average first day return of an IPO stock this year, not including SPACs is 33 percent, and only about a quarter of them have fallen on the first day.

So, not the best news for Robinhood, but as you said, the lead-up has been problematic. Two new regulatory investigations disclosed in the days before

this IPO, and I think the question on the minds of investors, Richard is given the frenzied trading that we have seen over the last year and a half,

and some of the sort of idiosyncrasies of the business model here, not just the payment for order flow, but the fact that 17 percent of their revenue

comes from crypto, and of that, about a third from Dogecoin, I think people are asking, can they see the same levels of growth that they have seen the

last 18 months?

QUEST: All right, do we have any numbers yet or when would we get numbers on how many people, how many Robinhood users bought shares as part of the

IPO? Do we know?

SEBASTIAN: We don't know, Richard, until either the underwriters of the company tell us. We have asked, they haven't told us yet. We know the range

was between 20 percent and 35 percent. You can't really tell what's going on from just looking at the trading today. But certainly, this was

something that was very important to Robinhood to try to not only democratize the markets as they feel that they have been doing, but also

democratize the IPO process.

They would be doing this through the IPO access feature on their app, something that they rolled out in April, so I think this will be an

important test case of how that sort of plays out in the markets.

QUEST: Clare Sebastian at NASDAQ with Robinhood down five percent. Thank you.

Much of the uncertainty ahead of this IPO stems from the Chief Executive, Vladimir Tenev. He isn't licensed with the Financial Industry Regulator

Association, and he tells CNN he doesn't think it is necessary. He won't take the test if it is not required.

Before the market opened in New York, Julia Chatterley spoke to him about how Robinhood reached this milestone.

(BEGIN VIDEOTAPE)

VLADIMIR TENEV, CEO, ROBINHOOD: Over the past year, you can see how much the company has grown, not just in leadership, but also in things like

customer support, you know, launching phone support, and all sorts of different channels, improving the way we serve our customers, including our

infrastructure and technology, really building the foundation for our future growth, and the products that we will be launching in the future.

JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: And we'll talk about that. Let's talk about pricing first, because a lot of people looking at

this and saying, you're being a little bit conservative perhaps on the pricing. We know as well you're giving a huge chunk to retail investors,

too, to uses of the app itself. Why? Tell me your thinking here as we go to market.

TENEV: Well, first of all, I think the pricing is a moment in time, and we have -- I think, it is accurate to say it is conservative and we are happy

that retail customers which make up such a big part of our allocation and really are the cornerstone behind our business and product are able to get

in at this price.

CHATTERLEY: And you're however keeping the lion's share of control? You have ten times the voting share in the shares that you're holding versus

the ones that you're giving to these people. What is the message that you're sending there?

TENEV: Well, the thinking behind that is we're a long-term focus company, and a lot of bets that we are making are long term bets and we believe that

the voting structure positions us well to be continuing the focus on the long term and keep innovating and avoid short-term distractions that can be

so tempting in the public markets.

[15:25:00]

CHATTERLEY: What are you expecting in terms of performance today? You said it is -- and you're quite right that the pricing of this thing is a moment

in time. Are you hoping for a pop, given as you've said, it is conservative pricing that you're going in with.

TENEV: I think that you'll find that Robinhood as a public company isn't going to comment too much on day to day price fluctuations. I think we are

going to be relentlessly focused on the long term, as we have been in the past.

And as I think it was Benjamin Graham who once said, over the long run, the markets are a weighing machine, so we would like to be a heavy company over

the long term, so to speak.

CHATTERLEY: And some would respond to that and say, you've been part, a good part, actually, of allowing people access to financial services and

young people in particular. But also provided to some degree at times, being some part of the volatility.

You've been asked questions in recent days about your own registration by regulators, the FINRA regulators. When you look back over that crazy meme

stock trading time, do you think you could have overstepped the line in terms of decisions you were making and the conversations you were having?

TENEV: Well, to be clear, I'm the CEO of Robinhood Markets, which is a holding company and we have a number of regulated businesses that are at

the entity level under the holding company.

So Robinhood Financial is an introducing broker dealer, Robinhood Securities, a clearing broker deal. Of course, we have Robinhood Crypto.

And each of these businesses have their own leadership license where required and we think that structure is reasonable, given our business

CHATTERLEY: Are you tempted to do the exam? Just do the exam and shut everybody up.

TENEV: We don't think that's required at this point and --

CHATTERLEY: Okay. You will do it when Jack Dorsey does it. Is that the message?

TENEV: Maybe.

(END VIDEOTAPE)

QUEST: We'll take your maybe and we will take it to the bank. Julia talking to the CEO of Robinhood.

Israel is extending its robust vaccination campaign. It is offering a third booster shot, but of course, in doing so, it has raised the question, does

everybody need to have a third booster shot? If one is good, two is better, three, that's your boost.

(COMMERCIAL BREAK)

[15:30:00]

(MUSIC PLAYING)

QUEST: I'm Richard Quest. QUEST MEANS BUSINESS. We have more in a moment.

Israel's prime minister says all people over 60 will be offered a third vaccine dose. And that is a potential sign of things to come for the rest

of us.

A smoking giant is planning to go smoke-free. The CEO of Philip Morris tells us why they plan to stop selling cigarettes in the U.K. by the end of

the decade.

Before that, we have the news. Here on CNN, the news always comes first.

President Biden is to call on U.S. states to offer newly vaccinated people a one-off payment of $100. He is due to speak in half an hour or so.

Vaccination rates in the country have slowed and he's expected to announce that all federal employees must be vaccinated or face regular testing.

The former cardinal Theodore McCarrick is facing criminal charges for the alleged sexual assault of a minor. It happened nearly 50 years ago and

involved a 16-year-old boy. He was defrocked in 2019 after a Vatican trial found him guilty of sexual abuse.

The U.S. gymnast Suni Lee has won the Olympic gold medal for the women's all-around final. She competed without the reigning champion, Simone Biles.

(MUSIC PLAYING)

QUEST: As many countries are struggling to get their population vaccinated once, Israel is now planning to offer a third vaccination shot to some

fully vaccinated older people. It is based on new data that suggests there's a significant waning of immunity over time. The Israeli prime

minister said they were following the science.

(BEGIN VIDEO CLIP)

NAFTALI BENNETT, ISRAELI PRIME MINISTER: The decision was based on considerable research and analysis as well as the rise and risk of the

Delta variant wave. Israel has already vaccinated 2,000 immunosuppressed people with a third dose with no severe adverse events.

Now we're rolling out a national third dose campaign. We'll share with all the information we have with the rest of the global community as we make

progress. Thank you.

(END VIDEO CLIP)

QUEST: Dr. Saad Omer is director of the Yale Institute for Global Health and joins me now.

Right. Well, this is a game changer from a country that led the way, vaccinated more people than anybody else in a shorter period of time.

Is this a warning that the rest of us are going to face booster vaccines even before the booster may have changed its composition?

DR. SAAD OMER, DIRECTOR, YALE INSTITUTE FOR GLOBAL HEALTH: Well, I think it is worth paying attention to but it doesn't necessarily mean, at least not

as yet, that we are looking at boosters in all countries. And here's the reason why.

Israel has a good data system. They have had good studies that have come out of that country. But their data are different. And their estimates of

vaccine effectiveness in different age groups under this variant are different from the U.K. and even the U.S.

Even the U.K. and the U.S. data show that there is a decline in vaccine effectiveness against any symptomatic infection. But the U.S. and U.K. data

do not document a decline against severe disease; whereas, in Israel, there has been a documentation of decline against severe disease, not too much

but still perceptible in those over 60.

That's why they're moving based on their own data. But it is not, therefore, other countries.

QUEST: All right. But this is serious stuff because in the U.S., you've got a large part of the population who hasn't even been vaccinated once. Now

there's the threat that -- or the thought that you would have to be vaccinated two or three times. And surely, this is just going to sow

greater confusion over what the vaccination validity is.

OMER: Absolutely.

[15:35:00]

OMER: So these are the things that require a robust, clear communication response in addition to an epidemiological response. And unfortunately,

many countries have lacked in that kind of clear communication response.

So absolutely. Leaders will have to explain explicitly that it means that the armor we thought was impenetrable remains very strong. But it is now a

little bit penetrable. So therefore we are supplementing with it some reinforcements.

QUEST: Right. But here is my COVID-19 vaccination pass from the New York authorities. You'll be familiar with it. It expires on the 17th of October.

Now is this a warning to me, do you think, that on the 17th of October, I'm suddenly more liable and I should really get a third booster?

Or is this just telling me that this is useless after the 17th of October?

These are the sorts of real-life, everyday confusing issues that people are facing.

OMER: Absolutely. I think that was a bit unnecessary to have a such short expiration date, if you will. So from my perspective, you know, when these

cards were issued, especially there wasn't evidence and even now we don't know that, all of a sudden, like Cinderella, everything will turn into a

pumpkin in October. Absolutely not.

We do know, as I said, there is -- people are watching the data. And there may be a consideration for a booster. There are a couple of issues there.

Look, I think there is evidence for a booster for immunocompromised individuals, before we have evidence for the elderly or older individuals

in the U.S.

So there is a stronger case for that group. So I think, you know, I expect to see, hope to see movement in that direction first. Remember, this raises

a lot of issues in terms of equity not just within countries but between countries as well.

QUEST: Absolutely.

OMER: So there have to be those considerations in terms of decision calculus.

QUEST: Good to have you, sir. We'll talk more as this progresses. We'll need your guidance and help.

Housing prices are becoming a hallmark of the post pandemic recovery. They're going up in markets around the world. Where and how much in a

moment.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

[15:40:00]

(MUSIC PLAYING)

QUEST: More than a year after lockdowns ground the U.S. economy to a halt, the output in the economy in the U.S. has finally recovered to pre pandemic

levels. GDP 6.5 percent in Q2 compared to the same period last year.

Of course, there was no activity as you can tell. So that's not difficult to do. The worrying part is, it is well below many economists'

expectations. Paul La Monica joins me.

Q2 was when the lockdowns began and things were at their worst. There should have been a better performance.

Why was there not?

PAUL LA MONICA, CNNMONEY DIGITAL CORRESPONDENT: Yes, I think, when you look deeper at the numbers, I wouldn't be that concerned. The positive is the

consumer spending surge.

That is a good sign that consumers are back out in full force. Where we saw some of the weakness, if you want to call it that in this report, the

numbers are still good, you have supply chain issues, which are widely known, impacting inventory, and labor shortages as well.

So those are the biggest drags on that level of growth and why we probably were a bit slower than expected. But make no mistake. This is a robust

recovery led by consumers. Yes, it may not be as strong as hoped for but, even there, somewhat perversely (ph) there is a positive sign.

This is another reason for the Fed to hold steady and not make any drastic moves with regard to tapering or eventual rate hikes.

QUEST: DiDi is up 30 odd percent on the prospect of going private. That is a fairly drastic 10 percent. That's a fairly drastic maneuver to go private

after only going public so recently.

Do you think they will come off the exchange?

LA MONICA: For what it's worth, DiDi said in a release today that the reports are incorrect and they're not looking to go private. But that being

said, I think Beijing will probably exert more pressure and maybe they go private so they eventually can go public again; but in Hong Kong, not New

York.

QUEST: Oh, interesting prospect. Paul La Monica, thank you, sir.

One segment of the U.S. economy is booming, housing. A leading index has found that U.S. home prices were up nearly 17 percent from the year before.

The Federal Reserve chairman Jay Powell said Wednesday the housing sector remains very strong.

He said before that Fed policies contribute to higher home prices. It is not just the United States. The IMF data shows double digit year on year

growth in Turkey and Luxembourg. Prices are sharply rising along in Croatia, Germany and Austria.

Ryan Schneider is with me, CEO of Reology, who joins me now.

Good to have you, sir. This is interesting because when we were -- I was just talking about the GDP numbers. This time last year, Q2 and Q3, worried

about this; people couldn't find renters. People moving out of cities.

And would you say it is a 180-degree turn?

RYAN SCHNEIDER, CEO, REOLOGY: It is. Thank you for having me on the show. Q2 last year was an historic decline in housing. The market here in the

U.S., the market was up 50 percent. We were up 80 plus percent as we gained some market share. And the housing market has been quite strong.

Consumer demand for housing is high and it is obviously one of the bright spots of the economy.

QUEST: Right.

But is the rising tide lifting all boats?

Or are places like New York, which did have a lot of people move out, are they still lagging?

Don't get me wrong. There is a recovery underway but it is not as great in housing prices -- it is not equal across the country.

SCHNEIDER: You're absolutely right. Places like Florida and Texas, some of the attractive tax and weather destinations, the suburbs, they are on fire.

New York City has gotten back to positive growth in Q2 of 2021 but it is still lagging the rest of the country.

So it is definitely not evenly distributed. But it is substantially up compared to a year ago. And the early demand for July, that we reported

this morning, remains strong, which makes us excited for the rest of the year on housing still.

QUEST: Right.

But are we seeing, do you think -- my words, not yours -- irresponsible lending yet?

Are we seeing promiscuous loans being made, which ultimately will come back to bite the market?

SCHNEIDER: Absolutely not is my belief. Our mortgage business has not changed their credit standards throughout this. And I said in my earnings

call this morning, unlike 15 years ago, the consumer demand for housing right now is real. It's real consumer demand.

It is not the speculation that led to a lot of the challenges the U.S. market had 15 years ago. It's real consumer demand, as people are working

from home, moving to different locations because of that, moving to place like the suburbs -- Texas, Florida, in greater numbers.

And as someone who was in banking for 15 years before joining real estate, I'm incredibly passionate about us keeping our good lending standards.

[15:45:00]

QUEST: And this relationship between working from home, you know, we're going through this issue, a very real issue. We're going through it now, if

you like, of companies deciding who they'll let work from home, the hybridization of the work environment.

Could this have an effect?

If companies insist that workers are back in the office -- now the commercial real estate people will be delighted -- will that have an effect

on house prices?

Will it take the froth?

SCHNEIDER: It could. But my prediction is it is not. We are an exactly of that. We as a company had a couple percent of people working from home

before the pandemic started. Post Labor Day, we're going to be substantially work from home as a company and going to continue on push

very hard on that.

And we see it happening with a lot of companies. And we think it is a trend that is here to stay.

QUEST: Finally, I know you don't want to force anybody to do anything they don't want to do.

But where do you stand and where does Reology stand on vaccine mandates?

I'll take away the word mandate in case you find that a pejorative.

Where do you stand on requiring your employees to be vaccinated?

SCHNEIDER: The health of our employees, agents, franchisees is the number one thing. We don't have a vaccine requirement yet. We have a number of

health and safety requirements and we're watching the situation very closely.

QUEST: Good to see you. Thank you, sir.

A tobacco giant is calling for a ban on cigarettes. It is a rum business.

But is it only so that we will divert attention from other issues?

The chief executive of Phillip Morris will be with me after the break.

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QUEST: Shares in the tobacco giant Philip Morris are up 2.5 percent this week. The company announced it is preparing to win sales for the product

that made it famous. With brands like Marlboro and Chesterfield, now the company says it is planning to stop selling cigarettes in the U.K.

altogether by 2030.

Tobacco giants have had to amend themselves many times over in the past century. Remember these sort of adverts. They are great to watch if you

like but a sign of the times of a previous age, when they ads to tout the lifestyle, even the health benefits of smoking.

Well, the world is wiser now and of course public health experts warning about the dangers has only grown. Some say the latest announcement is a

signal of the beginning of the end for smoking in countries like the U.K. And yet, U.K. health organizations are saying it is an empty promise.

[15:50:00]

QUEST: Jacek Olczak is the CEO of Philip Morris International, joining me from Switzerland.

You've heard all the arguments. You've heard them a million times. I won't put them to you.

If it is so good to stop smoking, why not stop selling cigarettes now?

JACEK OLCZAK, CEO, PHILIP MORRIS INTERNATIONAL: If we stop selling cigarettes now, I don't think the problem will go away because they have

our competitors, suppliers, et cetera.

What we have in mind that the time is coming that we can seriously think about comprehensive solutions to smoking. You have products, technology,

science, evidence that there are alternatives to smoking.

Smoke-free alternatives are vastly better and I believe it is time to accelerate what we want to do over smoking.

When I make the declarations that we are ready to pull off the Marlboro cigarettes and a number of our brands in the U.K. in 10 years, I mean it.

I've heard the comments that people are saying this is lip service, et cetera.

Thirty percent of my revenue already is coming from smoke-free products. I have markets today, when the more of revenues are coming from smoke-free

products than combustible cigarettes.

(CROSSTALK)

QUEST: So to clarify, what you're talking about is an acceleration of the elimination of the thing you put in your mouth and that sends smoke out.

You're not talking about, you're still intending -- you're still going full throttle, if you will, on the vapes, on all the other nonsmoke alternatives

that's now you're putting more investment into.

OLCZAK: Absolutely. The best advice we can give to the smokers today is to quit. But we also know that men and women don't quit.

And the question is, can we offer them today scientifically proven better alternatives?

And the fact is that these products do exist. Technology exists to make them available and the science exists to prove that the products are

better, despite some critics which continuously try to confuse smokers that the alternatives are equal or worse than the cigarettes.

And the result is we actually --

(CROSSTALK)

QUEST: But is this not a case -- sorry, I mean, I don't want to take us into "Alice in Wonderland" territory.

But is this not a case where you're saying is, smoking is very bad so we'll stop doing that and we'll go instead get something that isn't quite as bad

but still isn't very good.

OLCZAK: Oh, the products are not risk-free but they are vastly better than continuing smoking. If you're talking about the product where the science

are proving the products are reducing exposure to the most deadly intoxicants by 90 percent to 95 percent.

Let's be serious. It is a vastly better product. The alternative is people will continue smoking the products as they are today. So we are operating

with the reductions, which is well recognized in other product categories.

What I am saying today, that we can accelerate solving the problem of smoking, at least by offering the alternative. But if we don't do it,

people will continue smoking. So we can be serious and have these conversations, how do we solve the problem, rather than what I am afraid,

perpetuating smoking cigarettes, which, is, frankly speaking, bad for everyone.

QUEST: Can I turn to vaccines and vaccine mandates?

We are taking the opportunity when we talk to CEOs of particularly large companies like yours with many employees, you can't really avoid this.

Never mind smoking issues. You have to decide whether you're going to require, across your various jurisdictions, employees to be vaccinated.

Where do you stand on this?

OLCZAK: I mean, we have been promoting vaccinations in our facilities in many countries. We facilitate access to the vaccine. My personal

reflections is that while a few months ago everyone was worried, would we have enough vaccines, now the problem is will we have enough people willing

to take vaccines.

And it is a serious problem. So I encourage it. It is absolutely appropriate if we want to solve the problem soon or go another three years.

QUEST: But are you prepared to go -- everybody is using the same language, encouraging this, wanting that, hoping for this. We're at the point of

forcing or mandating or putting adverse consequences if you don't get vaccinated.

Are you prepared to do that with your employees?

OLCZAK: Well, I'm prepared to encourage. I don't think asking a business, forcing people or employees to take vaccines is appropriate. I think this

is for health authorities in jurisdictions to issue such orders. I think people are trying to escape a little bit the responsibility.

[15:55:00]

OLCZAK: You go to the business and you say a business should force people to take a vaccine?

I don't think it is appropriate. But I am doing everything I can to popularize them, to facilitate the vaccines and encouraging people to take

it. But I don't have the power to say to my employees that you have to take it.

(CROSSTALK)

QUEST: No, but you --

OLCZAK: -- institutions who -- which can do it.

QUEST: But you have the power to say, if you don't take it, you have to wear a mask. You have the power to say, if you don't take it, you'll be

tested twice a week and you have the power ultimately to say, if you don't take it, we'll part company.

OLCZAK: Absolutely. Yes. We have full power of imposing restrictions, hygienic restrictions, et cetera with every employee when they return to

the office, they feel safe. This I can do it.

But I cannot force anybody to take it. They might have considerations, et cetera. I do believe that competent authorities should be showing

guidelines, what is expected, rather than trying to move the ball from one table to another. And the problem is, you know, not solved until today.

QUEST: We will talk more, sir. Very grateful you came on QUEST MEANS BUSINESS tonight. Good to see you. Thank you.

And we will take a "Profitable Moment" after the break. QUEST MEANS BUSINESS.

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QUEST: Tonight's "Profitable Moment": I don't agree with him but I can see the argument of those who say they don't want to be vaccinated because

they're for religious reasons or they don't believe in the vaccine or whatever. As I say, I don't agree with them but I understand their views. I

can see it.

What I don't understand is those who say they don't want to go back to wearing masks because of the Delta variant. And they were promised they

wouldn't have to and it is all, the vaccines haven't worked as they were supposed to.

I don't understand it. I don't get it. It makes no sense. It reminds me of that saying, I think it was John Maynard Keynes; it might have been

Churchill.

When the facts change, I change my mind.

Why, sir, what do you do?

The reality is the facts have changed. The Delta variant, we now know more about the length of the inoculation and its efficacy and we now need to go

back to wearing masks in certain situations.

It doesn't mean we were lied to. It doesn't mean we were given incorrect information. No, far from it. It merely means that the facts have changed

and we have to go back to something we thought we had not had to do before. Remember, when the facts change, I change my mind. Why, sir, what do you

do?

And that is QUEST MEANS BUSINESS for tonight. Whatever you're up to in the hours ahead I hope it's profitable.

END