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Quest Means Business

White House Tells OPEC To Bump Up Oil Output; Wall Street At Records As Price Rises Slow, Inflation Fears Cool; Democrats Propose $3.5 Trillion Budget Plan, Aggressive Climate Policy; Paris Saint-Germain Unveils New Superstar Lionel Messi; Hackers Steal $610 Million In Cryptocurrency From Poly Network; Hawaii Public Places To Have Indoor Capacity Halved. Aired 3- 4p ET

Aired August 11, 2021 - 15:00   ET

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

[15:00:04]

RICHARD QUEST, CNN INTERNATIONAL ANCHOR: There is 60 minutes left of trading in the midweek. Version of the trading day, the Wednesday version,

a record-breaking day for the Dow and the S&P 500. There were records last night, they're up today so that they will be a record as well.

Not so far, the NASDAQ, the market is up strongly. We'll get to the reasons why.

The main events of the day are behind much of what's happening. The White House is telling OPEC pump more oil, if not the global recovery could be in

danger.

China's riff with Canada has grown deeper, as it sentences a Canadian businessman to an extended term in prison.

And after the biggest crypto heist of all time, hackers are returning some of the money. Yes.

Now, we're live in New York on Wednesday. Midweek, it is the 11th of August, nearly the Ides of August. I am Richard Quest, and I mean business.

Good evening, the White House has warned high oil prices is putting the global economic recovery at risk. The U.S. President is pressurizing the

world's biggest producers to urgently boost supply.

The President's national security adviser, Jake Sullivan, has said "OPEC must do more to support the recovery." The U.S. is engaging with relevant

OPEC+ members on the importance of competitive markets in setting prices.

A long, long way from a year ago, then, as you can see from the graph, the conversation was all about negative oil. Since Brent crude has roared back

to more than $70.00 a barrel, it is adding costs as economies come back to life.

At its meeting in July, OPEC agreed to increase output by 400,000 barrels a day. Joe Biden says that's not enough.

(BEGIN VIDEO CLIP)

JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: We're taking action to address gas prices as well. Today, gas prices are lower than they were

early in this decade. But they are still high enough to create a pinch on working families.

We also made clear to OPEC, the major oil exporting nations of the world that the production cuts made during the pandemic should be reversed as the

global economic -- as the global economy recovers in order to lower prices for consumers.

(END VIDEO CLIP)

QUEST: Dan Eberhart is the CEO of Canary Oil, one of the largest oil companies in the U.S., a major donor of the Republican Party joins me now.

Dan, look, I can't see that OPEC is suddenly going to turn the spigot on. They're terrified of a sudden fall in prices, the likes of which we saw

last year. Now that might not be possible, likely. But OPEC recently said it's happy with where the situation is.

DAN EBERHART, CEO, CANARY OIL: Well, the OPEC is happy, they've got control back. But what's worked -- what's got Biden caught afoot here is we've got

a roaring economy, we've got all this stimulus money, and we've got ever increasing inflation, and this is a toxic brew for rising energy costs.

Plus, not to mention the green initiatives coming out of the Biden administration, all this resulting in an oil price that's getting carried

away with itself and continuing to rise.

OPEC is where it wants to be in the driver's seat. They can harvest profits after a bad 2020, and all this is happening at the expense of consumers

right now.

QUEST: Okay. But the U.S. shale production or non-traditional production, which is sensitive to market prices, if the price rises, then more wells

will come on stream. The U.S. was the de facto swing producer going into the crisis.

EBERHART: Yes, so the U.S. was producing in February 2020 about 13.2 million barrels a day. Right now, they're producing just over 11 million,

so we haven't completely brought production back, and we've got soaring prices.

So, I think we've really got a demand constraint -- or a supply constraint about to hit us in the face, unless this delta variant takes the worldwide

economy down a notch.

QUEST: Yes, hang on here, but let's stick with the U.S. for one second. That discrepancy between the 11 million give or take today, and the 13

million at peak, it begs the question, why hasn't U.S. production come back on stream to take it to that same level as the price has risen and market

forces have done that work?

EBERHART: Because I think -- well, number one, demand has come back stronger than the oil companies anticipated and that's a result of the

economic stimulus and the economy being strong. Number two, I think the oil companies are waiting.

The shale producers are waiting to see if OPEC puts their production back and they want to be the second people to put the production back so they

don't -- the U.S. doesn't put production back and then OPEC does and prices crash. Shale and OPEC are aligned in not wanting to oil price to crash

again in 2021.

[15:05:02]

QUEST: So, if we look at OPEC, and we're talking about OPEC+ really here, and the ability for countries like Russia to go along, look, it took a lot

to get the cuts. Saudi doesn't want to put too much back in again for its own budget deficits and its own budgetary problems. I'm guessing, OPEC is

happy where the price is, and is not going to listen to what the President is saying, or at least take much notice, other than pay respect.

EBERHART: Yes, I don't think OPEC cares very much what Joe Biden says. If anything, they might consider it a bullish indicator. And look, OPEC is

putting between 400,000 to 500,000 barrels a month back onto the market. So, they are slowly getting back into the system. But look, they very much

don't want to see a price crunch here.

QUEST: Dan, hand on heart, I mean, this idea that the White House is calling saying OPEC with high oil prices could be jeopardizing the global

recovery, it sounds a bit hyperbole to me, in the sense that we have lived with oil prices at $100.00 and $110.00 in the past. We've seen them down at

$20.00 to $30.00, even negative in unique circumstances. $70.00 sounds about right.

EBERHART: Yes, no, I think it's a good price where oil companies can make some money and where the consumers aren't completely bent over backwards

and where it is hurting the economy. Look, quite frankly, I think this is Biden looking for political cover, looking for a scapegoat, you know, while

he tries to get this green energy initiative through, which is pushing up energy costs for consumers.

He wants, you know, the sweet part of that, but doesn't want to be blamed for the energy costs that consumers are bearing right now, frankly.

QUEST: Dan, good to have you. From Phoenix, Arizona, where I'm sure it is absolutely boiling hot. I mean, it is hot enough in New York, I can only

imagine the sort of 100-plus temperatures you've got there.

Thank you, sir. I appreciate it.

The markets, they are higher. The triple stack shows exactly what we're talking about. We had a record last night. So ergo, we've got records

tonight for the Dow and the S&P, not so for the NASDAQ. That is off on other concerns.

U.S. consumer prices have eased the rapid rise. Last month, we saw a gain of half of one percent, so things are getting more expensive. What we're

talking about here is the rate of increase is slower. Prices aren't going down. They're just not going up as fast. That's the cooling effect some

feared for the loose Fed policy. The economic recovery and massive spending programs in Washington, the Fed being of course at the perfect storm with

inflation.

Now, the White House is touting these numbers as a win and says inflation shouldn't stop more spending to boost the economy. So, is inflation sticky?

Is inflation to be a worry or like the Fed believes, will it fall back?

Over the last few weeks, the economists we've spoken to on QUEST MEANS BUSINESS have had mixed views on the stickiness of inflation.

(BEGIN VIDEO CLIP)

MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISOR, ALLIANZ: I believe that inflation will prove less transitory than the Federal Reserve. I believe that we are

in the midst of an inflationary process. It is not the 70s and the 80s, but it is three to four percent inflation that will last for much longer than

most people expect.

TYLER GOODSPEED, FORMER CHAIR, PRESIDENT TRUMP'S COUNCIL OF ECONOMIC ADVISERS: When we look at where prices have really risen in recent months,

it has been in things like lumber, it has been in things like used cars, that is likely to be transitory, in fact, and it's already starting to

dissipate.

But as those transitory factors begin to dissipate, I think there are a few other shoes yet to drop.

RONALD O'HANLEY, CEO, STATE STREET: As long as inflation remains transitory and doesn't get baked into wages, which of course, evidently what the Fed

is seeing -- is not seeing any evidence that's being baked into wages. I think, they're going to stay the course.

KRISTALINA GEORGIEVA, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: At this point, what we see is primarily transitory factors affecting

inflation. In other words, we have pent up demand, and we have big disruptions in supply and they put pressure on prices.

(END VIDEO CLIP)

QUEST: The consensus largely is that the inflationary fears will abate. But unfortunately, for the politicians, Democrats are seeking to pump another

$3.5 trillion into the U.S. economy on the heels of the United Nations Code Red report this week of the warming planet.

The Senate budget plan includes massive provisions to remake U.S. climate policy. The investments are aimed at meeting the President's goal to reduce

carbon emissions by 50 percent, and for the power grid to get 80 percent from emissions free sources.

Evan van Hook is Chief Sustainability Officer at Honeywell. He joins me from another stonkingly hot place at this time of the year, New Mexico.

What's the temperature today in New Mexico?

EVAN VAN HOOK, CHIEF SUSTAINABILITY OFFICER, HONEYWELL: Well inside, it's a balmy 64 degrees and it seems like I don't get out of the conference room

very often. So, outside it's probably hitting a hundred at least.

[15:10:01]

QUEST: At least. So, let's talk about the two aspects. First of all, the manual's point of view. First of all, let's deal infrastructure. The new

infrastructure bill, Honeywell, I mean, you don't build bridges, you don't sort of have earthmoving equipment, but you are the technology that goes

into them. And you are the advanced smart technology that goes into the roads and the bridges that are being built. So you will benefit from this.

VAN HOOK: Absolutely. In general, we are very supportive of policy choices that sort of push the economy towards that carbon neutral environment that

we think is coming. You mentioned briefly the recent U.N. report, which was indicated as a Code Red. Another report, I think that is interesting is a

U.N. report that warned of catastrophic climate developments, very little time. And that report was published back in 1987.

So, I think the fact that that most recent U.N. report indicates that now things are really critical, leads us to believe that yes, we do have to be

going towards a carbon neutral set of conditions. And so we believe that anything that the infrastructure bill can do to do that is a good thing,

and Honeywell has a lot of technology that can help support that.

QUEST: The carbon pledge of Honeywell is long and complicated, and I understand, Evan, that this is not a subject that leads itself once you're

dealing with changes necessary, it doesn't lend itself to soundbites, I get it. However, every company has its policies and everybody is doing

something. So why is the situation so bad? The reality is, we're not meeting our targets.

VAN HOOK: That's absolutely correct, Richard. As I indicated, the U.N. obviously has known about the risks of climate change for decades, and

Honeywell started decades ago to start to confront this issue, both from an internal operations perspective and from a product's perspective.

We started our sustainability program back in 2004. And to date, we are more than 90 percent more greenhouse gas efficient than when we started.

And to me, that's a strong indication that this can be done.

We've also had a huge focus on this in our products. About 50 percent of our R&D on new products goes to products that improve environmental and

safety outcomes. That's a huge focus for us. And about 10 years ago or more -- yes, I'm sorry.

QUEST: No, no, I just wanted, I guess, I hear what you say. My problem is, I suppose, in this very industry program, we've got the President call --

and I'm not making a political point for you to follow on from, but the President is calling for lower oil prices, so that the global recovery

isn't endangered.

We've got oil prices that are high, which suggests one other thing. We've got a U.N. report saying we have to move further and faster from fossil

fuels, which we need so we don't have -- so we can have a recovery. It's not -- I know, it's not easy, but at the same time, I'm confused.

VAN HOOK: It is a knot that needs to be untangled, and I do believe that part of the answer comes in that fact that we've known about this for a

long time, but we haven't really started to do the things that we need to do to make the transition. And so, there's always going to be that interim

period. You can't just snap your fingers and get from here to there.

We spent about 10 years working on one of our biggest innovations, which is a low global warming potential refrigerant propellant, which we believe has

already avoided about 200 million metric tons. That's our Solstice products. But we spent about 10 years and about a billion dollars on R&D

and new capacity to drive that to market.

So, it doesn't happen overnight. I do believe that now that we have the infrastructure of the Paris Agreement, and the corresponding national

legislation that will be driving us, it has to drive us towards a low carbon innovation environment. That's the only way we're going to get

there.

QUEST: Which is what you are involved with, and we'll talk more as the years move on. Thank you, sir. Let's hope that in -- well, I was looking at

1987, 2007. 2017, I mean, well, one hopes that we're not waiting quite so long to review this one.

Thank you for joining us. We'll talk more.

QUEST MEANS BUSINESS, midweek edition, China versus Canada. Now, the Chinese has sentenced a Canadian businessman and the ramifications of doing

that. There are consequences for Huawei, too.

All of which will be explained after the break.

(COMMERCIAL BREAK)

[15:17:56]

QUEST: Huawei's Chief Financial Officer, the CFO is making a final push to stop her extradition from Canada to the United States. Meng Wanzhou's

lawyers are arguing that letting her face fraud charges in New York could encourage improper behavior by the U.S. authorities. Beijing in turn is

putting pressure on Canada with a series of criminal cases against Canadian nationals including a sentence of the businessman Michael Spavor, 11 years

in prison for spying, which Canada has swiftly condemned.

Paula Newton is in Ottawa. Paula, the problem here is the two countries are playing by different rules. Whereas China apparently would seem to get the

result they want out of the judicial system. The Prime Minister of Canada - - sorry, China gets the results it wants, but the Prime Minister of Canada can't just ring up the judge and say, oh, let her go or ignore the law or

whatever.

PAULA NEWTON, CNN CORRESPONDENT: Well, and there's no indication that he would want to do that anyway. The point is, Canada acted on an extradition

request as it does multiple times in a year from the United States.

Meng Wanzhou at this hour, Richard, is in court in Vancouver trying to prove that she shouldn't be extradited. The point is there's no burden of

proof on the part of a Canadian court to decide whether or not she is guilty or innocent, just to prove that whatever she did would have been a

crime in Canada and that there's ample evidence there in order to prosecute her and at least send her for extradition.

Putting all of that aside, we've been talking about this now, for almost a thousand days, the two Michaels, Michael Spavor who was sentenced today to

11 years; and Michael Kovrig, who also has a guilty verdict in front of him awaiting sentencing.

The point now, Richard, is that this doesn't have anything to do with Canada so much as it has to do with the U.S. and China. And today, Canada's

Foreign Minister made it very clear there are intense negotiations going on behind the scenes. If the U.S. Justice Department comes to some kind of an

agreement with Huawei, about Meng Wanzhou, there might be a chance that the two Michaels may be released sometime soon.

What does soon mean? It could mean months, it could mean years.

[15:20:06]

QUEST: Okay, but here they chose to the weak point of pressure, Canadians, so that, you know by going for Canadians to try and get a U.S. to follow to

change its policy or at least, I don't know, do whatever it does. They had to bank on Canada being involved in putting pressure.

NEWTON: Yes, but switch Canada with any country you want to, Richard? I mean, at the -- certainly the sentencing today, there were upwards of six,

almost 60 countries, allies, a lot of European allies in the room, too. And the point is, everyone understands what went on here.

China picked Canada because it could, because Meng Wanzhou was in Canada. Europe knows it is Canada today, it is us tomorrow. If you're an ally of

the United States, it could also happen to you. What is significant is that months ago, President Joe Biden said we are treating the two Michaels as if

they are Americans. And this Richard, is basically a pivotal case in terms of what goes on going forward between U.S.-China relations when it comes to

the rules of the game, and business, and espionage, and security issues.

And you know, we talk about it a lot on this show. This is a much larger issue than Canada and China.

QUEST: We will talk more about it even more. I'm thankful you're there to keep us informed. I appreciate it, Paula Newton.

Israel's top diplomat is on the first visit to Morocco. The two countries normalized ties last year. The Israeli Foreign Minister, Yair Lapid will of

course be Prime Minister in a couple of years, and he is inaugurating a diplomatic mission in Rabat, Morocco as the fourth Arab state to upgrade

relations under the U brokered Abraham Accords.

The UAE is also marking one year since it normalized relations with Israel. The moves opened up lots of new business opportunities between the two

countries for first time in decades. And of course, there's Dubai Expo 2020, which is likely to showcase some of the most promising new

adventures.

CNN's Nina dos Santos explains.

(BEGIN VIDEOTAPE)

NINA DOS SANTOS, CNN CORRESPONDENT (voice over): It started with a signature. The Abraham Accords have been a boon for business between Israel

and the UAE. Now, Israeli entrepreneurs like Yariv Cohen hope to see it flourish further at Expo 2020 Dubai, the first global event in the region

since that signature.

YARIV COHEN, CEO, IGNITE POWER: Dubai Expo for me represents the perfect combination of business sustainability and policy.

DOS SANTOS (voice over): Heading up a renewable energy company in Dubai, Cohen is particularly excited about the focus on sustainable technology and

the potential opportunities he can seize upon.

COHEN: This is the right place to be because the theme of the expo is sustainability, which is exactly what we do. We provide solar system on

homes that people that don't have power today, the policymakers in the world will come here. So we're looking for collaboration.

It's not just a networking event. It's a lot more bigger than that for us.

UNIDENTIFIED MALE: Very interesting. What a panoramic view of Jerusalem.

DOS SANTOS (voice over): Once finished, Israel hopes its pavilion, which recreates an old Middle Eastern tent, made up with LED panels will be the

home for partnerships, big announcements and deals.

UNIDENTIFIED MALE: So how are you getting ready for Expo?

COHEN: Oh, there's a lot to do. It will be a major event.

UNIDENTIFIED MALE: Well, hopefully it will be a successful one.

DOS SANTOS (voice over): In July, business between the countries reached $675 million. And for Israeli Ambassador Eitan Na'eh, Expo 2020 Dubai will

be a gateway for more.

EITAN NA'EH, ISRAELI AMBASSADOR THE UAE: We want to show Israel. We want to show our culture. We want to show our innovative spirit.

Cooperating is the way forward.

DOS SANTOS (voice over): That's Israel's mantra, literally.

NA'EH: Towards tomorrow, el hamahal (ph).

DOS SANTOS (voice over): Israel's Chamber of Commerce expects Expo 2020 to boost trade to $1.5 billion, bringing together each country's strengths in

several emerging sectors.

NA'EH: There is a great synergy whether it's agriculture, agro-tech, food security, cyber, artificial intelligence, everything tech -- medi-tech.

DOS SANTOS (voice over): That's music to Cohen's ears.

COHEN: If you have a global ambition, use the Expo as a jumping stone.

DOS SANTOS (voice over): Expo 2020 could cement the marriage of two countries sharing a love of commerce and of tech.

Nina dos Santos, CNN.

(END VIDEOTAPE)

QUEST: Lionel Messi's deal with Paris-St. Germain has the critics crying foul. The deal makes a mockery of financial fair play for all sorts of

reasons. The two countries and leagues are not playing by the same rules, and that will become clear after the break.

(COMMERCIAL BREAK)

[15:28:20]

QUEST: I'm Richard Quest. Yes, there's a lot more QUEST MEANS BUSINESS as we continue.

CNN's interview with the football star, Lionel Messi and I'm going to ask a football agent about the financial factors that led to this shock move.

Remember, we are a business program. We need to know the dollars and cents behind Messi to Paris-St. Germain.

The mayor of Honolulu, Hawaii is with me. The Island State is imposing new restrictions that will have big impact on tourism. But that might be a good

thing in some way over tourism. We will talk to the mayor of Honolulu.

This all comes after we've had the news headlines as you would expect, on this network, the news always comes first.

Afghanistan's Foreign Minister says more than 6,000 people have been killed across the country since mid-April, a third of them civilians as the

Taliban fights to gain ground. The militants now claim to have control of the prison in Kandahar and say hundreds of inmates have been free.

There are hundreds of wildfires blazing across Greece for the ninth day in a row. Firefighters from around the world are now working in brutal

temperatures, extinguishing the flames. One of the impacted areas is Greece's second largest island of Evia. Officials say more than half the

island has now burned.

Turkey has been battling wildfires, too. Flooding has also leveled homes, collapsed bridges, and caused road damage along the country's Black Sea

Coast with just one person missing and what's worse, heavy rains are expected throughout tomorrow.

[15:30:05]

(MUSIC PLAYING)

QUEST: Lionel Messi has made it official with Paris. After leaving Barcelona on Monday, he spoke with CNN only hours after signing his two-

year contract with Paris Saint-Germain. Messi said he's come to the ideal place to win a Champions League title. Amanda Davies has the story from

Paris.

(BEGIN VIDEOTAPE)

AMANDA DAVIES, CNN CORRESPONDENT: And so a new chapter begins for Messi here in Paris and here at the area, quite a few days for the 34-year-old.

There have been people here telling me they can't quite believe the move happened and happened so fast.

So perhaps not a surprise that the man himself admitted he's still trying to process and put it into words.

Congratulations. Lovely to see you. We have seen you this week go through the whole range of emotions.

Can you even begin to sum up the last few days?

LIONEL MESSI, PARIS SAINT-GERMAIN (through translator): Well, the truth is it's hard to put into words, but I've had to live through this week. It was

really difficult. What happened with Barcelona, saying farewell after being there my whole life in one place. And after three days without forgetting

what happened, everything changed.

I was living with a lot of doubt, a lot of nerves, a lot of anticipation that this would happen. And well, a lot of excitement and desire to get

started. It was a really special arrival, the welcome from the people who welcomed me who came out onto the streets.

I'm very excited to start this new era. And I'm going to live and I'm ready to start my new life here in Paris.

DAVIES: You have won league titles. You have won Champions League titles. But this is new to you.

Are you ready for life as the new guy in the dressing room?

MESSI (through translator): Yes, honestly, I'm aware of my background and the objective. This club has been fighting for a while to win a Champions

League. And it came close these last few years.

For me on a personal level, I would love to win another Champions League, like I've said in previous years and I think I've come to the ideal place

that's ready for that.

We have the same goals. The club's got impressive players, one of the best squads in the world. And God willing, we can achieve that goal which Paris

wants so much, I want so much. And hopefully we can enjoy it with the people of Paris, too.

DAVIES: What is the aim?

What is success for you here?

MESSI (through translator): Well, honestly, I live day to day, I think about enjoying the dressing room, where there's a lot of guys, I know, I

have friends there who are, like I said, among the best in the world.

I know them and being able to enjoy playing with them to be able to achieve the goals that the club has doing it all in a relaxed way and going slowly.

I'd love to be able to keep winning titles and to do it here in France, to fight for everything. I think those are the objectives. And hopefully it

happens.

DAVIES: Have you allowed yourself to contemplate the prospect of PSG against Barcelona in the Champions League?

MESSI (through translator): Well, it could happen, it would be strange for me if it happens. On the one hand, it would be special going back to my

home with a different shirt on. But we'll see what happens in the future. And if it does, we'll enjoy it as well.

DAVIES: There have been fans queuing up desperate to get their hands on the new 30 Messi Jersey already. We got a sneak peek as he came out wearing one

for a kick about with his children after all his commitments had been done.

But if there was hype around today, just imagine what it's going to be like when he takes to the field properly for his debut in a few weeks' time --

Amanda Davies, CNN, Paris.

(END VIDEOTAPE)

QUEST: Paris Saint-Germain's signing will come down to good luck and better timing. Barcelona, we talked about it on this program, lost Messi because

it couldn't abide by La Liga's salary limits, 75 percent of salary versus earnings.

[15:35:00]

QUEST: Even when he was willing to take a massive pay cut of 50 percent. France's Ligue 1, however, delayed efforts to tighten their salary limits

when the pandemic hit last year.

And then there UEFA annual financial fair play assessments to make sure teams aren't spending more than they earn, those were relaxed because of

the pandemic, too. And they'll be applied for the end of next season instead. So that buys Paris extra time.

The Paris Saint-Germain president Nasser Al-Khelaifi said his club always follows fair play rules.

(BEGIN VIDEO CLIP)

NASSER AL-KHELAIFI, PARIS SAINT-GERMAIN PRESIDENT: You know, we follow the financial fair play regulation from the day one that we started until the

end. We're going to hold for regulation of the financial fair play.

Before we do any things now, we look at our commercial people, our financial people, our La Liga people. So as soon we see that we sign in

lieu (ph), that's when we could have the capacity to sign him.

(END VIDEO CLIP)

QUEST: The football agent Erkut Sogut joins me now, representing players like Mesut Ozil. He joins me.

OK. We're a business program so let's not worry about whether Messi will do well at PSG. Let's concentrate on this.

It seems to me that Barcelona was playing one game under their fair play rules; PSG was playing by a completely different set of rules, which

allowed them to pay the larger sum of money.

Is that right?

DR. ERKUT SOGUT, FOOTBALL AGENT: Yes. First of all, Richard, yes. We have the scenario of Barcelona and we have the scenario with PSG in two

different countries, two different regulations. And that's very important to know from the beginning.

And La Liga as you already mentioned, has strict financial regulations for all the clubs in Spain. And that hit Barcelona this time. It kind of

produces for every clock (ph) the kind of combines both the transfer spending and the wage bill. It's kind of a cap for every club literally.

And they were hit by this thing for the first time. And the wage bill exceeded, as you already mentioned previously, like 70 percent of turnover.

You can't have more than that. And Barcelona had 110 percent. Without Messi, it is still 95 percent.

QUEST: So if France's Ligue 1 had not delayed their financial rules because of the pandemic, would PSG still have been able to get Messi, do you think?

SOGUT: I mean, it is a very interesting question. The thing here, which plays as timing, and you mentioned, timing is crucial and timing, it

couldn't be better tiling for PSG to sign a player like Lionel Messi. There are different factors.

First of all, he is coming on a free transfer. A lot of people talk about it's a transfer between clubs. No, it isn't. A transfer is a business

transaction between two clubs where the player is still under contract.

Messi is a free agent so there is no transfer fee like previous. But if it would be last year, we would talk about hundred of millions to get Lionel

Messi. This is one point.

Second point, as you mentioned, the French league doesn't have any financial restrictions. They are postponing it ever year and it's expected

to be there in 2023, 2024, another advantage.

Then with UEFA, financial fair play risks, they are relaxed right now. Another big --

(CROSSTALK)

SOGUT: -- UEFA can impose any restrictions right now because of COVID especially.

QUEST: So here's one for an agent like yourself. PSG is believed to have paid roughly 50 percent, 50-60 percent of what Messi's salary was going to

be -- or what it was; in other words a reduction of salary of 50 percent from what he was getting. That's what Barca was going to pay.

Why would he go along for that?

Why would he not insist on a -- he was only going to take less money of Barcelona to help them meet the rules. He doesn't have to do that for PSG.

SOGUT: I mean, to be honest, I don't think even a 50 percent pay cut within Barcelona would help. Barcelona has a bigger problem than Messi. And

everyone knows that. They will have bigger problems.

I think PSG is different. It's a new deal and he is getting assigning on fee. Don't forget about that. We have a player who's getting a salary,

which is around 50 million gross. People talk about 25 million net. Plus the signing-on fee, which is actually huge, which is probably another $25

million.

So it's a lot of money still, like for one year of football and he's getting it two years, plus another option year. So still is a lot of money.

QUEST: Give me your honest opinion, your honest opinion on the European fair play rules.

I mean, do they make sense?

Do they even work?

SOGUT: A very good question as well. We're seeing in the past that, by these regulations, more smaller clubs and medium size clubs got hit. Bigger

clubs have huge revenues, especially commercial revenues. They can always create revenues, which smaller clubs can't.

[15:40:00]

SOGUT: And we have seen that in the past big clubs always use this and other income stream, which help them to go over the financial fair play

regulations. In my personal opinion, it doesn't make sense.

So if it applies, it needs to apply for everyone in the same way. And it doesn't. On the other side legally, it is not clear if it is actually

legally correct within the European -- the European law. And I think that's why UEFA realized it. And they want to change it now. They are announcing,

toward the end of this year, we will have new regulations.

QUEST: Just the man we needed to talk to on this story, to put it into the business context. I'm very grateful for you. Thank you, sir.

Coming up, a massive cyber hack attack takes a platform that protects blockchains which is $600 million. And then they started to give the money

back. This sounds really well. Needs an explanation, which you'll get after the break.

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QUEST: More than a third of the $600 million stolen in a major crypto hack has been returned. As the blockchain finance platform Poly Network says

$260 million has been given back. It had set up ways for the money to be returned following the hack and it is not clear who is responsible and for

why. Clare Sebastian is here.

Shed some light on this.

Do we know, let's do this the wrong way around.

Why did they give the money back?

CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, Richard, that's the twist in this tale. Extraordinary because really the first we heard of this was when Poly

Network tweeted an open letter, a Dear Hacker letter to the hackers, urging them and in some ways threatening them to give the money back.

Appealing to a sense of community within the crypto community, saying this money belongs to members of that community, to the people. Saying if they

didn't, law enforcement around the world would be onto them.

And they have started doing that earlier this morning. It was about $4 million. It is now up to $260 million that has been returned. There's still

quite a lot left. We don't know why this speculation that perhaps it could have been an inside job. Perhaps this was a white hat hacker, attempting to

make a point.

Chainalysis, which is a blockchain data platform, they have actually published some messages that were exchanged, sort of Q&A with the hacker

through Ethereum transaction notes.

They say that this person, this entity said they did the hack for fun, as a challenge, that they wanted to get in there and expose this vulnerability

before an insider did it and exploited this.

[15:45:00]

SEBASTIAN: Sort of shed some light on this mischief but still there's a lot we don't know about this.

QUEST: So we don't know how, when or why the money is being given back.

However, how will they work out who has lost the money?

If some money is given back and other money is still being stolen, everybody on the network will say, oy, that's my bit that came back.

SEBASTIAN: Well, some of it will be done through looking at which coins were returned and through which blockchains. There were several different

blockchains involved, quite a few different crypto coins involved. So it might be done in that way.

Another interesting thing is the way that this unfolded within minutes of it happening. There were numerous analysts online, who were able to look at

it and see where the money was going, how it was being moved through different blockchains, sort of laundered within the crypto space.

And there were those that were saying this was why the money in part was given back because the time when the internet was alight with this story,

there was no way for this attacker to sort of withdraw the money, to pull it out into any sort of fiat currency or stable coin or anything they could

use to move it further away from the act itself.

And that's why they ended up backed into a corner with no choice but to give it back.

QUEST: And that really is the point. With blockchain, the whole point of it is the integrity of transactions. Therefore, you can follow it. What you

can't often follow is the beneficial owner of the account.

SEBASTIAN: Absolutely. There is a cybersecurity company, which tracks these things, which says it has the I.P. address and various attributes related

to this hacker but they don't who know that is.

There are two parts to this. One, the losses from hacks in decentralized finance, this new and growing part of the crypto space, are going up

dramatically, according to one report, in the first seven months of this year.

They're more than 2.8 times higher than the whole of 2020. So in that sense, this is a wake-up call to that sector. But of course, as you say,

there is that traceability side of this, that that now functioning not only as it awaits tracks these crimes down but also perhaps a deterrent or a way

to get these crimes reversed inside --

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SEBASTIAN: -- (INAUDIBLE) we're seeing today.

QUEST: Clare Sebastian watching out, thank you.

Paradise lost, at least for some holiday makers. Hawaii is reimposing COVID restrictions. The mayor of Honolulu is with me -- after the break.

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[15:50:00]

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QUEST: The view is absolutely sensational and the temperature in the high 20s. You are looking at a picture live, at the moment, where it's 10:00 in

the morning in Hawaii. Beautiful surroundings in difficult circumstances, in a major blow for U.S. tourism.

One of the country's most popular vacation spots. Hawaii, is reinstating COVID restrictions. There is a surge in cases. More than 45,000 cases of

Delta have been reported, while cases and hospitalizations across the U.S. are generally much lower, six-month lows.

So in Hawaii, limits on social gatherings, bars, gyms and restaurants, indoor capacity is cut down by half. Joining me is the mayor of Honolulu,

Rick Blangiardi.

Mr. Mayor, thank you, sir. We understand the necessity for these new restrictions or the reimposition of these restrictions.

Do you think that you opened up a little bit too fast?

RICK BLANGIARDI, HONOLULU MAYOR: I don't think we opened up fast. I think what we didn't anticipate was the infectious rate, if you will, of how the

Delta variant has come upon us.

We were pretty close to getting out of the tunnel, so to speak. We had enjoyed the benefit, even though our economy took its hits. We had the

benefit of the lowest case counts in the country, the lowest death rates. Our positivity rate was low.

We really, at no time during the pandemic, suffered any kind of a drain or a pressure on our hospitals, especially our acute hospital care. So we were

ready to welcome people back. But this Delta variant in the last two weeks has changed the narrative. And I thank you because our case counts are up

pretty dramatically.

QUEST: And that will, of course, affect the way tourists will be able to enjoy your beautiful islands. Also the vaccine mandate that you have

introduced.

You're not messing around here, are you with the vaccine mandate.

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BLANGIARDI: No, I'm not but --

QUEST: You get vaccinated or you face disciplinary action or termination.

BLANGIARDI: We just got back -- our safe travels program is working. We're taking in over 30,000 visitors a day, as opposed to 2,000 a year ago at

this time. And actually, our degree or rate of infection among our tourists coming in has been very low, less than 2 percent.

We've had other issues with communal spread, again, all relatively new. We, with respect to what we're doing with our city and county workers, we're in

a situation now, where nearly a million people in our state have been vaccinated.

We've got 211,000 kids under the age of 12 statewide, who are not eligible to be vaccinated, which leaves us a population base of somewhere between

225,000 250,000 people. What we're trying to do is, on a 4:1 majority, appeal to those people in the minority to help us keep our work places

safe.

That is the greater responsibility. And last week, we made that announcement. A number of private businesses have stepped forward and

encouraged or required their employees to be vaccinated.

Up until now, we've not had mandatory vaccines. But we're really trying to get us through this, given our vulnerability being out here in the middle

of the ocean. Our hospitals have not been overpressured to date.

But with the case counts the way they are, the positivity rates, I'm looking to mitigate that circumstance from happening because we can ill

afford to have that happen.

QUEST: Can we talk about one other issue?

It seems rather quaint, the issue of overtourism. We cover a lot of that on QUEST MEANS BUSINESS. The question of tourism and managing the future of

your tourism industry.

COVID is going to go away at some point and, at some point, the tourism numbers will come back in very large numbers.

How far, sir, have you -- are you taking the lessons and saying, we cannot, particularly in Honolulu, we cannot go back to the days of overtourism?

BLANGIARDI: Well, in 2019, we were overrun. We had 10.5 million visitors; 3 million of those visitors stayed in illegal vacation rentals. If you look

at the hotel capacity and high occupancy rate statewide, it can probably handle about 7.5 million visitors.

That's assuming a 90 percent occupancy, which most people would kill to have that kind of occupancy. So that's the sweet spot in our visitor

industry, somewhere between 7.5 million, maybe 8 million on the outside.

So the city now, we've stepped in. It is our responsibility on the management of those illegal vacation rentals. And we're about to pass

ordinances.

[15:55:00]

BLANGIARDI: We have got to go through some processes and protocols. But the last thing we want to do is be overrun by tourism. We still need to

coordinate our local people. It creates havoc in our neighborhoods with these illegal vacation rentals.

But it also I think lessons the quality of the experience somebody has. We don't want to do that. We want people to come to Hawaii and have the dream

of their lifetime become fulfilled.

QUEST: Having been there, sir, I think we might have some pictures of me surfing in a second. Having been and done well and reporting for "Business

Traveller" from Hawaii, I can -- oh, there we go, me on the beach. I promise you, sir, you don't want to see the results of me trying to surf in

Honolulu. It was not a pretty sight.

A wonderful place, we covered a lot of ground. I'm grateful. Thank you.

BLANGIARDI: Thank you, Richard.

We'll continue to follow that, of course, believe me. Let's look at the markets instead, a much more pleasurable thing, particular if you're long

at the moment, up 207. Records on the Dow, records on the SNP. A "Profitable Moment" next.

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QUEST: Tonight's "Profitable Moment," you'll forgive me if I'm not with you tomorrow night on the program. I'm flying tonight to London on JetBlue 007,

which is their first service from New York, the first European service and they're going into London Heathrow. We'll be talking to Robyn Hayes, the

CEO, on that flight.

The fact that JetBlue is going ahead with this when people from Europe can't come to the United States, the fact that IHG's CEO,

InterContinental's CEO yesterday on the program, said things were almost back to normal and even better in some markets.

Or that the Etihad CEO said there's a tidal wave of demand waiting out there. Or that Virgin Atlantic is looking at a flotation possibility. It

all tells us that things are going much better than expected, Delta variant aside.

And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. In London tonight. Back with you on Friday. Whatever you're up to in

the hours ahead. I hope it is profitable. Records on the Dow. Records on the SNP. Pamela Brown with "THE LEAD" is next.

END