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Quest Means Business

El Salvador's Bitcoin Experiment Off To Volatile Start; Thousands Gather In Show Of Support For Bolsonaro; British Airways CEO Slams Strange U.S. Travel Rules; Surging Variant Fuels Worries Over U.S. Economy; More U.S. Companies Delay Return To Office Until 2022; U.S. Markets Mixed As Goldman Downgrades Growth Forecast. Aired 3-4p ET

Aired September 07, 2021 - 15:00   ET



RICHARD QUEST, CNN BUSINESS ANCHOR: Wall Street returns from its long weekend. There are solid losses for the Dow. Now, the NASDAQ is hitting a

new record, the diversification of the market is taking place today. That's the way the markets are looking.

And remember, of course after a long weekend, these are the main events of the day.

El Salvador adopts Bitcoin as legal tender, and watch at its value fall 10 percent in one day.

Major rallies in Brazil's financial capital as President Bolsonaro stages a show of force.

And British Airways --


UNIDENTIFIED MALE: It's got a place in people's hearts and minds. I mean, the important thing we need to be is clear about what we stand for.


QUEST: The Chief Executive of British Airways says it's time for clarity of purpose for BA.

We are were live in London on Tuesday, it is the seventh of September. I am Richard Quest, I mean business.

Good evening, today, El Salvador became the first country in the world to declare Bitcoin as legal tender, and within hours, the crypto currency lost

10 percent of its value.

The International Monetary Fund has warned this kind of volatility is amongst the challenges by adopting Bitcoin as a currency. El Salvador's

President said it was a major achievement.

Nayib Bukele tweeted that he was buying the dip, adding another 150 Bitcoins to the country's Treasury. In other words, taking real dollars and

buying Bitcoins.

Remember, El Salvador is a dollarized economy. It's already bought 400 Bitcoins in two installments.

In a follow up tweet, he thanked the I.M.F. for the dip, saying it saved the country a million in printed paper. El Salvador's Bitcoin wallet is

called Chivo, it means cool.

Salvadorians are able to download a wallet preloaded with $30.00 of Bitcoins on Tuesday. Now, of course, that $30.00 is worth only $27.00. You

can use it for anything, buying coffee, paying taxes, as $150 million set aside for ATMs to convert Bitcoins to dollars, and the President claims it

will help the unbanked, promote foreign investment, and make remittances easier to process.

Meanwhile, international organizations, the I.M.F., the World Bank, you name them, they oppose the move, give 1,001 reasons why they say it is not

a safe way to proceed.

Rafael Remo is with us from Mexico City.

This is as unusual as it is as startling as it is renegade.

RAFAEL ROMO, CNN CORRESPONDENT: Yes, that's right, Richard. Very unusual, especially for a small country like El Salvador, and it wasn't the stellar

rollout that the Salvadorian President Nayib Bukele was hoping for, there were glitches with the government's ad designed for exchanging Bitcoin for

dollars and vice versa.

Also, as you just mentioned, it lost about 10 percent of its value. On the plus side, major fast food chains that operate in El Salvador are already

accepting Bitcoin, a form of payment that has been used in a small coastal village for years.


ROMO (voice over): On the southwestern coast of El Salvador --

UNIDENTIFIED MALE: El Zonte is kind of a sleepy beach town.

ROMO (voice over): Lies a rocky beach that has been attracting surfers from around the world for decades. It's not the kind of place where you

would find luxury resorts, but the coastal village of about 3,000 has begun a small financial revolution that has the potential of reshaping the world


For the last several years, an increasing number of people at El Zonte have been using Bitcoin as their main currency for daily transactions.

MICHAEL PETERSON, DIRECTOR, BITCOIN BEACH: You can pay your car insurance or your school tuition, and they can pay in Bitcoin.

ROMO (voice over): Michael Peterson is an American who has been living in El Zonte for eight years. Peterson first traveled here as a surfer in 2004.

Now, he is the director of Bitcoin Beach, a locally led initiative supported by a U.S. based nonprofit organization.

Peterson says the initiative has a dual purpose, developing the community and promoting Bitcoin.

PETERSON: This isn't a business for me, it's just something that loses money for me. Now, I have a business in the U.S. that supports my needs,

but I just have a love for the community here and a real belief that Bitcoin can really impact the life of those that are unbanked and those

that are at the bottom rungs of the economic ladder.

ROMO (voice over): Peterson is not the only one who is betting that Bitcoin will alleviate El Salvador's endemic poverty.


ROMO (voice over): Nayib Bukele, the millennial President of El Salvador successfully advocated for a law making his country the first to adopt the

cryptocurrency as legal tender.

Venezuela launched the cryptocurrency three years ago called Petro that was backed by the country's reserves and natural resources.

ROMO (on camera): The case of El Salvador is unique in that it's the first country to make Bitcoin legal tender. Here in Mexico, for example, the

country's Central Bank issued a warning over the summer saying cryptocurrencies pose inherent risks, and that dealing with them is not

legal under current law.

This means that banks are not allowed to trade or offer any transactions with them.

ROMO (voice over): Some small business owners in El Salvador like this baker who makes a living selling sandwiches on the street, say they like

Bitcoin because it gives them an alternative to make money.

"It truly isn't difficult to deal in Bitcoin at all," he says.

Not far from there. This owner of a tortilla shop says she prefers cold hard cash.

"It's something new and we don't have enough information about it," she says. She is not alone.

Hundreds of Salvadorians recently took to the streets to send an unequivocal message about cryptocurrencies. "They're trying to change the

whole country into a casino where those who can afford it, like the Bukele family can get in and play," he said, "El Salvador is not a casino."

Back in El Zonte, Peterson says people shouldn't see Bitcoin as a threat, but an opportunity.

PETERSON: I think they get it backwards. This is what Bitcoin actually fixes. Bitcoin will bring these opportunities to young people, so they

don't feel like they have to go to the United States in order to feed their family, they can develop a successful business here.

This deters people from entering the gangs because a big reason people enter the gangs is because they feel like there isn't other opportunities

for them.

ROMO (voice over): He warns, though that adopting Bitcoin doesn't mean that El Salvador's problems like poverty and gang violence are going to

disappear overnight. But he hopes it will empower those at the bottom of the economic ladder in the smallest country in Central America.


ROMO (on camera): And Richard, the government of El Salvador has invested $203 million in infrastructure to install ATMs that will be available

around the country where people will be able to exchange Bitcoin for dollars, and the other way around.

The Salvadorian National Assembly has also created a fund of $150 million, so that there is money readily available if people want to exchange their

Bitcoin. Back to you.

QUEST: The problem of course, is when too many people want to exchange at a fixed or otherwise rate into a fiat currency like the dollar.

Rafael, thank you.

Whether or not Bitcoin is an asset class, most people accept it is. It is far more controversial as whether it is a currency and central bankers have

expressed skepticism about the El Salvador great Bitcoin experiment.

On this program in June, the former Bank of England Governor Mark Carney told me there are all kinds of drawbacks for Bitcoin and cryptocurrency.


MARK CARNEY, FORMER BANK OF ENGLAND GOVERNOR: So, the concerns are the use cases for some of these currencies, for activities out of the formal

financial sector through to money laundering, ransomware, or other factors.

I mean, this is -- these are core use cases of some of these currencies, particularly Bitcoin that is a concern. It is a very legitimate concern.

Secondly, there's concern about resilience of the system and not just the crypto asset itself, but the entire ecosystem because you have to think

about how it works overall. Thirdly, the fact is that as part of the system, these ultimately reconnect to the formal financial system. So in

the end, it's about the resilience of the formal financial system.


QUEST: That of course, is Mark Carney, the former Governor of the Bank of England, questioning the very propriety of using cryptocurrency as a


The Governor of Denmark's Central Bank has told me it's too risky to replace fiat currency with Bitcoin. It is Lars Rohde, who I visited on my

recent visit to Denmark. The Governor said he is skeptical about crypto.


LARS ROHDE, GOVERNOR, CENTRAL BANK OF DENMARK: First and foremost, it's not a currency, it's maybe an asset. But it lacks all the normal intrinsic

things about currency. It's not stable. It's not backed up by anybody. So, it's not a currency and it's quite expensive to make transactions.

That's, of course, I think we should concentrate much more on cybersecurity and a little bit less about having financial stability issues about all --

for example, Bitcoins and the like.

QUEST: You don't worry that a digital currency will come along and will gain -- I mean Facebook tried, it did -- or they were going to try it, and

then it suddenly sort of disappeared off.

But that's your big fear, isn't it? That a digital currency comes along that gains scale that could then threaten your ability to manage the money

supply in a country?


ROHDE: I think what could also keep us awake is not Bitcoin and like, it is more Big Tech and their ability to make some kind of parallel currency

system, stable coins or whatever.

But there's a main rule here and I think central bankers and FSAs around the world are painfully aware that if it looks like a bank, and is doing

what banks are normally doing, it should be treated like a bank.

That's a huge issue for example, about know your customer, about money laundering, about anti-terror financing and so on and so forth. So, I guess

that the big central banks and even a small central bank will be very vigilant and very aware of the risk of undermining the whole system and

that would be completely unacceptable.


QUEST: And of course, there's the problem with Bitcoin. You can hear more from Denmark's Central Bank on the Denmark -- on the euro peg -- the krona

euro peg, actually.

Brazil's President has joined his supporters at a rally in Sao Paulo only a few moments ago. Jair Bolsonaro is locked in a dispute with the judiciary

and is asking his supporters for backup. His critics fear that he is encouraging backers to intimidate or invade the Supreme Court, pretty much

like what happened in January at the U.S. Capitol in Washington.

Some supporters have been trying to break through police blockades right near the court. The President is up for re-election next year and polls

show him far behind the former President Lula da Silva.

Some of the biggest rallies are taking place on the streets of Sao Paulo. Anthony Wells from CNN-Brasil, is there and has sent us this dispatch.


ANTHONY WELLS, CNN BRASIL REPORTER: Hello, everyone. We're standing at the very top of a building with a bird's eye view of one of the biggest

protests in the nation that's happening down below.

So I'm going to step out of the frame and let our photog here, Jugi Souza (ph), give you guys a look at the scene. So down below, we have thousands

of protesters in favor of President Jair Bolsonaro and his administration.

Protesters who are bearing green and yellow, the Brazilian national colors and are awaiting the arrival of the President who is expected to address

his supporters here within the next hour.

Now, these are people who believe President Jair Bolsonaro is on a political crusade to rid the country from leftist politics and who argue

the Brazilian Supreme Court is trying to impede Bolsonaro in that quest.

Now, opposers would argue protests like the one you are witnessing right now are trying to give the administration a false sense of strength in what

is Bolsonaro's weakest moment since his presidency began in 2019.

Polls show that over 60 percent of Brazilians would not vote for Bolsonaro putting him behind former leftist president Luiz Inacio Lula da Silva. His

ratings are also nosediving as a result of a coronavirus pandemic that has claimed almost 600,000 Brazilian lives.

So, we're staying on top of the protests here. Should we have any updates? Should they get violent? We'll be sure to let you know.

Anthony Wells, CNN-Brasil, Sao Paulo.


QUEST: The Chief Executive of British Airways says the traffic light system that governs U.K. travel rules are not fit for purpose. Our

exclusive interview with Sean Doyle of BA after the break.



QUEST: The Chief Executive of British Airways says he can't understand why the United States still refuses to open up for transatlantic travel. Sean

Doyle tells me tonight that BA is facing a huge challenge both with the U.S. routes shut, and with the U.K. traffic light system for travel that

are in his words, not fit for purpose.

Doyle has been in charge at British Airways for almost a year. Today, he unveiled a new sustainability drive called "A Better World." The airlines

is working with BP on greener fuels. Ten percent of its fuel will be sustainable by 2030.

Sean Doyle has been in crisis mode ever since he took over as CEO last year, BA has been suffering an identity crisis of sorts as it tries to dig

itself from the pandemic. Its reputation as Britain's flag carrier at Heathrow has taken a hit. Its most lucrative long haul routes have been

shut, costs have been cut.

Now, it is planning a new operation from London Gatwick with a focus on short haul routes. Sean Doyle says he can make sure BA comes out to the

pandemic a better airline.

For now, though, his most immediate problem is U.S. travel.

In an exclusive interview at Heathrow Airport this morning, he told me the current U.S. rules make no sense.


SEAN DOYLE, CEO, BRITISH AIRWAYS: Well, what I'm trying to figure out is why it is not open, and I think you know, there isn't much in terms of data

or science that suggests it should be closed because we have high levels of vaccination in Europe, high levels of vaccination in the U.K.

The pandemic is very well overseen in these countries. You can travel from other countries with charters in good position, but you can from Europe in

the U.K. So you know, considering the trading links and the relationship, I find it very strange that we haven't picked this apart yet and opened up.

QUEST: Okay, are you putting pressure -- well, you are putting pressure, but if I look back at the G7, it was as if no pressure was going to work on

the Americans. So, what more can you and the British do?

DOYLE: Well, I think you're right, you know, it is a political process, and I think we keep outlining the economic impact of staying closed and the

human impact. So, there is a lot of people who haven't been able to visit family in the U.S. They haven't been able to reunite.

You know, both countries have huge amounts of foreign direct investment going both ways and that's going to be impacted by this impasse.

QUEST: Until the U.S. is properly open, you are going to be flying with one eyepatch, one hand tied and arguably a leg strapped.

DOYLE: It is challenging. There's no two ways about it. Because you know, we were the biggest North Atlantic --

QUEST: You can't make money until the North Atlantic opens up.

DOYLE: We were the biggest carrier across the North Atlantic and we built a very strong proposition there. So, you're correct. It's a very important

market to us. But we need more than the U.S. opening up. We need to simplify the U.K. traffic light system. That's overly complicated. It's out

of sync with what other European carriers are operating to.

And I think the U.K. industry is being held back as a consequence of a system, which isn't fit for purpose anymore.

QUEST: Not fit for purpose. That's strong.


DOYLE: Yes, I think we need to simplify it. I think double vaccinated travelers should be able to travel freely without testing, and I think we

should simplify both the standard of testing and the cost of testing for those who aren't.

We see countries across Europe adopt simpler frameworks, and they are having no different outcomes to what we're seeing in the U.K.

QUEST: The low cost Gatwick operation. Now, it's been explained to me, this is really just Mixed Fleet Version 2. This is just lowering your cost

base, so you can run a leisure operation out of Gatwick.

DOYLE: But I think what it is, it is about creating the right platform to compete at Gatwick and Gatwick is different. It is a point marker, it has a

lot of leisure traffic. Its competitive set is different to what we have at Heathrow, and we need to be able to compete there, if we're going to go

back in.

We need an efficient cost structure, but we also need flexibility in the way we run the business.

QUEST: But it's not a low cost carrier.

DOYLE: It's got to be the BA brand, it will maintain the BA brand proposition, but it will have an efficient platform. It will be

competitive, but also, we'll have autonomy to run the business to where it needs to.

QUEST: There are rumors that at some point, IAG may decide to sell off BA as being the non-Brexit -- the other bit, could you ever see that?

DOYLE: Look, you know, rumors are always out there, and a brand like British Airways in the airline business attracts a lot of speculation. So,

I don't have any comment to make on that.

You know, we're working very well as part of IAG, and we believe in the IAG model, and I think it's been a role model for consolidating over the last

decade. And I think, you know, we, as a group of airlines will be stronger together when we come out the other end of this.

QUEST: So, there's no plans of which you are aware.

DOYLE: You've heard those rumors, I actually haven't heard those rumors. So, I think it would be unfit for me to comment.

QUEST: Finally, perhaps the most important thing we're going to talk about now is what you're going to do with BA, you and I were talking earlier

about, you know, the feeling that the luster is off, that it's not in the top, top premium brands of airlines. How are you going to restore that?

DOYLE: Well, I think BA is a brand, which sets huge expectations. It's got a great legacy, you know, it's got a history of innovation, and holds a

very special place in the hearts and minds of customers.

It creates a high bar that we've got to meet, and I think my challenge is to meet that bar. You know, things we want to stand for are quality,

differentiation, and excellence. They are the things that get the people to British Airways humming and I think, if we can create clarity of purpose,

and commit to that consistently, we'll get our customers and our people in a very, very good place.

And I think you know, we will come out on the other end of this pandemic a better airline than we've moved into it.

QUEST: Your predecessor started to spend towards the end. New cabins in business and in first, improved food provision. I guess, the question is,

can you do it? Can you restore BA?

DOYLE: Well, I think the first thing I would say is we continue to invest in the business, we continue to take delivery of new aircraft, we continue

to configure our planes with new product and improve our catering proposition.

So, I think we're committed to excellence in terms of the customer experience and that will carry on. We also are committed to sustainability,

which is a very important part of how we will run our business in the future.

QUEST: I want to talk about that. Ten percent by 2030. The fuel is more expensive, but hopefully the cost will come down. The demands and the

amount are huge and probably are impossible for current manufacturing to create a hundred percent across the industry anyway. So, how -- do you

think aviation is being unfairly tagged here, 72 percent of emissions.

DOYLE: Well, I think, whether it's unfair or not, you know, we've got to deal with sustainability in the industry. And the reality is, is what we do

is very important to the global economy.

We also need a longer pathway to get to a sustainable net zero aviation technology, and that will take time, and we need to find a number of

initiatives in the meantime, before we get there. These include sustainable aviation fuel, carbon offset, and also investing in new technologies. So

all of that, we're committing to.

You know, sustainable aviation fuel, creating a mandate of 10 percent, I think will drive the supply side. People will start investing in that

capability and that's important. And the more we scale it, the more efficient it becomes.

QUEST: What would you like people to say about the Doyle tenure as the CEO of BA when it's over?

DOYLE: When it's over.

QUEST: When you're finally shoved out the door.

DOYLE: Well, I want it to be a brand that stands for a number of key values. One, we commit to excellence; two, be cared about our customers;

three, we innovate; and four, we're a company that's open minded and diverse.

I think if we can get those values embedded and delivered consistently, we leave a great legacy. But more importantly, we need to get the business

back on its feet and to invest in the things we want, you know, we've got to start getting trading again and generating profits.

So you know, I wouldn't underestimate the challenge that we do face to kind of restore the business, but I think we're on the right path.


QUEST: Sean Doyle of British Airways. We will watch and follow.

And you and I continue tonight, Goldman Sachs says U.S. economic prospects are growing darker. It's cut its growth forecasts, doing so, yet again.




QUEST: It was a three-day weekend, but U.S. markets are back in business. The Dow fell sharply in the day. It's been down all day. Now, we're not

quite at the worst of the day, but not far off, the S&P is off as well. The NASDAQ not as much. The NASDAQ though is up and that means of course, it's

a record just because we were at record on Friday, it is a record today. So, two down, one positive.

President Biden has been spending Tuesday in New York and New Jersey. He went to see the damage from Hurricane Ida. And on Thursday, the President

will talk about the other deadly catastrophe, the delta variant.

A major speech will be given on the administration as to how it's going to get it under control. Infections, hospitalizations, and the number of

people dying have gone sharply higher. There are fears of the economy being infected.

Goldman Sachs has downgraded its U.S. forecast to 5.7 percent. It's still high, just from six percent, but it's the third time in five weeks, the

Wall Street bankers trimmed that figure.

CNN Business lead writer, Matt Egan, six percent to 5.7. Now, I can hear some people saying, oh, come on, give me that and I'll take it to the bank.

But the reality is a lot of the 5.7 is makeup and pent up.

MATT EGAN, CNN BUSINESS LEAD WRITER: That's right, Richard, and you know, you've got to be disappointed in the direction here. As recently as July,

Goldman Sachs was calling for GDP growth of seven percent in the United States, that is China-like growth, but there's been this slow drip of bad

news here, and if you look at the timeline, there's been a series of downgrades by Goldman Sachs.

In late July, they said instead of seven percent, they think it is going to be 6.6 percent. Then in mid-August they lowered again to it 6 percent and

now 5.7 percent. And a lot of this is being driven by concerns about the Delta variant as well as fiscal fading support.

This idea that the Delta variant is impacting the U.S. economy was really obvious in that jobs report that came out on Friday, just shockingly

disappointing August jobs report. It showed the United States added just 235,000 jobs.

QUEST: So if that's the scenario, the market is still holding its gains.

Simple question, why?

EGAN: That's a great question. I think the simple answer would be that, if the economy is perhaps not booming, not growing gangbusters, that could

ease some of the inflationary concerns. It takes some of the pressure off the Federal Reserve from having to remove all of that emergency stimulus,

the quantitative easing that the markets love.

So from that sense, if the economy is not falling off a cliff, it is still growing pretty well but it's not booming. From a market perspective, that

may not be the worst thing in the world.

QUEST: OK, but to use the market parlance, are we at the moment risk on or risk off?

EGAN: We've been risk on for a very long time, since March of 2020 really since April of 2020; ever since the market's bottomed, it's been risk on.

There's been just these very few moments of concern, where we did see the market drop.

But we haven't had a 10 percent correction in this entire run, which is amazing. If there was going to be a 10 percent correction, you could see it

in the next few months.

There's a lot of obstacles coming up, the debt ceiling that has to be raised, concern over how the Democrats will pay for this $3.5 spending bill

that they may or may not get through Congress.

And you have the ultra high valuations in the stock market and a slowing economy.

If there were time for the market to care, it would be in the next few months but who knows?

QUEST: What is interesting is tapering tantrums do not seem to be on the horizon.

Well, we don't really know, do we?

But at the moment it would suggest the Fed is negotiating the withdrawal of monetary stimulus in a very measured way.

EGAN: So far, so good. If you're the Fed, you want to give the market enough time to absorb that they're taking away the punch bowl. They've been

talking about it for a few months. So far, the markets are still going up.

Perhaps later this year, they'll announce that they will actually taper. Maybe they start slowing these purchases. But so far we haven't seen that.

And if you're Jerome Powell, that's good news.

QUEST: Matt Egan, good to see you, sir, thank you.

The Delta variant has forced more U.S. companies to shelve their return to work plans until at least next year. And it's not only Big Tech; Starbucks

and Ford are amongst those delaying office reopenings.

Here in the U.K., progress has been much quicker. In a recent survey, 4 out of 5 British managers tell the chartered manager institute, they expect to

have some people back to the workplace this month.

Christian Ulbrich is the chief executive of the commercial real estate firm Jones Lang Lasalle, JLL. He joins me from Frankfurt by Skype.

Good to see you, sir. This is interesting. I always still think of commercial real estate, you're crying into your beer because the situation

is so bad.

Is it still so bad?

CHRISTIAN ULBRICH, CEO, JONES LANG LASALLE: No, not at all, Richard. Thank you for having me. The situation is actually pretty good. There is a

vibrancy in the economic recovery and we cover a lot of asset classes, not only offices.

As you know, especially the area of distribution centers is booming massively but also data centers, life sciences. So there are a lot of asset

classes that are really running at high speed.

QUEST: And the return to work, the hybridization if you like.

First of all, what are you doing in your company?

Obviously, there is a certain local element to it, depending on where in the world.

As a matter of principle, are you going for a hybrid model?

ULBRICH: Yes, absolutely. I think every company is wise if they adopt the hybrid model because that's what employees want. They wanted it before

pandemic and they want it even more post-pandemic.

But a hybrid model means that you are coming to the office a couple of days a week and you're working from elsewhere the other days of the week. It

doesn't mean that you're only working from home or only working in the office. And I think that's very important.


ULBRICH: And as you rightly pointed out, there are massive cultural differences across the whole world but also within the U.S. You have very

different behavior in the South of the U.S. versus San Francisco, Chicago, New York.

And every company has to be adjusting to those cultural differences so that the employees feel comfortable to get back to the office.

QUEST: When we talk about that -- we were talking about it last night to a gentleman on this program. And he said it is really important that CEOs do

what they say, say what they mean and keep their word about the promises they're making. I expect you agree with that.

But is it possible to do it?

ULBRICH: Well, I certainly agree with that and I hope it is, for every CEO, possible to do it. I try very hard to stick to that line.

Listen, there's no doubt that we have seen productivity falling during that long phase of the pandemic and very many people working from home. At the

beginning, productivity was still very high when that was relatively new.

But over time, this has been fading. There is a lot of stress on people if they only have to work from home. So in all the surveys that we are doing

among our clients, we see there is an eagerness from the majority of the people to spend a couple days a week back in the office, to have a real

path between the work life and their private life.

But again, we have to show, as employers, the flexibility and be very adaptable to the needs of our employees and also to the cultural

sensitivities which you have.

When you drive to your office by car, it is a different story than when you have to use public transportation.

QUEST: And let's look at the property itself, the repurposing of the commercial properties.

Where would it go toward?

Does it go toward residential?

We hear of a glut of properties. We hear of older properties that need to be reconditioned.

So if you have to pull out trends, in developed markets now, what would they be?

ULBRICH: Well, indeed, in most markets, you have a very high demand for additional resi (ph) space that has to do with (INAUDIBLE) expectations of

people. They want just more space.

It has to do with movements within countries -- or within the U.S. you have the strong movement toward, for example, Texas. So their strong demand for

resi (ph) space there.

When we generalize, we also see that we have an oversupply of retail space and, especially, some of the shopping centers which are not the leading

shopping centers in an area need to be repurposed.

And there are all kinds of things you can do with some of those, depending on the location. But there will be quite a bit of repurposing necessary.

And then for office building, this is an issue which is predominantly around the B to C locations, where we need to repurpose some of these

office buildings into resi or into hotels or other forms of usage.

QUEST: Christian, I'm going to go straight for the jugular here. I was chatting to some people in commercial real estate. And they said -- and it

is them, not me -- that there is a looming recession in commercial real estate of all sorts, the like of which we've not seen before.

Do you buy that?

Do you think there's any scintilla of truth in that?

ULBRICH: I would strongly disagree with that assessment. Clearly, it depends what assets you are invested in. But as long as you invested into

quality assets in premier locations, in good cities, you will be fine.

We see a very strong demand for those assets with regard from the investor side. But we also see good demand with regard to the occupier side. But

there is right so, there is repurposing necessary.

But frankly speaking, I would be more concerned about the ESG footprint, the environmental footprint of my building, rather than how it does on the

back of the pandemic.

We will see much more changes coming with regard to the carbon footprint of buildings, where we need a lot of upgrading of buildings going forward.

QUEST: Christian, thank you, sir. Very good to talk to you on this subject. Important. I'm grateful. Thank you.

And I want to show you the markets before we take a short break here on QUEST MEANS BUSINESS. That's the Dow. It is off. Almost the worst of the

day but not quite. But that doesn't tell the whole story because the triple stack shows that we have two down, one up.

And the Nasdaq is at a record as a result. And the Dow 30 really gives an indication that those stocks within it are sharply -- look at that.


QUEST: 3M down 4 percent. Amgen, Honeywell, sharp losses at the bottom end with small gains at the top.

This is the (INAUDIBLE) of the day. QUEST MEANS BUSINESS for the moment. I'll be back at the top of the hour. Together we'll make a dash for the

closing bell. In a moment, Connecting Africa.


QUEST: Hello, I'm Richard Quest. Together let's have a dash to the closing bell. We're two minutes away; it's the first day of trading, of course,

after the long holiday weekend.

Goldman Sachs has downgraded its U.S. growth forecast for the third time in five weeks. That may be contributing to the Dow's losses. The Dow is off

more than 268 points at the moment for almost the worst of the day.

The S&P 500 is down, too. The Nasdaq is up, though. It is on pace and course for a record close. It was a close on Friday. It will be a close


The chief executive of British Airways says he can't understand why the United States is refusing to open up for transatlantic travel. Sean Doyle

spoke to me in an exclusive interview as he unveiled a new sustainability drive called Better World.

With most British and European travelers barred from the U.S. and U.K. travel rules changing every few weeks, Doyle said BA faced major



SEAN DOYLE, CEO, BRITISH AIRWAYS: We need more than the U.S. opening up. We need to simplify the U.K. traffic light system. That's already complicated.

It is out of sync with what other European carriers are operating to. And the U.K. industry is being held back as a consequence of a system which is

not fit for purpose anymore.


QUEST: "Not fit for purpose." So, too, the Dow Jones and how it is closing. We know the Dow is off quite sharply. Only a handful of winners today.

Disney and Apple are at the top. Amgen and 3M are down at the bottom now.

And 3M, an unusual one to be suffering a loss of such a magnitude, 4.4 percent. And that in itself shaves about 50 points or so off the Dow.

Disney doing well on subscription numbers for Disney+ and, of course, on recent movies, which have made bumper revenues.

Apple is also strongly higher. That's the dash to the bell. I'm Richard Quest this week in London. Here's my bell. Whatever you're up to in the

hours ahead, I hope it is profitable. The closing bell is ringing on Wall Street now with the Dow paring a bit of the losses. But "THE LEAD" with

Erica Hill starts right now.