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Quest Means Business
E.C.B. to Slow Down Pandemic-Era Bond Purchases; D.O.J. Announces Challenge to New Abortion Law in Texas; First Commercial Flight out of Kabul Since Taliban Takeover; Qatar Airport Nearly 90 Percent Fixed. Aired 3-4p ET
Aired September 09, 2021 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:07]
RICHARD QUEST, CNN BUSINESS HOST: An hour before the closing bell will ring on Wall Street. The Dow set to finish lower and will be the fourth straight
session of losses.
They're not huge, mind you, look, there you go. We were up early in the morning. Now, we're down a hundred points. That's been the tone, which
suggests a wait and see, but on the downside.
The way the markets are looking and the events of the day.
The lady isn't tapering. Christine Lagarde channels the Iron Lady as the E.C.B. slows down its stimulus.
Qatar Airways staged its first charter flight from Kabul since the fall of the Afghan capital, and shares in EasyJet fall 10 percent as it turns down
a takeover bid believed to be from Wizz.
Live in London tonight, it is Thursday, it is September the 9th. I'm Richard Quest. Yes, I mean business.
Good evening. The full business agenda for you in just a moment. But let me remind you, I'm also keeping an eye on what's happening in Washington, and
the U.S. Department of Justice is about to hold a news conference, where it is expected to announce a Federal legal challenge to the controversial
abortion law in Texas.
When that happens, we will be with it. As expected any moment when it happens, we will bring you live coverage and indeed analysis from our
colleagues in the United States. First, though, we will continue with our agenda until it gets underway.
Europe is starting to peel off the Band-Aid and slow down the stimulus, which it steered through the pandemic. The E.C.B. says it will ease off on
the bond buying program that it launched during the height of the crisis. The bank says it has no immediate plans to wind down the program completely
or absolutely raise interest rates.
The E.C.B. President, Christine Lagarde, said not to call it tapering and channeled the former British Prime Minister, Margaret Thatcher
(BEGIN VIDEO CLIP)
MARGARET THATCHER, THEN-BRITISH PRIME MINISTER: To those waiting with bated breath for that favorite media catchphrase the U-turn. I have only one
thing to say. U-turn if you want to.
[LAUGHTER]
[CHEERING AND APPLAUSE]
THATCHER: The lady's not for turning.
[LAUGHTER]
CHRISTINE LAGARDE, PRESIDENT, EUROPEAN CENTRAL BANK: I would preface the -- my first -- my response to your first question by a quote actually in a
way, which is, "The lady isn't tapering." Because what we are doing is recalibrating PEPP, which I'll remind you is the Pandemic Emergency
Purchase Program, and we are recalibrating, just as we did back in December and back in March.
(END VIDEO CLIP)
QUEST: Now whether you call it tapering or not, the intention is clear. The E.C.B. is slowly peeling off the stimulus Band-Aid. It's now to follow
similar measures from the Reserve Bank of Australia, painful. South Korea Central Bank, there it goes. It has already raised interest rates, it is
the first developed economy to do so during the pandemic. In Japan, politicians have pledged more stimulus, and in the U.S., a steady decline
in jobless claims might strengthen the case for tapering at the Fed before year's end.
And Christian Schulz is a European economist and director at Citi, joins me now from Frankfurt. They say first of all, it's not tapering. And secondly,
they've been doing it across the summer, so she is not talking about something they're going to do. They've already done it. Does it hold water?
CHRISTIAN SCHULZ EUROPEAN ECONOMIST AND DIRECTOR, CITI: Well, it isn't tapering, if the first justification that they gave for it is true, which
is that financial conditions have improved and therefore, more asset purchases are necessary, the same pace is necessary. In that case, it's not
tapering, because we still have very favorable financial conditions and everything is fine.
But they gave a second reason for the tapering and that is that the inflation outlook improved. Now, that does sound suspiciously like tapering
because it means that these things -- things are well on track and less support is needed. That is the definition of tapering, of course.
QUEST: Right. We are in a warning for the Department of Justice. We need to go to that now. We'll come back to you if we can after.
MERRICK GARLAND, U.S. ATTORNEY GENERAL: Today, after a careful assessment of the facts and the law, the Justice Department has filed a lawsuit
against the State of Texas.
[15:05:00]
GARLAND: Our position is set out in detail in our complaint. Its basis is as follows:
SB-8 bans nearly all abortions in the state after six weeks of pregnancy, before many women even know they are pregnant, and months before a
pregnancy is viable.
It does so even in cases of rape, sexual abuse, or incest. And it further prohibits any effort to aid the doctors who provide pre-viability abortions
or the women who seek them. The act is clearly unconstitutional under longstanding Supreme Court precedent.
Those precedents hold in the words of Planned Parenthood vs. Casey that, quote: "Regardless of whether exceptions are made for particular
circumstances, a state may not prohibit any woman from making the ultimate decision to terminate her pregnancy before viability."
Texas does not dispute that it statute violates Supreme Court precedent. Instead, the statute includes an unprecedented scheme to, in the Chief
Justice's words, quote: "insulate the state from responsibility," close quote.
It does not rely on the state's executive branch to enforce the law, as is the norm in Texas and everywhere else. Rather, the statute deputizes all
private citizens, without any showing of personal connection or injury, to serve as bounty hunters, authorized to recover at least $10,000.00 per
claim from individuals who facilitate a woman's exercise of her constitutional rights.
The obvious and expressly acknowledged intention of this statutory scheme is to prevent women from exercising their constitutional rights by
thwarting judicial review for as long as possible.
Thus far, the law has had its intended effect. Because the statute makes it too risky for an abortion clinic to stay open, abortion providers have
ceased providing services. This leaves women in Texas unable to exercise their constitutional rights and unable to obtain judicial review at the
very moment they need it.
This kind of scheme to nullify the Constitution of the United States is one that all Americans, whatever their politics or party, should fear. If it
prevails, it may become a model for action in other areas by other states and with respect to other constitutional rights and judicial precedents,
nor need one think long or hard to realize the damage that would be done to our society if states were allowed to implement laws that empower any
private individual to infringe on another's constitutionally protected rights in this way.
The United States has the authority and the responsibility to ensure that no state can deprive individuals of their constitutional rights through a
legislative scheme specifically designed to prevent the vindication of those rights.
The United States also brings this suit to assert other federal interests that SB-8 unconstitutionally impairs. Among other things, SB-8 conflicts
with Federal law by prohibiting Federal agencies from exercising their authorities and carrying out their responsibilities under Federal laws
relating to abortion services.
It also subjects Federal employees and non-governmental partners who implement those laws to civil liability and penalties. Among the Federal
agencies and programs whose operations the statute unconstitutionally restricts are the Labor Department's Job Corps program, the Defense
Department's TRICARE health program, the Office of Refugee Resettlement, the Bureau of Prisons, the Centers for Medicare and Medicaid Services, and
the Office of Personnel Management.
The complaint therefore seeks a declaratory judgment that SB-8 is invalid under the Supremacy Clause and the 14th Amendment, is preempted by Federal
law, and violates the doctrine of intergovernmental immunity.
The United States also seeks a permanent and preliminary injunction prohibiting enforcement of the statute against the State of Texas,
including against the state's officers, employees, and agents, and private parties it has effectively deputized who would bring suit under SB-8.
[15:10:11]
GARLAND: The Department of Justice has a duty to defend the Constitution of the United States and to uphold the rule of law. Today, we fulfill that
duty by filing the lawsuit I have just described. Now, before I take some questions, I want to say a few words to the American people on the eve of
the 20th anniversary of the attacks of September 11, 2001.
That day is seared into all of our memories. Nothing we can do or say can replace the loss so many endured that day. Nothing can change the profound
way the events of September 11 altered us individually and collectively as a nation.
And let there be no doubt the threat from terrorists, from foreign terrorists, like those involved in the September 11th attack is one we must
constantly guard against. But what we can do and what we have done is learn from the past to better anticipate and prepare for the next threat and to
seek to disrupt it.
As we mark this anniversary, we rededicate ourselves at the Justice Department to doing all we can to protect the American people from
terrorism in all its forms, whether originating from abroad or at home, and in doing so in a manner that is consistent with our values and the rule of
law.
With that, I'm happy to take questions.
QUESTION: Attorney General Garland, is there a provision in the Texas law that you personally find especially concerning?
GARLAND: I think I have described all the provisions that I find especially concerning. And this -- and the complaint does that in even more detail, so
I wouldn't pick any one.
QUESTION: There's been several G.O.P. lawmakers who said that they will follow Texas' lead.
And I was wondering if you expect D.O.J. to be involved in similar actions against other states? Like, would it be a leap to say that this is -- this
could be one of several similar actions?
GARLAND: Well, as I said in my remarks, the risk here, the greater risk here, and the additional and further risk here is that other states will
follow similar models with respect not only to this constitutional right, but, theoretically against any constitutional right and in any other state.
So, if another state uses the same kind of provisions to deprive its citizens of their constitutional rights, and, in particular, to deprive
their citizens of the ability to seek immediate review, we will bring the same kind of lawsuit.
QUESTION: So, there had been some pressure, it seems, from Democratic lawmakers on the Hill and anti-abortion groups and even, some could argue,
from the White House on the Department of Justice to do something about this Texas law.
Did you feel any of that pressure? Is that any -- and did that play any role in this?
GARLAND: The Department of Justice does not file lawsuits based on pressure. We carefully evaluated the law and the facts. And this complaint
expresses our view about the law and the facts.
UNIDENTIFIED MALE: All right, thanks, everybody.
GARLAND: Thank you all.
ALISYN CAMEROTA, CNN HOST: Okay, we have been listening there to the Attorney General, Merrick Garland, lay out the legal logic of bringing a
lawsuit against Texas, which they have decided to do today.
So let's bring in chief political analyst Gloria Borger, Supreme Court analyst Joan Biskupic, and chief legal analyst Jeffrey Toobin.
Jeffrey, I will start with you, because I know you have been listening along. What did you hear? And what did you think of the logic?
JEFFREY TOOBIN, CNN CHIEF LEGAL ANALYST: Well, I thought it was a very convincing explanation of what's wrong with the law. It was less convincing
as a legal case.
I think this is going to be a very difficult lawsuit for the administration to win --
CAMEROTA: Why?
TOOBIN: Starting with the question of standing. How was the Justice -- you can't just file a lawsuit because you don't like a law. The issue of do you
have the injury in fact -- how has the Federal government been injured?
You notice that Attorney General Garland mentioned several Federal agencies that he said were affected. I think the defendants in this case are going
to say, the injury, if there is any injury to those Federal agencies, is too small and insignificant to merit the filing of a lawsuit.
That's going to be a big challenge in this case. But the fact that the Federal government is in this case is a big deal, and the Justice
Department is doing what it can.
[15:15:07]
TOOBIN: The question is whether the courts will agree. And I think that's very much an open question.
VICTOR BLACKWELL, CNN HOST: And, Joan, I mean, it's important that we remind people how we got here by the decision not to act on behalf of the
Supreme Court, and then the makeup of the court if this lawsuit then reaches them again, the likelihood that the D.O.J. will be successful.
JOAN BISKUPIC, CNN SUPREME COURT ANALYST: Well, first of all, I think that this was a pretty muscular sounding lawsuit.
Jeff is right that they went after provisions that could affect the Federal agencies. But, also, the overriding complaint here is that the Supremacy
Clause, which gives the Federal Constitution precedence over anything that happens in Texas, is the main basis for this.
And Merrick Garland -- who I just have to mention Merrick Garland in another life would have been sitting on the Supreme Court if he hadn't been
blocked from appointment some five years ago. But it seemed like he was bringing together a couple different grounds here that could fly with this
Supreme Court.
You're exactly right. With this new makeup, 6-3 conservative dominance over the three liberals, it will be an uphill battle at the Supreme Court, and
probably even in the lower Federal Courts. Remember, this was filed in the Western District of Texas, and it goes up through the Fifth Circuit. That's
a very conservative Appeals Court to face for the Biden administration.
But I think, at this point, the main message from Merrick Garland was, you tried to evade the law, you tried to set up a scheme that, in essence,
would just subvert the Federal Constitution and a woman's right that's been established for nearly a half-century, and the law will follow you even
though you try to get around it.
So I think your question is exactly right about how it will fare. But I think they're trying to bring a couple different grounds here. And maybe
one of them will succeed in the end. And in the interim, maybe they can get a temporary -- an injunction to block the law from being enforced by the
private citizens who might bring these cases.
CAMEROTA: Gloria, you heard one of the reporters there bring up the question of if the Justice Department was succumbing to any political
pressure, because we do know that there has been pressure on the White House.
GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Sure.
CAMEROTA: And pressure from Democrats to do something. Don't let this happen in Texas. So, the Justice -- I mean, Merrick Garland said, no, of
course not. But that political pressure exists.
BORGER: Well, of course, there is political pressure. Look, I would argue that, in many ways, this gives the Democrats an issue that they can rally
around, because if you listen to Merrick Garland describe this law as starkly as he did, he said this relies on private citizens, and he talked
about them serving as bounty hunters, getting $10,000.00 reward for turning in a neighbor who was helping somebody to get an abortion or knew about
somebody getting an abortion.
People hear that, and the Democrats are trying to say, just listen to what this law does, and that is exactly what Merrick Garland was saying today.
And, sure, there's pressure from Democrats saying, like, we have to use this, yes, it's an okay political issue, it's a good political issue for
us, it will galvanize our base, et cetera, et cetera, but it is also an affront to the Constitution more importantly.
And I think that is why Garland kept saying, over and over and over again, we don't appoint vigilantes to take the law into their own hands, whether
it be about this issue or any other issue. And so what he tried to do today, I think effectively, was distill it for the American people to hear.
CAMEROTA: Yes.
TOOBIN: The big change is that this was an affront to the Constitution if you believe that Roe v. Wade is still good law.
BORGER: Right.
TOOBIN: And the problem the Federal government faces here is that five Supreme Court Justices last week let this law go into effect, even though
it so clearly conflicts with Roe v. Wade ...
BORGER: Temporarily.
TOOBIN: ... and all the decisions since then. That's the problem that abortion rights supporters face in the Federal Courts today, and this is a
lawsuit in the Federal Court.
BORGER: Right.
BLACKWELL: So, Jeffrey, we had a doctor on in the last hour who said that, on a typical day, he offered services to 20 to 30 women. However, after
this law was implemented, that number went to six who came in for services. He had to turn away three.
For women who are hoping that this law will be overturned or blocked, what's the timing potentially for them to see some impact?
TOOBIN: Well, this is what's so interesting procedurally about the situation. Many people thought that, in the normal course of business, if a
state passes a law that is clearly in conflict with Supreme Court precedent, as this one was.
[15:20:08]
BLACKWELL: Yes.
TOOBIN: You would get a stay while it is litigated.
What makes the Supreme Court's decision last week so significant is that they did not agree to a stay. They said, no, the law can go into effect.
That suggests to me that it's going to be difficult to get a stay, even with this very important lawsuit filed by the Justice Department.
Again, what makes this law and the reaction to it so significant is that this is the first time since 1973 that abortion is effectively illegal in a
major -- in any part of the United States. And the Supreme Court said, that's okay.
That's what's so chilling about this case. And, frankly, I don't know that the Justice Department's lawsuit changes anything. We will see as it starts
to move through the system, but the status quo today is that abortion is effectively illegal in Texas.
CAMEROTA: And, Joan, I mean, we have touched on this, but they did it through, you know, this tricky maneuver. I mean, you heard the Attorney
General repeatedly call it a statutory scheme, not even really a law, a statutory scheme. And so what does that mean?
BISKUPIC: That's right. I mean, well, first of all, he was -- he was rightly picking up on language of certainly no liberal, Chief Justice John
Roberts, who dissented from that order that allowed the law to take effect. And Attorney General Garland used much of the Chief's language there
referring to how unprecedented this was, and to reinforce the idea that this was designed to evade Federal law, the U.S. Constitution, and that has
got to mean something.
You know, if you just step back and say we're just going to think about procedural lanes here, we're going to think about who is rightly sued,
who's not rightly sued, Texas was essentially gaming the system.
And Chief Justice Roberts didn't say that out loud, but that's effectively what he said. And that's effectively what Merrick Garland is saying here.
You can't set up a scheme -- and he used the word scheme rightly -- that says that this cannot be challenged, when it is so patently against 50
years of precedent.
And the other thing I would say about Roe. Roe is supposed to still be the law, and what even the majority that refuse to block this law said, well,
we're not saying anything about abortion, we're not saying anything about whether this law is actually constitutional or not constitutional.
And maybe some lower court judges can hang their hats on that, saying, well, the court, despite allowing this to take effect, was emphatic in
saying that it's not declaring its constitutionality yet. But the truth is that, for nearly 50 years, America has had this right. And how could it
evaporate essentially overnight? You know about 10 days ago when it did, and not have someone be able to do something about it or have not someone,
not just Attorney General Merrick Garland, but the nation's Federal Courts?
So, to your question, Alisyn, yes, everyone's calling it a scheme, because that's what it was.
TOOBIN: But it worked.
BORGER: But, right, it worked. But think about 59 percent of the American public believes that abortion should be legal; 35 percent of Republicans
believe abortion should be legal. The question that I have is, women voters, listening to what Merrick Garland said today, suburban women that
Republicans have had a lot of problems with, what are they going to think?
What are they going to think when they hear about this plan, this scheme, as Garland put it that can now go into effect, with vigilantes out there
getting monetary rewards for talking about other people's private business?
CAMEROTA: All right, Gloria Borger, Joan Biskupic, Jeffrey Toobin, thank you very much for helping us analyze the breaking news that we just had.
BLACKWELL: All right, in a first for the nation, one of America's largest school districts, Los Angeles, is expected to vote on a vaccine mandate for
eligible students.
We will talk to a school board member next.
(COMMERCIAL BREAK)
QUEST: A Qatar Airways plane from Kabul has now landed in Doha. It's the first flight via charter to take off from Kabul since U.S. and other
international troops left the country. More than a hundred passengers were on board. Some of them knew U.S., German, or U.K. citizens. The Taliban had
agreed to the flight and had to clear them first.
The White House said the Taliban had been cooperative in getting Americans on the flight. Nic Robertson is in Kabul right now. So, the logistics of
this are significant, mostly that the Taliban agreed to let the thing go ahead.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: And they followed through because this is what we've been hearing from the British, from the
American Secretary of State Antony Blinken in the region until yesterday, say very clearly, you know, we've heard what the Taliban said, let's see
what they do.
And on this, they came through. There is expected to be another flight. This, of course, as you say, the first commercial international flight
coming out of the airport here in Kabul. It was a charter, 113 people; 13 Brits we understand, over 30 Americans on board.
But this is only part of the problem. There are many, many, many other people, many Afghans who want to get out and this is going to be the real
test going forward.
QUEST: Here though, they had visas or passports, a dual nationality, we believe. The test will also be surely Nic, when Afghans themselves who may
not have those watertight documents try to leave.
ROBERTSON: Who were in the process of trying to get those documents, who had even some of them don't have passports at the moment. Yes, I mean, if
the embassy had remained open, these are people who may have been able to proven their eligibility, and if those people are not allowed out this,
also, as you say, is a test for the United States to see what the Taliban is going to do.
Now, the Taliban has said that they will comply. But there's a lot of people living in that big, big shadow of doubt at the moment -- Richard.
QUEST: Nic, the ability to ramp up now, to get the airport open. I know that Qataris have been opening up, but how much of this is a priority for
the Taliban?
ROBERTSON: It's a big priority. They absolutely need that international connectivity. They absolutely need to be seen to be working with the
international community because they need the international humanitarian aid.
Pakistan Air Force today flew in a C-130, it had had aid on board. They say that more aid will be coming. But it's those passengers that potentially
can bring business. The sorts of things that the Taliban are missing at the moment is any seemingly real big desire to get on and do business with
them. So the only way to really do that face-to-face is for the airport to be open. So, we're told it is 90 percent ready.
[15:30:16]
We're told that -- or we understand that we may hear an announcement that indicates that many of those former professionals, who worked at the
airport, doing security, doing other controls and checks, will be coming back.
That has to be tested. We have to see how that plays out. If that happens, then, yes, we're expecting Ariana and Kam Air, two of the Afghan national
carriers, to get back into international operations as well. I think you can expect Pakistani International Airlines, PIA, to be coming up, once
they deem it to be a safe route for them. And obviously Qatar is in the game as well, too; unlikely, Turkey.
QUEST: Nic Robertson, who is In Kabul, Nic. thank you.
This is QUEST MEANS BUSINESS. More of our business agenda after the break.
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QUEST: President Biden is going to make COVID vaccines mandatory for all federal workers. Meanwhile, the U.S. Labor Department has just announced
moments ago it is to require all businesses with 100-plus employees to ensure workers are vaccinated or tested.
This will be a major development, of course, in which it would move forward. But to understand -- Matt Egan is with us.
Two things here, Matt, firstly, the policy of the administration, the executive order that the president is expected to sign in the next hour or
so.
And then, secondly, this issue of all companies with 100-plus, vaccinated or tested. Let's start with that latest development.
How significant?
MATT EGAN, CNN BUSINESS SENIOR WRITER: Yes, I do think that is a significant announcement that we're hearing. Let me read to you what we
have on it.
The Department of Labor says it will require businesses with 100-plus people to ensure workers are vaccinated or that they're tested weekly.
[15:35:00]
EGAN: And this, the announcement says that companies could face thousands of dollars in fines per employee if they don't comply.
Clearly, this shows that the federal government is trying to really spur action from the private sector. And as you mentioned, this comes on top of
what we already expected to happen today, that President Biden plans to sign this executive order that would require federal workers and
contractors that do business with the federal government to get vaccinated.
Crucially, this new executive order wouldn't give those employees an opt- out if they get regularly tested. And as far as why they're doing this, the White House has said, part of it is because of concern about the Delta
variant, which has obviously driven up death counts and hospitalizations and infections.
And the other reason why they're announcing these steps is a desire to be a model for the private sector to take more action.
QUEST: So the long and short of it is, we look, for example, at the measures taken by United Airlines, basically saying, if you're claiming and
you've been accepted for a religious exemption from vaccination, you're going to end up being on unpaid leave until we work out what we'll do with
you.
The tone, the tenor is, get vaccinated or possibly lose your job or certainly, life will not be easy.
EGAN: That's right. That is definitely the takeaway. With United Airlines, it was a big deal they came out and said, we're going on require our U.S.
workforce to get vaccinated. That came out last month.
What we're now learning is that they're actually telling employees who are granted exemptions for religious or medical purposes that they're going to
be on temporary unpaid leave. And again, they're pointing to worries about the Delta variant.
They say they can no longer allow people who are not vaccinated to be in the workforce.
The exact quote is, "We can no longer allow unvaccinated people back into the workplace until we better understand how they might interact with our
customers and their vaccinated co-workers."
And United pointed out that all the stats, whether cases or hospitalizations or the death count, all of those numbers have gotten worse
just in the last month since United announced this vaccination mandate.
QUEST: Matt Egan in New York, thank you.
easyJet shares have plunged and reports the airline is seeking new investment rather than accept a takeover bid from its rival Wizz Air.
easyJet was down 10 percent in London. Wizz Air shares were down 1.25 percent.
easyJet's post pandemic share price has made it vulnerable. Now when I spoke to Wizz Air's chief executive, this was last year, he said that, for
all its challenges, the pandemic had brought about opportunities.
(BEGIN VIDEO CLIP)
JOZSEF VARADI, CEO, WIZZ AIR: I think we have a unique position to step change our presence in the marketplace because simply, in good times,
everyone sort of shines. But in difficult times, you will really see the difference.
And I think we have a position here, where we are going to exploit. And we are still looking at growing the business and taking advantage of the
situation. And we will see a lot of cheap SSBBC, much more access to our airport capacity.
We will see a lot more demand on survival (ph) airlines, simply because they are not in a financial position to do so. And I think that gives us
the opportunity to step up. and this is what we are planning on.
(END VIDEO CLIP)
QUEST: Well, when you listen to that, suddenly it all becomes a bit clearer. easyJet which had strengthened the balance sheet already, is now
going for another rights issue to strengthen it further.
ANNA STEWART, CNN CORRESPONDENT: They have. Since the pandemic began, they have already raised $7.6 billion in debt and equity. And today another $1.7
billion rights issue.
And share prices are down 10 percent. clearly investors aren't particularly happy with this strategy. It really has dual purposes from the easyJet side
of things. We can comment on the bid offer.
But in terms of the issue they're doing here, they're saying that it is both to bolster the balance sheet and help see them through the next few
months but also to seize opportunities.
So in that sense, they share Wizz Air's strategy in terms of they want to be ready to gobble up any new stocks that come into the market. It is a bit
of a winner takes all strategy.
QUEST: What is interesting, Wizz has packed its bag and gone; having been rebuffed -- and he was very clear in the statement that it undervalued the
company. But normally, this would put the airline in play. It has not done so now.
STEWART: No, not necessarily. It was interesting. He said it undervalued the company. It was a unanimous decision. The bidder is not coming back
with another offer.
I think it sees itself very much as the hunter, not the prey here. It wants to gobble up capacity and new stocks. But possibly differently to Wizz Air
because if we look at the comparison here, easyJet probably wants slots from legacy carriers, probably from higher end airports.
[15:40:00]
STEWART: In that sense, they're not competing on the low-cost carrier system that many believe them to be. And what is so interesting, if you
look at European share prices of the airlines, if you look at them, the only two airlines that have recovered their share price to prepandemic
levels, Wizz Air and Ryanair.
QUEST: That has not gone unnoticed because one thing about Varity and Wizz is the cost base of the airline is exceptionally low, along with Michael
over at Ryanair -- and the word is that the others have allowed themselves not to make the necessary changes yet or deep enough.
STEWART: Exactly. So we really need to see what easyJet will do with the extra money.
Where will they get the growth from?
Is it from the legacy carriers rather than trying to compete with Wizz Air and Ryanair?
QUEST: Anna, fascinating. Thank you.
Coming up next, QUEST MEANS BUSINESS. An unusual item on the menu for you. It's purple sea urchins. Apparently eating them could help the ecosystem.
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QUEST: It is our Call to Earth: California's kelp forests are under threat of an explosion of purple sea urchins, threatening their incredible marine
life and ability to help fight climate change. Now an enterprising environmentally minded group has come together to find a way to keep these
kelp eating urchins into a premium sustainable food source.
(BEGIN VIDEOTAPE)
ANNA COREN, CNN ANCHOR AND CORRESPONDENT (voice-over): For these Santa Barbara urchin divers, battling sharks, swells and spikes is all in a day's
work. But despite the dangers, Stephanie Mutz and Harry Lequornik have found a home in the ocean.
STEPHANIE MUTZ, DIVER: I think both of us are more comfortable underwater than on land.
COREN (voice-over): Then home is amid California's kelp forests, some of the world's most diverse and productive marine ecosystems.
[15:45:00]
COREN (voice-over): Supporting over 700 species, they absorb huge amounts of carbon dioxide in the ocean helping to combat climate change. But over
the years these divers have seen changes due to warming waters.
MUTZ: Healthy systems are always changing. The rate at which things are changing concerns me. So other organisms are going to have to or starting
to have a difficult time adapting to the changes.
HARRY LEQUORNIK, DIVER: In recent years, sharks have suddenly become a problem. The warm water pushed a lot of them up.
COREN (voice-over): It is an ecosystem they want to protect and also harvest.
California Gold is the nickname for the state's famous Red Sea urchins.
MUTZ: They taste like avocados and butter and salt and sweetness and with a creamy texture, a custardy texture.
LEQUORNIK: California has some of the most prolific kelp beds in the world with Macrocystis. It is what gives the urchin that really sweet taste.
COREN (voice-over): But Red Sea urchin numbers have declined in recent years, as populations of their smaller purple cousins have exploded.
This top urchin predator, the sunflower starfish, was decimated by a disease thought to have been spread by a marine heat wave in 2013, leading
to an excess of kelp-eating purple urchins, which have ravaged California's kelp forests already under threat from pollution, climate change and urban
development.
These starved, zombielike urchins can survive for decades with little food. Sucking the life out of the ecosystem, they are commercially worthless for
divers -- until now.
To find a way to feed both the urchins and the insatiable market for their seafood, Mutz and Lequornik have teamed up with local aquaculture farmer,
Doug Bush.
DOUG BUSH, AQUACULTURE FARMER: We started bringing in purple sea urchins from the urchin barrens and not growing them but feeding them with these
seaweeds that we were already working with in order to take up an urchin product which essentially had no market value because an urchin coming from
a barren is empty and devoid of roe, and turning it into a very, very high- value, high-quality seafood product in the space of about 12 weeks.
UNIDENTIFIED MALE: It is always a little bit like a surprise. Just absolutely stuffed now.
COREN (voice-over): Mutz then sells those fattened urchins directly to customers and to local restaurants, like Industrial Eats.
JEFF OLSSON, OWNER, INDUSTRIAL EATS: They're amazing. I'd forgotten -- they're much sweeter than the reds. It is an amazing benefit to be able to
serve a product that's so good and that is having the negative effects on the local marine environment.
MUTZ: Yes, we need more of those purple urchins utilized outside of the ocean in people's stomachs.
COREN (voice-over): While this local business is unlikely to make a dent in the scale of the problem, it is part of a growing industry, looking to
capitalize on purple urchins while helping to restore California's kelp forests.
BUSH: We have to be the leaders in the space to demonstrate that that trajectory exists. We can conserve and manage the resource for the net
benefit of California's economy and for the net benefit of the coastal ecosystem.
(END VIDEOTAPE)
QUEST: Let us know what you're doing to answer this call, #CallToEarth.
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[15:50:00]
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QUEST: Beijing is telling its tech giants not to focus so much on profits. Chinese state media said regulators summoned there to major gaming
companies like Tencent and NetEase for a talk about recent restrictions. Children across China have recently been banned from playing video games
online during weekdays.
Clare Sebastian is with us.
The temptation is to say this is the Chinese government beating up on these companies. The reality is, are we in a situation where, in many of our
societies, we are saying that children are spending too long on these video games when they should be doing homework or more studious things.
And China is just one country brave enough to do something about it?
CLARE SEBASTIAN, CNN CORRESPONDENT: Yes. I think it is an extreme measure banning children from playing games at all during the week under 18. So,
yes, there are many governments and many parents around the world who would sympathize with the need to rein in the screen time of children.
But this meeting, the summoning of these gaming companies, coming a week or so after the announcement that they were restricting the gaming of
children, it was very much viewed in the context of the recent crackdown that we've seen both on tech companies and the private sector in China.
And also, the increasing focus the government has on daily life; in particular, that of young people. We've seen them, with the education
sector, banning the use of foreign textbooks, recently banning online and private education companies from making a profit as well.
It's a push toward a more wholesome China, one where the party line is more a part of daily life because as well as calling on these companies to
enforce these limitations in the meeting, they called on them to sort of ban any kind of moral values in the games that the government didn't like,
things like violence or obscenity.
And they asked them to strengthen their political positions. In a one-party system, there is really only one political position they can have.
QUEST: The only thing I'm surprised about is that we are surprised. I mean, we know what the system is -- and maybe under Xi we've all been allowed to
think it is capitalism lite and steady but it's not.
SEBASTIAN: But it is evolving and I think as this regulatory crackdown moves on, we've seen it take on various different threads. The recent
announcement from Xi Jinping, that he's focusing on what he's calling common prosperity, a redistribution of wealth, has put some people on
notice.
We heard, according to the "Financial Times," comments from Cathie Wood of Ark Invest today, that she is actually dramatically cutting back her China
holdings. She sees this as something of a reset.
The trigger for her was that crackdown on the education sector that we saw in July. They said this is social engineering. And she will only put her
money only into the companies that are toeing the party line, that are currying favor with Beijing.
I think the real question for investors is, how do you approach this?
Are Chinese stocks uninvestable?
Or do you see it like BlackRock, as an opportunity to get into what they call more quality growth in China?
QUEST: Fascinating. Clare Sebastian, thank you.
To Wall Street, where things are just about to wrap up for the day. We've got about six minutes left of trading. The Dow is down, despite fewer
Americans applying for jobless benefits last week.
And you can see that they absolutely bifurcated, with the early part of the day, which was sort of just a kneejerk from yesterday, and then solidly
down. I know I said at the beginning and I repeat it again, the losses are not great.
That shows that there is a mentality there in the market of wait and see and see what's happening. And ongoing concerns about the impact of the
Delta variant.
[15:55:00]
QUEST: To the 30 and Nike was the big winner as was Boeing, which regained some of Wednesday's losses. But once again, the losses, obviously, the
markets are down so the losses outweigh the gains. But they are heavier. There isn't one 2 percent gain of any of the Dow 30.
But there are three 2 percent losses of major ones, like J&J and Merck. And they were the ones dragging the index down. That's the markets. That's the
way things are looking. We will take a "Profitable Moment" after the break.
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QUEST: Tonight's "Profitable Moment": is Christine Lagarde the new monetary Iron Lady?
When she used that particular phrase about, "The lady is not for turning," or, in her case, for reducing her bond purchases, well, immediately
everybody starts to ask, what is the ECB up to?
If she is not for tapering, what are they doing?
Well, the various purchase programs of the ECB, you have the third covered bond purchase program, the asset-backed security purchase program, the
public sector purchase program, the corporate sector purchase program and the partridge in a pear tree, the pandemic emergency purchase program.
Now the reality is the ECB, even if Madame Lagarde is not tapering, is still buying bonds, hand over fist in the tens of billions and will
continue to do so. Worse and also, interest rates still remain at rock bottom negative levels.
So even if this is tapering, don't call it tapering. Whatever it is, the monetary policy remains extremely accommodating. And that's where I think
we're missing the point. The Fed, the ECB, the BOE, whichever you talk about, if you taper, you've still got billions churning into the economy
through these exceptionally low interest rates.
And that's not going to change anytime soon. So yes, Madame Lagarde, the new Iron Monetary Lady.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable.
END
