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Quest Means Business
Italy to Mandate COVID Green Pass for all Workers; Joe Biden Pushes $3.5 Trillion Economic Plan and Higher Taxes on Wealthiest; France Calls Australia-U.S.-U.K. Deal Stab in the Back; Bitcoin Protests in El Salvador; China's Nightmare Evergrande Scenario; Call to Earth; Microsoft Letting Consumer Accounts Ditch Passwords; SpaceX First All-Civilian Crew in Orbit. Aired 3-4p ET
Aired September 16, 2021 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALISON KOSIK, CNN BUSINESS HOST: U.S. markets are mostly lower as we enter the final hour of trading. The Dow has been lower for most of the day.
Those are the markets and these are the main events.
Italy says all workers must have a COVID Green Pass to do their jobs. We will be live in Rome.
Joe Biden admits there is a long way to go in getting his economic agenda passed.
And France is furious with the United States saying it's been stabbed in the back over a submarine deal.
Live from New York, I'm Alison Kosik. It's Thursday, September the 16th. I'm in for Richard Quest, and this is QUEST MEANS BUSINESS.
Good evening. Tonight, Italy becomes the first G7 country to require a COVID Green Pass for all workers, public and private. They will have to
show proof of vaccination, a negative test, or recent recovery from infection before they can go to work.
The Italian government says 75 percent of the eligible population has already been fully vaccinated. That's anyone age 12 and up in Italy.
Our chart here shows data for the entire population, which is why it's a little lower. This measure will take effect on October 15th.
CNN senior international correspondent Ben Wedeman is in Rome for us tonight. Great to see you, Ben. So looking at this, you know, these are
some of the strictest anti-COVID measures in the world.
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, definitely. And this really reflects the concern in Italy, Alison, that the country avoid
yet another spike in coronavirus.
At the moment, cases are relatively low, but of course the worry is that as winter approaches, the number of cases will rise. And keep in mind, of
course, that this country was one of the hardest hit at the beginning of the pandemic last year. And certainly, for instance, Italy has the second
highest death toll from coronavirus in Europe after the U.K.
Now, as you said, this decree will come into effect on the 15th of October and it is draconian. Workers who show up to work without a Green Pass will
be dismissed, but not fired permanently, but without pay. Others who refuse to get this certificate will be fined, as well as employers who do not
check that their employees are in compliance with the law will also be fined.
This is really the latest in a series of measures that have been implemented in recent months to try to convince people, everyone to get
this vaccination. At the beginning of last month, measures were implemented so that you had to show a Green Pass to go to entertainment venues, sports
events, indoor dining, museums, galleries, and so forth.
At the beginning of this month, measures were introduced, so you had to show a Green Pass for domestic air travel, train travel between regions, as
well as sea travel.
There have been sporadic protests against these measures. But by and large, it seems that most political parties, as well as most of the population is
in favor of draconian measures to avoid the kind of nightmare this country saw last year -- Alison.
KOSIK: Ben, how much do you think this Green Pass mandate Italy is becoming a test case for the rest of Europe?
WEDEMAN: It certainly is. Now, there is always going to be some political pushback elsewhere. And Italy, in a sense, is a pioneer -- it was a pioneer
in terms of going through the hell of the worst pandemic, the worst phase of the pandemic last year. And it seems to be setting a standard for trying
to combat a resurgence of the pandemic, now that vaccines are widely available to ages 12 and above.
And therefore, yes, it's definitely, in a sense, a testing ground for how far a government can go in implementing measures that in a sense, compel
the population to become fully vaccinated -- Alison.
KOSIK: Okay. CNN's Ben Wedeman, thank you very much.
KOSIK: Joe Biden is warning the U.S. economy stands at an inflection point. In his speech last hour at the White House, the U.S. President
pitched his stalled infrastructure plans in stark terms.
Mr. Biden told lawmakers, they have a choice: Either returned to the pre- pandemic economy, where the rich are unable to dodge taxes, or chart a new course where the working class has what he calls a fair shot.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: This is an opportunity to be the nation we know we can be, a nation where all of us -- all of us --
not just those at the top are getting to share the benefits of a growing economy in the years ahead.
Let's not squander this moment trying to preserve an economy that hasn't worked too well for Americans for a long time. Let's not look backward,
just trying to rebuild what we had. Let's look forward together as one America.
(END VIDEO CLIP)
KOSIK: Steven Collinson is in Washington for us. Great to see you. So, you know, listening to the President in this speech, and then you think about
actually putting this into action and if you put Republicans aside, the President is facing major headwinds from those even in his own party. There
are their deep divisions in the Democratic Party on how to pay for this.
STEPHEN COLLINSON, CNN WHITE HOUSE REPORTER: That's right, Alison. The U.S. economy is not the only thing that's at an inflection point, the
entire Biden presidency is on the line really in the next few weeks.
The economic and infrastructure plans, trillions of dollars' worth that the Congress is currently considering would make Joe Biden one of the most
historically significant Presidents of modern times. He is trying to really reshape the economy in favor of working class Americans on healthcare,
education, home care for elderly people, climate change spending.
So you know, he really does have to try and overcome these divisions between moderate Democrats like West Virginia Senator Joe Manchin who
doesn't want to spend $3.5 trillion. That's the price of the President's biggest spending plan, and progressives who see that $3.5 trillion is
already a lowball figure and their compromise offer.
The fact is that the Senate is 50/50. The Democrats only have a three-vote majority in the House, so you can see how difficult this is going to be to
squeeze all this through, all the while the Republicans are off stage trying to create as much disruption as they can to try and thwart Biden and
what is really his central project of his entire presidency.
KOSIK: Yes, we shall see how this goes, and then you're hearing about the debt ceiling negotiations kind of being thrown into this as well, just to
add more, you know, more controversy into those negotiations.
Stephen Collinson, thanks so much.
The U.S. economy does appear to be at an inflection point when it comes to the pandemic recovery. The summer began with high hopes for a return to
normal as more people got vaccinated.
In July and August, economists warned the delta variant could quash many of those gains. New retail numbers show Americans actually did more shopping
than expected last month. Retail sales grew 0.7 percent from July. They were almost two percent higher if you leave out car sales.
After roaring back from pandemic lows, sales have leveled out in recent months. The U.S. Commerce Secretary tells CNN, business could help the
economy by making COVID vaccinations a work requirement.
(BEGIN VIDEO CLIP)
GINA RAIMONDO, U.S. COMMERCE SECRETARY: We were moving in a much better direction for restaurants, hotels, and then the delta variant started to
spike. And so, the single best thing that we can do quickly, immediately to help restaurants, help hotels, help hospitality is for everybody to get
vaccinated, so that waiters and waitresses feel comfortable going back to work, people feel comfortable going out for dinner, business travel can
pick up again and business travelers can, you know, spend money in restaurants, that I cannot emphasize enough.
Everybody needs to get vaccinated and businesses should really consider requiring their employees to get vaccinated.
(END VIDEO CLIP)
KOSIK: Matt Egan is live for us in New York. Matt, great to see you. You know, after getting those retail sales numbers, it seems like we've got an
economic picture that's mixed, you know, retail sales numbers, posting a surprise gain, jobless benefits increasing a little more than expected. How
do you see the economy shaping up at this point?
MATT EGAN, CNN REPORTER: Well, Alison, clearly the pandemic continues to weigh on the recovery. We've seen the impact from the delta variant slowing
air travel and restaurant reservations, briefly slowing hotel reservations as well. But there is hope that maybe if the cases have peaked, that
perhaps the economy can kind of get back on track.
And what is interesting is that you heard from the Commerce Secretary there, this emphasis on vaccination and how important it is for people to
get vaccinated and for businesses to encourage their employees and in some cases their customers to get vaccinated.
EGAN: And we heard that message yesterday from the White House Chief of Staff, Ron Klain as well, he was speaking at the SALT Conference, and he
said that essentially, vaccines are a way to stimulate the economy. And it makes a lot of sense when you think about the fact that COVID has been just
such an overhang here for 18 months, and we do have vaccines that are available, that are safe and effective.
And if more people do get vaccinated, then it should be able to remove some of that overhang on the economy and perhaps allow the job market to finally
fully recover here, Alison.
KOSIK: But with this mixed picture that we're seeing in the economy, I'm talking about the data that we've been getting, where does that leave the
Fed? The Fed is having its September meeting next week. Do you see the Fed moving its timetable back any?
EGAN: I don't think so. I think that -- you know, more than the retail sales report that we heard from today, which was better than expected,
there was the CPI -- the Consumer Price Index that came out earlier this week and that did show that inflation remains high, but that prices have
cooled off a bit in recent months and so that is good news, especially if you exclude food and energy that core inflation has certainly cooled off.
So I think that will take some of the pressure off the Fed from having to move more quickly to you know, taper, the bond purchases, quantitative
easing, but I do think that we've heard from a number of Fed officials that they are uncomfortable with being in this emergency mode for so long given
that the economy is recovering, and also given what we're seeing in markets.
Obviously, the stock market is near record highs. The market has more than doubled from the pandemic lows, but also the real estate market. I mean,
we're seeing a red hot housing market and it is hard to justify why the Fed is buying $40 billion or so mortgage backed securities every single month
and that is actually making it easier to borrow and it is inflating home prices even further.
So I think enough Fed officials don't really feel comfortable with where monetary policy is and they do want to begin to finally start to slow some
of these purchases later this year.
KOSIK: And we will get more indication of that next week, Wednesday. We will hear from the Fed.
Matt Egan, great to get your analysis today.
Restaurants and retail stores were among the hardest hit businesses during the bleakest days of the pandemic. Some now say a labor shortage threatens
to throw their recovery into reverse.
As Vanessa Yurkevich reports, many small business owners are scrambling to find creative solutions.
VANESSA YURKEVICH, CNN BUSINESS AND POLITICS REPORTER (voice-over): This is Astro. It works at Sergio's Restaurant in Miami.
CARLOS GAZITUA, CEO, SERGIO'S FAMILY RESTAURANT: Our employees, once they saw it and felt it after two hours. They were like, wait a minute, we have
YURKEVICH (voice-over): Astro assists human staff here and in five other locations. Astro is not just a novelty, but a necessity.
GAZITUA: Primarily the robot was to prevent burnout. Having robots be personal assistants to our employees, not taking away jobs, but helping
YURKEVICH (voice-over): That's because hiring in leisure and hospitality was flat last month after clawing back from a record eight million jobs
lost. With restaurants and bars losing 42,000 jobs.
SEAN KENNEDY, EVP, PUBLIC AFFAIRS, NATIONAL RESTAURANT ASSOCIATION: The restaurant recovery is now moving in reverse. We still have 90,000
restaurants that are closed permanently or long term. We're about one million jobs below where we should be before this pandemic.
YURKEVICH (voice-over): At Sergio's, the summer brought in fresh help -- students.
GAZITUA: But unfortunately, those students are gone already.
YURKEVICH (voice-over): Leaving restaurants like his facing an intense labor shortage.
GAZITUA: I think it's almost like being stuck in the mud. You know, you take a step forward, and you want to take -- you want to move your other
foot, but it's very hard.
YURKEVICH (voice-over): In retail, the industry is taking steps backwards. About 1.3 million people quit retail jobs in just June and July. And in
August, of the 28,000 lost retail jobs, most of it happened here.
LOU SCADUTO, JR., PRESIDENT AND CEO, FOOD CIRCUS SUPER MARKETS: That's what we're dealing with exactly. You're going to run into a hole on the
shelf, you're going to run into a longer wait at the checkout or a longer wait at the deli counter.
YURKEVICH (voice-over): He's tried raising wages.
YURKEVICH (on camera): Has it worked?
SCADUTO: Not great.
YURKEVICH (voice-over): And this month, a new staffing challenge. President Biden announced businesses with more than 100 employees would be
required to mandate vaccines or weekly testing.
YURKEVICH (on camera): When you hear that initially as a business owner, what do you think?
SCADUTO: You get scared. You do, because that's going to make it that much more difficult for us to continue to operate.
YURKEVICH (voice-over): Vanessa Yurkevich, CNN, Red Bank, New Jersey.
KOSIK: Coming up next on QUEST MEANS BUSINESS.
(BEGIN VIDEO CLIP)
JEAN-YVES LE DRIAN, FRENCH FOREIGN SECRETARY (through translator): It is really to put it plainly, a stab in the back.
(END VIDEO CLIP)
KOSIK: Hear why an international security deal made the French Foreign Minister say those words.
KOSIK: Welcome back.
China has come out strongly against the security deal agreed by Australia, the U.K., and the U.S. As part of it, the U.S. will help Australia acquire
nuclear-powered submarines. A spokesman for the Chinese Foreign Ministry has criticized the move.
(BEGIN VIDEO CLIP)
ZHAO LIJIAN, SPOKESMAN, CHINESE FOREIGN MINISTRY (through translator): The nuclear submarine cooperation between the U.S., the U.K., and Australia has
seriously undermined regional peace and stability, intensifying the arms race and undermined international non-proliferation efforts.
The export of highly sensitive nuclear submarine technology to Australia by the U.S. and the U.K. proves once again that they're using nuclear exports
as a tool for geopolitical game and adopting double standards.
(END VIDEO CLIP)
KOSIK: One country missing out in all of this is France. The country was supposed to sell diesel powered submarines to Australia worth some $65
billion. That's not happening anymore. A U.S. source says White House officials are in contact with their French counterparts who are fuming.
The U.S. Secretary of State Antony Blinken has tried to calm the situation calling France a vital partner. The French Foreign Minister had likened
U.S. actions to those under President Trump. He had even stronger words for Australia.
(BEGIN VIDEO CLIP)
LE DRIAN (through translator): It is really to put it plainly, a stab in the back. We have built a relationship of trust with Australia. This trust
has been betrayed. And today, I'm angry with plenty of bitterness regarding this break. This is not done between allies.
(END VIDEO CLIP)
KOSIK: Nina dos Santos is in London for us. We also have Cyril Vanier standing by in Paris. Great to see you both.
Nina, I'm going to start with you. This trilateral partnership is obviously rubbing China the wrong way. Is this all about countering China's dominance
in the region.
NINA DOS SANTOS, CNN CORRESPONDENT: It is. But interestingly enough, when this announcement was made with the leaders of those three countries, the
U.K., Australia, and obviously President Biden of the United States, neither of them, none of them mentioned the word "China." But everybody
knows in the background, this is what everybody is concerned about.
It's also part of the famous U.S. administration's pivot towards this part of the world, and it is going to be helping a country that has been facing
the belligerence -- economic belligerence of China. It's had many economic maneuvers and sanctions imposed upon Australia.
DOS SANTOS: And obviously, Australia feels that it wants to be a willing partner here for a slightly more active role in the South China Sea when it
comes to the Indo Pacific region as a whole.
I should point out that this is also a very interesting move for the U.K. because the U.K. thus far is the only other country that the United States
has shared this sensitive nuclear technology with in the last 50 years.
That means that the U.K. is uniquely placed with two companies in particular BAE Systems, and also Rolls Royce, which makes those nuclear
propulsion engines here in the U.K. to try and deliver these eight submarines that are part of this deal.
It's going to be an 18-month planning phase before anything is actually unveiled, but it's not just submarines, by the way, Alison, it also
includes all sorts of cooperation on other important military priorities like cybersecurity, as well as artificial intelligence and various other
sophisticated technologies like long range missile systems -- Alison.
KOSIK: Cyril, meantime, in all this, France is feeling pretty burned by this deal with Australia scrapping its submarines deal with this French
manufacturer. Are there any apologies coming France's way from Australia? From the U.S.?
CYRIL VANIER, CNN CORRESPONDENT: No. No, it really doesn't sound that way. You say France feeling pretty burned. You could say France is seething at
They have invested in years of high level diplomacy to get this deal that they had. They had to deal with Australia. They started negotiating in
2014, then the two governments of France and Australia agreed on a deal to procure conventional submarines back in 2016, so five years ago, and that
was formally inked about two years ago.
And then well, the foreign policy priorities changed half a world away at the White House and the world superpower decides that it wants to
aggressively confront China, that Australia is a major part of that strategy and that Australia needs to be equipped with nuclear-powered
submarines which are faster and can stay undetected longer.
And all of a sudden, badda-boom, France is, you know, years of investment in this and a $65 billion contract become collateral damage of the U.S.
foreign policy. So naturally, France is furious because they did not get heads up from this.
Now, the U.S. says that they were in touch with France, but the French Foreign Minister this morning on French radio said, look, up to a couple of
days ago, we were speaking to the Australians about this submarine deal, and we had no idea that this was coming down the line.
KOSIK: Yes, Nina, what do you think this means for U.S.-China relations? You know, the countries have already been locked in a trade war for more
than a year. Are you thinking this makes it worse?
DOS SANTOS: Well, it's going to make things a lot more strained. But as Cyril was pointing out, you know, obviously, there's going to be strains
with other allies of the United States, important allies, like for instance, France, but there's going to be some tensions as well,
presumably, even if they are being papered over on the surface with some of the people who are key partners to the Five Eyes Intelligence Sharing
Alliance down there in that part of the world, including New Zealand, which has said that these submarines will not be allowed into its waters if they
are nuclear powered.
But going back to China, that's really where you're seeing some of the really strong rhetoric coming out here. As you heard there in your
introduction, China has made it very clear that they believe that building these nuclear powered, not nuclear-armed submarines, is still against the
nuclear non-proliferation treaties.
And they also say that these three countries are plunging themselves back into a Cold War mentality. They said that it is extremely irresponsible,
and also narrow minded to start beefing up this type of military hardware in that part of the world.
But when you take a look at this sophisticated technology of these submarines, and by the way, a lot of diplomats have said that Australia
needed to update its fleet anyway. So some of this might have been on the cards for some time. You can see that they will be able to go further, they
will be able to spend more time in stealth mode, and they will just be a lot more nimble in a part of the world where countries like the U.K.
already sending warships and carriers to do exercises off the coast of Australia to shore up their presence in that part of the world -- Alison.
KOSIK: Okay, Nina dos Santos, Cyril Vanier, thanks so much for all of your reporting and great context.
The Chairman of Turkish Airlines says he is hopeful that next year, the company will enjoy a rebound. The airline which sponsors "Quest's World of
Wonder" on this network is expecting a challenging three months before then.
Richard sat down with the chairman for an exclusive interview and asked him what the delta variant meant for the near future.
M. ILKER, AYCI, CHAIRMAN, TURKISH AIRLINES: There will be really challenging times for the next three months, yes, because of the delta
variant. But at the same time, there is a hope right now. Once more people get vaccinated in the world and more accession to the vaccination and
vaccines and more medical treatment, and right now, the doctors, hospitals, and healthcare right now much more information about that virus.
And people right now are more informed about how to deal with that virus and normalize their life at the same time, instead of isolating them too
much and always finding an excuse of this pandemic to justify their unsuccessful management and mismanagement strategies.
No, no, I think that we're in a better shape and better condition. And we'll get over this one way or another. I'm very hopeful about the next
year, as well, for the next season will be much better, next high season.
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: Do you feel you're flying on a level playing field, if you will? So many of your legacy
carriers, the Lufthansa Group, the Air France Group, the U.S. carriers received very large bailouts direct from government.
Now, they'll have to be repaid in some shape or form, but is it a level playing field for you?
AYCI: We just refused to get governmental funds and we just refused any bailout plans and we just refused any staff layoffs. But instead, on the
contrary, we find our own way to use our own resources and effective management decisions, effective capacity planning, and using the resources
smartly and effectively. And we got over it with this.
We didn't go to government bailout issued, no, no.
QUEST: But does this make it -- but does this make it harder for you to compete with the Lufthansa Groups of this world? The Emirates groups? Does
it make it more difficult?
AYCI: Well, once again, one can say that this is unfair, just to get lots of government fund and competing in a full aegis or so, let's say highly
competitive market with the companies who doesn't get the governmental funds. It is unfair, probably.
But at the same time, it's not relaxing you. Oh, I have governmental funds. For a couple of years, I'll be okay. We went to the contrary. The most
important thing is using your own resources and getting more credibility and having also your staff more dedicated and ready on the operation that
will give you much more confidence and then you don't have to relax yourself.
QUEST: What is it you now need from government, firstly, your own? And secondly, in terms of collectively from governments -- from the E.U., from
the U.S., from I.A.T.A, from I.C.A.O.? What is it that you as an airline now need from government and regulators?
AYCI: I mean, most important thing is we look forward to have smart regulations, smart decisions, we don't want to just stay in one night
decisions. And, and just also, regulation comes also in one night and they expect us to adapt ourselves the next day, or in the same day. It's not the
It's not wise and smart to close the borders or quarantines for very long period of time. And this is not a smart way, but more tests, get
vaccination to people and make all the medical equipment and medical supplies, medicines and vaccines accessible for everyone.
And also, just share the responsibility -- that will be much more helpful to get back in every industry, but particularly in travel business, in
aviation, and tourism.
KOSIK: A huge Chinese real estate company is in danger of default. Now, ratings agencies are warning the fallout could spread far.
KOSIK: Hello. I'm Alison Kosik. There's more QUEST MEANS BUSINESS in a moment.
When some workers in El Salvador are not happy with the recent move to use bitcoin as legal tender.
And no password?
No problem. Microsoft is rolling out new technology that it says could kill those pesky hard to remember passwords for good. Before that, the news
headlines this hour.
KOSIK: Satellite images suggest construction is underway at a North Korean nuclear complex. New pictures show floor space being added at a uranium
enrichment plant. Experts say could that allow the North Koreans to house more centrifuges and increase production of weapons grade nuclear material.
The Dutch foreign minister has now resigned after a majority of lawmakers said she mishandled the evacuation of refugees in Afghanistan. A motion was
drafted in parliament Wednesday, condemning the way the cabinet dealt with the crisis. Her office said it was her own decision to resign.
China has formally applied to join a major Pacific free trade agreement; 11 countries, including Australia, Japan and Canada currently belong to the
comprehensive and progressive agreement for Trans-Pacific Partnership. Those countries account for more than 13 percent of the global economy.
KOSIK: El Salvador's president is accusing the international community of financing protests in his country against its use of bitcoin. He offered no
evidence to back that claim.
Making bitcoin an official currency has caused a backlash in El Salvador. Protesters took to the streets Wednesday to express their anger about some
of the problems of having bitcoin as a legal tender. Rafael Romo talked to cattle ranchers in the country, who still prefer dealing with cash to
dealing with crypto.
RAFAEL ROMO, CNN SR. LATIN AFFAIRS EDITOR (voice-over): They have come from across the country, bringing their best cattle in high hopes for a
Welcome to Aguilares, a town in north central El Salvador, where live cattle trading is a long time tradition. It is the kind of place where you
look at people in the eye.
ROMO (voice-over): When a deal is made, you shake hands and exchange cold, hard cash. Other than feed and pasture, these cattle ranchers now have an
additional worry. They know the government has legalized the new digital currency called bitcoin. And rumors are running rampant.
"The truth is that it is not that simple," this rancher says.
"What if you don't know how much it is worth or how much it will get devalued tomorrow?
"What if it goes up?
"It's like gambling."
Earlier this month, El Salvador became the first country to adopt bitcoin as legal tender in addition to the U.S. dollar. The president said using
bitcoin as legal tender will attract foreign investment, help lower commissions on remittances and give an alternative to people outside the
ROMO: Analysts for the International Monetary Fund, which provided an emergency loan to El Salvador last year and is working on another, have
warned that adopting bitcoin as legal tender poses serious risks to the country's financial stability and integrity.
When the law went into effect on September 7th, the cryptocurrency market crashed, losing billions in value. And the government's digital wallet for
bitcoin has experienced several glitches that were still not fully fixed a week after the launch.
ROMO (voice-over): The younger generations and some business owners have embraced the cryptocurrency. But here in Aguilares, even those who support
the president otherwise say introducing bitcoin was a mistake.
"Everything that he's done is good, at least what he had done so far," this rancher says. "But introducing this currency was not right. Which bank is
backing it?" he wonders.
"You have to be patient and get information about it so that you know how you can best use it and if it is convenient or not," this rancher says. "If
the president is wrong, then we're all wrong."
For now, most of these ranchers say they will stick to what they know, a cash system that has worked just fine for generations. And even though some
are open to using a cryptocurrency in the future, their main worry is that bitcoin can be as volatile as this bull -- Rafael Romo, CNN, Mexico City.
KOSIK: Meanwhile, financial warning signals are flashing in China. Ratings agency Fitch said it is probable the Chinese developer Evergrande will have
some kind of default. It has downgraded the real estate's companies credit to CCC+, saying there could be a ripple effect if it fails to repay its
debt. Kristie Lu Stout has more on Evergrande's struggles.
KRISTIE LU STOUT, CNN ANCHOR AND CORRESPONDENT (voice-over): It is the Chinese giant that lives up to its name. Evergrande is one of the biggest
real estate groups in China. Owner of a football team, it has also built a football academy, thought to be the biggest of its kind.
It is also building the world's biggest football stadium, a massive lotus flower that will seat 100,000.
And its latest claim to fame?
STOUT: The Hong Kong (INAUDIBLE) Evergrande has become China's most indebted developer, with liabilities worth more than $300 billion. And the
cash-strapped company firm is struggling to pay it back.
STOUT (voice-over): Sending its stock price plummeting, prompting ratings agencies to downgrade its status and warning it could default, which would
send shock waves through China's economy.
STOUT: So how did Evergrande get into this mess?
MATTIE BEKINK, CHINA DIRECTOR, ECONOMIST INTELLIGENCE UNIT: It has built as many as 600,000 homes annually and is a mass that looks 56 times bigger
now than it was a decade ago. It has also strayed far from its core business, it sounded a colossal football academy, a bottled water brand
which it then later sold, an electric car company.
STOUT (voice-over): Disgruntled and desperate investors have protested at company headquarters in Xinjiang.
"They cheated me out of all my money. I have nothing left," says one unidentified investor.
The real estate giant said online speculation about its bankruptcy are , quote, "completely untrue," adding, "The company has indeed encountered
unprecedented difficulties at present but the company is determined to do everything possible to restore the operation as usual and protect the
legitimate rights and interests of customers."
That has done little to pacify angry investors in Xinjiang. And elsewhere in China, videos circulating on social media show what is described as an
Evergrande protest in Hainan, in Nanchang (ph) and in Chengdu. CNN could not verify the footage.
In August, China's central bank summoned Evergrande execs and warned the company to reduce its debt. Analysts say it is likely Beijing would
STOUT: Will the Chinese government step in to save it?
BEKINK: Here at the EIU, we do ultimately expect that the government will intervene in Evergrande's case, as it will not allow the company's defaults
to spread into the banking system.
UNIDENTIFIED MALE: The problem is, If large numbers, if those buyers of properties don't receive their properties, then that will cause contagion
into other property developers.
UNIDENTIFIED MALE: People are going to lose confidence.
STOUT (voice-over): There's just too much at stake. China's economy is sputtering because of its aggressive response to the Delta variant and
supply chain issues. Chinese markets have plunged as regulators target tech, education and other private enterprises.
A major default is the last thing China needs. So Evergrande, living up to its name, has become too big to fail -- Kristie Lu Stout, CNN, Hong Kong.
KOSIK: Pressing reset on the idea of passwords. Microsoft is letting its customers ditch theirs in favor of more secure ways of logging on.
KOSIK: Call to Earth is a key part of CNN's commitment to reporting on the climate crisis. This week, we are visiting pioneering Ecuadorean chef
Rodrigo Pacheco, who is also the U.N. goodwill ambassador for plant health. His restaurant embodies the idea of protecting the planet by using
RODRIGO PACHECO, RESTAURATEUR AND U.N. GOODWILL AMBASSADOR FOR PLANT HEALTH (voice-over): Regenerative gastronomy is meant to transform, it is meant
to heal. It is more about getting to know the cycle of life.
We directly connect the guests with the heart of nature. In a world where there is over a billion people hungry and we are promoting new ways of
finding nutrition, that people can actually grow themselves, I think, is a good opportunity.
In my kitchen, it is very simple because we created a restaurant in the middle of a forest. And we don't have a menu. We choose and we select the
best products from foraging from agriculture, from our (INAUDIBLE) fishing that are ready to be served.
PACHECO (voice-over): The pantry of our kitchen is actually out there. When we need an ingredient, we walk, we gather. And then we use it and then
we serve it fresh. And this is life, it is of the energy of the plant and the wisdom of the plant. One-third of the planet is being decertified (ph).
We are losing the diversity and, of course, I am afraid.
The United Nations is telling us that there are 60 harvests left for us. If we all close our eyes and we make an X-ray of our fridges, no matter where
you are in the world, we'll find the same products. The world is going after 20 types of crops.
But there are 8,000 types of edible plants in the world. We need to solve the problem. The solutions have to come from us. What we do (INAUDIBLE), we
have started acquiring different parts of land. We are reconnecting fragmented ecosystems.
Through the implementation of edible forests, an edible forest is an ecosystem that is created by us, where we plant a variety of edible
species, fruits and vegetables. They provide you with food. They provide you with medicine. They are native species. We are not creating artificial
Here around me, there is the arrowroot, with the highest amount of starch of all the plants in the world. You have the passion fruit, you have the
highest amount of serotonin of all plant species on the planet. And when you start planning this ecosystem, you start establishing a relationship
with these species.
We are learning different (INAUDIBLE) ancestral cultures. They Amazon, they use the papaya, (INAUDIBLE) the papaya branch. It is totally empty inside.
When I learned that, we transformed the bar of our restaurant with those troughs. And we have served over 40,000 of those troughs since nine years
Today, climate change is here. And this is a way of gastronomy trying to contain climate change. Gastronomy plays a big role in the good health of
ecosystems, so the more plants, the more climate proof we are, the more resources we have, the more carbon we (INAUDIBLE) the more food we can get.
KOSIK: And we'll continue showcasing inspirational environmental stories like this as part of the initiative at CNN. Let us know what you're doing
to answer the call with the #CallToEarth.
KOSIK: Forget your password. I mean it literally. Microsoft is letting individual customers ditch their passwords and use an app, security key,
email or text message instead.
Microsoft shares are flat today. The software giant started letting commercial accounts go passwordless in March. It says almost everyone at
Microsoft itself has already done so. Compromised passwords have helped hackers breach places like the Colonial pipeline and the United Nations,
just to name a couple.
Vasu Jakkal is Microsoft's corporate vice president of security, compliance and identity marketing and she joins us live from Tucson, Arizona.
Great to see you.
VASU JAKKAL, MICROSOFT. Hi, Alison.
KOSIK: Hi. So is this the answer we've all been waiting for?
No more cyber attacks?
Is this perfection?
Or are there any pitfalls of a passwordless future?
JAKKAL: First, it is great to be here. Thank you for the opportunity.
We absolutely believe the future is passwordless. We're living in one of the most complex cyber attacks situations. We've seen some of the most
sophisticated attacks in the last year.
And we know that passwords are an easy target. You add to it that nobody really likes passwords. When was the first time you said, wow, I really
love my password. You take that inconvenience and that insecurity. We decided that we will go passwordless and that's the announcement we made.
And very excited that anyone with a Microsoft account now can go completely passwordless.
KOSIK: So is this a perfect solution?
What are the pitfalls of it?
Is it perfect?
JAKKAL: So for cybersecurity, you have to take a comprehensive approach. Going passwordless is a very big step toward that. We believe you have to
take things like zero trust. You have to have multifactor authentications but there are two steps. And I think that passwordless is a big step toward
helping you get more secure overall.
KOSIK: This also makes us wonder, for those of us using passwords, whether they're actually working as they're intended to be used. A number of these
hacks have happened because of leaked passwords.
Is that sort of the worst way to secure your information, using a password?
JAKKAL: You know, it is such a great point. Our court are Cecil (ph). He often says that attackers log in. They don't break in. And that's what
we've seen. If you have easy passwords, it is easy for attackers to find them.
There are also passwords that get sold on the dark web. So passwords are easy to get access to. And yet, they've been the most important layer of
security for everything in our digital lives, from email to bank accounts to shopping carts to video games.
As we increasingly live in a hybrid world, where work and home is all bunching together, that is a lot of lost opportunities for both consumers
KOSIK: These ransomware groups always seem to be one step ahead of their target.
What do you think has to happen for us to be proactive instead of reactive?
And will what Microsoft is doing going to help?
JAKKAL: What we have to do is come together as a community and as a village. We've said security is a team sport. No one company can solve
this. This is why passwordless, you need open standards, collaboration, you need intelligence sharing.
Ransomware is on the rise. They are very sophisticated and organized groups, which are targeting ransomware, the average ransom is $300,000.
There are small amounts and large amounts. To do that, you need a comprehensive approach.
You have to think of identity. Starting with passwords is a big step to securing accounts. You need to think about Korean security.
What do you need to do to keep yourself secure?
You need to think about inside out risks. If you're a business, an organization, could that be like information leakage?
Could there be insider risks?
And you need to think about healthy devices and device management. All of these will be incredibly important aspects of the holistic security
KOSIK: All right. Great talking with you, getting all that context from you.
JAKKAL: Thank you. Thank you for the opportunity.
KOSIK: My pleasure.
From technology here on Earth to technology out in space.
KOSIK: The first all amateur space crew is now floating in zero gravity, almost 600 kilometers above the Earth. That's higher than the International
The SpaceX founder, Elon Musk, just tweeted that he spoke with the crew and in his words, "All is well." The SpaceX mission launched Wednesday from
Kennedy Space Center in Florida. The NASA administrator said the commercial space age has arrived and it is and aiming for the moon.
(BEGIN VIDEO CLIP)
BILL NELSON, NASA ADMINISTRATOR: There will be significant commercial landings on the moon. And these landings are going to occur, starting in
just 1.5 years. A lot of scientific experiments, a lot of help and preparation for when our astronauts land on the moon. So the commercial
reality is here with us today.
(END VIDEO CLIP)
KOSIK: There are just moments left to trade on Wall Street. We'll have the final numbers and the closing bell right after this.
KOSIK: And there are moments left to trade on Wall Street. The Dow has been down most of the day, kind of near the flat line right now. It clawed
its way back into the green. It has been struggling to hold on to any gains.
The mixed picture for the Nasdaq and the SNP 500. U.S. retail grew 0.7 percent from July. That came in better than expected and they were nearly 2
percent higher, if you leave out car sales. Also it's a mixed picture with data. We also got retail sales numbers coming in better than expected but
the jobless claims coming in worse than expected.
Let's look at the Dow 30. Most of them are up or down a half percent or less. Salesforce and Home Depot leading the way. Goldman Sachs is at the
Let's see what happened in Europe. The major averages there all finishing in the green more firmly than Wall Street's fight into the close. The best
gains were in Paris. Stocks there finishing half a percent higher. All eyes on China. There is some concern about that big real estate group.
That's QUEST MEANS BUSINESS. I'm Alison Kosik in New York. The closing bell there is ringing in New York. "THE LEAD" starts right now.