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Quest Means Business

World Bank President Admits Bank Made Mistakes With Reports; Fuel Shortages Cause Price Spike Around The World; Fuel Crisis Focusing Attention On Electric Vehicles; Nobel Prize In Economics Awarded For Real- World Experiments; David Card Awarded Nobel Prize For Real-World Experiments; 2021 Nobel Prize Winner On U.S. Minimum Wage Debate. Aired 3- 4p ET

Aired October 11, 2021 - 15:00:00   ET

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

[15:00:18]

RICHARD QUEST, CNN INTERNATIONAL ANCHOR: As we head to the last hour of trade, the start of a new week and the Dow is close to the lows of the day.

Look at that. An interesting day, which we need to sort of parse and understand.

Strong morning, evaporation, markets going down. The markets are unhappy, and the main events of the day.

The World Bank President admits mistakes have been made on the way the group has prepared its report. My exclusive interview with David Malpass on

how he plans to clean up the mess.

British factories are wanting they may have to shut down due to surging energy prices.

And what it looks like when you told you've won the Nobel.

You'll hear from one of the three winners of the economic prize on this program tonight.

We are starting a new week together, live in New York. It's Monday, it is 11th of October. I'm Richard Quest and I mean business.

Good evening. Tonight, the World Bank President admits mistakes were made, a scandal threatens to overshadow the meetings with the I.M.F. in

Washington. In an exclusive interview, President David Malpass admits to me there were certainly mistakes in the bank's processes, and it's prestigious

Doing Business Report.

Last month, an independent law firm found top World Bank officials have put undue pressure on the report's authors to boost the ratings of China and

Saudi Arabia. Those claims have shocked the world of economics.

They've threatened to unseat the current I.M.F. Managing Director Kristalina Georgieva, who was running the World Bank. She was the CEO there

at the time.

Now, the I.M.F. board is meeting today to discuss caregivers future, President David Malpass said he couldn't comment on her fate while that

review is underway, but he joined me for an exclusive interview, as the bank also warned, lower income countries are facing a huge debt burden in

the wake of COVID; one that is unsustainable.

I asked David Malpass, did the bank need to change the way it handled reports in the future?

(BEGIN VIDEOTAPE)

DAVID MALPASS, PRESIDENT, WORLD BANK GROUP: As far as the need for strong reports, absolutely weak, we are changing -- changing constantly. And as I

came in as President of the World Bank, we made a number of changes and improvements in the ways that we look for -- that we look for quality

research.

I, just last week, elevated Carmen Reinhart, a world famous economist and researcher to our senior management team, which will add to the value of

the crossover with our programs. Critical for the World Bank is to have good development outcomes country by country, and that's going to be based

on very high quality research, and we're constantly working to improve that.

QUEST: So how do you protect your staff from legitimate or otherwise pressure from individual countries, and there are several that have been

identified. And you know, you and I have been around this long enough to know that this sort of thing happens, countries do put pressure on

different organizations. How can you protect legitimate pressure? How can you protect your staff?

MALPASS: One is to make a very clear statement that the World Bank operates on transparency and there is an environment that does not retaliate with

staff and there are substantial safeguards within the bank in that regard in the justice process within the bank.

So we're reinforcing that and we're working to have the climate for all staff, be one that is conducive to good to the mission. The core is to have

the mission of reducing poverty and improving shared prosperity for our clients is ultimate and that requires a good environment for staff and

there are multiple procedures to protect that.

QUEST: Last question on this area, sir, but I understand this didn't happen on your watch. But you are now the President of the World Bank, and you are

the man who is -- who has the task of leading to clean it up.

[15:05:09]

QUEST: This is amongst the most embarrassing incidents that the bank has faced.

MALPASS: There were certainly mistakes in the process of the bank, and the bank needs to find ways to avoid that into the future, and I'm working on

that as hard as I can, so that the bank has a good environment to create quality projects into the future.

QUEST: If we look now at the debt report, there are two arguments here, isn't there? Now, if you're going to borrow money, now is the time to do

it. You can borrow for next to nothing. The problem is, many of those countries borrowing at next to nothing, are the very ones that won't be

able to repay. Square that circle for me.

MALPASS: This is a really challenging financial climate for the whole world. There's the oddity of borrowing next to nothing, which is

inconsistent with how do you have a return on investment? And how do market forces work in a zero interest rate environment? So that's a fundamental

challenge for economics.

And then as we think about development, the concept has been that there would be investment from advanced economies and the investors, from

individuals into faster growing developing countries. Well, that's not what we're seeing right now in the pace of the recovery.

So the advanced economies are growing faster, but not only in a GDP sense, but in a per capita sense. And so that is -- that's undercutting the

development concepts that are based on new investment flows.

The World Bank is putting new resources into developing countries all the time, and that's a positive factor. But it doesn't square the circle, it

leaves us with this gap: How do we develop when the world system is not set up to be conducive?

Let me add one more, Richard, it is the bankruptcy process that I've talked about a lot. In the private sector, if you make a mistake, if you're

unsustainable, if you hit the wall, you declare bankruptcy and there's a way to work out with creditors what to do. There is a legal process. There

is no corollary in the sovereign debt system.

So this leaves a big gap in the way the global system works. This is something that New York and London, the world financial centers, I think

have to think about that you're creating debt contracts an out -- an exit in the event of unsustainability.

QUEST: Are you expecting some countries to default?

MALPASS: I expect there will be some defaults or non-payments, and even though the definition of what definition that takes -- we already have

Zambia in default on a bond on their debt. And they've asked for common framework treatment under the G20 initiative. These are challenging and

we've suggested some ways to strengthen the implementation of the common framework.

We've suggested that and the G20 is working on ways to make it more effective.

QUEST: When you were appointed President of World Bank, there was a sense of eyebrow raised that the fox might be about to join the chicken house, or

indeed, you know, or some other version of that analogy. You know what I'm talking about?

So I ask myself, at the end of the day, what reform do you want to make of the whole thing? Now, I agree, you came in and COVID. It's very difficult

to know all of these problems. But what reform -- fundamental root and branch form -- do you want to make of these organizations now, you've been

there a while and you've seen them?

MALPASS: Yes, thanks. Well, you know, I started in multilateral development in 1984 with the U.S. government with my work as a staff at the Senate

Budget Committee, which -- and so I've worked a long time on these issues. The reform -- and I came in a year before COVID struck. So we did a lot of

reforms in that first year.

One was to state very clearly that our goal -- part of our mission is to have very good country outcomes, measurable outcomes for developing

countries. That means the median income should be going up. Unfortunately, given COVID, it's going down. And poverty rates should be going down;

unfortunately, they've gone up.

And so that's a reversal in development, which is hugely troubling. What we did in addition to stating the mission clearly that we want people in

developing countries to do better year by year and to have programs with their governments and with their private sector that allow it and we want

to help.

We did another thing important, we realigned the bank and this affected thousands of people within the bank so that they were engaged at the

country level. They were that -- and so it put more emphasis on country programs for the bank. I think it's been a huge success.

And of course, we've done much more with climate change action plan and changes in the instruments that we use. So we're making a lot of, I think,

improvements in the World Bank.

You're right, I was a critic of development and of multilaterals for not being as effective as they should, and I'm trying to do the best I can to

improve those outcomes.

(END VIDEOTAPE)

QUEST: The President of the World Bank, David Malpass. This is all taking place as the Bank and the I.M.F. Annual Meetings begin in Washington, D.C.

And the question is whether Kristalina Georgieva will still be running the I.M.F. by the end of the week. The board of the funds says it wants to make

a decision very soon, but it's already put it off once.

The Managing Director has the support of European governments who typically decide who will put their foot forward and that's accepted.

Clare is with me now. Who is for, who is against Kristalina?

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Well, right now we know specifically, Richard, that the French are for her. The Finance Ministry

has told us today that they will support her. We expect that other European countries, as you say, will do the same.

Traditionally, as you said, the head of the I.M.F. comes from Europe, the head of the World Bank comes from the U.S. So no one really wants to upset

that balance. But of course, when it comes down to it, the opinion of the United States matters the most. They are the ones who hold the highest

number of votes on the I.M.F. executive board, the same I.M.F. executive order is currently reviewing that quite damning WilmerHale report that was

commissioned by the World Bank that alleges those data irregularities in the 2018 Doing Business Report.

So we have no further comment from the U.S. Treasury as of now and we wait and watch very closely what the U.S. is going to do about this.

QUEST: You see when I read the WilmerHale report, and I realized what they'd all been up to, it's not like they made up the numbers, is it? They

kept going back, and it is not like she said -- I mean, time and again, they did say, you know, China wants these -- we need to get China to at

least where it was, at least not going down in terms of doing business. But they did it by changing the criteria, thus implying and showing China

rising.

I mean, it was clever, but it didn't actually -- I suppose, they gerrymandered rather than fabricated.

SEBASTIAN: Yes, I think that's a good way of putting it, Richard. They were sort of trying to find ways to help China come back up in the rankings.

China was actually not flipping if you read the report because of anything it had done, it was just that other countries were doing slightly better.

So in the original numbers, it went down seven places, and then they found a way to bring it back up seven places.

But look, Kristalina Georgieva is now on a sort of PR offensive. She has hired a PR company who has just put out, you know, testimonies in her

defense. She has released a 12-page statement that she gave to the I.M.F. board. She refutes in detail a lot of the points in the WilmerHale report.

She has also argued, Richard, that that report was misrepresented. The reasons why she was doing interviews with this law firm who investigated

it, she was told at the time she says that it was confidential, that she was not the subject of a review. So, she is coming in quite tough. I think

if she does end up stepping down, it certainly won't be without a fight.

QUEST: Clare Sebastian in New York. Clare, thank you.

It is QUEST MEANS BUSINESS tonight. British companies say production could grind to a halt if the government doesn't help with skyrocketing fuel

costs.

And Lebanon is plunged into darkness over the weekend. Officials are now scrambling to get the lights back on. In a moment.

(COMMERCIAL BREAK)

[15:16:28]

QUEST: There is an energy crisis unfolding across the entire world. In some cases, people have been left in the dark. Many countries have got industry

that threatens to close down and the global economy seems to be in deep trouble.

So for instance, let's go to China, where there's not enough coal now to meet industrial needs. Largely because of heavy rains that flooded coal

mines. A different situation in Europe where wholesale gas prices are up 400 percent and British factories are warning they can't afford to stay

open.

Oil and gas prices are at seven-year highs in the U.S. OPEC isn't offering any relief to pump anymore, even though the U.S., of course, is a major

producer in its own right. It's the wrong sort of oil.

And in Lebanon, severe fuel shortages, of course, massive blackouts, a gas depot south of Beirut went up in flames. And that had some a couple of

hundred thousand gallons and liters of supply.

All these angles, first to the U.K. and business leaders in Europe as well calling for government help with skyrocketing fuel prices. Anna Stewart has

latest. Why? What's gone wrong here? Why everybody at once?

ANNA STEWART, CNN REPORTER: What's gone wrong? It's a perfect storm really, isn't it, Richard? Whether you look at the demand and supply issues, demand

through the roof as economies all switch back on after the pandemic. Economies are revving up. They want more gas, they want more oil, there's

not enough of it.

And then we get, of course, the supply issue. So issues including wind and solar output being very weak over the summer. So, some of these reserves

simply weren't filled, plus the huge transition to green energy.

But for Europe, the reason this crisis is so dire is they completely rely on oil and gas for something like 70 percent of consumption, and they

import it. Ninety percent of their gas is imported, 97 percent of their oil, they are so vulnerable as a continent when it comes to, you know,

price swings like we're seeing today.

QUEST: Right. But why are they -- the vulnerability I get, because the vulnerability comes as a result of poor -- just in time in the U.K.,

delivery problems because of drivers elsewhere. So I understand that, but it's hits everybody at once. And it's given Russia a very strong

geopolitical card.

STEWART: It certainly has. We heard more actually from Russia over the weekend. The Russian Ambassador to the E.U. warning Europe that it should

perhaps be a little bit friendlier to Russia, that it says would help at the same time saying Russian President Vladimir Putin is having words with

Gazprom. He is persuading them to be more flexible when it comes to output to Europe.

We are seeing geopolitics at play here as well. Russia has exported less gas to Europe than they normally do. They say they are fulfilling though

their long-term contracts, and they are, there just isn't as much gas going on the spot market. And that is where we are seeing a big problem across

Europe and the U.K. Not enough companies, not enough governments, not enough energy suppliers have put forward long term contracts for gas. They

want to transition to green energy, but they're not there yet.

QUEST: And I sort of have got a feeling that this crisis is going to get worse, but it's just going -- but eventually, it will disappear. Because

the difference is, the systemic issues of the shift to green supply or the green energy, where you can't just go back to coal or there isn't the

backup to come to, as China has seen versus these cyclical things where supply and demand are out of kilter.

STEWART: I think you're right and a lot unfortunately will depend into at least in the short term, on this winter and the weather. One analyst told

me the best bet right now is to hope that it's not too cold this winter for the Northern Hemisphere.

[15:20:10]

STEWART: But you're right in terms of the longer picture here. And particularly, I think, when we speak to the E.U., we're going to hear from

them on Wednesday. They're going to put forward their long term strategy.

We don't expect them to talk about investing more in gas infrastructure as that kind of building -- sorry, bridging energy between our renewables,

they're going to go full power to renewables. But I think what we're seeing here is we're not there yet, we're not ready. And in terms of energy

security, I think Europe is lacking.

QUEST: Anna Stewart. Anna, thank you. It is not only energy, I'm just putting a new kitchen in, a part of some renovations, and these days, well

try and get a refrigerator for love nor money in the next three months, and you're in deep trouble. Because everything you really want to buy is very

difficult to come by at the moment.

Supply chain issues, they are hitting home, and they're hitting hard.

The Swedish truck maker, Scania says its vehicles are still rolling. Despite the pandemic, sales are solid. But of course, it's trying to move

beyond fossil fuels to make more and more electric trucks that cut carbon emissions.

You've got a pandemic, a fuel crisis, a parts shortage, and a real need to get products moving. The company, Scania is in the middle of all of this.

And Christian Levin is the CEO, he joins me from Stockholm.

I can't even begin to imagine how difficult your supply chain issues must be at the moment as you try to get all the parts together for the trucks.

CHRISTIAN LEVIN, CEO, SCANIA: No, probably you couldn't imagine and I couldn't have done either, 27 years old most in this industry. We're

chasing them everywhere. You know, every commercial vehicle today is a rather complex instrument and at least 5,000 semiconductors on board up to

eight. And of course, you have to have every one of them in order to be able to deliver a complete vehicle that functions the way the customer

expect and makes the job that makes the money for our customers.

So, it's been -- and it is still a very, very strange situation. But I must say, the Scania family has got a team that has done a tremendous job to

really find ways to work around, to make deals for the customers, you know, to even deliver vehicles without full functionality. So really, really

difficult situation.

QUEST: So you are -- have you had to delay deliveries? Are you shifting deliveries? Are you delaying? Are you delivering them, as you say, without

full functionality, but then you can bring it back in a few weeks' time, and we'll do this, that, or the other.

LEVIN: Exactly, Richard. I think we're doing that and everything else you can imagine. So now, for a period, we really delivered vehicle without

functionality on the passenger door, for instance. So you know, window winders functioning, no rearview mirror being able to operate, but as long

as the customers are okay with it.

I mean, they desperately need transport equipment. So many of them still say okay, and then yes, when they come for service, first time, we of

course retrofit, if we then have found the semiconductors needed so it's creating a mess to be honest.

QUEST: And this shift to hybrid, this shift to electric, which is -- we don't need to debate where it's going or how it's going. We know, it is

going. I guess the issue is, how much more it will go. What is the next stage for you?

LEVIN: So we've been on a journey for quite some years starting up, I would say in 2015, really realizing that we are part of the problem of global

warming, and we needed to be part of the solution.

And yes, as we approach the kind of ultimate solution, which are zero emission vehicles, first hybrids and then full electrics, we are seeing

that that it is going faster and faster, which is of course very, very good.

What needs to come in place is what we call TCO parity, so total cost of ownership needs to be on the same level for an electric vehicle as for a

combustion engine vehicle, and we would have estimated that point in time to be around 2025. But we see, it is coming closer and closer and faster

and faster.

And with that, adoption will come and we have secured our part of that. So, we have now full electric vehicles being produced on a normal assembly

lines. We launched first buses last year, first trucks this year, and then we're going to launch every year from now, we're going to launch at least

one new model.

So it will accelerate and it will have to accelerate, I would say.

QUEST: If you see -- thank you, Christian. If you see a kitchen on one of your trucks with my name on, make sure it goes to the front of the line as

they do -- thank you, sir. Good to see you.

Well, isn't it? These days, you'd anything you can to get the product delivered on time. Good to see you, Christian Levin joining us from

Stockholm.

[15:25:06]

QUEST: To Lebanon, as electricity has been restored after a blackout over the weekend, the country still has only two hours of power a day. Ben

Wedeman is in Rome with us. It's a horrible situation, isn't it, Ben? We are literally watching the demise of arguably a country or certainly a city

bit by bit, and this is just the latest.

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, this has been going on for several years now, Richard. This is not new. And in fact, many

people in Lebanon were rather amused at the attention the country was getting over the fact that yes, for about 24 hours, there was no

electricity whatsoever being produced by the main power plants.

But keep in mind, those who can afford it, and increasingly there are fewer and fewer who can afford it, get some power every day from private

generators, which really produce the vast majority of the electricity in Lebanon.

The country's power plants, for instance, going back many months have been producing at best, two to three hours of electricity a day. And therefore,

it really wasn't as quite a big deal as perhaps the media has made out.

I left Lebanon in August, but going back to January, I was getting by on about two hours of power a day, but this is the result not of this world

energy crisis, but of a mounting crisis caused by decades of corruption and mismanagement and negligence.

And really, that negligence and indifference of the ruling class in Lebanon was brought home by the fact that Saturday, when the power completely went

out from these two main power plants in Lebanon, the country's Energy Minister was spotted at a Beirut beach taking it easy -- Richard.

QUEST: What do you do in this situation? I don't mean about the beach. I mean, what does one do in this situation? The infrastructure, there are

foreign financing requirements, there is infrastructure development and repairs. All stuff requires money. No one wants to give money as long as

the situation continues.

WEDEMAN: Yes, nobody wants to put money into Lebanon, given the unreliability of the politicians, most of them have been accused of

corruption in one form or another.

Now, Iran, for instance, shipped oil to or rather fuel to Lebanon via Syria, handed it over to Hezbollah. Iraq has provided some shipments of

fuel. The United States is trying to work out a complicated arrangement whereby Egypt would provide gas, Jordan would provide electricity, but it

will take months to work out the details of this deal.

It's not clear who's going to pay for it, and then the United States would have to basically modify its draconian sanctions regime against Syria,

because the gas and electricity would have to pass through that country to get to Lebanon.

So there are various ways to address or rather means or attempts to address this crisis, but there is nothing in the immediate future that would

resolve this problem or even make the situation ever so slightly better -- Richard.

QUEST: Ben Wedeman in Rome. Ben, thank you.

As we continue tonight, the Nobel Prize in Economics goes to work on real world experiments, studying the effects of policies like minimum wage

hikes. One of this year's winners after the break.

(COMMERCIAL BREAK)

[15:32:30]

QUEST: Economics is the study of the real world and this year's Nobel Prize in Economics recognize the efforts to change behaviors to influence that.

The Royal Swedish Academy of Science to give it its proper title, awarded the Nobel jointly to David Card for his work on developing natural

experiments. And to Joshua Angrist and Guido Imbens for their work on analyzing causal relationships.

Professor Card found out about the Nobel Prize. He was still up in the valley. It was in the middle of the night or very early in the morning, and

he was wearing his pajamas and the Nobel Prize was tweeted a photo taken by Professor Card's wife.

The Royal Academy -- Swedish Academy said he won his work for -- which no words analyze the labor market effects of minimum wage, immigration,

education challenged conventional wisdom leading to new analysis and additional insights.

The Nobel Prize winning economist David Card. Congratulations, Professor. It's a -- it's a moment, isn't it? When they ring you up? Did you have any

idea that you might be up for it this year?

DAVID CARD, CANADIAN ECONOMIST: No. No, I didn't. I actually thought an old friend of mine was playing a prank.

QUEST: Really? Well, you didn't believe initially?

CARD: Well, you know, Lars from Sweden me. I mean, what am I supposed to believe?

QUEST: Lars from Sweden and you've won the Nobel in the checks in the mail. All right. Let's talk about the work you've done. It's really -- it's -- I

mean, this isn't the highfalutin stuff that you've been working on. It is real world economics of immigration, and minimum wage and those sorts of

things that are political hot potatoes. For instance, let's talk minimum wage. I want you to listen to Senator Thune and settle this issue once and

for all of the effect on minimum wage on business. Here's the senator.

(BEGIN VIDEO CLIP)

SEN. JOHN THUNE (R-SD): So, two of my brothers work at filling stations, my sister waited tables. My other brother worked at a big local attraction,

which was the pioneer auto show. And as I said, I cooked at the star family restaurant. All of those businesses, all of those businesses work with very

narrow margins. And if you take a $15.00 minimum wage, and I will tell you right now in South Dakota, the minimum wage and our state sets, which is

frankly where I think it should be done.

Our state has a 945 -- $9.45 cent minimum wage. What you're essentially telling those businesses in South Dakota that I just mentioned that you're

going to increase the amount of money that they have to pay their workers by over 50 percent. 50 percent increase.

[15:35:13]

THUNE: And the wages that they would pay. Well, what does that do? Obviously puts a lot of out of business, but it also raises the cost of

everything else. That's got to get passed on.

(END VIDEO CLIP)

QUEST: So Professor, once and for all, does, the minimum wage, does raising the minimum wage cost jobs?

CARD: In the study that I did, which was 30 years ago, and looked at a substantially smaller increase, it was an increase from $4.25 to $5.05. So

only, just under 30 percent increase. In that particular case, there was no effect on employment, subsequent studies that have been done by other

researchers looking at a wide variety of minimum wage increases in the US. And some in other countries, like the imposition of a minimum wage in

Britain, and most recently in Germany didn't find large job losses if there were any losses at all.

So I would say the evidence is pretty mixed. But I think the senator has a point that in the case of South Dakota, which is a low wage state, a $15.00

minimum is a pretty big increase from where they are now. And it might not be that you can learn precisely what would happen in South Dakota from the

historical experience.

QUEST: On the question of immigration, again, looking at the work that's been done, and whether or not the value of immigration. The work you have

been doing into all of these areas is fundamental to these core ways of life, isn't it?

CARD: Well, it's a -- I think it's a one part of an understanding of -- first of all, how immigrants fit into the labor market. Secondly, whether

their arrival has some unanticipated or possibly harmful effects on natives, and that those are always first order questions that people want

to know about.

QUEST: What do you do now? I mean, where do you go having got this great honor and distinction and a chunk of change that comes with it. But that's

-- but that's sort of the -- comes along the side. What do you do next (INAUDIBLE)

CARD: I'm continuing to do projects, you know, similar kinds of projects in different areas, pretty much the same as I was doing yesterday.

QUEST: The big -- with that in mind, and bearing in mind, we've coming out of a pandemic, that seems to have caused seismic shifts in economics in the

way our workplace, in the way we interact in the work. What do you think of the big issues for economics as it relates to the workplace in the future?

CARD: I think the pandemic has really brought forward the issue of work from home. How many workers will be able to work from home? Will it be 80

percent or only 50 percent? Secondly, how will they be paid? Right now, workers that work in high-cost areas, for instance, if you work in San

Francisco, you would typically get a premium over somebody that's working in Colorado.

If everyone's working from home, those premiums will have to all be rearranged. It'd be really interesting to see how that's going to work out.

QUEST: And that's exactly what is happening, isn't it? The Googles of this world, the PwCs. Those people who have agreed to let people move on work

from home have said, yes, but you can't keep your extra way -- you can't keep your extra pay for those, which of course, makes sense, and sort of

seems unfair at one and the same time.

CARD: Yes. You can understand both sides, I think. It's the typical thing in economics. There's always two sides to an argument. And here, it seems

like, you know, Google is -- was previously paying a reward to live in high-cost area. And if you're not doing that, maybe you shouldn't expect

that to be in your pay, I can see that.

QUEST: Well, judging from where you are at the moment, you're certainly familiar with the high cost of living in certain parts of that Northern

California. Professor, congratulations once again. And thank you. I much appreciate the important work that you've done on all these issues. Thank

you, sir, for joining us.

CARD: Thank you, my pleasure.

QUEST: And so to how the markets have traded, as we come to the end (INAUDIBLE) down, we saw the beginning of the program and that -- those

losses accelerate as we go through. I'll need to update you in about 20 minutes from now. When we make our dash for the closing bell. So stay for

that because that market could turn turtle to now and then. In the meantime, do stay with us for Connecting Africa.

[15:40:05]

QUEST: This is CNN.

(COMMERCIAL BREAK)

[15:58:05]

QUEST: Hello, I'm Richard Quest. Together we have a dash to the closing bell. We're just two minutes away. For the second time in as many months

Goldman Sachs has lowered its forecast for U.S. economic growth this year. And the Dow is turning negative after a surge in oil prices briefly held

energy and material stocks this morning but as you can see, it is a firm shift down and a loss that has accelerated over the last hour.

That was barely off 100 points over that 70 points the beginning of QUEST MEANS BUSINESS. The major averages are all down as traders are waiting for

fed minutes, which are out on Wednesday morning. The bond market was closed for a U.S. national holiday, Columbus Day. As you can see all the markets

are rough or lower. And the Dow components, there's not much green left on the screen. Deeper and Salesforce are in the lead less than one percent.

The losses are serious and for the rest, Verizon, Goldman, JPMorgan obviously an interesting ways. Visa and the like. Two financials are at the

bottom. The World Bank President admits the group made mistakes with how it ranked various countries in its doing business report. The scandal over

whether the World Bank officials pressurized staff to boost China and Saudi Arabia's ratings is overshadowing this week's IMF World Bank meetings.

Speaking to me exclusively, David Malpass said he would make sure those mistakes wouldn't be repeated on his watch.

(BEGIN VIDEO CLIP)

MALPASS: There were certainly mistakes in the -- in the process of the bank, and the bank needs to find ways to avoid that into the future. And

I'm working on that as hard as I can, so that the bank has a good environment to create quality projects into the future.

(END VIDEO CLIP)

QUEST: David Malpass, the IMF and World Bank meetings start and will continue throughout the course of the week. That's the dash to the bell.

The bell starts to ring now and we're down 250 points.

All the major indices are lower. And today, your concerns obviously all the usual as (ph) we talk about the market has turned turtle (ph) at the end of

the closing bell. Otherwise, whatever you're up to in the hours ahead, I hope it is profitable, as the bell rings, the gavel falls and "THE LEAD"

with Pamela Brown starts next.

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