Return to Transcripts main page
Quest Means Business
Facebook Stock Down As Company Hits Back On Coverage; Leaked Facebook Documents Suggest Language Blind Spots In Facebook Moderation; Dow and S&P 500 Cruising To fresh All-Time Highs; U.N.: Earth Is Warming Faster Than Expected; Blackstone CEO Says Higher Energy Prices Will Spark Social Unrest; Saudi Arabia's Future Investment Initiative Kicks Off; Dash To The Bell. Aired 3-4p ET
Aired October 26, 2021 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:27]
PAULA NEWTON, CNN INTERNATIONAL HOST: The message: Don't bet against this market. We are heading for fresh all-time highs on Wall Street. The Dow as
you can see, they are up for a third straight session. Those are the markets and these are the main events.
Facebook shares take a tumble as Mark Zuckerberg hits back at media criticism.
The head of Blackstone tells Richard social unrest is on the way thanks to higher energy prices; while China releases its carbon emissions plan, the
United Nations says not enough is being done.
Live from the CNN Center. It's Tuesday, October the 26th. I'm Paula Newton, in for Richard Quest, and this is QUEST MEANS BUSINESS.
Good evening. Tonight, Facebook is taking a hit in the markets as it hits back on coverage of a trove of leaked internal documents. Now, the stock is
down as you can see, they are less than five percent, but at certain times, it has been down more than that, that is despite third quarter earnings
that showed double digit growth in revenue and users.
Facebook founder, meantime, Mark Zuckerberg responded to the negative publicity during yesterday's earnings call. He accused news outlets of
ganging up on him to portray Facebook unfairly. Listen.
(BEGIN AUDIO CLIP)
MARK ZUCKERBERG, FOUNDER AND CEO, FACEBOOK: Good faith criticism helps us get better, but my view is that what we're seeing is a coordinated effort
to selectively use leaked documents to paint a false picture of our company.
The reality is that we have an open culture where we encourage discussion and research about our work so we can make progress on many complex issues
that are not specific to just us.
(END VIDEO CLIP)
NEWTON: Okay, as for its earnings, so Facebook reported $29 billion in third quarter revenue. Take a pause to think about that, $29 billion, and
that was a miss, but up still 35 percent year-over-year. Now, users were also up across the company's family of apps. Remember, it owns WhatsApp and
Instagram. Users up there as well.
Paul La Monica is here. We continually talk about Facebook and Facebook and more Facebook. Is there a sense though, that finally this company's number
may be up, not only that, it perhaps may be getting regulation on the way, but that it might actually this time hurt its market position in any way.
PAUL LA MONICA, CNN BUSINESS REPORTER: It's possible, Paula. I do think that when you look at Facebook right now, the concerns that are the
greatest for the company are the bad press, the negative publicity, what that might mean for the potential for more regulation down the road in
Washington.
But make no mistake, Facebook also has a lot of competition in social media. When you think of all of the people, particularly younger users,
yes, they might still be on Instagram, but they're probably not on the core Facebook platform. That's because they're busy watching videos on YouTube
or doing things on TikTok or Snapchat.
There are obviously many more social media platforms to compete for the attention of younger users right now on their smartphones and other mobile
devices than just Facebook.
NEWTON: Yes. Absolutely. And Mark Zuckerberg addressed that in the call as well saying that those young users would be the so-called North Star and
that they were going to concentrate on them and yet, what do you make of Mark Zuckerberg's more defiant stand in that call?
He has been much more defiant for the last several months, we have to say, but what has really changed? Because it does seem like something has
shifted.
LA MONICA: I think that he is clearly much more defensive now, and I think part of that might just be that when you look at what has happened at
Facebook and with Facebook to Facebook over the past few weeks, this is no longer a case of just you have certain Members of Congress that are, you
know, saber rattling and complaining about Facebook.
You have leaked internal documents. You have a whistleblower at the company testifying about what she felt were some of the more egregious practices at
the company. This is no longer a battle from outside of Facebook. Facebook is having issues from within, and I think that is probably one of the main
reasons why Mark Zuckerberg is to your point, Paula, being much more defiant now than a few months ago.
[15:05:08]
NEWTON: When we look at the fact that it is aiming in yet another sphere, right? It is apparently investing $10 billion in what we call the
Metaverse, something you will be explained to us for some time to come up. In terms of that new investment, do you think that they are still looking
to dominate in those areas? And quite frankly, do they still have a shot at being able to dominate in those areas?
LA MONICA: Yes. I think that they still want to be a very prominent player in the lucrative world of online advertising, which is what really -- it is
what drives Facebook's sales and profits, but I think to the same point where you had Google transform itself into Alphabet and start investing in
other businesses, so they are not so reliant on search advertising, Facebook is trying to probably do the same thing with the Metaverse.
The issue is, how quickly can Facebook really turn that into a profit generating machine? It may take some time, and while that's happening,
guess what? Facebook is still going to be scrutinized for all of the negative things that are seen on the platform and there are going to be
worries on Wall Street about the fact that user growth, while still robust, is slowing and skewing more to a demographic that may not be as advertiser
friendly, people like sadly, me.
NEWTON: I'm right there with you, Paul, and proud to be. Paul La Monica, thanks so much for parsing that for us.
Now, the Facebook Papers also revealed blind spots and language barriers in Facebook's content moderation efforts. For more on this, Larry Madowo has
more from Nairobi.
And before that though, we get the latest from Vedika Sud who joins us from New Delhi.
(BEGIN VIDEOTAPE)
VEDIKA SUD, CNN REPORTER: India is Facebook's single largest market by audience size. It has more than 400 million users across its various
platforms. According to leaked documents, which are part of disclosures to the Securities and Exchange Commission and provided to Congress in redacted
form by Facebook whistleblower, Frances Haugen's legal counsel, researchers flagged that the company system has failed to control hate speech,
misinformation, and fake news in India.
A consortium of 17 U.S. news organizations including CNN has reviewed the redacted versions received by Congress. So, how does Facebook control and
pull down harmful content? Well, it relies on a combination of artificial intelligence, and human reviewers.
Artificial Intelligence portals are trained to detect and remove content such as hate speech using sample words or phrases known as classifiers.
This requires an understanding of local languages.
According to an internal presentation by the researchers, the lack of Hindi and Bengali classifiers, which are the two most popular languages in India
led to harmful content going unchecked. India is a country of 1.3 billion people and 22 official languages.
According to a Facebook spokesperson, the company added hate speech classifiers for the Hindi language in the year 2018, and for Bengali, in
the year 2020.
LARRY MADOWO, CNN CORRESPONDENT: I'm Larry Madowo in Nairobi. The Facebook Papers show that Facebook knew that its social network was potentially
being used to incite people to violence in Ethiopia, and it did not do enough to stop it.
Ethiopia has been in conflict in the north of the country since November last year, in Tigray, where thousands of people have died and hundreds of
thousands displaced.
Facebook is widely used in Ethiopia, Africa's second most populous nation, and yet Facebook didn't have tools to detect hate or misinformation, and
two of the most widely spoken language Afaan Oromoo and Amharic. The social network denies that, a spokesperson told CNN, it has invested in Ethiopia
in more local language speakers to detect and flag any offensive content also in Somali and Tigrinya, which is spoken in the north.
But activists have always accused the social network of not doing enough to protect human rights, and this is not just in Ethiopia, but in many other
languages spoken widely in Africa. Swahili, for instance, which has tens of millions of speakers, Facebook does not say how many people speak those
languages and how much is invested to try and remove that content.
(END VIDEOTAPE)
NEWTON: Now, Facebook touts its effort to review and take down posts that violate its policies. That's key there -- its policies -- the company says
it has 15,000 content moderators keeping tabs on an estimated 300 million posts per day.
Facebook says it's moderator speak more than 70 languages and that Facebook users though post in more than a hundred. There's a key gap there, isn't
there? Zuckerberg told U.S. lawmakers in March that the system worked pretty well.
[15:10:01]
(BEGIN VIDEO CLIP)
ZUCKERBERG: We have thousands of people working on being able to identify this content and remove it and I think our systems are generally pretty
effective at this.
(END VIDEO CLIP)
NEWTON: So, Facebook whistleblower, though, Frances Haugen has a different view.
At a hearing yesterday at the U.K. Parliament, she said the company thinks short term when it comes to safety. Listen.
(BEGIN VIDEO CLIP)
FRANCES HAUGEN, FORMER FACEBOOK PRODUCT MANAGER: I was -- I was shocked to hear recently that Facebook is -- wants to double down on the Metaverse and
that they're going to hire 10,000 engineers in Europe to work on the Metaverse, because I was like, "Wow, do you know what we could have done
with safety if we'd had 10,000 more engineers? It would have been amazing."
I think there's a view inside the company that safety is a cost -- a cost center, it is not a growth center, which I think is very short term in
thinking.
(END VIDEO CLIP)
NEWTON: We are joined now by Siva Vaidhyanathan. He is the Director of the Center for Media and Citizenship at the University of Virginia. He is also
the author of "Anti-Social Media: Facebook Disconnects Us and Undermines Democracy."
You know, you have a fascinating default position on Facebook and how it operates. To quote you, "They do it with all the care of an invading
Imperial Force." Explain that to us.
SIVA VAIDHYANATHAN, DIRECTOR, CENTER FOR MEDIA AND CITIZENSHIP AT THE UNIVERSITY OF VIRGINIA: Yes, look, Facebook is an American company
established by Americans run by Americans. That's not necessarily a bad thing, except that there is a certain arrogance and swagger to the mission.
Right?
Mark Zuckerberg is a missionary thinker. He is a transformative thinker. He thinks that his manner of connecting people, and what he says forming
community is going to lift all of us, going to make us better to each other, understand each other better, be more transparent to each other, be
more honest with each other. And that somehow, we're not going to hate each other as much or dismiss each other as much. We might actually talk better,
a very idealistic vision.
And so he has built out this global system in record time, with this idea that the more we connect with each other through Facebook, the Facebook
way, the better we will live.
The evidence is so strong to the contrary. We've seen of course, that human beings, as we always knew were flawed. We're willing to engage in the most
hateful conduct toward each other, and express that sort of feeling through Facebook, which amplifies any strong emotion, whether that's puppy pictures
or baby pictures, or hate speech, or calls to genocide, the strong emotions get carried by Facebook.
We've learned all that from the Facebook Papers, but we knew it before. What we now know is that through the Facebook Papers, everyone at Facebook
understood that. And still, the idea of getting in the way of this missionary global mission was just out of the question.
NEWTON: Yes, and their platitudes on free speech ring hollow, right? Because their algorithm is the one that contributes to this.
I want to ask you, here, we definitely focus on the global reach of Facebook, right? And that outage that they had a few weeks ago really made
the point. And in some developing countries, if you don't have Facebook, you don't have the internet. Period. So, it does function in many places
like a utility.
In the face of that and everything that you just told us, how best to regulate it?
VAIDHYANATHAN: You know, there may be no great way to regulate it. We've never had anything like Facebook. We don't have a 19th or 20th Century
antecedent to it. It's not like a film company. It's not like a magazine or newspaper. You know, it's not like Standard Oil, right?
There is no toolkit from the 20th Century we can bring forth into the 21st to deal with something that somehow touches, connects, affects three
billion people. That's out of 7.6 billion humans, right? Nothing has ever reached that number of people in more than 100 languages, maybe 110
languages.
The very notion that we could even expect Facebook to effectively manage itself or effectively scour its platform for hate speech or calls to
violence. Like, that's a bit naive. It's just not possible. It's possible to do better than Facebook's done. But it's impossible to imagine a
Facebook system that really enhances life and doesn't contain these really toxic elements.
I don't see on the current list of considered regulations, anything that strikes at the heart of Facebook, because the problem with Facebook is
Facebook. It is how it was designed. It was its global ambition. And it was this notion that it amplifies things with strong emotions.
If you were to unwind any of those things, you could solve the problem. But if you were to unwind any of those things, Facebook would not be Facebook.
NEWTON: It's interesting what you say. And yet, just to push back a little bit, what about the idea that you introduce some more competitors in the
market though, because you know, you and I both know, monopolies are very corrosive by their very description.
I'm not saying Facebook is a monopoly, but as you were saying, in some developing countries, it basically is. You know, I was interested that in
the latest results, the Achilles heel of Facebook is actually in a small way, Apple.
So do you think that that would solve some of these problems?
[09:15:03]
VAIDHYANATHAN: Okay, so remember the most acute problems that Facebook causes are in those places where people are most dependent on Facebook.
Now, there's no real antitrust intervention that would change that. Facebook has developed a program through which it gives away data to people
who can't afford to pay for data on their phones. It's a program called free basics.
It was established to try to connect that last billion people to Facebook in the poorest countries in the world, and none of those people are using
Apple iPhones, by the way, right? They're all using much less expensive phones, mostly Android based phones. So anything Apple does doesn't really
affect most Facebook users. Really, Apple only plays a role in the richer countries of the world. So we can put that to the side.
But competition, you know, you really have to believe that competition actually makes companies behave more humanely, and I don't think we've ever
seen that. There are lots of competition in the oil business. There's lots of competition in the tobacco business. Those businesses still do great
damage to the world, right? There is no good oil company.
So what you have -- what you're going to have is, well, one big social media company or three big social media companies, they're all going to do
the same thing. They're all going to treat everyone the same way. And by the way, we get competition all the time. People are always inventing the
new social media platform, and nothing stands in the way of it except that we are not interested because we want to be where all of our family and
friends are, and that's Facebook.
The first mover advantage is with Facebook
NEWTON: And maybe the solution going forward, right, Siva, remains with the users themselves and how they behave in the years to come.
I have to leave it there, but thanks so much for your perspective. Appreciate it.
And some breaking news just in to CNN, sources say that Sudan's Prime Minister is now back at his official residence after being detained on
Monday. Now, Abdalla Hamdok and his wife have returned home after the Sudanese military had declared a state of emergency. It's not clear if Mr.
Hamdok is able to move freely, or if other government officials who were detained have been let go. We will continue to follow this developing story
because it is very confusing on the ground right now, especially when it comes to the whereabouts of Cabinet members in that country.
Now, Elon Musk says these are quote, "wild times for Tesla," you don't have to convince us. The share price rally continues. And there are records on
Wall Street, we'll show you the numbers, next.
(COMMERCIAL BREAK)
[15:20:10]
NEWTON: Now, the record breaking streak on Wall Street looks likely to continue. The Dow is up for a third day in a row and that means it would
close at a record. As it would, yes, the S&P 500 as well. The NASDAQ is also up less than one percent though, now from its all-time high.
Meanwhile, Tesla's rally continues. It is up again today pushing its market capitalization even further above the $1 trillion mark. Even Elon Musk says
the stock move is strange, in his words. He couldn't resist a tweet at market close yesterday, "Wild Times," is how he described it, you see it
there. Tesla is now in highly exclusive company -- Apple, Microsoft, Alphabet, which of course is the parent company of Google and Amazon make
up the rest of the trillion dollar club so-called, together they make up roughly a quarter of the total value of the S&P 500.
I'll note that Facebook is just out of that club now. CNN's global economic analyst, Rana Foroohar is here with me. So, good to see you, Rana. I love
leaning on you with these big market questions. And so how about it? We have these markets now hitting these records. It's actually going to make
more news if they don't hit records at this point. Can we buy into the fundamentals behind this? Earnings, consumer demand, even in the face of
inflation, supply issues, and of course, the energy crunch.
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Gosh, Paula, what a great question. I have to say when Elon Musk says it is wild times, it does make
-- it gives me a little bit of pause.
It's a mixed picture to be quite honest. You know that I had thought for some time that stocks were overpriced. I do think that it is a real
divergence when you have stocks this high, when you've just come out of a pandemic, when you have the delta variant still a huge deal in the global
economy, when you have people saying there is probably going to be another minor, you know, maybe not major, but minor surge in the U.S. in the coming
year.
All of that has to weigh on prices at some point, as does monetary policy. I mean, we know that the Fed is going to tighten probably sooner rather
than later. The big question to me is to what extent does that dovetail with the fact that these companies have in many cases not necessarily in
Tesla's, but in many cases become more vital during the pandemic?
So you get a company like Alphabet, for example, parent company of Google. Well, we've all gone digital in the last two years. So you know, that does
increase the value in some ways of these companies, but -- and you mentioned in your last segment -- antitrust issues, monopoly power issues.
Facebook is already feeling the heat from this. How much longer until others do? You know, not just Alphabet and Apple, but even Tesla. You know,
the way in which Elon Musk's space division is sort of, you know, taking over and privatizing space, it is becoming a big deal on antitrust circles.
So, I think the jury is really out.
I think there's absolutely going to be a correction at some point, I've been saying that for a while.
NEWTON: Yes, and I'm sure many people who believe these are lofty, lofty positions in the markets that can't be held have, unfortunately, or
fortunately been proven wrong for months now. But when we look at that trillion dollar club, right, you know, Tesla joining as we were just saying
Microsoft, Alphabet, and Amazon. So together, Rana, they make up as, you know, 25 percent of the entire S&P. It's only five companies.
So you kind of touched on it a little bit. Does that concentration itself pose risks?
FOROOHAR: I absolutely think it does. I mean, in some ways, I think corporate concentration is the biggest risk of our time. In some ways, the
whole global story has become about Big Tech versus Big State, meaning China. You know, which paradigm is controlling things?
Absolutely, we're going to see more antitrust action. It's worrisome to me that for all kinds of reasons, the network effect, the sheer lobbying force
of these companies, the nature of the digital economy, the fact that we are seeing so much concentration and I mean, you know, a few quarters ago, it
was closer to half the S&P that these companies represented.
So, I think at some point that's going to break. Historically, you go back decades, this kind of monopoly power just does not last. There's too much
of a political implication for it.
NEWTON: Yes, I guess, I worry that we haven't really seen any brilliant approaches to that regulation, and so, we'll see. We'll see -- sometimes, I
hate to say it, sometimes you need that little bit of crisis, right, to motivate people to do things.
Rana, great to see you, as always. Appreciate it.
FOROOHAR: Good to see you.
NEWTON: Now, the U.S. could soon hit a milestone on the road to getting a COVID vaccine for young kids. Advisers to the Food and Drug Administration
are meeting right now at this hour to decide whether to recommend Pfizer's vaccine for children that is between the ages of five and 11 years old.
If the vaccine is finally authorized, doctors could start giving shots to children as early as next month.
Elizabeth Cohen joins me now. Elizabeth, I know how closely you've been following all of this, and to make a point of it, right, there are lots of
parents that can't wait. That means they have a chance of the children being fully vaccinated by the Christmas Holidays. And yet, what do we know
about the hesitancy in that group as well?
[15:25:18]
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: There is some hesitancy in that group, both in the United States and abroad. But there's also a lot
of enthusiasm, and parents around the world really are watching what the F.D.A. advisers are doing as we speak, because of course, when the F.D.A.
makes a decision, often regulatory agencies in other countries follow suit.
So let's talk about what these advisers are looking at. They're looking at safety data and they're looking at efficacy data. So the Pfizer did a very
large clinical trial. Let's take a look at what they found when they did that trial.
When they did the trial, they found that Pfizer was 90.7 percent effective at keeping kids protected from getting sick with COVID. We are talking
about children between the ages of five and 11. What they did was they gave 1,300 -- more than 1,300 children the vaccine, and over time, three of them
became sick with COVID-19. They gave 663 children, far fewer, a placebo, a shot of saline that does nothing, and 16 became six. So you can just see in
those numbers right there. That is a real difference.
And so, the F.D.A. advisers are going to be looking at that making sure that it is statistically significant, you know, sort of going through all
of the data there.
Now, once these vaccine advisers are done, the process is not done. There are many layers to this process. So let's take a look at what happens next.
First, the full, the real F.D.A., the actual F.D.A. agency will take a look at what the advisers have recommended, and they will make their own
recommendation for or against emergency use authorization for children. And by November 1st, we expect that to happen. And then November 2nd and 3rd,
C.D.C. advisers -- again, external advisers this time to the Centers for Disease Control -- they'll meet to decide what they think should happen.
And then soon after that, we expect the head of the C.D.C. to make her recommendation about what should happen. So, if all of these are a thumbs
up and this vaccine gets a greenlight for children ages five to 11, Dr. Anthony Fauci says that he is optimistic that shots could go into
children's arms as early as next week -- Paula.
NEWTON: Yes, we'll definitely continue to keep an eye on that. We could have a decision within the hour here from the F.D.A. and we'll bring that
to you as soon as we have it.
Elizabeth Cohen, I appreciate the update on that.
Now when we return here on QUEST MEANS BUSINESS, panic at the pump could lead to anger in the streets. That's according to Blackstone's CEO who
tells our Richard Quest, high gas prices could set off rising social unrest around the world.
(COMMERCIAL BREAK)
[15:30:00]
(MUSIC PLAYING)
NEWTON (voice-over): With just days to go before COP26, China has revealed its plan to start bringing down emissions before the end of the
decade.
Now more hydropower is one of the things Beijing will focus on. However, the United Nations warns today that far too many countries are still not
being ambitious enough with their climate plans if global warming is to avoid those dangerous levels.
Australia is rolling out its climate pledge, promising net zero by 2050. But the prime minister says it will be done, in his words, the Australian
way. A lot of environmentalists say that just won't cut it. Angus Watson has the story from Sydney.
(BEGIN VIDEOTAPE)
ANGUS WATSON, CNN PRODUCER: The Australian government on Tuesday announcing its pledge to take the country to net zero carbon emissions by
2050, whereby greenhouse gas production is limited in any remaining greenhouse gases in the atmosphere are removed.
. This coming ahead of the COP26 climate talks in Glasgow, Scotland, set to begin Sunday. But Australia has not pledged to be more ambitious on its
2030 carbon reductions. They say they are on track to reduce by 26 percent to 28 percent of 2005 levels by 2030.
Speaking Tuesday, the prime minister said his targets would not compromise jobs in the Australian mining industry. Australia is one of the world's
largest exporters of coal. Instead, they would rely on new technologies, such as carbon soil sequestration and new green energy technologies, which
are so far unproven.
(BEGIN VIDEO CLIP)
SCOTT MORRISON, AUSTRALIAN PRIME MINISTER: Australians want action on climate change. They're taking action on climate change. But they also want
to protect their jobs and livelihoods. They also want to keep the cost of living down. They also want to protect the Australian way of life,
especially in rural and regional areas.
(END VIDEO CLIP)
Australia has been under pressure for quite some time to do more about climate change, despite being on the front lines of the crisis. You will
remember the devastating bush fires of the 2019-2020 Southern Hemisphere summer, the Great Barrier Reef, bleached white in parts by rising sea
temperatures, all giving people here and around the world impetus to ask for more action, swifter action from their leaders -- Angus Watson, CNN,
Sydney.
(END VIDEOTAPE)
NEWTON: We all know higher energy prices are a reality and could set off social unrest around the world. That's what Blackstone's Stephen Schwarzman
told Richard Quest today. Schwartzman was on a panel at the Future Investment Initiative in Saudi Arabia. He said emerging markets in
particular are at risk.
(BEGIN VIDEO CLIP)
STEPHEN SCHWARZMAN, CEO, BLACKSTONE: With the decline curve of hydrocarbons, leave out coal, we're going to end up with a real shortage of
energy. And when you have a shortage, it's just going to cost more. And it's going to, probably, cost a lot more.
And when that happens, you're going to get very unhappy people around the world on the emerging markets in particular but in the developed world.
RICHARD QUEST, CNN HOST: We're seeing it at the moment in Europe.
SCHWARZMAN: What happens then, Richard, is you've got real unrest. And this challenges the political system and it's all utterly unnecessary. You
have to have government agree what the rules of the road are, so society can successfully transition from where we are to where we need to be.
(END VIDEO CLIP)
NEWTON: Carlos Torres Diaz is the head of Gas and Power Market Research at Rystad Energy. He joins me now.
You just heard that very clear-eyed view from the Blackstone CEO.
[15:35:00]
NEWTON: Yet, I wonder from what you're seeing, are we at peak in natural gas and oil?
Or do you think there's a ways to go here still?
CARLOS TORRES DIAZ, GAS AND POWER MARKET RESEARCH, RYSTAD ENERGY: I think we're going into very interesting times. And I think the prices are going
to stay at the current high level at least for the coming winter.
Obviously, this will be dependent on how it develops. But if it's a call it will be tighter than a normal year. So I don't think the situation will
improve.
NEWTON: In terms of the magnitude of the increases that you're looking at, it's one thing to say we have an increase. Some of the increases have been
eye-popping.
Do you see more risk of that through the next quarter?
DIAZ: Yes, definitely. At least it's going to stay at the same level. There's a risk of prices increasing even further. There's little supply
flexibility available in the market. So if there's a cold winter, the willingness (INAUDIBLE) how high prices go.
NEWTON: Is there anywhere for governments and suppliers to go in terms of increasing that supply?
There's been a huge debate about whether or not Russia can do enough, is doing enough.
When you scour the globe and look at where excess supply could be found, what are you seeing?
DIAZ: We're already seeing the Chinese government incentivizing additional coal production in order to reduce their demand. So we're seeing additional
supplies coming into the coal market. It's helping to balance the Chinese power system.
So this has already helped improve the situation. There's also in the government trying to incentivize that in a new way.
But when it comes to supply in Europe, there's very little options they can do. Norway have to compromise to send more supplies into the European
continent. But it's not enough to improve the current balance and it will be dependent on the supplies. So far, it's very unlikely to see potentially
supplies from Russia in the short-term.
NEWTON: So if I hear you correctly, it's watch this space when it comes to those energy crises. Thank you so much. Appreciate your insights.
The so-called Davos in the Desert kicked off today in Saudi Arabia. We just heard Richard. This year's initiative is focusing on climate emergency.
Last week the kingdom pledged to be net zero for carbon emissions by 2060. Eleni Giokos has more.
(BEGIN VIDEOTAPE)
ELENI GIOKOS, CNNMONEY CORRESPONDENT: Top global CEOs, executives, billionaires and policymakers are here for the Future Investment
Initiative. And you're seeing robust debate coming through. Some uncertainties that have been discussed like where oil prices are heading.
Aramco CEO saying they are worried about capacity, echoed by Blackstone CEO, talking about oil prices potentially going to $100 a barrel.
You're also hearing from other finance executives, worried about hyperinflation scenarios could result in social unrest. These kinds of
conversations usually discuss global issues and finding solutions, potential solutions to some of those problems.
We also heard from Ray Dalio, questioning the viability of capitalism heading into a post-COVID world. Even alternative methods of investment
have come up as well.
But we have to cast our minds back to 2018, where there was reputational damage and a lot of these top executives opted to stay away and boycott the
FII after Saudi Arabia's involvements into the death of journalist Jamal Khashoggi.
But people are back here and it's symbolic to have these conversations occurring in Saudi Arabia, when the kingdom is trying to solidify their
influence in the GCC region. The kingdom also is committing to carbon neutrality by 2060.
[15:40:00]
GIOKOS: You're also hearing a lot of commitment into social changes in the country and you're also seeing executives very much engaged into the
region. What that means for the global investment prognosis and what would that look like heading into a post COVID-19 era.
But we know these conversations and the FII, these conversations had in conference rooms and behind closed doors are just that. They are
conversations.
The question is what action will you see down the line?
Another important topic that has come up quite often is the inequalities that have emerged because of the pandemic and that CEOs and executives need
to take that seriously. So it's not just profits but focusing on social issues because, if those social issues are not dealt with, that could
result in unrest and instability down the line -- Eleni Giokos, CNN, Riyadh.
(END VIDEOTAPE)
NEWTON: That's QUEST MEANS BUSINESS. Up next, "LIVING GOLF."
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(LIVING GOLF)
[15:48:40]
(MUSIC PLAYING)
NEWTON (voice-over): Hello, I'm Paula Newton. It is the dash to the closing bell. Markets are heading for another record close, thanks to
rising consumer confidence. You see it there.
That confidence in the markets and in the consumer index picked up in October. That reversing a three-month trend. The Dow is headed to a record
close and a third straight day of gains. The SNP also set to close at a record.
The Nasdaq pretty close but still off about 1 percent from its record high. Meantime, Blackstone's chief executive says higher energy prices will set
off social unrest around the world. CNN's (INAUDIBLE) was on a panel hosted by Richard Quest at the Future Investment Initiative in Saudi Arabia and
said emerging markets are at risk.
SCHWARZMAN: We're going to end up with a real shortage of energy. And when you have a shortage, it's just going to cost more. And it's going to,
probably, cost a lot more.
And when that happens, you're going to get very unhappy people around the world on the emerging markets in particular but in the developed world.
QUEST: We're seeing it at the moment in Europe.
SCHWARZMAN: What happens then, Richard, is you've got real unrest.
END
