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Quest Means Business
Wall Street Tumbles On Disappointing Jobs Growth; Ireland Placing New COVID Limits On Hospitality Sector; W.H.O. Says There Is Clear Link Between Vaccine Inequity And Variants; Manhunt Underway For Parents Of School Shooting Suspect; Biden Administration To Resume Remain In Mexico Migrant Program; Taliban Government Issues Decree On Women's Rights. Aired 3-4p ET
Aired December 03, 2021 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN BUSINESS ANCHOR: So we come to Friday, the last hour of trading, 60 minutes to go and ugly end to a rough week on Wall Street.
The triple stack tells the full story. The Dow may be up one percent, S&P one and three quarters, but the NASDAQ, best part of three percent.
The markets are unhappy, and these are amongst the reasons why.
A worse than expected jobs report has now raised concerns about the U.S. economic recovery.
British scientists say half of omicron patients in the U.K. were fully vaccinated. The developer of AstraZeneca vaccines with us tonight.
And Chinese ride hailing app, DiDi, a stunning U-turn delisting from the New York Stock Exchange only months after an IPO there.
You can see what sort of day it has been as we end the week together, but we are still live from New York, it is Friday. It is December 3rd, I'm
Richard Quest and I mean business.
Good evening. The markets really didn't need much impetus to be unhappy. They got a dose of it today. Disappointing U.S. job growth is taking the
wind out of Wall Street sales and raising questions about where the country's economy is headed.
The major averages all turned lower on the employment report. Tech is particularly taking a drubbing. The NASDAQ off nearly five percent for the
week. Employers added 210,000 jobs last month, less than half of what economists expected. It's a backward looking number indicator. So, it
doesn't really factor omicron in yet, things will get worse.
And the VIX, which is our old friend, the Volatility Index is up more than 10 percent. That means more volatility by the way. It has more than doubled
in the last month to levels that we've not seen since January.
Paul La Monica is here. I hesitate to say a perfect storm, a trifecta of bad news, whatever you want to say, but what do you make of what we've seen
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, it is really troubling to see the market reaction to put it mildly, Richard, because here is the thing.
We have just had a lot of volatility on Wall Street, we take, you know, two steps forward, and then several big steps back. I mean, it was only
yesterday that the Dow had its biggest point gain of the year, despite concerns about the latest variant of COVID and inflation and what the Fed
And when you speak about the Fed and these jobs numbers today, I think we'd be remiss if we didn't point out that, yes, the jobs gains were a lot lower
than expected. But look at the unemployment rate, Richard, and the underemployment rate, they are both coming down pretty sharply. That is
something that might give the Fed more reason to accelerate the tapering and potentially start raising rates next year, even if the payroll gains
numbers aren't optimal.
So I think that is what is freaking out Wall Street a little bit as well, not just that the jobs gains were lower than expected, but that they were
lower than expected and it may not matter to the Fed, they may still look to tighten soon.
QUEST: Why is the market unwilling or unable to take on board the obviousness that you know, there's going to be tightening.
LA MONICA: I mean, we had a taper tantrum, so to speak when Ben Bernanke was doing this, you know, back after the Great Recession. I think it goes
without saying that one of the things that happens anytime there is a market crash, a major recession, Central Banks step in and say everything
is going to be okay. Here's a lot of liquidity.
But eventually, they need to normalize interest rates and monetary policy. Take away the proverbial punch bowling. Guess what? When you're drunk at
the party on easy money, you don't want that to happen. You want to keep drinking all of that liquidity, so the market is throwing a bit of a hissy
fit to put it mildly.
QUEST: Paul La Monica, thank you, sir. Let's look in deeper into those numbers from November, and there were, as Paul alluded to, promising signs.
So the unemployment rates inched down to 4.2 percent.
It is the lowest since the pandemic, but it is still about 0.6 or 0.7 above where we were. Average wage is around $31.00 an hour. That's up 4.8 percent
over last year -- wage inflation. President Biden said these were signs of recovery, and yet noted the uncertainty.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: Also, in the first 10 full months of administration, the economy has created six million jobs, a
record for a new President. This is a significant improvement from when I took office in January, a sign that we're on the right track.
Because of the extraordinary strides we've made, we can look forward to a brighter, happier new year ahead, in my view. But I also know that despite
this progress, families are anxious. They're anxious about COVID. They're anxious about the cost of living, the economy more broadly. They're still
(END VIDEO CLIP)
QUEST: So to Nela Richardson, and the Chief Economist at the payroll H.R. firm ADP, without getting too much into the discrepancy, if you will,
between the payroll and the unemployment number, if you had to give me a snapshot, is it -- without half glass half full or half empty -- which do
you think it is?
NELA RICHARDSON, CHIEF ECONOMIST, ADP: Half empty, when it comes to firms and half full when it comes to households, and that's where we're seeing
the good news. We are seeing an increase in the labor force participation, we saw that pretty much everyone from the numbers, who went in last month
to get a job, got a job. That's good news for households.
So if you believe that household survey, things are looking up. It is a broader based survey that includes self-employed, so all that new business
formation may be counted and it may be the case that the establishment survey is starting to lag. The good news in the household sector still too
thin to tout.
QUEST: It's very difficult to make sense. It's very difficult for the markets to make sense of this, when it is difficult to factor in what
policy decisions follow on from it, isn't it?
RICHARDSON: Richard, it is the way the markets read the report. They are trying to decipher whether the Fed sees this as good news or bad news, not
whether the economy sees this as good news or bad news. And from the Fed's perspective, they can create the narrative that they want, because so many
of these terms -- full employment, for example, are so hard to define and haven't been defined clearly.
So when the Fed says mission is accomplished with all of this, met those conditions of the Fed, though, do so without really giving us hard numbers
on when that happens, and that uncertainty is being played out in the market.
QUEST: I was looking at the unemployment rate just prior to the pandemic, and we're about down at about 3.5 to 3.6 percent, so we're still
talking about 0.7, which doesn't sound much, but on a scale of only 4.2, it is quite a large amount. And in terms of numbers of people, it is still --
we've still got some way to go to get back to where the U.S. was.
RICHARDSON: Yes, I mean, we are still five million workers short of where we were pre-pandemic. And recall before the pandemic happened, the
Fed narrative was very clear, their stance was that the economy could tolerate lower levels of inflation and lower levels of unemployment rate.
And so, it was okay to keep interest rates at record low levels, because there wouldn't be a challenge on the inflation side, and there would be
gains on the labor side. Now that narrative has been challenged. It doesn't look like you can have your cake and eat it, too from the fed's
perspective. And so that's where we're seeing the double step here, and that's again being reflected in the market volatility.
QUEST: Well, the danger of course, I mean, an issue for another day, is the danger, of course whether or not both sides of the job update are now
called into question.
Good to see you, Nela. I appreciate it. Thank you. Have a lovely weekend.
Now, the World Health Organization is learning more about how quickly the new coronavirus variant can spread. And British officials say most of
U.K.'s omicron cases involve people who have actually received two vaccine shots.
In a moment.
QUEST: More governments are to omicron. The streets of Dublin will be a lot quieter this Christmas. This is a live picture tonight of the Irish
capital, it's busy at the moment. It is only 10 past eight, it'll get even busier. But now, Ireland just placed new restrictions on the hospitality
sector over the Holiday period.
Nightclubs will be closed. Bars will be limited to table service. The latest country to impose new rules for the omicron variant.
My producer Ronan and his wife won't be terribly happy, but at least they'll be getting to go home back to Ireland for Christmas. And Ireland is
also one of more than two dozen countries that restricted travel from Southern Africa to slow the spread of omicron.
A transformative week for the airline industry. A month that started with a grand reopening in the U.S. closes with new restrictions around the world.
Israel, Japan, Morocco, completely closed to international travel, and strict new 24-hour testing rules for travelers headed into the U.S. into
effect on Monday.
I.A.T.A is the International Air Transport organization and says travel bans threaten the industry's fragile recovery. Willie Walsh is the Director
General and Willie joins me tonight.
Willie, I understand the argument, but I can also see the political expediency of saying it does at least slow the flow of people who might be
infected from those parts of the world.
WILLIE WALSH, DIRECTOR GENERAL, I.A.T.A: I don't agree with you, Richard. And certainly the data doesn't support that, and I would, you
know, suggest you go back and look at what happened in the U.K.
So the 22nd of May last year, so 18 months ago, they announced that they were introducing travel restrictions. And they said they were doing it
specifically to slow down the rate of infection and to prevent a second wave. And on the day they announced that, there were 254,000 or there had
been 254,000 infections in the U.K. Today, there are 10.2 million and it certainly didn't do anything to slow down infection.
And we've looked at the data to see is there a correlation between these travel restrictions and the level of infection and we can't find any. So,
you know, I think it came as a surprise and a huge disappointment because what shouldn't have been a surprise is that we're going to find another
variant. But yet it seems it has taken governments by surprise and what we saw was a panicked reaction for many governments around the world.
QUEST: Do you favor the sort of response that the U.K. has put him with a sort of a new day to PCR and the U.S. with an antigen 24 hours before
Are these more targeted, sophisticated, nuanced responses?
WALSH: I think I would give credit to the Biden administration. They didn't panic in the way other countries did. They looked at the issue, and I think
they've put sensible measures in place and hopefully, there will be temporary measures until we fully understand what this variant means.
I do have a challenge for the U.K. government, however, because they seem, you know, that they really do want to use these PCR tests, which have to be
regulated in the U.K. because it's allowed an industry to the point, which is completely out of control.
QUEST: For the industry overall, which had already lost a number that is frightening last year, will lose money this year. How long -- I mean, the
airlines are much better capitalized as a result of what they did. But going into 2022, are you concerned that some simply won't be able to
survive another wave and another wave and another poor tourist season.
WALSH: I would hope that this will be a short-term measure and that airlines can get back. What we've seen, as you know, is that there is very
strong demand for flying once the restrictions are relaxed, or I wouldn't say the certainty about the restrictions. I think what is disturbing people
is when they want to travel, but they are unclear as to what will happen when they are away or when they return.
So everybody is hoping that this will be a short-lived temporary stay on the recovery and that we will get back because we were seeing very good
recovery figures prior to this new variant and to think that we will see them as we go forward as well.
QUEST: I want to just finally, Willie, return to this thing about do travel bans work or not? Because when I've tried to sort of defend it, the
answer has always been well, I'm not prepared to take the risk. And I can't help feeling that if I was a Transport Minister, a Prime Minister, or a
Health Minister, first of all, no one would trust me with that. But if I was, I'm not sure I would be prepared to take the risk, I think I would be
more prepared to say, slow down, ban from those areas, and start working through until we know the situation.
WALSH: Governments and politicians are not good at taking risks. They don't like it because they're always fearful of things going wrong. I think they
could learn from industry where we live with risk every day, we have to take measured action.
But the critical thing is once we better understand the risk, can we remove the mitigations when we see the evidence that they're no longer required?
And that's the problem with politicians. They're very quick to introduce them, very slow to remove them.
QUEST: Willie, I wish you well. I don't know whether you're going to Ireland this year -- back into Ireland this year, but you won't be going
out in Dublin.
WALSH: Well, I'm heading there on Sunday and hopefully, I will be going out and get a pint of Guinness to replenish the Guinness in my lot, but
hopefully the pubs will still be there.
QUEST: I'm sure you'll find a way somehow somewhere. Thank you, sir. I wish you and your family all the very best for the Holiday season. Willie
Walsh of I.A.T.A.
The World Health Organization says the new variant appears to be very transmissible based on the numbers from South Africa. The group's technical
lead on COVID-19 says it has turned up in every region monitored, still unclear if omicron could become a bigger threat than delta.
In South Africa where the virus was first detected, the Health Minister says there's been a steep rise in infections. CNN's Eleni Giokos reporting
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT (voice over): An early Zoom call, a familiar sight. It is run by South African scientists in the
omicron age, the world watches with bated breath.
MICHELLE GROOME, SOUTH AFRICAN NATIONAL INSTITUTE FOR COMMUNICABLE DISEASES: Some preliminary data that we have is definitely evidence that it
is more transmissible and that there is some immune escape. But I think, it is not necessarily that that is related to severity. I think we need to
have more information over the next two to three weeks.
GIOKOS (voice over): That question of severity hangs over policymakers around the world.
The South African experts caution not to draw early conclusions from the fact that most cases they see now are mild.
DR. WAASILA JASSAT, SOUTH AFRICAN NATIONAL INSTITUTE FOR COMMUNICABLE DISEASES: Our data, you know tells us a little bit about patients in ICU
ventilated on oxygen, but it takes time for, you know admissions to unfold and for the severity measures to come about. What we also see is that
severity is always low in the early and late part of the wave.
So, I think even if we are seeing a slightly less severe disease right now, it's too early to say that that's a characteristic of this variant.
GIOKOS (voice over): Swiss leaders are taking no chances. Geneva has seen mass protests against restrictions in recent weeks, but health authorities
still say Friday, they are quarantining 2,000 students and staff after two cases of the omicron variant were detected at a local school linked to a
family member returning from South Africa.
U.S. President Joe Biden says he'll step up testing efforts and require international arrivals to get tested just 24 hours before boarding the
BIDEN: This type of testing timetable provides an added degree of protection as scientists continue to study the omicron variant.
GIOKOS (voice over): The CEO of BioNTech who helped create the Pfizer vaccine says he believes the current inoculations are still effective.
UGUR SAHIN, CEO, BIONTECH: Based on the mechanism of our vaccines and vaccines in general, we know and we anticipate that infected people who
have been vaccinated will still be prevented against severe disease.
GIOKOS (voice over): Access to those vaccines remains critical.
SOUMYA SWAMINATHAN, WORLD HEALTH ORGANIZATION, CHIEF SCIENTIST: There is a clear relationship between inequity and access to vaccines and the
development of variants.
GIOKOS (voice over): The World Health Organization's Chief Sciences with a stark warning on Friday.
SWAMINATHAN: And this is going to keep happening again and again. So even today, it's not too late for us to look back and really sort out this once
and for all and make sure that going forward, we do distribute not only vaccine, but also diagnostics and drugs.
GIOKOS (voice over): Eleni Giokos, CNN, Johannesburg.
QUEST: Scientific advisers of the U.K. government are warning the omicron variant could lead to a very large wave of infections. More than
half of the 22 confirmed cases were in the patients who had received at least two vaccine doses. None of the cases have led to serious hospital or
death. Vaccine makers all racing to tweak their formulas.
The man behind Pfizer-BioNTech vaccine said it won't be quick enough to prevent an omicron surge.
(BEGIN VIDEO CLIP)
SAHIN: We have the ability to adapt a vaccine relatively quickly. And with the delta variant, we have seen that there was no need for change. The
new variants can come in within a few weeks and months, so that means if we develop a vaccine, a new vaccine, we will most likely not be able to
prevent the first wave of infections with a new vaccine because it will take about 100 days to develop a new and distribute a new vaccine or start
to distribute a new vaccine.
(END VIDEO CLIP)
QUEST: Now, Adrian Hill is the Director of the Genome Institute at the University of Oxford which developed, of course, the Oxford-AstraZeneca
vaccine. Good to have you with us.
There are so many things. I mean, look, we don't know with omicron yet, but from the data that you've just been hearing today from the U.K. group, it
would appear that existing vaccines might prevent the worst case, but don't prevent infection.
ADRIAN HILL, DIRECTOR, GENOME INSTITUTE AT THE UNIVERSITY OF OXFORD: I think there are two things we know about the omicron and that are pretty
clear at the moment. Firstly, it has a lot of mutations, more than in any other strain that we've been worried about. So, that's bad news.
But the second thing we've been hearing may be good is that it's mainly or predominantly mild disease that it creates. Now, it's too early to draw
that conclusion, because it may just take time for the wave to build up and affect older people who may become more severely ill. So in two or three
weeks, we'll know a lot more about that.
But that is a pretty optimistic outcome because if you have a virus that isn't good at infecting the lungs, doesn't appear to commonly cause severe
disease or hospitalization, and of course death, then that may be generating immunity in the population very quickly, and to an extent we've
seen that with the delta variant.
So I think we just have to wait, stay calm, observe, and look at particularly the ability of vaccinee's blood or serum to block infection by
this new omicron strain, and that's coming in a week or two.
QUEST: Right. So, let us map out if you will, how, assuming there is a new -- there has to be a tweaking to the vaccines -- all of them -- it
doesn't matter which one we're talking about. Now, assuming there has to be a tweaking to the vaccine takes X number of weeks to do that, to test et
cetera et cetera, and within say three months that is now available.
But then of course, you've got to get it into people's arms, which is pretty much looking at when the next booster shots would be, so I just had
my booster shot two weeks ago. You wouldn't expect me to get another one what -- for six to nine months?
HILL: Yes, something like that depending on the time of year as well, I would argue.
QUEST: So am I chasing -- am I chasing the tail of the variant de jour, which has been tweaked by the vaccine that is currently being offered?
HILL: Yes, I think there is one missing point from this discussion, and it's really important, we keep talking about the ability of different
strains to evade antibody-type immunity induced by vaccines. What we know about the omicron already is those mutations appear to have evolved to
evade antibodies, and that's not surprising in your upper airways, it's predominantly antibodies that work, but down in the lung, where you want
protection against severe disease and death, T-cells, cellular immunity may be at least as important.
And there, with different strains, if you're using the right type of vaccine, you may be gradually building up more and more cellular immunity
in the lung and the mortality rates will keep falling relative to the number of infections, and we've certainly seen that in the U.K. where we've
had a bad wave of delta, but the numbers in hospital and the number of deaths is much, much lower than we had the last year without vaccine-
So I don't think that it is wasteful to keep boosting if a new variant is going to keep emerging. I think we're going to gradually develop a lot of
population immunity, particularly against severe disease. And Ugur Sahin said earlier, we may not need to change our vaccine. But my guess is we
will with omicron, it's not a certainty.
QUEST: It's Friday, so we can sort of look away ahead in one sense, it's almost half past eight, you must be nearly ready for a sit down in a very -
- there was a view that says this, one of two options. Either a variant comes along that really does clobber us again, and takes us all the way
back again, or we just muddle along as we are with a variant here, a variant there, but eventually, you know, whether it's one year, three
years, five years down the road, we look in the rearview mirror and say, well, it's just about over, we get nasty cases every now and again, but
most of us have built up an immunity and it's just like the flu.
HILL: In fact, it is very like flu. If you remember that the nearest thing to a pandemic this century before COVID was what we call a swine flu and
that spread around the world and we were very worried about it initially, because people thought that it might be worse than ordinary flu. Today,
it's still with us. We vaccinated -- we vaccinate against it every year as one component of our multicomponent flu vaccine that we give to many, many
My guess is that this coronavirus will end up like that strain of flu. It will probably be mixed in with a flu vaccine in two or three years' time,
and people won't even notice that they are getting it.
I don't think that's a particularly optimistic view. I think that tends to happen with more virulent pathogens. And if this omicron, which is wearing
people today turns out not to be at all virulent, but very transmissible. That will be a great example of another virus that you know, we may be
noticed getting and get an upper respiratory tract infection, but the mortality rate is very low. So that is a possible outcome of the omicron
wave that we are seeing. But we will know in two or three weeks, whether there really are a lot of severe cases, I think that's unlikely.
QUEST: I take great optimism from both scenarios that you've sketched, because both scenarios allow us to just basically get on with our lives
without worrying about serious hospital hospitalizations or otherwise.
Good to see you, sir. Very grateful.
HILL: Thank you very much, Richard.
QUEST: I think you've earned that Friday evening drink now. Thank you, sir. Half past eight in the evening in the U.K.
The Chinese -- this is just bizarre, whichever way you look at it. DiDi, first of all, IPOs on the New York Stock Exchange amongst much more -- and
now, it is planning to delist and move to Hong Kong and whether this is a precedent for other Chinese firms listed on U.S. markets.
I don't understand it, we will explain after the break.
QUEST: I'm Richard Quest. A lot more QUEST MEANS BUSINESS here in a Friday. Chinese ride hailing app Didi, the latest casualty of the battle between
U.S. and China's stock markets and regulators and governments. And the new real estate boom is taking place in the Metaverse. I'll speak to a group of
paid millions for virtual lab. Before we get there, let me update you with the headlines because this is CNN and here the facts always comers first.
Police are searching for the parents of Ethan Crumley. That's the Michigan High School student who is accused of killing four of his fellow students
on Tuesday. Manhunt is now underway. James and Jennifer Crumley were charged with four counts of involuntary manslaughter. And they're to be
arraigned within the hour.
The Biden administration is planning to relaunch a controversial Trump era program known as Remain in Mexico. Starting on Monday, the U.S. will again
send migrants to Mexico to await their immigration court hearings. The program is being reinstated because of a federal court order.
The Taliban has released a special decree on women's rights in the country, setting out the rules on marriage and property ownership saying women
should not be forced into marriage. However, it does not mention a woman's right to work outside the home nor guarantee access to education.
Five months and three days, that's all it took for China's biggest ride hailing company Didi to go from an IPO much ballyhooed on Wall Street to
announcing its delisting from the New York Stock Exchange. I think five months in three days must be a record but I'm sure somebody will put me
right if they know so, another stock that delist in a shorter space than that. It will delist as soon as possible and IPO traders dead on Hong Kong.
The share price is off 22-1/2 percent battered Chinese regulators since going public in the United States. Just look at that. Look at that.
I mean, Beijing band Didi from Chinese app stores this summer. That was the first bit and that created the first fall. It was on the basis of data and
security and privacy concerns. Billions have been wiped off investors, a disaster for early investors and the shares are now worth less than half
their IPO price. The decision though to move to Hong Kong, is weighing on other Chinese companies listed in New York because the issue will be
whatever it happened to Didi could it happen to them.
For instance, Alibaba, Tencent, and Baidu, could they be forced out of their U.S. listing? Arguably even the video. U.S. regulators are demanding
more transparency for Chinese companies to list in the U.S. and China's seeming set to ban the financial loophole that allows it. Jamie Metzl is a
senior fellow at the Atlantic Council and work for the National Security Council under the former President Clinton.
Well, Jamie Metzl, when I heard this, I mean, I just thought now about everything. Your IPO five months ago and you delist with some vague promise
that you're going to offer the similar shares or securities to those investors in the Hong Kong market? What do you make of it?
JAMIE METZL, SENIOR FELLOW, ATLANTIC COUNCIL: Well, Richard, this is a big story. But it's only a small piece of a bigger story. The bigger story is
the growing decoupling between the United States and China across the board, including economically. Yesterday, as you know, the U.S. SEC passed
a regulation requiring more transparency for the accounting firms that are involved with listed Chinese companies.
And the Chinese government has resisted that. I think we're going to see a lot more here. And this is just the beginning. This isn't just about Didi,
this is about economic relations between the United States and China.
QUEST: Essentially, though, if the -- we say U.S. markets, but for want of a better word, if the western markets become shut off to Chinese companies,
sure, they can raise the same money. There's a there's a wall of money in China, that will fund IPOs there. But it puts a nail in the coffin of
globalization in terms of global securities.
METZL: Well, there are many of us who maybe decades or less ago imagined that our world would follow a path of greater and greater integration. And
that's certainly a very positive sign. But what we may well be seeing now is as I was mentioning, before the beginning of a decoupling. Maybe we'll
have two spheres of globalization. The U.S. centric sphere and the sinocentric sphere.
And that doesn't mean they'll be totally separate. But it does mean that the kinds of economic integration, whether it's through markets, supply
chains, people many other things, we're probably are very likely moving away from a single globalization story.
QUEST: So if you're holding Didi shares, and your nursing losses, that's fine. Fair enough. But at some point, you're going to have to make a
decision on to sell and take your losses, or accept whatever weird construct they come up with upon delisting and the issuance of new shares
in Hong Kong.
METZL: Yes, it's true. But if you're holding Didi shares now you are already holding something based on a strange construct of not really owning
those shares, but only owning a share of something held in Caymans that was at basically an interest in profit. Profits from shares in China. And yes,
this is another shenanigan. But yes, there are some people who will hold on to their Didi shares if they can.
If they have the stomach for it and there's a chance that they'll make a little bit of money. But the bigger question is, is this a foundation upon
which to rest international economic and market relations? Because anybody who is buying any Chinese company share listed in the United States,
basically, you're putting your faith in the Chinese state which is not looking out for American or international investors.
QUEST: Answer your own question. You just asked question. Is this an answer? What do you think? Is this such a gobsmacking reversal of anything
that those of us who invest in Western markets are used to, that it essentially makes Chinese stocks in U.S. markets radioactive?
METZL: Yes. If you are holding Chinese stocks, Chinese companies listed in the United States you are putting your faith in the behavior of the Chinese
And the Chinese government is making 100 percent clear that its interest is not protecting American equities holders, but protecting the interests of
the Chinese Communist Party.
QUEST: Jamie, we'll talk more and we bought some Didi shares to see how they're going to progress. And as we move forward with this, we're going to
want to this -- we'll have to decide next year, you know, what we're going to do with them? So will -- you can help us, you can help us out.
METZL: All right. It's a deal, Richard. Great to see.
QUEST: What are we going to do with our Didi? Keep them, invest in Hong Kong, take a loss. Well, we'll discuss it in the weeks ahead. Well, this is
QUEST MEANS BUSINESS, because the real investments is about what you and I do on a daily basis, not about (INAUDIBLE) Thank you.
QUEST: The demand for accessible and affordable homes has never been higher, hoping to provide a quick solution as a company in Dubai that will
ship your house, no, quite literally ship your house overseas. CNN's Eleni Giokos is thinking big.
ELENI GIOKOS, CNN CORRESPONDENT: Bedrooms, living area and open kitchen.
UNIDENTIFIED MALE: We've got understairs storage cupboards.
GIOKOS: It's a house like any other or not quite.
GWYN TAYLOR, GENERAL MANAGER, LINQ MODULAR: So where we are right now is at the beginning of the production line.
GIOKOS: What makes it distinct is that it was constructed kilometers away in house factory and was assembled on site in a matter of weeks. It's
called modular housing.
TAYLOR: Modular is really taking elements of work from a construction site and then manufacturing them in a controlled environment off site.
GIOKOS: LINQ is a modular housing company established in Dubai in 2020.
TAYLOR: The big idea behind LINQ is to provide a housing solution where there currently is money.
GIOKOS: From infills to external layers, plastering, drilling, here building looks a bit different. It's like a production line.
TAYLOR: When the work on that particular module is finished, everything gets indexed to the next workstation.
GIOKOS: All in all, the idea is to save time.
TAYLOR: The construction industry doesn't seem able to get levels of efficiency that it needs to make itself sustainable.
GIOKOS: Depending on the projects LINQ estimates it could deliver houses up to 40 percent quicker than the traditional way. Once ready, the modular
houses can be shipped and assembled anywhere in the world. And this could be part of a solution to a global problem. The United Nations estimates
that 40 percent of the world's population will need access to adequate housing by 2030.
LINQ is looking to get started on helping to supply this demand by shipping houses next year to the U.K.
TAYLOR: So we look at the U.K. market and the U.K. market strives to deliver 300,000 homes a year. It's currently delivers around about 150,000
homes a year. We believe that modular provides an answer to bridging the gap between what they want to do and what they need to do.
GIOKOS: The company also hopes to deliver houses much closer than that, in its home country. However, it is unlikely we'll see modular Burj Khalifa is
in the future.
TAYLOR: Construction by nature has a lot of flair in its design. We are essentially manufacturing rectangular steel boxes that has a place and it
can be integrated and it can be made to look fantastic, but it won't solve all problems.
GIOKOS: So there's still room for growth. But with LINQ's first units shipping next year. If you're looking for a simple quick design, a house
from Dubai could be an option for your future home. Eleni Giokos, CNN, Dubai.
QUEST: Now, hold on to one really important thought as we move on. That last reporting Think Big was real houses in the real world. Yes, you could
see them, you could touch them. You could knock hands on them. You could knock him down. You could build them up. You could change the paint and the
carpets. But what about real estate in the virtual world? Tech investors are rushing to bid on plots of land in the Metaverse.
After the break, the company that spent more than $4 million, I tell them what they've spent it on to buy what? When you're looking at it, but what
are they buying? And is this the emperor's new clothes? After the break.
QUEST: An expert of state boom won't change your city skyline or give you construction misery is taking place in the Metaverse. The virtual world
where futurists say our online lives are headed.
This week, a digital product of London a platform called Sandbox sell for $4.3 million. The buyers is Republic Realm and the seller is Atari. The two
say they're planning to develop it and rent it out to others. The race is on to buy premium space in the leading online realms before the rest of us
arrive to spend our money. We can bet on any of the plots of land that you see here. Some are more valuable than others.
If you bind to a platform that fails to catch on, you know, it's dot com boom and bust. Get the wrong one and it could be worthless. Janine Yorio is
Republic Realm's co-founder and managing director joins me now. How much of a leap of faith was this to decide to commit such a large amount of money
to essentially -- what? Not center to virtual property that could become worthless?
JANINE YORIO, COFOUNDER, REPUBLIC REALM: There was absolutely zero leap of faith. I actually have the privilege of having two critical walls. I have
two children who spend their entire lives every free moment that all allow in the Metaverse. So while us adults might think that the Metaverse hasn't
started yet or that we're waiting for it to happen. If you look at today's children, especially the children who have spent the last two years under
lockdown, they're already spending all of their free time doing all of their socialization, finding all about new products in the Metaverse.
So I know without any hesitation that the Metaverse is the next iteration of the internet. And owning the spaces in those Metaverse is going to be
insanely valuable. And I'm not the only one that thinks so. Lots and lots of smart money is piled into the category. We've been investing in
Metaverse real estate since March and the investment returns have been honestly, astronomical.
QUEST: Right. But you've got to be careful, haven't you? Because, you know, Myspace reminded us that if you back the wrong horse, then it could come to
grieve. I don't deny your met the Metaverse is where it's going. But I guess it's a question of which, where, when and how.
YORIO: So that's why I think what Republic Realm does is so interesting. We've invested across 19 different Metaverse platforms already. So we're
not just betting on this one. We look at all of the Metaverse platforms we come across. So today, for example, we're tracking over 180 different
Metaverse platforms and new ones are being announced every week. The allure of working with experts like us and investing through our investment
vehicles is that you get exposure to a broad diversified portfolio.
So instead of buying one spec home in Tallahassee which nobody would ever advocate as a great real estate investment strategy, you're investing in
something that's much more like a nationwide diversified REIT. And so that's the value out of a company like ours, we're doing the legwork on the
ground to find the best possible places, but we're also not putting all of our eggs or yours in one basket.
QUEST: Right. Now what about a subprime mortgage crisis? Or the the Metaverse equivalent? I guess what I'm trying to get at here is, do we have
to still remember, it might be a new environment, the -- but it -- but the same rules apply. So for example, in real estate, what is the number one
rule of real estate location, location, location? That assume the same in the Metaverse.
Number two, debt, take on too much debt and your investment can't pay off because your rental income can't make it. In other words, the subprime
mortgage crisis. Do we have to -- do we have to ground our Metaverse enthusiasts with real life practicalities?
YORIO: Well, of course, I mean, I'm -- you know, this isn't my first market cycle, I've lived through and I was around for the internet boom as well.
So I understand that there is always a potential for a market cycle or correction. I think we use the word Metaverse real estate because it makes
it easy for us to understand what this is. It's the space inside these virtual realities. But the truth is, it's actually not real estate. It's
And what's the cardinal rule of investing in technology? It's getting early. So investing in Metaverse real estate today is like buying land in
Manhattan when it was still forest and then farmland. So it's not exactly the same as real estate. It is ultimately software and code. And if you ask
anybody who mined a Bitcoin in 2010, if they're upset about having gotten in early, and whether lots of different market cycles, you'll get one
answer time and time again.
It's absolutely not. So yes, it's risky, and it's volatile, but can also be insanely lucrative for the people that have the appetite for that kind of
QUEST: It's fascinating. I can't -- I mean, I can't decide whether I'm what -- whether in all of this Metaverse I'm watching a gold rush. And all the
the beginnings of something truly tremendous. I can't decide --
YORIO: Why don't we do this? Why don't we set up a show for you in the Metaverse so we can do a studio. We'd love to have a CNN studio in the
Metaverse, we're a landlord, we can give you -- we can give you the most prime location today and we'll give you a forum and when we can meet there
with some frequency, you can see for yourself.
QUEST: This is very tempting. This is very tempting, isn't it? I'm being lurred into the Metaverse with the --
YORIO: Very seductive.
QUEST: Listen. I do worry though.
YORIO: Travel, we don't even have to go meet each other, right?
QUEST: Oh, no.
YORIO: -- from the comfort of the sofa.
QUEST: No, no, no. I -- no, no, no, I'm a firm believer that at some point with any good business partner, you will look him in the eye, shake him in
the hands and have -- and have a drink and and get to know them. One final point on all of this. Is it educational for your kids? I mean, should it --
shouldn't it -- should it be encouraging to read a book or be in the Metaverse?
YORIO: Well, I think we've all lost that battle.
QUEST: Good point. Excellent point. I think -- oh, we lost that battle. We also lost that line at that particular point. And you still -- I can still
-- so I can still hear you. If you want to finish that thought.
YORIO: Sure. So I think we've all lost the battle against technology for our children, but it has taught my children to code. My son has set up a
Minecraft server and during lockdown, he was able to connect with his friends which -- as we all see is an important skill. And it's an important
thing we needed when we were all feeling very isolated. And I think the Metaverse do that for people that can't travel, people that are far away
from population centers. It has --
QUEST: And Janine, with his coding skills and his experience in his Metaverse he'll be able to keep you well into your -- into your dosage. It
log very well indeed. Excellent. Good to see. Thank you very much. We will take up profitable moment after the break.
QUEST: Tonight's profitable moment, Didi's decision to delist five months and a couple of days after its IPO makes a mockery of the markets. But they
won't care about that. Because the goal is to keep the Chinese authorities happy and sweet. The reality as Jamie Metzl said on this program, the
divergence now on philosophical grounds. Look at it, down 22 percent because of that decision.
The divergence on philosophical grounds between a Chinese system and the U.S. investment system is only going to get wider and that needs to be a
matter of great concern to anybody who wants to see well-regulated, well- functioning markets. At the moment, as Jamie Metzl said Chinese stocks in U.S. markets or Western markets for that are simply radioactive. And that's
QUEST MEANSA BUSINESS for tonight. I'm Richard Quest.
I'm traveling next week. Bangkok if you see me, then Dubai, say hello, let's have a wave, let's exchange good views. Whatever you're up to in the
hours ahead I hope it's profitable. I'll see you on the road.