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Quest Means Business
COVID Surges and Markets Rise; Vaccines, Inflation, Jobs in Focus in 2022; Twitter Bans Lawmaker's Account over COVID Misinformation; Biden Ready To Respond Decisively If Russia Invades Ukraine; Prince Andrew Accuser's Settlement With Jeffrey Epstein Released; U.S. Approves Pfizer Booster For Children Aged 12 To 15. Aired 3-4p ET
Aired January 03, 2022 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:22]
RICHARD QUEST, CNN BUSINESS ANCHOR: First trading day of the New Year and green on the markets. That's a good way to get things started.
The markets are higher despite the headwinds that 2022 may bring. The markets as they are slowing at the moment, and these are the main events:
COVID cases are surging around the globe, but I'll be looking into our usual crystal ball this year.
Mohamed El-Erian will be with us to find out what might be in store for the economic year ahead.
Also, the jury in the Elizabeth Holmes trial has been sent back to deliberate longer, Raj Rajaratnam sees similarities with his own fraud
trial. Remember, he went to prison.
And I begin by facing the fear by face my fears. Hear my New Year's resolutions from the top of New York City.
We are live in New York, start of a new year. Monday, January, the 3rd, I'm Richard Quest. I mean business.
Good evening. Tonight, Europe is looking for new ways to manage the expected post-holiday surge in fresh COVID cases. They are rising
dramatically in Western Europe -- look at the map -- as national governments try to take preventative measures, whilst at the same time
making sure to keep economies moving.
Riot police in Amsterdam broke up this protest at the weekend, which was against strict lockdowns in the Netherlands. Around 2,000 people attended
the demonstration, despite the country's ban on public gatherings.
France is now the sixth country worldwide to record more than 10 million cases and it is adopting measures to manage the disruption. It is allowing
vaccinated people to leave quarantine earlier and requiring booster shots four months after the second vaccine dose.
And a new bill requires proof of full vaccination or recent recovery for entrance to places like bars and restaurants. A negative test alone will no
longer be sufficient.
Cyril Vanier is in Paris. Let us wish you a Happy New Year, Cyril, to your kin, just to you in the family. Before we go further, what is the situation
in Paris tonight?
CYRIL VANIER, CNN CORRESPONDENT: Richard, Happy New Year to you and yours as well. It's good to be with you this evening.
The situation right now is that France over the Holiday season has stepped into this new reality. It is a reality that is now shaped very deeply by
the omicron variant, and that means on the one hand, a much more transmissible variant with a very high number of daily infections, today
not a good example because Monday numbers are always low. Tuesday number is always much higher, because there's a catch up after the weekend.
But the number of cases that we've seen over the last week or so in France, are exponentially higher relative to the highs that France had known during
the pandemic before then, by a factor of four to five.
Ad you hit the nail on the head earlier, Richard when you said France along with other European countries are trying to toe this line between keeping
the economy open, but also trying to limit the number of cases and that is something that's very difficult to do with omicron.
So France finds itself with these new sets of measures that have come into force today where you can still go to cafes, for instance, but you can only
eat sitting down, not standing up. You can still go to cinemas, but you can't take off your mask and eat popcorn.
Just moments ago on BFM-TV, CNN's French affiliate here, the Transport Minister for France was explaining, yes, you can eat or drink on a train if
you have that physiological need, but he doesn't want you munching on your chips for hours and using it as an excuse to keep your mask off for hours
in the train.
So they're again trying to toe this line, how do you keep the economy running? And still keep in place the measures like mask mandates et cetera
that you think will keep case numbers low? That right now is France's conundrum -- Richard.
QUEST: Right. But where are we seeing the level of hospital admissions, deaths? All the relevant things? Now, I know that the goal is to keep cases
low so that their health service isn't under pressure, but how much pressure is it under?
VANIER: You're right. The real barometer of course is hospital admissions, the rates of hospital admission and admission to ICUs and sadly, deaths,
Richard. Those numbers are ticking up, but right now they are lower than they were a year ago. Same time last year, there were more people in
hospital, there were more people requiring intensive care than there are now.
[15:05:10]
Two ways to look at this. One is that omicron has only just recently become the dominant variant in France, and so this sadly, may no longer be true in
say, a couple of weeks, two weeks from now, you might see an explosion in the number of people admitted to hospital.
The other explanation is that omicron is not as severe as the variants that it has replaced, such as delta. And therefore you see high cases, but
fairly low hospital rates. In the long run, Richard, that is exactly what French authorities are banking on. They actually believe omicron, may, to a
degree, be good news because a more contagious, milder version of the virus means that more people will be infected, but won't be going to hospital,
and over time could mean that that would lead to an increased level of protection within the population.
That's what the French government is banking on now -- Richard.
QUEST: Not only the French, I suspect others, including Boris Johnson in the U.K. are all the same. Thank you, Cyril. Cyril Vanier in Paris.
Israel is of course taking the global lead in deploying the vaccines -- small country, it's easy to sort of become a testing bed, and the testing
ground for the rest of the world. It is expanding the list of people who can get a fourth vaccine dose. Now, anyone over the age of 60, and
healthcare workers are eligible. The country started administering the fourth dose last week. The elderly residents and those with weakened immune
systems.
New infections fueled by omicron is the reason. Elliott Gotkine joins me now from Tel Aviv. So, we have a widening definition of eligibility. But it
really does raise the issue. So what next? A fifth? A sixth?
ELLIOTT GOTKINE, JOURNALIST: Well, they have yet to roll out the fourth, Richard, to the entire population. So I think for now, it's very much
focused on that rollout for particular high risk groups. But of course, as you say, as we're seeing so many countries grappling with unprecedented
rates of COVID infection right now. They will be seeing Israel as a testbed and will no doubt be watching very closely to see what happens with the
rollout of this fourth shot, to see if it can help in the fight against omicron.
(BEGIN VIDEOTAPE)
GOTKINE (voice over): Fourth time is the charm? Israel's immunosuppressed began receiving their second booster shot on New Year's Eve. On Sunday
evening, almost two weeks after trumpeting the plan, Prime Minister Naftali Bennett said they'd now be joined by those over 60 and healthcare workers.
NAFTALI BENNETT, ISRAELI PRIME MINISTER: Israel will once again be pioneering the global vaccination effort.
Omicron is not delta, it's a different ballgame altogether. We must keep our eye on the ball, act swiftly and decisively if we want to continue
engaging and working with an open country as much as possible throughout this pandemic.
GOTKINE (voice over): To that end, Bennett also announced that quarantine requirements would be lifted completely on people exposed to an omicron
carrier, so long as they test negative and their vaccinations are up to date.
Yet, with long lines outside testing centers and cases doubling every few days, Israel is bracing itself for the full force of its fifth COVID wave.
The only bright spot, it may not last,
ERAN SEGAL, PROFESSOR, WEIZMANN INSTITUTE OF SCIENCE: Our projection is that this wave is going to be rather quick and that within about three
weeks, I estimate that at least two million people here in Israel, which is about one-fourth of the population is going to be infected and that may
lead to a sort of herd immunity after which we may see a slowdown.
GOTKINE (voice over): For now though, Israel is hoping omicron's possibly lower level of severity together with the rollout of the second booster
will help keep the number of serious cases down, and that like other COVID waves before it, this one too shall pass.
(END VIDEOTAPE)
GOTKINE (on camera): And Richard, another thing that they announced today is a plan from the government to actually relax some of the border controls
in the country. So you may remember that Israel kind of pretty much shut -- closed its borders to all non-Israelis.
Now from Sunday, as the plan if it gets Parliamentary approval is to relax those restrictions for countries -- for most countries, they'll be able to,
if they're vaccinated or who can prove that they've recovered from COVID or recovering, they will be able to come into the country. If they show a
negative PCR test or wait 24 hours they'll be free to go on their merry way.
But there are still a few countries on that Red List, Richard, including the United States, the U.K., and the UAE. Non-Israelis coming from those
countries will not be allowed to come into Israel.
QUEST: It is complicated stuff. You really have to watch the details carefully. Elliott, grateful in Tel Aviv.
Now the markets are looking beyond. They are starting the year in the green. The Dow is up more than 200. It is the two session's high this
afternoon. The Dow rose more than 5,700 points last year, nearly triple its gains in 2020, the first year of the pandemic, but that's -- we can't
really judge too much on that.
[15:10:10]
So, we keep this in a cupboard. We keep this in a cupboard and we bring it out once a year, because it's sort of really only got powers to do this
once. And we want to need the crystal ball of how the markets will do this third year in the pandemic.
Now, vaccination rates are lagging in many places. However, in the start of last year, there was virtually zero, so we're better off than we were. And
as we've been talking boosters are on the way.
Inflation and fears of inflation, now, that was their big story last year. Inflation is at a 40-year high, it started at 2021 at 1.4 percent and ended
in five to six percent, and then there's the future of work.
Goldman, one of the financial firms that pushed back against remote working, and yet Goldman now the latest to tell employee stay at home.
So we're waiting for the first jobs numbers, which will come out on Friday.
Mohamed El-Erian is the President of Queen's College in Cambridge. And I'm wondering -- and it looks as if we are joining you in the College. So thank
you. Happy New Year to you and the family, as always, Mohamed.
Now, of all that I've laid out, economically, what is the most significant thing clouding your crystal ball?
MOHAMED EL-ERIAN, PRESIDENT, QUEEN'S COLLEGE, CAMBRIDGE UNIVERSITY: Well, there are two things Richard, and Happy New Year to you.
One, it is not just inflation, but what will be the reaction to inflation? And second is what do you make of the fact that different countries are
approaching living with COVID differently? So you know, your ball will be very clear saying we've got to get the inflation call right, we've got to
get the COVID call right.
But once you go beyond that, you get a lot of different outcomes that are possible. And that's what makes 2022 particularly uncertain.
QUEST: Right. But if we drill into that, so you've got -- I mean, the factors of any developed economy and developing to some extent, you have
fiscal policy, government spending, deficits, debts, which have just been gargantuan. You have monetary policy, well, they're all tightening up in
their own different ways and some will actually do it more and more, obviously.
And you have consumer demand, which has been the backbone of growth. So in those three, what permutation will be crucial.
EL-ERIAN: So first and foremost, it would be Central Bank tightening in an orderly fashion.
QUEST: Oh, well, somebody didn't like that. The mere idea of -- or a diversion. Let's see, has he -- Mohamed froze there from having done -- I
don't think he's back. He's gone. But he's not gone for good, so to speak.
We will find more interest in weighing what he's got to say, so he will be back as soon as we can put another five pence in the meter and we
established a -- yes, I thought that they have had better lines from Cambridge.
Well, that's a story for another day.
And yet, tonight permanently suspended from Twitter and what it means. The policy violations that prompted Twitter to close a U.S. Congresswoman's
account and carmaker, Tesla -- now, there was a very pleasant surprise from Tesla, it beat fourth quarter sales handsomely, and it did so despite a
global chip shortage and the car is -- it's full of them.
In a moment.
(COMMERCIAL BREAK)
[15:16:19]
QUEST: So, we paid the electricity bill and Mohamed El-Erian is back. He is still the President of Queen's College at Cambridge. You really must --
you really must pay the bills right now.
Look, we were talking about monetary, fiscal, and consumers, and you were telling me that we need to be careful that there is an orderly withdrawal
by monetary policy.
EL-ERIAN: That's absolutely right, Richard, and I apologize.
The question last year was will inflation stay high and persistent? Well, we've answered that. Inflation will stay high and persistent. Now, Central
Banks have to regain control.
And the Federal Reserve, the U.S. Central Bank, in particular, has a very small window to do so. So a lot is -- a lot right now depends on whether
the Federal Reserve can catch up with realities on the ground.
QUEST: Do you think the Fed has lost credibility? Bearing in mind that the head, Jay Powell, and the F.O.M.C. consistently maintain this
transitory line when everybody in their brother was saying that's nonsense?
EL-ERIAN: Yes, I think they have. But they can regain that credibility. It took him way too long to realize what the rest of us realized, which is
that the inflation dynamic was persistent. Now, they need to show us that they're serious about gaining control of those dynamics.
So far, they haven't done very much. So people are going to be looking very closely at what they do over the next few months.
QUEST: And if we look at markets, because beginning of the year, I always think it's helpful. People have been reviewing portfolios of one
sort or another. The Dow was up sharply at over 500 points, you know, now, not the best that it's ever done. But not bad all the same and I'm
wondering, in your view, is this a time for risk on or risk off?
EL-ERIAN: It is a really difficult question because there were two drivers of an incredible rally. Remember, this was the third year in a row we've
had double digit returns. One, we've talked about Central Bank liquidity, that is going away. But there was another one, which is the conditioning of
markets and that is still deeply, deeply conditioned, in terms of buy the dip.
I think on the whole, one should become more risk averse, more careful as you go into the year. But I wouldn't rush right now to sell everything. I
think there is enough momentum still for the next few weeks that we may well see some more record highs.
QUEST: Finally, my 2022 project is I'm determined to actually get on and learn my French, I don't speak French and I've wanted to speak French. I
learned it at school, of course, I'm pretty pathetic at it. Do you have a project that you're hoping to get done between now and the end of the year?
Is there some burning thing that we can test you against before December?
EL-ERIAN: Yes, it has to do with Queen's College at Cambridge, and that is to provide more opportunities for people from difficult environments to
have access to this transformative education. So that's my project.
It's not an easy one, but it is one that I hope you will mark be highly on along with my colleagues at the end of the year mark, Richard.
QUEST: I'll do better than that. How about, at some point in 2022, we come along and we present QUEST MEANS BUSINESS -- this is angling for an
invitation by the way. We come to the College and present QUEST MEANS BUSINESS from there. Does that sound like a deal for you?
[15:20:03]
EL-ERIAN: That sounds like a superb deal. You're on.
QUEST: All right, that's another promise made. It's the very first program of the year and I'm making promises. Good to see you, Mohamed El-
Erian, we will before the end of the year, there will be a high table. I know I can use a knife and fork. Thank you, Mohamed El-Erian for joining us
there.
Twitter says it has banned the personal account of a U.S. lawmaker for posting misinformation about COVID 19. Now, she is Marjorie Taylor Greene,
you'll be familiar, of course, a right-wing Republican who has a history of posting conspiracy theories. She was banned for posting a misleading graph
about vaccine-related deaths.
So the platform's regulations and other politicians and what it means. The company says it does give world leaders some leeway within the rules,
though it did permanently ban former President Donald Trump.
Donie O'Sullivan is in Washington. So, she is gone, for at least, considering, Trump has gone. Who else is -- who else has fallen foul of
this fairly draconian measure that Twitter takes?
DONIE O'SULLIVAN, CNN CORRESPONDENT: Yes, this is the first sitting Congress person that has got a suspension like this as far as I can keep
track, and it is pretty remarkable, Richard, I mean, to see an elected representative like that getting kicked off Twitter.
Now, it's really important to point out here that her personal account has been taken off, but she still has access to another account. She has a
congressional account, so she can start tweeting from there, if she wishes.
But look, I mean, I think these companies, they really don't like doing this. They tried to give politicians some leeway. Twitter has previously
publicly posted about how they believe it is important for us to hear from politicians, even if what they have to say is ugly, even if what they have
to say is lies or misinformation, because they believe they should be held accountable.
But then they also have to balance it with this idea that you know, dangerous misinformation about COVID can cost lives. And in this case, they
decided that they had to act against Marjorie Taylor Greene.
And also Richard, I just wanted to point out, many of Greene's supporters here, people on the right, Republicans are pointing out that Twitter while
banning her and Trump, banning one of her accounts and totally banning Trump still allows the spokesperson for the Taliban, for instance, on the
platform.
So that is the sort of retort from the right here.
QUEST: Right. One of the points though this ban. On one level, it makes them a martyr. But at another level, as Donald Trump has found it, does
reduce their capacity for having a direct line to their supporters.
O'SULLIVAN: It does, and I never get into the prediction business, but I do think what we will see this year is a platform where Trump has already
spoken about. He is going to launch his own social media platform, and I think we will see a lot of those very big right-wing figures embrace that
and it could become a sort of major platform.
But of course, as we've seen that no platform can be run totally allowing people to say whatever they want, because you know, rules have to be drawn
up at some point.
QUEST: Well, dreadful business, but also dreadful weather because in the background is blowing a gale. Nothing for you -- a lot from Ireland, of
course.
O'SULLIVAN: No, I have plenty of insulation here.
QUEST: No, I meant because of your history there.
O'SULLIVAN: I know.
QUEST: Quick. Quit while you're ahead, Richard, it seems to be the best way.
O'SULLIVAN: Happy New Year, Richard.
QUEST: Happy New Year to both of us. Good Lord. There you go. I was talking about the weather.
Electric carmaker, Tesla has weathered a global chip shortage to post record sales numbers. The company says they delivered more than 300,000
vehicles in the fourth quarter, which far exceeded Wall Street's projections.
The early production numbers rose, most cars coming in Q4 and the top 900,000 deliveries. That's up 87 percent.
Paul La Monica is with us. Guru La Monica as we start the year together. Happy New Year to you and the family.
Look, very simple. What did they do that turned it around? Because, you know, we know the plan was there, but what did they tinker with?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I don't think they really had to tinker with much, Richard. They did to Tesla's credit tackle head on a
little bit earlier than some other auto manufacturers the well-publicized problems with chip manufacturing issues and you know, because of some of
the partnerships they have, They were able to make their own chips as well as relying on software downloads to help mitigate some of the issues with
regards to any chip delays that could have hurt car production going forward.
That clearly helped Tesla, but make no mistake, Tesla's gains are part of what's going on in the broader industry. The electric vehicle movement is
real obviously, and to quote Seinfeld "spectacular," you've got a little a lot of growth for Tesla's rivals, which include GM and Ford, upstarts like
Rivian and Lucid Motors, as well.
[15:25:10]
So Tesla is benefiting from broad trends that are lifting electric vehicle manufacturing overall, and that's obviously great news for Elon Musk.
QUEST: Right. But it does prove to those others, so I noticed you mentioned Rivian and Lucid are both up as well. But both of those companies
have yet -- and indeed others, have yet to solve the problems that Tesla has already solved, and I think that's the impressive part about Tesla.
I mean, we discuss whether it's an industrial company or it's a tech company, it's both.
LA MONICA: Yes, it clearly is an automotive giant that gets technology and uses technology to its advantage more than other companies and that
explains the valuation gap between Tesla and the rest of the industry.
Tesla, with its share surging more than 12 percent today, market cap now well over $1 trillion. It is worth more than the entire industry combined
by a longshot. So Tesla clearly getting from Wall Street the type of love that you only see usually for other tech giants like Apple, which by the
way, just hit the $3 trillion market value level today.
QUEST: Yes, I was going to -- that was my next question -- Apple. I'm just looking at some numbers here. So it's at $182.05, give or take, it's
up about two and a half percent on the day, which means it's at its 52-week high, and so it's pretty much it is, but it's best. Extraordinary, isn't
it?
LA MONICA: Yes, it is, an all-time high. It's dipped back below the $3 trillion level a bit now. It hit it earlier when it topped about $182.85,
but Apple is a company that obviously is iPhone is the main reason why this company has done as well as it has.
But also, all of these subscription services that many people now are relying on -- Apple Music, Apple news, Apple TV+, iCloud, all of that
revenue is increasing the amount of money that Apple makes, and it is a very profitable firm, which enables it to have this market valuation now.
QUEST: Right. Before we love you and leave you, let's just look at the Dow. Let's look at the Dow, the current number. Let's both of us have a go
at this -- 36,549. What number say you, good sir, for the end -- for the last day of trading of this year? Bearing in mind what we saw last year.
What number do you think it's going to be? I'll go first. I'll go first. Thirty nine -- 10 percent, 3,000 -- thirty nine thousand six hundred or
above.
LA MONICA: I'm going to cop out and pull up prices right on you and go 39,601.
QUEST: Oh, no, you caught it. You caught it.
LA MONICA: Okay, in all seriousness, I don't think we get to 40,000 this year. I think some of the midterm issues and concerns about whether or not
Biden gets his legislative plans really through Congress. And earnings are going to slow a little bit.
So I think we -- I think we probably have more like 38,500. It's going to be a moderate gain for the Dow. I think the other indexes do better than
the Dow this year, S&P and NASDAQ will perform better on the Dow.
QUEST: And I will I promise you we have not been recording and we will not play that back against you in the future -- or maybe not.
Paul La Monica, Guru, good to have you sir, as always.
It is QUEST MEANS BUSINESS, together, we look forward to the New Year, and the storm of problems needing to travel chaos. A live picture from
Washington, D.C., where thousands of flights have been canceled worldwide. A live report.
Glad to have you on board as we start a New Year together.
(COMMERCIAL BREAK)
[15:32:19]
QUEST: Hello. I'm Richard Quest. A lot more QUEST MEANS BUSINESS as we continue enduring the Elizabeth Holmes trial, has been sent back to
deliberate. Raj Rajaratnam is with me tonight. A high-profile insider trading lettingh him an 11-year prison sentence. And I complete the highest
outdoor ascent of a building anywhere in the world. Now there's only one question. Will I do the lead forward or backwards?
But before that, of course, apologies. You probably thought I'd like to jump out the television at you. You're watching CNN in the New Year and
here are the facts and the news always come first.
U.S. and the Ukrainian presidents have spoken by telephone on Sunday and the White House says President Biden promised that America will respond
decisively if Moscow invades Ukraine. It follows Mr. Biden raising the threat of economic sanctions with the Russian President Vladimir Putin
right now as many as 100,000 Russian troops masked near the Ukrainian border.
A 2009 settlement agreement between a sex offender Jeffrey Epstein and the Virginia Roberts Giuffre has been released. It shows that Epstein paid
Giuffre half a million dollars to drop a lawsuit without any admission of liability or guilt. It was unsealed as part of Guthrie's separate lawsuit
against Britain's Prince Andrew. She's alleging Epstein trafficked her to the prince and others when she was a teen. Prince Andrew is denying the
claim.
United States FDA Food and Drug Administration has approved Pfizer for children aged 12 to 15. Under its emergency use authorization. The FDA also
reduced the time before being eligible for a booster from six to five months. That's for everyone. 12 and over.
A suspect is under arrest in connection with the fire. The South African Parliament in Cape Town that began on Sunday. It reignited earlier today
after firefighters worked for hours to put it out. Parliament wasn't in session. The PCM man is to appear in court on Tuesday on charges that will
include arson and theft.
Winter weather and the spread of Omicron causing a huge headache for travelers in the U.S. 1000s of flights have been canceled at New Year and
Monday is not getting any better. The flip side FlightAware says there'll be more than 4500 cancellations worldwide and most of them are in or out of
U.S. On Sunday nearly 4500 flights were disrupted. And on Saturday more than 4700 were cancelled.
[15:35:03]
The FAA is issued ground stops at two major Mid Atlantic airports because of snow and ice once been lifted. Our aviation correspondent is Pete
Muntean. He joins me from Reagan National Airport. Washington does not handle snow well. Washington and aviation and snow is a dreadful
combination.
PETE MUNTEAN, CNN AVIATION CORRESPONDENT: It is a bad gumbo, Richard. 80 percent of all flights here at Reagan National Airport have been canceled.
The most of any airport nationwide which is a lot when you consider not all that much snow fell here. Only about six to eight inches. Although it was a
pretty quick clipper system that just came through here. There were ground stop as you mentioned that were instituted by the FAA here at Reagan
National Airport and nearby BWI where about half of all flights have been canceled.
Just look at all the cancellations nationwide today, the 2900 in total here in the U.S., but 16 percent of Southwest Airlines schedule, 14 percent of
SkyWest schedule, that's a regional airline that operates flights for Delta American and United. 14 percent of JetBlue schedule, you know, airports
have been urgently trying to clear ramps and taxiways and runways. In fact, the main runway here at Reagan National Airport was closed up until not
long ago.
Bit of a double whammy airline experts say as airlines trying to warn people off from coming to the airport, telling them at least a little bit
early that their flights may be canceled. This is what experts are saying.
(BEGIN VIDEO CLIP)
DAVID SLOTNICK, SENIOR AVIATION BUSINESS REPORTER, THE POINTS GUY: It's a tough situation right now, when it's weather especially it's hard because
that could happen last minute. With the COVID cancellations at the very least, a lot of those are happening, usually about a day in advance,
sometimes sooner, but usually with enough time that you can try and figure things out, you know, before you're heading to the airport.
(END VIDEO CLIP)
MUNTEAN: So these are overlapping issues, Richard. Not only do we have the snowy weather, but also the issue with staffing shortages caused by the
Omicron variant. United Airlines tells me it's about a 50/50 split. About half of all cancellations today are because of crew shortages. The other
half are because of the weather. When you add it all up here in the U.S., 18,000 cancellations in total, going all the way back to Christmas Eve.
QUEST: Right. And I mean, it's worth pointing out because lots of people have been asking me when they cancel the airlines, it's not a haphazard
business. A, they use computers which tell them which ones to cancel, B, they strategically, if they can, don't get me wrong, if all things canceled
because of bad weather and nobody can fly. But they do proactively strategically choose, don't they?
MUNTEAN: Well, they do. And, you know, I've been to the big operation center like the one in Willis Tower that United Airlines runs. You think a
cancellation board here looks like a Christmas tree, just wait until you go into the operation center. They try and do this in a smart way. Because if
an airplane is out of position, if a crew is out of position that can leave things in a total mess. It's often a domino effect.
And so they want to get as many people as to where they want to go as possible with the minimal impact on the airline if there is a cancellation.
So it's a bit of a tough rub as you described, Richard
QUEST: Pete Muntean at national. Thank you. Raj Rajaratnam became the symbol of Wall Street corruption after his conviction for insider trading
and fraud. Former hedge fund manager served seven years in prison, now (INAUDIBLE) high-profile arrest and trial. He will be with me after the
break.
(COMMERCIAL BREAK)
[15:41:05]
QUEST: The jury in the criminal fraud trial of Elizabeth Holmes has so far been able to reach a unanimous verdict on three of the 11 counts against
here. A judge has instructed them to continue deliberating to try to reach a verdict. Holmes, of course, you'll remember is the founder and CEO of the
blood testing company Theranos. She raised $945 million from investors, claiming Theranos could provide a cheaper, more efficient alternative to
traditional blood tests. Didn't work of course.
The trial has been the subject of intense media coverage. A situation my next guest says he is all too familiar with. He is Raj Rajaratnam who will
face the high-profile investor fraud trial himself. Now, it's something we follow closely more than a decade ago.
(BEGIN VIDEOTAPE)
QUEST: Call it Judgment Day in a way at the sentencing of the former billionaire hedge fund manager convicted in what's called the largest
insider trading scheme in U.S. history. He's Raj Rajaratnam, and you've got 11 years in prison for raking in more than $60 million worth of ill-gotten
gains.
The amount of resources it took to get this Rajaratnam conviction, the wiretaps, even the question over what's insider trading, it doesn't give
much hope that this case will be much more than one on its own. To be sure there'll be a deterrent effect if Rajaratnam gets a heavy sentence. But
I've no doubt it won't be long before the men of money are back to business as usual. Go (INAUDIBLE)
(END VIDEO CLIP)
QUEST: Now the Srilankan-born gold billionaire was released in 2019 after serving more than seven years of his sentence. He's written a new book
called Uneven Justice about his experiences. And Raj joins me now. It's good to see you, sir. Thank you for taking the time.
RAJ RAJARATNAM, FOUNDER, GALLEON GROUP: UNEVEN JUSTICE: Thank you, Richard.
QUEST: We have much to talk about. Before we begin, do you -- just to clarify, do you still profess your innocence or do you accept your
conviction?
RAJARATNAM: Both. Let me clarify. I respect the verdict of the jury. But I don't agree with it. And let me explain quickly. Three years after my case,
in the same circuit, the southern circuit in the same stocks with the same cooperating witness and the same wiretaps. Another jury found the defendant
not guilty. And the reason was that the cooperating witness, the star cooperating witness recanted his testing many against me and said, I called
Raj to find out what he was thinking.
Whereas in my case, he said, I called Raj to give him information. And the singular reason for his change in testimony was because he was no longer
under the leash of the prosecution. He was sentenced to two years in parole, and now he was a free man. And therein lies uneven justice.
QUEST: If we look at that, when you take -- now bearing in mind that the jury is out in the Holmes case but the level of interest, the media
interest, and, you know, we're all part of this process, the media, you believe taints any possibility of a fair trial?
RAJARATNAM: Well, you know, in many countries, they don't have this media circus prior to the defendant being found guilty. By all means, once the
defendant finds guilty if you want to put the message out for deterrence sake, you can talk about it, but it's deeply prejudicial. When prior to the
trial, or even during the trial, you have the media that gets most of its information from the prosecutors office.
[15:45:01]
RAJARATNAM: And in my case the FBI agent, one of the FBI agents pleaded guilty to leaking stuff to the press in another inside a case called the
Walters case you might have heard of.
QUEST: you're also obviously critical of the prosecutor, the attorney, the U.S. attorney was preparar in those days. And what change would you like to
see? I know you're not bitter per se. But obviously your new campaign is to look at what change there should be, and what you change, you think there
should be?
RAJARATNAM: I think number one, we all -- when we go to trial, only three percent of the defendants actually go to trial. But when we go to trial, we
expect a quest for the truth, for justice, not win at all costs. Now, I'm not saying that all law enforcement is bad. Not at all. There's a small
segment of law enforcement, prosecutors and FBI that are very ambitious, and use high-profile cases as a stepping stone.
So what would I like change? Number one, play by the same rules. Number two, don't coach cooperating witnesses to get a win. Tell the cooperating
witnesses to tell the truth. And the way you can do that is sentence them before they testify. Not after they testify, using their testimony as a
carrot. Number three, don't try the case in the media.
QUEST: Right.
RAJARATNAM: And finally, don't lie to the jury or the courtroom, play by the same rules as the defense.
QUEST: The -- as we look to this year ahead. And I believe you are still active in markets now. I would be foolish if I did not take the opportunity
of getting your guidance on what we should be looking for this year. What do you like the look are, Raj?
RAJARATNAM: Well, we invest in disruptive companies. Companies that disrupt the way we live, whether it's in E-commerce, whether it's in cybersecurity,
or in medical technology. Now, if you want specific companies, I'm happy to give you some of the companies we own CrowdStrike is one. Nvidia is
another. We own a medical technology company called Shockwave. We like Airbnb.
And the list is long. But as you know, we have fundamental bottoms up driven investors. And I am not talking to a single person because there's
enough information.
(CROSSTALK)
RAJARATNAM: And I don't, you know, I've told all my analysts don't even talk to your dog about stocks after what happened to me.
QUEST: Raj, let's end on a note that says, as the year moves forward, the past we put behind us and hopefully we can talk to you, join the -- and
discuss things that are happening today. What's happening in economies and markets and cryptocurrency and whether or not it's the biggest hype that
we've ever seen?
RAJARATNAM: Is that a question? Are you saying we should do that in the future?
QUEST: It's both.
RAJARATNAM: Well, I think there's a -- there's a role for Blockchain, not just cryptocurrency. And with Blockchain technology, you can do things
faster and cheaper in terms of software for enterprise. That's where my interest is. Having said that, I have about one or two percent of assets in
cryptocurrency.
QUEST: Interesting. We'll talk more. Thank you, sir. I'm grateful you've come to us this afternoon. Thank you. It's QUEST MEANSA BUSINESS. Well,
those of you who joined us on New Year's Eve, will have seen this. We'll show you the story behind it. And the profitable moment as a result. After
the break.
(COMMERCIAL BREAK)
[15:51:43]
QUEST: Many of you know I don't like heights. Now I'm not saying I'm acrophobic. I just don't like heights. When I look down I got a funny
feeling and when they said to me climb to the top of the valley building that I am in. Good, oh, I know. 50 floors, 70 floors above from where I am
now. I didn't know what to say. Other than all right.
(BEGIN VIDEO CLIP)
QUEST: New York is back. And I've gone to the top, to the apex to do the climb. Off. Oh my goodness. Whose idea was this? Anisa (ph), how many feet
up?
UNIDENTIFIED FEMALE: We're 1189 feet.
QUEST: Eleven hundred and eighty-nine feet. Look at the world. Thing of the world. I'm terrified of heights. My husband is behind me. What are you
doing down there?
CHRIS PEPESTERNY, RICHARD QUEST'S HUSBAND: Oh, sorry. I'll catch up.
QUEST: It's just great. Chris.
PEPESTERNY: Yes.
QUEST: Come on.
PEPESTERNY: You said a night out on the tower. I didn't realize (INAUDIBLE)
QUEST: I told you. Literally a night out on the tower. I know that I'm tethered to the building in three or four places. And I know that I could
pretty much go. Oh, and nothing would happen. But I'm still scared. When they said to the climb, I thought, I don't like heights. I won't enjoy it.
But this is absolutely outstanding. The freedom the -- of opportunity, the just -- the wind. I'm starting to realize just how much revolving, how far
we've come. A magnificent it is just to be here tonight to enjoy it.
Oh. Oh, oh, oh, oh. Oh my goodness. No, I'm not doing the (INAUDIBLE) no.
UNIDENTIFIED FEMALE: There you go.
QUEST: (INAUDIBLE) no, no. It's too -- the wind is -- it's amazing, but it's terrifying.
UNIDENTIFIED FEMALE: There you go. Bend your knees. There you go, all the way down. Then you're going to stick your booty out. Stick your booty out.
Yes. Stick your butt out. Yes. Yes. And then straighteners like -- excellent. Yes, yes. You did it. You did it. Oh.
QUEST: I feel the winds going to blow me off my feet.
UNIDENTIFIED FEMALE: It's not going to blow you up your feet. It's not going to blow your --
QUEST: I don't want to keep saying king of the world.
UNIDENTIFIED FEMALE: Because you feel like king of the world up here.
QUEST: It's the buildings, it's the life. It's the jobs. It's the people. It's the loves. It's the climbs. It's the -- it's -- you look down and it
doesn't look real and yet I know because I've lived here for so many years.
[15:55:10]
QUEST: What's going on in everybody. It's just amazing. Just extraordinary. It's back to you, New York, New York (INAUDIBLE)
(END VIDEO CLIP)
QUEST: Terrifying. last few moments of -- actually I don't really -- going up there it all seemed like a good idea. And actually it was. It's called
the climb because 185 bucks, city climb, which costs 105 bucks. If you're coming to New York. It's here at 30 Hudson Yards. And it's part of the edge
experience. Let me show you the markets. While you're looking at the markets I'll tell you whether or not I think it's worthy. I think it is --
it's a lot of fun.
It's something different to be done here in New York. We have good gains on the market. I think we're off just -- off the tops of the markets for now.
But we are up over 200 points and the other major averages are to the indices. The NASDAQ is in the lead, Apple is now the first $3 trillion
company, Tesla has surged. It's at 12 percent on solid numbers. Not speculation. And the Dow 30.
Love you and leave you with the Dow 30 where Boeing is the best as Goldman and Intel are up more than three percent. Profitable moment from City Climb
after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment from the highest outdoor ascent in the world. I'm terrified. So as you know, I have a fear of heights. And this is
not housing matters. But facing our fears in 2022 is really what it's got to be about. We faced our fears last year with the Delta variant in the
spring. I'm done with Omicron as the year came to an end. And guess what? Look at the city. It's bustling. It's thriving.
You know what I've always said? It's OK not to be OK. But it doesn't mean we just give up and go home, far from it. And so, this profitable
environment basically says to you, whatever you're up to in the year ahead, I hope it's profitable.
END
