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Quest Means Business
U.S. Markets Poised To Enter A Bear Market; U.S. President Biden Begins His First Asia Trip At Chip Plant; Shanghai Sees New COVID Cases After Declaring Spread Over; Health Agencies Worldwide Investigate Monkeypox Cases; Elon Musk Meeting Brazilian Leaders About The Amazon; Airbnb CEO Says Remote Work Is Here To Stay. Aired 3-4p ET
Aired May 20, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:32]
ZAIN ASHER, CNN INTERNATIONAL HOST: All right, there is one hour left in the trading day. Let's take a look and see how the markets are doing, down
across the board Red arrows across your screen.
The S&P 500 is the one to watch though, as it is on track as I speak to finish in bear market territory.
Those the markets and these, my friends, are the main events.
U.S. recession fears mount as a key Fed official warns he is not sure they contain inflation without triggering a recession.
The U.S. President focuses on the supply chain crisis in the first stop of his trip to Asia.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Two, one and lift off.
Starliner is headed back --
(END VIDEO CLIP)
ASHER: Boeing launches its Starliner capsule to try to prove this time it can successfully dock with the International Space Station.
Coming to you live from New York, it is Friday, May 20th. I'm Zain Asher, in for my colleague Richard Quest, and this is QUEST MEANS BUSINESS.
Good evening.
Tonight, U.S. stocks are within a few points of closing in a bear market. The S&P 500 has been trading below 3,837 points, and that figure represents
a 20 percent drop from its recent high. If it closes below that threshold, we are officially in a bear market.
The S&P 500 is set for its seventh straight week of losses. All three major indices are in the red. The NASDAQ is already in a bear market. The Dow is
down 16 percent from its January highs.
Paul La Monica joins us live now.
Paul, no good news there at all. The Dow actually is also in its longest losing streak -- weekly losing streak in about a hundred years. You've got
so many different factors at play here. You've got inflation, you've got a hawkish Fed, you've got war happening in Ukraine, you've got supply chain
issues, you've got parts of China under strict, strict COVID lockdown measures. Walk us through it.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, there are a lot of things to be worried about, Zain, and you listed pretty much all of them and I think
what's most concerning to investors right now is that many of the things you pointed out, supply chain worries, Russia's invasion of Ukraine and
what that's done to oil, these are all inflationary. And you're hearing one company after another with their earnings this week, discussing some of the
problems that they are facing with higher costs and that consumers are feeling the pinch from inflation as well.
And that's why you've had big blue chip companies like retailers, Walmart and Target, not having good earnings at all. Tech companies like Cisco,
industrial giants like Deere this morning. It's just one company after another, who's who in Corporate America of major blue chips that are giving
investors very little reason to feel optimistic right now.
ASHER: Yes. Investors obviously clearly nervous about just how the Fed is going to fight inflation. The one sort of key tool they have is, of course,
monetary policy. They are going to, as Jerome Powell indicated earlier this week, they are going to keep raising interest rates until they manage to
stave off or fight or reduce rather inflation.
I mean, what does that do to recessionary fears, do you think?
LA MONICA: I think it will heighten those recessionary fears, Zain. You have a lot of people that are worried that the Fed recognizes it may have
been too late to try and combat inflation.
So now, to play catch up, they are increasing interest rates aggressively, and what that might mean is that the housing market, which has helped prop
up this economy over the past couple of years, might finally start to slow. You've had mortgage rates skyrocket this year, that could lower demand for
housing. We do know that the housing market has remained robust because there's such a short supply of homes available on the market.
But first time buyers in particular are being squeezed by prices going up and now mortgage rates claiming, too. If the housing market starts to
really cool off, it may not be a repeat of 2008, but it definitely adds to those fears of an economic downturn.
ASHER: All right, Paul La Monica live for us there. Thank you so much.
[15:05:07]
ASHER: The stock selloff is being driven by fears of a recession as Paul La Monica was just talking about there. The big concern is that the Federal
Reserve will choke off economic growth while trying to bring down inflation as Paul and I were just talking about as well.
It is a concern shared by one of the Fed's regional presidents, Neel Kashkari. He says, "We are doing everything we can to achieve a soft
landing, but I'll be honest with you, I don't know the odds of us pulling that off." Not exactly reassuring.
William Lee, chief economist at the Milken Institute joins us live now. So, William, your thoughts on Neel Kashkari's comments there?
WILLIAM LEE, CHIEF ECONOMIST, MILKEN INSTITUTE: I very much agree with Neel, the Fed has never been able to pull off reducing inflation from
current levels down to the target level of two percent without slowing the economy dramatically.
I think what is uncertain right now is how the Fed is going to do it, and I think the Fed has not been clear enough in telling everyone that actually,
for the first time in history, it has two policy tools.
One is the traditional interest rate tool, but the other one is the balance sheet, and if this Fed is able to surgically use the balance sheet to drain
liquidity from these very red hot sectors in the real estate market and consumer durables, car market, it can actually try to perhaps temper the
amount of rate increases that are needed to cool the rest of the economy.
The last thing the Fed wants to do is cut off investment because productivity enhancing investment is the key to controlling inflation in
that medium term, three to five-year horizon and that's exactly what we need more of.
ASHER: Okay, well, I'm going to give you three options, okay, and you're going to pick one, A, B, or C. Do you anticipate a deep recession, that's
option A? Option B, you know, somewhat of a mild recession? Or Option C, which would be neither just simply a much slower economy? What are your
thoughts on that? Which one would you pick and why?
LEE: I would pick Option C right now because right now, the best estimate for GDP, this quarter is about two percent. Last quarter was negative 1.4.
So we're not going to have the back-to-back two quarter recession, at least as far as the best forecast I know of coming from the Atlanta Fed.
Now going forward, if the Fed insists on just using interest rates and using the balance sheet as a passive tool, then we may have a much greater
slowdown going forward, that is what the market is uncertain about, that's why the market is crashing as it is. The Fed isn't given enough guidance as
to what its policy response will actually be.
ASHER: Price increases just in terms of inflation have proved much larger and much more persistent and longer lasting than the Fed had anticipated.
Why was the Fed caught off guard here, do you think William?
LEE: Not only the Fed, but I think most economists are caught off guard by under estimating how long will it take for the supply chain. The China
policy of zero tolerance has really worsened things much more so than anyone would have anticipated. Add to that the war between Ukraine and
Russia, cutting off not just the energy markets, but also commodity markets. Those are the pieces that came together into a perfect storm,
pushing inflation up and sustaining it for a much longer period of time.
And quite frankly, without any clear resolution, despite the President Biden's attempt to try to rally the Pacific.
ASHER: And what did it -- I mean, we've got a slew of retail earnings this week. A lot of which were not exactly great, not exactly stellar, but what
does the state of retail earnings in this country tell us about the U.S. consumer right now?
LEE: That's a great question. Everyone I've talked to in the past last couple of weeks has said, don't worry about the U.S. economy because
consumer is so strong. Well, in fact, the consumer is really not that strong. The savings rate now is at the lowest level since 2013.
So the strong consumer balance sheet that was helped by all these checks from the government -- stimulus checks because of COVID had been used up.
So right now, the consumer is going from hand-to-mouth job, paycheck to paycheck. And despite Chair Powell's claim that the strongest labor market
ever because we have two job openings for every person that's unemployed, hiring has not kept pace. In fact, hiring has been at a rock steady level,
because companies are just not able to find the right kind of workers, despite the huge number of people who are quitting their jobs.
We have a lot of churn in the labor market, but it's not that strong a labor market.
ASHER: Just in terms of -- I mean, from a much more global perspective. Obviously, we spent the first few minutes here just talking about the
United States, but the lockdowns in China, this sort of zero tolerance COVID policies in China, how is that affecting global demand?
LEE: Oh, it absolutely worsens everything. It worsens everything on the supply side because we can't get the goods that are needed not just in the
United States, but in the rest of the world.
Also within China, it hurts China's own economy because people are worried about their livelihoods. New college graduates are not able to find jobs,
people who are in jobs are being laid off.
So China's goal of reaching five and a half percent growth is but a hope and a prayer right. In fact, most economists I know are starting to
forecast growth this year and into next year with a two percent growth and for the first time in China's history, perhaps it'll be growing slower than
the United States.
[15:10:15]
ASHER: I mean, where do you see investors right now flocking to for safety? I mean, you've got havoc in the stock market, the bond market,
crypto currencies are going through hell right now.
You know, obviously, cash is never a good idea, but especially not when there is inflationary issues as well. So where do you anticipate investors
going now flocking to the safety?
LEE: Well, there's the panic money, and that's just selling because they say, "Oh, my God, I can't stand to lose any more." And that's what's
generally considered the foolish money.
From what I can tell, the smart money is taking advantage of the huge discounts it is getting on these very good companies, strong companies in
the United States and around the world that are selling at rock bottom fire sale prices.
So the tech companies the Tesla's of the world, the companies that are clearly producing products that will be in demand over the next three to
five year horizon are the ones that people are going to be going toward, and as soon as they feel confident about a bottom being reached, I think
there is going to be a rush into these companies.
ASHER: Yes, it is hard though to know when exactly the bottom is going to be hit, whether or not to jump in right now or to wait it out a few more
months.
William Lee, if only we had a crystal ball, right?
William Lee, we have to leave it there.
LEE: The smart money always lathers.
ASHER: Oh, okay. Thank you so much. Thank you. I'll keep that in mind. Okay.
U.S. President Joe Biden is starting his first official visit to Asia in South Korea with a visit to the world's largest semiconductor plant. Mr.
Biden met with South Korea's newly inaugurated President, Yoon Seok-youl at the Samsung owned factory.
The two leaders toured the plant. Biden later emphasizing his interest in the region's role as a chip supplier.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: The COVID-19 pandemic exposed the fragility of just in time supply chains. A global semiconductor
shortage has caused the shortfall on consumer goods, especially automobiles, and it is contributing to higher prices around the world.
And now, Putin's brutal and unprovoked war in Ukraine has further spotlighted the need to secure our critical supply chains so that our
economy -- our economic and our national security are not dependent on countries that don't share our values.
So much -- so much of the future of the world is going to be written here in the Indo Pacific over the next several decades.
(END VIDEO CLIP)
ASHER: CNN's Jeremy Diamond joins us live now from Seoul. This is a big priority for the U.S. President. I mean, when you think about the
semiconductor shortage, it has affected everything from cars to many, many other consumer durable goods in this country.
JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Yes, no doubt about it and that is why this trip by President Biden to Asia is not just focusing on
those key national security issues like this threat of North Korea potentially testing an intercontinental ballistic missile, potentially
testing a nuclear weapon while President Biden is here in the region, but also focusing on economic security and increased economic cooperation
between the U.S. and its allies.
We know that that visit to that semiconductor facility here in South Korea followed an investment by Samsung into the U.S. to create U.S. jobs, a U.S.
manufacturing plant that was announced a year ago. And so this is a follow up to that and signals this deepening cooperation between the U.S. and
South Korea on an issue that not only represents a critical economic advantage for these two countries, but also a security advantage because of
how key these semiconductor chips are to the global economy.
President Biden's is also expected to announce a new economic framework while he is in Japan for the region. We've seen, of course, over the last
several presidencies, this attempt by the United States to make its full pivot to Asia, a region that the U.S. sees as critical to determining the
future of the 21st Century, and President Biden trying to show that even as his attention has been divided and focused really much more so on Europe,
on Russia's invasion of Ukraine over the last several months. He is trying to show these allies that they matter to the United States.
And of course, that he plans to continue to invest time, attention, energy and money as well into this region over the coming years.
ASHER: But just in terms of the chip shortage around the world, U.S. officials have indicated they don't see the levels increasing
significantly, at least to the levels where it needs to be, not until early 2023. Is there going to be a political price for Democrats, for the
President, especially when it comes to the midterms in November just given sort of supply chain issues that have plagued this country?
[15:15:01]
DIAMOND: I think it's hard to say. I mean, listen, obviously, this is one of the big issues as you just highlighted. But I think right now, in terms
of the domestic politics in the United States, Americans are more concerned about inflation as a whole. Of course, some of that inflation some of those
price increases, like cars, for example, is driven by that semiconductor shortage.
But I think Americans, as they head into the midterms are looking more broadly at the picture of rising prices, overall; rising gas prices, so
certainly it could contribute to President Biden and Democrats taking a hit in the midterms, but I don't know that it's one issue that Americans are
focused on as a whole.
ASHER: Right. There's a whole host of problems, a whole host of issues to deal with. Jeremy Diamond, we'll have to leave it there. Thank you so much.
All right, China has slashed a key interest rate as the nationwide COVID lockdowns ravage its housing market. New home sales last month were down
about 47 percent compared to April last year.
In response, China's Central Bank has lowered the benchmark rate for mortgages by 15 basis points. That's the largest cut on records.
By China's latest count, another 1,100 people there have come down with COVID. Meantime, at least 180 million people across the country are right
now under some kind of lockdown.
Selina Wang reports that China's largest city, Shanghai, is still struggling to reopen.
(BEGIN VIDEOTAPE)
SELINA WANG, CNN CORRESPONDENT: Shanghai residents are still facing harsh COVID-19 restrictions even after city officials said they would slowly
start to open up after nearly a two-month long lockdown.
Earlier today, Shanghai reported three COVID-19 cases outside of quarantine areas. This comes just days after the government had proclaimed that
Shanghai had achieved zero COVID spread in the community. That means no COVID cases being found outside of quarantine areas. Well, this ends that.
The government had said it would slowly start reopening and return to normalcy in mid-June, but residents in Shanghai are extremely skeptical of
that plan. While some shops have started to open and some residents are allowed to walk in a restricted area around their apartment, many are still
strictly locked inside their homes.
This lockdown in Shanghai has been extremely painful for the local economy and businesses. Shanghai officials say that more than 5,600 companies have
been allowed to restart operations, but that is only 0.2 percent of all of Shanghai's companies.
The ones that are allowed to restart include large corporations in manufacturing, pharmaceuticals, big U.S. companies like General Mills and
Walmart. It's hard for smaller medium sized businesses since they have to abide by strict COVID rules, including requiring many employees to live,
sleep, and work within company grounds.
Across China, there are still dozens of cities under some sort of lockdown. Here in Beijing restrictions continue to ramp up even though officials have
not called it a citywide lockdown. There are now two more districts that are under partial lockdown. This means more than three million residents
are banned from leaving their district.
And in this video, this is in a village near Tianjin, you can see an entire village waiting in line with their luggage, waiting to get on a bus. The
announcement in the video says that this entire village is being sent to centralized government quarantine.
We've reached out to the local government for more details on this, have yet to hear back, but clearly Zero COVID in China is still disrupting
millions of people's lives.
Selina Wang, CNN, Beijing.
(END VIDEOTAPE)
ASHER: More Ukrainian civilians are feared dead after a Russian missile struck the northern village of Desna.
President Zelenskyy calls the latest attacks a deliberate attempt to kill as many Ukrainians as possible we'll have more next.
(COMMERCIAL BREAK)
[15:21:26]
ASHER: President Volodymyr Zelenskyy describes the situation in Ukraine's Donbas as hell, and that is no exaggeration. This, after 12 people were
killed by heavy bombing in the city of Severodonetsk on Thursday.
The Donbas comprises of the Luhansk and Donetsk areas and is now the focus of the Russian offensive.
Russia's strikes are not limited to the south and the east, Ukraine fears that many are dead after missiles hit the village of Desna in the.
Meantime in Mariupol, a Commander still inside the Azovstal steel plant says that Ukraine's military has ordered the last holdouts to stop
defending the city.
CNN's Melissa Bell joins us live now. So, let's just start with President Zelenskyy's comments saying that the Donbas region is pretty much hell on
earth. And that is, in his words, no exaggeration, especially after Russia has stepped up its attacks there. What more can you tell us about that --
Melissa.
MELISSA BELL, CNN CORRESPONDENT: Well, the very latest are some pictures that are coming to us from the town of Lozova, that is one of those areas
that's been struck by heavy shelling, many wounded including an 11-year-old child. That's what we've been hearing from Ukrainian forces, the Ukrainian
side rather, but essentially what you're talking about is a frontline on which Russian forces have been concentrating.
Over the course of the last few days, their manpower, their firepower, trying to come down from the north, from the Russian border through
Kharkiv, the parts of it that have not fallen to the Ukrainian counteroffensive, but also northwards from their positions in Donetsk and
westwards from their positions in Luhansk, and one particular stretch of river you mentioned, Severodonetsk, there a moment to go where there are
still tonight as we believe some 15,000 civilians hunkering down in their cellars and facing some dreadful shelling. So there is -- and where those
12 civilians were killed only on Thursday.
So a particular focus for that firepower with all the casualties that you can imagine, and essentially, what's been happening is along that line,
from the Ukrainian point of view, and also from some of the imagery, satellite imagery that we've been able to see over the course of the last
few weeks, it seems as the Russians forces are really trying to push northwards to take as much territory as they can, meeting stiff resistance
from the Ukrainian side.
And of course, this goes back to Mariupol, you mentioned a moment ago, and we'll speak of it in a moment, the fall of that steel plant. When you look
at the strategic importance of Mariupol and the stretch of country now that Russian forces now control and north of which they're trying to push, you
get an idea of what strategically they may be trying to achieve.
And bear in mind here, Zain, that we know from the Ukrainian side, that the negotiations overall not about the Azovstal steel plants overall about
whether this war can be brought to an end, those negotiations that had been going on between Russia and Ukraine have been suspended, because the
Ukrainian side is simply opposed to the idea of any partition.
ASHER: Yes, in fact, those talks have been suspended. It certainly doesn't give you hope.
Melissa Bell live for us there. We have to leave it, thank you so much.
In just a few hours, Russia will stop sending natural gas to Finland. It will become the third European country cut off from Russian energy
supplies. It is a complicated situation for Finland, but officials say they have been preparing for this for a while.
Nada Bashir has more.
(BEGIN VIDEOTAPE)
NADA BASHIR, CNN PRODUCER: Well as tensions mount over Finland's bid to join NATO, the country's state owned gas company, Gasum said Friday that
Russia's Gazprom is halting flows of natural gas to Finland as of Saturday morning.
The move comes after the Finnish gas firm said it would not pay for Russian gas in rubles or use Gazprom's proposed payment scheme for gas.
[15:25:07]
BASHIR: In a statement on Tuesday, the company said negotiations over a long term gas contract with Gazprom were in dispute, and that it would be
taking Gazprom to arbitration to try and resolve the matter.
Gasum CEO, Mika Wiljanen has described the decision as highly regrettable, but has said that the company has been carefully preparing for exactly this
sort of situation.
Over the summer season, the firm says it will supply natural gas to its customers from other sources, with Finland also receiving gas via Estonia.
Gasum says it is hopeful it will be able to spy all its customers over the coming months. Although the firm's Vice President has conceded that the
winter season will be challenging.
Russia has already been blasted by NATO members and allies for imposing sanctions on foreign energy companies in retaliation to Western penalties
over its invasion of Ukraine, with Germany's Vice Chancellor accusing Russia of using energy as a weapon.
The European Union has since proposed a total ban on Russian oil with member states committing to phasing out their dependency on Moscow.
Nada Bashir, CNN, London.
(END VIDEOTAPE)
ASHER: A bear market is rearing its ugly head on the S&P 500. The downward trend in U.S. markets and the economic fears that are driving out
investors, that's next.
(COMMERCIAL BREAK)
ASHER: Hello, everyone.
I'm Zain Asher. There is more QUEST MEANS BUSINESS in a moment when Boeing makes a third attempt to reach the International Space Station. We will
give you the latest on the Starliner's test flight.
Also Airbnb chief executive, Brian Chesky he tells CNN that remote work is here to stay and his company sees a big opportunity.
Before that, though the headlines at this hour.
The first war crimes trial of the Ukraine conflict resumes on Monday in Kyiv. A 21-year-old Russian soldier has pleaded guilty to killing an
unarmed Ukrainian civilian four days into the war.
In Court, Friday he said he is sorry and sincerely repents his actions and his lawyer said the court should blame Russia's leadership instead.
[15:30:16]
U.S. health officials are investigating a confirmed case of monkey pox in the U.S. state of Massachusetts. And the suspected case in New York City.
They say it's likely overtake two more cases in the coming days. Dozens of infections have been confirmed in several European countries. The disease
is endemic in Western and Central Africa.
Billionaire Elon Musk is meeting with Brazilian President Jair Bolsonaro and business leader today to discuss satellite monitoring and bringing
internet service to schools in remote parts of the Amazon. Mr. Bolsonaro says he hopes Musk will show the world how Brazil protects its rainforests,
even though destruction of the Amazon has actually surged since he took office in 2019.
Investors fears coming through as the S&P 500 flirts with bear market territory The NASDAQ fell into a bear market in March. Defined as being
down more than 20 percent from recent highs. The Dow is on pace for its longest weekly losing streak in nearly a century. It's been underwater for
most of the day. A small rally, as you can see there, the beginning where it's in green ever so slightly was quickly erased.
From that 52-week closing highs the NASDAQ is down 31 percent, the Dow is getting close to bad, 16 percent down. And the S&P 500 is of course down
roughly 20 percent. Matt Egan is live for us in New York. If we could put on -- pull the S&P 500 on the screen so we can see now but earlier it was
down 20 percent. Let's take a look and see how its faring now, but it's been basically flirting that with as you know, bear market territory.
So what does this mean in terms of the U.S. economy going into recession? What are your thoughts on that?
MATT EGAN, CNN BUSINESS RPEORTRER: Yes, Zain, 38, 37 is the number to watch for the S&P 500. So you can see it's hovering just above that level after
earlier today dipping into bear market territory for the first time since this bull market began in March of 2020. And at a minimum -- as far as
recession goes, it means that investors are worried about a recession. It means that the big concern is that, you know, maybe the Federal Reserve is
going to overdo this that they were late to inflation and now they're trying to catch up by raising interest rates and maybe they're going to
make a mistake and they're going to tip the economy into recession.
I think that's the big -- the big fear here. But even if the S&P 500 closes in a bear market, and even if the Dow notches this eight-week losing streak
the longest since 1923. You know, it doesn't necessarily mean that a recession is a foregone conclusion. I mean, bear markets often coincide
with recessions, but not always. I mean, there are false alarms along the way. And I think what's really interesting here is that there's a lot of
positives about the U.S. economy.
I mean, inflation is obviously a big negative. But the jobs market is really, really strong. unemployment rate is nearly back to pre-crisis
levels, employment, payrolls are nearly back to pre-COVID levels. People are shopping, corporate balance sheets are strong. So, there are a lot of
positives. It's just this inflation issue, and the fear about what the Fed is going to have to do to get inflation under control. And so, that has
clearly freaked out investors here, Zain.
ASHER: Yes. A lot of people are saying that we might not necessarily see a recession at all, some people believe it's going to be a mild recession, as
you are -- you came on the show earlier this week talking about what CEOs think. Other people just say, listen, it's probably just going to be a
slowing economy, not necessarily a recession at all. So when you think about the S&P 500 flirting a bear market territory, though, is it solely
the Fed shift in policy that is to blame here? What are your thoughts?
EGAN: Well, I think that the fact that the Fed has totally shifted its stance is a big factor here. I mean, if the economy were merely slowing
down and inflation were high, but the Fed had very low interest rates, the Fed was maybe poised to lower interest rates, well then, yes, maybe the
market wouldn't be anywhere near a bear market. But for the first time, really, in many years the Fed does not have investors backs here, right?
Because the Fed has to keep raising interest rates to try to knock inflation down. And so, that means the Fed is not coming to the rescue. And
that is a very different situation than we've seen during previous market scares, when people could just sort of assume that there was a Fed put
there supporting markets and all of that again has changed because of inflation. And as far as, you know, a recession goes, I think it's worth
pointing out that most economists do not think that a recession is imminent.
[15:35:09]
They are concerned about a recession in 2023, maybe 2024. But, you know, the idea of an imminent recession is not really something that economists,
even the most bearish economists are concerned about. So are they wrong? Does the market see something that they don't? Maybe. Or is the market sort
of jumping the gun and anticipating recession that may be a year to two years off, that could be the case as well. I guess we'll find out, Zain.
ASHER: Yes. And the last thing I want to do is talk ourselves into recession as well. I think you and I were speaking about that a few days
ago. Matt Egan live for us, thank you so much.
EGAN: Thank you, Zain.
ASHER: Companies aren't dealing with an upheaval beyond the market. The Airbnb CEO Brian Chesky argues that remote work is here to stay and
companies can get on board or fall behind. He sat down recently with our anchor Richard Quest.
(BEGIN VIDEOTAPE)
BRIAN CHESKY, CHIEF EXECUTIVE OFFICER, AIRBNB: For millions of people, they work from a laptop, and menu -- the bosses of companies they work for say
you don't have to go back to office five days a week. If you don't think back to office five days a week, you have more flexibility of where you can
go. And people are more flexible. They can travel, they can go more places, they can go longer.
And this is going to create essentially, like a revolution in how we're all going to move around the world.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: You see, I -- slightly are more skeptical.
CHESKY: Yes.
QUEST: I believe that over time, we will revert back to where we were, the business travel will come back to -- there will be a diminishing, no
question. But this idea that we'll all be living and working in different places, I don't see it.
CHESKY: Well, business travel is never coming back the way it was, it will be back. But it'll be different. We're not going back to 2019 anymore,
we're going back to 1950. The world's going to roll forward. If Zoom is here to stay, then flexibility is here to stay. If companies aren't making
people go back to Office five days a week, then the world has already changed.
QUEST: What's your policy?
CHESKY: Our policy is you can live and work anywhere around the world. Specifically, you can work from 170 different countries. And we will take
on administrative burden, if you want to go and work for those countries up to 90 days at a time. You can move wherever you want within the country you
work, we're not going to lower your pay. And we'll bring everyone together about a week, a quarter.
QUEST: But you all happy with some of your staff not coming anywhere near your office, except for a week a year.
CHESKY: They haven't come to our office in two years. And we had the most productive two years in our history. So, of course I am. And I think it's
going to allow more diversity. It's going to allow a greater pool of talent to join Airbnb, and will still bring people together for really meaningful
moments.
QUEST: So let's talk about the changes you're making to -- the upgrade to the app, to put it in its crudest terms.
CHESKY: Yes.
QUEST: What's the cornerstone of it?
CHESKY: The cornerstone of it is Airbnb categories. Basically, for 25 years, the way you search for travel is the same. There's a big box, the
search box and it ask you a question, where are you going? So it requires you to have an idea of where you want to travel. And this is great for
business travel. But most travel today is vacation travel. And so, what people do is they type something in and most people type in the same
places.
Paris, Las Vegas, Miami, Rome, they go to the same places. Well, Airbnb is in 100,000 towns and cities. So (INAUDIBLE) show you things you could never
even think to type into a box. That's exactly Airbnb categories are. It organizes homes by what makes them unique. You'd like golfing? You can see
homes near golf courses. Do you like wine? You can see homes in a vineyard. You like design? Yu can stay in a Frank Lloyd Wright home.
QUEST: You see this is fascinating. Because, you know, obviously I've stated Airbnbs.
CHESKY: Yes.
QUEST: But I also get overwhelmed. I'm going somewhere. And I think of (INAUDIBLE) 35 minutes later I've seen so (INAUDIBLE) made lists of
favoritism. And in the end, I just go and have a cup of tea and abandon the whole.
CHESKY: Well, I think -- I actually think that this might make searching easier because it allows you instead of looking through six million
listings by imagining 100,000 different towns and cities to type in, you can just pick the thing you're interested in. Within the area you're
interested in. If you like skiing, go skiing category. And you can just -- we make the tools really simple.
QUEST: Finally, where are you living?
CHESKY: Right now? I'm living here in New York. But I started my journey with Sophie Supernova, my golden retriever who's nine months old. We
started our journey in January in Atlanta, we went to Nashville and Charleston and Miami and Chicago and Boston and Colorado. I went to Ann
Arbor, Michigan. I stayed in the Frank Lloyd Wright home. We were in Vancouver, we're here.
And I acknowledged not everyone can do this. I'm single, I can afford to do this. But it's been an amazing time because I don't have to be back in
office. I can see the world and, you know, it's pretty fun to bring a dog with you.
(END VIDEOTAPE)
ASHER: Boeing Starliner is headed to the International Space Station. The ships launched -- the ships launched and when it docks, next.
(COMMERCIAL BREAK)
[15:42:55]
ASHER: And then condors are among the world's largest birds soaring up to 100 miles at a stretch without even flapping their wings. Despite that epic
grandeur, they're under threat. Today on Call to Earth a Rolex Awards Laureate who has developed a way to breed the giant birds, giving them a
chance at survival.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE (voice over): High on a hilltop in the Andes, a moment of transcendence is about to take place.
UNIDENTIFIED MALE (through translator): When the condor takes flight all of us feel like we'd rise with him.
UNIDENTIFIED MALE: This Andean condor has been bred in captivity and never flown before. Now, it's doing it with an audience to celebrate its release
into the wild.
NORBERTO LUIS JACOME, PRESIDENT, ARGENTINE BIOANDEAN FOUNDATION (through translator): The connection with an iconic species for thousands of years
has inspired man to look up at the sky and connect with the sacred.
UNIDENTIFIED MALE: It's the life's work of Argentinian biologist Norberto Luis Jacome.
JACOME: Our mission is to conserve the Andean condor and through the condor to reconnect people with nature.
UNIDENTIFIED MALE: Endemic to South America, numbers of these soaring birds are plummeting across the continent. Sometimes mistaken for predators, they
face threats from human activities like hunting and poisoning from toxic baits.
JACOME: Many condors come down to eat dead animals to fulfill their role of scavenger. They ingest lead bullets and lead kills them.
UNIDENTIFIED MALE: With a wingspan of up to feet these giant birds are slow to reproduce. So Jacome and his team developed a captive breeding program
at the Buenos Aires Eco Park. They take one egg from a breeding pair which prompts the condors to produce a second egg shortly after, ensuring all the
eggs aren't in one basket.
[15:45:06]
JACOME: So the second egg is raised by the couple. We can get two chicks for each couple per year, when in reality, condors would have one offspring
every three years.
UNIDENTIFIED MALE: After two months of careful monitoring, a tiny miracle. If needed, the chicks receive a helping hand to break free.
Caring for newborn chicks while ensuring they don't become attached to humans requires thinking outside the box.
JACOME: All the contact that the fledgling has here will be through latex puppets that represent its parents. At that moment, you are the father. You
are the mother. You are responsible for that life.
UNIDENTIFIED MALE: Jacome says the program has raised 78 chicks and rescued and released hundreds of condors throughout South America. But an increase
in poisoning has killed 150 condors in just the past two years.
JACOME: It means that a whole effort, a lifetime of 30 years is not enough if we do not change that relationship we have with the environment.
UNIDENTIFIED MALE: Here, Jacome and his team celebrates the release of the condors with the Mapuches and Tehuelches communities, who have long had
reverence for this bird. As part of a traditional ceremony, the event is transformed from the scientific to the spirituals.
JACOME: It opens hearts. It opens people's minds. And people quickly in a practical way understand why we should take care of Mother Nature.
(END VIDEOTAPE)
ASHER: And let us know what you're doing to answer the call with the #calltoearth.
(COMMERCIAL BREAK)
ASHER: In North Korea, more than three quarters of a million people are receiving medical treatment for what officials call fever cases. State
media there say the total number of reported fever cases now exceeds 2.2 million. CNN's Will Ripley tells us what's believed to be the super
spreading source of this outbreak and what it could mean for leader Kim Jong-un.
(BEGIN VIDEOTAPE)
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT (voice over): The mood was triump, the crowd massive. Most people not wearing masks. At last month's
military parade in Pyongyang, North Korean leader Kim Jong-un promised to protect his people from hostile forces like the U.S. Protection from the
virus that would soon ravaged his unvaccinated population non-existing.
Weeks later, a devastating fever believed to be undiagnosed COVID-19, infecting and killing some of Pyongyang's most privileged citizens.
CHAD O'CARROLL, MANAGING DIRETOR, N.K. NEWS: So the military parade was a super spreader event. And we know that they flew in citizens from across
North Korea.
RIPLEY: Some of those citizens from the Chinese border region. a place I visited five years ago. North Koreans are living a literal stone's throw
away from the raging Omicron outbreak in China. Beijing pledged to help Pyongyang battle the outbreak, the hermit kingdom's hermetically sealed
border, apparently breached by the highly contagious variant. Two years of pandemic isolation, two years of sacrifice gone in one parade.
O'CARROLL: That's the perfect petri dish for this virus to spread. So, I think that parade will go down in history as a very bad idea for North
Korea.
RIPLEY: A colossal miscalculation and experts say the likely cause of North Korea's explosive outbreak and unprecedented nationwide lockdown,
skyrocketing infections and deaths. A dilapidated healthcare system on the verge of collapse, lacking even the most basic medicines and medical
equipment, millions of malnourished North Koreans at higher risk of severe infection.
LINA YOON, SENIOR KOREA RESEARCHER, HUMAN RIGHTS WATCH: I think it's going to test his leadership certainly, and it's going to create some urgency for
very creative storytelling in the North Korean propaganda apparatus.
RIPLEY: North Korean propaganda, crucial to keeping the Kim family in power, even during times of crisis, like the deadly famine of the late
1990s when citizens literally a tree bark to survive. The Kim's rule over a police state that relies on heavy surveillance, restricted movement and
brutal political prison camps.
UNIDENTIFIED FEMALE: They strengthened social controls because they had the fear that, you know, if there is an outbreak there -- if there is a crisis
that was what happened in the 1990s. That, you know, the police, the secret police, the military, they all went hungry.
RIPLEY: Now you're getting sick. State media says around two million fever cases in one week. A crisis of Kim's own creation, potentially devastating
hardship for the North Korean people.
Will Ripley, CNN, Taipei.
(END VIDEOTAPE)
ASHER: That time could be the charm for Boeing Starliner.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Three, two and lift off. And liftoff. Starliner is headed back to space on the shoulders of Atlas powered by a workforce
dedicated to its success.
(END VIDEO CLIP)
ASHER: The spaceship is having its most successful flight yet after two previous failures. Boeing failures rather. Boeing's competitors are putting
pressure on the Starliner program, SpaceX flown five national NASA mission since 2020. The unmanned Starliner is scheduled to dock at the
International Space Station in about three hours from now.
Miles O'Brien is in us live now from Florida. So, miles he's the thing. The Starliner has been beset by problems. How significant of a milestone is
this though for Boeing?
MILES O'BRIEN, CNN AEROSPACE ANALYST: Well, this will be a big deal if they're able to dock. So far, it looks like there's not going to be a
problem saying they did have a couple of thrusters fail soon after they arrived in orbit. These are thrusters that are designed to move this
spacecraft in and out of orbit, sort of the big, heavy lift thrusters. The thrusters that they'll use as they home in on the International Space
Station, which will happen in a little more than three hours and is in the process right now are much smaller and there's no reports that they are
having any problem whatsoever.
So, everything so far appears to be running smoothly for Starliner. It's been 2-1/2 years since they had hoped to be doing this. So, it's a program
that went through a lot of troubles with software and then some valves which were problematic. And now hopefully these thrusters which have given
them trouble will just be an asterisk.
ASHER: So what will this mean for the future of space exploration if both Boeing and SpaceX are able to ferry astronauts?
O'BRIEN: Well, it's always good to have more than one way to get to space and SpaceX has proven itself to be a very reliable system to deliver cargo
and human beings to the International Space Station. As you mentioned they now have a total of seven crewed flights all then, all of them very
successful.
[15:55:09]
Elon Musk and SpaceX have succeeded well. Boeing is a little behind the curve on this.
And it was -- it supposed to be in the game a little sooner. But this is -- this is a long game after all. And Starliner ultimately is part of a big
plan to go much farther into space to the moon and beyond.
ASHER: Yes. Boeing behind the curve on this, as you mentioned. Why has the Starliner program being such a difficult one for Boeing to actually get up
and running?
O'BRIEN: Well, space is hard. And this is a different way of doing business for Boeing. Boeing historically, has been a traditional contractor in the
sort of Pentagon sense or the old school NASA sense, cost plus contracts. The Commercial Crew project, what sets it apart from previous NASA
endeavors in human spaceflight is the fact that the companies which build the spacecraft, own them, own the intellectual property.
And lease out a ride to NASA so to speak. And so, it's a little different way of doing business. And maybe it was a little hard for Boeing to adjust
to this.
ASHER: Yes, it's interesting, because earlier this week, the Ryanair CEO actually accused Boeing management of running around like headless
chickens. But why has the company been in such a tough spot overall?
O'BRIEN: It's tough -- it's a tough question to answer because wherever you look, you see trouble. Whether it's the Boeing 737 Max, the 787 Production
Line, the Starliner situation, you know, this is a company that was built and designed and run by engineers for a very long time. It has -- its
leadership over time has moved away from the engineering heart and soul of the operation into the legal and being counting side, if you will.
Maybe it's difficult to maintain that strict adherence to the engineering details on these programs as the company gets bigger and farther away from
the engineering drawing board. One thing about Elon Musk, whatever you may say about him is he is intimately involved in every step of the way, as are
his engineers. It is very vertically integrated. And so far, so good on that front, so maybe that is the way to go to space.
ASHER: Maybe. All right. Miles O'Brien live was there. Thank you so much. There are just moments left to trade on Wall Street. We'll have the final
numbers and the closing bell right after this.
(COMMERCIAL BREAK)
END
