Return to Transcripts main page

Quest Means Business

Russia's Gazprom Says It Will Slow Gas Deliveries To Europe; Ukraine Pledges To Resume Grain Exports After Odessa Strike; Russian Foreign Minister Appeals For Support In Africa; Fast-Moving Fire Threatens 3,200+ Structures In California; Iraq Tries To Protect Palms Amid Changing Climate; Tesla Subpoenaed Over Musk's Tweets For Second Time; Musk Denies WSJ Report Of Affair With Google Co-Founder's Wife. Aired 3-4p ET

Aired July 25, 2022 - 15:00:00   ET

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

[15:00:33]

ELENI GIOKOS, CNN INTERNATIONAL HOST: A muted session on Wall Street as investors brace for Wednesday's Fed decision. Small falls for all the major

indices, as you can see the Dow Jones down 46 points at this point.

Those other markets and these are the main events.

Russia keeps Europe guessing on gas supplies announcing plans to halve the flow through Nord Stream 1.

The US says it's working out a Plan B for Ukrainian grain exports in case the new deal with Russia falls through.

And the Elon show continues. Will anything dent investors' confidence in Mr. Musk?

Live from Dubai. It is Monday, the 25th of July. I'm Eleni Giokos in for Richard Quest, and this is QUEST MEANS BUSINESS.

Welcome to the show and a very good night to all of you.

Russia is reminding Europe who controls its gas by planning deeper cuts on a key pipeline to Germany. Now, Gazprom says that it will reduce flows on

Nord Stream 1 even further this week. It now says, a second turbine needs to be shut down.

The pipeline was already operating at reduced capacity. The work is taking place as Europe tries to refill its natural gas reserves. The German

Ministry of Economy, meanwhile, says it is unaware of any technical problems with Nord Stream 1. The Kremlin says flows will recover once a new

turbine is installed.

Now the pipeline just reopened last week, after 10 days of maintenance. EU officials warned them that it might not get turned back on and that was of

course, the big fear.

We've got Anna Stewart standing by for us in London. Anna, good to see you, right, maintenance or exerting power over Europe's reliance on Russian gas.

Those are the sort of the two questions here.

Looking at what the Russians are saying, looking at what the Germans are saying.

ANNA STEWART, CNN REPORTER: So Russia is saying once again, this is really a technical issue, another turbine used in this pipeline, a giant pipeline

and the turbines, of course help pump gas through it. Another one needs to go out for repair and that is why they are slashing gas supplies by an

additional half from where they are now. They are currently at 40 percent of capacity, they're going to reduce that to just 20 percent, so a fifth.

Now I say another turbine because this is actually Chapter Two of what I will call turbine tiff. Turbine one was already sent off for repair to

Siemens Europe, ended up in Canada, that's where their facilities were there, and then they got stuck as a result of sanctions. And that is why

last month, Russia said they were reducing capacity down now to 40 percent, reducing it by 60 percent, and that caused a huge shock for energy markets.

Now, if you speak to Germany about that turbine, they say that's not a rational reason, because that turbine wasn't even due back to go into the

system for some weeks or months to come. And today Germany is saying there is no technical reason.

As ever, the EU has said many times before that Russia weaponizes the use of energy, which is exactly why they're trying to wean themselves off of

it. They also point to a warning from President Putin earlier this month. He did say you would have catastrophic consequences for world energy

markets as a result of any further sanctions and I can show you what gas prices have done today.

They were up some 12 percent, and you can actually see a huge spike sort of mid-afternoon when that Gazprom statement came in -- Eleni.

GIOKOS: Yes, Anna, look, the big question here is as winter is just around the corner, it is all about gas storage. Are Germany and other countries in

Europe going to be able to fill up those reserves in time for winter?

STEWART: That is the really big concern right now because of course, it is summer, so people are using less energy, they generally do, and this is the

time when you fill up your gas storage facilities.

Right now as a bloc, it is looking quite good. They are two-thirds full roughly, that's the same for Germany and that is more than it would have

been last year or the year before; however, they need more gas and there is actually a mandate from the EU to fill those facilities to 80 percent full

by the first November.

[15:05:09]

Germany has gone further, they want to see 95 percent, but with already the reduced gas we were seeing even before today, and that kicks in on

Wednesday, even before then, I mean, people were doubting whether or not they would even reach the EU mandate. So that is looking really tricky at

the moment.

If it is all technical, if turbine tiffs can be sorted out, perhaps we can see more gas being supplied. But yes, it is absolutely keeping Europe on a

very short leash, and people are getting nervous.

And I think at this stage, lots of people, lots of analysts, I speak to a pointing to the fact that really Europe needs to reduce its consumption of

energy now if it doesn't want to see emergency rationing come winter -- Eleni.

GIOKOS: Yes, and Russia reminding everyone who yields the power when it comes to gas supplying to Europe.

Anna Stewart, always good to see you. Thank you so much.

Ukraine is pledging it will continue to export grains despite a Russian missile strike against the port city of Odessa. Now, the strike happened

just a day after Russia and Ukraine agreed to a grain export deal.

The agreement is designed to allow the safe export of foods to fight rising global hunger. Wheat prices jumped after the strike. They had fallen after

news of the deal.

Nic Robertson is in Kyiv for us. Nic, always good to see you.

Look, it was encouraging to see a deal signed of this nature, but then followed by the strike and many are questioning just how committed Russia

is to opening these vital corridors. But also, importantly, the risks that still lie ahead as these deals are signed.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, the risks are there, and I think one of the things that surprised everyone, not least

Turkey who was sort of one of the guarantors of this U.S.-brokered deal was that the day of the strikes on Saturday, Turkey's Defense Minister, called

his opposite number in Russia, Sergei Shoigu, who had been in Istanbul the day before signing the deal, and basically said, did you do it? And the

answer that came back from Moscow was, no, we didn't do it. Absolutely nothing to do with us.

Strangely, by Sunday, another day later, Russian officials were saying, actually, we did fire missiles, and we were firing them at military

targets. And I think further to that today, Monday, again, in a concerning tone being set by Russia, we've heard the Foreign Minister saying that

actually there is nothing in this agreement that says Russia can't target military installations in the port of Odessa.

There is no ceasefire agreement in this -- no ceasefire part in this U.S.- brokered deal, but it is flying in the face of expectation, certainly in the international community, Russia being condemned for firing the

missiles.

President Zelenskyy today has said no, Ukraine absolutely committed, it knows that there are people around the world, millions of people that are

depending on this food. Ukraine continues committed to try to get this grain out.

(BEGIN VIDEOTAPE)

ROBERTSON (voice over): Despite Russia's missile strikes in Odessa Saturday, Ukraine's officials are vowing to push ahead with the UN deal to

get grain from their ports to the world's needy.

OLEKSANDR KUBRAKOV, UKRAINIAN INFRASTRUCTURE MINISTER: I hope that during upcoming days, we will start delivering grain from our seaports in Odessa.

ROBERTSON (voice over): But Russian missiles aren't the only obstacle creating uncertainty about Russia's commitment. Russia's Foreign Minister

asserting nothing in the deal prevents them hitting military targets in Odessa, and misinformation, too, claiming rights for Russian ships not in

the agreement.

SERGEY LAVROV, RUSSIAN FOREIGN MINISTER: In the open sea, Russia, Turkey, together with another participant wishes to be determined to accompany the

convoys to the Straits.

KUBRAKOV: So we won't allow to do this, our territorial waters and our sea ports only Ukraine and Ukrainian Navy will be there.

ROBERTSON (on camera): So no Russian ships escorting the convoys anywhere along the convoy.

KUBRAKOV: No. No ships at all in this process.

ROBERTSON (voice over): Ukraine's Plan B to export grain by train, truck, and river is still in play. But like the UN deal, this too is beset by

uncertainty. Train cars full of grain have been shelled by Russia and tracks blown up.

KUBRAKOV: We are again doing our best, we are trying to export more through our many ports with the help of our railway, Ukrainian Railways

Company and by trucks.

ROBERTSON (voice over): If the UN deal to export grain from the ports can hold. Ukrainian officials estimate the value to their beleaguered nation

could be a much needed billion dollars a month.

(END VIDEOTAPE)

[15:10:08]

ROBERTSON (on camera): There is a benefit here as well for Ukrainian farmers who are really, you know, suffering because they can't sell their

grain there. Their stockpiles in their silos have been full. They kind of have nowhere to put the grain that's being harvested from this year.

We heard from Ukraine's Agrarian Minister earlier today, saying within the next couple of days, Ukraine's farmers should be able to sell to the

shippers and he said that the price of corn in the country already was going up 20 to 30 percent, and he thought by the end of the week, that the

price of grain for farmers in Ukraine should have gone up by about 10 percent.

Now, that's big news for Ukraine's farmers, because they need the money as much as you know, the starving parts of the world need this food security,

need the grain getting out to them so that they can eat it. The farmers here also need to support their families and their communities.

GIOKOS: All right, Nic Robertson, thank you so very much for that update.

Now, Russian Foreign Minister Sergey Lavrov is fighting back against claims that Russia is exporting hunger. He is traveling to several African

countries to try to gain support after the agreement in grain exports.

Speaking earlier in the Republic of Congo, he said the Russian strikes in Odessa do not threaten the deal.

(BEGIN VIDEO CLIP)

LAVROV (through translator): If we talk about the episode that took place in Odessa, there is nothing in the obligations that Russia has taken on,

including within the framework of the agreement signed on July 22nd in Istanbul, which would prohibit us from continuing the special military

operation, destroying military infrastructure and other military targets.

(END VIDEO CLIP)

GIOKOS: Well, Washington is also trying to gain influence in Africa. USAID administrator, Samantha Power was in Kenya and Somalia to discuss food

insecurity.

Larry Madowo asked her how she is working to fight hunger in the region, and who needs to do more. Take a listen.

LARRY MADOWO, CNN CORRESPONDENT: Eleni, even if it was not planned like that, this is what ended up happening. Two senior officials, one from

Russia, one from the US, in Africa, almost overlapping and that the US announced $1.3 billion extra humanitarian and development assistance to

help countries like Kenya, Somalia, and Ethiopia deal with a record drought here.

But Sergey Lavrov is getting a red carpet welcome, and he is here to tell Africa, we are your partners, and that's why Samantha Power called out

China for not doing enough to support the global food crisis and contribute to alleviating the suffering of people here.

(BEGIN VIDEO CLIP)

SAMANTHA POWER, ADMINISTRATOR, US AGENCY FOR INTERNATIONAL DEVELOPMENT: This is a moment for all countries that play leadership roles in the

international system, as the People's Republic of China clearly aspires to do and has done in certain domains, it is for them, for all of us to show

up and to dig deeper than we have so far if we are going to prevent this crisis from becoming a catastrophe.

MADOWO: How big is the impact of Russia's invasion of Ukraine into the current problem you're seeing in Kenya and Somalia and Ethiopia?

POWER: In terms of food just coming from Somalia, more than half of the wheat in this country -- in the country of Somalia -- comes from Ukraine.

It is trapped in the port of Odessa. Twenty million metric tons of wheat and corn are trapped.

So, you know, we can all hope and even pray that the deal that the United Nations negotiated but that Russia immediately turned its back on by

bombing the port of Odessa, that that deal somehow sticks.

MADOWO: Do you worry about Russia's commitment to that deal, if literally just hours after it was signed, they are already bombing Odessa? And what

impact would that have, if they don't honor their end of the deal?

POWER: Well, we have been living the contingency plan because there is no way you can trust anything that Vladimir Putin says. We are working with

the Ukrainians on Plan B. Plan B involves road and rail and river and again, you know, sending in barges and, you know, adjusting the rail

systems so that they are better aligned with those in Europe, so that their exports can move out more quickly.

But there is no substitute for Putin allowing the blockade to end -- his blockade to end -- and the grains being sent out the most efficient way

possible, especially because we've lost so much time.

(END VIDEO CLIP)

MADOWO: Eleni, after Samantha Power's trip here in Kenya and Somalia, she is off to India, trying to find an alternative to finding wheat and grain

for some of the people who are worst affected by the drought and the Russian invasion of Ukraine, but still a real dire situation here.

She is asking countries like China to do more to make sure that people here don't die because they have nothing to eat -- Eleni.

GIOKOS: All right. That was Larry Madowo for us in Kenya.

Now up next, a Fed rate hike, US GDP, and a slew of corporate earnings. Why this could be a make or break week for Wall Street?

Stay with us.

(COMMERCIAL BREAK)

[15:17:45]

GIOKOS: All right, the Dow has been up and down to begin a big week for earnings and economic data. S&P 500 and NASDAQ are both lower. Dow Jones as

you can see down, 57 points.

The Federal Reserve is expected to hike interest rates by three quarters of a percent, Thursday. Second quarter GDP is due Thursday as well. So, that's

going to be market moving. A contraction in the second in a row, we know what that means. That means trouble for US President Biden and his Treasury

Secretary Janet Yellen is optimistic about the number. She says the economy may be slowing, but is not in recession.

Markets are down right now. We're also expecting that Fed rate hike later this week. Rahel Solomon is with me now to give me all the details.

Rahel, it is not a question of if we're going to see a rate hike, it is just what the percentage that we're expecting. Could you tell me what

you're hearing on the street?

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: I think that's completely fair, right? I mean, heading into this meeting, the expectation was about half a

percent to three quarters of a percent, and I think that is still very much what we will likely see on Wednesday, much more leaning toward three-

quarters of a percent rate hike, which we did see at the last meeting, Eleni.

But to put that in context, historically, we haven't really seen a rate hike of that magnitude since 1994. So, it really gives you a sense of just

how aggressive the Fed needs to be.

But Eleni even taking a step back from that one data point. It is a massive week of economic data and earnings. So this week, Wall Street, Washington,

all sort of watching what happens. So, let's start with tomorrow. We get Consumer Confidence, essentially, how are Americans -- how is the American

public feeling not just right now in terms of their personal financial situation, but also in the months to come on things like their own personal

finances, in terms of the jobs market, and how that might impact their spending decisions. So that's very important.

That's been trending lower in recent months, so lots of attention on that tomorrow, and then as you pointed out, Eleni, on Wednesday, we're going to

hear from Chairman Powell, as we expect a rate hike certainly of half a percent to three-quarters of a percent. Thursday is probably the biggie

this week. That's when we get our first look into second quarter GDP.

[15:20:09]

As you rightly pointed out, if we see another negative print, it is going to reignite the debate that we are already in a recession, because that is

sort of the rule of thumb of recessions; although, the White House has certainly been pushing back that that is not the official definition of a

recession. That would come from the National Bureau of Economic Research. That's a group of about nine private economists. It's a nonprofit group,

and that group defines a recession as a significant decline in economic activity that is broad based across the economy in terms of business

spending, consumer spending the job market, and there are some -- there is a quite a bit of debate about whether we're actually seeing that.

That said, if we see another number, another negative number on Thursday, it is certainly going to reignite the conversation that we are already in a

recession.

And then Friday, we're going to get a key inflation report, the Personal Consumption Expenditures. This is actually the Federal Reserve's preferred

inflation gauge. It's a bit more broad than the Consumer Price Index, which gets a lot more attention, but this is actually the Fed's preferred

inflation gauge and we're going to get that on Friday.

So Eleni, it is going to be a very, very busy week.

GIOKOS: If ever there was a balancing act, I think this would be the week, right?

We're also expecting quite a few earnings specifically from the tech companies. What are we expecting on that front? We've got to, you know,

keep in mind that these earnings are backdated. We have to look at the forward-looking statements, and those are always peppered with really

interesting information.

SOLOMON: Now, we're going to hear from a lot of the tech heavyweights, a lot of major S&P 500 companies in general, but certainly the tech

heavyweights from Apple and when it comes to Apple, we're going to be wondering, are people still buying iPhones? That's going to be really

important.

We're going to hear from Alphabet, owner of Google -- Google's parent company, Alphabet, in terms of the ad business. We're going to hear from

Facebook and Meta and the ad business. So that's going to be really important because Eleni, we've started to get certainly last week, we've

started to get indications that ad spending is slowing. Right?

We heard it from Snapchat. We heard it from Twitter. And so these are sort of the heavyweights in the advertising industry, right? Meta, Google -- how

is advertising spending? And what does that say about business spending, right?

Are companies starting to pull back on their marketing budget, on their advertising budgets because of these concerns of a recession? So it's a

very big week.

Again, you have Wall Street, you have Washington, all sort of watching what happens in the days to come. It will be busy, to say the least, very active

to say the least -- Eleni.

GIOKOS: Yes, and you and I will be having a lot of these conversations this week. I look forward to those. Thank you, Rahel Solomon. Always good

to see you.

Now, one of Germany's top economic surveys warns the nation is on the cusp of a recession. Business confidence fell by more than expected in June to

its lowest level in two years. This, as high energy prices and gas shortages loom over Europe's largest economy.

Joining me now is Karen Karniol-Tambour, she is the co-Chief Investment Officer for Sustainability at Bridgewater Associates.

Really good to see you, Karen. Thanks so much for joining us.

I want to start off with what we're seeing out of Germany with business confidence, the IFO Index came out. It is looking really, you know, low in

comparison to what we saw over the past two to three years.

What does this tell you when you see Germany coming under so much pressure with risks still very much on the horizon?

KAREN KARNIOL-TAMBOUR, CO-CHIEF INVESTMENT OFFICER FOR SUSTAINABILITY, BRIDGEWATER ASSOCIATES: Well, thank you, it's great to be here.

I think conditions facing Germany and Europe as a whole are the toughest they've been in decades, and I think the business survey reflects what

makes sense, which is that growth has slowed to, you know, right around very close to zero and a recession is very likely.

I mean, there's been a shift to stagflationary conditions, meaning growth is bad, and inflation is high at the same time, everywhere, maybe outside

of China or so.

But in Germany, it has been maybe the worst because they are not having energy very directly means you literally can't power the type of economic

growth you need.

The energy is literally being pulled back and they just don't have the energy they need and they have a lot of industry that is reliant on

literally using energy that's not there anymore in order to power its economic growth.

GIOKOS: Look, you mentioned stagflation, and I'm looking at all the economic data we are getting out of the US this week. The GDP number is

going to be absolutely vital. We're getting inflation, we're looking at consumer confidence. And of course, we mentioned that in our earlier

conversation with our correspondent that it is not a matter of whether they're going to cut, it's just by hike rates rather than, but just how

much they're going to hike.

And it puts the Federal Reserve in a really precarious and sticky position because they have to focus on price stability as opposed to growth.

KARNIOL-TAMBOUR: I think it's the toughest set of circumstances the Fed has been in since you know the 70s or so just for the reason you're saying

that they really can't achieve their dual mandate at the same time. They're going to have to choose between getting inflation under control and having

growth be a lot weaker than they're hoping or having growth be strong and not having inflation under control.

[15:25:24]

And that's a very tough spot to be in. Chances are, they are not going to be able to sort of keep one decision, and you'll see them kind of go back

and forth, which is why you're going to look back and say this appeared of stagflation.

Growth is too low, inflation is too high. It has kind of gone back and forth. And one of the important things to remember on a week like this, is

that the Fed hasn't literally hiked rates, but that is already expected by the markets.

And so if you look at the way market pricing has been, it has priced in the biggest change we've seen in decades from no tightening expected to a lot

of tightening expected.

So the impact on the economy starts getting rolling, that ball gets rolling before the Fed actually raises rates, right, that gets priced in and gets

expected. The further out rates, like mortgage rates start rising.

And so the makings of a recession, the makings of a slow in our economy, because of that tightening are already kind of in the system and making

their way to hurt household wealth, to hurt household confidence, to make it harder to borrow.

And so the Federal Reserve is very quickly going to be seeing growth falling a lot more than they'd hoped, and yet not seeing inflation coming

down as much as they'd hoped and being in that tough spot and having to choose what to do next.

GIOKOS: Yes. Exactly. Yes, it is a painful process, right, once inflation starts to bite.

You know, there was a time, you know, a couple of years ago, when the Fed was saying, look, we have to start pulling back on the stimulus. We have to

stop with the easing.

Do you believe that, you know, we should have seen more of a proactive approach in order to be in a better situation than we are right now? Do you

think they have to be more aggressive and hike rates more aggressively, because inflation is dangerous? It is dangerous to have out of control

inflation, especially with the global risks on gas and food prices.

KARNIOL-TAMBOUR: I think the Fed absolutely waited too long and believed for too long inflation was transitory, but the thing I will say is that a

lot of the reason we got here is not just Fed policies, it was the mix of Fed policies and fiscal policy.

So what proved so effective was inflation going at such a high rate, as we're experiencing now, is the fact that not only was the Fed so easy and

printed money, but at the same time, the Federal government put so much stimulation to respond to COVID. I mean, they literally sent every person a

check.

And so that combination of money printing and literally getting money into people's hands so it can be spent, you're not relying that you hope they'll

go borrow, you're not relying the quantitative easing will somehow trickle down.

Literally people's checkbooks changed, their bank accounts, they had more cash at hand than they've had for a long time. We saw how some balance

sheets getting better. We saw it happening throughout the whole economy, not just the wealthy because everyone got a check.

And so that mix of policies, it wasn't just the Fed. It was the Fed and tremendous fiscal stimulation. And yes, the Fed was too slow in responding

to what was then a massive boom coming out of COVID and pulling back and part of the supply shock that's now happening is, you know, a confounding

factor that is happening for them at the worst possible time.

And so we could have had a war, you know, at any time in theory, but it happened at a time where inflation was already getting going, and when

energy and food markets were already very tight, and so it only took a small disruption to create a very serious supply shock on top of what was

already a booming demand. It was a situation where people had more money to spend than the economy could possibly supply.

GIOKOS: Karen Karniol-Tambour, thank you so much. Good to see you.

Alright, moving on: Firefighters have gained some control over a raging fire in the US State of California, what the blaze has destroyed and why

it's so hard to contain, when we come back.

(COMMERCIAL BREAK)

[15:32:15]

GIOKOS: Welcome back. Now California firefighters say ablaze near Yosemite National Park is only 10 percent contained. The Oak fire has burned more

than 16,000 acres in just three days. Authority say a long-term drought, climate change and dead trees left my bark beetles are all fueling the

rapid spread. The fire comes as a heatwave sweeps across the U.S. with parts of California seeing temperatures nearing 40 degrees Celsius.

Now 16 million people are under heat alert across the country. Camila Bernal is in Mariposa County, California. The images are heartbreaking just

seeing the devastation. Tell me what you're seeing right now.

CAMILA BERNAL, CNN CORRESPONDENT: Yes. They truly are devastating. And a lot of it is because the fire is so fast moving. So it doesn't give people

a lot of time to leave. But it is fast moving because of what you said. Climate change and the drought here in the state of California. The

evidence of that drought, you can see it pretty much everywhere you are in this area. Here you see a part where it is extremely dry.

And then you see exactly where those flames came into this lot here, this property. The fire is now at 10 percent containment in comparison to the

last couple of days where it was zero percent. So there's a bit of good news there. But we're seeing it continued to grow every single day. On

Saturday, it was about 14,000 acres. On Sunday, about 15,000 acres and now we're getting close to 17,000 acres.

So you're seeing it grow day after day. That's why a lot of people were told to evacuate. And unfortunately there are some people that are going to

come back to this. It really is complete disruption. I mean, you see the burned cars. There are still a lot of hotspots here. It is smoky, it is

hard to breathe. And this is exactly why authorities are telling people, if you are in one of these evacuation areas, you have to pack up and leave.

Unfortunately, there's a lot of people who say, I don't want to leave, I don't want to leave my belongings or my animals behind and so they're

refusing to leave. But the reality is that there is still a lot of work to be done here. This fire is only 10 percent contained and look, they added a

lot of resources. On Saturday they had 400 people working on this fire. Today they have more than 2500. So they feel like they are going to make

some progress.

But the danger is not yet over. And as you mentioned, the heat and the temperatures. The afternoon hours, those are the hardest hours for

firefighters. Because the temperatures increase, the humidity decreases and the winds start picking up. So, ideally they want to see those or

temperatures.

Those come later on at night early morning hours, but of course we're waiting to see what happens over the next couple of days because as of now

that fire continues to grow. Back to you.

GIOKOS: Yes. And I can see smoke, you know, behind you and that's and -- that's the reality. It could reignite. You know, when we say 10 percent

contained, there's so many risks abound. Camila, thank you so much good to see you.

Environmental changes are threatening production of one of the world's most popular fruits, the date is a Middle Eastern staple. But a CNN's Jomana

Karadsheh reports climate change is making it harder for Iraqi farmers to grow the fruit.

(BEGIN VIDEOTAPE)

JOMANA KARADSHEH, CNN INTERNATIONAL CORRESPONDENT (voice over): At the entrance of Iraq and Hajarah desert, thousands extend across the horizon.

Young date palms recently planted in hopes of saving an age old staple that is now under threat.

MOHAMED ABDUL-MAALI, COMMERCIAL DIRECTOR, FADAKA DATE PLANTATION (through translator): The date palm is a symbol and pride of Iraq. That's what we

wanted to replant palm trees to restore this culture to where it used to be a country of more than 30 million palm trees.

KARADSHEH: Iraq's long been one of the top date producers in the world with millions of date palm tree groves across the country. But swaths of once

thriving plants have since withered away dehydrated and blighted by environmental changes.

MUSSA MOHSEN, OWNS AROUND 800 DATE PALM TREES (through translator): Before we had an abundance of water, rainwater too coming from the mountains. This

area was like a sea but due to the lack of rain the land started drying up gradually.

KARADSHEH: Decades of drought in addition to ongoing conflicts are slowly creating desert like conditions in once lush areas. And as water levels

decline, salt levels rise, posing new challenges for those hoping to keep the industry alive.

ALAA AL-BADRAN, AGRICULTURAL ENGINEER (through translator): The issue of water salinization began around the mid 90s which created another issue for

us other than the issue of cutting. Now if people want to plant new palm trees, they will face saltier water and soil.

KARADSHEH: The U.N. stated in a press release that it is supporting Iraq and mitigating and adapting to climate change. The country's environmental

situation has been subject to a number of converging pressures ranging from poor water quality, deforestation, soil salinity to air pollution, conflict

and land use change.

Amid efforts to reverse some of those collective impacts on a key agricultural sector, some of those who depend on its success fear the

worst.

ALI HUSSEIN, DATE FARMER (through translator): What is in my heart is a dread, never seen the palms again. We are waiting for the pumps to come

back. But over here, everything is there. There is no water, nothing. I don't know that it will come back. I worry the beautiful days won't ever

come back.

KARADSHEH: Whether the date palm industry can be revitalized before it's too late remains to be seen as Iraq tries to save a national icon from our

global climate crisis.

Jomana Karadsheh, CNN Istanbul

(END VIDEOTAPE)

GIOKOS: Now it has been a messy start to the week for Elon Musk. Tesla revealed this morning that it's been subpoenaed over his tweets. Again, the

U.S. regulator is separately looking into Musk's tweets over his $44 billion bid for Twitter. The billionaire is also being accused of bad

behavior offline. Musk has been forced to deny a Wall Street Journal reports that he had an affair with the wife of Google cofounder, Sergey

Brin.

Paul La Monica joins me now. Paul, hello, welcome. Always good to speak to you. You know, sometimes I go check out Elon Musk's Twitter feed just to

see what he's up to because there's always so much drama. And I guess the question that everyone has is just how he's been getting away with what

he's been saying, you know, how is his board responding or is it just behavior that everyone around him is accepting?

PAUL LA MONICA, CNN DIGITAL CORRESPONDENT: Yes, I think a lady that at this point, you know, Tesla's board members and the board members of all the

other companies that he runs are probably used to this behavior which to many of us will admittedly seem a bit odd and rash and shocking. But bottom

line, Elon Musk owns about a 16 percent stake in Tesla. So, it would take a lot for investors to find reason to say you know what, you've got to stop

this, Elon. We really need you to be on best behavior.

You know, he controls a big chunk of course of the company's stock. He is the CEO.

[15:40:01]

So, I think that at the end of the day, you know, unless Tesla stock tumbles dramatically and obviously it's fallen this year about 25 percent

but the whole market has taken a tumble. I don't think Musk is going to feel that he needs to change his behavior for the benefit of anyone else.

That's my take on it at least.

GIOKOS: Yes. I mean, if you -- we're having this conversation, so many people, I'm sure the board is as well. And I guess the question, if it

doesn't have a material impact on the reputation of the company, of the running of the company, or even on the stock price, then I guess they're in

a difficult spot. But he's a really interesting character that is making headlines. That is, you know, shaking things up at Twitter, for example,

you know, offering that he wants to buy it and then pulling back. And it's been fascinating to watch this entire thing play out.

LA MONICA: Yes, I mean, if you're a Twitter shareholder, obviously, you don't find much of what Musk has been doing with some of his tweets and

memes. And what have you to be all that amusing is Twitter was hoping to be bought at $54.20 a share. Musk says he doesn't want to do the deal anymore.

And Twitter stock has obviously now dramatically below that $54.24 per share price.

But when it comes to Tesla, he has really built this company into a leader in the electric vehicle market. And I think at the end of the day, there

are people who probably disapprove of Elon Musk's behavior and his public persona but I'm guessing, Eleni, that they're not the ones that own Tesla's

stock, they're just choosing to vote with their absence, if you will. The, longtime supporters and there are many really vocal big fans of Elon Musk,

they don't seem to mind his behavior because, again, he has built a market leading company.

And until there is something that shows that Tesla is going to have a dramatic fall from grace. And, you know, maybe it's going to be competition

from G.M. and Ford and other global automakers that finally humble Elon Musk, I don't know. But until that happens, Musk doesn't have much

incentive to change his public behavior and, you know.

GIOKOS: Yes. And perhaps getting away with a lot more than most. Paul La Monica, always good to see you. Thank you so much. And that's QUEST MEANS

BUSINESS. I will be back at the top of the hour as we make a dash for the closing bell. Up next. Quest's World of Wonder. Stay with CNN.

(COMMERCIAL BREAK)

[16:00:21]

GIOKOS: I'm Eleni Giokos and the closing bell is ringing on Wall Street right now.

END