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Quest Means Business
Strong Corporate Earnings Spark A Wall Street Rally; China Pressures Taiwan With Drills, Trade Restrictions; First Ukrainian Grain Shipment Passes Inspection In Turkey; OPEC+ Agrees To Minor Increase In September Oil Output; Parent Take Radio Host To Court Over School Shooting Misinfo; Cryptocurrencies Face Regulatory Scrutiny In U.S. & E.U. Aired 3-4p ET
Aired August 03, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN BUSINESS ANCHOR: Tech stocks leading a healthy day of gains with an hour to go on Wall Street and it is a sea of green this whole
time, the triple stack shows -- the NASDAQ for the rest of the day, two- and-a-half percent plus, so there are good gains across the board and it is on the back of earnings, with earner CVS, PayPal for example.
The markets and the events of the day, which slightly suggest other directions.
China is retaliating after Nancy Pelosi's visit to Taiwan with trade restrictions and live fire drills, but the markets, at least the US markets
don't seem that concerned.
A return to the meme stock, a Hong Kong company says it has no idea why its shares are up 21,000 percent.
And OPEC under pressure from the West, agrees to pump more oil, but barely 100,000 barrels. We will explain.
Live in New York, it is Wednesday, it's August the 3rd. I'm Richard Quest and I mean business.
Even though the fears of recession are still well and truly there, Wall Street is basking in strong earnings and robust economic data. The Dow as
you can see is up a good 444 odd points, the NASDAQ is two-and-a-half percent and it was a jump in US factory orders that is raising investor
Tech shares are strong. Corporate earnings are fueling the gains. You'll see Amazon and Apple, look at those very, very good strong gains with
PayPal up nearly 10 percent.
Rahel is with me.
Rahel, now look, we have two competing -- well, first of all, you tell me why the market was up so strongly today and then we could talk about the
competing underlying trends.
Why is it up so strongly?
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Well, Richard, I think you laid it out perfectly, right? We've got strong earnings for companies like
PayPal and Moderna. So, that's part of the reason why we're seeing that nice bump there, but we've also got some fresh economic data that showed
that for the service industry and for the service sector in July, business orders really picked up and a surprise to the upside.
So in an environment like this, Richard, where bad news isn't hard to find, good news leads to results like what we're seeing today.
QUEST: Right. But we had in the last 24 hours, various Fed Governors, essentially saying, "No, we're not over yet." I mean, we may have front
loaded with three quarter percent, but rates are going higher. It's just going to take longer than we thought.
SOLOMON: Oh, for sure. But this is the issue we have seen for months now. Right? There are two camps out there, Richard, as you know, there is the
camp of investors in the investment community that believes the Fed must be aggressive right now, and so, they believe and they like to see an
aggressive Fed, right, in terms of what that means for inflation.
There is the other camp in the investment community that feels, wait, wait, don't do too much. You might provoke a recession, you might trigger a
recession. So that has been the case and continues to be the case, even with these Fed Governors speaking and remaining hawkish.
QUEST: Okay, so how far is this rally? I was going to say predicated, but fueled simply by the fact we now know where we're going. We know rates
are going up, we know that they're not going to go -- we know the economy is fundamentally solid, so even if we end up with a garden variety
recession, we're not going to fall out of bed absent an exogenous event.
SOLOMON: Well, yes, I mean and to that end, there is a bit of clarity, right, which for many months, we didn't really have, right? We know that
the Fed is likely moving to three-and-a-half to four percent with rates. We know that inflation is starting to show some signs of peaking.
So there is a bit of clarity there, but I would argue that these rebounds, these recoveries are only as good as the economic data we get that day.
Every day brings a sort of new event.
Tomorrow, by the way, we're going to get some really important data for weekly jobless claims in the US, how many American workers are applying for
unemployment? We'll see how the market reacts to that.
And then Friday, of course, we get the Jobs Report, which is a huge report, not just for us, but people watch that around the world.
So any given day, we get new data and the market seems to react to that. So it's good news for sure, but how long this lasts? Well, that's anyone's
QUEST: Excellent. Good to have you. Rahel, thank you.
We're going to stay with shares, this time in Hong Kong. It's a Hong Kong based Fintech and it skyrocketed. The company says it's no idea why.
AMTD is the name of the company. Its digital shares soared 21,000 percent since it went public last month. Its market cap this week surpassed that of
Shell and Costco. It made $25 million revenue last year, and a statement of the company says they aren't aware of any circumstances or change in
business that would spur such a spike.
Now, the stock is off its top. It is well above its IPO price of $7.80 a share.
Clare is in London.
So is this a pump and dump? Is this a case of the meme, the online owners have decided to push this up and it's going to come down like a lead
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: You know, Richard, there is just no other explanation at this point. Clearly, it has nothing to do with
the company itself.
As you say, it made $25 million, that is in revenue, not even profit. Last year, it's only just gone public. The IPO price was $7.80.
So look, even the company is saying it has got nothing to do with any fundamentals. So we are seeing a lot of mentions on Reddit, the
WallStreetBets group that fueled the GameStop-AMC spikes that we saw in 2021.
But the extraordinary thing about this, there are several: One is that the spike that we're seeing here is big. It went from $7.80 as an IPO price, it
peaked at around $1,700.00. I think that was yesterday on Tuesday. So extraordinary given that with GameStop and AMC, the spikes were actually,
you know, a fair bit smaller than that.
The second thing is, if you look at the market context of this, this is a different time. Back in early 2021, it was still sort of pandemic era,
people were trading on their stimulus checks, locked at home. Now, we're seeing a really risk off sentiment in the market overall, the Dow down some
13 percent this year. The NASDAQ tech stocks down about 20 percent this year.
And even we're seeing signs that retail traders are sort of pulling back with the news today on Robinhood that they're losing users, they're having
to cut staff, all of that.
So it was surprising in that context to see this, but I think it just shows that even amidst all of that, people are still willing to take risks and
sort of pile into these, you know, social media fueled meme stocks.
QUEST: Right, but I can't help feeling there will be tears before bedtime.
SEBASTIAN: And I think, it's highly likely, Richard. I think this is a sort of buyer beware situation and you have to understand, if you're going to go
into these stocks that you could lose everything, that it could come crashing back down.
We are seeing it come off today and it even spread to the parent company, AMTD Idea Group also based out of Hong Kong, which is I think the fourth
most traded share on the Fidelity platform at the moment, that has also been coming off its highs today.
So you do have to be careful when you're going into this, but certainly there is still appetite out there.
QUEST: Clare Sebastian with that stock and in sight of the stock, you were, all I guess -- when you bought it, and how much fear and pain you're
prepared to follow. Clare, thank you.
We will watch the markets over the course of the rest of the day. Indeed a very strong day on the market.
What's interesting about today is the way what is happening in Taiwan has not affected the US market, and Taiwan is paying the price for Speaker
Nancy Pelosi's visit. The economic and military backlash from China, we'll be looking at that after the break.
QUEST MEANS BUSINESS.
QUEST: Taiwan says it is under an effective Chinese blockade following to House Speaker's visit, Nancy Pelosi. As she left, Chinese warships are
holding military drills in the Taiwan Strait and they are using live ammunition.
Now, the Defense Ministry says 27 Chinese planes entered its air defense zone, 22 of them have crossed the median line that divides the Strait and
China suspended fruit and seafood imports from Taiwan, and blocked certain exports to the island.
Selina Wang is in Beijing.
How do we gauge the seriousness of these actions? Is it real economic or geopolitical damage? Or is it China just saber rattling?
SELINA WANG, CNN CORRESPONDENT: Well, Richard, I think we have to look at it from two different perspectives. On one hand, Xi Jinping cannot look
weak at this moment. He is leading up to his Party Congress just a few months away when he is going to be re-anointed for that unprecedented third
term and he needs to play to the domestic audience here as well, to show that, look, China is very seriously taking what they see as a national
humiliation, and they are defending their sovereignty.
But on the other hand, to your point, a part of this is also trying to show that force, show that anger, but also maintain stability, because it's not
in China's self-interest right now to cause an escalation, especially given all of the economic damage at home from Zero COVID, snap lockdowns still
continue in China as well.
So however, what we are seeing in terms of the military response, it does go farther than before in some regards. They had flown war planes around
Taiwan's Air Defense Zone when Pelosi was arriving. After that, they announced a series of military operations, military drills around the
island and we'll have to see how that plays out in the coming days.
But in a very unusual move, officials actually released a map of what those drills are going to look like, and if you look at the map, you can see that
it is literally encircling Taiwan.
So, this is a very provocative move and some of those areas that they've marked for where the drills are happening, they are actually encroaching on
Taiwan's territorial airspace and waters. That means, it is within 14 miles of Taiwan's shores.
So Taiwan has reacted by saying this is blockade, this is impacting regional stability. They've actually had to reroute some vessels to avoid
those areas. There have been some concerns that if this actually led to an escalation, it would have a big impact, potentially another snag on the
global supply chain, because the Taiwan Strait is a very important global shipping way.
But after all of this, again, it depends on how far they actually take these drills, because they want to send this message, but they want to keep
the stability here as well -- Richard.
QUEST: And that of course is the interesting question whether you can do that. I mean, can you sort of manage that recognizing that at any given
moment, there could be a mistake?
WANG: Well, Richard, it is actually really interesting, because if you look on Chinese social media, a lot of people in China think Beijing isn't
going far enough. They're saying after the days of unrelenting threats, and saber rattling, they don't think that this is the unprecedented show of
military force that they were expecting.
So to your point, this is a very delicate balance that Beijing has to walk, and even if China is not directly sparking a hostile action, the fact that
you have so much military hardware in the region, it does increase that risk of miscalculation of an accident that could spiral into something more
QUEST: Thank you. Selina Wang in Beijing.
Selina was talking there about the Taiwan Strait and the significance of it. It is one of the world's busiest shipping lanes, that's true, and
according to Bloomberg, nearly 90 percent of the world's largest container ships have used it over the course of the year.
You can see there the significance of it, which is why the Maersk CEO says any restrictions will cause significant disruption.
As Soren Skou was talking to Julia Chatterley earlier, alternative routes to go around that are just about impossible and very costly.
(BEGIN VIDEO CLIP)
SOREN SKOU, CEO, MAERSK: Clearly, any kind of restrictions on a movement in the Taiwan Strait for motion vessels or even closure would mean a lot of
disruption for commercial shipping, because the only way to handle it would be to go, you know, the other way around Taiwan and that would add to large
distances, it would absorb capacity, because we need to spend more time at sea. So clearly, the potential for disruption is quite high.
With that being said, you know, at this point, there is nothing that suggests that we will see restrictions on going through the Taiwan Strait,
but I guess the coming days, we'll see what kind of response the Chinese are planning to the visit of the Speaker to Taiwan.
(END VIDEO CLIP)
QUEST: Susan Shirk is with me, the Chair of the 21st Century China Center at UC San Diego, her new book is called "Overreach: How China
Derailed its Peaceful Rise."
Susan is with me.
Well, I guess the Speaker is on her way home and it is that classic, famous line, "Everybody else is sweeping up behind," you know, putting away the
party and sweeping up the glass. How much of a mess is left behind?
SUSAN SHIRK, CHAIR, 21ST CENTURY CHINA CENTER AT UC SAN DIEGO: Well, what Beijing did is declare a pretty formidable show of force and resolve. I
mean, this is serious saber rattling, which shows just how much more capable the Chinese military is compared to the previous Taiwan Strait
crisis in '95-'96, when they held exercises and missile tests.
But now these six areas do surround the entire island. "Global Times" said this demonstrates China's ability to exercise absolute control over Taiwan.
QUEST: Now, let me jump in there, because that's the crucial part. Tom Friedman writing in "The Times," points out that what she did with this
trip was, if you like, exposed the smoke and mirrors, that somehow this policy that the US has, was sustainable, because it's only sustainable as
long as everybody else believes in the magic of it.
SHIRK: Well, it requires self-restraint from all three players, from Taiwan, from the Mainland, and from the United States. And so that self-
restraint, I would say that, to a certain extent, Beijing exercised self- restraint, and that it didn't go directly after Speaker Pelosi's airplane.
But what it has done is show that it really has a very formidable military capability and that it is able to exercise this control over Taiwan.
One of the interesting audiences here is probably the United States and Europe. China is demonstrating that it is a lot more capable than the
Russians. These are joint exercises. There have been show off of a lot of their very advanced hardware, and they're going to show that they can
operate this hardware jointly, which is of course a major challenge for any modern military.
QUEST: On the actual policy that the US has, this sort of we support Taiwan, but we're never going to say if we would actually go in there
militarily, but we have the One China Policy at the same time. Has this visit shown that that policy is sustainable in the long run? Because the
reality of course, on military grounds, China can take Taiwan in a matter of weeks, but at a great cost.
So does the policy of One China and the US still exist in reality?
SHIRK: Well, Beijing and Xi Jinping believe that America has backed away from its One China Policy and because there has been a lot of contradictory
things that the Biden administration, Members of Congress, and The Pentagon have said, so we've lost the clarity of our position. My personal view is
that this is been a very successful formula and we should not abandon it. We should, in fact, try to reinforce it because the whole idea of strategic
ambiguity was to encourage restraint from Taiwan, so that they wouldn't do and take provocative action, as well as send a clear message of deterrence
And I'm sure that the PLA believes and they have to plan on this basis that the United States would intervene in an unprovoked attack on Taiwan, and
not only would we intervene, but now we see that the Japanese would support us and we would probably also get support from other Asian allies.
QUEST: Susan Shirk in California, thank you.
The global financial -- sorry, the global food crisis, I beg your pardon, created by the invasion of Ukraine by Russia, inspectors in Turkey, have
now given a greenlight to Ukraine's first grain shipment since the invasion.
Nada Bashir takes us through the high stakes passage, which officials hope is just one of many.
NADA BASHIR, CNN PRODUCER (voice over): A moment weeks in the making. This is the first grain shipment to have left Ukraine in months, charting a
carefully identified safe corridor through the Black Sea before reaching Turkish waters.
At the port of Rumelifeneri in Istanbul, a delegation from the newly established Joint Coordination Center carried out its first ever
inspection, setting sail to board the nearby Razoni to inspect its cargo.
The Sierra Leone flagship is transporting more than 26,000 metric tons of corn to Tripoli in Lebanon, but that's only a fraction of the near 20
million metric tons of grain still stuck at Ukraine's Southern Black Sea ports.
BASHIR (on camera): This first shipment is the culmination of weeks and weeks of negotiations between Russia, Ukraine, Turkey and the United
Nations and this really is a critical test of how well this new Black Sea Grain Initiative can work in practice.
The hope now is that this will give commercial shipping companies the confidence to send more ships to Ukraine.
(voice over): A welcome sign of progress for those countries most dependent on Ukraine's grain export.
The UN has warned that an additional 47 million people have been pushed into a stage of acute hunger as a consequence of the war in Ukraine, and
despite positive signs, there is still a real sense of urgency around alleviating the pressures of the global food security crisis.
US Secretary of State, Antony Blinken on Wednesday warning that while this is a significant step, it is only a first step, and Ukrainian President
Volodymyr Zelenskyy, striking a similarly cautious tone.
VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): Thanks to the U.S., in partnership with Turkey, we have had the first shipment. It is
still nothing, but we hope it's a tendency that will continue.
BASHIR (voice over): But with at least 17 ships now awaiting permission to depart from Ukraine, there is cautious optimism that this hard-won deal
will prove to be a success.
Nada Bashir, CNN, Istanbul.
QUEST: Let's stay with this idea of the disruption being caused by the Ukrainian war and the millions of people now living in East Africa that are
closer to starvation.
Missing of course, the food that we've just been talking about.
Ethiopia, the situation is particularly dire along with Somalia and North Africa. The drought has already cut food supplies.
CNN's Sam Kiley is there and now brings us the crisis that shows no sign of easing up.
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): It's not a coffin he is being measured for, this is an urgent effort to keep him from
the grave. His arms so thin for his age and height, he is categorized as severely acutely malnourished.
Abola (ph) needs urgent help. He is about two, but he can't walk.
He is one of six million kids across the Horn of Africa, the U.S. says are on the brink of starvation.
There's food for her youngest, but nothing for Hergak's (ph) other children, except for a little wheat ground into a handful of flour.
(HERGAK speaking in foreign language.)
KILEY (voice over): She says her husband died last year, she has no livestock. She survives by selling charcoal where she can, but food prices
have tripled this year.
The evidence that humanity's ancestors lived here one-and-a-half million years ago, has been found in places like this. Now water, the very source
of life is being measured out in coffee cups.
And 11.6 million people across Northeastern Africa are short of water in the worst drought for 40 years.
Here in Eldoret, Northern Kenya, local officials say that at least 85 percent of animals once owned by nomadic people are dead. And the UN says
one-and-a-half million head of livestock have perished in Kenya; and across the Horn of Africa, close to 20 million people face acute food shortages.
Now, the price of staple food like maize flour have more than doubled in many parts of Kenya, since the disruption of global food supplies by
Russia's invasion of Ukraine.
In short, Europe's war may soon start killing people in Africa.
KILEY (on camera): This community is marginal. It's living on the brink, on the very brink of survival, but so are millions of people right across the
region and critical to their long-term survival is the stability of Kenya, a country that is facing drought. It is facing massive increases in the
price of fuel and food and it is now facing General Elections.
Instability here causes chaos across the whole Horn of Africa.
(voice over): The increased banditry across the vast Marsabit County has led to dozens of murders and thousands of livestock lost in raids, and has
now been met with military operations and a dawn to dusk curfew.
Around 200 machine guns and other weapons were captured in one recent police operation here, along with hundreds of rounds of ammunition.
Roadblocks screen travelers in daylight. Nomads are moving south in search of grazing into major towns like Isiolo, and they've invaded wildlife
sanctuaries like buffalo springs, competing with protected and often endangered animals for food and water.
The results can be fatal. Two men were recently killed by a female elephant near here, but it is violence between humans that is putting the most
traditionally stable country in the Horn of Africa at risk.
FRANK POPE, CEO, SAVE THE ELEPHANTS: Anytime you get people that are hungry without other options, you've got a security situation, and Northern Kenya
is, you know, we're bordered by South Sudan, Ethiopia, Somalia -- all of which have had or are still in the grip of conflict that spews small arms
into this ecosystem.
So you've got a lot of weapons up here and increasing hunger. So yes, I'd say that's a security concern.
KILEY (voice over): That concern will endure as long as this landscape continues to dry out, and war in Europe chokes food supplies to Africa's
Sam Kiley, CNN in Eldoret, Northern Kenya.
QUEST: OPEC+ is nudging oil production up, but couldn't do much less, it is only about 100,000 barrels, way less than the White House was looking
for. And of course now, what was the point of Joe Biden going to Saudi Arabia?
So why would OPEC only move in a symbolic way when everybody can see the nakedness of the position?
In a moment.
QUEST: Hello, I'm Richard Quest. Together we've got a lot more QUEST MEANS BUSINESS. Talking about oil prices which have hit their lowest level since
Russia's invasion of Ukraine after OPEC agreed modest production boosts, and rising interest rates around the world and trouble with some red-hot
housing markets. It all come after the news headlines because this is CNN, and here, the news always comes first.
Gazprom in Russia, saying Western sanctions means it's impossible for a turbine. It's an important part of the Nord Stream 1 pipeline to be
returned to Russia from Germany. Now, Germany disputes that. Chancellor Scholz says on Wednesday, there were no legal or technical reasons that
would prevent the turbine's return. Gazprom, Russia's state energy, has already drastically cut deliveries to Europe through the pipeline saying
because of technical reasons.
Airbus has apparently canceled the remaining Qatar Airways order of A350 aircraft. An industry source with knowledge of the situation has confirmed
it to us. The two sides a locked in dispute over the surface damage to the planes as you can see on these pictures of the A350. A judge in London next
June will decide the case. Qatar Airways could not confirm the report. Airbus declined to comment.
Abortion rights advocates in the U.S. State of Kansas are celebrating a huge victory. On Tuesday, voters rejected a measure that would have allowed
restrictive abortion laws to go forward. It's the first state in the United States to put the question of abortion on a ballot since the Supreme Court
overturned Roe versus Wade.
100,000 barrels, but you know that old phrase, a drop in a barrel? Well, this clearly is 100,000 barrels a day, a tiny uplift from OPEC compared to
the recent increases of over 600,000 barrels. Oil surge on the news and then it tumbled way down, as you can see down nearly four percent. It's a
slap in the face, according to some analysts, for President Biden, who his visit to Saudi Arabia and the Crown Prince did little to sway the country's
output. Matt Egan is with me now. You know, arguably, Matt, they would have been better doing nothing at all. I mean, if you want it to be offensive,
just offer up 100,000 barrels.
MATT EGAN, CNN REPORTER: That's right, Richard. I mean, they basically did the bare minimum here after President Biden paid Saudi Arabia a visit. I
mean, this would be like, Richard, if you let me stay at your house, free of charge for a month, and I promise to return the favor. And the next
week, I show up with a cup of coffee and called it even. I mean, technically, I did reciprocate, but it's so small that you basically can't
feel it. 100,000 barrels increase. Remember the market?
QUEST: Why? Why not? Why? Why would they do it, knowing how it's going to be perceived, knowing that this is a humiliation in a sense for the U.S.?
EGAN: Well, I guess the thinking is that doing something is better than doing nothing at all. And it does allow the White House to come out and
say, which they are saying, that OPEC has increased production after President Biden visited Saudi Arabia. So, that is technically true. I think
the problem is that it's such a small increase. I mean, this actually amounts to the smallest production increase on a percentage basis in OPEC
history. That's according to veteran oil analyst, Bob McNally. And you know, some people do see this as kind of an insult to the White House. Matt
Smith, another analyst, he told me that it's, quote, "A slap in the face for the Biden administration. This trip, meeting with MBS, just didn't
Now, I do think, Richard, that OPEC could argue that there's just too much uncertainty right now in the economy to justify actually really ramping up
production. And there are all these concerns about, you know, a slowdown in China, a recession in Europe, a recession in the United States. And so,
they could argue with a straight face that now is not the time to pump a lot more oil.
QUEST: And we had a guest on the other day, whose names I forgot, but made the valid point, that the reason that production is down in many cases,
because the U.S. hasn't got back to where it was in terms of the nontraditional production of the -- of the shale in the Dakotas and in
Texas. And as I understand it, the reason the U.S. hasn't opened up its fields is because they're terrified that there's going to be a downturn as
a result of recession and production. And there'll be left with losses. So, even the U.S. producers don't want to produce more.
EGAN: That's right. I mean, of course, this is a free market in the United States, there's no cartel of producers deciding production here. But you're
right, U.S. output is not back to pre-crisis levels. That is for a lot of reasons. One, the fact that this is a boom to bust industry, and they've
had some really painful busts recently, most notably, of course, in spring of 2020, but also before then, as well. But the other really big reason,
while why U.S. production isn't back to where it was, is because they're under a lot of pressure from Wall Street, right? Shareholders are -- they
want to invest in Tesla and clean energy solutions, and they don't want to invest in oil companies that are losing money.
And so, these oil companies are under so much pressure right now to return extra cash to shareholders in the form of buybacks and dividends. They want
the companies to spend on returning cash to shareholders, not on expensive drilling that may or may not actually be profitable. So, you put all that
together and U.S. production is increasing. It is finally returning, but it's not yet back to pre-crisis levels. And of course, that is one of the
ironies here when you think about President Biden going to Saudi Arabia and asking them to ramp up production.
QUEST: I'm just looking at a number here, and that's according to naturalgasintel.com. U.S. output remains about a million barrels a day
below the pre-pandemic highs. That's interesting way of putting it. Matt Egan, always grateful. Thank you very much. It's QUEST MEANS BUSINESS.
EGAN: Thanks, Richard.
QUEST: Markets are up very strongly. Crypto remains to be pretty dreadful at the moment. We'll talk about all of this after the break.
QUEST: Now, closing arguments have begun in a trial in the United States that is putting grieving parents against the notorious conspiracy theorist.
A judge has already decided that -- and found that Alex Jones, who's a U.S. radio host, is responsible for lying about the tragic 2012 Sandy Hook
Elementary School massacre. So, the liability has been established. And now, a jury must decide how much money Jones must pay the parents. The
parents of one of the children who was killed testified on Tuesday that Jones made their life a living hell by claiming the murders were a hoax.
The grieving parents of the young victims took center stage at the trial. CNN'S Miguel Marquez give us a report on the experiences of coming face to
face with the man who told lies about the murder of their children.
SCARLET LEWIS, MOTHER OF JESSE LEWIS: My son existed.
MIGUEL MARQUEZ, CNN NATIONAL CORRESPONDENT (voiceover): My son existed, says Scarlet Lewis, the mother of 6-year-old Jesse Lewis, speaking directly
to conspiracy theorist, Alex Jones, in an Austin, Texas courtroom.
LEWIS: Jesse was real. I am a real mom.
MARQUEZ (voiceover): In an utterly unthinkable sign of our times, Scarlet Lewis makes the case that she and her dead child are real directly to
LEWIS: It doesn't exist that I'm Deep State. It's just not true. I know you know that. That's the problem, I know you know that. And you keep saying
it. You keep saying it. Why? Why? For money? Because you've made a lot of money while you've said it. I know you're -- I mean, I know you believe me.
And yet you're going to get -- you're going to leave this courthouse, and you're going to say it again on your show. You're saying no, you just did
MARQUEZ (voiceover): He raised questions about both Scarlett Lewis and the boy's father, who were seeking up to $150 million in damages.
ALEX JONES, HOST, THE ALEX JONES SHOW: He is being manipulated by some very bad people. But I'll just say 'cause I got to be honest, it's slow, OK? And
it's -- that's why it is not --
MARQUEZ (voiceover): The man Jones is calling slow and manipulated, Jesse Lewis' father, Neil Heslin.
NEIL HESLIN, FATHER OF JESSE LEWIS: I was blessed with six and a half years. We spent more than (INAUDIBLE) times -- I mean -- and I cherish
those days (INAUDIBLE)
MARQUEZ (voiceover): He and all families of seven victims and one FBI agent have successfully sued Alex Jones for defamation in three different trials
taking place in both Texas and Connecticut. Jones testified he was simply trying to get answers to questions that others were asking.
JONES: I never intentionally tried to hurt you. I never even said your name until this case came to court. I didn't even really know who you were until
a couple of years ago when all this started up. The internet had a lot of questions, I had questions.
MARQUEZ (voiceover): Based on a separate legal filing families of Sandy Hook victims alleged Jones is using bankruptcy laws to shield tens of
millions of dollars from any possible liability.
QUEST: Brian Stelter is with me. I think the thing I found most disturbing is watching Jones shake his head, as she's talking -- as the -- as the
mother is talking, that we're not Deep State. And I don't know what -- where is this going, Brian? Regardless of the -- of the money and damages
that will be given, where is this going?
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Well, it's going to a place where at least there's a better clear recognition of what Alex Jones is,
and what he represents. This conspiracy theorist broadcaster who has this dark corner of the internet and radio where he's able to spew these lies.
For him, the lies about the Sandy Hook families is just another day on the air, just another day in his life, putting out these lies. For the
families, however, it was yet another tragedy on top of the tragedy of losing their children.
And I think, you know, it's very notable to see a courtroom where this is all being litigated now, because most of the time, in almost every case,
where there are these crazy lies perpetuated by a broadcaster on the internet, there is no accountability, there is no follow-up, there is no
follow through. This is a rare case where that's happening. And so, maybe this is going to set a precedent, or at least draw a line in that
proverbial sand for the future, for someone to think twice before going on to the airwaves or the internet space, and making up crazy stories about
QUEST: Even him, of course, he manages to shield his assets through bankruptcy and other financial areas, they won't get anything as a result
of it. But is there any indication that those who support people like Jones and the right-wing conspiracy theorists are having second doubts?
STELTER: He is apparently making less money than he used to make. He has been, quote, unquote, de-platformed from big sites like Twitter and
Facebook. It's harder to find Alex Jones. But the idea of Alex Jones, the idea of an alternative media universe, where you can believe whatever you
want, facts be darned, that is very much with us and actually growing and increasing. Alex Jones pretends like he's on a search for the real truth,
but he's not running a news operation setting journalists around the world. He's just sitting in a bunker and screaming into a microphone. And that
idea, that creation of content is something that is with us and is growing actually, whether Alex Jones ends up losing all of his money or not, what
he has created, this environment is certainly still with us, Richard.
QUEST: And will be. That is absolutely -- Brian Stelter (INAUDIBLE) Brian, thank you very much. This is QUEST MEANS BUSINESS (INAUDIBLE).
QUEST: The world of crypto remains murky. August has only just begun, and it's a bad month for crypto. On Monday, the U.S. Securities and Exchange
Commission cracked down on what it's calling a crypto-focused pyramid scheme. On Tuesday, a security flaw led to the theft of almost $200 million
in coins from crypto startup, Nomad. And only this morning, a major hacker at Solana blockchain drained around 8,000 wallets. At the same time,
cryptocurrency prices are massively depressed, which begs the question, why is Binance beefing up its venture capital arm now? Changpeng Zhao is the
CEO. Zhao, he joins me from Dubai. When I read the announcement this morning, sir. And I saw what you're -- you know, you're the founder coming
back and great, great enthusiasm for a venture capital arm round crypto. I thought, what is he seeing that I'm not? Please explain.
CHANGPENG ZHAO, CEO, BINANCE: Sure. This is really the best time to invest in the -- in the industry. We did this four years ago, when during the --
during the bottom of the bear market last -- on the last, last cycle, we worked out fantastically well. So, we invested a couple $100 million,
depending on how you count the crypto prices over time. And now, our portfolio is $7 billion. So, it's one of the best performing asset funds,
ever, I think. And we want to do that again. So, I actually think the best investments are done in the bear markets.
QUEST: Oh, totally, provide -- absolutely, nobody would disagree, providing, pardon the phrase, you have the guts and the courage to make
those investments during the bear market.
ZHAO: It's not so much guts. I mean, there are people who don't understand this industry, they think, you know, it's just going to disappear. But for
people who understand this industry in a lot of depth, this technology is not going away. This is a new technology innovation. And this just like the
internet, only bigger. So, once you understand that, there'll be ups and downs in the industry. And but for equity, we see long term investment, we
think this -- you know, bear markets are the best. And then, in bull markets, everything's overpriced. People are -- right now, people have a
lot of cash flowing around that they're a little bit arrogant. But now, most projects that are keep -- that are still going are very humble. And we
think this is really a opportunity.
QUEST: I don't doubt for a second the validity of crypto as an important part of future finance. What I question with you now is the -- is if you
like the regulatory framework, getting rid of the gangsters, the hucksters, the Wild West, so that it plays its proper part. Now, we heard this from
the Fed Governor only a few weeks ago, talking about systemic risk of crypto, which is not there yet. So, how do you get to a position where
crypto is respectable?
ZHAO: I think it just takes time. It -- a lot of people in the industry are working very hard at it. We are like that, too. So, we work very closely
with regulators to shape the regulations -- regulatory frameworks for this industry all different parts of the world. We work with law enforcement, we
work with other government entities, we educate the consumer, the users. And the technology is still pretty nascent. So, there is some -- there are
issues. But, you know, the internet is -- well, internet still have issues. We had -- we had a lot of -- we spent 45 minutes before we came onto the
program with microphone issues. So, technology evolves.
QUEST: Right. So, what's the one thing you want to see? Bearing in mind, you've just made the -- you've just brought somebody in and you've beefed
up your venture capital arm, and you've got billions at your disposal of assets under management. What's the one change that you believe needs to
happen, that practical change that needs to happen?
ZHAO: I think there's really two fronts, not just one. I think on the one side, we really need to work closely with regulators to shape the
regulations for -- positively for this industry. There's a lot of misunderstanding, there's a lot of misconceptions about this industry.
There are very good players in this industry still trying to work very hard to shape this industry.
The second part is really just making the products more user friendly. Today, it's quite difficult for normal user, a normal person, if you're not
a techie, it's quite difficult for you to secure your crypto yourself. We need to make that easy and secure. So, we still need to develop a lot of
tools for that.
QUEST: That's important things. Thank you, sir. Grateful that you joined us tonight. And also, the regulatory issues, the different countries, I mean,
you've had your own problems, of course, between the U.K. and the U.S., and where one person has one account in one place, that's now gotten an account
in another, can these sorts of issues be resolved easily?
ZHAO: Absolutely. So, I think we had some issues before, but over -- we've had some, you know, frictions with regulators before. But over the last six
months or eight months or so, we have gotten licenses in France, Italy, Spain, Dubai, Bahrain, Abu Dhabi, and we also have 45 state licenses in the
United States, Binance U.S. So -- and five or six of them were obtained in the last six months. So, we're making progress. Yes, it's not easy, but
progress is being made.
QUEST: I like that. Not easy, but progress. If we -- we can all live with that in most ways of life. Thank you, sir. Grateful to have you with us
ZHAO: Thank you.
QUEST: Thank you. We'll take a "PROFITABLE MOMENT," a very profitable moment if you look at the market, it's up sharply today. Where are we at
the Dow at the moment? Oh, look at that. Good 460, nearly the best of the day, maybe even the best of the day, strong session all out. QUEST MEANS
QUEST: A short "PROFITABLE MOMENT" tonight. The market is up sharply. It would be foolish to believe that we're out of the woods, that somehow we're
on a tear towards a new bull market. But what I do think we have, we have visibility. What Rahel Solomon described as clarity. We know where rates
are going. And in the absence of an exogenous event, and that's the crucial part, something could always happen that could tip the whole thing over,
but we sort of know the way forward now, towards maybe a garden variety recession, towards lower interest rates next year, towards reasonable
economic earnings and growth earnings over the (INAUDIBLE) years ahead.
And that is what is fueling this market. Rates have come down -- rates are going up, earnings have come down, we're seeing prices more reasonable, and
that led to a market that's more stable. That's QUEST MEANS BUSINESS for tonight, I'm Richard Quest. Whatever you're up to in the hours ahead, I
hope it's profitable. See you tomorrow.