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Quest Means Business
US Senate Passes Largest Climate Action In History; China Conducts Military Drills Near Taiwan For Fifth Day; Gold Falls Amid China Slowdown, Rising Interest Rates; Bed, Bath And Beyond Shares Soar, But Reason Unclear; SoftBank Posts Record $23B Loss Amid Global Sell-Off; Two Chinese Cities Approve Driverless Taxis. Aired 3-4p ET
Aired August 08, 2022 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:44]
ZAIN ASHER, CNN INTERNATIONAL HOST: There are some early gains, a pretty flat day on Wall Street. Let's take a look and see how the Dow is faring.
Right now as I mentioned basically flat as investors brace themselves to what will likely be a very busy week when it comes to inflation data.
Those are the markets and these are the main events.
A big US climate deal aims to slash greenhouse gas emissions by 40 percent by the year 2030.
A COVID lockdown strands 80,000 tourists in China's major resort island.
And a leap into the driverless future. Baidu gets the first permits for autonomous taxis in China.
Coming to you live from New York. It is Monday, August 8th. I'm Zain Asher, in for Richard Quest, and I mean business.
All right, tonight's green energy stocks are soaring after the US Senate agrees to the biggest climate investment in American history. The measure
was approved Sunday by a party line vote. President Biden called on House lawmakers to approve it next.
The $750 billion bill is called the Inflation Reduction Act. It includes $370 billion for climate change and energy security. It also makes major
changes to US healthcare and tax policies. Its supporters say it will also lower the Federal deficit.
Solar and clean energy stocks like First Solar, Sunrun and others are higher on the news, and with me to break all this down is my friend, Rahel
Solomon joining us live now from New York.
So Rahel, just walk us through this. Just explain to us the nuts and bolts. What exactly is in this bill?
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Well, Zain, always good to be with you. Yes, this is a massive piece of legislation that aims to save
Americans thousands of dollars in healthcare costs, but also incentivize small business producers, small business owners and consumers to electrify,
to go green, to electrify their vehicles, electrify their homes.
And when we look at that climate component of it, the EV component of it, well, it extends some tax credit $7,500.00 for new cars, $4,000.00 for use.
There is however a major caveat in it, Zain. It's intended to be received and felt at the dealership.
However, because of some legislation, because of some writing, it actually forces some automakers to sort of move their EV supply chains back to North
America, so that's obviously going to take some time to sort of build up those supply chains. So that will likely take a few years to feel.
There is also a whole host that we can show you have other rebates for electrifying your home, certain like if you buy a heat pump or water
heater, for example, you can receive up to $1,800.00 back on electric stove, I think we can show it for you, an electric stove, electric clothes
dryer, you can see $840.00 rebate as well.
In terms of healthcare, well Zain, as you know, Americans, much too many people's frustration pay so much more for healthcare related costs and so
this aims to allow Medicare to negotiate for prescription prices. That would be a huge deal. That, however, will also take a few years before we
actually see that, 2026, and also caps, out of pocket prescription costs for those on Medicare to about $2,000.00. I think we can show you and then
insulin is capped at $35.00 a month.
So for those on Medicare, this would be a huge deal for them and it is being paid in part, as you said, with a 15 percent minimum tax on
corporations making more than a billion dollars in profit. So it is an exhaustive piece of legislation.
ASHER: Yes, I mean, we literally have watched history be made here. Just talk to us about what happens next, because we know that obviously it goes
to the House, where it is expected to pass and then it goes to the President's desk. Well, obviously President Joe Biden will of course, sign
it being a Democrat.
But how long will it take for ordinary Americans to actually feel the effects of this bill, Rahel?
SOLOMON: Yes, that's a great point. So we do largely expect for it to be signed into law, right? And so in some ways Americans could feel this
almost immediately, right, in terms of those rebates. That's going to be decided at the State level from the State energy offices. But there is a
chance that those rebates could be offered sort of at the point of sale or could also be offered sort of on the back end and so consumers would feel
that more immediately.
The EV component, that is meant to be received sort of at the dealership, but that will likely take a few years before automakers can sort of build
up their supply chains to be able to accommodate, and then in terms of the healthcare costs will, that's likely going to be a few years, about 2025
before that cap for out of pocket expenses of two thousand, 2025 before we see that, and 2026, before Medicare can negotiate for bill prices.
[15:05:21]
But by and large, you know, it's not considered a short term fix all in all, but it is considered something that has a little bit in the middle for
everything, right? Some short term fixes, some medium term fixes, and some things that should hopefully help in the long term.
ASHER: All right, Rahel Solomon, live for us there. Thank you so much.
All right, among other things, the Inflation Reduction Act supports the production of renewable energy and electric cars. It would also help some
fossil fuel industries reduce their emissions. I asked White House climate adviser, Gina McCarthy, if the bill goes far enough.
(BEGIN VIDEOTAPE)
GINA MCCARTHY, WHITE HOUSE CLIMATE ADVISER: We are fully confident that working across the administration, making sure we do things like make
climate disclosure in our business community real and visible that we will be able to attract private investment, we'll be able to move forward and
we'd be able to make the innovations of the future faster, and make them more broadly deployed.
ASHER: So Gina, just quickly, and obviously this bill had to go through the Senate and therefore there had to be compromised. And of course, we
understand that. However, as climate adviser for the White House working for President Biden, would you have liked to see in this bill that wasn't
in it, what more could we have done here do you think that that might be lacking?
MCCARTHY: Zain, I have to honestly say that I've been doing climate work for, I don't know, 30 years now, I never anticipated a bill of this
magnitude and breadth. I never appreciated to the extent that I showed up, that the actions we have taken on climate would be so beneficial to the
people of the United States of America, and help us really build an efficient and secure and reliable energy system.
This is what is going to be the platform that we can build on. So while it does not get us to zero by tomorrow, it can get us to half by 2030 and it
will by far, get us on that path to actual net zero in 2050. I'm confident of that. So, I see no downsides to this bill. It looks great to me and I
cannot wait to deliver those benefits for the people in this country and internationally.
The US is back. It's amazing.
(END VIDEOTAPE)
ASHER: Economists are divided on whether this bill will actually reduce inflation despite being called the Inflation Reduction Act. The Act
actually runs 755 pages. Its full effect may not be felt for several years.
Supporters say it would lower healthcare costs by allowing Medicare to negotiate drug prices. It may also bring down energy prices through
subsidies for energy efficient appliances. Others say that by curbing the Federal deficit, it will reduce overall demand. Moody's says that the bill
will nudge the economy and inflation in the right direction.
Mark Zandi is the chief economist at Moody's Analytics. He joins us live now.
Mark, thank you so much for being with us. So despite the name, this bill, of course, is largely about climate change and of course, healthcare costs
as well. Just walk us through what changes now for ordinary Americans both in the short term, and also the longer term as well.
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, most immediately, this really helps those low income households that rely on the Affordable
Care Act for their health insurance. Without this legislation, the subsidies for that health insurance would expire and 13 million Americans
would feel the effects of higher insurance payments and many couldn't afford it would fall off.
Then the prescription drug negotiations with Medicare, that would reap benefits, but not toward until kind of mid-decade kind of kicks in, I
think, in 2026, and then the climate version, which are a big deal. I do think that's the most important aspect of the legislation. They don't kick
in for a while. So we probably won't see the effects broadly in terms of lower energy bills until a decade or two from now.
ASHER: And so just to expand on all of that, just in terms of the disinflationary measures that a lot of people are talking about and
focusing on the potential reduction in energy costs and fuel costs. Just walk us through that aspect of this bill. Give us more specifics on that.
ZANDI: Yes, well, it is disinflationary, but on the margin, you know, it's not a game changer with respect to inflation, certainly not in the near
term. Longer run, because of the subsidies that are provided for clean energy investment, clean energy production, and electrification. That
should reduce energy bills for households quite significantly and also of course, makes us much less dependent on fossil fuel, which we can see is a
big deal in the recent context.
[15:10:11]
In the Russian invasion of Ukraine, we saw oil prices go skyward and natural gas prices go skyward. We are paying a record high $5.00 for a
gallon gasoline not too long ago. So, this would -- this legislation would push us away from oil, natural gas, fossil fuel towards renewables and make
us less dependent and thus less likely to suffer these bouts of very high gasoline, diesel, and other prices that create a lot of financial pain for
Americans and particularly lower income Americans.
ASHER: Yes, you've touched on some of the small, I guess disinflationary measures in this bill. But, of course, as you and I both know, when it
comes to tactics to reduce inflation, that is largely the domain of the Federal Reserve, how much sway though do policymakers have to reduce
inflation do you think?
ZANDI: You're absolutely right. I mean, the burden of getting inflation down at this point relies mostly on the Federal Reserve and making sure
that the economy kind of throttles back and doesn't go past full employment and wage and price pressures begin to abate, keep inflation expectations
down.
And the latitude that lawmakers have, the Congress and the President are very limited. Now, there are things that they can do and some that we have
done. For example, President Biden released about a million -- is releasing about a million barrels of oil a day from the Strategic Petroleum Reserve.
That's been quite helpful in filling the void left by less Russian oil in the marketplace and keeping prices down.
And there are some things that could be done, that lawmakers aren't going to be able to do this Congress, maybe a future one, for example, building
more homes. You know, as you know, one of the major sources of inflation now and will be the case in the future is the lack of affordable housing
and very high rents. Rents are rising very rapidly.
We need more housing, and here is a place where lawmakers could really help. But that's not -- that's for another day.
ASHER: All right, Mark Zandi, live for us there. Thank you so much.
Coming up next here on QUEST MEANS BUSINESS, a fifth day of military drills, what President Biden is saying about China's alarming conduct
towards Taiwan, that's next.
(COMMERCIAL BREAK)
[15:15:00]
ASHER: US President Joe Biden says he is concerned about China's military drills near Taiwan, but doubts Beijing will take things further.
China carried out more drills on Monday, live fire exercises began last week and were originally announced to last through Sunday. Taiwan's Defense
Ministry described yesterday's activity as a simulated attack. It says Chinese aircraft drones and Navy ships were detected in the Taiwan Strait.
China's Foreign Ministry says the drills are taking place within its own waters. Taiwan's Foreign Minister tells CNN the island will stand up to
Beijing.
Joseph Wu spoke to our Will Ripley about the growing military threats.
(BEGIN VIDEOTAPE)
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT (voice over): As Taiwan was lighting up landmarks for US House Speaker Nancy Pelosi, China was lighting
up the skies and seas around the self-governing democracy, a democracy in danger of a Chinese takeover if Beijing's communist rulers get their way.
Pelosi was in Taiwan less than 24 hours leaving behind a crisis, some say she helped create.
RIPLEY (on camera): Was there any concern here in Taipei about the timing of this and whether it might provoke some sort of reaction from China?
JOSEPH WU, TAIWAN'S FOREIGN MINISTER: We knew that China always reacted badly, whenever we have good friends coming to visit us. The Chinese
government cannot dictate who can come and who cannot come and they cannot dictate Taiwan, who can be our friends or who we should make friends with.
RIPLEY: But what if China goes further as a result of this visit, or using this visit as an excuse. Do the benefits outweigh the risks for Taiwan?
WU: One is what China is doing is unwarranted and what it is doing is upsetting the peace and stability in the Western Pacific and is something
that should not be welcomed by the international community.
RIPLEY (voice over): Taiwan's Foreign Minister, Joseph Wu, tells CNN, China's war games are aimed at isolating this island. Pelosi, the most
powerful politician to visit in 25 years.
RIPLEY (on camera): Is Taiwan in more danger today than it was before Nancy Pelosi's visit?
WU: China has always been threatening Taiwan for years, and it is getting more serious in the last few years and it has always been that way.
Whether Speaker Pelosi visit Taiwan or not. The Chinese military threat against Taiwan has always been there.
RIPLEY: What do you believe China's motivation is and do you think that their timeline has changed?
WU: China's motivation, as I said a little bit earlier is not going to end in Taiwan. They claim East China Sea. They claim South China Sea. They work
very hard to go into the Pacific. Their influence in South Asia and Africa, even in Latin America is unprecedented these days, and therefore he has a
global ambition.
RIPLEY (voice over): Ambition driven by China's most powerful leader since Mao, Xi Jinping on track to become President for life with a burning desire
to unify with Taiwan by force if necessary.
RIPLEY (on camera): Has Taiwan's democratic system ever been in more danger than it is today?
WU: I can tell you that Taiwan is more resilient than before. Look at Taiwan these days. You know, China is trying to impose trade sanctions
against Taiwan, trying to attack Taiwan from military or non-military aspect, but the way -- the life goes on here in Taiwan.
RIPLEY: Should people in Taiwan be more worried?
WU: If you ask me, I worry a little bit.
RIPLEY: What do you worry about?
WU: I worry that China may really launch a war against Taiwan. But what it is doing right now is trying to scare us and the best way to deal with it
is to show to China that we are not scared.
RIPLEY (voice over): He calls China's military threat more serious than ever. Taiwan's warning to the world: The danger does not stop here.
Will Ripley, CNN, Taipei.
(END VIDEOTAPE)
ASHER: Hong Kong is making its quarantine rules a bit easier for incoming travelers. From Friday, people come from overseas excluding Mainland China
will only have to spend three days in a government designated hotel. They may then spend the next four days under home medical surveillance or at a
non-government designated hotel that's providing they have tested negative for COVID-19.
China has locked down about 80,000 tourists visiting a resort island. The stranded travelers have to stay an extra week and test negative five times
for COVID.
Selina Wang has more.
(BEGIN VIDEOTAPE)
SELINA WANG, CNN CORRESPONDENT: In Zero COVID China, just trying to take a summer vacation can become a nightmare experience. Eighty thousand tourists
are now trapped in a sudden lockdown in the City of Sanya. This is a popular vacation destination on China's tropical Hainan Island, often
called the Hawaii of China.
This outbreak is driven by the highly infectious omicron subvariant and it has infected more than 1,200 people in Sanya since August 1st. That counts
as a major outbreak by the standards of China's Zero COVID Policy where even one or a handful of cases can send an entire community into hard
lockdown.
[15:20:01]
Sanya's sent his entire city of some million people went under lockdown on Saturday. Public transportation has been suspended. People can only move
around for emergency services. More than 80 percent of the flights leaving the city were canceled, leading to complete chaos at the airport, with some
video showing crowds of people chanting that they want to go home.
Now authorities have said tourists can only leave after seven days, but that could be extended if cases do not come down enough. The government has
said that people with canceled flights can book discounted hotel rooms, but for some families, it's still not affordable.
A state news website reported that a family of 13 said they'd have to pay more than $26,000.00 for an extra week at their hotel. Now, Sanya was
supposed to be a long awaited escape for people who were finally willing to travel during COVID. Many of the tourists stuck in Sanya are people from
Shanghai who went there to rest and recharge after surviving the brutal two-month lockdown in Shanghai earlier this year.
We spoke to one tour stuck in Sanya from Shanghai who said that it feels like Russian roulette when you travel in China. You're always taking a
gamble that your destination might just get locked down.
Selina Wang, CNN, Beijing.
(END VIDEOTAPE)
ASHER: The economic slowdown in China is weakening demand for commodities and hitting prices. Gold is down significantly in just the past few months
reversing a sharp spike in price after Russia's invasion of Ukraine. Silver and copper have fallen as well.
Despite those lower prices, the global mining company Barrick Gold beat earnings expectations in the last quarter with higher copper output making
up for a surge in costs.
Mark Bristow is the President and CEO of Barrick Gold. He joins us live now. Mark, thank you so much for being with us. So your business is of
course in both copper and gold as of course, you know, as everybody is talking about today, the Senate just passed this historic climate bill.
But the thing about renewable energy is that you need copper. You need copper for solar panels, you need copper for wind turbines, you need copper
for electric vehicles as well. How important is copper in order for this bill -- this bill that just passed in the Senate to actually be realized?
MARK BRISTOW, PRESIDENT AND CEO, BARRICK GOLD: So I think, with or without that bill, copper is one of the most strategic metals in modern day and it
is needed, as you correctly say, in every aspect of a cleaner world, no matter which way you look.
If you want to transport renewable energy from where you get it, to where you need it. Whether it's battery technology, or any other electric motor
in this driven industry, it's required. And it comes in big mines and there is not a lot of it around right now to be mined, to deliver what I believe
is required to actually help us get to where we want to go in this transition away from hydrocarbons.
ASHER: Yes, so I mean, just explain that to us. How bad is this supply crunch? I mean, what happens if no new mines are built?
BRISTOW: You know, it's -- I think it's something -- you know, the copper industry traditionally has never been in sync. It's always too much or too
little. Never enough. And right now, as you rightfully pointed out, you know, with a slowdown in the Chinese economy, the copper price has fallen,
but that in itself is negative because it doesn't encourage miners to continue to develop copper mines and copper mines today are, you know,
you're talking about anywhere between five and 20 years lag or lead time to deliver a copper mine that's already identified.
And because you have to get feasibilities done, it is a very big mine that comes with lots of capital and lots of construction.
ASHER: And I think one of the biggest ironies in all of this is that of course, you absolutely need copper in order for the US for example, and of
course other countries to realize that sustainable goals in terms of renewable energy, but you also have to make copper production itself much
more sustainable than it actually is.
Just walk us through that aspect.
BRISTOW: Yes, so that's mining in general. You know, I think there's a lack of appreciation that mining is required to develop the world and, you
know, we can have, in a cleaner future, we still need mining and what it goes back to is responsible mining, mining that's carefully engineered that
it is sustainable, which is important because, you know, the whole concept of ESG it is only really meaningful when it is sustainable and that
sustainability is something the mining industry has been working on for a long time now and it needs a collective vision from everyone to be able to
deliver those more responsible mining investments, to be able to support.
[15:25:37
And I think the critical thing is, when you look at the legislation that you refer to that was passed overnight, you know, it's an isolated
decision, what we need are global solutions. And, you know, we can do all we lack in the United States, but there's the rest of the world,
particularly the emerging and developing world, that also has to be brought along otherwise, you know, there's no island on this planet. We're all in
it together.
And so just like we saw sort of what I referred to as COVID nationalism, very inward looking approach, no global solutions, we've got to be careful
about that when it comes to managing this planet going forward.
ASHER: So clearly, demand for copper in all of this. I mean, this bill, I mean, we're talking about $370 billion dedicated to focusing on the
environment in the US, clearly demand for copper is about to skyrocket.
What does that mean for copper prices? And what does that mean for your business?
BRISTOW: So it means Barrick is a gold and copper producer. About 20 percent of our bottom line is supported by copper mining. We have just
announced a big expansion into Pakistan where we plan to develop one of the largest undeveloped copper mines in the world. And so it's good for our
business, of course.
But I think that the critical thing how as well is, you can't just do it for America. We've got to do it for everyone and that is the dilemma. You
know, it's all very well earmarked, ear-tagging significant hundreds of billions of dollars in investment in America, but it's also important that
we bring the rest of the world along as well.
ASHER: Yes, I liked what you said about there being no islands in this world when it comes to the fight against climate change. We are all in it
together, for better or worse.
Mark Bristow, we have to leave it there. Thank you so much.
BRISTOW: Pleasure.
ASHER: The taxis of the future are here and they don't need a driver. China's driverless cabs and the company that is running them, that's next.
(COMMERCIAL BREAK)
[15:31:11]
ASHER: Bed, Bath and Beyond investors expectations mean stocks are having a moment again, though nobody is really sure exactly why. Shares and retail
company Bed, Bath and Beyond was up by more than 60 percent earlier today. It's come back a bit but still doing pretty nicely as you can see there.
Gamestop and AMC Entertainment are also seeing big raises as well.
Let's bring in Paul La Monica to talk us through this. So, Paul to talk us through why these stocks are suddenly soaring again.
PAUL LA MONICA, CNN DIGITAL CORRESPONDENT: Yes, Zain. It's fascinating. It looks like revenge of the individual investor, "apes on Reddit." A lot of
individual investors love these three stocks in particular. They are very vocal about them on social media. And what they all have in common is that
they're heavily shorted stocks. And I think individual investors kind of take pride in being able to squeeze if you will, the "professional hedge
funds" and other institutional investors kind of try and show them who's boss buying these stocks, pushing their prices higher makes it more painful
for the hedge funds that are shorting them because it increases their losses. And I think a lot of the Reddit crowd, people really take pride in
squeezing those short sellers.
ASHER: I mean, it's interesting because these stocks sort of have major questions about their fundamentals. You think about Bed, Bath and Beyond
and Gamestop expected to lose money this year. Let's talk about Ryan Cohen. Can he really turn around these companies? What are your thoughts on that?
LA MONICA: Yes. I think that investors are clearly hoping that Ryan Cohen, the founder of the online pet retailer, Chewy will be able to work his
magic with both Gamestop where he's the chairman and the largest, his firm is the largest shareholder to turn that company around, even though it
faces challenges with many people now downloading games instead of buying them at stores.
But also, his forehand also has a big stake in Bed, Bath and Beyond. And despite the fact that it's a challenge company that just recently got rid
of its CEO, who they brought in to try and turn things around I think investors are hoping that maybe there'll be another turn around following
the failed turnaround that maybe Ryan Cohen will be able to engineer because he has a big stake in Bed, Bath and Beyond.
ASHER: Paul La Monica live for us there. Thank you so much. SoftBank reported a record $23 billion loss last quarter. The downtown and tech
stocks have spelled trouble for the Japanese company's Vision Fund, which made a recent splash by investing in companies like Uber, Didi, and WeWork.
The fund has plunged in value by more than $50 billion from its peak. CNN's Clare Sebastian has more.
CLARE SEBASTIAN, CNN CORRESPONDENT: In some ways SoftBank and its flagship vision funds embodying the trials facing the entire tech sector, rising
interest rates, dampening risk appetite, and the availability of cheap money for new ideas. Well, this was a record quarterly loss coming though
just 15 months after the company posted the biggest annual profit for a Japanese company ever driven by the pandemic fueled gains in tech.
Perhaps not surprising though, if you look at the market over this quarter, the tech heavy NASDAQ fell more than 20 percent. And SoftBank also took a
hit from the plummeting value of the yen, pushing up the value of its dollar-denominated debt. On the other hand, though, this was not just about
forces outside of their control. Founder Masayoshi Son admitting he took too much risk invested in too many startups and saying the company is now
"in defense mode," buying less overall and selling off assets to raise is cash.
[15:35:00]
The company revealing they sold out of Uber and online real estate company open door over the summer. SoftBank itself will also pay the price for
these losses. Son reportedly saying in a press conference that they need to start dramatic cost cutting including potential layoffs. Despite the
reckoning, Masayoshi Son is certainly not giving up, promising plenty more opportunities when the market rebounds.
Clare Sebastian, CNN, London.
ASHER: Driverless taxis used to be a thing of science fiction, a familiar sight and futuristic films like The Arnold Schwarzenegger movie, Total
Recall.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Hello, I'm Johnny Cab.. Where can I take you tonight?
ARNOLD SCHWARZENEGGER, AUSTRIAN-AMERICAN ACTOR: Drive. Drive.
UNIDENTIFIED MALE: Would you please repeat the destination?
SCHWARZENEGGER: Anywhere. Just go. Go.
(END VIDEO CLIP)
ASHER: Now, the driverless taxis have arrived in the cities of Wuhan, for example, in China, they'll be operated by the tech firm Baidu. And for now,
they're restricted to set zones. For the first time anywhere in China they'll be carrying passengers, without a safety driver onboard to monitor
them by these permits go into effect today.
Shelly Palmer is a tech commentator. He joins me live now from Connecticut. Shelly, it's been a while. Good to have you on the program.
(CROSSTALK)
SHELLY PALMER, CHIEF EXECUTIVE OFFICER, THE PALMER GROUP: Good to be back.
ASHER: So your thoughts on this? Would you get into a car without a driver?
PALMER: Absolutely. Wouldn't even think about, of course, absolutely. Especially these cars, they are supposed to be level five, they're
driverless. Meaning that there's literally not a human being that's driving, but they're in special zones, the cars, the roads are a little
wider than normal, so the cars can easily navigate. And also some of the areas of those roads have what's known as V2X or vehicle to everything
communication where not only are you using the onboard computers in the car, to steer it, but it's also sensing the world around because there are
sensors in the side rails and the street lights and what have you. So it's a pretty safe environment. But it's a very exciting test.
ASHER: Yes. I mean, China is normally at festival. I'm too much of a control freak to get into a car like this, but maybe I could be persuaded.
China's normally very conservative when it comes to taking risks in these types of technology. Were you somewhat surprised that they ended up issuing
these permits?
PALMER: No, you know, it's interesting. You're right. They generally are incredibly conservative when it comes to this kind of risk taking. But this
is -- it just goes to show you how particularly safe they believe this is. There are millions of test miles that have been driven. I think we're going
to learn a lot like how do you clean, a car or a taxi with no driver between let's say someone who became motion sick in the car as the car, you
know, how are you going to deal with all of the real things that happen in the real world? They're going to learn a lot about this and this test. And
I think it's fantastic.
ASHER: Yes. So how does it compete though, for example, with other taxi companies that do have drivers? I mean, is the idea mostly at this point
through costs by making the rides a lot cheaper than -- and then cars with drivers?
PALMER: So this is a race to the bottom. Right now it's somewhere around $2.00 a mile to put a driver behind the wheel. And it's somewhere to call
it 30 cents to have the car drive itself. There's less maintenance, there's less of everything. But everyone's going to try to do this. So, someone can
do it for 30 cents a mile. So I'm going to do it for 28 cents a mile and down to the bottom.
This is a transition we're going to see from where we are today where companies sell cars to access being as valuable as ownership. And then
ultimately, the question is, do these automotive companies become mobility companies? Is it just about getting you from here to there? Do you need to
buy a car if you can press a button and get a car. And by the way, if you use ride hailing now, like Uber or Lyft, those cars as far as you're
concerned, they drive themselves also.
ASHER: Well, just walk us through what this means for the future of transportation in China, but also what the rest of the world can learn from
this as well.
PALMER: Well, I think, look, there's a simple way to think about it. I grew up in a car culture where a BMW was the ultimate driving machine. If it
drives itself and I don't drive it, there is a new utility, what is it? The ultimate safe getting from place to place machine. Now it's about pressing
a button and getting from here to there. And that experience is going to have to be different and the costs are going to be different.
And how we approach the second biggest investment we ever make in our lives in America, right? First is your house. The second is your car, and for
most people, so what does that actually mean for businesses? There's a lot to be said here. What does a convenience store look like for gasoline where
you go in there and you're buying salty snacks and things that are bad for you and lottery tickets if you don't need to stop at a gas station.
There's a lot packed into this particular test. And if they get it right, there's a giant economic impact. How close is it? I don't know. Some people
say very close. This is the first time we've seen a level five car out in the wild doing its thing. We've seen some trucks in America. We haven't
seen taxis, so I'm watching this test very closely.
[15:40:04]
ASHER: This is a big, big deal. Shelly Palmer, always good to have you and I love your enthusiasm by the way. Thank you so much.
PALMER: Such a pleasure.
ASHER: All right, Some sad news here. The entertainment world has lost a legend. Olivia Newton John passed away peacefully at the age of 73.
According to a statement from her husband, the singer and actress will remembered for her hit songs including Physical and I Honestly Love You
along with her star turn in the hit movie Grease that came out in 1978. And that is QUEST MEANS BUSINESS.
I'll be back at the top of the hour as we make a dash for the closing bell. Up next, Connecting Africa.
(COMMERCIAL BREAK)
[15:58:42]
ASHER: Hello, everyone. I'm Zain Asher. It is the dash to the closing bell and we are just two minutes away. The U.S. Senate passed a sweeping
healthcare and climate bill on Sunday but traders are unmoved. The Dow gave up earlier gains and as you can see that is now flat up only about 40
points or so. So basically flat. BSE 100 is down slightly. It's coming off of three positive weeks. Same story with the tech heavy NASDAQ.
Chipmaker Nvidia isn't helping it's down on a huge revenue mess. The Inflation Reduction Act addresses climate change and health care costs.
That said some economists don't live up to its name. Mark Zandi at Moody's economics said it won't provide immediate relief from rising prices.
(BEGIN VIDEO CLIP)
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: It is disinflationary but on the margin, you know, it's not a game changer with respect to inflation,
certainly not in the near term. Longer run because of the subsidies that are provided for clean energy investment, clean energy production and
electrification. That should reduce energy bills for households quite significantly.
And it also of course, makes us much less dependent on fossil fuel which we can see is a big deal on the recent, you know, recent context.
(END VIDEO CLIP)
[16:00:04]
ASHER: All right. Now for the Dow components. Disney leads. Investors have high hopes for Wednesday's earnings. Boeing is up. They're expected to
resume deliveries over 787 Dreamliner in the coming days.
And that is your dash to the bell. I'm Zain Asher. "THE LEAD" with Pamela Brown starts right now.
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