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Quest Means Business
Ex-Twitter Exec Blows Whistle On Security Practices; Business Activity Declines In Both US And Europe; U.K. In Deepening Trouble As Leadership Contest Heats Up; MoviePass Coming Back To U.S. Theaters In September; Dash To The Bell. Aired 3-4p ET
Aired August 23, 2022 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:25]
RICHARD QUEST, CNN INTERNATIONAL HOST: As we go towards the closing bell, which will be in an hour from now, it is a mixed day on Wall Street.
We had a bit of green in the morning, but that evaporated. Now, we're down 138. I'm guessing this is sort of the, if you look at the graph there you
see the trend, we might lose a bit more ground before the close, but that's the way it is, and the reasons why.
Weak economic data, the NASDAQ is slightly higher overall, but the main events of the day to bring to your attention: Chaotic and reckless. A
former Twitter executive says the company's cybersecurity policies are a threat to democracy.
Britain's dire economic outlook dominates the race to be the UK's next Prime Minister.
And MoviePass, the sequel: Company plans to relaunch after its spectacular collapse in 2019.
We are live in New York, Tuesday, August 23rd. I'm Richard Quest and I mean business.
Good evening.
Tonight, a whistleblower's report is accusing Twitter of cybersecurity lapses that are severe enough to threaten US security. It is a report
obtained exclusively by CNN and "The Washington Post" and it has sent Twitter's shares tumbling. You can see, they are off nearly six percent.
The whistleblower involved is Twitter's former Chief of Security, so he should know what he is talking about. He describes a reckless, mismanaged
company where almost half the workers can access personal data. He also accuses the top executives of misleading the board and regulators about
security vulnerabilities and further alleging employees or some employees are foreign spies.
CNN's Donie O'Sullivan, with this report.
(BEGIN VIDEOTAPE)
DONIE O'SULLIVAN, CNN CORRESPONDENT: Ready?
PEITER ZATKO, FORMER TWITTER CHIEF OF SECURITY: Yes.
O'SULLIVAN: Why are you coming forward?
ZATKO: All my life, I've been about finding places where I can go and make a difference.
O'SULLIVAN: This is Peter Zatko. Until January of this year, he was Head of Security at Twitter, but now he's a whistleblower and he says Twitter's
security problems are so grave, they are a risk to national security and democracy.
ZATKO: I think Twitter is a critical resource to the entire world. I think it's an extremely important platform.
O'SULLIVAN: He has handed over information about the company to US law enforcement agencies, including the SEC, FTC, and the Department of
Justice.
UNIDENTIFIED MALE: May I ask your name and --
ZATKO: I'm Mudge.
O'SULLIVAN: Zatko is better known in the hacking world by his nickname, "Mudge." He has been a renowned cybersecurity expert for decades.
UNIDENTIFIED MALE: His roots are in hacking, figuring out how computers and software work.
O'SULLIVAN: That expertise might be why Jack Dorsey, then CEO of Twitter hired Zatko after the company was hit by a massive attack in 2020 when
hackers took over the accounts of some of the world's most famous people.
JOHN TYE, FOUNDER, WHISTLEBLOWER AID: Mudge was one of the top five or six executives at the company.
O'SULLIVAN: Zatko is represented by John Tye who founded Whistleblower Aid, the same group that represented Facebook whistleblower, Frances
Haugen.
TYE: We are in touch with the law enforcement agencies. They're taking this seriously.
O'SULLIVAN: Twitter is pushing back saying: "Zatko is peddling a narrative about our privacy and data security practices that is riddled with
inconsistencies and inaccuracies, and lacks important context."
When we spoke to Zatko and his lawyer, they said that the lawful whistleblower disclosure process only allows them to talk about these
issues in general terms. For specific allegations about Twitter, they referred us to Zatko's disclosure.
TYE: I'm not going to go into details, but I will say that Mudge stands by the disclosure and the allegations in there.
O'SULLIVAN: CNN and "The Washington Post" obtained a copy of the disclosure from a senior Democratic official on Capitol Hill. In it, Zatko
claims nearly half of Twitter's employees have access to some of the platform's main critical controls.
ZATKO: There's an analogy of an airplane, so you get on an airplane and every passenger and the attendant crew all have access to the cockpit, to
the controls. You know, that's entirely unnecessary. It might be easy, but there -- it is too easy to accidentally or intentionally turn an engine
off.
POPPY HARLOW, CNN ANCHOR: Twitter accounts belonging to a whole lot of famous people --
O'SULLIVAN: That kind of access contributed to the massive attack in the summer of 2020 when hackers, two of them teenagers, tricked a couple of
Twitter employees into letting them into Twitter systems. That gave them access to accounts including that of then presidential candidate Joe Biden.
[15:05:14]
JIM SCIUTTO, CNN ANCHOR: I don't have to tell you the significance of being able to breach the Twitter accounts with many millions of followers,
including of leading politicians three months from a presidential election.
O'SULLIVAN: In the disclosure, you quote from a "Wired" Magazine article that says, "But if a teenager had access to an administration panel can
bring the company to its knees. Just imagine what Vladimir Putin can do."
TYE: Foreign intelligence agencies have the resources to identify vulnerabilities that could have systemic effects across an entire platform
across the whole internet.
O'SULLIVAN: Twitter told CNN that since the 2020 hack, had it improved these access systems, and a trained staff to protect themselves against
hacking.
If you're running any system, the more people that have access to the main switches. That's a very risky situation.
ZATKO: Yes, absolutely.
I'm talking in generalities, just large tech companies need to know what the risks are, and then they also need to have an appetite to go fix it.
O'SULLIVAN: Zatko also claims Twitter has been misleading about how many fake accounts and bots are on its platform. That's an issue that Elon Musk
has made central to his attempt to get out of a deal to buy the company.
ELON MUSK, CEO, TESLA: I guess right now, I'm sort of debating the number of bots on Twitter.
O'SULLIVAN: There will be suspicions of the timing of this. Are you guys carrying water for Elon Musk?
TYE: Absolutely not. We've been following the news just like everyone else, but that has nothing to do with his decisions or with the content of
what was sent in to US law enforcement agencies.
O'SULLIVAN: Mudge hasn't been talking to Musk in the background or anything like that?
TYE: Not at all.
O'SULLIVAN: Zatko says he was fired by Twitter in January of this year after he tried to raise the alarm internally. He points the finger at
Twitter CEO, Parag Agarwal, saying he has worked to hide Twitter's security vulnerabilities from the Board.
I suspect that Twitter might try to paint it like this, thus, Mudge got fired, and he is trying to retaliate against the company.
TYE: Absolutely not. This is not any kind of personal issue for him. He was eventually fired in January of this year, but he hasn't given up on
trying to do that job.
O'SULLIVAN: In response to allegations, Twitter told CNN security and privacy had long been a priority at Twitter. As for Zatko, they said he ".
was fired from his senior executive role at Twitter more than six months ago for poor performance and leadership. He now appears to be
opportunistically seeking to inflict harm on Twitter, its customers, and its shareholders."
ZATKO: Your whole perception of the world is made from what you're seeing, reading, and consuming online and if you don't have an understanding of
what's real and what's not, yes, I think this is pretty scary.
O'SULLIVAN: Are you nervous?
ZATKO: Yes, yes. This wasn't my first choice. But yes, I just want to make the world a better place, a safer place. The levers that I have to do it
are through security information and privacy.
(END VIDEOTAPE)
O'SULLIVAN: And Richard, as you can hear in those statements there from Twitter's spokespeople, the company is pushing back hard against Zatko, but
we haven't heard from any Twitter executives, none of them will come on our air to defend themselves or the company.
But we did obtain a memo that was circulated internally at Twitter this morning from the company's CEO. He said in part: "We will pursue all paths
to defend our integrity as a company and set the record straight."
Lawmakers here in the US, some of them calling for investigations into Twitter in light of these allegations, and also in Europe, Twitter is
headquartered in Dublin, in Ireland, and therefore the Irish Data Protection Commission has oversight on Twitter to make sure that they
comply with European data and privacy laws.
A spokesperson for the Data Protection Commission in Ireland telling CNN tonight that they want answers -- they want answers from Twitter in light
of these allegations -- Richard.
QUEST: Donie O'Sullivan there, thank you.
The security chief turned whistleblower, was hired in 2020 to handle the fallout from Twitter's most high-profile hack. So, we know about the
world's most famous people whose accounts were hijacked to post a tweet asking for Bitcoin.
The brains behind that hack turned out to be a 17-year-old from Florida. The whistleblower alleges security remains so poor that foreign governments
and spies could gain similar access.
Two weeks ago, a former Twitter manager was convicted of spying for Saudi Arabia and Zatko says last summer, Twitter considered cooperating with
Russian demands that could have resulted in censorship or surveillance abuse.
[15:10:06]
Theresa Payton was at the White House as the White House Chief Information Officer for President George W. Bush, now CEO of cybersecurity firm,
Fortalice Solutions with me now.
So, when you read these allegations, they are indeed of grave seriousness, but what do you do about them?
THERESA PAYTON, CEO, FORTALICE SOLUTIONS: Yes, they do cause me grave concern. I've read everything publicly available.
Here are a couple of things that Twitter could do is have some transparency. So, I do have concerns letting egregious security holes be
made known to nefarious cyber operatives, but a way to get around that is you can do a private reading room.
So, I would recommend to the Ireland privacy oversight group, I would recommend to the Hill, establish a reading room, require Twitter to show
up, have the whistleblower allegations, and have them show you documentation point by point whether or not the allegation is in fact old
news, and it's something that they've fixed, or if it is something that still exists.
And that can be a way to make sure you don't publicly disclose the most egregious security vulnerabilities, but at the same time, have actual
transparency in this process.
QUEST: Okay, so what do you say to those -- I've got my phone here, you know, what do you say to those who say, "Ah. Come on, it's only Twitter." I
mean, we're making -- this is a social media platform, admittedly used by leaders to spread messages and condolences and things. What's the big deal
here?
PAYTON: Well, the big deal is that you could have nefarious operatives, take over the official accounts of companies, CEOs, elected officials
around the world, and have them promote disinformation and that could move markets, it could cause people to riot; something worse, we do know there
was a test, the Syrian Electronic Army several years back, took over the AP News account, made a commentary around a bomb and Obama and things hurt,
and the market responded until it realized that it was a hoax and that the account had been taken over.
So something really terrible could happen if nefarious operatives take over accounts. There is also personal data stored in these accounts. There's
direct messages between, you know, potentially high-ranking officials at companies and governments, direct messages between them and other people.
It also has your phone number, for example, your real personal cell phone number for multifactor authentication. That information in the wrong hands
is not good.
QUEST: So, the more I hear you say, the more frightened I become in some sense, but I also want to say, surely the regulators, I mean, the
regulators have got -- they admit that they've been behind. They're behind with crypto. They're behind with Bitcoin. They're behind with social media
policies. The regulators can't cope.
PAYTON: That is true, and our regulations need to be more dynamic and flexible, because as social media and technology change and evolve, I mean,
we're still talking about, you know, web 3.0 At this point, so Twitter isn't really web 3.0. It's web 2.0.
When that comes, what are we going to do when we're sort of in this virtual reality? But it does speak to Twitter does have a responsibility here and
as we work through the details of this whistleblower complaint, if each of the details in the complaint, the ones that we're actually able to see, the
ones that have not been redacted, if they do tend to be still accurate, that is a problem.
And there should be fines, and there should be definitely an in-depth investigation. And more importantly, what's the plan to fix it and make
sure that Twitter is not in violation in the future.
QUEST: Theresa Payton, joining me now. Thank you very much indeed.
The Euro hit a two-decade low today. There is no relief in sight for Europe's energy crisis. The currency could fall further and Citibank Chief
Economist will give us his outlook next.
(COMMERCIAL BREAK)
[15:17:06]
QUEST: Any American visiting Europe at the moment knows what a bargain it is and vice versa.
Europeans in the United States are finding things very expensive, and that's because the Euro has now fallen to a 20-year low against the US
dollar, 12 percent down for the year, and we are now below parity.
The Eurozone inflation is up, imminent recession is on our doorstep. There are worries, of course, about leading index showing that business activity
contracting from this month in both Eurozone and the US, and of course the dollar is the safe haven.
Clare is in London; Rahel is in New York. Going between the two of you, Clare, how bad is the situation?
CLARE SEBASTIAN, CNN CORRESPONDENT: It's not a pretty sight, Richard. This was not light summer reading, this report today that we got about business
activity in the Eurozone, things like declining order, there is a drop in business confidence, muted consumer demand.
A couple of key things to pull out. One manufacturing was the driver; that contracted for a third straight month. We are seeing a lot of strain in the
manufacturing sector, especially in Germany. Services only grew a tiny bit. What we're seeing here, Richard is that as cost-of-living pressures rise,
people are spending less that post pandemic return to services that we saw is starting to fizzle out.
And the other key thing to point out here is you and I are used to talking about the periphery in Europe, the weaker economies around the
Mediterranean, them pulling down the core. This, what we're seeing now is the opposite. The two countries that contracted in terms of business
activity with Germany, and France.
Germany, for the second straight month; France for the first time in 18 months. It is the core now dragging things down. So, this was a bit of a
worrying report, especially as we put it in the context of the weaker euro, which could make inflation worse and the potential for more disruption when
it comes to gas supplies.
QUEST: Go to Rahel. Any better on your side of the Atlantic?
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: I wish I could say so, but unfortunately, not. So, much of the same in terms of what Clare mentioned,
but in fact more of the same in fact, because what we saw in the declines here, were pretty broad based according to the report. It was manufacturing
and services. Steeper, however, for services; but broad base.
Second consecutive month of contraction territory, so depending on how you want to slice it, signaling a downturn, signaling a recession imminently,
as you pointed out, Richard, the consensus was clear that activity was declining.
QUEST: And yet, the Fed -- I mean, Jackson Hole, I mean, we're going to talk to Nathan Sheets in just a second. The Jackson Hole speech is coming
up. The Fed is committed to its policy. So, more of the same.
SOLOMON: I think from what we expect to hear from Chair Powell, absolutely. I mean, I don't know that any of this is necessarily surprising
or not by design, right?
[15:20:03]
I mean, this is the pain that Powell has said that we will likely feel, unfortunate consequence of lowering inflation.
QUEST: Clare, the difference of course, in Europe, we've got the Eurozone, you've got the UK, but this downward spiral appears to be underway.
SEBASTIAN: Yes, Richard, and it is not clear what exactly is going to stop it at this point. As I've said, we're looking at potentially more gas cut
offs. Russia has scheduled maintenance on the Nord Stream 1 again for three days at the end of this month. Gas prices in Europe continue to spike
higher. Right now, they are about nine or ten times what they were this time last year, and really soaring at the end of that graph that you see in
the last month. That is causing serious pain to both industry and households.
Almost half of Europe, by the way, Richard, is now under a drought warning as well to add to the paint. The one bright spot in that business activity,
that PMI report we got today is that inflation indicators are showing signs of slowing.
It is still very elevated, but there are signs, I don't want to call it yet, but evidence that it might have peaked.
QUEST: Clare in London, Rahel in New York, thank you.
To Nathan Sheets, Citigroup's Global Chief Economist, who now joins me from South Carolina.
Well, you heard the tale of woes. I've been reading your views on all of this on the current situation. So, how much trouble are we in?
NATHAN SHEETS, GLOBAL CHIEF ECONOMIST, CITIGROUP: It is looking pretty rough out there right now, as you've highlighted. The Euro area is kind of
a heart in the center of the weakness given its sensitivity to the geopolitical disruptions, and its vulnerability to the gas situation, but
it is broader than that.
We're recently seeing evidence of slowing in the Chinese economy, which if you put that on top of what we're seeing in Europe, really does create a
challenging backdrop for the United States and for Jay Powell, at Jackson Hole.
How long can the US remain this oasis of stability in a slowing challenged global economy?
QUEST: The problem is we -- I mean, let's put aside the jobs situation, which seems to be a bit of an outlier, about why it's so strong. But the
reality is, Nathan, the higher interest rates are designed to slow down the economy. And I've seen comments from yourself and others that suggest in
the UK, for example, I mean, your own economist in the UK Citi sees UK inflation at 18 percent.
Well, if that is the case, then you're going to get inflation down to target, will require increases much higher than we're looking at, at the
moment.
SHEETS: Central Banks are making clear that they have got a tough choice between bringing down inflation and supporting the economy. And at the end
of the day, I think that the broad agreement across these Central Banks is the job one, it is fighting inflation.
If you're a central banker, and you're not willing to fight inflation, let it get out of hand, you're not really going to achieve any of your
objectives.
And I think that -- I think that's where we are. It is a very tough environment. Central Banks hate supply shocks, but that's exactly where we
are right now and they will hike.
QUEST: And we've got, of course, the Euro at parity, which is sort of -- I mean, it's been down in that sort of area for a while and cable is
extremely weak, the pound versus the dollar with the risk on the downside for that.
So to a large extent that does help. I mean, it hinders inflation in the Eurozone, but it helps in the sense of the US. But I suspect when you have
to rely on the currency and forex transaction to help your inflation numbers, that's a sign of how difficult things are.
SHEETS: Yes, you know, exchange rates have predictable implications for inflation, and as you said, in the United States, and I think one of the
reasons why the administration hasn't complained more about the dollar is that it is disinflationary, it's the opposite on the other side of the
Atlantic, but those are facts that transmit from the exchange rate into consumer prices and consumer price inflation are really quite low.
So on the one hand, yes, it's predictable. They're going in the right direction for the US, but it's not a game changer for the inflation story.
[15:20:03]
QUEST: Nathan, you have the great title of Global Chief Economist, so with that in mind, so, with that in mind, what's the one thing that you are most
concerned about tonight when we look at the global economic situation?
SHEETS: I think we've touched on it, and specifically, it is the European outlook and the prospects for Europe adjusting to further restrictions in
the supply and availability of gas.
When I think about what could turn the global economy downward, at an even faster pace through I'm expecting, I think an abrupt halting and sustained
halting of gasoline shipments could do that.
Of course, it's happening incrementally, but it is giving Europe time to respond and if we go all the way to zero from where we are sharply, I think
that that would be pretty, pretty much a game changer for the global economy.
QUEST: Nathan Sheets, I am grateful to have you, sir, as always on QUEST MEANS BUSINESS. I appreciate it. Thank you.
Now, MoviePass, now, there is a name from the past. It went out of business because it offered a flat fee for unlimited movies, and that was
unsustainable. It is trying a new approach, the new MoviePass. MoviePass returns. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: The election hustings for the next UK Prime Minister underway. Liz Truss and Rishi Sunak are making their final pitches or pitches to
Conservative Party members. The event you're seeing it on the screen. Now, they're being questioned about it.
The economic situation in the UK grows more precarious daily. You heard just us talking as the economy shrank in Q2. It's the first quarter
downturn in more than a year. Inflation is in double digits, four decades, and as you heard, Citi saying it could go as high as 18 percent.
[15:30:14]
The United Kingdom hasn't seen conditions like this since 1976, which I remember. All right, I was 14. ABBA and Elton John were taking the top
spots in the music charts. Inflation was coming off a peak of more than 24 percent, which puts today's numbers in perspective.
And households were enduring a year of fast rising prices. Like this year, then it was the Labour Party, Harold Wilson; the, ruling party was in the
throes of a leadership change from Wilson to Callahan, much like today from Johnson to the next one.
The last five decades have seen inflation way below peaks. The Bank of England might have to dust off some old playbooks.
With me now is Sir Howard Davies, former deputy governor of the Bank of England and the author of "The Chancellors: Steering the British Economy
in Crisis Times." He joins me from Dorset in England.
I mean, you remember the 1970s like I do.
Are similarities on this stagflation that the U.K. has appropriate?
SIR HOWARD DAVIES, FORMER DEPUTY GOVERNOR, BANK OF ENGLAND: Well, there are some similarities. Actually, I was in the treasury in 1976 (ph) and can
vividly remember the IMF delegation coming in to tell the government that they could not spend any more money and that we are not quite at that point
yet.
Though if some of the more (INAUDIBLE) plans of the Conservative Party candidates for the prime ministership were actually carried through, then
we might find ourselves in that position.
So we are not quite as bad as we were in 1976 but it is not a good situation. Of course, you can always say there's no situation so bad that
it cannot be made a bit worse by an unwise political intervention. And that is what is worrying people here.
QUEST: The other big issue is relating to tonight's -- the Tory Party leadership. One of the candidates, Liz Truss -- it's not clear what she
wants to do with the Bank of England. But she seems to want to add in another lever of control besides absolute independence that the bank
currently enjoys. I assume you are against it.
DAVIES: I would be. I think this will be a particularly hazardous time to do it, because changing the arrangements of interest rates at a time when
inflation is out of control, which it clearly is, it risks making things worse.
You could possibly get away with it at a time when things were stable and people weren't particularly focused on inflation. But I think it would be a
very hazardous time to do that.
Now it may not be impossible to look at the Bank of England's mandate. In fact, the Bank of England does not have an automatic renewal of its
mandate, as some central banks do. So that's not particularly harmful.
But where it might lead is worrying people. If it leads to a situation in which the bank were not responsible for interest rates and there could be a
political override, then I think that would be a very worrying development indeed.
QUEST: If we take a look, your book, which is due to arrive today, so you have the advantage. I haven't had a chance to enjoy it yet. But it's a
reading I'm looking forward to.
Taking a look at "Chancellors," you think of Nigel Lawson. You think of shattering the euro. You think of Jeffrey Hough and his policies of
monetarism and the first years of Thatcherism. You think of Gordon Brown and new Labour and all of that.
What do you think of when you look at the latest crop?
Are they up to the job?
DAVIES: It's undoubtedly the case that the apprenticeship for being chancellor used to be rather longer. Gordon Brown was shadow chancellor for
many years. Nigel Lawson had been the city editor of the "Sunday Telegraph" and followed financial markets very closely for a long time.
Jeffrey Hough, during his years in opposition, had studied the monetary policy intensively. We're now in a position where that is not the case. And
the chancellors in prospect under the prime minister would be people without that experience.
Now you can't say that experience necessarily produces correct decision- making. But you might say that they should be there for wanting to rely more on the treasury and the Bank of England for advice.
[15:35:00]
Unfortunately, the politics seem to be, at the moment, that you want to lash out and criticize the treasury for being unimaginative and not going -
-
(CROSSTALK)
DAVIES: -- for losing control. So we're in a slightly hazardous position of new people without much experience. But they seem free with their opinions
about the institutions they're going to be managing.
QUEST: Welcome to the world of politics. You know about that better than anybody.
Final question, same question to you as to Nathan Sheets of Citi early on the program.
What's the one thing that worries you most?
Economically, if you take the situation in the world at the moment, U.K., E.U., U.S., you pick, what is the one thing that is giving you the most
collywobbles?
DAVIES: I think it's China because we have not been in this situation recently, where it's been so dependent on what's going on in China. We
don't understand that so well as we understand what goes on in the U.S.
So when everything depended upon the U.S. economy, a lot of people understood that. They knew what to look for.
In China, it is quite difficult. Even China watchers like me -- and I've worked with the Chinese regulators for a long period -- I still find it
quite difficult to follow just what is happening in the Chinese economy.
And if the Chinese economy did fall out of bed in a clumsy way, then that would be an additional problem which we would not like.
QUEST: Sir Howard, always good to see you, sir. I'm very grateful you gave us time tonight, thank you.
MoviePass, there is a name from the past. It was a huge hit among cinema lovers. Now it says it is returning to the big screen. It is the new
MoviePass, a subscription service. The old one was unsustainable. It was basically free movies. It blew through hundreds of millions of dollars and
had to shut down a few years ago.
Now MoviePass is trying again. The beta launch is in early September. Paul La Monica is with me.
What are they offering?
Do we know what the core of this offer is?
PAUL LA MONICA, CNNMONEY DIGITAL CORRESPONDENT: Yes, we still don't have a lot of details. The company does say in an FAQ section on its website that
they expect to have three tiers of a pricing plan.
They are working with the major U.S. movie theater chains, $10, $20 and $30 dollar plan, which would give you credits to go to movies. They still
really don't say exactly what that means, if you will be able to have a certain number of films that you're going to go to every month.
How many tickets do you get?
Do you get anything at the concession stands?
We have no idea whatsoever. So I think there's a lot of skepticism. And there should be about what this MoviePass service is going to look like,
especially since we're in a time where there aren't as many blockbusters as movie theaters would like.
People are staying home and streaming. We've seen that with Cineworld, the owner of Regal Cinemas in the U.S., threatening to file for bankruptcy.
Things are that dire in the movie theater business.
QUEST: So there's various competing issues there. Firstly, the slate of movies: they can't do much about that. But if they price it right, they
could be the movie industry's and the cinema's best friends because they will get people back in again.
When MoviePass was around the first time, the cinemas held the whip hand (ph). Now it might be on the other side.
LA MONICA: It is possible that you could have both the major studios as well as companies like AMC and Regal and Cinemark and Imax maybe being more
cooperative and try and make sure that a service like MoviePass can succeed.
But it is not guaranteed. AMC, for example, is a company that likes to do a lot of promotions in its own right. Adam Aron, one of the more charismatic
CEOs on Wall Street right now, I find it difficult to see how he would want to help MoviePass, potentially at the expense of AMC.
So I'm not 100 percent sure that MoviePass is going to be greeted with open arms by all of the theater owners.
QUEST: Markets quickly. We are down. Well, we were down earlier. It looks like we're going to down tonight at the close. Bear market rallies we had
over the summer, it is nice to be 10 percent off the lows that we saw in June. But I guess this market now is looking for direction for what is
next.
LA MONICA: Yes, what is next, unfortunately, for traders is, you have to wait until Friday probably. That is when Jerome Powell is speaking at the
Fed's key Jackson Hole conference.
[15:40:00]
And will he give any more sense about what the Fed thinks about inflation, the jobs market and what that means for interest rate hikes?
Are they still going to be three quarters of a point rate hikes to nip inflation in the bud?
Are they maybe a little bit more heartened by some of the pullback in consumer prices as of late and will have slower paces of interest rate
hikes?
There are a lot of questions. Even what Powell says on Friday you have to take with a billion grains of salt. We still have the jobs report for
August coming out in early September as well as CPI, MPPI inflation data.
So anything Powell says on Friday can be ancient history by the time they meet in September.
QUEST: Paul, thank you.
That's QUEST MEANS BUSINESS. Top of the hour together, let's go for the closing bell.
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[15:58:30]
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QUEST: Hello, I'm Richard Quest. Together, we have a dash to the closing bell. It is just under two minutes away.
Markets muted as economic warning signs roll across the Dow. It is off 126 points, under 30 200,000. That is significant in a sense. But it will be
the third straight day when the market is down.
The Nasdaq is trying to stay in the green. Twitter, however, is off 7 percent. The S&P 500 is even stevens on the day overall.
As long as the global economy is sound, I asked our guest what worries the most. Sir Harold Davies is the former deputy governor of the Bank of
England. He said it's China's slowing growth.
(BEGIN VIDEO CLIP)
DAVIES: When everything depended on the U.S. economy, a lot of people understood that. They knew what to look for.
In China it is quite difficult. Even China watchers like me -- I've worked with the Chinese regulators for a long period -- I still find it quite
difficult to follow just what is happening in the Chinese economy.
And if the Chinese economy did fall out of bed in a clumsy way, then that would be an additional problem which we would not like.
(END VIDEO CLIP)
QUEST: So there is the Dow components and the Dow 30. Chevron seeing a strong rally after yesterday's loss, it's up more than 3 percent.
Caterpillar also up. Pop Disney toward the bottom once again. And P&G, the worst of it after being at the top yesterday. That's because of a very
slight change in sentiment.
That is the dash to the bell. I'm Richard Quest. Whatever up you're up to in the hours ahead, I hope it's profitable. We'll do it again tomorrow.
"THE LEAD WITH JAKE TAPPER" starts now.
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