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Quest Means Business
UK Fiscal Plan Sends Pound to Record Low against USD; Far-Right Coalition Claims Victory in Italian Elections; Pakistan Flooding; Russia's War On Ukraine; Sweden. Aired 3-4p ET
Aired September 26, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ELENI GIOKOS, CNN INTERNATIONAL HOST: The selloff continues on Wall Street. The Dow falling sharply once again as the surging dollar adds to
investors' concerns. The Dow Jones as you can see, down eight-tenths of a percent. Those are the markets and these are the main events.
The British pound falls to a record low as investors deliver their verdict on the Prime Minister's plan to fight inflation with tax cuts.
Italy is poised to elect its most far-right Prime Minister since Mussolini putting it on a collision course with Europe.
And Elon Musk faces a grilling from Twitter's lawyers over his withdrawn takeover bid.
Live from Dubai. It's Monday, September the 26th. I'm Eleni Giokos. I'm in for Richard Quest and this is QUEST MEANS BUSINESS.
All right. A very good evening and welcome to the show.
Tonight the British pound is in turmoil trading just above parity with the US dollar. Sterling plunged to a record low early this morning. It has
since clawed back some of those losses, but remains at historic lows. You can see it sitting at 1.0695 to the USD. It has lost about five percent of
its value since Friday, when the new UK government unveiled the biggest -- the biggest tax cut in 50 years.
A short while ago, the Bank of England tried to calm the markets, it said it would not hesitate to raise rates at its next meeting. That statement
backfiring. Many were looking for signs of an emergency rate hike before then. The pound fell one percent in response.
Anna Stewart joins me now.
Anna, on the one hand, you have the Bank of England, trying to fulfill its mandates, looking at inflation, seeing what the currency is doing. On the
other end, you have government policy that is completely what it seems counterintuitive to what the BoE is trying to achieve.
ANNA STEWART, CNN REPORTER: That is certainly one way to look at it. And poor old British consumers really stuck in the middle of this push and pull
really because what the UK government announced last week was really intended to make people feel better off, make them feel wealthier, help
them with their energy bills, the plan being to go for growth or go broke trying, to go for growth, and that was that plan.
But now we were looking at today potentially an emergency rate hike from the Bank of England. It didn't happen, but this is for a Central Bank that
has had seven consecutive rate hikes, one just last week of half a percentage point.
So today, you had Brits saying "Hang on. So taxes are being cut, my energy bills might be being sorted. But hang on my mortgage is about to go through
the roof." So, you can understand how people here are feeling and the potential backlash here in terms of the electorate, because of course, this
new government wasn't elected by anyone really, it was appointed by members of the Conservative Party.
So, certainly there is an interesting mix of things going on here. No rate height from the Bank of England, despite many economists expecting to see
anywhere -- I saw all sorts of estimates this morning, from a quarter of a percentage point to one and a half percentage points.
I think the fact that we have heard that statement from the Bank of England where they said absolutely nothing new, I don't think we will be getting
anything at all this week. So at this stage, it's kind of a waiting game in terms of investors. Do they have any confidence in the UK and UK assets? I
think we will see how the markets open tomorrow and how the rest of the week goes, but it is not looking good and I can say that as a Brit as well.
GIOKOS: Yes, look for everyone else. You know, everyone is rubbing their hands together saying, well, the pound is looking cheap. I mean, the
question is, is it going to rise from here onwards?
Perhaps this was, you know, a big shock, right? This was sort of an unexpected turn. We didn't know what Liz Truss and her government was going
to do from the start. I guess, this is one of the biggest sort of policy shifts that we've seen and none of this was really priced in.
From the people that you're speaking to, do they get the sense that this is going to settle?
STEWART: Well, it is really interesting, isn't it? Because I think Liz Truss had a very long leadership campaign whether or not the UK were
allowed to vote for her. She made very clear she wanted to try and freeze energy bills for households and businesses that much we knew. We knew that
she favored lowering taxes and reversing some taxes that were going to go up. That much we knew.
STEWART: I don't think anyone thought we would see the biggest tax cutting program for 50 years being suggested at a time when the pound was already
weak, inflation is nearly at 10 percent in the UK. I think the price of it that the government has estimated took people by surprise. I think the fact
that the Office of Budget Responsibility who are independent, but usually with a proper budget, which we often have in the spring would get it
beforehand and be able to give an estimate of what the impact would be on the UK economy, that didn't happen.
So in many ways, this felt like a gamble for investors, and I think investor confidence over recent months, having already lost Prime Minister
Boris Johnson, we've had a lot of chop and change and this is in the global outlook that looks bad and it is post Brexit.
So I think, what is almost more surprising is the government implemented this: Do they really think it through? Did they really consider what the
market reaction would be at this stage? Perhaps they did and this is just a big gamble and perhaps it will work. I kind of hope it does at this stage.
GIOKOS: Yeah. All right, Anna Stewart, thank you so very much for breaking that down for us. Good to see you.
Now, at the moment, the Bank of England and 10 Downing Street are pulling the British economy in opposite directions. The Bank of England is raising
rates to take money out of the economy in an attempt to stem inflation; the Prime Minister is cutting taxes to grow the economy, even though that move
could further spur inflation.
So rather than working in lockstep, the policies of the Bank of England and the government seem to be in conflict. On Friday, the new British Prime
Minister defended her plans for the most radical tax cuts since 1972.
She spoke to CNN's Jake Tapper in an exclusive interview.
(BEGIN VIDEO CLIP)
LIZ TRUSS, BRITISH PRIME MINISTER: The UK has one of the lowest levels of debt in the G7, but we have one of the highest levels of taxes. Currently,
we have a 70-year high in our tax rates, and what I am determined to do as Prime Minister and what the Chancellor is determined to do is make sure we
are incentivizing businesses to invest, and we're also helping ordinary people with their taxes.
And that's why I don't feel it's right to have higher national insurance and higher corporation tax, because that will make it harder for us to
attract the investment we need in the UK, it will be harder to generate those new jobs.
(END VIDEO CLIP)
GIOKOS: All right. Interesting hearing Liz Truss' rationale behind this policy move, and to break this down further, we have Gillian Tett, US
editor-at-large at "The Financial Times."
Gillian, great to see you, and listening to Liz Truss saying, you know, taxes are at a 70-year high. You know, debt levels are historically looking
manageable, and therefore we should be putting more money in people's hands.
It is interesting, you know, this is a counter-cyclical approach. So you know, making sure that there's more money in people's hands during bad
times. From an economic theory perspective, what is the rationale behind this? And do you think that it is very risky?
GILLIAN TETT, US EDITOR-AT-LARGE, "THE FINANCIAL TIMES": Well, essentially, she is trying to grow her way out of the whole, and working on
the assumption that if you grow the economy rapidly, then essentially the debt burden will come down quite naturally, you'll bolster confidence,
you'll get foreign investors coming into the UK, and essentially giving the economy a kickstart.
The problem or the irony is that even as she is trying to get more foreign investment into the UK and build confidence, the impact of this has been to
actually smash international competence in the UK's policymaking ability, not just because investors are worrying about the impact of higher debt,
but also most crucially, because people are starting to fear what exactly is the mechanism for policymaking? Given that you have the Bank of England
and the UK government seemingly at odds in a way that frankly, we've not seen for decades.
So, it's not just a shock of the announcement that's really damaging investor confidence, it is shock over the shock.
GIOKOS: Yes, absolutely. I mean, you know, this is sort of what you're reading into it, because it is evidence in the way the pound has been
responding. And then I guess, you know, we don't really know what conversations are happening in the background. But for us to understand,
the BoE is trying to raise rates to ensure that inflation comes down; on the other end, you're taking money -- you are putting money back in
people's hands by cutting taxes.
This might be counterintuitive, but you know, one could actually tell you, they said they are trying to grow their way out of this problem. You know,
the international community is watching this very closely saying you know, "Where to from here?" From a practical perspective, do you think that there
is method in this madness?
TETT: Well I can certainly see her desperate hope that she can try and bolster growth in this way, but the problem is that she keeps saying or
that Kwasi Kwarteng, the Chancellor keeps saying, well, markets go up, markets go down, we no need to worry.
The problem is so that if you have a situation where international investors are essentially panicking, and giving a vote of no confidence in
a way, that means that not only is the Sterling weakening dramatically, which of course, will push up inflation. But also, effectively, interest
rates are rising in the markets in a way that's going to make it a lot more expensive for anyone to borrow not just the government, but also ordinary
households, and companies, all of that together can create a mood of panic, and the type of stresses and tensions that will undermine what the Liz
Truss is going to do in terms of giving a kickstart to the economy.
And it is very telling that just this evening, "The Financial Times" website has a story about the fact that banks are essentially not offering
mortgages anymore right now. They put a hold on new mortgages, because of this sense of chaos and panic. People are starting to fear that the Bank of
England will have to raise rates a lot higher than expected to try and protect the currency, and to try and essentially bring some sense of
financial responsibility and stability. and that, of course, would undermine the very thing that the government's trying to achieve.
GIOKOS: So markets want certainty, right? And, you know, the currency obviously wants the right messaging that that is -- it is an interesting
What is the messaging that people need to hear from the BoE and also the messaging importantly, from government right now?
TETT: Well, I think people are in the market are clinging to hear three things. Firstly, they want evidence that the Bank of England and the
Treasury are -- is not working together, because they can't work together, the Bank of England is independent, but at least not working in don't
direct opposition to each other in terms of their policymaking, because that is a concern in the markets right now.
Secondly, what the markets and investors are really concerned about were the comments over the weekend from Kwasi Kwarteng, essentially indicating
that there could be more tax cuts coming pretty soon.
So the theory is that essentially, having had this big, dramatic, so-called Mini Budget, which was anything but miniature, that has caused so much
concern, that essentially, you're going to see even more fiscal hole emerge later on when the government keeps cutting taxes further.
And so what people are looking for is some kind of sense that there is going to be responsibility and a limit in what is actually happening and
some sense of predictability.
You say that markets like certainty, well, investors know, they're never going to get certainty. But they do like to have some kind of set
predictable framework. So, it's a shock over the shock that is really hurting people right now.
GIOKOS: Yes. I'm looking at what the pound is doing, you know, levels that we haven't seen since 1985 and I guess many people are saying, you know,
how much of this is going to be priced in once things settle, and they understand what government policy is going to be the real impact. What is
the sense in terms of how low the pound can go?
TETT: Well, no one knows, obviously. If the pound was to go below parity with the dollar, I think that would give a very big psychological shock,
not just to the markets, but to ordinary Brits.
Because remember, you know, it wasn't so long ago that the pound was essentially $2.00. So you've seen a very, very dramatic decline in the
value of the pound or the British economy in a fairly short space of time. So you know, all bets are off if this chaos continues. I certainly, very
much hope, it does not and it is worth stressing one more thing, the type of carnage the speed at which we've seen the currency collapse in the last
week or so, really is more (AUDIO GAP) loss of competence than what we saw even after Brexit, or after the so-called Black Monday, when Sterling left
the ERM. So, it really is shocking by the standards of history.
GIOKOS: Yes, unprecedented. Gillian, thank you very much. It is great to see you.
All right, results are in from Italy. Snap elections, we'll talk about the far-right coalition poised to take over and the unprecedented challenges it
faces. That's coming up next.
GIOKOS: The likelihood of an Italian government led by the far right is drawing mixed reaction from around the world. Nationalists within the EU
welcomed the victory of Giorgia Meloni and her party, the Brothers of Italy. The Political Director for Hungary's Viktor Orban tweeted his
congratulations and celebrated what he called a common vision. Poland's Prime Minister called it a great victory.
Others are taking a more measured response. The US Secretary of State says he is eager to work with the Italian government's shared a goals and
Emmanuel Macron says he respects the choice of the Italian people.
CNN's Barbie Nadeau has more on Meloni and her mandate.
BARBIE NADEAU, CNN CONTRIBUTOR (voice over): The leader of Italy's center right coalition, Giorgia Meloni will now likely become the first female
Prime Minister of Italy.
Despite low voter turnout, she was able to secure the majority together with far-right League leader, Matteo Salvini and center-right politician,
As Italians woke up on Monday morning, they grappled with a new reality. It was clear that the result wasn't to everyone's taste.
UNIDENTIFIED MALE: I am not really happy with the action they want to take. I think the main problem of my generation and the next generation is
the environmental problem, it is not really a priority for them.
We have a lot of problems now, economical and social, with energy crisis. So, let's see what the EU wants to do and I'm not really that confident
NADEAU (voice over): Italy, like the rest of Europe is in the midst of an energy crisis. Everyone is feeling the pinch.
This coffee bar in Central Rome has been in Lorenzo Vanni's family since 1929.
LORENZO VANNI, COFFEE BAR OWNER IN ROME: The biggest problem we have is the cost of the energy because we had an increase of five times more than
before. From 15,000, now, we add bill of 54,000.
NADEAU (voice over): Vanni wants a government that puts its people first.
VANNI: Well, we have to see if they will find an agreement among the three -- Berlusconi, Salvini and Meloni to make things for Italy.
NADEAU (voice over): Giorgia Meloni has become a symbol of hope of that change.
(UNIDENTIFIED FEMALE speaking in foreign language.)
NADEAU (voice over): This woman tells me that even though Meloni has a very strong character that could intimidate some, she likes her and she
hopes that there will be change.
We met Antonio Moska (ph). He told us it was others' weaknesses that led to Meloni's victory.
(ANTHONY MOSKA speaking in foreign language.)
NADEAU (voice over): "Brothers of Italy were able to understand voters' discontent," he says, but he also tells me, "In Italy, we change our mind
very often. We are a very divided country and very different from north to south. Today Meloni has 24 percent, but that could be 10 percent in a
couple of months."
Meloni's coalition won a clear mandate not seen in Italy for decades. She campaigned on traditional family values against irregular immigration, and
on giving dignity back to Italians.
NADEAU (on camera): There are a lot of expectations on Giorgia Meloni. This country has had 67 governments and 30 Prime Ministers in the last 75
years. In 2018, Italians voted for the anti-establishment Five-Star Movement, but that was before the pandemic and before the war in Ukraine.
This time, they voted for a very precise political direction. Now, it's up to Giorgia Meloni to unite the country and make good on her campaign
Barbie Latza Nadeau, CNN, Rome.
GIOKOS: Italy's right-wing is set to take over at a particularly perilous time for European economies. If as widely expected, Meloni does become the
next Prime Minister, she will face huge challenges. The EU's third largest economy is looking at a possible recession, high inflation, high government
debt and weak growth. Those last two in particular threaten investment and make the country more reliant on the European Central Bank. As winter
approaches, the energy crisis weighs increasingly heavier.
Meloni has promised to act quickly and avoid a spending spree that would ramp up debt.
Lorenzo Codogno is a former Chief Economist for the Italian Treasury. He joins me now from London.
Lorenzo, really good to see you. Thank you so very much. It is interesting to watch the policies, you know, under which Giorgia Meloni has rallied on,
I want you to give me a sense on the economic side of things, because this is where it is going to be interesting, as we've seen from our reporting,
is that people still have a very big worry about what this energy crisis is going to look like and people are concerned about their quality of life.
Can she allay those fears?
LORENZO CODOGNO, FORMER CHIEF ECONOMIST FOR THE ITALIAN TREASURY: Yes, you're absolutely right. I mean, the major theme of the political campaign
was the cost of living crisis. And keep in mind that Italy is coming from 20 years of effectively no per capita GDP growth.
So there is discontent. Voters are becoming less ideological than in the past. So, they are trying with different parties. It was the case of
Renzi's PD in the past, then they moved to the Five-Star Movement, then the League, and this time is the turnout for Brothers of Italy. So, we will see
whether they deliver.
Let me say that for the first time, there is a chance of some stability because the combination of Brothers of Italy and the other parties in the
coalition will have a sizable majority in both houses. And so this is a condition that bodes well for some political stability for the next five
GIOKOS: I want you to tell me about your thoughts. You know, look, we know this is center-right coalition and is made up of multiple parties, but the
neofascist rhetoric, many people are worried about in terms of what that's going to mean for Europe, what that's going to mean for Italy.
But, you know, as we've ascertained the dissatisfaction right now on the economic front seems to trump other rhetoric and issues. Is that the right
approach to take?
CODOGNO: Yes, yes, I think that it is the most important issue. It certainly was the most important issue in the campaign and now, we will see
what the new government will say, and you ask about the policies and the economic policies that the new government will introduce.
For sure, I think there will be a package to address the cost of living crisis and this will be done in the context of the budget.
Now, I think that soon after that, they will try to hint at the major themes of the political campaign, which are from, you know, some changes in
the pension system, some reduction in taxation, but certainly they cannot front load these changes.
So my guess is that again, there will be a lot of spending in the near term to address the cost of living crisis. Everything else will be spread over a
number of years.
GIOKOS: And I know that you're an economist and you look at sort of the data, but I wonder if you have a neofascist kind of ideology in Italy, and
it is permeating, you know, government policies, whether it is LGBTQ, whether it is women's rights, whether it is sort of, you know, not being
Eurocentric. Does that then impact the way that investors are going to be viewing Italy? Is that going to have a detrimental impact on investor
sentiment, number one, and in terms of its relationship with Europe?
CODOGNO: Well, first of all, I think it's probably not fair to call the party -- the Brothers of Italy as a fascist party. I think there are some
links, indeed, but these are very loose links, and indeed the most of the members of the party, younger members, and certainly they don't even know
what fascism is all about.
So I think it is not fair to call this kind of new group that is in power now, a fascist group, first of all. Secondly, I think these guys will be
tested on facts and policies, not programs and promises. And this is quite important, so we will see.
I think financial markets and investors in the global community will closely look at this new government to see what it is able to deliver,
because that is crucial.
In terms of economics, you are right that there are some non-economic social aspects that might be quite important, but I think the leaders of
these parties said very clearly that they are not going to change abortion rights, for instance. So, they're not going to change the right of gay
people to marry and this has been in Italy in too long and they are not going to change it. For sure, they are not going to advance on these
issues, which was probably on the pipeline, but for sure, they're not rolling back past reforms.
Again, the focus will be on economics, and it will be on the way they address the cost of lack of energy, and the structural needs for Italy.
I think in my personal view, more than the near term reaction, it would be important to see whether they have the ability to address long-standing
structural issues of the Italian economy. By doing so, you touch on lobbies, interest groups, and we will see whether this government will have
the strength to address these issues that nobody else has been able to address with conviction and the effectiveness that is needed.
GIOKOS: Yes, and Lorenzo, you're absolutely right, to be measured on the policies which they implement going forward. You know, something we'll be
keeping a close watch on.
Lorenzo Codogno, thank you very much for your insights. Great to have you on the show.
All right, moving on now. We are going to be covering the floods in Pakistan right after the break.
Stay with CNN.
ELENI GIOKOS, CNN ANCHOR: Pakistan is losing a fifth of Finance minister in less than four years. Miftah Ismail says he will soon step down from the
role amid an economic crisis that has been exacerbated by devastating flooding. On Saturday, the World Bank pledged $2 billion in aid to
Pakistan. Its people continue to bear the brunt of unprecedented floods that have left nearly a third of the country underwater. Aid agencies now
warned the disaster is only beginning as children suffer the growing risk of waterborne diseases.
Correspondent Anna Coren has this report on the devastating effects and the warning that it includes. Images of children in distress, some of whom
ANNA COREN, CNN CORRESPONDENT: In a scorching heat, a couple carry their listless child towards a packed wooden boat, faring sick villagers through
the floodwaters. The mother grabs her daughter and finds a place to sit. The eight-year-old is burning up. She's got a high grade fever and has
become unconscious explained to mother. Let's go, let's go, yells a villager.
The mother then wets her daughter's brow with the very same water that has made her so sick. Pakistan's months long catastrophic floods that inundated
one-third of the country affecting 33 million people are still causing unspeakable suffering. The monsoonal rains may be over. But the volume of
stagnant water is now causing a health crisis, especially in Sindh, one of the worst hit provinces in the country southeast where cases of cholera,
dengue and dehydration have surged.
AADARSH LEGHARI, COMMUNITY OFFICER, UNICEF: I have seen families and children consume the very flood water that they are surrounded by. And that
is because they don't have access to any other water source.
GIOKOS: As they reach the shore, it's a race against time. The nearest hospital is hours away by rickshaw, and her daughter's condition is
worsening. These young mothers have found medical care, although their newborns barely have the energy to cry. They've come to the Nawabshah
Mother and Child Hospital where the critically ill are taken to the resuscitation ward.
A baby's chest slowly rises and falls as oxygen pumped through a tube helps this infant to breathe. Lying beside it, the body of another baby that
didn't make it. For the doctors here, this is agonizing work. Up to a dozen children are dying each day from flood related illness, which is unheard of
in this small hospital.
This girl has cholera, says Dr. Nazia, their bodies go into shock. We try to rehydrate them with fluid they've lost.
One of the four children sharing this bed appears to be going downhill rapidly. Heart monitors are placed on the chest her five year old, Iqra
(ph), who is severely stunted. Her heart is slowly beating but her eyes glaze over. Minutes later, she dies. A nurse prepares her tiny body for an
Islamic burial, as her sister and grandmother weep outside.
Of the more than 1,500 people who've died since June from Pakistan's climate change-induced catastrophe, more than one-third have been children.
Millions upon millions remain homeless, having lost homes, crops and livestock. Rani (ph) is one of them. She wonders if the waters will also
take her youngest three-year-old Abbas (ph) who is suffering from malaria.
Death is a better option for us, she says. We accept that one should not have to live like this.
GIOKOS: All right. So backlash against Russia's military call up routes war in Ukraine is building. Finland's border guard says more than 16,000
Russians entered the country over the weekend. Saturday set a record for land border crossings. It's a similar scene at Russia's border with
Georgia. Long lines as men flee the prospect of being drafted.
Social media posts from inside of Russia show protests erupting in places like Dagestan Region. The area is predominantly Muslim and some activists
say ethnic minorities are getting conscripted in disproportionate numbers. Ben Wedeman joins me now from the Eastern Ukrainian city of Kharkiv.
Ben, thank you so much for joining us. And why are we seeing this partial mobilization in Russia, you know, Moscow has got its tentacles very much
entrenched in its controlled territories in Ukraine. And it's all about the referenda. Could you give us a breakdown of what is going on?
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Basically, these four regions predominantly occupied by the Russians are conducting a five day
referenda where they will decide at least, the facade, behind the facade, they will be deciding whether to become part of Russia. That will
completely change the equation because once that happens, instead of Russian troops in Ukraine, it'll be Ukrainian troops fighting within as far
as Moscow is concerned, are Russian territory. And we could see what is currently being called a special military operation by the Russians become
a war because it'll be a war inside the land of the motherland, so to speak. But as these referenda are going on, the fighting is intensifying
here in the Kharkiv Area referenda not withstanding.
(BEGIN VIDEO CLIP)
WEDEMAN: For a few loaves of bread, the residents of Kupiansk risk their lives. Ukrainian forces retook the city about two weeks ago but the
fighting is far from over. Yulia (ph) describes it in one word, intense. That's the echo of cluster bombs falling not far away.
Sometimes I'm scared, says Danilo (ph), over the sound of nearby shelling, sometimes I don't care.
These are the few people left in Kupiansk. This city, even though theoretically the Russians have left, the Russians are just across the
river. And in fact, according to the soldiers here, there are still Russians inside Ukrainian-controlled part of the city.
Russian forces took control of Kupiansk with little fighting in the first days of the war. It served as the administrative center for the Russian
occupied part of the Kharkiv Region. Pro-Russian sympathies linger on here. The Russians paid salaries and pensions, and the recent Ukrainian counter
offensive turned the city into a war zone, sparking resentment against both sides.
They're wanting the same, says Yuvgeni (ph), the mood of the population is shocked. It's too early and too dangerous to begin clearing away the
rubble. Wreckage still scattered in the streets.
Basically there's a fairly constant (inaudible) incoming and outgoing artillery and rocket fire here.
An hour's drive away in the town of Izyum, no shelling, but shell shock still shows on the faces of people waiting for food. The fighting has moved
on, the scars it left deep. They hit my home, says Yuvmila (ph), war spares no one adds Catirina (ph).
The local fire station has become a warehouse for supplies donated by a town near Kyiv. In her grandfather's arms, Alena (ph) recalls intense
bombing. It killed our dog, it hit the roof, we were hiding in the basement, she says.
Back in Kupiansk, tank rumbles toward the front. The battle rages on.
WEDEMAN: And of course today, we were in another town in the Kharkiv Region where the battle had just finished. We saw -- we counted 22 dead Russian
soldiers and there were destroyed Russian tanks, all scattered around, as well as perfectly working Russian tanks that the Ukrainians are now going
to turn on the Russians themselves. Eleni?
GIOKOS: All right. Ben Wedeman, thank you so much for that report. And that's it for "Quest Means Business." I'll be back at the top of the hour
as we make a dash for the closing bell. Up next, "Quest's World of Wonder."
RICHARD QUEST, CNN ANCHOR: It is summer in Sweden.
And out on Stockholm streets is a lively collective spirit in the air. The warmth brings out a latent exuberance that's hibernated through the cold
winter. There is a different feel and a vibe.
I first came to Stockholm, it was July 1980. And over the last 40 years I've been here many times. The food, the people, the place, as I hope to
show you, I adore.
Here, community is everywhere. Indeed it has a name, they call it the Swedish model, a belief that working hard remaining humble and staying
focus will create a better life. There's probably no entity in Sweden that crystallizes this spirit better than the band that once ruled the world.
The rest of the world says ABBA they say ABBA.
ABBA, four performers, five decades. It all began one turbocharged Saturday night in 1974.
ABBA won the Eurovision Song Contest with, of course, "Waterloo."
Launched into international superstardom, their songs will become part of our lives. Everyone knows a bit of ABBA. Money, money, money, always sunny
in a rich man's world.
So I come to this museum because if something this good has lasted this long, I need to discover what part of being Swedish played in all of this.
And to do that, I must leave Stockholm.
UNIDENTIFIED SPEAKERS (in unison): Welcome to Vastervik.
QUEST: This is beyond obvious. The man from Vastervik who wrote some of the biggest songs like "Dancing Queen," "Mamma Mia," and "Fernando."
BJORN ULVAEUS, ABBA MEMBER: I remember all the shops here. There was a little grocery shop down there. I used to work there when I was 12 as an
errand boy, with a bicycle and my mother's shoe store.
QUEST: In Vastervik, at a music festival, here is where the magic began.
This is all pre-ABBA?
ULVAEUS: Yes, all pre-ABBA. When I met Benny, we were going to start our military service. So we had a party, last night in freedom. And when the
sun came up, we were sitting under a tree in a park singing Beatles songs.
QUEST: With Benny and Bjorn co-writing, it was the arrival of As, Agnetha and Anni-Frid that lit the torch paper that sent them into orbit.
All the money and success has led to this way of life, peaceful days on the waters that surround the hotel that Bjorn has built here.
Oh, now we say perfectly, why did you want to build such a property?
ULVAEUS: This sounds cheesy but I felt, you know, I can give something back to this town.
QUEST: What's the guiding philosophy on that?
ULVAEUS: Nowadays, the guiding philosophy is that I have to be curious about something. I have to have a vision of something. And I have to, you
know, want to fulfill that vision.
QUEST: Just retire.
ULVAEUS: No, no, no, not for me. No, I can't do that.
QUEST: You look like in a dirty world.
ULVAEUS: Yes, it's a dirty world.
QUEST: In Sweden, you were success like a loose cloak. There's a humility, a downplaying of that what you've done. I begin to understand this in towns
UNIDENTIFIED MALE: Hello. Can my mom take a picture with you?
ULVAEUS: Yes, yes.
QUEST: How far did the growing appeared in still in you something that enabled the success.
ULVAEUS: It has kept me grounded very much. I think it would have been totally different had I grown up in a big city like London or New York, it
would have been completely different. Much easier to take off and a neverland again, which happens to a lot of people with great success.
QUEST: And the ultimate irony, how old you now?
ULVAEUS: I'm 77 now.
QUEST: Come back, and then come back, and then come back.
ULVAEUS: Yes, it's great. I think it's a wonderful story that can actually happen.
QUEST: The wheel has turned.
ULVAEUS: Yes, yes.
QUEST: I'm not easily awed by famous people, but beyond all this has me in his grasp. On my audience with Swedish pop royalty is only just beginning.
Take it, maestro.
His "Dancing Queen" is iconic, I've sung it in more clubs and parties than a decent. Now, can I get to sing it with Bjorn.
QUEST: My first full day in Stockholm, and the weather just keeps on giving. There are hidden gems of delight everywhere.
There you are. That was prophetic.
Skansen, it's the outdoor museum nestled in the center of the city. It's all of Sweden all in one place. Rural city, traditional farming, a
celebration of everything Swedish.
Is that kulning?
UNIDENTIFIED FEMALE: Yes, it is.
QUEST: I'm intrigued by this kulning. I'm told that kulning is a way that women in the fields would call in the cows to be milked, and communicate
with husbands and farmhands in the fields far away. It is both a practical skill and a musical talent. It requires a very specialized teacher. Maria
Misgeld teaches at the Royal College of Music in Stockholm. You doing
MARIA MISGELD, FOLKSINGER: You know, in classical singing, they are ooh doing like this.
MISGELD: Yes, ooh. So it's a very big sound. Here you do the opposite (sounds) like a small child, so you don't need to put down so much pressure
in a small. Hello, hello. Hello. Can you talk to a small child like this?
QUEST: Hello, hello.
MISGELD: Yes, very good.
QUEST: We can talk like a small child.
MISGELD: Very good. Yes, yes, yes.
QUEST: Yes, yes, yes. What happen next?
Things are beginning to get little weird.
(MAKING ANIMAL SOUND)
MISGELD: I think we should just try to call, so you have to reach somewhere. Oh.
QUEST: (Making sound).
MISGELD: Very good. And now we can listen to the echo or the after sound.
QUEST: (Making sound).
MISGELD: Very good. (Making sound)
QUEST: (Making sound).
MISGELD: Very good.
QUEST: (Making sound).
MISGELD: Good, very good. I can hear the resonance in the forest.
QUEST: (Making sound).
MISGELD: (Making sound.)
QUEST: (Making sound).
MISGELD: (Making sound.)
QUEST: (Making sound).
MISGELD: Perfect. (Making sound.)
QUEST: (Making sound).
I'm starting to worry the neighbors will call the police, convinced someone's being throttled in the woods. Maybe I need to turn it down a bit.
MISGELD: So a little bit less power I think.
QUEST: (Making sound).
MISGELD: Super duper nice. Very nice.
QUEST: Maria is either tone deaf or generously kind? No matter, there's one musical taste I want to know about.
Did you like ABBA?
MISGELD: Yes. I love ABBA.
QUEST: I was trying to work out if we can kulning in ABBA but I can't think of how you would do "Dancing Queen."
MISGELD: (Kulning "Dancing Queen").
QUEST: Oh my god. We just committed about 15 different offenses.
MISGELD: So it's possible to do it, to kul ABBA.
QUEST: It is, because it where the cows would come.
MISGELD: I think they would.
GIOKOS: Hello, I'm Eleni GIOKOS and it is dash to the closing bell with just two minutes away from the close in Wall Street. Now, the British pound
has regained some value after hitting a record low against the US dollar. It is the latest worrying sign for the skittish investors. As you can see,
the pound there sitting down was nine tenths of a percent. The Dow was up for an instance this morning but it is set to close about 1% lower. It is
down about 300 points. As you can see, losses are slightly less on the S&P 500 and the NASDAQ is sitting flat currently. But overall, a negative day.
Now, UK Prime Minister Liz Truss plans to slashed taxes and hikes spending. Meanwhile, the Bank of England is tightening its policies to fight
inflation. Financial Times editor Gillian Tett said the bank's job is now getting harder.
(BEGIN VIDEO CLIP)
GILLIAN TETT, US EDITOR-AT-LARGE FINANCIAL TIMES: Banks are essentially not offering mortgages anymore right now. They put a hold on new mortgages
because of this sense of chaos and panic. People are starting to fear that the Bank of England will have to raise rates a lot higher than expected to
try and protect the currency and to try and essentially bring some sense of financial responsibility and stability. And that, of course, would
undermine the very thing that the government's trying to achieve.
(END VIDEO CLIP)
GIOKOS: Right back to the US and we're still looking at those markets, the Dow is officially in bear market territory. What you're seeing right now is
the components on the Dow mostly in the red. Walmart's bucking that trend it's up about a percent. You can see Apple there as well, 3M doing good.
And then at the right at the bottom, you've got the oil majors coming under pressure. Boeing also taking a fall as well.
Well, that's the dash to the bell, I'm Eleni Giokos. The closing bell is ringing on Wall Street's. "The Lead with Kasie Hunt" starts now. Stay