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Quest Means Business
Russia's War On Ukraine; White House Responds To Russia's Proclaimed Annexation; Hurricane Ian Makes Landfall In South Carolina; Suicide Bomber Kills At Least 25 In Kabul Education Center; Ketanji Brown Jackson Takes Ceremonial SCOTUS Oath; Brazil's Presidential Candidates Trade Barbs During Debate. Aired 3-4p ET
Aired September 30, 2022 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS.": It is the last day of the quarter and you can see the numbers. The Dow is down
heavily today, but that means it's down some five percent for the quarter over all. Markets are deeply unhappy, losses right across the board,
although the Dow is having the worst of it.
Those the markets and the main events of the day: Russia announces it is annexing nearly a fifth of Ukraine, a move the EU calls illegal. In a
moment we'll be at the White House for a briefing of the National Security Agency.
High energy prices from the conflict zone are helping drive Eurozone inflation to a record 10 percent.
And Hurricane Ian landfall again, this time, the destruction in South Carolina.
Tonight, I'm live in London on Friday, September 30th. I'm Richard Quest and in London, I mean business.
A very good evening to you. Let me just update you with what we are expecting in the next few moments. There is to be a briefing at the White
House by the NSA adviser and that is due to start any moment now.
The reason for today's briefing is because today we saw the most serious escalation since the start of the war in Ukraine. Now, that's the way
NATO's Chief put it, the most serious escalation and it comes around because President Putin has proclaimed vast swathes of Ukrainian territory
now to be part of Russia.
The ceremony in which it all took place, was laden with pomp, pretension, and hyperbole. Also a great deal of lies according to some. Mr. Putin said
Moscow is annexing four Ukrainian regions. In doing so, he welcomed leaders from Donetsk, Luhansk, Kherson, and Zaporizhzhia with a group handshake
that you're seeing now as they sang the Russian National Anthem.
This makes up nearly a fifth of Ukraine's territories.
Tonight, those festivities continue. There was a concert in Red Square in Moscow. It is believed many of the people who say were bused in for the
occasion. President Putin in attendance. The annexations follow hasty referendums, sham referendums condemned by the US and allies as illegal and
held at gunpoint. However, President Putin has declared those areas Russian for the rest of history.
(BEGIN VIDEO CLIP)
VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): I want the Kyiv authorities and the real masters in the West to hear me and remember, those
people who live in these four regions are becoming our citizens forever.
We are calling on the Kyiv regime to immediately ceasefire and end all military actions.
(END VIDEO CLIP)
QUEST: Now, we will be going immediately to the White House as soon as this news conference begins. But I do want to show you, in case you're not
as familiar, I certainly needed to remind myself exactly the regions. These are the four regions of which we are talking about Crimea has already been
The issue is you've got two of them, Luhansk and the Zaporizhzhia regions, you've got two of them, that is all ready, if you like occupied by Russian
troops after the invasion.
Many of the areas that Russia are now claiming are active war zones, outside of its full control, for example, you've got this region, you have
this one down here, all outside the control, which begs the question, how Russia will indeed even defend these territories if it doesn't actually
have control over them.
The problem is, President Putin says that it will defend all of these regions, all of them, raising the risk of nuclear retaliation. And Ukraine
says it's nearly encircled Russian troops in the town of Lyman, which you can also see here on the map just over here and that poses a direct
challenge to the Kremlin. The issue substantially comes down to this.
Matthew Chance with me, but Matthew, the issue substantially comes down to this, if Russia is saying all of this is now sovereign Russian territory,
how far will Putin go? As Ukraine continues its advanced to retake the area?
That's the question for Matthew Chance. He is with me.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it's a good question, Richard.
Look, I think one of the reasons that Vladimir Putin has brought forward this annexation is because he couldn't confront Ukraine on the battlefield
with his conventional forces. He was not able to hold back the tide of a Ukrainian military that is well-motivated and well-armed now with weapons
from the United States and other Western allies and they routed his forces in the northeast of the country. And of course, as you have just been
mentioning, there is chance that they could continue that advance in areas that have now been formally absorbed into the Russian Federation.
So Putin had to do something, and so what he's done is he has raised the stakes. He has done two things. He sent a powerful message to his domestic
audience and to the international community, that he is not going to back down. He is going to double down and he has raised the stakes on the
battlefield, because he has threatened to potentially use or has hinted heavily the potential to use nuclear weapons to defend Mother Russia.
It's always been Russia's strategy. What's different here is that he has annexed this portion of Ukraine and he said, that is now Mother Russia. We
could fall back on our nuclear arsenal to paraphrase, him if that territory is threatened.
So, we're in a very dangerous position.
QUEST: Right. Now, one of the things that I know -- I've talked about before on this program is between current levels of conventional force
engagement and nuclear, the view that there are other missiles, heavier weaponry that Russia has not yet deployed. Is it there a potential that
that would be now starting to be used if it is claimed against sovereign Russia?
CHANCE: You see, I don't know how much of a reality that is. I mean, certainly we know that Russia has spent billions upon billions of dollars
supposedly developing state-of-the-art weapon systems on the land and in the air over the past decade, but we haven't seen them use to a very large
extent in this conflict so far, and it might be that they're keeping them in reserve for a case like this or it might be that they just simply lack
the coordination sort of skills to deploy those resources effectively. Who knows?
But I can't help suspecting that it's a slight myth that Putin has this massive, vast well-armed army waiting in the sidelines ready to be ordered
to advance into Ukraine. I suspect that if he had those forces on tap, he would have turned that tap on some months ago before he started losing
ground and got essentially kicked out of Kyiv.
But, you know, obviously, we will see what his next step will be. It's a big question.
QUEST: Matthew Chance, who is in New York. My apologies that I'm not there to be sitting opposite you and talking to you face-to-face. Thank you, sir,
for joining us this evening.
Nick Paton Walsh is with me. And, Nick, you and I talked last night. So, the events of today, we knew we're going to happen and forgive me, if I
interrupt you because we are waiting for Jake Sullivan to talk about the events of today. He is doing other housekeeping matters at the moment at
the White House.
As soon as he talks about Ukraine, we will have him and then we'll get your analysis.
But for the moment, while we wait for this, Nick, how -- I mean, what's the reality tomorrow of what's happened today?
NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the reality today is still reality. Just because Vladimir Putin takes appointed
officials by Moscow who were in partially --
QUEST: I do apologize, Nick, you had barely got talking. I apologize, sir. We need to go to the White House.
JAKE SULLIVAN, NATIONAL SECURITY ADVISER: . aspect of this process was pre-staged and falsified under orders from the Kremlin.
The sham referenda were held at gunpoint. Ukrainian civilians were forced to cast ballots through coercion, intimidation, and in some cases under the
watch of armed guards. Saying that it somehow reflects the will of the people is an absurdity.
The United States will never recognize these actions. The world will never recognize these actions and we will stay the course as the President told
you earlier today.
We have built, led, and maintained an extraordinary and coordinated response with our allies and partners and that was response will continue.
As President Biden said, we will not be deterred.
So what does that mean specifically in reaction to what has just happened? response will continue, as President Biden said, We will not be deterred.
So what does that mean specifically in reaction to what has just happened?
First, as we saw from the Treasury Department and as the President and underscored, we are sending a clear warning from the United States
government, supported by all of our G7 partners, we will sanction and impose export controls on any individual, entity or country that provides
political or economic support to these attempts at annexation.
We have put in place authorities to enable us to do that rapidly and efficiently. We are also announcing new sanctions today that target
additional Russian government officials and leaders, including State Duma members who are accomplices in these fraudulent actions and including the
Central Bank Governor.
We are also sanctioning Russian and Belarusian military officials, and we have specifically targeted defense procurement networks, including
international suppliers supporting Russia's military industrial complex. Second, we will continue to provide military equipment so that Ukraine can
defend its territory and its freedom.
Today, President Biden will sign legislation from Congress that contains more than $12 billion in additional funding for Ukraine, and we are
grateful for the continued support. There is no stronger, more bipartisan rebuke of what Russia has just done, no more timely rebuke, and no more
assertive statement that we can make through resources and not just through words that we are going to continue to help Ukraine defend its territory,
and to de-occupy those parts that Russia has occupied.
Earlier this week, we announced a significant new billion-dollar arms package which included 18 new HIMARS for Ukraine as part of our long term
commitment to strengthening Ukraine's Armed Forces over the years ahead, and we expect to have another announcement of immediate security assistance
to announce next week.
Next, the United States and the international community have been crystal clear that we will use diplomatic tools at our disposal to fundamentally
reject Russia's attempts to take its neighbors territory by force.
Today, the United States is supporting a resolution at the UN Security Council to condemn these sham referenda and to call on Russia immediately
to withdraw its forces from Ukraine. If Russia seeks to shield itself at the Security Council, the United Nations will work with partners around the
world to take action next week at the UN General Assembly.
Leaders around the world have spoken out about what's at stake, the independence of the democratic nation of Ukraine, the principles of
sovereignty and territorial integrity, and the very foundation of the United Nations Charter and the modern international order.
As the Secretary General of the United Nations said yesterday: "It must not be accepted." And it will not be accepted. To put it simply the regions of
Donetsk, Luhansk, Kherson, and Zaporizhzhia remain Ukrainian territory. Ukraine has every right to continue to defend its sovereignty, which the
people of Ukraine are doing bravely and courageously every day with the support of the international community and the United States.
For our part, under President Biden's leadership, we will support them at every step along the way, for as long as it takes. And with that, I'd be
happy to take your questions.
QUESTION: Ukraine is seeking accelerated membership in NATO. Is that something that's possible or something you would seriously consider?
SULLIVAN: The United States has been clear for decades that we support an open door policy for NATO. Any decision on NATO membership is between the
30 allies and the countries aspiring to join.
Right now, our view is that the best way for us to support Ukraine is through practical on the ground support in Ukraine, and that the process in
Brussels should be taken up at a different time. Yes.
REPORTER: Thanks, Jake --
QUEST: And there we are just going to leave the White House. We've heard the gist of what's necessary.
Matthew Chance is with me.
Matthew, to circle back on what we heard. More sanctions seems to be a -- defense sanctions, third-party military supplies, sanctions, and quite a
lot more money, $12 billion in funding for the country, and reminding us that a billion extra was given for armaments.
So, both sides digging in. But I do wonder, with these new sanctions, there's nothing sort of mind blowing about them that's been announced.
CHANCE: No, it is actually getting quite difficult now, I think to find sanctions that are going to have any kind of impact at all, given how many
sanctions, how many rounds of sanctions that have been imposed by the United States and others in the international community against Russia. It
doesn't -- its action in the absence of any other sort of levers to pull, but it doesn't seem to be having any tangible impact on what Vladimir Putin
I mean, this annexation today is a powerful message that no matter what the consequence is, this is the path that Russia under Vladimir Putin is going
to go down and these statements in the White House, I don't think are going to change that.
QUEST: That's a very sobering analysis of the situation, which doesn't leave many optimistic options.
CHANCE: No. And of course, the other thing that was announced is this big package, $12 billion or so worth of additional military aid. You know, so
the United States is doubling down on its military commitment to Ukraine.
I fear that the problem at the moment is that both sides feel or hope that this can be resolved on the battlefield, that, you know, there's going to
be a victory by Russia or a victory by Ukraine, and that's going to be the end of it. But I think the -- a lot of wars, most wars, all wars, arguably
sort of end at the negotiating table, but there is no sign at this stage of any negotiations having any prospect of even starting.
You know, neither side -- neither the Ukrainians and then Western backers or Russia, are able to find common ground at this point to even talk about
the possibility of a ceasefire or a peace deal and that is what is most worrying, I think.
QUEST: Matthew, I'm grateful. Thank you, sir.
To the United Nations now, where at the moment, the UN Ambassador is speaking, as the Council considers a resolution condemning Russia. It calls
on members not to recognize any change in Ukraine's territorial status, and on Russia to withdraw its troops.
John Herbst is with me. Ambassador John Herbst, US Ambassador to Ukraine, now Senior Director of the Atlantic Council's Eurasia Center.
So, you heard -- I'm sure you were listening closely to what Matthew Chance was just saying. Bearing in mind Matthew says that, Putin did this knowing
sanctions, and you hear the sanctions that have been offered. They don't seem terribly big, considering what's happened.
AMBASSADOR JOHN E. HERBST, US AMBASSADOR TO UKRAINE: The sanctions are not big, but I don't think they're the main event.
We are now in the realm of big time political theater. Putin has resorted to this annexation, because his troops are failing on the battlefield. He
is hoping he can bluff with a nuclear threat to Ukraine and the West as Ukraine continues this counteroffensive, and they are on the verge of
encircling Russian soldiers around the town of Lyman, which will be a major new tactical defeat for Putin.
Putin is hoping his nuclear threat will do what his troops in Ukraine cannot do, which is stop Ukrainian forces. I believe he will fail in that
The United States has responded strongly to the threats of nuclear escalation and he can really cannot afford to use nuclear weapons, although
we can't rule it out.
QUEST: Right. But what about all the other heavy armaments that he has that is arguably the bigger missiles that have not yet been deployed.
HERBST: He has deployed just about everything he has got short of weapons of mass destruction, but not as fully as he might. We have seen in the last
week or two, greater Russian concentration of fire on Ukrainian infrastructure, and more that may well be in the cards. But that's not
going to impact in any significant way, the battlefield.
The Ukrainian people understand that if Putin wins, they will be subject to the torture, to the rape, the abduction of children, which has
characterized the Russian occupation of Ukrainian territory.
QUEST: Right. This idea of the four regions now being sovereign Russian territory, it obviously advances the argument that any attack against that
is an attack against Russia. But I come back, I suppose it is the same question in a different sense: How far can Ukraine attack these areas
without Russia having to go even further and more extreme?
HERBST: I think it's very important to have an historic perspective on this conflict.
Russia declared Crimea Russian sovereign territory over eight years ago. Ukraine has conducted several strikes on Russian sovereign territory over
which Putin extended the Russian nuclear umbrella. Russia did not respond with weapons of mass destruction. So, we should not assume if Ukraine
continues its counteroffensive, and it will, I think, and takes back additional territory and as I just mentioned, Lyman will probably fall in a
very embarrassing tactical defeat for Putin in the next couple of weeks.
QUEST: So, I just want to one quick point with you. Last night, I was in Warsaw and one of the -- obviously the Polish people have been doing such a
phenomenal job in terms of humanitarian assistance, but one of the big problems is as winter comes, and prices go through the roof, and suddenly
lights are being switched off and heating is turned down or off completely. How worried are you about the European citizens, if you will, willingness
to forbear the hardship over the winter?
HERBST: I was very concerned about this four months ago, I am much less concerned today. Seventy percent of German people say that even with higher
gas prices, Germany must retain its support for Ukraine and Germany has been kind of a weak ally on the Ukraine-Russia issue, historically.
The EU and the US have done a good job finding alternatives to Russian oil and gas. The EU has done a good job figuring out how to parse out the pain
among its members. Europe will have a tough winter, but it's not going to change their support for Ukraine and against Russian aggression.
QUEST: Ambassador, I'm very grateful, sir. Allow me to wish you a good weekend in very difficult circumstances for one and all.
HERBST: You, too, sir. Thank you.
QUEST: I'm grateful for your time. Thank you.
What a week it has been not only turmoil in the financial markets and the annexation, and you have the most dramatic, catastrophic, deadly loss of
life and destruction as Hurricane Ian now makes landfall in South Carolina. We will be there in South Carolina, the latest location and victim of this
QUEST: Hurricane Ian has now made its second landfall, this time in South Carolina and as it went out from Florida and up over the ocean, it regained
strength. The storm first hit south of Myrtle Beach. There the winds were 140 kilometers an hour. A State of Emergency has been declared.
The storm is already causing destruction, strong winds and waves. Multiple piers as you can see on these pictures have just been blown away.
In Florida where it had been and gone, but only now the grasp of devastation. At least 21 people are believed to have died and the
expectation is that will go higher. There is no running water in some areas. Debris difficult to access and worries about safety from downed
Look at this one scene. Boats lifted from the water and thrown onto the shore.
Now President Biden has pledged support for the victims of the storm.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: The Federal government will cover -- is covering every cost, 100 percent of the cost to clear the
massive debris left in the wake of the hurricane in these counties. It all needs to be cleared out for communities to begin the hard work of trying to
get back on their feet.
(END VIDEO CLIP)
QUEST: If you want to get an idea, look at this. Hurricane Ian left a trail of destruction. For instance, Sanibel Island where the storm
destroyed entire sections of a causeway that normally connects the Barrier Island to the Mainland. It is from there that Bill Weir reports.
BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT (voice over): After Ian's violent visit, this is what's left of the causeway bridge from Mainland
Florida to Sanibel Island and this is the now unpassable bridge to Pine Island.
So for residents of both, boats, and helicopters are the only exit options. And while Coast Guard Blackhawks and Chinooks buzzed over the Barrier
Islands on the grim day after, two of the only boats in this part of the Gulf carry civilian volunteers from the Cajun Navy. Those good old boys
with bass boats and big hearts.
UNIDENTIFIED MALE: Give us the name of an individual or tell us somebody to go pick up, we'll try to go get them.
WEIR (voice over): And a newer outfit known as Project Dynamo, led by a former military Intelligence officer more accustomed to saving Americans
from Russians in Ukraine or the Taliban in Afghanistan.
UNIDENTIFIED MALE: When Americans aren't in trouble in bad spots, usually we do war zones and conflict zones, but Hurricane Ian qualifies.
WEIR (on camera): And you're named after Churchill's operation?
UNIDENTIFIED MALE: Correct.
WEIR: I get the --
UNIDENTIFIED MALE: Troops of Dunkirk.
WEIR: Troops of Dunkirk.
UNIDENTIFIED MALE: And now here we are, we're going to rescue some people off of Sanibel, which is cut off from the world right now.
UNIDENTIFIED MALE: So it's very apropos.
UNIDENTIFIED MALE: We are going to help people out if they need help.
WEIR: You need help?
UNIDENTIFIED MALE: You want to get out of here?
UNIDENTIFIED MALE: I am in the bedroom.
UNIDENTIFIED MALE: Just a minute, we will come up. We will come there.
WEIR (voice over): We follow the crowd for help ashore on Sanibel to find the gentleman eager to accept the boatlift, but unable to convince his
UNIDENTIFIED MALE: We are going. We are going.
UNIDENTIFIED FEMALE: To where?
UNIDENTIFIED MALE: Fort Myers.
UNIDENTIFIED MALE: The bridge is out. The bridge is knocked out.
UNIDENTIFIED FEMALE: I'm not -- I am ready to go.
WEIR (voice over): A cursory stroll around this part of Sanibel reveals plenty of hazards, like the hiss of natural gas spewing from a broken tank,
but in one of the most coveted zip codes in Florida, the construction mostly held up, which is in stark contrast to Pine Island.
WEIR (on camera): Look at this one. Absolutely flattened, especially the mobile homes of the working class and retirees living in St. James City.
UNIDENTIFIED MALE: Hey, man, are you okay? Because your daughter called us.
UNIDENTIFIED FEMALE: I can imagine.
WEIR (voice over): When their phone cut out early in the storm, the grandchildren of Nancy and Robert Sharon (ph) were so scared, they called
the Cajun Navy and Project Dynamo and begged them to go check for proof of life.
NANCY SHARON, RESIDENT): I heard that they weren't going to do anything after the bridge closed down. But my granddaughter is in Ohio and she was
crying hysterical when I talked to her on the phone. "We were thinking that you guys were hurt," and I said, "No, there's no service. There is no
WEIR (on camera): That's the thing, the uncertainty bring so much fear.
SHARON: I knew it and that got me more worried than what was going on at the time. Because I knew my family was worried.
UNIDENTIFIED MALE: It's terrible what we're going through. There's a terrible set of circumstances. The destruction is unbelievable. The
suffering is going to be bad. Hundreds of people are dead right now. We just haven't found them yet.
So this is true carnage. It's a warzone.
UNIDENTIFIED MALE: One, two, three.
UNIDENTIFIED MALE: And you're up.
ROBERT SHARON, RESIDENT: Thank you, gentlemen.
UNIDENTIFIED MALE: But at the same time, I'm really happy that we can be here to help.
QUEST: The hurricane -- and we'll follow it of course as it goes across the Carolinas.
Tonight or today, the UK Prime Minister met with the country's financial forecaster a week after the much criticized new budget. So, where do we
stand tonight with the pound?
QUEST MEANS BUSINESS.
QUEST: Hello. I'm Richard Quest. We have a lot more QUEST MEANS BUSINESS tonight. Take Liz Truss's economic plans which were roundly rejected just
about everybody. Now the P.M. faces their own M.P.s with the Tory party conference. We'll talk about that with Anna Stewart.
Eurozone inflation hits record levels and that's the risk of a longer deeper recession. We'll only get to that after I updated you with the news
headlines. Because this is CNN and on this network the news always comes first.
Base in Kabul in Afghanistan are blaming a suicide bomber for a deadly blast inside an education center. Hospital said at least 25 people were
killed and 50 people were hurt. The center's located in a mainly Hazara neighborhood, one of the country's ethnic minorities, and I witnessed that
many of the victims were young women.
Yes. Supreme Court Justice Ketania Brown Jackson was so ceremonious I should say inducted to the nation's highest court. It was an event attended
by President Biden and the Vice President Kamala Harris. The courts have turned opens on Monday. Jackson's been hearing cases since June.
Two men wanting to leave Brazil traded barbs in a heated presidential debate on Thursday. The election is on Sunday. The far-right president Yair
Bolsonaro is currently lagging in the main opinion polls behind the left- wing former president Luiz Inacio Lula da Silva.
The British Prime Minister Liz Truss and her chancellor are resisting calls for an early forecast of the fiscal plan that was introduced just last
week. The one that got rid of the pound -- that got rid of higher rate of income tax. Now, Liz Truss and Kwasi Kwarteng met on Friday. The U.K.'s
independent financial forecaster. The two announced huge tax cuts, heavy borrowing and there was seemingly not a review by the Office of Budget
We know that they looked at it. We do not know what they said. And they've -- now we know that they're not going to release the report, even though
they'll get it in a few days time.
But they're not going to release it until November and the main budget or the main fiscal statement. The plan was met with Swift condemnation from
around the world. In the United States, the commerce secretary weighed in. She -- describing the policy of creasing spending isn't one that is going
to fight inflation in the short term. Pretty damning stuff. Well, throw in the IMF. They're not usually. We do not recommend.
That's a polite IMF way of saying no. There. No. As for the mortgage banker, Robert Gill, he said it was the stuff of banana republics. And I
think the best quote for me, is what President Obama's former top economic adviser, Jason Furman said. This, I think, just absolutely sums up and
we'll talk with Anna Stewart about this. He said, I can't remember a more uniformly negative reaction to any policy announcement by both economists
and financial markets than the U.K.'s policy today.
Uniformly negative reaction. So, when you talk about all of this, if you look at the pound, you'll see why it's so serious. This fall that the pound
had immediately after, yes, to be sure, it has to some extent, rallied back up again. But it's the weakness that now exists. And you have to question
how far that fall is unique to the United Kingdom versus general falls as a result of the war in Ukraine, higher energy prices, which is what the
British Prime Minister Lynne Truss says.
Anna Stewart is with me. And earlier in the day, I pose that very question for you to answer. Liz Truss, you heard her interviews says, this is all
about Putin. It's all about the war. It's all about energy.
ANNA STEWART, CNN REPORTER: It was a refusal to acknowledge that any of the market fallout we've seen in the U.K. since last Friday had anything to do
with the fiscal plan. Well, if you crunch the numbers just in terms of the pound, since before that policy was announced last Friday, and between the
interview she was giving, well, the pound fell four percent against the dollar. The dollar is strong. OK. So let's look at some of the other
The pound was down -- sorry, the euro was down. 1.4 percent, the Swiss franc just one percent. So, there you have it, black and white, you can do
the math yourself. Prime minister, the pound was down specifically based on this.
QUEST: OK. But they're not budging. I mean, we now know you were briefing me earlier that the OBR, Office of Budget Responsibility or for business
responsibility, basically has already been informed about this. Have they come up with a forecast?
STEWART: What is so interesting is that the chairman of the Treasury Committee in Parliament, so across party committee, he's a Conservative
M.P., but he has been demanding that they turn over the OBR's economic and fiscal forecasts that was given to this new government when they were in
office. So just a few weeks ago to at least understand the changes we've had since the last forecast back in March.
Now they want to see, obviously the initial forecast based on this new fiscal plan. The government will have that at the end of next week, a
week's time. The public, Richard, we're not going to get that till the 23rd of November. That is a lifetime away. And that's after the next Bank of
QUEST: Al; right. Doesn't seem as if the government's going to budge on this. On Isa's program, "ISA SOARES TONIGHT," I basically said, it doesn't
really matter if they budge because the market will give its own reaction and that will eventually either take damage the economy or --
STEWART: We've seen a credibility gap already. The Bank of England was forced to intervene for fear that a selloff in U.K. government bonds with
spiraled out of control it would take pension funds with it. We've got two more weeks of Bank of England intervention on the gilt market. What happens
after that is anyone's guess but investors aren't happy and the market matters to this government.
QUEST: Your mortgage matters.
STEWART: And my mortgage matters. Honestly, when you look at the benefits of energy price freeze versus where mortgage costs could now go I know
which I would rather.
QUEST: Thank you. Anna Stewart. Some positive economic news though. Revised GDP shows it grew in the second quarter. There had been a slight
contraction. U.K. is the only G7 economy that hasn't fully bounced back since the pandemic.
Eurozone inflation has risen to a record 10 percent And now joins the U.K. as the only advanced economies with inflation in double digits.
Shamik Dhar is the chief economist at being BNY Mellon Investment Management. He's held posts at the Treasury, the Bank of England and the
British Foreign Office. He's with me now. Look, let's just get to -- first of all, your gut reaction to the policy announcement last week is what?
SHAMIK DHAR, CHIEF ECONOMIST, BNY MELLON INVESTMENT MANAGEMENT: Look, so clearly, it wasn't their finest hour. And the big issue here I think is not
so much the tax cuts themselves, although they are questionable, they amount about 45 million or two percent of GDP. It's just as your reporters
have been saying, it's the fact that there was no plan published to demonstrate how those tax cuts were going to be paid for.
Now, there are lots of ways they could be paid for. And I think what the government needs to do is come out and be honest and upfront about how that
could happen. I like you worry that, you know, mid to late November is probably a bit too long to wait. So, you know, I think the pressure will be
ramping up on them to come up with something more concrete.
QUEST: You've you sat at the top tables of policymaking. What would have been the rationale because surely somebody in the Treasury will have said,
chancellor or chief secretary, I do think we need an OBR because after all you did it was your party that set up the OBR. So what reasonable rationale
can you come up with to say, don't worry, we'll do it later?
DHAR: I mean, in fairness, I think, you know, this was -- this was brewing. I mean, the top guy at the Treasury was sacked within a day of the new
chancellor taking his post. And it was pretty, you know, pretty clearly that the government has a more antagonistic view towards maybe treasure --
what they call treasury orthodoxy than previous setup. So, I suspect, the Treasury may well have been saying those things, but they weren't
necessarily listening in the way that other governments might have.
I think this is a case, frankly, of the economics, trumping the politics to some degree, you know, at the end of the day, if you're going to cut taxes,
then kind of what you're saying is we're going to cut spending as well, in the long run, but they didn't want to say that outright. But the markets
are kind of forcing them into that position to making that -- making that position tto be clear,
QUEST: Inflation in the euro zone, 10 percent. U.K. 10 percent. I mean, it's all sort of all heavily out there. I was in Poland last night where
it's 16 percent. How much faster do you think central banks have to move, particularly, since it doesn't look like the energy, the gain from energy
is going to continue to much longer and/or improve?
DHAR: Richard, we've talked about this before, and I've long said that what's been forgotten in this fiscal furor is actually there's a -- there's
a deep problem here, which is that, you know, a lot of central banks left monetary policy too loose for too long. They left interest rates to loose -
-, too loose for too long. And a good chunk of the inflation that we're seeing is a result of that. So, they're in catch up mode.
And some of them are having to catch up more quickly than others. Banks, like the Bank of England and now having to face the fact that for financial
stability reasons, they've started buying bonds or indulging in Q.E. again, and that's ultimately going to make them have to raise rates further,
faster and earlier than previously thought. And, of course, that has potentially really nasty consequences for the economy as a whole through
mortgage rates, et cetera.
So it's not a great -- you know, it's the old -- it's the old dictum, you wouldn't want to start from here.
QUEST: Good to see you, sir. I -- on that thought, have a good weekend. Thank you.
DHAR: Thank you.
QUEST: Thinking a good weekend. Thank you. The scale of destruction from Hurricane Ian is becoming ever clearer in Florida. And fortunately, of
course, as we've been telling you, it's hurricane again and it's made landfall in South Carolina. It's QUEST MEANS BUSINESS. Good evening.
QUEST: The misery continues, Hurricane Ian most certainly is not finished yet. Now South Carolina where it made landfall a short time ago. It was a
category one hurricane much weaker than the category four that hit Florida on Wednesday, where indeed we're getting a clearer picture of the
destruction that took place there. The sheer ferocity of storm surges, strong winds havoc, water rescues are still underway in some of the worst
We now know 25 people have been killed. And financially it's the most expensive or could be the most expensive in Florida's history between 28
and $47 billion which shows you really nobody knows. CNN's Nick Valencia is in Myrtle Beach, South Carolina. And -- well, you know what's coming your
way, Nick Valencia, are you ready?
NICK VALENCIA, CNN CORRESPONDENT: Well, just about two hours ago it made landfall and we're still feeling the intensity of it. It's just south of us
here is where it made landfall initially, Richard, but this power of the winds is still being felt here north in Myrtle Beach. Water levels have
receded. You're talking about the water levels and just how high the storm surge was. This is the highest storm surge that this area has seen in six
years since Hurricane Matthew.
But the good sign and all of this here is just as the hours continued to progress, that water is receding back into the ocean. The force of the
window was a lot stronger than the force of the tide. So even after high tide had passed, we were getting flooding, localized flooding, coastal
flooding in this area. There's still about 13,000 people without power. And just in the last several minutes, some very dramatic images here, which I
believe we have video of just seemingly out of nowhere a shrimp boat seemed to emerge in the Atlantic Ocean in those choppy waves.
We can't really get a sense from the position I'm in now where it is along the coast, but it was inching closer and closer to the coastline. And we
don't know if there's anyone on that boat, but it was just getting hammered by those rough waves out there. So much so that some locals here have come
out and made their way towards that boat to see if there's anyone on shore, we're going to investigate as soon as this live shot is done.
Emergency Management sent out a tweet just a little while ago saying that there's portions of the pier in the water. There's also fallen trees and
some road closures because of some localized flooding. But compared to Florida, this area of South Carolina has really been spared much of the
damage. And most of the significant damage I should say is well south of here and the Georgetown area.
But they're not only clear here in Myrtle Beach just yet, Richard, that intensity and that wind is going to pick up in the next hour or two.
QUEST: Nick, I'm looking at the waves behind you. And the way that the ocean has sort of lifted up. Are they really that huge or is it an illusion
of the of the camera position?
VALENCIA: No, it's not an illusion. We're actually in this position because it simply wasn't safe for us to get any closer. At the height, those waves,
I mean, as rough as they look right now and as big as they look like right now, they're about half the size they were in the noon hour when things
were especially rough here in terms of rain and wind. But the intensity of that wind is clearly causing those waves to be still rough out there.
Double flag warning on the beach were saying nobody should be in the water. But now that the rain has stopped we're getting more and more locals coming
out here to check out the conditions, Richard.
QUEST: Yes. I saw two people walking behind you a moment or two ago. As if it was all over. Nick Valencia, grateful, stay safe, sir. Thank you for
bringing us out tonight. Thank you.
VALENCIA: Thank you.
QUEST: As you and I continue our discussion, inflation fears, a dollar dull down day in the U.S. markets. We're off the worst of the day but it is on
track, the longest run of quarterly declines since the global financial crisis back at the beginning of the last decade. QUEST MEANS BUSINESS. Good
evening to you.
QUEST: Right. Down 441 on the Dow at the moment with about eight minutes to go. And if you look at the Dow 30 there isn't a single stock in the green.
We're about to finish a pretty awful, pretty dreadful miserable week for the markets. And there's more bad news on domestic inflation in the U.S. to
suit that. So, the S&P has now got a new low for 2022. We are below this. Nike by the way is off 12 percent because it says it's overstocked.
Boeing has 737 issues. 77 Max issues. Paul La Monica is with me. This salami slicing although it's big chunks of salami that is being sliced on a
daily basis. There's no reason for it to stop until things get too cheap.
PAUL LA MONICA, CNN DIGITAL CORRESPONDENT: Yes, I think Richard that investors are obviously very nervous about the health of corporate America.
You mentioned Nike, their earnings really shocking Wall Street because of that inventory build up. A lot of products just being left on the shelves
on sold. That is clearly a problem and, you know, something that speaks to weakening consumer demand.
Nike not the only company with lousy earnings. Carnival Cruises their numbers worse than expected. So, the stock is plummeting today. It's
sending rivals like Norwegian and Royal Caribbean down pretty sharply as well. So yes, we know that the economy is showing some signs of losing
steam and now that big companies are also reporting earnings that are subpar. It's just a bad recipe for the markets right now.
QUEST: How long can it continue?
LA MONICA: I think it could continue for a while longer. People I talked to said we still haven't had the real kind of fearful capitulation moment
where everyone throws up their hands and sells everything.
Even though as you noted that all 30 days Dow stocks are lower today, you know, the Dow down 400 points from these levels isn't as scary as it used
to be when, you know, the Dow was at a much lower point. So, I think there are a lot of people wondering, when are we going to get one of those days
where it's like a five to six percent drop in the markets on one day? Something like 2008 where there's real fear and panic in the market.
This still seems to be orderly selling. It's not pleasant, because it's just one leg down after another. But yes, people I talk to says that sense
of fear is not as intense as in 2008 during the financial crisis, and that's what we need to really set a low probably.
QUEST: You and I talk about that next week. I'm not sure I agree on that. Because of the -- but it's a discussion first of both think about over the
weekend and maybe have on Monday next week. Grateful to you, Paul La Monica. Have a good weekend with the family. Thank you, sir. We will take a
profitable moment. Bit of a misnomer in today's market. A quayside profitable moment. I hopeful profitable moment after the break.
QUEST: Tonight's profitable moment. What a week it has been. Wherever we look, there is some form of difficulty misery and mayhem. And our program I
hopefully brought some of it to your doorstep tonight. Whether it's the annexation in Russia, which has caused of course, an energy crisis which
has raised inflation which has led to the problems in the U.K. and European economies which of course has been exacerbated by the policies of the
British government at the same time as the U.S. markets are in flutter and turmoil. So, is it a buying opportunity?
We've just been having a debate in this break. Is this the time to buy or at least have powder ready? I think I would never, ever say it's time to
buy. That's not my job. It is my job to save the time to have some dry powder. Everybody I speak to says have some powder ready. The moment will
come when you'll want it. We just don't know when. And that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London. What a week it's been but it's been delightful that you've been with us. Whatever you're up to in the weekend ahead, I
hope it's profitable. I'll see you on Monday.