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Quest Means Business
Britain's About-Face; Wall Street Soars Amid UK Fiscal U-Turn, Bank Earnings; Europe's Fragile Economy; Russia Strikes Kyiv With "Kamikaze Drones," At Least 4 Dead; Ukraine's Finance Minister: Most Businesses Back Operating; Bank Earnings Give Markets A Boost To Kick Off Week. Aired 3-4p ET
Aired October 17, 2022 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ZAIN ASHER, CNN BUSINESS HOST: All right, the Dow Jones is back above 30,000. Strong gains for all of Wall Street to kick off the week. Let's
take a look and see how pretty much in the green all day, 555 points higher. Those are the markets and these are the main events.
A full retreat: UK Finance Minister, Jeremy Hunt abandons nearly all of Liz Truss' economic plan.
Ukraine's Finance Minister says the country is on stable economic ground despite ongoing attacks from Russia.
And the Bank of America says the US consumer is still spending despite recession fears.
Coming to you live from New York, it is Monday, October 17th, I'm Zain Asher, in for my colleague, Richard Quest, and this is QUEST MEANS
Tonight, the UK's new Finance Minister is scrapping nearly all of his predecessor's fiscal plan. Jeremy Hunt says the government needs to be
responsible and is promising stability in public finances.
The pound rose with the announcement the previous plan has caused financial turmoil. The pound fell to multidecade lows and bond yields soared, forcing
the Bank of England to intervene.
On his fourth day as Chancellor, Mr. Hunt told Parliament what was at stake.
(BEGIN VIDEO CLIP)
JEREMY HUNT, BRITISH FINANCE MINISTER: The conclusion I've drawn from those conversations is that we need to do more, more quickly to give
certainty to the markets about our fiscal plans and show through action and not just words that the United Kingdom can and always will pay our way in
(END VIDEO CLIP)
ASHER: The U-turn marks a change in the balance of power between the Prime Minister at Number 10 Downing Street and the Finance Minister next
In her campaign, Liz Truss promised tax cuts and help with soaring energy bills. Now, Number 11 is scrapping most of those policies, which would have
required heavy, heavy borrowing and that raises questions about the Conservative Party's future direction whether it will be pro-growth at all
costs or whether it will favor fiscal responsibility and appeasing financial markets.
Bianca Nobilo is in London following the political implications. We've also got Mark Stewart on the economic angle joining me live now from New York.
Bianca, let me start with you. Liz Truss was actually late to the House of Commons today. What do you make of her body language when she did actually
show up? She looked so defeated to me. Her eyes were staring down at her feet. The overwhelming emotion I saw in her face was shame. It was
humiliation. She looked mortified.
BIANCA NOBILO, CNN INTERNATIONAL CORRESPONDENT: She did. I'm glad you asked me this question, Zain, because actually one of my post grad thesis was on
the body language of political leaders, so I can do this for you.
ASHER: Thank you.
NOBILO: She was definitely, definitely defeated, very subdued body language coming from her. There was a little movement in her extremities, which is
always a sign that somebody is deflated. Her gaze was fixed. She was expressionless, extremely controlled. There was no element of being
You can see it there, how she is sitting up prim in a controlled fashion, almost as if she is trying to be impervious to everything that's occurring
around her, and I'm not surprised because she was late, as you mentioned, and when Penny Mordaunt who we see that to the left of the Chancellor,
Jeremy Hunt was standing in for the Prime Minister, the attacks on Liz Truss were blistering, with MPs pointing out that she is clearly no longer
in charge, that if her economic policies and the mandate that she built for herself as fragile as it was, has now been completely dismantled by the
Chancellor, then why is she even there?
Many people questioning this evening, Zain, what she will do when she has to appear in front of this chamber in Prime Minister's Questions on
Wednesday, when they say none of the policies are coming from her. It should be the Chancellor taking those questions on Wednesday and not her.
ASHER: She is in an unenviable position. Marc, let me bring you in.
So just in terms of what do Jeremy Hunt announced today, do you think that what he says or what he said, rather will restore sort of credibility in
MARC STEWART, CNN CORRESPONDENT: Well, Zain, a lot of Jeremy Hunt's speech focused on themes about stability and confidence, which he really needed to
say, not only to Members of Parliament, but to Wall Street and the rest of the world because as we have seen, in recent weeks, global markets in many
ways have been shaken by this financial disarray, if you will, in the United Kingdom.
So today, we saw the FTSE after some very wobbly days close with some gains. The DAX in Germany closed in the green. There's even a rally taking
place today, as you mentioned off the top of the show here in the United States with all the major indexes, some of it could be because of bank
earnings, but you also cannot discount what happened to United Kingdom.
I was looking at some analysis early this morning by Deutsche Bank, and it pointed out that you really cannot underestimate just how much the
relatively small UK market has buffeted global markets in recent weeks.
There is the UK economy, but also these are investments in bonds, in gilts, as well as other financial tools that extend well beyond the UK's border.
So right now, Jeremy Hunt needs to basically be a CEO and tell the world there is a roadmap for the future. There is a plan that is one way to bring
some calm to what have been a very turbulent market -- Zain.
ASHER; And Bianca, let me bring you back in. I mean, you touched on this earlier, we obviously don't know why Liz Truss was late today, what else
she had going on; I have no idea what could have been more important than being in the House of Commons today, but we talked about Penny Mordaunt
standing in for her.
There were several Labour MPs who joked, you know, look, is the Prime Minister sort of cowering under her desk? Is she too afraid to face
Could there be a sprinkle, obviously, we don't know why she wasn't there, but could there be a sprinkle of truth to that?
NOBILO: Well, we have a little bit more information on that we understand that she was actually meeting with the Chairman of that powerful Backbench
Committee which controls leadership contests and votes of no confidence, Sir Graham Brady, and apparently that was a pre-planned meeting that was
always in the diary.
Now, no doubt they did address the fragility of her position and the strength of opinion within the Conservative Party at the moment that's
growing that she can't continue. It's also a curious judgment call, because of course, she is the Prime Minister and she could have quite reasonably
and justifiably postponed that to appear in the House of Commons and try and regain that authority.
Also, significantly, Zain, in the last 20 minutes or so since I actually left my desk, a fifth Conservative MP has come out and called for the Prime
Minister to go saying that her position is untenable. So that is sort of within the last 24 to 48 hours now, we have five. There were three of them
yesterday that came out; now, we've had two today.
We know how this rhythm can go, there can be trickles of MPs and then a flood, and that can add more pressure on the Prime Minister's position. So
far, we don't have any Ministers or members of government, that's when things get really, really difficult. But I think it's just another sign
that her position does not look sustainable and I have no doubt that when she faces the House of Commons on Wednesday, if she does that, that will be
a brutal and grueling political experience for the Prime Minister.
ASHER: Yes, I mean, there is no doubt that appointing Jeremy Hunt has bought her some time, the question is how much. Bianca Nobilo live for us
was there. Marc Stewart, thank you both so much.
All right, the Finance Minister announced a new Economic Advisory Council. He says he needs more independent expert advice as he starts his new
position. He also praised the Bank of England and the Office of Budget Responsibility for their independent roles. Kwasi Kwarteng was criticized
for not submitting the fiscal plan to the OBR for examination.
Marcelo Carvalho is the Global Head of Economics at BNP Paribas. He joins us live now from New York.
Marcelo, thank you so much for being with us. So, your thoughts on this dramatic reversal by Britain's new Finance Minister, Jeremy Hunt?
MARCELO CARVALHO, GLOBAL HEAD OF ECONOMICS, BNP PARIBAS: Yes, it is a U- turn in policies. I think from an economic point of view, what the UK authorities are trying to do is to hit the reset button so to speak. So,
they are trying two things here.
First, is to scale back the size of the previously announced plan. They are unwinding about three quarters of what was announced before in terms of
fiscal easing. The second even more most importantly, they are trying to restore some of the credibility, which was lost during the episode.
However, I think, unfortunately some damage is done to credibility and to take time to recover it. More importantly, even perhaps, is that I think
the UK developments have some lessons for policymakers elsewhere in the globe as well.
ASHER: A lot of people commented on the fact that Jeremy Hunt through these reversals and through, you know, his announcement today that he was
essentially speaking to financial markets, does this mean that financial markets are essentially dictating UK economic policy?
CARVALHO: Look, I think the message here is that financial markets provide a feedback loop into policymakers. So, there are a few lessons here, I
think, for everyone, including the UK authorities, but others as well.
The first lesson is that fiscal expansion, particularly if it is large, unfunded, and poorly targeted, we will face indeed, market pressures,
pushback from analysts, even from the IMF, as we have seen the case of UK. Second message, I think, is that if there is certainly a case of being
better coordinated in terms of fiscal policy and monetary policy, Bank of England is tightening interest rates, hike interest rates, trying to slow
down the economy, at the same time that fiscal policy is easing, it is like driving a car and stepping on the brake and accelerate at the same time, it
And last but not least, authorities have to be mindful of unforeseen side effects, as we have seen with turmoil in the gilt market, and the pension
fund and so on in the UK.
ASHER: Yes, and just wanting to speak a bit more about UK inflation, we know that Liz Truss' mini budget based on economic experts sort of input
would have been disastrous for UK inflation, which is already among the highest in Europe. Now that these policies have been reversed, what does
that mean for inflation in the UK?
CARVALHO: I think it means that it complicates a bit less than before the job of the Central Bank, however, Bank of England too has work to do.
Inflation is too high for comfort globally, by the way, but especially in the UK. The Central Bank, therefore, in the UK will have to hike again.
We're looking for at least another 75 basis points hike next time, and the terminal policy rate, so to speak, we think will be much higher than
previously was the case, maybe all the way to four and a half percent.
So last fiscal easing, as we have now helps a little bit relative to what we had before. However, it does not prevent the Central Bank, the Bank of
England from having to hike rates either anyway, in order to contain inflation, which is too high for comfort.
ASHER: What's been the corporate reaction to these dramatic reversals by Jeremy Hunt so far, especially because obviously, because every party has
branded themselves as being the most pro-business?
CARVALHO: Well, I think above all, the main implication here is the element of uncertainty that the recent developments introduced, you can debate
whether you should have higher taxes or lower taxes, and that's a healthy debate.
But more importantly, I think, for corporates, for decision makers in the private sector, is to have clarity, it is to have transparency, and that is
not something fortunately, that we had fully in the first round of announcements, hence, the U-turn now trying to regain some credibility to
lay out not just the fiscal plans, but the funding that needs to accompany those larger expanding plans than initially was the case.
ASHER: All right, Marcelo Carvalho, thank you so much. We appreciate you being with us.
And we'll have much more news when we come back.
ASHER: The US markets are on fire today. The rally comes as the UK steps back from its controversial fiscal plan. The Dow is up almost two percent,
the S&P 500 even more, the NASDAQ seeing the best of it gaining almost three-and-a-half percent. Investors are also welcoming better than expected
earnings from the Bank of America and BNY Mellon, those are both up more than five percent.
Matt Egan is in New York for us.
So Matt, just walk us through this. You've got all these sort of bank earnings, really helping to boost the markets today.
MATT EGAN, CNN REPORTER: Zain, that's right. Bank of America did help jumpstart this rally. Bank of America share is up six percent after this
earnings beat that I think helped to paint the picture of resiliency for both Main Street and Wall Street.
They said deposits were up, loan growth was up, that's encouraging. Brian Moynihan, the CEO, he said people are still spending money, maybe not as
aggressively as they were, but they are still spending.
And Bank of America's of fixed income trading and trading revenue overall was up. At the same time, we do have to talk about what's going on in the
currency market because the dollar has been so strong for so long, and that has been a negative for the US stock market. That has reversed, the dollar
is down significantly against the euro today, down big against the pound on that reversal by the British government on the tax cut plan. So again, that
has been seen as a positive.
And I think some of the Fed fears are maybe easing just a bit for the moment. I mean, Treasury yields have stopped going straight up. That has
been a positive for the stock market and St. Louis Fed President, Jim Bullard, he was out on Friday, talked to Reuters, and he said that he
favors the Fed going big with rate hikes in both November and December. But -- and this is key -- he wants the Fed to pause after that.
And I think that anytime, Zain, we've seen even just a hint of the Fed pivoting away from these monster interest rate hikes, we have seen markets
rally and that is happening again today.
ASHER: And we've also got a slew of tech earnings coming up later on this week. What can we expect?
EGAN: Well, Zain, you've got to wonder if some of the bad news is baked in here, right? Because some of these stocks are just down tremendously. I
mean, despite today's big gains, the NASDAQ is still off by like 30 percent so far this year. Netflix and Tesla, two tech stocks that are reporting
results soon, they're down even more.
I think the keys are going to be what these tech companies say about supply chain stress and inflationary pressure. I mean, is it getting better? Is it
getting worse? When do they see a light at the end of the tunnel? Also, what do they say about that strong dollar? How is that hurting their
profits? And of course, whether or not these companies see a risk of a recession in the United States or around the world in the coming months.
And remember, because tech companies are just such a big part of the overall stock market today, I do think that what these companies report and
the tone that they set in their outlooks, that is going to be a critical factor for the markets in the coming weeks.
ASHER: All right, Matt Egan live for us there, thank you so much.
Okay, the UK's tax cut U-turn is just one part of a larger conversation about fiscal responsibility in Europe. Other nations have been rethinking
their economic direction. Two weeks ago, Germany scrapped plans to pass energy costs onto citizens, instead, it is borrowing $195 billion to pad
them, and Italy's incoming right-wing leadership is being pushed to think twice on campaign promises that would increase spending and deepen the
Richard Quest spoke to Austria's Finance Minister, Magnus Brunner, told him European nations need to have sustainable budgets and gave an update on his
country's energy reserves.
MAGNUS BRUNNER, AUSTRIA'S FINANCE MINISTER: We are quite well-prepared in Austria, at least our storage capacities are very high, and it looks quite
good for the next, I would say 12 months or so, but there is another winter and another winter after that so, we have to prepare for that, definitely.
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS.": And this idea of monetary policy and fiscal policy pulling in the same direction.
Now, I understand of course, monetary policy is independent. It is the ECB that deals with that and they are tightening.
So on a fiscal front, what's your policy got to be?
BRUNNER: You mean, our national policy?
BRUNNER: Well, I think in one hand, we should definitely come back to a sustainable budget path all over Europe and not for our own sake, but to
give the ECB and other institutions the possibility for room to maneuver.
On a national level, yes, but also on a European level, I think that's the most important message.
QUEST: Many countries, of course, are not doing that.
BRUNNER: Exactly. That's our problem. That's what we should all think about and all go into the same direction, on the European level and on a national
level. So some countries, as you said, not all of them have the same attitude, but I think we should all keep in mind that we should get a
sustainable and better path on the fiscal policy.
QUEST: Do you see a potential -- I'll use the word "conflict," but you will raise an eyebrow about that, you know what I mean. Do you see a
potential disagreement, an area of friction as Eurozone, particularly Eurozone and Eurogroup countries come together and can't reach that?
BRUNNER: Well, there is a bit of a conflict, obviously, because there are so many different countries in Europe and that is a difference to the US
also. We just had our meeting with Secretary Yellen this morning, and you could see there are so many European countries, European Finance Ministers,
and one woman on the side of the US that exactly describes our problem.
QUEST: And that weakness, some would say a strength.
BRUNNER: It's a weakness on the one hand, but it's also a strength on the other hand, of course.
QUEST: At the moment, is it a weakness or a strength?
BRUNNER: At the moment, it is rather a weakness, I would say.
QUEST: What can you do about it? You can make the arguments, you can go to the eco things, but what can you do about it?
BRUNNER: Yes, just talking, talking, talking, coordination, coordination. That's what we can do and persuade all the others to go in the same
QUEST: And if they won't?
BRUNNER: Well, we always get to democracy all over Europe, and then we have to -- we have you have to try hard, definitely.
ASHER: A big step towards sustainability plans for a massive green ammonia plant are underway in South Africa. It comes as demand for green
energy surges all over the world.
Eleni Giokos has more in the latest "Connecting Africa."
ELENI GIOKOS, CNN SOUTH AFRICA CORRESPONDENT (voice over): It's a massive greenfield site, thousands of hectares of land in Nelson Mandela Bay in the
Eastern Cape. Its backers, Hive Energy, say that the $4.6 billion green ammonia project will be sustainable and create thousands of green energy
COLIN LOUBSER, DIRECTOR, HIVE ENERGY MEA: We looked at sites all over Africa, all over the world and we came to the inevitable conclusion that
this would be the best site to set up a green ammonia plant. And there are many reasons for that. They have infrastructure in place, road
infrastructure, there is the water desalination plant. So, we've got fresh water available to us.
There is plenty of land. There's over 9,000 hectares of available land here.
GIOKOS (voice over): Demand for ammonia is growing internationally. Its main use is to make fertilizers and explosives in mining, but it's a
cleaner green version that is being touted as having a bright future.
LOUBSER: Green ammonia is normal ammonia that is made using renewable energy. So, it's completely clean. It's not made using fossil fuels. This
means this is a completely clean process.
GIOKOS (voice over): Its potential as an alternative fuel for the shipping sector that is exciting the industry most.
LOUBSER: We will start replacing heavy fuel oil on ships and it will replace diesel so that will become the fuel of the future particularly in
the maritime industry.
GIOKOS (voice over): Preparations for the construction of the plant already underway. It's set to create thousands of jobs in a region where they are
ASANDA XAWUKA, EXECUTIVE MANAGER, COEGA DEVELOPMENT CORPORATION: Well, us, in the Eastern Cape, the unemployment rate is sitting at over 50 percent,
so which means that an investment of this nature with the number of jobs that are going to be created, it is going to be very big.
GIOKOS (voice over): Hive Energy says it plans to create 20,000 construction and permanent jobs, and that more will be created when they
begin exporting to the continents.
LOUBSER: Both Mozambique and Zambia import ammonia. When they import, they have huge commercial farms and ammonia is an import for them. We see huge
opportunities in Africa for inter-trade cross border cooperation.
GIOKOS (voice over): Hive Energy says that it aims to begin production of green ammonia at the plant in 2026 and that through its greener energy
alternative, it should help in climate change mitigation.
Eleni Giokos, CNN.
ASHER: Russia launches kamikaze drone attacks on Ukraine for the second time in a week, strikes hitting residential buildings and targeting the
country's critical energy infrastructure, next.
ASHER: Russian state media say that a military jet has crashed into a residential building in the western city of Yeysk. Officials say that at
least four people have been killed and 25 people injured.
Salma Abdelaziz reports from London.
SALMA ABDELAZIZ, CNN CORRESPONDENT: President Vladimir Putin is now responding to the crash of a fighter jet in a residential area in Southern
Russia. On Monday, President Putin instructing all relevant authorities to provide assistance to any victims of this accident. We understand also,
regional officials have launched an investigation to find out what happened behind this crash.
What we know so far is this Russian supersonic fighter bomber jet, a Su-34 was taking off from a military training ground, part of a training exercise
as the fighter jet was taking off its engine malfunctioned, part of it catching fire that forcing the pilot to eject from the fighter jet from the
-- from this jet, that plane -- that fighter jet then crashing into a residential area in the town of Yeysk. We understand in the courtyard of
this residential quarter, setting off a fire of 2000 square meters. Emergency services, and firefighters of course rushed to the scene. We know
several people have been killed, and others hospitalized.
Now, again, this was part of a training exercise, but it does reveal some of the challenges that Russia's military is facing now many months into
this conflict with Ukraine. The loss of a fighter jet will of course be one of importance of value to the Kremlin that seems to have lost much
ammunition -- great deal of ammunition on the ground in this fight. And there will also be questions about the manpower behind Russia's military
right now. Analysts are saying that with the loss of life on the ground, on the battlefield, the Kremlin is turning evermore to less trained, less
Salma Abdelaziz, CNN, London.
ASHER: For the second time in a week, Russia has attacked Ukraine's capital with kamikaze drones. The assault hit residential areas and energy
infrastructure. This video shows Kyiv police trying to shoot down a drone moments before it struck its target. Officials say that one of the attacks
killed at least four people, including a pregnant woman and her husband. Rescuers are still searching the rubble for -- of that building for
survivors. Ukraine says the drones are Iranian-made and they're now calling for sanctions on Iran.
As Russia's invasion continues to disrupt daily life in Ukraine, the country's businesses are showing their resilience. Ukraine's finance
minister says that 89 percent of businesses are now operating. That number up from 25 percent at the start of the war. Richard Quest spoke to
Ukraine's finance minister at the IMF World Bank meetings in Washington last week. Sergii Marchenko said it's vital the financial promises made to
Ukraine are kept.
SERGII MARCHENKO, UKRAINIAN FINANCE MINISTER: Good moment for us to show that we are capable. We are determined to help our budgetary system under
control, our economic situation with quite stable despite the war. And I believe we can manage to receive some promises. There's an extra year
because 2023, it's important here for us.
RICHARD QUEST, CNN ANCHOR: Janet Yellen this week was saying that other countries, the EU perhaps, have not necessarily delivered on the money that
they've promised. That's your problem.
MARCHENKO: I think it was, like complicated before. This question was a little bit tricky. But now we see that at the end of this year we have been
able to receive from the EU 5 billion euros. For next year, they also trying to figure out how to commit for Ukraine, a big package from a macro
financial assistant. I will -- I have hoped they will able to prepare some mechanics for Ukraine.
QUEST: You see, the number of 5 billion a month is the one that I think President Zelenskyy has suggested is the -- is a sort of --
MARCHENKO: For this year, yes.
QUEST: For this year. That's an enormous amount. And whether justified or not, countries are going to find it difficult to offer that level of
MARCHENKO: Of course, it's not an easy endeavor to show that we are capable and we are able to win this war, we are able to counter so support us, we
worked it. And for next year, our deficit is lower than 3 billion per month. So -- and we reassure our partners, OK, look at us, we are able to
attract necessary finance, our revenues increasing, we reduce some expenditures and so we try to balance our budget by OK, 3 billion is our
gap. Please find a way how to support us.
QUEST: The IMF says the economy will contract by 35 percent which is an astonishing amount.
QUEST: Russia is not expected to contract anywhere near that amount. The sanctions don't appear to be having the desired speed of the effect, even
though they might have. And in fact, President Putin says, it's hurting Europe more than anybody else. How do you -- how do you feel on that?
MARCHENKO: Of course, we also bid for it that this uncomfortable situation when there as a country suffering because of Russia's aggression can cause
some problems on dealing with Ukraine.
But again, what we see right now is that Ukraine is a solution to a problem. When you are able to support us and eager to support us, it's a
solution or problem to have solved the problem with energy price with inflation. I see this as a message which we delivered yesterday.
QUEST: How much of the economy is performing OK?
MARCHENKO: You know, it was somewhere polls about how business delivering and it's only 11 percent of our business are fully stocked. It was 75
percent at the beginning of the war, now it's only 11. So our business is resilient enough to help government to win this war. So as they are paying
taxes, they are trying to get paid salaries, etcetera.
ASHER: The Ukrainian officials in the Dnipropetrovsk Region are reporting serious damage on critical infrastructure. Ukraine's leader say that
attacks on power facilities are blatant attacks on civilians. Fred Pleitgen joins us live now from outside a power facility damaged by Russian attacks.
Fred, what more can you tell us?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi, there, Zain. Well, this is something that happens today, obviously, also, in the wake of
those attacks that we saw on Kyiv with that massive destruction that was called -- caused thereby those four drones - kamikaze drones that impacted
Ukrainian capital. Well, here in the Dnipro region, a power plant was attacked by drones as well. And the authorities here say that the damage to
that power plant was extensive. They said there was a massive fire that broke out and that took rescue crews a very long time to put that fire out.
And the big impact that this had is something that you probably see behind me, is the city is really dark right now. That's because the authorities
are calling on people to use as little electricity as possible as they try to get these problems fixed. And it's something that I've seen -- that I
think we've seen throughout Ukraine, where the damage to the infrastructure that these drone strikes, especially kamikaze drone strike caused, they are
-- they are quite extensive throughout the entire country.
The Ukrainians say that they are trying to repair things as fast as possible, but of course, the more often strikes like this occur, the more
they're going to have to do and the more difficult is going to be for them to try and come to terms with all of this. Of course, today, the main focal
point wasn't the Ukrainian capital, but there as well. It was first and foremost a power plant that was hit. And then of course, also, tragically,
that residential building where four people were killed, Zain.
ASHER: And Iran is being blamed for these drones. What's been their response to these accusations, Fred?
PLEITGEN: Yes, the -- yes, that's a very good question. The Iranians are denying everything in the form of the spokesman for the Iranian foreign
ministry. They say that none of this is true, that this is all political in nature. The Ukrainians, though, are not having any evidence. It's been
quite interesting to see a big change in the tone coming from the Ukrainians. In fact, the Ukrainian foreign minister, he says today that he
had never in his entire time as a politician called for sanctions against Iran. But right now, that is exactly what the Ukrainians are doing because
they say there have been so many strikes using these Iranian-made drones, that it's really damaging, obviously, and it's causing a lot of lives here
in Ukraine as well.
The Iranians today, once again, said that they are not party to this conflict, that they are not on either side of this, that they've never
provided any sort of weapons. But certainly, the Ukrainians say from what is crashing into their infrastructure that it looks exactly like the Shaid
136 drone that the Iranians make, even though of course, now it has Russian markings on it. In fact, there was some parts of those drones that were
shown by Ukrainian politicians and forces here in Kyiv, which they say clearly shows that these are parts of Shahid drones. And the Ukrainian side
of things are very, very dangerous for them because they are cheap, they loiter for a very long time, and they attack in swarms. And that's what
really manages to overwhelm the air defenses here in Ukraine, Zain.
ASHER: And Kyiv has been under sustained attack over the past week or so, what does Ukraine at this point need in terms of specific weaponry to
shield itself from this type of bombardment?
PLETIGEN: Yes. It's -- that's also -- that is also a very, very important question right now. I mean, the Ukrainians are saying that they need better
air defense systems, obviously. And they certainly need ones that are tailor-made for drone swarms. If you look at, for instance, some of the
weapons that the Ukrainians currently have, some of the surface-to-air missiles that they have, shooting down one of these drones with a surface-
to-air missile would be very, very expensive and would waste a very important resource of which the Ukrainians don't have very much.
The same would be true of a lot of Western surface-to-air missile systems. Like for instance, if you take the U.S. Norwegian NASAM system or even the
German Iris T system, which of course, is already in service here in Ukraine, a shootdown is very, very expensive for something that's as cheap
as one of these drones.
And of course, if they come in swarms you're going to need a lot of rockets to shoot them down. So, the Ukrainians are saying that they need more
efficient systems. They also say that they're already working on electronic systems to try and suppress these drones essentially, down those drones
electronically before even having to fire anything off. But also, for instance, cannon systems, anti-artillery -- anti-aircraft cannon systems
are also something that they say could be quite effective, especially if they are modern ones that allow them to recognize the swarms as they come
in, and then take them out.
Because one of the things that need to be said, and that's why it's such an important question is that taking out one of these drones is not a big
problem for surface-to-air missile systems. They fly very low, they fly very slow, they're very easy to hit. However, when they attack in swarms,
you're wasting a lot of resources, if you're firing expensive missiles as these things at these things to try and take them down. And of course, that
also depletes the capacities that the Ukrainians have to take out aerial targets.
AHSER: All right, Fred Pleitgen, live for us there, thank you so much. And that is "QUEST MEANS BUSINESS." I'll be back at the top of the hour as we
make a dash for the posting bell. Up next is Living Golf."
ASHER: Hello, everyone. I'm Zain Asher. It is the dash to the closing bell and we are just two minutes away. The UK government's fiscal U-turn is
helping to lift markets. The Dow has been in the green all day led by financial and tech stocks. The S&P500 is up about 2.5 percent with Bank of
America reporting strong earnings, and the tech-heavy NASDAQ has soared more than 3 percent, amazon and Netflix helping drive those gains.
Britain's new finance minister Jeremy Hunt has reversed almost all of Liz Truss's planned tax cuts. I asked the Global Head of economics at BNP
Paribas, whether the move will reassure markets. And Marcelo Cavalho said it's a step in the right direction.
MARCELO CABALHO, GLOBAL HEAD OF ECONOMICS, BNP PARIBAS: They're trying two things here. First, is to scale back the size of the previously announced
plan. They're unwinding about three-quarters of what was announced before in terms of fiscal easing. And second, even most importantly, perhaps
they're trying to restart and restore some of the credibility which was lost during the episode. However, I think, unfortunately, some damage is
done to credibility, and to take time to recover it.
(END VIDEO CLIP)
ASHER: And looking at the Dow components for you, let's take a look and see mostly all in the green. You've also got JP Morgan specifically on top,
after reporting a solid third-quarter profit on Friday. And that is your dash the bell. I'm Zain Asher, the closing bell is ringing on Wall Street.