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Quest Means Business

UK Home Secretary Resigns; Inflation Passes 10 Percent As Costs Of Basic Goods Soar; Biden Taps Emergency Oil Reserves As OPEC Cuts Output; Inflation Fears Drag Down Major Indices; Netflix Gains Subscribers In Q3; Hong Kong Chief Exec Addresses "Brain Drain"; Dash To The Bell. Aired 3-4p ET

Aired October 19, 2022 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:25]

ZAIN ASHER, CNN INTERNATIONAL HOST: Wall Street's rally comes to a stop.

Let's take a look and see how the Big Board is doing right now, down about 200 points or so. It started off in the green and it has been fluctuating

all day. Again, we are down about 200 points.

Those are the markets and these are the main events.

More disarray in the UK. The Home Secretary resigns, thrusting the British government into further chaos.

And President Biden announced his plans to release another 15 million barrels of oil from US government reserves.

And Netflix shares spike after the company adds more than two million more subscribers.

Coming to you live from New York. It is Wednesday, October 19th. I'm Zain Asher, in for Richard Quest, and this is QUEST MEANS BUSINESS.

Tonight, the British Prime Minister's Cabinet is in turmoil as her Home Secretary resigned. Suella Braverman said that she is stepping down for

sending an official document from her personal e-mail. In her resignation letter, she took responsibility for the mistakes. She also wrote that

pretending we haven't made mistakes is not serious politics. Clearly, a jab at Prime Minister Liz Truss who had just appeared in the House of Commons

where she was defending her record.

(BEGIN VIDEO CLIP)

LIZ TRUSS, BRITISH PRIME MINISTER: I am a fighter and not a quitter.

We have delivered on the energy price guarantee. We have. We delivered on the energy price guarantee. We've delivered on national insurance. We are

going to deliver to stop the militant trade unions disrupting our railways.

(END VIDEO CLIP)

ASHER: The political instability in the UK comes as inflation returned to a 40-year high. Prices rose 10.1 percent in the 12 months to September.

Bianca Nobilo is live for us in London.

So Bianca, let's start by talking about Suella Braverman. It was quite entertaining to read between the lines of Suella Braverman resignation

letter.

She started off a million to a mistake and then hinted at the fact that it was a minor mistake and then proceeded to throw several hand grenades at

the Prime Minister.

BIANCA NOBILO, CNN INTERNATIONAL CORRESPONDENT: Yes, Zain, I mean the subtext at the beginning of the letter turned into just the actual text a

few paragraphs down after saying that she was going to -- that she decided to resign because she acknowledged a mistake that she'd made, which you

just outlined.

She then had this very thinly veiled critique of the Prime Minister by saying that she acknowledges that when one makes a mistake, the right thing

to do is resign. You can't magically ignore that mistake or assume that people haven't noticed that you've made it.

She then went on to just explicitly say that she had deep concerns about the direction that the government was going in and its commitments to

delivering on the 2019 Manifesto promises.

The wider context of this is the fact that Suella Bradman had been increasingly critical of the new direction that government policy had taken

since Liz Truss had to U-turn on that mini budget, since involving Jeremy Hunt and bringing him along as the new Chancellor.

Braverman opposed the U-turn on the tax cut for the wealthiest in the UK. She didn't think that Truss should be going in this new direction.

She has also been very outspoken on issues of immigration as Home Secretary and recently made some inflammatory remarks about it being a dream, an

obsession of hers to see a plane full of asylum seekers arrive in Rwanda under that controversial new policy, Zain, but the day and evening just

continues to unravel and be very difficult to follow now to be completely honest.

The government held an important -- sorry, the Parliament held an important vote this evening. It was actually a vote that was tabled by the Labour

Party about outlawing fracking.

Earlier in the day, it seemed that the government had turned this vote into a so called Confidence Motion, meaning any of their own MPs that didn't

vote with the government could have the whip removed, which is the toughest line of discipline, a peculiar political judgment at this time when Liz

Truss is very short on political capital.

We then had scenes developing in the last half hour or so where Chris Bryant, a Labour MP and also Chairman of the Standards Committee in

Parliament has stood in the House of Commons chamber and asked the Deputy Speaker to investigate what he described as scenes of intimidation and

bullying in the voting lobbies.

So, this is obviously deeply concerning and developing and just allegations at this time, but he is a senior figure saying this in the House of

Commons. So there does seem to be a lack of discipline and certainly a feeling of chaos among many who are in the House of Commons tonight, Zain,

and it is difficult to keep track of these developments.

[15:05:12]

ASHER: Yes, chaos to put it lightly. The Prime Minister losing though two Cabinet Ministers in just one week, one of them, she sacked; the other one,

apparently resigned because of breaching some kind of Ministerial Code. Either way, optics did not look good. It will. We'll see whether she can

recover from all of this.

Bianca Nobilo live for us there, thank you so much.

Prices are rising sharply amid all of the political uncertainty. Increasing costs for basic goods drove inflation over 10 percent in the UK in

September. Food prices rose almost 15 percent in the past 12 months. Housing costs were up nine percent and transport prices rose almost 11

percent.

The leader of the Liberal-Democrats is calling for a General Election saying that the country can't afford conservative incompetence any longer.

Ed Davey spoke with Julia Chatterley earlier. He said Britain's economy cannot recover in the current political environment.

(BEGIN VIDEO CLIP)

ED DAVEY, UK LIBERAL-DEMOCRAT PARTY LEADER: Well, the political instability and the economic instability are related, aren't they? That's

the problem.

The economic instability from the mini budget was bad enough, when we don't know who's going to be the Prime Minister in a few weeks' time, when we see

the governing party divided in several ways, that political instability results in bad government and poor economic policy.

(END VIDEO CLIP)

ASHER: Adam Posen is the President of the Peterson Institute for International Economics. He served on the Bank of England's Monetary Policy

Committee. He joins us live now.

Adam, thank you so much for being with us.

So all of the political chaos, of course, happening in the UK as inflation hovers around 10 percent, and by the way, the price increases abroad is

driven largely by higher food prices, but certainly there are a broad array of goods in the UK, where we are seeing prices rise steadily.

How long does the Bank of England really need to raise interest rates for until we see a notable impact here?

ADAM POSEN, PRESIDENT, PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS: Zain, thank you for having me.

I think the important point is, as you say, there's a real momentum, or persistence behind trends in inflation in the UK. It's not just goods, it

is services. It is things like transport and rent that you are talking about. And so they are more like the US than the Euro area. You can't just

say it is food and energy.

So, the Bank of England was arguably already behind the curve on raising rates before the Truss-Kwarteng mini budget blew a further hole in policy.

So, I think the Bank of England has a long way to go, the market seems to be pricing in what they call a terminal rate, meaning a peak rate around

four percent. I think they're going to have to get closer to five percent, meaning continuing to raise rates well into mid-2023.

ASHER: So, the Bank of England has a long way to go, as you point out there behind the curve, though. What does that mean in terms of what

happens to the UK economy in the meantime? And obviously, the likelihood of not just a recession next year, but whether it is going to be mild or a

severe recession?

POSEN: Yes, and the bank, the Office of Budget Responsibility, and independent analysts are all trying to figure out net of all the changes

that have been made, all the U-turns and reversals, what is the actual fiscal stance of the government going to be?

I think that reversals were the right thing to do, but the fully new program is unspecified. It is possible, we may end up with a program that

is much more contractionary than the one the bank looked at to set policy in late August, early September before the political mess.

So, you're looking at a much higher chance of recession and a near certainty in my view of recession in the UK in the next year. And the

question, then is how much does the recession take care of inflation on its own, versus the bank having to continue to hike and that is going to be the

difficult call for the bank in the coming months.

ASHER: Yes. That is an interesting question.

I also want to pivot slightly to what is happening in the United States. Obviously, OPEC+ announcing oil production cuts. In response, Biden

announcing an additional sort of 15 million barrels of oil to release -- to release 15 million barrels of oil as a way to stave off oil price

increases.

This is the tail end of a promise that he initially made back in March. My question is, how much does this sort of small amount actually serve to

alleviate pain at the pump when it comes to prices?

POSEN: Probably not much. The amount that in the Strategic Petroleum Reserve is meant to be largely for literally rationing gas in order to have

crucial public services and military supplies. It is not meant to be large enough to move global markets.

So, I doubt this is going to have much lasting effect. One needs more direct diplomatic, other forms of pressure can have OPEC+ not be

contracting right now.

[15:10:10]

ASHER: Adam Posen live for us there. Thank you so much.

And as Adam Posen just mentioned, the UK's hot inflation reading almost guarantees more rate hikes from the Bank of England; however, the UN has

called for Central Banks to slow down, fearing that they are going to be hurting emerging economies.

UN Trade and Development Chief Rebeca Grynspan talked to our Richard Quest and argued for price controls as an alternative in the inflation fight.

(BEGIN VIDEOTAPE)

REBECA GRYNSPAN, SECRETARY-GENERAL, UN CONFERENCE ON TRADE AND DEVELOPMENT: Well, we think that we are in a severe downturn. A global recession is not

inevitable, but if we continue this path, I think that we will have a recession.

RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS.": Right, but you say in a statement, "There is still time to step back. We have the

tools to calm inflation and support vulnerable groups."

Well, that is higher interest rates. They are coming and they're coming further and faster. What tools do you now want to help others?

GRYNSPAN: Well, what we are advocating for is not the direction of the interest rates. We understand that interest rates have to go up.

We are questioning the intensity and the speed because the economy cannot adjust so rapidly to an instrument that is so blunt, like the interest

rates.

So don't leave alone, the Central Banks to fight inflation.

QUEST: They are independent Central Banks, have, as their main concern the inflation target in their own countries. And we're likely to get

another three quarter percent from the Fed and the Bank of England, et cetera, et cetera.

So, how can you tell banks, Central Banks, not to go so far and fast when they're basically saying it's necessary?

GRYNSPAN: Yes, I understand that Central Banks will do that if there is nothing happening on the other side. For example, in Europe, they are

proposing price controls, for example. We know that speculative behavior is a very important part of inflation in many of the commodities. We know that

there is markups in markets that are very concentrated.

So, if we don't have regulation for speculation, if we don't have price controls, and we don't control, and we don't have antitrust measures, so

the only tool that you are left with is the interest rates, and then if you have to use the interest rate, so far as it has -- it is happening, so you

will have a recession.

QUEST: Price controls are very 1970s. Haven't they been -- with the exception of Israel, which has always trotted out as the example of it

working in specific examples or unique circumstances -- aren't price controls a bit passe?

GRYNSPAN: No, no, they're not. Well, Europe is discussing price controls, isn't it, to protect consumers from energy prices.

If you have markups and you have concentrated markets, why you can -- why don't you regulate? Why wouldn't you put some regulation to really control

inflation that way? Why everything has to be interest rates?

There is no reason for not bringing a pragmatic policy mix into the discussion. One ingredient is not enough to bring inflation down when there

are several forces, part of what we are seeing as this cost of living crisis.

(END VIDEOTAPE)

ASHER: As I mentioned, US President Joe Biden is tapping once more into America's oil reserves. His move comes as the Democrats battle high gas

prices ahead of the midterm elections.

(COMMERCIAL BREAK)

[15:16:29]

ASHER: US President Joe Biden is again tapping into America's emergency oil reserves to tame high gas prices. Pump prices have been edging up since

OPEC's decision to cut oil production earlier this month, though they are well off summer highs driven by Russia's invasion of Ukraine. They have

become a political headache for Democrats ahead of the midterm elections. Biden though says this release of 15 million barrels of oil is not

politically motivated.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: With my announcement today, we're going to continue to stabilize markets and decrease the prices at a

time when the actions of other countries have caused such volatility, and I've told my team behind me here to be prepared to look further -- look for

further releases in the months ahead if needed.

(END VIDEO CLIP)

ASHER: Matt Egan joins us live now from New York.

So Matt, this is part of the tail end of a promise that he made back in March. How far will this go to actually alleviate prices, do you think?

MATT EGAN, CNN REPORTER: Zain, probably not very far. You know, 24 hours ago, it looked like the impact might have been bigger because oil prices

were down sharply. They basically recovered all those losses, so we're back to where we were.

You know, this is not entirely new. The President said back in late March that that he would release 180 million barrels of oil from the reserve.

They were about 15 million barrels shy and now, they're going to go and do what they said they were going to do.

I don't think that we shouldn't expect a dramatic impact here for consumers, but I think this does speak to just how laser focused the

administration is on this issue.

I mean, if gas prices go up, that makes inflation worse, it lowers consumer confidence, it upsets voters, of course. So, they don't want to see that.

They want to do everything they can to try to keep a lid on prices.

And you know, they've been using the emergency reserve more aggressively really than any of their predecessors. I mean, this reserve is down by

about 34 percent since President Biden took office in January of 2021. It is actually at the lowest levels since 1984. A time when, of course, the US

economy was much smaller, and demand for energy was smaller as well.

But that also speaks to the fact that we are in this unusual circumstance where one of the world's largest producers of energy, Russia is involved in

a war in Europe, and the United States, and the EU, and a lot of other countries are punishing Russia.

And so, there is a lot of uncertainty about what happens to Russia's energy flows, and I think that is another reason why the President came out and

made this big show of finishing this 180 million barrel release from the emergency reserve.

ASHER: That is interesting, because the administration says that, look, this is not politically motivated, but you can't obviously ignore the fact

that the midterms are about three weeks away.

Another priority at this point, though, now that he has made this announcement, is filling or refilling the reserves, too.

EGAN: Right, and they want to make clear that they are committed to doing just that at the right price. I think that they have said that around

$70.00 a barrel is when they would start to refill this emergency reserve. That is also sort of acknowledging some of the concerns that may be the SPR

is too low right now. It does still have 400 million barrels of oil, but they're trying to show that they're going to try to refill it.

And the other signal they want to send here is to oil producer because remember, the free market in the United States, the Energy Secretary does

not get to control production here and so, they are trying to put a bottom on floors to incentivize US oil companies to drill more oil.

[15:20:15]

I do think, Zain, it is sort of awkward here because you have the President on the one hand cheering the release of fossil fuels for the emergency

reserve, and also cheering the fact that oil production in the US is up, while also championing clean energy and this move towards clean energy in

the coming years. You know, it's just another reminder of sort of this tension between the President's climate ambitions and the current economic

reality.

ASHER: Yes, that's a good point. Matt Egan live for us there. Thank you so much.

Vladimir Putin has declared Martial Law in regions of Ukraine that Russia recently claims to have annexed.

(BEGIN VIDEO CLIP)

VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): In this regard, let me remind you that in the Donetsk People's Republic, the Luhansk

People's Republic, as well as in the Kherson and Zaporizhzhia regions, Martial Law was in effect before joining Russia.

Now, we need to formalize this regime within the framework of Russian legislation. Therefore, I signed a decree on the introduction of Martial

Law.

(END VIDEO CLIP)

ASHER: The regions are not entirely under Moscow's control and Russian forces are in retreat in Kherson where the Kremlin installed authorities

are now evacuating civilians. Up to 60,000 people are expected to leave over the next six days as Ukraine's counteroffensive continues to reclaim

territory.

Matthew Chance joins us live now from Moscow.

So, Ukraine is saying that this Martial Law will allow Putin to impose even tighter restrictions, including forced relocations. What is the Kremlin

saying about this -- Matthew.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I mean, the Kremlin is saying that they are imposing this Martial Law to ensure the

security of the areas they are still in control of, and they are rejecting, of course, any criticism that there are forced deportations underway, you

know, basically saying that these people, these civilians, are being moved out of harm's way, in an acknowledgement of Ukrainians -- the Ukrainian

military's advance in that southern-eastern part of Ukraine towards, you know, Kherson, which is currently for the most part occupied by Russian

forces.

But I think, you know, of more significance rather than the Martial Law inside Ukraine that Russia has imposed, it is the security measures that

have come alongside that inside Russia proper, along the border, the provinces there, border with Ukraine, they've really tightened up security,

basically, something very close to Martial Law there as well with travel restrictions in place, vehicle checks, a lot more presence of the military.

There have been a lot of attacks from inside Ukraine into those border areas, and so I expect this reaction to that.

But also elsewhere across the country as well, deeper to the east towards Moscow, elsewhere, provincial leaders have been given the authority to

impose restrictions of that kind whenever they see fit, and it is not been exactly made clear what restrictions will be put in force in places like

Moscow. Though the Mayor of Moscow says that he doesn't expect that the tempo of everyday life for Muscovites will be affected.

But nevertheless, this is clearly a demonstration by the Kremlin. They're not prepared to back down, they're going to double down, which is what

they're doing and if anything, tighten their grip on the country, particularly in the aftermath of the upsurge in criticism that has been

experienced here because of the succession of military defeats of the Russian Armed Forces on the battlefield.

ASHER: Matthew Chance live for us there, thank you so much.

In today's "Connecting Africa," we are zeroing in on zero waste farming. It's achieved by putting crops, fish, and animals together in a way that

mimics Mother Nature.

As Eleni Giokos discovered, this model is also growing jobs and food security across the continent.

(BEGIN VIDEOTAPE)

ELENI GIOKOS, CNN ANCHOR AND CORRESPONDENT (voice over):In Benin's capital of Porto Novo, you'll find an extraordinary enterprise.

About 37 years ago, Father Godfrey Nzamujo began farming with one acre of land. Today, he says that's grown to 54 acres.

Here, as part of a circular economy, he carries out a zero waste farming model, a sustainable form of agriculture and aquaculture that mimics the

natural environment.

FATHER GODFREY NZAMUJO, DIRECTOR, SONGHAI REGIONAL CENTRE: So, what we're doing here, we are copying nature. We call it biomimicry.

GIOKOS (voice over): At the Songhai Centre, everything gets reused. Animal waste and wastewater is collected in what Father Nzamujo calls a

biogas digester. Methane and fertilizer is produced from this process generating energy, which partly powers the centre.

[15:25:04]

NZAMUJO: So underneath is a big chamber that is harnessing all those things producing the gas you see here. So, it is producing two things for

us -- natural fertilizer and the gas for energy.

GIOKOS (voice over): His zero waste approach doesn't end with producing fertilizer and energy. By introducing microbes into a water mixture, it

also generates algae and other nutrients, which is used to feed his fish.

NZAMUJO: We call this sink, nutrients energy sink. Everything is collected here. The algae can harvest between sixty to eighty, ninety

percent of the solar energy through the bacteria we call photosynthetic bacteria. Incredible.

GIOKOS (voice over): Using aquaculture to make energy and grow the algae, which in turn feed the fish, Father Nzamujo says, it is a perfect example

of a sustainable blue economy.

NZAMUJO: So, this is what we are harnessing today, deploying them to start this new movement of an economy that is sustainable, that is

regenerative today.

GIOKOS (voice over): Seen as a success, the Songhai model is being replicated in 25 countries across Africa according to Father Nzamujo. Young

entrepreneurs are being taught zero waste farming practices, with the goal of creating jobs, increasing food security, and sharing of vital knowledge

across the continents.

Eleni Giokos, CNN.

(END VIDEOTAPE)

ASHER: Netflix says their subscriber losing streak is over. The company says it gained two-and-a-half million subscribers this quarter and it is

hoping for even more as they launch their ad-supported subscription option. That's next.

(COMMERCIAL BREAK)

ASHER: Wall Street's rally is drawing to an end as US markets go lower today. Better than expected corporate earnings initially lifted markets.

Those gains dampened by reports of rising costs and alarming inflation data out of the UK.

The Dow is down half a percent. The S&P 500 is down even more. NASDAQ is off almost a full percent.

[15:30:12]

The Fed is trying to avoid past mistakes in its fight against inflation. The former bank's vice chair says it will not be easy. His latest book is

called "A Monetary and Fiscal History of the United States." He says where he thinks the U.S. economy is headed and offered his thoughts on Biden's

claim that the U.S. is not headed toward a recession.

(BEGIN VIDEOTAPE)

ALAN BLINDER, FORMER VICE CHAIR, U.S. FEDERAL RESERVE: It is a two sided risk. So I was about to say the recession could be worse than that. It is

also the case that maybe we won't have a recession at all.

I think a mild recession is a reasonable expectation or guess and I do think, importantly -- and that is one of the reasons I just said what I

said -- that is what the Fed wants. Jay Powell and friends, while getting criticized for this, are not trying to slam the economy into the ground.

They are trying to let the steam out and fight inflation that way.

RICHARD QUEST, CNN HOST: Richard Clouder (ph), who you know well on this program, basically said we got it wrong in late 2021. We got that data and

we should have moved earlier. That is sort of an admission in a sense that everybody agrees with.

And I am wondering, how you avoid doing it again?

(LAUGHTER)

BLINDER: That is a hard question. You watch carefully, you try to make better forecasts than the Fed made at that time. It is not always easy. You

remember there was this team (ph) transitory. The Fed was on team transitory, saying, this inflation will blow over quickly.

I was on team transitory. I thought the Fed's reasoning was sound. We were wrong about that. So sometimes you're asking me how do we avoid error, it

is very difficult except pay attention, watch the data, think it through carefully.

QUEST: Now the impossible question, if I may, sir, which is the unknown, which, of course, is the war in Ukraine, the exogenous event. God forbid it

gets much worse, then all economic bets are off. But by the same token, if there is he's got a conclusion, that would be of great benefit on energy

costs.

BLINDER: One of the reasons we got it so wrong and the Fed got it so wrong and I got it so wrong in a lot of people did, we did not anticipate that

Russia was going to invade Ukraine and shoot oil prices up and food prices up at rates that they hadn't risen in many years.

That is a fact. We didn't see it coming, we didn't factor it into our forecast. I don't think that is what economics is supposed to do or anybody

thinks it is supposed to do. So that is one reason why we missed the way we missed.

If that should end suddenly, which again I am not forecasting and don't know that anybody is forecasting, that would be wonderful. That would be

just terrific.

QUEST: Markets, I mean, I was just talking earlier in the program, the markets are down heavily. Nasdaq is down 30 percent. There is, of course,

the idea that they will come back. Let's face it if they don't come back, we'll have bigger problems than that. But they will come back in the

fullness of time.

I just wonder, we have to live in a world now where investors can't rely on cheap money.

BLINDER: Well, I think the kind of cheap money that we got accustomed to for a while there, say between 2008 and 2020 or '21, is a thing of that

past. And I won't say we will never go back to that.

But I actually hope we won't go back to that because the reason for zero interest rates or even negative interest rates in Europe, were dead in the

water economies. And the central banks desperately trying to get them out. So I don't think we will go back to, that I hope we won't.

But I think we will go back to lower interest rates that we are seeing now. As the Fed succeeds in the fight against inflation -- and I think they will

succeed slowly -- interest rates will go down.

(END VIDEOTAPE)

ASHER: With a surprising turnaround for Netflix, the company added 2.5 million subscribers in the third quarter, twice as many as they had been

expecting. Its stock is up over 13 percent.

Netflix spent the first half of this year bleeding customers. Now it is set to launch a cheaper ad-supported subscription in November to try to attract

even more subscribers.

[15:35:00]

That opens up the possibility that some customers will trade down to save money. Netflix says it doesn't see that happening, though. Frank Pallotta

joining us live from New York.

Let's talk about the new subscriber addition, 2 million more subscribers, both of them coming from Asia. Here in the United States, though, it was a

very small amount; just 100,000 added.

FRANK PALLOTTA, CNNMONEY CORRESPONDENT: And I think that is a really big problem for them. And I think, give credit where credit is due. It has been

a terrible year for Netflix. And last night's report was spectacular. They expected 1 million subscribers and, as you said, they brought in 2.4

million subscribers.

But let's really look away from this and start thinking about the macro issue of Netflix right now. Its stock is down 55 percent year to date. That

is a major problem. It's only gained 1.2 million subscribers so far this fiscal year. That is a problem.

And as you said, United States and Canada is struggling to find growth. That is their biggest region. It is no longer their biggest region, because

it just fell a little bit under some of the international markets.

But it is very important for that region to be healthy and they are not seeing the type of growth that they need. So credit where credit is due.

This was a great quarter. But I wouldn't be popping champagne just yet. There's a lot of challenges ahead for Netflix.

ASHER: But they do have some ideas in terms of how to fix things. One of the things that Netflix plans to do, at least next, year is to crack down

on password sharing. Walk us through that.

PALLOTTA: A lot of people are going to be calling their parents right now, being, like, hey, mom and dad, oh no, I'm sorry. But no, in all

seriousness, this is a really inflection point for Netflix in that it is transforming from a kind of super growth tech company that it was known for

the last decade and kind of into a more maturing media company.

What do I mean by that?

For the last five years, it has all been about how many subscribers, how many subscribers, how many subscribers. That is not really as important

anymore and Netflix said as much considering they're not even going to put forecasts out anymore, starting next year when it comes to their

subscribers.

They will still forecast for revenue, because revenue is important. Now that leads to what you are just talking about, the password clamping down

and most importantly this new ad tier, which they're going to debut next month for 6.99 in the United States and around the world in many markets.

This is where they can really bring in the type of money that they need to bring in. And that is because, at the end of the day, it is not necessarily

about growth anymore. It is kind of peaked in many ways. I think there's still a lot of growth maybe ahead of. It but what it really does matter is

how much money it is bringing in and how much profit it is bringing in. That is what investors are really looking, for now.

ASHER: Right, Frank live for us there. Thank you very. Much I have a lot of people who actually have my Netflix passwords. I need to work on. Frank,

thank you so. Much

Hong Kong's new chief executive says the government will stand at nearly US4 billion U.S. attracting business to the city. John Lee admitted,

140,000 workers have left in the past two years. Now the city wants to bring back talent. Selina Wang has more.

(BEGIN VIDEOTAPE)

SELINA WANG, CNN CORRESPONDENT: Hong Kong wants to reverse its brain drain. The city's leader, chief executive John, Lee announced a new

initiative to attract more workers, including plans to give two year visas to high earners and top graduates.

Hong Kong has been dealing with a mass exodus amid some of the world's strict pandemic curbs that they've only recently started to ease. In

August, Hong Kong logged its biggest population drop since officials began keeping track of the numbers in 1961. Take a listen to what the chief

executive said.

(BEGIN VIDEO CLIP)

JOHN LEE, HONG KONG CHIEF EXECUTIVE (through translator): Over the past two years, the local workforce shrank by 140,000. Apart from actively

neutering and retaining local talents, the government will protectively trawl the world for talent.

(END VIDEO CLIP)

WANG: Lee also announced that the government would earmark 30 billion Hong Kong or US3.8 billion for a new fund aimed at bringing more businesses in.

Hong Kong is the Asian base for many global companies, including top banks and financial firms.

The former British colony has traditionally been seen as a friendly international gateway to Mainland China. But since the pandemic, its

reputation for openness and ease of business, have fallen. While rival hub Singapore's reputation has increased.

Earlier in the pandemic, inbound travelers to Hong Kong had to spend 21 days in hotel quarantine. That damaged the city's economy and led many

global companies and expats to move elsewhere.

Hong Kong has removed that hotel quarantine. But there is still a long list of rules for inbound travelers. I recently flew into Hong Kong and had to

undergo seven days of rapid antigen COVID tests, several days of PCR tests at community facilities and, for my first few days, I also had to restrict

where I could go.

[15:40:00]

It remains to be seen if Hong Kong's new initiatives will be enough to rebuild its status as a global business and financial hub -- Selina Wang,

CNN, Hong Kong.

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ASHER: All right and that is QUEST MEANS BUSINESS. I will be back at the top of the hour as we make a dash for the closing bell. Up next,

"MARKETPLACE AFRICA."

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ASHER: Hello. It is a dash to the closing bell right. Now we are literally just about two minutes or so away.

Netflix shares are jumping on the back of yesterday's earnings. The rest of the market, not so much. The Dow is actually off session lows as you saw

there, down about 150 points. As mentioned though, Netflix is doing well.

Netflix gains aren't enough to lift the Nasdaq. It is down over 1 percent.

In the meantime, let's talk about the U.K. now. The U.K. government is facing more upheaval with the home secretary resigning. Inflation there

also getting worse. Economist Adam Posen says the Bank of England has a tough challenge on its hands.

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ADAM POSEN, ECONOMIST: It is not just goods, it is services. It is things like transport and rent that you're talking about. And so they are more

like the U.S. than the euro area. You can't just say it is food and energy.

So the Bank of England was already arguably behind the curve on raising rates before the Truss-Kwarteng mini-budget blew a further hole in policy.

So I think the Bank of England has a long way to go.

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ASHER: All right, let's take a look at the Dow components. Travelers on top about 4 percent. It beat on earnings but profits are. Down Chevron's,

up as. Well all right, that is your dash to the. Bell. I'm Zain Asher. The bell is about to ring on Wall Street.

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