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Quest Means Business
Power Gradually Being Restored In Kyiv After Strikes; Lula Da Silva Wins Razor-Thin Victory Over Bolsonaro; Israel Prepares For Fifth Election In Four Years; Musk Criticized For Spreading Misinformation; Report: Twitter Considers Charging For Verified Status; Fed Has Raised Rates Five Times This Year To Fight Inflation. Aired 4-5p ET
Aired October 31, 2022 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:25]
RICHARD QUEST, CNN INTERNATIONAL HOST: They have the closing bell ringing on Wall Street, down 1207 and 32,734. The Dow is closed for the day now,
the markets and the main events of the day to bring to your close attention.
Russia says it is stepping away from the humanitarian deal that allowed grain from Ukraine to reach global markets.
Elon Musk tweet a fringe conspiracy about Paul Pelosi and confirmed fears about his ownership of Twitter.
And Lula da Silva elected to tackle inequality after winning Brazil's presidential election.
Live from New York, Monday, October the 31st. I'm Richard Quest, and I mean business.
Now, good evening. If you are wondering why the market has closed when it normally doesn't, because of course, Europe and where you are changed the
clocks, but the US doesn't change the clocks for another week or so and we want to make sure we are with you, at the same time every night. So that's
why it's actually four o'clock in New York here and the market has now closed.
But to our agenda tonight, which of course is the crucial aspects. Ukraine says it is restoring power to major cities after a wave of missile strikes.
The lights are back on in some places in Kyiv after Russia and missiles knocked out power and water across the capital.
The Mayor of Kyiv says one attack struck a power facility serving 350,000 homes, 40 percent of the city's homes and businesses were without water.
Other cities hit, too, including Kharkiv, where subway services were disrupted.
Clarissa Ward is in Zaporizhzhia and joins me now.
Clarissa, I mean, it's a bit of sort of -- Russia attacks; Ukraine then does whatever it can to sort of get things back on again, whether it be
subways, electricity, water. How much longer can this go on, where you know, Russia just has to keep destroying more infrastructure and Ukraine
can't keep up?
CLARISSA WARD, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, this is what the Ukrainians are worried about and this is why you're seeing them coming
out yet again, saying to the international community, and particularly to their allies that they need more of these air defense systems.
This is now the third or fourth Monday in a row that Russia has started off the week with a salvo of rockets and missiles targeting critical
infrastructure. Now, Ukraine has been getting quite a bit of support in the form of air defense systems. And to that end, according to the Ukrainian
Air Force, they were able to intercept 90 percent of those missiles. Forty of the more than 50 that were fired at Ukraine were intercepted.
But still, the ones that did get through were able to strike 18 different installations in 10 different regions and caused a hell of a lot of damage,
and the reality is that while the Ukrainians are very fast, Richard, at trying to build back capacity again, they are finding it more and more
tough to contend with the amount of damage that has been done.
We're here in Zaporizhzhia, as you mentioned. Some 200,000 households were without power today. The local hospital, the children's hospital were all
operating on emergency power. And you can probably see behind me, the entire city is blacked out.
People are being told to conserve whatever energy they possibly can. In Kyiv, they were being told to go and collect water to store it because
there is a sense that this isn't going away, this problem, and it is only going to get worse especially as temperatures get lower -- Richard.
QUEST: You see this -- it is a completely different -- a completely different scenario, but I am always reminded of that famous quote, you
know, "We only have to be lucky once, you have to be lucky every time." Now that was said under very different circumstances, but it is sort of
parallel here, isn't it, Clarissa?
You know, Ukrainians have to keep hoping the Russians don't keep lobbing stuff over, lobbing and firing missiles and the Russians have to hope they
don't run out before they've managed to do some fatal damage to the infrastructure.
[16:05:00]
WARD: That's right and that's why the Ukrainians are asking not just for air defense systems, but they also understand that they need to build up
their capacity and so to that end, they've actually run out of equipment to rebuild these power grids now, Richard.
So we saw Dmytro Kuleba, the Foreign Minister come out today and ask, particularly, you know, allies in NATO, can you help, can you supply us
with more equipment that will enable us to repair the damages to the grid more quickly?
We've also heard Ukrainian authorities asking Ukrainians who are living outside Ukraine at the moment who moved during the beginning of the war,
don't come home this winter, because this country cannot take the strain that that would put on the grid.
And the President himself, Volodymyr Zelenskyy has warned Ukrainian people, this is going to be an unbelievably tough winter ahead.
As I said before, this is not a problem that is going away. The Ukrainians are trying to find ways to contend with it, but it is persistent, and it is
very detrimental to Ukrainian morale and to civic society.
QUEST: Clarissa, thank you. Clarissa Ward in Ukraine.
So now to the grain situation, Turkey is trying to keep the so-called Black Sea Green Initiative alive with or without Russia's participation. You'll
be aware Russia has decided to withdraw from the program, which is designed to allow Ukrainian grain to reach global markets. It is all part of a
humanitarian effort.
Turkey's President Erdogan says the grain exports are needed to prevent a global food crisis. However, Moscow says the deal is risky and dangerous
without its backing. It is basically blackmailing, saying that it will make the chips so dangerous they can't sail.
However, Ukraine did say a dozen ships left on Monday with the help of the UN and Turkey.
Lloyd's of London's insurer, Ascot says it won't write insurance cover for new shipments along these corridors until it better understands the
situation.
With me from Ascot is Chris McGill, who joins me now.
Sir, so just before we get into the sort of the minutiae of it, are you ensuring grain shipments at the moment from Ukraine.
CHRIS MCGILL, HEAD OF CARGO, ASCOT GROUP: Thanks for having me on the show. So this world today, we're currently insuring some vessels that have
commenced their voyage, that have already left.
So, we've honored quotes that we've put up in the past and any insurance that was bound, before Saturday, still stands and we are now just taking
the time to pause and review new shipments as they come in, and try and get some details from the ground, from our clients in Ukraine to figure out how
they feel the next period will go. We're very keen to reengage.
QUEST: It is extremely complex, I understand that, and I mean, insurance is complex to start with. This is even more so.
And the difficulty, Chris, that you and Ascot had, because there's had to be a special contract initially, just to get the thing going in the first
place.
MCGILL: That's right, we actually -- the first idea actually started in May and before any kind of safe corridor or agreement had been put in
place. We wanted to make sure that the right -- the marine market could respond if it was called upon in very quick time, which we did.
But we set it up once a safe corridor had been defined, the Ukrainian ports have been designated and we could build insurance capacity behind us to
cater for those risks and provide the limit that clients would need on a syndicated basis.
Now that corridor is suspended. We're just taking that moment to reassess the risk and hopefully work with our partners to reengage once and
hopefully if a deal can be struck again, or an extension.
QUEST: I mean, this is the awful part about it, isn't it, in the sense that Russia's withdrawal from this, I understand that this is not sort of
your area per se, but Russia -- all Russia has to do is withdraw from this because the insurance aspect is crucial to anybody willing to risk ship and
lives going into the area.
MCGILL: Absolutely correct. The one thing I would say is there are 21 insurance carriers supporting us on our facility, so we're trying our best
to spread the risk as much as possible, so that we can actually provide this policy for our clients, but yes without Russia's involvement and
engagement in this transaction.
[16:10:10]
MCGILL: And helping to export these goods is very difficult for the insurance market to respond as we'd like to.
QUEST: However you believe, I mean, on wider issues. The difficulty the insurance market faces when insurance and geopolitics and strategic -- I
mean, insurance is used to war and war risk, and terrorists risk. So to that extent, it's not a complete unknown animal, but geopolitical risk is a
really difficult one for the insurance industry.
MCGILL: Yes, it's incredibly difficult. It's an unknown accumulation of risk that you can't really model per se, which is why we had to define and
set the parameters for this facility, so that everyone involved was fully comfortable with the way it was going to be underwritten, the exposures
that we were going to have, and everyone could manage their accumulated exposures accordingly.
I think, if this is to continue, we really need to keep that control around the policy itself. So that underwriters feel confident to continue giving
the coverage, this was set up for this exact mission. So every insurer that's on the facility, and especially us want to help as much as we
possibly can, which is why we just need to see -- we need to see, first of all whether vessels are able to be manned and crewed, because if crews are
willing to set sail, then we need to be able to try and support them.
But you know, we might not see vessels leave. We saw a few leave today. But it will be interesting to see if we see more leave in the coming days.
QUEST: Chris, I'm grateful for your time this evening. Thank you. We'll talk more as this progresses and you're welcome back on QUEST MEANS
BUSINESS. Thank you, sir.
To show how difficult this whole business is, India's Oil Minister says he has no moral qualms buying Russian energy. And the Minister played down the
Indian government's involvement in purchasing oil from Moscow.
He was speaking to Becky Anderson, when he said India will buy from wherever it can get it.
(BEGIN VIDEO CLIP)
HARDEEP SINGH PURI, INDIAN PETROLEUM AND NATURAL GAS MINISTER: We owe our moral duty to our consumers. We have 1.34 billion population, and we have
to ensure that they are supplied with energy, whether it's petrol or diesel.
We were the only country in the world, which at the time when we were feeding 800 million people three meals a day, which we are still doing, the
government reduced its revenue in order to make sure that prices at the petrol bunk didn't go up.
You know, we have 60 million people go into the petrol pumps --
BECKY ANDERSON, CNN INTERNATIONAL HOST: There is that moral conflict with buying Russian oil.
PURI: Oh, absolutely none. Absolutely none. There is no moral conflict. I mean, somebody wants to take an ideological position. Well, we don't buy
from X or Y, we buy whatever is available and I don't do the buying. It is the oil companies who do the buying.
ANDERSON: Let's be quite clear about this. India is a backdoor into Europe for Russian oil at the moment. I mean, you're talking about the --
and let me just finish.
You're talking about the oil that comes in and is used for, and you said there is no moral issue with this in providing energy for 1.4 billion
people. But let's be quite clear, Russian oil is imported. It is refined and then it is exported to Europe, sir. That is the backdoor for --
PURI: That was done by some private sector companies, not by the OMCs. Who buys Russian oil? Where it is refined?
ANDERSON: You are denying that is happening.
PURI: No, no there is no question of -- I have no -- we have nothing to do with that.
First of all, the government doesn't do the buying. Let me be very clear. Oil trade is conducted by economic entities, all right, today I met the
Minister from Guyana. They've got production, we'll buy from there. We are buying from Canada.
You know something? I bought last year from the United States $20 billion worth, which is almost half of what I buy from OPEC. No, we will buy oil,
gas from wherever we can get it.
(END VIDEO CLIP)
QUEST: So now to Brazil, the elections where Jair Bolsonaro is refusing to concede. He narrowly lost in Brazil's presidential election. It's very
narrow, but now he hasn't said he lost. It raises all sorts of issues. We'll talk about them after the break.
QUEST MEANS BUSINESS. Good evening to you.
(COMMERCIAL BREAK)
[16:17:09]
QUEST: So to Brazil where divisions are on full display the day after a bitterly fought election. Luiz Inacio Lula da Silva defeated the incumbent,
Jair Bolsonaro by roughly two million votes. President Bolsonaro has not yet conceded and that raise fears he might be challenging the result.
His supporters are blocking key national highways to protest against Lula's victory.
For those who voted for Lula, they were in the streets rejoicing.
CNN's Paula Newton is in Sao Paulo.
(BEGIN VIDEOTAPE)
PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT (voice over): Supporters partied like it was 2003, the last time Luiz Inacio Lula da Silva was swept
into power in Congress to transform Brazil for a new century. He is now pledging to do it again. These women, just babies when Lula was first
elected hail him now as their political savior.
UNIDENTIFIED FEMALE: I am just so, so, so happy.
UNIDENTIFIED FEMALE (through translator): So, so, so happy. We couldn't take any more of Bolsonaro, we can dream again.
NEWTON (voice over): Lula cemented an improbable political comeback destined now for the history books. He walked out of prison less than three
years ago, appealing corruption convictions.
After they were thrown out, he mounted a campaign to defeat conservative populist Jair Bolsonaro.
LUIZ INACIO LULA DA SILVA, INCOMING PRESIDENT OF BRAZIL (through translator): I consider myself a person who has been resurrected in
Brazilian politics, because they tried to bury me alive and I'm Here.
NEWTON (voice over): A gratified Lula pledged Brazil is back for its citizens and the world.
LULA DA SILVA (through translator): From January 1st, 2023, I will govern for 215 million Brazilians and not just those who voted for me. There are
not two Brazil's, we are one country, one people, one great nation.
NEWTON (voice over): Lula supporters flooded the streets of Sao Paulo relishing a fresh start.
(CROWD chanting.)
NEWTON (on camera): Despite this victory, uniting this country now will be difficult and quite a challenge for Lula, as he also considers a very
determined opposition.
NEWTON (voice over): Bolsonaro did not formally concede on Election Night. The last time Brazilians saw their President was when he voted, but
even the head of Brazil's Congress, a Bolsonaro ally, allowed Lula supporters their victory, saying Congress accepted the outcome.
This Lula supporter says "The war," in her words, "The culture war that Bolsonaro leaned into is not over."
AYLA RAMALHO, SUPPORTER OF LUIZ INACIO LULA DA SILVA (through translator): Look at the amount of votes this man had, even after share everything he
has done, almost half of the votes, the difference was really small.
[16:20:08 ]
NEWTON (voice over): This is Lula's victory, but no longer Lula's Brazil. Years of division and political acrimony have taken their toll blindsiding
this democracy, and it could yet challenge this President like ever before.
Paula Newton, CNN, Sao Paulo.
(END VIDEOTAPE)
QUEST: Now, the political divisions that he will need to mend or any parts of the problem, if he is to lead South America's largest economy. The
numbers are startling, gross inequality with nearly 10 million people below the poverty line during COVID, and inflation above six percent.
The President-elect says tackling food insecurity is his most essential goal once he takes office.
Monica de Bolle, Senior Fellow at the Peterson Institute for International Economics, is with me, what do you say -- well, first of all, I mean,
Bolsonaro has to concede so there can be a proper transition. If he doesn't, bearing in mind, essentially the country's spirit, it could get
very ugly.
MONICA DE BOLLE, SENIOR FELLOW, PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS: It could. Frankly, I don't think he's going to concede. He
won't challenge the elections either. So, he is not going to mount as we saw, for example, in the US an entire campaign of fraudulent elections or
anything like that. He doesn't have the space to do it.
Authorities have already manifested themselves, speaking of the legitimacy of the elections, and his allies, also don't want him to do this because
many of them just got reelected. So, he is not going to contest the elections, but, he is not going to concede either, which is going to make
the transition very difficult.
QUEST: And Lula, what is he going to do first of all?
DE BOLLE: Well, his main priority, at least according to what he has been saying, throughout the campaign is to fight poverty, hunger, and
malnutrition amongst children, all of which have risen sharply after the pandemic, but not just because of the pandemic, also, because of ill-
conducted economic policies by the government of Bolsonaro.
So these things he could do, but we have yet to know what kind of fiscal deficit Brazil is actually departing from to see how much he can spend on
social programs.
QUEST: And then, you've got the whole question of the investment scenario, the environment for external investors.
Every time I go to Brazil, one is always incredibly impressed by the potential and then somewhat dispirited by the lack of reality.
DE BOLLE: Yes, that's absolutely true.
I imagine -- I would imagine that, you know, the first year of Lula's government is going to be extremely hard, because there is a lot of
rebuilding that he needs to do, and Brazil basically needs to recover some political stability, because for the last more than four years, so even
before President Bolsonaro, Brazil was living through very turbulent times.
So in order to actually have a climate that is conducive to investment coming back, and specifically long-term investment, the country really does
need to go through a restructure process.
So the way it looks is, the first year is going to be hard. If Lula manages some policy wins in the first year, then things start to get better, and
perhaps, you know, by the middle to the end of his second year in government, things may start to look up.
QUEST: And in terms of the Congress that he has to work with, the nature of getting things through, which has been difficult in the past.
DE BOLLE: So Brazil has always had this situation where a President needs to form a coalition within Congress in order to govern because the politics
of the country is very, very fragmented. Lula got elected already with a coalition. There are 10 political parties in his coalition, but it is true
that he is going to face a more conservative Congress than even the one that is there now.
And some of Bolsonaro's allies have been elected to the Lower House as well as to the Senate. So, he is going to have a much, much tougher time than he
had in the two previous terms when he was President during the 2000s, that's for sure.
QUEST: Monica, if we sort of move away from, if you like, the hard facts, and give me your gut reaction, should we be worried about where Brazil is
now going?
DE BOLLE: We should definitely be worried. It is a matter of really should we be -- should we have been more worried that Bolsonaro got
reelected? Oh yes, that would have been much, much worse.
But should we still be worried? Yes, I would say we should, because the difficulties that the country is facing can't be exaggerated. There is just
a lot to face. There was a lot of destruction over the past four years, both on the institutional side, as well as on the economic side. So the
question really is, you know, will Lulu be able to pull it off, and that's out in the open?
QUEST: Thank you. Monica joining me from Washington. I'm grateful.
In just a few hours from now, well, maybe seven hours from now, the polls will open in Israel, where the cost of living is very much on the mind of
Israeli voters as Tuesday's election gets underway.
It is the fifth time in four years that Israelis have voted. There are dozens of parties. It is a complicated race, there will be a coalition
government of sorts, but really, you can boil it down to this man.
It doesn't matter which way you do it, we could get involved in huge discussions about policies on settlers or economics or corruption, but it
all comes down to whether the electorate wants to see Benjamin Netanyahu back in power.
Our correspondent in Jerusalem is Hadas Gold.
(BEGIN VIDEOTAPE)
HADAS GOLD, CNN CORRESPONDENT (voice over): The Bibi Show is back complete with a Bibi Mobile encased in bulletproof glass, aiming to once
again become the main attraction.
(UNIDENTIFIED MALE speaking in foreign language.)
TRANSLATION: Welcome to the next Prime Minister of Israel.
Mr. Benjamin Netanyahu.
GOLD (voice over): Polls show Benjamin Netanyahu does not yet have a clear path towards a majority. So, the former Prime Minister is trying to
pull every possible vote out of his base.
(BENJAMIN NETANYAHU speaking in foreign language.)
TRANSLATION: Don't be despondent. Be turbo-charged.
UNIDENTIFIED MALE: Bibi is King of Israel. Bibi is King of Israel.
GOLD (voice over): And just like the previous four elections in just over three years, for most Israeli voters, the question at the ballot box will
be whether they want Netanyahu or not.
ANSHEL PFEFFER, AUTHOR, "BIBI: THE TURBULENT LIFE AND TIMES OF BENJAMIN NETANYAHU": We're
not talking about any other policy issue really beyond Netanyahu and what Netanyahu will do on the day after the election.
GOLD (voice over): Netanyahu's ongoing corruption trial where he faces charges including bribery, fraud, and breach of trust -- charges Netanyahu
denies will be his first priority, analysts say.
YOHANAN PLESNER, PRESIDENT, ISRAEL DEMOCRACY INSTITUTE: That perhaps firing the Attorney General, those kinds of maneuvers that will allow him
to free himself from the legal process that he is facing, and to deliver the goods to his political allies.
GOLD (voice over): Those political allies will likely include the far right-wing of Israeli politics, people like Itamar Ben-Gvir, an extremist
who has been convicted for supporting terrorism and inciting racism, now expected to help garner at least 12 seats for Netanyahu's bloc.
He was once an outcast of Israeli politics, known for his ardent support of settlers and inflaming Israeli Palestinian tensions. just last year,
Netanyahu said Ben-Gvir wasn't fit to serve in the Cabinet, but now desperate for his votes, Ben-Gvir certainly could get a ministerial
position Netanyahu said this month.
PFEFFER: And then the question is, what does the price that the far-right is going to extricate from him? Will it be perhaps canceling the
Disengagement Law from 2015, meaning that perhaps some settlements in the West Bank, which were in the past abandoned by Israel will be built and
reoccupied, and perhaps further steps towards some type of annexation in the West Bank.
GOLD (voice over): But at least one former adviser says Netanyahu won't make any extreme moves because the alliance with Ben-Gvir won't last.
MOSHE KLUGHAFT, FORMER NETANYAHU STRATEGIST: Netanyahu's strategy work for the short term, and then for another short term and another short term,
and not for the long term.
GOLD (voice over): Sixty-one seats are needed to form a government and if he wins, Netanyahu has denied that he will try to quash his trial, or that
the extremists will have power.
BENJAMIN NETANYAHU, FORMER PRIME MINISTER OF ISRAEL: Well, I wouldn't do anything that affects me -- I think my trial is unraveling as it is.
I've had such partners in the past, and they didn't change an iota of my policies.
GOLD (voice over): But before he can decline such policy ideas, he will need to claw his way back to power, one Parliamentary seat at a time.
Hadas Gold, CNN, Jerusalem.
(END VIDEOTAPE)
QUEST: This time tomorrow, we will have the exit polls. A special program, I'll be with you this time tomorrow because the polls close at
10:00 PM in Tel Aviv, which is just about -- you know, it would have been half an hour ago, but I mean, you get the idea.
So join me tomorrow here on CNN. We will have the closing of the polls, the first exit polls, and analysis of where this means even though it'll take
weeks to get the government perhaps. We will certainly let you know which way it is going.
QUEST MEANS BUSINESS tonight, Elon Musk said he didn't want Twitter to become a hellscape. Now, who knows what it is being called after it is
being called out for spreading misinformation when the new owner has been guilty of exactly that.
(COMMERCIAL BREAK)
[16:30:21]
QUEST: With one tweet, Elon Musk demonstrated why so many people are concerned about the direction that he might take Twitter. The social media
giant's new owner amplified a baseless conspiracy theory about the violent attack on Paul Pelosi. He deleted the tweet. Not however before it had been
retweeted 28,000 times. The billionaire is also reportedly considering charging users $19.99 a month for verified accounts.
Donie is with me. Donie O'Sullivan in New York. I've looked at all the weekend stuff over Twitter. I think this thing with tweeting the
disinformation or at least, you know, it was classic. It's almost Trumpian. I'm not saying this happened. But there are people who are saying this
might have happened. And maybe we should take a look at it. That's what he did, isn't he?
DONIE O'SULLIVAN, CNN CORRESPONDENT: Precisely. And look, I think this is the real challenge and frustration, right? Because there are people who
work at Twitter whose job it is, especially right now here in the U.S. with the midterm elections and with the Brazilian elections over the weekend.
There are people, there are teams at Twitter that work in trying to counter misinformation and disinformation.
And then you have the new owner tweeting out a link to a story about Paul Pelosi to -- by the way, just a junk news Web site. That same Web site back
in 2016 actually claimed that Hillary Clinton was dead and that the person we're seeing on the campaign trail was a body double. So, you know, if
Twitter has a misinformation problem, it is at the very top right now. What we did also hear today, Richard, was, you know, given the concerns of all
of this with Musk taking over that reportedly he did tell the European Commission that Twitter, his volume of -- his version of Twitter would
comply with all E.U. laws.
QUEST: Donie, I'm just looking at you on Twitter at the moment. You have a blue tick next to your name. How much do you value your blue tick?
O'SULLIVAN: With all my heart. So here we go, it's going to be $20.00 a month, we hear at least from people inside the company. If you are a person
with a blue tick and you want to keep that blue tick, that verified tick, it's going to cost you 20 bucks a month. On the flip side, if you do not
have one, and you want to be verified on Twitter, you will now reportedly be able to get one if you're willing to pay $20.00 a month.
Why does this really matter? I mean, in one way it doesn't. But there is a function to this blue badge, right? Especially if you're an NGO or a
charity or an emergency service and you're tweeting out critical information, I would certainly personally hope to see that those kinds of
organizations aren't charged for it whatever about most journalists.
QUEST: Wow. But the -- hang on, hang on, hang on, hang on, Donie. It can't get away that easily. The reality is, this is clever pricing because Donie
O'Sullivan and perhaps for less let's say Richard Quest would hopefully hope that our lord's or masters at CNN will pay the $20.00 a month or big
corporations will do a deal for 1000 bucks a month and everybody in the corporation gets it. So this is clever pricing.
O'SULLIVAN: It's great. I mean, it's a great idea. I haven't talked to our boss yet, but I was crunching the numbers a bit today. I'm pretty sure, you
know, there are hundreds of CNN employees, for instance, that have verified badges. And again, it's important in cases because if you, you know,
sometimes as reporters, researchers and producers here will use Twitter to read sources, particularly in breaking news scenario.
So that blue tick is quite valuable and saying yes, we are a CNN. Now, our boss is going to be happy with hundreds of employees paying thousands of
dollars, tens of thousands of dollars in the cumulative just to Twitter every year. I'm not so sure.
QUEST: One way to watch, I'll tell you. I'm just going to -- all I'm going to say is that they've priced this -- I think it's priced high but they
priced it cleverly in the sense of they know a lot of -- a lot of organizations, corporations. It's a cost of doing business for many stars,
celebs or whatever. Anyway, we'll talk about it. Donie, thank you.
Now I have in front of me an enormous amount of candy. Well, trick or treating, look at it. We bought the cheap stuff. We really did. My
goodness. This will have your fillings out in half a minute. The chewy, the chew stuff, banana chews. And you don't want to try that too much. But for
years, the markets, investors we've all been on sugar high with low interest rates, cheap money, inflation is now soaring and this Halloween.
So how much candy are the central banks going to let us have? Are they going to wean us off the sweets completely? In five moves since March the
Fed has hiked rates 300 basis points. It's one of the most -- if not the most aggressive tightening campaigns in history. And of course this week,
we're going to get more. So the sugar high. Rahel Solomon who's probably not about to snuff away through all this amount of sugar.
Rahel is with me. This sugar highs lasted a long time. But you've got the numbers that show us how dramatic this rate rising has been.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Absolutely, Richard. In fact, this is not something that we have seen in modern history. I want to show
you even just the most recent rate hike cycle that we've seen. This was 2015, 2016 that you can see. How the Fed move gradually. You see that step
by step there, Richard, that's 25 basis points or over a quarter of a basis points.
And in the period of three years or 36 months, the Fed only raised the fed funds target range, 225 basis points. We have surpassed that. We are now at
300 basis points and just about seven months and we expect to move up another 75 basis points this week. About 400 basis points and just about
eight months. So this is something that is really unheard of in modern history. The problem, however, is that it doesn't appear that the medicine
is working.
It doesn't appear -- the data doesn't show that inflation is starting to abate and that is the problem. And so it really leaves the Fed in quite a
dilemma. Do you keep delivering these massive doses or do you just start to wait to see when the medicine will start to work?
QUEST: Right. You said the medicine doesn't appear to be working. Or do we just need to, you know, today's sugar high economy, millennials. Everybody
wants it yesterday. They all want to see the results tonight. They want the end by, you know the mystery sold by 11:00 in the news on television.
[16:10:07]
It doesn't work that way with monetary policy.
SOLOMON: Fair enough, Richard. Although as a millennial, I am going to push back and just say it is not a millennial thing. I think it is a human
nature thing that we want the pain to be over sooner rather than later. We want almost to the clarity of knowing that the worst is behind us. So not
just a millennial thing, a human nature thing, I think. But yes, you are right, there is, of course, a monetary policy lag of about six to nine
months.
So we are still just in the early days of this, but we're still not seeing it. And I would also argue, Richard, that it's not just the monetary policy
lag, consider the impacts to excess savings from the pandemic. I mean, the Fed just put out a report earlier this month that said, throughout the
pandemic, we accumulated $2.3 trillion in savings and try to wrap your head around this, Richard, we've only worked through a quarter of that. So
imagine what that's doing a consumer spending.
QUEST: Right. So that can cushion the higher interest rate.
SOLOMON: Right.
QUEST: It can also, which of course, can keep consumers spending, which will also keep employment unrealistically high unemployment numbers and
tight labor markets which means the Fed can't win because as you're right, without wall of money behind it, behind the consumer, they could keep
pushing rates up and it could take some time still to come.
SOLOMON: I mean, the -- that is absolutely it, right. I mean, is that a good thing? Is that a positive thing? Or is that a negative thing that
we're sitting on so much savings? Because on the one hand, the Fed can do more and we can perhaps absorb that a bit better, right, in terms of
spending, in terms of job loss. On the other hand, it's powering consumer spending, which we know part of the inflation certainly in the U.S., part
of this inflation story is spending.
It's the excess demand. So you know, you're damned if you do, you're damned if you don't for the Fed at least.
QUEST: Well, I think in that scenario, I -- do you want -- do you want a Dum Dums lollipop, a banana chew that love your fillings out or some
Swizzels which will just do something strange the color of your teeth?
SOLOMON: Richard, I am of the healthier sugar variety. I will do something of a pumpkin for variation. I'll do like a pumpkin pie. A pumpkin spice
latte. None of that cheap candy. Only the finest for me.
QUEST: Have a good Halloween. Thank you, Rahel, Solomon.
Last week, it was all about earnings, this week it's about the Fed and its next interest rate decision. And look at the markets before I love your
(INAUDIBLE) the Dow opened lower and it stayed that way for the whole session. There's the numbers, you can see it yourself. The NASDAQ off one
percent. That's QUEST MEANS BUSINESS. I'm Richard Quest. Whatever you're up to in the hours. Happy Halloween. I'll see you tomorrow
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