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Quest Means Business
Bob Iger Returns To Disney As CEO, Replacing Ousted Leader; 2022 World Cup; Fans Take First Ever Flight From Tel Aviv To Doha; Fed's Daly: Inflation Is Unacceptably High; Musk Unblocks Donald Trump, Marjorie Taylor Greene; Trump: They Have A Lot Of Problems At Twitter. Aired 3-4p ET
Aired November 21, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:19]
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: A slow start to the Thanksgiving Week on Wall Street.
Let's take a look at the Dow. You can see the Dow is pretty much flat, just off about 10 points. Those are the markets and these are the main events.
A massive shakeup at Disney as the Board puts Bob Iger back on top.
Elon Musk decides to reinstate a handful of controversial Twitter accounts.
And it is the first full day of action at the World Cup in Qatar. We'll take you there.
Live from New York, it is Monday, November 21st. I'm Rahel Solomon in for Richard Quest, and this is QUEST MEANS BUSINESS.
Good evening.
Tonight, a stunning return to power at the biggest business in Hollywood. Bob Iger is coming out of retirement to run the Disney Empire. His
successor, Bob Chapek is stepping down after a tumultuous two years. Shares of Disney jumped on the news now up over six percent.
Now, Iger is a legend in the in the entertainment industry. He ran Disney for 15 years, and during that time, the company bought Pixar, Marvel, and
the "Star Wars" franchise. He also launched the streaming service Disney+.
Matt Egan is with me now from New York. So Matt, what do we know about what was behind this decision? Because it was just in June that the Board
unanimously extended Chapek's contract for three years and so from June to November, this is a pretty dramatic 180.
MATT EGAN, CNN REPORTER: It really is a dramatic 180. I don't know about you, but I love a good plot twist, and Disney did not disappoint here.
You could almost hear the collective shock in Hollywood and Wall Street and in the media circles when this came out late on a Sunday night here on the
East Coast in New York.
Stunning development, "The Wall Street Journal" reported that employees at Disney were so surprised that when Bob Iger sent the e-mail internally, a
lot of them didn't know if it was real or if his e-mail account had been hacked.
Wall Street also caught off guard by this with the stock up by six or seven percent this afternoon. Investors certainly liked the fact that Iger is
back.
As far as what changed here, you know, I think we have to remember that Disney is having a terrible year. This is actually on track to be Disney's
worst year since 1974, despite the fact that the stock is up six percent today, and two weeks ago, Disney really unnerved investors by reporting
worse than expected results and swelling red ink at Disney+, the streaming division.
Losses more than doubled to $1.5 billion in a single quarter. One analyst told me that there was growing unease on Wall Street about the strategic
path that Bob Chapek had Disney on. Specifically, the laser-focus on all out-subscriber growth no matter the cost. That might have worked when
interest rates were at zero and the economy was booming, but we are in a very different world right now.
We have recession fears. Interest rates are rising rapidly, and the media industry is in turmoil.
So Disney decided that they want to go in and go back to a trusted hand to steady the ship during these turbulent times and it is hard to think of
anyone who has a more impressive resume than Bob Iger.
SOLOMON: That is fair. He has been within the company, I think for more than 40 years, four decades there, so he certainly culturally understands
the company.
Now what do we know now about the goal for Iger? Is it to just stop the losses within the streaming unit at Disney+? Is it -- what do we know about
what he is now tasked with?
EGAN: Well, two big things. Neither of them are easy.
One, he has got to figure out the strategic vision of this company and that may be a different vision than Chapek who was by the way Iger's handpicked
successor.
Again, Chapek was focused on all-out subscriber growth. I think that we're going to see a different tune from Iger. He may end up dialing back some of
the expectations for subscriber growth for Disney+. He is also going to figure out what to do with the linear business because we know that is in
decline. Does he want to keep ESPN? Where does that fit in with this growing, massive Disney Empire?
The other big thing he's got to figure out is a successor. Iger is 71 years old, he signed a two-year contract. So, the plan is not for him to be here
forever. He has got to figure out who it is either internally or externally, including perhaps some of the top executives who have recently
left the company. He has got to figure out who it is who is going to replace him and that obviously will not be easy.
One other interesting point here, Rahel, is that, in some ways it seems like even Iger himself was surprised by the fact that he is back at the
company.
He recently dismissed this idea.
Listen to what he told Kara Swisher back in January.
[15:05:17]
(BEGIN AUDIO CLIP)
KARA SWISHER, TECHNOLOGY JOURNALIST: But one of the things -- CNBC polled 10 media executives anonymously about their 2022 predictions, and
one was that you'll return to Disney.
BOB IGER, INCOMING DISNEY CEO:nAs what?
SWISHER: I don't know. A Mickey Mouse character.
IGER: I would love -- yes.
SWISHER: There are rumors that you could become Disney's CEO again.
IGER: That's ridiculous.
SWISHER: Ridiculous.
IGER: I was CEO for a long time. You can't go home again. I'm gone.
SWISHER: Really. It's happened before. Starbucks?
IGER: I gave my ID up, my name tag up.
SWISHER: Okay.
IGER: My office, my e-mail address -- it is all gone.
I think if I wanted to run a company, I'd still be running Disney. No, no, I did that.
(END AUDIO CLIP)
EGAN: And now he is doing it again. He's got his e-mail back. He has got his office back. And you know, this is not going to be an easy job for him.
A lot of jobs are at stake and really, he is going to help shape the future of the media industry and it's not going to be easy.
SOLOMON: Apparently, Bob Iger likes a sequel. Matt Egan, thank you.
And Chapek who ran Disney during a rocky two years, he took over just before the pandemic hit. The company saw a bump in streaming customers as a
result. However, he soon faced a lawsuit with actress, Scarlett Johansson over pay, and his perceived silence over Florida's so-called Don't Say Gay
Bill, well, that led to protests by some employees, many of whom considered the law discriminatory.
Earlier this month, Disney stock dropped as losses in its streaming division deepened.
Sara Fischer is a media reporter at AXIOS and joins me now. So Sara, we just walked through some of the turbulent times for Chapek there, but I
wonder, is it completely fair to blame all of this on him? Certainly, he could not have predicted the timing of COVID. The Don't Say Gay Bill
presumably was his decision. But I just wonder if all of the troubles that Disney has had the last few years, if it's fair to place this all on him?
SARA FISCHER, MEDIA REPORTER, AXIOS: No, and it's not like Disney has totally bombed. You know, under Chapek's reign, Disney has surpassed
Netflix at one point in number of total subscribers across all of its streaming services. It has been able to pull its linear networks out of a
whole, thanks to the reemergence of live sports.
So, it's not like it's been a total fiasco. I think investors reacted very negatively to Disney's earnings because what they were looking for was a
growth in profits, trying to get streaming more profitable, not necessarily just increasing the number of subscribers.
But the other thing I'd note here too, is that it's not Disney alone. All of the major entertainment companies are going through layoffs right now,
many of them are struggling to get their streaming services to be profitable and that includes CNN's parent Warner Brothers-Discovery, as
well as Paramount Global, Comcast, et cetera.
So I don't think it's fair to pin this entire thing on Bob Chapek, but I do think his early blunders, the ones that you noted with Scarlett Johansson,
with the Don't Say Gay Bill, it didn't help him in this regard.
SOLOMON: We talked about the earnings report earlier this month, do you think that maybe there was a cultural disconnect there? I mean, I know he
had been at the company for a long time, but I saw report that some had warned him about his tone before the earnings call that it was overly
optimistic, and that maybe perhaps, part of this was intrapersonal or culturally just not the right fit. I mean, what do you think about that?
FISCHER: There's two things here. One, there have been reports that it wasn't culturally the right fit, but also I think it's hard for Bob Chapek
to walk into this role, when you know, he is trying to fill the shoes of Bob Iger. Bob Iger didn't really come out in huge support of Chapek during
some of the most tumultuous times, like the Don't Say Gay Bill. So it was hard for Chapek to become that cultural fit.
But on the other hand, leading up into earnings and talking about having a rosier outlook, you know, I don't think that Disney was doing anything that
was particularly egregious compared again to its competitors. I also think that in terms of the widening losses at its streaming service, you know, he
has continued to say that he expects it to become profitable in 2024, which has been the long-term guidance ever since they launched it under Iger in
2019.
And so while I do think that Bob Chapek is to blame for some of these things, I think some of it is things that he could not have necessarily
helped.
SOLOMON: Yes, I think that's fair. And look, you know, I think it's really interesting because Disney+ has seen pretty explosive growth with
subscribers, right? I mean, this last quarter, they added 12.1 million subscribers. They're not quite up to Netflix, but they are catching up.
And so I wonder if we could step back more broadly. You know, I feel like even just last year, a few years ago, it was all bets on streaming, the
future was streaming. And now, we're sort of in a different phase in the economy where folks, Netflix, for example, folks are realizing that it
can't just be growth at all costs, sort of walk me through sort of what you're seeing in the larger landscape.
FISCHER: Yes, well, we started to see streaming subscribe slow down earlier this year and as a result, Wall Street started to put pressure on these
companies to tighten the belt, to focus more on profitability over the promise of a rosy future.
[15:10:08]
And what that did was it forced companies to spend less on content. Disney itself said it would spend a billion dollars less than it had originally
projected. And it also forced companies to make some cuts. You know, it's not just Disney that said, it's going to be going under layoffs, but
Netflix had layoffs, et cetera.
And as a result, these companies had to figure out ways where they were going to become more profitable. So Netflix, as you know earlier this year
launched, its ad-supported tier. Disney is expected to launch ad-supported tier in the US on December 8th. These are all things that they're trying to
do to make Wall Street happy.
And to your point, Wall Street is now much more focused on profitability than ever before, because we are going through a potential recession or at
the very, you know, best case outlook, just a weakening of the economy right now.
SOLOMON: And Sara, speaking of Wall Street, how much do you think activist investors had to do with Bob Chapek stepping down? I mean, you think about
Dan Loeb, for example, but activist investors seem to have become a bit more prominent as of late.
FISCHER: Yes, it's a great question. It's not just in the media industry, it's across many industries. Look, I think it played a role because
activist investors try to go in, drum up support, sometimes, you know, leaking things to the press.
But I don't think that's what ultimately dealt the blow to Bob Chapek's career at Disney. I think it was, you know, to the things we've pointed out
before, not the best cultural fit. He was trying to come in at a time when the economy was very weak, and he was replacing the shoes of Bob Iger,
which a lot of these investors including some of those activists absolutely loved.
So it may have been a part of it, but I don't think that's what ultimately drove this decision.
SOLOMON: Well, it's just been really fascinating to watch, as you pointed out in your reporting earlier. The move marks one of the messiest corporate
succession failures in recent memory.
Sara Fischer, good to have you.
And controversies overshadow the first full day of action at the Football World Cup. We are live from Doha with the latest on FIFA's move to tackle
player protest, coming up next.
(COMMERCIAL BREAK)
SOLOMON: Welcome back.
Day Two of the Football World Cup is underway in Qatar and there has been just as much drama off the pitch as there has been on.
A threat from FIFA to penalize players wearing "OneLove" armbands for several team captains to back down from the antidiscrimination campaign.
Earlier, this powerful moment from Iran's players.
[VIDEO CLIP PLAYS]
[15:15:10]
SOLOMON: The team there refusing to sing their National Anthem in apparent solidarity with protesters back home. Now, Qatar would love for the
football to take center stage, controversy has dogged the build up to the tournament, just as it dominated the narrative after the country won the
right to host the event more than a decade ago.
CNN's Becky Anderson takes a look at the journey to get here.
(BEGIN VIDEOTAPE)
BECKY ANDERSON, CNN INTERNATIONAL ANCHOR (voice over): The Qatar 2022 FIFA World Cup is officially underway.
Twelve long years in the making.
UNIDENTIFIED MALE: The FIFA World Cup Qatar 2022 is almost upon us.
UNIDENTIFIED MALE: The 2022 --
ANDERSON (voice over): This is where the journey began --
UNIDENTIFIED MALE: Is Qatar.
ANDERSON (voice over): 2010, scenes of jubilation across the small, immensely wealthy nation.
UNIDENTIFIED MALE: We're not only going to host a successful World Cup, we're going to host the best World Cup ever.
ANDERSON (voice over): Thus, started a massive infrastructure project. Seven new stadiums, an airport extension, an entire Metro System, and
countless new hotels.
ANDERSON (on camera): I've been coming to Doha for more than a decade and frankly, for the past 10 years, most of the conversations that I have
when I've been here have been dominated by talk of preparation for this tournament.
So, it is amazing to see the fans mingling here -- Tunisia, Argentina, Senegal -- they are here and they are loving it as this tournament begins.
But of course, it hasn't been without its controversy.
ANDERSON (voice over): Initially, allegations of corruption and bribery dogged this bid, accusations that Qatar has always denied.
NASSER AL KHATER, CEO, QATAR 2022: Innocent until proven guilty, we were not extended that. We were guilty and we have to keep proving our innocence
over and over and over again.
Had it been another nation, would it be measured with the same yardstick?
ANDERSON (voice over): Then there's the plight of migrant workers employed on World Cup infrastructure, an issue I have been pressing organizers on
for years.
ANDERSON (on camera); Last time you and I were here, we were in high vis jackets --
ANDERSON (voice over): Most recently, last summer --
HASSAN AL THAWADI, SECRETARY-GENERAL, SUPREME COMMITTEE FOR DELIVERY AND LEGACY: The Kafala system has been dismantled.
ANDERSON (on camera): That's the sponsorship --
AL THAWADI: That's the sponsorship system.
ANDERSON: The very exploitative sponsorship system.
AL THAWADI: Absolutely. That has been dismantled.
ANDERSON: Has been dismantled.
AL THAWADI: Yes.
ANDERSON: Surely you will concede that it is absolutely critical that perpetrators of abuse and exploitation be held to account. What is being
done to ensure that that's the case?
AL THAWADI: As far as I am aware and following closely what the State has done, people who have abused the law are punished.
ANDERSON (voice over): Well, there has been significant progress, more needs to be done and Qatar admits that, and there's also the issue of anti-
homosexuality laws here.
(CROWD chanting "Shame on Qatar. Shame on FIFA.")
ANDERSON (voice over): Adding more pressure to Qatar in 2017, four Arab nations, three of them close neighbors cut off diplomatic and trade ties,
blockading the small State accusing Doha of supporting extremist groups.
The feud that divided the Gulf ended last year. And remarkably in May, Qatar Airways announced a partnership with regional air carriers to shuttle
fans to and from Doha, realizing along the stated goal of the organizers.
UNIDENTIFIED MALE: From day one, we've said this is a tournament for the region, and it still continues being a tournament for the region. We've
always worked and strive towards ensuring that the benefit of the World Cup extends beyond up to the people of the region.
ANDERSON (voice over): The world's biggest party has now arrived in the Middle East. There are questions lingering over whether the legacy of this
tournament will be long-term reform.
But for now, hundreds of thousands of football fans here and millions around the world have a month to celebrate the beautiful game and all it
has to offer.
(END VIDEOTAPE)
SOLOMON: And as we speak, the US is taking on Wales. The Americans have made a confident start. They are currently up one nil.
Earlier it was a dominant display from one of the tournament's favorites, England. They beat Iran six to two, and The Netherlands were just too
strong for Senegal.
So let's go to Qatar. Don Riddell is in Doha.
So Don, from the outside in, it certainly appears that the politics have overshadowed the actual sport, but what are you seeing on the ground there?
I mean are people just trying to enjoy a game or are the politics as significant or as you know, major as it feels from the outside?
[15:20:09]
DON RIDDELL, CNN WORLD SPORT HOST: Well, you know, it really depends on who you ask. For example, before the England-Iran game, I actually bumped into
an England supporter that I interviewed 22 years ago. Amazingly, I remembered him, he remembered me and I wanted to know what he thought about
being here and with all the stuff that was going on. And he said, "Pointedly, it's just about the football. That's all that matters."
So that was his perspective. He just couldn't wait to get into the game and to cheer on his team and I'm sure, he ended up having a wonderful
afternoon.
But if you speak to, for example, the Iranian supporters, it's not just about the football, they realize that there is much more to life than just
a game. And of course, we know what they've been dealing with back home with the protests, which have turned violent and deadly and for which so
many demonstrators who are protesting against the regime are paying for it with their lives.
And so many of those supporters were wearing, you know, freedom t-shirts. Many of them didn't want to be speaking with us or they didn't want to be
seen speaking to the media, so concerned were they that regime spotters were monitoring them in the crowd.
But we did speak to one couple who said that they were happy to be speaking with us, they now live in California, so they weren't so concerned about
their safety, but they were really, really hoping that the players could send a message to the demonstrators that they were with them, or at the
very least, they expressed some sympathy or solidarity, and they said it will begin with the Anthem.
So when those Iranian players so pointedly did not sing the National Anthem, many Iranian fans in the crowd seemed to be cheering. They seemed
to be quite jubilant about that and that really was just an extraordinary moment to bear witness to, a reminder that it is a beautiful game, but
there's much more to life than just football.
And I think even though the Iranians got hammered today, I mean, they really got taken to the cleaners, losing six-two. I think for a lot of the
Iranian supporters in the ground, that moment, was a really big win.
SOLOMON: That moment saying it all without actually even saying a word.
Don, let's turn to the actual game a bit. So as I say, US and Wales playing as we speak. Last I checked, one-zero, so walk me through the game. I mean,
any surprises the US, of course, the underdogs there, but any surprises on the field?
RIDDELL: I don't think anyone really knows exactly what to make of the American team. First of all, they've not been in the World Cup for eight
years. They missed out on it four years ago, which was really a disaster for their team, and very, very, very heartbreaking as well.
So, it is good to see them back. They bring an awful lot of fans and support to the World Cup. They are playing well in this game there. As you
say, they're one-nil up against Wales. We've got just about a third of the game to go, there's about twenty-eight, thirty minutes left. And from what
I've been able to see, they are worthy of their lead.
If they can hang on to it, it will set up a blockbuster clash against England on Friday, which is the day after Thanksgiving. That is projected
to be the biggest ever television audience in the United States for a game of soccer. The USA against England, you know, potentially for the
domination in this group, Group B.
So that's really been interesting to see how that plays out. Of course, we'll see if the Americans can hang on to that. But you know, they've
changed a lot in the last eight years. They've got a lot of the world's top players right now. Even President Joe Biden acknowledged that when he
called the team and spoke to them over the weekend.
I mean, a lot of those guys are big stars in Europe and in the Premier League. So, they definitely have made big strides, big improvements.
The other game tonight, really, really disappointing for the African champion, Senegal. It's really been never that an African team has done
really well in the World Cup. And every four years we're wondering, is this going to be the year? Is this going to be the year? Senegal coming in as
the reigning African champions, unfortunately, without Sadio Mane, their big star who is injured and who has had to miss the tournament, and they
clearly struggled losing to the Netherlands, who are one of the fancy teams from Europe.
It was decided late though, the Dutch didn't go ahead until the 84th minute and they didn't make sure until about eight or nine minutes into injury
time. So it was a close game, but a great win for the Dutch. Not such a good night for Senegal.
SOLOMON: Don Riddell in Doha, thank you. Love to see if the US keeps that lead there.
And amid all the controversy surrounding this World Cup, it has created an opportunity for unprecedented cooperation between Qatar and Israel. It's
just a small step, but on Sunday, Israelis and Palestinians took the first ever direct flight from Tel Aviv to Doha.
CNN's Hadas Gold has more.
(BEGIN VIDEOTAPE)
HADAS GOLD, CNN CORRESPONDENT (voice over): They've got their luggage, passports, tickets, and ball. These 180 soccer fans made history on Sunday
taking the first ever direct flight between Tel Aviv, Israel and Doha, Qatar as part of specially arranged flights for the World Cup.
[15:25:08]
UNIDENTIFIED MALE: Historic. We didn't expect that.
GOLD (voice over): Qatar and Israel have no diplomatic relations, but as part of a deal with FIFA, Israelis with tickets can enter the country and a
series of special direct charter flights were drawn up on the condition they include Palestinians as well.
Israelis have never before been allowed to travel direct from Tel Aviv to Doha and enter Qatar on their Israeli passports, and Palestinians from the
occupied territories typically need very difficult to obtain Special Permission in order to be able to fly out of this, Ben Gurion Airport.
Usually they fly from Amman, a journey that can take several hours and several checkpoints.
But for Palestinian fans with World Cup tickets, the process is easier.
On the inaugural flight, most passengers have Israeli passports, but they hope the beautiful game will triumph over politics.
UNIDENTIFIED MALE: But we don't mix politics with soccer. You know, you'll get to know the people, the local one.
UNIDENTIFIED FEMALE (through translator): I am feeling great, especially since we are going to meet people from all the countries. We feel
delighted.
UNIDENTIFIED MALE (through translator): We are the same. The Israeli-Arabs, the Palestinians from the West Bank, and the Jews, as all the people must
be united at the same level.
GOLD (voice over): Cyprus-based Tus Airways only received approval for the direct flights in the last few days and the demand is so high, they are
looking to add extra trips that could help Palestinian fans since the deal for Palestinians and Israelis to travel together was only announced earlier
this month.
MICHA OWSINSKI, SENIOR COMMERCIAL DIRECTOR, TUS AIRWAYS: We hope really that it will be a great celebration for soccer. And that the Israeli fans
here, both Arab and Jews, Israeli and Palestinians enjoy.
GOLD (voice over): Despite the outpouring of good feelings, Israel is warning its citizens to be on their best behavior. With a video message
from Israeli soccer star, Tal Ben Haim and advice cards being handed out at check in.
[VIDEO CLIP PLAYS]
LIOR HAIAT, ISRAELI HEAD OF THE NATIONAL PUBLIC DIPLOMACY: We don't think that showing off their Israeli identity will help them while they're there.
GOLD (voice over): Qatar is allowing a small Israeli consular team to be in the country to help citizens as Israeli hope this temporary presence will
one day turn permanent.
UNIDENTIFIED MALE: I hope so, I hope. We need peace in all the rage. It's one step forward for all the people.
GOLD (voice over): But these fans, their eyes are on the ball.
UNIDENTIFIED FEMALE: Why are we asking political questions right now? I am kind of confused.
UNIDENTIFIED MALE: I won't butt in.
UNIDENTIFIED MALE: Maybe friends.
UNIDENTIFIED BOY: I love football.
GOLD (voice over): Hadas Gold, CNN, Tel Aviv.
(END VIDEOTAPE)
SOLOMON: And it is a choppy day on Wall Street to start the Holiday week in the US. We will talk more about how markets are reacting to China's latest
moves and also comments from a Fed official after the break. Stay with us.
(COMMERCIAL BREAK)
[15:31:04]
SOLOMON: Stocks throughout the Asia Pacific region fell as investors grow more skeptical that China will relax its zero COVID policy. Beijing has
announced new restrictions in certain areas and just reported the country's first COVID debt in six months. Hong Kong's Hang Seng saw the worst of it
closing down almost two percent. Changes in Australia and South Korea also feeling the impact.
And those moves are also sparking. Some anxiety on Wall Street. You can take a look at the triple stack here and the S&P off about four-tenths of a
percent the NASDAQ one percent. The major indices have been mostly lower throughout the day. Investors though also reacting to fresh comments from
the San Francisco Fed president. Mary Daly warned about the impact of rising rates. She says there is still work to do to tame inflation.
(BEGIN VIDEO CLIP)
MARY DALY, PRESIDENT, FEDERAL RESERVEBANK OF SAN FRANCISO: Congress gave the Federal Reserve two mandates and already mentioned those but they are
price stability and maximum employment. And right now, by almost anyone's measure, we are only meeting one of those goals. The labor market, the goal
we're meeting is very strong and well aligned with our employment mandate.
In contrast, inflation is unacceptably high. I mean unacceptably high, hurting many, many people.
(END VIDEO CLIP)
SOLOMON: Megan Greene is a senior fellow at Brown University and global chief economist at Kroll. She joins me from San Francisco. Megan, good to
have you. So I want to start with what Mary Daly was just talking about there, the labor market, because it is still very strong. Right? The
unemployment rate is at 3.7 percent. But one thing we hear so much from Chairman Powell is that he and the Fed believes that they can create some
slack in the labor market by pulling from job demand, job vacancies rather than actually creating job loss.
But is there any evidence that they've done it in the past? Or can do it this time?
MEGAN GREENE, SENIOR FELLOW, BROWN UNIVERSITY: Yes, look, this is a huge debate among macro economists, the Fed led by Christopher Waller actually
has argued that we have over 10 million job openings in the U.S. So the Fed can go ahead and tighten policy, lien against growth, kill off demand. And
that should just whittle down some of those job openings. On the other hand, Larry Summers and Olivier Blanchard have come out and said, look,
we've looked at all of the data and that's a great theory.
It's just never happened before. And I think the data is pretty clear on that. So it's something that works in theory better than in practice. And
unfortunately, I think that in order to bring inflation down, the Fed will have to continue hiking rates. And we're going to see a deterioration in
the labor market off the back of that. And the best indicator of a recession, of course, is a deterioration in the labor market.
SOLOMON: And so what might that look like, according to your forecast? I mean, we're currently at 3.7 percent for the unemployment rate, are we
talking about an increase of six percent as I've seen, some banks suggest or something less severe?
GREENE: So I think probably less severe than six percent. I would expect unemployment to probably rise above five percent. If we're assuming that
inflation is coming down towards the Feds target of an average of two percent. Now, the Fed itself has its own forecasts and thinks that
unemployment will top out at just under 4-1/2 percent. Unfortunately, I just don't think that's realistic.
I think the Fed is going to have to continue hiking rates that will cause the labor market to deteriorate and unemployment will probably breach five
percent.
SOLOMON: I want to circle back to what we're seeing in China. I mean, the last few weeks, I think there had been some hope maybe prematurely
optimistic that China might start to relax some of its zero COVID policies and yet we got these newer restrictions that seem to imply that's not going
to happen anytime soon. I mean, walk me through just some of the implications on the ramifications of that policy and the ripple effect just
across the broader economy globally.
GREENE: Yes. Look, I never bought the leaks that China was looking to get rid of it zero COVID policy. China's going to have a really hard time
learning to live with COVID as the west has in part because China just hasn't had the natural immunity from waves of new cases in the way that we
have.
[15:35:10]
They've got Sinovac. A less effective vaccine that doesn't have lasting implications. So after six months, you don't really detect Sinovac in
someone's system, the elderly rate of vaccination is around 65 percent. That's well below where we are in the West.
And so I think, you know, if they were to get rid of zero COVID, it would easily overwhelm hospitals. And that would be really unpopular in China
which has suffered very few deaths from COVID, relatively speaking, of course. And so I think they're tweaking zero COVID, they've tweaked zero
COVID all along. It's already gotten much more tactical and surgical, so that they're not having to shut down entire factories, for example.
But I do think we're going to have zero COVID at least until this next summer. And that means that as we go into winter and there are new ways of
cases, we're going to see lock downs. I think that you know, peak global supply chain interruptions are probably behind us. But if we have lock
downs that will affect global supply chains, and that -- that's inflationary. It also means that for China, if there's zero COVID policy
still being implemented, confidence is going to remain incredibly low.
And so the Chinese economy is going to remain relatively sluggish relative to historical norms. So, whereas China grew by about three percent This
year, I think it will probably accelerate to about five percent next year, but that's as good as it's going to get in large part because confidence
will be so low.
SOLOMON: You also think about the impact of commodities for example, oil prices, because there isn't that demand, you know, being stoked from the
huge market in China. Megan Greene, good to have you.
Elon Musk is unfreezing accounts for some of Twitter's most controversial users. Donald Trump's account is now unlocked, but he has yet to post .The
latest tweet on his page written just after the January 6 insurrection in 2020. Others however, have taken advantage of their reactivated accounts.
U.S. Congresswoman Marjorie Taylor Greene, she's back. She was banned for spreading information -- misinformation about the coronavirus. She says
being blocked was a violation of her free speech.
And Kanye West marked his comeback by tweeting Shalom with a smiley face. That's a nod to the anti-semitic post that got him booted from the platform
in the first place. Clare Duffy is with us in New York. Clare, the last time you and I spoke on the show was Friday, and yet so much has happened
between then and now. What do we know? Let's just start with the decision to reinstate the former President Donald Trump.
What do we know about what led Elon Musk to make that decision. It seems to be a post, a poll.
CLARE DUFFY, CNN BUSINESS WRITER: Right? Well, Elon Musk from the time he started talking about buying Twitter has always said that he wanted to
restore Donald Trump's account and just that he sort of disagrees with this policy of permanent bans in general. But he sort of started to walk that
back when he first took over Twitter, trying to reassure advertisers, he said he would create this content moderation council which is something
that a lot of the big platforms have,
Just sort of review some of these big content moderation decisions and take some of the responsibility away from the heads of the companies to make big
calls like this. That appears to not have materialized. Instead, Musk polled his followers over the weekend about whether they'd like to see
Trump's account reinstated. And then we saw just sort of the surprise decision Saturday night to bring Trump back to the platform.
SOLOMON: Clare, we know, however, that Elon Musk has decided not to reinstate certain people like Alex Jones. Alex Jones for our viewers was
just convicted and just recently ordered to pay hundreds of millions of dollars for lying about the Sandy Hook Elementary mass shooting. So what do
we know about his decision making in terms of who gets reinstated and who doesn't?
DUFFY: Right. I think it's pretty clear at this point that, you know, it's Musk making the call here. That it is sort of up to him to decide who he
likes and who he doesn't. It doesn't seem like there's any clear system. And once again, you know, the big difference between the Trump decision for
example, Twitter was always probably going to have to review that decision. But Twitter before Musk took over, had hundreds of employees whose job it
was to sort of consider consequences of these big decisions and do research into what these things would mean for their users. And now it appears that
this is just sort of entirely Musk making the call here.
SOLOMON: And I wonder, you know, as I said, the former president has not taken to Twitter just yet. But he has a huge following on Twitter even more
than truth, social and so any sense of the calculus of whether he returns. I mean, it seems pretty enticing for him.
DUFFY: It's going to be hard for him to ignore. He has almost 90 million followers on Twitter and even like a small fraction of that on Truth
Social. He has so far said he plans to stay on truth Social. He talked about this over the weekend. Let's take a listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP, FORMER PRESIDENT OF THE UNITED STATES: Here we're getting a big vote to also go back on Twitter. I don't see it because I don't see any
reason for it.
[15:40:03]
They have a lot of problems at Twitter you see what's going on. It may make it, it may not make it but problems are incredible. The engagements are
negative. And you have a lot of bots and you have a lot of fake accounts.
(END VIDEO CLIP)
DUFFY: So you see, he's not only sort of dismissing the idea that he's going to return to Twitter but swift snubbing the platform talking about
some of these problems that the platform has had since Musk took over and also bringing up this bot issue. Elon Musk has talked a lot about Twitter's
bot issue and it seems like Trump is now using that as an excuse not to return to the platform.
SOLOMON: We will see. Claire Duffy, thank you. Good to have you.
DUFFY: Thank you.
SOLOMON: And be sure to join us tomorrow at this time to see Richard Quest exclusive interview with former British Prime Minister Boris Johnson.
That's all part of a special event to mark CNN Portugal's one year anniversary. We will bring it to you at 8:00 p.m. in London 9:00 p.m. in
Paris here on QUEST MEANS BUSINESS.
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, Living Golf.
(COMMERCIAL BREAK)
[15:58:42]
SOLOMON: Hello. I'm Rahel Solomon and it is the dash to the closing bell. We're just two minutes away. Parts of Beijing are set to interlocked down
after the city reported its first COVID death and months. Well that's contributed to a choppy day for markets. The Dow clawed back early losses
then turn lower this hour. You can see it as off about two tenths of a percent or, yes 60 points there. The S&P is off about four-tenths of a
percent and the NASDAQ, the Biggest Loser among them off 1.1 percent.
And Bob Iger is back at Disney to Replace Bob Chapek as CEO. Speaking to me earlier this hour. Axios media reporter Sara Fischer said that Chapek was a
mismatch for Disney's top job.
(BEGIN VIDEO CLIP)
SARA FISCHER, AXIOS MEDIA REPORTER: There's two things here. One, there had been reports that it wasn't culturally the right fit, but also I think it's
hard for Chapek to walk into this role when, you know, he is trying to fill the shoes of Bob Iger. Bob Iger didn't really come out in huge support of
Chapek during some of the most tumultuous times like the Don't Say Gay bill, so it was hard for Chapek to become that cultural fit.
(END VIDEO CLIP)
SOLOMON: And looking at a pair of today's notable stocks. Let's start with Chevron. Chevron slipped around a percent, that was on sliding oil prices.
The energy giant did recoup some losses after Saudi Arabia denied a report that OPEC plans to boost supply. And Disney again, today's top story and
today's winner as we noted former CEO Bob Iger is back in charge.
[16:00:06]
Investors seem to think that that'll help the company. You can see, shares are up about 6.3 percent there.
And that is your dash to the bell. I'm Rahel Solomon. The closing bell is ringing on Wall Street as we speak. "THE LEAD" with Brianna Keilar starts
right now.
END
