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Quest Means Business

US Markets Tumble On Recession Fears; UK Nurses Stage Their Biggest Walkout; Harry And Meghan; Dow Tumbles Over Fears Of Recession; U.S. Travel During Holidays To Hit 112.7 Million; Quest's World Of Wonder: Istanbul. Aired 3-4p ET

Aired December 15, 2022 - 15:00   ET



RICHARD QUEST, CNN INTERNATIONAL HOST: In a funny sort of way, it's a hangover today, the global selloff as a result of interest rate rises in

the US, the UK, few others, and as a result, markets are sort of drawn to the reality of these much higher rates probably next year.

You see the Dow is up -- it's been down all day. Absolutely all -- well, you can see for yourself. You don't need me to point out a bevy of red, and

it's all because of the main news. Recession fears, rearing their head after the sharp drop in US retail sales. That is a symptom, it is not the


Prince Harry has described being screamed at by his brother, as he and Meghan broke away from the Royal family.

And we will have the Kayak CEO to talk about the most popular travel spots this season, including here in New York.

We are in New York, and we're live in New York. It's Thursday, December the 15th, middle of the month. I'm Richard Quest. And in New York, of course, I

mean business.

Good evening.

Yesterday we told you about the interest rate rises in the US; today, US markets have fallen on the grounds that the Fed may be pushing the economy

towards a recession, off 900 points at the worst, and the reason the resilient US consumer might be getting tired, weary, and is no longer able

to pull the economic train. In other words, feeling the pinch.

Retail sales dropped six-tenths of a percent last month, and that has taken its toll. Global markets haven't fared that much better, a sea of red. If

you look carefully, I'll guide you to the worst ones.

You've got the Xetra DAX off 3.28 percent in Frankfort so the market is down sharply, and China's retail sales were down of six percent. Europe

struggles along as well. Central Bank, the ECB is also joining the Fed, slowing down, going to restrictive interest rates at the moment.

The ECB and the Bank of England both raised the cost of borrowing by half a point. The Fed did on Wednesday and all major moves from this time last

year. Here's why. Just like in the US, there are signs in the UK and in Europe, inflation may have peaked. And so the Central Banks of all three

say they've still got more work to do, but not necessarily as much as they have been so far in terms of rate rises.

We know the UK is in recession, and Christine Lagarde in the EU says the EU could be headed that way, too.


CHRISTINE LAGARDE, PRESIDENT, EUROPEAN CENTRAL BANK: The Euro area economy may contract in the current quarter, and the next quarter, owing to the

energy crisis, high uncertainty, weakening global economic activity and tighter financing conditions.

According to the latest euro system staff projections, a recession would be relatively short lived and shallow.


QUEST: So, Paul La Monica, we're really now, I mean, it's the old joke if it wasn't so serious about, we're not talking about whether, we're

talking about if and when.

PAUL LA MONICA, CNN BUSINESS REPORTER: Exactly. The hope is that it will be short and shallow, but I think you're right, Richard. I mean, I've had some

people that have mentioned that if or when we do wind up having the official declaration of the US economy being in a recession, it will be the

most anticipated recession of all time, and then the reaction is going to be no kidding. We all knew we were in a recession already. What took you so

long to finally say it?

So there is some hope that because it is expected, this is not your proverbial black swan event. This isn't going to be brought about by some

exogenous shock to the global economy. It's just the cumulative effect of all these rate hikes and inflation, finally leaving consumers to throw up

their hands and say, can't spend any more. We've had enough.

QUEST: But of course, the consumer spending and the propping up of the economy for the last nine months of rate rises has been the difficult part,

because as fast as the Fed has worked to try and slow the economy into restrictive territory, as they say, they fought against this headwind.

Now, if the headwind of the consumer suddenly stops. I mean, what's to stop the whole economy really going downhill fast?

LA MONICA: Yes, it is a great question, and I think what we still don't know, Richard, is those retail sales figures that came out this morning,

obviously not a good sign because it was a bigger than expected drop in retail sales for November.


You have to back up a second though, retail sales in October were extremely strong. So was that a case of consumers anticipating that there would be

further rate hikes so they were going to do their Holiday shopping earlier? Did they expect that inflation pressures, even though they're starting to

cool, maybe for certain categories, they wouldn't necessarily come down as quickly?

So again, were people bringing forward Holiday sales or Holiday spending into October, and that's why we've had this big drop in November? That's

possible, then maybe we'll see some stabilization in December in 2023.

But you're right, Richard, if not, if consumer spending continues to fall, that's very bad news for the economy. And all of a sudden, we may not be

talking about a short and shallow recession anymore.

Hopefully, it won't be the Great Recession type of recession, but it might be something a little bit worse than a shallow recession.

QUEST: Paul La Monica, thank you.

Now, to how we look at what is happening with interest rates, and this is the perfect way in which each of the red balls indicates one percent. Each

of the orange balls indicates half a percent.

Now start bearing in mind that at the beginning of the year, this was just about empty. This was just about empty. So the EU added half a percent, and

the UK added half a percent, and yesterday, the US did the same. So now you get a chance to see.

The US is actually the top of the tree at four and a quarter to four-and-a- half percent in terms of the Fed Funds Rate. You've got the UK at three and a half the EU is at two, but then the economy has been much slower there.

All these countries are slowing down because of rate rises, and now the rate rises themselves are moderating. The question: How far do they need to

go next year?

We talk about this phrase, "restrictive interest rates." Now just keep in mind as I talk to global economic analyst, Rana, Rana Foroohar who is with

me that the US has done the bulk of this since the beginning of the year, and the UK has had nine consecutive rate rises since the tightening began.

So this is an environment that is unprecedented, and Rana, I see you're getting -- you're girding yourself, I see. And if they've got it wrong, and

the economic pressures subside, then this thing will then tip into recession and it'll be deep.

Rana, what do you make of it?

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Well, I think that there's a very good chance of that, and Richard, I think you know where I'm going to

go. We've been headed for recession for some time.

You know, Paul kind of hinted at this. But basically, if you were to take out the dip that we saw during the pandemic, then this recovery cycle that

we've been in is really the longest over the time that records of this type have been kept.

So there is no question in my mind that we're not only due for a recession, it would probably be a good thing. Now, the question is, is it going to be

a really hard landing? I think that the chances of that are still higher than any of us would like, for the fact that, you know, you can see from

the dot-plot that you've just shown, the world Central Bankers are all racing to try and get inflation under control, which to be quite honest, if

we had had, I think, a little wiser policy, we would have had some smaller, slower rate hikes, a couple years after the great economic crisis in 2008,

sorry, the great financial crisis and then we would have had room to operate.

Now we have no room to operate. They've got to get ahead of it. But at the same time, it's very interesting because people don't feel any sense of,

you know, wage increases, we worry a lot about wage increases. Wages are going down if you look at it in terms of a cost of living pictures. It's a

tough one. It's a tough one, Richard.

QUEST: Okay, but let's say -- so this is take the US as the poster child, the tightening cycle started in March, traditional economics say six

to nine months. So March, April, May, June, July, August, September, October. So those first rate rises are really only operative in the fourth


Now, you had the successive rate rises that we've had, and they don't really cumulatively take effect until next year. But the headwinds that

these rate rises are fighting, consumer spending, the consumers basically said I've had it. I'm off. I'm going. See you.

FOROOHAR: Yes. Well you know you're speaking of it in ways that are conventional, conventional economics would have us believe X, Y, and, Z.

There is nothing conventional about this picture.


We're fighting the after effects of a pandemic, deglobalization, fundamental changes in supply chains, and on top of that, I would argue,

frankly, several decades of monetary policy that has been trend too dovish.

So, you know, there's nothing normal about what's happening right now. I think, you know, you're going to see a coordinated effort, which is good.

That's the upside. You know, all the Central Bankers are working together. Nobody is an outlier.

But we're in uncharted territory. I mean, honestly, I am 32 years of doing the job that I do have never seen this many wildcards in play. So you know,

just like Chair Powell said the other day, it's impossible to predict, not only whether recession is coming and when although I would say whether is

pretty, pretty easy, but how hard it's going to be, you know what, whether you're going to see a soft landing? Nobody knows.

But what we can say is that buckle in, pay down your debt, and get ready for surprises.

QUEST: Okay, 81 degrees in Miami according to AccuWeather, 40 degrees in New York at the moment.

Ranna, thank you.

FOROOHAR: And raining. Thank you.

QUEST: You had to -- just twist the knife along with the interest rates. Rana, have a lovely break down in Miami, enjoy the weather.

Thank you, love. Thank you.

And from the livelihoods to those who take care of themselves. Nurses are walking out of the job in much of the UK, as many as 100,000 members of the

Royal College of Nursing, Britain's largest nursing union are striking in England and Wales and Northern Ireland.

It's the union's biggest strike in its 106-year history. Years of hardship for the UK as National Health Service. It is straining under staff

shortages, sky high demand and under funding.

Scott McLean is in London with more. This all comes, Scott, at a time if you'd like a winter of discontent in the UK, which has meanings to those of

us of a certain age. But where is the public sympathy with the nurses strike?

SCOTT MCLEAN, CNN CORRESPONDENT: Yes, well, look, everyone is going through the same cost of living crisis that the nurses are going through and you

can understand then why the nurses are asking for a 19 percent increase, it doesn't seem like that it's that much when you consider that inflation

right now is 10.7 percent and the government has only offered 4.3 percent, which the union has already rejected because of that inflation number.

Look, the nurses will also tell you that this is not necessarily just about money, Richard, they'll also tell you it is about the NHS as a whole, the

National Health Service. This is the number of people who attended over the last four years, A&E, as you say, in this country or the emergency room.

It's largely stayed the same.

What has changed is the number of people who are waiting 12-plus hours to actually see a doctor. And if you ask the nurses, they'll tell you, they're

worried about a real collapse of the whole system. Listen.


GEOFF BRENNAN, PSYCHIATRIC NURSE: This group don't want to be here, they want to be in there. I don't want them to be here, I want them to be in

there. But we've got no choice. If we continue to just sit in there and endure the conditions that are going on, they won't exist anymore.

IAN HENDERSON, OPHTHALMIC NURSE: It is more difficult to recruit nurses. So when I used to have in the -- it is 15 people applying for one job. Now, I

might have to kind of put the job out several times before I get anybody, and that's the difference is that people don't want to come into nursing



MCLEAN: So Richard, the problem is that it's not just nurses who are upset. This is the number of total working days that have been lost per month over

the last 10 years due to labor strikes.

You can see there was a peak here back in 2014, and now, we have surpassed this peak 417,000 working days last due to labor action in the month of

October, and frankly it may well get a lot worse, because the nurses are on strike today and Tuesday, you have the paramedics on strike, then the

following two Wednesdays, you then have the Royal Mail that's on strike today and the day just before Christmas as well.

You have the rail strike that's on strike here, here, here. The list goes on and I haven't even mentioned the Border Force that's on strike here

until who knows when, plus you have teachers threatening to go on strike in January. You have London bus drivers also adding to this list in December

as well.

You have baggage handlers -- the list really goes on and so when we're talking about public empathy, perhaps now more than ever, the public and

especially public sector workers can really empathize with those nurses who are saying, look, you were clapping for us. You were banging the pots and

pans on your balcony for us three years ago when you really needed us. Now, you got to put your money where your mouth is.

QUEST: Fascinating. Scott McLean, thank you very much. Appreciate that.

Prince Harry is speaking out against his own family and of course, his treatment by the British media. The last episodes in the Netflix

docuseries, "Harry and Meghan," were released overnight, and now, the ramifications come out.



QUEST: Prince Harry and Meghan have revealed more details from their bitter split from the Royal family. In the final episodes of their Netflix

series, the couple described a screaming Prince William and jealousy over Meghan's popularity.

The Duke and Duchess of Sussex also make significant claims against the British media.


PRINCE HARRY, DUKE OF SUSSEX: I believe my wife suffered a miscarriage because of what "The Mail" did. They watched the whole thing.

Now, do we absolutely know that the miscarriage was caused by that? Of course, we don't. But bearing in mind the stress that caused, the lack of

sleep, and the timing of the pregnancy, how many weeks in she was. I can say from what I saw that miscarriage was created by what they were trying

to do to her.


QUEST: CNN's Royal commentator, Emily Nash is with me from London, also the Royal Editor for "Hello" Magazine.

What do they want? What do they want, Emily?

I mean, we've heard a lot of this before in one guise or another. It is truly washing the dirty, the family dirty linen in public, but I come back

to -- besides money obviously for the program -- but what do you think they want?

EMILY NASH, CNN ROYAL COMMENTATOR: Well, Meghan makes clear in the final episode, I believe that what she wanted to focus on for this period was

truth. Now, the million dollar question is whose truth is this? This is their version of events, and that is not to take away from anything they've

said, but we are only hearing one side of the story.

She does say that having got their truth in terms of the lawsuit against "The Mail" on Sunday that she won, they hadn't found peace and so her hope

now is to find peace.

You can't help but wondering that every time this is brought up again, it is sort of rehashing the same wounds over and over.

QUEST: You know this better than most. The Royal family, I mean, the old, "never complain never explain," but they hate the personal stuff and

to say that William was screaming and basically he says Charles -- King Charles lied at that meeting, this is almost a breach that will be



NASH: I think it's very hard to see how the relationship recovers after this. The breach of confidence alone will have been extremely upsetting for

the royal family. But to go into detail and to make accusations like that, you know will be incredibly hurtful.

Now Harry now is no longer a working Royal, has every right to say what he wants, but it is very hard to see how he can hope to, you know, recover

that relationship which he has talked about valuing so much in the past with his brother in particular.

QUEST: They never really addressed the irony of doing all this on the same network that made "The Crown," which stoked the fires on which its

latest series has been criticized by none other than the former Prime Minister John Major and Dame Judy Dench.

NASH: Yes, it is very difficult to see how, you know how they can feel comfortable about doing that, but you know, Harry is talking about his

mother a lot. His mother's story is very -- told in great detail by "The Crown." Perhaps he doesn't feel as aggrieved by it as other members of the

family do.

But you know, the crucial thing here is that there was a big financial deal between the Sussexes and Netflix and this has been used to pay for the

security they say that was cut off when they left the Royal family and certainly from the documentary, you get the sense that that's a huge

concern to them.

QUEST: Good to see you, Emily. Thank you.

Holiday travel season is almost upon us and it could be the busiest since the pandemic. The Chief Executive of the travel site, Kayak is next.



QUEST: That looks like a good painting to help you see the world in a different way. A new perspective.

The British artist, Sophie Green is using her work to connect us to animals, and draw our attention to the plight of species such as

chimpanzees and polar bears.

So, today, on Call to Earth, she gives us a sneak peek at her latest collection.


SOPHIE GREEN, BRITISH ARTIST: I think that looks good. Yes. I think that's about right.

I do think it looks okay though, actually. Could you hold it up higher to where it's the same as the elephant.

So this piece is very special. It's a charity donation piece. So this is actually a specific chimpanzee. She's called Wounda, and Wounda actually

means close to death as she was sort of originally rescued from the illegal pet trade.

So this piece is going to be auctioned off in an event later on in the month, so nobody has seen this yet. You are getting private viewing.


It's going to be unveiled, so we're going to put a sheet over it in a minute and it is going to be unveiled at the opening night this evening.

My name is Sophie Green, and I'm a wildlife artist and a conservationist based in East Sussex in the UK.

Last year, I went to the Arctic, and I was very lucky to go on an expedition to learn more about the wildlife and the impact of climate

change, and I decided whilst I was out there that I wanted to put together a collection of pieces and make people feel more connected with nature.

So this piece is actually based off of a specific photo that I took, and I kind of wanted there to be almost an element of hope, as well, which is a

thread that runs throughout this exhibition.

So even though we've got this side of the painting with the melting ice and the footprints, we've got this side, which is full, thick ice, so I wanted

it to be sort of like the bear was walking from the old into the new and that's kind of what this whole exhibition is about. So, I think this piece

kind of encapsulates that perfectly.

I was talking to a friend about the impermanence of just everything in general, it's kind of a fact of life because nothing is permanent, and I

thought that would be a great name for the collection, because not only does it kind of symbolizes the impermanence of many of these species,

unfortunately, but it's also kind of ambiguous and open to interpretation.

So potentially, there could be an impermanence of our problems, too. And there's more of a sort of hopeful side of the collection as well.

If it wasn't for a few specific people, I don't think this would be happening. And I'm very excited to unveil a very special painting.

So each piece normally takes between a month to two months.

So a lot of my paintings, they kind of convey either vulnerability, or strength or of fierceness. I try to kind of have the personality of the

animal shine through so that you feel like you're in the room with that species and there is definitely more of a connect between people and the

natural world.

Without further ado -- should we unveil it?


GREEN: Lots of clapping, please.

Normally, what I would do through my art is I would give a percentage of the sales from an exhibition or from a piece to a conservation charity. But

this year, I wanted to sort of set up a project fund. And so I sourced various different projects from various charities and set up the

Impermanence Project Fund.

And so we're supporting and hopefully funding some really important conservation projects throughout the world.

Soon after, the Impermanence Exhibition ended, Wounda was sold at auction at the Royal Geographical Society in London, An Evening of Hope with Jane

Goodall, and raised a whopping 19,500 pounds, which is about $24,000.00 for the Jane Goodall Institute and the amazing work that they do.

It was so amazing and inspiring, seeing the piece sell at auction and knowing that every penny will help the natural world and will make a real

tangible difference.

My ultimate goal as an artist and as a wildlife artist, specifically is to use my art to raise awareness and to inspire people and to really connect

people with nature.

So I want people to feel like they can make a difference and be inspired to make a difference.


QUEST: And you'd want to let us know what you're doing with the #CallToEarth.




QUEST: The markets' down sharply. It's all about worries on recession and retail sales, which perhaps gave a bit of a shock. We're off the lows of

the day but we are still much sharply lower.

Sam Stovall is with me, chief investment strategist at CFRA Research, with me from Pennsylvania.

Is this where the salami slicing begins as we go into next year?

This slow, gradual, as reality permeates the first 6-9 months of next year are going to be hard?

SAM STOVALL, CHIEF INVESTMENT STRATEGIST, CFRA RESEARCH: Hey, Richard. Yes, I equate today to be like a deflating Santa Claus lawn ornament.

Today's sell-off reflected diminishing investor optimism that the U.S. will avoid recession.

So I think the first half of 2023 is going to be very challenging as the markets probably have to retest the October 12th low and maybe even go on

to set an even lower low.

QUEST: Wow, now that's different because we had the June low and we thought that was -- of this year. Then we tested and beat on in October and

you are suggesting that we haven't priced in a recession yet, even though, to any sane person, a recession is being obvious.

STOVALL: A lot of people are saying actually that they felt we would be able to engineer a soft landing. I think a lot of economists have been

building that into their forecasts.

And by seeing today's retail sales come in much weaker than expected, housing data likely to be weak when it comes out later this week and also

just expecting to see a slowdown in overall economic growth, I think now it is becoming much more of an inevitability that we will fall into recession.

Now the question is whether will be a mild one or a deep one.

QUEST: Anybody who looks at the chart of interest rate rises since March and you see that vertical, almost vertiginous rise in rates; not even a

stepladder, it's straight up. At some point, the economy was going to feel the effect of 425 basis points in less than nine months.

STOVALL: You can add to that the year on year negative reading in leading economic indicators. I think we are also now building for an earnings

recession, in which the fourth quarter of this year and the first two quarters of next year are expected to show year over year declines.

History basically says, yes, watch out for a recession. But I think many people felt that we could be able to sidestep it because of the strength of

the employment sector, with the unemployment rate at 3.7 percent. Traditionally you don't fall into a recession until you hit 4 percent or

higher, which is probably something we will end up seeing in 2023.

QUEST: OK, so we have concurrent, not coordinated interest rates rises of all major central banks. And China of course is reopening but it's soon

going to have a COVID problem in the New Year as infections rise. So there is no safe harbor. There's no port of call. I've gotten into metaphors and

similarly today, I tell you, they're pouring out.

There's no engine of growth that's going to pull us up the hill.

STOVALL: Right. Well, usually in a recession, there is no place to hide. Sectors are called defensive because they lose less than the overall

market. And the old saying is, when the going gets tough, the tough go eating, smoking and drinking. And if they overdo it, they have to go to the



STOVALL: So the consumer staples and health care sectors, along with utilities, tend to be those that hold up the best. But they still declined


QUEST: We will see a sharp fall of inflation and these interest rates will take. They're going to do the medicine, what's necessary.

When would you expect a turnaround?

STOVALL: Well, I think, first off, the Fed likely will be ending their rate tightening program sometime late first quarter, early second quarter

of 2023. I think they'll hit the pause button.

History shows that if the Fed starts to cut interest rates an average of 8.5 months after their last rate hike. So that would put us squarely into

the end of December next year. And since the Fed is data dependent, if the data tells them that the economy is slowing too rapidly then they probably

will start lowering rates later next year.

QUEST: Sam, good to see you, thank you, I appreciate it. We will talk about more cheerful matters in the future, I do promise you.

It's only eight days until the holiday travel season officially begins. In the U.S., it could be one of the busiest. According to travel group AAA, it

says more than 112 million people will travel between December 23rd and January 2nd. We're almost back to pre-pandemic numbers.

In Britain, they're also hoping for a holiday travel season, a good one, with more than a quarter wanting to go abroad this festive season. Kayak

says this year's top holiday search destinations remain absolutely traditional -- Bangkok, Dubai and here in New York.

Steve Hafner is with me, of Kayak.

You're the second guest today from Miami, where it's 80 degrees. I'm in New York, where it's 40 degrees and raining. Sympathy has evaporated.

Steve, you have obviously got the better judgment on myself.

How busy a travel period will it be?

STEVE HAFNER, CEO, KAYAK: It's going to be an incredibly busy travel season, probably busier I think than even 2019, which is pretty amazing,

given that there is 8 percent fewer seats being flown by the airlines. So I think you should expect very full planes and very high airfares.

QUEST: That combination is great, if you will, for the airlines but I guess they're also thinking there's a recession coming. And people are

having their last hurrah of money they've saved from the pandemic. Then this really is front loading what will be a difficult time thereafter.

HAFNER: It could be. I think I'm a bit more optimistic than that. Richard, families having gotten together for a few years, so they're kind of holding

their noses and picking their spots on where to spend money.

I think, into the new year, airlines will start adding back more capacity, more staff and you'll see airfare start to come down, particularly if oil

prices come down.

QUEST: Right. Where do you see the risk?

On the upside or the downside?

HAFNER: I think there's probably more downside risk than upside risk right now. It's hard to imagine airfares getting more expensive than they are

now. In the U.S., they're over 20 percent more expensive than they've historically been, particularly if you want to go internationally.

Asia just reopened in the last couple of weeks, we're seeing airfares there up 50 percent from normal levels.

QUEST: So top destinations?

Bangkok is always a goodie; Dubai the -- I mean, the hotel rates in Dubai are through the roof. And even here in the U.S., hotels are expensive and

inflation is hitting but they are still the big destinations, aren't they?

HAFNER: They are but great deals can still be had. I think if consumers are willing to be flexible in their destinations and dates and they're

willing to travel after January 2nd, you can get from New York to Miami for 50 bucks, which is not bad.

QUEST: What do you expect for next year?

The reason I focus on that is, traditionally in Europe, January -- I'm old enough to remember the holiday brochures coming out immediately after

Christmas. So people make plans in January for where they're going to go in the summer.

A, do you think that dynamic still applies?

And B, what will be the big areas?

HAFNER: I think that dynamic absolutely still applies, particularly while airlines have high airfares, they have relaxed cancellation fees. So you

can cancel without penalties on a lot of airlines.


HAFNER: I think anyone who's watching, wants to get to get away in the summer, should absolutely search now and book, it because it could change

your plans later. The most popular destinations are going to be places that folks haven't been recently but are still traditional destinations.

Rome, big cities that are nearby to where you, are. If you're in Britain, Asia Pacific is very popular right now, that's because those destinations

were closed. If you want to stay closer to home, Amsterdam, Barcelona, Dublin -- these are all served by budget carriers and you can get there for

200-300 pounds.

QUEST: China, let's factor that in. We've had the last couple of years without China. It's been a big drag on APAC travel. If China starts coming

back into the market for travel, we were only really getting a taste of what a billion Chinese traveling looks like.

HAFNER: That's the big unknown.

What is the Chinese mentality?

That's the world's second largest travel market, which not a lot of people realize. But they've been shut down for 2-3 years now. What we saw in every

other country when it reopened, there was a huge burst of outbound activity.

I suspect that we're going to see a lot of Chinese leaving China.

The question is, where they're going to go?

Are they going to go to Europe and just do a handful of top tourist destinations?

Are they going to get U.S. or stay local in APAC?

We'll see. But I'm personally looking forward to all of them traveling.

QUEST: Thank you. I'm grateful. Enjoy Miami and the warm weather. Thank you.

HAFNER: Thank you, Richard. Always a pleasure.

QUEST: I'm just glad that neither of our guest shows have a nice window or a beach or a palm tree shot as they told us about where they were.

And the markets, we are off the lows of the day but still sharply down over 3 percent on the Nasdaq.

That's QUEST MEANS BUSINESS for the moment. Together, we will dash for the closing bell in 20 minutes. But that's after you've suffered -- enjoy, your

words -- world of wonder. I'm back after.


QUEST (voice-over): One can't deny Istanbul has got good bones. Once the capital of the Roman Empire and then ruled by the Ottomans, it is a city

that was built and rebuilt (INAUDIBLE).

In this messy process there were monuments and grandeur created, such as this basilica's cistern (ph).

Look at it.

How did they do it?

Sixth century, more than 300 columns, hundreds of feet, all underground.

And the aesthetics; which municipal waterworks today would bother with the intricate stone carvings?

It is a brilliant example of the attention to care and detail that Turkiye puts into preserving its past.


QUEST (voice-over): When in Rome or Istanbul.

Whether buried deep below ground or atop the waves, water is at the heart of everything here.

You have got all of the ferries going back and forth. You've got the water taxis going in between and then you've got these giant tankers going the

length of the Bosphorus, carrying the world's goods. No wonder there is an air of chaos about the whole place.

Every now and again, one of the ships hits a yali.

They are these graceful, large, expensive and much sought after villas that line the Bosphorus. They served as summer palaces during the Ottoman

Empire, where the prosperous would escape the mayhem of the city, relaxing by the quieter waters' edge.

SAFFET EMRE TONGUC, AUTHOR AND HISTORIAN: This is one of the oldest, according to many sources, it is the second oldest waterfront nation on the


QUEST (voice-over): Saffet Emre Tonguc is both historian and tour guide for the famous who come to visit. We have been invited to visit the Sarif

Mustafa Pasha, one of the best preserved yalis in Istanbul. It is owned by a member of the Sabanci family and the wealthiest in Turkiye.

Our hostess.


QUEST: How nice to meet you.

SABANCI: Nice to meet you. Welcome to Istanbul.

QUEST: Thank you. And what a magnificent home you have.

SABANCI: Thank you.

QUEST: Absolutely magnificent.


SABANCI: We are having Turkish breakfast.

QUEST (voice-over): My hostess is the businesswoman Demet Sabanci.

Well, this is a spectacular Turkish breakfast.

SABANCI: We are so spoiled that we have everything in fresh. We don't use frozen food.

QUEST (voice-over): Generous with her guests and her home, she knows the way to my heart.

Oy, fresh. Right.

As a member of one of the largest family businesses in the country, Demet had matters to attend to after breakfast. And so she very kindly allowed us

the run of the Yali.

Oh, my goodness.

TONGUC: What a room.

QUEST: And what a view.

TONGUC: We are in the narrowest point of the Bosporus. It is only like half a mile between Asia and Europe here.

QUEST: I dare not sit but are we allowed?

Yes, we are.

Frankly, I am terrified that I'm going to turn around and knock over some priceless piece of Ottoman art.

TONGUC (voice-over): Now are you ready for big surprise, Richard?

QUEST (voice-over): Always.

TONGUC (voice-over): Because I am going to show you the original Turkish bath.

QUEST (voice-over): This is quite extraordinary.

TONGUC (voice-over): Today, only in two or three mansions on the Bosphorus you can see the original Turkish bath. This is the best example.

QUEST (voice-over): Oh, dear, he is bringing back all too vivid memories of my first full on Turkish bath. Or perhaps I should say, beating.

It is a dream now, that like everything in this house, dreamlike.

When I was here four years ago or three years ago, we used they word hospitable.

TONGUC: Yes, and also very embracing people.

QUEST: Embracing. I like it.

TONGUC: And you know, throughout the ages, everybody was embraced here and there was a lot of tolerance.


QUEST (voice-over): What for you defines Turkish hospitality?

SABANCI: We would like to share whatever we have. If you go to any house, they always welcome you. They would like to share whatever they have. They

like people very much. In my case, I would like to show the hospitality because we have the same traditional for many, many years.

QUEST (voice-over): No, no, no, everywhere, you are trying to feed me.

SABANCI (voice-over): This is haidwoc (ph), a typical Turkish dessert.

QUEST (voice-over): No, no. Just a taste.

SABANCI (voice-over): Just a taste. A little more.

A little bit more?

QUEST (voice-over): Well, it would be rude not to.

And so, we retire to the coffee room. And I understand that, regardless of wealth or status, Turkish hospitality knows no bounds.

Thank you for your hospitality.

SABANCI: Thank you. You are always welcome.

QUEST: Be careful, I might come back.





QUEST (voice-over): As I walk through the Grand Bazaar with all its energy, I am aware there is one delicacy I have yet to try.

LEYLA CELALYAN, CO-OWNER, HACI BEKIR (voice-over): This is the classical one. It is pistachio.

QUEST (voice-over): Turkish delight, a magical blend of starch and sugar, gelled gems that are softer than toffee but still get caught in your teeth.

This is ready already.

CELALYAN (voice-over): Yes. It is already cooked.

QUEST (voice-over): Mmm, well done.

CELALYAN (voice-over): I really like that one, too.

QUEST (voice-over): Leyla Celalyan's Haci Bekir sweet shop has been making this stuff for more than two centuries. She is a direct descendant of the

chief confectioner to the Sultan.

CELALYAN (voice-over): It was my great grandfather who heard about the invention of cornstarch and refined sugar, so he adopted these two

ingredients and created the Turkish part we are eating right now.

QUEST (voice-over): I am sure that is unorthodox and would probably get me kicked out of the Turkish Delight Manufacturers Association.

So you have the original, you have the rose, you have the pistachio, you have the walnut.

CELALYAN (voice-over): Almonds, hazelnuts, pomegranate.

QUEST (voice-over): Do local Turks really eat Turkish delight?

CELALYAN (voice-over): They do, yes. They stick to their tradition. They bring their children, grandchildren here, especially on holiday times. It

is all about connection.

QUEST (voice-over): When you get to the bottom of your coffee and it starts getting grainy.

CELALYAN (voice-over). I take one more sip when it becomes grainy.

QUEST (voice-over): One more sip.

CELALYAN (voice-over): Then you have a Turkish delight to soothe your throat.


QUEST (voice-over): Smooth my throat.


QUEST (voice-over): Istanbul is providing so many delightful moments. And yet, there is one I have always wanted to witness and understand. It is the

whirling dervishes, whose beauty and grace and, with it, spirituality have entranced me for years.

Of course, I am aware this is a religious experience, whose history goes back millennia. I also know this isn't a trick performed for tourists. This

is a movement of meditation. And that becomes all the more clear when the head dervish arrives. He is harried. He has been in Istanbul's traffic.

Can he switch to serene?

Why are we doing this?

AKIN CAKMUT, HEAD DERVISH (voice-over): We are human. That is it. It is really simple.

QUEST (voice-over): How do you mentally get into that mode?

CAKMUT (voice-over): I started when I was in five years old. I'm 40 years old. I balance my life with this. But if you don't educate your brain, not

brain, your soul, this is nothing.

QUEST (voice-over): Watch closely and I see the humble inward search to clear the mind and cleanse the heart, all of which makes this Islamic

ritual so remarkable.

It is extraordinary to watch.

CAKMUT (voice-over): You can't sell this. This, the man, he is wearing a skirt and he is turning. It is interesting, of course. Every night we have

200 guests. But if I can give this allow to only two, that's enough for. Richard, you can do this. I can teach you.

QUEST (voice-over): Akin assures me it is not disrespectful to have a go. And so, I agree to step inside the circle.

CAKMUT (voice-over): If you cannot press your (INAUDIBLE), go like this.

QUEST (voice-over): Oh, no.

CAKMUT (voice-over): Like this?

QUEST (voice-over): Yes.

Yes, I got the idea. It is my balance that is not good.

CAKMUT (voice-over): This.

Yes, that is good. You are a dervish now.


CAKMUT (voice-over): And welcome to our community.

QUEST (voice-over): Thank you.

Four years ago, I said the word that describes Istanbul was hospitable. And that is true today. But I think we can do better. For over the last few

years, we have seen the place renewed, refreshed, rebuilt. And now I think the word is connecting. East and West, connecting the cultures; connecting

visitors, tourists and locals.

And you will want to come here and be connected yourself. Istanbul and Turkiye, connecting our world of wonder.




QUEST: Two minutes to go before the closing bell. And we have a dash to the bell. I'm Richard Quest.

Markets are falling hard as central banks continue to raise rates. Today, the ECB and the Bank of England were the latest to increase borrowing costs

by half a percentage point. Combine that with a sharp fall in U.S. retail sales and there's a major sell-off underway.

We are off the lows of the day on the Dow where we are up nearly 2.25 points and it's even worse. In the triple stack, when you look at for

example the Nasdaq where we are down over 3 percent and falling.

A fragile economy has not stopped people from going abroad. AAA says more than 100 million people are traveling in the U.S. this holiday season.

Kayak's CEO Steve Hafner is optimistic.


HAFNER: It will be an incredibly busy travel season, probably busier I think than even 2019, which is pretty amazing, given there's 8 percent

fewer seats being flown by the airlines. So I think you should expect very full planes and very high airfares.


QUEST: A late rally, a late euro rally in the markets of today. The Dow components only two, Verizon and Cisco -- but if you look at all the

stocks, you will see them down sharply. Apple down nearly 5 percent. Salesforce is down sharply. A few tech clusters, Microsoft, IBM, Intel.

It's a brutal day whichever way you look at it on the Dow Jones and all the major markets. What a way to end the year. Not surprising, of course, as

you look at the way interest rates have been rising so sharply in the last 6-9 months.

That's the dash to the bell.

Where's me bell?

I think I left it around here. Anyway, we've got the big bell around to stop now, 2.25 percent. I'm Richard Quest. Whatever you're up to in the

hours ahead I hope it's profitable.