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Quest Means Business
US Regulators: Silicon Valley Bank Was Poorly Managed; FTX Founder Charged With Bribing Chinese Officials; Violent Clashes Erupt Between Protesters And Police In France; Alibaba To Split; Plans Unveiled For Co-Ed F1 Team; Quest's World Of Wonder; Dash To The Bell. Aired 3-4p ET
Aired March 28, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:24]
ZAIN ASHER, CNN INTERNATIONAL HOST: All right, Wall Street is down across the board this Tuesday. Let's take a look here at the Dow Jones, pretty
much flat right now. Those are the markets and these are the main events.
US lawmakers grill regulators over the collapse of Silicon Valley Bank.
Prosecutors add bribery to the charges against FTX cofounder.
And a huge breakup planned for Alibaba, the e-commerce giant plans to split itself into six.
All right, coming to you live from New York. It is Tuesday, March 28. I'm Zain Asher, in for Richard Quest, and this is QUEST MEANS BUSINESS.
All right, good evening.
Tonight, the US regulators say Silicon Valley Banks management failed to respond to growing risks despite warnings from the Federal Reserve.
Officials from the Fed, the Treasury, and the FDIC spoke on Capitol Hill about the collapse of Silicon Valley and Signature Bank as well.
Lawmakers asked them whether regulations that had been rolled back should be made tighter and they wanted to know whether supervisors were asleep at
the wheel. Many agreed with testimony by Michael Barr, the Fed's Vice Chair, the supervision he said that Silicon Valley was to blame for its own
downfall.
(BEGIN VIDEO CLIP)
MICHAEL BARR, VICE CHAIRMAN FOR SUPERVISION, US FEDERAL RESERVE: Fundamentally, the bank failed because its management failed to
appropriately address clear interest rate risk and clear liquidity risk. That interest rate risk and liquidity risk was cited, was highlighted by
the supervisors of the firm beginning in November of 2021.
The Federal Reserve Bank brought forward these problems to the bank and they failed to address them in a timely way.
(END VIDEO CLIP)
ASHER: All right, so Rahel Solomon joins us live now. So they're blaming the bank, but a lot of people are blaming Federal Reserve from an oversight
perspective, how much did they know before the collapse of Silicon Valley Bank, Rahel, and when did they know it?
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Well, Zain, that's exactly it, right? And this two-and-a-half hours of testimony had a lot of finger
pointing back and forth, with essentially the Fed and regulators saying, wait a minute, we sounded the alarms, but lawmakers also saying, but wait a
minute, how much did you know? When did you know it? And could you have done more?
So what you heard from Michael Barr there is that as late as late 2021, as far back as late 2021, and we can pull this up for you, officials at the
Fed knew that there were concerns with SVB in terms of the bank's liquidity risk, but also pointing to other events, also documenting other events at
the Fed that they had grown concerned of other events in which they had grown concerned about SVB's liquidity risk, its Board oversight, even
pointing to an October 2022, Barr's testimony saying that supervisors had met with the bank senior management to express concern with the bank's
interest rate profile.
It wasn't until February 2023, Zain, that regulators elevated those concerns to the level of the Federal Reserve Board of Governors, and I
think that's going to come under scrutiny. Why did it take so long, from late 2021 to February 2023 for those concerns to be elevated to a level
that ultimately weren't pretty significant? Of course, we know what happened in February 2023. That was just a month before we saw that bank
run at SVB, and on and on and on.
So lots of concerns and lots of questions about did the Fed act soon enough?
ASHER: And we are going to be hearing from SVB executives soon, but in terms of you know, you talk about all the finger pointing and there is a
long list in terms of perhaps what could have been done to prevent this. I think the big question is, would stress tests, Rahel, would stress tests
have prevented this?
SOLOMON: Well, Zain, that seems to be the buzzword these days, right, stress test for these banks, and could that have prevented what ultimately
happened to SVB and what happened to Signature Bank et cetera? And I think there's a big question about that, because essentially what stress tests do
is they put these banks under different hypothetical scenarios, right? They want to see how strong these bank balance sheets are, in terms of whether
we see unemployment rise to 10 percent for example, that's one hypothetical scenario. If we saw a falling GDP, if we saw market volatility, but as one
lawmaker put it, as one senator put it today, those were not SVB's problems, take a listen.
(BEGIN VIDEO CLIP)
SEN. JOHN KENNEDY (R-LA): Let's put it this way, if you had stress tested Silicon Valley Bank in 2022, it wouldn't have made any difference, would
it?
BARR: I don't know the answer to that question
[15:05:06]
KENNEDY: Well you didn't test for Silicon Valley Bank's problem. I've read your report.
(END VIDEO CLIP)
SOLOMON: And of course, Silicon Valley Bank's problems, among others were rising interest rates and what that did to its securities portfolio, but
also a lack of diversification in terms of its depositor base.
And so I think the question is, do we need more regulation in terms of these stress tests and in terms of banking regulation? Or as some would put
it, do we need existing regulation to be better enforced? And I think that's something that lawmakers are really going to be thinking about
moving forward.
ASHER: Yes, as you point out, though, there were a lot of sort of finger pointing at the Fed. Many people saying there just needs to be better
oversight at this point.
Rahel Solomon, live for us there, thank you so much.
All right, the Governor of the Bank of England says that he was surprised at how quickly Silicon Valley Bank collapsed. Andrew Bailey was speaking to
the British Parliament Committee. He said the Bank of England is keeping a close eye on the sector, and told one lawmaker that the market is on edge.
(BEGIN VIDEO CLIP)
ANDREW BAILEY, GOVERNOR, BANK OF ENGLAND: The definitive yes/no answer to your question goes back to what you said about the markets last week. They
are trying on to find points of weakness at the moment. Now, I don't think we are at all in the place where we were in 2007-2008. We are in a very
different place to then, but we have to be very vigilant.
(END VIDEO CLIP)
ASHER: Willem Buiter was the Chief Economist at Citigroup and the European Bank for Reconstruction and Development. He is now a senior fellow
at the Council on Foreign Relations. He joins us live now.
Thank you so much for being with us. So now that this hearing is over, what does Congress do now, do you think?
WILLEM BUITER, FORMER CHIEF ECONOMIST, EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT: Well, with a bit of luck, they see A., some legislation that
reimposes the tighter Dodd-Frank conditions that were relaxed in 2018; and B., hopefully take some measures to improve the oversight of the banks
because there clearly was an oversight failure, in addition to a management failure.
ASHER: So in terms of who were what is really to blame in all of this. I mean, is it largely, I mean, you talk about obviously, there was an
oversight failure, for sure. Many people, obviously, are pointing the finger squarely at SVB saying there was clearly major mismanagement at the
bank.
I mean, obviously, as well, there are oversight issues. I mean, even the fact that the Federal Reserve just continued to raise interest rates is
also a massive issue here as well. So, where do you think the blame really lies in all of this?
BUITER: Well, the blame lies first and foremost, of course, there is the management of SVB that has incredibly concentrated depositor base giving it
liquidity risk, and this massive exposure to long-dated debt instruments, exposing it to interest rate risk.
I don't think the Fed can be blamed for doing what it should be doing when faced with persistent inflation that is raising policy rates. That was the
right and proper response.
If management had been more competent, and if supervision had been more insightful, and more aggressive. SVB was only ranked third on the five-
point CAMELS rating system, which the Fed uses to rank banks by the degree of difficulty they're likely to encounter where one is best, and five is
worse.
So it wasn't -- that even in February, ranked as a potentially non-viable bank, simply a bank that needed to change its risk profile. So, I think
there's a lot of regulatory failure to be learned from.
ASHER: As you know, investors are really, you know, searching, I mean, scouring for any sign of weakness in any of the major banks right now. Many
people have come forward and said, look, the banking sector is resilient. I mean, we heard that today as well.
Investors don't seem to be 100 percent convinced just yet. What is it going to take to fully convince them of that?
BUITER: I think the only solution to this problem is time and if there is a run on another bank, another firm and appropriately steered response by
developing monetary authorities, whether we talk about Credit Suisse or about SVB and the other US banks that even now are still subject to some
run risk.
[15:10:15]
BUITER: So, I think only time you'll heal this wound, and the proven ability of Central Banks to stand ready as lender of last resort and market
maker of last resort to deal with this market liquidity and run problems. No private mechanism can defend you against the run risk. There has to be a
lender of last resort standing ready.
ASHER: All right, Willem Buiter live for us there. Thank you. Appreciate your insights here.
All right, US prosecutors have charged Sam Bankman-Fried with offering Chinese officials a bribe worth $40 million. The FTX founder ordered the
payment in an effort to unfreeze accounts belonging to his hedge fund, Alameda Research. Federal prosecutors say that China had frozen the
accounts which are holding about $1 billion in digital assets amid a crackdown on cryptocurrencies.
SBF has pleaded not guilty to eight of the 13 charges that he is facing. He has yet to be arraigned on the remaining five counts.
Kara Scannell joins us live now from New York.
So Kara, what more can you tell us here?
KARA SCANNELL, CNN CORRESPONDENT: Well, Zain, yes, prosecutors announcing that they added one additional criminal charge against Sam Bankman-Fried,
that was a conspiracy to violate foreign bribery laws, and as you say prosecutors allege that he helped transfer $40 million to at least one
Chinese government official to get them to unfreeze an account, that account belong to his hedge fund, Alameda Research, and according to
prosecutors contained over $1 billion in digital assets.
So after this $40 million payment was made, prosecutors say, the count was unfrozen. That is just one of 13 criminal charges that they've Bankman-
Fried is facing ranging from fraud and conspiracy in what prosecutors say is one of the largest financial frauds in US history.
Now Bankman-Fried is due back in court on Thursday, where he will be arraigned on the five charges he has not yet been arraigned on. The Judge
also modifying his bail saying that he will only allow him to use a Virtual Private Network.
You may remember that Bankman-Fried used one to watch the Super Bowl, but that raised concerns by prosecutors because of the ability that it has to
encrypt the kinds of websites you go to and the activities that you do online. So the Judge is saying he will allow him to use it, but only on a
laptop that is controlled by his lawyers and only to access documents that he would need to defend himself, documents that belong to FTX -- Zane.
ASHER: And as you and I, Kara, were discussing several months ago, we know that several of SBF's foreign business partners have pleaded guilty to
numerous charges. What do we know about how much they are cooperating with investigators at this point?
SCANNELL: All right, so I mean, these executives, it was basically the other top three executives, including his former cofounder of FTX, and the
former CEO of Alameda Research, that hedge fund, they all began cooperating with prosecutors and they pleaded guilty to numerous counts. That is
generally an indication that they are looking to cooperate very fully with prosecutors because they want a good deal.
They want prosecutors to tell the Judge at the end of their cooperation, that they contributed substantial assistance to the investigation so that
the Judge will sentence them to lower jail time. Now prosecutors have said that they have been talking to a number of current and former executives at
FTX. They're inviting people to come forward with information. They are certainly casting a wide net and looking to gain a lot of cooperation from
insiders. That certainly adds to the pressure that SBF is facing and he so far has pleaded not guilty to the eight charges that he has been arraigned
on so far.
ASHER: All right, Kara Scannell live for us there. Thank you so much.
All right, just now, President Biden addressed a school shooting yesterday in Nashville, Tennessee. Three nine-year-olds and three adults were killed.
Police say the attacker was a 28-year-old who once attended the school. The shooter was killed by police.
Authorities say that the attacker was under a doctor's care for an emotional disorder, but they have yet to determine a motive. Let's listen
to what President Biden had to say.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: As a nation, this is not hyperbole, as a nation, we owe these families more than our prayers, we owe
them action. You know, we have to do more to stop this gun violence ripping communities apart and ripping apart the soul of this nation, to protect our
children, so they learn how to read and write, instead of duck and cover in a classroom.
You know we need to act. These are weapons of war.
I'm a Second Amendment guy. I have two shotguns. My sons have shotguns, you know, but in our States you know, everybody thinks somehow the Second
Amendment is absolute. You're not allowed to go out and own an automatic weapon, you're not allowed to own a machine gun, you're not allowed to own
a flame thrower, you're not allowed on so many other things.
Why in God's name do we allow these weapons of war on our streets and at our schools?
According to law enforcement, the shooter thus far, had two assault weapons and a pistol and what in God's name are we doing? These guns are the number
-- this is hard to believe. I never thought when I started my public life, that guns would be the number one killer of children in America. Guns.
Number one.
It is sick and overwhelmingly a majority of gun owners agree, we have to do something, not just everybody -- gun owners agree.
There is a moral price to pay for inaction.
Last year, we came together to pass the most significant gun safety legislation in 30 years. It was bipartisan. We got it done, and don't tell
me we can't do more together.
So I again call on Congress to pass the Assault Weapons Ban. Pass it. This should not be a partisan issue. It's a common sense issue. We have to act
now.
And people say, why do I keep saying this if they are not happening? Because I want you to know who isn't doing it. Who isn't helping. Put
pressure on them.
(END VIDEO CLIP)
ASHER: President Biden speaking there.
All right, there have been clashes between protesters and police on the tenth day of nationwide pension reform strikes in France. Some group set
fire to garbage and threw projectiles at police in Paris and in turn, officers fired teargas as well. There have been similar clashes in other
cities including Nantes and Bordeaux.
Earlier in the day, the government rejected new demands by unions to suspend the bill raising the retirement age by two years. That is where Sam
Kiley joins us from.
Now, Sam, obviously, it's pretty much nightfall where you are. I can see that people are milling around behind you, but certainly things look a lot
calmer now than when I spoke to you a few hours ago -- Sam.
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, it is a lot calmer. The number of gendarmes and police here probably outnumber the
protesters, I have to say. There is still a bit of a nip, if you like, of teargas in the air. And that is because earlier on this evening, there were
some pretty heavy clashes between the police and stone and bottle throwing rioters, frankly, who were at the front of this demonstration, which was
organized, the second inside a week, organized by the unions as part of what they call widespread strikes, attempts to disrupt the economy, as well
as make their point.
But there had been a very heavy police presence on the street here in Paris, five-and-a-half thousand police deployed for today's demonstrations,
13,000 across the nation.
The numbers of participants in today's demonstration down in the early 90,000s down from about 120,000 last Thursday when the unions also
organized a mass demonstrations, so there is concern among the unions that whilst the opposition to this legislation that is rapidly going to end up
on their statute books without any real legislative blockage, the energy is there, but the will to fight may be going out of many people in France
because of these strikes that have been on and off since January, hitting strikers in their pockets.
They obviously don't get paid for the days they don't work, and therefore there's real concerns among the unions that they need to get into
negotiating with the government, rather than rely on street protests.
More extreme elements, though, are firmly clearly of the view that street protest is the way to go, that potentially, the only way to force a U-turn
on the Macron administration, but I have to say the Macron administration is absolutely firm in interviews with CNN and with the other Ministers who
have given interviews. In fact, Macron himself with the local media here saying absolutely not, we have to force through these changes of the
pensionable age from 62 to 64. The reason for that is budgetary, the French government simply says it can't afford that level of pension generosity any
longer.
ASHER: And obviously, as you well know, Sam, Paris is a pretty popular tourist destination. I'm just curious what has been the economic impact for
Paris of these strikes?
KILEY: Well, there aren't any figures, I don't think yet, but clearly there's been a garbage collector strike at much of the French capital now
for many weeks. That is actually going to come to an end tomorrow because the strikers can't afford to stay off work indefinitely. So, they are
saying they're suspending, not ending their strikes.
The economy more widely has clearly been hit. There's been effects on the oil production, refined oil production, the transport sector has been very
badly hit and there is obviously going to be an impact being made on the French economy, not least because just as the tourist season starts to
approach, these are the sorts of images that people see on their television sets.
[15:20:15]
KILEY : But that said, we are a little further away from peak tourism season on the one hand, and on the other hand, not many blocks from here,
life has gone on completely normally, in the rest of Paris.
Paris, has not been completely paralyzed or shut down, not even by the strikes, not even by the piles of garbage that have collected on so many
streets until now.
ASHER: As you point out, Sam, there is only so much longer we believe that this can actually go on for.
Sam Kiley, live for us there in Paris. Thank you so much.
When we come back, widespread unrest and division in Israel over judicial reform that is impacting the country's business community, we'll hear from
one Israeli CEO moving funds out of the country in response.
(COMMERCIAL BREAK)
ASHER: Widespread unrest and division in Israel over judicial reforms is impacting the country's business community. One Israeli FinTech, Papaya
Global, began moving funds out of the country in January, because of the instability. Speaking with Julia Chatterley, its CEO explaining why she
thinks other business leaders should do the same.
(BEGIN VIDEO CLIP)
EYNAT GUEZ, CEO, PAPAYA GLOBAL: This is a very, very, very complicated issue. Obviously, there are two sides here with very strict opinions about
what they think is right and wrong, but if you're looking on the recent kind of events, I think that there is more and more agreement that we
should protect our economy, we should protect our nation actually, and we should protect our democracy, because it seems that we are going into a
place where the word is looking in Israel and asking quite clearly what's going on and starting to lose faith in us.
(END VIDEO CLIP)
ASHER: Nic Robertson joins us live now from Jerusalem where protests have largely subsided after Prime Minister Netanyahu said that he would delay
his reform plans, but Nic, even though he is delaying them, he is still in a bit of a lose-lose situation.
I mean, somehow in a month, within the next few weeks, I guess, within a month, he has to find a way to please both sides. How does he do that?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: There are some people here that think that he can't do it. The steps that he took yesterday, in
terms of putting a pause in the judicial reforms and saying that he'll get together with the opposition leaders under the auspices of the President,
the President as a mediator, if you will, and that began tonight.
[15:25:08]
ROBERTSON: You know, I think on the international stage, Prime Minister Netanyahu's message has resonated because he has received an invitation to
go to the White House. But on the streets here, there are a lot of people that are against the reforms, that don't really believe that the Prime
Minister is really going to make compromise with the opposition, that his right-wing coalition is really too extreme to get into the sort of
compromises that could be broadly acceptable, and that's why we had protests back on the streets today.
Yes, they weren't in the -- protesters weren't in their thousands, they were in their hundreds. But again, they were saying they we are going out
there, because they don't want to be caught off guard, they don't want any fast moves by the Prime Minister. They want their voices to continue to be
heard, and the way that they believe that they can keep the Prime Minister thinking about their point of view, is by protesting. This is what some of
them told us.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: All of us really wants to be -- to live in a democracy, and the people are really divided and we have families where
people in the same family have different opinions about what happened.
UNIDENTIFIED FEMALE: We are severely concerned about the situation here in Israel and because things have happened, without any control, we do not
really feel that we can trust our Prime Minister.
UNIDENTIFIED MALE: Our Prime Minister, and he is a master in psychological maneuvers. And of course, his goal now is to calm the
resistance, is to make it fall asleep.
(END VIDEO CLIP)
ROBERTSON: So that said, that term fall asleep, they are saying that they need to stay awake.
So I think, here in Israel, yes, the concern continues. Eyes obviously on the President and his mediation efforts at the moment, hopes perhaps not
too high, realization could go back to protest.
But internationally, at least, it seems that Netanyahu has regained perhaps some of the initiative internationally appearing sort of more statesman
late yesterday, saying we're divided, saying it again today, we are divided. We need to work our way through it.
But no one here really thinks that this is anywhere close to being resolved, and so more protests, bigger ones, perhaps in a month or so's
time.
ASHER: I mean, we will see what happens after Passover.
Nic Robertson live for us. Thank you so much.
A new Formula One team is in the works and this one could alter the gender ratio of the sport. We'll have more on the team dubbed Formula Equal, next.
(COMMERCIAL BREAK)
[15:30:00]
(MUSIC PLAYING)
ASHER: Welcome back.
Alibaba announced it's splitting up into six separate parts. And one reaction, certainly from the markets. See, shares up 13 percent or so,
almost 14 percent actually. Each new unit of Alibaba will be independently run and able to raise its own capital, as well as the potential to have its
own IPO. CNN's Clare Sebastian has more on the ecommerce giant's future.
(BEGIN VIDEOTAPE)
CLARE SEBASTIAN, CNN CORRESPONDENT: This is a huge change for Alibaba, a company that spent the last 24 years expanding into different areas but one
that may help turn the page on several years of intense regulatory scrutiny in China.
Now it will become a holding company, it says, in all but one of its six business groups will get their own CEO and be able to fundraise, even
perhaps IPO separately. The main ecommerce business, including the team, all and tower bow (ph) platforms by far the biggest revenue drivers.
They will stay owned by the parent company. Now this should Alibaba says, unlock shareholder value and that is much needed up until this
announcement. Alibaba's New York shares had lost more than 70 percent of their value since China started ramping up its crackdown on regulation
toward the end of 2020.
This announcement also comes at a time where China looks like it could be loosening that grip on the tech sector as it prioritizes growth after years
of COVID restrictions. In fact, this week, after more than a year of absence, Alibaba's founder, Jack Ma, who is rarely been seen in public
since giving a speech criticizing the Chinese authorities in October 2020, well, he reappeared, visiting a school in Mainland China.
Perhaps a sign that Alibaba's relations with the Chinese authorities are improving. And while the company says that separating out the various
businesses will make it more agile, it will also likely help it avoid too much regulatory scrutiny going forward -- Clare Sebastian, CNN, London.
(END VIDEOTAPE)
ASHER: China is trying to reassure businesses that the country will open up even further. China's premier spoke to business leaders yesterday about
the country's post pandemic plans for growth. Marc Stewart has the story from Tokyo.
(BEGIN VIDEOTAPE)
MARC STEWART, CNN INTERNATIONAL CORRESPONDENT: Some of the biggest names in global business have been spending time in Beijing as China tries to
bring new life to its economy amid some serious economic woes.
One of the most visible faces has been Apple CEO Tim Cook, who attended the China Development Forum in Beijing. But he's not alone. The CEOs of Pfizer,
Blackstone and Hitachi are others on the list.
China's new premier Li Qiang has been very involved in the effort to stop a slump in business confidence that's hurting China's economic development.
Among other things, Li is pledging China will go along with international economic and trade rules, along with giving equal treatment to forward
investment.
China's economic woes are well known. There's debt, a shrinking workforce. The aftermath of COVID lockdowns, along with the crackdown on private
business. This is all happening at a time when China faces challenges in the region from other nations, who want companies to come to their soil --
Marc Stewart, CNN, Tokyo.
(END VIDEOTAPE)
ASHER: In the world of Formula 1, a completely gender neutral team is in the works. This is historic. It is called Formula Equal and stands to be
the first of its kind in the sports, creating the team carries a hefty price tag, more than $1 billion.
(SPORTS)
[15:35:00]
(SPORTS)
ASHER: On tomorrow's QUEST MEANS BUSINESS, here's a programming note for you. Richard is going to be presenting the show to you live from Brussels
at the airlines for Europe's aviation summit. He will be speaking to some of the biggest names in aviation about some of the challenges ahead and the
future of European travel as well.
Including the CEOs of Lufthansa, Ryanair, easyJet, Finn Air and AirBaltic as well. That is 3 o'clock in the afternoon if you're watching from the
East Coast of the United States, where I'm in New York, at 9 o'clock in the evening Brussels time.
All right just about 20 minutes left to trade on Wall Street.
[15:40:00]
The Dow is looking set to close slightly lower after giving up gains from the afternoon. The S&P 500 and the Nasdaq, both falling as well. That's the
Dow on screen right now.
It had a bit of a pretty good day at the beginning up until about 1 o'clock in the afternoon and it's been the red in the red ever since. All right
that is QUEST MEANS BUSINESS. I'll be back at the top of the hour as we make a dash for the closing bell.
Up next, Quest's World of Wonder.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
RICHARD QUEST, CNN HOST (voice-over): Magnificent.
If you come to Cape Town and see only the city and the sea, you will have done well. But it will be like a good meal without coffee and dessert.
Just look at this. I don't think I've ever been in vineyards when they are heavy with grapes.
ROSE JORDAN (PH), PLACIA WINE ESTATE (voice-over): It's the most exciting time on a wine estate.
QUEST (voice-over): For the fertile soils that made this land so attractive to those early settlers, now bear fruit that produce spectacular
wines.
I mean, absolutely phenomenal.
JORDAN (PH): This really is the dream. (INAUDIBLE) privileged to be able to call this work.
QUEST (voice-over): I've been invited by the owner of the Placia Wine Estate, Rose Jordan (ph).
This all belongs to Placia.
QUEST: All that?
JORDAN (PH): Yes, and quite a bit more.
QUEST (voice-over): I'm going to experience its expansive offerings and that goes far beyond growing grapes.
[15:45:00]
QUEST (voice-over): The thing I always find interesting with farmers and people and doing this thing, people like me look at this and think, oh,
isn't this lovely, the vines, the view, the wonderment, all, gosh, it must be nice sitting around all day thinking. But it's not that is it?
JORDAN (PH) (voice-over): This is a world, this is truly a world, it's almost a legacy project. You start -- you grow a vine and only in three
years does it start bearing. Only in seven years does it start bearing good grapes, good enough to make good wine.
And only after many years, great grapes making great wines. But what really is important are these skins. So you can see just by the size of this
grape.
QUEST: I'm eating into your profits. Sorry. Sorry.
JORDAN: Oh, we're never going to make it.
QUEST: In six years' time, they will have serious economic problems because I was eating the profits.
JORDAN: Because, remember inside this grape, it's actually like a green grape. So without the skins, contact with the juice, you'll never have red
wine.
QUEST: I love grapes.
JORDAN: It is delicious. They are.
QUEST: They are. I always thought they were bitter and sort of hard. It's not at all.
JORDAN: I don't know where you've been tasting wine grapes but not in South Africa.
(MUSIC PLAYING)
QUEST (voice-over): Rose and her family only recently acquired Placia. There are newcomers to the estate that's been growing wine grapes for over
300 years.
The best of them, A grade grapes, are always picked by hand. And whilst I can't pick this precious product very fast, I do get on with the job.
For the tractor.
UNIDENTIFIED MALE: For the decade.
QUEST (voice-over): I don't drink alcohol, so you might have thought I'd be bored silly here.
Suitable headgear.
But there's plenty to do beyond supping.
You've got to be joking.
(MUSIC PLAYING)
QUEST (voice-over): I can ride a bike, a mountain ebike. The electrical help is brilliant for those who know what they're doing. And for the rest,
my incompetence and inexperience is on full display.
Ugh. I'm not sure about this.
And yet I ride bikes every day, big bikes or road bikes, city bikes. But these powerful ebikes on hills and gravel, they move in ways I don't expect
and can't react in time.
Ahh!
You gave me two pieces of advice, both of which were extremely helpful: don't look at the wheel and speed is your friend.
JORDAN: Yes. I think that's probably a little metaphor for life.
QUEST: Go on.
JORDAN: Look ahead. Don't be where you are. Look ahead and persevere. Put a bit of speed into it.
QUEST: That's been your mantra.
JORDAN: It has. There's so much adventure to be had. There is, you know, we're surrounded by the Cape Floral Kingdom, which is the most abundant
floral kingdom on Earth. It is so beautiful. There's incredible mountains. There's really something to do for everyone.
(MUSIC PLAYING)
QUEST (voice-over): Come here to drink the wine by all means. I could eat the grapes all day.
You're going to make a very nice wine.
And once I tame this two wheeled terror, I shall ride witness and enjoy.
I think one has to remember, the ebike is much more powerful than me. And he's just -- the bike is just waiting for somebody who knows how to use it.
It's like a -- it's like -- it's like driving a Ferrari through central London. You can feel the car going, oh, please. This isn't what I was meant
for.
JORDAN: Well, listen. We did a tiny bit of the trail because there's 1,300 kilometers of trail in the winelands district (ph) --
QUEST: Ooh!
You see, the mere thought of --
JORDAN: (INAUDIBLE) your safety device.
Oh. Now (INAUDIBLE).
(LAUGHTER)
JORDAN: There's just lots of --
(CROSSTALK)
JORDAN: -- you know, so you actually need to stay for about a month.
(LAUGHTER)
QUEST: Help. Somebody rescue me.
Madwoman.
JORDAN: You're not the first person to say that about me, Richard.
(MUSIC PLAYING)
QUEST (voice-over): There's an old Afrikaans saying that they still use here, (Speaking Afrikaans), "the farmer makes a plan."
Always being prepared, having something to fall back upon. So much of this country today runs on this concept and (Speaking foreign Afrikaans), plan
B, what's next?
And, thankfully, the rest of us reap the rewards.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
[15:50:00]
(MUSIC PLAYING)
QUEST (voice-over): It is my final day in Cape Town. I have a meeting in the lush curtain bosh National Botanical Gardens. I can hear before I see
the people I'm coming to meet, fully throated alfresco, if you will. It is a setting that is literally over the top, true operatic drama.
May I introduce the Cape Town Opera Company?
AFRICA MELANE, CAPE TOWN OPERA: Who was it that said that music begins when words no longer suffice?
That's what that chorus does to me every time I listen to them. They hit the heart and it's in that rhythm. It's in that soul. It's in that timbre,
it's warm. It's glowing. It's just -- it's beautiful.
QUEST (voice-over): Africa Melane is the vice chair of the opera company. He's also one of the city's most well-loved radio personalities.
Why does Cape Town need an opera?
MELANE (voice-over): This is a world class city. The operatic format of expression is centuries old, ultimately telling a story. You're just doing
it in the most complicated, complex and wonderfully rewarding ways.
QUEST: Great.
It's easy to get swept up in the positive energy of this uplifting harmony. And this in a country dealing with daily power cuts and a challenging
economy.
Is this the Rainbow Nation as South Africa is envisioned as it emerged from divisions of apartheid?
That was, ooh, sensational, great God!
(LAUGHTER)
MELANE (voice-over): Oh, we owe that term to the great late Archbishop Emeritus Desmond Tutu. His vision was that we would all meet, we will share
our stories, then we'll forgive each other and will be this one wonderful Rainbow Nation.
It's in tatters right now. It's hard to believe in one vision when there are so many challenges.
QUEST (voice-over): You say it's in tatters but touches can be repaired.
MELANE (voice-over): It's reparable.
QUEST (voice-over): Has it been broken beyond repair?
MELANE (voice-over): I don't think so. I don't think so. I think the work we have to put in going forward will take a lot more energy than necessary.
But it's not beyond repair.
QUEST (voice-over): What is it about Cape Town you love?
(LAUGHTER)
MELANE (voice-over): What isn't there to love?
We are a different city. There's a lot of Dutch influence and a lot of Europe influence here. In that respect, yes, we draw a lot on Western
culture and --
QUEST (voice-over): Is it about the feeling?
MELANE (voice-over): I would argue, still is, very, very much is, Cape Town aspires to be a city in line with the grades (ph) but it is very much
rooted in African experience, value and treatment.
[15:55:00]
QUEST (voice-over): What is not to love about a visit to Cape Town with views like that?
In fact, Cape Town and the whole South Africa experience, put aside the problems and the word I think that best describes the experience you'll
have is awesome. And you will want to come here and experience this awesomeness for yourself.
UNIDENTIFIED MALE: Brody, come on, Brody.
QUEST (voice-over): I knew better to enjoy it with a trusty sidekick named Brody.
(MUSIC PLAYING)
QUEST (voice-over): The awesome beauty of Cape Town, the bonhomie of Brody.
QUEST: Brody you are a beauty.
QUEST (voice-over): Together no doubt part of our World of Wonder.
ASHER: Hello, everyone. I'm Zain Asher, it is the dash to the closing bell and we are just two minutes away right now. U.S. bank regulators were
grilled on Capitol Hill about two high-profile bank failures, specifically about SVB.
We saw the Fed executives blaming banking executives for mismanagement. A lot of people questioning the Fed whether they did their part in terms of
oversight. Let's see how the Dow reacted to all of that news.
The Dow, right now at least, has certainly given up its gains. It's set to close about 60 points lower. Earlier in the day, you see that it was
largely in the green until about 1 o'clock in the afternoon and then it fell into the red. But again right now, it is mostly flat.
The S&P 500 is off. Let's see about 2 percent or so. The Nasdaq also fell for a second straight day, down about 0.5 percent.
The Federal Reserve's interest rate hikes played a part in the collapse of Silicon Valley Bank. Still economist William Buiter told me the failed bank
certainly has only itself to blame.
(BEGIN VIDEO CLIP)
WILLIAM BUITER, ECONOMIST: The blame lies first and foremost, of course, with the management of SVB, that is incredibly concentrated, depositor
base, giving it liquidity risk. And there's massive exposure to long dated debt instruments, exposing it to interest rate risk.
I don't think that the Fed can be blamed for doing what it should be doing when faced with persistent inflation.
(END VIDEO CLIP)
ASHER: William Buiter there, saying that the Fed had to raise rates, of course, to combat inflation.
END
