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Quest Means Business
First Republic Bank Deposits Tumble By $70 Billion In Q1; US President Biden Announces He Is Running For Re-Election; More Strikes Planned Despite Laws Passing On France Pension Reforms; Biden Announces 2024 Bid; Prince Harry Says William Settled Phone Hacking Claims; World Of Wonder: Seoul. Aired 3-4p ET
Aired April 25, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:23]
RICHARD QUEST, CNN INTERNATIONAL HOST: There is an hour of trading left, and if you look at the markets, you'll see that they're down and indeed
heavily down. We'll get to the reasons why and we'll talk through them. There is that very sharp fall just after one o'clock, and they are bouncing
along the bottom. I think that'll probably be where we stay unless there's a sort of reason to go even further down, but I don't see a recovery
between now and four o'clock.
The main markets and the main events of the day. Joe Biden wants another four years. At 80 years old, he announces his campaign for re-election.
France is bracing itself for another round of major strikes. The transport minister will be with me live on this program tonight.
And the man who oversees New York's three major airports explains how he is trying to put an end to their terrible reputation.
(BEGIN VIDEO CLIP)
RICK COTTON, EXECUTIVE DIRECTOR OF THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY: We are tearing down the old facilities and building new 21st
Century facilities at every single one of our major airports.
(END VIDEO CLIP)
QUEST: Live from New York on Tuesday, it's April the 25th. I'm Richard Quest, and I mean business.
Good evening.
We start tonight with First Republic Bank, which says it will cut staff and look for ways to bolster its finances. It revealed the extent of the damage
from last month's spiking crisis. The shares of the bank fell even further today. Look at that, down 43 percent, and the reason investors or
depositors have taken more than $70 billion in Q1. The balance sheet would have looked even worse, if a $30 billion lifeline from America's top banks
hadn't been put in. The shares are now more than 90 percent lower for the years so far.
Rahel Solomon is with me.
You know, the issue -- when I heard all of this today, I wondered, firstly, has the situation stabilized or is money still flowing out? And secondly,
is the bank solid? I mean, in a sense -- well, answer the first one first, has the situation stabilized.
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: The deposits have stabilized, right, which is not necessarily to say the bank has stabilized, but
deposits have certainly stabilized and hard to really say that after we saw that stunning fall of 40 percent in deposits in the first quarter.
But if you look at more recent weeks, the company says that fall was actually closer to about 1.7 percent and they attributed that to tax season
here in the US.
So, have deposits stabilized? Yes, but that doesn't necessarily mean that this won't be an uphill battle. Take a look at the stock performance,
Richard. You just showed from January.
I want to take you back a bit farther and take you back to last April, you can see the really stunning fall. We can pull up here the last 12 months,
you can see the real stunning fall in the stock price. Twelve months ago, the stock was at $155.00, and I think we can pull this up for you, $155.00,
now trading at about $9.00.
So here is what we learned, Richard in terms of what's ahead. A few things actually helping First Republic. The company said that it has actually
maintained about 90 percent of its clients. It says deposits had stabilized and it is cutting back on expenses, and we can show you some of the ways
that it's doing that.
On the other hand, it is trying a new strategy. It says that it is going to try to reach new consumers, broaden its deposit base, but that comes with
risk.
QUEST: Okay. But is the bank solid in the sense that if we look at SVB, there were problems with deposits, there was the problem with the risk
portfolio, there were the problems with all sorts of underlying banking issues that made the bank in a sense, no longer viable. Is that the same
with First Republic? Or did it just get caught up in a nasty maelstrom?
SOLOMON: Well, look, I think that's an interesting point, but I think you can point to a lot of different banks that say that there is a certain
level of vulnerability in terms of confidence, right? And so I mean, that is at the heart of banking just in general.
So in terms of First Republic, is it stable? Well, I think that remains to be seen. Its profits are certainly going to get hurt. Its margins are
certainly going to be under pressure, and so there is a question in terms of consumer-base stability, but then there was also a question in terms of
margins and profitability for the bank and whether that will be enough.
So it's a question that remains to be seen, but the company clearly trying to do what it can to turn itself around. But Richard, as you and I talked
about yesterday with Bed Bath & Beyond, turnarounds are not easily done.
[15:05:02]
QUEST: Funny, I was walking past Bed Bath & Beyond this morning on my way to the gym and it's a vast thing that they've got here in downtown
Manhattan, I just thought, well, I mean, how long that's going to last.
Rahel, I'm very grateful. Thank you very much, Rahel Solomon.
Joe Biden has made it official. He is running for re-election. He is currently 80 years old. He would be 86 if he gets a second term at the end
of his second term.
The President's video announcement returned to familiar themes. He said the soul of the country is still at risk, and that the threat is coming from
extreme Republicans and Joe Biden said the choice basically comes down to American values.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: The question we're facing is whether in the years ahead, we have more freedom or less freedom, more
rights or fewer? I know what I want the answer to be, and I think you do, too.
This is not a time to be complacent, that's why I'm running for re- election.
(END VIDEO CLIP)
QUEST: Now, the President will aim to highlight the record. At a Trade Union Conference, he touted legislation, like the Inflation Reduction Act
that we've talked about so often, and he boasted of his pro union record and said workers deserve credit for the country's economic success.
(BEGIN VIDEO CLIP)
BIDEN: I'm here because there is no better place to talk about the progress we've made together and wouldn't been made without you, and that's
not hyperbole, that's a fact.
Our economic plan is working. We now have to finish the job and there is more to do.
(END VIDEO CLIP)
QUEST: David Gergen, you are the man we need, our senior political analyst to try -- I mean, look, you know, did you ever doubt that you would
run?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: No, not seriously. I thought there was a time when he might not, but I didn't take it very seriously.
Clearly, he has wanted to run for a long time. This is a man who loves the job. You know, there are a lot of folks who get elected who go and discover
they really don't like what they have to do. This guy really enjoys it. It is the way he finds meaning in his life. And I think in that sense, he has
great motivation to do it.
QUEST: Right. But should he run again? I mean, I hate to sort of play the age card, but he is 80. He will be 82, 83, then 86 by the time -- it is
sort of -- it is the exact opposite of a Kennedy torch being passed to a new generation.
GERGEN: I agree. It's hold on to the torch, right?
Listen, I've for a long time been on the record of saying, I think Donald Trump and Joe Biden both should step back and welcome in a new generation.
We need to pass the torch. We need it all up and down the line in our politics, not just at the top, but in many, many other places -- state
offices and elsewhere.
But I have to tell you something, Richard. You can't beat something with nothing, and the other side right now, given where Trump is, given the fact
he may not yet escape jail, you know that there's a lot of weakness on the other side. Joe Biden would not be anywhere close to winning this were it
not for the weakness everywhere else.
QUEST: So if the Republicans decide to go against or to not to have Donald Trump and you know, it is a long way, and say Biden ends up facing
Ron DeSantis, then it becomes more interesting, in a sense, because you will have the next generation against the former.
GERGEN: Well, I agree, but I do think it would be best on both sides. You know, Donald Trump is not going to be any young man soon either, and we've
got two different -- and then the dangers here are sort of palpable. It is just -- it is not only what's going on here domestically, but look at the
dangers overseas that are mounting, the drift toward potential war.
Medvedev, today, the henchman for Putin is out saying, you know, what we all along told you that we would never be the first to use nuclear weapons,
but now we may have to. Basically, that was his message and he threatened to war.
We've got all sorts of issues and people who were young, quick, quick off the mark, have good judgment, you know, we would be better served by, but
Joe Biden, you have to say, you have to give him credit, he hung in there and he has built this up.
He has defanged the Republicans to a considerable degree, so you know, I think he has earned a lot of this. It's just that if you look at the -- if
you think we we've got six -- he would be 86 when he finishes, that would be unheard of.
QUEST: Does he have a record upon which he can run that doesn't get destroyed by the opposition? I'm thinking obviously Afghanistan, they're
going to point very hard to and there would be various other areas. And yes, inflation but every other country has got inflation, so it is not
really unique to the -- but it is not unique to the United States -- does he have a strong economic record in your view?
[15:10:10]
GERGEN: He does-- the economy -- you judge strong economic record on two things. One is, does it bring -- does it snap the economy back and we've
got a robust economy coming out of it? And so far, that has not been the case.
But the second element of how we judge Presidents on the economy, do they get some fundamental things done? And he has made some progress with regard
to the industrial industry of the United States. In the Midwest, things are looking up, and he is playing to the union vote now trying to take some
labor vote away from Trump, away from the Republicans.
But, you know, he argues, and I think with some validity that people saw him as a transitional president, and what he wants to be remembered, as is
a transformational president.
QUEST: So I was -- when I heard this morning that he was running again. I mean, I was immediately thinking of Dianne Feinstein, of course, from
California who won't step down from the Judiciary Committee.
GERGEN: Yes.
QUEST: And of course, they're not going to be able to replace her bit by bit. These people never know when to leave.
GERGEN: Look, I agree with that. There's too much clinging to the curtains, and what has made our democracy work in part is that over time,
you do, when the time comes, when everybody is best served by you moving back, giving the responsibility to a new generation, that's where we are
now.
It's just that the current generation that is in power does not want to give it up. It is all about creation of power and the use of power, and as
I say, I think that you know, Biden is not an obvious leader, but he has been pretty savvy about a lot of these things.
One of the things that was interesting today was for example, I was expecting many more and many others that when Biden made his announcement,
when he made his announcement that he was going to run, again, that he would answer the question -- the Kamala Harris question. That is, is he
going to keep Kamala Harris on the ticket or off the ticket?
And you know, there are an awful lot of people who feel on different times with that within the Democratic Party. Well, he finessed it and that he
never mentioned her in the talk, but he had her picture in like several times.
QUEST: Yes.
GERGEN: It was like, she saw more of him on this level through monitoring than she has probably in the last three months.
QUEST: David, lovely. Thank you, sir. Thank you. You elegantly said exactly what I was looking out to you about her. She appears in the video
and that's about it.
Thank you, sir. I'm grateful. Good to see you. Thank you.
GERGEN: Okay, take care.
QUEST: Now, as we continue tonight, Newark Airport used to be one of the worst in the United States. Its new Terminal A has undergone a massive
renovation, and we went to have a look with the man responsible for the renovation, the head of the Port Authority.
(COMMERCIAL BREAK)
[15:15:42]
QUEST: The French President, Emmanuel Macron may have got his way with pension reforms, but the unrest that those reforms created still carries
on.
In the Loire region today, protesters were banging pots and pans outside a medical center that the president was visiting. There will be more
nationwide strikes on Friday on Monday, and one on Monday, May Day, is expected to be a big one, which of course will also include lots of
transportation issues. Bad news for commuters and tourists.
Previous rallies have disrupted the Eurostar and the TGV train service and forced airlines to cancel flights. The French Transport Minister, Clement
Beaune is on the line now.
Minister, grateful to have you with us. I mean, yes, the law has been passed, but the protests continue. And it now looks as if transportation is
going to be one of the victims over the next few weeks.
CLEMENT BEAUNE, FRENCH TRANSPORT MINISTER: Thank you very much.
Indeed, it was a difficult reform. It went through Parliament, as you said. Now, there are still some protests. I must be very frank, they are much
more limited than they were before, the strikes in particular, in the transport area in particular.
So I think political life will go on. Our Parliament will pass all the laws. We have to find compromises to find coalitions for the next reforms.
But it is strong reform, which was passed. It was part of the presidential agenda last year in the elections, and I think it was an important signal
to do it at the beginning of Mr. Macron's term.
QUEST: Oh, absolutely. I mean, if you can't get it done at the beginning, get the bad news and get the bad stuff done early, but where did these
protests go? I mean, now the law is passed, and it is going to take effect.
I mean, surely, you'll be arguing? Well, what's the point?
BEAUNE: I mean, it's a democracy, and it is good. So if people want to protest, if they respect the law, and if there is no violence, which is the
case for most of these protests, it can happen.
When you compare the protests now with the protest in January, when the bill was proposed by the government, the difference is very big.
There are a few people now still protesting, sometimes radical; in many -- in some cases, very limited violence, but the bulk of the protests is gone
now, and the bulk of the protest, I must insist on that was peaceful, was full of respect for the discussion.
It is difficult, but all pensions reform, which have been passed in recent years in France were difficult. What is important, I think, was to say it
in the presidential election and to do it, and we've done it, we've delivered and now we will move on.
QUEST: So if we talk about the other -- if you Google your name, the one thing that comes up is basically or one of the many things that comes up is
your ongoing crusade, if I will, against private jets.
France now will have, or is hoping to have a high tax, 70-odd percent extra tax for fuel for private jets. I was surprised to learn that basically,
France has the largest private jet fleet in Europe. So is this -- is this the way forward for you?
BEAUNE: It is important, but don't worry, it's not a crusade. It is important because we are making in France, as in many countries, efforts,
collective efforts, individual efforts in our everyday lives, to adapt to consuming less energy, to taking into account this green transition. It
means it changes, it means change of behaviors.
And I think it's important that's even if it's a symbol, people who use more energy, who spend more on energy are contributing to this collective
effort. So don't worry, it's not about killing an industry. This aviation industry is very strong in France, I want it to remain very strong.
We're investing a lot, which is a priority in clean fuels for instance, in this green transformation of this industry. We will succeed and we have set
a target of zero carbon for 2050 in this industry, but in the meantime, I think it's important to take into account some behaviors, some activities
which should contribute bit more to the greening of our transport system.
[15:20:07]
QUEST: So would you -- one of the issues that airlines for Europe has been very concerned about is the way in which air traffic control strikes
in France or industrial action in France, you know, the argument can affect the entire continent because of overflight. Should the rules be changed so
that overflight continues?
BEAUNE: I know indeed that there were some worries and some difficulties, I'm sorry for that, because it's had an impact on the air traffic across
Europe, this period of strikes is now I hope, gone, or are very much limited. So the impact that you are describing will diminish in the coming
weeks, and we are ready for the summer, which will be a big moment of increase in the air traffic, we are getting ready for this.
We're also changing -- you were talking about rules -- our technical systems, which was part of the problem too, so that we are absorbing more
traffic, dealing with more traffic.
And on the rules of strikes, we want of course, to protect the rights of strikes, which is a democratic rights, but we will discuss and adapt in the
coming weeks and months our rules in this particular area to avoid what you described.
QUEST: So you are prepared to revise the rules on that, and the other thing that the old perennial single European skies, at what point -- I
mean, if you're talking about climate change and making -- there is a 10 to 15 percent, low-hanging fruit that can be plucked, if there was a proper
single European skies across the continent.
BEAUNE: That's true. It is not black or white. We have made a lot of progress on unifying our rules in Europe on the aviation sector, you're
right, it's not perfect in this area or in other European areas.
We are working on unifying the rules, simplifying the rules, but for instance, you were talking about the green transition, low hanging fruits,
we will unify our rules for clean fuels in the aviation sector.
We will unify our rules for functioning of air traffic in the coming months and years, and we will reform our own air traffic control, not to go into
many details, but to make sure that what has happened in the last weeks is not happening in the coming months, is not happening also during the
Olympics, which we are welcoming in Paris and in France the next summer, we will make sure everything works.
QUEST: And I'm looking forward to being there as well, Minister. We will talk to you again, hopefully in Paris. Very grateful for your time tonight.
BEAUNE: It would be very awesome.
QUEST: Thank you.
Now, we continue tonight. JetBlue says it is preparing for staff shortages this year, and the US air traffic control towers are not.
The head of New York City's airport authority told me something similar.
Rick Cotton said that the system is still struggling and they're also trying to hire extra staff. The Port Authority of New York and New Jersey
is undergoing renovations at all its major airports, there you see them.
The LaGuardia up at the top, JFK of course, very famously out in the east, and over to the west, actually in New Jersey, Newark.
I met Rick Cotton at New York's recently opened Terminal A when he gave me the grand tour.
(BEGIN VIDEOTAPE)
QUEST (voice over): Traveling to New York City used to be a miserable experience, something to be endured, not enjoyed.
It was a journey through places like LaGuardia that Joe Biden once compared to arriving in a third world country.
And the other airports in the tristate area weren't much better. JFK, Newark, and even the Port Authority Bus Terminal, they were too small, out
of date, and difficult to get to. Survey after survey showed travelers thought they were amongst the worst in the country.
The Port Authority has spent billions of dollars and many years rebuilding the travel experience. LaGuardia Terminal B, rebuilt, reopened, and just
named the world's best new terminal by Skytrax.
And now Terminal A at Newark recently opened after a $2.7 billion renovation.
QUEST (on camera): I like this.
QUEST (voice over): And that's where I met the man behind it all. The head of the Port Authority, Rick Cotton.
COTTON: Soup to nuts. We are tearing down the old facilities and building new 21st Century facilities at every single one of our major airports.
QUEST (on camera): Michael O'Leary of Ryanair is a firm believer that all you need is a shed, that you go in -- you've heard this -- you go in the
front, you go out the back. You don't necessarily subscribe to that view. You think there needs to be something that says something?
COTTON: Yes. Well, airports are gateways, first of all, and they're also symbols of the regions that they serve. And so that's what they need to be.
[15:30:00]
QUEST (voice over): One of the airports isn't actually in New York, it's Newark. Now, they are proudly pointing out that Newark is close to New
York, but it's actually next door.
COTTON: You will see references to New Jersey across this new Terminal A. You will see constant references to New York across the new LaGuardia.
You will see future tense, we are spending $19 billion at JFK, you will see in those terminals, New York.
QUEST (on camera): JFK, the perpetual construction site. It never ends.
COTTON: Yes. If you looked at JFK, it was probably in worse shape than many people realized -- small, outdated, outmoded. And so we are doing a
wholesale redo, and there are going to be two very large, brand new international terminals. Our ambition is for them to be the best in class,
best in the world and stand up to comparison internationally and in this country.
QUEST: Finally, the Port Authority Bus Terminal. Have you met your waterloo?
COTTON: Well, it is not --
QUEST: Have you met your waterloo at the Port Authority?
COTTON: We will find out. We have developed in cooperation with both states and in cooperation with the community there a very imaginative and
very ambitious plan, and so there is a lot of enthusiasm, a lot of momentum and we are looking to complete the current environmental review process and
are working toward a start of construction by the end of next year.
QUEST (voice over): Mr. Cotton told me that the old Terminal A was built 50 years ago. It was another era in travel. Over the years, it was too
small, in the worst condition of all the terminals at Newark.
He told me the lessons they learned as they were building the new Terminal A.
COTTON: What we've learned is you need open spaces, you can't have pinch points, you can't have places where queues formed. You have to have the
technology support, rapid throughput, the ease with which people board so that all of these gates are equipped with e-Gates in ways that right now
people can board just with their cell phone, but in the future, it'll be biometric.
QUEST (on camera): We're getting ready for summer. Last year was horrible. Will this year be better? Are you ready?
I know to an extent, it is not you. It's all the various -- but you get the blame.
COTTON: Well, the fact is the system is still struggling a bit in terms of coming back, finding staff that goes across. It is with our government
partners, it is with the airlines, it is with the Port Authority, we have the highest vacancy in terms of jobs we're trying to fill, and this this
summer, it is going to be over 2019 levels.
There is just no question, travel has come back. So we are preparing for it in terms of actually hiring extra staff. We're preparing for it in terms of
being sure that every system has checks and double checks, but it is going to be a challenge.
QUEST: Final question, it is going to take time to build and even longer in a sense to change the perception. Do you suffer from when you travel,
and people are still being rude about some of your airports, and you really have to say -- have you actually been there in the last five years?
COTTON: You are absolutely right. The reputation of these airports historically is that they were the worst in the country, and it does take
people seeing them actually to alter their historic image and frankly, I believe words are close to useless, people have to see it.
So you can't tell someone who was through the old LaGuardia and they haven't seen the new LaGuardia or suffered through the old Terminal A at
Newark, and haven't seen the new Terminal A, you can't tell them, well, we're going to make it better. Just believe. Lack of trust.
So the fact is, however, that as people use the airports particularly post- COVID, people do double take, and that's when people start to believe that when we say world class, we mean it.
(END VIDEOTAPE)
QUEST: And before a break, a quick, profitable thought. He is right. The new terminals or termini in the New York airports are truly exceptional.
The LaGuardia and Terminal A, they are truly fit for purpose in the next century. Now, they've just got to do with the rest.
Back in a moment.
(COMMERCIAL BREAK)
[15:30:00]
(MUSIC PLAYING)
QUEST: And so to our top story again, President Biden's announced he's going to run for a second term.
The labor market's been exceptionally strong under his tenure. The economy's added more than 12 million jobs since he took office, admittedly
from a low point. Inflation has been more of a problem, jumping to 10 percent last year and now fallen back, as the Fed aggressively raised
rates. That's created its own problems for business.
Rich Lesser is with me, the global chair at Boston Consulting Group, he is with me from San Francisco.
It is always good to see you, sir, and I'm grateful for you now. We're not -- I'm not asking you, if you like, a political question per se. But if you
take the economic environment under which, whoever is going to be running, whether it's Biden, Trump, DeSantis, would you say that it is grist, it is
meat for one and poison for the other?
RICH LESSER, GLOBAL CHAIR, BOSTON CONSULTING GROUP: So, well, first of all, Richard, it's a pleasure to be with you as always. I think we have to
recognize we're still a ways out from the heart of this campaign in a remarkably uncertain environment.
I think that, if you had to guess -- but you'd have to put a very wide uncertainty band around it -- you would say, a year from now, I'd be on the
more optimistic side of the economy.
I think inflation is continuing to come down and people tend to react to inflation on a very short term basis. What did it cost, you know, last week
to buy groceries or to fill their gas tanks. And I think we watched the inflation rate coming down.
There's a good chance we'll see some bump in unemployment due to the rising interest rates but there's no sign we'll see large numbers of unemployment,
you know, a huge spike. And the job creation has been pretty solid.
So don't get me wrong. There'll be arguments on both sides. Some people will be talking about the negative, some the positive. That's always true.
I just think that the net of it is likely to be a relatively positive picture if you project out a year to 1.5 years from now.
[15:35:00]
QUEST: You see, the old line, "It's the economy, stupid," which, of course, goes back to previous campaigns. But inflation has been worldwide.
I mean, I think only when you get an international perspective, you realize that the U.S. has had it but the U.K. has got it worse and it's still
there, elsewhere.
But there have been difficult times but there hasn't been that heavy loss of jobs that we saw in prior recessions. And I wonder if people will simply
just say, well, things have got a bit more difficult.
LESSER: Look, there will be a negative narrative that will be portrayed by those who want to -- who want to take the office. And I think there'll be a
positive story about 12 million plus job creations and inflation coming back under control, despite all of the global challenges that will be put
forward.
I actually think this may be one election where "the economy, stupid" is not the defining element of the election. There's divide -- the vision on
so many levels are such geopolitical complexity. I don't think that it will be the economy as the defining factor in this election the way we've seen
it in many past elections.
And if anything, it will be a slight positive but, for the people that are angry about other things, would be so positive, little offset that, I don't
-- I don't think so.
QUEST: Rich, the market's down quite sharply today. And one of the reasons is UPS, which, as you know, has its finger in just about every part of the
U.S. economy. It's basically saying things are getting tougher and we're off now on the day 300 points.
Now your company also has its fingers in many different pies of the U.S. and indeed the global economy.
Can you feel it?
Does it feel that things are getting better?
Or does it still feel that we have, if not exactly a recession but we've still got a bit of sludge to trudge through?
LESSER: I like the way you framed it. I think a bit of sludge to trudge through, Richard, is a is a good description. Remember, you know, the
rising interest rates, the uncertainty that's come with that, that has not played all the way through yet.
And I -- and when we see companies in their internal dialogues right now, there's a lot of focus on resilience for a very uncertain world.
And I don't think -- do I see that translating into, you know, the unemployment rate spiking in a huge way?
No.
But will many companies take action to be more protective of their P&Ls, more careful about the near term growth environment?
I do think we'll see that. So we're not through this yet. And -- but on the flip side, it doesn't (INAUDIBLE) going into --
(CROSSTALK)
LESSER: -- really harsh time (INAUDIBLE).
QUEST: Rich, one final question, which we talk so much about AI and ChatGPT and all of these sort of things.
How are you managing the use of things like ChatGPT at Boston?
Are you, you know, an outright ban, no. But you don't want all of your people using it to do other work.
I mean, how does it -- how can you integrate it to take advantage of the new AI opportunities but, at the same time, don't let it take over?
LESSER: Well, you've put your finger on a critical issue right now. It's hard to be in a discussion with a business executive and, frankly, many of
the discussions inside BCG, too, where generative AI and the potential it offers and the ways to do things differently and more efficiently doesn't
come up as a big opportunity.
But the care that one needs to take in that is enormous: care to use it responsibly; care to run controlled experiments versus letting it run like
wildfire, where everybody does their own thing; care to be responsible around whether it's protecting IP or whether it's ensuring that, you know,
hallucinations somehow don't enter into the internal dialogue,
What you prepare for a customer or a client (ph), I mean, those are huge issues right now that companies are wrestling with in very real time. We're
talking -- we're five months in, I think, to the explosion of this as a -- as a publicly visible, rapidly advancing technology.
And everybody's in an incredibly rapid learning mode right now. And that's where we are as well.
(CROSSTALK)
QUEST: We'll talk more about this with you. I'm grateful to you, sir. Thank you. Thank you, as always.
LESSER: It's great to see you.
QUEST: Thank you.
Well, Prince Harry claims that his brother, the Prince of Wales, Prince William, received a very large sum, as it says, from a phone hacking
settlement with Rupert Murdoch's newspapers.
The revelation came in court documents. Prince Harry also claimed Queen Elizabeth knew about the settlement talks. Buckingham Palace said they do
not comment on legal proceedings.
And similarly, Murdoch's newspapers said they had no comment. Anna Stewart is with me.
Anna, let's take this at a fair clip because there's much ground to go.
Number one, did it happen?
ANNA STEWART, CNN CORRESPONDENT: Well, it depends.
[15:40:00]
STEWART: Which of the many, many, many allegations and claims we are talking about in all of this?
This is Prince Harry, essentially wanting to take Murdoch's News Group newspapers to court. This is all pretrial hearing. He's trying to argue why
he should be allowed to make these claims, which are very old past limitation. Why he can make them now.
One of the reasons, he says, is that Prince William, his brother, was able to reach a settlement for, and I quote, "a large sum of money" in 2020, so
past that period of limitation.
No comment from the palace and no comment from the newspaper publisher.
QUEST: So William is perfectly entitled to reach a settlement. The issue will become whether the public should have been told about it, even if they
didn't know the amount involved.
Is this the sort of thing that the British people should have known about?
STEWART: Well, that is probably a question for the royal family. It's a private affair. In that sense the royal family are allowed to have private
court cases. But listen, there is more to this. This is just one of the bombshells.
One of the other bombshells is that a secret agreement, Richard, was reached between the royal family at the institution, as Prince Harry calls
it, and the publisher of these newspapers.
And that secret agreement meant that they could come to an agreement later on. Once all the phone hacking litigation was over with, that could be
reached. And that is one of Prince Harry's other arguments.
Added to that, Richard, I've just got this latest witness statement from Prince Harry, which says, "Staff at Clarence House," he says, "in 2017 were
reluctant to help him do just that, even though we had the permission of the queen," he says, "because they were trying to keep the newspapers on
side to smooth the way for King Charles and the queen consort --
QUEST: Oy!
STEWART: -- they took up those roles. Again, no comment from the palace.
QUEST: Oy! Email me that, please, I need to read it. Thank you.
(LAUGHTER)
QUEST: Thank you very much. That's QUEST MEANS BUSINESS. I'll close off the markets for you in about 15 minutes but only after you've enjoyed
"World of Wonder."
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(COMMERCIAL BREAK)
[15:45:00]
(MUSIC PLAYING)
QUEST (voice-over): K-pop and those moves have taken their toll, bigots are twingeing (ph) that shouldn't. My mind may be energized; my body is
aching.
In Seoul, there is a solution.
At the Korean baths and sauna.
QUEST: A minimum of 10 to 15 minutes in this hot water, they want my skin to become like a prune.
QUEST (voice-over): The tradition here is to go as nature intended and, when in Rome -- or in Seoul -- you know what I mean.
QUEST: Feels amazing. It's the opposite if you will of a luxury spa with soulful (ph) music. But he knows his business and he's getting down to it.
QUEST (voice-over): Here it's all about getting the job done.
QUEST: Oh, that feels good.
QUEST (voice-over): From massage to heat and I descend into what feels like the fires of hell.
QUEST: I'm slightly nervous, actually. They call it the furnace. Oh, my goodness.
It's so hot in there that my shoes will melt?
UNIDENTIFIED FEMALE: Yes.
(LAUGHTER)
QUEST (voice-over): The heat is so deeply ingrained in the walls and atmosphere.
QUEST: Oh, it's very hot at the top.
QUEST (voice-over): It's as if the very room had been on fire, which as I learned it had.
QUEST: Oh, that feels so good.
Once it's finished that the furnace then becomes the sauna. So for instance, this one has just been finished and I'm told is the hottest.
(MUSIC PLAYING)
QUEST (voice-over): Right.
So this is the one that was burning yesterday.
Oh, you've got to be joking.
People go in here?
UNIDENTIFIED FEMALE: (INAUDIBLE).
QUEST: Aah, aah, it's too hot.
UNIDENTIFIED FEMALE: (INAUDIBLE)?
QUEST: Whoo. That was really good.
QUEST (voice-over): Before I bake completely, some light warm, if you will, refreshments. There is a time and place for fancy spas and this isn't
it. This Korean pastime is primal, all about water, fire, very hot food.
I can't hold it.
UNIDENTIFIED FEMALE: (INAUDIBLE).
QUEST: Good.
UNIDENTIFIED FEMALE: Very good?
QUEST: Very, very good.
(LAUGHTER)
QUEST: (INAUDIBLE).
QUEST (voice-over): Seoul is one of those cities that rolls on and on. And yet never far from here is the extraordinary fact, frozen in time, only 30
miles away, the North.
The two countries are separated by the DMZ, the demilitarized zone, a no man's border, 2.5 miles wide, stretching 160 miles.
I'm heading to the very heart of the zone.
UNIDENTIFIED MALE: The red placards indicate the presence of mines.
QUEST (voice-over): The joint security area, correctly called the Truce Village.
QUEST: Oh, oh, wow.
QUEST (voice-over): Here the U.S. and South Koreans maintain a major base, with the North Korean military just over there.
Really surreal. Those gray stones actually mark the border. These gentlemen are really here to make sure we stay on the path.
(INAUDIBLE).
The South and the North are technically still at war. So this is a real military border and, despite the seeming quietness, one of the most tense
places on Earth. Even this neutral meeting place straddling North and South is designed to make sure there are no misunderstandings.
[15:50:00]
UNIDENTIFIED MALE: These microphones are on and they're broadcasting to both sides at all times.
Please don't lean on any furniture or touch anything. But you're welcome to take pictures.
QUEST (voice-over): When then president Trump walked across the line, he added his own bit of history to a border rife with symbolism.
So that is the line of demarcation between the North and the South President Trump crossed. I can walk across it in here because it's
international agreement. But if I was outside, I would not be allowed.
There is just an absolute feeling of what if, what if I suddenly had to run through it, would they stop me or what if they came out and what if?
UNIDENTIFIED MALE: With you running across, that would be an incident for sure. So they're well trained to stop that. And most of the soldiers that
are stationed here have Black belts and one or multiple martial arts because you can't be armed in the JSA but, you know, hands only.
So I personally wouldn't risk it.
QUEST: (INAUDIBLE).
UNIDENTIFIED MALE: For me, working up here feels very surreal. But I know the consequences of what we do are very real.
(MUSIC PLAYING)
QUEST (voice-over): Frankly, it's amazing that Seoul, so close to all of this, has flourished, despite the risks.
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(COMMERCIAL BREAK)
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QUEST (voice-over): Here in the heart of Seoul, they dress up to come to the palace. It's a rather nice local regulation that, if you dress up in
tanbark, which is the traditional wear, you actually get in for free.
Far from rejecting it, these young people are embracing the past and using it to increase the credibility of their online identity.
UNIDENTIFIED FEMALE: Thank you.
QUEST: Thank you.
UNIDENTIFIED FEMALE: (INAUDIBLE).
(LAUGHTER)
(MUSIC PLAYING)
HYUNJU CHO, "PEARLYSIEN": (INAUDIBLE).
QUEST: Do we try one yet or --
CHO: Yes, you --
QUEST (voice-over): It's my last day in Seoul. And if I started the week having noodles for lunch with JJ, I'm finishing it up having lunch with
Pearlysien.
CHO: I love it.
QUEST (voice-over): They are on opposite sides of the K-life spectrum yet know how to remain relevant with their own YouTube channel.
Hyunju Cho is a retired graphics designer. She now uses her channel for style advice and life's lessons.
To the market she brought me for lunch and gave me a few lessons of my own.
CHO: You have to two fingers, put the one chopstick and move, move it.
QUEST: When did you first do YouTube? Why?
CHO: Because I am retired. Korean paper (ph) (ph) my same generation. Retire is the end of life. To the something is difficult. But I want to do
new life, new step.
QUEST: Was it hard?
You have a young mind.
CHO: Because I'm not old. I'm not.
QUEST (voice-over): She is indeed. I can feel a youthful exuberance. And do not be fooled by the innocent manner. There is mischief all around.
I want to show you the --
(CROSSTALK)
CHO: -- over there, over there.
QUEST: You go. You lead.
CHO: Yes.
QUEST: Determined to find out what's being made.
[15:55:00]
CHO: So we call this drug kimbap.
QUEST: Drug kimbap, because everybody keeps wanting more and more and more.
So we can't have this one because it's a side dish for the restaurant.
Just take one.
CHO: (INAUDIBLE).
QUEST: No, just one.
CHO: (INAUDIBLE).
QUEST: Oh.
QUEST (voice-over): as we eat our way through the market, it is clear.
QUEST: I'll never reach all this.
QUEST (voice-over): The secret to staying K-cool is something I've practiced while I've been in Seoul.
Don't be afraid to try and do things.
CHO: Too hot?
QUEST: Can I ask you?
CHO: Yes?
QUEST: A question.
CHO: Yes?
QUEST: That is very rude to ask in Korea.
How old are you?
CHO: I am 60 years, 61 years.
QUEST: We are the same age.
CHO: Really?
QUEST: Yes.
CHO: Oh!
(LAUGHTER)
(MUSIC PLAYING)
QUEST (voice-over): To make the most of your visit to Seoul will require a shift in perspective. They have a word for it here, which I think perfectly
sums it up. It is newtro, a portmanteau of new and retro, the traditional and the modern, the old and the new with an ease of technology that you'd
be hard pushed to find anywhere else.
And you'll want to come here and experience this newtro for yourself, new, retro Seoul, part of our world of wonder.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
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QUEST: Hello, I'm Richard Quest. Together we're going to have a dash to the closing bell. We're only two minutes; in fact, we're less, 45 seconds
away from the bell.
UPS has missed on its first quarter revenue and volumes are down and it's pessimistic. That outlook that sent the markets lower. The Dow is now just
at the worst of the session, down 1 percent off 340 odd points. The other averages are also down sharply.
The Nasdaq is having the worst of the day, down some 2 percent. That's the way the markets are looking. Many more results to come over the next half
hour, an hour or so, from the tech sector. This is the way markets looked.
The closing bell is ringing on Wall Street. Whatever you're up to in the hours ahead, I hope it's profitable. If he wins, Joe Biden will be 86 when
he leaves the White House. "THE LEAD" starts right now.
END
