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Quest Means Business

Ukraine: Russian Strike Hits Kramatorsk City Center; Putin Addresses Aborted Insurrection; Lagarde: ECB Must Persist With High Rates; Over 4K U.S. Flights Delayed Or Canceled; NYC Real Estate Company Prompts Film And TV Companies To Utilize Empty Offices; Quest's World Of Wonder: Budapest; Dash To The Bell. Aired 3-4p ET

Aired June 27, 2023 - 15:00:00   ET



RICHARD QUEST, CNN INTERNATIONAL HOST: A positive day on the markets as we go into the last hour of trading. The Dow is on track for its first

positive day since June the 15th, which is an achievement since it is the 27th and it is a good solid gain, which we'll explain as the program goes

on. Not a huge number, but it's there, and it's solid, and that is the way the markets are looking.

The events of the day are anything but solid. We will be telling you the breaking news in Ukraine. Two people are dead and 22 injured after a

missile strike in Kramatorsk.

There are dashed hopes in America's industrial heartland as the electrical vehicle maker, Lordstown Motors files for bankruptcy.

And misery -- more misery arguably for air travelers in the US and the fear is that a summer of discontent is about to begin.

We're live in New York, Tuesday, June the 27th. I'm Richard Quest, and yes, I mean business.

ANNOUNCER: This is CNN breaking news.

QUEST: We start in Ukraine where officials say search and rescue efforts are underway in the city of Kramatorsk following a deadly missile strike.

One of the missiles landed in a crowded civilian area. An eyewitness told CNN, they saw almost a dozen people being pulled from the rubble. Three

people are now known to have died, one of whom has a child. There are of course, lots of injuries.

And Ben Wedeman is there at the scene in Kramatorsk.

How about is it?


This strike happened at 7:32 in the evening, and behind me is his very popular restaurant called the Ria, very popular with soldiers and with

local residents.

Now what we see is it appears that more than one, we believe a missile struck this general area, the damage is extensive, not just in the

restaurant itself, but all around.

And now what we have behind us is rescue workers are really digging through the rubble, trying to find more injured. In fact, Kosta, our fixer just saw

one injured civilian, a worker in the restaurant being pulled out.

Now, I was able to get actually inside of what remains of the restaurant, which isn't much and what I saw is that they're huge slabs of concrete that

they're trying to dig under. They've brought a crane to lift some of them more of those out.

Now the latest figures we've heard from an official in the president's office is that at least three people have been killed, 25 injured. The

expectation is that there are more people under the rubble.

Now, the air raid siren went off about 20 minutes ago and one of the worries is that there could be what's known as a double tap that as soon as

a strike happens, the first responders come, people gather, another strike will happen. So that's always one of the dangers.

And keep in mind, Richard, that Kramatorsk is not far from where some of the most intense fighting occurs, and oftentimes, Kramatorsk is struck as a


Bakhmut, for instance, is only about an hour's drive from here. So this city, alas is no stranger to strikes like this that killed civilians and

soldiers alike -- Richard.

QUEST: Ben, you alluded to it just in your answer, tell me more. I mean, is there, from a Russian point of view, is there a legitimate military target

that this would have been aiming for, and it has hit civilians instead?

WEDEMAN: Well, certainly what I've seen over the last year-and-a-half that I've been coming to Ukraine is that there is no -- there is no logic to

some of these hits. Sometimes, a civilian residential building is hit for instance, in nearby Sloviansk back in April, killing 15 people for no

obvious reason.

In this instance, keep in mind, Kramatorsk, close to the front. There is a lot of military, there's a lot of military equipment, there is a lot of

logistics in this city, and therefore it's not out of the realm of possibility. In fact, it's likely that the Russians would target things

like this, establishments, restaurants, hotels where soldiers gather.


And I was at that restaurant rather recently, and it was full of exactly that, lots of soldiers and a fair scattering of civilians as well --


QUEST: Ben Wedeman in Kramatorsk, grateful, sir. Thank you.

Staying with matters with Russia and Ukraine, the Wagner boss, Yevgeny Prigozhin has arrived in Belarus according to the Belarusian president,

Alexander Lukashenko.

Now, Lukashenko offered more details about how he got Prigogine to back down, and end his march to justice to Moscow.


ALEXANDER LUKASHENKO, BELARUSIAN PRESIDENT (through translator): He says, but we want justice. They want to strangle us. We will march on Moscow, and

I say, halfway to Moscow, they will squash you like a bug even though as Putin told me, the troops were busy on a certain frontline.


QUEST: Now, Russia has confirmed that it is dropping charges against the Wagner Group for its aborted rebellion and says the paramilitary force will

hand over its weapons.

As for President Putin, today, he said the Russian state has paid the Wagner Group military around a billion dollars over the last 12 months and

the president thanked his own security forces who were involved in fighting off the attempted mutiny.


VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): Real defenders of the motherland, you saved our people, our homeland, virtually. You stopped

a civil war, an actual fact, you stopped a civil war.


QUEST: Nic Robertson is our international diplomatic editor. He is in London.

No, they didn't. They didn't stop the civil war. Prigozhin turned around and didn't proceed.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: And Lukashenko said that, so you have two presidents who are apparently very close to each

other and Lukashenko is a junior partner. Now, Lukashenko looks like he's speaking out of turn, because Putin says, the soldiers did it, we were


So, it's definitely -- it doesn't pass the sniff test what President Putin is saying. Lukashenko, it is harder to check out his private conversation

with Prigozhin for sure, but -- and also this sort of doublespeak on the Russian side, too, from Putin because on the one side, as you say their

charges have been dropped against Wagner, against Prigozhin for the insurrection.

But actually, what Putin outlined later in the day to another group of soldiers was the amount of money that Prigozhin had been making and his

company Concord, another billion dollars have been making out of the government on different sorts of contracts, and suggested there could be

financial irregularities with Wagner or Concord and that was going to be investigated.

In Kremlin speech, that is him laying the groundwork for financial charges against Prigozhin.

QUEST: In just a minute, Nic, I'm going to be talking to the Polish ambassador to NATO in Brussels. Now, of course, Poland has a border with

Belarus and with Russia. Prigozhin, you know, we are in danger of making him seem like the good person here because he was against, sort of, if you

will, Putin.

But the man is a menace in his own right and if he is on the border with Belarus and Poland, then this all becomes very difficult.

ROBERTSON: Yes. Prigozhin is a thug of the highest order. I mean, his guys would take a sledgehammer and kill using the sledgehammer, kill somebody

who deserted their ranks. It is hard to get people more brutal than that, and Prigozhin is that person, that boss. His soldiers love him because he

is tough and he speaks up to authority.

But here is the bizarre thing, when Lukashenko was speaking today, he said, I actually think Prigozhin is a hero, because he was sticking up for his

fighters. He said, I would actually like to have a unit of Wagner inside Belarus because they could teach our military a thing or two about

defending the country.

So yes, there is a possibility, gosh, knows how all that happens. Will Lukashenko really follow through on some of his bluster and rhetoric that

we heard today? But he is framing a possibility here where Prigozhin and Wagner fighters coming without their weapons, get rearmed in Belarus and

patrol in the border with Poland. I mean, that sounds bonkers. It's unlikely to happen, but some of his journalist are asking Lukashenko

questions today were asking for Prigozhin is likely to be now given authority to sort of look after some of the nuclear sites with the nuclear

weapons that Russia has sent and based in Belarus now.

QUEST: Well, that sent a shiver down the spine.

Nic Robertson in London, I'm grateful.

To the story now of how it is seen from Poland. The Polish president has made it clear having Prigozhin in Belarus and Wagner personnel next door is

not welcome.

[15:10:08 ]


ANDRZEJ DUDA, POLISH PRESIDENT (through translator): The relocation of de facto Russian forces probably in the form of the Wagner Group to Belarus,

as well as the transfer of the head of the Wagner Group there, those are all very negative signals for us, which we certainly want to raise strongly

with our allies.


QUEST: And they will be raising it to people like our next guest, Tomasz Szatkowski, the Polish ambassador to NATO.

Ambassador, thank you. Not only on your doorstep do you have now Russian nuclear weapons in Belarus; now, you have the Wagner Group and Prigozhin.

It's not looking very good for you.

TOMASZ SZATKOWSKI, POLISH AMBASSADOR TO NATO: Yes, indeed. Thank you very much for having me. In order to understand the situation, we would need to

go back almost two years when Belarus regime actually started a hybrid operation using some microns, but also perhaps there was an operation that

was conducted by their secret services in order to create this illegal migration cycle that was meant to destabilize Europe.

It was -- it didn't work out because the response of Poland was quite determined, we were defending the borders, but at the same time, for two

years now, we have a situation of a very unstable -- we have a very unstable situation where those services sometimes directly, sometimes using

those migrants are trying to create challenges.

This is done in order -- I mean, there are many purposes of such activities -- I mean, to destabilize --

QUEST: But sir, it is getting more unstable, I think is the point I am trying to get.


QUEST: It is getting more unstable, and the addition of Prigozhin in Belarus must give cause for concern.

SZATKOWSKI: Absolutely, absolutely. Because, I mean, this is a couple of thousands of well-experienced, perhaps also well-armed warriors that have

proved to be merciless in their campaigns in Africa. They've proved to be merciless in their operations in Ukraine, and now they might be used, we

don't know for what purpose.

I mean, certainly, they will not sit there idle. And in some sense, in a way Prigozhin still remains, we can assume part of a wider Russian power

balancing system.

So in one way, or the other is going to be either Russia or perhaps Lukashenko himself, who might at some point want to use them. I mean, it's

going to be quite a useful instrument in a negative sense, but at the same time, one that may provide him with a plausible deniability, so it is a

dangerous mix.

QUEST: So if we look forward to the NATO Summit in Vilnius on the 11th and 12th of July, now, back in January, you said we need to significantly

increase the extent of material support. You said there should be large scale procurement of military equipment.

Now, since then, we have had the addition of tanks, and we've had the addition of some aircraft. Do you still think NATO at its Summit needs to

commit to more military hardware?

SZATKOWSKI: Well, one important thing, NATO as an organization is not providing military -- isn't providing sort of level material to Ukraine,

this is allies. But of course, NATO provides security for its ties, so there is some direct implication.

Yes, I mean, we need to show that we are determined, and we need to show that we are in it for -- we are able to support Ukraine as long as it

takes. That means also that we have to think and plan and commit for further supplies of military material.

QUEST: And I mean, the sophistry of it not being NATO, I understand the significance for you, but in the sense that you would now be -- Poland will

be looking for allies to increase the level of military support to Ukraine, is that fair?

SZATKOWSKI: Well, absolutely. We've been doing that for quite some time. I mean, we are the first country to provide significant numbers of things and

other heavy equipment already more than a year ago. Actually, you have others followed us with the same pace. The war could have been over because

I mean, in August-September last year, we were actually facing a window of opportunity where Ukraine could have crushed the invading forces.


But it was just not enough of the material, and now where Ukraine is up again against a larger force.

QUEST: All right, I'm grateful, Ambassador. Thank you, sir. The Polish ambassador to NATO.

SZATKOWSKI: Thank you very much. Thank you for having me.

QUEST: QUEST MEANS BUSINESS, half the world's biggest corporations have said they plan to cut back on real estate because of hybrid work. We've got

some empty offices, lots and lots of empty offices. It's led to fears of a commercial real estate crash. But of course, there are other buildings that

say what crash? We're getting bump on rents. We'll talk about in a moment.


QUEST: With all that is going on in the world, you'd be well forgiven if every now and again you needed a little dram or two to soothe the nerves

and put a rosy picture on the way things are.

Well, there's plenty of places where you can get a wee dram particularly out of Scotland.

In nine different distilleries on the isle of Islay, the centuries old industry in Scotland isn't resting on its laurels. It is cropping up with

more traditions and exports with a growing global footprint.


ANNA STEWART, CNN REPORTER (voice over): Crashing waves, warring winds and snow-capped mountains. This is the Scottish island of Islay.

Its wild weather can make it a marathon to get to, but a glass of the island's single malt whiskey will transport you there in a second.

UNIDENTIFIED FEMALE: You have a briny character which takes you to the end of the pier. I can smell the peat, I can smell the land, I can smell the

botanicals. In fact, I can almost hear the birds.

STEWART (voice over): Scotland has long been synonymous with whiskey, but this tiny island off the west coast could be considered the crown jewel.

Known as the whiskey aisle, the spirit is one of the island's largest employers and it's home to nine soon to be 11 distilleries. One of which,

Ardbeg broke records last year for selling a single cask of 1975 whiskey for a staggering $19 million.

UNIDENTIFIED FEMALE: On Islay, news travels very fast, so it was talked about in the local supermarket and there was a feeling of real pride and

honesty about it that somebody wanted to pay that much for a beautiful lot of liquid from 1975.


STEWART (voice over): Today, whiskey makes up over three-quarters of Scotland's food and drink exports. More than $7 billion worth of whiskey

was sold across 174 markets last year, with an average of 53 bottles being exported every second.

Its popularity prompted a flurry of new distilleries like Kilchoman, the first to be built here in 124 years.

But despite its youth, it is taking whiskey distilling back to its roots.

ISLAY HEADS, GENERAL MANAGER, KILCHOMAN DISTILLERY: Making whiskey was traditionally done with barley, that's when it started. So the guys would

have a bit of barley left over, they grow a bit of barley, make whiskey to see them through the winter.

So we've grown the barley, malt the barley on site, runs through the distillation process, and then it is matured on site in Islay as well. And

for us, that's very important because the whole product comes from Islay.

STEWART (voice over): Born and raised on the island, Islay believes these traditions give Islay scotch, a distinct taste that sets it apart from

mainland whiskey.

UNIDENTIFIED MALE: Whiskey runs in Islay as whiskey has always been produced in Islay.

HEADS: My dad worked at Lagavulin Distillery Group for 35-plus years. My brother works at one of the distilleries locally, and my son works in

distilleries at Kilchoman, so we are all connected.

STEWART (voice over): The liquid spirit carries the islands identity, its history, and its people to every corner of the planet.

HEADS: I am very proud to be an Islay, that's somebody from an Islay. I am very proud of what Islay brings to the world with its whiskeys.


QUEST: Yes, well, those noticing closely, of course, it was Islay, I could get lynched if I go up to Scotland now. It's the Isle of Islay, that is in


The ECB president, Christine Lagarde says that the Eurozone has entered a new phase of lingering inflation. Rates will have to stay higher for longer

to avoid a wage price spiral.

The ECB have signaled more tightening, and they are trying to get inflation back to their two percent target.

Anna Stewart is in London.

These central bankers have been getting together probably during the tipple themselves to help handle this. The reality is what's actually happening is

what they feared was going to happen. The wage spiral.

I remember right at the beginning of this inflation, all of the bankers said we need to avoid a wage upward spiral.

STEWART: In many ways, I think this year in Sintra, as they all gather, they're actually probably more worried than they were last year even though

some inflation parameters are coming down. And that's because there are limitations now as to what really the ECB can do at this stage, and I think

talking about the different phases of inflation, Christine Lagarde said phase one is over. That is when input costs, particularly energy cause

firms to raise prices to protect their profit margins.

Phase two, though, is when we all demand higher wages, and the risk here is if those companies continue to protect that profit margin and that is when

you could see a wage price spiral. Lagarde guard says, we're not there yet, though.

QUEST: She may say that, but the reality is, it is what they all feared was going to happen. And now the deputy DMD at the IMF is suggesting a key

target that maybe the central bank two percent target is desirable, but might not be achievable or obtainable.

Listen to what the central bankers are saying on two percent.


JEROME POWELL, US FEDERAL RESERVE CHAIRMAN: We understand the hardship that high inflation is causing and we remain strongly committed to bringing

inflation back down to our two percent goal.

ANDREW BAILEY, GOVERNOR, BANK OF ENGLAND: Inflation hits all of us, particularly those who can least afford it. Raising interest rates is the

best way we have of getting inflation back down to the two percent target.

CHRISTINE LAGARDE, PRESIDENT, EUROPEAN CENTRAL BANK: The key ECB interest rates will be brought to levels sufficiently restrictive to achieve a

timely return of inflation to our two percent medium-term target.


QUEST: If they do not get to two percent, has their credibility gone out the window?

STEWART: Well, it depends what we are talking about -- whether we're talking about this sort of medium-term outlook, there is no precise time

when these central banks need to hit two percent necessarily, and I don't think it is suggesting that you scrap two percent entirely.

But this was -- there were three, I quote, "uncomfortable truths" from the deputy managing director of the IMF and one of them was while everyone is

concerned about price stability and inflation, you also have to remember that these central banks need to be concerned as well potentially about

financial stability, particularly post-pandemic.

Think about all of the spending from many governments. Looking at Europe, some of the debt piles from some of these governments is looking pretty

alarming. We've got a chart, I think we could show you in terms of debt to GDP.

You can see Greece, Italy, Spain, Portugal, France all well above 100 percent. So this is the other concern.

I think here, it is talking about maybe not just worrying about inflation, but also worrying about how you're going to have the firepower to fight the

next financial crisis if you can't bring those debt levels down and rates are too high.


QUEST: Ana, good to have you, thank you.

It was billed as a story of economic renewal in the US in the Heartland and it has now taking a serious turn for the worse. It is Lordstown Motors. It

was an electric truck maker that brought an old GM plant in northern Ohio that has now filed for Chapter 11 bankruptcy.

It went public in the stock craze of two to three years ago. Share price last year speaks -- well, just look at it. That tells the whole story that

you need to know.

And actually Lordstown has only delivered 18 vehicles, which is not enough to make any money.

The company is suing Foxconn, its partner and largest shareholder and it is looking for buyers.

Peter Valdes-Dapena, our auto expert is here to help us sort this out.

Who is to blame? What went wrong?

PETER VALDES-DAPENA, CNN BUSINESS SENIOR WRITER: The company, to be honest with you, has almost never had a turn for the better at any point. They had

a tough job from the get go because they set out in 2019 saying, you know what, we're going to make an electric truck just for fleet customers, so we

are going to avoid heavy competition that way, but that was before Ford Motor Company came out with the F-150 Lightning. GM announced they are

coming out with an electric truck, the Silverado EV.

So how do you sell -- you know, they have huge fleet customers already. How do you sell a truck from a startup company and now they and Foxconn, their

major investor are trading charges that neither one of them lived up to the deal that they had.

QUEST: So de facto is Lordstown history. They will break it up. They'll sell off the parts. It gives me no pleasure saying it because jobs will be

lost, but it's not coming back in any way.

VALDES-DAPENA: They're not -- well, officially they're not saying that. What they're saying is right now is, it is in Chapter 11, not a Chapter 13,

so they're not breaking the company up now. They're going to try to reorganize it. Hopefully have something then that as a complete company,

they can sell on. It could still turn out easily the way you just said though.

QUEST: Peter, very grateful. Thank you.

As we continue, more on the deadly strike in Kramatorsk, we bring you up to date on the events.




QUEST: The latest in Ukraine, where a missile has struck the eastern city of Kramatorsk, landing in the crowded city center, at a restaurant. As we

hear from Ben Wedeman, officials say at least people have been killed. A child is one of them. Dozens of people have been hurt.

It's an area popular with members of the military and residents. The White House has condemned the Russian attack. Nick Paton Walsh is in Kyiv


We have heard from Ben Wedeman about the awfulness, the indiscriminate nature of this attack. We are used to this atrocity by now. But we have to

factor it in, of course, with the events of the weekend.

NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT: To some degree, yes. It is an important reminder that, despite that distant drama

of superannuated, autocratic men battling it out around Moscow, we've still got the consistent loss of civilian life inflicted on Ukraine by Russia

through its invasion of choice that has gone catastrophically for the Kremlin as well.

Attacks like this, it is tough often to know whether it is a target which has been successfully hit or whether Russia just lashes out to a civilian

area like Kramatorsk in hopes that it hits something that could cause the most grievous damage possible.

I've been in Kramatorsk for months. And often you hear explosions. They appear to be landing quite distant to areas where there might be military

gatherings or hospitals, that sort of thing. This would be a consistent issue since this war began.

Russia's firepower is very inaccurate. Sometimes it hits something of importance for them; other times it wildly misses. No consolation for those

that have lost this peace in the restaurant in the civilian area today -- Richard.

QUEST: It is difficult from afar to judge the current level or, if you will, the status of the military attacks by Ukraine and Russia.

Are they making progress in the pushback?

WALSH: They have been making very slow progress over the past week, certainly since the counteroffensive began its open operation stages. These

are possible to maybe argue that we have seen a slight uptick over the past four or five days.

Certainly, the Ukrainians suggested they are moving around Bakhmut, the symbolic city largely that Wagner fought so hard to get, the city center

for the Russians.

There are suggestions of incremental gains continuing in the southern- eastern areas at the front line and also a new set of movements by Ukraine they've claimed across the Antonivskyi Bridge near the city of Kherson, to

the far west in the Dnipro River, where Kakhovka Dam was recently subjected to an explosion.

Still at this point it's not the big breakthrough, not the sign of a Russian collapse that perhaps some analysts felt the turmoil in Moscow --

this is the phrase that Putin used -- turmoil might have necessarily led to.

But it is still early and while we know that Wagner is likely pulling some forces back, they have not been omnipresent on the front lines. The units

they've sent to Moscow will likely pull back and prepare a significant time before this weekend.

You have to remember too, Richard, your average Russian soldier in a trench doesn't have a smartphone. They're often not allowed them so that they

don't give their locations away. You can see lots of signals in the same place and Ukraine's occasionally hit that.

So the news of this extraordinary weekend will slowly filter into the Russian front lines. It will obviously impact significantly damaged Russian


And then put that aside. If you have a Russian top brass, essentially freaking out about its own personal survival, its own position in the

constellation around the Kremlin, their minds aren't on supply lines, tactics strategy, embellishing defense on those front lines.

So there will be an enduring weakness but, fundamentally, I think that the real thing Ukraine will be hoping for here is if they continue to push

along that front line, make Russia force itself into complicated choices.

Are we going to put resources into Bakhmut or the southern front, not leave Crimea cut off?

If the difficult decision goes up the chain to the top brass or even to Putin, their minds are elsewhere. They make terrible decisions at the


Do they make yet more terrible decisions and give Ukraine a strategic advantage?

We'll have to wait for the days and weeks ahead. Richard.

QUEST: And you'll be there to help us understand it, we are grateful to you, sir, thank you.

To the United States where air travelers are experiencing several days of delays.


QUEST: Today's problems were all about bad weather. However, put it into context: it follows a weekend of delays and consolations, which United

chief executive is blaming on a lack of air traffic controllers.

The concern, of course, in the U.S. and in Europe, to, it will be a repeat of summer's travel chaos, as particularly the 4th of July holiday

approaches. Pete Muntean is our aviation correspondent. He is with us from Washington.

I've had emails, you've had emails, from every airline telling us, bumper numbers, bumper numbers for July the 4th. Even if there are weather delays,

because, of course, if you don't have your current air traffic controllers, you can't run the system. And it's optimal even with weather. Then you

throw in these other issues.

What is Scott Kirby saying?

PETE MUNTEAN, CNN CORRESPONDENT: It's layer on layer of problems here. Scott Kirby from United Airlines says that the FAA really failed the

airline over the weekend, because it simply didn't have enough air traffic controllers in Newark, which is a huge hub for United Airlines, not only

here domestically in the U.S. but also internationally.

That really caused a bottleneck of cascading delays not only on Saturday but then again on Sunday when weather hit. Now they're seeing again on

Monday and today, into Tuesday. Just checked FlightAware, we've had about 2,000 delays nationwide.

Actually scratch, that 4,000 delays nationwide; 1,300 cancellations and United has really taken it on the chin. About 774 delays, 424

cancellations. So it's a huge problem for the airline. It's because, it says, that the air traffic control system, run by the Federal Aviation

Administration, simply does not have enough people.

In fact, the Department of Transportation Office of Inspector General watchdog report, just released last week, said that there is a shortage of

controllers at 75 percent. Three-quarters of air traffic control facilities across the U.S.

So when bad thing, like weather happens, that makes it especially hard for these airlines, Richard, we both know so well, to recover from this. It

really causes the deck of cards to come tumbling down.

And you are seeing now on Tuesday, things are still bad for the airlines. They are still trying to recover at United Airlines, not just United but

Delta, JetBlue, Southwest Airlines, all really hit by these problems. It's a nationwide issue.

We have heard from folks simply trying to get to other places around the world. One woman trying to get to South Africa, saying that she couldn't

get on her flight, had to stay on a cot in the airport. It is really dismal for some of these passengers.

We are not out of the woods yet. So many people packing into flights over July 4th, it might not be over. Hopefully the weather will be good.

Although the FAA staffing issue is not going away anytime soon.

QUEST: Pete Muntean, we are grateful, thank you, sir.

The White House is closely monitoring financial risks in commercial real estate. President Biden's top economic adviser spoke today about warnings

of high vacancy rates in many of the city offices.

HSBC only yesterday announced it would be leaving its headquarters in London's Canary Wharf. It was one of the anchor tenants when it was first

built. The bank will downsize to a smaller space in the light of more hybrid working. HSBC is not alone, as Vanessa Yurkevich reports.


VANESSA YURKEVICH, CNN CORRESPONDENT (voice-over): They're statuesque, vast and staggering and they're empty. Skyscrapers and office buildings, once

stacked high with businesses, are experiencing high vacancy rates in the U.S., nearly 19 percent, 5.5 percent higher than before the pandemic.

STEVEN DURELS, EVP AND DIRECTOR OF LEASING, SL GREEN REALTY CORP.: I think it's a very unique moment. Nothing like any disruptive marketplace that

I've experienced over the past 40 years.

YURKEVICH: The pandemic emptied offices around the country. Today, the number of people returning to in-person work is less than 50 percent in ten

major metro areas, forcing companies to rethink physical office space.

Half of the biggest global companies say they'll need less real estate in the next three years, leaving landlords with loans to pay in a bind.

YURKEVICH: Because if there's no tenant, you're not making money.

DURELS: Right.

YURKEVICH: What do you do?

DURELS: There's no recouping, you know, lost income for down time.

YURKEVICH (voice-over): Steven Durels runs the leasing at SL Green, New York City's largest commercial landlord. With more than 30 million square

feet of space to rent, the collapsing demand for office space means their tenant vacancy rate shot up from 3 percent pre-pandemic to 10 percent

today. That calls for some creativity.

AMANDA WEISENTHAL, HEAD OF SALES AND PRODUCTION, BACKLOT: You can build a set in here. You can have a fight scene in here.

YURKEVICH: SL Green is now working with Backlot, a company that connects landlords at 332 buildings across New York and New Jersey, with film and TV



YURKEVICH (voice-over): This episode of "Law & Order" was filmed in this vacant office in midtown Manhattan. "The Watcher" on Netflix, in these east

side offices.

WEISENTHAL: I think people are starting to look holistically at how they can support a revenue stream.

YURKEVICH: This year SL Green says it will earn $3 million from film and TV shoots.

DURELS: It's really helped mitigate the loss of income during the down time periods.

YURKEVICH: Empty office buildings could be turned into residential, a big need. This project in Washington, D.C., once an office building, is being

turned into apartments. But that's not an easy, quick fix process. Less than 1 percent of apartments nationwide are converted from commercial


And across the river in Arlington, Virginia, the city is trying to get ahead of its empty office space problem at 22 percent.

RYAN TOUHILL, DIRECTOR, ARLINGTON ECONOMIC DEVELOPMENT: I'm sitting right today in Northeastern's D.C. campus. Last year, university was not allowed

to take up space in an office building.

YURKEVICH (voice-over): Thanks to new city zoning laws, that's now possible, along with seven new types of commercial businesses, like animal

boarding, hydroponic farms and pickleball. It's already happening in south Jersey. This 22,000 square foot pickleball facility was a vacant Burlington

Coat Factory in a strip mall. Regional mall vacancy is at a record high.

YURKEVICH: Were there a lot of options like this on the market?

ANDREW PESSANO, CO-OWNER, PROSHOT PICKLEBALL: Yes, I think we had more opportunity than we thought there would be in the market.

YURKEVICH: Pickleball is the fastest growing sport in America. So does that mean that the sport needs to find places to play quickly?

PESSANO: The greatest threat to the growth of pickleball is the lack of facilities.


QUEST: They are.

This is QUEST MEANS BUSINESS. At the top of the, hour the closing bell. That is only after you have enjoyed the "World of Wonder."





QUEST (voice-over): OK, so you know I love a good market. Every bit of brick and racket and bustle in. Ho, ho, ho, look at this.

I think I could be here all day.

In the suburbs of Budapest, I discover something I could only describe as a truly local experience. Everywhere you look, there is the possibility of

buying a bit of crap that you're going to wonder why you bought it in three months' time.

Oh, look at that. He bought a clock without any hands on it.

This is the (INAUDIBLE) flea market, an institution. It opens at 6:00 am just in case you can't sleep at the thought of the bargains waiting.

Who buys all this?

UNIDENTIFIED MALE: (Speaking foreign language).



QUEST (voice-over): Oh, ho, ho, an old typewriter. I used to work on one of those.

It is providing a snapshot into the city's personality and its history.

Look at that. Oh, it has scratches on.

"It's Sergeant Pepper's Lonely Hearts Club Band."

But I'm just thinking you could frame that on the wall, on its own. If you come from Liverpool, The Beatles is like a religion.

Welcome to Hungary.

There is an art to shopping here, of course. The secret is in the bargaining.

Mmm. Ho, ho, ho.

So there, 20,000?



QUEST (voice-over): You gave me the wrong price. I just offered more --

I just offered her more than she is actually asking.

I will try that again.

Nine thousand.


QUEST (voice-over): Oh, I love this. This has made my day. How I'm going to get it home I have no idea.


QUEST (voice-over): Budapest is known for many things amongst travelers. Its picturesque, fairytale views; the ornate houses of parliament, holding

court along the Danube.

Less known is a particular Hungarian passion that's more than a century old.


QUEST (voice-over): This is button football, also called sector ball. This is a game with a cult following of grown men. Imre Horvath is a legend.

He's been playing for 52 years. I am his newest student.

Push, push, push.


QUEST (voice-over): (INAUDIBLE).

I have absolutely no idea.

And you sort of ...

HORVATH (voice-over): Good.

QUEST (voice-over): But, you have to hit the ball?

HORVATH (voice-over): (INAUDIBLE).


QUEST (voice-over): Ask any Hungarian and they will tell you they invented the game in the early 1900s. Kids flicked coat buttons around a table top,

simulating football.

HORVATH (from captions): That was a handball.

QUEST (voice-over): Listen, everybody is an expert. Everybody is an expert.


QUEST (voice-over): This is not going to go well.

HORVATH (voice-over): You're on the wrong side.


QUEST (voice-over): In short, I am no good. It is best left to the experts.

These guys grew up playing it with their fathers and grandfathers. In Communist times, Imre says, the government wouldn't let them form an

official association. So they found ways to come together and play.

QUEST (voice-over): I see he is changing his thinking.

HORVATH (voice-over): That's because (INAUDIBLE).

QUEST (voice-over): But is he allowed to put you off?


QUEST (voice-over): You know?


QUEST (voice-over): You see how my mind works?

Don't make light of button football.

He's going for a goal?

UNIDENTIFIED MALE (voice-over): Yes.

QUEST (voice-over): Oy!

Today there are dozens of clubs in Hungary and an international federation, of which Imre is the president. And Imre is determined that he will keep

this tradition alive.


QUEST (voice-over): Yes!

I am starting to get a sense of what it means to be Hungarian.




QUEST (voice-over): Time to take the tram.

I have no idea where this tram is going.


QUEST (voice-over): I guess it doesn't matter. We are already here.

The Budapest, on the Danube, is really framed by the castle, the citadel, the church; of course, parliament. And when the sun shines, like now, it is

picture perfect. And it becomes a big meeting point for this part of Europe.


QUEST (voice-over): That's what you'll want.

There is a real ease with which people throw themselves into the day.

I'll race you, ha-ha.

And there are true gems to discover along a very ordinary city block, behind this unassuming door, there is a temple to misspent youth.

Wow, (INAUDIBLE), look at them.

Machine after machine, era after era. This was the very last thing I was expecting, a pinball museum.

How many?


QUEST (voice-over): 163.

PATAKI (voice-over): You have to follow the blinking lights.

QUEST (voice-over): That is Mark (ph), the lover of all things pinball.

PATAKI (voice-over): This is the newest one in the collection.

QUEST (voice-over): These are all the different movies. Oh, ho, ho, I love it.

PATAKI (voice-over): Yes.

QUEST (voice-over): These machines are bringing back wonderful memories of too many hours spent playing when I should've been studying.


PATAKI: You know, my heart is pounding.

QUEST (voice-over): To Mark (ph), the machines and more than a game. They represent an ideal with which he grew up.

PATAKI (voice-over): For some reason the state imported these machines in large numbers into Hungary. Basically these machines meant the Western


It is the freedom and belonging.

QUEST (voice-over): Oh, (INAUDIBLE). No!

Within seconds, I am the Pinball Wizard.


Ha, ha!

Before there were fancy LEDs and movie themes, there was this.

PATAKI (voice-over): From 1947.

QUEST (voice-over): This is the first.

PATAKI (voice-over): This is the first with the flipper arms, yes.

QUEST (voice-over): OK.

So the thing to note about this thing is the flippers go in the opposite direction and you are in trouble before you realize it.

PATAKI (voice-over): Yes.

It is about tasting history.

QUEST (voice-over): You're right.


QUEST (voice-over): It is not satisfying to play.

PATAKI (voice-over): But it's history.

QUEST (voice-over): It's history.

Easily one of the city's hidden gems.

I think I need a few more dozen hours here.


QUEST (voice-over): If pinball is the food of fun, then now I need the real thing. It would be irresponsible, bordering on negligence, if I didn't try

more Hungarian goulash.

ZSOFIA MAUTNER, FOOD WRITER AND AUTHOR (voice-over): If you think of a goulash, what kind of a dish do you have in mind?

QUEST (voice-over): I think of a big sort of wintry type stew with meat, potatoes, vegetables -- goulash.

MAUTNER (voice-over): For us, it's a soup, it is liquid.


QUEST (voice-over): I thought goulash was a stew. It is more complicated.

MAUTNER (voice-over): We have basically three different dishes which are similar to goulash. Number one would be a stew called porkolt.


MAUTNER (voice-over): You can actually put the onions. So the amount of onions is really important because --

QUEST (voice-over): -- Now she tells me.

Where does all this goulash come from?

MAUTNER (voice-over): We have of the man who was taking care of the animals. The stew was only cooked by them. So that is where the word comes


QUEST (voice-over): Here, the meat is not the star.

MAUTNER (voice-over): Paprika is the signature spice of Hungarian cooking.

QUEST (voice-over): Hungarians don't believe in doing things lightly. No skimping.

MAUTNER (voice-over): Go ahead, more. More. And more.

QUEST (voice-over): I have learned the most important thing for when I make this -- where the (INAUDIBLE) when you need it.

MAUTNER (voice-over): There are really two secrets for good goulash. For chicken is (ph) still one of the ingredients you add and then the

ingredients that you don't happened.

Are you ready for ... ?

QUEST (voice-over): (INAUDIBLE).


MAUTNER (voice-over): Try to get a lot of sauce.

QUEST (voice-over): Mmm! Rather good.

That is actually delicious.

MAUTNER (voice-over): Thank you so much.


QUEST (voice-over): Even walking up these bloody hills I can't remember if I am in Buda or Pest.

Ah, much better.

Ah. That is a view and a half.

It has been a wonderful visit to Budapest, a city that is so picturesque in a country that has suffered so much. And as for the word that best

describes it all, I think it is steadfast. For here, they have been steadfast in their traditions and determination.

And you will want to come here and experience all this for yourself, steadfast Budapest, part of our "World of Wonder."




QUEST: Hello, I'm Richard Quest. Together, we will have a dash to the closing bell, seconds away. Look at how the Dow has been moving over the

course of the session, it's been up all throughout the day and the gains -- we're not at the best of the day but we are strongly up, nearly over 0.5

percent, 211 points.

That is the way the markets are looking tonight. It is the first Dow winning session since June 15th and the triple stack is also higher with

the best coming from the Nasdaq. That's the way that the markets are looking at the moment. We have "THE LEAD" coming up next.