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Quest Means Business
Mongolia Carves New Economic Path; Ukraine: Russian Attacks Hit Warehouse And Granaries Overnight; Former Finnish Prime Minister Stubb Running For President; Mining In Mongolia; Top Investor Bets On Wall Street Downturn; U.S. Increases Foreign Investment In Mongolia. Aired 3-4p ET
Aired August 16, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: The things we do for love and QUEST MEANS BUSINESS. It's three o'clock in the morning here in Mongolia. And it
is my first time in the country, a frontier economy that is sandwiched between two giants -- the bear and the dragon.
We'll talk about all of that 3:00 AM here, 3:00 PM in New York, the previous day. The markets have still got some time to trade, the last hour
of trading. This is the way things are looking on Wall Street at the moment, betwixt and between, as I always say, when we see these sorts of
session, really not a huge amount is actually moving, so we will move to our agenda of the day.
The EV revolution. Global copper demand is climbing, and so naturally, I visit one of the world's largest copper mines. Mongolia's ambitious
expansion plans. It's a mile underground.
Another big short: The investor who called the 2008 housing crash is now betting against the US markets, a $1.6 billion bet. We'll talk about it.
And the best way to see Mongolia, well, it is on horseback. We get a taste of the culture, and I do stay on the horse, I promise you.
Live from Ulaanbaatar, it is Wednesday, it is August 16th. I'm Richard Quest in Mongolia, where I most certainly mean business.
QUEST: A very good evening to you and a warm welcome.
I'm going to say it the first time and I'll probably say it a different way later, Ulaanbaatar, which was the capital here in Mongolia, but some people
call it Ulaanbaatar and Ulaanbaatar. So you will hear all the pronunciations over the next three days that we are broadcasting from here.
It is the first night of three programs and we're delighted to be here in Mongolia, my first time to this country.
It is a vast country in East Asia, truly huge. If you look at it, it's supposedly it's sort of like two-thirds of Europe, and it really doesn't
tell the picture because the complicated geopolitical landscape to the north is of course, Russia; to the south is China and you will notice on
the left hand side, the Far West and the Far East.
There isn't even a sliver between Kazakhstan and Mongolia, so it truly is, no disrespect intended, the sandwich, the meat in the sandwich between
Russia and China.
I'm joining you tonight, we hope to be outside with a view of Ulaanbaatar behind me, but I'm joining you tonight from the splendid lobby of the
Shangri La Hotel, which has been our -- where we've been staying, and that's why. Storms outside, true storms, I mean, the whole thing just
turned into floods.
So hopefully tomorrow night, things will be a bit drier and we will be able to be outside and showing you things, otherwise I'm afraid it is all,
rather delightful, at least it's warm.
Eight hundred years ago, Mongolia was home to the world's greatest empire. The speed, the size -- it was all most remarkable.
So now, in this new world order at this extremely difficult geopolitical time, Mongolia, as I showed you from the map, with its unique positioning
between the two, between the bear and the dragon is facing some trying times.
QUEST (voice over): Plains without end, powering dunes of the desert. Once I see the Mongolian steppe firsthand, I understand why they call this the
Land of the Eternal Blue Sky.
This is the most sparsely populated sovereign country in the world. Once home to one of the largest empires in the history of humanity.
At its height, the Mongol Empire stretched from the Pacific Ocean to the Persian Gulf.
QUEST (on camera): There's a giant statue of Genghis Khan that looks over the Main Square. Now, the empire that he put together not only was it one
of the largest ever, it was also done in record time.
It took him 25 years to put together an empire, the size of which it took the Romans 400 years to do.
QUEST (voice over): The trading route known as the Silk Road started around this time, and it continues to influence the global economy today.
Mongolia's immense mineral wealth, an underground bounty of copper and gold is luring in foreign investors.
QUEST (on camera): Nearly a mile underground at Rio's Mine in the Gobi Desert, and in some ways, it's quite difficult to connect this basic mining
operation with the energy transition, until you realize this is what it's all about.
This is the original ore. It has copper, gold, and silver within it, but it is the copper that today is the most valuable commodity, because it is the
copper that everybody wants.
QUEST (voice over): Geopolitics proves a delicate tightrope with a small democracy. It is sandwiched between Russia and China, and it is also trying
to entice investment from Western allies. And last year, a corruption scandal over coal exports led to mass protests across the capital,
Ulaanbaatar. Inflation, a bogeyman of economies globally, is more than 10 percent.
And yet, underneath it all, there are resources of minerals and humanity that promise such a great future.
QUEST (on camera); The old and the new.
Mongolia truly is a place of opportunity, not only because of the resources underground, the metals, the ores and the like; but also because of the
human capital that is here. Two-thirds of the population are under 30.
So with the right policies on education, investment, and future direction, and provided they manage to convince them not to leave the country, but to
stay here and invest in Mongolia, it is all there for the future.
QUEST: And that square just a couple of hundred feet from where I'm standing now. The growth rate in Mongolia is expected to accelerate this
year, even though the economy has had some rather difficult times particularly for example, if you look at the balance of payments and the
The World Bank says 5.2 percent, but however, the GDP per capita has tripled since democracy arrived in 1991. Vastly reducing poverty of the
growth is often an even and the World Bank is warning that the country needs stronger institutional governance and stronger governance
Norihiko Kato is the CEO of Golomt Bank. It's one of the biggest banks here in Mongolia. I have to say, sir, first of all, thank you for turning up at
this ungodly hour and joining us. Very grateful for you.
NORIHIKO KATO, CEO, GOLOMT BANK: Thank you, Richard. Welcome to Mongolia.
QUEST: The vast majority of the economy here is the resource economy. Is that sustainable? Would you like to see a more diversified economy if that
KATO: Now, of course, the diversification of the economy is desired in the medium to long term, I think. But our resource, mineral resources is so
rich and the size of the country, only 3.3 million population. We have a great -- still big, big potential for growth for the next mid to long term
in our resources.
QUEST: And if we look at, for example at the mining, when you talk about fifty, sixty, a hundred years' worth of mining reserves. So what's the --
what's the big problem? What's the worry? Is it the geopolitical risk?
KATO: Yes, our economy is so much dependent on the China now. Eighty percent of our exports go to China, and most of them are minerals and coals
and coppers. And so, the one reliance on this one area is a potential risk geopolitically. Yes.
QUEST: You see the thing about China and that geopolitical risk of which we'll talk a great deal more over the next few days. I think about that is
the reality is China doesn't want to shoot itself in the foot.
So hurt Mongolia and you hurt China.
But China could easily do some damage to this economy.
KATO: Possible. Actually, but China needs resources, minerals resources, also maybe in the future, agricultural or food resources. So we are
geopolitically in a challenged position, but we are neighbor. We have some advantage to trade well with them potentially, and it may be beneficial for
each other if we control well.
QUEST: The market, you're listed on the market here. All the banks -- all the major banks are. The market also wants to grow and it also wants to
diversify, and we'll be talking to the stock exchange head in his program.
But Is that realistic, do you think? Is there the opportunity for this economy to grow into a sort of a fully-fledged market capitalist economy
with a bigger stock market?
KATO: Well, with the size of the economy, if you consider that maybe it takes time to have some more like desire for a more diversified economic
situation, so relying on the minerals export, we develop the economy further, and the service sector, certainly growing, but the market itself,
it continues to be small.
QUEST: So many things that I am really looking to talk to you about, but particularly, for example. I know they're not called capital controls, and
they're not called exchange controls. There are bank limitations on the amount of dollars that I can take out as an ordinary person. What is it
KATO: Well, as of now, there's no restrictions now. Now, we get rid of the little bit difficult --
QUEST: The $300.00?
QUEST: Three hundred dollars. Yes.
KATO: Yes. It used to be and sometimes, when the foreign reserve is tight, the time the Mongolian banks needed to restrict the amount of dollars to
provide to the customers, that's what happened.
But when the trade goes, well, we have enough foreign reserve increase, and currently, those restrictions are now lifted.
QUEST: They are lifted. You're optimistic about the country.
KATO: Well, as far as this is a small country dependent on the trade, as far as we maintain that healthy trading environment, I think this is okay
that we can control it.
QUEST: I'm very grateful, sir. Thank you for coming and joining us. I appreciate your time tonight at 3:00 AM. Very grateful indeed.
KATO: Thank you very much, Richard.
QUEST: Thank you.
Now to get a glimpse of Mongolia's future I need to go quite a considerable distance from the capital, nearly 750 kilometers to the Oyu Tolgoi Mine, I
knew I'd get that wrong the first time.
Here, they mined for copper, and it is not just mining, it's mining on a vast scale. The copper that they produce goes to China. It is then used for
wiring and automobiles, and demand is exploding as EVs take off.
EVs use twice, as you can see, there is a regular car, there is a hybrid, and there's an electric -- as twice as much copper and EVs are a growing
part of the market more than 10 million sold last year.
Now the mine nowadays is jointly owned, 66 percent or so by Rio Tinto. The rest is owned by the Mongolian government. I went there to find out and
that involved going deep underground.
DEIRDRE LINGENFELDER, CEO, OYU TOLGOI: So that's the way to the cage.
LINGENFELDER: Yes, we walk through here.
QUEST: There is a lot of sort of drama about it, isn't there?
How far down are we going?
LINGENFELDER: One thousand three hundred meters, 1.3 kilometers.
QUEST: And this is where it all gets sort of real, real, isn't it?
LINGENFELDER: This --
QUEST: Because --
LINGENFELDER: This is where we put our tags on the board.
QUEST: Okay. Here are all the people who are underground at the moment.
LINGENFELDER: These are all the people that are underground at the moment. So these numbers that are on these cards are linked with your cap lamp and
there is a personal sort of detection little device in here, so the team on the surface knows wherever you are underground at any point in time.
QUEST: It must be the most enormous sort of wireless network down there.
LINGENFELDER: It's an incredible wireless network. The amount of data points that the team deals with every day is just phenomenal.
QUEST: There it is.
LINGENFELDER: That's the gateway to where it's all going underground.
QUEST: All right. All aboard.
I thought there would be lights in it.
LINGENFELDER: Well, that's why you've got one over there.
QUEST: I know, But everything else is so normal around it. I thought, oh, they have lights at benches or something.
LINGENFELDER: And a cup of coffee.
QUEST: We're here.
LINGENFELDER: We have arrived.
QUEST: All right, we're down.
LINGENFELDER: Let's go.
QUEST: Oh my God. Wow.
LINGENFELDER: What did you expect?
QUEST: I said, no, I didn't expect this. This is the first time I've actually been in a real underground mine and this is not just any old mine,
this is a biggie. Look at the size of this thing.
One, two, three, four. there's room for 10 mini buses.
Now, what's interesting is when the light does go, you realize how dark it is. All the main thoroughfares down here are well lit.
So this is the famous draw bell.
LINGENFELDER: This is a draw bell with two draw points. So this is one draw point, there'll be another one on the other side. So there'll be a passage
like this on the opposite end.
QUEST: Where does the explosion take place?
LINGENFELDER: To make the cavity. There'll be explosions. So you won't see it clearly today, but eight rings are fired.
QUEST: Eight rings is behind that?
LINGENFELDER: Yes. If you look at it, you can sort of see it, right? You could see sort of a ring and that is fired to create the draw bell, and the
bell is sort of a cone shape. And from the bell, the ore pours down her. This is where the loaders -- the underground loaders will pick up the ore.
QUEST: So where is this all coming from and going to?
LINGENFELDER: So when the road train deposits that or in here. It goes through the pressure, which reduces the size down. And then from here, it
goes onto the conveyor to the surface, to the ore stockpile. So this is the end of the process on the ground.
QUEST: It looks like a toy or a film or something, but do you think of the weight of --
LINGENFELDER: Eight tons.
QUEST: This is actually what this is all about, is that right?
LINGENFELDER: This is exactly what it's about.
QUEST: I better put it back. Well, that's your profit.
LINGENFELDER: I think you should put it back.
QUEST: They weren't going to let me take it. Well, that's the profit, I suppose.
To see all that copper ore just tip out, the noise and it was mostly extraordinary, you're going to hear later in the program from the CEO
again, and a few more different issues about where the mine is going and things like that.
As we continue tonight on QUEST MEANS BUSINESS, the first cargo ship has left the Port of Odesa, since the ending of the Grain Deal. We will have a
report of that. It has, of course, the risk from Russia. And staying with Russia, but here in Mongolia, I mean, the stunning scenery, and the beauty
of the landscape is really quite remarkable. It is going to be our treat and pleasure to share you some of this spectacular landscape because after
all, QUEST MEANS Mongolia.
QUEST: Welcome back. QUEST MEANS BUSINESS from Ulaanbaatar.
The first ship has left the Port of Odesa since the end of the Russia deal that Turkey had put together. The ship has left even though Russia is still
saying of course, it shouldn't take place.
It is a Hong Kong flagged Joseph Schulte, and it contains a ship bound for Turkey. It's been in port since the invasion. Now Russia has threatened
shipping. It struck the grain warehouses overnight. It boarded a bulk carrier on Sunday, and it has fired shots across the boughs.
And of course, there are enormous insurance implications, besides, of course, more serious loss of life. But clearly, many carriers will just
simply say we're not insured to have this sort of risk.
With me is Alex Stubb, the former prime minister of Finland, who, incidentally Alex is looking to join -- to jump back into politics,
announcing he is running to be president of Finland. He joins me from Helsinki.
Now, Alex, we'll come to your political ambitions in just one second. The issue of the grain, I mean, getting a Grain Deal back on track has to be a
ALEXANDER STUBB, FORMER PRIME MINISTER OF FINLAND: It sure is. I think it shows quite evidently that everything in today's world can be weaponized,
and Putin and Russia have once again, weaponized in this particular case, grain, basically trying to create the illusion as if this was the fault of
the rest of the world when it is actually Russia's fault.
I think it's a very serious game, because you're basically playing with the nutrition of other human beings as an instrument of war.
QUEST: You are well familiar with, obviously, from Finland, the relationship that you have to have with, say, Russia, and the difficulties.
And you're also familiar with the situation from when you've been here in Mongolia, caught between Russia and Finland -- sorry, Russia and China. The
reality is, there's no answer. It's a geopolitical mess.
STUBB: Well, obviously, the situation in both countries is geopolitically quite sensitive. For us, I can only speak for us as such, I think the
situation is actually right now very stable, because we obviously have an independent and large Armed Force, and on top of that, we are NATO members,
and Russia at the moment is actually quite busy on the Ukrainian front. The situation in Mongolia, I would assume, is different.
When I was in Mongolia for the first time, I was a minister of Trade, and we were doing actually some export promotion. I was very much in the mining
industry, so I can sympathize at the hoops that you're moving in.
QUEST: And, Alex, why do you want to be president of Finland? I mean, you've given us a brief resume there. You've done trade, you've done
foreign, you've been the PM. You're now enjoying or you have been enjoying a life of academia. Why jump back into the pit?
STUBB: Yes, I mean, sure, I was in government for eight years and felt very privileged to have served and the plan was never really to come back and I
did leave seven years ago.
But to be very honest, I think Putin and Russia's attack on Ukraine changed my personal mindset. I felt very strongly that Finland was under a threat
and we're now looking at a world of disorder and that disorder I hope that some of my foreign policy expertise and my connections and networks could
come in handy, but of course, this presidential race as you know, they're a long haul.
We're five, six months away from the election, so we'll see how things develop, but I felt that I sort of had the duty to do this for the country
and I hope that by, I will say good connections to the United States, to Europe to many other capitals around the world and my expertise could be of
use in this particular situation.
QUEST: The role of president in Finland has certain very distinct duties and responsibilities, and they are different, if you will, to the political
hurly and burly of being prime minister. You will have to be the great and the good, rather than the down and the dirty.
STUBB: Yes, definitely. There's a big difference, probably, for the audience that doesn't follow Finnish politics very closely, the prime
minister is in charge together with his or her government of European policy and domestic policy and the predicament of the president of the
Republic is to deal with foreign policy, albeit together with the government.
So the role in many ways is very different. So you can basically say right now, we have a prime minister that deals with the EU and a president who
deals with NATO.
So it's very much about foreign and security policy, and he is also actually the ultimate commander-in-chief of the Armed Forces. So there's
very much a foreign policy and security dimension in what the president does, and it does make the job quite different.
So it's nothing like you would have in the US nor in France, it is sort of a hybrid.
QUEST: Alex, thank you. You've always been a good friend of this program. We will watch this election closely. And of course we will, as you would
expect from CNN, we will also be talking to your opponent as we get closer to the date.
Alex Stubb joining me from Helsinki.
Just look, we're taking you're truly around the world from Helsinki to Mongolia, New York, and now we're going to Morocco where later this year,
they will be hosting the IMF's annual meetings.
The managing director is calling it a crucial time for Morocco, as it prepares and global trade is very much in focus.
Eleni Giokos spoke to Kristalina Georgieva as the IMF prepares to be in Morocco.
ELENI GIOKOS, CNN INTERNATIONAL HOST: So I've got a very important question. You have plans to host the annual meetings in October in
Marrakech, it's the first time in 50 years in Africa, first time in 20 years in the Middle East, so why has it taken you so long to come back?
KRISTALINA GEORGIEVA, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: I'm so glad we are coming back and I cannot praise enough Morocco as the host
for the annual meetings. Morocco, is a crossroad between Africa, the Middle East, Europe, not only of goods, but also of ideas.
It is a country with very rich history, culture, traditions, and very dynamic economy. So when we go to Marrakech, that spirit of youthful,
dynamic country is going to penetrate across the meetings.
GIOKOS: You're bringing together different worlds, right, and that's the aim. I was looking at the economic vulnerabilities on the continent and
according to the IMF report, I mean, the inflation levels and the public debt that we're seeing in Africa has not been seen in many decades.
Does this worry you in terms of the trajectory and what you're going to try and achieve during your annual meetings?
GEORGIEVA: Of course, we are very concerned about the financial squeeze on low income countries. It comes from the fiscal space evaporating as a
result of the impact of COVID. It comes from high level of debt, and also high interest rates that make -- that service summer expenses.
We go to Morocco, our most important short-term priority globally is to bring inflation down so we can see interest rates going down. And why is
that so critical? Growth needs to pick up.
GIOKOS: With regard to the continental free trade area, are you feeling optimistic that Africa can pull this off?
GEORGIEVA: Well, where there is some movement and there is also advancement in regional context. In other words, the continent also has its own
regional agreements and there, we see more traction where there is strong leadership.
Eleni, it always boils down to this: When there is will, there is way.
Why am I optimistic about Africa? Because of Mandela. Impossible until it is done.
Fantastic continent; smart, dynamic people. They are those that would define so much this century and I wish everybody on the continent all the
success and yes, move the will to make the way.
QUEST: Move the will to make the way says the IMF MD. What about if you move the earth to make the mine?
Earlier, I went down the Oyu Tolgoi, yes got it right, the Oyu Tolgoi mine. After the break, you'll meet the woman who's running it. The CEO of the Oyu
(BEGIN VIDEO CLIP)
LINGENFELDER: I haven't seen anything like it either, Richard, and I've been in this business for a really long period of time.
(END VIDEO CLIP)
QUEST: Welcome back to Ulaanbaatar for Quest Means Mongolia. And we revisit the Oyu Tolgoi mine. Once I have it in my head, I can keep saying it
forever. The mine is simply vast and its production of copper, gold and silver -- although primarily copper is what it is all about.
They're ramping up for maximum production, which could be over 0.5 million tons a year. Six million is the upper level. It'll make enough for around 6
million electrical vehicles annually. Deirdre Lingenfelder is the mine's chief executive who we spoke to earlier.
QUEST: Once we got out of our underground attire, we discussed the necessity of these mines and the environmental impact and what can be done.
LINGENFELDER: I haven't seen anything like it either. Richard, I've been in this business for a really long period of time. So the old body is the size
of Manhattan. If you go down in the shaft, it is a mile or 1.3 kilometers deep, there are 200 kilometers of roadway underground.
QUEST: And the number of people that you have here is staggering. But also, interestingly, there are locals. You have not imported a workforce.
LINGENFELDER: This mine was built with a largely Mongolian workforce, 97 percent Mongolian. We only employ expats if they bring a particular skill
set that we can't source locally.
And over time we have been ramping up the number of Mongolian roles. We're actually losing them at the moment because they're becoming incredible
mining professionals, so they're going to other mining operations across the globe.
QUEST: Your mining ore for copper primarily, more than the gold or silver that might be in there, that's correct?
LINGENFELDER: That's exactly right. We're mining copper. There's gold and silver but this is a copper business.
QUEST: And copper is much in demand at the moment.
LINGENFELDER: Because we're trying to electrify the world. So copper is in demand at the moment. But it will be even more in demand over the next
decade. So for us to build electric vehicles -- it's takes about 100 kilograms of copper. Winter garney (ph) is about 1.2 tons of copper.
QUEST: I thought all of this copper was going into the batteries but we need them for EV batteries.
But you're putting me right on that?
LINGENFELDER: Yes, we need it for the wiring in electric vehicles. It's needed within the winter vines (ph) as well. So batteries largely need
QUEST: A little bit old-fashioned in a sense.
Was it not the same with the old telephone?
The last mile was always the copper line and the GPO for the post office.
LINGENFELDER: If you look at the periodic table, it's a great conductor, was and always will be.
QUEST: Now China takes all of your output and provides all your power.
Is that a dangerous position for the mine and for Rio Tinto, which is the majority owner?
LINGENFELDER: Let's put it in context. All our copper does go to -- China copper concentrate goes to China but we make about 2 percent of the Chinese
market. So it's not the biggest percentage of the Chinese market. And that will steadily increase as we produce more copper.
The trick is in beneficiating (ph). So looking at can we add value to the copper we produce. So Rio Tinto, the government of Mongolia is actively
talking about beneficiation (ph) or industrialization, as it is referred to within Mongolia.
And we can add value adding products with less cathode (ph) or potentially even other minerals beyond the copper that is currently produced by Oyu
QUEST: But you would not look at smelting the stuff yourself?
LINGENFELDER: Well, that needs to be determined. I think the business case really needs to be carefully evaluated and whether Oyu Tolgoi is the best
place to do it.
QUEST: The economic relationship between Rio Tinto and the government of Mongolia, in the past, it's been difficult. Let's be diplomatic about it.
But the agreement of forgive the debt and the agreement on taxes, has it changed the environment?
LINGENFELDER: I believe it has. I've only been in this role for 16 months but I have been working very actively with Oyu Tolgoi for six years. And I
have seen how their relationship has matured. I have seen how trust has been built.
I've seen how we have improved transparency from both sides. So I do think that there's definitely been an improvement in the relationship. So it's
like any relationship. It's never just a walk in the park. It takes effort and dedication and, in partnership, we have proven that we can do more
together than separately.
QUEST: Do you worry sometimes that -- these are my words, not yours -- the controversial nature of mining becomes a political football in Mongolia and
you are the biggest football to be kicked?
LINGENFELDER: Well, look, it's a fact that Oyu Tolgoi represents the most foreign direct investment in our country but I think with that comes a lot
of advantages, not just for our shareholders, which is both Rio Tinto and the government of Mongolia.
So I think that in itself presents a win-win situation for both parties that I do think can circumvent the use of Oyu Tolgoi as a political
LINGENFELDER: And both parties working together to do what is best for the business, because if that is done, the benefits will come to the country.
QUEST: The environmentalists say this is all very nice and the move to energy transition is good. It's not going fast enough.
But do we really need these vast mines?
You consume huge amounts of energy, you produce large amounts of waste.
Is it worth it?
LINGENFELDER: So, no. But without copper, we can't electrify the world. When I look at Oyu Tolgoi and what you experienced today going underground,
the footprint of the underground blockade is very small compared to surface operations.
I think also what we saw in the first quartile in terms of water performance, and I'm not saying it's good enough but it's a pretty decent
start. So I think that it's always a balancing act. We're always looking to find better ways to manage the footprint.
QUEST: When you go down the mine, do you still enjoy it?
LINGENFELDER: I love it. I love it. I get my energy from coming to the site, not just going down the mine but speaking to the front line men and
women that drive this business.
QUEST: It really is quite an achievement the way that mine is built, operated, the whole works.
When we come back after the break, the man who gave us the original "Big Short" now says, he's putting his money where his mouth is, $1.6 billion,
that the market is going to fall. I didn't say crash, going to fall. QUEST MEANS BUSINESS.
QUEST: We spend a lot of time on QUEST MEANS BUSINESS trying to work out where the market might go in the short to medium term. Longer term, of
course, investors believe it will always rise.
Michael Burry, the man behind "The Big Short," believes the market is going to fall and he's put $1.6 billion of his money behind it in terms of
shorting the S&P and the Nasdaq. It's more than 90 percent of his portfolio. Matt Egan is in New York.
We don't really know the size of the fall that he is expecting. But this is a very sizeable, if you will, pessimistic bet from a man who has a
curriculum vitae of being right on market direction.
MATT EGAN, CNN BUSINESS SENIOR WRITER: Absolutely, Richard. I mean, when Michael Burry places big bets, investors listen. This guy earned legendary
status from betting against the housing bubble in the mid 2000s.
He raked in hundreds of millions of dollars for himself and his hedge fund. He was immortalized in the movie, "The Big Short." he was even played by
Batman or -- at least "Batman" actor Christian Bale.
But a few words of caution here, Richard. First of all, to your point, we don't know the magnitude of the market drop that Michael Burry sees; we
just know that he sees a decline coming. We don't know when exactly he thinks that this is going to happen.
Also, he's not completely bare. He still owns some stock, including that of our parent company, Warner Bros. Discovery. Also, it is worth noting that
even though Michael Burry is a bit of a legend, he is not always right.
Back in January, he said that inflation would get worse; it didn't. He also said the U.S. economy was in a recession and it is not. Richard.
QUEST: We will watch, we will note. And Matt Egan, we will discuss further, as it proceeds. Thank you, sir. I am grateful.
Rare Earth metals attract huge investments and Mongolia has plenty of those along with everything else. Trying to make the most of it, the executive
director of the American Chamber of Commerce of Mongolia is with me.
We'll be talking to you sir, immediately after the break. Thank you.
QUEST (voice-over): This is just one section, one small section that we've been able to of the country, a huge country, vast resources.
QUEST: The Mongolian geopolitical strategy not only has Russia and China but it has what is known as the third neighbor: strategy. That includes the
United States. The -- Mongolia is keen to partner further with the United States on a range of issues, including rare Earth minerals.
The prime minister of Mongolia was in Washington last month, where he met the U.S. vice president, Kamala Harris. And foreign direct investment has
risen steadily since the 2016 economic crisis.
QUEST: For instance, they are also looking forward to open skies, which could eventually bring direct flights between Ulaanbaatar and the United
States. With me is Adiya Oyungerel, the executive director of the American Chamber of Commerce.
This third neighbor strategy includes -- obviously, it includes Japan and South Korea.
But the United States is the core of it, isn't it?
This idea of a strong military and economic relationship.
ADIYA OYUNGEREL, EXECUTIVE DIRECTOR, AMERICAN CHAMBER OF COMMERCE: Indeed Mongolia has in place what is called (INAUDIBLE) neighbor policy and the
U.S. is a core bring together the military peacekeeping (INAUDIBLE) high on U.S. support and I think it's -- Mongolia can offer to the U.S. that we
have this unique positions in the whole -- in the Pacific region surrounded by Russia and China.
So we have this, quite a unique (INAUDIBLE) where we --
QUEST: That reality of being sandwiched between the two, does that -- how much is the U.S. being looked at as a lifeboat in the event of real
OYUNGEREL: I think the U.S. would be the critical stakeholder and partner for it because, with the country looking for (INAUDIBLE) neighbors that
have been offering the -- we are looking for investment, we are looking for the businesses that will come to Mongolia and will counter balance (ph)
this whole kind of dependency on these two (INAUDIBLE) neighbor.
QUEST: You have got lots of companies who are already here, resource mining, the various contractors.
But what areas can the U.S. increase investment?
What industries do you think can be attracted here that will diversify that interest?
OYUNGEREL: Exactly. So if we put aside mining, we could offer renewable energy. I think that is one, now where the world is moving toward this
energy transition. I think Mongolia can offer it renewable energy.
We have so much sun, wind. (INAUDIBLE) really just the sector where the U.S. can be, can leverage and come to with investments with the technology
and knowhow to really come to the country and be their partner.
QUEST: There is an entire range of MOUs. The elevation of the relationship is strategic, a strategic partnership.
What does that mean in reality?
OYUNGEREL: It is, I would say, putting a kind of political statement, I would say the strategic partnerships really help Mongolia to be -- have
this kind of umbrella where you can negotiate with as -- without immediate neighbors and also approach other (INAUDIBLE) neighbor, the E.U., Japan is
saying we have the strategic partnership with the U.S.
So we're open to have a more cooperation. But probably it will take a long way to have really concrete results.
QUEST: There will be an election here next year. The democracy is 30 years old. It is thriving quite well, considering the external pressures. When
you look at everything concerned, it is actually doing remarkably well.
OYUNGEREL: Absolutely. Mongolia is such a young democracy, over 30 years. But (INAUDIBLE) really shift toward democracy, free enterprise and free
market. And I think (INAUDIBLE) Mongolia is the only democracy in this whole region.
QUEST: Quick question.
Do you ride horses?
OYUNGEREL: Not that much, honestly.
QUEST: But you have ridden a horse?
OYUNGEREL: Oh, yes.
QUEST: Because every Mongolian rides a horse.
OYUNGEREL: Yes, yes, yes --
QUEST: And you probably rode -- started riding at a very early age.
OYUNGEREL: When I was a teenager, maybe, which is kind of old.
QUEST: You start as a teenager, quite old, because look at the map and I will show you the size and scale. Sir, thank you very much.
The size and scale, some basics on Mongolian size and scale, the country would stretch from the coast of France to Lithuania. These vast, open
spaces, 99 percent of the country's undeveloped. It has got a ratio of something like 1.6 person per kilometer.
And Ulaanbaatar is growing quickly. Nomadic life is still the backbone of this country. And that involves horses, particularly Mongolian horses. They
are different. They still have four legs. But they mainly eat mainly -- well, they only eat grass and vegetation. There is no grains here.
They are totally and utterly hardy to harsh climate. I got a tour by the political commentator that we joined and we spoke on horseback.
QUEST (voice-over): So where are we going?
UNIDENTIFIED MALE: We go down.
QUEST: OK. All right. Fine. I get the feeling that the guide doesn't trust me since I am tethered to him whilst you are roaming free.
QUEST: Come on. Let's catch you up.
UNIDENTIFIED MALE (voice-over): This Mongolian horse the most strong horses during the Second World War. Mongolian horses were the best horses in the
fight against Germans.
QUEST (voice-over): This is gorgeous. Look at those mountain crags, right ahead of me. And the scenery. It doesn't get much better than this.
QUEST (voice-over): There is only one of us that is in charge and it is not you.
And way it just stopped, it's not me, either.
Why do you keep wanting to stop?
QUEST (voice-over): You hear about Mongolia and just how beautiful the natural country is. But you've really got to see it to believe it. And even
then, it doesn't fully do it justice. It is truly remarkable. And I've only seen a small part.
All right, we are going back, because he is starting to realize that food is that direction. And if it comes to a battle between me and this beast, I
am going to lose.
Is the big risk that Mongolia screws it all up -- the environment, the geopolitical -- it has got everything, it is beautiful. People are charming
And I just wonder, is the risk that you manage to mess it all up?
UNIDENTIFIED MALE: I think down the road we will be fine. We will -- because it is a country where, like any democratic country, where we can
freely discuss the problem, then we can solve. If you don't discuss the problem, problem solved by one guy, there is a risk. That is why I strongly
believe that we will not bring my country to that point.
QUEST: We will have our Profitable Moment after the break.
QUEST: Before I leave you today, I just want to tell you what we have on tomorrow's Quest Means Mongolia. The chief executive of the Mongolian stock
exchange, you heard us talk about that earlier in the program. We will actually meet the CEO and see exactly what he wants to do.
The CEO of MIAT, Mongolian Airlines, who could be offering direct flights to the United States under the new open skies agreement and the executive
chair of ARD. In other words, we will give you a full range of views and what is happening in the Mongolian economy over the next two days.
And we might even find a little bit of cashmere, which is the country's second biggest export. And that is QUEST MEANS BUSINESS, Quest Means
Mongolia for this Wednesday night. I am Richard Quest in Ulaanbaatar. Whatever you're up to in the hours ahead, I hope it is profitable. Join me