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Quest Means Business
Powell: Inflation Still Too High; Former President Posts Mugshot After Georgia Arrest; The Complicated Rules Of Tipping In The US.; Ukraine Appears To Widen Breach Of Russian Defenses; British Museum Director Resigns Amid Theft Probe; Greek Police Arrest Dozens For Arson As Wildfire Burn. Aired 3-4p ET
Aired August 25, 2023 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: An hour to go of trading on Wall Street and it is our final Summer Friday, and appropriately enough, I'll
show you the weather forecast.
The summer is coming to an end and as you can see -- but we're not getting up just yet. The markets and how they're trading on this last one. It is --
they are actually higher. We're up more than 300 points that's on --
And you can see the way the day has gone compared to what Jerome Powell was talking about. Now, the markets like what they're seeing. It is a question
for Matt Egan in just a moment.
The events of the day: Jerome Powell has told Jackson Hole, he's firmly committed to hitting a two percent inflation target.
Never surrender: Donald Trump posts the historic mugshot on Twitter. His newest post in two years.
And views like this do not come cheap. I am going to talk to the Million Dollar Listings' guy, Ryan Serhant about the pricey real estate and who is
buying what and why.
We are live in New York, as you can tell. It is August, it is the 25th of August.
I'm Richard Quest, and yes, on top of the world, I mean business.
And a very good afternoon to you, good evening where you might be.
For the last in the dog days of summer, and we are at The Edge at Hudson Yards, which is of course the building where our studios normally are, but
we've come to the roof and that is of course The Edge, which is such a popular attraction.
We started here, we'll finish here, as always.
This is the highest viewing platform in the Western world. We knew there was a statistic that's somewhere. I am 1,100 feet above the streets. It's
the perfect place to see out the summer.
And by the way, of course, there is always the problem of rain, so just to be clear, we are ready just in case.
If we have to use the umbrellas, we will. We hope we won't, but it is a summer Friday, so who knows what will be happening.
Let's talk about the markets and what's been going on. The central bankers were in Wyoming at Jackson Hole for the Annual Federal Reserve Symposium.
Jerome Powell spoke earlier in the day.
Last year, he warned of some pain, and on the day he spoke, the Dow sank 1,100 points. This year, far karma. Powell is still resolute. But look, you
see the red, that's roughly -- that's just before -- that's roughly when Powell was speaking, and then it goes down because -- but mature thoughts
later, and it's back up again.
So inflation is falling, but the Fed is not satisfied.
(BEGIN VIDEO CLIP)
JEROME POWELL, US FEDERAL RESERVE CHAIRMAN: We can't yet know the extent to which these lower readings will continue or where underlying inflation will
settle over coming quarters. Twelve-month core inflation is still elevated, and there is substantial further ground to cover to get back to price
As is often the case, we are navigating by the stars under cloudy skies.
(END VIDEO CLIP)
QUEST: Now joining me is Matt Egan. I wish I had better weather for you.
MATT EGAN, CNN REPORTER: Me too, but the view is still pretty incredible actually.
QUEST: The view is impressive.
What did you make of -- what did you make of Powell?
EGAN: Powell was not nearly as ominous as last year, and he didn't need to be of course, right? Inflation has improved big time.
But he does not sound like a guy who's satisfied, right? I mean, he talked about how consumer spending and GDP is stronger than anticipated, how even
the housing market is starting to rebound and he warned that if the economy is too strong, that could end up undoing some of this inflation progress.
QUEST: From what you heard today, I'll nail my colors to the mast here, I think he's got one or two more to go, the Fed. But bearing in mind what
Susan Collins said the other day of what they've all said, the governors that they want that insurance policy.
EGAN: They do, and I think one more is a good bet, but I think the truth is that no one really knows, not even Powell.
I mean the line of the day was the one that you just played during that intro. Powell said, we are navigating by the stars under cloudy skies. In
other words, they've got limited visibility, sort of like us right now.
I mean, we are standing right here on one of the tallest observation decks on the planet, and we can see a lot, but we actually can't even see the end
of the island at the southern tip. We have limited visibility, too.
We think about the Fed is omniscient, they are not. They can't really see that much far ahead of them either. So, they are not sure. There is a lot
of uncertainty here -- Richard.
QUEST: There are two factors to be taken into account that we have to put into perspective. Number one, the tightening in lending standards as a
result of the banking crisis; and number two, the higher interest rates both in mortgages and in bank loans, which are itself naturally
EGAN: And I would add a third one, it's the fact that all of this inflation fighting medicine from the Fed, it hits the economy with a lag, it's not
instantaneous and Powell did acknowledge that, which was something that I think investors could be happy about today was that Powell did talk about
how there is this lagged impact, and that's why they're going to be careful here.
And perhaps, Richard, that's why we're seeing US markets and basically, with an hour to go, near session highs, a big difference than a year ago
when the Dow was down 1,100 points.
QUEST: How's the market grown up and says, oh, give us another point. Give us another quarter point. So well, we've had enough.
EGAN: I think so at this point, right? We've had five percentage points of rate hikes. What's another quarter point?
QUEST: I think, you need to get inside. Thank you.
EGAN: Thank you, Richard.
QUEST: I promise you sunshine next time.
As Matt was saying, Jerome Powell was absolutely clear, two percent remains the target. Again and again, he said, they are aiming for that.
Now, as you know, we've had on this program, economists like Paul Krugman, who you'll hear in a moment, who say that, well, inflation is falling. But
do we really need to keep a two percent target?
Paul Krugman argues it was likely -- it is going to be three or four percent. The Nobel Prize winning economist and "The New York Times"
columnist is with me. And now Paul, I've got rain here. Rain all over me, but I'm just wondering when you look at what Powell says, Do you think he
has one or two more rate hikes in him?
PAUL KRUGMAN, ECONOMIST AND COLUMNIST, "THE NEW YORK TIMES": Oh, I think he probably will do another rate hike, I mean, I'm not a terminology Fed
expert here, but it sounds to me like Powell is basically trying to not make news. Not to say anything that will startle people, not doing one more
rate hike would actually be a big upside shock for people and he is afraid of that, announcing today that anything less than staunch support for two
percent target would have made big news, but doesn't necessarily mean that it really means that.
So I think you know, what it said was pretty much what you would say if you didn't want to shake anybody's expectations very much.
QUEST: All right, now you do have the issue, how one then navigates the fact that -- have you done enough -- I mean, this issue of whether to go
for two percent with all the implications that that implies in terms of having to do higher for longer and more so that you do see further weakness
in the employment scenario, which I know you believe is not necessary.
KRUGMAN: Yes. I don't think it's necessary. I mean, we will wait for more data, although one of the things we've been learning is that the data
aren't quite as dispositive as we would like on a lot of these things.
But no, I mean, my guess is that what -- I mean, I'd actually written this piece, it probably didn't help in terms of the deliberations, but the I
think that Fed's policy, going forward is going to be one of strategic hypocrisy, saying at two percent, definitely, we're heading for two
percent, but in fact, tolerating inflation, as long as it's got two handles, as long as even if it's like 2.9.
QUEST: We're seeing long-term rates obviously go high, bond yields are going high. Mortgages are going high. Those in themselves will also slow
down the economy. And we're seeing banking tightening -- conditions tightening.
Are we entering, in your view, as we head into autumn and winter, are we entering a very risky time? When if they don't get it, right, it could all
KRUGMAN: Well, I mean, certainly, I mean, those rates are up, but if you actually look at it, it looks like a bet that in fact, it's funny that
Powell talked about the navigating by the stars -- our star. The interest rate consistent with basically stable economy.
People have been revising up their estimates of what our star is, even though we really -- you know, those estimates are very, very uncertain. And
I think this looks more like people are betting that the economy is pretty resilient, and if it starts to show signs that isn't, expect those rates to
QUEST: Let's end on a political or quasi-political economic note. When the rest of the world sees Donald Trump on his fourth indictment and then
they see the sort of fuss and furor over the budget.
Do these incidents, the political gridlock, the fact of potentially a convicted felon, potentially, allegedly a convicted felon running and being
president, does this hurt the US in the economic sense and its perception
KRUGMAN: Well, so far, amazingly not. I mean, I have to say it's amazing to me the extent to which markets treat us as a safe haven, when in fact we
are, you know --
If you saw the outline we all use, what if you saw the end of the country. If you saw the political shenanigans going on here in almost any other
country, people will say, I'm not sure I want to tie up my money there, but people still invest in America as if it's America and what can really go
I'm hoping that the markets are right about that, but God knows.
QUEST: Paul, it is lovely to see you. I look forward to when we can meet face-to-face. Thank you, sir.
Paul Krugman on the economic situation.
It's been a wonderful summer. I wish I could show you where we'd been in terms of standing up here. I mean, we went over there, and then we were
In other words, our summer Fridays have taken us the length and breadth of not only New York City, but also into New Jersey. It's been a truly
QUEST: Friday's in the summer is a chance to go --
We still tell you what's happening in the world, but we also enjoy ourselves, too.
Just look at that. Magnificent.
UNIDENTIFIED FEMALE: We're here to spark curiosity.
QUEST: It's wonderfully beautiful out here. There was a butterfly.
It's not quite fitting, but it's very pleasant up here.
UNIDENTIFIED MALE: Everything in here is original, except the air conditioner and myself.
QUEST: Let's not call it old; let's call it distinguished.
UNIDENTIFIED FEMALE: He's holding on to the wire, and his hand is sweating. And I'm like: Oh my God, we're going to kill Bruce Springsteen.
QUEST: There is a very nice ice cream place in there.
UNIDENTIFIED MALE: We make the fattiest ice cream on the market.
QUEST: Sometimes, when I come here, it's sort of a bit odd and a bit weird and a bit strange.
UNIDENTIFIED FEMALE: It is.
UNIDENTIFIED FEMALE: Your voice booms across the rotunda.
UNIDENTIFIED FEMALE: Everyone can find their own version of the botanical garden. That's one of the wonderful things about it.
QUEST: Summer Fridays on QUEST MEANS BUSINESS.
QUEST: And we've got plenty more to come. This is QUEST MEANS BUSINESS. It is a summer Friday.
We are back in a moment.
QUEST: Donald Trump, the fourth arrest, the fourth court appearance parents on an indictment. It's all about the Georgia elections subversion,
in this particular case, the racketeering charges and the Presidential mugshot, the first one in the history of the Republic.
It was posted on Twitter -- X. The first post. And just look at mugshot: August the 24th. Now selling other merchandise, you name it.
John Avlon is with me, the CNN political analysts, who joins me. John, I'm delighted you're in Sag Harbor, which means you're also enjoying a Summer
My Summer Friday is a bit overcast here, but it Is summer Friday, John, look, I want to put it like this. It was inevitable that he was going to
milk the mug shot for all it was worth, which he has done.
Should the prosecutors in Georgia have been wiser, and said, you know something, we will use the fig leaf of the Secret Service. We don't need a
mugshot. Let's not give him this obvious PR win.
JOHN AVLON, CNN SENIOR POLITICAL ANALYST: I think not. I think that allows him to effectively play the riff, whereas I think the underlying principle
is equal justice is justice under law, that you know, you may be immune from criminal prosecution when you're president, but for things you did
when you're president, if you don't treat it equally and held accountable after you leave the presidency, then that starts to erode the basic premise
of law and order and equal justice.
And so while was inevitable he was going to kind of play this up, he probably spent more time thinking about the face he was going to make than
many of the policies he implemented, so be it. Apply the law.
QUEST: You see, that's the problem, John. I just wonder and since it's a Friday, we can talk off topic, I wonder if they are making the same mistake
that people always make in these scenarios. That is, yes, we will play by the rules and by the values and the principles, but of course the other
person isn't and they are tending to then win, maybe not in the long term, they don't, but in the short term they gain.
AVLON: Look, I think that's an important conversation. It's one I used to describe during the Mueller investigation as the Boy Scout meets the mob
boss. The Boy Scout is going to lose every time.
But now that this is in the realm of an ongoing investigation, four indictments, 91 counts, the wheels of justice grind slowly, but that grind
surely. I think it's a far bigger mistake politically, people to be normalizing Donald Trump or contorting themselves to not reply
accountability because that's what he's gotten away with to date and that's why it's different now.
QUEST: So let's look at the candidates. Now, besides Chris Christie or maybe another -- all of them are still behind him, and yet, the general
view is, unless you're wanting to curry favor, like Nikki Haley to be perhaps the vice presidential nominee for Trump, what purpose does it serve
if eventually, you're going to have to turn against him at some point.
AVLON: That's the key point. Campaigns are about contrast, leadership means speaking the truth, speaking the truth to power, and if you're afraid of
the base, if you're afraid of Donald Trump, then it's in some ways a disqualifier.
I think Nikki Haley comported herself very well in the debate, did well in the debate, because she didn't do the safe political thing, which at the
end of the day is cowardly when faced with a problem of hyper partisanship and polarization.
Everyone should understand the dynamic here. The indictments don't make Donald Trump more likeable or likely to be elected in the general election.
The problem is because our politics have been forced to the extremes, playing to the base works, except when it comes to actually winning
elections because you need to win swing voters in swing states and Independent voters.
And so Nikki Haley did well precisely because she started to call out Trump simply by saying he's unelectable. He's the least popular politician in the
QUEST: And you obviously are very well connected, and you have you obviously have those extremely private conversations, or at least personal
conversations with RNC leaders.
Are they literally sitting around tearing their hair out thinking: What on earth do we do here. Where do we go with this?
AVLON: There, it is worse. They're sleepwalking.
You know, ultimately you'll see the number of sort of rationalizations, but you've got to remember, this is a state by state primary process. So a lot
of them are looking to Iowa or New Hampshire, the first two caucus and primary states to pump the brakes and grass-tops leaders of the Republican
Party in those states are trying to find a candidate they can coalesce around as an alternative to Trump.
They all know he's a disaster, personally, politically, and especially in terms of a general election. But they also know he is massively popular
among the base. And this is the current bargain of partisan politics, which is that they haven't really been able to coalesce around anybody else and
they don't have -- they could change a lot of the rules in these states to have them be winner take all not proportional, for example, they refuse to
do. They are sleepwalking.
QUEST: John, the final question, when it comes to tips, are you a fifteen, eighteen, twenty percent man? Or are you just hang the expense,
what do you tip?
AVLON: I'm a 20 percent, man, long as there has been actually service provided.
QUEST: Twenty percent, you happily allow the owner of the business to transfer his wage bill on to you. Thank you, sir. John Avlon, we appreciate
The reason I raised this, of course, is because tipping, particularly those of you visiting the United States, you find it bizarre. I mean, 12-and-a-
half percent, maybe 10 percent come from France or Spain, or maybe just round it up.
Well, one of my producers visiting here yesterday was told that he had been frugal, because he didn't give the full 20 percent. I've had been chased
down the street because I haven't necessarily tipped.
In other words, if you look at the latest survey, two-thirds of people have a negative view of tipping. They say it's out of control. And with
inflation and shoppers and workers, everybody feeling the pinch. No, I'm not a 20 percenter, unless it has been exceptional service.
Luckily, Vanessa Yurkevich has been looking into this for us.
VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT (voice over): This screen is stressful for many.
YURKEVICH (on camera): Does the flip of the screen feel like a lot of pressure?
CARLY CULLEN, NEW YORKER: It does, and they give you options like 10, 15, 20, even with like Uber Dash and like GrubHub all of it. Like everything is
tip, tip, tip.
YURKEVICH: Do you think that tipping has gotten out of control?
UNIDENTIFIED FEMALE: Yes.
YURKEVICH (voice over): Tips are part of American culture meant to be a thank you for good service. But today, more and more Americans are
confronted with the question: Would you like to add a tip?
CULLEN: It is tricky everywhere, right? Like if you're at a coffee shop, if you're out in the hairstylist, if you're coming out of a taxi like I don't
know the rules then and I often don't know what to tip.
YURKEVICH (voice over): A recent study found that in a high number of cases, participants who were presented with a tip screen had more negative
emotions to the payment experience than those that didn't, and it wasn't even a real world scenario.
DYLAN BOSCH, NEW YORKER: Let's say you go to a coffee shop and all they do just twist around the laptop and I was like: Why am I tipping?
YURKEVICH (voice over): But the small group we spoke to said more often than not, they do end up tipping.
JOSEPH GUZMEN, NEW YORKER: I put a dollar or two. I don't mind, as long as like, you know, it's not a lot. I just -- I just put it because I don't
mind this. I don't know -- I'm hoping I'll you know other people.
YURKEVICH (voice over): This is Provisions on State, a butcher shop. There's no table service, no cooking or serving, yet, they will ask you if
you'd like to tip.
YURKEVICH (on camera): A flip screen in a butcher shop.
EMILY MINGRONE, CONNECTICUT RESTAURANT OWNER: Yes.
YURKEVICH: I don't think I've ever seen that before.
YURKEVICH: How did you decide to do that?
MINGRONE: These men and women have a knowledge base that they're sharing and taking care to share with the guests that come through the door, and
they're not pressured to tip, but they want to because they're paying for a service provided.
YURKEVICH (voice over): Emily Mingrone owns the butcher shop and two restaurants in New Haven, Connecticut. At the restaurants, for front of
house staff make the state's tipped minimum wage $6.38 an hour. Tips bring them to $40.00 an hour on average.
But the back of house staff make half that and aren't eligible for tips.
YURKEVICH (on camera): This movement to get rid of the tipped minimum wage, are you for it? Against it?
MINGRONE: I'm against it. And I think, frankly, it's kind of clueless.
YURKEVICH (voice over): Eight states have abolished the tipped minimum wage, which in some is as low as $2.13 an hour. The National Restaurant
Association is fighting against it calling it a top issue.
MINGRONE: That's money that's going to come out of my pocket, take away from the people that aren't getting tipped. I would need to raise my
prices, which then causes pushback from the guest.
YURKEVICH: But the group One Fair Wage is moving legislation and ballot measures to end the tipped minimum wage in 25 other states including
DESTINY FOX, RESTAURANT WORKER: That's how I live, it is with tips.
YURKEVICH (voice over): Destiny Fox works in to Chicago restaurants. She is saving up for school. She makes just above the state's tipped minimum wage,
taking home $9.40 an hour. Tips at 80 percent to her take home pay. Without it --
FOX: It wouldn't give me the means to live, to pay my bills, to eat and to do the things that I'm planning on doing, school, and I mean, it's
QUEST: Vanessa is with me. But before I even asked you a question, I need to know. Are you 15, 18, 20? What are you?
YURKEVICH: I am a standard 20 kind of gal.
QUEST: Standard 20.
YURKEVICH: In New York City, that's standard. That's what people expect, 20 percent here in New York City. I understand other places, they may be a
little bit less.
We spoke to a gentleman who is from Orlando, he said there, 15 percent is usual. But here in New York City is -- expensive New York City, 20 percent.
QUEST: All right, so let's say we're at 20 percent.
QUEST: Just for the purposes of this question, where -- 20 percent in a restaurant, I'll give you.
QUEST: Twenty percent in a coffee shop, where they've just basically done their job of providing you with a cup of coffee.
YURKEVICH: For me personally, no, and a lot of the folks we spoke to no as well. But one thing I learned is that when they flipped that screen,
there's a lot of pressure, right, from the person who is serving you and from the people who are watching you.
The person who is serving you actually doesn't know if you tip at all, doesn't know how much you tip. The pool tips that they collect over the
week, basically get added up at the end of the week, then distributed to all the employees.
So take that pressure off yourself. They may be watching you, but they don't know exactly how much you're tipping. Rule of thumb, if you think
that that person provided you with an extraordinary service, getting your cafe-au-let, give them a tip, but it's not required. Certainly not
required, but it's a nice little bonus I would say.
QUEST: I just wonder where does it end? Because the -- you know, I was joking with John Avlon, in restaurants, particularly the owners, basically
and I know that they get taxed on tips. So the IRS is well familiar with this, but the owner is basically transferring the wage bill.
YURKEVICH: Yes, for the tipped workers, certainly.
YURKEVICH: But remember back of house, they are not eligible for tips. So it's the front of house that relies on tips. If there weren't tips, then
the restaurant owners would have to make up the difference. And that means they'd have to raise the cost of menu items and then would you and I'd be
willing to go and have a piece of fish at a restaurant for $55.00? I don't know. A lot of people may not be willing to do that to make up the
difference that the owner would have to pay the employee.
QUEST: I thought that was the normal price in New York.
YURKEVICH: Maybe, maybe here in Hudson Yards.
QUEST: Hudson Yards. I have to say, good luck getting a piece of fish for 55 bucks.
This tipping thing is so -- it goes to the heart, doesn't it? It's so personal. It's so tricky. It brings out the best and the worst in it.
Because I quite like if there's been some really good service, I like giving an extra tip and sort of saying thank you.
YURKEVICH: Right. But don't you feel bad if you don't have great service? Do you feel bad giving less of a tip? I think that's where people struggle.
If the service isn't great, I think people still feel like they must tip well at a standard rate, not walk out of the restaurant giving no tip.
QUEST: I am the original hypocrite. I will sit there and fume to my husband and say I'm not leaving a tip. The service was dreadful. I'm not
leaving a tip.
QUEST: But they are not, I will actually leave a tip.
QUEST: Poor man is going to leave --
YURKEVICH: Exactly. That person needs to pay for their own things in life.
QUEST: Vanessa, the next time, I promise you we'll be -- we'll have nice weather and we'll have fish, and I'll pick up the bill.
YURKEVICH: Thank you so much. I'll tip the 20 percent.
QUEST: I'll take -- of course, you can tell, I'll pick up the bill.
Coming up in just a moment, so now the Spanish Women's League, the national team say, they're not going to play. They say they won't play any more
football as they wait for the football chief to be removed after the kiss which was non-consensual except he says it was consensual and that in
itself is worthy of our conversation.
It's QUEST MEANS BUSINESS.
QUEST: Hello. I'm Richard Quest. We have a lot more QUEST MEANS BUSINESS. I promise you summer Fridays. I don't know I goal to talk about summer
Fridays. Look at that. But actually, it's warm, it's pleasant. And there's a bit of light rain every now and again. So, it's not too bad. Well also,
we'll have those. We'll have the host of the Million Dollar Listing. Ryan Serhant will be with me.
To your real estate, just how expensive it really is and is it true market. And the fourth-generation owners of the iconic Russ and Daughters. They've
got bagels. Bagels and Lox. And they're going to bring some which will do nothing for my glucose level, but will do wonders for my appetite. It's all
comes after the news headlines because this is CNN and on this network, I promise you, the news always comes first.
Ukrainian officials say troops are gaining ground in the front lines of southern Zaporizhzhia. This despite fierce resistance in Russian airpower.
The Russian military bloggers confirm fighting in the area. Ukraine appears to be widening the breech of enemy lines and pushing towards tarmac. The
director of London's famed British Museum has stepped down amid an ongoing theft investigation that follows artifacts which include gold jewelry and
gemstones having been missing or damaged.
In a statement, the director said he recognized this. The museum did not do enough in response to warnings of potential theft activity back in 2021.
Greek police are now arresting dozens of people for arson, as the largest wildfire ever recorded in the European Union continues to ravage the
country. Officials say some 1.3 billion square meters have been so far, and at least 20 people have been killed.
Heineken has announced its complete withdrawal from Russia. Selling its operations there for a symbolic Euro. The Dutch brewer says Russia's Arnest
Group by the 100 percent of shares, it expects to book a $323 million cumulative loss.
The Spanish women's football team is now refusing to play again until the football chief is removed. The situation is deteriorating. A short time ago
in Madrid, there were protests against Luis Rubiales outside the Football Federation. Now you know the facts. He kissed a player after the World Cup
when she says non-consensual. He poured petrol on the flames by saying it was consensual, making in a bad situation worse.
He says he won't quit and now Spain's High Council of sport is moving to suspend him. Patrick Snell with this imbruglio.
PATRICK SNELL, CNN SPORTS ANCHOR: Hi there, Richard. Yes. Where do we start on all of this? A fast-moving developing story. As you said, look, within
the last hour alone, what we've had is over 80 players signing an agreement, an open letter, if you like saying they won't play for the
national team again. It's quite extraordinary. And bear in mind, this is a national team trying to bask, Richard, in the glory of winning their first
ever Women's World Cup.
And this has been changing not just day by day, but pretty much hour by hour. Now, a short while ago, we heard from Jennifer Hermoso as you said
Rubiales claiming the kiss was mutual. She says not a bit of it. Let's get to that statement from her. She says I want to make clear that as can be
seen in the images at no moment did I consent to the kiss that was given to me? And of course, in no way did I look to lift up the president.
I can't stand that my word is put into question and far less that words are invented that I did not speak. Now, earlier in the day. We had words --
very, very strong words indeed from Victor Francos, Richard. He Spain's Secretary of State for sport. He held a press conference and he said that
they're going to suspend Rubiales beginning the process to attempt to remove him. Listen to Francos.
(BEGIN VIDEO CLIP)
VICTOR FRANCOS, PRESIDENT, SPAIN'S HIGH COUNCIL OF SPORT (through translator): I believe that we're in a position to call this the MeToo of
Spanish football and that this is a change.
(END VIDEO CLIP)
SNELL: And all of this, Richard, coming off to Rubiales himself in very defiant mood. Rubiales saying that that kiss during the World Cup
celebration, as I said it was mutual, but we now know what Jenny Hermoso was saying about it. Rubiales's words, Richard are absolutely
extraordinary. Given all the criticism he's been facing from the world of football and beyond. He says he's going to be fighting to the end, calling
what was happening to him and just campaigns.
(BEGIN VIDEO CLIP)
LUIS RUBIALES, SPANISH FOOTBALL PRESIDENT (through translator): It was spontaneous, mutual, euphoric, and with consent, which is the key. This is
the key to all the criticism of all the campaign which has been mounted in this country. That was without consent. No, it was with consent.
(END VIDEO CLIP)
SNELL: Yes. Rubiales I really am speaking there, Richard. And it's extraordinaire. As you said in your intro, you know, we had all the fallout
from the Euros last year when 15 members of La Roja, La Seleccion Roja making themselves unavailable for selection for the World Cup. But then, of
course, three of those 15 did play in the World Cup. They went on to win it. But this story, Richard showing no sign of abating. It is quite
And you have to sense now that Rubiales, the scrutiny on him now more intense than ever, Richard.
QUEST: All right. And a word. Will he survive?
SNELL: It doesn't look good at all for him, right? The reporting last night and we've been following this, Richard very, very closely indeed. He was
widely expected to resign first thing this morning. And then what do we go and get? That extraordinary show of defiance, as if to say I'm not bowing
to public pressure. Now, though, this weekend, I think is going to be absolutely pivotal, Richard. Absolutely pivotal. I do not see how he can go
QUEST: Patrick Snell, I'm grateful to you, sir as always. There's no place like home whether it costs a buck and a half or a billion and a bit. When
it comes to selling real estate, well, we've got the man who's going to tell us what's happening in New York. The million-dollar man, Ryan Serhant
is with me. He will be with us after the break. He will tell us what's selling and what's not.
QUEST: The biggest and the best and the most expensive. And that applies also to New York real estate which had a bumper year last year. The
question of course, is what happens now as economic times get more difficult. But last year, more than 240 properties sold in excess of $10
million each. And I think this is the key. 80 percent were cash buyers. And the price is forecast to rise this year. Lots of people, a lot of attention
on those properties.
And the people who sell them highlighted by shows like this. The Million Dollar Listing and personalities like Ryan Serhant who goes all out to make
the high dollar deals.
(BEGIN VIDEO CLIP)
RYAN SERHANT, REALITY STAR, MILLION DOLLAR LISTING NEW YORK: So 42nd Street isn't a place that you should run away from. It's a place I used to call
This home is the most expensive home in the United States. We are priced at $250 million. And it couldn't be more worth it.
You know you're rich, when you don't even remember how many floors are in your own house or how many bathrooms you have. Like that's a good problem
(END VIDEO CLIP)
QUEST: That is not me. But this is Ryan. Good to have you, sir. Thank you for joining us.
SERHANT: Thanks for having me.
QUEST: I'm sorry that the weather hasn't played.
SERHANT: I blame you 100 percent.
QUEST: Completely. Well, I'll take the blame. What is it? I mean, what is the current state of the market in New York?
SERHANT: The markets is volatile, but where there's a will there's a way. Inventory is down 20 percent year over year, but signed contracts are up 20
percent quarter over quarter. You know, as interest rates continue to climb and climb and climb. And I think now the 30-year fix is hovering at around
7.3 percent give or take. A nice 22-year high, making affordability of roughly four-decade low.
There is a race to say OK, I thought rates were high when they were five percent.
QUEST: But who does that hit? Because it doesn't hit your wealthiest customers, does it? Because they will find out too many other different
ways or just straight out of cash.
SERHANT: Yes. I think if you look at the second quarter, not just in Super prime, not just in 10 million plus but across all price points in New York
City. 60 percent of all purchases were done in cash. So, a lot of people are still paying cash when they can or they're putting down 50 percent.
They're financing the rest. They're marrying the house. They're dating the rates. But listen, I mean absorption, time is taking longer, right?
Volume is lower. Volume has been completely cut in half. People are taking their time. Sellers are locked into a financial asset called a loan at sub
five percent rates. That's 90 percent of all mortgages in the United States right now.
QUEST: How, how does this market move forward? Because every one of us who's got a property here, either regrets buying when we did or wishes with
mortgages another time or keeps thinking about. I mean, the (INAUDIBLE) it just does not exist. I don't regret anything because it's not exist in the
SERHANT: I don't really know what you just said. But I basically think that what goes up must come down.
SERHANT: And what goes down must go back up.
QUEST: That second part of the equation that we always focus on.
QUEST: They must go back up again.
SERHANT: Always. Where there's a will, there's a way. When the markets are high, they've never been higher. When they're low, they've never been
We're selling -- I can't see it because it's in the clouds because it's raining right now but we're selling a penthouse at that building right now
for $250 million. Just sold the floor just below it for $50 million.
QUEST: Just 200?
SERHANT: Two-hundred and fifty U.S. dollars. Yes.
QUEST: (INAUDIBLE) sort of place?
SERHANT: There's a lot of money on the sidelines. Where else are you going to put it? Tangible assets in real estate are still an incredibly safe bet,
especially in the United States, where you have freedom of deed, right? Freedom of title. One the best places to own.
QUEST: And so, of course, in New York, we do have this strange beast, the co-op.
QUEST: The co-operative board.
QUEST: And which I, you know, I need to -- transparency. I'm a member of the co-op board of the building where I do live downtown. But it is a very
strange animal. This idea of the amount of power the co-op board has to who buys, who doesn't, who rent, the rules, the regulations.
SERHANT: Well, you have to think that when co-ops are first started, they were started with good intents. Today they seem complicated, but the good
intent was everyone shares one front door. You should know who's coming in and who's leaving that one front door. It's a safety concern. Now, it's
difficult. But originally in New York, it was a safety concern.
QUEST: Finally, is there a property that you wanted for you that you didn't get?
SERHANT: Oh, I want every beautiful property I walk into. I remember walking into a house in Palm Beach that I then sold for just under 140
million. And I said to myself, one day, Ryan, one day, maybe I could buy this, but my buyer wanted to buy it and I let that happen. And that was OK.
QUEST: It must be -- do you ever see a property that you think -- I mean, the buyers, it's obviously what the buyer and the seller will agree. But do
you ever think I wouldn't do that? I wouldn't do that?
SERHANT: No, I leave forward with pretty brutal honesty.
QUEST: You do?
SERHANT: I walk into a lot of properties with buyers and they fall in love. And I say absolutely not. You can buy this because this is what's going to
happen. In two years, you're going to grow out of it, you're going to want to sell. You're not going to want to deal with this renovation or this co-
op. Or maybe they know that you're on the board. And that'll be way too difficult. And so, we're going to go fund another building. I'm just
QUEST: Thank you very much. Indeed. When we continue to make traditional -- oh, look at this. Russ and Daughters' traditional rugelach (INAUDIBLE)
SERHANT: No, thank you.
QUEST: I'll have yours then as well.
SERHANT: OK. Perfect.
QUEST: Thank you very much. After the break, we'll be talking to the Russ and Daughters and see if any of this left.
QUEST: Welcome back to QUEST MEANS BUSINESS. This is Josh Russ Tupper. The fourth generation owner of a company called Russ and Daughters. And we have
the most extraordinary. Thank you, sir, for bringing all these delightful goodies. The traditional rugelach, I tell you (INAUDIBLE) for that. Now, as
for the actual Russ and Daughters, it opened in 1904 by Jewish immigrants. Started on a pushcart and the current location in 1920.
Now, of course, it's opening a new one right here in Hudson Yards. Just around the corner but it's still a family business. And Josh is with me, as
part of our last summer Friday. Why Hudson Yards?
JOSH RUSS TUPPER, OWNER, RUSS AND DAUGHTERS: Well, we were approached a few years ago now maybe. And through a few conversations, we decided it was a
good spot to open. You know, we've been focused on the Lower East Side, we have location in Brooklyn, but the corner of 34th and 10th. And Hudson
Yards is great. And we did open July 18th. And it's been going very well. Successful.
QUEST: What's the hallmark of the success? I was reading an interesting article where you say, you know (INAUDIBLE) it's wonderful Yiddish word.
TUPPER: And you know what it is.
QUEST: Of course (INAUDIBLE)
TUPPER: Well, so accessible, not hoity toity of the people. So, we try to like stay close to our roots. And stay to what we know which is smoked
salmon, smoked fish herring.
QUEST: Oh, British smoked herring.
TUPPER: Smoked herring. You know very well.
QUEST: Can't go wrong with a bit of that.
TUPPER: You have a bagel here with some smoked salmon and cream cheese.
QUEST: Oh, look at that.
TUPPER: And the works. Dig in, if you're hungry.
QUEST: Oh, well --
TUPPER: We get a little caviar. That's probably even a better choice to dig in on if you -- if you're interesting.
QUEST: Well, it would -- it would be very rude --
TUPPER: Not to.
QUEST: Not to.
QUEST: So just to be sociable.
QUEST: While you open this and navigate.
QUEST: What is the -- well, how difficult has it been in a post pandemic world in a city that is so expensive where labor and costs and inflation, I
can't believe I thought about inflation. While I'm snarfing down caviar. There's a sort of inherent contradiction about this. But never mind, at
least I can see the irony.
TUPPER: Well, we continue to do what we do. Obviously, prices are going up. But we really try to stay true to who we are and maintain manageable and
accessible prices which is becoming a little more difficult now. But we look at where we are in the business and only raise it what we have to.
QUEST: We were talking (INAUDIBLE) ice cream and about this whole idea of expansion. And the real -- I mean, what I noticed is the number of outlets
you've got is relatively -- relative for the length of the companies. You - - there must have been moments where somebody said, oh, let's expand. Let's open here. Let's open there. That's franchise. Let's go this.
TUPPER: It's funny you say that because this family-run business. No one's ever said that. I think before Nikki and myself, we now own and run the
business. No one ever thought of opening another location. So, we do open other locations. We're very controlled about the brand, about the expansion
about how people see us. So, we've made these small steps. It took us 100 years to open a restaurant.
QUEST: I noticed that Subway has just been sold. One of the oldest family- owned restaurants. It's got -- gone to some nine billion. It's been sold to a private equity group. When you see these sorts of deals, do you think of
TUPPER: We will not sell and everyone I talked to and how we grow the business and develop the business, it's -- I always say we have a unique, a
different perspective on this because we are not looking for the 10-year plan and then getting out. I'm going to hand this down to my daughter and
my cousin's children.
QUEST: What's your best seller?
TUPPER: Best seller is probably the classic smoked salmon.
QUEST: And how much would this -- how much would this smoked salmon on a bagel?
TUPPER: I think that's $17.00.
QUEST: It's not too bad. It's not too bad. It's got a good generous amount of smoked salmon.
TUPPER: Yes. You want to get in there?
QUEST: No, no. I -- all right. You're going force me. You're going to force me to eat your smoked salmon. I got $17.00 off.
TUPPER: This one's for free. First ones for free.
QUEST: Even better.
TUPPER: That's not true at all.
QUEST: Have you ever gotten things that you've really thought or tried to sell things that didn't work? I mean, chicken soup is always a good old
TUPPER: We sell matzo ball soup.
QUEST: Oh, a bit of matzo ball soup.
TUPPER: Yes, yes. Have we introduced something that didn't work? I'm sure we have and I can't think of anything right now. This work.
QUEST: These are just decently good. Would you like one?
TUPPER: I would. I would. Thank you.
QUEST: He takes his own rugelach. He takes his own --
TUPPER: I still like my own --
QUEST: He brings his -- he brings a rugelach first us all and then he takes it. What come one say?
TUPPER: I have no manners.
QUEST: It's Friday. Good shovels.
QUEST: We will have a look at the markets. I'm going to show you very quickly where we stand as we head towards a break. We are we've given that
a little bit, but it's a -- it's a good day on the market and it's all about Powell and we will have a profitable moment after the break. It's
actually interesting that all three, the Dow, the S&P, the NASDAQ, broader tech and narrow all high. QUEST MEANS BUSINESS.
QUEST: Tonight's profitable moment. There are two things I want to talk to you about. The first of course, is what's happened with Joe -- with Jay
Powell today and him saying, well, he might or you might not. I think there will be one, maybe two more interest rate hikes. Because like the cancer
patient, they want to make sure that the chemo has worked. And the only way to ensure that is to give another dose.
Could this make it more uncomfortable? Distressing? Yes. But I think that he's tied himself to his two percent inflation target. And he's not going
to be able to get away from that. So that's so far on that. But related to it, of course, is where we are today. I'm sorry, you haven't had the beauty
of the view from the edge at Hudson Yards. When you've seen it before from me being up here before but it is gorgeous.
And it brings to an end our summer Fridays. I've said it already. It's a real treat, an honor and a privilege and pleasure to bring these programs
to you. Not only because for me and the team, it's an opportunity to get out and about and see things. But also, I think we get to bring you
different types of stories like Russ and Daughters and how they've expanded. Or Asbury Park or the Guggenheim Museum.
If we think about economics and business only in terms like Jerome Powell of mortgage rates, FOMC meetings, then I think we are headed right over the
cliff, look into boredom. But when we show you what it really means in reality, how businesses thrive, how people enjoy, how those people are on
vacation, spending money and tourism then we have QUEST MEANS BUSINESS.
And that is QUEST MEANS BUSINESS for this Friday night and summer Friday. I'm Richard Quest at the edge of Hudson Yards. Whatever you're up to in the
hours ahead, I hope it's profitable. I'll be back in two weeks. I'm on holiday now.