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Quest Means Business
Zelenskyy, Blinken Speak On Day Two Of Davos; Trump Scores Historic 30-Point Win In Iowa Caucuses; Von Der Leyen: Looking To Improve EU Enlargement Process; Moynihan: "More Unifying Forces" Would Be Good; Global Economy Enters 2024 With Hope, Uncertainty; Interview With Cantor Fitzgerald CEO Howard Lutnick; Since December, Index Of U.S. Dollars Rises To Its Highest Point; World Economic Forum Highlights Artificial Intelligence; Path To Nomination Narrows For Haley, DeSantis; Trump Secures Resounding Victory In Iowa, DeSantis Surpasses Haley For Second Place; E. Jean Carroll's Compensation Will Be Determined By Jury; A Day After Winning The Iowa Caucuses, Trump Appeared In A New York Courtroom; NATO Chief "Confident" U.S. Will Approve Ukraine Aid; Explosions Reported In Ibadan, Nigeria; Trump Would Be Bad For Europe; Aired 3-4p ET
Aired January 16, 2024 - 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: An hour to go of trading, Wall Street's reopened after Martin Luther King holiday. The markets are sharply
The Dow is up, more than 300 points. That's largely because of borrowing. We'll get to that later in the program. Those are the markets.
The main events of the day. Donald Trump takes Iowa, and now everyone wonders what's next?
Here in Davos, President Zelenskyy takes WEF, and everybody wonders when's the money going to arrive for Ukraine.
We are alive at the World Economic Forum in Davos. It is Tuesday, January the 16th. I am Richard Quest, and together with AI Al (ph), we mean
Good evening. It is only minus nine here in Davos, and it is day two of WEF. The snow has stopped falling, although there might be some more. And
the night is still -- make no mistake -- this small Swiss village is abuzz because not far from here, the Ukrainian President Volodymyr Zelenskyy and
his entourage have literally stopped the traffic along the Promenade. In every direction, nothing is moving as he visits the Ukraine house.
The president is here to deliver a wake-up call to the world's elite about the war in Ukraine. With him is the Secretary of State -- the US Secretary
of State Antony Blinken.
Of course, people here have also been talking about what happened last night in Iowa -- that big win for Donald Trump and his effort to become the
Republican presidential nominee. And the interesting aspect of this, of course, when you put together Iowa, Trump, and the prospects for Ukraine
and Russia, then you start to see how the knitting comes together.
Jim Sciutto is with me in Washington. It's often we talk about these things, Jim, in sort of esoteric grand ways. But the reality is it's real
life and it starts to come together now.
JIM SCIUTTO, CNN HOST: No question, and it's very much connected because the Trump view, for instance, of the Ukraine war of the Russian leader
Putin markedly different from the incumbent President Joe Biden, so lots at stake as we get closer to November.
We were speaking last night about prospects for Iowa. Here's how it turned out. Former President Donald Trump scored a decisive victory in last
You could see there, he won more than 50% of the vote. Ron DeSantis in second place, but nearly 30 points behind, just ahead of Nikki Haley. A lot
of buzz about her going into this, whether she might finish in a strong second. Her campaign is now looking ahead to New Hampshire, where she does
hope to make it a much closer contest there.
The Republican nomination process has only just begun. Trump, however, already has a site said on the general election.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENTIAL CANDIDATE: Iowa, we love you. You are going to - - oh, you just go out and buy larger tractors and more land. Don't worry about it.
This is a very special night and .
CROWD: We love you.
TRUMP: . this is the first because the big night is going to be in November when we take back our country. And truly, we do make our country great
(END VIDEO CLIP)
SCIUTTO: CNN's Harry Enten joins us now in New York. And, Harry, it's always good to have you on because you use data to answer hard questions
about what this all mean. So what did we learn? Besides the fact that he had a decisive victory, is it a telling victory? Is it decisive not just in
Iowa, but likely to be decisive in the overall nomination contest.
HARRY ENTEN, CNN SENIOR DATA REPORTER: Yes, I mean, look, a fact, as you know, a 30-point win when the largest previous win in Iowa caucus on the
Republican side was 13 points -- Bob Dole back in 1988. That's a huge win.
And it's more than that, Jim, right? You know, we know that the Trump supporters have been saying all along that they were extremely enthusiastic
to go out and vote for him. This wasn't just the default.
If you'll look in Iowa, you look at those Trumps supporters, they were extremely enthusiastic to come out and vote for him. Compare that to other
support of voters for other candidates talking about Ron DeSantis, Nikki Haley, you can see here Trump supporters overwhelmingly.
But you mentioned the question, Jim, you mentioned the question, what about what happens when we go to New Hampshire? What do we see Donald Trump
extremely enthusiastic in Iowa, but in New Hampshire? The favorable ratings for Donald Trump in New Hampshire among that likely GOP electorate, not
very good, not very good, just 47% favorable to a 38% unfavorable.
And when you look at the horse race, it's a much different ball game in New Hampshire than it is in Iowa. A recent CNN University of New Hampshire poll
showed Donald Trump ahead by seven points, but you'll notice Christie got 12%, Ramaswamy got 8%.
When you put those candidates -- put the voters who supported those candidates to the second choice, it's only Trump by four in the state of
New Hampshire. So New Hampshire is shaping up to be something far different than Iowa was, Jim.
SCIUTTO: No question. Historically, beyond data, you're also good at history and what it teaches us about indicators and so on. Is Iowa -- do
results of Iowa tend to change results in New Hampshire? I mean, because oftentimes people talk about the opposite effect that New Hampshire, quote-
unquote, corrects results we sometimes see in Iowa.
ENTEN: Yes, so this is really interesting. When you look at history, what it suggests, if it's not so much that Iowa influences New Hampshire based
upon the raw results. What it's all about is expectations. Does the candidate outperform expectations?
And now is why I think the expectation game was so important for Nikki Haley. Was she in fact going to do better than her final poll suggests in
Iowa? Because if she did, history might suggest that she would go on and do better in New Hampshire than the current polls had. But in fact, Nikki
Haley basically matched her final polls.
The only one who really exceeded was Ron DeSantis. And as you saw in that University of New Hampshire poll, that CNN sponsor, Ron DeSantis is, you
know, 40 points, 35, 40 points and back of the leaders at this particular point. So he's not somebody who's really going to be able to do anything
with that momentum that he might potentially get for exceeding expectations coming out of Iowa. But again, he finished at just 21%.
But one last thing I'll note, Jim, which is the fact is Iowa usually doesn't pick the winner on the Republican side, but it does when it matches
the national poll leader. That's happened twice. That happened with Bob Dole in '96. It happened with George W. Bush in 2000. So at this particular
point, there's no reason to believe that Donald Trump is anything but a prohibitive favorite going forward.
SCIUTTO: Harry Enten, thanks so much as always.
ENTEN: Thank you, my friend.
SCIUTTO: Let's get back to Richard Quest in Davos, where political leaders have been reacting to Trump's victory in Iowa.
QUEST: It's extraordinary, Jim, the detail that Harry Enten keeps in his brain at one level is probably quite worrying. We'll come back to you in
just a second, Jim, because the big question on day two of Davos, what would Donald Trump's return to the White House mean for Ukraine?
President Zelenskyy spoke here earlier and said the west must not let down its guard against Vladimir Putin.
(BEGIN VIDEO CLIP)
VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT: In fact, Putin embodies war. We all know that he is the sole reason why various wars and conflicts persist
and why all attempts to restore peace have failed. And he will not change - - he will not change. We must change.
(END VIDEO CLIP)
QUEST: Now, Jim, the point here is the president has made a big deal of the fact by saying, number one, the war would not have happened. Number two, he
would be able to solve it within a week.
QUEST: He knows President Putin. That's a very attractive argument to electorates who are being asked to send billions of dollars or euros.
SCIUTTO: Well, attractive not necessarily fact-based. Of course, I mean, Russia first invaded Ukraine, as we know, back in 2014. Those circumstances
didn't change certainly during Trump's four years in office here.
I think it is worth noting that the political backing for Ukraine has changed in this country in the nearly two years since the Russian invasion.
During that time period, post February 2022, that there was a great deal of unanimity here -- Republican and Democrat. There's still large bipartisan
support, but not enough to get aid across the finish line.
Remember, President Zelenskyy came here to Washington, made a pitch directly to lawmakers -- Republicans and Democrats. That didn't move the
dial. That aid is still hanging in the balance with genuine questions as to whether it comes through. That is a new political reality here, and that
will have a big impact on the war. And then hanging over that is how a reelection of Donald Trump would affect not just aid, but affect the US
position on the war in Ukraine even as relates to the NATO Alliance.
I've spoken to senior .
SCIUTTO: . members of Trumps administration who say, not only would he stop backing for Ukraine, but he would pull out of the alliance. There are major
changes afoot if the politics, as they stand, stay the same on the Hill and if they change if the party flips in November.
QUEST: We have -- this might be an assumption too far, but one assumes that even those Republicans that are holding the aid hostage. We assume that
they don't want President Putin to win or they don't want Russia to take Ukraine. If that is the case, I'm bearing in mind, you know, that Ukraine
is feeling a lack of hope.
QUEST: What would they say?
SCIUTTO: I've asked them, and I asked him repeatedly, and you hear different things. So there are Republicans who are very much backing
Ukraine still due to this day. There are other Republicans who will say, well, as much as I sympathize with the Ukrainians, that's not our fight.
It's too expensive. We don't need to be there or even we don't need to be there, we should focus our resources on China even though, of course, we
know Chinas very much watching events in Ukraine for an indicator as to how the world might react to Taiwan.
But there are, I should say, Richard Quest, Republicans I speak to who equate the two sides in this war and forget that it is Russia that invaded
Ukraine and who say, well, they're fighting, we don't really want to keep fighting there and we're just fueling an ongoing war, forgetting, you know,
not even recent history because it's happening today. It was Russia that invaded Ukraine.
SCIUTTO: You hear those. And then I press a lot of lawmakers on that very question. You hear that diversity of answers.
QUEST: Jim, we'll talk more. I'm grateful. Jim Sciutto in Washington with the political side of the Iowa caucus tonight.
Europe is also dragging its feet when it comes to providing additional aid to Ukraine. EU leaders are planning to hold a special summit on February
the 1st to discuss a new aid package. It was postponed because of the opposition from Viktor Orban, Hungary's president.
Now, bearing in mind exactly that earlier the money has not been paid, and there needs to be unanimity amongst EU countries, I spoke to Ursula von der
Leyen, the president of the European Commission, to find out how she's determined for the EU to reach a solution even if it's not unanimous.
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: There's the strong determination of all heads of state and government to support Ukraine for
as long as it takes. And we have solutions.
I want a solution by 27-member states. That's a whole of the European Union. But if this does not work out, we have alternative operational
solutions, not as easy, not as arrogant, but there are solutions.
QUEST: So what point will you say we can't get unanimity? We're going to have to look at these less desirable, but necessary measures.
VON DER LEYEN: Look, the whole structure of the proposal of EUR50 billion for Ukraine for the next four years is ready and accepted by everybody in
its structure itself. The goal comes with 27 times. Yes, if it's only 26, that is the moment when I have to switch to the alternative solution.
QUEST: Which is will be when? How long are you going to give it to try and get the 27?
VON DER LEYEN: We have ahead of us a special European Council, and this is the place and the time where we have to take a decision.
QUEST: Ukraine is struggling, in a sense, that they're tired. They are wary of fight. They are short of, in some cases, of ammunition. And now they're
getting a mixed message from the allies.
VON DER LEYEN: Of course, after almost two years of an atrocious war that Russia has unleashed also against the civilian population in Ukraine, this
is -- they are exhausted without any question, but they are determined to prevail. And this is something we have to support with all our means, and
they need hope indeed. And this is the reason why the European Union opened accession negotiations with Ukraine.
So Ukraine knows that the path towards membership in the European Union, and this is what Ukrainian people want. They want their children to grow up
in a country that is member of the European Union.
QUEST: If we look at the way in which the EU is now handling crises, you come to quite a few. Of course, Ukraine, the economic crisis. What reforms
do you think still need to be made to the decision-making process, to make the thing more efficient.
VON DER LEYEN: For us, it's important and that's what we are discussing. What do we have to improve within the European Union? Also, to be ready for
enlargement because, you know, that nine different countries want to join the European Union. This is not only Ukraine, it's also Moldova, for
example, but also six Western Balkan countries.
They want to join the European Union. They have to do reforms within their own countries. But also, the European Union has to get ready for a
QUEST: Is it wise to enlarge when you're already -- you know, Alex (inaudible) always says the problem with the union is that it has, you
know, by the time you've got consensus, you end up with a suboptimal result.
VON DER LEYEN: Well, we have proven in the last year is facing all these challenges that we have optimal results. Look how we went through the
pandemic. Look how we managed the attack of Russia towards Ukraine. We have next-generation with the massive investment fund in the European Union.
So -- and there's a lesson to be learned from history because, with each enlargement round, there were, of course these fears that this would be too
much, but the opposite was the case. It was a big boost for the economy within the old -- so-called old member states and a huge improvement of
prosperity for the new member states. So history is showing us that being bigger makes us stronger.
QUEST: Let's talk about AI. The EU has got ahead of the game on this. You're moving forward, but the big worry is still disinformation. It is the
-- if you'd like the nefarious side of AI.
VON DER LEYEN: Here, we have the Digital Services Act already in place that puts responsibility on the large platforms for the content they distribute.
And they have a responsibility.
QUEST: They don't like it.
VON DER LEYEN: They don't like it, but they have a responsibility for the content they are propagating. And, therefore, this works well. Know that
they are much more conscious on taking off the platforms -- hate speech, for example, or other misinformation and disinformation.
QUEST: What about to the point when they say, well, we're not going to bother with Europe, you know, it's -- I mean .
VON DER LEYEN: Well .
QUEST: . or we will limit our investment in Europe. Have you now created an infrastructure of regulation that is anti-tech?
VON DER LEYEN: The opposite is the case. The European single market and 450 million Europeans are much too attractive not to be there.
QUEST: Choose your color. Go.
VON DER LEYEN: Ah, so I go for blue because it's European.
QUEST: Right. We know what you like to go on?
Now, this is about society. I would suspect if we're talking about the EU, you're somewhere over here. But if you're talking about society,
disinformation, everything, where are we?
VON DER LEYEN: Here, I would -- somehow the risk must be polarization in society, which I don't see it here.
QUEST: It wasn't like it.
VON DER LEYEN: Ah, oh, my god.
QUEST: That's it.
VON DER LEYEN: Polarization (ph), Europe giving me a top, polarization.
QUEST: There we go. And on -- how prepared we are?
VON DER LEYEN: And somewhere here. It's amazing, the answers that we are getting, the board that's developing, I am seriously, you know, concerned
over what one of our next guests is going to do with the board. I fear for the board's safety and future.
In just a moment as our Davos program continues, you're going to hear from Brian Moynihan, the CEO of Bank of America. They have the NATO Secretary
General, Jens Stoltenberg. You'll hear from their heads of the German and French central bank.
Oh, yes, yes, he'll be here as well. Let's hear from Cantor Fitzgerald. Howard Lutnick is with us after the break.
QUEST: US market's ahead here for a quite loss after the long weekend. Boeing is down sharply. It's all about its quality control. And analysts
from Wells Fargo say the FAA's investigation is likely to find new fault.
Look at Spirit, good grief, down 45% after a judge blocked its merger with JetBlue. And remember, JetBlue CEO Robin Hayes has said he is stepping
The triple stack shows the bigger picture across the broader market amid the latest bank earnings. You've got Goldman Sachs and Morgan Stanley, both
reporting lower annual profits, even though Goldman's Q4 blew away the estimates.
The CEO Bank of America says he's optimistic about this upcoming year. Brian Moynihan told me, US households are doing relatively well.
BRIAN MOYNIHAN, CEO BANK OF AMERICA: We asked you this time when I was on with it, we had a recession predicted, but they kept pushing out.
Now, what's that attribute to in the US is that particularly it's attributable to the US consumer. We have people who are making money, are
employed. Unemployment very low. They're getting paid more.
Inflation is still tough on a lot them, so you can't discount that. But on the other hand, the stock market being up, on the other hand, you know,
they've accumulated wealth. Other hand, they're making more -- a lot more money.
You know, our teammates are making a lot more money than they made in '19 just because of inflation and what we did. And all that gives more money to
spend. So in the end of day, that helps, but the American consumers, what pushed that recession out more than anything else.
QUEST: And as you balance that very positive .
QUEST: . American consumer, US economy, which continually surprises on the upside .
QUEST: . you've got these known-unknowns, if you will .
QUEST: . the Red Sea .
QUEST: . Gaza, and the Middle East. Is there any one of which could tip us completely in the other direction?
MOYNIHAN: And that's the wall of worry that -- you usually have your wall of worry up there. You don't have it this year, but usually -- look, if you
look out as the CEO, you got to think about what could happen in the Middle East, the Red Sea, and the shipping. You could think about what happens if
an escalation of Ukraine, Russia -- what happens in Taiwan. That bothers you. But the end of day, there's a lot of demand going on.
Now, our companies are feeding into that demand and making money. And so, it's a conundrum about how far in the future can depend on things. And that
will play out as we get through so much geopolitical tensions.
QUEST: Ah, political tension. Glad as you mentioned them. You said (inaudible) you got to get out of here without .
QUEST: . the Iowa caucus.
MOYNIHAN: I assume that might be it.
QUEST: Yes, absolutely. How concerned are you at the prospect of a second Trump presidency or maybe you're not concerned at all?
MOYNIHAN: We -- as I tell people, we've been around since 1784. That election in 1800, they made a great show about it called "Hamilton" and
So, you know, a CEO's job, a company's job is you're ready for anything. And whether it's -- no matter which administration of the prior Trump, the
current Biden administration wins, we'll be ready to go.
We'll ebb and flow of what happens, and the reaction sure will have impacts around the world, sure. But the job of us is to be prepared. And that's
what's neat about the US is the private sector, the state/local governments, everything functions, and the government functions.
And sometimes it's interesting, sometimes it's even more interesting, but the reality is we got to wait for the American people to decide and then we
got to go through.
QUEST: So does it bother you that there is a split -- that the country is split?
MOYNIHAN: Look, in the end of day, America, it'd be good if we had more unifying forces. There's many people that say that that's not news. And so,
we pushed the people in the middle because, at the end of the day, the US system of capitalism, entrepreneurship, innovation is what drives the whole
Pre-financial crisis, the American US -- the European-US economy is about the same side. American companies probably fit 80% bigger now, that's
because of our recovery power. And we got -- we can't forget that. We got to let the US economy, the private sector, but just got to have, you know,
the right motives and do it the right way.
QUEST: Even though in '24, the consensus is it's not going to be a banner year for investments.
MOYNIHAN: You know, in the end of the day, our team has the markets up for the year and things like that, but it was a pretty strong year last year. I
never thought it wasn't going to be such a good year.
We've made $100 billion at our company after-tax since the pandemic hit, and people thought the world was going to come to an end in March of 2020,
and it didn't. And so that's the power of the private sector, and employment, and everything going on. And so, we just got to keep driving
Now, for the next five days will be say no hand-wringing event where they will be worried about everything and you will learn more. And that's what
were here is to learn about people.
QUEST: Pick your pen.
MOYNIHAN: I'll be green.
QUEST: You're going to be green, right. So where are we in terms of, as a society .
QUEST: . companies -- whatever, how you want to define it .
QUEST: . I mean, the IMS says we're not ready .
QUEST: . and a lot of people say we're not ready, but where do you think we are between that?
MOYNIHAN: I think we're here because it has such unusual promise.
QUEST: Wow, yes.
MOYNIHAN: And that -- and so unprepared, not in a negative sense that we don't understand what it can do yet.
MOYNIHAN: Yes. And so, it's a .
QUEST: And which of these -- oh, you write your own if you've got (inaudible).
MOYNIHAN: Yes. I'd say understanding of power -- the power is the biggest issue I see.
QUEST: Really, that -- this is really its potential.
MOYNIHAN: Yes, we just .
MOYNIHAN: . we don't understand it, and by understanding the negative part of that and the positive part of that.
QUEST: That's -- in many ways, that's the fascinating bit, isn't it .
QUEST: . because we sort of don't know what it can do.
MOYNIHAN: We've seen what it might do. We've seen what it could do. And matter of fact, we use it in our company today to do certain very
controlled things, but that tells you it's pretty powerful. And so we just got to learn with it.
But like vaccines, like, you know, the car, there's a lot of things we had to learn about over the course of history, and we've got to learn about
QUEST: That's Brian Moynihan. I've had Howard Lutnick, the CEO of the Financial Services from Cantor Fitzgerald.
HOWARD LUTNICK, FINANCIAL SERVICES, CANTOR FITZGERALD, CEO: Great.
QUEST: He's not wearing a coat. He's bold and strong -- that guy runs back in America. No coat.
LUTNICK: That's very special.
QUEST: And I have this rule that whatever the guest is doing, I have to do, and thank God, you're wearing a coat. It's minus nine out there.
LUTNICK: It's cold.
QUEST: All right. Look, this year, how are you defining this year? Because so far, people -- besides Brian (inaudible), since he's we always cheerful
-- most people are saying it's going to be okay, but don't expect the gangbusters.
LUTNICK: Yes. I think the over-expectation of positive Fed cuts is just so ridiculous. It's sort of entertaining. Oh, the Fed is going to cut 175
basis points. Basically, that's built on the fact that there are too many young people with these opinions on television because, if you're 40,
you've never seen an interest rate. Your whole life, you've never seen interest rate.
When you're 62 like me, you know they're interest rates.
QUEST: And .
LUTNICK: You know it.
QUEST: . when you're 61, like me, you've covered every one of these cycles since Black Monday.
LUTNICK: Correct, we're not going to have a $34 trillion deficit and have the Fed cut 175 basis points. Fifty basis points, maybe, but that's about
So next year when I see you, it'll be -- I don't know -- 4.5, 4.75.
LUTNICK: That's about it.
QUEST: So how do you make money in this environment? You can't completely rely on crypto.
LUTNICK: Oh, no. Well, you know, look, I like crypto for a few reasons. I like two things. I like bitcoin because -- but I like bitcoin not because
it's a wonderful thing, it's because the emerging markets. So people think, like, oh, ETFs in America.
LUTNICK: Why would Americans buy bitcoin? Why would Americans use stable coins? They don't need it. It's silly. A matter of fact G7, it's silly.
But imagine if you lived in Turkey or Venezuela, or Argentina, anything is better than the Argentinian peso, which had 220% inflation. So if you own
bitcoin in your own tether .
QUEST: Providing .
LUTNICK: . you know what? It's good for you because it will protect you from that local inflation. So I like bitcoin and I like tether for the
emerging market people, not for G7, not for people in New York.
QUEST: Oh, but hang on a second. They are also the less financially sophisticated places where people can really be taken for a ride, pump and
dump, all sorts of other things.
LUTNICK: Look, I do it. You know what the worst thing you could do is wake up in the morning and by Turkish lira, and let's see in a year how you did.
You'll be down 60%.
If you own tether, which is in the dollar, you'll be stable. And if you own bitcoin, it'll be up or down, but you won't be down 60% .
QUEST: What purpose .
LUTNICK: . just by inflation.
QUEST: . but what purpose to these crypto serves besides this sort of speculative or -- you're saying .
LUTNICK: I just described it.
QUEST: . but you're saying they're a stable source of value. And if you look at bitcoin over the last two years, can you seriously say that?
LUTNICK: No, it goes up and down. Of course, it goes up and down. But, you know, stable coins, just remember, if you and I lived in Argentina, right .
QUEST: Why do you like -- why argue the (inaudible) .
LUTNICK: Well -- Vietnam or Turkey or all these countries that have lousy currency. Their lousy currency is where crypto is born to live, not the G7
countries. People have it all silly.
LUTNICK: We -- U.S. is just speculating.
QUEST: What about treasuries? Good old-fashioned treasuries and equities?
LUTNICK: Low interest rates.
QUEST: 40, 60.
LUTNICK: They're going to do great.
QUEST: 40, 60.
LUTNICK: I like equities. I like treasuries. The world is reasonably good here. I think treasuries are doing -- going to do better than equities over
the next year. I think equities are going to sort of bounce around, not so, sexy. They won't go down a lot. They won't go up a lot. Kind of boring.
QUEST: All right.
LUTNICK: What do you want me to do?
QUEST: I want you to choose a color.
LUTNICK: I'm always going to choose black because my companies, BGC and Newmark, see we live in the black. OK? You got to live in the black.
QUEST: Come over to the board. Now, in terms of A.I., now this is not whether you are using it, it's not if you like it, this is how far you
think society, global -- you know, we, you, me, everybody, are we ready? Do we have the regulation? Do we have the rules? Do we have the laws? Are we
dangerously unprepared or are we nailed it? Where are you?
LUTNICK: I think, I'm going to be more on this side. OK, I don't think the regulation stuff is really important. I don't think these things are --
QUEST: Any of the -- you would rather -- anything --
LUTNICK: What is this?
QUEST: These are the risks. Retraining, ethics, public codal uses.
LUTNICK: Well, what's with the risks? How about something good? Why can't there be something good? How about this? We can be more efficient. We can
be good. It can be positive. The world can be positive. It's good. A.I. is good.
QUEST: Glad to see you, sir.
LUTNICK: Great to see you.
QUEST: Thank you very much indeed. I appreciate it.
Now, the results are in from Iowa's first in the nation caucus. Why the Republican nomination process isn't a two-person race for the time being?
That's coming up next.
SCIUTTO: Nikki Haley says she is now in a two-person race with Former President Donald Trump. Just one issue with that theory, she placed third
in Iowa, narrowly behind Florida Governor Ron DeSantis. And of course, most importantly, neither one came anywhere near Trump. Even combined, they
trailed him. But the close race for the civil -- silver metal -- medal in Iowa could prolong a wider field of Republican challengers to the former
president, and that could conceivably make it easier for Trump to glide to the nomination.
CNN's Kristen Holmes, she is in New Hampshire. And Kristen, I wonder if, while Trump wants those other candidates out of the race, I imagine to
concede to him. On the other hand, he might see some wisdom or some benefit rather in continuing to defy -- divide the field of voters who prefer
KRISTEN HOLMES, CNN U.S. NATIONAL CORRESPONDENT: Yes. Look, this was the exact outcome that they wanted for the reason that you are saying. They
wanted Ron DeSantis to come in second, which is surprising given the fact that they spent months and months attacking him. But that's because of what
they saw in New Hampshire, which was Ron DeSantis doesn't have a ground game here. He is not polling above third place or in some polls even below
that. Nikki Haley, though, however, is a close behind Donald Trump in New Hampshire. This gives him the divide that he needed.
Ron DeSantis coming in second. Stops the momentum of Nikki Haley. Stops the narrative that Nikki Haley is having a surge. But, also slows things down
in New Hampshire. If Nikki Haley comes in second, he would still have Iowa.
So, he does like this ping ponging back and forth. And I will say, Nikki Haley saying this is a two-man race. It -- two things can be true at once.
One, it's not a two-man race, that's not what Donald Trump believes. However, when it comes to New Hampshire, he does believe that it is a two-
man race. They do believe that Nikki Haley is close. That she is racing in the polls and they have been spending an extraordinary amount of money
trying to stop that.
They have hit her on immigration. They have hit her on Social Security and Medicare. And they're going to continue doing that. Likely, we're going to
hear him say that in his remarks tonight, to go after Nikki Haley because they do believe she's doing well here. We have to remember, New Hampshire
is a completely different electorate than Iowa. Iowa, he was expecting to win Donald Trump, and he knew that Ron DeSantis would take voters from him.
New Hampshire, you have a lot of independents who can vote in a Republican primary, and those independents can identify as even more left leaning or
moderate. Those left leaning and moderate voters, those are the ones that Trump's team thinks are going to go for Nikki Haley. So, they're trying to
siphon off votes from that. Again, they do believe he has a grip on the Republican Party. They say they're confident in New Hampshire. But Jim,
they did add an entire week of events after they started seeing her rise in the polls.
SCIUTTO: We'll keep watching. Another race to come. Thanks so much.
Former President Donald Trump is on his way to New Hampshire now where he is expected to hold a rally tonight. He spent much of the day in a
courtroom in New York after that win in Iowa. His motorcade left the Manhattan federal courthouse just moments ago. A nine-member jury has now
been selected to decide how much money and damages he must pay the columnist E. Jean Carroll for defamation.
Our Kara Scannell is standing by. And we should note for viewers around the world that it's already been decided in this courtroom that Trump was
liable for sexual assault. The question now is financial damages for defamation for denying that in effect. I wonder, what are the money,
figures involved here, and how long do we expect this decision to take?
KARA SCANNELL, CNN CORRESPONDENT: Yes, Jim. So, the jury is seated. As you say, it's an anonymous jury of nine New Yorkers. And the judge had just
finished explaining to them what it is that this case is about and what they will have to find. And he told them, as you said, that a previous jury
already found that Trump had sexually assaulted E. Jean Caroll. And already found that his statements were defamatory.
So, the question for this jury is whether statements that Trump made in 2019 while he was president, those were very similar to the ones that the
prior jury had already found defamatory. So, the judge say that carries over here. But so, the question for this jury is how much, if any amount of
money, Donald Trump will have to pay E. Jean Carroll?
Judge saying there are two questions here. There's regular damages, that is -- was E. Jean Carroll harmed? And if so, how much money should she be
paid? And then the question of punitive damages, that is, should Donald Trump be punished for making the statements that he made as an effort to
try to deter him from continuing to make these statements?
Now, the prior jury had already found for both the sexual assault and the defamation that they awarded E. Jean Carroll $5 million. Carroll, in this
case, is seeking at least $10 million, in part for statements that Trump made just hours after that previous jury found their verdict when he was on
a CNN Town Hall and repeated some of the very defamatory statements about Carroll. Saying he didn't know her. That she made up her allegation of rape
So, that has already been laid out for the jury. It is a more narrow decision here than what we normally see in some jury trials. Carroll's
attorney has just started her opening statement, laying out the background of this case to the jury. Carroll is in the courtroom watching attentively.
Trump was inside the courtroom all morning for jury selection, but he left around 3:00 p.m. eastern time before opening statements got underway to
head to his event in New Hampshire.
But he did hear the judge overseeing the jury. He got to look at the prospective jurors. He was very engaged when they asked questions about
politics, spinning around in his seat to look at them. What we did not see was any interaction between Donald Trump and E. Jean Carroll. They have not
seen each other for decades. They were in the same courtroom for the first time today. We didn't see any evidence that they made any eye contact.
Now, once opening statements are completed, it will go Carroll's team's first, followed by Trump's team. Then they will get into the evidence. That
is likely to happen tomorrow. Jim?
SCANNELL: Kara Scannell, outside that courthouse, thanks so much.
And please do tune in later tonight. CNN will be hosting a Republican presidential town hall with Governor Ron DeSantis. Those are live pictures
from New England College in Henniker, New Hampshire where that event will take place. It begins at 9:00 p. m. local time. That's 2:00 a.m. in London,
3:00 a. m. in Central Europe. Lots to look forward to. Let's go back to Richard Quest in Davos.
QUEST: Thank you, Jim.
As we continue on "Quest Means Business". The head of NATO has been speaking about U.S. support for Ukraine and its commitment to the alliance.
We'll talk to Jens Stoltenberg in a moment.
QUEST: I have to say, me being cold, the (INAUDIBLE) has been beautifully clear days here in Davos as you can see from those magnificent pictures.
Now, the U.S. National Security Advisor, Jake Sullivan, has expressed optimism about providing more support for Ukraine, despite the problems
with Republicans who are holding up the aid. The White House has asked for $60 billion in new aid. President Biden set to talk it over tomorrow with
congressional leaders who are holding it up for U.S. domestic political reasons.
The NATO Chief is Jens Stoltenberg, and he told me he's confident that the U.S. will approve more money.
(BEGIN VIDEO CLIP)
JENS STOLTENBERG, NATO SECRETARY GENERAL: U.S. has provided an enormous amount of military support to Ukraine, together with European allies,
actually. Then, yes, I see that there are some disagreements but I'm confident that the U.S. Congress will agree a package for Ukraine.
QUEST: But this is sending a very damaging message from your point of view about Ukraine. President Putin sitting in Moscow is rubbing his hands in
glee at the fact that the U.S. is basically arguing internally over whether to provide more aid.
STOLTENBERG: So, I would like to see a decision in the U.S. Congress as soon as possible. Having said that, what happens is that there's continued
flow of ammunition and weapons going on to Ukraine from European allies. The U.K. just announced, the Germany announced, thousand new Patriot
interceptors from NATO allies, which are going to be contracted.
So, a lot of things are happening. And then in the meantime, I hope that the U.S. will find a way to agree the package for Ukraine.
QUEST: There is a feeling that Russia is, if not on the front foot, is certainly more balanced. It's got -- it's ramped up its domestic arms
production. It has made gains in the Donbass and it looks like it is increasing its attacks on Kyiv and other major cities. How are you going to
deal with that?
STOLTENBERG: You are right. It is a very serious and difficult situation on the battlefield. And there are no signs that Russia is going to plan or is
planning for peace. The answer is that we need to ramp up supplies to Ukraine because it's only when President Putin realizes that he will not
win on the battlefield that we can have a just end to this war.
QUEST: I realize you may have left by the end of this year. Your contract is open, I think, in October --
QUEST: -- unless there's -- are you going to renew? Are you going to --
QUEST: Are you going to seek a renewal?
STOLTENBERG: No, no, no.
QUEST: An extension?
STOLTENBERG: No, no, no.
QUEST: Another year?
STOLTENBERG: No. And I've been at NATO this full of -- for 10 years.
QUEST: I set that up elegantly because it means that if Donald Trump wins the presidency, you won't be there. So, you don't have to necessarily deal
with the consequences of that. Would that be damaging for NATO if Donald Trump becomes the candidate and then goes on to win the presidency.
STOLTENBERG: It's not for me. It's not for NATO to have any opinion about who's going to be elected as president in any NATO ally, and that includes,
of course, the United States. But I'm confident that regardless of the outcome of the presidential elections this fall, the U.S. will remain a
staunch member of the alliance because it is in the security interest of the United States to have a strong NATO. It's strong by parts in support
for NATO in the United States. And we have to listen carefully.
The criticism is not mainly about NATO. It's mainly about NATO allies not spending enough on NATO. And the good news is that NATO allies, the
European allies and Canada have now really started to increase defense spending. So, we have a good story to tell about fairer burden sharing
within the alliance.
QUEST: The reality is that the leading candidate is still hell bent on a withdrawal from NATO in some shape or form.
STOLTENBERG: No, what I hear is a clear message about European allies have to invest more in defense, has to spend more. And that has been a
consistent message from different U.S. administrations.
QUEST: Decide a color.
STOLTENBERG: I think I'll do the blue one.
QUEST: Blue's very popular this year.
STOLTENBERG: It's a NATO color, you know.
QUEST: It's everybody's color, it seems. Right. Come over here, Secretary General. Now, the INS says, we're not ready, we're woefully unprepared.
Where do you think we are as a society for the advent of A.I.?
STOLTENBERG: I think NATO as an alliance, we are working hard on A.I., and we realize the big potential for our armed forces for security.
QUEST: Where are you going to go.
STOLTENBERG: So, I think something like there.
QUEST: Oh --
QUEST: -- you're much closer to the middle.
STOLTENBERG: Yes, but I think we actually work hard on this.
QUEST: And the reason? You can add security, go on.
STOLTENBERG: Security. That's --
QUEST: That's a big problem.
STOLTENBERG: A big problem, but also a big opportunity. I mean, the thing is that, for instance, when it comes to our drones, to our intelligence, to
our -- the way we message and manage information, we already use A.I. in a very important and good way.
(END VIDEO CLIP)
QUEST: Breaking news to bring you. Reports of an explosion in Ibadan in Nigeria, it's the country's third largest city. The local authorities are
urging the residents to remain calm, and they are investigating what took place. And when we find out more details, we will of course bring that to
"Quest Means Business" tonight from Davos. When we come back, what the governor of the Bundesbank says about a second Trump administration.
(BEGIN VIDEO CLIP)
JOACHIM NAGEL, BUNDESBANK PRESIDENT: It would be a challenge for Europe if that might happen. But first of all, it gives me a clear indication that we
Europeans, we have to find our own policy. Getting resilient.
(END VIDEO CLIP)
QUEST: The head of the Bundesbank says rates are high enough to bring inflation back to target. Germany's economy actually shrank slightly last
year. We found out today that annual inflation rose in December to 3.8 percent. Yet Joachim Nagel told me the final stretch of the inflation fight
will be the toughest.
(BEGIN VIDEO CLIP)
NAGEL: I think at the beginning I said fighting against the inflation is like a marathon. And so, I would say we made more or less 50 -- maybe 75
percent of this marathon. So, we did a lot, but there's something left we do have to do.
QUEST: Do you battle on through to the last one percent that -- to hit target of two percent? Where do you stand?
NAGEL: This famous last mile but this is a little bit more than 75 percent. But I say -- well, the famous last mile is the most is the most difficult.
So, we have to stay stubborn and don't be too -- let me say, too over optimistic to talk too early about haircuts. I think -- interest rate cuts.
I think it is much too early. So, we should keep our, let me say stance, and keep with the interest level where we are, and then we have to check
the data. This is so simple and it is so complicated at the end.
QUEST: The rates as they are at the moment, are you confident at this rate eventually it would bring it down to two percent?
NAGEL: I think coming back to my point, when we not cut too early, yes, I believe that the current rate level will be sufficient at the end to bring
us down to two percent.
QUEST: When -- President Lagarde said the other day that the election of Donald Trump or -- a second Trump presidency would be negative for Europe
because of values, not on political grounds, but because of values. Would you sign up to that same statement?
NAGEL: I think for me, personally, yes, Christine Lagasse is always right. So, I would say, well, it would be a challenge for Europe if that might
happen. But first of all, it gives me a clear indication that we Europeans, we have to find our own policy getting resilient. And I think this is one
of the things we have to -- this is part of part of the homework we have to do.
(END VIDEO CLIP)
QUEST: Now, one of Nagel's colleagues on the European Central Bank Governing Council is arguably a bit more dovish. Doesn't like that phrase
though. The Bank of France Governor Francois Villeroy de Galhau, he told me a rate cut is on the horizon.
(BEGIN VIDEO CLIP)
FRANCOIS VILLEROY DE GALHAU, GOVERNOR, BANK OF FRANCE: Look where we were one year ago. We feared in Europe to have a trance recession and inflation
settled. And we will probably avoid both of them. This is why I said, the situation is not that bad and we can be more confident. So, our next move
will be probably a rate cut.
You know, it's a bit more like a tennis match. I don't know if you are a tennis player, but in tennis match it's about winning sets and steps. If we
were in soccer game, in a soccer match, it's about fixed timing, but we are driven not by the timing, not by calendar, but by data.
QUEST: So, if you want to really hit that target, an early rate cut would jeopardize it.
VILLEROY DE GALHAU: No, our target is very clear. It's two percent and it won't change. And we will probably reach this target, let's say by next
QUEST: But can you --
VILLEROY DE GALHAU: But bearing major surprises.
QUEST: Can you reach --
VILLEROY DE GALHAU: And our rate policies will be consistent with this target because we have one compass and only one compass. It's price
QUEST: Can you reach target in a reasonable time and still have a rate cut this year?
VILLEROY DE GALHAU: Probably yes. And again, I don't want to say about the season, but it will be driven by data. Let me be somewhat more specific. It
will be, data should show us that the inflation outlook is perfectly anchored around two percent.
QUEST: You don't feel that you're slightly more dovish than, say, others, like maybe the Bundesbank in terms of the view?
VILLEROY DE GALHAU: I don't like this categorization, Richard, between doves and hawks. I'm not a bird. I'm a pragmatist. So, I look at real
economy and data. And believe me, we will deliver on the two percent target at the latest by next year.
(END VIDEO CLIP)
QUEST: Excellent to hear those views. And you'll hear more from the central bankers later this week, including their opinions on A.I. We'll take
"Profitable Moment" after the break. "Quest Means Business" live in Davos.
QUEST: The whole question of A.I. is fascinating. Tonight's "Profitable Moment" is short, brief, and very much to the point.