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Quest Means Business

McConnell To Step Down As Senate Republican Leader; Biden, Trump Win In Michigan, But Results Raise Concerns For Both; Interview With Rep. John Larson (D-CT); Out-Of-Control Wildfires Threatening Thousands In Texas; U.S. Treasury Turns To AI To Combat Increase In Fraud; Warm Winter In Italy Leaves Ski Resorts with No Snow; FAA Gives Boeing 90 Days To Make Quality Control Plan. Aired 3-4p ET

Aired February 28, 2024 - 15:00   ET



RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Middle of the week, and the markets are open and doing business in New York. We have

an hour left to trade. It had been down throughout the course of the session, but as you can see, we are just paring those losses. I suspect

we'll stay in this sort of range between now and the top of the next hour when the closing bell rings.

The markets, events that you and I will digest. There is going to be a changing of the guard in Washington. Senator Mitch McConnell announces he

will step down as leader of the Senate Republicans.

Apple has reportedly pulled the plug on its electric car dreams. What does that mean?

And regulators are giving Boeing 90 days to come up with a new quality control plan. We will discuss.

We are live in New York. It's Wednesday. It's February the 28th. I'm Richard Quest, back in New York, where I definitely mean business.

A very good day to you.

We begin with US politics that are about to get a great deal more complicated. Senator Mitch McConnell is stepping down in November, after

his record tenure as the leader of the Republicans in the Senate.

He is one of the few Senate Republicans or few Republicans that prevent Donald Trump from completely taking over the party. He has refused so far

to endorse the presidential candidate for now, one might say. And Senator McConnell said he made the decision following his sister-in-law's death in

a traffic accident this month.

The senator turned 82 last week. He said age was also a factor.


SEN. MITCH MCCONNELL (R-KY): Father Time remains undefeated. I'm no longer the young man sitting in the back, hoping colleagues would remember my

name. It is time for the next generation of leadership.


QUEST: Manu Raju is there in the halls of Capitol Hill.

He wasn't pushed, and he sort of didn't jump. It was an inevitability perhaps. I don't know. Give me your interpretation.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes, look. This was not surprising and also a shocking decision at the same time. Shocking because

he has been someone who has just been the dominant figure within his own conference for almost two decades driving the party's strategy, really

reshaping the country in major ways such as how he handled the Supreme Court confirmations here in the United States, has had such a significant

role essentially affecting every Americans life.

Also had been a key player in this past Congress pushing for aid to Ukraine, which has put him on the opposite side of many Republicans in his

own conference, but also he has also faced increasing criticism with his own conference.

He has been on the opposite side of Donald Trump in the aftermath of January 6th, and of course, he's 82 years old. So many people thought this

was going to be his final year as Republican leader, but even his critics, including one senator that I spoke to just moments ago, Senator Ron

Johnson, who I asked who has in the past called for new leadership acknowledges the difficulty that McConnell has leading his conference and

also says there's going to be a big fight to succeed him.


SEN. RON JOHNSON (R-WI): It's hard herding cats. I think McConnell's supreme moment of leadership is after Scalia's tragic death, he made the

announcement. We're going to let the American people decide the direction of the court. I think that was the right choice.

RAJU: You've been sharply critical of him.

JOHNSON: You know, I appreciate the fact that his announcement now to give our conference the time to really sit down and decide what our mission

needs to be, what are our goals, and kind of in one sense, I'd say I think what the Republican Congress and the Senate ought to do is we need to be

the counter to the radical left agenda that is destroying this country.


RAJU: And the three Republican senators who are likely to try to succeed him are senators John Thune of South Dakota, he is the current number two;

Senator John Barrasso of Wyoming, he is the current number three; and Senator John Cornyn of Texas, who used to be the number two, but is still a

senior member of the Senate Republican conference, all of them -- none of them have said officially that they will run, but it is expected that they

will run, maybe some others will and this will be a secret ballot election that will occur after November.


So it is anybody's guess how that could shape up, but whoever wins will have significant influence in driving the party strategy for either the

current president in a second term or a new president in the next term.

QUEST: For those viewers and myself who are not so familiar with the three that you've just mentioned. And these are my words, in a sense, do they all

seem reasonable people? Do they all seem as if they are, you know, they can see both -- I mean, the Senate tends to be more consensus generally, the

more deliberative body, but do we see any right wing or far right wing or highly conservative views amongst those three?

RAJU: Well, no, there is no doubt that they are all conservative members who have had both pragmatic streaks and partisan streaks in their own

right. Senator John Cornyn, for one, helped negotiate a bipartisan gun deal, didn't go as far as a lot of advocates have won in terms of gun

control, but have had new gun restrictions and changes that actually anger some folks on the right. He is one who has worked on bipartisan issues.

John Thune, number two Republican voted with Mitch McConnell in pushing for more aid for Ukraine; Senator John Cornyn did as well. Senator John

Barrasso voted against providing more aid to Ukraine, but he has worked with Senator Joe Manchin, for instance, on the Senate Energy Committee.

So they've had some instances where they've worked together. The one interesting thing will be how they would deal with the former President

Donald Trump who is the likely Republican nominee and whether he will eventually of course be president again.

McConnell had been in battles with him for some time. Thune is at a bit of a rocky relationship with Donald Trump, he just did recently endorse him.

Cornyn has had been a little bit in between and Barrasso has aligned himself more with Trump.

So that will be an interesting factor here, but senators I've talked to, Richard say that will not necessarily dictate their vote on who the next

leader should be come November.

QUEST: Manu on Capitol Hill. I am grateful to you, sir. Thank you.

Voters in Michigan sent a warning sign that President Biden's stance on Israel could cost him dearly in November. More than a hundred thousand

Democrats voted "uncommitted" in the party's primary on Tuesday.

Grassroots organizers have encouraged people to do that, to protest against Biden's handling of the war. Democrats in Washington are now sounding the



RAJU: Are you worried that these voters are not going to show up in November?

SEN. DICK DURBIN (D-IL): I am worried. It is important that the people who voted uncommitted in the Democratic primary be persuaded to join us in

November. We need them for a victory.

SEN. RICHARD BLUMENTHAL (D-CT): I'm deeply concerned about this election and about holding together our coalition because there are a lot of issues

that need to be addressed. We can take nothing for granted. This will be a hard fought election, and we need every single vote.


QUEST: Harry is with me, Harry Enten.

Harry, can we directly tie the uncommitted to the Gaza issue?

HARRY ENTEN, CNN SENIOR DATA REPORTER: I don't think so. You know, I like to look at history, right, Richard? That's a big -- I'm big fan of history.

I know you are as well.

If you go back to 2012, there was a Michigan primary contest. Barack Obama was the incumbent Democrat, uncommitted got about 11 percent, and now

uncommitted has got about 13 percent. That's not much of a difference. And obviously there wasn't what was going on in Gaza back then, at least not

Israel and Hamas going out in the way that they're going right now.

So I'm actually more skeptical, I think than most that this uncommitted vote says a lot about the Democratic Party. I will say Joe Biden has a lot

of problems going for re-election, but the idea that yesterday made me think he had more problems than I thought on Monday, that ain't the case.

QUEST: All right, so let's talk about age. McConnell is off. He is 82. For whatever reason Biden continues, Trump continues. At what point does age

become the issue, if it's not already?

ENTEN: I think it is already the issue. I mean, look, we've had in voters' minds an economy that isn't great, but one that's improving and yet Joe

Biden's poll numbers are not improving at all.

And if you ask voters what they think about Joe Biden's age, is he too old to effectively be president? Four years ago, the majority said he was not

too old. Now the vast majority, 71 percent across six swing states according to the New York Times/Siena College Poll, believe he is too old

to effectively carry out the job as president. That to me is the number one reason that Joe Biden is trailing Donald Trump right now.

I know a lot of people will point out that Trump's fairly close to Biden in age, but the fact is, perception is everything in politics, and voters

perceive Trump to not be too old and they perceive Biden to be too old.

QUEST: Now I realize it's always -- I am not asking you to be a Democratic strategist in this sense, but bearing in mind what you've just said, he is

not -- unless it is that movie, "The Talented Mr. Griffin." He is not going to go backwards in age therefore, I don't know -- what does one do?


ENTEN: You know, he is not Benjamin Button, there's another movie reference for you.

What does one do? Well, if the perception is, is that you're too old and you're too feeble, you have to prove to people that you're not. You have to

go out in public. You can't just run a garden strategy.

You have to do interviews, like he did earlier this week with Seth Meyers on NBC.

QUEST: Right.

ENTEN: So to me, I would go out, attack it head on. Look, it may not work, but it certainly can't work any worse than it is right now.

QUEST: You're a real gentleman. Mr. Enten? You really are. You knew that I had completely got that last one wrong, and if it is Benjamin Button, Mr.

Ripley, of course, was the con man, but you were far too delicate, and far too gentlemanly to shove it in my face and tell me I was wrong.

ENTEN: Of course, I would never try and speak back to you on your own show, Richard. I am a guest in your house, and therefore, I will correctly

politely correct you and not just shove it right up into your nose.

QUEST: Harry, always a pleasure. Thank you very much indeed. My producer had no such qualms when she told me in my ear that I had got it wrong.

President Biden is also contending with the prospect of a partial government shutdown, as if that wasn't enough. Lawmakers have until Friday

to pass a spending bill that will keep the US lights on. Democrats and a fair number of Republicans also want to get more aid to Ukraine.

The House Speaker Mike Johnson says Washington must address border security before sending money overseas. Put all this together and I'm very grateful

that the Democratic Congressman John Larson is with me from Connecticut.

Congressman, good to see you, sir.

Wherever I look --

REP. JOHN LARSON (D-CT): Good to see you, Richard.

QUEST: I see -- wherever I look, sir, I see the Democrats in something of a very difficult situation at the moment, whether it's on aid, whether it's

on Ukraine, whether it's on Michigan, are the wheels coming off the wagon?

LARSON: Well, I think that Congress has always faced challenges, and clearly, we face a challenge this week in making sure we have a continuing

resolution, primarily because the Republicans have not got their act together.

Your earlier segment, you talked about Mitch McConnell, rightfully so hopefully, he's been able to get across to Speaker Johnson that it is not

in the best interest of the country, number one, or neither the Republicans or Democrats that there be a shutdown of government, but rather we do the

work of the people and make sure that these significant agencies don't go without money that would otherwise impact every day average citizens of

this country who depend on their government.

QUEST: The position in Ukraine is getting extremely dangerous and serious for President Zelenskyy.


QUEST: He summed it up last week, he cannot win without US military support and further aid. He was quite clear about this. At what point do you think

the House is going to say we have to do something here or he will otherwise? Or maybe they don't?

LARSON: I sincerely hope this week, because you're absolutely right and again, I would point to the Republican leadership and point to Mitch

McConnell again. You know, he announced that he is not going to run for Republican leader, but he has been in the forefront of the Republicans

trying to drive common sense to them, that a valued ally like the Ukraine, desperately needs the help of the United States of America.

I can't imagine that we won't do this. But again, Speaker Johnson's got to make up his mind that he wants to put this before the body, it will go for

it, there will be -- the numbers are there to pass it with both Democrats and Republicans. It's already received a large vote in the Senate.

Let's get -- let's do this for the Ukraine people, for our valued ally and stand up to the Russians for a change.

QUEST: The speaker says we must take care of America's needs first. He is referring to the border and the border issue. I mean, one could arguably

say it is always political blackmail, if you don't give me this, I won't give you that, but the stakes are too high for this.

LARSON: None only are they too high, but this is America's interest as well. Freedom has always been at the core of America's interest and we are

the kind of nation, the preeminent economic and military power in the world that can do both. We can walk and chew gum and we can also make sure that

we're taking care of the needs on the border and the needs here at home and also make sure that we stand by our allies and defend freedom around the

globe, stand united with the rest of the Europe and demonstrate this.


QUEST: Congressman, you say stand with allies, but can I put it to you, that you -- I could rephrase that as being, stand by your word, because I

had just been on my own travels through Australasia, through the Gulf, and again, and again, you hear, particularly on Ukraine, oh, here we go again.

The Americans promise right at the beginning, we'll be there, but that went up -- when push came to shove, they made it domestic politics first and

they didn't really give a flying about anybody else.

LARSON: Well, I stand corrected by it, because we should stand by our word and we have given our word and the president's word has got to mean

something, and I think the concern on the part of the Republicans and on the part of Donald Trump is to discredit President Biden and to discredit

his word.

Rather than focusing on the common concern that faces our nation, our European allies and the people of Ukraine, all of which are equally

important, both in the short and long term to Americans, along with making sure you stand by your word.

QUEST: Congressman, I'm so grateful to have you. Please, you do have a standing open invitation to come back on QUEST MEANS BUSINESS. Certainly --

LARSON: Richard, I look forward to it.

QUEST: As we move towards election times, we're certainly going to need you to talk as through.

Thank you, sir. Very grateful.

Now, QUEST MEANS BUSINESS from New York. Coming up, markets are hoping the Fed can engineer a soft landing. Some believe it's already happened. This

gentleman who you're now seeing says there may be no landing at all and when there is a landing, it could be a lot harder than anybody wants.

He's the Citi's chief economist. He is Andrew Hollenhorst. He will be with me after the break.

Andrew, don't move a muscle. Be with you in a moment.


QUEST: US economic growth was slightly lower than originally forecast with GDP revised at 3.2 percent in Q4. It is down from 3.3, so it is a very

minor change, but it is -- all given in the -- depending on your point of view the right or the wrong direction.

The Commerce Department said consumer spending was higher and that was offsetting a drop in private inventory investment.


The chief executive of Goldman Sachs has issued a warning saying markets are overconfident about the chances of a soft landing.

Now, that version of what my next guest is talking about, the possibility of no landing, the idea that inflation will never reach its two percent

target rate.

So for instance, you've got energy shocks from the Red Sea disruption, that is keeping energy prices marginally higher than they would have been

otherwise, bearing in mind economic growth.

You have shelter costs which remain stubbornly high. You get extra two points, if you know where this came from, @RichardQuest on Twitter, of

course. You know where that's coming from, but the shelter cost is very much, and then then the political risk with an election approaching in


Now, if you balance all of these items together, then you end up with a situation where, arguably, a soft landing is the least likely scenario

right now, notwithstanding the fact that the IMF managing director believes it is already here.

Instead, Citi is predicting a recession starting in the middle of this year, and the chief US economist, Andrew Hollenhorst, joins me now.

How do we, Andrew, get from growth of over three percent to two quarters of negative growth within such a short period of time?

ANDREW HOLLENHORST, US CHIEF ECONOMIST, CITI: Well, we still have a ways to go to get there, Richard and what we're looking at right now really is

inflation that's elevated, and that plays into why the economy slows down.

If you listen to what Fed officials are saying now, they're talking about patient, deliberative, methodical, in terms of lowering interest rates and

this is what we've seen historically, in cycle after cycle when inflation becomes elevated, interest rates stay higher. And that effect of interest

rates slowly, but surely works its way through the economy, slows the economy, and usually leads to a recession. And we think that those same

dynamics will play out again, and we're still waiting to see that really kind of materialize later this year. Right now, we're more in that phase of

inflation, that's too high.

QUEST: All right, but that assumes then that we haven't seen the full effect of the monetary lag as a result of the pre-existing interest rate

rises. In other words, if they don't do anything, I mean, the argument is that the current rate rise is all baked in.

HOLLENHORST: So I knew you were going to bring this up the long and variable lags of monetary policy. We can't have this conversation without

discussing them and I think what we found in this cycle is that that lag has been quite long and that is partly because you have things like

individuals, households that have 30-year fixed rate mortgages. They have locked in low interest rates, so the Fed raises the overnight interest


But if you're locked into that low rate mortgage, it's not really affecting you. Who is it affecting? If you're exposed to credit card debt, it's

affecting you. And we're seeing those delinquencies rising. So we are starting to see some of those effects. But this is an economy that came

into -- it is somewhat insulated from higher interest rates.

QUEST: You see, that's the difficulty here, isn't it? Because we should have been seeing the evidence of slowdown besides inflation. We should have

been seeing the tick up in unemployment, which is always one barometer. We should have been seeing all of these other normal barometers of monetary

tightening effect, we haven't, which has led this idea to somehow the rules of the game have changed.

HOLLENHORST: Exactly, I don't know that they've changed. I think they're just playing out on a different timescale and we did have a lot of

confounding factors. One of the big ones was government spending, government support that helps support the economy over the last couple of

years that also led to higher inflation over the last couple of years.

Now we're seeing deficits that are still large, but they are not expanding the way that they were. So that source of support will be less there.

We had savings. We built up excess savings that built up and that's still there for some households, but again, for those households exposed to

credit card debt, for instance, those savings have been run through. So it really is a difficult scenario to analyze from an economic perspective. I

think we'll see more of those signs as we continue through the months here.

QUEST: So do you think that what might happen in the US is what we are already seeing in certain key European economies. Let's take Germany for

example which is now responding to the ECB's rate rises, the BOE's rises in the UK. We're now seeing the UK in an albeit shallow recession, is that the

no landing scenario you can anticipate?


HOLLENHORST: Yes. I think that is indicative of the kind of thing that we might see in the US and the US is coming into this with very strong

domestic demand and I think that's an important difference between, say, the US and Germany, for instance.

But as interest rates stay higher, that is putting this downward pressure on activity that should slow activity, and the fact that we have a number

of countries around the world that are in technical recession, I think that should give us some pause when we are coming out there or markets are

pricing that this is a soft landing scenario. For those countries that are in a technical recession, it is certainly not a soft landing and I think

that does say something about what transpired in the US.

QUEST: Right. Just one final quick, quick question for you, Andrew. When you make this sort of forecast, do you ever sort of have a bit of a

nervousness about it? When you start to sort of outlie to what everybody else might be saying or thinking, do you ever think, oh, well, oh, we

better get this one right.

HOLLENHORST: You know, as an economist, you're always thinking about why you might be wrong. We try to challenge our assumptions, think about where

we might be wrong.

But if the rest of the pack is going one way, and we're going the other way, that doesn't change our conviction.

QUEST: I'm looking forward to the year, the months ahead. You and I are going to talk a lot more about this.

Great to see you, sir. As always, thank you.


QUEST: Apple wanted to build a car, an electric car. And now it's saying, well, we think we are not going to bother.

Reportedly the project, which was conceived in 2014 autonomous driving electric vehicles were going to dominate the future. As we now know, EV

sales have slowed, car makers have pulled back their EV investments, the competition is intense, and Bloomberg is reporting many employees working

on the Apple project will be moved to AI instead.

Clare Duffy is with me. Are they giving up or not?

CLARE DUFFY, CNN BUSINESS WRITER: I think they are, Richard.

I mean this project titan, this ambition for Apple to build a car has always felt sort of like an on again off again thing over the past decade.

We would not hear about it for a little while for months or years, and then Apple would hire an executive from Ford or BMW or file for a patent for car

related technology or maybe it would get a permit in San Francisco for testing one of these vehicles.

Now it appears that Apple is finally giving up, saying goodbye to this car project and I think there's probably two main reasons for that. The first

is that the margins on the car were never going to be as high as on Apple's other flagship products like the iPhone.

And second, as you said there, the EV market has really changed from just how exciting and flashy it was a couple of years ago. You have

disappointing sales numbers, growing competition, and then on top of that, Apple is now signaling that it's going to invest more in artificial


And I think that seems like a much more sensible, lucrative area to be investing in for the future. Artificial intelligence technology would

benefit Apple across all of its products, rather than just having this one product that you know, would maybe get some new customers into the Apple

ecosystem, but AI is going to be really beneficial for all of the Apple products.

QUEST: So, if they do abandon this, one assumes they've learned various things which they can use elsewhere, but it's been a very expensive folly,

if you will.

DUFFY: Yes, I mean, it has been no small investment for Apple. But I do think it's not been a total bust. Apple does have CarPlay, the software

that syncs with its devices that's now widely used across passenger vehicles. It does have a number of other car-related patents. So in theory,

I could sell that technology to carmakers.

And look. I mean, I do think that shareholders had really been wanting to hear from Apple about its plans in the AI space. I think if Tim Cook had

walked out today at Apple's annual shareholder meeting, which happened a few hours ago, and talked about cars, instead of AI, you would have had

some disappointed shareholders.

I think this is the area where everybody has been focused, Apple's competitors -- Google, Microsoft, Meta -- talking much more about AI than

Apple has been. And so I think that Apple needed to signal that no, this is the direction it's going in along with everybody else -- Richard.

QUEST: Clare, I'm grateful as always, thank you.


Texas is dealing one of the worst fires in its history. The authorities there are describing destruction in each and every direction, in a moment.



RICHARD QUEST, CNN INTERNATIONAL ANCHOR: And I'm Richard Quest. Together we've got a lot more QUEST MEANS BUSINESS.

We're going to explore how the U.S. Treasury is using AI in its efforts to combat fraud. And U.S. regulators have given Boeing 190 days to explain on

how it's going to address this systemic quality controls issues.

We will only get to those stories after the news headlines because this is CNN, and on this network, the news always comes fast.

Pope Francis is back at the Vatican after a brief hospital visit earlier today. The Vatican says that the 87-year-old pontiff had diagnostic tests.

As a result, he had to cancel several audiences earlier this week. The Vatican said at the time he was dealing with mild flu.

President Biden's son Hunter has been in Washington for closed-door testimony with U.S. lawmakers. Part of the larger impeachment inquiry into

his father. So far it failed to present solid evidence that President Biden illegally benefited from his family's business adventures.

Disney and Reliance Industries have announced a media merger in India. It's worth $8.5 billion. The joint venture is going to combine Reliance's Viacom

18 with Disney's Star India. It has a reach more than 750 million viewers. Reliance will investment nearly $1.5 million in the company. It will take a

63 percent stake.

A New York appeals courts expected to rule soon on whether to pause the $454 million judgment against Donald Trump until his appeal in the civil

case is finished.


Lawyers for the state say the former president hasn't proved he has liquid funding to cover the judgment.

After a backlash online Wendy's now it says it is not planning to raise menu prices in times of peak demand. On a recent earnings call, the fast-

food chain's chief executive said Wendy's may test so-called dynamic pricing, otherwise known as surge pricing, next year along with other

changes that are powered by AI.

Texas is battling its second ever largest fire. It's now burned through more than half a million acres. That's around 200,000 hectares. One town is

asking for help after flames brought down its water system. And the authorities are describing homes that are being burned in every direction.

Ranchers are warning about the impact on agriculture.

Lucy Kafanov is in Fritch in -- I think I've got that correctly pronounced. Fritch in Texas.

And so this sounds pretty dreadful, very dangerous, and is going to be extremely difficult to put out.

LUCY KAFANOV, CNN CORRESPONDENT: That's right. And that fire still spreading. That number of the acres that are on fire right now jumped to

850,000 acres. That is huge. It's more than the size of two Londons put together. That fire only 3 percent contained.

Now we are in Fritch, Texas. This is in Hutchinson County. That's been impacted by one of the five fires burning through this area. Residents had

to get evacuated from here on Tuesday when the flames roared through, destroying structures, burning through some of the farm areas here. Some

residents are being allowed to return to their homes. Some are lucky they're finding their structure standing. Others less so.

We spoke to one homeowner who said that the fire destroyed his street in a matter of 30 minutes. Nothing left standing, just his home. Nothing across

the street remains. People had been forced to evacuate from all of these different areas.

And one of the difficulties, Richard, in battling this fire, you know, you talked about the ranches and the farmland, what makes this area so great

for ranching is that there's all this low grassland, OK. That's great food for the cattle. What makes it so difficult for firefighters to get the

flames under control is the very same thing.

QUEST: Right. So --

KAFANOV: There's nothing to block the flames from jumping across.

QUEST: All right, so, to put this out, you can do one of several things. You can fight the fire. Well, this sounds like it's massive and would take

an enormous amount of fire retardant. You can let it burn. That's going to be highly dangerous and can continue. You can just wait and pray for rain

or build fire breaks or things like that, or a combination. What are they doing to try and put it out?

KAFANOV: They're doing a combination of all of that. The prayers for rain might be answered as early as tomorrow. However, that rain might not last

long enough to make a significant dent in the fire. We are also expecting that the winds could pick up after that weather front moves over. And so by

weekend, it is possible that things could go back to square one, that the fire could burn out of control again.

Now they are trying to dig lines, but again, it's hard in this kind of terrain as you can see. And as for a fire retardant, they didn't have those

resources available to them. Yesterday when those flames are really sweeping across the grasslands here, the winds were simply too strong to

get a plane up in the air. They are hoping to have those resources available by Friday. But who knows whether that's going to be too late --


QUEST: Very glad you're there, Lucy, and we'll talk more in the days ahead and see how this thing progresses. Thank you.

The U.S. Treasury Department says it's using AI to combat a growing problem with fraud. The technology has helped it recover more than $375 million

last year. It's been years since 2022 and it's the first time officials have publicly acknowledged.

You see, this is how it works. AI can flag suspicious transactions in real time, much faster than humans. Banks and payment companies already doing

something similar.

Matt Egan is in New York.

Matt, we always sort of raise an eyebrow when AI is mentioned, but you know and I know that AI is now de facto part of every bit of software in some

shape or form. But this fraud aspect is something very interesting.

MATT EGAN, CNN CORRESPONDENT: It is very interesting, Richard, and I'm told that it's been a game changer for the federal government. So starting in

late 2022, the Treasury Department quietly started using ai powered fraud detection.


And this was really designed to try to catch fraudsters who are trying to steal money from taxpayers. And it is paying dividends, especially when it

comes to the growing problem of check fraud. Treasury officials tell CNN that since actually just during fiscal 2023 alone, that this technology did

allow the government to recover $375 million that led to multiple arrests and an easy way for them to combat check fraud, which is up by 385 percent

since COVID.

We know that fraud in general has been a problem since COVID. And now the federal government has this new weapon to try to fight back.

QUEST: Yes -- no, we haven't briefed to talk about this, but you're knowledgeable enough on the whole subject that I can throw this at you. If

they're using AI for fraud, it's not a million miles from the IRS, the tax authority, to be using AI, which I'm sure they already are, against you and


EGAN: Well, you're right that the IRS is using AI. Back in September, the IRS said that it's going to start using artificial intelligence to comb

through complex financial filings, tax filings, specifically ones from financial firms like hedge funds. And they are using this technology to try

to find tax cheats.

Now whether or not they're using it for individuals, individuals like you and I, certainly not me I don't think, but, you know, that is something

that we could -- maybe you, Richard. Not on this level.

QUEST: No. No, what I mean is, you know, the AI, as I understand, I mean, it looks at patterns, it looks at -- like with this check fraud. The whole

point of AI is it can spot the inconsistency either with my return or your return vis-a-vis the million other people who are in the same category.

EGAN: That's right, Richard. AI's superpower is its ability to comb through vast amounts of data and spot patterns and anomalies, and do it at

lightning fast speed, faster than anything that humans could possibly do. I mean, one security CEO told me that once you train these AI models, they

can spot problems in milliseconds. And so that means that now, powered by AI, the federal government can spot red flags, alert banks, and actually

stop these fraudulent checks from ever being cashed.

I mean, it feels like something out of a sci-fi film, especially the Tom Cruise movie, "Minority Report." And Richard, I think the craziest part

here is that the AI revolution is really just getting started.

WHITFIELD: Got it in one, Mr. Egan. We are not even at, to use that American phrase I think, first base. In fact, I'm not even sure that we've

come out of the changing rooms yet in terms of AI.

Good to see you, sir. It's a treat and a pleasure as always. Good luck with your return this year. I thank you.

EGAN: Thanks, Richard.

QUEST: The FAA, that's the aviation administration, it's given Boeing a deadline. And Boeing now has 90 days to come up with a plan to address its

quality control problems, in a moment.




QUEST: Now it's the middle of winter in the northern hemisphere. I know that because I've been in the southern hemisphere. And you might not be

able to tell so by looking outside.

Live picture, it's rainy. It's 14 degrees Celsius, but you can actually at least see the buildings. And I'm assuming that is a live picture because it

looks extremely clear and delightful. The average temperature this time of year is around seven degrees Celsius. Even warmer in Washington, D.C.,

where it's a balmy 18 degrees, but it's raining as you can see on the camera.

Atlanta warmer still. It's winding down in February with a high of 23 degrees and I'm sure my director Andrew will tell me it's actually very

warm, muggy outside. But in some other places, in winter destinations in Europe, they are not so likely. They're seeing temperatures well, well

above average. And that of course, well, if you're in a ski resort, then you might be missing a single central element.

As Barbie Nadeau reports from Italy, snow.


BARBIE NADEAU, CNN CONTRIBUTOR (voice-over): These mountains in central Italy used to be a favorite spot for local skiers. Now the area looks more

like a barren, muddy wasteland.

February is supposed to be the biggest and busiest month here at Campo Felice Ski Resort in the Apennine Mountains in central Italy. Not this

year. As you see behind me, all of these mountains that are brown are supposed to be covered with snow. This year, instead, there just hasn't

been the snow. The only snow you see here was made with artificial snow machines.

(Voice-over): The human-caused climate crisis has resulted in snow loss across the northern hemisphere. Here more than 4400 feet above sea level

where snow is disappearing fast, people are questioning how much longer skiing can go on.

This year, the influence of El Nino means temperatures have been even higher than usual. Normally, on a Sunday in February, you'd have 6,000

people skiing on these slopes. This year, only four of the 14 slopes were open. Of the 250 people who work here normally, only 50 have been able to

keep their jobs because the season has been so mild and short.

This ski resort has been in Andrea Lallini's family for 23 years. First, his father and now he and his brother Luca run it. He says the seasons have

been getting shorter over the years. He tells us the problem is lack of precipitation, plus it has never gotten cold. This year, winter barely even

arrived, he says.

They tell us that in the 1980s and '90s, artificial snow wasn't necessary. There was plenty of the natural stuff to go around. This year, snow

machines were the resort's only option. But even that is problematic because last summer there was very little rain and lakes like this one ran

dry. There was no water to make snow and even fake snow melts if it's too warm. It's a vicious cycle, he says.

And non-skiers feel the impact, too. Gennarino Di Stefano is the mayor of Rocca di Cambio. He says the town's livelihood revolves around the ski

resort and those nearby. The changing climate is having a ripple effect on the economy.

GENNARINO DI STEFANO, MAYOR OF ROCCA DI CAMBIO, ITALY (through translator): Every town has a good number of people who come here to work, from the ski

instructors, the managers, the bars, the restaurants, the people who run the ski lifts. Many people are not working.

NADEAU: And for ski instructors like Isidoro Franceschi, the lack of snow and shorter season means these young competitive skiers have to go

elsewhere to train.

ISIDORO FRANCESCHI, HEAD SKI INSTRUCTOR AT CAMPO FELICE (through translator): For those of us who have always worked in this area, it is

heartbreaking to see nature spoiled like this. It isn't good.

NADEAU: As skiers turn to resorts at higher elevations where there's more snow, skiing in places like this will soon be wiped out for good.

Barbie Latza Nadeau, CNN, Campo Felice, Italy.



QUEST: It does not look like much fun skiing in those conditions.

Boeing has 90 days to get its house in order after the 737 MAX debacle. It comes from the regulator, the FAA. Pete Muntean is out and with me after

the break.


QUEST: The FAA, the regulator in the United States, has given Boeing 90 days to come up with a plan that will address its quality control issues.

It follows a day-long meeting between the heads of the two organizations before that meeting, regulators conducted a six-week audit of Boeing's

production line. Boeing shares incidentally are higher today. That's because they've been so beaten up.

Pete Muntean is in Washington in D.C.

Pete, what do they want Boeing to do?

PETE MUNTEAN, CNN AVIATION CORRESPONDENT: Well, they really want Boeing to get its act together and this audit that you mentioned is actually not done

yet. Boeing says that it will come up with a comprehensive action plan and try and figure out its way forward when it comes to quality control.

Remember now that the issue was with quality control during that door plug blowout back on January 5th.

Alaska Airlines Flight 1282, that MAX-9, left the Renton factory without the four critical bolts that hold the door plug in place on the fuselage.

That is according to the NTSB and its preliminary report. Now the scrutiny not really letting up and this latest message from the FAA to Boeing really

shows that, Richard.

QUEST: All right. But Boeing has already -- I'm just reminding myself the details, and Admiral Kirkland H. Donald, retired admiral, has been

appointed to sort of to lead the quality and the review, and all of these things. And how does Boeing prove to the FAA that they have got their act


MUNTEAN: Well, it's all a matter of what happens on the ground right now, and now the FAA has inspectors at the Renton factory where the 737 is built

and they need to show that they are ready. But this comes on the heels of this damning report just yesterday from the FAA, which was inspired by the

737 MAX-8 crashes of 2018 and 2019 that said that Boeing factory workers are simply disconnected from management, and they fear retaliation when

they report safety issues. And they really don't really know how to go to them with safety issues.

So there are layers upon layers here, Richard, and the FAA only just now peeling back the onion, and it'll be up to FAA administrator Mike Whitaker

to really rubber stamp this or put this under more scrutiny.


It seems like the agency is probably going to lean towards the latter because it really can't afford to have another big explosive literal events

like we saw on January 5th.

QUEST: Right. So the 777X is, I mean, it's just mired in all sorts of stuff. The 737 the delays are everywhere. And there's no real new major

commercial project in commercial aviation from Boeing.

Is Boeing facing an existential issue here?

MUNTEAN: It does seem like an existential crisis, and you can see that in the messaging from the airlines, you know, we've heard United CEO Scott

Kirby say we're not all that interested in the MAX-10 that was going to be the backbone of their expansion plan. They're considering an alternative

plan now. We've heard the CEO of Ryanair say they want compensation for the delays for MAX-8 deliveries.

It is something that Boeing really needs to come to terms with, and it's really an opening for some of the other manufacturers like Airbus to maybe

sell some airplanes here as the confidence is eroding in Boeing. Also, you know, it means less business, but it also could be mean more bureaucracy.

And that could really slow down the deliveries and delays, and increase the delays of getting airplanes to customers,

QUEST: Pete Muntean is in Washington, grateful to you, sir.

We will have a profitable moment after the break.


QUEST: Tonight's "Profitable Moment," it is good to be back from my travels into the southern hemisphere, to Australia, to Doha, to Dubai and seeing

things on the way. There's one thing that comes back to me once and time and again. It is time for us to grow up on the question of AI, artificial

intelligence. Even on tonight's program, whether we're talking about the IRS or check fraud or Apple computer or whatever it might be, the reality

is AI is now a part of every piece of software in some shape or form, whether it's telling the laundry how to wash my socks or the IRS looking at

my tax return.

And that's why here on QUEST MEANS BUSINESS over the next few months, we are going to be looking at AI and how it's actually coming into effect on a

daily basis. You can tell me what you think you'd like to look at, where we should look at it, at Richard Quest, where would you like that or with my

e-mail address, Richard-dot-Quest at Yes, that really is my e-mail address. It comes right to my phone.

And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Back in New York and pleased to be with you. Whatever you're up to in the hours

ahead, I hope it's profitable. There goes the closing bell on Wall Street.