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Quest Means Business
US Stocks Tumble Following Weak July Jobs Report; Investors Widely Expect Fed To Cut Rates In September; Freed Americans Reunited With Families On US Soil; Tensions Soar As Hamas Political Leader Buried; Intel Has Worst One-Day Stock Selloff Since 1974; Kamala Harris To Meet With Vice President Contenders This Weekend; Electoral Body Affirms Nicolas Maduro Won With 87 Percent Of Votes Tallied; Missing Henry VIII Portrait Spotted On X By Eagle-Eyed Historian. Aired 4-5p ET
Aired August 02, 2024 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:05]
RICHARD QUEST, CNN INTERNATIONAL HOST: Closing bell ringing on Wall Street. It's the Hong Kong Boat Dragon Festival in New York. There is the bell
ringing. It has been a really difficult day on the market.
Losses of up to 900 points at one stage, now clawed back somewhat still going to be very heavily off both NASDAQ and the S&P and one, two, three,
four, five -- oh there we go. One big one and several little ones. Trading is over for this day.
These are the events: The disappointing Jobs Report that is fueling the anxieties and the market turbulence and tumbles. The accusation is the fed
is moving too slowly.
Evan Gershkovich and other prisoners are freed from Russia, now back with their families after the historic exchange.
And a painting, one for the wall, you thought it was missing for centuries, spotted in the background of a photo on social media. The art historian who
noticed it hiding in plain sight.
We are live in New York, end of the week, Friday, August the 2nd. I am Richard Quest and whether it be Monday or Friday, here or there, I mean
business.
And a very good day to you. Wall Street has sold off for a second straight session and finished the week sharply down.
Look at the numbers and I think it is important here, you see the Dow and the S&P, sort of around even stevens, if you will, of around one-and-a-
half, one-and-three quarters thereabout.
The NASDAQ once again, bearing the brunt. It is the growth stocks that were down very sharply. The NASDAQ losing two-and-a-half percent. They got
hammered.
Now, the NASDAQ is from its all-time high, is pretty much at correction territory. The all-time high was less than a month ago and now we are just
around ten, eleven percent off for the NASDAQ, which is a technical correction.
It was the weekly jobs number, the weak Jobs Report that is fueling fears of a large slowdown, which could lead to a recession.
The US economy added 114,000 jobs last month. That's far fewer than economists had expected. The revisions on previous months were also lower.
The unemployment rate rose to 4.3 percent, the highest it has been in nearly three years.
It is the economy starting to feel the cumulative weight of higher interest rates.
The monetary lag as it is known, it can take months for monetary policy to ripple through the economy. Just look each one of those bars, those lines
represents an interest rate rise. Think of the monetary lag being nine months to 12 months, and you can see this ever-increasing, more powerful
slowdown coming down the road.
The last time the Fed raised rates was a year ago, which means the full effect of this medicine is taking hold now.
Matt Egan is with me and that is really, Matt, what this is all about, isn't it?
You know, it is not -- this is not a surprise. Have they tapped the brakes too hard? That is an interesting debating point, but this is the sine qua
non, if you will, of what they were doing.
MATT EGAN, CNN REPORTER: Richard, we knew that all that tough medicine from the Fed was going to eventually cause some pain in the jobs market. It is
too soon though to say whether or not this is just a slowdown or something more severe.
Let's look at the numbers from the Jobs Report. We saw that the unemployment rate unexpectedly went up to 4.3 percent. That's the highest
level in almost three years -- 114,000 jobs added, that was a big miss. If you look at the trend, you can see hiring has clearly slowed down as
recently as March, we were adding 300,000 jobs. Even in May, we are at 200,000.
Now, as you can see, much closer to 100,000, still adding jobs, but not by enough given all of that supply of workers and that is why we've seen the
unemployment rate start to creep higher.
You can see, 4.3 percent still low, still much lower than during COVID, but moving in the wrong direction. Listen, one bad Jobs Report is not going to
be enough to say that there is going to be a recession and Moody's Analytics, chief economist, Mark Zandi, he told me the odds still favor no
recession -- Richard.
QUEST: Right. Let me challenge you if I may, Mr. Egan, good sir.
You say that the jobs number is moving in the wrong direction, but this is exactly the direction one would expect it to move in, bearing in mind the
monetary tightening that has taken place.
EGAN: I agree with you. I actually think we thought it was going to go even higher, right? If you would ask people two years ago, if the Fed was going
to spike interest rates like this and keep them at really high levels then we would have maybe been expecting the unemployment rate to be around five
percent or six percent.
[16:05:10]
It has been shocking how low it has been, but it has moved noticeably higher and even Fed Chair Jerome Powell, he said during the press
conference that he doesn't really want to see any more weakness in jobs market and that was before today's number.
And look, these numbers did not sit well with investors on Wall Street, right? We saw US stocks closing the day down sharply. Although as you
noted, Richard, the Dow was actually down almost up a thousand points at one point closing the day around 600 points lower. NASDAQ was down almost
three percent, two-and-a-half percent at the close. So these were actually off the lows.
The real question is, what is the Fed going to do next? And investors are starting to price in a rescue from the Fed. I mean, just 24 hours ago, the
odds of a large rate cut in September were pretty low, but look at this, in 24 hours --
QUEST: Are you -- 50 basis points, are you suggesting?
EGAN: I am suggesting that is what the market is beginning to price in. And Richard, look, we saw the economist from Citigroup and JPMorgan, they are
predicting not just one big rate cut at the next meeting, they are saying there will be one in November as well, and Elizabeth Warren, for whatever
it is worth, she is saying that Jerome Powell should cancel his summer vacation plans and cut interest rates now.
QUEST: That will be panic.
All right, Matt Egan, have a lovely weekend.
EGAN: Thanks, Richard.
QUEST: Thank you for that.
The US economy, it is still clearly growing, but we have what we call lagging and we have leading indicators and the leading indicator is --
unemployment is lagging by the way, it shows what is in the rearview mirror, but leading indicators tell us where the economy is probably going.
Consumer sentiment, for example, it is a very important bellwether. It has eroded from the first quarter. You can see the numbers there. High prices
chipping away at confidence.
Factory orders is also -- particularly the factory gate, it can indicate where the economy is heading, manufacturing contracted in July for the
fourth straight month.
And there is little doubt the economy is slowing. The Fed is certain almost -- well, just about to cut rates. It is whether it is going to be hard --
50 basis points or 25 basis points and whether or not it is going to have a technical recession on the way as well.
Randall Kroszner is a former Fed governor, now a professor at University of Chicago Booth School joins me now live from Munich.
All right, let's take this bit by bit.
First of all, I assume having seen these numbers, you believe you're certain that the Fed is going to cut in September, but are you a quarter or
a half?
RANDALL KROSZNER, FORMER FEDERAL RESERVE GOVERNOR: Well, they still have a lot more data that to take into account. We are going to see the employment
report one month from now, beginning of September.
Some people have argued that this was weaker because of some special factors. People always come up with some special factor. The special factor
of the month was the weather that hit Texas and so there were a lot more people who were reporting that they were not working because of weather-
related issues.
So my guess is this is a little bit worse than it otherwise would be, but I think it is part of a broader slowdown.
QUEST: Right, so a cut in September, half or 50.
KROSZNER: For sure.
And so I think it will really depend on the weather report at the beginning of September. If this is the scene, if we continue to just move down and
much more weakness, it will be 50. If it bounces back a little bit, it will be 25.
QUEST: Okay. Now, we were talking earlier, a moment or two ago, you may have heard me say, if you look at the amount of rate cuts that there were
two years ago until 18 months ago, to the last one last year and you bear in mind the monetary lag and we are looking at a graphic which just show
this sort of all those cuts and then extrapolate it out, say nine to 12 months on. It is not surprising that we are seeing this slowdown and there
is an argument, this is exactly when you would have seen it and potentially, it should be much greater.
KROSZNER: So, I totally agree that the classic thing that Milton Friedman, great University of Chicago professor said 70 years ago was that monetary
policy has impacted long and variable lags. As we think of that as sort of like nine to 18 months or maybe even two years, so exactly as you were just
showing, what you're going to see, is that in -- you know, starting a few months ago, some weakness, some slowness coming from that and it is really
only recently that the real interest rate, that is when you adjust for inflation has become positive.
And so that is only -- that is when you finally get monetary tightening when real interest rates, the inflation adjusted interest rate is positive.
QUEST: So factoring that in and this is sort of dancing on the head of a pen, I suspect, because has the FOMC left it too late to stop the snowball
coming down the mountain before it does too much more damage?
[16:10:15]
I mean, that is what has happened really, hasn't it? They have started this snowball down the mountain and it is picking up more and more and more
momentum and now, they are going to hope that they can actually stop it before it becomes a recession.
KROSZNER: Exactly. And one of the reasons that they took the risk that they might have that still ball going too far is because they didn't want to
have a repeat of what happened in the late 70s early 80s when inflation came down a bit, they gave the all-clear, cut interest rates and then
interest rates had to go up much, much higher to double-digit levels.
So they didn't want to -- they want to take out that risk, so they were willing to take a little more of a risk of the snowball coming down and I
think now what is going to happen is, later this year, people say, oh, the Fed was much too slow, but if they moved too quickly, then inflation could
have come back up.
QUEST: Right and we have seen that in the ECB -- we have seen that in the Eurozone and we have seen it in Canada, where whether or not we can link it
directly to the interest rate cuts, I don't know, but they have cut and inflation is going up again.
KROSZNER: Sure.
QUEST: And the other positive thing on this thing, Randall, I know you'll have looked at it closely. Two years ago, we said that the fed had no -- I
was going to say ceiling, but I really mean floor, a floor to lower rates. So when you're down at zero, there is nowhere to go.
Now, they have got lots of room for traditional monetary policy to act.
KROSZNER: Exactly. That is exactly what they are going to do, and as we were just talking about, if the labor market really seems to be coming
apart and we will see that -- you have September also having a very weak number, then they are going to move much more, more rapidly. Just as they
moved very rapidly on the way up, they will move rapidly on the way down.
Will that stop the snowball? I am not sure, but they can at least --
QUEST: Actually, just a quick thought -- quick on that.
KROSZNER: Sure.
QUEST: Since inflation has already come down, right? Bearing in mind, inflation being high, it took money out of people's pockets. But since
inflation has already come down, should we expect a monetary lag on the downside to be similar to that on the upside?
KROSZNER: So, it is likely to be -- it will have some lag. Whether that will be as much, not so clear, but there will be a lag.
So even if they started cutting, even if they started cutting at the previous meeting --
QUEST: Right.
KROSZNER: That's going to stop the snowball at least continuing part of the way down the hill.
QUEST: Thank you, sir. I am grateful. Enjoy Germany and look forward to talking to you soon. Thank you, sir.
It is QUEST MEANS BUSINESS from New York.
An emotional homecoming for Americans held in Russian prisons take their first steps on US soil since their release. A historic deal, and a whole
more, in a moment.
(COMMERCIAL BREAK)
[16:15:31]
QUEST: Magnificent scenes. Hero's welcome for the three Americans released from prison in Russia who are now back in the United States readjusting.
They were part of the biggest East-West swap since the Cold War. And in all, 24 detainees on both sides, you had Russian intelligence agents who
were so deep undercover that, the Kremlin says, these children didn't even speak Russian, know their nationality was Russian or indeed who the man
they are hugging, Vladimir Putin actually is.
Nada Bashir at this historic exchange.
(BEGIN VIDEOTAPE)
NADA BASHIR, CNN REPORTER (voice over): Home at last, landing at Joint Base Andrews in Maryland, the long-awaited return of three Americans detained in
Russia, now finally, a reality.
Former US Marine, Paul Whelan; journalist, Alsu Kurmasheva; and "Wall Street Journal" reporter Evan Gershkovich seen here being welcomed by
cheers before an emotional reunion with his mother, all smiles as he greets fellow journalists.
For President Biden this was an historic feat of diplomacy.
REPORTER: Did you think that this moment would come, sir?
JOE BIDEN, PRESIDENT OF THE UNITED STATES OF AMERICA: Yes.
REPORTER: What made you feel so confident?
BIDEN: Our relations with the heads of state.
BASHIR (voice over): Their return comes as part of a carefully brokered exchange, the largest prisoner swap according to the US since the Cold War,
secured in coordination with Germany, Poland, Slovenia, Norway and Turkey.
Among the 16 US and European nationals released from detention in Russia, prominent Putin critic Vladimir Kara-Murza, a British national and
permanent US resident.
Heard here speaking to his children, who joined the president in a call from the Oval Office.
VLADIMIR KARA-MURZA, RUSSIAN-BRITISH JOURNALIST (via phone): I was sure I'm going to die in prison. I don't believe what is happening. I still think
it's a -- I still think I'm sleeping in my prison cell in Omsk.
BASHIR (voice over): Not all American nationals held in Russia, however, were released. The family of Marc Fogel, who worked in Russia as a teacher
and was arrested on drug charges in 2021 have expressed their disappointment.
ANNE FOGEL, SISTER OF MARC FOGEL, AMERICAN HELD IN RUSSIA: It's been a roller coaster, no sleep. I feel like we've been kind of collectively
stabbed in the back.
BASHIR (voice over): In an emotional statement, US National Security Adviser Jake Sullivan said all Americans wrongfully detained remain a
priority.
JAKE SULLIVAN, U.S. NATIONAL SECURITY ADVISOR: Today was very good day. And we're going to build on it, drawing inspiration and continued courage from
it for all of those who are held hostage or wrongfully detained around the world.
BASHIR (voice over): As part of the exchange, eight Russian nationals, including convicted killers and spies were also returned to Moscow,
sparking concern that the deal could strengthen Russia's hand and even encourage other adversaries to arbitrarily detain foreign nationals as
bargaining chips. But such criticisms have been rejected by Biden.
BIDEN: Everybody.
BASHIR (voice over): And for the those who have anxiously waited for the return of their loved ones including Evan's "Wall Street Journal"
colleagues who campaigned for months for his release. This is a moment of celebration.
Nada Bashir, CNN, London.
(END VIDEOTAPE)
QUEST: In the world of industrial production and over the years, we've been told that 3D printing is the great hope of the future.
Now, in Dubai, they are actually using 3D printing for its iconic operas. Boats which are carrying people across the water. These are phenomenally
interesting boats, by the way, they are like -- well, they are taxis, you get on board, you pay up and somebody gets you to the other side.
And now with 3D printing, authorities say all of this boost efficiency and sustainability.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: For centuries, this creek has been the beating heart of the city of Dubai and the small wooden boats known as abras were the
lifeline, transporting goods and people across the busy waters.
As Dubai has grown, these boats have become a tourist attraction. Eighty percent of their passengers are visitors to the city.
Today, these iconic vessels are having a facelift.
[16:20:09]
AHMED BAHROZYAN, CEO, ROADS AND TRANSPORT AUTHORITY: With 3D printing, Dubai is growing very fast and we need to relocate for people who are
living or visiting these projects to ensure that they have a way of getting from Point A to Point B using water transport.
At the same time, we wanted to preserve the heritage of the city and we want to preserve the look and feel of the traditional abra.
UNIDENTIFIED MALE: Shipbuilding can negatively impact the environment, but 3D printing could offer a sustainable solution by being cheaper, faster,
and using recyclable materials.
The World Economic Forum notes that this technology can significantly reduce manufacturing costs and time across its various industries.
For the abra, Bahrozyan says it cuts manufacturing time by 90 percent.
BAHROZYAN: It used to take a four months to build an abra. With the 3D printed abra, it took us exactly a week to do it, so really slash the
manufacturing time.
At the same time, the material that is used is fully reusable material, it is made of reinforced glass fiber, which is very flexible, at the same very
efficient.
UNIDENTIFIED MALE: IN addition to less production time, the abras also produce less carbon emissions.
With 10 kilowatt electric motors and lithium batteries, Bahrozyan says they want to make all water transportation sustainable in the near future.
BAHROZYAN: We have approximately 186 abras right now, operating across the different sides of the creek. We have right now about 17 electric abras.
They operate in different parts of the city.
This one is the first electric vessel that has been created from 3D printing completely.
UNIDENTIFIED MALE: While 3D printing is novel to the maritime industry, companies and other startups around the world are experimenting with this
technology.
FAHMI ALSHAWWA, CEO, IMMENSA: So additive manufacturing and 3D printing have been around for over 30 years. However, we've seen adoption rapidly
increase over the last five years because of convergence of three things -- the material science, computing power, and specialization.
Today, you see a lot more specialization and you've seen the sort of adoption go from a couple of hundred million dollars a year up to a couple
of billion dollars. Growth rates have been double digits for the last five years.
When we look at other sectors such as mobility, automotive, and maritime, we just are at the beginning of the adoption and we are seeing much more
application into it.
UNIDENTIFIED MALE: While Dubai is setting its sights and making a splash in its water transport sector, this is just the start of a wider plan to
expand the city's maritime network and increase its passenger capacity by over 22 million by 2030.
(END VIDEOTAPE)
QUEST: The markets -- well, look at the numbers. The tech stocks again, the growth stocks were the difficult bit, they are down another two-and-a-half
percent. Amazon off eight, nine, ten percent. NVIDIA didn't do as badly as it has been previous, but it is still off heavily.
You've got the Dow the S&P off as well. The chip rally that helped carry markets to record highs appears to be unwinding. I will explain it all in
just a moment.
(COMMERCIAL BREAK)
[16:26:36]
QUEST: Hello, I am Richard Quest. We've got more QUEST MEANS BUSINESS coming up, together, we will get there too.
Kamala Harris his officially the Democratic nominee for president. She has enough delegates. And now, who will be her running mate? We will take a
look.
And we are going to talk to the art historian, he identified a long, lost portrait of Henry VIII. We will see that portrait and hear the auctions,
only after the headlines because this is CNN, and on this network, the news comes first.
The acting US Secret Service director says local law enforcement should not be blamed for the assassination attempt against Donald Trump. Ronald Rowe
says no one knew a gunman was hiding on nearby roof until it was too late.
(BEGIN VIDEO CLIP)
RONALD ROWE, ACTING SECRET SERVICE DIRECTOR: And based on what I know right now, neither the Secret Service counter sniper teams nor members of the
former president's security detail had any knowledge that there was a man on the roof of the AGR Building with a firearm.
It is my understanding that personnel were not aware the assailant had a firearm until they heard gunshots.
(END VIDEO CLIP)
QUEST: Protesters returned to the streets of Bangladesh to demand the resignation of the prime minister.
Earlier in the day, UNICEF said at least 32 children were among those killed during the unrest last month. Anger over civil service job quotas
triggered the original protests. Demonstrators are now also demanding justice for those killed.
THE search continues in Southern India for victims of some deadly landslides. One official says the death toll has now risen to more than 200
people, another 200 still missing. The disaster happened on Tuesday in the state of Kerala, and around 9.5 thousand people have been displaced.
The US Department of Justice has filed a lawsuit against TikTok. The suit alleges that the app has failed to stop users under the age of 13 from
joining the app, and has unlawfully collected their personal information. TikTok has been fined in Europe for similar violations last year.
In the Middle East, Israelis are being told to prepare their bomb shelters as the threat of a wider regional conflict gets ever closer. It follows
Hamas' political leader, Ismail Haniyeh being buried in Doha, in Qatar. The Iranian government and Hamas have blamed Israel for the assassination.
Israel has refused to confirm or deny the involvement.
Now, Haniyeh is the third high-profile figures in Iran-backed militant groups to be killed in recent weeks. The Israeli military says a senior
Palestinian militant has also been killed in Gaza.
The tensions are soaring and the US says it is ready to move resources to the region to counter any threat.
(BEGIN VIDEO CLIP)
ADM. JOHN KIRBY (RET), COORDINATOR FOR STRATEGIC COMMUNICATIONS AT THE NATIONAL SECURITY COUNCIL: We have heard the supreme leader loud and clear
that he intends to avenge this killing of a Hamas leader in Tehran, and that they want to conduct another attack on Israel.
We can't just assume that we aren't also potentially going to be victims of that kind of an attack. So we've got to make sure we've got the right
resources and capabilities in the region.
(END VIDEO CLIP)
QUEST: Clarissa is with me.
Clarissa Ward in Tel Aviv.
[16:30:04]
You know, I could ask you who, what, where, when this attack is going to come. And it's how long is a piece of string, but we do know, just on the
grounds of ferocity, this has got to be something more than just if you will a tickle.
CLARISSA WARD, CNN CHIEF INTERNATIONAL CORRESPONDENT: Yes, it was a Richard and it has to be probably something more than what we saw in April when we
were here when Iran launched its first direct attack on Israel, more than 300 projectiles, the main target appeared to be an airbase in the south of
Israel, which is where those F-35 jet fighters are based.
This time, though, the it's not just that it's personal. It's that it's been humiliating to the Iranians, it has revealed real problems with their
security protocols.
And so, the assumption is that it is going to be more serious, that it could also be in coordination with some of the other actors in the region,
so called members of the Axis of Resistance, most notably Hezbollah, as we discussed last night, Richard. Nasrallah talked about the possibility of a
coordinated attack.
And that's why you're seeing Israelis being urged to start to take preparations not to change their daily lives, per se. But for example, the
municipality of Jerusalem has told people, make sure that your bomb shelter or your shelter rather is clean, it's prepared, that you can get to it
within 90 seconds.
And tellingly, they're also warning people to make sure that they have provisions or supplies that could last for several days if there were to be
power outages, for example.
So, the Sabbath here has just started. Nobody knows when this attack might take place. There hasn't been any clarity on a timeline. And while it's not
panic stations, yet, it is definitely a tense waiting period. now, Richard.
QUEST: Now, if we strip away the patriotic support, if you will, for any government at a time of war. What would you say the Israeli mood is vis-a-
vis, these assassinations and the position that Netanyahu has now got them in facing a very determined and likely to be brutal retaliation by Iran?
WARD: There are massive tensions and divisions within Israeli society. We heard a report on Israel's channel 12, saying that there had been a
screaming match between Prime Minister Benjamin Netanyahu and the head of Mossad, David Barnea over essentially the head of Mossad saying you've got
to take a ceasefire deal, Netanyahu saying no, we won't yet.
Now, I should say that the prime minister's office has pushed back against that forcefully and said that it did not take place in that way. And the
prime minister's offices also announced that it is sending negotiators to Cairo either tomorrow or Sunday.
But what it does is illustrate a dynamic that you see a lot here between parts of society that say we've got to work towards a ceasefire deal, we
have to prioritize the return of the hostages and others on more of the hard right, who say, No, we have to establish deterrence, we have to hit
them harder. And so the end result is these kinds of protests that we have been seeing taking place now, week after week, and a very real fight
honestly, for Israel's national identity, Richard.
QUEST: Clarissa Ward in Tel Aviv. Clarissa, I'm grateful as always, thank you.
Let's go to the main story on our program tonight, a disappointing jobs report that set off alarm bells on Wall Street. The underlying health of
the U.S. economy is now of greater concern, a slowdown that could turn into a runaway snowball down the mountainside towards a recession. Not there yet
by any means. But those numbers and these losses could really take the trade show the story. The NASDAQ is now into a correction after a month of
hitting a record territory.
And if you look at -- it's a chip rally that good most of the good stuff if you'd like and now today we have Intel, the company has lost more than a
quarter of its value after posting in weak results, and announcing plans to cut 15 percent of its workforce. It's the worst performance for Intel since
1974.
Rana is with me, Rana Foroohar. Rana, I mean, we always know that the markets are not the most -- I don't know, like children, they don't get a -
- and they don't get a sugar rush. Nothing justifies -- nothing justifies a mature company with huge success like Intel losing 30 percent of its value.
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: You know, I think that that's probably right, we knew that there was froth in tech. And some of that
froth I think is about a legitimate story of A.I. being overblown, but Intel is not that, this is -- this is chips. This is, you know, backbone
tech.
[16:35:04]
But you know, when a bubble bursts, you know, I don't know if we can call it a bubble yet. But let's say that there is a big correction happening,
particularly in tech, it brings down everything else with it.
And so, you start to see things like, like you're showing right now on screen with Intel being down, you know, and there's -- there are a lot of
other things going on. This is -- if we do get a recession, I've been saying for some time, we were probably headed towards one and you know,
we've pulled out the cycle. We've had this discussion before, I think it's not unexpected where are we at the moment.
FOWLER: No, it's not unexpected, because if you look at though, you can see this graph that we had made up. If you -- and we were talking about it with
Randall Cross (ph) there. If you look, those are the interest rates. And we've extrapolated, if you will, the monetary lag.
Now, obviously, those interest rate rises are cumulative. So, we've got to slow down that -- and as Randall was saying, you've also as inflation comes
down, you've got a real interest rate rise, and a tightening of policy.
So, it's not surprising that only now, are we seeing the full weight and force of basically all those rate rises.
FOROOHAR: A hundred percent. I love that you're showing this graph, because it also puts in my mind the fact that we haven't been here in a long time.
You know, we've talked about that on this program before. We have lived -- there are generations of people in the market right now that really haven't
seen an environment like this one where we are going to see rate hikes. We have seen rate hikes, whether we're going to see sharp cuts now, you know,
what remains to be seen in the fall.
But 100 percent is not unexpected given what you're showing.
QUEST: Oh, you talk about people who have not seen rate rises like this? Well, let's go to Jake or to Josh, or to Ronan, or to Zeleny or to Brooke,
all the people who are working on this program, of course, who are the right side of 40 or 35.
Well, anyway, you get my point, look --
FOROOHAR: 100 percent.
QUEST: Do you think the Fed knowing that there was going to be a slowdown has left it too late, if you will, to put the brakes on the snowball coming
down the mountain?
FOROOHAR: You know, I got to say, looking at some of the data that we're seeing, and also just that finger to the wind feel, which we all have, I've
been feeling in the last couple of months just traveling being on summer holiday a couple times. I've just been feeling something doesn't feel right
to me, it feels slower. So yes, it's possible.
Now that said, you know, it's always easy to criticize the Fed. They've been trying to do a tough job of making sure inflation is under control. At
the same time that we're trying to keep on employment -- unemployment low, employment high in a political cycle that is very, very difficult to
predict and in a geopolitical world that is difficult with a tech story that knows what that is happening.
QUEST: Stop feeling sorry for them. They won. They won.
FOROOHAR: I feel for the -- they're doing job's world, Richard.
QUEST: What?
FOROOHAR: You remember who said that last?
QUEST: Thank you. Thank you very much. You've been on holiday.
FOROOHAR: I was in a holiday. Yes. And I will be again.
QUEST: All right for some, thanks very much. Have a lovely weekend.
FOROOHAR: You too.
QUEST: Thank you. Kamala Harris is expected to announce who her running mate will be, who she's meeting this weekend and the odds and the runs --
the runners on the races. As they used to say (INAUDIBLE) in a moment.
(COMMERCIAL BREAK)
[16:41:07]
QUEST: Kamala Harris has clinched the Democratic presidential nomination in a virtual vote and she's planning now to meet over the weekend with various
potential running mates. The top contenders include the Kentucky Governor Andy Beshear, Arizona's Mark Kelly and Pennsylvania's Josh Shapiro, the
campaign is also coming up a strong month of fundraising, $310 million in July, double the amount raised by the Trump fans campaign.
Harry Enten is in New York. Who do you like the look officer?
HARRY ENTEN, CNN SENIOR DATA REPORTER: Who do I like the look of? I like the look of all of them. I think they're all fine looking gentleman, but
who do the betting markets like to look at this particular point?
QUEST: Right.
Zzz That's the real question going on here because you know that reads in the conventional wisdom and at this particular point, though, betting
markets like to look of this gentleman on the far left hand part of your screen Josh Shapiro on a 60 percent chance to get that V.P. nomination. Tim
Walz, the Minnesota Governor at 18 percent. Beshear at 12. Kelly at nine.
Why do they like the look of Josh Shapiro? Well, I think this will give you an understanding. Josh Shapiro is, of course, the governor of Pennsylvania,
and the chance that this state puts Harris or Trump over the top of the Electoral College. The number one state on your dial is Pennsylvania 35
percent chance, second Wisconsin in 14, Michigan at 12 percent.
None of the states that the other dudes represent either in the Senate or our governors have are on this list, Josh Shapiro in Pennsylvania, number
one on this metric. And of course, if you're Jake Tapper, number one in his heart as well.
QUEST: Right. But listen to what Donald Trump said about the president -- as the vice presidency. Here we go.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), U.S. PRESIDENTIAL CANDIDATE: Historically, the vice president in terms of the election does not have any impact, I mean,
virtually no impact.
(END VIDEO CLIP)
QUEST: Now, let's ignore a bucket of spit. And I'm sure you'll tell me -- remind me who said that, but let's ignore those comments. And Donald Trump
says it doesn't matter. Maybe he's just justifying his own candidate or his own nominee. And do you agree with Donald Trump?
ENTEN: OK, first off, yes, he is just justifying his own candidate. J.D. Vance has at least like V.P. nominee coming out of his party convention
ever in recorded history.
But let's get at the heart of what he's trying to say, you know, do V.P.s matter? Only minimally but they minimally matter in a very important way.
V.P.s nominate home state effect added to the running weights margin 0.5 to two points. That doesn't seem like a whole heck of a lot. But remember,
Pennsylvania last time around was determined by get this, just one point, two points.
QUEST: We've also had the comments of course, about Shapiro being Jewish. And we've also heard that now. On both sides, the anti-progressive
Israelis, there are dark comments being made by Donald Trump about our Jewish and whether he's a good Jew or not. This is getting very unpleasant.
ENTEN: It's getting very unpleasant. And you know me, I wish you good job as many times we meet on Fridays. I don't necessarily like those negative
comments going around. I think that they border in some cases on anti- Semitism.
But my job is to report the facts. My job is to report whether or not he'd be a good running mate, whether or not he could add in Pennsylvania. You
see this slide here. I just also want to note, look at this, look at his record in Pennsylvania. His winning margin is 2022 campaign, he won it by
15 points, Joe Biden won in Pennsylvania by just a point.
His favorable rating right now in 2024, get this, 61 percent. So, the bottom line is if Kamala Harris, if Kamala Harris wants to add as much to
her ticket as possible, wants to win Pennsylvania, it's very clear that the pick should be Josh Shapiro, whether or not it is, that I can't answer for
you.
But I can say he's the front runner right now as far as the betting markets are concerned. And more than that, he does have a winning track record
there. He would help her in that state most likely.
QUEST: All right, as always, Shabbat shalom.
ENTEN: Good Shabbos, my friend.
QUEST: Venezuela's electoral council has affirmed Nicolas Maduro's victory on Sunday. (INAUDIBLE) please.
[16:45:05]
It said a short while ago the incumbent president won with just under 52 percent of the vote, 97 percent has now been tallied. The council is made
up of people who are loyal to Maduro. The opposition says the candidate Edmundo Gonzalez won in a landslide and accuses the government of fixing
the election. Leaders in the U.S., Uruguay, Argentina, European Union are all calling for transparency.
(BEGIN VIDEO CLIP)
MANEL ADORNI, ARGENTINIAN PRESIDENTIAL SPOKESPERSON (through translator): We understand that the majority of the international community is going to
accept that it is indeed a great fraud and that the dictator Maduro must step down from power and give away once and for all to democratic actions
into what we all know and understand that the Venezuelan people want, which is to live in peace and above all, in democracy.
(END VIDEO CLIP)
QUEST: Stefano Pozzebon in Caracas for us, and joins me now.
Now, look, Maduro said, look, he would have an investigation. And now we've had the court ruling, but nobody's fooled and we don't seem to be any
further along. He's going to take the power. The opposition says he's -- it's a fraud. Where do we go next?
STEFANO POZZEBON, CNN CONTRIBUTOR: Well, Richard, the story will be laughable where the stakes not so high, you've said it exactly, like nobody
is believing that this court which is the same court that barred the opposition leader Maria Corina Machado from running in last week's election
could be of any independency. The president of the court is a member of Maduro's own party who campaigns regularly on the party's behalf.
Now, the real question is just like you said, what does the -- what happens now? What does the opposition and the international community do?
Like we often reported on Venezuela, this is a chess game in two boards at the same time. One is the situation on the street, which is what the
opposition can move around by calling for protests. And they've done it starting again, tomorrow at 10:00 a.m. on Saturday, there will take to the
streets once again to say that they want to see the ballots.
And the other chessboard and the other game is the one that is being played in the international arena with diplomats calling frantically at every hour
to try to figure out a way to get out of these mess.
And the easiest way, it will be just to release all the data, all the ballot papers that the electoral authorities have.
They said just a couple of hours ago that they have analyzed the 97 percent of the data, and that Maduro won, but still, there is no way for you to go
on the website or to actually ask them to see what the data has.
And it's -- I think it's interesting that here, there is a new narrative coming up of saying, well, the data is not available to everyone -- to
anyone, the data might be lost.
Well, the opposition has put on a website all the data that they had collected, that's about 22,000 ballot papers, and it's for everybody there
to go and check. It was just easy if the electoral authorities did the same and you then you can compare and contrast.
QUEST: You'll report more and we'll find out more as this continues. Thank you, Stefano, have a good weekend in Caracas.
Now, we're all very familiar of having to make ends meet, perhaps found some old coins behind the bottom of the sofa or you've got an old cash that
was in a pocket.
How about if you find a 400 roll paintinghiding in plain sight that could be worth hundreds of thousands? Well, it is worth hundreds of thousands of
dollars. The manual (ph) uncovered, a long lost portrait in a moment.
(COMMERCIAL BREAK)
[16:51:15]
QUEST: Mystery of an art world that might finally have been sold is this 400- year-old painting a portrait of Henry VIII, it was considered lost
arguably for hundreds of years. And yet its whereabouts were discovered last month, unlikely places.
The artist I and Adam Busiakiewicz was scrolling through his social media feed when he noticed the painting hanging in the background of this
photograph. That's the photograph, and in the background was the picture Shire Hall in Warwick in England.
He suspected it was a missing portrait of the Tudor Monique Henry VIII, part of a series commissioned in 1590s.
Now, if his suspicions are true, then the painting could be worth a small fortune. And it's not the first time this has happened. He also found
portrait of a nun Milady by Joan Carlyle, they found that in 2018.
Adam is with me now. Adam, what made you -- I mean, how did you even know about this painting if it's been lost for so long?
ADAM BUSIAKIEWICZ, CONSULTANT OF OLD MASTER PAINTINGS, SOTHEBY'S: Well, the sets that Ralph Sheldon commissioned in the 1590s, that is in the reign of
Elizabeth the first when Shakespeare was alive, was very famous in its day for being one of the probably greatest sets of Tudor portraits.
And in 2015, a study was made of all of them. And it turned out that the portrait of Henry VIII that was part of the set of 22 paintings was
unknown, it was untraced it was in other way missing. So what?
(CROSSTALK)
QUEST: What did you think when you saw this?
BUSIAKIEWICZ: Well, one of the things about the Sheldon set is they all have very distinctive arch tops, which actually have portraits of the 16th
century is quite rare. So, that was immediately of interest to me.
So, then, I tried to find other photographs of the picture I found that it's actually housed in the same frame as other surviving Sheldon
paintings. And then I hit the books. And within about an hour or so, I was very lucky enough to work out that this is the missing painting that has
arguably been lost since it was last sold in 1781.
QUEST: And, of course, the local council and -- are going to sort of preserve it and make sure that it's kept for others and for everybody to
enjoy.
But it's not the first time you've done this, do you make a habit of sort of zooming in on your photograph social fee to see if anybody's got an old
master behind them?
BUSIAKIEWICZ: Well, you're absolutely right. I mean, you know, some people use social media for cat videos and such. I use it to look at what's on
people's walls, and you know, Instagram, Twitter, X, whatever we call it now, is a wonderful way for us to peer into rooms that we will never visit.
And so, that was just one of those occasions that I had the opportunity and of course, with that painting by Jim Carlisle that was again just an
absolute fluke, really, an acquaintance of mine posted a snap of a wedding and I spotted it and got in touch with the expert on Jim Carlisle and they
said yes, this is a missing painting. I mean, it's just luck really I think.
QUEST: Well, you say that but it's skill and it's years of talent and years of academia that you've been put into this.
I remember my Auntie Dorothy thought -- this is true story. She thought you had a Gainsborough on the wall that she picked up at a local auction, it
will turn out to be a load of nonsense and wasn't worth anything.
But for those few hours when everybody thought it might be something, it was quite exciting. And I think that that's -- it is the -- it's the whole
thing of the antiques roadshow. It's a possibility, isn't it? That's what gets us excited.
BUSIAKIEWICZ: Oh, you're absolutely right. And you know, if you work in the art world, I'm a consultant for the Auction House Sotheby's, you know,
anybody in the art world worth their salt, art dealers, or specialists are always looking for over looked treasures.
And you'd be surprised, all it takes is for your grandfather to have bought something, if not told you and him to have passed away. And then, you know,
things fall into obscurity, it does happen, and it can happen. And I'm certainly looking forward to seeing other things on people's walls, if they
ever post them.
[16:55:03]
QUEST: I'm just going to forward to everything I've got, every picture I've got in my apartment, not that there's anything of any great value there,
beautiful stuff, and things are great.
And at the end of the day, you know, these are magnificent pieces. And I think I always get a little upset when a really great work is bought by an
uber rich person, and then disappears off or either into a vault or onto their castle wall, and we never see it again, these things need to be
displayed and see by the soul.
BUSIAKIEWICZ: That's one way to look at it. I also think that people have the right to private property, paintings have always been bought and sold
for centuries, collections have been amassed, they've been dispersed.
I think, of course, you know, museums are wonderful things. And it's wonderful in England, for example, that we can go and see the free but
also, as long as paintings are looked after, taken care of and preserved for future generations, that's the most important thing as long as they're
not destroyed. I in my opinion, at least.
QUEST: I think that might be a very valuable piece behind you, or not, as the case may.
BUSIAKIEWICZ: No, I'm a very modest collector. But you know what, I mean, another thing about me and the world is that you don't have to spend a lot
of money to find something beautiful. And you know, some of the best things I've ever bought that I have in my room here I paid less than 20 pounds
for. You know, just go to antique shops and look.
QUEST: Thank you very much. Thank you. Delightful to have you on the program tonight. Thank you.
BUSIAKIEWICZ: Thank you for having me.
QUEST: We will take a profitable moment with no artworks in a moment.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, there is a lot of hysteria over the way the economy is moving in the United States at the moment, but this was
exactly what the Fed always intended. They always wanted to have a slowdown in the economy that was going to bring down inflation and the result of
that was always going to be higher unemployment.
The issue now is have they gone too far? Have they tapped the brakes too much? And that the car thing is halting is slowing down towards a
recession.
The good news is there is plenty of, if you will, room in the cellar now because as things have move forward, and interest rates have gone up,
there's plenty of room to cut.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it is profitable. "THE
LEAD" with Jake Tapper.
PHIL MATTINGLY, CNN CHIEF WHITE HOUSE CORRESPONDENT: Welcome to "THE LEAD." I'm Phil Mattingly in for Jake Tapper.
This hour, it was an incredibly emotional reunion for the Americans released from Russia, including journalist Alu Kurmsasheva, made it home
just in time to celebrate her daughter's birthday today. What comes next? And what about the others unfairly held behind bars? Alu's boss joins us
live in minutes.
Plus, he's accurately predicted the winner of nine of the last 10 presidential elections. So, what does Allan Lichtman think is going to
happen coming November? Is he picking Harris or leaning towards Trump? I'll ask him why.
And leading this hour, Vice President Kamala Harris on the clock just has a few days to pick her running mate if she's going to meet her self-imposed
deadline of next Tuesday, a.
And today, CNN is learning Harris will meet with top V.P. contenders over the weekend with multiple sources saying that while all six of these men
are in the running, governors Shapiro and Walz --
END
