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Quest Means Business
Dow Surges Over 1K Points To Cross 50,000 For The First Time; E.U. Says TikTok Addictive Design Puts Users At Risk; Winter Olympics Ceremony Underway Italy; United States-Iran Talks End With Commitment To Further Discussions; Trump Shares Racist Video Depicting Obamas As Apes; Professor Warns World Facing Economic "Doom Loop"; Japanese Prime Minister Rides High On Popularity Ahead Of Elections. Aired 4-5p ET
Aired February 06, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:15]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street and there you see, we are over 50,000. We will close
over 50,000. I Have a Dream Foundation. Appropriately green. The sky -- the sky is all green for the markets as trading comes to an end. Please do the
business. And a one and a two and a yes! The day has closed for the first time. The Dow is over 50,000. You may say it is, but a number, but it a
significant one anyway. The markets and the main events a move towards blue chips as the Dow now really powers ahead.
Andrea Bocelli and Mariah Carey headline the opening ceremony at the Olympic Winter Games in Italy. We will talk about that and the E.U. is
calling on TikTok to change its addictive design. Any realistic chance of that?
Tonight, I am in London, so we are live in London on Friday, February the 6th. I am Richard Quest with Dow up 50K, I mean business.
Good evening.
So, as you just saw at the top, the Dow surges up more than a thousand points to cross 50,000 for the first time. The surge this Friday follows a
difficult week for the markets. Today's gain broke the NASDAQ's worst three-day slide since April. And there you see, so the Dow is the best. It
is NVIDIA that really did the business. S&P is up, two, NASDAQ just over two-and-a-fifth. It was the chipmakers that were up sharply and rallied
after falling 17 percent on Wednesday.
Alphabet and Amazon did not see any relief though after punishing from the market this week. You see amazon still down five percent today after what
it was. But NVIDIA, which I think is largely what this market is now all about today anyway, up seven percent, eight percent and remember what AMD
did after we got results, and then it was clobbered by nearly the best part of 20 percent.
A wild week for the markets after Anthropic launched its new Claude Cowork tool and that triggered the mountain of worries about tech, A.I. and
software and that's what we've been tracking all this week, the fallout on QUEST MEANS BUSINESS.
(BEGIN VIDEO CLIP)
QUEST: The selloff in the tech sector, accelerates as the chip stocks are under tremendous pressure. The chip stocks falling, it is worsening a
painful week for tech.
The misery continues.
Once again, tech stocks under severe pressure as more investors are questioning the sky high valuations.
(END VIDEO CLIP)
QUEST: So, if you look, the shares in the LegalZoom are recovering. If you look at the market overall and how it performed over the course of the
week, we've got a strong reaction in the market, but it follows the falls and making sense of that is what we need to do.
Clare Duffy is with me.
Clare, I don't want to sound totally ignorant, but I can't really see much point for why the market rallied today, having fell so sharply over the
last three days other than an overreaction, and therefore it bounces back.
CLARE DUFFY, CNN BUSINESS WRITER: Yes, Richard, I think that's exactly it. I think this dip was sort of an anomaly. It wasn't really based on, you
know, any concerns that were long lasting here, in part because of what you and I have been talking about, this sort of tension where on the one hand,
the market was concerned that Big Tech giants were spending too much on A.I. infrastructure, but on the other hand, we are starting to see real
examples of the value of A.I. tools.
And, you know, this dip in the LegalZoom stock is an example of that. There was concern that these new A.I. tools could undermine existing software
businesses, make it easier for companies to build their own software internally. But on the flip side of that, you have to think about just how
difficult it is for especially regulated industries like the legal industry to implement new software tools. This is not something that's going to
happen overnight.
And so I think that speaks to the fact that companies like LegalZoom, at least in the near term here, their business is pretty safe -- Richard.
[16:05:09]
QUEST: We are going to have the CEO of LegalZoom with me in just a moment or three.
The underlying worries may be put to rest, but they haven't gone away, and so I always feel a bit guilty because I always sound like, you know, glass
half empty man. But the truth is, the market is some say, fooling itself.
DUFFY: I think the other challenge here, Richard too, that I've been thinking about as we've been having this conversation this week, is that
for investors in the market, they have exposure to these existing software companies that maybe are going to be at risk in the future from these A.I.
tools.
But right now, most regular investors don't have the opportunity to invest in an OpenAI or Anthropic and get in on this next wave of value creation.
Now, that may change as we are hearing rumors that both OpenAI and Anthropic are preparing for IPOs potentially later this year.
But I think that's another part of the reaction that you're seeing is investors right now are saying, I don't have the opportunity to get in on
the, you know, the growth here in this A.I. market in the same way as I am exposed to maybe some of the downsides.
QUEST: Quick question on TikTok and the success, the infinite doomscrolling and personalized feeds that seem to be now almost potential liabilities.
The E.U. says the features that make the algorithm, make the app addictive and calling for a change, wants TikTok to change the algorithm or face a
potential fine.
TikTok says its findings are categorically false and plans to challenge them. There is plenty of evidence that does suggest that there is a sort of
addictive quality to that, and Clare, this is the E.U. going where the U.S. won't.
DUFFY: Yes, that is exactly right, Richard. This is dating back to a 2024 investigation that the E.U. began into some of these features on TikTok.
The E.U. now saying that TikTok is in violation of the Digital Services Act, which requires Big Tech platforms to take steps to prevent systemic
risks to things like youth mental health, and this is a preliminary finding, but the E.U. is taking issue with TikTok's infinite scroll, where
you never stop seeing videos on the feed, autoplay as soon as you open up the app, push notifications and its highly personalized recommender system,
all of that, the Commission saying amounting to addictive design.
Now, TikTok does plan to appeal this decision, a spokesperson told me, "... the Commission's preliminary findings present a categorically false and
entirely meritless depiction of our platform, and we will take whatever steps are necessary to challenge these findings through every means
available to us."
But if they don't succeed on that appeal, they could be on the hook for potentially billions of dollars in fines, six percent of their annual
revenue. And I also think this is really interesting because just last week, TikTok settled that case in California, where it was accused
essentially of the same thing, of having an addictive design that harmed young users' mental health. It settled that case, still on the hook for
hundreds of other cases. But interesting here now that the Eu is trying to take this action as well.
QUEST: Right. Clare, I am grateful. Thank you.
We were talking a moment ago about LegalZoom. It is one of the A.I. companies in the legal area, and its shares were badly affected when
Anthropic announced its Cowork.
Jeff Stibel is the CEO of LegalZoom. He joins me now.
You know, I was impressed that you came out the gate and, you know, when everybody is saying talk of your death is upon us, you're turning around
and saying, talk of our death is greatly exaggerated.
This Cowork from Anthropic or things similar are supposed to put you out of business. Why aren't you crying?
JEFF STIBEL, CEO, LEGALZOOM: Yes, thank you for having me on and the introduction, I think, but I would actually say it is not about our death,
it is about our rebirth. I mean, in effect, what is happening in A.I. is it is making legal work easier to start. What we are doing is helping people
to finish and we do that with our trusted experts, our execution and ongoing compliance. So, we've been excited about this revolution and this
is, frankly, the reason that I joined the company two years ago.
QUEST: But does this sort of development by Anthropic, where essentially the software writes the software and it becomes so user friendly that you
don't need code. You can just point to the folder on your desktop and tell it what you want it to do.
Forgive me, you know, that's a very layman's description, but I don't fully, fully understand the new the -- ins and outs of it, but how do you
take advantage of that benefit?
STIBEL: So, I actually think it is a great description. It is spot on.
It is a platform shift, and we've seen these shifts many times before. We saw this with the internet, we saw it with mobile, with cloud. We are now
seeing it with A.I. and it is always massively disruptive. But it is not often deadly.
Software isn't dead.
[16:10:10]
What you're seeing happen is automation is becoming easier, quicker and more efficient.
So for us and the other companies who jumped on this early, the idea is to automate what can be automated, leverage A.I. and then win the rest. And
for us, win the rest with experts and with service. It is called human in the loop, which is an A.I. term that has been around forever.
A.I. can't do everything, lucky for us, as humans and we are there to solve those problems for our customers when and where they need it. A.I. is there
to educate them and alert them to things that can be done to make their businesses and personal lives better and easier.
We will help them complete that loop.
QUEST: So does LegalZoom coexist or does it take advantage? The adaptation to these new ways? And as you say, the ability to put a human element in
it.
You know, every company like yours has to question where it fits into the ever changing ecosystem.
STIBEL: They better question it, and I hope they questioned it two or three years ago and started implementing a strategy that wasn't antiquated.
Software isn't going to be dead, but it does need to be replaced with a new strategy. And, you know, for us, I think we thrive in the new world of A.I.
and we are already seeing that.
You know, I am running a public company. We keep our heads down, we keep hitting our numbers every quarter, and we thrive by adapting. That's what
you do.
And here in this case, the adaption is an opportunity, not a challenge and we are taking advantage of that opportunity.
QUEST: When you look at the market overall, and I realize you're not a market analyst or you're not a stock picker, but you can -- you are very
well qualified for this question, which is the market is -- the market is frothy and investors are somehow worried that the A.I. benefits are not
coming at the speed at which the investments are going in, $200 billion yesterday from Amazon, $200 billion from Alphabet.
Do you think that -- how long before we will see tangible, real, wide scale productivity benefits from A.I. in that sense? The sort of thing that the
market is pricing in?
STIBEL: Yes, it is interesting. The market is very much a tale of two cities. You have this one area revolving around A.I. that is really, really
frothy, and then you've got almost mass panic everywhere else because people are wondering whether A.I. is going to displace or reinforce what
these other companies are doing.
On the A.I. side, I think it is very much a platform shift, and with platform shifts you have to overinvest, you have to take bets. You know
that some of those bets are going to be wrong, but ultimately the ecosystem as a whole will be stronger as a result.
With everything else, it is a massive overcorrection, and what you're trying to do is you're trying to figure out which of the teams on in
running these companies have steady, steady hands and understand what is happening at a fundamental level and are going to be able to adapt and
shift and that's hard to unpack in the short run. So, it doesn't surprise me that we are overcorrecting in that respect.
But it will eventually come back. Pendulums swing, as you've seen many times.
QUEST: Absolutely. You know, those of us of a certain age have seen the dot-com boom and bust, this, that and the other. Been there, done that,
bought the t-shirts.
STIBEL: You're telling you are old!
QUEST: Yes, absolutely. Old is another word for it.
Thank you, sir. Thank you, Jeff. I am grateful.
It is that time of the year, the Winter Olympics, the ceremony -- the Opening Ceremony is underway at the moment in Italy. The athletes are on
their parade and this is an interesting opening ceremony because it is in two venues, which is the first time that has happened.
We will report, we will be in Milan, next.
(COMMERCIAL BREAK)
QUEST: The Opening Ceremony of the Winter Olympic Games is now underway in Milan. The actress, Matilda De Angelis kicked off the event with a tribute
to Italian music. We are also hearing from Mariah Carey participating, singing the Italian classic "Valore" and sorry, I couldn't resist it --
Andrea Bocelli is set to perform later.
The parade of athletes has been taking place over the last moments ago. The Italians entered the San Siro Stadium.
Amanda Davies is in Milan. I can only imagine it must be exciting.
AMANDA DAVIES, CNN WORLD SPORT ANCHOR: Oh, Richard, I am so pleased that you burst into song because I was doing it, but in a very different
fashion, which was the more football rendition of "Valore" that we normally hear inside the San Siro.
And I have to say, Mariah Carey's ballad version for me didn't quite do it, but it has been a spectacular opening ceremony as we have come to expect
these things. If you like dancing multicolored coffee pots and Mariah Carey and we did have -- I know you love a really sharp piece of tailoring, and
there was a really wonderful tribute to Emporio Armani, a catwalk descended on the floor of the San Siro, and an array of models all dressed in really
sharp red, white and green suits. It was a really special moment for me because he, for such a long time, of course, designed the Olympic costumes
for the Italian national team.
This is a first Winter Olympics back in Italy since Turin in 2006, but as you said, it is really, really different. For the first time -- it is the
first time we've had an Olympics over, not just one, not just two, it is three official venues.
QUEST: Okay.
DAVIES: But we've actually got four venues taking part in tonight's Opening Ceremony.
QUEST: So, we've also got real snow, I believe. Gosh, that's original.
DAVIES: It is. The good news and we can see it. Not now, it has gone dark, but we can see it on the mountaintops outside of Milan. But this is the new
future for the Olympic Games because of climate change, because of sustainability, in an attempt to keep down costs, the International Olympic
Committee is saying this is the way forward. We are going to host these Games in the places that suits the sports that we are talking about.
So they haven't had to build entirely new ski resorts here in Milan. They've got the ice hockey venues in Milan, they've got the ice skating
venues in Milan, they've got the iconic San Siro Stadium, but you need the mountains for the snow.
So, there are some of the events taking place in Livigno, we are going to Bormio, which is about a three-hour drive outside of here tomorrow for the
men's downhill events. But then the women's are about a five to six-hour drive away from here in Cortina.
It is fascinating. It puts a whole different level of strain on the Olympic Committees, and I think for the athletes, it is very different, but it is a
new world and the President of the International Olympic Committee, Kirsty Coventry, has said, let me know what you think. So, it is day one
officially, so we've got time to report back.
[16:20:10]
QUEST: Oh, thank you. Thank you very much, Amanda Davis. I bet you're rather good on the slopes. We will talk more about that as the week and the
Olympics continue.
Now, more than 30 countries are offering their athletes a cash prize should they bring home the gold. Now, the bonus varies depending on which country.
If you're in Singapore, you'll get the best part of $800,000.00; Hong Kong, just behind Italy there. U.S., only $37,000.00. I guess, they've got more
of them. And New Zealand you get 3,000 bucks if you bring home the medal.
But not all Olympians win the gold and when the Games are over and when you're, if you will, athletic times are finished. How do you make money?
Some like China and South Korea, offer pensions, proper sort of arrangements, pensions, stipends. You gave to your country, we pay you
back.
Others give winners personal gifts like cars and apartments and things like that. And of course, there is the sponsorships and endorsements. But the
reality is, very few Olympians will be able to match the success in terms of sponsorship and endorsements of, say, Tom Daley or Shaun White.
My next guest started a company that helps the rest of them find paid opportunities. Matt Richards is the two-time Olympic gold medalist swimming
for the U.K. in the Tokyo and Paris Games joins me now.
Sir, first of all, this is a fascinating arrangement. The way -- you basically put a marketplace together for athletes of all stripes to find
endorsements and opportunities, but it doesn't have to be a $10 million or a multiyear, is it? Please explain.
MATT RICHARDS, FOUNDER, SPONZA: Yes, absolutely. I mean, a $10 million or multi-year is always welcome, but that's exactly it. We are here to try and
make sure that athletes of all different levels, and all different abilities, have got a place to find and connect with brands that want to
work with them, especially in this day and age where micro-influencers and smaller campaigns are seeing such fantastic results for brands and their
marketing teams. It is important that the infrastructure is there to connect those brands with the athletes that are looking to work with them,
and so that's exactly why we built Sponza.
QUEST: Yes, what be, in your view, what sort of amounts are we talking about that the average -- I say average athlete, these are extraordinary
people in their fields, but you know what I mean -- that the average athlete would sort of get from some of the sponsorships and/or endorsements
or brand relationships of your site?
RICHARDS: Yes, well, it is a real mixture, and the goal for us is to make sure that we've got everything from tens of thousands of pounds and
hopefully in the future, hundreds of thousands of pounds, maybe even millions, for the big deals, for the big athletes.
But right the way through, then to the other end of the spectrum and where you've got the grassroots athletes and the junior athletes that are really
early in their career, where actually just some free kick goes a long way and really helps them and often their parents and their families on their
journeys in their sporting careers.
So, we try to make sure we've got a real diverse range of brands, different campaigns, different opportunities, from photo shoots to brand affiliation
to content and everything in between and make sure that likewise, we've got a real mix of athletes to service all the demands and all the different
needs that various brands could possibly have for working with athletes.
QUEST: Matt, you must be quite extraordinary, because not only have you got the determination to have -- and the single mindedness and some would say
dysfunctionality to actually train for all of those years to get -- to take a gold.
But you've also got the business acumen to come up with this idea with the entrepreneurial spirit. You don't often find those two things together.
What happened?
RICHARDS: Yes, I think, it is an interesting one. There is actually so many ways, I think that the business and the sporting world are very similar and
a lot of the things that I've learned from sport have translated really nicely into to the world of business and that entrepreneurial sort of
endeavor. And I think the sort of bloody mindedness, for lack of a better word is probably a real strength in that aspect, you know, and I think
being able to set your sights on a big goal and a real tough task and then make it happen is part of that.
QUEST: What was it that led you to this? Was it a personal experience? Was it a realization that the difficulty of getting -- I mean, because we all
see the big sponsorships and yet we know that they are few and far between.
So what caused -- what led you to it?
RICHARDS: Yes, it is a real mixture. You know, both of my personal experience and also of that of many athletes around me, not just in
Olympics sport either, but in many different sports. I think, for example, when I won my first Olympic gold medal in Tokyo, I was earning 15,000
pounds a year and that was my yearly salary. That was all I had to live off.
[16:25:07]
You know, and so that doesn't go a very long way in this day and age, especially when you've got to pay for camps and competitions and the
various different things that come with being an elite athlete. And I am very fortunate now, I do have some fantastic support from sponsors and
things that look after me in my journey, but I wanted to make sure that that was easier to access for athletes all around the country and make it
easier to find those opportunities and have those fantastic careers.
QUEST: And then, of course, you know, we've got to say it, I assume someday you're hoping to IPO or your VCs will -- this is the big bucks. This is the
big one;.
RICHARDS: That would be -- that would be fantastic. An IPO would be probably a few years down the line just yet. We only launched earlier this
week, but, hey, you know, like I say, dreaming big is a big part of what has sort of held my sporting career, so why not?
QUEST: I am grateful to you, sir. Thank you for joining us. We wish you luck and we will follow -- we will follow closely what is happening.
If there is one person who I need to talk to today, there is one person. It is my dear and good friend, Peter Tuchman who joins me.
Yes, Peter, you have not let me down. You have the hat.
PETER TUCHMAN, FLOOR BROKER, QUATTRO M. SECURITIES: Yes, yes, yes! I will never let you down, Richard.
Of course, I do. I made it just for you.
QUEST: So what caused today? Why did it happen today when we had such a bad week so far?
TUCHMAN: I know. You know what? Look, it is always curious why and what makes this market move? You know, Richard, this index is -- you know, it
started in 1896, I believe I was here back then. It is a little -- it was a while ago. Some people believe I was here at the inception of the Dow Jones
Industrial Average.
But realistically, I've been here for at least the last 41 years of this, and I believe -- now, I think Dow 600 was the first hat I ever had.
Why did it happen today after the -- first of all, January was such an odd month in so many different ways, right? You know, everything possible that
could be thrown at a market has been thrown at this market in January. Right?
And then February, we are five days into February. We had a couple of days, Tuesday and Wednesday were mirror images of each other. Right? One day we
opened up and trended down, one day we opened down, trended up, and then the advances versus declines were 50/50. So it seems rotational.
QUEST: Right.
TUCHMAN: Yesterday was two-and-a-half to one, declines versus advances. It felt, with the VIX up 18 percent, it felt like people were starting to
really get anxious and fearful around, obviously the Bitcoin, silver and gold, you know and the jobs numbers and all of that and it was a bit of --
I don't know, it was by no means a bloodbath, but it was a significant sell off yesterday.
And I think a lot of people got caught up in that narrative that, look, you know, that this is going to be what February or 2026 looks like. And then
today, literally out of nowhere, we came in with just this irrational enthusiasm. You know, there was huge volumes. Think about this, February,
we have been trading $1.5 billion a day, which is $300 million more than usual here at the NYSE.
So, there is a lot of money being put to work. I believe that the buying is sort of buying with intent.
QUEST: Peter is -- well, you've just taken the buying -- is this -- it is the balancing act, Peter, between the fear of being on the wrong side of a
falling market and the fear of basically missing out on gains still to come. It is classic. I mean, it doesn't get more classic than this.
TUCHMAN: You know, it was -- you're absolutely right. It was -- that was the perfection. Yesterday, there was fear and anxiety and it was reflected
in the VIX, and then and then today it felt like it was FOMO, then nobody wanted to miss out on being -- participating in this, you know,
enthusiastic, somewhat irrational rally.
QUEST: Right.
TUCHMAN: But you know today, think about it. I always say that, you know, we are one tweet away from Crazy Town in this new world we live in, and you
know what I am referring to, and so anything can happen.
But when you're capable of having a thousand-point moves in one day, then I think people need to just stay the course because, you know, I believe a
lot of people sort of decided they were going to start bailing out of the market yesterday and think about how they are feeling today, when one day
does not make a market, but when you can move a thousand points in a day, the trajectory seems more bullish than bearish.
QUEST: So, pull the strands together. We've got -- I mean, we don't know what's going to happen really too much with the Fed. We don't know about
trade policy. We do know that these companies are spending hundreds of billions on A.I. and the market wants to rise.
TUCHMAN: Absolutely. Look, I think that the market -- you know, think about it. We touched S&P 7,000 a few days ago, right? And then we backed off of
that. It felt like -- and then we almost got close to the Dow 50,000 a few weeks ago and it felt like the market was not going to let us get there
easily. It was going to make us work for these levels.
[16:30:10]
We do know, obviously, look, Palantir earnings came out once again record earnings. The A.I. game is not over yet, that story has still got some
positive directionality. We know that Jensen told us in December that the next sector to be looked at is energy, and how are we going to fuel all of
these data centers, and that's either going to be the catalyst or the obstacle to taking this whole experience to the next level, and it seems
like they are finding a way to do it, and it is extraordinary.
It is an extraordinary -- these are not just numbers. I know the haters say, oh, the Dow is not a big index, and oh, these numbers are just
numbers. They are numbers. This reflects and incredible economy, right, and a resilience of the human spirit and the investor and also reflects in a
big way, Richard, which is the demographic which I call, it is the new retail investor, right? They are back. The retail investor are back and
they are now smart money. They were the ones buying the market in February, March, and April, when institutions were selling it. They were the ones
buying it in November, when everyone was all scared.
(CROSSTALK)
QUEST: Right.
TUCHMAN: The retail investor is the person to keep your eye on.
(CROSSTALK)
QUEST: All right.
TUCHMAN: Because they are here to buy this market.
QUEST: Absolutely. Good to see you, sir. Resilience of the human spirit. I can think of nobody who better epitomizes it than yourself.
(CROSSTALK)
TUCHMAN: I love you, man.
QUEST: I look forward to Dow 55,000, Dow 60,000 with you. Peter Tuchman at the New York Stock Exchange.
(CROSSTALK)
TUCHMAN: All right. I love you, sir. Thank you.
QUEST: Indirect talks between the U.S. and Iran have ended in Oman, what's next? We'll talk about it in just a moment.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. You and I have a lot more QUEST MEANS BUSINESS.
I'll be speaking to the Cornell Professor Eswar Prasad. This is his book on the economic "Doom Loop". I promise you, it's not nearly as depressing as
the title might sound.
And Japan's prime minister is promising to spend the country into economic growth if she wins the majority of the weekend snap election.
[16:35:00]
Only after the headlines, because here, the news will always come first.
There is a bipartisan backlash on Capitol Hill after President Trump posted a racist video of the former President Barack Obama and First Lady Michelle
Obama.
It depicted them as apes. The White House says the post was erroneously made by a staffer. It's since been removed from the president's social
media page. British police say they have searched two properties linked to Peter Mandelson over his ties to the convicted sex trafficker Jeffrey
Epstein.
Mandelson has been accused of passing along market sensitive government information to Epstein. The former U.K. ambassador to the U.S. has not been
arrested.
Authorities in Pakistan are investigating a suicide bombing in Islamabad. The attack happened at the Shiite Mosque during Friday prayers. More than
30 people were killed and roughly 170 people were injured. Pakistan's Taliban have denied any involvement.
The U.S. is keeping up the economic pressure on Iran, while diplomatic talks continue over its nuclear program. The two sides held indirect talks
in Oman. It's the first time U.S. and Israel since U.S. and Israel bombed Iran last summer. They agreed to hold more discussions, but no further
details have been given.
Now, the significance here is the U.S. rolled out new sanctions on Iranian oil and vessels. Kevin is at the White House -- Kevin Liptak.
Is it carrot and stick?
KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: It seems to be that way. You know, you have the stick of the tariffs. You also had, I think, a
significant stick in the meeting in Oman, you know, in addition to Steve Witkoff, the foreign envoy, Jared Kushner, the president's son in law, they
brought along with them the head of CENTCOM.
You know, the military commander for the entire Middle East, I think, trying to underscore to the Iranians in these meetings that the massive
military buildup that the president has ordered in the region remains, in his words, locked and loaded to carry out a strike, if these discussions
don't end up producing a deal, which to date, they have not.
You know, this meeting ended with an agreement to have more meetings.
(CROSSTALK)
QUEST: Right.
LIPTAK: But beyond that, even what is on the table for discussion doesn't seem clear. The Iranians just want to talk about the nuclear program. The
Americans want to add other issues, you know, the missiles and the proxies to that.
(CROSSTALK)
QUEST: All right.
LIPTAK: And so, I think unclear at this moment where exactly all of this is heading.
QUEST: I want to talk about the social media post, the racist post by the president's account. Now, the post that goes up depicting the Obamas. It's
a video depicting the Obamas as apes. It's up for 12 hours. It's in the midst of a posting storm. So, it's not like its isolation.
Karoline Leavitt sort of defends it, and then, everybody says, oh no, no, no. It was a staffer. Square the circle for me, please, Kevin.
(CROSSTALK)
LIPTAK: Yes.
LIPTAK: I mean, I think it speaks to two things. One was just the virulent racism that it contains, that no one seemed able to defend, except,
perhaps, for Karoline Leavitt, who said that it was fake outrage that everyone needed to move on.
I think, in the hours after she tried to make that excuse, it became very evident that even some of the president's top supporters here in Washington
weren't buying all of that. You know, I'm thinking of Tim Scott, for example. He is the only black Republican in the Senate who called it the
most racist thing he had ever seen coming out of this White House. That's what they were saying in public.
You know, I'm told behind the scenes that some of these Republicans were a lot more-blunt when they were talking, you know, to officials in the White
House and to President Trump himself.
(CROSSTALK)
QUEST: Right.
LIPTAK: Even some of the president's own officials were coming to him to say, look, you got to take this down. That is eventually what they did. But
they laid the blame at a staffer who was apparently posting from the president's account at midnight last night.
That's kind of a question, perhaps, for another day. You know, it's all kind of, of apiece. You know, the president has a history of these kinds of
things, particularly when it comes to the Obamas, you know, the birtherism lie that was marked his entree into politics, generally. It's all, I think,
of apiece.
QUEST: But Kevin -- but Kevin, this is the president who said he could shoot someone on Fifth Avenue and get away with it. In that environment,
bearing in mind, you know, he called Kaitlan Collins the worst reporter he'd ever seen, and asked why she doesn't --
This man calls another one, piggy. This man has no qualms or etiquette about what he will say. So, are we surprised?
LIPTAK: I don't think we are surprised that the president put this on his feed. You know, his Truth Social feed is just an amalgamation of often vile
A.I. slop, you know, intertwined with pronouncements about foreign policy.
I think what is a surprise is that the White House took it down, frankly.
[16:40:02]
You know, this is not a White House that admits a mistake very often. Part of that, I think, is because of this outrage from fellow Republicans.
(CROSSTALK)
QUEST: Right.
LIPTAK: You know, so often, the reflex of Republicans when this kind of things happens is to say that they hadn't seen it, or to make excuses for
the president. This was a very different response, which I think, perhaps, we could interpret as a sign of things changing in the Republican Party.
You know, the president is, by all accounts, at a weak point.
(CROSSTALK)
QUEST: All right.
LIPTAK: His approval ratings are at all-time lows. He is getting all kinds of blowback on immigration, on the economy. In this very important election
year, I think, Republicans are trying to ascertain where they need to break with the president to sort of save their own skin.
QUEST: Although -- many thanks, Kevin. You have given me the quote for my weekend ahead. I have to say. Vile, A.I. slop. Now, I think that's a good -
- I think that's one that I shall use liberally over the weekend in my conversation.
LIPTAK: Please do. Please do.
QUEST: Thank you, sir. Coming up -- Kevin, at the White House.
Professor Prasad says the world is spiraling towards increased disorder. There he is. We'll discuss what he calls the doom loop. And I do promise
you, it's not as depressing as it sounds, but at least he will tell us that anyway after the break.
(COMMERCIAL BREAK)
QUEST: Welcome back. Our next guest is warning that globalization has sparked a downward spiral that escaping it requires Herculean efforts.
Eswar Prasad writes in his new book, here, it is called "The Doom Loop". It's in which economic volatility from trends like globalization lead to
political backlash. Political backlash brought to power populist leaders, who undermine global rules. And there, indeed you get your "Doom Loop", and
the volatility goes round and round.
Professor Prasad is the Tillani senior professor of trade policy at Cornell. He is with me now. It's always good to see you. I'm so glad to
have you tonight.
What I need to understand from "The Doom Loop" is why it's different now? Because the circumstances you describe of various different points in the
book. We have had these things happen in a sort of way before, but it's not had that self-feeding philosophy that you now talk about.
ESWAR PRASAD, PROFESSOR, CORNELL UNIVERSITY: So, Richard, when you think about the way things work, you know, economics, domestic politics and
geopolitics always go in parallel tracks, and occasionally they intersect with each other. But now, I think they become combined in a way that is
very difficult to disentangle.
[16:45:01]
And these forces used to work in a positive direction in the early phase of globalization in the 1990s and the 2000s, when there was a sense that the
positive sum game of globalization. That everybody could benefit from free trade, for instance, would offset the zero-sum game of geopolitics.
But unfortunately, what happened is that the benefits of globalization were not evenly distributed within or across countries. This created a
disgruntled class of people that in turn infected the domestic politics. So, right now, even globalization, especially trade, is seen as a zero-sum
game, and it's no longer offsetting the zero-sum game of geopolitics.
So, essentially, each of these elements, economics, domestic politics, and geopolitics, rather than reinforcing each other in a positive way, are
bringing out the worst in each other.
QUEST: Which do you see at the moment as being the most serious doom loop?
PRASAD: So, all of these elements, as I said, are really entangled together. And the problem right now is that, you know, any element of
geopolitical strife that we see doesn't have a force that can offset it. And there are, you know, I should point out that when I started writing
this book, this was not the book I wanted to write, Richard. I wanted to write a much cheerier book about how we are moving from a unipolar world
with the fall of the Soviet Union, when the U.S. became dominant every respect, to one where economic power, at least, is more evenly balanced
between the U.S. and the Western economies.
On one side, China and the emerging markets on the other.
(CROSSTALK)
QUEST: Right.
PRASAD: And I was going to write about all the forces that would take us back to this nice state of play, but I quickly realized that all of these
forces are creating instability rather than stability, including forces like technology.
QUEST: But the problem is we -- you know, the temptation is for me to say, well, it's all Donald Trump or it's all Vladimir Putin. It's all the
results of these people who are on the autocratic side.
But the reality is, many of these loops are as a result, as you say, of technology, and there is nothing we can do about it.
So, Professor, if you're not to depress us all into the weekend, what are we to do about it?
PRASAD: Now, you made an important point, Richard, and I should point out, I finished the first draft of my book in October 2024, before Donald Trump
took power for the second time. So, this is not a book just about the U.S. or about Trump. It's about forces that I could see anything around the
world.
It's going to take some Herculean effort, as you pointed out. For us to get out of this, it's going to take each of us to become much more engaged as
citizens, not just of our countries, but of our communities and of the world. Seeing shared prosperity is the answer.
We need community, business, national leaders, who can help us see beyond the short-term prejudices.
(CROSSTALK)
QUEST: Yes.
PRASAD: And most importantly, we need domestic institutions, the rule of law, a free, and fearless press, and independent central bank, and also
international institutions that will maintain the rules of the game and allow us to go back to a world of shared prosperity.
(CROSSTALK)
QUEST: Yes. Right. But I can sum that up in one word, leadership. We need leadership, and that's the bit that's not there.
PRASAD: That's the difficulty right now. I spoke about better institutions. We need people who are going to build up and reinvigorated institutions.
But these are unfortunately exactly the same people, the false populace, who are tearing down the existing institutions. And unfortunately, all
these forces are feeding the politics of resentment, which certainly some politicians are very adept at exploiting, and they're leading us down a
very dark path. So, we really need to take matters back into our own hands as citizens.
QUEST: I'm very grateful. Thank you for joining us tonight. I appreciate it. Thank you.
In a moment, President Trump's endorsement of Japan's prime minister ahead of the snap election. In a moment.
(COMMERCIAL BREAK)
[16:51:24]
QUEST: President Trump is wading into Japanese politics and endorsing the country's Prime Minister Sanae Takaichi ahead of the elections. He called
her a strong, powerful and wise leader. The prime minister is expected to meet with Mr. Trump at the White House next month, but she needs to win an
election first. It's a snap election that she called.
CNN's Hanako Montgomery has more.
(BEGIN VIDEOTAPE)
HANAKO MONTGOMERY, CNN INTERNATIONAL CORRESPONDENT (voice over): Japan has caught the Takaichi Fever. On social media, videos of the country's first
female prime minister get millions of views. Recent polling shows, strong approval ratings. And unlike her recent predecessors, she has managed to
tap into young voters, some who obsess over her handbag, shoes, even her stationery.
UNIDENTIFIED FEMALE (through translator): I use the same pan as Sanae Chan.
YUHO OISHI, SUPPORTER OF SANAE TAKAICHI (through translator): You see her working hard all the time. Her smile is so cute.
MONTGOMERY (voice over): But while her charisma and star power are obvious, her policies as prime minister are less clear.
In her short time in office, her vague economic agenda has rattled markets, and relations with the country's biggest economic partner, China, have
soured, since she made comments that a Chinese invasion of Taiwan could trigger a Japanese military response.
She has done well in diplomacy, courting leaders from Italy, South Korea, the U.K. and even the U.S. president, Donald Trump.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: First female prime minister in the history of --
MONTGOMERY (voice over): Now, she is turning that momentum into a high stakes gamble, calling for a parliamentary election at a time when her
long-ruling conservative party is deeply unpopular.
MONTGOMERY: There are thousands of people here at this campaign rally to watch the Japanese Prime Minister speak.
Sanae Takaichi has called for an election just three months into her job, and she says that if her party loses, she would step down as premier. But
judging by the sheer number of people out here to support her, this is a political gamble that she thinks is going to pay off.
UNIDENTIFIED MALE (through translator): She is a drummer. I am a rock and roll musician. Ms. Takaichi is a same age as me. And when she became prime
minister, seeing her work so hard made me feel like life was worth living.
MONTGOMERY: We are in Nara Prefecture right now, which is where the Japanese Prime Minister, Sanae Takaichi is from and where she started her
political career. And we have traveled back to her hometown to meet some of her old friends and to understand why she is so popular among the Japanese
public.
MONTGOMERY (voice over): Osama Kikuchi (PH) has known Takaichi for more than 30 years, in part, thanks to this sports car.
OSAMA KIKUCHI, FELLOW OF SANAE TAKAICHI (PH): She is a passionate person. That's why her car is red hot too.
MONTGOMERY (voice over): He fixed up her beloved Toyota Supra, a car that helps her image as a cool girl. Takaichi is clearly a local legend in Nara,
and it's not hard to find traces of her here.
MONTGOMERY: We got some cookies here with Takachi's face on them, and the British former Prime Minister Margaret Thatcher, Iron Lady. Takaichi's role
model. And here, you have Takaichi with the U.S. president, Donald Trump.
MONTGOMERY (voice over): In the same neighborhood is Takaichi's district office. Here, we meet her secretary of 16 years.
MONTGOMERY: Why do you think she is so popular among the general public?
MAMORU KINOSHITA, NARA SECRETARY FOR PRIME MINISTER SANAE TAKAICHI (through translator): First, her consistent approach to policy, never wavering,
steadfastly upholding what she says from start to finish. It's fundamentally sounds. What particularly resonates with younger people is
that she writes policies in her own words, making them easy to understand.
MONTGOMERY: Do you think her comments on a potential Chinese invasion of Taiwan were an accident, or do you think that was on purpose?
[16:55:03]
KINOSHITA: I do not consider it a gaff. Naturally, it was simply a scenario. If Taiwan had warships, and if those ships were attacked, it
would fall within a hypothetical assumption. Her response was fully consistent with previous answers.
MONTGOMERY (voice over): Voters will soon decide whether her star power alone can revive her party. Or if her meteoric rise will end as quickly as
it began, leaving Japan at its most politically uncertain in years.
Hanako Montgomery, CNN, Nara.
(END VIDEOTAPE)
QUEST: Now, I do need to show you how the markets have finished. The Dow closing above 50,000 and the Nasdaq rising more than two percent. The S&P
was up similar amounts. If you look at what didn't gain, Amazon was one of the two components in the red. Oh, look at that.
It announced plans for $200 billion spending this year. Caterpillar was up seven percent to an all-time high infrastructure spending. That's why it's
a data centers. It's you're A.I.
Remember this is where sort of digitization technology meets the real world, because you've actually got to build things, buildings, data
centers, electric flats and things like that.
We'll have a "PROFITABLE MOMENT" after the break.
(COMMERCIAL BREAK)
QUEST: It's a "PROFITABLE MOMENT". Very profitable.
The Dow at 50,000. At one level, it is just a number. It's no different to any other. But at another level, it tells us so much about markets and
where people invest and where wealth is created.
For instance, if my late parents had invested a thousand-dollars on my birthday, March the 9th, 1962, today, that would be worth more than
$550,000.
So, whilst you've got your crypto and your gold and you've got your this and your that and your blockchain, Bitcoin, the reality is, for most of us,
it is the core market where the most gains are made. That is where your pension is going to show true fruition. That is where you are going to get
solid growth over the medium and long term.
But it's the long-term growth that is so unfashionable today, in the bid for a get rich quick scheme, a way to find money in crypto and avoid doing
the hard work of real investing.
Which is why I'm pointed out tonight. Just think about it.
[17:00:01]
Take 100 bucks or 100 quid or 100 euros, put it into something decent in the market, and now just wait. Water it every now and again and see what
happens. If my parents had done that, and I might not be talking to you tonight.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Whatever you are up to in the hours ahead, I hope it is as profitable. I'll
see you back in New York on Monday.
END
