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QUEST MEANS BUSINESS
Dow Off 310 Points; Oil Prices Plummet. Aired 4-5p ET
Aired December 11, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00]
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RICHARD QUEST, HOST: The Salvation Army ringing the closing bell, needs some salvation today. That was a quick gavel. The Dow was off 310 points, a
very sharp fall off the worst of the day. The gavel has been hit. Trading is over on what's been a shockingly bad today on Friday, December 11th.
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QUEST: Tonight, choking on cheap oil. Oil prices plummet. And as we've shown you, so do the markets. How to disappear completely. One of China's
richest men vanishes without trace. And better living through mergers. Dow and Dupont create a new chemical compound.
(END VIDEO CLIP)
QUEST: I'm Richard Quest. It is a Friday, and of course I mean business.
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QUEST: Good evening. Tonight, the price of oil is in virtual free fall, and it's taking stock markets along with it. Trading across the world has
finished. All the major markets are now closed. And it's left investors feeling left, right, and center when it comes to the selloff.
(BEGIN VIDEO CLIP)
QUEST: Just look at how the Dow has ended the day. Now, we're off the worst of the session. That was about 35 minutes ago when the Dow was off 340-odd
points. Since then a minor rally, nothing really to write home about. The market has closed down 310 and change, and it's off nearly 1-3/4%.
What drove the market lower was energy stocks, which were hard-hit as crude oil prices dropped. The selling was broad-based. If you take a look, you
can see the NASDAQ was down 2.2%. S&P was off nearly 2%. And the Dow Industrials was off. And to put this in perspective, it's the third triple-
digit loss this week. And you can see over the course of the Dow, well you would be able to if we could update, but some reason it's decided it's not
going to update. Let's try that one, no that's not going to want to update today either.
But the reasons behind the market selloff is pointing in one direction. Brent Crude, West Texas Crude. Crude prices have been sitting a seven-year
low. The Brent crude has dropped more than 5% today. Nymex West Texas dropping below 36. And the International Energy Agency says demand next
year is set to fall. There will be more oil to go around, and less demand for the oil that's there.
Look how crude has fallen. Now you'll be aware, that is the sharp fall that came after the Saudis decided they were not going to be the swing producer
and restrict under OPEC. Oil stays around $60 a barrel. Then it falls. That's the possibility of greater Iranian oil and slower China demand.
Stays at around $50 a barrel. And then over the last few sessions, we've got this very sharp fall to where we're now down under 40. Huge
implications for oil producers all over the world. Russia's Central Bank governor today admitted prices at under 40 were unthinkable just a year ago
and they're now a reality.
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ELVIRA NABIULLINA, RUSSIAN CENTRAL BANK GOVERNOR: (As translated): We are considering a risk scenario whereby the oil price falls below $40. Recent
oil price developments suggest that this scenario has become more relevant.
(END VIDEO CLIP)
QUEST: Tim Anderson of TJM Investments joins me now from the trading floor of the New York Stock Exchange. We're saying today's sharp equities
predicated by the fall in oil. But what caused the fall in oil?
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TIM ANDERSON, TJM INVESTMENTS: Richard, it's supply everywhere. Unlike the global financial crisis, '08, '09, when there was a very, very sharp cut in
global demand. Demand might be down a touch now, but the supply is everywhere. The Saudis made it clear, as you said, they're not interested
in cutting. Why? Because they know the Russians are not going to cut and they know if the oil gets back to 50 to $60 range, all the shale producers
in the U.S. will come back online.
(END VIDEO CLIP)
QUEST: Right, but Tim, looking at my graph here, we held around $50 a barrel for pretty much several weeks.
ANDERSON: Right.
QUEST: Why all of a sudden in the last three or four sessions do we get this under 40, possibly now testing towards 35 and 30?
[16:05:02]
ANDERSON: I - you know, it's very possible a lot of people have had this Katanga trade-on that they put on on occasion, where they in the past the
oil a few months out has always been 8 to $12 higher, they buy as much oil as they can and store it in tankers.
Clearly that trade has not worked in the last couple of months. And some of that oil might be coming on the market, just increasing to the supply.
And obviously the Iranians are coming on the market at some point in time.
QUEST: Now, just to jump in here, though, looking at it Dow, look, I can understand the geopolitical reasons for the fall in oil. But net/net, it's
a gain for industrial economies like the United States and oil importing economies like the Europeans. So why do we get this very sharp fall in
mature markets?
ANDERSON: Richard, look at the transport index. It is closed below its September lows for four days in a row.
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ANDERSON: You've been doing this a long time. Did you ever think you would see a market where the transportation stocks were trading at year lows, 20%
lower than a year ago, and oil was under $40?
QUEST: So that tells -
ANDERSON: I didn't -
QUEST: -- right that -
ANDERSON: -- Go ahead.
(END VIDEO CLIP)
QUEST: -- that tells me - that tells me that there are some very powerful forces at work here to do with China, to do with global growth, to do with
a fundamental feeling that there's something smelly under the economy.
ANDERSON: Clearly the brick countries and the emerging market economies that were going to have very high levels of growth just a few years ago,
they have all cooled down right now. Brazil has gone -- imploded and gone backwards a little bit. And China, people have a lot of questions about
exactly what China's growth level is, almost to the point where the data that they've been putting out has lost a little bit of credibility.
QUEST: Sir, good to see you. Try to have a good weekend, even with these numbers. Thank you, Sir. Tim joining us from the Stock Exchange.
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QUEST: Just to clarify, the market has now closed and it has settled, the Dow Jones Industrials is off just - well I say just it's off 309 points
when all was said and done. And European markets followed Wall Street down deep into the red.
The FTSE in London and the Frankfurt Dax slipped more than 2%. And it wasn't only oil prices that concerned the results of China's economy, a
slowing economy which weighed on the investors.
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QUEST: To put this into perspective, we often talk about Nigeria, we talk about Venezuela, we talk about the Gulf States. But of course the U.S.
state of Alaska is an oil-rich state. And the governor there says a combination of cheap oil and low flow is now devastating his economy.
Governor Walker believes firms are currently blocked from oil and gas protected lands. And now the governor is planning to bring back the state
income tax for the first time in 35 years.
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QUEST: He says he has to do it to boost Alaska's coffers. In 2012, the state made $6 billion in tax from oil and gas production. This year it was
just $390 million. Governor Walker joining me from Alaska. He told me his state is at a critical point in the economy.
GOV. BILL WALKER, GOVERNOR OF ALASKA: We've reached that day we can no longer just live off of resources along. That's partly because of our lack
of access to the resources to be able to fill the oil pipeline as it should have been some years ago. So it's a combination of that. But it's really
more of, you know, everybody has a part to play in this.
And so whether it then stays as an income tax, whether it goes over as a sales tax, I mean you know we're not particularly wedded to one versus the
other but we need to all be participating in this - in the solution. And that will - I have submitted a balanced budget, which will be the first
time we've had a balanced budget since I believe 2012.
So what I can't have is I can't have no options at all, sitting back, waiting for the price of oil to rise again is not a plan I'm comfortable
with. So we need to - we need to resolve this now, we can, and we need to work together to make that happen. So every industry, every form of
business, every resident of Alaska will participate in the solution, because we're all impacted by the problem.
QUEST: When you address the people of your state, and getting the tone right for this fiscal/financial crisis and the severity of it is going to
be important, isn't it?
[16:10:03]
WALKER: It is. And what I've explained to them, I have had the luxury of being a non-partisan governor, I'm not representing any particular party.
So I can - you know I can say it exactly the way it is without hesitation and without reservation.
You know and I tell it the way it is. I just tell, there's no spin involved in it. I just say, you know, this is a very serious situation. We can get
out of it, we will - we will get out of it, we'll build our way out of it. We'll make some adjustments, some changes. We'll go back to the -- I was
born in the territory of Alaska. I'm certainly familiar with you know the process we've used over the years as far as you know different forms of
broad-based income. So we need to pull together. We will pull together. We've done that before as a state during tough times, during the earthquake
in '64, some other tough times we've had. So we'll pull together again as Alaskans together and resolve this.
Nobody likes anything I've proposed. No one group has come out and says that's perfect. You know I think that means it's broad based enough that
everyone just likes it enough that I think it's going to be successful. I hope it's successful, because it's got to be broad-based. We'll pull
together, we'll make it work, we're Alaskans and we'll make this happen.
QUEST: That's the Governor of Alaska joining me earlier.
Call it the mystery of the missing CEO. One minute the head of the Fosun group vanishes and the next minute he's described as helping the
government.
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QUEST: We'll talk about that. It's "Quest Means Business" on a Friday.
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QUEST: One of China's biggest conglomerates may have worked out where its missing Chief Executive has gone.
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QUEST: It's the Fosun Group and it Guo Guangchang is helping, their words, with a government investigation. Of course we don't know much more. Mr.
Guo's wealth is estimated around $7 billion according to Forbes. The company has interest in everything from real estate to Club Med to Cirque
du Soleil.
Fosun gave this statement on his disappearance. "Mr. Guo may continue to take part in decision makings of the company's major matters via
appropriate means." The operations of the company remain normal. Mr. Guo is not the first top executive to go missing in China in some rather unusual
circumstances.
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QUEST: Our Asia pacific editor Andrew Stevens has sent this dispatch from Hong Kong.
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STEVENS: He's the Chinese billionaire often compared to Warren Buffett, the Founder and Chairman of one of the country's largest privately owned
conglomerates. And it seems that he's missing.
[16:15:02]
STEVENS: A representable Chinese business publication (inaudible) says Fosun has been unable to reach Guo Guangchang since noon on Thursday.
(Inaudible) is also reporting that he was seen being led away by police at Shanghai airport.
What we do know is shares of two Fosun companies that trade in Hong Kong have been halted. There's no mention though of Guo in the stock exchange
announcement. Fosun is involved in a wide range of businesses inside and outside China. It owns insurance companies including Portugal's biggest as
well as pharmaceutical companies. It also owns resort chain Club Med and has a stake in Cirque du Soleil.
Now Guo, is the 11th richest person in China, that's according to Forbes worth nearly $7 billion. Now to many this would appear an extraordinary and
even bizarre event. But he's not the first executive to go missing in recent weeks.
The country's biggest brokerage said on Sunday that it hasn't been able to get in touch with two of its top executives. And the Hong Kong arm of other
top Chinese brokerage says that it hasn't heard from its CEO since November 18th.
Now despite all that both brokers insist that operations are normal. But since the bursting of the bubble in China's stock markets during the
summer, business has been anything but normal as authorities hunt down those they say were responsible for that meltdown.
Andrew Stevens, CNN, Hong Kong.
(END VIDEO CLIP)
QUEST: Jamie Metzl is a senior fellow at the Atlantic Council, an expert at doing business in China, good to see you sir.
JAMIE METZL, FELLOW, ATLANTIC COUNCIL: Now to see you.
QUEST: So listen, all these executives going missing -- I say "all of them," several of them going missing, where people don't know what happened
to them. What do you believe is going on here?
METZL: Obviously they're in trouble in some way. And either they're personally being held accountable for something, or they're being used to
get information to go after somebody else. And it could be people in the business community, people inside of the government. We don't really know
because these people just vanish.
QUEST: And is it about do you think corruption? Is it about improper trading and dealing? Or is it just about undue risk-taking that's caused so
many of the problems? I mean, it's a combination of both that's the problem with China at the moment, it's not just one or the other.
METZL: Yes, well it is, absolutely. Because there is a lot of corruption in China. But whether it's inside the government or the business community,
when the government goes after anybody, there's always politics involved, because the system is inherently corrupt, that's the nature of the
communist structure that they have. And so when they go after somebody, it's usually, I believe, because they're either connected to either
somebody in the political world, but also there's - there's been a lot of ups and downs in the Chinese economy, and the party doesn't want to point
to itself, so it has to find culprits.
QUEST: When an executive goes missing, when you get this nonsense that things are normal, I mean you know, I'd like to see any executive in a
western company go missing and it be described as normal, but how damaging is it to people thinking about doing business? Or are we still so enamored
of the Chinese growth model such as it may be that we look aside?
METZL: Well the make-up is coming off and with slower growth we're starting to see China as it really is. A 10% growth for decades a lot of sins can
be forgiven. Now in this environment of slower growth, the Chinese government is starting to look like a much more flawed handler of their
economy. So we're seeing all of these - all of these warts, and it's very, very problematic. And the government is trying to reform. And that's this
difficult situation, they're trying to reform, but they have to deal with this incredibly difficult politics.
QUEST: I was just - part of me just wants to say though -- one would expect these people to turn up again, but then maybe not.
METZL: Well, some do and some don't. Some do, and then they say, like somebody showed up and said, oh, I was just on vacation and I was having
consultations and that's the best story from the perspective of these executives. And some are held incommunicado for months. And that's the real
problem is that China is so important to the global economy but there's very little transparency, the government does a terrible job of
communicating with the rest of the world and it creates a lot of unnecessary volatility.
QUEST: Sir, have a good weekend of consultations.
When we come back, politicians are used to battling out or battling it out -
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QUEST: -- but I mean it's not often you see a Prime Minister hiked up by his leg and tried to be removed. This is the Ukrainian parliament today.
Fisticuffs galore. We're going to be talking to the Foreign Minister of Lithuania to see what he makes of such goings-on. Its Quest Means Business
on a Friday.
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[16:22:34]
QUEST: One might describe the scenes as chaotic in the Ukrainian parliament after the Prime Minister was attacked by a member parliament.
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QUEST: Arseniy Yatsenyuk was delivering his annual report. An opposition MP approached him with a bunch of flowers, and then lifted him by the legs, he
hoisted the PM up, before as you can see a real (inaudible) got under way. The government coalition is under increasing pressure that the fight
against pro-Russian rebels in eastern Ukraine is still raging.
The U.N. Security Council has been meeting here in New York to discuss that very situation of Eastern Ukraine. The talks were initiated by the
neighboring country of Lithuania. You can see there nicely on the map, you've got Ukraine, Belarus, Lithuania, Latvia and Poland.
The Foreign Minister in Lithuania, Linas Linkevicius joins me now here in the studio.
(END VIDEO CLIP)
QUEST: Minister, good to see you. What is your fundamental concern vis-a- vis Russia now and Eastern Ukraine in the sense of how -- the situation it hasn't really deteriorated, the cease-fire of a fashion holds the Minsk
agreement. So what are you fearful of, that you require more U.N. involvement?
LINAS LINKEVICIUS, LITHUANIA FOREIGN MINISTER: You know basically the only good news, that less shooting, less firing, less victims (inaudible), but
also we cannot see the cease-fire enacted. And most alarming that Russia, which conducted aggression against that country, still denies being party
to the conflict. And during today's Security Council meeting, he repeated the same.
QUEST: But they're not going to suddenly stay you're right, Minister, we have been aggressors, we provided the book missile that brought down MH-17.
You don't expect them to say that.
LINKEVICIUS: No. But it should be -- you know, when you're coming from all sources, all kinds of information. You know the main concern, frankly, if
you ask the permanent members of the U.N. Security council, the Security Council is supposed to be guarding the system if you wish, and undermining
that system, undermining trust and doing that repeatedly two years actually - and that's alarming. So we have more than 30 meetings in the Security
Council on Ukraine with the outcome we all see.
QUEST: So the IMF of course providing money, even though it may be to Ukraine even though it may be in breach of default, they've changed the
rules or they're in the process of changing the rules. I presume you support that decision?
[16:25:05]
LINKEVICIUS: We support Ukraine, frankly. Because you know just two years as I said (inaudible) quite a little and countries are in a state of war,
they need full support in all areas, economic, financial, diplomatic, military I would say. (Inaudible) supporting quite vaguely but nevertheless
they made big progress during that time.
QUEST: Can I see the map, please, again, of the region.
(BEGIN VIDEO CLIP)
QUEST: Just I want to put to the Minister because one of the fears, as Ukraine became ever more -- as Russia became ever more belligerent towards
Crimea and others, is that through Belarus and others that Latvia and yourselves could become stabilized and ultimately could become at risk. Is
that still a fear?
(END VIDEO CLIP)
LINKEVICIUS: We are completely in a different situation. Latvia and us, we are members of NATO and the European Union. It's really not compatible with
the state of Ukraine, Georgia, Moldova. So why these things are happening, why these protracted conflicts --
QUEST: But they are pushing, aren't they? They are jabbing the Russians on those borders with the flights. They are testing the result not only of
NATO but of the E.U and the resolve to support countries such as Latvia and Lithuania.
LINKEVICIUS: But quite rightly so. Probing and testing, this is a very well-known method, and going as far as is possible until it will be
stopped, and usually they are not stopped, so they continue going.
QUEST: Are you getting the support you need, and do you require more support?
LINKEVICIUS: We as Lithuania?
QUEST: Yes.
LINKEVICIUS: Really I said this despite what the discussions, the decisions of NATO Summit in Wales for instance, now we're preparing for next summit
next year in Warsaw, and all thinking of our lives is in the right way, because we're threatening nobody, frankly, but we're doing our homework,
and that's really the case. But we are concerned of our station around. Coming back to your first question, are we concerned about what Russia is
doing. So it's not just us you know in mind. Because we are looking around but there's tons of other countries again, Georgia, Moldova, again, Ukraine
and we see no outcome, we see no results after all these endless meetings.
QUEST: Good to see you, sir. Travel safely.
As we come back in just a moment, we will turn our attention to a merger of a very different kind.
(BEGIN VIDEO CLIP)
QUEST: When you've got Dow and Dupont, it's a mega merger but is this the year of the general mega merger or are we seeing very specific, very
targeted deals?
Mega merges on Quest Means Business, after the break.
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[16:30:56] QUEST: Hello, Richard Quest and there is more "Quest Means Business" in just a moment where we're going to be talking about chemistry
in the air - Dow and DuPont announced a merger of equals and both are pretty big.
And no hoverboard onboard. Airlines ban one of this year's most popular Christmas toys. But before all of that --clears throat - excuse me -
this is CNN on this network the news always comes first.
The Taliban is claiming suicide attacks on a guest house near the Spanish embassy in Kabul. One source told CNN the embassy was hit on Friday when a
car bomb exploded.
The Spanish prime minister says a Spanish policeman was injured.
The day after the terror alert level was raised in Geneva, police in the city are now looking for at least five suspects.
According to a source close to the investigation, they're suspected of being part of the network whose leader recruited one of the Paris
attackers.
The Russian President Vladimir Putin has vowed to, in his words, immediately destroy any threat to Russian forces in Syria.
He issued the veiled threat to Turkey during a defense meeting in Moscow just two weeks after Turkish military jets forced down the Russian jet on
the Syrian border.
(BEGIN VIDEOCLIP)
VLADIMIR PUTIN, RUSSIAN PRESIDENT, VIA INTERPRETER: I order to act extremely tough any targets threatening Russian armed forces group or our
ground-based infrastructure are to be destroyed immediately.
QUEST: FBI teams are diving into a lake a few kilometers away from the San Bernardino crime scene. The investigators could be looking for the hard
drive missing from a computer of Sayed Farook and Tashfeen Malik.
The couple visited the lake at some point before they killed 14 people last week.
A new poll shows most American adults oppose Donald Trump's plan to ban Muslims from entering the U.S. However, the support - the proposal does
have more support - among the Republican party base.
Mr. Trump continues to lead the most polls despite widespread criticism of the proposals. His rival Carly Fiorina tells CNN's Chris Cuomo that Trump
plays the media like a master.
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CARLY FIORINA, REPUBLICAN PRESIDENTIAL CANDIDATE: He knows how to dominate the news coverage and I think it becomes a self-fulfilling prophecy in the
polls.
I'm not saying he doesn't resonate with voters. Voters are deeply afraid and voters are very frustrated. And in a way, Donald Trump is a reaction
to the unbelievable weakness and delusional nature of national security policy from Barack Obama and Hillary Clinton.
(END VIDEOCLIP)
QUEST: One of the year's biggest mergers has been announced. Dow Chemical and DuPont are to merge and they are going to form DowDuPont. Such great
originality in the title.
The new company will be worth $130 billion and becomes the world's largest chemical maker.
Now, it's only one of many mergers in recent months where two market leaders have combined. You'll be familiar with Pfizer and Allergan. I'm
sure I've that wrong every single time I've said that name.
Anyway, those two form $160 billion, the second biggest merger of all time. And then you have Marriott which bought Starwood. That's worth $12 billion
although in this case Starwood was in trouble and Marriott may have rescued.
In October AB InBev agreed to buy SAB Miller, making the world's largest beer maker. And that's waiting regulatory approval.
And now you have the Dow and the DuPont. So what is driving these mergers? Do they make sense and are we off to the races once again in some sort of
orgy of merger mania.
John Authers is here. He's the man who should know about these sort of things. Good to see you, John.
[16:35:] JOHN AUTHERS, SENIOR INVESTMENT COMMENTATOR, "FINANCIAL TIMES": Orgies of merger mania, yes. And -
QUEST: We've been there.
AUTHERS: Done that too.
QUEST: We've been there, seen there, done it.
AUTHERS: Yes.
QUEST: So tell me is this different? I mean, as I look at these deals, there is a there's a qualitative difference about them.
AUTHERS: No, exactly. Compared to the late 90s, we haven't had any of the true jaw droppers where as soon as you hear the deal, you just go `that's
madness,' that can't possibly make sense.
When it comes to the strategic rationales that people are giving, the top of the last really big merger boom, all of the deals were supposed to give
you revenue signages (ph). Do you remember that concept?
They weren't going to cut any costs though they were just going to boost revenues by putting themselves together. They were going to radically
reform the strategy of some whole new sector.
This time around it's about rationalizing, it's about cost cuts, it's about tax efficiencies often. It's a very much more conservative, less ambitious
attempt to eke as much money as we can out of what's out there.
QUEST: But is it - just taking down DuPont.
AUTHERS: Yes.
QUEST: One gets the feeling this is the sort of merger that many in the companies would like to have done -
AUTHERS: Yes.
QUEST: -- over many years but never thought either the moment would be right -
AUTHERS: Yes.
QUEST: -- or the regulators would allow it.
AUTHERS: I think that's probably true. I mean, it's very intriguing that they think this can past anti-trust because certainly I' m no great expert,
but the chemicals that they do roughly the same thing and they're the two biggest players in many of their markets.
Also very intriguingly because they're going to split themselves into three thereafter. And you would think each of the three new companies are going
to be very dominant in their particular segment that they're creating.
I think people are that much more accommodating at this point because the environment is that much more difficult for growth (inaudible) share.
QUEST: Related to that, the Pfizer Allergan - the criticism of their and I think you might have even made this criticism.
AUTHERS: (Inaudible).
QUEST: Was that a deal predicated purely on tax savings -
AUTHERS: Yes.
QUEST: -- or even cost savings but doesn't have a growth component -
AUTHERS: Yes.
QUEST: -- is basically financial engineering but not a real merger.
AUTHERS: Yes, precise - well I can only say you always make the impersonal finances as well.
If you're letting a taxpayer wag the investment dog, it's generally a bad idea.
Certainly in terms of the great rubric of whether there is a crash between Wall Street and Main Street. You can see that. In this case this plainly
will be pretty good for shareholders.
I don't know how good, but it will produce some money for the shareholders - it's going to be in layoffs.
And Allergan and Pfizer similarly you have a big issue there of whether it's really going to boost the economy even if it does boost shareholders.
QUEST: From what you're understanding, are the great M and A banks - the Goldmans, you know, the Barclays, the Morgans -
AUTHERS: Yes.
QUEST: -- and HSB. Are they running `round the world now salivating at what they believe will be opportunistic moments like, you know, to pick up
business from companies waiting to do deals?
AUTHERS: No. I don't think - I think we're pretty close to the top of the cycle and I think most bankers would probably, well, whether they were an
asset on the record is (inaudible) good.
QUEST: No, they wouldn't, they wouldn't.
AUTHERS: They're never going to do that. I don't think people are salivating. I think people are a little bit nervous.
This does, as I said, we haven't reached the moment of supreme overconfidence. We had that in the AOL Time Warner deal of unbelievable
(inaudible) risk this cycle.
But there is still a sense that this is getting about as good as it's going to get, I would say.
QUEST: You say AOL Time Warner in the fort hallable (ph) of this building and the walls do not collapse. Thank you, sir.
I remind you of course that AOL Time Warner - Time Warner parent company of this network.
U.N. Secretary Ban Ki-moon says delegates at COP21 talks in Paris have almost reached a deal, it's a big (inaudible) to tackle climate change.
The French foreign ministers says it won't be done until at least Saturday.
Today had been floated as the possible decision day. The former Mexican president Felipe Calderon says any climate deal won't hurt economic growth
when he spoke to Paula Newton.
(BEGIN VIDEOCLIP)
FELIPE CALDERON, CHAIRMAN, NEW CLIMATE ECONOMY: We cannot say that any single measure would provide economic benefit.
We can say that we take the right steps in order to frame in a comprehensive way a model to a low carbon economy, we will not lose
economic growth or we will not lose the potential job we can create.
So if we do the right change in the next 15 years, we can have better growth and better climate at the same time.
And that is going to be in favor of all the countries. Some of them with bigger benefits, some of them with lower benefits.
And there will be winners and losers and for each specific country we can decide a way in which they can make the transition, get a benefits and
compensate to the losers in each country.
[16:40:08] PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: You know, but what you propose - you say that you didn't want to talk about optimism, but
what you're proposing is something quite optimistic.
I mean, in terms of the concept that you're talking about, do you envision a country like India - the third largest polluter in the world - coming on
board?
I mean, Mr. Modi has been quite clear where he stands on this.
CALDERON: I know that and accordingly kept some concerns about emissions, especially Mr. Modi. And I tried to understand what is happening there.
I'm willing to say that India, third world country, is right (ph) in that, second, India is the largest democracy in the world.
And I remember myself as a leader of a country, anything (will war do) pronounce (ph) has repercussions with your constituencies, with your
congress and with your media.
So we need to take care -- we need to take in account that situation.
Now, Mr. Modi's government is doing real things in favor of tacking (ph) climate. For instance, its emissions program related to renewable energy,
solar energy in particular.
They are talking in some way that they don't want to quiet from the program related (ph) with coal facilities for instance. At least they received a
way to be compensated for that.
And if we think about it, maybe that is fair. Maybe we need to design a world in which India and other poor countries will be compensated.
Maybe we need to design a real pragmatical mechanism in which anyone could take their right of (stead) without suffering in economic tariffs (ph).
QUEST: No more hoverboards onboard (RINGS BELL). The airlines are banning one of the most sought-after gifts in 2015.
After the break, just see how I fair with one of them.
(COMMERCIAL BREAK)
QUEST: Ah hah! It's the must-have gift of this holiday season. But now airlines are banning them from being taken onboard flights.
So you join me at the hover station as we point out just what this year's travelers are really wanting.
But if you do have one of these machines, do not think for a moment that you're going to be able to take it onboard a plane because all the airlines
- most of them, more and more of them - can I go backwards on this thing without doing a serious injury? Maybe.
[16:45:17] United and American have joined British Airways and several other carriers to say no to hoverboards, saying that they are a hazard.
The fear is over the lithium batteries that are within them. Well if you've ever seen the video of them, these self-balancing scooters, some of
them are overheating and catching fire like one that happened at the shopping in the U.S. state of Washington.
The airlines say the hoverboard makers aren't disclosing enough information about the size and power, and that's way Virgin America, Alaska, Delta,
United, B.A., JetBlue, American and many, many more.
Hoverboards have aided and abetted mischief in the past. In one case - look at this - the thief used it to steal from a convenience store and then
rode off into the distance.
They have been declared illegal in London and in New York to ride in public.
I managed to get one and I managed to get - come here. I managed to ride one. The problem is getting on these things.
But once you're on it, I managed to get one to ride on assignment in South Korea.
Help, Mother.
Right, so new technology is always problematic. In the case of computer hackers, they don't need fancy gadgets to get them into the systems of even
the biggest companies.
All this week Laurie Segall has shown us the secret world of the super hacker.
(BEGIN VIDEOCLIP)
LAURIE SEGALL, TECHNOLOGY CORRESPONDENT FOR CNN MONEY: What do you think of when I say the word hacker?
Some creepy dude in a basement? Well, that's a misconception. What if I told you there's a class of hackers who don't just have social skills, they
have more social intelligence than anyone you'll ever meet.
David Kennedy is one of them. He's what's known as a social engineer or a people hacker. His craft is to dupe you into doing things and sharing
information you probably shouldn't.
DAVID KENNEDY, PEOPLE HACKER: Could I just get your credit card number?
SEGALL: Some use it for illegal activity. In David's case, companies pay him to find out if employees are leaving the company vulnerable.
He and his team show us how it's done.
Step one, spoof his number so it looks like he's calling from inside the company and then call tech support.
KENNEDY: Hello, are you there? Hello.
KEN, TECH SUPPORT: Hi, it's Ken, can I help you?
KENNEDY: I was wondering if you can take a look at a website I'm trying to get to. It's' for a big customer thing I'm working on for Monday and I
can't seem to get to the website from my computer.
KEN: Sure. What website? I'll see if I can get to it.
KENNEDY: Thanks, Man, I really appreciate the help. I mean, it could be a stupid thing, I barely suck at computers, but - so it's www.survey-
pro.com.
KEN: Yes, I got a prompt to open. I just clicked open and I'm at the site now.
SEGALL: Here's what the IT guy doesn't realize. By clicking that link, he's just given David full access to his computer.
KENNEDY: Whoa, OK that's great. I just hit it and it seems like it's working fine now. Awesome. I don't know what you did, man, but I really
appreciate the help.
KEN: Hey, no problem. That was easy.
SEGALL: That was it?
KENNEDY: We're on his computer right now.
SEGALL: You were able to take over this guy's computer within I would say like under two minutes.
KENNEDY: Under two minutes, yes. Under two minutes took over his entire computer and think of it as not just his computer but it's () the entire
company.
SEGALL: In this case the company was paying David to hack them and see if their employees will fall for it. They did.
To show you this demo we agreed not to use the company's name. Kennedy hacks to protect. He's part of a growing number of hackers using this
skill for good.
Josh Corman's one of them too. He started a group to help bridge the gap between hackers and big companies.
JOSH CORMAN, HACKER: Hacking is a form of power, not surprisingly as you walked into my house and saw all the Spiderman stuff.
I'm a big fan of the Stan Lee line of with great power comes great responsibility.
We're coming to a point where in the outside world there's a breach a week, a breach a day affecting people's personal lives and national security.
We've got to grow up a bit and we need to be very deliberate about how we use that power.
SEGALL: Corman formed the group after his mom passed away.
CORMAN: She was my science teacher. She kind of taught me that darkness is the absence of light, you know. If you see something missing in the
world, maybe it's our job to put it there.
There are very, very bad people which means it falls to the good people to try to fight it.
SEGALL: You feel like you have a very personal responsibility.
CORMAN: We have so much potential to shape our culture, our values, our safety. If not us then who?
(END VIDEOCLIP)
QUEST: Laurie Segall reporting.
Fast food that, well could have you fast heading to the smallest room in the house. Chipotles reputation is taking a serious hit over the latest in
a string of food safety issues.
Now the fallout's being felt online. You of course will have a moment to enjoy "Make, Create, Innovate."
(COMMERCIAL BREAK)
[16:52:40] QUEST: Shares in Chipotle have closed down nearly 2 percent, the fallout from a food safety scare continues to grow.
So let's go down - 1.8 percent - 565. But the shares are down almost 20 percent on the year to date.
The Mexican restaurant chain is still dealing with an e. coli outbreak that made 52 people sick. Now that was over nine states including California,
New York, Ohio and Illinois. A vast wave of - well not huge wave, coast- to-coast.
Then there was the salmonella outbreak in late August. That was in Minnesota. And now the norovirus has struck with 141 Boston college
students being sick after eating at Chipotle Restaurant near the campus of the university.
E. coli, salmonella, norovirus. The fallout's spreading online. CNN's Christina Alesci is with us. Good to see you.
CRISTINA ALESCI, CNN MONEY CORRESPONDENT: Nice to see you.
QUEST: Is the company just unlucky? Is it just bad luck that they have been the one hit by three health scares?
ALESCI: There is an element of bad luck here. There's also an element of the fact that now the company is under the microscope.
Just yesterday made national headlines that one of its stores was closed for a health code violation, right. It's anything that happens with
Chipotle around food safety now is just going to be a national story.
So that's part of the problem here. And I spoke to just so many food safety experts who tell me, look, for the most part, companies really don't
take food safety seriously until something like this happens.
So when something like this happens, they go crazy with food safety.
QUEST: Is the company perceived to have been doing a good job in handling these crises?
ALESCI: It's a little bit of a tough spot they're in because they have to wait for the federal government to give them the signoff.
So some people have said why hasn't the CEO been out there apologizing more and been more vocal about - look, people got sick.
E. coli is not a pretty thing to have and some people consider the fact that he wasn't out there a big affront to their customer base.
[16:55:01] QUEST: But that - well sure, but hell, that -- that's PR 101. Even if you can't say look, you know, we did it or whatever but we are -
the empathy.
ALESCI: OK fine, Richard. But as you know, liability here rules, right? If you come out as a CEO before you know exactly what's going on and you're
apologizing for a problem, you're putting yourself in a situation where you're opening up yourself to more liability and that's the problem that
Chipotle faces.
It's really between a rock and a hard place. You going to have some?
QUEST: I promised to take you out on a date -
ALESCI: (LAUGHTER).
QUEST: Hey, big spender.
ALESCI: OK. Yes, (LAUGHTER). You got the wrong gal. You must have been thinking about somebody else.
QUEST: You just choose what you like. (LAUGHTER).
ALESCI: It's all for you.
(LAUGHTER)
QUEST: A "Profitable Moment" (RINGS BELL) after the break. "Quest Means Business."
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." So, the Dow closes down 309 points, oil is off 3, 4, 5 percent and it starts to feel as if some of the wheels
are looking wobbly on the financial world.
And guess what happens next week? The Fed. Yes. Interest rates probably going up next week on the 16th as the Fed decides it's time to start
tightening monetary policy.
It's going to be an exciting week with volatility left, right and center.
And that's "Quest Means Business" for tonight. You better join us next week. I'm Richard Quest in New York. Whatever you're up to in the hours
ahead, (RINGS BELL) I hope it's profitable.
Let's make a date to be together for Fed week next week.
END
