BUSINESS-01
Bank Attempts to Prop Up Stock Market. Aired 4-5p ET - Part 2>
manipulations detailed.>
(BEGIN VIDEOCLIP)
DIOSDADO CABELLO, OUTGOING VENEZUELAN NATIONAL ASSEMBLY PRESIDENT: As soon as President Maduro sends us that emergency economic decree, the deputies of our block will support it and defend it here from the Opposition.
(END VIDEOCLIP)
QUEST: CNN's Shasta Darlington is covering this story from - Shasta's in Rio. This was a battle that was going to happen as soon as the Opposition won control of Parliament, it wasn't a question of if there'd be a showdown with Maduro, it was when.
[16:35:09] SHASTA DARLINGTON, CNN CORRESPONDENT: You're absolutely right, Richard. And in fact, the showdown started even before the lawmakers were sworn in. The decree that you talked about regarding the central bank, well that was passed before they were sworn in precisely to prevent the Assembly from taking some of the measures that it could have taken if that hadn't been passed, whether that would be appointing directors or really preventing the Central Bank from printing money so freely the way it does currently. And you'll - you've - seen the reaction in the markets. Among economists the concern is this could actually speed up hyperinflation, Richard.
QUEST: All right, so how does this resolve itself? Because for those of us, myself included and I'll put my hand up, who are not as 'oh corrol' (ph) with the constitutional niceties of the Venezuelan government, if you have a parliament that is clearly in opposition to a sitting president, does Venezuela - who's in control here?
DARLINGTON: Richard, it's going to be a long-term power struggle here. The Opposition won a two-thirds majority, a supermajority, in these elections last December with 112 lawmakers elected. But today what we saw is that three of them weren't sworn in, and whether or not this is another political play is of course a question many are asking, it's because the Supreme Court ruled that those three couldn't take office because they were still facing legal objections to their victories. Well that means they no longer have that supermajority that limits some of the measures they can take in Congress. There's been a lot of discussion about that criticism in Venezuela outside of Venezuela. We heard the U.S. State Department accusing the Venezuelan government of interfering in the constitutionally-mandated basically legislative process there. So there is going to be a lot of back and forth. One of the things that the Opposition had hoped is with a supermajority they could actually take some steps towards removing Maduro from office. It would be again a lengthy process, something that would have to be taken to the public for voting. But this will all depend on what happens to those three lawmakers -
QUEST: All right.
DARLINGTON: -- that at this point have not been allowed to take office. We're going to see this battle played out of the coming months, Richard.
QUEST: And, briefly, the economy whilst this goes on, the economy just gets worse.
DARLINGTON: Absolutely. And I think that's something that we should all recognize. It's not like there's some magic wand - oh, if Maduro were no longer president or oh, if the Opposition had the supermajority things would be solved overnight. They wouldn't This is an economy that has been based on oil revenues for decades. It has become more dependent on them since Hugo Chavez sort of created this socialist government beginning in 1999 using those revenues to fuel and to fund his social programs. More than 90 percent of export revenues are from oil, but this is something that's going to be solved overnight, Richard.
QUEST: Shasta Darlington who's in Rio for us this evening. "Quest Means Business," we will continue in a moment.
(COMMERCIAL BREAK)
QUEST: China has pumped nearly $20 billion into its financial system a day after fears about its economy sent markets around the world into the red. [16:40:02] Adding another $200 billion or so the government spent to prop up the markets over the summer, and yet through it all Sir Martin Sorrel has remained bullish on China's long-term prospects. Sir Martin is the chief exec of the agency WPP. Sir Martin is with me from Las Vegas. Good to see you, Martin. Happy New Year to you, sir.
SIR MARTIN SORRELL, CEO, WPP: Good to see you, happy New Year to you, Richard. We're not an agency, we're a group, a parent company.
QUEST: You're a conglomerate. Right.
SORRELL: No, that's even more offensive, not a conglomerate. A focus group of advertising and marketing services company.
QUEST: Right, let's get on with talking about China if we may. Look, you -
SORRELL: Right.
QUEST: -- fundamentally believe that the - we - shouldn't necessarily focus on this very short-termism. But the economy in China is in trouble.
SORRELL: Right. Well, certainly the economy in China has slowed down markedly. I think we've said to you and others for a considerable period of time even the official estimates of GDP growth of 6 to 7 or 7.5 percent were on the high side. I think we've been talking about the economy growing at 4, 5 or 6 percent over the years. I heard somebody on a competitive network to you talk about 2 percent I think it was early this morning here from Las Vegas. But whatever the rate is, you have to remember that the Chinese economy is now $11 trillion. That is the second largest economy in the world - second only to the United States. But it took the United States 100 years to become the world's foremost economic superpower. China is in the process of becoming the world's -
QUEST: Right.
SORRELL: -- biggest economy. I still think that will happen. It took 100 years for the U.S., China's done it much more rapidly basically since 1985. I do think the last 200 years has been a blip in history, and looking at the long-term future of the BRICs and the Next Eleven - whatever is happening to emerging markets or fast-growth markets or slow-growth markets -
QUEST: Right.
SORRELL: -- currencies - whatever is happening to their GDP, in the long term this where the population expansion is going to come from, this is where the younger people of the future - the young consumers - are going to (inaudible). And last but not least, I was talking to your colleague about the new competitor to Tesla which comes from where? From China. So, technology - and here we are at CES - Chinese technology, whether it be Huawei, or Xiaomi or Lenovo -
QUEST: All right.
SORRELL: -- or this new competitor to Tesla, we have to get real about this, Richard. We may not like the idea or some of us may not like the idea of there being a G2 world where U.S. and China dominate. But still the delta in our industry - the increasing growth in our industry last year - came from where? Two -
QUEST: All right.
SORRELL: -- economies. China growing more slowly and the U.S.
QUEST: So, with that in mind, how then -
SORRELL: (Inaudible).
QUEST: -- do you - how then do you - balance the need to do business in China with the fact that -
SORRELL: Right.
QUEST: -- it is slowing down and there are these very damaging rippling effects across the emerging markets?
SORRELL: Well certainly, you know, I've been doing this some people think too long, but for 30 years, and I take a long-term view. I'm a long-term shareholder in WPP. I'm not a short-term Johnny come lately. I'm going to take another 30-year view not that I'm going to be here for another 30 years. But we focus on the fast-growth markets, we focus on digital, we focus on data - those three areas. And here at CES, it's resoundingly clear that technology, data and content are going to become more and more important and we are making -
QUEST: Right.
SORRELL: -- long-term investments, we're not scared by disruption. We're not scared by the short-term zero-based budgeters. We're not scared by the activist investors who insist on looking maybe at the short term. What we are focused on is the long term and making sure that WPP is as strong in the future as it has been in the past. So you come to Las Vegas for a healthy dose of paranoia --
QUEST: (LAUGHTER).
SORRELL: -- and worry about who's going to distance and mediate (ph) you -
QUEST: All right.
SORRELL: -- and what you have to do to invest for the future. Not to cut costs, not to worry about what Richard Quest says on CNN about the short-term prospects of China.
QUEST: Are you going to be in Davos, Martin? Will I see you there?
SORRELL: I am.
QUEST: Excellent.
SORRELL: I am, most definitely.
QUEST: We do it all over again in a couple of weeks in Davos. Martin, lovely to see you.
SORRELL: Well, thank you very much. Good to see you, Richard.
QUEST: We'll continue in Las Vegas where carmakers are driving onto center stage at the Consumer Electronic Show. And one upstart is taking on Tesla as you just heard. We'll talk about that. First, you need to pause, you need to think, you need to make, create, innovate.
(COMMERCIAL BREAK)
[16:46:41] QUEST: Martin Sorrell's already told us about the CES - Consumer Electronics - but it is a chance for the world's gadget makers to show off their vision of the future. And this year, it's all about what's happening on wheels. For instance, in the garage at "Quest Means Business" you have Ford which is tripling the self-driving car fleet. It is also partnering with Amazon. And the idea is it will join with a connected home with a connective car. The goal ultimately, you go start and stop your car from the sofa although why on earth you would want to do that, I have no idea. But you can also check the fuel range as well - it won't do you much good. Now other carmakers - other industries - for example NVidia - yes, look at that. Now this little thing is a super computer for the car. It senses the surroundings, it enables autonomous navigation. That's a posh way of saying self-driving cars. But all these things they're talking about, but this is what everybody's really excited about. Open the garage at the Faraday Future which unveils its all-electric supercar. It's called the FF01. It's up to 1,000 horsepower and a single seat. And it's all designed to set up the competition with Tesla. Samuel Burke is at the Consumer Electronics Show.
(BEGIN VIDEOCLIP)
(APPLAUSE)
SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: Please meet Faraday Future's FF01 concept.
(APPLAUSE AND MUSIC)
BURKE: What is the goal of Faraday?
RICHARD KIM, HEAD OF GLOBAL DESIGN, FARADAY FUTURE: Most importantly, to have a seamless, beautiful experience. Everything is smart, everything is intelligent. Why isn't the car smart? We haven't seen a car that's up to speed as basic consumer electronics. That's an important tic in the box that we're trying to do.
BURKE: Is this an electric car or a driverless car?
KIM: Oh, it's definitely all electric and we are always working towards full autonomy (ph).
BURKE: What makes this car unique? Can you point out certain parts of the design that set it apart from other cars?
KIM: Yes, a really cool view is from front to rear. There are these endless tunnels so that the air can flow straight through the car, cool your batteries, of course aerodynamics. And all of those things they sum up to be a range (ph) and that means we're going to go forever without charging.
BURKE: I just drove from Phoenix to San Diego for $30 --
KIM: Yes.
BURKE: -- for a tank of gas.
KIM: Yes.
BURKE: So was there a time when gas was so expensive, that was the time for electric car and maybe now it's passed?
KIM: No, no, no because it's about doing good things for the earth. We have to clean this pollution up. And you don't have to sacrifice anything for being sustainable. This is a 100 percent sustainable electric, non-polluting vehicle and it could be as dynamic as a 1,000 horsepower.
BURKE: Is this exactly what we should expect on the road in a couple of years' time? S
KIM: This car concept is road worthy. You know, we could take this on the track. We don't have plans for that and we're not communicating that right now. We're still focusing on our first production car. But this is an ongoing study. This isn't like a random sculpture. You know, this is a serious project that we're doing in parallel to our regular work.
[16:50:05] BURKE: And how soon could I see one of these cars on the road?
KIM: In this concept or one of our first cars?
BURKE: Right.
KIM: A couple of years.
NICK SAMPSON, SENIOR VICE PRESIDENT, RESEARCH AND DEVELOPMENT, FARADAY FUTURE: At FF we believe with every bone in our body that the world is ready for a new way of looking at mobility. Nine years ago this very month the iPhone was announced. Apple didn't just redefine the phone, it transformed the way we communicate, organize and enjoy our lives. And that is what we at Faraday Future are looking to do - help redefine the world of mobility.
(END VIDEOCLIP)
QUEST: His fingers were already going to get a workout after a pledge to code his own personal assistant in the year ahead. Now Mark Zuckerberg has decided never mind the fingers and the arms, he's going to stretch his legs as well. Zuckerberg is calling 2016 the year of running. The Facebook co-founder and chief exec says he'll jog 365 miles this year - oh, a mile a day - and post updates on his progress to Facebook. With me is Jean-Pierre Regis, the founder of Swagger.com, a pop culture and lifestyle blog who we hope will be here much more often. What do you make of this, Jean-Pierre, this - first of all he tells us he's going to do code, now he says he's going to run (RINGS BELL). Who cares?
JEAN-PIERRE REGIS, FOUNDER, SWAGGER.NYC: (LAUGHTER). Well listen, he's a brilliant businessman, right? He holds the spout to the social internet. He can touch more people than any media outlet anywhere. And so why not use that to his advantage? Why not say -
QUEST: So what advantage though?
REGIS: To show that he is not only sort of a geek if you will, but he's a cool guy too, right? He is pushing people to not only be athletic but also, smartly, be athletic on his platform. Sign up to Facebook to be on these public forums to show that you are invested and spend time on his platform.
QUEST: Right, spend time on his platform which of course is one of the most unhealthy things to be doing - sitting in front of a computer or on your phone instead of having a conversation.
REGIS: And I'm not denying that, but, again, as a business - as a smart businessman - who understands the importance of a brand and content building a brand, he is doing just that.
QUEST: This has got as a guru about it. I'm going to read two books a month, I'm going to learn Mandarin, I'm going to run 3 - who I mean?
REGIS: In this day and age, Richard, you know better than anybody else the importance of a brand and building a brand. Look at these celebrities here - Kim Kardashian for example - 65 million Instagram followers she can reach immediately with a touch of a button in a tone that speaks to what she wants to put out there. He has 1.-some odd billion followers. He can control his brand, he can control what people think about him -
QUEST: To what end?
REGIS: -- and what he's doing. It is so smart. He doesn't need us. He doesn't need media, he doesn't need journalism, he really can control the conversation that's being had around him and -
QUEST: But why? Why -
REGIS: Because -
QUEST: -- why's it necessary? Because, look, he's created Facebook and Facebook is great and people love it and it's exceptionally successful.
REGIS: Yes.
QUEST: So why does it need him?
REGIS: Great point. Because there are so many things that are happening around Facebook that are not - that are pejorative, right? We have the internet.org. A lot of people are, you know, lambasting that. Why not then own the conversation and say don't read about that, read my updates about running 365 miles a year. You know, read my update about how you can better yourself and share, share, share. That's what he's doing.
QUEST: It's taken - I mean, I can honestly say I can't remember too many CEOs - in fact I can't think of any besides this case where we are following them with such closeness.
REGIS: Oh, there are none. I mean, he is the first. That is not, you know, out of the Hollywood set, if you will.
QUEST: Musk - Elon Musk arguably, do we - no?
REGIS: No, not really. I mean, he can - again -- he cannot touch as many people with the click of a button. He can't - and, again, we know socially Facebook decides what goes out there. He can have everybody read what he wants.
QUEST: Good to see you, sir.
REGIS: Good to see you.
QUEST: Come back again please.
REGIS: Thank you.
QUEST: OK, a look at how the stock markets finished both on Wall Street and in Europe. We're showing you this because it really is fascinating. Up 9.75 percent - (inaudible) (LAUGHTER) - that gave you a heart attack -- up 9.75 points on the Dow Jones Industrials. A topsy-turvy day which is indicative of what's happening. And to Europe of course where you saw a variety of markets. You've got the - you've got the - FTSE, the Xetra Dax, the CAC Quarante and the Zurich SMI. They were all higher but noticeably very small gains, all of which suggests that there is still an exceptional amount of nervousness, unease about what's happening in Asia. We will continue with a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
[16:58:32] QUEST: Tonight's "Profitable Moment." The annual Safest Airlines survey from airlineratings.com always makes fascinating reading. For anyone like you and me who does a lot of traveling, you immediately compare the airlines that we fly with those that are on the list. But it doesn't really tell the whole story because once you get to the global carriers, they're all much of a much (ph) when it comes to safety. Yes, you can eke out small differences as airlineratings.com has, and you can make certain conclusions such as Qantas or Swiss or the Cathays and the top echelons. But we needn't take this too far. Once you're talking about the best airlines in the world, they're pretty much all at the top. The worrying part of course is those airlines way further down -- Indonesia Airlines which only got one star, those countries that go no stars. Those airlines, frankly, I wouldn't get onboard and have a seat if you paid me. Now you're starting to talk about what airline safety is really all about. Fasten your seatbelt, tray tables in the upright and stowed position. And that's "Quest Means Business" for tonight. I'm Richard Quest in business class. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. Don't sit at the back of the bus.
END
(Copy: Content and programming copyright 2016 Cable News Network, Inc. ALL RIGHTS RESERVED. Copyright 2016 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.)
