BUSINESS-01
Strike ISIS Target in Libya; Lagarde Wins Second Term as IMP Head; Draft
UK-EU Deal is "On the Way" Tusk: Deal Struck Between UK and Europe; Apple
versus FBI; U.S. Tries to Force Apple to Unlock iPhone; Joh McAfee: I'll
Decrypt iPhone; Yahoo! Forms Committee to Explore Options; Deal Struck
Between UK and Europe; Key Presidential Contests in South Carolina, Nevada;
Overlap on Economic Policy; Liberal Economists Question Sanders' Spending
Plan - Part 1>
in Turkey's capitol, Ankara. Christine Lagarde wins a second five year
term as Managing Director of the IMF. Lagarde want to move into being more
preventive and anticipate changes. Prime Minister David Cameron says
progress has been made. Gideon Rachman, Columnist, Financial Times says it
is in Britain's interest to be a part of the EU. Donald Trusk says that a
deal has been struck. David Cameron now has a deal he can now take to his
Cabinet and to the British people. David Cameron needs to go back to the
U.K. and his own government to appease the euroskeptic MPs. The Justice
Department has asked a judge to force Apple to comply with an order to
unlock the San Bernardino shooter iPhone. Apple says they are asking them
to create a new product to unlock this iPhone and this software does not
exist. John McAfee says he'll decrypt that phone so Apple doesn't have to
create this backdoor we've been talking about. McAfee says the FBI is
asking Apple to create a backdoor into their encryption, and any backdoor
is always discovered by hackers. Yahoo says its board is forming an
independent committee to explore options for its non-Alibaba business. Key
contests are taking place this weekend in the United States Presidential
race, South Carolina is set to vote in the Republican primary, as Democrats
caucus in Nevada. Democrat Bernie Sanders and Republican Donald Trump
certainly disagree on whether walls should be built on the Mexican border,
but when it comes to the other aspects of their economic policy, the two
are surprisingly very similar. Several economists have come out and said
that Sanders economic plan does not stack up.>
Elections>
[16:00:00]
PAULA NEWTON, HOST: And it is a weak end to a strong week. For stocks, who knew as trading comes to a close on Wall Street, stocks had some legs this week. It's Friday, February the 19th.
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NEWTON: A new deal between Britain and Europe is in sight as leaders remain locked away in Brussels.
John McAfee says he'll do what the FBI can't decrypt on that phone in San Bernadino. One billionaire and the other crusades against the billionaire class but when it comes to trade, Bernie Sanders and Donald Trump have remarkable similar policy.
(END VIDEO CLIP)
NEWTON: I'm Paula Newton and this is "Quest Means Business."
Tonight a new deadline looms over the summit in Brussels. It's now 10:00 p.m. in the Belgium capital. Now in the past hour the Czech Prime Minister said a draft agreement on Britain's future is in his words on its way.
Now E.U sources tell CNN exclusively the leaders want the summit finished by 8 local time but not tonight of course, Saturday morning.
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NEWTON: British Prime Minister, David Cameron, has scrapped plans to meet with his cabinet in London on Friday night after pulling an all-nighter on Thursday. He hoped to have a deal to show for his efforts by now with better terms for Britain's place in Europe. Instead, he spent the day bouncing from meeting to meeting to meeting trying to thrash out this agreement. The Prime Minister of Belgium made it clear Europe can't wait much longer.
CHARLES MICHEL, BELGIUM PRIME MINISTER: (As translated) There will be no second chances, it's now or never. There is a will to straighten out relations between Britain and Europe, we're going to do it by reinforcing Europe's capacity to face up to different challenges, security, economic, geo-political, but it has to be concluded now.
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NEWTON: CNN's Money European Editor, Nina dos Santos is extending her trip to Brussels as well. You know I hate to say I told you so, Nina. Everybody knows I'm on the record saying that look, they weren't going to leave there without a deal. What do you know about the kind of deal that seems to be - being really hashed up there hour by hour in Brussels?
NINA DOS SANTOS, CNN MONEY EUROPEAN EDITOR: Well for any of us who've covered these E.U. Summits, and you know them yourself quite well Paula, they really do bleed into one day, into the next, and well into the night.
So far, those 28 heads of state and government to the E.U are actually sitting finally around the same table after more than two days' worth of endless bilateral negotiations. They are finally around the dinner table and it's taken four attempts to get them around that table already today.
They were originally supposed to settle everything over breakfast but now of course we're at a 10pm dinner.
What we're hearing from Donald Tusk's spokesman is that there is draft negotiation that he's hopeful could be close to the final draft negotiation on the table in front of these government members. And then obviously they will also have their own legal team that will have to hammer out the detail of that particular agreement before they can put it through the Europe parliament, decide how to enshrine this into Europe law and then David Cameron can take it back to the U.K.
What we know now at this hour, is that David Cameron has had to cancel a cabinet meeting that he was planning on holding this very evening, hoping to go back with that document. But so far, he's made it very clear to E.U. leaders that he is not going to take back to Britain a deal that he doesn't believe in.
But obviously at the same time, we're also having rallies taking place, Euro skeptics or anti-E.U. rallies, putting the pressure on Mr. Cameron to get this deal done but a deal the U.K. wants.
Let me just remind you what the sticking points are. And basically they remain the same. Still, a lot of contention over this issue of an emergency brake on benefits awarded to migrants in the U.K. The U.K. originally wanted those migrants to be locked out of the system for as long as 13 years. A number of the European countries from the former Eastern bloc countries are very against that. It seems they might have found a compromise for seven years there.
France still holding out, trying to get more information about the safeguards for the city of London and then Greece at one point threatened to torpedo the whole deal saying they could veto this legislation it if they didn't get confirmation from other E.U. states that everybody would keep their borders open so that migrants wouldn't just get stuck in a backlog in Greece.
So again, those are the tense negotiating points but people hopeful that they're going to have a draft negotiating agreement signed off this evening. As we were saying before, we understand here exclusively at CNN that this building is set to power down by 8:00 a.m. tomorrow morning. So either way, whether there's a deal or no deal, that is supposed to be the plan.
[16:05:00]
NEWTON: Nina, thanks for the update. I have no idea how long you're going to be there this weekend. I have a feeling the politicians don't know how long you're going to be their either. Nina dos Santos there continuing to follow the developments in Brussels.
And we want to let you on something here, today's menu for the politicians in Brussels earlier was artichoke to start, veal for the main and of course Bavarian cream for the dessert.
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NEWTON: Now unfortunately, the catering situation today has been fairly fluid. As you can see they had to scramble up some meals. What was supposed to be a congenial English breakfast ended up getting replaced by an English lunch. And then got pushed to an English dinner. The problem was - the problem is they may just have too much on their plate.
First, they have to wade through the entire forest crazy mess of the E.U. benefit system. They're all just trying to get through that. And European countries are unhappy with Britain's plans for an emergency break for those benefits. And then you put the issue of banks on the table. France is unhappy that Britain's banks may get a pass from new E.U. rules.
And finally, there's a risk of an old-fashioned Euro fudge over the migrant crisis, with Greece saying it could block any deal unless Europe agrees to keep borders open. And it's all proved too much for German Chancellor Angela Merkel, who ducked out, wait for it, ducked out of that Summit for some good old Belgian French fries apparently from one of the local shops there.
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NEWTON: Now, the stakes in the "Brexit" debate are high, as we've been telling you. We have all the facts you need on our brand-new international website, that's cnnmoney.com/international. And we'll be right back with more "Quest Means Business."
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[16:10:00]
NEWTON: Uber says its losing $1 billion a year in China.
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NEWTON: The CEO Travis Kalanick made the comment to tech website Beta Kit. Now the car hailing company is facing stiff competition in China from Didi Kuaidi firm backed by a Alibaba in Tencent. Now Uber already operates in more than 40 cities in China and says it will expand to 100 by the end of 2016.
NEWTON: In japan, new government guidelines looks to threaten Airbnb.
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NEWTON: It would make it illegal for owners to rent out their homes for periods shorter than a week. Japan is Airbnb's fastest growing market with more than 21,000 listings. Will Ripley reports on why some people in Japan aren't welcoming the company.
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WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Breakfast in Tokyo.
UNIDENTIFIED FEMALE: We are making pancakes.
RIPLEY: A cooking lesson for Canadian student (inaudible) on a nine-day Japanese vacation.
UNIDENTIFIED FEMALE: They're really precious moments because i get to be with my host.
RIPLEY: Financial adviser (inaudible) rents out a room in her apartment for around $40 per night using website Airbnb.
UNIDENTIFIED FEMALE: The room is almost full all the time.
RIPLEY: She averages ten guests' a month from all over the world.
UNIDENTIFIED FEMALE: We give them a local experience like cooking together. At the same time, we get inspired by the guest.
RIPLEY: That cultural exchange is part of the Airbnb sales pitch. The $25 billion rental site boasts 60 million guests, 2 million listings in 34,000 cities. But here in Japan, Airbnb faces challenges. Short-term rentals often violate local law. Most people don't speak English. And on this island nation, many are unfamiliar with foreigners, never mind hosting them in their homes.
Some communities are banning vacation rentals altogether. Tokyo's (inaudible) has upscale amenities, prime views, and strict residents only policy.
So essentially what you're saying is you don't want this place to turn into a hotel. Exactly, says the resident representative, (inaudible). A hotel is where the public stays. We want to keep this place exclusive.
Airbnb's catching on in Japan. At least 21,000 listings since 2010. The number of guests up 500% from 2014 to 2015. The biggest draws, a good location, clean comfy bed and WIFI. So this is the guest room? (inaudible) say the most common complaint about foreigners in Japan, noise. But quiet courteous guests have actually made friends with their neighbors.
UNIDENTIFIED MALE: That kind of guest change Japanese mind.
UNIDENTIFIED FEMALE: Yes, that's right.
RIPLEY: (inaudible) started a business managing dozens of listings and selling local art to tourists. With 8 million visitors expected for the 20 Tokyo Olympics and a record number of foreign tourists this year, a small but growing number of Japanese are listing their homes. Around some tables, hosts and guests profiting from the experience.
Will Ripley, CNN, Tokyo.
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NEWTON: China's richest man, Wang Jianlin, made his fortune in property and now he's out to conquer the worlds of sports and entertainment and not just in China.
His group, Dailan Wanda, has already made high profile purchases like legendary studios and AMC cinemas in the United States. Wang spoke to CNN money Asia Pacific editor Andrew Stevens.
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ANDREW STEVENS, CNN MONEY ASIA-PACIFIC EDITOR: Want Jianlin is fast becoming the international face of Chinese business. Whether speaking to a packed house at a Hong Kong business forum, rubbing shoulders with the Hollywood elite or joining the top table at a storied European football club, China's richest man is making waves, joining Alibaba's Jack Ma as one of the country's best known business leaders.
Wang's Dailan Wanda group is China's biggest private property concern. But it's been expanding and diversifying its empire internationally. I sat down with Wang in Hong Kong recently to talk about where the company goes from here.
WANG JIANLIN, CHAIRMAN WANDA GROUP: (As translated) currently our real estate business is not growing much. We're developing two major sectors. First is cultural industries including entertainment, sports and tourism. The second is financial industries including corporate financing, new online loan, online/offline integration, releasing our own (inaudible) card, the first multi-function financial card et cetera. his is our two major sectors for development.
STEVENS: You said Mr. Wang, very clearly that you would be making five acquisitions, substantial acquisitions in 2016. Three of those will be offshore, overseas. What areas are you looking? What type of business are you looking at buying?
[16:15:07]
JIANLIN: (As translated) All are sports or entertainment businesses. They will be substantial at least $3 to $5 billion.
STEVENS: Do you have targets identified?
JIANLIN: (As translated)We would not release that, but there is some progress that we expect to compete within this year.
STEVENS: Why sport?
JIANLIN: (As translated) There is basically no sports business in China at this point and the Chinese government has just released a policy to develop the sports business. To grow it into a 5 trillion R&B business within 10 years. That is close to 800 billion U.S. dollars and slightly larger than the current side of the sports business in the U.S. now.
There are a lot of preferential policies for sports related businesses such as priority to obtain land, IPO and bank loans et cetera. We think this is the golden decade for sports business in China. We go around the world to acquire good sports companies and competitions that can be brought to China and linked up with China's demand.
STEVENS: Is your diversification program linked to the fact that China's economy is slowing down and you need to spread your businesses further, not rely on just property?
JIANLIN: (As translated) It's about not putting all the eggs in one basket. It's because we think if we want to become a first-class company in the world, it has to be a multinational enterprise. Not just staying in one country. I could reach 100 billion U.S. dollar turnover, even if I only conduct business in China, but I think that will not help with our company's branding and transition. Therefore, we do not have any budget caps in our investments in the overseas markets. Whenever we come across a good company, we can always consider to acquire it.
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NEWTON: As crude prices crash to around $30 a barrel, reminder that oil volatility is nothing new. Christine Romans has a look at the biggest boom and bust for black gold.
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CHRISTINE ROMANS: Oil is not for the faint of heart. Black gold has made fortunes for some but its price volatility leaves destruction in its wake. Here are some of the biggest oil booms and busts of the last century.
[16:20:05]
ROMANS: One of the earliest oil price shocks of the transportation era was the west coast gasoline famine of 1920. Demand for oil was surging as more people started driving automobiles. Consumption almost doubled from 1915 to 1920. That led to a shortage in gasoline. Autos were out of commission and horses back in style.
After 1920, oil production in the U.S. Boomed in Texas, Oklahoma, California. That meant no more shortages. Increased supply and falling prices down 40% between 1920 and 1926. Then toss the great depression in the mix. Prices fell another 66% by 1931.
After World War II, people were demanding more petroleum-based product and buying more cars. The price of oil increased 80% from 1945 to 1947.
In 1960, OPEC was founded. The coordination of supply from these countries led to relatively prices for the next decade. Just after Syria and Egypt attacked Israel in 1973, OPEC announced an embargo on all oil exports to countries viewed as supporting Israel including the United States. Oil prices doubled and then doubled again and drivers waited in long lines just to fill up their tanks.
Iran was one of the largest oil producers in the world in 1978 but the revolution in that country hurt production and the country has never fully recovered. The price of oil already historically high pretty much doubled again. And in the U.S. the lines for gas were back. If you haven't noticed already, when there's conflict in the Middle East, oil prices go up. That's what happened in 1990 and again when the U.S. invaded Iraq in 2003.
Growing demand for oil was booming at the beginning of the 21st century. China was guzzling crude and the U.S. economy was in a bubble. Despite signs of a global recession under way, oil peaked at $142 a barrel in 2008. It helped put the brakes on the economy just before the financial crisis brought it all crashing down.
And today too many players pumping too much oil and concerns about China's slowing growth have sent oil prices into a tailspin. How will this bust stack up with others from the last 100 years.
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NEWTON: 16 months since the tragic crash in the Mojave Desert, Virgin Galactic is pushing ahead with plans to send tourists into space. Richard Branson's company is said to unveil a new version of the Virgin Galactic Spaceship. The firm is being coy with when it will do that, saying only that it will be very soon.
CNN digital correspondent Rachel Crane gets a look at what's to come.
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UNIDENTIFIED MALE: This is the vehicle that is going to take many hundreds of regular people into space for the first time.
RACHEL CRANE: Richard Branson's Virgin Galactic wants to be the world's first commercial space line. That is the first company to take regular people into space on a regular basis. And this is the spaceship they say could do it.
Spaceship two, Serial two was constructed here in the Mojave Desert in this secreted hanger.
UNIDENTIFIED MALE: We're really looking forward to getting it into the air where it belongings and eventually into space. Head back and we're accelerating.
CRANE: (Dave MacKay) is Virgin Galactic's chief pilot. He's been training inside of the simulator hundreds of times waiting for a real spacecraft to fly again.
DAVE MACKAY, CHIEF PILOT, VIRGIN GALACTIC: After roll out, we expect in the next couple months to be in flight test. Of course that's hugely significant.
CRANE: That's because Virgin Galactic has not had a vehicle since a tragic accident in 2014 left its spaceship in pieces and killed one test pilot.
RICHARD BRANSON: We're going to learn from what went wrong.
CRANE: The NTSB ruled the cause of the accident to be human area. Spaceship Two, Serial Two was already in development at the time of the crash but not nearly ready to serve as a replacement.
MACKAY: When we began this journey, we knew it would be hard and it has been hard. The number one thing is that we're going to test fly this vehicle. We're going to test fly Spaceship Two and we're going to make sure we understand what happened.
[15:25:03]
CRANE: Virgin Galactic have made several updates to its new and improved spacecraft.
MACKAY: The actual accident was caused by a control being moved when it shouldn't have been done and we've implemented a new system which prevents that ever happening again.
CRANE: But building a spaceship and adding those new features has taken time. Spaceship Two, Serial Two, has been under construction for more than three years.
MACKAY: I believe that the future of this vehicle will be powerful to the future of humanity.
CRANE: This is how it works. The mothership, White Knight Two, carries the spaceship 50,000 feet into the air. Then it separates and blasts off at more than three times the speed of sound, reaching between 50 and 62 miles above earth. The six passengers onboard will experience about six minutes of weightlessness.
MACKAY: And at this point or very shortly we're going to allow the customers to unstrap and they can float around.
CRANE: More than 700 customers have already paid $250,000 for a seat when Virgin Galactic eventually starts commercial operations.
MACKAY: It's a sensational experience of course but it's more important than that. It's the first step in opening up space to the wider population of the world.
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NEWTON: The Department of Justice says Apple's refusal to help the FBI is based only on a desire to protect its brand.
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NEWTON: Cyber security expert John Macafee has offered to open the iPhone in question so Apple doesn't have to do it and I'll be talking to him. That's up next.
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[16:30:00]
NEWTON: Hello, I'm Paula Newton and these are the top news headlines we're following for you this hour.
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NEWTON: A Kurdish militant group has claimed responsibility for a deadly attack in Turkey's capital Ankara. Wednesday's bombing killed 28 people. The Kurdistan Freedom Hawks or TAK said the attack was revenge for Turkey's military operation in southeastern Turkey and threatens further attacks.
You're looking at the aftermath of air strikes against ISIS in Libya. U.S. warplanes struck overnight. A senior ISIS operative from Tunisia may have been among the 41 people killed. The U.S. official said advanced firearms training was taking place there. A possible indication that a terrorist attack was being planned. )
Christine Lagarde has won a second five year term as Managing Director of the International Monetary Fund. She ran unopposed for the top job. Lagarde called for financial cooperation and laid out her priorities for the next term.
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CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: I believe that we can do a lot in terms of support in terms of lending, in terms of programs. But I would hope that in the coming years we can also move into being more into prevention. More into anticipating changes, and capable of advising countries to equip themselves with macroeconomic policies and other policies by way of structural reforms for instance. To deal with the changes that are ahead of them.
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NEWTON: A draft agreement between Britain and the European Union is on its way, according the Czech Prime Minister. Leaders are extending talks in Brussels over Britain's future in the EU. But the British public due to vote in the coming months on where to stay in the EU.
British Prime Minister David Cameron says some progress has been made.
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DAVID CAMERON, BRITISH PRIME MINISTER: Well. I was here until 5:00 this morning working through this, and we've made some progress. But there's still no deal. And as I've said I'll only do a deal if we get what Britain needs. So we we're going to get back in there. We're going to do some more work, and I'll do everything I can.
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NEWTON: We're going to continue now with those developments ongoing in Brussels. Gideon Rachman is the Chief Foreign Affairs Columnist at the Financial Times. He's says Britain would be making a mistake if it left the EU now. You know, I find your column quite refreshing, but you understand how unpopular this would be in Britain. Of course you know that. Basically you're saying look, Britain needs to be all in, and Britain needs to be all in because it needs to have a voice in Europe.
GIDEON RACHMAN, CHIEF FOREIGN AFFAIRS COLUMNIST, FINANCIAL TIMES: Yes, well I mean I think that that's been the debate for many years. Actually what I argued in the column is that in a funny way the British debate is stuck in the early `90s. When Europe wasn't in turmoil and it was really purely a kind of economic question. But now with the migrant crisis, with a spillover from the Middle East, I think that the whole political situation in Europe is highly unstable. And it's in Britain's interest to be part of the European Union. Which for all its flaws attempts to try to kind of create consensus among democratic nations in Europe. And if we walk away we'll actually damage the EU, which is the major forum for international cooperation in the EIU. So I'm really making a political as much as an economic argument.
NEWTON: Now you may have you wish here. Perhaps they are listening to you. If you would just indulge me here and standby. Our Nina dos Santos is there in Brussels and perhaps has word of some type of an agreement. Nina, what are you hearing?
NINA DOS SANTOS, CNN MONEY, EUROPE EDITOR: Yes, actually it's interesting. Just in the last couple of minutes you may have seen me examining my Blackberry and my phones. We do have, I believe Donald Tusk, the President of the European Council, which convenes these meetings. He's running them. Now are tweeting apparently that there has been a deal struck. Now this tells us what the Lituanian President, Dalia Grybauskait? has tweeted just two, three minutes ago saying that the deal is done, "The drama is over." And one of the thorniest opponents to David Cameron throughout the course of the last few days over the issue of an emergency brake applies to migrant benefits, has been the Czech Prime Minister. He has now also tweeted that there has been compromise. That they have agreed to limit the term of those benefits to seven years. David Cameron originally want migrants to the U.K. locked out of the benefits for 13 years. They've seem to have come to a compromise. The Czech's wanted only five. Seven maybe on the table here. So the Czech Prime Minister is confident is seems. At least according to these statements just made in the last few minutes on Twitter that a deal may have been reach that David Cameron can take to his Cabinet and to the British people.
NEWTON: Nina, from what can you tell us so far -- and I know it's not even early hours, it's early minutes here. But in terms of him trying to take this back to Britain, what did he not get?
DOS SANTOS: Well at the moment we haven't actually seen any copies of the draft text. So I've seen a number journalist Tweet pictures of what looks like a draft text with various bits crossed out. Referring to things like explicit save guards to Britain's sovereignty when it comes to closer integration for the European Union projects. And as I was says that compromise of the seven years is also -- seem to be Tweeted in these, I should stress, as yet unconfirmed pictures that we're seeing floating about on Twitter on this draft text. But I should caution here, Paula, you know, we also have a lot of draft text that continue to circle here on the floor throughout the course of these meetings. And they get revised repeatedly as these leaders got into that bilateral negotiations and their big multilateral negotiations, which is what's going on right now.
The real issue for David Cameron is that he need to go back to the U.K. To his own government to appease euroskeptic MPs. This is his one chance to try and get his stable in order back home. And so this deal has to be strong enough to appease them.
[16:35:03] A lot of people thinking it probably won't be. But either way when this deal gives him the right to call a referendum, perhaps in the 23rd of June. That's why he wanted this deal this very weekend. Why the timings were so urgent for him. And a lot of people across the U.K. will probably have forgotten the finer print of all of the tense negotiations that have been happening here.
The fundamental question for the British people is do they want to be inside the European Union or not. And that hangs on a whole bunch of intangibles. Basically whether the U.K. feels European or not. It doesn't necessarily hinge on the kind of minutia that's being discussed here over the last two days.
NEWTON: Yes, and important point. Our Nina dos Santos is going to step away for a moment and try and get more details on that deal. Nina we thank you for the update. And we want to bring back Gideon Rachman now. Who is the chief foreign affairs columnist for the Financial Times.
You know we're not getting many detail there Gideon, but from what you can tell, and look, a lot of this has already been floating out there. If wanted to try and make a argument to the British people, I mean this is an incredibly divisive topic right now in Britain. What do you day to them?