BUSINESS-01
Korea Votes to Impeach President; Trumps Cabinet: Millionaires and
Military Minds; U.S. Anti-Doping Agency Warns of Athletics Boycott;
Samsung Tries to Power Down Note 7. Aired 4-5p ET - Part 1>
Marks, Claire Sebastian, Jason Carroll >
CEO, U.S. Anti-Doping Agency; Shelly Palmer, Host of "Digital Living" >
sees no sign of slowing. Rupert Murdoch tries again for a cable company
take over. Samsung tries to power down one of their own phones once and
for all. South Korea's president has been impeached by Parliament on
Friday. Trumps cabinet appointments so far, have met two distinct flavors.
They are military might and multimillionaires. President Obama has ordered
a review into allegations that's Russians influenced several U.S. elections
through hacking. The World Antidoping Agency, WADA, found more than a
thousand Russian athletes had been involved in doping. >
Acquisitions; Media; Internet; Cyber Security; Hacking; Government, Asia>
[16:00:00] RICHARD QUEST, CNN ANCHOR: Bells are now rings on Wall Street. The Dow is at a record, the NASDAQ at a record, the S&P at a record, the market is 20,000 and the Dow not that far away. You keep pushing the bell -- that's it. And you do the gavel --
It's all too much. Just look at these numbers before actually show you date, the Dow up 142 points, 19,757 all the way up right throughout the day, and it is Friday. It is December the 9th. Tonight, Donald Trump toasts the might of the markets and the Trump rally sees no sign of slowing.
Reach for the sky, Rupert Murdoch tries again for a cable company take over. And the least two phone update of all times. Samsung tries to power down one of their own phones once and for all. I'm Richard Quest. It may be Friday, but of course I still mean business.
Good evening, exactly a month since Donald Trump's presidential victory and the stock market rally shows no sign of letting up. The Dow, the S&P 500, and the NASDAQ have all hit new highs once again today. I showed you at the open but it's worth showing you again. This is the Dow Jones Industrials it opens out the gate higher and it goes higher steadily throughout the course of the session with a particular rise after 3:00. We're still working out what happened at 3:00, except Donald Trump was speaking. Now the Dow has risen every day this week. It went up 46, up 36, Wednesday is a whopping 298, and Thursdays up 67. Today of course, up 135. One more week of these sort of numbers, and we will have hit 20,000 on the Dow Jones by the end of next week. In the last half hour, Mr. Trump hailed this market rally as proof that his economic message was already resonating.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT-ELECT: You see what is happening with the stock market and a lot of things? Because they understand. We know what we're doing. We're knocking a lot this happen. We can't let it happen. Our country is being drained, drained of its jobs. And it's good jobs. And they're going to other countries and it's just not going to happen.
(END VIDEO CLIP)
QUEST: It's that sort of talking that seems to be moving the markets. Let's go to the traders, Tim Anderson, is managing director at TJM investments. All right, Tim, we need to take this slowly, carefully, and pass fact from fiction. How much of this rally is Donald Trump related?
TIM ANDERSON, MANAGING DIRECTOR, TJM INVESTMENTS: That's the question of the day. It certainly feels like a good chunk of it is. Particularly when you saw the very sharp reversal from where the Russell was November 3. Now a 20 percent move higher. It's gone from an under performer to a overperformer in five weeks. That's very striking. I'm watching that and the transports, which was up about 16.5 percent. Very closely it would not be unusual to see a little pause in either one of those. But we're not seeing it yet. I think the other thing that's very interesting to watch is the U.S. dollar. Has had incredible strength and it's striking that oil continues to hold its gains from the recent OPEC meeting despite the incredible strength in the U.S. dollar. So, if you even had a little pull back in the dollar, oil could maybe make a move up above 55.
QUEST: What happened at 3:00 this afternoon that caused this quite dramatic spike in the Dow? Why at three?
ANDERSON: The transports have made a new high for the first time in two years a couple of days ago, and they were up in the morning. And they were actually down marginally most of the day. And then when they didn't really sell off and you didn't really have a wave of selling, you have a feeling that OK, we're not going to sell off. And the buying just built on itself for the last hour as it has a number of other days in the last couple of weeks. It feels like institutional portfolio managers want to go home with as close to zero cash as they can at the end of the year.
[16:05:00] QUEST: It' also starting to feels like a rally feeding on itself. Not speculative as such, but that more investors are going to feel for concern that they're missing out.
ANDERSON: You know, you haven't heard this term in a long time, maybe since the mid-90s. This is a classic multiple expansion rally. The big bet is that corporate earning the will come out of their doldrum, where they've had the declines for the last five or six quarters. And you're going to get an uptick in the economy and that's going to be very positive for at least the next couple of years. Now will like to see if that happens, but clearly this rally is an expectations rally or really creating a multiple expansion before the fundamentals really develop.
QUEST: I shall watch closely on that question of multiple expansion. Tim Anderson, good to see you at the New York Stock Exchange.
There were deals that were being made in Europe. Fox has reached for the sky, literally, and it has made it this time. Rupert Murdoch's 21st Century Fox has agreed to a takeover of the broadcasting group Sky. You remember, they tried this once before in 2011 and it failed. Here you have the share price of Sky, and it tootles along and all of a sudden it goes wow, right up and that's because they jumped more than 30 percent to match the bid price to exactly at 10 pounds per share. It comes off of this a bit that raises the question as to whether there may be some issues as to will this deal complete. Paul La Monica is with me. The last time Murdoch tried to take Sky, they failed on pretty much public policy grounds.
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: Right, you had the phone hacking scandal in the UK which really derailed any chances of Murdoch doing this deal. But that was now several years ago, you have James Murdoch, the CEO of Fox, Rupert son, is back at Sky as well, as chairman. So, I think people felt that the timing was right, enough time had passed for Murdoch to make a run at this company.
QUEST: Is it a done deal, this?
LA MONICA: Nothing is ever a done deal, but I would suspect that shareholders probably will like the fact that it's a nice premium and that regulators probably have may be forgiven, if not entirely forgotten the drama from a few years ago, with the hacking in the U.K.
QUEST: So far, I don't see too many critics coming out of the wood work on this. It always felt this was going to happen, in 2011 it didn't because of the phone hacking scandal.
LA MONICA: Sorry, I was just going to say, you have the newspaper split off from Fox. Also, news Corp. being a separate company, although that's obviously still controlled by the Murdochs.
QUEST: Other big news at happen today, Muhtar Kent is stepping down as chief executive of coke. He stays on his chairman. The COO takes over as this. What do we make of that? Why? Why is Muhtar going now?
LA MONICA: I think this is pretty interesting. Coke has lagged its top rival, Pepsi, over the past couple years. The company has made moves to diversify a little bit and realize that Diet Coke sales in particular, have been slowing dramatically. But Coke I think it's going to be interesting to see what happens going forward. Warren Buffett blessing this deal, Berkshire Hathaway is a big shareholder and Coke, but Warren's son, Howard, just stepped down last night from the board. So, that I think is a bit interesting that he's no longer on the Coke board. And there has been speculation that Anheuser-Busch InBev could eventually make a takeover to run at Coca-Cola. So, it'll be something to see --
QUEST: That would be extraordinary.
LA MONICA: It would be extraordinary. And give that AB InBev has had backing --
QUEST: Yes, but Coca-Cola is Coca-Cola. It's huge.
LA MONICA: It is huge, and we know our friends in Atlanta, obviously, look at it fondly, of course, but I don't think any deal will be off the table. This would be gigantic if it happens.
QUEST: So, the chief operating officer whose name immediately escapes me.
LA MONICA: Quincy.
QUEST: Thank you -- is taking over. The COO -- James Quincy -- also took over Starbucks -- does the COO, is the COO cap rapidly becoming the CEO in waiting.
LA MONICA: I think a lot of times people view that position as the heir apparent, especially when you bring in someone with such fanfare. In the case of Coke, you have Quincy is a long-time executive.
[16:10:00] But with Starbucks, they brought Kevin Johnson from the tech world in a couple of years ago, and it was pretty clear that with Starbucks morphing into more of a tech company in the way they order. He was going eventually be the CEO.
QUEST: But within the C suite you have the chief exec, the chief marketing, the chief information, the chief operating, the chief financial, the chief tech, and a few other chiefs. But the CEO, the chief op, is starting to be regarded as the replacement?
LA MONICA: Yes, I think that is definitely the case. And for whatever reason there is speculation, could Mark Zuckerberg ever be interested in a political career. If he were to ever step back at Facebook, I think Sheryl Sandberg, the COO, is a likely successor. Except for the fact that she also has been viewed as someone that could be a political contender in the state of California.
QUEST: A fascinating day in politics. A fascinating day in business. Muhtar Kent good friend of this program by the way. Sorry to see him leave Coca-Cola. Good to see you. Have a good weekend.
LA MONICA: You too.
QUEST: The markets in Europe they took their cue from the U.S. They were all up after the ECB -- you remember, there extending the bond buying, but they changed the parameters of how much they're going to buy. The Zurich SMI was the best performer. It was up the best part of 2 percent.
As we continue tonight, the political scandal in South Korea taking a very interesting turn. Thousands of people who witnessed a historic vote to impeach the country's president. The constitutional court now takes up the issue. The question becomes what does it mean for South Korea? In a moment.
(COMMERCIAL BREAK)
QUEST: A wave of anti-establishment populism that swept the West, has now over into the East. And reaching all over Asia's largest economies. South Korea's president has been impeached by Parliament on Friday. Over the corruption scandal involving the country's most powerful businesses.
That's the sound of jubilation of the protesters as they heard the results. President Park has been temporarily stripped of her duties and has been replaced by the prime minister. Following the vote, what happens now is the constitutional court is to begin deliberations on whether to ratify the impeachment. Our correspondent in Seoul is Paula Hancocks and as she now tells us the political uncertainty in the country is only just beginning.
(BEGIN VIDEOTAPE)
PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT (voice-over): Protesting outside the gates of power. Calling for President Park and her to be impeached for her alleged role in an ever-widening corruption scandal. Sometimes a tense wait for lawmakers to decide her fate.
Parliaments vote was convincing, 234 opted for impeachment, just 56 said no. Meaning, many of Park's own party must have voted against her. The reaction outside was one of delight. Including from Seoul's Mayor, himself a presidential hopeful.
[16:15:00] PARK WON-SOON, SEOUL MAYOR: It is a great victory of Korean in the victory of democratic.
UNIDENTIFIED FEMALE: I'm so happy. I'm very proud of my people.
HANCOCKS: President Park met with her cabinet after the vote, apologizing once again.
PARK GEUN-HYE, SOUTH KOREAN PRESIDENT: I solemnly accept the voice of the Parliament and the people and sincerely hope this confusion is soundly resolved.
HANCOCKS: Suspended from power, her Prime Minister Hwang Kyo-ahn, is now in charge. Addressing the nation, he assured citizens the focus will now return to North Korea. Warning the military to be on alert for Pyongyang taking advantage of the destabilized situation and referring to U.S. President-elect Donald Trump, he promised to strengthen the U.S./South Korea alliance.
The constitutional court now has up to six months to decide whether they agree with lawmakers and uphold Park's impeachment. If they do, elections will be held within 60 days. But if less than six of the nine judges agree with the evidence against Park, she'll be immediately reinstated. Many lawmakers though are focusing on the here and now. A symbolic walk of the nation's flag to the nations Parliament.
CHUNG DONG YOUNG, SOUTH KOREAN LAWMAKER: I'm very much satisfied and I'm very happy for our peoples democracy.
HANCOCKS (on camera): Night has fallen here in South Korea, and Park Geun- hye is no longer in charge of this country. But this is by no means over. A final decision on her fate and also on who will ultimately rule this nation of 50 million could well still be months away. Paula Hancocks, CNN, Seoul.
(END VIDEOTAPE)
QUEST: A White House spokesman said the U.S. remains a steadfast ally and a friend in a partner to South Korea, will work with the acting president. We've also learned separately that President-elect Trump has requested a special briefing on North Korea. Which perhaps is not surprising. Ambassador Christopher Hill joins me now. He is the former U.S. ambassador to South Korea. Former chief negotiator on the North Korean nuclear talks. If anyone knows the machinations of this part of the world, it is you, dear ambassador. And thank you for joining us.
Firstly, is it your feeling, and I know you can't prejudge a constitutional court, but is it your gut feeling that the constitutional court upholds the articles of impeachment?
CHRISTOPHER HILL, FORMER U.S. AMBASSADOR TO SOUTH KOREA: Frankly speaking, Richard, it's kind of hard to say. Certainly, a lot of what has happened has kind of come out very publicly. Park has acknowledged this terrible mistake. I must say that I would be surprised if this were reversed. But I want to add that in 2004 when the then president Roh Moo-hyun was accused of manipulating elections and impeached. The constitutional court did not go along with it and he was restored to his office. So, I think anything can happen. But I must say, a lot of this evidence is kind of out there. It's very familiar, and we'll have to see.
QUEST: How likely is it that the North decides to make mischief or to play this somehow to its advantage and how would they do that?
HILL: First of all, what the North has in terms of a testing program is really a military testing program. They're not testing us as much as they are testing missiles and potentially another nuclear device. So, I think that's really what's going on in the North. I must say they have never liked Park Geun-hye. They've always looked at her as much too much of a hardliner. They've never liked her because of her father. So, I'm sure they're enjoying this, but at the same time they've been rather restrained in recent weeks in talking about it. And I think they want to see it play out. Certainly, I think as South Korea would move more leadership, the North Koreans will learn that there's nobody in South Korea particularly interested in coddling up to the North.
QUEST: This news today that the President-elect is only getting one presidential daily brief a week. The vice President-elect Pence is getting the daily brief. It's not the first President-elect to have chosen to limit. But he has asked for a Pacific brief on North Korea.
HILL: I think it's a good sign, he's asked for a brief on North Korea. I can't think of an issue, that frankly is more dangerous to the world and potentially more dangerous to his own term. Because it looks like probably in the next few years, probably in the next four years, North Korea will have a deliverable nuclear weapon. Something they didn't have before when they were just testing nuclear devices. So, at that point, you have a U.S. president who'd be asked by the electorate four years from now what have you don't about this?
[16:20:00] I don't think president Trump wants say, well we're trying to be patient and work with our allies and supporting the six-party process. He probably wants a more robust answer to that question. And so, I think this starts with a briefing, and I see that as a good sign. And who knows, maybe he may go to a two a week briefing schedule.
QUEST: Finally, to any incoming president, even somebody -- assuming for the purpose of the question -- Hillary Clinton one steeped in foreign policy, North Korea and South Korea with the bilateral treaty that the U.S. has with South Korea, is one of his most intractable problems, isn't it?
HILL: Well you got it, because when you have a treaty -- I mean, we have a security treaty -- meaning an attack on South Korea is like an attack on the United States. In short, we're at war if the South Korea is attacked by North Korea. This is not just figuring out what is going on there halfway around the world. This is something that could really involve presidential decision making. And by the way, when you have to make these decisions, you've got to make them pretty quickly and you better have the in facts, or at least the concepts of what's going on well under your belt. So, the trouble with these foreign-policy issues, is you don't usually get to pick and choose and say, well I like that one so I'll get a little interested in it. These issues tend to pick you. So, I think it behooves him to be as well briefed as possible for things that could be extremely fast moving as they develop.
QUEST: Final quick question, sir. Behind you over your right shoulder, who is that picture of you shaking hands with? Can you see, look over your right shoulder?
HILL: I don't want to turn around and look, there's a number of pictures from my tenure of shaking hands. I think I may have George W. Bush there. I think I may also have Condoleezza Rice. I have a lot of memorabilia and it's kind of fun to point it out to the students here at the Korbel school in the middle of Colorado.
QUEST: Brilliant, Thank you, sir. We'll find out what was, thank you.
Now, Donald Trump wants to drain the swap in Washington. And he's hiring the brightest minds from Goldman Sachs to help him do it. According to multiple reports Goldman's president and chief operating officer, Gary Cohn, is to head up Trump's White House Economic Council. When I spoke to Cohn at the world economic forum in Davos, he focused on something that many of Trump's appointments have railed against, overregulation.
(BEGIN VIDEO CLIP)
GARY COHN, GOLDMAN SACHS PRESIDENT AND COO: Get used to more volatility. This has been created by what we have done in the regulatory community to some extent. Remember, we in the last five years have spent an enormous amount of time regulating all of the global financial institutions to the point that we've all deleveraged our balance sheets. We have all been forced to be very conservative with what we do. We no longer can trade the way we used to trade. We used to feel at Goldman Sachs that it was our job to dampen volatility. When access of selling came in we were there to buy. The flipside, when excessive buying came in there, we were there to sell it. We're not in a position to do that anymore.
(END VIDEO CLIP)
QUEST: Now, Trumps cabinet appointments so far, have met two distinct flavors. They are military might and multimillionaires. On the millionaire front you've got Betsy Devos who is education, a billionaire married to the Amway fortune. We're familiar with Wilbur Ross on this program he's the commerce secretary and he's a billionaire investor. Linda McMann is a small business administrator and the WWE chief executive. Steve Mnuchin is in for treasury and is a partner at Goldman. Andrew Puzder is the Labor Secretary -- or will be -- chief executive of Carl's Jr. And Hardee's. And as you just heard, Gary Cohn, economic Council at Goldman Sachs. They are the millionaires.
Now to the military. And the military minds, national security advisor, retired Army Lieutenant General, Michael Flynn. Homeland Security, retired Marine Corps general, John Kelly. And Defense Secretary, retired Marine Corps general, James "Mad Dog" Mattis. So, military and millionaires. General Spider Marks is in Washington. He's our CNN military analyst. Military and millionaires, now look, I said yesterday to you that the military take orders and will be comfortable. You nearly leapt out of the chair and formulated against me on it, but the military are better in that environment, aren't they?
[16:25:00] GENERAL SPIDER MARKS, CNN MILITARY ANALYST: Well Richard, as we discussed, and as I took my hands off your throat -- what we discussed, Richard, was the fact that military leaders understand that the art of decision making has a process to it and there's a desired outcome. And in order to get to that desired outcome, there will be differences, there will be contrary views that will really permeate the discussion. But at the end of the discussion a decision must be made. The person in charge has to raise a hand and say, OK, I've taken everybody's ideas, we're all on board, right? That's an interrogative. I'm going to make a decision. We're going to go forward. But guess what? When everybody departs this room, when that door opens up, we are all on the same line on the same handle.
So, what happens is that type of a process certainly is a disciplined kind of an intellectual leadership type of a process. Business people on the other hand still want to achieve a level of a desired end state, a shared view of what we're trying to achieve here, but it may be more chaotic. I think that is where we agreed at the end of that little wrestling match in the green room.
QUEST: Right, but which do you think is going to have more trickiness. Not success, but trickiness. Military or millionaires. Because some of those millionaires are billionaires. They've run large companies in their own right, and they are used to defining strategy and executing it themselves without too much to do.
MARKS: Well, I have seen both, Richard. In my brief business career, I have been blessed to have mentors and leaders in the business community that of come to me and have demonstrated these -- what I would call these characteristics of leadership that are not dissimilar from what we see in the military. But what you are saying is very true. At the end of the day, that individual business leader maybe spends more time herself or himself in terms of the visioning and in terms of the final decision making without a lot of the fuss that might come from the contrarians in the room. Which is what defines what I would say, the art of military leadership, which is a lot of discussion in advance of execution.
QUEST: How will those military minds reconcile and become comfortable dealing with civilian problems? Even if you take Homeland Security -- at the end of the day there is a lot of civilian employees and it deals with civilians in a way that the DOD doesn't. It is essentially a civilian institution.
MARKS: Yes, but realize that senior leaders, general officers, we spend a lot of time in a very volatile and uncertain environment where the inputs are not strictly military. They represent all those elements of power, diplomacy, and finance and information, et cetera. That's kind of a world that these senior military leaders live in.
What we want to see out of these leaders that are going to now lead the Department of Homeland Security and the Department of Defense, is an understanding of -- look those large bureaucratic organizations will have a recidivist type behavior. They've got a life of their own. I don't want Jim Mattis, for example, to "fix" the inside of DOD. I want him to lead DOD with maybe three or five priorities. Let the folks who understand how the machinery works. Let them work it, and then periodically check it to make sure that everything's aligned to meet those goals.
QUEST: We need your help in the future, sir, as we move forward in this transition and into the next administration. Spider Marks, good to have you on the program, sir.
MARKS: Thanks, Richard, thank you.
QUEST: Amid allegations of Russian hacking into U.S. elections. One American company is actually hiring Russian hackers. Will explain why. It's QUEST means business on a Friday.
[16:30:00] (COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. As the head of the U.S. anti-doping agency tells me, the U.S. could boycott athletics if Russia doesn't clean up its act.
And Samsung tries to kill off one of their own phones. The most extraordinary story on what they're suggesting. Now one of the biggest American networks won't let them do it and for a reason that you might not immediately think of. We'll talk about that as we continue because this is CNN, and on this network, the news always comes first.
Egyptian officials say policemen were targeted in two separate roadside bombings on Friday. Six officers were killed in Cairo when a blast ripped through a checkpoint on the main road leading to the pyramids. Another bomb targeted a police vehicle in northern Egypt killing one civilian.
South Korea's Parliament has voted to impeach President Park Geun-hye over a corruption scandal. The country's constitutional court will now decide whether she should be kicked out of office. President Park apologized again on national television after the decision. The Prime Minister will be acting president during the process.
(BEGIN VIDEO CLIP)
HWANG KYO-AHN, SOUTH KOREAN PRIME MINISTER (through translator): I stand here with heavy hearted sadness. The Parliament passed the president impeachment motion today. As an aid to the president, I feel deep responsibility about the situation we have come to face.
(END VIDEO CLIP)
QUEST: The president of Ghana has conceded defeat in Wednesday's national election. A spokesman said, John Mahama called the opponent, Nana Akufo- Addo, on Friday. Ghana has a record of peaceful elections, and this is the third time since 2000 that voters have rejected a government.
One big name is out of the running for U.S. Secretary of State. CNN has learned that the former New York Mayor, Rudy Giuliani, is no longer under consideration to be America's the number one diplomat. Sources say the President-elect is now taking a closer look at Exxon Mobil's chief executive, Rex Tillerson.
President Obama has ordered a review into allegations that's Russians influenced several U.S. elections through hacking. Claire Sebastian is with me now. What are they alleged to have done? How serious is this? A lot of accusations about hacking. Is this -- what's he getting to with this?