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First Move with Julia Chatterley
The U.K., the United States and Canada Jointly Accusing Russia Of Carrying Out Cyberattacks On Coronavirus Research Centers; China Says Its Economy Grew More Than Three Percent; Politicians, Billionaires And Celebrities Hacked In Twitter Cryptocurrency Scam. Aired 9-10a ET
Aired July 16, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:28]
ANNOUNCER: This is CNN Breaking News.
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: A warm welcome to FIRST MOVE and we begin with breaking news.
In the last few moments, the U.K., the United States and Canada are jointly accusing Russia of carrying out cyberattacks on coronavirus research
centers.
CNN's that Nic Robertson is in London and has all the details for us. Nic, great to have you with us. What more do we know?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, we know that they're being accused of targeting coronavirus research and development
centers. The groups are called APT 29. That's a name that's been given to them, also known as the Dukes or Cozy Bear.
They are using spear phishing and custom made malware -- Well Mess and Well Mail. That's what we're being told.
But this analysis by Britain's National Cybersecurity Center is supported by security officials within Canada and within the United States as well.
What they are saying is very clear that these operatives that the government here, the National Cybersecurity Center believes are very likely
connected to Russian Intelligence operations.
And we've heard them speak about this in the past as well, very likely connected to Russian Intelligence operations have been involved in trying
to steal or get knowledge of at least information that's being used to look after the global population in this pandemic. It is a very, very sensitive
issue that the Russian government would appear to want to steal this information from some of the nations that had the most advanced and
successful research so far.
The report also goes on to say that this group is mostly targeting APT 29, Advanced Threat 29 that this group is also targeting mostly government
diplomatic sources, think tanks, healthcare institutions.
So the government's advice here is for any of those types of institutions in the U.K., in the United States and Canada or anywhere else around the
world to look at the advice of the government here, and the National Cybersecurity Center has been handing out about how to strengthen their
cyber protections.
CHATTERLEY: Yes, and particularly when you've got so many people working from home as well, it's increasingly a made us vulnerable. Nic, great to
have you with this. Thank you so much for that. Nic Robertson there in London.
We are of course waiting on reaction from the Kremlin, too. CNN's Matthew Chance is in Moscow for us, and Matthew, one can guess what the response
there's going to be and it's nothing to see here, but the facts remain.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, quite. I mean, we haven't had a response yet from anybody in in the Russian
government to these allegations that have been leveled by the British, Canadian and U.S. governments about these attempts to hack coronavirus
vaccine facilities.
But you're right to point that in the past, when similar allegations have been leveled against Russian security agencies, backing hacker groups to
infiltrate institutions and various bodies in the West, the response has always been a categorical denial from the Kremlin, from the Defense
Ministry, from whoever you care to ask and the expectation is that the same response will be given to us this time.
As I say, we haven't had that response yet, but as soon as we do, we'll bring it to you -- Julia.
CHATTERLEY: Absolutely. Matthew Chance. Great to have you with us as well, and as you point out, any further developments on this, we will bring them
to our viewers.
Okay, let's move on because it's a busy day not only for science or stimulus, but also for statistics. To be or not to be, that is the
question. I'm talking about V-shaped recovery at least for China's economy.
Second quarter growth coming in at a forecast beating at 3.2 percent rise that's year-on-year, following Q1's almost seven percent drop. The
industrial sector looking strong, but the consumer still showing caution.
Retail sales falling compared to last year. You can see that down some 1.8 percent. The message here is that it seems it's far easier for policymakers
to stimulate manufacturing and industrial businesses than to give consumers confidence that it's safe to go out and spend during a pandemic.
The Shanghai Composite ending down some four percent overnight and perhaps a classic case here with buy the rumor, sell the fact when you actually get
the data.
The Hang Seng took its biggest drop in a month, and we've got U.S. futures lower this morning, too.
I can give you a quick look at those consumers also in focus here in the United States. Retail sales, rising some seven and a half percent in June,
better than expected. But of course, a marked slowdown for May's record spike of 18 percent.
[09:05:23]
CHATTERLEY: As you would expect, all the spending supported by generous jobless benefits. Remember, they currently at the end of this month, and
this is a critical factor. Add in COVID cases spiking around the country and reopening measures that have been slowed or reversed. The fear, perhaps
now is that this might be as good as it gets.
This comes as a further 1.3 million people filed for the first time unemployment benefits last week, we still have over 17 million people
continuing to collect benefits in the United States. And as we keep saying on this show, the virus in the end will dictate the pace of recovery and
the only V that matters for sustained growth is that elusive V for a vaccine.
Let's get to the drivers. China says its economy grew more than three percent. In the second quarter from a year ago rebounding from a
coronavirus driven downturn in the first quarter. It means the world's second largest economy stayed out of technical recession.
David Culver is live in Beijing for us. David, we know, and you and I debate this every time we talk about the data that their method of
collecting and reporting is very different from it is in the West.
But as far as on the surface goes, this looks like a pretty strong recovery.
DAVID CULVER, CNN CORRESPONDENT: And that is certainly something, Julia that state media here is trying to put out there. But as you point out, we
always have that asterisk that says this is coming from the Chinese government.
So there's a lot of skepticism with numbers like this, especially given how positive they are at 3.2 percent. That's beating what most analysts were
forecasting here.
Now anecdotally, what we are seeing is that things are certainly reopening. I mean, you see that pretty much anywhere you go here in Mainland China,
the exception being the country itself.
I mean, it's still blocked off to most every foreigner who wants to come in with very few exceptions. And even for example, if we were to leave, we
couldn't come back in.
So that being the case, domestically, they are starting to see an increase in spending. They're starting to see the successes of coming back online.
However, that's for the second quarter where they're showing this 3.2 percent growth that comes after what was a dismal first quarter,
understandably so, given that the outbreak was really at the epicenter in Wuhan and in Central China, a place that's not only a transportation hub,
but also heavy in manufacturing, that all came to a halt, and they saw their first contraction economically since the 70s.
I mean, for them, it was a Cultural Revolution. So this is an incredible rebound from that. But what we're dealing with now here in China, and this
is going to be interesting to see how it factors in is widespread flooding in the central part of China.
I mean, this is not insignificant. I mean, this is a major deal because it's also forcing things to shut down once again, and you're starting to
see folks who are quite literally standing shoulder to shoulder in these recovery efforts there, not wearing masks and you wonder could that then be
the perfect ground for this virus to fester once again and resurface and then force yet another round of lockdowns and closure?
So it does look to be successful for right now. The question is, is it sustainable -- Julia.
CHATTERLEY: And for so many reasons, to your point, it's stimulus driven in many respects when you look at the numbers here, but the challenges for
the second half of the year, whether it's virus related, climate related, broader geopolitical tensions, as well with what we've seen in you and I
have discussed on a daily basis here, now concerns about visa restrictions for Chinese Communist Party members and their families, even concerns about
journalists, of course, too, like yourselves that are operating in China. There's many worries here.
CULVER: Yes, no question, Julia. And it's interesting you bring up that potential ban against Chinese Communist Party members and their families.
We know that there are some 92 million Communist Party members here in China; and in the U.S., as according to "The New York Times" floating this
idea of this travel ban saying that they and their families cannot enter the U.S.
It would be very difficult to be quite honest to enforce that, to figure out who exactly is a party member, but that's certainly what's coming out
at least from "The New York Times" reporting and something that we would expect to hear more about today.
Now, the Chinese Foreign Ministry did react to that, by the way, and they called that in their words, pathetic.
CHATTERLEY: Yes, no comment. David Culver, thank you so much for joining us, as always. Yes, careful.
CULVER: Sure, Julia.
CHATTERLEY: We have fresh data as of the U.S., too, this morning, 1.3 million Americans filing for first time jobless claims this week and this
past week and retail sales, rising seven and a half percent in June. Christine Romans joins me now. Always trying to pour over the fundamentals,
Christine. I mentioned here, you'd expect to see a bounce back. The question is as far as whether it's retail sales or the sheer number of
people that we know are still asking for support in the United States. Is this as good as it gets, given the broader virus issues.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: You know, 51 million people over the past 17 weeks -- 51 million people, either
furloughed or laid off filing for the first time for unemployment benefits. It's just been a drumbeat every week of more than a million, even in its
improvement, it's still more than a million people, 1.3 million people who need assistance.
[09:10:37]
ROMANS: And the enhanced unemployment benefits, the extra $600.00 a week that Congress passed to help people get through this pandemic, those expire
in just a couple of weeks even as this steady drumbeat of layoffs continue.
I think that when you look at Arizona, California, Florida, Texas, some of these states that are starting to close up again because of the resurgence
of the virus, you could see more layoffs next week.
I also think at the very beginning of this, many people and certainly not in Congress didn't anticipate at 17 weeks into this, we would still have
such level of pain in terms of the labor market. Until you get control of the virus, until you can get people, almost everyone out there wearing
masks, you know, to keep the spread down, you're going to have a really tough time recovering and getting those people back to work.
CHATTERLEY: Yes, it's fascinating. You know, we were talking to Paul Krugman about this in the past week, and he said, actually, Congress did a
really great job of, despite the numbers here keeping household incomes elevated to the point where they could get through this two, three-month
period. Oh, boy, are we then going to hit a cash cliff, whether it's small businesses that have spent all the money or this bump up in unemployment
benefits that runs off? You can't let everything go all at once. So, we're back where we started.
ROMANS: Yes, and there's a big discussion, a big debate, as you know, in Washington about whether they should extend that $600.00 a week extra, and
you've got a lot of Republicans who are saying this is discouraging people from going back to work. It's a handout that is going to prevent the labor
market from recovering.
But JPMorgan has an analyst note out this morning, pointing out that 73 cents of every dollar of those -- the extra stimulus, the benefit stimulus
went right back into the economy. It was spent. And that shows that it was well targeted.
So I think you're going to still have a brisk discussion about 32 million people getting some sort of unemployment benefit right now, 17 million on
continuing unemployment claims. I mean, is this the right time to be pulling back those supports until -- again, until you get the virus under
control and we don't have these big hotspots that keep coming back and having to open and then re-close again.
CHATTERLEY: You know, that's a fascinating statistic, Christine. If 75 percent of that extra money actually did go back into the economy, people
were using it to buy essentials. They were buying other things. They were perhaps paying mortgages or rent if that was what was required.
Again, when you look at what the banks are doing, and we heard from Bank of America this morning -- provisions. Billions of dollars of provisions
against car payments, loans, mortgages in case it deteriorates from here.
ROMANS: And what they're signaling, when you look at those announcements from these banks, their quarterly earnings, when you see how many billions,
tens of billions of dollars now has been set aside to protect against, you know, bad loans for consumers and companies going forward. It shows you
that the banks at least are preparing for another really rough patch here going forward.
I mean, the pandemic is not behind us. And that's just the bottom line, we are still completely operating in full blown pandemic mode. The economy is
not healthy and normal at the moment. There are millions and millions of people who are not working and unsure about when they're going to be able
to go back to work.
And there are people who have gone back to work, who are now at risk losing their job again as we have more closures, as we try to again, get this
virus under control.
CHATTERLEY: Yes, we haven't seen a consumer financial crisis, despite what we think yet. The risk is that it comes if we didn't see more support.
ROMANS: Yes.
CHATTERLEY: Christine Romans, thank you so much for that.
ROMANS: Nice to see you.
CHATTERLEY: Twitter, blaming a coordinated social engineering attack, quote, "for the hijack of multiple high profile accounts." Barack Obama,
Kim and Kanye West, Warren Buffett, Jeff Bezos, even Mike Bloomberg were among those involved in the hack promoting a cryptocurrency scam.
Donie O'Sullivan joins us now. Donie, this was mind blowing when we saw all of these in succession very, very quickly all tweeting out this suggestion
that they would match crypto donations. What do we know about what happened here?
DONIE O'SULLIVAN, CNN BUSINESS REPORTER: Hey, Julia. Yes, you're right. This really is a historic hack. I don't recall anything like this on a
social media platform before.
Some of the most famous people in the world, as you mentioned, had their accounts compromised yesterday, including, of course, the presumed
Democratic nominee for President here in the U.S., Joe Biden.
Right now, there are far more questions than there are answers. Last night Twitter came out and said that basically, an employee had been compromised
in some way through a form of hacking called social engineering.
[15:15:16]
O'SULLIVAN: Now, what that normally means is that the person was in some way either convinced, or bribed, or paid or tricked into handing over
access to Twitter's internal systems. That in turn allowed the hackers to post these messages across some of the accounts of the most famous people
in the world -- Julia.
CHATTERLEY: Yes, which is quite fascinating in of itself, because it means that Twitter employees have access to our Twitter accounts. For example,
they could perhaps see private messages. They're capable of changing passwords, for example, changing e-mails and then changing passwords.
There's some warning signs here. They didn't take hold of President Trump's Twitter handle, Commander-in-Chief of the United States.
O'SULLIVAN: Not that we're aware of, at least, I mean, you know, I think some of the questions that are remaining right now is, were there other
accounts hacked or compromised that did not send out these tweets to the Bitcoin scam? And I think the bigger question is, you know, was this just a
Bitcoin scam?
I mean, you know, these hackers really had the keys to the kingdom. They could have tweeted anything from Barack Obama's account, from Apple's
account, from Joe Biden's account, and they chose to tweet this, you know, obvious scam.
You know, I think one starts to wonder if this Bitcoin scam could be a cover for something else. So Twitter needs to be really upfront with
telling its users what was accessed here. Were the private messages of people like Elon Musk and Kanye West and Obama, were they accessed by the
hackers? And who was behind this? And really, what is their motivations here?
They are obviously working with law enforcement here in the United States. But this could be the start. It is the start of a really troubling story
for this company.
CHATTERLEY: Yes, I agree. I mean, this is a PR, a technical disaster for Twitter, in itself, never mind anything else that took place here to your
exact point. But lots of questions here about what was the purpose? Was it a money making scam? They apparently got away with several tens of
thousands of Bitcoin here from people that actually were caught up in the scam and actually donated money.
But there's a far bigger question here and that comes down to why and who - - who did this? Do we have any sense of who this may have been?
O'SULLIVAN: No, nothing at all at the moment. But I mean, just imagine if -- you know, yesterday, we saw the accounts of all these people
compromised, including Joe Biden. Imagine if just alone, we saw a tweet from Joe Biden's accounts on any given day, and we found out that Joe
Biden's account was compromised, that in itself will be a huge story.
So in some way, the whole Bitcoin side of this is a distraction. And, you know, we have seen how documents were hacked and leaked in the 2016
election by entities tied to the Russian government. You know, this could be setting off a very dangerous situation here, where we don't know what
these hackers had access to. We don't know who these hackers are.
And of course, even if it's not a nation state, even if it is criminal hackers, criminal hackers sometimes work with state actors. They can sell
information to state actors.
So, you know, I think a lot of folks in in the security space right now have the dread that, you know, we might start seeing private messages
leaking out in the weeks and months ahead -- Julia.
CHATTERLEY: Yes, I have to say I worry less about Joe Biden because he doesn't make policy for social media, but certain others did, which is
where I was trying to lead the conversation earlier and we shall refrain because some of those tweets are astonishing and they're real, so we won't
go there.
But yes, Donie, lots of questions, not a lot of answers at this stage. Donie O'Sullivan. We will talk more about this coming up on the show. Thank
you.
O'SULLIVAN: Thanks, Julia.
CHATTERLEY: Okay. For now, we're going to take a break but coming up, if scammers can tweet from the names of the rich and famous, what else can
they do? An alarming warning from a former hacker later on in the show.
Plus, pleading for a massive expansion in coronavirus testing across the United States, the Rockefeller Foundation's call, desperate plea for a
national strategy. That's all coming up. Stay with us.
(COMMERCIAL BREAK)
[09:22:29]
CHATTERLEY: Welcome back to FIRST MOVE live from New York where there's a cautious tone I have to say on Wall Street and on global markets in general
as investors pour over economic data from the United States and from China.
In the U.S., retail sales rising some seven and a half percent last month. It's certainly an astonishing rise, let's be clear, but clearly, it's a
slower pace than in May's record numbers.
Initial jobless claims, meanwhile, holding steady at a further 1.3 million people and in China, new data showing China avoiding a technical recession
in the second quarter, thanks to strength in manufacturing in the industrial sector.
But the consumer remains cautious, too, with retail sales falling almost two percent last month.
Lots to discuss. We're now joined by Mark Konyn. He is Chief Investment Officer at AIA Group. Mark, fantastic to have you with us. Thank you for
joining the show. What do you make of these Chinese growth numbers?
MARK KONYN, CHIEF INVESTMENT OFFICER, AIA GROUP: Ahead of expectations, Julia. I think we were expecting a bounce. I think the bounce has been
stronger than was generally driven by consensus, largely from the supply side, less on the demand side. But overall, I think, decent numbers.
CHATTERLEY: What does it actually mean when China says, look, we saw a decline of 6.8 percent year-on-year in the first quarter and a jump of 3.2
percent year-on-year in the second quarter because I compare that to the down 20, down 30, down 40 that we see in Western nations. And I wonder what
their data means, quite frankly.
KONYN: Well, the key with China always is to -- is compare the data with itself. So, you look at the data compared to how they reported previously
and that gives you a sense of the direction of travel.
So the current numbers show an expansion year-on-year for that quarter, or 3.2 percent. If you go back a quarter, the numbers showed a decline of 6.8
percent. So, a very significant change in economic activity overall in China.
And if you compare it to the West, I think what China has been able to do, it's been able to contain the effects of the COVID contagion quite
effectively, and it's really pump primed the supply side so it's got the supply side back to work extremely quickly better than what we're seeing
elsewhere in the world, and certainly what we're seeing in the developed economies, so that's really what's explaining that big improvement overall
in economic activity in Mainland China.
CHATTERLEY: I mean, it's fascinating to your point, it comes down to the virus and we say this a lot on this show and controlling that ultimately,
but you see growth returning to pre-COVID levels by the end of 2020.
I mean, that's astonishing compared to what we're expecting in the West. How, when the rest of the global economy is so weak?
[09:25:20]
KONYN: So remember, the measures that China took earlier in this year were drastic by any standards. There was a complete and utter lockdown, no
movement, people couldn't leave their homes. Their business had stalled. Everything had shut down immediately.
So, as they've come out of that, as I say, with a sort of centrally driven economy, the supply side has really picked up. So industrial production has
sort of made up for lost time. They had outstanding orders and they were able to fill those orders.
We've seen exports pick up as a result and we've seen imports pick up as well in China. They sucked in raw materials to improve that production.
There is a caveat here, of course, that the demand side, the consumer is lagging, and as we get into the second half of the year, we're going to see
a sort of leveling off in economic activity.
But nevertheless, by the time we get to the fourth quarter, we're probably going to see China restore the level of growth and economic activity at the
end of the year to where it was at the beginning of the year.
So some are calling it a V-shape. It's more like a sort of sharp recovery and then a leveling off.
CHATTERLEY: Sharp recovery and then leveling off. It's almost like Nike tick again, but a decent style quite frankly.
KONYN: It's another Nike tick, yes.
CHATTERLEY: Yes.
KONYN: And one thing we noticed as well, in China, is where we have seen the sort of second and third wave infections sort of show up, they've been
very quick to track and trace and again, contain the level of that contagion.
So they've been very quick to act and it's allowed the economy to continue making progress.
CHATTERLEY: Yes, minimizing the disruption at the same time.
KONYN: Indeed.
CHATTERLEY: Mark, very quickly, the stock market has been incredibly volatile over the last week and a half in particular, what's your view on
Chinese equities at this moment?
KONYN: Well, they are on a tear. If you look at what's happened in July, you're absolutely right. Hugely volatile. We've given back half the gains
already that we made in the month of July. We made about 15 percent of the peak.
We are probably set for more upside, but the authorities are very careful, because they look back to 2015 when there was a lot of encouragement for
retail investors to get into the stock market and there were a lot of bad practices in terms of borrowing to invest in the stock market. This time
around, they're trying to keep a cap on that. So, they're very careful.
But they do need to see progress in the capital markets, because with all the concern and the friction with the U.S., they need to generate the sort
of innovation in technology. They need the stock market to provide the financing for that.
So, we are expecting to see earnings pick up and for the stock market to make steady progress, maybe not as dramatic progress that we have seen in
the last sort of two months, but certainly steady progress in the second half of the year.
CHATTERLEY: Yes, a very important point about the financing here as well for that technological development. We need the two things to come at once.
Mark, great to have you with us. Thank you so much.
KONYN: My pleasure. Thank you very much.
CHATTERLEY: Mark Konyn there, thank you for staying up late for us as well. There, the AIA Group Chief Investment Officer.
All right, after the break, a former hacker's take on Twitter's massive security breach and of course the market open. Don't go away.
(COMMERCIAL BREAK)
[09:31:29]
CHATTERLEY: Welcome back to FIRST MOVE where your stocks are open for trading this Thursday. We've got red arrows on Wall Street, a follow
through, I think, for weakness on both the European and the Asian markets. Disappointment, too, as the U.S. jobless claims remain stubbornly above
that one million level for the 16th straight week, and of course, concern about the direction of retail sales. Can the consumer hold steady as
reopening efforts are paused or rolled back?
The NASDAQ is lower this morning as investors brace for the start of tech earnings season, too. Netflix reports after the closing bell and the last
of the major banks have reported Q2 earnings today as we discussed earlier.
Morgan Stanley crushing expectations with a 68 percent rise in trading revenues. Meanwhile, Bank of America saw profits halve after setting aside
an additional $4 billion for loans that may go sour.
Banks with strong trading desks have outperformed most definitely this earning season. The big question mark, of course remains over the consumer
and the threat of major new layoffs remains on the horizon, too.
American Airlines says 25,000 workers now face potential furloughs in the fall. And a reminder too of our breaking news this morning. The U.S., U.K.
and Canada warning of Russian attempts to hack coronavirus vaccine research.
Meanwhile, Twitter stock falling following a major cyber scam where hackers seized control of accounts belonging to billionaires, politicians and
celebrities and tricked a number of their followers into handing over Bitcoin.
Even God didn't remain immune from the coordinated hack, which used employee accounts as a way in. It's not the real God, of course, but there
you go, someone calling themselves God. It has left Twitter in need of divine intervention at the very least.
Joining us now, Kevin Mitnick. He is a former hacker who is now a security consultant @knowbe4. Fantastic to have you with us on the show.
Kevin, this was a loud and proud hack. I think let's call it that. What do you make of it?
KEVIN MITNICK, SECURITY CONSULTANT, @KNOWBE4: Yes, it was very loud and proud. Well, it's the biggest hack, I think with Twitter to date. It
definitely made a lot of noise in the media, of course, and the hackers were monetizing this. They were using a very common attack, what we call
social engineering. That's where we use manipulation, deception and influence to trick a target into complying with a request.
And apparently, social engineering was used to target an employee who had administrative access at Twitter, and then the hackers were able to
leverage this administrative access to tweet under anybody's account.
And of course, as we've seen, they were able to tweet under these A-list celebrities, this message about send me $1,000.00 of Bitcoin and I'll
double it and send you back $2,000.00 and a lot of people fell for it.
And yesterday, the last time I looked, there was over $100,000.00 of Bitcoin that were transferred to the bad guys.
CHATTERLEY: I mean, employees if, if you're correct and the reports are correct, have been weaponized in this process. It's gaining access to
people's accounts and information by employees of the firm itself. How easy is that to achieve?
MITNICK: Quite easy. It depends on the security controls that the company has, but if this was done through a very common technique known as
phishing, it is usually quite easy because the hacker only has to fool one person inside the company who has that administrative access through a
phishing attack, and we all know what that is, getting a fake e-mail that you might click on a link or open up an attachment.
And then unfortunately, the bad actor has complete control over your computer.
If it was done in that way. There's another technique where hackers will call people in companies over the telephone and pretend to be somebody
they're not to trick an employee into giving that access away.
[09:35:38]
CHATTERLEY: It was deeply embarrassing for Twitter, whichever way you look at this, but there are far more serious implications when we're in an
environment where we're in an election year, where there's geopolitical tensions, where fortunately or unfortunately, policy decisions or policy
positioning let's say particularly, when we're talking about politicians in the United States is made on Twitter.
Getting hold of one of those, a foreign actor getting hold of one of those things is very dangerous.
MITNICK: It doesn't sound like this was a nation state in this case, however, I have no doubt, a nation state could pull the same type of
attack. They could pull the same type of attack off, but I'm surprised that they didn't tweet from Trump's accounts.
But I'm wondering if these bad actors obtained access to the direct messages of these A-list celebrities. So for example, if Obama or Biden had
personal messages that were going back and forth on Twitter that aren't public, were these bad actors able to give access to those?
CHATTERLEY: Yes, it's a note to self, delete all private messages on social media. You have to assume now that you're vulnerable.
I want to move on and talk about the other breaking news story this morning as well. The U.K., the Canadians, the United States, all accusing Russia of
trying to use cyber hacking techniques to access pivotal vaccine research. The whole world suffering with this pandemic. How surprised are you by
this?
MITNICK: I'm not surprised at all. It makes a lot of sense that nation states such as China or Russia would go after this type of research because
everybody is looking for the vaccine that's going to work.
So, I suspected this months ago that these organizations that are doing this vaccine research, I suspected they were already compromised.
CHATTERLEY: Are we that much more vulnerable as well by significant portions of workforces operating from home. The systems perhaps are already
weakened by that.
MITNICK: Well, the problem is when you work from home, you don't have the protection of the organization's security controls. So, you're using your
own personal router or your own personal wireless network. And unfortunately, in a lot of cases, those systems are a lot less secure than
the ones that are in the enterprise.
And of course, if the victim is compromised using a phishing attack, which is one of the most common attack vectors, again, usually the security at
home is not to par, like it would be in an enterprise environment.
CHATTERLEY: Yes, plenty of challenges out there. And of course, so few of these attacks, we ever find out who actually was the perpetrator and that's
the critical issue here, too.
Kevin, great to chat with you. Thank you so much for joining.
MITNICK: Okay.
CHATTERLEY: Kevin Mitnick there. Fantastic to have you with us. All right, up next, testing times. Our next guest says the U.S. will lose the COVID
battle without a nationwide plan for tests. That's up next. Stay with us.
(COMMERCIAL BREAK)
[09:41:49]
CHATTERLEY: Welcome back to FIRST MOVE. The United States needs to be taking measures to ramp up testing to 30 million tests a week by October in
order to win the battle against COVID-19. That's according to the Rockefeller Foundation.
Let me just give you some perspective on that number. The C.D.C. says the U.S. has done only 45.5 million tests in total, since the pandemic began,
and this is why the foundation wants a national testing program set up.
Joining us now Dr. Rajiv Shah, President of the Rockefeller Foundation, which promotes the wellbeing of humanity worldwide.
Dr. Shah, great to have you on the show once again. I have to say, I have deja vu because you came on our show when the crisis really first hit back
in March-April time and you were talking about a 1-3-30 testing plan. You said we need three million tests a week by June, 30 million by October and
we're way off clearly.
DR. RAJIV SHAH, President, ROCKEFELLER FOUNDATION: Well, thank you for having me, Julia, and you're absolutely right. In the spring, we were
looking at a national crisis, an urgent disaster in the making and the Rockefeller Foundation pulled together experts from Science and industry,
importantly, from both Republican and Democratic past administrations and said, let's have a plan for our country to survive this COVID-19 crisis.
And the plan was centered on the basic idea that testing is the only way out. We, in fact, are testing about 4.5 million tests a week now in the
United States. The problem is, the delays mean that the average time to get a result is somewhere between five and seven days, and the data indicate
that that just renders those tests relatively useless for the purpose of pandemic response.
You have to know quickly whether you're positive so that your contacts can be traced and you can take yourself out of circulation and self-isolate,
and that can't happen that late. We know that now.
So our new update is calling for a $75 billion national investment to reach the 30 million tests a week by this fall and to do it by investing in a new
type of testing strategy, one that is based on antigen testing, with large, large, large scale up of access to those types of tests for teachers, for
hospital workers, for essential workers in the food services industry and for those who are putting their lives on the line right now to make sure
America can function through this crisis.
CHATTERLEY: I mean, we know we have the science. We've talked about it a lot on this show, the kind of ability to mass scale test and do it far more
quickly, to your point than perhaps allowing people to be wandering around for five, six, seven, eight days waiting for a test result and the spread
here continues.
What are you hearing from officials about the likelihood of them coming up with $75 billion in order to do this on a national level?
SHAH: Well, actually, you know, we're, we're hearing positive signals that we work with more than 30 mayors and governors around the United States,
Republican and Democratic and I think on this ground, this is more of a problem that people want to solve in a collaborative way as opposed to
making it a partisan issue.
And so we're trying to take that spirit of combining what's happening in Miami-Dade County with Tulsa, both of which led by Republican mayors with
what's happening in Atlanta, Detroit and Los Angeles, all of which led by Democratic mayors and saying, let's have a common plan that brings America
together.
[09:45:24]
SHAH: $75 billion is an extraordinarily small investment. If we have to shut down the American economy again, our experts estimate we lose about
$400 billion a month, and that the bulk of the pain and suffering sits on the shoulders of minority communities, of low income communities, of
America's essential workers and working families. That's just unacceptable and it's unnecessary, if we have a clear plan and if we make the right
investments right now.
The one thing I will add is the antigen tests are new. They're slightly less sensitive than the PCR tests that I think most people have been
talking about these last few months. They're just hitting the market now.
We issue in our report a list of about two dozen such tests that we think over the next six to 10 weeks can come into the marketplace and we really
need to flood the zone with these tests and that requires a plan. It requires thoughtful collaboration across public and private sectors and we
know how to do this, but we need to act right now because the fall is going to be much, much worse than the spring without decisive action and
collaborative leadership.
CHATTERLEY: I mean, this is the key as well, you're calling on the Defense Production Act to be utilized here, to coordinate the entire supply chain,
make sure reagents, swabs, whatever it is that's required is in the right place when it's needed to shorten that time between getting a test and then
getting the result. That's an administration, a U.S. administration decision.
SHAH: That's correct. And in fact, we're offering the administration many options. So the Defense Production Act is one way to use Federal resources
and authorities to get up to we think we need about 25 million of these antigen tests per week, and we're nowhere near that scale left if we leave
the market to its own devices.
So the Defense Production Act is one way to get there. We're also advocating for the use of Advanced Purchase Commitments which the
Department of Health and Human Services can do and is doing for vaccines.
We need that same kind of mindset for antigen tests because it's still going to be a while before the vaccine is available broadly to achieve herd
immunity.
Until then, the only chance America has to avoid a catastrophe in the fall is making widespread access to much more frequent, fast result easy to use
and cheaper tests available and available urgently.
And that's true for the dozens of school districts we work with around the country. It's true for nursing homes that we're partnering with across this
great nation. It's true for low income minority communities where our partners are serving people in city after city even Native American lands
in America.
So we have a real need to get on top of this now, and we've put forth a plan that should have real bipartisan chance of succeeding.
CHATTERLEY: It's also about schools, of course, because you've got your economy hampered by children being at home and workers having to remain at
home to take care of them. It's another huge and important question that we're asking here in the United States and around the world at this moment.
Dr. Shah, you mentioned something there about if we allow the market forces to provide antigen testing, it will be far shorter, the numbers that you're
talking about. What's your sense, if we just allow the market to do this? How many tests we would have? How short are we going to be?
SHAH: Yes, no one really knows the answer to that because unfortunately, the Centers for Disease Control has not yet published protocols on the use
of testing, screening tests for asymptomatic populations.'
And to get up to these high levels of utilization and the frequent utilization that I'm describing, you actually need C.D.C. protocols that
say, you know, teachers could do what they're doing in Aurora, Colorado where they're offering all their teachers -- 4,000 teachers testing every
two weeks or hospital workers can receive the same sort of support that we're offering to our NBA basketball professionals or Major League Baseball
players and allow them to get tested much more frequently with these rapid result, rapid turnaround tests at no cost to them so they can be safe.
You know, I'm glad you mentioned schools and teachers and hospital workers, nursing homes. This is America and left to its own devices, the market will
take the testing capacity to those who can pay the most.
And what we really need to do right now is understand that these essential workers, they are keeping our critical institutions viable during a
pandemic crisis for our nation. They are the heroes right now and they're the ones we should investing in and making sure they have access to
testing, not just the world's best basketball and baseball players.
CHATTERLEY: Yes, you've got it. If great sports stars can get this access to great testing, so should our essential workers and the people that keep
us alive Never mind, anybody else.
Thank you, sir. Great to have you with us and fingers crossed. Dr. Rajiv Shah, President of the Rockefeller Foundation.
SHAH: Thank you, Julia.
CHATTERLEY: Thank you. All right, coming up on FIRST MOVE, a surge in demand for facemasks has opened up an entirely new business for retailers
what it may mean for your wardrobe. Coming up next.
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[09:52:43]
CHATTERLEY: In the absence of a Federal mandate, Walmart, the world's biggest retailer is telling its U.S. customers to wear masks in its stores.
Similar mandates are enforced at Starbucks, Costco and Best Buy. And as Clare Sebastian reports, mask makers have a nose for a major opportunity.
(BEGIN VIDEOTAPE)
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT (voice over): It took just a few days for Meghan Navoy to pivot her small textiles business to making
facemasks.
(BEGIN VIDEO CLIP)
MEGHAN NAVOY, FOUNDER, ROSEMARINE TEXTILES: I first was just giving them all away for free and had been on my front porch. Then there was a huge
surge in demand and I listed them on my Etsy shop.
I have had my shop for two years, I've never had anything that have this sort of demand.
(END VIDEO CLIP)
SEBASTIAN (voice over): Etsy says more than 12 million masks were sold in April alone. Meghan Navoy had to pause sales of all her products for a
month just to clear her backlog of mask orders.
Three months on, the masks are still in her top three bestsellers and she has hired an extra person to help her.
(BEGIN VIDEO CLIP)
NAVOY: I think people had no mask at all in the beginning, and now, I think most people have at least one to wear and now, it's more people
looking for a cute mask that sort of goes with their style.
(END VIDEO CLIP)
SEBASTIAN: And that shift has brought much larger businesses into the facemask market from luxury brands like Mark Jacobs, these hundred dollar
masks currently all sold out to GAP which sold over three million masks in May across its different brands.
(BEGIN VIDEO CLIP)
SEBASTIAN (on camera): We're seeing some companies showcasing their signature designs like these bandana print masks from Levi's. The company
says these have been the most viewed item on their website for the past six weeks, and it's not just the world of fashion. This is from Dunkin Donuts.
Clearly, masks also present a marketing opportunity.
MARK COHEN, DIRECTOR OF RETAIL STUDIES, COLUMBIA BUSINESS SCHOOL: I think it's become becoming a ubiquitous staple, and there's no good reason why
those retailers wouldn't provide it either as a customer service feature or as a branding opportunity or as a fashion accessory.
This is an opportunity to create a brand new genre of accessories.
(END VIDEO CLIP)
SEBASTIAN (voice over): In early April, Vistaprint, the company best known for business cards and custom signage realized their customers' needs had
changed.
(BEGIN VIDEO CLIP)
RICKY ENGELBERG, CMO, VISTAPRINT: For us to get into face mass was a pretty, pretty easy decision. We work to serve small businesses every
single day, and one of the biggest things we saw that was going to happen with small businesses had to be able to reopen safely.
(END VIDEO CLIP)
[09:55:10]
SEBASTIAN: Vistaprint says it can now produce a couple of hundred thousand a month with the ability to scale.
(BEGIN VIDEO CLIP)
ENGELBERG: It will be a category that is as urgent as it is right now a year from now, probably not. Will it be something that's way more a part of
our everyday lives going forward than it is -- than it was six months ago? Definitely.
(END VIDEO CLIP)
SEBASTIAN (voice over): A simple safety product during a global pandemic now giving the business of accessories a whole new face.
Clare Sebastian, CNN, New York.
(END VIDEOTAPE)
CHATTERLEY: Well, I do like the banana one, but pretty or otherwise, just wear a mask. That's it for the show. You've been watching FIRST MOVE. I'm
Julia Chatterley. Stay safe. I'll see you tomorrow.
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