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First Move with Julia Chatterley
The U.S. Grants Emergency Approval For Convalescent Plasma Treatment For COVID-19, The WeChat Stocks Climb Amid Reports Trump's Executive Order May Be Limited; The U.S. Gulf Coast Braces For Storms Marco And Laura. Aired 9-10a ET
Aired August 24, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:18]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from New York, I am Julia Chatterley. This is FIRST MOVE and here is your need-to-know.
Pushing plasma. The U.S. grants emergency approval for convalescent plasma treatment for COVID-19.
Tencent ticks higher. The WeChat stocks climb amid reports Trump's executive order may be limited.
And double trouble. The U.S. Gulf Coast braces for storms Marco and Laura.
It's Monday. Let's make a move.
Welcome once again to FIRST MOVE. I hope you had a restful weekend and a good start to the week depending on where you are coming from because
coming up on the show, we'll be talking the politics and the promise of blood plasma treatment for COVID-19 with the Mayo Clinic, the institution
that's collected the most data, and analyzed it on the subject.
Until then, President Trump's new plasma push, and tech stock gains are helping lift stocks premarket. Europe also higher as you can see. Germany
and France both gaining two percent plus.
Tech, the dominant story in China as well with the Shenzhen Stock Exchange relaxing rules for firms looking to go public on its new Chinext
subsidiary, a potential challenge to the dominance of Shanghai's star market, but I think the key there is the fostering of a new generation of
tech giant hopefuls at a pivotal moment in time, of course, 18 tech stocks soaring more than 200 percent on their debuts today.
A strong session, as I mentioned, as well for the WeChat owner, Tencent, amid reports that U.S. restrictions on the app may be less severe than
initially feared. All the details are coming up when I get my teeth back in.
Apple also up some three percent premarket. The firm worth more than $2 trillion when trade kicks off today. Let's call it a Cupertino coup. Apple
contributed more than half of the S&P 500's rise to records last week.
Meanwhile, Tesla also up more than four percent -- yes, more than four percent premarket. The more these tech titans rise, the greater the talk of
course of stretched valuations and a lack of market breadth.
This is interesting, last week losers outpaced winners by a two to one margin and of course, all the while, the underlying economy continues to
suffer. Well, step forward Jay Powell, the Fed Chair speaking this week. He may need to be Powell proactive yet again if economic trends soften
further.
Let's get to the drivers. Christine, quick, take it away from me because I simply cannot get my words out today.
I read an article over the weekend -- this is shocking -- that said the top 10 percent of earners own some 87 percent of all stocks and that was during
the first quarter of this year, and the data came from no other than the Federal Reserve. Eye-watering.
ROMANS: It really is and it shows you that the stock market is not the overall economy. You keep hearing people talk about -- the White House in
particular -- a V-shaped recovery. Well, the economic recovery does not look V-shaped.
The stock market had a V-shaped bounce back here, but you're hearing a lot of people talk about what's in store in the weeks ahead, especially
bringing back to Powell how frustrated must he be and must the Fed be at the lack of action on the fiscal front from Congress.
We do know the $600.00 a week in extra jobless benefits have been gone now. This is the fourth week in a row. This is entering the fourth week now, and
there will be maybe half that much could get into some people's pockets for two or three weeks because of the President's action.
But even then, Goldman Sachs says it's too little too late. There will be a big hit to personal income in August and that will slow the recovery.
CHATTERLEY: Yes, and it is bound to. I mean, when you have a gap in people's income to the tune of the numbers that we've been talking about,
that's going to have an immediate impact on spending and this is a spending-driven economy.
Christine, talk to me about the K-shaped recovery.
ROMANS: Right.
CHATTERLEY: We've dealt with the Alphabet soup, but I read about the K- shaped recovery over the weekend, whether you're talking about stock markets or the economy or the divergence between the two, and this actually
ring true for me in many ways.
ROMANS: Me, too, Julia. I'm so glad you brought it up because you have seen probably in your own world, right, people who are recovering quite quickly
because of the job they have or the ability to work from home and teach your kids from home.
There are some people who have adapted into this pandemic economy. There are others, particularly service sectors workers who have not.
So think of that K shape. Some people in the workforce recovering quickly and recovering nicely, others actually going in the wrong direction.
So actually, widening the disparity of opportunity and outlook for workers while you have the economy recovering. It's definitely not the same for
everyone and it could even be worsening things.
I mean, I think back to the 2008-2009 financial crisis and I remember one of the lessons from that crisis was there are some people who recovered
quite nicely and quite quickly and there are others, it took a decade. They were just getting back to even when this thing hit us now, right?
[09:05:38]
ROMANS: So it's just so unfair that this happens in the American economy, there will be winners and losers and I think you look at the workforce in
particular, it feels like a K-shaped recovery.
CHATTERLEY: Yes, and it's a lesson that Jay Powell at the Federal Reserve knows and the policymakers there have learned and lawmakers simply haven't,
because allowing us to go through this period of weeks and weeks without further support is just exacerbating the length of time we have to recover
here.
Christine Romans, thank you so much for that.
ROMANS: Nice to see you.
CHATTERLEY: Yes, Donald Trump touting what he calls a powerful therapy to treat COVID-19 patients. It uses plasma from the blood of people who have
had the virus and since recovered. It just got emergency approval for widespread use, but just how effective is it?
Elizabeth Cohen is here and definitely the best person to talk us through this. Tens of thousands of people have been studied, but we go back to this
idea once again of a randomized test to get results that we can say this is a solution, a treatment that has great efficacy.
Can we say that at this stage, Elizabeth?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: No, we can't. This was not a randomized trial. There were so many issues with this trial. It's
almost hard to know where to start.
The only way to do this is to get super nerdy on you, Julia, but I know that you can handle it, so I'm about to get super nerdy.
The first point that I'm going to make is that in this trial, they had two different death rates that they could look at. And the Trump administration
chose to look at the less reliable death rate, the one that was less reliable because it looked better. So they chose a less reliable death
rate, but the number made them look better.
So let's take a look at exactly what happened, if we take a look at these numbers. The Trump administration says there was a 35 percent decreased
death rate when people were treated with convalescent plasma earlier versus later in their hospitalization.
But that's when you look at how many people died seven days after getting treatment, just seven days out. When you look at it, 30 days out, which of
course is much more reliable, it's more time, it's more data, that death rate was only decreased by 23.6 percent. So it was still decreased, but it
wasn't as good.
It is interesting to note that they chose the better rate, the one that had the better optics, the one that had the better drama, but in fact was less
reliable.
And Julia, this next point is actually even more important. That decreased death rate, could it be because people got convalescent plasma earlier in
their hospitalization? Sure, that could explain it.
But you know what else could explain it? If they were getting convalescent plasma earlier in their hospitalization, they probably were getting other
things earlier, too. Were they getting steroids earlier? We know that those help. Were they getting remdesivir earlier? We know that that antiviral
helps.
So you and I have talked a lot about cause and effect. Just because plasma got there early and those people had a lower chance of dying, well, what
else were they getting earlier? You don't need to be a medical genius to know that getting treatments earlier is almost always better than getting
them later -- Julia.
CHATTERLEY: Yes, I mean, you make some great points here and the selective choice of data in order to promote an argument here is incredibly worrying.
But if we separate the timing of this, the politicization of this, of course, the first day of the Republican National Committee this week,
Elizabeth, I come back to the idea of doing no harm. Is there any suggestion of using this doing harm to patients versus making a judgment
call that it's a wonder drug for treating them?
COHEN: You know, we don't know if we're doing harm or not until we've thoroughly studied it, and we haven't thoroughly studied it.
Convalescent plasma, giving plasma from a survivor to a current patient is generally thought of as being safe, that even if you're not helping them,
you're probably not hurting them. But that wasn't been thoroughly studied, so we can't say that for sure.
But to sort of flip that around for a minute, Julia, the question is, are we really helping them? We don't know if we're really helping them, and
without an F.D.A. emergency use authorization, without it, plenty of people were getting this treatment.
He didn't need this F.D.A. authorization in order to give people convalescent plasma. More than 100,000 people in the United States have
gotten convalescent plasma for COVID. He didn't need to make this move. He did it for the theatrics of it because it looks like, wow, look what I'm
doing. I, Donald Trump, personally am saving people, more than 100,000 people got convalescent plasma without him making this move. He didn't need
to do this.
[09:10:19]
CHATTERLEY: And therein lies the key. Elizabeth Cohen, thank you so much for that.
COHEN: Thanks.
CHATTERLEY: Tencent adding billions of dollars in market value, shares of the Chinese tech giant closing higher by almost six percent in Hong Kong.
That's after a report suggested the risk of a U.S. ban on Tencent's app, WeChat might be less than feared. It comes as another Chinese company,
ByteDance is preparing to sue the White House.
Selina Wang is in Hong Kong for us. Wow, Selina, we're keeping you busy there. There's a lot going on. So there's some agree of optimism, it seems,
from investors in Tencent that perhaps there could be some carve out for U.S. businesses that rely on WeChat for targeting consumers, customers in
China, at least as far as reports are concerned. Talk us through who this might impact.
SELINA WANG, CNN CORRESPONDENT: Julia, yes, a lot to unpack here. It seems that the Trump administration is realizing that an all-out ban on U.S.
companies from working with WeChat would be devastating for these U.S. companies, citing unnamed sources, this report from Bloomberg said that
U.S. administration officials are privately reassuring U.S. companies that they can in fact still do business with WeChat in China.
This is a major relief for Tencent as you're seeing from the stock rally, but it's an even bigger relief for these U.S. corporates doing business in
China.
Julia, we have been talking about this for weeks now. WeChat is indispensable, not just for consumers, but also for businesses. This is a
super app that is necessary for daily life, whether it's messaging, social payments, e-commerce, and for businesses whether you're Walmart or
Starbucks, you rely on WeChat to market and sell to the Chinese consumer.
Apple of course has the most at stake here. It gets about a fifth of its sales from China and had an all-out ban been instituted, it would have
meant that Apple would have had to remove WeChat from its App Stores in China. That would have meant a major dent on its iPhone sales in China.
Now, risks do still remain for these corporates in China until details on this executive order are released and Trump could still overrule anything
that his senior administration officials decide on.
And even though we are seeing this partial carve out potentially as you noted, individuals in the U.S. would likely still face restrictions on
using WeChat, which has major implications as well.
It's necessary for people in the U.S. to interact with friends, family and business contacts in China.
CHATTERLEY: Yes, but oh, boy. Imagine the lobbying going on for some of these U.S. businesses, to say, hey, we still want to be able to use WeChat,
even if you restrict broader use of it elsewhere.
Selina, in the meantime, ByteDance biting back. I was dying to say that. What do we know about their apparent attempts to tackle the U.S.
administration on potential restrictions, too?
WANG: We've been expecting this lawsuit to drop for quite some time, and over the weekend, ByteDance now officially saying they are going to sue the
Trump administration. They could make an argument on the grounds that the Trump administration deprived it of its due process, that it violates the
First Amendment.
It could also try and contest that it does not in fact pose a national security risk as you and I have talked about, most security experts say
that the risk posed by TikTok is theoretical at this point and the administration hasn't presented any concrete evidence.
But the lawyers I've spoken to say that it is highly unlikely that TikTok is going to succeed on any of those fronts. It is quite rare for the courts
to review sanctions imposed by IEPA, that's the International Economic Powers Act that the President used to invoke this ban.
And when the courts have, they've been largely deferential to the U.S. government. At the same time, they are also unlikely to second-guess the
President's national security assertions. That's what we've said, according to these legal experts.
At the same time, though, it is possible that TikTok and ByteDance are trying to drag this litigation out long enough for there to be a change in
the administration, hoping for a change in the President.
However, they've also noted that it is unlikely Biden would withdraw this executive order.
I do want to point out an interesting comment that one lawyer made to me, which is that the least obvious but most important part of this lawsuit is
that it could maximize TikTok's value in a potential sale to a U.S. company because it raises doubts that this would be a fire sale, which then forces
potential bidders like Microsoft or Oracle to come to the table with a sweeter deal.
CHATTERLEY: That's such a great point. If we're going to be sold, we're not going to go down without a fight here and try and raise the value in the
interim. Great point. Selina Wang, great to have you with us, as always. Thank you.
[09:15:07]
CHATTERLEY: All right, these are some of the other stories making headlines around the world. The U.S. Gulf coast gearing up for not one, but two
dangerous storms.
Marco was downgraded to a tropical storm, while tropical storm Laura is expected to strengthen into a hurricane. Both storms were previously
forecast to strike the Louisiana Coast as hurricanes within miles of each other.
Let's get more on this from our meteorologist, Chad Myers. Chad, always great to have you with us. Just talk us through what to expect.
CHAD MYERS, CNN METEOROLOGIST: Well, the first storm, Marco, is very close to New Orleans, within probably a hundred kilometers. It will put down a
lot of rainfall, but really only winds of about 30 or 40 kph, nothing all that significant.
What we're going to watch is the heavy rainfall. It could be 50 to 100 millimeters of rain as it rolls by. Everybody can handle that.
But now here comes Laura, the storm just south of Cuba getting into the Gulf of Mexico. That water is 30 degrees C, some spots 31 and it is going
to grow and it's going to get much stronger, and we are looking at 165 kph storm or higher, really. This could certainly go higher than that because
of the warm water, all the way down to the south of this year, guess what's there? U.S. oil offshore production.
All of the rigs here in all of these colors here, those are the rigs that are going to have to be evacuated because you can't be standing on a rig in
165 kph. So we're going to watch that certainly as the storm tries to grow in intensity.
Where we are now, we are not going to see too much here across the area from Marco. Marco is really just a storm that's going to move on by. The
rain showers are going to be very heavy though, certainly some spots, 150 to 250 millimeters of rain is certainly likely, 500 is possible. So we'll
keep watching all of this. This is part of the U.S. agricultural belt, too. More rainfall falling on there, but we are watching oil well derricks for
sure -- Julia.
CHATTERLEY: We're going to watch it with you. Chad, great to have you with us. Chad Myers there, thank you.
Thousands of firefighters are working tirelessly in California, as almost 600 wildfires blaze on. At least four people have died and around 400,000
hectares have been burned.
President Trump declared it a major disaster to release aid for the state's recovery.
In a few hours' time, U.S. President Donald Trump will speak in the first of four nights of the Republican National Convention. President Trump is
expected to lay out his plan for a second term in the White House as the event builds up to formally naming him as the party's 2020 candidate for
President.
The government in Belarus is warning protesters to maintain peace at demonstrations over a presidential election many see as illegitimate.
Independent observers have criticized the country's election as unfair and many in the international community are pushing for President Alexander
Lukashenko to call a second vote.
All right, we're going to take a break here on FIRST MOVE, but plenty more to come. It's peak summer vacation season, but what have COVID staycations
meant to the hotel industry? Trouble, I can tell you.
Plus a damaging audio recording of President Trump's sister released as the Republican Party kicks off its national convention. Our preview of the
R.N.C. next. Stay with us.
(COMMERCIAL BREAK)
[09:21:22]
CHATTERLEY: Welcome back to FIRST MOVE. Hard to believe, but we're beginning the last full week of trading for August. Summer may be slipping
away, but the rally on Wall Street remains red hot.
We are talking fresh records for the S&P and the NASDAQ at the open. The S&P 500 is coming off its fourth straight week of gains, thanks to the
continued rally in a handful of big tech names as we've been discussing on a daily basis, it feels like.
Oil also on the rise as the U.S. Gulf Coast braces for the first of two tropical storms. Almost 60 percent of the Gulf of Mexico's oil production
has been shut down as a precaution, 45 percent of natural gas production, too. Workers have been evacuated from more than 100 oil platforms.
All right, returning to one of our top stories today and how effective is convalescent plasma treatment for COVID-19? President Trump and other
officials say it could improve the survival rate of patients by some 35 percent.
Now, that number appears to have come from a study by the Mayo Clinic, but the way it was conducted is not how doctors normally measure the benefits
of a treatment because it wasn't a randomized placebo controlled clinical trial.
From the Mayo Clinic itself, we can speaks to Dr. William Morice, who is President of the Mayo Medical Laboratories and he is going to help us
understand the science here. Bill, great to have you on the show, as always. We do like to challenge you early in the morning.
I know you've done the biggest study and you've poured over -- what -- 70,000 patients who have been treated via this method, but the lack of
randomized study is a challenge here. What were your findings?
DR. WILLIAM MORICE, PRESIDENT, MAYO MEDICAL LABORATORIES: Well, first of all, Julia, great to join you again. As always, a really great opportunity
to be with you.
I think it's really important to go back to five months ago when we started the expanded access program for convalescent plasma therapy for COVID
patients. We know from the history of medicine, really, going back to the use of anti-toxins to treat diphtheria patients at the turn of the century
that this can be an effective for the treatment of infectious diseases where you take the plasma from one individual that has recovered from the
disease and give it to another who is sick with the disease.
So, five months ago, what we wanted to do with others was to make that therapy available to COVID patients really designed to prove that it was
safe, not designed really to prove efficacy through a randomized clinical trial or controlled trial as you referenced.
So that was the study design. It certainly accomplished those aims and more. Really, we were anticipating 5,000 or so patients being transfused
and treated. And now, as you mentioned, over 70,000 have been treated. And we know from the data that the treatment is safe.
It's more challenging to prove that the treatment is actually effective or efficacious. And so that's what has taken a little bit longer. But it's
really because of the way the study was designed and it was designed with the urgency of the pandemic in mind.
CHATTERLEY: And this is a crucial point, because whether it's a vaccine or a treatment, everybody wants to firstly save lives. The President also
clearly wants to look like action is being taken and benefits are being had by those impacted here.
I'm going to put you on the spot here and say, was this announcement in your mind politicized?
MORICE: Well, I think it's confusing to people because the medical community as a whole is really trying to rise to the challenge of the
pandemic, which has overwhelmed the globe. So here, I think what we wanted to do was strike a note of caution before we said that the therapy had
effect on patients. We knew it was safe and effective for patients.
And so that took longer, but while we are confident and the F.D.A. is confident that they can issue EUA, because when we look back at those
70,000 patients, we can see there is a positive effect of the treatment.
[09:25:23]
MORICE: Of course, this announcement comes in the backdrop of election season and what has become more and more of a charged topic in general for
society, for all the other effects of economic shutdown and social distancing and all those impacts those are having on our lives.
So it does come in a very charged background, but I don't know -- the decision itself was founded in science.
CHATTERLEY: You believe it was?
MORICE: Yes, I do.
CHATTERLEY: Okay, so maybe the best thing to do here is for the F.D.A. just to publish the data and say, look, this is what we based our decision on to
try and cut through some of the noise and the fears here in the selective use of pieces of data. Perhaps that will be the answer.
MORICE: Yes, well, I think that it is -- the answer really is in good transparency from all of the decision makers and how the data is being
used, and that is not to criticize, per se.
The other facet of this, to your point, is that -- all of these decision are of great economic and societal importance, and so they're really in the
crucible of public scrutiny and so that's something that just the medical community, as well as the healthcare community and the global community is
really not used to.
So I think that does lead to some confusion, but we'll work through that. I mean, that's really why it's important now that this has received the UEA
that we help people understand why the process took as long as it did and what is the information behind it.
CHATTERLEY: Yes. Absolutely. I also want to ask you something else as well about testing. The recent ruling by the U.S. Health Department on tests not
needing to go to the F.D.A., to the regulators first.
Again, there seems to be a conflict between the Health Department and the F.D.A. that the regulator here, which again goes to the point that we're
discussing here, which people aren't all on the same page and we need them on the same page in order to foster trust, whether it's a treatment or an
approach to tackling this virus.
MORICE: Well, at Mayo Clinic Labs, like many and all labs really, we are committed to providing patients the diagnostic testing that they need and
we really appreciate clarity of guidance from the government and how they want us to approach doing that.
Clearly, the ability of laboratories to create tests for patient needs is an important facet of how we provide care. We appreciate the H.H.S. really
recognizing that. But we'll continue to work at Mayo Clinic Labs and the lab community will continue to work with regulators to gain that clarity
here going forward.
CHATTERLEY: Okay, but to sum up our conversation, because I do think it's really important that we've had this conversation at this moment, the Mayo
Clinic believes that using convalescent plasma is safe, but the studies that you've done does not prove efficacy, but it's a safety thing we can be
talking about here.
MORICE: Well, it is safe, and actually I do think that the data now analyzed does show a positive effect for patients as well. So we know it is
efficacious as well.
It's taken longer to make that observation just because of the way the study was designed. The other challenge with this, Julia, is that the study
was designed to give the patients who needed the therapy the therapy. Many of the hospitals giving that therapy were overwhelmed with patients.
So therefore, it took longer to get the information back in terms of how those patients have responded. So, it's really not even just the design,
it's just the fact that the entire country was trying to manage the pandemic and those giving the therapies were in the cross hairs or in the
crucible of the pandemic in managing patients.
So it's just taken a bit longer, but there is efficacy as well.
CHATTERLEY: Okay, it is so important to chat with you. Thank you so much, because you had very short notice on this interview, so great to have you
with us, as always, and get your wisdom. Dr. Bill Morice there from the Mayo Clinic. Thank you.
MORICE: Thank you.
CHATTERLEY: All right, the opening bell, next.
(COMMERCIAL BREAK)
[09:32:24]
CHATTERLEY: Welcome back to FIRST MOVE. The U.S. stocks kicking off the new week with fresh gains. Stocks rallying across the board with the S&P and
the NASDAQ both at all-time highs.
Important to note here that as we watch stocks continuing to rise, U.S. Treasury yields have not been moving much higher, which you should expect
in healthy markets. That is a sign, I think, that bond investors are perhaps not as enthusiastic about the economic rebound as stock investors
are reacting less well to stimulus, let's be clear.
Record low long-term yields of course have helped fuel a strong recovery in the housing market, too. Cheap mortgage rates.
That said, CNN's new back-to-normal index shows the U.S. economy operating at only 78 percent of its full capacity as of August 19th. The states
colored darker green are in a better state on an economic basis than other parts of the country.
Now, the sun may be setting on the peak holiday season here in the United States, but it's not been a summer that most hotel owners will remember
fondly.
The American Hotel and Lodging Association says occupancy near outdoor vacation spots is around 50 percent compared with normal levels at this
time of year, which would be around 90 percent.
They say the situation in cities is worse with little recovery in sight. As bills come due and bookings remain weak, many hoteliers are at risk of
defaulting on their debts. The financial analyst, Trepp say repayment worries in in the sector were at an all-time high last month. Nearly one in
four borrowers were at least a month late with payments. Industry leaders are calling on Congress to provide urgent help.
The CEO of the American Hotel and Lodging Association, Chip Rogers joins us on the show. Chip, always great to have you with us. That's just painted a
picture of an ongoing and incredibly challenging environment.
CHIP ROGERS, CEO, AMERICAN HOTEL AND LODGING ASSOCIATION: Yes, it is a bleak picture, indeed. We do hope that since everyone is now beginning to
work remotely that in fact, we can maybe extend summer another month. The weather should be good. But even with that, we're facing significant
headwinds here.
And as you pointed out, this debt problem is the largest of all because if you can't make your payments, ultimately you lose your business and
everybody that works for you no longer has a job.
CHATTERLEY: I want to go to the silver linings a bit first, actually, and then we'll talk about the debt situation which clearly is incredibly
worrying.
Given that people are embarking on staycations or tending to stay within states and traveling less due to many of the state-by-state restrictions,
to your point could we actually see people perhaps extending their vacations or staying longer or pushing that out back towards the end of the
year as well? Might that provide some respite?
[09:35:10]
ROGERS: It will provide a little. In fact, we're already seeing some of those trends, and we are beginning to see people stay on Sunday nights into
Monday, a lot more than we used to, because they don't have to necessarily get back to the office on Monday.
We're beginning to see people show up for their weekend vacations on Thursday as opposed to Friday. So some of that is helping.
This idea, of course, that you can work from anywhere is the key to that continuing on. And then, of course, children not necessarily going back to
school all across the country helps as well.
So there are some bright signs out there, but in general the big problem is no business travel, no conventions and conferences and large meetings and
that is what is really hurting the industry.
CHATTERLEY: Chip, how many workers, to your point, have the hotels managed to bring back on average?
ROGERS: Well, we brought back a healthy percentage of them, and if you look at where we were back in February, the full employment was about 900,000
job openings. And then you go to about mid-July where we probably had four million people not working, maybe of those people not working, 20 percent
to 25 percent have come back.
But the bottom line is this, as we look at our economy and you talked about the CNN Index there a minute ago, unemployment is a big part of that. We
see that our economy back in January had a 3.5 percent unemployment rate, it's now at about 10.5 percent. In the hotel industry, it's over 40 percent
and that's the big problem.
CHATTERLEY: Wow, a 40 percent unemployment rate.
ROGERS: Yes. It's shocking.
CHATTERLEY: That is completely shocking. I guess not unexpected, though. We know that you were on the front lines of hit initially and of course, going
to be one of the last to recover because people have to get their confidence back and be willing to stay away from home.
Talk to me about foreclosure risk. If we're talking about such a high proportion of hotels being unable to pay their debts, how many of these
could close permanently?
ROGERS: Well, as you mentioned a moment ago, Trepp has already indicated that we are at an all-time high with delinquency rates for commercial
mortgage backed securities, which is about a third of all the hotels that are out there. The traditional lending will soon follow.
I mean, there was some flexibility as we began this pandemic back in March and April, but banks can only offer flexibility for so long. So we're
already beginning to see some of the foreclosures. It could mount into the thousands of hotels by the end of the year, if in fact nothing is done.
And the sad thing is with the Main Street Lending Act, which has frankly not been used at all and has been a failure up to this point, the money is
there if they would simply change the rules and allow these commercial mortgage loans to get access to it. It's a sad situation because we know
the money is appropriated.
CHATTERLEY: And therein lies the key. The money is there, it's just about access. Chip, what needs to change?
ROGERS: Well, under the current rules, if you want to go get a Main Street lending loan, which is very low interest, long-term loan that can help you
survive this, you can't really have any debt.
Well, if you have a commercial mortgage, if you're in an office building or a large hotel, you're going to have debt because that's your business and
you have this large structure on a really prime piece of property.
And so, if they would change the rules like traditional lending rules that allow debt all the time on these structures, then hotels and commercial
office buildings, they could gain access to this Main Street lending. They would pay the money back. It would work out great and it would save
thousands of hotels, and possibly hundreds of thousands of jobs.
CHATTERLEY: Yes, we were talking about this on the show last week, about a potential real estate crisis or a brewing challenge for this sector in
particular, and you're pointing to one of the pivotal elements here and changes do need to be made.
Chip, have you had any response, very quickly? You're clearly saying that this is the help we need.
ROGERS: We have. In fact, we've asked Treasury again and again and again to help out. We believe they're looking at it. But even better than that,
Congress has introduced legislation, a bipartisan bill called the Hope Act that would do exactly what the commercial mortgage borrowers need right
now, this lifeline to gain access to funds just to pay their bills.
CHATTERLEY: Yes, well, we'll keep fingers crossed. Chip, great to have you on the show, as always.
ROGERS: Thank you so much.
CHATTERLEY: Chip Rogers, the CEO of the American Hotel and Lodging Association. Great to have you with us.
All right, coming up on FIRST MOVE, as the Republican National Convention kicks off, President Trump's senior adviser, Kellyanne Conway announcing
she will leave the White House, a potential impact on the Trump campaign and a preview of this week's R.N.C. straight ahead.
(COMMERCIAL BREAK)
[09:42:40]
CHATTERLEY: Welcome back to FIRST MOVE. Last week, it was the Democrats, this week it's the Republicans. We're on day one of the Republican National
Convention.
President Trump expected to make an appearance every night of the event this week. His formal acceptance speech is scheduled for Thursday.
Republican strategist and CNN political commentator, Doug Heye joins us now. Doug, fantastic to have you on the show. What can we expect from
Republicans this week and what does success look like for President Trump?
DOUG HEYE, CNN POLITICAL COMMENTATOR: Well, I think you've outlaid it already of what we can expect. We are going to expect a lot of Donald
Trump. We are going to expect a lot of his family.
I was surprised, having worked on the setup for the 2012 convention, and this was one being in my old hometown of Charlotte, North Carolina, on what
we would see from speakers and so forth. It is very heavy-laden with Trump loyalists. Now, that's not a surprise, it's true with the Democrats as
well.
But this is just doubling down on the base in every way possible, the opposite of the Democrats which tried to get really bipartisan popular
Americans to address the audience so they could reach out to new voters.
I looked at the roster from the R.N.C. this time and it was a bit like looking at the schedule for Glastonbury and realizing there's not a single
band that anybody wants to see.
CHATTERLEY: What an analogy. You've pointed out the laser-like focus on the base here, but you know, if I look at the need to break through with things
like college-educated women, for example, he's got to make the party himself look reasonably moderate this week, surely. Is any of that possible
given tour Glastonbury style lineup?
HEYE: No, I don't think it is, and in part that's because it's just been announced this morning that there really is no Republican platform this
time. They're not really codifying any policies or ideals other than everything being Trump-centric.
So you know, you talk about college-educated women. They're not talking about real issues that are going to affect them, they're not talking about
higher education, which is a real issue right now in the country as we're dealing with remote learning in the country, it's like two view we are
struggling with.
We're not talking about the other end of education, childcare, where childcare where America is saying that there is no economic recovery if we
don't have childcare.
And you can go on a whole litany of issues where the Republican Party just don't have an organizing document on that, which traditionally they do
every four years, as do the Democrats.
[09:45:08]
CHATTERLEY: Doug, his job approval rating is under water by what -- 10 percentage points plus. It's hard to win another term surely if the
majority of people already think you're doing a bad job, unless you can paint a picture of the alternative doing a worse job than you're doing.
Can he do that for a future President Biden, for the Democratic Party? Surely, he will try.
HEYE: He'll try, but it's complicated. And it is complicated for two reasons. One, if you look at a lot of the rhetoric that's coming from the
President and his campaign right now, they're talking about violence in the streets and what it would look like under Joe Biden's America. The
challenge there is we're in Donald Trump's America and that's happening right now.
The other challenge is -- you know, which we haven't talked about is the biggest issue in the country and really the world right now with COVID.
Donald trump now under his watch, 170,000 plus deaths, an economy as you just highlighted where no one is staying in hotels, nobody is taking
flights. I haven't stayed in a hotel for six months for that matter.
And so he is not really addressing those issues, where Joe Biden can talk about tweeting last year that the United States is not ready at all for a
pandemic, the administration isn't ready for this.
So it's very hard for Trump to be able to credibly bring Biden down. Maybe the best person to bring Biden down would be Joe Biden and it's why those
three debates are going to be so much massively more important than even what we saw when it was Trump versus Clinton.
CHATTERLEY: Yes, it is such an important point, and I think the tone from the Democrats was somber and frightening and it's tough to be an optimist
if you bring it back to the pandemic, unfortunately.
I do want to talk about something on a bit of a tangent, but incredibly important and I think bewildering for an international audience, it is the
focus that we have seen on the Post Office. The importance of being able in mail in the votes in this election and the under-funding.
I was looking at some of the numbers. The Post Office lost $83 billion since 2006, which is one issue. But how concerned should we be about fraud?
Because the President argues it's a huge issue.
HEYE: Well, we shouldn't be worried about the issue of fraud. We should be worried about what's happening with the Post Office, full disclosure, I
expected a package from the Post Office yesterday and it still hasn't arrived, and in this context, I am a little nervous about it.
But I have right here, Julia, a mail that was sent to me this weekend and says, "Urgent Notice. Securely and safely request your absentee ballot." It
is from the North Carolina Republican Party.
Now, one of two things has happened with that. Either they're sending that to somebody who hasn't been registered to vote in North Carolina, me since
2004, or this was meant for my deceased father who died just after the election in 2016, and the challenge with that is not only are they
potentially asking somebody to vote who can't vote, but the last time I had dinner with my father before he passed away, he said that he was voting for
Trump, but he sure wished Joe Biden was running so that he could vote for Joe Biden.
And I bet there are a lot more independent North Carolina voters and voters in other states who feel that same way.
CHATTERLEY: Just to be clear, Doug, and we're sorry for the loss of your father, could somebody fill in that form and send it back then?
HEYE: It's possible. Honestly, I haven't opened this. But voter fraud is something that, yes, it exists, but it's been really blown up as an issue
in a way that is now an existential fear for especially Republicans, when it just doesn't really work out that way.
It is a concern, but it's always been a minor concern and I think that's where it should be with some time, some effect in local races, but
nationally has not been a real concern, frankly, since 1960.
CHATTERLEY: Wow. Always great to have you on the show. I'm just trying to think, to sum up, we've been to Glastonbury, we have talked about potential
voter fraud.
He hired, I believe, people that he worked with on "The Apprentice" to produce the R.N.C. this week. So more reality show, I guess is what we have
to look ahead to.
Is he frozen? Can you hear me? I don't know. Doug, great to have you with us.
HEYE: I agree with you.
CHATTERLEY: He was waiting for the punchline. It wasn't coming. Doug Heye, great to have you with us, Republican strategist and CNN political
commentator.
HEYE: Thank you.
CHATTERLEY: Thank you for that.
All right, the U.S. Postmaster General back in the hot seat on Capitol Hill, as we were discussing, this time testifying before a Democratic-led
House Committee where he is likely to face a much different reception.
We'll have a live report straight ahead.
(COMMERCIAL BREAK)
[19:51:38]
CHATTERLEY: Welcome back to the show. U.S. Democrats want to know why the Postmaster General isn't reversing changes he made at the Postal Service
that they say could sabotage the presidential election.
In around an hour, Louis DeJoy will testify before a Democratic-led House panel. He is expected to face questions on widespread mail delays that have
been reported since he took over in June.
On Friday, DeJoy assured a Republican-led committee that mail-in ballots will be counted in time for the election. A day later, House Democrats held
a rare session to approve legislation that would suspend the changes DeJoy has put in place and provide the Post Office with a $25 billion boost.
CNN's Kristen Holmes joins us now from Washington. Kristen, great to have you with us. The tone likely to be very different today. What can we
expect?
KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT: Well, that's right, Julia. First of all, I just want to note quickly on the $25 billion for USPS that
was voted on by the House. That is likely to not go anywhere.
The White House has already issued a veto threat and the Senate is not expected to take it up, and the reason why that is interesting is because
it was not a partisan bill. There were dozens of Republicans who signed on for that.
And right now, given the current climate, that's actually pretty bipartisan for Washington. So something to note there as they continue to hash out
this funding for the Postal Service.
But as you said, it is expected to be a completely different vibe today. We are talking about a Democratic-led House Committee. It is expected to be a
more hostile reception. And remember, it was just last week that 90 of these House Democrats were actually calling for the removal of DeJoy as
Postmaster General.
And you started to outline this, what exactly it is that House Democrats want to know about. They want to know about those changes in detail. How
exactly did DeJoy arrive at them, cutting overtime, cutting Post Office hours, and the removal of those high-volume sorting machines?
They want to know why they're not all being reversed. Of course, we know DeJoy had suspended those changes ahead of the election, but he also said
in Friday's testimony that any of these machines that have been unplugged or disconnected would not be reconnected because it's not needed.
So Democrats are going to have questions about that, particularly as we head into this election where millions of Americans, many of them for the
first time, are expected to vote by mail.
The other big topic is Secretary of Treasury Steve Mnuchin. CNN has reported that the Board of Governors actually briefed Mnuchin before the
appointment of DeJoy and we are told by sources this is not a normal procedure.
We also heard from a former Board of Governors member who resigned because of Mnuchin's involvement. He was worried that the Trump administration was
trying to politicize the Postal Service. So that is likely to come up today.
And Julia, we should note that the Postmaster General has said time and time again that the Postal Service is absolutely ready for this influx of
mail-in ballots come November.
But when they talk about the numbers, when they walk through them, they try to reassure the American public, they say things like -- and this is a
tweet from the Postal Service, that if all Americans vote by mail this year, 330 million ballots over the course of the election will be only 75
percent of what we deliver in a single day.
But Julia, as we noted, we're here because what they're delivering in a single day has been extremely delayed.
[09:55:06]
CHATTERLEY: Yes, extremely delayed, understatement, I think. Kristen Holmes, it's going to be an interesting morning. Thank you so much for
that.
Now, 2020 has given us things that will be forever defined by this year, the pandemic, murder hornets -- remember those -- and yes, even mystery
cubes found in the English City of Coventry.
Well now, we have something new. Watch it if you can bear it.
This was during a baseball game between the Arizona Diamondbacks and the Oakland A's, and even though the shot was unintentional, oh, the poor bear.
It feels like something very cruel after everything this year.
Giant cutouts or stuffed toys are sometimes used at big events to make the seats look full. No word yet on how the bear is doing, but we do know they
are the strong and silent type. I think the bear is fine, but, ouch.
All right, that's it for the show. You've been watching FIRST MOVE. I'm Julia Chatterley. Stay safe. We'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
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