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First Move with Julia Chatterley
The U.K. is set to Vaccinate Frontline Workers this Week; A $900 Billion U.S. Aid Package in the Works; The First Ever Winner of "Time" Kid of the Year. Aired 9-10a ET
Aired December 07, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:12]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE, and here is your need to know.
Dose delivery. The U.K. is set to vaccinate frontline workers this week.
Bailout breakthrough. A $900 billion U.S. aid package in the works.
And time to shine. The first ever winner of "Time" Kid of the Year joins FIRST MOVE. It's Monday. Let's make a move.
Welcome once again to FIRST MOVE. Great to have you with us as we await a new week of medicinal milestones in the COVID-19 fight, and hopefully some
fiscal fireworks out of Washington, D.C., too.
Let me walk you through this. The first doses of the Pfizer-BioNTech vaccine arrived in the U.K. over the weekend with vaccinations set to begin
tomorrow. Meanwhile, U.S. health officials hold a hearing on that vaccine on Thursday this week and are expected to approve the jab soon after.
Also, in the United States, lawmakers rushing to complete work on a $900 billion stimulus package task, made all the more urgent of course by
Friday's weaker than expected Jobs Report. So we'll be keeping an eye and we have all the details on that, too.
It's clearly a week of great expectations; though, for investors, I think the good news and those expectations have been expected for a while now.
Global stocks are softer, some consolidation after last week's gains, all three U.S. majors closing at record highs on Friday. That has happened for
the first time in over two years.
Sentiment in Asia, meanwhile, dented on Monday following reports that the White House could announce sanctions on Beijing officials tied to the Hong
Kong crackdown. China meanwhile, posting a blockbuster 21 percent rise in exports last month, the biggest rise in almost three years driven in part
by an almost 40 percent spike in demand for medical equipment. The Chinese trade surplus with the United States hitting new record highs.
The incoming Biden administration can add that to a long list of challenges. For now though, of course, nothing more urgent than the COVID
crisis.
Let's get to the drivers. We begin with a global vaccine ventures. The U.K. bracing for its shot at a COVID-free future. The Pfizer and BioNTech COVID
vaccine arriving across Britain as the country gets ready to administer its first precious doses tomorrow.
Cyril Vanier joins us now from Downing Street. It feels like a major turning point, Cyril, in the fight against COVID-19. But of course, for all
nations around the world that are dealing with this. It's also the test case for the distribution and the logistical challenges of handling this
specific vaccine. What are we hearing from the government?
CYRIL VANIER, CNN CORRESPONDENT: Look, Julia, you're absolutely right. This is arguably the closest thing we have to a silver bullet against this
pandemic. And here in the U.K., the deployment starts tomorrow.
The vaccine was approved less than a week ago, so that gives you a sense of how fast the logistics have had to be organized and handled. The first
doses arrived in the country on Thursday. They were checked for their quality to makes sure the integrity of the vaccine wasn't compromised.
And then they were dispatched out to some 50 hospitals which will act as vaccination centers here in England. They're also being sent, of course, to
Scotland, Northern Ireland, and Wales where hospitals will also be acting as vaccination hubs.
Now, the priority patients here in England were supposed to be care home residents, that's not going to happen quite as planned just due to the
logistical difficulties of carrying and taking the vaccine to the care homes.
Remember, we're talking about the Pfizer-BioNTech vaccine here and as you well know, Julia, this is the one that needs to be kept at minus 70 degrees
Celsius, huge logistical challenges.
So as a result, the hospitals here in England will first and foremost vaccinate people 80-year-olds and above who are already in hospital either
outpatients or inpatients. Then, they will start inviting care home workers and at risk members of the public, elderly members of the public across
communities in England and across the U.K. That is all starting tomorrow. First jabs being delivered tomorrow.
That doesn't mean that tomorrow night you will see people already immunized against the coronavirus because let's remind our viewers here, this one
takes two jabs. 21 days apart, so the very first days when you will start to see some people immunized against the virus here in the U.K., the last
days of 2020 -- Julia.
[09:05:03]
CHATTERLEY: Yes, it's fantastic. And we wait and watch, and as you point out, keeping that vaccine colder than Mars, quite frankly is a challenge
for all and the U.K. is that getting their first. Cyril Vanier, great to have you with us at Downing Street there.
All right, meanwhile, the first shipment of a COVID-19 vaccine made in China arrived in Indonesia on Sunday. The President broke the news in a
televised address.
(BEGIN VIDEO CLIP)
JOKO WIDODO, INDONESIAN PRESIDENT (through translator): I'd like to convey good news. Today, we have received 1.2 million doses of COVID-19 vaccine.
This vaccine made by Sinovac that we have been testing since last August.
We have been preparing for months through simulations in several provinces, and I am sure that once it is decided that we can begin the vaccination,
everything will be ready.
(END VIDEO CLIP)
CHATTERLEY: David Culver joins us now. David, last week, you were giving us an inside look at China's preparations for getting these vaccines to
other nations and quite fascinating to hear the President there saying, look, we've been planning this, how we distribute this for months.
DAVID CULVER, CNN CORRESPONDENT: It's a huge logistic and coordination effort that's underway right now. What's interesting compared to what you
saw in the U.K. with Cyril describing kind of the distribution there, here, it's not about domestic distribution, Julia, it's about global
distribution. That's where China's focus has been.
Now, that's not all rooted in goodwill, we've got to stress that. These companies like Sinovac, the one behind this vaccine that's going to
Indonesia right now, they stand to make some money from this. And then of course, there's the PR side of it for China.
I mean, they look at this in many ways as an opportunity to repair their image following, you know, what many has perceived to have been a negative
and mishandling of the initial outbreak. So this is perhaps an opportunity to show that they can redeem themselves, if you will, by providing the
vaccine that will help many countries, including Indonesia.
As you heard the Indonesian President point out there, they have been going through the clinical trials here. They've actually been doing the Phase 3
trials within Indonesia, as well as thousands of volunteers within Brazil as well.
So these are countries that are used to this vaccine, Sinovac, in particular, it is a Beijing based company. I actually toward them a few
months ago here and met with some of their representatives to get an idea as to how they were able to go forward with this effort.
What's also interesting is that this is requiring a lot of infrastructure construction here in Beijing. They actually have to come up with an entire
new facility to provide the COVID-19 vaccine, because the government regulation requires that they provide a separate space to produce this
vaccine.
So they have that already constructed. They're obviously producing it, 1.2 million doses, as you heard the President say, already arriving in
Indonesia, in good form, good condition, as they say, because it had to have been transported through this, another infrastructure build up, this
climate controlled way of getting it from Point A to Point B, and that's everywhere in between, it's got to maintain a certain temperature. And then
they are expecting another 1.8 million doses into the New Year.
Now their focus is going to be, Julia, as we've heard many countries say their focus will be frontline workers. You're talking about the medical
personnel, perhaps those who work in Customs, those who have a lot of interaction with people. That's the plan.
What's interesting also to point out, it's not been approved yet here in China. Sinovac is not a go ahead with giving its distribution to the people
of China as of yet. And you heard the President there in Indonesia also pointing out that as soon as they get the go ahead there, they'll go
forward with it.
So we'll see where that approval process falls in the coming days and weeks, and as of now, China has not yet approved any vaccine to be
distributed here within the People's Republic.
CHATTERLEY: Yes, it's fascinating, isn't it? David, you raise some great points, how to gain friends and influence people? There are incentives here
to provide vaccines to the rest of the world for many reasons here for China beyond the obvious, the trade and perhaps some degree of credibility
or concern that people look at China in the beginning of this virus and ultimately where it came from.
David, great analysis. As always, thank you. David Culver there.
All right, over to Europe now. Some countries prepare to relax coronavirus restrictions for Christmas; others are introducing new ones to curb the
pandemic.
Denmark has announced a partial lockdown for more than a third of its counties. Starting Wednesday, bars, restaurants and many other venues will
have to close until the third of January. Most school students will stay at home.
In Greece, they are extending most of their restrictions through Christmas. Schools, entertainment venues and courts will be shut until January 7th and
people in the German state of Bavaria are being told to stay in their homes unless there's a good reason to go out. That applies until January the 5th.
The situation especially worrying here in the United States. As you can see, the number of new cases is proportionately much higher than in Europe,
not to mention in Asia. The trend is not positive either.
Now of course, this is also dictated by the degree of testing that takes place. But that chart pretty illustrative. Stephanie Elam has the latest.
[09:10:08]
(BEGIN VIDEOTAPE)
STEPHANIE ELAM, CNN CORRESPONDENT (voice over): The alarming surge in new coronavirus cases has medical experts more concerned than ever.
SCOTT GOTTLIEB, FORMER F.D.A. COMMISSIONER: We're not likely to see a peak in the number of infections until about the end of December, maybe into
January. So as bad as things are right now, they're going to get a lot worse.
ELAM (voice over): The United States has added more than 1.2 million new coronavirus cases in the first six days of December alone.
DR. DEBORAH BIRX, WHITE HOUSE CORONAVIRUS TASK FORCE MEMBER: The gatherings that we saw on Thanksgiving will lead to a surge. It will happen
this week and next week. And we cannot go into the holiday season, Christmas, Hanukkah, Kwanzaa with the same kind of attitude.
ELAM (voice over): Hospitalizations continue to rise. More than 101,000 Americans are hospitalized with the virus nationwide.
DR. ASHISH JHA, DEAN, BROWN UNIVERSITY SCHOOL OF PUBLIC HEALTH: Hospitals are getting full. And it's just hard to find spaces for people. So that's
actually another crisis situation. I'm very worried about what's going to happen over the next three to six weeks.
ELAM (voice over): This morning, some 33 million people in California are under new stay-at-home orders, as ICUs in parts of the state are rapidly
filling up.
On Sunday, California's Department of Public Health reporting more than 30,000 cases, a new daily record. The new restrictions order bars, hair
salons, museums, and movie theaters to close. But retail stores are allowed to remain open at 20 percent capacity. Restaurants are limited to takeout
and delivery services only.
Some restaurant owners pushing back on the new regulations. One restaurant owner frustrated that her outdoor dining patio has been forced to shut
down, even though she says a video production company set up an outdoor eating area for its employees right next to her own parking lot.
ANGELA MARSDEN, OWNER, PINEAPPLE HILL SALOON AND GRILL: Tell me that this is dangerous, but right next to me, as a slap in my face, that's safe.
ELAM (voice over): This week, the Food and Drug Administration will meet to discuss authorizing emergency use for Pfizer's vaccine.
President-elect Joe Biden saying Friday his team had seen no detailed plan from the Trump administration to deliver a vaccine to Americans. But the
Trump administration is assuring the public they are ready.
ALEX AZAR, HEALTH AND HUMAN SERVICES SECRETARY: We have comprehensive plans from the C.D.C., working with 64 public health jurisdictions across
the country, as our governors have laid out very detailed plans that we've worked with them on.
DR. MONCEF SLAOUI, CHIEF SCIENTIFIC ADVISER, OPERATION WARP SPEED: We haven't had the chance yet to sit down with the transition team and explain
in detail everything that has been planned and been done. We look forward to that happening. We actually, I think, have a meeting planned later this
week.
(END VIDEOTAPE)
CHATTERLEY: Stephanie Elam reporting there. Now, the need for emergency action in Congress could not be greater as the COVID crisis deepens.
Across the United States, the new stay-at-home orders adding fresh urgency to a $900 billion aid package gaining support on Capitol Hill.
John Harwood is live at the White House for us. John, great to have you with us. One of the key architects of this compromise bipartisan package is
Senator Mark Warner who said to our Jake Tapper over the weekend, we could get an agreement as early as today, dare we hope?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Yes, I think it's pretty clear that the momentum is powerful on behalf of this. And as Americans see
the extent of the spread, you have the combination of both the extent of this raging spread across the country, how close we are to relief from a
vaccine, and I think there's great consciousness, a rising consciousness within the Members of Congress of both party that if we can just get a
bridge from where we are now to the safety that the vaccine is going to provide us, we will be in much better condition.
You also have of course, as you know, Julia, the end of the year, people's authorization for extended unemployment, people's protection against mass
evictions which are on track if we don't get some relief, the concern that state and local governments are going to have to lay off millions of
people.
They are already down a large number of state and local government workers because their revenues cratered when the economy shut down. It is
increasingly accepted by everyone that we need something. It's not going to be as much as Democrats want, but Republicans have made an initial move and
I think Joe Biden is going to count on the fact that whatever shortcomings there are in this package now, he can get another one once he takes office
in January.
CHATTERLEY: Yes, let's just get something done to protect the millions of people, to your point, that could potentially be thrown out of their homes
as early as January.
John, also some action in Georgia over the weekend. The debate between the two candidates fighting for seats in the Senate. Of course, this is going
to determine after the runoffs in January the balance of power in Congress. President Trump also there. What are you hearing behind the scenes about
the sway here for voters and how that outcome could turn out?
[09:15:07]
HARWOOD: Well, we haven't had a whole lot of polling in those two races. There was a survey, U.S.A. poll last week that showed Raphael Warnock up on
Kelly Loeffler a few points, narrow -- a very narrow lead, but almost a dead heat race between Jon Ossoff, the Democrat and David Perdue, the
incumbent Republican.
So I think we're looking at very close finishes, and one of the questions is going to be: what is the relative turnout on both sides? Historically,
Democrats have had problems in runoff elections that occur after the principal Election Day in turning out African-American voters.
There are some signs that they are being more successful in generating enthusiasm this time around. On the Republican side, the question is, are
the attacks that the President is making on the voting process, the integrity of the voting process, going to depress Republican turnout?
He has been attacking the Republican Governor Brian Kemp, the Secretary of State Brad Raffensperger. So we don't know if that's going to happen.
The President did at his rally over the weekend, urge people to turn out and vote even while he continued to attack Brian Kemp and the Secretary of
State. So I think on balance, there's not clear evidence that either party is going to suffer a huge, unusual drop off in turnout in enthusiasm. And
so we're looking for very, very close races that are as close as you would expect with the Senate on the line as closely as the Senate is divided on
January 5th.
CHATTERLEY: Yes, everything to play for. Money pouring into the campaigns here as well. John Harwood, great to have you with us. Thank you so much
for that.
All right, still to come here on FIRST MOVE, Europe's unicorn, the CEO of Sweden shop now buy later app, Klarna, joins us to discuss the company's
bumper valuation expansion to the United States and a possible IPO.
And "Time" Magazine's first ever Kid of the Year. I'm joined by the 15- year-old scientists and inventor taking on some of the world's biggest challenges from lead in drinking water to cyber bullying. That's all to
come. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE live from New York where the Dow and the S&P looks set to pull back from record highs set on Friday. The
Dow, the S&P and the NASDAQ all rose one percent or more last week on vaccine hopes and rising expectations for fresh emergency aid.
Investors hoping that November's disappointing job gains will perhaps prod lawmakers into concerted action this week as John was discussing. The
bulls, meantime, are bracing for a fresh stampede of Wall Street unicorns.
Home rental giant, Airbnb; and food delivery service DoorDash is set to begin trading this week. Both firms are seeing strong investor demand.
This month, in fact, it could go down as the strongest December on record for U.S. IPOs. More than 100 -- and that's one of the biggest stories and
we'll bring it back to that now.
All right, more than 100,000 people are currently hospitalized with COVID- 19 for a fifth consecutive day. That's what the United States is dealing with when it comes to the pandemic right now, with vaccines still months
away for most Americans and no new stimulus agreed by the government it could be a very long and difficult winter.
Dr. Richard Besser is Director and CEO of the Robert Wood Johnson Foundation. He's also a former Acting Director of the U.S. Centers for
Disease Control and Prevention.
Dr. Besser, always great to have you on the show. Stark contrast there between the exuberance in the markets and the challenges I think that the
country is facing. And it's the rapid increase in hospitalizations and COVID cases that I think is so alarming to certainly the healthcare
community out there, if not people around America.
DR. RICHARD BESSER, DIRECTOR AND CEO, ROBERT WOOD JOHNSON FOUNDATION: Yes, I mean, Julia, the disconnect between the two is absolutely striking. It's
understandable the markets responding to the promise of vaccines, but what really concerns me is the reality of what we face right now and going
through this winter is that vaccines are not going to save the tens of thousands of lives that will be lost if people don't change their behavior,
and if Congress doesn't step up and provide resources so that people are able to make choices about what they do: staying home when they're sick,
letting people know who they've been exposed to if they have had an infection.
If people cannot deal with the threat of eviction, if they're not working - - of not putting food on the table, if they're not working, then we're going to be in real trouble this winter.
CHATTERLEY: You can't take the right behaviors if you simply have to go to work to feed your families, quite frankly, and that's the choices that
people are having to make.
Is it melodramatic to suggest that the decisions that people and what they do between now and ultimately when we see vaccines being given out more
broadly could determine whether they live long enough, quite frankly, to get that vaccine?
BESSER: Well, you know, it's a challenge because most people who get this infection will do well with it, and it's important that people recognize
that, but not everyone will.
And you may be that person who does well with this, but you're exposing an elderly relative, someone who has an underlying medical condition and they
run into trouble and get extremely ill or hospitalized or die from this.
So getting people to change their behavior to help protect their families, their loved ones and people in the communities is very, very challenging.
You don't want to over scare people in terms of what their personal risk is. But you want to motivate people to do things for the common good.
And for many people, as we were just saying there really is no choice. They have -- there's the millions of people who have to go to work to put food
on the table and to pay the rent, and we need support for them.
CHATTERLEY: Dr. Besser, we are expecting the debate to take place between regulators, of course, about the Pfizer-BioNTech vaccine this week. Do you
expect to see sign off? And how quickly do you think that could take place? Are we talking days after Thursday's meeting?
BESSER: Yes, you know, I think it will be pretty quickly. I'm going to be watching that. The F.D.A. scientists have been pouring through all of the
data from Pfizer. They're supposed to be posting their report tomorrow for everyone to see. And, you know, before I make a decision on whether I want
the vaccine or whether I'd recommend it to my family, to my 90-year-old parents, to my patients, I want to see that the scientists have been able
to independently look at that data and make a decision.
If they have and they recommend the vaccine, you know, I will recommend it to my family. I will recommend it to my patients and I will be as far up in
that line as I can be when my group is called.
So that's really, really critical because the data we're seeing around trust in the process is extremely concerning.
We could have a catastrophe in this nation where we have safe and effective vaccines that very few people want to receive.
[09:25:17]
CHATTERLEY: There is a Pew Research poll released Friday that said that less than half of African-Americans surveyed will get the vaccine or would
get the vaccine if it were available today. And obviously, this country has a dark history with African-Americans, with medicines, with the concerns
and you understand the concerns within the community, too.
Dr. Besser, to your exact point, how do we overcome these and should we already be seeing better forms of education coming from the government to
help people understand the risks of not taking this vaccine? And to try and tell people that, look, we're only going to give this vaccine authorization
when we're confident it's safe to do so.
BESSER: Yes, I mean, there has been a long history of racism in our medical community and public health with experimentation on African-
Americans. To date, there continues to be disparate treatment for African- Americans in our healthcare system.
And so overcoming these barriers to trust is critical. I mean, I think it's going to take working with trusted voices from African-American community,
from Latino community, to marginalized communities so that they can hear from trusted leaders in their own communities as to whether it's safe.
I don't think you can cajole individuals into getting this vaccine, you have to understand people's resistance, understand their concerns and
address those. And what I expect is that as this rolls out, and more and more people get this vaccine, and we are able to see the experience that
the demand for the vaccine will go up and go up dramatically.
CHATTERLEY: Yes, as people start to see others get the vaccine and feeling a little bit more confident about life, it will allow others to grow in
confidence, too.
I'm going to put you on the spot over timing here, and I know it comes down to supplies and distribution, but just based on a vaccine with a 90 to 95
percent efficacy rate. If you imagine a scenario where more people are encouraged as President-elect Biden has suggested to wear masks for the
first hundred days, how quickly do you think in combination with vaccines being given out that we start to see mortality rates coming down and a
return to some degree perhaps of normality?
BESSER: Well, I think that, you know, if the estimates on production are correct, that this spring, late spring, there should be vaccine for those
who want it. I expect that there will be more products that come available besides the two that are being considered right now and that's encouraging.
You know, our foundation, Robert Wood Johnson Foundation, our buildings are closed. They've been closed since March. And I hope that by September,
we'll be able to get people back in the building. But we won't know that until we see how these are received and whether people truly change their
behavior.
But yes, I finally see light at the end of the tunnel. And a month ago, I wouldn't have said that.
CHATTERLEY: Yes. So it is changing day by day. We'll keep our fingers crossed. Dr. Richard Besser, sir, thank you so much for joining us on the
show. As always, great to chat with you.
BESSER: Thanks much.
CHATTERLEY: Thank you. All right, the market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:31:26]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running for the first trading day of the week and we've got a mostly lower open. The
Dow and the S&P pulling back from record highs, but there are gains there in the NASDAQ as you can see.
Stimulus hopes could offer support for global stocks this week. U.S. lawmakers as we've discussed are rushing to pass a more than $900 billion
aid bill to help struggling Americans.
The European Central Bank is also expected to announce new monetary support for European nations at its policy meeting on Thursday and we stay in
Europe.
Sweden's buy now pay later shopping app, Klarna, is Europe's most valuable Fintech startup. It is worth $10 billion according to its most recent
funding round. The app allows users to buy items and pay for them later in installments.
In November, the company announced a further expansion in the United States. It's now available in over 60,000 stores here and partnering with
brands from Macy's to H&M.
And joining us now is Sebastian Siemiatkowski. He's CEO of Klarna. Sebastian, great to have you on the show with us. That's my description of
what you guys do. And I see you everywhere now when I'm not shopping online, perhaps just browsing. Talk me through the premise, what you were
trying to achieve that's happened. The growth that you've seen.
SEBASTIAN SIEMIATKOWSKI, CEO, KLARNA: Sure, yes, so I was just watching previously where you reported on COVID in the U.S., obviously, and it is a
great tragedy. Obviously, I personally -- personally, I have friends who have been affected by it.
But we've seen it, and it's actually interesting also to note that a major shift is happening at the same time. One consequence of this COVID is that
people are really shifting from credit to debit. So you've seen over $100 billion of credit card debt paid off since the start of the pandemic, and
credit card openings have gone down by 50 percent.
And so people are using debit more than ever before, and there's multiple reasons for that. But shopping with debit online is far from great. There's
a lot of, you know, downsides to it. Sometimes you need a little bit of financing, sometimes you need, you know, you may want to make a return and
the merchant hold on to your money for three weeks. That's okay on a credit card, not so great on debit card.
And so Klarna really comes in and offers that solution where you use your debit card for the most. But occasionally, you can then get the benefit of
an installment and so forth.
And also, it's of no interest to the consumer. So it's interest free for the consumers. It's great upside compared to traditional credit card where
you revolve and you pay interest and so forth.
So, I think like this has really propelled Klarna in the U.S. and that's why we've seen now, you know, getting close to 11 million users in the U.S.
We've seen over a million users actually added in the last four or five weeks, it's been quite, quite amazing to see how the adoption is going
right now in the U.S.
CHATTERLEY: Fantastic. So, I can certainly see the benefits of spreading the payments. If you buy something, you receive it, you decide not to keep
it; you give it back and then you haven't given all the money up front and have to wait for the seller of the goods to give you the money back in
their own timing.
But who takes on the risk if the person who has bought something keeps it and then doesn't make the payments?
SIEMIATKOWSKI: Yes, so what a lot of people don't know is we are actually a fully regulated bank since a couple of years ago. So I was part of co-
founding this 15 years ago and now, since a couple of years, we're a bank in Europe, obviously in the U.S., it is a slightly different setup.
But as a consequence of that, we do take the full credit risk, the fraud risk of the transactions, so it's not the merchant, but the merchant does
pay some -- you know, it does cost to the merchant a little bit offer Klarna as a service, but they obviously see a lift and people feeling more
comfortable to making that purchase, people potentially being able to spend slightly more and these things then come back in successful merchants.
So those are -- and actually, more and more also send new customers to the merchants, like I think in the last -- in this year alone, we'll be sending
multiple hundreds of millions of leads of customers to merchants as well, because customers are actively looking forward to use Klarna. So, that's
kind of how the model works.
[09:35:21]
CHATTERLEY: I mean, the growth, and we've talked about this already, but it's such a hugely popular app. I mean, in September, I believe it was the
most downloaded retail app in the United States, a sixth of the U.K. is using it. You've got 10 million people using the app, just to give you a
sense.
What are you seeing in terms of potential default rates or late payments? Because as you said, you're the ones managing the risk here, at least as
far as Europe is concerned. What are you seeing?
SIEMIATKOWSKI: Yes, no, but we are very conservative underwriters as well. So we -- obviously, it's a little bit different because we're not giving
people a big limit. When you sign up for a credit card, you get a big limit and go out and spend it.
In our case, you actually, you know, you make a single purchase for $100.00. You showcase that you can -- that you can take that responsibly,
and then as you kind of continue using the service, you might be eligible for buying slightly more and more.
So it's kind of a joint partnership between us and the customer that we get to know each other and learn of each other of how you can use the service.
And obviously, if you don't pay on time, then we won't be able to allow you to make additional purchases.
So it's actually a slightly different model than kind of the traditional bank going and saying, here's a credit limit for $10,000.00. Let's see how
you can cope with it.
So we're being quite conservative, but it works really well. And we've overall, I mean, on our total volume, we processed probably this year, you
know, $50 billion to $60 billion of volume, and we see less than one percent in total of default rates on that full volume, which is much lower
than you usually see in credit cards or other type of similar lending products.
So it works really, really well in that way. But also, I would say that COVID, to some degree, I mean, people would tend to forget about that.
Obviously, it has had a negative impact for some people's economy for the unfortunate ones that has been affected by layoffs or loss of business.
But for the big majority still, people's balance sheets are stronger than ever. They're paying down debt there. They have reduced their consumption
dramatically. And they have put more money in their savings accounts.
So, also, still, we don't know obviously how things will play out going forward. But so far, actually a lot of people who also their balance sheet
that are stronger.
CHATTERLEY: Yes. We've certainly seen that in the United States with saving rates spiking in particular, too.
I mean, I mentioned in the introduction, $10 billion valuation. It's a relatively simple concept. But clearly, as you say, it's rigorously managed
in terms of what people can spend.
I note that these are who you would assume would be a competitor as an investor. But what's to stop someone like PayPal, offering the same kind of
facility to people and really bringing the competition home to you?
SIEMIATKOWSKI: Yes, well, I think partially, they already are in some markets. But we've been competing desperately with PayPal in the Nordics,
and in the German-speaking countries, and then more recently, in the U.K., where our share of checkout in all of these markets is higher than PayPal's
with the merchants that we work with.
So people tend to -- the kind of ability to pay in installments or to try before you buy, that's often how people discover about Klarna. But once
they start using it, they realize, you know what, when I see my purchase history with Klarna, I don't only see merchant name and amount, I see the
actual images of the items that I bought.
I have the full digital receipt. I have the ability to track my shipping. I have the ability to have an easier return process and access to customer
service. So as people -- those are usually how people discover us, but once they start using us, they see that the difference is versus somebody like
PayPal are far, far beyond just the concept of paying on installments.
CHATTERLEY: Yes, the data here and tracking your own spending and being able to track your purchases actually is phenomenal.
Okay, talk to me about timing to profitability here because you are ramping up spending and losses because you're in sort of a growth phase. And then
you can tie that to timing perhaps on a potential future IPO. Sebastian, what can you tell me?
SIEMIATKOWSKI: Well, I can tell you that, you know, we've been -- actually Klarna is a little bit different than the typical tech startup because we
were -- we raised $60,000.00 from our business angel, and we spent half of it before we became a profitable company in the first year. So it was a
little bit different than like most companies you see today.
But for the first 14 years of our existence, we were a profitable company, and now in the last year, we obviously, because we ramped our investments
so much in the U.S. and in Europe. We are -- you know, we are loss making currently, but we feel very comfortable that overall, I mean, the business
model has been proven for multiple years.
And you know, as kind of now the growth rate has really, really grown. I mean, we're looking at the U.S. growing at 450 to 500 percent, right? I
mean, we did as many transactions on Black Friday as we did the first four years of the company's existence, so I think we are going to recoup that
and then I feel very comfortable that, you know, we're going to look at a fairly exciting time for the company.
[09:40:11]
SIEMIATKOWSKI: Whether we IPO or not, I think, yes, that's definitely something I'm sure it's going to happen sometime, but at the same time, we
are a little bit nervous about it, because we are a long-term company. We believe in the long term, and we want to make sure to not get too stuck on
focusing on quarterly results. So we'll see how things play out.
CHATTERLEY: Yes, I was still just caught on the statistic that you gave me about the same number of transactions on Black Friday as the first four
years of being in business. That's some growth.
Sebastian, keep in touch. We will track your progress. Fascinating times. Thank you so much for joining us today. The CEO of Klarna there, thank you.
All right, coming up on FIRST MOVE, the next generation of genius. "Time's" First ever Kid of the Year talks tackling global issues with innovation.
Stay with us.
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CHATTERLEY: Welcome back to FIRST MOVE. Our next guest is a scientist and an inventor who's just graced the cover of "Time." If this makes you feel
like a bit of an underachiever, well, brace yourself. She's also just 15 years old.
Gitanjali Rao is 'Time's" first ever Kid of the Year, so far the Colorado student has created a mobile device to detect lead in drinking water, used
artificial intelligence to combat cyber bullying, and she is also making tech to address America's opioid addiction. And I'm very excited to say
that she joins us now.
Gitanjali, fantastic to have you on the show. I am terrified, inspired and just overwhelmed by how amazing you are. How does this moment feel?
GITANJALI RAO, FIRST "TIME'S" KID OF THE YEAR: Well, first of all, thank you so much for having me today. And I'm so beyond like humbled, honored
and excited to just have this opportunity to be featured on the cover of "Time" among so many other fantastic people, but along with that, also be
one of the amazing finalists for Kid of the Year who are doing such fantastic things for our world.
[09:45:11]
CHATTERLEY: Yes, I mean, the shortlist here was phenomenal. But I just want to explain to our audience some of the things that you are working on.
A mobile device that can detect lead in drinking water. A certain part of America are being poisoned by lead in the water and you decided, look, I
want to create something to help. Just explain what you did.
RAO: Yes, so I heard about the water crisis in Flint, Michigan, about four years ago, and it was just unacceptable to me to see how many students my
age were basically drinking poison every day. And that's so unfair, because water is supposed to be a basic right that everyone has.
So in real life, I wanted to tackle this problem knowing that I wanted to find a way to detect lead in drinking water, because the lack of knowledge
of contamination was where the bigger end of the problem was.
So I created a Tethys, which is a device to detect lead in drinking water faster and more inexpensive than the current tools out there. And it's
based on carbon nanotube sensor technology, and it sends all the data over to your mobile phone on an app that I created.
CHATTERLEY: I mean, this is just phenomenal. It was produced, it is now being used. And just to remind our viewers, you saw this four years ago,
and you were inspired to try and help when you were 11 years old.
I mean, you know, just to remind people that, you know, you're an innovator, you're not only trying to solve global health problems like
this, but you're also trying to inspire others, other young people to do more to try and answer some of these questions, too. Just explain this,
because this is also critical to, I think, who you are.
RAO: Oh, a big part of what I've been doing is global outreach and that is through workshops and innovation sessions that I run. I have actually
inspired about 33,800 students to date, and I've also run workshops for parents and educators.
So I run these workshops in which everyone comes up with an idea and a process that they can adapt and take their ideas to the next step. Because
there are people who want to be innovators, there are youth who want to be innovators, they just don't know where to start, and then helping to light
that fire so that they can have it continue to burn.
CHATTERLEY: Who inspires you? Where did this come from?
RAO: Yes, I have a lot of inspirations. And that's from when I was quite literally born to now. My biggest inspirations, obviously, my parents for
being such important parts of my journey every single day. Obviously, my family all around, everywhere around the world.
Apart from that, the one person who actually got me into science was Marie Curie, because I didn't know females and girls could do science, but I
heard about her in second grade, and I realized, oh, maybe I can do that, too.
And recently, I love the work of a lot of new female scientists, for example, Charpentier and Doudna who recently won the Nobel Prize for their
latest groundbreaking CRISPR technology, which I actually use in my work.
And then apart from that, the mentors who have supported me every single step of the way, and who have believed in me and my ideas.
CHATTERLEY: You're phenomenal. I mean, what a great role model for women going into STEM subjects, but all quite frankly, people being excited about
innovation in what science can do in the future.
You know, I always say, I still don't know what I want to be when I grow up. And you have a bit more time than me, quite frankly. And I was watching
the video that you recorded for time. And you were talking about at least in the short term, going to Madagascar, but also bringing dinosaurs back to
life. Now, I believe if anyone can do that, you can. Talk me through this.
RAO: Yes, I love dinosaurs. I watched the whole "Jurassic Park" franchise at least six times. And the dinosaurs are one of my favorite things in the
world. And I will -- I will work on bringing them back to life at one point. Hopefully, they will come out better than in the movies though. That
was kind of at the age of like six when I watched it.
CHATTERLEY: Oh my goodness, she watched them at six. I can't tell you what age I was when I watched them and I was kind of terrified. So you promise
to have a better ending than "Jurassic Park" if you do attempt to bring dinosaurs back.
RAO: Well, I hope so. That's so scary. I can never -- I feel like I could work on getting them back to life, but then someone would have to tag team
with me on like, actually, like containing them.
CHATTERLEY: Thank you very much for that. Just going to reassure our viewers that we aren't going to have some "Jurassic Park" style crisis to
deal with next because I don't put it past you to do it very quickly.
And just final comment for young people that are watching this that are probably a bit intimidated, but also inspired and as part of your outreach,
what's your advice to them just first steps if you want to make a change, if you see a problem, how do you even begin the process of making a
difference?
[09:50:07]
RAO: Yes, I'm a kid just like you guys. I'm just a kid doing what she loves. And I think that that's so important to say because everything that
I'm doing right now, everything that I'm doing started out as a dream, started out as something I wanted to do, something I was -- like my ideal
case, and here I am.
Because first I dream big and bend them back to reality. And for all the students and youth watching out there who want to follow their passions, go
do it because there's no one stopping you, but yourself.
CHATTERLEY: I'll tell you what, there is no dream big enough for you, quite frankly. You are completely amazing. Congratulations. And I think
your parents must be bursting with pride, quite frankly, today and always.
Gitanjali, great to have you on. Thank you so much. And congratulations again. Gitanjali Rao there, "Time," first ever Kid of the Year.
All right. Coming up after this, into the endgame. The clock is ticking on trade talks as the U.K. and the E.U. try to iron out their differences. Can
they do it? The latest, next.
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CHATTERLEY: Down to the wire with just 24 days until the end of the Brexit transition period. The U.K. and the E.U. have still not agreed a deal on
their future relationship.
Our international diplomatic editor, Nic Robertson, has been following the latest talks for us and he joins us from London.
Nic, these negotiations always go down to the wire. Final minutes to midnight. Where are we Nic? Any sign of a breakthrough?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: No, we don't seem to be in that position. We heard from Michel Barnier, the E.U.'s chief
negotiator earlier this morning or at least we heard from people he talked to who was briefing the E.U. Ambassadors very early this morning, before he
went into a round of negotiations with David Frost, the British negotiator.
And there seem to be generally perceived as a downbeat assessment. The assessment is, as you know, it's up to the U.K. now according to an E.U.
diplomat familiar with what Barnier had to say. It's up to the U.K. now to choose between a positive outcome or no deal.
You know, you can certainly look at this and see that Barnier's statement this morning in his briefing of the ambassadors early in the day before the
negotiations began was really in a way of getting a narrative out there that will put pressure on the British side to concede, to understand that
the time is running out.
The British side understand time is running out as well. They perceive that the E.U. still has to make the moves.
The next update we will get will be in the next couple of hours because Boris Johnson is due to speak with the European Commission President Ursula
von der Leyen and it is just over an hour's time when they spoke two days ago. They spoke for about an hour. They told their negotiators to get back
to negotiating, but it does seem as if those key political decisions on fisheries, on level playing field and on the rules or regulations that
would govern any trade deal, the clock really is ticking on making a political decision.
And the emphasis as we hear at the moment is, so much pressure is being put on the British side. We can imagine they're trying to do the same to the
E.U. Down to the wire, absolutely.
[09:55:10]
CHATTERLEY: Who is least willing to allow the U.K. to exit without a deal here, Nic, very quickly, in your view?
ROBERTSON: Boris Johnson doesn't have much room for maneuver, because he has hardliners behind him who say, you know, you must get this tough
Brexit. You must get the one that takes back control. That was the slogan that you won the Brexit vote on. That's the one that got you elected as
well, Mr. Prime Minister.
So he has got the hardliners behind him. Boris Johnson has a track record of laying down some of his close friends. That's a possibility. Emmanuel
Macron in France is being accused of taking a tough line on the fisheries issue.
On the E.U. side, all E.U. 27 leaders have to agree on this. Angela Merkel, we understand is a little softer and wants to talk us through.
We're not in the room. I have to be brutally honest. We're not in that room. So we really don't know. I mean, that's the bottom line.
CHATTERLEY: No. No one needs this in the middle of a pandemic. Compromise needed. Nic Robertson in London. Thank you.
All right. That's it for the show. You've been watching FIRST MOVE. I'm Julia Chatterley. Stay safe and we will see you tomorrow.
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