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First Move with Julia Chatterley
The U.K. Now Vaccinating Health Care Workers And The Elderly; The First Local Infection For Months Sparks Mass Testing In One Chinese City; Bitcoin Bull Talks About What's Driving The Current Cryptocurrency Rally. Aired 9-10a ET
Aired December 08, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:20]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here's your need to know.
U.K. V-Day. The U.K. now vaccinating healthcare workers and the elderly.
Virus vigilance. The first local infection for months sparks mass testing in one Chinese city.
And crypto crazy. We speak to a Bitcoin bull on what's driving the current rally.
It's Tuesday. Let's make a move.
A warm welcome once again to FIRST MOVE. It's V-Day, as I called it, in the U.K. as the COVID jab-a-thon officially kicks off in Europe, but no S-Day
in the United States, stimulus, I mean.
Stimulus talks continue with focus on what to do about liability protection for businesses, one of the biggest sticking points. Lawmakers are expected
to buy themselves another week to negotiate and thresh out these terms, but a warning.
The U.S. Chamber of Commerce told Congress yesterday that new aid is, quote, "desperately needed" and that risks of a double dip recession are
rising, particularly as U.S. hospitalizations, deaths, and new cases remain near record levels.
It's also why, of course, we pounce on any positive vaccine news and there's more from the F.D.A. today. The F.D.A. confirming that that Pfizer-
BioNTech vaccine is some 95 percent effective with no safety concerns.
This data all but confirming, we think, that the F.D.A. will greenlight the vaccine as soon as Thursday for use in the United States.
The tug of war between vaccine hopes and the present day reality continuing to be a driver on Wall Street. U.S. stocks, as you can see are lower
premarket. Pandemic losers once again under pressure as new cases delay or reverse economic reopening.
Pandemic winners, meanwhile: Netflix, Facebook, and Apple all outperformed Monday, powering the NASDAQ to fresh records.
What about elsewhere in the world? Well, Japanese stocks slipped despite the unveiling of a new near $700 billion stimulus proposal from the
Japanese government. All the details on what that involves coming up, but what about Europe, too?
The deadlocked Brexit negotiations not helping sentiment there even as the U.K. flies the flag for those of us awaiting vaccines and a return to the
new normal, and that is where we're going to begin the drivers.
A landmark moment in the COVID crisis fight back.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: All done.
(END VIDEO CLIP)
CHATTERLEY: The United Kingdom becoming the first Western nation to vaccinate its citizens less than a week after the U.K. approved the Pfizer-
BioNTech vaccine. CNN's Cyril Vanier is outside Guy's and St. Thomas Hospital in London where the Prime Minister visited earlier today.
Cyril, great to have you back with as we called it, a momentous moment. Clearly, I think, the world is watching here and the reaction of some of
those first recipients are actually quite priceless about what it means just seeing their families very soon as well.
CYRIL VANIER, CNN CORRESPONDENT: Yes, absolutely. If there is one name and one face that our viewers should take away from today, Julia, it should be
Margaret Keenan, 90 years old.
I want to introduce you to her. I believe you may have just shown her pictures there. She was Patient A, the very first patient to get the first
dose of her two-jab coronavirus vaccine here in the U.K. She is 90 years old. She is an early riser. She got the job at 6:31, we are told, local
time. It happened at the University Hospital Coventry.
I want you to listen to Margaret Keenan and how she answered when she asked what it felt like when she found out she'd be the first patient to get it.
(BEGIN VIDEO CLIP)
MARGARET KEENAN, FIRST IN U.K. TO RECEIVE PFIZER-BIONTECH VACCINE: It hasn't sunk in yet. I can't really answer that question yet. It's just
really -- I don't know what to say. It's just -- it's a first, really.
I'd say go for it. Go for it because it's free and it's the best thing that's ever happened at the moment. So, do please go for it. That's all
I'll say. You know? If I can do it, well, so can you.
(END VIDEO CLIP)
VANIER: Well, if that doesn't put a smile on your face, I don't know what will. Julia, she says that she had been lonely, alone for most of 2020.
Obviously, because of the risks and because of her age, the risks involved if she caught COVID.
[09:05:10]
VANIER: Well, she hopes that in the New Year, in 2021, she will now be able to see friends and family. She won't be fully protected from the virus
until the early days of 2021 because if you do the math and look at the calendar, she got the first jab today. She'll get the second jab in 21 days
and then N.H.S. guidance says that it takes seven or 10 days for your body to then fully develop immunity from the virus. So, that takes us into early
2021.
Still, it is such a relief for her. It is going to be a relief for all the people who are getting the vaccination today and going forward. And you
know, as if that wasn't enough, the -- I think the stars aligned today. The second patient to get it in that same hospital, try and guess the name,
Julia. I'll help you.
The person, a man, 81 years old was named William Shakespeare. Not quite spelled the same way as the English playwright, but same name. He's known
as Jim to his friends, 81 years old. He was in the hospital's frailty ward. He was said to have his grandchildren's artwork near him when he got the
jab and then he went for a rest.
These are all the great stories that have been percolating from the U.K. health system today, including from this hospital behind us, Guy's Hospital
where as you said, Boris Johnson came to pay a visit to the very first patients getting their vaccine today.
For the moment, Julia, it's just a trickle. Some 800,000 doses are in the country at the moment. That's enough for some 400,000 priority patients,
just a trickle, as we said, but gradually, the program will expand -- Julia.
CHATTERLEY: Yes, I mean, Cyril, you said it. What else could put a smile on your face? Also making my eyes water, actually, just to hear their
responses and the fact that particularly for an 80-year-old who's not seen their family all year and can't wait to do so, it's just an amazing moment.
Cyril, talk to me about the proof once you've had a vaccine. Because I wanted to talk to you about this yesterday and we didn't get time. People
will be given a card, which at some point in the future is going to being an effective vaccine passport to carry out, travel, and go back to some
normality. Walk us through this.
VANIER: Well, there's some controversy around whether or not that will be an immunity passport, as some have called it, but yes, you are meant to get
a card.
It's a credit card sized document that indicates the number of the batch that your vaccine dose came from. It indicates the actual type of vaccine
that you got because for now it's only Pfizer vaccines in circulation, but in a few weeks' time there will be more. There will likely be the Moderna
vaccines and others.
So, it says the type of vaccine that you get, the date that you got it. It's also a reminder of when to go and get your booster jab, the second
one, three weeks later.
What it is not meant to be, and as I said, there's some controversy around this, is an immunity passport. Boris Johnson was very clear about this
yesterday that you're not going to be in a position where some people are going to be asked for the card and allowed to do certain things because
they have the card.
They are trying to signal that there isn't going to be two styles of life authorized for those who have had the vaccine and those who haven't. We'll
see, Julia, if that stands the test of time.
CHATTERLEY: Yes, you wait until airlines start asking for a vaccination certificate and things. We'll see. But great point. And to yours as well,
just the data collection on this, knowing what batch number, what type of vaccine, helps us collect the data to understand safety, efficacy, going
forward, even as people are getting this vaccine, so it's vital, too.
Cyril, thank you so much for joining us. Cyril Vanier there in London.
All right, President Trump will sign an Executive Order today to give Americans priority access to COVID-19 vaccines. No specifics have been
provided on just how the order will be executed or what it will mean.
But meanwhile, the country has experienced the deadliest week of the pandemic since April. More than 15,000 deaths have been reported. As CNN's
Alexandra Field reports.
(BEGIN VIDEOTAPE)
ALEXANDRA FIELD, CNN CORRESPONDENT (voice over): A race against time in the United States as new daily cases of coronavirus surge, straining many
health systems.
DR. PETER HOTEZ, DEAN OF THE SCHOOL OF TROPICAL MEDICINE, BAYLOR COLLEGE OF MEDICINE: This is where death rates really skyrocket, it is when you start
overwhelming ICU staffs. I mean, they're exhausted already from the whole year.
FIELD (voice over): Here in Massachusetts, this field hospital in Worcester is already accepting patients.
GOV. CHARLIE BAKER, (R-MA): Even with these additional resources, we can't afford to continue to strain the hospital system at this rate.
FIELD (voice over): Starting Friday, doctors will no longer perform any elective procedures that can be safely postponed within the state.
Across the U.S., over 102,000 people are hospitalized with the coronavirus. In California, as elsewhere, it's not only about finding hospital beds but
also having enough staff to care for the sick.
CARMELA COYLE, PRESIDENT AND CEO, CALIFORNIA HOSPITAL ASSOCIATION: The limiting factor, the most important factor here in caring for people who
have the COVID-19 disease are the nurses, the staff. That's what's short, and that's what's different this time around than it was during our summer
surge.
[09:10:06]
FIELD (voice over): Michigan extending its restrictions on some businesses and gatherings for 12 days.
GOV. GRETCHEN WHITMER (D-MI): Right now, 79 percent of all hospital beds are occupied. We cannot risk overwhelming our hospitals further.
FIELD (voice over): And as the United States nears 200,000 new coronavirus cases per day, Dr. Anthony Fauci warns that number could only increase in
the weeks to come.
DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: The blip from Thanksgiving isn't even here yet. So, we're getting
those staggering numbers of new cases and hospitalizations before we even feel the full brunt of the Thanksgiving Holiday.
FIELD (voice over): In New York City, where almost 200,000 elementary students returned to in-person learning, the governor says indoor dining
will be suspended across the state unless hospitalization rates stabilize.
GOV. ANDREW CUOMO (D-NY): If we don't get the rate under control, and you are going to overwhelm your hospitals, we will have to go back to a
shutdown.
FIELD (voice over): Even with vaccines expected soon, health experts say now is not time to relax.
DR. CELINE GOUNDER, BIDEN TRANSITION COVID ADVISORY BOARD MEMBER: While there is light at the end of the tunnel, the tunnel is not short. And if we
do not double down now on the masks and the social distancing, we really will continue to see transmission.
(END VIDEOTAPE)
CHATTERLEY: Alexandra Field there reporting from Massachusetts.
Compare and contrast to China now. One locally transmitted case of COVID-19 kicked off a mass testing drive in the City of Chengdu.
David Culver is in Beijing. David, I shouldn't be surprised when I read how China responds and Chinese cities respond and yet each time we see this
mass testing drive wherever it is, I am surprised. Walk us through what they've done here and why.
DAVID CULVER, CNN CORRESPONDENT: I think, Julia, it baffles people when they hear now a total of five cases, and that has put the city on high
alert.
You're right, the juxtaposition to the rest of the world, especially the United States, I mean, it seems laughable, but it is really concerning here
when you have five cases. The first time a case has been reported in Chengdu, this is in the Sichuan Province, sort of Central China there, in
nine months. So it's concerning for officials and then they decided to go forward with this massive testing drive for this one part of the city.
So we know they've already done in 48 hours or so some 25,000 tests. And after that one case, that's where they found the other four. What they're
doing now is kind of a compartmentalized lockdown.
So they have decided to go forward with what they consider to be the Beijing model after what happened here in June, a cluster outbreak and they
only shut down part of the city compared with the Wuhan style lockdown. What was that? Seventy six days, the entire city sealed off, businesses
crushed.
I went there even a short time after it reopened and many of those businesses said they, quite frankly, could not reopen, so they realized,
economically, it wasn't sustainable and even just mental health-wise for a lot of the people there, you can't continue to do that.
So they have this Beijing style lockdown that they are now putting in place in Chengdu, for example, in a compartmentalized part of the city, where
they'll continue to do the mass testing, the contact tracing, and that is key here.
Contact tracing: we're all tracked by our phones. They're able to find, for these five individuals, the 46 close contacts, and where they've been over
the past 14 days. So officials say they have already gone to those locations and they've disinfected them. That's how quickly they move.
Now, the question's going to be, what's the source of this? Because what we've seen in recent days and recent weeks and recent months even is that
they have linked this to imported cases. Julia, that's to say that they believe, health officials here, that some of the cases coming in are
actually from packaging and frozen foods, and they're being then transmitted to individuals here.
Why does that matter? Well, if you put it in greater context, what we have in the next few weeks is the W.H.O. bringing a field team here and they are
supposed to be tracing the origins of this virus.
It seems state media is pushing this narrative that perhaps this virus started from an imported case into Wuhan. That's what's being floated right
now. We'll see what this most recent case in Chengdu and now five cases are linked to -- Julia.
CHATTERLEY: Yes, we certainly need some answers and then the question is, how much we trust the results, I guess, to your bigger point there.
David Culver in Beijing, thank you so much for that, as always.
All right, these are some of the other stories making headlines around the world. A man under COVID-related quarantine in Taiwan who stepped out of
his hotel room for just eight seconds is now facing a $3,500.00 fine.
The migrant worker from the Philippines was caught on a surveillance camera and reported to the Health Department. Under Taiwan's rules, people in
quarantine aren't allowed to leave their rooms at all.
[09:15:00]
CHATTERLEY: Authorities in Southeast India are trying to find out what's behind an illness that has sent more than 500 people to hospital and left
at least one person dead and it's not COVID-19.
Patients have been suffering seizures and nausea and losing consciousness.
The British Prime Minister is traveling -- is expected to travel to Brussels this week to meet the European Commission President. Boris Johnson
says he is still hopeful a trade deal with the E.U. can be agreed, but the situation is very tricky at the moment.
With negotiators deadlocked, the U.K. has just over three weeks to reach a deal.
All right, we are going to take a break here on FIRST MOVE, but coming up, this time it's different. Bitcoin bull, Mike Novogratz says 2020's
cryptocurrency rally is driven by institutional investors, unlike earlier booms. He joins us later in the show to discuss.
And taking their hands off the wheel. Uber decides it's got enough to do without perfecting the driverless car. That's coming up. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE live from New York, where U.S. stocks look set to fall for a second straight session as the debate over
emergency aid looks set to drag on in Washington, D.C., and the need for fresh money only growing more urgent.
Some 12 million Americans risk losing key jobless benefits, pandemic- related benefits the day after Christmas. Moody's Analytics estimates, too, that nearly 12 million Americans are some $6,000.00 behind in rent and the
U.S. Chamber of Commerce says more than a third of small businesses are now seeing revenues fall.
What else we are watching premarket? Well, Tesla shares are set to pull back from record highs. The electric car firm heading back to the capital
markets to sell some $5 billion worth of new shares, its second capital raise in some three months.
Okay, big picture as investors await fresh U.S. stimulus, Japan has already moved forward with a third package this year, a $700 billion spending and
investment plan to boost economic growth. The government says it's designed to maintain employment, boost business, and achieve new growth in specific
areas like green and digital technologies.
[09:20:07]
CHATTERLEY: Singapore-based DBS Bank counts Japan among its 18 markets with assets exceeding $400 billion and I'm pleased to say, Piyush Gupta is the
CEO and he thinks an incoming Biden presidency could help calm market nerves.
Lots to discuss, Piyush. Great to have you on the show this morning. I can't help feel that all the stimulus has helped support growth. It's
lifted stock markets around the world, but it's also masked a lot of the underlying damage. Do you agree?
PIYUSH GUPTA, CHIEF EXECUTIVE OFFICER, DBS BANK: Oh, I agree entirely. I do think that government actions have cushioned the economy, but it is quite
clear that the real damage will only be known next year when the biggest moratorium in government schemes run out.
So my own sense is that you will see a much higher cost of credit for the banks and perhaps, we will default both in small and medium enterprises as
well as in the individual sector, consumers as well.
CHATTERLEY: So, you're expecting to see, perhaps, default rates on things like credit cards, loan quality deterioration as well, that the default
rates on those continuing to decline in 2021.
GUPTA: I think that's probably right. In fact, the delinquency, the default rates on unsecured consumer finance, things like credit cards and unsecured
personal borrowing, have already been going up quite rapidly, I would say.
Our default rates on the mortgage book, by and large, have been controlled, because in most cases, the mortgage portfolios are under moratorium.
Now, when the moratoriums lift, I think you will see more pressure on the mortgage books in the region. And like I said, I think you will see
pressure in the small and medium enterprises. There's a lot of government support, both for job schemes, but actual bailout packages to companies,
and those have to start winding down.
In most countries in the region, the Central Banks are being careful. They don't want a cliff effect so the wind-down will be gradual, so you're not
going to see everything happen January 1, but through the course of the year, I do expect to see an incremental degree of pain.
CHATTERLEY: I mean, we're seeing a huge divergence as well, as we look globally in the recoveries of economies. If I look at North Asia, China,
Taiwan, we just mentioned them, South Korea, their handling of the virus, so very different to what we've seen from many of the western nations.
What are you seeing in terms of economic activities, small businesses, the recoveries there?
GUPTA: Actually very good. I think the pace recovery is a function of three or four things, but obviously the healthcare regimes and epidemiological
impact.
The second is, I guess, the size of domestic markets and how much domestic demand matters. Third is, I guess, the fiscal resources of the governments
and so on.
But certainly, when you put all of those together, North Asia is doing relatively well. In fact, most of our countries we are in, I would say
economic activity is up to 85 percent to 90 percent of pre-COVID levels.
Unfortunately, this is not even, so when you look at Southeast Asia or you look at the Indian subcontinent, things are a little bit more grim there.
But there, again, it is aligned to the state of healthcare as well.
CHATTERLEY: Yes. I mean, there's so many angles here. I want to bring it closer to home as well and the efforts that Singapore and your bank
specifically is making, just to help people grow wealth, to invest in the stock market.
We often make this contrast between those that can get access to the assets that tend to rise here even as the underlying economy is facing challenges.
I know you specifically is very passionate about this. Just talk to me about what Singapore and DBS itself is doing to try and help people here,
and small businesses, of course, too.
GUPTA: Well, it is a well-known fact that participation in financial markets in a sustained and systematic way is helpful for wealth
accumulation, which is why you can see over the last few years, with low interest rates, the people who have access to financial assets continue to
do all right, and the ones who don't continue to suffer, which is income inequality grows.
Now, part of the problem is obviously lack of access to knowledge and lack of access to the markets themselves to products, but another part of the
problem is just the capacity of being able to do this in small ticket sizes.
You know, $100.00 savings, $200.00 savings, how can you get them to work effectively? Our big focus in Singapore has been to try and take financial
planning and make it available to the man on the street for the mass market.
And so to that extent, the Singapore government with the private sector launched a public-private partnership to try and create an open banking
regime to allow the individual to do finance and financial planning of all of the various asset forms they have.
[09:25:02]
GUPTA: And the interesting thing about this open banking experiment is the government is pumping in data on the individual's tax and individual's home
loans and the individual's pension schemes and so on and the banks are pumping in data and eventually, they are going to get data from insurance.
You can put all of that together and really create a complete balance sheet for an individual. You can allow the individual to plan better. And like in
our case, we are using a lot of artificial intelligence and machine learning tools to empower the individual to get the individual to be able
to get different kinds of ideas and finally be able to put regular savings, like $100.00 a month, like I said, into low risk, but market friendly kind
of investments.
The hope with all of this is that you can really make an impact to what is going to be one of the biggest problem of our times, the problem of
pensions, the problem of retirement, and how do you cope with this tremendous drain of an aging society?
CHATTERLEY: Yes, it is so important that's why I'm so passionate about digitization of financial services because -- and you said at the beginning
there, it's about greater financial inclusion, ultimately, and being able to price the risk of an individual customer and give them other options,
just show them what's available.
On that note, lots of excitement right now, and particularly in your part of the world about digital currencies and digital assets. What can you tell
me about the prospect of a DBS digital currency exchange?
GUPTA: Well, I think this notion that everything is going to tokenize and digitize is very real. And therefore, to be able to help companies raise
capital and to perform securities token offerings is something we think will start happening at scale.
We also believe other forms of digital assets, like cryptocurrencies are going to continue to be extremely popular. And so, that is something that
we are actually indeed studying, trying to put together an infrastructure that can help companies raise capital, that can help investors access
digitized assets, and to be able to support the market in some form.
It is something that we are in the process of working on, and so all I can say is watch this space.
CHATTERLEY: I know a lot of people are. Is this somewhere -- and I know it's a case of talking to the regulators and getting everybody comfortable
with what's been achieved here, is this somewhere where I think Singapore specifically and the regulators there are flying the flag because there's a
real sense, certainly, that other nations like the United States, for example, are behind in preparing for customers getting access to this and
banks providing access, too -- safe access.
GUPTA: I have to say that in the last year or so, the regulatory response to this is beginning to change in many parts of the world.
In fact, as you know, many Central Banks are actively pursuing their own Central Bank digital currencies. It's not only in our part of the world,
but also in many of the Western countries, the Canadians are doing it, the Bank of England is doing it, and so I think there's a broad based
acceptance that tokenized digital assets are on us. Some countries are further along, others are less so.
But I do think in addition to the stuff we talked about, over the next year or two, this focus on Central Bank digital currencies is going to continue
to increase, as, of course, you know, other kinds of digital currencies.
So, I think everybody is going to be part of this game sooner or later.
CHATTERLEY: Yes. I love hearing you say that. It's coming. The groundwork is being done. Piyush, always a pleasure to speak to you. Thank you so
much.
Piyush Gupta there, the CEO of DBS Bank. Stay safe, sir, and we'll speak to you soon.
GUPTA: Thank you. Bye-bye.
CHATTERLEY: All right, the market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:31:50]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stock markets are up and running this Tuesday, and we do have a lower open for the majors with the
NASDAQ pulling back from record highs, just a little pullback there, though, let's be clear.
That said, the F.D.A. is one step closer to approving the Pfizer-BioNTech vaccine that the U.K. began administering to its citizens today. The F.D.A.
saying in a new report that it sees no safety issues with the jab so far. It says the vaccine is highly effective in preventing COVID and that
Pfizer-BioNTech have handed over all the information required to greenlight the vaccine in the United States, perhaps as soon as this week.
So, good news on that front.
All right, let's talk about another asset class that's benefitted from some of the uncertainty this year. Cryptocurrencies moving further into the
mainstream, fueled by announcements like PayPal, greenlighting the use of crypto as a form of payment and just last week, the S&P and Dow Jones
saying it will launch cryptocurrency indexes in 2021.
Prices of some digital assets have skyrocketed this year with Bitcoin up over, as you can see, 145 percent from 12 months ago.
Joining us now, Mike Novogratz, founder and CEO of Galaxy Digital to tell us more. Mike, great to have you with us on the show as always.
In my mind, you're a bridge between the traditional form of macro investing and what, in the past, we perhaps would have called frontier investing in
the crypto space. Explain what you're seeing today that closes that gap or bridges that divide.
MIKE NOVOGRATZ, FOUNDER AND CEO, GALAXY DIGITAL: Yes, it's been really exciting, that, you know, Bitcoin has gone from a frontier investment to
actually now a macro part of people's portfolio, hedge funds, institutions, corporates, you look at MicroStrategy who, you know, bought $400 million of
Bitcoin on their corporate balance sheet.
Everyone is now looking at Bitcoin as a form of digital gold or as a hedge against debasement of fiat currency.
And so, you know, the institutionalization of getting good custody, of getting people comfortable that they understood it and that it was safe
happened over the last few years and now it's arrived and we see nothing but more and more accounts trying to get involved.
Every single crypto business like mine is working at breakneck speed because just on boarding all the new accounts from high net worth to
institutions to pension funds to endowments, cryptocurrency is just becoming an asset, not a frontier asset.
CHATTERLEY: Do you think it is down to greater understanding and perhaps the -- I mean, we can break it down to the store of value or the utility
use of crypto assets and bitcoin specifically or do you think it is investors, and I'm talking some of the more sophisticated investors, look
around the world and go, we have $17 trillion worth of debt now trading at negative yields.
We simply need to find some way to diversify in things that have more room to rise.
NOVOGRATZ: Yes, I think that you can split it in half, actually. Bitcoin itself is fulfilling this role of digital gold. It's just a store of value,
and its adoption is accelerating in a giant way because people look at the macro backdrop of $17 trillion in negative debt of budget deficits that
continue to grow in almost every country and a monetization of those deficits.
[09:35:21]
NOVOGRATZ: And so it's, in some ways, the perfect instrument, right? It's 21 million Bitcoin. It's a hard asset. There's no inflation or barely any
inflation. And so, it works for that -- for this time and place perfectly.
The second big story is the digitalization of everything, which is happening, and we are at the beginning innings of rebuilding the
infrastructure that American and global business will be done on in the future.
And that, most likely, happens on the Ethereum block chain. You're seeing almost every country look at Central Bank issued digital currencies. The
Chinese have started their experiment. It will be ramping up over 2021. The U.S., you know, you saw Visa recently announce that they'll do a
partnership with USDC, which is a stable coin, right, a dollar-backed cryptocurrency.
Visa has got 30 million merchants around the world and so all of a sudden, the world is going to go from bank accounts to wallets and people are going
to hold their value, their dollars, their Bitcoin, their movie tickets on their phones.
And you know, the banks are going to have to rush into this space and you're starting to see it. PayPal was a huge event this year. And mark my
words, I saw there was a big Japanese bank that decided to get -- I'm sorry, Spanish bank that decided to get into cryptocurrency just this
morning -- both trading and custody -- and you're going to see every single financial institution forced into this space.
CHATTERLEY: Every bank saying we have to be involved, whether it's investing, allowing our customers to invest, or providing some kind of
exchange to allow people to invest in these assets.
NOVOGRATZ: Hundred percent. If you think about it, as we get more of these Central Bank issued digital currencies, right, so you'll have a digital
euro, you'll have a digital dollar, all of a sudden you're going to trade digital dollars for digital euros, the infrastructure that that happens on,
right, the rails are the same rails that the crypto community is building and they don't exist right now in the traditional banks.
That's going to force the banks into this space. That alone will force it, let alone customers calling up and saying, hey, Morgan Stanley, hey,
Goldman-Sachs, hey, JPMorgan, why can't I buy Bitcoin with you guys? Right?
It's a $350 billion asset. You'll sell my claims on a bankrupt Hertz, but you won't sell me bitcoin? Like what gives with that?
And so, as more and more of these bank CEOs or heads of wealth management are getting these calls, they're scratching their head and saying, hey,
we're starting to look a little bit foolish. We used to be conservative, now, we're looking foolish.
CHATTERLEY: And our clients will go somewhere else if we don't provide this service. I just showed a chart showing the 12-month moves across XRP,
Bitcoin, and Ethereum. I mean, you spoke about Ether, the underlying block chain for Ethereum, the cryptocurrency there.
Do you buy the diversification argument or do you look at these specifically and go, hey, I see this because it's got greatest market share
and therefore we're buying it? Are you invested in any of these other digital assets or currencies, Mike?
NOVOGRATZ: Yes, I am. So we have a big shop and have a lot of expertise around, you know, the whole space. I think Bitcoin is a store of value, it
is a really safe investment for people.
I think Ethereum still has more of a venture flare to it, but it's an investment we like, and then there's a whole space called Decentralized
Finance or DeFi. This is much more for the experts, but I think in five or 10 years, really the revolution is going to happen by taking the block
chain and bringing it to finance.
And so we're invested in a lot of wonderful, you know, smaller projects. And so, I would tell our clients, generally, mostly Bitcoin, some Ethereum,
and then some in venture. You know, if you're a young crypto maniac, people are trading what they call alt coins all the time, a lot of those won't
have a lot of value, and some will have a ton of value.
CHATTERLEY: So, Mike, for someone who is looking at this and going, I get the buzz, I want to get involved, what's your advice? Because when I talk
to people about this, they say, look, invest only the amount of money that you don't mind going to zero and then you're at least comfortable with the
investment that you're putting in, whether it's one percent of the money that you have to play with here. Would you agree with that idea? Just put
the money to work here.
NOVOGRATZ: That used to be our story, it was to tell people, hey, put one percent to two percent of your net worth in Bitcoin. Worst that's going to
happen is you're going to lose a little bit of it and the best, you're going to make a whole lot of money.
[09:40:10]
NOVOGRATZ: I've changed my tune a little on that given the stability around Bitcoin. I now think it can be a more significant part of people's
portfolio. If I look at the macro space --
CHATTERLEY: How much?
NOVOGRATZ: So, I think, you know, a new investor could put five percent into Bitcoin. You now, Bitcoin is not going back to zero. This idea that it
could go to zero is not right anymore. It could certainly trade back to $14,000.00. You could lose 30 percent to 40 percent, but you're not losing
80 percent to 90 percent of your money.
There's too much infrastructure built, there's too much of a community that believes in this as a store of value, and so we'll see volatility come
lower and so I'm pushing people up to five percent allocations.
CHATTERLEY: How much have you got allocated, Mike, out of interest? Are you willing to tell me as a proportion of wealth?
NOVOGRATZ: You know, as a proportion of my net worth, my kind of overall crypto exposure is probably 50 percent.
CHATTERLEY: Wow. Yes. Good to hear. Mike, great to have you on, and come back and talk about Decentralized Finance because we have to talk about
this because this is ultimate disruption, I think, for financial services and it's a fascinating sphere, you should make it relatively simple for me
to understand, quite frankly.
Mike, great to chat with you. Thank you. Mike Novogratz, founder and CEO of Galaxy Digital there.
All right, from a record slump to a sustained recovery, Japan putting more money into its economy with an eye on the future. We'll discuss further
next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. Japan pledging hundreds of billions of dollars more in stimulus to boost its economy battered by the pandemic.
Prime Minister Suga has announced a package that includes fiscal spending as well as targeted investments. Let's get to Sherisse Pham who has all of
the details on this.
Let's be clear, this is the third stimulus package, financial aid package this year, Sherisse, and I like the way it's broken down. Direct support,
but also future growth opportunities, too. Walk us through this.
[09:45:10]
SHERISSE PHAM, CNN BUSINESS REPORTER: Yes, right, this is the first stimulus package to come out under the new Prime Minister, Yoshihide Suga
and it is unlike Abe's stimulus packages which came out in April and May, this one also has a lot of money earmarked to kind of drive Japan's economy
forward post COVID-19 pandemic, right, because we are going to get out the pandemic at some point in the future, we all hope, very soon.
But let's walk through a little bit of what we saw in the package today. The total package is a staggering $700 billion. That includes about $300
billion in government fiscal expenditure and it is already adding to a huge number.
You know, Japan has already spent a lot to boost its economy so we're looking at a total stimulus package spend so far this year of about $3
trillion. That's a number that amounts to roughly two-thirds of Japan's entire economy, of Japan's GDP.
So, this latest round will include a few measures targeted at COVID-19, vaccine prep, incentives to get consumer spending, and subsidies for bars
and restaurants that had to comply with restrictions for shorter operational hours.
But for the money to drive the economy forward, that's a lot -- almost half of this package is earmarked for that, and they're looking at things like a
so-called green fund so that Japan can hit its target of being carbon neutral by 2050 and also money for investments in what they're calling
digital innovation, not a lot of detail there as to what that is.
CHATTERLEY: Yes, it's something that we might take --
PHAM: And something here is that there are not a lot of details of how Japan intends to fund this giant stimulus package.
CHATTERLEY: Yes, it certainly is and obviously some of this is going to take years to feed in, but I like the idea and this is sending a really
bold message about, look, we can do things in the short-term but we need to look at how we improve growth and do it in a green manner and focus on the
digitized future at the same time, too.
Sherisse Pham, great to have you with us. My apologies to the viewers for a few technical issues and glitches there. These things happen when you're
working from home.
All right, let's move on because Japan's new stimulus is a reminder that even in parts of the world that have done well against the virus, the
economic consequences have been dire. And as Ivan Watson reports from Hong Kong, even the medical battle in the region is far from over.
(BEGIN VIDEOTAPE)
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: We're seeing a new wave of coronavirus infections hitting parts of East Asia.
Here in Hong Kong, record high numbers of infections, according to the city's chief executive, who has announced new measures aimed at stemming
the spread of the disease such as closing restaurants after 6:00 p.m., as well as gyms and beauty salons.
Meanwhile, the military is being called in to help in both South Korea and in Japan. The situation in South Korea described by a top health official
there as the biggest crisis since the pandemic first began there last winter.
So, the military and the police are being brought in to help with contact tracing while COVID testing sites are having extended hours into the
evenings and into the weekends in an effort to help stop the spread there.
The South Korean government has announced it is allocating the equivalent of around $1.2 billion to purchase vaccines for some 44 million people.
Meanwhile, Japan, the government is responding to requests for help in the COVID hot spot cities of Hokkaido and Osaka, sending in nurses from the
Self-Defense Forces to help with hospitals there.
In Osaka, for example, reports of up to 70 percent of hospital beds being occupied by COVID patients.
And meanwhile, Mainland China, where of course, COVID was detected back in December, which initially saw the virus spreading out of control, but
really draconian measures have helped all but stifle the virus there, the biggest headline from Mainland China, five confirmed cases, at least five
confirmed cases in the City of Chengdu, which according to state media have prompted authorities to lock down a hospital, a neighborhood, and a Farmers
Market where the first confirmed case had recently visited.
Ivan Watson, CNN, Hong Kong.
(END VIDEOTAPE)
CHATTERLEY: All right, coming up, a U-turn from Uber on developing its self-driving cars. That story just ahead.
(COMMERCIAL BREAK)
[09:52:05]
CHATTERLEY: Welcome back to FIRST MOVE. Uber has decided to hand over the keys to its self-driving car division. It is selling its autonomous car
unit to competitor, Aurora. As part of the deal though, Uber will invest $400 million in Aurora.
Paul La Monica joins me now. Paul, in English, basically, they are keeping a minority stake in this. It feels like they want to own a minority stake,
around 26 percent in something, perhaps rather than owning all of something that doesn't work in the end.
PAUL LA MONICA, CNN BUSINESS REPORTER: Exactly, Julia. I think that Uber is really trying to figure out where are the areas that it needs to invest
most in order to find long-term success and long-term profitability. Self- driving might not be it, hence this deal to sell this to Aurora.
It's interesting because obviously Uber is, in a sense, at least on Wall Street, thriving lately. The stock is back near an all-time high because of
hopes of a recovery in its core ride sharing business, but also Uber Eats and Uber Eats is a business they're doubling down on because they're buying
Postmates so that's something that I think we're clearly seeing that Uber finds food delivery to be more promising than self-driving cars right now.
CHATTERLEY: And to be fair, this was a legacy as well of Travis Kalanick and they do have to focus on profitability and to your point, I guess
perhaps just narrowing down on what they're focusing on here makes sense, but back in the day, they were ahead of, what -- Google and Tesla in self-
driving vehicles.
Now, speaking of Tesla, announcing a $5 billion capital raise, Paul. I have to say, when your stock is worth a cool, what -- $600 billion, it is easy-
peasy lemon-squeezy to raise a tiny sum of money like $5 billion. Oh, how times change.
LA MONICA: It's stunning, isn't it, Julia? Shares were only down at last check about two percent to three percent this morning on the news. So a
little bit of dilution with Tesla selling $5 billion worth of stock, but as you point out, $5 billion is not that significant for a company that's now
worth more than $600 billion and this is before the official addition to the S&P 500 later this month.
A lot of investors have been buying Tesla shares in anticipation of Tesla's inclusion to the S&P 500, which we know is coming in one fell swoop at the
end of the year.
So, I mean, Tesla is now a company that there are only a handful worth more than it that's in the S&P 500, it's those Big Tech stocks.
CHATTERLEY: Do you think the good news there on the inclusion in the S&P 500 is already in the price? You're right that funds have to go out and
added if they own the index, but give them the price move that we've seen this year, I just wonder whether it's baked into the cake here.
[09:55:01]
LA MONICA: Yes, I would think that with the shares, you know, up about 670 percent or so ...
CHATTERLEY: Is that all?
LA MONICA: ... already in 2020, that's it. I mean, Elon Musk, you know, probably should be jealous of other companies that are up 700 percent.
I mean, obviously, a lot of index funds, I think, and individual investors have already bought Tesla shares, but again, you can't discount the notion
that all of these mutual funds and ETFs that are either index funds that have to own Tesla or funds that benchmark the S&P 500, they're not going to
want to not have Tesla because then that means that their performance will lag by not having Tesla in their funds.
So I think you still may see some fund buying in the coming weeks but it won't be so dramatic as I think a lot of it is already baked in here.
CHATTERLEY: Yes.
LA MONICA: Baked into the electric market.
CHATTERLEY: Paul, I have to say, I didn't think it was possible for your backdrop to get more exciting, but you have excelled yourself today. I was
sort of half listening to you and half just admiring what was going on behind you. Are those awards yours?
LA MONICA: Those are fantasy football trophies. One is my wife's, but the rest are mine, yes.
CHATTERLEY: Wow. Go your wife. I love that. Paul La Monica, thank you so much. I'm being told to shut up.
That's it for the show. Thank you for watching. I won't be here tomorrow. But I'll be back with you on Thursday. Stay safe in the meantime, and I'll
see you very soon.
(COMMERCIAL BREAK)
[10:00:00]
END
