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First Move with Julia Chatterley
U.S. House To Call On VP Pence And Cabinet To Use 25th Amendment To Remove Trump; Conservative Social Media Site, Parler, Goes Offline; Some U.S. Firms Halt Political Donations After Capitol Riot. Aired 9-10a ET
Aired January 11, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE. And here is your new "to know."
Impeachemnt imminent again. Democrats prepare new measures to remove President Trump.
Social shutdown. Parler, a U.S. platform favored by conservatives, is taken offline. And donations denied. Corporate America cuts funding to
Republicans who refute Biden's election win.
It's Monday. Let's make a move.
A warm welcome once again to all our First Movers around the globe. It is great to be back with you. So much to discuss this Monday as we track the
political and business fallout from last week's devastating attack on the U.S. Capitol even as America's COVID emergency deepens. It is a testing
time for the United States to be sure, and yet, global investors remain confident both in America's resilience and the strength of its economic
recovery with Wall Street ending last week at all-time highs.
We're looking -- I have to say though, there is some consolidation this morning. It makes sense in light of the near two percent rally already seen
this year for the S&P 500.
President-elect Biden is set to unveil his plans for more spending later this week. Late last night he tweeted, "We need $2,000.00 stimulus checks."
I have to say that's welcome news all round after Friday's weak jobs report, 140,000 jobs lost net last month. The first negative month in fact
since April of last year as COVID restrictions bite.
And it's not just the United States, those COVID fears are front and center across Europe and Asia, too. U.K. officials warning that the country has
entered the worst phase of the COVID crisis yet. The number of people heading out to shop fell by more than 25 percent last week, as new
lockdowns took effect. It's going to be a huge hit once again to industry and the economy.
Take a look at Asia, too, mostly lower again. Malaysia, the latest country to impose fresh lockdown. Japan also looking to extend its state of
emergency. Grim times in the COVID crisis. Short term turbulent political times in the United States. Lots to get to in our drivers, and we begin
with the stunning situation in Washington this hour where Donald Trump could become the first U.S. president in history to be impeached twice.
House Speaker Nancy Pelosi pressuring the Vice President Mike Pence to invoke the 25th Amendment to remove President Trump or have him face a
Senate impeachment trial after Joe Biden's first 100 days in office. Sunlen Serfaty has all the details.
(BEGIN VIDEOTAPE)
REP. NANCY PELOSI (D-CA): Well, sadly, the person who is running the executive branch is a deranged, unhinged dangerous President of the United
States.
SUNLEN SERFATY, CNN CONGRESSIONAL CORRESPONDENT (voice over): House Speaker Nancy Pelosi insisting President Trump be removed from office in
the final days of his administration.
PELOSI: Only a number of days until we can be protected from him, but he has done something so serious that there should be prosecution against him.
SERFATY (voice over): Pelosi will push a resolution today calling on Vice President Mike Pence to invoke the 25th Amendment.
In a letter to her Democratic colleagues, Pelosi says if Pence and the Cabinet do not enact the 25th Amendment within 24 hours, the House will
move ahead with impeachment.
Pelosi and Senate Minority Leader Chuck Schumer reached out to Pence on this matter.
PELOSI: We were kept on the line for 20 minutes. It's going to be here in a minute, a minute, a minute. Well, they never did.
I was at home so I was running the dishwasher, putting my clothes in the laundry. We're still waiting for him to return the call.
SERFATY (voice over): One source close to the Vice President tells CNN that Pence has not ruled out invoking the 25th Amendment, but his team has
expressed concern that Trump could take some rash actions harming the country if the Cabinet proceeds.
REP. DEBBIE DINGELL (D-MI): We are all guessing until he tells us what his intentions are. I think there are a lot of people at the White House that
are in this administration who have noticeably noticed a real difference in the President's behavior even worse than it was.
SERFATY (voice over): Three Democratic congressmen have already drafted one Article of Impeachment, charging Trump with incitement of insurrection.
REP. NANCY MACE (R-SC): One of the issues that I have right now, whether it's the 25th Amendment, whether it's impeachment right now is further
dividing the country and pouring gasoline on a fire and I worry about that because the Impeachment Articles, if it passes with a simple majority in
the House, it needs two thirds in the Senate. I don't know that there's an appetite for it there.
SERFATY (voice over): Congressman Jim Clyburn has floated the idea of waiting to send any Articles of Impeachment to the Senate until after
President-elect Joe Biden completes his first 100 days in office.
REP. JIM CLYBURN (D-SC): Let's give President-elect Biden the hundred days he needs to get his agenda off and running, and maybe we'll send the
Articles sometime after that.
SERFATY (voice over): This, as two Republican senators have called on the President to resign.
SEN. PAT TOOMEY (R-PA): But I think the President did commit impeachable offenses. There's little doubt in my mind about that, but certainly he
could resign and that would be a very good outcome.
(END VIDEOTAPE)
[09:05:05]
CHATTERLEY: Let's talk this through, Joe Johns is in Washington, D.C. for us. Joe, great to have you with us. I want to hone in on what was mentioned
in that piece, and I think it was very important. What action do you take here in response to what we saw last week that doesn't further divide the
nation and divide voters? And that's why Donald Trump has been so powerful. He still seems to have a strong base.
What do we expect from the House in terms of an impeachment vote this week and talk to me about the importance of waiting perhaps a hundred days to
take those Articles of Impeachment on to the Senate?
JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Right, there's a big appetite up on Capitol Hill for accountability at this stage after what
happened up on Capitol Hill on January 6th, and I can tell you from talking to people on the Hill about the thinking here, they're trying to balance
between concerns over disrupting, if you will, the first 100 days of Joe Biden and also trying to establish some kind of accountability for Donald
Trump.
One of the big things that people are concerned about on the Hill, according to my reporting, is they would like more than anything to push
this through in a way so that Donald Trump could not run for office again in four years or what have you.
So that's the point of going through with the impeachment process as quickly as possible, and then perhaps waiting the first 100 days, or
someone -- somewhere down into the Biden administration before actually holding a trial.
It's not unprecedented. It has been done before at least with a judge or even two, who have been impeached, but what people in Capitol Hill are
saying on the Democratic side is that they would like to make sure that the President doesn't run for office again after he leaves office this time,
given what happened up on Capitol Hill -- back to you.
CHATTERLEY: And this is such an important point, Joe. This is not about removing or impeaching a President for the next what -- nine days. This is
about preventing him ever taking office again, particularly if he has hopes to run in in 2024.
What's looking most likely as a result? We've got the 25th Amendment where Mike Pence would say look, you know, the Cabinet and I don't believe he is
fit for office anymore. We've got a potential resignation of the President, which I don't think anyone believes will happen. This impeachment vote also
a censure vote. What's most probable?
JOHNS: Well, at this stage, you're right, it doesn't seem probable at all that Mike Pence will move forward with trying to assemble the votes in the
Cabinet of the administration, in order to strip the powers of the presidency from Donald Trump. So it doesn't sound like that's going to
happen.
It's been made pretty clear to us here at the White House from our reporting that the President is not going to resign. But I can tell you
there does definitely seem to be a strong motive and will if you will, on the Hill to go through with an impeachment vote because at the very least,
it is understood that Donald Trump's administration will be stained with the notion of him being the first President in the history of the country
to have been impeached twice.
CHATTERLEY: Many firsts in this administration, Joe. Thank you so much for that, Joe Jones.
All right, the plug is being pulled on President Trump's social media megaphones after the President was banned on Twitter and Facebook. The
conservative censorship free app, Parler is now also off the air.
CNN chief media correspondent Brian Stelter joins us now. And just to be clear, Brian, great to have you with us. It was other Big Tech companies
that effectively pulled the plug on Parler, at least in the short term here. Do we see this as the Big Tech companies finally taking ownership and
some degree of responsibility for the democratic devastation that they've helped fuel?
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Yes, I think that's right. This is of course, very belated, I don't even want to say better late than
never in this situation. But these technology companies recognize that they are playing a key role in the radicalization process, some Americans
radicalizing online in ways that U.S. officials actually compare to how Islamic militants have been radicalized by social platforms in prior years.
There were conversations years ago about Twitter and Facebook taking action in those cases involving ISIS. Well, honestly now, these technology
companies are looking inward, thinking about what's happening in the United States, and they don't want any more blood on their hands. It is as simple
and as disturbing as that.
It's not just President Trump, although Trump is part of this, banning Trump of course, is a statement that they believe Trump is a danger to the
public, that he could incite further violence on his Twitter account. You can see it's not just Twitter. Also, everything from Twitch to YouTube,
even Shopify, which I find really interesting because it is an e-commerce site, and the Trump Campaign can no longer sell products on that e-commerce
site.
So this is hitting President Trump and his wallet. But it's bigger than Trump. It's also about extremists who are acting in his name, trying to
organize further protests that could turn violent and these platforms want nothing to do with it.
And Parler, of course, Parler overnight stripped of its web servers by Amazon. Now Parler essentially is invisible on the internet. It's off the
internet and that's making some fans, some Trump fans, well, even angrier - - Julia.
CHATTERLEY: Yes. But you raise the perfect point here, Brian, which is that it is so much bigger than President Trump. Effectively what these
social media platforms have done is cultivate echo chambers of misinformation for profit. And the rumor is that President Trump might say
something against some of these tech companies today.
The question is, has what we've seen in the last week been enough of a catalyst for Congress to go, okay, we actually have to act to tackle some
form of misinformation and the belief that for many of these people, they thought what they were reading and seeing what's the truth. We have to
separate fact from fiction.
STELTER: Yes, this is all because of a big lie. It is lies that led up to the riot. It was online radicalization that led to a real-life attack at
the Capitol that could have very well turned into a massacre. And I think as the days go on, and we see more and more videos of his attack, it
becomes more clear how severe and how violent this really was.
These lawmakers lived it, they are victims. And you know, what I wager, I guess on whether they will take action against Big Tech. I'm wary of saying
that because of the track record of these legislators.
However, I do think this has been a wake-up call all over the place, including inside technology companies, you know, look at how Twitter
employees were pressuring the CEO to ban Trump. You know, there's a lot of pressure internally being applied as well as pressure being applied
externally right now.
CHATTERLEY: Tech is too big to tackle. Is that what we're saying, Brian?
STELTER: I think I am. I think you said it before me.
CHATTERLEY: Yes.
STELTER: I think I was trying to.
CHATTERLEY: Yes, no, I am with you. Unfortunately, I'm with you. They have to show more metal. Congress has to show more metal. Brian Stelter, thank
you so much for that.
And some of the biggest American companies also taking action. JPMorgan and Citigroup is suspending all political donations after the Capitol riots.
Meanwhile, Marriott and BlueCross BlueShield, halting donations to Republicans who voted against certifying Joe Biden's election victory.
Christine Romans joins us now with more. Business backing away, Christine, finally recognizing that they have to put their money where their mouths
and their views are on what their customers feel, too.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: This is the final good and true breakup, I think of business with its business
President, right? I mean, in the very beginning, there was optimism that they were going to be able to get, you know, some policies that they'd
really enjoy, like tax cuts. They love the tax cuts, Corporate America did.
They didn't love the President's tariffs. They didn't love his tone. And now some of these companies with pretty sharp words are backing away from
Republican lawmakers. In particular, BlueCross BlueShield in its statement saying that they will suspend contributions to those lawmakers who voted to
quote, "undermine our democracy."
So one after another, companies are coming out with their statements for how they are going to handle this, and I can tell you, companies you
haven't heard from yet, their executive teams are huddled together trying to decide what is the appropriate response for these companies, not only
for their customers, but their employees who are very, very concerned about the kind of America that their companies are doing business in at the
moment.
So a really remarkable turn of events, I think here. In the very early going, four years ago, Corporate America was hopeful that this President's
deregulation tax cuts would be good for their business. But overall, its tone and the actions of Republican lawmakers and the President in the end
that have caused a well and true breakup of Corporate America and this administration.
CHATTERLEY: It is early days and the skeptic in me, Christine, says it's early days in terms of elections as well, whether it's the midterms or
2024. And business isn't half pragmatic in a moment, it reacts very quickly, and then suddenly it forgets what it needs to do or should be
doing when business interests actually require them to give money in certain places in order to get the action that they want.
How sustainable do we think these restrictions are because you can't separate politics from money in the United States in order to win elections
of any form, you've got to have financial backing?
ROMANS: So far, it's either a quarter or six months is what I'm seeing most of these companies are committing to and some of them are committing
to no Political Action Committee contributions at all for the next six months, to let the new administration take hold and to try to let the
temperature cool in this country.
But you're absolutely right, there is always pressure from Corporate America and from Washington. These two: money and politics -- money is the
oxygen in American politics. I do think there's something else at play here, The Lincoln Project, which you probably heard of and others who are
going to be -- and they have said so -- they will be shaming companies who are putting money toward Congress members who they think are trying to
undermine democracy.
So I think you're going to start to see -- you're going to see the temperature rise in terms of the PR pressure on some of these companies who
are giving money to some of these lawmakers who voted not to certify a fair election in the United States and in many of these companies see that as
just undermining democracy.
By the way, rule of law and democracy is why this is such a great place to do business, right? That's what makes America, America. So that is --
that's concerning to these companies.
[09:15:40]
CHATTERLEY: So many great quotes in there. Money is the oxygen in U.S. politics.
ROMANS: It is, sadly.
CHATTERLEY: Christine Romans, you take the quote of the show. Yes. Christine, great to have you with us, as always.
All right, let me bring you up to speed now with some of the other stories making headlines around the world.
As coronavirus surges across Europe, England's chief medical officer says the U.K. is at the quote, "worst point of the entire pandemic" with the
numbers of people sick higher now than during the previous peak.
And over in Germany, tighter restrictions took effect today and will be in place at least until January 31st.
China's Hubei Province has finished testing around 17 million people for coronavirus. It began on Wednesday after two cities reported 82 locally
transmitted cases, the biggest outbreak in Mainland China four months. The provincial capital was also put on lockdown.
Rescue Services in Indonesia say they've recovered the black boxes from a passenger jet that went down on Saturday and obtained communications data.
Sixty two people were on board when the Boeing 737 crashed. Search operations are continuing around the clock.
All right, coming up here on FIRST MOVE: how will a second Trump impeachment be received around the world, a former U.S. Ambassador to China
weighs in.
Plus: paying the price for insurrection. Should social media throw its hands up for its role in building extremist groups in online activity?
That's all coming up. Stay with us.
(COMMERCIAL BREAK)
[09:20:11]
CHATTERLEY: Welcome back to FIRST MOVE live from New York where it is looking like a soft open on Wall Street, a pullback from the record highs
we saw last week. Wall Street, of course watching the unprecedented political developments in Washington, D.C. continuing to unfold.
Not the only story though, U.S. health officials also warning that January is on track to be the deadliest month in the COVID crisis yet.
In addition to that U.S.-China relations remain an additional overhang. The Trump administration announcing that it will lift decades' old restrictions
that have limited contacts between the United States and Taiwanese officials.
At the same time, the New York Stock Exchange moved to delist three telecom firms that the administration says have ties to the Chinese military. That,
taking effect today, too.
Back in Washington and U.S. Democratic lawmakers working to prevent President Trump from holding office in the future. Former Democratic
senator from Montana, Max Baucus joins us now. He is also a former U.S. Ambassador to China.
Ambassador Baucus, fantastic to have you on the show. I did originally want to speak to you about China or about Taiwan, but I do feel like we have to
begin by discussing what we're seeing in Washington, D.C. at this moment. What do you see as the best action for Congress to take with regards to
what happened last week, and the actions of the President?
MAX BAUCUS, FORMER U.S. AMBASSADOR TO CHINA: We have a new President that's going to be sworn in on January 20th, and I think that should be the
primary focus. Joe Biden is going to have a huge challenge as the new President, whether it's domestic, coronavirus, the riots that occurred in
Capitol or foreign policy overseas, whether it is Iran and most especially China.
I think that the lawmakers should essentially figure out, okay, Trump should be reprimanded, maybe censured, maybe some other action taken
against him. The main point is not let it distract President Biden -- President-elect Biden when he becomes President do his job.
Now President Trump is going to be sanctioned in many ways. First of all, the judicial system will work its will and I'm quite certain it will bring
actions -- criminal actions against Donald Trump.
In addition, there probably a lot of other actions will be taken against him because of his tax returns or business dealings overseas. We just don't
know. Donald Trump is going to be brought to justice. There's no question about it.
I don't want it to get in the way of Joe Biden beginning his presidency.
CHATTERLEY: Ambassador, can I read between the lines and say, you're convinced then that President Trump will never hold public office again,
because outside of what we've seen in the past week and the potential vote on impeachment, his other issues will come back to haunt him between now
and 2024.
BAUCUS: That's correct. There's so much out there. It's going to come out to haunt him, but to not put him in jail. It's going to certainly result in
convictions and civil actions will also be brought against him.
Don't forget, too, there are other Republicans who are going to be running for office in 2022 and 2024 and some of them may pick up the mantle of some
of the disaffected members of the U.S. public. There's a huge split in the United States today between those, I call them the haves and have nots,
Donald Trump clearly appealing to the have nots, but others might also pick up that mantle.
I think the days of Donald Trump are going to wind down very quickly. He should be brought to justice. But this is -- there's not enough time yet, I
don't think to impeach him or convict him, certainly, because Congress doesn't come back to session until the 19th.
I also don't think that the 25th Amendment will be invoked, there are just not enough members of the Cabinet who would invoke it. So he will probably
have to face justice later on down the road, hopefully censured, but probably not much after that -- not much other than that before the 19th.
CHATTERLEY: It's quite interesting, because many of the concerns that you hear among Republicans is the Republican Party itself may have the
establishment, but Donald Trump has the voters and he has supporters and he had what -- more than 19 million followers on Twitter, admittedly, that's
now been locked down.
Are you saying that you expect the support, even the base support that President Trump has enjoyed for the last several years will quickly
dissipate?
BAUCUS: I think much of it will dissipate. I think that storming the Capitol was a very sobering moment for a lot of Republicans, including a
lot of Republicans in the hinterland or the coast, not the coastal elite Republicans who care about America. They're very patriotic.
[09:25:11]
BAUCUS: I think the storming of the Capitol is a wake-up call for some of them, not all of them, but for some of them. Add to that Trump will not be
an office, he will not have the bully pulpit. The media will not be focusing on him every day. President Biden will have the bully pulpit,
he'll have the focus of the media.
So I do think that it's a more quickly than we think Donald Trump's stature is going to fall.
CHATTERLEY: I want to move on, Ambassador Baucus and talk to you about Taiwan. What do you make of the decision, the announcement by the Secretary
of State Mike Pompeo to reduce or lift restrictions on relations with Taiwan over the weekend?
BAUCUS: I think that it is somewhat risky. I think that the new President, Joe Biden, will take a very solid, sober approach towards Taiwan, and the
usual approach in the last several years will probably be continued. That is of strategic ambiguity.
I think it's unwise for either China to provoke an unnecessary agitation and it's unwise for the United States to invoke it. Taiwan's initiatives
are going to be around for a long time, and I just think that both sides have to manage it, along the wave of stability and we just have to find a
better way to deal with this rather than agitating a response or agitating if not insurrection, agitating the Taiwan issue to the point where it's
going to cause a problem.
CHATTERLEY: I mean, this is the challenge now for Joe Biden, perhaps that's what the administration wanted. If President-elect Joe Biden walks
back on some of this as far as Taiwan is concerned, or some of the restrictions or the tariffs, he is going to be accused of being soft on
China. How does Joe Biden handle China going forward? And can we say already, he will be softer than President Trump on China?
BAUCUS: Well, I think your early analysis is correct. That is, I think, to some degree, the Trump administration, some Republicans, including
Secretary Pompeo are trying to put Joe Biden in a box, make things more typical for him by being political. That's part of the reason for their
actions.
Add to that, I think that Joe Biden will not be more soft on China, he will not be. He will not let the United States be played by China. He is a very
smart man, he has been in public service a long time, and add to that, there is a very strong bipartisan feeling in Washington, Republicans and
Democrats say hey, we've got to do something about China.
Now, having said that, I think Joe Biden knows that not only is China not going anywhere, but that China is very tough, but we have to come up with a
policy where China gets the respect of the United States or where China says okay, we realize we can't play the United States, we realize, we can't
take advantage of the United States. That's Joe Biden's main goal, make sure that China respects the United States.
CHATTERLEY: It's a fine line to walk. Well, he is going to be busy. Ambassador, great to have you on the show.
BAUCUS: Yes, he is.
CHATTERLEY: Thank you for your wisdom. Ambassador Baucus there, former U.S. senator and Ambassador to China, sir, thank you once again.
All right, the market opens next. Stay with us.
(COMMERCIAL BREAK)
[09:31:32]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running on the first trading day of the week and we are losing some ground as
expected, pulling back from record highs. Investors have mostly ignored the political battles in Washington focusing instead on some of the good news
and the prospects for further rounds of stimulus.
President-elect Biden will call for trillions of dollars' worth of new aid later this week. JPMorgan believes that Congress will approve a $900
billion package in the months ahead. More spending, ultimately, though, is going to lead to more borrowing and that could further boost U.S. Treasury
yields.
Yields on 10-year Treasuries are pushing further above one percent. That's their highest rate in fact, since the spring lockdowns last year. High
yields though, welcome news for banks, which have rallied sharply in the New Year, their profit is going to get a boost from higher rates.
Financials kicking off Q4 earnings season later on this week.
Elsewhere, Bitcoin pulling back from record highs, yet still up, get this, some 30 percent so far, just this year alone.
Take a look at Twitter shares, too, sharply lower after its decision to pull President Trump's account. That's a permanent suspension. That of
course hits the business model, less eyeballs around. Plenty to discuss.
Julian Emanuel joins us now. He is Chief Equity and Derivative Strategist at BTIG. Julian, great to have you with us. Happy New Year.
JULIAN EMANUEL, CHIEF EQUITY AND DERIVATIVE STRATEGIST, BTIG: Thank you.
CHATTERLEY: January 11th, I think there's one thing that we can promise investors this year, and it follows on from what we saw in 2020 and that's
volatility. The question is, does it allow markets to continue to rally here or do you expect some kind of pause?
EMANUEL: So in the medium term, looking out towards the end of the year, we do believe that markets can and will, as they did in 2020, rally in
environments of higher volatility. But if you step back and you look at where we are now, in our view, it almost would be healthy in a way for
markets to pause because when you think about last week, I think it's pretty safe to say that you're entering a more speculative phase of this
market rally.
Because the reaction to obviously, the first thing being Wednesday's extremely tragic events in the Capitol combined with the surge in the
virus, and you know, admittedly very poor employment numbers on Friday, and the markets ability, not only to shake it off, but really to almost, you
know, just rally very strongly in the face of it tells you that we're in in a new phase, a phase that's likely to be more volatile.
But yet again, as we see this morning, it's less a reaction to the change in the news flow and more reaction to thinking that Bitcoin, certain
speculative stocks, et cetera have perhaps moved too far too fast.
CHATTERLEY: Oh, we're going to come back to Bitcoin, because I want to get your views on that, but I think -- and you mentioned it, what we saw on
Wednesday last week, overshadowed the Georgia runoff elections, which leave the U.S. Senate this year, very shortly, with a 50/50 split broken by a
Democratic Vice President. I look at your notes and you're kind of cherry picking, you see that that paves the way to more stimulus, which is hopeful
news, I think, for the economy, but you rule out the likelihood of tax rises.
Why do we get all the good and perhaps none of the bad as investors?
EMANUEL: Well, well, so from point of view, 50/50, and then if you look at the House of Representatives, you know the majority of the Democrats shrunk
this election, and you have an admittedly centrist President coming into office, Joe Biden, is that basically, when you put that all together, we
think priorities, call it one through 10 for the incoming Biden administration, are to tackle the virus from a public health perspective
and then tackle the virus from an economic perspective.
And you know, that really, in our view, decreases the likelihood of new taxes in 2021, particularly since some of the swing votes on both the
Democrat and the Republican side in the Senate, which we're now finding aren't necessarily going to be comfortable with a higher tax regime.
[09:35:53]
EMANUEL: Now, the other part of this is while we do expect more stimulus, where the market is and where it comes from, really indicate that, you
know, it's almost a done deal. And I would say that that kind of assumption, these things are never done deals in Washington, which again,
points to our caution in the near term.
CHATTERLEY: I mean, cash positions are low, valuations are the highest they've been since what -- the 2000 era? The short term challenges are vast
if we look at the COVID crisis. When you look across assets, and not just stocks, and you mentioned Bitcoin earlier, there's a feel that things are
ripe for pullback, ripe for correction, at least short term.
EMANUEL: No question about it. And, you know, we just look -- we launched at BTIG coverage of digital assets, right around Thanksgiving, and that was
essentially when Bitcoin was trading at $18,000.00, and we, at that time, put out a yearend 2021 price target of $50,000.00 for Bitcoin and we got a
lot of eyebrows raised at that time as being overly aggressive.
And we look back to the last week or two, some of those same eyebrows are now questioning whether we weren't aggressive enough being that Bitcoin
traded above $41,000.00 over the weekend. And generally, what we find is that markets can carry to extremes in both directions and volatility works,
both to the upside and to the downside, whether it's Bitcoin or equities.
So from our point of view, it's just -- it's more a sentiment readjustment given the fact that a very optimistic scenario in aggregate is priced
across all assets, and you see that with the rise of yield, which should in of itself, be something that limits the action in these other assets and
that's what we're seeing this morning.
CHATTERLEY: Yes, that's a great point. To yours, though, Julian, you are a great predictor of where things are going. You win awards for it. Are you
ready to change that $50,000.00 yearend target for Bitcoin?
EMANUEL: No, not at all. And if you look at Bitcoin volatility, this type of pullback is very, very expected, and from our point of view, again,
regardless of the near term volatility, the fundamental rationales behind a move to digital assets, some of which are an environment, really one of the
biggest, where yields really have no room to move further on the downside.
The Fed has told you it's not going to allow negative interest rates, and by the same token, essentially, we have a lot of deficit spending we are
going to have to fund in the months and years ahead, which is causing the long end of yields to rise.
Those are reasons to move into you know, not just Bitcoin, but to move into international stocks, commodities and so on. It's a broader asset
diversification in what we believe is ultimately going to be a positive year for risk assets.
CHATTERLEY: But you just need a strong stomach basically. So we've gone full circle on this conversation.
EMANUEL: Look, the good news is, if you stuck within your investment thesis last year, you know, we don't think you're going to need quite as
strong a stomach as 2020, but you're still going to need resoluteness.
CHATTERLEY: Fantastic to chat with you, Julian Emanuel, the Chief Equity and Derivatives Strategist at BTIG. Great to have you with us.
All right, still after the break, how America's polarized society got to this point? We're looking inside the social media silos built by Facebook's
and other's own algorithms. That's next.
(COMMERCIAL BREAK)
[09:42:57]
CHATTERLEY: Welcome back to the show. President Trump facing social media silence. He has been cast out at every turn after being banned on Facebook,
Twitter, and even the conservative censorship free app, Parler has been taken offline. It's left many of us around the world asking how America got
to this point.
My next guest says social media played a big hand in last week's violence in Washington, D.C. because their algorithms encourage users to consume
more content agreeable with their own views.
Roger McNamee joins us now. He is cofounder at the private equity firm, Elevation Partners. He's also a former adviser to Facebook CEO, Mark
Zuckerberg. And he's also the author of "Zucked: Waking up to the Facebook Catastrophe." And he's been on the show many times.
Roger, fantastic to have you with us, once again. I saw you quoted elsewhere as saying that taking Trump off platforms like Twitter was an act
of desperation on their part, explain what you mean by that and what you make of what we've seen.
ROGER MCNAMEE, COFOUNDER, ELEVATION PARTNERS: So Julia, you and I have talked now for a couple of years about the challenge that the country faced
in managing the impact of social media having become dominant in our national conversation.
And fundamentally what was going on was that the business interests of internet platforms, which has to do with attention, and getting people
emotionally engaged, we're essentially creating a threat to public health by undermining the pandemic, to democracy by essentially allowing people
like Trump to attack our core democratic values and our processes, as well as the usual issues on privacy and competition.
The context has now completely shifted. Last Wednesday, the President gave a speech which had come after two months of promising his voters that the
election was in fact, falsely decided and therefore they needed to take back the country. That led to incitement of an insurrection where five
people died at the Capitol.
And if you think about the responsibilities of an elected official, you know, it's hard to imagine a crime worse than incitement of insurrection
against another branch of government.
[09:45:10]
MCNAMEE: And so I think from the point of view of internet platforms, suddenly there's no ambiguity. They have been accessories to all of this,
accessories to all of Trump's outrageous behavior and that he kept moving the goalposts.
And we got like a frog in water coming to a boil, we got acclimated to it, and so we normalized all of that behavior. But once you got to last
Wednesday, I think it became obvious to just about everybody in power that whoops, this has gone way too far. And there is real legal jeopardy, and I
think the reason why everything has been shut down is great fear that there is more coming, that there were other plots being hatched on social media,
and they wouldn't have any deniability, they wouldn't have any way to say they didn't know.
CHATTERLEY: I mean, this is the business model, Roger, the more extreme the views, the more eyeballs -- the more eyeballs you have on your social
media platform, the more advertisers want to spend with you. And it's not just big advertisers, it is small businesses.
And we've found that that the business model itself until this moment has been bulletproof, and it probably still will be after this, because
particularly for small businesses, they need it. What happens here, because you wrote an op-ed for "Wired" and you pointed out a statistic from
Facebook's own research, which says, two-thirds, basically, of people that join these extreme groups did so because the algorithm itself within a
platform on Facebook said, hey, you should perhaps join this group, and they did.
MCNAMEE: Yes, I mean, this is the thing, the business model that is small scale didn't cause any problems. But as it became nation scale, as you
know, Facebook became, you know, something bigger than China or bigger than all of Christianity, you know, the impact could be felt everywhere, and
countries were destabilized.
But, Julia, I want to make a really important point here, there are ways to serve the needs of advertisers and the needs of small business that do not
destroy public health or democracy. And I think the debate we're going to have right now is how we're going to get there.
With respect to Parler, the decision has been made, we're just going to get rid of that. And the question, I think, that Facebook and Twitter and
others face is, you know, the range of potential outcomes now includes being shut down. And that debate, I think, is going to require them to be a
lot more transparent, a lot more honest about how they are going to address these problems.
I commend them this week for what they did: Facebook, for pausing Trump, but especially Twitter for shutting him down. At the end of the day,
though, you know, there are real questions about whether the business model as currently practiced is compatible with democracy, and whether it is
compatible with public health.
CHATTERLEY: Is it, Roger?
MCNAMEE: President Biden is coming in. He has got to -- well, I don't know right now. Right now, I would say no. Today, no.
CHATTERLEY: It isn't. I agree.
MCNAMEE: No, I think it has to be -- I think, it has to be changed and the debate that we're going to have -- President Biden has got to solve the
pandemic, and you cannot have the world drowning in disinformation, and you can't have internet platforms profiting from that disinformation and from
all of these scams that are taking place, trying to offer alternatives. All of that stuff is rampant on YouTube, on Facebook, on Instagram, and it's
got to stop.
And I just don't think the companies until this past week showed any awareness of any civic responsibility. And YouTube still hasn't shown any
at all. I mean, barely any. And it's really, in my mind, it's past time, and I'm really hopeful that we can have good conversations now and get to
it.
I think investors have to be part of that. We have to recognize that. We've got to live somewhere, and you know, at the end of the day, there will be
other opportunities in tech. You know, in fact, I think if you use any trust to create the opportunity, there will be something much better than
what we have today. That's always been the case in the past. But you know, we'll have to see.
CHATTERLEY: But even our current antitrust laws can't cope with the tech giants that have been created over the last few years. There is so much in
there.
MCNAMEE: Can I say one more --
CHATTERLEY: Yes.
MCNAMEE: Can I say one more -- I actually think that you're correct that they won't get it all, but they don't need to.
CHATTERLEY: They can do something
MCNAMEE: What I think antitrust can absolutely do is create an environment where alternatives can start and then we can have safety regulations and
privacy regulations that take care of the rest.
CHATTERLEY: I agree. And actually, I was going to get to that point. You want to see more on safety, privacy and competition. Your point was, look,
it's not enough just to break them up, we need to foster competition to give some alternative here that operates better.
Very quickly, Roger, because I have 30 seconds. Even if Congress can do something, do you think the share prices of Twitter, of Facebook, of
Alphabet, the owner of Google impacted negatively or do you think they end up higher?
MCNAMEE: I think they have to be impacted for a period of time because we don't -- there's a great deal of uncertainty and unless they cooperate, the
stocks are going to be subject to massive regulation.
But I do think over the long run, these companies are incredibly well positioned, and history is that antitrust law at least, you know, while it
can be a short term negative, in the long run, even a positive for the target.
[09:50:27]
CHATTERLEY: Yes, I call them too big to tackle earlier. We'll reconvene on this conversation. Roger McNamee, always good to talk to you.
MCNAMEE: Look forward to it.
CHATTERLEY: Thank you. Cofounder at Elevation Partners there.
All right, you're watching FIRST MOVE. More to come.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. Whether it's the pandemic or issues around climate change, there are major reasons why sustainability is
at the forefront of people's minds. It's something a man in Dubai is taking on in a very personal way as he challenges himself to create a local
circular economy for food. As Anna Stewart explains.
(BEGIN VIDEOTAPE)
ANNA STEWART, CNN REPORTER (voice over): The food that landscape architect Phil Dunn cooks is more than just a meal. It's a personal challenge that's
giving a glimpse of how people could consume food in cities around the world.
PHIL DUNN, LANDSCAPE ARCHITECT: I chose this challenge to eat only food that's grown in the sustainable city for 365 days.
STEWART (voice over): To achieve his goal, Dunn is relying on his local community. Based in a Dubai neighborhood called The Sustainable City, he is
growing his own vegetables in urban gardens, bartering rather than buying vital non-local goods like sugar and olive oil with other residents and
catching fish at the community's tank.
DUNN: I have cherry tomatoes, chives, leafy lettuces as many greens as I could eat, really. So that's what my diet consists of.
STEWART (voice over): He's creating a small scale example of circular economy for food where everything is produced, consumed and recycled
locally. This project could pave the way for more sustainable initiatives around the world.
KARIM EL JISR, CHIEF SUSTAINABILITY OFFICER, DIAMOND DEVELOPERS: So the next big idea is really to live, work and thrive locally. So we have
rooftops, we have basements, we have recreational areas, we have public gardens, and then we can repurpose shipping containers to produce berries
and strawberries and tomatoes.
STEWART (voice over): With an increasing awareness on sustainability, circular economies are growing in popularity in cities projected to yield
up to $4.5 trillion in economic growth globally by 2030 according to Accenture.
Following Dunn's concept, Dubai's Sustainable City is pursuing technologies that help forge a circular path.
[09:55:02]
JISR: We've seen a quantum leap in indoor vertical farming. Vertical because I want to now use the space vertically as opposed to horizontally.
That's why it is so fitting to do it in a city.
STEWART (voice over): Some believe, living locally is achievable and hopes that more people will follow suit.
DUNN: I hope that this project is a catalyst for other individuals to start to take control of where their food is grown.
STEWART (voice over): A personal challenge that could also benefit food sustainability and security, Dunn is opening new horizons for the circular
economy in cities.
Anna Stewart, CNN.
(END VIDEOTAPE)
CHATTERLEY: All right, and that just about wraps up the show. I'm Julia Chatterley. Thank you for watching. Stay safe. We'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
