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First Move with Julia Chatterley
President-elect Biden Announces $1.9 Trillion Stimulus Plan; Security Massively Ramped up Ahead of Inauguration; U.S. Adds Tech Giant Xiaomi to Investment Blacklist. Aired 9-10a ET
Aired January 15, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:28]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here's your need to know.
Biden's bet. A $2 trillion plan to tackle COVID and rebuild the U.S. economy.
Capitol clampdown. Thousands of troops stand ready for next week's inauguration.
Banking bonanza. JPMorgan sets the tone with record Q4 profits, and --
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We've been feeling so abandoned and just been so scared about the future, but like, we know we have to open again because we
have -- we placed -- it ruined so many families, lives and traditions and generations and we've been wondering how the heck we are going to do that.
You guys are giving us a miracle.
(END VIDEO CLIP)
CHATTERLEY: We speak to the man raising millions for small business.
It's Friday. Let's make a move.
Welcome once again to FIRST MOVE. Great to have you with us as always. The world is full of emotional stories like that of people who desperately need
help. At least here in the United States, the U.S. President-elect Biden has laid out his sizable response. Let's call it Biden's Bonanza.
In it, $2 trillion aid plan that includes direct aid to families, hefty weekly enhanced benefits and billions in aid for state and local
governments. We've got all the details and analysis coming right up.
The aid package, of course, coming as Americans continue to pull back spending even during the Holiday shopping season. U.S. retail sales falling
for the third straight month in December.
All eyes on what JPMorgan, Citigroup and Wells Fargo say about the U.S. consumer. In particular today, yes, earnings season begun with the usual
Bank Bonanza, too. Mixed results overall, I have to say. Strong numbers for JPMorgan, as I've mentioned, but weak revenues at Citi and Wells.
Citi in fact, with a surprise miss on fixed income trading, too. We will be digging into that later on in the show as well. This deluge of data helping
precious stocks premarket after a soft close yesterday. Call it consolidation, perhaps, part nervousness perhaps over whether the Biden
bill makes it through Senate. Plus, how on earth this is going to be financed?
Are we looking at tax rises? More borrowing will clearly be needed, too. One reason perhaps why U.S. bond yields are moving higher, too.
The tone in Europe, similar, with fresh data showing the U.K. is headed for a double-dip recession. Asia though, bucking the trend, different story
with a mostly positive end to the week as you can see.
There was further ratcheting up of restrictions on investments in Chinese stocks saw smartphone maker Xiaomi slump overnight, too, as you can see
there. We will take you to China for the latest on that, too.
Oh, boy. There are lots to discuss. For now, though, let's begin with more on Biden's fiscal flood. Christine Romans joins me now. Christine, I raise
the question, this spending plan is clearly vast. The big question is, whether he can manage to get it through the Senate even with a slim
majority for the Democrats here?
But you know, I liked the way he framed it as a moral obligation to act.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Yes, you know, look, and he went big. He said he was going to go big and he did go big and
you can see the priorities of this new administration in this COVID rescue plan.
When we tick through the different factors here, you've got $1,400.00 stimulus checks for families. You've got an extension of unemployment
benefits, $400.00 extra a week extending all the way, by the way, into September. So, there is a duration issue here that's pretty interesting,
too.
You've got rental assistance for needy Americans. You've got new help for businesses. You've got a big chunk of money for state and local
governments, and you've got the President-elect asking for a $15.00 minimum wage. He talks about the very people on the frontlines. Frontline workers
who have been hit by the health aspect of this crisis and the financial aspect of the crisis.
Listen to the President talking about -- President-elect rather talking about a $15.00 an hour minimum wage.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT-ELECT OF THE UNITED STATES: Let's make sure our caregivers, mostly women, women of color and immigrants have the same pay
and dignity that they deserve.
(END VIDEO CLIP)
ROMANS: He's got to look here at families, at poverty among children. There is a lot in here where you can see the Biden administration's priorities at
play amidst the pandemic.
CHATTERLEY: Dignity, I think the key word there. When people simply can't go back to work because the economy won't allow it because we haven't
tackled the crisis well enough right now and this was one of the other stand out to me here, a beefed up role for the Federal government here in
the testing response, in doling out vaccines to people who are willing to take them, Christine, rather than letting states get on with it and it
being a bit of a free for all and ensuing chaos I think that we've seen so far.
[09:05:27]
ROMANS: I mean, it is a national vaccination program, that's what they're talking about, a national strategy here. They are talking about getting
money into the hands of the people who are going to be going to be putting shots in arms so that they have gloves, they have the materials they need,
ramping up testing, ramping up vaccination. I mean, top to bottom, a plan here for a national strategy of vaccination.
What we've had so far is a national strategy for vaccine production that is pushing the vaccine to the states, and then from there, you have states
with their mishmash patchwork of ways of trying to get all of their citizens vaccinated.
This is a national strategy from top to bottom and that's a very different attack here from this administration as well.
CHATTERLEY: Absolutely. Christine Romans, thank you so much for that. Have a great weekend.
ROMANS: You, too.
CHATTERLEY: All right, there could be three times more National Guard troops securing next week's inauguration than the number of active duty
U.S. soldiers in Afghanistan, Iraq and Syria combined.
Pete Muntean is in Washington, D.C. where a temporary wall has been installed in front of the Capitol building.
Pete, we had you on the show yesterday and you were showing us the fortress-like nature of the structures that were going up in D.C. The
F.B.I. Director has warned of potential armed protests. They are taking no risks here.
PETE MUNTEAN, CNN CORRESPONDENT: That's right. And the fortress is only getting more fortified here outside of the Capitol. In fact, we are blocks
away.
Yesterday, I showed you this eight-foot fence that has been going up here, but this is also going up, we have learned around the National Mall, not
just here at the Capitol.
And new overnight, crews installed this 12-foot fence based in concrete just outside of the Capitol. Even if an armed protester did make it on to
the other side of this, they would be met with some of the 20,000 armed members of the National Guard who are here.
The Pentagon says it is especially worried about improvised explosive devices or pipe bombs like those found outside the R.N.C. and the D.N.C.
We've learned that the threat here is very real.
Security officials just moved the rehearsal here from Sunday to Monday, because of those new threats.
I want to show you one more thing. This is Pennsylvania Avenue. This is the parade route, from the Capitol to the White House. Now, almost completely
deserted. No bunting, nor Port-a-Potties, no Jumbotron and maybe not much in the way of crowds. This is going to be an inauguration like no other --
Julia.
CHATTERLEY: And it was already going to be an inauguration like no other simply because of the COVID crisis and the need for social distancing and
safety measures here, Pete, but I am just trying to get a sense based on even just four years ago what we saw and the previous times we've seen
inaugurations.
What actually is it going to look like come Wednesday? Is there going to be anybody there other than troops?
MUNTEAN: We know from the head of the Metropolitan Washington Police Department here in D.C. and the mayor, Mayor Muriel Bowser that they are
urging Americans to not come here for the inauguration.
If they had their druthers, this should be almost entirely virtual. We know that some of the plan are proceeding for a socially distant Inauguration on
the National Mall, 35,000 flags, there are spaced out V.I.P. tents. We will see if that remains. Construction was still continuing only hours ago.
But now here, in front of the Capitol, a place where crowds would essentially be filled here, there may not be any come Wednesday.
CHATTERLEY: Yes, it is just incredible scenes. Pete, great to have you with us. Thank you once again. Pete Muntean in D.C. for us there.
President Trump reportedly spending his final days in the White House planning his legal strategy for a Senate impeachment trial. Sources say his
lawyers will use a free speech defense.
John Harwood joins us now. John, Washington clearly preparing there for the arrival of the next President. The outgoing President meanwhile, handling
his final few days as you would expect -- badly.
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Very badly, Julia. He is tormented by the fact that he is going to go down in history as the worst
American President. The only one to be impeached twice by the House of Representatives and he may end up even after leaving office becoming the
only President ever to be convicted by the Senate.
That is certainly not a forgone conclusion and I think you'd have to say looking at the level of support for the President within the Republican
Party still after that January 6th terror attack, it's less than a 50/50 chance, but it is not impossible. So that is why he is preparing for this
trial.
We can envision two defenses for the President, both of which have been signaled by the President himself, and people like Alan Dershowitz who are
advising him. The President has said, well, I didn't intend for violence to take place. That I may have said, yes, we're going to march on the Capitol,
but I wasn't envisioning people violently desecrating the Capitol and attacking police officers, and killing a police officer. None of that was
contemplated by my attempt to rally them to my side on these election arguments.
[09:10:28]
HARWOOD: The other is a constitutional one. Alan Dershowitz has said the Senate lacks the constitutional power to hold a trial for a President not
in office. That is a dubious assertion, because of course, the Senate has contacted post-in-office impeachment trials, not for a President, but for a
Cabinet member that occurred in the 19th Century.
So those are ways the President is going to try to defend himself, but increasingly, Washington is turning away, as you indicated in that report
with Pete, towards the prospect of a new President which will occur next week.
CHATTERLEY: You know, it is quite fascinating, John, this new Congress has got so many issues to deal with. We were just talking about Biden's bill,
and the hope for more financial aid and stimulus measures dealing with the COVID crisis, just to name two, never mind the confirmation of those that
are going to join his Cabinet, too.
John, where does public opinion lie? Does the public, do the American public want this President impeached?
HARWOOD: Yes. In fact, there was a poll that came out with the last 24 hours showing that 56 percent of Americans thought that Trump should be
prohibited from ever running for office again.
Now, that is not at majority position with the Republican Party. It's an overwhelming position with the Democratic Party and a majority of
independents. So that's why you get to 56 percent support.
The critical determinant, of course, is going to be what the level of support and, therefore, the pressure on Republicans to stick with President
Trump, even after those events of January 6th, 93 percent of House Republicans stuck with the President, opposed impeachment. Ten broke ranks.
That's a large number on a historical basis.
No President in an impeachment vote has ever lost that many members of his own party. Nevertheless, overwhelming majority stuck with him. We are
waiting to hear the further illumination of views of Mitch McConnell, the Senate Republican leader. He has held out possibility of voting to convict.
That might influence some of his members.
But you've still got a Republican Party that is very strongly behind this President in the main, and that's going to be a key factor in this trial.
CHATTERLEY: Yes. Not unusual for Mitch McConnell to remain tight-lipped at least, at this stage. We will have to see what next week brings.
John Harwood, great to have you with us. Thank you so much for that.
We are just days before President Trump leaves the White House, the Defense Department adding nine Chinese companies to a U.S. investment blacklist.
Smartphone giant, Xiaomi is one of them. The company recently overtook Apple to become the world's third largest smartphone maker.
David Culver is live in Shanghai with more. The White House itself may be winding down, the U.S. Defense Department certainly not, David. What's the
Chinese response been to this latest move?
DAVID CULVER, CNN CORRESPONDENT: As you can imagine, Julia, they are angry. They are not sitting well with this. They haven't made any move yet to
counter it and perhaps it is because of what you and John were just talking about, and Pete was just talking about and that is President Trump only has
a few more days in office.
But as you point out, his administration, still going hard in targeting Chinese companies, and major companies at that. The nine added by the
Defense Department to this list go on with the 35 that have already been a part of this list, and essentially this bans American investment in these
companies.
So Xiaomi, the most recent one, they are feeling the hit. They dropped more than 10 percent in Hong Kong, stock-wise today. And other companies like
Commack, which is a major aircraft maker here in China, it is state-owned, they are rivals to Airbus and Boeing, or at least that is their intention
ultimately. They, likewise, were put on that list.
They join SMIC, the chipmaker. The join tech giant, Huawei, which of course has been a big part of the Trump administration's target over the past
really several years now. And CNOOC, which is another offshore oil producing company, they were already on that Defense Department list, but
if we are talking about lists, the Commerce Department also has a list of their own and they put CNOOC on that, essentially cutting them off from
American products and supplies.
So this all in collaboration with what the Trump administration has been doing against some of the Chinese apps. We are talking about WeChat Pay and
Alipay and even TikTok, the social media one. And the timing, it is just a few days before, as we mentioned, President-elect Biden becoming President
Biden. The Biden administration having to now deal with this.
So the question is, and this is interesting, Julia: is it really putting the Biden administration in a corner here? Is this going to really tie
their hands when it comes to China? Well, some diplomatic sources I've been speaking with here say it could actually benefit the Biden administration.
They can actually go in now with negotiations with China and there has been a lot of bipartisan support in targeting some of these Chinese companies
for fear of lack of transparency and that they're not getting the full picture especially if Americans are going to invest in these companies.
[09:15:27]
CULVER: The Biden administration could come to the table now with more bargaining chips, if you will, and some leverage here to start peeling back
as they are making deals with the Chinese leadership.
CHATTERLEY: Yes, a smart thought. We want to remove some of these restrictions, guys, but what can you do for me here? It perhaps puts the
Biden administration in a stronger position than you might realize. I mean, they may not be as belligerent perhaps as the Trump administration's
belief, but the perceived wisdom is, they are not going to be as excited to remove some of these restrictions perhaps as the Chinese would like. This
is going to be fascinating to watch what happens here.
CULVER: Right.
CHATTERLEY: David Culver, great to have you with us. Thank you so much for that.
All right, these are some of the stories making headlines around the world. Dramatic video of a woman trapped under a collapsed building after a
powerful 6.2 magnitude earthquake hit Indonesia's Sulawesi Island. Rescuers frantically trying to pull her and other survivors to safety. At least 42
people lost their lives and hundreds more have been injured.
North Korea claims it has built the world's most powerful weapon. State- owned media released these images of what appears to be new ballistic missiles designed to be fired from a submarine. It was unveiled at a
nighttime military parade in Pyongyang presided over by Kim Jong-un.
All right, still ahead on FIRST MOVE, two of the biggest players in the business world in very different ways. In a moment, Mohamed El-Erian gives
us his take on Joe Biden's $1.9 trillion stimulus plan.
And disrupting during a pandemic, we speak to Barstool Sports founder, Dave Portnoy about a new venture that's gaining popularity with A-listers trying
to get back and help. Stay with us. That's next.
(COMMERCIAL BREAK)
[09:20:02]
CHATTERLEY: Welcome back to FIRST MOVE live from New York where stocks are lower premarket. President-elect Biden's near $2 trillion stimulus plan is
massive, but it was well expected, and Congress still, of course, needs to pass it. Expect some pushback especially in the Senate.
Investors perhaps also concerned here about the tax hikes and the government borrowing required to pay for all of that stimulus spending. The
10-year yield is pulling back today but still firmly, as you can see for the 10-year above one percent.
The bond market, too, to some degree perhaps by the Powell promise, too. The Fed Chair sharing investors that he won't be hasty about reducing
support, aka, we cannot afford a second taper tantrum with this pull back, particularly given the ongoing COVID crisis.
Now, with U.S. retail sales lower for a third straight month and weekly jobless claims spiking again, that seems like a prudent strategy. Mohamed
El-Erian joins us now. He is the Chief Economic Adviser at Allianz and the President of Queen's College Cambridge.
Mohamed, fantastic to have you on the show. Happy New Year to you. Talk to me about Joe Biden's --
MOHAMED EL-ERIAN, PRESIDENT, QUEENS' COLLEGE, CAMBRIDGE UNIVERSITY: Happy New Year to you, Julia.
CHATTERLEY: Thank you. Talk to us about Joe Biden's stimulus plan? What do you make of it?
EL-ERIAN: It's as expected and it's needed. You just talked about retail sales. We've had three big data releases in the last week, and all of them
suggest that the economy is slowing much faster than people expected.
There's a view that monetary policy can no longer carry the burden that it has carried, and therefore people are looking for fiscal policy to come in.
I think most economists are welcoming the package. The big question, as you pointed out is, will it get through the Senate?
CHATTERLEY: And do you think it will?
EL-ERIAN: I think most of it will. I think there will be some compromise, but most of it will. It's important to remember there are three elements to
it: relief for those suffering and there are a lot of people suffering. Secondly, helping with the COVID battle. This is really important in order
to restore economic dynamism; and, third, building a better economy, which is infrastructure.
So it is important that elements of all three survive and we don't go back just to relief.
CHATTERLEY: I think it is critically important what you point out as well about a beefed up Federal response. We've talked about it already on the
show to both testing and vaccine delivery in the United States.
I think you only have to look at what's going on in the U.K. at this moment with the greater spread, greater hospitalizations and perhaps worried that
that's a forewarning for what's coming to the United States, too, in a few weeks.
EL-ERIAN: Absolutely. We've been consistently two to four weeks behind the U.K., and the U.K. has gone through a horrific surge in infections, in
hospitalizations and in deaths, and I'm afraid that that's what we are looking at as well.
The U.K. is actually ahead of us, because they have done two things that we need to do. They are slowing down infections, which is positive. And they
are increasing vaccination. And think of it as a race and you've got to act on both. You've got to slow down the problem you're dealing with, and
you've got to accelerate the solution, and I think that that doesn't happen without Federal leadership.
CHATTERLEY: I mentioned the bond market here and I do think this is important if we take a step back from the real world and talk about
investors for a moment here, too. What do you see going on in the bond market? Is it to some degree perhaps valuations and people saying, look, it
actually doesn't make sense for bond yields to be where they are relative to the stock markets at this moment? Reflation? Spending fears?
There is a lot of things going on here that all play into this.
EL-ERIAN: There are a lot of things going on and they're not good: two in particular. People have started realizing that the outlook for bonds is
very asymmetrical, meaning you're more likely to lose money than make money. So buyers are more hesitant.
And the second thing going on is people are keeping an eye on inflation indicators and they are starting to flash yellow. Those two things together
resulted in a significant move in the first week of trading in both the bond yield, but also the shape of the yield curve. Meaning that what the
Fed could not control directly was moving in a way that the Fed did not like.
And that's why this week we've had a number of verbal interventions from Federal officials. The last thing they need is to lose control of the yield
curve.
CHATTERLEY: I mean, we have to -- I mean, we can bring it back to the real economy, understand why this has been so important. It has kept borrowing
rates down for individuals. Credit card repayments down. The mortgage market in particular. People have been refinancing their mortgages at
record low rates and this has all provided at a kicker of desperately needed support to the economy.
EL-ERIAN: Exactly right. There are two interest-sensitive sectors that have been doing well. One is housing, and we've seen what's been going on. And
basically, when you lower mortgage rates, you increase affordability. You can buy more housing for the same amount of mortgage payments that you
make. So that's been positive.
[09:25:25]
EL-ERIAN: And the second one has been things like cars. But what we've learned, Julia, is that when it comes to the rest of the economy, monetary
policy is like pushing on a string. You can push as hard as you want, it doesn't move it the other way.
And that is why it's important to bring in fiscal policy and I want to stress, "and" pro-growth structural reforms.
CHATTERLEY: Yes. We hope to see that, too at some point along the line with this new administration.
Mohamed, just to bring it back to the actual levels that we're looking at because I just showed the 10-year yield in the United States and the 30-
year yield. At what level of those as they back up do you start going, okay, now stocks are going to have a problem even if it is just from a --
you know, the reason to be invested in stocks is because they offer a greater degree of value relative to the return that you get. The lack of
return that you have been getting investing in bonds at this stage.
EL-ERIAN: So I am going to give you what my gut tells me. I think, analytically, it is very hard because you're dealing with psychology, with
behavioral issues. And there is a very deeply ingrained view that there is no alternative to stocks, but if you see the 10-year today that is around
1.10. If you see it getting to 1.40 to 1.50, that would do two things.
One, it would increase the relative attractiveness of bonds so there would be less of a notion of TINA, there was no alternative to equities. And
secondly, a lot of the models that are based on discounted cash flow, it is a fancy way of saying that interest rates play an important role in them,
but a lot of these models that have been signaling a very strong buy for stocks would signal it much weaker.
So, if we get around 1.5 on the 10-year, I think stocks would really struggle.
CHATTERLEY: Will the Federal Reserve be squawking far more loudly even than they are today before that happened?
EL-ERIAN: Oh, yes. I mean, we saw them -- we saw them make a loud noise when we get up to 1.18. Those who have followed this for a long time are
quite surprised by how the Fed is trying to fine tune movements in the bond market now, and it shows you how worried they are.
Remember, they can verbally intervene, which is what they've done. They can change the maturity of what they buy, so they can buy longer dated bonds,
more of them. Or third, and I think that's really the nuclear weapon, which they don't want to use. They can go for what Japan did, which is called
yield curve control. They actually target a certain yield.
I think that would be a big mistake, but they can do more than just verbally intervene.
CHATTERLEY: No, when I listen to the discussion that we are having here, I think it is no surprise that we've seen people searching around for other
alternative assets like digital assets and Bitcoin.
And I know, I am sure you're asked about this all the time. But I do want to get your wisdom on this because I saw you make some comments about just
the structure of the market and at what levels, different kinds of investors are involved, and perhaps what people that are new to something
like Bitcoin need to watch for.
Speaking as a more traditional investor, but that understands both price action and the mentality of investors when they're making an investment,
particularly like the price moves that we've seen. Mohamed, your wisdom on Bitcoin?
EL-ERIAN: So, I don't know if it's wisdom because I bought Bitcoin when they dipped below $5,000.00 and I sold them at $19,000.00 and I thought,
wow. I'm really smart.
CHATTERLEY: That's a profit.
EL-ERIAN: But now, it is all the way up to $40,000.00. So, I not sure if it's wisdom. But this is how people should think.
This time around, because this is the third big surge in Bitcoin prices. This time around, you have a solid foundation of long-term holders. They
have been brought together by fear about inflation, fear about liquidity. Mistrust in institutions. Looking for more risk mitigation assets.
I mean, a whole host of reasons bringing them together. That is a solid foundation. That's why I don't think you'll ever see Bitcoin back down at
$4,000.00.
However, above that is a really big layer of speculation. People realize that Bitcoins can move by four or five percent a day and that of course,
attracts people. We saw last week, fascinating that when the stimulus checks hit people's account, quite a few of those dollars ended up buying
Bitcoins.
So people are speculating on Bitcoin. So I tell people, just be careful, because I can -- I understand the solid foundation, but on top of that,
you've got a big speculator layer, so just make sure you can manage through that. Because as we saw on Sunday-Monday, that price can fall by 20 percent
in 48 hours.
[09:30:19]
CHATTERLEY: Yes. You've got to be prepared for volatility. I mean, there will be people watching this going all the reasons that you suggested are a
reason for buying into Bitcoin still exists and will continue to exist in 2021.
EL-ERIAN: So I do think Bitcoins are going to continue to establish themselves, but it's important to know what they establish themselves as.
They are establishing themselves as part of the payment system. They are establishing themselves as a holding in a portfolio. One percent, two
percent.
What they are not establishing themselves as is a global currency. Central Banks will not allow that to happen. And I think it's important, because
that gives you a boundary of valuation. Clearly not zero, because they exist in the ecosystem. But it is not -- I hear some people saying it's
going to $400,000.00. I don't think so.
So you know, just understand it's a huge range, but understand it's bounded by some realities.
CHATTERLEY: We are out of time. We are going to come back to this conversation. I love having you on this show.
Mohamed El-Erian, thank you so much. It is wisdom -- your wisdom on the show today. The Chief Economic Adviser of Allianz.
Thank you so much.
All right. The market open is next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running this Friday. It is the last trading day of the week before a long Holiday
weekend, and stocks are pretty mixed after an extremely busy premarket session.
Investors are assessing the prospects for the Biden stimulus plan. U.S. retail sales have fallen for a third straight month. I mean, we've also had
a mixed start to earnings season, too.
Plus shares of oil giant ExxonMobil under pressure this morning, as you can see, down more than three percent.
A "Wall Street Journal" report says the S.E.C. has launched an investigation whether the oil giant has overvalued key assets.
[09:35:17]
CHATTERLEY: One positive for the markets are the out performance of economically sensitive small caps. The Russell 2000 now up some nine
percent this month. No other major index comes anywhere near close as you can see. So huge out performance for the small cap stocks on stimulus,
domestic stimulus hopes. That's classic.
Now, this year's first earnings season kicking off with the big banks. JPMorgan Chase reported this morning a record quarterly profit of $12
billion. Citigroup and Wells Fargo also reporting, too.
Paul La Monica joins us now. Paul, let's start with JPMorgan. Oh, boy, these earnings are impressive. Record profits, record net interest income,
record earnings per share.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes. It is great news, obviously, Julia, for JPMorgan Chase. But Jamie Dimon still sounded a bit cautious on
a media call earlier this morning after the results came out.
I think he correctly noted that JPMorgan Chase has been boosting its credit reserves, because they are still a little nervous about the health of the
U.S. economy, which is clearly trying to recover from the depths of the COVID-19 pandemic.
So JPMorgan Chase has more than $30 billion in reserves. Obviously, I think that shows the degree of concern and caution that the bank still has about,
you know, consumer spending and small businesses, even though we might finally get stimulus with that big Biden plan announced last night.
CHATTERLEY: Yes. It is such a great plan. If I look at earnings for all of these banks to some degree, they are flattered by the release of some of
these provisions, but releasing $3 billion worth of provisions in JPMorgan's case when you've got $30 billion worth of reserves, I think
tells you everything and it is all about the predictions for 2021.
What about from Citi and Wells?
LA MONICA: Yes, Citi and Wells both, you know, beat on earnings, but missed on revenue. They don't have as much strength as JPMorgan Chase does on the
Wall Street side of the business, if you will. You know, clearly wedded more to their consumer businesses.
But all three of them, some of the bright spots, obviously, the market surge we saw at the end of last year. That's boosted investment banking. It
has boosted trading revenues for all of those companies, and the one consumer part of banking that is still holding up very well is home loans,
mortgages because the housing market is booming, and Jamie Dimon didn't seem too nervous about housing cooling off in 2021, and I think that's a
sentiment shared by executives at Citi and Wells also. The housing market probably continues to prop up the consumer aspects of these big banks.
CHATTERLEY: Yes, absolutely and we were just talking to Mohamed El-Erian about this and the Federal Reserve is going to be really keen to keep rates
down and continue to support the economy and consumers, too.
Paul La Monica, great to you have with us. Thank you so much for that.
LA MONICA: Thank you.
CHATTERLEY: All right. Coming up after the break, his pizza reviews are pretty legendary.
(BEGIN VIDEO CLIP)
DAVE PORTNOY, FOUNDER, BARSTOOL SPORTS: And by the way, even though they forgot to put in my order, they're talking straight Italian in there. They
got the little cappuccino --
(END VIDEO CLIP)
CHATTERLEY: Now, he is saving pizzerias and a whole lot more. Dave Portnoy, the Barstool Sports founder. His new mission: helping small business owners
survive the pandemic.
After the break, we'll see their immediate reactions. Stick around for this. It's amazing. We're back after this.
(COMMERCIAL BREAK)
[09:41:47]
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: No way.
PORTNOY: Yes, I like how your eyes got big. How are you?
UNIDENTIFIED FEMALE: Oh, Dave, I'm good. Oh, my god, Dave. Thank you so much from the bottom of my heart. My whole family's heart and from
Michigan, from all the small businesses, we thank you very much.
PORTNOY: You're welcome. We're glad to do it. Everyone's glad to do it and I'm glad we could do a call.
UNIDENTIFIED FEMALE: You're angels. This is -- we have been feeling so abandoned.
Thank you so much for taking care of the people that have seemed to be forgotten.
UNIDENTIFIED MALE: Thank you very much. I was planning on closing. I didn't say anything to our staff. This is going to help so much. You don't know.
(END VIDEO CLIP)
CHATTERLEY: The reactions of some very happy small business owners. They are getting regular payments, which aren't loans, and they're not from the
government or a bank, but a fund set up by someone called Dave Portnoy.
If you didn't know, he is a sports fanatic and media personality who founded Barstool Sports. It all began with half a million dollars of his
own money and soon, celebrities piled in with they are own cash, some donating hundreds of thousands of dollars. People like Elon Musk to
footballers Tom Brady and Aaron Rodgers, the chef, Guy Fieri and singer/songwriter Kid Rock.
Right now, the Fund has raised over $25 million. It is supporting over 120 small businesses from barber shops to cafes, and Dave Portnoy joins us now.
Dave, great to have you with us. I watched your launch, because you only did this back in December and I've watched it grow over the last few weeks.
Just talk us through what made you make this decision to step up and directly help people?
PORTNOY: So, I'm in New York City, and in the end of December, they shut down indoor dining and Barstool, the company I started is about two decades
old, and I'm pretty passionate about small business.
You know, I just -- I went on a rant, which I'm prone to do. I like to talk, and I just didn't understand really how these small businesses and
restaurants and bars were going to survive because they are already on their last legs due to the pandemic, which have been going on for so long.
And this seemed like a death blow to me.
It's so cold in New York. If you can't serve your customers and they're getting no money from the government, how are they going to survive? It
seemed like, there was no way for them to go. One of the two thing had to happen. So, I did this rant and then I was challenged.
Basically, a guy, Marcus Lemonis tweeted, Instagrammed at me and was like, "Hey, big mouth, why don't you put your money where your mouth is." And I
sat back and, I was like, you know what? He is right. So that is how this thing started.
Like you said, I put $500,000.00 of my own money into this account and then for the fans of Barstool, I challenged them to donate as well as, I've been
fortunate through kind of the rise of Barstool to meet some affluent, famous, wealthy people and I Twitter shamed them.
And I said -- and I started calling them out on Twitter saying, "Why don't you donate? Why don't you donate?" And at the same time, I called -- I
asked for businesses who needed help, not overall, just help basically to get to the other side. They needed money to get through COVID until the
country opens up.
If you needed help, reach out to us and we try to help. So that was the start of it.
[09:45:18]
CHATTERLEY: I mean, do you personally call these people? I mean, we were just showing a number of those videos. I have watched so many of them now
and the emotion, the relief. They are calling you an angel, miracle worker, because these people truly did not know how their businesses were going to
survive.
To your point, how does that feel?
PORTNOY: You know, it almost -- it is humbling. As crazy as it sounds like, thanking me, I feel kind of weird taking the thanks. It's really all the
people who are donating. But I think what the fund has done, truly, for the first time. I mean, it's commonsense, I think everybody knows if you ask
them, is small business struggling in the United States? Yes. How could it not be?
But these videos have actually put a face to it. For the first time, you're seeing these small business owners across the country and how much they are
suffering and when they get the call, when they see my face, you can literally see the stress just wash away, a lot of them break down and that
is what's causing the donations.
I think people are actually -- it is like, oh, my god. What are we doing here? How are we not helping these people? It is sad, but I think that's
the number one thing that this fund has done.
It wasn't on purpose. Like, the first person I called happened to be a fan of Barstool. So Liz Gonzalez who goes through a lot of e-mails, I mean,
great, I was like, hey, call them and surprise them. When I did, they just broke down.
And I wasn't recording it, but I knew that's the magic. We've got to show people what this means and since then has been kind of a steamroller.
CHATTERLEY: And key here is that for the businesses that you're giving money to, they have to have kept on their employees. You're pretty firm
about that?
PORTNOY: Yes. We have two basic rules that we try to stick to. One, we are looking for successful businesses like whether it be five years, 10 years,
some we have had hundred years like generational businesses. The only thing that changed is the pandemic.
So, you assume once the country opens, they'll go back to being successful and, then, two, we want them to be paying their employees as best they can.
We have owners who have taken mortgages on their houses, they've sold their cars, they are doing whatever they can, so we want to not only help the
small business owner, but also the employees, trying to kill two birds with one stone in that regard.
CHATTERLEY: Yes, and we are showing your website as well where people can contribute to the fund. I believe, if they want to as well.
Dave, you have called out, we mentioned that Tom Brady was very famous, of course, here in the United States, he has contributed. You did on Twitter
call out sports teams in the United States, and said, hey, look, the Patriots are the only people that have contributed here.
I have to say, you said you went on a rant. You often go on a rant. You're a pretty controversial figure, let's say. Some people like your humor, some
people don't. Do you think that's having a negative impact? Do you think people are avoiding or they are just doing their own thing in terms of
donations?
What could help you raise more money? Because the cause here is clearly a good one.
PORTNOY: Yes. You know what? It is unfortunate because this is something that shouldn't be a matter of politics, whether you think I'm funny or not
funny, or you hate me or love me. By the way, the smart people love me, but, anyways --
CHATTERLEY: So, you say.
PORTNOY: Just ask people. Yes, so I say. But even like CNN to be totally honest, I appreciate coming on. I've been reaching out forever because I
think this should have no side issue. This should be a hundred percent everybody is on our side and we're doing this so quickly. Every cent goes
right to a business.
I don't care what the business -- I don't care if they're Republicans, Democrats, black, white, blue, green, we're just trying to help small
business the best we can.
So, you know, maybe some people are avoiding me because of that. I hope not. But the more publicity we get is why I'm like, hey, CNN, put me on.
The more people who see it, this is the fastest, most effective way right now to help businesses, and not in two weeks. I talked to a business
yesterday, the woman was on her way back from the bank shutting down her business and broke down.
This people need it now. We can't wait.
So maybe -- maybe that's why some people haven't donated. But I can promise you, all the money is going to a good cause, good, worthy businesses, and
that's the only agenda: help small business and help people.
CHATTERLEY: You went on a rant as well, regular rants about politicians. At that point, as well, when you stepped up here, we still are not seeing
Congress agree to provide support to small businesses, never mind other people in America that are struggling this stage.
When I was speaking to some people last night just to get a sense of who you are and why you were doing this, they said, talk to him about political
aspirations and what he would be doing if he were President. Dave, here's your platform.
PORTNOY: You know, if I was President, I would probably be hitting my head against the wall being like, these stinks. Politics is broken in this
country. It's so self-serving on both sides. They just -- it's like though memes, I mean, they are just pointing the finger at each other.
[09:50:20]
PORTNOY: It seems like people want to stay in power. People are always looking for their own best interests. This is such a clear black and white,
they need help now issue and everybody is just looking after their own and it stinks, and it is broken, and a lot of people are telling me to run. And
seriously, I would rather jump off a bridge than run for politics.
It doesn't seem they can get anything done. We're getting done with this done. I came up with an idea. We are getting people money with 72 hours.
It's sad what is going on because this is what I think everybody should be able to get help, with the help being instant.
CHATTERLEY: Yes, I am with you. It's sad. Thank you for what you're doing. Keep working on it. We'll get you back and talk about progress and I advise
people to watch some of these videos because they are -- yes, they give me a frog in my throat. Thank you for what you're doing, Dave Portnoy.
PORTNOY: I really appreciate it.
CHATTERLEY: Founder -- no, thank you. Founder of Barstool Sports.
All right, up next, more on the global efforts to contain the pandemic itself. We head to China where we get a firsthand look at the vaccination
center there as concerns are raised about how effective one of China's vaccines really is.
Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. Experts from the W.H.O. are quarantining in Wuhan as they prepare to investigate the origins of COVID-
19. China, meanwhile, pushing ahead with its vaccination program even as trials from Brazil show the Sinovac vaccine may only be 50 percent
effective as opposed to an initial claim of 78 percent effective.
Steven Jiang is in Beijing and took a look at one of the new vaccination centers there.
(BEGIN VIDEOTAPE)
STEVEN JIANG, CNN SENIOR BUREAU PRODUCER: This is a local museum turned into a vaccination facility in Beijing, one of more than 200 such locations
throughout the city. Every day some 3,000 residents like the ones behind me come here to get a shot of a COVID vaccine free of charge made by a state-
owned company, Sinopharm with reported efficacy of 79 percent.
Well, the company has not released details from its clinical trials, raising questions about the apparent lack of transparency not only
regarding this vaccine, but also four others Chinese vaccines in the final stages of clinical trials.
Now, this sentiment was reinforced earlier this week when a Brazilian partner of another Chinese vaccine maker, Sinovac revealed the efficacy of
that vaccine candidate was just above 50 percent, much lower than previously announced.
So such concerns really have global implications as many governments have ordered or have been promised access to large quantities of Chinese
vaccines, so it is going to affect not just the reputation of this industry, but also the Chinese government's so-called vaccines diplomacy
around the world.
[09:55:05]
JIANG: Now, for people here on the ground, they seem unfazed with officials saying they are confident in the safety and effectiveness of Chinese
vaccines. Health authorities say more than 10 million doses have been given to priority groups with very minimal adverse reactions and they continue to
race to inoculate 50 million people with homegrown vaccines ahead of the country's busiest travel season on the Lunar Holiday in mid-February.
Steven Jiang, CNN, Beijing.
(END VIDEOTAPE)
CHATTERLEY: And finally, high flying in every way, shares of GM took off after it unveiled plans for a vehicle that could do the same, a flying
Cadillac, no less, that could one day carry a single passenger on urban hops.
It was unveiled in CGI form at the Consumer Electronic Show which was held virtually this year. GM shares took a leap of more than six percent to a
new record high. Incredible what you can do to a share price with a computer image. Wowsers.
Well, all right, that's it for the show. You've been watching FIRST MOVE. I'm Julia Chatterley. Stay safe. Have a good weekend. We'll see you next
week.
(COMMERCIAL BREAK)
END
