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First Move with Julia Chatterley
The Latest U.S. Jobs Numbers Underline the Need to Act; Deutsche Bank, Germany's Biggest Bank Reports its First Profit in Six Years; Reddit Related Regulation, Janet Yellen Holding Talks on last Week's Volatility. Aired 9-10a ET
Aired February 04, 2021 - 09:00 ET
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[09:00:35]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York. I'm Julia Chatterley. This is FIRST MOVE, and here is your need to know.
Attempting aids. The latest us jobs numbers underline the need to act.
Deutsche is back. Germany's biggest bank reports its first profit in six years.
And Reddit related regulation. Janet Yellen holding talks on last week's volatility.
It's Thursday. Let's make a move.
A warm welcome to all our First Movers around the globe. Great to be with you. What a week it's been already filled with science, stimulus, and Big
Tech succession and of course, the spectacle of speculation. I'm shocked I didn't stumble.
Former TD Ameritrade CEO Joe Moglia joins us later with his thoughts on the Reddit revolt and how potent this force could be in financial markets in
the future.
It's a question Treasury Secretary Janet Yellen will be asking today when she meets a host of U.S. regulators to discuss the recent volatility, a bit
late though to the GameStop game perhaps, the big Reddit names have slid from spectacular to well, snoozy by comparison GameStop and cinema chain,
AMC, a relatively flat premarket. I love it when we're calling 1.7 and 2.1 percent relatively flat.
Wall Street says volatility has also tumbled after last week's Reddit induced spike. The VIX volatility index giving back pretty much this 60
percent gains plus that we saw in last week's trading sessions, too.
Global markets commerce, well, U.S. futures are higher. We can take a look at those. A mixed picture over in Europe. Asia, a little softer, too.
That said shares of Asian auto giants, Hyundai and Kia revved higher on reports they may partner with Apple for a self-driving electric iCar. The
CEO of Volvo Cars will be steering us through their latest results and talking all that tech later in the show, too.
Now, EVs -- electric vehicles maybe somewhere in our future. But for now, we do remain in the pandemic present.
More than 770,000 Americans filing for first time jobless claims last week better than expected, but still an appalling and eye-watering number, a
stark contrast perhaps, too, with the ADP report, the private payroll report that suggested private employers ramped up hiring in the New Year.
Those weekly numbers are falling slowly, but remember, almost 18 million people are still receiving some form of employment assistance.
Let's get to the drivers because Christine Romans joins me now. Christine, it's fascinating. You know, I've been looking at social media and some
people are saying that the data today suggests the level of resilience for the U.S. economy and how you can use the word resilience, quite frankly,
thank goodness, if that's what you think resilience is, when 18 million people are still getting some form of assistance, and that's the bottom
line.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: You know, I mean, absolutely. I mean, there's the level of change, and then there's
just the overall level here and the level here week after week is so high, 46 weeks now of jobless claims that any one of those weeks would have been
a record pre-pandemic, far worse than anything from the Great Recession.
When you add in pandemic programs onto that week, 348,000 people filing for first time benefits under pandemic programs, that's 1.1 million.
So the state jobless claims headline, you know, three weeks in a row has softened a little bit. Fantastic.
Add in the pandemic unemployment share, it is 1.1 million people filing for benefits. There's nothing fantastic about that at all.
These are numbers that have been stubbornly high here and something that concerns me is even as you're seeing some signs of life in other parts of
the American economy, in the services sector for example, you've got the Congressional Budget Office saying that the U.S. economy by size is
expected to return to pre-pandemic levels in the summer, employment is not expected to fully recover until 2024.
That's the need for helping those people out of work for helping people who can't find jobs or whose jobs have been sidelined, whole industries have
been sidelined, because of the pandemic that's where the real need is here.
CHATTERLEY: And that's such a great point. I mean, we've recovered -- what -- three quarters of the growth drop that we saw just 60 percent of the
jobs that were lost and the longer that we are without those jobs, the more stubborn and persistent on unemployment gets.
And this is critical and it is part of the reason when we can't recapture those jobs because we're still mid-pandemic, more stimulus more, financial
aid is required.
[09:05:10]
ROMANS: And, you know, you're seeing in some recent polling, Quinnipiac polling this week that, you know, the majority of Americans believe that
there should be a stimulus package. There should be $1,400.00 stimulus checks, even I think two-thirds of Republicans agree that there should be -
- there should be those $1,400.00 checks, overall checks out per week, of course.
You know, so there's support among people for help here because Main Street knows what's happening. The Wall Street-Main Street disconnect is just epic
at the moment, and I think even the C.B.O. forecasts, you can see that. The economy is going to come back, but it could come back without millions of
people feeling the recovery and that's a real problem.
CHATTERLEY: I love your point as well about that Quinnipiac poll. I mean, we're talking about politicians out of step with their constituents here
for the Republicans that are pushing back here.
I guess it must mean that the midterms are two years away. That time will slip away.
Christine Romans, thank you. Naughty.
All right, Germany's biggest lender, Deutsche Bank posting its first annual profits since 2014. The turnaround driven by its investment banking
division. Anna Stewart joins us now with all the details.
Anna, I was pouring over some of these numbers, basically the revenues in their investment banking division, more than offsetting all the credit
provisions, the potential credit losses, loan losses, credit card losses that they were perhaps preparing for here. It's a crisis while managed.
ANNA STEWART, CNN REPORTER: Well managed and you're right, the investment bank really pushed up the entire earnings up 32 percent in revenue for the
year, no growth for any of the other business units, though.
So while their restructuring plan is well underway, it's been going for about a year and a half is that down to this, is it also down to the
trading environment we've seen? Lots of volatility in the last year, high trading volumes.
The investment bank, of course, ironically, is where they are really cutting. That's the target of Deutsche Bank's big restructuring plan.
Speaking to analysts today, Julia, analysts are very happy with these earnings. They do you think it points in the right direction? But is it
sustainable going forwards?
CHATTERLEY: That's a great question, and even the CFO of Deutsche was saying, look, we expect less volatility in 2021. So it is an important
question for them.
Another important question, it's probably one that they really don't want to answer any more on is the relationship between Deutsche Bank and the
Trump family.
Now, we know and they said it in January, we're not going to do any more business with them going forward, but what can you tell me about reports of
people leaving Deutsche Bank and those close -- with close relationship with the Trump family?
STEWART: Yes, this is perhaps the story that Deutsche Bank doesn't want to talk about today and we haven't actually had comment from them yet.
We are learning a little bit more about two of the private bankers that Deutsche who left at the end of last year. They lent to Donald Trump and
Jared Kushner. They are Rosemary Vrablic and Dominic Scalzi.
Now, we're learning from regulatory filings that one of the reasons they left or -- and I use the language in the filing -- they were permitted to
resign, Julia, following allegations about an unauthorized real estate deal.
In the last few minutes, I have actually had a little bit more detail on this, it was the purchase of an apartment at 715 Park Avenue in 2013. And
it was from a company that Kushner was a minority investor in. The other allegation is that the bankers were alleged to have engaged in the
formation of an unapproved outside entity to hold this investment.
Now, as I said, we haven't had any comment from Deutsche Bank on this yet, it's not good for their reputation. But as you said, from a source speaking
to CNN last month, we know Deutsche Bank doesn't want to do any future business with the Trump Organization, but they are still owed around $340
million. That doesn't bode well if you consider that, well, hotels and golf resorts aren't faring too well, are they, Julia?
CHATTERLEY: Yes. Poignant points to be making, Anna Stewart, as always, thank you so much for that.
All right now to Wuhan, China, the original epicenter of the coronavirus outbreak. A team of experts from the World Health Organization are there
right now looking for clues about the origin of COVID-19.
CNN's David Culver spoke with one of the scientists in the mission and he joins us now from Shanghai.
Great to have you with us, David, as always. What more can you tell us about what they're saying? Clearly, it is early days.
DAVID CULVER, CNN CORRESPONDENT: Hey there, Julia. Good to be with you as well. You've got to look at the timing of all of this.
Here we are, 12 months after the City of Wuhan went on lockdown, more than a year after what was believed to be the original ground zero, the Huanan
Seafood Market was closed, and so from a scientific perspective, one of the questions I asked the scientist who is part of the W.H.O. field team is,
has that all been damaging? The amount of time that it's taken to get on the ground, plus the fact that a lot of the evidence, if you will,
including the market was cleaned.
The Chinese authorities did that, in their words to, prevent against any festering of the virus and potential spread from that original ground zero
or what was suspected to be just that.
His response is that he feels as though they are still getting good solid information on the ground and that they feel as though it's helping them
get closer to the origins of COVID-19.
[09:10:10]
(BEGIN VIDEOTAPE)
CULVER (voice over): A caravan of vehicles pulling into the Wuhan Institute of neurology. Onboard, international experts representing the
World Health Organization, their mission: to find the origin of COVID-19.
PETER DASZAK, W.H.O. MISSION EXPERT: What we're trying to do right now at this stage is keep an open mind about every possibility.
CULVER (voice over): CNN connected with zoologists Peter Daszak. He is part of the source tracing assignment here in China. Speaking to us from
his hotel room in Wuhan, he had just visited the Virology Institute, highly secured and highly controversial lab.
It is from here that former U.S. President Donald Trump and his Secretary of State Mike Pompeo have alleged without any evidence the virus
originated.
DONALD TRUMP, FORMER PRESIDENT OF THE UNITED STATES: I think they made a horrible mistake and they didn't want to admit it.
CULVER (voice over): China has rejected the claim.
DASZAK: It was good to see the lab and you know, you confirmed your suspicions that it's an incredibly well-built, well-designed, well-managed
lab.
CULVER (voice over): Members of the scientific community have said that Daszak has a conflict of interest due to his close ties to the Wuhan
Institute of Virology and its leading scientist, Shi Zhengli.
His video, shot in 2014, shows the pair inside the Institute examining coronavirus samples collected from bats. They've jointly published several
scientific research papers.
DASZAK: She speaks very openly and quite directly, and often goes counter to this sort of political trend.
CULVER (voice over): Shi Zhengli is known as "Bat Woman" in China. She has reached celebrity status.
Since the SARS outbreak in 2003, she has focused her research on bats and the various coronaviruses they carry, but after COVID-19 was first detected
in Wuhan, less than 10 miles from where her lab is located, speculation surfaced that the virus leaked from her facility.
MIKE POMPEO, FORMER U.S. SECRETARY OF STATE: I have seen evidence that this likely came from the Wuhan Institute of Virology.
CULVER (voice over): The Trump administration provided no evidence to support those claims.
CULVER (on camera): Do you think it's possible this virus was engineered within that lab and leaked?
DASZAK: There's no evidence of that at all. But it is something that we talked about with people in the Wuhan lab, and got really honest and frank
and good informative answers to, because they themselves brought this up.
Conspiracies around lab leaks that they feel strongly have no grounds.
CULVER (voice over): Swarmed by media throughout their site visits, the W.H.O. field team also inspected the hospitals where the early COVID-19
patients were treated, along with the now infamous Huanan Seafood Market.
CULVER (on camera): This place had a lot of attention over the past 12 months paid to it. There was a lot of concern that perhaps the virus was
still festering in spots, so the Chinese authorities essentially wiped it clean.
CULVER (voice over): Daszak and other experts agree it is most likely that the virus originated from wildlife, though without ruling it out, he
stopped short of concluding it started in the market or even in Wuhan.
CNN obtained these images from December 2019. They show a variety of caged creatures inside the now shuttered seafood market.
DASZAK: We're still piecing together evidence. So we're looking at the animal evidence. You know, what was sold the market? Where did it come
from? What types of animals are they -- the ones that could carry coronaviruses?
CULVER (voice over): China's state media has also suggested without evidence the virus might have been imported into the city on frozen foods.
A claim leading health experts have dismissed as completely groundless, but it is an origin theory Daszak is not ruling out.
The team's field study expected to continue into next week.
(END VIDEOTAPE)
CULVER (on camera): Julia, one of the questions I asked Daszak was about the access because we've been on government trips here where essentially
they say look this way, don't look that way. And I said how free flowing is it? And how much structure has been put in place by the Chinese versus the
W.H.O. asking for it and the agenda to be set?
He says prior to this visit, the W.H.O. experts put forth the things that they wanted to see, the information they wanted access to, and he said the
Chinese have come up with an agenda that aligns exactly along with that.
He says this is not a rogue trip, so they can't just go off to different places that they want to, however, he says that people are being candid
with him, that there's transparency. Of course, we need to point out this is one expert. There are some 13 more who may have very different opinions
and different experiences after this is all said and done.
CHATTERLEY: Yes, vital questions to be asked, David over transparency and also to your first point, which was critical as well: what can you achieve
one year later?
Fantastic work, as always.
CULVER: Right.
CHATTERLEY: Thank you.
All right, let me bring you up to speed now with some of the other stories making headlines around the world. Myanmar's ruling generals are
restricting access to Facebook and other social media, tightening the grip after seizing power in a coup.
Multiple reports say police have filed charges against Aung San Suu Kyi accusing her of illegally importing walkie-talkies. She is being detained
until at least February 15.
[09:15:17]
CHATTERLEY: A Tokyo Olympics organizing official is apologizing for sexist remarks suggesting that women talk too much. Yoshiro Mori reportedly said
he was concerned Board meetings would go on too long when asked about increasing the number of female members. Mori said he was sorry to the
people he made feel unpleasant.
Still to come on FIRST MOVE, the retail investor revolution, the former CEO of TD Ameritrade on the movement behind the GameStop rally.
And as the nation scramble for COVID vaccines, the Serum Institute of India says it will provide more than a billion doses for UNICEF. That's all
coming up on the show. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE live from New York where tech is set to power high in early trading after flirting with record highs in the
previous session, lots to occupy investors in the medium term from leadership change at Amazon, with CEO Jeff Bezos stepping down to what
measures a democratically-controlled Congress will take to tackle things like competition due to greater scrutiny of tech mergers.
Reports the E.U. and U.K. regulators are probing NVIDIA's $40 billion bid for U.K. chip-maker Arm. All of this, as U.S. regulators meet today to
discuss last week's volatility, the rise and fall of stocks like GameStop and AMC and the role of brokers like Robinhood and others.
Joining us now is Joe Moglia. He is former CEO at online broker, TD Ameritrade. Joe, great to have you with us.
JOE MOGLIA. FORMER CEO, TD AMERITRADE: Good morning, Julia.
CHATTERLEY: Financial markets go through phases -- good morning.
Financial markets go through phases, transformations, shift, new customer groups, how potent and important whether you're a regulator or a broker, or
a financial market player is this new wave of social media connected investors?
[09:20:04]
MOGLIA: Well, number one, it is very, very important, but the reality is we've had individuals, you know, buying or selling stock on the internet
since the 1990s, and the enthusiasm for that has just grown and grown and grown.
I think what Barstools have done or what Wall Street chats have done, has been able to, in effect, aggregate the enthusiasm of the individual
investors, specifically the day trader to get involved with a very specific trade which what they did the other day, which had a tremendous impact in
terms of what's going on.
So now, it's an important part of the market. But as you said, there's so many different parts of the market. It is just one part of it.
CHATTERLEY: Day favor to aggregate -- important word and the choice of word selection there -- their views on what to do or what not to do. At the
same time, we've seen zero commission access to the market, and we call this the democratization of finance.
Access to financial markets into financial products is one thing, and I agree that's been democratized in a way. What necessarily hasn't been is
education, about how to invest, who else is out there? What's legal and what isn't?
MOGLIA: You know, number one, I could not agree more. I think you've got to look at it long along the lines of basically the three types of traders.
You've got the long term investor that is -- has a much longer holding period. They need to have a disciplined and sophisticated, well-thought out
strategy. Places like Schwab are really focused on that.
Then you've got the active trader, people that, you know, may very well have a long term strategy as well, but they are also going to be involved
with buying and selling stocks over time.
Like Ameritrade was really good at that. That's part of the reason why Schwab and Ameritrade came together.
Then you have the day trader, that's really the phenomenon we're talking about right now that Robinhood would make sure they are paying attention
to.
If you've got serious active traders and you've got serious long-term investors, you have to have education for them, you have to.
With regard to that day trader, frankly, you have to have education for them. And I don't think it exists yet, Julia. So the issue with the trade
the other day wasn't what happened with the trade. But when trading halted, when the market started turning around and GameStop started coming back
off.
If those day traders were aware of that ahead of time, they would have done a much better job of protecting themselves. So education associated with a
trade like that, what happens when it turns around? What's the real impact of the leverage? What's actually going on behind the scenes with regards to
the clearing and therefore, if you understand that, you recognize there's a lot of volatility, trading might be halted in a particular stop.
I could not agree more. Education for the day trader is critical. I'm not positive that they're getting that now.
CHATTERLEY: What about education for the brokers and how they behave as well, and the information and the communication that they provide? I mean,
you as an expert, leading one of these firms in the past, do you look at what Robinhood did and the way that they communicated what they did, and
perhaps the way they communicated before this volatility happened, and I appreciate they are a relatively new company, do you think they messed up
here, too?
MOGLIA: I wouldn't go as far as saying that they messed up. I think because they are relatively new companies, something like this hasn't
happened to them before.
They've also been only self-clearing for the last couple of years, and that's a pretty delicate business with a lot of risk -- with a lot of
technology and a lot of regulations around it. So I think in terms of Robinhood's model, when they want to -- when they want to cater in effect
to the day trader, they encourage that type of activity.
Their next step is to then approach the day trader, their client base with the level of understanding and education that we just referenced. That's
one of the next things they have to do.
Now places like Ameritrade, Schwab, ETrade, and then the larger brokerage firms, Morgan Stanley and JPMorgan, they all do that. They provide that
education.
But for the day trader, that's not quite there yet.
CHATTERLEY: Do the regulators need to play a role in this, Joe? Or does it come down to an individual investor to say, you know, I'm going to choose
where I go here in order to perhaps get better educated and be communicated with it in a different way?
MOGLIA: Well, Julia, the individual investor surely has the right to make those decisions. They are free to make those decisions.
With regard to regulators, first of all, anytime you have something significant like this happens, there has got to be some sort of
investigation behind the scenes, was there anything that should not -- that should not have been taking place that did take place? They'll do that.
But in terms of what they can do right now, Janet Yellen is actually meeting with heads of regulatory agencies today to talk about that very
topic.
So she probably heard that from you, and what they need to look at, I think right away is for example, you've got settlement that takes place in two
days.
So for the audience, you do a trade today, but it doesn't settle for a couple of days.
Well, with blockchain technology and all the technology we have, there's no reason we can't do simultaneous trading settlement. So that's one of the
things that they can look at.
The other thing that they can look at is: should there be a little bit better guidance around shorts? And there are some things that we might be
able to do to soften the volatility with regard to the market. So yes, I think there are things that they can do. And it's good to start to look at
those right away.
[09:25:27]
CHATTERLEY: Oh, Joe, you mentioned the magic word there, which is blockchain technology. You are going to come back and talk to us about that
because I couldn't agree more. There are way more efficient ways that we can tackle trade settlement, quite frankly.
But I want to ask you very quickly about the zero commission model here. Do you think it still holds, post the events of the last week, particularly
the business model for brokers like Robinhood where they hand over these trades to a market maker and they get paid money in order to do that?
You know, there is nothing free in life, and if you want to get free access to these financial products, there has to be, again, some offset here where
they make money some other way. And that's part of their fury, I think, that we've seen in the last week from these investors.
MOGLIA: I think that's very much the case. Now, what you just said, though, Julia, you've got a lot of components in that. So yes, this free
trading itself is: does that make sense? You've got how about your reference payment portfolio, they didn't use that term.
So first of all, as far as free trading goes, free trading does miss it. Chuck Schwab said 25 years ago, one day, we will have free commissions and
today, we have free commissions.
Now with regard to free commissions, if you're -- with regard to the business model, if you just have free commissions, there's got to be other
ways where you can also make money that can get the payment for default, but it could also deal with different revenue streams, and a lot has to do
with what kind of asset base you have in your balance sheet. So all of those as part of that for the brokerage side.
Now you go back to the individual investor side, the fact that you've got an opportunity to do -- to have free trades, I think is a wonderful thing.
But what you need with those free trades to make good decisions is the education that we talked about.
CHATTERLEY: Right.
MOGLIA: For the day trader, that doesn't really exist.
CHATTERLEY: Yes, you've got to understand where the money is coming from.
MOGLIA: The active trader -- that does.
CHATTERLEY: Yes, you've got to understand --
MOGLIA: Sorry?
CHATTERLEY: You've got to understand who is paying the bill for your free access to financial products. I guess, you're right. We've gone full circle
and it is about people understanding --
MOGLIA: Well, the individual investor, they are not -- they are getting it for free and we get --
CHATTERLEY: Precisely.
MOGLIA: So you're talking about payment for it, they are definitely getting it for free. The argument there is the payment for the full thing.
Oh, you're actually -- you're giving away some of your money because the market makers are giving the brokerage firm some money. Do we have a minute
to put this in perspective?
CHATTERLEY: We don't because I want to ask you something else.
MOGLIA: Okay.
CHATTERLEY: You're going to come back and -- you're going to come back and talk to me, but I think we agree.
MOGLIA: All right, I will come back then.
CHATTERLEY: I think we agree, it's that you've got to understand why you're getting free access to these financial products because the company,
the broker themselves is making money somewhere else.
You are a celebrated football coach, and I want to ask you whether you have any advice for Tom Brady, because we are heading into Super Bowl weekend.
It would be criminal of me not to ask you -- Joe.
MOGLIA: Tom Brady is 43 years old. He has been playing football for 21 or 22 years. He will probably go down as the greatest quarterback in the
history of the game.
I'm not quite sure I can give Tom Brady any advice going into the game, but I will.
Tom, before the game, you've got to settle down. You've got to get a good night's sleep, then you've got to go and keep a clear head and execute on
game day.
CHATTERLEY: Awesome. The coach always get the last word.
MOGLIA: That will help. Now, I am going to bed on Tampa Bay.
CHATTERLEY: Joe, great to have you with us. Come back and talk to me, please, especially on efficiency and how we can improve settlement in
trades because this is so important.
MOGLIA: I look forward to that.
CHATTERLEY: Yes. Joe, great to have you with us.
MOGLIA: Thank you.
CHATTERLEY: Former CEO of TD Ameritrade. Thank you.
All right, the market opens next.
(COMMERCIAL BREAK)
[09:31:55]
CHATTERLEY: Welcome back to FIRST MOVE. The opening bell has sounded on Wall Street and we've got a higher open across the board for U.S. stocks.
U.S. initial jobless claims remain highly elevated. However, with more than 770,000 people filing last week for first time claims ahead of tomorrow's
all-important jobs report. It is nothing we don't already know.
eBay helping give tech a boost. Shares of the online retailer are rallying after strong Q4 numbers, up more than 11 percent so far in the session.
Strong earnings helped propel Google parent company, Alphabet, to record highs yesterday, too.
Wow. Look at that chart.
All right. The Serum Institute of India is the world's biggest manufacturer of vaccines and that's the sort of scale that's required. In its latest
supply deal, 1.1 billion COVID-19 vaccine doses for UNICEF to protect people in the world's poorest countries.
The Serum Institute will act as manufacturer for the AstraZeneca and Novavax designed vaccines, which UNICEF will get at a cost of around $3.00
a dose.
I'm very excited to say, joining us now is Adar Poonawalla. He is the CEO and Executive Director of the Serum Institute of India.
Brilliant to have you on the show, once again, that is a huge deal. Give us a sense of scale and how you're managing to do it with such a low price.
ADAR POONAWALLA, CEO AND EXECUTIVE DIRECTOR, SERUM INSTITUTE OF INDIA: Nice to be with you again, Julia. You know, we've been making a billion and
a half doses a year anyway every year as our normal business and vaccines supply to Africa, South America and so many other nations.
So when we had to reach a capacity and future sacrifices were made for new product launches, that is how we were able to rejig our capacities in a
very short amount of time, you know, to make these vaccines and we also took a lot of risk and started stockpiling the product ahead of time before
the license was granted.
And when we made that bet, we didn't know if Novavax, the AZ-Oxford product, anything would work, and that's why we have so many doses right
now in stock that we can, you know, help out a lot of nations with.
CHATTERLEY: I mean, you guys were organized. This is what you do.
I want to get your wisdom and your perspective on why there is such a scramble going on at this moment for vaccines beyond what was already
expected.
I mean, I want to ask you about Europe, but I just first want to start by asking, why are we in the position globally that we're in?
POONAWALLA: So two or three reasons. Firstly, vaccine manufacturing is extremely complicated. I think a lot of people underestimated that. They
didn't manage people's expectations and we all gave forward thinking forecasts on the timelines that we will be able to do things on.
And under estimating, you know, the issues that do come with handling biologicals, the timelines and the claims that everybody made is now one of
the reasons why we are in the situation that we're in and you're going to see further delays unless we address one very serious issue.
[09:35:08]
POONAWALLA: So whilst manufacturers like us have been busy making vaccines for the last eight to nine months, it's a shame that the regulators
globally, and when I mean, regulators, I'm talking about the U.S., Europe, U.K., W.H.O. and other countries, all the regulators of all these
countries, they very well knew that there are only a few 10 or 15 countries, which would be manufacturing the product, maybe 20 countries.
CHATTERLEY: Right.
POONAWALLA: Why couldn't we have had a global harmonization of regulation? Today, I have a stockpile in my warehouse of 70 million doses, yet, I can
only give it to India and a few select countries because of it not being licensed in other countries. Why couldn't we have had all that ready, and
harmonized for the last eight months?
We are still waiting for a W.H.O. approval. We've submitted the dossier, then we will go to the U.K., then maybe Europe. That's all adding time.
Now, that's for me; then you multiply that with all the delays other manufacturers are going to face in that. So this is something we can still
fix globally if all the regulators will come on one page, on one platform and say that look, this is the standard information and documentation which
we need, you know, and then that makes life so much easier and quicker to supply to all these countries.
CHATTERLEY: Why aren't we doing this? Because you're at the heart, you see exactly -- and you actually had to your point a year, a nine-month run in
to anticipate the problems here. I vividly remember you saying to me, we're not going to have enough vaccines until 2024 -- until 2024, and that made
huge headlines because people thought you were a skeptic. But you saw the problems.
Are people coming together now, at least, to recognize this or to your point, are you still sitting with doses you can't use?
POONAWALLA: Well, absolutely, people realize this now. It's very clear, it's out in the open, and I think as I said, one area to fix this global
harmonization of regulatory, you know, for example, today, we can't give it to the U.S. even if they want to take it because it's not approved there.
So I mean, when I say 2024, I was being realistic. Everyone else pounced on me and said, oh, you know, how can that be when we're ready to give it
here? And I said, okay, fine. Show it. You know, great, good luck to you if you can.
And that's the amount of time it's going to take if we're talking about more than 10 billion doses being rolled out because let's look at 2021.
From everyone you've spoken to and the forecast they've given, let's even assume that they will be able to deliver what they claim, you know, that's
nowhere close to the doses that we need. So it's going to take a few years.
CHATTERLEY: Have you spoken to the E.U. over potentially supplying doses to them?
POONAWALLA: Well, we've spoken to the U.K. and we're hoping that the E.U. accepts the U.K. M.H.R.A. approval process, which you know, it's all the
same everywhere in the world. It's the same information and data that's going out. So, you know, it's just a different format and few other
expectations.
So we're going with the U.K. right now. The E.U. hasn't approached us, officially. But you know, it's a matter of time until they do, and we hope
that to save time, we just go through the U.K. process, which they would respect being also a country which adheres to all the same standards.
And, you know, maybe we'll supply to them as well, but they haven't officially approached us yet.
CHATTERLEY: I mean, it all goes back to the same thing, doesn't it? Better coordination with regulators. Do you understand some of the concern,
though, that various nations have with skepticism, the speed at which this was done? You can only go as far as public opinion and confidence perhaps
will allow.
POONAWALLA: Yes, I mean, if you look at the licenses and permissions that have been given, it is an emergency use license. It's not a full license.
So that means that you still have to gather more data from trials and other things and follow ups from people, the patients you've vaccinated, and you
give more data to the regulator, which is absolutely correct because you know, we've done this in a very short span of time, but in a pandemic,
what's the alternative?
If you wait for a full and complete trial and follow up of six months or a year on a patient, then you know, everybody is going to have to wait
another year for vaccines.
So everyone rightly said, let us go for an emergency use licensure, and then, you know, continue the follow up and data on everything where we get
more information on safety and efficacy on vaccines.
And I mean, you know, for example, now you've got some data coming out to show that some of these vaccines are even going to prevent infection and
transmission, which is a big deal because initially, when we start, you know, we were paranoid that okay even if you get vaccinated you'll be safe,
but you might still be able to infect your loved ones or anyone else.
[09:40:10]
CHATTERLEY: I mean, this is huge news. I agree with you. We keep our fingers crossed that that's the case for all of these vaccines.
I want to just ask you, because I haven't already about the recent fire. I mean, you mentioned the stockpiles and we were gratified to hear that none
of your supplies had been damaged. But you did lose a number of colleagues in that fire, which is clearly heartbreaking all around.
Obviously, our thoughts go to the families involved. I just wanted to ask how your staff are doing?
POONAWALLA: No, thank you for that. You know, it was a huge shock and tragedy, an unfortunate incident. It was an accident. And, you know, we're
over it now finally.
Very fortunately, some of the floors that were damaged were not being used for COVID-19 vaccines, which was a huge relief also. There was damage to
other vaccines, which we are now managing and rejigging. But -- and there will be some delays on those supplies, but nothing too significant.
The main tragedy was the loss of life, which you know, we can't get back now, but fortunately, we've got multiple different buildings and filling
lines and areas and excess capacity, so it won't impact the supply position of the COVID-19 vaccines.
CHATTERLEY: We thank you for all the work that you and your team are doing. It's incredible. Thank you and stay in touch, please.
We want to hear more progress.
POONAWALLA: Thank you.
CHATTERLEY: Adar Poonawalla there, the CEO and Executive Director of the Serum Institute of India. Great to chat with you, sir, as always. Thank
you.
We are back after this.
(COMMERCIAL BREAK)
[09:45:00]
CHATTERLEY: It was Volvo's best ever second half of the year for profits and sales and in China, sales soared over 90 percent in January, year-on-
year that more than compensated for losses from earlier shutdowns.
More on that shortly, for now, more than 8,000 people in 10 of Japan's prefectures are waiting for a bed in a COVID hospital or isolation
facility.
It shows how Japan's health care system is straining under the surge of infection.
CNN's Selina Wang reports.
(BEGIN VIDEOTAPE)
SELINA WANG, CNN CORRESPONDENT (voice over): When Sue became sick with COVID-19, she felt helpless. A single mother of two, she said she had no
option but to isolate herself in this tiny room. Her kids aged three and six slept alone in this living room for nearly two weeks.
Sue who asked not to be identified by her real name because the stigma of COVID-19 still carries in Japan says that since she has asthma and chronic
bronchitis, her symptoms could suddenly turn worse.
"I wondered if I would wake up tomorrow." She had a persistent high fever and trouble breathing. But she said she wasn't able to get guidance from
her public health center in Hyogo Prefecture.
The Health Center couldn't speak directly to her case, but said that though they tried to contact isolating patients daily, the Holidays were
incredibly busy.
Japan is dealing with its worst wave of COVID-19 since the pandemic began. Hospitals are overwhelmed in some places. Seriously ill patients are being
turned away.
Japan has just extended its state of emergency in 10 prefectures for another month. Sue says she was unable to find anyone to take care of her
children. Thankfully, Sue recovered, but not without emotional scars.
"I felt like I was abandoning my children. I was feeling sick in terrible condition, but I felt more pain leaving my children alone."
More than 8,000 people across 10 prefectures who have tested positive for COVID are waiting for a hospital bed or space at an isolation center. That
means more people are dying at home from COVID.
WANG (on camera): Is it unthinkable that in Japan, a country with national health insurance that so many people are waiting to get into a hospital?
DR. KENTARO IWATA, KOBE UNIVERSITY HOSPITAL: Tens of thousands of people with COVID-19 have to stay home and they cannot have access to the
healthcare system.
They can't be hospitalized and they can't even see doctors, and that's a very harsh reality.
WANG (voice over): Cases in Japan have more than doubled in the past two months to more than 390,000 cases.
Prime Minister Yoshihide Suga even made a rare apology for the country's inability to provide the necessary care.
WANG (on camera): What exactly went wrong in Japan's response to the pandemic?
IWATA: We didn't prepare the healthcare systems for infections and this is a result of it.
Dr. Hideo Maeda is the head of a public health center in Kita Ward and staff members have quadrupled to 40 since the pandemic started, but it's
still not enough. The calls are nonstop. In his ward alone, every day, dozens of patients are waiting for hospital space.
HIDEO MAEDA, DIRECTOR, KITA WARD HEALTH CENTER (through translator): Many staff members are working every day until midnight, on weekends and
holidays. We are exhausted and overwhelmed with stress.
WANG (voice over): Yet Japanese officials insist that the Tokyo Olympic Games will still be held this summer.
Sue says she still has some lingering symptoms from COVID, but she is just thankful to be able to hold her children again.
When her isolation ended, the first thing they said to her was "Ma, please hug me."
Selena Wang, CNN, Tokyo.
(END VIDEOTAPE)
CHATTERLEY: More after this. Stay with us.
(COMMERCIAL BREAK)
[09:51:01]
CHATTERLEY: Welcome back to the show. Redefining America's relationship with the rest of the world in focus today as U.S. President Joe Biden lays
out his foreign policy plan in his speech at the State Department in a few hours' time.
It has been described as restoring America's place in the world.
John Harwood joins me now. John, great to have you with us. No test in -- a rare shortage of tests quite frankly in recent days. We've had the Alexei
Navalny prisoning in Russia, a coup in in Myanmar, how much detail do we get on these relationships from Joe Biden today? Or is it going to be broad
brush?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: I think it's likely to be broad brush, Julia. I think the emphasis of Joe Biden and Tony Blinken, his
new Secretary of State is going to be restoring as you said, America's place in the world.
But the way to do that in Joe Biden's view is by restoring America's alliances, using multilateral approaches to solve problems.
So where Donald Trump called into question the U.S. commitment to NATO, and its willingness to follow through on its Article V commitments to defend
member nations, Joe Biden is going to emphasize the importance of NATO. NATO is a means of confronting Vladimir Putin for his behavior.
The same is true with respect to China, for example, Donald Trump withdrew from the Trans-Pacific Partnership, which was a way in which the United
States and Western Allies were going to try to constrain China's behavior and compete with China economically.
Joe Biden has not rejoined that partnership, but he is going to try to revive those alliances. And the test, of course, is going to be the
results. Does the approach by Joe Biden have a greater success in changing China's behavior than Donald Trump's?
That is going to be a results test that we'll see over time. Same is true with respect to Russia and Vladimir Putin.
CHATTERLEY: What do you think the top priority is for him, John? We have no end -- have issues to deal with on the domestic front. What has to be
the top priority internationally beyond all the things he has to focus on at home?
HARWOOD: Well, I think long term, it's going to be the United States relationship with China. It is competition with China economically,
America's desire not to cede power to China in the Pacific region.
Remember, President Obama emphasized what he called the pivot to Asia that was interrupted by the Trump presidency and the Trans-Pacific Partnership
went ahead with other member countries without the United States.
Joe Biden has indicated he is going to be slow to go to new trade agreements for a while, but ultimately, the ability to compete with China
to constrain China is going to be a big test of American power in the 21st Century.
CHATTERLEY: How cautious do you think international leaders will be when they have the overtures from the Biden administration to try and perhaps
repair some of the damage that was done?
HARWOOD: Well, I think they're going to be highly interested in it. It was not a source of comfort for Canada, for Mexico, for France, for Britain,
for Japan, the way in which Donald Trump used to kind of blunderbuss approach, angering allies and adversaries alike, not making clear what the
priorities were for the United States on the international stage and seeming to behave somewhat erratically and randomly.
You know, slapping tariffs on our allies in addition to slapping tariffs on China. I think they're going to welcome that approach. And I think
certainly their constituents are going to welcome that approach because we saw that over the last four years, international assessments by people who
live in other countries of America and America's leadership declined significantly over the last four years.
[09:55:08]
CHATTERLEY: John, one of the things I love about getting you on the show is that I always end up Googling on some of the terminology, so now I know
precisely what a blunderbuss is. Fabulous.
John Harwood, thank you so much, sir, as always.
HARWOOD: You bet.
CHATTERLEY: All right, a quick look at the markets for the final time. U.S. stocks at session highs, blue chips driven higher by strength in
financials.
The NASDAQ is currently also on track for a record close. Oil, also outperforming in the session as OPEC pledges once again to keep a lid on
supplies. Brent crude pulling back a little in recent trading, but still near one-year highs from low levels.
Remember, all traders hopeful that vaccine rollouts will gain steam and help economic reopenings, too. It's all tied.
All right, that's it for the show. I'm Julia Chatterley. Stay safe, as always and "Connect the World" with Becky Anderson is next. We'll see you
tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
