Return to Transcripts main page
First Move with Julia Chatterley
Videos of Violence will Dominate Day Two of Trump's Impeachment Trial. Twitter Turbulence as Revenues Fly as Headwinds Blow from India and the United States; Dose delays, The E.U. Admits that Vaccine Plans were Too Late and Too Optimistic. Aired 9-10a ET
Aired February 10, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:15]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE here is what you need to know.
Extreme evidence. Videos of violence will dominate Day Two of Trump's impeachment trial.
Twitter turbulence. Revenues fly as headwinds blow from India and the United States.
And dose delays. The E.U. admits that its vaccine plans were too late and too optimistic.
It is Wednesday, let's make a move.
A warm welcome once again to FIRST MOVE. Thank you for joining us as always. We have got the latest on the second impeachment trial of Donald
Trump coming up, plus a special focus on the Federal Reserve today.
Mary Daly, the President and CEO of the San Francisco Fed -- a voting member this year -- will join us for an exclusive interview this hour. Like
us, policy makers of course closely watching Congress on what they can pass in terms of new financial aid and stimulus.
It continues to fuel the debate, too, over the so-called K-shaped recovery, frothiness in financial markets and whether economic reflation can could
finally lead to inflation. And of course then, how the Fed should act.
Well, Daly has made her position clear, the Fed must not pull back on aid too soon. The rich getting richer isn't a reason to stop helping those that
need it most. Yet, she also says inequity has cost the U.S. economy $70 trillion in lost output over the last three decades. We'll discuss a fix
going forward.
For now though, U.S. stocks do sit near records. The NASDAQ set to hit fresh highs in early trade. Europe, well, that was a mixed performance, so
Asia has managed to hold in the green. Chinese investors sharing optimism ahead of the Lunar New Year Holiday.
No holiday makers meanwhile for lawmakers in D.C. It is Biden Cabinet hearings in the a.m., it is impeachment in the p.m. and that's where we
start the drivers.
The U.S. Senate will be hearing evidence today in the impeachment trial of former President Donald Trump. Lauren Fox has all the details.
(BEGIN VIDEOTAPE)
LAUREN FOX, CNN POLITICS U.S. CONGRESSIONAL REPORTER (voice over): House prosecutors will present their case against former President Trump today
explaining why they believe he should be convicted of inciting the insurrection at the Capitol last month.
They will have up to 16 hours over the next two days to do so. And without Trump as a witness, they are expected to rely heavily on video evidence.
REP. JAMIE RASKIN (D-MD): Our case is based on cold hard facts. It is all about the facts.
FOX (voice over): House Managers immediately presenting a chilling preview of their strategy on the first day of the trial, playing a video
highlighting some of Trump's words from January 6th.
DONALD TRUMP, FORMER PRESIDENT OF THE UNITED STATES: And we fight. We fight like hell. And if you don't fight like hell, you're not going to have
a country anymore.
FOX (voice over): And the deadly storming of the Capitol that followed.
The clip showing rioters breaking into the building and attacking police officers in the rampage.
RASKIN: People died that day. Officers ended up with head damage and brain damage. One officer lost three fingers that day. Two officers have taken
their own lives.
FOX (voice over): A grim reminder to Senate jurors, most of whom were inside that chamber on the day of the insurrection.
RASKIN: You ask what a high crime and misdemeanor is under our Constitution? That is a high crime and misdemeanor. If that is not an
impeachable offense, then there is no such thing.
FOX (voice over): The 13-minute video just a small recap of the terrifying footage from the riot.
REP. JOE NEGUSE (D-CO): What we experienced that day, what our country experienced that day, is the framers' worst nightmare come to life.
Presidents can't inflame insurrection in their final weeks and then walk away like nothing happened.
FOX (voice over): Tuesday's debate before the Senate voted on whether the impeachment trial is constitutional. Trump's legal team arguing he cannot
be convicted because he is no longer in office.
BRUCE CASTOR, JR. FORMER PRESIDENT TRUMP'S DEFENSE LAWYER: The majority in the House of Representatives does not want to face Donald Trump as a
political rival in the future. That is the real reason we're here.
FOX (voice over): Six G.O.P. senators ultimately joining Democrats to vote the impeachment trial is constitutional.
Louisiana Senator Bill Cassidy becoming the only Republican to switch his vote on the constitutionality of the trial.
[09:05:10]
SEN. BILL CASSIDY (R-LA): The House Managers made a compelling, cogent case and the President's team did not.
FOX (voice over): And with the Senate Democrats needing 17 Republican votes to convict Trump, some hope that being witnesses to the attack will
make this impeachment trial different than the first.
SEN. DICK DURBIN (D-IL): We happen to be meeting at the crime scene. We are in the Capitol. You don't have to prove it up as they say in the
courtroom. It has been proved up to each of every one of us individuals.
(END VIDEOTAPE)
CHATTERLEY: John Harwood is joining us now. John, great to have you with us. It is days and days later and I still find that video incredibly hard
to watch.
I just want to take us back to what we saw yesterday because there was a stark contrast between the impeachment managers, the prosecution in this
case and the legal defense for President Trump who seemed moved, flustered, ill-prepared.
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Well, that's right, and the reason is that they have no case. The argument that the House Managers put
on as Senator Cassidy of Louisiana, the one Republican who changed his vote was cogent, was logical, with mixed emotion and facts and reason.
And in response, you got from the President's lawyers who were just hired a week or so ago because other lawyers would not stay with President Trump,
he has had a terrible time getting competent lawyers on his team, one of them just meandered and flattered the senators and talked about how great
they were, presumably as a way of flattering them into supporting his client.
The other one was angry, was claiming that what Democrats are trying to do is to try to disenfranchise Trump's voters which is ridiculous since
President Trump himself was actively fomenting an attempt to disenfranchise the votes of the people who elected Joe Biden.
So their material is weak. The facts are weak for them. The law is weak for them and that is why we saw result they had.
On the other hand, the jury pool is very strong for Donald Trump that is because there is 50 Republican senators, you need 17 of them to vote to
convict and there is no sign that there are 17 who are willing to do that.
You had five on the first vote saying don't have a trial, it is unconstitutional. Yesterday there were only -- there were six Republicans
instead of five who said no, it is constitutional, so there was some movement, but there is no sign there is going to be movement from of six to
17. We will see once the case is presented over the next couple of days.
CHATTERLEY: And this is the key, John, and I think we have to keep an eye on this certainly for our international viewers. This impeachment trial
will decide whether or not ultimately Donald Trump can hold public office again; if he is acquitted, he can. We don't know what happens between now
and the future.
But what you're saying is, despite the fact that Senator Cassidy and we saw him there decided in the space of a week to say this impeachment trial
isn't constitutional, yesterday he decided, okay, I think based on what I saw, it is. We're still looking like Donald Trump will be acquitted here.
HARWOOD: He will be acquitted. And I think that it is highly likely that - - of course, if he is acquitted, he will not be disqualified from future office.
But I do think it is important for our international viewers to know that the chance of Donald Trump ever holding office again is vanishingly small.
He has been a discredited political figure. Yes, he has a grip on a substantial portion of the Republican base, intense following among those
Republicans, but you have got somewhere between 10 percent and 20 percent of Republicans who say he should be convicted in this trial, he should have
been impeached.
You take away 10 percent to 20 percent of the Republican base, Republicans cannot win an election. So, yes, Donald Trump will likely leave this trial
technically legally able to run for office again, but the odds that he could win another national election, almost nil.
CHATTERLEY: Yes, and he is still banned on social media, which is another critical part of how part of how he came to power, and remains off.
John Harwood, thank you so much for that.
There is a reason I mentioned that because Twitter shares hitting seven- year highs overnight after fourth quarter earnings beat expectations. Twitter reached 192 million monetizable daily active users. In the quarter,
that is up 26 percent from a year ago, though softer than expected, and that's the key here.
Brian Fung joins us now with all the details. Brian, good on the financials, but it was a challenging quarter in some regards.
BRIAN FUNG, CNN TECHNOLOGY REPORTER: It was. Although, you know, Twitter did show significant growth here in its user base. It said it added more
daily users in January than the average of the last four Januarys, and that is despite having banned thousands of accounts associated with the QAnon
conspiracy theory, despite banning President Trump from its platform.
[09:10:10]
FUNG: And Twitter is painting this as an international story. It is that 80 percent of its audience that is outside of the United States, and it
just goes to show how little it says the activity on Twitter is linked to things like news and politics as it happens to dominate Twitter in the
United States.
You know, in the earnings call, Twitter also teased plans for a subscription product sometime next year and it expanded on its vision for
the future of content moderation.
Under this plan, Jack Dorsey, the company CEO said users might be able to select from different content ranking algorithms, kind of like in an app
store, and that might give users more choice and control about what they see on twitter.
Twitter did warn that user growth will probably slow a little bit with the waning of the pandemic and as people start getting back outside a little
bit more. But for what we're seeing right now, Twitter is still continuing to add users in January -- Julia.
CHATTERLEY: You raised two really important points here. The first, if you have a subscription service, you are monetizing in a different way, you
less rely on advertisers, which is a key part of this, too.
And then what do you do about content? There is clearly debate over whether the CEO of any social media platform should have the right or the ability
to turn off the voice of a President, irrespective of what he is saying.
And you raised a great point here, too with what Jack Dorsey said. He said, "We are a platform that is much larger, obviously, much larger than any one
topic or any one account, 80 percent, yes, of our audience is outside the United States and that is where I want to go now, to the lucrative and
large Indian market."
Brian, because they are facing some challenges here too over what content is acceptable on the platform, the threat of a suppression of free speech.
And of course, governments and regulators. Talk us through what is going on in India.
FUNG: Sure. Well, farmers in India are protesting policies coming from the central government, and as many of the protestors take to social media,
that has created a lot of tensions between Twitter and the Indian government.
Twitter says it has received a number of legal requests and even a notice of noncompliance from the Indian government, and saying that, you know,
Twitter must crack down on some of this content. Twitter says, it has hidden or removed some of this content, but it believes the legal orders to
be actually not in the spirit of Indian law.
And so the company is going to be continuing to fight that with the government, and it just underscores that lot of the same debates that are
playing out in the United States about Twitter's commitment to free speech versus its commitment to, you know, keeping its platform clear of violence
and incitement, you know, a lot of those same debates are also playing out around the world in many contexts.
CHATTERLEY: Yes, and the desire of governments to suppress protests or at least the voice of protest, too, it is a fine line to walk for these social
media companies particularly when there is what -- 700 million internet users in India.
It is a huge and lucrative important market for these players.
Brian, great job. Thank you so much for that, Brian Fung.
All right, so let me bring you up to speed with some of the other stories making headlines around the world.
Protestors are taking to the streets for the fifth straight day in Myanmar demanding an end to the military coup and release of deposed leader Aung
San Suu Kyi. Thousands turned out in Yangon, some waving the red flag of Suu Kyi's political party.
The party says its headquarters were raided, looted and destroyed by security forces overnight.
South Korea has granted conditional approval for AstraZeneca's COVID vaccine, the first to get authorization there. Patients and staff at
nursing homes will be the first to get vaccinated starting February 26. People over the age of 65 will be allowed to get vaccines despite concerns
over a relative lack of data showing the vaccine is effective among elderly people.
All right, still to come on FIRST MOVE. Smooth sailing to a global trade recovery in 2021, well, the CEO of Maersk will give his take.
And mistakes were made, Europe's mea culpa over vaccines. We have got the details next.
(COMMERCIAL BREAK)
[09:17:28]
CHATTERLEY: Welcome back to FIRST MOVE live from New York where U.S. stocks look set to rise after Tuesday's pause, that's what we will call it.
The NASDAQ taking aim at a sixth straight record high.
Economic recovery, sensitive small caps have been big winners, too with the Russell 2000 rising almost seven percent just in the past week. Call it
once again, as we have in the last couple of days, the-everything rally with broad participation.
Just add to that the new poll showing that 28 percent of American adults bought shares of GameStop and other Reddit names last month, that is over a
quarter of U.S. adults. Just let that sink in for a moment.
Small survey, just to be clear, but still fascinating to see that kind of participation.
Stocks moving higher on growth optimism. U.S. bond yields are giving up gains on continued signs of relatively tame inflation. Consumer prices
rising three-tenths of a percent last month, due mainly to high gas prices. The core rate remain unchanged. And we are seeing a slowdown in service
price increases, too.
Now, the U.S. Federal Reserve watches all these data points very closely and of course, the negotiations in Washington, D.C. over further financial
aid as it plots its way forward for both interest rates and broader monetary policy measures, and who better to discuss this all with than Mary
Daly, the President and CEO of the San Francisco Fed, and a voting member of the F.O.M.C.
President Daly, Mary, fantastic to have you once again. Welcome.
MARY DALY, PRESIDENT AND CEO, SAN FRANCISCO FEDERAL RESERVE: Thank you. So glad to be here.
CHATTERLEY: Great. I want to start by talking about what we're seeing in terms of the negotiations in D.C. over stimulus. There is clearly debate
amongst lawmakers, but also outside over what is required here.
Is $1.9 billion the right amount in your mind and if we get that, how will it impact the recovery speed?
DALY: I'd like to step back from a particular number and be data dependent, if you will. What we really need is a bridge that gets everyone
through the coronavirus. So when it is behind us, we're in the best position to grow rapidly.
And whether that is $1.9 billion or more or less depends incredibly or completely on the coronavirus and COVID. So right now, I'm just that
Congress is debating building that bridge long enough and making sure that American families and businesses get what they need to get through this.
CHATTERLEY: But more is the essential point here, and more is required.
DALY: Right, we need a bridge and I've said this many time, we need a bridge that is long enough. COVID came to our shores, no fault of anyone.
People are out of work, losing their businesses and we need to make sure that they are supported so that they are not destitute when COVID is behind
us and they are ready to reengage in economic activity when it is available.
[09:20:13]
CHATTERLEY: Janet Yellen, Secretary Treasury, and I know you are very familiar with her has said that if we do manage to get that kind of size
stimulus, then we could recover all jobs lost next year, so 2022. Does that kind of fit with your thinking, too?
DALY: I'm certainly optimistic that if we get the kind of stimulus that we're talking about and we build that bridge, that we can reengage, there
will be a rapid rebound and we will be able to return the U.S. economy to full employment, to pre-COVID employment levels in a year or two.
But it is going to take continued effort and if we go slower than that, we are going to have to make sure that we leave no one behind because that is
the number that Treasury Secretary Yellen put forward. It is, we need to recover every job that was lost.
CHATTERLEY: And we will talk about not leaving people behind because I know you feel incredibly passionately about not leaving people about that.
But I want to talk to you about some of the challenges. Much talked about op-ed by former Treasury Secretary Larry Summers pointing out that he
thinks this is too big, that there are financial stability risks, risks to the dollar, the short term spending versus medium to longer term spending
mix here is wrong.
Mary, where did you stand on some of his challenges?
DALY: So I always appreciate when Larry Summers puts out his views because it helps us all further the debate. But my own sense is that right now, the
appropriate thing is to build a bridge and that really is giving people income support, businesses, loans and grants that they need to keep
themselves whole.
And then, once we're past this, I really do believe that medium term spending decisions, building infrastructure, creating things that increase
the productive capacity of our economy is appropriate and we should take all of those things on and be serious about considering them.
I'm confident Congress is doing that and I look forward to seeing what they put forth.
CHATTERLEY: But build the bridge first, I think is the clear message because you said it a few times now, and we hear it.
DALY: Not past the COVID. If we're not through COVID, then, it doesn't matter what we're spending in the medium term. We need to make sure that
people are over the virus and they have the ability to reengage.
And I just think of the millions of people who have been displaced that we really do need to make sure that they can participate in an inclusive
economy.
CHATTERLEY: Fix the short term first and then we can worry about the medium to longer term.
Let's talk about inflation risks, too because Bill Dudley, former head of the New York Fed put out a piece today. Four reasons why he is really
concerned about inflation risks. One of them is that people are now expecting inflation beyond the corporates have money, people have money,
thanks to the stimulus and we tend to recover quicker than things like a financial crisis when we have -- not that we have ever been through this,
but this kind of crisis.
Mary, your view, inflation risks?
DALY: So, yes, I think that right now, the inflation risks are those worries that people have, but they haven't materialized. I mean, just think
of the last expansion, 10 years, and we didn't have inflation sustainably up to two percent.
So we released our new framework, the Federal Reserve did, the F.O.M.C. did, and inflation expectations moved up. And right now they seem very well
anchored at our two percent goal and we've committed to going moderately above two percent for a sustained period in order to average hit two
percent.
So I don't have those concerns. We will have rapidly rising inflation that is runaway, but if we should encounter those, we know how to treat high
inflation. Where we are very much less experienced at is moving inflation up to our two percent target.
CHATTERLEY: In the interim, stock markets are hitting highs, people continue to talk about the K-shaped recovery here where there are people as
we've discussed that are struggling, the rich -- the really rich are getting richer.
Is there any reason that you can see here for that to be a reason to pull back on support, so-called froth perhaps in markets?
DALY: Well, certainly we want to think about broader financial stability issues. Those are always topics of discussions, those are always metrics we
look at. But when you look at the broad economy and the broad financial sector, you don't see a pervasive froth. You see pockets, GameStop being
the most recent.
You see pockets of these things, but you do not see this in a pervasive way. So, yes, let's continue to monitor this. But I'm personally unwilling
to make a tradeoff that leave millions of workers out of work in hopes that I will take back some gains for a few wealthy individuals.
Really, this is about a broad and inclusive economy in the job as I see it for the Federal Reserve is sustainable, healthy growth, full employment,
and price stability, and that is what we're focusing on.
CHATTERLEY: You identified something there very quickly and then we'll move on, the GameStop froth, and we will now call it that because you did.
Let's throw in some of the enthusiasm that we are seeing in digital assets, perhaps like Bitcoin as well.
Do you see any role here for the Federal Reserve to act on what we're seeing specifically there beyond your broader policy measures?
[09:25:12]
DALY: So these are just small inputs in the broader financial sector, and you know, issues like GameStop, the things about that, that's really a
Treasury Secretary, S.E.C., Members of Congress who are on the committees that think about these issues. They are looking at those types of things.
When I think about financial stability and froth, I'm looking over a wide range of financial instruments, and that is when I conclude that right now
we're resilient, and we were even resilient through GameStop.
We had the checks and balances in place that while it didn't stop that run- up, it certainly didn't permeate the rest of the financial system.
So from my vantage point, things are still in a good place, but always bears watching.
CHATTERLEY: Yes, and something we are watching and I know you've been incredibly passionately about this, the inequalities. This is not something
that didn't exist pre-COVID. It just stopped us I think long enough to understand what was really going on.
You wrote a blog recently and some of these statistics were shocking, the loss in output as a result of inequalities in the U.S. economy, $70
trillion over the last three decades, just over $2.5 trillion in 2019 alone.
Mary, talk to us about this because this recession is specific in terms of the pockets of society who it has impacted most.
DALY: Well, these numbers are just staggering. You know, what we did in our research is simply say what if we didn't have the gaps between blacks
and whites, men and women, Hispanic and white individuals in our country, what would happen?
And it showed that we would be growing faster, we will have more output, a larger pie for everyone, and what it really highlights is that this is not
just about fairness, fairness is important, but it is not just about this, this is not a social issue, this is an economic issue.
Closing these gaps which are only going to grow over time, closing these gaps is essential if we want to be globally competitive and deliver the
next generation a better future than the one we inherited.
CHATTERLEY: You know, one of the ways it is being discussed and it is a challenge once again in Congress is perhaps lifting the minimum wage. The
Congressional Budget Office put out a report saying if you raise the minimum wage to the talked about $15.00, it could cost $1.4 million jobs
even if it managed to lift 900,000 people out of poverty.
Mary, where do you stand on minimum wage and maybe a living wage, an assessment of what the living wage is here, state by state if necessary?
DALY: Sure. So, this is a perennial debate whether we should use a minimum wage or something else to basically make work pay.
The sad reality is, and this is something we do have to grapple with, we have to fix, is that many Americans work full-time, 40 hours a week or
more, and they can't effectively feed their families, buy the homes they need, pay the rent they have to and live productive and healthy happy
lives, and that is amiss. That is something that we have to fix.
Whether it is the minimum wage or the earned income tax credit or another tool that we haven't yet tried, all of those things are things that
Congress needs to grapple with. And when I think about the minimum wage, the living wage, I worked in a district the 12 western -- the nine western
states, rather, the 12 district, where living wages are very common.
And what ultimately the decision of voters was, was simple, if I go to a restaurant and I'm sitting there having a meal, I want to know that the
person who is serving my meal is paid enough that they don't have on stop at a food bank on their way home to feed their family. And that is just
something that we're willing to take on.
So costs are one thing, but people are another thing. And we really need to focus to getting this problem fixed.
CHATTERLEY: Such a great illustration, a painful one, but an important one. What role does the Federal Reserve play in attacking this, Mary?
Because there will be people watching this going, the stimulative policies fueling a rise in the inequality and as we have discussed, there is no
choice because you have to support those that are suffering most in the interim, but we have to come out of this and not forget and carry on.
DALY: Absolutely. I think this is one of the things I will underline, you said it well is, we cannot be forgetful. It is going to be so tempting as
we get past COVID to think that if we're okay, everything is okay.
But let's remember that many, many people in our communities, people who have disproportionately lost their jobs in low and moderate income
communities or certain sectors, they really need to be made whole as well.
We are all going to be better off if we work on this collectively, and we bring everybody back to their pre-COVID levels and we allow people to even
grow more and have lives and families that thrive in their community.
So this has got to be a top priority and ultimately, it is all about economics and the Federal Reserve is about making sure that we have a
healthy economy. So we're thinking about this, studying it, researching it and working with our fiscal policymakers to be as informed as we possibly
can be about how to make sure that our economy is an inclusive one.
[09:30:12]
CHATTERLEY: Yes, we have to be human about it. Just because we're okay, doesn't mean everybody is.
Mary Daly, President and CEO of the San Francisco Federal Reserve, great to chat with you as always. Thank you.
DALY: Thank you so much.
CHATTERLEY: Thank you. Okay, the market opens next. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running this Wednesday and we have got stocks hitting all-time highs once again
after Tuesday's market pause.
Coca-Cola and GM posting market friendly earnings and their shares, well, a bit mixed and lower as you see in early trade, but Twitter, wow, look at
that performance rallying some 14 percent following their results.
The corporate news not stopping there either. Walmart announcing today it will begin administering COVID vaccines at 1,000 of its U.S. pharmacies in
22 states beginning Friday.
Certainly, the vaccine rollouts continue to fuel optimism about reopenings, too. Brent crude now up for a ninth straight session, and sitting at highs
not seen since before the pandemic; now, above $61.00 a barrel.
We've also got Fed Chair Jay Powell expected to speak more about the economic outlook and recovery in a speech to the New York Economic Club
later on today, too.
Now, fourth quarter earnings at the shipping giant, Maersk jumped a bumper 85 percent. The company says strong consumer demand in the second half of
2020 drove up freight rates.
The world's biggest container shipping line says it expects to see trade recover further this year.
Joining us now, Soren Skou, he is the CEO of Maersk. Sir, fantastic to have you on the show as always.
Wow, is all I can say about those results. It was a fantastic quarter. Better than expected trade recovery I think, and of course restrictions on
containers, those freight rates truly soared in the quarter.
[09:35:06]
SOREN SKOU, CEO, MAERSK: It did. It indeed, and it kind of any way masks the story for Maersk because we actually had year-on-year earnings growth
in every single quarter during 2020. In the first three quarters, we had lots of headwinds in terms of lower volumes and then it all, if you will,
came together in the fourth quarter and demand increased very much driven by the U.S. market where imports were up like 25 percent in the fourth
quarter. So very much a U.S. story that impacted the whole world.
CHATTERLEY: Yes, I mean, I was looking at some of the charts here. The freight rates between China and Europe quadrupled, I think in the final two
months of 2020.
I mean, everyone is complaining, exporters are complaining, regulators are complaining. I mean, I know you've had a number of investigations over the
last, what -- four or five years from a whole host of countries and they have never found anything.
Is this just what happens in a crisis and do these things improve this year?
SKOU: Well, I mean, the reality of the matter is that we are operating in fixed capacity networks. And what happened last year was that in the first
half, actually, volumes were significantly down for Maersk. Volumes were down 15 percent in the second quarter, and lots of our customers, retailers
in particular, you know, during the second quarter of 2020 and way into the summer when nobody really knew where the pandemic was going.
You know, they stopped buying in Asia or they weren't buying a lot, and then, come after summer, then suddenly the consumer is demanding product.
Many companies finding themselves without enough goods on the shelves, and that proved a double whammy in the sense that the strong basic demand from
the consumers and on top of that, you have inventory restocking cycle going on.
And that is why we see such a massive demand in the fourth quarter, and obviously, as I said, in a fixed capacity network, it is really hard to
deal with.
CHATTERLEY: To your point as well, it skewed the picture as far as the business is concerned. I know your broader ambition is to be effectively
door to door. So to boost your land-based logistics operations, and that is hoping to be around 50 percent of operating income by 2023 if I remember
from our last discussion.
The benefits of what you've seen is that you now have a multibillion-dollar acquisition war chest, let's call it that, should you need it. Talk to me
about the broader plans, how are you going to achieve that logistics based target and utilize some of that cash that you've gained?
SKOU: Well, certainly, 2020 also brought a lot of profiles to our strategy. I mean, our logistics business in the fourth quarter grew 35
percent year-on-year, which that is simply driven by freight rates, that is simply driven by more business, and most of that growth was actually
organic.
So we, today, have an $8 billion logistics business and we expect that to grow dramatically in the coming year, both organically and through
concessions. We made a couple of good acquisitions.
Last year, one of them in the U.S., a company called Performance Team, which is in the warehousing and distribution space and that has turned out
to be an excellent acquisition for us.
And we expect to do more. I mean, we are leaving 2020 with almost no financial debt. So, obviously we are plenty of firepower.
CHATTERLEY: I want to ask you, and I'm pausing as I ask you this, but I ask you because I remember from our discussion last time as well that you
are utilizing blockchain technologies to facilitate your logistics operations and just understand where supplies are around the world.
In light of the recent announcement from Tesla that they are putting some of their cash on the balance sheet into Bitcoin, I wonder whether you as a
company are even having this discussion and what you think of it, if anything.
SKOU: No, we are not having that discussion, and frankly, I don't have any view on it.
We have a collaboration with IBM where we're building a global Bitcoin powered network to create more visibility in global trade and through
digitized, in particular, documents. And we're seeing plenty of progress with that.
We have brought on a lot of new members to the ecosystem and we expect that network which we call TradeLens to really grow in the coming years.
CHATTERLEY: But no current ambitions to discuss with the Board, the prospect of investing in Bitcoin just to be clear?
SKOU: No. We are clear about that. Yes.
CHATTERLEY: Yes, I can sense that. Okay, talk to me about the outlook. Talk to me about what you are seeing in terms of recovery, pickup in trade,
operations in 2021.
SKOU: So in 2021, we are guiding for a better year than 2020, which was a good year and we are doing that because, you know, we are starting the year
on a very strong note. But we are also are seeing, if you will, not just the ocean business, but the rest of our business has really performed well.
[09:40:19]
SKOU: And as volumes, we expect will come back this year, you know, then we are confident we will see growing earnings.
I mean, we talk a lot about the fourth quarter and the explosion in demand, but overall for the full year of 2020, actual global strength was down two
percent to three percent. We were down five percent because of our exposure to, in particular, to Latin America and Africa.
And we expect global trade to be back to growth mode this year and our businesses will benefit from that.
CHATTERLEY: Is there any part of the world that you are worried about or cautious about?
SKOU: Look, obviously, none of us have been in a pandemic before and therefore, we have not really experienced coming out of it either, so there
is plenty of things to think about and worry about.
It looks to me however that like the major economies of the world, E.U., the U.S., China, Japan and so on have all done very sensible things to keep
a hand on the economy, and keep as many people in jobs as possible, and that is actually why, we, from an economic point of view have done fairly
well through the pandemic.
When we look at global economy, you have to remember, Maersk, we are only really exposed to the goods economy, we are not really exposed to the
service economy. And it is really the service economy that is taking the brunt of the force of the attack here because, you know, in fact we are
probably benefitting from.
Because some consumers, you know, the money, they cannot spend on going on holiday travel or going to a restaurant or going to a sports game, some of
that money gets channeled into more goods consumption, which we need to transport.
But you know, we are coming out of the pandemic and that is going to be a new experience for all of us.
Right now, things are looking good and we think we are going to have a better -- we are quite confident we are going to have a better year this
year than last year. The question is, how good?
CHATTERLEY: Yes, well, you phrased it perfectly, I think. The goods part of the economy versus the services part of the economy, and well managed,
sir. Congratulations on those results. Soren Skou, the CEO of Maersk. We will talk to you soon.
SKOU: Thank you.
CHATTERLEY: All right, up next, Europe grapples with new COVID-19 variants and a vaccine shortage. Stay with us. The details are next.
(COMMERCIAL BREAK)
[09:45:37]
CHATTERLEY: Welcome back to FIRST MOVE and the latest now on the COVID crisis in Europe.
England is tightening border restrictions to curb the spread of COVID variants. Passengers entering from 33 high-risk countries will have to
quarantine in hotels at their own cost. Any travelers caught lying on their arrival forms could face up to 10 years in prison.
In Germany, meanwhile, leaders are currently meeting to discuss possibly easing lockdown measures. Chancellor Angela Merkel reportedly wants to keep
restrictions in place until at least March. Meanwhile in France, extending its health emergency until June.
The crisis in Europe complicated by the bloc's slow vaccine rollout. Supply shortages have led to delays and an ugly political fight with the U.K.
Earlier, the President of the European Commission admitted that errors had been made.
(BEGIN VIDEO CLIP)
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT (through translator): Today, in the fight against the virus, we're still not where we want to be.
We were late to authorize, we were too optimistic when it came to massive production, and perhaps we were too confident that what we ordered would
actually be delivered on time.
(END VIDEO CLIP)
CHATTERLEY: Melissa Bell joins us now. Melissa, great to have you with us. It felt like a mea culpa: we messed up here and we simply didn't move
quickly enough.
MELISSA BELL, CNN PARIS CORRESPONDENT: That right. This is the woman after all, Julia, who has been under fire now for a couple of weeks over this
poor vaccine rollout. She went on to give the figures. You know, 25 percent of those hundred million doses that had been promised by AstraZeneca simply
were all that is going to arrive in the first quarter for the European Union.
Now, those AstraZeneca vaccines have begun being rolled out, of course, Julia, in Italy since yesterday, in France and Germany over the course of
the weekend, but there simply aren't enough of them.
And she went on really to explain the extent to which she believed that mistakes had been made referring even to the announcement you will remember
when the export bans were announced after the row began with AstraZeneca.
The announcement by the European Union that they were going to reintroduce the hard border at the Irish Republic. Now, that she said was something
that she regretted speaking specifically to the idea that the E.U. would support peace in Northern Ireland going forward.
So, yes, really kind of setting out before European lawmakers how badly the European Union had dealt with this, and yet, Julia, going on to explain why
it had been necessary to do so.
Remember at the beginning, this was not in the domain of the European Union, health issues were handled by member states because the E.U. was
failing to coordinate.
Four countries including France and Germany had decided to band together to start to procure the vaccines. She explained that it simply wouldn't have
been possible to let the biggest economies decide for the 27, hence, the need to get together.
But of course, she said it had been slow. Now, she intends to streamline the process both of clinical trials and ultimately, a vaccine delivery. But
there is a lot of work to do.
So far, Julia, she said only 26 million vaccines have been delivered to the European Union. She wants 70 percent of the E.U.'s population to be
vaccinated by the summer, and when you consider its size, that is going to be a lot of vaccines to authorize and to procure and to distribute over the
coming months.
CHATTERLEY: I saw a fascinating quote from her in the German press last week as well that said, "A country on its own can be a speed boat. The E.U.
is more like a tanker." You can tell the Brits there as well.
I want to talk about some of the other examples here, Serbia, clearly not an E.U. member, but Hungary is and they have turned to perhaps more
controversial options. What is being made of that across Europe and particularly for those people who are saying, look, we want a vaccine and
we want it sooner rather than later?
BELL: That's right, the Hungarians going ahead and beginning to deliver this week the Sputnik vaccine that has yet to be approved by the European
Medicines Agency. We understand that at some point, a process will begin so that they can consider its application. But for now, it has not been
approved.
And I think, you put your finger on something a moment ago beyond the frustration of some European member states in deciding to go it alone on
some of this vaccine procurement, the idea that things have gone so well in the United Kingdom in terms of their vaccine procurement and rollout and
that countries like Serbia that are not yet in the European Union and are doing so much better on their vaccine rollout than any European countries
are.
I think, that of course makes Ursula von der Leyen's situation even worse. Not only did she insist on the coordination of this vaccine procurement
last summer, but others who happen to have had to be involved in that have done so much better -- Julia.
[09:50:05]
CHATTERLEY: Yes, I have to say, it is one of the very few things that I talk about more than anything with Brits I speak to, whether they be
remainers or leavers in the Brexit debacle quite frankly, they point this out specifically.
Melissa Bell, great to have you with us and a beautiful backdrop there, I admire it every time you're on with us. Thank you for that.
BELL: Thank you.
CHATTERLEY: All right, you're watching FIRST MOVE. More to come.
(COMMERCIAL BREAK)
CHATTERLEY: Dubai's Expo 2021 set to open in October after a one-year pandemic delay. In today's Road to Tech Expo, John Defterios takes you to
the Sustainability Pavilion.
(BEGIN VIDEOTAPE)
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR (voice over): With this space-like structure, the Sustainability Pavilion is said to be a
major center piece of Expo 2020.
At 130 meters wide, this huge roof canopy is called terra, meaning Planet Earth, and it is all about the future of the world around us.
The roof and surrounding energy trees are fitted with more than 1,000 solar panels that will provide some of the energy needed to host this massive
event.
JOHN BULL, DIRECTOR, EXPO 2020, TERRA SUSTAINABILITY PAVILION: We are trying to showcase how humanity can build buildings that do live in harmony
with the environment around them, that do manage to grab the resources around them, whether that is the sun or even water.
DEFTERIOS (voice over): Expo 2020 has been delayed a year because of the pandemic. This pavilion is the first to be completed and lucky residents
and visitors are getting a glimpse inside this mega structure.
Here they are brought on immersive and interactive experiences. A world full of forests, oceans, and the impact of overconsumption. All with the
goal of helping visitors particularly children understand their impact on the environment.
BULL: Through those immersive and interactive experiences, that is how we can really connect with people; that is how we can start conversations that
matter rather than just giving information.
DEFTERIOS (voice over): Millions of visitors are expected to attend the event from this October to the end of March next year.
Post Expo, the Pavilion will continue to inspire future generations and serve as an example of sustainable design with the building to become a
Science Center in District 2020, a new community that will evolve from the Expo site.
MARJAN FARAIDOONI, CHIEF EXPERIENCE OFFICER, EXPO 2020: Ever since we set out to plan for this pavilion, we had the future in mind, and we designed
it to be a center for children and science that would remain after the Expo.
It is going to continue inspiring the future generation about actions that they can take around the environment.
[09:55:11]
DEFTERIOS (voice over): Surrounded by other sustainable structures and thought-provoking displays, Terra's visitors are until the 10th of April,
being given a glimpse of what is to come during Expo 2020, and through the Sustainability Pavilion, imagine what our planet could and needs to look
like in the future.
John Defterios, CNN, Dubai.
(END VIDEOTAPE)
CHATTERLEY: And we end with a near catastrophic tale about Zoom filters. A lawyer in Texas was ready to appear at a virtual court proceeding, but his
computer wasn't.
Unable to fix his Zoom problem, Rod Ponton, uttered the sentence that's probably never been heard in court before. Listen in.
(BEGIN VIDEO CLIP)
ROD PONTON, COUNTY ATTORNEY, PRESIDIO COUNTY, TEXAS: Can you hear me, Judge?
JUDGE ROY FERGUSON, PRESIDIO COUNTY, TEXAS: I can hear you. I think it's a filter it and --
PONTON: It is and I don't know how to remove it. I've got my assistant here, she is trying to, but I'm prepared to go forward with it. I'm here
live. It's not that -- I'm not a cat.
(END VIDEO CLIP)
CHATTERLEY: "I'm not a cat." Look at his eyes and the blinking. The Judge, you'll be fortunate and pleased to know, helped fix the situation.
He then posted on Twitter, advising everyone to check their filters if a child has been using the computer. Don't blame your children.
All right, that is it for this show. I am Julia Chatterley. Stay safe. "Connect the World" with Becky Anderson is next. See you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
