Return to Transcripts main page
First Move with Julia Chatterley
Trump's Future on Facebook Decided this Hour; Treasury Secretary Janet Yellen Weighs in Spooking Investors; Parts of the Chinese Space Rocket is Heading Back to Earth. Aired 9-10a ET
Aired May 05, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:30]
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.
Friend or foe? Trump's future on Facebook decided this hour.
Rate rise risks. Treasury Secretary Janet Yellen weighs in spooking investors.
Duck for debris? Don't panic, but parts of the Chinese space rocket is heading back to Earth.
It's Wednesday. Let's make a move.
Welcome once again to FIRST MOVE. Lots to discuss this Wednesday including tech stocks' sudden slump, talk of a U.S. interest rate bump and Facebook
may be set to welcome back, yes, Donald Trump.
The very latest on the social media giant's imminent decision on whether to re-friend the ex-President is coming right, up, but first, the bulls are
trumping the bears on Wall Street this morning with tech stocks set to bounce after Tuesday's two percent pullback. Apple got sliced and diced, it
fell some 3.5 percent while investors fumbled with the FAANG.
Plus Tesla and Microsoft as you can see there, too. Why? Well, fears of future rate hikes created by former Fed Chair and current Treasury
Secretary Janet Yellen. Yes, the ultimate insider, she suggested interest rate rises might be required if the economy runs hot and inflation
intensifies.
She later sort of walked that back or clarified saying she wasn't predicting or recommending any policy changes, but of course, the problem
is the signs are there.
New numbers out the past hour show U.S. private firms adding 742,000 positions last month, it was actually a bit weaker than expected, but hey,
it is a very positive number, but remember some also saying we could see U.S. nonfarm payroll job gains of 2 million plus this Friday, too.
Sentiment in Europe also positive as you can see with services sector activity data at eight-month highs, driven by a particularly strong
performance in Spain and over in Asia as well, India's SENSEX recovering after last month's 2.4 percent slump. That feels resilient in the face of
what we are seeing there.
Bank stocks rallying after the Central Bank announced new lending measures to help steady the COVID-racked economy.
More of course on India in just a moment, but for now will Donald Trump be back or blocked for good? Facebook's independent oversight board will
announce at any moment if the former President can return to the company's social media platforms.
Clare Sebastian joins us now. Clare, great to have you with us, quick name change there. Of course, we are waiting for this imminent decision, but
while we are waiting, just explain what this independent oversight body is and how this is perhaps going to work.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Julia, we actually have the decision.
CHATTERLEY: Oh do we?
SEBASTIAN: Let me read you --
CHATTERLEY: Okay, great.
SEBASTIAN: We do have it. Have some of that has come out on the website. They say, "The Board has upheld Facebook's decision on January 7th to
restrict then President Trump's access to posting content on his Facebook page and Instagram account," but this is not a sort of black and white
decision here, Julia.
They say that it was not appropriate for Facebook to impose the indeterminate and standard-less penalty of indefinite suspension. They say
-- I am just going to read this to you because this is all very important.
Facebook's normal penalties include removing the violating content, imposing a time-bound period of suspension or permanently disabling the
page, so what they are saying is that Facebook sort of went too far with what it did in banning Trump without a time period attached to that.
This is apparently not what Facebook normally does, it then batted that back to Facebook. The Board then insist that Facebook review this matter
determine and justify a proportionate response. They are going to have six months to do that review.
So a very interesting decision, Julia, upholding Facebook's original decision and so Trump remains banned from the site, but they say that
Facebook needs to review the way in which this was done and they have six months to do that.
CHATTERLEY: See that's quite fascinating because I think this is effectively a litmus test for balancing free speech with safety online and
basically what they have said is, no tech company, no social media company perhaps should have the power to suppress or silence an official figure
like a President of the United States.
And you and I, I remember discussing this at the time. They are saying perhaps that a tech company perhaps overstepped the mark in that regard,
and we saw a number of them do it, but at the same time measures have to be taken and you have to review this in a few months' time.
They're trying to please all sides.
[09:05:10]
SEBASTIAN: Yes. Something that it would seem was impossible to do with this particular case, Julia. This is a really interesting one because we
see that it was split down party lines. This is a very polarizing subject.
Pew Research in fact did a survey ahead of this decision where they found - - let me just show you that that it really was split along party lines among Democrats and Democrats leaning, 81 percent felt that Trump should be
permanently banned from social media. By the way, he is still permanently banned from Twitter, which was his preferred platform.
But on the flipside, 88 percent of Republicans and Republican leaning people surveyed found that he should not be permanently banned. So it is a
very polarizing issue, a big split but what they have done here really interesting.
This Board is not very old, Julia. They only started work in October last year. It has punted it back to Facebook. I don't think we were aware that
that was part of the option here that they would say to Facebook what you did in the essence of it was correct, but the way you did it was wrong, you
need to review the process and come back to us in six months.
CHATTERLEY: And the fear, of course, the social platform -- the social media platform said was that they were afraid of further inciting violence
in light of the Capitol attacks that we saw in the early part of January and that was the decision ultimately that was made, but of course, this
decision far bigger than Facebook and far bigger than just one individual like Donald Trump for these social media companies.
Interesting for the company itself now because this is a decision ultimately that Facebook made, but they have offset the handling of it and
the future of it to an independent body, so effectively the real winner you could argue in this is Facebook because they stood back and gone look, we
made a decision but we are giving somebody else the option now to decide whether we did the right thing or whether it needs changing.
It is not our problem. What do we think of that?
SEBASTIAN: Well, look, this is something that Facebook has spent the last several years batting down criticism that it has too much power and that it
misuses that power or it doesn't use it enough.
Mark Zuckerberg has famously had preferred to take a light touch when it comes to content regulation particularly when it comes to politics, but of
course this all changed, Julia, in the run-up to the election last year.
There were many, many fears of incitement of violence. Those fears eventually did come true with the riot at the Capitol and that was when
Facebook made this decision and they, you know, have sort of insulated themselves with this Board saying, you know, it is independent. The
decision is binding. We have to do what they say, but ultimately, there are questions around that.
The Board members are initially appointed by Facebook. They had then co- chairs who helped appoint the rest of them. There is a Board of Trustees, but it is funded by Facebook. They have a lot of say and ultimately, it
comes down to Facebook. This is their company. They get to choose what happens in the future.
And I think that's why this decision now is so interesting because there's two parts to it as they said. One, yes, they are going to uphold the
decision to keep Trump banned, but they are punting it back to Facebook and saying, look, you have to look again at how this was done and sort of
review the original decision so they are not letting Facebook get away with the idea that it is not their responsibility.
CHATTERLEY: Yes, they are not completely off the hook, and of course, if at some point in the future, he were reinstated, he would now be a private
citizen and they have got more strict limits on what they deem abuse, misleading information, offensive post and things and they can be removed,
so yes, to be continued literally in six months' time.
Clare Sebastian, thank you for that. We are going to talk more about this as well later on in the show.
Now, Donald Trump is not yet back on Facebook, but the interest rate risk might be back on Wall Street. Former Fed Chair and current Treasury
Secretary Janet Yellen discussing ways to tame an overheating U.S. economy and then clarifying those comments later.
Christine Romans joins us now with more. Ouch. Christine, the ultimate Fed insider, but of course, now, she is the Treasury Secretary so she has to be
able to talk about the economy, but any former head of the Fed making comments about this is likely to induce concern, and it did.
CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: It's a unique situation, isn't it, when the Treasury Secretary used to be the Fed Chief
and everything she says goes through multiple lenses and look, it also shows us just how addicted the markets are to very low interest rates and
the spigot open on stimulus.
It has been like this for more than a decade and any kind of suggestion that the Fed is going to start to taper or even talk about tapering and
raising interest rates starts to get a lot of attention.
Look, the Fed Chief said and it sounded kind of academic and hypothetical to me, but she said, if the economy were overheating, that it would be
appropriate for the Fed to raise interest rates.
Then she walked that back and said, well, I don't speak for the Fed and frankly, I don't think that there is going to be lasting inflation. There
could be some bottlenecks and higher prices in the near term because of reopenings, but we think that will be transitory, that will be temporary
and we don't expect that there need rising interest rates right now or any time soon.
But just the academic discussion of how you cool off an overheating economy was enough to really kind of rattle nerves on Wall Street, so she wisely
walked that back here and I feel like we are kind of where we started yesterday before those comments happened.
[09:10:13]
CHATTERLEY: I know, and then the hypothetical would be okay if we weren't seeing warning signs.
ROMANS: Exactly.
CHATTERLEY: Gasoline prices, lumber prices, house prices, hints from companies in this earnings season saying, look, we are raising prices and
people are accepting it, so the hypothetical now needs to be addressed surely by Jay Powell. It sort of makes the next meeting quite interesting
because he has done his best to not talk about it and now he really kind of has to.
ROMANS: You are right and you are exactly right. The hypothetical or the textbook analysis is one thing, but when you've got, you know, steel prices
and copper prices and rental car prices and airfares and just about everything that people touch going up. You know, we saw in March, you had
consumer prices up 2.6 percent, and that's probably going to run like that in the near term here.
We have got numbers today that show a labor market that is improving rapidly and you could see a huge number on Friday for the job market.
You've got some industries starting to complain about worker shortage. So is there a wage inflation coming in here down the pipe soon?
We haven't really seen good wage inflation really since before the last big recession, but maybe this is the time it is going to pop in, so you're
right, the hypotheticals are with all kinds of real world flashing red signals and that's what really got a lot of attention.
CHATTERLEY: Yes, the market may have stuttered, but I am sure Jay Powell and the Fed did, too, yesterday as well.
Christine Romans, thank you for that.
ROMANS: Nice to see you.
CHATTERLEY: Now, speaking of rising commodity prices, there is a warning that the world can't solve the climate crisis without more metals for clean
energy.
The International Energy Agency says stockpiling could be one answer with the top three producers of lithium and cobalt for batteries accounting for
more than three quarters of supplies. Matt Egan joins us on this story.
Fascinating, Matt, because you have got countries like China and Japan that do stockpile these metals, but what they are saying is, we can't ramp up
cleaner technologies if you don't have the component and the commodity pieces in order to do that. Explain.
MATT EGAN, CNN BUSINESS SENIOR WRITER: Yes, Julia, that's right. You know, I mean, the good news is that governments around the world including the
United States are stepping up their climate ambitions, but the bad news is that there might not be enough metals to make those dreams a reality.
Now, we are talking about copper and lithium, nickel, cobalt, rare earth elements, all of which are used to make electric vehicles, solar panels and
wind turbines. The things that the world is really relying on right now to wean off its addiction to fossil fuels.
Just look at EVs. Now, we know that EV sales are soaring. Projections are for them to continue to rise. Tesla, Volkswagen, GM, everyone is into EVs,
but we kind of forget about is that, the average electric vehicle requires six times more minerals than conventional cars and the IEA is warning that,
you know, all of these minerals, they are all vulnerable to price volatility, to shortages because the supply chains are opaque.
Deposits are declining and the mining companies, they face some tough environmental and social standards.
And you know, look no further than copper. I know that you and Christine were just talking about the soaring price of copper. Bank of America warned
last week that the world risks running out of copper because inventories are at 15-year lows. That's another metal that is used in EVs.
And you know, here is another crazy stat, the IEA report says that the average -- it takes an average of 16 years between when there's a discovery
of a mineral deposit and when production actually starts, so all of this explains why the IEA Executive Director, Fatih Birol, he warned that there
is a looming mismatch between the world's strength in climate ambitions and the availability of critical minerals that are essential to realizing those
ambitions.
So, Julia, unless production of these minerals actually increases, you know, the climate crisis could very well get worse.
CHATTERLEY: Yes, never mind chip shortages. We are going to be talking about stockpiling and battles now over some of these copper, cobalt
supplies, as well, that the world needs.
I guess, at least, we are having the discussion. We probably should have been having this discussion earlier, but at least, we are having it now.
Matt Egan, great job. Thank you so much. Some fascinating stats in there.
Okay, let me bring you up to speed with some of the other stories making headlines around the world.
India's delegation to the G-7 Summit in London is self-isolating after at least two representatives reportedly tested positive for COVID. The Foreign
Minister has been meeting with other top diplomats this week. He is now attending today's meetings virtually.
The World Health Organization says the COVID crisis in India accounted for one in every four coronavirus deaths over the past week. Many are blaming
the Prime Minister Narendra Modi's government for the scale of the tragedy as CNN's Clarissa Ward reports.
[09:15:02]
(BEGIN VIDEOTAPE)
CLARISSA WARD, CNN CHIEF INTERNATIONAL CORRESPONDENT (voice over): As a raging pandemic tore across the country, thousands flocked to streets for
political rallies with hardly a mask in sight. At one gathering, India's Prime Minister, Narendra Modi praised the turnout.
"I've never seen such huge crowds at a rally." On that same day, more than 260,000 new cases of COVID were recorded in India. Shortly after, millions
of worshippers were allowed to congregate for the end of the week's long Hindu Kumbh Mela pilgrimage. After all, Modi had already declared victory
against COVID.
NARENDRA MODI, INDIAN PRIME MINISTER (through translator): In a country where 18 percent of the world population lives, we averted a major tragedy
by effectively controlling the coronavirus. We saved mankind from a big disaster by saving our citizens from the pandemic.
WARD (voice over): As a second wave of coronavirus ravages this country, those words have come back to haunt Modi. Critics accuse him of putting his
political interests ahead of the health of the nation.
YAMINI AIYAR, CENTRE FOR POLICY RESEARCH: We didn't ask the question of what we needed to do based on learnings from this last year in the event
that we have a second wave.
A second wave was never off the table. You just had to look around the world. You don't have to be a scientist to say that.
We did nothing. Instead, we celebrated a bit too prematurely Indian exceptionalism.
WARD (voice over): Now, India's healthcare system is on the brink of collapse with shortages of everything from doctors and drugs to beds and
oxygen after years of neglect.
WARD (on camera): It was always going to be difficult to contain the spread of COVID here in India. This is a densely populated country of
nearly 1.4 billion people. The Indian government is blaming the rapid spread on this new double mutant variant and it says that it warned states
to remain vigilant.
WARD (voice over): Still, many doctors agree that the devastating toll of this second wave could have been mitigated with better preparations and a
coordinated response. Assured a victory against the virus, India began to export the vaccines it was producing instead of inoculating its own
population.
WARD (on camera): How much responsibility does Prime Minister Modi bear for this?
AIYAR: He is the Prime Minister of the country, he takes full responsibility for all that we do good and all that goes wrong.
WARD: Do you think this will have an impact on his popularity?
AIYAR: I think as of now, what we have seen especially over the last three weeks is complete policy abdication and certainly, I hope that we hold our
government accountable for what we are seeing today.
WARD (on camera): The government has announced a raft of measures to try to combat this crisis including drafting medical students to help doctors,
getting the Navy involved, getting the Air Force involved, but some are saying simply that it's too little too late and while it is not clear what
the political fallout might be for Prime Minister Modi, people are saying here that this problem is not going away. One State Health Minister warning
that there could be a third wave on the horizon.
Clarissa Ward, CNN, New Delhi.
(END VIDEOTAPE)
CHATTERLEY: Brazil's former Health Minister says President Jair Bolsonaro repeatedly ignored warnings about the COVID-19 pandemic and the likelihood
it would overwhelm the country's medical system.
He gave evidence at the start of a Parliamentary Inquiry into the President's management of the pandemic.
Okay, still to come here on FIRST MOVE, very smooth sailing. Maersk reports the best quarter in its 117-year history. We speak to the CEO.
And keep your eyes on the sky. The Pentagon tracks the trajectory of a rocket making an uncontrolled return to Earth. That's all coming up. Stay
with us.
(COMMERCIAL BREAK)
[09:22:00]
CHATTERLEY: Welcome back to FIRST MOVE. The U.S. majors are on track for a solidly higher open. Tech is bouncing back after suffering its worst one-
day slump since March.
Positive corporate guidance is also helping sentiment. Shares of ride sharing app, Lyft is set to rise more than three percent after beating on
the top and the bottom lines. The company also seeing quote, "significant pent-up demand for its services."
Meanwhile, Caesars Hotel and Casino is announcing that quote, "Weekends in Las Vegas are sold out for the foreseeable future." Wow. Reopening optimism
continues to play out in the commodities market, too. Brent crude up for a third day and flirting with $70.00 a barrel. Copper meanwhile flat after
hitting fresh 10-year highs. As we have been discussing today, copper also close to all-time highs.
Okay. Let's bring it back now to one of our top stories. Facebook's independent oversight board upheld the company's decision to ban former
President Donald Trump from its platforms, but the Board also says that Facebook must review the decision within six months.
Facebook suspended his accounts after the January 6th attack of the U.S. Capitol by a mob of Trump supporters.
Chris Bail is a Professor of Sociology and Public Policy and the founder of the Polarization Lab at Duke University. He is also the author of "Breaking
the Social Media Prism: How to Make our Platforms Less Polarizing." Chris, great to have you with us. First, what do you make of this assessment from
the oversight board?
CHRIS BAIL, FOUNDER, POLARIZATION LAB, DUKE UNIVERSITY: Well, thanks so much for having me, Julia. You know, this is a landmark decision made by a
panel -- a blue chip panel of experts, legal experts, human rights leaders and really it will set the tone for a lot of decisions to come and so I
think really what -- the real big story here is a victory for this process, for people to come together and make rational decisions based on Facebook's
own principles.
CHATTERLEY: Is it a victory for the process? Because a lot of people who are coming into this were saying that whatever the decision, whether they
decided to reinstate Trump or they decided to uphold the ban, you have a very polarizing situation where critics will say, hey, this is suppression
of free speech and those that like the decision would say, you know, President Trump shouldn't have the power that he had with accusations of
misinformation and whatever else we want to discuss.
Is part of why you're happy with this, the fact that they have said, look, we want the six-month review here and I can quote from the statement, "It
was not appropriate for Facebook to impose the indeterminate and standardless penalty of indefinite suspension." They are trying to please
all sides.
BAIL: This is certainly not the end of the story, but you know, we were polarized long before Donald Trump and will be polarized long after Donald
Trump and I think we have to ask the deeper questions of how did we get here? How did we allow ourselves to become so polarized? And what role does
social media more broadly play in that process?
CHATTERLEY: A-ha. You've asked a question that I was going to ask, so please answer your own question. How did we get here and what are the
question that we should be asking? Because it is not actually just about social media and it is not just about Donald Trump.
[09:25:05]
BAIL: Right. So, I mean, everybody wants to think that Facebook or Twitter have some kind of magical button that they can flip deep inside their
source code and make all of this go away and I really wish that were true, but as researcher, you know, when we scrutinized the ability of Facebook to
really make our reaching decisions for the rest of us, what we discover is that most of the things that we think matter a lot, things like echo
chambers, misinformation, algorithms seem to have very minimal effect and really what's creating the polarization is us, it is driven by we, the
social media users.
CHATTERLEY: So you are saying that the algorithms that mean that people on social media tend to interact and engage with people of similar and like-
minded views isn't part of what is fueling extremist views and misinformation? It is simply not what you are finding when you are doing
the research.
BAIL: Yes. You know, surprisingly, few people are actually in political echo chambers the latest research indicates. The bigger problem is the
growing gap between social media and reality. So you know, right now, 73 percent of tweets about politics are generated by just six percent of
Twitter users and that six percent of Twitter users have very extreme views and this makes all of us feel much more polarized than we really are.
So we've got to ask the questions, why are extremists incentivized to spread extreme views and why are moderates disengaging?
CHATTERLEY: Or could we also ask the question of why a Twitter or a Facebook doesn't just identify those six percent of individuals and lock
them down?
BAIL: Well, I mean, this is an extraordinarily difficult task. I mean, it has taken four months from a blue chip panel of 30 of the world's leading
experts and $130 million to get us here.
Now, obviously, every decision won't be as big as this decision about Trump, but stamping out extremism is really like a game of whack-a-mole.
You know, trolls are going to continue to pop up and there is going to be an ongoing challenge among social media platforms to figure out principles
that not only work in the U.S., but around the world. So, this problem is not going away any time soon.
CHATTERLEY: So what we are saying is, and I think what you're arguing is actually the majority of us aren't extreme. We actually don't have
incredibly strong political views. We don't want to engage in uncivil behavior and activity online, so how do the majority overtake and rule the
minority?
BAIL: Well, let's think about it. Why do we use social media? For a lot of people, it is to gain a sense of status, you know, to gain a powerful sense
of belonging especially for people who are outcasts in their everyday life, right, but many other people derive status in other ways, you know, through
their job, the family, and their friends. And so for those people engaging in political debate, it is a liability, for extremists, it is kind of micro
celebrity and so we have to think about shifting the incentives that generated this problem and look to new kinds of technology to fix the
problem.
CHATTERLEY: How?
BAIL: Well, I think there's two things we can do. The first is, all social media users can learn to see what I call the social media prism, the
distortion between social media and reality. And we can that in a few ways. We can use technology middle ware technology, plug-ins that we have created
in the Duke Polarization Lab that would allow your viewers to kind of see and identify extremists for what they are and learn how to avoid them.
But more importantly, boost moderation so we maintain a bipartisanship leader board where your viewers can go and see the small, but growing group
of people, politicians, journalists, media figures, who are really resonating across the aisle. They are getting likes from both Republicans
and Democrats and we have also made bots to boost these things, too.
So we need tech to kind of help us boost moderates and tamp down the extremism.
CHATTERLEY: And what role do the social media giants play in that? Whether it is a Facebook or a Twitter for example. Because there will be many
people watching this interview going, hang on a second, they can do more. They rake in billions of dollars every year, they can boost moderation.
They can ultimately do more and just handing off the responsibility to an oversight board is a dereliction of duty in some way.
BAIL: You're absolutely right, Julia. There is a lot that social media platforms could do. One recommendation which I would love to see enacted
tomorrow is to create different kinds of incentives.
Right, now, we are rewarded for preaching to the choir. The more extreme things we say, the more like and new followers we tend to get. What if the
rankings that are used, the algorithms that are used to determine the order in which information appears in our news feed promoted content that is
resonating across political divides or across you know, all sorts of social divides?
You know, let's boost the information that lots of different types of people find useful or engaging instead of allowing us to kind of you know,
really only speak to our side.
[09:30:02]
CHATTERLEY: I love that idea. But I guess, it also depends on consumer preferences and human behavior as well.
Chris, great to have you with us.
BAIL: Exactly.
CHATTERLEY: We can debate this much more and we certainly will again soon. Thank you, Chris. Chris Bail.
BAIL: Absolutely. Thank you so much for having me.
CHATTERLEY: Thank you. Professor of Sociology and Public Policy at Duke University there.
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 as expected, we have a higher open for the Wall Street
majors with the NASDAQ on track to break a three-session losing streak.
New numbers showing a solid jump in private sector employment last month, another sign of strengthening U.S. growth. And the post-lockdown bounce
will be even hotter where it not for manufacturing constraints tied to the ongoing global supply shortages, especially chips.
And the U.S. Commerce Department is asking Taiwanese chipmakers to quote, "prioritize shipments of precious semiconductors to U.S. carmakers," many
of whom have been forced to shut production because of part scarcity.
The world's fourth largest carmaker, Stellantis warning today that auto industry disruptions could last into next year. GM saying in its earnings
report today that it can hit profit goals despite the chip shortages, however, its shares rallying on the news as you can see in early trade.
In the meantime, shares of the world's largest shipping line, Maersk, up more than five percent after it reported its best ever quarterly results.
Surging demand and trade bottlenecks including the shutdown of the Suez Canal pushed freight rates to record highs over the past three months.
The company doesn't expect that to change any time soon. It is almost doubling its profit forecast for 2021.
And joining us now is, Soren Skou, he is the CEO of Maersk. Soren, fantastic to have you on the show. You have described it in the past as an
exceptional environment and the profits that you're generating look pretty exceptional, too. Talk us through this.
SOREN SKOU, CEO, MAERSK: Well, it is true, this is a record result for our company by some margins, so obviously we are doing well right now. We are
doing well across both our container carrier business, but also are the ports and our logistics business is doing well and double digits growth
rates.
So we are clearly, you know, seeing the benefits in our business of a booming economy in the world, and certainly very much driven by the U.S.
and the stimulus packages in the U.S.
[09:35:26]
CHATTERLEY: Of course, I mean, it's a combination of factors here. Delays all around the world, a shortage of ships, of containers. Can you just give
us a sense of what you're actually dealing with here? And when you expect freight rates perhaps to come down? Or is it still too difficult to say?
SKOU: We're dealing with a situation of extraordinary demand. Our customers have -- many of them have very strong basic demand for their
products. And then on top of that, we have an inventory replenishing cycle going on, particularly in the U.S. market where inventory to sales ratios
are probably the lowest in history.
So very, very strong demand more than we can basically carry and at the same time, we still have bottlenecks that we're trying to unlock so that we
can get more capacity to our customers.
CHATTERLEY: So just too tough to predict at this stage when it might normalize.
SKOU: Well, I mean, our guidance for the year, we are guiding that -- we, expect operating earnings to be in the $13 billion to $15 billion range,
and we did $4 billion in the first quarter. So if you do the math, you can see that we expect actually to have quite a strong --
CHATTERLEY: It is going to continue.
SKOU: It's going to continue for a while. Yes.
CHATTERLEY: Even my Math can cope with that. One of the big issues also that the industry has been dealing with is the blockage of the Suez Canal.
Just your response to what we saw there.
SKOU: It's not uncommon that ships actually ground in the Suez Canal, it happens, you know, three, four or five times a year. What was uncommon this
time is that it was actually stuck for a whole week. And usually, we are able to get ships off again, you know, in a matter of hours, and it doesn't
really matter.
But here, it had serious impact. A whole week closure of the Suez Canal.
For Maersk, it meant we had, at the end of the week, 50 ships waiting in the Mediterranean Sea and in the Red Sea in order to pass through the Suez
Canal. Those 50 ships were missing somewhere else and that capacity was missing.
So it had a negative impact on our customers, and certainly, also on our cost picture. And it's going to take months really to get everything back
in order.
CHATTERLEY: You know, this is an accident. But it also exposed a deep vulnerability in terms of trade routes that we already know exists. But
we've never really seen happen in practice.
Looking at this, and I guess I'm thinking with a mind to -- and we pray it never happens, but terrorism, or a deliberate decision to block this trade
route, for some reason. Are you planning now behind the scenes, look, how can we -- we need a master plan should something this significant happen
again?
SKOU: Yes, I mean, the only solution that exists is, of course to sail all the ships to South of Africa instead of going through the Suez Canal. And
that adds, you know, a couple of weeks to the journey from Asia to Europe, and that capacity has to be found.
So we need -- you know, we need to have a little bit of excess capacity in the system, but it's not much different from what we are experiencing right
now in the U.S. where ships are waiting a week or longer outside Los Angeles, you know, before they can go into the port to get offloaded.
So we have these bottlenecks around the world driven by the very, very high demand that we see.
CHATTERLEY: Very quickly, the other thing was your target to have and we talked about this last time, 50 percent of operating earnings coming from
land based business over the next couple of years.
I mean, as the container business has exploded, that's actually becoming increasingly more difficult to achieve, admittedly, for good reasons. But
you do have cash. Do you buy your way to achieving that target? You acquire that land based business. Is that now the plan?
SKOU: I think first of all, I want to say that one of the big, positive points for myself, for ourselves in our first quarter result is the amazing
growth we had in land based logistics. I mean, we grew a revenue of 42 percent, and we also in our ports business, grew revenue 24 percent.
So really, really substantial organic growth and we want to continue to do that. We certainly would also like to continue to do acquisitions,
particularly in the logistics space, and so expect more of that.
CHATTERLEY: We shall. Soren Skou, great to have you with us, sir. Thank you so much for your time. The CEO of Maersk and congratulations again on
the earnings.
Okay, after the break, it's Gary Vee. The obsessive investor gets his hands around NFTs. But what is the big picture here? Find out after the break.
(COMMERCIAL BREAK)
[09:43:08]
CHATTERLEY: Welcome back to FIRST MOVE and to a true First Mover, a marketing evangelist who always seems to stay one step ahead. But has he
gone too far this time? I'll let you be the judge of that.
Gary Vaynerchuk better known as Gary Vee to fans is putting pen to paper in the NFT space. He is selling collectible cartoons which comes with entry to
events he is planning called VeeCon. Crucially, he claims this project called VeeFriends is a blueprint for other firms to follow whether large or
small.
An early investor in Facebook, Twitter, Uber and Tumblr, Gary Vee went from building his dad's wine business to owning a media empire.
But overnight, he told his 2.3 million Twitter followers he wasn't sure he was ready for today's launch. Gary Vee, the CEO and creator of VeeFriends
is here to tell us more.
Gary, I'll tell you what, you are a marketing genius because even I was nervous for you watching your social media overnight and this morning.
Look, you've described this as one of the biggest technology shifts, a cultural norm of our lifetime. But I think for many of my viewers, they're
still going: NFT what? Explain what you see in this and what you're doing.
GARY VAYNERCHUK, CEO AND CREATOR, VEEFRIENDS: Yes, and even your intro, and thank you so much for having me -- even your intro of like, has he gone
too far this time? There's only been two times that I've been told I've gone too far, when I wanted to put my dad's wine shop on this thing called
the internet and launched winelibrary.com in 1996, and when I started this show on this thing called YouTube, and told people I was going to use
Twitter and Facebook to build it for web 2.0 and social media, and now we're here at web 3.0.
Look, this is going to take some time, but NFTs, non-fungible tokens are going to be a very important thing for everybody here and the reason I
launched VeeFriends was to help people understand that it's not just about the incredible art that people makes that sells for $69 million that I'm
sure, Julia, you've covered and everybody else did or the other things they're hearing about these pictures and videos selling for all this money,
which collectibles in art are trillions of dollars in our world. That is one part of it.
[09:45:08]
VAYNERCHUK: But the smart contract, the thing behind the token, kind of like a credit card behind the plastic, kind of like a ticket behind the
piece of paper, you're going to a concert, the smart contracts are the big part of NFTs that are going to impact everyone's lives here and the social
digital currency. That blue check on Instagram does mean something, it's reality.
Everybody watching right now has kids or grandkids that have bought virtual skins on Fortnight or Roblox or needed 20 bucks from grandma to get
something on NBA2K like, this is happening and I know it is big technology. It took me months and months and months of hardcore thinking of like how
profound this was, but I genuinely believe it's there.
Just one caveat, I do believe that 98 to 99 percent of NFT projects during this early era will fail as investments because I think a lot of people are
looking at it. But that's similar to me as internet stocks in 1999 and 2000. Pets.com didn't work, but amazon.com was there, Julia, it was there.
And I think some of those projects will be here.
But more importantly, the internet changed our lives and the blockchain and NFTs will do that as well.
CHATTERLEY: I mean, I've seen you say that for a small business and I think making this practical for people is so essential to understand what
is happening here. You said look at great things like memberships for clubs for discount. Why do you need an NFT? Why do you need to use this kind of
technology in order to do what people are already doing for customers already?
VAYNERCHUK: That was literally the question that people asked me about the internet. Why would you need to buy wine on a computer? I can go to the
store. Here's why: when you do an NFT, you put things into the contract, so Lou's Pizza Shop, if he's watching, Lou, big shout out.
Lou's Pizza Shop can issue NFTs and make a thousand tokens, right? So now, he sells those tokens. The regular pizza pictures just give you a 10
percent discount. The gold one gives you unlimited free pizza. But here's the difference. That person that buys it now owns the NFT and is actually
after six months that they've had enough pizza or they move, can sell it on the blockchain. Lou gets a royalty on that transaction. Because you could
put royalty contracts under these NFTs.
VeeFriends.com, my project, I'm going to launch these. It is going to be initially sold, but then the individuals that hold it, when they sell it in
four years on Open Sea or Rarible or on VeeFriends.com, I make a royalty on that. It didn't mean that there was any more issued, but I made a royalty.
And so you can imagine for Lou's Pizza Shop, when people trade and sell that, it is not that he issued more unlimited pizzas, but he keeps making
financial on the backend of the royalty and I have to make this point -- in five years, we're all going to have public wallets just like we have public
social media accounts just like we Google each other. And Julia, we are going to look at each other's public wallets and see what tokens are there.
So for every small business, every personality, every intellectual property, the token is also a marketing collateral. The way everybody in
business needs a social media account to be relevant in 2021 is the same way in 2025, everyone is going to need an NFT strategy.
CHATTERLEY: Well, I'm going to say Lou is going to give you free pizza for life after this. But you mentioned, that's not my only observation -- you
mentioned the wine business. You also have a talent agency, for example. How does NFT apply? And are you already going to be doing NFTs for the wine
business and for your talent agency? Because you know, my understanding of this is in the ways that you cut out the middleman and as far as a talent
agency is concerned, and it goes back to your point about the art. Does the talent still need you as a talent agent in order to get a job?
VAYNERCHUK: I don't -- yes, I don't think anybody should have anybody in the middle if they're capable. Right? So if a talent is capable of building
demand and monetizing, then she or he should never have somebody take 10 or 20 percent managing them.
I think you probably know this, I know this. Everybody knows this. There's a lot of talent that doesn't want to do the business side of things,
doesn't want to do the marketing side of things. So yes, so I'll give you something -- an up and coming music artist, instead of taking -- or an up
and coming author, instead of taking a publisher, whether it's book or music, money upfront, and then share the revenue with that organization.
They can now sell to their social media audience in NFT and give them a percentage of the royalties of all their future earnings, and that's how
they raise the money instead of taking it from a publisher.
There's very substantive -- again, if you look at those early internet videos in 1995, 1996, 1997 on real TV like this, when people are trying to
figure it out, it seems silly now. I think the same thing will play out for NFTs.
Right now, I get it and I'm empathetic to it and many others have put in a lot of time and there's a big shout to all the OGs that were there in 2017,
2018, 2019 doing it.
[09:50:19]
VAYNERCHUK: But we are now in that pre-dawn era where it's going to go mainstream. I mean, NBA Top Shot is a phenomenon that has an NFT that is a
massive marketplace. And you know that Disney is coming. CNN is coming. Every personality is coming. Every author is coming. Every TikToker is
coming. Everybody is coming.
CHATTERLEY: Okay, you told me 98 to 90 percent, 99 percent of this is going to be absolute rubbish. I actually had Beeple on the show and he sort
of agreed to be that he thinks it's a bubble or it's some part of this is a bubble right now and he may have been at the peak.
VAYNERCHUK: Yes.
CHATTERLEY: How do we identify and we have to do this very quickly, you have 30 seconds -- the Amazon equivalent.
VAYNERCHUK: In 30 seconds --
CHATTERLEY: NFT in 30 seconds.
VAYNERCHUK: You have to bet on the person. I'll give it to you way less than 30 seconds, who's the person behind it? And does she or he think in
30-year terms? Or 30-hour terms?
CHATTERLEY: And we want the long term game.
VAYNERCHUK: That's right.
CHATTERLEY: Gary, come back and talk to us soon.
VAYNERCHUK: And I'm going to build intellectual property with this. I'm going to try to be as connected to you in my life.
CHATTERLEY: I was waiting for that.
VAYNERCHUK: I am serious. I am.
CHATTERLEY: Gary Vee --
VAYNERCHUK: Why not? Why not? That's it.
CHATTERLEY: Thank you for talking to us today and explaining.
VAYNERCHUK: Thank you. Thank you.
CHATTERLEY: Gary Vee there, the CEO and creator of VeeFriends, thank you. And good luck with the project.
All right, up next, bad news for those planning a relaxing weekend. An out of control rocket is due to crash land on Earth and not even The Pentagon
knows where. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: This isn't something you hear every day. The Pentagon is tracking a large out of control Chinese rocket that is set to re-enter the
Earth's atmosphere this weekend. At the moment, it's impossible to predict exactly when and where the debris will crash down.
Will Ripley is tracking this for us. Will, what a story and how worried do we need to be?
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: 2021 was supposed to be the year, Julia, that things got back to normal, right? And now, on top of all
the other things that are happening in the world, we have this giant piece of Chinese space debris hurtling around the Earth at 18,000 miles an hour.
The reason why they don't know where this is going to hit is because 18,000 miles in one hour can make the difference. So until it's actually
imminently going to collide with wherever it is going to hit, we won't know.
Now, that the odd makers are saying that it will probably be in ocean, the Pacific Ocean perhaps because this part of the world has the biggest ocean.
So if you're going to make a bet, maybe you know, say it goes down somewhere in the Pacific.
But look, there's always a chance that some of these massive pieces of debris because you're talking about something that is 22 tons, which is
about a fifth of the size of the Statue of Liberty if you're not counting the base, that may not all burn up upon reentry. There might be large
pieces that come hurtling down at very high speeds.
[09:55:17]
RIPLEY: And in the past, they tend to go down in the water and cause no damage. People talk about it on social media. There was one incident where
a large 12-meter pipe hit a small village and nobody was injured, but just imagine if debris started raining down on a densely populated city like
here in Hong Kong or there in New York.
So it is not something that people should obviously be panicking about because your chances of getting injured are far greater when you walk out
the front door if you don't wear a mask or if you are going to get your coffee run and you spill the hot coffee or you get behind the wheel of the
car. There are a lot of other things in the lives that can do a lot more damage than this Chinese rocket.
But it is just one of those stories that it brings you into this kind of sci-fi realm. You have the China Long March-5 rocket, it launched their
first module for the space station. They are going to be making more launches like this. They don't expect it to be fully operational until the
end of 2022, so we don't know what is going to happen this weekend.
The arrival could be either on Saturday, the 8th or Sunday the 9th or even, Julia, Monday, May 10th, which happens to be my 40th birthday, so you know,
part of me is thinking maybe it will just come raining down on me because I feel like -- isn't that what this mid-life thing is all about? It is hard
to realize all the stuff that is coming back down.
CHATTERLEY: Fireworks. Fireworks for your birthday. A break up in the atmosphere, Will, and you'll be sparkled with light on the 40th birthday.
RIPLEY: That's a nice way of looking at it.
CHATTERLEY: Yes, there you go. Will Ripley, thank you for that. Happy Birthday for Monday.
Okay. That's it for the show.
If you have missed any of our interviews today, they will be on the Twitter and Instagram pages, search for @jchatterleyCNN, and in the meantime, stay
safe, please. "Connect the World" with Becky Anderson is next, and I'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
