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First Move with Julia Chatterley
Disruption To U.S. Flights Over 5G Fears; Several Of UK PM's Own Lawmakers Urge Him To Resign; Blinken Meets Zelensky, Reaffirms U.S. Support For Ukraine; Experts Weigh In: When Will Pandemic Come To An End?; Disruption To U.S. Flights Over Safety Fears; Digital Wallet App "Strike" Launches In Argentina. Aired 9-10a ET
Aired January 19, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:07]
JULIA CHATTERLEY, CNN ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE. And here's your need to know.
Putin's plot? The U.S. warns of Moscow's plans to bolster Ukrainian border forces.
5G friction. Planes switched and flights grounded over the U.S. network rollout.
And backbench beef. Boris Johnson's future questioned by senior party members.
It's Wednesday. Let's make a move.
(MUSIC PLAYING)
A warm welcome once again to FIRST MOVE.
And a busy week already. Microsoft buys Activision for a window into metaverse. Weight pressures hit big banks in their ever-burgeoning purse.
In the UK, Boris Johnson's plight goes from bad to worse. Some 20 no- confidence letters reportedly dispersed.
Better news, however, from the starry universe, that massive asteroid made an easy earth traverse. Bruce Willis and Ben Affleck definitely had it
worse.
Now on global stock markets. The picture is a touch less adverse. U.S. stock market futures are higher after a top Tuesday that tipped tech to the
brink of yet another 10 percent correction.
Europe in the meantime gaining 2. Japan, however, slumping almost 3 percent to 5-month low. While Toyota warns that it won't hit production targets due
to ongoing chip shortages.
We've heard a lot about that from around the world.
Supply chain woes just one of the issues leading to market uncertainty. U.S. and European bond yields are higher yet again as investors pricing
more aggressive monetary tightening. U.S. 10-year yields edging ever closer to that key 2 percent level.
And oil currently up more than half a percent, pushing towards $90 a barrel for Brent and WTI. Crude, the UAE - the IAE, sorry -- now saying crude will
hit pre-pandemic levels later this year. All this amid serious supply concerns.
Germany warning it could shut a Russia's Nord Stream to gas pipeline to Europe if Moscow invades Ukraine.
Just one of the things we're discussing in our drivers today.
But we do begin with the 5G foray. Major airlines scrambling to change or cancel flights to the United States as concerns mount about potential
interference between critical flight systems and new 5G cellphone towers.
Emirates, Air India, All Nippon Airways, Japan Airlines, British Airways and Lufthansa all announces service cuts.
Pete Muntean joins us on this story.
So, let's just be clear. There has been a delay in the rollout of 5G in the interim surrounding many of these airports but not before a lot of airlines
have to make critical decisions to change flights or change aircraft that they're using. Pete, what a mess.
PETE MUNTEAN, CNN AVIATION CORRESPONDENT: A total mess here, Julia. And the saga, really not over even after AT&T and Verizon said they would delay
this. The real issue now, airlines say, is that they've not received enough information from the telecom companies about where they will turn off these
5G transmitters that could cause problems near airports. They say, they simply just need more information now.
And so, they're proceeding full steam ahead as if the 5G rollout was going to happen as normal, as planned. It was supposed to be a nationwide rollout
starting today.
Just want you to read now this statement from Delta Airlines. It says, "While this is a positive development toward preventing widespread
disruptions to flight operations, some flight restrictions may remain."
That is the statement from Delta. You mentioned, all of the international carriers coming into the United States that are now suspending some of
their flights. We know the British Airways has been added to the list, Emirates, Air India, ANA, Japan Airlines. The list keeps growing here.
And we've heard from the CEO of Emirates who said that they didn't really know that this was going to be such an issue here in the United States
until yesterday morning. And they call it a huge problem - maybe one of the worst he has seen in his airline career.
The issue here is all about something called radar altimeters. It's a sensitive piece of equipment on board.
Commercial airliners, cargo planes, helicopters, it beams a radio beam to the ground that gets bounced back to the plane, gives it a hyper accurate
reading of exactly how high the plane is above the ground.
But the problem is that same radio frequency is similar to the one used by these 5G transmitter towers. And pilots say that can cause a really big
issue, especially when planes are low to the ground in low visibility when seconds really count here.
[09:05:04]
Now AT&T and Verizon are behind this big push. They've delayed this, as I mentioned. AT&T by the way is the owner of the parent company of CNN. And
in its statement, AT&T says, "We are frustrated by the FAA's inability to do what nearly 40 countries have done, which is to safely deploy 5G
technology without disrupting aviation services, and we urge it to do so in a timely manner."
Clearly, a lot of finger pointing here, Julia, to get to the bottom of this. And why this became an 11th-hour crisis. But not over just yet.
CHATTERLEY: Yeah. I mean it's a communications catastrophe. And of all the critical information that you just told us about what the technical issues
might be. We knew that ahead of time. So, I sort of am puzzled about who failed and who should have acted earlier?
I mean, as you said, the telecom industry is clearly blaming the FAA and saying, look guys, you know you should have warned us earlier and made
allowances for this. But you've got the Department of Transport, you've got the U.S. government, you've got the FCC, I'll throw another regulator
there, the communications regulator.
Pete, who failed here? Who --
MUNTEAN: It's a good question. I mean, I think there are so many players involved as you layout. There is plenty of blame to go around here. The
airlines and the aviation regulators say the telecom industry did not give them enough information even about the specific location of those 5G towers
until only a couple weeks ago, which sort of compounded this problem.
The telecom industry says the aviation world has known about this for two years. But remember, over those last two years, there were plenty of other
problems that aviation was facing not to mention a global pandemic.
So, clearly, someone needs to get to the bottom here of why this really came to be this huge crisis at such a late moment. It's very Washington in
that. You know, people don't really care about this until there is a crisis. We will see, though, of course, many members of Congress already
sort of leaning into this and will wonder whether or not they will want to investigate this. Whether it was a flop by the FAA or the FCC, Department
of Transportation. We know the Biden administration was involved for a little bit. And every time the aviation regulators and the equipment
manufacturers in all of this. The airlines still, they'll call it their number one safety issue right now. Julia.
CHATTERLEY: Yeah. I'll tell you what. It's a U.S. embarrassment. So, they do need to get to the bottom of it. Because this should never have
happened, a critical time for the industry as it tries to recover.
Pete Muntean, later in the show, we will hear from the CEO of Emirates and the CEO of Airlines for America. So, we'll ask them who they are blaming.
We shall see.
Boris Johnson in the meantime, in growing trouble with members of his own party. Someone out, openly talking about getting rid of him. One has just
defected to the opposition Labour Party. The prime minister face fierce criticism in parliament earlier about alleged COVID rule breaking.
(BEGIN VIDEO CLIP)
DAVID DAVIS, BRITISH CONSERVATIVE MP: But I expect my leaders to shoulder the responsibility for the actions they take. Yesterday, he did the
opposite of that. So, I will remind him of a quotation altogether too familiar to him of Leo Amery to Neville Chamberlain. "You have sat there
too long for all the good you have done. In the name of God, go."
(END VIDEO CLIP)
CHATTERLEY: Salma Abdelaziz joins us from London. Every prime minister questions now on a Wednesday, I think, becomes a grilling and a hot under
the collar at the very least moment for Prime Minister Boris Johnson, suffering the indignity there of even one member of parliament crossing the
floor and moving to the Labour Party from the Conservative Party.
Salma, how long does he got?
SALMA ABDELAZIZ, CNN REPORTER: Another really loud and boisterous session today. But, Julia, if you were looking for any answers from Prime Minister
Boris Johnson on party gate. If you were looking for him to respond to allegations, he simply wasn't. He's willing to talk about vaccinations,
COVID, anything but party gate. Every time he was asked, he deflected, he denied. He kicked the can down the road pointing to an investigation. But
increasingly, his own party is not waiting on that investigation. They are running out of patience.
Before PM cues even began there was a very dramatic moment. You pointed it out. One of the members of his own Conservative Party defecting, a very
rare act literally crossing the aisle and going to sit with the opposition. And the hits kept on coming.
You also played that soundbite there, the former top ally, the country's former Brexit secretary pointing at him and saying. "In the name of God,
go." Really important words strike at the heart of Prime Minister Boris Johnson, who's always sort of fashioned himself as a modern-day Winston
Churchill. And we already know that handful of MPs in the Conservative Party, now willing to trigger a leadership contest.
Some have written a letter, essentially calling for a no-confidence vote. And every day, this prime minister keeps taking hits, Julia.
[09:10:00]
That's the issue. It's not over yet. This is in headlines now for weeks in this country.
And again, you still have that investigation in place and the prime minister's defense I think here grows weaker and weaker. And the opposition
pounds on that because remember first, there was a denial, there were not parties, no parties, no parties.
Then there was an even that Prime Minister Boris Johnson thought it was a work even and now his latest excuse is that he didn't know the rules. That
the very man who enforces rights sets the rules is saying he didn't know he was breaking the rules during one of these events. I mean, Johnson is a
great political escape artist. But I really think he has to be Houdini to get out of this one. Julia?
CHATTERLEY: I was about to say is, defenses though that was is incredibly lame. I'm sorry. Telling the British public that no one told him that the
garden party at No. 10 at heights of the first lockdown was against the government's own rules. Yeah. And they're having it. I leave it in the
British public's eye, this Salma, quite frankly.
Let's talk about those letters though because this is what's critical now. We need a threshold of 54 in order to trigger a broader confidence vote.
That's what's required. Do the votes come? Some MPs are speculating that they'll come as early as this week. What do we think?
ABDELAZIZ: Julia, we have not reached that threshold yet. But what happens is, is this a poisoned chalice. So, day by day, that domino effect takes
place. I hear of more and more Conservative MPs stepping up. And you know what makes the crucial difference, Julia, where I really felt that the tie
turn was after last weekend because what happened is, MPs went home. They went back to their towns.
And that's when they got flooded with e-mails from angry voters, frustrated constituents, saying how could you let this man still be prime minister. I
made sacrifices. I followed the rules. I won't vote for you if he continues to be the head of this party.
So, if MPs start to feel pressure back at home, if they start to feel threatened over their own seats, their own electability. And remember, this
is Boris Johnson's true success. He's seen as a winner at the ballot. He sees that someone who's united the Conservative Party, who got Brexit done
when no one else could. If he's no longer that winner, if he's no longer able to win those votes for his own party, you could very well see MPs
saying, look, it's time to go. You don't represent us anymore. Julia?
CHATTERLEY: Yeah. That's - what did the British public want. And we act accordingly.
Salma Abdelaziz in London. Thank you.
OK. Let's move on.
U.S. Secretary of State Antony Blinken is in Kyiv giving a press conference with his Ukrainian counterpart. This comes after Blinken met with the
Ukraine's president in Kyiv reaffirming Washington support. Blinken says Russia has plans to send even more troops to the Ukrainian border.
(BEGIN VIDEO CLIP)
ANTONY BLINKEN, U.S. SECRETARY OF STATE: We know that there are plans in place to increase that force even more on very short notice and that gives
President Putin the capacity also on very short notice to take further aggressive action against Ukraine.
(END VIDEO CLIP)
KOSIK: Fred Pleitgen is live in Moscow with the latest.
That was the Americans putting their money where their mouth is, I think, today to increasing military aid to Ukraine and a further message of
solidarity. The question is, does this change the calculus in Moscow particularly ahead of that key meeting between the foreign ministers on
Friday, Fred? What do you think?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I think for the Russians for most it probably doesn't. In fact, the Russians have
been saying for instance with some aids - military aid, that the Ukrainians have received from the Brits. So, that's something that could further
escalate the situation rather than deescalate the situation.
The Russians have also been talking about the fact that they believe that right now, the situation between Ukraine and Russia in that border area,
that it is a very dangerous one.
And Julia, just a couple of minutes ago, I was at an event of the Valdai Discussion Club here in Moscow. And I was able to ask the Russian Deputy
Foreign Minister Sergey Ryabkov about the situation in that area. He is of course the one who led the Russian delegation in those security talks with
the United States last week in Geneva. And I flat out asked him just how close he thinks or how big the threat is right now of a possible war? Let's
listen in.
(BEGIN VIDEO CLIP)
SERGEY RYABKOV, RUSSIAN DEPUTY FOREIGN MINISTER: I do believe that there is no risk of a larger scale war to start to unfold in Europe or elsewhere. We
do not want and will not take any action of aggressive character. We will not attack strike in wait quote/unquote, "whatever Ukraine." It has been
said dozens of times in recent weeks. And I just reconfirm this.
We see the threat of Ukraine becoming ever more integrated in NATO without even acquiring a formal status of a NATO member state. This is something
that goes right to the center of Russia's national security interests.
(END VIDEO CLIP)
[09:15:15]
PLEITGEN: Some very important words there from the Russian deputy foreign minister. He also added that Russia as he put it would do everything it
could to reverse what he was just talking about there, but he did say they would do it by diplomatic means, Julia.
CHATTERLEY: Fred, I want to get your impression of the rumblings that we're seeing in Germany and the tensions within the German coalition government.
The leverage that the Nord Stream 2 gas pipeline presents because there is real suggestion, it seems, perhaps from Germany that this could now be used
as leverage over the Ukrainian tensions too. What do you think on this one?
PLEITGEN: You know what, I think - I think that that is probably one of the most important developments that we've probably seen over the past maybe 24
or 48 hours or so.
CHATTERLEY: I agree.
PLEITGEN: Because of course we have seen the fact that the German Foreign Minister Annalena Baerbock, she has always been very critical of the Nord
Stream pipeline. She obviously yesterday in her meeting here in Moscow with Sergey Lavrov with the Russian foreign minister said that, should there be
further aggression on the part of Russia, should there be a Russian attack, of course, it would affect the pipeline, which of course is a critical
topic in Germany as well.
It was never really clear however whether or not, Olaf Scholz, the German chancellor who is in the party that Gerhard Schroder is in, who is the head
of Nord Stream 2, whether or not he was on the same page. And we have heard from people within the social democrats in Germany that they were saying,
look, they believe this is only an economic project, not a political project.
But now we've heard Olaf Scholz also saying that all this would have and could have consequences for the Nord Stream 2 pipeline. So, there might be
a real shift in Germany. Where we are now seeing the Germans or at least the German leadership in the form of the chancellor not claiming anymore as
they have for a very long time that they see this is a purely economic project to say that, yes, of course, there is a political dimension to
this. And yes, of course, it would and could be affected should the situation there near Ukraine further escalate.
I think it is a really, really big development. Of course, Nord Stream 2 was also one of those huge points in that whole conflict that we are seeing
unfold there right now.
CHATTERLEY: Yes. I think it's a little naive perhaps to assume you can separate economics and politics on this one.
Fred Pleitgen, thank you so much for that.
OK. Coming up here on FIRST MOVE.
What is it going to take a draw a line under the pandemic?
I hear the views. There are key figures in the debate telling us what still needs to be done.
And a 5G failure is the new nightmare for airlines. Why the CEOs of Emirates and Airlines for America are so frustrated?
That's coming up. Stay with us.
(COMMERCIAL BREAK)
[09:20:25]
CHATTERLEY: Welcome back to FIRST MOVE coming to you live once again from New York.
Three weeks in London, lots of trips past The Shard and my dog Romeo is treated so incredibly well. Getting him back home was seriously hard for
me, too. Speaking of K9s.
The fur really flying on global markets this week as investors doggedly pricing more aggressive Central Bank tightening.
U.S. equity futures higher right now after a rough Tuesday.
To January jolt, with all the major averages falling 1 percent or more.
The Nasdaq down 2.5 percent to the brink of correction territory.
Bond yields sure to be key to the direction of stocks from here on out.
U.S. 10-year yields hitting two-year highs creating new headwind for riskier assets like growth stocks and digital assets like crypto, too.
Bitcoin soft to today and down some 35 percent from its recent highs.
We're going to be discussing that, too, later in the show.
For now, though, with just two weeks to go until the start of the Beijing Winter Olympics. Arriving athletes will be kept away from the wider public
to protect them from COVID infections. It's called a closed loop management system.
Selina Wang joins me now.
Wow! The battle to continue to contain COVID there ahead of the Winter Olympics, Selina, continues.
Oh. No, I don't think we have Selina right now. We will try and get back to her. For now, we will carry on.
One of the questions for 2022 around the world I think will be when do we perhaps accept, we must vaccinate to prevent severe illness and death
rather than to start actual infections? It matters for the development of variant vaccines and for achieving better equity in vaccine distribution
around the world.
It also matters for defining an end to the pandemic and setting a date for it both right now proving equally elusive. We're all looking for a point
where COVID-19 becomes a manageable public health issue comparable to HIV or the flu. And that's when it becomes known as endemic.
Well, I moderated a fresh debate on vaccine equity at the World Economic Forum and asked five respected experts. Will the pandemic phase end this
year?
(BEGIN VIDEOTAPE)
ADAR C. POOMAWALLA, CEO, SERUM INSTITUTE OF INDIA: Based on the hospitalizations coming down, I think, you know, we will have to make a
shift and say at some point, hopefully, by you know end of this year that you know if you double, triple vaccinated, and, you know, hospitalization
rates come down and debts come down, we can make that statement. Of course, that's for the experts to decide that. But I don't think that's outside of
our grasp if all these things you know fall into place and if we don't get new variants of concern and we move on with the vaccination coverage, I
think. I think that should be possible. I don't see why not.
CHATTERLEY: Very long sentences but where you were headed there, which is where I was pushing you is in equality. We hopefully end of the pandemic at
least what it looks like, Gabriela.
GABRIELA BUCHER, EXECUTIVE DIRECTOR, OXFAM INTERNATIONAL: Yes. I think it is possible if we - if we change the model.
CHATTERLEY: Yeah.
BUCHER: If we radically overhaul it and understand the enormous urgency and the importance of equitable distribution, which means production at scale
across the world where needed. And the more it looks expensive or different, it's not. And it doesn't have to be. It's about distributing
those resources differently. At the moment they are being hoarded by a few companies and a few shareholders. That can be invested to really transform
the way we are addressing the pandemic.
CHATTERLEY: John?
JOHN NKENGASONG, DIRECTOR, AFRICA CENTRES FOR DISEASE CONTROL AND PREVENTION: I think greater cooperation, the greater solidarity is,
reroutes to ending this pandemic whether we end it in 2022 or in 2023. We need to really state that cooperation and solidarity.
CHATTERLEY: Thank you. Seth?
SETH F. BERKLEY, CEO, GAVI THE VACCINE ALLIANCE: I don't disagree with Gabriela, but distributed vaccine across the world is not going to happen
in time for this year. Today, we have to get the vaccines out. The best we know right is they protect against severe disease and death and we got to
do it before there is a variant that changes the equation. But right now, we have the tools. And the issue is making those available to everybody who
needs them across the world. And we can do that.
CHATTERLEY: Yeah. We have to get ahead of the next, the worst variants that we face and the way we do that is to try and get a majority of the world
vaccinated, wherever they are.
Final word, Mike.
[09:25:09]
MICHAEL RYAN, EXECUTIVE DIRECTOR, W.H.O. HEALTH EMERGENCIES PROGRAMME: It won't end the virus this year. They may never end the virus. These viruses
- the pandemic viruses end up becoming part of the ecosystem. What we can end is a public health emergency. And that's why the director, Dr. Ted
Ross, declared that emergency the end of January 2020.
The issue is, it's the death. It's the hospitalizations. It's the disruption of our social, economic, political systems that's caused the
tragedy, not the virus. The virus is a vehicle. It's how society has reacted to that virus. And the presence of it. And as Gabriela said, long-
standing inequities, in hospital, in health access. Long-standing social inequities. Huge internal inequities within countries, not just between
countries.
So, yes, we have a chance to end the public health emergency this year. But it won't end if we don't. And that's the reality that this tragedy will
continue. There is a chance.
And remember in this, people talk about pandemic versus endemic. This word endemic. Endemic malaria kills hundreds of thousands of people, endemic
HIV, endemic violence in our inner cities. Endemic in itself does not mean good. Endemic just means it's here forever.
What we need to do is get to low levels of disease incidents with maximum vaccination of our populations. So, nobody has to die. That's the end of
the emergency in my view. That's the end of the pandemic.
(END VIDEOTAPE)
CHATTERLEY: All right. The market open is next. Plenty more on this issue to come. Stay with CNN.
(COMMERCIAL BREAK)
[09:30:00]
CHATTERLEY: Welcome back to FIRST MOVE.
U.S. stocks are up and running this Wednesday in this smiling thumbs up there from the New York Stock Exchange. And the best atoned markets too
after Tuesday's across the board slump that took the Nasdaq below key technical levels.
That said, the bond dip strategy giving the bears a slip, once again. As you can see, though, wow, look at that under a bit of pressure in early
trade, too.
Video game maker Electronic Arts moving higher for a second session. Investors believe it could be a takeover target after Microsoft's mega deal
for Activision Blizzard.
And more fallout from Tuesday's merger. Sony shares tumbling more than 12 percent in Tokyo trade today as investors weighed in newly competitive
video game landscape for its PlayStation platform.
And Bank of America, the last of the big U.S. financials to report earnings both from beating profit expectations and seeing shares move higher. Bank
of America seeing a 28 percent profit jump.
Now back to one of our top stories today, too, in 5G turbulence. Several international airlines canceling and altering flights to U.S. airports over
safety concerns.
Emirates is one of them. And our Richard Quest spoke to the company's president in an exclusive interview.
(BEGIN VIDEOTAPE)
TIM CLARK, PRESIDENT, EMIRATES AIRLINE: The truth be known, we were not aware of this until yesterday morning. To the extent that it was going to
compromise the safety of operation of our aircraft and just about every other 777 operators to inform the United States and within the United
States.
It came to a hit. It was known by the U.S. operators, probably a little bit more than we knew, and we have evidence of letters have been written to the
secretary of Transport in the U.S. government alerting that group to what was - what was likely to happen. And its consequences.
As we were aware of a 5G issue, OK. We are aware that everybody is trying to get 5G rolled out. After all, it's the super cool future of whatever may
be communication information flow.
We were not aware that the power of the antennas in the United States had been doubled compared to what's going on elsewhere. We were not aware that
the antenna, themselves, are being put into a vertical position rather than a slanty position. So, on that basis, we took that decision late last night
to suspend all our services until we had clarity.
RICHARD QUEST, CNN HOST, "QUEST MEANS BUSINESS": What do you make of this situation? As someone who might describe as sort of the elder statesman of
the industry. I guess that's where a polite way of saying you have been around a while. But you - you see many things. What do you make of a
situation where we can get to a position of 5G which is in other European airports quite safely and yet the way the rollout has been done in the
United States has caused basically potential chaos?
CLARK: I guess I need to be as candid as I'm normally am. And it's like this is one emersed delinquent utterly irresponsible issues, call it what
you like, I've seen in my aviation career. Somebody should have told them a long time ago that it would compromise safety of operation, of aircraft in
metropolitan areas with catastrophic consequences if this was allowed to continue. I think that message got through at the very, very late stage.
That is why you see the suspension.
(END VIDEOTAPE)
CHATTERLEY: Joining us now Nicholas Calio, president and CEO of American -- Airlines for America, which speaks to several big airlines in the United
States.
Nick, I know you were listening to that, utterly irresponsible, catastrophic risks potentially being taken. It seemed like a communications
catastrophe. What happened here in your mind?
NICHOLAS CALIO, PRESIDENT AND CEO, AIRLINES FOR AMERICA: Well, this issue has been ongoing a long time, Julia. And first of all, thank you for having
me.
And it is irresponsible. We filed comments. We, Airlines for America, as well as the Transportation Department and the Federal Aviation
Administration with the Federal Communications Commission over time. And basically, we pointed out the dangers of the bandwidth problem and the fact
that there could be interference with radio altimeters because how close the spectrum was to where the altimeters are used.
And we don't feel like we got a very good hearing. Basically, we feel like we're ignored. So, this situation festered. And it became more and more
intense as the deployment was about to happen. And you know, for the Federal Aviation Administration and Department of Transportation, the
bottom line on everything is safety.
[09:35:05]
Safety for passengers. Safety for cargo. And that's something they cannot compromise on. So, we kept making our case. We felt like we were ignored
for a long time. But the fact of the matter was, all sorts of planes were going to be cancelled, whole fleets were going to be grounded. It's a very
untenable situation.
The good news is that the administration right up to the president, the secretary of Transportation, National Economic Council, aviation
stakeholders across the board, with the manufacturers, and the airlines got together, and the telecommunications companies finally started talking.
Highly complex technical issues here that need to be worked out almost on a tower-by-tower basis. So, we're at a good place right now. The problem is
not solved. And we got a lot of work to do. And everybody needs to keep doing this work with a real sense of urgency to get it done so that planes
can keep flying and we can deploy 5G at the same time.
CHATTERLEY: I mean, it might be a good point to be at if that we are now seeing finally communicating and that risks to your point were avoided for
the most part. But not without significant disruptions to some of the international airlines and we heard from the president of Emirates there
that said they were in some ways bewildered by not understanding what the risks were in and the significant power of the 5G rollout that was taking
place in the United States.
Nick, who is at fault here? Because the telecom companies that obviously have suspended the decision temporarily, we assume, are blaming the FAA and
saying they drag their feet. Is the FAA at fault?
CALIO: I don't think so. I think the FAA is processing things the way they normally do and it's slower than some other agencies because of the safety
factor, which cannot be compromised. If you want to cast blame, I think that's probably not a very good exercise. The Federal Communications
Commission at some point needs to open up and at least answer some of the questions which they never do.
We filed a number of comments with them. We sent petitions to them. They never even answered them.
So, let's put the blame aside. We've got a problem. We got to solve the problem. That's taking collaboration. And collaboration between Verizon and
AT&T, the airlines, the manufacturers, like Boeing and Airbus and Collins and Honeywell.
So, we're focused on going forward and making sure that the problem gets solved. Because there could be significant disruptions if the problems
aren't solved. This is not something that is going to go away overnight. And it's going to take a lot of cooperation from all the different parties
to get this done. And that's why it's so late now. We're if a good place. We're listening to each other. Again, these are highly technical issues.
And the experts are working on them with the FAA.
CHATTERLEY: Yeah. And I get your point about diplomacy and throwing blame at this stage perhaps not very helpful. But I would in your case as well be
defending an industry that's been battered and battled over the last two years and actually these kinds of disruptions are the last thing that was
needed at this moment.
Nick, is there an easy fix because other nations have managed to roll 5G without these kinds of problems, notwithstanding the fact that this is very
different and the frequencies of course that some of these planes are very similar. So, there are technical differences that we have to bear in mind.
What is the fix here?
CALIO: The fix basically is working out where the bandwidth is. The amount of power you use, the tilt of the antenna, the placement of the antennas.
So, you know overseas outside the United States, excuse me, what happened was the versions of the Federal Communications Commission and FAA worked
together in some cases governments stepped in, like in France, to go even further than the fixes or the mitigations that they put in place.
So, it has to do with where the antennas are close to long range. The tilt of the antenna. You can say are down rather than up. The amount of power
used and again, some of these other countries, you know they claim it comes down in other countries, it can be done here. The FCC really started
bandwidth too close to the spectrum that the radio altimeters used. And that what compromises the radio altimeter.
So, there are mitigations that can be put in place. It's just going to take time to do it. But the fix can be almost immediate tower-by-tower. This is
not -- we're not talking about never deploying. We're talking about getting it right, taking into account the dangers are to flying and to altimeters
because our safety systems often rely on the radio altimeter. It's not just you know how far you are from the ground. It also can have an impact on the
reverse thrusters that will stop an airplane you know when you are landing. All sorts of different things like that.
[09:40:03]
CHATTERLEY: Yeah. Nick, I have about 10 seconds, but very quickly, would you be if favor once we fix this of an investigation just to work out what
happened and how we make sure something like this doesn't happen again?
CALIO: I think that will happen naturally with the Congress. The Congress is very interested in this issue and how did it happen.
CHATTERLEY: I agree. Nick, thank you for your time.
CALIO: Thank you, Julia.
CHATTERLEY: Nick Calio, president and CEO of Airlines for America. Great to chat to you as always.
OK. Coming up.
Making international payments frictionless, a strike expands into Argentina or it seeks to expand people's access to digital payments. The Colorful CEO
joins us next.
(COMMERCIAL BREAK)
CHATTERLEY: A breaking news into CNN. The U.S. secretary of state is in Kyiv meeting his Ukrainian counterpart. And moments ago, discussed helping
Ukraine defend itself in the event of further Russian aggression. This after U.S. approved $200 million in security assistance to Ukraine last
month.
(BEGIN VIDEO CLIP)
BLINKEN: We have given more security assistance to Ukraine in the last year than any point since 2014. And as I say we are doing that on a sustained
basis. The deliveries are ongoing. The damage as recently as the last few weeks, and more scheduled in the coming weeks. Should Russia carry through
with any aggressive intent and renew its aggression and invade Ukraine? We'll provide additional material beyond that that is already in the
pipeline and that will further aid in defending Ukraine.
(END VIDEO CLIP)
CHATTERLEY: OK. Making global payments instant, easy and pretty much free as using social media. That's the mission of Strike a digital wallet built
on bitcoin's payment protocol known as the lightning network. Now, Strike has just launched in Argentina. It's already present in El Salvador. And
thinking about further expansion across Latin America, where many people have no access to traditional banks are battered by high inflation and like
trusting governments and unstable monetary systems.
Joining us now is Jack Mallers, the founder and CEO of Strike.
Jack, Happy New Year and welcome back.
I am sure many of my viewers will remember our first conversation, but you are back. And I just want you to remind my viewers if they didn't watch our
previous conversation, what's the vision of Strike? What are you aiming to achieve?
JACK MALLERS, CEO, STRIKE: Julia, I'm back! Did you miss me?
CHATTERLEY: Hi.
[09:45:00]
MALLERS: Of course, you did. Yeah, so here's the mission at Strike, Julia, with bitcoin, not only do we have the best monetary asset in human history
we have the best monetary network in human history. What do I mean by that Julia? For the first time ever we can escrow value, we can move money
across borders, across space, across time, from a consumer to a merchant. We can move a bare instrument from A to B at no cost and instantly.
And so, that is something, Julia, Visa can't do, Western Union can't do, PayPal can't do that. It is an innovation in a payment experience. So, what
Strike does is not speculate on the price of bitcoin. Whether it goes to the moon, whether it staggers a little bit longer, it doesn't matter to us,
is that we connect your bank account, stable coins, your cash collateral, and use this monetary payment network to escrow the value under the hood as
a superior payments rail and a superior payments experience compared to the Visas and the Western Unions of the world.
CHATTERLEY: Yeah. And what struck to me in our last conversation was the cost, because you only charge execution costs, and this is critical.
Particularly when we're talking in parts of the world and we'll come to it like Argentina, remittance costs in places like are multi-percentage
points. Talk to me about the cost of doing this too for individuals that are using the product.
MALLERS: Julia, it doesn't cost us anything, think about it, why does Western Union charge 20 percent sometimes? Well, because every single
month, they have rent to pay in 200 countries. You know what rent I got to pay? Just this gorgeous empty closet. I don't have any something cost. I
don't have any fixed costs.
Bitcoin sold a lot of the monetary functions that we know as very expensive with cryptography and with math. And so, I can escrow a bare instrument in
bitcoin. It's worth the same amount in Chicago as it is in London, as it is in Nigeria, as it is in Argentina and I can zip it around the world
instantly for free.
And so, the novel thing about what we do though, Julia, is we don't want to expose everyone to the inherent volatility. Listen, if you think bitcoin is
going to the moon. Own it. If you don't like it, don't touch it.
But what we can do is take your dollars and escrow them around the world over the bitcoin network. So, think about this, what if I want to send
money from Chicago to London. What we can do is take dollars out of your bank account, turn it into bitcoin, zip that value to London instantly for
free. You blink. You'd missed it. it goes so fast and it costs nothing and then we turn it back into British pounds. And so, Western Union payment
that may take four days and charge it 10 percent because they got to pay rent and the capital of the UK. Well, it didn't cost me anything and it
happened in less than a second. That's innovation and that's how we use bitcoin in a monetary network.
CHATTERLEY: Yeah. And the speed, that's key here. Because to your point about Western Union or other places that can do this. There will be people
watching this saying, hey, but isn't that what you do in U.S. dollars but it's the speed of transaction that takes place here that you knock out a
lot of the sort of volatility and the risk for slippage risk because it's called in the industry of the transaction between currencies which is key
here too.
Talk to me about the Argentinian launch, why this part of the world and what's the role of stable coins to our point about broader volatility? What
itself the role that that's going to play, too?
MALLERS: Yeah. You got it. So. Argentina is a country that's had eight currency crises since the Central Bank was founded. They created the
Argentina peso and tethered it to the dollar but never fully dollarized, Julia. So, their currency is rapidly devaluing, and inflation is going to
exceed 50 percent.
So, you're talking about a place that uses the dollars unit of account, demand for the dollar so high that it paralleled black markets. It's worth
twice as much. And so, what we want to do is extend this global monetary network that's better than Visa, better than Western Union, and give them
superior payments.
Now the trick, is how do I replicate the Chase Bank that we have in the U.S. in Argentina? You cannot buy and move more than $200 a month in
Argentina. They ban it because more use of dollars in a credit system is going to put a run on their Federal Reserves at the bank.
And so, how do I get around -- how do I want to give them dollar cash collateral that they can use, if they want more exposure to bitcoin. Go get
it. If they want less, stay in some dollar cash collateral. And then we use that collateral. We use that dollar balance to move money over the
lightning network.
And so, our solution in El Salvador at first was to use stable coins. In Argentina use stable coins. It's a novel way for to us get dollars into
other parts of the world where traditional banking systems aren't an option for us. And so, we use stable coins as the equivalent to the Chase Bank
that I use here in the United States.
CHATTERLEY: What are the government and the authorities in Argentina saying to you? Because it's funny, I watch your progress in El Salvador and I saw
the rating agencies saying to El Salvador, obviously, we know the president there has his own interest in bitcoins specifically saying that their
holdings and the loss of value of their bitcoin holding is actually undermining the broader financial system because it's putting that credit
rating profile at risk.
[09:50:04]
And we know with these countries, that matters for how they raise money. It matters for investment. So, there is a sort of a crossover here of assets
and concerns.
Jack, what are the authorities in Argentina saying in this sort of separation of church and state here for want of a better phrase important
in your mind?
MALLERS: You know what I think is interesting, Julia, is it doesn't matter. Think about it this way. When you operate on an open monetary network, the
global open monetary network, you know whose opinion matters? The consumer. And that's it.
There is nothing they can do about it. The consumer elects a better financial experience through us or through anyone that operates on the
bitcoin monetary network. Then that's going to be the winner. We saw this in the Internet, Julia. The reason I have a Facebook account and not a
Myspace account is because Facebook won the experience.
When you have an open system, where it's free to compete for the consumers experience, then that's when you see innovation and the consumer elects the
winners, not the government. And that's what these people want. And so, I'm here to deliver a good experience to people all over the world. And listen,
whether some government hates me, some government loves me. You know what, I don't give a bleep.
CHATTERLEY: Thank you for bleeping yourself there and saving me the need to do it. It was interesting. I spoke to the head of the IMF about this one
and allow El Salvador to make that decisions, and the IMF chief said to me just because you can do something doesn't necessarily make it a good idea.
I know - you can comment on that, but you don't have to. You went to the IMF and did a presentation to sort of explain to them what you are doing
and some of the broader issues and experiences and I believe you used tortilla chips, raisins and peanuts as part of your presentation. Jack, how
is that presentation and how was the feedback from the IMF?
MALLERS: Yeah. Well, the IMF look in the mirror, and say that to themselves. This is a true story, Julia. I was in the home of a
multitrillion dollar asset manager. And this is the story I told to the IMF, is that right now in order to move money around the world, think of it
as cumbersome raisins, there is tortilla chips and all these raisins and what I did is if you take the legacy system, you got one tortilla chip on
the right. One tortilla chip on the left, right?
And there's all these intermediaries in the middle. There are tortilla chips on the middle with all these raisins that I equivalated to dollars.
They're like all these dollars you got to pay rent, there's fixed costs, there's cheap settlement, there's 30 cent swipe fees that visa invented out
of the sky. There is no logic to that. They're just bullies.
And what I did is I said I can replicate all of this muck of all of these tortilla chips, which are legacy institutions and all these raisins, which
represents dollars and all the rental all over the world and all the legacy costs that don't make any sense. It only made sense when my grandfather was
my age. And I can do the same thing with peanuts.
And so, I took the load to the IMF. I said here is a tortilla chip that want to send money across the world. Here's the tortilla chip that wants to
seed money across the world and a peanut which represents bitcoin can get it across the world instantly and for free without the muck of Western
Union, without the muck of Visa. There's no swipe fee. There's no intermediaries in this monetary network. And it's going to dematerialize
all the existing muck in old stale tortilla chips with disgusting sun dried raisins and all we have to do is take the peanuts to remove them all.
Now, listen, IMF, you don't want to touch the peanut then don't. We can debit and credit from bank accounts, we could use stable coins. We're just
using bitcoin to better escrow value in a way that Visa has no chance.
CHATTERLEY: Jack, and what was their response? We need to go and have lunch now because we are starving. Never mind anything else.
MALLERS: There are things I can't disclose. But the IMF is very entertained and excited about a new era of cross border payments. How about that.
CHATTERLEY: I think that was very diplomatic. Jack, we've ran out of time. And I have 20 more questions for you. You are invited back soon, come back
please and talk to me, because you've made some really punchy comments about other things. Good luck in Argentina. We shall reconvene. And yeah,
we'll reconvene about that conversation about feeling the wardrobe as well.
Jack Mallers, CEO of Strike. Always a pleasure.
MALLERS: I'm a punchy guy, Julia. Happy early Valentine's Day.
CHATTERLEY: Oh, wow. There you go. Jack. You get me into trouble. Good-bye. We'll be back after this.
(COMMERCIAL BREAK)
[09:56:30]
CHATTERLEY: Welcome back to FIRST MOVE. And I'll be completely honest. I got so sidetracked there, I blocked the rest of the show. So, that's all we
got time for. Stay safe.
"CONNECT THE WORLD" with Larry Madowo is next. And I will see you tomorrow.
One thing I learned to shut up. Great to be with you. We'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
END
