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First Move with Julia Chatterley
Power Plant Worker: Chance of Disaster is 70-90 Percent; Civil Defense Courses Offered in Taiwan amid Chinese Threat; Inflation is still Top Concern for Investors; Reports say Cineworld may Flip for Chapter 11; Survey Predicts Lower Air Fares in the Fall; Drought Compels Israel to Pump Water into Sea of Galilee. Aired 9-10a ET
Aired August 19, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
ZAIN ASHER, CNN HOST, FIRST MOVE: A warm welcome to "First Move". I'm Zain Asher so good to have you with us. On the show today nuclear nervousness,
urgent calls have stopped the shelling near Europe's largest nuclear power plant in Ukraine fears that a wartime accident could spark a new Chernobyl.
We are live for you in Eastern Ukraine.
Plus, the great Chinese heatwave economic concerns grow as Beijing issued a nationwide drought alert and officials move to shut down factories and
conserve power. We'll have the latest from Beijing for you as well.
Chinese growth is just one factor weighing on global markets as Friday U.S. stocks look set for weak open with the S&P 500 in danger of breaking a four
week winning streak uncertainty over the Fed's rate hike path also affecting sentiment as well as this week's warning that the U.S. housing
market has fallen into recession.
Europe on track for a weekly loss too as new numbers show German wholesale prices taking their biggest month-over-month jump on record in July due to
in part rising energy costs driven by the Ukraine war lots to get to you today; let's begin with the latest from Ukraine.
Ukraine and Russia continue to blame each other finger pointing for explosives landing perilously close to the Zaporizhzhia Nuclear Power plant
in Central Ukraine. A pro-Russian official says the security around the plant is being strengthened after U.N. Secretary General Antonio Guterres
called for the area to be demilitarized after meeting with Ukrainian President Volodymyr Zelenskyy on Thursday.
Sam Kiley joins us live now with more. Sam, we're also seeing images now of Russian vehicles inside at the turbine holes at the Zaporizhzhia Nuclear
Plant. What more we learning from that?
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the presence of the Russians has not been contested since March fourth, when they took over
the nuclear power station by force of arms, they fired main guns from battle tanks close or even on parts of that location, sparking fears then
that there could be some kind of nuclear catastrophe. Now those fears have returned, particularly in the last few weeks because the Russians have been
using that location as somewhere to fire upon Ukrainian cities across the Dnieper River.
And that raising fears that of course that the Ukrainians might counter attack Ukrainians insisting that they haven't and they will not. But that
notwithstanding, this is what it looks like for the people living in the shadow of that nuclear power station.
(BEGIN VIDEOTAPE)
KILEY (voice over): It's an all too routine seen a Ukrainian home destroyed by a missile. But here the lucky escape of a young couple is overshadowed
by a potential catastrophe. The first Russian rocket hit the local soccer pitch and sent them scrambling into their basement safe from the second.
After what happened we jump in every sound Andrey says the Ukrainian authorities say that both rockets were fired by Russian troops from the
grounds of a nuclear power station captured in March. The International consternation over the future of the Energoatom nuclear power station is
very obvious when you stand here.
And you can see the six reactors of the biggest nuclear power station in the whole of Europe, the United Nations, and the international community is
all reacting in horror at the mere thought that this could be at the center of fighting. Ukraine blames Russia for using the nuclear plant as a fire
base, and insists that it's not able to shoot back for risk of blowing up the nuclear facility.
MYKOLA STUPAK, DISTRICT CHAIRMAN: The Russian occupies shoot all the time to provoke the armed forces of Ukraine and to spread panic among the
people. We understand that the power plant may explode because of their actions. I just don't understand. Maybe they just don't get it, he told us.
KILEY (voice over): The United States, the United Nations in Ukraine has all called for Russia to leave the nuclear plant and for it to be
demilitarized. These demands are growing in volume as the bombardment of Ukrainian towns allegedly from around the six nuclear reactors, has
intensified. Andrey tours worked at the plant until he escaped the Russians.
But then he was recaptured. He says and tortured before being released. Now he's in hiding in Western Europe. And he says the possibility of a disaster
is very high. I would say 70 to 90 percent, if we're talking about the most optimistic scenario; I'm very worried about it.
[09:05:00]
KILEY (voice over): And civilians in the Russian occupied town next to the plant have been stuck in traffic jams trying to flee a potential nuclear
escalation. Ukraine's claims that it hasn't shelled the nuclear site cannot be verified. But there's no doubt that Russia has used it as a safe
location to attack Ukraine from. Ukrainians have been conducting nuclear disaster drills in cities nearby.
Both sides have said that some kind of incident is imminent, and could cause massive radioactive contamination or a meltdown a cataclysm that
could be felt far beyond Ukraine, even in nearby Russia.
(END VIDEOTAPE)
KILEY: That was one of the real problems being faced here is not just the military, but also technical because the Russians are saying that they want
to be able to divert the electricity produced in this nuclear power station to Crimea, which they have illegally annexed after they invaded back in
2014.
That itself is we understand fraught with technical problems. One of the worst things looming over this nuclear power station is as any kind of
interruption to the power to it, in particular, to the cooling systems. If they break down, then the consequences really could be extremely
catastrophic, Zain.
ASHER: And just in terms of the IAEA being able to get inspectors to the power plant. What are we hearing on that? What's the latest on that front?
KILEY: Well, they, the United Nations has demanded and joined the international clamor for a demilitarization of this nuclear power station.
Now it's our understanding that while it is under illegal military occupation by the Russians, notwithstanding the fact that the Russians have
some of their own technicians there alongside Ukrainians that the International Atomic Energy Authority can't risk it sending people into
that location is very risky activity for them.
There are also some logistical problems in that. The Ukrainian say they can't visit unless if they are going to go through occupied territory,
which means effectively, they'd have to row across the Dnieper River from Ukrainian territory to get in there.
So there are technical issues, but there are also security issues for them. Ultimately, therefore, there is not going to be any real prospect of the
IAEA being able to conduct inspections, and of course, their permanent monitoring systems which pre-existed the invasion have all been
disconnected by the Russians, Zain.
ASHER: Sam Kiley, live for us there, thank you so much. I want to turn now to a historic heatwave in China; the country is issuing a nationwide
drought alert for the first time in nearly 10 years. It has also issued the highest heat warning to almost 250 cities and counties today.
Selina Wang joins us live now from Beijing. So, Selina, what sort of effect is this kind of heatwave having on the economy, especially when you
consider that both the government and individual businesses are desperate to conserve power?
SELINA WANG, CNN CORRESPONDENT: Well, Zain, this is just the latest hit to China's economy that's already in very bad shape because of the countries
zero COVID policies. You still have cities in China, going into snap lock downs over just a handful of COVID cases.
We saw the most recent GDP numbers come in, and China's economic growth was slower in virtually every single category. You've got youth unemployment at
a record high level in addition to that consumers are spending less factories are producing less this heatwave, the ensuing power cuts the
droughts.
It is just the latest headache for global factories and of course, making life very difficult for people as well who've got less money in their
pocket books. The latest data from officials show that there are millions of acres of farmland that have been impacted by these droughts and that
more than a million people are struggling to either access drinking water or being hit by water shortages.
(BEGIN VIDEOTAPE)
WANG (voice over): A scorching heatwave grinding work on the world's factory floors to a screeching halt. As China battles its worst heatwave on
record, factories in the key manufacturing hubs of Sichuan province and Chongqing city have come to a standstill. For about a week, power has been
saved for more than 100 million residents amid a crippling crunch.
But the diversion threatens an economic jolt. It hits factories for semiconductor companies like Intel and Texas Instruments and suppliers of
Apple and Tesla. Most importantly, Sichuan is rich in one of the world's most important commodities, lithium.
UNIDENTIFIED MALE: Sichuan produces like 30 percent of the lithium hydroxide for China. So we think that this is going to affect the EVM
surprise in the short run. Very likely we're going to see the lithium price going up.
WANG (voice over): Lithium is essential for technologies like electric car and smartphone batteries. While experts say the impact will be minimal if
the shutdown only lasts a week.
[09:10:00]
WANG (voice over): If they drag on, it threatens to snag already strained global supply chains and hike up prices for global consumers. The power
cuts are yet another headache for factories after COVID related shutdowns, it could encourage the U.S. and Europe to move more of their battery supply
chains back home.
SUSAN ZOU, ENERGY METALS ANALYST, RYSTAD ENERGY: Also kind of strengthened people's belief that you can't rely on China too much for the battery
materials processing.
WANG (voice over): This is China's strongest and longest heat wave on record lasting for more than 60 days, pushing temperatures above 110
degrees Fahrenheit in some regions. It's put extreme pressure on the power grid because of spikes and air conditioning use and hydropower plants that
are struggling to meet demand. Droughts are sweeping across the country.
Parts of China's longest river, the Yangtze and other reservoirs have completely dried up. Fire trucks are sending water to places struggling to
get enough drinking water. Villagers line up with their buckets.
In the south, the heat and droughts are ravaging crops, impacting 159 million acres of arable land; many regions are taking desperate measures.
Central Hubei province is firing rockets into the sky with chemicals to help clouds produce more rain. Videos of staff pouring ice cubes into
swimming pools have gone viral.
As did this woman's video diary showing her bag of live shrimp cooked after she was outside for an hour. Office workers are sitting around giant ice
cubes to cool down because of power cuts. Some cities are operating subway stations in near darkness to save energy. Other residents are sleeping in
subway stations to take refuge from the heat. China's heatwave is expected to get worse so all of this might be the new normal.
(END VIDEOTAPE)
WANG: And Zain, the impact all of this has on lithium is something to watch because the supply of lithium is already barely able to keep up with demand
as the world tries to transition to cleaner energy to battery powered cars. But the question for how much this power cut in China these drives this
heat wave impacts the world.
Well, that really depends on how long these power cuts lasts, for. Experts say that if they only last for six days, well, the impact will be minimal.
But if we see this drag on if we see these factory closures dragged on for a long time.
Well, that's when we start to get really concerned about the knock on effects on the global supply chain on the global economy, potentially
pushing prices up and increasing global inflation. Again, though, in China, what makes it so devastating for businesses for people is that they comes
on top of these punishing zero COVID restrictions that have now lasted for years Zain.
ASHER: Yes, couldn't come at a worst possible time given that zero COVID policy that China has been going through and the effect that had on the
country's economy. And now you're seeing these heat waves. Selina Wang, thank you so much.
From high temperatures to high tension Taiwan's President calling the pressure from China indescribable. Beijing continues to conduct military
drills around Taiwan after U.S. House Speaker Nancy Pelosi visited the self-governing island. Blake Essig is in Taipei to gauge the mood.
(BEGIN VIDEOTAPE)
BLAKE ESSIG, CNN CORRESPONDENT (on camera): Twice this month U.S. Congressional delegations, one of them led by House Speaker Nancy Pelosi
visited Taipei. Their goal to reaffirm U.S. support for Taiwan and help ease cross strait tensions although the U.S. delegations came and went,
Beijing responded by condemning the visits and flexing its military muscle while the people of Taiwan were left to deal with the consequences.
UNIDENTIFIED FEMALE: We kind of expected cross strait tension to be escalated because of the visit. I don't think the visits are helping
Taiwan.
UNIDENTIFIED MALE: I think it was selfish of Pelosi to visit Taiwan.
UNIDENTIFIED FEMALE: Since there is the Taiwan Relations Act. Maybe they are visiting to reassure us that they stand with us. I don't think they
provoke China after all threats from China never stop.
ESSIG (on camera): Despite the constant threat of a forceful reunification from China take a look around life here continues the shopping district is
packed restaurants are falling while some people are concerned. The mood here is surprisingly called.
UNIDENTIFIED MALE: We can't rule out the possibility of them to attack Taiwan.
UNIDENTIFIED FEMALE: Being worried isn't helpful.
UNIDENTIFIED MALE: I don't think China dares to really attack Taiwan. They just posture to enhance cohesion domestically.
ESSIG (on camera): Although there's a quiet confidence that Taiwan's military would be able to hold off a Chinese invasion.
UNIDENTIFIED FEMALE: Taiwan's military has regular exercises and I have faith in them.
ESSIG (on camera): The war does break out, there are many people here who say that they'll do whatever they can to help fight for their island,
whether that's by taking up arms or learning to provide first aid.
ESSIG (voice over): Which is why Civil Defense courses like this are being held and why this class is full?
[09:15:00]
ENOCH WU, FOUNDER, FORWARD ALLIANCE: There's no delusion about the threat that we face. However, we remain calm because this is the reality that
we've lived under for so many years. But it's when I see folks turning out for events like this one; I know that while we're not running around
panicked that PLA might attack tomorrow. We all know that we can do more and we must do more to help preserve the peace.
BRUCE CHEN, TAIWANESE CITIZEN: I believe the better our preparation is the less chance to war will be because our rival will not win easily. And it is
important to show them that we are prepared.
ESSIG (on camera): Peace and stability across the Taiwan Strait concept that people here tell me seems more unlikely with each passing day, as
tensions between China and Taiwan show no signs of improving Blake Essig, CNN, Taipei.
(END VIDEOTAPE)
ASHER: Are these the stories making headlines around the world. The U.S. judge has signaled he's open to releasing parts of an affidavit used to
justify the FBI search of Donald Trump's Florida home.
The judge gave the Justice Department which opposes releasing the affidavit a week to propose a redacted version that can be made public. And to
explain why it thinks some parts should stay confidential. If unsealed the affidavit could reveal crucial details about the investigation.
The former chief financial officer of the Trump Organization has now pleaded guilty to tax fraud Alan Weisselberg admitted that he failed to pay
taxes on $1.7 million of his personal income. He agreed to pay nearly $2 million in unpaid taxes and penalties and to testify in the Trump
Organization's upcoming trial on fraud charges.
Chinese Canadian billionaire Xiao Jianhua has been sentenced to 13 years in prison. He and his company tomorrow holdings were convicted of illegally
absorbing public deposits betraying the use of untrusted property illegal use of funds and bribery. Jail hasn't been seen in 5 years following his
abduction by Chinese security agents in Hong Kong.
Three incarcerated men have been indicted in the beating death of notorious Boston gangster James Bulger. The killing happened in a West Virginia
prison nearly 4 years ago rolled around Boston's infamous winter Hill gang during the 1970s and 80s. He was serving two life sentences for murdering
11 people and other crimes as well.
The sister of North Korea's leader has rejected the south offer of economic aid in exchange for a commitment to denuclearization that Kim Yo Jong's
ridiculed South Korean president for making the proposal saying he should shut his mouth. So called her comments disrespectful and said Pyongyang's
attitude would threaten peace on the peninsula.
I still think I'm here on "First Move" assessing recession risks investors hoping for more clarity from the Fed's Jerome Powell soon. I'll discuss
with Brian Levitt from Invesco. And our lower airfares on the horizon I speak with the CEO of Hopper about the chance that vacation from the
soaring prices was saying, stay with us?
(COMMERCIAL BREAK)
[09:20:00]
ASHER: Welcome back to "First Move", U.S. stocks still on track for a week open with tech a set for the sharpest fall in early trading NASDAQ futures
currently down over 1 percent shares of heavy machinery firm Deere, a big loser pre market after reporting weaker than expected earnings. The firm is
also lowering guidance as well.
Action on Wall Street could be volatile today because of another options expiration Friday investors also looking ahead to next week, when the
annual fed summit in Jackson Hole, Wyoming takes place. Fed Chair Jerome Powell is that to speak at the event. Central bank officials sometimes use
the Jackson Hole event to unveil new policies we shall see.
Powell could use his speech to clear up confusion in the markets over the Fed's current rate hike path. Brian Levitt, Global Market Strategist at
Invesco joins us live now. So Brian, what sort of volatility could we see in terms of stocks in the short term, especially as we consider rate
tightening?
BRIAN LEVITT, GLOBAL MARKET STRATEGIST, INVESCO: Well, volatility is almost always the result of policy uncertainty. And so that's what we've been
grappling with for a while now.
Really, actually, since last fall, when inflation started picking up beyond what many had expected, we've been in this prolonged period of policy
uncertainty, we're still there, you know, the markets gone a long way to pricing in a substantial amount of tightening inflation is rolling over,
which is all good. But we're still waiting for greater clarity from the Federal Reserve. And so markets should continue to be volatile in that type
of an environment.
ASHER: Do you see some kind of sort of earnings recession on the horizon?
LEVITT: Yes, the leading indicators of the economy suggest in earnings recession. You know, we had lights out growth last year, even into this
year that things are slowing, leading indicators pulling towards potentially even a recession in this economy.
Now, it wouldn't be a significant one, because we never got time to build up a lot of excess in this cycle. But earnings are likely to come down on a
year over year basis. Now an average recession, somewhere along the lines of earnings decline of around 20 percent. If it's a more, mild variety, we
don't necessarily need to have that type of extent. You know, multiples are hanging in there.
So there could be some downside for markets from here, although usually when inflation peaks, one year out, markets look pretty good. So I say, you
know, focus on the longer term with perhaps some gyrations here in the near term.
ASHER: Just in terms of a recession more broadly, they'll have stocks actually priced in the prospect of a recession.
LEVITT: Not completely, you know, a lot of the move that we saw earlier this year, when stocks when peak to trough about 23 percent for the S&P
500, a lot of that was a valuation move, given the move higher in interest rates. Now rates have come down a bit, they're back up a little bit in the
last few days.
But valuations went up as rates came down; I don't think we fully assessed earnings. Now, just a simple back of the envelope calculation would say
peak earnings of around 220. If it's an average recession, earnings go down 20 percent. Maybe that takes you to 180, on earnings with a multiple of 20,
21, 22 times. You could see a market back in the 3700 3800 range, again, not a prediction, just the back of the envelope calculation.
So I don't think we fully priced it. But again, I remind Investors to look to the intermediate term, you know, the markets have calmed down quite a
bit. We've almost done the median decline associated with recessions. And so we'll get through this period and get back to a more normalized economic
environment.
ASHER: Just in terms of all the sort of different mixed signals we're seeing right now. On the one hand, you've got, of course, fears of
recession; you've got 40-year high inflation. On top of that, you know, there's various other headwinds, including obviously, aggressive sort of
rate hikes by the Fed.
But on the other side, you've got this stellar jobs report that we got out for July jobs numbers and also lower than expected CPI just recently. How
do Investors make sense of the different signals we're seeing it in the U.S. economy?
[09:25:00]
LEVITT: I think we just have to realize it's a unique pandemic cycle, we brought forward a lot of growth, we unleashed a lot of demand on the
economy driven in part by fiscal spending and low rates. But we brought that demand before the global economy was ready for it. So it created too
much money chasing too few goods in inflationary environment.
And now, when you get high and rising inflation, the Fed needs to squash it. So they're raising interest rates rapidly, which is going to slow
economic activity. Yes, the job markets strong. But jobs are a lagging indicator and the job market starting the week in a bit here, as the
economy slows, you starting to hear a lot of companies saying they're closing open positions, or they're going to have to, unfortunately lay off
workers.
In the meantime, as the economy slows, inflationary pressures start to come down. And so we're trying to navigate this so called soft landing, it's
likely going to be difficult to do that. And so you may see the economy enter into what the MDR would call an official recession.
But again, given the lack of access in the economy, we would expect it to be a more, mild one. And you know, for Investors who want historical
corollaries maybe look to 1980. You know, inflation peaked. You did have a recession in 81 but a year out from when inflation at peak, the markets did
very well.
ASHER: And what is the lag time though, Brian between when the Fed sort of implements tighter monetary policy in terms of rate hikes, and how long it
actually takes to really get inflation under control?
LEVITT: Well, therein lies the rub, right? The challenge is the Fed is front loading all of these rate hikes, but they don't have time to assess
what it means for the economy. And we know that monetary policy tends to work with a 12-month lag or so.
And so I would say go back to first principles, what are the markets telling us we know inflation is coming down, but the yield curve on twos
10s, inverted 3-month tenure getting there, and that's a harbinger of future economic woes suggest when the 3-month tenure inverts, which may
happen soon, suggest a recession 12 months from then.
So that may sound scary to Investors. But again, remember we've priced in a good amount of it, it doesn't mean we've priced in all of it. But you know,
a year out from now or beyond, I think investors will be happy looking back at how the markets recovered from it.
ASHER: OK, a little dose of negativity there. But certainly some optimism from you, Brian Levitt global markets, at Invesco, thank you so much.
LEVITT: Certainly long term optimism.
ASHER: All right, sounds like I'm here on "First Move", Bed Bath and Beyond terrible shares of the retailer set to plunge as Game stop's Ryan Cohen
says game over.
(COMMERCIAL BREAK)
ASHER: Welcome back to "First Move". U.S. stocks are up and running on this last trading day of the week. A risk off day for stocks overall as global
bond yields tick higher oil falling more than 1 percent as well weakness as well in Crypto Bitcoin, Etherium and XRP all lower by more than 7 percent
Bitcoin trading at a three week low as well.
Movie Theater stocks also now falling on reports that Cineworld the Parent Company of Regal Cinemas is closing - closed rather to filing for
bankruptcy Cineworld's shares down more than 50 percent in London trading.
Also today shares of retailer Bed Bath and Beyond are taking a bath for the second straight session on where that investor Ryan Cohen has sold his
entire position in the firm. Cohen is the Chairman of - another volatile meme stock GameStop.
Paul R. LA Monica joins us live now. So Paul, now that Ryan Cohen is selling his stake, some people are accusing him of pumping and dumping. Is
there a chance that the SEC can look into this?
PAUL R. LA MONICA, CNN REPORTER: I think it's possible. We are seeing lots of complaints about the fact that Cohen invested in Bed Bath Beyond people
that he would work his magic on that struggling retailer similar to what some of the initiatives that could take to GameStop in the past few weeks
and months.
But the problem now was that because he is cashing quickly. There are people wondering whether or not some shenanigans went on. And you have
Whitney Tilson a Former Hedge Fund Manager who runs research firm, he said on his blog that filing a complaint - SEC, to get this because he did think
just behavior.
ASHER: And just in terms, I mean, we're having a little bit of trouble with your audio Paul. But I'm going to try to ask you another question here.
Hopefully your audio gets better what sort of lessons have meme investors learned from all of this?
MONICA: I would like to think investors have or even investing is incredibly risky. Can't rely on people say about a stock just because they
want to be punish short sellers who have legitimate reasons, adding against some of these companies like Bed Bath and Beyond, GameStop and
AMC, you have to look at - Bed, Bath and Beyond is losing money. It is reporting good sales recently got rid of their CFO--
ASHER: We're actually having - Paul - major trouble with hearing you. Your microphone keeps on sort of going in and out so what we're going to try to
do is get you back after the commercial break if our producers can fix it, hopefully they can. But thank you for attempting to answer my question for
we appreciate it.
All right, coming up here on "First Move" could a summer of suffering for air travelers be replaced by a fabulous for CEO of Hopper is here with some
good news at last when it comes to finding cheaper flights? We'll hop to it next.
(COMMERCIAL BREAK)
[09:35:00]
ASHER: All right so as I was mentioning before the break Cineworld the Parent Company of Regal Cinemas is close to filing for bankruptcy shares as
a result dropping like a stone down some 75 percent or so. We have Paul R LA Monica again. Paul, can you hear me I just wanted to check first.
MONICA: I can hear you. I hope you can hear me twice as nice? It sounds like--
ASHER: I hear you perfectly. OK. So just talk to us about Cineworld, just being another casualty of the growth of streaming and also the pandemic of
course.
MONICA: Yes, definitely Zain. I think that what we're seeing around the world and in America with the Regal chain is that many consumers are opting
to stay home and stream things on Netflix and Disney Plus and you know, HBO Max owned by our parent company.
And they are only really going for those event driven movies, a lot of those Marvel films and other big blockbusters and that's been a problem.
And that's why there are reports we haven't seen an actual filing yet though Zain that Cineworld might be filing for bankruptcy.
What's interesting is that AMC continues to do reasonably well. I think it's kind of divorced from the economics of the movie theater business
right now because it's more of a meme stock.
ASHER: And we're seeing just on our screen, AMC Theater Holdings down about 4 percent or so still, despite the fact that you're saying that it's doing
relatively better than some of the other theaters stocks. Paul R LA Monica, we have to leave it there. Thank you so much.
All right, even if you haven't gone anywhere in the last few months, you'll be well aware that air travel has become a miserable experience for many of
us. Well, according to my next guest prices are actually falling as we enter the fall.
Hoppers travel trends reveal that the peak season is past and jet fuel is becoming cheaper and that is certainly good news. For travelers Hopper uses
AI and its app to monitor prices and predict rather the right time to buy. It CEO has some tricks and tips to find those cheaper airfares.
Fred Lalondle is Co-Founder and CEO. So Fred, OK, I am originally from Nigeria. I was born and raised in London, though. If I am going to say for
example, London in the fall or I'm going to Lagos which I plan to do in the next coming months what is the tip? What tips do you have for me in order
to get the cheapest airfare to both of those places as possible?
FRED LALONDLE, CO FOUNDER AND CEO, HOPPER: Thanks for having me. The really good news is that, as you said the summer peak is down. And there's always
a low in the shoulder season, which is September/October.
And we're seeing international airfare around 750 which is down 20 percent. The big issue is when you travel because if you're thinking of taking this
trip for the holidays, so holiday season or even past the Christmas breaks, we are expecting prices to skyrocket.
So there's basically temporary relief on airfare and hotel fares, but we're actually expecting a really hot holiday season. The best thing you can do
is just book as early as possible book now.
ASHER: And just talk to us because we have an obviously an international audience. And just talk to us a little bit more about how your app actually
works?
[09:40:00]
ASHER: Because you essentially people sort of book their trips via Hopper. You essentially tell them hmm, maybe now are not the best time to book if
you want the best possible ticket prices, just wait until next week at 3 am and book your ticket, then.
LALONDLE: Yes, essentially, Hopper is using a computer to help you book your airfare. And so we predict prices up to a year in advance. And through
a bunch of AI modeling that we've been doing for over a decade now.
We are able to guide you know basically push notifications on your phone, the best time to actually book the ticket. And we do a lot of processing of
data. And so we're in the U.S. which is our biggest market, about 10 percent of the market. But we see all of the global shopping.
So if you know airlines are quoting prices on their websites or other travel agencies are, we see all of the demand for these shots, and we
crunch all of that, to help you pick the best time to book, which is often the best way to save money.
Right now, as I said, because of all the pent up demand, it's a very weird cycle. The advice is mostly to book as quickly as possible. But sometimes
you can save up to 40 percent by getting the timing of your ticket correct, regardless of your travel dates or destination.
ASHER: Such a great business idea. Just explain to us how you make your money, because obviously the app is free of course. There's no sort of
commercials on the app, but how do you make your money?
LALONDLE: We're actually the third largest travel agency in North America. So a lot like all these other brands that you may have used before those
have websites we sell the travel and airfare is a small chunk of what we do.
We have hotels, car rentals, and homes. And a lot of what we do, too, is protecting the traveler against adverse effects. So we're very much a
predictive company, one of the things that we've been doing this summer is providing disruption protection.
So this is add on something that you would pay maybe $20 or $40 for a domestic ticket. And if your flight gets delayed for one hour or more, you
can get on any other flight leaving that airport on any airline and Hopper pays the difference.
So through this and other products like price freeze, we will hold the price of a flight for you for a week you know while you make up your mind
or book your accommodations, we actually make traveling a lot easier. You can imagine, this summer, when one out of four flights was disrupted in the
world, our disruption protection was one of our most popular products.
ASHER: I could have actually used your help in March when I had a flight traveling out of Lagos going to Washington that was delayed literally for
three days in a row straight. And obviously there's only one flight out of Lagos per airline leaving typically in every sort of 24 hour period, and I
was stranded for three days around the airport.
So I could have used you back then. Just in terms of noticing different sort of travel trends because of the high prices just walk us through what
you're seeing. I mean, obviously travel is quite expensive has been quite expensive this summer, are you seeing more people opt for domestic
vacations as opposed to international?
LALONDLE: So actually now people are getting out. Internationally, we're seeing Southeast Asia being one of the top trending destinations from North
America, which as you know, is a long haul flight, mostly because those destinations have been closed for almost two years to North American
travelers.
In terms of popular domestic destinations, the beach destinations are always top of the list. So you're seeing Hawaii and Miami and those types
of things. But in the U.S. we're seeing some of the mountain town's things like Jackson and Wyoming that are getting a greater share.
So those are people that are probably looking to save some money on the airfare, maybe travel a little bit shorter to get there. Car rentals are
also very popular supplies still low. Prices are still high, not as high as the summer but they've gone down. So we're seeing a lot of people driving
to their destinations also.
ASHER: And one thing that you're particularly passionate about is offsetting carbon emissions. Just talk to us about that.
LALONDLE: Yes, so one of the things we did a few years ago is we started paying for carbon offsets for all of the travel that we saw on the app.
This isn't something where we're asking the consumer to pay. We're not showcasing what our suppliers are doing.
We are quite literally using our profits and investing them into carbon offsets on behalf of all our customers. To date, we've planted 23 million
trees. The program is called Hopper Trees predictably and we intend to keep doing that and scaling it up. And I've also challenged all of the CEOs of
the other travel companies to step up and do the same thing.
ASHER: All right, Fred Lalondle thank you so much! We appreciate it.
LALONDLE: Thank you.
ASHER: Dodge has entered the electric vehicle race but says its new concept car will be keeping the brand's famous Grunt it says it is aiming to
deliver the visceral feeling and the sound of a muscle car take a listen.
[09:45:00]
ASHER: That's the logic behind the move to electrification. Dodge now a division of - has seen weak sales of its traditional muscle cars this year
continuing the declines over the past decade. The CEO told Richard Quest how they replicated the muscle car sound.
(BEGIN VIDEOTAPE)
TIMOTHY KUNISKIS, CEO, DODGE: Everybody knows you burn the gas, it ignites it moves a piston. But ultimately what your ear hears is just the movement
of air. So we studied the movement of air under every circumstance in our Hemi VA (ph) waves whether you're accelerating, decelerating, just starting
the car shifting down shifting, under extreme load, drag racing, all of it, we studied all those sound waves.
And then we said OK, what if we take those sound waves that movement of air and modernize it? And we came up with a very fresh modern tone, kind of
like a shrieking sound. And that's why we call our highest end version, the Banshee.
But we knew that we couldn't have something that was so forward looking that it would be uncomfortable for the transition for our current ice
owners for our current gas engine owners.
So what we did was in the base track of the sound we took the firing order of a Hemi VA, and the bass track is literally the firing order of a Hemi VA
with the screech on top of it. So the sound is literally created from all of the inputs - normal customer.
RICHARD QUEST, CNN CORRESPONDENT: So let's listen to the sound. That's heard a couple of times go on. So is the sound being artificially created?
Is it an electronic sound, a purely digital sound that reacts as you put your foot on the accelerator and the brake or is it some element of
mechanics about it?
KUNISKIS: Its mechanics. We actually patented it, and we patented it as the first ever electric vehicle exhaust system. And the reason that we call it
an exhaust system is it literally has pipes like an exhaust system a chamber.
Chambers within the chamber and an exhaust outlet, an exhaust pipe at the back of the car and that's one of the things that make it sound different.
Some people try to create sound, and they pump it inside the car with speakers.
But your brain quickly figures out that it's not connected to what is happening in the car. We actually send it out through a tailpipe in the
back of the car so that spatial difference of hearing it outside the car and behind you is almost like the first times you've ever heard surround
sound in the theater; it really kind of connects you to the experience.
QUEST: So at the end of the day, the car has to perform and we know that EVs are the future and eventually, by law, every car will have to be an EV
in the fullness of time. So you didn't have a choice in that sense. It's how you do it and maintain your heritage.
But the performance - what I find fascinating is your price point of your cars, your entry price point. $30,000 or so it is designed for the working
man and woman to buy to live and to enjoy it, it's not an upper end, luxury foible.
KUNISKIS: A lot of brands still walk up features, leather, sunroof, things like that, that just doesn't do anything like that. What we sell is
escalating power. So we want to make sure that we're an accessible price point for anyone that wants to join our brand.
But the more power you want, the faster you want to go that's where the escalation of price comes. So yes, our highest performing most powerful
versions yes, they are expensive. But we also make sure that we have an entry position for anyone who wants to join us.
(END VIDEOTAPE)
ASHER: "First Move" will be right back after the short break.
(COMMERCIAL BREAK)
[09:50:00]
ASHER: The Sea of Galilee is one of the most important places in Israel. Besides its biblical significance for Christians, the Galilee has long
provided safe drinking water to the people of both Israel and Jordan. But rising temperatures and increasing droughts are changing that and now
Israel is preparing to pump water into the sea. Hadas Gold explains.
(BEGIN VIDEOTAPE)
HADAS GOLD, CNN CORRESPONDNET (voice over): The Sea of Galilee in Northern Israel, this ancient place of pilgrimage has been sustaining life for
thousands of years. But recent times have seen this freshwater lake shrinking to historically low levels, forcing the government to act by
leveraging the country's expertise in water technology.
GOLD (on camera): This is part of the Ashdod Water Desalination Plant one of five such plants along the coast of Israel after the seawater is pumped
through the desalination process the sweet water is held here in this 100,000 cubic meter reservoir, the water under this tarp I'm standing on
right now.
For decades now, Israel has taken seawater from the Mediterranean, and treated it with a process called reverse osmosis, providing nearly all of
the country's tap water.
GOLD (voice over): From Ashdod a pipeline pumps water from all the desalination plants north to Israel's main water filtration facility near
Haifa. From there a new 31 kilometer pipe is being laid eastward to connect via stream with the Sea of Galilee. The end is in sight. The $264 million
project is due to be completed by next year.
NOAM SHOA, ENGINEERING DESIGN MANAGER, MEKOROT: It sounded strange proposition from the beginning. But very soon we understood the value it
has to the national market itself and also it contributes to other challenges such as global warming development of agriculture in the entire
Sea of Galilee region, and also with our neighbors the Kingdom of Jordan here. This is another part of the solution that will help us maintain the
provision of water to the Kingdom of Jordan as per the existing treaties.
GOLD (voice over): This 1.6 meter wide pipe will be able to carry 120 million cubic meters of water per year. But only what's needed to replenish
the lake will be released at any time.
SHOA: The uniqueness of this project is that it gives us almost infinite flexibility. If you look at the system from end to end, we can basically
take the water where it is available via deselected water in the center of Israel and just divert it and transports it to wherever it is needed.
GOLD (on camera): The desalinated water will end up here at the Sea of Galilee. Now this lake used to pump out the vast majority of Israel's
drinking water. But now the water will be flowing in the opposite direction.
GOLD (voice over): The need to do things radically differently was driven home to authorities by the most recent five year long drought, which ended
in 2018.
DR. GIDEON GAL, DIRECTOR, KINNERET LIMNOLOGICAL LABORATORY: They looked at what happened over a five year drought conditions when lake levels really
low. They looked into the future climate change and what's going to happen rainfall in this area.
And also look at you know the increase in population and projected increase in demand of water. And realize that 30, 40 years from now, there's going
to be a serious problem in maintaining lake level in the lake and maintaining water quality.
GOLD (voice over): As for concerns about what nonnative water could do to the lakes ecosystem, research so far suggests it won't make much of a
difference, and may actually help the lake fight the effects of climate change by increasing the turnover rate of the water and cooling it down.
DR. GAL: The risk of introducing the cyanide water is a risk and is worthwhile taking. As long as you know it's a certain quantity we don't
talk about huge quantities of water.
GOLD (voice over): It's a scientifically uncomfortable and unprecedented step. Dr. Gal says he wishes they didn't have to take but one of the
realities of climate change is forcing upon them Hadas Gold, CNN, the Sea of Galilee.
(END VIDEOTAPE)
[09:55:00]
ASHER: Before we go, Mariah Carey's Merry Christmas Album and the single "All I want for Christmas" are the staples of the holiday season. Carey's
attempt to trademark the title "Queen at Christmas" is getting pushed back she filed the trademark application last year but it was only made public
recently.
Elizabeth Chan who performs only Christmas music has filed a formal objection and the Singer Darlene Love wrote on Facebook that she has
actually been the "Queen of Christmas" since before Mariah Carey was famous. One thing is for certain though, I am sure we'll be hearing "All I
want for Christmas" until the end of time. All right, that is it for the show. Thank you so much for joining us. I'll be back in a couple of hours
from now with "One World" my show "Connect the World" with Becky Anderson is up next. You're watching CNN.
(COMMERCIAL BREAK)
END
