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Quest Means Business
Dutch Report Concludes Russian-Made Missile Brought Down MH17; Ukrainian Foreign Minister Responds to MH17 Report; Analysis of Report; Cost of Russia's Campaign in Syria; SABMiller Accepts AB InBev Offer; European Stocks Fall; Twitter to Lay Off 8 Percent of Workforce
Aired October 13, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:59:55] (NEW YORK STOCK EXCHANGE CLOSING BELL)
ISA SOARES, HOST: The winning streak is over as the Dow falls into the red for the first time in weeks. It is Tuesday, October the 13th.
Tonight, new claims about the downing of MH17. Dutch officials say the airspace could have been closed.
It's closing time for the mega merger in the world of beer.
And a new naked truth for Playboy. Sex just doesn't sell like it used to.
I'm Isa Soares, and like Richard, I too mean business.
A very good evening to you. Tonight, no warning, no protection, no chance for the 298 people who died onboard MH17. Dutch investigators say
Ukrainian authorities had sufficient reason to close the airspace where the plane was downed, yet no measures were taken to keep civilian aircraft safe
as they flew over wart-torn eastern Ukraine.
Now, the Dutch Safety Board report confirms that a missile brought down the Malaysia Airlines jet last year. It is not clear who fired it,
though. The Boeing 777 was en route from Amsterdam to Kuala Lumpur when it crashed in Ukrainian territory controlled by pro-Russian separatists. Fred
Pleitgen reports now on the search for answers.
(BEGIN VIDEOTAPE)
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): Pieced together over months by investigators, fragments of Flight MH17. Incomplete, but enough for the Dutch Safety Board to determine what
caused it crash in July 2014. Its findings are in line with what many believed: MH17 was shot down over eastern Ukraine by a Russian-made BUK
surface-to-air missile.
TJIBBE JOUSTRA, CHAIRMAN, DUTCH SAFETY BOARD: Flight MH17 crashed because of a 9M314M warhead detonated outside the airplane above the left
side of the cockpit. This warhead fits the kind of missile that is installed on the BUK surface-to-air missile system.
UNIDENTIFIED MALE: Flight MH17 enters Ukrainian airspace at an altitude of 33,000 feet.
PLEITGEN: Investigators released this animation of what they conclude happened to the plane. They say the BUK missile exploded less than a meter
from the cockpit, causing the front of the plane to break off. Fragments carrying traces of paint linked to these missiles were in the bodies of the
three crew in the cockpit and in the plane's left wing.
Investigators believe most passengers died almost instantly with no comprehension of the situation. But they couldn't rule out that some may
have been conscious during the 90 seconds it took the plane to fall to the ground.
The report is critical of Ukrainian authorities for allowing commercial flights in the area, and it calls for new rules to be introduced
for flying over war zones.
JOUSTRA: None of the aviation partners involved recognized the risks posed to civil aviation by the armed conflict on the ground.
PLEITGEN: Crucially, what the report did not do was say who fired the missile. Kiev and its western allies blame Russian-backed separatists.
Russia, for its part, blames Ukrainian forces, and all deny any wrongdoing.
The Russian state arms producer that makes the BUK system came out with its own research.
YAN NOVIKOV, CEO, ALMAZ-ANTEY (through translator): The results of the experiment have entirely refuted the conclusions by the Dutch
commission about the type of the rocket and the place of the launch.
PLEITGEN: And Russian officials who participated in the investigation maintain it's not possible to confirm the warhead or the type of system
used.
A separate Dutch criminal investigation is underway. It hopes to have answers next year. Officials say they will not rest until those who shot
down MH17 are brought to justice.
Fred Pleitgen, CNN, London.
(END VIDEOTAPE)
SOARES: Now, after MH17 was shot down, aviation restrictions were put in place over Crimea, which still impacts flights today. Recently,
European authorities warned airlines of risks from Russian missiles over Iran as well as Iraq. Russia has been conducting long-ranged strikes
against Syria with missiles fired from warships in the Caspian Sea.
Some carries, like Air France and British Airways, have already changed flight routes, a story that we covered yesterday right here on
QUEST MEANS BUSINESS.
Well, Ukraine's foreign ministers says there was no way of knowing that the airspace over eastern Ukraine needed to be closed back in July of
2014. He told Fred Pleitgen it was simply not in the realm of possibility for an aircraft to be shot down. Take a listen.
(BEGIN VIDEOTAPE)
PAVLO KLIMKIN, UKRAINIAN FOREIGN MINISTER: The answer is also really straightforward. No one -- literally no one -- could have imagined that
such highly-sophisticated and extremely dangerous weapons could be brought in (inaudible), and it was brought by Russia.
PLEITGEN: But sir, I just want to stick with that point, because three days prior to the shoot-down of MH17, on July 14th, 2014, an Antonov
26 of the Ukrainian air force was shot down at a height of 6,500 meters, which is about 22,000 feet.
[16:05:05] So it must have been clear at that point that there was long-range, high-altitude anti-aircraft weaponry in that area, wouldn't it?
KLIMKIN: Our authorities, good in the military, believe that a ton of airplanes have been hit by Russian missiles and from the Russian territory.
And it was about different altitude. And from the technical point of view, it's completely different from shutting down the airplane and the altitude
more than 11,000 meters.
So, in any kind of risk analysis, and in any kind of imagination, there was no, in any way, understanding about Russia bringing in such
extremely dangerous anti-air missile complex to Ukraine.
(END VIDEOTAPE)
SOARES: So, we've seen very two -- hearing two different sides. That's the Ukrainian foreign minister speaking to our Fred Pleitgen here,
and like we heard from the Dutch authorities today, they don't have the means to appoint blame, but were not clear for those 298 victims' families
waiting for answers exactly who is needed.
Let's bring in David Soucie, he's a well-known face right here with CNN. He is CNN's safety analyst, and he joins me now from David -- from
Denver, pardon me. And David, you -- we've had so many theories about this. They have all been discarded.
But from what we heard today, from what you heard today from the Dutch authorities that it was a BUK missile that came close to the cockpit on the
left-hand side, do you think that this will bring us any closer to finding out who was behind this?
DAVID SOUCIE, CNN SAFETY ANALYST: I really think it will. But there's really much grander look at this thing that I read in this report,
and that is that the Ukrainian government had complete control. They're a sovereign state, they had complete control over that airspace.
The fact that they recognized that this type of missile was in the area, now that we know what type of missile it was, they knew that these
missiles were in that area and that the potential risk was there for this to happen. It was entirely under the Chicago Convention, it was entirely
under their control to control that airspace and to stop airplanes from flying there.
So, I'd really like to think that this Dutch report really clarifies where the responsibility falls, right on the Ukrainian government.
SOARES: Squarely on the Ukrainian government in terms of protecting that airspace, which they clearly didn't. Meanwhile, we know the criminal
investigation, David, is underway. When do we expect that to be released, and do you think anyone will be held accountable? Because that's what
families want to hear, isn't it?
SOUCIE: Absolutely, that's the first thing they want to hear. But they also want to hear not only that, who did it, but how can it not happen
to somebody else going down -- going further forward. So, the criminal investigation will reveal who did it. Now, how do we prevent that from
happening again? That's what the families are going to be most interested in.
But in the very first part, yes, this criminal investigation, it may take up to another year from the time that this report's been released, so
I'm really pleased that this report came out as quickly as it did. Sometimes these type of reports can take as much as two years to come out,
because there's a lot of information, and there was a lot of missing pieces, a lot of missing pieces to this investigation.
The Dutch have done a fantastic job of putting that together into this report. And that will really help the investigators move forward on the
criminal investigation most certainly.
SOARES: What this tragedy does show, David, is the danger of flying over war zones. It's a renewed concern for airlines and passengers who are
now facing, if they're flying over Iraq and Iran, as Russia has its long- range missiles being fired at Syria.
Should the airspace over the Caspian Sea be closed? Should we be looking -- should there be a new strategy when it comes to conflict zones
and closing up this airspace? What are your thoughts on this?
SOUCIE: Yes, absolutely, there needs to be more interaction. And the Chicago Convention needs to be revisited in this manner alone in that the
countries that are in these war-torn areas, the decision as to who is responsible, a lot of finger-pointing goes on.
Who was controlling the airspace at the time? Was it Russia? Was it Ukraine? These kinds of issues, there needs to be someone transcending the
countries' authority to close the airspace. And right now, that lies on the airlines.
But a lot of airlines don't have this level of security. There are some that do, most notably those in the Middle East already have this type
of security where they would know what's going on and what risks are there.
The other airlines are relying on the International Civil Aviation Organization, the Airline Pilots' Association, and other organizations,
alphabet soup organizations, to make sure that they're getting the information they need. That clearly failed in this realm, so we need to
find something better.
[16:10:00] There needs to be something that transcends the individual states and let's them know that when there's something going on like this,
a lot of finger-pointing, there needs to be very close attention paid to how this airspace is controlled during this time.
SOARES: David Soucie joining us there from Denver in Colorado. Thanks very much, David, great to get your perspective.
Now, Vladimir Putin claims that Russian involvement in Syria is helping to protect the whole world. That is according to Reuters.
Meantime, a Pentagon spokesman described Russia's airstrikes in Syria as reckless and irresponsible.
Either way, the Syrian conflict could become a huge drain for Russia's resources, which are already quite stretched. The economy's really
suffering as well. Clare Sebastian has the story.
(BEGIN VIDEOTAPE)
CLARE SEBASTIAN, CNN PRODUCER (voice-over): In this video from the Russian Defense Ministry dated October 7th, Russia launches a cruise
missile from the Caspian Sea to hit targets in Syria over 1,000 miles away.
REVA BHALA, VICE PRESIDENT FOR ANALYSIS, STRATFOR: That was an expensive show of force that cost at least $30 million for that launch.
SEBASTIAN: Stratfor, a Texas-based geopolitical intelligence firm, has mapped out approximately what Russia is spending on the Syrian
campaign.
BHALA: We're looking at roughly at least $500 million just for Russia to establish the logistics for setting up the base there. On top of that,
when you add in the air raids and the non-combat flights, we're talking about $2 million per day roughly.
SEBASTIAN: Stratfor says Russia has budgeted enough so far to sustain the campaign for four months, and it can afford to extend beyond that.
Most of the money is expected to come from Russia's established defense budget, which has been steadily increasing since President Putin took
office.
SEBASTIAN (on camera): The problem is, while Russia's defense budget is rising, the economy is actually shrinking for the first time since 2009.
The IMF predicts it will shrink 3.8 percent this year, hit by lower oil prices and Western sanctions over its actions in Ukraine.
And amidst all this, it's the people who are starting to pay the price. The poverty rate in Russia has gone up in just one year from 13
percent to 15 percent.
SEBASTIAN (voice-over): Despite that, economists say Russia has underlying strengths.
TIMOTHY ASH, EMERGING MARKETS STRATEGIST, NOMURA INTERNATIONAL: The balance sheet has not really deteriorated that much. The fiscal position,
they're in deficit, but they've got a big reserve fund that can cover that. They let the exchange rate go, and that's proved to be something of an
insulating factor.
SEBASTIAN: Another insulating factor, Putin's approving rating, still over 80 percent despite the rise in poverty.
ASH: Russians are in a much wealthier position than they were a decade ago, and I think their ability to endure a period of lower economic
growth is much higher than it was at the outset of the Putin administration.
SEBASTIAN: With a resilient public and a healthy reserve fund back home, experts say it will be politics rather than economics that define the
length of the Syrian campaign. Still, with an economy unlikely to grow until 2017, the long-term consequences of this costly war are difficult to
predict.
Clare Sebastian, CNN, New York.
(END VIDEOTAPE)
SOARES: Now, buying a beer is $4 roughly. Buying a beer company, well, $104 billion. AB InBev says it will swallow SABMiller, but it will
need to settle with regulators first. We'll explain after this.
(COMMERCIAL BREAK)
[16:15:58] SOARES: The final orders are in at the bar. SABMiller has agreed to merge with AB InBev after four failed rounds of offers. And
here's what's on tap. At $104 billion, it is the biggest beer deal ever, and one of the top five mergers of all time.
Now, if the deal falls apart, AB InBev will need to pay a $3 billion breakup fee. And if it does go through, the combined company will control
one third of the market, making its rivals actually look kind of pint-sized by comparison.
Joining me now from New York is CNN Money's Paul La Monica. And Paul, after what seems like a long pursuit, months-long pursuit, let's say, it
seems SABMiller has been -- has given into AB InBev's charm. How will this merger, if approved, change the global drinks industries? Because they
will control so much of the market, won't they?
PAUL LA MONICA, CNN MONEY DIGITAL CORRESPONDENT: It is very significant. You do have the possibility that companies like Heineken and
Carlsberg are really going to face more of an uphill battle to deal with this beer behemoth.
You have SAB and Anheuser-Busch controlling Budweiser, Miller, Peroni, Stella Artois, so many well-known brands around the globe, it is going to
be, I think, a formidable challenge.
But at the same time, it's unlikely that this deal will go through without some significant concessions taking place. Regulators are likely
to force the combined entity to make some asset sales, particularly, I think, in the US and China.
Molson Coors is a company that a lot of people are watching in the US. That stock surged today, because everyone thinks that Molson Coors, which
has a partnership with SABMiller called Miller Coors in the US, will be the big beneficiary. They may be able to purchase some of that joint venture
and strengthen its position in the United States.
SOARES: So, in terms of these regulatory hurdles, how long will it take before we get a final clear? Because they have to go to each country.
They're represented in so many countries, how long will this take, Paul?
LA MONICA: This is probably going to be at a minimum, I think, months, a few quarters. It could take up to a year, it would not be a huge
shock. Anheuser-Busch, InBev, it took a while to get its Grupo Modelo deal done a few years ago.
And that's something that people are looking at as another precedent, because a company in the US, Constellation Brands, was able to benefit by
buying control of the Corona and Modelo brands from Grupo Modelo in the US. That strengthens its hand here.
So, this is definitely something that regulators are going to look at extremely closely. They're going to take their time, they're not going to
rush to green-light this deal by any stretch of the imagination. So, last call is still a while away.
SOARES: It's still a while, of course. And we know that AB InBev improved its offer some four times or so. From those people you have
spoken to, do they think that perhaps that they've overpaid for the deal? Is $100 billion, do you think, too much for this? What are they saying?
LA MONICA: It is a lot, and when you look at the reason why this deal is being done in the first place, I think part of it is going to be to try
and have better economies of scale, better distribution, more efficient marketing, and that leads to lower costs.
But both Anheuser-Busch InBev and SABMiller realize that there is a huge threat around the world, and especially in the US, from the growing
craft brewing industry.
A lot of micro brewers are increasing in popularity and taking two beer companies that, let's be honest, I think a lot of beer snobs, I'll
include myself in that, might consider Bud and Miller Lite to be watered- down beer that doesn't taste as good as some of these craft beers.
So, they still face that threat. But at the same time, remember, Anheuser-Busch InBev has done a lot deals buying some of these craft
brewing companies as well. I think you're going to see that continue even if this deal goes through.
SOARES: And if it does go through, they'll be responsible for one in every three beers sold globally. That is quite something.
LA MONICA: Astonishing, yes.
SOARES: Paul La Monica there for us in New York. Thanks very much, Paul.
LA MONICA: Thank you.
[16:20:00] SOARES: Now, SABMiller shares rose 9 percent here in London. Investors in the broader markets may be looking for a drink,
though, to be completely honest. Stocks fell right across Europe on Tuesday, you see almost all at one percent or so. It's having a second
great day of trade here in Europe.
Mines were particularly hard-hit. This is also the second day where mines had been hard-hit. This time, though, after the Chinese trade day
that we were all waiting for, that showed a big slowdown in imports. Concerns yet again over a slowdown in the Chinese economy.
Now, Twitter's new CEO is certainly making his presence felt. Jack Dorsey's starting his official tenure by cutting staff. We'll tell you
what's behind the layoffs just ahead. Samuel Burke will join me.
(COMMERCIAL BREAK)
SOARES: Jack Dorsey's overhaul of Twitter, it seems, has begun. The new CEO has announced he'll lay off 336 employees, or roughly 8 percent of
the workforce. While people who work at Twitter are likely not happy, the markets like the move. As you can see, it's up 1 percent, finishing the
day up just over 1 percent, closing at $29.06.
Well, in an email to employees, Dorsey said, "This isn't easy, but it is right," as you can see there. "The world needs a strong Twitter, and
this is another step to get there." CNN's business correspondent Samuel Burke is here now to talk about the impact of the layoffs and what it might
have -- or might do to Twitter.
And this is astonishing, because Jack Dorsey, obviously, has just been appointed in the last week or so, and he's already cutting left, right, and
center. Is this to be expected? I mean, is it really needed, Samuel?
SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: Isa, you really feel for those people who were probably incredibly excited to start working at an
exciting place like Twitter and now are having to go home to their husbands, wives, maybe moms and dads today and tell them that they've lost
their jobs.
But indeed, they have 4,000-plus employees, or had, at Twitter. And for a long time inside of Silicon Valley, people have been saying that is
just too big for a company of that size and of those struggles.
And let me put this into context for you a little bit. I want to just go through the numbers of other social networks, and you can actually see
Facebook, they have 1.49 billion users, but they only have double the amount employees at Facebook, about 10,900 employees. So, they're
servicing many more users with not that many more employees. And of course, a $260 billion market cap.
[16:25:02] Then you have Instagram, which is, of course, owned by Facebook. They have 400 million active users. They were famously sold for
$1 billion with just 13 employees. And then Twitter, 360 million active users. In other words, the amount of employees just doesn't match the
relatively small user base of Twitter.
SOARES: And as we can see from those graphics we showed, you've got sagging user growth as well, that's one of the problems when you compare it
to the likes of Facebook, when you compare it to the likes of Instagram. So, where does this leave, really, Twitter? What does Twitter need to do
now?
BURKE: They need to make the product easier to use. Those are Jack Dorsey's words.
SOARES: Even easier than it is?
BURKE: Much easier than it is. The problem that Twitter has, unlike many other social networks, people come, but they don't stay, and Jack
Dorsey has said in an interview with me, he has said when he was announced as the permanent CEO that they just need to make the product simpler.
Because people come, they can't figure it out, and then they back out.
So, that's why they're getting rid of engineers, which is quite surprising, because we hear over and over again from Silicon Valley
leaders, it is so hard to find good engineers. That might be the silver lining here, that many of these people at Twitter will find jobs. But they
don't need so many engineers if they're trying to simplify the product.
SOARES: And also he did say he wanted a more focused Twitter, didn't he? A more focused company, and probably this is actually what it means.
Samuel Burke, thanks very much.
Now, still to come right here on QUEST MEANS BUSINESS, trending now on Twitter, hash tag #DemDebate. Tuesday's showdown is the first time all the
Democratic candidates will be on stage together. Their policy differences will be on full display to the US and, indeed, the rest of the world.
We'll have the breakdown for you just ahead.
(COMMERCIAL BREAK)
[16:30:01] SOARES: Hello, I'm Isa Soares, and coming up on the next half hour of QUEST MEANS BUSINESS, we'll show you which Democratic
candidate Wall Street is rooting for in tonight's debate.
And it's the end of an X-rated era. Playboy says no more nudes.
Before that, this is CNN, now time for an update on the news.
A Dutch reporting to the downing of Malaysia Airlines flight 17 says Ukraine authorities had good reason to shut the airspace where the plane
was shot down.
A new report into last year's crash said the plane was brought down by a missile made in Russia and argues Ukrainian authorities were more
interested in helping military planes in the region than civil aircraft.
(BEGIN VIDEOCLIP)
TJIBBE JOUSTRA, CHAIRMAN, DUTCH SAFETY BOARD: Why was Malaysian Airlines flight MH17 flying over an area where an armed conflict was taking
place?
The question was on the minds of many people after the crash. The answer is as straightforward as it is disquieting. Almost all operators
were flying over that area. And why? Because nobody thought that civil aviation was at risk.
(END VIDEOCLIP)
SOARES: Meanwhile, the Russian government has questioned the transparency of the Dutch investigation. The Russian company who makes Buk
missiles says its own tests differ from the Dutch findings.
Almaz-Antey says an older warhead that is only used by Ukraine's military was used to down the plane.
(BEGIN VIDEOCLIP)
YAN NOVIKOV, CHIEF EXECUTIVE, RUSSIAN STATE ARMS PRODUCER ALMAZ-ANTEY: The results of the experiment have entirely refuted the conclusions by the
Dutch Commission about the type of the rocket and the place of the launch.
Today we can say definitely and we will show it in our presentation that in case the Boeing 777 of Malaysian Airlines had been hit by a Buk
missile complex, that would mean that it had been hit by 9M38 rocket launched from the village of Zaroshchenske.
(END VIDEOCLIP)
SOARES: Israel's prime minister's promising tougher action to stop the surge in violence. Police say three Israelis were killed in a new wave
of stabbing, shootings and car-ramming attacks by alleged Palestinian assailants.
Deadly violence in the West Bank as well. Medics say one Palestinian was killed in clashes with Israeli forces.
Iranian lawmakers have given approval to the international nuclear deal. It follows days of intense debate. Three was a (AUDIO GAP) turned
bad tempered.
The deal now goes to Iran's Guardian Council where it could be approved or sent back to Parliament for amendments.
The world's two biggest beer companies are joining forces. SABMiller has agreed to merge with Anheuser-Busch InBev after four failed offers.
The deal is worth $104 billion and is likely to face scrutiny from regulators. The combined company will control around 1/3 of the world's
beer sales.
We're roughly four hours away from the start of the first Democratic presidential debate right here on CNN.
The pressure is on and the presidency is at stake. Hillary Clinton is looking to hold on to her lead while Bernie Sanders and three lesser-known
rivals are hoping for some breakout moments.
Now while Bernie Sanders and Hillary Clinton use similar rhetoric on the economic and banks, their policies differ quite sharply.
Let's go through it for you. Clinton says banks need tougher regulation. That means taxing short-term trading and extra fees on banks
with more than $50 billion in assets.
Bernie Sanders goes much further. He's calling for the biggest banks to be broken up entirely. Clinton, who served as senator for New York as
you know has taken millions from Wall Street over the years.
Four of her top five contributors you can see there are banks and the employees working there.
By comparison, take a look at Sanders and his top donors there are mostly all labor unions. Let's get more on all what this means. I'm
joined now by Edward Luce, the "Financial Times" chief political commentator. He joins me now.
Edward, both Bernie Sanders and Hillary Clinton, you know, have been talking tough on the economy, but really when you look at it, they're
telling very different stories in terms of what's wrong and how to fix the economy. How can Americans make sense of this? Break it down for us.
EDWARD LUCE, CHIEF POLITICAL COMMENTATOR, "FINANCIAL TIMES": Well, this is really a much, much more wonkish, detailed, earnest policy debate
on the Democratic side, if you like, than on the Republican side.
Bernie Sanders and Hillary Clinton have refrained very impolitely from naming each other during this whole campaign.
In contrast, Trump has really led the Republican field with insults. So this is going to be a very different toned debate. It's going to be
policy-rich I think.
Hillary and Sanders are going to continue to try to avoid attacking each other personally. And they're going to try to draw distinctions on
their economic positions.
[16:35:09] Now, Sanders has basically been setting the pace and the direction from the left of the field, and Hillary's been trying to catch up
with him.
And I think really the politics in all of this we'll watching just how many U-turns Hillary performs. Her most recent was coming out against the
Trans-Pacific Partnership - the trade deal last week - which of course she had championed when she was secretary of state as a gold standard.
Now Bernie Sanders has been against TPP, as it's called, all along, and in fact against every trade deal you can think of.
If he can draw her further on things like Wall Street which - where - you summarized the difference between the candidates - that will be a
victory for him and that will be precisely the kind of thing that those who are looking to trip up Hillary to show her has being inconsistent, as
shallow, as very political - will be keeping their eye out for.
SOARES: Yes, she's well-known for flip-flopping according to many, so I'm sure people will be paying close attention to this.
But when you look at it, they're not miles apart on everything. You know, they both want a higher federal minimum wage, they both have big fans
for colleges to basically make it more affordable.
They're both opposed to Keystone Pipeline and they both say that there should - more should be done to crack down on Wall Street.
But Sanders' interesting because he's quite a - he's the biggest spender, isn't he? He wants to expand Medicare. Do you think this will
work in his favor or against him?
LUCE: Well, if you look at the polls interestingly enough large factions of Americans - in some cases the majority - support single-payer
healthcare - that namely government-provided healthcare.
Which is what essentially you get with Medicare for retirees and it's what essentially you get for veterans. So, on the surface of it, it's not
even unpopular with the general electorate.
It's particularly popular with the Democratic primary electorate. So Hillary's, you know, got a long history on healthcare. Having failed to
push it through in 1994 and then having led the debate in 2008 on healthcare reform which Barack Obama picked up on.
She's not going to want to be outflanked on the left and it wouldn't make sense for her politically. In terms of spending, look, there's going
to be all kinds of telephone numbers if you start adding up Bernie Sanders' pledges.
But it's, again, not going to be in Hillary Clinton's interests to start adding them up. That will make it look like a fiscal conservative.
This isn't the forum for her to appear like a fiscal conservative. That will come if and when she becomes the nominee and faces the general
electorate.
SOARES: Edward Luce joining us there from Washington. Thanks very much, Edward. Great to have you on the show.
LUCE: Thank you.
SOARES: We're going to get more on the debate itself and we're going to go to the debate hall. CNN's Kate Bolduan's in Las Vegas. She joins me
know.
And Kate, we can see now the stage being set -- five Democratic presidential candidates fighting it out in that podium later today. But it
seems the focus will be on Bernie Sanders and Hillary Clinton.
What do you think the rapport will be like when - between - both of them? Do you think Bernie will be chipping at her heels?
KATE BOLDUAN, CNN ANCHOR AND CO-HOST OF "@THIS HOUR" SHOW: That is - people are calling it many different types of things, Isa, but that's the
big question.
They've been - they've for lack of a better term - they've played pretty nice in the campaign trail to this point. I mean, your previous
guest was kind of pointing it out.
There are distinctions between these people, but largely they see eye to eye on a lot of policy and they like each other personally.
So they've played nice to this point. Will they attack each other? So far the word from the campaign is they don't want to get - they don't
want to do any personal attacks. But they also caveat as saying that they will punch back if they are attacked first.
But this really - this stage that is set - and we are counting down, you know three, just under four hours now. It is so important for these
candidates. All five of them on the stage for the first time together in this presidential race.
But they all have different goals and they also face different challenges. Obviously because of the different place that they stand in
the polls quite frankly.
Hillary Clinton the frontrunner, her campaign they say that their goal right now is to cut through the politics.
They see this as an opportunity for her to talk policy, explain her policy to a huge audience and speak directly to voters and really try to
turn the page on what was a very tough summer for her where a lot of the focus was on her use of a private e-mail server during her time as
secretary of state, and that has really dogged her. So that's what they see.
For Bernie Sanders, his campaign even acknowledges that he needs to come across as presidential. Of course I've been asking exactly what does
that look like on the debate stage, but it's one of those things where you kind of know it when you see it.
Then you have three candidates who a lot of folks don't know - they're lesser known -- Martin O'Malley, Lincoln Chafee and Jim Webb. This is huge
for them because they have not broken through yet.
[16:40:04] They need to have a breakout moment. If they don't, they might not have another chance. So the stakes are huge for all of them for
different reasons.
SOARES: Should be riveting television no doubt. Thanks very much. Kate Bolduan there for us in Las Vegas. And real live coverage starts
really around four - less than four - hours from now as Kate was saying.
About 1:30 a.m. Wednesday in London. If that's too early for you, you can watch the replay during this hour tomorrow. That starts at 8 p.m.
Wednesday in London. Really no excuse to miss that one.
Now, not to be outdone by tonight's Democratic debate, Donald Trump has some big news of his own. Trump is set to host "Saturday Night Live"
on November the 7th.
Former Mexican President Felipe Calderon has been an outspoken critic of Trump's U.S. presidential run. Calderon now chairs the Global
Commission on the Economy and Climate.
He told Richard last month it's not Americans but Mexicans who should worry about a Trump presidency.
(BEGIN VIDEOCLIP)
FELIPE CALDERON, FORMER PRESIDENT OF MEXICO: -- not the Americans must be concerned. It's not only - I thank you for that concern - but not
only about what was happened in Mexico. The Americans should be concerned about what goes happen in the United States to the American citizens with
this kind of guy having control of the country.
If you put in practice all the measurements he's proposed in economic terms, he's going to fire millions of American workers in the United
States.
Only canceling the trade with Mexico for instance or the Free Trade Agreement. That will apply - that's almost one million jobs will be lost
if such kind of measure is taken.
Or other million could be lost and on top of that just taking in consideration the people managing the trade with Mexico. Mexico is the
best buyer of American products in the world and it's simply a no sense proposal.
So beyond that, what the Americans should be concerned is I have learned that American people -- the common American citizen - is a hard-
working people --
RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Right.
CALDERON: -- with a lot of compassion, very responsible, but Donald Trump could be arrogant and could be ignorant of lot of economic and social
issues.
But if he gained to reign in politics, a lot - millions or billions of people in the world would probably could think that all the Americans are
like Donald Trump and that could be a real damage to the American image around the globe.
QUEST: I see that you're the chair of the Global Commission on the Economy and Climate and that clearly everybody's been talking about the
climate control - everybody from the popes and the presidents.
And now of course we look forward to COP (ph) which is coming later.
So, sir, what needs to happen?
CALDERON: I want to see a real change in public policy in several countries. In particular, the bigger (neekers) - big countries. Public
policies like establishing some kind of system that could price (ph) the carbon for instance, could establish clear economic incentives in order to
de-carbonize the economy.
But before that I think we need to make an argument in favor of very sul (ph), very strong (AUDIO GAP) economic future, we do all of these
things. And probably that is not clear yet.
(END VIDEOCLIP)
SOARES: Felipe Calderon speaking to Richard there.
Well on Wall Street earning season has begun in earnest. JP Morgan shares are down around 1 percent in after-hours trading.
The bank is reporting a 6 percent fold in revenue for the third quarter. The bank CEO says earning were hit by low interest rates and
global volatility.
We expect more earnings in terms of bank earnings later on this week.
In terms on Wall Street, well it was a bit of a choppy day to be completely honest. The Dow broke a seven-day winning streak - ended down
50 points - just over a quarter of 1 percent.
Now, "Playboy" magazine set off a revolution when the magazine first appeared on newsstands 60 years ago. Now it seems is the end of an era, a
major change at "Playboy" that was unimaginable all those years ago.
We'll tell you what it is after the break.
(COMMERCIAL BREAK)
[16:46:52] SOARES: It seems now men really will be reading "Playboy" just for the articles. The magazine that built an empire based on naked
women says it will no longer feature full nudity on its pages.
"Playboy" says it just really can't compete with explicit images that can easily be found on the internet.
Circulation has sunk to $800,000. That's down from more than $5 million in the 1970s. Our senior media correspondent Brian Stelter joins
us now with more on the new strategy at the iconic company.
And, Brian, I was looking at those numbers for their website and I noticed that once, you know, they dispensed with nudity last year, the web
traffic jumped and the average age of its reader actually dropped significantly.
So this is really quite inevitable, isn't it for the brand?
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Yes, the publisher says that traffic (AUDIO GAP) quadrupled after the removal of fully nude
images. They made the website safe for work because they wanted to attract a bigger audience, and now they say they're doing the same thing with the
magazine.
I'll tell you, I went to the newsstand when this was announced last night, picked up a copy - the first time I ever bought a copy of course -
(LAUGHTER)
STELTER: -- it's $9 a month and yet it's still shrink-wrapped. You know, it still has that sort of taint that other magazines don't like
"Esquire" and "GQ" and "Maxim." So that's what Playboy's going for. They want to be viewed in that same category, and by removing the fully nude
images but still having provocative images, they believe they can reach a bigger audience.
But this is really a case of, well, the internet winning. We all know that anything we can possible imagine when it comes to pornography is
available online. So the original purpose for "Playboy" is now, well, no more.
SOARES: Yes, I trust you when you said this is the first time you bought it, but - for many people -
(LAUGHTER)
SOARES: -- watching this, you know, if you take out nudity, what is left? What would the new "Playboy" magazine look like? Are we talking in-
depth articles and what would those article be about? Are we talking foreign policy, are we - what exactly would it look like?
STELTER: Yes, you know the tagline for the magazine is "entertainment for men." So it wants to really embrace that title and feature interviews
of celebrities, feature interviews with newsmakers.
You know, the magazine has a reputation for really impressive, in- depth Q&A's, but sometimes those Q&A's have been ignored because of all the pictures in between them.
And for example, there was a really revealing interview with Dick Cheney a number of months ago and a famous interview decades ago with Jimmy
Carter.
So I think we'll see "Playboy" try to emphasize more of those revealing Q&A's, rather than revealing imagery.
SOARES: And hopefully they will have a - women will play a bigger role - and I don't mean visually, I mean in terms of editorially to write
articles -
STELTER: That's a good point.
SOARES: -- it'd be very good to see.
STELTER: I'm glad you raised that. One of the editions is going to be a very sex positive column by a female writer. They say they want to
have a sex column that really, you know, portrays it in a very 21st century way and not with the dusty, you know, perception that "Playboy" faces.
But, you know, the company said today they know they are taking a big risk.
So it's going to be really interesting to watch in the months and years to come to see if they can get those circulation numbers to start to
rise after falling for so many years.
SOARES: Absolutely. It'll be targeting millennials no doubt. Brian Stelter there for us in New York. Thanks very much, Brian.
STELTER: Thank you.
[16:50:00] SOARES: We'll have much more "Quest Means Business" in just a moment. First, though, a highlight from "Make, Create, Innovate."
(COMMERCIAL BREAK)
SOARES: The British government is canceling a $9 million contract to provide prison training services in Saudi Arabia.
It comes as Prime Minister David Cameron is set to intervene in the case of an elderly British man who faces 360 lashes in Saudi Arabia.
His crime? Well he was caught with homemade wine. Nima Elbagir reports from London.
(BEGIN VIDEOCLIP)
NIMA ELBAGIR, CNN SENIOR INTERNATIONAL CORRESPONDENT: Carl Andree's family say that he knows that he was breaking Saudi Arabian law when he was
found with homemade alcohol in his car.
His family tell us that he has already served over a year of that one- year custodial sentence that the court handed down and they still have no idea whether he will be coming home and whether the Saudi Arabian
government will listen to their pleas for clemency to suspend the sentence of 360 lashes that the court also sentenced him to.
SIMON ANDREE, SON OF KARL ANDREE: He's 74-years old, yes, he's not a threat, you know. I completely understand that he's committed a crime and
for that you have to face consequences which he understands as well.
But I'd just like to say, you know, on the basis of his ill health, that, you know, if we can get clemency and get him released. You know,
because as I say, I feel he won't survive those lashings.
ELBAGIR: What's your biggest fear?
ANDREE: You know, if he was a younger man, you'd think - you know - sorry, tough luck, Dad. You put up with it, you shouldn't have done it.
But for - he's an old man and I just fear, you know, a punishment which is meant () because it's corporal punishment, could end up being that they're
punishing therefore capital punishment which is - was - not what it's intended in the first place.
So that's my fear.
ELBAGIR: The British prime minister says that he is racing to Saudi government to ask for Karl Andree's release and to plead for clemency.
The British government has also announced a withdrawal of their bid for a contract to help train the Saudi judicial system. This comes after
the Saudi judicial system has been engulfed by a series of controversy.
One of the most famous was that of Saudi blogger and activist Raif Badawi. He was sentenced to 1,000 lashes, 50 of which he received in
January of this year.
His family say they are uncertain whether he would survive the rest of the sentence. And yet in spite of lobbying by governments around the
world, the Saudi Supreme Court this summer upheld that sentence.
And more recently, last month Ali al-Nimr who was sentenced after his involvement, the Saudi government says, in Arab Spring-inspired
demonstrations in the East of the country - crimes that were committed according to the Saudi government itself when he was 17.
[16:55:13] Al-Nimr has now been sentenced to execution and public crucifixion. Britain's arms deals with Saudi Arabia are incredibly
lucrative - worth billions of pounds. But the British prime minister says that he is not shying away from raising this issue and will continue to
raise it. Karl Andree's family hope it will be enough to bring him home safe and sound
(END VIDEOCLIP)
SOARES: Now in a moment, are you smart enough to get into Oxford University? You'll have to get through a tough interview in order to prove
it, and we'll tell you what fashions you can expect next.
(COMMERCIAL BREAK)
SOARES: They've become the stuff of legend. Interviews for Oxford University are known for leaving students quite baffled - very baffled. So
now professors have released some of the questions that applicants can expect and how you can answer them.
Now if you want to study economics and management, one of the questions you could face is, "Do bankers deserve the pay they receive?"
The professors say there are no easy answers and they're more interested in fact in seeing how you try to work it out.
Things do get a bit better for the psychology students though. One of their sample questions is, "Should interviews be used for selection?"
People who have had a rough interview, I'm sure you can sympathize with that. But in a lot and lot of these cases, it is not a right or wrong
answer, it's just they don't want to see your thought process.
And that does it for us for this hour. Thanks very much for watching "Quest Means Business." I'm Isa Soares. The news continues right here on
CNN, the world's news leader.
END
