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Quest Means Business
Continued Stock Volatility Examined; Ideas to Boost US GDP; US Election Campaigns; Bank of Japan Drops Interest Rates; UK and EU Relationship; DJ Kygo's Success. Aired 4-5p ET
Aired January 29, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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MAX FOSTER, HOST: Well a month of extraordinary volatility comes to a close on Wall Street. The Dow ends the session up more than 300 points. It's
Friday, January the 29th.
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FOSTER: The Bank of Japan reverses course and stuns traders. The ratings winner is revealed in the feud between Fox News and Donald Trump. And
Barbie, she's just like us. The iconic doll gets a makeover.
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FOSTER: I'm Max Foster. This is "Quest Means Business."
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FOSTER: Hello to you. Well tonight, a volatile January filled with fear and on a high note the Dow finished the day up more than 300 points.
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FOSTER: U.S. stocks fed off a global rally that started in Asia after the Bank of Japan unexpectedly cut interest rates. It's been an awful start
though to 2016 on the global markets. The Dow is off more than 6% this month. All the major indices of the U.S. and Europe are heavily in the red
since the start of the year.
Now the uncertainty has been fueled by a sharp fall in oil prices and a 2 1/2% rise on Friday still left Brent down something like 9% on the month.
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FOSTER: Todd Benjamin is a financial analyst and a former CNN anchor, you'll recognize him I'm sure. Welcome back Todd.
TODD BENJAMIN, FINANCIAL ANALYST: Good to see you Max.
FOSTER: What do you make of the week? Can you make any sense of it for investors out there?
BENJAMIN: Look, I think obviously, you had some earnings which helped a lot. Microsoft certainly is one of the bright spots today. Facebook was
another bright spot. Companies that have been either exposed to energy, very badly hit. Materials have not been doing well. But I think the
overarching thing that really has helped the markets this week, two things. One, Central Bank action by certainly the Bank of Japan. I think that was a
surprise eight days ago. The Governor of the Bank of Japan indicated this would not happen, it did happen.
The second thing I think also is that the markets are reassessing the chances of another Fed hike in the near term. Now they - people were
thinking they'd move four times this year, now that seems to be off the table, given the volatility that we're seeing globally as well as concerns
about global growth.
And also we're seeing weaker growth in the U.S. Just look what happened, the fourth quarter numbers just came out and growth was only .7%.
Investment slowed, consumer spending slowed. So I think a lot of people are assuming that the Fed will be on pause.
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BENJAMIN: And then of course the other very big thing is that oil. Oil of course came back in price as you said it's still down for the month. But
it's still way up off the lows that we saw of $27. I think people start feeling a little better. But that was on the back of course this idea that
Russia said perhaps we can get together with OPEC and get together on a production cut. I think that's a no starter.
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FOSTER: The reality is there's lots of negativity around and there's very little to grab hold of if you want to get some positivity back in the
market. So a lot of people are just staying out of the market but it's really a time for professional investors, right?
BENJAMIN: Yes, I think look, if you're a long-term investor I think you just have to stay the course. If you believe in certain stocks and you
believe the story really hasn't changed, then maybe you go in and buy on the dip.
But, you know, I think you're right, this is a market for professionals. And it's been an extremely painful month as you just pointed out for retail
investors, you know, globally. And I think when they get their statements, that is going to be another reason to have concerns about growth going
forward. Because people are not going to feel wealthy.
FOSTER: Yes, OK, Todd, thank you very much indeed for joining us.
The U.S. trade representative, Michael Froman, has a few ideas about how to boost GDP. He wants to pass the Transpacific partnership and says it's
crucial in this time when the U.S. and the world need more growth. He spoke to Richard at the World Economic Forum over in Davos.
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MICHAEL FROMAN, U.S. TRADE REPRESENTATIVE: Trade votes are always challenging and they're always politically difficult. But I think members
of both parties want to take actions that help promote growth, that help create jobs, hopefully good paying jobs. It can help increase wages here in
the United States. You know, we're already an open economy and the risk we face barriers in other economies. We need to tear down those barriers so we
increase our exports.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: When you hear the Republican candidates for the nomination laying into the Trade Agreement, Donald Trump
calls it dreadful. You've given away the house. You've heard every criticism from them. They basically say it's a bad deal.
FROMAN: Well, look, I think as people actually read the deal, get briefed up on the deal, and that's what we're doing with members of congress, I
think they'll find it's a very good deal for the United States. It helps promote our interest and our values around the United States. It's going to
increase exports significant. It's going to add to GDP growth at a time when the world needs more growth. And since 95% of the world's consumers
live outside the united states, we can't afford to sit on the sidelines and let somebody else write the rules.
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QUEST: But, do you fear that this barrage of abuse against the deal coming in the poisoned political environment could turn congress, could turn the
senate against it?
FROMAN: I think at the end of the day, members of congress look at what's good for their constituents, what's good for their districts or good for
their states. And we're working with them to underscore exactly what's in the deal that's going to benefit manufacturers, farmers, ranchers, small
businesses and as they learn what's in it for their constituents, we feel confident that they'll go for it.
QUEST: Europe is the next deal. The European deal, when do you expect that to be reached? Because it's been going now a couple years. Must be coming
close to fruition.
FROMAN: We're making good progress. We've actually accelerated our work. You know we're going to work through the issues and I'm hopeful that we can
also get that done this year.
QUEST: What's the sticking point now with the Europeans?
FROMAN: Well, there are different issues. I mean there are some traditional trade issues like access to agricultural markets. But the key part
(inaudible) is the ability to bring two well regulated high-wage economies closer together and see if we can bridge the differences in our regulations
and standards without lowering the level of our health, safety and environmental protection. And that's what we're working towards. We're
making some good progress on that and that's what we're focused on now.
QUEST: When Donald Trump talks about building walls from Mexico that others will pay for and raising tariffs, you know, on goods or tariffs against
China, I wonder whether he's actually read the rules of the WTO or of NAFTA.
FROMAN: Well, I'm a new -- I don't have a license to practice presidential politics. All I'll say is we want to make sure we use all the tools at our
disposal including our enforcement tools to make sure we have a fair and level playing field for American workers. And you know vis-a-vis China as
an example. We have been very proactive in engaging with the Chinese when we see an issue of unfair trade. And if we haven't been able to resolve it
through negotiation, we bring an action against them at the WTO and we've prevailed in all the actions that have gone to conclusion there.
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FOSTER: Now, the ratings are in. The Fox News debate may have been a Trump free zone but the viewers were certainly there.
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FOSTER: We'll give you the details on that coming u.
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FOSTER: Now only days before Monday's crucial Iowa caucuses U.S. Republican Presidential hopefuls went head to head but their frontrunner was missing.
Donald Trump skipped Thursday nights Fox News debate in favor of his own rival event. It's a gamble for Trump and risky for Fox as well.
Brianna Keilar explains how the night played out.
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BRIANNA KEILAR, CNN CORRESPONDENT: Inside a packed auditorium at Drake University in Des Moines.
DONALD TRUMP, REPUBLICAN PRESIDENTIAL CANDIDATE: Look at all the cameras it's like the academy awards. This is like the academy awards.
KEILAR: Donald Trump boasting about the big turnout for his veterans event and the millions of dollars he says he raised.
TRUMP: This is a special night for me and I had no idea this was going to happen. We started out literally 24 hours ago, maybe less. We had no idea.
And we went out. We set up the website. I called some friends, and we just cracked, the sign was just given, we just cracked $6 million, right. 6
million.
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KEILAR: Just a few miles away, GOP candidates on stage squaring off at Fox's prime-time debate with Trump out of side but not out of mind.
JEB BUSH, REPUBLICAN PRESIDENTIAL CANDIDATE: I kind of miss Donald Trump, he was a little teddy bear to me.
KEILAR: The businessman with Fox on the brain too addressing the feud before the crowd.
TRUMP: Fox has been extremely nice and the last number of hours actually. And they've wanted me there and they said how about now. They called a few
minutes ago. How about now? Can you come over? I said, hasn't it already started?
KEILAR: Trump largely holding back jabs at the debating candidates. Instead touting his own poll numbers and speaking about the problems veterans face.
TRUMP: Our vets are being mistreated. Illegal immigrants are treated better in many cases than our vets and it's not going to happen anymore - not
going to happen anymore.
KEILAR: Two other rivals, Rick Santorum and Mike Huckabee, actually showed up at Trump's event.
RICK SANTORUM, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: Not to be offensive but I'll stand a little bit over here so I'm not photographed with the
Trump sign.
KEILAR: The two former Iowa caucus winners standing alongside the current front runner.
MIKE HUCKABEE, REPUBLICAN PRESIDENTIAL CANDIDATE: Rick Santorum, Donald Trump and I may be competitors in a Presidential race but tonight we are
colleagues in unison standing here for the people who let us breathe every breath of free air we breathe, the veterans of the United States of
America.
KEILAR: Trump's competing event was meant for veterans but it's playing out amid an all-out war for the attention of voters and viewers.
(END VIDEO CLIP)
FOSTER: Brianna Keilar there. So the ratings are in and the magic number for Fox News is 12.5 million. Even though that's less than audiences for
other Republican debates. It's still more than four times the number of people who watched Trump's rival event.
Let's go straight to our senior media correspondent, Brian Stelter. I know you were watching this very closely because it's pretty much unprecedented.
What can we read into those figures?
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: I think we can conclude that Fox did lose out on some viewers because Trump wasn't on stage.
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STELTER: This candidate clearly has some ratings power, some ratings magnetism. But Fox was still able to draw a significant audience even
without Trump. There were loyal viewers who wanted to see the other candidates as well.
I think Trump ultimately overstated how much ratings power he really has. He tweeted a few minutes ago saying people have told him if he had been
they would have had 12 million more viewers and the debate could have set a new record.
Well, the record is 25 million it was set back in August and nobody in the T.V. industry was thinking that Fox would ever reach that number with or
without Trump. So I think Trump may be exaggerates how much influence he does have on the ratings, even though he does have some influence. You
know, it's a matter of proportion I suppose, as with everything in ratings.
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FOSTER: But he's still such a big talking point, wasn't he, on social media, Google searches. It was all about Donald Trump, it wasn't about the
other candidates.
STELTER: That's really what's key here.
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STELTER: Regardless of how many viewers actually tuned in for his event or watched it online, you see the map here. All across the country.
Practically every county, Donald Trump was dominating conversation. On twitter, his name came up a lot more than the candidates that were on the
stage, even though he wasn't on the stage. So he was able to maximize media attention and the public's attention even though he wasn't at the debate.
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STELTER: The ratings are one glimpse into how much ratings power he has.
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STELTER: But maybe more importantly, he was able to avoid the risks that came along with being on stage, and then reap the rewards of all the
attention. So heading into the Iowa caucuses he does seem to be in a stronger position than he was 24 hours ago.
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FOSTER: OK, and Brian, I also want to talk about another sort of a key sort of family in the U.S., James Murdoch, he's returning as chairman of the
broadcaster Sky.
STELTER: Yes, good news.
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FOSTER: And he's the son Rupert Murdoch of course. Co-founded Fox News, James Murdoch stepped down as Sky's chairman in 2012 didn't he, during the
U.K. phone hacking scandal and it looks as though there's something going on here in terms of PR as well as management.
STELTER: Yes, we see the Murdoch family and the Murdoch sons kind of re- establishing, and reasserting control. James Murdoch also the CEO of 21st Century Fox. That happened a few months ago - actually six months ago at
this point when Rupert sort of handed off control to his sons.
Now there's a trifecta in charge of Fox, Rupert Murdoch, and then his sons Laughlin and James. In this case though, we see James continuing to kind
of grow his portfolio and regain some of the control and some of the influence he had before the phone hacking scandal a number of years ago.
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STELTER: It does go to show that that scandal, although it was severe, although there were serious consequences, was something the Murdoch family
was able to get past and with James now back at BSKYB, you know it goes to show the company is looking far into the future with its plans for
distribution and for programming.
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FOSTER: OK, Brian, thank you very much indeed for that.
Well whilst the Republican debate has rules, twitter doesn't. The open forum that is the twitter verse was on full display this week and no
surprise that Donald Trump was involved as well. He picked a fight with Saudi Arabia's Prince Al Waleed.
Clare Sebastian is in New York with more. And this is the thing isn't it. He's got a big young audience, he's got a big sort of international
audience as well and it dominates so much debate online.
CLARE SEBASTIAN, CNN CORRESPONDENT: Absolutely Max, and he is willing to use that audience for whatever controversy he desires.
It all started with this not a tweet but a re-tweet from Donald Trump.
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SEBASTIAN: He tweeted out this photo showing Prince Al-Waleed of Saudi Arabia, his sister, and Megyn Kelly of Fox News who as we know he's been
feuding with for some months.
The caption to that tweet saying most people don't know that the co-owner of Fox News is Prince Al Waleed of Saudi Arabia.
Now we know barely an hour goes by without Trump tweeting but the same can't be said for Al Waleed. But he did respond to this tweet from Donald
Trump.
He came out on twitter saying Trump, you base your statements on Photoshop pics, I bailed you out twice, a third time maybe?
He also tweeted a link Max to some news story detailing what those two bailouts were.
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SEBASTIAN: The first his purchase of a super yacht that Trump sold in 1991 as part of his first corporate bankruptcy. The second, his purchase of a
stake through an investment company in the Plaza Hotel, in New York, part of Trump's second corporate bankruptcy.
But this was just a brief flare-up Max, this was just one tweet. Al Waleed's spokesman confirmed to me today that that is his official twitter
account that he does say the photo was fake. But that is the last comment he is going to make on the matter and Trump true to form has moved on to
other matters on his twitter feed.
FOSTER: Well it was one flare up as you say but there were other flare ups involving other key figures as well. Tell us about the former Farmer CEO.
Which a lot of people - a lot of people won't know who he is, but this really got people talking.
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SEBASTIAN: Yes Max this is Martin Shkreli, the former CEO of Turing Pharmaceutical. It gained widespread notoriety earlier or last year after
being accused of jacking up the price of an aids drug, Daraprim.
He is also notorious Max because he spent $2 million in 2014 on a single edition Wu Tang album called "Once Upon a Time in Shaolin." And this is the
source of the controversy this week.
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SEBASTIAN: TMZ the entertainment network speaking to the Wu Tang clan member Ghostface Killah he insulted Martin Shkreli. He said that he called
him various names that we can't repeat on television. He said that he should have released that album to the public.
Martin Shkreli furiously tweeting Ghost mad Shaolin outsold his last five albums, the dudes a non-profit rapper who calls himself ironman but sounds
rusty.
TMZ then went back to Ghostface Killah causing more controversy. He went even further calling Martin Shkreli more names, calling him you know that
Michael Jackson, nose kid. That sparked more fury from Martin Shkreli. He posted a video warning to TMZ. He said that Ghostface Killah should
apologize following up with this tweet that you see as mentioned in my video, I expect a written apology Ghostface Killah at least 500 words, no
grammatical errors and Shaolin stays intact.
(END VIDEO CLIP)
SEBASTIAN: I actually spoke to Martin Shkreli on the phone today. He had no comment. He does not want to appear on CNN. Clearly Max preferring to air
his grievances on twitter.
FOSTER: All right, Kanye West, did you have a chat with him as well today because he's the other one that's been making headlines.
SEBASTIAN: Well no, I haven't had a chat with Kanye West, today Max but this is rapper on rapper violence on twitter.
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SEBASTIAN: Kanye West, now if you don't know much about the rap world you might not have seen this as immediately controversial but Kanye West
tweeting out earlier in the week that he's changing the name of his next album from Swish to Waves.
Now this sparked an immediate reaction from - with Khalifa, another Rapper who tweeted out, Max B is the wavy one, he created the wave, there is no
wave without him. Max B, another rapper currently serving 75 years in prison for a robbery that turned deadly.
(END VIDEO CLIP)
SEBASTIAN: He is known for a certain brand of hip-hop called Wavy. There's a documentary coming out about him called Waves, and that sparked
fury from Khalifa, and other members of the rap community that sparked a tirade much of which we cannot reproduce for television, it embroiled a
model called Amber Rose, who is the ex-girlfriend of Kanye West, and who has a child with Khalifa.
We can't reproduce as I say many of those tweets but we can show you a last jab from Kanye. He said "man it's a sad day (inaudible) lost 2 million
followers since I tweeted, I didn't mean to either him like that."
So Max, we have three rappers, we have a Presidential candidate from the U.S., we have a Saudi prince, and we have a former pharmaceutical CEO all
at each other's throats, all in a week's work for twitter.
FOSTER: And you've been glued to the screens as a result Clare. Thank you very much indeed.
Now the IOC has written to every team of this year's Olympics over fears the Zika virus could hit the Rio games.
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FOSTER: Now Brazil's President wants the country to unite against mosquitoes.
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FOSTER: The IOC has told countries in this year's RIO Olympics to take precautions at the Summer Games because of the explosive Zika virus
outbreak.
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FOSTER: The International Olympic Committee says it's in close contact with the World Health Organization, as it prepares for the games in August.
There are already plans in place for daily inspections of Olympic venues in areas where mosquitoes may breed.
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FOSTER: Brazilian President Dilma Roussef has called for the whole country to unite against the mosquito which carries the virus.
Shasta Darlington visited a research center in one of Brazil's worst affected areas.
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SHASTA DARLINGTON: Here in the state of Pernambuco, we are the very center of the Zika virus pandemic sweeping across the Americas.
More babies have been born with birth defects than anywhere else in Brazil and the only mosquito that's known to transmit the virus the Aedes aegypti
is abundant. Well now another research center, (FIOCruz) right here in Recife is investigating whether a much more common mosquito could also be
transmitting the virus. In fact it's 20 times more common. We had the opportunity to chat with Dr. Constancia Ayres, at the research center.
Take a listen to what she told us.
DR. CONSTANCIA AYRES, SENIOR RESEARCHER: So here we have both species. This is the Zika (vector) Aedes aegypti, the known vector, and this Culex
quinquefasciatus the most common mosquito in America.
DARLINGTON: Including the United States and Canada?
AYRES: Including the United States and Canada. And Culex is also a vector of many other virus like West Nile virus, (inaudible) so --
DARLINGTON: So this wouldn't be the first time that it was transmitting a disease to humans.
AYRES: Yes, exactly. So it's known vector of all the virus. So why not Zika?
DARLINGTON: Now if the Dr. Ayres research shows that the Culex mosquito can indeed carry the virus the potential is huge for it to spread much more
quickly and much further than initially anticipated. But even the Dr. herself admits that there are no conclusions reached yet. That the initial
findings will only be in in about a month and even then she will require months of field work.
Shasta Darlington, CNN Recife, Brazil.
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FOSTER: Meanwhile, more airlines are offering refunds to passengers traveling to countries affected by the Zika virus. Dr. Robert Quigley is a
medical director at International SOS. He joins me now from Philadelphia. Thanks for joining us doctor.
Do you think we're doing enough on this?
DR. ROBERT QUIGLEY, MEDICAL DIRECTOR, INTERNATIONAL SOS: I think we are doing a lot. We could be doing a lot more. I'm anxious, as I'm sure you and
the rest of the public, are anxious to hear what the WHO has to say.
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QUIGLEY: They are allegedly scheduling a meeting and planning on making an announcement the first of next week, and I'm sure that's going to have some
global implications to further enhance our global efforts to contain this nasty disease.
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FOSTER: Would you rather people cut back on traveling right now?
QUIGLEY: I wouldn't rather people cut back on travel. What I would prefer is people, if they're going to travel, that they're educated and the
companies that are deploying travelers are educated as well and through their human resource departments are providing accurate factual
information, not fictional, and making appropriate recommendations at least at the moment based on what the CDC guidelines dictate.
FOSTER: Because one of the big questions around all this is, you know, there needs to be more research to know exactly what the link is between a
lot of these births and the mosquitoes doesn't there but is it just pregnant women who are at risk here.
[16:25:14]
QUIGLEY: Well for the moment that's the case. And I agree with your statement, there needs to be a lot more research.
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QUIGLEY: And I'm confident that there is research going on around the world. There needs to be research focused on eradicating the disease. You
know there's already several organizations that are doing genetic manipulation of different species of mosquitoes which could have a
significant impact on the breeding of the mosquitoes. But that still means research has to be done way beyond that point. I'm confident that there
will be a collective effort worldwide to this end.
(END VIDEO CLIP)
FOSTER: And how's your company planning for this? Because the explosive nature of the current outbreak to track it is going to take in a huge
amount of countries, a huge amount of people very quickly and that's going to take all sorts of planning isn't it for your organization and others.
QUIGLEY: It is. It's not our position and it never has been for the last 30 years to discourage travel.
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QUIGLEY: It's our position as experts in this space to provide appropriate counsel to those clients of ours who subscribe to International SOS and
there's over 10,000 of them covering millions and millions of travelers.
(END VIDEO CLIP)
QUIGLEY: I think that, as I said, there needs to be alignment within the companies with regards to best practices specifically as it applies to
pregnant women or women who are planning on being pregnant. And let's not forget those expatriate assignees who have to have obviously some concerns
if they're living in endemic areas. And companies in the spirit of the duty of care are obligated to provide solutions for that subset of their mobile
workforce.
FOSTER: OK, Dr. Quigley, thank you very much indeed for your expertise on that.
Now, it's not just the temperatures that are falling below zero in Japan this January.
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FOSTER: The central bank had a big surprise for the markets and joined a very special club. Details next.
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FOSTER: Hello, I'm Max Foster, coming up in the next half hour of "Quest Means Business," taking the market by surprise, we examine the Bank of
Japan's move into negative territory.
And it's taken a while but Barbie finally breaks the mold on body types. Before that, though, these top stories at CNN this hour.
(BEGIN VIDEO CLIP)
[16:30:02] FOSTER: The main Syrian opposition says it has decided to take part in crucial peace talks already underway in Geneva, Switzerland.
U.S. special envoy to Syria and Syria government representative began meetings this Friday.
The umbrella opposition group says it will test the seriousness of the Syrian government through negotiations with the U.N. team.
12.5 million people tuned in to Fox News' Republican Debate last night. Republican frontrunner Donald Trump refused to take part in the debate, the
final one before the key Iowa caucuses. Trump instead held his own event at the same time.
Four miners who had been trapped more than 200 meters or 700 feet underground for 36 days have now been rescued in Eastern China.
Rescuers loaded cable to the miners and pulled them up one by one. Fifteen miners have now been rescued. One has died and 13 are still missing.
Five people in Germany have been diagnosed with the Zika virus according to health officials. They've all been (inaudible) Latin America or the
Caribbean in recent months. Meanwhile, researchers in Brazil are trying to determine if common mosquitos could be a carrier of the quickly-spreading
disease. The Dow finished the day up almost 400 points. U.S. stocks sped off a global rally that started in Asia after the Bank of Japan unexpectedly cut
interest rates. Stocks also go that the boost from weak fourth quarter U.S. GDP data, with investors hopeful that the Federal Reserve might go slower than expected on
future rate hikes. In a year that's already been full of economic surprises, the Bank of Japan may have just dropped the biggest one yet.
Barely a week after the central bank governor said he had no plans to make interest rates go negative, the Bank of Japan has done exactly that.
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HARUHIKO KURODA, BANK OF JAPAN GOVERNOR, VIA INTERPRETER: In terms of interest rates, the Bank of Japan has decided to implement a negative rate
of -.1 percent. Going forward, if it becomes necessary, we will look at making that even
lower.
(END VIDEOCLIP)
FOSTER: The Bank of Japan is worried that too many yen are stuck in bank deposits with people too nervous to spend.
Everything else has failed so far, so that's all left is setting a negative interest rate. That means there's no longer much incentive to save money.
Banks are essentially paying to store it. The hope is that savers will decide to start spending that money instead and pace (ph) the Japanese
economy. The ECB already tried similar tactics back in 2014. Other countries like Switzerland, Sweden and Denmark have done the same.
What this does mean is that even more central banks are now out of synch with the world's biggest central bank, the Fed, which has just started to
hike rates. The move has boosted stock markets worldwide. Japan's Nikkei got the biggest boost of all, closing at its highest level in a couple of weeks. And the yen also tumbled against the U.S. dollar and
a stimulus may not stop there. Last week in Davos, the governor told Richard that he had plenty of other
options available.
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KURODA: As far as the Bank of Japan -
UNIDENTIFIED MALE: Yes, sir.
KURODA: -- is concerned, we have lot of policy measures. If necessary, we can further ease the monetary condition.
We can expand strings/strengths (ph) on the so-called QQE - quantitative and qualitative monetary easing. So we have lot of measures to strengthen
our monetary policy.
(END VIDEOCLIP)
FOSTER: Jamie Metzl is a senior fellow at the Atlantic Council and International Affairs think tank. He joins me now from New York. Thanks
for joining us. It feels like, you know, a form of currency wars. Is that an accurate summation?
JAMIE METZL, SENIOR FELLOW, ATLANTIC COUNCIL: Why that's part of it. Certainly this move by the Bank of Japan will weaken the yen and that will
enhance Japan's exports and China and everybody else is going to be looking at that.
So that's certainly one piece of it. But another piece may be even a bigger piece is boosting consumption, boosting spending within Japan.
That's also equally or more important.
FOSTER: We mentioned the other countries that have gone negatives. Did it work for them? Has Japan looked at them and thought actually it might work
for us?
METZL: What hasn't not worked? Nobody knows exactly what the magic formula is for stimulating an economy, so we know there are a lot of
ingredients that work in some ways in different places. And so Japan is trying everything. I mean, Japan has tried all kinds of stimulus - quantitative easing, lots of government spending.
This is another arrow in the quiver. It's relatively small but the goal is shifting the way that people - that people are thinking.
And so if people in Japan are thinking that it's too expensive for them to keep money in the bank, maybe they're going to start pulling their money
out and spending it in other ways, and that's part of what we're seeing in the rise in the Japanese stock market.
[16:35:02] FOSTER: It might not be the sort of impact that lot of people are expecting though, right? Because it doesn't apply to existing
deposits, it's just new deposits?
METZL: Yes. Again, all of this stuff is directional. That it's a relatively small amount and it is for new deposits. But it changes the
mindset and people stop thinking of the bank as a safe place to keep their money, they start thinking, well where else can I put it?
And it's either spending or moving it into other types of assets like in the stock market.
So these moves alone are not monumental. They're more significant in the - in their directionality.
FOSTER: And what do you make of Mr. Kuroda and his habit for these surprises? Is this all part of a tactic or has he genuinely changed his
mind in a very short period of time?
METZL: You know, it's hard to know. Surprises generally are not great things to get from central bank governors, but there's a lot of pressure in
Japan to promote growth. And the other thing is that there are headwinds on - that was mentioned in the press release by the governors of the Bank of Japan - and those
headwinds are becoming a bit stronger. So Japan had some relatively not great industrial production numbers, headwinds on oil prices on China and other things and then Mario Draghi as
was just mentioned on this program, mentioned that the ECB was going to have quantitative easing.
And so this was a preemptive move to get ahead of those headwinds.
FOSTER: And it does increasingly look as though the Feds jumped the gun a bit with its increase in interest rates. It completely stands out.
METZL: Well it certainly stands out. It's yet to be seen whether it jumped the gun or not. The United States economy is doing pretty well.
Our employment figures are in pretty decent shape, and so it makes sense - I believe - for the United States to move towards a more normal situation.
This is we're in a highly abnormal global environment where interest rates are so low or in some cases negative.
FOSTER: OK, Jamie Metzl, thank you. Now the International Labour Organization says there's another thing Japan
could do to boost its economy - get even more women into the workforce. But that in turn would require more men to take a greater role at home, and if the case of Japan's first lawmaker to take maternity leave is anything
to go by, it could be easier said than done.
(BEGIN VIDEOCLIP)
KENSUKE MIYAZAKI, JAPANESE MP, VIA INTERPRETER: There is a buzzword "ikumen" which means men who take part in childrearing and the people call
me the Ikumen MP. I'm Kensuke Miyazaki. I'm a member of the House of Representatives.
ONSCREEN TEXT: He and his wife Megumi Kaneko are expecting their first child in February.
MIYAZAKI, VIA INTERPRETER: I decided to take paternity leave because I thought men taking part in childrearing is indispensable in solving the
declining birth rate and promoting the role of women in Japan's future.
ONSCREEN TEXT: Miyazaki will be the first Japanese MP to take paternity leave.
MIYAZAKI, VIA INTERPRETER: My supporters' saying MPS should take the lead.
UNIDENTIFIED MALE, VIA INTERPRETER: One of the jobs a politician has is to adapt policies to improve people's lives.
ONSCREEN TEXT: In Japan, new fathers can take up to a year off.
MIYAZAKI, VIA INTERPRETER: But those against it say that as a member of Parliament, I should place national matters over private ones.
UNIDENTIFIED MALE 2, VIA INTERPRETER: I don't think he should take paternity leave ahead of regular people.
ONSCREEN TEXT: Other LDP members commented it would be inappropriate for Miyazaki to take paternity leave.
MIYAZAKI, VIA INTERPRETER: The idea of paternity leave does not suit people with conservative policies.
ONSCREEN TEXT: Miyazaki's wife is also and MP. She is planning on taking three months maternity leave.
Unlike her husband, her decision faced no controversy.
MIYAZAKI, VIA INTERPRETER: The children's happiness, it's very important and meaningful that their father or mother spent time with them directly.
ONSCREEN TEXT: Miyazaki's decision has highlighted a generational divide over the role of men and women.
MIYAZAKI, VIA INTERPRETER: There's an enormous difference from the previous generation on how to raise children.
The older generation tell me man makes a lot of money outside the home and the woman takes care of the children at home - that's how I did it.
This controversy made people think about whether or not they are supporting the system and why they think that way.
It's given them the chance to think about it seriously and deeply. So one of my goals is to stir up the water by throwing a stone in it. In that sense, it has been achieved.
(END VIDEOCLIP)
FOSTER: Well still ahead, the State of the Union - Britain's leader heads to Brussels to discuss the U.K.'s future within the European Union.
(COMMERCIAL BREAK)
[16:41:34] FOSTER: Amid uncertainty over Britain's in Europe, Prime Minister David Cameron went to Brussels to work out how to reform the
U.K.'s relationship with the union. He says more work is still needed, dismissing a proposed emergency break to
curb European immigration to Britain. A British referendum on E.U. membership was a key promise of Cameron's deserted party and could come as early as June.
(BEGIN VIDEOCLIP)
FOSTER: June the 6th, 1975, the last time the British people had their say on whether or not to stay inside the European Union.
Sixty-seven percent of voters were in favor, so Britain has remained part of the growing economic block now made up of 28 nations.
Fast forward 40 years - The U.K. holds an election and returns David Cameron's Conservative Party to power. The victory also gives him a
greenlight to hold a vote on the U.K.'s membership in the E.U. which he's promised to do by the end of 2017.
(BEGIN VIDEOCLIP)
DAVID CAMERON, BRITISH PRIME MINISTER: Yes, we will deliver that in-out referendum on our future in Europe.
FOSTER: Cameron wants Britain to stay within a reformed E.U., so before a referendum is held, he wants to renegotiate the terms of the U.K.'s
membership so British voters have a better deal on the table and more reason to remain inside the union.
In a letter to the European Council president Donald Tusk in November, the Prime Minister set out four key demands.
And opt-out on further political integration to protect Britain's sovereignty, financial safeguards for member nations not part of the
Eurozone, cuts to red tape to boost business growth and restrictions on benefits for migrants until they've liked in the U.K. for four years.
CAMERON: I want to see real progress in all of the four areas that I've mentioned. We're not pushing for a deal tonight, but we're pushing for
real momentum.
FOSTER: That momentum has slowed with the migrant crisis, putting Britain's priorities on the backburner.
His next chance to put the referendum back in the spotlight will be on February the 18th, when E.U. leaders meet for a two-day summit in Brussels.
Success there some speculate could see a referendum date announced on March the 9th, allowing for an obligatory 16-week campaign period that could see
voters go to the polls as early as June the 23rd. But few are confident the February talks will bear fruit which could see
Cameron back in Brussels again in March. His next opportunity to get Britain a deal that's worth putting to a public vote for the first time in
a generation.
(END VIDEOCLIP)
FOSTER: The campaign group (Brittany) a stronger in Europe says a Brexit would set the U.K. back by more than $15 billion in E.U. trade costs.
That would appear to go against the World Trade Organization's current thinking. The group's director-general has told CNN that trade should be
used to boost growth. He spoke to Richard at Davos last week.
(BEGIN VIDEOCLIP)
ROBERTO AZEVEDO, DIRECTOR-GENERAL, WORLD TRADE ORGANIZATION: There has been an important ingredient for growth clearly, but the other way around
is also important. If you don't have economic growth trade also suffers which is clearly part of the picture. Today for example, the slowdown in China is bringing trade
down by - to everybody. I mean, it's not only in terms of value because commodity values are going
down, but also in terms of volume because demand is going down.
[16:45:01] RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: So in that environment where you have a
slowdown in China which is bringing volumes and values down and you have commodity issues in terms of prices.
Do people tend to fight harder at the WTO?
AZEVEDO: Absolutely. There is a clear sensing at WTO that that's part of the solution, that's not part of the problem.
So we need to make sure that trade works for the boosting of economic growth.
QUEST: But you also need to make sure trade wars do not break out because people are fighting harder for their own slice of the pie.
AZEVEDO: But there is a - there is pie for everybody. There is not a situation - in the WTO it's not a win-lose situation where if you win I
automatically lose. There are clearly tradeoffs where everybody wins. Some may win more, others may win less, but clearly it is for the benefit of everybody.
QUEST: When do you think Europe and the U.S. will conclude their deal? Before the election?
AZEVEDO: It will be challenging -
QUEST: Before the election?
AZEVEDO: I don't have my crystal ball, I forgot it in the hotel. But it will be tough, it will be tough.
But they want it, I think both sides. Every conversation I had with them they have been very committed to do.
QUEST: Can I ask you a straightforward question for a straightforward answer?
AZEVEDO: Depends. What is the question?
QUEST: Is the Doha Round dead?
AZEVEDO: Oh, oh. (LAUGHTER).
QUEST: And I promise you, I promise you I will never ask this question again to you.
AZEVEDO: (LAUGHTER). That was so - I couldn't see that coming, especially from you. I'm kidding. You asked that several times already.
I think the answer to that question clearly depends on who you ask it to - which -
(END VIDEOCLIP)
FOSTER: Now, the days of Beatlemania are still a distant memory in New York. Now it' a Kygo coming over from Europe to sell out the Big Apple's
arenas. And if you don't know who he is, you're going to meet him next.
(COMMERCIAL BREAK)
FOSTER: Now he's sold out New York's biggest arenas, his songs have been streamed millions of times, now Kygo is so big he's just announced his own
music festival as a testament to the new digital age that one of the biggest names in dance music is a 24-year-old from Norway who doesn't even
have his own album yet. In the final part of our music series, Samuel Burke got backstage with the
EDM sensation Kygo.
(BEGIN VIDEOCLIP)
UNIDENTIFIED MALE: One, two, three!
(AUDIENCE CHEERS)
SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: Brooklyn's biggest arena Barclays Center is sold out. The DJ Kygo didn't write these lyrics and he
doesn't even have an album out. That hasn't stop 20,000 people from paying top dollar to see him tonight. Onstage everyone calls Kygo by his real name - Kira. The 24-year-old
Norwegian has reached a billion streams on Spotify faster than any other musician on earth.
MYLES SHEAR, KYGO'S MANAGER: Streaming is so key. I think that's only been our avenue. That's how we built our brand and with being able to sell
so many tickets and do so much around the world has been streaming.
BURKE: The machine behind Kygo is even younger than he is. His manager, just 22.
EDM isn't all 20-somethings. Patrick Moxey, the founder of Kygo's label Ultra is a 30-year veteran of the electronic music scene.
PATRICK MOXEY, FOUNDER, ULTRA MUSIC: I think this could maybe be a hit for us.
[16:50:00] BURKE: The rest of the industry's fighting to rise in streaming. Moxey says they're all missing the point.
MOXEY: With (high singles out) and we're selling out a huge venue with Barclays Center. So I think it's a tribute to the way the relationship has
changed between artists and music and the fans through the internet.
BURKE: You don't even have an album out yet.
KYGO, DJ AND MUSIC PRODUCER: I don't. You don't need an album because like people don't really listen to albums anymore. They just like find
good songs.
BURKE: And they lifted a lot. Electronic dance music is now a $6 billion market. How are you making money?
KYGO: It is mostly on playing shows like this. Yes, like this.
BURKE: My mom said to me how does this guy sell out a show in New York? He doesn't write the words to the songs, he doesn't sing, so what draws
people to your shows.
KYGO: (I play piano) my whole life. That's what I love to do.
BURKE: You're a musician.
KYGO: I am.
BURKE: DJs like Kygo, (David Guetta) and (Aviche) are all over the top charts. Critics say the genre is a bubble that might just pop.
Even if it does fade, EDM has already changed how music makes money.
KYGO: I never in my life thought that I would play venues like this, --
(AUDIENCE CHEERS)
KYGO: -- and it's all because of you guys!
(END VIDEOCLIP)
FOSTER: That's the music industry. Meanwhile, she is one of the enduring images of American beauty - long legs, flowing blonde hair and mostly made
out of plastic. Barbie has been on toy shelves since the 1950s. Now Mattel is changing her style. It's introducing new skin tone and several new body types.
They include Petite Barbie, Tall Barbie and Curvy Barbie. The changes are even the cover story in this week's "Time Magazine" with the headline "Now
can we stop talking about my body?" But joining me now from New York is Richard Dopley. He's the founder and CEO of Global Toy Group. What do you make of this change?
RICHARD GOTTLIEB, FONDER AND CEO, GLOBAL TOY GROUP: I think it's a momentous change for Barbie and for Mattel and for I think women and girls.
You know, I grew up with kind of a Barbie as part of my generation. I'm a boomer and she grew up and she came about in a world that was a light
whiter and a lot more American in terms of where the market was. And since that time Barbie's become globalized, the world has changed, the United States has changed and I think this is a wonderful move towards
making Barbie really a part of the 21st century.
FOSTER: But there's a context to this, isn't there? Because Mattel had this drop in profit of a third in the last quarter and it largely linked to
Barbie.
GOTTLIEB: Well, yes. Barbie's been struggling for a few years but that's - a lot of that, you know, in our industry, the toy industry, some of
that's cyclical and, you know, it's just Barbie's time to come back and what I'm hearing is she had a good Christmas.
And then some of it is - was - I think struggling a little bit because of changes in demographics. You know, little girls and their moms they want a
doll that looks like them - feels authentic to who they are.
FOSTER: Some of the competitors are doing well though - have much stronger sort of characters don't they? Barbie is quite generic in what you see in
her even when you look at the new range. Do you think they're right to keep it so mainstream, not go towards some of the more edgy segments of the
market?
GOTTLIEB: Yes, I really do. I think Barbie is an iconic doll. She's more than a doll, she's more than plastic. We wouldn't be talking about Barbie
today if she was simply a toy. So she means a lot to people and part of what Barbie is aspirational. And
I like this new doll because I think that these new dimensions to the doll are something girls can aspire to because it's a healthy look.
FOSTER: But when you say aspirational, there's always been that negative association with that aspirational in a sense that she often had the
perfect figure. So aren't they going off piece with this one? Actually it won't have the impact they want because people actually want a perfect figure?
GOTTLIEB: Oh, I don't know. I think in this particular case you're going to have a choice I think that's extremely important between body types.
They're going to have a choice between hairstyles, they're going to have a choice between race and I think it's just - it's the choice that a girl can
find an aspirational doll that one that's linked to our culture - popular culture certainly - and feels like who they are and what they could become.
FOSTER: Is this also a lesson in how companies over dependent on one product and Mattel should have diversified more effectively sooner?
[16:55:03] GOTTLIEB: Oh, you know. You don't get too many Barbies. You know, I mean, that's a - it's a pretty extraordinary thing to have even
one. So I think it's not that Mattel hasn't tried over the years - and they
have. They've Fisher Price and they got Hot Wheels - so they had some other brands.
But Barbie is an extraordinary thing and it's so big that it's hard to imagine being able to do another one. I don't think you get two.
FOSTER: Richard Gottlieb, thank you very much.
GOTTLIEB: Thank you, I enjoyed it.
FOSTER: Thanks for that. We'll have a final check of the markets this month right after this short
break.
(COMMERCIAL BREAK)
FOSTER: Want to leave you with a check of the markets. You know, what a week. It's the end of the week of course and the end of a very brutal
trading month indeed. The Dow ended the day nearly 400 point s higher. That's the biggest daily
point gain so far this year. Still down by 5 percent to date in 2016 though. All but three trading days have seen triple-digit swings for the
Dow this month. One of the biggest causes about volatility has been oil and a 2.5 percent rise today still left Brent down 9 percent for the month.
It's driven Chevron to its first quarterly loss in more than 13 years. The company's having to curtail the projects and slash spending. It already
cut thousands of jobs last year. European markets have had a more positive day, encouraged by those gains in Asia we were talking about where the Bank of Japan's introduced a negative
interest rate. London's FTSE was boosted by shares in Sky as well which were up on news
that James Murdoch will return as the company's chairman. That is "Quest Means Business." Thank you for watching. I'm Max Foster in London.
END
