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Quest Means Business
Olympics Will Be Best In the World; Yahoo Earnings in Line with Expectations; Verizon Expected to be Top Bidder for Yahoo; Yahoo Management Believes Company is Undervalued; EU to Charge Google with Antitrust Over Android; Huawei Launches Dual-Camera Phone; President Obama Travels to Saudi Arabia; Republican Nomination Delegate Fight; Priebus: Republican Contest Is Not Rigged; Chinese Group Seals Giant Beef Deal
Aired April 19, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00]
PAULA NEWTON, HOST: We can't give credit to the real Silicon Valley, but there they are, ringing the closing bell, Silicon Valley, a new show on
HBO. Of course we are part of the same family here at Time Warner and what a day it was on the Dow. It is on a roll. Yes, I'm surprised, too, as it
pushes higher above the 18,000 mark. It's Tuesday, the 19th of April.
(BEGIN VIDEO CLIP)
NEWTON: Tonight, if you can make it here -- OK, I won't sing it for you; you can make it to the White House. Voters go to the polls in old New York.
And there's a slump, at Goldman Sachs as earnings fall 50%. And Yahoo! is hoping for a purple patch. Its Q1 results due out any minute now.
(END VIDEO CLIP)
NEWTON: I'm Paula Newton and this is "Quest Means Business."
Tonight, it's up to you, New York. Voters in the empire state are casting their ballots in the Republican and Democratic primary recalls. Now, the
front-runners Donald Trump and Hillary Clinton, desperately need wins after what are a string of losses.
(BEGIN VIDEO CLIP)
NEWTON: Now both Clinton and Sanders have strong ties to the state, of course. Clinton represented New York in the U.S. Senate, and Bernie Sanders
grew up right here in Brooklyn. Clinton is hoping to win here -- that her win here will end Sanders chances to capture that nomination.
Now on the Republican side, New York native, Donald trump leads polls by double digits but his campaign is in the middle of a shake-up and
controversial comments on abortion have alienated some voters. Now shortly after casting his own ballot, Donald Trump played down his campaign's
recent stumbles.
DONALD TRUMP, REPUBLICAN PARTY PRESIDENTIAL CANDIDATE: I think the campaign's been doing well. Many, many senators, governors, they're all
gone. We have tremendous support and, you know, having Ben Carson and having Chris Christie and so many others supporting me, senator sessions.
We have amazing support. But I'm really honored and putting in that vote today was really something terrific. Have a good time. Thank you.
(END VIDEO CLIP)
NEWTON: Now think about it. Just one month ago the front-runners enjoyed towering leads. Then the Sanders surge bit into Clinton's lead.
(BEGIN VIDEO CLIP)
NEWTON: Sanders has won 7 of the last 8 contests. This is where the Democratic delegate race now stands. As you can see there a little skyline
of New York but New York's rules favor Clinton. And this is why only registered democrats can vote in that primary. And that shuts out the
independent voters Sanders has relied on in the past.
On the Republican side, Ted Cruz delegate count has crept up slowly over the last month, it's unlikely any Republican candidate will pick enough
delegates though to avoid a contested convention. And the same organizational strengths that powered Ted Cruz to recent wins will help the
Texas senator at a contested convention come July.
(END VIDEO CLIP)
NEWTON: Mark Preston is executive editor for CNN politics, he joins me now live from Washington. Mark, again, looking at this race, we are in New
York, obviously, an all-important race on two fronts. And New York isn't used to this. Usually by this time these things are sewn up.
MARK PRESTON, CNN POLITICS EXECUTIVE EDITOR: They are sewn up, they are settled and both parties' nominees or presumed nominees are looking towards
the November election. But as we're seeing now on the Democratic side as you said Bernie Sanders has surged on. But he still has a steep hill to
climb. Right now he would need to win 73% of the remaining delegates in order to secure the Democratic nomination.
(BEGIN VIDEO CLIP)
PRESETON: Now, there is some funny math involved in that. In fact there is a bloc of voters here in the U.S. that tend to be U.S. politicians,
governors, senators, U.S. House of Representative members who are supporting Hillary Clinton. They are not bound to Hillary Clinton however.
And Bernie Sanders is hoping a win in New York tonight, Paula, could help build momentum for him in these closing months.
As you said, though, Donald Trump too another native son. A big win tonight could give him the momentum heading into the closing months of this
election, as well, as he's trying to get to 1,237 and avoid a contested convention in Cleveland, Ohio.
(END VIDEO CLIP)
NEWTON: Yes, and both races still very contested to use the word as we keep talking about these conventions but they're in completely different
places.
Mark, if we take Hillary Clinton in the first instance, she even used language like this today saying, look, we hope we can do it here in New
York because that really will propel her forward. Is the math in her favor? Even if the momentum isn't?
PRESTON: Momentum is not. Math absolutely is. And at the end of the day, the math will always win out.
(BEGIN VIDEO CLIP)
PRESTON: The problems for Hillary Clinton right now is that the fact that she is not able to win over key constituencies which include white voters
as well as young voters, these are what are fueling Bernie Sanders right now is certainly troublesome for Hillary Clinton as she looks towards the
November general election. Bottom line is that Democratic race is not over. But it's certainly given Bernie Sanders enough oxygen to try to push a more
liberal message on Hillary Clinton that she will have to moderate as she tries to appeal to a wider swath of general election voters when we get
into the November general election.
(END VIDEO CLIP)
[16:05:14]
NEWTON: And we just were looking at the poll numbers there and of course Clinton's in the lead but just to remind everybody the delegates are
assigned proportionally so Bernie Sanders is still going to get some.
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NEWTON: If we move on to the Republican race, you know Mark, it's been so interesting to watch Trump here in his home state, of course, and yet,
there is quite a battle going on within the Republican party. They have called it everything from a civil war to a war that's really going to end
the -- lead to the end of the Republican party.
(END VIDEO CLIP)
NEWTON: How much has this race already moved on from New York and really moved on to the convention floor?
PRESTON: Well, you know, in many ways if you look where Ted Cruz is you know today, he is in Philadelphia. Now, the State of Pennsylvania is voting
next Tuesday, not tonight. Seven days from now. He's already in Pennsylvania.
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PRESTON: Bernie Sanders himself on the other side, of course, is in Pennsylvania. We have seen John Kasich who's clinging on to try to win the
Republican nomination was in Pennsylvania and Maryland. So it just goes to show you that this game is not just about New York. But it's about trying
to gate little momentum out of New York going into the next states.
(END VIDEO CLIP)
PRESTON: But Donald Trump who has certainly done very well as he noted earlier when you ran that sound clip he's been able to bring over very
conservative members and the likes of Chris Christie who is considered a moderate here amongst Republicans.
(BEGIN VIDEO CLIP)
PRESTON: Still needs a big win here in New York. 95 delegates on the line. Donald Trump in order to secure the nomination, Paula, needs to win 62% of
the remaining delegates.
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PRESTON: However, a big win tonight could help him next week where we're going to see five other states where like-minded Republicans live
specifically mid-Atlantic region all the way up the east coast up to the states of Connecticut and Rhode Island. So a big, you know, a lot certainly
on the line tonight for Donald Trump.
NEWTON: Yes, Our Mark Preston there setting up this race perfectly yet again. Mark, we'll let you get back. I know results will be coming in in a
few hours and we'll continue to follow that story here on CNN.
Now my next guest knows what it's like to campaign for president.
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NEWTON: Steve Forbes ran in the Republican nomination in 1996 and 2000. He's the chairman and editor in chief of "Forbes Media" and he joins me now
here in New York. It is quite a day in this state.
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NEWTON: I want to start with some comments that you've already made about the Republican Party and this campaign. You say it's been absolutely
pathetic. Why?
STEVE FORBES, CHAIRMAN & EDITOR IN CHIEF, FORBES MEDIA: Because until very recently most of the candidates did not lead with a kind of an optimistic
pro-growth agenda to get the American economy back on track. Quite a contrast to what Ronald Reagan taught us back in 1980 when he led with a
radical tax cut program. People were skeptical of it but he won the election, got the mandate and enacted most of it and helped the economy,
American economy, back then get real growth again.
So they did not -- Donald Trump -- I don't agree with him on a lot of positions but he did lead with a couple of issues and made those front and
center as the focus of debate and the other candidates did not respond in kind. So they left the field to him.
(END VIDEO CLIP)
NEWTON: Yes, in fact, you say he's led a very shrewd campaign. Whether or not you agree exactly with what he's saying.
(END VIDEO CLIP)
NEWTON: By the way are you ready to endorse him or not? Are you endorsing anybody right now you haven't so far.
FORBES: No, no I still feel like the dating game. Still waiting.
NEWTON: Still on the sidelines. OK just waiting for that date. You know, what you have said about Trump, though, again, that shrewd campaign. And
yet, we want do get to the math about this. You know, Donald Trump may still not become the nominee because, again, on that convention floor, it
may be taken away from him because he still doesn't have the threshold of delegates need. How do you feel about that? I mean, in terms of the way the
Republican Party has run this.
(BEGIN VIDEO CLIP)
FORBES: Well, right now, normally, after his victories earlier in the process, he would have the field cleared but even though he has one third
of the Republican Party or voters in these primaries firmly in his corner, stick with him through thick and thin, he's also got one third who are
really against him. So he's got to battle now which previously nominees haven't had to do to get the one third still fluid.
(END VIDEO CLIP)
FORBES: He'll get most of that in the state of New York but he's going to have to do it in the remaining primaries. Pennsylvania will be the focus a
week from now but after that, a key primary is going to be Indiana where if you do well you're going to get all of those states delegates. So he's got
do some speeches on some topics instead of just tossing off a comment, do what he did a few weeks ago at APAC when he talked about Israel and the
Middle East and what we should do. He's got to do more of that on areas on foreign policies, taxation, regulation and education and the like to show
people he's ready to step up his game.
NEWTON: You know, in terms of what you've counseled him to do, you said tone it down but you're also looking at a lot of the policy things that
have been floating around. What advice would you give him right now and would you put money on him becoming the nominee if he takes it?
[16:10:03]
FORBES: He has to be favored because if he does well in some of these remaining primaries, my home state of New Jersey for example is winner take
all.
(BEGIN VIDEO CLIP)
FORBES: So if he wins the plurality of votes there, he'll get 51 delegates doesn't have to share them anybody. And the key thing is he's got his core
voters so he doesn't have to worry about them. So he doesn't have to do the one liners anymore even though they're very funny and we all will watch it
whether we support him or not. But he's got to step up his game and show people that he's thought through these issues, that he's putting together a
team of advisers and that he can put together a government. Reassure those who are either slightly against him or maybe slightly leaning towards him.
You know, emotion does not count casting that ballot. What he has to do is get people who are not on his side and give them a comfort level enough to
say I'll take a chance on this guy.
(END VIDEO CLIP)
NEWTON: OK. Answer my question, though. Would you put money on him becoming the nominee at this point?
FORBES: If I knew, I would be in Las Vegas making bets to get on my rich list.
NEWTON: Well that's an interesting way to dodge the question. I mean look - -
FORBES: Well, it's not a dodge. It is not a -- he should win. It's for him to lose. So you have to say, yes. He is the favorite right now. But Cruz is
starting to improve his game. He's coming out more on the flat tax and some other issues. He knows that he's got to be messenger, I mean, in terms of
having a message, not just being a messenger.
(BEGIN VIDEO CLIP)
FORBES: To ramp up his game I think he's doing in states like Indiana but right now, you have to give the slight edge to Donald Trump.
(END VIDEO CLIP)
NEWTON: And in giving that edge to Donald Trump, I mean what do you think he's been able to tap into? You ran as a successful business person, an
outsider to Washington. Do you think that that is really what the Trump supporters want here? They just are done with politicians.
FORBES: They're done with politicians. We've had seven years of economic stagnation which we haven't had experienced at all since the 1930s. But
also, Donald Trump was well-known to the American people before he entered politics. He did not have to introduce himself which most candidates even
though they may be somewhat national figures it's not a parliamentary system we have here. Most of the candidates are fairly unknown until they
begin a national campaign.
But being on "The Apprentice" T.V. show and the like Donald Trump was already known. He was seen as an authoritative figure, as they like to say
he was the only one who could fire people who didn't work for him. But he was looked up to as an authority figure so he had a following even before
the campaign so when the criticism came, people felt well I already know this guy and so the normal rules of politics didn't apply.
NEWTON: Didn't apply to Mr. Trump. A very quick question, they're wrapping me here. If he does not win the nomination, would you counsel him to go for
a third party run? An independent running for the White House?
FORBES: No. For one thing he couldn't get on all the state ballots. We have 50 different rules for 50 different states. If he wanted to do that he'd
have to be working now to get on the ballots of states like Texas. It's a cumbersome process you can't do it at the last minute.
NEWTON: Gotcha. OK. Mr. Forbes, please come back an interesting conversation with you.
FORBES: Look forward to it.
NEWTON: We'll continue to watch interesting results come in this evening. Appreciate it.
FORBES: Thank you. Thank you, Paula.
NEWTON: Now Republican candidates need to appeal to evangelical voters. We've been saying that for some time. Democrats need though the support of
labor unions after voting in New York, Hillary Clinton travelled to Washington to build up her credentials with those all-important union
workers.
(BEGIN VIDEO CLIP)
HILLARY CLINTON: U.S. DEMOCRATIC PRESIDENTIAL CANDIDATE: The Republican front-runner for President actually says wages are too high in America.
Now, I have said before I do not know who he's talking to. Because Americans deserve a raise. Yet, Republicans and governors -- [ applause ]
and their legislators across the country are waging a relentless assault on workers' rights.
(END VIDEO CLIP)
NEWTON: Joining me now, Philip Levine, is the Mayor of Miami Beach. He has come though to New York and the weather is cooperating. We've had a good
welcome for you here. He's campaigning for Hillary Clinton. Welcome, appreciate your time here.
PHILIP LEVINE, MAYOR MIAMI BEACH: I think I brought the great weather here today.
NEWTON: You can't take credit for everything. Spring in New York is usually like that. In terms of being out there in the trenches campaigning for
Hillary Clinton, there is a huge enthusiasm gap that we have been watching transpire here. What do you do to close that gap, especially even if Ms.
Clinton does wrap it up tonight?
LEVINE: I agree with you Paula. The enthusiasm gap is incredible. I mean Secretary Clinton just has garnered so many more American voters than
Bernie Sanders.
(BEGIN VIDEO CLIP)
LEVINE: I mean, the fact she has 2.4 million more Americans have voted for her than Senator Sanders clearly is an enthusiasm gap and I don't know how
Senator Sanders is going to be able to close that gap. You know, it's funny when I hear about the math coming out, you know, and talking about various
states that Senator Sanders has won and we give him credit, every state's important. Every vote is important. But Secretary Clinton has -- she's won
Florida, Ohio, Texas, Nevada. You know? It goes on and on and on, Louisiana, Georgia, he wrote off the entire south saying it doesn't
represent the Democrat Party.
[16:15:07]
LEVINE: So clearly he has an enthusiasm gap Senator Sanders, but I hope that you know obviously when Secretary Clinton gets this nomination his
people will, of course, support her going for the general election.
(END VIDEO CLIP)
NEWTON: It was an interesting way to turn the tables on me but I'm not going to let you off the hook with that. I mean look, she's not getting
crowds of 30,000 people the way Bernie Sanders does and a lot of the votes that she got were months ago. When people now, the national polls as you
know, you just saw them like I did, show a very tight race between Sanders and Secretary Clinton. Even if Secretary Clinton locks up the nomination,
don't you want Bernie's voters out there on the streets for the Democrats for that national election? Some of them might stay home.
LEVINE: 100%. And I think we are going to get those people to support. Just think about it. And I listened to Steve Forbes and I have all the respect
for him and his run for presidency. And he's very similar to Donald Trump who will probably get the nomination. They both represent inherited wealth.
(BEGIN VIDEO CLIP)
LEVINE: And I don't believe - We have Donald Trump out there who wants to build a wall, whose approval ratings I think with women or disapprovals are
something like 70 something percent but at least he's doing better with women than he's doing with African-Americans or Hispanics. I think we're
going to find that the Democratic Party is going to come together because they know that Secretary Clinton has had 25, 30, 35 years in supporting
these people and making sure that they have better wages.
You listen to her in Washington, she wants to rebuild the infrastructure. That's so important. That creates jobs, investing in our country today is
what it's about. And I think we are going to see all of the Democratic Party come together when they know what the choice is going to be which
will be Secretary Clinton.
(END VIDEO CLIP)
NEWTON: OK. Mayor Levine, though you still need those Democrats to come out and vote if she does become the nominee and I've spoken to Democratic
voters in the city and they say they can't help that feeling like they're watching an episode of "House of Cards" with two people conniving to get
back into the White House. How do you actually put her front and center to really be that earnest candidate that everybody wants to back?
LEVINE: Well you know what I think she is, and I think it's all about the issues. And I think Secretary Clinton - the people know Paula. The one
thing that they know about Secretary Clinton is she's tough, she's resilient and she'll get the job done.
(BEGIN VIDEO CLIP)
LEVINE: And that's what's most important to Americans today. They're so sick of all these politicians that literally go into office and they have
no ability to get things done. Secretary Clinton has a history of getting things done. And remember something, we are interviewing right now for the
CEO of the United States of America and when you look at the field out there, she's the right one because she'll show up every day and she'll move
the needle and that's the most important thing and people trust that she'll do that.
(END VIDEO CLIP)
NEWTON: Mayor Levine, can't thank you enough. I think the weather is going to hold throughout the evening as we look at results and we look forward to
watching this campaign with you. Appreciate it.
LEVINE: Thank you so much Paula.
NEWTON: Thanks.
Now, we just have some breaking news into CNN. Intel says it will cut some 12,000 jobs around the world. That's 11% of the chipmaker's workforce. It's
part of the company's restructuring to focus on cloud computing and what it calls the internet of things. It has been a successful strategy thus far.
We will continue to keep to an eye on that but elsewhere on Wall Street, a rise in oil prices pushed stocks higher while disappointing corporate
earnings pushed them back down again.
(BEGIN VIDEO CLIP)
NEWTON: I mean that was a tidy increase though. Netflix shares ended the day down about 13% and IBM off almost 6%. Now the Dow managed to end the
session as we were saying above 18,000 for the second day in a row and it has seen a stunning recovery since February when it fell below 16,000. I
mean hard to believe that was just a few weeks ago.
Joining me now from the floor of the Exchange, Ben Willis, the senior trader at Princeton Securities.
(END VIDEO CLIP)
NEWTON: I mean Ben, I got to tell you, I don't see the fundamentals propelling this market at this point. Are you guys just crazy with spring
here? I mean what is going on what's fueling this market?
BEN WILLIS, SENIOR TRADER, PRINCETON SECURITIES: These are not fundamentals. The best way to take a look at this market is risk off. The
markets have traded on a risk off mentality since the lows you mentioned in February, meaning short covering.
(BEGIN VIDEO CLIP)
WILLIS: We've had record short interest in the marketplace and what we continue to see is a sector move of short covering and whether or not that
was from the oil which really started this direction meaning the small oil stocks that have been under pressure and fears that they were going into
bankruptcy, we saw in February a move to short cover. That's exactly what we saw happen in the oil markets today. There was a huge expectation of a
trade on the short side expecting oil to fall below $35 a barrel after Doha. When it did not happen that risk off trade started to happen and you
saw a squeeze in the oil patch. The rest of the market if you take a look at some of the high short interest stocks those are the stocks that have
been performing to the upside. So that's not investors going to work. Those are traders taking risk off if you will.
(END VIDEO CLIP)
WILLIS: So that being said, it's been a sector by sector risk off. That is a bullish indicator but it's -- but the numbers you're seeing are not based
on a bullish sentiment, if you will it's based on fear and covering that fear.
[16:20:10]
NEWTON: And point taken. It's important that we really highlight and are transparent about the technical moves in the market but if I hear you
correctly does that mean we are going to pay for this a few weeks down the road? Because even you know banks like Citi have come out and said they
don't like the fundamentals going forward.
WILLIS: Well very interesting today, Merrill Lynch Bank of America came out and said for the 12th consecutive week they have seen their smart money
poll selling stocks. Just to be clear, I am bullish on the United States stock market. This market is being moved from the fundamental side if you
will because of the Central Bank intervention. That's not something that investor's trade on fundamentals. They have been forced into indecision.
Janet Yellen and crew could not make a decision so the American investor are sitting on trillions of dollars not investing in the marketplace. So
what I'm saying again is the move to the upside that you're seeing in some of the indices is based on traders saying there's too much risk. They need
to take off, they've already sold those stocks short. In other words, sell high, buy low. The buyer and you're seeing that right now - it's not an
anticipation of buying low and being able to sell them higher. That money is sitting on the sidelines but, again, that is a bullish indicator not a
bearish indicator.
NEWTON: Well we'll see going forward, especially when, again, we get more indication from the Fed Reserve as the next weeks and their meetings
continue. Ben thanks so much, always appreciate the update.
WILLIS: Thank you.
NEWTON: And some more numbers just in to CNN. It is a busy earnings season. Yahoo! Has just reported first quarter earnings and they beat slightly on
revenue but were largely in line with Wall Street expectations. Now the company's stock is up slightly in after hours' trading. It comes as Yahoo!
Is examining bids from potential buyers and we'll have a full breakdown and analysis later in this hour.
Now, in a moment, IMF Chief Christine Lagarde warns the possibility of a "brexit" is already damaging the U.S. economy.
(BEGIN VIDEO CLIP)
(END VIDEO CLIP)
(COMMERCIAL BREAK)
NEWTON: Mark Carney says the risk of Britain leaving the E.U. is already affecting the British economy.
(BEGIN VIDEO CLIP)
NEWTON: Now the Bank of England Governor said U.K. membership has helped make London a global financial center and warned that a "brexit" could
threaten the city's position.
(END VIDEO CLIP)
NEWTON: Still the British Justice Secretary who is heading the "Vote Leave" campaign urged voters to ignore all those doomsday scenarios.
(BEGIN VIDEO CLIP)
MICHAEL GOVE, BRITISH JUSTICE SECRETARY: The truth is that the day after Britain voted to leave the European Union, we would not fall off the edge
of the world or find the English Channel replaced by a sulphurous ocean of burning (inaudible). Quite the opposite. We'd be starting a process, a
happy journey, to a better future.
(END VIDEO CLIP)
NEWTON: Well not much hyperbole there. Christine Lagarde who is not prone to hyperbole says the uncertainty created by a possible British exit is
already taking an economic toll. Richard sat down with the IMF's managing director at the Spring Meetings in Washington. She told him it's the fund's
mission to identify risk to the global economy and its independent economists predict a "brexit" would slow growth.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, IMF MANAGING DIRECTOR: Already we can tell that it will have negative impact on the U.K. economy and probably also on the partners
of the U.K. economy. And let me give you a couple of examples. One is the currency has gone down by about 7% in fact last 6 months. The volume of
transactions in London real estate transactions, have significantly declined according to the records we have.
[16:25:12]
LAGARDE: And there is every reason to think that there will be such a level of uncertainty, not right now, but if there was a negative response for the
time when the negotiations will go on in terms of trade, in terms of financial passports, in terms of future for those companies that have
elected to pick London as the headquarters for the rest of Europe. So that uncertainty in and of itself is going to be negatively affecting the
economic situation.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: I'm not trying to enmesh you in the domestic politics of the referendum but I do need to put to you what
the other said once the report came out, you will have seen it. Nigel Farage and the "Vote to Leave" Campaign said "The IMF would say that
wouldn't they? They're doing George Osborn's pro-E.U. business for them."
LAGARDE: We are looking at it as independently as we can. And we have totally unbiased assessment of facts, figures, taking into account the
negotiation time in case of "brexit," understanding the untangling of the many trade relationships that have been established over time between the
U.K. and the other European countries. I mean, this is a whole marriage of 40 years or so. That you try -- that could be unraveled from an economic
point of view.
I'm not - you know we're not opining on the political aspect of it. On several other dimensions that I'm sure are critical also for the voters but
from an economic standpoint we know for a fact that it is going to produce number one uncertainty, number two, a difficult untangling of existing
relationships which will probably slowdown growth, certainly for a period of time.
(END VIDEO CLIP)
NEWTON: Turning to Brazil now, President Dilma Rousseff says the summer's Olympics will be the best ever, despite the threat of her impeachment.
(BEGIN VIDEO CLIP)
DILMA ROUSSEFF, PRESIDENT OF BRAZIL: (As translated) I hope to win. Not only in the court, in the stadiums, in all the sporting venues but also
outside them where we have done a series of works which have transformed Rio de Janeiro, works which we carried out together with City Hall and the
state government. I am certain it's the best Olympic games of this country.
NEWTON: Meantime, the Brazilian markets climbed more than 1% Tuesday, markets are up more than 20% this year largely on the fact that Dilma
Rousseff looks likely to be impeached.
(END VIDEO CLIP)
NEWTON: Now meantime, Colombia's finance minister says the way Brazils handles the challenges its facing will have a broader impact on the entire
region. Richard asked Mauricio if he expects any spillover from Brazil's crisis.
MAURICIO CARDENAS, COLOMBIAN FINANCE MINISTER: Markets consider Latin America as an asset class. But of course, and Brazil plays an important
role, I mean it's the largest country in the region. But a group of countries is differentiating itself from Brazil, particularly the pacific
alliance which we're members of, Mexico, Chile, Peru and us. We follow different paths, different policies. But of course we're observant to what
happens in Brazil.
QUEST: You're still suffering, obviously, the oil price continues -- although it has improved slightly and you're still - you've still got
problems on currency issues.
CARDENAS: Well we're still adjusting to these new normal.
QUEST: What is this new normal?
CARDENAS: Well, to me it's oil at 40 rather than 100 or 80. And we think that it's going to stay there for a long time so we have to adjust to that.
That means we're going to have less stimulus from our commodity exports, less investment in the oil sector. We need to develop other sectors and the
weaker currency helps a lot in our culture, tourism, manufacturing.
QUEST: But the weaker currency is not giving you the boost in exports that you would have hoped for yet.
CARDENAS: Because of the slow growth in demand globally, including the United States. I mean, if the U.S. doesn't grow faster, that's not good
news to us because we have a weaker vis-a-vie the dollar.
QUEST: But everybody else has a weaker currency vis-a-vie the dollar. So those other markets are not able to pick up the slack.
CARDENAS: Absolutely. That's why we're so dependent on U.S. growth.
QUEST: Panama is being clobbered left right, and center at the moment on the question of the "Panama Papers." You must be feeling some spillover
because if there's any questions about Panama's legitimacy in the financial services sector or as an offshore center, you get hit as well.
CARDENAS: Absolutely We're so dependent on everything that panama does and we need them to do something that is simple, basic; exchange tax
information. Tell the world who owns those corporations, who owns those assets, those accounts in Panama. That is simple. And this is the world
where we live now. I think in the spirit of progress and cooperation, all jurisdictions are now engaging in this automatic exchange of information
and we need Panama to go in the same direction.
QUEST: And you told them that?
CARDENAS: Yes. We're actually negotiating with them as we speak in Bogota, Colombia. There's a round of negotiation between Panama and
Colombia on the exchange of tax information. It's crucial, and they need to do it and do it with everyone else.
(END VIDEOTAPE)
PAULA NEWTON, CNN ANCHOR: Yahoo is slashing forecasts facing a shareholder revolt and up for sale. We'll break down the potential suiters and first
quarter results. That's up next.
[16:30:00] (COMMERCIAL BREAK)
NEWTON: Hello, I'm Paula Newton in New York. Coming up in the next half hour of QUEST MEANS BUSINESS, Google faces a massive antitrust case in
Europe over Android phones and I'll speak to one of the lawyers leading that case. And we'll break down a Yahoo's latest earnings numbers and the
future from Marissa Mayer.
Before that though, these are the top news headlines we're following this hour. At least 28 people mostly civilians have been killed after a
powerful explosion in Kabul. Now, a suicide bomber detonated a car full of explosives before a gunman attacked security forces. The Afghan Taliban
has claimed responsibility for the attack, which appeared to be targeting a security team that protects members of the government. Speaking at The
Hague, U.N. Secretary-General, Ban Ki-moon, condemned the violence.
(BEGIN VIDEO CLIP)
BAN KI-MOON, U.N. SECRETARY-GENERAL: First of all, I'd like to express my deepest condolences for the victims and their families and friends for --
and I condemn strongly this terrorist attacks for the people in Afghanistan. There is no justification whatsoever attacking civilian
people, as well as even security people. We must fight against this terrorist attacks.
(END VIDEO CLIP)
NEWTON: The death toll in Saturday's earthquake in Ecuador has risen to 443. The country's defense minister says more than 200 people are still
missing and more than 4,000 injured after the 7.8 magnitude quake. It's the deadliest earthquake to hit the country since 1987.
New Yorkers are going to the polls to vote in Democratic and Republican presidential primaries. Hillary Clinton and Donald Trump both voted in New
York State earlier as they look to solidify their leads. The first exit polls from the primary are due out in about a half an hour from now.
U.S. law enforcement officials say breaking into the iPhone that belonged to the gunman in the San Bernardino shootings helped their investigation.
Investigators say they now have a better idea of what Syed Farook did immediately after the mass shooting last December. Apple resisted the
FBI's demand to unlock the phone. The FBI then got into the phone without Apple's help.
Dilma Rousseff says the upcoming Rio Olympics will be the best in the world. In a response to a question from CNN's Shasta Darlington. The
president said she's confident the games to be a success despite the current impeachment proceedings against her.
Yahoo has posted its first quarter results and they're mostly in line with Wall Street's expectations. The stock though is trading flat in afterhours
trading. Clare Sebastian joins me now. Giving everything that's going on perhaps flat is OK. I mean going into the numbers a little bit more
deeply, what do you see there, Clare?
CLARE SEBASTIAN, CNN MONEY REPORTING: Well, I mean, the bottom line is could have been a lot worse. This came in roughly in line with and maybe
even slightly better than some analysts were expecting. Revenue per share -- revenue just around 1.09 billion, earnings per share around 8 cents. So
that is roughly in line with what's expected and there's a bit of up and down here in the earnings report. Some good and bad. You've got mobile
revenue increasing. We've growth revenue declining. The thing that got investors excited in afterhours trading initially was the fact that Marissa
Mayer said they've made substantial progress toward potential strategic alternatives for Yahoo. That is of course the major focus at this point.
We still expect many of the questions in the earnings call at the top of the next hour to be focused on that, on the future of the company going
forward whether or not they're going to sell off all or part of the core business. That bidding process has been very opaque, very much the subject
of rumors in the past week. And we now know, you know, this earning report shows that while this is roughly in line with what people are expecting,
this is a company of revenue is declining and earnings declining and struggling to get it back on track.
NEWTON: Yes, and in fact even pricing Yahoo without the cash it has on its books has very difficult. I mean, Clare, she says there's been strategic
progress but in terms of the suitors we see lining up for Yahoo, what are they buying here? Why would they buy Yahoo?
SEBASTIAN: Well the bidding price has revealed quite a bit to us about what it is that could be of value in Yahoo. We look at Verizon who has
expressed interest. They could well be interested in the advertising assets. They acquired a company BrightRoll, which specializes in video
advertising. There's also Yahoo's Gemini platform and Verizon of course also interested in media assets that Yahoo has, Yahoo Finance, Yahoo
Sports, Yahoo news and it also owns AOL. So that would add to that portfolio. Also interest from the parent company of the "Daily Mail" in
the UK and also sheds light on how valuable Yahoo's media assets could be.
It's said it has a billion monthly users. It ranks third in the U.S. in terms of most trafficked web properties in February behind Google and
Facebook. But the point of the matter is, you know, when you strip out the parts of the car, they're of value. But altogether this company is still
declining. So it remains to be seen who could, if anyone, could move in and turn the sum of the parts into something that's more reliably
profitable.
NEWTON: Yes, which is so interesting that a lot of people believe that perhaps the Verizon deal is the best one. Who knows at this point? Is
Yahoo Really going to string along shareholders for a long here? When will we see what Yahoo's future is going to like?
SEBASTIAN: The timing, Paula, really depend on how many bidders there are and how much they're offering, if there are lower bids, it could take
longer. If there are many bid it could take a while for them to troll through the various offers. We at the moment, no published offers. It's
like underlining. It's just the rumors and reports out there. So we really don't know at what stage is company is at in terms of -- all we know
is that phrase substantial progress that came out of the earnings report today. And of course there's also the issue of the activist investor stock
would value which is seeking to replace the entire board of Yahoo at their meeting in June. They're hoping to see progress before that on some kind
of major move, either a sale or spinoff of the core business or perhaps something else. They could block a sale potentially if it doesn't fit with
what they believe is the fair value of the company. So very uncertain still going forward for them.
NEWTON: Which is why it's going to be a very tough call for Yahoo. That's coming up in about 20 minutes and we'll continue to bring you more news on
Yahoo. Clare Sebastian, thanks so much, appreciate it.
[16:40:00] Now Google is coming under fire from the EU's competition, Watchdog, over the way it uses the Android operating system. Now, reports
say the European Commission plans to file official anti-trust charges against the company on Wednesday in Brussels. Competition Commissioner,
Margret Vesger, argues that Google abusing its dominant position by unfairly favoring its own apps. Android used on a majority of phones in
Western Europe and Google mandates that a suite of Google apps come preloaded on every device. Google denies that it's broken any rules. It
says Android is what it calls open source and the consumer ultimately decides what apps to use.
Now, if google is found guilty, it could be on the hook for a fine as high as 10 percent of revenue. That's about 7 $billion. Now, FairSearch is one
of the companies that launched complaints about Google to the European Commission. Earlier I spoke to FairSearch's legal counsel and
spokesperson, Thomas Vanje, he told me Google is inhibiting competition and depriving consumers of choice.
(BEGIN VIDEOTAPE)
THOMAS VINJE, FAIRSEARCH LEGAL COUNSEL AND SPOKESMAN: I think if the commission does what it seems to be about to do then OEMs, manufacturers of
phones in particular will be free to differentiate their products. To give space to other innovative providers of apps in particular. So consumers
will have more choice of applications. And they might also have more choices with respect to the devices that they can purchase.
NEWTON: Now, Google argues that, you know, the customers already have choice. I'm holding an Android phone here and an Apple phone here. And I
can tell you, both come with these prepackaged apps, but that doesn't mean you can't use other apps. And in some cases you can delete some of the
apps. The crux of your argument, though is that somehow the customer does not have choice that they're locked in.
VINJE: The power of default is very intense. Lots of studies indicate that and I think it's fairly common knowledge it is the case so consumers
tend to use, and this was true in the Microsoft case ten years ago, as well. They tend to use what they're provided. And so that means that the
programs that are included by default with prominent placement are the programs that consumers tend to use. That means that competitors have
difficulty reaching their audiences, that means they have difficulty competing, generating revenues necessary for further innovation and that I
would suggest does in the end limit consumer choice.
NEWTON: It's the Microsoft case here and the fact that Microsoft lost that case, that is what's giving you hope here and some people estimate as much
as 10 percent of Alphabet, the parent company's, revenue. Is that what is making you hopeful in terms of what your case rests on?
VINJE: There's certainly similarities of this case and the Microsoft case. And the European Commission showed that it was capable of being very strong
in the Microsoft case. So, I think we have based upon the merits of this case and the president of the commission acting versus Microsoft and
others. We have good reason to hope that this case will end in a finding of violation by Google. With respect to the fines, that's not at all what
drives us. It is possible that Google will be fined some significant amount. But to us, the thing that really matters is the change in the
conduct. And we hope that will give room for more competition and again more innovation and choice for consumers.
(END VIDEOTAPE)
NEWTON: Now whether you choose to use android software or something else, taking the best photos on your mobile device comes down to hardware.
Chinese phone maker Huawei has equipped its latest smartphone with two rear cameras. And claims it's taking a leap toward professional quality photos.
CNN Money Samuel Burke took the new P-9 for a test shoot around Manhattan.
(BEGIN VIDEOTAPE)
SAMUEL BURKE (voice-over): That line between professional cameras and smartphone cameras is blurring. Huawei's new P-9 smartphone with dual
cameras. I'm not just the one in front and the one in back. It takes one picture with these two lenses and we went to three New York landmarks to
test it out.
BURKE (on camera): The first up, the Brooklyn Bridge.
BURKE (voice-over): The two lens system lets you take high quality pictures with the foreground in focus and the background blurry or the
other way around.
BURKE (on camera): Huawei worked with the famed German camera maker Leica to develop this technology. One camera takes photos in color, the other
one in black and white. Combined the companies are promising a higher quality photograph.
Our next test is at one of New York's newest landmarks, the High Line. A bit of an artsy photo with the P-9 and compare it with the same shot of the
iPhone 6S.
BURKE (voice-over): The Huawei lets you control just how soft you want the background to be. The iPhone, not so much.
BURKE (on camera): Huawei is already a top smartphone manufacturer in china. They're gaining ground middle markets like Mexico. And now looking
to take on the West with the P-9 and set you back about 680 bucks. Of course, you can't spend the day sightseeing in Manhattan without a visit to
Central Park. The dual cameras even let you focus after you've taken a picture. I've never seen pictures taken on a smartphone look quite this
good and even if you're not in the market for an Huawei phone, rumors say Apple might bring a two camera system to the iPhone 7. With pictures like
these, I'd expect to see a lot more smartphones with dual cameras soon.
(END VIDEOTAPE)
NEWTON: That was our Samuel Burke there. I have no excuse for bad photos.
We are covering President Obama who is traveling to Saudi Arabia. After the country said it might sell U.S. assets.
(COMMERCIAL BREAK)
U.S. President Barack Obama is on board Air Force One right now on route to Saudi Arabia for what could be a very testy meeting with the country's
rulers. The White House is threatening to veto a measure that would let 9/11 victims' families sue the Saudi government. Saudi Arabia reportedly
said it will sell off American assets if that's allowed to happen. Mr. Obama's trip comes at a highly sensitive time, as CNN's Nic Robertson
explains.
(BEGIN VIDEOTAPE)
BARACK OBAMA, U.S. PRESIDENT: I am honored to be in the timeless city of Cairo.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (voice-over): 2009 and just in office, President Obama came to Egypt.
OBAMA: We meet at a time of great tension between the United States and Muslims around the world.
ROBERTSON (voice-over): Talks of reshaping U.S. relations with Mideast nations. The crowds loved him. Less than two years later -- the same
city, his host, President Mubarak overthrown in the Arab Spring Uprising. How Obama responded to the fall of his allies set the tone for of his
relationship with the region since.
AF OBAID, SAUDI STRATEGIC ADVISOR: It wasn't so much that they fell. It was so much how the U.S. went about it and really the beginning of this
schism.
ROBERTSON (voice-over): The schism that grew to rupture with the U.S.- Iranian nuclear deal. The Saudis were furious.
FAWAZ GERGES, LONDON SCHOOL OF ECONOMICS: They believe that Barack Obama has sold them at the altar of his own with Iran. Their arch enemy.
ROBERTSON (voice-over): In response to all this, Saudi Arabia has ramped up its armed forces. Overtaking Russia to become the world's third largest
defense and security spender. And last year, formed a 34-nation Sunni Muslim coalition to follow Saudi's lead.
GERGES: As a result of their mistrust of Barack Obama, the Saudi's now have adopted a more muscular foreign policy. They are on the attack in
Yemen and other places and they're trying to counter balance Iran in the region. The Americans really have lost control.
[16:50:00] ROBERTSON (voice-over): Where they needed control the most, solving Syria. The Saudi's new king is a very impatient ally. He wants
Assad gone now and Iran's influence removed.
AF OBAID: Is that course going to change now is there's a new president more amenable to Saudi interest? I don't think so. The ship has sailed.
ROBERTSON (voice-over): But for all the strains, both sides still need each other. Saudi Arabia needs U.S. weapons. Obama wants regional
stability. His time in Riyadh will not be about divorce, but easing the estrangement. Nic Robertson, CNN, Riyadh, Saudi Arabia.
(END VIDEOTAPE)
NEWTON: In a moment, something you really don't want to miss. It's a closer look at the fight for delegates within the Republican Party. But
first, we have a highlight from "MAKE, CREATE, INNOVATE."
(COMMERCIAL BREAK)
NEWTON: Now, the head of the Republican National Committee has met with party congress people to try and reassure them that the nomination process
is fair. Extraordinary that he has to do that because Donald Trump has blasted the nomination system in fears that the lead so far will not
translate into a win with delegates at the convention. Gary Tuchman has an interesting look on how and why that would happen.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Thank you for bringing it up.
GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice-over): Katie Frost has just been elected as a Ted Cruz delegate. Dale Jackson and Denise Ognio
will also be going to the Republican National Convention, but as Donald Trump delegates. However, as the two of them sign papers officially
committing themselves to Trump, they have also committed themselves to abandoning Trump for Ted Cruz. As soon as possible. So why and how is
that happening?
UNIDENTIFIED MALE: Congratulations to Katie Ross and Denise Ognio and Dale Jackson. They will represent us at the national convention.
TUCHMAN (voice-over): This is the Republican convention and 3rd congressional district of Georgia, south and west of Atlanta. Where many
Donald Trump supporters say the fix was in.
UNIDENTIFIED MALE: You may say it wasn't determined before we got here but that's not true.
TUCHMAN (voice-over): Donald Trump won the Georgia primary in March. And he won Georgia's 3rd congressional district. According to the rules he
automatically gets two delegates. Ted Cruz who came in second gets one. And this is the day that more than 200 active Republicans from the district
elect the actual people who will be those delegates. Sounds simple enough. But things were not so simple early in the day when it came to selecting
the Trump delegates. Listen to what Denise Ognio says at the end of this exchange, before she was selected as a Trump delegate.
UNIDENTIFIED MALE: What campaign did you work for?
UNIDENTIFIED MALE: She Told you.
DENISE: I worked for,. I worked for a lot of campaigns. You are asking do I support Ted Cruz? And I do.
TUCHMAN (voice-over): A Trump delegate, But a Cruz supporter. And then the other winning Trump delegate, Dale Jackson was asked if he supported
Ted Cruz.
DALE: I support limited government and conservative principles.
TUCHMAN (voice-over): The clear evidence he supports Cruz was easy to find. Flyers were passed out that stated, "Please Vote for Ted Cruz
Delegates." And it listed the names Dale Jackson and Denise Ognio who were later elected as Trump delegates. This man is a Trump supporter.
CLINT ROUGHTON, TRUMP SUPPORTER: The voters voted the majority for Donald Trump and knowingly sending Ted Cruz supporters up there I think is wrong.
TUCHMAN (voice-over): So even though the Trump supporters might not like it, but it's totally within the rules and Ted Cruz's campaign knows how to
play them.
[16:55:00] Aggressively recruiting supporters to turn out for the conventions held in congressional districts throughout Georgia. Daniel
Jackson and Denise Ognio are obligated to vote for Trump. But if it goes past the first ballot, bye-bye Trump.
TUCHMAN (on camera): What will it be like voting for Donald Trump and Ted Cruz will most likely still be fighting to be president of the United
States? How will that make you feel, honestly?
DALE: Well, I mean, that's the rules. I'll follow the rules.
TUCHMAN: But how will that make you feel?
DALE: I know there's going to be a second vote.
TUCHMAN: So rules are rules and Donald Trump will get two votes from the newly elected delegates, but if the voting at the convention in Cleveland
goes to a second round they'll do the political e equivalent of leaving Donald Trump at the altar.
So do either of you have any ethical issues at all with not voting for Donald Trump after the first ballot as Donald Trump delegates?
DALE: Absolutely not.
KATIE: No.
TUCHMAN (voice-over): Gary Tuchman, CNN, Noonan, Georgia.
(END VIDEOTAPE)
NEWTON: Eye opening wasn't it? I want to really thank Gary for that report. Think about why Donald Trump then and all the speeches saying the
system is rigged. It's going to be quite a battle in the Republican nomination.
Meantime, Chinese investors had some serious beef with the Australian government last year over a giant cattle deal. Now, the deal has cleared
the fences. And it's as Donald Trump would say huge.
(COMMERCIAL BREAK)
NEWTON: Chinese investors have put in one of the biggest beef orders ever. A group called the Dakang Australia is buying a cattle ranch that is bigger
than Ireland. This isn't actually one giant ranch. We're talking about several across Australia that belong to the Kidman Beef Company. Together
they come up to more than 77,000 square kilometers. That's bigger than the entire land mass of Ireland. The Australian government actually blocked
the deal last year. It said one of the ranches was too close to a weapons testing site. So Dakang will have to settle for an Irish-size one instead.
And that's QUEST MEANS BUSINESS, I'm Paula Newton and I'll see you right back here again tomorrow.
END
