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Quest Means Business
Apple Taking on Uber's Rival in China; Brazil's New President; Trump: Amazon "Getting Away with Murder" on Taxes; Donald Trump Renews Feud with Jeff Bezos; Billionaire Sheldon Adelson Backs Trump; Adelson: Alternative to Trump is "Frightening"; Trump Denies Posing as a Publicist; CNN Money Investigation on Runway Injustice; "Aggressive Plan" for Airport Queues; Homeland Security Addresses Airport Wait Times; U.S. Government Allocates $34 million for New TSA Staff; Alaska, JetBlue Top Satisfaction Rankings; JetBlue: We have the Right Cost Structure; JetBlue: We're a Low Cost Carrier; JetBlue: Snacks are "Inexpensive"
Aired May 13, 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]
ZAIN ASHER, CNN HOST: Right. The Dow is deep in the red as trading comes to a close on Wall Street. It is Friday, May the 13th.
(BEGIN VIDEO CLIP)
ASHER: So glad to be with you. Apple takes a billion-dollar car rival with Uber's rival in China. And he's been in the office for just one day and
Brazil's new President is already attracting controversy.
Also ahead, as the debate rages over Britain's place in the E.U. there's an even more serious issue looming and that is Britain's place in the
Eurovision song contest.
(END VIDEO CLIP)
ASHER: Hello, everyone, I'm Zain Asher and this is "Quest Means Business." All right. Good evening, everyone. Apple is hopping on board car sharing in
China in a huge way. It is making a $1 billion investment in Didi Chuzing, Uber's rival and by far the industry leader in the country.
(BEGIN VIDEO CLIP)
ASHER: Apple joins Ten Cent and Alibaba in backing Didi. Uber is backed by some big names itself including Google and Baidu. Apple shares have had a
difficult time so far this year, concerns include slowing sales of the iPhone and weakness in China.
(END VIDEO CLIP)
ASHER: Joining me now to talk about this is Lance Ulanoff, the Chief Correspondent and Editor at Large at mashable. So Lance, thank you so much
for being with us. This is really Apple's largest investment, $1 billion and the ride sharing market is still maturing. Just explain to our audience
how exactly Apple hopes that this will pay off.
LANCE ULANOFF, CHIEF CORRESPONDENT, MASHABLE: Well yes, it is unusual for Apple to make this investment instead of buying a small company or buying
some technology as they usually do.
(BEGIN VIDEO CLIP)
ULANOFF: This kind of alliance with a bunch of Apple's interests. Obviously, the Chinese market, understanding it better, they had this drop-
off last quarter which they say was mostly in Hong Kong and they really want to attack that.
(END VIDEO CLIP)
ULANOFF: They're interested in services increasingly in services because that's an important part of their business. And, obviously, they're
interested in cars and there's big rumors about them potentially building a car. And if you're interested in the car space right now, for whatever
reason you're interested in car sharing technology because it kind of aligns with automation. For example, we know that General Motors made an
investment in Lift. So it's not surprising for Apple to enter this space.
ASHER: Right. But Apple's share price is down about 13% so far this year. Just explain to our audience what will this deal mean for investors
specifically.
(BEGIN VIDEO CLIP)
ULANOFF: Well, initially, nothing.
ASHER: Nothing. OK.
(END VIDEO CLIP)
ULANOFF: No. Because, you know, they make - it's unusual for Apple to announce so publicly that they're doing something like this. You know when
you listen to an earnings call of Apple you'll often hear or even at the end of the year that they've bought a bunch of companies. Like what
companies? You know it's like no one heard about them. So they're making a big splash. He's going to China. You know, he's trying to really engage
with that market because its struggle to continue to grow at the pace they need to grow to sort of back fill for a iPhone market that is generally
slowing down.
(BEGIN VIDEO CLIP)
ASHER: So does that mean that we could see Apple investing in more Chinese companies as they try to get in China's good graces?
(END VIDEO CLIP)
ULNAOFF: Well, I don't know they're doing it to get in good graces. Like I said, this is a strategic investment. But investing in other areas of
China to learn more about the markets there, to have a better understanding of how business works and how the consumers there consume different
services and products is obviously a good idea for Apple and I'm sure they'll look at doing more.
ASHER: What specifically can Apple learn about Chinese consumers and the market there?
ULANOFF: Well, OK, so let's give an example right now. 75% of the Chinese smartphone market is carrying around Android devices so they can --
ASHER: Right, OK.
ULANOFF: So they again -- most of the - so the people using - the people using this ride sharing service are probably doing it on an Android phone.
(BEGIN VIDEO CLIP)
ULANOFF: So to get inside with this company, they're going to learn just how people using it on any platform which will help them and their partners
better design products and services for this market.
ASHER: All right, Lance. We have to leave it there, thank you so much, appreciate it.
ULANOFF: It's a pleasure.
(END VIDEO CLIP)
ASHER: Investors had a generally positive reaction to the deal Apple stock closed up nearly 20 cents, the rest of the market, though, suffered a big
fall. The Dow Jones was down 185 points.
(BEGIN VIDEO CLIP)
ASHER: An Upbeat retail sales report could not calm concerns about possible downturn in the sector. Alan Valdez, Director of the Floor Trading for DME
Security joins us live now on the phone from the New York Stock Exchange.
So Alan what's interesting is that we've got good reading on consumer confidence, we've got a positive retail sales number. What happened here
today?
ALAN VALDEZ, DIRECTOR FLOOR TRADING DME SECURITY: You know, it was a topsy- turvy day all day long. You were up, you were down, we were down below 200. 50-day moving averages were breaking. But, you know, there was not one real
- you couldn't say one real item pushed the market down. It was really cross currents right across all the markets, all the indexes.
And I think we're going to see more of that as the summer goes on. You know, until we get a decision from the Fed. But basically it was just drag
down all across and traders are getting out. You know that old saying go away in May. Well I think a lot of them are going away and they were just
selling and no particular reason. There was no like you know like you just mentioned bad news on Apple or something like that. They were just saying,
you know what? I'm taking out, I just don't trust the market this summer, I think that's what we're seeing.
[16:05:18]
(END VIDEO CLIP)
ASHER: But what about the sort of weak earnings we've gotten from Macy's, Kohl's, Nordstorm, and J C. Penney's?
(BEGIN VIDEO CLIP)
VALDEZ: You know here's the - here's the weird point. Earnings have been horrible in the retail (inaudible) like you mentioned, J C. Penney's,
Walmart has been there, right across the board. But at the same time consumer spending was up. So they're spending but they're just not going to
those brick and mortars anymore. I guess they're doing a lot of amazon and online trading but they're not going to those stores. They're having a
tough run right now. That's for sure.
(END VIDEO CLIP)
ASHER: All right. Alan Valdez, thank you so much for breaking that down for us. Enjoy your weekend. Thank you so much.
That same retail sales report is being credited for a rise in European markets.
(BEGIN VIDEO CLIP)
ASHER: Pretty much the opposite story here. It was all green arrows in London, Germany, France, and Zurich. Overall European markets were up
nearly 1% for the week.
(END VIDEO CLIP)
ASHER: Pretty bad to very, very bad. That's the IMF chief's dire prediction for Britain after a brexit.
(BEGIN VIDEO CLIP)
ASHER: Christine Lagarde warning - her warning comes as an IMF report predicts an exit from the E.U. will heighten uncertainty, increase market
volatility and hit U.K. output as well.
Now Lagarde is quick to say that the IMF assessment is actually objective and its global concerns are real.
CHRISTINE LAGARDE, MANAGING DIRECTOR, IMF: We're not doing it out of politics. This is not the job of the IMF. We're doing it because it's a
significant downside risk, number one. And second, it's not just a domestic issue. I know it's a big domestic issue for many of you. But it's an
international issue. I don't think that in the last six months I have visited a country anywhere in the world where I have not been asked, what
will be the economic consequences of brexit?
(END VIDEO CLIP)
ASHER: Well, major organizations are stacking up in the remain camp with groups like the IMF, the Bank of England and the OECD all urging the U.K.
to stay in the E.U. But while many economists view an E.U. exit as damaging, there are actually eight prominent economists who are backing a
brexit.
(BEGIN VIDEO CLIP)
ASHER: and that includes former chief economist at Standard Chartered Bank, Dr. Gerard Lyons, and Roger Boutall who has consultancy firm, Capital
Economics.
So let's talk more about this, I want to bring in John Authers, he's a senior investment commentator for the Financial Times. John, thank you so
much for being with us.
(END VIDEO CLIP)
ASHER: We do hear a lot of doom and gloom about the results of the ramifications of a possible brexit. But just explain to us, what are the
actual legitimate economic reasons for leaving the E.U.?
JOHN AUTHERS, SENIOR INVESTMENT COMMENTATOR, FINANCIAL TIMES: What are the legitimate reasons for leaving the E.U.? Well, in my personal opinion I
would come down against leaving the E.U. to make that clear. I suppose the arguments would be the classic arguments that the U.K. contributes more
than it receives back in transfer payments because it's a relatively wealthy member of the E.U.
(BEGIN VIDEO CLIP)
AUTHERS: So that's what's going to happen. I think the stronger argument in favor of leaving for those who believe in it is to do with culture and to
do with sovereignty.
ASHER: Right.
AUTHERS: Economically, in my opinion and that of the FT, as well, we have this wonderful deal where we still get to secure our borders.
(END VIDEO CLIP)
AUTHERS: We don't have to go along with a single currency but we do have access to the single market which means we can sell things wherever we want
in the E.U. without any tariffs at all and we're free to work anywhere we like in the E.U. while we can get cheap labor from elsewhere in the E.U. to
come and to help out in London. So my personal opinion is that the economic case for it is reasonably good. There are plenty of other reasons other
than economics why people might vote against it.
ASHER: Well, Christine Lagarde certainly agrees with you. You just heard her there saying that the ramifications could be very, very bad. But the
thing is the IMF have gotten forecasts wrong in the past. So just explain why British voters should believe them this time.
AUTHERS: Well, the IMF like every other economist you could mention has been wrong from time to time. I think if you take a look at the specifics
of what she was arguing about, she's talking about the short term.
(BEGIN VIDEO CLIP)
AUTHERS: And there I think there is very clear support for what she's saying. In the short term this is creating very high uncertainty. And that
has led to pressure on sterling already. It's even led to uncertainty and to volatility here in the U.S. stock market. I've been reading reports
where it becomes clear that people are already hedging very much against the risk of heightened volatility if the brexit vote comes out in favor of
leaving.
[16:10:00]
AUTHERS: The situation therefore is that there plainly is a lot of uncertainty generated by this. That is for the time being causing people
very sensibly to defer business decisions. It doesn't necessarily mean that they're going to defer them forever but sensible businesses will defer
their decisions while they're uncertain.
If we leave -- if we the British leave the European Union then that uncertainty is going to be ratcheted up for a while. There is no precedent
for doing this. We don't know exactly how it's going to work. The uncertainty will intensify after a vote to brexit. That presumably will
mean that many more economic investment decisions being deferred. And so I do agree with the notion that it probably would mean a technical recession,
at least two quarters in which - in which output declines.
You could certainly argue that that's in some ways is a snake oil piece of selling in that you could still argue that once we have got through that
uncertainty the long term benefits would unfold. But in the short term, yes, this is creating a severe uncertainty at a point when markets are in a
quareless state. It's even apparently likely to rule out any chance of a rate rise in this country, in U.S. in June at a point when many people
think that would otherwise makes sense.
Plainly, in terms of what she is talking about which is the short-term, yes, it's creating a lot of difficulties. It's creating extra risks.
ASHER: Well, that vote is happening June 23rd about a month from now so we shall see what happens.
John Authers live for us there. Thank you so much, appreciate that.
AUTHERS: Thank you.
ASHER: Well, while the IMF gives brexit (inaudible) -- we say bienvenue to another European debate in a place where politics actually meets pop. We're
talking about the Eurovision song contest of course and whether the U.K. wants out.
(BEGIN VIDEO CLIP)
ASHER: In the words of British Eurovision success, Buck Fizz, Brits are making their minds up. Clare Sebastian charts the U.K. success rate in the
contents, its relationship with the E.U. and finds the two actually just might be linked.
CLARE SEBASTIAN, CNN CORRESPONDENT: In this underground bar in Central London, you'd never know Britain's place in Europe was even in question.
This is a glimpse into the life of Britain's die hard Eurovision fans. They actually holding events like this once every month throughout the year such
is their level of dedication.
Alasdair Rendall is President of the U.K. Eurovision Fan Club which claims to be the biggest in the world. There's very little he doesn't know about
the contest. Who was the host country in 1975?
ALASDAIR RENDALL, PRESIDENT U.K. EUROVISION FAN CLUB: In 1975, it was Sweden. It was hosted in Stockholm because that was the year after ABBA had
won.
SEBASTIAN: Despite the hard core fans, a recent poll shows 60% of Brits would actually vote for a brexit from the song contest, the highest
proportion in Europe.
RENDALL: If you look at the U.K.'s attitudes towards to the then EEC in the '60s and the '70s, we were really keen to join in the 60s, we finally
joined in the '70s and they were also years when we were doing well at Eurovision.
SEBASTIAN: In the 1960s and '70s, the U.K. had three wins and ten top three placings.
Fast forward to the late 90s and it was no to the Euro, and no more wins at Eurovision. This 2003 bid from singing duo Gemini, the first of three
recent entries to come last.
RENDALL: I think perhaps over the last 15 years or so we felt politically removed from the European continent, politically removed from the European
Union and I think that does have some crossover to our attitudes towards Eurovision.
SEBASTIAN: Perhaps appropriate this year the theme of the contest is come together. The British entry is called "You're not alone."
RENDALL: Could it bit a reference to the U.K's position in Europe? Who knows? Maybe we should ask that question again on the 23rd of June after
the referendum.
SEBASTIAN: Clare Sebastian, CNN Money, London.
(END VIDEO CLIP)
ASHER: The malware used in 2014's Sony Hack may now be targeting global banks. That's the warning from a top British defense contractor.
(BEGIN VIDEO CLIP)
ASHER: We have the story coming up next.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
[16:16:30]
ASHER: A South African court given the go-ahead of the biggest class action lawsuit in the country's history.
(BEGIN VIDEO CLIP)
ASHER: Thousands of miners are suing gold mining firms over exposure to the incurable lung condition Silicosis. A high court judge says the scope and
magnitude of this case is unprecedented. Here's our David Mackenzie with more.
DAVID MACKENZIE, CNN CORRESPONDENT: Once a gold miner in South Africa, (Joseph Matta Beri) thrived on physical labor, had big dreams for his
future.
But for Joseph, the simplest tasks is now a struggle. Decades under grounds is slowly killing him, he says. A victim of terminal Silicosis.
Many miners when they retire or get sick can only afford to live in shacks like these. The wealth of South Africa was built on the backs of these men.
Now thousands of miners are suing gold companies as part of a historic class action. During apartheid for more than two decades since they allege
companies have been negligent and could have stopped the harm to their workers. They want a massive payout. (Dr. Retkhan) has been treating
Silicosis affected miners for decades. It's his life's work.
Miners develop the incurable disease by inhaling silica dust in gold mines.
(DR. RETKHAN): These multiple little white dots is the dust.
MACKENZIE: Over the years, the fine dust is lodged in the lungs. It can cause reduced function, weight loss and severe weakness.
(DR. RETKHAN): This degree of dust will affect his life expectancy.
MACKENZIE: This could kill someone?
(DR. RETKHAN): This can kill somebody.
MACKENZIE: The scale of the problem is staggering. Scientific studies estimate at least 200,000 miners could be suffering from the disease here.
Researchers call it a pandemic.
Is it still as bad as it was?
(DR. RETKHAN): It's as bad as it was under apartheid. The silica dust disease problem has not got better.
MACKENZIE: The Chamber of Mines admits that Silicosis is a significant legacy issue. But they say companies have been working to eliminate the
risks and are offering to set up a medical fund. Money won't bring Joseph's health back. But he says someone has to pay.
David Mackenzie, CNN, South Africa.
(END VIDEO CLIP)
ASHER: Global banks are on high alert for a wide and highly adaptive hacking campaign. Defense contractor BAE says a bank in Vietnam was
targeted today bearing the hallmarks of the Bangladesh Central Bank hack earlier this year.
(BEGIN VIDEO CLIP)
ASHER: The attackers first use malware to circumvent a bank's local security systems. They then obtain credentials allowing them to access a
key messaging network. Fraudulent messages are sent over the network initiating transfers of cash. The attackers then try to hide the evidence
by removing the messages.
[16:20:02]
ASHER: CNN Money's cyber security reporter, Jose Pagliery joins us live now from here in New York. So, Jose, just walk us through how exactly
investigators know that this is the same group of hackers that targeted Sony and the Bangladesh Central Bank.
JOSE PAGLIERY, CNN MONEY CYBER SECURITY REPORTER: Well there are clues. Let's not say that they know because actually we don't know that they know.
The thing about the cyber world, when we deal with hackers is that it always leaves you with more questions than answers. What they see is that
hackers use the same tool. Now just like a physical crime investigators go to the crime scene and they see if they finger prints and the gun that was
used to shoot someone. In this case, investigators are seeing that the hacking tool is eerily familiar to what was used previously in Sony's case.
Now, that just means that it might be the same hackers. It could be different hackers that got ahold of the same tool.
ASHER: Right, so it could be the same hackers. Just explain to us then what sort of protective methods banks use to protect themselves from these sorts
of hacks.
PAGLIERY: Now banks typically protect their computer systems by keeping whatever malware might be entering the system at bay, they keep it away
from the system. They also make sure that employees can't click on bad links when they open up spam e-mails, they can't click on links that
download an infectious file into the computer that then infects the rest of the network.
But this is a losing game. It's inevitable. Any computer expert will tell you that every bank, every company in the world is trying to protect
themselves but it's only a matter of time before somebody gets in.
Now, what's difficult to tell though is how long hackers are in a system and what damage they have done.
In this case, it's not that the hackers broke into the Federal Reserve here in New York or even the Swiss system. It's that they broke into the weakest
link in the chain which in this case was a bank in Bangladesh and possibly in Vietnam which is what BAE are saying. So the hacker is breaking into the
bank and they get access to the swift system by posing as a bank. And it's worth noting here that this is how hackers commit their crimes.
(BEGIN VIDEO CLIP)
PAGLIERY: They break into a computer and they seem as if they are the user and so it always seems like an inside job.
ASHER: And I have this awful feeling Jose that we can expect a lot more of these going forward.
(END VIDEO CLIP)
PAGLIERY: Sure. Absolutely. I mean what hackers have done is shown a pretty intelligent way to crack into the international banking system. We'll see a
lot more of this.
ASHER: All right, Jose Pagliery, thank you so much. Appreciate that.
PAGLIERY: Absolutely.
ASHER: In Brazil suspended leader Dilma Rousseff is out and Vice President, Michel Temer is in.
(BEGIN VIDEO CLIP)
ASHER: His presidency is already sparking controversy by forming the first all-male, all-white cabinet since 1979. His top priority in Brazil is the
struggling economy.
CNN's Shasta Darlington has more from Brasilia.
SHASTA DARLINGTON, CNN CORRESPONDENT: Well, Zain, Brazilians woke up to a new President on Friday at least on an interim basis and a new cabinet. He
held the first cabinet meeting already coming under flack because although he has tried to rein in spending by really reducing the number of
ministries, it's also the first time since 1979 that there isn't a single woman on the cabinet. They're all men and they're all white.
So what we did hear from afterwards was the finance minister, his new pick, a former Central Banker Henrique Meirelles. He talked about the biggest
challenge facing the Brazilian economy.
(BEGIN VIDEO CLIP)
HENRIQUE MEIRELLES, BRAZILIAN FINANCE MINISTER: (As translated) The most important thing in my opinion is confidence in relation to the future
sustainability of the public debt. That is the ability of Brazil to continue financing itself in the future.
DARLINGTON: Now, he didn't give any specifics about what reforms he'll be taking to try to remedy that. He said he'll announce his full economic team
on Monday. They need to really study the details of the finance, public finances before they come up with reforms he said. But that he is confident
that the -- they have the backing and congress and even among the public to try to get those reforms through. He also encountered accusations by
suspended President Dilma Rousseff and many of her supporters that under Temer the very popular social programs that lifted millions out of extreme
poverty over the last 13 years would be suspended or even canceled.
MEIRELLES: (As translated) The social programs will be maintained. There's no doubt about that. Also, because if you take a look at the big picture of
public spending, the social programs are a small part.
DARLINGTON: That doesn't mean Temer and his team don't have their work cut out for them. As you know, there have been already two years of recession
here in Brazil. The corruption probe that's engulfed dozens of politicians continues and we've got the impeachment trial that will likely play out
over the next six months while Brazil tries to get Brazilians and the international community excited about Olympic games in August, Zain.
(END VIDEO CLIP)
ASHER: All right. U.S. Presidential candidate Donald Trump takes throwback Thursday to a whole new level.
(BEGIN VIDEO CLIP)
ASHER: Bringing a feud with Amazon's CEO back to life. Trump turned on his latest target. That's coming up next.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
[16:27:20]
ASHER: Hello, everyone, I'm Zain Asher. Coming up in the next half hour of "Quest Means Business," Donald Trump as a bone to pick with his fellow
billionaire Jeff Bezos. And passengers say queues at U.S. airports are becoming "insane."
Today Homeland security tries to do something about it. Before that, these are the top news headlines we're following for you at this hour.
(BEGIN VIDEO CLIP)
ASHER: U.S. Military officials say ISIS may be planning a state of emergency in its so-called capital of Raqqa in Syria. ISIS personnel are
reportedly preparing for a wave of air strikes and ground attacks. A spokesman for the anti-ISIS coalition says that the terror group is feeling
under threat.
COL. STEVE WARREN, SPOKESMAN ANTI-ISIS COALITION IN IRAQ: We have seen this declaration of emergency in Raqqa. Whatever that means. We know this enemy
feels threatened. As they should. We have had reports of ISIL repositioning both there combat capabilities. I guess what they think may be coming
next. And we've seen reports of them repositioning personnel to various -- either within the city or even out of the city.
ASHER: Hezbollah says a high ranking commander has been killed in an explosion in Damascus. It's a setback for the Lebanese militant group whose
fighters are backing the regime of Syrian President, Bashar al Assad. The U.S. government believes the commander was in charge of Hezbollah's
military operations inside Syria.
Donald Trump is denying a report in "The Washington Post" which claims he pretended to be his own publicist in phone calls with reporters dating back
to the 1970s. The post says the likely Republican nominee used the names John Miller or John Baron in calls to promote himself. It obtained an audio
recording of one call talking about the end of Trump's first marriage.
The Kremlin is denying claims that Russian athletes were doping during the Sochi winter Olympics in 2014. The former head of Russia's anti-doping lab
told "The New York Times" that at least 15 medalists in Sochi were part of a state-sponsored doping program. One Russian skier accused of cheating
says the claims may be politically motivated.
ALEXANDER LEGKOV, 2014 MEN's CROSS COUNTRY OLYMPIC CHAMPION: (As translated) I think this is some political game. People are very strongly
positioned against our country. Because right now it is one of the strongest countries in the world. And I believe you would absolutely agree
with me.
(END VIDEO CLIP0
[16:30:00] ASHER: For the first time ever FIFA has named a woman as its new secretary-general, Fatma Samoura, from Senegal, will become second in
command at footballs world governing body, Samoura been with the United Nations for the past 21 years working on humanitarian programs in Africa.
Donald Trump is renewing a bitter feud with Amazon CEO and "The Washington Post" owner Jeff Bezos. In a Fox News interview on Thursday, Trump accused
Bezos of using his newspaper for political influence and raised questions about Amazon's tax situation. I want bring in our Samuel Burke, he's live
for us here in New York for more on this. Basically Trump is accusing Bezos as well of trying to skirt anti-trust laws and basically dodging
taxes. Just explain what is fueling this renewed venom towards Jeff Bezos.
SAMUEL BURKE, CNN MONEY AND BUSINESS CORRESPONDENT: It's a billionaire battle brewing, Zain. Last night Donald Trump was on Sean Hannity's show
on Fox News and Sean Hannity said to him, what do you make of the reports that 20 journalists have been assembled at "The Washington Post" newspaper
to investigate you and your real estate deals? Watch what Trump had to say in reply.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: This is owned as a toy by Jeff Bezos who controls Amazon. Amazon is getting away with murder
tax-wise. He's using the "Washington Post" for power so that he politicians in Washington don't tax Amazon like they should be taxed. He
is getting absolutely away. He's worried about me and I think he said that to somebody. In some article, where he thinks I would go after him for
anti-trust because he's got a huge anti-trust problem, because he's controlling so much. Amazon is controlling so much of what they're doing.
(END VIDEO CLIP)
BURKE: Controlling so much and getting away with murder on their taxes. That's what Donald Trump says. It is important to note that the European
Commission is, indeed, investigating Amazon still for their tax deals with Luxembourg, which they walked away from in large part they say. And also
interesting to note that a lot of people are highlighting the fact that here's Donald Trump saying that Amazon gets away with murder, but at the
same time Trump is still facing so much pressure, especially from Hillary Clinton, to reveal his own tax returns. Something that he has still not
done.
ASHER: Yes, it's incredibly ironic when you think about it. But just talking about Trump's attitude, because he is very unpredictable when it
comes to businesses and whole host of other things. You know, he's a businessman himself, but at the same time he's not afraid to target
companies. This is not the first time that he's targeted Amazon. Why?
BURKE: So, yes. It's so fascinating because when he announced his candidacy so many people thought this would be a candidate that Wall Street
would love that big business would love. Because he's, of course, at the helm of a very big business. But it's so hard to put him in a category. I
was just making a list, if you look on the one hand, he's for big tax cuts and easing regulation. On the other hand, he has sales trade deals and
trade partners, very important to big business and he is assailing one of the biggest tech companies in the United States, Zain.
And this is an ongoing feud. I want to just show you some tweets that Donald Trump sent out along the similar lines back in December of last
year. Criticizing Jeff Bezos, Amazon, "Washington Post," tax and anti- trust. But look at the response that Jeff Bezos had to Donald Trump over Twitter. Finally trashed by@realDonaldTrump. Will still reserve him a
seat on the blue origin rocket, the rocket that Jeff Bezos owned. #sendDonaldtospace. He hasn't tweeted again today, Jeff Bezos. But we'll
see if he has more amusing hash tags after this.
ASHER: Being trashed by Donald Trump is a badge of honor these days.
BURKE: Especially for these guys.
ASHER: you mention this, you touched on this earlier, but Amazon is of course under investigation for anti-trust law violation, what Trump was
talking about. Just explain to us what is the latest on that.
BURKE: This is an ongoing investigation by the European Commission into the way that Amazon has structured tax deals, specifically in Luxembourg, a
lot of companies have used these tax deals and they've also been investigated. A lot of big American tech companies. So this is something
that's ongoing, but it's not unique to Amazon. So we'll be keeping our eyes on it and seeing how it goes and I'm sure that Mr. Trump keeping his
eyes on our reports, as well, about Amazon.
ASHER: And our eyes on Donald Trump as usual. All right. Samuel Burke live for us, thank you so much, appreciate that.
Donald Trump may have enjoyed today's "Washington Post" it included an endorsement from casino magnet, Sheldon Adelson. He called on Republicans
to back the presumptive nominee and defeat Hillary Clinton. Trump is turning to businessmen for support and cash, which of course he will need
for the general election. This includes people who supported his primary opponents, as well.
(BEGIN VIDEO CLIP)
[16:35:15] T. BOONE PICKENS, HEDGE FUND MAGNATE: He was glad I'd come on board and all. He said, thanks for coming on board. But he said you were
supporting Jeb Bush. So he got a good memory. And he'll let you know if he doesn't like it. And do I find that unappealing? No. I'll get along
fine with Trump. If he wants me, I'll be glad to help. If he doesn't want me, I have plenty to do.
(END VIDEO CLIP)
ASHER: "If he wants me, I'll be glad to help." Let's talk more about those words. CNN's senior political analyst, Ron Brownstein joins me live
from London. So Ron, thank you so much for being with us. Trump has really prided himself on pain his own way, saying, you know what, I don't
need anyone's money. But now you've got these millionaires, not just Sheldon Adelson, but also T. Boone Pickens as well. And that will
certainly be a boost to Trump's super PACs.
RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Yes, absolutely. You know, we normally this would be, you know, we call in the U.S. a dog bites man
story, not a big deal. You would expect Republican leaning billionaires and political fund-raisers to support the Republican presidential nominee.
But it seems striking this year simply because there's so much discord and dissension in the Republican Party. I think the key to it is what you just
heard from Samuel in the last block. The issues that many of these big Republican givers care most about are taxes and regulations.
And those are not the issues on which Donald Trump would most wrenchingly change Republican doctrine. He is pretty much in line with traditional
Republican thinking on the issues. It's on other areas like foreign policy and trade and building a wall and banning Muslim immigration where he would
take the party into unchartered waters. So I think it may be easier for the big donors to line up behind him than would be for some of the elected
officials.
ASHER: So when it comes to issues, like you just mentioned, trade, foreign policy, entitlements, now that he really needs the RNC, are we going to see
a reversal on some of those issues?
BROWNSTEIN: Well no. I don't think you'll see him significantly reverse on those issues. If Donald Trump is repositioning for the general
election, it will be more by addition than subtraction and by that I mean, it's as though he's going to move away or subtract some of the more
controversial positions he took during the primary. I think what you might see him do in the general is try to add or dilute them within some new
ideas that may have broader appeal then he emerged from the primaries with. For example, you can easily imagine stressing a public works program. Who
better than Donald Trump to rebuild America as a way of trying to regain some of the ground he has lost with minority voters, Hispanics and African-
Americans? The problem is that the issues he used to win the nomination, while popular with the portion of the Republican base, face enormous
resistance across the broader electorate, particularly in the groups that are at the core of the modern Democratic coalition. And it's not clear any
new repositioning can undo the damage that was caused by some of those views.
ASHER: I want to play our audience something that dominated the news cycle today, and that is a sound bite of Donald Trump pretending to be a PR
person back in the '70s and '80s to promote himself. Let's listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: What is your position?
TRUMP: Well, I'm sort of handling PR because he gets so much of it.
UNIDENTIFIED FEMALE: Where did you come from?
TRUMP: And frankly, I mean, I could tell you off the record but until I get to know you --
UNIDENTIFIED FEMALE: Yeah.
Trump: -- if get to know you and talk to you off the record, he didn't care if he was bad PR until the divorce was finished. So when he got the
bad financial stuff he liked it because, you know, it was good, because he could get a divorce and then once it's finished, notice he's doing well
financially and every other way.
(END VIDEO CLIP)
ASHER: That was apparently Donald Trump talking to "The Washington Post" and I should point out he was allegedly pretending or posing as a PR person
and Donald Trump denies that. Just explain to us, is this at all relevant to voters? Should voters care at all?
BROWNSTEIN: I think it is relevant only in this sense. It is relevant in the sense that it goes back to the point before about why so many elected
officials are hesitant to align unreservedly with Donald Trump. You have no idea what's coming next. You have no idea what is in his past that may
come out, and even more you have no idea what he may say next at any given moment. He is simply such a wild card. You know, you talk about the feud
with Jeff Bezos, the owner of "The Washington Post" and Amazon. It's a sign that in many ways wants to continue the general election along the
lines that he fought out the primary. Which is picking a series of fights with all sorts of enemies both in the political sphere and outside of the
political sphere as an alternative really too much of an issue debate, and this kind of serial personal attack and personal invective and personal
conflict. I think part of the reasons so many Republicans have been so hesitant to put all of their chips down on Donald Trump even as he's become
the inevitable nominee is they simply do not know what he is going do next and that makes political officials nervous, because they do not want to be
in a position of having to answer for him, particularly those in the more contested swing states in the United States.
[16:40:00] ASHER: Yes. They don't know what he'll do next and hard to look away. Ron Brownstein, I have to leave it there, thank you so much.
Appreciate that.
BROWNSTEIN: Thank you.
ASHER: Still to come are glamorous. Their lives though are anything but. A CNN Money investigation exposes the dark side of the modeling industry
through the eyes of the models themselves. That's next.
(COMMERCIAL BREAK)
ASHER: Models usually in front of the camera and in the spotlight but rarely heard. CNN money goes behind the camera to get their story,
allegations of exorbitant fees, sky high commissions and virtually no labor protections. The agencies say investing in fresh faces is risky and they
are hired by the models, not the other way around.
(BEGIN VIDEOTAPE)
SARA ZIFF, EXECUTIVE DIRECTOR, THE MODEL ALLIANCE: It's like this assembly line of young, skinny, white mostly blond girls. Younger versions of me.
And they use them up and spit them out.
CAROLYN KRAMER, FORMER MODEL AGENCY DIRECTOR: There's so many cases of labor abuse that's going to take a civil rights movement.
ROBERT HANTMAN, ATTORNEY: These are businesses. They're not set up for the purpose of trying to lure attractive men or women for some type of
ulterior motive.
UNIDENTIFIED FEMALE: It's a hidden part of the industry. You're so in the camera but at the same time the reality of what's behind the camera is not
known.
KRAMER: We were their friends. We were their protectors. And many of the modeling agents would let them down.
ZIFF: I was attracted to the industry at first because I saw it as a place where there was a lot of creative, talented, smart women. And it's I think
a business that should empower women, not exploit them.
HANTMAN: I don't think they're being exploited. I think they're coming to New York to enhance their careers.
KRAMER: The business model of a modeling agency is to take the risk on these young models. You invest in them. And if those girls start to work,
they start to make money. Let's just say it's $5,000 for an 8-hour day. Off the top of that $5,000 the model pays the agency 20%. So that's
$1,000.
ZIFF: Often models will be charged a lot of fees in addition to the commission. So that might be for the model apartment, comp cards, for
messenger services.
UNIDENTIFIED FEMALE: It might seem like, oh, a dollar here and there but when you add it up, it's thousands of dollars. These are a lot of the
different financial statements. I can't understand what more than half of these items are.
Looks like I got my hair done for $75. I don't know what 68 degrees was. Of course they take their commission. There's years where you can make
$5,000 and then other years you make $200,000.
[16:45:04] HANTMAN: These are all incidentals. If you add these costs up, they're minuscule. Why would any agency spend money trying to cultivate
somebody's career and then same time try to exploit them and make money off of extravagant expenses?
ZIFF: I don't think that it would be the end of the business to expect agencies to be financially transparent. We're not asking for very much.
KRAMER: I would never let my son or daughter become a model.
HANTMAN: It's a business which is self-regulated but for the most part is very clean.
ZIFF: If you're constantly finding a new, like, 22-year-old who just sees, like, bright lights and isn't going to ask questions, it's very easy to
perpetuate this and then they go away to Oklahoma and they ship the next girl in.
(END VIDEOTAPE)
ASHER: And you can find out more about CNN money's investigation into what's being called a toxic power dynamic in the modeling industry. Go to
CNNmoney.com for more on that.
It's the news that airport travelers across America have been waiting for. Authorities say something will be done to address the chronic wait times.
That's next.
(COMMERCIAL BREAK)
ASHER: It goes on and on and on. Take a look right here. This is actually one of the many massive security lines at U.S. airports. Now
passengers are venting their frustration online. Waiting times are being severely scrutinized. Senators have weighed in. Now the Department of
Homeland Security is promising action.
(BEGIN VIDEO CLIP)
JEH JOHNSON, SECRETARY, HOMELAND SECURITY: I would not characterize it as a national crisis. I did characterize our current situation as an aviation
security imperative. Our job is to keep the American public safe. We're dealing this spring and summer with increased travel volume, which
obviously puts an added burden on our TSOs and increased demand on the system.
(END VIDEO CLIP)
ASHER: Tom Foreman is at Reagan National Airport near Washington, D.C. So, Tom, we have all been through the long lines at airports, especially
those of us living in the United States. Explain who exactly is to blame for this and what's being done?
TOM FOREMAN, CNN CORRESPONDENT: well, at any given moment anybody who might be to blame, will say everybody else is to blame. They'll say it's
because there's an increase in traffic. That there's more screening of bags. There might be a technical breakdown, there could be a lot of
different reasons. The bottom line is, though, even the officials who are in charge today, as I spoke, were saying, they've heard about it for
months. They knew it was coming and now they are trying to scramble and recover from it. So they laid out a ten-point plan to deal with it.
It includes more transportation security officers, the TSOs, you heard mention a moment ago, more bomb-sniffing dogs. More use of technology to
figure out where people are going. More things that would be restrictions on, for example, the number and size of carry-on bags. That's actually
going to be a huge thing for passengers here, because many already feel like they're being stung by bag fees.
[16:50:00] That almost certainly will mean more checking of bags, which means more checking of those bags. And more fees connected to it. So a
lot of things being thrown at this, but I'll say, Zain, nothing that really hasn't been tried before. Just a lot of it all at once. And they think
that somehow that can help alleviate the lines, Zain.
ASHER: And do you think that passengers themselves need to be better prepared when it comes to the long lines and what time to arrive at the
airport, that kind of thing?
FOREMAN: Well, you know, the funny part about that is, yes, hearing for years to show up early enough. But today, when specifically asked about
that, the TSA head and the head of Homeland Security was asked about, well, what should passengers do? And should they expect three-hour waits this
summer or two-hour waits and will they miss their flights? Their only answer was, well that changes based on the time of day and the airport and
where you're going.
So that doesn't help passengers at all. The problem right now I think for many passengers is many times they show up and they breeze through security
and they're at their gate in 20 minutes and saying when's the big fuss? But when that doesn't happen, and you show up two hours ahead of time for a
flight and three hours later you're still standing in line, that's when people go crazy. So, the real issue here is trying the find some kind of
continuity so those bottlenecks don't occur and people can at least reliably say, if I show up an hour and a half or two hours ahead of time I
will be on the plane.
ASHER: Well, I have certainly missed my flight before because of those long lines. But just explain to us, how short on funding is the TSA? Is
this really about lack of resources?
FOREMAN: Well, if you listen to members of congress, they'll say, no, it is not. They'll say we have been meeting some of the funding demands like
everybody else in Washington, there's only so much money to go around. You need to make better use of the money you have. If you listen to the TSA
they will say, look, we're trying to shift funds, but when you have limited funds in Washington and air traffic is growing, we need more funds. So to
say how short are they? That's probably the biggest question for any agency in Washington. Because they'll all say the answer is they're too,
too short and they need more. But there's also a fair amount of evidence that not many if any of them are going to get it, at least not with
Washington functioning the way it is these days. So with what they have, they have to find a way to make it work and they think maybe this summer
fingers crossed they will.
ASHER: Tom Foreman, thank you so much, appreciate you breaking that down for us. Thank you.
Alaska airlines ranks the highest for satisfaction in the skies. This according to a marketing firm J.D. Power It comes as overall satisfaction
with the U.S. aviation reaches a ten-year high. The top ranked low-coast carrier is JetBlue. And Richard Quest recently flew JetBlue from Los
Angeles all the way to the New York as part of his trip around the world on low-coast carriers. He sat down with the company's executive vice
president for planning and commercial and asked him how its business modeling is changing.
(COMMERCIAL BREAK)
MARTY ST. GEORGE, EVP, COMMERCIAL & PLANNING, JETBLUE: I think if you look at what JetBlue looked like if 2000, it's very different than what
JetBlue looks like now, but at the core we want a lower cost structure than legacy competitors. We don't have the global hubs. We don't have the
premium first business and service class, transoceanic. We don't have a power alliance programs and things we don't do. But that's part of the
ways we keep our costs down. Our view of it is -- and I hate to sound cliche -- but we have the right cost structure for the customer base. You
know, there are pieces of the JetBlue product that actually cost money. They cost more money than the product is offered on a carrier like Orion
Air, who I've flown and I admire greatly. But it's just a different business model. It costs money for you to have TV at every seat. It cost
money to have the most legroom of any airline. You know, we go for the calculation to make sure that when we invest that in a product that we
actually get paid back for that in customers.
QUEST: When I said I was -- I tweeted that I'm flying JetBlue, and I'm not sure whether you take this as a bouquet or a brick bat but people tweeted
back they're not a low-cost carrier. So I guess whether you're talking to the CFO or, you know, or sky tracks, the -- CAPPA defines you as a low-cost
carrier.
ST. GEORGE: As do we. And I think our fare structure shows that. We don't have those really high gauging fares a lot of legacy competitors
have. Our fare structure is closer to the fair structure you see on Orion Air or and EasyJet. Yes, there are times when JetBlue is $59. There are
times on peak days JetBlue may be $499. You see the aim thing on Orion. If you want to fly the British school holidays there actually somewhat
expensive. But day in and day out what I think we do share is that our goal is to have the price set at a level to fill the airplane. We are not
in the job of trying to have half the seats full and everyone paying $1,000. That's not our business model. We like low fares, because we
think it gets more customers on the airplane.
[16:55:00] QUEST: The free snacks? It's a nice idea.
ST. GEORGE: Yes, love it.
QUEST: It's another no-no. I mean, you're selling sandwiches.
ST. GEORGE: We are.
QUEST: You should be selling snacks.
ST. GEORGE: You know, it is funny, Richard. I -- before I came to JetBlue I was at Legacy Airlines. And I was there for sort of a dark days
of taking things away from customers left, right and center. Snacks are actually very inexpensive. Giving someone an entire can of soda instead of
half a can is actually very inexpensive. But we've seen our legacy competitors continue to ratchet the offering down. In fact, now I think
you see some of our competitors are bringing it back. You know, United just recently announced bringing back the -- I can't remember the name of
it but the wafer cookies on the airplanes. I think they've realized that it's been a bit of a guide rail to guide rail experience. We have always
been there. We've always said we want a good experience. For a snack that costs me 10, 12 cents, best 10, 12 cents I ever get. Because that's a
customer that's coming back and saying, oh my God, you're not to believe this. I get in the airplane and I get two bags of whatever. Twenty-five
cents, you know what, the best 25 cents I spent. Because you know what, you and I are talking about it.
(END VIDEOTAPE)
ASHER: And you can see Richard Quest Take Flight on the second part of his round the world trip, BUSINESS TRAVELER is this Saturday at 4:00 in the
afternoon London time.
It's been a rocky week for U.S. markets and today's session was certainly no exception. We'll show you the damage done this week in just a moment.
(COMMERCIAL BREAK)
ASHER: Wall Street finished the week with a tumble. The Dow is up about 185 points. With another down week this is actually the longest losing
week since January. Investors are pulling out of equities and stashing their money in safe haven such as bonds and precious metals. A report from
Bank of America Merrill Lynch says $44 billion flowed out of equities in the past five years. That's the most in a five-week period since august
2011. That's QUEST MEANS BUSINESS. I'm Zain Asher in for Richard Quest.
END
