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Quest Means Business
Obama Defends Trans-Pacific Trade Deal; Obama: Trump is "Unfit" For Presidency; Billionaires Back Clinton, Bash Trump; Stocks Fall for Seventh Day on Wall Street; Growing Concerns About Rio Water Pollution; Cheap Oil Creates Crisis for Workers in Saudi Arabia; IMAX, Dalian Wanda Strike China Cinema Deal; Tesla Battles Through Controversies; Apple Replaces Pistol Emoji with Water Gun. Aired 4-5p ET
Aired August 02, 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 ANCHOR: All right, with that round of applause, yet another end for the day on Wall Street. Stocks where really sort of in
a foul mode today. Part of the problem is lower oil prices plus concerns about global growth. As you can see there, the Dow is off by nearly triple
digits. It's Tuesday, August 2nd.
Tonight, President Obama is still down with the TPP.
(BEGIN VIDEO CLIP)
BARACK OBAMA, U.S. PRESIDENT: Well, right now I'm President, and I'm for it.
(END VIDEO CLIP)
ASHER: The president said he'll continue to fight for free trade deals.
Also, no job, little food. Thousands of Indian workers are stuck in Saudi Arabia.
And pistols at dawn. Apple changes weapons in the emoji arms race. I'm Zain Asher and this is QUEST MEANS BUSINESS.
Tonight, the U.S. President Barack Obama makes a full-throated defense of the Trans-Pacific trade deal. It's a rebuke to Donald Trump and Hillary
Clinton, who have both come out, actually, against the deal, speaking alongside the prime minister of Singapore, Mr. Obama says he hopes Congress
will look at the facts of the deal rather than the politics.
(BEGIN VIDEO CLIP)
OBAMA: Well, right now I'm president. And I'm for it. And I think I've got the better argument. And I've made this argument before. I'll make it
again. I have not yet heard anybody make an argument that the existing trading rules are better for issues like labor rights and environmental
rights than they would be if we got TPP passed. And so I'm going to continue to make this case.
(END VIDEO CLIP)
ASHER: We'll talk about that with Chris Moody, is CNN's senior digital correspondent. He joins us live from Washington. So Chris, you saw Obama
there. He's really sticking to his guns on this. What are the chances of any sort of congressional approval for the TPP, do you think?
CHRIS MOODY, CNN POLITICS SENIOR DIGITAL CORRESPONDENT: Well, given the political climate right now, it's looking harder and harder. But this
thing is not going to go down without a fight, and you better believe that. Barack Obama's administration has been working on this for both terms,
several years of work has gone into this. About a dozen nations are a part of it. And he's not just going to throw up his hands and give up before he
leaves office.
What we have ahead is what's called the lame duck session where we'll select a new president. Oftentimes this is when the current president will
put in things at the very last minute that might be a little controversial. So if he's going to do it, it's probably going to happen in that lame duck
period. What's very interesting about this is even though Republicans have been kind of voicing opposition to this here and there in Congress, this
really is a wish list of items about trade that they really would like to see.
So I think you could see some kind of union between president Obama and House Speaker Paul Ryan and also in the Senate to try to push this through.
But the political climate is certainly screaming and yelling against it. What Barack Obama was trying to say today was, even though that's
happening, that's a lot of noise, we're still here and still in business so we'll keep working toward that goal.
ASHER: Chris, here's the thing. At the Democratic national convention last week, there was so much -- even when you listened to President Obama
speaking -- there was so much anti-TPP boos, et cetera, people really against it. If president Obama continues to voice his support for this,
won't it hurt Hillary Clinton come November?
MOODY: A lot of people don't necessarily know what TPP is. Certainly people in that arena, a lot of them were Bernie Sanders supporters who are
very versed in this kinds of thing. That's not necessarily a large sample of the voting group. Also remember that Hillary Clinton did support this
deal very strongly. She called it the gold standard of trade deals until it no longer became politically expedient for her to do so.
If they're able to pass this thing and Hillary Clinton wins, I think she would just move on with it. I can't imagine she would tried to overrule it
or at least try to get Congress to pass something, it would be very difficult to do so. No, I don't think this is something that will
necessarily hurt her campaign. Of course Donald Trump is also talking about this as well, putting a full-throated opposition to it. It does not
help. It would be much more beneficial for President Obama if he had his possible successor on the Democratic side being a part of it with him. But
given the politics of what we're seeing today, she's just not.
ASHER: One thing Hillary Clinton did say is that she's against the TPP in its current form. That's sort of how she backtracked. Do we know what
sort of specific changes she would like to see in it if she does become president?
MOODY: One of the major concerns we've heard from the Bernie Sanders supporters and labor is whether or not it will have a negative impact on
the American worker. Allowing foreign workers to undercut the pay of workers here in the United States.
[16:05:00] And Donald Trump is also saying similar things like that. So it will be real interesting to see, even if it's not able to pass in its
current form in Congress now, if Hillary Clinton is elected, if she will continue to do so. Of course there will be many precious from these other
nations that are a part of this. So I don't think you will see this, these calls for a widespread trade agreement going away just because President
Obama is no longer the president.
ASHER: And watching President Obama's press conference today, one thing that he did say, in no sort of unclear, uncertain terms. He said Donald
Trump is unfit to be president. What sort of fallout or damage could we see from that to the Trump campaign?
MOODY: It could actually have an opposite effect of banding together Trump's supporters in a way, when you're attacked, you huddle together.
But also, he put something else out there as well. He sent a message to the more moderate Republicans who have struggled with a lot of the ideas
and things that Donald Trump has said, and President Obama basically said to people like the House and Senate leaders on the Republican side, how far
can Donald Trump go where you won't support him, at what point will you withhold your endorsements? That question will continue to be asked. Even
if it doesn't hurt Donald Trump, it could hurt these House and Senate elections on the Republican side going forward.
ASHER: All right, Chris Moody, live for us there, thank you so much, appreciate that.
MOODY: Thank you.
ASHER: As I'm sure you know by now, Donald Trump is a billionaire and a businessman which he continues to talk about. In the past, members of that
club have been reliable Republican supporters. But in this election, some of the country's most prominent businessman have turned against the
Republican nominee. They say that Trump's business record is a disaster and he would wreak havoc on the economy as president.
(BEGIN VIDEOTAPE)
WARREN BUFFETT, CEO, BERKSHIRE HATHAWAY: You know the history of his enterprises where he was borrowing money, where one time after another, he
went into bankruptcy. I've really never known about another businessman who brags about his bankruptcies. You know, to tell you the truth, why
not? It's his claim to stardom. I don't know anybody else that's had six bankruptcies. But there he is.
MIKE BLOOMBERG, CEO, BLOOMBERG: Through his career, Donald Trump has left behind a well-documented record of bankruptcies, and thousands of lawsuits,
and angry stockholders, and contractors who feel cheated, and disillusioned customers who feel they've been ripped off. Trump says he wants to run the
nation like he running his business. God help us.
MARK CUBAN, OWNER, DALLAS MAVERICKS: You know what we call people like? You know the screamers, the yellers, the people who try to intimidate you?
You know what we call a person like that in Pittsburgh? A jag-off. Is there any bigger jag-off in the world than Donald Trump?
(END VIDEOTAPE)
ASHER: That was actually not just those three men you saw right there, George Soros, Facebook's Sheryl Sandberg and Marc Benioff of Salesforce,
have all said, quote unquote, I'm with her, meaning they're backing Hillary Clinton. Trump says Clinton's wealthy supporters are a liability, not an
asset, for her campaign. At a rally today Trump said that her affluent backers held all the power. Take a listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP, REPUBLICAN PRESIDENTIAL NOMINEE: 20 people gave her $60 million. That's what I've been saying, folks. Look, I know the game
better than anybody. And the game is played that way. They own her.
(END VIDEO CLIP)
ASHER: And one CEO took his anti-Trump message to Cleveland during the Republican National Convention. This is the terminal tower. Take a look
here. It's about half a mile from the convention hall. And that's an excerpt from a letter that reads in part -- I'm not sure if you can
actually see it, because the letters are so tiny there -- but it says, "Americans are also good and we're generous and courageous and kind and
that is what you've missed." Josh Tetrick, Hampton Creek. He joins me live now from San Francisco. So you have, Josh, all these CEOs, these
billionaires sort of coming out and saying they're against Donald Trump for x y z reasons. Do you think it will be effective in the long run?
JOHN TETRICK, CEO, HAMPTON CREEK: I think it probably will. And before you're a billionaire, I'm certainly not a billionaire, you're also human.
You're a human who respects immigrants, who human who respects your mom. Your human being who says the KKK in every way doesn't stand for who we
are. So before you're a billionaire, you're a human. That's why I think this election is really interesting. This is not about a Republican versus
a Democrat. This is about a Democrat versus someone who doesn't express normal everyday American values. That's why in the letter I was pretty
blunt about it. I think his campaign is explicitly un-American.
ASHER: You have a lot of voters who might be watching this show and thinking, listen, well, Donald Trump is a businessman, he's a billionaire,
for all intents and purposes, quote unquote, a successful businessman, I know some people disagree with that. Some people think, listen, he must
know how to create jobs. He must understand the economy. From your perspective though, why is that argument flawed?
[16:10:00] TETRICK: So again, first and foremost, you're a human. If you don't pass this "is this a good human" test, you don't get to the next
test. But on to the next test -- listen, I spent a long bit of my life living in areas that are post-conflict. I lived in South Africa. They've
been through apartheid. I've lived in Liberia. I've been through two wars. Conflict situations, economic security instability, isn't good for
economic security. When you have an unstable security environment, when you have the rest of the nations around the world feeling a sense of
security unease, a sense of economic unease, that's not good for business, it's not good for job creation.
If I'm a company and I'm based in London, I'm a company and I'm based in Mumbai, and I'm thinking about setting up shop in the United States of
America and I feel a sense of unease about the situation here, I'm going to go locate somewhere else. That's why I think Americans need to step back,
pause, and say, is this actually what I want or do I stand for something else?
ASHER: But Josh, just to play devil's advocate for just a second. Hillary Clinton, you look at some of her policies, she has called for tougher
regulation on Wall Street. She's also called for increasing taxes as well. Some people might look at that and say, well you know, that's bad for
business too.
TETRICK: And I think people can openly -- good people can openly disagree with Hillary. They can disagree with Donald. But those are policy issues,
right? I wouldn't have openly written the letter when Obama was running against Mitt Romney, I wouldn't have written a dear Mitt letter. But in
this instance, I don't think we have a policy issue. We have a human issue.
But on the policies -- listen, I think good people can disagree, with it, although you played a clip of Warren Buffett a handful of minutes ago, this
is not just an ordinary billionaire, he's an extraordinary billionaire, not only in terms of his net worth but also his characters. He's a billionaire
who believes we can figure out a way to create millions of jobs. We can figure out a way to help poor kids that might not have what we have. And
that's an inclusive economy and I think good Republicans stand for that too. And also good Democrats.
ASHER: So as a businessman, what sort of concerns you the most about a Trump presidency? Is it his policies on free trade? Is it some of the
comments he made a few months ago about refinancing U.S. debt? Is it his comments on minimum wage, which a lot of people might not agree with? What
concerns you the most?
TETRICK: I think two things. One is -- this is the first company I've ever started where we're fortunate not to be sold everywhere. We also have
operations in Mexico. We sell products in Hong Kong. If we don't have a system of free trade, one that respects WTO rules, one that respects
existing rules of NAFTA, that hurts our business. We export stuff, we import stuff. That's really important. The second thing that's important,
I've learned this being a founder, is what happens globally also impacts us. When there are global economic events, when there's a Brexit, when
there's a terrorist attack. When there's just general instability in this world that affects our company, it affects our people, it affects our
culture. You don't want that to be impacted by a man who doesn't share our values. That's not how we build a company and that's not how I think we
help the economy.
ASHER: And just really quickly, are you voting for Hillary Clinton?
TETRICK: I am.
ASHER: Just to clear that up.
TETRICK: I've voted and I've supported Republicans before. I congratulate Mitt Romney for having the courage to stand up and say this is not who we
are. For those Republicans listening, including Speaker Ryan, including leader McConnell, I ask you to take a step back and say, I believe in the
principles of the Republican Party, which are good. But I don't believe in the values of this human being. I think that's a really important thing
for all leaders of all stripes to do. And I hope they take the opportunity to do that today.
Josh Tetrick, pleasure talking with you, sir. Thank you so much, appreciate that.
TETRICK: OK, thank you.
ASHER: Wall Street now, stocks closed far into the red. The Dow ended the session up about 91 points. Paul La Monica, my good friend is at the stock
exchange for us. So Paul, stocks were not in the best of mood today. I mean, what was it? Was it the low oil prices, was at it car sales data?
What was the major concern?
PAUL R. LA MONICA, CNN MONEY CORRESPONDENT: I think a combination of that, Zain. You had oil prices dipping below $40 a barrel for the first
time in several months. That definitely did not put traders in a good mood. You had those weak auto sales from GM and Ford. Fiat Chrysler they
did report a sales gain but it was lower than expected. Then you also have some bad news from airlines. Delta warning about its latest traffic
figures. And then you throw in concerns about retailers as well. Consumers may be tapped out. That could be a big problem going forward.
ASHER: Which sectors weighed the most heavily? Was it tech stocks? Was it car maker stocks?
[16:15:00] LA MONICA: I think really the big losers today were autos, retailers, and some of those airlines. We did have a little bit of a
pullback in tech as well. It's important to note that the NASDAQ had been on a five-day winning streak even while the Dow was down for six straight
days. That NASDAQ winning streaking has been snapped and now the Dow is down seven days in a row.
ASHER: Right, Paul La Monica, live for us there, thank you so much, appreciate that.
LA MONICA: Thank you.
ASHER: It was a poor day for the European markets as well. All the indices closed in the red. The Paris CAC and the Frankfort Xetra DAX
seeing particularly heavy losses. The markets were dragged down by banking stocks in particular. Take a look here. You can see from some of the
banks in Germany, the U.K., Switzerland, and Italy, closed down all sharply on Tuesday. The problem is not new. This is the performance of those same
banks over the past 12 months. All lost half of their value or more. You have to go to Hungry to find the European Bank Stock that is actually up
this year. Let's discuss all of this with Gilles Moec. He's the chief European economist at Bank of America Merrill Lynch. He joins us live now
from London. So Gilles, are you mostly concerned about just Italian banks or are you concerned about the strength of the overall banking sector in
Europe?
GILLES MOEC, CHIEF EUROPEAN ECONOMIST, BANK OF AMERICA MERRILL LYNCH: There are several issues there. There's one general issue that is true
across the board in Europe, it's the level of interest rates. It is hard for any bank at the moment to make money with rates where they are. They
are negative actually in quite a few cases. So that the general stay.
Then you've got the idiosyncratic Italian problem, which is mainly due to 20 years of economic stagnation, which has generated this lump of
nonperforming loans. That has nothing to do with the kind of issues we had a few years ago in Spain or in Ireland. Where we had was a, I would say,
very traditional housing crisis bubble bust. And the third issue we have is that we have a new resolution system, a new supervisory system in
Europe, which makes it much harder than before to deal with banks they everyone basically has always dealt with banks. Which was to pour a lot of
public state money at it. So it's a conjunction of issues. Italy is one of the elements.
ASHER: And when you look at the fact that the issue, I guess, with nonperforming loans in Italy, what's it going to take to fix that problem?
How does Matteo Renzi build back confidence?
MOEC: Well, there are several solutions there. The first solution is to allow for proper market of those nonperforming loans to emerge. And this
probably takes some nudge from the governments and government money, to be precise, or government guarantees at least. That is something that is
supported by the CB, for instance. Mr. Draggi said last week that he thought that a state involvement would be helpful.
You need to create a market for this. You need to be able to extract those nonperforming loans from the balance sheet of the banks, that's number one.
After that you need to recapitalize them. There is an experiment which is currently conducted in Italy. We may have to resort to the old approach,
which was to pour some public money at it. But that is only last resort solution if the private sector option fails.
ASHER: You know, given that sort of negative interest rate environment, that sort of low interest rate environment, what can banks do to boost
profitability, build up their capital reserve and really boost shareholder returns?
MOEC: What the CD is saying for instance, because in a way they're responsible for this very low level of rates, is that you have to move from
a model in which you make money out of generating a quantity of loans. You make money by basically expanding the size of your balance sheet to a model
in which you make money out of fees that you collect on certain activities, probably the most sophisticated ones.
One issue with this sort of fee-based model is that A, the transition is complicated. And B, it's sometimes quite contradictory with the kind of
post-supervisory push that banks are facing in Europe right now which is making those very sophisticated activities less easy to conduct or at least
more intensive in capital. So if there is a transition, it's not an easy one even if, again, this is what the European Central Bank is trying to
push as a new model.
ASHER: Gilles Moec, live for us there, thank you so much. Appreciate your time, sir.
Still to come here on QUEST MEANS BUSINESS, just days before the Olympic opening ceremonies in Rio, health concerns around Zika and the cities
polluted water. That's next.
[16:20:00] (COMMERCIAL BREAK)
ASHER: This time tomorrow women's football events will be underway at the Rio Olympics, marking the very first official competition of the games.
The city of Rio has come a long way in preparation since winning its Olympic bid back in 2009. Still, as I'm sure you know by now, the Zika
virus is just one of the problems that has plagued the run-up to this festival of sport. Here is our Sanjay Gupta with more.
(BEGIN VIDEOTAPE)
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice-over): You're looking at an image from just last month, body parts on Copacabana Beach.
It was a scene that couldn't have been predicted seven years ago when Copacabana Beach erupted.
The Games were to be a legacy for Rio. In its bid, Brazil promised to clean up at least 80 percent of the sewage that was flowing into the city's
notoriously dirty water.
LUIZ INACIO LULA DA SILVA, FORMER BRAZILIAN PRESIDENT (through translator): This is a challenge for us. And you can be sure that we will not waste
this chance at history.
GUPTA (voice-over): In fact, some of the city's most dilapidated quarters have been turned into green spaces. Here, public art is being spray
painted on walls. But the rest of the world is more concerned about this spraying.
GUPTA (on camera): We know that Brazil is the epicenter of the Zika epidemic and, as the numbers continue to increase in Florida, experts are
continuously looking here to try and find some answers. For example, we know that more than 1,700 children have been born with Zika-associated
microcephaly, a birth defect. We also know that 150 public health experts called for the Olympics to either be delayed or moved because of concerns
about Zika.
But I want to be clear about something. The weather is starting to cool here, even as it warms up in the United States. And, as a result, the
threat of infection is pretty low. According to a University of Cambridge study, out of the hundreds of thousands of tourists who are likely to visit
the Olympics, there will probably be only one or two infections. But that still hasn't kept some of the athletes from dropping out of the Games.
TEJAY VAN GARDEREN, U.S. CYCLIST: Honestly, if my wife wasn't pregnant right now, I would be going to Rio. I mean, my biggest concern is for the
baby on the way.
GUPTA (voice-over): Now remember, even if he went and then didn't show any symptoms, van Garderen could still be infected and potentially pass the
virus on to his wife. After all, only 20 percent of those infected have any signs of the disease.
But when it comes to athlete health, the concerns here are not just about Zika. Those promises of clean water -- not in the Guanabara Bay, where
sailors will be competing for gold and where trash and sewage continues to litter the surface.
HEIKO KROEGER, GERMAN PARALYMPIC SAILOR: Every time you've got some water in your face, it feels like there's some alien enemy entering your face.
So I keep my nose and my lips closed.
GUPTA (voice-over): His teammate, Eric Heil, believed the waters are the source of the multiple infections he contracted last year after racing in
an Olympic qualifying event. Just last month, Brazilian scientists detected the superbug, CRE, in these waters.
MARTINE GRAEL, BRAZILIAN OLYMPIC SAILOR (through translator): Very little has been done. And the measures that were taken were not done the way we
would have liked them.
[16:25:00] GUPTA (voice-over): Brazilian officials say the waters have met international standards. But then just one month ago, the WHO said that
athletes may become ill from this water. And U.S. Olympic doctors are prepping their teams for such a situation.
DR. CLIFTON PAGE, U.S. SAILING MEDICAL ADVISER: We have a number of medications that they can take prophylactically to avoid those illnesses
and then also to take to treat the illnesses as well.
GUPTA (voice-over): And doctors on the ground have another concern.
DR. NELSON NAHON, REGIONAL COUNCIL OF MEDICINE OF RIO DE JANEIRO (through translator): If there were a big catastrophe, an attack or a brawl, we
don't have the infrastructure to deal with it.
GUPTA (voice-over): Political and economic crises have burdened local hospitals, even under normal circumstances, waits for emergency surgery can
be as long as six days. But Rio's mayor says the Games' legacy will not be a shadow on Rio.
EDUARDO PAES, RIO MAYOR: Don't come here expecting that everything will be, you know, perfect. We live in a country that has economic crisis, a
country with lots of inequality. With all the problems that we've seen but the city will be much better than it was when we got the Games.
GUPTA (voice-over): Dr. Sanjay Gupta, CNN, Rio de Janeiro.
(END VIDEOTAPE)
ASHER: As you can imagine the experience are preparing for these Olympic Games to be weighing on the International Olympic Committee when they think
about future host stations. Ed Hula, is the founder and editor of "Around the Rings." He's in Rio for us tonight. So Ed, I want to get your honest
opinion on this. Was it a mistake, was it a mistake for the IOC to hold the games in Rio, do you think?
ED HULA, FOUNDER AND EDITOR, "AROUND THE RINGS": I don't think so, because South America is a part of the world that hadn't had the Olympics until it
came around to Rio's bid for the 20 -- well, they bid a couple of times, but for the 2016 Olympics. Things were going well in Brazil at the time.
The economy was strong. The political leadership was in a stable state. It was just a whole different situation. And of course in hindsight,
everybody has perfect vision.
ASHER: Right.
HULA: But at that time you could see Brazil was clearly a place the Olympics should go.
ASHER: So three days to go until the start of these games. Can Rio pull this off? Are you hopeful?
HULA: Well, I am hopeful. There are all kinds of loose ends still to tie up. I'm worried about the traffic situation around the Olympic venues. We
hear the horns of cars. Already we see some precious on the traffic system, the street system, because of the Olympic lanes. We'll find out
what happens when crowds of spectators come at the airport. There's already been some delays at immigration control. Hotels are filled. Rio
deals with major events like this on an annual basis, whether it's the new year's celebration or carnival. So they should be able to pull it off, but
on the other hand, this is going to last for 17 days here in Rio. So it's a real slog after a while.
ASHER: If Rio fails, what are the chances of another Latin American country getting to host the games anytime soon?
HULA: Another Latin American country would really have to have a great set of credentials to do that. Buenos Aires would be, I guess, the next place
that might be under consideration. It'll be a while before they come back to South America. And I think the mode of the IOC as it moves forward will
probably be to look at a more developed location for the next games, indeed. The 2024 Olympics, which is to be decided next year, is a contest
between Los Angeles, Rome, Paris, and Budapest. Those are four very strong cities and a big difference than what we've got here in Rio.
ASHER: Right, but overall, just in terms of predicting the future, are we going to see the games being held in these sort of repeat locations, the
same locations over and over again, in just a different order?
HULA: Well, I think the IOC has to recognize that there's only so much of a challenge. There's only so much that they can put on a city. I think
that's one of the takeaways of their experience in Rio de Janeiro. Make sure this place really does have the capacity to properly hold the Olympic
Games. Yes, it might mean going back to a Paris or a Los Angeles or other cities which have the infrastructure. I think that is really key. Which
cities have the basic infrastructure you need to hold the games successfully, and not necessarily a place where you have to build that
infrastructure. That's where you're asking for all kinds of trouble.
ASHER: How do you think, sort of 10, 20 years from now, how do you think Rio will benefit and be transformed as a result of hosting the Olympic
Games there this year?
HULA: Well, it is an event that probably has brought some new infrastructure here to Rio de Janeiro. It's made itself more aware that
it's a player in the world. Legacy is a very elusive, slippery thing to grab hold of for an Olympic Games.
[16:30:03] I think Rio will benefit in the long term from having the satisfaction, the pride that comes from staging a successful Olympic Games.
Of course we're holding our breaths for the next couple of, three days, to see what happens when it really does get under way here on Friday, August
5th. But we do have our fingers crossed that one way or another, the Brazilians will find a way to make things work here in Rio de Janeiro.
ASHER: Ed, I have to say I really commend your optimistic. Thank you so much for being with us. Ed Hula live for us there. Thank you.
How Indian workers are surviving in Saudi Arabia while stranded without pay, that's next.
(COMMERCIAL BREAK)
ASHER: Hello, everyone, I'm Zain Asher. Coming up in the next half-hour of QUEST MEANS BUSINESS, Apple switches its gun emoji for something a
little less harmful. And I'll talk to the CEO of IMAX on the day they announce a massive deal in China. Before that these are the top news
headlines we are following at this hour.
U.S. President Barack Obama says Donald Trump is unfit to be the country's next commander-in-chief, speaking at the White House after a meeting with
Singapore's prime minister, Mr. Obama said Donald Trump lacked any of the right qualifications.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT UNITED STATES OF AMERICA: I think the Republican nominee is unfit to serve as president. I said so last week. And he keeps
on proving it. The notion that he would attack a Gold Star family that had made such extraordinary sacrifices on behalf of our country, the fact that
he doesn't appear to have basic knowledge around critical issues in Europe, in the Middle East, in Asia, means that he's woefully unprepared to do this
job.
(END VIDEO CLIP)
ASHER: After that, Mr. Obama went on to question why Republicans continue to support Trump's campaign. Trump responded by saying it was Mr. Obama
and the Democratic nominee, Hillary Clinton, who were unfit to serve. In a statement, he criticized their foreign policy record and called Clinton
reckless.
Two chemical attacks have been reported in northern Syria. In Aleppo, the Syrian government says rebels carried out gas attacks that killed five
people. In Idlib province, opposition groups are accusing Syrian forces of using chlorine gas on civilians. They say_00:35:00 this video shows
alleged victims being treated.
Thousands of mourners have gathered in France for a funeral of a priest murdered last week in his church. 86-year-old Father Jacques Hamel was
killed as he said morning mass in Normandy by two men who claimed the attack in the name of ISIS.
Turkey has made a second request to the United States to extradite a powerful cleric. That is according to Turkey's Justice Minister. The
Turkish government believes Fethullah Gulen is behind last month's attempted coup there. Gulen lives in self-imposed exile in the U.S. state
of Pennsylvania.
India is rushing aid to thousands of its citizens in Saudi Arabia who are running out of food after losing their jobs. The layoffs come as Saudi
Arabia grapples with low oil prices that have slashed economic growth. Here is our John Defterios with more.
(BEGIN VIDEOTAPE)
JOHN DEFTERIOS, CNN MONEY, EMERGING MARKETS EDITOR: Thousands of laborers from India left in limbo.
UNIDENTIFIED MALE: No salary. No food. No money.
DEFTERIOS: They're stranded in Saudi Arabia after the plunge in oil prices sparked massive layoffs there. According to the Indian government, some
7700 Indian workers are stuck in 20 different camps across the kingdom. A CNN camera crew visited this camp in Jeddah. It was shut down months ago
with no warning t workers. Now there's no water, no power, and nowhere to go.
UNIDENTIFIED MALE: There's no water.
UNIDENTIFIED MALE: No water.
UNIDENTIFIED MALE: No electricity.
UNIDENTIFIED MALE: No. no.
UNIDENTIFIED MALE: How many months?
UNIDENTIFIED MALE: Seven months.
UNIDENTIFIED MALE: Seven months.
DEFTERIOS: These construction workers tell CNN they haven't been paid for up to seven months. Over the past week, food rations are drying up.
India's Consul General based in Jeddah calls it a desperate situation.
MUHAMMAD NOOR RAHMAN SHEIKH, INDIAN CONSUL GENERAL: The condition is not good, I mean this what we convey to the authorities here. I mean it is no
just about food, it's about the livability of the camps as well.
DEFTERIOS: The Indian community has rallied to deliver food to the workers, hoping it will last until the Indian government can obtain exit
visas. But it's complicated. Nearly all of these workers have handed over their passport to the companies they work for. So trying to get them back
is very difficult.
Another issue, the Indian government is trying to obtain back pay for thousands of their workers, they are sending a top diplomat to Jeddah to
lobby that cause. With an estimated 3 million Indian expats on the ground in Saudi Arabia, it could get much worse if oil continues to hover around
$40 a barrel, which would likely lead to further cuts from the Saudi government and in turn cuts for contractors as well.
(END VIDEOTAPE)
ASHER: And Oger's representatives were not immediately available for comment. Saudi officials contacted by CNN Money said they would look into
questions about the situation. Earlier I asked John Defterios you saw in the package there what the challenges are for repatriating these workers.
(BEGIN VIDEOTAPE)
DEFTERIOS: The biggest challenge is that when they take a contract, and there's a usually a middleman involved in the process, they turn their
passport over to the middleman and that goes to the contractor itself. So you have had a case here where projects have been squeezed because, don't
forget, the government as part of this 2030 plan is trying to wean the society off of oil because of $40 oil at this stage.
So the big projects have been stopped in many cases. The workers can't leave the country without an exit visa. And of course they don't want to
leave the country unless they get their back pay. I think it's hard for us to understand, particularly in the West, but I'm sitting here in the Gulf,
to have people in a country not being fed and having the local community kind of fill that void right now.
There's going to be a negotiation between the Indian government and the External Affairs Ministry, the Labor Ministry in Saudi Arabia, and serious
talks with the contractors themselves. How did you halt the project and get to such a dire situation over the last two weeks with no water in some
of the camps and very little food if the Indian community did not step in?
ASHER: So if oil prices remain low. If they still continue to hover around $40 a barrel or even lower, what does the future hold for these
workers, especially the ones who decided to stay?
DEFTERIOS: Well, this is the new normal, Zain, if you will. What I mean by that is we were enjoying $100 a barrel for the better part of four
years. That's what sparked this construction boom throughout the six Gulf states, particularly Saudi Arabia, over the last four years. The Saudi oil
minister told me after the OPEC meeting in Vienna in June he thought we could get to $60 a barrel by the end of 2016. That looks very different
from where we are now.
[16:40:00]
Let's go back say even four months to April. We had a low of around $40 a barrel by mid-April, then a rally to $52 a barrel in early June. And then
it's been a drip, drip, drip, lower to where we are today, hovering around $40 a barrel. Many thought this market would rebalance. There's a catch
here, Zain. There is the goldilocks scenario.
If I'm a Gulf producer and I can produce it for say $2 to $6 a barrel and shale producers in the United States are hovering around $35 to $45 a
barrel, I don't want the price to go too high because it invites other producers back into the market. So they want to kind of keep this halfway
point right now. But $40 is certainly not working for all the spending projects that we've had on the books going back five years when oil prices
were much higher than they are today, that's for sure.
(END VIDEOTAPE)
ASHER: John Defterios speaking to me earlier. Next on QUEST MEANS BUSINESS, IMAX rolls out even more big screens in China. We speak to the
company's CEO about its biggest deal ever. That's next.
(COMMERCIAL BREAK)
ASHER: IMAX is pushing hard into China. The cinema group has struck a deal with a unit of Dalian Wanda to create 150 new cinemas in China over
the next six years. Wanda belongs to Wang Jianlin China's richest man. Joining me live now in the C-Suite is the CEO of IMAX, Richard Gelfond,
thanks for being with us. This is the biggest deal in your company's history. Why is right now the time for IMAX to grow in China?
RICHARD GELFOND, CEO OF IMAX: IMAX has done extremely well in China. We've had a partnership with Wanda for about ten years. When we're
involved in a movie, we do 10 percent to 15 percent of the Chinese box office for the whole country, even though we're on about 1 percent or 2
percent of the screens. We have strong brand recognition in China.
The Chinese movie industry is growing rapidly. It's been compounding around a 50 percent growth rate a year for the last seven or eight years.
So there's kind of a land grab going on. And I think IMAX is part of it. So we give exclusivities. If you want to get the right locations for IMAX
over a long period of time, you want to lock in the right sites, right now. That's part of the motivation with Wanda.
ASHER: One thing we covered earlier in the week is just how difficult it can be sometimes for American companies to do business or succeed in China,
particularly tech companies. What's the secret?
GELFOND: I think there are two things. One is you really have to do a win/win situation. I personally have been going to China for over 15
years, and I've tried to create relationships there, with the exhibiters, with the studios, with the real estate developers, where IMAX wins but they
win also. You can't be too greedy.
[16:45:00]
Second thing I think is the personal touch. A lot of companies try and send in the head of China business to meet with a CEO of a company there.
I don't think that works. I think you have to build relationships over a long period of time. And I think -- I mean, there's obviously other
things. But I think those are the two key things.
ASHER: What do you think some of the challenges are, especially when it comes to the regulatory environment there?
GELFOND: I think one of them is understanding that the government always has a role. If you're in a place like the United States, for example, or
the U.K., you can view it as kind of businessman versus businessman or with businessman. But I think in China you always have to know that whether the
government is there or in the background, they're always present.
ASHER: Does the government favor domestic companies more so than outsider companies and can you feel it when you're there?
GELFOND: I think it depends on the industry. And it depends on the relationships that you have. As a general rule, yes, there are incentives
to help domestic companies, and yes, you can feel it. But I think if you're there a long time, so for example our Chinese company, IMAX China,
is listed on the Hong Kong stock exchange. And it has a Chinese CEO. We have 100 employees where the vast majority are Chinese. One way we've
succeeded is to become a Chinese company in China, so that way we feel less like a Western interloper.
ASHER: One thing that helps your company, obviously, is the growing middle class in China. I'm sure that helps IMAX tremendously. Are you concerned
about slowing growth in China?
GELFOND: It doesn't really worry me. Because for a couple reasons, first of all, if you look at the history of the movie business, recessions
generally don't have a negative impact. So people go to the movies whether times are bad or whether they're good. If it's a bad economy, you might
say I'm not going on vacation or I'm not going to expensive restaurants.
But the movies are an affordable luxury and people will say, for whatever it costs, $13 is our average ticket price, I can really escape and feel
like I've gotten away. The second thing is that the dispersion of wealth is going to the middle class so quickly in China, people want something to
do. And after housing and food and clothing, entertainment is one of those things. I think you have so much tail winds at your back in terms of the
rising population, that that compensates for short-term downturn.
ASHER: Richard Gelfond, thank you, we appreciate you being with us.
Shares of Tesla have closed down 1 percent. They continue to fall even after Tesla bought a solar panels company, the stock has dropped 15 percent
over the past 12 months. Maggie Lake takes a look at Tesla's troubles.
(BEGIN VIDEOTAPE)
MAGGIE LAKE, CNN MONEY ANCHOR AND CORRESPONDENT: From Tesla's $2.5 billion merger with SolarCity this week, to the unveiling of the more affordable
Tesla model 3, and the opening of massive battery plant in Nevada, Elon Musk is living up to his reputation as a world class disrupter.
PETER VALDES DEPENA, CNN MONEY DIGITAL CORRESPONDENT: The overall narrative is that Elon Musk and Tesla are going to keep pushing hard with
everything they're doing.
LAKE: This summer that vision is being tested like never before. After the death of Tesla enthusiast Joshua Brown, who crashed his car in auto-
pilot mode, Tesla employees have raised questions about whether the technology is ready for widespread use. But Musk is standing firm, saying
on the whole the technology can ultimately save lives.
DEPENA: He's not backing down even when some people say, look, this is dangerous, you're moving too fast. People at Consumer Reports are saying,
but look, can you at least tell drivers to keep their hands on the wheel? But to Elon Musk and Tesla, they would rather keep pushing and just make
the technology better.
LAKE: Investors also remain antsy about production delays and ballooning costs. Tesla's shares have fallen 5 percent so far this summer and are
down over 13 percent this past year. What's good for Elon Musk may not necessarily be good for Wall Street.
COLIN RUSCH, SENIOR RESEARCH ANALYST, OPPENHEIMER & COMPANY: To expand the scope of the organization is a big risk here. To take on SolarCity, plus
some of the other initiatives that they talked about, potentially it's too much for the company to actually execute.
DEPENA: Investors would rather be looking at these deals and thinking, look, the only thing we're worried about is, is this going to make money or
not. That's not the only thing Elon is looking at.
LAKE: Tesla in the meantime appears to be burning through cash at a rapid rate. After raising $1.5 billion this spring, Musk says he may have to
raise more. The question is, will investors still go along for the ride? Maggie Lake, CNNMoney, New York.
[16:50:00]
(END VIDEOTAPE)
ASHER: Still to come here on "QUEST MEANS BUSINESS," Apple puts away its pistol as another tech firm takes up arms again. We will have that after a
highlight from make, create, innovate is next.
(COMMERCIAL BREAK)
ASHER: Apple is taking the bullets out of its guns. That's the company's old pistol emoji on the left and the new one on the right. Apple did not
give a reason for this change, you see the former pistol there crossed out and the toy one there in green. The pistol emoji has actually landed some
users in legal trouble when it was taken as a real threat.
The process of introducing an emoji starts with the Unicode Consortium. It decides which characters to feature, like deciding which letters to make up
the alphabet. It recently turned down a request for a rifle emoji. Then it's up to companies like Microsoft, Apple, and twitter to decide how those
characteristics should actually appear.
Windows 8 users see a ray gun while most others see a regular pistol. As Apple replaces the pistol with a water gun. Microsoft is going the other
way. The latest update to Windows 10 released Tuesday replaces that ray gun with a pistol. Jerry Burge is the founder of Emojipedia and a member
of the Unicode emoji subcommittee which reviews request for new emoji characters.
He joins us live from London. Thank you so much for being with us. Here's my question to you, when you think about companies swapping out real
lookalike guns with water guns, are the emoji becoming a little too political? What do you think?
JEREMY BURGE, FOUNDER EMOJIPEDIA: I think it's not just the political angle. I just think it's a -- I'm not sure what the point is, to be
honest, I'm not quite sure what's to be gained by switching out a real gun for a water pistol. I'm not sure what is to be gained?
ASHER: Do you think it clamps down on freedom of expression?
BURGE: To some degree. Users of an iPhone, if they felt quiet attached to the pistol emoji, then potentially but you get another phone. The issue is
if you send the pistol from one phone to another, it looks different. That's the real issue here.
ASHER: Explain to our audience just how emojis are sort of decided and created.
BURGE: It's a bit of a process involved. Anyone can propose an emoji. It goes through what's called the Unicode Consortium, which is really just a
collective of the major tech companies and people interested in this sort of thing. And they approve it once a year. After that, any of the tech
companies can draw how they want -- they can design their own pictures for each one.
ASHER: So big corporations really do have an influence on emoji use and therefore our ability to communicate in a way.
BURGE: To some degree. They collectively decide what is going to be on our emoji keyboards. If all the vendors, Apple and Google and Microsoft,
if they didn't want it to be there, they wouldn't put it on, they wouldn't _00:55:00_ vote for it to go ahead.
ASHER: What do you think has been the influence of emojis on American culture?
BURGE: It definitely goes both ways. We look at last year, we had the new skin tone emoji come out with the different skin tones for different racial
sort of looking emoji. That was a bit of a gap in the standard before, that we had a lot of white people and not anything else. To some degree it
does restrict and limit what you can send as an emoji if you don't have what you need on the keyboard.
ASHER: Overall, do you think we're in peak emoji times? And what do you think would suddenly cause emojis to go out of fashion?
BURGE: I thought we were in peak emoji last year but it seems to have only got more and more popular. I'm not really sure. I think we're going to
keep using emojis for quite a long time. Potentially the brands that get involved, sometimes it can get a bit tiring, depending on how good a job
they do or not. Sometimes brands can miss the mark when they try and keep up with every else.
ASHER: My producer just said in my ear, is that an emoji t-shirt you're wearing?
BURGE: t's got some little mac icons on there. It's predating emoji by about 20 years.
ASHER: All right. Jerry, thank you so much, I appreciate you being with us.
BURGE: Great to be here.
ASHER: If you want a daily digest of the day's top business stories delivered to your inbox, subscribe to QUEST MEANS BUSINESS, a newsletter
featuring Richard's Profitable Moment. I tried to do that in Richard's accent, I'm not sure if that worked. It also has all the headlines from
the rest of the CNN Money team, just go to CNNmoney.com/quest to subscribe.
That of course was QUEST MEANS BUSINESS, I'm Zain Asher in New York. Thank you so much for joining us. I'll see you again this time tomorrow.
END
