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Quest Means Business
271 Russian Athletes Can Compete at Olympics; Bank of England to Pump $92 Billion Into U.K. Economy; Apparel Companies Battle for Olympic Gold; Wall Street Down Ahead of Jobs Report; : Clinton Leading in Three Key States; Sources Say Trump is Frustrating Advisers. Aired 4-5p ET.
Aired August 04, 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: That round of applause marks the end of another trading session on Wall Street, sort of a quiet day on Wall Street.
Stocks really lacked momentum. There was nothing for investors to get excited about. The big focus will be at all-important jobs report we get
tomorrow. It is Thursday, the 4th of August. Tonight, Russia says it's athletes have cleared the final hurdle and most will compete at the Rio
Olympics.
The Bank of England parties like it's 2009, cutting rates to a record low.
And so long to the push. Tiger Woods pays tribute to Nike as the company gets out of the golf game. Hello, everyone, I'm Zain Asher and this is
QUEST MEANS BUSINESS.
All right. Tonight, one day before the opening ceremony of the Rio Olympic games, we're finally and slowly learning which Russian athletes will be
allowed to compete. We're still waiting for a final confirmation from the international Olympic committee. But here is what we know so far from the
Russian team. A spokesperson says around 271 Russian athletes have been cleared to take part in the games. That is the vast majority that Russia
was hoping would be allowed to compete in Rio. The big exception is of course the track and field athletes where only one of the 68 competitors
have been cleared. The spokesperson also said, several Russian athletes are still waiting for a final decision about their fate from a top sports
court. It's really coming down to the wire, but overall, the Russians are happy indeed. Take a listen.
(BEGIN VIDEO CLIP)
ALEXANDER ZHUKOV, PRESIDENT, RUSSIAN OLYMPICS COMMITTEE (through translator): Now we have good news for Russian sports supporters. I
believe you're all waiting eagerly for this information. I would like to say that the majority of sports, our teams will take part in Olympic games
in their full list.
(END VIDEO CLIP)
ASHER: As a reminder to you, Russia was actually facing a blanket ban from Rio 2016. The world anti-doping agency accused the country of widespread
state sponsored doping over a number of years. That was revealed sort of last year. In its report, WADA called the situation in Russia, "A shocking
and unprecedented attack on the integrity of sports and the Olympic Games." They had of the International Olympic Committee said earlier today that
doping will not be tolerated.
(BEGIN VIDEO CLIP)
THOMAS BACH, PRESIDENT, INTERNATIONAL OLYMPIC COMMITTEE: The message is clear. We want to keep the cheaters away from the Olympic games. The
message is clear there is no place to hide for cheats. And dopers can never feel safe anywhere, because we are storing the samples and we will
follow up on each evolution in scientific research and testing methods.
(END VIDEO CLIP)
ASHER: I want to go straight now to our reporters on the ground there in Rio. Don Riddell is outside Olympic park. Nick Paton Walsh is standing
with the reaction from the Russian camps. And Nick, I want to begin with you. Russia did fear an initial sort of blanket ban. They must now be
breathing a sigh of relief.
NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, absolutely. And it's remarkable how the day has played out, the
choreography. We've been waiting for the IOC to say which Russian athletes. How many would be able to compete. But the Russians came out
and seemingly have done it for them. Obviously, it's not the final decision, but they have stolen the show to some degree. I just asked t
Alexander Zhukov, the head of their Olympic committee, why did you do that? He said, look, we're not saying these are the competitors, it's just the
information we have so far. It will be very difficult now, frankly, for the IOC to disagree with the information the Russians have put out, which
is that 271 out of their 287 cases being reviewed are fine. And the remaining 16, well, they haven't necessarily been totally rejected either.
So this process, which many thought was controversial anyway, of the IOC referring to the individual sporting federations to judge which Russian
athletes had a clean slate and which didn't, that has worked overwhelmingly in Russia's favor. You can feel it, frankly, this is a bit of a
celebration to be honest. They were facing very potentially banned games. Gases were blanket ban. Yet of course, some of their major medal hopes
won't be competing. Sixty-eight track and field not going through, one will be allowed through. One of the 68 will be allowed through.
But it will be a bad game to some degree. But then also they're still here. We're about to see their opening ceremony behind me get under way
very noisily. But the atmosphere is more broadly one of, well, OK, we've got through this hurdle. Now I did ask the main spokesman here for the
Russian Olympic committee exactly what comes next. They still have doping tests ahead of them.
[16:05:00] The allegations against the Russians were extraordinary, they were told or accused of a state-sponsored Russian security service assisted
industrial scale of doping for years. That was what whistleblowers and researchers accused them of, which they denied. But they say, look now,
they still have to face the doping system here at the laboratory in Rio de Janeiro. I asked the spokesperson will he be respecting those, do you have
confidence in them, and he said, we have confidence in our athletes.
Of course they'll have to deal with the fact now that each time one of their athletes gets on the podium, there will be that sort of suspicion or
shadow to some degree. There are of course I'm sure Russian athletes this is a slight on their otherwise clean record, and there are many Russians
deeply upset but all of this. But this has been I think frankly a disastrous moment for them, but also one of great complexity for the IOC.
They have yet to say how many Russian athletes can actually compete. They've sort of let the Russians do it for them to some degree. So we are
looking still at a great amount of controversy over the Russian presence here, Zain.
ASHER: But Nick, talk to us about morale among Russian athletes. Because on the one hand, yes, as you said, many of them are indeed allowed to
compete. But on the other hand, their reputation has been more or less completely tarnished.
WALSH: Well, it's difficult really. If you look at the accusations, and the notion is the accusation is pretty much everybody involved in Russian
Olympic sports is somehow involved in doping as well. That was the nature of the allegation, really, that it was so pervasive that they really had to
ban everyone. Now we are, of course, facing now the vast preponderance of the athletes under review attending the games. Many of them will feel they
were tarnished perhaps by an unfair system.
It's really hard to peel away the onions of really what you have to do to get to the truth of the matter. But I think morale here is higher than it
possibly could have been. Given the other potential was many less getting through the review successfully. They knew that hundreds weren't going to
go in the first place. They know their name frankly has been dragged through the mud by these allegations for quite a period of time. And I
think, yes, you're looking at a place of Alexander Zhukov today. He's a man whose had very good day, Zain.
That's right. Nick Paton Walsh, stand by, I want to bring in Don Riddell. Don, in terms of getting final word from the IOC -- this is really coming
down to the wire.
DON RIDDELL, CNN WORLD SPORT: No kidding. I mean, this is incredible. The opening ceremony is barely a day away now. And we still actually
haven't had official word from the IOC, as Nick rightly said. The Russian delegation really stole the march on the IOC's position today. I was in
the press conference with Thomas Bach. It was absolutely packed. The world's media was there. We fully expecting at that point that he was
going to finally put this whole thing to bed. In the IOC still actually haven't done that.
It is just remarkable that it has come to this point. When you think about the Olympics -- it only happens once every four years. It is the pinnacle
of the career for each and every one of the athletes who are here. More than 10,000 athletes come and compete in this event. We know that it's
watched globally by an audience of billions. And to be just a matter of hours away from the opening ceremony and still not know exactly who is
going to be competing is unprecedented, I would say, far from perfect. It's a nightmare for the athletes, not only for the Russians. And many of
the Russian athletes claim they are clean so they will feel very unfairly treated, that they've been put through the stress of this ordeal.
Then of course you have the clean athletes from other countries who were wondering whether or not they were going to be going up against the
Russians. Now perhaps their worst fears have been realized, that they are going to have to compete against these guys, and they will step into these
events now, I suspect, with a great deal of unease.
ASHER: And Don, in the wake of all this, how does the international anti- doping system restore faith and trust and credibility?
RIDDELL: Well, it's been trashed. I mean, it's been absolutely trashed. The athletes, they know there are cheats out there. They know it. They
choose to put themselves basically into a state of ignorance. Because if they were to spend every moment competing, look at their rivals and
competitors and wondering, who's doping here, that looks suspicious, they'll drive themselves crazy. They have to put themselves in the
position where they liberate themselves of that kind of responsibility, I suppose, and put their full faith and confidence in the authorities, that
they have their best interests at heart, that they're looking out for them.
And I think there's no doubt here that been they've completely failed. The IOC, the world anti-doping agency, the individual federations, that it's
come to this as a clear indication that the system has failed these athletes. Despite what you hear from the IOC. Thomas Bach saying, he is
sure and confident he can look those athletes in the eye and guarantee them that they're going to be competing in a level playing field.
[16:10:00] I don't think the other athletes necessarily would agree with him. And I think whatever happens in Rio, they do need to come up with
something better and more efficient for future Olympics after this.
ASHER: I'm sure the sporting world is eagerly awaiting to see what happened in Rio tomorrow. Nick Paton Walsh, Don Riddell, thank you both so
much. I appreciate that.
And as Don just mentioned, we are still waiting for the official IOC confirmation on the Russian athletes' status. And we'll bring you that as
soon as we get it.
We're also waiting for a press conference. This one from the U.S. President, Barack Obama. He's due to speak any minute now at the Pentagon
after receiving an update on his administration's battle against ISIS. We'll bring you that press conference as soon as that happens as well.
The British Olympic team is in Rio. The Bank of England is competing in its own event in London, the economic high jump. The British economy will
need to clear a high bar to avoid any recession. On Thursday the bank slashed its growth forecast by the biggest margin in nearly two decades.
And Governor Mark Carney announced the drastic measures he's taken to give the economy some altitude. First, the Bank of England's first rate cut in
seven years. Rates are now at their lowest levels ever, ever. Second, an extension of quantitative easing. The bank will spend some $92 billion to
buy government and corporate bonds as well. And third, new funding for the banks as well. That's designed to protect bank profit margins and ensure
the benefits of stimulus are passed on to consumers right away. Speaking after the decision, Mark Carney said he could do more if the economic
outlook doesn't improve anytime soon.
(BEGIN VIDEO CLIP)
MARK CARNEY, BANK OF ENGLAND GOVERNOR: This timely, coherent, and comprehensive package of measures is appropriately sized given the scale of
the shock. Uncertainties about the degree of adjustment and the relatively limited data. All of the elements in this package have scope to be
increased.
(END VIDEO CLIP)
ASHER: Mark Carney speaking there. Charles Goodhart served as a member of the Bank of England's Monetary Policy Committee. I spoke with him a short
time ago. And I began by asking him how worried the Bank of England is about the state of the British economy.
(BEGIN VIDEOTAPE)
CHARLES GOODHART, FMR. BANK OF ENGLAND COMMITTEE MONITOR: I think they're concerned. The direction of the movement is clearly slower than it was
before. And we're losing a bit of GDP. But it's not a disaster. And it's a slowing. With any luck, we'll not get into a technical recession.
ASHER: What are the kind of challenges in deciding how much to cut interest rates by, how low to go?
GOODHART: Well, they're limited by the zero lower bond. They don't want to go down to zero. And they've gone half that way. It's really only 25
basis points, which is a very small cut when you consider that after Lehman, say, cut by 450 basis points. So this is about a 20th the size of
the change they made after the Lehman crisis.
ASHER: So only 25 basis points, but still a cut nevertheless. What do you think will be the tangible effects of this rate cut, especially when it
comes to borrowers who are no doubt happy about this? But also savers and pension funds for whom this could be a disaster?
GOODHART: It's actually not that much of a change. Central banks around the world are running out of ammunition. I think it's more out of a
signal, more an attempt to boost confidence. It's an exercise of saying we're there. We're going to help as far as we can. But the main response
has got to come from fiscal policy. Monetary policy has already done just about everything that it can.
ASHER: You were a member of the Bank of England's Monetary Policy Committee. If you were still there today, would you have done anything
differently?
GOODHART: It depends what you take as given. Given what all the members of the MPC have said about the fact they need to make changes, that they
will do so, that monetary policy needs to ease, they've boxed themselves in. They really had no alternative but to do as much as they could, and
this is what they've done. And it does help a bit. It mitigates. It may improve confidence a bit. It offsets some of the concern about weakness in
the economy. Yes, it will help. But it won't help very much. It's not a game changer.
ASHER: Where you surprised at all when they kept rates on hold three weeks ago, do you think they should have acted then, perhaps?
GOODHART: No, because they didn't know what was likely to happen. They still don't. All that we actually have in the form of information is a few
survey results which have been pretty gloomy. But maybe they were gloomy because they were largely taken while the political scene was in such
chaos. It's difficult to be confident when we don't know where either major political party is going. Now at least we have a government.
(END VIDEOTAPE)
[16:15:00] ASHER: And of course you'll remember that the run-up to the Brexit vote saw warning after warning about potential damage to British
businesses. Nina dos Santos visited a bike manufacturer to see how it's copying with an economic cycle that's ready to slow down.
(BEGIN VIDEOTAPE)
NINA DOS SANTOS (voice-over): Before the U.K.'s Brexit vote, businesses were buffeted by one warning after another.
UNIDENTIFIED MALE: Britain will be permanently poorer if we left the European Union.
CHRISTINE LAGARDE, MANAGING DIRECTOR IMF: Low output, low growth.
UNIDENTIFIED MALE: Damaging the competitiveness of U.K. companies.
DOS SANTOS: Six weeks on, and how bad are things really on the factory floor? At this West London bicycle maker, Brexit may have come as a shock,
but hasn't got them in a spin.
WILL BUTLER-ADAMS, CEO OF BROMPTON BIKES: Brexit, before the vote, I think was sort of over exaggerated. Too scared, too extreme. The impact on our
business is not seismic as they read in the papers. After the net effect in reality for us is pretty positive, because our bike has become more
competitive.
DOS SANTOS with about 30 percent of its sales going to Europe, the continent is Brompton's second biggest market after Asia. But other places
are growing too and that is what they're focused on.
BUTLER-ADAMS: I'm exporting to South Korea, to Chile, to Argentina, to Mexico, to Colombia. They're not in Brexit. How on earth am I managing to
do that? Our largest export market is South Korea. If we can sell to countries outside the Eurozone today, we can do it tomorrow inside Europe.
DOS SANTOS: Where the company is seeing softness is at home in the U.K.
BUTLER-ADAMS: We've seen a drop-off in orders in a very, very short term. Because all of our customers want us to put in a price cut.
DOS SANTOS: The pound's 10 percent drop has had mixed blessings. Making Brompton's bicycles cheaper abroad, however, raw materials have become more
expensive.
The U.K. economy grew by more than expected in the second quarter. But other indicators haven't been anywhere near as positive. The country
suffered its worst drop in consumer confidence in 26 years just last month. And this means signs for businesses like Brompton's which has just spent
$2.5 million on a new factory. And more money developing an electric bike that's to hit streets next year.
BUTLER-ADAMS: We have three main priorities for this fiscal year. One is the move and extract the savings. The second is launch e- bike. Third is
develop U.S. Those Three don't change. Those are bigger strategic imperatives for this business, which involved our sales on a global basis.
DOS SANTOS: despite all the predictions that Brexit would disrupt the economic cycle, British businesses like these are biding their time and
eyeing the opportunities that Brexit will bring rather than racing towards the roadblocks. Nina dos Santos, CNN Money, London.
(END VIDEOTAPE)
ASHER: Christian Schulz is the European Economics Director at Citigroup. He joins us live now from London. So Christian, thank you so much for
being with us. Six weeks since that Brexit vote, how is the U.K. economy doing so far?
CHRISTIAN SCHULZ, EUROPEAN ECONOMICS DIRECTOR, CITIGROUP: Not too well. These indicators that Charles Goodhart, for instance, mentioned the
purchasing manager's indices. They dropped very, very sharply and they point in fact, at the moment to recession. Now it's still early days.
They may recovery, but they may not. And then we would get recession, and that would be even worse than the Bank of England is currently predicting.
The good news is the rest of the world is doing relatively well. It's not been shocked as much. Even on the other side of the channel, things are
continuing. That means exporting British companies aren't feeling the heat. In fact, weaker sterling even helps them.
ASHER: And Bank of England, of course, as we all know, cut interest rates to a quarter of 1 percent. What are some of the limits of monetary policy
when it comes to revitalizing an economy?
SCHULZ: Well, the economy is facing an uncertainty shock. The Bank of England, and even fiscal policy couldn't change that uncertainty. What the
government needs to of course, really decide is what is the future relationship with the EU? What is the future relationship with the rest of
the world going to look like in two or three years' time when these negotiations are finished? That's what we need certainty about. That's
still going to take some time. In the meantime, the Bank of England can buy some time and perhaps some tax cuts and spending increases from the
government can also buy some time. What we really need is certainty about the longer term future of U.K. arrangements with the rest of the world.
ASHER: London is of course, as we all know, a financial hub, I'm from there. How will these rate cuts affect the financial sector, do you think?
How do banks grasp onto productivity and get those shareholder return in the wake of this environment where you're seeing a quarter of one percent
interest rates?
SCHULZ: Well, there's plenty of concerns, but the Bank of England isn't in negative territory yet. That would be even more concerning.
[16:20:00] What is happening though of course, is they're cutting short term rates by 25 basis points and they're buying up the longer end of the
curve as well as the longer term borrowing costs are also going to go down. And banks benefit usually from a big
difference between the two, because they borrow at the short end and invest at the long end. If these two interest rates come closer together, their
margins are dropping, their profits potentially drop over the long run. But in the short run we have to remember that low interest rates are good
for banks because they can pass on these. They benefit from low funding costs but the long term loans that they've given out, they don't change, so
there margins in the short term actually improve. So they benefit.
ASHER: All right, Christian Schulz, hanks so much, we appreciate that.
Nike is synonymous with golf. But a major change is coming. You'll not be seeing the iconic Nike swoosh everywhere on the course anymore. We'll have
that story after the break.
(COMMERCIAL BREAK)
[16:21:12] ASHER: The iconic image of Tiger Woods' as Nike-branded golf ball falling into the cup at the 2005 Masters, will not be repeated. Nike
announced that it will stop making golf equipment. Nike will no longer sell golf clubs, bags, and balls. Instead is going to be focusing on shoes
and clothing. Rory McIlroy who has a sponsorship deal with Nike called the decision sad. In the past few minutes Woods actually tweeted that he,
"Couldn't play without clubs, balls and bags or the men & women dedicated to them. Grateful for their hard work and innovation from an amazing Nike
team." Nike is not alone in abandoning golf. Adidas is trying to sell its golf brand including Tailor-Made and Adams. Callaway Golf though is
sticking with the game. Its shares rose more than 6 percent as its rivals walked off the course. Matt Adams is a host of "Fairways of Life" on
Sirius XM radio. I asked him why the golf equipment business is so challenging.
(BEGIN VIDEOTAPE)
MATT ADAMS, HOST, "FAIRWAYS OF LIFE": The business that they're in is the premium end of the marketplace, Zain. What that means is that the size of
the pie, it's an 80/20 rule. That means that 20 percent of those at the top tier are buying 80 percent of the product in that category. So it's
not a pie that's growing any larger. If you're going to increase your market share, you have to take that market share away from someone else.
So when Nike went into the category they declared to the world from the onset, that they intended to dominate. They have not dominated. It
represents about 2 to 3 percent, the hole golf division of their entire business. I think they made a smart business decision in saying, you know
what, we're going to concentrate on where our core skills are. Where we really can apply our artistry. And that's in the apparel and that's in
shoes.
ASHER: But why haven't they dominated? Does this tell us something about participation in the sport? Is it on the decline?
ADAMS: No, participation in the sport is actually on the increase, actually. There was a dip because of the economy when the malaise that
everyone was impacted regardless of the sport or economic field that we were talking about. But it's on the way back. Rounds are up over 2
percent, 2.7 percent year-over-year.
[16:25:00] Last year, and for the year last year, they were up just under 2 percent. So golf is growing across the board in every demographic
including in juniors, which are at their highest level of participation, and millennials, which are at the highest level of participation in more
than 20 years. The reason why you can't see a company that comes in on brand name alone and build in a marketplace is because the marketplace is
so well-established with lines that are already in there that have a reputation for supplying at the top tier, companies like Callaway, like
Taylor-Made, that you had mentioned, which still has a great reputation. They just made a decision to put it up for sale, or Titleist, which also
has a great reputation among the best players. And Keep in mind a couple of years ago that company sold as well. Golf goes through its regular
business cycles just like any other factor or any other sector of the economy. But right now, golf is on the growth. It's on the upswing, which
is contrary to what many of the media outlets are sending messages forth.
ASHER: How do companies like brands like Callaway take advantage of the fact that Nike's leaving now?
ADAMS: Well, believe me, they've got to be excited about it. Even though Nike at their best still represented less than 10 percent of the market
share, can you imagine if you picked up a piece of that, as I mentioned to you earlier. It's a pie that's not growing bigger at the top tier, so you
have to take market share away from somebody else. The way for all these companies to increase sales at the top tier of the companies is through
innovation and through real technology. Because the product cycles have gotten so tight and so narrow. You're talking sometimes as little as three
months. In general, it's about six months to a year. You have to make sure you're constantly innovative with your product. That's also very
expensive to do, which is another reason why companies might not want to get into or in the case of Nike are exiting the segment. But if you're
going to be in there, you have to be sure the stuff you make will be attractive to that very elite demographic and you have to make sure it
works.
(END VIDEOTAPE)
ASHER: With the opening ceremony of the Olympic Games just literally one day away, companies like Nike and Adidas who make the outfits for the
athletes are hoping for some major exposure. Here's our Maggie Lake with more.
(BEGIN VIDEOTAPE)
MAGGIE LAKE CNN CORRESPONDENT (voice-over): Marathon great, Mo Pharaoh will go the difference. Kevin Durant is a slam dunk. And Carli Lloyd's
goal is to win the gold. All will be competing at the Summer Olympics in Rio. And all are signed to Nike. Few companies have more riding on the
success of these games than the sports apparel king.
PATRICK RISHE, PRESIDENT, SPORTSIMPACTS: Nike made a significant investment to be the sponsor or partner for the Rio games. Estimates are
somewhere between 25 and $40 million. It's going to help boost their global visibility as any Olympic partnership would.
LAKE: it's not just super stars that Nike is promoting. This ad featuring female members of India's Olympic team is an internet hit, racking up some
3 million views. But hot on Nike's heels is Adidas, which is spent big bucks on its "Speed Takes" campaign. Upstart Under Armour is also
endorsing hundreds of Rio athletes. New U.S. Olympic committee rules that allow smaller apparel firms greater marketing access to the games could
benefit Under Armour greatly.
RISHE: They're going to have sponsorship of the U.S. gymnastics team. They have athletes on the U.S. soccer team. They are the ones that in my
opinion would stand to benefit the most from a market share perspective. Their sales are highly concentrated in North America. The beauty of the
Olympics is you have this exposure to the rest of the world.
LAKE: Nike and Under Armour have had setbacks on the road to Rio. Top golfer, Rory McIlroy, who signed a massive ten-year deal with Nike, is
pulling out because of Zika fears. So is Jordan Spieth, who signed to Under Armour. And NBA superstar, Stephen Curry is staying home because of
knee problems. His shoe line is one of Under Armour's best performers. The sports apparel rivalry with continue well past Rio. The next three
Olympic games are all in Asia, one of the big global markets for sports brands.
RISHE: Any company, whether it's Nike, whether it's Under Armour, that takes the mantle of being the sponsoring partner of those games, is going
to see a huge benefit, because it's going to really have an impact in the Asian marketplace.
LAKE: The apparel giants will be battling for the gold for years to come. Maggie lake, CNN Money, New York.
(END VIDEOTAPE)
ASHER: From Olympic gold to the commodity of gold. It's one sector that could benefit from the Brexit turmoil. We'll hear from the CEO of a major
gold mining company, that's after the break.
[16:30:00] (COMMERCIAL BREAK)
ASHER: Hello, everyone, I'm Zain Asher. Coming up in the next half hour of QUEST MEANS BUSINESS, a passenger on board the crashed plane in Dubai
tells us how it felt to be on board the burning fuselage.
And Facebook has one simple trick to get clickbait off your news feed. But before that though here are the tip news headlines we are following for you
at this hour.
The Russian Olympic committee says that 271 of its athletes have been cleared to compete at the Rio Olympic games. That is the vast majority
that were awaiting a final decision just one day before the opening ceremony. Russia has been accused of widespread state-sponsored doping
over several years. The International Olympic Committee has yet to confirm the information provided by the Russians. The head of the IOC says there
is no place for cheaters at the Olympics and the anti-doping systems must be improved.
(BEGIN VIDEO CLIP)
THOMAS BACH, PRESIDENT, INTERNATIONAL OLYMPIC COMMITTEE: We all agree that this is a situation we do not want to happen ever again in sport. And
therefore the IOC requested a full review of the anti-doping system. And we are very happy that WADA agrees with this request issued by the Olympic
summit and by the IOC executive board. And we will work closely with WADA to make the anti-doping system worldwide more robust and more efficient.
(END VIDEO CLIP)
ASHER: Police in London say there are no signs that terrorism was a motive in Wednesday's deadly knife attack in the British capital. An American
woman named Darlene Horton was killed. Five people were wounded. The mayor of London's Sadiq Khan told CNN all Londoners should be vigilant.
(BEGIN VIDEO CLIP)
SADIQ KHAN, MAYOR OF LONDON: London is one of the safest capital cities in the world. I'm afraid it's a reality in 2016, especially when you look at
what's happening in Nice, in Paris, in Brussels, in Munich, parts of America, we've always got to be vigilant and never complacent.
(END VIDEO CLIP)
ASHER: And we are awaiting a press conference from U.S. President Barack Obama. He is due to speak any moment now at the pentagon after receiving
an update on his administration's battle against ISIS. Mr. Obama will be taking questions from the press which may give him yet another chance to
take aim, to take slight at Donald Trump.
A court in Istanbul have issued an arrest for Muslin cleric Fethullah Gulen. Turkey says he's the mastermind of last month's attempted coup.
Gulen who lives in the U.S. state of Pennsylvania [16:35:00] denies any involvement whatsoever. Turkey has asked the United States for Gulen's
extradition twice since that attempted coup
[16:35:06] Wall Street was pretty much flat ahead of Friday's July U.S. jobs report. The Dow lost nearly three points, basically flat. Not so
much momentum there, but a strong employment report could boost stocks on Friday. Meantime, investors in Europe appear to be pleased with the Bank
of England's decision to lower interest rates. Markets were up throughout Europe with London leading the way, with a rise of more than 1.5 percent.
The pound fell nearly 1.5 percent on the news. Last traded at 1.31 against the U.S. dollar. It is the sharpest decline since the day after the Brexit
vote. Earlier I spoke with Mark Bristow, CEO of a gold mining company, Randgold Resources. He said that Brexit could eventually be good for his
business following a very difficult second quarter.
(BEGIN VIDEOTAPE)
MARK BRISTOW, CEO, RANDGOLD RESOURCES: You know, I think some of it was operational, Zain. That's just quarter one. Certainly out of the Kibali
and the DRC there were some operational issues. We've had a few management changes which has -- you know, that sort of addresses some of the attention
to detail. Some of it was just, you know, we did a trial run of 100 percent sulfide, preparing for the final ramp-up for the underground mine.
That highlighted some of our gaps in our process which we've attended to. And then the quarter two was really a flow-out on that. So we'll need to
spend a better time getting some of the management issues addressed. It never moves as quickly as possible.
ASHER: How do you anticipate Brexit to actually be a boost of your business, especially as gold becomes a more and more attractive investment
for investors?
BRISTOW: Brexit sort of undressed the emperor. And the challenge, the global economic challenge, particularly out of Europe, is a real challenge.
And this whole issue around the inability to invest money and make a return or just even put your money in a safe place is a worry. And we saw that
worry show itself early in the beginning of 2016. You know, people are now worried, and they're looking for places and assets to invest in which are
more secure than trying to leave your money in paper currency where everyone is trying to get it devalued. So we've seen a pickup in the
interest in gold across the board, not just with the specialist investors. Also diamonds, the physical rare commodities, effectively. And I think
they're going to see that. Property is a good one too that still attracts good investment.
ASHER: You've got the Bank of England cutting interest rates as well. You've got low oil prices. Is now the time for Randgold to really shine?
BRISTOW: Yes, I think it's a good time. I mean, I'm still a bit concerned that this significant volatility in the process ahead of us because of
exactly that. Today we have the Bank of England dropping rates. I mean, materially, they're not really worth much, because the rates are almost
zero anyway. And you've got the Fed talking about increasing rates. And you've got, you know, Japan in a pickle. And then you've got all the
challenges in Europe. And so, you know, I think those things spook the market. And we're going to see some belief and movement. But on the
longer term, what we have in the gold industry is a tightening of supply, because there's just not the same amount of gold being produced and an
increase in demand. And that's always good for the gold price.
(END VIDEOTAPE)
ASHER: All right, still to come here on QUEST MEANS BUSINESS. It's a headline sure to grab the eyeballs of publishers everywhere. Facebook is
changing its news feed algorithms to stamp out clickbait. That's next.
[16:40:00] (COMMERCIAL BREAK)
ASHER: Both candidates in the race for the White House are out on the trail at this hour. Right now as I speak we know that Hillary Clinton and
Donald Trump are very far apart. Miles apart politically, but today there's only about 4500 kilometers between them physically. Hillary
Clinton is out West focusing on economic issues in the swing state of Nevada.
Meantime, Trump is in the Northeast, holding a town hall in Portland, Maine. New polls show Clinton is gaining in three key swing states, New
Hampshire, Pennsylvania, and Michigan. MJ Lee is in Washington for us. So MJ, thank you so much for being with us. As Clinton travels through the
swing state of Nevada, do we expect her to be more focused on policy, more focused on her economic message, or taking aim at Donald Trump?
MJ LEE, CNN POLITICS REPORTER: Keep in mind right after the Democratic National Convention, Hillary Clinton and her and her running mate Tim
Kaine, they went on a three-day bus tour through the Rust Belt states of Pennsylvania and Ohio. And this bus tour was mostly about the economy,
mostly about their proposal on how they're going to create jobs for average Americans.
Now while all of this was happening, we had a bit of a split screen effect where Donald Trump was embroiled in this controversy over the Khans and the
Khan family, the parents of a fallen soldier in the Iraq war, which obviously blew up, and he had to sort of answer to a lot of criticism. The
Clinton campaign believes this is a strategy that works for them, that when they stay focused on their policy issues and especially on the economy, an
issue that is so important in the important region of the Rust Belt, that they can sort of let Trump do what he's doing in terms of being involved in
drama and they should remain very much focused on talking about policy.
So yes, I think that in the coming months, we are going to see the Clinton campaign very laser focused on the issues, especially the economy, because
they know that this is going to be a top topic. And the issue that's on a lot of voters' minds when they go to the polls in November.
ASHER: Clinton, as we go, got a sizable sort of convention bounce, big boost in the polls after the Democratic National Convention. Aside from
sort of staying on message and focusing on policy, what does she do to keep that? What is she do to capitalize on that momentum?
LEE: I was talking to a Clinton aide yesterday, and they're very careful to not sort of overstate and not to, you know, relish in the numbers
they've seen since the convention. They know better than anybody else that historically when a nominee presents herself or himself at the convention,
they are likely to get this post-convention bump. So while they are, you know, probably very happy to see their numbers go up since their convention
in Philadelphia, they know they have a lot of work to do, and they are expecting things to really tighten up again once that convention bump sort
of dies down a little bit.
I think in the meantime, the Clinton campaign is very much focused on working on the issues that she has with voters on issues like honesty and
trust. This is obviously something that has haunted her campaign over the last year. So she knows that that's a problem that she has, especially as
scandals like, you know, the use of her e-mail, private e-mail server at the state department, the way that she handled the Benghazi attack, all
those issues.
[16:45:01] She understands and her campaign understands they've led to this issue that she has with honesty and trust, and that's something that she is
going to have to work on, sort of boosting her image with voters.
ASHER: MJ Lee live for us there, thank you, appreciate that.
After fears that his campaign was lagging way beyond in terms of cash, Donald Trump has nearly caught up with Secretary Clinton after a bumper
month of fundraising, in a joint effort with the Republican Party Trump raised $80 million in July. His campaign says it now has $74 million in
cash. It is closing the gap with the Clinton campaign which has just over $100 million on hand. And Trump's war chest is growing from donations by
small donors. He's still having a tough time getting big checks from wealthy Republicans. Phil Mattingly has the latest on the Trump campaign.
(BEGIN VIDEOTAPE)
DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: The campaign is doing really well. It's never been so well united.
PHIL MATTINGLY CNN CORRESPONDENT (voice-over): Donald Trump pledging unprecedented unity within his campaign after days of turmoil.
TRUMP: I would say right now it's the best in terms of being united than it's been since we began.
MATTINGLY: It's a message echoed by his top advisers, at least publicly, who tell CNN Trump's team is under control.
REINCE RRIEBUS, RNC CHIEF: The campaign is focused. The campaign is moving forward in a positive way.
MATTINGLY: Those sources insist there is frustration within his staff with the candidate getting back on message, Trump putting Hillary Clinton
directly in his crosshairs, attacking his record as Secretary of State.
TRUMP: It was Hillary Clinton that she should get an award from them as the founder of ISIS. That's what it was.
MATTINGLY: And touting his latest fundraising haul.
TRUMP: And we just took in this month, I think it's 80 or $82 million.
MATTINGLY: Despite closing the gap with Clinton, it's proving difficult for Trump to collect checks from the country's top donors. His campaign
war chest trails Clinton's by $20 million.
TRUMP: We're raising a lot of money for the Republican Party. And the money is coming in, we're just doing great. But small contributions. I
think it was $61 each. And few Republicans can do that. Maybe no Republican can do that.
MATTINGLY: And with several Republicans now saying publicly they won't support Trump, including rising GOP star Adam Kinzinger, there's still
great cause for concern within the party.
ADAM KINZINGER, U.S. CONGRESSMAN, ILLINOIS: Donald Trump for me is beginning to cross a lot of red lines of the unforgivable in politics. I'm
not going to support Hillary, but in America we have the right to write somebody in or skip the vote or vote for Mark Kirk in Illinois, for
instance. And that's what it's looking like for me today. I just don't see how I get to Donald Trump anymore.
MATTINGLY: Trump's decision not to endorse House Speaker Paul Ryan in his primary battle infuriated RNC Chair, Reince Priebus. Trump's most stall
word establishment backer. Even Trump's running mate Mike Pence splitting with him, giving Ryan a full throated endorsement.
MIKE PENCE, U.S. REPUBLICAN VICE PRESIDENTIAL CANDIDATE: I'm strongly support Paul Ryan, strongly endorse his reelection He's a longtime friend.
He's a strong conservative leader.
MATTINGLY: In the controversy is leading some top supporters to question Trump's perceived self-sabotage. Newt Gingrich a finalist to be Trump's
running mate, telling "The Washington Post", "Trump is helping Hillary Clinton to win by proving he is more unacceptable than she is."
NEWT GINGRICH, FORMER U.S. HOUSE SPEAKER: In the last couple of weeks he's been remarkably underperforming.
MATTINGLY: Gingrich later backtracking, telling Politico he is, quote, 100 percent for Trump.
(END VIDEOTAPE)
ASHER: Phil Mattingly reporting there.
You will not believe what Facebook is doing. The stunning move that is putting publishers on notice. Yes, the social network is cracking down on
clickbait. Those are the headlines that promise more than the articles behind them actually end up delivering. It is a move with major
consequences as websites rely more and more on visitors coming from Facebook. Brian Stelter has been following this story. So Brian, just
explain to us, what is Facebook's strategy here, what is their end game?
BRIAN STELTER, CNN MONEY SENIOR MEDIA CORRESPONDENT: Trying to get rid of clickbait. Well, what the hell is clickbait? They say it's two things.
They say it's headlines that mislead you intentionally. They exaggerate the story. They also say these are headlines that leave out information on
purpose. Withhold information so you have to click the link. You know, we all know these headlines --
ASHER: Brian I'm so sorry, I have to interrupt you. President Obama is speaking live now at the Pentagon about the fight against ISIS. Let's
listen in
BARACK OBAMA, U.S. PRESIDENT: I want to thank Jerry Carter and Chairman Dunford, who just returned from meeting with our coalition partners in the
Middle East, while hosting us and their continued leadership of our men and women in uniform.
I last updated the American people on our campaign in June shortly after the horrifying attack in Orlando. In the weeks since, we've continued to
be relentless in our fight against ISIL. And on the ground in Syria and Iraq, ISIL continues to lose territory.
[16:50:00] Tragically, however, we have also seen that ISIL still has the ability to direct and inspire attacks. So we've seen terrible bombings in
Iraq and in Jordan, in Lebanon, Saudi Arabia, Yemen, and Afghanistan. Attacks on the Istanbul airport, a restaurant in Bangladesh, Bastille Day
celebrations, and a church in France, and a music festival in Germany. In fact, the decline of ISIL in Syria and Iraq appears to be causing it to
shift to tactics that we've seen before, an even greater emphasis on encouraging high profile terrorist attacks, including in the United States.
As always, our military, diplomatic, intelligence, homeland security, and law enforcement professionals and working around the clock, with other
countries and with communities here at home, to share information and prevent such attacks. And over the years, they've prevented many. But as
we've seen, it is still very difficult to detect and prevent lone actors or small cells of terrorists who are determined to kill the innocent and are
willing to die. And that's why, as we discussed today, we'll keep going after ISIL aggressively across every front of this campaign. Our air
campaign continues to hammer ISIL targets. More than 14,000 strikes so far. More than 100,000 sorties, including those hitting the ISIL corps in
Raqqa and in Mosul.
In stark contrast to ISIL, which uses civilians as human shields, America's armed forces will continue to do everything in our power to avoid civilian
casualties. With our extraordinary technology, we're conducting the most precise air campaign in history. After all, it is the innocent civilians
of Syria and Iraq who are suffering the most. And who need to be saved from ISIL's terror.
And so when there are allegations of civilian casualties, we take them very seriously. We work to find the facts, to be transparent, and to hold
ourselves accountable for doing better in the future. We continue to take on senior ISIL leaders and commanders. This includes ISIL's deputy
minister of war, Basim Muhammad al-Bajari. A top commander in Mosul, Hatim Talib al-Hamduni, and in yet another significant loss for ISIL, its
minister of war, Omar al-Shishani. None of ISIL'S leaders are safe. And we're going to keep going after them.
On the ground in Iraq, local forces keep pushing ISIL back. In a major success, Iraqi forces with coalition support finally liberated Fallujah.
Now they're clearing ISIL fighters from more areas up the Euphrates Valley and Iraqi forces retook the strategic air base at Qayyarah, just 40 miles
from Mosul. Now the last major ISIL stronghold in Iraq.
Given the success, the additional 560 U.S. support personnel that I ordered to Iraq last month will help turn this base into a logistical hub and
launch pad for Iraqi forces as they push into Mosul.
Meanwhile in Syria, a coalition of local forces backed by our special operations forces and airstrikes continues to take the fight to ISIL as
well. The coalition is fighting its way into the town of Manbij, a gateway for ISIL fighters coming in and terrorists heading out to attack Europe,
which is why ISIL was fighting hard to hold it.
As ISIL is beaten back, we're gaining vast amounts of intelligence, thousands of documents, thumb drives, digital files, which we will use to
keep destroying ISIL's networks and stop foreign fighters. We also continue intense fire efforts against Al Qaida in Syria, which, no matter
what name it calls itself, cannot be allowed to maintain a safe haven to train and plot attacks against us. I do want to step back and note the
broader progress that has been made in this campaign so far. Two years ago, ISIL was racing across Iraq to the outskirts of Baghdad itself, and to
many observers ISIL looked invincible.
Since then in Iraq, ISIL has lost at the Manbij Dam, at Tikrit, at Baij, at Sinjar, at Ramadi, at Hit, at Rutba, and now Fallujah.
In Syria, ISIL has lost Kobani and Tal Abyad and the Tishreen Dam and Al Shiddi.
ISIL has lost territory across vast stretches of the border with Turkey and almost all major transit routes in Taraka (ph). And in both of Iraq and
Syria, ISIL has not been able to reclaim any significant territory that they have lost.
So I want to repeat, ISIL has not had a major successful offensive operation in either Syria or Iraq in a full year.
[16:55:00] Even ISIL's leaders know they're going to keep losing. In their message to followers, they're increasingly acknowledging that they may lose
Mosul and Raqqa and ISIL is right. They will lose them. And we'll keep hitting them and pushing them back and driving them out until they do. In
other words, ISIL turns out not to be invincible. They're in fact, inevitably going to be defeated, but we do recognize at the same time that
the situation is complex, and this cannot be solved by military force alone.
That's why last month the United States and countries around the world pledged more than 2 billion dollars in new funds to help Iraqis stabilize
and rebuild their communities.
It's why we're working with Iraq, so that the military campaign to liberate Mosul is matched with humanitarian and political efforts to protect
civilians and promote inclusive governance and development, so ISIL cannot return by exploiting divisions or new grievances.
In Syria, as I've repeatedly said, defeating ISIL and Al-Qaeda requires an end to the civil war, and the Assad regime's brutality against the Syrian
people, which pushes people into the arms of extremists. The regime and its allies continue to violate the cessation of hostilities, including with
vicious attacks on defenseless civilians, medieval sieges against cities like Aleppo, and blocking food from reaching families that are starving.
It is deplorable, and the depravity of the Syrian regime has rightly earned the condemnation of the world.
Russia's direct involvement in these actions over the last several weeks raises very serious questions about their commitment to pulling the
situation back from the brink. The U.S. remains prepared to work with Russia to try to reduce the violence and strengthen our efforts against
ISIL and Al-Qaeda in Syria, but so far Russia has failed to take the necessary steps. Given the deteriorating situation, it is time for Russia
to show that it is serious about pursuing these objectives.
Beyond Syria and Iraq, we'll keep working with allies and partners to go after ISIL wherever it tries to spread. At the request of Libya's
Government of National Accord, we are conducting strikes in support of government aligned forces as they fight to retake Sirte from ISIL, and we
will continue to support the government's efforts to secure their country.
In Afghanistan, one of the reasons that I decided to largely maintain our current force posture was so that we could keep eliminating ISIL's presence
there. And we delivered another blow last month when we took out a top ISIL leader in Afghanistan, Umar Khalifa.
Finally, it should be clear by now, and no one knows this better than our military leaders, that even as we need to crush ISIL on the battlefield,
their military defeat will not be enough.
So long as their twisted ideology persists and drives people to violence, then groups like ISIL will keep emerging. And the international community
will continue to be at risk in getting sucked into the kind of global whack-a-mole, where we're always reacting to the latest threat or a lone
actor.
And that's why we're also working to counter violent extremism more broadly, including the social, economic and political factors that help
fuel groups like ISIL and Al-Qaeda in the first place.
Nothing will do more to discredit ISIL and its phony claims to being a caliphate, then when it loses its base in Raqqa and in Mosul. And we're
going to keep working with partners, including Muslim countries and communities, especially online, to expose ISIL for what they are --
murderers who kill innocent people, including Muslim families and children as they break the Ramadan fast, and who set off bombs in Medina near the
Prophet's Mosque, one of the holiest sites in Islam.
Moreover, we refuse to let terrorists and voices of division undermine the unity and the values of diversity and pluralism that keep our nation
strong.
One of the reasons that America's armed forces are the best in the world is because we draw on the skills and the talents of all of our citizens, from
all backgrounds and faiths, including patriotic Muslim Americans who risk and give their lives for our freedom.
[17:00:00] And I think the entire world was inspired this past Sunday when Muslims across France joined their Catholic neighbors at Mass, and in a
moving display of solidarity, prayed together. The greeting they extended to each other has to be the message we echo in all of our countries in all
of our communities. Peace be with you, and also with you.
Now, before I take some questions, I also want to say a few words on another topic. As our public health experts have been warning for some
time, we are now seeing the first locally transmitted cases of the Zika virus, by mosquitoes, in the continental United States. This was predicted
and predictable. So far we've seen 15 cases in the Miami area. We're taking this extremely seriously.
Our CDC experts are on the ground working shoulder to shoulder with Florida health authorities. There's a very aggressive effort underway to control
mosquitoes there. And pregnant women have been urged to stay away the particular neighborhood that we're we are focused on. We will keep working
as one team, federal, state and local to try to slow and limit the spread of the virus.
END
