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Quest Means Business

Trump Slams Sessions at White House; Stock Markets Roll to Fresh Records; Zuckerberg and Musk Trade A.I. Barbs; Trump Targets Jeff Bezos on Twitter;

Aired July 25, 2017 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[16:00:00] RICHARD QUEST, CNN HOST: Closing bell ringing on Wall Street. No records for the Dow, but there are for the S&P and the Nasdaq. Strong

session in terms of earnings and all sorts of reasons. A good firm gavel, trading is over on a very busy day. It is Tuesday, July 25th.

Tonight, time will tell. Donald Trump says he's yet to decide on the future of his own attorney general.

There's no stopping the stock markets. More records at the close of trade. And robot wars. Elon Musk is questioning Mark Zuckerberg's intelligence on

artificial intelligence.

I'm Richard Quest. Live at the world's financial capital, New York, whereof course, I mean business.

Good Evening. Tonight, a dramatic day in Washington and on Wall Street. Politics and markets seem to go their separate ways with very different

results. We've just seen a knife-edge vote on Capitol Hill where Republicans by the power of the vice president's casting vote agreed to

debate a new measure to repeal Obamacare. All the time there's their own health care plans remain up in the air.

Donald Trump has hailed that vote to begin the debate at a news conference at the White House. And he then again proceed to tear into his own

attorney general, saying he's disappointed work done to stop intelligence leaks.

On your screen, that's Washington, and then you've got the stock market. Because throughout the course of the day, all the markets continue to roll

to pretty much new records. Now the Dow has closed around about 100 points up. The Nasdaq and the S&P 500, they have closed at all-time highs. As

you would expect on QUEST MEANS BUSINESS, you have comprehensive coverage on all sides of the story, the only way, the world news leader, CNN.

We will see what happens time will tell, the words of president Trump as he again attacked his own attorney general. When asked if he planned to fire

Attorney General Sessions, Trump said he's very disappointed, but did not indicate if he had made a decision.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I am disappointed in the attorney general. He should not have recused himself. Almost immediately

after he took office. And if he was going to recuse himself, he should have told me prior to taking office. And I would have quite simply picked

somebody else. So, I think that's a bad thing, not for the president, but for the presidency. I think it's unfair to the presidency. And that's the

way I feel --.

-- I want the attorney general to be much tougher on the leaks from intelligence agencies. Which are leaking like rarely have they ever leaked

before at a very important level. These are intelligence agencies, we cannot have that happen. You know many of my views in addition to that.

That's one of the very important things they have to get on with. I told you before, a very disappointed with the attorney general. But we will see

what happens. Time will tell, time will tell.

(END VIDEO CLIP)

QUEST: Donald Trump's comments on Jeff Sessions, a continuation of a public campaign he's waged against his own attorney general. It was one of

his earliest and most vocal supporters. This morning on Twitter he called sessions very weak for not using his office to investigate Hillary Clinton.

And then the day before another tweet, he called Sessions beleaguered. Last week the president told "The New York Times" he regrets his decision

to hire Sessions in the first place.

(BEGIN VIDEO CLIP)

TRUMP (audio): Sessions should have never recused himself and if he was going to recuse himself, he should have told me before he took the job and

I would have picked somebody else.

(END VIDEO CLIP)

QUEST: Jeremy Diamond is at the White House. Jeremy, weird? Perverse? Bizarre? I mean what adjective does one use to describe a president who is

now campaigning against his own attorney general, without just firing him.

JEREMY DIAMOND, CNN WHITE HOUSE REPORTER: Well I think you could also add to that unclear and vague. The president last week opened this can of

worms by publicly criticizing his attorney general. The man that he picked, a loyal, loyal supporter. One of the first sitting U.S. Senators

to endorse him during the 2016 presidential campaign.

[16:05:08] And last week President Donald Trump began criticizing him, publicly rebuking his attorney general for his decision to recuse himself

from the Russia investigation. And as you noted, that has continued the last two days. Yesterday he called him beleaguered. Today he called him

weak and pressed today during the news conference repeatedly about whether or not Jeff Sessions should resign or whether he intended to force Jeff

Sessions to resign and in effect fire him. The president, once again, refused to provide a clear answer to that. He refused to say whether Jeff

Sessions should do that. Instead saying simply we'll see and reiterating the fact that he's very disappointed in him.

QUEST: All right. So, how does this play out? Because essentially Jeff Sessions is damaged goods. He's well and truly shopped soiled. He clearly

has not enjoyed the confidence of the president. And is it just a matter of waiting for him to take the hint and resign?

DIAMOND: Well so far, Jeff Sessions has offered no indication that he plans to resign. He has continued his work at the top of the Justice

Department. And what's important to note is that Sessions is delivering on a slew of key pieces of the Trump agenda. And so that's the argument that

some Sessions loyalists are making to the president inside the White House as they urge him to try and stop this public rebuke and this embarrassment

that he's putting Sessions through.

QUEST: OK, which bit am I missing here? Which bit does the president not see about how damaging it is to attack your own attorney general when you

have the power to fire him even though that might cause a ruckus within the conservative wing of your own party?

DIAMOND: It's unclear what the president's end game here is. It's unclear what he can draw out of this. This morning he took to Twitter to suggest

that the attorney general should perhaps go after Hillary Clinton, even though he two weeks after the election he said that he did not want his

Justice Department to go after Hillary Clinton. And so, it's unclear what concessions, if possible, he's trying to attract. What's clear is that

Jeff Sessions continues to enjoy strong support on Capitol Hill. A number of Republican Senators putting out statements today in support of the

attorney general and urging the president to back off.

QUEST: Fascinating stuff. Jeremy diamond, thank you, at the White House for us.

Whether it's passive/aggressive morning tweets that we've talked about. Or the flippant remarks to "The New York Times" that you've heard. Donald

Trump would appear to be on a warpath through Washington. And it's a warpath in which he's taking on members of his own staff.

So, here's the White House, let's go from the White House across to the Justice Department where indeed we find Jeff Sessions we've talked about.

As Jeremy and I were discussing. He's already described Sessions as weak and beleaguered.

But then from the Justice Department, it's not a million miles, it's a short little -- over to the Hoover building and the acting director of the

FBI is Andrew McCabe, whose wife once ran as a Democrat. Trump has accused McCabe of being compromised in saying he's biased against him. Oh, but

there's more. From the FBI let's go to foggy bottom and the State Department, right on the other side of Pennsylvania Avenue. And at the

State Department it is Rex Tillerson, the Secretary of State. Now there are reports that Tillerson is frustrated with Trump outbursts. Remember,

this man ran Exxon Mobil. He is well used to running vast corporations with multiple complexities of staffing levels. He thinks Trump's -- or

allegedly -- he thinks Trump's outbursts are unprofessional. And now there is talk of a Rexit. Ryan Lizza is in Washington and joins me now. I put

the same question to you that I did to Jeremy Diamond. I mean what adjective would you like to use to describe the way the president seemingly

wishes to attack his own people?

RYAN LIZZA, CNN POLITICAL ANALYST: It's pretty crazy, Richard. I've never seen anything like this. And I think what gets lost, you know Trump likes

to turn these things into soap operas. He likes to turn these things into these little dramas in Washington. Will he or will he not fire his

attorney general? But Richard, we're talking about the president of the United States undermining the rule of law at the Justice Department.

Think for a second, what his main criticism of the attorney general is. The attorney general followed Justice Department guidelines and said, I

need to recuse myself from this investigation. Because I am part of it.

[16:10:02] And for President Trump, that is unacceptable. Imagine for a second, Richard, if Barack Obama had tweeted, threatened, screamed about

Loretta Lynch, his attorney general, when she didn't quite recuse herself. She did remove herself from some of the key decisions in the Hillary

Clinton email investigation. Barack Obama, on your map further up Pennsylvania, he would be impeached in the House of Representatives

yesterday if that had happened.

QUEST: So, so -- let me jump in quickly. So how does it play out. Because I know that's what -- I travel the world more than most and I know

that people watching are fascinated, horrified, sometimes amazed. But they all want to know how this plays out.

LIZZA: Well it's a great question. I don't really understand how the attorney general can stay on. How can you stay on in one of the most

important jobs in Washington, under these circumstances, where you obviously lost the confidence of the president? On the other hand, not

only Republicans, but quite a few Democrats find this extremely unseemly and see this as an attempt by the president to gain control of an

investigation of himself. Which is by its definition undermining the rule of law.

So, I think, I don't -- the short answer is, I don't see how Sessions stays. On the other hand, he's going to have quite a bit of support not to

resign and to hang in there even by bizarrely Democrats who thought he was Attila the Hun when he was nominated to that position.

QUEST: On this question of why he doesn't just fire Sessions, with which he absolutely has the power to do it, his Attorney General. Now, Rush

Limbaugh on his radio show said you know, Sessions is a good man. There are people coming out of the woodwork saying Sessions, you may not like his

policies, but he's a man of integrity. And there's also this fascinating aspect that Donald Trump is taking on one of the Senate's own. A former

respected long-term Senator.

LIZZA: He's taking on not just this former Senator, so you'll get a lot of support from other Senators who as much as they disagreed with Sessions,

sympathize with the fact that he's actually trying to uphold the rule of law. Actually, trying to play things by the book, even if they disagree

with him on immigration and trade and civil rights and ten different other issue. He's not like Trump in that he's willing to play by the rules.

What is so mind-boggling about this, Richard, is if someone had said to you six months from now, there's going to be a war between Donald Trump and

someone in his administration you never would have guessed Jeff Sessions. Jeff Sessions was the first Senator to sign on with Donald Trump. Jeff

Sessions was Trump before Trump knew what he was. He was the guy who is holding up the banner of the nationalist right in the Republican party,

before Trump came along and started working with him. Grabbed it. So, the frightening thing to me here is Trump cares much more about his personal

issues than he does about any of the policies he was elected to implement. Because Sessions represents those policies.

QUEST: Very glad we had you with us tonight to help us understand this and give us the insight. Thank you, sir, as always.

LIZZA: Thank you.

QUEST: There was a brief moment of unanimity on Capitol Hill in the last hour. The Vietnam War hero, the former presidential candidate and 30-year

veteran of Congress, John McCain entered the Senate floor for the first time since he was diagnosed with brain cancer.

Against doctor's orders, having just had brain surgery 12 days ago, he flew back to Washington, so that he could be there for this vote. The Senator

cast a vote to advance the Republicans' health care plan. And having listened to it, in what can only be described as a scathing criticism at

the state of politics. He then gave one of the most statesman-like speeches that will have been heard on the floor in decades.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R), ARIZONA: Our deliberations can still be important and useful. But I think we'd all agree they haven't been overburdened by

greatness, lately. And right now, they aren't producing much for the American people. Both sides have let this happen. Let's leave the history

of who shot first to the historians. I suspect they'll find we all conspired in our decline, either by deliberate actions or neglect.

[16:15:01] We've all played some role in it. Certainly, I have. Sometimes I'd let my passion rule my reason. Sometimes I made it harder to find

common ground because of something harsh I said to a colleague. Sometimes I wanted to win more for the sake of winning than to achieve a contested

policy.

We are an important check on the powers of the executive. Our consent is necessary. For the president to appoint jurists and powerful government

officials and in many respects, to conduct foreign policy. Whether or not we are of the same party, we are not the president's subordinates. We are

his equal.

Let's see if we can pass something that will be imperfect, full of compromises and not very pleasing to implacable partisans on either side.

But that might provide workable solutions to problems Americans are struggling with today. What have we to lose by trying to work together to

find those solutions? We're not getting done much apart. I don't think any of us feels very proud of our incapacity.

(END VIDEO CLIP)

QUEST: Ryan Nobles is on Capitol Hill at the Senate. All right, Ryan, you don't hear that every day. It was a blockbuster of his speech. Nobody can

take that away. But my question to you is a little more basic. Was anybody listening?

RYAN NOBLES, CNN CORRESPONDENT: Well, Richard, I don't think there's any doubt people were listening. I mean, you could hear a pin drop in the

halls of the Russell Senate office building where I was when the speech was going on and throughout the capital. So, people were listening. Whether

or not they're going to take what John McCain said to heart and then act upon it is a whole other matter.

I think you see a lot of criticism from Democrats of John McCain that even though he gave this passionate speech where he really railed on the process

for the health care bill up until this point and really indirectly took a shot at Senate Majority Leader, Mitch McConnell, he still voted yes to move

this bill to the floor and begin what he even himself described as an imperfect process. So, a lot of times the Senator's rhetoric doesn't often

meet the reality of his actions. And today Democrats applauded him for making this effort to get here. But at the end of the day the reality is

the bill still moved forward.

QUEST: Well, yes, but as he pointed out in his speech, it moves forward with the prospect of coming up with something on a bipartisan basis. Which

may be impossible. But what got me was this refrain -- we have not done anything. Time and again he said we have not done anything. And I suppose

from McCain's point of view, at least this starts the process moving. That with goodwill and comity on both sides, or not, get something done.

NOBLES: Even he pointed out in his speech that likely this bill will fail once it gets on the floor and all the amendments are added and the debate

takes up. It will still not make, make it through and then they get back to regular order and that's when he hopes Democrats can get involved in the

process.

John McCain is really respected on both sides of the aisle. And I think that there is a willingness among probably more than half of Senators on

both the Republican and Democratic sides to come together and get something done. But unfortunately, that doesn't play that well with the constituents

back home. On the ground, the political rhetoric is still at an all-time high and the country remains divided. There really isn't a huge appetite

to work together.

QUEST: Finally, just give our viewers around the world, give the viewers some understanding. So, they're going to debate this bill. Which may or

may not move forward. In which case, they will be left with a repeal-only measure and the replace sometime in the future. Is that the way it looks?

NOBLES: Well that's the bill that they passed today. And that's what got them into this process. But now they really have three options going

forward. They could strike some sort of grand bargain through amendments on the floor where they do the repeal and replacement right now. They

could stay and go down the repeal road. Or they could do what they're calling a skinny repeal, which would remove certain aspects of the

Obamacare legislation, but keep some of the larger provisions in part. Any three of those options are possible. But this could take some time. John

Cornyn, the majority whip from Texas, whose one of the principal players in this, said a few minutes ago, that it may not be until September where they

have a final vote on this. So, it seems as though Mitch McConnell is ready to go down the long road here and try to come up with some sort of a deal

that they can take to a conference with the House.

QUEST: Ryan, good to see you, sir. It's worth remembering in all of this, by the way, that we're talking about 20 percent of the American economy. I

mean this is not small bananas. Thank you, Ryan, good to see you.

NOBLES: Thank you.

QUEST: The markets, the Dow Jones Industrials, well it did eke out a triple-digit gain. No records, about 30 or 40, and we'll take a break when

we come back let's delve into what happened at the markets today.

[16:20:00] (COMMERCIAL BREAK)

QUEST: And the markets in the U.S., two records, the S&P and the Nasdaq. Even though triple digit gains for the Dow, there's no record on that. And

the big jump for the Dow, very close to the all-time high, whilst the S&P - - his impressive the way both the markets, which the Nasdaq had a downbeat start to the day as shares of Alphabet slumped. That was on the back, we

talked about it last night. It couldn't get much tighter than that. Just a one-point gain, a little notch.

Stocks were boosted by earnings, that's what this is all about. There were two big companies, particularly to talk, McDonald's, the fast food company

and Caterpillar, the earth-moving company. McDonald's posted the biggest jump in global sales since 2012. Which is a remarkable comeback after

changing chief executives two years ago. Perhaps a really good indication for McDonald's, the power of the CEO. Caterpillar also delivered better-

than-expected revenue and raised its profits. Both stocks, which are extraordinary for mature stocks, Big Mac and CAT were up 5 percent.

Oil, very quickly mention about the price of oil, oil rose 3.3 percent. Which is the largest gain so far, this year, on the back of the prospect of

Saudi cutting back. Ted Weisberg is the president of Seaport Securities. He joins me now from the New York Stock Exchange. Good to see you, Teddy.

It was all about earnings. But it, as I write in today's newsletter, it proves that there is substance to the market's rally.

TED WEISBERG, PRESIDENT, SEAPORT SECURITIES: I think at the end of the day, I don't think anybody would argue with that, Richard. At the end of

the day it's all about earnings. I don't know how much stock trading is psychological, but where the rubber meets the road, it's the earnings. And

when it comes to earnings, it's the trifecta. It's the bottom line, it's the top line and it's the guidance going forward. And boy when companies

get it right. On all three levels, you see a very positive reaction.

QUEST: And we've seen, there's roughly I saw some numbers this morning, roughly a quarter or so, of the S&P's reported so far, this year. And of

those reporting, three-quarters have beaten expectations on revenue and earnings, which is impressive.

WEISBERG: Yes, it is. But it also interesting, and this week and next week are really we're getting into the sweet spot of the reporting. But up

until now, certainly up until today, it's been sort of a mixed bag. You know we've had some pretty decent earnings. And the stocks have not

reacted positively. Which tends to send a message, that perhaps we're at the upper end of the trading range. Stocks are in general kind of priced

to perfection. And so even though the numbers have been good, you know, they haven't been quite good enough. And so, we've seen a lot of stocks

react negatively until today.

[16:25:05] QUEST: The offensive argument would be that this earnings season's performance is already priced in. And you know --

WEISBERG: Maybe.

QUEST: You're not buying that. You're not buying that. I can see by the look in your face. You're not buying that.

WEISBERG: No, no. But I'll tell you something else, which you didn't hit on. Which I think is actually terribly significant for today. And those

are the comments that came out of the Citi investors' day by Corbett. The numbers that came out from that meeting this morning were pretty

impressive. He's talking about $9 earnings for Citi in 2020. That makes Citi by almost any measure, a $100 stock if what he says is correct. And

that's got the financials going today. And then you had strength in the oils. Yes, we had some good earnings but today the market sort of put it

all together. You had strength in the financials, you had strength in the energy sector, which clearly has been a laggard and then the icing on the

cake clearly were the earnings.

QUEST: Good to see you, sir, thank you. See you down at the exchange. Thank you.

Now let's go to the European markets and the broses across. A quick run around the euro bourses. And you'll see they are all up. Well, they're

all up. London saw the best gains of the day. Across the continent they closed. One important point, Ethos survey in German business morale is

described as euphoric and that suggest as strong recovery ahead. So, the Ethos survey, which everybody follows quite closely, is up strongly. And

those were the European bourses.

Now as you know, regular viewers, you can always rely on me to have a good pair of Church's brogues, not brogues today, but they're still Church's.

They're very comfortable to wear. However, today, shoes that were much in Vogue came from jimmy choo. How about these? A rather fine piece of

footwear. They sell in the shops in New York for $750. The company that makes them is Jimmy Choo and it's just been sold for over $1 billion. And

that's why the stock price closed up 17 percent in London. The buyer is Michael Kors, which did not enjoy the same rebound. In fact, Kors is down

some 18 percent so far, this year. Now look at that. That's where Kors is. And Jimmy Choo, the idea is what hopefully these will add a little bit

of sparkle to Michael Kors in the long run. Somehow, I don't think QUEST MEANS -- I'll stick, I think I'll stick with the brogues. After the break.

(COMMERCIAL BREAK)

[16:30:08] Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. When Elon Musk starts a Twitter war with Mark Zuckerberg.

Five seconds away and says the Facebook founder has a limited knowledge of artificial intelligence. Ouch, that was painful.

President Trump resumed his own Twitter war with Jeff Bezos. But before that this is CNN and on this network the news always comes first.

Donald Trump says he's very disappointed in his Attorney General, Jeff Sessions. He will only say, time will tell, when he was asked if he would

fire the attorney general. Mr. Trump said if the attorney general was going to recuse himself from the Russian investigation he should have told

him prior to taking office and he would have picked someone else.

The U.S. Senate passed a motion that would kickstart the debate on House plan to repeal and replace Obamacare. It barely passed. The vote was 50-

50 and the vice president cast the tiebreaker. The Republicans needed every possible vote, including John McCain, who you see here returning to

the Senate floor shortly after being diagnosed with brain cancer.

U.S. defense officials said a navy ship fired warning shots on Tuesday. They say the Iranian vessel came with 137 meters and did not respond to

warnings. Iran says it frustrated a provocative move by the U.S. ship.

Charlie Gard's parents returned to court a day after abandoning their legal action the treatment of their 11-month old son. They want to bring the

terminally ill baby home. The court has given the family a day to find a medical practitioner to care for Charlie at home.

Barbara Sinatra, the wife of the late singer Frank Sinatra died on Tuesday of natural causes. The 90-year old was surrounded by friends and family at

her in California. The philanthropist will be remembered for the Children's Center she established in 1986. The marriage survived 22 years.

The longest of his four marriages.

A top story tonight, President Trump's attack campaign on his attorney general Jeff Sessions, CNN's senior legal analyst Jeffrey Toobin has more.

Quick fire question. Can Trump fire Sessions?

JEFF TOOBIN, CNN SENIOR LEGAL ANALYST: Absolutely.

QUEST: Why has he not, then?

TOOBIN: I don't -- I thought these were going to be easier? It's an unprecedented situation, we've had presidents fire cabinet members before.

We've had presidents support cabinet members before. But we've never had a situation where he keeps disparaging one. Without making the decision to

fire him.

QUEST: How damaging is this for the attorney general?

TOOBIN: You know, it's peculiar. I mean it's embarrassing, certainly. But he is still the attorney general. He is acting as the attorney

general. He is supervising the department of justice. So, I, I actually, I think it is not as bad as it might seem.

QUEST: But the attorney general in its multifarious roles, obviously a law enforcement role, which the president should have nothing to do with at

all.

TOOBIN: That's the problem here is that the president seems to think that he is the supervisor of the department of justice in every respect. Just

like he's the supervisor of the state department. But the Department of Justice is different, especially when it comes to investigations of the

president himself. There is a tradition of independence. And that's why Sessions, who was a campaign official, recused himself, removed himself.

And that's what Trump is so angry about.

QUEST: But that's the law enforcement side. But there's all those other things that department of justice does. Immigration issues. The building

of the wall. All of these other issues.

TOOBIN: Counterterrorism.

QUEST: Counterterrorism. Matters of true public policy. Now if the A.G. is damaged goods. Does that make it harder for the A.G. to push forward

policies? People simply say, I'm not going to follow, ignore you because you don't have the confidence of the president.

TOOBIN: Yes, I think it is, this is why we have not had a situation like this before. Because when the president disparages a cabinet member, it

limits, it limits his influence in an informal, if not a formal way. But that formal authority is still there, and from everything I've been able to

see, Jeff Sessions is not going to give it up voluntarily.

QUEST: You know you've met Sessions?

TOOBIN: I've met him many times.

QUEST: What sort of man is he?

TOOBIN: An old-fashioned southerner. He's now in his 70s, he was a U.S. senator from Alabama for 20 years. He gave up a very safe senate seat. He

was the president's first, first senator to endorse him. He took a risk by working, by becoming the attorney general. And I think you know, he'll be

darned if he's going to give up this job that he gave up his senate seat for, after just a few months. So, if he leaves, he's going to force the

president to fire him, I think.

[16:35:00] QUEST: That, I see on the horizon, galloping towards us with ever-greater speed, that wonderful phrase "constitutional crisis."

TOOBIN: That's possible. It is more possible with the investigation run by Robert Mueller. I think that's the real concern. That's what Donald

Trump is really angry about. Is the fact that there is a special counsel, a criminal prosecutor looking into his campaign activities. And perhaps

his finances. And for that, he blames Jeff Sessions and for that, that's what the president is really angry about.

QUEST: On the Russia question, the president can clearly pardon, assuming he was reminded to, proactively pardon the head of the investigation.

Everybody for Kushner, Manafort --

TOOBIN: Anyone and everyone.

QUEST: He has absolute power to pardon them from any sort of federal offense from being charged with any federal offense.

TOOBIN: He might have some political fallout.

QUEST: As for himself. Let's go to the weeds of constitutionality.

TOOBIN: Well this is, an interesting and much-debated question in the United States at the moment. Can the president pardon himself? The

constitution is clear that he cannot exempt himself, pardon himself from impeachment, that is the process from removing him from office by the house

of representatives and the senate.

QUEST: While you're answering -- let's look at these pictures, there's the president. Carry on, telling me about him pardoning himself.

TOOBIN: He can't exempt himself from being removed from office if congress would choose to do that. But what is unclear is whether he can exempt

himself from being, from criminal charges. Because the pardon power does not have any explicit limit. But many people believe it's implicit that a

president can't be in effect a judge in his own case and pardon himself. Now there your phrase "constitutional crisis" would certainly come into

play, if the president decided to do that.

QUEST: He's two men, isn't he? He's the president and he's Donald Trump. So, the president could potentially pardon Donald Trump?

TOOBIN: He could. The question of whether the courts would honor it is something that I think the supreme court would ultimately have to deal with

it because it is an unprecedented and unsettled question.

QUEST: Can you believe we're sitting here, six months into the presidency, discussing whether the president is going to pardon himself and how he is

managing to dump a vast amount of dirt on his own attorney general?

TOOBIN: Would you like a list of the things I can't believe we're talking about with the Trump presidency? That is only one of them. This is not

territory we've ever been in before.

QUEST: Come back again.

TOOBIN: I'll be pleased to.

QUEST: As always. Coming up, two tech titans, very public falling out. All about artificial intelligence, who is right, who is the smartest? The

man in the black shirt? Or the man in the gray t-shirt?

[16:40:00] (COMMERCIAL BREAK)

QUEST: Elon Musk and Mark Zuckerberg. Two billionaires, locked in a feud. And the answer of course is -- all about artificial intelligence. They're

squabbling about artificial intelligence. And exactly what it means. And its likely effect. It all began when Mark Zuckerberg said this.

(BEGIN VIDEO CLIP)

MARK ZUCKERBERG, FOUNDER & CEO, FACEBOOK: I'm really optimistic. I'm an optimistic person in general. I think you can build things and the world

gets better. But with A.I. especially, I'm really optimistic. I think people who are naysayers and try to drop these doomsday scenarios, are, I

don't understand it I think it's really negative and in some ways, I actually think it's pretty irresponsible.

((END VIDEO CLIP)

QUEST: Irresponsible, Elon Musk? Laid a charge at Zuckerberg saying, I've spoken to Mark about this his understanding of the subject is limited.

Ouch, that stinging rebuke. Joining me is professor of physics and host of "Sci-Fi Science" on the science channel. Good to see you, sir.

MICHIO KAKU, HOST, "SCI-FI SCIENCE", SCIENCE CHANNEL: Good to be on.

QUEST: Whom do you support, Musk with his doomsday scenario or Zuckerberg with his irresponsible?

KAKU: To understand this, you have to understand love and war. The key to love and war is timing. Timing is everything. So, in the short-term, I

think Mark Zuckerberg is right. On a scale of 20, 30 years, I mean give me a break. Robots have the intelligence of a cockroach. However, in the

long-term as decades roll by, then the words of Elon Musk become more and more prophetic. When the airplane was first invented, it was used for good

to deliver mail, deliver passengers, but then war took place, people began to develop airplanes that could drop bombs.

QUEST: Now in which case Musk is probably right. Because he is prophetically looking toward the long-term dangers are. While Zuckerberg

maybe with the youth of millennialism is just thinking about tomorrow?

KAKU: Well, however you're an entrepreneur, you want to become the next billionaire, because you want to follow Zuckerberg, that's where the action

is going to be. In the next few decades we are talking about the A.I. industry is going to be bigger than the automobile industry today. Think

about that. There's an army of billionaires waiting to be minted if you follow the work of Zuckerberg. However, in the long-term as the decades

roll by, we've to realize that Elon Musk is prophetic. We have to worry about these things.

QUEST: Even though there's no co consensus and it would be very difficult to get an agreement at international levels, should we now be starting to

look for agreement on a proper regulation of A.I.?

KAKU: There's no harm trying. The key turning point in the whole controversy is the question of self-awareness. Robots today do not know

they're robots. That's the bottom line. They have no self-awareness whatsoever. However, in the coming decades, you can foresee the time when

robots become the smart as a mouse, a rabbit, a dog or a cat. And perhaps by the end of the century, as smart as a monkey. At that point, they will

have limited self-awareness, they'll be super strong and at that point, watch out. But we have time. We have several decades to go. And like I

said, billionaires are waiting to be minted. Waiting in the wings. To take, to take artificial intelligence to the marketplace.

QUEST: OK. But looking at that argument, I can't help -- if the killing robots idea, the drone robot, the robot you send out into the field and

will kill anything in its sights.

KAKU: Automatic killing machines. That's a danger today. But they're not self-aware. Now automatic killing machines can recognize the human form.

And if they go berserk, they are just killing machines that will kill humans.

QUEST: Should we ban them?

KAKU: I think there should be regulations, treaties, Stephen Hawking, my colleagues have argued against automatic killing machines that are out of

control but they're not self-aware.

[16:45:00] They're not like Arnold Schwarzenegger who plots and schemes and connives trying to take over humanity. That's the turning point. We do

not have robots who are self-aware.

QUEST: Musk, I hear what you say in terms of who's right now and who's right long-term but I'm left with the feeling of who should I be listening

to?

KAKU: If you're an entrepreneur, listen to Zuckerberg. That's where the money is. If you're a long-term philosopher, worrying about the fate of

humanity, then of course Elon Musk is on to something. Just like the airplane, the bow and arrow, the hammer, all of these inventions were

invented for domestic and good purposes. Later we found out we could use airplanes and bows and arrows for war as well as for good.

QUEST: There's an inevitability that we will use these thing for evil deeds.

KAKU: Unfortunately, every weapon that has ever been invented has been used in warfare. And so Yes, we have to worry about that long-term. Elon

Musk is on to something.

QUEST: Good to see you, sir. Thank you, professor, very good of you to come in.

KAKU: Thank you.

QUEST: Let's stay with billionaires, the Amazon chief executive Jeff Bezos has been the target of President Trump on Twitter. Today he attacked

again. Is fake news "The Washington Post," which Bezos personally owns been used as a lobbying weapon against congress to keep politicians from

looking into Amazon no-tax monopoly?

CNN Money's Dylan Byers is in Los Angeles. The two men obviously know each other. What's behind this, this ad hominin attacks that the president is

doing against Jeff Bezos?

DYLAN BYERS, CNN MONEY SENIOR MEDIA REPORTER: Well, look, first of all let me just say that in terms of accusing "The Washington Post" of fake news,

there's a litany of things that are fake in the three tweets that President Trump put out against "The Washington Post." and against Jeff Bezos.

First of all, the notion that Jeff Bezos has anything to do with "The Washington Post" reporting specifically on this report regarding Trump's

Syria strategy, he has nothing to do with that.

There's nothing fake in that report. That report turns out to be 100 percent accurate. On top of that, the suggestion that Amazon is pushing

some sort of no-tax monopoly is just wrong. In fact, Amazon pays taxes, it collects sales taxes as it has done for several years. So, it's very hard

to sort of read those tweets and find out where, you know, the fake news is in those tweets. It's not in "The Washington Post." as for what's -- yes?

QUEST: Dylan, what's -- I've been asking a lot of people who say what's the point of it all? I mean, is this idea you know, if you attack

eventually people will believe?

BYERS: No. In fact, just the opposite, Richard. I think what's happening here is the more and more you attack, the more you make these sort of empty

threats, the less that the tech community at least is going to pay attention to what the president is saying. He goes after Amazon and Jeff

Bezos, he goes after other tech leaders suggesting there are going to be some sort of ramifications for their business practices. None of this ever

pans out.

And in fact, Dick Costello, the head of Twitter said today, at a certain point, business leaders are going to stop listening to the president of the

United States, if he just starts throwing these grenades everywhere that bear no consequences whatsoever for the tech leaders he's attacking. So,

no, I don't understand the strategy. I don't understand what the move is beyond trying to discredit "The Washington Post" report and convince his

core supporters, which are really only about 30 to 35 percent of the American people, that they can't trust "The Washington Post." Other than

that, I don't see an end game here.

QUEST: Dylan, good to see you, sir.

BYERS: Thank you.

QUEST: The voice behind the famous Muppet has a frog in his throat. Richard Kermit has been fired after three decades in the job.

[16:50:00] (COMMERCIAL BREAK)

QUEST: Green as far as the eye can see. It wasn't only the Dow Jones Industrial average, or the U.S. markets continue to head into the green

with the Nasdaq and the S&P all closing at all-time highs. It's not easy being green, though. Just ask the world's famous Muppet. After almost

three decades of voicing Kermit the frog, the puppeteer, Steve has been replaced. How can you replace Kermit the frog's voice? To find out, we

spoke to CNN's Michael Holmes.

(BEGIN VIDEOTAPE)

MICHAEL HOLMES, CNN CORRESPONDENT, (VOICE-OVER): He's the frog who needs no introduction. For decades Kermit has ruled the puppet world, the lead

Muppet born from the imagination of the legendary Jim Henson, more than 60 years ago. Henson so loved Kermit that he did the voice and the movements

himself until his death in 1990. Then and for the next 27 years this man, Steve Whitmire became the voice and personality of Kermit. When he got the

call, he was thrilled and terrified.

STEVE WHITMIRE, FORMER VOICE OF KERMIT THE FROG: It was really scary and obviously an incredible honor.

HOLMES: The Muppets with Kermit at the helm are a multimillion-dollar business. But Kermit became Whitmire's life. He felt he was Kermit.

WHITMIRE: To try to step into that character, Jim had done Kermit for 35 years, and to try to step into that character was just an awesome

responsibility.

KERMIT, THE FROG: It's not that easy being green.

HOLMES: But Whitmire's dream job ended as a nightmare last year when he told he was being recast, in essence fired from being Kermit.

WHITMIRE: It was absolute shock. It was exactly the same feeling as the moment I was told Jim had died. It was the worst thing that could happen

to this character. It's not the worst thing that can happen to me, although it's pretty bad.

HOLMES: The Muppet studio owned by Disney said the firing was a long time coming. Releasing a statement which says quote, the role of Kermit the

frog is an iconic one that is beloved by fans and we take our responsibility to protect the integrity of that character very seriously.

We raised concerns about Steve's repeated unacceptable business conduct over a period of many years. And he consistently failed to address the

feedback.

The decision to part ways was a difficult one, which was made in consultation with the Henson family and has their full support. There were

allegations, too, from the children of Jim Henson, a son said Whitmire made outrageous demands. A daughter said his performance strayed from what her

father envisioned. Whitmire said he could refute all allegations but chose not to in detail.

WHITMIRE: Most of these things have no basis in truth and I don't want to get into a war of words with the Hensons when the real issue here is

between Disney and I.

HOLMES (on-camera): Do you accept the criticism? Do you think I could have done things differently, I could have listened more --?

WHITMIRE: To the character?

HOLMES: No, to yourself.

WHITMIRE: I don't think so. If anything had been framed to me as your career is on the line over any particular event then I would have paid

attention.

HOLMES (voice-over): Whitmire has been replaced by fellow Muppets performer Matt Vogel. For Whitmire acceptance of reality but he says the

little green frog will always be part of him.

WHITMIRE: I think there are people who will notice, I think Disney knows that the vast majority of people probably won't. I think if it jumps

around on the screen and it's green and it says the right catch phrases.

[16:55:00] Unfortunately, people are going to see it as Kermit.

HOLMES: How Kermit might evolve as that character beloved by children and adults yet to be seen with a new chapter under way. Michael Holmes, CNN,

Atlanta.

(END VIDEOTAPE)

QUEST: And if you want to learn more, watch again, download our show as a podcast, available from all the main providers, you can listen to it at

CNN.com/podcast. I'll have a Profitable Moment after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's Profitable Moment. Very profitable moment on the stock market. As they say in the newsletter, the important thing to note about

what happened today is that the market rally was broad-based, and it had reason and substance to it, the earnings report are good. So, we saw that

with McDonald's, you saw it with Caterpillar. Even yesterday with Alphabet. Revenue was up. Even though the European fine has taken its

toll, this was a broad-based strong summer rally and it happens at the same time that the dollar is strong, the volatility through the VEX index is a

at an all-time low. And the absence of managing to link to Washington's confusion and chaos is what's going to make it all the more impressive.

So, for the time being, at least on the basis of today's market movement. In the height of the summer to have two records, on the S&P and the Nasdaq,

with the Dow almost at a record height, I think it's an impressive performance and speaks volumes for the future. That's QUEST MEANS BUSINESS

for tonight. I'm Richard Quest in New York, whatever you're up to in the hours ahead, I hope it's profitable. We will do it again tomorrow.

END