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Quest Means Business
Regulators Issue Warning as Bitcoin Goes Wild; General Electric Lays Off 12,000 Workers; "The Grand Tour" Team Returns; Mexico Tourism Secretary Says, " We Are Doing Our Best" on NAFTA;
Aired December 07, 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: All right. Closing bell ringing on Wall Street. The market is up. It's a popular ringing tonight from PNM
Resources. Most of the markets have shown gains for the day. And as the hour comes around, one, two, three, solid, solid gavels that bring trading
to a close on Thursday, it's December the 7th.
Tonight, blink and you'll miss it. Bitcoin is the word on every investor's lips. Whether or not you've made it in time.
A power cut at General Electric unit is laying off 12,000 employees.
And gentlemen, start your engines. The Grand Tour team is here in the QUEST MEANS BUSINESS studio.
I'm Richard Quest. Live from the world's financial capital, New York City. Where I me business.
Good evening. Tonight, never mind the Dow. There's only one thing investors are talking about today, the bitcoin boom. And tonight,
regulators tell me investors should be wary. The Nobel-winning economist tells me it looks a lot like a bubble, and all the while bitcoin surges to
record after record. This is how bitcoin is doing right now. Come and have a look. 15,000 -- you can even see it moving while on air, 15,530.
Now, to gain on today alone having put on 12 percent yesterday. Today it's put on 13.5 percent. Again, at 18.52. To remind you, at the start of the
year, one bitcoin was worth around $1,000. So, you've gone from 1,000 through the course of the year. Since then, it has seen growth of more
than one-and-a-half thousand percent.
If that wasn't exciting enough for you today, today's trading has been on another level. Take a look. This is the way just one day of bitcoin -- at
1:00 in the morning, a bitcoin cost $14,000. If you checked the price at 2:00 p.m., it had gone to $15,000. And then another $1,000 at 4:00 p.m.,
two hours after that. And then the price at the moment, as we saw just a second or two ago. The price at the moment, $15,350. So, it's gone from
14 to 15 to 16, to way back down again, way back down. You get the idea. Whichever way we look, bitcoin is now either a bubble or it's the future,
and it's an investor's friend. Paul La Monica is with us. Guru, what do we make of today' trading on bitcoin?
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: You're starting to run out of adjectives, Richard, to describe this rise. And I think the average
investor, of course, has to be worried. The good news for anyone that is buying bitcoin is that cryptocurrencies do seem to be a legitimate form of
payment for the future. And you have the legitimacy that has come from the CME, the CBOE and Nasdaq all saying they're going to start trading futures
on it. That being said, any time you have something run up at this type of pace, it's hyperbolic. It is a bit ridiculous, and you have to question
the validity of this rise and whether or not it could just come crashing down.
QUEST: About six or seven months ago, I had correspondence with somebody, should one by bitcoin. And it was at $3,000 at time. And the person said,
well, it's going to 6 or $7,000, you maybe should think about it in a well- balanced portfolio. Of course, I didn't. As indeed did most of the world. There are also forecasts that say this will go to $40,000, $50,000. And
there are those people who draw the analogy with gold, which is useless metal, unless you believe it's worth something. And they say this could go
to $100,000.
LA MONICA: Yes, I think there is some validity to that notion, that bitcoin, like gold, is worth as much as basically in the eye of the
beholder. And it is not a true commodity l the sense that silver and copper and agricultural commodities are. I think investors just have to be
very careful here, because you and I have lived long enough, and been through this long enough to know that we've been here before and we've
heard this. Dot-coms, how could they ever go down in 1999, because the internet was the wave of the future. That was true, but it was also true
that there were many frothy, unprofitable, unproven internet companies that went under, and didn't survive. Not everything turned out to be Amazon.
[16:05:01] So, I think that's the question here with bitcoin if buying it now.
QUEST: It's the way you access it, as well. Who you buy it from. How you create your bitcoin wallet. Insuring the integrity of your investment.
LA MONICA: Yes. The good news is, and Seth Fiegerman of CNN Tech is a great story right now about how he on a whim at an airport with his wife
decided to buy some bitcoin. You don't have to be one of the people that you see sitting in a server room mining it. You can go to sites like
Coinbase and easily by bitcoin or other cryptocurrency. So, it's not as hard as you might think, but still very risky.
QUEST: Good to see you.
LA MONICA: Thank you.
QUEST: Now leading exchanges on this question of risk, Paul was talking about how the CME and others are going to be trading and listing bitcoin
futures. And now some of Wall Street's biggest banks are worried about that. And in an open letter, the Futures Industries Association, the FIA,
says we remain apprehensive with the lack of transparency and regulation.
The letter was addressed to the Commodity Futures Trading Commission. I spoke to the group's chief market intelligence officer, Andy Busch, who
very much as our guru was saying, this is a case of caveat emptor, the buyer beware.
(BEGIN VIDEOTAPE)
ANDY BUSCH, CHIEF MARKET INTELLIGENCE OFFICER, CFTC: Clearly, they're concerned about systemic and operational and fraud risk. And as our
chairman, the Chairman Giancarlo stated, I mean, bitcoin is unique. It is unlike any commodity we've have seen before. And just to remind everybody,
I mean, the underlying cash market for bitcoin is largely unregulated, and we have limited statutory authority over it. So, I think the big message
that I would love everybody to shout from the mountain tops is this, Richard. Is that investors need to understand the potentially high
volatility and risk in trading these contracts. And that is the truth. That is something that everybody should be really aware of.
QUEST: But the argument -- I'm hearing again and again, it was the decision of the CFTC and almost the -- I'm not saying blessing that was
given, but it was the regulators saying, yes, you can trade options in this thing that the Fed is known to be concerned about. That everybody is
saying is unregulated. That is what is seen as a green light by some. As legitimizing these as legitimate investments.
BUSCH: Well, again, you know, the CFTC is limited in what we can do as far as certifying -- I mean, there's two ways to get a contract. Right. One
is written approval and one is self-certification. And majorities contracts are done under the self-certification process. I mean, there is
-- we, as an agency, we don't endorse or value any of these contracts. That's not our roll. That's not what we do. So, again, what I'm saying
is, is make sure everybody understands this clearly, investors need to know of the high volatility and potential risk that's associated with these
contracts.
QUEST: OK. I hear your official position. But when you personally -- you've been looking at markets a long time. When you look at what'
happening with bitcoin, does it give you -- does it make you feel a bit queasy?
BUSCH: Well, I think as far as people being concerned about it, I think you have to look at it from the --here we are in this amazing explosion of
financial technology. I mean, some people like, you know, venture capitalists, market research say it's digital this and digital everything
and digital bitcoin. And then other people come and say, no, no, no, this is like pets.com. So, what I would say is, like, if you can peer into the
sands of time and tell me which financial innovation is -- mustard seed is going to grow and which will not, you know, my hat is off to you. But as
far as we're concerned, we're not in the business of saying this is a bubble or saying -- or endorsing this contract or valuing it. That's not
what we do.
(END VIDEOTAPE)
QUEST: Now bitcoins not the first, some would say, obscure investment to drive investors wild. Not by a long shot. In the 17th century in Holland,
tulips became so popular, an entire business could be bought with them. The entire country, it was of course, tulip mania and then the prices
crashed overnight.
The 19th century, it was all about gold. A lucky few got rich. Many more died of cholera or watched their investments disappear. And at the end of
the last century, a collection of teddy bears, foxes and cat turn to Ty Warner into a billionaire, the beanie babies bubble.
[16:10:00] So, bubbles are everywhere. Robert Shiller actually wrote the book on bubbles and won the Nobel Prize for his work on how assets are
priced. He told me bitcoin looks a lot like modern-day tulip mania.
(BEGIN VIDEOTAPE)
ROBERT SHILLER, 2013 NOBEL ECONOMICS PRIZE WINNER: Well, it does fit what I think is the poplar definition of a bubble more than anything I've seen
for a while. That it has the psychology of it and the excitement. The story quality that it drives. That makes it an interesting phenomenon.
Now, I think some people might lose a lot of money in it. And so, I don't think it will crash the economy, though.
QUEST: The way in which it has risen so intemperately in the last few weeks -- in the last couple of months. That is something exceptional, even
by bubble standards. .
SHILLER: Right. I think that's right. Yes, stock market bubbles, they grow for years. The other thing is just amazing how it's penetrated
everyone's consciousness. I was just in Russia the other day -- last week -- what did they want to talk about? Bitcoin. It's -- Venezuela is
talking about creating some kind of cryptocurrency. It the excitement of the time. It's just such a great story. Maybe that's another reason why
it's grown so fast. The story is -- it couldn't have done better.
QUEST: Which bit of the story do you liked it way it was created, the fact that it's deregulated. The fact that it's almost peer to peer with all
these computers all over the world, mining these mythical bit coins? Which bit do you like?
SHILLER: Well, you mentioned, there's a number of factors. You know, as I assume any good literature professor will teach you in creating a
successful story. But one thing that strikes me as especially important at this time in history, I think that the world is afraid of computers, as
never before. Because just about any job that you're in, or might be thinking of going into, seems threatened. And the computers are growing so
fast in their abilities that you wonder what will life be like in 10, 20, 30 years. So, people want to be on the winning side. They want to be on
the side of technology and ownership of technology. I think somehow getting involved with bitcoin creates a sense of reassurance about one's
own self-worth.
QUEST: The idea of that, because there are -- I don't think anybody disagrees that taking your point, that a cryptocurrency future is certainly
rosy. I guess the question is, is this the one? Is bitcoin the one that is it? Or is it one of the multifarious -- and there are many of them,
most of which I've never heard of, and couldn't pronounce.
SHILLER: Right. Well, bitcoin was the one with the original story. The first mover. But beyond that, it has a certain era of mystery to it. So,
Satoshi Nakamoto, who has been -- people thought they identified him. No one sure about who he is or whether he even existed. It's one of those
things for a good novel. Mystery novels are very popular. And it's also a story of an individual person with great powers. A superman of sorts.
People love Superman. And we've got another one here. They can imagine that they're part of that by investing in this.
QUEST: And is it relevant, do you think, that it is deregulated? Do you think it is -- do you think a good cryptocurrency -- and perhaps I'm being
a bit sarcastic here -- but a good cryptocurrency by definition has to have a lack of regulation in the traditional sense?
SHILLER: Well, that's part of the definition. When you say crypto, it's almost like an oxymoron. A currency in German is called wahrung, which
means -- comes from the word for truth. And how can it be crypto? So there's an internal contradiction. But that just adds to the excitement
about it. It has kind of a spy versus spy quality to it.
QUEST: Finally, sir, the -- you've written, obviously. You won a Nobel on this work. You've written extensively. Are you excited by the fact that
even after all that's been said and done, a new form of digital bubble, whatever we want to call it, comes right out of the gate and proves your
theories right once again? .
[16:15:00] SHILLER: OK. I don't want to gloat. History has so many examples. We don't need another example.
(END VIDEOTAPE)
QUEST: Robert Shiller joined me earlier.
12,000 workers in GE's electrical power division have lost their jobs. About 18 percent of the unit which produces turbines and generators.
Shares of GE rose. They're up 2 percent. They were the best performing stock in the Dow at one point. They well and truly pared back those gains.
Just 1/4 of a percent up. GE is the worst performer of the 30 stocks in the Dow so far, this year. Paul is back with me. So why are they losing
these jobs in an area that is absolutely crucial? I know GE wants to go into much more internet of things, and medical services. But power,
provision and power generators is crucial to the company.
LA MONICA: Power generators will be crucial to the company. But GE is a firm that overall has probably a lot of room to shrink and downsize.
That's what John Flannery knows, needs to be done. It's a painful decision. But even in the divisions where GE intends to remain relevant
and market leader, I think it can shrink and still be a leader.
QUEST: Those are jobs going in Europe and elsewhere, aren't they?
LA MONICA: That's the big chunk of them, yes.
QUEST: A big chunk of them there. I mean, constantly, at $17 a share, I know you've written about whether GE should even still be in the Dow on the
normal ratio of which you use between the lowest and top of the market. But do people stay -- what is the future for GE?
LA MONICA: The future for GE is going to be one where they have to be serious about just focusing on a few select areas, health care, power is
going to be too. I think, aircraft manufacturing. And they really need to be truly a leader. And they can't just start expanding and becoming a
conglomerate because they want their tentacles I every aspect of the business. Media, they used to be in media and finance. Those days gone
QUEST: Paul, thank you.
LA MONICA: Thank you.
QUEST: As we continue tonight, a high-profile resignation and the threat of a government shutdown. It's no ordinary Thursday in Washington. As
President Trump meets with top two Democrats in Congress. What is there is ordinary about what's coming.
(COMMERCIAL BREAK)
QUEST: Welcome back. QUEST MEANS BUSINESS. A dramatic day on Capitol Hill, Democratic Senators trying to thrash out a budget deal with Donald
Trump only hours after watching one of their colleagues announced he was resign in coming weeks. President Trump has just been meeting with Chuck
and Nancy, and the two top congressional Democrats ahead of a Friday's funding deadline. If that's missed, it would trigger a government
shutdown. Most people don't believe that will happen though. Earlier the Democratic Senator, Al Franken, announced his resignation amid accusations
of sexual misconduct. Franken took some parting shots at the Republican Party, and the U.S. President.
(BEGIN VIDEO CLIP)
[16:20:00] SEN. AL FRANKEN (D), MINNESOTA: I of all people am aware there is some irony in the fact that I am leaving while a man who has bragged on
tape about his history of sexual assault sits in the oval office and a man who has repeatedly prayed on young girls campaigns for the Senate with the
full support of his party.
(END VIDEO CLIP)
QUEST: Ryan Nobles is in Washington. Al Franken -- let's get this out of the way, quickly. Al Franken's departure, because it's a Democratic
governor in Minnesota, won't actually change the composition or the balance of power in the senate, correct?
RYAN NOBLES, CNN WASHINGTON CORRESPONDENT: That's correct. Mark Dayton is the governor of Minnesota, he has the opportunity to appoint a Democrat to
replace Al Franken. They'll have a special election next year to fill out the balance of Franken's term. It's widely assumed that he may appoint his
lieutenant governor to that post, and she may be in that post as just place-holder. But this is basically no harm, no foul, for Democrats. They
keep the same number of Senators in the Senate, which may be part of the reason why they were willing to take the step of calling on Franken to
resign.
QUEST: I heard earlier the suggestion that he might not go if worry more get does get elected next week to the Senate. That could -- you've
obviously heard similar -- I think it might be fanciful suggestions. Wishful thinking, perhaps. What do you make of it?
NOBLES: I mean, the only thing I would say about that is, when you listen to what he said on the Senate floor today, Richard, he does not give a
definite date as to when he's going to step down from his Senate position. He just said that he plans to resign by the end of the year. That would
certainly leave open the possibility that if something happens in Alabama and Roy Moore is the winner, that perhaps Franken can make the case that he
deserves to stay in the Senate. As you mentioned, I think that is a fanciful hope, if that hope even exists for Al Franken. The position for
him has been untenable. More than 30 Democratic Senators have said it's time for him to step down, a I can't imagine he's going to go anywhere but
back to Minnesota.
QUEST: All right, let me put a controversial point that I've been reading. Have the Democrats shot themselves in the foot by forcing out Franken, when
there may have a variety of sack cloth and ashes solutions for his punishment, when Roy Moore might get elected, he will get the backing of
the Republican Party, and there will be no question from Mitch McConnell of maybe unseating Moore.
NOBLES: There is certainly a precedent that's been set here, right? Al Franken was supposed to go through the Senate ethics committee. They were
to issue a report. The Senators were then going to look at that report and then make a decision. That never happened. This was stopped before it
could even get to that point. Now, theoretically, if Roy Moore gets seated in the United States Senate, he would have that through same ethics
investigation. And he would not be expelled until he went through that entire ethics investigation. But Richard, it's important to point out,
even though Roy Moore still has the support of the President, the RNC is still backing him. Cory Gardner, the Senator from Colorado, who is the
head of the powerful National Republican Senate Campaign Committee said today that the NRSE h no intention of helping Roy Moore, and Gardner
himself still believes, and he's a Republican, that Moore should be expelled if he's eventually seated.
QUEST: Quick final one, Ryan, as we run round your busy day in Washington. Likelihood of a shutdown tomorrow?
NOBLES: I think it's pretty unlikely. The encouraging sign is that at least Republicans have all their ducks in a row. They'll get the necessary
votes in both the House and Senate to pass this temporary continuing resolution. It remains to be seen whether or not Democrats will support
it, but they might not need them. The question, though, Richard, is this just kicks the can down the road until the 22nd of December, which could
mean an even more difficult task for the members of Congress.
QUEST: Just before Christmas, as well. Thank you, sir.
NOBLES: Thank you, Richard.
QUEST: Zimbabwe's budget is out. The country is looking for a fresh start into its old finance minister. The first budget of the post-Mugabe era.
The plans are to revive a devastating economy by wooing foreign investors. It says it will relax the rule that forces companies to have 51 percent
local ownership. All civil servants over the age of 65 will have to retire. And there are reports that say the government wants to bring back
Zimbabwe's own currency years after it started using the dollar. Eleni Giokos is in Johannesburg watching over events. I mean, what do we make of
this budget? They have obviously go to be a tentative move. You can't completely turn around the ocean liner in one go. Is it -- are people
saying that they've done enough?
[16:25:00] ELENI GIOKOS, CNNMONEY AFRICA CORRESPONDENT: Well, I mean, I guess there are mixed views right now, Richard. But I mean, they are
saying they are doing what they can, but Patrick Chinamasa, the finance minister, you mentioned, this is a man we have known for a very long time.
He was finance minister from 2013 to around October, pushed out by Mugabe. Then pushed in by the new President. We know what he's capable of, and
this is the concern. Are we actually going to see change on the ground?
Now, the one thing that people were looking at, that 51 percent local content law. That hasn't been totally repealed. It has been amended but
doesn't include the platinum and diamond miners. And people are of the view that if they really wanted to get the right message out to investors,
they should have done away with that law.
QUEST: But the issue, of course, of doing away with that laws one is one of corruption. And if you do away with it completely, do you end up with
all the prize assets being sold off to Zimbabwe's oligarchs, and you just - - unless there is a very strict and strong transparency, regulatory measures put in place that handle a divestiture?
GIOKOS: Well, this is what the government wants to do. It says it wants to ensure there is transparency. It wants to do away with corruption, and
that's why it's getting rid of the fat in government. And remember, that around 85 percent of the budget was going to pay salary. So, we're talking
about a lot of rich people in Zimbabwe right now waiting to buy up as many assets as possible. The government wants to keep track of platinum and
diamonds, because they're some of the largest in the world. And it's obvious that they want to do that. But I think that the more they free up,
Richard, the more they're going to attract investment. And they're even talking about privatization of state-owned Enterprises. And at what cost
is that going to come? I mean, prices are so low right now. They are going to basically sell a lot of assets for a song, they say.
QUEST: Eleni, keep a watch over what's happening in Zimbabwe. Thank you.
America's premier basketball league, the NBA's playing tonight south of the border. The Mexican tourism minister is with me after the break.
(COMMERCIAL BREAK)
[16:30:00] QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. When Mexico's Tourism Secretary will join me in
the C-suite, as the country heads for its most crucial elections in years.
And Clarkson, Hammond and May, they're all here in the QUEST MEANS BUNESS studio as the Grand Tour returns on December the 8th. But which December
the 8th? As we continue tonight, this is CNN. And on this network, the facts always come first.
Palestinians took to the streets in protest a day after President Trump announced the United States would recognize Jerusalem as the capital of
Israel. The protests in the West Bank, Gaza and Jerusalem. Demonstrators gathered in Ramallah, chanted and called for an uprising.
Germany's Social Democrats voted on Thursday to start preliminary coalition talks with Chancellor Angela Merkel's party. The vote could trigger an end
to the country's political deadlock, which has been going on for nearly three weeks. Formal talks likely though, will not begin until the new
year.
A federal judge in Argentina has requested immunity be lifted from the former president Cristina Kirchner. It would allow her to be detained.
Kirchner is being investigated in an alleged coverup of Iran's link to the 1994 bombing of a Jewish center in Buenos Aires. It killed 85 people. She
was granted immunity after her election as Senator in October. She denies the allegations.
The fire danger in Southern California is quite literally off the charts, as ruthless wins continue to fan the flames. Officials had to upgrade
their color-coding system to accommodate the record fire danger score. Four fires now have consumed more than 46,000 hectors in and around Los
Angeles and in nearby Ventura County.
In a few hours from now, the Brooklyn Nets will be tipping off against the Oklahoma City Thunder. And they won't be doing it today in New York,
they'll be playing in Mexico City. It's the 25th anniversary of the first NBA games in Mexico. Which it is all good for Mexico's tourism Secretary,
Enrique de la Madrid, who joins me now in the C-suite. Why did they do it? Why go down to Mexico to have a game that can be held here? It is the
same, I suppose they go to London.
ENRIQUE DE LA MADRID, MEXICAN TOURISM SECRETARY: We have been doing this type events with the Formula One, also with the NFL games in Mexico. So,
we have been branding Mexico and matching the Mexico brand with brands like the Formula One, with the basketball Association. I mean, it's something
good. It's something that helps Mexico to be in the top of mind of people and then help us to bring more tourism to Mexico.
QUEST: Your tourism industry, one of the most important parts of the economy. And yet it's also extremely fragile in many ways now. Not only
for the East and West Coast but buffeted of course by a potential border disputes with the United States. How worried are you?
DE LA MADRID: First of all, just to remember your audience, that we receive close to 40 million tourists a year in Mexico. We're the eighth
most visited country in the world. We were number 15 just four years ago. And we're now number eight. And it's likely we can become number seven.
So, it is -- this is a sector that has been booming.
QUEST: Of that 40 million, how many come from the United States?
DE LA MADRID: At least 60 percent of them.
QUEST: Exactly.
DE LA MADRID: At least 60 percent of people come from the U.S. But ten years ago, it was even higher than that. So, we're also receiving not only
Americans -- which we're happy, very happy to continue to receive. We're receiving people from Argentina, from Colombia, from China, from Japan,
from France, from the U.K.
QUEST: Before we come back to tourism, let us just talk -- you must be worried. The whole Mexican government must be concerned. You've got
elections -- crucial elections next year. NAFTA looks like it is falling apart. And we are now entering that window where if a deal is not done on
the modernization of NAFTA, by next year it will be too late.
DE LA MADRID: Well, I think we should all be concerned. Because in the U.S. there is already six million of jobs that are unfilled. They cannot
be filled up because some of the people here are not matching the type of requirements and qualifications that are required for those jobs. 11
million jobs in the U.S. are here today dependent on NAFTA from Mexico and Canada. So, you could be losing 11 million jobs in the U.S. So, we should
both be worried. Because of course, it's very relevant for us. But it's also very relevant for the U.S. to continue to be competitive in industries
like, for example the automobile industry, electronics and also in farming.
QUEST: Is Mexico prepared for NAFTA to be ditched? For President Trump to say, the negotiations have not been far enough along in they're not deep
enough. You heard the comments from the U.S. trade representative after the last round. That the two sides were very far apart, and frankly, were
not on the same page.
DE LA MADRID: I mean, we're doing our best. We're doing our best in Mexico and Canada to continue to modernize this agreement. We think it's
very positive for the three countries. We will not be the ones getting up from the table. We will continue to try to negotiate.
[16:35:00] But, yes, we're prepared. Why is that? Because precisely because of NAFTA, we had to become a very competitive economy. We're the
sixth largest producer of cars in the world and fourth largest exporter. We're also the sixth most important supplier of supplies for the aerospace
industry. We have become very competitive. And we're willing to continue to compete with the United States to collaborate, but also to go some other
parts of the world and sell our goods and services.
QUEST: If we take a look at Mexico -- back to tourism, that's your area. What is the one thing you now need, besides more tourists, obviously. What
is the one thing you now need? Is it more infrastructure spending? Is it a greater acceptance by government of the importance of tourism? Because
the one thing I've seen over many years of covering tourism is that government talks can talk about it, but your cabinet colleagues don't give
you the support necessary, always, to really have a functioning -- fully functioning industry, to its potential.
DE LA MADRID: Well, that hasn't been my case. I have been getting all of the support from the cabinet people. And what I always stress is not only
to pay attention to the budgets of the minister of tourism, but more airports are good for tourism. More roads good for tourism. Better ports,
is good for tourism. Less diesel requirement, is good for tourism. So, I mean, there is many things that other sectors and other ministries work
that imply benefits for tourism. So, I have had a very good dialogue and collaboration and we are working very well. Again, we pass from number
15th most visited country in the world five years ago, now we're eight today.
QUEST: Good to see you, sir. Thank you.
DE LA MADRID: Thanks a lot, Richard.
QUEST: You might want to stick around and meet your next guest. You probably already know him. Cruising is a very important part of the
tourism industry.
DE LA MADRID: It is.
QUEST: You don't get as many people, of course, as if they get off the ship. You prefer the people to stay there. But when we come back after
the break, they call it the new star of Miami. It is the MSC new star, the Seaside. It set sail on its maiden voyage and the MSC's executive chairman
is here with me. What makes this ship special after the break?
(COMMERCIAL BREAK)
QUEST: QUEST MEANS BUSINESS on a very busy day in the C-suite. MSC cruise is in the midst of an unparalleled expansion. Its state-of-the-art
flagship is called the Seaside. It embarked last week from Trieste in Italy. It's making its way across the Atlantic as we speak. It arrives in
its new home port in Miami. In Miami in December 21, in time for the holidays. The second ship that MSC has christened this year. It hopes to
finally set sail from New York in 2019. The Pierfrancesco Vago, is the executive chairman of MSC joins me. Good to see you. Congratulations,
first of all.
PIERFRANCESCO VAGO, EXECUTIVE CHAIRMAN, MSC CRUISES: Thank you very much.
QUEST: This ship doesn't look like it sort of should. It looks a bit strange.
VAGO: Well, we wanted people to -- when they drive by from Miami downtown to Miami Beach, and when they see all the ships alongside the terminal, to
actually turn around and say, what the hell was that? And that's the idea.
[16:40:03] So, a new platform, a new design, and certainly innovation. Innovation to the cruise industry, innovation to a cruise ship.
QUEST: And its part of a very large expansion into the United States that MSC is doing at the moment.
VAGO: Well, we have, Richard, 12 ships on order. Something like $12 billion investments. And we are the leading cruise line in Europe today.
So, we are now entering the North America market and we want to do it with a big bang.
QUEST: Why? Why would you want to enter this market? I know it could be potentially profitable. But it's also the largest. It's also the most
saturated with all the very large traditional cruise lines. Why aren't you putting more effort towards Asia/China?
VAGO: Because first of all, the penetration is still small. I mean, were talking about 3 percent penetration in the North American market. So that
is more -- especially if we see that cruising is an alternative to a holiday-making, to land-based resorts. So, I think there is still a big
growth coming up in North America. We do expend also in China, but China is taking more time.
QUEST: The battle you're going to have against Disney, against Royal Caribbean, against all the other players. It's going -- on the Caribbean.
The Caribbean you're talking about Mexico, the Mexico coast. It going to be ferocious. And ultimately, your capacity is going to drive down prices.
VAGO: I don't think so, Richard. Because we are a different brand, a European brand. And we offer a different product. So, I think each brand
will offer a different experience. We're introducing the yacht club, the ship within the ship concept. So, it's exclusivity in the world of choice.
So, we have a lot of things to offer, the experience, entertainment. We have a Cirque du Soleil. The exclusivity of having a Cirque du Soleil show
on a ship. So, a different session to the other brands. And like I think, I mean, I still think there is potential for growth.
QUEST: Every time I look at the cruising industry, I'm always somewhat taken aback. The actual number of cruise ships and beds or berths, cabins,
whatever, is much smaller than most people imagine, isn't it? Globally It's only a couple million or whatever. It's much smaller than people even
think.
VAGO: Well, it is. You're absolutely correct. Today in the world -- cruise-goers, 25 million. I mean only 4 billion potential middle-class
holiday-makers, there is still potential of growth. Just in Europe, we half of the penetration that we have a North America. So, were talking
about 6.5 million cruise-goers. So the potential is huge and it's very sustainable. Because year-on-year, even with all of the shipyards being
full and new ships being delivered, we are only talking about 7 percent growth year-on-year. So perfectly sustainable. Per diem's, revenues and
yields are growing, years and years. So, it's a good moment.
QUEST: Good to have you with us, sir.
VAGO: Thank you very much.
QUEST: And we really must bring QUEST MEANS BUSINESS to one of your ships, to the program, live from the deck.
VAGO: That would be an honor --
QUEST: How does that sound?
VAGO: -- and it would be fun. Yes.
QUEST: It would be fun.
VAGO: Looking forward.
QUEST: You'll join us.
VAGO: Absolutely. Thank you, Richard.
QUEST: I won't complain. That how to get a good anchor to cover it. Good, thank you, sir.
When we come back, Amazon's Grand Tour. Let's continue this idea of travel. This time it's the Grand Tour that makes its most important stop
yet. Yes, Jeremy Clarkson, May and Hammond in the QUEST MEANS BUSINESS studio after the break.
(COMMERCIAL BREAK)
[16:45:48] QUEST: Jeremy Clarkson, James May and Richard Hammond say they'll stop making television when it stops being fun. It was the fun and
huge viewership that followed that kept them on air for 22 seasons at the BBC. The controversies from accusations of casual racism to lawsuits filed
by Tesla's boss, Elon Musk, only added to that appeal for "Top Gear" fans.
When the BBC sacked Jeremy Clarkson for punching a producer, Richard Hammond and James May followed him. And all three went to Amazon. The
first season of their new program, their new show, "Grand Tour," took the 3 presenters around the world. Now, season two begins streaming on Amazon in
the coming hours. The exact hour as you will now discover, proved difficult to pin down.
(BEGIN VIDEOTAPE)
QUEST: It launches on Amazon Prime on the 8th.
JEREMY CLARKSON, have a hard time I need a Yes.
QUEST: The 8th where?
CLARKSON: We worked out a long time ago Greenwich Meantime is the time. And there is irritation wherever you go in the world. People have
different idea of what the time is. And we know the time is now. Prerecorded. Half the states at the night.
QUEST: 3:30 in the afternoon.
CLARKSON: Yes, that is the thing you see.
RICHARD HAMMOND, PRESENTER, "GRAND TOUR": But what I want to know is that your pretend tie?
QUEST: All the time.
HAMMOND: See we don't mind indulging this idea, we enjoy it, when we go around the world. They're all pretending it's 5:00 in the morning when it
isn't, really.
CLARKSON: To be honest, it launches on the eighth, yes, we don't know quite how that works, we think it launches at midnight perhaps on the
eighth in the UK, which would of course be 7 PM on the seventh in New York.
HAMMOND: To be very clear were not in charge of pressing buttons. Who does that?
JAMES MAY, PRESENTER, "GRAND TOUR": Also doesn't matter when it launches, in fact it is the whole point of being a streaming service is that you
watch it when you want to.
QUEST: Thank you. At last we get to a modern answer.
MAY: There you go.
CLARKSON: From the world's most modern man.
HAMMOND: Well, out of us three.
QUEST: The difference between series one and series two. Huge speculation in the various media -- besides the fact you're all getting on a year or
two older and there may have been one or two issues of health.
CLARKSON: Th has been some ill health which has delayed the start of the series, but only by a fortnight, but two weeks, which is remarkable.
MAY: And the series wasn't launched at midday on the 12th. That it was the other difference.
QUEST: We have left that behind.
HAMMOND: We have moved on from that.
CLARKSON: I would say -- I mean, one or two elements of season one. Which we're the first to admit, didn't quite work. So, we ditched those and
replaced them with other things which we hope will work. We have enjoyed doing them, so we've now actually got guests that come into our studio,
rather than going on their way. The only reason they died is because the machine and I will admit it I thought of.
HAMMOND: It was a terrible idea.
CLARKSON: We thought we would get them in and they would do something. When we did show one in season one, the machine wasn't ready, so we had to
Kill Jeremy Renner rather than having come and say it's not ready. By the time we did show two, it was ready, but I realized, or I realized it was
rubbish.
HAMMOND: So, we have made some tweaks due to format.
QUEST: Fundamentally, it is the same.
HAMMOND: Yes.
CLARKSON: Yes.
QUEST: Why do you think the three of you, fast cars, doing different things, and trying to push yourselves as hard and fast as possible?
HAMMOND: Look at us, we're irresistible.
MAY: Why do you think what? Why do you think it works?
QUEST: Why do you think it works?
MAY: We don't know. We have no idea.
QUEST: All right. So -- Coca-Cola has a magic for a secret formula. Everybody has been looking at the previous incarnation of "Top Gear" and
now with the grand tour. Everybody has been analyzing what is it that makes it work?
MAY: We analyze it as well and we are as baffled as everybody else. We just don't know.
CLARKSON: It is odd, it is odd. Because you would not necessarily expect three people who look like we do to host a show that is as popular.
HAMMOND: There is no cynicism or science to it, we don't know the answer, all we have ever set out to do is this sounds like really genuinely all we
ever want to do is make the best show that we can. That from the start has been the essence.
[16:50:00] CLARKSON: Simon and Garfunkel. Nobody thought they'll work together, but they did. Page and Plant. They did. You don't know why.
MAY: They were talented.
CLARKSON: Oh, Yes. That's true. You're right. They were talented. We have no talent that we can see between us.
MAY: It could be simply good luck.
QUEST: Oh, no, no. Good luck runs out.
MAY: Or bad luck.
QUEST: Talking about good luck.
HAMMOND: Oh, no.
CLARKSON: You our looking at the wrong man.
QUEST: Exactly. Exactly. How much -- how much do you wish to push your luck?
HAMMOND: I wish to push it at all. Every now and again, things get away from me.
QUEST: This one really was -- on two occasions it's nearly fatal.
HAMMOND: Yes.
CLARKSON: He's talking about.
HAMMOND: I did, he asked me.
MAY: I don't know why we bother to come to these things.
QUEST: One has to give me credit.
CLARKSON: He hurt his knee, and he goes on and on and on. Go on, Richard.
QUEST: Two airlifts.
HAMMOND: Yes.
QUEST: Two airlifts.
MAY: It's just Uber, afar as he's concerned.
CLARKSON: He doesn't know what it's like to get undressed at night. He has an accident, paramedics cut his clothes off. You have forgotten what
it's like to take your own trousers down, haven't you?
HAMMOND: Yes.
QUEST: Have you been warned by family not to do it?
HAMMOND: My wife has suggested that's been two strikes, I'm not going for the third.
QUEST: The third, god help you, third strike and --
HAMMOND: But exactly. Yes.
QUEST: You know how that saying goes. What is the one vehicle -- the one vehicle -- so you can choose any vehicle you like. That you've never
driven that you would like to drive?
HAMMOND: Space rocket.
MAY: Apache attack helicopter.
CLARKSON: I've done that.
HAMMOND: Have you?
CLARKSON: Yes. Done Apache at Fort Benning in Georgia.
HAMMOND: You drove it.
CLARKSON: Well, yes -- flew it. Which is quite clever, since I don't know how to --
QUEST: You in an Apache helicopter.
MAY: I'll have a go in an Apache helicopter.
HAMMOND: I will go with the Apache.
QUEST: You aren't always the first one.
HAMMOND: I said spaceship.
QUEST: Elon Musk we'll get you one that or Richard Branson.
CLARKSON: We'll see.
HAMMOND: Not for that.
CLARKSON: Elon Musk sees you for nearly everything.
MAY: It's gotten frosty in here all of a sudden.
HAMMOND: You didn't have to say that out loud. Yes, I know! Look over there!
QUEST: What is it?
HAMMOND: Exactly.
QUEST: But you haven't answered the question.
CLARKSON: I'm struggling to think, because I have flown, driven almost everything there is.
QUEST: Any vehicle in history at all, you can have. From the penny farthing to the model T to anything at all.
CLARKSON: I even drove Che Guevara's Chevrolet and then set fire to it. And then put it out with a bottle of water that as far as most Cubans are
concerned cost more than the car on fire. I can't honestly -- I've been in almost anything I would dream I have ever wanted to go in.
HAMMOND: Cannon? Can we put you in a cannon?
CLARKSON: The bowel of an Abrams A1 M1 tank.
QUEST: Good, we will settle on that. And there will be a few people --
HAMMOND: I have driven one of those.
CLARKSON: I have driven one of those through the middle of Baghdad, 2003. It was good fun.
QUEST: Gentlemen, finally, this has been extremely successful series one.
MAY: I think it's been going quite well.
QUEST: No, no, no, you're being modest.
MAY: I thought you were talking about this interview, sorry.
HAMMOND: I've been having a lovely time.
QUEST: Series two starts at -- don't, please.
CLARKSON: At some point in the next 48 hours it starts.
HAMMOND: Yes
QUEST: And how long do you intend to keep going doing it?
MAY: It's about 62 minutes.
HAMMOND: Yes.
QUEST: How many years do you think you can keep this up? Traveling the world, doing this program?
CLARKSON: I was saying the other day, if I ever arrive at a corner in somebody else's $400,000 super car, and think, I can't be bothered to fly
this sideways, then it's time to check it in. Or if you write a line and think that will do, it's not funny, not interesting, not clever, but it
will be fine, it will be a noise and go out on the television, then it's time to check it in. But at the moment, I still enjoy flinging somebody
else's super car into a corner and I still enjoy rewriting a line and writing it again and writing it again until it's funny and interesting.
When that goes from you, that's it. John Cleese. That is what he should've done.
HAMMOND: What a note to finish on.
CLARKSON: Well, it is!
MAY: It is not charitable is it?
HAMMOND: OK, you are stuck in there now. Good,
QUEST: Thank you, gentlemen.
HAMMOND: Thank you.
MAY: Thank you.
(END VIDEOTAPE)
QUEST: Reminder, that the "Grand Tour" does the streaming if it does start on Amazon on the 8th of December, somewhere in the world. But as was
pointed out, when you're streaming, it doesn't really matter because you stream it when you want to. You can download our podcast -- you didn't
even see that, seamless robes as I went from one to the other. Available on all of the main providers. You can listen to it at CNN.com/podcast as
well.
One piece of news to bring you. The U.S. House of Representatives has approved a two-week budget resolution, a continuing resolution, that will
fund the U.S. government beyond Friday. The Senate is set to approve it later tonight. What that basically means, of course, is that no immediate
government shutdown. And a longer-term, of course, it is just kicking the can down the road. In two weeks' time, we'll have exactly the same issue
and then it will be even closer to Christmas and the question will be, will they shut it down?
[16:55:00] A solid session for the Dow. The Dow rose up 70 points, and GE shares were up after they announced the layoff of 12,000 workers. But the
big story of the day was bitcoin. And having gone from 13 to 15 to 16,000, the bitcoin then fell back to a mere 15,740.
And that's the way the markets look., We'll have a Profitable Moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment is bitcoin tulip mania for the 21st century, that is what everybody is asking at the moment. Well on this
program you had the man he won the Nobel Prize for Economics, Bob Shiller, talking about bitcoin saying, yes, it certainly looks a bubble, but it
doesn't mean to say that it hasn't got underneath.
And yet I can't help feeling there is something intrinsically wrong with an investment or any form of asset that goes up 12 percent yesterday, another
13 percent today, and since the beginning of the year is up over 1,000 percent, when most of us don't use it, it doesn't have any underlying value
or asset or monetary base. But we have to divorce this from natural prejudice against what seems to be something new and different from the
fact that a cryptic currency is going to come along and maybe bitcoin just go there first. Others will follow on.
And then there is the whole question of regulation of that that. And as you heard on this program, it really is a case of buyer beware. Oh, let me
be honest. I'm as angry with myself as anyone else that I didn't buy bitcoin in April when I probably should have done. I would have had more
money in my pocket now or maybe lost or maybe not.
And that's QUEST MEANS BUSINESS for tonight. You get the idea. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I
hope it's profitable. I will see you at the CNN center tomorrow.
END
