Return to Transcripts main page

Quest Means Business

Markets Rally on Final Trading Day of Q1; Trump Renews Attacks on Amazon; Facebook Cuts Off Data Brokers; Russia Orders 60 Diplomats to Leave. Aired 4-5p ET

Aired March 29, 2018 - 16:00   ET

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

[16:00:00]

(MUSIC PLAYING)

ZAIN ASHER, CNN HOST (voice-over): That was quite the fist pump. That sound marks the end of another trading day on Wall Street. I should also

mention it's the final trading day of the quarter. Let's take a look and see how the market did, up about 300 points or so, led by tech stocks.

It seems as though all of the fears surrounding regulation in tech have actually faded, a buying opportunity. My friends, it is Thursday, the

29th of March. Tonight, rise of the machines. Tech stocks bounce back to end the quarter on a high.

Also Donald Trump has a fresh new attack on Amazon. We'll explain.

And the doctor will lead you now. The White House physician could soon run a huge government department.

Hello, everyone. I'm Zain Asher and this is QUEST MEANS BUSINESS.

(MUSIC PLAYING)

ASHER: Good evening.

Tonight, an extremely turbulent first quarter on Wall Street is coming to an end with a bit of a bang, shall we say. The Dow rallied to a triple-

digit gain at the open and never looked back, finishing just over 300 points higher, the S&P 500 and the Nasdaq also making very impressive

gains, as well. Let's take a look here.

The S&P up 1.5 percent. The Nasdaq up by roughly the same amount, bringing an end to nine straight quarters of gains. In fact, the Dow is down 9

percent off of its all-time high, meaning it just barely avoided closing the first quarter in correction territory.

We are living and dying by tech stocks right now. They've been weighing on everything, weighing everything down all week amid questions over the

future and the data scandal at Facebook, Apple, Amazon, Netflix and Google. Look at that, they all rallied.

And joining me now is Terry Duffy, he's the chairman and CEO of the CME Group.

Terry, thank you so much for being with us.

(CROSSTALK)

ASHER: Right. Even though today looks like a bright day on Wall Street, we still have seen a very, very volatile quarter. In fact we've had two

1,000-point swings.

Are you glad this quarter is behind you?

TERRY DUFFY, CME GROUP: I've got to be honest with you. The volatility is a component of what makes some of the markets move dramatically here and we

are here to manage risk. So it's not such a bad thing for CME Group to see some of the volatility and it's not a surprise, either.

We've seen such historical lows in the bond yields for so long and we've seen historical highs in equities and the markets have set. They're why

fundamentals and geopolitical events have and the markets haven't. So the volatility is no surprise to me whatsoever but that's what we do, we manage

that risk for people on the volatile days like this.

ASHER: To what extent is the market being led and living and dying by tech stocks right now.

DUFFY: By tech stocks?

ASHER: Yes.

DUFFY: Well, you look at tech and you look at financials that are a huge part of the S&P 500, so they'll continually lead the way up and the way

down. So there's no question about it.

They're coming under some scrutiny now, some of the social media companies such as Facebook and others who have avoided regulation are going to have

to have legal issues and things of that nature. So that wanes (sic) on the market to some degree. So that I a bit of a problem, for sure.

ASHER: And looking ahead to the next quarter, what are some of the headwinds that you're concerned about, that you're watching out for, as

well?

DUFFY: Well, I mean, from a headwind standpoint, you have to look at the geopolitical issues that are associated with going on here in the U.S.,

whether it's with trade wars or tariffs of that nature and things like that and where it's going to go.

So the administration has signaled one thing and maybe done another. So I think markets do not like uncertainty either to any fundamental factor but

especially when it comes to trade. So tariffs are something that I think everyone needs to keep a close watch on.

ASHER: Let's talk about this announcement with this merger between CME and NEX. Give us a sense, from your perspective, about the benefits of the

potential merger especially when it comes to reducing trading costs and also lowering risks, too.

DUFFY: Zain, I think when you look at CME being the largest futures exchange in the world and you look at NEX having large OTC presence,

they're such complementary products, especially when it comes to the fixed income trading and on the foreign exchange.

We trade roughly combined between NEX and CME 180 billion of FX notional a day where the overall market is 5 trillion. So you put those two on a

single platform and give the benefits to the clients. You could see some real growth there.

And then when you look at the fixed income side very similar with their broker tech division they have at NEX and then all the Treasuries that we

have here at CME, getting these things on a single platform, this creates the efficiencies in the marketplace. That's what the world demands, not

only in our world but in all sectors of business --

[16:05:00]

DUFFY: -- it's creating more efficiencies for the end user and then obviously, the back end compression services that NEX has today, we think

is a huge benefit to our clients going forward.

ASHER: You're talking about efficiency but certainly in terms of regulators there may be some concerns, especially given the amount of

financial consolidation we've seen in terms of exchanges.

Are you certain that this merger will actually go through?

DUFFY: Yes, Zain, I said this before. This is the first transaction I brought to my board in 10 years of this magnitude. The last time we did a

major transaction was with the New York Mercantile Exchange in '08, which was a $10 billion transaction.

So now I wouldn't bring this to the board if I wasn't advised properly, my board wasn't advised properly that we have good, sound arguments why this

transaction makes sense and why these products are complementary, as I said earlier. So, yes, I am very confident that we'll move forward but we will

look through the regulatory process and we'll do what we need to do to get it done.

ASHER: All right. Terence Duffy, thank you so much for being with us.

DUFFY: Thank you, Zain.

ASHER: Let's continue talking about tech stocks here because Amazon shares, sadly, did not enjoy the same kind of rally as its rivals after

president Donald Trump resumed his attack on the company.

In a Twitter dispatch, take a look here, the president wrote, "I have stated my concerns with Amazon long before the election. Unlike others,

they pay little or no local or state taxes to governments, use our postal system as their delivery boy, causing tremendous loss to the U.S. and are

putting many thousands out retailers out of business."

Amazon shares closed higher after street losses early in the session. They're off about 6 percent since last Thursday. Let's take a look at the

president's tweet point by point, because it's certainly important to fact check this.

The claim, Amazon pays double tax. That was true when Amazon did not have a presence in most states but it is no longer the case. It is true that

Amazon often does not collect sales tax at the city level.

Second, this idea of abusing the postal system, the president was talking about, Amazon pays less per package than you or I would, so it pays less

per package than you or I would but it does pay the same rate of the postal service charge as other box customers.

And third, the destruction of retail. Well, we talked about it a lot on this program and it is true that the rise of Amazon has hurt brick and

mortar shops. But big box stores like Walmart have had a similar effect on smaller stores as well.

Clare Sebastian is joining us live.

Clare, tell us the real reason why the president is going after Amazon?

CLARE SEBASTIAN, CNN CORRESPONDENT: That's what everyone is asking themselves today.

Is it a personality issue?

Does he have a problem with Jeff Bezos?

Certainly we saw that dating back to the early days of the campaign trail, he railed against "The Washington Post." At one point "The Washington

Post" was even banned from covering campaign events. And he's continued with various different grievances that he added during and after the

campaign.

Is it to do with size?

This is one thing that might have rattled shareholders this week, the issue of potential antitrust concerns. That was one of the things that Axios

reported that the president was thinking aloud about on Wednesday.

But I've spoken to experts and people don't really see the issue here because antitrust is law is to protect consumers from higher prices and

less competition. Amazon has lowered prices across the board pretty much and ecommerce is still only about 10 percent of all resale.

Walmart is a much bigger company (INAUDIBLE) and they had double the revenues in the last quarter. So in terms of antitrust under current U.S.

law, it's hard to see what he could actually do.

ASHER: It is also interesting because you would expect, Donald Trump given his background, to be a business friendly president. But with Amazon under

the glare of the president, that's the position no company, Clare, wants to be in.

How do they handle this?

SEBASTIAN: They're saying nothing at the moment. But you're absolutely right, they don't want to be in this position. No company wants to be the

subject of tweets. It's not the kind of publicity they're looking for.

But you're right again, that this is the kind of story that any pro- business, particularly a Republican president, would be proud of. Their business has gone from strength to strength. That's actually an

understatement since Trump took office. The share price has almost doubled.

Jeff Bezos is now the richest man in history. They've moved into new areas -- grocery, health care, now potentially even banking not to mention their

cloud business, which is the leader in the market.

So HQ2 all the cities across America are competing for their second --

(CROSSTALK)

ASHER: -- quite a significant number of jobs, at least 800 jobs so that's something that you and I talked about, that the president really should be

proud of.

SEBASTIAN: Right. So its fulfillment centers is another thing. This is one of the reasons why they now do pay sales tax in all states that have

it, it's because their fulfillment centers are now scattered across America. There's more than 70 of them.

I've been and visited some of these areas where people are competing for these fulfillments and they do have a positive impact on the local economy.

So Amazon is becoming --

[16:10:00]

SEBASTIAN: -- something that consumers are very attached to. It's very incongruous with the point of view of the president.

ASHER: All right, Clare Sebastian, live for us, thank you so much. Appreciate it.

So Clare was talking about the presidential tweets but Amazon is certainly under more threats than just the president's tweets. The company was

forced to pay more tax in Europe, this after the European Commission found the company had benefited from illegal aid in Luxembourg.

In Tokyo earlier this month, regulators raided Amazon's offices. The company also stands accused of financially abusing sellers.

In the U.S., unions have issued complaints about competition after Amazon bought Whole Foods.

Jeffrey Cole says this is a question of sheer size much more than fairness. He is the director of USC's Annenberg Center for the Digital Future.

So, Jeffrey, just walk us through what the president's options are.

If President Trump is obsessed with sort of curbing Amazon's power and influence, what are his options?

Can he actually do anything about it, especially in a free market society?

JEFFREY COLE, USC: Sure. Thank you for having me.

Well, first of all, I don't think the president knows very much about Amazon. I don't think he's a Prime member. I don't think he's ever bought

anything on Amazon. I have absolutely no doubt, this is because Jeff Bezos, not Amazon but Jeff Bezos owns "The Washington Post," who he accuses

of fake news.

So but he does have lots of options at his disposal. This is a company bigger than the Bell system was when the Justice Department broke it up, a

company bigger than Microsoft when they were forced to get rid of Internet Explorer.

So he has lots of options. They are guilty of being big. They really do want to take over the world and put everybody out of business.

(CROSSTALK)

ASHER: So what you're saying, though, Jeffrey, is that this is, in terms of the motivation, I guess, this is largely personal between Donald Trump

and Jeff Bezos because he owns "The Washington Post"?

COLE: Absolutely and this is exactly what's not supposed to happen in these kinds of matters. But he does have options. You could break up

Amazon. You could have them lop off Amazon web services. You could have them lop off devices.

But this is -- they really are a victim of their own success. They've been better than everyone else at what they do. It has taken a toll along the

way. They pay less wages than comparable retailers but I don't think they do anything that any competitive company wouldn't do or wouldn't be proud

of.

ASHER: Does it surprise you, though, that the president is tweeting about Amazon not paying its fair share of taxes when this is a president who, A,

is very pro-business in terms of that aspect of the Republican agenda but also just signed off on one of the largest tax cuts in 30 years?

COLE: And I would also think the president would want to really think hard before he accused everyone of not paying their fair part of taxes,

certainly a charge he's guilty of.

But no, Amazon, absolutely, up until they decided that they needed to put distribution centers in states and the only way they could do that was

paying state sales tax, they absolutely were guilty of that. Consumers took advantage of it. They weren't disadvantaged.

It was states. But they're now, by and large, paying their way. Some of their third-party merchants don't charge tax but that's a charge that just

doesn't apply. And, incidentally, neither does the taking advantage of the postal service.

Amazon keeps the U.S. Postal Service working on Sundays. They've turned out to be one of the best friends the really troubled postal service has.

ASHER: Yes, Amazon is a huge, huge business for the U.S. Postal Service. But just quickly, in terms of collecting taxes from third-party sellers,

how much revenue is the U.S. government missing out on because the government -- because Amazon, rather, does not collect taxes for most

third-party sellers?

COLE: The best estimates is the total amount of the taxes would come to less than $1 billion, somewhere between half a billion and a billion, is

our best guess.

ASHER: So, Jeffrey, I do want to pivot slightly because we just got sound from the CEO of Apple, Tim Cook, regarding Facebook and privacy and that

issue and we will also hear something that Steve Jobs said previously. Let's listen.

(BEGIN VIDEO CLIP)

TIM COOK, CEO, APPLE: This is something we've always felt, you know

UNIDENTIFIED FEMALE: Mark Zuckerberg, what would you do?

COOK: What would I do?

I wouldn't be in this situation.

STEVE JOBS, FOUNDER, APPLE: Privacy means people know what they're signing up for in plain English and repeatedly. That's what it means. I'm an

optimist.

[16:15:00]

JOBS: I believe people are smart. And some people want to share more data than other people do. Ask them. Ask them every time.

(END VIDEO CLIP)

ASHER: So they're both talking about this issue of privacy, you know, this issue of privacy that has really plagued Facebook over the past few days.

So when people talk about the fact that it is free to sign up for a Facebook account but it is not free because you're essentially paying with

your personal data, how much regulation do you think is in store for Facebook over the next few years?

COLE: I think Facebook is about to endure a world of pain. It has really been sort of a golden road since it was founded in the dorm room in

Harvard. And I think now is where they're going to have to grow up and join the real world.

And you're absolutely right. We get this extraordinary benefit for free. But we need to understand what it is we're getting into.

We could start with privacy statements not written by lawyers for lawyers, that people really could understand. But I think the next couple of years,

Mark Zuckerberg can count on being in front of Congress and the European Union a lot and really being contrite.

ASHER: A lot of people, though, say, that it is also the user's fault partially because you still have to know, when you click agree in terms of

the terms and conditions, you still have to know or you should know what you are signing up for.

Jeffrey Cole, we have to leave it there.

Thank you so much.

COLE: Thank you.

ASHER: Still to come here on QUEST MEANS BUSINESS, a wild first quarter of trading is now coming to an end. The day brought us a strong rally on the

Dow. It was up over 300 points. We'll be live for you at the stock exchange -- next.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

ASHER: All right. Some news to bring you that we just got in the past two hours or so, Russia is retaliating against the United States for expelling

its diplomats. It's expelling 60 U.S. diplomats, mostly from the U.S. embassy in Moscow. Let's bring in Phil Black, who's joining us live now

from Moscow.

So, Phil, this sort of tit-for-tat continues.

Russia's retaliation today is basically in line with what we had been expecting; however, how much more serious could the escalation get, do you

think?

PHIL BLACK, CNN CORRESPONDENT: Russia's move is an interesting one, Zain. It has chosen to match, but at this point, not escalate. You're right,

tit-for-tat, one to one, the Russians are calling it the principle of reciprocity.

But they do say they reserve the right to take further action if the other countries, it's expressly pointing to the United States, does so first or

does so as well. So it could be that this particular phase of the degradation in relations between Russia and the West has come to an end.

It may --

[16:20:00]

BLACK: -- have drawn a line under this for the moment. The Russians are saying they're not going move again unless someone else moves against them

first and, of course, America, Britain, their many allies, they have also said they reserve the right to take further action. So Russia is

essentially saying the ball is in your court.

ASHER: So in terms of Russia thinking twice, this is really the goal of Theresa May and the European allies that are joining her, that the Russia

thinking twice about engaging in these aggressive tactics that it has been accused of -- you think Sergei Skripal and his daughter -- I believe one

of them is still in critical condition -- will this ordeal, this tit-for- tat, this potential escalation force the Russians to think twice next time though?

BLACK: That's the supposed goal in all of this, to get Russia to change its behavior. Russia will say and has said many times that there's nothing

wrong with its behavior. It denies any involvement in the Skripal affair. It believes that it's been unfairly accused, that it's the victim, that

it's the victim of an injustice, unfairly accused, its denials ignored, no evidence produced and now Britain and the United States, it says have

pressured their allies to essentially gang up on Russia very publicly in this way.

There is nothing no sign publicly in what they are saying that they are prepared to reconsider. Indeed, they continue to reject all of the

assertions that have been made against Moscow and Russia in recent weeks.

ASHER: Phil Black, live for us there. Thank you so much.

I want to turn now to Wall Street, because Thursday's rally was certainly a very small consolation prize for investors on the last day of an extremely

volatile trading quarter. Let's take a look at the chart because the euphoria about tax cuts turned to despair over tariffs and tech as well.

The

Dow ends the quarter down 2 percent, putting an end to nine straight quarters of wins. It ends the quarter down 2 percent. The Dow is off a

whopping 9 percent and the highs at the end of January. The Nasdaq was the only major index to finish the first quarter in the green.

Where is the Nasdaq?

It is the red line, it's the first one to finish the quarter -- the only one, rather, to finish the quarter in the green.

Tim Anderson is managing director at TJM Investments and he joins us live now.

So, Tim, we talked about this quarter. In terms of the next quarter, what are the headwinds you're looking at?

Is it potential fears of a trade war?

Is it regulation pressure in terms of tech stocks?

What are you looking at?

TIM ANDERSON, TJM INVESTMENTS: You know, I really think that the selling in response to the trade war fears has been very emotional and very

overdone to the sell side. We're talking about putting tariffs on 60 billion of goods that we import from China. That's just over 10 percent of

everything that we import from China.

They responded by saying they're going to put tariffs on 3 billion of what we send them. That's a very small fraction of what we send them.

Could it all escalate?

Of course, it could. But I think that that's been really overplayed to the down side. Now there's been some technical damage to the market. There's

no doubt. We had vey exaggerated gains toward the end of last year and through January.

So tech especially, momentum tech --

(CROSSTALK)

ASHER: Wait, hold on, Tim, when you say it's been overplayed to the downside do you mean that you think that -- and this is what some people

have said, that this is just a negotiating tactic by Trump, that it actually will not escalate to that point.

Do you think you don't see it?

And if it does escalate, you don't think it will have that much of an impact on the U.S. economy?

What do you mean when you say it's been overexaggerated to the down side?

ANDERSON: I just think that the selling in response to the -- there's been a number of reasons why we've had selling in the last four to six weeks.

But the tariff issue, I think, has gotten very emotional. And I think that that has been exaggerated beyond what the reality would be, were these

tariffs to really come into effect.

And I think that, to allude to what you just said, most of it is setting up a negotiating tactic with both Mexico and Canada regarding NAFTA and with

the Chinese regarding both our own trade policies with the Chinese and regarding the future negotiations we might have with North Korea.

ASHER: All right. Tim Anderson, pleasure talking with you. Enjoy your weekend. Have a great one, thank you so much for being with us.

OK. Still to come here on QUEST MEANS BUSINESS, European shares ended Thursday's session higher. Barclays shares closed flat in London. The

bank has actually agreed to pay $2 billion in the U.S. --

[16:25:00]

ASHER: -- over accusations that it misled investors in the runup to the financial crisis. Shares of Europe's biggest automakers rose after reports

of a possible merger between Renault and Nissan. Renault stock closed 6 percent higher in Paris.

And with the end of the quarter, join us tomorrow night for Richard's first quarterly report. We'll wrap up the live event of the last three months

and tell you what to look for in the second quarter.

Same time and same place, only right here on CNN. And when we return, time to hang out bunting and put the kettle on, Britain's Brexiteers celebrate a

landmark on the road to separation from Europe. We'll look at what's in the bag and what still needs to be done. That's next.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

ASHER (voice-over): Hello, everyone. I'm Zain Asher.

Coming up in the next half hour of QUEST MEANS BUSINESS, we'll meet the group funded by George Soros that's trying to stop Brexit at the last

minute. And he's a distinguished veteran (INAUDIBLE) doctor. Now Donald Trump thinks the White House physician can lead hundreds of thousands of

government employees.

But first, though, these are the headlines we are following for you at this hour.

(HEADLINES)

[16:30:00] ZAIN ASHER, HOST, QUEST MEANS BUSINESS: Final agreement can be reached by the deadline -- the European Union is now just one year away,

both sides are still negotiating final deal to the breakup.

British Prime Minister Theresa May says she's optimistic a final agreement can be reached by the deadline despite some -- despite some issues that

remain.

Still, as I mentioned, Britain has one year to leave the EU and as it prepares to leave, let's talk about what has been agreed, what has Theresa

May come to an agreement with the EU on.

First of all, let's talk about the so-called -- and just opened my suitcase. Let's talk about the first so-called Divorce bill. It is a

payment to the EU of 37 pounds -- 37 billion pounds rather or nearly $52 billion, that's been agreed upon which Cameron said we go.

Also Theresa May has secured the rights of EU citizens in Europe and Britain in the EU as well. She secured their right as well. And she has

secured a 21-month -- here we go, a 21-month transition period to sign a trade deal so Britain doesn't fall off a cliff hedge next year.

Let's talk about what she still needs to do. What she still needs to do in the next year or so, she also still needs to resolve the tricky issue of

Ireland. So Northern Ireland is leaving the EU, the Republic of Ireland is staying.

The big question is and the challenge is to how to avoid a harder border between the two. Then there's a race against time to sign a trade deal

which is the crucial part of the process, of course.

Then there's the final deal, still have to ratified by the U.K. parliament and the member states as well. And then of course, you have the thorny

issues of Britain's membership of EU agencies.

Everything from aviation and data protection. We still do not have an immigration policy post-Brexit and we still do not know all sorts of custom

checks are needed on our borders.

Hard core remains of borders are still holding out hope that the process could be stopped completely if only the other side would listen. Here's

our Lisa Suarez with more.

(BEGIN VIDEOTAPE)

LISA SUAREZ, CNN RESEARCH LIBRARIAN (voice-over): It's a Thursday evening and at this local community center in Birmingham, a last ditch effort to

stop Brexit is underway.

UNIDENTIFIED FEMALE: We just want to be a part, close to the family, in case if you don't want to be, I've learned to be on our own.

UNIDENTIFIED MALE: A lot of it makes sense.

SUAREZ: It may sound like a therapy session for the losing side.

UNIDENTIFIED MALE: But Brexit is brought out the worst in certain section of the British people. We're not like that.

UNIDENTIFIED MALE: It can mean a number of things really if --

SUAREZ: But they are here to learn how to persuade their friends, their neighbors and elected officials to support a new vote on the final Brexit

deal.

UNIDENTIFIED FEMALE: We have to build the bridges in this country to get to a point where we all back a public vote on the deal.

SUAREZ (on camera): Eloise Todd(ph) heads this to Britain. That we've recently received a $700,000 donation from billionaire investor George

Soros to hold sessions like the one in Birmingham up and down the country.

UNIDENTIFIED FEMALE: Rather than just talking to people that might have faced it a different way, and telling people facts and figures is about

opening up a conversation and trying to understand, well, actually tell me about why you voted to leave the European Union?

UNIDENTIFIED FEMALE: It's not safe, we won't go over --

SUAREZ (voice-over): And the first step to changing someone's mind, well, get inside of it. Participants pair up, one person argues the leave side

here --

UNIDENTIFIED FEMALE: They're always telling us what to do, telling -- we want to make our own laws.

UNIDENTIFIED FEMALE: Well, we are making our own laws.

SUAREZ: And the others tries to persuade them to stay in the EU is the best solution.

UNIDENTIFIED FEMALE: We are part of it, we are shaping its future.

UNIDENTIFIED MALE: The market just doesn't stop, it's not one single point in time.

SUAREZ: And the issue brought up most, I believe role players -- immigration.

UNIDENTIFIED FEMALE: Thinking Polish, I mean, I don't want to get inside of there, he does exceptional, who speak in English.

SUAREZ: Truly, campaigners say the idea of a public vote on the final Brexit deal would threaten democracy in Britain.

UNIDENTIFIED MALE: People knew exactly what they were voting for. They were voting to bring back control from overseas, unelected bureaucracy back

to this country so that we could invoke our own laws, our own trade deals and take control of our own immigration policy.

Of course, it's technical detail to go through. But people knew what they were voting for and they voted to leave.

SUAREZ: Anti-immigrant sentiment drove people to the polls and this passed the country during the 2016 referendum. The region called the West

Midlands voted for Brexit by 60 to 40 margin.

But a January survey conducted by "The Guardian" found the region would be nearly evenly split if a new vote were held today. But Eloise Todd(ph)

says down to scrapping it now that the details of the deal are starting to merge.

[16:35:00] UNIDENTIFIED FEMALE: It's really important that people in this country know that we still have a choice. And in terms of the democratic

nature of this, it's not democratic to give any government a blank check.

SUAREZ: Lisa Suarez, CNN, London.

(END VIDEOTAPE)

ASHER: The economic prospects of Britain after Brexit remain equally unclear. Yvonne Bendinger is the executive director of the European

American Chamber of Commerce, she joins us live now in New York.

So Yvonne, I remember on the 23rd of June, 2016, Britain voted to leave the EU. There were a lot of people at the time who were program main, who

believed that this was going to be devastating to the U.K. economy.

Even though we've seen slower growth compared to other G7 countries, it has not been as bad as some people at the time had predicted. Why is that?

YVONNE BENDINGER, EXECUTIVE DIRECTOR, EUROPEAN AMERICAN CHAMBER OF COMMERCE: Mainly because nothing has happened yet, we're still

negotiating, we have made some progress in the negotiations.

We have an agreement on -- all right, some partial agreement, I should say on citizens, how we're dealing with each other, citizens, can they stay? Do

they have to leave Britain at a certain point in their career which is a major issue for our members.

Then the actual, you know, negotiation about what is going to happen after, it's still ongoing, so people in view of helping, you know, educate people

on the process and make sure that they're not going to make any, you know, slashed decisions and make even for moves that they later regret.

So right now, we are -- we see most people still in a hold position and seeing what's going to happen next.

ASHER: OK, so it's a wait-and-see approach and you expect that to continue over the next year?

BENDINGER: I would say at least for the next six months.

ASHER: OK, so what is the level if you can raise the level of uncertainty in the business environment in terms of outside companies wanting to do

business in the U.K. What would -- how would you rate the level of uncertainty?

BENDINGER: The level of uncertainty is very high. We just heard a survey done by EY that -- you know, I actually have the figures. That most

companies hold position, but they're expecting that in the three-year horizon, that things will become more challenging.

And by 2020, the research shows that 50 percent of foreign companies will start moving assets out of the U.K.

ASHER: And we've seen a handful of business already move their headquarters or move part of their headquarters outside London to other

European capitals. Do you anticipate that trend is going to continue?

If so what will be the effect on U.K. economy, on London as being the sort of the European financial center.

BENDINGER: They -- I mean, there will be an agreement on the -- for the financial service industry with the European Union. So it won't be that

British banks won't be able to do business in Europe anymore.

I mean, Swiss banks do business in Europe and so do American banks. So there will be agreements that will be negotiated. But it's not going to be

the same as the current situation.

For example, for a fund manager, there's a passporting system, United States did them, you won't have a passport. So things will change in terms

of how business is being done. But Britain is not going to fall off of a cliff.

And I think the reason why people are in hold position is also related to the fact that nothing has happened so far. So --

ASHER: Just wait-and-see approach.

BENDINGER: Yes.

ASHER: All right, Yvonne Bendinger, thank you so much for being with us, appreciate that.

BENDINGER: You're quite welcome --

ASHER: OK, so pretenders are coming to the top of the second largest apartment in the United States. Government -- Trump -- you know what they

said, the White House doctor to head Veterans Affairs, but it's Ronny Jackson, is he ready to lead 280,000 employees.

We'll talk about that next.

[16:40:00] (COMMERCIAL BREAK)

ASHER: Welcome back. So Donald Trump just a few hours ago made his first and only major appearance of this unusually uncharacteristically quiet

week. He's out of the Washington swamp and he was pushing infrastructure in Ohio, this especially just a short time ago.

There he is about to take the podium, soon, he's going to be landing in Florida where he's going to be spending the Easter holiday at Mar-a-Lago,

that is where we actually find our Kaitlan Collins.

So Kaitlan, just start with this news that we got a short time ago, and that is this idea that Trump is actually being told that he doesn't need a

communications director and he doesn't need a chief of staff.

We have spoken quite a bit over the past few weeks about this idea that, listen, John Kelly could actually be next on the chopping block. Is this a

sure sign that that might be the case?

KAITLAN COLLINS, CNN: He's certainly been on thin ice, that's getting a change a little bit, solidify even some. But certainly, that's the advice

that the president is getting from his outside advisors that he may not need to pick another chief of staff if John Kelly does leave the

administration.

And the same with who picks -- who ended her tenure at the White House this week. We saw the president bid her goodbye today as he did leave the White

House and boarded Marine 1 to head to Cleveland to give that speech.

But that's the advice he's getting from the outside. It's not clear that the president is by any stretch of the imagination ready to get rid of John

Kelly just yet. But it's certainly, it's something he's taking into consideration and not an idea that he's rejected windows outside advisors

have proposed to the president.

And it's not all that shocking because this is a president who often prefers to have free willing, flamboyant style that he had when he was just

a businessman before he became president. And it certainly wouldn't be that surprising if it was something he decided to implement now.

And back a few weeks ago, when the president was considering replacing John Kelly, the only reason his staffers and his advisors believed that he

hadn't gotten rid of him yet was because there was no clear replacement for John Kelly as there was when he replaced Reince Priebus as his former chief

of staff.

So that is where we are right now. But it does certainly give you some insight to what the president is thinking as he is dealing with many

shakeups in his administration just with his VA secretary yesterday firing him and deciding to replace him with the White House physician Dr. Ronny

Jackson.

ASHER: Actually, we're going to get into all of that with our next guest, but just going back to John Kelly, Kaitlan, how important is a chief of

staff and what changes if Donald Trump doesn't have one?

COLLINS: Well, it depends on what kind of the president is. The typical president, they listen and defer a lot of management responsibility to

their chief of staff.

But President Trump is not that kind of president by any stretch of the imagination. He likes to take matters into his own hands and he's actually

involved on very small decisions that typically a president wouldn't be involved in.

And we've also seen the relationship between Trump and John Kelly change. When John Kelly first entered the West Wing last Summer, Trump deferred to

him for a lot of decision really letting him take the reins.

But he has been frustrated with the coverage suggests that John Kelly Is controlling the way that the levers are moving inside the West Wing, and

he's been very frustrated with that and he's even started going around John Kelly during his calls with foreign leaders and during policy decisions.

So we're seeing John Kelly lose a lot of the power that he once wielded in the West Wing, he doesn't seem to have that as much as he did late last

Summer.

ASHER: And the revolving door continues from that. Kaitlan Collins live for us there. Quite a game of thrones, thank you so much, appreciate that.

OK, so Donald Trump, as Kaitlan was just talking about has fired his secretary for Veteran Affairs and nominated the White House physician Ronny

Jackson to replace him.

[16:45:00] The VA is the second largest government department with about 280,000 employees. To put that in perspective for you, it is double --

listen, it is double the number of people who work for Microsoft.

Ronny Jackson is a Rare Admiral in the U.S. Navy, he served with the Marines in Iraq and he was tapped to be White House physician in 2006.

Clearly, he has distinguished military and medical service. But he has no apparent executive experience. Retired U.S. Army Brigadier General Tom

Kolditz is in Houston for us. He is now the director of Rice University Institute for new leaders.

So General, thank you so much for being with us. So Ronny Jackson as we just talked about is a very capable doctor, he's got military experience,

but he does not have -- and this is key, he does not have executive experience.

And now he's about to lead one of the biggest departments in United States government. How does this end well?

TOM KOLDITZ, RETIRED UNITED STATES ARMY BRIGADIER & DIRECTOR, RICE UNIVERSITY INSTITUTE: Well, it's a difficult prediction because not only

does he not have executive experience, he doesn't have any basic leadership or management experience.

He's a medical doctor. He was not a commander of hospitals, I can't see that he's ever run a budget. And consequently, the plan I don't think is

for him to either fix or run the VA. He's going to lead it in some different way, but the chances of him being able to handle an executive

level leadership and management position would be about zero.

ASHER: So let me just play devil's advocate for a second because we all know, at least, in the United States, the VA has been plagued by scandals,

it is a bureaucratic myth. Are there any advantages to just hiring someone who is an outsider who is completely new and fresh and who comes in without

the necessary experience.

I mean, some people might say -- especially those who voted for Trump, that is why they chose him.

KOLDITZ: Well, that's true, I mean, some people believe that that's the way to shake things up. But the VA is an enormously complex organization.

And remember, it's not just a health organization.

It's a very complex benefits organization, they do home loans for veterans, they manage gigantic sums of money and they disperse all of that in a very

complex benefits scheme. They also run a cemetery system.

So it's not just a healthcare system, but a very complex system of dispersing and managing resources.

ASHER: How does he -- and this is key, not to somebody who is running the VA like Ronny Jackson, but to any new manager that doesn't necessarily have

the experience they need to run a department.

How do you win the respect of people who are junior to you when they know you're not qualified for the job?

KOLDITZ: Yes, there's an argument that really no one is qualified for a job as complex as the VA. And I think if he goes into that role and he's

honest and straightforward with people, certainly, he has the loyalty of Donald Trump and vice versa.

And if he asks the right questions and he respects the people around him, I think he could possibly have some good results at it. But it's just a

gigantic, strategic challenge and he's never really operated at the strategic level before.

ASHER: But if he doesn't know what he's doing, is the path forward, at least for the first year to simply, you know, hand over a lot of the

control to people that he respects and appreciates, whose work he values, who are junior to him.

Is that the way to go about it?

KOLDITZ: Well, in most organizations, that will be true. But most of the people who criticize the VA feel like it needs a lot of change at the top

levels. And consequently, the people that you just described that he would be handing over the reins to are exactly the people that where change needs

to be invoked.

So I'm not sure if that strategy is going to work very well. My own thought is that this may communicate some intension by the Trump

administration to enact some fairly radical changes in the VA, perhaps complex privatization strategy or something that moves away from the

current operation to something very different.

ASHER: Right, General, appreciate you being with us, thank you so much.

KOLDITZ: Thank you.

ASHER: OK, so news that's entered CNN, Under Armour says that hackers have gained access to data and the company's nutrition app, MyFitnessPal. So

hackers have gained access to the company's data from this app MyFitnessPal, that's the name of the app.

Around 150 million users have been affected. The stolen data does not include Social Security or Credit Card numbers. But hackers have

apparently gained access to personal data.

And suddenly, a scene we spoke about quite a lot on this show.

[16:50:00] OK, still to come here on QUEST MEANS BUSINESS, as the cheating Australian cricket players offer tearful apologies, sponsors say it's game

over.

(COMMERCIAL BREAK)

ASHER: Big brands are rushing to cut ties with Australian cricket players who have been banned for cheating, they include LG, Asics and the breakfast

cereal Weet-Bix which is canceling its contract with the Captain Steve Smith.

The three players found guilty, ball time friends are back home and facing the music. The CEO of Cricket Australia however is hanging on.

(BEGIN VIDEO CLIP)

JAMES SUTHERLAND, CHIEF EXECUTIVE OFFICER, CRICKET AUSTRALIA: Well, I'm absolutely committed to my job, it's -- my employment continues as a matter

of fact for the Board of Cricket Australia.

But I'm not resigning, and in fact, what's happened over the last few days is only strengthened my resolve to ensure that Australian cricket and the

Australian cricket team gets back on track and gets back in a place where it has not only the full respect but the pride of the Australian community.

(END VIDEO CLIP)

ASHER: Jim Callinan from "Sky News" of Australia joins me live now from Sydney. So Jim, just in terms of public opinion, do people think the CEO

of Cricket Australia should actually be resigning?

JIM CALLINAN, SKY NEWS, AUSTRALIA: Yes, it's a very good question, Zain, and it is an open one today because you mentioned some of those

corporations who have jumped off their relationships with those individual players.

Well, Cricket Australia has actually lost one of their key financial backers, they sponsored them series on home soil, we're talking about

Magellan Financial Group, now they sponsored Cricket Australia to the tune of around $20 million.

Now in American sporting terms, that is small -- certainly, in terms of national sport in Australia, that is huge money. And they're only one year

into that deal, two years left to run, well, they walked away in the last 24 hours.

That has put that man James Sutherland under enormous pressure to hand on to his job. He has been under fire now, and his response to all this ball

tampering in South Africa. But yes, it remains an open question, he says he's not going anywhere.

Well, the Board of Cricket Australia will have the final say on that.

ASHER: OK, so, I guess we'll see what happens. But in terms of the sponsors, you know, you talked about sponsors, and as I mentioned LG, Asics

and the breakfast cereal Weet-Bix all canceling partnerships.

Is that likely to be the end of the sponsorship fallout do you think, we'll put that in what to come.

CALLINAN: Unlikely yes, I think you would say there's more to come as players each have respective apparel and -- but companies that sponsor them

as well as other personal sponsors.

But there's a real strong grave empathy that is flowing their way. Two players in particular at the moment who showed enormous emotion at many

gatherings yesterday, here both in Sydney and in Perth.

[16:55:00] So it had been I would imagine a company that is looking to look like they're doing the right thing in terms of their own brands but

certainly not looking to put the burden -- I think will hold fire in the short term and they might be quietly over the next couple of weeks may make

a decision on whether they continue their ongoing tenure.

Certainly, the financial fallout once felt, yes.

ASHER: Right, so there could be a bit of a wait-and-see approach. So just in terms of -- I'm really interested in the sort of public opinion in

Australia. Do people think that the temporary bans on these players is too severe or do they actually believe that these guys made a mistake and that

they should be given second chances.

CALLINAN: Look, it's very much flowing towards the ladder at the pardoned motive element when they first came out of cheating, that was gathering --

you know, real gut shot to the Australian public.

Even that cricket release our national sport, now captain was party to it. Now in the few days where that cold raw emotion does tend to dissipate, and

you see is a motive response from players.

Fans now certainly want to gather around them, and make sure those players are OK. They're mentally fragile at the moment, there's real concern about

their mental state. So certainly at a grave empathy as I say is flowing their way.

But yes, they do have to serve some sanctions, 12 months is that disproportionate to the actual crime that they committed in terms of crime

on a sporting field. Some say yes, too much.

When you consider the IOC, see, now they look after the game globally. I only endorsed a one match ban to the Captain Steve Smith, but he's pardoned

this. Yet, his own employer decided they would sanction him for 12 months.

Now, you can see now quite clearly the disproportionate nature of those two sanctions --

ASHER: Right --

CALLINAN: From two respective governing bodies. So yes, there's a feeling that they may have gone a little bit --

ASHER: Yes --

CALLINAN: Too hard --

ASHER: Too far --

CALLINAN: But certainly --

ASHER: All right --

CALLINAN: All three have to serve a sanction.

ASHER: All right, Jim Callinan, thank you so much, appreciate that. OK, my friends, that is QUEST MEANS BUSINESS, I'm Zain Asher, the news

continues next on CNN.

(COMMERCIAL BREAK)

END