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Quest Means Business
Disney Is Making A Bigger Bid In Its Fox Hunt, Donald Trump Starts An Executive Board On Immigration, The Dow Dumps GE As The NASDAQ Hits Records Anew, Starbucks Is Facing Some Serious Losses, Another Busy Day Of Action At The World Cup; Trump to Meet the Queen During U.K. Visit; U.K. Doctor Suspected of Prescribing Deadly Opiate Doses; New Zealand PM Enters Hospital to Deliver Her Child; Homeland Security Criticizes Airlines Over Border Stance; New TSA Powder Policy Linked to Australia Bomb Plot; Iran's Oil Minister Blames Trump for High Oil Price; Amazon, Berkshire, JPMorgan Reveal Healthcare CEO. Aired: 4-5p ET
Aired June 20, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: But this is clearly much, much better than it was earlier on the session. As trading comes to an end, hit
the gavel - one, two - look at that. That is strong and clean and it is Wednesday, it's the 20th of June.
Tonight, the house of the mouse is back. Disney is making a bigger bid in its Fox hunt. Out with the old, in with the new. The Dow dumps GE as the
NASDAQ hits records anew. And Donald Trump starts an executive board on immigration. Homeland Security is out at US carriers.
I am Richard Quest, live in the world's financial capital New York City on a glorious day where even on a Dow dead market, I mean business.
Good evening, tonight, Donald Trump takes action to try and alleviate the border crisis that's engulfed the United States. A short time ago, the
President signed an executive order that will keep migrant families together when they enter the US illegally.
Now, we've had heartbreaking images of separated families that's fueled outrage amongst Americans and disgust across the world. Mr. Trump said
despite his order, a zero-tolerance policy remained.
(START VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: So, we're keeping families together and this will solve that problem at the same time, we are keeping
a very powerful border and it continues to be a zero-tolerance. We have zero tolerance for people that enter our country illegally.
(END VIDEO CLIP)
QUEST: This all happened in the last hour, it's an issue, it's outraged Chief Executives like few others over the Trump administration's tenure.
The calls for change continued, Goldman Sachs CEO, Lloyd Blankfein said it was moral imperative to stop separating families and call for a compromise
on immigration policies.
Both American Airlines and United asked the US government to immediately stop using its planes to transport children who have been separated and
Microsoft's CEO, Satya Nadella sent an e-mail to all staff saying the company stands for change in what he calls the inhuman treatment of
children at the border.
All of this, we will talk more about the immigration debate and the ramifications and the roles that companies have played in all of this,
later in the program.
Now to the markets. In the "Quest Means Business" trading post, it has been a historic day and for two different reasons, and if you join me in
the post, I will show you exactly why. So, the NASDAQ - look at this - the NASDAQ eked up a 66-point gain today and as you see there, the NASDAQ is at
a record high. No records for the S&P, although that was the broader market. They're very narrow markets. But the Dow is tight.
If you look, it was actually up at several points during the session. It bounced around throughout the whole course of the session, it bounced
around throughout the whole course of the session, so on a day like today, when trade was still an issue, when immigration was very much in the news,
it really is a testament and an achievement that the markets held their own in such a way, and as you see here, we do have a record on the NASDAQ.
There you are the NASDAQ now has 21 records so far this year. No records in Europe. When you look at the market though, this is really interesting
because today, something - well, it was announced last night. It is happening next week, but there's going to be a significant change, a
historic change in the Dow Jones Industrials.
GE, we bring good things to life as they have done for well over a century and they have been part of the Dow Jones and now, GE - General Electric is
being kicked out of the Dow and being replaced by Walgreens.
History indeed. Now, GE started with Thomas Edison. They made light bulbs of course, in fact, they made every appliance known in the entire kitchen,
but GE was more than just light bulbs. There were trains and jet engines and they made - they invented the remote control.
They also gave us NBC Television. They own the network and the 787, the engines come up, but you can see, they make jet engines as well. It was
once the most valuable company in the world, however, a cash crisis, bad deals.
[16:05:13]
QUEST: It was the worst performing stock in the Dow Jones, it is down 25 percent so far this year despite numerous restructuring, the company that
gave us so much has failed to find its footing even in medical appliances, where again, it invented the MRI.
And so ends an era for the world's most famous stock index. Back when it began, there were 12 in the original Dow Jones. GE is the last remaining
and in fact, overall, it was listed for 110 straight years with a short period, but it was that - whatever happened to Chicago Gas, National Lead,
Tennessee Coal and the like. Who knows? Who cares?
But GE - General Electric has been there for 110 years. Now, today's Dow, the index committee, if you look at the Dow, there you see GE. But the
index committee said, "Walgreens' boots is a better measure of the economy," and Walgreens isn't even at the NYSE.
The Dow as an index in its own right is fighting for relevancy. Think about it. If you look overall at number of assets tracked, only roughly
$30 billion tracked the Dow Jones Industrials. It's such a narrow index. They may be big stocks, but there's very few of them.
You and I talk about them every day. But the bigger, better index is of course the S&P 500. And nearly $10 trillion are following those. The Dow
is a price weighted, the S&P is a capital base.
As David Blitzer is the man we talked to on this. The Index Committee Chairman for the S&P Dow Jones. Come on David, now, look, David, I
understand the logic and I understand why and the difference between GE's price at the bottom and Boeing is at the top, but it is still a momentous
decision to lose GE from the Dow.
DAVID M. BLITZER IS THE CHAIRMAN AND MANAGING DIRECTOR AT S&P DOW JONES INDICES: The decision, as I think you suggested, the decision was made
based on the needs of the index and the fact that the index designed and does tell us a lot about what's happening in the US markets and tell us a
lot about what's happening around the world.
With an index with 30 stocks, and there are about 3,800 stocks in the US market, obviously, choices have to be made and we look at it, and looking
at GE's stock price among all 30 stock prices and all 30 companies, and recognizing that we are somewhat over weighted in the industrials and under
weighted in consumer staples and slightly under weighted in healthcare, we feel Walgreens boots in line is the better - a better fit. It gives us
consumer staples, it is very well known. It has a long illustrious history like the Dow - and also like GE, it has got something like 40 years of
continuous dividend payments, which is - you don't write too often.
And it looked like a better fit for the Dow Jones Industrial average.
QUEST: Now, I've got the Dow here and we're looking at the composition. How much of the decisions of the index committee into this? How much is
subjective versus objective? I mean, you know, we'll get the feeling you held on as long as possible with GE until it became an egregious gap
between the bottom and the top, but if I look at Johnson&Johnson, Merck, how much decision making do you have in that?
BLITZER: If you go through the - what we call the methodology, the rules for the Dow - if you go through it, you will find that at the end, the
committee does have a small amount of discretion. It is not like some indices that rank the stocks by market value from the top to the bottom,
take the top 45. That kind of index - we run indices like that, but the Dow is different.
The Dow - recognizing that we are trying to represent the whole market, recognizing among other things its long history, and recognizing that if we
want rules that would make everything exact in the Dow, Richard, the rulebook would be a thousand pages and second of all, we have to keep
changing it.
So, we do have a small amount of discretion.
QUEST: All right, now, finally, I think there's lots of us, myself included that yes, we know the S&P 500 is the broader, more representative
and all of that, but David, but the Dow still captures the imagination, doesn't it?
BLITZER: Absolutely, and you know, I chair the committee that handles the 500 as well as the Dow and they are both well known, but for the man on the
street and nowadays, I should say the men and women on the street because both of them invest or all of them invest, the Dow is the measure they look
at.
[16:10:13]
BLITZER: And the first measure that you folks probably talk about first thing in the morning and at 4:00 in the afternoon.
QUEST: And we will continue to do so with or without GE. Thank you, sir. Good to see you as always. David Blitzer joining us.
Now, since we are talking about good old fashioned ways of doing things, there is a good old fashioned bidding war underway. Disney has just
significantly increased its offer for Fox and that tops the rival bid from Comcast.
And the bid - the move it pits old adversaries, Bob Iger and Brian Roberts. Iger from Disney, Roberts from Comcast head to head for ownership of a
chunk of Rupert Murdoch's media empire. It is called as you can see, "A Battle Royale." That's "Variety Magazine," has it on its front cover.
So, the bidding war - let's look and see how it did. The bidding war began with Disney. Now, Disney put its offer on. Remember what it's buying.
It's buying the studios. It's buying the networks, some of the stations and it is buying FX Channel. It's not buying Fox News and a variety of
other assets. $52 billion.
However, just a few week later, Comcast suggested it was interested and then bang, comes straight in. Comcast, which also owns NBC rivaled with
$65 billion.
And now, bang, up to $71 billion. The court - the ball is firmly with Comcast. The decision of course will rest with Fox and which company
Rupert Murdoch likes best.
Hadas Gold, you're here.
HADAS GOLD, POLITICS, MEDIA AND GLOBAL BUSINESS REPORTER, CNN: I am here in the flesh.
QUEST: You're here in the flesh. Good to see you.
GOLD: Wonderful to see you as well.
QUEST: Good to see you. Hadas, however, we are lucky today, we'll of course sit at the table a bit now. All right, so it's a hefty jump from
the original $52 billion to $71 billion. Bob Iger wants this.
GOLD: Of course, yes, and it's personal between these two.
QUEST: Really?
GOLD: Yes. As though you couldn't tell from that cover. Bob Iger wants this and so does Brian Roberts. Not only for their own personal legacy,
but for the health of their companies moving forward because this all comes down to scale and competition from Netflix and Facebook and Amazon and
Google - all of these companies we constantly hear about.
QUEST: By the way, I forgot to mention when I was in the trading post, Amazon and Netflix both hit record highs today. So at the time of all of
these, you see why they want it. Which company - Comcast and Disney - does the Fox assets better fit into?
GOLD: I know you've been asking this to a lot of people, and I think that some analysts feel that when you're looking at the content, Disney would be
a better fit. Just think about all of the possibilities there. The comic book heroes. That could extend that very profitable franchise for a long
time more if you're combining these two different worlds together.
Think of the movie, "Avatar" and how they could do theme parks with it. There is so much possibility there. With Comcast, Comcast is more of a
distributor. In fact, you could say that the Fox International assets make a lot more sense with Comcast, but I think that if you're also looking at
the financials, some people feel more comfortable with Disney owning Fox.
QUEST: And ultimately, I mean, the 21st Century Fox shareholders will decide and - but as I recall, the very strange ownership shareholding of
that company effectively gives a lot of say towards the Murdochs.
GOLD: It does, and I have heard from some people that they feel as though the personal relationships will actually have a big play in all of these,
on Murdoch and Bob Iger have been running the same circles for quite a while.
Brian Roberts is sort of a different media mogul variety and that could affect this as well, and you're also thinking about the legacy and the
value for the shareholders. That all plays into Disney's favor.
QUEST: So, just remind us what is going on - what is being sold here? It's the studio?
GOLD: Right.
QUEST: 21st Century Fox.
GOLD: Right.
QUEST: It is some of the cable assets, FX Network and the like, and...
GOLD: But not Fox News, Fox Business, Fox Sports - those are the only sort of carve outs that are going to become New Fox. All of these other things
about - all the TV studios, all of the movies, all of that, that is going to be up for sale here.
QUEST: Do you think Comcast comes back with a higher bid?
GOLD: I definitely think they'll do. I think it is going to reach $80 billion.
QUEST: Eighty?
GOLD: Yes.
QUEST: In honor of Ms. Gold being with us, go on.
GOLD: I was so excited.
QUEST: The $80 billion bell. As we continue tonight, in the oil markets, it's all about OPEC in an exclusive conversation with Iran's oil minister
and the information on exactly what has happened. That's next.
[16:05:04]
QUEST: Starbucks is facing some serious losses. The shares were off 9 percent and the new concerns over its business in its biggest and second
markets. The second biggest markets, Paul La Monica is here, China and the United States are the two markets and others. What's gone wrong?
PAUL LA MONICA, CORRESPONDENT, CNN: I think Starbucks still is facing a dilemma that it's had where they had oversaturation in the US and that's
why they are closing far more many stores than they had even in prior years, that's one thing that is happening to them. They are also facing
tough competition here - Dunkin' Donuts is resurgent, McDonalds has coffee offerings also, so that I think is a problem. Then China - it's still a
bit of growing pains there as the company is still trying to figure out how to really adapt its mobile strategy to that market.
QUEST: The challenge for Starbucks though is how to expand its menu offerings, how to increase its relevancy without destroying the fact that
you want a cup of coffee and a muffin.
LA MONICA: Yes, I think at the end of the day, there are a lot of people who do want to go just go in, get an espresso and a blueberry muffin or a
scone and then sit there using the Wi-Fi for a couple of hours and then let's call it a day.
But, I think the other issue for Starbucks and they've been here before, when Howard Schultz steps back, it doesn't matter that Kevin Johnson is a
great CEO with a really topnotch tech background and that Rosalind Brewer used to be at Walmart on Sam's Club, neither of them are Howard Schultz and
I think that is going to linger over Starbucks for the foreseeable future until they turn sales around.
QUEST: And I say, until the numbers start turning around, but is it the feeling of the street that there is something systemically wrong with
Starbucks, or is it just growing pains and the curing pains or whatever? Is the street worried?
LA MONICA: I think the street is clearly worried. I mean, you can't have a 9 percent drop in the stock of like this without it showing signs of
concern. I think the problem is going to be can Starbucks really prove to investors that it can be what it once was and not just a mature retailer.
QUEST: I am a single shot tall skimmed latte extra hot. What are you?
LA MONICA: I haven't actually been to Starbucks in a while to be perfectly honest.
QUEST: I am buying you a Starubucks.
LA MONICA: There we go.
QUEST: How might it help the results?
LA MONICA: You could get me one of these new fangled refreshers, the low calorie iced-tea type drinks that they have. That really is where they are
going. They are pushing these other non-caffeinated drinks a lot more aggressively.
QUEST: Good to see you.
LA MONICA: Thank you.
QUEST: The EU strikes back. Tariffs on American products go into effect on Friday and the two sides may be locked in battle. The European
companies say they share the same concerns about China's trade policies.
The EU Chamber of Commerce in China says it has significant concerns with the Made in China 2025 scheme. It's the Chinese government's plan to
become the global leader in all things tech and was one of the main justifications for Washington's imposing new tariffs.
Paul Triolo studied Chinese tech for the US government. He is the head of the Geotechnology for Eurasia Group. Good to see you, sir. Thank you.
[16:20:08]
QUEST: It's interesting that this one - because everybody is talking about the tariffs admits that China hasn't done anything to prevent its IP threat
or the theft and said it needs to be done, and yet, when the US government does something, everybody says, "Oh, no."
PAUL TRIOLO, HEAD, GEOTECHNOLOGY FOR EURASIA GROUP: Yes, Richard, I think there is a lot of issues here. I think the tariffs have to be viewed as a
way to force China sort of to the table.
So, from the very beginning of the investigation, the 301 investigation that started all of this, the goal has been to use tariffs and use other
things like investment restrictions to force China to come to the table. So that's sort of where we are right now. We are sort of in the eye of the
hurricane if you will and waiting for the first truck drop here of the tariffs in early July.
QUEST: Right, now the President in the statement yesterday specifically talked about how China had seemingly singlehandedly refused to recognize
its miscreant behavior and started to do something about it.
And you know, and yet, you've got the Europeans saying, "Well, look, we don't necessarily like tariffs, but we do agree that China is unfair trade
player."
TRIOLO: Yes, I think there is widespread agreement that China is - in terms of market access, in terms of industrial policy, in terms of things
like forced tech transfer, has really - is not a level playing field. Those contents aren't reciprocity, so both Europe and the US feel strongly
about this.
I think the dispute as it coming down to over the tactics used to try to resolve this, the US has chosen the tariffs, to use the tariffs as I noted
to try to force China to the table, but it's a very difficult road to head on.
QUEST: When you say - you say it's a difficult road, but at the end of the day, I mean, they all think it's dreadful, but nobody seems to want to do
anything about it. And one has a certain sneaking respect even if one doesn't like necessarily the result, then at least President Trump has
said, "All right, we are going to do something and this is what we are going to do like it or lump it."
TRIOLO: Exactly. I think that's a great point. I think that there has been this long standing concern that not that there has not been enough
pushback on China on all of these policies, and finally, as a result of the 301 investigation led by the USTR - US Trade Representative and then the
President again has made this an issue. Yes, there is a lot respect that finally, something is being done on China even though the tactics are not
widely appreciated particularly in the business community because of things that disrupts the supply chains that they are probably going to cause in
the short term.
QUEST: Would it have been better - let's assume that the President hasn't offended all of its European allies, would it - with tariffs over steel and
aluminum, would it have been better if they all got together, the G-7 and said, "All right, we're all going to tariff China. It's time for you to
improve yourself." Collectively, China would not have been able to simply say, "No."
I mean, the markets are simply too big against them in that case.
TRIOLO: Excellent point. I think the problem is that some of - the Europeans in particular and some of the other countries that are concerned
about China lack some of the tools like tariffs to push back on some of these policies. The US has a very well defined policy under 301 and part
of the game here is that, this is a very thought out game.
The 301 investigation report laid out clearly what the problems are and then provides authorities for the US to impose tariffs and then also impose
things like investment restrictions. So, some of the other countries lack these tools I think to push back hard.
QUEST: Good to see you, sir. Thank you. We will talk more about it. We will need your advice, and help and guidance.
TRIOLO: Happy to help, Richard.
QUEST: Thank you. Another busy day of action at the World Cup. Some of the big names and the big teams - they needed results and it was a bit of a
theme that will develop as you'll follow on.
In the last few minutes, Spain scraped a one nil victory over Iran. A surprisingly strong showing from the Iranian squad and we saw a history
making goal from Cristiano Ronaldo. Oh, Amanda Davies, I don't always normally get too excited over goals like that, but that was certainly one
to get the blood racing.
Portugal badly needed the win. Morocco didn't make it easy and the star striker delivered the one nil victory making the second hand's
international goal score ever. And Uruguay, look at Uruguay. You don't expect them to beat Saudi Arabia easily. They did win one there that
wasn't an easy one. It confirms Russia will go through for the knockout round.
I always Amanda Davies that the host should go through anyway, I mean, it creates a good atmosphere to get them through. So, we are now getting
further into the contest. Looking at today's matches, besides the Ronaldo goal, which was just superb. We will show it again and again, no doubt.
What tickled your fancy?
[16:25:07]
AMANDA DAVIES, CORRESPONDENT, CNN: I have to say, Richard, actually in terms of the football today, it's probably the first day where the games
have been a bit, yes, they were all right. We did have all three of the games, all three of the goals in the game scored by kind of the biggest
names of the competition, the big attacking players who in the run up, you would have hoped we'd be talking about Luis Suarez of Uruguay on his
hundredth tap, Cristiano Ronaldo as you said and Diego Costa for Spain, but people are getting really, really excited about Cristiano Ronaldo.
Because you know, these big competitions, you want the stars to perform. Sometimes, they just can't handle the pressure, but he absolutely is taking
it and running with it, stepping up to score his fourth goal of the competition so far.
As you said, it makes him this top European international goal scorer ever. He scored 85 times for his country. A lot of people speculating, I don't
know whether you could see or no these pictures. He was forcing sporting bit of facial hair today. People were suggesting maybe it was a goatee to
stake his claim as the goat in real terms, the greatest of all time. Something of a subliminal message and we know Cristiano Ronaldo doesn't do
much by accident.
He does things on purpose. He has a plan, so might well have been a little bit of a message there for Lionel Messi to say, "It is not you anymore, I
am absolutely the greatest player of all time, and Portugal certainly need him, Richard. They only had eight shots today, six of them were by
Cristiano Ronaldo and of course one of them not decided to go.
QUEST: The ghost of Christmas past was there in the form of Sepp Blatter, FIFA has decided that attending a match is not part of taking part of
football. I'd always thought when he was banned for life, for however long it was and I'd always thought that he wasn't allowed to attend matches, but
it seems that they've fudged that once again.
And he was there. I mean, there is a good Yiddish word to describe it, chutzpah that I mean, that's really what it comes down to, Amanda.
DAVIES: Yes, I don't think it's FIFA that decided he was okay to attend today. FIFA absolutely would not want Sepp Blatter anywhere near this
World Cup because from a FIFA perspective, Gianni Infantino, the new President has sort of drawn the line and said, we are moving forward, we
are leaving the ghosts behind us.
But, Sepp Blatter has received an invitation from Vladimir Putin to attend this World Cup as his guest. He wasn't allowed to stay in the FIFA Hotel.
He was staying separately, he didn't go in the FIFA box with the people he would normally have come to a football match with. He was there within a
private box as a guest of Putin at the Portugal against Morocco match.
But, let me tell you, Richard. He may be a former President, but there was one man everybody wanted to speak to today, such is the power and the
influence that he's had in football in recent times.
QUEST: Let's listen to what he said in an interview with RT.
(START VIDEO CLIP)
SEPP BLATTER, FORMER PRESIDENT OF FIFA: It was a bad time when (inaudible) attack on FIFA on the 27th of 2015, 27th of May. After this, I was
suspended. I am still a suspended President and the President had suspended and so, therefore, it was not an easy time for me.
(END VIDEO CLIP)
QUEST: I am still President, but suspended." I mean, come on, sheer mischief making by President Putin to invite somebody who he must have
known was the last person that FIFA wanted anywhere near Moscow.
DAVIES: Yes. And I was one of those people who wanted an interview with Sepp Blatter today. We are being told we were going to get an interview
with Sepp Blatter, but it was absolutely chaos, and Blatter ultimately walked in and said, "I have something to tell you all. I am not doing any
interviews today, but if you turn up tomorrow, I might speak to you then."
But my first question was going to be, how much pride do you feel sitting here at the Russia World Cup because Sepp Blatter was so instrumental in
Russia being awarded this tournament at that fateful vote in 2010, of course, that double bidding process that we have heard so much about over
recent years where Russia got this tournament, Qatar got 2022, so that is one of the big reasons why he has been invited to this tournament, and you
know that Sepp Blatter wanted to use this moment to have his say and make his mark in a sport that he absolutely, as you can see, they are the ones
who have walked away from, but we did check the website, the FIFA website does absolutely say...
[16:30:00] DAVIES: Once have walked away from, but we -- and you know, that Sepp Blatter wanted to use this moment to have his say and make his
mark in a sport that he absolutely as you can see, doesn't want to have walked away from.
But we did check the website, the FIFA website does absolutely say 2015 was the end of Sepp Blatter's tenure as president.
QUEST: Thank you, Amanda Davies, we cannot talk about Mr. Blatter anymore, we should concentrate on football, good to see you, thank you, have a good
day.
As the rise of the month continues to rise, Donald Trump is blaming OPEC, now Iran's oil minister didn't hold back, he's talking exclusively to Cnn,
in a moment.
(COMMERCIAL BREAK)
QUEST: I'm Richard Quest, a lot more QUEST MEANS BUSINESS as we continue tonight. When U.S. carriers are the latest group embroiled in the U.S.
immigration controversy, and arguably behind is the boss by Jeff Bezos, Jamie Dimon and Warren Buffett, now if that's not the bosses to us, I don't
know what is.
As reality for one of America's most well known doctors as you and I continue our conversations tonight, this is Cnn, and on this network the
facts always come first.
President Trump has just signed an executive order putting an end to the separation of undocumented families at the southern border. It's an abrupt
phase, and it follows intense pressure to take action and stop the controversial practice.
He maintains there will be zero tolerance at the U.S. border. The president is to meet the queen when he visits the U.K. next month. U.S.
ambassador said the meeting will be the most important part of the president's trip. The visit begins on July, the 13th.
More than 450 elderly patients die at the British hospital because a doctor routinely oversubscribed doses of opiates. The new "Independent" report
accuses Dr. Jane Barton of being part of an institutionalize regime of prescribing dangerous doses.
New Zealand's Prime Minister Jacinda Ardern has gone into hospital in Auckland where she will deliver her first child according to the Prime
Minister's office. In charge of the country has been handed to the acting Prime Minister Winston Peters while the full PM is on parental leave.
More on Donald Trump's executive order on immigration, David Chalian is in Washington. David, now, it is difficult to know where to begin here
because as I understand it, for the last two or three weeks, the administration has been telling us at every opportunity that they could not
-- they could not do this by executive order.
[16:35:00] DAVID CHALIAN, CNN POLITICAL DIRECTOR: That's right --
QUEST: And today, they did it by executive order.
CHALIAN: Exactly, they continually -- everyone from the press secretary of Homeland Security, secretary to the president himself, every aide kept
saying this is a binary choice. Either we do catch and release and release all these people that cross illegally into the interior of the country or
it is this zero tolerance policy --
QUEST: Right --
CHALIAN: And the law demands that we rip children away from families. Today, after saying for a week now, there's no third option, they came up
with a third option that they can actually do this without the Congress.
QUEST: Right, just listen, just in case anybody has any doubt or for some reason thinks that you're biased in one way or the other, let's just listen
to reinforce the point.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We can't do it through an executive order.
KIRSTJEN NIELSEN, SECRETARY OF HOMELAND SECURITY, UNITED STATES: Until these reports are closed by Congress, it is not possible as a matter of law
to detain and remove whole family units who arrive illegally in the United States.
Congress and the courts created this problem and Congress alone can fix it.
SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: It's Congress' job to change the law, we're calling on them to do exactly that.
(END VIDEO CLIP)
QUEST: I mean, this is like the -- this is -- and I see Ivanka Trump has been tweeting thanks to the president of the United States for solving a
problem. But she's thanking her father for solving a problem that he created in the first place.
CHALIAN: Right, and we should note, Richard, that the executive order that the president signed today does not do away with the zero tolerance policy
--
QUEST: Right --
CHALIAN: That is that anybody who crosses the border illegally is going in for criminal prosecution, everybody that does so. That policy is not
changing, what they're trying to address is the ramification of that policy about the separation of children from their parents who go into that --
QUEST: Right --
CHALIAN: Criminal prosecution system. And so they're trying to fix the ramification policy, but the president of course wants to remain committed
to that zero tolerance policy.
QUEST: That's not his policy, that's fair, not his policy, I'll take the consequences as necessary. Now, David, why did they change? What --
CHALIAN: Yes --
QUEST: Was it? Because they seemed as if they were -- the administration, Donald Trump seemed as if he was going to brazen this out.
CHALIAN: Richard, I think this is one of the stunning moments of the entire Trump presidency today. I have never seen Donald Trump buckle under
public pressure like this and change course. He's had to sometimes the courts rebuffed him on the travel ban, he's had to go back or maybe
Congress didn't quite give him what he wanted on border wall funding and he's had to wait longer for that.
But on an issue and a policy that he created, that comes under intense public scrutiny that he then reverses course. We haven't seen that before,
and that's extraordinary. So all that public pressure from a ton of Republicans as well, not just Democrats and the media, from the Pope, from
foreign leaders, from his wife and daughter who he clearly is listening to as well.
These former first ladies, former presidents, this was so intense, the public pressure and he as you know, Richard, is a student of the media --
QUEST: Right --
CHALIAN: Image that is coming across his television screen, and this has been the dominant coverage.
QUEST: So does everybody who defended this and who basically said that it was not possible legally, and thinking particularly of course Nielsen from
the Homeland Security Secretary, did they all look either mendacious or stupid or both?
CHALIAN: Well, I'll leave that to the American people, to the viewers who are watching this to see. But she clearly has it on her face, she clearly
was undermined after being put out there publicly by her boss, the president to go and defend this and say that it's not them that's going to
change, and then he decided this morning it was --
QUEST: Right --
CHALIAN: Indeed them that was going to have to change.
QUEST: Thank you David Chalian in --
CHALIAN: Sure --
QUEST: Washington, thank you. Earlier on the program, we told you how some U.S. airlines, the American and United are asking not to be used to
transport children who are being separated from their families. The owners(ph) of airline securities criticized the carriers.
Rene Marsh is in Washington. When I read the statements from the airlines, I mean, they were almost word-for-word similar, both of them said, you
know, we are -- our goal is to bring families together, not to push -- pull them apart. Now, what is the department saying?
RENE MARSH, CNN GOVERNMENT REGULATION & TRANSPORTATION CORRESPONDENT: Well, this really did turn into a back-and-forth between the airlines and
the Department of Homeland Security today because first, the airlines put out that statement, and I want to say their statements were very specific.
They do not and did not want the government to purchase seats on their aircraft for children who were separated from their families.
[16:40:00] And then the Department of Homeland Security responded in a statement in essence twisting the airlines stance on this issue, saying
that they are upset and dismayed at the fact that the airlines are not willing to help the brave men and women of the Department of Homeland
Security with reuniting unaccompanied minors with their families.
So two totally separate issues here. Again, Richard, the statements from the airlines specifically spoke about separating children from their
families. They did not want those children to be placed on planes and shipped off to any other facility.
However, the Department of Homeland Security sort of muddied the waters a bit, saying that because they took that stance, they were somehow not in
favor with reuniting unaccompanied minors at the borders with their families, not what the airline industry was saying, Richard.
QUEST: All right, and one other story to bring to your attention, some reporting on the TSA looking more closely at powders on planes and the
amount of powder that people can take on planes. This goes back to an Australia case where an incident was foiled. What are they now saying
about powders?
MARSH: Well, so if you're going to be traveling, they -- you should expect that there will be, TSA will be taking a closer look at any amount of
powder that is more than what could fit into assorted can. They are going to be taking closer look specifically at powder that is in carry-on luggage
--
QUEST: Right --
MARSH: So they're not banning it from your check luggage, however, they are taking a closer look at this powder if it is in your carry-on luggage,
that was already --
QUEST: Right --
MARSH: Underway here in the United States. What is new here is that they are now saying that flights coming from out of the country with direct
flights to the United States will also face this scrutiny in part because of that bomb part in which they were trying --
QUEST: Right --
MARSH: To smuggle on, an explosive, Richard, and also just because they know that this is a threat, they know that these groups are continuously
interested in trying to blow up a U.S. passenger plane.
QUEST: Good to see you, Rene Marsh, thank you. When we come back, Iranian oil minister as OPEC meets -- the question of the current agreement on
production limitations on whether it can survive.
(COMMERCIAL BREAK)
QUEST: Iran's oil minister is keeping plenty of blame on the Trump administration and especially over the high price of oil. And an exclusive
interview with CnnMoney's John Defterios at OPEC in Vienna. Bijan Zangeneh signaled to John where the group could be headed over this Friday's outlook
meeting.
(BEGIN VIDEOTAPE)
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR (on camera): For 18 months, major oil producers led by Saudi Arabia and Russia took oil off the markets
to lift prices. Now they have the tricky game of trying to put it back on to stabilize the price of oil.
[16:45:00] And there's some resistance from other members of OPEC like Iran. I sat down with the Iranian Oil Minister Bijan Zangeneh who doesn't
like U.S. intervention.
BIJAN ZANGENEH, OIL MINISTER, IRAN: And this same situation, the market and the high price is not because of the re-balance between demand(ph), re-
balance between production, supply and demand.
This situation and the high price caused by the action of the President Trump and U.S. administration. After the speech of President Trump in 8th
May, 2018, and the throng of U.S. firms looking at dealing with Iran, their price jumped $6 during one week.
It means the tension, the political tension in the region and the uncertainty in the market created by the political action from U.S.
DEFTERIOS: Right, so you could have a solution by the end of business, Friday and Saturday which just says let's go to a 100 percent compliance.
There's no reason for arguments, no reason to start a new agreement, this could be the big compromise.
ZANGENEH: Yes, can be.
DEFTERIOS: How many barrels does that put back onto the markets?
ZANGENEH: It depends on the discussion.
DEFTERIOS: The flexibility of three to 500,000 barrels a day would solve the problem --
ZANGENEH: Maybe.
DEFTERIOS: You're exporting now about 2.8 million barrels a day. I've read surveys that shows because of U.S. secondary sanctions, that could
drop 300 to 500,000 barrels a day by the end of 2018. Do you think they'll hit that hard against Iran?
ZANGENEH: We try to preserve the level of sort (INAUDIBLE), I cannot say anything about because OPEC and U.S. administration attack against our
partners.
DEFTERIOS: But can you preserve those?
ZANGENEH: We try to.
DEFTERIOS: Is the president trying to undo the work of Mr. Obama and his agreement with Iran or is he targeting specifically Iran? In your view,
what's the motivation?
ZANGENEH: I think both.
DEFTERIOS: Are they seeking regime change? That's one view of the more conservative arm of the Republican Party? Is that the ultimate motivation
and can they succeed?
ZANGENEH: I think it is the biggest mistake that John Bolton and some others saying so. They think they can change the regime and era. Very
soon, very soon, we're going to resist this, they will understand it's impossible.
DEFTERIOS: Why do you say that it's impossible?
ZANGENEH: Iranian people may have some difficulty even by our administration. But they want to change the regime. They may have
complained about some things, but they don't want to change everything.
It's impossible, they will understand it very soon.
DEFTERIOS: Bijan Zangeneh of Iran looking at a potential compromise when it comes to the OPEC, not OPEC agreement, but clearly doesn't like the U.S.
intervention when it comes to the OPEC organization or internal affairs back home. John Defterios, CnnMoney, Vienna.
(END VIDEOTAPE)
QUEST: And a quick reminder, at CnnMoney, join Alexa or Google device to hear the latest business headlines. It's a 92nd update, twice a day
updated before the bell on Wall Street and after another closing bell on the gavel.
Say Alexa, please play -- not really say please Alexa, well, you should always say please. Alexa, please play my flash briefing and there you go,
and apologies to all of those with Alexa who is now playing it. Alexa! the briefing please.
And we continue, have the three of the world's most powerful businessmen and chief executive that we can talk to instead.
[16:50:00] (COMMERCIAL BREAK)
QUEST: All right, I want to talk about being a chief executive, Jeff Bezos, Jamie Dimon and Warren Buffett, I think they know a thing or two
about being the top dog. Now, they picked a doctor and a writer from the New York to run their new healthcare company.
Dr. Atul Gawande has been named the chief executive at the new venture that we talked about on this program, to find a way to give him employees better
healthcare options.
Andy Slavitt is the founder of Town Hall Ventures, acting -- he was the acting administrator of the Center for Medicare and Medicaid Services. He
joins me from Minneapolis, good to see you sir --
(CROSSTALK)
Let's face it, if you are chosen by those three men, I mean, that is the seal of approval from some of the best chief execs in the world. But even
so, his job is a thankless task to reform or to come up with new ideas on U.S. health care.
ANDY SLAVITT, ACTING ADMINISTRATOR OF THE CENTERS FOR MEDICARE & MEDICAID SERVICES: It's a tough job, but I think a brilliant choice. I think they
send a signal that they're not looking for somebody with small parochial issues who is looking to build a quick -- get -- you know, fix it business.
But somebody who's got a big picture perspective, who's got the respect of almost everybody in healthcare and who is out to make really big systemic
changes. So I think it's a good start.
QUEST: What's your understanding of what this venture is? I mean, I don't quite get it, whether it's an -- it's not an insurance company, it's not a
healthcare provider, it's designed to give employees better healthcare options.
But what does that mean?
SLAVITT: Well, I think the way to look at it is the following: if you took the resources of you know, three of the most influential companies in the
world, one of the best innovators, one of the best investors and one of the best financial platforms and handed it to somebody and said, OK, I want you
to fix the healthcare system, go, what would you do?
I think that's really the way to look at this. I think you know, they are not looking at this through a traditional lens, I don't think you should
expect that it has a lot of definition around it, it doesn't, I think it's going to be a tool job along with those CEOs and the people that help him
and the people he hires to figure that out.
And I think he is -- and I think he is probably going to start at a very big picture level, and my guess is pick one or two areas where they can
make the big change in the next couple of years.
QUEST: I just -- again though, you say that, change, I mean, look, the healthcare is about the provision of medical and health services to the
consumer. We can all agree on that. But I'm not sure what this amorphous group that's been put together is going to do.
At the end of the day, somebody has to make an appointment with the doctor, somebody has to go to the doctor and somebody has to pay the doctor.
SLAVITT: Well, that's right, but then in the U.S., we had a lot of complication to that very simple idea, and we don't get a lot for it. You
know, it costs us about twice as much to take care of our population on a per capital basis.
And our longevity and our other outcomes --
QUEST: Right --
SLAVITT: Are worse. So we're doing something wrong. So you can ask the question, how do you -- how do you be a force to fix that? And I think what
the easy guys did is they said let's hire a big public health expert, a big thinker, a smart person with a lot of trust and have him work on ideas to
simplify that process.
QUEST: So you approve of Dr. Gawande as in this job and now go further, you're expecting great things from him.
SLAVITT: Well, look, I think it's a great start. I think his job is challenging. The -- you know, all you can expect on day one is that they
make some good decisions out of the gate(ph). These are promising decisions.
[16:55:00] Fixing 20 percent of U.S. economy, changing how people get paid, changing how people get care, improving the outcomes, you know, that's a
large task and you know, we'll see what happens. But as for the start, you know, I think they picked a really great person.
QUEST: Thank you for joining us, I appreciate it, thank you. As we continue tonight, we'll have our profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: GE which it's of course, it's been announced is being kicked out of the Dow Jones Industrials. What a fall from the top from one of America's
greatest companies. But before we all head off into the distance mourning GE, it's tempting to think of them as being down out, forgotten and
bankrupt.
That's far from the truth. Yes, GE may no longer have the various trucks and trains and light bulbs and household appliances that we showed you
earlier in the program. But it still makes aero engines, it's got a vast medical division, it's doing life-saving work and making state of the art
medical equipment and it still has more than 300,000 employees around the world.
So maybe I get -- all right, so the stocks down at $12 and it's still trying to find out what its future looks like. But any idea that GE is
down out and gone is simply nonsense. It's just no longer in the Dow and there's been many that have been kicked out of the Dow who must be in a
renaissance into the future.
And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable.
We'll do it again tomorrow.
END
