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Quest Means Business
Trump Pardons Two Turkeys in Annual White House Tradition; Facebook Under Fire After Child Bride is Auctioned on Site; Former U.S. Secretary of Labor Cautions for the Breakup of Facebook and Other Tech Giants; Trump Says He Won't Sanction Saudi Arabia Over Khashoggi's Murder; Trump Defends Ivanka Trump's Use of Private E-mail in White House; Trump Cites His Answers to Mueller's Questions are Finished. Aired 4-5p ET
Aired November 20, 2018 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA NEWTON, CORRESPONDENT, CNN: It is 3:00 p.m. Eastern. We are desperately looking for buyers and look at that market. This is what is
driving the day, on Tuesday, November 20th. Yes, and you thought Monday was bad. There seems to be no stopping this market slide. Donald Trump
says he is standing by Saudi Arabia, and Renault's board is deciding whether to ditch Carlos Ghosn. I'm good, Paula Newton and this is "Quest
Means Business."
And good evening, yes, it is still a good evening even though we're in this final hour of what is a brutal trading day on Wall Street. We want to get
right to those numbers for you, the Dow is moving back towards the lows of the day, all 30 Dow stocks are now in the red. And the Dow's gains for the
year are gone, a distant memory.
The S&P 500 has fallen into correction, that's a drop of 10% or more from recent highs. All sectors, and this is key, are in the red at this moment
and the NASDAQ is now at a seven-month low. Look at the CNN business fear and greed index. Yes, I know you don't want to see it. We've got to give
it to you. It measures volatility, momentum and demand for safe havens.
It is pointing to extreme fear. Alison Kosik is assessing the damage at the Stock Exchange. It is pretty much fear and loathing. I think a lot of
people, Alison are wondering, has the market talked itself into this kind of a slip. The issue is, yes, we see slowing growth into next year, but
there really is nothing else in the immediate horizon, is there? What are we all missing?
ALISON KOSIK, CORRESPONDENT, CNN: Well, I mean there is negative news about tech stocks. I mean, you think about Facebook, there is negative
news about how Facebook has handled the 2016 presidential election. What happened with Facebook, with that, and then you look at Apple, and the news
about its marquee product, the iPhones which means we're seeing soft sales there.
So there is real hard news there driving these tech, these big tech names lower. But what is interesting is that, you look at these tech name,
they're the drivers that propel the markets higher into those record highs that we talked about almost month after month, so far this year.
And they're the ones that are obviously dragging the market lower now. So there is a lot of negativity in the market. I can see a lot of glum faces
here. I can't remember the last time during a holiday season I've seen the markets turn into red for the year.
And now we've still got a good month, month and a half to go before the end of the year, but it has really been a long time since we've seen the major
indices turn to the negative. We're seeing that top turn negative, too. You know, 2018, 2019, we're supposed to be strong years, for the economy
and now we're seeing analysts tweak their opinions and say no, maybe that recession that we have been talking about could be coming in 2020, it could
be coming in 2019, because many analysts are seeing a global slowdown begin, Paula?
NEWTON: Yes, it is interesting all of that negativity, like you said, I was just there, it doesn't seem very festive at the market today and we are
heading into some very low volume which also means more volatility. Alison, thanks so much. Now, we want to do a deep dive on some of these
sectors. Tech shares are off as Alison was saying, but they were off the lows of the day.
The NASDAQ though is still below 7,000 and Goldman Sachs has lowered its price target on Apple and that is significant in terms of drawing down
tech. Second, retail, shares of Target and Kohl's are down sharply. That's after earnings, despite that, Target's CEO insists there is no sign
Americans are shopping less, and of course, energy. Those shares have tanked, right along with those oil prices, US crude is down nearly 7% for
the day. Hanging over all of this, let's talk about those big picture macro factors.
Fears of an economic slowdown, the end of benefits from that colossal Republican corporate tax cut, higher interest rates, and of course, tariffs
still looming. Navigating the market downturn takes an incredible amount of skill. We have two experts to help guide us, Ben Phillips is Chief
Investment Officer at EventShares and of course, our own Julia Chatterley. Yes, like take a deep breath, exhale, we all want to be having chocolate at
the stock exchange today. There is none of that going on.
Ben, I had certain people tell me, "Look, no one should panic. This is not a bear market." What do you think?
BEN PHILLIPS, CHIEF INVESTMENT OFFICER, EVENTSHARES: Well, the average draw down we've seen I think since 1930 has been a 14% peak to trough draw
down. So isn't abnormal. To see we're not even at 10% yet in the S&P. Now and the cues, the technology stocks are seeing more of that. People
say they've officially entered bear market territory, but this right now overall is a normal correction, normal pullback that we see.
NEWTON: You know, Julia you have spoken to dozens of market experts literally. It must be a record by now in terms of what you have been
hearing. When you have pulled it all together, are there fears? There are so many buyers on the sidelines right now, they're not piling in. Why not?
[15:05:03]
JULIA CHATTERLEY, ANCHOR, FIRST MOVE: I've had a lot of people say, look, we have to think of cash as an asset class now for the first time in a long
time and I agree with what you're saying, this is a healthy correction, Ben, as well about this is a healthy correction and the talk has
transitioned I think from it being a healthy correction to people saying, "Look, almost half the shares out there now are in bear market territory,
and if you don't have the big tech names as the leaders here, what lifts us higher? And I think that is a valid argument here, too.
In addition to all the concerns you made. I mean other people pointed at Federal Reserve rate hike in December and says that is really going to be a
kicker for these markets at this time, too. So lots to think about.
PHILLIPS: Yes, and you saw Powell soften his language, right, so the Fed has softened their stance for the first time really and he is the king
hawk, right? So it is good to see them softening the tone a little bit, but overall I think, we are still cautious on markets and we are very
cautious on global trade being a catalyst, so we think what is being priced in right now in this correction is really just global trade risks starting
to be priced in the market because they are actually affecting supply chains now.
NEWTON: And the two of you, please do not take it personally. We are on the lows of the day now. The Dow now down 632 points. Julia, when we look
at everything that's out there right now, we're talking about growth slowing. Certainly, there is still isn't talk of a recession, what is this
impending doom that some people seem to know something about but apparently hasn't actually been - it's starting to the priced into the market, and
it's that oil price, right? You look at the deep on oil, and it really tends to be a global slowdown.
CHATTERLEY: Okay, so I think we have to separate what we're seeing in the markets from the fundamentals here, particularly for the US economy and
that has played a leadership role in terms of the underlying growth metrics and I do think that's important.
I think we're finally - as Ben was saying there, acknowledging that there could be bigger trade risks here particularly if we see 25% tariffs applied
in January and that's really I think starting to impact investors here, too. But I think we have to bring it back to the fact that this is a
holiday week. It is Thanksgiving. US markets are going to be shut for a day and a half this week and I think for investors, even in the really,
really short term here, do you want to be sitting on, if you're a short term trader, in particular, do you want to be sitting on risk, or holding
stocks at this moment with the holiday for a day and a half? Bear that in mind here, too.
NEWTON: And Ben, Julia is really getting to the nitty gritty of this. Not only are we talking about this holiday week, but we are also just a few
weeks from the end of 2018 and it is important that a lot of people want to show that ends of 2018, in the positive and not in the negative. What do
you do? It seems like there is nowhere to hide here?
PHILLIPS: There is not many places to hide. I mean, we are looking at potentially putting on some more shorts. We haven't put on any shorts yet,
we have a quantitative indicator that says when the market is going to take what we think is a bigger leg down. Right, now, it is teetering, it's
right on the edge. So it's saying, we're at a point, a very decisive point from the market and the market is on the fence currently about which
direction it is going to head.
CHATTERLEY: How important is it here as well that we keep, trying to bring it back to fundamentals, but there are players now in the market, in
serious size that don't make choices based on fundamental. They make choices based on price actions and when the market is going up, they buy
and when the market is going down, they sell. That's a huge driver, too with the oscillations that we see and not just in stocks, but in other
markets, too.
PHILLIPS: Yes, that's right. So we're fundamental investors at EventShares first and foremost, but as a portfolio manager, I've gotten
more in tune with the technicals just because of how important it is to watch the technicals, that's what the quants are doing, the algos, the
systematic trader, whatever you want to call them, the computers are trading, they amplify moves. So when we have a big down move, they pile on
and the first down move, we think started kind of in June time frame. It wasn't really January-February, it was really June when we saw a rotation
occurring.
We saw hedge funds de-risking. We saw them take risks down. Instead of running 200 long, 100 short, they took it down to 150, 75; so they cut
their risk pretty massively and the quants pick up on that, and they pile on that trade.
NEWTON: Julia, my finest Prof always told me that look, the market is like Vegas. Don't ever mistake it for anything else, okay, and the point here
now, to make that point, when we see those fundamental, perhaps we get good news on trade, maybe we start to see global growth and US growth looking
better in 2019, at what point - what is going to settle this market down? Is it the trade issue that we are going to have a trade meeting really in
two weeks?
CHATTERLEY: I think you're the right person to answer this question because I would make this point and I have been all day. Silver linings.
There is a lot of bad news baked into the cake here. What catalyst? As you said, Jay Powell actually just starting to soften the tone a bit, too.
If that happens, if we get some kind of breakthrough on trade, for me these markets look right to be you know, toes back - back in their tippy toes --
NEWTON: Ben, what can you say with that?
PHILLIPS: That is probably the right way to think about it. I mean, being a contrarian usually is the most rewarding play to trade, right? So if
people are all of a sudden very bearish on trade, we were bearish months ago and now we are seeing a plateau, really, this is the biggest risk for
markets. If the trade breaks down, that is the biggest risk for markets.
NEWTON: And final word to Ben before I let you go. How much can the Fed mess this up if they tighten too much in 2019?
PHILLIPS: I don't think the Fed wants the blood on their hands for the next recession so I think they are going to be very thoughtful and look at
markets and see what's happening in the equity markets and look at bond markets and use those indicators and as we saw, Powell is changing the tone
based on live market feedback.
NEWTON: Lovely. Thank you to both of you, Ben. Have a great thanksgiving.
PHILLIPS: Thank you, Paula.
NEWTON: Julia, you're going to be suffering this market with me. I'll see you over the next few days. Appreciate it.
[15:10:05]
NEWTON: Now more breaking news tonight, a dramatic declaration from the US President. Donald Trump says the US remains a steadfast partner of Saudi
Arabia. He is upholding Riyadh, even though the Saudi Crown Prince may now have had knowledge, the CIA knowing that he may have had knowledge of the
murder of journalist, Jamal Khashoggi. Now, Mr. Trump released a statement a short time ago saying he has no intention of canceling $450 billion in
military contracts with the Kingdom. He stresses, he doesn't want to let Russia and China get those contracts instead.
He also praises Riyadh for working closely with Washington to keep oil prices lower. Indeed, they are low. And he says Saudi Arabia is spending
billions to fight radical Islamic terrorism. CNN's Sarah Westwood is at the White House, for us, and Sarah, listen, there are a lot of people
looking at this statement and saying that it is truly unprecedented from the White House. I know that we've said that many times, but if you have
had a good inside look at the statement, what possessed the President to do this at this time, when he still didn't have apparently the full CIA report
on his desk?
SARAH WESTWOOD, CORRESPONDENT, CNN: Well, Paula, I think that the CIA report delivered being delivered to the White House today could have played
a role in the timing of the release of the statement. As you mentioned, the President was awaiting to receive that CIA assessment sometime today,
even though he has been briefed continuously since Khashoggi's disappearance by the intelligence community.
This was supposed to be the latest CIA assessment of what went on in that consulate in Turkey. And according to reports, that assessment was going
to include the relatively high confidence conclusion from the CIA, that the Crown Prince Mohammed Bin Salman did have knowledge of the fact that
Khashoggi was going to be murdered inside that consulate, and that has been a marker that many critics of this administration's response has thrown
down, in terms of does this White House need to be tougher on Saudi Arabia, if it turns out that the Crown Prince Mohammed Bin Salman was in fact aware
that this murder was going to happen? Then the answer would be yes. If you ask some of the critics of this White House's response.
And this is coming, as the President is falling under increasing pressure from lawmakers on both sides of the aisle on Capitol Hill, to take that
tougher action against Saudi Arabia. More sanctions, perhaps looking at re-evaluating that multibillion arms deal that the President mentioned in
his statement, and what that statement did, Paula, was set himself up to avoid taking tougher action against Saudi Arabia and the Crown Prince, in
particular, if he receives the CIA assessment today, and it says what we believe it will say, which is that the Crown Prince was directly involved
in that murder.
The president trying to position himself to be able to avoid taking the path that his critics want him to take, which is imposing stricter measures
against Saudi Arabia, Paula.
NEWTON: And now over to Congress, right, to see if they are going to do anything about this? Sarah, appreciate it. Now, CNN national security
analyst Samantha Vinograd is here with now. Sam, thanks so much for hurrying on the set with us as we ended up getting this information from
the White House. What's the message here? Because basically, it is as if - if you are an ally of the United States, you can do no wrong. You can
basically run around the planet with a gun to anybody, a gun to the head of anyone you consider an enemy, right?
SAMANTHA VINOGRAD, NATIONAL SECURITY ANALYST, CNN: Including a legal resident of the United States. Jamal Khashoggi was a Saudi, but he was
legally residing in the United States. The message that the President sent today is quite simple. He not only is allowing Mohammed Bin Salman to get
away with this murder, he is licensing him and anybody else who pumps oil, agrees to sign a memorandum of intent with the United States to buy US
weapons or engages in significant commercial transactions with us to kill whomever they want, wherever they want and whenever they want.
So the President said this is about putting America first and promoting US national security interests, I think he would be hard pressed to find an
American that feels safer knowing that Mohammed Bin Salman and the others feel so emboldened going forward.
NEWTON: And yet, if we take the contrarian view, some people cynically would say this is something that would have gone on in an Obama White House
behind closed doors. So they would have tried to see what kind of leverage they could get out of the Saudis in the meantime, but then ended up to the
same conclusion, we cannot afford to lose Saudi Arabia as an ally.
VINOGRAD: I worked for President Obama for four years and I can tell you that he would not have let - he would not have let, I just want to be
clear, I worked for him for four years. I know that Saudi Arabia was an important ally to President Obama. Saudi Arabia engaged in humanitarian
abuses, under President Obama, under President Bush, and multiple others. This is a gross escalation of what they previously had done, and I was in
National Security Council meetings with President Obama, of course, he weighed all of the factors in the relationship.
This leader, sanctioned an assassination against a US legal resident, in a consulate in a foreign country. President Obama would not have been okay
with that.
NEWTON: You called it a license to kill.
VINOGRAD: It is a license to kill. Why wouldn't Mohammed Bin Salman kill somebody again that hurt his feelings or said something nasty? What are
the repercussions? Seventeen of his henchmen are sanctioned.
[15:15:10]
VINOGRAD: Okay, well, guess what? There are 17 more where those came from.
NEWTON: And more than that, you and I have discussed this before, Russia is watching very closely, right?
VINOGRAD: They are and it's exactly what we've done with Russia. We have sanctioned GRU intelligence agents of Vladimir Putin that have perpetrated
his operations against the United States. Vladimir Putin clearly is not deterred. He is still attacking us.
NEWTON: Okay, I don't have a lot of time, but I do want two quick questions with you here. Would you have leveraged this? Because, you
know, in terms of me looking at the conflict at Yemen, of someone who has covered Yemen and who's been there, it is heart breaking.
VINOGRAD: It is.
NEWTON: Would you have leveraged it to try and get the ceasefire in place or do you have confidence they're doing that right now?
VINOGRAD: I don't have confidence that they are trying to get a ceasefire in place. How many years are we into the conflict? Today is World
Children's Day, and babies are suffering famine in Yemen. I don't think that you can really leverage human rights with oil production or ceasefire
in Yemen. I think that you typically would want to treat those separately, because again, otherwise, you really, really just mix all of these
different issues together.
NEWTON: Congress, can they do anything? Will they do anything?
VINOGRAD: Oh, certainly, I think that they will do something and in the first instance, there are intelligence committees in the US Congress. They
can demand access to the intelligence documents and they can hold up these arm sales if the President actually sees them come forward.
NEWTON: Yes, there's so much to talk about here. Sam, thanks for getting with us on the set. We didn't even get to the fact that in the statement,
the President actually basically impugned the reputation of Jamal Khashoggi, by saying that he --
VINOGRAD: He did.
NEWTON: Yes, he did. I encourage everyone to go and look at the statement. Sam, appreciate it so much.
VINOGRAD: Thank you.
NEWTON: The downfall of a legend. Carlos Ghosn is accused of pocketing millions of dollars meant for his colleagues and we are waiting to hear the
CEO's fate from Renault. And Facebook is under fire. This time, an auction, for a child bride took place on the site. Fifteen days later, 15
days, after she was married, the post was taken down.
Okay, we of course are keeping an eye on the Dow, which suddenly hit the lows of the day, in the past few minutes. We have recovered somewhat, but
that right there, down 558 points, nothing to write home about. We will continue to keep an eye on the markets with 40 minutes left to go.
Now, the US is, you're going to pardon this term, pigging out on current pork and beef prices as the recent result of Trump's trade war. The
country is exporting less pork to both China and Mexico.
[15:20:02]
NEWTON: That is bad news for chicken producers such as Tyson Foods, whose quarterly sales are now lower. Dustin Baker is the Director of Economics
at the National Pork Producers Council and joins me now live from Washington. I'm really curious to hear from you. I think when a lot of us
have been reading about the gyration of these food prices, kind of shocked at how those tariff, even the threat of tariffs kind of shake out when it
comes to domestic consumption. What's happened here?
DUSTIN BAKER, DIRECTOR OF ECONOMICS, NATIONAL PORK PRODUCERS COUNCIL: Well, no, you're exactly right and thank you very much for having me here.
Certainly, this year has been very interesting for the US pork industry. At the beginning of the year, we were looking at profits for our farmers,
and today, the narrative has changed a little bit.
As we look at pork prices in the retail space, government data last week showed that October pork prices were 4.5% lower than a year ago. That is
coming off of record pork production in 2017. There are certainly opportunities there for consumers in the United States to be able to stock
up on pork products as we head into the holiday season.
NEWTON: We can all only eat so much bacon even me who loves it. We can only eat so much. What are the worries for your industry going forward?
Especially if this is a protracted tariff problem?
BAKER: Well, certainly, the US pork industry is very reliant on export markets because it helps producers derive more value for each hog that they
produce. We're currently facing retaliatory tariffs in both Mexico and China, which are two of our largest markets. So right now, 40% of our pork
exports are facing retaliatory tariffs.
Our number one mission all along has been to end these trade disputes that are currently going on in order to open up those markets and make sure that
our farmers here in the United States can continue to provide the most healthy and most affordable protein product around the world to consumers.
So we are very appreciative that we are included in the Trump administration's trade mitigation package, including a record purchase from
USDA of pork products, to serve the most vulnerable in today's society, through food shelters and food banks, but the bottom line is we need those
markets open again, so our producers can continue to compete on the international stage.
NEWTON: How much you there in Washington, how much do you think the administration is listening? Several weeks ago, I spoke to the Agriculture
Secretary who just said, "Look, for you guys, you farmers, this is like a drought or any other piece of adversity you have to put up with."
BAKER: Well, it is certainly true that our producers have to put up with an awful lot of risks out there in the market and I'm confident that the
Secretary Perdue over at the USDA, and the Trump administration, for that matter, recognize that our farmers for the most part have been very patient
over the last number of months and they've really been patriots, as they have been taking it to the chin in the form of these retaliatory tariffs.
So hopefully, we have some momentum going in the right direction, as it relates to the USMCA as well as talk about free trade agreements with the
Philippines, Japan, the UK, as well as the EU, heading into 2019, and into the new Congress.
NEWTON: Okay, and trade diversification is certainly will a certainly a good way to go. I will keep eating my bacon. That I can assure you of and
we will continue to check in with you especially as we have perhaps some progress on tariffs. Thanks so much. Appreciate it. Happy Thanksgiving.
BAKER: Yes, Happy Thanksgiving to you. Thank you.
NEWTON: Thank you. European markets moved sharply lower meantime Tuesday, extending the latest wave of global selling. You can see the numbers
there, not as bad as what's going on in Wall Street. Tech and bank stocks were the worst performers. The DAX fell the most though.
Tonight, the Renault board tonight is meeting to decide the future of its CEO, Carlos Ghosn. Nissan is also expected to oust him as Chairman
following his shock arrest. New details are emerging about how much company money the auto industry legend allegedly mishandled.
Ghosn is accused of pocketing millions of dollars destined for other Nissan executives. Prosecutors also say he underreported his income by about $44
million over five years. In France, the Finance Minister says Ghosn has got to go as head of Renault.
(BEGIN VIDEO CLIP)
BRUNO LE MAIRE, FRENCH FINANCE MINISTER (Through a translator): We need an interim governance, so I will meet this morning, with the appointed
administrator, Philippe Lagayette, and the state representatives at the Renault administration board to ask them to immediately set up an interim
governance because Mr. Ghosn isn't able to lead the company.
(END VIDEO CLIP)
NEWTON: Anna Stewart is in London for us. No surprise there that they want to oust him as the head of Renault. Any news on that? We know the
board was meeting at this hour.
ANNA STEWART, CORRESPONDENT, CNN: So they were due to meet two and a half hours ago. We are expecting fresh lines at any moment now. Of course, the
expectation is that he will have to step down as CEO and Chairman given he is under arrest, and his future is looking very uncertain.
His position at Nissan and Mitsubishi of course, also likely to end rather soon and Nissan CEO proposed he be removed from that board. The Board
meeting due on Thursday. Mitsubishi, similar story. So yes, this Renault board meeting is happening now and we wait to hear what happens out of
that.
NEWTON: Yes, and clearly, probably not too much mystery what's going to happen that. I'm 'm interested to hear though what these companies say
they knew and when they knew it as those prosecutors continue to make that case in Japan. Anna Stewart will follow this for us actually throughout
the hour.
[15:25:06]
NEWTON: So if there's anything new, please come back to us, Anna. Appreciate it. Now, Facebook says it is making strides to clean up its
site when a child bride was auctioned off in South Sudan. The post stayed up for a full 15 days and the bidding war ensued before Facebook took it
down.
Hello, I'm Paula Newton, coming up in the next half hour of "Quest Means Business," you will hear from JP Morgan's Chief Global Strategist on how to
ride out this market volatility. You'll want to listen to him and another rough day for tech stocks. I will speak to the former US Labor Secretary
who says it is time for Facebook to be broken up.
Before that, though, we now turn to the international headlines. A stunning defense of Saudi Arabia, by US President Donald Trump. Today, he
signaled that he will not punish the Kingdom for the killing of journalist and US resident, Jamal Khashoggi. Sources say Mr. Trump's own CIA has
concluded the Saudi Crown Prince himself ordered Khashoggi's murder.
In Afghanistan, officials say at least 50 people are dead after a suicide blast at a celebration marking the Prophet Muhammad's birthday. Scholars
have gathered for the occasion at a wedding hall near the Kabul Airport. No group has claimed responsibility.
Spain's Prime Minister says the country will vote against the United Kingdom's Brexit plan. Pedro Sanchez says the plans don't address future
EU regulations, with Gibraltar, a small British territory off the Southern Spanish Coast. Mr. Sanchez says more talks are needed between Spain and
the UK.
And Donald Trump has issued a pardon that all Americans can finally agree on, today the President spared two lucky turkeys that might have otherwise
ended up on our Thanksgiving plates. These annual pardons have been a tradition at the White House for decades. Some say back to the time of
Abraham Lincoln.
OK, Facebook is again under fire, this time it's being called a Latter Day Slave Market. It's come to light that a 16-year-old girl in South Sudan
was auctioned off -- think about that for a minute, auctioned off for marriage on the site.
The girl was bid on by five men, and her father reportedly received 500 cows, three cars, and $10,000. David McKenzie has been following the story
from Johannesburg.
DAVID MCKENZIE, CNN CORRESPONDENT: Well, Paula, this story has horrified people across the globe. An apparent auction of a young woman in South
Sudan on Facebook for marriage. Now, we spoke to a lawyer's group in that country who said that it wasn't in fact, the family itself that put this
young girl up for a bidding war on Facebook, but it was community members trying to drive up the price.
I spoke to the head of Plan International in South Sudan, they've been helping to publicize this awful practice. He said that part of the
culture there, that prospective husbands can come in and try and compete of how much dowry they can give to a prospective girl for marriage.
Now, it's not uncommon for this to happen. More than half of the girls in South Sudan get married under age, before 18, even though technically, it's
illegal in that country. Now, Plan International, UNICEF and others say the key to changing this, of course, is that groups like Facebook, if this
were to become more prevalent, stop this practice.
But more importantly, on the ground, to make sure that girls are educated, that they are valued, and they are not bid on like some kind of property.
Paula?
NEWTON: And our thanks to David McKenzie there. Now, Facebook says the sale of a child bride violates its policy against human trafficking. Under
community standards, they say the policy is meant to prevent and disrupt real world harm alongside a promise to remove this kind of content.
Now, they tell us there is a team of 30,000 people around the world working 24/7. The team reviews millions of user reports a week, making decisions
about what is allowed. Now there is also a system in place, and to automatically detect content that violates the standards so it can be
removed right away, in this instance, the auction was removed a full 15 days after bidding had begun on the 16-year-old girl.
By that time, as you can imagine, she had already been married off. Samuel Burke is here in London. You know, Samuel, I'm pretty exasperated by all
of this, and it's also because, in terms of when you cover countries where child marriages are prevalent, you know what these countries are.
I can talk to them plain, I can talk to them, anyone who has done these stories on child brides can talk to them. When I say them, I mean
Facebook, you've been talking to Facebook, you're with them. Is it really reasonable that this was up for 15 days?
SAMUEL BURKE, CNN BUSINESS & TECHNOLOGY CORRESPONDENT: Of course not. And I think everybody here knows that. And I think more importantly, Paula,
investors know that, users know that. Even people within the walls of Facebook know this. As we talked to more and more former Facebook
executives, as more and more of them leave, as leadership changes there, we are learning that inside the walls of that company, people are flagging,
really, sounding the alarm at every chance they get.
That it's not just us on the outside criticizing. People inside this company think that the company isn't taking all of these types of issues.
Whether it's Russian propaganda or the terrible story at hand here, they're not taking it seriously enough.
Now, I want to put up on the screen what Facebook has to say about this. Facebook's spokesperson telling us, quote, "any form of human trafficking,
whether post pages, ads or groups is not allowed on Facebook. Remove the post and permanently disable the account belonging to the person who posted
this to Facebook."
But Paula, think about this. Fifteen days this was up, you talked about that number, 30,000 moderators -- I just want to contrast that with a
different number. Yes, 30,000 moderators, but two-plus billion people. Clearly, it's not enough moderators for the massive amount of users that
they have.
NEWTON: Sam, you've been looking into this and other issues of Facebook, literally, for years. Is the company getting to a point where they think
they grasp this, and that they have a solution or is there no solution? They keep acting as if they can do something about it, but really, when it
comes down to it, they can't. It is simply for the numbers you just put on screen.
[15:35:00] BURKE: It's the same story. We can do better, we should do better, we will do better. We will use technology, but I think that there
is something bigger happening here. I don't think that this particular story is driving down the price of Facebook today.
You see on the screen there, the tech market is taking down the stock market at this very moment. But I think, Paula, that there is now a sense,
particularly among investors, that enough of these stories have piled up, that they now question whether a platform that can reach almost every human
on earth, billions of people.
So it makes it so the Russians can contact Americans, so that people in a smaller country like South Sudan can maybe get a higher price for their
daughter. That maybe the fundamentals of this platform are not going to continue to be popular.
You have enough of these stories adding up, that really users begin turning on the platform, investors begin turning on the platform. And again, I
just want to go back to the fact that we're hearing this from the highest ranks, deep pocket investors and people within the walls of this company
really questioning the fundamentals of this platform.
NEWTON: Yes, it will be an interesting debate to come, and as you said, Samuel, so many things to question here, but what can be done, and can it
be better? Samuel, thank you for -- very much. We're going to continue this conversation now as Samuel teed up so well for us because former U.S.
Labor Secretary Robert Reich says it is time now to break up big tech companies such as Facebook.
And he's also the author of a book titled "The Common Good", he joins me now from Berkeley, California. Mr. Secretary, I've got to tell you, an
incredibly provocative point, something that you make, something that Americans really haven't contemplated in decades.
You want to break up companies like Facebook, and you're saying, while you're at it, throw in Apple, throw in Amazon, throw in Google. What is
your argument?
ROBERT REICH, FORMER LABOR SECRETARY, UNITED STATES: Well, Paula, we haven't seen anything like this since the last decades of the 19th
century, in terms of the concentration of economic and political power in these four or five giant high-tech companies.
And the problem is, and we learned this more than a 100 years ago, but we forgot the lesson. The problem is, when you have this degree of
concentrated economic and political power, you are inviting abuses. And the abuses are piling up, and we can see the "New York Times" did an expose
of Facebook just last week, showing how long Facebook knew about the Russians actually manipulating Facebook in the 2016 election.
Also that Facebook went to the extraordinary lengths of hiring a political opposition firm to dig up dirt on congressional critics or potential
critics of Facebook during the hearings over Facebook. Well, you know, you get to a point where you've got to do two things.
And in the United States, we have done two things, and we did them in the 20th century, in response to that huge aggregation of economic power. One
is regulate, the other is break up big monopolies that have too much power. And those two responses by the public to make sure that these giant
companies are comporting with the public interest are the only ways of actually getting them to do so. You can't just trust that they're going to
suddenly --
NEWTON: No --
REICH: Stop making profits.
NEWTON: Yes, we've learned a lesson that we definitely cannot trust them. I want to distill two of the points. First, you're saying that these
companies stifle innovation and that's because big tech sweeping patents, the data, their growing networks actually are dominant platforms and do
not encourage innovation.
And second, you're saying this problem is also political. Too much political power in the hands of the tech companies.
REICH: Yes, and those are -- those two problems are very similar to the problems we faced in the 1880s, 1890s. That is you have giant railroads
and oil companies and steel companies, they were keeping competitors at bay. And what we're seeing now with the giant tech companies is that they
are actually stifling innovation because they're keeping smaller companies out of the technology space.
And secondly, as we saw in the late 19th century, when big companies corrupted politics, these giant companies and Facebook, the expose about
Facebook make it very clear, they are funneling huge amounts of money into Washington, they are potentially intimidating legislators with their power
--
NEWTON: Mister --
REICH: And that kind of power has a very negative political --
NEWTON: Mr. Secretary --
REICH: Effect --
NEWTON: I'm going to hold you right there only because the president is speaking. We're going to listen in.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Florida was a tremendous success with both the Governor Ron DeSantis, he'll be a great governor and
the Senator Rick Scott. And as you know, Ohio was a great victory and a lot of great victories.
[15:40:00] So we're very happy about that. We put out a statement on Saudi Arabia, which I guess most of you have seen, and we'll see how that
all works out. It's a very complex situation, it's a shame, but it is what it is.
(CROSSTALK)
Because it's America first for me, it's all about America first. We're not going to give up hundreds of billions of dollars it orders and let Russia,
China and everybody else have them. It's all about -- for me, very simple, it's America first. Saudi Arabia, if we broke with them, I think your oil
prices would go through the roof, I've kept them down, they've helped me keep them down.
Right now, we have low oil prices or relatively. I'd like to see it go down even lower, but I think that it's a very simple equation for me. I'm
about make America great again, and I'm about America first.
(CROSSTALK)
UNIDENTIFIED MALE: Are you basically telling us, Mr. President, that human rights are too expensive?
TRUMP: That what?
UNIDENTIFIED MALE: That human rights are too expensive?
TRUMP: No, I'm not saying that at all. If you look at Iran, just take a look at Iran, and you look at what they're doing, they are a terrorist
nation right now, although I must tell you, they're a lot better right now than they were when I took office.
When I took office, they were heading in a very bad direction. And at some point, things very positive frankly could happen with Iran, but we also
need a counter-balance, and Israel needs help also. If we abandon Saudi Arabia, it would be a terrible mistake.
(CROSSTALK)
UNIDENTIFIED MALE: (INAUDIBLE) --
TRUMP: I really can't understand what you're saying, sorry.
UNIDENTIFIED MALE: The "Washington Post" in a statement, put out a statement, they said that you're putting your personal interests, your
commercial interests --
TRUMP: Well, I have nothing to do with -- just so you understand, I don't make deals with Saudi Arabia, I don't have money from Saudi Arabia, I've
nothing to do with Saudi Arabia. I couldn't care less, and I will tell you, and as most of you know, being president has cost me a fortune and
that's OK with me. I knew that a long time ago.
But being president has cost me a fortune, a tremendous fortune like you've never seen before, but some day I will tell you what that is, but -- and I
knew that a long time ago because I don't do deals. I don't -- all I do is focus on this country and making great deals for this country.
I don't focus on making great deals for myself because I don't care anymore. So Saudi Arabia has nothing to do with me. What does have to do
with me is putting America first.
(CROSSTALK)
Wait, they're buying hundreds of billions of dollars worth of things from this country. If I say we don't want to take your business, if I say we're
going to cut it off, they will get the equipment, military equipment and other things from Russia and China.
Russia and China would be very happy because right now, we're doing very well against China, we're doing very well against everybody, including
Russia, and I'm going to keep it that way. And I'm not going to tell a country that's spending hundreds of billions of dollars, and has helped me
do one thing very importantly, keep oil prices down so that they're not going to $100 and $150 a barrel.
Right now, we have oil prices in great shape. I'm not going to destroy the world economy, and I'm not going to destroy the economy for our country by
being foolish with Saudi Arabia.
(CROSSTALK)
So I think the statement -- wait a minute, I think the statement was pretty obvious, what I said, it's about America first, yes.
(CROSSTALK)
TRUMP: Say it again.
UNIDENTIFIED MALE: Why was it appropriate for your daughter's personal e- mail --
TRUMP: Just so you understand early on, and for a little period of time, Ivanka did some e-mails, they weren't classified like Hillary Clinton, they
weren't deleted like Hillary Clinton, who deleted 33 -- she wasn't hiring, she wasn't doing anything to hide her e-mails.
I looked at it just very briefly today, and the presidential records, they're all in presidential records, there was no hiding. There was no
deleting like Hillary Clinton did. There was no service in the basement like Hillary Clinton had. You're talking about a whole different -- you're
talking about all fake news.
So what Ivanka did, it's all in the presidential records, everything is there. There was no deletion, there was no nothing. What it is, is a
false story. Hillary Clinton deleted 33,000 e-mails, she had a server in the basement, that's the real story.
(CROSSTALK)
UNIDENTIFIED MALE: Would you still be acting is the fact that your asylum policy has been put on hold.
TRUMP: Which policy?
UNIDENTIFIED MALE: Your asylum policy has been put on hold.
TRUMP: Well, you go to the Ninth Circuit and it's a disgrace. And I'm going to put in a major complaint because you cannot win if you're us, a
case in the Ninth Circuit.
[15:45:00] And I think it's a disgrace when people file -- every case gets filed in the Ninth Circuit because they know that's not law, that's not
what this country stands for. Every case that gets filed in the Ninth Circuit, we get beaten, and then we end up having to go to the Supreme
Court like the travel ban and we won.
The Ninth Circuit, we're going to have to look at that because every case, no matter where it is, they file it, practically, I mean practically, for
all intents and purposes, they file it in what's called the Ninth Circuit. This was an Obama judge.
And I will tell you what? It's not going to happen like this anymore. Everybody that wants to sue the United States, they file their case in
almost -- they file their case in the Ninth Circuit, and it means an automatic loss. No matter what you do, no matter how good your case is,
and the Ninth Circuit is really something we have to take a look at because it's not fair.
People should not be allowed to immediately run to this very friendly circuit and file their case, and you people know better than anybody what's
happening, it's a disgrace. In my opinion, it's a disgrace what happens with the Ninth Circuit. We will win that case in the Supreme Court of the
United States.
(CROSSTALK)
UNIDENTIFIED FEMALE: I saw that raid on bin Laden, is he a hero and when (INAUDIBLE) --
TRUMP: Go ahead, what do you have?
UNIDENTIFIED FEMALE: Will you answer my question?
TRUMP: I can't hear your question. I can't hear you, your voice -- your voice is not -- I don't know Admiral -- I don't know Admiral McRaven --
(CROSSTALK)
What?
UNIDENTIFIED MALE: Robert Mueller.
TRUMP: But they're all finished. The written answers are finished. I don't know. The lawyers have them. I don't know. They will. They will.
(CROSSTALK)
The written answers to the witch hunt that's been going on forever, no collusion, no nothing. They've been finished, finished them yesterday, the
lawyers have them. I assume they'll turn them in today or soon.
(CROSSTALK)
UNIDENTIFIED MALE: Are you afraid to go to a war zone?
TRUMP: No, I'm going to a war zone, yes --
(CROSSTALK)
What?
UNIDENTIFIED MALE: Are you happy with the sanctions on Iran?
TRUMP: Yes, the sanctions on Iran are very strong, very powerful, they're sanctions I think that have had a tremendous impact, more sanctions are
going on. We have a lot of tremendous support, and Iran is not the same country it was when I became president.
It's a much different country, and hopefully, at some point, we'll be able to make a fair deal and help Iran and help the people of Iran.
UNIDENTIFIED MALE: Mr. President --
(CROSSTALK)
UNIDENTIFIED FEMALE: Mr. President, do you really believe --
(CROSSTALK)
UNIDENTIFIED MALE: Should Julian Assange be able to go free?
TRUMP: Well, I know that Schumer's daughter works for Facebook which I just found out today, and if you look at what Facebook has been doing, you
know, they have some real explaining to do, how they're so Democrat- oriented, all of them. But I hear Schumer's daughter works for Facebook and I was very surprised and disappointed to learn that because nobody knew
that until now. Yes, go ahead.
UNIDENTIFIED MALE: Should Julian Assange go free? (INAUDIBLE) --
TRUMP: I don't know anything about him, really, I don't know much about him. I really don't. Go ahead.
UNIDENTIFIED MALE: What do you want Pakistan to do?
TRUMP: Say it --
UNIDENTIFIED MALE: What do you want Pakistan to do in the fight against terrorism?
TRUMP: I want Pakistan to help us. We're no longer paying $1.3 billion to Pakistan, we're paying them nothing because that's what they've done to
help us, nothing. And I cut those payments off a long time ago, we're not paying Pakistan any money because they're not helping us at all, and we'll
see where it all goes.
UNIDENTIFIED MALE: Mr. President --
(CROSSTALK)
TRUMP: I hope to have a good relationship with Pakistan, but right now, we're paying Pakistan nothing. I cut them off. They were getting $1.3
billion a year, they're not getting anything now.
(CROSSTALK)
UNIDENTIFIED FEMALE: You aren't spending Thanksgiving holiday, Mr. President --
TRUMP: Oh, you don't worry about Thanksgiving, these are tough people. They know what they're doing and they're great, and they've done a great
job. You're so worried about the Thanksgiving holiday for them, they are so proud to be representing our country on the border.
Where if you look at what's happening, Mexico, the people from Tijuana are saying wow, these are tough people, they're fighting us, they're in fist
fights all over the place. These are tough people that are coming in, now I understand they have 500 people that have been designated as let's put it
in a nice word, criminals, and these are the people that are coming in.
No, you don't have people coming in. The order today is not, we can get around that very easily. What I do say, Ninth Circuit is very unfair when
everybody files their case in the Ninth Circuit, they file it for a reason. As far as the troops, they are proud to be on the border.
They are proud to be defending our nation, and we're not letting people in. It's called Catch and Detain. It's not called Catch and Release like it
has been for many years.
[15:50:00] For many years, they called it Catch and Release. They don't call it that anymore. And our soldiers are doing an incredible job, and if
you look at the walls that they're building, and if you look at all of the barricades that they're putting up, they've done a great job.
(CROSSTALK)
UNIDENTIFIED MALE: Do you have any reaction to Michael Avenatti being arrested for domestic violence?
TRUMP: No, I wish him the best of luck. I wish him the best of luck.
UNIDENTIFIED MALE: What about the markets? Do you agree with Larry Kudlow that we're not headed to a recession?
TRUMP: No, I think we're doing great. I mean, as a country, we're doing great. Our unemployment is at a record low, you look at all of the
different statistics, I think the tech stocks have some problems, but that will come back, but no, I think we're going to do very well.
I'd like to see the Fed with a lower interest rate. I think the rate's too high, I think we have much more of a Fed problem than we have a problem
with anyone else. We're doing very well with China, China wants to make a deal very badly. They might not say that to you, but they want to make it
very badly.
I have another $250 billion worth of tariffs to put on, if we don't make a deal, and believe me, I will be putting them on. Because China has been
ripping off our country for many years. And they don't rip us off with me. We made a great deal with Canada, we made a great deal with Mexico, I
appreciate the help that Mexico is giving us at the border.
You see that people are not coming through, all of the fist-fights and the fighting that you see are done on the Mexico side. They're not coming in
here, but I appreciate what Mexico is doing. They can do more, but I appreciate what they're doing.
(CROSSTALK)
UNIDENTIFIED MALE: How can you say for sure that all of Ivanka's e-mails were preserved. Find the server --
TRUMP: Well, they were preserved. The lawyer told me they're all preserved. Historically, they're preserved.
UNIDENTIFIED MALE: Mr. Trump, what about the CIA assessing the company (INAUDIBLE) --
TRUMP: They didn't make a determination. And it's just like I said, I think it was very -- maybe he did, maybe he didn't. They did not make that
assessment. The CIA has looked at it, they've studied it a lot, they have nothing definitive. And the fact is maybe he did, maybe he didn't.
If you look at Iran, what they've done, they've been a bad actor, you look at what's happening in Syria with Assad, with hundreds of thousands of
people killed -- we are with Saudi Arabia, we're staying with Saudi Arabia. And by the way, just so everybody -- I have no business whatsoever with
Saudi Arabia. Couldn't care less.
(CROSSTALK)
UNIDENTIFIED MALE: Are the Saudis to be blamed for the murder?
TRUMP: No, this is about America first, they're paying us $400 billion- plus to purchase and invest in our country. That's probably the biggest amount ever paid to the United States. This is over a long period of time,
it means hundreds of thousands of jobs, billions of dollars of investment and product.
And if you think I'm going to let Russia have that money or those things -- if you think I'm going to let China make the military equipment -- hey,
China and Russia would love to make $100 billion worth of military equipment from Saudi Arabia.
We have the contracts. They wanted those contracts. That would be a big, fat beautiful gift to Russia and to China. They're not going to get that
gift. Just so you understand, it's about make America great again, it's about America first.
We're going to stay with Saudi Arabia. The other thing, Saudi Arabia is probably the second biggest oil producer. They've worked with us very
well, we've kept oil prices down. If you want to see oil prices go to $150 a barrel, like by the way, Russia would love to see that, all you have to
do is break up our relationship with Saudi Arabia.
(CROSSTALK)
What?
UNIDENTIFIED FEMALE: Do you mean what the Saudi Consulate did was more --
TRUMP: I don't know that he's going to be there, but if he is, I would.
(CROSSTALK)
UNIDENTIFIED MALE: Cindy Hyde, are you concerned about or --
TRUMP: So Cindy Hyde-Smith is a spectacular woman. She's a great senator. She came in, she's done a fantastic job in a short period of time. She
made a statement which I know that she feels very badly about it, and it was just sort of said in jest, as she said, and she's a tremendous woman.
And it's a shame that she has to go through this. I think she's going to do very well, I really believe she's going to do very well. I've gotten
to know her well, she is a person that loves the people of Mississippi. She loves the people of this country.
She is going to be a great senator -- I'm going to do two events in Mississippi on Monday. I'm doing one near -- let's see, I'm doing one near
Jackson and I'm doing one in the Gulf Coast, and we're going to do one in Tupelo, so we might even do three, but we're going to do two.
[15:55:00] I think Tupelo probably is definite, and I think Gulfport is definite. Cindy Hyde-Smith is a tremendous woman who truly loves the people
of Mississippi and our country.
UNIDENTIFIED MALE: Were you ever --
TRUMP: And I think -- and I think she is going to win third day.
(CROSSTALK)
UNIDENTIFIED MALE: Why don't you ever allow Ivanka be interviewed by a Democrat about the e-mails?
TRUMP: Oh, Ivanka can handle herself. Ivanka can handle herself. These are all in the historical records, there was no deletion whatsoever.
Unlike Hillary Clinton who deleted 33,000 e-mails. Unlike Hillary Clinton, who had a server in the basement, Ivanka didn't.
This was just early on when she came in. These calls were not classified, unlike Hillary Clinton's calls which were classified, and it's all fake
news.
(CROSSTALK)
I love the pardons for the turkey.
(CROSSTALK)
I have a daughter, but not --
UNIDENTIFIED MALE: You shouldn't follow -- you shouldn't follow Assad, why are still supporting his position?
TRUMP: No, I think what Assad has done is horrible. I mean, really horrible.
(CROSSTALK)
UNIDENTIFIED MALE: A question about reaching the online polls, would you feel, obviously, I can assume who do you think deserves first place, who do
you think deserves the second place?
TRUMP: It's called person of the year, right?
UNIDENTIFIED MALE: Yes.
TRUMP: It's no longer man of the year, right? I don't know, that's up to "Time Magazine". I've been there before, I can't imagine anybody else
other than Trump. Can you imagine anybody other than Trump? Have a good time, everybody, thank you.
END
