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Quest Means Business
Iranian Foreign Minister Zarif Resigns; U.K.'s Labor Party Moves Toward Backing a Second Referendum; Bank of America to Drop Merrill Lynch Name; Housekeepers Union Strike Across the United States. Aired 3-4p ET
Aired February 25, 2019 - 15:00 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: Day starts off with much optimism on the back of China, you'll hear us talk about China a lot during
the program.
Day started off good. A couple of peaks during the session, and with an hour to go before the closing bell, slightly off the tops, but still
showing reasonable gains because this is what's been moving the markets.
The bulls are back in China and Donald Trump is teeing up what he's calling a signing ceremony on trade. GE's new boss gets some help from his old
employer. It's a massive spinoff and GE shares are soaring, up by as much as 8% at one point.
A second referendum or a second vote is officially on the table. Britain's opposition, the Labour Party is raising the stakes with Brexit. We'll talk
about that. We are live in London today. It is Monday, February 25th. I'm Richard Quest in London where, of course, I mean business.
Good evening from London. Tonight, the U.S.-China deal isn't signed nor is it sealed, and at the same time, investors are acting as if it's been
delivered. Stocks in Shanghai jumped more than 5%. That's the biggest single day rally in three and a half years and it puts it back as a bull
market. President Trump -- look at the way the U.S. market is. The Dow Jones went up. President Trump looking at it all and says, "A deal is
nearly there."
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I told you how well we did with our trade talks in China and it looks like they will be coming back
quickly again and we're going to have another summit. We're going to have a signing summit which is even better, so hopefully we can get that
completed, but we're getting very, very close.
(END VIDEO CLIP)
QUEST: Now, the market has gone up and down in tandem with the trade war. China's investors have been on a particularly violent ride. The Shanghai
composite is up 18% so far this year. It is still off 10% in the last 365 days. Now, remember, China has many more retails investors than you and me
for example, of the Chinese equivalent than the United States or Europe. It means the government is particularly interested in keeping the market
stable and growing.
As long as that's growing, people are happy. The reality, of course, is in the U.S. and in the rest of the world there is a certain indirect interest
in the market through pension funds, but not directly in the same way. Patrick Chovanec is with me, the chief strategist at Silver Crest Asset
Management. Is it your feeling -- good to see you first, sir, as always -- is it your feeling that a deal with China is as close as the President is
making clear?
PATRICK CHOVANEC, CHIEF STRATEGIST, SILVER CREST ASSET MANAGEMENT: So, I would say that it's important to realize that no matter what the hand shake
is, no matter what the agreement or the signing ceremony might be that the resolution of the issues between the U.S. and China on trade are a process.
They are not a hand shake.
So it is not just about enforcement over time, it's also about structural changes to the Chinese and even to the U.S. economy that would get us where
we want to go. That said, there is one very important deliverable that markets are responding to right now, which is that the President says that
there won't be an imposition of tariffs as long as these talks continue and as long as it looks like they are heading towards deal.
And that was something that markets were very afraid of, not just in China, but the United States over the second half of last year.
QUEST: Except even if tariffs, I mean, these higher tariffs have only been put off, again, in the same way that they were only put off when the truce
was first announced. That sort of Damocles of higher tariffs still remains.
I'm wondering, the U.S. market's failure to respond with as much joie de vivre as the Shanghai market, is that because it's sort of priced in, the
good news is priced in?
CHOVANEC: It's possible. I think that maybe some of this rebound in China is overwrought. There's a notion that has been brooded about including by
the President that the reason that China has ran into economic difficulties is mainly because of threat of trade war and the threat of U.S. tariffs. I
disagree.
I think China would be encountering a significant slowdown this year with or without any kind of trade friction with the United States and so even if
that's resolved and even if we have a great agreement ...
[15:05:05]
CHOVANEC: ... then I think China is still facing the same kind of difficulties that it would anyway. Those haven't gone away.
QUEST: Right, on the core question, which I define as being just how far the Chinese are prepared to make the structural changes necessary that the
U.S. wants and by that, I'm not talking about the IP theft or et cetera, property or joint ventures, I am talking about the sort of - the
procurement market access changes that go root to branch to the Chinese economy. Is it your feeling that is, if not, probable, possible?
CHOVANEC: It's a tough deliverable. And you know, one reason is there's a lot of people who will say, "Well, China's economy is in a bad spot so this
is the maximum -- this is the best time for the U.S. to extract maximum concessions from them."
Well, tactically speaking, perhaps, but strategically maybe not. The reason why is because what we want China to do is undertake a number of
reforms that actually they are a bit scared to do. They are concerned that it will lead to lower growth, more volatility, and so in some ways when the
U.S. puts greater pressure.
The U.S. has to walk a thin line because on the one hand, we want to put pressure on them to act; on the other hand, if we put so much pressure on
them that they feel that we're going to actually harm the Chinese economy, they actually may be inclined to try to pull back and instead of taking
that difficult road of reform and opening, to actually double down on some of the things that they've been doing like -- we just saw a huge surge of
credit in China to try to float off the economy, more of that, would be the likely response if they felt that the U.S. was destabilizing their economy.
QUEST: Patrick, good to see you, sir. Thank you. We appreciate it. We'll talk more about it that I am sure.
From the political and the diplomatic to the actual reality, Microsoft's CEO, Satya Nadella tells CNN, his company is taking a long-term view. When
it comes to China and trade. Satya Nadella spoke exclusively to Samuel Burke at the Mobile World Congress in Barcelona. Nadella says, he is
trying to look beyond the current political tensions and see the bigger picture.
(BEGIN VIDEO TAPE)
SATYA NADELLA, CEO, MICROSOFT: To us, we take a very long-term view whether it's China or whether it's Brexit or any other issue that is front
and center today. The key for us is to think about how are we participating in all of these countries, in all of these communities where
technology is creating local surplus? Because to me as a multi-national CEO, what's key is how do we create local opportunity and local
competitiveness and surplus for all of our partners and customers? And whether it's in China or whether it's in Britain that's the focus we have.
SAMUEL BURKE, BUSINESS AND TECHNOLOGY CORRESPONDENT, CNN: Sir, are there any adjustments you are going to have to make or you are looking to make in
that long-term view because of what's happening between the U.S. and China?
NADELLA: Not really. I mean, to me, I am mostly focused on saying, "Look, what is it we have to do to keep innovating and then making sure that our
participation in the countries that we operate in is adding value?" And ultimately, the governments across these countries will have to achieve a
new equilibrium for how trade and fair trade happen.
But that's not something I control. The thing that I can control is our innovation, and the opportunity we create around innovation.
BURKE: So, you don't look at moving any type of manufacturing of some of the Microsoft devices that have done so well?
NADELLA: Look, I mean, anything that we have to do in terms of tactical adjustments to supply chains because of some changing trade regime, we'll
look at it. But that's not - that's tactical. What long term is really focused on, how is our innovation helping our participation in the country?
But more importantly, the opportunity it creates for the people in that country.
(END VIDEO CLIP)
QUEST: Samuel, fascinating. Congratulations on getting the interview. Fascinating. There you got real insight, the tactical versus the strategic
and all too often perhaps, people like me are banging on about whether or not you're going to move a bit of production here or there because of
tariffs. He's not worried.
BURKE: You can see how he handles the trade wars, a reflection of the type of leader that he has been at the helm of Microsoft, a company that was
really looking over the edge at some point, especially when Steve Balmer left the helm of that company and has taken it to be the most valuable
company on Earth today.
But here at Mobile World Congress, China is inextricably linked with 5G. Remember the way that countries were judged on how much gold or oil or
spices they had in the past, 5G has been the currency of success for every country on Earth and no more so than for China.
[15:10:02]
BURKE: But what's interesting here is the C-change really continues. I can't find a single executive who will criticize Huawei. They want to
continue these partnerships. They want the trade war to end. And they want the accusations about Huawei to end so, of course, I also Satya
Nadella about the partnerships that he has with Huawei.
(BEGIN VIDEO CLIP)
NADELLA: For me, the key as a technology provider is to focus on creating trust in technology all around. I think it's very incumbent on us to make
sure, for example, when it comes to things like privacy, we really treat it as a human right and in fact there's regulation like GDPR and there is
going to be regulation even in the United States when it comes to cyber security.
One of the biggest challenges of cyberattacks is the people who are most impacted by it are now the regular consumers and small businesses, so I
think that all of the tech across countries, as well as government need to come together to protect the most vulnerable of populations. So I'm more
focused on creating trust in technology all around what we do.
BURKE: We've seen reports there may be some type of partnership between Microsoft and Huawei AI chips, for instance. Would you continue going down
that path or are you going to wait and see how the United States decides on what type of equipment can be used?
NADELLA: Look, I mean, as I have said, we've participated in China and we've had partnerships with Chinese companies and Huawei makes Windows PCs,
makes use of our software and so we'll continue to partner and if there are any --
BURKE: And you're going to continue with those partnerships?
NADELLA: Absolutely.
BURKE: A lot of people have soured on mixed reality, but Microsoft has found real success focusing on business relationships with these devices.
So I'm just curious, where do you see, which field do you think will bring in the most money for Microsoft in terms of HoloLens 2?
NADELLA: You know, we are very excited with HoloLens. When we first launched HoloLens, we knew that this was a new medium and it had to find a
new expression. And the place where HoloLens is being adopted is in the enterprise broadly, whether it's for a new way to collaborate and
communicate where the physical and virtual worlds come together or to deliver training in a way that you can in fact up skill your workforce. So
these are very horizontal span of all industries.
But also completely changes how you think about planning for manufacturing or construction or healthcare.
BURKE: Why do you think that some Microsoft employees are unhappy with the use of HoloLens with the Department of Defense?
NADELLA: You know, first of all, we welcome dialogue with our employees on a continuous basis. When this first came up, we had the dialogue and we
deliberated and we made a principle decision that we are not going to withhold technology from institutions that we have elected in democracies
to protect the freedoms that we enjoy and we were very transparent about that decision and we'll continue to have the dialogue. And we are also
cleared eye about the responsibility we have as a corporate citizen on the unintended consequences of technology and we have done this with privacy.
We have done this with cybersecurity, even calling for a Geneva Convention and the same thing with AI and ethics.
(END VIDEO CLIP)
QUEST: Samuel, again, another fascinating answer from Satya Nadella, which makes me always think, he has always thought more deeply about -- he has
thought more deeply about these ethical issues of what their technology is going to be done with than many of his critics have.
BURKE: Absolutely. This is a man who is taking a look at these products and these aren't just PR packaged answers. You can tell he is thinking
from a very intellectual place and at the same time thinking about this big business picture and, and so I think it's incredible to see how he is able
to look at all of these different layers.
The thing that really struck me from this interview, Richard, is how he's gone and seen that he doesn't need to be the biggest. They don't need to
be in the phone market for instance. They don't need to have their own phone. They don't need to be the highest profile. In fact, being medium
profile and doing the best job possible in a lot of small areas, like the HoloLens 2, they didn't go for the broad consumer, they went for what makes
money and what they are up to is very profitable.
QUEST: Samuel, finally you've been to Mobile World many times just enjoy it.
BURKE: I absolutely enjoy it, but I have to say that President Trump has made these tech conferences like Mobile World Congress more relevant than
ever. You see leaders, not just from the mobile industry, the automotive industry and you hear them talking about so many things that have to do
with geopolitics more than anything. It's actually been Donald Trump who has connected a lot of dots and made these conferences that people feel
they have to come here and they are signing deals here more than ever and I've got say the 5G beehive fascinated me. Data collection to find out
when the queen bee is frail.
[15:15:06]
QUEST: Right. We'll be taking a close look at your expenses when you get back using every bit of modern technology to scrutinize them. Samuel Burke
who is in Barcelona. I know all the decent restaurants there. We will watch closely.
Coming up after the break, less than an hour to market close. The Dow is firmly in the green. The surge could be on the back of China. We also are
going to be talking about the Oracle -- I don't know, I didn't see this one coming -- Berkshire Hathaway's $25 billion loss in a moment.
(COMMERCIAL BREAK)
QUEST: Oh, you can't beat an award ceremony whether at the Oscars or, indeed, the business of the day awards. A big day for mergers and earnings
updates. Paul La Monica is with me and Paul, together, we're going to award the mergers. So here we go. Let's get under way with that.
In the category of Best Spinoff, the award goes to GE. The shares are up some 8% after GE announced it will sell its biopharma business as part of
an ongoing story line as GE tries desperately to pay down debt and plot the twists and while biopharma is done and GE's former CEO -- the GE CEO's
former company.
And now the next, drum roll please for the Best Sequel, it goes to Barrick Gold. Five months after Barrick merged with Randgold, it is now making
another bid for Newmont. And many sequels that nobody asked for. It's unsolicited. The Newmont CEO says Barrick is desperate.
And for today, drum roll, maestro please, the Biggest Flop award of the day goes to Warren Buffett. After a string of hits, Berkshire Hathaway has
posted a $25 billion loss for the fourth quarter. Some of the portfolio investment stars like Apple and Kraft Heinz failed to perform.
So Paul La Monica, looking at Warren Buffett, Barrick, that's extraordinary. They only just basically got Randgold and they're off
again.
[15:20:05]
QUEST: And GE, of those three which do you find most interesting of the day?
PAUL LA MONICA, CONTRIBUTOR, CNN BUSINESS: I would have to say that the Barrick Gold is possibly the most interesting one of the day, Richard,
because it is a little unexpected. As you pointed out, Barrick just did another deal for Randgold and Newmont Mining is trying to do its own buy
gold corps, so this hostile takeover bid, I mean, it strikes back to the 1980s, a hostile takeover, I mean, cue Michael Douglas in "Wall Street" and
green is good, which actually did win him an Oscar, I think this is a bit of a surprise, and now, it remains to be seen whether or not Barrick can
get this gold deal done.
I think it makes sense because gold price has been falling for years, so economies scale, the miners need to get bigger.
QUEST: All right, so, that's one particular deal. GE, another $24 billion or whatever it is, but this time, it is being ring-fenced from the sale to
pay off debt.
LA MONICA: Yes, this is something that is great news obviously for GE, Richard. It means though that they are probably now not going spin off
their healthcare unit. Maybe they will try and find other buyers for some of the divisions in that business that they didn't sell the data here,
which by the way, is the old company that Larry Culp used to run before he came over to GE, but now, you have to wonder, can GE find buyers for things
that -- the part of the business that makes x-ray machines and MRI's other medical equipment.
QUEST: So, just to be clear on that, be you said something. So GE has now said that the sale of medicals is off.
LA MONICA: Well they are not going to do a full blown spinoff which what they were -- there was a lot of speculation that that was what was going to
happen. It looks now that there is not going to be a spinoff of that unit because a big chunk of it is getting sold to Danner.
QUEST: Good to see you, Paul. I'll back in New York tomorrow. I'll see you then. Thank you.
Now, the Dow kicked off Monday, 175 point surge. It continues to climb for the year. It has hovered in the green most of the day. Investors welcomed
the latest trade news that President Trump has delayed his increase of Chinese tariffs.
We are less than an hour from close and it's holding the gains barely, but Matt McCall is with me, at Penn Financial in New York. Matt, we're holding
our own at over 100. But why didn't the Dow respond more to the China news which has been -- everybody said to me on the market, this has been the one
last piece of the jigsaw is it that it's priced in?
MATT MCCALL, FOUNDER AND PRESIDENT, PENN FINANCIAL GROUP: A lot of it has been priced in, Richard. Look at what the stock market has done in the
last nine weeks. I think we had a nine-week winning streak. We haven't had one of those in a very long time, so we've priced in a lot, kind of a
V-shaped recovery we've seen over the last two months.
The other thing is the deal is not done yet. The ink is not yet on the paper. Once that deal is done, you'll see the big surge. What did see
overnight though which is promising is a big, big rally in Shanghai in China because they were getting hurt a lot more than U.S. stocks were.
U.S. stocks are trading 3%, 4% from all-time highs. Chinese stocks were more, U.S. has really priced in and a lot of this is still getting done.
QUEST: When you say that stocks in terms of the indices are just three, four, five percent of all-time highs, that doesn't really sort of tell the
whole story though, does it? Because there are many of the many tech stocks that were very badly beaten up. Yes, I'll grant you some have
recovered, but most have yet and some have even taken further falls like Amazon for example.
MCCALL: That's a great point and what tells me, I guess, there are two ways to really look at this. The glass half empty is like well, they
couldn't make it back. They are laggards right now. Glass half full, in my opinion is, you have some of these stocks like NVIDIA, one of the
largest chip companies in the world, makes chips for everything going forward, still trading about 50% off its all high.
These companies are amazing values at this level, so you may have missed some of the bounces back in some of these big names, but the tech companies
to me, the money hasn't shifted back in there yet and when it does, that will be the next sector to lead the indices to all-time highs.
QUEST: Okay, so that happened two or three times over the last five years, the story has been tech leading higher. Now, arguably, December reversed
that. Why do you believe there would be, again, a case of tech leading the way up rather than say value or more broad based.
MCCALL: I still think we're in a growth based economy right now where growth will lead. When we start seeing corporate earnings dramatically
slow down, they will slow down a little bit in 2019, dramatically slow down, then you will see a shift in the value stocks. To me that money
still should be going into growth stocks. You're seeing strong corporate earnings growth before these tech companies, but what happens is you just
get a bit ahead of yourself, Richard.
[15:25:04]
MCCALL: the stocks got too far advanced and they got beat up. The pendulum swings too far to the other side, now creating opportunity.
QUEST: All right, so you mentioned NVIDIA. On "Quest Means Business," we like to keep an eye on the ones -- the experts, people like you think the
ones to watch. Who else should we be watching?
MCCALL: Well, you know, we were looking a lot recently, but there are some names we've been buying. You know, genetic testing, people talk about the
23 me and getting your genome done. I truly believe that some of the genetic testing will be every time you sign on to health insurance. You
get your genes tested and they will have personalized medicine. That is the future of healthcare in my opinion. Invitae is the name of the
company, a small cap that we own at the firm and just blowing the doors off the numbers. I mean, this is a niche area that is the future of
healthcare.
QUEST: All right, Matt, good to see you and I you know won't mind if I remind our viewers that you know what is coming next. Nothing that we say
on this program is an invitation or suggestion or indeed recommendation that you should put your money in. It just means that he put his money in
and that's the best way to look at it. Good to see you, Matt, as always for your help and guidance.
MCCALL: Thanks, Richard.
QUEST: Before we take a break, let me update you. News just in to CNN. Iran's Foreign Minister has resigned according to the Iranian state media.
Mohammad Javad Zarif announced the news on Instagram. He wrote, "I sincerely apologize for the incapacity to continue serving and all the
shortcomings during the service. Be happy and upbeat." Which will beg the question what he means by incapacity -- now was he pushed or did he fall?
When we return, Theresa May says her Brexit deal is within her grasp. She said that before. But the opposition leader aiming to grasp the whole
issue from her could be claiming the way forward is a people's vote, which would basically throw the whole thing up into the air one more time.
Discussing -- plenty to discuss after the break.
(COMMERCIAL BREAK)
[15:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I'm Richard Quest, there's more QUEST MEANS BUSINESS in just a moment. May's
opposition party is finally putting a second Brexit vote referendum, call it what you will. We'll hear from the chairman of Dana and we'll talk
about exactly -- Bianca with me to make sense of it all.
The name Merrill Lynch may have survived a financial crisis, it's not going to survive Bank of America's next week's rebranding exercise. We'll talk
about that and more. This is CNN and on this network, the facts always come first.
Iran's Foreign Minister has resigned. Mohammad Javad Zarif announced the news on Instagram. He wrote, "I sincerely apologize for the incapacity to
continue serving and all the shock coming during the service. Be happy and upbeat." Fred Pleitgen is on the line from Moscow. Any idea what that
incapacity is or was?
FRED PLEITGEN, CNN INTERNATIONAL CORRESPONDENT (via telephone): No, absolutely not, Richard, and certainly a resignation that's taken many
people by surprise. I last actually met and spoke to Javad Zarif about ten days ago in Tehran, and he still seemed very much capable of being the
Foreign Minister.
And he was very much looking forward to at that point going to the next security conference. He's obviously run into a lot of problems both
internally and externally over the past couple of years, really since President Trump took office. He is and was one of the main architects of
the Iran Nuclear Agreement which of course the U.S. then stepped out of under the Trump administration.
And that also caused them some problems at home. There are a lot of politicians at home, hard-line politicians who said a nuclear agreement was
a mistake to begin with. So he certainly was facing some political problems, but certainly, the last time that I saw Javad Zarif, he still
seemed very much capable and very much willing to remain in office.
A bit of a strange resignation, if you will, it was via Instagram, apparently, having confirmed in an interview with the main state-run news
agency hearing as well. But we're still trying to find out more about what exactly Javad Zarif's reasoning was for this and why he did it in the end,
Richard.
QUEST: And those last words, "be happy and upbeat". You don't normally get Iranian ministers resigning using those sort of words.
PLEITGEN: No, you're absolutely right. I mean, it's certainly very strange. Normally, what you expect in a resignation like this for him to
go to the supreme leader and to tell the supreme leader that he was thinking of resigning to essentially get the supreme leader's blessing if
he was going to resign from his office.
To do something like this via social media, via an Instagram account and those words "be happy and upbeat", it does seem -- it does seem quite odd
and it's certainly some of that that's caught our eye as well. Now, as I said, it does seem as though there has been a confirmation now from the
deputy spokeswoman of the Iranian Foreign Ministry --
QUEST: Right --
PLEITGEN: Saying that yes, indeed, that he has resigned. So you're absolutely right, it's a bit of a strange situation, but right now, you
know, Iranian politics are in a very interesting and very difficult state at the moment. So, obviously feeling a lot of pressure from the United
States, trying to stand up to that pressure.
A lot of economic turmoil in the country like that currency problem. One of the things that we're really looking forward to tomorrow is how the
Iranian market, how the Iranian currency going to react to this. They're already buckling under major sanction.
They have major economic problems --
QUEST: Right --
PLEITGEN: And now having a minister like that resigning, certainly someone who was very important face of Iran in the west. We're going to have to
wait and see what the impact of that is going to be on Iranian markets --
QUEST: All right --
PLEITGEN: On the currency and definitely on the economic situation, Richard.
QUEST: Fred Pleitgen watching that. Fred, at that moment, if there's more to report, let us know, but thank you. OK, I can keep this really simple.
This evening, the cat was put among the pigeons as Britain's Labor Party may have opened the way for a second referendum.
It now says it's -- Bianca is with me. It's much easier if Bianca explains exactly what has happened.
BIANCA NOBILO, CNN CORRESPONDENT: Today, the party have said that in order to avoid a dangerous Tory Brexit, they will be prepared to support a
second referendum. But first, they want to put down an amendment which lays out what type of Brexit they want to see. If that fails, then they
will then --
QUEST: Right --
NOBILO: Push for a second referendum.
QUEST: Right, so the sort of Brexit they want to see is a Customs Union, close alignment to the single market --
NOBILO: Yes --
QUEST: Basically following the EU --
NOBILO: Yes, both in the EU, agency -- right --
QUEST: By some definition, the worst possible outcome because effectively it's all the rules with none of the powers.
[15:35:00] NOBILO: Brexiteers will call it vassalage.
QUEST: Right, so it's not going to pass.
NOBILO: It's unlikely to pass, so then they're in a situation where they're judging to support a second referendum. And let's remember that
even though they don't have a majority in the house, the other minor parties like the Welsh National Party, the Scottish National Party, the
liberal Democrats, this new independent group which is basically formed of Labor defectors, all of them support a second referendum.
QUEST: But what's the vehicle? How do you get to that point?
NOBILO: So what you would do is they would put down an amendment that would get majority support in the House of Commons to make time to put a
day in the parliamentary calendar, to put a bill forward to say we're asking for an extension of article 50 and we'll legislate for another
public vote, then that would have to pass.
QUEST: So --
NOBILO: The government would be compelled to go back to the EU and ask for that extension.
QUEST: So that's not the route that I think was the Bowles Amendment which basically said we will approve the Prime Minister's deal, but only on the
basis that there's then a public vote on that deal.
NOBILO: So, there's a couple going around. The Kyle Wilson Amendment, which is a big one. I know you love it when I get geeky like this,
Richard, I'm just throwing me a moments in, that's being talked about this week, likely to be put forward, and that would want a ratification vote,
that's what they're calling it. A May's deal --
QUEST: That's a great, let's forget -- no --
NOBILO: Yes --
QUEST: Let's --
NOBILO: Revocation of --
QUEST: Well, let's forget the Kyle of whatever there is to one side at the moment. At the end of the day, the only thing on the table is the Prime
Minister's deal. And she said today, it's within grasp. Is there any indication that Europe is prepared to do anything more?
NOBILO: Europe keeps saying, the U.K. still haven't given us any form of proposal which they think will pass in the House of Commons. They've been
asking for that. MPs --
QUEST: They know what will pass --
NOBILO: Right --
QUEST: Take out, take out the backstop or make clear that the backstop is not permanent, which, of course, semantically means it can't be a
backstop, but let's not get into that, and the Commons will pass it.
NOBILO: Yes, so some kind of time limit or some kind of exit clause that's standard to international treaties. That's what the U.K. is pushing for.
Basically, Britain -- well, the Prime Minister and her government is trying to get the Attorney General in the U.K. to alter his legal advice, to be
able to tell MPs, particularly Brexiteers that the modification that you've given us means that we won't be tied in forever.
QUEST: Is it a no deal or Brexit still possible?
NOBILO: Yes, it's a default.
QUEST: Right, thank you. Now, I want you to join the conversation. Get out your phones and go to cnn.com-slash-join. So here we go. What's the
best course of action if parliament doesn't agree on a plan? Bear with me, parliament doesn't agree.
So is the best course of action a new referendum or suspend the article 50, i.e. the deadline extension or a no deal Brexit. Now, that's the extreme,
a no deal Brexit, some people really want that. The deadline extension is quite popular, but it was even suggested by Donald Tusk today as being
probably the only solution at the time being or a second referendum.
But that begs the question what you'd ask. If you go to cnn.com-slash-join now, you vote, you'll see the results on your screen and Bianca Nobilo is
not allowed to vote. The Bank of England has already offered its own take on the matter -- excuse me, Governor Mark Carney says a no deal Brexit is
the biggest threat facing the U.K. financial system right now.
And the head of the German automaker Daimler says seems to share those concerns. Dieter Zetsche says any damage to the British economy would hurt
his company too.
(BEGIN VIDEO CLIP)
DIETER ZETSCHE, CHAIRMAN, BOARD OF MANAGEMENT, DAIMLER AG: We have a big market there, they're our fourth largest market for our brand. And so if
the market would be affected, this would hurt us. And, of course, depending on potential customs being raised between Europe as we saw it so
far and U.K., this, of course, would have negative impact on us as well.
We have little possibility rather than repeating and repeating what damage that would do to both sides across the channel, and again, we're hoping
that the worse will not come.
(END VIDEO CLIP)
QUEST: Now, while Britain is still torn what kind of Brexit it wants, and you can see the voting on the screen, many of you think a second referendum
is exactly the answer. The deadline extension comes in at a paltry second. And a no deal Brexit -- well, it's interesting, 20-19 percent of you, I'm
guessing maybe some people in the U.K. are voting in that particular way.
Plenty of time to vote some more. European businesses now however must prepare for every outcome whatever happens below. CNN's Atika Shubert has
visited the continent's largest port, it's in Rotterdam to find out how it's bracing for Brexit.
(BEGIN VIDEOTAPE)
[15:40:00] ATIKA SHUBERT, CNN CORRESPONDENT (voice-over): At 42 kilometers long, Rotterdam is Europe's biggest and busiest seaport, and the
U.K. is the fourth largest customer here with 40 million tons rolling in and out annually.
No matter how hard Brexit looms, Rotterdam port is sounding the alarm.
UNIDENTIFIED MALE: And of course, we were hoping for a transition period, but therefore we sat together with the Dutch customs, prepare for the worst
and prepare for a no-deal scenario on the 29th of March.
SHUBERT: That could hit British supermarkets first.
(on camera): So, this is peak loading time at Daily Fresh Logistics. As you can see, this one is going straight to the U.K. after this. And they
run about 150 to 200 trucks a day. But after Brexit, this is all going to slow down.
(voice-over): Ninety percent of its business is delivering fresh produce across the U.K. within 24 hours.
(on camera): Here's how it works. A British supermarket can call in the morning to Daily Fresh Logistics for an order of radishes, peppers,
lettuce, tomatoes and by closing time on the same day, this will arrive on supermarket shelves. That's pretty fast. But after Brexit, it won't be
happening like that anymore.
(voice-over): Peter Tricked(ph) remembers waiting hours for customs before the U.K. joined the EU.
UNIDENTIFIED MALE: Always waiting, so when the day came, we voted, no customs any more, everybody was happy.
SHUBERT: Those waiting days are back. Daily Fresh says it will see delays of 48 hours initially as truckers will have to fill out eight times more
paper work just to get on the ferry to Britain. Still, it is determined to keep supplying the U.K. after Brexit.
UNIDENTIFIED FEMALE: But two years ago, you thought, oh, it's only -- we still have two years and then often you can go, we still have one year.
But yes, now it's only one month. And now, you think oh, that's going to be tight.
SHUBERT: No fresh tomatoes may be the least of it, and Rotterdam, when it comes to Brexit, the phrase you hear most is "hope for the best, prepare
for the worse." Atika Shubert at CNN, Rotterdam, Netherlands.
(END VIDEOTAPE)
QUEST: Merrill Lynch, the very name, once too big to fail has been suspended from Wall Street. After the break.
(COMMERCIAL BREAK)
[15:45:00] QUEST: Bullish on America, bullish on Merrill Lynch. It was one of the great trades in the financial world, and now one of the most
famous names on the -- on Wall Street is to be no more. The Bank of America is looking to phase out the brand which reported out of the
national crisis in 2008.
Now, the move marks an end of the era. Merrill Lynch was the troubled name to survive. Bear Stearns disappeared when it was bought by JPMorgan after
going bust. Lehman Brothers perished in the same year when the banks bought the access, Barclays bought most of Lehman's. CNN's Matt Egan who
has not gone bust is with me now. Why are they getting rid of Merrill Lynch?
MATT EGAN, CNN BUSINESS SENIOR WRITER: So, you know, it's interesting. Wells -- you know, Merrill Lynch survived the financial crisis, the brand
survived the financial crisis, but you know, a decade later, it's getting phased out. And I think what this really shows is that Bank of America has
decided that it doesn't need the mother Merrill brand any more.
Bank of America has now had a presence through Merrill Lynch on Wall Street for about a decade. And Bank of America itself is in much better shape
than it was ten years ago. The company reported record profits in 2018. Its stock price has more than doubled over the last three years.
And so, that's why we're seeing Bank of America say today that it won't use the Merrill Lynch any more in the trading division nor for the investment
bank division, it's even losing the Lynch, it's going to just Merrill in the Wealth Management Unit.
And you know, I think it's interesting because it's really the end of an era. Merrill Lynch has been around for more than a century on Wall Street
--
QUEST: Oh --
EGAN: And now, we're going to see it phase out.
QUEST: I mean, you know, the Merrill -- the man from Merrill Lynch, you know, middle America, I mean, had their savings with Merrill Lynch. There
was an office in every shopping mall, Merrill Lynch was the place you went to -- was the place you went to, to buy you mutual funds.
EGAN: It was, and Bank of America is taking a little bit of a gamble here, right? Because as you just said, there's real value in that brand. It has
such a strong history, and so, Bank of America is betting that it can continue on even without the Merrill Lynch brand. We'll have to wait and
see about whether or not that's actually going to work.
QUEST: Good to see you, Matt, thank you. When we come back in a moment, from teachers to housekeepers unions are striking across the United States.
And our guest, our guest famously said strike, learn to say the word and actually called for a general strike. Is she a modern-day lefty? Sara
Nelson is with us after the break. State of the Unions richly.
[15:50:00] (COMMERCIAL BREAK)
QUEST: Unions across the United States haven't been this active since the 1980s. From the wealthiest areas of California to the poorest in West
Virginia, teachers have gone on strike across the country, they've walked out in Arizona, Colorado, Kentucky amongst others.
And last year, thousands of Marriott hospitality workers joined in one of the largest hotel strikes in U.S. history. There are threats Las Vegas
might see its first strike in decades. And when the U.S. government shut down, government employees at airports staged sick outs after being forced
to work without pay.
My next guest even suggested a general strike could be needed to convince Washington that things need to change.
(BEGIN VIDEO CLIP)
SARA NELSON, INTERNATIONAL PRESIDENT, ASSOCIATION OF FLIGHT ATTENDANTS: There is bipartisan support to keep the government open with stable long-
term funding. Americans overwhelmingly support this. If Washington will not put an end to this crisis, we will take action to save lives and
protect U.S. aviation.
(END VIDEO CLIP)
QUEST: Sara Nelson is the International President of the Associates of Flight Attendants, the AFA joins me. Good to see you, Sara.
NELSON: Good to see you too.
QUEST: Are you -- are you turned into socialist Sara at a time when there does seem to be -- particularly in the Democratic Party, a very firm
socialist agenda.
NELSON: Well, no. This was really about making sure that we keep our government running, and making sure that we're standing up to 2 million
people being put out of work. Four hundred thousand people required to come to work without pay and putting into jeopardy our lives as flight
attendants and the people that fly with us.
QUEST: You became almost the public face of this rally against the shutdown.
NELSON: Well, look, flight attendants know very well what it means not have this layers of safety and security in place. We've seen gaps in
security before. I had to be a part of planning funerals and memorial services. And then we had to deal with all the bankruptcies that followed
because the industry suffered from that.
And so here we saw this coming, this completely man-made process where the government was not working to do their job to fund the government.
QUEST: All right, so, in term of the way you have framed the argument, and we are seeing a more active unionism, union action and we're seeing -- I'm
going to come back for a second bite at this, Jerry, more Democrat politicians prepared to adopt what some would see as a social liberal
agenda or a socialist agenda.
NELSON: Well, look, we've had a growing income divide in the United States and we've had more people working harder for less. And people are hurting,
and the rubber band is breaking all over the country. During this time, what we've also seen is decline in unions. So the answer here is to people
to -- for people to join and form unions in their workplace.
QUEST: How do you --
NELSON: And that's what we're saying --
QUEST: How --
NELSON: For check and balance.
QUEST: How do you convince people -- look, there's a blue collar generation from the last generation and before, that, you know, I'm a union
man, I've -- woman, I've been there throughout. But now, how do you convince people that the word "union" isn't a dirty word?
NELSON: Oh, Richard, what you're seeing as you're seeing women rise up in their workplace and women saying, we're not going to accept the wage gap
anymore, and we're going to have equal standing with our bosses and we're going to work for solutions.
When you see what's happening all across the country, these are mostly female unions that are stepping up and saying, we're going to take control
here. This has been screwed up long enough and we need to make sure that we have a world for our children to live in, we need to make sure that
everyone is safe.
We need to make sure that we have schools that provide equal opportunity. These are basic human rights that women are fighting for, and they're
joining unions and rising up new unions to do it.
QUEST: Did you really say to somebody, say the word "strike", say it if you can say it.
NELSON: I absolutely did. I -- you know, the strike is an important part of the collective bargaining process because everyone has to decide what
they are willing to do to stand up for what they care about, right? There's a risk for everyone.
And so it doesn't mean that a strike has to happen every time, but it's an important component to ensuring collective bargaining comes to solutions
because everyone has to decide what they're willing to do.
QUEST: So to look at the "New York Times" article which I'm sure you're well familiar and have quoted, you are described as a phenomenon. You are
talked off as being a potential leader of the age of the AFL-CIO, the collective union in the United States of unions and possibly political
office.
This is the big way you would get to mirror and tell me that you have no ambitions beyond your current role.
NELSON: Well, I think that what we've seen here is that --
QUEST: Do you have political ambitions?
NELSON: I think that what we've seen here is that flight attendants have tremendous power. And I actually believe that we touch more people than
any other profession. And by being the leader of flight attendants and being engaged in our politics and in our lives and in the people that we
care for, that we can make a real difference here.
[15:55:00] QUEST: I'm taking you on a flight attendant, I'm flying in after tomorrow morning. I want to make sure I have a decent seat. Good,
as always --
NELSON: Great to see you --
QUEST: Thank you very much --
NELSON: Great to see you and fly safe.
QUEST: Are you in politics?
NELSON: Politics --
QUEST: Yes, a little --
NELSON: Listen, I'm not ruling anything out --
QUEST: Yes --
NELSON: OK?
QUEST: Right, that good for now, go on and look at that.
(BELL RINGS)
That's it, thank you.
NELSON: There you go, Richard.
QUEST: As we continue, CNN is partnering with young people around the world for a student-led day of action against modern day slavery on March,
the 14th. We spoke to the CEO of Marriott International, Arne Sorenson who put 500,000 of his hotel workers through training to recognize the signs
of human trafficking. We asked him what makes you feel free.
(BEGIN VIDEO CLIP)
ARNE SORENSON, CHIEF EXECUTIVE OFFICER, MARRIOTT INTERNATIONAL: The walk in the woods, look at the scene behind us. I love walking and seeing
wherever it is I travel. And I like to be able to do it not in the confines of a fancy limo or in a secured car, but I like to be able to walk
in the local environment, seeing and interact with the people who are there.
(END VIDEO CLIP)
QUEST: Tell the world what makes you feel free, share your story using the hashtag "my freedom day". And we will conclude with the last few moments
of trading on Wall Street and a profitable moment after break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. So on a day when the Dow looks like it's going to continue its winning streak, Merrill Lynch is going to be no
more. Now, Merrill as it was, that bastion of market trading, your local broker that you went to see whose office was on every shopping mall across
America.
Well, that went a long time ago. And the crisis -- after the crisis, Bank of America bought Merrill Lynch and is now only two of course of the
original lot left Morgan Stanley and Goldman, and even they changed the way they're registered to be more like banks.
But the fact that Merrill Lynch went to Bank of America, and now BAC is saying, had enough of Merrill Lynch, I can sort of see why they've done it.
And it is a shame. Merrill Lynch is one of the grand old names of U.S. financial banking market.
And the fact that it will be no more is to be mourned. But no more than that because progress onwards and upwards. Now, that's QUEST MEANS
BUSINESS for tonight, I am Richard Quest in London. Whatever you're up to in the hours ahead, I hope it is profitable --
(BELL RINGING)
Oh, look at that, the day is done, the bell is ringing.
END
