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Quest Means Business

Coronavirus Cases Jump After Diagnosis Criteria Change; Nissan Shares Closed Lower Rates After Profits Fell Some 83 Percent In The Last Quarter; Microsoft Ordered To Halt Work On Pentagon Contract. Aired 3-4p ET

Aired February 13, 2020 - 15:00   ET

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

[15:00:13]

RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: It is all over the place today, as we head to the closing bell, an hour left of trading.

Down very sharply in the morning, a slight -- oh, no it's not a slight -- a recovery throughout the course of the session, and we're hovering down

around 36.

The S&P and the NASDAQ have fared better. I'll update you over the course of the program. The markets and how they're looking and the factors, the

reasons why.

Global stocks are faltering on some alarming news from China -- 15,000 new coronavirus cases have been reported. We need to understand that.

The U.K. Chancellor resigns handing more control over Britain's economy to the Prime Minister, Boris Johnson.

And a new hope for Amazon. A judge temporarily blocks Microsoft from starting the government's JEDI contract.

We are live in the world's financial capital, New York City. Take it from me, it is this somewhere. It's a cloudy, rainy miserable nasty winter's

day. But it is Thursday. I'm Richard Quest, and yes, it's February the 13th, and I mean, business.

Good evening. Tonight, there are serious questions about China's response to the coronavirus outbreak, as the number of reported cases went up by

more than 15,000.

Now, there is a distinct reason for this. It appears that, it's not as if suddenly more people were infected or they discovered more infections, no.

It's instead officials in Hubei Province broadened their definition of what constituted a case of the disease.

Now, the numbers include people who exhibit symptoms, not just those who have tested positive, which begs the question, why did they do it?

The World Health Organization says the new method of counting will not apply outside that region.

At the same time, the Chinese government has dismissed key party officials in a major shakeup of the provincial leadership.

A sudden increase in coronavirus cases caused markets to fall sharply at the open in New York, and as you see throughout the course of the day,

there has been a slight recovery.

The Dow has pulled back somewhat, but shares of those companies at risk still down and they have fallen further having shown signs of recovery only

24 hours ago.

Also Chinese automakers are very much in problems warning of a huge shock to the industry, and the IEA talking about oil, says demand will fall this

quarter. You can see a straight linkage. China slows down, there's not the same demand for oil as indeed other countries in the economy, and therefore

the price falls.

CNN's global economic analyst, Rana Foroohar is with me from the FT. Rana, we've sort of glibly sailed past the economic effects largely on the

grounds that A, we say there'll be a recovery, a V-shaped recovery once it's over. And B, anyway, the global economy can handle it.

Is the thinking changing?

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Absolutely. And you know, to toot my own horn a little bit, Richard, I'll say that two weeks ago, when

this story first began becoming big news, I said this was going to matter economically. And frankly, it's just a numbers issue.

If you look at the importance of China in the global economy today, it's the third of growth. It's a third of global growth. That's more than the

U.S., Europe and Japan combined.

So whatever happens in China matters hugely. I think also -- the fact that -- the global markets are at a tipping point. They have been ready for a

correction for some time. You and I have spoken about any number of times, and I think that this could be it.

QUEST: Whoa, you dropped the bombshell right at the end there, Rana. I mean --

FOROOHAR: I'll tease it out with you.

QUEST: The news -- the markets have continued to rise, and despite momentary lapses with worries about the virus, we're still sort of at

records. But you're suggesting those records are at risk?

FOROOHAR: I think they've been at risk for some time, and let me tell you why. There are two forces that matter right now in the global economy.

One is Central Banks, what they do, how they do it, whether interest rates stay low, how much more stimulus can be pumped into the global economy? We

know that's what's kept markets up for some time now.

And what happens in China is the other factor and more importantly, how the government handles it. And I think that that's where investors are starting

to worry a bit.

[15:05:05]

FOROOHAR: You know, the folks that had faith in Xi Jinping's ability to sort of navigate all this are now saying, wait a minute, maybe this could

be China's Chernobyl moment. Maybe you're going to start to see protests off the back of how the government has handled this and that could trigger

other dominoes.

QUEST: The effect on global economic growth. Now, China, it will lose maybe one and a half percent. So let's say that goes down to four and a

half percent, which is bad for China.

But for the rest of us, if we lose just half a percentage point, the U.S. is growing quite strong. I agree that's going to hurt, but nobody is

talking about pushing into recession, are we?

FOROOHAR: Well, we were -- let's remember, Richard, we were already at risk of a recession six months ago, nine months we were having that

conversation. Now, had some positive numbers in the U.S. before coronavirus hit, and suddenly recession was off the table.

But I have long said that I think that there's an aspect of willful blindness here. If you look at the fundamentals, at a late stage in a

recovery cycle, you still have really very little job growth in the U.S.

You have parts of Europe that are probably going to trend downwards anyway for cyclical reasons.

And now you have China, which is the engine of growth, but also connected to so many other stories, the commodities story, the trade story, if that

starts to look shaky, I think that is going to have an impact.

And I think what you're going to see now though, is central bankers coming in trying to buffer what's happening, and of course, President Trump in the

U.S. looking to probably continue to smooth things out on the trade front, possibly even try and push through new kinds of fiscal stimulus in the U.S.

QUEST: Right. Rana, thank you. Rana is in New York.

FOROOHAR: Thank you.

QUEST: The Center for Disease Control has reported the 15th confirmed case of the virus in the United States.

CNN's chief medical correspondent, Dr. Sanjay Gupta is at the C.D.C. headquarters in Atlanta. Good to see you, doctor.

Now, firstly, this re-classifying by the Chinese authorities into symptoms, not just confirmed tests, does the C.D.C. buy that as being a legitimate

way to count numbers?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT Yes, they do. You know, when you look at these types of numbers and you see that there's tens of

thousands of people who have this infection from a public health perspective, you've certainly established that this infection is here, it

is spreading as they have in China.

One of the things that they wanted to try and do is -- they can't -- they're having a hard time keeping up with the testing.

So what they're basically saying, Richard, is if someone has been in this area, Hubei Province where we know the coronavirus is circulating and they

develop a pneumonia, that's confirmed by a by a CAT scan, they are going to be listed as confirmed cases of the coronavirus, not just clinical cases of

the coronavirus.

So, that is not that surprising, in fact that has happened with previous outbreaks. After a while, they don't even bother testing for it because

there's no specific therapy or anything that you're going to do based on the testing.

It's really to just establish the presence of the virus which they've done.

QUEST: Right. But in, for example, other countries where there are limited numbers of cases where pneumonias may be seen as part of the natural course

of a winter flu. What do you do then?

I mean, do you continue testing? At what point do -- you know, if I say, I've come back from China and I've got this thing, do you add me to the

list?

GUPTA: No. So in other countries, and even I think outside of Hubei Province, the original sort of definition -- case definition remains, which

is that you get the test and if the test is positive, that is a confirmed case.

I think that they're basically saying, specifically in China within this province that because it's clear that the virus is circulating, if people

have come in contact with someone that has coronavirus, they subsequently develop a pneumonia. That is, you know, again confirmed by CT scan. That's

enough.

That doesn't mean that that's going to be the case definition around the world. Not yet at least. If this does turn into a virus that is widely

circulating around the world, that may be the case.

But Richard, we used to talk about H1N1, you and I. That was every time someone got sick during that time, 10 years ago, they would test for the

H1N1 virus.

Now, we know it's widely circulating, so there's no need to test each time.

QUEST: Let's just talk about this because in my morning newspaper reading, it became clear that other countries still believe that they can quarantine

and control and stop the mass outbreak of this virus.

As you say, towards the H1N1, something about -- it just becomes part of the wallpaper, serious though it might be.

Let me ask you, do you believe that's a realistic possibility? Or is it now pretty much the case that it's just going to be a number and more and more

places are going to basically find that they've lost control of it.

[15:10:04]

GUPTA: That is the pivotal question and it's where I spent most of my time talking to Dr. Redfield, who's the head of the C.D.C., talking to him about

this very issue here.

Here's how I would put it. He believes there, there is a role for quarantining and even some of these travel restrictions that we're seeing

now. As you know, that's been at odds with some of the advice and recommendations from the World Health Organization.

But the way that he sees it, Dr. Redfield, is not so much we're going to prevent this virus from getting into countries around the world. It's

becoming increasingly clear that this virus is circulating to many countries around the world and will continue to do so.

I think what his point is, is that this is going to slow it down and the slowing down matters. Because during that slow down period, during that

extra time that you buy, you could come up with better strategies for isolation, perhaps new therapeutics to treat this virus, and maybe even a

vaccine.

So don't think of this as a binary thing. It's either here or not here. It's a question of how fast does it get here, and how quickly does it take

hold?

You know, so we spend a lot of time talking about that. It's a nuanced point, and so I think a little bit specific to this particular outbreak.

QUEST: Good to see you, sir. Thank you, doctor. Sanjay Gupta with us and we'll talk more about it, of course, as it develops. Thank you.

Now, Nissan shares closed lower rates after it said its profits fell some 83 percent in the last quarter. Nissan is struggling with low sales and the

road is not looking any easier.

It's warned, the virus is going to hurt its business around the world.

To talk about this, whenever we have an issue with automobiles, the person to fix it is the car coach, it's Lauren Fix. Lauren, let's deal first of

all with the virus as it is affecting those companies such as Nissan with their just in time supply.

How serious is this?

LAUREN FIX, THE CAR COACH: It's pretty serious. You can't produce a car with only 99 percent of the parts. And if parts are in the pipeline, and

they've been delivered or they're stalled and haven't been delivered, because there's no manpower to get them to the manufacturers, then you've

got a problem.

You've got installing of already some Hyundai plants, a couple other manufacturers that -- you know they're doing what they can finding other

suppliers. But sometimes you can't.

If it's a nut in a bolt, sure, but if it's a computer or an airbag, or something much more advanced, something electrical or an interface, you're

not going to be able to finish that vehicle.

So therefore that whole production line is stalled.

QUEST: Nissan has raised this, of course, but -- and it's a legitimate concern, and we'll see that in Toyota and Ford and everybody else's numbers

as they come out.

But how much of all of their poor performance is Nissan's own problems?

FIX: Well, Nissan's own problems is a whole another situation.

I mean, they're going back after Carlos Ghosn for a $91 million lawsuit because of the lawsuit. I mean, honestly, they're not going to really get

that money out of him. This is a coup, as I've been saying from day one and as far as Nissan is concerned, they did this to themselves, and it's going

to take a lot to get them out of it.

QUEST: Yes, but when you say that, I mean, what's the problem? Is it that they don't have a structure -- last night, Peter was telling us that they

don't have a strategy, a proper strategy on electric vehicles, or the Renault alliance and Mitsubishi also isn't working.

What do you see as being the fundamental issue with Nissan? Or maybe, I don't know, I don't drive one, the cars are no good.

FIX: Well, I don't -- I wouldn't say their cars are no good because I mean, I don't think anyone is building crappy cars today.

I think what -- the thing is, they do have the Leaf and it just hasn't sold as well as it could. The Leaf is there is their number one electric

vehicle. They were very early to market with that and it doesn't sell on a global basis.

Remember, you need to sell up everywhere, not just in China. And in the U.S., we're still only two percent of electric vehicles. In Europe, they're

still struggling and you're looking even in some places like the U.K. where 90 percent of their vehicles are diesel and petrol. So they're not ready to

move to electric.

But still, the big problem with Nissan is they have to start partnering and working closer with Mitsubishi and Renault and that's an issue.

QUEST: Talk more about it. Thank you, Lauren for putting it into perspective.

FIX: Thank you.

QUEST: And so to JEDI, and a judge in the United States has ordered Microsoft to temporarily stop work on the Pentagon's massive JEDI Cloud

computing contract.

You're familiar, of course with the issue. It is a win for Amazon. Amazon claims that President Trump exercised undue influence over the Defense

Department, basically told them to go with Microsoft, not with Amazon and Amazon Cloud Services or Web Services, which is much larger.

Let's talk about it. Brian Fung is with me. The idea that they -- that Amazon has now got a temporary injunction, how does that help them prove

the point?

BRIAN FUNG, CNN TECHNOLOGY REPORTER: Well, it essentially indicates that the judge may be persuaded by some early signs of what Amazon is arguing

here.

It could lead to, you know, more attention being paid to Amazon's arguments, as well as efforts by Amazon to get evidence by President Trump

and members of his administration including Defense Secretary Mark Esper, trying to get information from them as to what they knew about the JEDI

project and the contract and what the President may have said both to the Pentagon as well as to rivals that were competing against Amazon for that

contract.

And, you know, we're going to be finding out probably in a few weeks, whether or not the judge is going to be allowing Amazon to compel that

testimony.

So I think this is an early sign that Amazon is, you know, going to be receiving, perhaps some benefit of the doubt, at least in the early stages,

but we will just have to see how this litigation will play out.

[15:15:37]

QUEST: Good to see you. Thank you, sir.

Now, as we continue, you may not have heard of Rishi Sunak, oh, here's a picture he tweeted last December.

He was watching "Star Wars" with his boss, the British Chancellor of the Exchequer.

Now, the apprentice has replaced the Jedi Master. I'll explain after break.

(COMMERCIAL BREAK)

QUEST: There has been an abrupt shakeup at the highest ranks of the British government. After a fraught power struggle with Boris Johnson, the

Prime Minister and Sajid Javid, the Chancellor of the Exchequer, the Finance Minister who quit his post. Rishi Sunak who is now a close ally of

Prime Minister has been given the job of Finance Minister.

Javid explained why he felt he had to go.

(BEGIN VIDEO CLIP)

SAJID JAVID, FORMER BRITISH FINANCE MINISTER: The conditions that were attached was a requirement that I replace all my political advisers.

You know, these are people that have worked incredibly hard on behalf of not just the government, but the whole country. They've done a fantastic

job.

I was unable to accept those conditions. I don't believe any self- respecting Minister would accept such conditions. And so therefore, I thought the best thing to do was to go.

(END VIDEO CLIP)

QUEST: So here we have it, Downing Street. The heart of power in London in the United Kingdom, and the tensions that existed between the two neighbors

in Downing Street.

Now, we're all familiar with Number 10. That's where the Prime Minister lives. Number 10 Downing Street. It is the true seat of power, but it's not

the only seat in this street.

Next door is the Chancellor of the Exchequer, who lives at Number 11. Now, the Chancellor is traditionally, the second most important role in the

government, head of the Treasury, sets the budget for example.

And the budget box of course, which we are well familiar when they stand outside. The problem is, and by the way, there's actually a connecting door

on the ground floor between Number 10 and Number 11, so that the Chancellors can go backwards and forwards.

[15:20:15]

QUEST: But the Prime Minister gave the Chancellor an ultimatum as you heard. Sack your team or resign. The Chancellor, Javid, he quit.

It is seen as a power grab by the PM stripping the Treasury of autonomy and creating a new economic Advisory Board that will be split between the two.

What's worrying about this of course, is as the Prime Minister grabs power, this could disrupt post Brexit budget due on March the 11th.

John Rentoul is in London. He is the chief political commentator at "The Independent," and a visiting professor at King's College in London. Good to

see you, sir.

This is extraordinary. I mean, the mere fact that know what Javid did, but that the Prime Minister thought he'd be able to get away with imposing fire

your advisers, the only SPADs you're having are mine.

JOHN RENTOUL, CHIEF POLITICAL COMMENTATOR, "THE INDEPENDENT": Well, that's why many people speculate that Boris Johnson didn't expect Sajid Javid to

accept those terms.

And really that this was a way of forcing the Chancellor out, and it certainly looks a bit like that.

I mean, I think the Prime Minister wanted it either way. I mean, either he wanted Sajid Javid completely under control of Number 10 Downing Street as

you were just illustrating there, or he thought that Sajid Javid would just take up his bat and walk, which he did.

In which case, you know, Boris Johnson gets a Chancellor who is more compliant.

QUEST: But John, I mean, why does -- do these special advisers or SPADs as they are called, why are they so powerful?

I mean, surely, even if he has advisors in Number 11, as Chancellor, he could just turn around and say no.

RENTOUL: Well, he would have thought so. I mean, the point is these political advisers, you know, they only hold their jobs at the will of

their masters or mistresses.

I mean, you know, Boris Johnson acts through a number of political appointees, but there's a tension between them and the elected

representatives, the Ministers who are elected Members of Parliament, who Boris Johnson has to appoint to run the government.

And, you know, this is seen as a power grab on the part of Boris Johnson's Chief Adviser, Dominic Cummings, who wants to assert his authority and

control over political appointees throughout government.

QUEST: So John, does this affect any policy change because the new Chancellor is obviously going to be seen as patsy, and as a yes man for the

Prime Minister, but what about actual policy differences?

RENTOUL: Well, I mean, what was extraordinary was the Sajid Javid was actually seen as a rather weak Chancellor and one who was prepared to do

pretty much anything that Boris Johnson said.

But there was tension between them, and that was primarily over I think, I mean, in very simple terms, I think Boris Johnson wanted to spend a lot of

money on delivering for the new voters that he picked up in the election in December, especially in the North of England and the Midlands and Wales.

He wants to build huge transport projects for these places. He wants to improve public services for these people. He wants to do it faster. That

involves spending a lot of money and the Treasury is never happy about that.

And so Sajid Javid put up a bit of a resistance and now, Boris Johnson has steamrollered him.

QUEST: The interesting thing is here, we're at the very heights and tops of government.

These two men live next door to each other. Their flats are on the top floor of the building. But it goes back to those days of Tony Blair and

Gordon Brown. Again, Chancellor and PM who had a very difficult relationship.

But Blair was never strong enough to fire Brown.

RENTOUL: Well, he was strong -- he could have done it, but he never judged that it was in his interest to do so because he thought that Gordon Brown

was an impressive and powerful Chancellor who actually brought something to the government.

And now that's not something that I think Boris Johnson would say of Sajid Javid or Rishi Sunak.

And, you know, the Conservatives have taken the lesson -- maybe taken the wrong lesson from the Blair-Brown years, which is that, you know, conflict

between a Prime Minister and a Chancellor is a bad thing.

Actually, you could argue that it was a -- it was creative tension, and that Gordon Brown prevented Tony Blair from doing a number of stupid things

and vice versa.

Whereas if the Prime Minister has all the power, there's a danger that there's no checks and balances in the British Constitution.

[15:25:09]

RENTOUL: And either he could end up doing stupid things.

QUEST: We'll talk more about just when we see the policies and we see the budget and you'll help us understand what it's all about. I'm very grateful

to you sir, tonight. Thank you.

RENTOUL: My pleasure.

QUEST: In Hong Kong, when we return, Cathay Pacific says it needs to preserve cash amid with the coronavirus outbreak.

When companies start saying they need to preserve cash, it doesn't mean they are going out of business, but it certainly means things are extremely

serious. In a moment.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. We'll be speaking to the CEO of Inovio about the desperate

search for a coronavirus vaccine. Is it too late and if they do get it, what do you with it?

And Prince Harry courts big wigs at Goldman Sachs. He looks to a life beyond this Royal duties.

Before that, this is CNN. And on this network the facts always come first.

The deadly novel coronavirus may impact the world for some time to come, according to the director of the U.S. Centers for Disease Control and

Prevention.

Dr. Robert Redfield also says that the virus can be spread by people who aren't exhibiting symptoms, and that more research is needed to understand

the disease.

The U.S. President is now attacking his former Chief of Staff. The retired Marine General, John Kelly.

John Kelly reportedly said it was a killer to work for President Trump. "The Atlantic" reports he also said Lieutenant Colonel Alexander Vindman

was right to report President Trump's call with Ukraine's President Zelensky.

A surprise shake up in Prime Minister Boris Johnson's Cabinet, the U.K. Finance Minister, Sajid Javid has resigned after he was told he must

replace his political advisers.

[15:30:00]

Javid replaced himself by Rishi Sunak; the rising star in the Conservative Party who previously served as Chief Secretary to the Treasury.

Sudan says it will pay $30 million to the families of 17 U.S. sailors killed in the bombing of the USS Cole. Al Qaeda attacked the warship at a

port in Aden in Yemen 20 years ago. A U.S. court has found Sudan provided aid to the terror group. Sudan denies responsibility but wants to be off

the U.S. lists of terror sponsors.

The International Olympic Committee says the Tokyo Summer games will go on as planned despite the spread of the coronavirus. There are at least 250

confirmed cases in Japan. The games are set to begin in July.

Our top story, a sharp spike in the coronavirus cases as officials change the definition and how they're classified. There's a hope to find a

vaccine. One company, Inovio Pharmaceuticals hopes to start tests on human patients by the Summer. Joseph Kim is the CEO, he joins me now. I mean,

it's always good to have a vaccine, doctor. Thank you for joining us. But it will be too late, won't it?

JOSEPH KIM, CHIEF EXECUTIVE OFFICER, INOVIO PHARMACEUTICALS: Thanks for having me.

QUEST: I mean, this thing will have blown itself out or at least will be in its later stages.

KIM: Well, looks like the outbreak is going to be even more widespread than experts earlier thought. So, by the Summer, having a vaccine that can

be shown to be effective and safe in human test subjects, I think will be a great step forward.

QUEST: Once, you've identified the genome of this -- of this virus -- and please, I'm not in any way trying to diminish the difficulty. But I want to

understand the difficulty. Once you've identified the virus, how easy is it to create a vaccine?

KIM: Well, Richard, the biggest problem in vaccine development traditionally has been it's taken too long. You typically need to get a

virus, grow them up, and use that in an altered form as a vaccine. What Inovio is doing is just transformationally different, using a DNA medicines

platform. After getting the genome sequences of the virus, we're able to construct our INO 4800, this vaccine to prevent COVID-19 infection, in a

matter of just three hours.

QUEST: How -- but how do you -- I mean, don't -- I mean, when you say it like that, you make it sound like it's fairly straightforward. You find the

virus and ergo, and you take off the -- and you say, well, if we do this and this, it will -- it will kill it off or it won't spread. But it's much

more complicated than that, isn't it?

KIM: Well, certainly it's very complex. And to develop this vaccine, we've already started the preclinical testing. As we're starting the

manufacturing process for the clinical product, that will go into human volunteers early this Summer in the U.S. At the same time, we're designing

and planning for a trial in China almost simultaneously as our U.S. trial, because that's where the most infections are.

So we will be able to not only test the safety of the vaccine, but potential efficacy of the vaccine as soon as possible.

QUEST: I notice your share price is up 20 percent, which of course is entirely understandable in this scenario, deep -- OK. Do you look upon --

obviously, your first goal is to get a virus -- is to get a vaccine that will save people's lives and do this. But at the same time, if you do crack

this nut, your company will do extremely well, not that there's anything wrong with that.

KIM: Well, Richard, I think Inovio's DNA medicines platform is uniquely and very appropriately situated to rapidly respond to a modern-age emerging

infectious disease like this coronavirus. We've demonstrated successfully in a very similar virus, in the MERS virus, which is also in the

coronavirus family. We're about to go into phase 2 field clinical testing in the Middle East this year.

[15:35:00]

So, using the same approach --

QUEST: Yes --

KIM: We've done it before, we can do it faster than we had done with MERS, with the same thing that we did with zika infection a few years back. I

think this is a path that we have --

QUEST: Good --

KIM: Demonstrated that we can do this successfully.

QUEST: Doctor, it's good to have you with us, thank you, sir, I appreciate it. Thank you. Now, the other side of this well seen view may be -- oh, yes

-- Inovio may be up some 19 percent today. Shares of Cathay Pacific closed almost 1 percent down in Hong Kong on Thursday, it's hardly surprising. The

airline is saying it's seen a drop in demand for flights amid the virus outbreak.

And let's not forget, the Hong Kong-based carrier has already halted 90 percent of its flights to mainland China. It's now asking thousands of

employees to take three weeks of unpaid leave. And all of this from an airline that had been battling against the political disruptions that had

taken place both in Hong Kong and specifically at HKIA Airport. Kristie Lu Stout now reports from Hong Kong.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Cathay Pacific would like to take you on a tour of Asia.

KRISTIE LU STOUT, CNN INTERNATIONAL CORRESPONDENT (voice-over): Frequent flyers of Cathay Pacific may love or loathe the classic ads from decades

ago, promoting award-winning service and gorgeous flight attendants from and I quote, "ten Asian lands". Today, this Hong Kong-born flight attendant

has an expression you cannot see. She wears a mask during the outbreak, and to protect her identity as she speaks frankly about keeping her job, using

the pseudonym, Emily.

UNIDENTIFIED FEMALE: Worrying that there might be redundancy or even -- yes. Redundancy is the worst.

LU STOUT: Emily has been a Cathay cabin crew member for seven years, she enjoys her job but fears for the future. Cathay usually flies about 34

million passengers every year, serving over 200 cities around the world from its hub at Hong Kong International Airport.

(on camera): The outbreak has hammered Cathay Pacific and the global airline industries. Passengers canceled their travel plans, and governments

imposed travel restrictions against recent visitors to mainland China. Analysts say the industry could get hit harder than SARS, which cost global

airlines $7 billion.

(voice-over): The collapse in passenger numbers has forced Cathay to slash flights worldwide by 30 percent and flights to mainland China by a whopping

90 percent. Cathay initially took a neutral stance as the protests began. Then Chinese state media slammed the airline's workers for taking part in

what it called illegal demonstrations.

Beijing banned any Cathay staff involved in the protests from flying into China. Cathay's former CEO and Chief Commercial Officer resigned, and a

culture of fear took hold as the airline cracked down on staff involved in the demonstrations. Workers tell CNN, many were fired. Cathay says

dismissals were all made within regulations. Yet, despite all the turmoil, analysts say the airline's long-term prospects are a positive.

GEOFFREY THOMAS, EDITOR-IN-CHIEF, AIRLINERATINGS.COM: They are the major airline in one of the great hubs of the world. So while they'll take a

battering, they will bounce back. In SARS, they laid off staff when they had a 40 percent cut in capacity over about an eight-week period. Then in

2009, when the global financial crisis hit, again they asked 17,000 staff to take four weeks unpaid leave. So it's not unusual for Cathay.

LU STOUT: But as the current outbreak drags on, businesses are struggling to deal with the financial turbulence caused by the coronavirus. Cathay is

asking its 27,000 employees to take three weeks off without pay, without mention of layoffs. In a statement, the airline says, "in view of the novel

coronavirus outbreak and also significant drop in market demand, we announced massive capacity cuts, preserving cash is the key to protecting

our business." Emily says she will take the offer, fearing she could be let go.

UNIDENTIFIED FEMALE: I'm afraid if I don't participate or if not enough people participating in it, there might be more measures to be put in place

in order to use management terms preserving cash.

LU STOUT: Back in the day, Cathay Pacific promised an experience for its passengers to -- it's a message the iconic airline needs now more than ever

as Hong Kong struggles with uncertainty. Kristie Lu Stout, CNN, Hong Kong.

(END VIDEOTAPE)

QUEST: President Trump's nominees for the Fed were before Congress today. One in particular was in the spotlight. We'll talk about it in a moment.

(COMMERCIAL BREAK)

[15:40:00]

QUEST: Two of President Trump's nominees for the Federal Reserve went before Congress today. In one particular case, one in the spotlight was

Judy Shelton, considered controversial for past comments on the gold standard. Now, she seemed to walk back comments like the ones she made to

me in 2016.

(BEGIN VIDEO CLIP)

JUDY SHELTON, U.S. FEDERAL RESERVE NOMINEE: I would not advocate going back to a prior historical monetary arrangement. I think it's really

important to acknowledge that the power to regulate the value of U.S. money is given to Congress by our constitution. And Congress has created

the Federal Reserve as an independent agency, and given it its monetary mandate. That is the framework under which I will make decisions if

confirmed.

We need another Breton Woods or at least we need to be thinking in terms of a neutral reference point, a global unit of account. I mean, something like

a gold standard even, updated to reflect a digital world and fast-moving financial flows.

(END VIDEO CLIP)

QUEST: Clare Sebastian is here, I'm sure there's plenty wiggle room and nuance that she could get out between the two.

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Right --

QUEST: Why is she controversial?

SEBASTIAN: Well, it's -- because she's controversial on both sides of the aisle. It's not just Democrats who are concerned about this Trump

nomination, it's Republicans as well. She's controversial because of the shifting views on the gold standard, on things like interest rates -- it

was only just a few years ago that she said that ultra low rates were flooding wealthy investors and corporate borrow with cheap money while

savers with ordinary bank accounts have been a blow to -- accept next to nothing returns.

Now she told "The Washington Post" last year that rates should be cut as expeditiously as possible, and she defended that stance again today, saying

everyone else around the world was cutting rates, that was devaluing their currencies against the dollar, and that was affecting employment in the

U.S.

But it's not just her views, Richard, it's the fact that she's a potential fox in a hen house here. People are worried that Trump is nominating

someone to the Fed who questions the very sort of powers of the Fed itself, whether they should have the power for rate setting, whether you know, they

are the ones who should be regulating the money supply.

QUEST: There's no question about her academic --

SEBASTIAN: Right --

QUEST: Suitability for this position. I mean, the woman is a raft of accolades and academia behind her.

SEBASTIAN: Right, she was the U.S. representative on the European Bank for its reconstruction and development, that's her most recent post, she's, you

know, widely published and all of that. But the point that the senators here who are worried about this are making is that, she's outside of the

mainstream. Her views are somewhat outlandish, and the weight of this kind of nomination -- because don't forget, this is 14 years that you nominate

someone to the Federal Reserve Board.

[15:45:00]

There are very few posts like that in Washington. And I think that's why you see a lot of concern ahead. There was very little about the other guy,

by the way, Christopher Waller today --

QUEST: Right. But there's also -- one of the issues always comes up, and I heard yesterday in Jay Powell's -- or in Jay Powell's testimony before the

-- before Congress. Not just the role of the Fed, but the role of the ability to audit the Fed and audit the monetary policy-making part of it.

That sort of -- that power that the Fed has that really can't get questioned in any other forum.

SEBASTIAN: I mean, in terms of how Congress and --

QUEST: Yes.

SEBASTIAN: That's way it's going -- well, I mean, there was some concern there. She kept saying as you heard that, you know, Congress has granted

the independence to the Fed, but there are --

QUEST: Right, but that's an implied --

SEBASTIAN: Right --

QUEST: Criticism of the Fed and the ability to use its own monetary policy, which can debase the currency by interest rates and other things

and flooding the market with money.

SEBASTIAN: Well, and she has questioned, you know, that in the past. In fact, Richard, in a "Wall Street Journal" op-ed just last year, she said,

you know, it's wholly adjustment, entirely prudent to question the infallibility of the Federal Reserve and calibrating the money-spread, she

said, the Fed's response to the meltdown in 2008 -- she's referring to may have exacerbated the damage.

So, she's entirely skeptical of the institution to which she's being nominated for. And she also spoke about President Trump's own interference

in the Fed, his criticism of Jay Powell. I think we can listen to a little bit about what she said that. That was pretty interesting.

QUEST: Have a listen.

(BEGIN VIDEO CLIP)

SHELTON: I think what we've seen historically is some Fed Chairmen have felt they were being pressured behind the scenes. In some ways it's

refreshing if that's out in the open.

(END VIDEO CLIP)

SEBASTIAN: It's refreshing, Richard, I don't think is the word that you would hear Jay Powell use probably about the president's interfering. So, I

think we may hear those repeated again back to her.

QUEST: Thank you. Dubai is gearing up for one of the largest events in the world this year. Expo 2020 is to host more than 190 countries and is

expected to bring massive economic benefits. CNN's John Defterios has more from Dubai.

(BEGIN VIDEOTAPE)

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR (voice-over): It's been touted as the world's greatest show. And just south of Dubai, construction for the

event is well under way. The Dubai Expo site is the size of more than 600 football pitches, and is said to be the largest event ever held in the Arab

world.

Over six months starting from October, 192 countries will showcase culture and innovation. It is promising to display incredible architecture,

cutting-edge infrastructure, and never seen before technology. With 25 million visitors expected, it's pegged to bring a major boost to the

economy. According to an independent report from global consultancy firm Ernst & Young, between 2013 and 2031, it will lift the country's economy by

more than $33 billion, support the creation of over 900,000 jobs.

And during the event, it will contribute 1.5 percent to the annual GDP of the United Arab Emirates.

MAHA AL GARGAWI, VICE PRESIDENT, EXPO 2020 DUBAI: Different sectors have believed or estimated to benefit from this economic boost, mainly the

retail industry, the FNB, the aviation, construction.

DEFTERIOS: And it's the hotel and hospitality sectors that are some of the top industries to benefit most. New hotels are coming on stream with

160,000 rooms to be ready in time for Expo 2020. And a luxury hospitality group with 11 hotels across Dubai, including the famous Burj Al Arab says

it's ready.

ALEXANDER LEE, CHIEF COMMERCIAL OFFICER, JUMEIRAH GROUP: Actually, we're getting ready for Expo 2020, and we know that the Burj Al Arab will be one

of the most iconic and visited hotels within the marketplace. We've introduced a whole team of talented new chefs, many of them with Michelin

Star backgrounds, so we know we can wow all of our visitors.

In addition, we've enhanced the number of our properties with complete renovation.

DEFTERIOS: By hosting this global event, the UAE hopes it will leave a lasting economic legacy and raise Dubai's international profile as a

leading tourist destination. John Defterios, CNN, Dubai.

(END VIDEOTAPE)

QUEST: Now, when we return, a new business opportunity could be on the horizon for Prince Harry. This time it involves one of Wall Street's

biggest players. In a moment.

(COMMERCIAL BREAK)

[15:50:00]

QUEST: Apparently, Prince Harry has been in talks with Goldman Sachs about potentially appearing on their online interview program, a source is

telling CNN. Now, although, the series would be unpaid, it's a business opportunity for Harry and his wife, Meghan, as they work to become

financially independent. Harry has already been spotted on camera talking to Bob Iger over here. He's also partnered with Oprah for "Apple TV Plus".

They want you to join in the conversation, get out your digital devices, phones and the like, cnn.com-slash-join. The answer is, is it wrong for

Prince Harry to work with big banks like Goldman Sachs? Is it wrong? Simple. Yes or no? Vote and you'll see the results on the screen in front

of me.

Now, Max Foster, our royal correspondent is here. We'll get to your thoughts. Good to see you.

MAX FOSTER, CNN ROYAL CORRESPONDENT: Good to be here --

QUEST: Good to see you, sir.

FOSTER: Your set's very fancy.

QUEST: You deal in fancy places all the time as you live in and around -- so, tell me, what about this Goldman Sachs business? Harry and Meghan

earning money-making speeches.

FOSTER: Well, it comes off the back of the JPMorgan event in Miami last week where he spoke, and they're not telling us whether or not he'll be

paid for that. Which suggests that he probably was. Then this Goldman Sachs event, which is unpaid. But I was speaking to a couple of people in the

know last night here in New York, and they suggested that actually this unpaid interview series is a really great way of getting onto that speaker

ladder within Goldman Sachs.

QUEST: So, when you say speaker series, he's interviewing or he's being interviewed?

FOSTER: He's being interviewed by a director at Goldman Sachs typically. It's not confirmed, I don't think. And they're also saying people on the

royal side, suggesting that actually, there's been an ongoing relationship with Goldman Sachs in relation to some of his patronages and causes

previously.

QUEST: Eyebrows being raised by all of this?

FOSTER: I think so because it's very quick. They've said they want to act -- become financially independent, but they extricated themselves from the

royal family very quickly, very suddenly. It had a massive repercussions on the monarchy. And now, many people feeling as if they're rushing into this

and going straight to the very top level of --

QUEST: Well, the most -- the most controversial level as well in many cases -- I mean, Goldman Sachs certainly has controversy over where money

has gone. But let's look at it this -- let's be men of the world, Mr. Foster. If you're going to give up the sovereign grant which you have and

the Duchy of Cornwall, you've got to make money somehow --

FOSTER: Yes --

QUEST: And to pay for that sort of life -- well, she's going to have to go back to acting to get the millions in or he's going to have to give -- he's

going to have to give speeches.

FOSTER: And they said they are going to continue looking after their causes and campaigning on the things that they were doing. That's very

expensive. And you probably do need Goldman-level money to support that kind of charitable work. And also any of these projects that they're going

to be going into are going to raise some sort of conflict of interest.

So, it's just whoever they go to, whoever they're being paid for, someone's going to dig something up.

QUEST: Is the palace looking at all of this distastefully?

[15:55:00]

FOSTER: I think the palace feels that they dealt with this at the time, he's either in or he's out. These conflicts of interest they expected to

come up, and because he's left the royal family as a working royal, it's no longer -- it doesn't necessarily reflect on them. The one outstanding

issue on all of this, and they're reviewing it in a year, is whether or not they're going to be allowed to continue using royal within their brands,

Sussex royal is their current brand.

And the Garter King of Arms currently is considering this matter.

QUEST: Well, our viewers are far more men and women of the world, 70 percent of you say, it is not wrong -- yes, looking at you, you're

surprised.

FOSTER: I just -- I'm surprised that going straight to a big bank isn't more controversial and not going for a more of a mid-level, less

controversial form of payment.

QUEST: Oh --

FOSTER: I don't know. I mean, and it's also views depending on where you are.

QUEST: Very good point. Thank you, good to see you. That's why you're the royal correspondent, diplomatic to the end. However, I will have a

profitable moment after the break, and I'll break which I know.

(COMMERCIAL BREAK)

QUEST: Tonight's profitable moment. So Sajid Javid has gone as chancellor of the Exchequer, and a new yes man, for want of a better word, has been

put in its place. The Prime Minister now has an iron grip control, and it begs the question as to why? What was so significant about making sure that

Javid actually had the same special advisors and political advisors as the Prime Minister. This is about power. It's about control.

And clearly, Sajid wasn't prepared to do what Boris Johnson wanted because when he offered him the job, and he told him the conditions, he must have

known that the chancellor was going to say no. And he didn't -- well, that wasn't very well put together. And as for the new chap, well, what sort of

-- what sort of power does he have? No one has ever heard of him.

He's barely done any jobs in government of any seniority. And all of a sudden, he has one of the great offices of state. He is the chancellor of

the Exchequer at a crucial time in the U.K. economy. He will have to prove his mettle. The onus will be on him to prove that he's not just a yes man

for the person next door, as Boris Johnson grabs and tightens control over the treasury.

And that's QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it is profitable. No

records, but there we are.

(BELL RINGING)

END