Return to Transcripts main page
Quest Means Business
U.S. Crude Prices For May Fall Below $0 For First Time; No Deal Yet On U.S. Small Business Loan Funding; Germany Cautiously Begins Reopening Economy; Shake Shack Returns $10 Million Emergency Loan To U.S. Government; Campaign Urges People To Share Travel Memories Online; South Africa Wedding Venue Seeks Aid As Cash Dries Up; Capturing Carbon For Future Use. Aired 3- 4p ET
Aired April 20, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:00]
RICHARD QUEST, CNN BUSINESS ANCHOR: CNN breaking news, oil prices have turned negative. The most extraordinary development that took place today,
when the U.S. main blend West Texas Intermediate fell more than 306 percent. You see it on the screen, it is negative $37.63 a barrel. That
means producers are paying negative to get rid of the oil.
There are two factors behind this. One is technical. Market mechanics, which blend and which futures contract is currently being traded.
And the second is supply and demand. There are thin trading volumes. John Defterios is in Abu Dhabi.
John, explain how this can be. How can the oil trading contract be negative?
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: Well, it's a once in a lifetime event, Richard, as you were suggesting here, those who are
holding the physical oil are willing to pay others to take it off their hands primarily because they're running out of storage just less than a
month left of storage very likely in the United States right now with better than a half a billion barrels already on the market -- in the
physical market and there is no place to put it.
But I say, there's three factors. There's that storage factor. Number two, we know that demand in April and May is terrible and very likely, it is
going to be the same thing in June, averaging in the second quarter a demand drop of 23 million barrels, and something, the third factor that
many are overlooking right now, Richard, is that the dollar is rising.
So, those in the petro states are feeling the pain even more because of their production of oil and losing income in their local currencies.
I've never seen a spread in a month between May and June like we're seeing right now in the WTI market. I've been covering oil since the first bust in
1986 in that price war.
If there's a silver lining here, if you look at the June contracts and the comparison between Brent and WTI, the spread is $4.00 a barrel. That's
where we'll start tomorrow, but let's not ride home and say, wow, $20.00 to $22.00 a barrel will solve the problems.
In fact, we saw companies like Halliburton or Husky Energy of Canada making even deeper cuts.
QUEST: Hang on, John --
DEFTERIOS: They are likely to lose four to five million barrels in 2020 as a result of what we're seeing in the physical market today.
QUEST: All right, John, I want to go back and I want to delve deeper into this issue. So, you're saying that the May contract where there is no,
basically, demand, that's the one that has fallen so sharply, but the June contract, forward contract, is positive. It's $20.72, which gives this
split.
But if June's -- if June's demand does not live up to expectations, as we get throughout May, then that, too, is likely to fall.
DEFTERIOS: Correct, Richard. And in fact, we have had to ratchet down expectations, and we have had this shock in the market ever since Wednesday
because we have a spread between what the International Energy Agency is expecting for a demand collapse all the way through June and saying the new
normal for all of 2020 is a drop of better than nine percent or nine million barrels a day.
The folks at OPEC do not see it the same way and again, the IEA underlines something I thought was very interesting, Richard. It's almost like
governments that were not prepared for the COVID-19 crisis right now, they started a price war within OPEC Plus March 6th.
The cuts for OPEC don't go into place until May and they're suggesting it's Black April because we lost seven weeks of overproduction that have
saturated the market and led us to where we are today.
QUEST: But John, this is a problem for WTI, West Texas Intermediate. This is a problem of U.S. production and nowhere to put it because the Brent
blend hasn't fallen.
If we look at the Brent -- well, it's fallen, obviously, along, which suggests that there is an interplay, an intermarket interplay between the
two benchmark blends where Brent is not suffering from the same effects.
DEFTERIOS: Yes, indeed, Richard, and remember the discussion we were having this fight between Saudi Arabia and Russia, who was targeting the
shale producers and those who cannot afford to carry the debt loads that they have today?
This is what's happening. There is no place in the United States to store it right now, and there are plenty of marginal producers. We see estimates
from Rystad Energy suggesting we could see 140 bankruptcies in 2020 after losing 200 companies over the last four years, another 400 companies in
2021. That was based on $20.00 a barrel.
So, if you have a case here, Richard, where demand destruction continues through the third quarter, spills into the fourth quarter, we're just
warming up on the level of bankruptcies, and you are correct, we went from 13 million barrels, we'll probably finish the year in the United States at
nine million barrels because of this demand destruction.
[15:05:09]
DEFTERIOS: That's when we'll start to see the market rebalance, but the news today is, Richard, nobody wants to hold the physical contract of May
because they have no place to pay and to store it for longer than 30 days. It's a really harsh reality I never thought I'd see in my lifetime.
QUEST: John, absolutely. I mean, when I saw these numbers, I had to give the machine a whack in case something had gone wrong with the software, I
thought like the old steam engines. John Defterios --
DEFTERIOS: Well, how about the last hour?
QUEST: John, thank you. Dan Eberhart is with me -- well, absolutely -- CEO of Canary, Dan Eberhat is with me from the oil services drilling and
production company.
Dan, let's just look at this and understand this. This is the West Texas blend because the May contract, there's no -- nobody wants it. And those
who are producing for May are paying people to take it off their hands, correct?
DAN EBERHART, CEO, CANARY: Yes. And the price -- you've got to remember the price you're seeing for WTI, there's producers out there that get
$3.00, $5.00, $7.00 less than that and you're looking at transmission costs in the $2.00 to $10.00 barrel market depending on where it is, maybe 10 is
a bit extreme.
So, people are really negative probably somewhere in the $5.00 to $8.00 a barrel mark for WTI, but the May contract is expiring and the country is
just worried that cushioning, we're going to be at tank tops in about two weeks and there's just physically nowhere to store the oil.
So, this isn't really a market problem, this is an actual physical storage problem, and we've hit that before the rest of the world here in the U.S.,
particularly in the Permian Basin.
QUEST: And this is interesting because often, when we see market dislocation like this, on technicalities, it is market-related. It's an
arbitrage between two contracts through futures contracts.
You're telling me this is not -- this is not technical. This is fundamental. The tanks are full. A simple question --
EBERHART: Yes, this is a physical -- this is a --
QUEST: And I know this is going to have a complex answer. Right.
EBERHART: This is a physical storage problem.
QUEST: So, why don't they just switch the pumps off? What -- Dan, why don't they just switch the pumps off?
EBERHART: It's not quite that simple. I'll tell you that a lot of what's going on right now is they are trying to kill the wells. They are trying to
shut in wells, but normally, when there's an oil bust, people stop drilling and they wait for the well decline curves to kick in.
It's really destructive to shut in a well, so this is akin to saying, hey, look, I am in the rental business, I don't have any tenants for my
commercial space right now.
Well, normally, you would wait and you would try to fill that space, but we're in a situation right now where we've got to say, hey, look, there's
no -- we have no customers right now. We have this commercial space, so we need to tear the building down. That's what's going on right now, and oil
companies are scrambling to try to figure out how to shut in production.
The industry is not built to work backwards to shut in production it doesn't need, and so the industry is having to work in reverse right now,
and it's just not set up for it, and we are in a coordinated producer like these petro states, Saudi Arabia, Russia et cetera.
We have many companies in the U.S., many medium-sized independents, and they're having to act in concert, but not under directive from the
government. So, it's really kind of a crap shoot right now and everyone is scrambling.
QUEST: Now, explain if you can, what -- you have each oil well, and each head that is pumping out the stuff. What happens if you just turn the tap
off for three months until the market gets better?
EBERHART: Well, it's not so simple as that. You have to use chemicals. You have to understand the pressures that are involved. And you can be --
you're -- in a lot of situations, you're not just shutting the tap off, you're killing the well.
So, an oil company has paid $5 million or $10 million for this hole in the ground and they think it's, you know, in January, this asset was worth $50
million or $80 million or $20 million. Now, it's worth negative, and you're going to have to pay to shut it off completely.
So, you're likely shutting it off for its economic life, not just turning the tap off, and so, that's why companies were reluctant to do this earlier
in the cycle which at this kind of warp speed maybe three weeks ago or five weeks ago, but now in the day, they're scrambling to figure out how to do
it.
We're in a situation right now where we've got a river of oil flowing towards an ocean and the ocean is about to close. The ocean being the
storage in the metaphor, and the industry is scrambling to figure out how to solve that problem at warp speed.
QUEST: Dan, thank you. I appreciate you putting it into terms that we can understand now. Thank you very much indeed.
EBERHART: Thank you for having me.
QUEST: Let's go now to the U.S. and the Small Business Administration. The money was supposed to last several months. It was gone in 13 days. And now,
Congress and the White House still can't agree on a plan to re-fund or to refinance the Payroll Protection Program.
[15:10:16]
QUEST: Manu Raju is with us in Washington. We have much ground to cover, Manu, so firstly, one of the big complaints here is that big companies,
bigger companies, took advantage of the loopholes and were able to get the money that was intended for true small businesses.
Now, the big businesses say, well, they employ people too, but it doesn't seem right.
MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: And that's been one of the reasons why this has been hung up on Capitol Hill because Democrats
objected to what the Republicans simply wanted to do was just to add $250 billion more to that initial $350 billion that had been spent in less than
two weeks, and they said that as part of what the Democrats would agree to, they want to ensure that something -- there would be enough money set aside
for some underserved businesses, businesses run by minorities, for instance, and rural communities, people who are not eligible or not --
couldn't move as quickly, perhaps, as some of those bigger entities did to get that money.
Now, they have generally had an agreement about that. They're still negotiating some of the details about that aspect, setting aside some of
that money, but we're also talking about here, Richard, in addition to more than $300 billion for the small business loan program, $75 billion that
would go to hospitals in the United States, as well as $25 billion for testing programs, and that testing issue is being fought about behind the
scenes.
Because as you know, President Trump says there should not be a national effort. It should be done by the states. Democrats believe there should be
a national effort, so that's one reason the money is stalled at the moment -- Richard.
QUEST: So going back to the Small Business Administration, the way in which this was done, it was done in a hurry, and one accepts the
imperfections of that. But it's -- if they don't refinance, and they don't fund the money, then there will be wholesale destruction of businesses.
So, I'm guessing, from what you're saying, Manu, it's not a question of if, it's when, and what price each political party exacts.
RAJU: Exactly right. Because both sides know they have to do something. So many small businesses in the United States are dependent on this money
coming in from the Federal government, and it's only a matter of time.
We don't expect -- there's not going to be a deal today, perhaps the earliest the Senate could pass something tomorrow and then the U.S. House
could vote as soon as Wednesday, so there's expectation that this could get approved by the end of the week, but like many negotiations on Capitol
Hill, very difficult.
These final details are being haggled out behind the scenes, so we'll see what ultimately they come up with, but we do expect they ultimately will
get a deal that the President will sign into law -- Richard.
QUEST: Manu, thank you. Manu Raju joining us from, well, from Washington and we'll talk more as this one develops, as it surely will.
It's QUEST MEANS BUSINESS for you tonight, start of a new week. What extraordinary week to begin. Negative oil prices for the first time in
history. I guarantee you, none of us ever thought we would ever see that.
Germany is beginning to reopen. It's a slow and cautious approach. After the break, we will be in Germany to find out many. After the break.
(COMMERCIAL BREAK)
[15:16:09]
QUEST: In Germany, small shops will be allowed to reopen. It's the first time in more than a month that they'll be back in business. The German
Chancellor, Angela Merkel, says that once they've reopened, it will be a couple of weeks before any further moves are made. They want to make sure
nothing goes wrong.
(BEGIN VIDEOTAPE)
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): The polar bears seem a bit confused to have so many people looking at them
again. As Germany loosens coronavirus restrictions, some zoos are opening their gates, giving parents and children a little respite from the
lockdown.
"It's really difficult for the children," this woman says, "All the playgrounds are closed. I'm a single mother. The school is closed. It's
very difficult." And he adds, "It's just great to be able to come here and see the animals."
While the loosening of physical distancing rules makes things easier for parents and children, they are a lifeline for shop owners. Smaller stores
are allowed to open in many parts of Germany. Here in Rostock, scores of people flooded the pedestrian zone.
Fashion boutique owner, Monica Maya says the lockdown nearly forced her to shut down for good.
"It was a disaster," she says. "All of a sudden, the earnings were zero at the same time, you still had all the costs. We had to pay the workers, the
rent. It was really tough."
The German government says extensive coronavirus testing and ramping up of ICU capacities helped the country get the disease under control.
PLEITGEN (on camera): While many people have come out in this city and others to enjoy the good weather and to enjoy the fact that although shops
are open again, the German government warns that people shouldn't get complacent and that the gains that have been made so far are still
reversible.
PLEITGEN (voice over): Chancellor Angela Merkel reiterating that germany has not overcome the pandemic yet.
"The situation we have right now is deceptive," Merkel said, "Because what we have started to do now, opening some of the shops again, what this means
in terms of infection cases will not be seen for two weeks."
While gains have been made, Germans are being told not to drop the ball. The government telling its people, enjoy the freedoms that are coming back.
Remember, they can be taken away again.
Fred Pleitgen, CNN, Rostock, Germany.
(END VIDEOTAPE)
QUEST: Now, apparently, aggressive testing is the key to reopening the U.S. economy. The Vice President Mike Pence, says the country is currently
testing around 150,000 people a day, but a Harvard University professor and research suggests that there will need to be 500,000 tests a day before the
economy could be reopened with any degree of safety.
(BEGIN VIDEO CLIP)
DR. JOHN LYNCH, BOARD MEMBER, INFECTIOUS DISEASES SOCIETY OF AMERICA: The social distancing has really bought us time, right, to build hospital
capacity, to build up stores of PPE, to build up public health capacity, but we still lack a Federal nationwide plan for how all this is going to
work.
We need to get access to tests in a way that you don't have to see a doctor for, and we need to coordinate it at a regional level and a national level
so its access is equitable everywhere.
We can plan for reopening the country to back off and ease social distancing, but we have to do it with the recognition that these tools need
to be in place in order to allow us to do that social distancing back up, but also recognize that we're going to probably need to reengage with some
level of social distancing as those tools show us that more cases are showing up.
(END VIDEO CLIP)
QUEST: Now, the company Philips of the Netherlands says it is ramping up production of ventilators and other medical diagnostic equipment that it
makes.
It is spending more than $110 million and plans to boost production by up to 400 percent later this year.
The goal is to deliver 43,000 units to the U.S. government and meet demand elsewhere. Frans van Houten is the Chief Executive of Philips. He is with
me now. Sir, good to talk to you.
I was reading your results and the nature of the company. I mean, you are - - you are a company that is in the heart of the storm because you manufacture ventilators and other medical diagnostic equipment that's being
used. How quickly have you been able to respond?
[15:20:34]
FRANS VAN HOUTEN, CHIEF EXECUTIVE, PHILIPS: We have stepped up manufacturing, already since January, as we discovered that in China, there
was great need for diagnostic imaging equipment, monitors, and ventilators.
So, where in normal times we produce perhaps 500 hospital ventilators a week, already in January, we had doubled that, and by march, we had doubled
it again, and we are currently in the process of moving to 4,000 a week because providing the necessary oxygen to patients that are desperately in
need for respiratory support is very important, and we have been helping hospitals around the world who are in great need with the medical equipment
that they need.
QUEST: And in terms of how you -- I mean, the other equipment that you're making, because the medical services are such a crucial part of your
business, the ability to ramp up production of ventilators is really only one aspect of how you can help in the process, isn't it?
VAN HOUTEN: That's true. As I said, you know, you need diagnostic equipment like x-ray and CT scanners and ultrasound. Patients also need to
be monitored with sensor technology to see how they are doing, whether they are responding to treatment, and then the ventilators, of course, provide
them with the respiratory support in order to overcome the disease.
However, the Philips story is also a tale of two worlds -- two stories. Because part of our business is also very much affected, like many other
companies in the world, our consumer health products are showing less demand, while the intensive care supplies and products see an enormous ramp
up.
And I'm very proud of our people, factories in Pittsburgh and in California and Carlsbad and in Bothell in Washington who are all working around the
clock to provide the necessary equipment to ramp up together with our suppliers in order to respond in a responsible way to this crisis.
QUEST: Help me understand. If the crisis is now, and you're making equipment that may not be ready for several months or delivered for two
months, say, this suggests you are expecting coronavirus to be a massive drain on global economies well into later of this year, possibly to the end
of the year and beyond. Is that what you're forecasting and planning on?
VAN HOUTEN: Well, as we also heard earlier in your program, as governments are easing some of the restrictions of the lockdown, chances are that there
will be moments of resurgence, and therefore, governments around the world want to make sure that they have enough intensive care equipment and
capacity to handle local resurgent of the coronavirus.
Moreover, while now in the United States, people are suffering greatly because it's the epicenter of the disease, there are other regions in the
world that are still going to be affected more down the road.
I hope my heart for the people in emerging countries, in Africa, perhaps in Latin America, where we still need to see how the virus will further
spread. So, we will see for a somewhat prolonged period of time, let's say, investments needed in expanding in ICU capacity while, of course, at the
same time, starting to plan ahead on how you can also support patients remotely.
We see heightened interest in our healthcare infomatics portfolio that enables doctors to remotely support patients and also to allow hospital
workers to work in a more safe environment, for example, by reading radiology images from a safe place or from home.
QUEST: Can I just finish by asking you a blunt question, but I can hear viewers asking, have you kept your prices the same for things like
ventilators during all of this? Because obviously, the dramatic -- I mean, I'm not suggesting net-net, you're better off or you'd wish to be in this
situation, but your ventilator and medical diagnostics equipment will be showing as your numbers show very sharp increases in orders. Have you kept
the prices the same?
[15:25:26]
VAN HOUTEN: Of course we have not increased prices, and we are also, in the United States selling below our list price. I think it is very
responsible to be straight and ethical and transparent about this.
Of course, a larger volume means that you have a higher coverage of your cost. At the same time, we are investing 100 million euro, $110 million to
build extra factory capacity in our factories in Pittsburgh and in California, and elsewhere in order to produce faster.
And all of that extra cost, of course, is something we also need to absorb.
QUEST: Frans, it is good to have you. Thank you, sir. I appreciate your time.
VAN HOUTEN: You are most welcome.
QUEST: Your company is one of the -- your company is one of those at the backbone of everything that's going on at the moment, and I'm grateful that
you talked to us to this evening. Thank you.
This is QUEST MEANS BUSINESS. We're live in New York. The markets are down. Oil is negative, and that's something I never thought we would see. Back in
a moment.
(COMMERCIAL BREAK)
QUEST: Hello, welcome back. More QUEST MEANS BUSINESS in just a moment. We'll hear from the CEO of Shake Shack about why they decided not to take
one of the small business loans in America, even though they were eligible.
And Sir Richard Branson on why he'll be prepared to mortgage his private island, Necker Island to help save Virgin Atlantic, which he says is in
desperate need of money.
Before that, this is CNN, and on this network, the facts always come first.
[15:30:10]
Canadian official say at least 19 people were killed in the deadliest mass shooting in that country's history. They fear the death toll will rise. A
gunman disguised as a police officer went around the province of Nova Scotia over the weekend shooting people and setting homes on fire. The
gunman died whilst being apprehended.
More than a year of political deadlock has been broken in Israel, the Prime Minister Benjamin Netanyahu and the opposition leader Benny Gantz have
agreed to form a national emergency government. It means Israel will avoid a fourth consecutive election between the two candidates.
Prince Harry and Meghan, the Duke and the Duchess of Sussex have cut off all contact with four British tabloids. The couples say they believe in
free press but accuse the tabloids of lying and racism. Four papers being cut off are the Daily Mail, The Sun, The Mirror, and The Express.
Shake Shack, the fast food burger and milkshake company said it's returning a part of the $10 million loan that it received from the government. Shake
Shack said they got the money as part of the SBA, the Small Business Administration's Payroll Protection Plan, but that program has now run out
of money. There had been many critics who said that Shake Shack should not have been eligible as firstly it had other pots of money from investors.
And secondly, that money was designed for small businesses. The CEO said they weren't taking the money.
(BEGIN VIDEO CLIP)
RANDY GARUTTI, CEO, SHAKE SHACK: I think that what we've learned from this crisis is that no business and no restaurant, no matter its size, is
unsinkable. That is the scary reality of where we are.
And I think as we looked at (AUDIO GAP) and it gave us weeks to go as we understood it, the opportunity to keep as many of our team members off
(AUDIO GAP) the line as possible. We have continued to keep 90 percent of our restaurants open. Our team members have been heroic. And we just can't
thank them enough.
And in the midst of this, this opportunity came on its face appeared to be a great opportunity for companies like us and big and small. But I think
what played out over this last couple of weeks is you started to hear these stories that the very people, the small businesses, our friends who own
small restaurants, couldn't get access to this capital. And they were in line or their banks couldn't get it done. That doesn't seem right to us.
And as we watched this opportunity play out over the weeks, it was very clear that the program was underfunded and wasn't set up for everyone to
win. The restaurant business is going to sink or swim (AUDIO GAP) we have to rise together.
(END VIDEO CLIP)
QUEST: So let's look at this particular program which has become so controversial. After many businesses said they were left out, it was the
PPP, the Payroll Protection Plan. Now, any company with less than 500 employees was eligible. Now Shake Shack has a thousand in total, but less
than 500, just 45 at each location. So under a loophole in the plan, they qualified.
You were able to get 2-1/2 times the monthly payroll to a maximum of $10 million. Data shows most money went to largest eligible companies. They
were first in line, they had everything ready, they filed quickly and their banks were ready. 45 percent went to firms asking for more than a million
dollars, 17 percent went to firms asking for less than 150,000. So why were big companies able to do so well?
They first of all had the legal teams necessary to navigate a complex procedure and were able to get there fast. They had existing relationships
with the banks, they had access to other funding. And for example, Shake Shack can raise $75 million from other investors.
Scott Galloway is with me, professor at Stern Business School. They didn't do anything wrong these businesses, did they? They actually -- you know, I
mean, there's a strong argument for saying they have employees too. And that the law or the program was designed for anybody with under 500
employees.
SCOTT GALLOWAY, PROFESSOR, NYU STERN SCHOOL OF BUSINESS: Oh, sure. So, look, we needed to move quickly. It's -- you can empathize the notion of
flattening the curve around unemployment.
And Richard, there's what you can do and there's what you should do and I think this reflects a lack of character and code on the part of the CEO and
the board of Shake Shack. This is a company that had a multi-billion dollar market capitalization. And in general, I would argue, they're the poster
child today which is probably a little bit unfair.
[15:35:03]
GALLOWAY: But over the next six months, we're going to see thousands of instances. People who come from what is one of the wealthiest groups in the
world and that small businesses, there's a cartoon of a single mother who owns a cupcake shop. But the reality is there are more billionaires from
real estate and small business than anywhere else in America.
And I think you're going to find that a lot of that $250 billion went to small businesses who quite frankly would have survived. And as is
everything we do in this nation, it was largely a bailout or a flattening of the curve of the people who need it the least. We need to be in a
position where we're protecting people not businesses, a lot of these businesses quite frankly should just go away.
QUEST: Alright, OK. So, I've read your article a Capitalists or Cronyists. Are you suggesting that in the case for example of the airlines and the
really big businesses, that the correct thing to do is to go into Chapter 11 and restructure as a result during all this process, rather than saying
the airlines cases where they've had some grants, some loans and they're going to get more loans?
GALLOWAY: I think that's exactly right. Airlines have gone bankrupt 66 times over the last 10 years. They were still able to get in in aluminum
tube with re-circulated air and get where we need to get for less money than it cost 20 years ago.
The CEO -- the CEOs of United, Delta and Carnival Cruises took 150 million in total compensation over the last five years. United took 96 percent of
its free cash flow and use it to repurchase shares which inflates the stock price, which inflates the compensation of the CEO. They want rugged
individualism and capitalism on the way up, and then on the way down, we're socialists and we're all in this together and they have their hand out.
If Carnival Cruises goes out of business, it means the debt holders take control of the assets, the boats, there will be some temporary job loss.
But as long as they keep making seniors, cruises are going to do just fine. And the debt holders on the company, they restructure. It's the equity that
gets wiped out, Richard, not the jobs.
QUEST: But Scott, I get your argument, I get your point. But that becomes capitalism at its most brutal at the thing -- in the teeth of a crisis. The
Carnival example is yes, you're right, somebody will pick it up, but not before lots of people would have lost their jobs arguably, permanently. And
this will be brutal capitalism.
GALLOWAY: That's exactly right. And the way we stopped brutal capitalism is we protect people, not companies. That 250 billion is about to become 500
billion, there are 100 million households in the U.S., take the bottom half that needed the most. That is -- that is I believe -- that'll be 10 -- that
would be $5,000 per household. You could give a $5,000 check to any household in America in the lower medium. These small businesses aren't
suffering because of over employment or under employment, they're suffering because of demand destruction, protect people not jobs.
All we're doing here, we have the worst type of capitalism that is cronyism. And that is you're going to find the majority of that $250
billion went to pumping up with steroids. A lot of businesses that a, shouldn't probably rent be around, or b, insuring that pop pop got to held
on to all five dry cleaners instead of four.
What happens in an economic crisis? Prices should drop to their natural level and then people like myself in the 2009 cries -- 2009 crisis get to
buy Netflix at $12.00 a share. There is a whole generation of young people that we are borrowing money against to try and do the same thing we always
do, and that is keep baby boomers rich. We need to protect people, not businesses.
QUEST: Scott, controversial but excellent to have you on the program. We'll talk more about this.
GALLOWAY: Thanks, Richard.
QUEST: As always, thank you, sir for taking time to joining us.
Now, talking of the very rich, Richard Branson. Sir Richard Branson's offering to mortgage his private Caribbean Island. He says he would do so
as collateral to help save Virgin Atlantic. Virgin Atlantic and Virgin Australia are in badly need of capital. And governments have said they will
help asking the U.K. government for a loan. There's been no disclosing of the amount but Branson says he will repay.
Meanwhile, the travel and tourism industry is represented by the WTTC is looking forward to the future with a new campaign about keeping the spirit
of travel alive.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Join us as we gather together in travel and celebrate what travel means to each of us. Share your stories, your most prized
memories or greatest adventures, your favorite images, videos.
(END VIDEO CLIP)
QUEST: Gloria Guevara is the CEO and president of World Travel & Tourism Council joins me, it's the new campaign. Gloria, before we talk about the
campaign, and it does look as though this crisis is going to last quite a bit longer because the opening up is going to be much slower than perhaps
we first thought, and travel and tourism is going to be one of those the last ones. So we're looking well into the end of the year, and possibly
next.
[15:40:14]
GLORIA GUEVARA, CEO AND PRESIDENT, WORLD TRAVEL & TOURISM COUNCIL: Well, hopefully, there's going to be before that, Richard, and thank you for
having me.
We believe that there are two phases depending on the vaccine and depending of the solutions that we find from the health perspective. We might do
something before the vaccine is ready and our travel experience is going to change. And we are going to have a different trial experience after the
vaccine, so everything depends.
From our view, I'm sure that you have seen that we're looking to technology, and we're looking to those solutions to see how do we can start
traveling domestic and leisure. And then in a second phase, business and international.
That being said, I think the way that we see these, there is an opportunity to have a coordinated approach. And that's already engaging with
governments, because what you say is very important, we need to figure out how can we open these in a coordinated approach and work together the
government, the health experts and the travel experts so that we do this right, and we don't delay the recovery further.
QUEST: What are you hoping to achieve from this new campaign where people can submit sort of their favorite, if you like, places, their favorite
videos and stories of their -- of their trips?
GUEVARA: Well, first of all, we had a campaign two weeks ago to thank the heroes from travel and tourism. The one that they're offering their hotels,
the one that they're offering food and a lot of initiatives to protect the healthcare workers and to help with COVID-19 and the crisis that we're
living.
Now with this campaign, what basically we know that people are in their house, they should stay in their house, that's the priority to stay home.
But at the same time, that doesn't mean that you cannot continue dreaming. That doesn't mean that you don't share your best memories.
In reality, when we ask the citizens, the travelers of the world, where are your best memories? Where do you have your best experiences? And most of
them will tell you traveling. And this is an opportunity for them to dream again, to share that experience with loved ones, to talk about the
community that we all build together in the travel and tourism industry. And the importance of these sectors so that they can increase their bucket
list, they can restart planning and dreaming because that's something that is going to come back sooner or later. We're all going to be traveling
again.
QUEST: Gloria, finally, where are you -- where are you looking forward to go once we can all travel again? Where's your first destination going to
be?
GUEVARA: Well, my next destination that I hope to travel is to Mexico. And the reason is because we're also organizing hopefully there our next global
summit as you know. And I would like to visit that location and also celebrate a lot of accomplishments with friends and family.
But I have a long bucket list, there are places that I want to visit all over the world. And of course, my children also play an important role
because that generation for them is to write and they want to travel and they want to see a lot of places. So we're negotiating right now. But we
have still a lot of time of course to negotiate.
QUEST: Gloria, we'll talk more, thank you. Together in travel, I appreciate it.
GUEVARA: Thank you.
QUEST: In a moment, after the break, we'll be in South Africa. The voice of the crisis, it's the wedding company. Well, obviously there are no weddings
at the moment, but the interesting thing is what they are managing to do. How do you prepare so that when people start getting married again, you're
off to the races? In a moment.
(COMMERCIAL BREAK)
[15:46:23]
QUEST: Tonight's voice of the crisis, Imperfect Perfection, it is a wedding events company in South Africa. Well, obviously South Africa's on lockdown
so the company has no business. The owner -- one of the co-owners is with me Pieter de Jager joins me now (INAUDIBLE) from Pretoria.
Right, reading about it, I mean, obviously all these brides suddenly started canceling their weddings. And you -- I mean, you are left with no
business left at all. So what have you done?
PIETER DE JAGER, FINANCIAL MANAGER AND CO-OWNER, IMPERFECT PERFECTION (via Skype): Yes, Richard. Yes, we we started getting postponements, luckily not
cancellations. People are looking for dates late in the year or even early next year. And then suddenly your cash flow stops because these people,
they have payment deadlines which they pay towards they're weddings. And what you then do is you look after the money that is there -- that is there
to be spent on your daily expenses.
QUEST: Then I noticed you did an analysis, you did an analysis where you saw how many jobs you've got, and how many were dependent upon those jobs.
So 14 employees, and they care for 84 other people. That in a nutshell shows the significance of you being able to continue to pay them.
DE JAGER: Yes, I think that is the challenge in terms of South Africa, a lot of the people that is laborers, they look after a big portion of their
families. So it's not only the person that's working for you, but it's also the dependents that is looking at him for the next meal.
The one guy that's working for us, he's got 11 dependents. So for us to make the decision not to pay him anymore, it's got a big impact. And yes,
and then you must decide what you're going to do next.
QUEST: Right. If we -- if we look to the future because these are cons -- these are not cancellations, they're postponements and people will still
get married, can you keep this going long enough to hold those weddings maybe later this year or early next year? Can you keep going, Pieter?
DE JAGER: And that's the uncertain part, Richard. If we are in lockdown till the end of April, and then we foresee that weddings as it is will not
continue for the -- for the short term anyway. But then if the lockdown is postponed even longer and functions -- I'm not talking about only weddings,
functions will not be -- might not be permitted in South Africa. Then we will have a big problem because you can just last that long.
QUEST: Right. Pieter, when you're showing -- and I'm confident that you'll have been holding and weddings, and send us some pictures so we can see
them once it is -- once you're open up on business again. Thank you for sharing the tale today, particularly that extraordinary statistic, one
person to 11 dependents. Thank you, Pieter.
Now, one of the positives of such it be, is that the lack of pollution, we can see it's made a big difference. Once everything gets started again,
we're going to start needing to look at things like carbon capture with a much more serious view.
Here's John Defterios with this week's global energy challenge.
(BEGIN VIDEOTAPE)
[15:50:14]
DEFTERIOS: Manmade carbon emissions are driving global warming. If we want to tackle climate change, we need to reduce the amount of carbon dioxide
we're putting into the atmosphere. One way is to be more energy efficient, so we use less fossil fuels. Another is to replace fossil fuels by using
more renewable energy.
But some researchers and the industry leaders are working on yet another way, capturing carbon dioxide and using it in industry, or putting it in
storage, it's called carbon capture, utilization and storage.
Industry is the source of almost one quarter of CO2 emissions. But if industries can trap the CO2 as it's released, it can be kept out of the
atmosphere. Nature has its own forms of carbon capture. Plants remove CO2 from the air. When plant matter for example, wood chips is burned for
energy, it releases CO2 into the atmosphere.
But as long as the plants harvested for energy are replaced by new ones, in theory, the new ones will absorb the same amount of CO2 making the process,
carbon neutral.
And perhaps most ambitious of all is to pull the carbon dioxide right out of the air, it's called direct air capture.
ADAM SIEMINSKI, PRESIDENT, KAPSARC: They look like big air conditioners but rather than chilling the air, they're actually taking the air, removing
carbon dioxide and then you can either permanently store that in some way or even better, reuse it in some other industrial process. Making something
like methanol or fertilizers can all be done through direct air capture.
DEFTERIOS: But it's still early days for carbon capture. There are currently 19 large scale projects operating globally. Two in power
generation and the rest in industry. Carbon capture and power must ramp up to meet the 2040 sustainable development scenario set by the International
Energy Agency.
LASZLO VARRO, CHIEF ECONOMIST, IEA: The big economic challenge is that this is a cost. The facility which is at with the carbon (INAUDIBLE) the carbon
storage. We'll always be more expensive than the same facility without carbon storage.
DEFTERIOS: And that means these types of projects may need tax credits or grants to capture investment to fight climate change, especially when it
comes to carbon capture. John Defterios, CNN Business in the Ghawar Field.
QUEST: And we will have a profitable moment after the break.
(COMMERCIAL BREAK)
[15:55:28]
QUEST: Tonight's profitable moment, over the weekend I was tested and I have been diagnosed as being -- as having the coronavirus. Yes, I've got
positive diagnosis for COVID-19. I am grateful and thankful that I don't seem to have any of the horrific symptoms of the others. I just have a
nasty cough which thankfully tonight because of our excellent technical stuff, you haven't heard me too much spluttering away.
No, I don't have any of the awful breathlessness or the fatigue or anything else. Night sweats for example that some of my colleagues have suffered or
that many of you with your friends and families have been suffering too. That I'm grateful, of course, to the enormous support given and all the
great medical staff that are helping me get over this.
Now you may want to say, (INAUDIBLE) we've all thought the case while you're still talking tonight, and you're resting up and taking it easy, and
I will. Now to make it clear, I will take it easy if of course it all gets too much. I'm not a fool nor am I a hero.
But at the moment, I feel fine. I feel good. And there are important things that you and I need to talk about every night, such as negative oil and the
way the markets are going down and what still needs to be done. Which is why as long as I can, and I don't see why not, you and I will still get
together at this time and have a good chat about the economic side of what's going on.
A look at the market and you'll see why we need to keep talking, they are down quite sharply across the board. This is on oil, negative oil. First
time we've had negative oil in anyone's lifetime. At least anyone can remember is alive.
And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York, whatever you're up to in the hours ahead, be safe and I hope it's
profitable.
(COMMERCIAL BREAK)
ANNOUNCER: This is CNN breaking news.
JAKE TAPPER, CNN HOST: Welcome to "THE LEAD". I'm Jake Tapper. And we begin this week with the coronavirus death toll in the U.S. standing at a
staggering 40,000. To be precise, it's 40,931. This same time last week, the death toll was roughly 23,000. So that's roughly a doubling of the
number of lives lost, a huge and terrific jump. There's a person behind every one of those numbers.
A stark example of the tragedy Sunday's edition of The Boston Globe printed 16 pages of death notices. Boston is among the cities being closely watched
right now by the White House Coronavirus Task Force along with Chicago and Philadelphia. This all comes as Dr. Anthony Fauci is once again warning the
nation if restrictions are lifted too soon, the coronavirus could have a resurgence.
END
