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Quest Means Business
Coronavirus Rages In The U.S.; Interview With U.S. Federal Reserve Vice Chair, Richard Clarida; Brazil President Jair Bolsonaro Tests Positive For COVID-19; Clarida: No Limit To Fed Purchases; Pompeo Says U.S. Looking At Banning TikTok; Sotheby's Amasses $363 Million In First "Hybrid" Art Auction. Aired 3-4p ET
Aired July 07, 2020 - 03:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:05]
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: We are in the final hour of trade on a Tuesday. The markets are having some difficulty in sustaining the
rally that was seen on Monday. Down nearly one percent.
It always looks worse than it actually is when you see just sort of morass of redline there, but those are the markets and the reason why is pretty
clear. Soaring COVID cases is providing and posing a new threat to the economic recovery. I will speak exclusively to the Fed Vice Chair, Richard
Clarida, who will be with me in just a moment or two.
The U.S. government gives more than a billion dollars to Novavax for a coronavirus vaccine. I will speak to the company's chief executive on why
and what they are going to do with the money.
And Mike Pompeo says the U.S. could ban TikTok. I'll explain why.
Live from New York, it is Tuesday, it's July the 7th. I'm Richard Quest, and yes, I mean business.
Good evening. We start tonight with the U.S. economy, whose recovery could be in some jeopardy, and the reason of course is as a result of the rising
number of coronavirus cases across the south and Sunbelt of the United States.
Put simply, the numbers are surging, lockdowns are returning, and Fed officials are now fearing that the comeback has been stalled. The U.S. is
averaging 50,000 new cases a day. That's nearly three million cases in total. All the while, look at other major economies and you see the way in
which the curve has flattened and then crushed.
However, the surge in the U.S. is hitting American southwest with 24 states rolling back reopening plans delaying the recovery. Now, the responsibility
falls to the Federal Reserve to help keep the economy going.
While they don't have responsibility, for example, stimulus they do and have taken upon the responsibility of keeping the economy from falling off
a cliff.
(BEGIN VIDEOTAPE)
QUEST (voice over): For the second time in little more than a decade, a global economy is facing a once in a generation crisis and the U.S. Fed is
right at the heart, attempting a rescue.
The pandemic delivered a shock the modern economy has never seen. The Fed Chairman Jerome Powell wasted little time issuing his version of a-
whatever-it-takes policy.
(BEGIN VIDEO CLIP)
JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: We are deploying these lending powers to an unprecedented extent. We will continue to use these
powers forcefully, proactively and aggressively until they are confident we are solidly on the road to recovery.
(END VIDEO CLIP)
QUEST (voice over): In March, the Fed moved quickly, employing its most well-known tool as it slashed interest rates to near zero. The Feds made it
clear these rates will stay low until the economy has weathered the storm.
Then the Fed unleashed a veritable alphabet such lending programs. Some names harken back to the GFC, the Great Financial Crisis. Others are new.
Tailor-made to help companies survive COVID-19's impact.
Chief amongst them of course the return of QE -- quantitative easing. The Feds bought up trillions of dollars in securities, pumping new money into
the economy. A new emergency fund, the Main Street lending facility was established. It helps smaller and medium sized companies get desperately
needed cash.
These loans come with strings, limiting executive pay and forbidding stock buybacks.
And this month, there has been unprecedented prevention in the credit market. The Feds buying corporate debt, bonds and blue chip names like
Walmart, Boeing, Coca-Cola and CNN's owner, AT&T. It's averted a catastrophic seizing up, a cash crunch that could have triggered a wave of
bankruptcies.
It is clear the Fed can't save the economy alone. A Central Bank can only lend money. It can't spend it. In his public remarks, the Fed Chairman has
called for more spending.
(BEGIN VIDEO CLIP)
POWELL: The critical task of delivering financial support directly to those most affected falls to our elected officials. Getting a loan that may be
difficult to repay may not be the answer.
In these cases, direct fiscal support may be needed.
Direct support is making a critical difference not just in helping families and businesses in a time of need, but also in limiting long lasting damage
to our economy.
(END VIDEO CLIP)
[15:05:19]
QUEST: Now, as the coronavirus cases spike across much of the United States, there is a real threat that any economic restart will come to a
swift end.
The experts believe the Fed has just a few tools left in its arsenal, and with Republicans and Democrats divided in had high-stakes election year,
more stimulus is far from certain.
For now, Jerome Powell and his Board of Governors, much as they may not wish to be, they are the only game in town.
(END VIDEOTAPE)
QUEST: The Fed Vice Chair, Richard Clarida joins me now live on the program.
Vice Chair, very good to have you, sir. Thank you. I appreciate you giving us time. We have much to cover.
Let's start with where we are in a sense, the worsening cases of coronavirus. What Dr. Anthony Fauci calls a surge, not a new wave, and this
is obviously going to change the Fed's thinking about the pace of a recovery which was picking up steam. What's your latest thinking now we are
seeing this surge?
RICHARD CLARIDA, U.S. FEDERAL RESERVE VICE CHAIRMAN: Well, that's a good point, and I think it is true, Richard, that after taking a huge hit in
March and April, we did see evidence of the economy beginning to rebound in May and June. And that was very, very welcome.
But you correctly point out, we have seen an increase in cases in certain large states. We are not epidemiologists and we are following it closely as
we have said many times, ultimately, the course of the economy is going to depend on the course of the virus and we are following it very closely.
QUEST: Within that, I mean is there a risk -- if we look at the number of cases that are going up and we look at the sort of lockdowns that are
taking place, do you have the right tools in place, for instance, if there were to be a double dip recession? Is a double dip even on your horizon?
CLARIDA: Well, look, we look at a broad range of scenarios. You know, it is not our base case. But of course, we look at all of the relevant
eventualities.
What I can say is as your earlier clip indicated, you know, we have a lot of accommodation in place. There is more that we can do. There is more we
will do if we need to.
And as you correctly point out, fiscal policy is an important part of this and it looks like negotiations may well result in some additional fiscal
support as well.
QUEST: The -- you say there are things you can do and there are things that you will do. Is that your version of the famous, whatever it takes?
CLARIDA: Well, you know, Mario Draghi has sort of the trademark on that phrase, the copyright on that phrase, but we will say and what we have said
is when it comes to the size of our balance sheet, we make those decisions. There is no limit how much we can purchase in terms of Treasuries and
mortgage backed securities. You talked about the alphabet soup of programs.
I think it is important for viewers to know, Richard, these programs are meant to encourage and support the flow of credit to households and
businesses in the economy, and those will remain in place as long as they are needed.
So there is more that we can do and there is more that we will do if we have to do it.
QUEST: And on that alphabet soup, some of them are more esoteric, unless you are actually in the market. Municipal bonds one for example, some of
the corporate debt ones. Some of them haven't been used very much.
Is the idea here, the Fed idea, you don't -- it's like a lender of last resort. You hope you never need it and the mere fact that you are there
with these plans deters anybody?
CLARIDA: Richard, I am glad you asked that because I think that's actually quite important. I think announcing that these -- these are back stop
facilities, so we really hope companies and individuals don't necessarily need to access them, but they are back stops if needed, and I think there
is a lot of evidence that just announcing that the facilities are in place are essentially allowing private markets to function much better, and we
think that's great.
So, these are back stop facilities, and if they need to be used, they are there. But I think we do see the flow of credit at good levels in many
parts of the economy. So that's positive.
QUEST: On the stock market, well, barely four months on, the NASDAQ set a record high, the Dow is flirting again, just about every economist we have
on QUEST MEANS BUSINESS always says the same thing, which is -- and perhaps you would have said it in a previous life, Vice Chair, which is, well, of
course the market is high. The Fed is the -- is pumping so much liquidity, this is a Fed market.
Now, do you -- it is not your responsibility to prop up the stock market.
CLARIDA: Right.
QUEST: But that is the effect of what's happening.
[15:10:21]
CLARIDA: Well, I think, look, our focus is now and always has been on putting in place policies that help us to achieve the goals that Congress
has assigned to it, which is full employment and price stability. Obviously, our policies work through financial markets, and our focus is
not on any one market, it is really on a broader question, can companies get access to funding to financing so that they can stay open?
We are providing a bridge to companies. We think that's important. And obviously a lot of factors contribute to market prices, so I am not going
to go into that. But our focus is not really on any particular market. It is on getting the market back to full employment and price stability as
soon as possible.
QUEST: One more question on this area. And it really is -- the tools left in the Fed's tool box -- now, the Chair to some extent has ruled out at
least for the time being negative rates.
You have already got forward guidance well and truly in there. You are looking now yield management or yield direction. That's something that's
not wildly popular. So what is -- what are these other tools waiting to be deployed?
CLARIDA: Well, I think, broadly speaking, we would put them into the categories of additional forms of forward guidance that the Fed has used in
the past and that we consider using in the future.
And also, right now our purchases of Treasuries and mortgages are really focused on supporting market functioning, and there is more that we could
do in terms of our balance sheet as needed.
Then, finally during this critical time when the economy is recovering from the pandemic shock, we think these credit facilities in place are also
providing important support. We have seen a decline in credit spreads and improved access.
QUEST: Right.
CLARIDA: So, I think all of these together are part of a package that will be effective.
QUEST: You talked about the mandate. Full employment, price stability. There are those who say as a result of Black Lives Matter, as a result of
what's happened that there should be a social responsibility element almost adding in a requirement for example, of minority employment. Do you support
that? And if not, what do you support to add in to that?
CLARIDA: Well, Richard, we have a set of tools that really impact the overall economy. And so we have tools that can help to reduce the overall
unemployment rate for example, or help to support recovery from recession.
Our tools are not so ample that they are able to be directed or aimed at particular other social goals. But I think what we have found historically
is that when the economy is doing well and when the unemployment rate is low, it benefits a number of different parts of society, and that's really,
really our focus.
QUEST: Right. But if I look at what the E.C.B. under Christine Lagarde is looking at, they are very keen to look at how to incorporate minority
support and underprivileged support as part of the E.C.B.'s mandate, admittedly a review is under way. We don't know how it will end.
Do you think they will discover what you have basically said, it is easier said than done and perhaps best left alone?
CLARIDA: Well, I think in our review -- and of course, we've devoted more than a year to a framework review that is still ongoing. We had a number, I
think, 15 Fed Listens Events, so heard from a number of groups in society.
Again, what we can do is provide a policy package that helps to get to maximum employment -- that prosperity, and I think if we can achieve that,
then a number -- really, all groups will benefit and that really is our focus.
QUEST: Last question, Vice Chair. Well, it is an election year. It is going to be very difficult -- it's going to be very difficult for the Fed to put
forward its policies without becoming enmeshed in the political back and forth in what promises to be brutal politics.
How worried are you that the Fed will become politicized whether you like it or not?
CLARIDA: Well, Richard, I am not worried about it. I have now been now at the Fed for nearly two years, and what I have observed on the inside is
that we have 17 members of the committee who are focused on one thing, and that's achieving our goals and politics will not enter into our
conversations or decisions. I can assure you of that.
[15:15:04]
QUEST: And when I say to you, sir, that the Fed is now the most respected institution, possibly, maybe the Supreme Court, but certainly the Fed is up
there as an institution, that's a barometer of integrity that has to be guarded jealously. Would you agree?
CLARIDA: I completely agree. The Fed is an incredible institution. It's more than a hundred years old. And it has enormous resources in terms of
talent and perspective, and it is an honor that I have been given to serve as Vice Chair for these last two years.
But I agree, it is very important to maintain that credibility and we will do that.
QUEST: Good to see you, sir. I appreciate it.
CLARIDA: Thank you, Richard.
QUEST: I appreciate your time. I hope and you the family are well. Thank you, sir.
CLARIDA: Yes.
QUEST: The Vice Chair of the U.S. Federal Reserve, Richard Clarida joining me there.
Now, in a moment, to Brazil, the President -- well, he has got coronavirus. Having said just so much about how unimportant it was or how difficult it
was, now, he is getting treated for COVID. We don't know how serious his symptoms are. In a moment, after the break.
(COMMERCIAL BREAK)
QUEST: Brazil's President Jair Bolsonaro has tested positive for coronavirus. Now, for many months, he has downplayed it as being little
more than a little flu.
Now, the President made the announcement from the residence in Brasilia, says, he is improving after feeling tired and achy. He has been treating
the illness with hydroxychloroquine, which you're familiar.
CNN's Bill Weir is in Sao Paulo, Brazil. So he has got the virus. I guess in many ways, Bill, one wishes him a speedy recovery. But if he has mild
symptoms, there is every risk that he turns around and says, hey, what's all the fuss about? Look at me, I am back at work within a few hours.
BILL WEIR, CNN CORRESPONDENT: Exactly. And it also gives him an opportunity to double down on that hydroxychloroquine, the antimalarial drug that
President Trump was touting weeks ago as possibly a miracle cure much to the chagrin of medical professionals who were worried about side effects,
worried about its efficacy.
Well, President Bolsonaro stockpiled millions of doses of this stuff. He has his military basically running the COVID response after firing or
losing two Health Ministers, and they are distributing the stuff at clinics and even into some Indians in the Amazon.
[15:20:09]
WEIR: So what probably will happen is just that, it is if the symptoms are mild, he can say, see I was right. I am 65, it doesn't affect me. I was
right to open the economy when we did. I was right to say you should take this hydroxychloroquine early on and then go on with that.
But what people mostly are worried about -- and you can see it in the form of thousands of fresh graves that have been dug here in Sao Paulo is that
the curve of infection rate that we are seeing right now is way underreported and the body count is bound to go up and they are facing what
they fear will be an Italian-type crisis where doctors are choosing which patient gets the ventilator. That's the concern.
And whether or not this bout for President Bolsonaro will change his attitude on how to prepare for that and have him listen to the people he
was firing -- that might be not a safe bet.
QUEST: The -- I see where you are and I can understands the gravity, literally, of the situation there. How frightened are people? If you had to
gauge the mood of -- you know, here in the United States, it is out of control in terms of virus, but people believe they know what they -- they
are getting on with it. What's it like in Brazil at the moment?
WEIR: Richard, it is so similar to the U.S. and that your concern is directly proportional to your politics and where you get your information.
And 20 of the 27 states, I believe in Brazil, the governors are opposed to President Bolsonaro's sort of eye rolling laisses-faire attitude towards
COVID-19. They want to be more cautious and slower in opening up.
You see on the streets of Sao Paulo, a good 85 percent to 90 percent of people are in masks. Some stores are tougher than others in enforcing
social distancing and whatnot.
But this is a sophisticated country with, you know, a considered really sound medical system. They have been through Zika and the HIV crisis and
with the right leadership, they could have flattened this curve probably just as well as we saw any of the other countries we are seeing
successfully do it.
But as we saw in the United States, when the man up top says we shouldn't worry and I am not wearing a mask, it really sends a message at least to 30
percent to 35 percent base of the population.
QUEST: Bill Weir, thank you, that's extraordinary. Thank you very much, Bill Weir in Sao Paulo where he will be continuing to report of course on
these events.
Now, the biotech firm Novavax has landed a huge U.S. government contract to make a COVID-19 vaccine. It is worth $1.6 billion, the value of the
contract. Novavax shares are soaring of course, 29 percent.
It has no vaccines on the market. It is the biggest investment yet by Operation Warp Speed, which has already given $1.2 billion to AstraZeneca,
and roughly half a billion each to Johnson & Johnson and Moderna.
Experts are warning of course, Dr. Fauci says its effects could fade over time.
(BEGIN VIDEO CLIP)
DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: We are going to assume that there is a degree of protection. But
we have to assume that it is going to be finite. It is not going to be like a measles vaccine.
So there is going to be follow up in those cases to see if we need a boost. We may need a boost to continue the protection. But right now, we do not
know how long it lasts.
(END VIDEO CLIP)
QUEST: The Novavax CEO, Stanley Erck is with me. He joins me from Washington, D.C. Stanley, thank you, sir. I appreciate you giving me time.
This is a huge amount of money being invested in your company to buy vaccines when there is no certainty that you are going to be able to
produce a vaccine that works.
STANLEY ERCK, CEO, NOVAVAX: And the question is?
QUEST: Can you hear me, sir?
ERCK: Yes, I can hear you. I didn't hear the question.
WATTERS: Well, the question is, since the U.S. government -- what happens if you can't get a vaccine that works?
ERCK: Well, this is actually true of any investment in drugs or vaccines. Nobody knows it will work until you get the data. And so you make the
investment and see what comes out.
The difference here is that this investment is large, and it is given to us based upon the fact that we have developed a platform of this type of
vaccine throughout the last decade.
We have built and tested vaccines against actually two other coronaviruses -- against SARS and MERS -- and taken them into animal studies. And with
Ebola into human studies, and with flu and seasonal flu, we just finished a pivotal Phase 3 clinical trial showing that the vaccine, the same platform,
you take a recombinant protein, mix it with an adjuvant and inject it in the arm and you can get a very potent immune response safely. That's what
they are investing in.
[15:25:18]
QUEST: Sure. And the ability -- I mean, looking at what I believe is your Phase 3, it will be third or fourth quarter, or hopefully, third quarter or
fourth quarter. Give me -- assuming everything goes according to plan and it works, realistically, when would you expect to be able to use the
vaccine on a patient?
ERCK: Well, as early as the fourth quarter. First of all, we have to show that it's safe and effective and that it's stable, and we do that
throughout that process.
The other thing they have to do is show we can scale up production. That's the other half of what we bring to the table. We have a vaccine whose
platform is based upon simple recombinant proteins that are stable at room temperature for some period of time and then would be shipped and stored in
four to eight degrees of refrigerated temperatures over a long period of time.
And so if we could do that, and we can scale up, which is what we are planning on doing, not just in the U.S., but globally. We just bought a
very large manufacturing facility in the Czech Republic a couple of months ago and we could scale, we can produce at the levels of hundreds of
millions of doses a month starting next year.
So, right now, our contract with the United States is to develop it clinically, show it works in clinical trials. And in parallel, although it
is usually done in sequence, which makes vaccines take time -- in parallel, we are going to scale up production so these vaccines can be on the shelf
starting in the fourth quarter.
QUEST: I mean, the world awaits in the sense that this is the key -- a vaccine is the key to us returning to something like a normal life, and
with that in mind how -- just give me a thought of how do you view your competitors? Whether it is Moderna, whether it is the Oxford Laboratories -
- whichever one it might be, do you keep an eye on what they are doing? Do you think we are in a situation where there will be a necessity for
multiple vaccines across a range, not just a one size fits all?
ERCK: Yes. What's interesting to look at is that we are all looking for the same thing. We are all trying to make a protein called a spike protein
that's on the surface of the virus because we know from animal studies -- we know that if you can make that protein and inject it that your body will
see it as something foreign, and it will make anti-bodies and T-cell responses against that spike protein.
And if they can block that spike protein, the virus cannot get into your human respiratory cells. So everything is targeted. What we are doing
differently is we are making it in different ways, we are taking a simple recombinant method of making a protein in a cell. It gets expressed. We
purify it and we mix it with an adjuvant and then inject it in the arm.
Others are taking a protein, the gene sequence for the protein and injecting that directly and letting it produce in the body. And so there is
-- what comes out are different forms of the protein. Some are truncated, shortened, some are full-length protein, and time will tell, which is the
better way to deliver the protein, but we are all delivering the same protein.
Frankly, I don't think you would talk to a CEO of any of these companies who didn't say, we hope that all of these approaches work. We need more
than one vaccine, and so, the clinical data will tell us which is the best approach.
QUEST: You know, you're right, sir. We have had many of the CEOs like yourself and they have indeed said that, which is good to hear, like with
good community spirit. I appreciate your time, sir, tonight. Thank you very much.
Now, after the break, it has been some two months since I was struck with COVID. Talking about vaccines, listening to what the doctors had to say
reminds me of that. After the break, we will talking about how the virus lingers, or at least the symptoms linger in coronavirus many times after
the tornado has gone through. In a moment.
[15:30:00]
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. We're going to discuss the threat to TikTok as Washington
suggested it might ban the site in the United States because It shares or the risk of it sharing data with the Chinese government.
And Sotheby's -- excuse me, Sotheby's fetches huge sum in its first fully online auction. The art auction took place, the sums were paid, and we'll
discuss what all that tells us, all of which is after we've had the news headlines, because this is CNN, and on this network, the news always comes
first.
Australia's second largest city is ordering a lockdown again. Melbourne is re-imposing strict limitations for six weeks after surge in coronavirus
cases. Residents must remain at home and that's their grocery shopping, exercising or going to work. Donald Trump's niece says the U.S. President
is a sociopath who could destroy the United States. CNN has obtained a copy of her book which releases next week. Mary Trump writes that Trump's father
helped him pull off a charade, selling himself as a brilliant self-made businessman.
The actor Johnny Depp has appeared in a court in London for the start of his libel suit against the British newspaper group. The Sun ran a story in
2018 alleging that Depp had physically abused his ex-wife, Amber Heard. Heard is also in court to give evidence. Depp has always denied allegations
of physical abuse against his former wife.
The phrase, no limit and there's more that we will do, that's what Richard Clarida, the Vice Chair of the U.S. Federal Reserve, told us this evening,
as the Fed faces a U.S. economy that could be slowing down once again, with the very real possibility of a double dip recession. Whatever it takes,
this is how the Fed chair put or vice chair put it.
(BEGIN VIDEO CLIP)
RICHARD CLARIDA, VICE CHAIRMAN, U.S. FEDERAL RESERVE: When it comes to the size of our balance sheet, we make those decisions. There's no limit to how
much we can purchase in terms of treasuries and mortgage backed securities.
[15:35:09]
CLARIDA: You talked about the Alphabet soup of programs. I think it's important for your viewers to know, Richard, these programs are meant to
encourage and support the flow of credit to households and businesses in the economy. And those will remain in place as long as they're -- as long
as they're needed. So, there's more that we can do and there's more that we will do if we have to do it.
(END VIDEO CLIP)
QUEST: That's really it, Clare Sebastian. There's more that we can do, there's more that we will do, if we have to do it, when it's looking like
they are going to have to do it. You listened closely to Mr. Clarida, r what did you make?
CLARE SEBASTIAN, CNN CORRESPONDENT: Originally, he did not deny that this was a sort of whatever it takes moment for the Fed, although he said that,
that Draghi has the trademark on that. I thought it was -- it was interesting, not perhaps unexpected given that interest rates are now at
zero.
The Q.E. is really the thing that's on the table for the Fed. That was the first Last thing he mentioned, in terms of the tools left at their
disposal. No limit, he said, to what we can purchase in terms of treasuries and mortgage backed securities.
I will say the balance sheet has swelled from about 4.3 trillion in mid- March to well over 7 trillion now. So, this is a lot of purchases that they've made, so far. But he's saying they could continue. The other thing
that he clearly is quite keen on is, is forward guidance. He said very clearly that the misstatement of some of these lending programs and actions
of the Fed has freed up and loosen some of these credit markets.
So, that is something that they are clearly looking at that forward guidance or something, they could do more, and they could do it with
specific, you know, targets when it comes to dates or numerical targets, so there is more they could do there. But I was listening really closely,
Richard, and this was the first thing that you asked, to hear what he thought about the recent rise in cases in the U.S. and whether that changes
the Fed's calculus. Clarida himself said in mid-June, that he thinks that growth will return in the third quarter.
Now, he didn't specifically deny that he thinks that's still the case. But he says that a double dip is not their base case scenario. So, that I think
was something to note going forward.
QUEST: It was a way in which, you know, the mere presence of the programs, as a backstop, creates the reassurance. And that, in many ways, is the
Fed's main goal. I mean, you think of the discount window, you think of all the other things he does. The fact it's there, prevents people from betting
against the Fed with its unlimited forces. Related to that, of course, is what it does do next. What's left in the toolbox? Do you think forward
guidance which you talked of is sufficient?
SEBASTIAN: I think, as he said, Richard, it depends on the course of the virus, things are not looking great right now. Dr. Fauci has said that this
is a surge, not a -- not a second wave. But we still don't know how long this is going to go on and what's going to come in the autumn. And the Fed,
frankly, is in the same boat, they have thrown everything at this first wave. They still have a few more things they can do in terms of yield curve
-- yield curve management, forward guidance, of course, Q.E.
And meanwhile, and another point that I wanted to make is, that you asked him to address the disconnect and what we're seeing in the financial
markets. I think that that's critical. He didn't really sort of get drawn on that.
But the Fed has sort of been criticized for creating a level of moral hazard in this situation by backstopping pretty much everything. I think
there's a question as to whether they've contributed somehow to the, sort of, exuberance that we're seeing in the financial markets, whether this is
the Fed market. He said they were not focusing so much on that.
We're really focusing on, you know, the dual mandate of price stability and maximum employment, and the question of whether companies can get access to
credit. But clearly, they do watch the financial markets. We know that from previous statements from Fed chair Jerome Powell. So, I think that is
another thing that they that we need to watch going forward. But clearly, he did not want to contribute to any drop off in confidence in this fragile
situation.
QUEST: Clare Sebastian, who's in New York. Clare, thank you. TikTok insists it is not a security threat. The Secretary of State Mike Pompeo said the
U.S. is considering banning TikTok. Now, the reasons why the popular video sharing app which is gaining in popularity by the day, is owned by a
company based in Beijing.
As a result, Pompeo says it puts users' information in the hands of the Chinese Communist Party. Hadas Gold is in London. Hadas, whether it does,
or it does not, isn't really the issue if the administration decides to take against TikTok.
HADAS GOLD, CNN INTERNATIONAL CORRESPONDENT: That is a very good point. And that is something that Mike Pompeo has threatened to do because this all
stems back to a law in China, which requires Chinese companies to pretty much cooperate with the Chinese government.
Now, TikTok has always maintained that it never has and it never will share user data with the Chinese government. But clearly, this is sort of an
image messaging problem that TikTok has had for quite a long time and it's trying to change that.
[15:40:03]
It recently appointed, for example, Disney's former head of streaming Kevin Mayer, to be its new CEO, trying to prove that it is not a Chinese company
despite the provenance of its ownership. And it actually took another step recently, where it actually pulled out of Hong Kong as a result of that new
national security law, which we saw cause several other major social media and internet companies to pause sharing user data with any Hong Kong
authorities, as a result of this law.
We should really see this as really sort of a messaging effort by TikTok as it's trying to save what will be, I think, its largest user base in the
United States. And it actually recently suffered another setback where India banned TikTok. Keep in mind, that was a huge market for it.
Hong Kong, not a big market at all for TikTok, they told me. So, that's why you really should see it as sort of a messaging when I'm saying we don't
like this national security law. So, we're pulling out of Hong Kong, even though we're actually owned by a Chinese company.
QUEST: Hadas Gold. Hadas, thank you. Now, it has been some two months since I suffered from coronavirus. I actually had the virus itself. I've tested
negative. I've got the antibodies, although we're not sure how useful that is. The symptoms linger. After the break, we'll discuss exactly what this
means and how long they're likely to last, in a moment.
(COMMERCIAL BREAK)
QUEST: Back in April, April 18th to be precise, I tested positive for coronavirus. You know about that. We've talked about it on this program.
Well, the virus went after about 10 days, and I thought everything was OK. But now, of course, I'm realizing the long tail of the tornado, that is
coronavirus. I've written about it in an article which is on cnn.com. After you care to take a -- take a look at it. It talks about the long symptoms
that keep coming back. They won't go away and new ones come along all the time.
The latest one is being clumsy. I just dropped things, I fall over furniture, fell in the streets on the way back from doing some shopping,
the other day. Things are right in front of my nose and my eyes and hands just don't acknowledge them.
Our CNN Medical Analyst Dr. Celine Gounder is with me, the epidemiologist and infectious disease specialist. She joins me now. So, this idea that you
get it, it goes, you carry on. Those of us who've had it simply say that's not the case. There is this long tail of symptoms. What's going on?
[15:45:08]
DR. CELINE GOUNDER, CNN MEDICAL ANALYST: Well, Richard, I'm really sorry that you're one of those unfortunate people who is still having symptoms
this far out. You know, a lot of this has to do with how the virus causes disease, it does cause damage in and of itself, but much of the disease is
really about our immune system responding to the virus, causing massive inflammation. So, it's sort of a dysregulated response.
And in addition, a key part of this is specifically inflammation of the blood vessels. And one of the things we're seeing in autopsies and
obviously, we're not going to do an autopsy on a live person like you. But in people who've passed away, we are seeing tiny clots, blood clots all
over the body, which are probably part of the story as to why people have lingering symptoms.
QUEST: And this is something that is -- I mean, isn't fully appreciated. And one of the things, of course, and I'm not criticizing, is doctors who
I'm seeing and doctors, others, you're -- many of them are saying I don't know, or we don't know, or we haven't discovered that aspect of it. And
that seems to be different to most other forms of viruses that come along. Here, there's a level of unknown about it. Would you agree?
GOUNDER: Well, sure. I mean, this is something that only emerged in China in late December, you know, that only arrived in Europe after that and the
U.S. after that. So, we haven't had more than a few months to study it, to see what might happen. You know, the longest anybody has survived since
getting COVID is several months. So, I can't really predict -- none of us can predict for sure what this might look like a year or two, two years,
you know, more, after having had the infection.
QUEST: What would you say to somebody who says, look, Quest is still there, fine, he had a bit of a difficult time about it. But he didn't -- he worked
right the way through. He's still broadcasting. People I know have got it. Yes, they've got a lingering -- you know, it's not -- it's no big deal.
What would you say?
GOUNDER: Well, I think for someone like you or me who are very high-level professionals, I think every tiny amount of loss in productivity actually
means a lot, in terms of how much we're able to get done on the job. I think people like you or I are also lucky that we have access to very, very
good medical care and support. I think it's also important to remember that a lot of people aren't so lucky, don't have those supports. And they may be
working in more manual professions, perhaps, where that loss of you're just able to function is just really damaging.
QUEST: Do you worry that the symptoms will never go away?
GOUNDER: Well, you know there are these vasculitis, autoimmune, rheumatologic diseases, some of which we think can be kicked off
potentially by an infection, that do become lifelong conditions, whether COVID will be one of those, we just don't know right now.
QUEST: Celine, it is good to have you. I'm very grateful. Thank you for joining us.
GOUNDER: Feel better.
QUEST: In a moment. Thank you. Going, going, gone, Sotheby has managed to have an auction of art, online. It went well, very well, after the break.
(COMMERCIAL BREAK)
[15:50:00]
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Have we knocked them out, $1,500,000. Think she's out at 1,000,005. We must start with a world record price. Records breaking at
Sotheby's at $1,500,000.
(END VIDEO CLIP)
QUEST: So, they have the auction that was watched around the world, and particularly on the web. It was Sotheby's first ever virtual evening sale
last week. Now, the agents taking bids, in London, New York, Hong Kong, 363 million was collected, which is a record. Charles Stewart, the CEO of
Sotheby's joins me from East Hampton in New York.
He joins me via Skype. Charles, thank you. Congratulations on a record- breaking evening. But, you know, when I think about it, the room is nice. It's nice to have the auction room, but so many bids these days are virtual
via telephone. But did it make that much difference?
CHARLES STEWART, CEO, SOTHEBY'S (via Skype): Well, I think first of all, thank you for having me, Richard. And I do think, as you said, the results
very much spoke for themselves. We had an exceptional sale with a really high quality of work, and they sold very well.
Exactly, as you said, the key difference in this auction was that we designed it to be viewed entirely on a screen, as opposed to in person.
Historically, we've had the auctions live like a theater, and you're almost providing a streaming -- a stream as an ancillary way to view the auction.
This time, we flipped it around.
QUEST: What was the challenge in terms of that? Because obviously, anybody who was a serious buyer had pre-reg -- pre pre-registered, they had a good
line to you. They knew what they were. So, they were -- they were secure in that sense. From your point of view, what was the challenge?
STEWART: Well, this was the first time we'd ever done an auction in this format. And so, there were Really numerous challenges. You know, starting
with all of the health and safety issues that COVID presented with us and needing to do everything in a way that was social -- socially distanced. In
this case, in fact, we had our auctioneer, who you just saw, standing in London, and our phone bidders were based in a different room in London, as
well as in Hong Kong, as well as in New York.
And then we are accommodating bids both online as well as over the phone, all done in real time and simultaneously broadcast.
QUEST: It obviously took some quite a -- quite a great deal of organization. What I'm also interested in, is the fact that some of the
prices paid, were record prices, which bearing in mind the economic difficulties. Had you been concerned that this, you know that there
wouldn't be the money to make the prices?
STEWART: Well, as I said, I think one thing that we're seeing about the art market in general is, first of all, to this point, it has been, in fact,
very resilient. Secondly, masterpieces really A plus works by artists have held up very well from a value perspective. And thirdly, that in this
moment of nonstop COVID news flow that I think that collectors are actually, in some ways, more engaged in art and pursuing their passion and
it's a very welcome distraction.
QUEST: Right. But on the other side of that coin, do you anticipate more art coming into the market from those who either need to raise capital or
for example, from companies that feel it's no longer their wish to have like a corporate art collection? You know, if there are -- if there are
buyers, is that much by sellers? Where do you see the balance between those two at the moment?
STEWART: Well, yes, and that isn't exactly the question. It's really a question more of supply than of demand. We've seen that the demand has been
very strong.
[15:55:11]
STEWART: We certainly haven't seen a great deal of panicked or forced selling to this point. But I do expect that supply in the auction markets
as well as in the private sale markets, will be very steady. Certainly, as people are reevaluating their financial situation, not to mention people
thinking about estate planning in a -- in a world of ongoing pandemic.
QUEST: Charles, you can't see me, I can see you. But I have a couple of nice pieces of art on the wall here. Although --
STEWART: Yes.
QUEST: -- looking at your shot, I can see that -- I can see that very nice piece behind you that's got a big orange dot in the middle of it, that I
might be tempted to make an offer for. Now, you're going to tell me it's an extremely valuable piece that I couldn't afford in a month of Sundays.
Charles, it is good to see you, sir. Thank you.
STEWART: Thank you for having me.
QUEST: We need to find out what that piece was. I'm probably going to find it an extremely well-known, valuable piece. And my ignoramus of the art
market will be exposed for all to see. There's a profitable moment coming after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment -- that picture by the way, there it is, it's called Setting Sun by Hans Hofmann, sold last night for some 1.6
million. So, I guess I won't be buying it. My decision to talk about coronavirus and the symptoms thereafter, I decided to do it really simply,
look, I'm still able to work, there's no problem.
I'm not going to keel over in a moment. But I have still got these symptoms. They are a bit debilitating. And I just think people should know
that just when you've got it, it lingers and lasts, it doesn't go away. And we don't really know what the long-term effects are.
And that's why anybody who says well, herd immunity will solve the day or nah, don't worry, it'll all be over by Christmas. It won't be. If you get
this, you can expect the long tail of the tornado of COVID to bash you around for some considerable time to come.
That's all I was saying, nothing more. And to those who are worried, I'm feeling good. And that is QUEST MEANS BUSINESS for tonight. I'm Richard
Quest in New York. Whatever you're up to in the hours ahead, I hope it is profitable. If it's profitable enough, I'll be able to buy that painting
next time around.
END
