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Quest Means Business

GameStop Surge Resumes as Trading Blocks Relaxed; Johnson and Johnson Vaccine is 66 Percent Effective in Global Phase 3 Trials. States Facing Vaccine Shortages and Distribution Challenges. Aired 3-4p ET

Aired January 29, 2021 - 15:00   ET

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

[15:00:17]

RICHARD QUEST, CNN HOST: Sixty minutes before the end of trade, the final trading day of the week, and again, it's been a day of volatility.

The Dow dropped below 30,000 earlier in the day, and then it sorts of came back. The market is off 500, nearly two percent at the moment. We're off

the lows of the day, but well, it's anybody's guess where it'll end up.

It'll end up down, I'm pretty certain about that. But just how far whether we see a burst of selling in the last hour, it is hard to tell. The markets

and the events that have hit.

The limits are off and the battle resumes. GameStop shares are surging to end this historic week.

As U.S. markets are sliding, Joe Biden warns there's no time to waste on government stimulus.

And two new vaccines are added to the arsenal in the fight against coronavirus.

We are live in New York. It is Friday, almost the end of the month, 29th of January. Weekend is ahead. I'm Richard Quest, I mean business.

Good evening. Tonight, it's the Wall Street battle that rages on. GameStop stock at the center of it all is rallying since Robin Hood reopened trading

or at least buying to its online customers GameStop shares have recouped much of Thursday's losses. The price collapse when Robin Hood blocked

people from buying the shares along with other volatile stocks.

Some online platforms like Interactive Brokers have kept their restrictions in place. The founder and chairman of Interactive will join us shortly to

explain his decision and what might be the democratization if you like of the markets. But Robin Hood changed its decision and made an about face

after a torrent of criticism.

Paul La Monica is with us. Okay, Paul, so Robin Hood took a swathe of criticism. They said it wasn't a liquidity reason, but rather that it was

necessary to do it for orderly markets. Today, they found they could open up again.

PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think that they realized that there was such a significant amount of backlash that all of a sudden Robin

Hood was going from the darling of the millennial day trading crowd to being the villains here in this story along with the short sellers, and I

don't think that's a position that Robin Hood wanted to be in.

And they recognize that in order to have a functioning free market, as crazy as this has been, you need to have people be allowed to buy shares of

a company that's being heavily shorted.

QUEST: Why did it rise today? I mean, even for the -- all right, so you've got those retail investors, what I would call quasi professional investors,

in many cases, they're not sort of just -- you've got them, they know that the price doesn't reflect the underlying fundamentals of the company. They

know there's a short out there.

But who wants to buy into a stock where there's every opportunity, at these elevated levels, where there's every opportunity that is going to fall?

Other than to short it?

LA MONICA: I mean, I think it's all about the ability to trade in and out very quickly in a world where you don't have as many fees and commissions

as you used to. I don't know if something like this would have been possible in the late 90s early 2000s, the advent of online trading when it

was a lot more expensive for people to execute trades.

Now that you don't have that anymore, it is a lot simpler and cost effective for an average day trader to say hey, you know what, I'm going to

keep buying this stock, and then I'm going to sell it quickly as well to lock in some gains and then you know what, maybe I'll buy it back again

later in the day, depending on how volatile it has been and GameStop and AMC, they are extremely volatile right now.

QUEST: And of course, you can buy fractional shares, which encourages many more people and we'll talk about that with the Interactive Brokers CEO in

just a moment. The wider market, Paul, let's look at the wider market and signs that speculative retail trading is having a wider impact at the

moment and spooking investors.

The Dow was off down under 30,000 earlier in the day, the wider market has also been sharply -- are we making too much over this potential systemic

risk into the wider market?

[15:05:03]

LA MONICA: Yes and no. I think here's how I see it Richard and I've talked to a couple of people about it today. One, I don't think that GameStop and

the drop in its stock is necessarily the same thing as Lehman Brothers in 2008 and all this counterparty risk where Lehman Brothers brings down AIG

and Washington Mutual and the financial system, that's not the case with a still relatively tiny video game retail.

The issue though, is a lot of professional investors are getting squeezed by this Reddit crowd. And as a result, if you are in a stock that you had

been shorting and you see it going up, and you need to get out of that position, you may have to take some money off the table from profitable

bets that you've made already.

So is it possible that there are hedge funds out there saying, you know what, we're going to trim our stake in the FAANGs so that we can cover our

GameStop position, perhaps that's what some people have told me today. I don't know if that explains exactly the entire reason for the broader

market being this much lower today. But again, there are a lot of things going on.

Remember, keep in mind that the market rallied so strongly at the end of last year, a little bit of profit taking isn't that big of a problem right

now.

QUEST: And of course, for all those buyers, unless it is an option, there is a seller on all of those on the other side. So that's how you get to

that position. Paul, thank you.

The S.E.C. says it will closely review the restrictions placed on trading this week. It also warned that extreme volatility put the whole market at

risk. Capitol Hill is pressing for investigations into Robin Hood's behavior in a rare moment of bipartisan support.

So far, the White House isn't taking such a stance or much of a stance, they say the situation and the S.E.C. has it under control.

(BEGIN VIDEO CLIP)

JEN PSAKI, WHITE HOUSE PRESS SECRETARY: I know the S.E.C. issued a new statement earlier this morning, or just before I came out here and I'd

certainly point you to that and others to that, and we of course respect the role of regulatory agencies. They are closely monitoring the situation,

but it's under their purview at this point in time.

(END VIDEO CLIP)

QUEST: White House correspondent, John Harwood joins us. Congress is looking into this. Is the White House concerned, either because it could

cause something greater or there's a perception?

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: I don't think so. I don't think they believe it is capable of causing a greater damage to the

economy. And they don't want the distraction from their main priority, which is passing their COVID relief bill.

They're also trying to emphasize the idea that in the wake of the Trump administration, this is a professionally run administration that lets

experts do their job. The experts in this situation are the S.E.C., Congress, of course, will pipe up whenever there's something of substantial

public interest, although I wouldn't expect a whole lot to come from the congressional investigations.

Members of Congress of both parties want to speak up for the small investor or a subset of small investors is the one that's generating this huge

oscillation in the price of GameStop. Many of those people, of course, are going to end up losing a lot of money. But it's their prerogative in a free

market to do that and they appear to be motivated by the desire to hurt some of these big Wall Street hedge funds.

That's not something that either the White House or Members of Congress going to stand up and say, hey, you can't hurt a big hedge fund.

QUEST: In a new Congress, there are those in terms of jockeying for position, whether it's the chairman of the banking committee or Elizabeth

Warren, all of whom will be to some extent wanting to lay down a marker. I'm not saying it's going to be Warren Mark 2 from her earlier battles, but

so early on, they'll want to set a red line to mix my metaphors.

HARWOOD: Yes, I mean, rhetorically, they're going to say, as Elizabeth Warren has said, I've got no sympathy for those big players on Wall Street.

You know, Bernie Sanders says that business model of Wall Street is fraud, and that you get the downsides of that as well as the upside. I think that

is mostly rhetoric, though, and it's rhetoric that you'll hear from some on the right, Ted Cruz, for example, but I don't think that rhetoric is likely

to result in any big legislative push.

QUEST: John, thank you. Have a good weekend, sir. I appreciate it. Thank you, John Harwood joining me from Washington.

Robin Hood's CEO says they made the decision to halt the purchase of volatile stocks, 13 in all to protect the firm and its customers.

(BEGIN VIDEO CLIP)

VLAD TENEV, CEO, ROBIN HOOD: I want to be a hundred percent clear. This decision was not made on the direction of any market maker or other market

participants.

We haven't really seen anything like this before and to prudently manage the risk and the deposit requirements, we had to restrict buying in these

13 stocks.

(END VIDEO CLIP)

[15:10:11]

QUEST: Now, the founder and chair of Interactive Brokers, Thomas Peterffy is with me now, Thomas. Thank you, sir. I appreciate your time. We have a

much to talk about, and we have time to do it.

Let's just deal with this question of closing down or at least restricting the ability to trade. It's all to do with highly technical stuff of the

clearinghouses, the requirement of reserves and the like. But you've decided to maintain those restrictions. Why?

THOMAS PETERFFY, FOUNDER AND CHAIRMAN, INTERACTIVE BROKERS: So, we restricted stock purchases and sales by putting 100 percent margin on them.

So, the fact is that within prohibited, we just made it more expensive than usual.

As far as options trading was concerned, yesterday, we restricted all options trading. Today -- so why did we do that? We did it because we think

that the only way to stop a short squeeze is to order participants -- market participants -- to trade for liquidation only. And we were hoping

that if we will do that, other industry players will follow us and then the S.E.C. would follow us, but that didn't happen.

So the SEC said they are not going to do anything, they will just closely follow the situation. Other players decided that it is not in their

competitive interest to do that. So, since we didn't want to be the only ones to do this, we have again, today opened up options for trading.

But we are not charging much higher margins on short options than we did before.

QUEST: How concerned are you and I know a lot of Interactive brokers. It is all about the democratization to some extent of trading. But how concerned

are you that whatever the good part of this might have been, getting more people in, it's somehow perverted a bit in the way in which it's now being

executed with this exceptional volatility?

PETERFFY: So, I'm sorry, my cell phone, and I didn't hear you.

QUEST: I'll ask, again, how concerned are you that basically, the democratization of markets is turning into something far more unruly,

because those people who are using them have ulterior motives than long term investing?

PETERFFY: I'm not at all concerned about that. What I am concerned about is there is a hole in the system and that has been there ever since Wall

Street started, and which is the short squeeze.

Now, the regulators did not -- never addressed short squeezes, and because the problem basically went away when they made it part of what they call

market manipulation, and they made it illegal.

So historically, in the last few decades, people did not do any short squeezes because it was criminal. Now, that we have these social platforms,

people can sort of chat and talk to each other into running a short squeeze without the regulators being able to point at any individual person who

have instigated it. So that's why this thing now emerges.

So, the way to solve this is the regulators have to come out with higher margin requirement for short stock positions and corresponding short

options positions. And otherwise, I do not see any issues with the democratization of markets. I think it is great that a larger and larger

percentage of the population gets involved with the stock market and understand how the economy works.

QUEST: You led the way in this, didn't you, Thomas, with of course, fractional shares, which was a huge advantage in the sense of, you know,

let's look at Amazon at three and a half thousand or whatever it is, or Chipotle at $1,400.00 a share. Nobody wants to buy one share even if you

can afford it, but you're allowing people to buy them.

Do you see a future where you end up with lots of millennials, who are buying and selling legitimately smaller fractions of shares, and therefore

becoming more involved in their portfolio in a way that they couldn't do if they had to pay for the whole share.

[15:15:17]

PETERFFY: That's absolutely possible. So, I would recommend for young people to invest $10.00, $20.00 or $30.00 and learn how the markets work,

and learn how to analyze stocks. And lately, it's also they can really impact the issues of the environment by selecting stocks that are -- of

companies that are environmentally friendly.

And accordingly, we recently released a new tool where people can read stocks, where we rate stocks by their environmental value alignment, and

you can put in your values.

We have a tool where you can put in your values and you can analyze a portfolio and see how you can change stocks to have your portfolio aligned

with your values 100 percent.

QUEST: Interesting. Thank you, sir. Have a good weekend. I appreciate you taking time tonight.

PETERFFY: Thank you very.

QUEST: Thomas Peterffy from Interactive Brokers.

This, in a moment, we turn to the virus, the spread of the highly contagious strains makes the race to get more vaccines on the market ever

more urgent. J&J's vaccine could be closer to approval tonight. The Phase 3 clinical trials have come to an end. They've reported results, now, the

regulators are looking at it. In a moment.

(COMMERCIAL BREAK)

QUEST: It's a bit like waiting for a bus. You can stand there forever and then suddenly, two arrive at once. Well, so for the past 24 hours, two

companies have reported promising news about their coronavirus vaccines from the Phase 3 clinical trials. It's the last one before the regulators,

J&J, Johnson & Johnson says it's single shot vaccine was 66 percent effective overall, it jumps to 85 percent when related to severe illness

alone, and of course, it follows results from Novavax on Thursday, whose vaccine is 89 percent effective.

Our correspondent Elizabeth Cohen is in Atlanta. I mean, I sort of know that the whole efficacy question is extremely complicated, and I don't

really follow it all the way, but other than to say, these both look like they work.

[15:20:12]

COHEN: Yes, actually, Richard, it's not that complicated. So, Pfizer and Moderna work excellently, and Johnson & Johnson works not quite as

excellently, their vaccine does work, it just doesn't work, as well as Pfizer and Moderna. And the bottom line for all of us is, if you --

according to the experts I've talked to, if you can get a Moderna or a Pfizer shot, you should get it, if you can't get it, but sometime in the

future, if you can get a Johnson & Johnson shot, you should get that because it will do a great job of protecting you just not quite as great as

Pfizer and Moderna.

So let's take a look at what the numbers, what the J&J study actually found. So when they looked at how well the Johnson & Johnson shot, and it

is one single shot, protected against moderate to severe cases, they found that it was 66 percent effective, but Moderna and Pfizer was around 95

percent effective for those kinds of cases.

Now let's look at what matters even more. How did the vaccines do at protecting against cases of severe COVID-19, enough to put you in the

hospital or even to kill you? Johnson & Johnson 85 percent effective, Moderna and Pfizer a hundred or nearly 100 percent effective.

So again, the bottom line here is: get vaccinated with whatever you can get. If you can get Moderna and Pfizer, get it. If not, get Johnson &

Johnson.

And Richard, if you're wondering, why does it seem like Johnson & Johnson's vaccine didn't work quite as well. It may be because they had a lot of

pressure to do just a single shot and they did it. And I know some experts are telling me they think it would work probably just as well as Moderna or

Pfizer if they had two shots.

The other thing is that Johnson & Johnson did a chunk of their trials in South Africa where that new variant is circulating, and it didn't work

quite so well against that new variant -- Richard.

QUEST: Okay, so, the issue remains amongst -- because we've got Novavax as well. And we need all these vaccines at different points in different

places at different cost points. And so, is it your view that we're getting to a point of satisfaction in terms of number of vaccines that are

available with obviously some like AstraZeneca being obviously much easier to use?

COHEN: I think it's not so much the number of different vaccines, it is, do we have enough doses? I mean, if Pfizer and Moderna, which so far have the

best results, if they could supply the entire world, that would be great, you wouldn't necessarily need other companies. But that is not the case. I

mean, look at what's happening in the United States. There's not even enough to vaccinate, you know, even really a substantial fraction of the

people in the United States.

You need more people, more companies to make vaccines in order to have enough doses. So that's the bottom line. So that's why Johnson & Johnson is

a welcome addition, even though it's not quite as good as Moderna or Pfizer.

QUEST: Elizabeth, thank you -- Elizabeth Cohen joining us.

Now, Johnson & Johnson's vaccine is approved and as there is no reason to suggest it won't be. It would help alleviate the strain on healthcare

facilities struggling to meet demand in many states.

They are struggling with the rollout itself in California, as well as in the U.S. in general. The number of doses administered lags far behind those

distributed.

Johnese Spisso is the CEO of the University of California, UCLA Hospital System and joins me now. Good to see you, ma'am. Thank you for taking time.

Before we get into the nitty-gritty of vaccines, this vaccine and that, the perception is that the virus is out of control in places like Los Angeles,

and the situation is deteriorating. Is that accurate?

JOHNESE SPISSO, CEO, UCLA HOSPITAL SYSTEM: So, thank you, actually, this week, we really started to turn the corner on that. Earlier in the month,

we were really seeing rapid increases in the numbers of patients and in Los Angeles County, which has about 22,000 hospital beds, we had about 9,000 of

those beds filled with COVID-19 patients.

This week, we're doing a lot better. We're down to 6,200 patients with COVID. So, while we're still in the midst of the pandemic, we're seeing

numbers go in the right direction. And here at UCLA Health, this morning, we have 118 COVID patients where earlier in the month we had over 200.

So, we've been pleased with the trends that we're seeing.

QUEST: Are your advisers telling you though to watch out because, you know, the new variants which are more transmissible, they are widely -- I mean to

Dr. Fauci said today that he expected that the new variants would be the dominant virus by March, you could see a sizable uptick again then.

SPISSO: Yes, that's true. And in fact, that is why we're continuing to remain vigilant in all of our practices with masking, handwashing, social

distancing, and reminding the public of the importance of that, particularly now, as we're seeing these new variants surface.

[15:25:23]

QUEST: The vaccine rollout to a sort of an interested but uneducated observer, it seems to have been shambolic, how would you describe it?

SPISSO: So certainly, with the arrival of these vaccines, a lot of hope has come forward and it has been great to see the rapid scientific discovery

that led to these safe and effective vaccines.

We began administering vaccines on December 16th, and today, we've immunized over 41,000 of our healthcare workers and now we're starting with

immunization of patients who are 65 and older.

So, it's still definitely a scramble to get enough vaccine, but we're working very hard with the county and with the State of California to get

supplies so that we can rapidly administer them.

QUEST: What's your biggest problem? I mean, when we -- you know, having gone through last spring, and then gone through the summer spike, July 4th

spike, and what we've just seen, of course, is the Christmas-Thanksgiving sort of spike. So, looking forward now, what's your biggest problem?

SPISSO: You know, I think the biggest challenge right now is how rapidly we can get the vaccines deployed. The public, everyone wants these vaccines,

there's more demand than there is supply. And so that's very difficult to you know, have people out there waiting as they're seeing the virus surging

in the community, that as well as I think our staff are beginning to get a little fatigued through this second phase, but we're doing a lot with them

to build resiliency.

QUEST: Good to see you. Thank you very much. I appreciate your time. Thank you.

SPISSO: Thank you.

QUEST: The GameStop menu was arguably years in the making, brewing Wall Street resentment is one of the factors that got us to this point. We'll

explore it all in detail. Mohamed El-Erian is with us later.

(COMMERCIAL BREAK)

[15:30:00]

QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment.

Well, we are seeing the GameStop saga -- is it a flash in the pan or is it actually a seismic shift? Mohamed El-Erian's with us after the news

headlines.

And the E.U. allows the use of AstraZeneca's vaccine and steps up its battle with the U.K. over access to the shot.

This is CNN and, on this network,, the facts always come first.

The FBI says two pipe bombs found near the Democratic and Republican party headquarters in Washington on January 6th were planted the night before the

insurrection at the Capitol.

The FBI has released enhanced photos of the man they suspect planted the pipe bombs and increased the reward for his arrest to $100,000.

European regulators have approved AstraZeneca vaccine for use across all of the E.U. Medical experts say the vaccine is safe for all ages. However,

German officials are waiting to give it to patients over 65 as they say there's not enough data on its effectiveness in that age group.

GM, the largest car manufacturer in the United States says it wants to stop making gas and diesel fuel vehicles. The company says it plans to make

nothing but electric cars by the year 2035. It's the first time GM's put a firm date on going 100 percent electric.

Returning to our top story now in the GameStop frenzy.

This is how the stock is trading, half an hour before we go to the end of the trading. Up 54 percent.

The brokers that had limited trading, those like Robinhood, have removed those limitations and that gave the stock a major boost -- although it begs

the question why people are investing in it when it seems to be like a pump and dump situation. But that's a subject for another day.

The short sellers, those who pushed the -- those who bought intending to sell because they believed -- those who sold it intending to buy believing

that the market would fall, well, they're suffering deep losses according to the data analytics company, S3 Partners.

$20 billion of GameStop stock alone -- that's not easy to say on a Friday after a long week. A truly wild week that Wall Street won't forget in a

hurry.

(BEGIN VIDEOTAPE)

QUEST: No one predicted the trading revolution would begin here. Its tale is all too familiar.

A struggling brick-and-mortar retailer and a target for short sellers. Then something strange happened.

ZAIN ASHER, CNN ANCHOR: Videogame retailer GameStop, its shares are up some 15 percent premarket.

QUEST: GameStop is soaring once again.

CNN ANCHOR: Videogame retailer GameStop is set to continue their head spinning ascent today.

QUEST: Retail traders, organizing on Reddit, had spotted a simple opportunity. They knew that the major institutional funds were predicting

GameStop's demise.

So, using trading apps like Robinhood, they snapped up its shares en masse and they put the hedge funds on the back foot. The results were staggering.

The same big investors who bet that GameStop shares would fall suddenly had to buy those shares to protect their portfolio and position. On Wednesday

the shares more than doubled in a day.

The Reddit traders celebrated their victory. The hedge funds licked their wounds. And suddenly everyone wanted in.

JORDAN BELFORT, AUTHOR, "WOLF OF WALL STREET:" I know it's just got to be more than a full-time job -- and because it's like catching a falling knife

when things start to go the wrong way.

QUEST: Just as the world was waking up to this, the trading platforms were forced to act. Public interest was surging and, as a result, Robinhood

blocked certain trades.

(BEGIN VIDEO CLIP)

VLAD TENEV, CEO, ROBINHOOD: You know, we had to make a very difficult decision to protect our customers and our firm.

(END VIDEO CLIP)

QUEST: Retail traders from several platforms were blocked from buying shares in GameStop and other companies that were being targeted. As

GameStop shares tumbled, the online trading community was furious.

(BEGIN VIDEO CLIP)

DAVE PORTNOY, FOUNDER, BARSTOOL SPORTS: In the history of the stock market, you don't ever hear of the rich guys, the institutional firms, the hedge

funds say hold on, we're making too much money, you better protect us in case it goes the other way.

This seemed like it was just the little guy was winning and the rules changed on the fly.

[15:35:00]

QUEST: Robinhood later relaxed some of the blocks. Even so, where things go from now is anyone's guess.

There are calls for congressional hearings. The White House and the SEC say they're monitoring the situation.

And yet because this trading is at the very grass roots, the mania continues. GameStop shares are up more than 1,500 percent this year.

A partner at one venture capital firm says it's only the beginning.

(BEGIN VIDEO CLIP)

DAVID PAKMAN, PARTNER, VENROCK: This is a fundamental change to the market dynamics. It's not just a bunch of institutional traders.

Retail investors are a force to probably be understood, and in a humble way.

(END VIDEO CLIP)

QUEST: None of this is a game, of course. The risks are very real and so are the companies caught in the middle.

Whether it's airlines or phone companies or bricks and mortar retailers, companies must now deal with a whole different breed of investor that can

be having dramatic influences on their share price.

Some traders say this could be a turning point in the markets.

Here's how we got there. Growing resentment against Wall Street since the great financial crisis, 2008. For some members of WallStreetBets Reddit

group, this is personal.

The disconnect between stock market and the real economy has added fuel to the fire. Look at those numbers, the so-called K-recovery.

And zero-cost stock trading popularized by companies like Robinhood democratizing investors. Add to the mix stimulus checks from Washington and

you have both the means and the motivation.

Mohamed El-Erian is the chief economic advisor at Allianz. He joins us.

Now, right so read your interesting article today. You're of the opinion that this is something more serious because of the times upon which it's

happening and the way it's taking place.

MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ, PRESIDENT, QUEENS COLLEGE, CAMBRIDGE UNIVERSITY: Yes, Richard. This is just an illustration

of risk taking having gone wild, not only in terms of what people are buying but what people are shorting.

And there's a simple reason for that. When there's ample liquidity at very low-price people use it and they leverage.

So, this is part of a bigger phenomenon which has been going on for years and now we've suddenly pressed fast forward. So, it's going to be

interesting to see how this plays out.

QUEST: You'll forgive me when I put this in blunt terms. I can hear the retail investor say he would say that, wouldn't he being part of the

establishment, part of the investment community. And what we're doing is giving those professionals a black eye. Why are they wrong?

EL-ERIAN: So, I'm glad they are. I have been on the side lines cheering for the retail investor, cheering for the fact that they're self-organized and

have realized their collective power.

So don't get me wrong, I know how this wants to end. I just don't have any guarantee it's going to end that way.

There are three things that you and I will be talking about for the next few months.

The immediate issue. Of the three parties involved, who gives up first? Is it the hedge funds that have reloaded on their shorts, is it the weekend

investor or is it the people in between, Robinhood and the clearinghouses that can't keep up? That's question number one.

Question number two. What are the regulators going to do? This is really tricky for the regulators. We all want more involvement in markets, we all

want democratization but how are they going to react to the changing structure and pattern?

And then the final issue is what happens to the broader market? The broader market isn't completely isolated from this, there's massive spillover

effects.

So, this is a fascinating situation. And I hope that the small investor wins. But there's a lot ahead still.

QUEST: OK. But by small investor I guess what we're talking about here is - - we had interactive brokers on earlier who've come up with this idea of fractional shares which really is great way of getting ordinary people who

can't afford to pay $3,000 for Amazon or whatever it is at the moment but still want to have a go at the market. It's a brilliant idea.

But you've got these other people who really are mischief making with leverage. And when the spillover happens, how damaging is that?

[15:40:00]

EL-ERIAN: And that is the issue. I tell anybody investing the two lessons I've learned very early on is A., you have no friends on Wall Street. You

may think they're your friend but, as you saw with Robinhood yesterday, with interactive brokers, they will put their interest first.

So just understand that this is a game where you have no friends.

Secondly and as importantly, realize that if you can't identify who's the weak hand then you're the weak hand. So you've got to figure these two

things out. Because one great risk here is that the small investor is taken advantage of.

And that's why part of self-organization and information flow and technology part of that is to try and level the playing field.

But it has been a very uneven playing field, Richard.

QUEST: Right. Now I want to elevate up to the macro-economic because this isn't happening in isolation.

I'm reading what you want to say -- "the dual possibility of large-scale financial volatility and market dysfunction would pose yet another

challenge to an economic recovery that faces both short-term challenges and longer-term ones."

Now, do you see systemic problems or even cyclical problems as a result of this at a time when the economy is trying to get back on its feet?

I guess it is sort of a blunt way of asking that would be is this incident or is this, what's going on, is it just a bloody nuisance?

EL-ERIAN: I think we have to keep it on the radar because it could be much worse than that. Let me explain how.

You could have a market accident. You could have a hedge fund that ends up being too offside (ph) -- you can easily have a market accident here.

Now, what has happened today? You said GameStop and others is up but everything else is down. Why? Because the people who are on the wrong side

of the thing going up are selling whatever they can sell.

So, you can see a situation where one hedge fund gets into big trouble -- I'm not saying it will, but that's what we've got to keep an eye on.

Or alternatively an intermediary gets into big trouble, they have to collapse their balance sheet, everybody else senses that, tries to front

run it. Next thing you know you have massive market volatility that feeds back onto the real economy.

That's more what you have to keep an eye out. It doesn't mean it's going to happen, but smart people look at signs for how far are we from that risk?

Hopefully, not very close but it would be silly to say it's not there.

QUEST: Just what we needed to hear from tonight. Thank you, sir. Appreciate it. Have a good weekend. (Inaudible).

EL-ERIAN: You, too, thank you.

QUEST: QUEST MEANS BUSINESS. It's a down day on the market. Before we finish at the top of the hour, we'll update you on where we stand on that,

of course.

Back in a moment.

[15:45:00]

(COMMERCIAL BREAK)

QUEST: I love seeing those penguins when they go off the side into the water.

"Call to Earth", a call for action on the environment. Sharing solutions, critical issues. It's something we talk about on this program, global

warming, deforestation and the like.

Now the long-term priority is, of course, to drive awareness and inspire change. And that's what we're committed to.

So today, we're proud and pleased to bring you how a Rolex awards laureate helped merge conservation with economic opportunity in Central Mexico.

(BEGIN VIDEOTAPE)

KRISTIE LU STOUT, NARRATOR: This is Sierra Gorda. Located in the heart of Central Mexico this remote mountain range is one of the most ecologically

diverse protected areas in the country.

With everything from deserts to tropical forests, all this was once under threat until Martha Pati Ruiz Corzo moved to the region. Until then she had

only lived in cities.

MARTHA PATI RUIZ CORZO, GENERAL DIRECTOR, SIERRA GORDA ECOLOGICAL GROUP: I was surrounded by such beauty, I have never seen such blue skies. And the

mist in the middle of the forest, it was like a shock for me.

STOUT: That was more than three decades ago. Today, she may be the region's most trusted guardian.

To protect that beauty, she co-founded the Sierra Gorda Ecological Group in 1987 after witnessing deforestation as a result of agriculture, man-made

fires and illegal logging.

In 1997, her grassroots organization helped the region achieve biosphere reserve status protecting nearly 400,000 hectares of land roughly the size

of the U.S. state of Rhode Island.

Today, Sierra Gorda or the Fat Mountains is valued for its wealth and biodiversity.

The group says it is home to 345 species of birds, 800 types of butterflies, more than 110 different mammals like the jaguar -- and around

2,400 plant species.

For Corzo, was possible by collaborating with the local communities, many who live in poverty. Instead of logging, she helped find them alternative

ways to make a living.

CORZO: Here in Gorda, more than 97 percent of the land is private land of 637 communities. You have to give them an opportunity because that's all

what they have.

STOUT: Raising money by working with partner organizations and the government, she created economic opportunities through protection of the

environment.

This helped create paid jobs in reforestation, waste management, eco- tourism and education.

Planting the seeds of change, Corzo hopes her work will inspire people across the world.

CORZO: (Inaudible) societies so far, we need to talk about mother nature to connect them. Not everyone is going to recognize her but there are many

people that is ready to act, that are really worried about the future and that are looking for answers.

I am convinced that there she is for everyone. Because she is everything.

STOUT: Conservation, helping preserve the beauty of the Sierra Gorda for future generations and sustain livelihoods through nature.

(END VIDEOTAPE)

QUEST: We'll continue showcasing inspirational stories like this as part of the initiative here.

Let us know what you're doing and use the hashtag #call to earth.

[15:50:00]

QUEST: European regulators have given the OK for all European countries to use the vaccine developed by AstraZeneca and Oxford University.

It comes as the E.U. and AstraZeneca are squabbling about how much of the drug will be available.

The company says problems at its production facility will slow delivery. The E.U. have responded announcing new controls on the export of COVID

vaccines produced there.

STELLA KYRIAKIDES, E.U. HEALTH COMMISSIONER: Commitment needs to be kept and contracts are binding. Advance purchase agreements need to be

respected.

Today we have developed a system that will allow us to know whether vaccines are being exported from the E.U. This is an insurance policy.

QUEST: Melissa Bell's with us. All right. Let's start with the basics here.

The rollout in Europe is turning into a fiasco. People are getting vaccinated but there's not enough vaccine to go round.

Secondly, you've got Germany which may or may not say AstraZeneca can be given -- can't be given to those over 65.

And you've got Hungary which has now contracted for both the Russian and the Chinese vaccine even though they've not been approved in the E.U.

Now pick one from that.

MELISSA BELL, CNN CORRESPONDENT: Where do we start, Richard? Bear in mind that this as well this came late.

Remember that the E.U. had trouble coordinating its vaccine policy, its vaccine coordination and when it did, it wanted to do things very

differently.

It was meant to be a show of European solidarity, of European strength, of European unity. So, you're right, from every possible point of view,

Richard, this is looking increasingly like a fiasco.

Just the facts on the ground. France, Germany, Spain, all announcing that they're either have to slow, Richard, or bring to a halt in some regions

their vaccination campaigns because the two vaccines already been approved for use in the European Union, the Pfizer one and the Moderna one, are

already running short on supplies.

So you can see why they've made this issue with AstraZeneca such a big one. It is crucial that they begin to get these vaccines and that they get them

in the amounts that they've been promised.

QUEST: How come we have a situation, though -- now I know the German regulator hasn't specifically said that they will stop it for those over

65, but they have already said that they don't think it should be given.

How can you have a situation where the main regulator who approves it doesn't say anything about this but the largest country in Europe, their

regulator says oh no, we've got problems with this over 65?

BELL: Well, I think one of the problems that the European Union had is that questions to do with health, for instance, were really dealt by member

states until this pandemic came along and forced them into some other kind of thinking.

Hence their vaccine procurement strategy that came late but nonetheless they hoped would showcase their European unity to the world and allow them

to be efficient.

[15:55:00]

But, of course, once they set it up there was a system where the European Medicines Agency would decide what vaccines were allowed, could be marketed

in the European Union but then it still has to go to the agencies of the member states.

Because, of course, these are devices that have been built in response to the pandemic, it hadn't been planned this way.

And so you have a situation -- and it was the case with the other two vaccines -- they are approved by the European Medicines Agency then it has

to go to the member state's agency and then the European Commission gives the green light.

So there is a procedural slowness to all of this and, of course, exposed very much, Richard, as you say by the German agency's announcement that

they simply don't believe that there's enough data to suggest that this vaccine is efficient enough for the over 65s.

QUEST: Right.

So for the time being the EMA has said that it is allowed for everyone including those over 65. Will Germany allow them for the time being? We

don't have much clarity on that.

Melissa, thank you. We'll have a "Profitable Moment" after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's "Profitable Moment". What a week it has been. The markets have been all over the place.

Look at the way GameStop has just been up and down and ending the day 69 percent up.

It has been a source of absolute head-turning bewilderment as we question whether or not something more fundamental is going on at the moment in the

markets.

What a week it has been. Oh, yes.

One of our own has made the decision. Congratulations to our executive producer, Thomas. There he is on the right who's marrying Sara (ph). Asked

her to marry -- that's St. Paul's Cathedral. Tom Foster did the deed on the wobbly bridge in London and I'm reliably informed she said yes.

Tom has been with the program, I think besides myself, the longest on the program. And we want to wish both of them all the very best.

As indeed we wish ourselves the best because this week has been 12 years of QUEST MEANS BUSINESS. And I promise you there's another 12 still to come.

There's a threat for the weekend.

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's profitable.

Please, let's get together on Monday. Dow is down, bell is ringing, day is done. Oh, that's an ugly number.

END