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Quest Means Business
Retail Trading Frenzy Turns To Silver; Sen. Warren Says SEC Needs To Clean Up Wall Street Casino; Europe Struggling To Overcome Vaccine Shortfall; Scottish Fishermen Say Red Tape Threatens To Kill Business. Aired 3-4p ET
Aired February 01, 2021 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:01]
RICHARD QUEST, CNN INTERNATIONAL HOST: Hi-ho, silver. Prices are surging and retail traders have a new asset to argue about.
Vaccine makers are promising more doses will be delivered to E.U. nations.
And Republican senators want to slim down stimulus package. They're going to meet the President Joe Biden, any moment from now.
We are live in a very snowy, cold, in fact, it's blizzardy rather. It's Monday, the first of February, but we are here with you. I'm Richard Quest,
and of course, even in the snow, I mean business.
Good evening. Tonight, retail traders are setting off a silver rush amid new worries about market volatility. Silver was trading on Monday at its
highest level in eight years. Buyers have been talking it up on social media. Remember the price you're seeing there is what it is doing right at
the moment. It doesn't reflect the way the whole day has gone from one close to the next. And members of the Reddit group WallStreetBets are split
over the move into precious metals.
Some say buying silver will strike a blow against hedge funds and banks, as I say, weakens their position on GameStop and other shortened stocks.
Now look at GameStop, and you see what I'm talking about. It's down sharply. This could be because the buying activity has abated on that
stock, or at least it is just a moment of reality down at now 236. AMC shares are climbing which does suggest that the activity -- not just
suggest it -- it confirms activity is still there.
The unusual trading patterns are causing anxiety in Washington.
(BEGIN VIDEO CLIP)
JEN PSAKI, WHITE HOUSE PRESS SECRETARY: There is an important set of policy issues that have been raised as a result of market volatility in recent
days, and we think congressional attention to these issues is appropriate.
(END VIDEO CLIP)
Paul La Monica is with us. First, Paul, tell me what's this play with silver all about? I mean, who's on the -- who is on the other side of this
silver trade?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, it's a bit mysterious, Richard, because you do have people when you look at that Reddit WallStreetBets
community that's now required reading for anyone in our business, there is this divide as to whether or not people think that they should be trying to
squeeze silver higher as if silver was something that was being shorted to the levels that GameStop and AMC were.
And there's even, you know, some Wall Street, you know, some Reddit silver threads that are out there also. But what I find a little bit odd, Richard,
is that if you look at the big silver ETF, SLV, one of the top five holders in that is Citadel, the same Citadel that has its relationship with
Robinhood about order flow, and would be benefiting from any rise in silver prices going up.
So I'm not so sure that the Reddit community wants to be handing Ken Griffin and Citadel another big fat check by essentially pushing silver
prices higher. It is a bit strange that this is all of a sudden the asset that has become a day trader play tool.
QUEST: And also, I mean, what are they trading in? The trading, obviously, the ETF, one level but the thing with silver, it's all related to the
amount that comes out the ground. It's all related to -- I mean that there are two distinct traders in precious metal commodities. There are those who
do it for speculative purposes, and there are those who do it for physical delivery.
LA MONICA: Yes, and I think most people that are buying silver, they are not buying the metal itself. They are buying ETFs, they are doing it as a
hedge against inflation, a weaker dollar similar to what is happening with gold and also Bitcoin, which has now become kind of like the digital
precious metal.
So I think when you look at what is happening with silver, there are a couple of silver mining stocks that have also been surging higher as the
price of the metal has exploded today. They are benefiting, of course also.
But it's hard to imagine that the same investor that is deciding GameStop and AMC or something to buy because they think the consumer is going to
come back and that you believe the economy is going to rebound, it is not the same place.
QUEST: What's the point here? I mean, these days -- they're not -- well, they are day traders. But I mean, these retail investors, they seem to be
following the pack where the established institutional investors go, but eventually those institutional investors will adapt their strategy.
LA MONICA: Yes, I think that that is a valid point and that you could have the big hedge funds buy back, but for the time being, it could be a case of
some people I've spoken to said that, you know, hey, a lot of people are stuck at home right now, and they don't have much better to do. They may be
unemployed or underemployed or maybe they are fully employed and just have a lot of more money at their disposal, because they're not going out and
spending as much, they have cash to burn.
So they're trying to find these things to prop up and in some respects, it is kind of like Occupy Wall Street a few years ago, but it's gone digital.
[15:05:34]
QUEST: Paul -- Paul La Monica, thank you. Now the financial advisors often say there's a difference between -- excuse me -- between investing in the
market and placing bets. U.S. Senator Elizabeth Warren says regulators need to step in and do so now.
(BEGIN VIDEO CLIP)
SEN. ELIZABETH WARREN (D-MA): What's happening with GameStop is just a reminder of what's been going on, on Wall Street now for years and years
and years. It's a rigged game. They've turned this stock market, not into a place where you get capital formation to support businesses, but more into
a casino.
It's time for the S.E.C. to get off their duffs and do their jobs.
(END VIDEO CLIP)
QUEST: Place your bets. The investments promoted on Reddit do have the feeling of a roulette table. Now, first of all, spin the dice and it lands
on GameStop, a big target of the short sellers. Round it goes, and this time, they are buying up shares of the movie theater chain, AMC.
From there, it's gone in strange directions, including Dogecoin, a tiny cryptocurrency that began as a joke. Now, it's silver, the commodity and
the related securities. Where next? Red? Black? Numbers? Lines or street?
Rana is with us. Rana, who I'm sure will cast a supervisory glance over the -- look, Rana, what do you make of it? Are we merely seeing something
that's happened in different guises in the past? Same game, different rules.
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: I'm going to say yes and no. I would agree with Elizabeth Warren, who I feel maybe reading from my first
book, actually, which was on this topic, about the market itself having become a casino over the last 40 years or so.
I mean, I think that we've lost a certain amount of price discovery, particularly in the last decade with the Fed money dump, the central
bankers that have been papering over various problems in the real economy. But really, since the 1980s onward, I would argue that markets have become
much more driven by financial things, you know, stock buybacks, leverage than they have about underlying issues, and opportunities and challenges
within an individual company.
That said, I do think that what happened with GameStop, and in particular Robinhood as a platform, and we know that this platform has had problems,
they've already run into trouble with the S.E.C. before this. They are operating like a typical high tech, Silicon Valley startup move fast and
break things. So some of that is specific to this company.
QUEST: All right, Rana.
FOROOHAR: Yes?
QUEST: What's wrong with it? What's wrong with it? I've read a lot. I've seen -- you know, I've heard the millennials on my team, saying, good. This
is -- it's always been corrupt, but get on with it.
And then there's old fogies like me who say, well, we've seen this before. I remember 1987, et cetera, et cetera, program trading. So what is
fundamentally wrong with either them? Or is anything at all with what the retail investors are doing? Take, for example, today with silver?
FOROOHAR: Honestly, Richard, you can argue it both ways, and I've had conversations with regulators who will say, you know, in some ways, these
platforms are just the latest iteration of what began with index funds, and then continued with a retail broker like Charles Schwab. And now we have
apps and so hey, this is about the little guy getting in the game.
You can argue that as long as the little guy is playing by the same rules, not breaking existing rules, but you're getting a deeper question. I have
sympathy for those millennials. I think we have an asset bubble in markets. I think that we have an economy that's way too dependent on asset prices.
That's one of the reasons why I'm a big fan of some of the changes that Biden is trying to make with the work not well, you know, starting to move
to more of an income-based economy rather than one that's based so much on asset bubbles.
It's going to burst. It's going to end badly. And Richard, I will be back here on the show talking about it when it does.
QUEST: Oh, yes. No, I can hear the words coming out of your mouth, "I told you so."
FOROOHAR: Well? I'll give you another look over my glasses.
[15:10:08]
QUEST: Yes, oh dear. Yes, yes. I think that the thing that's really got me about all of this though is the damage it does, in my view to the -- to the
perception. Two times a year, I look at my pension fund, and I do my best to rebalance it, so I'm not sort of buying -- having to buy the cheapest
kind of soup when I retire, in terms of -- you know, but I do it on the basis of fundamentals. Where do we expect growth? Where do we expect
recovery?
What's happening now has got nothing to do with that.
FOROOHAR: That's absolutely right. But you have to also ask yourself what has enabled that? It's a variety of things, its technological innovation,
but also the fact that we have central bankers propping up markets, making it seem certainly to some of the 13-year-olds that are trading, they've
never seen a down market.
You know, there's a lot of people out there that don't know that we can have massive corrections, but we can.
QUEST: All right, finally, it's always -- it's a snowy day in New York, but a chance for us to get to do a bit of work, Rana. Explain to our viewers
who cannot -- who don't really understand why the Fed with QE, pumping money into the economy, which is necessary for growth to prevent collapse,
systemic collapse, why the Fed pumping money in pushes asset prices higher?
FOROOHAR: Well, essentially what the Fed does is by pumping money in, it elevates the asset prices of safety things, you know, Treasury bonds, blue
chip stocks.
The idea is to push people into the markets, get money being spent, keep interest rates low, which of course allows people to, you know, pay their
mortgages, pay their car -- make their car payments, it essentially keeps money flowing around the system, but it also papers over a lot of problems.
So yes, Richard, on the one hand, it is great. We needed that, certainly post 2008, but in the long term, there's always a price to pay. The piper
will be paid, and I think you're starting to see some of those cracks already with this story.
QUEST: Good to see you. I hope you are keeping well in the snow.
FOROOHAR: I am and into gold stocks.
QUEST: Where's next? Where's next for the millennials? For you know -- actually, we can't because I am not being dismissive. But where is next for
the retail investors?
FOROOHAR: Oh, great. Well, you know, commodities options. I mean, we saw just a few months ago, we had a big blow up with individual investors
getting involved in options to buy commodities. I mean, you know, silver today. More and more esoteric things being traded on Robinhood.
You know, when my 13-year-old says, "Mom, you've got to buy the dip." I know it's time to get out.
QUEST: No, no, no, no. Your 13-year-old was saying "Mum, you've got to go and buy dips."
FOROOHAR: Maybe that was it.
QUEST: Okay, maybe next year -- maybe later in the year, we will give the 13-year-old a portfolio and see if they can beat the street. Thank you.
Good to see you, Rana. Rana Foroohar joining us there.
Okay, buying GameStop has paid off handsomely for some members of the Wall Street Reddit group, WallStreetBets that is, at least for now. Jon Sarlin
with this report.
(BEGIN VIDEOTAPE)
AJ VANOVER, INVESTED IN GAMESTOP: This is my account total at the moment on Robinhood.
JON SARLIN, CNN DIGITAL, PRODUCER (voice over): Right now, there is more than a million dollars sitting in AJ Vanover's Robinhood trading account,
all thanks to a hugely risky bet on GameStop.
VANOVER: And I knew I was going to make money, but I got lucky with how it actually unfolded.
SARLIN (voice over): AJ is 31 years old and lives in Missouri with his family. In 2019, he started following WallStreetBets, a chaotic and
gleefully profane stock trading Sub-Reddit.
VANOVER: People are really going to step in and help you, like if he didn't know how options function.
SARLIN (voice over): Soon he was trading, and he had a hunch about the video game retailer, GameStop. AJ says he bought a hundred shares, and then
some options, investing about $4,500.00 total, and then this happened.
BROOKE BALDWIN, CNN HOST: A new twist in the Reddit field stock rollercoaster taking the world by storm.
SARLIN (voice over): Now this battery store worker who makes $35,000.00 a year is a millionaire, at least on paper, for now.
SARLIN (on camera): You haven't sold your stocks yet.
VANOVER: I want to make more money and I feel confidence going up. I have to search around and I might see how far it goes now.
SARLIN (voice over): AJ and the online army of amateur investors he's a part of have rocked Wall Street by buying up GameStop and other shares. The
big hedge funds who were betting against those stocks lost billions, just icing on the cake for AJ.
VANOVER: I wasn't happy about the 2008 crisis. It was kind of upsetting to see everybody get bailed out that really caused it, and nothing really
happened. It is interesting this time to see them on the other end.
SARLIN (voice over): But AJ is playing a risky game. Plenty of folks in the Reddit community have racked up huge losses. In a 2020 farewell post, one
member described losing years of savings writing, "I went from a rational investor to some sick, irrational, desperate gambler."
But no matter how this ends, the Reddit army has rattled Wall Street to its core.
SARLIN (on camera): How much of this do you think is a paradigm shift?
VANOVER: This is the first time I've ever seen the masses be able to win this big, and I think it's going to get a lot more people interested in
actually getting into the markets.
SARLIN (voice over): Jon Sarlin, CNN, New York.
(END VIDEOTAPE)
QUEST: Fascinating. Now, the European Union is making progress on speeding up vaccine deliveries. It has two new pledges from drug makers tonight that
could help with widespread shortages. QUEST MEANS BUSINESS. Good evening.
(COMMERCIAL BREAK)
[15:18:44]
QUEST: The makers of two COVID-19 vaccines are promising to speed up supplies to Europe. BioNTech and its partner, Pfizer now say improvements
in production allows them to deliver up to 75 million more doses than originally planned in Q2.
The E.U. says that AstraZeneca is also ramping up production. The company now pledges to deliver a total of 40 million doses in the first quarter.
Although that's nine million more, it is less than the original commitment.
In just a moment, we'll get the latest position from Melissa Bell in Paris, who will update us. First though to Nic Robertson, who reminds us how
Europe's vaccine rollout got off to such a rocky start.
(BEGIN VIDEOTAPE)
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (voice over): More than a potential lifesaver. Each COVID-19 vaccination vital for each nation's
recovery.
And last week, the E.U. realized it was short.
MICHEAL MARTIN, IRISH TAOISEACH: There is significant tension across Europe in relation to the sense across Europe that commitments entered into by
AstraZeneca has not been fulfilled.
ROBERTSON (voice over): The E.U.'s opening salvo in what is being called here a vaccine war, border controls on the Island of Ireland reigniting,
simmering Brexit tensions.
ARLENE FOSTER, NORTHERN IRELAND FIRST MINISTER: For years we were told after the European Union referendum vote that there couldn't be a hard
border on the Island of Ireland and in one fell swoop, they have put that hard border in place.
[15:20:14]
ROBERTSON (voice over): Foster's pro Brexit party was already losing support. But all Northern Ireland parties united as the E.U.'s vaccine
frustrations became their political problem: collateral damage.
CLAIRE HANNA, SOCIAL DEMOCRATIC AND LABOUR PARTY MP: What it has done is provided a very substantial bump in the road to stability, and we were
probably getting to a point where people were getting over the initial shock of Brexit.
ROBERTSON (voice over): From the former PM who helped bring peace to Northern Ireland more than two decades ago, disappointment with the E.U.
TONY BLAIR, FORMER BRITISH PRIME MINISTER: This is a very foolish thing to do. Unfortunately, they withdrew it very quickly.
ROBERTSON (voice over): European Commission President Ursula von der Leyen backtracked on the contentious border controls and patched up supply
problems with AstraZeneca. But even staunch supporters are frustrated.
ALEXANDER STUBB, FORMER FINNISH PRIME MINISTER: This smacked against all the basic principles of what the European Union stands for, not least
solidarity or free movement of goods.
So I hope this was the first and the last time the European Union reacted in such a, how would I say, nativist and protectionist way.
ROBERTSON (voice over): The former Finnish PM and E.U. political insider warns COVID-19 isn't just a health threat, it's a potential danger to
stability, too.
STUBB: This pandemic really is hybrid. It has an impact on politics, on economics, on health, on social affairs and international politics. And we
have to remember that we are really, really in this together. Vaccine nationalism, it doesn't get much more stupid than that.
ROBERTSON (voice over): In Northern Ireland, the past week, an abject lesson of COVID-19's corrosive reach --
HANNA: It's worrying that it is so quickly -- so soon in the E.U.-U.K. new relationship came to this and so soon in the rollout of vaccines that it
came, I suppose to a flashpoint.
ROBERTSON (voice over): This unlikely to be the last skirmish over sought after vaccines.
Nic Robertson, CNN, London
(END VIDEOTAPE)
QUEST: It recognizes, that it got it wrong. But -- and they've got more, and they are going to get more vaccine to distribute. Is it actually -- the
rollout once it gets to the countries, how is that going?
MELISSA BELL, CNN PARIS CORRESPONDENT: Well, for the time being, very slowly, Richard, and that's the problem. When you look at all that heat
generated by that row of the course of the last week, European Union really not being very subtle at all from the inspection of the site where the
AstraZeneca vaccines are reproduced in Belgium, to the publication of the contract with AstraZeneca to those export controls, Richard.
The E.U. has been anything but subtle, making very plain how keen it is to get its hands on those vaccines. And that's simply because of the pressure
that it is under. In some parts of the E.U., the vaccine rollout has either slowed or come to a standstill altogether, because there aren't enough
vaccines already of either the Pfizer or the Moderna ones.
And shortfalls in those have led to shortages in some countries. Hence, that very determined effort from the European Union to ensure that it was
putting as much pressure as it could on Big Pharma groups to get those vaccines close to the quantities that it hoped to get them.
QUEST: So how -- but there are other issues as well, aren't there, in terms of the efficiency of the vaccination process, the Netherlands, for example,
which had months to get the thing up and running and seemingly didn't manage to get its act together.
You've got Hungary, which, you know, even if it could get the vaccine has decided to create a fissure within the system by going for both the Russian
and the Chinese vaccine and that's questionable whether that's even legal.
BELL: You're quite right, Richard. There were many different problems in many different European countries in the beginning of the rollout here in
France. It is a question of organization, too much paperwork. Spain saw a shortage of nurses. You can't put it all down to the supplies.
But what's happened over the course of the last week is that it really is that supplies have run out in some parts. Here in France, appointments are
now being pushed back. In Germany, we're hearing there are going to be delays for the next 10 weeks. In some parts of Spain, they've stopped
vaccinating altogether because they don't have the vaccines.
And of course, the irony of all this is that, it was because the European Union wanted to fight back against vaccine nationalism that it insisted
that there should be some coordination, took a while to get up and going. But the idea is that there would be a cooperative and coordinated response
with a great deal of effort going into helping the poorest countries get their vaccines as well.
[15:25:00]
BELL: In the end, it is the European Union that has had to reinforce export controls, for instance, to look very carefully at how they were going to
get their own supplies. It is vaccine nationalism that's taken over at the end of all this.
So a much slower process than the European Union would have wanted. But clearly now, it is a question of vaccines lacking in many European
countries. And that is the result, of course of the fact that the European Union took so much longer than other countries in getting their contract
signed.
QUEST: Melissa -- Melissa Bell, good to see you, in Paris. Thank you.
To Brexit and the U.K. fishermen now where they are finding Brexit is most definitely not living up to the promises. Those in the fishing industry are
facing turmoil. They've got collapsing prices, copious paperwork, and seafood that rots when it reaches European shores too late.
CNN's Anna Stewart is at Peterhead, U.K.'s largest fishing port.
(BEGIN VIDEOTAPE)
ANNA STEWART, CNN REPORTER (voice over): This is Bob Teviotdale weekly haul.
BOB TEVIOTDALE, FISHERMAN: These have just come from Fort Myers off the coast this morning.
STEWART (voice over): A relief for the fourth generation fishermen who last week had to stay at home.
New export delays following Brexit are putting off his European customers.
TEVIOTDALE: Ninety percent of what we catch goes to these markets, so yes, it is absolutely corrupt when any expense incurred obviously with any link
in the chain, obviously, it comes back to us and this -- basically, the stuff is worthless.
STEWART (voice over): These brown crabs, lively now, risk arriving in Europe dead. A problem for exporters like AM Shellfish.
ALAIN MILLER, OWNER AM SHELLFISH LTD.: We are loading 24 hours earlier than normal now, just in order to get it before it got back for a lot of even.
STEWART (on camera): A lot of fishermen voted for Brexit. Do you think they regret that now?
MILLER: I never voted for it. But at the moment, it doesn't matter who voted for what. We are here and we have to get solutions to go forward.
STEWART (voice over): These fishermen won't benefit from catch quotas renegotiated in the post Brexit trade deal. Quotas don't apply to most
shellfish.
STEWART (on camera): Well, this is the very last brown crab load up into this lorry, ready to go to Europe. It is being quick work. They have
collected shellfish from individual fishermen and small businesses right across the area. For the next stop for these guys, it is going to take
longer.
STEWART (voice over): The log jam starts here.
UNIDENTIFIED MALE: No, no. So, then we've got to go into the catch certificates. So that's also another certificate.
STEWART (on camera): Okay, another certificate. The export certificate, the catch certificate.
UNIDENTIFIED MALE: Yes, and then you've got your health certificate, then we've got our delivery note on them. We've got commercial invoice, then
we've also got security documents and we've also got import entries from the French side as well.
STEWART: Before Brexit, what paperwork needed to be done? Just that.
UNIDENTIFIED MALE: Just how it normally --
STEWART (voice over): Staying up all night to do paperwork isn't the only problem. These documents cost nearly $5,000.00 a lorry.
UNIDENTIFIED MALE: We have issues, serious issues, and if they are not solved going forward, businesses won't be here. Plus the fact, live
shellfish, it doesn't wait. There is no sell by date on it. It is live or dead.
STEWART (voice over): For the haulier, arriving at customs is daunting.
PIP ANDREW, DRIVER, AM SHELLFISH, LTD.: Lots of customs cues that we are dealing with and getting away as it is, due to the paperwork. And then it
depends how long they hold you.
STEWART (on camera): Pip, do you think it's going to get better or is it going to get worse?
ANDREW: You know there's going to be problems before we even get there.
STEWART (voice over): The U.K. government has announced a $30 million compensation package for fishing businesses impacted by Brexit, short term
relief. But Miller says, it's not enough to stem the carnage.
The survival of shellfish hangs in the balance, as does the future of fishing communities in the U.K.
Anna Stewart, CNN, Peterhead, Scotland.
(END VIDEOTAPE)
QUEST: You know, whenever I see reports like that, it sort of brings it home what we talked about on the rest of the program, GameStop and Brexit,
stimulus, this, that and the other. And then you think of the fishermen up in Peterhead or in Scotland or wherever it might be, Eastern Canada, and
you start to realize that's really what this is all about. That's just interesting.
Coming up, testing the waters for compromises, President Biden and the Republican senators discuss COVID relief. They're looking for a bar to see
if bipartisan agreement can be reached. In a moment.
(COMMERCIAL BREAK)
[15:30:00]
QUEST: And I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment.
Joe Biden faces the first major legislative test of his presidency. As a result he's meeting with Republicans who are looking for a slimmed-down
COVID relief package cheaper than his $1.9 trillion.
Brazil's foreign minister tells me the pandemic is under control in his country. Others don't agree. Thousands of people protesting the
government's handling of the crisis.
All of that is still to come.
Before, however, this is CNN and here on this network the facts and the news will always come first.
President Biden says the U.S. is considering sanctions against Myanmar after the military seized power in a coup and detained the country's
democratically elected leaders in early morning raids including Aung San Suu Kyi claiming -- (inaudible) who claims election fraud.
A massive winter storm is slamming the northeastern United States threatening more than half a meter of snow in New York City and elsewhere.
These are pictures of New York at the moment, live camera shots.
A mixture of heavy snow, strong winds and coastal flooding is making travel dangerous in much of the region and widespread power outages are expected.
Donald Trump has announced a new legal defense team only days before his senate impeachment trial. The attorneys, David Schoen and Bruce Castor,
will now represent Mr. Trump.
Over the weekend, the former president suddenly lost his team. Five lawyers walked away, reportedly because the former president wanted them to focus
on his baseless claims of electoral fraud.
Prince Harry has settled a legal dispute with the U.K. tabloid "The Daily Mail." He's accepted what his attorneys are calling significant damages.
The dispute centers on an article alleging the prince turned his back on the Royal Marines.
The Duke's requested any damages received go to the Invictus Game Foundation, a charity he funded in support of wounded veterans.
The American actor, Dustin Diamond, has died at the age of 44. Diamond is best known for playing Screech on the hit '90s sitcom "Saved by the Bell"
and had been undergoing treatment for lung cancer.
A key test to whether there can be any agreement across the political aisle is to play out in Washington any time now.
Ten Republican senators are likely or expected to visit the White House where they'll negotiate a COVID relief package.
Now on Sunday they unveiled a stripped down counter-proposal to the White House plan. The biggest difference is the price.
The cost of the Republican program is around $600 billion, roughly a third of President Biden's package.
[15:35:00]
The senator wants to achieve that through a lower cap on who's eligible for new stimulus checks, the checks themselves will also be smaller and they
want to scrap the $15 per hour federal minimum wage plan.
The White House press secretary has warned don't expect a deal today.
(BEGIN VIDEO CLIP)
JEN PSAKI, WHITE HOUSE PRESS SECRETARY: It's an exchange of ideas, an opportunity to do that. This group obviously sent a letter with some
outlines, some tough lines of their concerns and their priorities. And he's happy to have a conversation with them.
What this meeting is not is a forum for the president to make or accept an offer.
(END VIDEO CLIP)
QUEST: Our chief White House correspondent, Kaitlan Collins, is with me from the White House.
Kaitlan, it remind me of the old joke it doesn't matter what's right or wrong, all we're negotiating is the price. That's basically where we are
now.
KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: They certainly are negotiating the price. Because what these Republicans have counter-offered
here is a far cry from what President Biden has laid out. And that really has to do with the numbers themselves.
So $1.9 trillion to the $618 billion it is that Republicans have put forward. And the White House there when they were saying do not expect a
deal to come out of this Oval Office sit-down highlighted just how far apart the numbers are.
But, as you mentioned, it's not just the big numbers and the overall price tag, it's also what's in these actual packages.
Because yes, Biden is pushing for that $15 federal minimum wage. That is not included in the Republican counter-proposal but the targeted stimulus
checks could be something that maybe the White House would be willing to move on. They've basically sensed that so far, they've put that out there.
Because what we've heard -- even complaints from centrist Democrats --
QUEST: Right.
COLLINS: -- that those checks are too widely available to too people making too much money who they don't think are affected enough to be included in
this proposal, in this consideration of another round of coronavirus relief.
QUEST: Right.
COLLINS: So we're waiting to see what comes out of this meeting but I would not expect a deal. But it is notable that he's invited a group of
Republicans to the White House as his first group of lawmakers into the Oval Office on week two of his first -- or his second full week, I should
say, in office.
QUEST: What is fascinating about this is last week or the week before last the president talking at his press conference about negotiating with
congress said you don't make your first offer immediately, I've been doing this for decades. I know exactly what I'm doing.
Unlike the last president, he really does know his way around congressional negotiations.
COLLINS: Yes, that's a great point. Because that was what Trump came into office touting, that he was a business deal maker and he'd be able to cut
deals with Democrats. Of course, that very rarely if ever happened with Democrats in the Trump White House. So we're seeing if Biden is going to do
that.
Because he made a similar promise just in a different way saying he could cut deals with Republicans, talking of the sense of unity, the sense of
bipartisanship. And so the question is whether that's actually going to happen here.
Because Biden has gone further than some of the officials talking about the willingness to compromise --
QUEST: Right.
COLLINS: -- saying, as you noted, that that first deal is probably not going to be what the final result actually looks like. But the question is,
what he's going to do compared to what Democrats on The Hill are doing.
Because they seem to be starting to move forward with this process where they would be going it alone with no Republican support on this package
right now.
QUEST: And without enmeshing us into the weeds of reconciliation and filibusters and 60 votes and things like that which is making my mind spin
-- it makes the financial markets look easy -- but Kaitlan, what's your gut feeling? How long do you think before we will see something that might make
it?
COLLINS: It seems like Democrats are moving forward. The first part of this before getting into the details if they do move forward with the
reconciliation where they would not need Republicans is a budget proposal. We are told they're working on that on The Hill right now.
So I think it's the timing here. Because, of course, they do have a tight timeframe for when the jobless benefits start to run out starting in March.
So that's what the White House is looking at, is for a timeline with this whole negotiating period. They won't say as much publicly but that is what
they're actually looking like.
And so it's still to be determined how this is going to go. But right now, Republicans are just not onboard with this despite these repeated calls for
bipartisanship and for a bipartisan bill.
QUEST: Kaitlan, thank you. Good to have you with us this evening. Kaitlan Collins at the White House.
In a moment, making bus travel in East Africa easier and more efficient. How an app is changing the way people search, compare, and then book their
tickets.
In a moment.
(COMMERCIAL BREAK)
[15:40:00]
QUEST: Bus travel in East Africa's being transformed by an app called Ugabus. It is designed to make it easier for travelers to book a ticket and
for companies to fill their seats.
Eleni Giokos reports as we "Connect Africa."
RONALD HAKIZA, CO-FOUNDER, UGABUS: Every morning I wake up I tell myself I have to offer that extra stip (ph). I have to put in place an extra
infrastructure, an extra idea. So what pushes me every day is the need to make people's lives better.
ELENI GIOKOS, CNN REPORTER: The idea for a more reliable and convenient ways to book buses came to Ronald Hakiza after falling prey to fake ticket
sellers as he traveled across East Africa.
HAKIZA: In total, I've been to 207 towns in East Africa. And from whole process, I looked at how I struggled to buy tickets in those different
towns. And I said to myself, really, in this era? Something should change.
So I love the fact that I'm offering a solution and so many people are using it.
GIOKOS: Ugabus launched in 2015 to enable travelers in East Africa to search, compare, and book a bus ticket in under three minutes.
Christine Kabazira lives and works in Uganda's capital, Kampala and is one of 12,000 of the app subscribers.
CHRISTINE KABAZIRA, UGABUS SUBSCRIBER: I think it's is the very first of its kind in Uganda and East Africa so this was a very good initiative.
Because the hassle that comes with booking buses, going to the bus and the crowds, especially now in the COVID times.
The fact that you don't have to touch money. And when you confirm payment they send you an SMS on your phone and they will just take you straight to
your seat.
GIOKOS: A perk to the app is discounted tickets, often cheaper tickets than you can buy at the bus stations.
But despite this, Link bus services based in Kampala credit Ugabus with providing up to 1,000 extra daily passengers since joining the app a year
ago.
HAKIZA: We're building a bus eco-system, something that brings together the entire bus online digitally. That when you look at the bus, right from
luggage to percent of travel, to ticketing, experiences; everything should come online.
GIOKOS (Voice Over): Right now, passengers are able to book over 200 routes across five countries in East Africa; Uganda, South Sudan, Kenya, Rwanda,
and Tanzania with Zambia being targeted next.
Eleni Giokos for "Connecting Africa" in Kampala, Uganda.
(END VIDEOTAPE)
QUEST: Now there's growing discontent in Brazil over the government's response to the pandemic.
The Brazilian foreign minister, next.
(COMMERCIAL BREAK)
QUEST: More protests this weekend in Brazil as COVID continues to ravage the country.
Now Brazil has the second highest number of COVID deaths in the world and it has only administered a million doses of the vaccine. The population
there is 211 million -- you get the idea.
When I spoke to the foreign minister last week he told me the situation was, in his words, "under control."
(BEGIN VIDEO CLIP)
ERNESTO ARAUJO, BRAZILIAN FOREIGN MINISTER: The vaccine roll out is low but basically I think the same, I think the same speed as in many countries in
Europe, North America.
We have already vaccinated 700,000 people. This makes Brazil today maybe the sixth country with the largest number of vaccinated people and we just
started one week ago. So -- and logistics is very good. So we are not very much concerned with that aspect, right?
What we are -- there is a specific outbreak in Manaus in the north of Brazil which required more oxygen than normally, this is being dealt with a
specific way, in a very specific way.
But overall, the situation of the COVID is under control. Of course, lots of cases, it's a large country, large population. But also lots of people
are cured of COVID. We are --
QUEST: Hang on, hang on. Minister, minister --
ARAUJO: Yes.
QUEST: The international organizations don't agree that it is under control. Those who are -- observed it say either the reporting has been
less than accurate or the testing is not as widespread as it should be.
ARAUJO: Yes. No, it's under control in the sense that the health system is doing fine, people have beds in hospitals. The vaccines are arriving,
people are being vaccinated in a rhythm that is basically the one of most large countries or most countries overall.
And -- well, the situation is like that. I mean, it's serious like elsewhere.
But Brazil has been the country with the fourth or fifth largest number of deaths per million, now we are about 23 or 24 in terms of deaths per
million. Of course --
QUEST: Right.
ARAUJO: -- each death is a tragedy. But we have improved a lot.
[15:50:00]
QUEST: The CNN journalists we've had there and have there currently paint a very different picture to the one that you've just painted.
And that there is nowhere near the amount of testing or vaccinations across the country. And even allowing for the region in Manaus that's having
problems, this is far more widespread.
And I put it to you that you're putting a rosy picture on what is a very bad situation.
ARAUJO: Of course, it's not rosy, of course we treat it very seriously. But it's not as dark as has been painted in many cases. There are some regions
which have less serious outbursts, others more serious especially Manaus.
But as I told you, we have this universal health care system which is holding fine against all this amount of challenge.
And vaccination is underway. As I told you, we have already maybe almost two percent of people going to be vaccinated over the last few -- the next
few days, which is basically more than many European countries which have started before.
So, of course, we would like this to be faster but I think every country would like this to be faster. So this is basically what's happening.
(END VIDEOTAPE)
QUEST: That's Brazil's foreign minister talking to me last week.
Exactly eight months from today, Expo 2020 opens in Dubai. More than 190 countries will be represented. Small and medium-sized enterprises, SMEs,
stand to benefit from the exposure.
CNN's John Defterios has a closer look at one company using a regional ingredient.
(BEGIN VIDEOTAPE)
STEVI LOMAS, CFO, THE CAMEL SOAP FACTORY: (Inaudible) to do you a basket like this.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Seven years ago Stevi Lomas saw a gap in the multi-billion dollar global soap market. She developed a
hand-crafted product with a key ingredient from the Middle East, camel milk.
Using locally sourced natural ingredients, the milk is mixed with oils, placed in molds, dried and manually cut into bars.
LOMAS: The camel milk in the soap is really, really gentle on the skin. So it's really good for people with skin complaints or people who are
sensitive to detergents and detergent products.
DEFTERIOS: Her products which she makes in a factory on the outskirts of Dubai relies largely on the tourist market. But they've been hit hard by
the COVID pandemic.
Now thanks to Expo 2020, her camel soap factory has been given a chance at global exposure as her Expo brand of soaps have received a license to be
sold during the six-month event.
LOMAS: We're hoping for up to 30 percent to 40 percent of our revenue will be generated by Expo.
We're hoping to create a brand that actually represents the middle east both in terms of the ingredients that we use but also the kind of products
that we're developing and making.
So for me, Expo is all about helping build that brand recognition.
DEFTERIOS: The Camel Soap Factory is among 46,000 small and medium-sized enterprises that have applied to be part of Expo 2020.
The event, which is expected to attract millions of visitors, has pledged to spend a fifth of its budget on SMEs. And has already provided more than
$1 billion in aiding the sector so far.
KHALID SHARAF, DIRECTOR, EXPOSURE BUSINESS PROGRAM: There are a lot of opportunities that are going to come from investments to partnerships to
networking. So we're creating and developing a lot of these programs and activities to make sure that businesses, SMEs, start ups, come at the right
time and meet the right people.
DEFTERIOS: For the likes of The Camel Soap Factory it is a potential lifeline as it emerges later this year into what is hoped is a post-
pandemic world.
John Defterios, CNN, Dubai.
(END VIDEOTAPE)
QUEST: I'll have a bar of that. Not sure what (inaudible) do with it.
Now the last few minutes of trade on Wall Street. There we -- let's look at the Dow.
So the Dow's given back quite -- still up nearly, we were up over 1.1 percent.
But the one I want you to focus on is the Nasdaq. Look at that. Because that is -- we started about two and-a-half percent up. That's actually put
on weight, whereas the Dow has given back a bit. Which is not surprising these -- it's over 30,000, the Dow.
But it is the Nasdaq and the S&P. It's been strong all day. It's big tech that's doing it.
[15:55:00]
Why today? Well, we've had a very difficult week last week but now we're seeing vaccines again seeming to push the agenda forward.
You're looking at more working from home. You're looking at markets feeling that the money's still going in.
Take the whole thing, put it all together and you end up with a market that thought this maybe -- the last couple trading sessions last week were
overdone.
I do not think today had much to do with, frankly, Retail versus Wall Street. I think we're looking at fundamentals again and a market feeling
that last week was overdone.
And we'll have a "Profitable Moment" which will be from the snow of New York where it's pretty horrible.
How did I get here today to be with you? You'll find out after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment" from a snowy 20-block walk on the way to the office.
I don't know we're surprised by the winter snow. It is, after all, the first of February and in the northeast of the U.S., you do get lots of snow
at this time of the year.
That said, we can draw an analogy with what's happening in the markets. I'm not surprised that day traders or other traders have found a way, a new
way, to make the most of the market.
It doesn't matter whether it is GameStop or AMC or today silver. It'll be something else tomorrow.
But don't for a moment think that the professional investors will just sit and wait it out. They may wait but they'll have new trading strategies
designed to fight back or perhaps just as likely co-opt those retail investors without them necessarily realizing it.
The professional investors are well aware of what's happening. They've lost round one. They will not do it again in two, three, and four.
Oy, that biting wind. Quite the way the markets can be during this turbulent time.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in the blizzard of New York.
Whatever you're up to in the hours ahead, hope it's profitable. And I'll see you tomorrow.
JAKE TAPPER, CNN HOST: Welcome to THE LEAD. I'm Jake Tapper.
END
