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Quest Means Business
Pfizer Shares Soar On Promising Test Result For COVID Pill; Europe Braces For Winter COVID Surge; Strong U.S. Jobs Numbers As Biden Presses For Spending Vote; Groups In Ethiopia Join Forces Against Government; Former U.S. Diplomat Colin Powell Honored At Funeral; NFL Star Rodgers Confirms He Is Unvaccinated Against COVID. Aired 3-4p ET
Aired November 05, 2021 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:00]
RICHARD QUEST, CNN BUSINESS ANCHOR: And so an hour to go before the closing bell and U.S. markets are at all-time high in a wave of positive
news. The way the market, it is up 209 points. There are all sorts of reasons why this is happening.
The markets as they stand and the main events. One of the reasons the market is up. Pfizer's chief executive is calling it a great day for
humanity. Pfizer's new COVID treatment shows impressive results in tests.
President Biden celebrating a good solid set of job numbers, a vote on infrastructure as you've just been hearing could be the icing on the cake.
And castigating COP 26. Greta Thunberg says the Summit is already a failure.
Together, we are live from New York. It is the 5th of November, Bonfire Night if you're in the U.K. If you're not, well, for the rest of us, I am
Richard Quest and I mean business.
Good evening. It is the end of the pandemic as we know it says the Pfizer Board member following the drug maker announcing test results of a new pill
that it says is highly effective at treating COVID 19. Pfizer shares have been up by as much as 11 percent, they are now up by eight percent. The
pill according to Pfizer, if authorized, could be taken at home before a patient needs to go to a hospital.
Merck has received approval in the United Kingdom for a similar antiviral, it is seeking emergency use authorization, EUA in the U.S. The U.S.
President says the U.S. has already secured doses of the Pfizer drug.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: Last night, we received promising news about another potent and potential COVID treatment, a pill -
- a pill developed by Pfizer that may dramatically reduce the risk of being hospitalized or dying when taken shortly after infection, if you're
infected.
If authorized by the F.D.A., we may soon have pills and may treat the virus of those who become infected.
(END VIDEO CLIP)
QUEST: Pfizer's Chief Executive told us this morning that the pill is a game changer.
(BEGIN VIDEO CLIP)
ALBERT BOURLA, CEO, PFIZER: I think it is a great day for humanity. In fact, the very news are coming a year almost to the day after we announced
another breakthrough. On November 9th last year, we announced the COVID-19 vaccine and today, we are announcing a pill that treats those
unfortunately, when they get the disease. It is significant. That means that instead of having among this group of people, 10 going to hospital,
only one will go; and likely, very few, if anyone die.
So the introduction of this pill will save millions and millions of lives.
JOHN BERMAN, CNN ANCHOR: Where does this fit in the battle against COVID? Obviously, you still want people to get vaccinated. People need to get
vaccinated, vaccinations are hugely important. But what does this pill then do help -- what does it do to help change the pandemic?
BOURLA: There are no words that I can use to emphasize how important is the use of vaccines without being current with our vaccination, including
the booster, vaccinating all the ages, we will never be able to get rid of this virus.
But of course, vaccines are not effective 100 percent, and not everybody are getting the vaccines. So, this is why we are having this unfortunate
situation that our ICUs in hospitals is overcrowded by unfortunate people that they are getting the COVID.
Now, we have a solution program and this is exactly what it feels. This is not to prevent, at this stage, COVID. This is to treat those that
unfortunately got the disease.
BERMAN: Yes, once you get it, this can really help you.
BOURLA: Exactly.
BERMAN: Adverse effects. Your news release on this, which I had a chance to read through quickly did note there were some adverse effects for some
people who took it. What were they?
BOURLA: In fact, that's the amazing thing. The people who took the medicine had way less adverse events than the people that took the placebo.
In fact, in terms of serious adverse events, we have the 1.7 percent of the people that took the medicine had these events compared to six percent of
people that they took the placebo.
So, the adverse events are clearly caused also because there is a disease, right?
BERMAN: What were the adverse events, just so we understand it?
BOURLA: What you expect to have from COVID. So the high fevers, high headaches, diarrhea -- things that are affecting you because of COVID, but
as I said it was way less with the treatment with the placebo.
BERMAN: When do you think this can get approved?
BOURLA: This is something -- the F.D.A.'s responsibility, so E.M.A. in terms of European authorities, but I can't talk about that. What I can say
is that we plan to submit as soon as possible, hopefully, hopefully, we will submit before Thanksgiving.
(END VIDEO CLIP)
QUEST: Before Thanksgiving. Now, news from a pill, Pfizer is causing a divergence in pandemic stocks. If you look at what we might call the travel
and tourism stocks, they are up very sharply. Expedia, 14 percent. All the major airlines -- you're just looking at there -- and Airbnb up 12 percent.
So this is extremely good news for the travel sector.
Pfizer's rival in the race to find cures and vaccines are going in the other way. Moderna was absolutely being creamed, down nearly 20 percent.
Merck off, even though it has a pill of its own.
Paul La Monica is with me. Why should this be -- because I understand the significance of the pill, but eventually these other companies like
Moderna, like Merck, have one of their own. So what's this divergence about?
[15:05:08]
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think, Richard, when you look at what's happening with Merck, it seems as if investors are at least
right now, the knee jerk reaction is maybe betting that Pfizer has a potentially better chance of getting their pill approved by the F.D.A. more
quickly and getting it out to more people, which would further boost revenue and profit for Pfizer, which is already getting a big boost from
the COVID vaccine.
Moderna, because of some of the supply chain issues they've had, they risk falling further behind Pfizer and BioNTech with regards to the vaccine. And
the problem from Moderna is that they are really still an experimental biotech. They hit it big with the vaccine, but there is no indication that
they're also working on a pill the way that Pfizer had.
What I am a little curious to see is that BioNTech, which will report earnings next week, they're getting hit pretty hard as well. And yes, you
could argue that maybe people won't use the Pfizer-BioNTech vaccine as much if there is a pill also, but I think as, you know, the CEO of Pfizer
pointed out, clearly it helps to get vaccinated and then take the pill if you do wind up still getting COVID-19. The pill is not as preventative as a
vaccine is.
QUEST: Travel stocks are rallying and they are extremely sensitive to COVID, any form of COVID news and COVID development. Is this rally on the
back of the pill?
LA MONICA: Part of it, I mean, Expedia and Airbnb, which you both -- which you mentioned, both of them reported solid results after the close
yesterday. So that's helping them as well. Also, Uber, which despite getting hit by its investment in China's DiDi, they are rallying, too. And
Lyft had solid results over in the week.
You look at these airline stocks, of course, they are going to get a boost. We've seen a kind of parabolic crazy move in the shares of Avis Budget
earlier in the week as well. So rental car agencies like them and Hertz emerging from bankruptcy, they obviously get a boost as well.
This is definitely good news for people that think they can go back out and travel and resume with somewhat normal life again.
QUEST: Paul, is it -- is it risky to try to anticipate and invest on the COVID-related stocks one way or the other? Whether it be the vaccines, the
farmers, the travel stocks?
LA MONICA: Yes. Without question there is always an element of risk in investing and I think what you're seeing right now is this enthusiasm, this
euphoria that the pandemic could be coming to an end or maybe shifting to more of an endemic as opposed to a pandemic.
But make no mistake, you look at other stay-at-home stocks and they're getting hit pretty hard as well. Today, it's Zoom is down, Teladoc is down.
You're seeing definitely people are getting a sense that those companies that benefited from all of us being sheltering in place, those best days
might be behind them. Peloton as well.
QUEST: I was just about to say, Peloton. I mean, why is it being crushed 35 percent? I mean, when I see that sort of number, I think there's an
arbitrage going on or that it's a case of, you know, the retail investors are beating it up. What's your understanding of Peloton of 35 percent?
LA MONICA: Yes. I think it's probably the latter. I think you have a lot of individual investors that are fleeing the name now and to some extent,
maybe it's overdone, but it does make sense. You look at a company like Planet Fitness which operates gyms, they had really solid earnings earlier
in the week. People are definitely coming to this realization that, I don't need to work out in my basement all by myself and have someone yelling "Go
Peloton" at me when I can go to a gym and feel safe.
QUEST: I love the thought of you in your basement working out with somebody shouting "Go Peloton." I'll pay good money for that picture, Paul
La Monica. Good to see you, sir. Have a lovely weekend.
The U.S. markets seem to be anticipating a possible end to the pandemic. Case numbers in Europe remind us though that the virus is still a very real
threat. The W.H.O. says the rate of transmission now in Europe is a grave concern. Germany has reported more than 37,000 new infections today, it is
the largest number since the pandemic began.
Of course, the implications are why and how serious. The Health Minister there blames the surge on a flagging vaccination rate. Our correspondent,
Fred Pleitgen reports. It's a problem -- a German problem that is shared by other nations.
(BEGIN VIDEOTAPE)
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): Europe fully in the grip of another surge of COVID-19 as new cases and new
hospitalization spiral leading to a dire warning from the World Health Organization.
[15:10:06]
HANS KLUGE, W.H.O. REGIONAL DIRECTOR FOR EUROPE: We could see another half a million COVID-19 deaths in Europe and Central Asia by the first of
February next year.
PLEITGEN (voice over): Five hundred thousand lives on the line as the continent is again declared the epicenter of the pandemic.
Europe has registered more than a 55 percent rise in new COVID-19 cases in the last four weeks alone, with the region now home to more reported
infections than Southeast Asia, the Eastern Mediterranean, Western Pacific, and Africa combined the W.H.O. says.
The continent's largest economy, Germany, the latest country to break records for daily infections reporting over 37,000 new cases in 24 hours.
New records for daily infections were also seen in Greece, Slovakia, Croatia, and Slovenia this week serving as a dire warning for the rest of
the world.
DR. MICHAEL RYAN, EXECUTIVE DIRECTOR, W.H.O. HEALTH EMERGENCIES PROGRAMME: We only have to look at the roller coaster epidemiologic curve to know that
when you're coming down the mountain, you're usually about to go back up another one, and the fact that Europe is climbing that mountain again,
should really stand everybody up around the world and say, what are we going to do?
PLEITGEN (voice over): The biggest threat facing the region, uneven vaccine uptake, the W.H.O. says despite administering over one billion
doses, immunization rates differ dramatically between some Western European states and their former communist bloc neighbors to the east where the
W.H.O. says a lack of trust is fueling vaccine hesitancy.
In Bulgaria, Romania, and in Ukraine, hospitalizations and deaths are surging, but the percentage of the population fully vaccinated remains
stubbornly low. The World Health Organization is again calling on wealthier countries to share vaccine supplies. But some European countries are trying
to vaccinate their way out of this latest surge, with Greece and Germany announcing they will make booster shots available to their entire
populations.
JENS SPAHN, GERMAN HEALTH MINISTER (through translator): Booster shots after six months should become the norm, not the exception.
PLEITGEN (voice over): Bracing for a long winter, 23 countries in Europe and Central Asia have now tightened restrictions in the past two weeks. But
as colder weather descends and hospital beds fill up, Europe's leaders fear tough months lie ahead.
Fred Pleitgen, CNN, Berlin.
(END VIDEOTAPE)
QUEST: To the economics of the United States, job numbers that were impressive, but we need to put it into perspective to the Fed's decision,
of course, on tapering. We'll do that after the break.
It's QUEST MEANS BUSINESS, the end of a long week, but it is Friday and we are here.
(COMMERCIAL BREAK)
[15:15:28]
QUEST: The strong U.S. job numbers haven't helped President Biden get his spending bills over the finish line. Some of his fellow Democrats have held
up the vote, asking for a cost estimate on the $2 trillion Build Back Better bill. The President has argued passing a spending bill would ensure
Americans fully felt the recovery.
Meanwhile, the U.S. economy added 531,000 jobs in October, which was higher than expectations for the first time since July and brought unemployment
down to 4.6 percent.
The summer looked better than initially reported. August and September, there were nice revisions on there, up by nearly a quarter of a million
jobs combined. The President used these numbers to push his legislative agenda, saying an infrastructure bill and his spending plan was the most
important thing after beating COVID for the Americans to feel recovery.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: The second way to make sure recovery is fully felt is to pass our bipartisan -- my bipartisan
infrastructure agreement and my Build Back Better plan, which are being debated now. And I'm going to be heading over there quickly, shortly after
I do this press conference, back to my office to make some calls.
I want to say very clearly, if your number one issue is the cost of living, the number one priority should be seeing Congress pass these bills.
(END VIDEO CLIP)
QUEST: John Harwood is in Washington. John, so the House without taking us into the weeds, the House is going to do something which basically is on
the infrastructure, but then that's a vote about a vote, which may have a vote. In other words, it's not going to happen tonight.
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: It's a frustrating day for the White House. But they are going to, if they proceed with this plan, and
if enough progressives agree to vote for the infrastructure bill that it would pass, they are going to separate the infrastructure bill from the
Build Back Better bill.
President Biden, House Speaker Pelosi, Majority Leader in the Senate Chuck Schumer had been pushing to move them in tandem, because that was the way
to hold their coalition together. The progressives in the House who represented a large chunk of the mainstream Democratic thought have been
insisting on that. But with majorities this narrow in the Congress, any single Democratic senator can be king, and any group of four Democratic
House Members can be king, because if they withhold their support, they can prevent something from passing.
But it looks like they're going to pass that infrastructure bill to at least give President Biden something today. We'll see if they can get the
votes to do that.
QUEST: Joe Manchin said that the failure in Virginia and in others, he said it was because it was evidence voters didn't want the U.S. under the
President to go so far and so fast. He said it was a vindication if you like, of his opposition to the plans.
Others say it's disunity that's caused the problem. But at the end of the day, voters are looking and seeing a party in power that can't get its act
together.
HARWOOD: That's right. And you know, the reality is that people on all sides of the political spectrum make up reasons to explain what happened in
elections that tend to fit what they think their own agenda is. The biggest influence on the results in New Jersey and Virginia was the fact that COVID
is still with us. That has dragged down President Biden's approval ratings. It has had knock on effects on the economy, supply chain, inflation, held
down job growth and growth in the third quarter.
Now as the pandemic recedes, that is beginning to turn around and what President Biden was trying to do, as you noted, was use -- surf on that
momentum for the good jobs report today.
QUEST: Right, but John --
HARWOOD: Yes.
QUEST: John, on this point, you've been watching politics in in Washington for a year or two, let us be -- let's be delicate. In your view, are the
Democrats in trouble because of what the people are seeing?
HARWOOD: Well, it doesn't help and that has contributed to the impression that the government is feckless against the problems that most people face.
And again, what you have is a country this polarized a Congress that split almost down the middle and only one party is attempting to move an agenda.
If you're split down the middle, that means you have to have unanimity in your party, not just most of the Democratic members.
[15:20:12]
QUEST: Remember, when President Bill Clinton passed his economic plan or when President Obama passed his healthcare plan, there were Democratic
members who voted against it in the House. You needed all the votes you could get in the Senate, but the challenge is that, in this circumstance,
the margins are just so, so close and with margins that narrow, you've got to get everybody on board.
It's very hard to do when you talk about a big, ambitious piece of legislation. A lot of people's careers are on the line, and more people
within the Democratic Party are nervous now, because of the election results and because of what they see coming in the 2022 midterm elections.
QUEST: We are glad you're there, sir. Thank you.
HARWOOD: You bet.
QUEST: Over the weeks and months ahead, we'll be talking more. Thank you.
Now the jobs numbers are on an upswing, but remember, mind the gap, there's still 1.7 million more unemployed Americans now than there were in February
before the pandemic. The rate is 1.1 percent higher than it was then, and the hardest hit sector saw the most gains.
Leisure and hospitality obviously, they're coming back, they led the way. But even so, one and a half million fewer jobs than in February last year,
and the manufacturing rounded out the top three for job growth.
Julia Coronado is founder and President of MacroPolicy Perspectives, and joins me now.
Okay, take this number. Take this number, and now, bearing in mind the Fed had a really good idea what was coming down the road on this and others,
does their decision on tapering make sense? Or should they have done more?
JULIA CORONADO, FOUNDER AND PRESIDENT, MACROPOLICY PERSPECTIVES: Should they have done more in terms of going faster on tapering?
QUEST: Yes.
CORONADO: No, they should not have done more. This is a sign that the job market is coming back. This was their expectation. We lost some momentum.
We still have a ways to go.
They do think we can recoup not just the jobs, you know, not just the unemployed people who are actively looking for work, but a lot of the
people that have left the labor force, haven't seen that yet, but that tends to lag, the decline in the unemployment rate.
So we still have several miles to travel here, Richard, and the Fed, meanwhile, is steadily gradually taking away that support. And by mid-June
next year, we should have a much better picture of what the post-pandemic labor market in economy looks like.
QUEST: Okay, so when's lift off in your view? I know you've got to get tapering down and I know there's got to be no longer reinvestment of
existing run off of securities. But in your view, when does lift off happen.
CORONADO: So we still have lift off penciled for the first half of 2023. We think that a lot of these supply-- you know, we're about to go through a
bout of intense the supply chain and energy inflation in the winter months, then we think it will subside.
And that again, the labor market will be humming along. Keep in mind that we've been surfing this epic fiscal support package that is slowly
gradually fading. Consumers still have a lot of cash in their accounts, but it is going to slowly gradually fade. Consumers will be -- growth is going
to slow. We do expect a good transition because the labor market is really strong, but we're not going to be growing at the rate that we've been
growing this year. And that should even some of these supply changes.
QUEST: But hang on, I've always -- people like you told me time and again, that by the time inflation is there, you're in trouble and it is usually
too late to do anything about it.
Now, these transitory elements of it, as a result of supply chain. Look, to give you an example, my next guest will be the Norwegian Governor of the
Bank of Norway. Now, they've already raised rates. The Bank of England took everybody by surprise by not raising rates. The debate in the E.C.B. is,
should they raise rates -- even though President Lagarde is fighting a rearguard action?
Isn't the Fed in danger of being behind the curve?
CORONADO: No. And I think in fact, I think that the Fed is very intentionally being behind other Central Banks. We've been through cycles
where the Fed has tried to be the front line of tightening and things don't go so well.
The Fed is the keeper of the global reserve currency. They are moving in the same direction as other Central Banks in terms of removing some of the
accommodation is the right direction to go in, but if the Fed -- the best practice for the global economy is for the Fed to go steadily and
methodically, other smaller open economies like Norway, like England, they face a lot more pressures through their currency and they might have to be
more nimble and respond.
The Fed and the U.S. are -- you know, have the luxury of being able to move steadily and slowly. And in fact, it's best for everybody else, too.
[15:25:36]
So I think it's an intentional and deliberate decision to be behind other Central Banks in terms of the tightening push.
QUEST: So when we look at markets, for example, we'll probably end up at a record. I mean, there would be records all over the place, and how do you -
- and I realize there is a perversion in the relationship frequently between markets and the real economy, and we often see this blown out, and
perhaps we're seeing it at the moment.
But how do you square that circle with economies that are -- the U.S. economy that is not fully back on its feet with markets that are absolutely
enjoying the fruits of easy money?
CORONADO: Well, let me just say that this is one time when actually markets are a good barometer of the real economy. We spend so much time
talking about inflation without talking about the fact that this is demand driven inflation in addition to the supply chain bottlenecks, this is first
and foremost, a strong recovery.
The U.S. grew six and a half percent in the first half of the year. The jobs are coming back faster than any of the last three labor market
recoveries.
You know, this is a profit -- profits are breaking records, Richard. Profitability is high even despite rising labor costs.
The rising tide is lifting all boats, and what is the key to all of this? Productivity.
Companies -- COVID served as a catalyst forcing companies to adopt a lot of business transformation projects, doing things better, more efficiently. So
productivity numbers look really good. The stock market has every reason to be happy.
Earnings numbers have been strong across many industries. So, will it stay that way is the bigger question, will companies still be able to navigate
through the supply chain issues, solve those problems, sell those products? Will they be able to find the efficiencies to lower their labor input given
rising labor costs? So far, a lot of really impressive gains have been made on that front.
So I think in this case, actually, maybe we have the narrative wrong fretting and wringing our hands about all of the bottleneck inflation, when
in fact, the real economy has performed impressively well.
QUEST: We need to talk more about that in the future, Julia. You raise a very good point that I hadn't fully factored in on this moment. The
productivity gains as a result of COVID, changes of working will only now start to become evident.
It's something we need to explore again with you, Julia. I'm grateful to you. Thank you.
I said about the Central Bank's raising rates in Norway. It is the Western country to first raise rates since the pandemic started. The Central Banks
are pulling back from pandemic stimulus. The Governor of Norway's Central Bank, who incidentally says the balance of risks, the policy rate will most
likely be raised further in December. Interesting.
He'll be with us after the break.
(COMMERCIAL BREAK)
[15:30:00]
QUEST: I'm Richard Quest. Continuing to you a lot more QUEST MEANS BUSINESS. As we continue this Friday, big policy announcements from the Fed
and the BOE. The governor of Norway's central bank and his plans for further tightening he's already said it's likely in December.
And Prince Max of Liechtenstein is with me, explaining how his company plans to ditch coal power forever. We will get to those after I've updated
you with the news because this is CNN and on this network the news always comes first.
Nine groups opposing the Ethiopian government have formed a new alliance today. Rebel fighters are advancing towards Addis Ababa other and that's
raising concerns of the Capitol could fall. U.S. Embeassy is urging Americans to leave Ethiopia as soon as possible.
Funeral services have been held today for the former U.S. Secretary of State Colin Powell. President Biden attended the Service in Washington, as
did former Presidents Barack Obama and George W. Bush. Powell was remembered for his trailblazing career as a diplomat and general. He died
last month for complications from COVID.
An American football star confirms he is unvaccinated against COVID-19 days after he tested positive. Forcing him to miss this week's game. Aaron
Rodgers of the Green Bay Packers says he's allergic to an ingredient in some vaccines and nervous about side effects from others. Roger says he has
followed NFL protocols for unvaccinated players.
Strong October numbers suggest the U.S. economy is in full swing, or at least the recovery you can see the way the market has given up. The Dow is
up very strongly. It's popped back just a bit but it'll have a record when all said and done. There are two announcements during the course of the
week. Firstly, the Fed said it would start tapering and didn't serve the market and the Bank of England which didn't raise rates took the market by
surprise.
The Reserve Bank of Australia has abandoned its policy of yield curve control on Tuesday, and that becomes the first major bank to act against
price surges. The Bank of Canada announced it was ending its bond buying program a rate hike as soon as April is expected. The ECB is set to end
pandemic era programs. And in September, Norway's Norges Bank became the first central bank in the developed world to raise rates since the pandemic
began.
And I'll quote, it says, "Based on the committee's current assessment and balance of risks, the policy rate will most likely be raised further in
December." The bank's governor is Oystein Olsen. The Governor joins me now.
[15:35:07]
This is interesting. You are the first -- now I understand Norway has specific issues, sovereign fund issues, oil revenues, it did -- there are
specific aspects of the Norwegian economy that would perhaps get you to move further for the -- first. What was it that you were seeing?
OYSTEIN OLSEN, GOVERNOR OF NORGES BANK: Good evening, Richard. You know, your call to the statement of the committee quite correctly. And you also
refer to our first increase in September, from an historically low level, zero target rates, policy rates, which happened while the pandemic hit. It
was a market downturn in the -- our economy as well. But now, the recovery is also well underway.
So the reopening of the society has led to a market upswing. Growth is -- the activity level is close to normal level. The same applies to
unemployment which has come marketed down. So within -- when the economy normalizes, it's time to gradually seek to bring the policy rate upwards
towards a more normal level.
QUEST: But are you doing it on a philosophical issue that you want to get back to normal? Or are you doing it because you do see inflation at four
percent and you do see inflationary pressures rising in the economy?
OLSEN: It's basically the first aspect to issue (INAUDIBLE) seek to formulate in brief terms, namely, that we see the quite strong recovery
from the pandemic. And as I said, when the economy normalizes and we -- it's time to start gradual increase in the -- in the policy rate, but we're
not that worried about inflation picture. So far, we will be affected by international if the inflation numbers internationally if that prevailed
for a longer time.
But -- and -- but so far, our inflation numbers are quite high, just not actually because of very high electricity prices when -- but those prices
will come down. That's our assessment. And our -- and the core inflation numbers are actually lower than our target of three percent.
QUEST: On the question of climate change, how difficult and how much can you prepare the economy from a central bank? What is your concern, as a
central bank, when you look at and you look out to the future, the shifts that will take place in manufacturing, the shifts that will take place for
the sovereign fund, how do you view your responsibility?
OLSEN: You know, this is the -- to combat and to adapt to climate change, and to manage climate risk which is -- which is -- which is here, which is
there and which may become stronger and stronger. This is primarily a task for the political authorities. But you're correct in your question, that
this is a topic which has increased attention also by by central bank and obviously, whatever happens to the economy.
I mean, in our case (INAUDIBLE) economy is -- as you know, quite oil dependent, we will have to go through a transition towards being less
dependent on oil and gas going forward. So -- and -- so, this is a particular challenge for the Norwegian economy and and when that happens,
when the transition is even stronger than I will see now, that will affect monetary policy obviously.
QUEST: Finally, you are going to test the various ramifications and modalities for central bank digital currency. There are -- your counterpart
in Denmark told me, look, we've looked at this, and we think it's just a -- it's a bit of a red herring. We're already doing digital currency, all our
transactions are digital anyway. How do you envisage a Norwegian did central bank digital currency would be used in practice?
OLSEN: The exact answer on that, Richard, is remains to be -- to be held -- we have accountants for that exactly.
[15:40:00]
But I can confirm what you're indicating that like many other central banks we have had a rationale, a fourth phaes in analyzing aspects and
possibilities of introducing a digital central bank currency. And the background for that is several. First you will know that in our case, the
use of coin and notes in Norway and in Scandinavia is almost is going rapidly down. And then we have the emergence of private -- a number of
private digital cryptocurrencies which might -- not now, but it could have some challenge, the existing monetary system in the -- in the future.
So, I mean -- and then you have the technology underlying Bitcoin and other cryptocurrencies, which is interesting. And cryptocurrencies provide some
new opportunities, for instance, as regard cross country payments that we could learn from. So, altogether, we are investigating the different
aspects of digital central bank currencies, as as well. I suspect -- I think that that will happen.
Some -- sometime in the near future, this court is going to be introduced not necessarily buying all this bond as the first agent, but
internationally.
QUEST: Good to see you, sir. The only thing I always remember whenever I -- whenever I work, which I love coming to Oslo, the only thing I always
remember is, you need more than a bit of digital currency to buy a cup of coffee at the price of coffee in Oslo. But now we are one of the most
expensive cities but great fun to be there. Thank you, sir. Thank you, Governor. I'm delighted that you -- the coffee's are on me next time
because I have to remember to bring my credit cards. Thank you.
The climate activist Greta Thunberg has made up her mind about COP26. She's already declared it a complete failure. And it hasn't really even fully got
underway. Is she being a bit (INAUDIBLE) QUEST MENAS BUSINESS.
(COMMERCIAL BREAK)
QUEST: Gretha Thunberg denounced the COp26 Climate Conference when she attended a protest that took place in Glasgow. There are thousands of young
climate activists in the city and they're demanding delegates make more immediate action.
[15:45:05]
Thunberg slammed 26 calling it a global greenwash fest festival, and preserve the status quo.
(BEGIN VIDEO CLIP)
GRETHA THUNBERG, CLIMATE ACTIVIST: It is not a secret that COP26 is a failure. It should be obvious that we cannot solve the crisis with the same
methods that got us into it in the first place. And more and more people are starting to realize this. Many are starting to ask themselves, what
will it take for the people in power to wake up. But let's be clear, they are already awake. They know exactly what they are doing. They know exactly
what prices values, they are sacrificing to maintain business as usual.
(END VIDEO CLIP)
QUEST: On the other side of that coin, of course, is the financial world. One person speaking to us tonight. Prince Max of Liechtenstein says he's
going to shun coal investments from now on. The prince is running LGT, the world's biggest asset managers, it's owned by one family, it's committed to
net zero by 2030. In exclusive interview, his Serene Highness told me, he wants his clients to go the same way.
(BEGIN VIDEOTAPE)
PRINCE MAX OF LIECHTENSTEIN, CHAIR, LGT GROUP: It starts with a commitment. And I would say that we have started to take initiatives already years ago.
So I think we're at a good point, and we feel quite comfortable that we will be able to reduce emissions at operational level further, and again,
we already quite advanced, we will change and improve the mix of investments that we pursue ourselves but also, of course, for clients.
But even after having improved our operations, even after having sort of improved the mix of the investments for us and for our clients. There will
be some emissions leftover, and those will need to be sort of compensated through a carbon dioxide removal initiatives. Biological or technical ones.
QUEST: On this question of investments, are you are you now shunning all investments both for yourselves and for your clients? Unless they
specifically ask otherwise? But are you now shunning fossil fuel or fossil fuel related investments?
PRINCE MAX OF LIECHTENSTEIN: We are shunning coal and we are sort of assessing basically the rest of the investment universe. And we will, of
course, as we progress with our assessments, as the world, frankly, progressives, in coming up with better solutions, better technologies, then
define our targets, and then investment strategies. So I think a lot while sort of 2030 is not that far away.
I still expect a lot to happen. I think we have seen with COVID, how much can happen and within a relatively short period of time. So unfortunately,
I don't have all the answers for you yet.
QUEST: The attractiveness, though, is not only the disinvestment of traditional fuels, but it is the opportunities for investment in new
technologies, biotechs, all the new stuff. So for a very established, long standing some would say -- some would say it is, traditional banking Asset
Management Group at the highest level, are you able to be nimble and think -- can you teach the old doctor to to do new tricks?
PRINCE MAX OF LIECHTENSTEIN: I think you have raised an important point. It's Bill Gates I think made the point that a lot of new clean technologies
are available. And what is going to be critically important over the next years and decades is to scale them appropriately. And in order to do that,
banks, Asset Management houses like ours, not only need to fletch for financing those but we really need to build up the investment competences
in the right sectors, in the right technologies, in the right regions. And that we have gladly started among quite some time ago.
(END VIDEOTAPE)
QUEST: You hear all voices on Quest Means Business. It's been a long two years for the world of business travel. The head of the World Travel and
Tourism Council says it could be years before anything gets back to normal. In a moment.
(COMMERCIAL BREAK)
[15:52:35]
QUEST: The new head of the WTTC, World Travel and Tourism was predicting a long road back for business travel. Julia Simpson says it could take that
two-thirds of what it was before COVID By the end of next year. And as she told me at WTM, a tony of governments are sensible.
(BEGIN VIDEO CLIP)
JULIA SIMPSON, CHIEF EXECUTIVE OFFICER, WORLD TRAVEL AND TOURISM COUNCIL: If I take you back to 2020, the middle of the crisis, 61 percent of
business travel was completely wiped away. The -- by the end of this year, I think we're going to see that come back maybe about 24 percent. But the
good news is by the end of 2022 if government maintained sensible measures on COVID, we could see business travel coming back to about 66 percent of
2019 levels. That's the story today.
QUEST: What has shifted is the type, isn't it? So the day trip has gone. Munich to Vienna to see a colleague, you're not going to do. Even arguably
London to Frankfurt, you're not going to do. You're going to do that by Zoom or Team. So what sort of business travel will there be?
SIMPSON: Our report today shows that the business travel is going to really take off first in the areas that have been actually more locked down to the
world. Asia Pacific, China and the Middle East. These are the people who are storming ahead. And actually, I know everybody's saying that about
Zoom, but I'm going to challenge it. If you're going to do a multi-million pound deal with people you don't know, you're going to -- you are going to
want to see them face to face.
(END VIDEO CLIP)
QUEST: Julia Simpson. Now on Monday on this issue will be marking the return of international travel to the United States with a special program.
The program is coming from the top of where you can see at the moment, the top of a New York landmark the Empire State Building, it's gorgeous day to
day. Let's hope it stays that way on Monday. It is Monday 3:00 p.m. here in New York, 8:00 p.m. in London.
You're going to hear from the CEO British Airways (INAUDIBLE) company, the U.S. Commerce Secretary. Quest live from the Empire State Building on
Monday. As travel ramps back up, the tourism minister from the Maldives says visitors still care about making the holiday sustainable. Adbulla
Mausoom told me, you can't enjoy the trip without looking after the environment.
(BEGIN VIDEO CLIP)
ADBULLA MAUSOOM, MALDIVES TOURISM MINISTER: Most of the tourists who come to Maldives they love our environment and also we are in terms of
developing our approach. We are going to islands, the government's policies to take tourism to the people so we have got this beautiful islands with
its unique ecosystems and local cultures creation.
[15:55:12]
So tourists will be able to see the part of the Maldives that people have not seen and contribute to the environmental sustainability because we are
going to ensure that new ecosystems, the ecosystems we have are really preserved.
QUEST: How do you balance this lives versus livelihoods? And by that, I mean lives in terms of the sustainability versus the livelihoods of people
who have to live and work there?
MAUSOOM: The tourism industry for us, the -- first, we have to safeguard the nature because tourism is based on the nature. Then second one, because
the new tourists like to be engaged with people. And while developing the tourism in the local islands, people are going to get the direct benefit of
tourism. And also tourists are going to have the new experiences that modern day tourists are looking at.
Well we have got the ultra luxury Maldvies there and we will not spoil that. That will still be there. But still tourists will be able to visit
the Maldives, go to the islands and enjoy the homestay that we are going to start on first January.
(END VIDEO CLIP)
QUEST: Maldives. We will have a profitable moment after the break
(COMMERCIAL BREAK)
QUEST: The Norwegians did it. The Brits sort of teased and never actually did it. And the Fed hasn't gotten around to doing it yet. What am I talking
about? Raising rates? No, not yet, as they say. Well, the Fed of course has put us on notice that tapering is underway and the ECB is thinking about
it. And that could be an internal battle between those that want to start moving and the president, Christine Lagarde who doesn't.
And the Bank of England let us all at the garden path. It shows the complexity of the economic situation at the moment, we know that the status
quo cannot continue that the accommodative position needs to be reversed. How and when and in what measure will be the central bank of monetary
policy decision over the next year. And it is important because that means you and me. our interest rates and our money.
This is not boring stuff. And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York.
END
