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Quest Means Business

EU Looks At Emergency Measures To Rein In Energy Costs; Powell Faces Backlash Over Harsh Inflation Comments; IAEA Team Heads To Zaporizhzhia Nuclear Plant For Inspection; NASA Delays Launch Of Test Flight Around The Moon; Air France Suspends Two Pilots Accused Of Mid-Air Fight; Lulu And Bolsonaro Trade Insults In First Campaign Debate. Aired 3-4p ET

Aired August 29, 2022 - 15:00:00   ET

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

[15:00:35]

RICHARD QUEST, CNN INTERNATIONAL HOST: Greetings, dear viewer. We have an hour left of trading on the markets, which are just marginally lower. We've

been down pretty much the whole -- well, the whole session with an exception of bleep or two but not by much and that suggests the market

doesn't really know what to make of the current situation, and perhaps for good reason because these are the main events that it is having to deal

with.

The EU is planning emergency measures to cope with soaring energy costs.

Technical issues are forcing NASA to postpone a historic moon launch.

And Air France is under scrutiny after a fight breaks out between pilots in the middle of a flight.

Live from New York, on August 29th, 2022. I am Richard Quest and I mean business.

Good evening, we begin tonight with the ever-worsening situation of European energy and the EU is now looking at emergency measures to protect

homes and businesses from soaring electricity bills.

Energy Ministers are meeting next week. They will discuss how to separate the price of electricity from the price of natural gas.

The Commission President Ursula von der Leyen called for a new market model telling a conference in Slovenia the existing one is broken.

(BEGIN VIDEO CLIP)

URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: The skyrocketing electricity prices are now exposing for different reasons the limitations

of our current electricity market design.

It is no more fit for purpose and that's why, we, the Commission are now working on an emergency intervention and a structural reform of the

electricity market.

We need a new market model for electricity that really functions and brings us back into balance.

(END VIDEO CLIP)

QUEST: Now, the Austrian Chancellor is seeking immediate action calling for an EU-wide price cap on electricity. At the same time the CEO of Shell

is warning the energy crisis could last well beyond winter. He says it's a fantasy to believe there's a quick fix.

Antoine Halff is the research scholar at the Center on Global Energy Policy at Columbia is with me.

Antoine, let's just take van der Leyen's point. There needs to be a new market mechanism. We've seen in the UK the cap going up to four, three,

four five thousand pounds. One imagines it will be the same in the rest of Europe.

You're not going to be able to put a new energy or new market model in place during the middle of this crisis, are you?

ANTOINE HALFF, ADJUNCT SENIOR RESEARCH SCHOLAR, CENTER ON GLOBAL ENERGY POLICY AT COLUMBIA: It is going to be tough. For sure, it is testing the

existing system and is there is no immediate replacement option available. But clearly, there is going to be a need to cut back on consumption and

probably to share resources between countries that are more or less exposed to Russian supply disruption risks.

QUEST: But what sort of model could you come up with that would have dealt with the fact that there is a dwindling supply from Russia and an increased

demand if economy start picking up like China? I mean, this is Economics 101. So, I'm not sure what model the von der Leyen, et al think they can

come up with.

HALFF: There is no quick fix. There is no quick fix and there is no easy replacement right now. It is clear that there's been some misguided

decisions before. Decommissioning nuclear plants in Germany was not a good idea. We need the nuclear energy or the nuclear energy we can get and we

need some fuel switching probably and a lot of savings this winter.

QUEST: So, the CEO of Shell just said what you basically said. He said that, "This is going to be somehow easy or over, I think is a fantasy we

should put aside. We should confront the reality." Well, so, what reality need we confront?

HALFF: Well, you know, there are different situations whether you look at oil or gas. If you look at the oil market, Russia is a big supplier, but

Russian oil supplies have been rerouted to the world, but they haven't disappeared.

So, the world oil market is pretty balanced. If we look at inventories, they're pretty flat. They've been -- they've actually risen in the initial

months after the invasion of Ukraine. Since June, they've been pretty flat suggesting there is a balance between supply and demand at the global

level.

[15:05:11]

When it comes to natural gas, it is a completely different story. Russia gets less income from natural gas than from oil, but for Europe to replace

Russian gas, it is much more difficult than to replace Russian oil.

So, we do face a serious crisis this winter. It hasn't materialized yet, because we're keeping -- we keep adding to our winter reserves, but those

reserves are not going to be enough if we have a large-scale disruption in Russian exports.

QUEST: To the extent that President Putin said at the beginning of the sanctions regime, this was going to hurt the West, more than it hurts

Russia. I agree. That is a bit like sort of dancing around to drowning people, in the sense that both sides are being hurt, but who's being hurt

more.

HALFF: There is some truth to that. If you look at, for example, signs of Russian economic activity. And again, this is something we can monitor

using satellites, and we do it. Kayrros is a company I work with.

We don't see any sign of real hurt in Russia just yet. Cement production is basically normal. Electricity output from coal power plants, which you can

monitor is basically just in line with the normal trends. And still output is okay, as well.

Airline travel is recovering from the initial hit of the sanctions. So, the Russian economy is quite resilient, and for Russia to go with that gas

income is not a big deal compared to the trouble that this causes in Europe, going without Russian gas imports.

So, there is an imbalance. There is an asymmetry in the relationship there. But longer term, this is going to be bad for Russia, because the road that

Gazprom has had over the years in the Cold War and since then, as a reliable producer, as a reliable supplier to Europe, in spite of any

political tension, that wall is gone. So, Gazprom is out of the picture for now and Europe is going to have to learn to live without it.

So longer term, we are going to work out solutions. The critical issue is the next few months.

QUEST: I was about to say, the critical issue is what to do when the gas bill arrives a week -- next Thursday.

I'm very glad you joined us tonight, sir, to put that in perspective. Thank you.

So, the soaring energy prices and the likelihood of those rising rates, not surprisingly, that is what is moving the markets.

Europe's indices, they weren't hugely off as you can see from the numbers, but they were sufficiently unhappy and I think you've got a grumbling. I

wouldn't say they're falling out, they are not falling out of bed, but they are grumbling, and all the major indices are lower.

In the US, investors appear to be coming to terms with Jerome Powell's basic vow. He will do -- he will bring down inflation, unconditional fight.

I guess, that's his version of whatever it takes.

The Dow has clawed back losses. The S&P is flat. The NASDAQ is clawing to a minor loss.

The markets were all down so strongly on Friday, you're aware after the Fed.

In times of economic hardship, people look to those empowered for soothing words. So, let's remind ourselves. Franklin Delano Roosevelt -- FDR. How

did he reassure Americans during the Great Depression?

(BEGIN VIDEO CLIP)

FRANKLIN DELANO ROOSEVELT, FORMER PRESIDENT OF THE UNITED STATES: Let me assert my firm belief that the only thing we have to fear is fear itself.

(END VIDEO CLIP)

QUEST: One of the most famous quotes, but the Fed Chair's comments are now making some people very afraid. He said fighting inflation could cause

economic pain and Elizabeth Warren, the US Senator says that doesn't give her a lot of confidence.

(BEGIN VIDEO CLIP)

SEN. ELIZABETH WARREN (D-MA): Do you know what is worse than high prices and a strong economy? It's high prices and millions of people out of work.

I'm very worried that the Fed is going to tip this economy into a recession.

(END VIDEO CLIP)

QUEST: Which perhaps is likely. Mohamed El-Erian is with me. He is the economist and advisor at Allianz. He is with me today from New York.

You wrote on FTP over the weekend, an op-ed that's been making waves because a man of your stature, you basically said that Powell's speech

didn't do what needed to be done in the bigger picture, that he was focused too much on the now.

MOHAMED EL-ERIAN, ECONOMIST AND ADVISOR, ALLIANZ: Yes, he had to deal with the past, the present, and the future. He dealt well with the present. And

in an eight-minute speech, he conveyed the commitment of the Fed to fight inflation. He mentioned inflation 45 times, Richard in eight minutes, so he

helped realign market expectations.

[15:10:10]

But he needed to do more. He needed to explain why it is that the Fed was so wrong for so long, and until he does that, people are not going to take

his words as seriously as they should.

And also, and this gets more wonkish, unfortunately, they need to modernize the monetary framework. Is the framework built for a world of yesterday,

not of tomorrow?

So, he did one out of three and that is why it is encouraging, but he should have done more.

QUEST: You described him as the least -- "may well be the least credible Fed in the market's estimation since the 1970s." That was the year of very

high inflation that led to Paul Volcker, and credibility is important when your main tools is the policy rate, guidance, the statement, and the

minutes. You essentially have to -- I mean, it goes back to this Greenspan idea, isn't it? "Don't fight the Fed."

Well, are we moving to a situation where people are saying, "I'm not going to fight you, but I'm going to go around you."

EL-ERIAN: Yes, I'm going to sidestep and that comes from really three big mistakes. One analysis, they held on to this characterization that

inflation was transitory for way too long. It took until the end of November to realize what was going on.

Two, forecasts. Every time Fed forecast come out, every quarter, they are dismissed not only by economists, but by former Fed officials. And finally,

communication. They haven't been consistent in the communication.

The big hope is that Jackson Hole was a reset and that we are going to see more consistency, better analysis, and more realistic forecasts.

QUEST: The big hope, but you know, I'm reading between the lines, so correct me, you don't think that they will, do you?

EL-ERIAN: I'm worried that they will blink, they will blink too early. I am worried about that. I think you've got to put the inflation genie back

into the bottle. Unfortunately, they are so late, that there is a cost to doing so.

You know, Elizabeth Warren is right, we may have undue damage to employment, to the economy, but that is because the Fed is late, but you've

got to put that inflation genie back into the bottle.

QUEST: So, if we've got the -- in that scenario, and bearing in mind where we are today, you just heard me talking about higher energy prices. And

frankly, Vladimir Putin knows he can put his foot on the neck of Europe's energy and send prices higher.

Essentially, you are saying, if I get you right that rates are going to have to go a lot higher, to put this genie back in the bottle.

EL-ERIAN: Yes, and the one thing that people aren't talking about enough is the signals that ECB -- talking about Europe -- European Central Bank

officials gave at Jackson Hole. They were much more hawkish than we've ever heard them before, and we saw interest rates in Europe move on that.

Look, if you look at degrees of difficulty, the US has the least degree of difficulty. The Fed has the least degree of difficulty.

The most degree of difficulty is in the Eurozone, because of the gas issue, because they are trying to make monetary policy for 19 countries, that's

not easy. They have what's called fragmentation risk.

So, we can also see something new, Richard that you and I are going to be talking about for the next six months, which is dispersion, different

countries are going to go down slightly different roads, we're going to get local varieties of what has been a common global issue so far.

QUEST: How does that translate itself in terms of what we see them do? I mean, everybody is going to have to raise rates to deal with inflation.

So, we're talking about how far, how fast, but how does that dislocation show itself up to us?

EL-ERIAN: So, the US is the place where you can do it without really damaging the economy, without throwing it into a deep recession.

Once you get to Europe and the UK, it gets a lot harder and then in Europe, in the Eurozone, you've got to worry about what's called fragmentation that

countries like Italy and Spain are going to find it much harder to fund themselves than Germany.

So you know, we're going to see a lot more dispersion, and then, let's not forget, importantly, the developing world, I have this notion of little

fires everywhere and these little fires come from slower global growth, a stronger dollar, higher interest rates.

QUEST: Right.

EL-ERIAN: So, we've got to keep an eye on that too.

QUEST: On this question of markets, and where we're going with the market, I mean, we can argue about whether or not we're going to test June's lows

again or whatever, but the market would be right to be looking for lower corporate profits, lower growth, lower EPS'.

EL-ERIAN: It would be, but there is a strong technical bet. What do I mean by that? People don't know where to put their money.

[15:15:10]

When you have eight-and-a-half percent inflation in the US, nine percent inflation in Europe, 10 percent inflation in the UK, holding cash isn't

very attractive. Bonds are still repricing.

So, you have this notion of the least dirty shirt, that the stock market somehow is the least dirty shirt.

So, you have this technical support for the marketplace that has made this market much more resilient than if you were to judge it simply or value it

simply on the basis of fundamentals.

QUEST: Gosh, that's a depressing thought that we're only doing this because it's the best of the bad bunch at the end of the day.

Final thoughts with you. Look, you've been doing this quite a long time and I guess, did you think we would end up in such a bad inflationary period

again? Having seen the 70s and the 80s and gone through all the others, did you think that we would make such colossal mistakes again?

EL-ERIAN: I did not think the Fed in particular would make so many mistakes. That's the one that surprised me and that is important because

the Fed is a price setter for a lot of the global economy and it dictates all sorts of things for other countries. So, that one surprised me.

What hasn't surprised me is how difficult it is to emerge from a world in which we have distorted markets for so long. That was going to be

difficult. I wrote a book as you know, in 2016, called "The Only Game in Town that Looks Forward." And I was concerned then that the longer we stay

in a distorted world, the harder it is to get out of it.

QUEST: Mohamed El-Erian, very glad you're with us tonight in New York this time. Thank you, sir. I appreciate your time tonight. Thank you.

As the fighting near Ukraine's massive nuclear plant rages on, I mean, look at that, that picture. So, where is that hole in the nuclear plant? And

what's the significance of a big hole in a nuclear power plant?

Luckily for us, Sam Kiley will be with us after the break to help us understand a bit more. Thank you.

(COMMERCIAL BREAK)

[15:20:00]

QUEST: Inspectors from the United Nations nuclear watchdog are to arrive in Kyiv. It is expected within the next few hours as fighting near the

Zaporizhzhia Power Plant in the Southeast Ukraine stokes fears of a nuclear disaster.

The IAEA party will assess security risks at the plant, which was captured by Russian forces earlier in the war. Now, at the same time Ukrainian units

are mounting an offensive in the south of the country to try to retake territory seized by Russia, and that includes Kherson, the city has been in

Russian hands for almost six months. It's the only regional capital that Putin's troops have been able to capture.

Sam Kiley is in Kryvyi Rih in Central Ukraine. I'm looking at these photographs. You've seen them. They appear to show holes in the roof of a

building at the nuclear plant. So, what do we know about that?

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: We know very little except that there are holes in this building, Richard. This is latest

satellite imagery.

The Russian Ministry of Defense on August 7th put out an undated video showing very similar damage, indeed and even with shell casing sticking out

of a couple of holes in the roof of this nuclear power station.

Now, they blame the Ukrainians for this damage and other damage in and around, not just the nuclear power plant, but the city -- wider city at

large.

The Ukrainians blame the Russians as indeed the refugees from that location that we've spoken to. So, whatever the truth of the matter is, this is a

frontline location. It is a location where we do know, the Russians have been firing rockets out of into Nikopol, and other cities across the

Dnieper River, are killing significant numbers of people.

And therefore, the IAEA is desperately trying to get these inspectors in, they hope to arrive -- they are arriving in Kyiv roundabout now, we

understand and they will be likely transferring down to Zaporizhzhia tomorrow, possibly even getting into the nuclear power plant the next day.

Whether or not they will be able to establish what's really going on there, the level of access they will have, whether they can speak freely, with not

only Russian technicians that have been brought in, but also Ukrainians remains to be seen.

And of course, the other very significant complicating factor is that there is now an increase in the tempo of the war coming from the Ukrainian side

with a very significant counteroffensive after several weeks of what is called shaping operations in which logistics, bases, airfields, ammunition

dumps, and other locations, and indeed, bridges across the Dnipro have been attacked in preparation for this counteroffensive.

We know from our own military sources that four villages have so far been captured in this counteroffensive. It is not necessarily certain that

they'll hang on to them, those villages, but the momentum is being regained for the first time in some weeks by the Ukrainians.

QUEST: So, it's very difficult from afar to gauge where we are in all of this. If you sort of just go up a helicopter view and just look down

overall at the situation. Who has got the upper hand? Is this just going to be -- as we go to winter, Sam, obviously, that makes it much more difficult

for Russia to prosecute a war, but it also makes it difficult for Ukraine to defend it.

KILEY: It does. What the Ukrainians really have to do is avoid the frozen frontlines, the frontlines that were established in 2015 essentially stayed

that way after the initial Russian-backed rebel push in the east of the country. They've got semi-frozen frontlines all the way from not very far

from Kharkiv in the far north and a great big arc all the way down, south of where I am here, all the way down to Mykolaiv.

Now, from the Ukrainian perspective, they've got a couple of months left at least just about before bad weather sets in when the maneuver capability

becomes reduced, but they do have a large amount of very sophisticated NATO weaponry that has come in -- long range missiles, very accurate artillery

pieces, counter battery systems, and this counteroffensive is being described as an air and land war effort to break through the Russian lines,

to punch through to Kherson, to cut off the water supply ultimately, which is what controlling Kherson would be able to do.

They would cut the canal that sends freshwater into Crimea, put real pressure on the Russians and then hope for a collapse in the background.

US sources have been telling my colleague, Jim Sciutto, that they believe that the Russians are not getting anything like the full capacity in their

battle groups. Their numbers are down, they're struggling to recruit. Their logistic lines have been hit hard by the Ukrainians.

So, this is the moment that the Ukrainians really want to try and take the initiative. If they don't, then this frontline literally becomes frozen --

Richard.

QUEST: Sam Kiley in Ukraine this evening. Thank you, sir.

[15:25:08]

NASA is going back to the moon, just not today. Engine troubles have delayed and derailed today's first attempt to blast the Artemis rocket on

its way. It is being readied to try again.

(COMMERCIAL BREAK)

QUEST: A mission 50 years in the making has to wait a few more days. NASA says the trip to the moon could now launch on Friday if the engineers can

fix issues with the engine that stymied today's scheduled liftoff.

The Chief spoke to reporters in Florida a short time ago.

(BEGIN VIDEO CLIP)

MIKE SARAFIN, MISSION MANAGER, ARTEMIS 1: This is an incredibly hard business. We are trying to do something that hasn't been done in over 50

years and we're doing it with new technology. We are doing it with new operators and new teams, a new command and control, a new software.

(END VIDEO CLIP)

QUEST: So the uncrewed flight is a test run around the moon and back again. By the middle of this decade, NASA wants the Artemis Program to put

humans on to unexplored south pole, and it could ultimately serve as a steppingstone for the journeys to Mars way in the future.

It's a big deal not just from NASA but also for Boeing who have built much of the rocket system that will launch the spacecraft toward the moon.

Boeing has suffered recent stumbles with its space business including technical issues with the Starliner spacecraft.

This was a chance to restore its reputation.

Rachel Crane is with me from the Kennedy Space Center.

We don't -- I mean, I am always very hesitant about piling in the criticism when you have the head of NASA basically saying, listen, we are trying to

do something that is impossible -- that is very, very difficult. So, give us a break.

But for Boeing, a commercial company, they may not enjoy the luxury of having a break.

RACHEL CRANE, CNN INNOVATION AND SPACE CORRESPONDENT: That's right, Richard. I mean, when you hear them describe it, you're like, "Okay, yes, I

guess, you guys are trying to get to the moon. This is pretty hard stuff." The saying goes in space, "Space is hard." It is pretty obvious, but it

really rings true and today was another testament to that.

[15:30:13]

Now, as you pointed out, Boeing is one of just many contractors that NASA has partnered with to create this vehicle.

The SLS is the rocket that powers the Orion Spacecraft on top. Lockheed is the main contractor on the Orion Spacecraft. Boeing was the main contractor

on the core stage here. But also, Richard, I want to point out that a lot of the parts of this vehicle are actually from the shuttle era. The

engines, the R.S.-25s which as you pointed out, had an issue today. Although NASA saying they don't think it was actually an engine issue, per

se, it was more about the cooling system for those engines.

Essentially, this liquid hydrogen and liquid oxygen is incredibly cold. So, before they push it through the engines, they need to make sure that the

engines themselves are cooled down, and that it was that process that bleed where they just weren't seeing the temperatures that they wanted to see in

one of those engines. But these engines have already flown to space before, Richard, on shuttle missions.

So you know, this is a flight proven hardware. And many of the other elements in the vehicle itself are also flight proven. So as you pointed

out, Boeing is one of the -- one of the contractors here of course. They're not so excited that it didn't happen today, everyone was, you know, the

Space Coast was buzzing with activity, everyone hoping --

(CROSSTALK)

QUEST: Right.

COHEN: But I think they were a little more concerned about it happening successfully than rather than on time because as you know, these launchers

get scrubbed all the time when it comes to space. And this vehicle has never been flown before. So they are really nervous about it. They mount to

make sure that everything just works properly. So, I think NASA is very confident that they made the right choice today in scrubbing this mission.

And as you said, there is a backup opportunity potentially for Friday. We'll be getting an update from NASA tomorrow, giving us more insight into

exactly the nature of this technical issue. And if that Friday launch date is feasible, Richard.

QUEST: Rachel Crane, thank you.

The flight between Paris and Geneva is a short one. It takes over an hour, just over an hour. It was still long enough for to Air France pilots to get

into a fight in the cockpit. An altercation is how it's been described. It was resolved without compromising safety and it has suspended the pilots

says France. CNN Scott McLean with the details.

SCOTT MCLEAN, CNN INTERNATIONAL CORRESPONDENT: This actually happened back in June. This was a flight from Geneva, Switzerland to Paris, France little

over an hour flight time, and there was some kind of a disagreement in the cockpit which flared up into a physical altercation. We don't know what

kind of physical altercation but in a written statement, the airline described it in a much more benign way saying that the pilots exchanged

inappropriate gestures though they have also confirmed that the pilots were not giving each other the finger.

This was something that turned physical. Now the airline, Air France says that the flight continued on normally that the issue was resolved. It's not

clear when or how Air France actually found out about what had happened, but it has gone ahead and suspended the two pilots while it looks into it.

This is not the only safety mishap for Air France in the news lately. Last week, the French Air Safety investigative agency called BEA released a

report on an incident that happened back in December 2020 on a flight from the Republic of Congo to Paris, France.

In that case, a few -- there was a fuel leak and safety procedure dictated that the pilot should have shut down the engine with the leak. But that

didn't happen and according to the report that created a fire hazard. Now this was not an isolated case. The report detailed other incidents where

pilots haven't followed the proper safety procedures and taken together. It suggested there is a certain culture among some Air France cruise which

encourages a propensity to underestimate the extent to which strict compliance with procedures contributes to safety.

Now the report also tries to put things into context and that is that Air France literally flies thousands of routes every day. And so, the number of

flights, the number of crews being investigated, in the grand scheme of things is very small. Scott McLean, CNN, London.

QUEST: Now to Les Abend. A retired 777 captain. Gosh, Les, it is good to be back with you. Author of the Paper Wings. You're in Florida. OK. Let me

just -- how many years were you flying, Less?

LES ABEND, 777 RETIRED CAPTAIN: From my airline, 34, Richard.

QUEST: Right. In 34 years, did you ever have an altercation in the cockpit that involved you grabbing somebody's collar or being slapped in the face?

[15:35:04]

ABEND: I knew this was getting there. No. We never did in all those years And I would -- I would say, venture guests that other folks that had the

same experience, other colleagues of mine had the same experience. You know, we're in a closed environment, the fact that it doesn't happen,

period, you know, is a testament to our professionalism. So, this is -- this is highly unusual for me.

QUEST: Right. And of course, the flight attendant had to stay in the cockpit for the rest of the flight. I said to keep them apart. But just to

make sure that nothing. This is serious stuff though, Les, is it? Or are we making too much out of it?

ABEND: No, it is serious stuff. I mean, but I think it's a one off situation. I mean, maybe you'd got lost in translation with reference to

that it was a gesture from French to English, but it sounds like it might - - it was more than that, obviously. But no, it's a safety of flight issue. At no time, listen, we -- we're people, we have disagreements with each

other. But at the end of the day, the individual with the four stripes is the one that has to be responded to.

And that individual is the leader. So sometimes there's a disagreement with procedures or something to do with that very moment. But at the end of the

day, you know, and perhaps it wasn't even about procedures, it may have been something related.

QUEST: But what's more worrying is the report -- you'll have seen the report into the A330, the Air France A330 that had a fuel leak and they

didn't do certain things like cut the engine, et cetera, et cetera. But the BEA, which is their home regulator and tends to be a little bit more on the

favorable side basically says Air France has to put compliance back at the center of safety. Were you surprised that such a brutal recommendation?

ABEND: Especially with Air France, I mean, Air France has always had such a great and really still does have a great reputation. I don't know what this

new culture is. But -- I mean, the checklists are a bible and the situation that you just described with a fuel leak can be a very, very serious

situation that may require after a lengthy checklist for this kind of item. I'm a Boeing guy, but may require shutting down that engine.

So, why they refuse to do whether their logic was any good. It does come down to pilot's discretion sometimes. What's the best alternative? But, you

know, deviating outside of standard operating procedures likely doesn't get you to a good place.

QUEST: Yes. And that's really the point with Air France tonight. The airline is going to have to defend what it says and put in place various

measures. Les, at the end of the day, flying -- which worth reminding our day viewer that flying is still the safest form of travel.

ABEND: You know, I'm biased, Richard. But of course, yes, I think you have a better chance of having some sort of issue. You know, getting on I-95 or

the, you know, the West highway than you do getting in an airplane. We're professionals up there.

QUEST: Good to see you, Les. I'm glad to have you join us tonight. Thank you, sir.

Brazil's presidential election is little more than a month away and the sparks already flying. Six candidates participated in the first round on

Sunday night. However, yet all eyes were on the former president and the incumbent, and they spent their time trading health insults. Stefano

Pozzebon report.

STEFANO POZZEBON, CNN CORRESPONDENT: It was a debate that almost didn't happen with Brazilian President Jair Bolsonaro confirming his presence only

hours before the broadcast began. Bolsonaro and former President Luiz Inacio Lula da Silva were joined by four other candidates to discuss the

economy, the response to the COVID-19 pandemic and the environment.

Lula was questioned about the series of corruption scandals that took place while he was president between 2003 and 2010. And he defended his records

in power saying that millions are so their living conditions improve while he was president.

(BEGIN VIDEO CLIP)

LUIZ INACIO LULA DA SILVA, FORMER PRESIDENT OF BRAZIL (through translator): You say you didn't see those changes I'm talking of, well, your driver saw

them. Your gardener saw them. Your cleaning lady saw them. Go ask her. She saw this country doing better. She saw her child could answer a university.

(END VIDEO CLIP)

POZZEBON: Bolsonaro instead went on the attack, saying that the Brazilian economy is faring much better than other countries in the region, and

personally attacking local journalists the Vera Magalhaes she asked him a question about vaccination rates. All the other candidates expressed

solidarity with the journalist Magalhaes but with little over a month or before the first round of the Brazilian election on October the second the

race already seems a two-way affair between Lula and Bolsonaro.

[15:40:08]

For CNN, this is Stefano Pozzebon, Bogota.

QUEST: And that's QUEST MEANS BUSINESS for the moment. And about 20 minutes from now you and I will have a dash for the closing bell. But that's only

after you have enjoyed I hope, World of Wonder.

(COMMERCIAL BREAK)

[15:58:32]

QUEST: Now two minutes to go. I'm Richard Quest. And this is the dash to the closing bell. The markets are off the worst of the days. The Dow was

down on 300. As you can see early on about 11:00. Now we're off just 130. I'd say just 130. But the triple stack also shows an interesting picture

because market losses are contained. And we're holding 4000 on the S&P and 12,000 on the NASDAQ.

It's down almost just a one percent. The Fed's tighter monetary policy is part of a global fight against inflation. Mohamed El Erian told me earlier

who he thinks is facing the biggest policy challenge.

(BEGIN VIDEO CLIP)

MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ: If you look at degrees of difficulty, the U.S. has the least degree of difficulty, the Fed has the

least degree of difficulty. The most degree of difficulty is in the Eurozone because of the gas issue. Because they are trying to make monetary

policy for 19 countries. That's not easy. They have what's called fragmentation risk. So we can also see something new, Richard, that you and

I are going to be talking about for next six months which is dispersion.

Different countries are going to go down slightly different roads, we're going to get local varieties of what has been a common global issue so far.

(END VIDEO CLIP)

QUEST: Remember that word? Dispersion. You'll hear us talk about it many times. Look at the markets, the Dow 30, you have Wal-Mart at the top, and

you have Salesforce at the end. Salesforce has been the last one down on a couple of occasions but a big bulk in the middle which shows you the trend

of the day. And that is the way the markets are looking with seconds to go before the closing bell.

[16:00:08]

I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable. "THE LEAD" is next.

END