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Quest Means Business
Race Begins To Become Next Prime Minister; Stocks Rise On Hopes Of Slowing Pace Of Rate Rises; SNAP Shares Fall On Grim Online Ad Spending Outlook; Former Trump Adviser Steve Bannon Given Four Months In Prison; Jan. 6 Committee Officials Subpoenas Trump; Former Pakistan P.M. Imran Khan Banned From Office For Five Years. Aired 3-4p ET
Aired October 21, 2022 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:23]
RICHARD QUEST, CNN INTERNATIONAL HOST: There is an hour to go on Wall Street and we end, it's an optimistic week. If you look at the Dow, a
little bit of a nonsense at the beginning, but really straight up and held those gains. We'll talk throughout the program about why this should be.
The markets and the main events. Look at them. They're all up sharply. The Dow is at probably the best of the day.
The events of the day that have been driving everything: The next UK Prime Minister will face a giant economic test and must back the confidence of
the markets.
Twitter shares are down four percent after the reports that the US government may scrutinize Elon Musk's takeover.
And tonight, the Chairman of Turkish Airlines tells me he wants people to visit Turkey, as well of course as transit passengers.
I promised that we'd be in London tonight and indeed live from London, it is Friday, October the 21st. I'm Richard Quest, and yes, end of the week, I
still mean business.
One candidate has already announced that she wants to be the next Prime Minister of Britain. The winner could be announced in just a matter of
days. The threshold has left room for no more than three candidates.
The one who has already thrown her hat in the ring is Penny Mordaunt, the leader of the House. The former Chancellor, Rishi Sunak could be next. And
of course Boris Johnson, is still the enigma. No one knows is he, will he, or is he just going to try to be kingmaker?
Bianca is with me. She is in Downing Street. So, I'm guessing Penny Mordaunt is hoping for sort of get those signed up fast. Why isn't Rishi
Sunak already said "I'm in" after all, the vote is only in two or three days?
BIANCA NOBILO, CNN INTERNATIONAL CORRESPONDENT: It's a good question because he does seem a shoo-in with the amount of MP support that he had in
the last leadership contest not that long ago, and he is leading on all the tallies that we're desperately trying to keep. He is up over around 90 MPs
now, so extremely close to that critical threshold.
Boris Johnson on the other hand, he has around 60 MPs backing him and Penny Mordaunt, she has only just around twenty five to twenty six last time I
checked, so there's nothing for her to lose to come out and say that she felt encouraged by colleagues that she needed to stand in order to unite
the party and in the national interest.
But before we get to the numbers and the probabilities, let's just step back and take a look at these three frontrunners.
(BEGIN VIDEO CLIP)
NOBILO (voice over): Liz Truss will soon be out as Britain's Prime Minister. Around 200,000 Conservative Party members, a tiny fraction of
Britain's population, the same electorate responsible for appointing Truss are expected to vote for her replacement by October the 28th.
Three candidates lead the pack: Rishi Sunak, Penny Mordaunt, and Boris Johnson.
Former Finance Minister Rishi Sunak was runner up to Liz Truss trust in the last leadership race.
RISHI SUNAK, FORMER BRITISH FINANCE MINISTER: Honesty and responsibility, not fairy tales.
NOBILO (voice over): He warned her tax cutting plans would send the economy into freefall, accusing her of fairy tale economics, words that many now
believe have been vindicated.
Popular among fellow Tory MPs is nonetheless seen as a traitor among Conservative faithful having played a pivotal role in the final hours of
Boris Johnson's Premiership.
Leader of the House of Commons, Penny Mordaunt finished third in the previous contest.
PENNY MORDAUNT, BRITISH MEMBER OF PARLIAMENT: The Prime Minister is not under a desk as --
NOBILO (voice over): She stood in for Truss to answer an urgent question on the sacking of former Chancellor Kwasi Kwarteng and was praised for her
handling of the situation.
Given the fractious history of Rishi Sunak and Boris Johnson, Mordaunt can be seen as the unity candidate.
A familiar face, Boris Johnson is expected to stand, just three months after his drawn out departure from Number 10.
BORIS JOHNSON, FORMER BRITISH PRIME MINISTER: Like Cincinnatus, I am returning to my plow.
NOBILO (voice over): An admirer of Winston Churchill who famously was Prime Minister twice, Johnson went so far as to compare himself to Roman
statesman, Cincinnatus in his farewell speech, who returned to power for a glorious second time you.
[15:05:00]
The former Prime Minister was forced to resign following months of controversy around lockdown parties and other scandals. He still faces an
investigation into whether he lied to Parliament about COVID breaches, which could see him suspended.
BEN WALLACE, BRITISH DEFENSE SECRETARY: At the moment, I would lean towards Boris Johnson.
NOBILO (voice over): He enjoys the support of the Defense Secretary after the pair worked closely together on Ukraine. Johnson's father also made
plain Friday where his affiliations lay.
STANLEY JOHNSON, BORIS JOHNSON'S FATHER: I think I've got to support Boris. I'm pretty sure I'm going to support Boris, so I'm just speaking now as a
as a voter, but I want to be sure that he is going to stick to the 2019 Manifesto.
NOBILO (voice over): Johnson has never lost an election, allies will point to his 2019 victory as evidence he can unite the Conservative Party and
prevent an electoral wipeout that could put the party in opposition for a generation.
B. JOHNSON: . a powerful new mandate.
(END VIDEOTAPE)
NOBILO (on camera): Penny Mordaunt might act as a kingmaker herself, because of course, by entering into the race, it is likely that she will
shave votes being somebody who gets a lot of her support from the center of both Boris Johnson and Rishi Sunak.
So only time will tell whether or not the former Prime Minister will be willing to come out and publicly declare. All suggestions this evening is
that he is going to do it. He apparently spoke to a former PPS, a private secretary of hers and said "I'm up for it."
And he is traveling back to the UK expected to arrive tomorrow. This is a figure who elicits just as much love as loathing within the Conservative
Party at the moment. So, making the case that Johnson could be the unity candidate to take the party forward will definitely be a difficult one --
Richard.
QUEST: Bianca in Downing Street, thank you.
The political chaos in UK politics has much greater ramifications and lessons for others around the world. Policymakers dealing with rising
prices. Inflation in the UK, is 10.1 percent, the highest of the G7, and Liz Truss' proposed fiscal plan, if it had gone through, likely would have
made it worse. Still, the issue of being left entirely to Central Bankers, which of course brings its own risks.
The reality -- and this is what we're going to focus on now -- is how do you bring down inflation, whilst at the same time, a government has its own
policies and you have to time it right.
The former US Treasury Secretary, Larry Summers was talking to Wolf Blitzer about the lagging effects of monetary policy, action taken today will
likely not be felt for months.
(BEGIN VIDEO CLIP)
LARRY SUMMERS, FORMER US TREASURY SECRETARY: Look, the Fed has got a hard job. All of us have had the experience of taking a shower in some old
hotel, where there is a long lag between when you turn the faucet and when the temperature of the water changes, and when you're in that situation,
you turn the faucet and you turn the faucet and nothing happens and then all of a sudden you've scalded yourself.
(END VIDEO CLIP)
QUEST: Now, that's what people fear the Fed might have done. So, it pushed the button and rates went up by 25 basis points back in March, but
the water is still cold.
So then it raised rates even more, because the Fed is of course, data dependent. Inflation is still going up. And the Fed now raises it by 75
basis points in June and is likely to do so again in November. It is exactly as Larry Summers says, you keep raising the -- turning the hot tap,
but the plumbing is so slow, but then suddenly you get scalding.
This graph shows exactly the relationship of it.
You can see the inflation rate since January and factor in the basis point -- the basis point, but this is only April -- March, April, May, June,
July, August, September, October. We're only really feeling the effects of this.
Now, if you add this in, this full cumulative effect probably won't be felt until the middle of next year, which is why people are talking about a
potential recession in the middle of '23 onwards.
Investors today are hoping the Fed found the right temperature. The Dow is up more than 500 points. The S&P is up, as you can see, just slightly less
and the NASDAQ is lagging a bit bearing in mind the difficulties.
Whether or not the Fed slows down the pace of rate increases is the big question.
Randall Kroszner is former US Fed Governor. He is with me now from Austin, Texas.
I sort of think the way it was described by Larry Summers is exactly the dilemma in the true sense of the word.
[15:10:02]
RANDALL KROSZNER, FORMER US FEDERAL RESERVE GOVERNOR: I think that's exactly right. I mean, Milton Friedman my predecessor at University Chicago
of many, many years probably 60 or 70 years ago said that monetary policy has an impact with long and variable lags, and that hasn't changed and
Larry's analogy is exactly right.
It's possible that they could be doing too much. But I think it's very important that they have acted as they have, because otherwise things could
have gotten out of control.
QUEST: You think, monetary lag, which I was always taught seven to nine months, do you think it has got tighter as a result, say of a faster moving
economy, e-commerce, all the various things that when the rules were written about nine months, monetary like, but we do things much more
quickly, now. Information travels much more quickly.
KROSZNER: So I think certain ways, the Fed policy can move more quickly. So, their so-called forward guidance, when they say, "Okay, we're going to
keep low for longer," or "We're going to go on this particular path" that has an impact on interest rates that's pretty quick.
But the overall impact on the labor market, on production, that still takes a while and remember, the Fed only started tightening in March. So, we're
just a little bit more than six or seven months in. (AUDIO GAP).
QUEST: . when you start doing this number of rises?
KROSZNER: Well, it certainly has a very big impact and we don't have that much experience with interest rates going up so rapidly. So, it could be a
little bit different than just if you raise that the same amount, but over a longer period of time. It is likely that it will have a bigger impact.
You're starting to see that in the US housing market, you're seeing a lot of areas, almost all areas of the country, housing prices coming down. And
that's the delayed impact. We don't know how much they will go down, but they will start to go down.
QUEST: I want you to listen to what Mark Carney said, former Governor of the Bank of England, who you'll know. We were at the IMF and we were
talking about how markets punish bad behavior by governments.
This was obviously in relation to the UK fiscal mini budget, because what everybody said is, you know, you want to really know why Liz Truss
resigned, it was the market, what had done it. Listen to former Governor Carney.
(BEGIN VIDEO CLIP)
MARK CARNEY, FORMER BANK OF ENGLAND GOVERNOR: There are a few lessons, a few quick lessons from the UK experience.
QUEST: Don't do it.
CARNEY: Well, the first is that all of us -- all of us are operating in a different risk environment and mistakes will be punished and that's true
for any country, so that's the first thing.
The second is yes, in that environment, institutions matter. The transparency, the guidelines, the restrictions that come with institutions
help guide both monetary and fiscal policy, so they matter.
Thirdly, the numbers need to add up.
(END VIDEO CLIP)
QUEST: None of those things happened, of course, in the case of the UK, but this idea of mistakes will be punished. I remember the days of the bond
vigilantes in the 1980s and 1990s, where they got a lot of flak for the fact that they were forcing companies to do things that might have raised
unemployment, for example. Is the market the right place to punish?
KROSZNER: Well, so I think that's one area. Obviously in other area is at the ballot box. We have the midterm elections coming up in the US, and
obviously there has been a lot of turmoil politically in the in the UK. So, I think it is one factor to take into account, but I think it shouldn't be
the only factor.
QUEST: Randall, everybody is pretty much in agreement. There may not be an agreement on whether there will be a recession or I think there is a
consensus building, but even those who see a recession in the US say it's not going to be the 1980s Volcker again.
KROSZNER: I think that's right, because the Fed has actually gotten, even though they've been slow to start, they've moved very quickly. And the two
big differences with the late 1970s, early 1980s: One is that inflation expectations have not gotten out of control.
Even a few weeks ago, before the markets really realized that the Fed is serious about this, inflation expectations over the intermediate to longer
run, let's say five or five to 10 years out, really had just been just the upper part of the same range they've been in for the last decade or so.
So, the Fed had not lost credibility with market participants. It certainly did in the late 1970s or early 1980s. Second for the US, we are in a
dramatically different position when it comes to energy. We were a net energy exporter.
[15:15:07]
In the late 1970s, we were super dependent upon energy imports and that is why I think there's going to be a big difference between what happens here
and what happens in Europe.
QUEST: Randall, it is good to have you. Thank you for putting perspective into all of this. I'm grateful.
Now, shares in SNAP have snapped, literally. Its latest quarterly report started the downward spiral. The company must look towards reinvention to
survive, next.
(COMMERCIAL BREAK)
QUEST: Horrible day for SNAP. The share is off 30-odd percent as a results of weak revenue, and what is worse online ad spending is getting
very tight says the company. In the last year, 90 percent of the value of SNAP has gone.
Now, you'll be aware, of course, I bought SNAP in 2017 at $28.14 a share. I bought it at then the peak of the IPO. It went down sharply. It then went
back up. Now, I've lost a whopping 73 percent on the investment.
To make it worse, if I had bought Twitter, I'd be seeing 218 percent. If I bought Alphabet, I'd be up, and even Meta, which is Facebook would have
only been off some seven percent.
So my SNAP shares is a really bad purchase. The question of course is should I keep holding them? If I bought at 23 and they are down at seven,
do they realistically stand a chance? Or should I sell, cut my losses and put the money into something more useful?
Paul La Monica is in New York.
Paul, you can give me your opinion on what I should do with my investments in a moment. Why was SNAP so brutally attacked by the market?
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, it was a ferocious selloff that is obviously continuing, Richard, and I think the big problem is that when
you have a company like SNAP that warned in May that things were not looking good, then they had layoffs in August, you hope that you're getting
all the bad news out of the way, but when it keeps getting worse and worse, that is a huge problem.
[15:20:00]
And then you have also the fact that this isn't just that the economy is potentially heading into recession and advertising budgets are getting cut,
it is the dreaded curse for any hot tech company of new competition coming in and stealing all your thunder.
TikTok obviously is the social media app that everyone is talking about now, and now, you even have this even newer app BeReal photo sharing app
that is generating a lot of buzz that even TikTok has to be worried about BeReal's real growth.
QUEST: We'll talk about BeReal. I learned about BeReal for the first time this week, when I started getting random photographs from friends who
had all signed up for it and then I had to be explained what it was.
But here is one of my issues, SNAP is most -- of all the biggest, SNAP is most adversely affected by Apple's change in its algorithm and rules, which
allows, of course, for the iPhone and for how people can be tracked. There is no getting over that. Apple is determined to clobber these companies.
LA MONICA: Yes. Apple is obviously not going to make any changes to these policies that they advocate, it is for the privacy of their users, it is
not going to be easy for a company like SNAP, which is of course much smaller than Facebook or Meta, which is also being hurt by Apple's changes
as well.
So, I just don't know how SNAP gets out of this funk when you have all of these negatives that are both your company specific, industry specific,
hurting them right now. It is going to be very difficult to turn things around, I think.
QUEST: Paul La Monica, grateful for you tonight. Have a good weekend.
There is only a week left for Elon Musk to close on Twitter, and questions about the deal are multiplying. The uncertainty is reflected in the share
price.
"The Washington Post" says Musk told investors he plans to cut Twitter's workforce by 75 percent, and government, too, the administration has
concerns.
Bloomberg is reporting, some officials are looking at whether it should undergo a national security review. Concern, of course, about SpaceX's
Starlink satellites.
You know, Musk had threatened to stop paying for the service for Ukraine. He now says he will.
Professor Galloway is with us. I'm sure you have some fruity thoughts for another occasion on my investment in SNAP, which we shall not dwell on
private grief.
On Elon Musk, is this man a bloody nuisance when it comes to the markets?
SCOTT GALLOWAY, PROFESSOR OF MARKETING, NYU STERN SCHOOL OF BUSINESS: Well, good to be with you, Richard.
Well, is he a genius that has created tremendous value? Or is he a perfect example of the idolatry of innovators? Or that power corrupts?
I think the answer is yes. He has created tremendous value at SpaceX and has electrified the electric vehicle market. Two-thirds share in the US
create a tremendous value.
But to your earlier point, when we have a private citizen who is dictating battlefield communications in what could ultimately digress to a nuclear
confrontation, it feels as if that, you know see above power corrupts and absolute power absolutely corrupts is kicking in.
QUEST: And yet, to a large extent that we created, we were very glad -- I say we, I mean, you know, we were very glad when he did put this in
place, when commonsense might have said from the EU and the US, well, hang on, he is doing this, but we need to pay the bill because he who pays the
piper calls the tune.
GALLOWAY: Yes, I think that's the correct point here. I think when you tell a 50-something year old man he is Jesus Christ, he is inclined to believe
you and thinks that he should get in the middle of the highest levels of the most important conversations.
And the Department of Defense, I think as egg on its face here to put ourselves in a position where an individual who is not elected doesn't
answer to anyone, including even his own Board can make these types of decisions unilaterally based on his blood sugar level.
I mean, we're literally in a situation -- imagine the CEO of Northrop Grumman, saying "I'm worried about nuclear confrontation. I'm turning off
my submarines." I mean, we've never been in this position before. This is a dangerous position, and I would -- I think, to your point, I would argue
the culpable party here is you and me, Richard. We need to vote for leaders that ensure this kind of thing doesn't happen.
QUEST: I was pretty astonished when I saw his statement to the market that he would lay off 75 percent of the workers. That might be his
strategy, but if I was working, if I'm one of the thousands of people who work for Twitter, I don't think I'd like to know that -- it just seemed
very unfair, very brutal to make such a statement and leave people seriously concerned about the future of their jobs.
[15:25:10]
GALLOWAY: Well, distinctive immorality here, I think in capitalism, and as sometimes you have a difficult time finding moral clarity, I would just
argue it's plain dumb. I've served on the Board of Directors of several public companies, started companies.
I have never seen a CEO signal that he or she is about to lay off 75 percent of the staff, because Richard, what effectively happens is, is it
the 25 percent of the people you want to keep are the first ones to leave, because they have the most options and they don't want to stick around for
Elon Musk's version of Russian roulette or the Hunger Games.
This just -- it makes absolutely no sense that he would signal this even if it's true.
QUEST: Do you think this deal goes ahead? I mean, I was reading an interesting article about the Judge in the Delaware Court. The Chancellor
of the Delaware Court who is standing no nonsense in all of this, but we are getting to the point where a check is going to have to be written and
this deal either happens, or it doesn't.
What would you think?
GALLOWAY: I think it closes. I think Elon Musk is on the Green Mile on day one, executing what will be the second worst acquisition in history. You
mentioned SNAP.
SNAP, Meta -- all down 40 to 60 percent since Elon Musk started acquiring shares in March, meaning that the natural level of Twitter should be around
10 to 15 bucks and he is showing up with $54.20.
So on day one, that $33 billion in equity as to come up with is, is eviscerated. But I think everybody, the Chancery Court, contract law, I
think everyone is fed up here and he does not want to go under deposition in Court. So, he is going to have to close on this thing reluctantly.
This closes, and the moment it closes, Richard, it becomes one of the worst acquisitions in history.
QUEST: You said it was the second worst, which is the worst.
GALLOWAY: Well, you're going to like this. AOL's acquisition of Time Warner.
QUEST: I was there. I was there. Not working for the company at the time, but I was in the room when Steve Case and Gerald Levin and all of
them. And you'll remember this, Scott. They looked at those of us who questioned the deal, as if we were some innocents who clearly didn't
understand the great architecture of scheme of it.
We clearly were too naive.
GALLOWAY: Yes, well, you get the same sort of response as we did six months ago when people were questioning crypto, or even now trying and question
the value of Tesla, which is an automobile company that trades at a greater valuation than the next five biggest automobiles combined. People just look
at you accuse you of being a Boomer and say, "You don't get it."
But yes, call me a Boomer. This thing -- this acquisition makes absolutely no sense.
QUEST: Boomer Galloway, thank you for joining us. Well, you said, call you're a Boomer. I think I'm in the same category. I think I'm -- good to
talk to you, sir. Have a lovely weekend.
GALLOWAY: That's right.
QUEST: Thank you.
GALLOWAY: In a moment, well, we as you know, I was in Istanbul for the last few days on assignment. I was meeting the Chairman of Turkish Airlines
amongst others.
He told me their investments in cargo are paying off and helping fuel financial records for the company.
You'll hear it after the break.
QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[15:31:25]
QUEST: Good evening. I'm Richard Quest in London. QUEST MEANS BUSINESS continues. We've got a great deal more for you. You're going to hear from
the chairman of Turkish Airlines who tells me how he's hoping to double capacity, double in the next 10 years.
And Britain's looking to move on after chaotic 45 days in politics. Liz Truss's short reign may have lasting damage to the reputation of the
company. All of that after the news headlines because this is CNN and on this network the news always comes first.
Donald Trump's former adviser Steve Bannon was sentenced to four months in prison for contempt of Congress. Bannon defied a congressional subpoena
from the committee investigating the U.S. Capitol riot. January 6 Committee alleges Trump incited the riot, Bannon won't serve his sentence while his
appeal is underway. The committee says it's now sent a subpoena to the former president himself ordering Mr. Trump to turn over certain documents
by November the 4th.
And it also wants him to sit for a deposition around November the 14th. It's unclear whether the former president is going to comply.
Russia and Ukraine are accusing each other of planning to destroy a critical dam in Ukraine's Kherson region. Its destruction would unleash
massive flooding in a region. Russia now claims as its own. Ukraine's President Zelenskyy says Russia would respond by blaming Kyiv.
The Election Commission of Pakistan has banned the former Prime Minister Imran Khan from holding office for five years. It says Khan made full
statements on gifts received from the leaders of Saudi Arabia and Dubai. This is illegal and the Pakistan's constitution, the move could add to the
political tensions in the country.
You know, of course, I was in Istanbul over the last few days and I spent time looking at Turkish Airlines, meeting the chairman who says his company
is planning to double capacity over the next 10 years. And one of the biggest problems is the current shortage of aircraft. I spoke to Chairman
Ahmet Bolat earlier this week. He said Turkish Airlines investments in cargo as well as the types of passengers the airlines chasing.
(BEGIN VIDEOTAPE)
AHMET BOLAT, CHAIRMAN, TURKISH AIRLINES: I'm not really after transit passengers. If a transit passengers brings $100 to Turkey, a point to point
passengers coming to Turkey brings $1,000. I'm just talking about relative in the quantities. And if this passenger takes health services or makes a
tourism like golf tourism, then the contribution goes to 3000. So I'm after 3000 not $100. But of course there will be always seats for transit
passengers.
QUEST: You don't -- you see, I do wonder whether that's going to be sort of --
BOLAT: We will continue.
QUEST: A mixed message between a point to point to Turkey --
BOLAT: Exactly.
QUEST: Versus a --
BOLAT: Exactly. Look, we have a capacity problem. Right now I don't have enough aircraft. I'm after -- I'm in the market for more aircraft. But if
there is not much capacity of course you have to sell these capacities at the highest valuable bits.
[15:35:09]
So -- but there will always seats for connecting passengers, for sure. We'd like to connect people. This gives our strength, you see. And if you
remember, we have a programs, which -- for the passengers, connecting passengers asking them stay in Istanbul for one day from our pocket. They
give you the hotel, they give you the meal. See the Istanbul and make your visit to Istanbul as a direct flight.
So with this way, Richard, this year, one million American visited Turkey. Our goal is to double this as Turkish Airlines this year we are going to
bring $14 billion to Turkish economy as a dollar. I'm not talking about domestics and also we have 75,000 employees working for Turkish Airlines.
So, Turkish airline is a big parameter in Turkish economy in Turkish exports.
QUEST: So where are we?
BOLAT: So we are here in the control area and we are controlling all the equipments and all the cargoes with the dogs. And for the exclusive, this
is for exclusive. And --
QUEST: Wow.
BOLAT: Of course, you can see that we are receiving cargoes from all over the world.
QUEST: Coming back to this question. During the pandemic, cargo saved many airlines.
BOLAT: Yes.
QUEST: I mean, the amount of cargo, the freight rates that could be charged. So --
BOLAT: But Richard, what's happening, this facility was designed and started to be built five years ago, same time like the airport. So --- but
it was opened last -- this year. So what I'm saying, actually Turkish was ready actually for this type of events.
QUEST: But one thing I do know is that cargo is now extremely competitive.
BOLAT: Exactly.
QUEST: Emirates, Qatar, yourselves.
BOLAT: Exactly.
QUEST: The big three groups in Europe. They're all doing cargo.
BOLAT: Right.
QUEST: So what's going to be the fighting ground? Is it going to be price? Is it going to be destinations?
(CROSSTALK)
BOLAT: Of course, price always will be the fighting area, of course, because there will be additional capacity is coming. Nobody guarantees that
this is not going to go same. Of course, price will be and also the quality. We have here pharmaceutical cargo division. We have here
valuables, we can provide all kinds of high price products.
QUEST: You also have the job though of working out where to position the airline.
BOLAT: Right.
QUEST: It's a huge airline that some would say doesn't fall its -- doesn't punch its full weight --
BOLAT: Right.
QUEST: -- yet. Would you -- so what are you going to do there?
BOLAT: Turkish Airline in its location. Also in its network, we believe that it could go double the capacity in 10 years. This is my vision
actually.
QUEST: Who's your biggest -- I was going to say threat but I meant competitor. Have you look at them all? Who's -- who do you most worry
about?
BOLAT: In fact, we don't consider the airlines air as competitor. If you look at it with some of them. We have the codeshare, it's our complementing
airlines.
QUEST: Yes.
BOLAT: Now here just mentioning about Gulf carriers. And I always say that as long as they bring passengers to Turkey, for visiting Turkey, they are
all welcome. So for that reason, when the government asked us what is our opinion, I always tell -- told them -- I always told them if they are going
to bring passengers to Trabzon, Antalya, Izmir, Ankara, they are all welcome. But if they are going to come just for our transit passengers,
then that's a little issue.
So we are talking with them, how we can cooperate. It's time for cooperation, Richard. Now if the manufacturers are not producing enough
aircraft, then why not use the capacity of your other airlines, capacities with codeshares.
(END VIDEOTAPE)
QUEST: An interesting philosophy. The chairman of Turkish. In the interest of full transparency, Turkish Airlines is the sponsor of my other CNN
program, Quest's World of Wonder. Ahead going into the world's most remote caves for a glimpse of the future.
[15:40:04]
Unusual mission to unlock the secrets.
(COMMERCIAL BREAK)
QUEST: Going to have to be a genius to know that caves are dark, wet, and potentially dangerous when you start exploring them. And yet, for one
veteran explorer, they are repositories of geological secrets. Those secrets, valuable clues about the Earth's past. So today on Call to Earth,
Rolex Awards, laureate Gina Mosley takes us underground to see how a million-year-old mineral deposits will provide insights into the future
impacts of climate change.
(BEGIN VIDEOTAPE)
GINA MOSLEY, 2021 ROLEX AWARDS LAUREATE (voice over): Caves are really unique places that are very well connected to the surface but also well
protected from the surface. So, this means they can still record how the climate has changed in the past over millions of years.
I think for me, the best part of being in a cave is getting to see this unique world that most people don't get to see.
I'm Gina Mosley and I'm a professor of Paleoclimatology at the University of Innsbruck.
I first started caving when I was about 12 years old. I just thought this is such a cool sport. And then we went underground into this cave. I was
just absolutely hooked from that first moment that adventure of like crawling through little tight passages and find out what's around the next
corner. But also as time went by, I learned that you could do science in caves. I learned that you could be the first person to see a part of this
planet that nobody has ever seen.
Paleoclimatology is the study of climate change in the past. I'm looking for samples of calcites in the cave. So this is a mineral deposit that
forms from water that enters a cave.
[15:45:03]
And this brings with a chemical signature of what the climate in the environment is doing on the surface. And this water deposits layer by
layer, these layers of calcite. And a thin sheet of water like this will lead to a formation that we find in a case called flowstone. And this is a
very nice example of the flowstone here on the floor. And then I take a sample of that to find out when. In the past the climate has been warmer
and wetter there. And that can inform us about what we could expect to happen in the future.
I've led three expeditions to Greenland so far, we go in the summer. So that means it's 24-hour daylight. The conditions are fairly rudimentary.
It's like being on Mars in some ways because this is a polar desert. Each expedition takes several years to prepare for. The next expedition to
Greenland is in 2023. I'm taking the team to the very north of Greenland, but we don't know what we'll find which makes it kind of high risk but high
gain. It also makes that exciting.
I collected a whole bunch of flowstones from Northeast Greenland. And these all formed at times in the past when it was warmer and wetter than today,
I've got some dates that are like 1-1/2 million years old on some samples. And I can analyze the chemistry in each layer. It's a bit like looking at
tree rings. Each layer tells a different story and a different history about what the climate and the environment was doing at the time.
So climate modelers might take our results from Greenland and implement that into a part of their climate model. So we can start to build up a
picture of what we could expect to happen in the future.
Ultimately, climate change doesn't happen in one region and not affects anywhere else. With the global warming with each incremental increase in
temperature, the effects of that get more and more severe. Most of the glaciers in the European Alps, we might save a few or small parts of them,
but ultimately, they're gone. So we have to -- we have to think about what we can save.
I do have a lot of hope because look at the way we all responded to the pandemic the last few years. So we can't do it, but we kind of be quick.
(END VIDEOTAPE)
QUEST: You can let us know what you're doing. To answer the call use the #CalltoEarth.
(COMMERCIAL BREAK)
[15:50:13]
QUEST: Now, whoever replaces Liz Truss. Rebuilding the U.K.'s global reputation, perhaps job two, maybe three, maybe one. Soon after, the -- she
resigned a mountain Emmanuel Macron and the Irish Prime Minister Michael Martin both said they hoped the U.K. would find stability. The Egyptian
delegation at the IMF in Washington joked there pounded brighter prospects on Britain's and Greece's P.M. told Sunday Times in the U.K.
If the U.K. needed experience dealing with the IMF, Athens was there to help. Sir Peter Westmacott is with me. Served as Britain's ambassador to
Turkey, France and the United States. Now the chairman of TKO capital, U.K. Peter, laughingstock.
PETER WESTMACOTT, FORMER BRITISH AMBASSADOR TO TURKEY, FRANCE AND U.S.: Well, there was even a meme of President Erdogan standing in front of the
door of 10 Downing Street having hung a big wreath on the door saying RIP Elizabeth Truss. So, we are a bit of a laughingstock. But it's not just
that. I think there are a lot of friends around the world. I've had messages. So in so many other people from lots of different countries
saying, first of all, what on earth has happened to your democracy?
And secondly, we really don't need the U.K. economy to start imploding because the rest of us will catch a nasty code as well. So I think it's --
I think it's a very unfortunate place to be. I think President Macron, understandably, saying we hope the Brits come out of it well, but he has
risen, had to react with great graciousness, just some pretty unpleasant comments from both Boris Johnson and Liz Truss in recent months. So good
for the French, I think in trying to be supportive. But it's a problem.
QUEST: So when you look at it, of course, it can be repaired and people forget. Will foreigners overseas -- will let foreign governments look at
this as an aberration that, you know, a moment of madness, as somebody once said?
WESTMACOTT: I think they will see there's a bit of a moment of madness. How can the United Kingdom mother of democracies have a prime minister who lost
just six weeks? And how could it even be thinking of bringing one back who's just been drummed out in disgrace or having been accused of lying and
all sorts of other bad behavior. That I think could be a problem for our friends around the world who wouldn't ever great fans actually of Boris
Johnson because he played to a domestic gallery.
QUEST: But what about the core issue, which I think in many ways is perhaps more significant, which is the Truss and Kwarteng thought that they could
do this policy, which was so -- I mean, Mark Carney on this program earlier was saying mistakes will be punished.
WESTMACOTT: I think what we're dealing with is a moment when the libertarian right-wing, low tax, low regulation branch of Brexitism ran up
against the buffers of economic reality. This was not actually the Brexit that was originally sold to the United Kingdom. But they went far over to
the right, much further than Boris Johnson had done and thought they could get away with that sort of a policy without stopping to think the damage
that the markets would do to them.
So, I think it's a -- it's a degree of unrealism, pretty far right, as I say, heavy deregulation, low tax type of libertarianism which isn't going
to work in the U.K. So we now have to see what does the next prime minister do to put it right.
QUEST: When I think about, you know, the old -- well, the old days really, the traditional cables that you would send from (INAUDIBLE)
WESTMACOTT: Yes.
QUEST: I'm sure it's not quite as he stood right them, I suppose, Ambassadors, what would you have said if you'd been -- if you'd been in
Ankara or in Washington and you had to report back to Whitehall, what you've said, they are laughing at us? This is ridiculous.
WESTMACOTT: Well, you -- I mean, in my judgment, your job is to tell a bit of truth to power. I used to write stuff for very limited distribution to
prime minister and others when I was in Washington or in Paris, saying we've got this problem. It's not -- it was never this bad. But saying, you
know, the morning after an election, for example, here are the problems we've got with this country.
Here's what you got to do to put it right because the job of an ambassador abroad is to defend the national interest. So you do have to give some
unwelcome advice. And the first thing is, I think people have got to be convinced that the United Kingdom is now serious about economic management
and he's going to reintroduce stability and responsibility.
QUEST: OK. So that suggests and you can plead the fifth if you -- if you wish. That would suggest Rishi Sunak as a -- as the leader. Boris Johnson
comes with his own baggage. Penny Mordaunt not probably experienced on the world stage sufficiently to be able to do this. Rishi Sunak safe pair of
hands.
WESTMACOTT: Yes. Penny Mordaunt did a great job standing in for the prime minister House of Commons the other day.
QUEST: Yes.
(CROSSTALK)
QUEST: (INAUDIBLE)
WESTMACOTT: But she has barely got 20 M.P.s with her, whereas Rishi Sunak has got almost 80 and Boris is in the 40s, we're told. Only one person has
declared so far as you know, which of course is Penny Mordaunt. But I think you're right. Logically, if we're talking about stabilizing the economy and
perceptions of the U.K. it's Rishi but bizarrely there are people in the Conservative Party who still think Boris is the winner.
[15:55:06]
QUEST: OK. So what I love about ambassadors is that you are the intersection of politics and economics and the discretion that comes with
it. So, in your discreet way, how much of a shambles is this?
WESTMACOTT: In my discreet way, this is a real shambles, it is a shambles for our democracy, because four times in a row we've had a new prime
minister hasn't been chosen by the British people. That's not very good for our reputation. Economically, we are a mess, sterling has gone down. And
we've got a number of other economic difficulties, some of which are not the fault of the British government but some of which demonstrably are.
And I think we are in a bad place. So we really have got to get our act together. The rest of the world is looking at us with a mixture of some
sympathy, some disbelief, some shot and froideur, some kind of secret pressure. But actually our friends do not wish us ill. Our enemies are
rubbing their hands with glee.
QUEST: (INAUDIBLE) thank you very much indeed.
WESTMACOTT: Thank you, Richard.
QUEST: Good to have you (INAUDIBLE)
WESTMACOTT: Good to see you.
QUEST: I get to show you what's happening on Wall Street. Last few moments of trade. The Dow -- oh, look at that. Go down. It's higher by three, four
percent on the week. Also Journal says Fed officials are ready to raise interest rates more slowly. We will wait and see. We'll also take our
profitable moment after the break. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. So, Peter talks of the schadenfreude of foreign governments looking at the U.K. mess. But leaders overseas will
also be looking at it and thinking now what can I learn from that? Because the big lesson is, as Mark Carney said on this program, tonight, mistakes
will be punished. The markets will do the nasty business of punishing errant governments who have policies that don't add up.
And that's the key part. A policy that is so far extreme one way or the other, left or right, that the numbers don't add up. There's a lack of
transparency and then it's been railroaded through without any form of proper consideration. That's the message I think that comes from the fiasco
of the Liz Truss mini budget. You can't freelance and expect to get away with it, not in this day of the connected world. So mistakes that will be
punished it If you decide to go too far out.
[16:00:02]
That's thing to remember. And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Whatever you're up to in the weekend ahead, I hope
it's profitable. Have a good weekend.
END
