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Quest Means Business

Zelenskyy: Kherson Is Ours As Russian Forces Retreat; Cryptocurrency Facing 2008-Style Crisis, Warns Binance CEO; Survey: Americans Feeling Worse About Economy; Biden, Xi Jinping Set To Meet Face-To-Face At G20; Benjamin Netanyahu To Be Invited To Form Israel Government; Germany Delays Plans To Phase Out Nuclear Power. Aired 3-4p ET

Aired November 11, 2022 - 15:00   ET

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

[15:00:12]

RICHARD QUEST, CNN INTERNATIONAL HOST: Last day of the week, last hour of trading, and we are off to the races.

The S&P 500 having its best week since June, it is over 4,000. The NASDAQ is up over two percent. The Dow is up as you can see, it is green-o-rama

today.

The main events of the day are not market related, but they are certainly of importance. Celebrating on the streets of Kherson. Ukrainian troops have

reentered the city after a major Russian withdrawal.

A top crypto CEO is warning regulators are pounding at the gates after a leading exchange collapses.

We are live tonight in New York, end of the week, Friday, November the 11th. I am Richard Quest, and I mean business at the end of the week.

Good evening.

Tonight, Ukraine is celebrating the liberation of Kherson, Russia's biggest military setback since the war began. President Zelenskyy posted this video

on Telegram, the simple caption says, "Our Kherson is ours." Here was the scene earlier.

[VIDEO CLIP PLAYS]

QUEST: The sense of jubilation is clear and palpable as residents welcomed the arrival of Ukrainian troops. Celebrations, too, in the Ukrainian

capital. The thinking, this could be a hope of a turning point in the war.

Kherson was the only regional capital that Russia had been able to capture, and Russian forces have now withdrawn across the Dnipro River. Ukraine has

been retaking the rest of the region. Its military says dozens of villages have been liberated in the past 24 hours.

And as the liberation continues, we are getting a sense of the damage in the area. Satellite imagery shows a critical dam's missing section of a

bridge, it's unclear what caused the collapse.

Nic Robertson is in the City of Kryvyi Rih, north of Kherson City.

Nic, before you give me the sort of the nuts and bolts of where we are in the battle or what happens next, just spend a moment or two telling me what

it felt like in Kherson or nearby.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: It was very emotional to see people out reliving the horrors of what they had experience, of

being able to sort of see relatives who they didn't know if those relatives had survived, so there were people in tears, people were waving at us as we

drove into the town, the troops -- Ukrainian troops had only arrived less than 24 hours previously.

So, there was a real sense in this town, and what we felt was this really felt like that liberation moment where people are absolutely jubilant about

having survived, about getting their government back, about having gotten rid of the Russian forces.

But at the same time, you know, coming to terms with that new sense of freedom, not knowing what it means and who is actually going to switch on

the electricity for them, or the gas, or the water, all of which are cut off at the moment.

So while it was very emotional to watch people there going through these emotions and to hear some of the terrible things that they'd been through.

A young 15-year-old girl had been taken away by Russian troops. She thought she was going to be raped. A pensioner an old lady who I spoke with who

said the Russian troops have threatened to kill her and smash her brains out.

So people really, when we saw them, you know, these mixed emotions.

QUEST: If we look at the map that I was just showing a moment ago, we can see exactly where this is, the importance of the Dnipro River, which runs

north to south as you can see there. Now, we can see Kherson on that, we can see the region.

The Russians are now on the eastern side of the Dnipro River, but that creates -- that river is both, I suppose a safety net in a sense for the

Western side, but it is going to be very difficult if they want to continue to push Russia forward.

ROBERTSON: And that seems to be the calculation that Russia has taken at the moment. They bit off more than they could chew. They've recognized

that. They've had huge losses before they recognized that and the Generals seem to have come to the conclusion that that strategic river is their best

line of defense to keep the territory that they want.

[15:05:06]

And I think when you look at that map, it is that bit of territory that's Kherson region itself. But over the other side of the Dnipro River, the

East side of the river where the Russian troops have gone, if you look at that, just South of that is Crimea, and that is everything you sort of need

to know.

Putin wants Crimea to be attached by land to Russia, and that bit of territory on the other side, the East bank of the river is going to be

vital, because if the Ukrainians do manage to cross the river, they begin to threaten that territory.

And actually, they are across the river further North, much further North, and it will be a long push South, but that's what the Ukrainians intend to

do. By hook or by crook, by guile, by weaponry, by determination, by the fact that this is their homeland, they intend to take it back.

For now, Russia is sort of safely on the other side of the river, but you know, the other side of winter, things are going to begin to look

different, again, I think.

QUEST: The one thing I am trying to fathom and get through is, in your view, how far has the Western superior armaments shifted? Now that they've

got these extra firepower, how has that shifted the balance of power?

ROBERTSON: I think I can sum this up very simply and it is an oversimplification, but remember those HIMARS rockets that the Ukrainians

got from the United States, they were very accurate, multi-barrel rocket launcher, and they were able to hit quite literally hit with pinpoint

accuracy, the main bridge that supplied Kherson with food and military supplies and ammunition for the troops.

And what did the Russians say when they were leaving? Quite literally, the troops who were leaving, and the military commander said, "We can't

resupply our troops. It's too tenuous. It's too difficult."

So with those weapons, the Ukrainians were able to essentially defeat the Russians in Kherson, they'd gone too far, a bridge too far.

The other piece of what I'm oversimplifying here is the air defense piece, and that air defense supply is what Ukrainians now need to make sure that

their cities are safe. As you can see, we're in darkness right now. It's another electricity blackout here in Kryvyi Rih. They're happening all over

the country.

The air defense systems that are here are good. They're not good enough to stop the Russian missiles coming in and targeting the electricity

infrastructure. Essentially, it is a weak point in Ukraine's defenses and a weak point politically, and a tough thing for the people here to weather.

So, I think that's how you can sort of, in simple terms, understand what the weapons do.

QUEST: Nic Robertson, who is in Kryvyi Rih, thank you.

Cryptocurrencies facing its 2008-style global financial crisis as a regulators crack down on the way, that's the warning from the boss of the

world's leading digital currency exchange. Binance chief executive, Changpeng Zhao just known as CZ has made the grim assessment amidst the

stunning implosion of the rival, FTX.

Binance was a key player in this tempestuous drama, pulling out of a deal to rescue FTX at the last moment. In doing so, by pulling out, paving the

way for its collapse, which happened today as FTX declared bankruptcy.

Its 30-year old boss, Sam Bankman-Fried has resigned. He has apologized to users saying, "I effed up."

So, what happened?

FTX had been valued at $32 billion at the start of the year. Its demise took a week. There was a surge in customer withdrawals and that sparked a

liquidity crunch. And after spending much of the so-called crypto winter this year, saving other firms, no one came to its rescue. Its collapse has

shaken the crypto world. Bitcoin is down 20 percent in a week.

Matt Egan is in New York.

So let's take this apart. The filing for bankruptcy means what? Does it mean the end? Does it mean somebody else is going to try and restructure?

There will still be some assets within FTX.

MATT EGAN, CNN REPORTER: Richard, we don't know exactly what it means. It's a Chapter 11 filing. So, it does mean they want to restructure and

that is what Sam Bankman-Fried has indicated, saying that he thinks that there is still a potential future for this firm.

But we just have to back up for a second to talk about just how stunning this implosion is. I mean, it is really one of the most staggering things

that I've seen in my career, not just because of the speed that it happened, which is mind boggling, right? It didn't happen in months or

weeks, but really just days, but also because of who was involved here.

[15:10:03]

I mean, FTX is not just some you know fly-by-night organization, it is one of the leading crypto exchanges or at least it was and Sam Bankman-Fried

has really been one of the faces of crypto. I mean, he was the white knight who swooped in to rescue others and now, he has become so toxic that he

can't get a bail out of his own.

FTX is backed by some of the biggest, most sophisticated investors, BlackRock and Sequoia. It had endorsement deals with Tom Brady, Gisele,

Steph Curry, its logo is splashed on the home of the NBA's Miami Heat. And now, it has filed for bankruptcy, which you know, means that investors have

lost a lot of money. The investors in FTX are likely getting wiped out, the employees may be out of a job. And unfortunately, some of the users through

no fault of their own, they may be out of a lot of money, or at least unable to access it anytime soon.

Let me read you a statement from Sam Bankman-Fried, who said on Twitter today, after the finally he said: "I'm really sorry, again, that we ended

up here. Hopefully things can find a way to recover. Hopefully this can bring some amount of transparency, trust, and governance to them.

Ultimately, hopefully, it can be better for customers."

Again, Richard just a stunning collapse of one of the biggest players in crypto.

QUEST: Okay. But the issue here, as I understand it, is that they had their own cryptocurrency. They weren't just like a vault for others. They

had their own cryptocurrency, which they'd leveraged, and as the value came down, people tried to pull that currency out and that's when it all fell

apart.

EGAN: I think that's generally the understanding here. I mean, they did face a sort of run on the bank like moment here, and it came after there

was a media report out last week that raised some questions about a sister crypto hedge fund within the FTX Empire.

And that report showed that that balance sheet of the hedge fund really owned a lot of the FTX token. And you know, FTX created this token. It's

not really -- it wasn't worth anything except for the fact that the market said it was worth something.

And as people started to sell the token, it lost value. FTX faced mounting withdrawals from customers and you know, it was unable to meet those

requests for withdrawals. They tried to find funding from elsewhere. They weren't able to find it.

You know, and now regulators are swirling. "The Wall Street Journal" is reporting the both the SEC and the US Justice Department are investigating

FTX. The SEC says that they don't confirm or deny the existence of investigations and DOJ declined to comment. But you've got to think that

the next shoe to fall here is going to be on the regulatory and/or the law enforcement side as they look to try to determine whether or not there was

any criminality here that led to this collapse.

QUEST: Matt Egan, thank you. We're going to develop that thought a bit more.

Regulators around the world have been cracking down on FTX amid concerns of exactly this, particularly the improper use of customers' money.

In April of this year, I spoke to the head of Binance, Changpeng Zhao, about how cryptocurrency exchanges operate.

(BEGIN VIDEO CLIP)

CHANGPENG ZHAO, CEO, BINANCE: I think basically the free market on the leverage part, the free market takes care of itself. When you have -- so

crypto is very open. People can use any exchange they want to use globally.

Some of the exchanges have offered high leverage for futures products, but only a small number of people use the futures products.

(END VIDEO CLIP)

QUEST: Professor John Coffee is a Law Professor at Columbia University, former member of the SEC Advisory Committee, and the Professor is with me

now from New Jersey.

Part of me thinks that people like you are not going to be that surprised at this turn of events, having feared that all of this was just an accident

waiting to happen.

JOHN COFFEE, LAW PROFESSOR, COLUMBIA UNIVERSITY: Oh, I think there is some truth to that. Let's get to the key point that hasn't yet been

mentioned.

FTX left more than half of its customers' accounts to Automated Research. Automated Research is an affiliated firm. Both of them are owned and

controlled by Samuel Bankman-Fried. Now, that's what the law calls a related-party transaction. You're lending to yourself, and no one was there

to supervise who is independent.

We have related-party transactions, but independent directors and independent auditors supervise them. There was no one independent, there

was no oversight. You lent your customers money to a high-risk hedge fund, which you also owned because it needed funds quickly. And in that kind of

world, I think you have to expect there are going to be losses.

[15:15:07]

You need true corporate governance that will control it, but this was a privately held firm, it did not have an independent board. We still don't

know who its auditor is and it didn't publish any financial statements. In that world, it is just too inviting.

If you need money fast, borrow it from your customers, and they can't do anything about it. The result was a collapse.

QUEST: Where would the regulator intervene here? At what point in that system? I mean, obviously, we're not talking about deposit insurance, or

maybe we are, but you're talking about having your own, you know, in the future, what would the regulator do?

COFFEE: I think the first thing you would try to do is get the numbers clearly visible. You'd have financial statements that were published, you'd

have auditors who will regulate it, and you'd have related-party transactions be subject to supervision of at least independent directors,

and possibly independent directors overseen by a regulator who has to approve or at least be apprised of any kind of major transaction with

yourself, with an affiliate that you have an incentive to benefit.

QUEST: John, what would you say to -- and I can hear them -- I can hear some of the people who are in this industry in crypto and DFC, saying, "Oh,

for goodness sake, listen to old John Coffee. Here he is bashing on again, about regulators, transparency, how very 1970s of you."

COFFEE: This problem goes back hundreds of years. If you can lend money - - if you can lend your customers' money to yourself, you're not going to get fair, honest terms. You're going to get favoritism. And in desperation,

when you really need that money, you will take it all. And more than half of FTX's customers funds now appear to have been lent to a high-risk hedge

fund owned by Bankman-Fried. That's the kind of transaction that makes it highly predictable, there is going to be a financial fiasco.

QUEST: The run on the bank, which again, is as old as the bank itself, the run on the bank, which we saw here. The Fed has said that so far, in

its last report on this, the Fed Governor responsible said that she didn't think that there was systemic risk in the system from crypto. I'm guessing

that they are very glad, because if there is systemic risk, this is exactly the sort of thing that brings it all down.

COFFEE: Well, I agree that there is not systemic risk, meaning that these crypto firms don't really affect the banking system. This is not a Lehman

moment, because Lehman and crones like it, AIG, you know, did affect the banking system.

But we still see eight to ten billion dollars of customers' funds disappearing into a black hole with no one being aware until it was gone,

and that suggests to me that that is not a sustainable system. You're going to have to introduce what most public companies have -- independent boards,

auditors -- these are not radical new forms of innovation, new regulation, this is what every company has that has public shareholders.

This company did not have public shareholders, but they had customers and customers who probably were very surprised to find that all their funds had

been lent to a high-risk hedge firm with nothing in the way of real security pledge.

QUEST: Professor, always good to hear your views on these. I'm grateful, sir, thank you.

And so we come to the end of a week where the S&P is headed for its best performance since June. The Dow is a little bit unhappy today. The S&P is -

- well, it is giving back some of the gains, but this is to be expected, as we are in the last hour of trade, you're going to get books squaring before

the end of the week.

American consumers though, the question of the optimism, Ken Fisher is next with me to make sense of what's happening in the markets.

(COMMERCIAL BREAK)

[15:21:57]

QUEST: Americans are feeling worse about the US economy and its performance. New data from the University of Michigan shows consumer

sentiment fell in November. It comes as punishing rate rises, and high inflation is continuing to weigh hard.

The markets are telling a different story though. The S&P is on track for its best week since June. It's given back some of its gains, but it is

still up sharply. The Dow is a bit all over the place as you can see. The NASDAQ is having the best of it as we head towards the close.

Ken Fisher of Fisher Investments, the Founder and Chairman, my word, Ken, from your vantage point in Texas, do you see sentiment and by that, I don't

say whether we've hit the bottom or the top or whatever. Do you see sentiment having changed in the market yet?

KEN FISHER, FOUNDER AND CHAIRMAN, FISHER INVESTMENTS: So first, thanks for having me back on, Richard. You do a great job and you ask great

questions. But to that question, let me just say that you shouldn't think of it that way.

Normally sentiment lags the stock market, and around bottoms, market rises while people have what I've labeled for years, the pessimism of disbelief,

which is they just don't believe it's real. They don't believe it can be real. And we've actually had around the world a rising market for one day

less than a month now and people keep dissing it.

And in reality, you don't expect the sentiment to improve for quite some time. They are reacting to the down moves from before, and of course, all

of the news that people talk about bothers people, whether it's inflation, fear of recession, all kinds of other things, whether it would be something

terrible is going to happen. Look at the commentary today about the meeting between China and Biden on Monday, and mostly that's cast in negative

tones.

The reality of all of that is that is just, sometimes patience is a virtue.

QUEST: So with that in mind, and I'm looking at a chart now that shows the Dow over the past month, it is up about 16 percent. So that is quite a

sizable gain. If we take that as our starting point and I'm always aware that we're never giving people advice on what they should do with their

money on this program.

But I take what you say, as being an indication that one should be thinking of the war chest, being ready to start putting some firepower.

FISHER: Let me say what I've been saying: I don't care if you're in Britain, I don't care if you're on the continent. I don't care if you're in

most of Asia, and particularly in the United States of America. The fact is the quarter that begins October 1st of a US Midterm Election and the

subsequent two quarters, those three quarters, those nine months are the most consistently profitable period in US history and world history in no

matter how you measure it.

In Britain for example, that is up a little over 20 percent, that nine months on average; never been negative. In the US, only been negative, last

time as World War Two was starting, once before, that is the Great Depression was starting; otherwise always positive, 20 percent average

returns. A little bit less on the continent.

[15:25:19]

The fact is, political risk aversion falls with the Midterm Elections, and from that, as political risk aversion falls, sentiment does start to rise

and improve because political risk aversion is an important fear. People hate losses more than they love gains and when they see big controversial

legislation, it scares them.

This thing which I have for many years, called a Midterm Miracle is working pretty well over the course of October and November so far, and I think

people should expect it to continue as such.

QUEST: Now, if that is the case, what about the Fed raising rates again in December, whether it is half or three quarters, and maybe one or two

rate rises in the New Year. And I mean, look, today, we believe that UK went into recession. We've got the GDP numbers.

It's a moot point whether the US is or will be, you know, by mid next year in recession. Most people will have said that's likely to happen. But you

say that these other events won't necessarily queer the pitch of the Midterm Miracle.

FISHER: I'm going to tell you: Recession, no recession, regional wars, like the Vietnam War, all kinds of things, Midterm Miracles work. Second,

I'm going to say Britain is having its own problems, but I don't believe there's a global recession here. First, you can't see it on the continent

yet. Secondly, I'm just going to say that when global loan growth is as strong as it has been, as of this month, which is low double digits around

the world, you do not ever have a history of global recession.

The fact is, the Fed raising rates in this environment for two reasons does not actually cause constriction. It does not cause recession. The fact is,

it does impact some people to the benefit of other people, but it does not overall cause a problem.

Normally in days of old, the Fed had a high cost of his loan base. Now, it has an almost zero cost of its loan base. And secondarily, they had reserve

requirements that they eliminated in 2020.

Now, when the Fed raises rates, they actually increase the spread between the banks' almost zero cost of loan base and the rate that they put the

loan out at and it makes the banks more eager to lend.

QUEST: We will talk more about this. It's fascinating. I'm so glad you came to join us today.

Thank you, sir. From Dallas in Texas.

FISHER: Thanks for having me on, Richard.

QUEST: Thank you.

The 11th of the 11th and talk of Chapter 11. Elon Musk suggests Twitter could face bankruptcy.

(COMMERCIAL BREAK)

[15:36:09]

QUEST: Hello, I'm Richard Quest. Together we have a lot more QUEST MEANS BUSINESS.

Elon Musk is reportedly warning stuff that took quitter could be on the road to bankruptcy. And new figures show the U.K. may already have dipped

into recession. Europe could soon follow. We'll get to all of this only after the news headlines because this is CNN and on this network the news

always comes first.

President Biden and President Xi Jinping have agreed to meet face to face at the G20 Summit in Bali. It will be the leaders' first in-person meetings

since President Biden's election. He has rarely left China since the start of the pandemic.

Israeli president says Benjamin Netanyahu will be invited on Sunday to form a new government. Voters gave Netanyahu's Likud Party and its coalition

partners a Knesset majority last week with the invitation Netanyahu was set to become Israel's prime minister for a record sixth time.

Germany will continue to generate nuclear power until April rather than phase it out as planned this year. Earlier today, the Bundestag voted to

let last week nuclear power stations operate through the winter to ease the energy crisis created by Russia's war in Ukraine.

Twitter employees and looking for a lifeboat as one describes the company as the Titanic. The new owner, Elon Musk, reportedly told them bankruptcy

is not out of the question. He bought the company for $44 billion. Advertisers are already pulling back and jeopardize the main source of

revenue.

CNN's Oliver Darcy is with me. So Oli, what purpose does bankruptcy serve? I mean, other than a year to restructure existing debts and loans, which

would be considerable but bearing in mind that he's already taken on huge amounts of debt and has other investors. What purposes though in

threatening this, do you think?

OLIVER DARCY, CNN SENOR MEDIA REPORTER: I'm not sure, Richard. But I think that indicates the business is not doing so well right now. Right? You have

advertisers who have fled the company, he had just suspended Twitter blew, which is his subscription service that he was hoping to make a lot of money

off of. And he had a -- suspend that because of verification issues, people using verification to pose as other people and news organizations and

entities.

So it's chaotic there. And so he warned employees that if they don't get more revenue, they could not survive this economic downturn. And then he

went on in this meeting and said that bankruptcy could be on the table. It seems like Twitter could maybe not survive. I don't know.

I read.

QUEST: I read the full transcript which you kind of showed us (INAUDIBLE) I read the full transcript of it. And I wonder when you read the transcript,

whether you think the bankruptcy reference in context makes sense. A lot -- I mean, he kept talking in that -- in that alter -- all hands meeting about

think the unthinkable, try it out. One person asked him, well, all you saying we just get on and do things that -- he said -- basically he said

yes.

I need you to think off the wall unthinkable ideas because that's the way we're going to generate new momentum.

DARCY: And that's the way Twitter or Elon Musk has run his other companies, right? And that's what he has said he wants to do at Twitter. You tweeted

to the public that he was going to try a lot of dumb stuff and some stuff will work and some stuff won't and you just get used to it basically.

[15:35:09]

But I do think, Richard, the problem here is that advertisers, they probably don't want him to try a lot of dumb stuff on the platform that

affects them.

QUEST: Oliver Darcy, thank you, sir. Have a good weekend. It's QUEST MEANS BUSINESS tonight, there are dark clouds over the big smoke as new data

suggests the U.K. is in recession. (COMMERCIAL BREAK)

QUEST: New numbers from the U.K. suggest that the country is in recession and Europe could be about to follow. U.K. GDP fell in Q3. So far is the

only G7 economy to have contracted in that period. Now the economies are far smaller than before. The European Commission is warning a recession

could begin this quarter as well. Thanks to pressure from the high inflation and rising rates. Like a Brit commission predicts the contraction

will continue into the first quarter of next year.

Paul Tucker was deputy governor of the Bank of England. His new book is called Global Discord: Values and Power and a Fractured World Order. Paul

Tucker joins me from Massachusetts. The sort of a general consensus, Paul, that the economy is in recession, the U.K. is in recession. And I guess it

really becomes have -- how deep and how long?

PAUL TUCKER, FORMER DEPUTY GOVERNOR, BANK OF ENGLAND: Yes, I think that's exactly right. And that's going to depend on how far behind the game the

Bank of England is in getting on top of inflation. They were -- they were slow to recognize it as a threat and then to ginger in starting to catch up

with it. And this is not very different from the United States. The Federal Reserve, the Bank of England up to a point the ECB have all been behind the

game.

And now risk having to push the economy into recession in order to restore price stability. It's not a great place to be, but it will be even worse if

they ignore the underlying inflationary problems.

QUEST: Where do you think we are in the tightening cycle? I know that's a bit like how long is a piece of string because you've got to wait to see

what is the effects of this -- of the very large cumulative gains we've seen so far.

[15:40:04]

TUCKER: Well, I think you've almost answered your own question. I mean, the truth is. I don't know. It's -- if one takes the Federal Reserve was

probably the best example here, they now could -- they're almost certain to make a mistake and the Bank of England as well. They could -- they could

ease off the tightening cycle. And then if they find that inflation hasn't been conquered, and is still high in a year's time, then they will really

have to put the brakes on.

Alternatively, they can push on a bit, continuing to raise rates and push the economy into recession more than they need to. And you're not going to

get an answer from me or from anybody else, including them about exactly what the right thing to do is. And this is one mistake leads to another.

They made big mistakes in 2020 and 2021. And now they are in corrective vote. And that's much more difficult.

QUEST: But your book at Global Discord: Values and Powers in a -- in a Fractured World Order. The very title tells us that the difficulties and

differences of negotiating, I mean, you know, let's face it, you've had 10 years of unrestrained monetary easing. You've had printing, you've had --

you've -- we've now got the first war in Europe for a generation plus. These geopolitical events are almost impossible for economics to cope with.

TUCKER: I think that's exactly right. We're used to economic policy, operating and under umbrella of peaceful coexistence among the great

superpowers. We've lived with that for 40 years, even before the Cold War ended. That's not where we are now. It's a tense world. In your -- in your

news item a few moments ago, news headlines, I thought the most important thing other than the kind of increasing uncertainty about Twitter was

President Biden and leader Xi having a bilateral meeting at the G20 in Indonesia.

And they've -- they have got to try and agree something like the deescalation protocols that Moscow, Washington had for years. And if they

can only do that, and remarkably, they don't have that at the moment, if they could only get to there, the world would be a slightly less dangerous

place. And I think we're getting a theme of the book is we are going to live with this contest sometimes intensely, sometimes less.

So, I think for around a century, rather like Britain and France in the 18th century, this contest or struggle will be everywhere and everything at

times that will be very dangerous and at times it will be much more relaxed. And our generation of generations to come will live through all of

that.

QUEST: Right. So what -- so what, Paul -- that's a fascinating thesis. And -- but what can we do? I mean, the way you postulate it, are we powerless

to prevent it?

TUCKER: No, but we can -- it's -- well, we're powerless to prevent the contest. We are -- we are empowered to make ourselves more resilient, but

not in an aggressive way. Let me give you a sweeping assertion that I think is vitally important. We the West cannot afford another financial crisis.

The mess in London a few weeks ago with this pension blow up and a government bond market. Imagine that had been in the United States and the

dollar markets.

This is exactly what we don't need. And whether it's regulators or economic policymakers, they need to have a long view and make sure that they

maintain stability. And yes, restore a bit of dynamism in the economy.

QUEST: Paul Tucker, very grateful that you came to us this afternoon. We will talk again. I'm delighted to have you on the program, sir. Thank you.

TUCKER: Good to be with you. Thank you.

QUEST: And that's QUEST MEANS BUSINESS for the moment. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable. Coming up

next. Connecting Africa. Have another one. It's the weekend

(COMMERCIAL BREAK)

[15:59:16]

QUEST: Hello, I'm Richard Quest. Together we have a dash to the closing bell. We're just about 45 seconds to a minute away. Markets are finishing

on a positive note. The Dow has clawed back midday losses and actually eked out a very small game. But the best of the day is over at the triple stack

on the NASDAQ. We're up nearly two percent. And the S&P still couldn't hold this 4000 but there you are. It's still the best week since June overall.

Look at the Dow 30 very quickly and you'll see a closer look. Walgreens and Boots have gained. They're up sharply. Microsoft is up. At the other end

you've got United Healthcare, Merck, Johnson and Johnson. So a lot of healthcare is at the other end of the market today. Overall, a strong

session for the week.

[16:00:02]

Have we turned the corner? We won't know for some time to come. That's the dash to the bell. I'm Richard Quest in New York. Whatever you're up to in

the weekend ahead, I hope it's profitable. The closing bell is ringing. The U.S. midterm continuing (INAUDIBLE)

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