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Quest Means Business
Biden To Take Aim At Chinese High-Tech Industries; WeWork: Substantial Doubt We Can Stay In Business; ESPN Signs &2 Billion Deal With Penn Entertainment; Blast At Industrial Plant Near Moscow Injures 50+; Women And The Economy; New Translation Screen Tested At Tokyo Train Station. Aired 3-4p ET
Aired August 09, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:29]
RICHARD QUEST, CNN INTERNATIONAL HOST: Middle of the week, and lots happening in the financial world. The markets, of course, we had a couple
of days of losses, and now we can see those losses have reversed, a little smidgen of green. We're going to go backwards and forwards. It will be
fascinating to see how the next hour progresses.
The main events of the day that have been pushing all this forward. President Biden is set to introduce new limits on US investments with
China. The aim is to protect national security.
WeWork, the tech darling of workplace warns it has substantial doubts that WeWork will survive.
And technology could solve one of travel's greatest challenges, translation. Tourists in Tokyo can now ask for directions in 12 languages.
Now that is progress.
Live from New York, midweek, Wednesday, August 9th, my word, where do the days go?
I'm Richard Quest, and I mean business.
Good evening.
We start tonight, with the US president taking aim at China's high tech development despite recent efforts of administrations to stabilize
relations with Beijing. The president is expected to announce new rules within a few hours. For those familiar with the plans say they will target
Chinese quantum computing, AI and semiconductors.
US investment firms will be restricted from investing in those areas and required to report their activity in China. It will give the American
government an overview of exactly what's being invested where in the Chinese economy, particularly when it comes to quantum and AI and computers
and technology.
The president is set to speak at any moment in an event in Albuquerque, New Mexico. The remarks he'll have will be mainly on domestic manufacturing,
but we'll keep an eye in case there's much relevance on that.
Kevin Liptak is in Washington. Square in a circle for me. They want better relations with China, and Blinken has done much towards that goal. So why
are they doing this, which is only going to exacerbate and annoy the Chinese?
KEVIN LIPTAK, CNN WHITE HOUSE REPORTER: Yes, and that question is a question that many administration officials have been asking over the last
several months as these restrictions were coming together and what they determined was that they did want to focus these very squarely on national
security industries, those three industries that you mentioned -- artificial intelligence, quantum computing, and advanced semiconductors.
And when you talk to officials here in Washington today, as these restrictions are coming together, as they're being finalized, the point
that they keep making is that these are narrowly focused on national security. They're not meant to disrupt legitimate business with China.
They're not meant to damage the Chinese economy, and President Biden is trying to resuscitate a relationship with Beijing that has really sort of
bottomed out over the last year or so.
He has sent top officials to China to talk to their Chinese counterparts -- Blinken, Secretary Yellen, the Commerce secretary -- and so it does come at
this fraught moment and the hope, at least among officials that I've been talking to today is that China will regard this as squarely in the national
security space, whether that happens, I think remains to be seen, probably pretty doubtful.
QUEST: The US is also, I've been reading, been very careful to keep our allies on board, because the one thing they don't want to do is have their
efforts, the US efforts negated by Europeans or others who move in arguably at a commercial advantage, but at the same time, destroying the very effect
that the US is hoping for.
LIPTAK: Yes, and this was a big topic of discussion back at the G7 in Japan in Hiroshima and the phrase that you kept hearing from President Biden, but
also critically, from Ursula von der Leyen, the EU chief was de-risk, not de-couple, trying to emphasize that they are not trying to detach
themselves completely from China economically because that would basically be impossible, but trying to remove these risks from the supply chain when
it comes to things like semiconductors, which are so essential to any kind of military technology.
And the White House does feel like they have made progress with the Europeans on that front, and von der Leyen is making some headway on that
front and that is something that they will be emphasizing as they roll these out later today.
[15:05:05]
QUEST: Okay, now put a political spin on this. How much of this is politics versus economics?
LIPTAK: Well, I think there is a political angle here. And certainly Republicans in Congress have been pressuring the White House to take these
steps faster, because they have been discussing them for months and months and months and kept holding off, kept narrowing the scope of them.
I think what you'll hear from Republicans certainly is that they don't go far enough, but there is wide, you know, support for this kind of step on
Capitol Hill, and certainly, President Biden is someone who wants to appear as if he is taking a stance against China because most Americans believe
that China represents a threat to the economy, but at the same time, he doesn't want to appear bullish to the Chinese president, Xi Jinping,
because he wants to set this meeting and because he wants to improve the relations going forward.
QUEST: Kevin, thank you. Beautifully done to bring us up to date with the events.
Now the moves in the United States come as the Chinese economy is experiencing deflation for the first time in more than two years. Deflation
is where prices fall and consumer prices fell by 0.3 of a percent last month. The reasons are many, but it include shoppers cutting back on
spending, government spending. It is increasing the pressure on Beijing to stimulate the economy, as it faces the possibility of stagnation.
The rest of the world is trying to fight inflation, but deflation in many ways is far more dangerous. In fact, economists worry about deflationary
spirals. Think about it this way, falling prices lead to lower profits for businesses as margins shrink. When companies have less money, they look to
pay their workers less. That leads to falling demand in the overall economy and faced with lower demand, businesses lower prices to encourage sales,
and of course, you don't buy things because you know the price will be cheaper next month. That's a deflationary spiral.
The problem could extend beyond China. The country is a major exporter and if its manufacturers lower the price of goods, it could force suppliers in
other countries to do the same.
Shamik Dhar is the chief global economist at BNY Mellon. He used to be chief economist at the Foreign Office at the UK.
This is interesting, because you know, we had Japanese deflation. We had worries about deflation in the EU during the great financial crisis and
afterwards. We've had flat -- we've have had -- but it's not really been seen in the US. How real is this deflation versus a blip in China?
SHAMIK DHAR, CHIEF GLOBAL ECONOMIST, BNY MELLON: I think it is real and I think you summed up the situation quite nicely there, Richard.
I mean, we're at the very beginnings, so we can't be absolutely sure. Most of the -- I think most of the street, most of the market seems to think
this is a relatively short blip that things will come back next year and relatively strongly.
I'm not so sure. I think, you know, there are lots of structural factors that point to falling prices, lots of things that China shares in
similarity with Japan -- falling population, weak banks, falling inflation expectations, and unwillingness on the part of consumer to spend.
So all of that makes me think that actually this could be a more serious problem than anything.
QUEST: And what is the headroom, to use the phrase, for the Chinese government to stimulate through fiscal measures? Because we know that Japan
over decades, I mean, literally funneled money into the economy through stimulus packages that did nothing or very little. Does A., China have the
headroom and B., will it work?
DHAR: Well, look, according to the official statistics, it does have the headroom. It runs a relatively stable and sound deficit policy, and its
debt to GDP is relatively low, at least on the official numbers.
So in principle, yes, it could sort of fire up the engine, if you like and pump money in. I think the problem is that it's unwilling to do so because,
frankly, that kind of approach in the past has led them to the situation they're in now.
You know, pumping up the property sector, pumping up the SOEs, that's kind of led to a huge capital misallocation, which frankly, the markets are
trying to sort out now.
So China is caught out a bit. I think they will do a fiscal stimulus at some point, but I think they will be mindful that, frankly, they need the
private sector to do the heavy lifting from here.
QUEST: Our lead story today, of course, is this restriction on investment by US investment funds and the like. How serious do you think that is? I
mean, if we take -- if the Chinese economy is already a bit in the mire, and you've got the US whether numerically significant, at least everybody
in the US worried about, should I or can I or will I invest in China? Does this become its own spiral?
[15:10:00]
DHAR: It doesn't help. I mean I think, it is kind of -- at the margin it makes things worse. I mean, I think it's really quite noticeable that
China's recovery fizzled out quite so quickly because unlike most western economies, consumer spending didn't sort of jump up and come to the rescue.
And so with the rest of the world relatively weak, China's exports and export dependency came home to roost and kept the economy relatively weak.
Now, against that background, if you try to -- if you talk about sort of de-risking, even as opposed to decoupling, then it's bound to hit
confidence and to some degree, you know, challenge the existing Chinese model, which is very fundamentally dependent at the end of the day on
Western demand.
QUEST: I'm just going to read the headlines, if I may, sir, from your latest note, which says: "The Fed recession more likely than immaculate
disinflation, ECB hawks are at risk of doing too much, and the BoE, Bank of England, ongoing stagflation story."
Now in that scenario, the US is looking quite good, really.
DHAR: Yes, and I think interestingly, we're at a different stage of the cycle. For the past year and a half, it's been all about Central Banks
having to catch up with the fact that inflation is here and here to stay, and therefore, raising rates really quite aggressively across the board,
whether that's the Bank of England or the ECB.
I think there's nuances now appearing. You know, as I mentioned, there, I think there are good reasons to think that if there's a soft landing, and I
still think it's odds against, but if there is one, then it's most likely to happen in the US, whereas the region in danger of doing too much is
probably the Eurozone. I think probably rates are where they need to be already, but they're talking about raising them from here.
And the Bank of England is struggling with its sort of communication failures in the past and as a result, has embedded if you like, high
inflation expectations, which it is going to have to tackle, which means the Bank of England is probably most likely to raise from here.
QUEST: Good lord. We've had 14 so far and there is more to come. Glad to see you, I mean, I am always good to see you and to hear your views.
Thank you, sir. Very grateful. Thank you.
DHAR: Thank you.
QUEST: Now, WeWork is in dire straits. That's not my words. I mean, the company itself says there are substantial doubts that it can survive. So
why isn't WeWork working? In a moment.
(COMMERCIAL BREAK)
[15:15:10]
QUEST: WeWork is warning there is substantial doubt -- that's their words - - substantial doubt that the company can survive. The shares are down more than 30 percent, 40 percent as you can see, and the CEO is blaming trouble
in the commercial real estate market for its existential woes.
WeWork has been under pressure for the past year and today's drop nearly wiped out what was little left of value.
Internal strife is the sort of stuff of Hollywood, Apple TV+ came out with a miniseries last year based on WeWork's rise and fall.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Who wins in a fight? The smart guy or the crazy guy?
UNIDENTIFIED MALE: Are you crazy enough?
UNIDENTIFIED MALE: I maybe. I maybe.
(END VIDEO CLIP)
QUEST: Now before the pandemic, it claimed to be the single largest office tenant in Manhattan, claiming a valuation of $47 billion. Now, it's cap is
less than $300 million and it could fall all the way to zero if it goes bust.
Eliot Brown is a reporter for "The Wall Street Journal" who wrote "The Cult of WeWork: Adam Newman, and the Great Startup Delusion."
I am guessing, sir, that you are not surprised by the substantial doubt of WeWork's ability to remain a growing concern?
ELIOT BROWN, REPORTER, "THE WALL STREET JOURNAL": I would say it's been a long time coming. They've been sort of limping along for the past two years
or so since the pandemic, but you know, really, yes, I think they've basically been hit by this one-two punch, where the first, you have this
this sort of startup bubble and the excesses of the venture capital era of the 2010s, brought by low interest rates, and you had a lot of crazy things
going on there.
And now, you have, they are really succumbing to the change in office demand from the pandemic, where there's this huge work from home trend that
has, has brought down office rates, and they need office rates to stay high if they're going to stay in business.
QUEST: Because fundamentally, the demand for what WeWork does, and I suppose, to some extent, we learned we can do it from home. Now, there is
always this idea of it's better to be collaborative, and it's better to have an office and therefore, you know, you have your offices at WeWork.
But if we don't need offices or we don't have the same demand, then their raison d'etre is no more.
BROWN: Yes, I think WeWork's business model is itself adding onto that this huge amount of risk, where essentially what they do is they sign a lease
with a landlord saying, I'll pay you X rent, and then they go and find tenants for offices and kombucha that pay X times two.
And so what's happened is rent is for everyone have fallen and everyone is willing to pay, because no one is using offices anymore for 20 percent of
Manhattan or whatnot and so that brings down rent, and so that means they're stuck paying high rents to their landlord, and their tenants, the
startups who drink kombucha, they're not going to pay a good enough rent to let WeWork in turn pay the landlord.
QUEST: Right. So why don't they just go bankrupt? I mean, admittedly, it would wipe out, admittedly, the shareholders and it would wipe out -- but
it would also allow them to renegotiate if they wished those leases and those debts, it would all go into the bankruptcy.
BROWN: Yes, they didn't. They certainly haven't used that word, but that seems certainly an option where it's headed. I mean, if you look at what's
happened, they're burning through $300 million of cash a year, and it's a 13-year-old company at this point, and still has not been profitable.
And so, you know, the next step, like they only have like $600 million of cash or so left, so you can do the math. Something has got to change.
QUEST: I truly feel sorry for them. How much of all of this is there -- I mean, you know, when it happened, when WeWork came along, it was a bloody
good idea. It offered us something that we didn't think we knew, they didn't create the idea of service offices or whatever, but they certainly
popularized it. And now they're really in deep, deep trouble.
BROWN: Yes. I think it's important to remember that their growth and the reason that they're everywhere, it was subsidized. It was subsidized by
this euphoria and venture capital where, you know, venture capitalists essentially deluded themselves and us all that office space was a tech
company, that scooters were tech companies, that shoes from Allbirds, that was a tech company.
And so they poured money into the stuff building WeWorks everywhere and you signing leases at high rates, and so now we're sort of in the hangover
phase where we're realizing that that office space is office space.
[15:20:10]
QUEST: So if WeWork goes or at least falters and falls over, what is the demand for office space? Because you will have seen yesterday, of course,
that that one of the reasons Bank of America I think it was, downgraded or whichever bank it was, was going to downgrade banks -- Moody's was going to
downgrade banks was because it said problems in the commercial real estate sector so that's not going to change quickly.
BROWN: No office -- you know, I covered the office market for years and offices is -- the trends move slowly because people sign on these 10-year
leases. So I think that what we are going to see in the office market and then which clearly is to some extent spilling over to the banking sector is
pain for a long time to come.
And you see the -- you know, really established landlords that even after 2008 avoided defaulting on buildings like Brookfield and Blackstone,
they're defaulting on buildings. They're just saying, we're not going to repay these guys. We'll take the reputational hit, and, you know, walk away
from these towers in downtown LA.
So yes, I think the sort of expectation is that it's -- we're just at the beginning of a cold winter for the office market.
QUEST: Eliot, very grateful. Thank you, sir.
BROWN: Thank you.
QUEST: The broadcaster, ESPN owned by Disney is getting into sports gambling. A $2 billion partnership with Penn Entertainment will give the
company its own sports book. It's called ESPN Bet. It's also a bet by ESPN's parent company, Disney on the growing industry.
Shares in both companies rose. Grandview researchers value global sports betting at $83 billion. It could more than double by the next decade.
And we're awaiting earnings from Disney after the close today. Our media analyst is Sara Fischer. She's with me now.
There are really two aspects to this, Sara. The first is, of course, the straightforward ESPN and the gambling. And I mean, it is -- they are going
into areas they wouldn't have gone into before and some would be saying they shouldn't be going into now.
SARA FISCHER, CNN MEDIA ANALYST: Yes, but that is an old way of thinking. In the modern era, these types of legacy cable networks, Richard, they need
that revenue stream, and by the way, this isn't such new thinking for ESPN. I interviewed their chairman,. Jimmy Pitaro, last year for Axios and one of
the things he said is that they just have to weigh to what extent they allow this to sort of, you know, impact their brand.
ESPN is still a journalistic outlet. They hire tons of reporters. They put on a lot of different shows, blogs, et cetera, and the hesitation with
getting into betting was whether or not that would tarnish some of their, you know, household name branding.
I think what this deal allows them to do is to license their brand without them having to operate an actual sports book and while the news is new, we
know that's something they've been considering for a very long time because they need the cash.
You know, this deal is going to give them $2 billion with a B in upside, $1.5 billion in money and another $500 million in credits. That's a big
deal.
QUEST: Well, Bob Iger's restructuring of Disney, now, this isn't part of that per se, but it is a sort of an idea to deal with the streaming aspects
and the revenue issues at ESPN.
When do you think at Disney level, we are going to see something sizable and big? When is Iger going to make his big move?
FISCHER: Well, we know that he is trying to evaluate a lot of deals right now. We know that the most immediate deadline is Hulu. So Disney owns the
vast majority of Hulu. It has the option beginning as early as 2024 to buy the remainder back from Comcast.
At first, Bob Iger said that he wasn't sure he was going to do it. He didn't see the value of having sort of adult entertainment in the bundle.
Now, he says he is considering buying it back. So I think that's going to be their first seismic move.
The other things we're watching is that he has said that he is potentially evaluating getting rid of Disney's cable networks and its broadcast jewel,
which is ABC, and that's a big deal, Richard because Bob Iger has a history with ABC.
So the fact that he's even considering spinning those networks off tells you how serious he is about getting Disney's books in shape. If that were
to happen, I don't think you're going to see that until later 2024 Or possibly after, and the reason being Warner Bros. Discovery, CNN's parent
is sort of bound to a tax provision that expires next year, that will -- and has been holding them back from being able to make any bigger
consolidation moves until next May.
After that tax provision is up, you're going to expect to likely see them make some interesting inquiries into what their future holds and the way
this business works is once one card falls, the rest fall in place.
So I think you should expect to see some movement on the cable networks, think about things like NatGeo and FX that Disney Channel, you know, quite
possibly by next year.
[15:25:11]
But definitely, we will see a Hulu move early 2024, and then the last big move is ESPN, there have been reports that Disney wants to separate it out
from the cable bundle. So that doesn't mean make a streaming channel, but have it be a standalone cable channel that people can pay like $30.00 a
month, that I think they're preparing to do by around 2025.
So we have a lot of big deals coming up for Disney, and this earnings call, which, I am looking at the clock now is going to start in an hour. We'll
get earnings reports at four, we might get some more details then.
QUEST: And you will tell us about it in the fullness of time. I'm very grateful to you. Thank you so much.
An author is raising alarms this week after she found new books being sold on Amazon under her name. The problem, of course is she didn't write them.
It appears to be part of a new trend. Some Amazon sellers may be pushing books that were generated by AI and using the names of famous authors to do
it. It's raising fresh alarm over the potential of AI on the creative industries.
Clare is with me, Claire Duffy. Look, I mean, at the end of the day, if somebody is publishing a book and Amazon would say, you know, look, clearly
this is wrong. We didn't realize it wasn't that person's book, and therefore we'll take it down or whatever.
So it's not really a question of these per se, but it shows what can be done.
CLARE DUFFY, CNN BUSINESS WRITER: Right, Richard. This is something that I think is only going to increase. It is now so cheap and easy and accessible
to create this AI generated text. There are tools that will let you create book-length AI generated text. There are tools that will let you create
text in the style of other writers.
And so I think this is something that we're going to see pop up more and more. And as you say, it's a tricky issue for Amazon, because, you know,
it's even possible for multiple authors who are legitimate to have the same name, and so in many cases, at this point, it's up to authors to find and
do a whack-a-mole here, find these books that are being published under their name.
In the case of this author, these were books that were written using her name, and also on the subjects that she typically writes about. She said,
it was pretty clear that they were trying to profit off of her name and her reputation.
QUEST: Right.
(BEGIN VIDEO CLIP)
MARY RASENBERGER, CEO, AUTHORS GUILD: One thing I would just want to stress is that -- it is the importance of ensuring that we protect human
creativity.
Using AI to generate content is so easy, it's so cheap, that I do worry, there's going to be this kind of downward competition to use AI to replace
human creators, and you will never get the same quality with AI as human creators.
(END VIDEO CLIP)
QUEST: Clare, there's two distinct issues there. One is the role of AI in creating things. The second is the legitimacy of the product. I mean, I
don't mind buying a Clare Duffy backed book, created by AI, which I'm sure would not be as good as the Clare Duffy book that she wrote herself,
providing I know that's what I'm buying, and providing Clare Duffy has the right to say oh, you can't use my name and do that book.
DUFFY: Right, Richard. So there I spoke with the CEO of the Authors Guild, Mary Rasenberger, who was just last month in Washington talking about I
should say here the range of concerns that AI presents for this industry. You have many authors who are raising concerns that their work is used to
train these AI models without their permission, without their compensation.
And then those AI models can turn around and replicate work that's similar to theirs, although not as good, but could potentially start to replace
writers, replace the humans in this industry.
And then as you say, there's also a consumer concern that consumers could be tricked into believing that an author had really written a piece of
work, when in fact, it had been generated by AI.
And as we know, there are all these issues with AI, AI sort of creating misinformation, writing these confusing things that don't make any sense.
And so if people think they're reading a trusted author's work, but they're really reading AI, you know, there are a lot of concerns there.
QUEST: And I think a concern is exacerbated when you buy the book from a reputable source like Amazon, which of course -- thank you, Clare. Very
interesting. Thank you. Keep watching and come back to us on more on that. Thank you.
When you and I return together, dozens of people are hurt after a massive explosion outside Moscow. Russia is denying that Ukraine had anything to do
with it.
We will ask our correspondent.
(COMMERCIAL BREAK)
[15:32:39]
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QUEST (voice-over): A very good day to you. I'm Richard Quest. We've got a lot more together with QUEST MEANS BUSINESS. I'll tell you about Taylor
Swift and "Barbie," pulling in the billions of dollars in ticket sales. And thanks to female consumers, how women are increasingly driving the economy.
And we will discuss that.
And breaking the language barrier, test driving the new live translation technology in a Tokyo train station. We will get to it all, only after the
news headlines because here the news always comes first.
(MUSIC PLAYING)
QUEST (voice-over): (INAUDIBLE) people are dead after a boat carrying migrants sank with the Italian island of Lampedusa. It's according to the
Red Cross after it spoke to four survivors. They said their boat sank, set off from Tunisia and, after it sank, they survived by clinging onto the
remains of another wrecked boat.
National Guard troops have been called out in Hawaii to help battle out of control fires on the island of Maui. Strong winds associated with Hurricane
Dora have made the fire unpredictable. Emergency phone lines and power have been knocked out for 14,000 homes and businesses.
An update to a story reported last night, the Italian government is watering down planned windfall taxes on bank profits, only days after it
was announced. It originally said extra profits made due to rising interest rates would face a 40 percent tax.
Now after bank shares fell sharply, the government introduced a cap on how much any bank would pay 1.1 percent of its total assets.
A newly unsealed U.S. court filing shows investigators are planning a search warrant for Donald Trump's Twitter account. The special counsel
asked for the warrant, as it looks into efforts to overturn the 2020 election.
Twitter, which is now known as X, was fined $350,000 because it delayed producing the records.
(MUSIC PLAYING)
QUEST: A Russian official says at least 56 people have been hurt when a blast destroyed a manufacturing plant near Moscow. The plant is used to
make optical devices for both military and civilian use. The video shows a massive plume of smoke rising in the morning sky.
[15:35:00]
QUEST: Another shows the ground shaking with the blast, as you can see here. State media says the explosion came from a pyrotechnics warehouse on
the site. A Russian investigator said there is no evidence the plant had been hit by a drone. Nic Robertson is with me from London.
Do we believe them?
NIC ROBERTSON, CNN SENIOR DIPLOMATIC EDITOR: Some of the things they've said stretch credulity, not just to us, the distant observer, but even to
people on the ground. The idea that it was a pyrotechnics explosion doesn't -- isn't borne out by what we've seen, this single plume of smoke.
There was a bright orange flash, this huge plume of smoke, this very, very heavy, singular detonation. It's not indicative of a pyrotechnics factory,
where you'd expect, after an explosion, some sparks flying out, all sorts of things flying out and other colors coming up.
One of the witnesses on the ground said, look, I smelled pyrotechnics going off before I know what they're like. You get the smell of sulfur. Well,
there is none of that.
So the initial narrative and Russian officials rushing on state media to say, it was an explosion in a boiler room and then that there was another
explanation, which didn't seem to fit again the physical and visual evidence that we have.
So questions remain.
The key thing is, why would they say not drones?
That would be because Russia shot down two of them near Moscow overnight last night.
QUEST: And they boasted that they shot down two of them. Of course, the risk is they didn't shoot down this one or they failed to successfully
neutralize this one.
What did it hit that was so important?
ROBERTSON: This factory, that the Russian military uses to produce high grade military optics equipment -- and that could be for thermal imaging;
it can be for night vision binoculars. It can even be used -- that sort of equipment could even be used on drones. And drones are a very important
part of the war.
So why, again, with the Russians say this was not hit by a Ukrainian drone?
Why?
Because if the Ukrainians were going after high value targets around Moscow, that might be one of them, a factory that the military needs in its
war effort, remembering, of course, they have to make everything themselves now, because, in the past, they could buy some of these components in.
So what's domestically produced?
That's super important. The idea that there could be a third party operating a warehouse in the middle of this site, that was the root of the
explosion, maybe. But that would also speak to the potential for sabotage, that someone had rented it and had built a bomb inside of it.
Again, the descriptions by the Russians do not match the evidence that we see and hear.
QUEST: Nic, I'm grateful to, sir, thank you.
Now a bit of housekeeping, before we go. Clare and I, Clare Duffy and I were discussing this issue of AI generated books that have appeared on
Amazon store online. It would be seriously remiss of me not to give you Amazon's response to this.
The company released a statement, "We have clear content guidelines, governing which books can be listed for sale and promptly investigate any
book when a concern is raised."
Which, of course, is exactly the sort of questioning I was asking about Clare Duffy.
Do you remember this, a few days ago,?
Yes, it's Travel Barbie, all the way with a pillow, a book, a carryon, that's the right size. Well, like modern women, this Barbie is on the go,
traveling, spending money. And spending money from women like her is now a truly powerful force in the consumer economy.
It helps explain why Taylor Swift's summer tour is closing in on $1 billion. We'll discuss it, after the break.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
[15:41:27]
QUEST: Taylor Swift and Beyonce are on track to join Barbie in the billion- dollar sales club. The main drivers behind the success are female consumers, tremendous spending power. And it's giving many companies a
reason to rethink their target customer. CNN's Vanessa Yurkevich reports.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: We're waiting to see if we get the tickets.
VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT (voice-over): It would have been a cruel summer if not for this moment.
UNIDENTIFIED FEMALE: We're going to Taylor Swift.
YURKEVICH: This group of mom's, sisters, sisters in laws and cousins are Swifties.
YURKEVICH: How many of you ladies in the room have been to the Taylor Swift concert?
YURKEVICH (voice-over): We also have "Barbie" fans.
CHELSEA DEUTSCH, TAYLOR SWIFT FAN: I love going with my family. I don't think I would have rather had it any other way.
YURKEVICH: Women and girls of all ages are flocking to Taylor Swift, Beyonce and "Barbie."
YURKEVICH: These women are resonating with other women in a big, big way.
KRISTINA CHIAPPETTA, EXECUTIVE STRATEGY DIRECTOR, LANDOR & FITCH: Yes.
YURKEVICH: What are you seeing in this moment that may be different than other moments with these three women?
CHIAPPETTA: Women are not to be underestimated. They lift up economies and that impact is not to be overlooked. But brands haven't been talking to
them in their language for a really long time.
YURKEVICH (voice-over): That language is authenticity and empowerment. Generations of women are sharing these experiences together. The result, $1
billion in box office sales for "Barbie," Beyonce's economy-driving tour and extra U.S. dates added later this year for Swift's Eras Tour to meet
demand.
JEANINE RICHER, TAYLOR SWIFT FAN: It was a gift to me to watch them experience her, right?
It was amazing. I remember when Taylor came out, I was videoing their reaction. And that is something that will live with me forever.
YURKEVICH: And that feeling bottled up is priceless. It's unleashed the spending power of women, which has always existed but is now being
harnessed through other fearless women.
UNIDENTIFIED FEMALE: It was nice to be a part of things that had such a girl positive message, which is definitely not the norm. So hopefully maybe
this sparks the turn and maybe we get to see some more of that.
YURKEVICH: Two cancelled flights was not going to stop Helen Polisi from meeting her daughter Julie in Los Angeles.
HELEN POLISI, TAYLOR SWIFT FAN: I made it. Whoo.
YURKEVICH: For the final leg of Taylor Swift's tour in L.A.
POLISI: Come hell or high water I was going today. So I made it happen.
YURKEVICH: A last-minute first class ticket later, two concert tickets, dinners out, the outfits and the beads, it all adds up.
JULIE: Men go to a lot of sporting games, spend a lot of money on sporting tickets and that's never like considered absurd or over the top. Like, why
- like, for us, this is like my Super Bowl.
YURKEVICH: The duo also has plans to see "Barbie" together during their self-described girl power weekend.
JULIE: This summer's really been a celebration of like women coming together and like really embracing female friendships and doing things
together. It's like the first time women my age, women my mom's age, even like little girls are seeing like femininity and femaleness portrayed as
such like a positive light where you just feel so happy.
YURKEVICH (voice-over): Vanessa Yurkevich, CNN, New York.
(END VIDEOTAPE)
QUEST: Now women's incomes are on track to grow faster than men's for the next five years. Nielsen says women will control 75 percent of all
discretionary spending by 2028.
[15:45:00]
QUEST: Let's look at that number.
The benefits of economic equality are playing out in less obvious ways. An investigation by "The Athletic" linked a country's level of gender equality
to the performance on its football team at the Women's World Cup.
Misty Lee Heggeness is the associate professor at the University of Kansas, associate scientist is at the institute for Policy and Social Research.
This is fascinating because, at one level, women have been used -- to use the economic phrase, women have been economic actors for years,
increasingly so.
But what's twisted it, what's changed?
MISTY LEE HEGGENESS, UNIVERSITY OF KANSAS: Yes, Richard, thank you so much for having me. This is one of my favorite topics. I'm so happy to be here
talking with you about this.
I think one of the things that has really shifted in our environment today is just the way in which women engage in the labor market and bringing
their own money into their own purse. And that's a powerful feeling.
It allows for an ability to engage in purchasing items that bring women joy, like a Taylor Swift concert, for example, or the "Barbie" movie.
The other piece that I think is really relevant here is that there have been, and silently, we haven't been talking about this, but there have been
a generation of Baby Boomer women and younger, who have been crawling up the ladders, within the entertainment industry.
And they have been very powerful in opening doors for female producers of entertainment content. And that's just been fun to watch.
QUEST: When we look at this idea of 75 percent of discretionary income will be by women by 2028, we're talking here not just obviously about the
traditional aspects -- makeup, fashion or whatever. You're talking about an economic powerhouse, that moves into travel, tourism, entertainment,
technology.
All the areas where marketing non-traditional female-related goods will become more important.
HEGGENESS: So I think that's absolutely true. I think as we move forward, this summer is just a taste of what's to come. And I think we really need
to take the female consumer seriously.
We need to continue to provide content that is engaging and interesting for women. Generally, that is content written and developed by women for other
women. And we're seeing a lot of that this summer. And I think it's just going to continue.
QUEST: There is a view, that the women, admittedly, they did crash out this time. But traditionally, women's international sports have been so
successful because there is a philosophy of gender equality. It comes through in the training, it comes through in the resources given.
It comes through with, for example, legislation, old legislation, on equality.
Do you think there's a truth in that?
HEGGENESS: I think there's definitely a truth in that. I think women's economic advancements, when you look within the sports industry, have just
been really amazing. You think about all of the work done around gender pay equality in the field of sports in the U.S. -- or I'm sorry -- soccer in
the U.S.
You look at the KC Current, which is a female national soccer team in Kansas City. They are the first women's soccer professional team to fund-
raise and get enough private funds to build their own stadium.
So I do think that women's sports is really one of the leaders in this area. It's fun to watch and it's great to see it spill out into other areas
of the economy.
QUEST: I will forgive you for soccer instead of football. I put that down to cultural differences.
(LAUGHTER)
QUEST: Lovely talking about this. This is fascinating. We will talk more about it.
(CROSSTALK)
QUEST: No, please. Come back again. The insights on this dramatic shift in economic power is something we need to really understand a great deal more.
Thank you.
Ou est la gare?
Je voudrais -- well, you know me and my French, not as good as it might be.
But the traveler's tale is old as time.
Directions, you want something?
I only want a cup of coffee. And no one speaks the language. We know that travel apps are making a difference. But at Tokyo's main train station,
they have taken it, as you might expect in such a technologically advanced country, to a new level.
QUEST: QUEST MEANS BUSINESS.
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(COMMERCIAL BREAK)
(MUSIC PLAYING)
(BEGIN VIDEO CLIP)
[15:52:40]
QUEST (voice-over): Magical vehicle outside my office earlier. You can see the British Airways Concorde floating lazily down the Hudson. It's been
removed by crane from the deck of the Intrepid Museum, where we were recently and we broadcast our program.
And from the old aircraft carrier, now the Concorde on its way to Brooklyn, the naval yard, where it'll undergo restorative work before making its way
back. The Concorde moving its way majestically. What a beautiful beast of air it was.
The days of finding yourself lost in translation in a foreign country are rapidly ending. Technology is being tested at a Tokyo train station, which
could help tourists and staff communicate like never before. CNN's Marc Stewart with our report.
(BEGIN VIDEOTAPE)
MARC STEWART, CNN CORRESPONDENT (voice-over): At Tokyo's busy Seibu- Shinjuku Station, it's a steady surge of trains, travelers and at times the
need for translation.
UNIDENTIFIED FEMALE: I was actually really nervous coming side; I had people who don't speak English.
STEWART (voice-over): Now a potential solution in this nondescript window using voice translation technology.
UNIDENTIFIED FEMALE: Hi, I want to go to Matsumoto station.
STEWART (voice-over): Users simply ask a question in their native language. It appears on the screen and then immediately translated into Japanese for
the staff to read.
The response is then translated back to the user's original language. The system is now on a test run. We asked travelers including Fatima Horcher
(ph) to try it out.
STEWART: And you thought the translation was pretty spot on.
UNIDENTIFIED FEMALE: Spot on. It's exactly what I said was on the screen.
STEWART: How many languages can this system translate?
STEWART (voice-over): It supports 12 languages.
UNIDENTIFIED FEMALE: We're told the number of foreign visitors to Japan is growing. The screen was introduced so staff and customers can communicate
smoothly, face to face.
STEWART: There are certainly apps for your phone, which could translate but this system is simultaneous. And it's face to face.
UNIDENTIFIED FEMALE: The fact that it was at the same time, the fact that it really understood what I was saying.
[15:55:00]
STEWART (voice-over): While the system isn't always perfect, this technology is quickly improving.
HITOMI YANAKA, ASSOCIATE PROFESSOR, UNIVERSITY OF TOKYO: Research in the field of natural language processing and artificial intelligence is
progressing very rapidly. So these systems are getting better and better. And I hope that they will be used not only in stations but also in other
places in the future.
STEWART (voice-over): The manufacturer of the board hopes that could include airports, sporting events and hospitals. Part of an effort to make
sure everyone is understood, no matter what language they speak -- Marc Stewart, CNN, Tokyo.
(END VIDEOTAPE)
QUEST: I'm a great fan of the translation apps, which I use all the time. But this idea of simultaneous translation is remarkable.
Markets are lower, as investors are looking toward tomorrow's inflation report. You'll see that the Dow has turned purple. There it's sharply
lower. Right, OK, let's put this to the test, this bit of technology. Here we go. See if it works. We will take a Profitable Moment after the break.
UNIDENTIFIED FEMALE: (Speaking foreign language).
QUEST: I do apologize if it didn't say that. Profitable Moment, next.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST: Tonight's Profitable Moment: has the fun been taking out of travel or the anxiety by all this technology?
Just think about it. Wherever I go now, I pretty much use Apple Pay or you might use Google Pay with my phone. I can't remember the last time I used a
bureau de change to change cash. I use the ATM.
And as for travelers checks, there is an entire generation of people that have got no idea what I'm talking about. Language, of course, is the big
unknown. I've done several tests with simultaneous translation. And they are very powerful and very effective.
You get the gist, even if you don't get the exact words. But as my producer just said in my ear, what's happened to that moment of, it's all very
different?
I don't know what's happening?
Ooh, where am I going?
Ooh, the map?
What's upside down?
Oh, oh, is that a good anxiety to have?
Has the mystery of travel been evaporated?
Or has it been replaced by the wonderment of actually realizing where you are?
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I do hope it's profitable.
END
