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Quest Means Business
Markets Rise, Oil Prices Fall As Trump Claims Productive Talks With Iran; Conflict Complicates Picture For Incoming Fed Chair Walsh; Two Dead After Jet Crashes Into Fire Truck On LaGuardia Runway; Columbian Military Plane Carrying Troops Crashes On Takeoff; Bookstaber: We Have Returned To A Period Of Risk; Saudi Arabia Prepares For Influx Of Shipping On Red Sea. Aired 4-5p ET
Aired March 23, 2026 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:22]
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": Closing bell ringing on Wall Street and a sea of green that's been with us all day. We
are off the tops of the day, but even so, close it out, close the market. Give us a couple of gavels and a one, and a two and a one, two, three,
four.
Trading is over. I don't have a bell with me today. I've left it at home. We are up 631 on the Dow, strong session. I will get to all the reasons.
The markets and the main events tonight: Wall Street, as you see rejoicing as President Trump says talks with Iran are making good progress, Tehran
denies there are any talks.
The U.S. Transportation Secretary, Sean Duffy, says the investigation is underway into that fatal collision between a plane and a firetruck at
LaGuardia Airport.
And a new financial crisis: The man who predicted the 2008 crash says something even worse could be on its way. I promise, we will have more to
you than that.
We are live in New York, Monday, March the 23rd. I am Richard Quest and of course, I mean business.
Good evening. Good to be back in New York. We start with optimism on Wall Street, the sea of green that you just saw. And why? Because of potential
detente between the U.S. and Iran.
The soaring happened after President Trump claimed there were productive conversations over the weekend between the U.S. And Iran, and the President
said the U.S. would hold off on those strikes against Iranian power and energy sites, at least for five more days.
So, the result was immediate. Energy fell. U.S. crude is down more than 10 percent or thereabouts. And the market gains now, this is fascinating.
Despite Iran denying any talks had taken place and Israel saying it was conducting more strikes on Tehran, Fred Pleitgen is in London.
Fred, now then, let's just be as blunt as I possibly can be here. To your knowledge, and from what you're hearing, are there any talks between Iran
and the United States?
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, first of all, I've never known you to be blunt, Richard, but I think that in many
ways, it is the way that it is phrased. I think that talks are one way to phrase it, negotiations are another way to phrase it and you're absolutely
right, the Iranians are saying that absolutely no dialogue and no negotiations has taken place between Iran and the United States.
Now, that does not mean that there hasn't maybe been outreach from both sides or from either side, that there hasn't been possibly proposals or
messages that have been put back and forth between the two sides, possibly between third parties.
One of the things that we've been picking up on over the past couple of weeks since this conflict has been going on, this armed conflict between
Iran and the United States, is that the United States and the Iranians have both consistently been saying they don't want negotiations leading to yet
another ceasefire.
The Iranians especially are saying if there is going to be an agreement at the end of this war, it is going to be one that will end the conflict
between Iran and the United States, and the Iranians believe that they are in quite a strong position right now with the leverage they have over the
Strait of Hormuz, but they have consistently been saying that in the end, they want an agreement with the U.S. that will lead to them not being
attacked once again, maybe six months down the road -- Richard.
QUEST: Mowing the grass, I think, is the awful phrase --
PLEITGEN: Mowing the grass, yes.
QUEST: -- that is used. And yet President Trump says that there are factions deep within Iran that they've been getting -- that they can work
with is the way he puts it. And then we have -- just like with Venezuela, we have this comment that, you know, controlling the Strait of Hormuz will
be me and those acceptable parts of the Iranian regime, is he sort of daydreaming here?
PLEITGEN: Well, first of all, I don't think that the United States is going to be the one controlling the Strait of Hormuz. The Iranians say that right
now, they are the ones who are controlling it, and also, as far as acceptable parts of Iran's power structure is concerned, certainly right
now, the Iranians are saying that they are going to be the ones who decide who their power structure is and who the people at the top are.
And I think one thing that is crystalizing is that the Iranians have shown a deep propensity to be able to replenish their ranks every time one of
their top officials has been assassinated and sort of keep the power structure in place, if you will. Ever since the armed conflict started with
the attack on then Ayatollah Ali Khamenei, who of course was killed in that, the Iranians really haven't taken very long even to replenish a
senior figure like that.
So the Iranians certainly believe that they can do this for a very long time. At the same time, of course, they also don't necessarily have an
interest in the situation that's currently going on in the Hormuz that is going on for an extended period of time.
[16:05:18]
Because while they control essentially the tankers that are and aren't allowed to go through there, for them, of course, it is also a standoff
situation with a lot of the countries that are their neighbors.
So in the long run, the Iranians will certainly also want to see some resolution to that. In the end, most probably, if an agreement can be
reached, then the Strait of Hormuz will be opened once again and governed much the way that it had in the past, which, of course, the states that are
around the Strait of Hormuz in the Persian Gulf, Iran on the one side, and the Gulf states on the other side, essentially controlling what happens
there, and of course, trying to keep it open for international shipping, which in the end is what pretty much all of these countries want there.
QUEST: Fred, I am grateful. Fred Pleitgen joining me this evening from London. Good to see you, sir. Thank you.
Now the war complicates the picture for policymakers, particularly the Fed. At last week's meeting, Jerome Powell used the word "uncertainty" seven
times and said it is too soon to say how energy prices will affect inflation. There is not much -- at the end of the day, whatever happens,
there is not much they can do to stop it.
(BEGIN VIDEO CLIP)
JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: You can worry about all of the ways that oil commodities -- oil-related commodities go into
manufacturing and that kind of thing. The truth is, it is completely out of our hands and we just -- like everybody else, we have to just wait and see
what happens and it will be -- it will come down to how long you know, the current situation lasts.
(END VIDEO CLIP)
QUEST: Patrick Harker is the former President of the Philly Fed. President Harker joins me now.
Sir, it is good to see you. I am grateful. This is a conundrum, isn't it? This is a really difficult one because at one level, you know, the
inflation is going to feed through somehow somewhere because it is with oil, but can you see through it?
Do you take it as a single event, like say tariffs or because of the systemic nature of oil, do you have to respond?
PATRICK HARKER, FORMER PRESIDENT OF PHILADELPHIA FEDERAL RESERVE: So, in theory, you take it as a single event, but it always just trickles through
the economy. Even the tariffs are trickling through the economy. So you're going to see shipping costs go up, which will then eventually lead to on
the shelf prices going up.
So, that calls for the Fed to really just sit tight for now, just sit where they are, which is, I think, mildly restrictive and let this uncertainty
resolve itself.
This is just one of many uncertainties, by the way, the Fed is facing.
QUEST: Okay. But at what point do you have to respond? And I know, you know, at the last meeting there was even suggestions, I mean very distant
suggestions of tightening policy. How much more do you need before you do start tightening? You notice the Royal Bank, sorry, the Reserve Bank of
Australia tightening. They've got different issues, but people are now talking about raising rates.
HARKER: Yes, so you know, you have to look at the situation you're in. And the Fed not only is facing this inflationary impulse, but also a weakening
labor market, a very fragile labor market.
So they will sit tight. I do think they have to prioritize though inflation right now, that is in their dual mandate.
You put a weight on one versus the other. I personally put more weight on inflation right now and if necessary, tighten. But they are going to be
cautious about that because of the labor market issues.
QUEST: We are not talking politics at this point, but of course, by the time we get to see some more effects of a reasonably long or medium term
oil crisis, we will be at the midterms.
HARKER: Yes, yes and it is clearly going to have an effect on the consumer. The one thing consumers see every single day when they are driving down the
street is the price of gasoline and that affects their psyche.
QUEST: What do you make of Kevin Warsh? What do you think he is going to do?
First of all, he has got to get, you know, he has got to get through the Senate and that of course, relies on removing his obstruction and that
relies on the U.S. Attorney, Jeanine Pirro, from not appealing against the Powell decision. I mean, it is a tumbling series of events that has to
happen.
HARKER: Yes, so they will have to give up on the prosecution of Jerome Powell or the court will just throw it out before he can be confirmed.
That's pretty clear. But when he gets into the seat, he has got a tough situation.
He has a committee that is pretty split in many ways, in terms of those who are more Fed hawkish on inflation versus those who are more concerned about
the labor market. So, he is not going to be able to move very and radically in any one direction.
[16:10:10]
It will be a cautious move early on.
QUEST: You know, I always remember Alan Greenspan saying famously when they used to do the Tour de Tabla, you know, he never wanted to be on the wrong
side of his own committee. Now those sort of days seem to have gone, you know, chairs are now much, particularly in Europe, they are much easier,
and the BoE, if they are not -- they still want to be the majority, but they don't mind the dissenters along.
How much dissent can the FOMC take, do you think?
HARKER: There is a fair amount, I think right now. There is both the actual dissents in the vote, then there is the quiet dissenting, which is people
who are reluctant to go along with what is in the statement that gets released every time. And so, it is really a debate about that language and
that is why you're going to see them sit tight here for a while.
I think they may not make any move for the entire year of 2026, but of course, that all depends on how the data turns out.
QUEST: Because we are data dependent.
Sir, I am very grateful. Right to the end.
HARKER: Yes, sir.
QUEST: Thank you, President Harker. We will talk more as the as the data comes in, and I am grateful you've given us time tonight. Thank you, sir.
Now, oil prices eased on Monday to their lowest level in a week. Brent is still up around $20.00 from where we were at the start of the war. The
disruption in the Middle East is giving Africa's Dangote Group some leverage. It touches so many sectors -- manufacturing, infrastructure,
fertilizer -- which you and I have talked about on so many occasions, and the company operates Africa's largest oil refinery.
Dangote is ramping up fuel exports across Africa, while other routes are squeezed. It is even selling jet fuel to Europe and the U.S.
Eleni Giokos spoke to the chief executive about the supply strains.
(BEGIN VIDEOTAPE)
ALIKO DANGOTE, FOUNDER, DANGOTE GROUP: I think it has actually affected people who don't even know what is, you know, oil, because the Strait of
Hormuz, there has been almost shut down and what is happening in the Middle East is really a very sad situation and I pray that this thing will be
resolved you know, very, very quickly.
But for us here, where we are in Africa is going to really affect people quite a lot. You know, countries are, you know, swimming in heavy debt and
then, this thing is going to increase quite a lot of, you know hardship, especially in terms of inflation, in terms of exchange rate, in terms of a
lot of things.
ELENI GIOKOS, CNN INTERNATIONAL HOST AND CORRESPONDENT: Do you think that we are now sitting in a moment where there is going to be a recalibration
of what is perceived as risky? Because what we've seen playing out here in the Gulf, and how do you plan to capitalize on this moment?
DANGOTE: Most of our jet fuel is going to U.K., is going to Europe, and the U.S. So I think this will diversify the supply chain, so that it will de-
risk the, you know, issues that you have with the Strait of Hormuz, you know, because Iran is not going to go away. The problems of you know, Iran-
Israel, the entire Middle East is not going to just go away, you know, overnight, but we pray that there will be peace you know, throughout the
next 50 to a hundred years or so. But this will actually de-risk our own continent.
GIOKOS: In the history of markets, how are you defining what you're seeing?
DANGOTE: Well, it is really very shocking for all of us. Even here where, you know, for example, in Nigeria and other West African countries where we
are producing quite a lot of you know, I mean, oil, it has been a bit tough and difficult, you know, because a lot of people that couldn't get oil from
the eastern part of the world, they are coming down here to the western part to --
You know, so we are struggling, you know, between us and, you know, people who are coming to look for, you know, crude oil. And this has disrupted a
lot, especially to those oil, especially to those gas. People are scrambling to get urea. People are also scrambling to get a lot of things
being shipped.
We have quite a lot of goods to be shipped from other parts of the world, and a lot of people have actually increased their freight rates you know,
dramatically, which is really very, very unfortunate for business.
(END VIDEOTAPE)
QUEST: The CEO of Dangote.
Investigators are on the scene at the New York's LaGuardia Airport after a deadly collision, trying to understand. They know what happened, but the
reasons behind it are much deeper than just who cleared the firetruck to cross the runway.
We will explain after the break.
(COMMERCIAL BREAK)
[16:17:32]
QUEST: New York's LaGuardia Airport has reopened following the crash when a passenger plane ran over a fire truck on the runway on Sunday night. The
two pilots of the Air Canada CRJ 900 were killed in the accident. Dozens of passengers and crew members were taken to hospital.
You see there the awfulness of the crash. A flight attendant was found strapped into her seat, but outside the cabin, thankfully, she survived.
Investigation under the NTSB, which is the American authorities responsible.
This is the audio of Air Traffic Control and ground control speaking to the fire truck as the crash occurred.
(BEGIN AUDIO CLIP)
FIRE TRUCK: Truck one and company. LaGuardia Tower, requesting to cross four at Delta.
AIR TRAFFIC CONTROL: Truck one company, cross four at delta.
FIRE TRUCK: Truck one and company. Four at delta.
AIR TRAFFIC CONTROL: Frontier 4195 just stop there please.
Stop. Stop. Stop. Stop. Stop Truck one, Stop. Stop. Stop.
Sop Truck one. Stop. Stop truck one. Stop.
(END AUDIO CLIP)
QUEST: The beeping noise in the background that you hear at the end is the various automatic alarms and aids in the control tower that will have
warned the flight controllers that an accident had occurred.
Shimon is with me at LaGuardia. We didn't learn a huge amount from this investigation, but they're all very careful because it is the NTSB that
releases information. And I sort of wondered, well, you know, the mayor, the governor, just about everybody and their brother and sister, what
purpose they all served turning up.
SHIMON PROKUPECZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: Yeah, I was sort of surprised too, because, you know, also, I thought that the
Secretary Duffy, the Secretary of Transportation would certainly have something to say. You know, because this administration doesn't always
follow proper form, let's say or how things normally work.
And as you well know, most plane crashes, plane investigations, we always wait to hear from the NTSB before anyone really comments on anything. So I
was expecting to hear more, but it was certainly interesting to see that they were following the proper order here and we should hear from the NTSB
later.
I do think one of the things that the Secretary, you know, of course, talked about is about air traffic control and the need for more money from
Congress so they could get more air traffic controllers in the tower. We don't know if that was the issue here.
Certainly, there were a lot of rumors here all day about that. He knocked some of those rumors down. This idea that there was only one controller
inside the tower at the time.
[16:20:11]
He said he had heard those rumors, and he said simply, that was not true.
The other thing that I think he did say was that, you know, this was very sad, of course, but he also called it very troubling. But then when I asked
what he found troubling about what happened here, he didn't really want to elaborate.
But, you know, I think the efforts here by the passengers to get off that plane and to take care of one another, I think is so remarkable when we see
these incidents happen, how passengers really get it together and they listen to those instructions before the plane takes off about those
emergency exits and why that's so important in incidents like this, we see that.
By all accounts, there was only one flight attendant aboard that plane. The two pilots were dead, so they couldn't give any instructions to passengers.
One of the other flight attendants, as you said was outside the plane. So many of the passengers just had to do what they had to do to get out and
those are going to be remarkable stories, and we've heard some of those already.
You know, I was struck by one passenger, actually two passengers who said how they could hear and they could feel the brakes from the pilots just
slamming on the brakes, trying to get the plane to stop. But it was going well over a hundred miles an hour. And sadly, they just couldn't.
QUEST: Shimon at LaGuardia, I am grateful. Thank you.
Our transportation analyst is Mary Schiavo, and she joins me now. She is in Chicago. It is good to speak to you.
Well, we are deliberately not repeating and repeating and repeating the incident, but I am going to share it this one time just as you and I talk
our way through this.
There was no way this plane was going to be able to stop once that fire truck was moving on to the runway, was there?
MARY SCHIAVO, CNN AVIATION ANALYST: There is no way. I mean, even though the reports are that the plane had been able to slow down, it was 140
knots. I think it got down to maybe a hundred, that's a hundred mile an hour collision. Yes, there is no way for them to stop because you have to
use the thrust reversers and those were deployed and the brakes, you know, they won't stop you when you're going that fast. They are used later on in
the landing sequence.
QUEST: This is going to turn into why the controller, the ground controller gave permission for the truck to cross, and in that respect, it will turn
on the procedures in LaGuardia's tower at that time between air traffic -- the controller, local controller handling landings and the ground
controller handling the movements on the ground.
SCHIAVO: Yes, it will. If in fact, that was what happened, because remember and you know this, for the ground vehicle to cross that runway, the tower
controller, the local controller had to give permission because it is an active runway, and it has already been given clearance to land for an
aircraft.
However, nobody used standard phraseology. I mean, there was even some confusion that they gave clearance to land to the Jazz plane, the Air
Canada plane, and called it plane number two. So, there will be a lot of discussion about who actually gave the command? Was it cleared with the
tower with the local controller? And, you know, who was really giving all of the instructions and if there was any disorientation. I mean, did you
forget you cleared a plane to land?
QUEST: And this is -- I sort of hesitate to ask this, but you and I were speaking earlier. Shouldn't the driver of the truck looked out of the
window. I mean, I have been in flight decks in the cockpit where a plane, you know, the pilot is cleared to take the runway position and hold, and
both of them still look out the window to make sure that there isn't a plane about to land or there isn't already somebody on the runway.
SCHIAVO: Because you're trained to do that in flight school almost from day one. You're trained to do the scan and you constantly do that. You scan the
instruments and then you scan the sky. And even if there are two pilots, you know, as all commercial cockpits are, and you are trained to do that
continuously and even when you're given clearance, you're always scanning.
And as someone who had a plane enter my landing pattern after I was cleared and just about caused a collision, you can bet -- you know, I certainly
always did it, but and here is the big but, you would think that anyone on the ground would be trained to do that, too.
And after we talked, I actually double checked and it is not an FAA reg that ground vehicles before crossing the runway have to literally look both
ways, look for an aircraft. However, it is an FAA best practices.
[16:25:00]
So since it is an FAA best practices, the NTSB will be inquiring whether the emergency response team/crew at LaGuardia was trained to do that. Even
once you're given clearance, the FAA says look for aircraft, and that will be one of the things the NTSB looks at.
QUEST: Under Annex 13, at the NTSB, we should get a report within 30 days, a prelim report within 30 days, because it is obviously -- there is multi-
jurisdiction here with Air Canada as well. But this -- the prelim report will give us, I suppose, basic facts.
SCHIAVO: It will. But you know, the NTSB has been really aggressive lately and they should be really aggressive lately on these FAA mistakes and the
hearing on the DCA, the Washington, D.C. collision. They were quite aggressive. They got that done in a year's time.
Sometimes these final investigations drag on for years, and the FAA will once again, I suspect, come under extreme scrutiny for what actually
happened here. Who gave the commands? What was the staffing? Were you tired? And what are the practices at LaGuardia? Because, you know, as you
know, these emergency response teams are airport specific and you are trained to that particular airport.
And I think the NTSB will be very, very speedy with this one because literally, I mean, now we've had two with eerie similarities -- Washington,
D.C. and this one, and they are going to want to get this done so they can stop more loss of life and I think they will.
QUEST: I am grateful, Mary. Mary Schiavo joining us from Chicago. Thank you.
SCHIAVO: Thank you.
QUEST: One of Colombia's military transport planes has crashed with a very heavy loss of life. It is in the south of the country. More than a hundred
people died. I beg your pardon, there were more than a hundred people on board, in the south of the country, I will have the facts and the real
developments in just a moment.
(COMMERCIAL BREAK)
[16:30:03]
QUEST: Hello, I am Richard Quest. Together, you and I will have a lot more QUEST MEANS BUSINESS. You are going to hear from the economist who claims
we could be on the verge of another mega financial crisis, and why ICE is being dispatched to U.S. Airports to alleviate long wait times.
Before that, only on here, this network, because the news always comes first.
President Trump says talks with Iran have led to some major points of agreement. The president says the discussions took place over the weekend,
but he remains vague about who represented Iran.
Iran's foreign ministry has rejected the claims. It says there is been no dialog between Tehran and Washington.
U.S. officials say New York's LaGuardia Airport reopened and reduced capacity for some time. Investigators are trying to understand why this Air
Canada Express plane hit a fire truck that was crossing the runway. The two pilots of the plane were killed in the crash. More than 40 passengers on
the plane were hurt.
Rescuers in Colombia are searching for survivors after a military transport plane crashed on take-off. The officials say that more than 100 military
personnel on board. The Colombian President Gustavo Petro says at least one person has been killed, 77 injured, and the cause is unknown.
Let's talk more about that crash, and some of the footage from it is disturbing. You will see here the C-130 transport plane is burning,
surrounded by peers, troops, emergency personnel, bystanders, rescuers, and everybody else. The crash happened deep in Colombia's southern Amazon
region, near the border with Peru. The president, President Petro, said the crash never should have happened.
Stefano is with me. Stefano Pozzebon in Bogota. I mean, it's -- I suppose it's a statement of the obvious. It should never have happened, but it did,
and now they have to find out why.
STEFANO POZZEBON, CNN CONTRIBUTOR: Yes, exactly. And we understand from, Richard, we understand from the Colombian Air Force that a team of
investigators is already trying to reach Puerto Leguizamo, which is this remote outpost on the border between Colombia and Ecuador over the Putumayo
River, where this plane crashed shortly after takeoff. It literally wasn't able to fly even a mile before crashing in the jungle.
We understand, according to the latest preliminary figures that we are receiving from the Joint Chief of Staff, said that 83 people that were on
board have survived that are now being treated at the local hospital down in Puerto Leguizamo, and that air ambulances are also on the way to Puerto
Leguizamo to provide more care. There were 125 troops on board, between crew members and the soldiers that were being transported to another
logistical hub, Puerto Asis, which is a logistical hub for the all of that region in the Colombian Amazon.
But the authorities are, for now, saying that this is unlikely to have been the result of an attack from the criminal groups, the paramilitary groups
that, of course, are active in that region of the jungle. They are more willing to speculate and say that while, of course, the ultimate causes are
yet to be understood, well, this is likely to have been just a tragic incident.
And take a listen to what the commander of the Colombian Air Force told us this morning.
(BEGIN VIDEO CLIP)
GEN. CARLOS FERNANDO SILVA RUEDA, COMMANDER, COLUMBIAN AIR FORCE (through translator): At the moment, we have no details on what caused the plane to
crash, other than that, as soon as it took off, it experienced a problem and crashed a couple of kilometers from the airport.
(END VIDEO CLIP)
POZZEBON: That statement was released, Richard, a few hours ago -- I would say, three hours ago. But it's still very relevant. They still -- were
still at the -- at the -- at the stage where the investigators are trying to pierce together what really happened on that flight. And as I said, the
Colombian defense minister Pedro Sanchez told us, and then, posted on Twitter or X that it's not -- it's unlikely to have been the result of an
attack from the dissidents or they --
(CROSSTALK)
QUEST: OK, can I --
POZZEBON: -- or the guerrillas that are operating in that region.
QUEST: And the numbers involved, we have got one dead, 77 injured, but several dozen are still unaccounted for, which does not bode well.
POZZEBON: Sure. Yes, 42 people unaccounted for.
QUEST: Right. Thank you. Come back when there is more to report on that. I'm grateful to you, Stefano. Thank you.
President Trump has deployed the federal immigration agents to airports across the United States. According to the administration, they will help
with security and arrest people who entered the U.S. illegally.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
[16:37:27]
QUEST: The starting point has to be Lehman Brothers going into bankruptcy protection earlier this week.
UNIDENTIFIED MALE: Bear Stearns and Merrill Lynch, colossals of the investment banking industry that survived the great depression have all
collapsed within the last five months.
QUEST: American International now found itself in trouble and had to borrow money from the U.S. Fed.
(END VIDEO CLIP)
QUEST: That was 2008. We all were younger in those days.
Anyway, the effects and the ripple effects in the banking sector and throughout the entire economy led to the great financial crisis.
Our next guest predicted it in 2007, and perhaps, just worryingly, he sees similar dynamics at play.
But, if you take a look there, you see multiple different risks considered in isolation. But when you connect them all together, they do become
connected.
For instance, the growth you've got, you've got private credit and artificial intelligence. But the way they are linked, and the relationship
between the two creates internal and possible massive dislocation.
You then add in, for example, physical risks. You have got the war with Iran. You have got the potential conflict of -- in Taiwan. Major headwinds,
again, putting it all together, because what happens is if, as I show you, probably once, once it all starts coming together, and once one starts
feeding on to the other, you end up with absolutely our good old friend, the circular economy. For instance.
Let's just take the possible conflict of Taiwan. The supply -- just watch this. You have got Taiwan, then, you have got the artificial intelligence
boom, because semiconductors will be severely limited. Then, you've got knock on effects to those who had invested throughout the system.
As you can see, one leads on to the next. Richard Bookstaber is the author of "A Demon of Our Own Design". He joins me now. Sir, this interlinking
between it all. We have seen it before, and it begs the question, do we ever learn it comes back to bite us. It's still got teeth and it still
bites, but it comes with a different fur.
RICHARD BOOKSTABER, AUTHOR, A DEMON OF OUR OWN DESIGN: Yes, this time, it's hard to go back and learn the lesson, because this is a new lesson. Up to
now, the sorts of risks that we've had are financial. And, you know, you can learn from the previous financial crisis to understand the next.
[16:40:02]
What we are seeing now is a new era. The issues with Artificial Intelligence is something that we haven't seen before. Private credit is a
new and somewhat untested market. So, I actually don't even think you can go to the past and learn a lesson. We have to look at this anew and take a
fresh but start towards it.
(CROSSTALK)
QUEST: But -- OK, but when I heard about, and when we discussed this in our morning meeting, my initial reaction was to say, oh, that's all fair
enough. But what does he want us to do? I mean, it's fair enough to tell us that, you know, the sky may be falling. But unless you are going to tell
me, well, I think you should do this, that's all the other. Tell me, what do we do?
BOOKSTABER: So, I think you can look at it in three ways. You know, there is risk, obviously. But with the risk, the other side of the coin is there
is opportunity. But those are things the investor can do to placate where they are sitting in the situation. The other is, what can companies do?
What can countries do?
I'll focus on the first two, because my background is risk management in the investment world. The first thing is to just say things are riskier. If
you were comfortable with, say, 70 percent of your portfolio in stocks up to now,
If there is more risk, you might be comfortable with less than that, if you want to have a similar amount of risk. So, resetting your portfolio would
be a start.
The other part of it is opportunity. When the world is dislocating, there are opportunities. And we already know what's happening. We have seen it.
There are some companies that are going to be the buggy whip manufacturers of 2028.
QUEST: Right.
BOOKSTABER: But there will be other companies that just ride the wave and exponentially grow on the basis of this. So, that's the other side of the
coin.
QUEST: But then you end up with a sort of -- today is a good example for us to be talking. I know you are talking bigger picture, but it's very
difficult. You know, you have a president who makes one comment in the market goes down. You have a -- the next day, just on the strength of a
comment, it goes back up again.
Now, it's hard to ignore those gyrations and concentrate on the bigger picture, when the knee jerk always draws us back.
BOOKSTABER: Yes. I -- it's hard to get away from the day-to-day news.
QUEST: Yes.
BOOKSTABER: This is happening, that's happening, but try to think for most of us, our focus, really, as individuals, and if your pension fund or
sovereign wealth fund is the same, story is longer term. We are looking at investments over the next five, 10, 20, 30 years.
So, a lot of what we see day to day, even some of these issues with Iran, is noise in that perspective.
(CROSSTALK)
QUEST: OK.
BOOKSTABER: So, there is some discipline that you have to have to understand what is the time frame of your investing, and on that basis,
what should you be focusing on in terms of risk?
QUEST: Now, you talk of 2008. You remember and I remember my first financial crisis was Black Monday, 1987. And we saw the Dow drop 24 percent
in a day.
BOOKSTABER: Yes.
QUEST: And we thought financial Armageddon had come. The market recovered relatively quickly, and it recovered relatively quickly. I mean, took
longer in 2008. But you are saying, even for old timers like me, this next crisis could have a much longer recovery period.
(CROSSTALK)
BOOKSTABER: Yes. Right. And that's the point of the risk. It's whether the market is down 20 percent, 30 percent, 50 percent. If it recovers in two to
four years, for most people, if they stay the course, they will be OK. But if the market's down for 10 years, 15 years, now, that really matters.
If you are thinking that, say the market is going to go up an average of seven percent a year, which is fairly reasonable.
If over a 10-year period, it's the same place it was at the beginning, you are down 50 percent from where you thought you would be. So, it's that long
term focus that I think we need to have. We need to move away from just looking financial risk towards looking physical risk, and we need to get
our time frame reoriented for the time it takes for physical risks to manifest themselves and work their way through.
QUEST: Very difficult to do, though, isn't it? Particularly, because you talk about rebalancing a portfolio. So, you rebalance and you don't get the
gains that you would like to see, while the market continues.
(CROSSTALK)
BOOKSTABER: Yes.
QUEST: Because you are waiting and waiting and waiting. But you need the gains if you're -- because of the dreadful pension situation that we have
in most developed countries now. You need the gains if you're going to have a half decent retirement.
[16:45:06]
BOOKSTABER: Yes. Well, this is, you know, the secret weapon individuals have.
(CROSSTALK)
QUEST: Yes.
BOOKSTABER: And for that pension funds have, is they have a time frame where they can be patient. If you are a hedge fund or an asset manager, you
have to look month by month. We don't have to play that game. And so, if we are seeing these dislocations and we understand them, we can wait, in many
cases, until the dust settles and look more towards these longer-term issues.
QUEST: I'm grateful, sir. Thank you for coming in and talking to us. Thank you.
BOOKSTABER: Thank you.
QUEST: That was the war in Iran enters its fourth week. Ports along the Red Sea now are handling more cargo as ships avoid the Strait. Nic Robertson
shows us how they are preparing in the Saudi port of Jeddah,
(BEGIN VIDEOTAPE)
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (voice over): Saudi Arabia's biggest port, Jeddah is gearing up for its busiest times yet.
On Saudi's west coast, the Red Sea, it is about to pick up much of the trade, Iran has choked off blockading the Strait of Hormuz. More than 700
miles from the beleaguered gulf, it will be helping keep them alive.
ROBERTSON: Saudi officials are saying that already, since the war began, cargo traffic through their red sea ports is up by one-third, and they are
predicting that here in Jeddah, the traffic is going to go up by 50 percent next month.
ROBERTSON (voice over): While most of that one-third uptick is Saudi oil exports, millions of extra barrels pumped hundreds of miles across the
Arabian desert. It is ports like Jeddah that will carry the bulk of imports.
ROBERTSON: So, all this comes off here, gets stacked up over here, and then, it's going to get on trucks and head eastwards across Saudi Arabia to
the Gulf.
ROBERTSON (voice over): Officials here say they are ready with enough docks, workers, cranes, and trucks lined up, but even so, analysts say they
won't be able to make up all the Gulf import shortfall.
CHARLES VAN DER STEENE, REGIONAL MANAGING DIRECTOR, MAERSK: Food and medicine are the priority. And of course, we continue to assess this
together with our customers, but it's clear that whether it is for the UAE, whether it's for Saudi, whether it's for Bahrain or Kuwait, and any other
country within the Gulf. These are the prime priority to make sure that the population can receive what they need as part of their daily life.
ROBERTSON (voice over): Major haulage contractors like Maersk, say they and regional governments have been planning a land bridge trucking goods from
the Red Sea to the gulf for years, and with good reason. The World Economic Forum says about 85 percent of the Gulf's food is imported.
VAD DER STEENE: It's safe to say that the Saudi government has been extremely involved in making sure that whatever road blocks that might
exist, road blocks in terms of the actual capacity in the terminal in Jeddah, road blocks in terms of potential capacity of available trucks, but
also roadblocks in terms of potential customs challenges that you might have so that the flow is optimized.
ROBERTSON: But for all the planning, there are no guarantees.
Last week, following an attack on its own energy infrastructure, Iran targeted Yambu oil terminal, and a drone hit a nearby refinery.
And then, there is Iran's partial proxy, the Houthis, further down the Red Sea in Yemen. Until a few months ago, they were attacking international
shipping and could restart.
ROBERTSON: So far, the Red Sea has mostly been outside of the bounds of this war. But if the war escalates, all this vital lifeline to the rest of
the Gulf, all that could become vulnerable.
Nic Robertson, CNN, Jeddah Port, Saudi Arabia.
(END VIDEOTAPE)
QUEST: President Trump has deployed federal immigration agents to airports across the U.S. They are there, he says, for airport security and to arrest
people who entered the U.S. illegally.
(COMMERCIAL BREAK)
[16:51:53]
QUEST: The Trump administration has sent immigration agents to U.S. airports to help with long security lines, a shortage of security stuff, if
you know, long waits.
And many TSA agents are calling out sick in response to the partial government shutdown, essentially, they are having to work without pay. So,
instead of some of them having to do other jobs and so forth, the president says immigration agents will hope will assist with security and arrest
people who entered the U.S. illegally. 14 airports so far.
Ed Lavandera is at George Bush International Airport in Houston.
Ed, look, from what I've seen, they seem to be doing a reasonably good job. I mean, they are corralling people, they are putting -- they are freeing up
train staff, so, the train staff can operate the various highly complicated equipment.
But from what you have seen of the ICE officers, do they realize they are now amongst the general public, and they are not, in a sense, at the
border, trying to sort of corral people?
ED LAVANDERA, CNN SENIOR NATIONAL CORRESPONDENT: Yes, we haven't seen any sense that the federal agents, and I've counted probably close to about two
dozen here over the course of the day. We haven't really got any indication that those agents are involved in making people move through security any
faster.
This board here, just until a few seconds ago, said that the wait here was about 270 minutes. That's been taken off. This line, we should also point
out, Richard, you see behind me, we are in Terminal E of George Bush Intercontinental Airport. This line starts two floors below where we are
into, like this area, this underground subway area that connects various terminals.
And this is the ending point, almost. This is the area where beyond there, you can see this. Security checkpoints. And as I've mentioned, we haven't
seen any federal agents working that area. That has been all TSA agents. And the call out rate from TSA employees at this airport was almost 40
percent, 39 percent yesterday. We don't have the figures for today. We won't have that until tomorrow.
So, that is, you know, 40 percent of the staff that handles all of this, and that's why you are seeing -- yes.
QUEST: Can I just interrupt? Did you say the wait --
(CROSSTALK)
LAVANDERA: That's right.
QUEST: Did you say the wait was 270 minutes?
LAVANDERA: Yes. No. This is one -- Richard, this is the craziest security line I have ever seen in all my years of traveling. It starts as I
mentioned, two floors below where we are. We have talked to people who have been in line. I talked to one gentleman who had been in line since 9:30
this morning. It's well after 3:00 now. There are people in line have been five six hours.
And here is the thing. They have missed their flights. Many of the people I've talking -- I have spoken with, they just want to get to the other side
of this security checkpoint, and they will sleep here and wait as long as it takes to be able to get on their next flight. And that's going to be the
other issue that the airport has to deal with, is there could very well be hundreds of people who are stuck here overnight at this airport while they
figure out what the -- what time they can catch their next flight after missing the ones that they are on.
This is a nightmare scenario for travelers here today.
QUEST: Right. So, what are -- I mean, do you know of -- are I-C-E agents at Houston? And if they are, what are they doing? Do you know?
[16:55:07]
LAVANDERA: We don't really have a clear indication as to what they are doing. We have seen them, and what I've observed throughout several being
here, almost eight hours here today, is that the agents have been kind of on the periphery, handling people, oftentimes, explaining people where they
should go, where the end of these lines are. Because they are actually having to make up these, these paths that people can figure out where to
get in line.
And they are -- it's all haphazard. They are making it up as they -- as they go along. There are lines of travelers here today in areas of this
airport that were never designed to have lines of travelers. So, that is what they are trying to do here today.
And as I mentioned, you know, the line here, this is the main lobby. The -- usually, travelers and security lines don't come out this far. The line
down, you have to go to the other side. There is an escalator that takes you down. It winds back and forth for several 100 yards. There is another
escalator that takes you down again.
QUEST: And if you've come in, because IAH is a massive connection place for United and so forth. If you have come in on an international flight and
have to go back through security again, you got to go out, recheck your bag, and then, go through this whole rigmarole all over again. It's a
nightmare.
LAVANDERA: Absolutely. That's why you are hearing. So many people here that they just want to get to the other side of security, and then they will
figure it out from there.
(CROSSTALK)
QUEST: Right.
Take the bus.
That's what I say. Ed, take the bus.
All right. Thank you, Ed Lavender, joining me from IAH, I'll have a "PROFITABLE MOMENT" after the break. What a busy day, and it's only Monday.
(COMMERCIAL BREAK)
QUEST: Tonight's "PROFITABLE MOMENT". As my grandmother used to say, that's no way to run a railroad, or, in this case, run an airport.
Admittedly, Houston is an outlier at the moment, the numbers are much less elsewhere, but it doesn't really matter. The sheer stress of air travel is
bad enough. And now, you actually have to go through all the extras of these long lines, worrying if you are going to miss your flight. If you
have missed your flight, how are you going to get to it?
The actual cause, the rights and wrongs on both sides, Democrats and Republicans, whether, who is holding out for what, where, when, and why.
But there comes a point when the damage is just so breathtaking and the inability to actually get anything done is so awful.
Think about it. 270 minutes just to get through security, and always the prospect of it's going to get worse.
[17:00:05]
Well, I guess that means that in the days and weeks ahead, it's up to travelers to put pressure on politicians, who ultimately will make
decisions. But I wouldn't hold your breath that it's going to get much better any time soon. As I say, no way to run a railroad.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. I left the bell home. So, let's see if this is going to work.
END
