U.S. Gets a New European Partner for 5G
ZAIN ASHER, CNN INTERNATIONAL HOST: No trading on Wall Street as the U.S. marks the Labor Day holiday. Here is what is moving markets around the rest of the world. No ifs, no buts, but perhaps --perhaps a general election. Boris Johnson throws down the gauntlet to his rivals in his own party. And Argentine stocks are soaring as Mauricio Macri turns to capital controls. And there's a change at the top of Saudi Aramco ahead of what could be the biggest IPO ever in history. Coming to you live from the world's financial capital here in New York City. It is Monday, September the 2nd, I'm Zain Asher in for Richard Quest and this is QUEST MEANS BUSINESS. Good evening. There may have been no trading on Wall Street, but it's been an extremely busy day. We are of course keeping a close eye on Hurricane Dorian. It's already done unprecedented damage the Bahamas as it heads for the East Coast of the United States. We will show you the scene from Freeport in just a moment. But first though to London, where the Prime Minister has just insisted there are no circumstances under which he would ask Brussels for another delay to Brexit. Boris Johnson says he believe the chances of getting a deal are improving and urged MPs to stand behind him. While he didn't call an election, as some has speculated, some suggest it might only now be a matter of time. Mr. Johnson gave a speech before Parliament reconvenes in London and he seemed keen to warn fellow Conservatives not to side with the opposition.</s>BORIS JOHNSON, BRITISH PRIME MINISTER: To show our friends in Brussels that we are united in our purpose. MPs should vote with the government against Corbyn's pointless delay. I want everybody to know there are no circumstances in which I will ask Brussels to delay. We are leaving on the 31st of October, no ifs or buts. We will not accept any attempt to go back on our promises or scrub that referendum --</s>ASHER: All right, for more on all of hits, Nic Robertson is at Number 10 while Bianca Nobilo has more from our London studio. Nic, I want to start with you. You were there, as Boris Johnson addressed the public a few hours ago, what stood out to you?</s>NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: The very fact that he has said essentially, if the opposition does what it says it's going to do, which is try to pass legislation to tie his hands either to get an agreement in Parliament for a no deal, or to actually get a deal with the European Council leaders meeting in the middle of October, if he doesn't get that, then they will force him. They want him to send a letter to the European Union asking for an extension. If they have that -- if they have that in lure and if they're able to pass that, he has clearly said nothing is going to stop him doing what he wants. He does seem to be setting the agenda here for the very real possibility of a snap election. Why do I say that? He said he didn't want an election. He said that the British people didn't want an election right now. He started off his whole speech with some campaign rhetoric. But then he said very clearly that if the vote does go against him in Parliament, then he essentially cannot negotiate from the position of strength, he believes he needs to negotiate with the European Union i.e. the very real, incredible threat of a no-deal Brexit. Therefore, what he is saying is he cannot negotiate and the only option will be to head for an election.</s>ASHER: And Bianca, as you heard Nic, just say there that Boris Johnson obviously did say that he doesn't necessarily want a general election. But there are those like former Prime Minister Tony Blair, who believe an election would actually work in Boris Johnson's favor, because essentially, people would prefer Johnson over Jeremy Corbyn.</s>BIANCA NOBILO, CNN CORRESPONDENT: Yes, and we have to think about the narrative and the optics here. It's important as far as Boris Johnson and his camp are concerned to at least seem as though they're not going for an election because it's what they want to do. But they're trying to affect the Brexit that they purportedly believe in and Parliament is thwarting them in doing so. So then their last resort would be to say, "Well, we're going to ask for an election on the 14th of October," as was just recently confirmed to us in that case. And that's because there is a huge amount of apathy and fatigue in the British population about the Brexit process, the lack of any kind of progress that's been made over the last couple of years. So it really does suit Boris Johnson not to be the person who seems to be pushing for the election, but he is going for an election because of the circumstances that he finds himself in.</s>NOBILO: And if he does have to do that, as you quite rightly point out, Zain, he has been doing much better in the polls than Jeremy Corbyn. There has been a Boris bounce since he took over from Theresa May. The public seem to be responding well to his decisiveness and the way that he has approached trying to break the Brexit impasse. So all of those signs added to the fact that Boris Johnson is a well-known campaigner, and he does thrive in that kind of setting. Plus there being almost no parliamentary options left does mean that it's not as unappealing a prospect as it may have sounded for the government several months ago.</s>ASHER: And Nic, Boris Johnson, in his speech earlier did say that the chances of a deal with Brussels has actually been rising. How so?</s>ROBERTSON: There was some sense that coming out of the G7 meeting, and of course came, you know, that weekend in Biarritz and in the days preceding that, he'd met with German Chancellor, Angela Merkel with the French President Emmanuel Macron. And the sort of sense was that the words that were being picked up were that he was being taken more seriously following those meetings, that there was a sense that people that met him and he sat next, if you remember at the G7 meetings with Donald Tusk, the European Council President that Boris Johnson was grasped and appraised of all the facts and the nuance behind what he was talking about on the Brexit, the difficulties of the Brexit negotiation that he was on top of the game, if you will. That he was also beginning to put forward ideas, some ideas that could be could solve the problem of the backstop, which he said must go from withdrawal agreement, change for some alternate arrangements, but that said that sort of have been in the air in this whole sense that Angela Merkel said that we can do a deal in 30 days. The Chancellor clarified that after saying that's not quite what we meant. So there's some positive spin that came out of all of that. But I think what we have seen since Boris Johnson, proroguing Parliament has taken some of the shine off of that, certainly for some of his own MPs, but this sense that Boris Johnson is not the idiot that some people in Brussels might have thought he was, has counted in his favor, certainly. But the bottom line for the E.U. is at the moment that Boris Johnson and his negotiators on Brexit have not put forward anything concrete that's going to move the situation one iota so far.</s>ASHER: All right, Nic Robertson, Bianca Nobilo, thank you both. Live for us from London. The sterling is thinking over speculation of a snap general election in the U.K. The pound was down more than one percent against the dollar, Monday, as Brexit uncertainty continues to mount. Speaking to me earlier on "The Express," Philip Shaw said the drop doesn't do certain sectors any favors.</s>PHILIP SHAW, CHIEF ECONOMIST, INVESTEC: Certainly, importers are going to find the drop in the pound unhelpful, obviously because it raises their cost in sterling terms. In principle, it should help exporters, but of course, if we're talking about possibly in amounts of chaos, with a no-deal Brexit, with ports, traffic in particular being held up by regulatory and customs checks, then the fall in the pound really isn't going to assist exporters or the U.K. economy in general. So I think what the government is also doing to try and reassure business is to say, "Look, we are aiming to strike a deal with the European Union." But at the heart of Boris Johnson's negotiating plan, it's that we are willing to leave without a deal on the 31st of October. And Mr. Johnson is hoping that that galvanizes the European Union into a compromise which his government and the British Parliament can accept.</s>ASHER: And what sort of impact does all the sort of fears about a no-deal Brexit having a on the debt market there in the U.K.?</s>SHAW: Well, in terms of the debt market, there's several things going on. But the threat of a no-deal Brexit itself is encouraging U.K. financial markets to speculate that there could be a cut in interest rates over the next year to 18 months perhaps, and that it's a potentially disinflationary situation over the medium term, perhaps not over the first year or so or two, when after which the pound falls back. But after that, inflation is perhaps less of a concern, so the U.K. debt markets have been held by the fear of a no-deal Brexit, but of course, also by the wider global situation, in particular, the trade tensions between the U.S. and China.</s>ASHER: So uncertainty on both political and economic front. For more, let's speak to George Buckley, Chief U.K. Economist at Nomura. He is joining us live now from London. So at this point, what more should the British government been doing to provide reassurance to businesses?</s>GEORGE BUCKLEY, CHIEF U.K. ECONOMIST, NOMURA: Well, it's just spent, I think, 100 million pounds on the most expensive government advertising campaign to try and tell businesses what they should or shouldn't be doing. The problem is, a lot of businesses haven't actually started the process yet. And I think there is a lot of concern that that they think that the process is going to last too long, it's going to take too long to get in place what they need to do. And they're still not convinced that we're going to end up in a hard Brexit. There's some glimmer of hope that what Boris Johnson says about possibly getting a deal might actually come true. And if it does, then all of their preparations and all of this effort that they would have gone to will be for naught. So I think there are a lot of businesses which aren't fully prepared, and that probably will remain the case, even going into October and towards the end, even if we're still looking at a no deal.</s>ASHER: And Boris Johnson earlier said the chances of a deal with Brussels has actually been rising. But in order to get a deal, you need to have no deal on the table. When you heard his speech, do you -- do sort of businesses and do you feel that there is the possibility that we will see a deal between the U.K. and the E.U.?</s>BUCKLEY: Well, I think when you look at what economists are forecasting, a lot of economists, but not by no means all, assuming that a deal is the most likely outcome. Now, the probability is very uniform, to be honest, at the moment between no deal, a deal and no Brexit because they are really the three main outcomes that we could have. When you say the probabilities are uniform, what we mean is that we really don't know where things are going. It's exceptionally difficult. But you have to base your forecasts on one of those options. Now, if you look at what the Bank of England said, it's tried to base its forecasts on a deal of some sort. The problem is, it conditions those forecasts on market variables, such as you were mentioning before about the bond market, gilt yields, for example, and what the market is expecting for rate cuts and Sterling. Now all of those -- all of those financial market variables are pricing in quite a sizeable risk of Brexit. So a hard Brexit that is, and therefore, you've got this very odd combination of a forecast, which doesn't -- isn't really a proper forecast, because it's based on two different, completely different outcomes.</s>ASHER: And how important is it for Boris Johnson to strike deals beyond the E.U., for example, with the United States?</s>BUCKLEY: So one of my favorite statistics is the distance between London and some of the key non-E.U. countries versus the distance between London and E.U. trading partners, the latter, on average is probably about 800 miles. The difference or the distance between London and the top four non-E.U. trading partners is 4,800 miles. There's a big difference. And when you look at these gravity models, what they tell you is it distance is really important about how much trade you do with these countries. So the risk is that, yes, while it could be quite important, the U.S. is a very important trading partner for the U.K., it can be only limited relative to what we might potentially lose from leaving the E.U. with no deal and the countries that we have been used to trading with which are exceptionally close to us geographically.</s>ASHER: Yes, the distance is a huge impediment. George Buckley live for us there. Thank you so much. Hurricane Dorian wreaked havoc on the Bahamas Monday. The monster storm hovered over the islands ripping the roofs of houses and forcing even rescue crews to take shelter. Now the Category 4 storm is the most powerful anywhere on Earth this year and the strongest ever recorded to hit the Bahamas. The Bahamian Prime Minister calling the devastation unprecedented. Meantime, in the United States, there is watches and warnings across Florida. It's currently about 105 miles off the coast of West Palm Beach, Florida and moving westwards at a very, very slow pace of one mile per hour, if that. Dorian is predicted to turn north late Monday and stay just off Florida's East Coast. The Hurricane Center warns even if Dorian doesn't make landfall, the storm surge could still be life threatening. Florida's governor is pleading with residents to take precautions.</s>GOV. RON DESANTIS (R-FL): People need to remain vigilant. If you're ordered to evacuate, you need to do that. From Palm Beach County all the way up to NASA, the Florida-Georgia border, all those coastal counties have issued evacuation orders and it's important that residents heed those calls. You know, get out now while you have time, while there's fuel available, and you'll be safe on the road.</s>ASHER: The damage has actually already been done mostly in the Bahamas. Patrick Oppmann has more on the catastrophic conditions from the City of Freeport.</s>PATRICK OPPMANN, CNN CORRESPONDENT (voice over): Hurricane Dorian unleashing its fury on the Bahamas. The record-setting storm striking, leaving behind catastrophic destruction. Wind gusts spiking over 200 miles per hour, becoming the most powerful storm to hit the islands. Dorian, shredding homes here and sending debris across neighborhoods.</s>HUBERT MINNIS, BAHAMIAN PRIME MINISTER: This is probably the most sad and worst day of my life to address the Bahamian people. We are facing a hurricane. Hurricane Dorian that one that we are seeing in the history of Bahamas.</s>OPPMANN (voice over): Heavy rains creating blinding conditions. Some towns submerged in floodwaters. Dorian making landfall in the Abaco Islands on Sunday, leaving devastation.</s>UNIDENTIFIED FEMALE: Pray for us. Pray for Abaco, please, I am begging you. My baby is only four months old. Please. Pray for us.</s>OPPMANN (voice over): Listen to a mother's desperate plea. Gerza Joseph (ph) waiting with other residents along with her baby. Their apartment building now roofless and surrounded by murky floodwaters rising around them.</s>UNIDENTIFIED FEMALE: People are trying to make it to the other side with these houses, but some people -- the water just took them and those are the only people that got to make it over there. Some people, they didn't get to make it.</s>OPPMANN (voice over): Those horrifying scenes playing again and again across the Bahamas. With the scale of destruction now coming to light, haunting images showing Hurricane Dorian's dangerous power as it now takes aim at the U.S. coastline. Patrick Oppman, CNN, Freeport, Bahamas.</s>ASHER: And we'll have a full update on the storm's path as it heads towards the mainland United States. We will be live at the CNN Weather Center in about 15 minutes from now. Argentina is taking desperate action to try and stop its currency from falling. The move will give the government more power and demand action from businesses. And Saudi Aramco gets a new Chairman in a push to go public. Where the Middle Eastern energy giant stands, next.