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QUEST MEANS BUSINESS
Gadget Show; Less Spam; U.S. Stocks Cautious; Germany Eggs Scare; Help for Small Businesses; New Report On Gulf Oil Spill Blames Systemic Failings By All Parties; Windows Expands Use Of ARM Holding's Microchips
Aired January 6, 2011 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, CNN INT'L. ANCHOR: It could happen again. A new report on the Gulf oil spill blames systemic failings.
What's in a logo? Starbucks says less is more.
And they are putting the door (ph), or an ARM (ph) in the window, the chips are up for one U.K. tech company.
I'm Max Foster in for Richard Quest. This is QUEST MEANS BUSINESS.
The markets are reassured but the deep water oil industry is facing a crisis. Today why a leaked section of a report into the Gulf of Mexico oil spill may have implications well beyond the Gulf Coast.
First, it is still on the hook, but BP is not alone. A report on the causes of the Gulf of Mexico oil spill says blame for the disaster should be shared. The presidential commission behind the report says the accident was not down to one individual company but was the result of systemic problems.
BP comes in for heavy criticism. So does Transocean, which owned and operated the ill-fated rig. And Halliburton, which installed the cement around the well. Regulators, also said, to be at fault. The report says the companies made risky decisions because they were trying to save time and save money. BP says it cooperated fully with the commission's investigation. It stressed that the accident was the result of multiple causes, involving multiple companies.
The key findings of the report could have far-reaching implications. And Jim joins me now to talk through what this means for the whole industry -- Jim.
JIM BOULDEN, CNN FINANCIAL CORRESPONDENT: Max, well, so the report says the disaster could happen again, unless there is significant reform in the industry. Now numerous failings were identified, including inadequate risk management, flawed design and procedures, and failure to notice signs of approaching disaster.
Regulators didn't get off the hook either. They lacked the authority, resources, and expertise to prevent this kind of mistake from happening then and happening again.
Now the report also looked at Transocean who owns the rig. They said that Transocean failed to learn from a near miss in the North Sea here, in the U.K., four months before the disaster in the Gulf. They said what happened here, off the U.K., was eerily similar to the Deep Water Horizon disaster.
Meanwhile, in another report, U.K. lawmakers today said that Britain is not adequately prepared to cope with a similar disaster in the North Sea. They say harsh conditions off the Shetland Islands could make it very difficult to clean up and oil spill. Also, that U.K. taxpayers would have to foot the bill unless the industry is forced to pay more for kinds of spills.
Now, all of this, of course, for BP is about gross negligence. It could be fined billions of dollars more if it is found to be grossly negligent. Could this report now, reduce the risk of being found grossly negligent? That would save BP billions of dollars, big question for the company and for shareholders.
The other companies that share the blame in this report, Halliburton and Transocean, today both put the blame squarely back on BP, Max.
FOSTER: Analysts would have been pouring over this. What has been the market reaction?
BOULDEN: Let's look at the market reaction. Today you see that BP shares are down about 0.5 percent in the U.K. Transocean shares, which trade in Switzerland, up nearly 3 percent. So some analysts and some shareholders there think maybe Transocean could get off the hook with this report. BP shares were up strongly the last couple of days, though. It is important to note that, because of rumors that it could be a take over target.
FOSTER: OK, Jim, thank you very much, indeed.
Now Richard Pike is a former BP executive and he is currently chief executive of the Royal Society of Chemistry, here in London. He's was with BP for almost 25 years, weren't you?
You are an expert on the technical side of all of this. Did we learn anything on -- from what we heard today?
RICHARD PIKE, CHIEF EXEC., FORMER BP EXEC.; ROYAL SOCIETY OF CHEMISTRY: Well, really there are no big surprises, but I would say it was the severity of the tone, which probably was more significant than people expected.
FOSTER: And was that fair?
PIKE: I guess it was. But I think we also have to put all of this into perspective. There are tens of thousands of well that have been drilled sub-sea. We have done it for years. There have been very few incidents. Companies, they share procedures, there are conferences, there are loads of interactions across the world. So, much of what is actually on paper, which says what you should do, is well defined. It could bet tweaked, but it is pretty well defined.
The key issue here -- and, it has been around as a topic for discussion for the last six months of course, is how these procedures were implemented. And it was the non-compliance clearly from the point of view, BP, Halliburton, and Transocean, with those procedures that caused the problems. And you have to ask, how did that happen?
FOSTER: Were people being a big lazy? They weren't following the procedures, a bit cozy with each other?
PIKE: Well, you can imagine what happens; you want challenge in every company, so within BP, for example, you would want challenge within the team, on the drilling rig. Challenge between that group and that shore. And the same goes for Halliburton and Transocean. You also want real challenge between the companies, both on shore, and on the rig. And you can imagine though that in the confines of the rig you get -- you do get a little bit cozy.
Some people -- not enough people -- are prepared to raise their hand and say, look, there are some funny results here. Let's stand back for an hour, a day, and figure out what does it really mean. If you add, then, the pressures, Transocean were going to be moving that rig, quite soon to drill, yet another well, as part of a sequence, $1 million a day. So you can imagine lots of pressures to get things done and human beings are frail.
And add all that together, compound it with the weak regulatory structure, and you can see how there is the recipe, or the environment for a problem.
FOSTER: And no one is implying that anyone did anything intentionally here, but by not following procedures, perhaps being a bit lazy in following those procedures, perhaps they were negligent, perhaps they were grossly negligent. How would you define it?
PIKE: It is a question of definition. But let me just give you one example. The root cause of this disaster, the root cause, was the cement plug that went into the bottom of the well, that was ceiling the well, temporarily. There is a design code for the chemical composition of that. Even that was not met, it was not met. And therefore, when that seal broke it then exposed all the deficiencies of the procedures down stream. Nobody deliberately put in the wrong cement product.
FOSTER: But the whole system failed?
PIKE: It failed one after the other. And you can go back to things like the maintenance of the blow out preventer. It didn't take place properly. The way in which once the mud started to flow back it should have been directed over the side, of the rig. But people were wondering what was going on and the oil and the mud just kept going. And the whole thing ignited. So, it is a question of one event after another, all being slightly out of control, which then gave rise to this awful incident that took place.
FOSTER: Dr. Richard Pike, thank you very much indeed for joining us on the program.
PIKE: Thank you.
FOSTER: We'll have a look at the markets for you now. Here is the closing picture for Europe. Jim gave me an indication of some of the market activity, but London's FTSE 100 ended the day down, driven lower by energy and mining stocks. The main focus was on ARM Holdings, which closed at its highest price since 2001. (INAUDIBLE) will use its chips in a new operating system.
Meanwhile, the German market was boosted by growing confidence among manufacturers. But a number of European banks were lower on worries about the ability of come countries to manage their budget deficits, a continuing story.
Now Hungary's prime minister says defending the euro should be the number one priority for Europe. He was speaking as Hungary officially took over the EU's rotating six-month presidency. During the news conference, Victor Alban (ph) who was forced to defend his country's controversial new media law. Several over countries in the bloc have criticized the law, which imposes new restrictions on media.
Mines in Australia will take several months before they are fully operational. After the break we'll assess the damage caused by the flooding in Queensland.
FOSTER: The price of crude has taken a sharp fall after yesterday's rally and commodities (INAUDIBLE) spread inflationary fears. Oil tumbled to $90 a barrel, after the dollar hit a one-month high against the euro. The dollar has been gaining ahead of Friday's non-farm payrolls data, which everyone is looking out for. They are expected to show that the U.S. economy added jobs for a third month. A report out yesterday showed a biggest jump in company payrolls since records began.
Well, crude may be falling but analysts say the price of coal and many agricultural products are likely to remain high after floods across eastern Australia. Resources minister Stephen Rawlison (ph) says it is going to take some months for some mines to be back to full operation.
Queensland is a center for Australia's coal mining industry. And 40 mines have been shut because of the flooding. And a lot of agricultural producers, including vegetable, fruit, and grain farmers have suffered major crop loses. So when is a situation likely to improve? Well, Phil Black is in Rockhampton, one of Queensland's hardest hit towns. He sent us this report.
(BEGIN VIDEO CLIP)
PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT (voice over): From above the Fitzroy River is a bloated brown snake, swallowing homes, roads, whole suburbs. We flew to Rockhampton in an Army Black Hawk helicopter with an Australian government minister.
BRENDAN O'CONNER, AUSTRALIAN ACTING ATTORNEY-GENERAL: We have such massive devastation, and that is why they have refused (ph) recovery yet (ph)
BLACK (On camera): Up close on the ground, the speed and volume of the river is even more intimidating.
This is the point, from the banks of the Fitzroy (ph), that everyone has been coming to see, because of that high water marker. A couple of days ago it has showed that the river had climbed to around 9.2 meters, up over 30 feet. The prediction was that it would go higher, but it hasn't, which is good news, because although thousands of homes across this city have been affected by flood waters it means that thousands more will not be.
The bad news is, though, is that high water level is not expected to drop quickly. The river is expected to stay up around that level for at least a week.
(Voice over): This is a center to help the many people touched by the floodwaters. It is where we met the Sanderson family.
(On camera): So how you guys doing?
BRAD SANDERSON, FLOOD VICTIM: Oh, well, we are surviving with three kids in a small house, they are pretty resilient, and they are doing well at the moment, considering.
BLACK: To leave their home for supplies, Brad and Tony must load up their three children into a borrowed boat. We followed them back through streets of partially submerged homes, many now unlivable. Everywhere, cars, signs, fences, just visible above the waterline.
The Sanderson home has no electricity. It is backed with their possessions they are trying to keep from the water, it has become a cramped island this family of five rarely leaves. But they say they are lucky.
B. SANDERSON: Oh, there is a lot of people (INAUDIBLE) in this neighborhood.
BLACK: Like this man, he doesn't have a motor for his boat.
(On camera): You have a long paddle home?
BLACK: It took 30. He's one of many Rockhampton locals enduring floods without complaint, but with good humor.
UNIDENTIFIED FEMALE: It's a good little community, this place.
UNIDENTIFIED MALE: Yeah, river views.
BLACK: Only when those views recede can the really hard work begin. Locals say cleaning and repairing the damage from Queensland's angry rivers will take months, possibly years. Phil Black, CNN, Rockhampton, Australia.
FOSTER: Israel could take a giant stride toward independence, in the battle for global energy supplies, meanwhile it has discovered a massive natural bath field not far of its Mediterranean coast. The find could boost its position on the geopolitical stage. But as Kevin Flowers reports it is also likely to fuel tension in the region.
KEVIN FLOWERS, CNN INTERNATIONAL CORRESPONDENT (voice over): It's called Leviathan, a biblical reference to a massive sea creature trolling the depths of the Mediterranean. But this is no ordinary monster. Instead it is the site of the world's largest deep water gas discovery in the past decade. A consortium of Israeli and American exploration companies recently announced the find, a massive underwater field with an estimated 450 billion cubic meters of gas, located just over 100 kilometers off the Israeli coast.
GIDON TADMOR, CEO, DELEK ENERGY: It is a golden opportunity for the state of Israel, not only to be independent in natural gas, but actually also to become a player in the region, which could put us in a different position from a geopolitical point of view
FLOWERS: In time the find is expected to significantly reduce Israel's dependence on energy imports, add a substantial amount of foreign currency revenue and bring down the energy costs of desalinating water, a vital resource the region has on short supply. The strategic implications of the discovery are not lost on the country's politicians.
YUVAL STEINITZ, ISRAELI FINANCE MINISTER: A stronger Israel means something very important, a stronger Israel. And since this tiny, little Jewish state is under threat from Iran and from its proxies, it is very important to be strong.
FLOWERS: Significant hurdles remain in extracting the underwater treasury, however. Billions of dollars of infrastructure spending will be needed. And the companies are faced with the likely passage of a new law that could double the Israeli government's revenue share on oil and gas finds. A move that has CEOs calling foul.
The state of Israel, when they gave their license there was an agreement out to split this ownership. And this is the agreement that was agreed between the parties when we took in our investors money and invested it in exploration, I.E., high risk exploration.
TADMOR: Now, when we succeed, you can't change retroactively the rules of the game.
FLOWERS: It is a charge the government is expected to ignore.
EUGENE KANDEL, ISRAELI NATIONAL ECONOMIC COUNCIL: If were them, I would probably complain as well, but you know -- every country, practically every country in the world in the last 50 years, changed their fiscal structure. It is the right of a country to do that. It belongs to them.
FLOWERS: But just who all that gas belongs to, could be come the source of even more Middle East conflicts. The energy starved government of Lebanon, is also making claims on Mediterranean gas fields, and has asked the United Nations to ensure that Israeli does not exploit its sovereign resources. Ownership, aside the monster gas discovery was significantly alter the geopolitics of the region. Kevin Flowers, CNN, Jerusalem.
FOSTER: Now, I just want to tell you that we are getting reports on the emergency situation in the U.S. State of Maryland. Details are still coming and they are pretty sketchy. But this is what we know so far: two packages have exploded in state government buildings in the city of Annapolis. A government officials says no one has been hurt in either instance though.
Authorities say devices have been found at state house office building and another at the Department of Transportation headquarters. Stay with us for more on the story as information does come in to us.
Now Microsoft is throwing its weight behind a whole new bag of chips. CEO Steve Balmer says Windows 8 will run on the processors you can find in your phone. We'll hear from the company that designed them, next.
FOSTER: The world's biggest gadget show opened its doors on Thursday. At CES 2011, in Las Vegas, is showing off the latest consumer electronics. Microsoft's CEO Steve Ballmer gave the opening speech last night. And there was a big announcement from him; it was a new direction for Windows. The next version, Windows 8, will be able to run on the power sipping chips currently used for mobile phones and tablets. Balmer says that will give customers the best of both worlds.
(BEGIN VIDEO CLIP)
STEVE BALLMER, CEO, MICROSOFT: Increasingly customers expect the full range of capability from any device. The power and breadth of software that is available for today's laptop, the long battery life and always on capabilities of a mobile phone, great browsing, productivity and media experiences, in addition to the basics.
(END VIDEO CLIP)
FOSTER: Well, U.K. based ARM Holdings is the company which designs those low power chips. Its share rose 2.25 percent in London today. And they are up around 15 percent since the start of the year. Warren East, CEO of ARM Holdings is at the CES show in Las Vegas. He joins us now.
Thank you so much for joining us.
Just explain, if you would, before we speak about ARM, what this actually means for Microsoft. What will this allow Microsoft to do?
WARREN EAST, CEO, ARM HOLDINGS: Oh, well, this will allow Microsoft to target its operating systems at a range of products that are based on semi-conductors from -- instead of just Intel and AMD, but processes from 200 odd licensees of ARM technology.
FOSTER: So we are talking tablets, aren't we? Something parallel to the iPad, that sort of product?
EAST: Well, yes, a range of products. I mean, we are on the cusp of a explosion of Internet connected devices. Today we have hundreds of millions of smart phones produced per anum, and smart phones connect to the Internet. At a show like CES we are seeing lots of TVs, uh, TVs that are really TVs of the future, but connected to the Internet. And we are going to see a whole host of different form factors. And the tablet is one that made it in 2010 and it looks like it going to be in 2011 and going forward. But who knows, there may be some other form factors as well.
FOSTER: And it is quite an achievement on your part, isn't it? Because we have heard about the Win/Tel (ph) model for many years. This is an acknowledgement, isn't it, from Microsoft, the major pair in the industry, that things are moving away from the PC and away from Intel's dominance?
EAST: Well, we have been licensing our technology now for just over 20 years. As I say we have 200 odd semiconductor licensees and many of these have had, for the last 15 years, working hard at designing highly integrated system on chip devices for mobile phones. And as these phones become smarter they use more microprocessors. And what we are seeing is the system architecture of the mobile phone being the fundamental system architecture of these Internet connected devices.
And I haven't had a great of opportunity yet to walk around the stands at CES. The show is immense. But I know that I'm going to see lots and lots of consumer electronic products which, architecturally, are very similar to smart phones.
FOSTER: OK, Warren East of ARM Holdings, thank you very much indeed for joining us.
Now we'll be heading back to Las Vegas in a while, for a look at some of the new gadgets on display there, away from what we are expecting from ARM and Microsoft.
Well, web sites seem to be a lot less costly than all the gadgets at the Consumer Electronics Show, but with more than a trillion URLs in Google's index, yes that is a 1 with 12 zeros after it. How do you know which to pay attention to in 2011? Well, we have a great list of sites that could break ground this year. Check out this brilliant list at Facebook.com/CNNQuest. Certainly worth a look.
Now, Starbucks has revealed its new logo. And this is it, over here. The text is gone. It is much simpler, if you remember the other one. In fact it is more of a de-brand than a re-brand. The siren in the circle has had a bit of a makeover. Her hair has been straightened out and her facial features have been refined as well. Starbucks isn't the first big company to go for the minimalist look though. Note that Starbucks has got rid of the name in the logo. McDonald's ditched the text, leaving just a big M and it is still instantly recognizable. It was seen as a great success. Shell did the same thing, leaving just the Shell. You know it is Shell. You don't need to see the word "Shell".
Now customers often fear change and comments on the new logo on the on the Starbucks Web site are overwhelmingly negative. It has to be said. At a nearby branch of the chain, the coffee chain, if you can still call it that, I asked Graham Hales from Interbrand, why Starbuck is doing this.
(BEGIN VIDEO CLIP)
FOSTER (On camera): Graham, we have two coffee mugs here, one with the original Starbucks logo and the one that many people recognize and they use right now. So it has changed already, hasn't it, the logo, over time?
GRAHAM HALES, MANAGING DIRECTOR, INTERBRAND: Yes, most brands go through an evolution on a relatively constant cycle. New media pops up, visual opportunities pop up they want to move with society. They want to present fresh faces, so brands do constantly move.
FOSTER: And I understand that you want to simplify your logo, but why on earth would you take the name out?
HALES: Well, taking the name out is a bold and confident move. Mostly Starbucks is able to say hold on, we have got enough awareness. People know what we make. They know our environment. We have presence all over High Street. So actually the fact that our symbology is strong enough for people to recognize our brand as being Starbucks without us having to say it, this (INAUDIBLE) to soften the brand.
FOSTER: And there can't be many companies that have the awareness to allow them to take the name out, right?
HALES: Yes, you have to be a big brand and a valuable brand to be able to do that. So we think of petrol brands. So, people like Shell are able to just show a Shell logo outside a service station. We know it is shell. McDonald's famously uses its arches, not having to say McDonalds underneath itself all the time.
FOSTER: But we know about the Shell, but do we really know about the siren? Do we really notice that when we look at the logo?
HALES: Well, I think this is also about understand the role that coffee shops are playing within out lives. So Starbucks doesn't want to present itself as a harsh brand, or a dominant brand. It knows that we come to these places to relax, to work, to use them as a third (ph) place. So, it is just understanding how to soften the brand and not be too overt with it.
FOSTER: Be a bit more humble on the High Street?
HALES: I think humble is a good word for it. Starbucks in the past has been kind of wrapped up in some anti-branding feeling. And this is another way of just kind of demonstrating that they are softening their approach.
FOSTER: And it we look behind you, there are all sorts of other product on display here. Is this also about moving away from coffee? Because they are also getting rid of the reference to coffee, aren't they?
HALES: Certainly, this allows Starbucks to go into more areas. It lessens their predominance on coffee, it enables them to go into further paraphernalia. So, yeah, it provides more freedom.
FOSTER: There have been failures of this kind before, there have now. We heard about GAP and how they changed their logo. It wasn't successful. Prince changed -- well got rid of his name, didn't he?
FOSTER: I'm not really sure what happened, but a similar sort of thing.
FOSTER: It went wrong. So, why won't this go wrong?
HALES: Well, GAP is still a bit of a mystery. It was a sort of 24 hour turn around, where they suddenly said, no we're not doing that. And it I'm still waiting to truly understand what happened. Prince presents himself as a person that didn't want to be known by a name anymore, just a symbol, which felt quite preposterous. But we are used to organizations moving with the times and better understand how to present themselves and be relevant to the High Streets that they are on at the time.
FOSTER: Is it also about having a simpler graphic, that you can use online?
HALES: Well, any simplification of the logo and you can see between these two examples, how Starbucks simplified itself, that enables itself to go on more applications and be more user friendly for the various design implementation that will come down the line.
FOSTER: So, a good move, you think?
HALES: I think it is a fine move. I think it is a bold move. I think it shows Starbucks are leading this marketplace again and understands the role that the coffee shop brand should be playing.
FOSTER: Well, we'll see, won't we?
Next, though, is back to Las Vegas. The world's largest electronics expo is underway. And we are going to take a look at the gadgets, the good bits. Stay with us.
FOSTER: Welcome back.
I'm Max Foster.
These are the headlines.
We have more information now on a security incident in the U.S. state of Maryland. Here's what we know so far. Two incendiary devices have been found in state government buildings in the city of Annapolis. "The Baltimore Sun" reports on person has been injured in what was described as a small explosion. Authorities say devices were found at a statehouse office building and another at the Department of Transportation headquarters. Stay with CNN for more information as it becomes available to us.
Now, the U.S. is sending reinforcements into Afghanistan. Officials say more than 1,000 Marines will be deployed in the volatile Helmand and Kandahar Provinces in the south to support the expansion of security efforts there. The mission is described as short-term, with the Marines on the ground for only a few months.
The U.S. president will soon have a new White House chief of staff. Barack Obama tapped former Commerce secretary, William Daley, for the job. He met with Mr. Obama and other officials on Wednesday at the White House. The official announcement is happening right now.
Ivory Coast's internationally recognized president says he will negotiate with rival Lauren Gbagbo, but only if Gbagbo admits he lost the election. Alassane Ouattara also tells CNN he expects the economic community of West African nations or states to intervene in the situation and that military action is on its way.
The doctor who linked autism to childhood vaccines back in 1998 says accusations he falsified his study are bogus. He accuses companies of persecuting him for speaking out. Dr. Andrew Wakefield's study already had been discredited last year. But now the British medical publication, "BMJ," has published findings of an investigation saying Wakefield intentionally altered the data from 12 patterns.
Let's get back now to the Consumer Electronics Show in Las Vegas.
Right now, CNN's Dan Simon is there and he's been lucky enough to get his hands on some of the very latest gadgets -- Dan.
DAN SIMON, CNN CORRESPONDENT: Yes, Max. We have a bunch of them here at this table. The show opened about an hour-and-a-half ago. You can see it's pretty busy behind us. They're expecting more than 140,000 people from around the world to come to CES, which is going to last a couple of days here in Las Vegas.
And joining me to talk about what we have here at the table is Paul Reynolds from "Consumer Reports".
And, Paul, obviously, we've been talking about tablets, tablets all the rage here at this year's Consumer Electronics Show.
What do you think about what you've seen so far?
PAUL REYNOLDS, "CONSUMER REPORTS": Well, I think what we've seen so far is we're going to have some pretty good contenders for people who have been looking at the Apple iPad and maybe want some alternatives. I think some of them, like this Toshiba, sort of address some of these shortcomings. Good as this -- the Apple iPad was, this has some things, like a memory card slot. It has various ports. It has a camera. So it has some things that you can't get right now, at least on the Apple iPad. And I think we're going to see a -- there are already a number of other major companies that are coming out with tablets.
SIMON: By the way, that Toshiba, we'd better be careful with it, because there are only three of them in the world at this point. They go into production, I guess, in a few months.
Here's another tablet, this one from -- from Samsung. And I thought that this one was -- was pretty interesting, Paul, because this is both a - - a laptop and a tablet. You sort of get the best of both worlds, right?
SIMON: You just kind of plug it in?
REYNOLDS: And it switches the operating systems. This Lenovo will switch operating system as you install it. It runs on Android when it's a tablet. When you put it into the -- to the dock and turn it into a laptop, it will run on the Windows operating system.
SIMON: And obviously the other thing we're talking about, because you see it everywhere you go, is -- is 3-D television. Now, 3-D television made a little bit of a splash last year, but consumers really weren't excited. I -- I personally don't know anybody who bought a 3-D TV.
Do you think that's going to change?
Are people going to get excited about this technology after this year's CES?
REYNOLDS: I mean I think there are some good signs here in terms of what we're seeing in the products. First of all, we're seeing glasses that are lighter and cheaper than the ones that are with the current 3-D TVs. And looking a little further down the road, we're starting to see the first demonstrations of 3-D television without glasses at all. And they're variable in quality. But the one I saw at Sony was pretty high in quality and really gives you an idea that in a year or two or three, we really might be looking at 3-D television as a glasses-free experience, which will then be much closer to a mainstream consumer product.
SIMON: And that's really the key, because nobody wants to put -- take those glasses on and off when you're watching television.
REYNOLDS: Right. And, also, the prices of the sets are going to come down. We've had people like Samsung saying they have a goal of cutting by two thirds the cost of their 3-D televisions. As long as we have more content coming along, which is still, you know, lacking a little bit in 3- D, it could be a year that we really start to see it going mainstream.
SIMON: And the -- and the other thing, as we wrap this up, I -- I thought it was particularly interesting that, you know, you have accessories now to be made, you know, to go with 3 -- 3-D television. For example, this Panasonic consumer camera, this is a normal H.D. camera, but if you take this accessory, suddenly you have a -- have a 3-D camera, right?
REYNOLDS: Right. I mean I think these are -- these are camcorders that are designed to work with this 3-D converter. This is Panasonic's approach. We've had other companies like Sony go out with their own 3-D camcorders. I think what's notable about the -- the Panasonic one is it's under $1,000. Most of these are over $1,000, like the -- the Sony one is $1,500 or so.
SIMON: And speaking of cameras, a lot of interesting things with cameras. You can see that there's a camera embedded here in this -- this mask. So lots of cool things here at CES. Of course, not all these products will make it to market. We'll see what gets the most buzz over the next couple of days -- Max.
FOSTER: Dan, good stuff.
We'll hear more from you as the show continues.
Those tablets Dan was showing there are great for easily checking your e-mail on a move. And if a recent trend continues, it could get easier still. Something is taking a bite out of spam.
The computer security company, Symantec, says junk e-mail levels have fallen by a massive 50 percent since Christmas.
Matt Sargeant is an anti-spam technologist at Symantec.
He joins us now live from Toronto.
Thanks for joining us.
What on earth is going on here?
Why this reduction in spam?
MATT SARGEANT, ANTI-SPAM TECHNOLOGIST, SYMANTEC: Well, what we've seen recently is that a few of the botnets, which are networks of home PCs which are being abused to send all of this stuff, have just stopped sending spam for some reason.
FOSTER: Yes, what is the reason?
Have you got any idea?
SARGEANT: We really don't know. The -- the botnets are still active, they're still able to do other types of nefarious acts and they're still practicing in those. But they're -- they're just not sending spam anymore. It's possible that the spammers decided to continue making money the other way and that spam wasn't profitable for them anymore. Or it's possible that they just want to lay low for a while, hide from law enforcement. There are many possibilities. And they keep themselves very, very quiet because everything they do is illegal.
FOSTER: Yes, exactly. And no one really knows much about them. But you've probably got the best idea, because you -- you study how they go about their business.
Have you got any idea about whether or not they might be working up something else more worrying?
SARGEANT: I think it's important to realize that they are effectively a business, albeit an illegal one. And so like anything in business, when one entity goes away, somebody else will always come and fill that space again. So we don't expect that spam level to stay low for a particularly long period of time. But it just remains to be seen exactly what will happen.
We, unfortunately, can't predict the future of it.
FOSTER: And just on a practical level, what does this do for the Internet?
I presume it -- it clears it up a bit and makes our life easier.
SARGEANT: It is making lives a little bit easier for all those people out there who are filtering e-mail for this bad stuff. But we still -- you know, we still have to maintain our forces and get ready for the next battle.
FOSTER: Yes. OK. We'll let you rest for now.
Mark Sargeant at Symantec.
Thank you very much, indeed.
All right, let's head to Wall Street now, where investors are biding their time ahead of a big jobs report on Friday, of course. We've talked about it on the program already this week.
But Alison is there -- hi, Alison.
ALISON KOSIK, CNN CORRESPONDENT: Hi, Max. And you're right, investors really are biding their time. Stocks, those are trending to the down side, with the exception of the tech sector, which is in positive territory.
Now, much of what you're seeing is because, you know, investors are cautious ahead of Friday's big jobs report. They're not really wanting to make any big moves at this point, until that number comes out.
Analysts are calling for the economy to have added 150,000 positions. In fact, forecasts were boosted after Wednesday's strong ADP report that showed that there was a rise of almost 300,000 private sector jobs in December.
Now, if we get an upside surprise, economists do expect the market to pick up even more steam. Hopefully, we'll see more movement than we have been seeing in the last couple of days.
You know, while much of the focus is on Friday, we do have some other jobs data to tell you about. New claims for unemployment benefits last week moved above the 400,000 mark again, increasing by 18,000. And while it hasn't really changed the view that the labor market overall is improving, of course, Max, everybody would like to see these claims numbers lower and continue to fall even more -- Max.
FOSTER: When we look across the economy, good jobs news generally, isn't it?
But what about retail?
I keep hearing that everyone has had a terrible Christmas.
KOSIK: Yes, I mean and it's really retail, Max, that's weighing -- that's weighing on stocks today. You know, we're getting those December sales numbers from individual retailers throughout the day Thursday. And - - and many well known stores, they -- you know, they came up short. These stores include Target and Costco. You know, especially since expectations were really high for a strong holiday shopping season in the retail sector.
You know, but last week, a blizzard in the Northeastern U.S., it really looks to have hurt retail sales. You know, it has some retail stocks really taking a hit at this point. Gap shares are down more than 6 percent. Macy's shares down about 3 percent, as well.
You know, I actually heard traders behind me at the opening bell, you know, calling out Macy's after the closing bell rang, to sell the stock. So they couldn't wait to get rid of it.
But the good news is that many analysts expect the lost ground in for -- for retailers to be actually made up this month, with discounts continuing in January -- Max.
FOSTER: Alison, thank you very much, indeed.
We look forward to that report on Friday.
Now, it's an egg hunt with a difference. We'll be crossing to Berlin to find out why German farms and factories are being forced to cease production.
Just how serious is the egg scare?
FOSTER: Germany is scrambling to shut down thousands of eggs that may be contaminated by poisonous industrial residue. In Lower Saxony alone, about 1,000 farms have been shut down after buying animal feed tainted with dioxin.
For details, Fred Pleitgen joins me live from Berlin.
How widespread is the problem -- Fred?
FREDERIK PLEITGEN, CNN CORRESPONDENT: Well, it is -- it is very widespread, Max. I mean this is something where we first learned about this around Christmastime, when the first eggs were actually tested positive for dioxin residue. And right now, if you look at the current situation, it's really spreading across Europe. What we've learned is that about 130,000 possibly dioxin-tainted eggs have been exported to the Netherlands. And some of those eggs were then reprocessed and some of the reprocessed goods from those eggs were actually sent to the U.K.
So this is now currently affecting three countries here in Europe. So it is a situation where a lot of consumers in Europe, especially, however, of course, in Germany, are very wary of the situation. And there are some groups here in Germany who are telling people that you really have to be careful and see what kind of eggs you're actually eating.
Now, of course, one of the big questions that people here have right now is who's going to be held liable for this?
Who is going to pay for this?
As you said, more than 1,000 chicken farms in -- in Lower Saxony alone, about 1,500 in all of Germany, have had to be quarantined. And so those farmers are losing money everyday. And the supply chain, of course, is also losing revenue every day.
So, certainly, this is quite a big situation here in Germany, one that's been going on for a little bit, Max, but one that's also seen some pretty major development in the past 24 hours -- Max.
FOSTER: And I notice a company has been raided by police, hasn't it?
Does that suggest that there's been some sort of criminal action here or is this just a mistake?
PLEITGEN: Well, I mean, that's one of the things that investigators certainly are trying to find out right now. There are some politicians -- there's also some law enforcement officials who say that they believe that there might have been million intent and criminal energy behind what happened.
Essentially what people believe is that somewhere within the process to make a fatty acid that's actually then used to make animal feed at some stage of the process, that some of that had industrial rev -- residue in it that was then also containing dioxin. It's not really sure how that got in there.
Was it neglect, was it a mistake, or was there, in fact, criminal energy involved, possibly to keep the prices low for producing this stuff?
So certainly that's something where a criminal investigation is ongoing. As you said, yesterday, the premises of this company was raided by police.
However, on the other hand, the other thing that we've heard from law enforcement officials is that it was actually the company itself that came forward and said that they had this problem with the industrial residue in their facilities -- Max.
FOSTER: Fred in Berlin, thank you very much.
Back with you as we get more developments on that story.
Now, this isn't the only time eggs have featured in a scandal. Last year, more than half a billion eggs were recalled following a nationwide salmonella scare in the United States. An Iowa egg producer was accused of putting too many birds in cages and failing to treat injured chickens.
In 2008, melamine-tainted eggs caused a widespread health scare in China. At least four children died. Tens of thousands felt ill as products were recalled throughout the world due to contamination fears.
And 10 years before that, Britain suffered its own salmonella scare. Former health minister, Edwina Currie, caused a furor by announcing that most of the egg production in England was infected by salmonella. As a result, sales dropped 10 percent and many egg producers went out of business.
Now, as we touched on earlier in the show, Queensland, Australia recorded its wettest year on record last year and 2011 hasn't started on a great note either. All sorts of problems there.
Meteorologist Pedram Javaheri is at the Weather Center with an update for that region -- hi, Pedram.
PEDRAM JAVAHERI, CNN METEOROLOGIST: Hi, Max.
Yes, the rainfall totals here really have been something to worth noting -- worth noting in the last couple of days. And, you know, just when you thought things were quieting down, you take a look at some of these numbers and the past 24 hours, right along the coastal regions of Queensland, some of those areas, of course, within the river communities or a little bit inland have put up with a lot of rainfall. And now the coast up to 100 plus millimeters of rainfall and going out toward portions of Point Lookout, getting some 100 millimeters of rainfall.
And the culprit for this is a storm system that's just parked offshore here and a trough setting up that has pumped in some of the moisture. Now, the heavy rainfall, that was in the area. Some localized flash flooding is a possibility associated with this and, obviously, could worsen the river flooding. And the main concern with this is the high pressure regions offshore. It could actually force the storm system to retrograde back out toward portions of Central Queensland, causing more problems.
And just take a look at some of these photographs coming out of Rockhampton again. And it just shows you the devastation. When much of the roadways are covered, when much of the communities, the infrastructure, of course, a lot of folks affected by this in a very large area. And the numbers certainly really tell all the ales here, with over 1,000 millimeters of rainfall when you average out the observation points around Queensland. That's the wettest year on record for them.
Down south in Victoria, they are dealing with their third wettest year, that being in 2010, and even across Southwestern Australia there, across Western Australia, a different story. You can kind of see back here on satellite imagery -- bone dry across the west, out to the south. We have a feature beginning to push in. As this moves in, some showers possible across New South Wales. And you can kind of pick out the circulation right here with that storm system that's caused all the problems in the last 24 or so hours across the areas of Queensland. And, again, up to 20 or so millimeters possible, with some locally heavy rainfall in their forecast.
Quickly, take a look at what's happening in Europe. We have a nice mild westerly flow setting up here, with some showers pushing their way in. But most of them in the way of rain showers and not snow showers. To get some snowfall, you've got to work your way a little farther north, toward portions of Scandinavia in the next couple of days.
But how about some of the warmest temperatures here since November working their way back over toward Western and Central Europe?
That's the good news with this forecast. Still, until we get to that point, I think some time by Friday afternoon, we still do have a possibility of some delays out of Copenhagen there, with snow showers in your forecast.
But when you look at the color contours here, notice the yellow, the oranges. They begin to push into much of Central Europe. Temperatures are going to warm up. But Berlin goes to four and five in the next couple of days, well above the average. Again, that's the warmest reading you've seen in a couple of months. And even when you talk about Paris, look at these readings -- double digit temperatures returning when the average is about six. And, of course, having deal -- dealt with so much snowfall, Max, probably an improve forecast, at least as far as the temperatures are concerned, in Europe.
FOSTER: OK, Pedram.
Thank you very much, indeed.
We'll be back in a moment with details on where you can catch CNN's interview with George Clooney.
Stick around for that.
FOSTER: Well, we were talking earlier about the mood on the markets ahead of Friday's U.S. month jobs report. Well, investors are especially interested in how small and medium sized businesses are faring. Brand new tax breaks could give them new incentives to hire this new year.
Maggie Lake visits one New York business that's already adding staff.
MAGGIE LAKE, CNN CORRESPONDENT: New York businesses, like many around the country, have been reluctant to hire. Jobs have been the missing element to the recovery here in the U.S.
But that may be starting to change, as we found out on our visit to the Brooklyn Navy Yard.
(voice-over): The Brooklyn Navy Yard is home to many small and medium sized manufacturing businesses, including the Ares Printing and Packaging Company. Off these presses come specialty packaging used by hundreds of corporations, ranging from jelly bean makers to cigar manufacturers.
Ares has hired five full-time employees in the past few months and co- owner Jerry Filippidis says that's just the beginning.
JERRY FILIPPIDIS, ARES PRINTING AND PACKAGING: Right now, we currently have about 85 employees. And hopefully, in 2011, we should, hopefully, be bringing on at least another 10 to 20 people.
LAKE (on camera): That's a lot.
FILIPPIDIS: It is.
LAKE: So are you doing that because the orders are already in or are just anticipating that the economy is going to get better?
FILIPPIDIS: We ha -- we have a little bit of both. We have some very strong orders coming in and we are anticipating -- hopeful for a very successful 2011.
LAKE (voice-over): Ares, whose sales grew by more than 20 percent last year, is not the only company upbeat about its prospects. Recently, budget retailer, Dollar General, announced plans to hire 6,000 workers this year. And engine maker Cummins says it will add 2,500 jobs. In fact, 14 percent of companies recently surveyed by Manpower said they hope to add staff in the next few months.
Helping drive Ares' decision to hire, new stimulus from Washington.
(on camera): The government has been trying to target small businesses with some tax issues, to sort of spur hiring.
Has that influenced you at all?
FILIPPIDIS: It has a little bit. You know, we -- we have taken the - - the new employee hiring tax credit and also we're looking at some newer equipment where we could use the depreciation in the first year and take a large portion of it.
LAKE: With business conditions still choppy, some small to medium sized businesses are worried about taking on permanent workers. But at Ares Printing, they think it's worth the game.
(voice-over): In fact, all Ares' workers are full-time employees. Ares says it's such a specialized firm that it makes sense to hang onto the people they've spent time training. The company's most recent hire, Adriane Richburg (ph), works in the customer service department and has been searching for steady employment for some time.
(on camera): And what was your reaction when they told you that you were hired?
ADRIANE RICH, NEWLY HIRED AT ARES: I didn't really believe it. I was like, OK, yes, I'll go back for another, then I'll go back for another one and then I'll never hear from them again.
LAKE (voice-over): She's upbeat not only about her future, but for her friends still looking for work.
(on camera): When they hear that you got a job it sort of spreads a little...
RICH: Then it gives them a little -- yes.
RICH: Yes, they're like, OK, well, we won't stop looking yet. We won't just settle, we'll continue to look.
LAKE (voice-over): To be sure, the U.S. economy still needs to create millions of jobs to make up for those lost since the worst of the financial crisis. But small firms like Ares, traditionally the engines of U.S. jobs growth are helping improve the employment picture one hire at a time.
UNIDENTIFIED FEMALE: So this is all new.
LAKE: Maggie Lake, CNN, New York.
(END VIDEO TAPE)
FOSTER: Now, in three days now, Sudan goes to the polls to vote on an historic referendum which could split Africa's largest country into two separate nations. The activist and actor George Clooney is in Southern Sudan ahead of that vote. It's a cause he has championed for years and he spoke to CNN about the mood on the ground.
(BEGIN VIDEO CLIP)
GEORGE CLOONEY, ACTOR/ACTIVIST: I have to tell you, for the first time since I've been here -- and I've been here -- this is my fourth time - - there's a real excitement here. There's a feeling that -- that the -- a new nation is going to be formed and it's an iav -- inevitable. And I think they're very excited about that.
(END VIDEO CLIP)
FOSTER: We'll hear what else Clooney told CNN's Becky Anderson tonight on CONNECT THE WORLD. She also speaks with another long time activist, who is John Prendergast. You saw him there. That's around -- that's in just a couple of hours from now here on CNN.
Now, after the break, we're going to check the markets for you and see what's going ahon -- going on ahead of that big jobs report tomorrow. That's what everyone's talking about on Wall Street, at least.
We'll have the details coming up.
FOSTER: We'll take a look at how the U.S. markets are faring. All eyes, really, on Friday's monthly employment report. And the general feeling is that it's going to be good news for U.S. employment. But we're really sort of treading water until then, down .3 percent.
A number of retailers have been reporting some numbers and this is a worrying side of the U.S. economy right now. Costco and Gap's shares have been dropping on poor sales figures. And that might be the picture pretty much in Christmas for many Western markets.
Here are the closing numbers for Europe. London's FTSE 100 ended the day down, driven lower by energy and mining stocks, mainly.
Over in Frankfurt, the market was boosted by growing confidence amongst manufacturers. But a number of European banks were lower on worries about the ability of some countries to manage their budget deficits.
BP slid .5 percent on Wednesday's report into the Deepwater Horizon disaster, which found the company didn't have enough safety measures in place.
Let's just have a look then at the picture before we go. Since the April 20th disaster, BP's shares have tumbled, of course, since then. Two months on, they halved in value. Since then, those shares have been recovering. You can see the up tick there. They're still worth 24 percent less than they were before the accident, but they've been ticking up in recent months.
That is QUEST MEANS BUSINESS.
I'm Max Foster in London.
Stay tuned for "WORLD ONE," which starts right now.