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QUEST MEANS BUSINESS
Bernanke On Capitol Hill, Hits New Congress With Reality That Jobs Are Still Hard To Come By; Renault "Spy" Scandal; Marrying Up?; Marketplace Africa: Cosmetics and Cell Phones
Aired January 7, 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, QUEST MEANS BUSINESS: Disappointment, the U.S. economy is still not creating jobs.
Don't rule out default, former IMF Chief Economist Ken Rogoff tells us Europe's crisis will get worse.
And feminism in reverse, why more and more women are marrying up, it seems.
I'm Max Foster in for Richard Quest. This is QUEST MEANS BUSINESS.
Hello to you.
Today's job numbers paint a mixed picture for the U.S. labor market. While there was much to cheer, there was also plenty to disappoint. Let's start with the bad news then. The number of non-farm jobs created rose by 103,000 last month. But it was far less than expected. Analysts had been looking for a gain of at least 150,000. But the other closely watched number in today's report was a big surprise. The unemployment rate dropped to 9.4 percent from the 9.8 percent previously.
On a visit to Maryland, earlier today, President Obama was keen to play up the figures.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We saw 12 straight months of private sector job growth. That is the first time that has been true since 2006. The economy added 1.3 million jobs last year. And each quarter was stronger than the previous quarter, which means that the pace of hiring is beginning to pick up.
(END VIDEO CLIP)
FOSTER: Mr. Obama also named a new director of his National Economic Council today. He chose Gene Sperling, the Clinton era veteran. Saying he was-he had a record of helping turning U.S. budgets into surpluses. A key role filled, then, there.
There is much anticipation over what Fed Chairman Ben Bernanke would say, meanwhile, about jobs during his testimony before Congress on Friday. His first trip to Capitol Hill since the Fed embarked on his controversial new round of quantitative easing.
Maggie Lake joins us for that part of the story, from New York.
What did you make of it, Maggie?
MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT: Yes, Max, Bernanke not saying anything terribly new. But you know from the moment he took the post as chairman of the Federal Reserve, the head of the central bank, he said he was going to be as plain spoken as possible and as transparent as possible. And he certainly did that today on the issue of jobs; giving a very sober assessment of the labor market here. Have a listen.
(BEGIN VIDEO CLIP)
BEN BERNANKE, CHAIRMAN, FEDERAL RESERVE BANK: The economic recovery that began a year and a half ago is continuing, although to date at a pace that has been insufficient to reduce the rate of unemployment significantly. At this rate of improvement (AUDIO GAP) four to five years for the job market to normalize fully.
LAKE: Four to five years to normalize. That is not the positive spin you maybe heard coming from President Obama. Although, of course, both are right. And listen, we saw evidence of that ourselves just yesterday, Thursday, here in New York. There was a job fair being held not far from our studios and there were hundreds, as you can see, there were hundreds of people on line. So we have a lot of digging to get out of that hole, we lost so many jobs. So the picture improving but not robust enough to really celebrate; a bit of a disappointment for the market.
But Ben Bernanke also did have some positive things to say about the overall economic recovery in general. Saying that it is going to continue to get stronger, he expects 2011 to be better. He says business spending, consumer business spending picking up. He also talked about quantitative easing, QE2, that old chestnut. And defended it once again, saying they have got an exit strategy when they need it.
And finally, some talk about the deficit. There has been a lot of talk about the debt ceiling and raising it here. It is going to be a big political battle in the U.S. Bernanke doing what he could to urge lawmakers to get serious about trying to bring that deficit down, Max.
FOSTER: So, Maggie, things looking up for the U.S. economy, but not enough for the Fed to change its policy, from what you read?
LAKE: Yes, that seems to be what Bernanke was saying today. And it is interesting to point out, Max, you know we had expectations for a really good number today. The feeling that as we started out 2011 that the recovery was really taking hold, people really optimistic. Everybody hates QE2. They like to criticize it. But these kinds of numbers seem to justify Ben Bernanke's insistence that the economy still needs the Fed's help. So, they didn't say anything specific about the timing, defended the fact that they put it in place. So it seems to be here through what they have already telegraphed until its over, no word on if they will continue it past that. So, steady as she goes, Max.
FOSTER: OK, Maggie. Thank you very much indeed.
Let's get the reaction then from Wall Street. Stock markets have been less than impressed by all of this, it seem. Alison Kosik is standing by at the New York Stock Exchange.
I guess, we were expecting better news, weren't we, Alison?
ALISON KOSIK, CNN FINANCIAL CORRESPONDENT: Oh, exactly, and you said it. The reaction here is less than impressed. Because you know the U.S. economy added about a third less jobs than everybody was expecting. You know, every one is also talking about that big drop in the unemployment rate, falling to 9.4 percent. Sure it is a huge move, but I'll tell you what, Max, traders are telling me they are skeptical about this figure and they are actually confused by it, because they want to know how can the rate fall so much. And the number of jobs is still not there, where they would like to see it.
One analyst explained it to me this way. They said that half the drop that is reflected there is of the more jobs that were added and the other half is reflected in a smaller labor force. What has happened here is that people have gotten discouraged. They have given up looking for work all together. So the pool of job seekers that is being measured in this unemployment number, it just got smaller. So it seems like a great thing that the unemployment rate just dropped a huge amount, but you really have to see what his behind it.
It is kind of the reality check here that it didn't count more than a million people, in fact, 1.5 million people literally stopped looking for work and have just kind of given up. So that is the reality that sure we are on this up swing with the jobs market. We are seeing additional jobs being added each month, but it is really not enough to keep pace with the population growth, Max.
FOSTER: Alison, thank you very much indeed.
Well, those jobs numbers may have missed most analysts forecasts, but former IMF Chief Economist Ken Rogoff thinks they may have been expecting too much.
(BEGIN VIDEO CLIP)
KENNETH ROGOFF, FMR. IMF CHIEF ECONOMIST: I think actually it was mildly encouraging. People were starting to get euphoric, and think that the whole slowdown was going to turn on dime. And there was really no reason to expect that. I think the number was below expectations, but the Fed won't just look at this month's number, 100,000 instead of 150,000 jobs added, as expected. They are going to look the upticks that happen for November and October. They were revised up. If you look at the whole package, I think it was a good picture. It just wasn't the heady one that markets had seem to be expecting.
FOSTER: You got the private sector accounting for all of these jobs, haven't you? Whilst the public sector is shedding jobs, so that is a positive sign as well.
ROGOFF: Absolutely. I mean, the state and local governments are hurting, just like some of the periphery countries in Europe. They are hurting and they are shedding jobs, while the private sector is growing. The problem is, it is not robust enough to really eat into unemployment. To really take those 14.5 million unemployed people and put them back to work. We need job growth at least double for a couple years, in order to really eat into unemployment. We are not seeing that. I don't think we're going to see it next year. I think it is going to be like this, good, treading water, getting a little better, but not the kind of robust growth that some analysts were seeming to expect.
FOSTER: All right. Ken Rogoff, there. We'll hear more from him actually a bit later in the program to explain why the European debt crisis may get even uglier, according to him, in 2011. Back in a moment.
FOSTER: The holiday is over, as debt yields jump in these peripheral economies, the yellow ones. Fears that a debt crisis sequel could be reignited. The president of the European Central Bank says more needs to be done to secure the euro's future. The leaders can't afford to rest halfway. CNN's Jim Boulden has been keeping a close eye on the bond markets today.
Exciting time in those bond markets.
JIM BOULDEN, CNN FINANCIAL CORRESPONDENT: The holiday is over. We are back to where we were, I think, in mid December. Not a lot has really changed actually. A lot of people worried about this country, Portugal. The 10-year bond yields were up. And Portugal hit a euro era high of nearly 7.2 percent today. Also we saw smaller rises in bonds for Ireland, Greece, and crucially, Spain.
Now what is all this coming up? We have, next week, a big bond auction. We are going to see bonds in Italy, auctioned off on Thursday, Spain on Thursday, Portugal on Wednesday. So everybody is going to be looking at this. Everyone knows these bonds are good, off. It is not about the fact that they can't sell the bonds, it is about how high the yield will have to be. How much pain will the government have to go through to get these bonds sold?
Because even countries like Portugal say, you just cannot keep bonds at this price. It is not sustainable for the long run. So a lot of people, of course, wondering how long until Portugal will have to go to the European Union, will have to ask for money the way we have already seen Greece and Ireland. Portugal continues to say it won't need to do that, but that is what everyone is looking at.
Now, as Max said earlier, Jean Claude Trichet was speaking today to a group and he says that governments simply aren't doing enough. There must be more deficit reduction. There must be more ambitious reform. The proposals so far are not strong enough. And he keeps reminding governments and the markets that the European Central Bank cannot replace government responsibility, Max.
FOSTER: OK, Jim, thank you very much indeed.
Now, Ken Rogoff, who we've heard from earlier, former IMF chief economist and now Harvard professor, fully expects more European bailouts this year. He told me Portugal looks like it is very likely to be next on the hit list.
ROGOFF: I don't see how Portugal is going to escape the grasp of the IMF and an EU bailout the way Greece and Ireland has. And I think markets are sort of expecting that. That won't be the end of it either. I think it is not over for Greece or Ireland. We may well see even a debt restructuring further down the road. But this year, at the moment, we're going to see more bailouts.
FOSTER: So, a bailout for Portugal. Are you talking about Greece and Ireland defaulting?
ROGOFF: Bailout for Portugal. And Greece and Ireland, Portugal, all potentially, yes, defaulting, restructuring their debt. They will try to find a gentle way to do it. They are trying to push it down the road for as long as possible. They are giving them money so that they can get by, but their debt woes are pretty profound, their growth is slow, I don't think it is going to be very easy for them to last indefinitely.
FOSTER: We've also got some pretty bad news on Italian bonds. They are not looking too great at the moment, either. All the Spanish bonds, but what do you say about those countries?
ROGOFF: Well, Italy has a lot of cards to play, because a lot of the debt held, domestically, by Italian citizens, and for better or for worse, the Italian government has lots of tools to ram it down their throats. So there we may see some repression, so to speak, the way it was in the `60s and `79s. Spain, that is the frontier state. That is the one where the EU is really going to need to find a way to draw the line.
The problem is, is that if people think Spanish central government debt is going to be guaranteed, they worry that the central government is going to guarantee everything else. And I think that is the debate. How can the EU persuade Spain to allow some debt restructuring in its municipals, potentially it is state banks, without just backing it and reaching a level where they can't back it. That is still in play.
FOSTER: Isn't a Spanish bailout inevitable if we have a Portuguese bailout, because so much Spanish money in Portugal?
ROGOFF: I would certainly say it is more likely than not. Inevitable is a little strong. It depends on the central government, whether it lets smaller regions, some of its private banks, go. Like in Ireland, the problem was the Irish government guaranteed all the banks. If they hadn't done that, if some of the banks were allowed to restructure, the government wouldn't be facing that prospect. That really is the key question in Spain. The government's debt, the central government's debt is manageable, but the whole country can't get out of this without some restructuring. Nobody does after a recession like this.
FOSTER: I know that you are confident that the euro will survive, but surely, if countries have defaulted already, default again, they are going to be investors who just don't believe in the euro, just can't survive without that investor support, can it?
ROGOFF: Well, you know, what doesn't kill you makes you stronger. And out of this we'll presumably come a euro, with a better thought out fiscal system, with clear lines on what countries can and cannot do. I mean, I think, in retrospect, the Maastricht Treaty, the 60 percent limit on government debt was brilliant. They don't obey it. But it was great. But they didn't draw the line on private debt. That has been causing problems.
FOSTER: Ken Rogoff speaking to me earlier. Let's have a look at the European markets, then, to see what impact all of this had on them. The end of the day, in the red, that was due to those euro concerns but also that disappointing jobs report from the United States. Weighing down very much on banking stocks, which were the biggest loser across the board. Soc Gen down nearly 3 percent; Deutsche Bank down more than 1 percent. And mining shares also took a hit. HP Billiton lost around 1 percent here in London.
Now there is a growing speculations that Facebook is giving up to going public after Goldman's recent cash injection. After the break we'll be joined by one expert who says it is a win-win situation for both sides.
FOSTER: On Thursday we brought you the Goldman likes Facebook story, and today it is Facebook liking the look of an IPO. A report suggests that the world largest social networking site has so many investor fans, that it could be forced to go public. In a document sent to a select group of potential investors, Facebook revealed that it expects to have more than 500 shareholders this year. That means, according to the SEC rules, they will be forced to open its books, or go public within-with an IPO.
Now, web companies are currently scrambling to find new ways to boost profits. And here is an insight as to why. According to figure from Web site, business is Insider.com. This chart shows how much one user is worth to the following sites. Well, it shows that on average an Amazon subscriber will spend $189 a year. That compares with $39 for someone eBay. Another $24 for a Google user. Yahoo subscribers spend just $8 and- wait for it-still double to$4 a year for a Facebook subscriber. Although many analysts do expect that figure to rise over time. But it shows the value of each of the subscribers to those cites.
Our next guest describes Goldman's investment in Facebook is a win- win situation for both companies. Let's find out why, Lou Kerner, is a vice president of equity research at-uh, -uh, Wedbush Securities, and he joins us live from New York.
Thank you so much for joining us. You must be rather pleased with your forecast, it is all coming true isn't it?
LOU KERNER, WEDBUSH SECURITIES: Yes, Facebook just continues to outperform. And Goldman's investment in Facebook is just another validation of, you know, the fact that Facebook is the most transformational media company of our time.
FOSTER: You expected this to happen basically, didn't you, that we would work this amount of money, which therefore would lead to investments
KERNER: Well, we have been tracking Facebook for a long time. And their growth has really been unprecedented. In the history of the Internet. And we know that monetization of those people come with time. We saw your chart that you just put up with only $4. That is a number that is going to grow significantly over time. As well as their user base. Even though they are 600 million members today, Facebook is really aiming for ubiquity. And there were more than 2 billion users on the Internet today. So they still have a lot of growth in front of them.
FOSTER: But why don't we look at the Goldman deal? They have placed a certain value on Facebook, which lots of people just do not understand, because if you look at the profitability it doesn't measure up to that. And we don't want to go back to the `90s, when you had all these internet companies being valued based on what they might earn, not what are earning. So aren't we heading for a fall now?
KERNER: Well, I think every company gets valued based on what they are going to earn. The only difference between Facebook and other companies, is that Facebook's growth trajectory is simply, significantly higher than almost any other company, that people are familiar with. And so when you are investing on Facebook today, you are not investing for the revenue they are generating today. But you are investing for the revenue they are going to generate in 2014, and 2015. And we know that they are on a significant trajectory. The problem then with 1999, is that we had a lot of companies who are going public and getting funded, who had very little traction in terms of revenue.
Facebook has very significant traction and it has grown at a very significant rate. And when we look at transactions in the private market. There has been an increasingly liquid market for Facebook shares, in the last year. And the latest transactions, there, have valued Facebook at $60 billion. So we actually believe that Goldman Sachs and the investors are getting a discount-
FOSTER: What about companies like AOL, MySpace is shedding employees, isn't it, right now? We can go back to CompuServe. They are all sorts of companies which analysts told us would dominate, would be the Internet. Everyone is thinking about Facebook now. Why do you think Facebook is different? We've heard it so many times before.
KERNER: Well, look, I mean you are talking like the Internet is the only place where that happens. You could say that about General Motors, you could say that about Lehman Brothers. I agree with you to the degree that the only thing that is constant is change. And there could come new technologies, new companies that dislodge Facebook.
But you know we really believe that Facebook is its way to more than a billion members. The largest Internet the world has ever seen. And we have seen other companies like Amazon, that you showed before, like Google, who are early leaders and continue to create significant shareholder value. And we think Facebook is in that same class of shares.
FOSTER: But isn't it just like a trendy nightclub in a city where everyone goes at a particular time, they are all hanging out there. They are there for a couple of years. And then they find a new club. And it is just a club. There is no major commitment to being a member of Facebook. It is not even like Amazon, where you know you can get your reliable products. You can leave it so easily, why could it not just dry up?
KERNER: Sure, we believe that Facebook is increasingly becoming a utility. I agree with you. I don't think Facebook is sexy anymore, like it once was. But the water company isn't sexy, but everybody I know gets their water from the water company, because it gives them significant utility. It might not be the only place that they get water, but all get water from the local water company. And we really believe that the right way to think of Facebook is the say way that think of broadband.
To the degree that 100 percent of the people who have access to broadband and can afford broadband, have broadband. Because your Internet experience is just better on broadband. And increasingly your internet experience on the-is going to just be better if you are a Facebook member. Facebook is rapidly becoming the Internet passport, so it is easier to register on any site around the world, just by clicking a single Facebook connect button.
Facebook is going to be a leading wallet on the Internet, through Facebook credits, when that migrates off Facebook. You can like things on over 2 million Web sites and then your friends know you like that. And increasingly that will be searchable. And you are going to want people to search the things that you like. Such that you are going to be know as somebody with social influence because the higher your social influence, kind of-the better your life.
We really think that we are in one of the most transformational periods in the history of media. Through all of social media, it is not just Facebook, but Facebook is clearly leading this charge.
FOSTER: Lou Kerner, we are going to have you on next year when we are probably going to have an IPO. So, well see how things develop. Thank you very much indeed for joining us.
Now for investing in the product itself is more your thing. From the latest tablets to electric cars and even to Lady Gaga glasses, it is all at this year's CES conference in Las Vegas. Dan Simon joins us with all of today's developments.
These glasses are pretty extraordinary, Dan.
DAN SIMON, CNN CORRESPONDENT: Hello, Max. We're having a good time out here at CES, you know, trying to find some of the products, getting a little bit of buzz. I think this on was really interesting.
This is from a company called VideoNameTag.com. This allows you to basically put anything that has a video image onto a tiny screen and you can put it on a hat, you can put it on, your lapel like I have here. This is me. So I can see waiters, waitresses, having their own video name tags.
But obviously Lady Gaga getting a whole lot of buzz here at CES. She is an officials spokesperson for Polaroid. She unveiled a couple of products yesterday, some glasses, a printer and a new Polaroid camera. You know, everybody remembers Polaroid, when they were a kid. Well, now Polaroid finally getting into the 21st century, getting into digital photography.
This camera, it is just a prototype at this point, but it is a digital camera. But it has also got a printer on it. Say, for example, you take a digital photo, you really like it, boom, you can print the photo right there on the camera. Just like the old Polaroid, you get that instant photo.
The other product that seems to be getting a lot of buzz today, comes from Motorola, it is a tablet. There are some nifty tablets being unveiled here at CES, if you can believe that. But this tablet from Motorola seems pretty special. It is a little bit bigger than an iPad, it has an HTMI cord, so you can get your high definition videos on your television. It has two cameras for video chatting. It has a forward camera, and a back camera.
And finally, just a little bit ago, this was just coming out here at CES, Alan Mullaly, the CEO of Ford, just announced that there is going to be a fully electric car coming from Ford to compete with the Chevy Volt. It is going to be call the Ford Electric Focus. So, that is just circulating here at CES, and of course electric cars getting more popular here in the United States and around the world. So Ford now entering the fray, Max.
FOSTER: OK, Dan. Thank you very much indeed. We'll let you get back to one of those gadgets and put the hat on, it is an extraordinary thing
Spy scandal, economic war, are just some of the ways France is describing suspected espionage at one of its star companies. We'll have a look at what Nicolas Sarkozy is doing about it. And we'll examine the wider worries of corporate skullduggery.
FOSTER: Welcome back. I'm Max Foster. You are watching QUEST MEANS BUSINESS. And these are the latest news headlines.
FOSTER: We'll bring you more from Paris and CNN's Jim Bittermann in just a moment.
But right now, let's look at the bigger picture of corporate skullduggery -- our word of the day -- and its fallout in the world of Formula 1. McLaren got hit with a $100 million fine for spying on rival Ferrari. More recently, U.S. cables released by WikiLeaks showed diplomats blame China for hacking into Google's systems.
And staying with tech-based battles, a jury decided last autumn that business software giant, SAP, should pay Oracle $1.3 billion over the appropriate or inappropriate downloading of Oracle software.
Earlier, I asked our senior international correspondent, Jim Bittermann, what he's hearing in Paris.
JIM BITTERMANN, CNN CORRESPONDENT: Not a lot that's been totally confirmed. But we do know a few facts. One of the things is that the -- the three employees have been suspended. The company said this morning that they are definitely going to pursue legal action against one or perhaps all three of the employees.
We know that it's a very serious matter. The industrial minister said this morning that they're taking it all very seriously. And we know that it involves electric cars.
Now, beyond that, there's a lot of media reporting going on here about exactly who, for instance, was getting this information that these executives may have been leaking. And on that score, that the media is reporting is that it may be some Chinese concerns that were involved getting this information.
But as far as the company is concerned, very little is being confirmed.
Here's what the -- a senior vice president from the company had to say earlier today.
(BEGIN VIDEO CLIP)
CHRISTIAN HUSSON, RENAULT SENIOR VICE PRESIDENT: The suspension of three group executives was decided following an investigation launched by the Renault Group's compliance committee. Renault decided to take action because these are serious acts concerning people with extremely strategic positions at the Group.
The investigation is underway. We are examining all legal act options, which will inevitably result in legal actions.
(END VIDEO CLIP)
BITTERMANN: So, Max, you can see that the company is playing it very cautiously. We're expecting more information, though, over the next three or four days. In fact, the company is going to release its results for last year on Monday and perhaps at that point in their communique, they'll say something about this incident. They're going to have to sooner or later -- Max.
FOSTER: OK. And is this is a criminal case or is this an internal matter?
How does it work in France?
BITTERMANN: Well, at the moment, it's an internal matter, but it could very well turn into a criminal case depending on what they found. One of the things that's amazing about this is apparently it's been going on since last August. The company, back then, started investigating these three employees -- very highly placed employees. One of them, whom I should say, is right at the top of the food chain as far as Renault is concerned -- he sits on the 30-member executive committee that -- that basically reports directly to the president.
So it could be very damaging for some of the senior managers, including the president, because, after all, here's someone that was promoted up the system and then turned out to be an industrial spy -- Max.
FOSTER: And it really does illustrate, doesn't it, what's at stake with these new technologies in an industry which is struggling to keep up with the -- the costs of fuel, effectively.
BITTERMANN: Absolutely. I mean one of the things that Nissan, the partner of Renault, and Renault have been working on for several years now is this billion dollar program involving thousands of employees to develop a good electric car that's viable, that has long distance capability, that sort of thing.
They've got four models that are supposed to come out in 2012. And they've been working very hard at that. And these are patents, we believe, that were -- this is what's been reported, that there are patents that have been leaked to some other -- some other company, that, in fact, they are involved with these electric cars.
So, yes, there's a lot at stake. There's a lot of companies around the world who are working on electric cars, trying to come up with low polluting vehicles. So, yes, it's a -- it's a very big market and there's a lot of pressure.
(END VIDEO TAPE)
FOSTER: Jim Bittermann.
But Renault's stock price didn't feel the pressure. It finished Friday's session higher, gaining almost 1 percent and briefly touched a 52- week high of 47 euros 80. I guess it shows they've got something to steal.
Well, coming up after the break, what women want -- we'll be asking why an increasing number of women secretly hope to marry for money.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I don't think it's very important, as long as you love the other person.
Everyone can have money.
UNIDENTIFIED FEMALE: It's a hard one, really. I guess it's more about being stable with -- with your partner and knowing that you can trust them and that they're going to -- each other are going to provide for each other. But it's not the sort of thing you have to be rich, but I guess to be comfortable is -- is quite important, I think.
UNIDENTIFIED FEMALE: Money is not that important in marriage, but a relationship, what really does important.
UNIDENTIFIED FEMALE: It might be a factor I would consider, but it's not the deciding factor. It's nice. It should be about love in the end.
(END VIDEO CLIP)
FOSTER: Well, does it really come down to love in the end?
A new study offers its own view of what women want -- rich husbands, not careers.
That's according to findings from Catherine Hakim.
She's a senior research fellow at the London School of Economics.
And she says it's a myth that most women want to be financially independent.
She's here with me now in our London studio to discuss her report.
Thank you so much for joining us.
Your report is vast.
But in terms of marrying up, what does it actually find?
CATHERINE HAKIM, LONDON SCHOOL OF ECONOMICS: Well, the main finding is that whereas in the 1940s, only one in five women wanted to marry a man who was substantially better educated and higher earning, now it's double that figure. And there's been -- "The Sunday Times" has just done a poll, which I got the results for just before...
FOSTER: For the United Kingdom?
HAKIM: For the United Kingdom...
HAKIM: -- just before I came in. And to their astonishment, it has to be said, the poll totally vindicates me. Two thirds of all women said that ideally, if they could, they would prefer to have married a man who was earning substantially more than themselves.
FOSTER: So it is about marrying money, is it, or buying security or buying a better education?
What -- what do they buy -- what are they buying into, as it were?
HAKIM: Well, a lot of women know that when they have children, they're going to end up spending time out of the labor market, either in part-time work or not working. And, obviously, it -- it's helpful if you have a husband who can afford to support a family without you having to go back to work then. Obviously, it's financial security, as well.
So these things still matter, even if women have access to the labor market, family work and child rearing still play a part in women's lives and a high earning husband is a great help.
FOSTER: Why do you think there has been this change over the last 50 years?
HAKIM: Well, that's the surprising thing, because, of course, more and more women are going into higher education and getting better qualifications than they ever did in the past. But then that's also true for men. So the numbers of men who are more better educated and highly educated are also increasing in numbers. And it's a trend...
FOSTER: So it's more likely that you're marrying up by default anyway, because...
FOSTER: -- men are...
HAKIM: -- it's more possible...
FOSTER: -- better educated than they were.
HAKIM: -- but it's a trend across Europe, which is the most interesting thing. It's not limited to Britain at all.
FOSTER: I can hear feminists screaming at the TV right now.
What do you think this says about the feminism cause?
HAKIM: Well, I've been attacked for implying that women want to stay at home and don't want to have careers and I'm simply saying they do want to have careers, but they're not as career-oriented as men are. And they're also family oriented, as well, and they want to balance a -- a reasonable work-life balance. And that means that the traditional division of labor with the man being the main earner and the woman having a greater role in family life still carries on for a lot of women, not all women. Something like a fifth of women are very career oriented and are likely to work full-time continuously throughout their life in exactly the same way as men.
FOSTER: And this is the point, isn't it, because people are different?
They have different aspirations and wants.
But your suggestion is that, over time, women are finding that they -- they would like increasingly not to have it all and would like to have less and be at home more, is that right?
Am I saying...
HAKIM: Well, this poll that's just been done this week shows that women were asked, if you had the choice, if it were possible, what would you prefer to do after you had children?
Would you prefer to stay at home and look after them yourself or would you prefer to go out to work?
And the majority preferred to stay at home and look after the children themselves.
So things like the European Commission saying that what women really want is more and better child care just isn't true.
FOSTER: OK. And I -- I'm obliged to ask this question.
Have you married up?
HAKIM: No, I married equal.
FOSTER: OK. Thank you very much, Dr. Hakim, for joining us.
Let's check in on the weather now.
There is snow in the United States. It's going to start causing problems this weekend, we understand.
Guillermo can give you an update on that.
GUILLERMO ARDUINO, CNN METEOROLOGIST: Yes, I was checking out the airports right now. And Newark, LaGuardia, JFK, Cleveland, Indianapolis, Cincinnati, St. Louis, Missouri and Minneapolis-St. Paul are reporting snow, all of them. And those are major airports.
The problems may come this weekend to Atlanta, as well, especially Sunday into Monday. We're going to get some snow, probably. And we will see delays.
I'm talking to all those international travelers who are coming to the United States this weekend and are going to be facing problems.
In the Midwest, Minneapolis-St. Paul, Cincinnati, again, big airports. Then, in the Northeast, LaGuardia, JFK, Boston, especially in the New York area -- Newark and Atlanta here in the south, a big airport, too. So, you know, it's going to get cold. This area of cold weather is expanding.
So far, this is what we see. For Saturday afternoon -- well, the computer is picking up snow. We -- we know it's going to be significant on Sunday evening here, in Atlanta. In fact, employees are expected to stay at the hotel here next door, across the street, the Glenn, the -- the Omni, because Monday it's going to be a problem to make it to work.
JFK, you see with snow there.
Los Angeles here, fine. Where we have rain in the States, you see in Portland, Oregon and Seattle. But, you know, it's very typical.
These are the updated delays that we have right now as we speak, when it is 2:42 p.m. Eastern time. LaGuardia, JFK, two hours, 40, 45 minutes; Newark, one hour 25 minutes; San Fran with rain and Fort Lauderdale there increasing delays.
This is the official forecast, also, on the weekend, for New York that we are seeing snow as we speak. And this is not going to end, especially in New England. The next 24 hours, we're going to see some snow.
Also, I was checking out -- and Edinboro is reporting snow in Scotland.
But you know what?
We are seeing this pattern again. The milder conditions are coming from the south. So it is much better. We are going to see some rain.
I couldn't spot many -- many cities reporting snow, in fact, right now, many big airports.
This is the same pattern previously, actually, Max. It's cold in the north and much warmer or less cold in the south -- back to you.
FOSTER: Guillermo, thank you very much, indeed.
ARDUINO: Thank you.
FOSTER: That is QUEST MEANS BUSINESS for the week.
I'm Max Foster in London.
MARKETPLACE AFRICA is up for you next.
ROBYN CURNOW, HOST, MARKETPLACE AFRICA: This is MARKETPLACE AFRICA.
I'm Robyn Curnow here in Johannesburg.
Now, Africa is rich in natural resources. But countries often lack the ability to process those resources, which is why much of what is found here on the continent is often imported back in some sort of refined capacity.
So we're going to take an In Focus look at two entrepreneurs who are doing their small bit to change that. They only use African minerals and products in their skin care lines, as Nkepile Mabuse now reports.
NKEPILE MABUSE, CNN CORRESPONDENT (voice-over): In the heart of trendy Rosebank in Johannesburg, where some of the world's most exclusively international brands are sold, a local company is making its mark on the global cosmetics scene.
RENCHIA DROGANIS, OWNER, AFRICOLOGY: All right, let's have a look at your skin.
MABUSE: Africology is the brainchild of beauty therapist, Renchia Droganis. Ten years ago, she was mixing ingredients in her kitchen. Today, she's exporting her products to the U.K., Belgium, Germany, France and the United States.
DROGANIS: My business didn't start with the intention of turning into a huge, successful business.
MABUSE: From sales of just under $400 in her first week in business, Africology is now bringing in nearly a million dollars a month, according to its owner.
DROGANIS: I'm going to start off with the gel, which is made with lovely plant cert (ph).
MABUSE: Her use of natural raw materials, the majority of which are sourced locally, seems to resonate with her eco-friendly customers.
DROGANIS: I've been looking at the prices and they're not exactly cheaper than stuff that's imported. So the ingredients that we use are absolutely of the highest quality. And I cannot afford to use anything cheep. I can't afford to bring chemicals in to fix the products or to maintain product integrity.
MABUSE: In a more modest side of town...
ZEZE ORIAIKHI, MALEE COSMETICS: And the furniture only got here yesterday.
MABUSE: -- newcomer Zeze Oriaikhi has made affordability one of the cornerstones of her beauty business. After living in the U.K. for 12 years, this Nigerian born business graduate says she started having skin problems when she first arrived in South Africa.
ORIAIKHI: There was nothing wrong with the products I was using, because they were fine when I lived in England. I moved here, but they weren't fine, which meant actually they weren't designed for this climate.
MABUSE: That gave way to Malee, products also made from locally sourced natural ingredients, but sold for much cheaper than its competitors. Oriaikhi says she's kept overhead and profit margins low so that her products can sell for a lower price.
ORIAIKHI: I am an African brand and I would like the average African to be able to purchases Malee and -- and keep purchasing it and -- and be happy with the quality and the product that they get.
MABUSE: They may have different styles of running their companies and different prices, but the owners of Africology and Malee agree on one thing-- Africa has become a significant player in the business of skin care.
ORIAIKHI: You've got sort of shea butter everywhere you turn, coconut everywhere you turn.
MABUSE: And both women are doing their bit to change the perception that foreign products are superior.
DROGANIS: We hold the most amazing amount of wisdom in raw materials that really work with the body, rather than against the body. And the world is looking at us. We've got it all here now.
MABUSE: Venturing into a type of business still fairly new on the continent has, however, not been smooth sailing.
ORIAIKHI: If you think of how much raw materials Africa has and how difficult it is to find it and refine it enough to put in a product, you'll be quite amazed. So that's been, probably, the most challenging thing for me.
MABUSE: Challenging but potentially rewarding, as these women try to uncover the true potential of the African beauty business.
Nkepile Mabuse, CNN, Johannesburg.
(END VIDEO TAPE)
CURNOW: Let's take a look at one of the most popular skin care products coming out of Africa, shea butter, which is used as a moisturizer, is essentially the oil extracted from the nut of the shea tree. Now, those thrive across West Africa in 16 West African nations, to be precise.
It's a very labor intensive process. It takes about five hours to extract just a small container of shea butter. And there's also a major employer of West African -- rural West African women, often accounting for about 80 percent of a community's income.
Next, the man who revolutionized the mobile phone industry in India talks about what he hopes to accomplish in Africa.
(BEGIN VIDEO CLIP)
CHRISTIAN PUREFOY, CNN CORRESPONDENT: Why do people talk about mobile phones bringing social development and changing the lives of people.
Do you want to do that or is this a business?
SUNIL MITTAL, FOUNDER/CHAIRMAN, BHARTI GROUP: Well, every basic point, starting point, it's got to be a business.
(END VIDEO CLIP)
CURNOW: Our guest on Face Time this week is Sunil Mittal.
He's the founder and CEO of Bharti, which is widely regarded as having changed the face of the mobile phone industry in India.
Now, his company has expanded into Africa, buying up the assists of Zain in 15 countries.
So he sits down with our Christian Purefoy to talk about cell phones in Africa.
PUREFOY: You're the largest mobile operator in India.
Why have you come into Africa?
MITTAL: Well, I can really preface that by saying, why not?
We have been looking toward Africa for a long period of time. So our entry into Africa has been part of a very well considered and crafted strategy of carrying the low cost, high volume, minutes factory that we have developed in India to be brought into Africa.
So when Zain came to us as an opportunity, we were very quick to move onto that.
PUREFOY: This is one of the biggest, if not the biggest, investment, I think, by India in Africa. Ten -- over $10 billion.
What do you feel that you can bring from India to Africa?
MITTAL: You know, for our business model to succeed, you need to have scale. As you deepen your networks into more rural areas, difficult areas and as you rebalance tariffs, you see the usage is going up, both from existing customers and the new customers that come on board.
So I'm very confident that our model of low cost affordable tariffs and (INAUDIBLE) for networks will bring an amazing difference to the countries that we want to be in.
PUREFOY: Africa, of course, is not India.
What are the challenges you're faced -- you're facing?
MITTAL: I think infrastructure. We are in adamins (ph) deep in the Indian Ocean. We are in mountains in Kashmir. So we have handled tough challenges. But some of the areas here are tougher in terms of lack of a real -- availability of electricity.
And, finally, I say this in India and I can say it here, use telecom as a tool for development and not necessarily as an industry which needs to be taxed the most. While government needs to get its taxes and share of revenues, I think it needs to be more pro-rated so that the companies can plow back investment into more rural areas, making countries Internet ready and bridging the digital divides.
PUREFOY: Your entrenched competition -- you've got some very entrenched competition here MTN.
Is that going to be a challenge?
MITTAL: We are a product of competition. I wouldn't be sitting here in front of you if competition was not allowed in my country. I'm a first generation entrepreneur. We got a chance to compete with the big boys. And we took them on and we did better because we understood the customers' needs better.
When we come here, we see a dominant player like in Nigeria we have one. We are confident that we will shake the market and we will claim our position and the passion with which we will build this company replicated in Africa and particularly here in Nigeria.
But I have to say that out of the 16 countries, we are number one in - - in 11.
PUREFOY: A lot of people talk about mobile phones bringing social development, changing the lives of people.
Do you want to do that or is this a business?
MITTAL: Well, at the basic point, starting point, it's got to be a business. To my mind, if the business does not do well, everything else just becomes the talk. I mean then you can just say that you want to do good things, but you're not in a position to do so.
But this company's DNA is one of social good.
PUREFOY: Everyone talks about Chinese investment into Africa. As we said, this is one of the biggest investments by India in -- in Africa.
Are you finding that you're welcomed here?
MITTAL: Absolutely. I mean I -- I -- I can tell you, India and Africa have had a longstanding history. Our ties are on the recent. Our ties go back centuries.
I have to confess, in the last 10 years, the Chinese have taken a big space that we vacated in Africa of Indians. I personally believe that our coming into Africa has rekindled big activity in the Indian conference boardrooms. We are here to reclaim India's glorious relationship with Africa.
The welcome here, as an Indian company, is absolutely fantastic. I mean we -- we can say that people want a balance between China and India investing into Africa. And our welcome suggests that the African countries are keen for India to take a bigger position in Africa.
(END VIDEO TAPE)
CURNOW: Sunil Mattil there, of Bharti.
Now, here's what's trending this week.
CURNOW: (voice-over): Tantalizing times for tourism in Tanzania. Indian billionaire, Mukesh Ambani, says he has plans to invest in the hospitality industry there. Ambani, one of the world's richest men, says he will hit up the establishment of direct flight between Tanzanian and Asian cities and may build several luxury hotels.
And copper prices have started the new year at a record high, up nearly $4.50 a pound. Africa is, of course, a major producer of copper, with South Africa, Zambia and the DRC leading the way. There is concern in the industry, though, that where there is a boom, a bust is sure to follow. An industry research group says mines cannot keep up with demand and are only producing at about 80 percent of their capacity.
(END VIDEO TAPE)
CURNOW: You can watch all of our stories and interviews online at CNN.com/marketplaceafrica.
You can also follow me on Twitter and e-mail us. All of those details are on the Web site.
But until next week, I'm Robyn Curnow here in Johannesburg.