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QUEST MEANS BUSINESS
Airbus' Big Plane Sales Orders Leads Executive To Say They Are Out Of The Woods; And The NYSE Is Celebrating Today's Highs After The Lows Of 2009; CNN Freedom Project; Tchenguiz Brothers Arrested; China's Clean Revolution; World At Work
Aired March 9, 2011 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN ANCHOR, QUEST MEANS BUSINESS: It's a case of plain speaking. Airbus' parent company tells us they are out of the woods.
The collapse of an Icelandic bank and it leads to arrests in London.
And two years on and still raging, happy birthday to the bull market.
I'm Richard Quest. We have an hour together and I mean business.
Airlines are spending tens of billions of dollars on the next generation of planes and it is being seen as a sign the aviation industry is enjoying a favorable following wind and benefitting from some economic lift.
Of course, there are those that would suggest that perhaps the best times are behind it and the recovery might peter out. But for the moment let us remain in good cheer. In the library, let me show you. EADS, that is the large European aerospace and defense company, it owns Airbus, amongst others. Now EADS announced results today, return to profitability, $768 million. There has been a surge of orders for-to its Airbus subside. International Lease Finance Corp, ILFC, has ordered a 100 Airbus aircraft, 75 of the new A320 and 25 A321 (AUDIO GAP) that you will be well familiar with. It is all worth about $9 billion. Also, today, Airbus military gave the industrial launch for the A400 M, the big, of course, transporter that is guaranteed to loose money. I asked Louis Gallios, the boss of EADS, if the misery of the developing A380 was now past.
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LOUIS GALLIOS, CEO, EADS: On the 380, I consider that we are out of the woods, I consider, for the manufacturing of the airplane and we are much more confident that we are able to deliver the airplane at the right time. I see that with some indicators, growth margins per airplane is increasing. And I see, also, that technically we have less and less of sending work outside the normal facilities. And I think it is very comforting. And I could say that I consider we have made very, vey significant progress in 2010.
QUEST: I noticed today the A400 M gets industrial launch. Are you- are you confident that even with the relatively low numbers of orders this can be a workable and a profitable plane?
GALLIOS: If you are talking about (UNINTELLIGIBLE) I think for them it will not be profitable without domestic countries, that is clear. We are at a loss and we have taken the provisions for that. But we will have to recover on export. And I consider this airplane as a very strong potential for export. It is absolutely the only on in this category. It is not a very expensive airplane and it is (UNINTELLIGIBLE) are very outstanding. And I consider that we have an export market of around 400 airplanes, which could help us to recovery some element of profitability on this program.
QUEST: Your big project, though, remains the A350, at the moment.
QUEST: How are you going to avoid the pitfalls of the 380, the 787? How have you-what have you learnt from it all?
GALLIOS: It is a very challenging program. We know that. We know that. But we have some lessons learned from the A380 and the 787. The first lesson is that we have to be extremely demanding in the process of development. It means that we have to go step by step. And we are going to the new step only when we are sure that we have achieved all of the targets of the preceding step. We are doing that very carefully because it is the only way to avoid the difficulties that we had on the A380.
QUEST: Have you sent out the message to your staff that you will not tolerate another fiasco on a major aviation project?
GALLIOS: Ah, if you have the key to this question I am very interested. Because, you know, we are in a very difficult changing business. We are taking risks on each program. We are launching programs and we develop the technologies at the same time we are developing the airplane. It means that there is no miracle solution to avoid difficulties.
QUEST: You will have seen, of course, the Wikileaks reports last week of the internal strife with Airbus, 2006 to 2009. Can you tell me today that between France and Germany and all the various parts, Airbus is humming like an engine in a plane?
GALLIOS: Inside the company, now, their (UNINTELLIGIBLE) is much more on business. I said-I said, arriving in the company now, back to business. And I think it is achieved.
QUEST: Louis Gallios, the head of EADS.
It wasn't only Airbus that have had orders this week, which is why we are bringing it to you today. Boeing also received an order from ILFC; 33 aircraft of the 737, next gen. And also, that was worth about 2.7 billion. And Chinese airlines have been making big orders this week; $10 billion worth of planes, including the 787, and interestingly from Boeing, the Chinese earlier this week bought the 747.8, intercontinental.
But, this is interesting, Comac C919, which of course is the Chinese manufacturer and is designed to take on Boeing and Airbus. It is expected that Comac will get 100 to-up to-between 50 and 100 orders this year for their first passenger plane. Jin Chen is the spokesman for Comac.
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JIN CHEN, GM, SALES AND MARKETING, COMAC (through translator): The Chinese market demand for this type of plane stands at 2,900, in the next 20 years. So the C919 will first satisfy the rapidly growing local Chinese market. At the same time, we can also satisfy global demand for this new model. We estimate that that market can take about 3,000 C19 models.
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QUEST: Now proving that aviation tourism and travel is one of the key industries of the world. Then you only have to look at the results from Cathay Pacific in Hong Kong, which also reported today. Cathay has had record profits and earned $1.8 billion. Cathay is about to get a new chief executive. He's the current COO, who is John Sloser, and he spoke to Andrew Stephens.
JOHN SLOSER, COO, CATHAY PACIFIC AIRWAYS: 2010 was fantastic year. It was an all-time record profit for Cathay. What was really strong for us were the two core parts of our business, which was premium traffic, first in business class, intercontinental, which is absolutely our bread and butter. That segment of the market was quite sick in 2009, but it really came back strongly in 2010, which we are very pleased with.
The other part of our business that was very strong was cargo. I know we are a big play on manufacturing and exports from southern China, from China in general, which again was challenged in 2009, but really came back strongly in 2010. So, you know we'd love to see those things continue into 2011. And early signs are that the demand for premium travel is looking pretty strong.
ANDREW STEPHENS, CNN INTERNATIONAL CORRESPONDENT: You must be worried, obviously, about the price of oil?
SLOSER: Oil is going to be a challenge, for sure. I mean, high oil is bad for airlines. It is bad for the world economy, too. I mean, I don't think the world economy likes $120, $130 barrel oil.
STEPHENS: Do you operate on a rough estimate at a time like this? When we see volatile oil prices do you have a number that you would expect to be operating around for 2011.
SLOSER: Not really. I mean, we obviously do a budget like other companies but I'm the first to admit there is no great science in the budget. We talk to a few people, they give us their view. Their view is already wrong, quite significantly compared to where we were four months ago.
And we do have an active hedging program. As our chairman has said, oil is our single biggest cost. It is a cost that you can hedge, and so we do.
QUEST: The CEO-elect of Cathay Pacific, talking to Andrew Stephens. He talked about the risk that you can't hedge, or at least the oil price risk. Brent crude is back up tonight in London. And traders are worried that the lengthy conflict in Libya could disrupt supplies to Europe. And this is the way the price looks tonight, up $2.84, $115.60.
And one, just a fact, just to round up our aviation look at tonight: For each dollar that jet fuel goes up, the price of jet fuel goes up, IATA estimates that that adds about $1.6 billion to the fuel bill of the world's airlines. Airlines, incidentally, that are not expected to make as much money in `'11 as they did in '10.
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So, on this day, two years ago, investors looked at the numbers and asked, can it get much worse. Two years later, they are asking the question. Have we ever had it so good? The bull market birthday, after the break.
QUEST: March 9, 2009, and the Dow was at 6,500 points. It had fallen more than 25 percent since the start of that year alone. And of course, people were still wondering what was going to happen next. Markets seemed to be in free fall. The financial crisis was in full swing. Now that was two years ago, fast forward to today and it is very simply a different story. Two years on, since the markets bottomed out after the 2008 crash. And the recovery has been relatively fast, at least in stock terms. In two years the S&P 500 has gained around 95 percent in value. It just about doubled, admittedly from a very low edge, or low ebb. But it still doubled and here is how it looks month by month. And you can see, there have been wobbles on the way. But that very sharp rise, from a low base, and then this long continuous rise pretty much since the beginning of the year. There was obviously the sovereign debt crisis and more recently uncertainty over events in the Middle East. But it has been a steady rise.
So what do they make of it on Wall Street? Alison Kosik is at the New York Stock Exchange.
Everybody knows this fact, that the S&P has nearly doubled in two years. Do they believe it continues?
ALISON KOSIK, CNN INTERNATIONAL CORRESPONDENT: You now what, if you talk to some traders, Richard, they are calling for a correction sometime this year. You know what the big factor is, it is the big run up in oil that we've seen, because of the uncertainty and the unrest in the Mideast. The big worry is that could really lead to a reversal as far as the economic recovery goes. You think about it, those high oil prices, they are going to eat into corporate profits. It means corporations aren't going to hire as much. It also means consumer spending will cut back as well. Sure they are worried about higher oil prices hurting our recovery.
And they're also worried about what happens when the Fed turns off the spigot. You remember, the Fed is pumping hundreds of billions of dollars into the economy. That is ending, at the end of June, so sure, these are the big worries. You know, there is one person, one analyst I talked to about preparing for the long-term. And he says, you know, when the Dow gets to below 10,000 and you hear the media officially declare there is a bear market. He says, back up the truck and load up on stocks, Richard.
QUEST: Alison Kosik in New York. And we will stay in New York and talk to Robert Keiser, the senior director of research at Standard & Poor's, who joins us from their New York office.
Robert, as we look at the S&P, at this elevated level, is-I suppose the question my viewers want to know tonight, is does it continue or is there a tumble on the cards?
ROBERT KEISER, SR. DIR. OF RESEARCH, STANDARD & POOR'S: Thanks, Richard.
From the perspective of the S&P valuation and risk strategies research, this has been a good old-fashioned, economically driven, and more important, earnings driven bull market for the past two years. The S&P 500 equity index now has produced five consecutive quarters of minimum, double- digit earnings growth. And more importantly, if we look ahead, Wall Street equity analysts estimate data, compiled by Capital IQ, forecasts-according to Wall Street analysts-the double digit earnings growth is not only going to continue through 2011, but it is expected to continue into 2012. So as long as the-you know, U.S. economy remains on track for a modest recovery, like we have now, it looks like we could see sunnier days ahead of us, yet.
QUEST: That is a rosy outlook. And yet, there is this other statistic which I see swirling around today. That the average bull market lasts 3.8 years, or something similar. I'm aware that one man's bull market is another man's correction. But if that is the case, yes there are still legs on this bull, but not many.
KEISER: Well, that would suggest that we have two years left. And I just mentioned some forward-looking Wall Street aggregated analysts estimate data that suggests we are looking for better numbers. But the important thing is here is that bull markets typically just don't exhaust themselves because they have been around for one, two, three years. The fundamentals in place right now, the fact that the U.S. economy now is transitioning from a period where it was supported by federal government, fiscal and monetary stimulus, now we are starting to see signs that the private sector financial institutions are engaging, capital is starting to flow through to the economy. So, you know, and the signs coming back from the macro level, economic indicators is that the economy is fairly robust. So, at the moment, at least, we don't see serious reasons to doubt optimistic Wall Street expectations.
QUEST: Now this is real interesting again, because let's just take that stat. The stimulus fed the recovery, and has continued to feed it. The fear, of course, is that deficit cutting, austerity measures, or something-or even higher interest rates at some point-will dent that. But from what I'm seeing, and I think if I interpret what you are seeing, there is this shift to private consumption and private economic activity.
KEISER: That is absolutely correct. And we do see risks to the outlook, obviously, you know, it is not always a one way perspective. The risks we see at the moment, a risk that has been commonly been debated for the past week on Wall Street is that fiscal restraint could impact the GDP. And we've recently done some research on that which suggests the numbers being thrown around by the U.S. House of Representatives roughly $60 billion in cuts, could subtract a half, to maybe as much as 1 percent GDP growth; that in and of itself is probably not enough to derail the economy.
The other threat we are following very closely as is probably, you know, global-the world and global, central bankers in particular, is what is the outlook for inflation? You know, currently core inflation in the U.S. is below 1 percent. It is not a threat. But if we are looking at a year or two of sustained GDP growth I think it is safe to assume inflation will be moving higher. But how high does it go? That really is the question.
KEISER: Our view at the moment is that core inflation could settle in probably around 1.5 percent. You'll see probably some modest adjustments in Federal Reserve monetary policy, but really inflation at the moment does not look like it is also going to derail the recovery in both profits and economic activity in the U.S.
QUEST: And Robert, I think I will finish with thanking you, and at least saying the sunny scenario ahead, perhaps is a good way to leave tonight. Many thanks, Robert, joining us from New York.
So, we have this scenario that we've shown you tonight. The uptick in stocks, the uptick in airline orders, and one of the largest and most significant industries in the world, of course, is tourism. The unrest that has been experienced in the Middle East and North Africa, well, that of course has been very substantial. And while tourism has suffered a setback because of recent violence, one thing we know it is expected that the newly freed nations could attract plenty of visitors in the future. That has very much been on the minds of the delegates at ITB, the largest tourism show in Berlin, from where Isha Durgahee reports.
ISHA DURGAHEE, CNN INTERNATIONAL CORRESPONDENT (voice over): The Middle East and North Africa region is dancing to a new beat. Optimism borne through revolution in Egypt and Tunisia has been brought here to Berlin. These countries are now ready to shake off the impact of unrest and show tourists their new image.
For the first time Egypt has an entire hall to itself. Determined to restore its image as a top leisure destination with resorts in Luxor, Hurghada, and Sharm el Sheikh.
AL MOATAZ IBRAHIM, HARMONY MAKADI HOTEL & RESORT: The business has in fact reduced by, for example, by 85 percent. Hopefully it will be back very soon. The resort areas are totally safe. The security are there. Everything is fine. Hotels are operating very good. This year we are here to tell everybody that Egypt is safe. And they have to come and to see Egypt with the new look of Egypt after the revolution.
DURGAHEE: And members of the public at ITB see that Egypt has changed.
NIELS LUND, STUDENT: The people of the North Africa countries want to have a say in their livelihoods, and therefore, I think that people like us really want to support them. So, now they are having actually a very good image now. Better than before.
DURGAHEE: Over in Tunisia, the catalyst in the uprising in region, there is new-found image, with a new strategy.
The life (ph) in Tunisia is now open for our strategy to say that we still have all the beaches, the sand, and the sun, and we are able to bring our tourists to visit our archeological sites. To meet with our artists and to meet with our people, to meet with our traditions, and this is a new way of tourism.
DURGAHEE: Tunisia and Egypt forced a revolution. In Libya, the fighting continues, even so the country is represented here to be seen in a new light.
TELAB RIFAI, SECRETARY GENERAL, UNWTO: The uncertainty around Libya is keeping people on watch, but the interesting, and the amazing thing is, that people are watching what is happening in Libya, with a sense of anticipation. The winds of change in the Middle East are way overdue. And we believe that the implications of this on tourism are going to be rather positive. You know, democracy, transparency, the rule of law, always brings the best out of people. The energies that would be unlocked, and people would freer to build even a better economy.
DURGAHEE: Tourism has been the bricks and mortar of these economies for decades. And relaying the foundation now is crucial to ensure that continues. Isha Durgahee, CNN, Berlin.
QUEST: Isha will bring us more reports from the world's biggest travel fair in Berlin. ITB runs through Sunday, it is all week here, on QUEST MEANS BUSINESS.
Now, he is really, really rich, and even after giving away more than a third of his fortune he is still expected to be the world's second richest person. After the break you meet Bill Gates and his wife, Melinda Gates. And they talk to us about the philosophy of giving.
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QUEST: Bill Gates is expected to hold on to his No. 2 position as the second richest person in the world, when Forbes publishes its annual billionaire's list. The official report isn't due for another four hours, it is strictly embargoed. Several reports are suggesting Mr. Gates will remain second to the Mexican tycoon, Carlos Slim Helu. Bill Gates lost the top spot two years ago, largely because of his philanthropic work. Literally he is giving away his money to his charity and of course, his foundation.
To date, Bill and Melinda Gates have donated around $28 billion in stock, to the foundation they created. And they are still worth an estimated $49 billion. It means they have given away more than a third of their wealth.
Bill Gates has encouraged other wealthy individuals to part with their money. So far 59 extremely wealthy people have signed up to the giving pledge. In January I met Bill and Melinda Gates at Davos. And I asked them, with so much money being given away, what was their philosophy of giving?
BILL GATES, THE BILL & MELINDA GATES FOUNDATION: Giving in the United States has always been somewhat higher than in other countries. We are trying to get people to think about giving at a very young age. The group of people who are learning together and sharing ideas called "The Giving Pledge", 58 of us now, includes Mark Zuckerberg, who is only 26 years old. So, it is pretty phenomenal to have his energy and him learning. That is a lot younger than when I started, so he's ahead.
QUEST: How important is it, Mr. Gates, that they don't just give the money, but that they become involved? That there is an element of interest and active participation, because of in terms of your own foundation, it is not just the money, it is your active participation that garners the interest?
GATES: I think we'd like to see people as involved as possible. Now sometimes it will be their wife, sometimes their kids. There are a lot of ways that the talent of that family can come in and make sure that the success stories are heard, or that the lessons are learned. And great philanthropy really involves a lot of time. We're enjoying the work as our fulltime activity.
QUEST: 15 years ago, I interviewed you. And I asked you then, what your philosophy of philanthropy was? The foundation, I think, hadn't even existed in those days, or at least it must have been in your mind. If I was to ask you first, what is your philosophy of philanthropy?
MELINDA GATES, BILL & MELINDA GATES FOUNDATION: Well, we have this belief that all lives, all lives on the planet have equal value. And what philanthropy can do is come in with a catalytic effect and take place where there is a market failure. So for instance a vaccine that wouldn't be made for the developed world, because we didn't have a disease; we could get them and stimulate them to make one for the developed world. So philanthropy can work in places where there are market failures or when you need to show the way, and innovate, so that government will then follow.
QUEST: And have you been surprised at how hover the years that perspective, that you brought to the table, has changed, or have you been pretty much single-minded in the way in you have preceded with this.
B. GATES: Well, the basic belief that things can improve, that the childhood death rate can be brought down, again, and again. And that the things we take for granted can, overtime, be available to everyone who lives on the planet. We have made a lot of progress on that. Now, for individual things we have had setbacks, we have made mistakes, we've tuned. But the general idea has absolutely stayed the same.
QUEST: Finally, to start with you again, Mrs. Gates, when you-has there been a moment in Africa, or on your travels that you are prepared to share, where you have looked at each other and you have just said, yes.
B. GATES: Well, I remember when we were visiting hospitals with diarrheal patients, we looked at each other and said, "No!"
You know, I remember when we were in Haiti, seeing some tough things. We are now seeing new vaccines. Melinda just saw one of the ones we are behind, getting rolled out. So, yes, there is a sense of achievement when we meet with the people on the ground.
M. GATES: I just came back from Kenya. And I mean, to see a new mucous vaccine finally delivered. We know 1.6 million sick kids die of this disease every year. To see that we finally have vaccine that works in Africa and that only took between one and two years from the developed world, to get to the developing world. When we started it used to be a 15 year lag, when a vaccine came out here, to go there.
I just said, we're doing it. It is actually possible. And that was real exciting when I came back straight from there to Davos.
QUEST: Bill and Melinda Gates talking to me at Davos.
And Mr. Gates is expected, if the reports and the rumors are correct, he will be announced as the second richest man in the world. He's still got more than me. It's in tend of billions of dollars when the "Forbes" billionaires list is published in just about three hours from now.
Tonight in just a moment, the U.S. senator, John McCain, will be on CONNECT THE WORLD. Senator McCain will talk about his renewed call for a no fly zone over Libya. That's 90 minutes from now.
And before that, the former U.S. Defense secretary, Donald Rumsfeld, weighs in on the topic with CNN's Piers Morgan. Rumsfeld was asked whether he would advise invading Libya.
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DONALD RUMSFELD, FORMER U.S. SECRETARY OF DEFENSE: No, I wouldn't. I -- I think that -- that it -- it would not necessarily be a way to stop that. It -- in the last analysis, the people of those countries have to make their own choices. I see all kinds of discussion about a no fly zone right now. And I think Secretary Gates is correct, that -- that there's a complicated thing to do. We had no fly zones with the British and the French in -- in Iraq for years and we -- our planes were shot at over 2,000 times.
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QUEST: Donald Rumsfeld the whole hour -- that's on "PIERS MORGAN TONIGHT" after QUEST MEANS BUSINESS.
QUEST: Hello. I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN. And on this network, the news always comes first.
The Libyan government says it will pay a bounty of $200,000 or more for the arrest of the country's former justice minister, who is now a top opposition figure. That's as troops loyal to Moammar Gadhafi step up artillery assaults on rebels in the east and claim victory in Zawiya, west of Tripoli. CNN journalists have not been allowed in Zawiya, so we cannot confirm who is in control there.
Witness say at least 44 people have been injured in clashes in Cairo's Tahrir Square Wednesday. Well, they say attackers have begun going after pro-democracy activists with machetes, knives, Molotov cocktails and horse whips. The activists blame supporters of the former Hosni Mubarak regime.
The Pakistani Taliban are claiming responsibility for a suicide attack that killed 37 people on Wednesday. The bomb went off at a funeral procession on the outskirts of Peshawar. The funeral was for the wife of an anti-Taliban militiaman.
A picture-perfect landing for the Space Shuttle Discovery in Florida.
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UNIDENTIFIED MALE: And the nose here touched down. And the end of an historic journey. And to the ship that has led the way time and time again, we say farewell, Discovery.
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QUEST: This was Discovery's 39th and final flight. In its 26 years of service, the shuttle circled the earth more than 5,000 times.
Experts say 10 to 30 million people worldwide are being forced to work for nothing. What we do know is that modern-day slavery is infiltrating many sectors of global industry.
Here are three major slave trades, according to the anti-slavery.org.
First of all, slave workers in the cotton industry. Now, they work in eight countries across the globe. Slaves are used to grow, pick and produce cotton. Force labor is used to make bricks in six countries. Slaves are used in six countries, as well, to make clothing and other countries.
Of course slavery exists in these industries, but not that all or even most producers engage in the practice. You can only make so many statements before you have to qualify them with those who are actually involved.
CNN has launched our year long push to join the fight to put an end to modern-day slavery. We are calling it the Freedom Project. And here on QUEST MEANS BUSINESS, we're looking at the complicated web of criminal enterprises that trade in human life.
So, let me take you now to the second part of a series on slavery in India.
This time, Sara Sidner is allowed to follow a rescue mission to save children that are trapped in bonded labor.
SARA SIDNER, CNN INTERNATIONAL CORRESPONDENT (voice-over): This is a raid, a small police operation with a big mission -- to rescue workers enslaved because of debt. The factory is open, but empty. It appears the police are too late.
"Whose place is this? Who are you?," the police ask.
Then this -- five children and one disabled adult found slipping out the back.
"We start work at 6:00 am and end at 9:00 pm at night," one of the children tells us. For 15 hours of work a day, they received about $2 per week, enough for food he says, that's it.
As they're being taken to a safe house, one child calls for his mommy.
Members of the group Free the Slaves were there to comfort them. They say these young workers don't know it yet, but this is a chance at freedom.
Ten-year-old Raj Kumar (ph) got the same chance. Until a year ago, work was his life. "I was kneading the mud and made to work at the brick kiln," he says. Now instead of this work, he gets homework and dreams of the future. "I want to have a job," he says -- a job he wants to do, not the one he was forced to do.
Raj Kumar lives in a village winning freedom from the practice of bonded labor, where people are enslaved by their debt. Raj Kumar's father says his family has been enslaved for three generations to landowners who loaned money long ago.
"They would beat us, beat with a cane. They would kick us," he says. "One day they hit me so hard, blood came out of my mouth." He can no longer do hard labor because of the beatings. He says the women of the village have suffered even worse.
"He has sexually abused our sisters and daughters. He would send us off and he would come to our place," he says.
Not anymore. The villagers filed a formal police complaint. The landowner denies their accusations. The case is still to come to trial. It's an act of courage that they said would never have been possible if they hadn't been told of their rights.
Bhanuja Saran Lal is a local human rights worker.
BHANUJA SARAN LAL, HUMAN RIGHTS WORKER (through translator): You're seeing two things. The powerful landowner let these people on their land. Second, is the workers become dependent on the landowner. So it's not easy for these laborers to say no to the work. It's not easy for NGOs like us to conduct a rescue operation, rescue them and settle them within the same village.
SIDNER (on camera): The organization Free the Slaves says you are looking at the first major step towards freedom. The group sets up a transitional school in the village, offering parents a chance to send their children. This is often the very first generation with a chance at a formal education.
(voice-over): But not everyone in this village has taken the offer. There is still fear here, even among those who have tasted freedom.
Sara Sidner, CNN, Uttar Pradesh, India.
QUEST: The Freedom Project. And we know that this is the type of story you could well want to e-mail to someone else so they can see it. And you can find it, because we've posted it for you, at Facebook.com/CNNquest. And you can share it via e-mail and social media and continue your involvement in our Freedom Project.
In just a moment after the break, nine men are arrested in London and Reykjavik. Two of London's best known tycoons are among them. It's all to do with Iceland's banks. We'll explain in just a moment.
QUEST: The Tchenguiz brothers have been arrested in London as the investigation into the collapse of Iceland's biggest bank continues. The brothers, Robert and Vincent, lost millions of dollars in the Icelandic crisis.
Jim Boulden is with us -- Jim, I am aware that this is a minefield, legal and otherwise. So the que -- the quest becomes two people who lost money in the collapse of the banks and now they are arrested.
JIM BOULDEN, CNN CORRESPONDENT: They are arrested, along with a number of other people. But let's try to explain this to everybody.
The Tchenguiz brothers are among the most recognizable property tycoons here in Britain. Now they're two of nine men who have been arrested by police in London and Reykjavik. When they appeared in the 2007 "Sunday Times" Rich List, they were described as, quote, "Britain's most frenetic dealers in business assets."
First, Robert Tchenguiz. He quickly made a name for himself taking large stakes in Sainsbury's and a huge chain of pubs and also a videogames publisher.
But those stakes melted away thanks to the financial crisis.
Now, much of the money used to build this empire came from Kaupthing. That's the Icelandic bank. It was the biggest Icelandic bank. And it was, in fact, Robert, who is known as Robbie, was on the board of Kaupthing's largest shareholder and also one of the biggest borrowers.
But in 2008, of course, Kaupthing was nationalized, along with other Icelandic banks.
Last year, Iceland released a report into the 2008 bank collapse. And the Tchenguiz brothers featured heavily. The report claimed that when Kaupthing collapsed, Robbie and the others owed the bank almost $2.3 billion.
Now, Britain's Serious Fraud Office has been investigating the withdrawal of money before that bank collapsed. Yes rebrut -- the brothers responded in a joint statement earlier today. It reads, quote: "We were arrested and we are being questioned with regard to the matters relating to our relationship with Kaupthing Bank. Both of us are cooperating fully with the investigation and are confident that, once they are concluded, we will be cleared of any allegations of wrongdoing."
And, Richard, no surprise, there are an enormous number of lawsuits here in London and in Reykjavik because of this bank collapse.
QUEST: Good grief. This thing one -- this thing just doesn't go away, does it?
QUEST: And we've still got the next referendum in Iceland that the president is calling to -- to ratify the agreement that parliament signed with Britain and Denmark.
BOULDEN: It's all going on and on.
QUEST: Many thanks, Jim Boulden, who will be watching this very closely.
Now, European markets, remember they went down on Wednesday's session. All the major indices finished today in the red. The SMI in Zurich was off nearly 1 full percent. Bank stocks were sharply down -- Aladaris (ph), UBS, Credit Agricole all losing more than 2.5 percent.
On Asian trading gains on Wall Street and a slight drop in that oil price gave most markets a lift. Let's see how they react after today's rise in oil price.
In Japan, the shares of exporters rose as a report that showed growing orders for machinery in January.
The Hong Kong Hang Seng was up .4 of 1 percent. The Shanghai Composite up. Banking stocks did well after reports the Chinese central bank has backtracked on its decision to raise reserve requirements on lenders.
One of the biggest challenges for the Chinese economy, besides the immediate problem of inflation, is how to keep growing and how to do it in a clean way. A new report from HSBC says China is pulling its weight and climate change is at the heart of its five year growth plan.
So do we believe it?
Well, we're joined now by Nick Robins, head of the Climate Change Center at HSBC.
You were just telling me, Nick, that China is linking its economic growth to climate change. But the -- or to improving its climatic position.
But that's not the public perception.
NICK ROBINS, HEAD OF CLIMATE CHANGE CENTER, HSBC: Well, I -- I think because the -- the moves in China have been going very quickly. Over the last five years, it's actually bought up something of a track record in terms of reducing its energy intensity, so per unit of GDP. And that is a competitive issue. It wants to actually improve the quality of its industrial growth.
QUEST: But when China, for example, opposes the climate trade talks and was one of the standouts and continues to demand that lower -- lower levels because of its industrialization, it's far -- and further behind, that doesn't sound like a country that's...
ROBINS: Well, one of the things that -- in Copenhagen that came before that, I think one of the breakthrough things in the Copenhagen Climate Summit and I think what you're referring to was before that, China did put their offer on the table to reduce their carbon intensity -- so carbon per years of growth -- by 40, 45 percent by 2020.
What they've done is -- is they've delivered on that. I think the international negotiations are now, to some extent, on the sideline. And we really...
QUEST: But they're still asking for more room to grow, aren't they?
They're still asking for a lower standard, at least for the time being, while they capture...
ROBINS: Well, the -- the issue is obviously they are the world's biggest polluter. They recognize that -- the world's second biggest economy. But per capita and in terms of the historical emissions, they lag way behind the industrialized world.
So I think there is a reasonable sense that they're -- they need room to grow.
But as they grow, are they bending that curve so that they can peak and then bring it down?
QUEST: Do you believe -- or maybe more to -- the better way of phrasing my question is why do you believe they're doing it?
And they did it for some altruistic reason?
ROBINS: I think there are a whole series of -- of reasons. I think they -- they see that, actually, there is a competitive benefit from becoming more energy efficient. They see the next phase of growth, what is called the emerging strategic industries are in the low carbon areas. And electric vehicles, for example, a major solution to the energy policy -- policies that we're seeing all markets at the moment, energy efficiency, new materials, the rare earths and so on.
So these are the key strategic interests of the future, from 3 percent of GDP now to 15 percent by 2020. That is a major economic bet the country is making.
QUEST: And when you think about not just clean air but clean rivers and anti-pollution mechanisms, are you seeing that drive for environmental benefit throughout that chain?
ROBINS: I mean there -- there are still challenges, very clearly. And I think one of these is that -- that needs to be addressed in the nine -- the next five year plan, is energy price reforms.
ROBINS: Still, that -- that is...
QUEST: But that's related to their economic growth, isn't it?
ROBINS: Exactly. Exactly. This is all related to the economic growth.
QUEST: It's not been done for climate's sake per se.
ROBINS: Per se, no. That is -- that is another reason, because often, you need many reasons to do something. So economic growth reasons, industrialization reasons and that will lead to environmental outcomes, as well.
Many thanks for coming in and talking to us.
ROBINS: Thank you.
QUEST: Many thanks, indeed.
Now, the weather forecast.
And tonight, it's Jenny Harrison at the World Weather Center.
We're having a stompingly good spring and it's not even got sprung yet.
JENNY HARRISON, CNN METEOROLOGIST: No, very nice, indeed. Your (INAUDIBLE), Richard, and it's the northern sections of the U.K. not doing quite as well. And I have to say, it's fairly typical early spring weather across the United States now, because thunderstorms have been firing up for the last few hours. In fact, quite a swathe of cloud there working its way through much of the east.
You can see the warnings in place. The red box is for the tornadoes, the yellow for the thunderstorms. And they will likely stay in place over the next couple of days, really taking us through Thursday.
Now, already on Wednesday, look at this, the amount of rainfall produced -- recorded there in Alexandria in Louisiana, 135 millimeters. And a wind gust in New Orleans, Louisiana, again, 124 kilometers an hour. At least one tornado reported and it actually headed across that Lake Pontchartrain, as well.
Now there are some warnings -- not warnings, but some delays in place already at the major airports. You'll see there up into the Midwest and the Northeast. But this list is likely to be extended as the day goes on, because these storms are not going away any time soon. And this rain is very heavy. And we will see that system work its way up the Eastern Seaboard, as I say, as we go through Thursday.
So the warnings are in place. We've got flood warnings, flood watch. And remember, this is on top of some very heavy rain just a few days ago. The warnings in place then. And, of course, this rain is also coming down on top of some snow melt, as well.
So as I say, there's more danger, really, as we go through Thursday morning across much of the Southeast. And then, as we go Thursday into Friday, those stronger thunderstorms working their way, as I say, up toward the Mid-Atlantic and the Northeast.
So be prepared the rest of this day, Wednesday, on into Thursday. There will be some lengthy delays at most of the airports, a lot of cloud around and some very heavy amounts of rain.
So this is why we'll see delays such as this.
Meanwhile, in Europe, it's really been about the weather conditions in the southeast, in particular Turkey. Look at this in the -- the last 24 hours. We've seen a tornado reported, very heavy amounts of snow.
And have a look at these pictures. You don't need to just take my word for it. We've been talking about this snow since Saturday. We knew it was going to be coming down. And, really, the whole of Turkey has just seen a huge amount of snow -- very, very widespread, but also very, very deep, as well, in some places.
For literally days at a time, we've seen about 20 centimeters actually impact the region. And this is what it does, of course.
So let's have a little look and see what's going to be happening next, because, as I say, that system in the east, that will continue to work its way eastward.
But meanwhile, to the northwest, some very strong winds. And this, again, is likely to cause a few delays at the major airports.
Now, when -- I just want to pause for a moment and I just want to bring something to you which is also of equal importance, of course. Yes, a rather lovely shot in the night hours across London. You've got Big Ben there. The fireworks -- Richard, I was wondering, the fire regulations in the studio there in London, they're quite strict, are they not?
QUEST: Absolutely. Rigorously strict, rigorously.
HARRISON: Yes. Yes. The reason I'm asking is because I believe there was meant to be a cake delivered to you right now, but the number of candles on that cake meant that it was in danger of setting off the sprinkler system.
QUEST: How could you, Miss. Harrison?
HARRISON: Yes. I'm...
QUEST: How could you?
What -- what are you suggesting?
HARRISON: Well, next year, I'm having t-shirts made for all of us -- all the staff next year, on this day, we'll be wearing t-shirts, because next year is a very special year. But this year, friend of mine, it is your birthday. You're 49. Happy birthday. Have a lovely day.
QUEST: Thank you, Jenny Harrison, at the World Weather Center.
Thank you, Jenny.
Bye for now.
QUEST: We're very...
HARRISON: Happy birthday.
QUEST: Thank you.
We're glad you didn't sing.
QUEST: Now, not many of us can say we work with our best friends. For this man, the most faithful friends have four legs and they're an essential part of his World At Work, in a moment.
QUEST: We've talked about animal spirits before on this program, but never quite like this. We're turning our backs on economics for the moment and instead, we're going to step through the doors of the Battersea Dogs & Cats Home.
The world of work of a man who finds new homes for lost and unwanted animals.
For Woody Woodford, there's no better colleague than man's best friend.
WOODY WOODFORD-PRICE, BATTERSEA DOGS & CATS HOME: My name is Woody Woodford-Price and I'm an animal re-homer at Battersea Dogs & Cats Home.
OK. Come on here.
I came Battersea because I actually wanted a dog at the time. And this was 10 years ago. And I walked through the gates and I kind of thought wow, what an amazing place.
(INAUDIBLE) you want him?
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED MALE: (INAUDIBLE)?
UNIDENTIFIED MALE: Yes, a good thing. Sure.
I can honestly say I love coming into work. I enjoy coming into here. I don't even seen it as a job, to be honest with you.
That's a good girl.
You can kind of look at a dog and you can start working out its personalities almost straightaway by its body language, is it stressed out in the environment it's in, does it have any issues over things like food or toys or even people, strangers?
It could be trams, walking sticks, it could be chairs.
Oh, good girl. Beau job (ph). OK.
There's some really good bonds you can build up with the dog. And, of course, I've got four of them, all (INAUDIBLE) souls, but completely different personalities and they're not -- not one of them is the same. And they all give me something different in return, so you can't beat it.
Sit. Good doggie. There we go. That's it. Nice move.
Obviously, with all animals that come in, they have to be registered and checked in. They have to be -- to meet a nurse, in the first instance.
Hello, Sophie (ph). You're all right, OK?
This is Sophie, is it?
UNIDENTIFIED FEMALE: It is, yes.
WOODFORD-PRICE: Hello, Sophie.
I have suffered with what's known as a recurring depression and I've just come out of a long bout of that. And, actually, thanks to my dogs, that actually really helped me with that. So it's been amazing to have them around.
Was she (INAUDIBLE) stairwell?
UNIDENTIFIED FEMALE: She was on (INAUDIBLE).
UNIDENTIFIED FEMALE: (INAUDIBLE).
Oh, good. Well, that's good news, isn't it?
You're beautiful, aren't you, darling?
There's a dog here, it was a Labrador called Barney (ph). He came in as an RTA, which is a road traffic accident incredibly overweight, a lovely, lovely dog. And he had to have one of his legs amputated, which is his back leg. And it's a full amputation. And he had lost a lot of weight after he'd been with us. And he looked very fit and healthy. And I had this lovely family come in and their son had spent most of his life in hospital.
He came up for one day and I had actually managed bring home that dog to them.
To know that that -- that last dog is going home is well worth it, you know?
And you can't put a price on that. And it's just an amazing feeling.
(END VIDEO TAPE)
QUEST: And time for our Tweets from the Top.
Today's selection is political rather than economic.
The former California governor, Arnold Schwarzenegger, has Tweeted that he just heard a fantastic speech from Tony Blair: "From the Middle East to China, he's a great man who knows the world."
I assume he's talking about Tony Blair, not Arnold Schwarzenegger. "And," he says, "it looks like the Finnish and the Russians are rubbing elbows."
Finland's minister for foreign affairs, who's a -- who's a regular tweeter -- I think that's a compliment." Alexander Stubb, the minster says, gives us some inside baseball. He says he's going -- or basketball -- he's "going to a basketball game with the Russian vice p.m. Sergei Ivanov, and he's looking forward to it."
I wonder who will throw the hoops?
Those are the Tweets from the Top.
And I'll have a Profitable Moment after the break.
QUEST: Tonight's Profitable Moment.
Jenny Harrison let the cat out of the bag. Today is my birthday. And many thanks to my team, the producers and the writers on QUEST MEANS BUSINESS for the kind way in which they wished me a happy birthday, with good cheer and cakes.
Now, I have always been a bit unsteady with birthdays. We all know friends who recoil at the very mention of their big days. They don't want any acknowledgement of the day they were born. They believe age is a curse best ignored.
Then there are those who make an event of every birthday. They demand hoopla and balloons.
I'm somewhere in between. I hate the fuss, but I'm woeful if everyone forgets. Although I have to say, with a twin sister, at least I'm guaranteed one person remembers.
However, March the 9th, there's one statistic I'll always associate with my birthday. March the 9th, 2009, the low point of the U.S. market after the Great Recession.
After that sobering thought, suddenly, any gains are cause for a cake.
And that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I hope it's profitable.
"PIERS MORGAN" is next.