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Apple Tops $600; White House, Downing Street Deny Oil Reserves Deal; Greece Gets Second Bailout; Investors Shrug Off "Toxic" Attack By Goldman Ex-Exec; Exit Strategies

Aired March 15, 2012 - 15:00   ET


RICHARD QUEST, HOST: Tonight, how to grow like Apple. The tech giant's shares defy gravity.

How to quit like Greg Smith. What to do if you want to make that memorable exit.

And how to tweet like the Fed. The US economy in 140 characters or less.

I'm Richard Quest. Tonight, I mean business.

Good evening. We begin tonight with Apple. The tech company, the computer company, the giant whose shares hit $600 today. As the world's most valuable company grows even more valuable, you and I may well be asking ourselves why we didn't think to buy shares in Apple before now. And if we did think to, why we didn't execute.

And in a moment, we'll show you there were plenty of times in the past few years when we might have asked that --


QUEST: -- very question. Join me over at the super screen. The shares hit $600 a share in today's trade. Now, if you bear in mind the way in which -- the first point on our Apple map, basically it took several months to reach the $400 a share. So, we got to $400 back in December the 23rd. And this period, we're bouncing backwards and forward between $200, $300, and $400.

But then things go off like a rocket. It takes just two months to hit $500 back in February, and then, even -- even quicker, less than a month, we are at $600 a share.

It is trading at 14 times 2012 EPS earnings per share forecasts. Now, that is actually quite good for a tech company, bearing in mind the profits that Apple generates. And if you look at the NASDAQ Futures index, that trades at 18 times future earnings.

So, Apple's share didn't stay above $600 for the entire session. They are now just under that, down off 1 percent at $584. I will guarantee you that is what -- classically, the old profit taking.

When we look at Apple's share price, and we put it into context with the EPS that I was talking about, Maggie Lake is in New York. Maggie, I hesitate to say it, but at that EPS, they're looking cheap.

MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: Oh, my goodness! I'm going to remember that you said that, Richard. But you're not the only one who is.

Although listen, when you see that sort of spike on the chart like you just showed, two things happen. Your aunt and uncle start cornering you at dinner parties asking you if they should buy it, and your dentist. And the smart money usually hightails it out. At least book some profits temporarily.

Things are a little bit different this time, though. You have people talking about, OK, hit $600, dip back down. But most think that's really brief. You have people talking about $750 for a price target. One analyst at Morgan Stanley, $900. Even people talking about $1,000 a share.

Where are the cynics? Where are the people who are looking to short this? I put that very question to Alan Knuckman from the CME. Listen to what he had to say.


ALAN KNUCKMAN, ONESTOPOPTIONS: I think there's an emotional tie to Apple that you don't see in any other stock, and that adds an undercurrent of support. And every time it does so, not that it really has sold out, but buying -- buying comes in.

People have been waiting to buy into Apple for the last couple of years to find a break, and they just haven't seen that. So, I think as people get more confidence that the whole economy's turning around, that they feel like, well, you know what? I can't continue to miss out on this anymore. I've got to get some shares.


LAKE: Now, Alan himself said, when you hear that, we've seen this movie before, it makes him very, very nervous.

One very good piece of advice he had, Richard, if you're nervous, if you haven't bought and you're nervous about getting in at this point, you're just not sure, one way to do it is to play the triple Q's, the NASDAQ 100. Apple makes up a big chunk of it. It'll help you ride the upside, but it will protect you from the downside, should we see a correction.

QUEST: Maggie. How many times have you looked at Apple's share price in the last 18 months and thought, "I wish I had bought in, I really should buy in. I should buy a couple to put under the mattress"?

LAKE: We can't even talk about it, it makes me too sad, Richard. And I can tell you, a lot -- as many people say, "Should I get out now? Should I sell? I've made so much money." So, even the people who had the wisdom to buy early fret about this every day.

The problem is, what's making people nervous is the momentum has been so rapid. We're not talking about a slow climb over ten years.

QUEST: Right.

LAKE: We're talking about this thing on fire. That does make a lot of people nervous. But again, very few companies have the fundamentals that Apple does. And yes, that is a -- a prelude to me saying I will once again be on the streets in New York outside the Apple store for the next version of the iPad. Tomorrow.

QUEST: Maggie Lake is New York. And before we go, one stage further. I have a -- we rarely talk about share prices as Maggie and I have just then. Maggie, many thanks.

I do need to remind you, nothing that we say on this program should be taken as an invitation for you or, indeed, me, or anybody to go out and buy a stock, a share, a bond, or a currency. Frankly, if I thought I could make money doing that, do you think I'd be doing this?

There's just an hour to go in trade on Wall Street, and the Dow Jones in at up 42 points, 13,236, a bullish day on the market there.

First time claims for unemployment benefits fell to 351,000 in the US. That's 14,000 fewer than last week, and it matches the four-year low hit in February, so we're getting an indication of the reasons and the momentum for the market.

The White House and Downing Street both denying reports that they're working on a deal that would release strategic oil reserves into the market.

And this chart shows you what happened to Brent over the last 24 hours. The rumors briefly did push Brent down by nearly 3 percent so, you see what happened. There, you get the blip in the market with that rumor.

But once the White House and Downing Street said there was not going to be any, up it comes up again. And you do get this sort of -- still some movement in the market. Brent is at 122.50, down around 1.3 percent from Wednesday. The Fed has already warned oil prices, one of the biggest threats to the US economy.

Our good friend, Professor Peter Morici, the international business professor at University of Maryland. Peter, oil. Let's just ignore this marginal blip that we saw today. How serious a knock to GDP growth is oil at these prices?

PETER MORICI, PROFESSOR OF INTERNATIONAL BUSINESS, UNIVERSITY OF MARYLAND: It's quite serious. Over the last several months, real consumer spending, which is 70 percent of US GDP, has been flat. It isn't that consumers aren't spending more, but virtually every extra dollar they have has been going into oil.

They've bought a little bit more in the way of automobiles, a little bit less of everything else, and they've taken all their gains in income and put it into gasoline.

QUEST: So, in that scenario, we move forward with a high oil price, a risk -- a premium in that oil price, and numerous geopolitical risks, whether it's Iran, whatever it might be at the moment. How -- what, then, happens next, I guess, is what we need to know.

MORICI: Well, with -- with having such a drag on GDP growth, some of these very good employment numbers we're getting are going to start to tail off. Jobs growth will go down about 150,000 a month in the second quarter.

We'll see first half growth at well less than 2 percent, and the economy will look a bit like it did the first half of last year. We don't have a -- an earthquake, but oil is high enough that it's quaking the economy quite a bit.

QUEST: Yes, but are we in any danger, Peter, of having 2010 all over again? Where we have a strong run-up, a prospective improvement in the economy, which evaporates by year's end or midyear.

MORICI: Well, we haven't had that strong run-up. We have had one quarter of very good growth, the fourth quarter, and no one's expecting a good quarter the first and second quarters.

The hard reality is, until America takes care of some of its structural problems, including producing more of its own oil, which it has, it's going to continue to grow and slog along at about 2 percent a year, which isn't very, very promising.

And I'm not alone in this view, and it's held by economists on both the right and the left and in both political parties.

QUEST: OK, final question, without notice. We were just -- you will have heard us just talking about Apple's share price, $600 a share.


QUEST: And I suspect you join Maggie and myself -- unless you already own it --

MORICI: Absolutely.

QUEST: How many times have you said -- well, let me ask you this point. When the American investor sees Apple at $600, do you think it psychologically gives them a boost? They think things are getting better?

MORICI: I don't think so. I think Apple is considered to be apart from the rest of the economy. It's iconoclastic, it's a small share of the computer market, it's very upscale. It's like a -- like a Gucci bag or a Rolex watch.

QUEST: Right.

MORICI: You have to be fairly well off to own their products. I think it makes Americans proud and somewhat optimistic, but I think they'd like to see broader gains in companies like General Electric and IBM, because they know that's what really moves the economy. General Motors, that's what makes them feel better.

QUEST: We'll talk more about that in the future, Peter. Good to see you, as always, from Washington studio.

Coming up, misery for job seekers. Where else would it be but the eurozone? QUEST MEANS BUSINESS in a moment.


QUEST: Greece is starting to look a little more comfortable. It received its $170 billion -- excuse me -- from the European Union. And today, the IMF has approved even more, $36.7 million -- or billion. Now, it'll get just over $2 billion immediately, and for rather than normal three years.

Just to put -- the IMF has just confirmed some numbers to us. So, the first disbursement under the new facility will be just over 2 billion. Already, it has received 20.3 billion euros as part of the previous standby arrangement. So, 20 billion plus -- euros, plus 36 billion, you start to get an idea of the magnitude.

There are, of course, deep problems in the eurozone on the question of unemployment. Eurozone unemployment is down again by 0.2 of a percentage point, and real wages -- that's wages, of course, allowing for inflation, also down. There are now 17 million people out of work in the eurozone. That's 10.7 percent of the workforce.

And nowhere is that more prominent than in Spain, where almost a third of the total number of unemployed in the zone is in this country. The highest unemployment number in the eurozone. And what is most startling, youth unemployment is at 50 percent in Spain alone.

Now, as we move on. The International Airlines Group will get the go- ahead to buy BMI, says Lufthansa. The chief executive of Lufthansa, Christoph Franz, says he and IAG's chief exec, Willie Walsh, will together work out any prospects to quell European Union concerns.

The EU most definitely does have competition issues when looking at the IAG purchase of BMI. The competition commissioner, Joaquin Almunia, told me there's still some way to go with the promises that they've received.


JOAQUIN ALMUNIA, EU COMPETITION COMMISSIONER: We are asking British Airways to present some remedies, some commitments to clear this merger, the acquisition of BMI. We are still there.

We are right now consulting, also, the stakeholders, the other competitors and the other stakeholders, and I hope that in a few weeks, if not days, we can have a satisfactory solution, a positive solution. But I am not sure. It depends on the commitments that British Airways will put on the table.

QUEST: So, the commitments they've put on the table so far, the rumor is you're not happy with them, you want more. Is that true?

ALMUNIA: We are asking the market stakeholders. We are in a market test exercise during these days. And let's see. Let's see what the stakeholders tell us about the commitments put forward by British Airways. If we need more, we will tell them.

QUEST: I look at your area, Commissioner. It is huge. You have got e-books, you've got airlines, you've got telcos. From your perspective, which is the liveliest area at the moment, where you're most concerned on competition grounds?

ALMUNIA: Well, I have a lot of concerns, indeed. But at the same time, it's extremely interesting, analyzing what is going on in the markets, in the different sectors, both in the traditional sectors and in the newest ones.

QUEST: But what's --



QUEST: But -- but -- what is --

ALMUNIA: If I can tell you --

QUEST: Yes, sorry, I was just asking --

ALMUNIA: No, if I can tell you one particular --


ALMUNIA: -- sector that deserves a lot of attention during these times is, of course, the financial sector.

QUEST: Right. So, the financial sector -- the banks, in other words -- making sure -- and do you mean at the retail side, the wholesale side, or the investment side? Or the lot?

ALMUNIA: Well, on the one hand, we are looking within the internal market, within in the euro 27, at the way the public money is being used by the banks, how they are restructuring, how they are putting their business models into a viable path. How they are compensating the efforts that the taxpayers are doing to sustain and to fix the financial system.

And on the other hand, as in the case of Deutsche Boerse, Euronext, or in other cases, we are also looking at the way the financial markets are functioning, how the financial services are being provided in a competitive way, how the information is distributed in a fair way for all the market participants.

QUEST: Many of the competition rules, a coach and horse was driven through them in the emergency measures that had to be taken for takeovers. If that hadn't happened, economies would have suffered even more so. And now, you have the problem of sweeping up behind to make sure that competition continues. That's fair, isn't it?

ALMUNIA: Yes, indeed. Because a huge amount of money has been dedicated to fix the banking system in all the world, in the US, of course, but in particular in Europe. And here in Europe, we need to use this money to have, as soon as possible, a performing financial system lending to the non-financial companies, lending to households.

And at the same time, distributing their efforts and taking -- taking all the measures needed to avoid the creation or re-creation of national barriers in the functioning of financial markets. And at the same time, to --


ALMUNIA: -- asking all the shareholders or the bondholders to also contribute to the restructuring.


QUEST: That's the Commissioner for Competition Almunia on BMI and IAG.

Now, to the Goldman Sachs story, and in his "New York Times" op-ed, Greg Smith made his dissatisfaction very public. In a moment, we will discuss what you can do if you think your workplace is just as toxic and destructive.




QUEST: "Toxic and destructive." Higher trading at clients' expense. Goldman Sach's reputation has taken a battering this week. The shares, though, seem to have regained some of their shine, or at least lost not any more.

Right now, Goldman's shares are more than 2 percent higher in New York, having dropped 3 percent on Wednesday after Greg Smith's resignation article created a furious op-ed in the "New York Times."

The "I quit" moment by Greg Smith was pretty explosive. Of course, when you want to leave your job, it is best to go out --


QUEST: -- with a bang.


TOM CRUISE AS JERRY MAGUIRE, "JERRY MAGUIRE": Well, don't worry. Don't worry. I'm not going to do what you all think I'm going to do, which is -- flip out!

Who's coming with me? Who's coming with me?


CRUISE AS MAGUIRE: Who's coming with me besides Flipper, here?

RICHARD NIXON, FORMER PRESIDENT OF THE UNITED STATES: I have never been a quitter. Therefore, I shall resign the presidency effective at noon tomorrow.

BARRY DEL SHERMAN AS BRAD DUPREE, "AMERICAN BEAUTY": Management wants you gone by the end of the day.

KEVIN SPACEY AS LESTER BURNHAM, "AMERICAN BEAUTY": Well, just what sort of severance package is management prepared to offer me, considering the information I have about our editorial director which, I think, would interest the IRS, since it technically constitutes fraud.

SHERMAN AS DUPREE: Man. You are one twisted --

SPACEY AS BURNHAM: No. I'm just an ordinary guy with nothing to lose.


QUEST: That has to be three of the best classic clips. First, of course, Tristar Movies' "Jerry Maguire," and more seriously, President Nixon's resignation in 1974 after Watergate, and "I'm just an ordinary man with nothing to lose." Lester Burnham's early retirement in "American Beauty."

Not all of us have the opportunity to make dramatic getaways. If you feel the same about your company as Greg Smith did about Goldman Sachs, what would you do about it? Chris Roebuck is a visiting professor of transformational leadership at the Cass Business School. He's formerly the head of Global Leadership for UBS.

We've a lot to cover.


QUEST: I don't want to focus purely on Goldman.

ROEBUCK: Right. Yes.

QUEST: But I do want to know, what should somebody watching, who has similar reservations about their company, do?

ROEBUCK: What they should do is, they should try to do it internally with their boss and with the people in the organization. If that doesn't work, to be perfectly blunt, if you can't handle it anymore and if the organization is not living what it says it should be living in terms of values, it's time to think about leaving.

QUEST: Oh, that -- so, basically, you want -- you suggest that you go to the same management that may be doing the wrong thing and hope they'll have a Damascus moment?

ROEBUCK: Then maybe they will have a Damascus moment, but you have to give them the option, because otherwise, then they might not be aware of exactly what's going on. It might not be them that's doing the thing wrong, it might be somebody else that you've seen doing something wrong, and they need to be made aware of it.

QUEST: Right. So, let's look at it from the other point of view, then, from the company's point of view. You're chief exec of a company, and you want to make sure that your ethos and ethics are being followed through. Look at it from that side. Tell me what the company should be doing.

ROEBUCK: What the company should be doing is effectively managing risk through its people. So, everybody in that organization knows what is right and what is wrong. And that's what went wrong with the financial crisis.

What most chief executives don't know is that if they get that right, if they have the right positive culture, like Goldmans used to have, you can get up to 30 percent more performance from up to 60 to 70 percent of your staff for the same time in the same -- for the same money. It's madness not to.

QUEST: Putting in place strategies so that -- and I don't just mean the disgruntled or those who've got a gripe because they didn't get a pay raise or a bonus. Putting in place policies -- real policies --


QUEST: How difficult is it?

ROEBUCK: It shouldn't be that difficult because it's just the way a good organization should work so that everybody in that organization should be able to say, "Something's going wrong, we need to do something about it."

QUEST: Back to Greg Smith. If what you say is right, he had no option but to leave, because it's unlikely that the management would have listened, and the board of directors, he'd have never got anywhere near them, and he'd have been laughed out. He probably had no option but to go.

ROEBUCK: I agree he had no option but to go. And to be perfectly honest, doing it the way he did, he's probably had so much publicity that one of their competitors will probably have rung him up by now and said, "Come and work for us."

QUEST: And then would have treated him with asbestos gloves.


QUEST: In case he does the same thing.

ROEBUCK: Good for them.


QUEST: Good to see you. There you are, good to see you, many thanks.

Coming up in a moment, the government calls it a vital source of revenue. The critics say it's a human rights aberration. CNN's exclusive look inside the diamond mines of Zimbabwe.


QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in a moment. This is CNN, and on this network, the news always comes first.

The Afghan president, Hamid Karzai, wants US and NATO forces out of Afghan villages immediately. The demand came during talks with the US Defense Secretary, Leon Panetta. Mr. Panetta's in Kabul on a previously- planned visit. He's been forced to try and shore up relations after Sunday's massacre of Afghan civilians allegedly by a lone American soldier.

Syria's uprising has reached the one year milestone. Supporters of the government noted this with a huge rally in Damascus. The United Nations aid chief says a UN team led by Syrian authorities will visit besieged parts of the country over the weekend to observe humanitarian conditions.

French police are searching for a gunman who fled after killing two French soldiers on Thursday. Officials say the gunman opened fire on the soldiers in a commercial area in the city of Montauban. They say the shooter was dressed in black and was wearing a motorcycle helmet.

Belgian schoolchildren are leaving flowers and notes in memory of their friends who died in the horrific bus crash in Switzerland. Twenty- two students and six adults were killed when the bus carrying them home from a skiing holiday crashed inside a mountain tunnel. Belgian military planes are preparing to bring the victims' bodies home.

Argentina says oil exploration in the Falklands is illegal, and it says it will sue any company involved in it. Two British companies are due to begin drilling wells under the Falkland seabed later this year. Argentina, which calls the islands the Malvinas, has long claimed sovereignty, but residents are reluctant to split from the United Kingdom.


QUEST: Zimbabwe is heading for a government shutdown because it's not getting the money it's owed or says it's owed from the diamond industry. The country's finance minister says more revenues are urgently needed from places like this on the map, the Marange diamond fields. In eastern Zimbabwe, they hold what could be the biggest discovery of diamonds in living memory.

Now human rights groups say they are also home to corruption and rampant human rights abuses. In the past, diamond money has been used to fund conflicts in Africa. CNN's Robyn Curnow was given exclusive access to the Marange diamond fields.


ROBYN CURNOW, HOST, MARKETPLACE AFRICA: We're here in the Marange diamond fields in eastern Zimbabwe. This is one of four companies that has a concession to mine diamonds in Zimbabwe. Now there's been a lot of controversy about these companies, about this field.

But the Kimberly process is now given all four companies the green light to export their minerals onto the international market. There's still E.U. and U.S. sanctions and human rights groups say they still are concerned about the situation here.

TISEKE KASAMBALA, HUMAN RIGHTS WATCH: Some of these four companies that are operating the fields are properly (ph) owned by senior members of the army, senior members of (inaudible) sits on some of these boards. Some people who don't have very good histories as well the history of violence from the past. They're very shady characters that are behind these companies.

And our concern is that the money and the revenue from diamond fields will be siphoned by (inaudible) political party to run its repressive machinery, this machinery who are beating people in the rural areas of Zimbabwe ahead of elections.

CURNOW: The Zimbabwean government and the mining companies have gives us this access here, and they say they're running a transparent operation.

GODWILLS MASIMIREMBWA, CHAIRMAN, ZIMBABWE MINING DEVELOPMENT CO.: When you look at the Marange diamond fields, they're very sensitive for us. They represent a critical national resource for us. So it is only natural that our security sector be interested in providing security and so their intricate involvement is in the national interest.


QUEST: Robyn Curnow is live for us in Harare tonight.

Robyn, when you looked at mines, the mines are always dirty and grimy and somewhat brutal places at the best of times. Did you get the feel -- what was your gut feeling when you looked at the mine and saw it?

CURNOW: Well, you know what, Richard, we were understandably dirty and hot. This is, you know, Africa in the summer. These mines are working mines. I mean, there's a lot of diamonds being literally scooped out of the top of the surface there. This four companies as I said are working there and stuff is being done. And that's the whole point.

The mining minister, when I spoke to him, said that they are wanting to, looking to supply 25 percent of the world's diamonds, but currently what they're doing is just scratching the surface. They -- he said to me that all these criticisms are mere peddling of ignorance.

That said, and it must be clear that despite people offering up criticism, the fact is that the Kimberly process has certified all of these diamond mines. It is controlled and monitored by the Kimberly process (inaudible) trade. Where are the leakages, as they are called? Well, that is something the Kimberly process says they don't have a mandate to deal with.

The Kimberly process deals with diamond, rough diamond (inaudible). They don't deal with trying to trace the flow of diamond revenues. For the Zimbabweans, they want to be big players. They want to be part of the global -- as a global international market.

So that's why they invited us in, Richard. That's why one of the diamond companies is taking adverts like this out, double pages in newspapers, explaining, giving of sense of transparency. They think and they believe that by opening up the mines, by offering up interviews and by saying that they're doing what they're doing, that it's an example of the fact that they're playing by the rules.

And the rules of the Kimberly process, whether or not the Kimberly process has teeth, Richard, that's another question. Remember, that global witness (ph) pulled out when they heard that the diamond mines here had been certified.

QUEST: OK. Now the Kimberly process is a complicated and controversial process designed to stop not only corruption and not only the abuses, but obviously the conflict diamonds that have -- that have seeped in (ph) elsewhere. So has the Kimberly process actually succeeded? Or is it on the verge or teetering of failure?

CURNOW: Well, I think it depends who you ask. There is a sense for many people, particularly human rights groups, many countries, who are members of the Kimberly process, feel that the process has lost its legitimacy, because essentially like (inaudible), their mandate is very narrow.

After Sierra Leone (ph), for example, specifically targeting stopping the financing of rebel groups who are trying to topple a legitimate government, that's their mandate. Their mandate isn't to try and monitor diamond revenues in a -- in a state like Zimbabwe or Venezuela or Ivory Coast.

And that's where the criticism is. I interviewed the new head of the Kimberly process, who's an American and she says they might be looking at trying to widen the mandate. Then we're looking perhaps at some change. But remember also, Richard, the Americans have bilateral sanctions against these companies -- these companies. So --


QUEST: All right --

CURNOW -- very complicated, very sensitive, depending who you speak to.

QUEST: Robyn Curnow's in Harare (ph) and we will be making quite certain that there are no samples in her luggage when (inaudible) when she goes back to Johannesburg.

We'll be looking, Robyn. Don't think you'll get anything past us. Robyn Curnow's in Johannesburg. When we come back (inaudible), who says economics isn't popular any more? One day and already 14,300 followers for the Federal Reserve's Twitter page. (Inaudible) tweet.


QUEST: Sum up the economy in 140 characters. Now the Federal Reserve has launched its Twitter page and already got 14,000 followers. It only joined up on Wednesday. So we thought we would imagine how the Fed's Tuesday economic outlook statement might have looked. So imagine it was the Fed, OK? This is the tweet -- could have been -- look at it.

Mod gr for US -- moderate growth for U.S., lab mrkt up; two at Fed_Ben says rates on hold through 2014 #FOMC #Road2Recovery. That could give us an idea one way.

Or we could even get another one. @TimothyGeithner Re: QE3, hold yr horses, crdt conditions still OK 4 now #OpTwist #JustSayin.

And then you get when they start retweeting each other -- this could be how Bernanke retweets everybody else. Imagine: Global mrkt strains easing -- shout out 2 @M_Draghi #LTRO -- the way in which the Fed could actually, in the end, be using its own Tweet (sic) page for monetary policy.

Jenny Harrison is at the World Weather Center for us this evening.

JENNY HARRISON, CNN METEOROLOGIST: Richard, good evening to you. We've been talking about the Heath in Europe. It's so warm across so much of the West, but I have to tell you your temperature in London is a bit down to average in the next couple of days.

You can see some cad (ph) already beginning to stream in, one or two shallows (ph) here as well. But for the most part, we have still got this very, very strong and dominant area of high pressure, so much so those temperatures making it feel much more like May than March.

And as that high sinks (ph) southward, it'll still be feeding in this very, very warm air from the south, and that'll spread across much of the south and the east of Europe as well, so those temperatures well above average. But as you can see further to the north, it will feel much more like spring, which is probably a good thing, 21 Celsius the high in Paris on Friday.

And that, of course, is 70 degrees Fahrenheit. But look at it compared to the average. So we're looking at 10 degrees above average on Friday. Does cool down again as we head into the weekend. Doesn't get quite that warm in Berlin, 20 Celsius on Saturday, but the average is only 8. So 12 degrees above average on Saturday.

And I think also Kiev definitely worth mentioning, when you think that for weeks just a couple of months ago we were talking about this bitterly, bitterly cold air there and how well below average temperatures were.

Well, the average is 4 this time of year. And look at this, by Sunday, 15 degrees Celsius. And also the (inaudible) ahead, well, this is the outlook for temperatures, much warmer across the central and eastern areas of Europe.

Having said that, of course, also much warmer means drier for the most part, not a great deal of rain in the long-term forecast. There's the rain coming in in the immediate future across the west.

When it comes to delays at the major airports, some fairly windy conditions and those windy conditions spreading through the eastern and the Med (ph) as well, even Damascus in the afternoon seeing possibly an hour in terms of delays. So there are those temperatures, mild as they are, 21 in Rome as well this Friday.

And as I say, that is 70 degrees Fahrenheit. But the U.S. is seeing a few showers and thunderstorms in the last few hours across the east. But, again, here it's all about those temperatures. Getting on, can you believe it, for 15 to 20 degrees above average. The jet stream is much further north, so all that warm air from the Gulf is piling up.

And look at these temperatures on Wednesday. Look at that. Minneapolis, 23; the average there is only 4 and the heat will stay in place there for the next few days. Atlanta, let's (inaudible), 28 on Saturday, 10 degrees above average, Richard.

QUEST: Many thanks, Jenny Harrison, at the World Weather Center. And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, hope it's profitable. MARKETPLACE EUROPE is next.


JULIET MANN, HOST, MARKETPLACE EUROPE: Welcome to MARKETPLACE EUROPE. I'm Juliet Mann in the B.T. Tower, a pivotal landmark in London's communications network. Built in 1964, it was London's tallest building for 16 years.

I'm on the 34th floor, which revolves, providing an ever-changing view of London. But it's not moving as quickly as the fast-changing communications industry. It's a sector which has evolved beyond all recognition since this tower was built, influencing every company in Europe.


MANN (voice-over): Coming up, I talk about the future of communications for business with the CEO of B.T. Group, Ian Livingstone, and the cell phone industry needs to change, says Franco Bernabe, head of Italy's largest mobile operator.

MANN: The problem with communication is the illusion it's being accomplished, so said George Bernard Shaw, the playwright, and one of the founders of the London School of Economics, which is down there.

MANN (voice-over): In this day and age, there are no shortage of ways in which to accomplish communication. Internet, satellite and smartphones are ruled at the heart of European business.

MANN: The question is what's coming next. I sat down with Ian Livingston, CEO of B.T. Group, to ask what lies ahead of business communication in Europe.



IAN LIVINGSTON, CEO, B.T. GROUP: I don't know of a business today for whom their network isn't absolutely core of what they do, and the network not only has to be able to cope with larger amounts of data, it has to be more and more secure. It has to be scalable and it has to be global.

And we are seeing a big change and more and more cooperation's becoming absolutely network-centric, and will that be the way they run their business through use of SAP or Oracle, or whether it be the fact that they allow people to work more and more from home. The network is absolutely the heart of a business.

MANN: And do you see there's a big difference between what consumers what and what business wants?

LIVINGSTON: Well, one of the things we're seeing is the barrier between business and consumer, is actually starting to come down. And what was assumed in the past was very much, you know, your business life is over here and your -- and your residential life is over there, that's not true, and it's certainly not true for most senior business people.

And it used to be that the I.T. department used to say about an iPad, how do I stop people using it on our corporate network? And these are different questions today. It's how do I help them use it securely on the corporate network. So what's called the consumerization of business is absolutely happening, and no longer is business in the lead and the consumer side is catching up.

Actually, often the consumer side is starting off and business is catching up. So the distinction is really a lot less clear than it used to be, and that creates great opportunities for efficiency, but also some real challenges in terms of security and making sure people are looking at the right thing and doing the right thing when you want them to.

MANN: And in terms of business, when looking at PCs being an eternal truth, we're looking at fixed-line telephones. We're looking at fiberoptics. It's about the big picture.

LIVINGSTON: And mobile devices and tablets, wherever you need it, I mean, they talk about what's called best available network. So when you're in an office, you might use a fixed network. When you're out and about, you might use wi-fi. If you're traveling in a car, you might use your -- you might use 3G or 4G.

Finding the right thing, but making sure that the -- it's always available to you, wherever you want to be. So it's -- and I think we're just at the start of this revolution, not just for businesses but also for consumers. People are going to become basically networked all the time, and that's a great opportunity for business. It really is. But also a lot of challenges for business and we hope to help them with it.

MANN: Now some the bigwigs at Apple have been saying that the future will be -- everyone just linking up by tapping in a name, so forget telephone numbers, forget all those characters that make up your email address. The future is going to be, say, I'd like to speak to the CEO of British Telecom. I'd like to speak to Ian Livingston, and suddenly we're in touch.

LIVINGSTON: Well, I think what we call -- we call unified communications and absolutely we're -- you know, today already, if you look at your Outlook, you may well have a name and then you can click to call them; you can set up a conference, do an IM with them. You see where they're busy, whether they're in a meeting or whatever.

So we certainly, and our customers are using a lot more unified communications and we see it very much as the future. So you can tell where people are. You can have a choice of how to communicate, however is appropriate to them. And they can -- so basically put their status in. But it certainly does make it a lot more efficient to communicate with people in the best way at the best time.


MANN: Ian Livingston of B.T. Group there. Join me after the break, when we hear from the CEO of Telecom Italia, Franco Bernabe, who spoke to Jim Boulden at the recent Mobile World Congress. See you then.



MANN: I've taken to the streets of London to ask people if they remember when mobile phones looked like this. The GSM Association says there are more than 6 billion mobile connections worldwide, and that number is growing fast.

This model came out in 1992, when pretty much all you could do was make a call. Now, of course, you've got photos, video, access to the Internet and so much more. But what do consumers really want from their mobile devices?


UNIDENTIFIED MALE: I think I had a friend who had one, and I admired its technology and its lightness, its compactability (sic). And its --

MANN: Its compactability (sic)?

UNIDENTIFIED MALE: Well, it was then.

MANN: Yes.

UNIDENTIFIED MALE: But if you think, then, we, you know, no, we thought they were marvelous. Gosh. The idea of holding one now is quite extraordinary.

MANN: Are you mobile now? Do you have the latest thing?

UNIDENTIFIED MALE: I am, but I am -- I mean, I am to technology what Attila the Hun was to flower arranging.

MANN: Do you remember these? Do you know what it is?

UNIDENTIFIED FEMALE: I know what it is. My parents used to have a similar one. It was turquoise, though.


MANN: Go ahead, have a feel. Would you put that in your handbag? It's going to really weigh you down.

UNIDENTIFIED FEMALE: It's quite heavy.

MANN: It's pretty amazing, isn't it, to see how far the technology's come so quickly.


MANN: I mean, what sort of things do you use your mobile device for?

UNIDENTIFIED FEMALE: I'm just on email now.

MANN: So sense of nostalgia or glad to be rid of it?

UNIDENTIFIED MALE: Nostalgia, actually, yes. I mean, yes, the -- this --

MANN: You can't really fit that in your back pocket, though.

UNIDENTIFIED MALE: No, no, you've got (inaudible) used to walk around with it, didn't you, and put them on the bar and all that kind of stuff, so --

MANN: I'm on the phone.

UNIDENTIFIED MALE: Oh, yes, I'm on the phone. No, they're -- they are nostalgic. I have to say, this one's -- looks even more modern than the one I used to have.

MANN: Do you remember, in fact, then, did you think that your mobile would turn into what it has done now, with photos and videos?

UNIDENTIFIED MALE: No, it's incredible how -- I think this is the biggest change in the last kind of 20 years, that --


MANN: We've heard from consumers. Now from a business perspective, Jim Boulden caught up with the CEO of Telecom Italia, Franco Bernabe, at the Mobile World Congress in Barcelona.


FRANCO BERNABE, CEO, TELECOM ITALIA: Having calling for higher network charges simply because we need to invest more, that's not a problem for Telecom Italia. It's a problem for the entire industry. I think we are in a situation where 80 percent of our revenues come from voice, and 20 percent from data.

And the traffic is 80 percent data and 20 percent voice. So we need to rebalance this. We need to find a new model, a model that allows us to finance the growth and the explosion of data traffic in (inaudible).

JIM BOULDEN, CNN REPORTER: So like a lot of telecom firms, you're carrying the data for other companies that are making the money from that data. You're not making as much money from that data?

BERNABE: Well, I think that the data explosion is the consequence of a completely new approach of consumers to the communications (ph) networks. I think that consumer have benefited a lot. I think that the ecosystem have benefited a lot.

I think that new companies have benefited. But I think that a too high amount of burden has been imposed on data communications companies, and this has to be reversed (ph). But I think that working together with the rest of the ecosystem, we'll find the right solution.

BOULDEN: Let's talk of the European debt crisis, if you will. You're very much focused on cutting debt at your company. What lessons do you think you could maybe teach some of the people, especially in Brussels?

BERNABE: Well, I think that in order to have that, we need to cut expenditure. I mean, that's the main way out of debt. And cutting expenditure means going very deeply into your processes, into what you do, how you do things, making it more efficient, more effective and this is something that needs to be done, not only at the Italian level, of course, but at the European level.

I think that we have come to a point where government expenditures are way too high. I think however, with respect to this, Italy has done, in the last three or four months, the right things, because one of the major public expenditure burden was pensions, retirement benefits and this has been addressed very effectively by the government. I think that it shows the way in which probably other governments will have to move as well.


MANN: That's it for this week's MARKETPLACE EUROPE. Let me know what you think the future of mobile technology will be. You can tweet me @JulietMannCNN. See you next time. Bye-bye.