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QUEST MEANS BUSINESS
US Stocks Soar; Spain, Repsol Angry Over Argentina's Nationalization of YPF; Europe Backs Spain in Dispute With Argentina; Argentine Nationalization Spree; Cautious Optimism on Global Economy; IMF Report on Austerity Versus Growth; Yen Slips; Euro Gains; The Millennials: The Road to Recognition
Aired April 17, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: The message: if you want our oil company, pay up. Repsol demands $10 billion from Argentina.
Edging up. The IMF raises the outlook for global growth.
And up all night? I don't think so. Sheryl Sandberg's working 9:00 to 5:30.
We've an hour together. I'm Richard Quest, and I mean business.
Good evening. Before we go one moment further, we need to update you with what's happening in New York, where there is an an ebullient mood on the market.
QUEST: The Dow Jones Industrial is up now 200 points. And we talked yesterday about 13,000. Well, through and up and beyond. Excuse me. Up 13,000 -- up to 13,120. Good corporate earnings and a successful bond auction at the heart of the reason. We'll give you more analysis on that in just a moment.
Our big story tonight, though. Spain's prime minister says that Argentina's nationalization of YPF is unjustified and damaging to both sides. The oil company Repsol says the move is illegal and will not go unpunished. It is seeking $10.5 billion in compensation.
And this is how the story looks tonight. Damaging good relations, says Mariano Rajoy, in court at the World Economic Forum in Puerto Vallarta in Mexico. The Spanish prime minister says the nationalization of Repsol's assets there are unjustified. Argentina is scaring off investment opportunities and, crucially, between Spain and Argentina, he says trust has been broken.
(BEGIN VIDEO CLIP)
MARIANO RAJOY, PRIME MINISTER OF SPAIN (through translator): This breaks with, I think, the good understanding that has always existed between our two countries, and I certainly think this is damaging to Spain and to Argentina, as well. I am sorry to have to say this because what happened certainly affects and, to a considerable degree, the international reputation of Argentina.
(END VIDEO CLIP)
QUEST: So, that's the way the politics is working. It's a very confused situation. There's a report on a Chinese financial website that says there's a non-binding agreement by the Chinese company Sinopec to purchase YPF for $15 billion.
If that is correct -- if it's correct -- it raises the question why Argentina may have moved now to expropriate the Repsol stake in YPF.
It doesn't matter, though. Strip out YPF from Repsol's assets and you get a new balance sheet, which is why Repsol shares continue to fall, down a further 6 percent in May at 1642, because that share price has to reflect a much lower profit and revenue stream and lower asset base.
So, YPF shares were also down sharply. Both Repsol and YPF are down more than 30 percent on the year to date.
That's the financialese behind it. The politics in Spain, where people are fuming, we turn to Al Goodman, who is our correspondent in Madrid, our bureau chief. Al, it is no exaggeration to say -- well, you tell me if I'm exaggerating -- they're spitting feathers in Madrid.
AL GOODMAN, CNN MADRID BUREAU CHIEF: Indeed. And what you heard in that anger from the prime minister, his first public comments over there in Mexico, he did not say exactly what Madrid is going to do in reprisals. That is expected to come later this week. That's what some of his ministers said late last night.
But we still don't know what they're doing. He is expected to be trying to line up allies. Mexico, he next goes to Colombia, and he's got other officials working the European Union, trying to get the allies together to see what they're going to do.
Now, we also heard an earful of anger from the Repsol chairman himself at a press conference at the company headquarters this day. Here's how he put the situation. Let's listen.
(BEGIN VIDEO CLIP)
ANTONIO BRUFAU, CHAIRMAN, REPSOL (through translator): I must say that unfortunately, the president of Argentina yesterday did something absolutely illegitimate and unjustifiable from a legal point of view. This act was preceded by a campaign of pressure and leaks that aim to cause a drop in the YPF share price so the expropriation will be at a cheap price.
(END VIDEO CLIP)
GOODMAN: Richard, a Repsol aide told CNN that there is no deal yet with some other company to potentially take over the shares of YPF, but there are some interested parties there. Richard?
QUEST: All right. Al Goodman, we'll talk more about this in the days ahead. Al Goodman, our bureau chief in Madrid.
The European Commission says it is concerned about Argentina's actions and it has scrapped a meeting with Argentine officials that were scheduled for this week. A spokesman for the EU Trade Commissioner told me Europe is speaking with one voice on this issue. And more than that, the Europeans are concerned that Argentina should be worried.
JOHN CLANCY, EUROPEAN COMMISSION TRADE SPOKESMAN: They have important trailings. They're an important trade partner, of course, with Europe, with the member states, such as Spain. And it's very important that Argentina respects its trade arrangements that it's put in place, notably in this bilateral investment treaty between Spain and Buenos Aires.
QUEST: Are you saying they shouldn't have expropriated and nationalized in the first place, which is allowed into the treaty, or having done that, they should come forward with proper proposals for compensation?
CLANCY: Exactly. You're absolutely right. This can take place. But it's more about the question of the signal it sends to the international community and the manner in which it's done. What we see is, in fact, a very negative signal that Argentina is sending, not only to Europe, but to all the international trading community.
Because what investors are looking for, as you know well, Richard, is stability and predictability when it comes to investing. And the kind of signal that Argentina were sending yesterday and today is quite the opposite.
QUEST: The president of the Commission says he looks forward to -- or calls on both sides for a negotiated settlement. If there's a matter of principle here, there really can be no negotiated settlement, can there? At the end of the day, if Argentina is a sovereign company expropriate, it either has to pay compensation or the European Union has to take action in retaliation.
CLANCY: Well, the specifics of what Argentina can and cannot do are quite clearly laid down in black and white in the legal agreement that they've signed up to with Spain. So, ultimately, in that respect, it's for Spain, for Madrid, and for Repsol itself to look into the potential legal avenues it may follow.
But you're absolutely right to point out that compensation is certainly a normal procedure when a form of renationalization takes place. But as I want to underline, it's more about, right now, the negative signal Argentina is sending to its trading partners overall, and especially to Europe.
QUEST: And is Europe tonight speaking with one voice on this subject?
CLANCY: It certainly is. We already last week made it very clear that we were fully behind Spain in its position in respect of this matter with Argentina. That was the case last week, it's the case today, and it will be the case tomorrow.
QUEST: The EU Trade Commissioner spokesman talking to me earlier.
YPF is the latest in a string of nationalizations under President Cristina Kirchner. Jim Boulden's with me tonight and has more on what -- what they've taken -- well, dare I say taken? That's pejorative. What's been expropriated.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Exactly. Some of the very big moves that the president has taken since she took over in 2007, and these have alarmed the markets as they've come along over the last four years.
Let's start in 2008. $24 billion in the private pension funds. Now, this fund was privatized first in 1994. But during the economic crisis, it was seized, she said to quote, "protect workers and pensions." Now, these can be used now to pay the government.
Also 2008, the national airline -- now, to be fair, each privatization was a disaster. It was bought by Iberia, it bought a big stake when it was sold off in the 1980s. But along with the postal and water services, the privatization did not work. Very poor investments. Understaffed, et cetera. So, her government took nearly 100 percent stake in 2008, but it's not clear the price the government paid.
2009, she seized $6.5 billion of Central Bank reserves to help pay off creditors instead of leaving that money for the bank to do what it needed to do.
Last year, the government said that all oil and mining exports by foreign national companies have to be repatriated back to the country. The law had originally been 30 percent had to stay in the country. She said it all has to come back.
And then, of course, this week, trying to buy 51 percent of YPF. Now, let's look at what a post-government nationalization of YPF would look like. Argentina would own, as we said, 51 percent. A private equity group in the country, a family, would own 25 percent -- continue to own 25 percent.
This 18 percent would continue to be traded on the Buenos Aires Stock Exchange. Repsol would be left with just 6 percent from its initial stake of 57 percent, Richard.
QUEST: All right. Hang on. Let's -- let's come back and look at this. This is fascinating. So, all these various assets --
QUEST: -- there is legitimate reasons put forward for the actions taken in every single one, isn't there?
BOULDEN: Yes. She would say very clearly, this is money for the people, and this is money that needs to be used because of what -- a lot of of people see was disastrous privatizations in 1980s brought on by the IMF. And of course, then we had the bankruptcy in 2001, and she is following a little bit of what Venezuela has done.
But let's be fair. In one thing with YPF.
BOULDEN: Most governments in Central and South America own a large stake of their oil firms. Argentina privatized the whole thing back in the 80s. She's bringing it back into the fold.
QUEST: Jim, good stuff. Many thanks, indeed. Jim Boulden with that.
Just ahead in a moment, we'll talk about growth and we will talk about what's happening with the fiscal monitor at the IMF in your marketplace. The IMF's fiscal affairs chief will be with me. QUEST MEANS BUSINESS, good evening.
QUEST: Tonight, the outlook for the global economy is improving, just don't expect a collective sigh of relief. The IMF is warning that rough winds may shake the darling buds of growth right off the tree.
The good news is, the IMF's latest WEO, the world economic outlook, is predicting the global economy will expand by 3.5 percent it says here. That's up from January's forecast. It's a very small improvement, just 0.2 percent.
It's still below 2011, which shows growth is slowing down. Growth in 2011 was close to 4 percent. And there are two major snags, Europe and the price of oil.
Today also, the IMF publishes the Fiscal Monitor, looking at the imbalances in economies and the austerity policies being followed by some countries. I'm joined by the author, who is also the IMF's Fiscal Affairs director, Carlo Cottarelli, who joins me from the IMF.
Look. The -- we've got the numbers and we've got the outlook and we've got all these things, but if we look at the policies, Mr. Cottarelli, it really is coming down to a very simple choice: is there -- particularly in Europe. Is there too much austerity too quickly? And as I read the IMF's views, the answer is yes.
CARLO COTTARELLI, FISCAL AFFAIRS DIRECTOR, IMF: Yes, I think you are perfectly right. That's the difficulty of the situation. If you tighten fiscal policy too little, markets get worried because they're worried about fiscal solvency. If you tighten fiscal policy too much, markets get worried about growth.
So, what we say is that you need to strike the right balance between the two -- these two needs. And if you can adjust gradually at a steady pace with a medium-term prospective.
QUEST: And if -- and I --
COTTARELLI: Now, of course, on canvas --
QUEST: But you're suggesting at the moment that balance isn't right.
COTTARELLI: No, I think that all together, if we look at Europe, the pace of adjustment is broadly OK. What we say is that it shouldn't go further. If there are further shocks to the economy, I think it will be appropriate to let the deficit increase in line with what we call the automatic stabilizers, not to upset to the decline in revenues if there is an economic shock.
But I think if we look at the current, take into account the values risk, the current pace of fiscal adjustment is broadly adequate in Europe.
QUEST: The imbalances that we saw in the global economy as we went into and out of the recession, those very imbalances that structural reform from the G20 process was supposed to begin to unwind, that is not happening yet, really, is it?
COTTARELLI: Structural reform is happening in some countries and in some forms. Just to give you an example, pension reform in Italy's been a major one, and it really improved quite a lot of fiscal account. We also see again in some countries, like Spain, like Italy again, labor market reform.
But it's true that much more needs to be done in Europe over the medium term, for example, in strengthening competition in some key sectors, like the service sector.
QUEST: But if we look at the global economy, we are now in this terrible situation. The US is picking up speed but is still not growing fast enough to bring down the jobless numbers. China slows down to a slow, soft landing. Australia and the South Pacific continues a pace, and Europe's in the doldrums. This is not a balanced global economy.
COTTARELLI: It's not -- certainly, it's not an easy situation to deal with. We hope -- we think that in some countries, there is a need to do more to reduce the imbalances. One key should be over the medium term to reduce imbalances is the still large fiscal deficit of the United States. What is a cause of concern for us is the fact -- it's not so much the short term.
COTTARELLI: The US can finance its deficit easily. But over the medium term, there is a need to lower the deficit in the United States and bring down public debt. And as you know, that is not yet political consensus on a plan to do this.
QUEST: You and I will have retired before meaningful deficit reduction takes place in the United States. You know it and I know it.
COTTARELLI: Well, actually, this is not exactly the case. I think there was a sizable reduction in the deficit last year and this year, about 1 percentage point of GDP.
There is a risk, actually, there is too much fiscal tightening next year, because if nothing is done, because they're coming to an end of temporary support measures, next year in the US there will be the largest fiscal adjustment since 1947, 3.5 percentage points in one year. And that will be really too much.
QUEST: Mr. Cottarelli, good to see you.
COTTARELLI: So, there is a need --
QUEST: Good to see you. Forgive me, I -- you were saying, there is a need to make these changes. Many thanks for joining us. Mr. Cottarelli joining us from Washington. I apologize one dozen times. Missed with the satellite link, and of course I certainly didn't mean to interrupt him at the end of his answer.
Now, as we continue, one housekeeping note. The program will be coming from Washington, DC on Thursday. We'll be at the IMF and World Bank for the start of the spring meetings. QUEST MEANS BUSINESS in DC later this week.
The IMF puts the bonus and the onus on central banks to do the necessary work. In tonight's currency conundrum, we're asking, why was the Bank of England established?
QUEST: Was it A, to create legal tender? B, to facilitate tax collection? Or C, to raise money for William III's war against France? The answer later in the program. Now, though, rates to the break. The yen slips after a rise in German investor confidence. The euro gains against the yen and the dollar after Spain's bond auction did better than expected. The rates, now the break.
QUEST: In the world of The Millennials, people demand instant results and rewards, and nowhere more so than in the fast-moving technology sector. Twenty-six-year-old Joe Braidwood is the chief marketing officer of the start-up company SwiftKey.
Now, the company was started in 2008 by a group of university friends. Since then, it's become one of the most popular Android apps on the market. Four years on -- which, frankly, is a lifetime in the life of a Millennial -- this company is now looking for recognition at the Global Mobile Awards in Barcelona. Does he win the award as a Millennial?
UNIDENTIFIED CORRESPONDENT (voice-over): They are young and confident, educated and ambitious. Born in the 1980s, they are the new generation entering the workforce, and their thirst for success knows no bounds. They're The Millennials.
Previously on The Millennials, in London, Joe Braidwood admitted that he can't do it all.
JOE BRAIDWOOD, CHIEF MARKETING OFFICER, SWIFTKEY: I kind of accepted that if I'm not going to do everything, it's not all going to be done my way. But that's not a bad thing.
UNIDENTIFIED CORRESPONDENT: The lessons that Joe has learned will be put to the test today. He's in Barcelona. And in just a few hours, he'll be facing the cameras.
BRAIDWOOD: I'm very nervous, because we're up for a pretty major award today. It's the Global Mobile Award for Most Innovative App.
So, I'm about to go -- this is our little apartment that we're staying in. I'm about to go just a couple of blocks that direction to the Theater of Barcelona, which is where the event's taking place. And fingers crossed, we might come back with a gong. Who knows?
UNIDENTIFIED CORRESPONDENT: Before the big event, Joe embarks on a last-minute network drive.
BRAIDWOOD: LG are here. Samsung are there. I still haven't found HTC's group, but everyone's been raving about their new One phone.
Hey, Billy. I wanted to show you our latest build. Is it this one that's the most powerful phone in the world now?
UNIDENTIFIED CORRESPONDENT: With the networking out of the way --
BRAIDWOOD: Guys, everyone wave.
UNIDENTIFIED CORRESPONDENT: -- Joe and his team are ready to face their moment of truth.
ANNE BOUVEROT, DIRECTOR GENERAL, GSMA: I would like to welcome you to the 17th Mobile Awards.
BRAIDWOOD: I think from our perspective, this is probably the most prestigious award that we've ever been nominated for. And probably the most prestigious award that we could win.
This is the mobile industry's top body saying you are the most innovative mobile app of the year. And from pour perspective, being able to even come close to laying claim to that is a phenomenal opportunity for us.
UNIDENTIFIED CORRESPONDENT: Joe's SwiftKey team are joining more than 150 nominees.
UNIDENTIFIED CORRESPONDENT: All vying for a prestigious Global Mobile Award.
UNIDENTIFIED MALE: Speaking of forms of technical and business model innovation in the development of mobile apps, this category aims to recognize game-changing developers that are pushing back the boundaries and moving the market to the next level.
UNIDENTIFIED CORRESPONDENT: The competition is fierce. Tonight, they're up against household names like Google.
BRAIDWOOD: What we know is that we're up against heavyweight competition, and so the fact that we've been able to cut through and really present to the judging panel the innovation that lies in our technology and in our application, I think, is a great achievement.
UNIDENTIFIED CORRESPONDENT: As the event reaches its climax --
BRAIDWOOD: We're ready.
UNIDENTIFIED MALE: Before you tell us who's won --
UNIDENTIFIED CORRESPONDENT: Joe's competitiveness is also at its peak.
BRAIDWOOD: They've got the network and the sort of great bulk to be able to throw their weight behind it, but they haven't sort of necessarily all got together and starting in their bedrooms and worked tirelessly for three years on a product that would then see success. So, I think even if we are the underdog, I think we're probably more deserving.
UNIDENTIFIED CORRESPONDENT: The moment of truth arrives.
UNIDENTIFIED MALE: So, for the winner, the judges have clever technology and much needed innovation that will make typing on SmartPhones --
UNIDENTIFIED MALE: -- much more easier. That's giving it away. The winner is SwiftKey.
(APPLAUSE AND CHEERS)
BRAIDWOOD: That was awesome!
UNIDENTIFIED CORRESPONDENT: For 26-year-old Joe, who's been driving the brand tirelessly, this is a major accomplishment.
BRAIDWOOD: This really says that the work that all our team have been putting in to try and improve the way that people type is something that the industry should really pay attention to, and I think that's -- that's the most important message. It also looks great in our e-mail signatures.
UNIDENTIFIED CORRESPONDENT: Next week on The Millennials.
MICHAEL BURBACH, ASPRING ACTOR: I'm right here. Patrick McMullan's office. My boss.
UNIDENTIFIED CORRESPONDENT: In New York, Michael Burbach finds part- time work with one of the city's most famous photographers. And David goes back to university to look for new business opportunities.
QUEST: Honestly, I had not seen that report before we showed it to you then, and I had absolutely no idea. I was on the edge of my seat as to whether SwiftKey had won or not. Congratulations.
Now, in a moment, are you confident? Look. Are you ambitious? Are you a Millennial? You may have some of the good traits as well as the bad, and the bad as well as the good. And would you like to be part of our Millennials series?
You've seen the sort of things that we are following and the sort of people. If you are one of those, we need your creative pitch. Tell us why you are a Millennial and why you stand out. I need you to e-mail us to firstname.lastname@example.org or you can e-mail me directly at email@example.com, whichever you prefer.
But the point is, as our first set of Millennials comes to an end, or at least we're following them through their moments of achievement, failure, and success, so now we're looking for the next set of Millennials, firstname.lastname@example.org.
In a moment, Goldman Sachs does better than expected. It's not a star performer on Wall Street. And also, why Citibank or CitiGroup's shareholders decided Vikram Pandit gets paid too much, or at least isn't worth the amount he gets paid. It's QUEST MEANS BUSINESS. It is Tuesday, and you are most welcome.
RICHARD QUEST, CNN HOST: 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 man who has admitted killing 77 people in Norway last year says he'd do it again. Anders Breivik made a statement to the court at his trial in Oslo on Thursday. He said he represented a European resistance movement against multiculturalism, and that he's linked to others who share his beliefs.
Syrian activists accused troops of hammering targets in the country's north and south in violation of the U.N.-backed cease-fire. An opposition group says at least 53 people have been killed on Tuesday. This video online appears to show recent shelling in Homs. The government says armed terrorist groups are escalating their attacks.
The Spanish oil company Repsol says it wants more than $10 billion compensation from Argentina. Argentina is moving to nationalize Repsol's local unit, YPF. Spain's prime minister says that's damaging relations between the two countries.
International Monetary Fund says global growth is improving and still remains fragile. The IMF says world output is expected to grow 3.5 percent this year, up from January's forecast, still below last year. There are two potential risks to recovery, Europe's situation and the price of oil.
One of NASA's space shuttles has made a dramatic flight pass over Washington, D.C. The Discovery flew over the monuments along the Washington Mall before making its way to the museum -- at a museum in Virginia via, of course, an Air Force shuttle piggybacked on a modified Boeing 747.
QUEST: Tonight, Goldman Sachs is boosting its quarterly dividend after the bank beat the street. Alison's at the New York Stock Exchange. Alison Kosik joins me now.
They beat the street. The number -- I mean, look, they beat the street and yet the numbers were still rather poor.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: OK, so I'm going to walk you through why. So, yes, Goldman reported solid profit. It more than doubled from a year ago, beating expectations.
But the thing is, you dig a little bit deeper, and you look at the results, Richard, and they're not so shiny, because if you take out a $1.6 billion payout the firm made to preferred shareholders, this is from a year ago, then profits actually fell 23 percent from a year ago.
And because the first quarter was so strong for the market, when you look at it overall, there's this sense that's growing that the company is kind of at its high water mark already, and this is kind of a good-as-it- gets from Goldman Sachs. So this is what I'm hearing a couple of analysts that I talked to today.
You know, you look at Goldman's trading and investment businesses, you know what, they weren't as strong as in the past. And it didn't get itself quite as involved in the M&A deals in the first quarter, as some of its rivals.
Look, it was left out of Facebook for one. You know, so that was a biggie that Goldman lost. You know, even so, investors have softened from a bit of a selloff before the opening bell today. Shares of Goldman are down only about 1 percent right now, Richard.
QUEST: The story I found fascinating was this Citigroup and the investors in Citigroup have voted against the executive compensation package, on the advice -- on the advice of various institutional investors and organizations. So what was their complaint? Are there too many noses in the trough?
KOSIK: Could be, or it could be this, Richard. You know, could it be that the good old days are over, at least for Citigroup? You know, have shareholders, have they had enough of these huge compensation packages when the CEO is not delivering? So this is really being targeted at CEO Vikram Pandit.
Outgoing chairman Richard Parsons says, you know what, we're going to go ahead and find what he calls a more quantitative formula-based method for setting top executive pay. You know, you look at Pandit, he got some nice compensation last year. That even when the bank's shares tumbled 44 percent.
Pandit got $15 million in total compensation. Doesn't include a $5 million cash bonus and a separate retention package, Richard, that could be worth $40 million. I say they had enough. What do you think?
QUEST: All I know is that Richard Parsons -- it's the same Dick Parsons as was the chairman -- was the CEO and of course TimeWarner, our company, is the consummate, consummate chairman diplomat. If there is oil to be (inaudible) -- if there is oil to be poured on investor waters, Dick Parsons is the man who knows how to do it.
Finally, the market is up 200 points, 13,000 -- whoa! And there's no real -- there's no real reason on average Tuesday in April.
KOSIK: Coca-Cola had good sales and profits. There you go.
QUEST: Right. We'll leave it at that. Coca-Cola, Dick Parsons, Citigroup and Goldman Sachs -- (inaudible) enough. Alison, we appreciate it as always.
Now a rally for Europe, broad gains for the main industries, IMF, the global growth forecast, the Weo (ph), the German in the zeu (ph). Investor sentiment was unexpectedly high. Interesting inflation numbers in the U.K.
They were bad, although some people suggest they were one-offs. Inflation seems to be contained in Europe, according to the commission's numbers or U.S. taps (ph) numbers. And there was demand for Spain's 12- and 18-month bills, more than expected.
Now unsavory relevant -- revelations from the tabloids. An attorney and some of the U.K. victims is in the U.S. (Inaudible) tell us (inaudible) and (inaudible).
QUEST: Why was the Bank of England established? The answer is C. It was established (inaudible) in 1694 to raise money (inaudible) King William III's war against France. No prize if you got it right. You pat yourself on the back.
The hacking scandal surrounding the Murdoch empire may be going stateside. An attorney who represents some of the victims is now in the United States. Mark Lewis is preparing a case on behalf of at least three clients. They suspect they were hacked on American soil. Maggie Lake is in New York and has been talking to Mr. Lewis.
If Mr. Lewis gets the case up and running in the United States, that changes everything.
MAGGIE LAKE, CNN CORRESPONDENT: It does, Richard, but it also depends on the details of it. Here's what we know right now. Mark Lewis has been here in New York. He's here all week, meeting with lawyers, exploring his legal options.
He tells us he's representing three to four people, one of them may be an American citizen, believed to be an American citizen, one of them from the world of sport. And the incidents that he's talking about are linked to the alleged phone hacking that happened at the "News of the World," the assertion perhaps that that hacking happened while they were on American soil.
But -- and this is where it gets really interesting. Lewis says although he has no hard evidence yet, he believes the problem is much more widespread.
(BEGIN VIDEO CLIP)
MARK LEWIS, HACKING SCANDAL ATTORNEY: This is certainly the "News of the World" in England.
But as I've been traveling here, I've been contacted by many people who've had, so they say, similar problems, not just hacking but maybe being trailed or have fallen out with some American Murdoch and News Corp company and then found themselves, say, were at the wrong end of investigations, the wrong end of information gathering.
LAKE: Yes. So do you believe through this process there are going to be new allegations that come out that have not been aired in the Levenson Enquiry? Or we have not heard yet?
LEWIS: I haven't just visited America. I was in Australia as well recently, and the same things that happened, it's a systemic problem that has come -- it's really coming from the extent of ownership by one company.
It -- you know, power corrupts; absolute power corrupts absolutely. When you have a very wide media ownership, it moves onto the fact that it has power. And it can look at the power and can use that power perhaps wrongly.
LAKE: So this isn't just one publication that had issues that went awry, that had judgment problems. You think that this is pervasive through the corporation?
LEWIS: The reason for the problem in England of phone hacking is because of the culture of the company. There was pressure on the journalists to get stories.
LAKE: And I just want to circle back to this, because this is important. And this is related to activities of journalists and news reporters at "News of the World." You don't know whether this has happened at any other News Corp properties, either, (inaudible) or here in the U.S., importantly, newspapers here in the U.S., television outlets here in the U.S.?
LEWIS: I mean, that's entirely the case. I mean, to explain it, right, what was lucky was that the -- in order to get some evidence is that Glenn Mulcaire, inquiry agent, the detective, had written down notes of his activity and for the "News of the World," the English newspaper, between something about December 2001 to June -- May-June 2006.
So that's what the police have. He obviously wasn't the only detective who was doing these things. And I've spoken to an American detective, who was working in America for "News of the World" in England. Now it seems uncanny that you would say, well, the only detectives were this one in America and Glenn Mulcaire.
And "News of the World" was the only newspaper. One gets a feeling that just because the evidence exists in respect to one newspaper doesn't mean to say, you know, if one house gets burgled and one burglar gets caught, it doesn't mean he's the only burglar. It just means he's the only burglar who happened to be caught.
(END VIDEO CLIP)
LAKE: Now, Richard, again, no hard evidence, but he's saying he'll follow this trail wherever it leads him. We reached out to News Corp. They had no comment. In addition to meeting with lawyers, he is also talking through a mediator to the FBI and the Department of Justice.
He may -- not confirmed, but may be meeting with those officials as well. And he's going to have the announcement on Thursday about the details of exactly what course of action he's taking. We will, of course, be there and be talking to him again and bring you the details.
But clearly the plot thickens. Investors watching this closely, you know -- and we've talked about this -- the only reason that it has not had a bigger effect on News Corp's stock is because investors believed it was isolated to the U.K. If there is any hard evidence that that is not the case, as you said, it will be a game changer.
And I asked Lewis, listen, is this all about money? Do you want Murdoch out? What do your clients want? He said both his clients and he want the truth.
QUEST: All right. But is Mark Lewis the only one agitating on this? Is he a lone coeur de cri (sic) to try and get somebody to move? Or are there others swirling in the underground?
LAKE: It's interesting. Certainly, people reach out to him. He's the most, I would say, out front, the most visible person. He is cooperating with American lawyers here, working with him now Norman Siegel, who's at the American Civil Liberties Union for a long time. So we're going to have to see.
But, certainly, the biggest proponent and unlikely advisory for Rupert Murdoch, but he actually spoke quite kindly and sympathetically about Murdoch. It's the culture of News Corp in general that he has a problem with, Richard.
QUEST: Maggie Lake is in New York tonight.
Thank you, Maggie.
Jenny Harrison is in the CNN World Weather Center.
You know, we should never be surprised by those April showers, as I discovered today.
JENNY HARRISON, AMS METEOROLOGIST: No, you should not. You're quite right, yes, keep a brelly to hand at all times. It's a very unsettled picture, actually, Richard, because pretty much all of Europe, but in particular the U.K. -- look at that curl of clouds. That's the center of the low pressure.
And literally, that sway (inaudible) that you see coming off it, that is the front as it's sweeping through, very unsettled, some pretty high winds, and in fact, some very heavy rain to come. This is the last few hours, and you can see, as I see, the different bands of the weather, work its way now across the low countries into western and central France and thunderstorms in there as well.
We've had some reports already of some hail. And at the same time, because the temperature has dropped, or should I say perhaps not come back up yet, where you've got snow, particularly to the highlands in Scotland. But we've got sort of three systems right now.
We've got the one in the west. There's an other system in the sort of central southeast (inaudible). That's actually going to be swept up to more eastern regions as we head towards Thursday. And all the while, we have got more snow across in Scandinavia. But this system out across the west, now, as it heads in, it's going to bring with it some very strong winds.
And certainly as it goes through Wednesday, very heavy amounts of rain. These areas here in the sort of a darker red brown shading, and all along coastal areas, (inaudible) even northern areas of Spain. That is (inaudible) could be some very heavy amounts of rain. But those winds are strong as well, sweeping all of that into the warnings in place.
And then cold, which is why we've got the snow across in Scotland and continuing in Scandinavia. So these temperatures are below the average, and in fact, (inaudible) the curl of cold air there, well, that's pretty much in line with that heavy amount of rain.
Now just a reminder, the situation across here when it comes to the drought, it's pretty severe to extreme across much of Italy's central regions, of course, across Spain and Portugal but also central areas of the U.K. as well. So we really need to see this rain. And you can see here the areas at high risk.
So this, of course, becoming more critical as we get closer to the start of the Olympics in July, and in fact tomorrow is just 100 days to the start of the opening ceremony of the Olympics. But you can see here, all that rain coming in, you can see it very neatly on that area of low pressure.
And then, of course, still more snow as well across the line of the Alps. There's accumulation in the next 48 hours. The heaviest, certainly most widespread across Scandinavia. Delays at the airports on Wednesday, strong winds, and they say they're coming in pretty hefty and strong with those there's a system from the northwest.
You can see the winds sweeping across much of northern mainland Europe, and then all the way through (inaudible) as well through the eastern end of the Med, 18 the high in Athens on Wednesday, and then at 12 in London, 11 in Paris. Not too bad there, but feeling colder in that strong northerly wind, Richard.
QUEST: Jenny Harrison at the World Weather Center, Jenny, we thank you for that. Many thanks. We'll talk to you (inaudible).
5:29 or so and counting, why more and more top execs now have the courage to go, pack up when the clock says time's up.
(MUSIC PLAYING, "9 TO 5")
QUEST: A top exec says it's high time women went back to working 9:00 to 5:00, or at least 5:30, to be. (Inaudible) Dolly Parton's "9 to 5" raised the issue of working, and especially for women in offices in the 1980s.
Today, apparently, it seems, if you want to leave the office at 5:30, well, even at 6 o'clock, that carries a certain stigma in certain offices, particularly in certain professions -- finance, law, accounts, even the media. We all know it to be true, whatever the rules may say. If you're watching this from an office in Europe, it was probably time to go home several hours ago.
Well, the chief operating officer of Facebook, she is Sheryl Sandberg, has declared she shuns the long hours culture. She openly leaves work on time, and she says she's been doing so ever since she had children.
Ms. Sandberg said in an article, "I walk out of this office" -- this is the best bit -- she says, "I walk out of this office every day at 5:30. So I'm home for dinner with my kids at 6:00." And she concludes, "It's not until the last year or two that I'm brave enough to talk publicly about this."
(Inaudible) we've been tweeting of course, and we've got some of your tweets @richardquest on women, whether you ever have the guts or the bravado to leave at 5:30, and whether it is even acceptable for you to leave early. Well, (Inaudible), there's a think or two about working in the world of men and long hours.
She's Europe's Commissioner for Digital Agenda, and she told me a few months ago, she wants to see more women working in the tech sector. Today I asked her whether she approves of Sheryl Sandberg's proclamation of work- life balance. And pointing out, of course, it was after 5:30 where she was, I wanted to know whether she practices it herself.
(BEGIN VIDEO CLIP)
NEELIE KROES, EUROPEAN COMMISSIONER FOR DIGITAL AGENDA: Well, number one, there is only a goldfish waiting for me at home, so I'm not in a hurry to go home. But that is just a joke.
Normally spoken, in my time, it was quite difficult to take that time schedule. But nowadays, with the technology, it is quite easy for -- you can continue your job at home, and I imagine that Sheryl -- and I know her a bit -- that she will take all the time to give quality time to her children, but then she will continue working. I can't imagine that she stops really doing the job.
QUEST: Does digital technology help or to foster people to work from home, to have a better work-life balance, like Sheryl says, (inaudible) has done, or can it also be the very stick with which you can be beaten over the head, Commissioner, because you got a BlackBerry, you've got Skype, you've got all these other ways of continuing to work long into the evening?
KROES: Two remarks on your question. One is, again, it is talking about quality and it's talking about concentrating on the real hours (ph), so to speak. But having said that, we should also change our mindset that only when you are working like hell and making a lot of hours, that that is the way to success. It should be the output.
And I also say to women, please take also a bit of risk in following your own path, so to say. So it's not a matter of making a lot of hours. It is your performance.
KROES: And I learn more from my mistakes than from my successes. It doesn't matter if you make a mistake.
QUEST: Finally, Commissioner, Sheryl Sandberg's saying she goes home at 5:30. It raised eyebrows in our office, I'm sure in your office. You say you know Ms. Sandberg somewhat. Is she now a role model for what she is doing, do you think?
KROES: Absolutely a role model in general terms, for she has a career that is impressive, and she is breaking the glass ceiling, so to say. And she is indeed making a great effort out of her job. But having said that, it is a challenging issue.
(END VIDEO CLIP)
QUEST: That's the commissioner, talking to me earlier on the challenging issue, the Twitter (inaudible) @richardquest, where you can follow us and we unite and have a good chin wag. In a moment, a "Profitable Moment," after this break.
QUEST: Tonight's "Profitable Moment," the business of expropriating private property and nationalizing companies, that's usually the forte of authorization regimes, rarely do democratic governments, take over companies, not unless there's a state of war or emergency. There is anger and angst on both sides.
Argentina says Repsol hasn't invested as promised, and Repsol claims Kushner (ph) policies have prevented it from making proper profits. Now you and I know the merits are not for me to judge. But what I can say quite clearly is that this will be very damaging for Argentina in the eyes of global business, because like any government that discovers a new power, use it once and why not use it again?
Argentina does have the authority to do what it has done, and now the country must follow the rules of its own treaties and pay proper compensation to Repsol. Whether it's $10 billion or not, someone else will decide. But if they do not, I fear the investment clock in Argentina has just been set back many years. This is one we need to watch.
And that is 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. The news headlines are next.
QUEST: The headlines, the man admitting killing 77 people in a bomb - - in a bomb attack, has boasted of his actions in a statement to a Norwegian court. At the trial in Oslo, Anders Breivik says he would do it again. He says he represents the European resistance movement against multiculturalism, and that he's linked to others who share his beliefs.
Syrian activists accused troops of hammering targets in the country's north and south in violation of the U.N.-backed cease-fire. An opposition group says at least 53 people have been killed this Tuesday. This video online appears to show recent shelling in Homs. The government says armed terrorist groups are escalating their attacks.
Spain says Argentina is damaging the relationship between the two countries with its decision to nationalize a Spanish majority stake in an oil company. Repsol, which owns the majority stake, wants more than $10 billion compensation.
The U.S. markets are up after two days of losses. Quarterly results from Goldman Sachs and Coca-Cola beat expectations, lifting hopes that the rest of the earnings season will follow suit.
Those are the news stories that we are following for you here on CNN. Now "AMANPOUR," live from New York.