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QUEST MEANS BUSINESS
Greek Coalition Talks Fail, New Elections to be Called; New French President's Plane Hit by Lightning; Francois Hollande Sworn In as President of France; GDP Flat Across Europe; Greeks Unhappy About Going Back to Polls; Hollande and Merkel Square Off Over Austerity Versus Growth; Uncertainty in Europe; Facebook Raises Target Share Price; The Facebook Factor; Euro and Pound Down; SEC Investigating JPMorgan Chase's $2 Billion Trading Loss; Volcker Rule
Aired May 15, 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: Tonight, back to the polls. Greece fails to form a coalition.
A new course for France. Francois Hollande flies through storms to try and get the deal.
And scrutiny and mutiny at JPMorgan. The SEC investigates, shareholders agitate.
I'm Richard Quest, live from Paris where, yes, I mean business.
Good evening tonight from Paris, where the French people have a new president and where Europe has a new direction. We'll talk a great deal more about that during the course of this program.
Also, we start tonight with talks to form a new Greek government have failed in Greece once again, and it's left now for the country to go back to the ballot box. New elections are to be called after the latest attempt to form either a technocrat or some form of government of national unity failed to materialize.
The two top parties still have very different, diametrically opposed views on what will happen in Greece.
(BEGIN VIDEO CLIP)
ANTONIS SAMARAS, LEADER, NEW DEMOCRACY (through translator): I've done everything I could do to avoid a new election, a new democracy. I've agreed to be in a government with everyone else excluded as long as we remain in the European Union. But we've had to face a war, and now the elections are unavoidable regardless of the choice of the Greek people.
ALEXIS TSIPRAS, LEADER, SYRIZA (through translator): Fellow Greeks, we decided with responsibility not to fail the hopes of the Greek people and not to become untrustworthy.
The parties of the bailout conditions, they didn't ask us to consent in government, they asked us to leave the country without any hope and put our signature on the measure of the austerity. We didn't do them the favor. We resisted as much as we could.
(END VIDEO CLIP)
QUEST: Now that, of course, is the Greek situation, and what's happening in Greece is having widespread ramifications across the whole of the European Union and eurozone and financial markets. Here in France, they are watching it closely, but today, it was a case of Mother Nature who gave us what some might see as an inauspicious start to a new horizon.
The new French president, Francois Hollande, was flying to meet Angela Merkel when his plane was hit by lightning and forced to turn around. Mr. Hollande subsequently boarded another plane. He is now in Berlin, and he's meeting the German chancellor for the first time.
What is interesting about this meeting is they're going to be discussing Europe's fiscal compact, which Mr. Hollande has promised to revisit. Mrs. Merkel says the deal is non-negotiable.
The trip to Berlin came hours after Francois Hollande was inaugurated as the president. His predecessor, Nicolas Sarkozy, met him on the steps. Mr. Hollande was awarded the title of Grand Master of the Legion of Honor by the Legion's head.
After all the pomp and ceremony, it was into politics. He has appointed Jean-Marc Ayrault -- I've mispronounced that, I'm sure -- as his prime minister, and the first Socialist president in 17 years was keen to highlight his left-wing credentials.
(BEGIN VIDEO CLIP)
FRANCOIS HOLLANDE, PRESIDENT OF FRANCE: I today feel the weight and constraints our country faces: a massive debt, weak growth, high unemployment, and reduced competitiveness. Europe is struggling to get out of the crisis, but I affirm here, there is nothing which is inscribed in fate. We are united by clear directions and guidelines, in which fully mobilized forces and the challenges of France.
(END VIDEO CLIP)
QUEST: Now, Monsieur Hollande's election victory and now taking office, just before he laid out his plans for growth, this morning's GDP numbers showed just how much Germany is actually very much in the driving seat and keep Europe from slipping into recession.
The GDP numbers were quite dramatic. Germany's economy grew a half of one percent, more than we were expecting. It means Germany avoided entering recession this quarter. There was no quarterly growth at all -- stagnant -- in France. Over 12 months, the economy managed to add a lean three-tenths of one percent.
And things were even worse elsewhere. Italy's economy shrank eight- tenths of a percent, a worse reading than expected, and Greece's economy shrank 6.2 percent on an annual basis. It did even worse in the previous quarter.
OK. Now, we are going to put this into perspective for you. Let's start with Elinda Labropoulou in Athens for us tonight. So, we've got two things. We've got terrible numbers on the economy, and we know now, Elinda, that there's going to be another election probably in June. What are the Greek people making of this tonight?
ELINDA LABROPOULOU, CNN INTERNATIONAL CORRESPONDENT: Well, certainly it's not very good news for most people. Most people wanted to see a government formed. They've realized that this prolonged period of instability is not helping, either, any form of growth in the economy. The numbers that you've just mentioned are showing that Greece continues down this path of recession.
And there's a lot of concern as to what comes next. The results show that we're looking at another month of instability at the very least. And there's also concern that even if another election is held, that again, there is no clear indication that a government will be formed.
The main parties that did well in the last election show a very polarized result. If in mid-June we end up in the same situation, then it remains very unclear where this would lead Greece, and this is what most people are talking about right now in the streets of Athens.
QUEST: Elinda Labropoulou, who is in Athens for us tonight. Christian Malard is here with me.
CHRISTIAN MALARD, SENIOR FOREIGN ANALYST, FRANCE 3 TV: Good evening, Richard.
QUEST: Good evening, good to have you. The Greek situation that we've just been hearing about from Elinda, new elections. Now, here in France, where we've just seen the election of Francois Hollande -- the inauguration, and he's in Berlin tonight. We'll talk more about that later. How worrying is Greece going to be for the policies of implementing it here.
MALARD: Well, Francois Hollande has a lot of preoccupations to deal with in France. Reduce the rate of unemployment for it is 10 percent. Reduce the public debt. At the same time, there is a promise that, normally by 2003, we should reduce budget deficit and reach the target of 3 percent. But Brussels said today it is going to be 4.2.
QUEST: So, we'll -- we'll talk in a second about -- or later in the program. He's in Germany tonight. What's the one message he's got to take to -- he's going to extend there?
MALARD: It's a message that, until now, Madame Merkel said she would not except. She wants austerity. Austerity. And Monsieur Hollande says we want growth versus austerity. But Madame Merkel is going to tell Monsieur Hollande tonight, how are we going to make?
You want to spend so much spending in France, concerning you want to create 60,000 more jobs. You want to add 5,000 more policemen. You want to create more teachers. How are you going to pay? You are going to have more spending, more public spending.
QUEST: So, is a battle going to be joined here, do you think?
MALARD: Well, it's a big battle starting, but finally, as we badly need to have, this Franco-German axis to work for the eurozone, definitely I'm convinced that at the end of the day, in the communique, growth will be mentioned, austerity will be mentioned, but how we can meet both of them joined?
QUEST: We'll talk more about it in about 20 minutes from now. Christian, good to have you.
Let's talk, now, on the economic front and join Christian Schulz at -- the senior economist at Berenberg Bank. Christian joins me from London.
I want to go back to those economic numbers that we put into the picture. Greece, 6.2 percent down year on year. France stagnant. Germany just about is the only engine of growth. In this debate that we are talking about, surely Mrs. Merkel, does she -- does she have the strong hand or the weaker hand, do you think?
CHRISTIAN SCHULZ, SENIOR ECONOMIST, BERENBERG BANK: Well, one thing that the German figures demonstrate is the benefits of austerity and structural reforms. It's not just austerity. Germany had its own structural reforms in 2004 under Socialist government, under Chancellor Schroder.
And these now mean that Germany's very competitive, has the fiscal balance and the control and is growing at a very high trend rate. It's fluctuating around that, obviously, but this quarter, the first quarter, proved how strongly you can grow if you go through the necessary austerity and structural reforms.
QUEST: But you can't, surely, have a workable single market, or a workable monetary union when you've got so many countries stagnant. And all right, the largest economy actually being the only engine of growth and growing is bad for the biz. It makes it unworkable.
SCHULZ: Well, all countries are in different stages of the adjustment process. As I said, Germany had its adjustment in 2004. There are some countries in Eastern Europe -- Estonia, for instance -- which had their adjustment in 2007.
Some countries like Portugal, Spain, Greece, Ireland, started about 2010. And some countries are only starting now, and some countries haven't even started yet. Italy has started now, France hasn't even started yet. So, it's obvious that not all countries can grow at the same speed. But all countries can enjoy the same growth as Germany if they go through the same adjustment process.
QUEST: How long will the markets give Francois Hollande on his polices, do you think, before they start to get seriously nervous at what could be an explosion in the deficit if he's got his songs wrong.
SCHULZ: Well, the markets have given him quite the benefit of the doubt so far. The markets have been rather sanguine about France.
But the rating agencies might actually be the first to react if the programs he will put into place after the parliamentary elections are seen by the rating agencies not to fulfill the target to balance the budget by 2017, then the rating agencies might change their assessment of Greece -- of France, and they might lose more Triple-A ratings or go down even further, and markets would certainly not appreciate that.
QUEST: OK, Christian. I need you to pull the strands together on, I think you would agree with me, these are exceptionally complex times. Just let's think about it today.
We've got Greece going for another vote with the euro at its core. We've got Germany and France not necessarily agreeing. We've got such vast differences in economic growth. These are times that are dangerous.
SCHULZ: Absolutely. If politics and markets collide, then there is huge uncertainty. It's very difficult for the markets to interpret what exactly the different leaders in Greece actually want, for France we don't really know what exactly France's position or the new president's position on Greece, for instance, is.
We are really looking forward to this meeting between Hollande and Mrs. Merkel in Berlin and to see what common position they may find. So far, he's got the benefit of the doubt, but Greece at the moment certainly doesn't have that benefit.
QUEST: Christian, we thank you for that. Christian Schulz joining us, some good, honest, robust views as you're hearing tonight on this program, whether it's Christian Malard or Christian Schulz or Elinda in Athens, bringing you the voices and the news that's really affecting the financial world today.
When we come back, we delve deep into the financial world, right into the bowels, and there was something very smelly at JPMorgan Chase. And now, of course, it's time to get the drains off. We'll have that story after the break. QUEST MEANS BUSINESS. Good evening.
QUEST: Facebook is the big gorilla of the markets this week. And you know what they say: where does the gorilla sit? Wherever it wants to. Well, Facebook is raising its target share price again, a sign that investors, at least, can't wait to pick up a slice of the social networking.
In a filing with the SEC, the Securities and Exchange Commission, the Facebook board announced it expects the price to raise now at $34 to $38 each in its IPO. It's a sharp jump from $28 to $35 range set earlier this month.
On an implied basis over the full rack of the shares in the company, not the shares that'll IPO, it values a bit more than $100 billion. The IPO takes place on Friday. There are rumors, of course, that that price could rise even harder. But just as much, perhaps, it could actually fall off the top as well.
As Facebook gears up for what is likely to be the largest IPO in history, spare a thought for those who tried and failed to conquer the world of social media. Behind Facebook is littered the remnants and wreckage of those who came first and are now no longer with us. Dan Simon now reports on an industry that has rapidly become a one-horse race.
DAN SIMON, CNN SILICON VALLEY CORRESPONDENT (voice-over): It may be the biggest, but Facebook wasn't the first social network.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you, Mark.
SIMON: To understand its rise, you also have to look at the missed opportunities, the blunders from the competition.
GREG GRETSCH, MANAGING DIRECTOR, SIGMA: Facebook from the very beginning has focused like a laser on the quality of their product, the quality of the user experience.
SIMON: Something that wasn't done by rival sites like MySpace and Friendster, according to industry insiders like Greg Gretsch.
GRETSCH: Friendster's problem was performance. When their usage spiked, they had -- their page load times went from almost instantaneous to taking 30, 40 seconds. Users wouldn't put up with that.
SIMON: The fall of MySpace was even more pronounced. Rupert Murdoch bought the site in 2005 for $580 million. Last year, it sold for $35 million.
DAVID KIRKPATRICK, AUTHOR, "THE FACEBOOK EFFECT": Those two companies both thought of themselves more as sort of fashion and truly social businesses, whereas Facebook, through Zuckerberg, thought of itself as a company using technology to make the world more social.
He didn't think of it -- and he still doesn't think of it to this day -- as a quote-unquote "social network."
MARK ZUCKERBERG, FOUNDER, FACEBOOK: Sweet. Across what servers?
SIMON: As the competition floundered, Zuckerberg assembled a world- class team of engineers, focusing entirely on the product, constantly rolling out new features.
ZUCKERBERG: We're making it possible to build a completely new class of apps.
SIMON: And allowing other innovative companies to build on top of its platform. Facebook enabled the rise of Zynga, which made video games social. Zynga mushroomed into a $5 billion company.
ZUCKERBERG: More than a dozen developers have worked with us to build social music apps.
SIMON: The Facebook tentacles are long. Virtually every company and every new digital service considers its Facebook strategy.
KIRKPATRICK: It has a capacity to bring sort of this social interaction that we have with our friends throughout everything we do in life. And the potential of that is vast.
SIMON: But challenges lurk ahead. Facebook has lagged in mobile, part of the reason it shelled out $1 billion for Instagram. It also needs to keep growing its advertising and its user base while having to continually fend off competitors.
GRETSCH: What Mark Zuckerberg worries about is not the Googles of the world. What he worries about is the upstart. The three guys in a garage that figure out the new social network.
SIMON (on camera): With seemingly unlimited money and talent, Facebook appears to have few obstacles. But in the world of technology, it's dangerous to think that way. Just ask the folks at BlackBerry and Yahoo.
Dan Simon, CNN, Menlo Park, California.
QUEST: And don't forget the Facebook IPO is this Friday, the final price on Thursday night. At QUEST MEANS BUSINESS, we will have a special program on Friday looking at the IPO, the price, the reaction, whether you bought, whether you should have bought, and whether you might think about buying.
Talking about buying, let's do the Currency Conundrum. One for francophiles out there tonight. When was the first French coin bearing the name "franc" issued? Was it in 1360? Was it in 1575? Was it in 1795?
While you think about that, these are the rates. The euro's down against the dollar, the pound is a hair down ahead of tomorrow's Bank of England inflation report, and the euro crisis concerns are pushing the pound up against the euro. It is a real mishmash. Those are the rates, now here's the break.
QUEST: Within the past hour, the White House in Washington has confirmed that the Securities and Exchange Commission is investigating JPMorgan Chase's $2 billion bungle in its portfolio.
The chief executive, Jamie Dimon, has faced shareholders, who've seen the shares fall 14 percent ever since the bank announced that its propriety trading hedge safety net had actually cost the bank $2 billion.
Some staff have already gone. More executives are expected to go. Shareholders are voting on the pay package that would hand out many millions of dollars to people like Jamie Dimon, the chief executive. The meeting is taking place in Tampa in Florida, where Poppy Harlow is.
And Poppy, I can imagine that the shareholders are angry. The question is, are they angry enough to actually do something?
POPPY HARLOW, CNN CORRESPONDENT: Richard, you know what surprised me so much at this meeting is the lack of shareholder anger. There were about ten questions when they opened the floor up. Jamie Dimon began the meeting addressing that $2 billion trading blunder, taking full, full responsibility for it, saying they're changing policies, et cetera.
However, you didn't get a sense of shareholder anger. Now, this was before the White House confirmed that SEC investigation into JPMorgan Chase, but still, you would have expected more fireworks.
I do want to play you part of the audio from what Jamie Dimon had to say at the outset of the meeting. No cameras were allowed inside.
But he talked about the issue of regulation, specifically the Volcker Rule, which is being written, which will say that banks cannot make directional trades in the markets simply to profit themselves. Take a listen to what Jamie Dimon, who has previously been a critic of that rule, what he had to say on that front.
(BEGIN AUDIO CLIP)
JAMIE DIMON, CEO, JPMORGAN: We all want better, smarter, and stronger regulation that is based on fact analysis. Second, as I wrote in my chairman's letter, and I quote, "We agree with the intent of the Volcker Rule if that intent is to eliminate pure proprietary trade and to ensure market making is -- done in a way that doesn't jeopardize the financial institution or its clients."
(END AUDIO CLIP)
HARLOW: So, here's how you should read that, Richard. "We agree with the intent of the Volcker Rule if it does not make us less competitive against the other big banks." That's his fear, that internationally it would make JPMorgan less competitive.
We had a chance to talk to a lot of shareholders here as they came out of the meeting. Some spoke publicly in support of Dimon. There was some applause in support of Dimon. One of the people that was in the meeting, though, Alan Fisher, took issue with JPMorgan practices at this point in time. Take a listen.
(BEGIN VIDEO CLIP)
ALAN FISHER, CALIFORNIA RETIRMENT COALITION: I think -- I don't know, I hope this is not a tip of the iceberg in what's to come, but I think it really highlights the need for real regulation, and that you can't have the fox guarding the hen house. You need to have another layer of watchfulness.
And I think there was a lot of cynicism in him lobbying to be freer to do these things, and that's been highlighted by this unfortunate loss.
(END VIDEO CLIP)
HARLOW: Jamie Dimon pointed out in the meeting, he said, look, there are about 7,000 lobbyists in Washington. He said only about 30 are when it comes to the financial sector. So, he downplayed that.
I will tell you two key things. Shareholders voted at a 9 to 1 ratio, Richard, to approve Jamie Dimon's $23 million pay package. Also, the vote to separate the chairman and CEO roles, which Jamie holds both of, was denied. Only 40 percent of the vote went to that, so they did not get a majority that would separate the chairman and CEO roles. Richard?
QUEST: Poppy Harlow in Tampa in Florida with that part of the story. Of course, for those looking to implement the Volcker Rule, the events that happened in the bungled deal was grist to the mill.
One of those pushing for much tougher banking regulation is US senator Jeff Merkley. I asked the senator, who joined me from Washington a short time ago, when he heard about the JPMorgan loss, he must have almost just simply said, "I told you so."
SEN. JEFF MERKLEY (D), OREGON: This type of directed investment, for it to blow up in this fashion, goes right to the point of establishing the Volcker firewall between traditional banking and hedge fund-style investing.
QUEST: Except, the only person or people that lose money in this case are JPMorgan Chase investors. If they choose to have a badly-run bank, that's up to them. Surely the other reforms put in place would have protected taxpayers money.
MERKLEY: Well, I tell you, not really, and here's why. When you have a bank that is taking access to publicly insured deposits and low-costs loans from the Fed, and those subsidies are to be directed towards making loans to families and businesses, when the company starts redirecting those into high-risk investments, they are misusing the public funds.
If they want to be a hedge fund, there's no problem. Become a hedge fund. But don't take public subsidies to make loans and then divert those funds into hedge fund-style activities. That's the first point.
The second is, when a bank blows up from its hedge fund-style investing, then it does enormous damage to the credit markets across this country. It's much better to have stand-alone hedge funds. Let them blow up by themselves, if you will.
Kind of an analogy is if you deep-fry a turkey for Thanksgiving, do it on the patio where, if it catches fire, nothing burns down. You don't deep-fry it in your living room where it's an inappropriate place.
QUEST: If this Volcker Rule, which has already been watered down to portfolio rather than individual investment, how do you now intend to move forward so that you ratchet back some of the losses that you've seen in the bill and still manage to get that which you want?
MERKLEY: Yes. I'll tell you, the bill is very clear. It only allows specific hedging. If you have a certain energy stake and you need to hedge it based on the price of oil, that's allowed. But nowhere does the bill authorize unspecific hedging or portfolio hedging. This is a loophole that Wall Street spent two years lobbying for and succeeded in getting in the draft rules.
And my message, and I think Senator Levin's message to the regulators is, do your job, implement the bill as written. Close these loopholes that you've opened up under pressure from Wall Street so we have a true firewall between banking, to provide credit to families and businesses, and hedge fund investing.
QUEST: All right. So, how are you going to ensure that the regulators -- because let's face it, the JPMorgan Chase debacle will be yesterday's newspaper in two days' time, and you're going to have a battle once again against the weight of lobbyist money trying to undermine you.
MERKLEY: Your point's well taken. So, this is the challenge, is to create enough public understanding that our collective good is based on creating a banking system that will provide a foundation for the economy to expand over the next several decades.
And that if we simply allow ourselves to go back to this enormous systemic risk, which will, if it doesn't take us down tomorrow, it might take us down next year or two years from now, is not in the national interest.
And again, nothing wrong with hedge funds. It should just be done under a setting where truly only the investors melt down and not the rest of the economy.
QUEST: More QUEST MEANS BUSINESS from Paris in a moment.
QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS live from Paris in a moment. This is CNN, and on this network, the news always comes first.
(BEGIN VIDEO CLIP)
QUEST (voice-over): Greece's president says he will call for new elections to take place in June. Greek political leaders walked out of the presidential palace in Athens earlier after the collapse of their last- ditch talks to form a government. The country's political parties are divided over the deep budget cuts Europe requires in exchange for billions of dollars in handouts.
The White House has confirmed the SEC is investigating JPMorgan's $2 billion trading loss. The chairman and chief executive, Jamie Dimon, apologized to shareholders, calling the loss a terrible mistake. Shareholders approved his $23 million compensation package.
Rebekah Brooks says she's baffled and angered by British prosecutors, who have decided to charge her and five other people. The former News International chief is accused of trying to hide evidence from police investigating phone hacking by British newspapers. Brooks' husband, who is also charged, says they are being made into scapegoats.
UNIDENTIFIED MALE: (Speaking foreign language)
QUEST (voice-over): Chaotic moments in a town near Hama in Syria after a blasts struck a U.N. convoy. This video posted online appears to show the attack and the panic that ensued. The U.N. says no personnel or members of its observer mission were hurt. Three U.N. vehicles were badly damaged.
Francois Hollande is meeting the German chancellor Angela Merkel in Berlin at this hour. The French and German leaders will be discussing Europe's fiscal compact. It's the first time the new French president has met Ms. Merkel. Mr. Hollande was inaugurated earlier today in Paris.
QUEST: Day one of the Hollande presidency is a day that he won't forget and the rest of us will remember as well, not only because of the shift in political power from right to left, but the mind-boggling rain that took place, the aircraft that was hit by lightning on its flight to Berlin and a meeting tonight with the German chancellor that could change the direction of European politics.
We are expecting to hear from Ms. Merkel and Francois Hollande and, in fact, I think you can see the picture, they're getting ready for the first press conference of the two. They're doing the testing and when they get to it, we will bring it to you live.
Let's talk about this with Christian Malard from France 3, who is with me. Good evening.
CHRISTIAN MALARD, SENIOR FOREIGN ANALYST, FRANCE 3 TV: Great, Richard.
QUEST: They have a saying, I can't remember what it is in French, but it's something like if it rains on the inauguration, the rain will be good or something, meaning the rain. It's something like that.
MALARD: It's probably what Francois Hollande is wishing for his presidency, definitely. But tonight, as you alluded to it very well, France and Germany definitely will have to be on the same wavelengths to try to solve the problem, the economic problem of the Eurozone. We have a few French expressions.
If Mr. Hollande wants to agree, was partly with Madame Merkel, you would have to put water in his wine. And Madame Merkel would have to put water in her beer. No doubt after that, they'd have to find a compromise. The axis, Franco-German axis has to move forward. It's --
QUEST: Hang on. Hang on. They've got to find a compromise.
QUEST: Can they do it?
MALARD: Well, it will be very difficult.
QUEST: But they have to.
MALARD: They have to. So they will communicate probably well, likely to have, on the one hand, Madame Merkel wants to leave Francois Hollande very pleased because it will be mentioned that we have a kind of beginning of tactful growth (ph), but at the same time, she will mention that France will probably make too much public spendings and how it would be difficult to reduce the deficit.
And this will be Hollande's problem in the very coming future.
QUEST: We are told that France didn't really vote for Hollande, they voted against Sarkozy.
MALARD: Well, it's true --
QUEST: It's not true.
MALARD: It has been a vote by default. This right action (ph) in France has been definitely -- everybody acknowledged that, a referendum on the personality, the style of Sarkozy, more than for, let's say, big hope with Hollande.
QUEST: But you are -- you know the Hollande people and the advisers, you covered Hollande for his many years. And they are now the standard bearers for what is happening in Europe towards growth. But do they also worry about Greece knocking them off track?
MALARD: Yes, probably, definitely, Hollande's -- in Hollande's mind, definitely you have this preoccupation to really put Europe back on the -- and France back on the track, because we are in a very bad economic shape. Germany is in a good shape. And as we have this Franco-German axis, it has to work. It has to work.
QUEST: So next is Chicago.
MALARD: Yes. It will be --
QUEST: You up there?
MALARD: Yes, I will be there.
QUEST: You're going to Chicago?
MALARD: We'll be going to Chicago to talk about the NATO problems and it will be on Obama -- an Obama-Hollande's problem.
QUEST: Obama and Hollande politically are closer, though, aren't they? Let's face it. Left of center.
MALARD: Yes, definitely.
QUEST: Social democrats.
MALARD: Social democrats. But --
MALARD: -- but the problem will be the withdrawal of the French troops from Afghanistan. Hollande wants to withdraw the whole French troop (sic) by the end of the year. But it's NATO. NATO's big bus (ph) is United States and only one country cannot decide with the finger and say we quit. We have to be also compromise with Obama. And this will be what will be at stake in Chicago.
QUEST: Good to see you.
MALARD: Thanks, Richard.
QUEST: (Inaudible) in Chicago. Many thanks, Mr. Malard, who always talks good common sense when it comes to politics, economics and put the whole picture together for us. When we come back in just a moment -- we're leaving off the bell with us here (ph) -- when we come back in a moment it'll be those pesky millennials. We're be talking about them, see what they want (inaudible).
QUEST: The answer to our "Currency Conundrum," when was the first French coin bearing the name "franc" issued -- or "franc"? The answer was A, it was 1360, minted to pay a massive ransom to the English for the release of King John II. You can't make this up. The word "franc" means free, open or straightforward in French.
When it comes to our millennials, free, open or straightforward can certainly be used to description them, especially their ambition and their determination to get to the top. Despite their tender age, we've already seen them in some very high places.
Facebook's chief executive Mark Zuckerberg turned 28 on Monday. Later this week, the company he founded, true millennial, will go public with a valuation likely to top $100 billion.
Groupon founder and chief executive Andrew Mason is just 31 years old. Their shares are up 12 percent in New York after the company narrowed its losses.
And delivering a message heard loud and clear, Jon Favreau, Barack Obama's speechwriter -- I could weep at this bit -- is only 30 years old.
Now our millennial, Joe Braidwood, hasn't reached those dizzying heights yet, but he's doing pretty well for somebody who is just 27. He's already the chief marketing officer at SwiftKey. As you're about to see and discover, putting drive and ambition from day one has put him where he is tonight, in our "Millennials."
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: From a young age, they've been told they're special. They can achieve whatever they set their mind to. Now they're taking over the workforce and also gunning for that corner office. They are the millennials, and this is their earlier years.
Kingston-upon-Thames, a quiet, quaint suburban London town, perfect for growing talent. It's here we find the childhood home of our millennial, Joe Braidwood.
JOE BRAIDWOOD, CMO, SWIFTKEY: I was born in May 1985 in St. Thomas' Hospital in central London. It's just across from Houses of Parliament on the River Thames. And then lived in Cathon (ph) until I was about 8 years old before moving to our family home in Kingston, which is where my parents still live.
UNIDENTIFIED MALE: Inside, reminiscing about the past is Joe's 23- year-old sister, Ruth, and his dad, Steve.
STEVE BRAIDWOOD, JOE'S DAD: This is another interesting one. This is where he wanted me to help him make a disc.
UNIDENTIFIED MALE: They're also looking through some of Joe's home videos.
S. BRAIDWOOD: So this is the one that Joe did for Australia. You remember?
J. BRAIDWOOD: (Inaudible) for me and my mum now so I guess it's my turn now. Well, what do you want to know?
UNIDENTIFIED MALE: Footage Steve shot not so long ago.
S. BRAIDWOOD: When he was in his third year or second year of school, he was on Easter break, and he had some spare time, and he decided to fill that spare time by making a video for his cousins in Australia.
UNIDENTIFIED MALE: Today, these videos help to paint a picture of what defines this millennial, confident and driven.
J. BRAIDWOOD: We get quite a lot of homework at the school I'm at at the moment. But I like it.
S. BRAIDWOOD: Joe, when he was a toddler, was very precocious. You know, he would talk to adults just as easily as talking to other kids. He didn't see any boundaries at all. So he was unusual compared to, say, my generation.
UNIDENTIFIED MALE: Looking at the home videos, Joe's entrepreneurial spirit is also visible from an early age.
S. BRAIDWOOD: Do you remember Joe doing magic?
RUTH BRAIDWOOD, JOE'S SISTER: Vaguely.
UNIDENTIFIED MALE: At 7 years old, he put on his own magic shows, or as he called it, "Joker Joe's Magic." And he thrived on it, making money with each performance.
S. BRAIDWOOD: I think like all parents we think Joe's special. But at the same time, I think he's very much a product of his time. We brought our kids up very differently to the way we were brought up.
We were brought up, you know, to know our places as children and not to want to do what adults do, which was very different when we were bringing Joe up. You know, we encouraged him to go for things that he wanted.
UNIDENTIFIED MALE: This parental attitude gave Joe free rein to try new things, from tap dancing to building complex Macano (ph) cars.
J. BRAIDWOOD: I made this car. And look how it works.
UNIDENTIFIED MALE: To speaking his mind.
J. BRAIDWOOD: Most of my friends are still at school, so I'm quite bored. I thought, I'll make a video.
UNIDENTIFIED MALE: Throughout it all, his father has always been impressed by his son's dedication, ambition and his lack of inhibition.
S. BRAIDWOOD: Joe did a very good essay and it got very good grade from school and I was pleased. I read his essay and he all these quotes from Noam Chomsky, who from my generation was a kind of revolutionary figure from the hippie era. And I said, "Where did you get all these quotes from?" Very relevant to his essay, and Joe said, "Oh, I emailed him."
J. BRAIDWOOD: If we could become more of a sort of a platform (inaudible).
UNIDENTIFIED MALE: Today at the ripe age of 27, Joe is proud of his fearlessness.
J. BRAIDWOOD: Once I wrote to British Airways when I was about 5 and said I wanted to be a pilot, please. And they replied, saying that I should try to get some A levels first.
UNIDENTIFIED MALE: But he also knows his confidence could be misinterpreted.
J. BRAIDWOOD: I don't think I really understood very much about how people view the way that you behave when I was young. I was quite brattish, I think. But slowly but surely in my teens I figured that out.
UNIDENTIFIED MALE: Now as a successful chief marketing officer, Joe is learning that he'll have plenty more to figure out. But like any proud father, this one believes he'll do just fine.
S. BRAIDWOOD: I think Joe will be successful in future, but that success might not be as linear as we think. You know, he's changed direction a few times, and I think he will define success in his own terms.
J. BRAIDWOOD: I think I've always cared a great deal about the things I do, and have tried to do as best as I can in everything. Does that make me an overachiever? I guess it's for other people to say.
That's it, then, really.
UNIDENTIFIED MALE: Next week on "The Millennials," (Inaudible) Lloyd travels to Cartagena, Colombia, for a chance to walk away with the Young Entrepreneur of the Year Award. Will he do it? Find out on "The Millennials."
(END VIDEO CLIP)
QUEST: Ah, those millennial years, I remember them well. I never, ever forget. Somebody will remind me, such as sending me this photograph. The year was 1984. I was 22. It was Vanderbilt University in Nashville, rites of spring, and I have no idea what was growing in my hair. We'll have the weather after the break.
QUEST: Now the hallmark of the day has been this extraordinary weather here in Paris, bands of rain just came in, drenched us and then moved off again. And as you can see from the clouds now behind me, right the way down to the Arc de Triomphe.
Jennifer Delgado's at the World Weather Center.
Jennifer, what on Earth has been happening in France with this weather system? And of course Hollande's plane and lightning?
JENNIFER DELGADO, AMS METEOROLOGIST: That's right. You know, and I find it fascinating that you say this is extraordinary, because you're used to this type of weather being in England with the rain coming around as well as the wind and the lightning. And on the radar, Richard's right. They're in a mix of sun and clouds through parts of France.
As I show you on a graphic right here, we did have some storms go through. And of course, this disrupted the French president's plane ride, of course, with the lightning striking they had to abandon that and go back, because this is something new, don't want to experience, obviously. And this usually happens to a plane, a commercial plane on average one time of year.
But certainly, when you're dealing with a lightning strike, of course it can cause damage to the aircraft. But it can also cause momentary blindness for crew members and also cause interference with the navigational system. And ultimately want you don't want to hear about is an engine being shut down by a lightning strike.
So certainly this is something that any traveler will never get used to. And of course, any pilot. So this is not unheard of by any means. Now as I'm showing you on the satellite right now, we have some clouds around.
And as Richard said, there was some bad weather around. But it's settling down. We are (inaudible) you can see that little pressure system weakening. But the area down towards southeastern parts of Europe, including Macedonia as well as into Greece and Turkey, for Rumania, this is where the bad weather is going to be as we go through today, as well as through Thursday, cooler temperatures are going to be in place anywhere you're seeing in blue.
But for those storms I was telling you about, we're still going to look at the potential for those to bring (inaudible) some hail as well as gusty winds and the possibility of more lightning. Temperature for your Tuesday, we're expecting a high of 14 degrees in Paris, 30 degrees in Madrid. And then by Thursday, we'll start to see those temperatures rebounding a bit. For Rome, 22 and 14 for a high in Vienna.
Richard, do you have to fly back to London tonight, tomorrow?
QUEST: No, no, no, thanks to the euro star hazard (ph) has some problems but doesn't quite have problems of weather, well, not that I can think of just off the top. Jennifer, many -- yet. Many thanks indeed for that. Just look at that sky tonight.
QUEST: In Paris, it is absolutely beautiful. Wonderful sky tonight, but the weather is cold. Jennifer, we thank you for that. When we come back in just a moment on QUEST MEANS BUSINESS, it's time for a "Profitable Moment" in dangerous times. Good evening.
QUEST: Tonight's "Profitable Moment" on a glorious sunny evening, as the sun shines here in Paris, the first proper sun that we've seen during the course of the day that saw a new president elected and inaugurated into France, who will now be the standard bearer for a left-wing, a socialist view that will move across Europe.
Tonight we are waiting for the first press conference between Francois Hollande and Angela Merkel, a new direction in Europe as indeed Christian Malard explained to me earlier, socialism and Hollande have arrived.
(BEGIN VIDEO CLIP)
FRANCOIS HOLLANDE, FRENCH PRESIDENT (THROUGH TRANSLATOR): Confidence is placed on justice and choices, justice and the very conception of the creation of wealth. It is time to put production before speculation, investment before satisfaction of the present, and something, a sustainable development before the immediate.
(END VIDEO CLIP)
QUEST: Christian Malard there on what he expects in the months ahead. And now as we await for the press conference, we'll bring it to you live. But for the moment, that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in Paris. Whatever you're up to in the hours ahead, I hope it's profitable. The news is next.
QUEST: Greece's president says he will call a new election for June. Greek political leaders walked out of the presidential palace in Athens earlier after the collapse of their last-ditch talks to form a government. The country's political parties are divided over the deep budget cuts Europe requires in exchange for billions of dollars.
The White House has confirmed the SEC is investigating JPMorgan's $2 billion trading loss. The chairman and chief exec, Jamie Dimon, apologized to shareholders, calling the loss a terrible mistake. Shareholders approved his $23 million compensation package.
Rebekah Brooks says she's baffled and angered by British prosecutors, who have decided to charge her and five other people. The former News International chief is accused of trying to hide evidence from police investigating phone hacking by the British newspaper.
Francois Hollande is meeting German Chancellor Angela Merkel in Berlin. The French and German leaders will be discussing Europe's fiscal compact. It's the first time the new president has met Ms. Merkel. We are awaiting a press conference that's expected to happen any time now.
And that's the way the news headlines are looking. This is CNN, the world's news leader.