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QUEST MEANS BUSINESS
Eurozone Woes; UK Government Discusses Contingency Plans; Euro Continues Decline; Spanish Banks Drag IBEX Down; Muted Markets; US Markets More Upbeat; Facebook Shares Fall Below $30; Ben & Jerry's Join Our Core; Food for Thought; Talent Shortage; Global Skills Gap
Aired May 29, 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: A case of high unemployment, low talent, and worries about the eurozone. That's the damning verdict of business tonight.
Start up your own start-up. A spoonful of advice from Jerry of Ben & Jerry's.
And a cold economic climate in the US. Consumers are freezing their spending.
I'm Richard Quest. I mean business.
Good evening. We start tonight with an update on the woes of the eurozone. Spain is on the brink, and Europe needs to move fast because the future of the euro is at stake. Spain's deputy prime minister told Reuters the EU itself is at risk if the single currency collapses.
Borrowing costs are rising. Investors are deserting Spain's ailing banks. The latest grim economic numbers add to a sense of crisis tonight. And if you join me in the library, you'll see exactly the sort of problems that are being experienced.
It doesn't matter which aspect we look at. We begin with Spain itself, where demand has fallen sharply. Retail sales down nearly 10 percent in April, that was a record fall. It's hardly surprising, bearing in mind the turmoil that Spanish banks are going through at the moment.
The Central Bank says the recession will deepen in the second quarter of this year, and the most worrying number, perhaps, of all, almost a quarter of Spaniards are unemployed, and that number rises to 40 to 45 percent when we talk about the under 25s.
In the UK, the government is preparing in all extremities contingency plans for what might happen. Mervyn King, governor of the Bank of England, Lord Turner, the regulator, and the PM, David Cameron, discussed ways to protect Britain, particular against Spanish bank exposure.
The main exposure is to the big national banks, which are better capitalized than the cajas, or the regional banks. But even so, the UK, as we know from David Cameron and what Mervyn King said last week is preparing for what might come.
If we look at the euro and you trace the euro, how it's fallen -- there are really two views about this. One says there's today that it's just below $1.25 to the US dollar, which is significant in itself, it's a two-year low against the greenback. The other view says, well, actually, if you take it from a long period of time, it's really not that significantly off over a 12-month period.
Spanish banks were amongst the worst performers today on the markets, not surprisingly. It dragged the benchmark IBEX index down more than 2 percent. Bankia added a further 16 percent fall to 13 percent on Monday. Spain -- Santander, Spain's biggest bank, 2 percent off. Spanish energy company Repsol down nearly 6 percent after announcing plans to cut dividends and to sell dividends.
You get an idea, now, of the scenario that the markets are facing at the start of a -- or another week where it seems to be turmoil will be the story of the day. David Bloom is the global head of FX strategy at HSBC. He has just written a paper, "The Greek Crisis: Four Scenarios for the Eurozone."
Well, in the current environment, he told me the current state of play in the markets is just the calm --
QUEST: -- before the storm.
DAVID BLOOM, GLOBAL HEAD OF FX STRATEGY, HSBC: Well, there's paralysis in the market. Your major decisions, there are various outcomes, and it's very complicated. You decide what is more strategic for you of the situation, and then you put your hands on your lap and you sit there and you wait.
Because what else do you do? Why are you going to tinker and change your positions from now until Greece? And then we've got the Diamond Jubilee, then we've got the European football championship, then we've got the Olympics. People are scared that these markets are just going to go flatlining for some time to come.
QUEST: Isn't flatlining better than volatility? Because flatlining allows us to take stock, literally, and survey the damage.
BLOOM: But at least when you've got volatility, you're alive. When you're flatlining, you're dead. And do what I'm saying is that we need the markets to come back, start processing things, looking at macro economic --
QUEST: It's too risky! It's too risky to start doing that at the moment. You're better off having a few months of quiet, of ease, of relaxed.
BLOOM: Yes, but the markets aren't relaxed. What I'm saying, it's the calm before the storm. You know that the flatlining isn't people taking stock and relaxing. You know that the flat line is really being calm and the big storm is to come.
And we've still got the US election, which we haven't even focused on, and that's a major political point, because politics is the new economics.
QUEST: Politics is the new economics, and in that scenario, all the rules by which you have played until now don't really apply.
BLOOM: That's why I'm getting killed in the market. I've had a strong euro forecast for this year, and it's really hard. But the point is, when you get together and you start discussing markets, there's not much people saying, because they don't know exactly what you're saying, how to handle the situation.
QUEST: OK, but the dear viewer joining us tonight needs advice and guidance and help and hand-holding. He doesn't need to be told -- or she doesn't need to be told, we don't really know.
BLOOM: We're not saying we don't know, we're just saying that obviously the picture is confusing, and the tool kit that I've got to operate on you, I open it up, and I've got a hammer and a saw, where I used to have beautiful tools.
So, the tools that I've learnt of macro economics, experience in market, this -- what is the political outcome of Greece? How would I know? I didn't go to university and study for six or seven years and try and guess an outcome. So, you've just got to be honest. And what you're really saying is people don't want to hear honesty.
QUEST: The euro dollar at $1.25.
QUEST: And I know you believe that's well-priced in at that, but the fact that we are now at that level, the risk must clearly be on the downside until we get some resolution from Greece.
BLOOM: A little secret: there's no free money in markets. This idea that you could just sell the euro, make money, and everything's fine. Markets are two-way, and the question is, why is it only at $1.25?
If you were on a desert island and you had watched these proceedings with only euro dollar, you would think, well, it's gone down eight big figures or nine big figures from $1.32, $1.33. Big deal. Fear value's $1.25. For a currency where Armageddon is going to be coming tomorrow, this isn't passed in that much, you might think.
But there is something on the other side. There's the dollar. And the dollar has many problems of its own. So, people are fleeing to the dollar because they don't want the euro, but they're not buying asset with it, because they don't believe in US assets, either.
QUEST: I love that quote from David Bloom, "Let you into a little secret: there's no free money in the markets." Alison Kosik --
QUEST: -- is in New York and joins me now. Alison, I trust you had a good Memorial Day -- is it? Yes, Memorial Day is the start of the summer. You can --
ALISON KOSIK, CNN CORRESPONDENT: Right.
QUEST: You can now where white shoes in the Hamptons or something like that.
KOSIK: It hasn't prevented me from doing that before. I break the rules, Richard.
QUEST: Assuming you're a Hamptons sort of person. But anyway, the -- we're getting into that -- you know the old saying, well you probably don't, you're too young to know this old saying that we used to say, sell in May, go away.
KOSIK: Yes, we've seen a lot of that this month, and you know what the big driver has been? It's been Europe. It's been Greece. But today, it's kind of a change of tune here. You're seeing all these investors come back after the long holiday weekend much more upbeat.
Because hopes are high now that Greece -- hey, may actually avoid leaving the eurozone. And that's really been the huge driver for the markets for the past couple of weeks, for the past month. And really, it's just been steering the market direction.
But today, some great news, at least to how the markets see it. An $18 billion euro injection into the four biggest banks. Obviously, that's helping to alleviate --
KOSIK: -- some worries, at least for today. The good news about China, China may soon announce a stimulus package there. That's why you're seeing the markets in a bit of a rally mode today.
QUEST: If I say the word "Facebook," "NASDAQ," "current share price" -- no, no, we mustn't -- we mustn't mock the afflicted.
KOSIK: But everyone else is.
QUEST: Well, look, I'm looking at a price on my delayed screen. What -- you've got a more up-to-date number. What are you seeing at the moment is the current price?
KOSIK: I'm seeing Facebook shares getting crushed today, Richard, down almost 10 percent, sitting at below $30, $28.79. Remember, that IPO price was $38. Today is the first time we've seen this stock fall below $30.
Now, what everybody's pointing to is speculation that Facebook is getting ready to buy Opera Software. What that is, that's a Norway-based browser developer, and analysts at this point, though, are saying, you know what? We're kind of doubtful this deal is even going to come to pass, especially with Opera.
There's been a lot of talk about Facebook's problems in making those clicks turn into dollars, especially on mobile platforms. The believe with this deal is that this company wouldn't help to broaden Facebook's mobile presence. It's clearly not convincing investors today, and that's why you're seeing even more selling of Facebook shares. Richard?
QUEST: Quick final question. Is there a whiff of crisis about this, or do you -- is the market just sort of basically shrugging it a bit?
KOSIK: You mean Facebook?
KOSIK: You know, I think it's -- maybe a little of both. You know what investors really want to see? They want to see Facebook come out with a solid business plan, here. Show us how you're going to make money.
And for example, this Opera dealer doesn't speak volumes at all about those dollar signs. So, it's just not convincing enough at this point.
QUEST: Alison Kosik's in New York and going to be having a good summer. We'll talk about it over the weeks ahead.
KOSIK: Sound good.
QUEST: Coming up next, a scoop of sustainability and a hefty sprinkling of ambition. It's the makers of Ben & Jerry's ice cream, and they're on the hunt for tomorrow's ethical business superstars, $60,000 at stake. Jerry tell us about it --
QUEST: -- after the break.
QUEST: Ben & Jerry's co-founder Jerry Greenfield says too many businesses don't stand for anything apart from making money. One of his company's mission statements is to improve the quality of people's lives locally, nationally, and internationally.
Ben & Jerry's Join Our Core competition aims to do that, it nurtures the next generation of socially responsible entrepreneurs. In London, Greenfield gave us the scoop on the progress so far.
TEXT: Are YOU the next Ben and Jerry's?
At Ben & Jerry's, we have always tried to drive positive change in communities around the world.
And now we want YOU to JOIN OUR CORE & SCOOP FOR CHANGE.
JERRY GREENFIELD, CO-FOUNDER, BEN & JERRY'S: Join Our Core is a quest to find young social entrepreneurs in five countries in Europe who are helping to address social and environmental issues in sustainable businesses.
TEXT: The Prizes: 5 PRIZES OF 10K EUROS
GREENFIELD: The people who win this competition will get 10,000 euros, and they will get mentoring from Ashoka, who are specialists in working with social entrepreneurs. And in addition, they will go on a trip to Uganda with Ben & Jerry's and Ashoka and VSO to work with local fair trade farmers and get on-the-ground experience with them.
Take this bicycle chain, for example. There is a social entrepreneurship venture in Ireland that has entered the competition. They take bicycles that are unwanted, the prevent them from going into the landfill, they find people to fix them who are people who are having difficulties, people who have been homeless, problems with the law.
They then sell the bicycles and make money. They provide job training and jobs for these individuals, and at the same time, they get people to ride bicycles instead of being in cars polluting our wonderful atmosphere.
Doesn't that sound great? It's got all these different components. It's such a holistic attempt to meet so many different elements of this problem. What surprised me the most was how creative they are.
You really -- Ben, my dear friend and partner, is a very creative person, and I'm just one of these guys that, I do really good inside the box. If you tell me what the box is, I can do great. But I'm not an out- of-the-box person, and these people that we're talking with are just so creative in approaching things from ways that I would never even think about. It's just really inspiring.
GREENFIELD: I think it's important for all businesses at all times to be taking their social responsibility seriously. Businesses, particularly big business, is the most powerful force in our society. Business needs to be thinking about more than just how much money it can make.
Business is needing to think about how it's going to help address the common good and not just think of, hey, what's in it for me?
QUEST: Now, the semifinalists' ideas range from an online tool that links marketeers with charities to heated outdoor cushions to conserve energy costs in stadia.
As you might expect from such a competition, some of the entries are food-related. Earlier, semifinalists from Rubies in the Rubble and FoodCycle told me why their entries are innovative.
JENNY DAWSON, FOUNDER, RUBIES IN THE RUBBLE: I make chutneys and jams from what would be discarded fruit and veg at the same time as providing employment to disadvantaged or low-income individuals in the community.
QUEST: And as for you, Kelvin, what is the core of your project?
KELVIN CHEUNG, FOUNDER, FOODCYCLE: Our core is about getting the surplus food, volunteers, and kitchen space in ever community and making value out of it, cooking delicious meals for people at risk of food poverty. And I think that's why we fit in this competition quite well.
QUEST: So, you are both in the provision of food services, you with chutneys and waste food from fruits and things, and you from other waste foods and to meals, correct?
QUEST: But what I need to know is, why is it innovative, what you're doing? Because I've read the rules. It's got to be innovative. It's got to be sustainable.
CHEUNG: For us, it's all about how we connect each other together. For us, we've got 16 locations across the UK, and for us, the innovative part is to unite our 16 right now, and as we scale, unite them all together as a vast movement against food waste and food poverty, and that's never been done before in the UK.
QUEST: But why are you not just a food bank or a soup kitchen?
CHEUNG: Because for us, we feel that -- food, it's more than just about the food. It's about coming together, having fun. And when you're in food poverty, when people are hungry, it more than just about the food. It's eating together, volunteering together. And what our participants get out of it is about the confidence and the happiness from the food, as well.
QUEST: Good. So, sense of community. Jenny, the Women's Institute have been making jams in this country --
DAWSON: They have, yes.
QUEST: -- for decades if not centuries. Are you just not a 21st century Women's Institute?
DAWSON: No, I want to revolutionize chutneys and jams, but also making a first-class global product made from what would be waste.
QUEST: But where's the benefit to the community. Yes, all right. Food waste is bad. Food waste bad. So, where's the benefit from what you're doing besides that?
DAWSON: By providing employment. So, the women and people that we employee work in the kitchen, they also work in the markets, as well. Gives them confidence, being back on the team.
QUEST: You're making money out of this, aren't you?
QUEST: Yours is a for-profit organization.
DAWSON: For profit, yes.
QUEST: So, your benefit is social benefit rather than financial benefit -- to the community.
DAWSON: Yes, yes.
QUEST: And yours?
CHEUNG: We have a lot of social benefit, but we also have a business aspect of ours. We do some catering on the side and we run a cafe to kind of cross-subsidize our charitable activities.
QUEST: Have you both to some extent accepted that very much in the line of Ben & Jerry's that social entrepreneurism only goes so far, and it doesn't really work without a capitalist enterprise behind it, Jenny?
DAWSON: I think you need both. I think you have to be for profit. It drives something. But I think you can have a business head with a charity heart.
CHEUNG: I think it's the 21st century. Things are changing, and I think social business is the new way of doing things. Ben & Jerry's, you've got Patagonia, other companies that are coming up that can put people, planet, profit, the triple bottom line, to action. And hopefully, Jenny and us can follow down that same path.
QUEST: How old are you, Kelvin?
CHEUNG: Twenty-nine, almost.
QUEST: Twenty-six. So, you're both Millennials.
QUEST: You're both -- do you both exhibit the Millennial traits that we see often on this program? You're very determined, you believe at some point you can and will succeed, and that you will do it probably faster than most. Do you both believe that?
CHEUNG: Um --
DAWSON: Yes, to a certain degree. I love what I'm doing, and I think if anyone's passionate about what they're doing, you can make it happen.
CHEUNG: I think it is the passion that drives it forward. And with that belief, hopefully, yes, we'll go big.
QUEST: Which one is going to win?
CHEUNG: Shall we just split it?
DAWSON: We'll split it, yes.
CHEUNG: All right.
QUEST: Oh! Please!
QUEST: A true Millennial response. They both want to win, but when push comes to shove, they'll split it.
And now, our Currency Conundrum. And today's question is, who had the nickname "Old Coppernose?" Was it A, Julius Caesar, B Henry VIII, C Napoleon? The Currency Conundrum.
The Currency numbers, the euro, as we said, below $1.25, it's a two- year low, fallen a third of a percent so far today. Sterling down on the Spanish banking fears, and even rebounded retail sales figures failed to drag it up. Those are the rates --
QUEST: -- this is the break.
QUEST: The unemployment crisis is not only about a lack of jobs, it's also about the lack of skilled candidates. The recruitment company Manpower says there's a global skills gap and it's showing no sign of narrowing.
In an Empire poll of 38,000 employers worldwide, 34 percent said they found it hard to fill open positions. Now, that number is greater in larger economies. In Japan, for example, it was 84 percent. Employers say if they can't fill a job, it's often because there aren't enough applicants with too few skills and a lack of experience. The know-how is not there.
Unemployment remains a key obstacle to the global recovery. Join me in the super screen, and you see, Japan out today had figures that showed unemployment at 4.6 percent, it's up just a tad. But put that into perspective, that is high by Japanese standards, which normally has full employment and seriously low numbers.
The jobs report is out on Friday in the US, and may expect the rate will hold at 8.1 percent. To give it its fair due, it has come down quite dramatically, but some say that's because people are no longer looking for jobs rather than any real job creation.
Finally, this is the -- the misery and mayhem and disaster area. The eurozone, 10.9 percent, up just a fraction. And the range in the zone is from Spain at 24 percent to Austria at 4 percent. That puts it fully into perspective for you.
In New York, Phillip Reyland is the chief executive of app developers Byte Department. Philip, good to see you and good to talk to you. The -- I know that you had your own person experience of basically having to go and train to do something in your company that you were not basically trained to do. What was it and why?
PHILLIP: Absolutely. As a boutique digital agency here in New York, we've had a lot of issues in the last couple of years retaining and/or getting the kinds of talent that we need in order to constantly be fulfilling our client orders.
In the last couple of years, we've tried almost everything to get better talent. We've gone offshore, we've gone onshore, we've hired very expensive talent, very cheap talent. And what we've actually found works best is we sort of do a two-pronged approach.
Our first approach is, we hire very junior-level talent and give them all of the resources and all of the money for education and all of the assets that they need in order to become the senior-level developers or the senior-level talent --
REYLAND: -- that we need. Or I have personally started taking programming classes so that I can start hiring better talent immediately without having to go through a sort of three or six month process.
QUEST: Do you find it somewhat extraordinary that we talk about a jobless recovery, and your story is not unique, but that companies are finding it difficult, particularly in specialized areas, to get qualified staff?
REYLAND: I do, but I think, just as your last guest was mentioning, the internet is changing everything. So, when I go out and I need to find talent, I started going to all of the local meet-ups, to all of the tech meet-ups, to study groups and all of these different sort of places and tried to find the real people.
I'm not sure that larger companies are necessarily going out trying to poach talent from the talent pools that are necessary and are maybe relying on the longer-term, sort of like Monster.com networks.
I don't think tech talent has a lot of -- they don't believe firmly in the online post. They believe in the network, and I think that --
QUEST: It's a problem, though, isn't it? Because if we are in a jobless recovery, there is going to be a skills gap which, as the Manpower survey shows, is going to be difficult for both traditional and new companies, like yourselves, to handle, isn't it?
REYLAND: Absolutely. The skill gap is an interesting one, because I think if it's -- granted, I'm 28, so I've been working for, I don't know, a decade now. And in my decade of working, I've seen this sort of evolution. I started doing a very specific thing, designing magazines which had a very specific kind of skill set.
And it sort of evolved into this technical world, which has so many different kinds of opportunities, and I think that the skill gap, as the opportunities have increased, is becoming larger.
REYLAND: At any given moment, I need to hire a security specialist, or I need to hire a social specialist, or a media specialist. And those people are very, very, very hard to find because they are very specific, and there's a very small crowd of them.
QUEST: Thank you very much for joining us. Ten years in the workplace, a true Millennial, as we always feature on our programs. And we love having Millennials. In fact, our series, The Millennials, is next. Many thanks for joining us.
Coming up next, Millennial Milli in South Africa is using her talent to find her footing in the workplace. But once again for our Milli, is she taking on too much?
QUEST: Hello, I'm Richard Quest, more QUEST MEANS BUSINESS in a moment. This is CNN, and on this network, the news will always come first.
The U.N. envoy Kofi Annan says he's told the Syrian president the violence in Syria must stop. Kofi Annan says he spoke frankly with Bashar al-Assad during the talks in Damascus. Annan is trying to revive his six- point peace plan for the country after Friday's brutal massacre in the town of Houla.
That massacre has led to outrage across the world. Several countries are now expelling Syrian diplomats, including the U.S., Australia, France, Germany and the U.K. The White House has called it a horrifying testament to this regime's depravity, but says it does not believe further militarization is the right course, in their words.
Authorities say 14,000 people have been displaced by a powerful earthquake in northern Italy. The 5.8 magnitude quake killed at least 15 people and wounded 200 more. Aftershocks continue to rattle Medina (ph) province. Another significant earthquake hit the same region nine days ago.
Myanmar's celebrated opposition leader, Aung San Suu Kyi has arrived in Thailand. And as you can see, it's a rapturous welcome. It's Suu Kyi's first trip outside her country in 24 years. Suu Kyi plans to speak at the World Economic Forum and meet with refugees from Myanmar who are living in Thailand.
In Afghanistan, 160 schoolgirls are thought to have been poisoned. Those who fell ill complained of headaches, dizziness and vomiting. Police suspect the girls' classroom may have been sprayed with a toxic material, and they blame the Taliban. Most of the students have now recovered. The attack follows a similar incident last work at another girls' school.
QUEST: Earlier in the program we heard about the struggle for talent and for skills. Well, not all members of the young workforce are struggling. A millennial will become a jack-of-all-trades if -- and this is a key point -- it means getting ahead.
Tonight we're focusing on our Millennial, perhaps more than any other, who does it best, Milli Bongela. She's launching her brand new blog and has tough decisions to make in the process. Milli takes on too much. She is our Millennial.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (voice-over): (Inaudible) 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 are "The Millennials."
Previously on "The Millennials," Milli told us that doing it all has its downside.
MILLI BONGELA, FASHION BLOGGER: It's one of my biggest fears, the fact that I might do some -- do other things that I'm doing in a mediocre way.
UNIDENTIFIED MALE (voice-over): Today, Milli is sticking to this philosophy, and yet again, she's taking on a new project.
BONGELA: We are starting a blog that is basically going to be a witness to what's happening in Johannesburg right now.
UNIDENTIFIED MALE: (Inaudible) like black and straw.
UNIDENTIFIED MALE (voice-over): With a beer to help ease the flow of the discussion and note pad at the ready, Milli and her photography partner, Chris (ph), are ready to brainstorm.
BONGELA: I looked at the domains. It's not available. When you think of this is we are (inaudible).
UNIDENTIFIED MALE (voice-over): The new blog, which is expected to launch in June, is less personal, more mature.
CHRIS (PH): Do you love that name? (Inaudible) not like transfixed on anything at this point, you know, the --
CHRIS (PH): Maybe it needs to be shorter.
UNIDENTIFIED MALE (voice-over): It's less Milli, more Africa.
BONGELA: We need something that says we are in Africa, going to be ours in the beginning. So we want to control all the (ph) continent, and we don't necessarily want to involve advertisers and big brands just yet. But the aim is to involve them (inaudible) make some money from it.
CHRIS (PH): Then we ask them in the story when the next battle (ph) is.
UNIDENTIFIED MALE (voice-over): To help get there, Milli is counting on Chris (ph). She's hoping her narrative and his eye will make this new venture a profitable business in the long run.
CHRIS (PH): Should get their story, and it's more personal, (inaudible) not just this broad story about like Pasoula (ph) or, you know, like --
BONGELA: But then in terms of a narrative, you know, where I come from, telling a story, I get what you're saying, but we also need to kind of link them.
I believe in collaboration and part of a culture and generation of people who like to use each other. I can write and Chris can't write. He can take photographs. I can't take photographs as well as he does.
UNIDENTIFIED MALE (voice-over): For a woman who's made a name for herself by speaking out through her personal blog, this new partnership is much more controlled.
BONGELA: We need to start the process of setting up the domain and actually --
CHRIS (PH): Starting the design --
BONGELA: -- starting the design.
UNIDENTIFIED MALE (voice-over): The tone, much more sophisticated.
BONGELA: We have to link it to (inaudible) culture and (inaudible) and have it sit in on why it's important, why it matters.
UNIDENTIFIED MALE (voice-over): Our first sign yet, perhaps, that this Millennial is growing, learning and maturing.
BONGELA: I think in terms of our next step, logistically, I've just turned 27 and I think I went through something called sentence return (ph), where I was just like worrying about a lot and thinking or feeling that I'm inadequate.
You get to a point and you're like, oh, you know, I'm such a loser or I'm so stupid or I'm not intelligent or whatever. And I've spoken to people who are older than me, and they say, try it. You go through this. It happens. You'll come out of it.
UNIDENTIFIED MALE (voice-over): Next week on "The Millennials":
MICHAEL BURBANK (PH): (Inaudible) so busy and so crowded, but I still love coming here and --
BURBANK (PH): Because --
QUEST: It's full of tourists. It's smelly and it's crowded.
BURBANK (PH): Well, I'm 10 blocks with all of my dreams.
UNIDENTIFIED MALE (voice-over): Richard Quest spends an afternoon with Michael Burbank (ph), who discusses trees, his work and his millennial ambition, only on "The Millennials."
(END VIDEO CLIP)
QUEST: In a moment, Manchester United is the world's most popular football club. If you don't believe it, there are 625 million fans who will argue the toss of the coin. The club's commercial (inaudible) speaks for itself.
(BEGIN VIDEO CLIP)
QUEST (voice-over): The conundrum currency question, who had the nickname "Old Copperhorse (sic)" -- Copperhorse -- Coppernose, the answer is B, Henry VIII. During his reign, so much copper was added to silver coins it would often show through on the nose of his image on them.
(END VIDEO CLIP)
QUEST: All right. You were all wrong, whatever your answer was, since I managed to get that one slightly around the neck.
Hermes is keeping it in the family. Its next chief executive of the French luxury brand is Axel Dumas, a sixth-generation member of the Hermes family, or Hermes, depending on how you want to pronounce it. I've heard every possible pronunciation.
He will co-direct from the end of this month and take over from Patrick Thomas (ph) sometime in the future. Luxury brands are doing well, if Bottega Veneta's results are anything to go by. First quarter sales from the Italian fashion house rose 39 percent from last year. Its double- digit growth from its range of handbags and luggage across all parts of the world.
(Inaudible) spoke to the chief executive to ask about his strategy for growth.
(BEGIN VIDEO CLIP)
MARCO BIZZARRI, CEO, BOTTEGA VENETA: Despite the megatrends for the past (inaudible), the growth is going to come from the Asian countries. I still think that despite the potential (inaudible) of Europe, investors for luxury (inaudible) Europe is absolutely key because Europe will remain, Italy will remain the flagship for the luxury business.
I strongly think that the Chinese customers or (inaudible) customer will buy into the luxury brand in their own country if -- when they travel this year, proper display of this product or this brand in the country where this brand comes from. So we keep on investing in Europe so we doubled the size of the shop in (inaudible).
We doubled the size of the shop in Monaco. So we try to be the best representation of the brand in the best way possible as well in Europe, despite the (inaudible).
UNIDENTIFIED FEMALE: Talk to me about your investments in Asia Pacific.
BIZZARRI: Well, we are, of course, investing quite heavily. But as I said before, we try to balance our investment and location we are investing in a quite even way across regions, geographical regions. So we invest as much in the Europe, U.S., Japan and China.
UNIDENTIFIED FEMALE: So there's slow growth in one area, you're safe?
BIZZARRI: Absolutely. So the idea is to try to avoid to be too much unbalances or account -- well, you never know what's going to happen.
UNIDENTIFIED FEMALE: What is, do you think, the appeal of the made in Italy logo or the sign?
BIZZARRI: That is very interesting to me. The made in Italy is not a label that you stitch in the garment or in the bag. I think it's very much depending from the history attached to it. It's very much start -- to me, it starts from the Renaissance and (inaudible) in Italy, where you had the teacher had the master and the student, in a way.
And one was teaching to the other until the student worked better than the master. This kind of philosophy has been applied throughout the years in Italy. So today, you can't really copy the model, because you -- most of our supply, most of our art is of the children of the father working with us in making this kind of activities.
UNIDENTIFIED FEMALE: Is there concern, though, that the young generation, the new generation that comes up, and they may have seen their fathers, grandfathers and great-grandfathers being part of this industry, and the craftsmanship, but they don't want to -- they don't want to go into that. They want to go into the cities and develop something of their own. Is there concern that that art dies?
BIZZARRI: It is definitely a concern, and this to me is the main challenge of the luxury business in Italy. But I think also this worry is facing younger generation, as you said, are not interested in the making of a product.
So for this reason, we are facing challenge in the coming future, especially for a company like ours that is growing so fast. So in order for us to sustain the demand, what we did, we put together a school. We set up a school in Vicenza.
But again, Vicenza is not Rome (inaudible), something that is not very attractive from a town standpoint. And what they learn, more than the making, is the passion, the desire (inaudible) and do these things.
UNIDENTIFIED FEMALE: Yes.
BIZZARRI: And so the collaboration between the maker and the art is - - and the creative director of Bottega Veneta is the success of the company. And that creates innovation any single time. That is the reason for me why the made in Italy is not a label. It's very much something that comes generation after generation. That is -- cannot be copied.
(END VIDEO CLIP)
QUEST: Now talking of labels, brands and big names, Manchester United finally has a title it can celebrate. According to a new survey, it's the most popular football team on the planet. It has 659 million followers.
How on Earth you count every single one of them, I have no idea. But almost half of the fans are in Asia and the club's commercial director, Richard Arnold, explained why the Red Devils have never been more popular.
(BEGIN VIDEO CLIP)
RICHARD ARNOLD, MANCHESTER UNITED COMMERCIAL DIRECTOR: When you look at the spread of our family of followers, 325 million fans in Asia, you know, over 100 million in China alone, it -- to get 173 million in the Middle East and Africa, across the piece, what we're seeing around the world is that we have huge family of followers and that they feel very strongly about the club.
And that's a very, very powerful and intoxicating mixtures for the partners of the club, both the regional partners, but also global partners, Aon, DHL and Nike are able to activate all around the world with this family of followers who feel really strongly about the club, and with the other people that support the club like our sponsors.
We've been visiting China since 1975. So for us, you know, this -- the global approach to Manchester United takes is another tradition. In 1950 we conducted a tour of the Americas, 14 games over a period of nearly two months. We traveled by steamship.
But one of the things that was brought back from that tour by Samat Busby (ph) was in closed boxes at the stadium. You fast forward 60 years to today, and exactly the same innovations are occurring across our business with our regional partnerships, with how we activate our sponsors. In some ways, we have to look at the very best in all industries.
You know, we look at Apple, we look at Google, we look at some of the giants of industry to see how they're engaging with their fans and followers. I think that there are many things that we can learn in the Americas in particular with the NFL, NBA, et cetera.
But there's only one Manchester United, 650 million people, (inaudible) every corner of the globe, all with an undying passion for one club, I think, is somewhat a unique situation (inaudible).
(END VIDEO CLIP)
QUEST: And I'm guessing that a lot of those 100 million fans certainly in many parts of the U.K. will enjoy a pie or two at halftime and will be pleased to know this is the old-fashioned pasty. Now if you want to know what a pasty is and you're not familiar with it, if I break it open, you will see it's sort of meat, it's got a bit of vegetables and a healthy sprinkling of carbohydrates. It's also had a lot of discontent in it.
The humble Cornish pasty has now -- that's not a Cornish pasty, by the way, that's a meat pasty. It's forced the British government to make a u- turn after a victorious campaign against the so-called pasty tax. It was a controversial tax that would put a sales tax on hot pasties, 20 percent V.A.T.
There was outrage from bakers, shares in bakers' company Greggs fell more than 5 percent and last month there were at a seven-month low. Now the government has now decided to drop the pasty tax and Greggs was up 8 percent. And today, they had posters in their windows, thanking their customers for opposing, "Thank you for signing our petition against the pasty tax."
So under the new government rules, and this always happens, it happened in California with the snack (ph) tax. It always happens with these taxes. It's complicated. If the pasty is being kept warm, you pay the tax. If it's cooling off in the shop, you don't. If it's been sitting `round in the office for the last six hours, you'd best be very drunk when you drink it or eat it.
I'll be back with the forecast after the break.
QUEST: Jenny Harrison's at the World Weather Center for us this evening, and there was an earthquake, as we've been reporting, in Italy. Tens of thousands of people, certainly many thousands of people displaced as a result of that.
Jenny, the weather conditions for them tonight?
JENNY HARRISON, CNN METEOROLOGIST: Not bad weather conditions, actually, Richard. For the next couple of days across this region of northern Italy, by Wednesday, though, we are -- by Thursday, I beg your pardon, we are expecting to see some showers and several thunderstorms in the afternoon hours. But in fact, there have been five earthquakes this Tuesday. The first is this 5.8.
Now they're all considered aftershocks because they are a smaller magnitude than the 6.0 which struck nine days ago. But you can see across this region that we've got many towns that these quakes were very, very close to and certainly 5.8, that is considered a moderate to strong earthquake.
Now as many as 60,000 people in this area felt very strong shaking and as many as 5 million people actually felt some form of shaking. So you can see, as I say, where it is in respect to all of these major cities in northern Italy.
Now as we've been talking, there were at least 15 people that have died, more than 200 people have been injured. And this lady here just sort of tells you the whole story, really, because back in nine days ago, seven people were killed. At that point, 7,000 people were made homeless. And you can see behind these two policemen that the roads are just quiet. They're cordoned off. Obviously, very unsafe right now.
That is the first thing, really, is to assess the damage and to just work out obviously whether any of these buildings are truly safe. Certainly they have been weakened in the 6.0 magnitude. And then five earthquakes today. They began at 9 o'clock this morning.
But in this region of Medina (ph) in Italy, very large area for producing balsamic vinegar but also these cheese wheels that you're looking at here. And of course, it's Parmesan cheese. And back nine days ago, 400,000 wheels of maturing Parmesan were actually destroyed in that earthquake.
That actually is now coming to about $65 million in total losses, 2,000 companies were forced to shut down back on May the 20th. And today's earthquakes will have just really exacerbated that entire problem.
Now meanwhile, across into the southeastern United States, we're watching Beryl. It was a subtropical storm for a while. It came on shore of the weekend, 152 millimeters of rain, winds are on 117 kilometers an hour.
The whole system is going to just sit in the southeast, work its way offshore and looks as if it could regenerate into a tropical storm, so we're going to keep a very close eye on that. You can see the winds at the end of this forecast period, they've become very strong.
There's that -- the system develops once again. It is, though, bringing some very heavy amounts of rain, but some good rain. So it's had some localized flooding, but for the most part, all of this will be welcome as we have got severe drought across the entire region. As for Europe, pretty good across most of central and northwestern areas, Richard.
QUEST: All right. Jenny, starting tomorrow, we're going to be Jubilee Watch, so I expect you'll have your seaweed thermometer and whatever else you'll use out there ready to give us the Jubilee weekend watch. Many thanks.
HARRISON: We'll do that, OK. Bye-bye now.
QUEST: Thank you.
QUEST: Go on.
Right. Back in a moment, after the break.
QUEST: Tonight's "Profitable Moment," it's called "The Jobless Recovery." In all corners of the globe, unemployment remains stubbornly high. It is the hallmark of the post-recession doldrums. Naturally, different numbers tell different stories in part of the world. Job growth in the U.S. may be underwhelming, but at least the situation is improving.
In Europe, the numbers, well, do you really need me to tell you? It's disgraceful, really, particularly when it comes to youth unemployment. Almost half of Spain's young people are stuck without a job, and that's what makes the manpower report today so concerning.
Employers are finding it tough to find employable candidates, one with the skills to take their company forward in tough economic times. Governments are struggling to create jobs. It's as if the next generation isn't even skilled enough to take the jobs that are there. And when that happens, do you really need to ask? We are really in trouble.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I do hope it's profitable. Headlines are next.
QUEST: The U.N. envoy Kofi Annan says he has told the Syrian president the violence in Syria must stop. Annan is trying to revive his six-point peace plan for the country after Friday's brutal massacre in the town of Houla.
The White House has condemned the killings. It says it does not believe further militarization is a right action at this time.
Authorities say 14,000 people have been displaced by a powerful earthquake in northern Italy. The 5.8 magnitude quake killed at least 15 people and wounded 200 more. Aftershocks continue to rattle Medina (ph) province tonight. Another significant earthquake hit the same region nine days ago.
Myanmar's celebrated opposition leader, Aung San Suu Kyi, has arrived in Thailand to a rapturous welcome on her first trip outside the country in 24 years. She's to speak at the World Economic Forum.
Protesters are demanding Egypt support disqualified Ahmed Shafiq from participating in this month's presidential runoff. Shafiq was Hosni Mubarak's prime minister (inaudible) the Muslim Brotherhood's Mohammed Morsi in the second round of voting. That is set (inaudible).
Those are the news headlines. This is CNN.
Now live from New York, "AMANPOUR."