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QUEST MEANS BUSINESS
Spanish Unemployment Rises; Europe's Job Crisis; Euro Crisis; Spain Up, Rest of European Markets Down; Billionaire-Led Coalition Wins Georgia Election; Iranian Currency Crisis; Euro, Pound Higher; Interbrand's Top Brands; Trademarking Colors
Aired October 2, 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 chronic jobs crisis in Europe that's getting worse. Tonight, we'll be reading between the lines and asking why Europe is in such a bad situation.
The ghost of Bear Stearns. New York's attorney general sues JPMorgan. The attorney general is live in this program.
And first money, then power. Georgia's richest man tells CNN he's ready to be PM.
I'm Richard Quest. We have an hour together. I mean business!
Good evening. Tonight, a sickening blow for Spain as thousands more people are plunged into Europe's great jobs depression. Look at the numbers. Spain says 80,000 people --
QUEST: -- joined the long line of jobless benefits in August, 4.7 million are now registered unemployed in Spain. It's the highest of any European country.
Now, you'll remember on Monday, we got numbers from Eurosat on the eurozone unemployment. That showed that unemployment remains at a record high of 11.4 percent across the zone. Europe's jobs crisis is now as urgent in many ways, or at least as chronic if not as as significant in the immediate as the debt crisis.
Seemingly, though, it's not just a problem for the eurozone. Join me at the super screen and you will see, this perhaps makes the most telling information of all. The eurozone unemployment rate has now risen to just over 11, nearly 12 percent, 11.4 percent.
But this is the important thing to realize. If you look at the numbers, it started high and it has pretty much remained high. Eurozone unemployment has never got down to the 6, 7, and 8 percent of other countries. It's been around 10 percent for three years. It's increased every year for four straight years.
Now, we know the situation is like this now, but just compare it to how it looks when you look at the other unemployment of the other major countries: the euro, the US, and Japan, and suddenly you really do see an extraordinary difference.
Firstly, Europe as we've just pointed out started higher -- considerably higher than the others. Secondly, Europe rose very sharply, as did the United States.
But look at this. Whilst Japan has started to fall back, the United States has started to fall back, the eurozone continues to rise higher. In other words, whichever matrix you put on, eurozone crisis and Europe's crisis is a particularly depressing scenario.
Let's put this to the commissioner in Brussels. Joining me now, the Commissioner for Employment, Laszlo Andor. Commissioner, you describe the eurozone and the EU unemployment level as unacceptable. The question is, when is -- when are you, or the commission -- when are you all going to get a handle on it and start helping to bring it down?
LASZLO ANDOR, EUROPEAN COMMISSIONER FOR EMPLOYMENT: Well, the immediate situation is very serious and, indeed, unacceptable, particularly what concerns the young people. And we already in recent years have rolled out a variety of initiatives, including the Youth Opportunities Initiative, and a complete employment package to help the member states to cope with the situation.
QUEST: Now, I know that, obviously, it's member states that do most, if you like, of the hard work. But if you look at this graph, which we're just looking at now, the United States has got unemployment coming down. Japan's got it coming down. The austerity of Europe rammed down the throat of countries has kept and is keeping unemployment going up. That's the criticism.
ANDOR: Well, indeed, this is an important point. You cannot separate the employment crisis from the general crisis of the economic and monetary end, and monetary crisis which we're in, and the austerity policies that have been implemented, especially in the so-called member states -- program countries, and especially in the southern member states of the EU.
So, we need to also see the geographical dimensions, and the fact that in the nose and the center, we have quite a few member states with good dynamics, but in the south, a real and severe crisis.
QUEST: All tight, but -- but Commissioner, if we look at the United States, highest unemployment, Nevada 12.1. Lowest, North Dakota, 3 percent. A differential of 9 percent. Look at the EU, and you have a differential of 20.1 percent between the north and the south. Now, that needs to be addressed.
ANDOR: Yes, let me highlight two important points in the US-EU comparison. One of them is the role of the demand-side policies. The US policy against unemployment has been focusing on the demand side, boosting the demand for labor. We have much more limited capacity to do that.
But the other point is about mobility. In the US, because of no language barriers and no barriers to mobility, also culturally more homogenous society. Europe does not have that. Even if we have free movement of labor, because of the language barriers -- two dozen languages separating us -- it's a lot more difficult to expect that mobility alone will counterbalance the financial difficulties.
QUEST: Now, I know that you take this, obviously, exceptionally seriously, and I know that President Barroso, this is at the top of the president's agenda moving forward. So, my last question to you is this: as we look to 2013 and 14, isn't it time for national governments and EU to basically make putting people back to work as the number one priority?
ANDOR: I fully agree with that. We've made this point in an employment package this spring, and I did, indeed, believe that employment should be prioritized, and -- alas, a number of actions without implementing reforms within member states, this is the question.
But also boosting mobility and using the EU financial instruments, particularly the European social fund, in a more efficient way to help the unemployed and especially the young unemployed.
We have these opportunities, but it's also important to sort out the macro economic landscape, because without addressing the macro economic instability, especially inside the euro area, we have a very limited room for maneuver to address unemployment.
QUEST: Commissioner, good to have you on the program. Thank you for coming on and giving us some frank answers to the situation. The commissioner joining me there from Brussels.
Now, when we talk about unemployment and we put this in context, Bronwyn Curtis is with me. The commissioner saying there, talking about mobility issues, the importance of macro economic issues. But when we factor it in, Bronwyn, how much of this austerity has been the -- is the cause of all of this?
BRONWYN CURTIS, SENIOR ADVISOR, GLOBAL BANKING AND MARKETS, HSBC: Well, some of these austerity packages are still to come. I think one of the problems is we've had a crisis in Europe for several years now, and it's been difficult, much more difficult to maneuver in side the eurozone than outside it. And of course, having those rigidities has made a difference.
Now, Spain -- we had those Spanish figures you talked about -- it's been high for quite a long time, particularly the youth unemployment, but they've had a bigger bust, also, than a lot of other countries. It's just that looking forward, it's really difficult to see this unemployment coming down in Europe. Eurozone, we're looking at growth even lower next year.
QUEST: That's -- at this point, you saw the graph. I could see you looking interestingly at that graph. At these numbers, it's frightening, though, isn't it?
CURTIS: It is something to worry about. And we've also already seen demonstrations on the street against austerity in a lot of countries. And even if you take -- take Ireland. Here they've had five years -- they're sort of the poster child of how to do it. Five years of austerity, probably another three, and even then, growth will be low and debts will be still quite high.
QUEST: So, as an economist at HSBC, as somebody's who's -- on this austerity question, I know the EU is bringing forward pro-growth policies, although frankly, I don't think anybody can quite understand what they are, they seem to be so complicated and hidebound. Is it time for more pro- growth and less austerity?
CURTIS: Well, I think you need a combination of things. You need the austerity because you've got to get the debt down. But you need structural reforms. You also need things further and further towards the eurozone becoming closer and closer, so banking union. And then we'll start getting the transfers going between the countries.
Now, a lot of this is terribly difficult, and they've been muddling through for quite a long time. But your chart also showed that the eurozone started at quite a high level --
QUEST: That's the worrying part!
CURTIS: -- of unemployed. So it wasn't that -- it's risen, of course. But it hasn't risen, really, as much as, say, the US unemployment.
QUEST: And that 8 percent that the eurozone starts, that is structural, not cyclical.
CURTIS: Well, that's right. And there is a lot of structural unemployment. Has been for a long time in Europe. But in the US, they are able to do more about it because Ben Bernanke said, we're going to start -- keep throwing money at it until we get more people back to work.
QUEST: Ah. But your mandate. Many thanks, indeed. Good to have you with us, Bronwyn, helping us to understand this and makes some sense of it as always. Many thanks, indeed.
Spanish stocks had a decent session on Tuesday, compared to the rest of Europe. The IBEX finished up more than 1 percent.
Leading the pack, IAG -- that's the parent company of British Airways and Iberia -- after reports that Qatar Airways is to join the One World Alliance. IAG is -- so rumor has it, not that I could confirm -- going to be the sponsor for this. It would also be important for BA. Markets elsewhere closed in the red.
In a moment, Georgia's next leader will be a self-made billionaire. We ask him if he's too close to the Kremlin. QUEST MEANS BUSINESS, good evening.
QUEST: Georgia's president Mikheil Saakashvili has conceded defeat in his country's general election. He acknowledged the victory of a rival coalition earlier on Tuesday. Now, the coalition will be led by the billionaire Bidzina Ivanishvili, who has promised closer ties with Russia.
Our International Correspondent Matthew Chance asked him would his government take Georgia back into the sway of the Kremlin.
BIDZINA IVANISKVILI, LEADER, GEORGIAN DREAM (through translator): We must restore normal relations with Russia. At first, these would be trade and cultural relations, but in the future, we need to return to the friendly relations that we've had in the past, that we've always had with Russia in the past. This is not something that should be easy or that will happen soon.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Now, you've made a fortune in Russia in business, you still have a lot of interests there, a lot of assets there. Do you think that those interests may compromise your ability to make the right decisions for the national interests of Georgia when you're prime minister?
IVANISHVILI (through translator): I've already sold the property I had in Russia. My latest large assets were bought by a very well-known American international fund, Arco International, and these are all the issues my opponents on the government side accuse me of. I do not owe anything, and I'm not tied to anything.
CHANCE: Well, let me ask you, how do you intend to improve the relationship with the Kremlin and Georgia? What do you intend to do? What steps do you intend to take?
IVANISHVILI (through translator): Restoring relations with the Kremlin is one of our main tasks, and we will strive in every way to do this. I think it's achievable, but not easy. First, we have to convince the Kremlin that our strategy towards NATO and Europe is not harmful to and does not contradict Russian interests.
In the future, we'll have an even more complex task. We have to restore our federal agreement and convince Russia it's not in their interest to have such separatist territories, which quite seriously threaten Russia's security. The Caucuses is a very complex and explosive region. I think here we will find common interests in the future.
QUEST: That's the new president talking there to Matthew Chance -- the prime minister, I bet your pardon -- talking to Matthew Chance.
Inflation is soaring in Iran as the currency plunges to new lows. Iran's president says the country is coping with Western sanctions. The rial dropped to a new record low against the US dollar on Tuesday. The country is struggling to get paid for its oil.
A new regime of international sanctions, which took effect in July, seem to be slowly suffocating the Iranian economy. As the currency sinks, Iranians are swapping their currency for dollars in the hope of escaping the plunge and that, of course, makes the situation worse.
The fall is making imports expensive. That'll have implications for inflation, and a cut in food subsidies makes things even worse still. At the last reading, inflation was above 23 percent. We haven't seen numbers for weeks, indicating it may be even higher.
Michael Singh is the managing director of the Washington Institute. He served on the US National Security Council, the NSC, as senior director for Middle East affairs. He joins me now, live, from CNN Washington.
Mr. Singh, the -- the core point, of course, the sanctions have been around for a while. Iran's been -- the pariah in some cases for a lot longer. So, the obvious question, why now? What happened now?
MICHAEL SINGH, MANAGING DIRECTOR, WASHINGTON INSTITUTE: Well, Richard, I think that sanctions are only part of the story, here. Sanctions have made goods more expensive. They've also made it harder for Iran to accumulate foreign reserves and to cover its imports.
But the real story, I think, began with subsidy reform in Iran, which kicked off this inflationary spiral which Iran is in. And I think what is additionally different right now is this threat of war. So, you see Iranians going and dumping their savings in rials, trying to convert it into dollars, and that sort of created panic conditions in Iran.
QUEST: And of course, there is this new foreign currency center that the central bank has introduced, which has created a view, hasn't it, that they can't pay the bills and there's something even worse waiting to happen?
SINGH: Well, that's right, Richard, and this points to another problem that Iran has, which is that amidst all these problems, they're really ill-equipped at the central bank and other institutions, to deal with this, in part because Ahmadinejad and his government have really gutted these institutions of the expertise that they would need now.
QUEST: So, let's just look a bit forward. If this continues -- now, if this was any other country, the IMF would be on the -- would be standing outside, you'd be having a balance of payments crisis, and before long, you'd have a standby agreement and would be off to the races. That's not going to happen here. So, if this collapse continues, what happens? Play it out for me.
SINGH: Well, I think the problem that we have here with Western policy is that these sanctions are actually mainly affecting, it appears, the people of Iran. The high inflation, the high unemployment, any economic contraction that happens.
Whereas, the regime continues, really, to take in quite a bit of oil revenue. And though it spends some of that for subsidies, the government is actually OK here, because it can now convert its dollars into rials at a higher rate.
And so the question is, will there be social unrest, or will the regime worry about social unrest and change its nuclear policy? Right now, we haven't seen any sign of that. People appear fatalistic, and frankly, the government doesn't look like it really cares that much about what the people are going through.
And so, this doesn't look like it's going to bring the nuclear issue to a close, which is, of course, the ultimate point of the sanctions.
QUEST: Michael Singh, excellent. Thank you for bringing all those strands together, making sense of what is a difficult situation in Iran, the fall of the currency, and we'll talk more about that in the future. Good to have you on QUEST MEANS BUSINESS, thank you for joining us.
So, to tonight's Currency Conundrum. Why is it difficult to accurately value Iran's rial? Firstly, A, the rial isn't traded on global currency markets? B, the currency fluctuates too much? C, Iran does not release an official rate. The answer later in the program.
Those rates that aren't that difficult to quantify: the euro is up against the dollar, a third of a percent, on the rumors of Spain's ready for a bailout. The pound is higher, the yen is almost unchanged. Those are the rates --
QUEST: This is the break.
QUEST: Look at those names. They all look very familiar. Intel, Intel inside. Google. Microsoft. Well, you don't need me to repeat them. For the 13th year in a row, amongst the best brands in the world, Coca-Cola has taken pole position in Interbrand's top global list.
Coca-Cola's brand has risen by 8 percent from last year at $77.8 billion. It's the 13th year that it's been number one. Now, Coca-Cola's doing rather well. Apple is interesting, 8 last year, 2 this year, a brand value up 129 percent, which is the biggest gainer in the market. You might not be terribly surprised on that particular one.
Google, of course, also up there. That's gone from -- that's even- stevens. But it is ahead of Microsoft for the first time, a gain of some 26 percent. Google's cap has also briefly overtook Microsoft's earlier today.
One that you might not have thought about -- you all know about it, obviously, with Apple and its litigation over patents: Samsung. From 17 to number 9, a rise of 40 percent in value, and a massive big oomph as a result of the sponsorship of the 2012 Olympic and Paralympic Games.
So, let's keep those there and look at them as we talk to Jez Frampton, the Interbrand's chief exec, who joins me now from the New York Stock Exchange.
I suppose the core question, Jez -- we talk about it every year -- it is just a matter of time before Apple overtakes Coca-Cola. Are you prepared to predict that now?
JEZ FRAMPTON, CEO, INTERBRAND: I wouldn't predict anything into the future. One of the things that Coca-Cola has going for it, of course, is it's been incredibly consistent over its -- over, as you say, 13 years with us and hundreds of years in terms of its history.
Apple without question the name of the moment, shall we say, but there are still big questions about what happens into the future post Steve Jobs. And now, they have a real proper competitor on their tail with Samsung. So, I don't think anything can be guaranteed, but they certainly have done outstandingly well this year.
QUEST: What does it tell us? It's nice to know the list and it's nice to see where everybody stands. But fundamentally, so Coca-Cola -- I mean, I'm not surprised by that. But what does it tell us, when we look at this list?
FRAMPTON: It tells us how valuable brands are within the context of business. If you take somebody like Coca-Cola, that $77 billion isn't far off 77 percent of the entire company value. It just shows how important that brand is in the context of their business as a whole.
QUEST: Right, but --
FRAMPTON: It is what drives the success of their company.
QUEST: Right. And as I read your comments earlier today, in a world where, frankly, Apple or Samsung phones both will do the job reasonably well, Google or whatever --
QUEST: -- the distinguishing factor is, now, the brand. Are we that ephemeral and trivial that it's the brand, not the product, that matters?
FRAMPTON: You still have to have a fantastic product, and all those examples you just gave, there's -- Samsung's offer, Apple's offer, any of these guys do fantastic products. But it isn't just that. It's the services around them, and it's the culture.
And as you say, it's what they stand for. What does it say about me if I walk into a bar with a Samsung in my hand? And what does it say if I've got an Apple in my hand? And what does it say if I've got a Nokia or a BlackBerry in my hand right now? These things do matter.
QUEST: There's one thing missing here. You know what it is. You know what's missing on your list.
FRAMPTON: What's that?
QUEST: Come on. The brand QUEST MEANS BUSINESS. What are we worth?
FRAMPTON: Do you know what? We tried it again, Richard, we just couldn't fit enough zeros on the end of the number. It was immeasurably valuable.
QUEST: Ah! Thank you.
QUEST: Jez Frampton, good to see you in New York. That's what is -- here's one other thing, heading back to our board of brands. You recognize these, of course. How about these instead?
These are colors that have been trademarked by companies trying to protect their very brands. On Monday, Cadbury's won a patents dispute for -- to patent this purple. It's called Pantone 2685C. And now, only Cadbury's can use that purple, the purple there. The UK judge ruled that you can validly trademark for chocolate products.
Pink is for Mattel, Pantone 219C, the Barbie pink. It's a registered trademark. How about this one? T-Mobile has Telemagenta RAL. Only they can use it. Now, you and I could use it, maybe, for some other project, but not for telecoms.
And we've got Home Depot with Pantone 165. How about that, finally? Pantone 18. Christian Louboutin has trademarked it. You can't -- only that color can be used by Louboutin for shoes. Try and use it for something else and you'll be in trouble. The colors that are trademarked.
Coming up next, the people versus JPMorgan. The bank stands accused of systemic fraud because of things that allegedly went on before they even owned the company that we're talking about. QUEST MEANS BUSINESS, we're back after the break with the attorney general.
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.
(BEGIN VIDEO CLIP)
QUEST (voice-over): The opposition Georgian Dream Coalition (ph) is celebrating a shock victory in Monday's parliamentary elections. The U.S. State Department has congratulated President Mikheil Saakashvili for his grace in conceding the election. He has been the dominant force in Georgian politics for nine years.
Hong Kong authorities now say 38 people were killed in Monday's collision between a ferry and a passenger boat -- excuse me -- the smaller vessel sank shortly after the crash. Police have arrested six crew members on suspicion of negligence.
To Syria, where the opposition says the regime is bombing several districts in Aleppo. A new pro-regime newspaper says the army's deploying additional troops to the city. The opposition's rejected a government call for dialogue, saying no Syrian will sit down with a member of the government responsible for murdering hundreds of innocent people.
Gunmen have attacked a student housing area at the Polytechnic University in northeastern Nigeria. An emergency official says at least 25 people are dead. The official says motives for the shooting yet are to be uncovered but may be connected with student politics.
The radical Islamic preacher is making a last-ditch effort to avoid extradition from the United Kingdom to the United States on terrorism charges. Abu Hamza al-Masri's lawyer says his health -- mental health, particularly -- is deteriorating. The British government says it is a delaying tactic.
(END VIDEO CLIP)
QUEST: The case is called People of the State of New York by Eric T. Schneiderman, Attorney General, and it is against JPMorgan Securities, who are the defendants. It's 31 pages long. JP is facing a lawsuit over alleged fraud that its former rival Bear Stearns, which it bought in a fire sale in 2008 in a government-backed deal. New York's attorney general, Eric Schneiderman, says Bear Stearns issued risk mortgage-backed securities, eventually leading to losses of $221/2 billion.
(BEGIN VIDEO CLIP)
ERIC SCHNEIDERMAN, NEW YORK ATTORNEY GENERAL: These representations were false, they were misleading, they were designed to conceal fundamental flaws and defects in defendants' due diligence system. Defendants had no legitimate basis for any of the numerous representations about the quality of loans and their securities, because their systems for insuring loan quality were a sham.
(END VIDEO CLIP)
QUEST: Now the New York attorney general's warning Wall Street banks there's more to come. Eric Schneiderman joins me now from Washington, D.C.
Mr. Attorney General, thank you for being with us. Firstly, look, JPMorgan bought this bag of fleas that was Bear Stearns, and now looks like they're going to be saddled with it. But seriously, you're not really going after JPMorgan, are you? You're going after the bankers that were Bear Stearns before that?
SCHNEIDERMAN: The conduct in this particular complaint relates to activities at Bear Stearns, EMC Mortgage and other firms that were ultimately acquired by JPMorgan chase. But the purchase included the assets as well as the liabilities and as you've indicated, the fraud in this case was really pretty flamboyant. And we do not think that it's in anyone's interest for us to give someone a pass just because of the chain of title of their firm. But I would also emphasize that this is being brought by my office, but I'm a part of a working group, federal-state working group created by the president earlier this year. There are other cases to come. We're not singling this firm out by any means. We have broad investigations going on in a variety of areas. So this is -- this is the first case, but there will be more.
QUEST: As I read the complaint -- and obviously a settlement or whatever may eventually sort it all out -- but as I read the complaint, it really does go to the very heart of the financial crisis, doesn't it? Bankers who shoved as many mortgages out the door to people who'd never be able to repay them for the purposes, as you make clear in the complaint, of fees at every -- they made money every which way and backwards.
SCHNEIDERMAN: Yes. It really is the heart of the crisis, because this is what drove the housing bubble up. This is what drove up the bubble in mortgage-backed securities and of course, it was the crash of those bubbles that really brought down the global economy. And we're still suffering from the consequences. It is clear from the evidence we developed, a lot of it internal evidence from Bear Stearns executives, evidence from third-party firms they hired to do due diligence, that their number one priority was getting as many loans as possible and that they would neglect quality in the interest of quantity because they were so desperate to keep their securitization machine fed, to keep churning out the mortgage-backed securities. This resulted in the increase in prices, which ultimately led to the crash.
QUEST: But what is you want from this? I mean, is it -- do you want to hear the sound of criminal proceedings and the clink of the jail door? Or is this about getting money by settlement and restitution? Or is this case of attempt -- not just locking the door after the horse has bolted, but trying to make sure not a new door is opened? Which is it?
SCHNEIDERMAN: Well, it's -- there really are several things that can be accomplished by this case. This is a civil action. It's not a criminal case, although it certainly doesn't preclude criminal actions. It relates to actually quite a bit more than $22 billion worth of potential liability. We're seeking disgorgement of all unlawfully obtained funds. We're seeking penalties. The investors in these securities were defrauded and have a right to compensation. But as you point out, it also is about setting the record straight, getting everything out in the open and sending the message that no one is above the law, that there's one set of rules for everyone. There will be accountability and as you point out, you have to create a deterrent to future misconduct. And if people think that the folks that committed the most flagrant and egregious types of mortgage fraud during the housing bubble can get away with it, it certainly creates a disincentive for them to obey the laws next time around.
QUEST: So, finally, the -- we've had this crisis of 2008, now and we've talked about it on this program solidly. We've also had the LIBOR crisis and the LIBOR scandal, which I'm sure you're distressingly familiar with as well. We continually discover the miscreants and misdeeds of the - - of those boom years. Do you believe we are fully understanding what happens, who was to blame and how we got to where we are today?
SCHNEIDERMAN: Well, I think we understand a great deal in the United States we had a very successful report by -- investigation report by a Financial Crisis Inquiry Commission, led by Phil Angelides, one of our senators, Carl Levin, conducted extensive hearings. There are quite a few private parties that have brought lawsuits related to the mortgage-backed securities fraud that took place. This is the first major action by a government actor that alleges not just fraud in one deal or two deals or 10 deals, but a whole pattern of fraud, that the entire process that was designed to protect investors by ensuring the quality of the loans was, in fact, a sham. I think it is very important to get this out in the open, to understand what happened because we're also, in addition to prosecuting those who committed these acts of misconduct, we are, in the United States, in the process of rulemaking. We're trying to draft rules (inaudible) to the Dodd-Frank legislation. And we have to make sure that we have a prudent set of rules that everyone can live by. The overwhelming majority of folks in financial services just want to make money for themselves and their clients. We have to have a clear set of rules that everyone can live by. And most importantly, we have to send a message that that set of rules will be enforced against everyone, no matter how big or powerful or influential they may be.
QUEST: And as you said, there's more to come. Many thanks, Mr. Attorney General, joining us on QUEST MEANS BUSINESS. Good to have you on the program --
SCHNEIDERMAN: Thank you.
QUEST: -- as always. Please, come back again and talk more about these important issues.
The attorney general of New York, joining me from Washington.
To the markets now and stocks are mostly lower. Take a look at that. Just off a little; let's not get too excited about it, down half a percentage point, 13,441. It was the timing of (inaudible) potential bailout. JPMorgan was down just about half a percent after what we've just been talking about -- I think you probably guess the reason for that.
Coming up next, adding a bark and a bite (inaudible). (Inaudible). We're going to introduce you to Stella, the dog with a nose for euros, in a moment.
(BEGIN VIDEO CLIP)
QUEST (voice-over): Time for the "Currency Conundrum" answer. Why is it difficult to actively value Iran's rial? The answer is A. The currency's not traded on global currency markets, only informal currency bazaars and exchanges. Makes it difficult to produce accurate figures for the value.
(END VIDEO CLIP)
QUEST: Talking of accurate figures, the Italian police now have a new helping hand, or at least a pull on a nose in solving their own currency conundrums, especially how much money is leaving Italy illegally, or at least not being declared as it should have been.
Ben Wedeman's met Stella, the sniffer dog, with a nose for cash.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: (Speaking foreign language).
BEN WEDEMAN, CNN CORRESPONDENT (voice-over): Stella is on the lookout, not for drugs or explosives, but rather cash. This 2-year-old Labrador retriever has been trained to sniff out large quantities of bills, euro, dollars, pounds and rubles, at Naples Airport.
Stella is a "cash dog," the latest weapon unleashed by Italy's Guardia di Finanza, or finance police, in their effort to crack down on that very Italian of traditions, tax evasion, a tradition which, by some estimates, deprives the government by as much as $340 billion a year. And in this era of austerity with governments scrounging for every last penny, the dog with a nose for money has its day.
WEDEMAN: Stella has earned her keep. Since the beginning of the year, she's helped the authorities here find more than 3 million euro -- around $4 million -- in illicit cash.
WEDEMAN (voice-over): Stella's partner, Sgt. Alfredo Giuseppe, proudly recalls her biggest find was 300,000 euro in the handbag of a Chinese traveler. The law allows you to travel with up to 10,000 euro, about $13,000 in cash. Beyond that, you must declare it to the authorities. And it's not just about tax evasion; the money smuggled out of the country is frequently put to no good.
"The undeclared money," says Lt. Michele Toschi, "is often illicitly earned here and is used to buy either narcotics or counterfeit goods in other countries."
On this day, Stella didn't sniff out anything out of the ordinary among those departing and arriving.
UNIDENTIFIED MALE: How much?
UNIDENTIFIED MALE: (Speaking foreign language).
WEDEMAN (voice-over): So the Guardia di Finanza showed us how Stella would find large quantities of cash, in this case, plastic bags full of shredded euro bills carried by one of their own officers.
For a reward, she gets to play with a plastic ball, a simple pleasure for the taxman's best friend -- Ben Wedeman, CNN, Naples.
(END VIDEO CLIP)
QUEST: The dog that can sniff out money.
Jenny Harrison can usually hear a $5 bill drop to 20 pesos with the wind in the opposite direction. Can't you?
JENNY HARRISON, CNN METEOROLOGIST: Yes, but you know the day they invent a dog that can sniff out a moth in a wallet, then you'll have them after you, won't you?
HARRISON: You will. You will. I know.
QUEST: I seem to have left me wallet at home.
HARRISON: Yes, I'm sure, I'm sure.
(Inaudible), I'm warning you now; when you come over to Atlanta soon, you -- we're going to get those moths freed. I'm going to get on a freedom moth project.
Anyway, look, weather conditions across in Europe, pretty nice, actually, and (inaudible) the rain has been across that region, but it's moving away. There's some warnings in place for a while as well because of the severity of the thunderstorms. But you'll see across the north of Europe it's the usually autumnal pattern. So rather unsettled; some scattered showers and pretty stiff winds as well across the northwest. But across the southeast of Europe, it is mostly warm and dry, not really bad elsewhere. But the rain that's been coming in not yet reaching western areas of Europe, just a few showers. But look at the U.K. and Ireland, some very heavy amounts of rain. It's (inaudible) moving but some pretty heavy downpour as you can see in the last 12 hours. The winds as well are pretty stiff across the southwest, Plymouth, 45 kph. Those are sustained winds, but that means some gusts easily at around 60 or 65 kph. But in actual fact, one such system comes through with the rain. It'll see blustery, but the winds won't be particularly strong. Having said that, do expect on Wednesday afternoon, maybe some delays in Brussels because of those strong winds up to 45 minutes. We've got a mix of cloud and rain elsewhere. But also American, Copenhagen, as that system comes through, the winds will pick up and that could lead to some delays. You can see that very unsettled picture all of that rain coming in with that next area of low pressure. And as for the temperatures, not great, 13 in London, a little bit milder in Paris at 17. And very nice in Rome with a high of 24 degrees Celsius. Finally, in the U.S., across the Southeast, the rain has pulled out, but still one or two problems up into the northeast when it comes to traveling, some delays -- ground delays mostly -- but 45 minutes the longest as you can see there. And then the heavy rain really working its way up into the northeast as we go through the rest of Tuesday. And eventually it does pull offshore, but not before depositing some pretty high totals, 102 mm in Natchez, Mississippi; Atlanta, 52. But the same system which actually brought that rain, look at this amount of rainfall, more rain in 72 hours across Texas than have seen throughout the entire 20 -- what was that? 2011. So all of last year. So three days' rain, more than last year's entire total, Richard.
QUEST: Many thanks, Jenny Harrison, at the World Weather Center for us this evening. We thank you for that.
Karen Urban (ph), who has just tweeted me, complaining about my shirt and tie and taste. She describes them as "just awful."
After the break, workers, bodybuilders and big corporate clients, it comes from the mind of a Millennial in a moment.
QUEST: Millennials, as you and I have discussed many times on this program, the generation that does things a little differently, Sam Bompas and Harry Parr take that to extremes. For the last few months, they've been planning a Mercedes product launch that, frankly, is unconventional. And now they have no idea how the company is going to react.
They are tonight's Millennials.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (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 are "The Millennials."
UNIDENTIFIED MALE (voice-over): In one of London's most prestigious shopping centers, it's drive-through D-day for Sam Bompas and Harry Parr. After three months of planning, the wheels are finally in motion. The burgers are cooking and the nerves are evident.
HARRY PARR, FOUNDER, BOMPAS AND PARR: I think you have to be nervous at the right moment, but it's good to be nervous.
UNIDENTIFIED MALE (voice-over): Getting to this point, though, has been a nerve-wracking experience, a roller coaster ride for these two young entrepreneurs. And we've followed them through it all. We saw them pitch their original idea to Mercedes.
UNIDENTIFIED MALE: That's the main course. The main course. It'll start (inaudible).
SAM BOMPAS, FOUNDER, BOMPAS AND PARR: It might have been a bit bold, been a bit too aggressive in the initial design. But you know, it's just a work in progress.
UNIDENTIFIED MALE (voice-over): We witnessed their optimism when faced with minor setbacks.
UNIDENTIFIED MALE: (Inaudible) it's not super sharp (ph). Like the logo looks very faded.
UNIDENTIFIED MALE: There's always an element of risk in the projects we do. This one introduces us to new risk, but not stuff that's insurmountable.
UNIDENTIFIED MALE (voice-over): From its concept, we saw their creativity come alive with hours of painstaking culinary research.
UNIDENTIFIED MALE: I think there's something really good we can do with these chicken poppers, maybe something more French would be nice. (Inaudible) snail in there.
UNIDENTIFIED MALE (voice-over): Here, every detail mattered.
UNIDENTIFIED MALE: This I love.
UNIDENTIFIED MALE (voice-over): Sleep didn't.
UNIDENTIFIED MALE: If you don't lie awake at night, troubled, tossing and turning before (inaudible) there's probably something wrong.
UNIDENTIFIED MALE (voice-over): Finally, a week before the deadline - -
UNIDENTIFIED MALE: Hello, Harry.
UNIDENTIFIED MALE (voice-over): Can the challenge of bringing all the details together, the pressure was clearly mounting.
UNIDENTIFIED MALE: Here at the action board are things we need to do. These are things we'd like to do. These are things that need to be done, (inaudible) suitcase -- don't have one yet. Great pinata's not quite finished.
UNIDENTIFIED MALE (voice-over): Pinata or no pinata, with two days to go, the project gradually began to take shape. And every part of Sam and Harry's Technicolor vision needed close scrutiny.
UNIDENTIFIED MALE: Yes, and then this goes (inaudible) like that.
UNIDENTIFIED MALE: (Inaudible).
UNIDENTIFIED MALE: And this (inaudible).
UNIDENTIFIED MALE (voice-over): Today, all their hard work is being put to the test.
UNIDENTIFIED MALE: (Inaudible) put this (inaudible) together.
UNIDENTIFIED MALE (voice-over): They're soaking up the atmosphere, breathing relief that their guests are enjoying every moment and so is their client.
WOLFGANG WUERTH, MERCEDES SPOKESMAN: I think the whole thing, how it combines live (ph) food and the carpet (ph) is really great. So I love the fact that it's a proper drive-through in a modern way, a little bit crazy, but inspiring.
UNIDENTIFIED MALE (voice-over): It seems their hard work has paid off. These Millennials have clearly earned the right to drink in their big moment.
UNIDENTIFIED MALE: There's a lot of work in the lead up to it. But then you learn so much when you're doing it. I mean, so the next thing you do is even better, even more outrageous.
UNIDENTIFIED MALE (voice-over): The doors are open; the client is happy and this double act can toast the unexpected success of another unlikely pairing.
Next week on "The Millennials" --
UNIDENTIFIED FEMALE: I want to be able to exhaust the possibilities (inaudible).
UNIDENTIFIED MALE (voice-over): Richard Quest sits down with a very opinionated Mili as they talk work, life and love, only on "The Millennials."
(END VIDEO CLIP)
QUEST: "Profitable Moment" next.
QUEST: Tonight's "Profitable Moment," in 1936, King Edward VIII was touring a desolate Welsh mining town and supposedly said, "Something must be done." When you look at the jobs picture in Europe today, the same sentiment must surely apply. Look at the level of Eurozone unemployment or euro unemployment up in the gold. It's only when you see these numbers that you see the scale of the jobs tragedy and the magnitude of the shame that should be felt by those who allow it.
In the United States, the differential between the worst state for employment and the best is just 9 percent. In Europe, it is 21 percent. Jobs are being created across the Atlantic and disappearing across the continent. The commission (inaudible) says that it's unacceptable; reforms must be implemented. But Europe's too busy choking on austerity to catch its employment breath and the (inaudible) growth are gossamer thin. Europe may be preoccupied with its economic crisis. If they cannot get people back to work, the price of a sovereign bond will pale into insignificance. It's a woe-filled picture and to quote the King, "Something must be done."
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable.
(BEGIN VIDEO CLIP)
QUEST: The headlines at this hour:
The opposition Georgian Dream Coalition (ph) is celebrating a shock victory in Monday's parliamentary elections. The U.S. State Department has congratulated President Mikheil Saakashvili for his grace in conceding defeat. He has been the dominant force in Georgian politics for nine years.
Hong Kong authorities now say 38 people were killed in Monday's collision between a ferry and a passenger boat. The smaller vessel sank shortly after the crash. Police have arrested six crew members on suspicion of negligence.
In Syria, the opposition says the regime is bombing several districts in Aleppo. A pro-regime newspaper says the army is deploying additional troops. The opposition's rejected a call for dialogue, saying no Syrian will sit down with a member of the government responsible for murdering hundreds of innocent people.
Gunmen have attacked a student housing area at the Polytechnic University in northeastern Nigeria. An emergency official says at least 25 people are dead. The official says motives for the shooting are yet to be uncovered but may be connected with student politics.
(END VIDEO CLIP)
QUEST: You're up to date. Those are the headlines here on CNN. Now live tonight, "AMANPOUR" with Ali Velshi.