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QUEST MEANS BUSINESS
Protesters Greet German Chancellor in Greece; Union Workers Protest in France; Ecofin Decisions; European Stocks Down; BAE-EADS Deal Breakthrough; Early Elections in Israel; Euro Falls Sharply; Make, Create, Innovate: Rubik's Revolution
Aired October 9, 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: Merkel's mission, teargas, and anger as the German chancellor visits Greece.
Mission improbable. One British MP tells me the BAE merger's a dangerous game just one day before the deadline.
And mission aborted. Felix Baumgartner's 37-kilometer free fall called off.
I'm Richard Quest. I mean business.
Good evening. Angela Merkel was met by rioting and resentment when she touched down in Athens today. As the German chancellor tried to reassure Greece it's still part of the euro family, thousands of protesters made it clear Mrs. Merkel is a relation they'd rather not have.
Police used teargas as they collided with some 25,000 protesters outside parliament. Many of them see Mrs. Merkel as the architect and enforcer of Greece's strict spending cuts, 7,000 officers deployed during the chancellor's six-hour visit.
On the streets, the rift between Greece and Germany was evident. Inside parliament, the talk was of unity.
(BEGIN VIDEO CLIP)
ANGELA MERKEL, CHANCELLOR OF GERMANY (through translator): If one country in the eurozone is not in good shape, we are all not in good shape. We have a joint interest to be in good shape. I'm firmly convinced the path, which is the tough path, will lead to success.
ANOTONIS SAMARAS, PRIME MINISTER OF GREECE (through translator): I think it is a fact that everybody in Europe, especially the countries in the eurozone, are united in our common currency. But all the countries that will help Greece realized all the sacrifices of the people in realizing there is a government that, on a daily basis, achieves all the targets that we are going to to.
(END VIDEO CLIP)
Now, CNN's Matthew Chance is in Athens and Diana Magnay is in Berlin in the German capital for us tonight. We start with Matthew, where the -- the scenes were disagreeable bordering on violent, but the leaders kept to their message.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, they did. It was almost looking at two different cities, watching the scenes being played out in the center of Athens earlier today, on the one hand, and then watching the television pictures being broadcast of Angela Merkel meeting the Greek president and prime minister here in Athens on the other.
On the streets, there were violent scenes at one point. There were fierce clashes between groups of the protesters that had turned out here. They threw bottles, they threw stones and rocks. There were scuffles with the police.
The police responded firing teargas, arresting more than a hundred people, or at least detaining more than a hundred people, trying to disperse the crowds, which they did very successfully. They've obviously accumulated a great deal of experience in dealing with these mass protests over the past several years, and they appear on this occasion to have coped with it pretty well.
It's very quiet in Athens this evening. The central square Syntagma is open again to traffic. The streets have been cleaned of all the rubble. And there aren't the anticipated riots going on into the night that many people feared would happen given the presence of Angela Merkel, perhaps the most hated figure in all of Greece.
QUEST: We'll come back to the troika and the bailout in a second. Diana Magnay in Berlin. Angela Merkel, perhaps the most hated figure in all of Greece, and we saw very disagreeable effigies and comments and Nazism and the like. How will that have gone down in Germany tonight?
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: Well, these are all symbols and effigies that we've seen before in the Greek press. Angela Merkel, the German finance minister Wolfgang Schauble, they have been characterized in this fashion before.
But obviously, this state visit has allowed for that really to come out in fore, and that's not going to go down very well, obviously, amongst the German people, who feel that they have gone beyond the call of duty to help their Greek compatriots in Europe and who feel that enough is enough and that the Greeks should really put their money where their very loud mouth is and start fulfilling their reform pledges.
Angela Merkel said that, in fact, they were doing a lot, that the path of reforms, the progress was being made, but that more still had to be done. But of course, those symbols are not going to go down well in this country who is providing the bulk of the loan guarantees and cash for Greece to go forward, Richard.
QUEST: That's the point, Matthew, isn't it? The Germans and the northern Europeans are paying the bills, and as the troika has to decide, probably will disperse the next set, Mr. Samaras has to keep Mrs. Merkel on his side whatever the noise on the street.
CHANCE: Absolutely, and that's what, from the Greek point of view, the Greek government point of view, that's what this visit of Angela Merkel was all about, essential for him to show that he has the support of Germany. Essentially, for him to have that German backing, when it comes to the troika deciding whether or not to disperse the next tranche of its bailout funds.
But I think there's another dynamic as well. It was also important for Angela Merkel. She was very hard line traditionally when it came to these austerity measures in Greece. That's softened somewhat in the past several months.
It seems to have been that the prospect of Greece leaving the eurozone was a gamble she's not prepared to take. It's too unpredictable in its consequences. She seems to have backed down on that pretty clearly.
QUEST: Finally, in to both of you, Di in Berlin, Matthew in Athens. We've got both sides of this story. Start with you, briefly, Di. The split in Europe on this issue is as big and brutal as we've ever seen it tonight.
MAGNAY: Yes. The split on whether Europe should stay -- Greece should stay within or outside of the eurozone, you mean. And that actually is reflected also within Angela Merkel's ruling coalition. There are voices with her Liberal Democrat party -- partners, there are voices in the Christian Social Union who say that, in fact, Germany should be preparing -- Europe should be preparing -- for a Greek exit.
So again, very, very split. And as Matthew was saying, it's really in the last few months that Angela Merkel has changed her tune and said decisively, no, Greece must stay within the eurozone, which means that she believes that the prospect of it leaving, the contagion that that could cause is too much for Europe to be able to deal with.
QUEST: Matthew, you have the last word.
CHANCE: At least now, they both -- exactly. At least now, they both want the same thing. It's pretty clear, the symbolism of this visit, both the Germans want Greece to stay in the eurozone, and Greece wants to stay in the eurozone. So, at least they're on the same page now.
QUEST: Matthew in Athens, Diana Magnay in Berlin. Bot sides of the story, we're in the right places. Thank you both one and all.
There were also protests in France today. If you'd join me in the library, you'll see these were -- some of these scenes, as we saw, disagreeable scenes. Union leaders and -- workers, sorry, union workers -- once the core supporters of Hollande's socialist government, now marching through the streets against them.
They were protesting France's high unemployment, stagnant economy, budget trimming, austerity measures that we've talked about often on this program. It was the first France national protest since Mr. Hollande took office in May.
And also, in Luxembourg, Ecofin, that's the 27 finance ministers of the European Union, 11 states have now signed up for the financial transaction tax. A draft decision is expected in November. That, of course, is disagreed by the UK, the city of London.
Another year for Portugal -- allows it longer to meet its deficit targets. That, of course, we knew that was coming, but now Ecofin has signed off on the troika's agreement.
And Athens one of the very few markets, perversely, that actually gained. Otherwise, losses in London, Frankfurt, and in Paris.
So, after the break, a dramatic day in what may well be the merger -- never mind the year, perhaps even the decade. There's been a breakthrough in the deal between BAE and EADS, and we'll hear why some politicians still oppose it. QUEST MEANS BUSINESS, we're live. Good evening.
QUEST: Britain and France have agreed to terms of the merger between BAE Systems and EADS. The two companies' directors have spent the day discussing the deal, and there are still plenty of parties who are not yet onboard, including Ben Wallace, a UK lawmaker who wrote to the British prime minister David Cameron expressing concern over the plans.
Mr. Wallace is in Washington. He's lobbying US senators. And on the line, I asked him, as things stand tonight, does he see this as a deal he wants to happen?
BEN WALLACE, UK CONSERVATIVE PARTY: I'm not against any deal. I'm a free marketeer capitalist. I don't like a British private company being taken over by another company that has a significant shareholding owned by three governments: the Spanish, French, and Germans.
And I think Britain is doing the right thing at the moment in the British government in trying to seek to reduce as far as possible that shareholding.
QUEST: Do you have any hope that that is going to be the outcome? Because if it is not the outcome, you are in favor of this deal collapsing.
WALLACE: Well, I think what I want is for my constituents to be secure in their minds that their businesses that they work for, BAE, and also the subcontractors that are all over Lancaster, are safeguarded from political interference.
So, if that political interference can be removed from the process, then I would not object to it. I wouldn't, perhaps, feel it's consistent with the traditional line of BAE management over the last few years. But I would certainly live with it and do what I can.
But it's very, very important that BAE's American business is not threatened by this merger, and I'm sure the government is now doing its best to make sure.
WALLACE: But the question we have to ask ourselves, and it's a very important question to ask: why is it Germany and France are so worried about their shareholdings if -- unless they just want to interfere? If you are deciding you don't want to interfere with a company, why does it matter what your shareholdings are if you're the French or German government?
QUEST: Let's talk about why you're in Washington, because BAE has certain very defined, very specified agreements with the US, which allows it to take part in highly-classified contracts that could be at risk. Are you persuading them, or are they telling you in Washington?
WALLACE: Well, I'm here to listen to their concerns, if they have any, and to try and find out what they would like as safeguards.
The irony about my trip to Washington is I was here five years ago, sponsored me and a number of cross-party MPs by the defense industry and supported by the then British government, to lobby the American government to get Britain a very special treatment separate from France and Germany and other European competitors.
It's rather ironic that I'm now back here, meeting some of those same people saying, what do you think if that doesn't really matter anymore, if France and Germany are now part of the equation?
QUEST: And that is Ben Wallace, talking to me on the line from Washington. The deadline for the deal is Wednesday, 5:00 PM London time. The British defense secretary says the two companies will announce before markets reopen tomorrow whether or not they are extending the deadline.
Jim Boulden now takes us through what needs to happen before this deal really takes off. Before you -- off the fence, Jim. Are they going to go for a deadline extension?
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: It seems very likely that they will, because these board meetings have been going on all afternoon, and all they have to do is make the decision that it -- the governments have done enough to allow these two boards to go for an extension, that would be another 28 days.
Because government interference is one of the barriers, here, and the worry was, of course, that the French and German governments would have too many shares in this, and that would upset BAE System shareholders.
But the defense ministers of the UK, France, and Germany were talking in Brussels today. And Philip Hammond, defense secretary here, said our red lines are well-known, other government's red lines are well-known. Now it's up to the companies to make that decision. We should be hearing about that tomorrow morning.
There was a lot of worry about government interference. The UK said we will not allow France and Germany to have that much interference. So, that may be sorted for now.
The second question was jobs. The companies say this is not a merger about significant job losses. In the UK, they want to make sure that defense jobs and expertise stay here, another red line for the British government. German unions are worried that jobs will be lost there because most of the work is done in France and the UK.
Now, the UK -- the headquarters is likely to be in France and the defense headquarters likely to stay in the UK. So, the UK and France probably happy about this one. Germans were not happy just a few days ago.
Investors still don't seem to be happy at all. For instance, Invesco says there are significant reservations to this. They own 13 percent of BAE shares. They're still worried about government interference, and they're still worried about the loss of a dividend.
And there's a lack of information right now that could actually be overcome once these two companies decide they are going to merge, if that's the case, and then investors will get a lot more information. Until then, they think they just don't know enough about it yet.
QUEST: OK. You and I have covered more than our fair share of mergers. I can't remember one quite as bedeviled --
QUEST: Politics --
QUEST: -- investors, ownership, headquarters.
BOULDEN: We're stuck between what we used to have and what Europe wants to have in a single market, isn't it? They want to be able to have a single company, a single entity here that can compete with the likes of a Lockheed-Martin or a Boeing.
But we're still stuck back in the 70s, aren't we a little bit, with these shareholdings? Even the UK will still have a golden share.
QUEST: There's a difference between a golden share and a stake?
BOULDEN: Yes. Now, maybe they can have a -- golden share means they could say -- they could veto --
QUEST: Yes, right.
BOULDEN: -- a takeover, and they could veto the closure, let's say, of the submarine base manufacturing here in the UK, which would lose tens of thousands of jobs. But still, these companies want to have -- this company wants to be able to say we are a private company with no government interference.
QUEST: And Jim's the man who'll be watching it at great laborious length. Good to see you, Jim.
All right, now, let me update you on some news that's happened just in the last few moments. It's announced from Israel that the prime minister, Benjamin Netanyahu, has announced he will seek an early Israeli election, likely in January or February.
He said in a televised statement, the prime minister, he had reached the conclusion because he could not reach a national budget with his coalition government. Quote, according to Reuters, "I've therefore decided for the benefit of Israel to hold elections now and as quickly as possible." That is likely to be early in the new year.
A Currency Conundrum for you. As the IMF and World Bank meet in Tokyo, my question is, what year is typically displayed on Japanese yen coins? Year of mintage, year of current emperor's reign, year of the current emperor's crowning?
The euro is sliding sharply. It's lost more than three quarters of a percent against he dollar. The single currency is down against the yen. Those are the rates --
QUEST: This is the break.
QUEST: The IMF's chief economist says the debt crisis in Europe is a complex puzzle. He actually had something in mind rather like this. Very complicated indeed. You get one side right, and then realize the rest is a big mess.
Take this yellow bit, for example. I've nearly got it. And -- but -- well, you can imagine. You've pinned these things, Rubik's Cube.
For our new series, Make, Create, Innovate, we sent Nick Glass to meet the man behind one of the best-selling products and, I might add, a product that I've singularly failed to ever manage to make any progress with at all, in history.
NICK GLASS, CNN INTERNATIONAL CORRESPONDENT: This is a stainless steel sculpture of the world's best-selling toy here in a park in Hungary. We know it better from the handheld version. And hundreds of millions of these can be found around the world.
GLASS (voice-over): It's named after the professor who first dreamt up the puzzle in 1974, although against his wishes. Erno Rubik didn't really want to be famous.
ERNO RUBIK, INVENTOR, RUBIK'S CUBE: I was not keen to promote my name, but made a few more interesting than myself.
GLASS: The Rubik's Cube, the toy of the 1980s, is now enjoying a revival, with 7 million sold last year.
RUBIK: The relationship between people and the cube as an object, it remained the same.
GLASS: A professor in interior design, Rubik first used the cube as a teaching aid.
RUBIK: I believed the most characteristic part of the cube is the contradiction between simplicity and complexity. Personally, I loved geometry, because geometry is the knowledge of how the whole universe is structured.
GLASS: The three-by-three cube consists of 27 cube faces. Color- coded, these can be arranged in 43 quintillion different ways. But there is only one solution.
GLASS (on camera): Did you think you had a marketable toy?
RUBIK: I had the feeling. It's something that is very simple. It can be manufactured easily and can be a product that's available for others.
GLASS (voice-over): It went international in 1980.
RUBIK: The cube made some kind of very exceptional height in the first two years, sold more than 100 million cubes. That is a very, very unusual thing in the toy market.
GLASS (on camera): What is the internal mechanism? What makes it possible to rotate like this?
RUBIK: The best thing is to discover, take it apart.
GLASS: It's kind of magical, but it's also -- it has a mechanism.
RUBIK: Yes. And a very simple mechanism. And because of that, there was potential to have mass production. So, it's a cheap product. Simple.
GLASS: It has a beauty to it.
RUBIK: Yes, it is.
GLASS (voice-over): The last few years have seen a rise in speed cubing competitions, demon cubers racing against each other and the clock. It's been proved that every cube can be solved in surprisingly just 20 moves or less -- if only it was that easy.
Erno Rubik himself cannot compete with the young guns. It took him a month to crack it way back in 1974. And now?
GLASS (on camera): Are you a good Rubik Cube player?
RUBIK: It -- for me, it was about one minute of my time when I was practicing. And the actual world record is 5-point-something seconds. Speed cubers usually are not my age. They are younger than I was when I made the cube.
GLASS: Most toys come and go, but not Rubik's Cube. It's now almost 40 years old, and it's here to stay.
QUEST: In that report, you heard the phrase "quintillion" used. That is 18 zeroes. I can honestly say I've never completed one of these at all.
Erno Rubik, famously media shy, and if you'd like to read a transcript of that interview in full or watch it again, you can find it at cnn.com/makecreateinnovate.
I told you earlier what the IMF's chief economist called the debt crisis in Europe. We'll have Olivier Blanchard's full interview with CNN after the break.
QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in a moment. This is CNN, and on this network, the news always comes first.
It's been announced Israel's prime minister is seeking an early election. In a televised statement, Benjamin Netanyahu said the coalition government was not able to agree on a national budget. No date's being set for the election, though Mr. Netanyahu said he would like to see an election held in about three months.
President Hugo Chavez has been speaking from his palace in Caracas. He's riding high on the heels of Sunday's election victory. These are live pictures coming to us now at CNN. Voters in Venezuela have just handed him a third six-year term. The win will allow Mr. Chavez to push ahead with what he's calling a socialist revolution for the 21st century.
The German chancellor Angela Merkel received a decidedly mixed greeting today on her first visit to Greece in some years. Mrs. Merkel met the top Greek officials, including the prime minister, who said he was welcoming a friend. Mrs. Merkel said Germany's firmly committed to Greece's recovery and helping to keep it in the eurozone.
(BEGIN VIDEO CLIP)
(END VIDEO CLIP)
QUEST: From some 25,000 protesters, it was a very different message for the German leader. Teargas, bottles, rocks, and fists flew through central Athens as protesters clashed with police in huge demonstrations. They blamed the German chancellor for the painful austerity measures which have been inflicted upon Greece.
A Syrian jihadist group called the Al Nusrah Front has claimed responsibility for today's car-bombing at an air force intelligence compound. It's the same group that said it was behind a wave of suicide blasts last week in Aleppo that killed dozens of people.
QUEST: The International Monetary Fund says Europe and the U.S. are at risk of sliding back into recession. The IMF is cutting its global forecast for this year and next. Growth is now expected to be 3.3 rather than 3.5 -- and that's global growth. Next year could be even worse, especially in the U.S.
The IMF says the so-called fiscal cliff could cause a new recession if it's not addressed. The fiscal cliff is the big problem. The Eurozone has to act, too. The fund says the bailout fund, the ESM, in which, in their words, "must intervene" to help banks and sovereigns. The report's author, Olivier Blanchard, told our Andrew Stevens the risks may be small; the consequences could be huge.
(BEGIN VIDEO CLIP)
OLIVIER BLANCHARD, CHIEF ECONOMIST, IMF: I think a recession is not very likely except for two possible (inaudible) risks. The first one is a fiscal cliff in the U.S. If for some reason we actually jump all the way down the cliff, this would be an enormous fiscal contraction. It would be a U.S. recession. God knows what would happen to the world.
The other, which probably a slightly higher probability, is that the Europeans don't quite get their act together. They have promised a number of things; they have started putting in place a number of things. But whether they actually implement it is not absolutely sure.
So that's the uncertainty. If this happened, you can think of some of the things we've seen in the recent past, except worse; that could also trigger a recession.
ANDREW STEVENS, CNN CONTRIBUTOR: OK. Now the assumption, the working assumption in the IMF at the moment is that the euro crisis will be contained, controlled and the fiscal cliff will be avoided.
What gives you that confidence?
BLANCHARD: Confidence in human nature. I think on the fiscal cliff, I think it will be so obvious that it has to be avoided that it will be avoided in some form. So we may fall a bit, but then I think things will happen.
In Europe, my sense is the same, which is that, as things get bad, what we've learned in Europe is that this gives policymakers an incentive to actually do what they need to do. They do it. So my best guess is in both cases, we may lose a bit of sleep. But in both cases, my guess is we'll avoid the catastrophe.
STEVENS: Do you think the ECB announcing the bond purchases was a sea change? Have we now hit the bottom of the euro crisis?
BLANCHARD: We could well. I mean, but they have put in place is an essential ingredient of what is needed. Now clearly, you know, at this stage, it's not used. It requires the countries to actually ask for it.
My guess is as long as interest rates are relatively low, these countries are going to be reluctant to do it. If for some reason we were starting to see an increase in interest rates, then I think the countries would want it. And then the ECB really has --
STEVENS: -- be able to deliver it.
STEVENS: There is still a lot of talk, a lot of expectations that Greece eventually will have to leave and we are seeing at the moment a failure for Greece to meet its commitments to the bailout package, having given time, but it doesn't seem to be closing the gap there.
How confident are you that Greece will meet its commitments and stay within the Eurozone?
BLANCHARD: We don't know yet. At this stage, (inaudible) clear that Greece has very, very tough job to do, right? So at this stage, we're trying to see whether we can put together with the Greeks, with the Europeans, a program in which it's feasible. We don't ask the Greeks to do anything crazy, anything that they cannot do.
They -- that is sustainable so that they don't run debt levels which clearly they could never repay. And the financing is there. And all the discussion is about whether there is a way. I hope there is a way. This is what's being discussed. We'll see what happens.
(END VIDEO CLIP)
QUEST: That's Olivier Blanchard, the chief economist at the IMF.
Notis Mitarachi is Greece's deputy minister of development, currently in New York on a mission to attract investment to Greece. The minister joins me now.
And good to see you, Minister. Thank you for taking time.
We start, first of all, come to why you're in New York in a second. But let's just start.
The -- do you -- the welcome given to Angela Merkel today in Greece shows the very deep resentment by the Greek people at the austerity and what they perceive as the unfairness of the German position (ph), doesn't it?
NOTIS MITARACHI, GREEK DEPUTY DEVELOPMENT MINISTER: This has taken an unprecedented fiscal effort, Richard. We've seen our budget deficit cut all to half in two years. We're seeing the budget this year meeting its targets, and that's very positive.
We're seeing Greece having the lowest expense (ph) to GDP versus any other Eurozone country after all the measures. Of course, after six years of economic recession at unemployment 25 percent, there is natural you see some resentment. But it's very clear we welcome Merkel as a friend. Her visit today demonstrated the European --
QUEST: Well, hang on, hang on, hang on.
MITARACHI: -- were pretty limited.
QUEST: Hang on, Minister. You say you welcome her as a friend, but there is a groundswell of support that does believe in Greece that these have been -- these measures have been inflicted upon the country by another European country. Fair or not, that's what people believe.
MITARACHI: People see the hardest and fastest (inaudible) acceleration ever attempted in world history in six years of recession, which have never happened before. And that naturally causes disappointment.
But on the other hand, we're fully committed to the success of the program. Greece's role, it is within the Eurozone, and we're taking all the (inaudible) measures as fast as possible to make sure that we get back on track with the program.
This year numbers, if you look at the fiscal deficit this year, we're back on track. Some structural (ph) reforms were late and were -- we're catching up now and we're seeing, in the end, things will work fine.
QUEST: So why does the Eurozone and the IMF yesterday in their meetings, why do they still hint very darkly that Greece needs to live up to its words? If you look at what they said yesterday, they say, acting is acting.
Greece needs to live up to the commitments. Now I understand and I accept that the huge amount that you have already done, but there are still dark suggestions that not enough and more needs to take place.
MITARACHI: This government has been in office (inaudible) 110 days, and we have cut staff (ph) a lot in these 110 days. I think if you hear any comments from European or global leaders, they all now recognize the willingness of this government to make the program a success. So we are catching up.
There's something that still need to be done, but now have specific timetables. And I think we're on track. We have agreed (ph) around 80 percent, I can give you a broad number, of the increment of fiscal measure required, and everybody recognizes that.
We need, in the next few weeks, as fast as possible, to close the gap with the remaining measures, agree them with the troika. But on the other hand, I have to say that if we don't put liquidity back into the market, if we don't see investment returning in the Greek economy, six years of recessions are very hard to tolerate.
MITARACHI: Only the cyclical element of the deficit will only recover with new investments. And that's what we're trying. We're trying to demonstrate to the global world that we are serious about our fiscal commitments.
We're serious about our structural commitments. We're going ahead with privatizations. Only last week we've done the best one and it's a wave of privatization coming. All that are done in order to rebuild confidence. Rebuilding confidence will remove the cyclical part of the deficit --
QUEST: All right.
MITARACHI: -- which is now the primary problem.
QUEST: So let me ask you, as you put that point to the people you're meeting in New York, what do they say back to you?
MITARACHI: We're seeing investment (inaudible) returning. It's early days. I'm not going to say anything optimistic what's -- it's a lot of hard work that needs to be done. But people are seeing recovery.
And actually, the Athens stock exchange has been one of the best performing markets in the world this year. Some people are seeing early signs of commitment, and that's what's important for us now, to demonstrate our commitment to the success of the program. And that will bring the early investors in.
QUEST: Minister, good to have you on the program. Thank you. Have a good -- have a successful --
MITARACHI: Thank you so much.
QUEST: -- (inaudible) New York. And we thank you as always for taking the time to come (inaudible) on QUEST MEANS BUSINESS.
Now, one bit of news to bring you, the Feds -- the Federal Reserve -- it's a long and complicated press release, but the Federal Reserve will begin conducting stress tests into the final rules of the Dodd-Frank Act into 19 bank holding companies that they have been stress testing, which includes all the big one, Bank of America, JPMorgan, Citigroup, Goldman and all the others.
The stress tests are required by U.S. law; nothing exciting is expected in the results that we know of anyway, but those stress tests are going to take place. This is the market at this hour, down 87 points at the moment.
The Dow is only 4 percent from its all-time high. We have the earnings season beginning tonight. Alcoa (ph), which will kick off the earnings season, always does, amongst the worst performers today, HP and Microsoft were down as well.
Now with less than 30 days to go until the presidential election in the U.S., some national polls are showing Mitt Romney now leading President Barack Obama (inaudible). Tonight, CNN's Wolf Blitzer interviews the Republican presidential candidate. You had to stay up a bit late. It's at 11:00 pm in London, midnight in Berlin, and you'll see it obviously in the hours ahead on CNN.
Overworked, under pressure and falling ill, how long hours are putting health at risk in Taiwan, after this.
QUEST: We're shining the spotlight on Taiwan this week, taking a look at the export, at businesses that have powered its economy's robust growth. In CNN's Outlook series, we're going to focus on some of its best-known and less well recognized industries.
So we'll look at the export market for the island's flagship computer and I.T. industries. the growing competition among airlines for business in Taiwan, the surging bicycle manufacturing industry and we'll look at how the government is trying to revive a long neglected indigenous culture.
Also examining some of the challenges, including intense competition, the need to focus on more high-end products and a culture of painfully long working hours.
And so on many workers feel under pressure to labor to the point of exhaustion and beyond. Paula Hancocks met one family living with life- changing consequences.
(BEGIN VIDEO CLIP)
PAULA HANCOCKS, CNN CORRESPONDENT (voice-over): Wang Chi-Mei helps her 40-year-old son, Guo underfed (ph) as she has done every day for the past six years. Guo suffered a stroke at work and has been in hospital ever since, suffering from pulmonary vascular disease.
"For six months before my stroke," he says, "I was working 18 hours a day and sleeping just four. I was under so much pressure from my company, as they claimed $50,000 was missing from the account I was handling, and I have to try and fix it."
When he collapsed, he says his colleagues carried him to a meeting room and left him there for three hours before taking him to hospital, a delay Guo's doctors believe worsened his condition and made it inoperable.
The government last year ruled his stroke was due to overwork, but his company is legally challenging that.
Guo's mother is angry that, after 15 years with this company, the only time anyone came to visit was to ask about work.
"Over the past six years," she says, "I've been trying to save my son's life, trying to help him retrieve his memories. I've been looking after him day and night. He takes a lot of care."
HANCOCKS: Guo's overwork case is certainly not the only one going through the courts at the moment. Just consider the annual working hours here. On average, Taiwanese employees work 20 percent longer than their counterparts in the United States or in Japan and more than 35 percent longer than those in Germany.
HANCOCKS (voice-over): Health care professionals took to the streets earlier this year to protest what they call a sweatshop health system, claiming overwork puts their patients in danger. The government is so concerned about the problem it recently started subsidizing free clinics for workers concerned that their health is failing due to long hours.
Dr. Guo opens his doors every Wednesday morning for occupational disease and is seeing more and more patients arrive.
DR. GUO YUE-LEON, NATIONAL TAIWAN UNIVERSITY MEDICAL CENTER: It's probably not because the number are increasing. But people are more recognizing the condition. So those who have a heart attack or have a stroke and he or she realize that working hour might have caused the problem.
HANCOCKS (voice-over): More companies are now starting to acknowledge the problem of overwork, encouraged by the government. But for Guo, any changes come too late. He has no idea when he'll be able to leave hospital and go home to his wife and two young children -- Paula Hancocks, CNN, Taipei, Taiwan.
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QUEST: Now for more information on Taiwan and our coverage this week, CNN.com/outlook.
The daredevil Felix Baumgartner has postponed his attempt to break the sound barrier. We will find out why next.
(BEGIN VIDEO CLIP)
QUEST (voice-over): The answer to today's "Currency Conundrum," we asked you what year is typically displayed on Japanese yen coins? The answer is the year of the current emperor's reign. Most countries displayed the year of mintage; in Japan, the coin is minted in 2009, it will bear the date Heisei (ph) 21, meaning the 21st year of Emperor Akihito's reign. Now you know.
(END VIDEO CLIP)
QUEST: Felix Baumgartner has called off his attempt to become the first person to break the sound barrier unaided. The Austrian skydiver was due to have leapt out of a balloon 37 kilometers above the Earth about now. Brian Todd joins me from the site in Roswell, New Mexico.
Quick, simple question: postponed or canceled?
BRIAN TODD, CNN CORRESPONDENT: Postponed for now, Richard. They have told us that this will not come off today, obviously; it very likely will not come off tomorrow on Wednesday, because the weather is not optimum and they need to give the crew members and the support team here some rest. They believe Thursday is a more optimum day to try to carry this out.
But Thursday, the weather conditions are a little uncertain as well. So they're aiming for Thursday right now so we can say right now it is postponed. A real sense of disappointment here in Roswell. Just a little over an hour ago, they had to abort this mission.
Felix Baumgartner was given the word; he had to then basically take his components out of his suit and then disembark from the capsule, be taken back to an Airstream container not far from the capsule and then back to where he's being sequestered.
So he's in a waiting game right now, as are we. And the team is assessing everything right now, the mechanical situation, the weather. We saw just before this was aborted pretty much the reason why.
The balloon, the massive balloon that was to take him to 120,000 feet above the surface of the Earth started getting whipped around on the ground by a gust of wind. It created what they called a spinnaker effect, and that balloon was compromised.
That balloon is now spent; it cannot be used anymore. They say they have a backup balloon, but they have only one backup balloon. So this is clearly what makes the next phase of this so critical. If that backup balloon gets compromised, this mission could be postponed indefinitely, Richard.
QUEST: This is absolutely fascinating. We're all extremely envious of you being there, because it's one of those stories everybody is -- everybody is talking about it, Brian. And I can't quite work out why we're so fascinated by it. I mean, besides the obviousness of human endeavor.
TODD: Well, I think that's really the crux of it here, Richard. I mean, if you look at what -- where the space program, where the aeronautical exploration is at this moment, you know, manned space flight has been discontinued for now. That won't happen again for, you know, several years at least as far as NASA is concerned.
So you know, this is really what's generating a lot of excitement.
Also the fact of, you know, the manner in which Felix Baumgartner is going to be doing. He's going to be stepping out of a capsule and basically flying through the stratosphere wearing nothing but a high pressure suit, a helmet and a parachute. That has some real derring-do, as they say, to it. And that's really what attracts a lot of interest here.
QUEST: Brian Todd, who is in Roswell and very likely going to be there for the foreseeable future. We thank you for joining us tonight on QUEST MEANS BUSINESS.
Right. Jennifer Delgado's at the World Weather Center.
So what was it? What did the dastardly deed here?
JENNIFER DELGADO, AMS METEOROLOGIST: Oh, it was actually the wind gusts. We saw that wind gusting up to 25, and that was enough to damage that balloon. Now keep in mind that balloon is roughly 10 times thinner than, say, a sandwich bag, something that you pack the kids' lunch in. It is just that sensitive.
Now you see Baumgartner there, and I'm sure everybody was getting very excited for this big event. But as I take you back over to our graphic here, wind conditions right now are calm; it was just that gust, and that gust was enough to do the damage. Reportedly, heard that balloon cost a quarter of a million dollars. So certainly that was an expensive damaged material indeed.
As we go and talk a bit more about this mission to the edge of space and Baumgartner's trip, well, as we talk a bit more about the weather conditions, and absolutely has to be clear. The winds must be calm and of course no precipitation.
The balloon roughly 0.02 mm thick, very thin and very, very precious indeed. As we talk a bit more about the atmosphere, and as we go up, we talk about the troposphere. And this is where all the (inaudible) happens, the troposphere.
And the temperature also starts to cool as we go into tropopause, the boundary layer, well, notice the balloon goes up and the space capsule. And we start to see the temperatures warm, of course, as we get higher.
Well, this is how high the balloon is expected to go. Now keep in mind the attempt is going to be roughly 37 kilometers. That is more than three times higher than what you'd see an average aircraft cruising. They usually cruises at about 9.17 kilometers, 30,000 feet. And then, of course, weather balloons, they go a bit higher.
But (inaudible) average thunderstorms, we're talking 15.3 kilometers. So this is going to be a big story. And as we go through tomorrow, tomorrow in our estimation, it looks like it's going to be the better day for weather wise.
But we still have to talk about those winds. They like to do that in the morning before the wind starts to pick up and we start to see that mixing. As we go into Thursday into Friday, we have a 30 percent chance of rainfall.
So that could certainly put a damper on things. Now as we look across parts of Europe, we are looking at rain out there, spreading through southern parts of England as well as into France. You can see all along the Alps.
Now as we go through Wednesday, we are going to see a big cooldown shifting through, and that means, yes, fall is in place, high temperatures for your Wednesday, generally will be in the teens, just a few 20s down toward the south for London, Richard, 16 degrees. It's a good thing that that balloon wasn't going to take off in England. It would never get off the ground there.
QUEST: Thank you very much, Jennifer Delgado at the World Weather Center.
Now I'm about to set off on adventures of my own. Starting this week, I'll be traveling across the United States. You'll see the reports later in the month. And I'll be staying in touch. The (inaudible) address @RichardQuest, where you and I can continue our dialogue as I make my way from Chicago to San Francisco on the train.
"Profitable Moment" is next.
QUEST: Tonight's "Profitable Moment," on the program you heard from the founder of the Rubik's Cube it may create innovate. I have always found this infernal contraption to be deeply frustrating and, frankly, have never, ever managed to do it. I have neither the patience, the inclination, the desire to even try.
You might get one side perfectly right and then you mess it up and the trick of getting all the sides at once has always eluded me. The same could be said for Eurozone leaders and their crisis. Things may be getting slightly better for Germany or another country and then the same definition cannot be said for Greece, Spain, Portugal or even France, for that matter.
The protests today evidence enough, getting it right, it's this delicate step-by-step process, patience, ingenuity, compromise. The IMF chief economist, Blanchard, said about the crisis, "If a complex puzzle can be rapidly completed, one can reasonably hope the worse is behind us," which is more than I can say for doing this.
And that's QUEST MEANS BUSINESS for tonight. I'm on the road for the next 10 days. So whatever you're up to, I hope it's profitable.
QUEST: The headlines at the top of the hour: Israel's prime minister seeking early elections. In a televised statements, Benjamin Netanyahu said the coalition government was not able to agree on a national budget. There's been no date set. But Mr. Netanyahu said he would like to see elections at about three months.
President Chavez has been speaking from his palace in Caracas. He's still speaking, live pictures. Moments ago he said voters in Venezuela have handed him a six third-year term (inaudible) allows him to push ahead in what he's calling a Socialist revolution for the 21st century.
German Chancellor Angela Merkel, received a decidedly mixed greeting today on her visit to Greece. Ms. Merkel met with top Greek officials, including the prime minister, who said he was a welcoming friend. Ms. Merkel said Germany's firmly committed to Greece's recovery. In the streets of Athens, 25,000 protesters demonstrated their anger over austerity which they blame on the chancellor.
And a Syrian jihadist group called the Al-Nusra Front has claimed responsibility for today's car bombings at an air force intelligence compound.
Those are the news headlines. You are up to date. Now live from New York and "AMANPOUR."