Return to Transcripts main page
QUEST MEANS BUSINESS
US Jobs Milestone; US Markets Down; Quantity Versus Quality; Friday Fall; McDonald's Shuts Down in Crimea; Crimea Crisis Business Impact; Qatar Airways Lands in Philadelphia; Turkey Twitter Ban; Erdogan Rate Cut Warning; "Bad Bank" Sells Assets
Aired April 4, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: The bell is ringing the end of the trading day on Wall Street. When you see the numbers in a moment or two, you might very well ask what happened? Hit it! Yes! It is Friday, it's April the 4th.
Tonight, steady as she goes. The US jobs market keeps the momentum going -- just about. The market didn't like what it saw.
Also, McDonald's shuts shop in Crimea and the reason, operational, says the company.
Also, Mozilla's dilemma. We ask if politics has a place in the corner office of the C Suite.
I'm Richard Quest. It may be Friday, but I still mean business.
Good evening. We start tonight with the story of the United States, which has reached an employment milestone. The private sector has finally recovered all the jobs which were lost in the 2008 crisis. Join me at the super screen and you'll see exactly the number. Bring it in and you'll see how many jobs were created in March.
The US economy added 192,000 non-farm jobs. It's a little short of expectations. The unemployment rate, calculated by a different matrix, is still holding steady at 6.7 percent.
The important point about this is, though, all the other revisions, January was revised up, February was revised up, and at 192,000 jobs, you're starting to get to the number that makes meaningful reductions in unemployment, even though the 6.7 didn't budge.
All the gains were in the private sector. Government jobs were lost. Here's a graph, obviously, that shows the roller coaster. Six years on from the financial crisis, and you can really see the recovery. This is the jobless numbers. This is how they were losing. Up they go again to the sort of numbers of the total people out of -- or the total of people out of work.
Now, Friday was a day full of drama on the markets. The Dow, the S&P, they all had intra-day highs on the jobs number. They were swiftly wiped out as investors turned against the stocks. Just -- this is what the market closed down.
And interestingly -- interestingly -- it's just at 11:00 where the market falls, and those falls steepened throughout the course of the session. So, what were the factors? Alison Kosik will have more from the New York Stock Exchange in just a moment.
I asked the US labor secretary, Thomas Perez, when he looks at the job numbers that we saw if he was satisfied.
THOMAS PEREZ, US SECRETARY OF LABOR: It's moving in the right direction. We need to pick up the pace. We see very promising trends here. Construction is doing well. Auto sales last month were the highest since February of 2007. The average worker on an assembly line is working more hours or as many hours as ever. It's at record numbers, and we've been keeping records since 1945.
So, a lot of positive trends, but undeniable a lot of work. And to me, the biggest piece of unfinished business, Richard, is the challenges confronting the longterm unemployed. Because right now, if it -- if we were at pre-recession levels of longterm unemployment, we would have 2.2 million more people working.
And these are folks that we need to focus on, and that's why I'm so excited that the Senate is going to be focused in passing a bill to extend benefits for them on Monday, and I hope the House will follow suit.
QUEST: Now, you -- your bureau very kindly provided a chart showing the longterm unemployed as a percentage, and yes, to be sure, the longterm unemployed level has dropped some 10 percentage points from the very high number.
But if you look at those underlying data, longterm unemployed, people working -- in the job market or in labor force because of economic reasons. Part-time participation rates. None of those underlying numbers has fallen as far or as fast, have they?
PEREZ: The plight of the longterm unemployed, Richard, is the issue that keeps me up more than anything at night here at the Department of Labor, because we -- as I mentioned before, the pre-recession unemployment rate for the longterm unemployed, and in prior recoveries from recessions, it's usually about 1 percent.
Our current rate, it's down a little bit, but it's 2.4 percent. It's still near record highs. And let me translate that into numbers. If we got back down to 1 percent, that would be 2.2 million more people who would be at work.
And these are real people. I meet with them every week, and I'll tell you, to a person, they are working their tails off. I had one guy tell me last week, "I got no quit in me." I had another person tell me "I'm a cancer survivor, I had a chemo drip in my arm, and fighting cancer was far easier than fighting longterm unemployment." And that is why, they're not quitting on us, we can't quit on them.
QUEST: Now, as we were talking in that interview, when you take a closer look at the numbers, the cracks in the plaster do show, particular on this question of the longterm unemployed. The longterm unemployed, the number of longterm unemployed rose very sharply, obviously, during the recession, if you talk about people who have been out of work for 27 weeks or longer.
But whereas -- I'm just going to give you an idea -- whereas the number for unemployment overall has fallen something like that, the longterm unemployed has remained pretty static. It hasn't really dropped that much, and that is, of course, a great concern, as the labor secretary was talking to you about, 36 percent of Americans have been out of job for at least six months.
And if you move on and look at the labor force participation data, then you see a similar sort of thing. Labor force -- this is the number of people who have been in the workforce, who were taking part in the workforce, that has steadily fallen. The number currently is at 63.2 percent.
Even at the height of growth, it was up around the 67 percent in the good days of the market. So, put it all together and you start to wonder exactly what is the real employment situation. Diane Swonk is with me now. She's the chief economist at Mesirow Financial.
You heard the labor secretary, you've seen the participation numbers. We've got more jobs growing, but it's a murky picture at best.
DIANE SWONK, CHIEF ECONOMIST, MESIROW FINANCIAL: It is, and especially when you look at the composition of jobs growth since the recovery's begun. We lost a lot of higher-wage jobs in manufacturing, construction, business services.
And the jobs we're generating, although there is some hope, we did have some construction jobs, there weren't enough manufacturing jobs in today's numbers. But the jobs we've generated have been overwhelmingly in low-wage sector, minimum-wage sectors.
They also tend to be in areas where women were willing to trade down and take those low-wage jobs. And so you've heard people talk about this being a man-cession because a lot of men lost jobs and they were not able to get back in again, where women were more willing to take the lower-wage jobs and get back into the labor force.
QUEST: So --
SWONK: But any way you cut it, it's still not an easy situation.
QUEST: So, as I asked the labor secretary, are -- is the United States, Diane, looking at the situation where there is a chronically large number of people who are systemically either unemployed or unemployable?
SWONK: That's the good question, and I think Janet Yellen tried to address this issue, which got a lot of press, early this week. I still think there are lot of people out there who are willing and able to work.
And when you look at the number of people accepting part-time for economic reasons, that they want to work full-time, but they haven't been able to find a full-time job. They're still working, they're still willing and able, but they're unable to get that full-time job. That tells me that there's still a lot of people that we could pull back into the labor force.
Clearly, some people who are taking early retirement now because they just don't think they can be reemployed, they're not going to get back in the labor force. But when you see that reduction in the labor force participation rate among what I call your learners and your earners, your 34 to 45-year-olds --
SWONK: -- there's been a major reduction in that age group. That age group can't afford to give up. They're going to have to get back in, and I think they will.
QUEST: So, our big number, of course, 192,000 new jobs created. And unemployment rate that stays at 6.7 percent, and the longterm unemployment, how do you reconcile those two numbers, 192 and 6.7?
SWONK: What we're seeing is, again, 6.7 is an over-estimation of how good things are, and it's still not a great unemployment rate, because it doesn't include some of the people who have been temporarily sidelined who aren't looking for a job today, who are likely to come back into the labor force as the labor market heals more evenly. And we're still a long way from that.
SWONK: So, I think the 6.7 percent number, although it's much lower than it was, it's still a high number in general, and I think, really, Janet Yellen hit the nail on the head when she said in some ways, today's labor market is worse than many recessions for people who are unemployed, especially the longterm unemployed.
But also, those people who have to accept part-time work when they want to work full-time. They are the working poor now, as well.
QUEST: Diane, many thanks, indeed, for joining us. Diane Swonk at the -- in Chicago for us. Now, to the market, and look at this: what happened at 11-oh-whatever, 11:10, and the market decided to turn turtle. Alison Kosik at the New York Stock Exchange. What happened?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: That's what everybody's wanting to know, what happened? But it may just be usual market activity. You look at how the market's been over the past four days, stocks have been going up, up, up, up.
So, at this point, you're seeing investors getting a little nervous about holding onto the gains that we saw happen earlier in the session. Remember, Dow, S&P 500, they were at all-time highs during the trading day today, and investors stopped and said, hm, we're going into the weekend. I don't think I want to go --
KOSIK: -- holding these positions. Let's go ahead and sell. And you know how it is, selling begets selling, and the momentum kicked in, Richard.
QUEST: So, a quick question: in -- we see Amazon, Netflix, a lot of worry about tech. Is that all just people trying to justify a market that went down?
KOSIK: I think you're right on that. I think it is. I think it's more about the selling begetting selling, that once the ball started rolling, the market just rolled over.
QUEST: Have a good weekend, Alison. Lovely to see you.
KOSIK: You, too.
QUEST: On Monday, we'll be back together again. This was the unfortunate scene for McDonald's fans in Crimea's capital on Friday. We'll explain why the doors were closed.
QUEST: McDonald's has closed its restaurants in Crimea because of the US sanctions against Russia. Now, McDonald's says the decision has nothing to do with politics, rather, new banking restrictions in Crimea gives it no option but to close three restaurants. It hopes to reopen them soon.
In Kiev, protesters have been demonstrating outside McDonald's restaurants as part of a boycott against companies selling Russian products. McDonald's is just one of many companies now facing direct impact from the crisis in Crimea in a situation that's created a divide for all kinds of business. Join me at the super screens, and you'll see what I mean.
This is really fascinating, because not only do you have -- you've got, for example, industrial companies, like Gunvor, which is a Swiss commodity firm down here, where the co-founder, Gennady Timchenko, sold a stake in the company due to sanctions.
You've also got Bombardier, which is the large company which has now got questions about its joint venture with Russia. Bombardier having been in Russia for many years, but the questions of whether that joint venture can survive.
So, you've got industrials down here. You've then got financials here. You've got Visa and MasterCard, where you'll be well familiar with the problems they had where they were suddenly told -- or they suddenly announced they couldn't service certain banks. They went back on some other ones.
Then you've got Raiffeison Bank, which is the Austrian bank. It's got large operations in Ukraine, and it now says its plans to sell of Ukrainian banks have been abandoned. The Australian government unwilling to let the bank pay back state aid while it is in this situation.
So, industrials, financials, and then you have this really interesting hodge-podge of companies that are all being affected. McDonald's we are aware about, we've just told you. Deutsche Post. It's going to suspend Crimean operations. It says delivery in Crimea is not guaranteed. And this is all being done at the behest or advice or the request of the Ukrainian postal service.
And finally, Turkish Airlines, Crimea flights have been canceled, warning on safety from the European authorities. The European aviation safety agency, all airlines should avoid Crimea.
Fascinating. We will be building the bricks in the companies that are affected by the sanctions in the days and weeks ahead. Industrials, financials, miscellaneous.
When we come back after the break, Qatar Airways is landing in Philadelphia. The chief exec says the city's a critical hub.
QUEST: Qatar Airways has begun its own Philadelphia story. The carrier is launching a daily service between the United States city and Doha. It's the latest addition to a network that is expanding rapidly. The airline's added 20 new routes since the beginning of last year, and Philadelphia is its sixth destination in North America.
Last night, we talked to Qatar's chief exec, Akbar Al Baker, about the issues of Malaysia Flight 370. Tonight, he talks to us about, of all the destinations available in the US, of all the places to fly, why Philadelphia?
AKBAR AL BAKER, CEO, QATAR AIRWAYS: Philadelphia is an important destination in America. It is a place where there is a major hub of one of our alliance partners, the American US Airways company. And it was very important that we operate here to feed traffic from our region, from the Orient, from the Far East, into the network of American US Airways.
QUEST: Where are you growing the airline? You're growing -- the expansion seems to be global, but where are you particularly targeting, do you think?
AL BAKER: Well, as you know, Richard, I always target many places, but I will not preempt by telling you what are my next moves.
QUEST: Do you -- I'm going to have another go at this, Akbar. Are you preferring more destinations in Europe? Are you preferring more in the US? Where?
AL BAKER: Yes, we will have destinations all over the place. I have to fulfill what I have already said to you that we will be doing 170 destinations in under three years' time, and this is exactly what is the target we are going to achieve. And it will be all over the place. It will not just be particularly targeted to one or another continent.
QUEST: You are the exception amongst the Gulf three in that you have joined an alliance. Now you're starting to see the results of joining One World. Has it been worth it? Are you seeing benefits that justified the costs of joining?
AL BAKER: As a business, it is a two-way street. We are adding value to One World, and One World is adding value to Qatar Airways.
Yes, as you remember, I always told you that sometime or the other, major carriers will belong to one of another alliance, and we are a major carrier it the Middle East. And it was only important for us to join an alliance. One World was the best fit, and we are now a member of One World, and a very important member of One World.
QUEST: And on this question of the Gulf three, everybody now accepts that the Gulf three are here to stay, and individual strategies will go in different directions. But collectively, the three of you are hoovering up huge amounts of air travel. How does the rest have to respond to that, do you think?
AL BAKER: I think there is so much business to go around for everybody. I don't think anybody should worry about the Gulf three. And I always mention that if you cannot defeat somebody, then you should join them.
And this is a very good example. Qantas, Emirates, getting together. You can see the opportunities that that is bringing. And now, Qatar Airways becoming part of One World, the huge opportunities that we are adding to the alliance.
And I'm sure that people who are always crying wolf about us should not really worry about us, because there is so much business. Air travel will keep on growing, and people will be able to reap the benefits, regardless which airline you are.
And I don't think anybody should be worried about the carriers in the Gulf expanding because, like I told you, we will all be successful together.
QUEST: Final question: when are you opening the new airport?
AL BAKER: Well, hopefully imminently, and you will get the news very soon, and I promise you that I will -- you will be one of the first channels I will break the news to.
QUEST: And the moment we know about it, you'll know about, and we'll take you there to have a look at it.
The Turkish prime minister is once again trying to tell the country's central bank what it should be doing. Recep Tayyip Erdogan says it's time to cut rates after the bank raised them sharply during an emerging markets sell-off in January. He was critical of that decision.
And now, Mr. Erdogan says he will go along with a Turkish court's ruling to overturn the country's ban on Twitter, although he's doing so reluctantly.
(BEGIN VIDEO CLIP)
RECEP TAYYIP ERDOGAN, PRIME MINISTER OF TURKEY (through translator): We complied with the verdict because it's a constitutional court ruling, so we have given instructions to our friends and acted accordingly. But I don't respect it. We just complied with the ruling, but this is not law.
(END VIDEO CLIP)
QUEST: Andrew Finkel is in Istanbul for us tonight. Two issues, here: let's deal with the Twitter. I suppose -- the critics -- Erdogan's critics can't have it both ways. He introduced the law because he said he was required to, and now he's taken it away because he said he's required to. How can you fault his logic?
ANDREW FINKEL, JOURNALIST: Well, it's a question of whether the body which actually stopped our access to Twitter had the legal authority to do so, and of course what the constitutional court ruled was that it did not have the constitutional right to do so. It did not have the authority to do so.
So, the second part of your proposition is true that he ended the ban on Twitter because he was obliged to by the courts, but the courts never really had the authority to impose it in the first place.
QUEST: Right, but that second point, they never really had the authority in the first place, that was -- that's an ex post facto decision once you've got the final ruling.
FINKEL: Well, yes. I'm not a lawyer, of course, but I don't think --
FINKEL: -- anyone doubts that the real reason for the ban on Twitter had very little to do with the court's decision, which was to protect the honor of a Black Sea housewife whose reputation was being besmirched on Twitter. Everyone assumes or assume they know that the real reason for banning Twitter --
FINKEL: -- because it was being used to disseminate tweets and links which were harming Mr. Erdogan in the run-up to last Sunday's municipal election campaign, Richard.
QUEST: Now, let's talk about the central bank. There is a well-worn formula whenever a prime minister or a president or a minister is asked about a central bank decision. It goes something like, "They are independent and it would be presumptuous of me to make any comment." You're familiar with that formula. Prime Minister Erdogan seemingly isn't.
FINKEL: He's been certainly the exception to your rule, yes. He's known to be a great enemy of higher interest rates. Of course, no one likes higher interest rates. Even the banks don't like higher interest rates.
He, contrary to most economic opinion, believes that higher interest rates actually cause inflation rather than prevent inflation. Partly as a result of this corruption scandal that Turkey is going through, party as a result of the intention to end quantitative easing, Turkey has had to raise interest rates to stop an even sharper devaluation of its currency.
It was just simply good policy. The central bank really didn't have any other choice. Mr. Erdogan doesn't like that because it's going to slow down growth. It's going to slow down growth in advance of an election -- even more elections. There's a presidential election at the end of the summer and a general election --
FINKEL: -- at least by next year.
QUEST: Thank you for joining us, Andrew. Good to see you. Have a good weekend, many thanks. Joining us from Istanbul.
When we come back, Ireland's so-called "bad bank" has made its biggest deal ever. What's it got to do with a former US vice president?
QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just one moment. This is CNN, and on this network, the news always comes first.
An Afghan police commander opened fire on two foreign journalists. According to officials, one of them, an Associated Press photographer died in the attack. Her colleague's condition is reported to be stable. Afghanistan is increasing security ahead of its presidential and provincial elections on Saturday.
Three men have been sentenced to death in India for the brutal multiple rape of a photojournalist last year. Another has been ordered to serve life in prison. These are the first death sentences to be handed down under a strict new law following the fatal multiple rape of a student in New Delhi in 2012.
The search for the missing Malaysia airliner has now gone underwater. Hardware, such as this robotic device, are now being used to scan the ocean in an area where the Boeing 777 may have crashed. It's been four weeks since the plane took off from Kuala Lumpur en route to Beijing.
A milestone today for the US jobs market. The US Labor Department reported America's economy added 192,000 new positions in March, which means all the private sector jobs lost during the financial crisis have now been recovered. Speaking to me on QUEST MEANS BUSINESS, the US labor secretary said the biggest piece of unfinished business is helping the longterm unemployed.
Sir Alec Ferguson has accepted a longterm teaching position at Harvard. The legendary former Manchester United manager will teach executive education starting this spring. A study of his management techniques was the subject of a Harvard Business Review article last October.
It is called NAMA, it is Ireland's so-called bad bank, and it sold all of its assets in Northern Ireland. The buyer is Cerberus -- I can never work out how you say Cerberus. It's Cerberus Capital Management, which is the investment firm whose chairman is the former US vice president Dan Quayle.
The assets included in the deal have a face value of around $7.5 billion, including loans secured on offices, shopping malls, pubs, hotels, and land, NAMA's biggest single transaction to date. The bank would not disclose the exact terms. Nama may be the best of the bad banks. It's seeing rising demand from abroad for its assets. The government's asked Nama to offload its entire portfolio by the end of the decade. When you look at other places, in Spain, SAREB took on 68 billion euros of housing, land and loans. It reported a loss in last year and is spending $137 million to finish building properties. In the U.K., it's the Asset Recovery Organization that's repaid billions of dollars of government funding. It's owed nearly $38 billion when it was sent off, and the chief executive Richard Banks says taxpayers should get all their money back eventually. Jim Boulden joins me now from London. So, you, Jim, have done sterling work on Nama European to Ireland many times --
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Yes.
QUEST: -- to get to grips with it. This is unusual to sell off in this way. But the buyer is also interesting.
BOULDEN: Yes, I think that the interesting to me about this is that there was criticism against Nama for not selling the Northern Ireland properly -- properties -- early enough or quick enough. But of course they want to hold on to these properties as long as they can to get more value for them as we are now seeing a property bubble -- or property increase in prices here in the United Kingdom which of course includes Northern Ireland. So, they decided they need to sell them now. Northern Ireland wanted these properties sold so they could see servers come in, finish off some of the properties, sell some of the land if they want to, build houses, do what they can with this property to really help the economy.
And so, it's a bit of a quandary for these bad banks, isn't it? How long do you hold a property, how long do you hold an asset that obviously is deeply depressed? When it first comes into the bank -- and Richard, you know, we said this property's worth probably before the crash at about 4 and 1/2 billion pounds. Well, the reports coming out of Northern Ireland is they sold it to Cerberus for something about 1.3 billion pounds. So it's a deep discount on what would have been worth, if we hadn't seen of course the Great Recession.
QUEST: But there was inevitability that Nama or whichever agency is going to take a loss. Even in the U.S., the treasury has taken losses on some of its holdings that it took on as a result of the crisis.
BOULDEN: Yes, of course, I mean just this Northern Irish property shows you how you can take a loss, but if they hold it on for too long, then you could see an issue where if you see the property and prices starting to come down again, then the loss could be even greater. Also of course, these bad banks aren't really there to see this property through to the end. Of course the switch only exists for about ten years in Northern -- in Ireland itself Nama. And so you want to see other people get in there and invest in this property, buy this property, build on it, sell it again, and Cerberus being one of these private equity groups, they're not going to hold onto it for very long.
BOULDEN: They want to be able to use this and generate cash and sell it on when they can.
QUEST: You've been to Ireland many times, you've covered this crisis from the moment it began. Jim, are prices -- are prices recovering and property prices? We know that jobs are being created, we know Ireland is out of its program with the Troika, but what about the underlying property?
BOULDEN: In Dublin, property prices are soaring. We've seen that in the last few months. There's a worry that maybe they're rising too high. But it's not affecting the rest of the country, unlike what happened during the Celtic Tiger. So you're seeing Dublin itself prices are jumping really high because a lot of the social media companies are moving in there, and so you see a big jump in those values, even on very small properties. But the rest of the country --
BOULDEN: -- is not recovered enough -- certainly hasn't gone back to where it was in the last decade.
QUEST: Jim Boulden in London tonight. Have a good weekend. Twenty- five thousand --
BOULDEN: Thank you.
QUEST: -- protesters from Belgium trade unions marched through Brussels according to the local police. They're protesting against austerity measures and cuts to worker salaries and benefits. Now there were scenes of argey bargey. Riot police met protesters at Schuman Square, home of the E.U. institutions. Largely peaceful besides these minor incidents. Traffic and -- violence and traffic jams -were reported. Majority of European markets were up on Friday (RINGS BELL) the end (ph) today's high and reports the ECB's is plotting a trillion euros of QE. There's also that solid U.S. report in the jobs market. In London easyJet rose 2 percent after the courier announced passenger numbers rose 4.8 percent on the year.
When we come back, the chief exec of Mozilla is out because of his politics. We're going to look at bosses who've not bent backward in coming forward with their own views. (Inaudible).
QUEST: If you're going to do something right, you might as well do it big. Mozilla the Corporation. Now this time last night we told you that the chief exec of Mozilla has resigned. The dating website OkCupid which launched a campaign against him for his views on same-sex marriage, says it is satisfied that the man's gone. Six years ago, Brendan Eich donated $1,000 to a campaign opposing gay marriage in California. Eich had been in the job for ten days, and has now decided to resign, the usual answers being of course better to go before he's pushed, and anyway he said it was becoming a distraction. And as for Mozilla, well, that's another issue. Now, why should the political views of a chief exec matter anyway especially if Eich wasn't bringing his views into the workplace? If he wasn't actually promoting an agenda in the company.
It's not the first time of course. Other chief execs -- join me at the other Super Screen -- and you'll see what I mean. Other CEOs have used their status to broadcast their political views although I'm not sure whether any of these chief exec did this deliberately. There we go. First of all, you have Apple where you have Tim Cook urged Congress to back a bill banning discrimination in the workplace. It was based on sexual orientation or gender identity. He was quite open about coming out of the closet on this particular issue and made no bones about it. He said the Workplace Anti-discrimination Bill should've been passed. Then of course, you have Starbucks. Now, with Starbucks, you have the chief executive Howard Schultz. He made a respectful request to customers -- don't bring your guns, leave your guns at home. And that very much fueled the debate called open carry. He had no compunction in putting an advert in the newspaper on one of the most controversial issues in America today.
And then finally, the grocery store Whole Foods. Now here, the chief executive John Mackey proposed and pitched an alternative to the president's healthcare program, Obamacare. In "The Journal," he warned that the government's scheme will cause billions of dollars of unfunded deficits. Three different companies -- Whole Foods, Starbucks and Apple -- where they weren't afraid to get involved. So, what's the difference between this and Mozilla where the chief exec not only went but went so quickly? Our business correspondent Samuel Burke is with me this evening. Good evening.
SAMUEL BURKE, BUSINESS CORRESPONDENT: Good evening.
QUEST: So, why did he go and why did he go so quickly when we've clearly seen other cases where CEOs have had political views and stayed the course?
BURKE: Part of it has to do with his company, Mozilla. It's not your average Silicon Valley company, they're not going after money most of the time, they're an open-source, --
QUEST: What do they do?
BURKE: -- software company. They make the web browser Firefox mainly. They make a lot of money from using Google Search on their platform if you're ever wondering why it's free, how do they make their money. But it's a unique company. A lot of people have said don't draw conclusions about Silicon Valley from this one company. So, you can see how it all played out after just two weeks, he's now gone because of the unique dynamics of the company in part.
QUEST: But hang on a second. He's entitled to his views. I mean, he gave money and only a thousand bucks to this company, and whatever one may think about the campaign, he's been pushed out. Andrew Sullivan I believe had some strong views on this.
BURKE: Yes. On the one hand you have the employees inside of Mozilla who had taken to Twitter. They seem to be satisfied because they'd called for his resignation, and then you have the writer Andrew Sullivan who has a very popular blog and he is openly gay, and he said this, "If this is the gay rights movement today, hounding our opponents with fanaticism, more like the religious right than anyone else, then count me out." I think there's pause in Silicon Valley tonight and within the gay community. On the one hand, the employees and on the other hand, Andrew Sullivan and people saying 'but he just made a thousand dollar donation, now he's gone.'
QUEST: Well, hang on, all right, all right, all right. Surely it was up to Eich to stand his ground.
BURKE: And he said he was going to -- day after day he had told --
QUEST: He was only there ten days.
BURKE: Well day after day for those ten days.
QUEST: Hardly -- that's hardly standing your ground. First grape with the grape shot (ph) and he was off.
QUEST: Right. So, if you're right, then all those employees at Mozilla who decided gay or otherwise, to get up in arms and create a firestorm over this, have done nothing more than shoot themselves in the foot by losing one of the best CEOs they could possibly have (RINGS BELL).
BURKE: That may be true. A very important tech journalist in Silicon Valley today said, 'But what if he donated to a campaign that discriminated against blacks or Hispanics?' She said 'why do we treat gay marriage different than we would treat civil rights for minorities? So there are still some people in Silicon Valley who think that this is legitimate and that what happened, due course took place.
QUEST: Fascinating. People talking about it in Silicon Valley?
BURKE: Absolutely, all over Twitter, every tech blog -- tech blog -- that you read, you see this. Top headline.
QUEST: Many thanks, Samuel Burke, interesting story. The Twitter address -- @richardquest. It really does -- we'll have a "Profitable Moment" on it a little bit later, but your thoughts -- should he have gone? All right, so he had his own views. But perhaps can a CEO have their views and still run a company without imposing those views on the company and keep their job? Sounds convoluted but when you put it into context of that, well it makes you think about it. We'll talk more about it. I want to hear your thoughts and we'll have bit of a -- bit of a -- an internet conversation so to speak. Now, to the Mistress of Weather, Jenny Harrison.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: (LAUGHTER).
QUEST: And I'm afraid that this one's going to stick, ma'am.
HARRISON: No. I put it to anyone actually -- one of my colleagues suggested the Minister of Meteorology.
QUEST: Oh, --
HARRISON: She'll be wanting Chief Ministress at the moment.
HARRISON: I actually would. Chief Senior -- yes, thank you very much. And well, in my Chief Senior role, let me tell you what's going on. Actually I do want to just update you with what's been going on in the U.S. because there've been lots of travel delays. There are more I'm afraid on the way because we've seen this line of rather severe thunderstorms working its way across the areas of the East. And you can see the reports in the last 24 hours. Most of these are actually from yesterday -- from Thursday. There've been four confirmed tornadoes and more reports than that, and they have basically been down in Texas and also across into Missouri. Some strong winds, hail damage as well, over 170 reports in both cases. So, a lot of damage has been done.
These storms aren't done yet. They'll continue to work their way eastwards Friday into Saturday. And then it does improve across most of the country. The much of the South -- the Southeast -- more rain and possibly some thunderstorms. So again, be prepared for some more delays actually at the airport because even thunderstorms -- even if not severe -- can cause those problems. It's just a small area now, Friday into Saturday, around the Gulf Coast here and the sort of threat from possibly some tornadoes coming down with those storms. And these are the current airport delays. And I have to tell you, they've been looking like this for most of the day. All the airports there in New York, San Francisco, so not a great way to end the work week. And as I say, the storm system is on its way out. But there's that rain that will linger as we continue throughout the weekend.
Temperatures are pretty good, even though the cool air will come through. In fact, it should feel a lot better -- 20 in Atlanta on Saturday, 16 in Washington and a very nice 14 up there in New York. Then we head across to Europe. Now, the good news here is the next system is already on its way across from the West, and so the winds are all changing directions. So the air quality is improving across all those major cities in the Northwest and across the West. Generally, a fairly mild picture over the next couple of days.
High pressure in the East, still quite cold across eastern Europe, although even in Moscow temperatures coming back up in just a little bit above average Sunday into Monday. Still very warm in Budapest -- 23 next Monday. The average is only 14, and also look at this, Berlin, your average is 11. It has been mild there for the last two or three weeks -- 20 Celsius on Sunday and Monday. It is fairly unsettled, even some popup showers across central regions and across the Mediterranean quite a bit of rain in play for you throughout the weekend. A bit cooler then with that system coming in from the west. Eighteen in Paris on Saturday, 14 in London, 17 Celsius in Rome. But, again, be prepared for the chance of some showers.
I thought I'd take you actually down under into well not really Australia, but New Zealand. A couple of systems converging. The reason I'm taking you here is because of course the royal couple -- the Duke and Duchess of Cambridge arriving in Wellington this weekend. And as for the weather, well, they'll be well used to this. Better pack the umbrellas -- of course they will. Saturday, Sunday and Monday cloudy skies. Temperatures in the mid to high teens Celsius, not cold in the overnight hours and certainly rain in the forecast on Sunday and Monday which is pretty much what they would have had if they were still in London.
Let's head elsewhere, and I can show you Saturday and Sunday as well for New York, Sao Paulo and also Buenos Aires. Pretty good for the top two, but for Buenos Aires you've got some scattered thunderstorm through Saturday and also on into Sunday. And if you're heading into Tel Aviv or you're there, again, a good nice weather weekend. It'll be fine and dry and some very nice sunshine and very warm actually in Cairo and also Riyadh there in the high 20's, low 30's Celsius. Richard.
QUEST: Oh, I could do with a bit of that Cairo warmth --
HARRISON: You, you like your sun, don't you?
QUEST: I do.
HARRISON: You like your sunshine.
QUEST: Jenny Harrison, many thanks indeed. Now, when we come back, one little boy managed to hack into an Xbox. In doing so, he alerted the authorities and he had a new job before bedtime. We'll explain in a moment. "Quest Means Business," the youngest guest.
QUEST: A white hat hacker has exposed a major security flaw in Microsoft Xbox and he's done it before he's even finished his first year at school. Kristoffer von Hassel is, yes, five years old. He enjoys playing on his Xbox. In fact, he enjoys it so much, his dad Robert notice he was using his father's account and he was playing inappropriate games. What he'd done is managed to hack into Dad's account. He got 'round Microsoft's password screen. For Kristoffer, it was matter of extreme concern.
KRISTOFFER VON HASSEL: I'd gotten all this. Someone's going to find out. I thought someone just in Xbox.
QUEST: Thankfully for Microsoft, Kristoffer raised the alarm to his dad who raised the alarm to Microsoft and Microsoft showed their thanks. They've added his name to its list online of official security researchers. Kristoffer of course has other priorities.
VON HASSEL: I want to be famous.
QUEST: Well, don't we all. I got to speak to Kristoffer and his dad Robert. I asked him to explain what happened.
ROBERT DAVIES, FATHER OF FIVE-YEAR-OLD HACKER: Right after Christmas, I would get home from work and we'd realize that the little guy had more access to the Xbox than he should. He'd load up games he shouldn't be playing and I was frequently being asked why I was staying logged in on the Xbox One console. And after about a week of asking Kristoffer, you know, what he was doing, how he was getting on, he let us record a video of him attempting to login as me and utilizing spaces instead of my --
DAVIES: -- thirteen-character unique password.
QUEST: So, he basically -- Kristoffer, you discovered the way to break into the Xbox, correct?
VON HASSEL: Yes.
QUEST: How did you do it?
VON HASSEL: I -- they come with (ph) all y's.
QUEST: You just did it.
VON HASSEL: I have a lot of y's.
DAVIES: You just had to push a whole bunch of y's according to him.
QUEST: It's not the first time he's done something like this, is it? He's worked out before security breaches --
VON HASSEL: It's not my first -- it's not my first time.
QUEST: It's not?
VON HASSEL: I hacked in the phones.
DAVIES: Yes, he's been doing this as long as he could pick up electronic devices.
VON HASSEL: I bust in (inaudible) I bust in the securities codes.
QUEST: Kristoffer, why do you -- Kristoffer, why do you do this? How do you do this?
VON HASSEL: I'd rather say home and welcome (ph).
DAVIES: Well, how do you do it? Why did you decide to break into Dada's Xbox?
VON HASSEL: Because I wanted to know if there was a way I could space out and stuff with it.
QUEST: Finally, tell me now you've got this -- now you've got this information and you know how brilliant your son is. What are you going to do with him? What are you going to do to enhance this and to bring him on.
DAVIES: Well, mostly let him be a kid and foster more of the exploration he enjoys so much. You know, him being inquisitive is the first, biggest step of figuring things out in life, and hopefully he'll be able to apply it much more into his future.
VON HASSEL: And try to make sure no one can break into the Xbox without me not knowing the code.
QUEST: Oh, boy. Something either tells me he's going to make a fortune or it'll all go horribly wrong. Could be both and at the same time. Speaking of young people taking on big responsibilities, Britain's youngest prince will embark on his first overseas trip this weekend. He's eight-month-old Prince George. He's going to be heading Down Under with his parents, the Duke and Duchess of Cambridge, you heard Jenny Harrison giving a weather forecast for New Zealand where the Royal Highnesses will be going. CNN's Max Foster, our royal correspondent, will be going along too.
MAX FOSTER, CNN INTERNATIONAL ANCHOR AND CNN'S ROYAL CORRESPONDENT: It was designed to whet the appetite, a portrait of a family preparing for its first trip together overseas. There's no doubt who'll be the star of the show Down Under. It's a long trip for an eight-month-old George. But the little prince's father, William, went on a strikingly similar tour at the same age. The family will certainly be fitting a lot in. The first glimpse of them will be on Monday when they arrive in Wellington, New Zealand. The capital will be the base for George whilst his parents crisscross the country with a mission to meet as many people as possible, including relatives of the 185 people who died in the Christchurch earthquake in 2011.
Expect to see the Duke and Duchess of Cambridge getting involved in outdoor pursuits like jet-boating through Shotover Canyon in Queenstown and experiencing traditional Maori culture. Kate hasn't been to either country before, so they'll be taking in all the sights. In Australia, that'll include the iconic Blue LaRue (ph), Sydney Opera House and even a surf life-saving exercise on Manly Beach and perhaps an appearance for Prince George at Taronga Zoo in Sydney, where an enclosure for these bibles has been dedicated to him. The presence of the Duchess with the added star power of two future kings is expected to test Australia's strong Republican movement with huge crowds expected at every public appearance. Max Foster, CNN London.
QUEST: And Max Foster gets to travel along too. Our royal correspondent will have reports throughout the week. To the market (RINGS BELL) and how the week ended. Well, we're up1 percent for the Dow Jones Industrials, but just over half of a percent up for the course of the week. That's the way the markets ended in a busy day on Wall Street. And that -- the way it just turned turtle just after 11 o'clock, quite inexplicable by any rational means. "Profitable Moment" is next.
QUEST: Tonight's "Profitable Moment." Mozilla's chief exec resigned after just ten days in the job because of a $1,000 donation he gave to an anti same sex campaign, a same sex marriage campaign in California some years ago. The employees of Mozilla wanted him out. Everybody said it was a matter that should have been investigated and so he resigned. It does of course rather beg the question, since there's no evidence that he actually imposed his personal views on the company, why did he resign? Honest and reasonable people can disagree on the question of same sex marriage. And anyway, what ever happened to Voltaire's famous misquote? "I disagree with your views, but I will fight to the death for your right to say them," or something like that. You know which one I'm talking about. No, Brendan Eich resigned from Mozilla after ten days, and one has to really seriously ask the question, when the chief exec can be forced out in such a fashion, what happened to political correctness that maybe it's gone a little bit too far. Something to think about over the weekend. And that's "Quest Means Business" for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. I'll see you on Monday.
(END QUEST SHOW)