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QUEST MEANS BUSINESS
Putin Warns of Civil War in Ukraine; Putin Blames West for Ukraine Unrest; Russian Energy Minister on Sanctions, Pivot East, and Ukraine Crisis; Clashes in Ukraine as Election Approaches; S&P 500 Closes at Record High; Gold Fix Manipulation; European Markets Up; Trouble Ahead for eBay; GE-Alstom Deal Delayed; E.U. Parliamentary Elections; Clippers Controversy; U.S. Coast Guard Finds Missing Yacht; Amazon's Standoff
Aired May 23, 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: When in doubt, bring in the military, or in this case, the navy. It's Fleet Week in New York, and a man with a lot of ribbons is about to close the market. Go on, sir, you can do it. You see? Wonder what he's like steering a ship. It's the ending of trading, it is Friday, it's May the 23rd.
Tonight, a warning to the West from Vladimir Putin. Your sanctions can only backfire. We'll be live in St. Petersburg in just a moment or three.
First, it's libor, now it's gold. Barclay's wastes precious little time getting into more trouble.
And a difficult chapter for JK Rowling. Amazon blocks orders for her brand-new book. Why?
I'm Richard Quest. It may be Friday, but of course, I mean business.
Good evening. Tonight, Vladimir Putin is warning of what he calls dangerous civil war in Ukraine as violence escalates ahead of this weekend's crucial presidential election.
Speaking at the international economic forum in St. Petersburg, the Russia president promised to respect the will of the Ukrainian people and placed the blame for the chaos squarely on the West.
(BEGIN VIDEO CLIP)
VLADIMIR PUTIN, PRESIDENT OF RUSSIA (through translator): Where did the Ukraine crisis start from? It arose because President Yanukovych postponed signing the agreement. What was the consequence? There was a state coup with the support of the West, the US, and now there is a civil war, a dangerous civil war.
(END VIDEO CLIP)
QUEST: Now, we have team coverage on this. Nick Paton Walsh is standing by near Slaviansk. We'll be with him in just a moment. Nick, I ask you to just standby please, while we first go to CNN's emerging markets editor, John Defterios, at the international forum in St. Petersburg. John, the words of President Putin were not surprising, but they gave no ground.
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Gave no ground, and a hint of a cold war, at least when it comes to business terms with the United States and the European Union.
But I would hazard a guess this time around, Richard, this is where the optics matter more than the substance. Vladimir Putin coming back to his hometown in St. Petersburg for his annual address, this time surrounding himself with a group of CEOs, all user-friendly ones, who have invested in Russia.
Of course, this is to counterbalance the no-shows, as 30 global CEOs who bowed to White House pressure and did not show up. So, when President Putin took the stage for his 30-minute policy speech, he started on the sanctions and suggested they will backfire in the end.
(BEGIN VIDEO CLIP)
PUTIN (through translator): Isn't it obvious that economic sanctions as a tool of political pressure in the modern interdependent world have a boomerang effect and finally will affect the businesses and economies of the countries that initiated them.
(END VIDEO CLIP)
DEFTERIOS: And he singled out the European Union to be careful going forward, number one because of natural gas supplies, Richard. But he said, look, we have bilateral trade of some $400 billion, it's nearly 20 times the level of the United States. You don't want to be shut out of a $2 trillion economy.
It was also interesting to note, Richard, because I've been covering this for four years, no real recognizable faces in the first four rows where all the VIPs normally sit. So, what was the counter-argument to that from Vladimir Putin?
He introduced the vice premier of China -- this is the new trade partner of Russia -- underscoring this $400 billion energy transaction for 30 years. Again, a signal to the West, I can tilt to the East and do business.
So, again, a lot of symbolism, something that Vladimir Putin likes to do every year at St. Petersburg, but this time around, he wanted to suggest to the West, he's not rolling over because of these sanctions on Ukraine, and perhaps even if they escalate going forward to financial sanctions as well, Richard.
QUEST: I know you've been talking to Russian policymakers while you've been there. The net effect of all of this is it's an extremely risky strategy. Relations are deteriorating, and the Russians don't seem to mind.
DEFTERIOS: Well, I think there's the public face of the Russian policy, and that is represented by Vladimir Putin and the tone that he took today. Then there's a whole other story in St. Petersburg playing out behind the scenes.
The global energy CEOs avoided the limelight completely even though many of them were here. So, I asked the energy minister, Alexander Novak, if these CEOs are getting wobbly because of the sanctions in Russia, that they don't want to do business with Russia. Here's his response to that.
ALEXANDER NOVAK, RUSSIAN ENERGY MINISTER (through translator): We have 100 percent information from our colleagues and partners that they are ready to implement all the projects on Russian soil and in third countries. Their stance is that we should continue cooperation despite some sanctions that are introduced by politicians.
And everybody believes that sanctions should not be impacting economic cooperation, because it's in the interests of Russian companies and our international partners and current departments. Just now, I have had meetings with CEOs of Exxon and Shell, and they continue their wish to pursue problems.
DEFTERIOS: President Putin talked about pivoting east to find new customers. I would assume that the China-Russia deal, $400 billion, is evidence that you're not overly dependent on Europe.
NOVAK (through translator): The strategy of ours is to diversify supplies and pursue cooperation in the Asia-Pacific region. And the recent contract has become a milestone, a foundation of our shift towards the East and developing cooperation with Eastern partners.
DEFTERIOS: You met with your European counterpart this week. Is there an implicit understanding there will be no sanctions from the European Union on Russian gas?
NOVAK (through translator): The stance of Mr. Oettinger that sanctions should not impact energy sector cooperation. We have been sharing this stance and seeing eye-to-eye with Mr. Oettinger. And today, as we believe the market situation is such that if sanctions impact the energy sector, it would deteriorate the situation in Europe.
Because there is no substitute for Russian gas in Europe. And given the fact that their own domestic manufacture -- production of gas has been down of late, probably more supplies will be needed from abroad, including from the Russian Federation.
DEFTERIOS: You have mentioned personally that you would not use gas as a weapon against Ukraine, but Russia's demanding up-front payment, now, from Ukraine. So, in fact, you are.
NOVAK (through translator): I can't agree with this view. The point is that we have not seen any payment for our gas for half a year's time, and this situation isn't appropriate between economic. The indebtedness of Ukraine as of the 1st of May has risen to $3.5 billion US, which is not normal.
And since March, we haven't received a single dollar from them. This is all about concerns over the reliability of supplies and prospect of such reliability. And Ukraine, we believe, is not able to provide proper gas pumping and transit by its territory. And this is why Mr. Putin has initiated a consultation to resolve the issue.
DEFTERIOS: They young but powerful energy minister, Richard, of Russia, Alexander Novak, who works side-by-side with Igor Sechin of Rosneft and Alexey Miller of Gazprom.
And that last comment there, a slight twist of the knife on the early payments from the Ukraine, because they know where that money's coming from these days, the European Union, the United States, International Monetary Fund are bailing out the Ukraine, and that money's going from their coffers directly to Russia, a little irony here, because of the gas dependency still Ukraine has on Russia. Back to you.
QUEST: John Defterios in St. Petersburg with the white nights for us tonight. As Ukrainians go to the polls and the preparations are underway, dozens of people have died in more violence in the east of the country.
In Luhansk, at least 32 people were killed and 44 others were injured on clashes on Thursday. A spokesman for Ukraine's anti-terror office says the dead include 30 separatists and 2 Ukrainian soldiers. CNN's Nick Paton Walsh is near the separatist stronghold of Slaviansk. He joins me now.
Doesn't -- it doesn't bode well for the weekend referendum. So, Nick, give me an assessment of how you think it's going to go.
NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think certainly in Slaviansk, near where I'm standing, certainly according to the self-declared mayor there, there'll be no voting on Sunday in the presidential elections at all. I think it will struggle in many areas around here to get people to the ballot boxes simply because of the violence.
As I stand here, in the last hour, we've heard the thud of what probably is heavy weapons being used in the area around Slaviansk, and that happened during last night and during the day as well. A town, really, where we're seeing both sides increasingly close to each other. And, as you just mentioned earlier, the daily rhythm, now, of armed conflict here.
WALSH (voice-over): This is the sound of presidential elections in the separatist city Slaviansk.
WALSH: They're calm here because it's so common.
WALSH (on camera): A little up on that hill that we're told periodically the Ukrainian army fire heavy weapons artillery towards some of the militant checkpoints and barricades on the outskirts of this town, and it's those explosions, really, that for weeks, now, have been the only presence people in this town have seen of the Kiev government.
WALSH (voice-over): If there were presidential elections at all here, they'd be run out of the building where the self-declared mayor now lives and pledges to me that anyone who tries to stage a vote will be arrested.
He shows me something remarkable in his back room. Strela surface-to-air missile launchers, he says, heat-seeking, possibly operational, got in the lawless 90s, he says. Now, to fight Ukrainian jets. "To get the little birds," he jokes.
He then parades something else, a Ukrainian journalist taking prisoner 30 days ago, Irma Krat, who he wants to exchange. She agreed to talk to us, said she was unharmed, but terrified.
"All the time, you think the building will be bombed," she says, "and all the time that people are waiting around for the siege of the building with Kalashnikovs, you're on your knees, all night, praying. That's how you live, the whole night you pray, and during the day, you try to sleep."
As the separatist fight gets harder, and they are digging in around Slaviansk, the separatists seem to be fracturing. Their leader in the main city of Donetsk, Denis Pushilin, isn't spoken well of here.
"From the start, I knew who he was," he says. "A temporary figure, no political significance, no real power. I've met him twice, and mostly just said 'hello' and 'good-bye.'"
Falling out amongst themselves, under siege, the Russia they wanted to join distancing itself, but the government they oppose unable to assert control. Isolated, but still here.
WALSH: Now, Richard, the real issue here is, I think, what comes next, because it's unlikely the elections will have any real impact here or be much voted on, certainly in these key separatist towns.
The question really is, given you've heard there how separatist leaders themselves are fracturing amongst themselves, how they've getting increasingly more distant support from Russia, quite what comes next.
Negotiations seem far off, we are seeing the Ukraine army advancing down the highway toward Slaviansk today, moving their checkpoints down that road, and the pro-Russian militants digging in. Real concerns, I think, that at this stage, the only real avenue forward seems to be an increase of this violence.
And the past 48 hours, what you talked about today, we had 16 dead Ukrainian troops yesterday as well, and we're --
WALSH: -- only 38 hours away from the vote. It's very dangerous, tense times here, Richard.
QUEST: Nick, thank you for that. Stay safe as you continue to cover this. And obviously, we'll be there through the weekend and through the referendum.
We should turn our attention to what happened in the markets, which ended on a high note. The S&P 500 closed at a record high. It's above 1900 for the first time ever. That's worth a --
QUEST: As for the other stocks, HP was up over 6 percent, despite news of mass layoffs. Maybe because of news of mass layoffs that the restructuring is root and branch. General Motors is recalling more cars. It's now recalling SUVs from 2014 and 20 -- due to faulty part in the air bags. The Dow Jones Industrials up 63 points as the week ends.
When we come back, we'll tell you how to bring on a mini puke in the gold market. How tasteful. One Barclay's trader thought he'd make a bucket of cash. Instead, it's all been a rather unpleasant experience for all concerned.
QUEST: Barclay's has been fined nearly $44 million. It's an extraordinary story. It's all to do with manipulating the gold market. It's a gold fix. And quite interestingly, of course, that's exactly what they were manipulating, the London Gold Fix.
It's a benchmark which twice a day fixes the price of gold in the London market. There are numerous banks that are involved in the fix, five or six of them, and one of those banks is Barclay's.
Now, let's go back to June the 27th, 2012. Incidentally, it's the day -- this is a really important day -- the day Barclay's was actually fined for fixing the libor, the London inter-bank offered rate interest rate.
Now, back in the office in Barclay's, there was a London trader named Daniel Plunkett, and he's waiting on a magic number. He's waiting for $1558.96. His client has bet a lot of money that gold will reach that price at exactly 3:10 the following day, because that is the price -- it's a future's contract, and basically, on the one side, you have the client, on the other side, you have the Barclay's trader.
It is not a zero -- it is a zero-sum game. One will win and one will lose. Now, Plunkett doesn't want that. He does not want that price. So, he sends an e-mail, which he says, "I'm hoping for a mini-puke." Or a rapid fall in the price.
The person he sends the e-mail to is one of the people who are involved in the department of the London Gold Fix. It's the equivalent of sending an e-mail to the judge and the jury and asking for the result that you want.
On the 28th at 3:00 PM, the gold fix conference call takes place, Barclay's is involved. And it looks like Barclay's -- it looks like it might actually end above the price that they want. Now, this would be a disaster for Plunkett. He has to do whatever he can.
But using the information, he sends a sharp sell order into the market. Look at that, $90 million sell order. He drives down the price, and he succeeds. At 3:10, when all is said and done, he gets the price that he wants, the Barclay's trader wins the day, Plunkett wins, the client loses.
There's a terrible stink and uproar, the client complains, Barclay's makes them good, an investigation takes place, and the whole thing stinks to high heaven. Jim Boulden's with me. A mini-puke, Jim.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Yes. I didn't want to use that term, but I'm glad you did, because that's exactly --
QUEST: Feel free.
BOULDEN: -- exactly what was in the e-mail. We were all standing outside of Barclay's bank talking about the libor scandal and Bob Diamond and giving up all this money --
BOULDEN: -- being fined all this money, while this was going on inside at exactly the same time.
QUEST: OK. But I need to know, what did he do wrong?
BOULDEN: Well, if you say that you want to manipulate the price, that's what you do wrong. And he did it to save the bank $3.9 million.
QUEST: But was it the sending of the e-mail, "I want a mini-puke." Or was it the selling when he may have known what was happening as the fix was going on.
BOULDEN: If you read all 40 pages, which some people have done, you get into the nub of it, they can't actually say that what he did manipulated the price. What they said he did was send an e-mail asking for that price or hinting that he wanted that price manipulated.
QUEST: Right. So, it's not one of these cases where it's the selling that did it. Or, for example -- because as you will well know, there is at the moment an investigation into the whole question of the London Gold Fix in the United States.
QUEST: The people are looking into it because they say the client -- the bank is fixing and the bank can trade. And in that small window -- is that a case of this?
BOULDEN: This is -- yes. It's a case where they're talking about conflict of interest. It is a conflict of interest. It's not the same people, but people in the same bank can in one place sell to dump the price down when you also have them supposedly policing themselves to make sure this kind of thing doesn't happen.
QUEST: Barclay's has apologized. Barclay's says it's all dreadful and it should never have happened. What is interesting on the ethical question here is that Barclay's is paying a fine on libor, so it's already in the public domain that these sort of activities are going on. And yet, this guy does it even knowing that libor has been an issue.
BOULDEN: I think what is most interesting to me is that the client complained right away. The client knew immediately, according to the press release from the regulators, that something was fishy. And this time, the client went right to the top and said this is wrong, I want my money.
BOULDEN: Yes. And we have libor, we have FOREX, now we have gold.
QUEST: You have one chance to use that phrase on television. You sure you don't want to say it?
QUEST: You may never get another chance to say that again.
QUEST: There. You may use that phrase, don't touch. European market ended mostly higher. Caution ahead of the elections in Europe and Ukraine, the voting's already begun, of course, in the European elections. Business confidence fell in Germany. There's a big jump in new home sales in the United States. That's the way the markets were trading.
In a moment, security experts are shaking their heads at eBay's slow response to a massive data breach. The governments are lining up to demand action. But what are they hoping to get? In a moment.
QUEST: Don't touch it.
QUEST: eBay may be facing investigations in several countries following its recent data breach. Cyber criminals slipped undetected into the company's network more than two months ago and they made off with customers' personal information. Officials say the company's response has been slow and suggest it didn't do enough to protect users.
In the UK, the Information Commissioner's office has said it's considering a formal investigation. However, in Europe -- eBay's based in Luxemburg, and that means data protection authorities there will have to take the lead.
In the United States, the New York attorney general, Eric Schneiderman, is calling for eBay to provide free credit monitoring for affected customers, while the states of Connecticut, Florida, and Illinois are conducting a joint investigation into the breach.
Lisa Madigan is the attorney general in Illinois. She joins me now from Chicago. Madam Attorney General, the -- in a nutshell, what do you want from eBay? We know this has been a dog's breakfast in terms of the length of time that it's taken them to admit it. But what is it you're now seeking?
LISA MADIGAN, ILLINOIS ATTORNEY GENERAL: We always need to find out what security measures were in place, how many customers were affected, what information was lost, what they're going to be doing in the future to make sure that that information is safe and is not going to be under attack by cyber criminals who end up using it either to -- identity theft. But basically, to take people's money.
We have to make sure that people's information is secure or we're going to have a situation where people are very uncomfortable being on the internet, they're very uncomfortable participating in our economies.
QUEST: Right, but if you accept that eBay clearly would not have wished this upon themselves, and I think we can probably all agree that no self- respecting --
QUEST: -- company would willingly go down this road, I can't work out whether your investigation is retribution, whether it's punishment, or seeking punishment or compensation, or merely investigative.
MADIGAN: Well, it starts out by being an investigation. Right now what we know is at least 145 million eBay users' information was stolen. What the company's telling us is that so far, none of that information was financial information. But we want to make sure that that's accurate.
Our goal from our side is always to make sure that individual consumers haven't compromised -- haven't lost their personal financial information such as that opens them up to the possibility --
MADIGAN: -- of financial fraud taking place. And so, we do these investigations to make sure that companies are, in fact, adhering to privacy laws, making sure that they are treating people's information with sufficient security and sufficient respect that it is not going to be open to cyber criminals or others that are out there.
QUEST: Do you see penalties on the fore -- on the horizon in this case for eBay?
MADIGAN: There is always the possibility when we do these investigations that if sufficient security measures were not in place and/or they didn't notify customers in a timely manner, that they've known about this for too long and didn't do anything and something happened, that then we do seek penalties.
MADIGAN: We have to make sure that things are fair and that people's information is protected. And companies are not doing a good enough job of that right now.
QUEST: See, now, that really is the nub of this whole incident, isn't it, Attorney General? It really is -- I mean, they don't seem to be keeping up. We are in this revolutionary period where we're buying more things online, we're giving more data away, we're using credit cards in willy- nilly fashion. Do you think companies are behind the curve?
MADIGAN: I can tell you from the investigations that we've done, we consistently see where companies have failed to do and put in place basic security measures.
And so, they're collecting too much data, they're storing it for too long, they're not siloing that information, they're not actually putting in place the security updates when there's software that's been updated, when there's been a known compromise.
And so, there is a lot of work that companies need to do to make sure that people's personal financial information is being secured properly.
QUEST: And do you think -- I've interviewed your fellow attorney general Eric Schneiderman, he's been on this program a few times, and basically, I think you all sort of seem to agree that ultimately, the change only happens when it's the threat of people like yourselves coming along and saying you'd better do it or we're going to make sure you do it.
MADIGAN: Sometimes that's the case. And so, we have the authority to do these investigations and to protect consumers.
And ultimately, I really see us as protecting the overall economy. If people aren't comfortable using their credit cards, their debit cards, being on the internet willy-nilly, as you put it, then we're going to see a real impact overall in our economy. Less confidence. And certainly, for the American economy that is so consumer-driven, that would be a real detriment.
QUEST: Attorney General, thank you so much for joining us. Lovely to have you on the program. Please, do come back. Always good to have people like yourself giving us the perspective. Thank you, ma'am.
MADIGAN: Thank you.
QUEST: Now, the French economy minister is gaining a reputation as a protectionist after meddling in GE's proposed takeover of Alstom. Hear his unlikely inspirations next.
QUEST: Hello, I'm Richard Quest. There's 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): There's been deadly violence in Ukraine ahead of this weekend's presidential election. Nearly a dozen explosions rocked the outskirts of Sloviansk on Friday and a spokesman for the country's anti- terror office says at least 30 pro-Russian militants and two Ukrainian soldiers were killed in clashes near Luhansk on Thursday.
The former Thai prime minister Yingluck Shinawatra is being held at the military barracks in certain army base in Bangkok. A Thai official says she and other prominent political figures are being held for their own safety. Yingluck's government was in power when the political unrest broke out in November and she was removed from office this month by the country's constitutional court.
The U.S. Defense secretary says America has information about the Nigerian schoolgirls abducted by Boko Haram. Speaking to PBS, Chuck Hagel said there is still no solid evidence on the girls' whereabouts. The U.S. defense official separately told CNN there have been no new leads for several days.
Chinese authorities are announcing what they call a one-year crackdown on terrorist activities in the volatile Xingjian region. The announcement follows a deadly market attack that killed at least 31 people in Urumqi on Thursday. Authorities say five people were behind it, including four who died in the attack and a fifth suspect has been arrested.
(END VIDEO CLIP)
QUEST: Pfizer and AstraZeneca may have hogged the headlines for the immediate takeover battles, but GE, Alstom and Siemens have also been way up there. And now GE and Alstom will have more time to get to know each other.
The deadline to consummate a possible $17 billion takeover of Alstom's energy assets has been extended to later in June. The delay will give GE more time to convince the French government that GE is the right suitor for Alstom. The French economy minister, Arnaud Montebourg, has declared his preference for a tie-up with Siemens. He wants alliances, not takeovers. I asked him whether the government in France had overstepped its bounds and was meddling in the deal.
ARNAUD MONTEBOURG, FRENCH ECONOMY MINISTER (through translator): I don't think so, Richard. All the governments of the world have a say and some control when dealing with sovereignty and national security when it concerns investments in their countries.
I must say that I often take inspiration from the American Seabees (ph) when in 2012 there were more than 100 notifications and 10 vetoes on buyouts of American businesses like our investors.
In France, we have a very light sea fuse (ph).
QUEST: Now if we talk about the European elections, every politician, every politician says they understand that the people don't like the European center.
So, Minister, what needs to change?
MONTEBOURG (through translator): (INAUDIBLE) more on growth rather than on austerity. Over the last few years, four years, I believe, the United States created 4 million jobs while the European Union destroyed 4 million. That's the difference between an innovative type of policy in the U.S. versus a too-conservative type of policy in Europe.
That is why the French, like many others, are asking for a change to banking policy and monetary policy. We admire the way that the central bank of Japan, of England and the Fed have made choices that were unconventional. We need innovation as I am fighting in my country with my government to modernize France. And I think we need to modernize Europe.
QUEST: The Federal Reserve is independent. The ECB in Brussels, in Frankfurt, is independent. The problem is not monetary policy; the problem is politicians in Brussels who could not agree.
MONTEBOURG (through translator): The central bank, even if it is independent, can still be innovative. It can look at what is happening around it. The IMF, the OECD, the Japanese government, the American government all say the monetary policy, the ECB should evolve and change.
And that's what we are saying, as do a lot of European industrialists, German, Italian and of course, French.
QUEST: Finally, Minister, finally, you are getting a reputation as a protectionist.
Can you live with that?
MONTEBOURG: Oh, my inspiration from very famous president of the United States, the first is Franklin Roosevelt, a tremendous president. Also Barack Obama, who said during the electoral campaign, he said, let's bring our jobs back home. This is exactly what I'm doing, pushing the men in France with innovative policies and also Ronald Reagan, because he's a tremendous actor.
QUEST: You had to admire any politician that can manage to get Roosevelt, Obama and Reagan into the same answer and talk about innovation better when it comes to France.
The minister of -- the trade minister from France joining me earlier.
Now France joins the rest of Europe in voting in the European elections this weekend. But French parties hoping to make big gains. I asked the Deutsche Bank's chief economist, GIlles Moec, if any outcome in this weekend's elections could affect an economy that's effectively being driven by the ECB.
GILLES MOEC, CHIEF EUROPEAN ECONOMIST, DEUTSCHE BANK: What I think is happening in Europe and to some extent I think it's ignored is the fact that what we've had is more convergence between the traditional (INAUDIBLE) families, between the center right and center left. And this has given a lot of national governments quite with us shrink actually in pushing through some fairly unpopular measures, both on fiscal and structural reforms.
And yes, it so happens that this kind of centrist consensus is very close to the recommendations coming from the ECB or coming from the European Commission, but that is precisely because the ECB and European Commission are themselves the reflection of this European consensus.
So these extremists are getting a lot of traction, media getting a lot of traction in those elections that do not matter that much, such as the Europe elections. But none of them have so far really managed to influence national policies.
And that's a big difference with what has happened in the U.S., in the U.S. after the crisis we had a political polarization. But there it has created a massive wedge between the two main political families, to the point that we actually got into quite a bit of trouble on fairly simple fiscal decisions.
It did not happen in Europe and I don't think it will happen in Europe.
QUEST: If you look at France and yes, even the recovering Mediterranean countries, it doesn't justify -- I'm looking at the graph now -- over the last year or so this quite strong recovery in the euro.
MOEC: Again, it's true that we would love to have a weaker euro. That's obvious. France would do with a weaker euro, so would Italy, so would Spain, to some extent.
At the same time, again, let's assume, for instance that there's a conversation between Mr. Barroso or Mr. Draghi and Janet Yellen on the question of the exchange rate. The Europeans would say we need to weaken our currency and the Americans would say, well, why? You look off the current console (ph) plus if you think that you need to do something about your macro situation, well, the right thing to do would be to stimulate demand, not to try to influence the currency.
QUEST: That's Gilles Moec.
The European elections, voting continues. It was, of course, in some countries on Thursday, other countries today and the majority of E.U. countries vote over the weekend.
All results are held back until Sunday night, when pan-European voting comes to an end.
In a moment, Donald Sterling is cutting the L.A. Clippers loose before the NBA forces a sale. We'll be live in Los Angeles.
QUEST: Donald Sterling, the controversial owner of the L.A. Clippers, has agreed to sell his team. He's sending his wife to do the negotiating according to a source close to the matter. The NBA's still going ahead with a vote aimed at forcing Sterling to sell up. The NBA's banned Sterling for life after the racist remarks that he made were caught on tape.
Stephanie Elam's our correspondent. She joins me from Los Angeles.
Let's get some clear-cut ideas. So to be clear, the team is going to be sold; the fight it on.
STEPHANIE ELAM, CNN CORRESPONDENT: Yes. And they can do whatever they're doing and what we're now hearing is that perhaps Shelly Sterling, his estranged wife, now has full ownership of the team, that he gave his 50 percent to her. But regardless of that, the NBA's saying they're not separating one Sterling from the other. They want the team sold.
QUEST: Why are the NBA going ahead with this meeting to force a sale if the sale is going ahead?
ELAM: Well, I think that's what they're -- I should say they're going forward with this vote. So he has until -- Mr. Sterling does -- until Tuesday to respond. And then on June 3rd, that is when the owners are going to convene and make this decision about whether or not forcing him to sell is what's going to happen.
I believe, the commissioner believes, he has three-fourths of those votes to make that sale happen.
QUEST: Right. But if they're -- if they're deciding to sell voluntarily, with sides making the public policy point of getting a vote, what purpose does the vote serve?
ELAM: Well, that is one of the things that we need to have clarity on is if they are now going to work with the NBA to sell the team, if that does happen, then this whole need for a vote can go away, which would also protect those 29 other team owners from having to expose their take on this vote and how they would play into it.
So if they are able to get a resolution here now -- but keep in mind, though, previously both have said that they wanted to keep their team, right? So we know that Donald went out and hired this anti-trust lawyer and we also know that we've seen an interview. So Shelly Sterling has said that she has been a part of building the team up and she wants to keep her stake.
So we haven't heard from them directly yet that they are going to try to change it. But if they do and they work this out, then, yes, they wouldn't have a need for that vote.
QUEST: Who will buy and how much is it worth?
ELAM: Oh, that's the good question. So let's break down the numbers a little bit.
So the Sterlings bought the team in the early '80s for just over $12 million, 1981. It is estimated now that you got a team that is a contender; they were in the playoffs this year. It's Los Angeles, which is the second biggest city in the United States, which has a great fan base; a lot of famous people like to go to those games as well. And they've got some marquee names from like Blake Griffin and also Chris Paul. So they've got names like this. So people are interested in this team.
There are reports that the team could be valued at about $575 million, but many think the bidding process could go upwards of $1 billion or even $2 billion, depending on how many people are in there, in this pool, trying to get their hands on the team, Richard.
QUEST: So finally, I mean, this has been a really messy business and Donald Sterling and Shelly Sterling may be about to lose. But as they lose, they're taking home serious amounts of money.
ELAM: They are going to make so much money off this deal, no bones about it. And even the last time we heard from the commissioner of the NBA, Adam Silver, said that they owe it to the Sterlings to get the best price possible for this team.
And remember, the NBA has to sign off on who does buy the team. That's another thing to keep in mind here. But either way, no doubt about it, based on what they've bought this team for in the early '80s, based on what it's valued for now and the bidding war involved, no matter what, they're going to walk away with a whole lot of money. I don't think the NBA cares about that; I don't even think the players care about that or the other owners. What they just want is to have the Sterlings out of their league.
QUEST: And you, of course, can continue to go to the matches. Right. I think it's a conflict of interest here. I think we need to have -- we need to think about the conflict of all these issues, fans reporting on teams that they are involved with.
What do you think about that, Stephanie?
ELAM: Well, the team is no longer competing, because they are no longer in the playoffs.
But for right now, it's a non-issue. I'll just put it out there that way.
QUEST: Ah, ah. I think she had me there. I think she handed me that one beautifully back.
Good to talk to you, Stephanie.
Now, the weather forecast.
Alexandra Steele is at the CNN International Weather Center.
We are really seeing clouds with April showers in the U.K., but of course elsewhere in the Balkans, they've had some fairly dreadful weather.
ALEXANDRA STEELE, AMS METEOROLOGIST: Oh, incredible flooding there, Richard, no question about it.
So flooding there, severe storms in France. Take a look at Limoges. We've seen some very strong storms from the U.K. to France and coupled with some heat. And those storms and the heat actually will continue.
So here's the deal. Here's how much rain we've seen, just in the last 48 hours alone. And you can see kind of these areas of low pressure just circling around. So since Thursday, take a look at the amounts of rain between 71 and almost 140 millimeters of rain.
And the rain will keep coming. So here's the current satellite picture. And you see this area of low pressure, clockwise, so kind of just bringing in the clouds and bringing in the showers and it's a pattern we've seen an awful lot. And that will continue as well.
So more showers, more storms and even the potential for tornadoes. So here's a severe weather. Today through tomorrow, heavy rain, hail, even some very strong winds to boot. And you can see kind of these quadrants of concern here, so real we will see impacts from Paris, Lyon, all the way through Berlin and Prague. So tornadoes certainly not out of the question. And also, hey, if you're a tennis lover, we're going to see the French Open begin on Sunday.
So we're going to see much of the first week kind of be ensconced in some clouds and showers. Temperatures, though, certainly above average.
Sunday 22, 18, 17. So we will see cloudy skies and scattered showers. But on one other note, talk about the meteoric rise of maybe some of those players, like Djokovic or whomever, but look at this, we're going to see a meteor shower that really will be quite cool.
Here it is. It's tonight and in toward tomorrow morning, and it's emanating from this northern constellation, Camelopardalis. And it's a new meteor shower, so not much is known about it in terms of how many meteors we'll see. But what we do know if we see them, where we'll see them here, pretty great conditions for Southern Canada and the continental U.S., Richard. But not so great in Europe because what we're going to see there is kind of the peak of that is a little late; maybe during sunrise tomorrow potentially some meteor showers there for you.
QUEST: Alexandra, thank you very much indeed.
Now some sad news -- and I suspect it's sad news to CNN -- the U.S. Coast Guard has said it's found the overturned hull of a British yacht that went missing carrying four people in the Atlantic last Friday. There's been no sign of the crew of the Cheeki Rafiki. The boat was spotted a thousand miles off the coast of Massachusetts.
The Coast Guard says the search operation will be suspended at 10:00 pm Eastern time. But that's just in about 15 minutes from now unless there's new information to suggest the crew might be alive. There is no indication that that is indeed the case.
QUEST: Amazon has taken its dispute with a major New York publisher to the next level and is refusing to make its books available to order. The website's arguing with Hachette over the price of ebooks as of last Thursday night. J.K. Rowling's next book, "The Silkworm," is currently listed as unavailable to preorder.
The same goes for Michael Connelly's next installment of the Harry Bosch series and our next guest claims Amazon has pulled all kinds of tricks to make her book as unappealing to buyers as possible.
Nina Laden is the author of "Once Upon a Memory." Nina joins us now from Seattle.
What sort of tricks are they doing?
What are they up to? What mischief are they (INAUDIBLE)?
NINA LADEN, AUTHOR, "ONCE UPON A MEMORY": Well, when I first went to the page that they have my book on, I noticed right away that they've boosted the price to full price and everybody, of course, wants a discount on Amazon.
And there was a banner across the top of the page that said that there were other books similar to mine available at much lower prices. And then the really difficult thing for me was that they said it would take 2-5 weeks for my book to ship, even though I know it's in stock.
QUEST: So this is -- you are the victim of their battle with your publisher to try and get higher margins on ebooks, as I understand it.
LADEN: Yes. I feel like a pawn as do other Hachette authors and illustrators in their negotiations.
QUEST: You're a pawn, but what can you do about it? Because pawns usually get knocked over.
LADEN: Yes, that's true. And I didn't quite know what to do. So what I did was I went online very frustrated and I wrote a letter to Amazon and I sent it to customer service, which apparently was probably a robot. And so I received a form reply.
And I felt at that point that I would just share this letter that I wrote with my friends on Facebook. I also have a public author page, and I posted it there as well. And my friends, of course -- yes, sorry.
QUEST: Do you believe that if Amazon is doing this deliberately, as it seems they are, and incidentally, Amazon is refusing comment on this, that somehow either government or regulators have to get involved because this is rapidly becoming an abuse of a monopoly position?
LADEN: Well, what I don't truly understand is what is going in the negotiations between Hachette, which is the parent company of my publisher, Little Brown, and Amazon. So I do not have any say as to whether the government should be involved because I'm not sure what they're all negotiating except that Amazon has chosen to use authors and their books as a way to hopefully make Hachette do what they'd like.
QUEST: We wish you luck in that and please come back the moment your book is back at the discounted price, and we'll buy a copy and we'll talk more about it. Many thanks indeed, Nina, for joining us.
LADEN: Thank you.
QUEST: Now with European elections underway, it's appropriate to look into the reading habits of Michel Barnier, he's Europe's financial services commissioner, who is in this weekend's "Best of Quest." Michel Barnier said he has no time for fiction. And instead immerses himself in the stories from the past to help him in his work. It includes lessons of the horrors of the war and of conflict.
(BEGIN VIDEO CLIP)
MICHEL BARNIER, EUROPE'S FINANCIAL SERVICES COMMISSIONER (through translator): This book is inspired by the tragedy of the First World War and the great writer, Victor Hugo, the French writer, described wars amongst Europeans as real civil wars and butchery. And part of this is a history. A few young soldiers around 20, this is an extremely realistic book, very moving book when you look at the first page. You can't stop until you reach the last page.
QUEST (voice-over): Michel Barnier is reading for leading in "Best of Quest." But of course, it's throughout the weekend.
We'll have a "Profitable Moment" after the break.
QUEST: Tonight's "Profitable Moment": is all fair in love, war and modern digital economy of publishing? We heard tonight just there about how Amazon is hiking the prices, restricting the access, not allowing people to buy or delaying the delivery of books from a publisher that won't succumb and negotiate lower prices on its ebooks. Hachette is the publisher; Amazon, of course, is now behaving like the bully on the block.
The more I read about this during the course of the day, the angrier I have become. Amazon has become an almost de facto online monopoly for the purchase of books and with that comes duties and responsibilities. And if you don't get your way with a particular distributor, you don't take it out on those at the bottom, the victims, the very people who write the books that you are selling. Maybe that's a simplistic, naive view of life. But if Amazon doesn't want to find itself against anti-trust soon, it had better watch out.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable. Back in New York on Monday.