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QUEST MEANS BUSINESS
Economic Success in Rural Britain; Lebanese Economic Outlook
Aired December 29, 2009 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: The FTSE takes flight. Reaching pre-Lehman heights.
Back in the shops, U.S. consumer confidence is picking up.
And the class of '09, we'll bring you the final episode of our "Job Quest".
I'm Richard Quest, an hour together, because I mean business.
Good evening. It has taken more than 15 months, but now London's FTSE 100 Index is back, or in a manner of speaking. The index today became the first of the world's main equity markets to return to where it was before Lehman Brothers collapsed.
Here you can see the turbulent years in the life of the FTSE. The gut-wrenching slide right down the middle shows what happened, when Lehman Brothers went out of business, or went bankrupt. And the slow climb back. Actually it was more of a quick climb back to March of this year. We have just sort of trundled along ever since.
Now the FTSE is riding ahead of the other major markets in this regard, neither the DAX, nor the S&P 500 are above their pre-Lehman levels. In fact, when you consider that we are coming to the end of the decade, you might well wonder what happened to all that money. In just a moment, my guest Howard Wheeldon is here and will discuss the London FTSE, and also the decades' inequities.
But let's put some perspective into this talk (ph) first of all. If we look at what over the last 10 years, since the end of 1999, the FTSE is actually down 21.7 percent. It hit the low, there was a low at around 2003, which was SARS. And then of course, the high point in the last decade was October 2007, literally, of course, just before sub-prime and onwards and upwards, 21.7 after that.
A much better performance for the DAX in Frankfurt. Similar highs and lows in terms of the overall nature of the market. But, of course, it has managed - whether because it didn't fall as fast, it has held onto its own. You don't need to be a genius to work out that it will be Tokyo's Nikkei, which is the 225, which is down 43.8 percent. The peak of the graph there was in March of 2000.
And if you look at the Nasdaq, you get an idea, also, of the sort of issues that afflicted the markets. The peak of the market, for the Nasdaq, was back here. That was the top of the dot.com boom. Now, the dot.com bust happened here. That much we know. What is fascinating is that while other markets did come back up and above, the Nasdaq never really regained its strength. It always remained down, and as you can see, it is trading pretty much where it was, that sort of mid-part of the decade.
These are interesting numbers. Well, I think they are, anyway. Hopefully, Howard Wheeldon, senior stock strategist at BGC Partners, is going to help me understand them a bit more.
HOWARD WHEELDON, BGC PARTNERS: I'll do my best. Very, very interesting, Richard, also that today happens to mark the 20th anniversary since the Japanese market, since the mid-90s, actually reached its peak. So, it has been a downward, or it has been a huge battle ever since and it has gotten no where, it has gotten no where near where its previous -
QUEST: Up around 30 odd thousand, down to where it is.
WHEELDON: Literally one quarter of its peak value.
QUEST: Yes. Do we learn a lesson from that, in that the markets will not get back to where they were?
WHEELDON: Well, no I don't think you can from that point of view, because Japan at the stage, at the starting process was, of course, a very immature market. It became a mature market through that process. Western markets, New York, London, and indeed, many parts of continental Europe, particularly Germany, have been mature markets for a very long time. So, I don't think you can compare the two. Do we go back to -do we get back to - well, one day of course we will, we will insert that inflation will ensure that actually occurs. But basically we are looking at a very, very different market position, market staff, market approach, and investment approach today. So, I don't think the actual levels that the indices reached means nearly as much now as it did when markets were governed by private investors say 50 years ago.
QUEST: I can certainly see where your argument is going, but let's just take the Lehman Brothers example. Now, the fact that we are back to where we were pre-Lehman, when the real economy is still in a pretty powerless state, tells us a lot about the disconnect between markets and reality.
WHEELDON: It tells you another thing as well, it does, you are right. It tells you that markets always overreact. They overreact downwards and they overreact back up. That is what makes the market go `round. It is a process that has gone on for decade after decade and it will continue.
QUEST: Do you find it, because I think I do, a little depressing that we are told equities, or the pensions, it is the way that it is -what's that famous phrase that people always say, (UNINTELLIGIBLE) mutual fund, equities can go down as well up, but if you are investing over the long term. Well, frankly, over 10 years!
WHEELDON: Don't forget the earnings capability of that investment during - in other words the yield that is created. So there is something else to add into the equation. Don't forget also that during the short- term -because we have changed in the investment style, people invest short term, the movement of stocks is lot greater, so the money is earned in a different way. Investment is earned in a very different way in approach to how -
QUEST: It is still depressing.
WHEELDON: It is still depressing.
QUEST: It is still depressing. Ten years on we -
WHEELDON: Of course it is, of course it is. But you have got to look at your asset, your overall asset high on your investment, in a very, very different way than you used to.
QUEST: This is time for the traffic light. Now if we talk about trans-Atlantic markets, in 2010?
WHEELDON: Ah, yes.
QUEST: Red, is we are going to be worse off at the end of the next year than we are now. Amber, even Stevens. Green, get the money on the table.
WHEELDON: I think I'll have to go for amber. I'm more positive about the U.S. than I am the U.K.
WHEELDON: So, very much. At a reddish to amber for the U.K.
QUEST: So, we'll make it flash for you, how about that?
WHEELDON: But I think an amber to green for the U.S.
QUEST: Reddish to amber, I'm going to agree. How about happy New Year. Many thanks to you.
WHEELDON: And to you.
QUEST: Right, now you are up to date with the markets, which is perhaps a little disappointing when you think of those numbers.
The news headlines now and Fionnuala Sweeney is at the CNN News Desk.
QUEST: When we return, over the past six to nine months we have been riveted, we have enjoyed and we have felt the pain of our "Job Questors" as they searched for employment. Months of interviews and rejections, and as we come to the end, find out who got a job.
QUEST: Welcome back. We are being warned to brace ourselves for a sting in the tail of the recession. A new report is forecasting further job losses for 2010. If we start in the U.K. unemployment here is set to peak at 2.8 million by the summer. That is according to the Chartered Institute of Personnel and Development. It is a marked improvement, though, on the mid-year assessment of more than 3 million people out of work.
The 2.8 million is a forecast. The DIPD predicts more redundancies this winter -well, we are in the middle of the winter - but it does say the number of people in work is set to fall by 250,000. That, of course, bears in mind there has been a fall in the jobless numbers. But that often comes about because of people not seeking work, or falling out of the unemployment statistics.
Regular viewers will know some of these faces. They are the faces of Jenny Torrie, in Hong Kong, and Jason Young, who is in Atlanta. These were two of our first "Job Questors". They are the ones who we have been following as they search for new roles as part of our "Job Quest" series.
Now, Jenny was laid off in events management, she comes from Ireland. She moved to Hong Kong. She is now sought and received work as an English tutor. Les Young, I'm sorry, Jason Young, I beg your pardon. Jason Young, from Atlanta, is looking for a marketing position. It took him five months. He got a position in sales, halfway across the country. He moved his family from Atlanta, Georgia, to Texas.
Les Young, who incidentally, is no relation to Jason, from Atlanta. His work dried up in insurance sales. He lost his home to foreclosure. And he decided to start his own business. They were some of the "Job Questors" that we followed over the first few months. Now, as we wrap up this series, let's meet the latest batch of "Job Questors".
ANNOUNCER: Last week on "Job Quest":
RODRIGO MEDINA, SPAIN: This whole situation, the last year, has affected my personal life greatly. My wife and I have been trying to have a baby for the last year or so, and we have put that plan on hold because of my work situation.
LISA MATHESON, ATLANTA: I've been on the road, or up in the air, since 7 a.m. Eastern Time and it is now about 7:00 o'clock p.m. Eastern Time. And I've landed here in Washington. It is a completely different world. It is like landing on the moon.
So, the last time that we spoke, I had recently had an interview in Washington State with an energy company. But unfortunately I didn't get that job. You know you build yourself up to take on this new role, to be in a new environment, and then when that doesn't happen, you then have to reset and realize, OK, this wasn't maybe the done deal a lot of my friends and I thought that it was.
After I did not get the position in Washington there was a several week lag. I had some volunteer opportunities in that time. And then I unexpectedly received two phone calls within one hour for communications roles, here in the Atlanta area, with software providers. And I'm very excited about this opportunity. So, for the first company, I have had three formal interviews, each with the next level of manager.
Then the second company, I had an initial screening interview with the recruiter. So, with the companies that I have progressed the farthest on, I feel very confident about the role.
When we first spoke about what was happening with me and how my time line looked, especially, in regard to finances, finances are incredibly tight for me right now. Being a person who is a giver, I like to give, and I'm not able to do that. And that is something that hurts me inside, that I can't do the things for people that I would like to do.
RAJA KANAFANI, BEIRUT: Since the last interviews things started to look up for me. I got a call from a friend who works in a company that does marketing. He asked me for my help on a project for a client. I also have project (ph) for one of the town's leading fashion designers. It is a relief to actually be able to breathe easier.
OK, so basically I got another gig now at some photo shoot for some a client, he's a landscape architect. They just confirmed they want me to come and shoot their premises. Things are looking better.
FRAN HALES, LONDON: About a week ago, after having virtually no response at all, I had three calls in a day. One was about a potential job that I'm being put forward for. Another one was an agency who is now approaching companies on my behalf to see if they have got budget and whether or not they have a position for me. Another one was a telephone interview and another one, again, was a potential job from an agent.
Recently I have been feeling a lot better, especially since I've had some response back. And I have an interview lined up this week, which is quite exciting, because it has been quite a while since anything has happened. I think that the issue for me at the moment is that I want to get a job before Christmas and we're quite close to Christmas now. So, if that happens that will be fantastic.
If not then I will probably look at trying to do some temp work, over the Christmas period. And I'm going to just keep on trying to get the position that I want.
(CHIRON: Fran has since found a stable freelance position)
RODRIGO MEDINA, BARCELONA: The part-time job that I have right now is facing some difficulties, because the company that I'm working for is also suffering because of the crisis and I don't know if the company is going to continue or not. So, that job is a month-to-month basis and it is very unstable. So that is why I think my home (ph) is still very unstable because we don't know where we are going to be next month.
Maybe a job might come on the way right now, but the amount of time that I was giving to the job search, which probably two or three days out of the week, I'm not doing that right now anymore. I'm just concentrating on what I have.
(CHIRON: Rodrigo is now taking some time to start his own business with a friend.)
LES YOUNG, ALTANTA: Yeah, what I'm doing here is I'm just spreading out a collection of the bills, feeling very bad about it. I mean, just the thought of it is causing unpleasant memories.
So this is certainly helpful Mr. Hubbard (ph), and I really appreciate your time and effort with this.
How can I help you, then maybe in turn we can help each other, in our job search?
(CHIRON: Les found a job in insurance sales. He still hopes to start his own business, in coaching public speaking.)
QUEST: Our "Job Questors", all of whom finally found employment. The series produced with Mr. Showalter, and of course, "Job Quest" and integral part of the last nine months. Because it has been an important part as we talk about this jobless recovery.
Michael Erwin is an employment specialist from CareerBuilder.com. He joined me earlier and I asked him if 2010 will be kinder to job seekers?
MICHAEL ERWIN, CAREERBUILDER.COM: I think it is definitely going to be a new year. And I think in the United States, especially, we are going to find that employers are kind of shifting from their cost-containment into more of a growth pattern. And that is going to open up more jobs across the country.
QUEST: Are those U.S. employers, are they going to be looking for full-time, or are they going to be extending existing employees into longer hours. Because as you know, there is many ways to skin the cat, before you take on new employees.
ERWIN: Well, I think that to use your words, skinning the cat, they have been doing that for the past year. And now we're really going to see 20 percent of employers say they are going to add full time new employees to their head count. So that is good news in the United States.
QUEST: They may be adding new employees, but the compensation packages they will be offering, obviously, could well be at lower rates than were previously seen, with less generous benefit packaging.
ERWIN: Well, the good news is that they are going to be hiring employees. And employees are going to be able to start to get a salary. The bad news is, is that the jumps in salaries, the increases, on offers to initial employees and to existing employees is going to be lower than it has been in past years.
On the bad side, also, is the fact that they are going to have to cut some perks to keep costs down and to really strengthen their bottom line.
QUEST: You see, that is the fascinating part isn't it, in many ways. Which areas, assuming I was looking for a new job, which areas should I be looking at in particular?
ERWIN: Well, you are going to be looking at more of the growth areas. That is going to be IT, that is going to be sales, that is going to be customer service. Companies really want to rebuild their businesses in 2010. And they are going to be brining in the people who can do it. So look in those industries. And even if those aren't the industries that you are used to working in, there has to be a way for you to transfer your skills into them, so you can also get employment.
QUEST: When we look internationally, are we seeing the similar sort of trends? Are we seeing people looking, that will be hiring, they may be on less generous benefits, but there will be jobs to be had?
ERWIN: I think that the world economy is still healing and it is going to take time to bring back all of the people who have lost their jobs. I think it is a positive sign, though, that especially in the U.S., that we are moving from cost containment to growth. And I think that you will see that across that the world.
QUEST: Finally, the one common thread, from a lot of our "Job Questors", was that they all wanted to start their own business. They all had this urge to go out on their own. I expect, this is something you have seen before. How realistic is this?
ERWIN: I think it is very realistic. I think if you look at recessions past, a lot of the growth came from small businesses. And these are people who went out and started their own businesses. So, I say follow your dreams and go after that small business. Be an entrepreneur, start whatever you can. Just understand that it is going to be a harder struggle than it would have been a year or two ago. And it is going to be a little harder to get the financing that is needed. But I say, stay the course, entrepreneurship is definitely rebuild economies around the world.
QUEST: Mike Erwin, joining me earlier from Chicago. I'll have a "Profitable Moment" on our "Job Questors" at the end of this program.
For those in work, few of us can imagine getting paid the sort of bonus which has been lashed out of anger, even after they got a government bailout, no wonder some people are angry.
(BEGIN VIDEO CLIP)
MATT TAIBBI, REPORTER, "ROLLING STONE": We gave them a whole bunch of money and then they just kept it and turned it into bonuses.
(END VIDEO CLIP)
QUEST: So, the critics take aim, and in the firing line, Goldman Sachs.
QUEST: Goldman Sachs is reaping the rewards of this year's upturn in investment banking. GS is on course to make $11 billion and pay out billions more to its employees. Maggie Lake, now in New York, takes a look at why Goldman has become the lightening rod for public outrage.
CROWD CHANTING: The bankers got a bailout, we got sold out!
MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT (voice over): From outraged Americans to lawmakers on Capitol Hill.
UNIDENTIFIED MALE: If you won't give the bonuses back, we will tax them back.
LAKE: All the way up to the president of the United States.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I did not run for office to be helping out a bunch of fat cat bankers on Wall Street.
LAKE: This was the year that anger over Wall Street bonuses and bailouts reached the boiling point.
ANDREW ROSS SORKIN, NEW YORK TIMES: There has been public outrage about athletes and other people's incomes, but now it is really focused on Wall Street in a new way.
LAKE (On camera): As 2009 progressed much of that outrage was directed at one investment banking firm, Goldman Sachs. While it's headquarters here on Broad Street is nondescript, it plans to pay out billions of dollars in bonuses is one of the richest on Wall Street.
(voice over): Just one year after receiving government assistance, Goldman's 2009 bonus pool is on track to hit $21 billion, matching 2007's record levels.
"Rolling Stone" reporter Matt Taibbi, who famously described Goldman as, quote, "a great vampire squid wrapped around the face of humanity, " says the public has a right to be angry.
MATT TAIBBI, REPORTER, "ROLING STONE": There was sort of an implicit agreement that Wall Street was going to be rescued, and they in turn were going to loosen the reigns on credit and help stimulate the growth of real business. Well, what ended up happening is just the first part happened, and the second part didn't. We gave them a whole bunch of money and then they just kept it and turned it into bonuses.
LAKE: In a bid to quell some of the backlash, Goldman announced 30 of its senior executives would receive restricted stock rather than cash bonuses this year. But the move has done little to put to rest the perception that at Goldman Sachs profits come before everything else.
Bethany McLean, a contributor for "Vanity Fair" who used to work at the firm, says criticism of Goldman isn't just coming from Main Street, but the inner circles of Wall Street.
BETHANY MCLEAN, CONTRIBUTING EDITOR, "VANITY FAIR": In the 1980s Goldman didn't do hostile takeovers. The firm was all about servicing clients, investment bankers kind of ruled the place. And it has really changed to a place where Goldman is much more involved in committing its own capital, which means Goldman has an interest in what is taking place. And it is a firm that is really ruled by the trading side of the business now. And that is a big cultural transformation at Goldman. And you have some wariness among former bankers, as to whether that transformation is a good one.
LAKE: One pension fund has made its views on Goldman's pay packages very public. The Security Police and Fire Professionals of America Retirement Fund, which says it has money invested in Goldman, has filed a suit, which claims this year's compensation levels are excessive and not in the best interest of the company, or it's shareholders.
Goldman says the case does not have merit and vigorously defends its pay structure, saying it is needed to attract the best in the business. And even the firm's harshest critics admit that Goldman's investment in top-notch talent shows. Though it did receive government help along with the rest of the industry, Goldman has rebounded more strongly than its peers. Profits have soared and so has its share price.
But as lawmakers consider new regulation for banks, many are taking a hard look at the cost of that success.
MCLEAN: The real question is this notion, what do Goldman Sachs' profits mean for the rest of us? I think before he full crisis hit, we all might have said, well, profits in an of themselves a good thing. And now, I think after this crisis, you look at those profits and you say, but what do they mean for society? Does this mean that Goldman Sachs is providing a service that is fundamentally good for the rest of society, or are they providing, doing something that means the people at Goldman get really rich?
LAKE: Money and morality. Major issues that power brokers on Wall Street and in Washington will be grappling with, throughout 2010.
Maggie Lake, CNN, New York.
QUEST: And I'll continue to look at what 2010 holds for business in a moment. Stocks, currencies, and which markets will beat the rest? Bankers, have they learned their lessons. And if they haven't what will the rest of us all do about it?
QUEST: Good evening. I'm Richard Quest, QUEST MEANS BUSINESS. This is CNN.
Just a couple more days to go before the end of the year and the decade and the trading -- whatever you like to call it -- and European stock markets all ended the day higher. As we told you earlier, London's FTSE is now the first of the world's major equity markets to return to where it was before Lehman Brothers collapsed. Don't get too excited: It's still way down on the decade.
Mines had a good day. Metal prices were higher. Copper had an extraordinarily good run for the day. Liberty International, Britain's largest shopping mall owner, was a top gainer, sales and the shoppers raced for a bargain. Metal and energy producers were also in favor with investors. Steelmaker Arcelor Mittal and the power company E.ON both closed higher.
Don't expect, though, too much in terms of markets and what those movements that you do see -- bear in mind things are very thin on the ground, which is why we take with a pinch of salt the Dow Jones Industrials up 17. Better up 17 than down if you're long, but 10,564, volume is pitifully low, so this is really very much the -- the dog days of -- of winter between Christmas and New Year.
It's time to take stock, though, of what has been an extraordinary year for markets, at least since the March the 9th lows. I sat down with Bob Parker, the vice chairman of Credit Suisse Asset Management, to ask whether or not he thought the world's decision-makers have made a difference, particularly as they got to grips with the crisis.
QUEST: Did policymakers -- and I suppose by that we're talking about finance ministers, the G-20, central bankers -- did they do their business well this year?
ROBERT PARKER, CREDIT SUISSE: The central banks moved very quickly. Finance ministers moved very quickly. And I think it's worth noting that, in the G-3 developed economies, this may well have been the most deep recession since the 1930s, but also it was a very short recession. You know, if one looks at the data, most countries in G-3, the downturn in economic activity only really lasted for 10 months.
QUEST: But that masks the depths of the severity of it and the fact that there is no feel-good factor afterwards to bounce back to.
PARKER: Well, I think the -- the key answer to your question is, what is going to happen to unemployment? Now, I would argue that, for example, in America, I think unemployment is currently peaking at just over 10 percent. But the problem -- and we see exactly the same problem in Europe -- is that the decline in unemployment is going to be very slow, indeed. And by the end of 2010, we could still see American unemployment close to 9 percent. That's an elevated level. That has negative implications, obviously, for the state of the consumer.
QUEST: The dollar played a huge role in much of our coverage this year and the weakness of the currency. Was it inherently weak? Or was it pushed weak by a lack of fortitude by the administration and basically the need of exporters?
PARKER: Well, if you look at American export data, that is one real bright spot in the American economy. And although they will always deny it -- and the American administration always say it is in their interest to have a strong dollar -- I would argue exactly the opposite. I think you've had a policy of what we would call benign neglect towards the U.S. dollar, and a -- and a weak U.S. dollar has benefited the American economy.
QUEST: In all of this, the stock market moved majestically higher, like a rocket...
QUEST: ... 30 percent, 40 percent, 50 percent in some markets. It's given back just a bit. It led many of us to say, what was happening -- I mean, it had obviously been oversold, but was it justified?
PARKER: If we go back to March 2009, stock markets and most valuation measures were extraordinarily cheap, so we've had a rally from them, very oversold, cheap valuation in the first quarter of 2009. That rally has obviously been fueled by low interest rates and very significant amounts of liquidity being injected by the central banks into the global monetary system.
I think another point which you and I have discussed in the past, which I think's critical, has been from the second quarter of this year a very clear improvement in corporate earnings worldwide. And actually, if we look at the crisis of 2008 and early 2009, the corporate sector has come out of this very well.
QUEST: So to follow on from that, you're basically saying there is some, perhaps not total, but some justification for the rise that we've seen in the market?
PARKER: Absolutely. I -- I think the rise in equity markets in 2009 is totally logical.
QUEST: Does it continue in 2010?
PARKER: I would argue that we are going to see equities -- global equities, not to say there are going to be some differences, right, from sector to sector and from country to country -- but I would argue that, when you and I have this conversation in exactly one year's time, equities will have significantly outperformed all other asset classes, such as bonds, such as cash, such as real estate. So I think the equity rally goes into 2010. We may not have -- and I don't think we will have -- some of the very spectacular returns, but you're still going to have strong positive returns.
QUEST: We'll just take a quick-fire questions on 2010.
QUEST: Interest rates in the developed world?
PARKER: By this time next year, end of 2010, I think Fed funds rate at 1 percent, European Central Bank at 1.5 percent, Bank of England at 1 percent, Bank of Japan, no change, still 0 to 10 basis points.
QUEST: Unemployment, we touched on it a second ago. Any sizable reduction in unemployment during 2010?
PARKER: It will come down, but it's going to be slow.
QUEST: And a final question. Have bankers learnt their lessons?
PARKER: I certainly hope so. I'm not going to say yes or no. I think one answers that question with a hope.
QUEST: Bob Parker talking to me earlier in the month. In just a moment, the new year and Lebanon's economy. Poppy Harlow has been to Lebanon, took the opportunity to find out from the locals what they think, and we'll take the opportunity to show you some of our holiday snaps.
QUEST: As we consider what we'll be doing in 2010 and the way in which QUEST MEANS BUSINESS will become your program as much as mine, of course, don't forget our e-mail address. It is email@example.com. That is where you can get in touch with us on that score. We will also be making much more use next year -- we started this year with a bang on Twitter and the e-mails and Facebook, but you wait until you see what we've got up our sleeve next year. Our Facebook page is "Quest Means Business." Our Twitter is @richardquest. And there's always firstname.lastname@example.org.
Sometimes it does pay to be a little bit different, as perhaps we certainly know on this program. So to be even more different, we sent Charles Hodson deep into the English countryside to show you why. Back home in rural southwest England, he found some unusual enterprises that, despite the recession, are chugging along quite nicely.
CHARLES HODSON, CNN CORRESPONDENT (voice-over): The Santa Express pulls out of Williton Station with a heavy cargo of sacks full of presents and excited children. That looks like a tough chimney to climb down, but miraculously, Santa is safely onboard, unsinged and working his way through the train.
UNIDENTIFIED MALE: And merry Christmas to you all.
HODSON: This special service is a finale to a record-breaking year for the West Somerset Railway, set up more than 30 years ago when the line was threatened with closure. Britain's longest heritage railway, part charity, part commercial, will carry getting on for a 250,000 people this recession year.
MARTYN SNELL, WEST SOMERSET RAILWAY: I think lots of people have stayed at home this year. They haven't gone abroad. We have put an awful lot of work into building up the -- the satisfaction of coming on the railway. We have a wonderful countryside through which to run, and people smile at the customer, because they want to be here.
HODSON (on-screen): Are you, in effect, a railway which makes money?
SNELL: We're a railway which makes money because we have so many volunteers.
HODSON: Nature and heritage are two very powerful marketing levers, keys that can unlock the door to surviving the recession.
(voice-over): Over at Cotleigh Brewery in Wiveliscombe, they're also wise to that, brewing traditional ales branded after endangered birds of prey. The company helps fund work to protect them. Co-owner Fred Domellof gives me a tour.
(on-screen): So what -- what's happening in there?
FRED DOMELLOF, COTLEIGH BREWERY: Well, at a moment, we have milled our malt, which -- it becomes the grist. And the process is like a shower. It's barging hot water at a certain temperature to obtain the sweet liquor from the grist.
HODSON (voice-over): Domellof bought Cotleigh six years ago and is moving away from selling casks to local pubs towards bottle brands. And after months of research and regulatory procedure, he's shipping to the United States.
DOMELLOF: It's hand-crafted, premium beer, and this is what the Americans are looking for, so successfully launched into Chicago with the first consignment last week. We thought the combination of a hand-crafted beer with fantastic imagery of our bottles will have a unique selling point.
HODSON: Brewery sees the sophisticated U.S. beer scene as a great alternative to the weak and crowded British marketplace. Something the English have never managed to sell to Americans, though, is pantomime, a traditional knockabout comedy performance.
(on-screen): Don't be too taken in by the hilarity of the pantomime. Behind all this, there is an academy which is acknowledged as excellent. And integral to that academy is a business, a commercial business, with rather special aims.
Foxes Academy in the resort of Minehead trains 73 young people with mild learning difficulties, some with Down syndrome. They learn hospitality and catering skills, not in a classroom, but in a real hotel where guests pay to stay in the rooms and in a restaurant which hosts more than 100 events a year. Confidence is key.
SUE JENKINS, FOXES ACADEMY: It is very important to us that our youngsters understand how you need to work in -- in the real world, not in any kind of simulated situation. A hotel business side of things does -- does provide income, obviously. We do -- we do -- we do probably better than any other hotel business in the town. But even so, on -- on the scale of our costs, it doesn't make a big ding.
HODSON: The academy's main funding does come from government grants. But once again, commerce and imagination work together to provide a resilient local business.
And it is all about dodging the worst of what's burning up the economy, as this performer at a December evening market demonstrates.
(on-screen): So as 2009 draws to a close, there does seem to be a fair bit of festive cheer here in West Somerset. So why has this remote rural area seemingly survived the recession in such good shape? Well, two things spring to mind: first, ingenuity, but above all, sheer hard work.
Charles Hodson, CNN, West Somerset.
QUEST: And now we can all see why Charles hoofs it off back down there every weekend.
QUEST: Welcome back. According to the IMF, the Lebanese economy is on track to grow as much as 7 percent this year. That seems like an enormous amount. The country not only weathered, of course, disputes and wars, but the global economic crisis, as well. Cnnmoney.com's Poppy Harlow has just returned from Lebanon.
And you were on a tough assignment, an assignment to get to the bottom of things, weren't you? And you still managed to find time to do a bit of reporting.
POPPY HARLOW, CNN CORRESPONDENT: Yeah, that's exactly right. I mean, this is a vacation. We were actually in Lebanon for a wedding, but I decided, when else am I going to be in Lebanon and ask people about the economy there? So I literally took this little Flip camera all around Beirut and all around the Beqaa Valley, which is (inaudible) Hezbollah site to the north of Beirut, and talked to people about the economy.
It's very interesting, Richard. There were a lot of similarities to the U.S. economy. They have a major debt issue, a major, major debt problem in Lebanon, much worse than in the United States. They've also got an issue with joblessness. They have about a 9 percent unemployment rate. I should say, that's much better than recent years, where their unemployment was actually, by most accounts, over 20 percent.
But the overall feeling there is that a lot of the folks, Richard, have gone to the gulf for work. And now, following the Dubai debt crisis, they're -- they're coming back to Beirut, Richard.
QUEST: Before we hear from some of the people that you have talked to, the one thing -- and I -- and I have a confession here, that Beirut is one of the sites (ph) I've -- I've yet to visit -- but the one thing I hear is that there is a vibrancy -- and I don't just mean a nightlife. I'm talking about an economic vibrancy there that perhaps a lot of people might have been surprised at.
HARLOW: They used to call it the Paris of the Middle East. And by many accounts, it still is. They do. They have a big tourism industry, but it's -- it's been hurt because the most recent war ended just three years ago. There's a lot of political instability, but they have a big textiles industry, a huge textiles industry. They have one of the biggest ports, if not the biggest in the Middle East, so they have a big shipping industry. And -- and tourism is huge there.
So there is a vibrancy. And by many accounts, Richard, I mean, I live in New York City, and the nightlife in Lebanon feels a lot like New York City, if not even escalated a bit. I mean, there's a real Western feeling there when it comes to socializing and entertainment and eating out at restaurants. It's something very, very unique, I think, to Lebanon, compared to -- to most of the region, Richard.
QUEST: So what do people tell you? That's your impression. What were the locals saying? Let's hear from them.
HARLOW: Yeah. Yeah, let's take a quick listen to what they told me about the economy, essentially talking about the fact that there are still a lot of issues.
UNIDENTIFIED FEMALE: ... unstable political situation in Lebanon. It has been always a problem. The money is there. It's the way the government disperses things around here that's a little fishy.
UNIDENTIFIED MALE: The rents are going higher.
UNIDENTIFIED FEMALE: Prices of the products that -- that you need to buy daily are -- are increased.
UNIDENTIFIED MALE: And the salaries are too low here in Lebanon. That's the problem.
UNIDENTIFIED FEMALE: Unemployment problem has -- definitely has trickled over to here. A lot of the -- the -- the individuals that were working in -- in the gulf are now back and unable to find jobs and are having to settle for, let's say, $600 a month with no benefits.
UNIDENTIFIED FEMALE: I guess many people who are graduated and very qualified, and they're working at not -- they're working in jobs that are not related to their majors, or simply they're not working.
UNIDENTIFIED MALE: It's hard to find some jobs here, because we have no big firms and companies, so we -- if we want to work in a big company, we should go to the gulf or Europe or the United States.
UNIDENTIFIED FEMALE: We hope that they would create a better opportunity for them to find jobs here and to settle again in Lebanon, because we are also losing the great Lebanese intelligence.
QUEST: Poppy, so much for your journalism and finding out. What about this picture, you doing some sightseeing? It wouldn't be a sightseeing trip if there wasn't the obligatory camel involved in it. And, Poppy, Poppy, Poppy, you're flying economy? What? I mean, you're destroying the myth of you there.
HARLOW: I will tell you, Richard, I tried to get upgraded to first class. That was from Lebanon to London, but I was successful from London to New York. I talked my way into first class on American, didn't pay a penny, so I was successful in the end, Richard, flying business class instead of economy.
QUEST: All right.
HARLOW: That's what one does in a recession, right, Richard?
QUEST: Poppy Harlow, wouldn't like to take her on (ph) in economy. I'll be back with the profitable moment in a moment.
QUEST: I'm afraid Poppy Harlow's holiday snaps took our profitable moment, so no time for that tonight. But that is QUEST MEANS BUSINESS for this evening. I'm Richard Quest. Whatever you're up to in the hours ahead, I do hope it's profitable.
Christiane's after the IDesk headlines.