Return to Transcripts main page
QUEST MEANS BUSINESS
World's Tallest Skyscraper Opens in Dubai; U.S. Authorities Review Security List
Aired January 4, 2010 - 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 sky's the limit. Dubai unveils the world's tallest building and we're there live.
(inaudible) or just penny pinching? RyanAir is accused of cheating customers life fools.
And techies of the world unite. We look at the gadgets of the near future.
A new year, I'm Richard Quest, one thing remains the same, I mean business.
Good evening, the Burj Khalifa, the new name for the tallest building in the world. And it is now open for business. The building shed its old name. It was called the Burj Dubai, but now, of course, in a spectacular opening ceremony, which lit up the night sky, some say it is the defining symbol of Dubai's thirst for excess. Others believe it will revive the emirates flagging fortunes.
But the way the thing just lit up, it spoke more perhaps of a decade past than a decade present. We'll talk about that in just a moment.
The house and tower, will house the planet's highest mosque, it's loftiest observation deck, and the first Armani Hotel. Amongst the things we learned today, the building officially measures 828 meters in height. More than half a mile high. More than 300 meters taller than the next building, which of course is the Taipei 101, in Taiwan. There is the Burj Khalifa, there is the Taipei 101. And so we go on, the old Sears Tower, now called the Willis Tower, it towers above that by more than 350 meters. It also puts the 552 meters Petronas Towers, all right, so the Petronas Towers have got the bridge in between, which is pretty impressive stuff. But nowhere near the size.
As for the granddaddy of them all, New York's Empire State Building, it looks positively small in comparison, at 443 meters. And it is more than three times the size of Britain's tallest building, which is Canary Wharf, at 244. London's Big Ben, if Big Ben was here, it would be somewhere down there and it suddenly wouldn't be worth talking about. You get the idea.
This thing is a very, very, large building. Emaar's chairman, Mohamed Alabar explained what the Burj Khalifa means to him and to the emirate.
(BEGIN VIDEO CLIP)
MOHAMED ALABBAR, EMAAR PROPERTIES: Well, the question of why should we build a tall beautiful building, I think, it is a very emotional decision. Because it is truly a reflection of the people who live in the city. It is a reflection of the environment of the city that is optimistic, that is happy, that is cheerful. It is also a reflection of the leadership and the attitude the leadership has here, which is yes, it can be done. We are good, collaborating together, bunch of people who love life, love achievement, open to the world. So, I think it is a symbol of achievement.
(END VIDEO CLIP)
QUEST: Indeed, now in just a moment, we'll put some economics into all of this, with Dominic Dudley, the deputy editor of the Middle East Economic Digest. We'll be talking about whether or not it makes sense to have such a large building, even when it was built.
That, in just a second, first though, you need to see the building, you need to feel it, you need to see what's around. CNN's Mohammed Jamjoom is in Dubai where the celebrations continue.
MOHAMMED JAMJOOM, CNN INT'L. CORRESPONDENT: Well, Richard, as you said this is opulence on a grand scale. And I can tell you, we have seen those graphics all day today, comparing the Burj Dubai, or as it is now called, the Burj Khalifa, to the other tallest structures in the world, but until you see it with the naked eye, here, it is truly astounding.
Earlier today we went up into the observation deck. That is the highest observation deck in the world. It is at the 124th story of this building. The panoramic views of Dubai, inside that room are just stunning. They have a computerized telescope that let's you zoom in to pretty much any structure or any building or any place around Dubai, that you could want to look at from that vantage point.
As you said there is an Armani Hotel. There is the world's tallest mosque. That is up on the 158th floor. And everyone we spoke with today was so happy. They were so bursting with pride, some of them, some of the Emiratis that were here, there were thousands that gathered to watch the fireworks display. Some of them said to us, yes, Dubai has faced a bad economic crisis recently, but all of them believe, the ones that we spoke with, that this tower, the one that is behind us is going to turn things around for this Emirate, Richard.
QUEST: Quick question, though, do you think they always intended to call it the Burj Khalifa, or was that a political decision following a more recent event?
JAMJOOM: The anecdotal evidence that I gathered on that this evening, seems to indicate that that was more of a political decision. Because obviously, Dubai has reached out to Abu Dhabi in the past few months, trying to get support to get it through its credit crisis. Abu Dhabi has been giving money to Dubai. So many think that that was sort of a show of fealty. Nonetheless, really this was Dubai's night. This was Dubai's shining night, this glimmering tower, this amazing fireworks display, and the crowd was so happy, that no matter what would happen, whether Sheikh Mohamed would enter the building, whether the fireworks would go off. Even hours before anything was happening people were singing and clapping. We're talking about people that were old, that were young, everybody was ecstatic about this building, about what it represents. Not just as a new icon on the skyline here, but they do believe that this means Dubai has turned a corner; and that the rulers of Dubai and Emaar are investing in its future, and they are investing at the right time so they can make sure that this continues to be an economic powerhouse, Richard.
QUEST: That is a good point for us to leave it with you, Mohammed. And turn to my next guest and discuss the question.
An economic power: Now we know the problems Dubai has had. And it is futile for you and I to discuss whether or not it makes sense to have this building. Whether we like it or not it is there, and it is open.
QUEST: So, where does it leave Dubai?
DOMINIC DUDLEY, MIDDLE EAST ECONOMIC DIGEST: Well, it leaves Dubai being able to enjoy one good day of good news. But the rest of the year ahead isn't looking particularly happy for it. There is still mountains of debt, it is now clear how it will pay all of its debts off. So, this building marks - it helps create the brand image that Dubai would like to have around the world. But it could just as easily be a reminder of all hubris that had kind of built up in the Emirates over the last five years.
QUEST: Now, you are not being mealy mouthed, here, are you? I mean, you know it is an achievement to put a building up like this up in any part of the world.
DUDLEY: It is a great achievement, yes. No doubt about it. It is a fantastic -
QUEST: An Emaar, the company that has done it, has been one of the few Dubai entities that has restructured. And is, if you like, not on shifting sand.
DUDLEY: Yes, it is difficult to know exactly what their financial position is, if any of these great big Dubai companies at this stage. As you said, technically, it is a marvelous achievement. It doesn't hide the problem that Dubai's got there.
QUEST: When Dubai finally does put to rest the problems that it has got, as indeed it will, will it be less, is there a justification for the financial industry to be based there. I mean, that has always been the common question. Yes, you can build ski slopes, but is there a real justification for a financial sector of Dubai's major.
DUDLEY: Well, Dubai is by far the best place around that region, around the Middle East Gulf, to be, if you a bank, it is open, it is well- placed, it is halfway between the far Eastern Markets and European markets. It is better than -there was an awful lot of economic activity that goes on in the Gulf, mainly because of the oil and a result of that. So, there is a role for a financial hub in that region. And Dubai is the best place to be actually.
QUEST: And it has many years head start over its competitors to a large extent?
DUDLEY: Absolutely. Kuwait, Capsar (ph), Bahrain, Riyadh, they would all like to be in the position that Dubai has in terms of a financial hub. But they have some way to go yet.
QUEST: So, this building, we will never, knowing the opacity of the - the lack of transparency in the accounts, perhaps, we will never really know for some time to come whether it is making money or whether it is a commercially viable operation.
DUDLEY: No, in the meantime, there are still plenty of spare office space and apartments and hotel rooms around Dubai. But they'll do everything they can to make a success of this project.
QUEST: Many thanks, indeed, for coming in.
DUDLEY: Thank you.
QUEST: Now, the markets are open and doing business in New York. This is how the Dow Jones industrials are trading. A strong, nice, robust session to start off the new year. Up 1.55 percent, 160 on the Dow. And who said it was going to be a slow start to the year.
The markets, you are up to date, we will give you the European markets in a moment or two.
Fionnuala Sweeney has the CNN world headlines.
QUEST: And while Fionnuala was talking some news coming into CNN. New developments in the airline security in the wake of Christmas Day's attack. We are getting word that the U.S. is beefing up its watch list. Jeanne Meserve joins us now from Washington.
And reading what is supposedly being done, Jeanne, I'm not entirely certain I follow. So, perhaps talk me through what has happened.
JEANNE MESERVE, CNN NATIONAL SECURITY CORRESPONDENT: The government has a huge data base, Richard, of about a half a million names. Our guy who tried to blow up the airliner on Christmas Day was in this huge data base. There was a lot of criticism that he hadn't been moved up to get a higher level of scrutiny on a smaller more-selected list.
Well, in the wake of that criticism U.S. counter-terrorism officials have gone back, and they have gone over this list. They have scrubbed it. Looked for new information. They looked particularly at countries and regions where there are terrorism concerns. And we are told by an official familiar with the process that they have moved hundreds of names off that large data base into the smaller watch list. These would include the no- fly list. That is people who can't get on airplanes, and the selectee list, people who have to go through mandatory additional screening when they arrive at an airport.
So, it is an effort by the U.S. to make sure they have factored in all their intelligence, the latest intelligence in an effort, obviously to also rebut that criticism they received in the wake of the Christmas Day attack, Richard.
QUEST: Now, bearing in mind, Jeanne, that we are half a million people on the widest list, so-called TIDE (ph) list, and now they are moving them onto these other lists. One imagines that the effects of that will be felt quite quickly. And possibly, you know, within days people trying to get on planes, who may have mistakenly been on one list or another list, we are going to see some real effects of this.
MESERVE: You are, but you have to wonder how many of any of these - how many of these people would be flying on any given day or flying at all. So, I can't imagine that you are suddenly going to see hundreds of people pulled aside at an airport. You might see a few more, particularly at some of those airports where they tend to see controversial travelers. But I don't think it will have a profound impact on travel, Richard.
QUEST: Jeanne Meserve, in Washington, thank you.
MESERVE: You bet.
QUEST: Testing the mood in Britain's boardrooms. The men and women in charge of company finances have been talking about what they expect from 2010. What a difference a year makes. And I'm a 2010 person, none of this 2000 and 10, that Hala was talking about earlier. 2010 for me.
QUEST: I promised you the European markets. And here they are. They had a roaring start to the new year. All the major indices were up at least 1 percent. The Paris CAC currant closed with nearly 2 percent, for the day. Banks are mostly higher, RBS, more than 9 percent, on a media report of a possible investment from Brazil. In fact, RBS is ostensibly getting investments in Northern Rock (ph), and now they are getting investments in just about every part of the world. The French carmaker, Renault and Peugeot, strong gains. And the drug maker Roche gained nearly 3 percent in the Zurich market.
Now, so you are getting the impression we got a strong Wall Street, we've got a good Euro bourses. And there seems to be an increasingly upbeat mood in the boardroom these days, in Britain, at any rate.
According to the accounting firm, Deloitte, the UK chief financial officers, CFOs, are starting the year with renewed -look at that! Renewed confidence, confidence is up, about the financial system. Fears over a lack of liquidity (UNINTELLIGIBLE), that's the credit crunch for you. And that is a confirmation that it has loosened its grip. And 78 percent of CFOs, 78 percent, who took part in the survey believe that the British banking system is strong enough to sustain a recovery.
Well, don't get the champagne glasses out just yet. There were widespread fears of a double dip, where the economy begins to recover, only to sink back into recession.
By now you are saying hang on a second. They got all of this optimism, but they're worried about a double dips. Is that not a contradiction in terms between these two things? It is a question for Deloitte's Chief Economist Ian Stewart, who joins me now.
Well, which is it? Is it renewed optimism or is it double dip?
IAN STEWART, CHIEF ECONOMIST, DELOITTE: Well, they are more optimistic about the financial prospects for their business and more so than for a couple of years.
I think what's happening is the guys don't expect a booming economy, but we are moving from a world in which the economy has contracted by 5 percent, to one in which it is maybe going to grow one to two percent. In addition, the financial side of balance sheets, in the corporate section in UK, are in pretty good shape.
QUEST: Let us just deconstruct that, because the one thing that CEOs and CFOs, sitting where you are, have told me over the last 12 months is that in a recession it is time to put your house in order. Is that what they have been doing?
STEWART: They have. A year ago we said, how are you going to cope with the credit crunch and the recession? And they said three things. We are going to improve cash flow, we are going to cut costs, and we are going to stay very, very close to the providers of capital, to the banks, to capital markets. A year on they say they have done those things. And I think that actually, the CFOs have actually had quite a good credit crunch. They have kept a lid on cots. And if you look at profitability in the U.K., it hasn't collapsed to the extent that people expected a year ago.
QUEST: And what is their preferred route for raising of capital? Because we saw at the end of last year, those numbers on debt issues - which was quite high - a certain amount of corporate bond issues, which was also quite high?
STEWART: The big change in the last 18 months is that CFOs have gone from loving borrowing from banks, to wanting to get money from the equity market, and from the corporate bond market.
STEWART: Things have improved in terms of -
QUEST: Is that because the banks will not lend, or that they feel there is a better opportunity from the markets?
STEWART: I think it is a supply and demand. I think banks are less willing to lend than they were a couple of years ago. But it is also the wholesale markets have reopened in a very big way. And you know we have seen huge equities issuances over the last 12 months; the highest in like 14 years.
STEWART: And I think corporate are responding. These are big companies, remember, so you know they can go to the wholesale markets and they can raise capital relatively easy.
QUEST: By the billions.
QUEST: In the billions.
Do you see any perversion, perhaps, in you know, I'm all right, my company is all right, but the economy may be going into a double dip?
STEWART: Well, I think that is a little unfair. I mean, I think one of the consequences of the way in which CFOs have managed balance sheets over the last 12 months, is actually you haven't seen the kind of job shedding people were talking about at the start of this recession. Actually unemployment hasn't risen as quickly as many anticipated. And I think that is partly because companies have been able to hold on to people. They have looked at innovative ways of curbing employment costs.
QUEST: But do you share their optimism?
STEWART: I am probably a little bit more confident than the consensus.
STEWART: And I think what this survey shows, actually, is that the measures that are taken by central banks a year ago, are starting to impact the corporate sector.
QUEST: Come back during the course of the year, please. We need to talk more about this.
STEWART: No, I'd live to .
QUEST: Thank you very much. Nice of you to come in.
Now, as a frequent air traveler I like to get to know what I'm paying for. Some of us maybe paying more than we had bargained for. UK regulators have lashed out at Ryan Air pricing policy. We are going to investigate these charges. Is Ryan Air puerile or are we just being petty?
QUEST: Welcome back.
The low-cost airline, the largest low-cost airline in Europe, Ryan Air, has hit back against accusations that it taunts its customers with unfair booking charges. The head of the U.K.'s Office of Fair Trading has called Ryan Air's behavior, puerile. It was referring to the fees it charges for processing payments when you book seats. Now, it is a fee that is imposed on all but a tiny minority of customers.
Ryan Air has already retaliated. It has described it as disappointing and wrong. CNN's Jim Boulden now on how the costs of booking a cheap flight, soon mount up.
JIM BOULDEN, CNN INT'L. CORRESPONDENT (voice over): We are on the Ryan Air web site and it is advertising a sale, one way, starting at 5 pounds, a million seats, going from London's Stanstead (ph), back to Cork, Ireland. Leaving on Thursday for a couple of days. Let's see if I can get that 5 pounds, if I can't, that flight would be, 30 pounds each way. For a grand total of 64 pounds, we are talking about, close to $100, for the round-trip ticket. Then there is the online check in fee for 5 pounds. The taxes, another 30 pounds, now we are up to 91 pounds, because we now have a 5 pound check-in each way, because of our web check in.
And this is where you decide whether you want to take baggage. Now, I usually take two bags on any trip. I would check two bags. I'm not sure who flies without baggage. So that is another $160 added to the flight.
Do I want to go one of the first on there? I'll say yes. So that is another 8 pounds, so that is another $12, or so. I live in the United Kingdom. If that is insurance, again, discretionary, but it adds another 10 pounds.
So, I have just added 118 pounds to my flight. That is another $188. And that is even before we get to the charge fee, for what kind of card you want to use. And that is where all the fuss seems to have come about. Up until now, if you use the VISA Electron, it was free of charge, on RyanAir. Though RyanAir announced a while ago that it was switching to a preferred free card called the MasterCard prepaid. Now that card is not free to use or to get for most people. And there are charges that are levied on it for other providers, from banks, ATM machines. It is just that if you use that on RyanAir it will not charge you to use that.
So, the original round-trip ticket costs London to Cork was around $130, that is with the obligatory taxes. You add in my optional extras, including the luggage. And that takes it up to $334, round-trip. That is before the booking fee, but if you use VISA Electron, that adds that little booking fee in there. And we are now up to a grand total of $350, round- trip.
QUEST: And how much was the ticket, they say it was, to start with?
BOULDEN: 23 pounds, 99, one way.
QUEST: RyanAir say that everybody is - it is quite clear. It is not hidden, any of these charges. They are all up front. You choose, Jim, to take baggage. You choose to do all these things.
BOULDEN: Yes, but you know, here is the point. I wanted to find some place. I started with that 5 pounds. Could I go to Cork for 5 pounds? Cork is not a long flight from London. In fact, I went to Aer Lingus web site and I could get it for $90 dollars cheaper. Now, Aer Lingus does not call itself a low-cost airline. It is kind of becoming one.
QUEST: The LFT report, I mean, it -and it is not unique. Basically, RyanAir is quite up front about what it does.
BOULDEN: Here is the nub of it. If they didn't have this one little thing, called the MasterCard pre-paid, in the very end. That is free. If you use it then RyanAir doesn't charge you. Then they would have to bump all of those credit card charges on the front end.
BOULDEN: Then you wouldn't have a 4 pound flight, or a 5 pound flight. You couldn't. That would violate the advertising rules. They would bump it up. So, RyanAir has to continue to have some way, one way, that you can book it for free, so it doesn't have to put that in the front end of the web site.
QUEST: And yet, people are speaking with their backsides. RyanAir carries more passengers than any other airline in Europe.
BOULDEN: If you don't have baggage, you don't want to pay for the food, it is not in the ticket. You don't have to pay for it. We have no choice on British Airways. We cannot take off the food. We cannot take off the baggage costs, unless we have extra baggage.
Look, RyanAir said to me, 30 percent of their tickets are sold this VISA Electron, that was free. They expect to have even more of their tickets, percentage wise, to be booked through MasterCard prepaid. So they don't see this as an issue, obviously. And that is why you have seen these kind of statements where they say -
QUEST: Is there any evidence that the public is rebelling against this?
BOULDEN: I looked at a lot of blogs and web sites and people say look, I only -
QUEST: People have already been e-mailing me.
BOULDEN: Some people said, look, I only ever got this VISA Electron prepaid card because of RyanAir. People have been using it if they were smart about it. And they are annoyed that they have gone for this card. That does cost them money from the bank, and now they won't be able to use it for RyanAir without being charged.
QUEST: Patsy Gasparetti (ph): "Dear Richard, I became" cheesed off - different word she uses - with RyanAir. Booked a roundtrip ticket, they charged me for two separate transactions."
All right. Many thanks, indeed. In future, here is the rule. The children go in the overhead compartment. And Mrs. Boulden goes alone.
BOULDEN: OK, deal.
QUEST: (UNINTELLIGIBLE) Many thanks, indeed. I'm in trouble now.
We've had the crisis and the clean up. Now we are hearing from Ben Bernanke about who is to blame for the mess. It is not the Fed, by the way, (UNINTELLIGIBLE). Back in a moment.
QUEST: Good evening.
I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN.
If you were with us for the first half hour, you'll already know it's a very strong session on Wall Street. The Dow Jones Industrials up more than a ton (ph), which is more than 100 points. We need some understanding as to the reason why.
Ooh, me bell is a little bit off tonight.
Susan Lisovicz is in New York.
Why should we have such a robust session on the first one?
SUSAN LISOVICZ, CNN CORRESPONDENT: Because it is a new year and...
(BLOWS A NOISE MAKER)
LISOVICZ: -- Happy New Year, Richard.
You know, investors tend to be optimistic at the beginning of the year.
Why is that?
New money is at work. I'm not talking about nouveau riche, I'm talking about pension funds -- big institutional investors who want to do something with their money. And the fact is today, the first trading day of 2010, there was reason to suggest that the global economy is improving - - something you have certainly discussed, the good economic news, the manufacturing report out of China, out of Europe, and, finally, out of the U.S. Manufacturing expanding at the fastest rate in about three years.
So the bulks took off at the opening bell and are still running, with less than 90 minutes to go in the session -- Richard.
QUEST: Well, now it's time for those of us of seasoned years to -- to -- to remember the old adage about January.
What is it -- you know, I can never remember the exact way it goes, but it's something about -- it's -- it -- well, you remind me.
LISOVICZ: As goes January, so does the rest of the year. Both the month of January and the first five trading days of January are remarkably accurate in predicting the general direction of the broader market, specifically, the S&P 500.
So if you check 2009, for instance, January was crummy -- the month of January was crummy, but the first few trading days we saw the S&P 500 register a modest gain. And it was -- you know, it was a crazy year, let's face it. I mean the U.S. Economy averted depression and we saw the markets rally off of that.
But according to the "Stock Trader's Almanac," since 1950, basically, the January effect is accurate about 90 percent of the time.
And so hopefully the next few trading days we'll see more rallies like this, Richard, and we'll have some positive momentum throughout 2010.
QUEST: And you'll be with us to help us understand what's happening, provided you don't blow that -- that horn too much -- too often. We'll allow you a couple of toots on that horn every month.
All right, Susan Lisovicz.
Many thanks, indeed, for joining us.
Now, Ben Bernanke, the chairman of the Fed, says the financial crisis wasn't the Fed's fault. The chairman said several years of low interest rates weren't responsible for causing excessive debt.
He told the American Economic Association that the problem lay with poor financial regulation and that's what needed to improve.
(BEGIN VIDEO CLIP)
BEN BERNANKE, CHAIRMAN, U.S. FEDERAL RESERVE: Having experienced the damage that asset price bubbles can cause, we must be especially vigilant in ensuring that the recent experiences are not repeated. All efforts should be made to strengthen our regulatory system to prevent a recurrence of the crisis and the cushion effects if another crisis occurs.
(END VIDEO CLIP)
QUEST: We must be vigilant, says Ben Bernanke.
Todd Benjamin, Happy New Year, first. (INAUDIBLE).
TODD BENJAMIN, FINANCIAL ANALYST: Great to see you, as always, Richard.
QUEST: Nice to see you, financial analyst, he's with us.
And let's put Mr. Bernanke to one side at the moment. A good start to the year. You've heard Susan Lisovicz's so goes January, goes the year. If we're going -- well, what do you think?
BENJAMIN: Well, look, obviously, you know, people are -- are optimistic. We've had very good manufacturing figures globally, as Susan correctly pointed out. But, also, you still have so much stimulus going on here. It's the only game in town, Richard. And, you know, I want to know...
QUEST: And let's be grateful for that.
BENJAMIN: Oh, you can be grateful, absolutely.
And, you know, what happens when that stimulus is removed?
For instance, you know, in March the Fed is no longer going to be buying, you know, mortgage-backed securities. That probably means higher interest rates. And I think, you know, several prominent economists, you know, they think it's going to be a -- a rather sluggish recovery. I think they're absolutely right, because I don't really see how this economy can move forward meaningfully without more stimulus.
And once that stimulus fades, I don't think this economy will have the power, really, to stand on its two feet.
QUEST: DDR -- double dip recession.
BENJAMIN: Look, you know, the chances of that, probably maybe 30 to 40 percent. You know, that's, let's say, what Paul Krugman is thinking. But he thinks, though, that at the same time, the likelihood of a strong rebound, it's just not there. And I think he's absolutely right.
QUEST: But the (INAUDIBLE) stock market...
BENJAMIN: It won't be there...
QUEST: ...economics or stock markets, because I think -- I mean, you know, time will prove me right or wrong...
QUEST: ...as we get to the end of the year. I think, actually, we might be surprised. I don't think we're going to get an '09 again, but I think we'll get a better year than you're saying.
BENJAMIN: Well, if you get a better year, it's because, basically, stocks win by -- by default, all right?
QUEST: Yes. Absolutely.
BENJAMIN: Because, basically, interest rates are so low, people don't want to put their money in savings accounts unless they're completely risk adverse, like I am, OK. And instead they're willing to, you know, take a punt on stocks. And it proved to be a great bet last year. People did fabulously well, especially if they got in -- you know, in March. The market S&P was up some 65 percent of its lows.
But if you look over the decade, you know, the guy who stayed in cash actually -- actually did better.
So what's going to happen going forward?
Actually, Bloomberg did a very interesting survey here.
And you know what asset class they say is going to do best, according to the people they -- they surveyed?
QUEST: Well, where...
BENJAMIN: Commodities -- but wait...
BENJAMIN: ...wait a second, Richard. They say commodities will rise by about 17.5 percent this year...
QUEST: Which one, though?
BENJAMIN: Energy, actually, is going to do better than metals. And gold, according to their survey, is only going to be up about 5 percent this year.
QUEST: Right. So energy, you're talking, what...
BENJAMIN: (INAUDIBLE) standard chart...
QUEST: Are they all...
BENJAMIN: ...applied (INAUDIBLE) this year.
QUEST: Right. Oils, natural gases...
BENJAMIN: Energy, that's right.
QUEST: Yes. Right. Well, that, of course, is a downer, you know, in terms of general economic growth if energy prices go up.
BENJAMIN: Well, they may not go up -- you know, if they go back up to $147, like they were in -- in July of -- of last year, yes, that's going to be a big damper.
But they're not going to go there, all right?
There's just no way they're going to go there, certainly not in the near term.
Don't look at me that way, they're not, all right?
There's just no way that that's going to happen, because people realize the rebound is not going to be that strong.
QUEST: The U.S. Economy...
QUEST: ...it's time to -- red, amber or green?
You know, you're -- you're...
BENJAMIN: I feel I should be a traffic warden here or something.
QUEST: The reason it's called quest.
BENJAMIN: OK. There you go.
Red, amber or green?
Come on, which one -- which one did you like the look of it?
BENJAMIN: For -- for the U.S. Economy?
QUEST: For the U.S. Economy.
BENJAMIN: I'd say amber.
QUEST: And the U.S. stock market?
BENJAMIN: Amber. You don't have amber to green, but I'd -- I'd say amber.
QUEST: Well, I can make it flash for you, if I...
BENJAMIN: There you go. Yes.
QUEST: We'll leave it at amber.
QUEST: Come back as the year moves on. It's a lovely treat and a pleasure to have you.
BENJAMIN: It's always great to see you, Richard.
QUEST: Thank you.
Many thanks to you.
When we return, make or break time on KMB, and I'm not talking about money. We're now dealing in resolutions, as experts around the world tell us how they plan to go about their businesses in the year ahead.
QUEST: Luckily the Biz Clinic is open, because it's that time of year again -- New Year's resolutions and see how long you can go without breaking them. In one area, there's no room for error -- the economy. You've heard me talking about it with Todd, with Susan.
Well, as we start the new year still on uncertain ground, we asked experts from New York to Hong Kong how they plan to make 2010 really count.
(BEGIN VIDEO CLIP)
KIRBY DALEY, NEWEDGE GROUP: I resolve to try to identify the vested interests or hidden agenda behind someone giving me investment advice or -- or opinions on the economy in 2010.
ALEC YOUNG, STANDARD & POOR'S: We urge investors next year to really focus more on areas that tend to pay higher dividends, higher quality, more blue chip companies. And this should definitely include a global focus.
DAN VERU, PALISANDE CAPITAL MANAGEMENT: If you've got a plan in place and a well-diversified portfolio, stay with it. You've got to have greed when there's fear and you have to be fearful when -- when the markets are exuding greed.
MAX KING, INVESTEC: A great resolution is to hold your nerve and to have confidence that actually governments eventually will be forced by the bond market to really -- to -- to start being sensible.
DALEY: And I would resolve not to buy any investment products that are referred to in acronyms in 2010. I would be very careful and know what you're buying.
YOUNG: Expect the going to get a little bit tougher. As we look into 2010, while we think markets around the world globally are going to have another pretty good year, we're looking for returns to moderate to more historical norms, say the 10 to 15 percent range.
VERU: I think in 2010, you have to avoid consensus thinking. I personally am using as my resolution is to watch very closely for when the consensus moves to the other side, when there's excess of bullishness and - - and in those periods, to be very cautious.
DALEY: Looking at the nascent recovery in the U.S. housing market and some of the hype that's being -- being talked about there that I would -- I would reserve the word flip to my barbecuing lexicon rather than my investment strategy.
YOUNG: As we look to 2010, we think the investment story is really going to be driven more by company results. We've seen cost cutting help the bottom line in '09. In 2010, investors want to see whether the -- the revenues are going to be there.
DALEY: I resolve to put in perspective the Herculean efforts taken by central banks and governments around the world throughout 2009 to get the economy's head above water before I really buy into and invest on the idea that this is a sustainable economic recovery.
(END VIDEO CLIP)
QUEST: The data (ph) from the Biz Clinic.
We turn our attention to the weather. Of course, in large parts of Europe, it is simply very cold.
And we need Guillermo at the World Weather Center to reassure us that it is going to get warmer at some point.
GUILLERMO ARDUINO, CNN METEOROLOGIST: Well, not yet. And it...
ARDUINO: ...it's happening -- well, no -- in Asia, in North America, all over. So I think that -- what were you going to say?
QUEST: I was going to say whilst I have enormous sympathy for those in Asia and North America, I'm a little more concerned with where I am.
ARDUINO: OK. This is what's going on. This new low that we have in the North Sea is bringing air from the north, which is cold. So we are going to see more snow. You're going to see that. Also, more snow in France and in the Low Countries. I have a couple of pictures that I want to share with you to -- look, up to 10 centimeters, possibly, in London of snow
Isn't that great?
And Scotland here with more snow, especially. There are so many pictures. I was going through the Internet and I see lions in Scotland walking on the snow -- really, really cold. But very cold. You see in the negatives in the morning and late at night, when it gets to two or three degrees. And it's going to dip down all the way, probably, into London, where, of course, we're going to see some into parts of France, as well.
This is on the weekend in Dortmund. This 737, I believe, according to what I read, actually had to -- wanted to abort taking off, but because it was all iced up and snowy, it skidded off the -- the runway in Dortmund. But everybody is safe. That's important to point out. So the weather, how it impacts, also, in these cases -- unexpected cases.
Look at what's going on with this low here in Spain. We're going to see snow in the northern parts of Spain. In Portugal, high seas and more rain in Madrid. But then it's going to finish. The rain finally leaving Madrid after so long. And this low is going to bring more snow into the Alpine Region, even into the Balkan Peninsula. We'll see snow in Milano, as well.
Well, look at this cute dog, Richard. Lota (ph) is her -- or his name. It's in nearby Salzburg. So we see more snow over there. But when you compare that in Austria here, we'll see more snow, but when you compare it to Ukraine and Belarus, that's where we're getting big time snow.
Amsterdam with snow; Brussels, too; Milano, as I said; Rome with some windy conditions; Copenhagen with some winds. These are the temps we can expect. Look at Stockholm, minus 10. I feel for them.
This is South Korea, also with a lot of snow, in China and in South Korea. So, look, these cars there in the parking lot and the accumulations, it's going to continue to snow all the way up to 30 centimeters, the heaviest since 1973. We are expecting more snow.
And Singapore also with some clouds there in the forecast. And I leave you with this picture of China. This weekend was terrible in Beijing -- many cancellations at airports.
We'll see you on the other side of the break.
QUEST: 2010 is just a few days old and an air of expectation in this new world and new era and new tech gadgets. Gadget heads say there's a buzz to be heard of a new product from Apple, Google and others.
Maggie Lake has been checking in with the tech experts.
MAGGIE LAKE, CNN CORRESPONDENT: So, Michael, no matter what the economy, it seems that technology is still what people want. It's what's driving consumers' lives. As we look out to 2010, I guess we can't talk about the new year without talking about Apple.
MICHAEL GARTENBERG, VICE PRESIDENT, INTERPRET: No, it really seems that way. And January is always, historically, Apple rumor time. Once again, we're at a fever pitch of speculation. This year, it's all about a mysterious Apple tablet, sometimes called the iSlate or what the rest of us online call digital unicorns -- products that just don't exist except in people's imagination, but it's all anyone seems to be talking about.
LAKE: Is it a gauge of -- of -- of Apple's leadership position that the thing that dominates is an -- is a device that doesn't even exist yet?
I mean you said people are having sales forecasts about it. I mean people talk about it like it's a real thing.
GARTENBERG: Absolutely. And the amazing part about it is not only has Apple not made any announcement or said they're making an announcement or acknowledged anything about this, they've already captured the lion's share of mind share about this product category at the expense of companies that already have products that are existing in the market, that are shipping in the market, that have been announced in the market.
LAKE: The only other company that we can think of that -- that can kind of generate that kind of buzz, in -- in a different way, is Google.
Well, what's on -- what's on the plate for...
LAKE: ...Google in 2010?
GARTENBERG: Lots of rumors in the mobile space. Google quietly showing employees getting secret Google branded phones. The word is going is going to be introducing their own phone, selling it directly to consumers as well as through carriers, taking a little page out of Apple's play book.
LAKE: Throwing down the gauntlet.
Will it be a serious competitor to the iPhone, because nothing else is, it seems?
GARTENBERG: Well, you know, early reports of people who have seen the device say it's very competitive. A lot will depend on what they price it at.
LAKE: And the other thing that we wouldn't have been talking about a few years ago and dominates is social networking. Facebook and Twitter seem to be the two big names.
Anything we need to watch out for there?
Does Facebook have lasting power?
GARTENBERG: Well, it's certainly looking like they've got a lot more. But the question is what's the exit game?
Are we going to see an IPO next year?
Twitter reportedly in discussions, you know, for acquisition, with numbers around $1 billion or $2 billion being thrown about. But you have to wonder, we're at this moment in time, is this, you know, a little bit like 1999 or 2009, with some of these things?
But what's changed is the intersection, right?
As we start connecting mobile devices, social networks together, so I not only know who's around me, but where they are, what's happening in my neighborhood.
LAKE: Any -- anything that you think is going to be the big judge, something that there's -- there's a lot of chat about that people are just going to be disappointed about?
GARTENBERG: Lots of hype about 3-D. We've been hearing about 3-D television now since, oh, 1956. So we'll see if it goes...
LAKE: (INAUDIBLE) you're a little skeptical about that.
GARTENBERG: I'm a little skeptical. It feels more gimmick than reality. But absolutely. Expect that to be one of the big buzz words for 2010.
(END VIDEO TAPE)
QUEST: Maggie Lake talking about -- you have to forgive me. I'm ACL doing a bit of social networking myself. A very interesting point there, all about the bringing together of social networking and -- and the new Smartphones.
We'll continue with this discussion in the future, but we have a Profitable Moment after the break.
QUEST: Tonight's Profitable Moment.
It's all too easy to take the cheap shots at the Burj Khalifa in Dubai. Barely bailed out and now opening, the tallest building in the world. Whenever next I hear you tut-tut, well, just look at it. Look at the achievement. Of course, there's a certain amount of truth. But that shouldn't deflect us from the achievement that this building represents.
Let us not forget, when the Empire State Building was put up, there were doubters. And Canary Wharf in London was a white elephant for the longest time. Achievement should be celebrated whenever it occurs, even if the economics are, perhaps, dodgy. Today, we got a little bit closer to the stars.
And that's QUEST MEANS BUSINESS.
What a way to start a new year.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I hope it's profitable.
Christiane is next.