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QUEST MEANS BUSINESS
Disappointing US Jobs Report; Economic Effects on Average Americans; Obama Makes His Case; Republican Reaction to Jobs Report; Jobs Report Analysis; Some Americans Forced to Live in Cars; New Setback for Berlin Airport; Lufthansa Strike; Signs of Recovery; European Markets Up; Peugeot's Problems; Euro Makes Gains; E-Reader Wars; New Amazon Tablets
Aired September 7, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, HOST: Slow progress for President Obama. Jobs growth falters as the reelection campaign picks up.
Lufthansa makes concessions as striking staff grounds hundreds of flights.
And leaks, Lloyd's, and the news for a legend filled with self- loathing: the Michael Jackson's e-mails.
I'm Max Foster, and this is QUEST MEANS BUSINESS.
Tonight, disappointment for the Obama White House as US jobs growth slows sharply in August. The US economy added 96,000 jobs last month, around 45,000 fewer than in July. And economists polled by CNN Money were expecting 120,000.
Meanwhile, the unemployment rate fell to 8.1 percent, down from 8.3 percent in July, and that drop happened because 368,000 people gave up looking for work.
US stocks didn't really feel much pain from the payroll letdown, though, amid speculation that the Fed may step in with more stimulus. CNN's Felicia Taylor went to a New York City diner to find out how these numbers translate into everyday living, and you found some interesting results, Felicia.
FELICIA TAYLOR, CNN INTERNATIONAL CORRESPONDENT: Yes, there's no question about it, Max. The numbers really do tell the story. That job market out there is still very tough for most people. Even those that are employed, they're having a tough time because they've had to accept jobs that either pay less, or they had to take on a number of different jobs.
And in particularly, the younger generation, those people that are just getting out of school or continuing to finish school, are having a very tough time in the job market. I'm joined by Tiffany, now, who has been in the labor force, but chose to go out on her own, because simply it was easier than continuing to look in the workforce. How difficult has it been?
PATRICIA MCMULLAN, STUDENT: It has been very difficult. I decided to go back to school because I realized that it's hard for me to find a job without a degree. And so, I'm in pursuit of my bachelor's, but it's not easy. And I have many years of experiences. I've been working since I was 15, and now I'm 23. that's 8 years, and it's still not enough.
TAYLOR: And even with a degree, it can be very difficult, because you have a sister who has a master's, and she hasn't been able to find work, either.
MCMULLAN: Yes, she has a master's in sustainable energy -- I mean, sustainable management. But she can't find -- she can only get executive assistant jobs, because it's just not out there for her right now. And she has that from Columbia, so it is very, very hard for her, as well.
TAYLOR: And for our international audience, obviously, Columbia is a very top-rated institution in this country. A graduate degree from there is absolutely marketable, one would think. Did you ever think that you would be in this position as a young woman in the workforce?
MCMULLAN: Not at all. When I first graduated high school, I knew that -- I knew what I wanted to do, I knew I wanted to do something in business, but I always thought that because I had experience, that would give me a leg up. But coming out into the field, I realized it wasn't as easy as I thought it would be, and that I have to put forth a lot more work than I had hoped for.
TAYLOR: Tiffany, thank you so much. And that has a trickle-down theory -- not theory, it is the truth -- and it affects a number of different businesses.
In particular, we are here at the Skylight Diner in midtown Manhattan, and George Papas is the manager of this fine restaurant where I've enjoyed, now, two meals, breakfast and lunch. George, how much has your business changed in terms of the customers that you see coming in?
GEORGE PAPAS, MANAGER, SKYLIGHT DINER: It depends on a daily basis. Anywhere from 5 percent, to 10 percent, 15 percent. It all depends.
TAYLOR: And that's on a weekly basis. So --
PAPAS: On a weekly basis.
TAYLOR: -- people just aren't spending money.
PAPAS: I don't think they're spending money, no. I think the ones that do have a job, they tend to be -- to hold back and maybe afraid that they may lose their jobs or -- and people are just not spending the way they used to.
TAYLOR: In terms of as a business owner and manager, have you had to cut corners in certain ways. In other words, have you had to scale back on product? Maybe not offer as many things on the menu?
PAPAS: We try, but it's kind of hard. You can only scale back so much. And it's hard. You can't lay back -- you don't want to lay off people, because you don't know when you need them again, and you feel bad laying them off. One week it might slow, the next week it might be busy, you need them.
And that's not the only problem. The other problem is that our supplies are always up on the rise. And you can't always keep bumping up your prices on the menu.
TAYLOR: Well, a lot of prices have gone up, particularly when it comes to beef and other products, right?
PAPAS: Beef, eggs were very high a couple of weeks ago. Gas is going up again, so you get the surcharges on deliveries back again. It's a little harder and harder to make a living.
TAYLOR: Well, it's a wonderful restaurant. We've enjoyed, like I said, spending the day here with George and many of his customers.
But the point is, Max, things are very difficult in this economy, and that's exactly what the Federal Reserve is concentrating on, and the hints that they gave us last week that they're looking to do some kind of a stimulus at their next meeting in September, September 12th and 13th.
So, that's where the focus is going to be. This is exactly what is going to indicate whether and how much they're going to do in terms of stimulus. Max?
FOSTER: OK, Felicia, thank you very much, indeed. And this is all context, really, for the presidential election. It's all about jobs, really, in the run-up to that election in November. The "Wall Street Journal" has been crunching the numbers, and they're not pretty, either.
On average, the US economy lost 422,000 jobs a month in the first year of the Obama administration, and that was in the wake of the worst downturn since the Great Depression.
The figures have turned a bit more positive in recent times. In the past year, the economy has been adding 153,000 jobs a month on average. Overall, adding in today's numbers, the economy is still 220,000 jobs down on when Mr. Obama was sworn in in January, 2009.
Accepting his party's nomination to run for reelection, President Obama appealed to US voters to let him finish what he started.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm asking you to rally around a set of goals for your country. Goals in manufacturing, energy, education, national security, and the deficit.
Real, achievable plans that will lead to new jobs, more opportunity, and rebuild this economy on a stronger foundation. That's what we can do in the next four years, and that is why I am running for a second term as president of the United States.
(END VIDEO CLIP)
FOSTER: Well, two months before the election and the Republican contenders for the White House wasted no time reacting to the jobs data. GOP vice presidential candidate Paul Ryan blasted the Obama administration.
(BEGIN VIDEO CLIP)
REP. PAUL RYAN (R), US VICE PRESIDENTIAL CANDIDATE: This is not what President Obama promised. I would argue this is the result of failed leadership in Washington, bad fiscal policy coming from the administration, and that is why we have this very tepid report.
For every net one job created, four people -- nearly four people left the workforce. So this is not what a recovery looks like.
(END VIDEO CLIP)
FOSTER: Well, right now, we're joined by the chairman and the Manpower Group. Jeffrey Joerres joins me live from his company's headquarters in Milwaukee, Wisconsin. Thank you so much for joining us.
You've got information that is vital, right now, in the United States, because people are concerned about jobs. And also, both of the candidates in the presidential election realize that it's about the economy, which is fundamentally about jobs. So, where do we stand on the jobs front in the US going into the election these next couple of months?
JEFFREY JOERRES, CHAIRMAN AND CEO, MANPOWER GROUP: Well, when you really look at the next couple of months and look at the information that we have, the clients we're dealing with, and the information you received today in the BLS, it's really going to be a pretty soft next couple months.
There's nothing that is behind in -- underneath the economy that is going to generate jobs. Companies are very exacting in what they need now. They're not doing kind of broad-brushed, maybe I need a few more people. When there's demand, sustainable demand, they'll hire the people, but they're going to try to delay that as long as possible.
Given where we are right now, and then when you extrapolate that out over the next few months, it's going to be a very soft next few months, because companies just have too much uncertainty and are not going to make a move when it comes to hiring people.
FOSTER: The candidate with the best promise on jobs is arguably going to win this election because it's the most important issue in America right now, isn't it? So, who do you think, trying to be impartial, I don't know what your political colors are, but try to be impartial. Who do you think has got the best argument so far in terms of jobs?
JOERRES: I'm not sure if either of them do, and I'm not trying to just split down the middle, because I've had a chance to testify in front of Congress and the Joint Economic Committee, and when we talk about jobs, we talk about jobs as a stand-alone item.
What we need to do is we need to be talking about small businesses, we need to be talking about businesses, we need to talking about government working with it in a social partner environment, which of course doesn't really happen in the US.
But the point is is that it's how do you get some GDP growth, how do you get that back? Then the jobs will come. When we talk about job stimulus acts, those typically are acts that are going to be -- those people are going to be hired anyway.
So, it's a longer way out then let's just turn a button, and both candidates are going to struggle with this because we're in a period of time when we just don't have a lot of demand.
FOSTER: If you're advising them, what would you say is a pretty -- a good solution to the jobs crisis in the US?
JOERRES: Well, I have the advantages in that I can make a recommendation and I don't have pundits on your show and others on both sides saying how it won't work.
But clearly it comes down to how do you make sure that you have the right trained people -- and unfortunately, that doesn't have a quick payoff. In other words, you can't just train them and the next day they have a job. But training and development, given the skills gap that you hear about, and that mismatch of skills gap? Number one, you've got to do that, particularly in the technical skills.
Number two, you've got to really drive innovation and allow small and medium-sized businesses to grow, because that's where 65 percent of all the new jobs are created.
FOSTER: Jeffrey Joerres, we appreciate your time, as ever, on the program. Thank you for joining us.
Well, in the same week that we heard about millions of Americans going hungry, even, last year, CNN's Kyung Lah reports from Los Angeles on the revelation that even if you're lucky enough to have a job, you still might not be able to keep a roof over your head.
JULIUS TORREVILLAS, BUS DRIVER, LIVES IN VAN: How are you today? Hi.
KYUNG LAH, CNN INTERNATIONAL CORRESPONDENT (voice-over): Julius Torrevillas is behind the wheel of a Santa Barbara MTD bus five days a week. A full-time job that pays $19 an hour to the jovial driver with the unforgettable beard.
When his work day is over, he moves from his bus to another vehicle: his van, where he lives.
TORREVILLAS: A regular full-size mattress.
LAH: This is home because he makes too much to qualify for public housing but can't afford rent in the high-cost city of Santa Barbara.
LAH (on camera): A lot of people think that if you have a full-time job in America, you're OK. That's not really the case for you, is it?
TORREVILLAS: No. I've got a full-time job. I'm barely making ends meet.
LAH (voice-over): Debt from a failed small business piled up and he and his wife are still digging out, so this county parking lot is where they sleep, joined by more than a dozen others who live in their cars.
It's called the Safe Parking Program, 114 spaces spread out across the county, with a waiting list of more than 40.
NANCY KAPP, NEW BEGINNINGS: I have senior citizens, I have couples, I have families.
LAH: A third of the people, says the program's manager, have jobs, but are underemployed, like approximately 17 percent of Americans.
LAH (on camera): What do you think it says about America when somebody who has a job, who wants to work, still has to live in a car?
KAPP: I think people would be shocked. I think they would be shocked if they would come and meet some of these people, because I tell you, when they come into my office, I want to cry. Because it reminds me of someone that could be my mother, my sister, my brother.
LAH (voice-over): Or your bus driver.
TORREVILLAS: Good morning.
LAH: Who starts his day on the move. Breakfast with his wife, Mary, is at the doughnut shop.
TORREVILLAS: Toothbrush, toothpaste.
LAH: The bathroom, a public one. The dressing room, the back of the van.
MARY TORREVILLAS, JULIUS' WIFE: Normal life is what you miss. As -- living in a van is not the norm.
LAH (on camera): Has the middle class in America changed?
J. TORREVILLAS: I think the middle class has slid down the scale a little bit more towards the lower class, and it's a little tougher for the middle class people to survive and to actually pursue the American dream.
I love you.
M. TORREVILLAS: I love you, too.
LAH (voice-over): Torrevillas keeps chasing his dream, hoping whoever wins this election will be able to shift the economy into gear.
J. TORREVILLAS: Good morning. Thank you.
FOSTER: That was CNN's Kyung Lah reporting for us from Los Angeles. Now, in a moment, a dramatic stock market exit for Peugeot Citroen. As the carmaker struggles with rising costs and slowing sales, we'll look at the challenges on the road ahead.
FOSTER: Another setback for Berlin's troubled new airport. Authorities confirmed that Berlin Brandenburg International won't greet passengers until October of next year. It had been expected to hope its doors back in 2011, and then again this past June, but fire safety and construction issues have caused repeated delays.
As a 24-hour walkout by Lufthansa cabin crew continues, the airline has met some of the union's demands. It says it will stop deploying outsourced cabin crews in Berlin for now. It'll also offer permanent contracts to flight attendants recruited through a company called Aviation Power.
Pay is still a sticking point, though. The UFO union is asking for a 5 percent pay rise for cabin crew. Lufthansa has offered 3.5 percent if staff work longer hours.
Now, the strike has led to the cancellation of around half of Lufthansa's flights this Friday, and from Berlin, here's a report from CNN's Diana Magnay.
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT (voice-over): A third day of strike action by cabin staff, Lufthansa forced to cancel two thirds of Friday's 1800 flights, with walkouts at all its German hubs.
MAGNAY (on camera): But Berlin's Tegel Airport is, if anything, quieter than normal. Lufthansa says it's managed to reach 55,000 passengers -- that's around half of all those affected -- by e-mail or text to warn them about changes or cancellations, and it looks like the rest checked online before risking the airport.
MAGNAY (voice-over): And despite the strike, between a third and half of all European connections are up and running, thanks to Lufthansa's network of partner airlines.
UNIDENTIFIED MALE: We are lucky devils. We have our flight. We are going to Nice. To France.
MAGNAY (on camera): OK. And Lufthansa's still flying you there?
UNIDENTIFIED MALE: Yes -- I believe not. It's a Swiss company.
UNIDENTIFIED MALE: They arranged something with Swiss Air.
MAGNAY (voice-over): Lufthansa and the UFO union, which represents its 18,000 cabin staff, have been arguing over wages and pay structures for 13 months.
KLAUS WALTHER, SPOKESMAN, LUFTHANSA (through translator): Today's strike by the UFO union affects more than 100,000 German Lufthansa clients, and we regret this very much. In our view, this strike is unnecessary, and we call on the union to return to the negotiating table at once.
MAGNAY: Lufthansa hopes to cut costs by almost $2 billion by the end of 2014 and faces stiff competition from low-cost carriers in Europe, alongside escalating fuel prices. The union says this puts unfair pressure on its members.
NICOLEY BAUBLIES, UFO UNION (through translator): There is a huge solidarity for cabin crew within Lufthansa. Clearly trying to push through cost-cutting measures, like this, means that Lufthansa is breaking apart internally.
MAGNAY: But Lufthansa cabin crew still earn almost twice as much as their peers at carriers like Air Berlin. Some passengers said they weren't wholly sympathetic to the unions' demands.
KAREN GATZKE, PASSENGER: I think what they offered is not that bad, to tell you the truth, and there's so many people who cannot go on strike.
MAGNAY: The union says it doesn't plan on further strike action, but with staff cuts, a large part of Lufthansa's cost-saving program, this dispute may drag on
Diana Magnay, CNN, Berlin.
FOSTER: Well, there are signs that Europe is on the road to recovery, though. In the UK, government figures show industrial output rose at its fastest pace in 25 years. It was up by 2.9 percent in July, following a drop of around 2.5 percent back in June.
In Germany, back to Germany, a similar story. Its industrial output rose by 1.3 percent in July. It fell by around half of one percent back in June.
And Europe's stock markets ended the session with modest gains today, but at least they were gains, up between 0 and 1 percent. Mining and banking shares were some of the top performers today. Anglo-American gained more than 7 percent in London, and Societe Generale and Barclays gained almost 7 percent.
Looking at the numbers over the course of the week, well, this is the picture. You can see it's been a very, very positive picture for Europe. German and French shares, the main indices, at least, up more than 3 percent. Big numbers.
Peugeot Citroen was one of the biggest gainers, actually, on the CAC today despite a rather major fall from grace. Now, last night, the CAC 40's technical board decided to kick the company out of the index and it'll be replaced by a plastic and chemical company, Solvay, later this month.
It has been a very rocky road, you could say, for Peugeot. European car sales have actually fallen by 25 percent since 2007, and it's expected that European sales will shrink by 8 percent in 2012.
There's been an exposure, really, for this company to those crisis-hit countries we keep talking about in the eurozone, those euro countries at the heart of the slowdown here in Europe.
Mounting losses for the company, cash, they're burning through that at a rate of $250 million each month. $4.8 billion has been given to them in state aid.
Is this the end of the road, then, for the company? Well, we're going to have to go to the figures, really, for that. First half losses for the company amount to $857.5 million, and it's facing stiff competition. That's the problem here.
Peugeot's half-year sales fell 13 percent. Renault only fell 3 percent, but Volkswagen, well, up 10 percent. That's the picture.
Now, an auto-related Currency Conundrum for you, because we want to stay topical. Which old US dollar bill featured the image of a car parked outside the Treasury? Was it the A, the $10 bill? The $20 bill for B? And C, the $50 bill? We'll have the answer for you a bit later in the program for you.
The euro is making gains against the dollar, thanks to those encouraging numbers on industrial production. The yen is gaining strength against the dollar.
FOSTER: The e-reader wars are heating up. Amazon's Kindle has unveiled three new models of the Kindle Fire, including a bigger version with an HD display. The company says it will sell the Kindle Fire outside the US for the very first time, and Amazon also showcased two new versions of its dedicated e-reader.
Let's take a look, then, at the rest of the field. Sony has its own line of e-readers, the PRS series. It has a slick design and a long battery life, but critics say it's slower than its rivals.
Canada-based Kobo has its touch and wi-fi e-book readers on international sale. The company's integrated Facebook into its products to give a more social reading experience, and it features fast page turning and expandable storage for up to 30,000 books. It also stands out from its rivals for having a quilted back.
The US bookshop heavyweight Barnes & Noble produces the Nook. It tests -- in tests by consumer reports, the Nook -- Simple Touch reader beat the latest Kindle, but only by single points. They go head-to-head on battery life, both lasted five days on a single charge. Incredible, isn't it, really? CNN's Dan Simon took a closer look at Amazon's new offerings.
DAN SIMON, CNN SILICON VALLEY CORRESPONDENT: We're here in Santa Monica, California, where Amazon released a whole new slate of Kindles. The most notable include what it's calling the Kindle Paperwhite. It has a much brighter screen, and for the first time, you can read the Kindle both in direct sunlight and in the dark.
Amazon also updating its popular Kindle Fire, they're calling this one the Kindle Fire HD, because it has a much sharper screen, also a faster processor. Its screen sizes, 7 inches and 9 inches and priced at $200 and $300 respectively. But according to Amazon CEO Jeff Bezos, it's very competitively priced.
JEFF BEZOS, CEO AND FOUNDER, AMAZON.COM: We want to make money when people use our devices, not when they buy our devices. That is better alignment. If somebody buys one of our devices and puts it in a desk drawer and never uses it, we don't deserve to make any money.
SIMON: The tablet category, of course, was jump-started by Apple. There have been a lot of competitors. Few of them have sold very well. One exception has been the Kindle. According to Jeff Bezos, the Kindle Fire has generated 22 percent of tablet sales in the United States.
One of the new features with the updated Kindle Fire is the ability to control your kids' content. I think a lot of parents will appreciate this. You can actually set a timer so you can know exactly how much time your kids are spending on the device.
Dan Simon, CNN, Santa Monica, California.
FOSTER: Well next, the legal wrangling over "This is It." Promoters and insurers go to war over the Michael Jackson show that wasn't to be.
FOSTER: Welcome back, I'm Max Foster, these are the news headlines for you.
Heavy fighting is being reported in the capital city of Damascus and its suburbs this Friday. State television showed pictures of two bomb blasts that it says were aimed at government targets. The Syrian opposition says at least 100 people have been killed in violence today across the country.
The US Labor Department says 96,000 jobs were added to US payrolls in August. That's significantly lower than the 120,000 new jobs analysts had expected. Even so, the US unemployment rate fell slightly last month to 8.1 percent, but that was mainly due to people who stopped looking for work.
US president Barack Obama is acknowledging the new jobs report. At a campaign rally in New Hampshire he said it shows that, quote, "We need to create more jobs faster." Mr. Obama's Republican challenger is also campaigning. Mitt Romney told a crowd in Iowa that Mr. Obama has been unable to deliver on virtually any promises he made four years ago.
European Council president Herman van Rompuy is telling Greece to focus on its reforms. He met today with Greek prime minister Antonis Samaras in Athens, and the EC chief told Mr. Samaras that Europe remains committed to the debt-stricken nation so long as it delivers on its austerity cuts.
And Britain's Prince Harry is being redeployed to Afghanistan. The young captain in Britain's Army Air Corps arrived today in Helmand province, which is considered Taliban territory. The prince is set to be there for four months serving as an Apache helicopter pilot.
FOSTER: It might be 2012, but Pernod Ricard is banking on a brand from the `80s. Malibu Rum is one of the products driving the French distiller's growth. It's putting the company in a strong position as the founding family prepare to regain executive control. In 2015, Alexandre Ricard will take over as chairman and CEO.
I asked the incumbent chief executive if he was happy with the balance sheet.
PIERRE PRINGUET, CHIEF EXECUTIVE, PERNOD RICARD: Well, I think the -- as far as the growth rate, I mean, 8, 9 and 10 with respectively for sales, for (inaudible) and for the net profit. And it is the highest growth rate since the crisis.
FOSTER: And why is that? Your products are quite specialist, aren't they? So who's buying them and what products are they most interested in?
PRINGUET: Well, our strategy brand, 14 strategy brand including Absolut, Chivas, Jameson, not to forget about Malibu, really are the growth engine for Pernod Ricard, and they're developed all around the world.
FOSTER: Malibu, for many people, will be a memory from the 1980s. But it's had some sort of resurgence, hasn't it? So why are people buying that? Who's buying it?
PRINGUET: Well, we develop a lot of innovation on Malibu, for instance, the cocktail and we are just introducing now a new cocktail, Cosmo Lite, so low alcohol, low calorie.
We also introduced Malibu Red, with its combination of Malibu and tequila. And we have the support of very good partnership with, Ne-Yo, the famous artist.
FOSTER: It's been an interesting exercise, hasn't it, in rebranding a product, but keeping the same brand at the same time. So what did you learn about what people want now as opposed to the `80s, for example?
PRINGUET: Well, I think that people, first of all, more and more look for a premium brand, and I would say that's -- this is clearly the trend in the U.S. market for the time being. But I also want for innovation that will not renew their attraction to the product.
FOSTER: You're keeping it in the family, in many ways, aren't you? And the Ricard name is very much living on through the organization. What do you think is the benefit of having the same family running a big commercial business?
PRINGUET: Well, the benefit is that it gives us stability, long-term vision and also, I mean, in terms of independence. I mean, thanks to the family shareholding the group intend to remain independent. By the way, it is one of the key feature, key element of the Pernod Ricard charter.
FOSTER: Why not look outside for some other specialist? Why is the family member the best person?
PRINGUET: Well, the -- Alexandre will be appointed as my successor in 2015, already achieved quite a good track record within Pernod Ricard. For instance, he has been the chief of Irish Distillers Jameson and certainly the current growth of the brand in the U.S. deserved (ph) to his action.
(END VIDEO CLIP)
FOSTER: Now the man who leaked emails from concert promoter AEG about Michael Jackson has denied they came from the singer's family. AEG Live have blamed Jackson's mother for the leak.
But author Howard Mann says he gave the emails to the "Los Angeles Times," that show the promoter had doubts that Jackson was well enough to complete a series of 50 planned concerts at London's O2 Arena.
Lloyd's of London is trying to use the information to void AEG's $171/2 million insurance claim. In one email, AEG Live president and CEO, Randy Phillips, writes this about Jackson, "He is an emotionally paralyzed mess, riddled with self-loathing and doubt, now that it is show time."
CNN's Alan Duke is following the story from Los Angeles.
Interesting to see the debate going on behind the scenes, but what have you managed to make about the truth in the who's right and wrong here?
ALAN DUKE, CNN CORRESPONDENT: Well, it -- there's no doubt, I believe, that Howard Mann, the person who was a partner with Katherine Jackson, Michael's mother, on a documentary and a book, gave the emails to the reporter.
Now Mann says he didn't get them from the Jacksons or their lawyers. And it seems that that would be the case. But where did he get them? Well, those emails apparently have been floating around in different litigation and he got them.
We're not exactly sure where, but maybe we'll find out, because he was subpoenaed yesterday to come to court to answer questions about where he got them. If he got them, in fact, from the Jackson or their lawyers, that could be a very big blow to the wrongful death case against AEG Live.
They're trying to sue AEG for having hired Dr. Murray and for Michael's death, saying that they caused, they contributed to it by pressuring Michael to perform in London for those "This Is It" comeback concerts. So it could hurt their case, because they would be financially fined and also those emails could be banned as evidence. And the jury would never hear them.
FOSTER: So what does the case actually rest on? Is there one simple thing that they can prove, that will resolve this case?
DUKE: Well, they're going to try to show that AEG, the concert promoter, while they may not have chosen Dr. Murray, they controlled him. In fact, they met with Dr. Murray about a week before Michael's death and this has been known already, that the head of AEG Live told Dr. Murray, you need to get him to rehearsals.
And they were saying that he was being supervised and therefore pressured to give him the treatment that a jury later decided killed Michael Jackson. So they're going to say they controlled the doctor and therefore contributed to the death that they knew he was weak, yet put pressure on him, and the resulting death was their fault.
FOSTER: It's an ugly scene, isn't it, you know, someone's died and the family's involved and it looks like money-grabbing from whichever side or whichever perspective you're looking on it. So how is this being taken in Los Angeles, the distastefulness of all of this?
DUKE: Well, you know, just about every week there's something new about the Jacksons and the dysfunction, the chaos within the family. You know what happened in July with Katherine Jackson being spirited away by several of her children and then the others saying please bring her back. It was very ugly and chaotic.
Yes, there is a grab for money, not just among the Jacksons, but also among other business people and also there is this insurance claim against one of the Lloyd's of London companies for $171/2 million.
These emails, believe it or not, impact that case but never were turned over by AEG to the Lloyd's of London company. And that is going to be a dispute. So it could be that the estate will never get that insurance money because those emails were not properly disclosed.
FOSTER: And when do we expect these court cases to be resolved? When are we going to get results from these?
DUKE: There was supposed to be a trial this month in the wrongful death case, but that has been delayed. But probably within the next six months we could actually have a trial where the Jackson family versus AEG, the concert promoter.
FOSTER: OK. Alan Duke, thank you very much indeed. It's going to keep you busy, isn't it, lots of high-profile court cases yet again in the U.S.
We'll have the latest from the CNN International Weather Center for you in a moment. More good weather in Europe, I'm glad to say. Jenny Harrison will join us.
(BEGIN VIDEO CLIP)
FOSTER (voice-over): The answer now to tonight's "Currency Conundrum," earlier in the program I asked which old U.S. dollar bill featured the image of a car parked outside the Treasury, and the answer, A, the $10 bill, some people believe this picture on the 1934 $10 bill was a Model T Ford used by Bonnie and Clyde. The car is actually a generic image.
(END VIDEO CLIP)
FOSTER: Let's find out what the weather has in store for everyone now. Europeans will be pleased, (inaudible), Jenny?
JENNY HARRISON, CNN METEOROLOGIST: Oh, nothing generic about the weather this weekend, Max. Yes, very pleased. You're a European, you know, you should be looking happier than you are sitting there right now.
And it's your Friday. We've got a little bit of cloud still spilling in across central Europe, some showers pushing through areas of Germany on towards Poland.
You can see those showers there, but for the most part, that will clear out of the picture, the sunshine spreading across much of the west, so central regions, the northwest as well, and at the same time, this warm air coming in from the south and the southwest. So temperatures well above average for the next few days, how much of that?
Well, have a look at this. Madrid, the average is 26 this time of year. Saturday, 33 Celsius; London with an average of 19, Saturday and Sunday 26 degrees Celsius, quite mild in the overnight hours as well; and then Paris, 30 Celsius on Sunday with an average of 21. So very nice.
And that warmth and the sunshine will gradually spread eastwards as we head towards the beginning of the week, which -- by which time, I have to tell you, it is going to cloud over and cool off again across London and Paris, for example.
But look at this, Monday in Berlin, 28 degrees. The average is 19. So warming up throughout the weekend, but quite cloudy. Same story in Warsaw, quite a cloudy weekend, but those temperatures gradually on the rise. And by Monday with those sunny skies, 24 degrees Celsius.
Now there is some rain around across far northern regions of Europe and still with that cold air in place, some snow flurries to the mountains of Norway. And we could just see a scattering of showers across the southwest through the western Med, really.
But look at that warm air piling in from the southwest. You'll see the cool air across the north and across northeastern sections of Europe. So there are those temperatures again for Saturday. And you can see 22 in Berlin on Saturday. So as I say, by Monday, 28 is what you can expect there.
Now in the United States, it's going to be a fairly warm weekend but I can't promise a fine, dry, sunny one. This is the culprit, this thick band of cloud, bringing with it some very heavy thunderstorms. We've had this warning in place for the last few hours. Some of these thunderstorms could be quite severe as this colder, cooler, drier air comes in behind this front.
Of course, it's going to mix with that very warm, moist air across the southeast and the east, and that could bring some pretty severe thunderstorms. So as it goes Saturday into Sunday, we've got some very strong winds likely. In fact, strong winds likely through Friday and Saturday as well, in line with that front. But it could of course see one or two tornadoes.
So not looking great for the ladies' finals at the U.S. Open in Flushing Meadow in New York on Saturday. We could see some rain showers and scattered thunderstorms.
It won't be cold, as I say, and Sunday for the men's finals, should be a lot better, 25 degrees Celsius and of course, Monday, when it's all over, but still (inaudible) New York another very nice start to the week, 23 degrees Celsius and in fact the overnight lows are a lot better as well. So feeling quite fresh, actually, for this time of year.
Still watching this, too, Tropical Storm -- it's Leslie now. It's (inaudible) Michael is still a hurricane, still working its way towards Bermuda. This particular storm Leslie, but we've got the winds at 105 kilometers and hour.
Might just still see some strengthening, but it should pass well to the east of Bermuda and in fact probably not feeling a great deal from it, apart from some strong, gusty winds, the rain as well, actually staying pretty much to the east and so when it comes to accumulations, all of that far offshore as well. We'll keep you updated and you enjoy your weekend, Max.
FOSTER: I will. And you, Jenny. Thank you very much. See you on Monday.
Let's see what the markets in the U.S. are up to as we close the week. It's been a strong week for the European markets and the U.S. market currently down, but only marginally, finishing the week around 13,284. But it's still going on. We'll bring you the roundup a little later on CNN.
Thank you so much for watching, though. That is QUEST MEANS BUSINESS. I'm Max Foster in London. Stay tuned, MARKETPLACE AFRICA continues here on CNN.
ROBYN CURNOW, CNN HOST: You're watching MARKETPLACE AFRICA. I'm Robyn Curnow here in Johannesburg. Now South Africa is a country that's all too familiar with the challenges of political transition.
Well, another African economic powerhouse, Egypt, is also trying to rebuild after two years of social unrest and political uncertainty. The country's new president recently asked IMF for a $4.8 billion loan. Well, Ian Lee now has this report from Cairo.
(BEGIN VIDEO CLIP)
IAN LEE, CNN CORRESPONDENT (voice-over): The sound of innovation in Egypt.
Workers cutting and slicing palm branches among the rows of date trees and grazing sheep. They're making these crates.
The item itself isn't new, dating back centuries, and their technique hasn't changed much, either.
MANAR MOURSI, OWNER, MEEM: I got a grant, and that's how also -- that really helped me push and propel the project forward because --
LEE (voice-over): But Manar Moursi has come up with a new use for these crates other than holding fruit.
MOURSI: There's 20 million palm trees in Egypt. And 1 million tons of biometric waste is like -- it's just wasted annually of the pruning process. And so this material can be used to create things or should be new industrial uses.
LEE (voice-over): Moursi's company, Meem, offers unique and affordable furniture. It's innovation like this through small- and medium- sized enterprises or SMEs that many economists and government officials believe can revive Egypt's economy. This type of nascent entrepreneurial spirit has faced growing pains.
MOURSI: In Egypt, right now, like the idea of entrepreneurialship (sic) and sponsor and investing and in mentoring entrepreneurs, it's a relatively kind of new culture that's blossoming at the moment, post- revolution, I feel like. I feel there is a lot of energy.
There's a lot of ideas and I -- and I'm very excited. But at the same time, because of the relatively young infrastructure, the support is -- has been -- it's been difficult to find the kind of support needed.
LEE (voice-over): Finding ways to support and nurture SMEs is crucial, says economist Abdallah Shehata.
ABDALLAH KHATTAB SHEHATA, ECONOMIST, FREEDOM AND JUSTICE PARTY: The SMEs has very important in Egypt, particularly in tackling the issue of poverty, and poverty reduction. And Egypt is playing very important role in offering jobs for the people who are kicked out because of the crisis.
LEE (voice-over): Egypt's economy is still struggling since last year's revolution that ousted President Hosni Mubarak, in turn stifling investment and the tourist trade. The lack of economic growth is bleeding the country's foreign reserves, a process Egypt hopes to stem with a $4.8 billion from the International Monetary Fund.
GDP growth is around 2 percent and unemployment around 12 percent. Despite the dismal numbers, there are positive signs.
ANGUS BLAIR, FOUNDER, SIGNET INSTITUTE: Overall, the major positive feature in Egypt is the fact that unlike many other countries in the world emerging, but particular developed, personal debt is very low. Government debt's about 70 percent of GDP and of that, only a small percentage is foreign debt.
LEE (voice-over): Blair also points to another positive side.
For the first time in Egypt's history, a civilian leader, Mohammed Morsi, is ruling the country. One of Morsi's first tasks will be changing Egypt's image. Headlines of military battles and (inaudible) political instability keep tourists away.
EZZ EDDIN IBRAHIM, SILVER SHOP OWNER: This is all the cutout things, are hand-cut.
Ezz Eddin Ibrahim has felt the squeeze as tourism has flatlined.
Workers continue to mold and shape jewelry at his silver shop in the popular Hanaklui (ph) Market, but he's had to get creative in pinching pennies to keep everyone working and the machines running.
IBRAHIM: The goal going towards cost efficiency and I'm making everything low in cost, deducting cost of everything. We've got deducting cost of working (inaudible) electricity. I haven't let anybody go.
LEE (voice-over): Ibrahim says there's been a 90 percent drop in the numbers of tourists shopping in the market. But local sales are keeping him afloat -- for now. But he pleads for the tourists to return.
IBRAHIM: I just need to say that if the people are worried about safety, it's safe. (Inaudible) stabilized. The economy is stabilizing. The political system is stabilizing. Everything is stabilizing and we're urging people to come back. You're going to get a very good deal if you're coming back right now.
LEE (voice-over): That will be the test of Mohammed Morsi's presidency. If he can lure back tourists and investment to revive Egypt's economy.
(END VIDEO CLIP)
CURNOW: So as the government tries to get to grips with the economy, after the break, I speak to the head of an Egypt private equity fund. We talk about the economic legacy of former President Hosni Mubarak and the challenges ahead for this new democracy.
CURNOW: (Inaudible) how damaging was the Egyptian uprising for the country's image is a good place to do business. Well, I spoke to Ahmed Heikal. He's the founder and chairman of private equity fund Citadel Capital and he says investor confidence has been really hard-hit.
CURNOW: Egypt, tumultuous times. How's the country managed its transition?
AHMED HEIKAL, CHAIRMAN, CITADEL CAPITAL: I think we could have done better as well as managing the transitional (inaudible). I think if you look at the last week of President Mubarak's reign and the ensuing three month, we have unleashed a number of events, processes, that have stayed with us and that have caused a lot of problems.
CURNOW: So what do you mean?
HEIKAL: Wholesale prosecution of ministers, wholesale prosecution of business people, wholesale prosecution of policies that were taking place, wholesale prosecution of events that have taken place. I think this was wrong. I think nobody can stay in power for 30 years and not having done certain things right.
In addition to the images that were coming out of Cairo, which were, to a large extent, images of -- that had certain amount of violence, caused foreign investors, foreign investments and tourism to fall back, to fall down significantly. And that has put a certain amount of pressure on the currency and on growth.
And if you don't have investment, then growth is not forthcoming and you don't have employment.
CURNOW: So it's difficult in such fast-moving, fast-paced times to suddenly someone stands back and says, hold on, let's manage our economic transition data within those days --
HEIKAL: Absolutely. It was --
HEIKAL: -- it was a very -- Egypt is a very big ship to steer and you need to steer it carefully. And that did not take place. And you know, you can't rewrite (inaudible).
CURNOW: So what to do in Egypt, then. I mean, obviously now, political direction is going one way; foreign investors waiting to see what's going to happen. Is that critical? It's also about image, isn't it?
HEIKAL: You need -- in Egypt, in order to do this transition from where we are today, to a good system, it would need some time. To need the right people and it will need some time.
I'm very hopeful that things will improve substantially but it will take some time, don't -- if anybody expects that Egypt tomorrow will be, you know, back to normal, back to, you know, fantastic growth and sunshine, no. I think we will have a transitional period that is going to be tough (ph).
CURNOW: But the banking crisis in Europe, impacted Africans on the ground?
HEIKAL: Let me give you an example of a financing that we're just closing out with all the name -- it's -- be a very large project that we are doing right now. The -- if institutions involved, that is awaiting changes that took place in the banking institutions in Europe, those rating changes have caused those institutions not to qualify as guarantors under political risk insurance. OK?
And this has caused us headaches and heartaches and possible heart attacks, moment in order to complete the financing, which I think we are, you know, close to completing.
Africa is a third catalyst, which they don't have enough of, which is enough people who can play this hope (ph), you know, you cannot have a couple, two, three, four, five, six large investors who are catalyzing a continent like Africa. So you need more investors to play this role from the global financial markets. I see now more people having -- eyeing Africa to come and make those types of deals.
But you cannot have the limited number of investors. The other thing that also happened in the continent, which is the education -- you have an -- not an insignificant number of people who are trained and educated abroad.
Those now have come back and they are playing also that role. So the catalysts are, you know, there are a number of catalysts that are taking place and that have attracted capital to Africa. But it's not enough and in the global deleveraging that is taking place, it is going to be -- you know, those other institutions are playing a role, but they need to play a larger role.
(END VIDEO CLIP)
CURNOW: Ahmed Heikal there, from Citadel Capital.
Well, that's it for this week's show. I'm Robyn Curnow. Please do go online. We're at CNN.com/MarketplaceAfrica. (Inaudible) Facebook and Twitter pages. See you again next week.