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QUEST MEANS BUSINESS

Record Markets; Concerns About Market Highs; Market Milestones; European Markets; Dubai Air Show; Expansion in Gulf States; United CEO Says US Government Not Aviation-Friendly; Mini Launch; Paris Shootings

Aired November 18, 2013 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(NEW YORK STOCK EXCHANGE CLOSING BELL)

RICHARD QUEST, HOST: It's a new record high for the Dow Jones, but we haven't made 16,000. Markets around the world are hitting records. It is, of course, Monday the 18th of November.

A brief flirtation with 18,000 (sic), and the economist Jim Rogers tells me it's abnormal and troubling.

The sky's the limit. Emirates CEO tells us of his big ambitions.

And United Airlines chief exec says it would be doing better if it wasn't for the government.

I'm Richard Quest. The start of a new week, and I mean business.

Good evening. Apologies to those of you to whom I gave a heart attack when I just sort of said in the headlines the Dow hits 18,000.

(RINGS BELL)

QUEST: Absolutely not. It is, of course, 16,000 that the US stock markets had been flirting with throughout the course of the session. The markets reached new peaks with the Dow and the S&P 500 hitting key milestones.

This is how the markets closed tonight. We are up 14 points. We're at 15,976. It's a very small gain. But I want you to really look at how the day progressed, and as it went through the 16,000 mark literally at the start of the opening bell. And it made gains throughout the session and fell back at the end of the day.

So we start out of the gate right up to 16,000, and then we bobble on pretty much like that. And then in the early afternoon, middle of the afternoon, we're going to go down. But right at the close, it pushes up high again. The S&P 500 also briefly passed the 1800 mark. The stock surge has some worrying that there's a correction on the way.

And it's not only New York that has done such strong performance. The feel-good factor is not limited to the Dow and to the United States. So, in the United States, we've seen 16,000, but we didn't hold it. The S&P 500 was up as well, the NASDAQ is close to 4,000.

In Germany, Monday's close was for the Xetra DAX, it hit a record high, up just over half a percent. And the Bundesbank, the German central bank, says the German economy looks solid. And China as well. Over in Hong Kong, Monday's close up 5.7 percent, the first response to the economic reforms that we saw last week from Beijing.

Now, there are three core reasons, whichever part of the globe, because this is a global rally in stocks right across the world. There are a variety of reasons.

First and perhaps foremost, the US Fed. Janet Yellen said last week that the Fed is likely to continue its bond-buying program and she said it was imperative to maintain the monetary stimulus. So the supply of cheap cash is unlikely to end anytime soon.

Secondly, relatively strong, solid corporate earnings. Investors were cheered in Q3 by better-than-expected results, 73 percent of the S&P 500 managed to beat expectations. Fourth quarter holiday season is around the corner, and that will be crucial for the year overall.

And finally, as we alluded to with the world, China's reforms, the third plenum result and the new market orientation, Beijing giving the private sector a greater role in the country's economy.

Now, it may be a dangerous world for investors, because wherever you look, there's growth and there's market rallies, but there's also deep risks, any one of which could take the whole thing down. I spoke to Jim Rogers. Well, you'll be familiar with Jim Rogers, always good to have his views on the program.

He's the chairman of Rogers Holdings and one of those people who seems to know where the market may travel in the future. I asked him globally, and bearing in mind what we saw in the United States, if he had any reservations about this rally.

(BEGIN VIDEOTAPE)

JIM ROGERS, CHAIRMAN, ROGERS HOLDINGS: Don't you? The fundamentals aren't there. The only thing that's going on is the major central banks in the world are all printing money at a staggering rate. The Japanese said we'll print unlimited amounts of money. So, Bernanke said, well, I'll throw in a trillion dollars a year. The Europeans said we'll do whatever's necessary.

QUEST: What do you think --

ROGERS: This is insane.

QUEST: -- well, you say the fundamentals, but you have got growth of 2.5, 2.8 percent in the US, you have got falling unemployment, and you did have an S&P 500 average 73 percent beat expectations. So, I'm not saying that there's not reasons.

ROGERS: And the reason that it's going on is because there's an artificial sea of liquidity which is flooding the world. And when the artificial sea of liquidity dries up, what's going to happen, Richard? The market's going to go to 18,000, 19,000? Please.

QUEST: But that artificial flood of liquidity, that's an abnormal situation. There was no choice. The alternatives were less palatable than doing that which they're doing.

ROGERS: Balderdash. What's wrong with you? What do you mean, that? What they should have done is let the system clean itself out, let it collapse. We did what the Japanese did in 1990. We said nobody can fail. Two decades later, the Japanese had two lost decades.

We're going to have a lost decade too because you keep propping up failure, kicking the can down the road. In the end, you're worse off.

QUEST: So, what's your biggest concern? Because clearly the Fed's going to continue pumping $85 billion a month. The tapering's not going to happen until first quarter of next year.

ROGERS: It's not going to happen then. You think Janet Yellen's going to come in and the first thing she's going to do is, OK guys, we're going to cut back? Of course she's not.

QUEST: Well, she's going to have to cut back eventually, by her own admission. It can't last forever, she said it.

ROGERS: I know it cannot, but you know what's going to happen? Every time they cut back and the market collapses, they're going to start printing again because they're bureaucrats. They don't know what they're doing.

They're terrified when the market goes down, and they're going to keep printing, Richard, until the market says we're not going to take your garbage paper anymore, and the market's going to force them to quit. And then, we're all going to have a very serious problem.

QUEST: So, I can hear viewers whilst being grateful for your views this evening being extremely worried of what you're saying. Because what you're saying is that we're on the end of a precipice.

ROGERS: We are. Aren't we? What do you mean? They've been printing up trillion dollars a year in the United States alone. The Japanese are printing staggering. Do you think this is normal? Do you think this is the way the world works?

Now, the Japanese tried it and for 20 years, they didn't have any success. We're not going to have -- you know, Richard, in the early 90s, the Scandinavians said we've got a problem. They let people go bankrupt, they had a horrible two years of pain, and since then, they had a boom for 15 years. That's the way the world is --

QUEST: Can you not see anything good about this rally?

ROGERS: It's a rally. The people who are participating are making a lot of money. A lot of people and their friends, Richard, are having a lot of fun. But what about the 200 million or 300 million Americans who are not having a lot of fun? What about all the Europeans who are not having a lot of fun?

Not everybody's in. If you're on Wall Street, or your brother-in- law's on Wall Street, you think you've died and gone to heaven. But the rest of the world doesn't think that because they know it's artificial.

QUEST: The only question, really, Jim, is when to predict it's going to go turtle.

ROGERS: You should watch QUEST MEANS BUSINESS and you'll find out.

(END VIDEOTAPE)

QUEST: Ha! Good advice! I have to say, if I had any idea when the market was going to turn turtle, do you think I'd be standing here talking now? Zain Asher's live at the New York Stock Exchange. What happened, Zain, in those last few minutes? Down 15, 20 odd points, 10, 15 points, and then suddenly back up again. Any particular reason, or was it just one of those things?

ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Hey, Richard. Well, what typically happens when you reach a milestone like 16,000 is that investors are typically going to start selling a little bit, taking some of those profits off the table.

Also, when I spoke to traders downstairs, they were emphasizing the fact that there wasn't much in terms of volume, and when that happens, you are bound to see some volatility. When I spoke to my sources, I asked them, when can we actually see the Dow close above 16,000?

They said listen, you've got two key events coming up this week. You've got Ben Bernanke speaking at an economists' dinner tomorrow night, you've got the Fed minutes coming out this week as well.

Investors are going to be looking through those with a fine-tooth comb, listening closely to Bernanke's words, going through the minutes, seeing if there's any hint that stimulus is bound to continue for the foreseeable future. That will undoubtedly push the markets higher.

But I do want to emphasize, Richard, that everybody's saying that these are just psychological milestones. They mean a lot more to day traders than they do to institutional investors.

And if anything, they just emphasize the disconnect between what the market is doing and the state of the economy, 16,000 on the Dow, we passed that earlier today, but still 11 million Americans out of a job. Richard?

QUEST: Zain Asher at the New York Stock Exchange. We thank you. Now, as mentioned earlier, the DAX in Frankfurt hit a new high in a strong session across Europe. The London FTSE, the CAC 40 in Paris, and the Zurich SMI all closed up, as you can see the gains on the screen.

They -- those gains, of course, it is now interesting to see which side of the Atlantic is fueling the other, but at the moment, it seems it is -- New York that has the whip hand.

The big Gulf three airlines have been on a multibillion-dollar shopping trip in Dubai. You'll hear from the chief exec of Emirates and from United Airlines when we come back.

(COMMERCIAL BREAK)

QUEST: Etihad, Emirates, and Qatar Airlines flexed their muscles and doled out record sums of money at the Dubai Air Show. It was, of course, the Gulf three -- Emirates, Etihad, Qatar. They announced orders for nearly 400 commercial planes.

The total, $150 billion. Now, that's at list prices. Let's clear up this old canard now. There is no way they spent anything like that sort of sum of money, bearing in mind the way in which they get discounts for volume.

Who got the orders? Well, the Gulf three ordered from Boeings totaled around $120 billion at list prices, and from Airbus, it came in just shy of around about $50 billion give or take from the -- for the European plane maker.

So, Dubai's Emirates placed an order for 150 Boeing 777Xs. They were worth around $76 billion. It was a jaw-dropping sum, yet Boeing's international president thinks this: the growth from the Gulf three was sustainable.

(BEGIN VIDEO CLIP)

SHEPHARD HILL, PRESIDENT, BOEING INTERNATIONAL: Their growth vis-a- vis Europe, vis-a-vis the United States, it is significantly more. But between Asia and the Middle East, there's capacity growth, there's replacement aircraft that are needed for older, less efficient aircraft.

So, it's credible. It's credible. Their plans are credible, their growth is credible. And again, what we like about it is they're putting the best platforms into play: 787, 777, that is the future.

(END VIDEO CLIP)

QUEST: And it is in places like Dubai that the fighting ground is now in aviation. Airbus, of course, selling their A380s, Boeing selling their 777Xs, and the new airports, for example, the Al Maktoum International. Dubai is set to expand capacity. The airport has welcomed its first commercial flight around about a month ago, it was a little Wizz airplane.

But the big, mega airport is due to be completed in 2027, and that is expected to become the largest. CNN's John Defterios is at the air show and spoke to the UAE prime minister, Sheikh Mohammed Bin Rashid al Maktoum about the expansion in the region.

(BEGIN VIDEO CLIP)

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: You think that the growth and passenger growth can continue to be double-digits in the region? And you're very comfortable expanding?

SHEIKH MOHAMMED BIN RASHID AL MAKTOUM: I think so. I think so. I can clearly -- passengers have grown so much, and a lot of people coming here and going from here to American and Europe or Asia. So, I don't have to be strong and also fly Dubai.

(END VIDEO CLIP)

QUEST: Now, John Defterios also spoke to the Emirate's chief exec, Sheikh Ahmed Bin Saeed al Maktoum and asked him about his airline's staggering orders of 200 planes at the air show.

(BEGIN VIDEOTAPE)

SHEIKH AHMED BIN SAEED AL MAKTOUM, CEO, EMIRATES: We ordered them because we need them. It's not just publicity. Because we have to pay a down payment for that, so I'm sure that people will realize, I think, like we did in the past when we ordered a lot of planes, a lot of people have questioned that.

A lot of people, if you remember also when we bought or talked about buying 90 A380s. They thought, how will we be able to fill those aircraft with more than 500 seats? Today, I'm sure that sometimes you come and try to find a seat on that plane and it's very difficult.

DEFTERIOS: What sort of passenger growth can you sustain, in your view?

A. AL MAKTOUM: Last year, we added nearly 34 aircraft in one year to the fleet. So that's a big number. So this year, Emirates will carry about nearly very close to 45 million passengers.

DEFTERIOS: So, if you're growing at least 15 percent a year, that would take us to 90 million to 100 million, say, by 2025. You're comfortable with this sort of number?

A. AL MAKTOUM: Yes, we're really comfortable with that, of course, not counting the UAE will see more traffic coming toward us, obviously.

DEFTERIOS: Back in 2010, 2011, you ordered 80 planes, the 777s, and people looked and said, I can't believe you're putting these orders in during a financial crisis. And then you go forward with 150 planes. When do you say enough is enough, that it's not a grab for market share and this is a nice, sustainable path? What are you seeing that others, perhaps, are not seeing?

A. AL MAKTOUM: I think a lot of people don't see growth because of what's happening exactly in this part of the world, even though we are not only us here. There are many other airlines within GCC countries.

But everybody -- I think a lot of people when we start, they start, let's say, Qatar Airways or Etihad, oh yes, they will take Emirates' market share. Emirates market share increased. Etihad is doing fantastic, Qatar is doing fantastic. Others fly Dubai, there is Al Jazeera. There is many other airlines, Libyan. There are many airlines and everybody's growing.

DEFTERIOS: Are the real drivers for Emirates India, China, Africa? Where do you see the real driver for growth now?

A. AL MAKTOUM: Of course, what's happening in China and the East, Africa, which we can't forget, the Indian continent. Even in Europe, there is many places that we have to open to, and North America, South America. I think when we think about it, we're always thinking about we will see Emirates flying to all the continents.

(END VIDEOTAPE)

QUEST: Now, what does it all mean, when you get the airlines buying so many aircraft? Well, have a read of my article on this exact subject on cnn.com/business. I have posted a link to it on my Twitter account, which is @RichardQuest.

If the airlines around the world are worried about the Gulf three and their fearsome resources -- and they should be -- some CEOs believe the policies of the Gulf governments and the airlines involved.

Others, though, like Jeff Smisek of United Airlines, say the real question is why their own governments aren't following the same policies, pro-aviation. Rather than criticizing, he wants Washington to become more aviation-friendly.

(BEGIN VIDEOTAPE)

JEFF SMISEK, CEO, UNITED AIRLINES: It's not an objection, really. The United Arab Emirates is very supportive of aviation. They understand the power of air travel for the economy, for people, for tourism, for trade, for growing their economy.

I would contrast that with Washington, which really views US airlines as cash cows, something to suck tax money out of, something to over- regulate, and it's really the contrast between the enlightened polices of the United Arab Emirates and the unenlightened polices of Washington.

QUEST: So really, they're benefiting hugely from a government and a regime that puts a priority, and you're being hindered. What can you do about that? Because if you look at Air France that bleats about unfair competition and you look at other carriers that bleat about unfair competition, subsidized airlines and the like, that sort of criticism only goes so far, doesn't it?

SMISEK: Yes, I agree. And I don't view it as unfair competition. I view it as our government holding us down, Washington holding us down. We've done so much self-help in the United States. We have consolidated, we've improved our airplanes, we have improved our customer service, and yet our government continues to hold us down.

QUEST: No one's listening to you. Well, not you personally, but I mean --

(LAUGHTER)

QUEST: -- the industry. No one's listening. The industry's making noise and no one's listening.

SMISEK: Well, just because you can't do everything doesn't mean you don't do something. So, we're very focused on educating the folks in Washington, and also educating our customers. Because it's important for customers for us to be successful so we can have the profitability to invest in the product that they want.

QUEST: When it comes to global competition against an Emirates that's bringing three -- or will be soon bringing three A380s into New York, and they'll have a fleet of 130 A380s. Even an airline the size of United, you've got a challenge in how you tackle that.

SMISEK: Well, of course you do, and what you have to do is have consistency and excellent customer service, consistency in on-time performance, a competitive product, and a wonderful network, which we have. So, we can compete --

QUEST: And the government that will help support you.

SMISEK: Yes. We can compete head-to-head, but not with Washington trying to hold us down.

(END VIDEOTAPE)

QUEST: Jeff Smisek, the chief executive of United Airlines, and he'll be ringing the opening bell on Wall Street at the New York Stock Exchange. It's to mark United's analyst day, the investor day. And on tomorrow night's program, Jeff Smisek will talk about United's plans for the future of his airline and where he wants to go next.

Now, when we come back after the break, we'll tell you about the new Mini model, which is getting a high-tech upgrade and a substantial investment from its parent company BMW.

(RINGS BELL)

QUEST: QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: Bigger, faster. Well, BMW has taken the wraps off what's billed as a bigger and faster and better-connected version of the Mini: the Mini hatchback. The automaker's making a huge investment at three UK manufacturing sites to support the new model. It boasts a new engine and a new chassis. Technology, a classy chassis, you might say.

Talking of the classy chassis, just look at it. That was the original Mini, one of the iconic brands in the motor industry. It first came out in 1959 and production continued until the year 2000.

(RINGS BELL)

QUEST: The brand was revived the following year by BMW, and today's new model is part of a $1.2 billion investment in the United Kingdom's motor industry. Don't call it a car, it's a motorcar. CNN's Jim Boulden was at the launch.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT (voice-over): Three new hatchback models, but still a Mini.

PETER SCHWARZENBAUER, BMW: The new Mini hatch is the next chapter in 54 years of Mini tradition.

BOULDEN: The new Mini hatchbacks also continue a tradition by its BMW owners: it keeps getting just a little bit bigger.

ANDERS WARMING, MINI DESIGNER: This was really our key focus, to make sure that the interior volume on this design is at the point where you can say this is a real four-person car. You have this 30 mil -- longer wheel base, really gives you that knee space in the back.

BOULDEN: Some of the technology improvements are already available in bigger luxury models, but Mini is said to be ahead of the other small car makers when it comes to the infotainment offerings around the steering wheel.

JEREMY LAIRD, TECHRADAR: Mini Connected was already there, but they've just updated it. They've given it a new controller and critically, one of the most important things they've done is they've added support for Android SmartPhones.

UNIDENTIFIED MALE: The press of the world paid tribute to the Morris Mini-Minor.

BOULDEN: BMW acquired the Mini Mark in 1994 and rebuilt it from the ground up, relaunching the brand in 2001. Since then, BMW has produced more than 2.4 million Minis, nearly 1.9 million exported. The United States is the biggest market.

And 14 percent of all cars made in the United Kingdom in 2012 were Minis. And BMW says one in six of the autos it makes are Minis.

BOULDEN (on camera): Mini brought out the quintessential British bulldog to show just how British the car is, but in fact, it's also manufactured in Austria and, starting next year, Minis will also be manufactured in the Netherlands.

BOULDEN (voice-over): Designed in the UK, if not all made here anymore.

PATRICK MCLOUGHLIN, UK TRANSPORT SECRETARY: Well, that's a company making the best use of its manufacturing, but BMW invested 500 million pounds in this plant alone. That is a huge sign of confidence in the United Kingdom.

BOULDEN: Britain now has to rely on non-British players to invest in its auto factories, including BMW. But its economy is growing faster this year than originally estimated, and resurgent car production is playing its part. Mini sales hit a record for the first ten months of this year.

Jim Boulden, CNN, Oxford, England.

(END VIDEOTAPE)

QUEST: Now, coming up, there's a manhunt underway in Paris tonight, a gunman suspected of multiple shootings. These are images from Friday. A man pulls out a rifle in the hear of BFM TV in the French capital. A man was seriously injured today. We'll have the details and bring you up to date in QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. This is CNN, and on this network, the news always comes first.

There's a manhunt underway in Paris after a series of shootings. Authorities believe it started on Friday when a gunman burst into the offices of BFM television. Three days on, and a gunman opened fire at the reception area of the newspaper "Liberation," critically wounding an employee. And police believe another shooting and a carjacking may be related and linked to the same suspect.

New disturbing video of the crash of a Russian jet shows the Boeing 737 nose-diving into the ground, followed by a huge explosion. All 50 people onboard were killed yesterday at the airport in Kazan, the capital of the Republic of Tatarstan. The cause is unknown. Crews today recovered the flight recorders.

The death toll from the super typhoon which hit the Philippines ten days ago is now almost 4,000, and 1600 people remain missing. Food, water, and shelter remain critical. Aid effort continues and is increasing but is still in short supply.

Aerial images from America's midwest show the destruction from dozens of tornadoes which touched down in several states on Sunday. This dash cam video shows a tornado alarmingly close to this truck. Six people were killed in Illinois. An outbreak like this is almost unheard of for the end of November.

Operators of Japan's crippled Fukushima nuclear plant have started removing fuel rods from the damaged reactor. The dangerous task is considered a milestone in the $15 billion cleanup project that's still going on more than two years after a devastating earthquake and tsunami.

More now on the hunt for the Paris shooter. We can cross to CNN international correspondent Jim Bittermann in the French capital. Jim, this is a very rum story, isn't it? What's going on?

JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, that's a good question, Richard. I think the police would like to find this guy and find out what's going on. That manhunt you mentioned began just a few hundred yards behind me because that's the lost place the gunman was seen.

It was a day -- a rather wild day here. It began with the shooting at the "Liberation" newspaper. A young photographer's assistant was shot with a pump-action shotgun. He was in critical condition tonight. He was six hours on the operating table. Here's the way the prosecutor -- the Paris prosecutor described his injuries.

(BEGIN VIDEO CLIP)

FRANCOIS MOLINS, PARIS PROSECUTOR (through translator): The man shot the assistant photographer twice in the chest near the heart. The victim was transported close to a hospital immediately and is currently in intense services. And now, the police have declared this to be an attempted assassination.

(END VIDEO CLIP)

BITTERMANN: Attempted assassination, and that's been at least one charge the gunman, if he's found, can be charged with. Other things might be kidnapping, because a short while after that, he forced -- he did a carjacking, perpetrated a carjacking and he grabbed a motorist, told him to drive around a bit.

And then had himself dropped off here on the Champs-Elysees right in the middle of the day, and then he just disappeared. And of course, there's a lot of ways he could get out of here, including the subway system here. So, in fact, the police are hunting in all directions this evening. So far, no leads, Richard.

QUEST: If there's no leads, there's no indication as to why, so where do they begin?

BITTERMANN: Well that's a good question. There was a similar incident about, oh, I would say about nine months or a year ago, Richard, in which the police made very effective use of all the surveillance cameras around town. They were actually able to track down the gunman in a very short period of time in that incident. Through tracking him on the surveillance cameras, they may try to do the same thing here. But at least in terms of the why behind this, it could be that there's some kind of an anti-news media agenda here, and certainly President Francois Hollande indicated that today when he talked about this incident. And he said that in fact this was an attack on the free press because he linked it to the attack at the BFM Television Network last Friday. He linked this single gunman to both attacks -- the television network and the newspaper. As a consequence, he believes there's an attack on free press, and he said that the interior minister has to do everything he can to track down this guy.

QUEST: And, so, we have this situation -- give me a feel for Paris tonight. Are people worried? Are they concerned? Is there any sense that people are going to be looking over their shoulder?

BITTERMANN: I don't think so at this point, Richard. I think, you know, during the day of course the news had not filtered out really. I mean, we in the news media were following it, but I think that for people on the street, they really weren't aware of it that much. There's a lot of Christmas shopping going on even this evening, so I don't think that in fact people are nervous about it just yet. If there were to be another attack or two attacks or something like that, if there's evidence that this guy is still out there, still ready to perpetrate crimes and shoot people, then I think that the nervousness would go up astronomically.

QUEST: Jim Bittermann who's in Paris tonight. Jim, many thanks. Now, Google and Microsoft are fighting again. This time they're on the same side. The companies have teamed up to remove child pornography from the internet. We'll hear about the digital breakthroughs from the head of the task force in a moment.

(COMMERCIAL BREAK)

QUEST: The companies behind two of the biggest search engines are staging a joint effort to rid the internet of child pornography. Google of course and Microsoft with Bing. They are using new technology to scrub the web of photos and videos showing child sexual abuse. Microsoft's picture detection system marks illegal content and immediately removes all copies from the web. Google's algorithm cleans up the results for over 100,000 web queries, and places warnings on others. The company's executive chairman Eric Schmidt said that the effort will soon expand to searches in more than a 150 language. Eric Schmidt put it this way, "While society will never wholly eliminate such depravity, we should do everything in our power to protect children from harm." The British Prime Minister David Cameron said it was a positive first step in a global campaign.

(BEGIN VIDEOCLIP)

DAVID CAMERON, BRITISH PRIME MINISTER: It's work in progress and there's still more to be done because you know I won't be happy until we've taken every child abuse image off the internet, until all parents get the real choice of filters to protect their children from pornographies. And there's more work to be done. But we really should be clear today that what we were previously told couldn't and shouldn't be done in terms of cleaning up searches for these vile terms, it will be done, it is being done 100,000 terms in 159 countries -- not just here in the U.K.

(END VIDEOCLIP)

QUEST: The British Prime Minister David Cameron. These search restrictions will launch first in the U.K. Joanna Shields is leading U.K.'s taskforce aimed at tackling child abuse images online between the U.K. and the United States. Earlier I spoke to her about how the companies are modifying web searches.

(BEGIN VIDEOCLIP)

JOANNA SHIELDS, CEO, TECH CITY U.K.: There've been some high-profile cases here in the U.K. of people searching for child abuse material and then these perpetrators committing horrific crimes. And what we wanted to do was ensure that when you searched on Google or Microsoft, you couldn't find any illegal material, even if you used these you know provocative or you know really horrific search terms. So, what the prime minister did is he put a challenge to research engines and he said, 'Listen, you've got all the bright minds in the world here -- you've got the best technology, you know your platforms, your products and your services. Go back and figure out what it would take to eliminate this content from the web. And four months later, I'm happy to report, that we've had a massive success here. We've had some testing being done over the last couple of weeks, and we were able to prove -

QUEST: Right.

SHIELDS: -- that we could not find any child abuse content on the web or pathways to that, using the new technology developed by both parties.

QUEST: This search element doesn't prevent you from asking the question? It merely -- it seriously prevents you from getting anything that you shouldn't get.

SHIELDS: You're going to get a warning notice, and the warning notice will say "You are potentially breaking the law if you click any further." So there are, you know, these warning messages are appearing on all the search engines now which is a huge development. Because sometimes you might be looking for something that is innocent and type something in wrong. But then Google also has worked with the autocomplete function in the search bar where you've typed something in and you know sometimes they'll make suggestions. Well it's making sure now with the technology that you don't get suggestions for this illicit material or illegal material. And so the other thing is that if you do go into those pathways, you know, what they've done is they've removed all the content that is available on the free web, you know, the commercial web, to that you can't access that material or find that material anywhere

QUEST: Right, right.

SHIELDS: -- using those search terms.

QUEST: We are in all of this only one step ahead and sometimes behind -

SHIELDS: Yes.

QUEST: Those who wish to either provide or search for this material. But you'd agree, this is something that you've just got to keep doing and doing again?

SHIELDS: Yes, your absolutely correct, Richard, and that's why the Prime Minister has engaged the home office here and the President has engaged the Justice Department in the U.S. to form a U.K./U.S. online, you know, child safety taskforce which we are putting together the elements of that now. What problem sets we're going to address. And I think based on what we saw today -- what the search engines have provided, what the ISPs have done, we've seen a new paradigm, a new way of cooperating government and industry to solving these really serious social problems.

QUEST: Well, a final question, Joanna -

SHIELDS: Yes.

QUEST: It might seem a little unusual. But I do -- I just want to clarify, because anybody watching. What we're talking here about is child pornography.

SHIELDS: Correct.

QUEST: We are not talking about looking for adult entertainment online, are we?

SHIELDS: No, absolutely not. What we're looking for is illegal images which is child sexual abuse images, not -- we're not talking about legal pornography -- absolutely not.

(END VIDEOCLIP)

QUEST: That's Joanna Shields talking to me earlier. So, the rare Bitcoin -- one Bitcoin is now trading at more than $650 dollars -- $664.90 is the current price. You'll be familiar with Bitcoins. They are the internet-created currency. It has a special algorithm that just means that only so many -- I think it's 20 million -- can be produced, and when they're gone, they're gone. You get them by buying them or you get them by mining them through computer systems. That's the nutshell of Bitcoins. But there are those that suggest it is part of the shadow banking system, it is anonymous and U.S. senators are now exploring the so-called risks, threats and promises of this virtual currency in Washington. Now, the senators have been holding hearings, and they are concerned about the role of virtual currencies being used in say for example sites like The Silk Road which has been an online marketplace for illegal drugs which the FBI has shut down. Fans of Bitcoin are hoping the hearings might boost legitimacy and credibility and value. Well, they might've been disappointed. These are the various submissions that were made to the committee and that have been published. First of all, the U.S. Treasury. They talk about "legitimate financial services." Virtual currencies provide legitimate financial services but may also be "exploited by criminal actors." That's that classic sort of take with one hand and give with the other. Then you've got the Department of Justice internationally they say. The DOJ's concern is it "designed to attract illicit payments or so lax that they are unwitting conduits" for bad payments. The Department of Homeland Security. Well, they are saying these things have an "aggressive posture," says Homeland Security because of the ease of using Bitcoins for nefarious means. You get an idea now. They're all sort of saying, 'Well, not too bad but. . ." So, the Federal Reserve. They would like to promote a faster, more secure and more efficient payment system. That's a bit like saying make the existing system work better then you won't have to use Bitcoins. And as for -- no, no -- and as for Bitcoin themselves, Patrick Murk of the Bitcoin Foundation, he took on board all the criticisms and said -- he agreed. Bitcoin is "not a magic cloak for illicit transactions." It is a driver -- he said a driver of global change delivers -- delivers benefits to humankind across the globe. And he wants ordinary banks to accept Bitcoins. What you accept or what you like? So far it seems to be four against one. Tom Sater is at the Weather Center for us this evening. I see Tom has a straight line handkerchief and I'm a little more old- fashioned, Tom, I'm going for the pointy one.

TOM SATER, CNN METEOROLOGIST: I like it, I like. it You know, given the day.

QUEST: I'm old fashioned.

SATER: I like that too -- you know, switch it up a little bit. You never know what you may get. Speaking of switching things -

QUEST: Right.

SATER: -- a little bit, Richard, I think finally airlines are getting back on schedule. We had a number of delays and cancellations in the U.S. from St. Louis to Chicago, backed up because of the severe weather. Cincinnati, Detroit, Cleveland -- again, what a day -- a rare November tornado. So quite an outbreak at that -- 550 severe weather reports, mainly in the middle of the country -- Missouri, Illinois, Indiana, Kentucky, Ohio, into parts of Michigan, all due to some very cold air that's sliding down from Canada. Meeting up like we typically see in spring really with that warm, moist air. But in this area of yellow here -- this is a slight risk. And then we had the moderate risk for severe weather, and then in the middle of that, we actually had high risk -- 19 million Americans in that high risk. Only the second day of 2013 that the U.S. had a high risk, and we had a number of tornadoes right in that bulls-eye, 120 million all in the risk area. That's a third of the population. But all of the wind reports, the hail reports -- 71 tornadoes. That number changes somewhat, but you can see in the U.S. how the average does drop down in November, typically 58, and then even 24 in Dece3mber. That's not unusual to have tornadoes in the month of November, but nothing quite like this when you have an outbreak of 71. Six fatalities in the state of Illinois. The amount of damage here truly is tremendous, because when you talk about the state of Illinois and Indiana, these are mainly farming states -- a lot of corn of course was harvest into their winter wheat now as well. Tornado was headed toward Chicago. It was a U.S. football game at Soldier Stadium -- they had to evacuate 60,000 just before the tornado moved into that region in the metro area. It was able to dissipate, so good news for the 9 and a half million that live there. Let's take a look, though, what we were watching -- and what a day, an event. Something else that doesn't happen too often -- EF4 out of a possible EF5 on a scale of tornadoes -- two of those EF4s, first time in the month of November since records -- 1950 -- have been kept that they had an EF4. And this is -

QUEST: Tom.

SATER: -- the way it looked in Washington, Illinois.

QUEST: Tom, I'm -

SATER: Yes, actually --

QUEST: -- I'm interrupting you if I may.

SATER: Yes.

QUEST: Why, why so late in the season? Why now? Why so many?

SATER: Oh, Richard, another question that I'm sure will be studied for some time. I know that's not the right answer, but it was very warm ahead of this system -- ahead of the cold front. Very cold behind it -- we had some good snowfall. But the Jetstream high aloft was perfect. It created wind shear -- different levels of the atmosphere created rotation. Look at this damage pattern, Richard. You could see it -- we're getting the aerial pictures -- it just goes on and on and on. I mean, why, that's a great question, and I'm sure we'll be talking about this one for years to come. I mean, you have the typhoon, you've got outbreak of tornadoes -- more fodder for those who want to discuss global climate change maybe.

QUEST: Well, we'll leave that one for another day. Tom Sater -

SATER: Yes.

QUEST: -- at the World Weather Center. We thank you for that. Cutting costs to double its assets. The Russian lender Sberbank says an ambitious five-year plan is the way to do it. We'll talk to a senior executive from the bank who joins me after the break.

(COMMERCIAL BREAK)

QUEST: The New York Stock Exchange went Russian for the day. Wall Street hosted Russian executives and government officials. It was all designed to promote investment opportunities between the two countries. The senior vice president of Russia's biggest lender, Sberbank, is the (inaudible) of the delegation. The bank is determined, determined to double its profits and increase assets within five years. Anton Karamzin joins me now to discuss this (deter-mant).

ANTON KARAMZIN, SENIOR VICE PRESIDENT, SBERBANK: Determined. Well, people have seen the Russian macro (inaudible) slowing down a little bit, but the beauty of the business model that our bank operate is that we still are quite confident that we can deliver those strong results and referring to the previous five years, we've tripled our profits -

QUEST: So where are you going to make the money?

KARAMZIN: We're going to make the money in the core businesses -- retail banking, corporate banking, investment banking. We've recently acquired one of the biggest investment banks two years ago. And about 10 to 15 percent of our business activities focused around Russia -- (CRS) countries, Eastern Europe and Turkey.

QUEST: Right. The core -- people -- I guess there's never an easy way to ask about the concerns over the Russian economy and the concerns over transparency. I remember when President Medvedev -- when he was in office -- he was very keen that new laws were brought into -- for transparency and the like. They haven't happened in the same way the people had hoped.

KARAMZIN: Maybe not for the whole of the market, but I think what the change has been and quite radically is that a discerning investor has now clearly an opportunity to look deeper into individual companies and to discover that some of them, like my company -- sorry if I'm beating my drum -- has grown up in the rating of corporate governance and transparency quite significantly.

QUEST: Where are -- we think of the Russian economy and the Russian investment opportunities as being very much fossil fuel-led, and being very much commodity-led in those areas. But you would obviously try and point me in different directions.

KARAMZIN: Of course. And there's facts will speak to that. Look at the trades of the most recent IPOs that have -- at least in NYSE or in London out of Russia -- those are our technological company. That company those are financial services companies and the demand has been quite good. And the level of penetration of financial services into the Russian economy is probably close to half or only two-thirds of a comparable penetration that you will see in similar emerging markets Not even say about the developed markets.

QUEST: Interesting. Come back again please. We need to talk more about this in the future. Many thanks indeed. Now, we're going to stay with Russia since it was Russia day on the New York Stock Exchange. Carlsberg who have nothing to do with banking but lots to do with brewing says new Russian laws aimed at curving alcohol abuse are hitting sales in the country. Russia's one of the Danish brewer's biggest markets, and the firm chief executive told me recently Carlsberg will return to growth but Russia is proving a problem.

(BEGIN VIDEOCLIP)

JORGEN BUHL RASMUSSEN, PRESIDENT AND CEO, CARLSBERG: It's true that the Russian market has been very difficult this year and certainly the decline in the total beer market is more than what we expected going into the year. What has had great effect than what we anticipated would be the kiosk closure in Russia where they can no longer sell beer if they're not stationary, but also from (inaudible) this year, the macro economy being less strong, not growing as much as expected, also take out some let's say growth from the category and that's' why we're looking at a much steeper decline than expected. But at the same time, within that, we are performing better. Our shares are up more than we expected and of course also has meant we had to go into a lot of cost efficiency and look at what we can do differently to be more efficient and therefore come out with some decent results anyway in Eastern Europe.

QUEST: If you push out into next year, what trends do you have to watch and then try and ride to grow the business?

RASMUSSEN: I'd have to say this by region because it's really a different agenda by region and I'm not going to be specific about 2014. I will come back to that in February, then we start guiding on '14. But if I look at (inaudible) (trend), I would say Western Europe is probably going to be another year of quite a changing environment, a change in consumer environment, that's why apart from trying to grow in market share, you have be able to keep working on our business model, make it more efficient so we can continue to see the improved possibility in that region. Eastern Europe -- time will show what we will say about the market for next year. But I think at some point in time, we will get growth in Russia and the Eastern European markets again because now consumption is at a very low level compared to Western European countries. So at some point in time, we start getting growth back into that region. And then Asia will be basically more of the same -- good, strong market growth and then also continue with us taking market share in a number of markets out there and most of the markets.

(END VIDEOCLIP)

QUEST: You can't put it more bluntly that. Taking market share in all of the markets. (Inaudible) profitable market, but a "Profitable Moment" after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's "Profitable Moment." You heard on the program Jeff Smisek the chief executive of United Airlines. Unlike many airline CEOs he didn't spend and waste his time bashing the Gulf Three emirate after having (inaudible) -- oh, no. He recognizes that the governments of those areas - - the governments of Qatar and the UAE -- are pro-aviation, and in doing so, have managed to foster an environment where the airlines have grown. He makes the point that in his case, in Washington, is holding aviation back in their regulation, their taxes and the way they're sucking money out of the industry has been a massive disadvantage. One could arguably say the same thing in the United Kingdom where the British government is many years into an inquiry into whether to build a third runway to Heathrow. And whilst all these debates and inquiries and taxes and investigations and discussions and talking, when it all continues, the Gulf Three spend big, and I mean seriously big. $150 billion buying planes by the dozen. Oh, there's a revolution all right underway in aviation. But don't blame the Gulf Three for the fact that they're on the right side of it. Now that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead (RINGS BELL), I hope it's profitable. I'll see you tomorrow.

END