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QUEST MEANS BUSINESS
Record-Breaking Rally; Global Markets; European Markets Mixed; Bitcoins in Space; Internet Surveillance Warning; Console Wars; Apple Versus Samsung; Smart Objects; US Energy Boom
Aired November 22, 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)
MAGGIE LAKE, HOST: Ah, the sweet sound of 16,000. US markets end the week in winning style. It's Friday, November 22nd.
A record-breaking rally. Stocks on Wall Street are hitting major milestones.
The online currency that's out of this world. Tonight, Richard Branson tells me bitcoins are here to stay.
And choose your player. Sony and Microsoft are locked in the console wars.
I'm Maggie Lake. This is QUEST MEANS BUSINESS.
Good evening. What a week in the markets. Records keep tumbling on Wall Street, Dow closes above 16,000 for the second day running. The S&P 500, the broader measure, closes above 1800 for the first time.
This is the seventh weekly gain for the Dow and the S&P 500. If we take a look at the NASDAQ, which has been lagging, that managed to close above 4,000, or just about at that level, or very close to it anyway.
The major factor this week has been the Fed. Now, stocks recovered after the Fed released the minutes of its last meeting on Wednesday. They showed the Fed may soon start to scale back economic stimulus, although it doesn't necessarily mean that interest rates would rise immediately. Stocks sold off temporarily on that, but then went right back to their rallying ways.
Meanwhile, Janet Yellen also moved a step closer to becoming the next Fed chief after winning approval from the Senate Banking Committee.
Now, stocks worldwide also buoyant. The Nikkei at a six-month high and volatility in Europe at a seven-year low.
Since January, the Dow has climbed by 22 percent. The S&P 500 is up by 26 percent. Those are some big numbers. Let's get to Alison Kosik at the New York Stock Exchange. Alison, we are looking at tremendous gains, and yet, you and I keep talking about the fact that the mood still seems skeptical.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, it is a little skeptical, but it is sort of steady as she goes at this point Stocks at this point are riding this trend, this momentum, and that trend, traders say, is a trend of stocks moving higher. One trader telling me at this point, there aren't many sellers out there. There are few reasons to sell.
Even these whispers of tapering that we hear that's going to happen around the corner, not enough to curb the buying at this point, because the reality is, many investors actually feel that any pullback in stimulus that will happen won't happen until next year.
So, one trader telling me, when could stocks hit a rough patch? That could happen, actually, in January when the debt ceiling dilemma rears its ugly head again. And if that throws stocks into a tizzy, the thinking is, the Fed may even put off tapering even longer.
So, you're seeing this wave of momentum go higher and higher. One more number for you, I know you had a lot of numbers at the top. The Dow is at its 41st record high of the year, and the year is not even over yet, Maggie.
LAKE: And yet, there are still non-believers. Amazing. Alison Kosik, thank you so much. Now, all around the world, investors are fixated on the timing of the Fed's next move. Jens Nordvig is head of Global FX Strategy at Nomura. He joins us now.
Jens, great to see you today. There is so much debate about what's going on in the markets and what the Fed is going to do. Let's start with the fundamentals and the Federal Reserve. It seemed from the minutes that they were trying to communicate, listen, we may start to taper even if the economy still looks like some of the data is patchy.
The markets sold off on it, and yet, in a heartbeat, they were right back up again. How do you read where the Fed is?
JENS NORDVIG, GLOBAL HEAD OF FX STRATEGY, NOMURA: I think they want to see the data pick up somewhat before they go ahead and taper. So, I think that's the key message that we have learned over the last couple of months.
I think also it's important to keep in mind that even if they do go ahead and taper -- our forecast is in March -- they want to keep short interest rates as low as possible. So, it's not an overall tightening, it's just a little bit of a reshuffling on how they conduct monetary policy.
LAKE: And what is that going to mean for the markets? We've seen stocks get really spooked at any suggestion the punch bowl's going to be taken away and that easy, easy money is going to start to change a little bit, even if it's not dramatic. And yet, we keep blowing through these records on a daily basis. It's got a lot of people confused. What is it going to mean for stocks?
NORDVIG: I think what you're seeing this year is that we go through these phases where we worry about something specific. Obviously, tapering was very much a concern in the second quarter. Over the summer, we had emerging markets a big concern, growth slowing there. Right now, we don't have anything specific to worry about, and stocks are grinding higher --
LAKE: And we were worrying about the fact that we're not worried!
LAKE: Are we worrying too much?
NORDVIG: Well, eventually we'll have reached a sort of too-high level and we can worry about that. I don't think we're quite there yet. And I think also on the Fed, it is some months away until we'll get the tightening move, and therefore, I don't think that's the main risk factor.
I would say things we worry about is -- into next year is China slowing. That would be a big risk for global equities, and that's something we're very focused on. And then obviously on the political front, are we going to have another political conflict in the US that could upset markets? That's a little bit out in the future, but I wouldn't dismiss it for early next year.
LAKE: And it seems that China may be the more important -- a lot -- there's so much rhetoric around the politics, people really think in the end, they'll get it done, as we saw before. When it comes to China, what are the ripple effects of that?
We saw emerging markets really get whipped around with central bank policy everywhere. Europe seems to be struggling to recover. How key is China? What kind of slowdown would worry you? A mild one? Is that worrying? Or is it something sharper as they try to put these economic reforms in place?
NORDVIG: Our official forecast, actually, is for 6.9 percent growth next year in China, which would be much lower than we've seen for the last several years, and something that will put downward pressure on commodity prices potentially, and cause a bit of a headwind for emerging markets globally. So that would be negative for global growth.
That's what the Chinese authorities want. So from a longterm perspective, it's the right thing to do, avoid overheating. But it's still going to be a bit of a challenge for global growth in the short term.
LAKE: And I guess we're going to have to see if the US and Europe are able to grow enough to offset any of that slowing in China. Jens Nordvig coming in from Nomura. Thank you so much for joining us.
NORDVIG: Thank you.
LAKE: Well, we are going to take a look at European markets right now. If we take a look at the action, a little bit subdued and a little bit of a mixed picture. The best gains were found in Germany, where companies are becoming more optimistic. Business confidence is at the highest level in more than a year and a half.
In addition, the so-called Eurozone Fear Index, which measures volatility, fell to a seven-year low, perhaps suggesting that investors are feeling pretty confident about stocks.
Now, according to Richard Branson, you won't need your wallet when you leave Earth. The businessman is letting adventurers book a seat on his Virgin Galactic spacecraft using bitcoins. That's right, Branson tells me why he's accepting the payment system from people who want to travel to space with him next year.
LAKE: Attention Earthlings: you can now book your flight to space using bitcoin. Richard Branson has announced that Virgin Galactic is accepting the digital currency as payment for its flights. Branson has been building the world's first commercial space line for nearly ten years. The company unveiled its first passenger spaceship in 2009. Commercial space travel is set to begin next year.
Now, a seat on the maiden voyage will cost you $250,000 or 350 bitcoins, as Branson told me today. A bitcoin is a fairly new form of online money that is not backed by a central bank. It's a volatile currency, though, and it has been on a particularly wild ride lately. I spoke with the British businessman on the phone earlier about what was behind the decision.
RICHARD BRANSON, FOUNDER, VIRGIN GROUP (via telephone): Bitcoins has been going for about a year now. I personally believe that they're here to stay. There's a lot of people who got into buying bitcoins quite early on who've become multimillionaires as a result.
And a number of them have asked us if they could use bitcoins to buy space tickets. For instance, today there was a female flight attendant from Hawaii who became a millionaire from buying bitcoins, and she wants to go to space. We said we'd be delighted to accept her bitcoins.
I'm personally fascinated by new payment fixations, like Clinkle, Square, new payment processes. And I think that the idea of a global currency like bitcoin is something which appeals to a lot of people, particularly people who are interested in new technology.
LAKE: You are one of the world's best-known businessmen. The fact that you're going to accept this, whether you intend it or not, is going to look like an endorsement, and there are a lot of people who are fans of bitcoin.
But there are also regulators and officials who remain concerned that this is a vehicle that is still going to be primarily used by criminals, but terrorists, but people who are looking to skirt international laws. Are you at all concerned with that?
BRANSON: I'm not too worried. I think the Congress debating bitcoins at the moment, and a little bit of regulation, I think, makes sense, as long as it doesn't stifle innovation. The technology is -- whoever set it up is an absolute genius.
It's bold, it's entrepreneurial. It's a new -- it's the start of a new revolution in the same way I think that Virgin Galactic started a revolution. And I think we want to participate, and we'll leave it up to regulators to worry about what kind of regulation these new payment systems need.
LAKE: What about the reliability of it? There is a huge amount of volatility right now. On CNN just this week, we had a story that it went from 500 or 900 back to 500 in just one day. Does that worry you, that it's so volatile, from a business perspective, if you're accepting this as payment.
BRANSON: Virgin Galactic can decide whether it wants to hold on to them or hold onto a percentage of them or transfer that into dollars. So, it's not actually that risky for a company to accept bitcoins. There's a market in bitcoins, like there's a market in gold or silver, and one can decide -- take a position or not take a position.
LAKE: Bring us up to date for those who haven't been paying attention on where we are with the maiden flight. Is it on schedule, and what can you tell us that's new?
BRANSON: I feel a bit of a fraud, because I've been doing these interviews for a while, and almost every time I've said it, it's going to be in the next few months.
BRANSON: I really do believe it will be in the next few months. We're 99 percent there. We've ticked pretty well every box. It is rocket science, so it's taken us a bit longer than we thought. But next year is going to be the year of Virgin Galactic, the year of commercial space travel. And I'm willing to bet on that.
LAKE: I think we can all agree we want them to get it exactly right before they book that day.
Well, the inventor of the world wide web says government censorship could threaten the future of the internet. Tim Berners-Lee warns that a growing tide of state surveillance poses a danger to democracy.
His warning came before the release of a global online freedom table. The report ranks countries according to things like the availability of the internet, access online, censorship, and empowerment through the web.
Now here are the countries that came out on top, some of them may not surprise you. Sweden, Norway, the United Kingdom, the US, and New Zealand. At the bottom of the table, Pakistan, Zimbabwe, Mali, Ethiopia, and last of all, Yemen.
Charles Hodson sat down with Tim Berners-Lee earlier today to hear his take on how countries stacked up this year, starting with Sweden taking the top spot.
TIM BERNERS-LEE, INVENTOR, WORLD WIDE WEB: Partly it's attitude that the internet should be a -- something which is more of a right, more of a fundamental utility that everybody -- government needs to provide to people and people need to use.
CHARLES HODSON, CNN INTERNATIONAL CORRESPONDENT: And in what way does it need to be used? Because I noticed that the United States is only number four. Why isn't it number one?
BERNERS-LEE: Well, the US -- I suppose there are two things you could point to. One of that is that actually, the United States is a big country. It has actually -- it doesn't have a very high internet penetration. Even though it's the first country to employ the internet, it hasn't done a very good job of getting it to the rural population.
And then, of course, also there's the -- government abuses of the internet when it comes to spying on it, which knocks it down, has knocked it down this year.
HODSON: So, there are inequalities. Let's come back to the surveillance, but certainly there are inequalities in terms of access. Essentially, in some countries, which are fundamentally unequal already, it seems that the rich have access and the poor do not.
BERNERS-LEE: Yes. Or sometimes it's the rich and the poor, sometimes it's the urban and the rural. Whereas other countries decided, you know, everybody in this country has got to be able to participate.
Britain, for example, has also decided everybody should participate, so we're going to -- we're trying to get everybody online, and then when we get everybody online, government will be quick, easier, everything -- industry will be quicker and easier, everything will be more efficient.
So, it's that sort of attitude of we're going to get everybody online and then -- and that will -- when that happens, then it will be like -- it'll be more of a right, it's a vehicle to access.
HODSON: Reading the deliberations of the World Wide Web foundation, which you head, one has the impression that the web which you founded has turned into something quite ugly in some ways, that you're really very dismayed by the degree of political surveillance, the extent of the political surveillance that we've seen, it's been revealed particularly in the last few months.
BERNERS-LEE: Well, of course, the last few months have been -- that's really topped the charts when it comes to people's -- well, the news people have seen about internet.
But on the other hand -- yes, that's dismaying, but on the other hand, also what you see from the internet is that in 80 percent of countries, people are getting together on the web using social networking sites, for example, in order to hold their governments accountable, in order to make real change.
And in 40 percent of countries, there's not only people getting together, but actually having an effect. People have affected the government, they've affected their country by collaborating together on the internet. So in a way, that is showing people being able to use the web as a serious force for the good.
HODSON: What's your position of -- in terms of surveillance or at least censorship? Because many people find there's a lot of web content that is distasteful that they would like to see that kind of thing being taken off by social networking groups and others.
BERNERS-LEE: Well, in a way, to a certain extent, what countries find really should be blocked, different countries -- some countries just -- they have a vote and they decide that they don't want to have pornography on the internet. Other countries decide that no, I actually have the right to be able to --
HODSON: But you're not worried about that?
BERNERS-LEE: No, no.
HODSON: It's physical surveillance that worries you, is it?
BERNERS-LEE: What worries me is when it's used for political -- yes, certainly. So there's one -- there's -- the blocking is one thing.
And blocking, in fact, in a way, is -- is the least of the worries, because when you're blocked, there are lots of countries where you just, you go there, you open your laptop, you go to your favorite sites and you just can't get there, and it is a bit of a shock. But you realize what's happening. And lots of people are referring to those sites, you know they exist. It's not underhand.
But spying is more insidious. When a government spies on its population, it'll let them go to the sites, it'll let them explore, then it'll just watch -- see who they are, see who their friends are, and then one moment they'll disappear from their houses and they've gone to jail.
LAKE: Well, let the games begin. Microsoft's new console, the Xbox One, is on sale around the world, and now the real battle gets underway with Sony.
LAKE: The console wars are officially on as Microsoft's Xbox One went on sale worldwide today. It's the tech giant's first new gaming console in eight years, and early demand has been strong. It goes head-to-head, though, with Sony's PlayStation 4. That console was released in the US last Friday while Sony gamers in the UK will have to wait another week.
Let's bring in Dan Costa, editor-in-chief of PCMag.com. He has an Xbox One on his hands. Precious inventory here, Dan. So tell me very frankly, there's been a lot of hype, the Microsoft marketing machine has been out in force. Is it going to live up to it?
DAN COSTA, EDITOR-IN-CHIEF, PCMAG.COM: Yes, that was the big thing. We'd seen it in action, we'd seen demos. The question is, was it going to work as advertised?
LAKE: Yes. Through the rigors you guys put it through.
COSTA: Right. And actually, it made a great demo for about six months. Once we got it in the lab, would it perform? And to be truthful - - we've had it for a while, now. We've put it through some tests, and it's kind of a great device. It's kind of amazing. It works as advertised, and I think it's going to make a lot of people really happy.
LAKE: OK, is it a great device for gamers or for everyone?
COSTA: That's an interesting thing. It's a little bit different strategy than Sony's taking with the PlayStation 4. The Xbox One has a lot of features that are not just dedicated to gaming. It'll connect to your TV and works with your cable box so that you can actually change your cable channels just by using the voice commands built into the Kinect center.
LAKE: Right. Which is this on top.
COSTA: Yes, that's a --
LAKE: Right? The Kinect part on top? Which used to look different. Because I have the older one now.
COSTA: Yes. This is a much -- and that's the other thing. The Kinect itself, much improved. It's now 1080p, it's a very sensitive camera, and it's a great feature. And being able to change channels using your voice is a great feature for anyone, not just gamers.
LAKE: So the coach potato nation.
LAKE: Not that we need that. For -- you mentioned the difference with Sony. It's more expensive.
LAKE: And this is a big-ticket item. People are going to have pay up for it. I have heard that with any of these new technologies, voice commands -- listen, I have two kids, it's screaming, it's so loud in my house -- does it all work seamlessly, or can we expect a little bit of a learning curve here, and will that put consumers off?
COSTA: There will be a learning curve, particularly with the voice commands. You have to sort of learn a little bit about how to talk to it. But let me tell you, we were pretty impressed at how smooth these things were. The voice commands were smooth.
It recognized different players in your actual physiology in your body. And if you walk in front of the Kinect, it will automatically call up your player profile and recognize you as an individual.
LAKE: Yes, so definitely improvements from my experience trying to --
COSTA: All seamless. Much, much better.
LAKE: -- turn that on. Here's the question, though. First of all, very quickly, is it enough to beat Sony at its game?
COSTA: I think that both these consoles are going to do really well. I think that most people are going to stick with the console platform that they already have. I think that Xbox --
LAKE: Because their friends play.
COSTA: -- has a little more upside.
LAKE: What about the real threat? And that's from something as simple as this. There are a lot of gamers, unless you're a hardcore gamer, that are saying, oh, Candy Crush! QuizUp, which I just found out about this week --
LAKE: -- which is totally addictive and the top-selling app. It's mobility, it's apps, people have their tablets. Is that going to cut into the business that was traditional for Microsoft and Sony?
COSTA: Absolutely. Absolutely. It already is. It already is. You're seeing ship -- the console gaming market's in decline. These other new platforms are taking off. The thing that Microsoft can do here, though, is if you look at the interface of the Xbox One, it's very similar to the Windows Phone interface, very similar to their tablet platform and Windows 8.
So, you're starting to see some collaboration here and some uniformity. I think that's their longterm game, and I actually think it's a pretty good strategy.
LAKE: Building for the future, not just for this one product, as much as it's wanted. We see the people lining up, and I had to try it. I tell you, something's got to -- it's got to play for me, Dan, for me to get better at this, I'll tell you. But maybe that's in the works one of these days. Dan Costa from PCMag.com. Thank you so much.
COSTA: Thank you.
LAKE: We're going to stick with the idea of this, these devices. Apple has struck a blow against Samsung in the war over who holds the rights to the technology in these types of devices, in the tablets that we're all using.
A jury in California has ordered Samsung to pay Apple $290 million for infringing its patent. That's on top of $640 million in fines that Samsung was slapped with in 2012. It is the latest judgment in a marathon case involving suit and counter suit by the two rival phone makers.
The epic patent struggle goes on. Both companies have appealed the original 2012 decision and are embroiled in dozens of disputes in courts around the world.
Tony Fadell knows Apple products inside and out. He was senior vice president of Apple's iPod division, leaving to set up his own company. Nest is redesigning household goods, like thermostats and smoke alarms, to make them smarter and, they promise, more desirable. Richard Quest spoke to him earlier, and he told Richard about why he decided to go it alone.
TONY FADELL, FOUNDER AND CEO, NEST: Our goal is to take these unloved products in the home, reinvent them with new technologies, make them connected so they're safer, more energy-efficient, so you actually know that you're being protected, that you know you're saving energy.
RICHARD QUEST, CNN INTERNATIONAL: I love this phrase, "unloved objects in the home."
FADELL: And there are many.
QUEST: What are they? What have we -- so we've got the thermostat, we've got the smoke alarm or smoke detectors, CO2 detector. What about -- what else is unloved?
FADELL: Trade secrets. You'll see in just a few years as we create those products.
QUEST: Clock radios?
FADELL: Clock radios, a lot of people, they still don't --
FADELL: -- set themselves.
FADELL: Kettles, toasters, they still burn the toast. You need a Nest Protect because the toaster will still burn your toast. Why should that be?
QUEST: So, are you going to make a toaster?
QUEST: Are you going to tell me any product that you're working on?
FADELL: Yes, a Nest Protect and a Nest thermostat.
QUEST: But this -- but you obviously --
FADELL: You see where I came from. Apple, right?
QUEST: You came from Apple.
FADELL: We don't talk about things until they're ready to be purchased.
FEMALE ALARM VOICE: Heads up. There's smoke in the dining room.
QUEST: Why are you risking a life of financial security with products, be they unloved or otherwise?
FADELL: Because these frustrate me. They frustrate my family, they frustrate other families. We wanted to go and finally fix them. Who else is going to go and fix them? For 40 years, they've been the same. No one's tried to fix them, so we think --
QUEST: But why do you want to fix them?
FADELL: Because they're frustrating! I waste energy with my thermostat. I get woken up at night with my smoke detector. Why do they have to do this? We have much better technology. We have SmartPhones that can control the world. Why can't your smoke detector not wake you up in the middle of the night?
FEMALE ALARM VOICE: Smoke alarm hushed.
QUEST: Do you think that the age and the day of the inventor is still relevant? Now, Steve Jobs with the iPhone and the iPod, but they were one on their own. We all look for what's next. We all look for the next big thing. Where do these ideas come from?
FADELL: They really come from frustration, right? We were frustrated with our phones, we wanted to take all of our music everywhere. Frustration is a great -- source of inspiration.
QUEST: I've got to ask you, even though we're here to talk about Nest, not iTunes, iPhones, and Apple. Has Apple under Tim Cook lost its mojo?
FADELL: I think -- look. The team knows what they're doing, they've been there for decades, I've worked with these guys. They know what they're doing. Innovation takes a lot of time, right? Think about it. It took five, seven years to get from an iPod to an iPhone. And then it took more years to get to an iPad.
QUEST: But there's no guarantees with innovation it will be successful.
FADELL: There are no guarantees. There are a lot of things that we tried at Apple that weren't successful, you just don't remember them. You have to try, though.
LAKE: After the break, not selling a car, but a dream. We'll get behind the wheels of Ferrari's newest super car.
LAKE: Welcome back, I'm Maggie Lake. These are the top news stories we are following this hour. Twin blasts in the Pakistani port city of Karachi have killed at least four people and wounded many others, according to CNN affiliate GO TV. A witness says the bombings took place near a tea stall. The injured have been rushed to hospitals.
The death toll has climbed to 51 in Latvia following Thursday's roof collapse at a supermarket. The mayor of Riga says up to 7 people are still missing. Searchers are reportedly using surveillance camera recordings to try to pinpoint them under the concrete and steel.
The United States has announced that Secretary of State John Kerry will travel to Geneva in the coming hours to join negotiations over Iran's nuclear program. Russian foreign minister Sergey Lavrov arrived at the talks a short time ago.
Police say they have a lot to untangle in the case of three women who allegedly spent 30 years in captivity in a house in South London. They say what they've discovered so far is a complicated and disturbing picture of emotional control over many years. The two suspects in the case are out on bail.
Tributes have been paid to the late United States president John F. Kennedy on the 50th anniversary of his assassination in Dallas. The city held a ceremony, and Dealey Plaza fell silent to mark the moment when he was shot.
US Energy Secretary Ernest Moniz says there's a growing demand for US natural gas around the world. A recent surge in oil and gas production has put the US on course to become the world's top energy producer in the coming years.
The International Energy Agency says the United States will overtake Saudi Arabia before 2020 and will be energy independent ten years later. The energy secretary spoke to Nina Dos Santos.
ERNEST MONIZ, U.S. ENERGY SECRETARY: We are certainly experiencing a tremendous increase in natural gas and oil production. Last year we increased our oil production by approximately a million barrels a day. In fact, last month, we had a bit of a milestone in which I think it was the first month since 1995 in which we produced more oil domestically than we imported.
NINA DOS SANTOS, CNN ANCHOR: It is still illegal to export oil from the United States and obviously you will be in a situation where you'll have plenty of it and you could well export it. Is that ever going to be in the cards?
MONIZ: There's much discussion going on right now among the oil companies about the needs to rebalance oil because of the quality of the oil. The dual oil that we are producing from shale tends to be a very light oil and there are questions of optimizing refinery usage in our country and other places.
DOS SANTOS: Who exactly do you think will be taking you up on the offer of buying your oil (inaudible?)
MONIZ: The issue of licenses are required to export oil or gas. In fact, the Department of Energy is responsible on the natural gas side. We are already exporting by pipeline natural gas to Mexico in particular, and historically, there has been (inaudible) exports from Alaska to the Far East. Now of course with shale gas, there's a much greater interest including among non-free trade agreement countries for who we issue the license. The interest is very, very intense. I was just in Spain recently for example. They are looking forward to imports coming from the United States within two years. Japan has been extremely interested and we have approved licenses that will have commercial agreements with the Japanese as well.
DOS SANTOS: The oil crisis being well above $100 a barrel for quite some time now, that is an enormous amount of strain for an economy like yours (ph).
MONIZ: Oil is a global commodity at a global price, and if the price is too high, it's a strain on the global economy, not just that of the United States. We are also concerned about the energy security of our friends and allies, so we intend to remain very, very strongly engaged. Fortunately, I think the markets have remained at least reasonably well supplied because of the large increase in the United States and actually Saudi Arabia has also increased its output. But for the longer term, I think we'd like to see these resources -- Libya, Iraq -- increasing its production for example as key sources to get good functioning, reasonably- priced oil markets.
LAKE: As gas prices keep climbing and emission standards get tougher, car manufacturers are making every effort to become greener. That even includes the gas-guzzling Ferrari. Ben Wyatt caught up with Ferrari's chairman.
BEN WYATT, DIGITAL SPORTS EDITOR FOR CNN: Well, if you're going to speak to the head of Ferrari, how else do you get to the interview? By driving change, Luca Di Montezemolo led his company to record net profits of $130 million in 2012, a drive that's seen a first for the company in 2013, an electric-powered super car. Some people would say an electric motor in a Ferrari -- this is the beginning of the end.
LUCA DI MONTEZEMOLO, CHAIRMAN, FERRARI: Don't say this to me -
WYATT: What would you say to that?
DI MONTEZEMOLO: Yes, I say that first of all this is something totally unique in the sense that it is a Ferrari patent and very close with a Formula One system. When you would drive this car, there is nothing to do with electricity with all due respect. And the electric car is really a racing car.
WYATT: A hybrid car may reduce CO2 emissions but it's also helped to increase profits up 25 percent in the first three quarters of this year. The blueprint for success in economic downturn seems simple.
DI MONTEZEMOLO: We want to sell less.
DI MONTEZEMOLO: We want -- we have decided to decrease production but this is important because we see the results maybe not now but in two, three years -- use the value of the Ferrari on the used car market, the value of the Ferrari in the different auctions all over the world. Our latest car has been sold for 32 million Euro, but I talk to many people, I want to sell less but to have more revenues. That is easy to say, difficult to do.
WYATT: But this one body voted you recently the most well-known brand in the world, above the likes of Coca Cola and Microsoft. What's your secret?
DI MONTEZEMOLO: The secret is to work day and night to contain exclusivity, to protect the brand, to tell all our people that we are not selling a car but a dream (ph).
WYATT: Another challenge for Ferrari is the filtering domestic market. Italy now accounts for only 3 percent of sales. So what is the best road to recovery for a nation with 40 percent youth unemployment?
DI MONTEZEMOLO: When I see such a masochistic fiscal measures, the revenue from the tax are far less because if I sell far less cars, of course, the state get back far less in term of revenues. Unfortunately, we have to change our approach -- less taxes, more productivity, less cost, more capability to invest for the future.
LAKE: Still ahead, it's the gateway to the World's Cup in Brazil. Rio's International Airport gets billions of dollars in new private investment ahead of the tournament next year.
LAKE: The president and CEO of Choice Hotels says his firm sees expansion opportunities in Europe. The company behind brands like Comfort, Quality and Clarion Inns says there's plenty of potential in the budget market. Jim Boulden asked the chief executive Steve Joyce why Choice isn't vying for luxury travelers.
STEVE JOYCE, PRESIDENT AND CEO, CHOICE HOTELS: We are more of a mass moderator hotel company. We have portfolio brands that run from budget to upscale. Luxury is hot in certain parts of the world, particularly in Asia, but we're -- we -- focus on where the general traveling public is going And if you look at the growth of the international tourism market, the billion plus people that are traveling this year, most of them are looking for moderate tier product. That's what we represent -- internationally it's Comfort, Quality and Clarion, but we have eleven brands in total and we're very excited about some of the new ones being introduced We just opened a new hotel in Dublin, we've got a new Ascend collection in Sydney as well, and so we're looking to go where our customers want to travel.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: What are you telling people about your level of hotels when it comes to business travelers, because they may be afraid that they're tourist hotels or that it's going be -- it isn't going to be up to their standard. You're obviously trying to find a balance there.
JOYCE: Yes, and actually we do a -- we do a significant about of business traveler traffic during the week. A number of them know our brands, and what we focus on in each segment is value. So, in most of our hotels, you're going to receive free Wi-Fi, a free breakfast and in many cases free parking. You know, that is a huge value to the business traveler who is under expense reporting restrictions at this point like no other time that I remember in the business. And so everybody's looking for value and we provide that in each segment -- that's what we're known for. And I think people are attracted by that.
BOULDEN: I always think hotels are like build buildings, the more you expand, it always shows that we're coming to the end of the boom time, and hotels tend to open during the bad times. Did you use the bad economic times to expand more and now you're opening just as we see economies growing again?
JOYCE: Yes, well we got on the new-build side, it's still slow but on the conversion side, it has come back strong. That's why we love Europe so much. We believe Choice has enormous opportunity in Europe. Europe has lots of small, independent hotels that want to be branded and they're largely unbranded at this point. And so we're looking forward to a very prosperous growth opportunity in Europe where a lot of the hotel companies as you mentioned are focused on the luxury properties in Asia, we think Europe is an enormous opportunity for us because it's primarily a conversion market, and there's smaller, independent hotels that other hotel companies have difficulty working with and that's what we specialize in.
LAKE: The weekend is right around the corner -- let's get a check on the weather forecast. Jenny Harrison is at the CNN International Weather Center. Jenny, what do you have for us?
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Hey, Maggie, in a bit of a mixed picture still in Europe. It's not as bad as it was in terms of the rain and also in terms of the snow. But don't worry, if you're thinking about skiing because I have something up my sleeve for you in just a moment. But look at this --- still we have this one very, very stubborn area of low pressure, and of course it's still sitting in the same place, so it's still producing the rain across the Central Med, and still that very cold air in place to the north and the west, so we are still seeing quite a bit of snow as well although accumulations have come down a little bit in the last few hours.
Here are some totals just for Friday -- so 13 centimeters again to Passo Rolle in Italy and also 25 centimeters to this other location. Italy really has been picking up some good snowfall in the last few days. And you can see in the next couple of days what we're going to see. So mostly the snow will ride on these high elevations, particularly across the Italian Alps and really as you can see, back across into France -- (inaudible) snow, but just a light scattering -- nothing like we saw in the last couple of days. But that is still good. It still means certainly with the cold air that is in place that we will certainly see that snow sticking on the ground.
But look, it is that time of year. Finally we've got it for you -- unveiling it right now. The ski forecast, so let's first of all look at Andermatt in Switzerland. You can see some pretty good snow depth -- 35 centimeters already. Now it's just open for the weekend at the moment. Many of the resorts in Europe just aren't -- not open, but certainly this weekend, Andermatt is one of the few that is. More so in the forecast on Saturday, maybe a few flurries on Sunday. So, been expecting another sort of four centimeters certainly in the next sort of 24 hours. Temperatures are certainly on the low side, so it will certainly stay on the ground. Then if we head across the U.S., well, again, many of the resorts here have actually opened already, opened certainly throughout the week as well. Saturday is a good day, Sunday as well. May be some sunshine in Aspen in the U.S. on Sunday, and a snow depth already of up to 64 centimeters with more snow obviously in the forecast. Let me just show you this because this is actually right now in Aspen one of the latest images I can show you. Where is it? Let me find it. Here it is. This is the Google. This shows you exactly what it has been looking like over the last few hours. This comes to us courtesy of Aspen Snow Map. All the different ski resorts sort of pool their resources to bring us this latest image. Now if we go across back to my weather graphics, I have an awful feeling that I've actually done something, pressed the wrong button actually, Maggie, and I can't get back to my graphics, but what I can tell you is the forecast is pretty good across in Europe. There's another warning in place for the Central Med, some more rather heavy rain coming through with that area of low pressure, and certainly I say more snow in the forecast. Temperatures are staying on the low side, but not too bad. Just a few degrees below average, so heading into the weekend, temperatures fairly sort of moderate across much of Europe. And the main thing, Maggie, to tell you -- no main travel delays at any of the airports. And actually conditions on the roads also showing some improvements heading into the weekend.
LAKE: Well that is excellent news, Jenny. We are bracing for a bit of an arctic blast ourselves here, so the ski report, just in time. Jenny Harrison for us at the International Weather Center. Well Brazil has auctioned off two major airports ahead of the World Football Cup next year and the Olympics in 2016. The highlight of today's sale -- Rio de Janeiro's International Airport. Shasta Darlington reports the size of the winning bid took everyone by surprise.
Male: (SPEAKING IN SPANISH).
HASTA DARLINGTON, INTERNATIONAL CORRESPONDENT FOR CNN: If it was a test of investor appetite, Brazil passed with flying colors.
Male: (SPEAKING IN SPANISH).
DARLINGTON: The right to run Rio de Janeiro's airport -- the second busiest in the country -- was sold for 19 billion reals. That's $8.3 billion and four times the minimum bidding price. The airport is expected to be a major hub for visitors who'll flood the country for the World Cup next year and the 2016 Olympics. The winning consortium included Brazilian construction firm Odebrecht and Singapore Airport operator Changi.
PAULO CESENA, PRESIDENT ODEBRECHT TRANSPORTES (SPEAKING IN SPANISH AND TRANSLATED BY DARLINGTON): "The main destination for visitors to Brazil," he says, "so it's going to attract millions and millions of passengers over the next 25 years, the period of our concession."
DARLINGTON: The auction, part of President Dilma Rousseff's plan to lure billions of dollars in investments to improve Brazil infrastructure. Some attempts to sell private concessions have flopped. But Friday's auction was hailed as a success.
WELLINGTON MOREIRA FRANCO, BRAZILIAN CIVIL AVIATION MINISTER (SPEAKING IN SPANISH AND TRANSLATED BY DARLINGTON): "It was a great show of support for the future of Brazil," he says.
DARLINGTON: The government also sold a 30-year concession to operate the airport in Belo Horizonte, one of the 12 cities hosting World Cup games next year. After a prolonged bidding war, a group led by Brazil's (CCR), and including the operators of the Zurich and Munich Airports won with an offer of about $790 million. Road, port and railway bottlenecks are seen as major obstacles to economic growth in Brazil which has underperformed for the past three years. In the case of Rio, air traffic is expected to more than triple to 60 million passengers during that same period. Now it's time to knuckle down and get these airports ready. There are less than eight months before the World Cup kicks off in June. Shasta Darlington, CNN, Sao Paulo.
LAKE: Now let's go from air to rails. It's all change for London's underground network otherwise known as the Tube. Transport bosses say they plan to keep some lines open for 24 hours at the weekends at long last. They're also making some radical moves to raise money and cut costs. Allow us to explain then as always, please mind the gas. Now boarding the "Income Line" for all stations to savings and revenue. First up -- ticket offices. All of them are set to close meaning 750 jobs will be lost. Secondly, shopping -- the supermarket Asda is launching a click and collect service at six stations and there are reports that Amazon is in talks to use those former ticket offices for lockers. Love to find at what that means. Next stop, sponsorship. This is already a reality in Madrid. The Spanish capital has the Vodafone Sol Station as well as a whole line sponsored by the mobile phone company. Some local politicians have suggested the same for London. The so-called Boris Bikes are already sponsored by Barclays. Now if you change here for the Outgoing's Line, this is what the Tube bosses would spend the money on. First up, all night Tubes at the weekend. A lot of Londoners have been looking forward to this one. Five lines will be running 24 hour services by 2015. They're also looking to go beyond the Oyster car prepayment system. Instead they'll move toward contact list payments taking the fares direct from your account by 2015. And also Wi-Fi at every station by 2015. Station staff will be using iPads to help you get around the big (inaudible). Some pretty big changes. It has been 50 years since sci-fi sensation Dr. Who hit the airwave. We'll take a look at what keeps the story going five decades later when we come back.
LAKE: Tomorrow marks 50 years since the debut of Dr. Who, and Google is wishing the iconic sci-fi show a very happy anniversary. Google has transformed the doodle on its home page in many countries into an interactive game featuring all 11 doctors from the series. The game will go live on its U.S. site tomorrow. CNN's Isa Soares takes a closer look at how Dr. Who became a worldwide sensation.
ISA SOARES, REPORTER AT CNN INTERNATIONAL: Here you'll find all creatures great and small -- the monsters, the robots and the man who fights them all. Since 1963 Dr. Who has gripped Britain and the world in his mission to ward off evil. Fifty years later, it seems there's no stopping him or the series.
MATT SMITH, DOCTOR WHO: It's just a cool show about a mental guy who travels the world and picks up hot chicks and you know fights aliens. What's not to like?
SOARES: What a tough gig, hey?
SMITH: What a tough gig. Hey listen, it's tougher than it looks, let me tell you.
SOARES: Yes, right.
SOARES: He is a hard worker on show for the 20,000 fans who have come together here in a show of force to meet the cast and writers ahead of this weekend's global simulcast in more than 90 countries.
Male: It's a pretty big deal, yes. I've followed it all my life and I used to have a TARDIS in the house and used to not have my dinner unless I was sitting in (inaudible), so yes, big deal.
SOARES: A TARDIS by the way is the doctor's time machine. No idea how he got his hands on that. What's so special about it?
Females: It really is, yes, it's sort of like it's basically science, pretty (inaudible).
SOARES: The art and science line how the doctor uses gadgets and gizmos even if in real life they're pretty basic.
Male: You can also use things like air fresheners, and in the case of this demonstration model, we actually used contact lens covers. Again, once they're in, sprayed and dirtied, (inaudible).
SOARES: But you need more than just gadgets to keep the show at the top -- the plot needs to evolve.
Male: Oh, you've redecorated.
STEVEN MOFFAT, WRITER, DR. WHO: It's the story that adapt itself to every new era. It is brand new because it'll be a new doctor and a new attitude and a new filter and a new generation of kids saying 'I don't care about those old doctors, I care about my doctor.' So, you know, it's just -- it's just that -- it will just carry on. It's un-killable.
SOARES: The ultimate test of its success will come down to its many fans and whether they're still be hooked in 50 years. One way to find out -- we could travel in time. Well, I would but this one isn't working. Isa Soares, CNN London.
LAKE: Let's take a final look at U.S. stock markets, and it's a pretty nice-looking picture I can tell you. Another fresh record for the Dow Jones Industrials. S&P 500 meanwhile the broader measure, also finishing above the 800 point for the first time since January. If you want to get an idea of the scope of this rally, the Dow has climbed by 22 percent, the S&P 500 is up by 26 percent. Good news if you're invested in stocks. Now if you thought it was too early to get ready for the holidays, advertisers have other ideas. The festive viral videos are already out there. We'll show you the best one next.
LAKE: Hanukah is on the horizon and Christmas is not far behind. This year's crop of festive adverts is already out and the best ones are going viral. The NBA Basketball League is hoping this jingly number will get you to buy its special edition Christmas day uniform. K-Mart's jingle bells advertisement -- is a little racier. And you can see why they're actually in social campaign calling for it to be banned. It seems though more people like it than not. The thumbs up on its YouTube page outnumber the thumbs down by 18 to 1.
This advert meanwhile is helping U.K. department store John Lewis bring in record sales. This hibernating bear has never seen Christmas. His best friend, a hare, gets him an alarm clock so he can wake up from hibernation and join in the fun.
And here's an ad from Goldie Blocks, the toy company that wants to inspire the next generation of female engineers. Bored with princesses, three little girls sing a reworked Beastie Boys song and create a contraption that sets off an amazing chain reaction. And I can tell you, as the mother of a little girl, that one gets my vote tonight. And that's Mean -- "Quest Means Business," I'm Maggie Lake in New York. Thanks for joining us.