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Quest Means Business
Pope Slams Market "Tyranny"; Small Market Movement Still a Record; Travel Trouble for US Thanksgiving Holiday; Oslo Airport`s Snow Plan; Toy Time; Scottish Independence Referendum
Aired November 26, 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, CNN HOST: Well, this is a turn-up for the books. We`re going to have to wait until the final numbers in a moment or two to see if the Dow`s at a record, but the NASDAQ most certainly is at a record, over 4,000 for the first time, on Tuesday, November the 26th.
Tonight, Catholicism on capitalism. The pope attacks the idolatry of money.
In the program, snow, sleet, and rain disrupts travel plans across the United States.
And call it a pounding over the pound: Scotland`s independence campaign promises to keep the currency.
I`m Richard Quest. I mean business.
Good evening. Pope Francis, in a very wide-ranging and brutal attack, has attacked unrestrained capitalism. He calls it "a new tyranny." It`s an 84- page document, it`s a papal pep talk otherwise known as an Exhortation. In it, His Holiness urges global leaders to fight poverty and growing inequality an calls for a renewal of the Catholic Church.
Now, on the question of economics, the pope says, "Just as the commandment `Thou shalt not kill` sets a clear limit in order to safeguard the values of human life, today we also have to say `Thou shalt not` to an economy of exclusion and inequality. Such an economy kills."
His Holiness goes on, "How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?" As if to make exactly the point that the pope was saying, well, just think about how we started our program this evening, talking about whether the Dow -- what is the Dow doing? Let`s have a look at the Dow Jones.
The Dow -- we`re getting excited -- is up just a matter of less than a point. So it is a record for the Dow Jones, but obviously, it makes the point of what the pope was talking about, we get obsessed by these sort of numbers and the wider issues.
Senior figures in the Vatican gave their own summing up of the pope`s words in a press conference. You can hear the distaste for rampant free market economics in this presentation by one archbishop.
(BEGIN VIDEO CLIP)
RINO FISICHELLA, ROMAN CATHOLIC ARCHBISHOP (through translator): In short, we find ourselves in the presence of a globalization of indifference and a sneering contempt towards ethics, accompanied by a caustic attempt to marginalize every critical warning over the supremacy of the market which, with its "trickle-down" creates the illusion of helping the poor.
If the church today appears still highly credible in many countries of the world, even where it is a minority, it is because of her works of charity and solidarity.
(END VIDEO CLIP)
QUEST: Now, these are the three pages where he talks about economics. He obviously refers to -- he obviously criticized "trickle-down" economics. He talks about "idolatry of a new ruthless kind of the worship of money." And, of course, he defends -- he criticizes the absolute autonomy of the marketplace and financial speculation.
Since he assumed office in March, Pope Francis has shunned many papal privileges. At his unveiling ceremony, he refused the special red fur- trimmed half cloak. He wanted white clothes. He`s done away with the papal limousine and opts for modest transportation, along with the bus with the cardinals shortly after he became pontiff.
He doesn`t live in the official Apostolic residencies in the Vatican. He`s in a more modest suite where he can mix with people. And he`ll soon be reforming Vatican bureaucracy with a clean-up of the Vatican Bank.
So, why has the pope decided now is the time -- and such a wide-ranging attack -- on global economics? I spoke to CNN`s senior Vatican analyst, John Allen, and asked if he was surprised by the tone.
(BEGIN VIDEOTAPE)
JOHN ALLEN, CNN SENIOR VATICAN ANALYST: Well, Richard, this is a pope who, among other things, has distinguished himself for his candor. And so therefore, I don`t think it is any particular surprise that he`s not pulling any punches on the economic component of this letter, either.
One thing you didn`t quote, although you might have, is some of his strongest language comes in denouncing what he refers to as the "crude and naive faith in the free market" --
QUEST: Right.
ALLEN: -- and the "tyranny" -- that`s his word -- the tyranny of an economic system that he believes creates what he calls a "throwaway culture." That is a culture in which too many people -- the poor, migrants and refugees, women and so on -- are sort of pushed on the margins and left out of the circle of opportunity being created by a globalized world.
Look. I think the real novelty of this letter, in some ways, isn`t so much that the pope is saying we need to do justice for the poor. Popes have said that from time immemorial. But let`s not forget, fundamentally, this letter is about evangelization That is, creating a more missionary church, a church that has the capacity to attract people back to the faith.
I think the novelty here is that Francis is saying one of the most attractive things that Catholicism can do, the thing that is really going to take -- get people to take a new look at the church -- is by being seen as a change agent on behalf of the poor. That is new --
QUEST: OK.
ALLEN: -- and I think it represents an important piece of the Francis revolution.
QUEST: But he has his work cut out for him, because although in the part that you quote, he may be -- criticizing trickle-down economics, and he actually uses the phrase "trickle-down theories," he`s also criticizing consumption, consumerism.
And there, as he tries to get that message across to the faithful that are rushing out to by the iPhones, whatever, or the latest PS4, he may find himself on a bit of a sticky wicket.
ALLEN: Oh, 100 percent right, Richard. I remember back in 2007, when Benedict XVI visited Brazil, and he gave a very hard-hitting speech against what he called "savage capitalism," or in 2009, when he put out his social and encyclical "Caritas in Veritate," people rushed to applaud the portions of the document about taking care of the poor and so on.
When Benedict, however, talked about lifestyle changes, that is affluent people in the West consuming less energy, buying fewer gadgets, being willing to make do with more modest means in order to share their resources with the rest of the world, people sort of passed over that --
QUEST: Right.
ALLEN: -- in a kind of benign silence. And I suspect there may be some of the same reaction with Pope Francis. I think the difference, however, Benedict was a little bit easier to ignore because was the sort of cerebral erudite figure that ordinary people often couldn`t relate to easily.
Francis, on the other hand, is a man of the people who has absolutely captured the imagination of the world. And I think it is going to be harder for apologists for strict neo-liberal economics, both inside and outside the church, to simply ignore the inconvenient aspects of what he has to say.
(END VIDEOTAPE)
QUEST: Now, Father Edward Beck joins us from Martha`s Vineyard in Massachusetts via Skype. Father Beck, it is a very interesting -- and it`s not new per se and it`s certainly following traditional religiosity doctrine, but what can come of a pope saying and talking about a disposable culture and railing against trickle-down economics?
EDWARD BECK, CNN CONTRIBUTOR: Well, Richard, I think it means that we have to reexamine our values and what we`ve become so used to. If you look at the gospel of Jesus -- and this pope is intent on looking at the gospel of Jesus -- it`s really not a capitalist gospel. It says that if someone has two coats and someone else doesn`t have any, you have to give that person one of your coats --
QUEST: All right, but I take onboard that. But he`s going -- that`s classic, if you like, do unto others and help others and be good to your neighbor.
BECK: Sure.
QUEST: But he`s talking about -- "the imbalance is the result of ideologies which defend the absolute autonomy of the marketplace, that want to reject any form of --" I mean, he`s going much deeper than that.
BECK: Well, but you have to start with people realizing that it is their responsibility. It`s not going to happen systematically in a capitalist world unless people really believe that there`s a value to it. So yes, he`s saying that the structures have to reexamine --
QUEST: OK.
BECK: -- what they are built on, their very foundation. We assume that these structures are ethical and OK. He`s saying, well, maybe not.
QUEST: All right. OK --
BECK: Maybe you have to reexamine them.
QUEST: The good news is he said it. The bad news is, as a parish priest and a man in the community, you, sir, have to make it happen.
BECK: Well, I have to certainly preach that gospel to people who are sitting there in the pews every Sunday who don`t necessarily want to hear it. Remember, I`m preaching to people who work on Wall Street, I`m preaching to people who have second homes here on Martha`s Vineyard, where I happen to be visiting for Thanksgiving, and they necessarily are not comfortable with that aspect of the gospel.
QUEST: So, how do you do that?
BECK: So we write --
QUEST: How do you do that so that you`re true to the pope`s message, but at the same time, you don`t end up talking to yourself in a waste of time?
BECK: Well, I don`t think it`s a waste of time to constantly present the challenge. I think people move slowly, incrementally. So, at least if we examine what the pope is saying, at least if we say maybe there`s something in my life that I can give more than I give right now. Maybe I can give some of my resources that I haven`t been giving.
You start small, and then the consciousness is developed as a result of those small actions. I think you preach the gospel. The gospel itself is what saves. We don`t have to recreate it. It`s already there. We just simply have to live it now.
QUEST: Father, thank you for joining us. It`s a fascinating subject. And certainly, on a business program like this, we always give priority to these sort of subjects, so thank you, sir, for putting it into context.
I can see the irony of what I`m about to do. We are going to go from the pope`s message of money serving not ruling and we`re going to talk about the market. And this exactly makes the whole point that maybe the pope was talking about.
The market is up just less than one point. One of the smallest movements you will ever see. In fact, in percentage terms, it doesn`t even register. But -- but -- but -- it is a record nonetheless, and for that point of view, it is noticeable. Another all-time high.
As for the NASDAQ, I said it was at a record. What I meant to say was, of course, the NASDAQ, it`s the first time in 13 years pretty much dot-com boom and bust and all the other things, that the NASDAQ has been over 4,000. So, that`s how far back we have to go to when we sort of see that.
And I`m just going to very quickly show you, the NASDAQ, over the course of the year, and you get an idea of how it has traded from this low point. This time this last year, down at 2923. Now, a gain of 35 percent and we`re up over 4,000. Interesting stuff in the markets.
Now, when we come back after the break, there is severe weather forecast for large parts of the northeastern United States. And of course, it couldn`t come at a worse time. It is Thanksgiving holiday in the US. We`ll have the details after the break.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: Now, there`s a very powerful winter storm in the United States. It started out in the west of California. It`s now churning through the eastern third of the US, moving up south into the mid states and then up towards the northeast.
The storm threatens to ruin travel plans ahead of a crucial Thanksgiving holiday on Thursday. Major airports, including the world`s busiest in Atlanta, there are long delays. Look, this is the flight aware misery map. This shows how many -- if we take Atlanta, you can see all those in red, those are where the flights are going to be delayed coming in from LAX, from Denver, from Chicago, from DC.
If you`re wondering why, just have a look at this live cam shot from Atlanta at the moment. Yes, that tells you, really, all you need to know from the top of the CNN Center, there, things are pretty grim at the moment.
Back to the map and you`ll see up here in New York, where we are, lots of delays coming up from Miami, from Houston, out from the west, and again over here. And Chicago has delays pretty much in all directions.
Well, of course, this is as buys as it gets. Three million people in the United States are expected to take to the skies this weekend, so the airlines are doing what they can to make it a little bit easier with these delays.
All the major carriers are allowing customers affected by the storm to change tickets without paying a penalty fee. Delta is allowing a one-time fee with -- a one-time change with no fee. US Airways is dropping the change fee, as long as the airport and the fares remain the same.
JetBlue and American waived fees for customers out of Dallas-Forth Worth. And of course, United is also waiving fees for some passengers on certain routes. And these, of course, will apply not just if you`re flying from the US, but if you`re coming into the United States, then you will be -- that will also -- maybe you can take advantage of that.
The storm is moving steadily along the northeast, heading for Buffalo, New York, where CNN`s George Howell is bracing for some serious snow. George, it all looks a bit tame and mild at the moment, but I`m sure a hardy --
(LAUGHTER)
QUEST: -- a hardy being like you is ready for what may come your way.
GEROGE HOWELL, CNN CORRESPONDENT: Richard, well, a guy from the state of Texas here in the United States --
(LAUGHTER)
HOWELL: -- this is new for me, I have to admit. I am based in Chicago, so I`m getting used to the snow, but yes, it is starting to come down. What you see right now, Richard, will be a very different story here in the next 24 hours.
We`re here in Buffalo, New York. Keep in mind, they deal with snow like Dubai deals with heat. They know what to do when the snow comes down. They expect anywhere from 15 centimeters of snow here in the city, and in the outlying areas just south, more than 20 centimeters of snow. So, what they have is the snow plan, they have snow plows, they --
QUEST: Right.
HOWELL: -- are prepared to go and clear the streets. But at this point, we`re just bracing to see exactly what this system brings.
QUEST: And of course, it`s not only Thanksgiving of going to see families on Thursday, but then you`ve got the whole Black Friday, the consumer -- the shopping. This is all a very --
HOWELL: Terrible timing, isn`t it?
(LAUGHTER)
QUEST: Yes, we`ll have a word with somebody about that. George, many thanks, indeed. George is in Buffalo with that. We need to get where the storm is headed now and Jenny Harrison is at the World Weather Center. Jenny, how bad -- come on, you`ve seen bad weather over the years. How bad is this going to be?
JENNY HARRISON, CNN METEOROLOGIST: Hopefully not as bad, I think, Richard, as everybody is perhaps bracing for, shall we say that? But what there has been, of course, is a lot of low cloud. I want to start with this, because there`s a huge amount of clouds.
So, that, actually, led to quite a lot of delays first thing in the morning, certainly from Atlanta Hartsfield because, of course, the low ceiling. So, planes were grounded for a while.
But look at all this. There`s a lot going on. There`s rain, some of it heavy. We`ve got icing, which is the pink, which is very dangerous. And of course, we`ve got the snow, lots of snow, and some red boxes in the far south into Florida. And that, of course, is tornado watches are in place.
This is the area of low pressure. Now, it`s on land, so that is good, because what it means is that the really cold air turning the rain to snow is further inland than that. So you can see where the snow is going to be, and you can see where the rain is --
QUEST: Right.
HARRISON: -- and you can see all these main cities all lined up there. So for the most part, it will just be rain. The snow accumulations, though, will indeed be higher as we get further towards the far northeast, but nothing for major cities like Washington, New York, and Boston.
But there are plenty of warnings in place for snow and ice, so still we`ve got some pretty major cities that could be impacted, but again, not the ones in the east.
And then, when it comes to traveling, on Wednesday, we could of course expect to see maybe some more delays, some longer ones at that, as well. Atlanta, Boston, New York, Philadelphia, Pittsburgh, Washington, you can see the list there.
QUEST: Right.
HARRISON: So, a few more than this Tuesday. But really, Richard, it`s going to be very cold, but also very windy, so the winds clearing away from the southeast, gusting to about 70 kilometers an hour in Atlanta, and then the storm system works its way up into the far northeast.
And look at this. Then we`ve got some really high gusts. This is Wednesday early in the morning, 5:00 AM. The storm is moving pretty swiftly, but I wanted to stop at again Thursday morning. Again, some pretty high wind gusts.
And Richard, we need winds to be below -- sustained winds -- 37 kilometers an hour, otherwise they can`t fly the big balloons for the Macy`s Day Parade. So, we`ll have to see how those winds pan out, Richard.
QUEST: Never mind those Macy`s Day balloons, I`m flying to London tonight. Let`s hope --
HARRISON: Oh, well.
QUEST: -- there`s --
HARRISON: Oh, you see, you`ll be fine.
QUEST: Fine.
HARRISON: Slight delay, maybe.
QUEST: Right.
HARRISON: International flights, you know.
QUEST: All right. I brought my flight forward yesterday -- from tomorrow to today. Jenny Harrison at the World Weather Center. You want to see just what it`s like out there at the moment? Here`s a quick look at some other places around the United States.
It`s looking -- that`s in Pennsylvania, it`s looking a little bit nasty at the moment. It`s going to get a great deal worse. To Atlanta, Georgia, where, frankly, you can`t see anything from the camera, but it makes the point nicely.
As temperatures dip and winter sets in across the northern hemisphere, well, you may wonder, a bunch of wimps in the United States. When it comes to real snow, earlier this year, I saw how Oslo Airport manages to cope with challenging weather conditions and never closes.
(BEGIN VIDEOTAPE)
QUEST (voice-over): A synchronized dance on a challenging stage. Elegant choreography, military timing. In just 15 minutes, a runway cleared of snow and fit for flight. This is Oslo Airport`s state-of-the-art fleet, 27 vehicles, including 2 of the world`s largest snow blowers.
HENNING BRATEBAEK, HEAD OF AIRPORT OPERATIONS, GARDERMOEN: We have two of the TV 2000, and this one is the newest. It arrived yesterday.
QUEST (on camera): It`s huge.
BRATEBAEK: Yes. It`s weight is 40 tons.
QUEST (voice-over): Forty tons and more than a million dollars, and they`re willing to let me have ago.
QUEST (on camera): Now, where`s the start button?
You really feel this whole thing just moving the snow, and then suddenly slowing down. Extraordinary. Keeping things moving whatever the weather!
(END VIDEOTAPE)
QUEST: Now, that`s what you call --
(RINGS BELL)
QUEST: -- snow clearance. When we come back after the break, time to play with some toys. Come on, hand them over! We will have the best toys of the year -- after the break. Come on!
(COMMERCIAL BREAK)
QUEST: All right. The pope may have been talking all about consumerism and too much consumerism, so we`re going to jump right into it at the other end. I just a few days` time, the holiday shopping season kicks into high gear, not only in the United States, but around the world.
And this weekend, one of the most important retailers here with Black Friday, the day after Thanksgiving. It`s traditionally when shops offer very large discounts. Toys "R" Us is letting customers pick up their wish list items early, starting online deals on Thursday, that`s Thanksgiving morning, and they`ll open stores at 5:00 in the evening on that same day.
Joining me now with some of their hottest -- and these are the hottest, we`ll go down the list in a moment -- joining me with some of their hottest holiday picks is Toys "R" Us chief merchandising officer. He`s Richard Barry, good to see you.
RICHARD BARRY, CHIEF MERCHANDISING OFFICER, TOYS "R" US: Hey, how are you, good to see you.
QUEST (singing): "I want to be a Toys `R` Us kid." I`m old enough to remember that. All right, so, we`ve got the -- in order, which ones do we need to look at?
BARRY: So, let`s start with the ugly.
QUEST: The uglies.
BARRY: We love this product, it`s exclusive --
(TOY WHISTLES)
BARRY: -- to Toys "R" Us. And what`s great about this guy is it really works on a fantastic trend, which is the fact that ugly and ooze is great. So watch this.
(TOY MAKES GROANING SOUND)
BARRY: Would you like?
QUEST: All right. So, while I`m doing that, next is big -- so, I put my hand in here, and what do I do? Just do?
BARRY: Just give it a squeeze.
(TOY BELCHES)
BARRY: Oh. He belches. He farts.
QUEST: Those cheese and pickles, I knew I --
BARRY: Yes.
(TOY GROANS)
QUEST: All right, next. Elmo.
BARRY: So, you look like you need a hug. So this year, for the first time - - Elmo is a perennial favorite -- but this year, Elmo really wants to give kids a real hug, so --
ELMO TOY: Elmo`s so happy to see you! Ah!
QUEST: I have a nasty feeling that we are creating a YouTube moment here.
ELMO TOY: Please hug Elmo tighter.
QUEST: Thank you. Now, what makes a good toy?
(ELMO TOY TALKING)
QUEST: Because at one end, you`ve got these extremely complicated toys, very clever. But on the other hand, you`ve got this, which I think is the Cra-Z-Loom.
BARRY: This is the Cra-Z-Loom, and this is a huge craze. It`s really been rocking since the summer, and every kid in America is taking the Cra-Z-Loom and building bracelets, so here`s --
QUEST: It`s just building a bracelet.
BARRY: So here -- it`s a rubber --
(ELMO TOY TALKS)
QUEST: Quiet, Elmo! Quiet!
BARRY: It`s a rubber band bracelet. But look, let`s get one on you. Let`s see how this looks, it`s going to be a great one for you. So --
QUEST: I mean --
BARRY: This is an awesome item. Kids are really enjoying this, it`s getting bandit scores --
QUEST: Oh, come on! It`s a -- it`s a bracelet!
BARRY: It`s great.
(ELMO TOY TALKING)
BARRY: Kids are really enjoying this. You can create, you can add embellishments --
QUEST: Right.
BARRY: -- and beads and so on. It`s a real hit. And we`ll have a great version of this coming up in our Black Friday deal, with over 3,000 rubber bands to make thousands of bracelets.
QUEST: So, when --
(ELMO TOY TALKS)
QUEST: Have a --
BARRY: You just squeeze -- squeeze his tum.
QUEST: So, when we put all this together --
(ELMO TOY TALKS)
QUEST: -- I think I`m in real trouble here. When we put all this together, what does it tell us?
(TOY FARTS)
QUEST: Thank you very much. What does it tell us about the consumerism at Christmas.
(TOY BELCHES, ELMO TOY TALKS)
QUEST: What the pope was talking about.
BARRY: It tells us that we want to make Christmas special for kids. We want to bring their wishes true at Christmas, and we want to bring great, innovative products like these, where they`re going to put smiles on kids` faces this Christmas.
QUEST: And what doesn`t work as a present? Over the years, what have you discovered does not work?
(ELMO TOY TALKS)
QUEST: I think Elmo`s dead.
BARRY: Well, there`s been some tough ones over the years.
QUEST: Well, what I`m trying to say, what`s the quintessential difference between a toy that works and one that doesn`t?
(ELMO TOY SINGING)
BARRY: Well, the things that work are great character favorites like this, things that drive great crazes like this, or even right now, you`ve got things where you have technology, so this is the Tabeo E2 tablet --
QUEST: Right.
BARRY: -- which is exclusive to Toys "R" Us, and this has got 30 apps. So, whether you want gore, whether you want hugs, or whether you want to make bracelets --
(TOY GROANS, ELMO TOY TALKS)
BARRY: -- you`ve got it all.
QUEST: Thank you very much.
BARRY: Great to see you. Cheers.
QUEST: When we come back after the break --
(TOY FARTS)
QUEST: -- Scotland is laying out its case for leaving the UK and keeping the pound and the queen. Yes, the queen and the pound!
(TOY FARTS)
(ELMO TOY TALKS)
(COMMERCIAL BREAK)
QUEST: Hello, I`m Richard Quest. There`s more QUEST MEANS BUSINESS in just a moment. This is CNN, and on this network, the news always comes first.
Pope Francis has called for sweeping reform in the Catholic Church in a document called Apostolic Exhortation. The pontiff asks followers to reexamine long-held traditions and rules that he deems outdated and also refers to unrestrained capitalism. He calls it "a new tyranny."
The US Coast Guard says American and Bahamian crews are still looking for survivors after a migrant boat capsized 30 kilometers southwest of the Bahamas. At least 10 Haitian migrants died when the overcrowded freighter tipped over. About 100 people have been rescued.
Syrian state media reports say 15 people are dead and more than 30 wounded after a suicide bombing at a bus station in suburban Damascus. The attack took place in a neighborhood that houses families of the military`s elite 4th Division, which is commanded by the brother of President Bashar al- Assad.
A US official has confirmed that two American military planes flew unannounced into China`s newly-claimed air defense zone on Monday. Beijing announced this new zone last week, claiming airspace over disputed islands both China and Japan claim as their own. Washington says it won`t recognize China`s new restrictions.
The Thai prime minister is facing a no confidence motion in parliament after weeks of protests against her government. Demonstrators demanding her resignation were initially upset over an amnesty bill that could have benefited her brother. Their anger has since grown into a wider protest against those in power.
Scotland says it can become one of the most powerful economies in the developed world if it`s granted independence. Scots will get a straight yes or no vote on staying in the United Kingdom in a referendum that`s to be held in September of 2014.
The ruling Nationalists, which is led by the first minister, Alex Salmond, in a devolved parliament, they`ve released their draft plan -- it`s called a White Paper for Independence. Mr. Salmond says Scotland would start from a position of underlying economic strength.
The Nationalists are reluctant to give up certain things, for instance, the British pound, and not to go with the euro. The Bank of England will continue to be their central bank, the Queen would remain had of state and the blueprint states that Scotland would remain part of the European Union. The Bank of England governor Mark Carney was pressed on this subject today before a Treasury Committee hearing. He said Scotland would likely have to share economic sovereignty if it wanted to keep the pound.
(BEGIN VIDEO CLIP)
MARK CARNEY, BANK OF ENGLAND GOVERNOR: It is difficult in the formative time to have a currency union, and I speak from the Canadian experience, without some element of fiscal federalism, and my personal view for the Eurozone - and I`ll speak only to the Eurozone - is that there will be a requirement of some form of fiscal federalism. I`ll use that term - their politer term.
(END VIDEO CLIP)
QUEST: Earlier I spoke to Humza Yousaf, minister for external affairs in the Scottish Parliament, a member of the Scottish National Party, and asked him why when they had a choice - why stay with sterling and the pound and not go with the Eurozone and the Euro.
(BEGIN VIDEO CLIP)
HUMZA YOUSAF, SCOTTISH MINISTER FOR EXTERNAL AFFAIRS: Well you know it`s a very good question. Answer then what is the most detailed blueprint of an independent nation that`s ever been produced - 670 pages, 650 questions answered. And it goes into the detail there. But if you actually go in to previous reports that have been done for example by the Independent Fiscal Commission working group, that`s a group of including Nobel Prize-winning economists, who looked at the various different options an independence Scotland could look to pursue in terms of currency. They came to the unanimous conclusion that actually the best option would be to have a sterling union - to have that currency union with the rest of the United Kingdom - that`s in the best interest of Scotland but also the rest of the United Kingdom. And they said that for a number of different reasons, one of the primary reasons of course being that there`s so much trade that goes on between both countries, so why put up barriers to that? So, it`s sensible to pursue that course, and you`re absolutely right to say that the pound is also one of Scotland`s assets just as much as for the rest of the U.K. (inaudible).
QUEST: What would be Scotland`s requirement and price for this in terms of influence or decision-making on monetary policy because you don`t want to be in the position of having somebody else`s currency and no say over monetary policy?
YOUSAF: Yes, I mean, undoubtedly it would be for the best interest, again, of not just Scotland but the best in the United Kingdom, and for there`s to be of course Scottish representation on the Monetary Policy Committee - that would make absolute common sense, logical sense - of that there is no doubt. There would be no practical barrier for why that would be the case. It would be in the U.K.`s best interest as it would be in Scotland`s best interest. At the moment what you see is a lot of political posturing which is the norm of course (inaudible) up to any campaign or referendum, but actually when common sense, once the decision is taken, and the democratic will of the people realized, I think common sense will undoubtedly prevail.
QUEST: The manifesto, the referendum, the white paper, the blueprint - whatever we wish to call it, is extremely detailed but in many ways it is setting out an agenda of sweeteners that will make it more attractive for voters to vote for the referendum on social issues - job benefit, childcare and all those sort of things. The critics will say this is the moment when the bribes - small be - the bribes start being offered up to the voters.
YOUSAF: You know if there`s one thing that this debate has been characterized by its seeing different campaigns. The "Yes Campaign" from the offset - from the moment is started -- has been a campaign of aspiration, a campaign of hope, a campaign of what Scotland can do. A great nation has been innovators and inventors of the modern world - here`s the resources that we currently have, this is what we can do with those resources, and the white paper has been an extension of that. If we have the power over childcare, if we have the revenue to raise in our own hands - this is what we can do to transform childcare. This is what we can do in various other avenues if we have the financial (levers) to do that. The "No Campaign" by contrast is one of negativity, is one of fear- mongering, scare-mongering. This is why Scotland can`t do things, this is what Scotland cannot do. Because it is too (inaudible) or too weak, it doesn`t have the resource. And that goes to the fundamental characteristic differences between our campaigns. And this blueprint is you quite rightly see is the most detailed and most researched prospect of some independent nation. That is our proposition though the challenge of course to the opposition. As if this is not - if you disagree with this, if you think it`s bribes or sweeteners or whatever, what is your (prospectus) for Scotland moving into the future? And they have been deafeningly silent.
(END VIDEO CLIP)
QUEST: The referendum takes place in September of next year. Portugal`s lawmakers approved a tough new austerity budget today much to the chagrin of the man and woman on the street. Protesters gathered outside Parliament as the vote took place. It`s the 2014 budget and it includes deeper spending cuts that will hit government workers hard. Still in the grip of recession and austerity, Greece will take over the E.U. presidency in January. At a meeting in Athens today, European Parliament president Martin Schulz urged the Greek prime minister Antonis Samaras to act fast to stabilize the recovery. Ireland appears to be faring better than its other bailout club members. Unemployment fell to below 13 percent for the first time in the crisis. Ireland is scheduled to exit the bailout program with no safety net next month. The chief economist at International Energy Fund has lashed out at Standard & Poors saying the decision to cut France`s credit rating wasn`t justified. I spoke to Philippe Gudin the chief European economist at Barclays. I asked him what he made of Olivier Blanchard`s comments.
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PHILIPPE GUDIN, CHIEF EUROPEAN ECONOMIST, BARCLAYS: I agree with Olivier when he says that the assessment on France is sometimes exaggerated. France is in a situation where I mean there`s no big (inaudible) balances, but there is a need to reduce the public deficit and to curb the public debt. The government has done a lot already, I mean the previous government and this one, have done a lot to reduce the deficit. But I think we are just in the middle and what is more important now for France is to try to renew with growth. And so that`s - we need to see some (subtle) reforms. The government has undertaken some reforms already in terms of competitiveness, in terms of labor market, but there`s still lots of things to do and I`m afraid we are in a situation with the election coming in the middle of next year where the government is sort of paralyzed and is suspending the reform momentum.
QUEST: So, we have a situation - France obviously is one of the more worrying of the larger countries at the moment in the Eurozone. But we`ve had a cut in interest rates, and the ECB seems to say it can do more. We got an LTRO coming up from the ECB. What more can they do because we`re at the zero bound and there`s really not more to be done on rates?
GUDIN: On rates, I agree they`ve done already a lot and I mean they can cut a little bit further - they can put the deposit rate in the negative territory even though I don`t think this is the solution because the impact is not well known of negative rates and the benefits will be very limited. I think what they can do is really involved in what I would call the credit easing policy with the view to expand monetary growth and with a view to -
GUEST: Right.
GUDIN: -- to improve the channels of monetary policy.
QUEST: But do you think the policy of forward guidance which of course the ECB is now - we look at the minutes last - that`s where the Fed is now messing around with as we look at the last week`s minutes. And the Bank of England`s now doing forward guidance and the ECB is doing forward guidance. Do you think we are at risk of pushing the boundaries of forward guidance frankly into areas that are way beyond we know how it`s going to respond?
GUDIN: I think the ECB`s forward guidance is very different in the sense that it`s a qualitative forward guidance. What the ECB wanted to say was that we are in a situation where growth is going to remain subdued for an extended period of time, inflation is low is going to continue to be low - not only because inflation at the global level is low but also because there are these adjustment (inaudible) countries which are pushing inflation in the negative territories. And they wanted to tell the market that they will remain in an easing mode for a long period of time. But they didn`t attach these forward guidance to some quantitative threshold like the Bank of England or the U.S. or the Feds.
(END VIDEO CLIP)
QUEST: Let`s just conclude our look at what`s happening in Europe on the European economic front. The effects of China`s slowdown are being felt on the continent too. (Inaudible) is the latest to issue a profit warning blaming lower sales in China. Now the top stock was down 8 and a half percent. Hugo Boss said China is a particular concern - will not achieve its 20 - 15 percent profit. The stock fell 2 percent. The dismal earnings outlook affected overall sentiment. The main indices settled lower - you can see they`re all down just a tad or two. There`s a new warning for global tax havens. Which countries need to be more transparent -- after the break.
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QUEST: A new report is shining a spotlight on countries that fail to meet international standards are tax transparency, and it`s calling on the most serious offenders to ramp up their reforms. Now, Luxembourg appears on the list of non-compliant countries when it comes to these tax evasion issues. Luxembourg -- the government there called the rating exceedingly excessively harsh and said it would review the report`s recommendations first. Cyprus was also deemed as being non-compliant. Switzerland was called out because it doesn`t have robust legislation sufficient to meet international standards. The OECD oversees the global forum on transparency and it set up the country reviews. Its director of tax policy Pascal Saint-Amans joined me earlier from Paris. Whenever we talk about tax evasion and tax transparency it`s a fine line between legitimate banking secrecy and the illegal aspects of it, and about leaders, frankly, and politicians who just beat up as a political ploy.
(BEGIN VIDEO CLIP)
PASCAL SAINT-AMANS, DIRECTOR, OECD CENTER FOR TAX POLICY: Well, that`s not been true, but it doesn`t mean that it`s not necessary. I think it`s absolutely necessary at a time when all the governments I mean in the U.S., in Europe in Asia - they increased taxes because we need to pay the debts back. You cannot explain the man in the streets that he will pay or she will pay the tax when some who are smarter who just have the (authority) to hide the money in the tax haven country, they will not pay anything because they are hiding. We do think that fighting tax evasion is absolutely key to restore confidence and also to get some money in and there is no legitimacy of any kind to abuse bank secrecy.
QUEST: The way in which this has been handled - and I realize I`m putting up the opposite point of view - I mean, it`s very - it has been relatively easy, relatively easy for the big countries - the European Union, the United States - to basically get their way on this issue. But they are just one state ahead of those who want to do nefarious deeds and who want to hide tax (inaudible).
SAINT-AMANS: You know I`m glad you say that because five years ago you would have said exactly the opposite. You would have said well that`s just impossible because that`s what people thought five years ago. Five years ago bank secrecy was the rule - bank secrecy for tax purposes. Everyone accepted that Switzerland had this great bank secrecy and that (inaudible) would ever see the end of that. And now it`s right the opposite.
QUEST: I`m going to put the other point to you though. It will not be long before those who wish to keep bank secrecy and who wish to hide their affairs get back in the game and start to get into the lead. Isn`t this a case where you`re invariably going to be chasing your tail?
SAINT-AMANS: No, because these countries - I mean, we can name them - the large financial centers which used to rely on bank secrecy -- Switzerland, Luxembourg, Singapore and some others - they have this idea to change. And by to deciding to change, we had decided to be the leaders in the change, meaning that we don`t want the other centers to offer bank secrecy. So you have something like a virtual circle which is driven by the pressure from the G20, and we`re getting there and now we are also getting to a step further which is automatic exchange of information. Information will be exchanged automatically. All the banking information will be exchanged automatically. This is the commitment we got from the G20. This is also the commitment that we get from all these small jurisdictions, all the off- shore centers.
(END VIDEO CLIP)
QUEST: The question are not the issue of tax evasion and banking secrecy. After the break, we talked about airports earlier and the travel delays in the United States. Well, Hartsfield-Jackson in Atlanta is a city unto itself. The busiest airport in the world in a moment.
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QUEST: Now earlier in the program we told you all about the travel delays in the United States. And nowhere at the moment are we focusing more on than Atlanta Hartsfield-Jackson. Just look at the delays - they are the worst. There are 616 delays, six cancellations and you get an idea of just how bad the situation is out west, up north, down to the south. Well, Hartsfield is the busiest airport in the world, and if you`ve done any business travel, there`s a good chance that at some point you`ve been through Atlanta Hartfield-Jackson. Each year it handles more flights and more passengers than any others. A team of CNN journalists went behind the scenes to show you what really goes on 24 hours a day at the world`s busiest airport.
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QUEST: From getting away to getting you home, airports are the gateways to our jet sea journeys. And none is busier than Hartsfield-Jackson Atlanta International - ATL to (inaudible). The airport is like a city in itself with 58,000 workers.
Female: The busiest day of the week is like Monday, Tuesday, Wednesday.
QUEST: A quarter of a million travelers pass through ATL each day. Usually we experience an airport in small, fleeting glimpses - checking in, waiting, boarding the plane. Now you can really experience what an airport has to offer. Because from midnight to midnight, 24 hours, three dozen CNN journalists show you the unseen and tell you the untold events in a day in the life of the world`s busiest airport.
Female: I`m coming from San Jose, California, I`m headed to Memphis, Tennessee.
Male: Columbia, South Carolina.
Female: New Jersey.
Female: Des Moines, Iowa.
Male: Edmonton.
Male: Canada.
Female: Iceland from Boston via London via Ireland.
QUEST: It`s a city of stories hiding in plain sight. Everyone is going somewhere.
Male: I`m coming from Washington, D.C., I`m heading to Minneapolis. I`m going to go see my brand new grandson.
QUEST: Be it personal or professional, all have a tale to tell.
Male: Each of us have a bomb suit that we carry in our car.
QUEST: From the bomb squad member, cushioned in headlock.
Male: We screen cargo that is uploaded to passenger aircraft.
QUEST: To (inaudible) dogs sniffing `round to boost security. We`ll take you inside the control tower and show you who`s keeping checks on the more than 900,000 take-offs and landings each year.
Male: A person was flagged coming inbound from Canada.
QUEST: And we`ll reveal some arresting moments at Customs and Border Protection. All of these things bring this city delight. Don`t just pass through - make it your destination on cnn.com/atl24.
(END VIDEO CLIP)
If you want to know more about the world`s busiest airport, from the police who keep the terminal safe to the staff that clear the runways, it`s at cnn.com - again, cnn.com/atl24. Jenny Harrison knows a little more about Atlanta Airport than is probably honest or decent. I suspect being in the CNN Center, you`ve been through it a few times - once or twice.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Yes, a few times - it so much (inaudible) since (inaudible) the international terminal. Now, but Richard, I just go - I guess - and I check in and I get to the lounge and I get -
QUEST: Oh, the lounge. The lounge, the lounge.
HARRISON: (Inaudible).
QUEST: The lounge. The weather, Ms. Fort -- Ms. Harrison, the weather.
HARRISON: Ms. Fortune.
QUEST: Ms. Fortune.
HARRISON: The weather - the weather in Europe - I wish had everybody`s fortune. Now, look, the weather in Europe - we`ve been talking about the snow and of course the rain, the ice, everything across the U.S., but there`s plenty of that in Europe as well. In particular across the south we`ve had this very, very stubborn area of low pressure. It is on the move but very, very slowly and we`ve had some pretty high rain totals. Now, bearing in mind it is 112 in Antalya and here in Turkey it`s on top of what we`ve seen already. There`s about 67 millimeters in the last few days so it has exceeded its monthly average and then of course the snow has been coming down as well, so Sarajevo - look at this new snow at 21 centimeters. We`ve had ten centimeters of new snow in Croatia, so the snow depth`s beginning to really you know get a good base now.
Ready for the season which is still a little way off but all this rain is continuing to work its way through the eastern end of the Med. But behind this system, same situation really as in the U.S. - we`ve got cold air then following in behind. So this front is going to usher in some much colder air, this time across central and eastern Europe, so turning a lot of that rain of course to snow which is why I can show you this - so 12 centimeters in the next 48 hours in Sofia, you can see 13 more to Sarajevo, so as I say, those snow totals, the snow depths continuing to really go up.
Now these are the actual temperatures right now across in Europe. Not too bad in London and Paris and Dublin, fairly mild. Berlin meanwhile -4, 1 in Vienna, then you factor in the winds and it feels even colder. Minus 4 and -5 in Kiev, -6 in Bucharest, so, again, a lot of that snow will stay on the ground. This is showing you the temperature trend in the next couple of days. Very, very cold though now across the north and the east. You can see the greens indicating milder, average temperatures across the west. But still plenty more rain and snow to come. That front, once it hits that really cold air mass, it will turn over to snow. Hence, those good accumulations again along the line of the Alps and more rain throughout the Mediterranean as well.
When it comes to airport delays, the snow causing maybe two hours Wednesday in Sofia. We`ve got some fairly strong winds as well into Barcelona and also windy conditions in Rome. And still the rain has to clear away from Istanbul. Not particularly heavy, but again we`ve got that low cloud. So temperatures on Wednesday just 2 Celsius in Vienna, 9 in Rome and remember feeling colder in the wind. Richard.
QUEST: And a very work pleasant 8 in London where I shall be arriving tomorrow morning. Jenny Harrison, Ms. Fortune, many thanks in deed. Now whilst in the last hour we`ve been on air and before, President Obama has been in California. He`s been touring the Dreamworks Studio and he`s been speaking about the so-called Obamacare.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Yes we are going to continue to implement the healthcare law. The product is good, people want it and we should not live in a country where people are going bankrupt just because they get sick. And anybody who`s going to keep on pushing against that, they will meet my resistance because I am willing to fix any problems that there are but I`m not going to abandon people to make sure that they`ve got health insurance in this country. That is not something we`re going to do.
(END VIDEO CLIP)
QUEST: President Obama talking about the Affordable Care Act. When we come back, a "Profitable Moment," and of course it`s on the (inaudible).
(COMMERCIAL BREAK)
QUEST: Tonight`s "Profitable Moment." Pope Francis` exhortation on economic grounds is important, not because the Pope says we ought to think of those who are less fortunate - Popes always say things like that. Rather, he takes apart many of the arguments which make up today`s economic structures and he uses the language which we can all understand - criticizing trickledown theories as crude and naive trust in markets and the idolatry of money. Now reading this, you`re left in no doubt - the Pope is not a free marketer. But he does have a strong point when he decries the market for rejecting any form of control. Think of it - subprime, derivatives, CDSs, Libor, mortgage mis-selling - all examples of the market doing everything they could to deny control. The Pope`s message could be summed up with his simple phrase - "Money must serve, not rule."
How do you do it? And that`s "Quest Means Business" for tonight. I`m Richard Quest in New York. Whatever you`re up to in the hours ahead, I hope it`s profitable. I`ll see you in London tomorrow.
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