Return to Transcripts main page
Quest Means Business
Nearly 300 Missing in South Korea Ferry Disaster; Ukraine Crisis Grows; Economic Instability; Ukrainian Effect; China Growth Slows; US Stocks Post Strong Gains; European Markets Up; IAG CEO on Search for Flight 370; Nigerian Terror Attacks; Sport's Biggest Spenders
Aired April 16, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: The market was up for -- all of the session. It was a variety of reasons we'll get to in a moment. When the closing bell is ringing, it is Wednesday, it's April the 16th.
Tonight, rattled in Russia. The country's economy minister says investors are nervous worldwide thanks to the Ukraine crisis. We'll put that into perspective.
Also, Nigeria reports major developments in its fight against militants just in time for the WEF on Africa. We'll be in the capital.
And the SmartPhone kill switch is born, and San Francisco's district attorney tells me why it's still not enough to protect data.
I'm Richard Quest. I mean business.
Good evening. All the day's business news in a moment. We begin, though, of course, where it's just after 5:00 in the morning in Seoul in South Korea, and the desperate search continues for nearly 300 people who remain missing after a passenger ferry capsized off the coast of the country.
Six people are known to have died when the ferry overturned and sank, according to our affiliate YTN in the country. Most of those onboard were students and teachers from a high school in Seoul. The group was heading for Jeju, a resort island.
As the ship rolled and began to sink, loudspeakers on the vessel played messages like this one, urging people to stay put.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE (through translator): Don't move. If you move, it is more dangerous. Don't move.
(END VIDEO CLIP)
QUEST: Paula Hancocks is our correspondent. She's in Jindo, South Korea, where parents of some of the missing children are waiting for news. Good evening to you, Paula. The -- OK, so, we have six people already confirmed dead, but 300 or so missing. Pull the strands together of what we can now expect in the hours ahead.
PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Well, Richard, we know that in the early hours of this Thursday morning -- it's now 5:00 AM local time -- they did resume the search and rescue operation. It was delayed for a few hours, according to the coast guard. They told CNN it's unclear, at this point, why it was delayed.
But we know that they do have boats out there, we know that they have divers as well. Yonhap, the news agency here, is reporting that divers did eventually manage to get into parts of the ship, three compartments, according to Yonhap. They say they found neither survivors nor bodies.
Now, we know that they have been hampered by strong currents and conditions are not ideal for trying to find any survivors at this point, but you can see here, this is the harbor in Jindo, on the southwestern tip of South Korea, and this is where some of the parents have been camped out all night.
They are basically sitting by the side of the water, looking out into the blackness ahead of them, seeing if anything is coming, seeing if any ships are coming back, and hoping against hope that there will be good news.
But of course, we do know that there are almost 300 people still missing. We know from the coast guard that these waters are very cold, between 10 and 13 degrees Centigrade, and people would really only survive in these waters for a couple of hours. Richard?
QUEST: Paula, help me understand, for not having seen a map, how far out was this ship, was this ferry?
HANCOCKS: Well, it's about 20 kilometers or so from the mainland itself, which is where we are. So, it's -- it was on its way to Jeju Island, which is a tourist hot spot here in South Korea. That's about 100 kilometers south of the mainland itself.
Now, obviously, it didn't make it to Jeju Island, but it is close enough to the mainland itself that ships could get to the area very quickly. And we saw that within the first sort of half hour or hour, we saw many not just navy ships, not official ships, but fishing vessels, private vessels, anything that was in the area, rushing to the scene.
So, those passengers who managed to get out, and those passengers who managed to jump into the icy waters were picked up, and it's really the case that now the investigators are going to look at, that PA announcement saying stay put, not saying get to the deck or jump in the water, but saying stay put. Now, of course, the question is, did that cost many lives? Richard?
QUEST: Yes, and interestingly, of course, that is the conventional wisdom, isn't it, in a -- before you know the facts, they actually don't want people running around the ship or a subway car, getting off the subway car or whatever.
So, the normal announcement is don't move, you're going to be in more harm and more damage than if you actually do. And now this seems -- it's difficult with this one, isn't it, Paula?
HANCOCKS: Well, it does seem as though this ship sank particularly quickly. It appears as though it -- from the distress signal, which happened around about 9:00 AM local time on Wednesday morning, within a couple of hours, this ship had tilted completely and you just saw that the blue bottom of the boat protruding above the water.
So, it was particularly quick. We heard from one eyewitness saying that he heard a loud bump, people fell over, and then it started to tilt. Other eyewitnesses saying it tilted first, then there was a bump. But there is being a point of impact that's being described, so of course --
QUEST: Right.
HANCOCKS: -- that's what investigators will be looking at, and that is quite possibly the reason that it sank so quickly. Richard?
QUEST: Paula, let's -- before we say thank you to you, let's just dot the Is and cross the Ts. Six people confirmed dead, up to 300 still missing, and do we know how many have been rescued?
HANCOCKS: Yes, I have that figure. At this point, we know that 164 have been rescued. But we do need to be careful about these figures, Richard, because there have been discrepancies, not only between different media organizations, but coming from different parts --
QUEST: Right.
HANCOCKS: -- of the government and the coast guard, but at this point, we have 164 rescued.
QUEST: Paula, thank you. Paula Hancocks, who's in South Korea for us tonight. And obviously, as that situation, a very sad and disturbing situation, to refresh your memory, 164 people rescued, 6 confirmed dead, but 300 people are still reported as missing. When we get more information, you can be assured we'll bring that immediately to you.
To our other top story tonight, the situation in Ukraine's becoming increasingly chaotic and it's certainly fast-moving. Pro-Russian forces appear to be tightening their grip in the east of the country. Nick Paton Walsh joins me now from Donetsk, where the government's promised crackdown is apparently losing steam. So, in a nutshell tonight, Nick, who has the upper hand?
NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Without doubt the pro-Russian protesters and militants here. Extraordinary developments for them, where they seem to have simply taken control or frozen in their tracks a lot of the Ukrainian military armor sent here to try to introduce what Kiev wants to be an all-encompassing, in their words, "anti-terror" operation here.
Two real places to keep your eye on. One is near Slaviansk, the hot spot of many pro-Russian protesters here, where they're focusing their efforts. South of that, Ukrainian armor rolled into a town, they were surrounded by local residents, we're told.
And then subsequently, it turns out, that pro-Russian militants turned up and told the Ukrainian military that they were in control of those vehicles now, then drove them into Slaviansk itself with the Russian flag waving above them.
Took the Ukrainian soldiers, we were told by the de facto mayor there, into a local cafe, fed them, and then apparently talked about terms for their surrender, parading those five or six armored vehicles in the center of Slaviansk, very open, quite relaxed to see foreign media for the first time in a while.
QUEST: Right.
WALSH: Obviously in control. And the core of these pro-Russian militants, very armed, well-disciplined men, Richard.
QUEST: Is this going to become Crimea redux?
WALSH: Well, it's looking that way to some degree, yes. We have, as we saw in Crimea, a different version of the kind of unknown armed men, still very well organized, certainly. We're seeing consistent moves against various parts of local authority here, too.
There are suggestions today that the de facto -- or, I should say, self-declared Republic of People for Donetsk that's occupying the administration building behind me here and seems to have links to these different towns and cities declaring themselves to be different or somehow distanced from authorities in Kiev.
But they look for a referendum in the weeks ahead to decide the status of here. That would be very much in keeping with the Crimean scenario. We're seeing pockets of --
QUEST: Right.
WALSH: -- local support for closer relations with Russia, although a lot of opinion surveys suggest that is not the entirety of what people think in this part of Ukraine. Richard?
QUEST: Nick Paton Walsh in Donetsk this evening. As the economic impact of what's happening continues to grow, Russia says the Ukrainian situation is affecting investments worldwide and not just in Russia.
(BEGIN VIDEO CLIP)
ALEXEY ULYUKAYEV, RUSSIAN ECONOMY MINISTER (through translator): We have a high level of uncertainty on the global financial markets. Serious capital flight. The situation when investors are not ready to make investment decisions in this tense situation on the international arena we have had for these past two months. The economic situation is not stable.
(END VIDEO CLIP)
QUEST: Just worth mentioning that whatever may be happening elsewhere in the world, that certainly didn't affect the Dow Jones Industrials.
(RINGS BELL)
QUEST: The Dow Jones Industrials closed up 1 percent, 162 points on the Dow.
International economist Bill Adams joins me now from Pittsburgh, from PNC. Good to see you, Bill. We're going to talk about China in a minute, and I know you're not sort of a Russia watcher per se, but, Bill, do you see an overspill from this situation that could derail growth in Europe or the US, or could increase volatility?
BILL ADAMS, SENIOR INTERNATIONAL ECONOMIST, PNC FINANCIAL SERVICES GROUP: I think the concern from the Russian crisis is if this starts to delay the shipments of Russian energy into Europe, into Western Europe, delay shipments of natural gas, of oil, then there could be very serious economic repercussions for the euro, the European Union, and the global economy from that.
I think we're expecting a Russian recession out of what's happened, what's already occurred to date. But the global implications of that are fairly limited, I think. And it's probably in Russia's interest to continue to have energy flow, but there is, as you said, a lot of uncertainty about what's going to happen next.
QUEST: In that perspective, the Russians don't seem too concerned, even though they're going themselves into a recession. The Germans now have the very difficult position of how far to go. And as you probably just heard Nick Paton Walsh, it looks as if Donetsk and other parts of Ukraine are facing some rather nasty behavior themselves. So, from a financial point of view, what are you concerned about?
ADAMS: Well, I think that the financial implications are pretty simple. If this turns into another Yugoslavia redux on Russia's doorstep and on Europe's doorstep, then that's very concerning for the European economy, for the global economy, as well as for its humanitarian implications.
QUEST: Right.
ADAMS: But every 6 or 12 months, something pops up, whether it be in the Middle East or in Russia, or in East Asia, there's always a crisis out there. So, I think market watchers are always very vigilant for what's going on, but there are lots of false alarms.
QUEST: Now, Bill, you kindly gave us a little bit of poetry to keep our day going. You wrote a little verse concerning China, a little limerick. It goes as follows: "There was a premier from Anhui, who took the cheap credit a-wee. Formalism is his foe, is growth starting to slow? Still, don't bet on stimulus we say."
This obviously is China, and we if we look at what's happening with China and the growth of China and we look at the situation, 7.4 percent, should we be concerned? It is over the 7 percent that the Chinese set themselves. But the data is questionable at best.
ADAMS: I think this is probably one of the less -- the data we have in hand right now is some of the less-concerning data about what's going on in emerging markets this year. 7.4 percent is decent for the Chinese economy.
It shows that the Chinese economy, if the data are to be believed, is resilient. Higher credit -- or tighter credit, higher interest rates in late 2013, and we saw manufacturing firms --
QUEST: Right.
ADAMS: -- try to run down inventories of products in the beginning of this year, which slowed production. So, through a couple of headwinds, the Chinese economy has held up, and I think the fact that we got 7.4 percent with all of these headwinds shows that the --
QUEST: Right.
ADAMS: -- the economy is holding up, which is pretty good.
QUEST: Pretty good, indeed. We'll talk more about that and hopefully we'll look forward to more of your rhyming verse in the days and weeks ahead. Thank you, sir, for that.
Now, to the markets and how they traded. Traders are looking beyond the geopolitical tensions. Up 1 percent for the Dow, and if you look at the way the day moved, get right in there, you'll see best of the day, when all was said. Then follow the -- follow the greens, as they always say, up 162 points.
Alison Kosik is at the New York Stock Exchange. And it was Chair Yellen who -- besides earnings, we had some earnings from some companies, but it was Chair Yellen that really gave everything a bit of a boost.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It was. It was Janet Yellen. It wound up being just a laundry list of good headlines that kept stocks in the green today, Richard. There was upbeat -- an upbeat economic report on factory data.
Yes, those positive comments from Fed chief Janet Yellen, yes, they didn't hurt, either. Because at this speech, she basically said a strong economy at full employment is on the horizon. And then, of course, she did the -- she sort of closed the book on how today would end by saying -- by reassuring investors that rates were unlikely to move up anytime soon.
Also, we got the Fed's beige book report, confirming what everybody already knew, that the brutal winter weather slowed things down, but that the economy is rebounding. So, you kind of roll all this together and you get a nice triple-digit gain on the day, Richard.
QUEST: Excellent. Fed chair, that's what we'll call her, Fed chair, not chairman or chairwoman. I still can't get my head around whether it should be -- I think it should be --
KOSIK: I'm sure she won't mind either way.
QUEST: No, I think it should be chairman, whether it's a man or a woman, the phrase is chairman. But that's only my opinion. I'm sure others will disagree. Thank you, Alison. Good to see you.
It's a similar situation across the Atlantic on the markets, in terms of the Fed chair. Major European markets all ended in positive territory despite the turmoil in Ukraine. Germany's Xetra DAX gained the most.
After the break, Nigeria's government insists it's ready to host the World Economic Forum in Africa, even despite scenes like these. We'll be in Nigeria next. QUEST MEANS BUSINESS.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: An unmanned submersible is back in the Indian Ocean looking at the ocean floor and searching for wreckage from Malaysia 370. Jim Boulden spoke to the IAG chief executive, Willie Walsh -- IAG is the company that owns British Airways and Iberia, amongst others -- and got Willie Walsh's take on the situation.
(BEGIN VIDEOTAPE)
WILLIE WALSH, CEO, INTERNATIONAL AIRLINES GROUP: We continue to pray for the families and friends of everybody involved. This must be horrible for them, and I think everybody wants to see some closure. And we will look at what evidence can be discovered in relation to what has happened.
I think our industry has a fantastic track record of learning from previous events and ensuring that we don't allow these to happen again in the future. But we normally base that on evidence and facts, and I think that's what we need to do.
We need to understand what technology is available today, what technology may be available in the future. Do we need to invest and encourage technology development to give us solutions? But first and foremost, for the families of everybody associated with this, for the friends of everybody, we've got to find this aircraft, and we've got to understand why this happened.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: What about updating the so-called flight data recorders, the black boxes, having more technology? Because it is available.
WALSH: I've heard people talk about technology, but that technology that is available today may not be sufficient to address all of the eventualities. And I think it would be wrong for us to mislead people and make them believe that there are immediate solutions available.
I think we need to understand what were the issues? What were the challenges that can be addressed today? And what can be addressed going forward? But I don't think anybody envisaged a situation like this. I don't think anybody thought we could see this happen.
BOULDEN: How do you see Europe this year and the US this year? We've come through incredible, incredibly bad time. Some airlines didn't survive. But how do you see 2014?
WALSH: I think it's going to be good. I think it's going to be better than 2013. The GDP figures that we're seeing at the moment are healthy. If I'm honest, they're slightly stronger than I would have expected, so the projections for GDP growth in the UK and the eurozone and the US are slightly ahead of where we had expected to be.
So, we've never planned on an economic recovery. What we've -- what we've been doing, and I think what everybody needs to do is ensure that you can survive in even difficult economic times. But 2014 should be good, and I think the prospects for 15 look positive as well.
BOULDEN: Let's talk about the biofuels. Why this commitment? Is it because of EU legislation has said you had to have a certain percentage?
WALSH: No. In fact, there's no requirement for aviation. There is for cars and road transport, but not for air transport. We're doing this because first and foremost, we believe this is the right thing to do, and we are committed to addressing our environmental performance.
The industry has talked about he potential for biofuels, and we're now putting our money where our mouth is. So, the concept has been around for some considerable time.
What's been missing has been the commercial side to make the concept a reality. And we're confident, now, that this plant can produce a competitively-priced sustainable biofuel, and that's why we're behind it.
(END VIDEOTAPE)
QUEST: Willie Walsh. And we'll be back in just a moment.
(COMMERCIAL BREAK)
QUEST: Nigerian authorities say most of the girls who were abducted from their school on Monday night have been released. Members of the outlawed Islamist rebel group Boko Haram have been holding more than a hundred of the school girls in the north of the country. Eight students remain in captivity, according to the Nigerian military.
Nigeria's due to host the World Economic Forum in Africa, on Africa, in three weeks. The government has promised to stage the biggest security operation in its history to secure the summit. The country's seen two major attacks this week.
At least 71 people were killed on Monday morning when a bomb exploded in a crowded bus station on the outskirts of Abuja. No one claimed responsibility for that attack.
Vlad Duthiers joins us now on the line from Abuja. So, would you say as a result of these two incidents, there are now concerns about the ability for WEF to go off without incident?
VLADIMIR DUTHIERS, CNN INTERNATIONAL CORRESPONDENT (via telephone): Richard, I think that that's probably a correct statement. I believe that the Nigerian military and security forces --
(TELEPHONE TONE)
DUTHIERS: -- as you say, to have a very --
(AUDIO GAP)
DUTHIERS: -- security element in place as we will be expecting here in Nigeria world leaders, business leaders from all over the world, to be in Abuja.
But again, remember that this attack, as you mentioned --
(AUDIO GAP)
QUEST: Hm.
DUTIHERS: -- explosion --
(AUDIO GAP)
DUTHIERS: -- crammed with commuters, killed 71 people, injured at least 130 people. That is something that doesn't happen often in the capital, Abuja, simply because this city --
(AUDIO GAP)
DUTHIERS: -- enormous security elements all over Abuja. Now, Boko Haram, who the president of Nigeria blamed for the attack on Monday, has in the past attacked Abuja. If you remember, back in June of 2011, the United Nations compound in Abuja was attacked by Boko Haram. At least 20 people killed during that.
So, they have had a history of attacking the capital, but they haven't done so in a significant way in a number of years. Most of the attacks have been relegated to --
QUEST: Right.
DUTHIERS: -- rural places. Now, the two attacks that you mentioned definitely have people wondering if the military, if the security forces will be able to contain this growing threat to the center of the country.
QUEST: I'm going to stop you there, Vlad, because we are having a little bit of difficult hearing you. So, I do beg your pardon. We go the gist of what you were saying, but the line -- the phone line joining us there was not, perhaps, as clear as it might have been.
We have much more. We'll bring you up-to-date with the markets and when we come back, a full summary of news. QUEST MEANS BUSINESS, it's the mid-week edition.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. This is CNN, and on this network, the news always comes first.
Six people are confirmed dead and almost 300 more are missing after a ferry sank off the coast of South Korea. Many of the passengers onboard were teenage students. Several people were pulled to safety after choosing to jump into the ocean. Loudspeaker announcements had urged passengers to stay where they were, but the ship began to sink.
Pro-Russian forces appear to be tightening their grip on the east of Ukraine. Kiev says Ukrainian vehicles have been seized by militants assisted by local residents. This video, which CNN cannot verify, purportedly shows gunmen in armored vehicles flying Russian flags entering the city of Slaviansk, where the city hall has been occupied by pro-Russian separatists.
Nigeria's military says more than 100 school girls who were abducted by Boko Haram militants have been freed. Eight students are still missing. Armed gunmen took the girls on Monday evening after a gun battle with soldiers. One of the attackers has been captured as part of the search and rescue operation.
An unmanned submersible is back in the Indian Ocean looking at the ocean floor for wreckage from Malaysia 370. Earlier on Wednesday, the torpedo-like robot, the Blue Fin 21, was briefly brought back to the surface because of a technical issue.
The Duke and Duchess of Cambridge have begun their tour of Australian -- of Australia. William and Catherine arrived in Sydney, along with their baby son, Prince George. They toured the city's famous Opera House. They're due to meet people affected by last year's bush fires in the nearby Blue Mountains.
Manchester City is at the top of the only chart that matters, some would say. The salary chart.
(RINGS BELL)
QUEST: The team pays its players more on average than any other football, baseball, basketball, or American football team in the world.
Man City is number one. It's according to a new survey from Sporting Intelligence, and if you're considering a career as a sports star or -- there is a choice, @RichardQuest, sports star or Wall Street CEO, top chief exec, which do you think is more lucrative? Is it better and would you earn more money in the locker room or in the board room? We'll put it to the test.
Manchester City's players are paid an average of $8,109,000 each. On average -- on average. The team's highest-paid player, Sergio Aguero, makes $21 million. So, not bad going. $21 million for the top, $8 million for the average. Compare that to the Ford chief executive, Alan Mulally, he made exactly the same, $21 million.
So, from football to the New York Yankees, where the second-highest team -- highest-paid team -- is the Yankees, and they're the average again -- roughly the same -- $8 million give or take, just a little bit less, but roughly the same. Thanks to Rodriguez's suspension, CC Sabathia is now the team's highest-paid player. He makes $24 million -- a bit more than the Man City top, but the same average. Compare that to Rupert Murdoch who gets just a measly $24 million. Sabathia is doing better than the CEO of News Corp.
And then from the East Coast to the West, the third highest-paid team -- it is the LA Dodgers where we're down now by $300,000 to $7.7 million, and the team's highest-paid is Gonzales at 21. Adrian Gonzales at $21 million. Let's compare that with the chief exec of Boeing -- $21 million. So what does it tell us? It basically says CEOs and the top in the game get the same, roughly. But the average is clearly much less. Jim Boulden joins me now from London. Jim, which would you rather be? In the locker room -- in the locker room -- or the board room?
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: I would be in the locker room for two reasons, Richard. One, this is only just their salary. So you think of the big stars -- this doesn't include their endorsements, this doesn't include the clothing contracts, the TV commercials. So they get a lot more money than that. OK, the CEOs get bonuses, they get pay deferred, they get share options, but they have to work year-round, these CEOs. You and I know a lot of them and they never stop. The sports guys get two, three, four, five months off every year, and the still get the same amount of money -- the top players. So, definitely, definitely I would be on the sports field if I could, Richard.
QUEST: You are wrong, Jim Boulden, you are wrong. And you are wrong for this reason -- because the sportsmen have a relatively-limited life, the chief execs are earning those tens of millions into their 60's and beyond.
BOULDEN: I think I saw a survey that said the average CEO now lasts 18 months --
QUEST: (LAUGHTER).
BOULDEN: -- so, I think a lot of that is on garden leave and they're looking for their next job, and then of course they have to wait to get that pension at the end. Where the players, you're right. I mean, there are players in America that retire at 24 and 25, 26 years old is extraordinary. The question is what do they do with that money? We know that of course a lot of times these players don't keep that money, they spend it and that's the trouble. But I think what's interesting also about this, Richard, is we saw a lot of American NBA teams now on this list as well in the top ten. So, the National Basketball Association is trying to get their players and pay them a lot more, trying to move themselves up the list. And the NFL, American football, was way down the list. They just don't play their -- pay their players as much as any of these CEOs or the baseball guys. But here in Europe of course it's all about football, and it's no surprise Manchester City's paying their players what is it -- $8 million on average --
QUEST: Eight point one -- 8.1 --
BOULDEN: And they're actually doing quite well.
QUEST: -- 8.1 million on average.
BOULDEN: Yes.
QUEST: And actually what's interesting between the top Man U -- I'm sorry -- Man City -- and the Dodgers was only about 3 or 400,000 -- only 3 or 400,000 delit (ph).
BOULDEN: (LAUGHTER).
QUEST: Jim Boulden --
(CROSS TALK)
QUEST: -- go ahead.
BOULDEN: Thanks.
QUEST: No, go ahead, what?
BOULDEN: I was going to say, Manchester City's playing right now, and apparently they're not doing very well. So, there you go.
QUEST: I'd ask for my money back. Thank you very much, Jim Boulden - -
BOULDEN: (LAUGHTER).
QUEST: -- joining us from London. The days when sports stars are paid in Bitcoins may be some way off. Mt. Gox, once the world's biggest Bitcoin exchange, is set to be liquidated. A Tokyo court rejected the company's plans to rebuild its business and place it into administration. Now, one fund manager says he wants to spend the princely sum of one Bitcoin to buy the exchange and put it back on a solid footing. William Quigley joins me now from Los Angeles. The question is why?
WILLIAM QUIGLEY, MANAGING DIRECTOR, CLEARSTONE VENTURE PARTNERS: The question is why should we rehabilitate the company as opposed to letting it go through liquidation? Well, to refer back to your most recent interview there, Mt. Gox was the Manchester United of the Bitcoin world. It was a business everybody knew in the Bitcoin community, and it had a very important role in helping people monetize their Bitcoins -- exchanging them between Bitcoin and a fiat currency. The only problem that happened was it had a security leak, and it lost a lot of Bitcoins.
QUEST: Right.
QUIGLEY: Customer Bitcoins.
QUEST: But, but, but --
QUIGLEY: The business itself was a --
QUEST: -- hang on, but, but the Bitcoins are gone. The Bitcoins have gone.
QUIGLEY: Are they?
QUEST: Well --
QUIGLEY: But, Richard, that's the question. Where are the Bitcoins? And I'll tell you I'm trying to help the creditors of this company. Where are the Bitcoins? My concern is if we go through liquidation, that question never gets answered. And there's another reason I don't want the business to go through liquidation, and that's simply this -- we have never had a company of this size go bankrupt in the Bitcoin world. Courts, I think, are a little reluctant to embrace what to do here. We need to start setting precedents that Bitcoin companies are the same as any other company. We need to have an accounting for the shareholders and we needed to do whatever is proper to get the business --
QUEST: Right.
QUIGLEY: -- rehabilitated if possible.
QUEST: OK, no, well hang on, hang on. There's a couple of things there. Let's just say that first of all, if the company is liquidated, then surely the trustees or those responsible for the liquidation -- they are responsible for trying to find the Bitcoins just as much as you are because the Bitcoins would be the assets of the -
QUIGLEY: No so, Richard.
QUEST: -- of the liquidated company.
QUIGLEY: Richard, no. That is a fantasy, OK? They -- the court's primary role is going to be to quickly adjudicate this and get done with it. It could take years, by the way, for the bankruptcy and liquidation to take place. Ten years -
QUEST: Right.
QUIGLEY: -- in Japan is not unusual. The other point I want to make is in a typical Japanese bankruptcy that goes to liquidation, creditors get 3 percent of what they've lost. I think my team, my investors, the people who I'm bringing in to rescue Mt. Gox, can do far, far better than that.
QUEST: OK, so --
QUIGLEY: And that's why I don't want to go the liquidation route.
QUEST: Right. So if you -- just say for argument's sake, humor me in my question if you'd be as kind, good sir. Let's say you do -- you do win and you get the right, and you do find the Bitcoins nestling under the Bitcoin rock at the bottom of the garden. Are they your Bitcoins or since you bought the company in liquidation, are they the Bitcoins of the people who were previously there? In other words, --
QUIGLEY: Yes.
QUEST: -- do you use the shield to take the Bitcoins?
QUIGLEY: Absolutely now. Look, I'm an investor, I've been around the investment world for my whole career. The last thing I'm interested in doing -- and the people I'm working with are interested in doing -- is taking those Bitcoins and giving them to ourselves or someone else. But I want to know where they are. And if we can keep those assets and eventually distribute them, once we've done an accounting of who is owed what, I just truly believe creditors are better off. And as I said, I'm very worried that the court is going to short-circuit that process for expediency purposes. We need to start establishing what happens when Bitcoin companies -- like all companies -- have an episode and have a problem and --
QUEST: All right.
QUIGLEY: -- ultimately go into bankruptcy.
QUEST: Sir, here's my dollar bill on behalf of the "Quest Means -
QUIGLEY: (LAUGHTER).
QUEST: -- on behalf of the "Quest Means Business" viewer, I'm investing a dollar in your enterprise in the event that you do get the Bitcoin Mt. Gox. And I shall expect a rate of return.
QUIGLEY: Thank you.
QUEST: Thank you very much.
QUIGLEY: (LAUGHTER). We'll try to do that. Thank you, Richard.
QUEST: Of course he hasn't seen the dollar yet and it will remain firmly in my pocket until gets me a permission (ph). Good to see you. Now, the taxicab smartphone app Uber has been banned in Brussels. Why is Uber non-Uber in the Belgian capital? The Brussels city minister of transport when we return. Uber gone, Uber now, Uber yesterday, Uber tomorrow, Uber maybe.
(COMMERCIAL BREAK)
QUEST: Now, today's "Business Traveler." If you travel often, you'll know what this "U" stand for. It stands for Uber. It is the taxi app which is used across the globe in places like New York, Paris, London and Hong Kong. In fact, if I was in an Uber car now to pick me up after the program -- well I bet it'll be there before -- and according to this, there's an Uber black car available for me here in New York in just three minutes from now. If I was in Brussels, well, that wouldn't even be possible because today in Brussels, Uber has been banned after a court ruled the vehicles don't have proper licenses and the drivers could face fines of almost $14,000 for disobeying. This is a battle that seems to be pitting all parties. For instance, Brussels has banned Uber but Europe's commissioner for all things digital Neelie Croes has spoken out against the ban, calling it crazy.
Uber has had a rough ride in Europe. Firstly, in January, cab drivers in Paris went on strike against it, some even attacked the cars through the booking application. All in all, Uber now seems to be perhaps on the ropes. I spokes to the Brussels minister for transport Brigitte Grouwels, and I asked her why she supports the Brussels court decision to ban something that's seemingly so popular with travelers.
(BEGIN VIDEOCLIP)
BRIGITTE GROUWELS, BRUSSELS MINISTER FOR TRANSPORT: I agree with what the court said because it's obvious that Uber came to Brussels, just started a project but didn't inform the thems (ph) -- or didn't respect the rules that there are, and the kind of rules that exist are -- there are several. First of all for the drivers, they have to fulfill certain conditions of proving good behavior and etcetera. But also for the cars they have not to be older than six years and they have to be controlled regularly. This kind of rules either didn't take that in account.
QUEST: They're critics of course. You have seen the criticism, you see it as they say it is a case of protectionism. Brussels already has some of the most expensive tax fares, and this is a good way of ensuring that what is a successful service elsewhere does not get a toehold in the Brussels market. Your reaction?
GROUWELS: Yes, we agree that the -- that they launched the application is a very good instrument to bring customers together with the service of which by taxi drivers, for instance. And it's useful for the customers, but also useful for the taxi because now in Brussels, the taxi is running kilometers without clients in their taxis so they lose a lot of money doing this. And the app system could help, but it would have been a better idea if Uber had sought contact with the taxi sector to see how they could work together. But no, they came in this market not respecting the rules that there are for this economic sector that exists --
QUEST: Right.
GROUWELS: -- on the -- on the spot itself, and so that is why the court said this cannot be done in this way.
QUEST: Right, but do you -- you have to admit, Minister, don't you -- you must admit it doesn't look very good for Brussels where this service which is available in most of the other major cities in Europe which is phenomenally popular in places like London and New York and Paris is banned in Brussels and this very high fine is imposed. It doesn't make Brussels seem very forthcoming.
GROUWELS: Yes, but we -- we like this kind of apps, but they have to fit in the rules that exist. And also in Paris, Uber works there but in the legal way where they have -- they respect a way of working that is accepted there, so and we want them to work in the same way in Brussels.
(END VIDEOCLIP)
QUEST: Now, as somebody who has Ubered in London, Ubered in New York, Ubered in Paris, I think it's an interesting one -- the lack of Uber -- it's controversial indeed. @richardquest whether you're an Uberon or Uberoo (ph) where you travel. Jenny Harrison -- oh, I've Ubered in Atlanta as well talking about that (ph). Jenny Harrison is at the World Weather Center. Are you an Uberor?
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: I'm not, Richard. I don't go anywhere. No one wants to -- no, no, no.
QUEST: Oh, please (HUMS TUNE).
HARRISON: (Inaudible) move on now. (LAUGHTER). No I haven't, but look, I'm going to get straight to the weather because I've got something rather special here at the end --
QUEST: Oo, oo.
HARRISON: -- of this weather forecast. I know, assuming I get that far.
QUEST: Go on.
HARRISON: I don't know. So anyway, let's look. We've got some pretty good conditions across central western Europe. High pressure building in nicely. It has been quite cold. We had those very strong winds to start out the week, but those winds across the central Med and the east, they've eased up. We will have some fairly blustery conditions really in the next 24 hours across much of the northwest. You'll see the next storm system, and in fact, it stays that much further north so it shouldn't really impact the U.K., just northern Scandinavia. So, it's been very cold with this high pressure. That is moving off towards the east. Still rather unsettled. Still quite a bit of rain elsewhere, but we will at least have the temperatures coming back out to the average. In fact, they might even be warmer than the average.
So, the blue of course is the below average temperatures. It looks as if it's going to get a little bit chilly across the northwest, but it's very short-lived, and those central regions, as I say, the temperature's actually back on decline. So, Warsaw, for example, by Saturday 21, the average is 13 for this time of year, 17/18 on Thursday in Bucharest -- that is pretty close to the average. And you'll note that as well Berlin is warming up, so by Saturday 19 degrees Celsius.
Still quite unsettled across the southeast. That system, although the winds have died down, the rain is still fairly widespread. So a little bit of snow in there as well. Nothing very heavy, and then you'll the next system sweeping through the northwest. That's bringing those strong winds, and then once that clears again, we're going to have a quieter, dryer spell.
No real problems at the airport. Little bit windy as we go into Thursday in the afternoon hours in Glasgow, elsewhere just quite a bit of cloud as you can see. So, nothing major, hence the fact that it's a fairly quiet picture across in Europe. Temperatures, we've got a good 19 in London and in Paris on Thursday and 18 Celsius in Rome, so feeling better now that that rain has passed.
Pretty good clear skies as well in the last 12 hours across the U.S. Still pretty cold in particular across the mid-Atlantic. But I really wanted to show you this. This is one of the things you do certainly get when you have clear skies. This sent in from an iReporter, and it's what is called a sun halo or a sun dog is another name that is given, and this is how it is created. So basically you've got the sun up there and then you've got this layer of very high, thin cirrostratus clouds and they're made up with these tiny, tiny ice crystals. And light comes through this and it's reflected and refracted and it creates this halo around the sun. So that is something -- you see that quite often in the U.S. We get a lot of iReports on this. But you can see it anywhere around the world, so remember to send in your images to us. And I was just going to say at this point of course the halo not something Mr. Quest is particularly familiar with. He's seen mine quite frequently bright shining --
QUEST: Oh, Oh.
HARRISON: -- but I know --
QUEST: Well I'm strangling you.
HARRISON: I know. Yes, anyway, temperatures below freezing still warnings in place, Richard because it's still cold --
QUEST: Right.
HARRISON: -- but it's cleared out, hence the sun halo.
QUEST: I'm looking forward to your symposium on the cirrostratus cloud --
HARRISON: (LAUGHTER).
QUEST: -- cover which I'm looking forward in 14 parts starting next week. Thank you, ma'am.
HARRISON: Ah, there you go.
QUEST: Thank you. Cirrostratus. Now, here's something that every victim of phone theft could use. It's called a kill switch. It should be in every smartphone. The question is should you opt in to the switch or opt out of it. When we come back.
(COMMERCIAL BREAK)
QUEST: Now to Google's results which came out just after the closing bell. They list forecast earnings per share was $6.27 -- that's 15 cents lower than expected. The revenue missed expectations as well. The revenue was 4 -- $15.4 billion, interestingly, although we clicked on 26 percent more ads than last year. So revenues' at 15.4, we're clicking more often, earnings per share is not as high as other (ph). Not surprisingly, the stock is down 6 percent in after-hours trading and the reason seems to be of course the concern about the mobile strategy. Now, Google's joined up with Apple, Samsung, Microsoft along with U.S. cell companies to create a kill switch for mobile phones. The switch will allow owners -- you and me basically -- to disable a lost or stolen phone and wipe the data clean. Sounds good -- so good so far, and indeed many lawmakers and regulators have been calling for exactly this. San Francisco's district attorney says it doesn't go far enough. I asked him why.
(BEGIN VIDEOCLIP)
GEORGE GASCON, DISTRICT ATTORNEY, SAN FRANCISCO: But the problem is that we still are talking about the system depending on the consumer to proactively going out and searching for the application and uploading the application, and we know that that doesn't necessarily work well. So we just need them to go one step further. What we need is make sure that when you purchase the phone that at the time that you're signing up for the services, the phone is going to have this technology and is going to be pre-enabled at that point. And you as a consumer, if you decide that you do not want to use the technology, then you can turn it off. But otherwise -- the technology will be activated and it will be available on all the phones -- otherwise, what many people would do is they will not activate these services and the thieves basically will play a game of odds. You know, if they can go out and they can rob --
QUEST: Right, but --
GASCON: -- two or three people, one of the phones may be able to be sold.
QUEST: Isn't that sort of protecting people from themselves? I mean, is it the job of lawmakers and the job of officials like yourself to basically say to people, we'll we're going to do -- we're going to make it so you don't have to do anything. We're going to absolve you of the responsibility of making the decision?
GASCON: You know, good point, Richard, but we do this all the time, right? We put seatbelts in cars even -- you know -- we don't give people an option of whether they're going to get a seatbelt in their car or not. We provide a lot of safety around drug manufacturing, we provide a lot of safety around the manufacturing of furniture, electronic appliances, so there's a long history of consumer protection where the government can step in and has taking (ph) action to make sure that consumers are protected even when the consumer may not be readily available to take -- avail them- self -- of the safety mechanisms.
QUEST: If it is in everybody's interest to have this, why do you think they would not want to have the most safe, the most efficient way of achieving that goal?
GASCON: Well certainly some people would argue that there is so much involved that it's not in the best interest of the business models, especially for the U.S. carriers, to provide this technology. Look, you're -- every time that a phone gets stolen, you have to go back and buy a new phone. People are purchasing insurance. Just in the U.S. market alone it's about a $7.7 billion a year market just in selling insurance. And we have heard figures recently that that market would be severely impacted if the consumer knows that they're less likely to have their phone stolen.
(END VIDEOCLIP)
QUEST: San Francisco's attorney will be -- the district attorney, I beg your pardon. We'll be back with a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." Are they worth it? Think about it, they lead from the front, other people depend on what they do, they are mascots and they are the front men for those who follow. And what they do has ramifications and repercussions for others. So, all that remains to say is am I talking about the sportsman or the CEOS? And at the end of the day, which one really is worth it? I can make an argument for both. Which do you think should get paid more? Now, that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. I'll see you tomorrow.
END
