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QUEST MEANS BUSINESS
Malaysia Releases Inmarsat Satellite Data; Searching for Missing Flight to Pause; Exclusive: Inside Inmarsat; Looking at Satellite Data; Lagarde: Banks Blocking Reform; Economics Fight Club; European Shares Mixed; Record High for S&P 500; Dieting on Diet Soda
Aired May 27, 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: A strong day on the market, the S&P hits a record. No records for the Dow Jones Industrials, but clearly the market is enjoying a spring season of birth as they hit the gavel nice and hard, it is Tuesday, it is May the 27th.
Tonight, we hear the last hours of Malaysia 370 details like never before. My exclusive look behind the scenes of the company which tracked the plane's location.
Make the banks more inclusive, and the gains are less elusive. Christine Lagarde sends a message to the financial sector.
And a capital controversy. The FT journalist who took on Thomas Piketty will be joining me live tonight.
I'm Richard Quest in Los Angeles, where I still mean business.
Good evening from LA. We have the key which could light up our understanding of the search for Flight MH370. Some say it's not enough. These are the pages of the raw data, which was released by Inmarsat and the Malaysian government. There are 47, 48 pages worth.
It is the satellite data, the raw data from Inmarsat, which has been guiding investigators as they look for the plane. It's now in the public domain, and families of those onboard have been demanding to see it in the hope it would provide new clues.
The underwater search is due to pause for at least two months. The Blue Fin 21 drone will conduct its last mission tomorrow. The Australians, the Malaysians, and the Chinese will then want to get together as officials want a single private contractor to lead the next phase of the search.
And that may last up to one year, and it could cost many tens of millions of dollars. The Australians estimated maybe $60 million. They've still got to agree who's going to pay the bill, of course, or what the burden-sharing will be.
Eleven weeks after MH370 disappeared, and the search teams still haven't found any trace of the missing plane, no debris, nothing whatsoever. The experts at Inmarsat insist their calculations show the flight ended in the southern Indian Ocean. It was a startling conclusion. I got exclusive access to Inmarsat, and I asked the scientists and engineers how the were so sure they'd got it right.
QUEST (voice-over): This is Inmarsat, the company which for 35 years has been used by ships and planes to keep in touch. We were given exclusive access to the network's operation center.
QUEST (on camera): It's here in the satellite control room in London that you see the technology involved and you start to understand how they came to the conclusions.
The satellite involved is Inmarsat 3F1, one of 11 satellites in the Inmarsat collection. It's in geostationary orbit just over the Indian Ocean, and it was to this satellite that MH370 sent the signals, the so- called "handshakes."
QUEST (voice-over): Leading the team here was Mark Dickinson. With his colleagues, they dived deep into the data.
MARK DICKINSON, VICE PRESIDENT OF SATELLITE OPERATIONS, INMARSAT: There's essentially three types of information we have. We have, actually, the messages from the ground station to the plane and back again. That essentially tells us the terminal is switched on and powered up. We have some timing information. And in addition to that, there was some frequency measurements.
QUEST: The timings told them the distance between the plane and the satellite, enabling them to create the so-called arcs.
DICKINSON: You can't go faster than the plane can travel, so that bound where you get to the next arc up here.
QUEST: They then factored in the frequency differences, the so-called Doppler effect. Dickinson's team concluded MH370 had to have flown south, in the opposite direction. It was a startling conclusion.
QUEST (on camera): What did you think when you got the data and you started the modeling, you were putting it in, and you suddenly realized where this plane probably went?
DICKINSON: Let's check this. And let's check it again. Because you want to make sure when you come to a conclusion like that that you've done the right work. The data is as you understand it to be.
QUEST: Was there a moment of disbelief?
DICKINSON: Having messages for six hours after the plane's lost is probably the biggest disbelief in terms of what you have.
QUEST: Inmarsat quickly realized, the analysis of data from MH370 to the satellite had produced an extraordinary result and needed to be tested. So they ran the model against other planes which had been in the sky at the same time on the night, and against previous flights of the same aircraft.
Time and again, they ran the model, over dozens of flights. And the planes where always found to be exactly where they were supposed to be.
DICKINSON: No one's come up yet with a reason why it shouldn't work for this particular flight when it works for the others, and it's very important that this isn't just an Inmarsat activity.
There's other people doing an investigation, experts who are helping the investigation team who got the same data, they went and made their own models up and did the same thing and see if they get the same results. And speaking for the teams, we get roughly the same answers.
QUEST (voice-over): The result of all this work led to dozens of search planes and ships being sent to the southern Indian Ocean, where for weeks, they followed the trail to nowhere. Inmarsat's calculations have been called into question. The families demanding the raw data.
DICKINSON: Well, I think that data itself in standalone is fairly opaque and not particularly -- you can't draw too much from it. What I think is more pertinent is to be able to see the messages and to see the important bits of information, and that's the job that we've been trying to do, and some explanation behind how the numbers are used.
QUEST (on camera): To be clear, you're letting people make judgments on your work. You're not inviting them to redo your work.
DICKINSON: No, I say, to redo the work requires experts in many, many different fields.
QUEST (voice-over): Mark Dickinson has recently returned from Canberra, where he was part of the rethink team. He knows the entire weight of this search rests on the Inmarsat data.
DICKINSON: I think everyone in the investigation team or who are working with this understand what it means. It means this is all the data that we have for what's happened for those six or seven hours. It's important that we all get it right, and particularly trying for the families and friends of the relatives onboard, trying to make sure that we can help to try and bring this sad incident to a close.
QUEST: The Inmarsat data will guide the search for the foreseeable future. It's all they've got. Without it, there'd be no search at all, and the men in London are still sure they're right.
QUEST: Mary Schiavo is the former inspector general for the US Department of Transportation, joins me now from Charleston, South Carolina. Mary, good to talk to you.
As we've gone over this so many times in some shape, form, or description, let's -- look, we asked for the data, we've got the data. But you believe that the material we really need to see -- there's more, that we should need -- we need more to understand it.
MARY SCHIAVO, CNN AVIATION ANALYST: Well, I think so. I think that - - and not so much we, but the families are certainly asking for it, that the methodology, how they did it, a more readable explanation would certainly help the families.
And I was very impressed in your interview with the CEO when he said, hey, we gave the data to the Malaysians, and it's up to them. That is how the investigation usually works. But I think it would help the families to have more.
QUEST: Isn't there a problem here, though? Where do you stop? Because there was -- as you know, there are so many components. The components relating to the satellite modem on the plane, to the actual --
QUEST: -- wobble of the satellite itself. Where -- how much information can you physically give when they will have put dozens of people together to get to the end result?
SCHIAVO: Well, you'd be surprised. Families who've lost love ones in plane crashes have an insatiable appetite for information because -- and especially now in this accident, this disappearance -- that is all they have.
They are constantly on a quest for finding out everything they possibly can. Here, they actually want to feel like they're helping, and they want to help find the plane.
But the data is also going to be released to the companies who are bidding on the next phase of the search, because they will have to see that data to judge what their work is going to be, how accurate it is. And I'm sure in those contracts, there'll be a success component. So, there'll be other companies looking at it, too.
QUEST: What we really need, Mary, is for the other companies who monitored the work, who verified it, who created their own models, to actually come out of the woodwork and say yes, we can say we are comfortable with that. Why are they not?
QUEST: Why are we not hearing from those other organizations? Because it's perhaps unrealistic to dump a vast amount --
QUEST: -- of scientific data on the world. But if you have three or four big companies saying, we all did the same work, and we came to the same results, would that help?
SCHIAVO: Well, it would help, but then some of the companies are American companies, and they're used to just giving everything to the NTSB and letting the NTSB decide what to parse out, like Boeing. And I understand they participated in it, too.
And at this point, they're probably very happy over at Boeing to let Inmarsat field all the public inquiries and the pushing and prodding, et cetera, and that's really not -- for example, just using Boeing as an example -- that's not their style. They usually give everything to the NTSB and take their clues from them.
QUEST: Mary, perhaps a slightly unfair question. I will allow you plead the fifth in this, if you so wish. Do you think -- do you think Inmarsat got it right?
SCHIAVO: I do. I don't mind saying it, I do. The data -- when I went over the data, and I certainly have no qualities and intelligence to work at Inmarsat, but there's -- the data is very interesting, because you can see at certain points in the data, something happened. The different data points change. You can see -- and they have pointed out where it is, so it's very impressive.
And as you said, without this to work from, there really would be nothing. But this coupled with -- the Australians had a release today about the additional things they were doing, they were going to track waypoints and see of the waypoints added sense to this. They were going to look at some of the -- see if they could get information from any of the hydrophones.
So, there's a lot going on right now, and now they're trying to verify this data in other methods, which will only add support to it. So, to me, it looks like they're definitely onto the path.
QUEST: Ms. Schiavo, good to see you, as always. We'll talk more about this.
SCHIAVO: Thank you.
QUEST: Thank you very much for joining us.
Now, after the break, it's the book we can't stop talking about. "The Financial Times" calls into question Thomas Piketty's number crunching in his book about capitalism. Both sides of the story next.
QUEST: The managing director of the IMF, Christine Lagarde, is taking on the bankers that she says are blocking crucial reforms. Ms. Lagarde is accusing them of hampering efforts to prevent a repeat of the global financial crisis.
Speaking at a conference for economic inclusion in London that was attended by the Prince of Wales, Prince Charles, who has his own strong views, Christine Lagarde called for tougher regulation and tighter supervision. During her speech, she drew on quotes from historical figures to underline her argument.
As the former British prime minister Winston Churchill remarked, "I would rather see finance less proud and industry more content." She quoted the philosopher Aristotle, who said, "Wealth is evidently not the good we are seeking." And as Oscar Wilde once put it, "The true perfection of man lies not in what man has, but in what man is."
Now, Christine Lagarde directed her attack at banks, which are dragging out the pace of reform.
(BEGIN VIDEO CLIP)
CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: The bad news is that progress is still much too slow, and the finish line is still too far off. Some of this arises from the sheer complexity of the task at hand.
Yet, we must acknowledge that it also stems from fierce industry pushback and from the fatigue that is bound to set in at this point in a long race.
(END VIDEO CLIP)
QUEST: "The Financial Times" has entered the fray into this inequality debate, along with Thomas Piketty, the author of "Capital in the 21st Century." That is the book, of course, which everybody is reading, and which has caused such a stir.
Christine Lagarde recently told CNN she was reading the book. It may well have influenced her speech today. Piketty's main contention that you'll be familiar with: wealth inequality is rising to levels last seen before the first World War. In the pink corner --
(BOXING BELL RINGS)
QUEST: -- there is the FT, which has landed an unexpected punch, suggesting the French economist has got his sums wrong. The paper's economics editor says Piketty is guilty of "fat finger errors," arbitrary adjustments, comparing the wrong years, and many other mistakes besides.
He says Piketty cherry-picks his sources, for example, relying on UK personal wealth statistics, even though they come with what Giles calls a "health warning."
Now, the report says the data is not a suitable data for source estimating total wealth in the UK or wealth inequality across the whole of the wealth population. So, in the other corner --
(BOXING BELL RINGS)
QUEST: -- Piketty hits back. He says his numbers come from 20 different countries and go back to the 18th century. It means the data needed a number of adjustments. However you look at it, the outcome is the same. Inequality gap is growing. So --
(BOXING BELL RINGS)
QUEST: -- one man who's crunched plenty of numbers in his time, and a bit of a bruiser when it comes to economics himself is the former US Treasury Secretary Larry Summers, who told Nina Dos Santos this book shouldn't be the last word on inequality.
LARRY SUMMERS, FORMER US TREASURY SECRETARY: I think at this point, one needs to accord his broad view a certain amount of skepticism. My own judgment is that, for reasons I expressed in the review that I have written, that the particular mechanisms generating inequality that he highlights, I don't think are probably the most fundamental --
NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT: Why? Elaborate on that.
SUMMERS: -- forces. I think that the role of technology in globalization in rewarding people who are able to lever technology to reach a world market is the most important cause of inequality, and I think any gradual accumulation of wealth because of any particular rate of return is very much a secondary factor.
But the FT has challenged even more fundamental conclusion in Piketty's work, namely that wealth inequality has increased. And we'll have to see where the debate goes on that one.
I see a lot of signs that wealth inequality has increased, and so even if -- and I don't know what will happen -- a variety of mistakes were to be discovered, I would be surprised if the core conclusion that wealth inequality has increased were to be reversed.
DOS SANTOS: We've heard Reinhart and Rogoff, austerity being based on flawed economic theory there. And now if it turns out that Thomas Piketty's work isn't right either, where does this leave economic thinking?
SUMMERS: Well, I think we need to get -- be careful about getting ahead of ourselves. As a policymaker, I never based any policy on a single study or on a single statistical analysis. Rather, I based judgments I made on a variety of studies, balanced and weighed based on a variety of kinds of evidence.
But I think it is always tempting to reach for a single data point or a single study, and that is usually a mistake. And so, I think policy does best when it balances and weighs a variety of types of evidence on any given question.
QUEST: Now, let's go straight to Piketty's adversary, Chris Giles, who is the economics editor of "The Financial Times." And it's always good to see Chris, and thank you, sir, as always, for coming in and talking to us.
You really stirred the hornets' nest with this one. It's one thing to question a book, Chris, but you have questioned the darling book of the -- the book du jour, the economic Holy Grail that everybody is rushing to at the moment. So let's be blunt: are you saying we have sloppy work, or are you saying there is a skewed result, or both?
CHRIS GILES, ECONOMICS EDITOR, "THE FINANCIAL TIMES": Both, I think. In terms of the book, I went to the book originally about a week and a half ago purely as a reference material because I wanted to use some numbers from it, and then I found a huge inconsistency with some UK data.
And then I went back a few days later and looked at the sources, and I found that the sources didn't work the same in the original source material, which was online, and they were in the book. And then I found error after error after error, or things that appeared to be errors. Then we've documented them, and we published our article last Friday.
QUEST: Which I read in great detail. And I wonder, what do you think the motive was, if you would be -- if you think there was a motive, what was it?
GILES: Actually, we've been really careful not to make any judgments about motives because we don't know what they are. We just pointed out what we see as errors and the effect of those errors.
And the effect of them is particularly in Europe, much less so in the US, but particularly in the European data, and especially in the UK data, is to exaggerate the apparent trends in wealth inequality when all the other data -- in fact, the source data that Thomas Piketty says he uses shows no increase in wealth inequality apart from a small part of the 1990s for the last 40 years.
QUEST: Right. I don't want to get into a he says, he says, because obviously, Piketty is not on the other side at the moment. But you're aware, now, of his defense that adjustments have to made, data can't be compared pari passu, it's not collected for those particular purposes. Is there something inherently wrong in what he's done if his answer is that?
GILES: Yes, I think so. There are some very small things, like the fat finger errors, which are just mistakes. But there are inherently wrong aspects, particularly of the UK data, and there's -- I think in the US data, there's a sense he's giving readers that he knows much more about wealth inequality than he does.
So, for example, when he uses from a period of 90 years for the US, he says the top 10 percent of the wealth inequality, he has no data for that. He just takes the top one percent and adds 36 percentage points. It's all in his spreadsheet. He doesn't tell the readers about that.
For the UK, he swaps between sources, which has the effect of giving - -
GILES: -- this apparent rise in inequality. And when you actually look at the original sources, it's not there.
QUEST: Do you accept his fundamental premise that there is a rise -- a current rise of inequality that mirrors the sort of inequality we saw in previous eras, and far from society coming together, it's actually coming apart?
GILES: Well, this is the "Downton Abbey" question. Are we going back to Downton Abbey in the UK, Europe, or the US? And even his data shows we are so far away from the sorts of wealth inequality we saw in the 19th century that it really is not a very sensible comparison to make.
GILES: There might be inequality rising. It might rise in the future. Those are all things that might happen. But at the moment, we're nothing alike that sort of capitalism which we saw then.
QUEST: Chris, final question. How did you feel taking on the -- the book of the day. Let's face it, you wrote a story that literally said, according to current thinking and current love affair with Piketty, that the world is flat.
GILES: Well, it was quite exciting, and it was quite daunting, in fact. And so, we did check it pretty carefully before we went live with it, and we gave it Thomas Piketty nearly a day in advance, and we gave him an eight-page document about what we were going to report with all the errors outlined in detail, all the screen shots we had from his spreadsheets we gave to him to get his response.
And we published his response online in full. So, I think we've behaved very responsibly, but it was quite an exciting -- certainly one of the most exciting weeks I've had.
QUEST: And we look forward to hearing more. And maybe when we've come to debate Mr. Piketty, you'll do it right here with us, assuming, of course, you're not doing it on your own newspaper. Many thanks, indeed, Chris. Good to see you, as always.
To the markets. European shares were mixed on Tuesday. The DAX hit a record high with expectations the ECB will ease monetary policy.
In the US, there was a record high for the S&P 500. No record for the Dow. It's up the best part of 70 points. You can see the numbers on the screen. It was positive economic reports in the United States which gave a great boost of all. The NASDAQ climbed more than one percent to the close.
When we come back, if you're trying to lose weight, don't put down that diet soda. I'll explain more in just a moment.
QUEST: We are nothing if not equal opportunity on QUEST MEANS BUSINESS. You can have a diet Dr. Pepper, we dare not show a diet Pepsi without showing a diet Coke. We have more diets than we know what to do with.
And for those looking to shed some pounds -- oh, thank you, I'll have it with a bit of ice -- a new scientific study claims there is a secret to losing weight. It's all about the diet soda. Now, keep in mind, the study was funded by the American Beverage Association, so that fine body of men and women are hardly likely to be neutral on the subject.
But our senior medical correspondent Elizabeth Cohen, who is most certainly neutral, she did take a look:
(SODA CAN LID POPPING)
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Richard, as of late, the diet soda industry, well, they've been getting some bad press. There are studies that show that drinking diet soda can actually, ironically, make you crave sweets more and possibly sabotage your diet.
So, this group of researchers at universities in the United States, they decided to test this out. They took 300 people who were overweight and who drank quite a bit of diet soda, and they split them in half. And half of them were told keep drinking your diet sodas. The other half were told no diet sodas for you, you can drink anything you want, but not diet sodas.
And here's how it turned out. After three months, these folks who started out at about 94 kilograms, well, the diet soda group, they lost about 6.5 kilograms. The folks who couldn't drink diet soda, they lost only about 4.5 kilograms. Not a gigantic difference, given how large they were to start with, but it still is a significant difference.
Now, it is important to note who funded this study. It was the American beverage industry. So, they of course make diet sodas, as well as regular sodas and bottled water.
Now, we asked the researchers, what's the bottom line of your study? And they said look, dieting and exercise is hard work. And sometimes it's hard to give up your favorite thing. So, if your favorite thing is diet soda, that may be something that you want to keep drinking. Other people may decide to drop it. It really in the end becomes a personal choice. Richard?
QUEST: Many thanks, indeed, Elizabeth. Elizabeth Cohen. Now, of course, since I opened the diet Coke, I'd better open the diet Pepsi and have a swig of that before I get a nasty letter of complaint from one or the other -- I'm drinking them both at the same time. Equal opportunities on this program.
When we return, discontented voters have delivered the EU establishment a serious bloody nose. After the break, the former treasury secretary, Larry Summers, says those at the top brought it upon themselves.
(BEGIN VIDEO CLIP)
SUMMERS: This is a referendum on the way elites have managed European macro economics.
(END VIDEO CLIP)
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. President Obama says just less than 10,000 American troops will stay in Afghanistan after the U.S. combat missions ends this year. Speaking at the White House, the President said the military would draw down to a normal embassy presence in Kabul by the end of 2016.
Police said at least 20 people were killed after a bomb exploded inside the Shia Mosque in central Bagdad. Forty-three more people were injured. The mosque is in a busy commercial neighborhood in the middle of the city. Scenes of devastation in the Ukrainian city of Donetsk after clashes between government forces and pro-Russia separatists at the airport. Dozens of militants were killed though there are conflicting accounts of exactly how many. We'll have a live report on Donetsk in just a moment.
Pakistan's prime minister has called his meeting with his Indian counterpart and historic opportunity for both nations. The two leaders met in New Delhi today for almost an hour. Prime Minister Sharif described the talks as warm and cordial and said both countries would work to overcome their mutual mistrust.
Right now European leaders are trying to regroup after voters delivered an electoral drubbing at the weekend. They supported of course the Eurosceptic parties. Now, the leaders are in Brussels. The event is billed as an informal working dinner. I suspect the dinner will be anything but informal, and on the menu, there will be an argument that strikes to the heart of the European ideal. Whether there should be more integration or less, how should the Euro be managed and who's the right person to become the next E.U. commission president? The issue of course is what went wrong. The tide against the status quo should come as little surprise according to the former U.S. treasury secretary Larry Summers. In the second part of our interview, Nina Dos Santos asks the former treasury secretary whether the fundamentals have been called into question.
LARRY SUMMERS, FORMER U.S. TREASURY SECRETARY: The European common market, European Monetary Union, was an elitist project that was driven by elites that led to consequences that were entirely unpredicted by elites that have been catastrophic for millions of people. That, in the face of it, means that people are voting against elites after an event like that should not be so surprising. This is a referendum on the way elites have managed European macroeconomics over the last decade, and they have not managed it well and they are reaping the political consequences.
NINA DOS SANTOS, NEWS ANCHOR AND CORRESPONDENT BASED IN LONDON FOR CNN INTERNATIONAL: So how -
SUMMERS: That does not mean that mindless populism is the right answer, it does not mean that given where things are, that the European project should be abandoned. But it does mean that the economics of austerity have failed. The experiment with trying to have common money without common anything else, has failed --
DOS SANTOS: Now I know it's failed.
SUMMERS: -- and Europe needs to move forward beyond the economics of austerity towards putting the restoration of growth throughout Europe, if you like, through inclusive prosperity as a central part of the strategy going forward.
DOS SANTOS: Is it too late to do that, do you think?
SUMMERS: No, I don't think it's too late to do it. It would have been easier if there had been more done sooner, but it is not too late and certainly the decisions the European central banks makes going forward, the decisions that are made in Brussels going forward, decisions that are made in Germany going forward will be highly consequential. But what will be crucial is not to confuse keeping the system together and bringing down credit spreads which are good things but they're really means to the end of providing prosperous lives for citizens.
QUEST: Larry Summers. Now E.U. leaders meeting in Brussels are expected to discuss the crisis in Ukraine which has seen a recent spike in violence. Fighting between pro-Russian separatists and government forces has claimed dozens of lives at Donetsk Airport on Tuesday. It is the deadliest battle in the city in Eastern Ukraine that the region has seen. Nick Paton Walsh is in Donetsk and joins me now. The situation - how localized is it, if you like, to that airport to just a small area? Because I know quite often when we see these disputes and these tensions boil over, in reality they can be quite localized to a particular region.
NICK PATON WALSH, SENIOR INTERNATIONAL CORRESPONDENT FOR CNN INTERNATIONAL: Well we've seen sporadic violence across this region for the past couple of weeks, Richard. Violence at the airport -- in fact Monday -- that was particularly troublesome though because it concentrated on a part of the infrastructure of this huge city which seemed to escape the unrest in the past month. Yes in the same day, there was shelling shooting in Slavyansk, a militant stronghold to the north of where I'm standing. But today a city really tense, anxious, deadly quiet now, bizarrely - no one on the streets at all. And woke up this morning to try and assess the sheer scale of what had happened in the onslaught on the airport on Monday.
WALSH: At the morgue, they're counting the dead, the sign of the Ukraine army's resolve to take back the airport, little dignity in the hurry. Nearby a woman, her head blown clean off. Doctors said the wounds were from bullets or heavy weapons and that locals had been to collect some of these men - their relatives - that morning. At the airport, cordoned off but not controlled by separatists living side-by-side with police. Still, occasional blasts, gunfire. This truck where so many militants died, Ukraine's army finally resorting to all its fire power. In a nearby grass, the first aid given, the bodies dragged away in the woods. Shocked locals didn't want their faces shown.
Male: A lot of people in Arjundu are frightened.
WALSH: Who can stop this?
Male: I don't know.
WALSH: Would you like him to?
Male: Only this help Russia. I don't see any way.
WALSH: Can this part of the country ever be part of Ukraine?
Male: I think Ukraine will be destroyed.
WALSH: Onlookers said the dead were `nashi', Russian for `our guys.' Heavy casualties for Kiev's enemy but perhaps new martyrs in surmise (ph) here.
WALSH: In a separate troubling development, Richard, the OSCE in charge of monitoring developments here, trying to deescalate the situation say four of their observers have gone missing since Monday evening to the east of Donetsk. They quote, "Have lost contact with them." Unclear what's happened. The people really are trying to assess what yesterday actually meant for the forthcoming days. Was that the Ukrainian government in so many ways ineffectual in trying to use force to resolve the situation of the past few weeks? Were they emboldened by the existence of a new president-elect in Kiev deciding to show their tough hand to head potentially in negotiations? They don't seem militarily impotent if they do sit at a table with Russians and separatist. Or are we seeing an escalation in the violence -- the use of force - to try and push the separatists out of the places they've tried to secure here and perhaps a new worrying phase ahead of us? Richard.
QUEST: Nick, does it feel very strange, very odd to be in a relatively modern, developed city in a country that is basically virtually - it's the European doorstep, and of course between Europe and Russia, and seeing such scenes of absolute violence and seeing effectively the foment and the ferment of a civil war?
WALSH: Yes. I mean, this is a city which had football championships merely two years ago. The bizarre thing is how - it's almost so synthetic this entire crisis seems. Ten years ago when this whole choice between east or west started being fought out on the streets of Kiev - I say fought out, it was entirely peaceful at first Orange Revolution. People joked at the idea of Ukrainian civil war. Now it's actually happening here inside Ukraine. We're seeing a city, yes, which is modern. Two sides - those pro-Russian calling the Western side fascist - there's so little evidence of that. The turnout for far right in the election was about 1 percent or so.
And then the other side, the West - Western people - deeply concerned about Russia's influence here and believe it's all a part of a broader Russian plot to take over Eastern Ukraine. Yes, there's Russian support here, but it's not universally running everything that goes on. Such an extraordinary mess that's inflamed so fast and seems so far from resolution here. Yes, here in a modern city where, you know, we saw men fire live rounds on the Central Square. Just earlier on, Chechnyan militants - some of them - just 24 hours ago in a main government building, seized now with sandbags around it an airport that used to fly to Istanbul or around the world, now covered by sandbags, black smoke and the occasional sporadic gunfire. It's a very troubling situation simply because how fast this sprang up and how far from resolution it seems, Richard.
QUEST: Nick, thank you for that. That's exactly the sort of thing I wanted to hear this evening just to put it into some sort of different type of perspective rather than the politics that we normally end up always talking about or who said what, where, why. But here you have a -- an -- ordinary city in Europe which is now on the verge of civil war.
Now, after a two-month wait, the Malaysian government has made good on its pledge to release crucial satellite data. Why some say this 47-page report isn't good enough. We'll talk about it in a moment.
QUEST: Earlier we said Malaysian authorities have released a 47-page document. It's very detailed. It contains the raw data - the last known satellite communication with MH370 - and it comes after two months of angry demands and accusations from the families of the missing passengers. Some still say the report is missing key information. Our correspondent in Beijing, David McKenzie reports.
DAVID MCKENZIE, INTERNATIONAL CORRESPONDENT FOR CNN INTERNATIONAL BASED IN BEIJING, CHINA: Family members have been pushing for weeks to get the raw data from Inmarsat because they say they wanted to get that information to independent experts to see if the numbers add up. For now, they've gotten much of that information but some still say they're disappointed.
SARAH BAJC, PARTNER OF MH370 PASSENGER: The first thing we're going to ask about or we're going to expect feedback on is, does the data look right? You know, is it as complete as we're being led to believe?
MCKENZIE: The majority of passengers onboard flight MH370 were from China. Now their family members are scattered across the country. They've had from the very beginning a lack of trust from the information they're getting from authorities.
STEVE WANG, FAMILY MEMBER OF MH370 PASSENGER: What did they do for this more than two months? We haven't searched for anything - they can't find anything. We are suspicious for the first day that whether they are searching the right place, whether what they're telling is true or not. Because it is our loved one who is on the plane with no direct evidence, we'd never believe it.
MCKENZIE: Trauma counselors I've spoken to have said this process of trying to get information and this lack of trust is very damaging for the family members. Of course they're going through many weeks of trauma because of their missing loved ones, and this process isn't helping them at all. David McKenzie, CNN Beijing.
QUEST: Now to the weather forecast. Tom Slater is at the World Weather Center. There is one more day of searching with Bluefin and where the pings were. I know you're going to refer to talk about that in a second, but, Tom, bearing in mind we are now in - this is the Southern Hemisphere. In the winter when it does get -
TOM SATER, METEOROLOGIST FOR CNN INTERNATIONAL: Right.
QUEST: -- how bad does it get? Because I remember the first search area was going to be terrible, --
QUEST: But this isn't quite so bad.
SATER: No, it's a little bit further north, Richard, but there are winter storms that could reach, you know, that area. So, I'm sure it's part of the decision to resume in August, but again, we're going to follow that closely. And on a side note, Richard, you're reporting on the Inmarsat data was - it was right on and outstanding. I mean, to take the technical information and make it easy for everyone to understand in that form and fashion -- fascinating. Congrats to you. But we're going to continue to monitor this area. Yes, the Bluefin-21 has one more day of its ocean mapping. We're going to come back here in August as well and keep an eye on this. Now, if this was further to the south, it would be horrible. But winter storms can really rake this area with strong gales, high seas. So to have that manpower in the vessels in that area - not a bad idea to wait `til August to get back together. I know the families would like this to be ongoing, but it could be rough out there as well.
Thunderstorms have been rough in some areas. Trying to break the heat into the east, but some good totals have been following from Italy to the Czech Republic - well over 100 millimeters. In fact you can see it here - 118/42, but the real rough weather I think was found in parts of Germany. Here in Saxony, we had a heavy downpour that created a mudslide, and there's something else - structural integrity problems with some of the roads here in this community. The heat in the east continues, and to the south as well. I mean, Kiev 30 degrees when your average is 21. Minsk 27, Zurich 28 and 29 last couple of days with Moscow.
The rainfall that we're finding in the central area is going to slide east, but you could see how it's kind of back building as it circulates around an area of low pressure. Some of these storms are still producing incredible amounts of downpour and the risk of hail and damaging winds. And this has its eyes, well, on a couple of areas such as Berlin. So in the travel plans that you may have, you could expect a few delays there. Winds could be a little strong in Copenhagen, but other than that, your delays are going to be fine weather-wise. Just look for the isolated thunderstorms to develop. Wednesday's high 19 in Paris, 15 in London.
As we look to the States, we had some rough weather. Tornados in Texas, and up to the north in North Dakota, this one was really something special because not only was it captured on a still picture, but take a look at this video. This is amazing. Now, it's silent video, and I must tell you that because the gentlemen recording this, well, in fear of his life, said things we can't share over the airwaves. This is an EF2 on a scale of zero to five, went across an oil field, destroyed 15 trailer homes that the men and women who work at the oil field were living in. Nine injuries, one was Air-Vac-ed out of the area, critical injuries. But, again, most of the severe weather if you have business plans in Houston, Dallas, Austin, San Antonio, we could still find some problems in this part of the U.S. We're going to keep an eye on it, Richard, but, once again, with the reporting on the Inmarsat data, congrats.
SATER: Good work.
QUEST: Thank you, I much appreciate it. Thank you very much. You know, whenever I see - I am fascinated when I see these pictures of tornados. And you rarely see pictures inside the tornado - for obvious reasons because by the time it's in sight -- so maybe tomorrow, Tom, maybe we could find some pictures of actually what it looks like as the tornado goes overhead, if there are any such pictures around -
SATER: Yes, there are. (I feel badly) (LAUGHTER).
QUEST: -- because - all the stuff that gets thrown. Anyway, thank you very much. Tom Sater at the World Weather Center. Twitter's investors are nervous. The stock is at an all-time low and there's a piece of bad news and a glimmer of hope. That's next.
QUEST: Twitter doesn't have much to tweet about when it comes to its stock price. It's near an all-time low. Investors are worried about the network's growth. And today the new report finds the social network may have fewer users than it says it does. Samuel Burke is at the Super Screen to break it down. Now, Samuel, once you've broken it down, I've got a couple of core questions for you millennials.
SAMUEL BURKE, BUSINESS CORRESPONDENT: All right, well let me show you these numbers and the discrepancy between what Twitter says it has in terms of monthly active users - 241 million users, and what eMarketer says in its research that Twitter has 182 million users. What they say is that Twitter is counting accounts, not counting human beings, and of course advertisers only care about human beings. They're saying there are a lot of Twitter users who have multiple accounts, and a lot of businesses. Think of an organization like CNN. We're the same amount of human beings no matter how many Twitter accounts we have, and we have hundreds of Twitter accounts. So they say it's actually much closer to 182 million users.
QUEST: Does it matter though because I also noticed that a lot of the Twitter numbers - they say the growth is slowing in the U.S. and in Europe, but picking up in Latin America and in Africa. Now, the core question - are all users equal? Is it a simple numbers game?
BURKE: Absolutely not. Not all users are created equal. Just take a look at this chart. There's definitely growth - even though it's slow - here in the United States and back in your old stomping ground of Europe, Richard. The users are increasing, it's actually on fire in Latin America and in Asia, and they think that it's actually going to increase -- look at the estimations to 2018. But to answer your question, Richard, no, not all users are created equal, and that's because of - the have advertising here in the United States and in Europe that's doing very well, where the advertising in those places where user growing very well, they don't have the advertising there actually. They may have lots of users -
BURKE: -- coming up in these countries, but not the advertising revenue to back them up yet, Richard.
QUEST: Can we say that Twitter is - I always hesitate to sort of want to sort of say it's over bar the shouting. Switch off the lights on the way out.
BURKE: Not yet. The - one of the key things that these analysts say, we've seen a lot of problems with Twitter lately. The biggest problem is that people find it difficult to use. That's a big indictment for a social network that's been around this long. So what analysts say - we still need to see how Twitter is going to make this service much easier to use, easier to follow Richard Quest's feed every night, but we're still not there. But look at the growth they're predicting - 400 million users almost by the year 2018, 40 percent of which they believe will be in Asia -
QUEST: Thank you.
BURKE: -- Richard.
QUEST: Tom - Samuel - Burke breaking down the numbers on Twitter. I will have a "Profitable Moment" in a moment. And a reminder - a warning - don't drink fizzy drinks when you're on air. Whew.
QUEST: Tonight's "Profitable Moment." Damned if you do and damned if you don't. When Inmarsat released the data, they already knew that somebody would say it simply wasn't enough. And for one simple reason - they haven't given away the formula or the backing documents. They had told us the raw data, but it's the equivalent of the student who does the - gives you the answer - but doesn't show you their workings and how they got to it. And there's a good reason why they didn't do that. It's not their own information to give. They would've had to give up an enormous amount of data which simply belongs to other people. The reality is we need organizations like Boeing, the AAIB, the NTSB - the big organizations to come out and say they agree with what Inmarsat has found. Otherwise, this just goes in circles. And that's "Quest Means Business" for tonight. I'm Richard Quest in Los Angeles. Whatever you're up to in the hours ahead, I hope it's profitable.