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QUEST MEANS BUSINESS

Journalist Beheaded by ISIS; Debate About Showing Video of Beheading; Rebuilding Ukraine; Branson Seeks Ukraine-Russia Solution; McDonald's Closed in Moscow; Stocks Up Despite Brief Dip; Argentina to Skirt US Court Ruling; Geopolitical Risks Hit Global Economy

Aired August 20, 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)

MAGGIE LAKE, HOST: The trading session ends with gains on Wall Street. It's Wednesday, August the 20th.

Tonight, outrage and horror. How video of the murder of James Foley spread online and shocked the world. Also tonight --

(BEGIN VIDEO CLIP)

RICHARD BRANSON, CHAIRMAN, VIRGIN GROUP: Let's try to get this sorted by negotiation and not by force.

(END VIDEO CLIP)

LAKE: Richard Branson tells me he can broker a deal between Russia and the West.

And a warning to airlines from Hamas: stay away from Tel Aviv's airport.

I'm Maggie Lake, this is QUEST MEANS BUSINESS.

Good evening. An act of violence that shocked the conscience of the entire world. That's how President Obama characterized the beheading of a

US journalist by ISIS militants.

US intelligence has confirmed a horrifying video posted on YouTube, which shows the murder is authentic. It is just the latest example of

barbarism from an extremist group that has spilled blood across Syria and Iraq. The CEO of GlobalPost, where James Foley worked, is speaking right

now. Let's listen in.

PHILIP BALBONI, PRESIDENT, GLOBALPOST: -- all reporters. And we hop to all people who believe in a free press. Jim represented the best of the

profession of journalism and what it can be and what it should be in its finest hour. So, I'm happy to take your questions, now.

UNIDENTIFIED MALE: Can you tell us about the warning I understand you got about a week ago?

BALBONI: Yes. On Wednesday night of last week, the family -- the Foley family received an e-mail from the kidnappers that was full of rage

against the United States for the bombing and they stated that they would execute Jim.

Obviously, we hoped and prayed that that would not be the case, and we communicated quickly -- or as quickly as we could with the captors, pleaded

with them for mercy, explained to them that Jim was an innocent journalist, had done no harm to the Syrian people -- indeed, cared deeply about them,

and asked them to give us time to find another means. Sadly, they showed no mercy to Jim.

UNIDENTIFIED FEMALE: Did you involve the government when you got that warning? And are you happy with the way the government's handled its

response?

BALBONI: From the very beginning -- and remember, we have been working on this case for almost two years. We've had a team of

investigators in the field in the Middle East, in Europe, investigating Jim's whereabouts and the means of securing his freedom.

Everything that we ever learned we provided to the United States government, to the FBI, State Department, and appropriate agencies.

As to whether we're happy with what the government did, let me say this: this is a very difficult situation for the United States. There is

no easy way to bring these hostages back, to have brought Jim back. I think there'll be a time for a post-mortem on everything that transpired

and whether something else could have been done. But I don't think this is the moment for that.

I'll tell you where our thoughts are, and I know the Foley family feels the same way. Our thoughts are with Steven Sotloff, who is one of

the other three Americans being held by the Islamic State, with the families, and we are hoping and praying that our government is doing

everything possible to find a way to secure their freedom.

UNIDENTIFIED FEMALE: Can you give me a little bit about what you've done --

LAKE: Let's break away there. As we have heard, this incident has shocked the world. Our Pentagon correspondent Barbara Starr has more.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): The ISIS video is simply too horrific to show. The man being executed by beheading

is James Foley, a freelance journalist, kidnapped in northwest Syria on November 22nd, 2012, Thanksgiving Day.

ISIS, the brutal militants rampaging through Syria and Iraq, say they killed Foley in retaliation for US military operations in Iraq. Foley, a

freelance photojournalist from New Hampshire, reads a message denouncing the US, presumably written by his captors. He says America is his real

killer, and then Foley is murdered.

"If genuine, we are appalled by the brutal murder of an innocent American journalist, and we express our deepest condolences to his family

and friends."

And the family of Jim Foley released a statement late Tuesday night that reads in part: "We implore the kidnappers to spare the lives of the

remaining hostages. Like Jim, they are innocent. They have no control over American government policy in Iraq, Syria, or anywhere in the world."

Another American, Steven Sotloff, is shown at the end of the video. The executioner speaking with an apparent British accent threatens to take

Sotloff's life if President Obama doesn't stop airstrikes in Iraq. Sotloff, kidnapped on the Syrian-Turkish border, has worked as a

contributor to "Time" Magazine.

No one knows how many thousands of Syrians and Iraqis have died at the hands of ISIS militants. Across their stronghold in northern Iraq, cold-

blooded mass killings of Iraqi men, women, and children.

JOHN KIRBY, REAR ADMIRAL, PENTAGON PRESS SECRETARY: We do have information that they continue these kind of depredations and crimes

against humanity. There's no question about that.

STARR: After dozens of airstrikes against ISIS positions across northern Iraq, the group may feel pressure. But there's no sign it's

abandoning its violence and horror. ISIS has some 10,000 fighters. It's now a group the US intelligence community calls a "credible alternative to

al Qaeda with aspirations to attack the United States."

STARR (on camera): According to the United Nations, there are now more than one million Iraqis displaced by ISIS on the run from this violent

militant group.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

LAKE: The execution video has sparked fierce debate about how to cover the story. Does showing the video go against basic human dignity?

Does it provide ISIS with the attention it craves? Or is this video a crucial part of the story that people have a right to see?

Social media websites are increasingly facing those questions. Traditional media outlets have grappled with them for decades. At CNN,

content goes through comprehensive editorial approval before it is put on air. CNN has decided not to broadcast the video. It is showing still

pictures and airing an audio clip.

However, on social media, content is posted directly to the web. Sites must act retroactively. Twitter CEO says it is suspending accounts

to prevent the spread of the footage. YouTube says accounts linked to terrorists are suspended.

Soon after the video was posted online on Tuesday night, one of James Foley's cousins tweeted, "Don't watch the video. Don't share it. That is

not how life should be."

Joining me now, senior media correspondent Brian Stelter and former head of public policy at Google and CEO of Digg, Andrew McLaughlin. Thank

you both so much for being here. This is -- Brian, I want to start with you. This is such an emotional topic for so many people. You could see

that dialogue taking place on social media today.

We explained the vetting process that CNN goes through. We can only speak for ourselves, but broadly, this is across traditional media. Where

is the line on how we decide what we're not going to post and what we don't? What are the parameters we are using?

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: A number of factors come into play, and one of the most important is decency, simple decency.

There are matters of taste, there are matters of what is appropriate for all audiences to see, from young to old.

And one of the things I noticed about Twitter yesterday, when this news first broke, was that if you searched Jim Foley's name, the first

result was a picture of what had happened after the execution. A picture that we would never even show on television, I don't think even blurred we

would show it. So, that is an example of the very different standards we're talking about.

LAKE: Yes. And this, of course, comes from the tradition that anyone can walk in, TV is sort of passive, you don't choose to go to it, it's on

somewhere and you may walk past and see it. At least that's the root of it.

Andrew, a little bit different for the social media companies, which come from a technology point of view, view themselves as a platform, and in

many cases, they've aired on the side of free speech. What is the criteria? What's the dialogue happening here for social media companies in

regard to an event like this?

ANDREW MCLAUGHLIN, CEO, DIGG: So, the dilemma for Twitter is that three things are in tension. The first is, it's an open platform where

they want people to share news and feel free to express themselves. And by any measure, the events, the horrible events in Iraq and Syria recently are

news. They're newsworthy.

The second tension is the very human sympathy that anybody would feel. Brian calls it decency, you might call it compassion for the family and the

friends of James Foley. And any group of humans running a company like Twitter will feel that kind of pull to be decent and try not to accelerate

or to kind of deepen the pain of the family.

The third tension here, though, which I think is interesting, is that likewise, nobody wants to give to the murderers in this case the propaganda

victory that comes with the wide spread of the video. We heard James Foley's cousin tweet nobody should be sharing this thing, nobody should be

talking about my now-dead cousin in that way.

And I think what Twitter has done is actually quite defensible in this case. If you think about the case of Michael Brown in Missouri or more

recently, Eric Garner in Staten Island who was killed in a police choke hold, families have very different reactions to the deaths of their

relatives depending on context.

Here, we see terrorists attempting to provoke shock, and so the natural instinct is to deny them that propaganda victory. In Missouri and

Staten Island, what we saw were people killed through arguably an abuse of power and the documentation of that moment is something the family wants

everyone to see in order to share in the outrage.

LAKE: This means that these companies -- and traditional media included -- are being asked to weigh in on politics, though, aren't they?

STELTER: They are. We saw Twitter --

(CROSSTALK)

LAKE: Because we also -- we may not be a platform --

STELTER: -- suspend some of the accounts --

LAKE: -- but we say we want to cover both sides and give the information, not pass judgment.

STELTER: YouTube as well. YouTube owned by Google was where this video was originally uploaded. The video was taken down, duplicates were

quickly taken down. But there are always going to be other places online to find this content.

These videos are still online. I noticed one of the sites that is hosting copies of the execution video says it's getting abnormally high

traffic today, and it's happy to post a label to its users warning about the high levels of traffic coming in.

So, there will always be some places online for this content. It's like playing a game of whack-a-mole trying to stop it from spreading.

LAKE: Right. And this runs contrary to the sort of free speech -- it's not illegal. It may be immoral, it may be horrible, we may make a

decision as a society. This is not illegal necessarily based on the parameters usually surrounding free speech.

What does that mean for Silicon Valley? They're responding retroactively case by case. Does there need to be an industry-wide

standard, Andrew, about the rules of engagement on social media when it comes to content like this?

MCLAUGHLIN: Well, you raise a very interesting question, which is in the age that we live in, these technology platforms cross every border.

So, give or take a little bit of national firewall censorship in a place like China, Twitter is available to everybody with a smartphone everywhere

on the planet.

And that means that there is no one country that has jurisdiction over it and can impose its views on it. Maybe the United States, because that's

where Twitter is headquartered, but we live with a very, very strict form of free speech protection here under our first amendment.

So, what's interesting is that the responsibility, then, to make decisions about the availability of speech, images, video, and so forth

rests with these private companies.

Personally, I feel comforted by the fact that Twitter and Google in particular have taken very strong free speech points of view. And my sense

is that we benefit from that.

It may be excruciatingly painful to the family members of James Foley, Daniel Pearl before that, and others that have been killed visibly,

publicly at the hands of terrorists. But it is the price we pay for the free flows of information worldwide --

(CROSSTALK)

STELTER: And I know some people are uncomfortable --

LAKE: The defense -- and Brian, I want to ask you about that. This isn't the first time we've gone down this road. Our traditional media

changing how we handle this when we're faced with this?

STELTER: I was just talking to the person who was the head of PR for "The Wall Street Journal" in 2002. That's the year that Daniel Pearl was

executed. And that case, he says that he had to fight with some of the networks to stop them from airing at least parts of the video.

And he said to me, in this case, today, it's good to see that the networks are acting so responsibly by refusing to show this barbaric

action. I know that some people online today feel that CNN and other networks shouldn't even be showing the still photographs from the video.

That's the line that we've drawn. We will show a couple of still photographs and not the video itself.

On the other hand, that choice could be described by others as sanitizing the violence. And there's a strong argument to be made that

people must see the horror that happens in these cases in order to truly understand it.

LAKE: To make an opinion. We're going to have to leave it there, but it's worth pointing out as well that on the open platform sprang up in

response to that, ISIS blackout and pictures of James Foley doing his work, the exact opposite of what the intended propaganda machine wanted. So,

that also -- that same platform allowed for that as well.

STELTER: Absolutely.

LAKE: It's a very, very complicated issue and one that we're going to continue to talk about. Appreciate both of you for coming in and sharing

your views. Andrew McLaughlin from Digg and Brian Stelter.

MCLAUGHLIN: Thank you.

LAKE: Well, Richard Branson says he has the tools to help solve the crisis in Ukraine. My conversation with the Virgin chairman next.

(COMMERCIAL BREAK)

LAKE: Ukraine's prime minister says the country will need billions more dollars to repair its economy as unrest continues in the east. Prime

Minister Arseniy Yatsenyuk accuses rebels of damaging power stations, railways, mines, and other vital infrastructure.

(BEGIN VIDEO CLIP)

ARSENIY YATSENYUK, PRIME MINISTER OF UKRAINE (through translator): A million damages are intentionally inflicted on Ukraine every minute. It is

absolutely clear that these are pre-planned actions to suffocate us economically. Russia realizes that we need not billions of hryvnia, but

billions of dollars for the restoration of Donbas.

(END VIDEO CLIP)

LAKE: Ukraine is calling on the International Monetary Fund to combine two installments of the country's $17 billion bailout package and

deliver the money before the end of the year.

With diplomacy between Kiev and Moscow broken, business leaders are stepping in. Virgin Group boss Richard Branson says he wants to find a

peaceful solution to the conflict and avoid a new Cold War scenario.

He's joined by the leaders of fifteen major companies, including heavyweights like Unilever, PayPal, and eBay. Earlier, I spoke to Richard

Branson and asked him what compelled him to get involved.

(BEGIN VIDEOTAPE)

BRANSON: I just think it's extremely sad to see in my lifetime the Berlin Wall coming down, and then a number of years later, all that hope

seemingly disappearing. And I have a lot of Russian friends, a lot of Ukrainian friends, a lot of business leaders from both countries. And I've

spoken with them, and they're equally sad.

And we felt it was important to speak out to beg our politicians to -- through diplomacy to resolve this particular issue. And then, as quickly

as possible, to try to get back to the normality that existed between Russia and Europe and the rest of the world after the Berlin Wall came

down.

And what -- if that does not happen, we fear that we'll go right back into the Cold War situation of the past and all the misery that that --

that was bestowed upon Russian people during those years. And it's not a win-win for anybody.

LAKE: Are you hoping to speak to Vladimir Putin himself? And if so, what makes you think this group can succeed where heads of state have thus

far failed?

BRANSON: Well, the first important thing that's happening is that the president of Ukraine is meeting with President Putin next week, and let's

hope that something positive comes out of that.

If that fails, then the group of people that we've put together, the group of Russian business leaders would be delighted to meet up with

President Putin and see whether a compromise can be reached. The group of Ukrainian business leaders that we have onboard would be delighted to sit

with the Ukrainian president.

And I think we could use our negotiating skills, our entrepreneurial skills to reach a compromise.

LAKE: The Ukrainian and Russian business leaders who have joined you in this effort have taken a risk. The business community has been

reluctant to speak out. What are they telling you?

BRANSON: I must have spoken to about a hundred Russian business leaders, most of whom were not willing to speak out, but all of whom want

to see us turn the clock back a year or two. The last thing they want is a horrible war.

Now, the Russian leaders that have put their name to this are significant people in Russia, they're the largest mobile-reach tailor,

they're the largest restaurateur, they're the largest car dealer, largest food distributor and so on. They're all self-made people. And they're

basically just saying to President Putin, let's try to get this sorted by negotiation and not by force.

LAKE: Is Vladimir Putin someone you can do business with? Do you think he's open to diplomacy?

BRANSON: I don't know. I think that we would be irresponsible if we didn't give it a try. And I think that he feels that when he got

reelected, the West didn't welcome him into office, that he was somewhat ostracized by the West. And therefore, he's going it alone somewhat.

And I think that whatever caused him to feel that, it's up to the West, I think, to make it clear that we want Russia to be -- ultimately,

that we want Russia to be part of Europe, we want to be able to trust each other completely. And that's what we've all got to try to work towards and

try to put the last year firmly behind us and try to find a positive way forward.

(END VIDEOTAPE)

LAKE: Russia has ordered the closure of three McDonald's restaurants in Moscow for what it called "sanitary violations." Food safety inspectors

claim the restaurants breached numerous consumer safety laws. The restaurant chain has been under increased scrutiny following the Russian

invasion of Crimea. McDonald's says it is looking into the claims.

In the US, stocks dip briefly after newly-released minutes from the Federal Reserve showed officials considered raising rates sooner than

expected. That was prompted by improvements in the labor market and rising inflation. Despite the dip, the Dow, S&P, and NASDAQ all ended the day

higher.

Argentina is considering new legislation that might move its economy out of default or land its government in contempt of US court. We'll

explore that next on QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

LAKE: Argentina's president is calling for the country to disregard a US court order preventing it from paying debt. In an emotional speech,

President Cristina Kirchner proposed legislation that would allow some creditors to swap out defaulted bonds for new notes that would be governed

under Argentine law. She was visibly shaken at times.

(BEGIN VIDEO CLIP)

CRISTINA FERNANDEZ DE KIRCHNER, PRESIDENT OF ARGENTINA (through translator): Excuse me, I am a little nervous. I usually have more poise,

however, I really feel that we are living a moment of great injustice in Argentina.

(END VIDEO CLIP)

LAKE: One of Argentina's holdout creditors, Aurelius Capital, said in a statement, "Argentina's leaders have literally chosen to be outlaws.

Contrary to government rhetoric, the only conspiracy harming Argentina's economy is composed of the nation's own leaders."

Charles Dallara is former managing director at the Institute of International Finance. He was one of the key negotiators when Greece was

dealing with bondholders a few years ago, and he joins me now. Charles, thank you so much for being with us.

This situation in Argentina, everyone was hoping they'd be able to come to an agreement. Instead, it seems like the two sides are so far

apart. Is Argentina making the right move here? Is this the best way to try to resolve the situation?

CHARLES DALLARA, FORMER MANAGING DIRECTOR, INSTITUTE OF INTERNATIONAL FINANCE: Good to be with you, Maggie. Unfortunately, I think not. I

think Argentina continues to move away from what is the ultimate solution here, which is negotiated cooperative solution.

They created a rather difficult situation for themselves over a decade ago with a very confrontational unilateral approach. Many creditors

accepted it, even though their arms were twisted. Some did not. Today, it's pretty clear that the inexorable flow of court decisions has put

Argentina and its economy in a corner.

Inflation is approaching 40 percent, Maggie. The country has moved into another recession, mild so far, but likely to intensify. I think

Argentina needs to step back, not swap harsh language with its creditors. I would discourage both of them from that. And see if they couldn't

quietly sit down and find a negotiated solution.

LAKE: I just want to stay on that for one minute. They've called them "vulture funds," hedge funds. These are not sort of your average

bondholders or another government company. These are people who specialize in distress. Should they do more to come to the negotiating table as well?

Without knowing all the details, you're not involved in this negotiation, but --

DALLARA: Well --

LAKE: Takes two sides to negotiate, doesn't it?

DALLARA: It does. But I think pejorative language is probably not going to help either side at this point. I think that the creditors have

indicated their willingness to negotiate. They're unlikely, at the end of the day, to get 100 cents on the dollar, and I think they know that.

But my own experience in Greece and many other restructurings over the years has demonstrated that ultimately, these holdouts will not block a

cooperative solution if all parties really want to find one. Argentina still has the cash to settle this, but their reserves are dwindling --

LAKE: Yes.

DALLARA: -- and I think that time is running out on them.

LAKE: Interesting. Let's talk about other negotiations. The situation in Ukraine and Russia, we just heard Richard Branson calling for

the business community to get more involved, negotiate. Should people be wary of investing in Europe right now, given the geopolitical backdrop?

DALLARA: I think people should be wary of investing in the former Soviet Union. I would not generalize that more broadly to Europe. Of

course, Europe is struggling with two clouds over its horizon.

Now, one, the economic cloud, which shows that the recovery is not taking hold as many had anticipated earlier this year, Maggie. Growth is

very weak throughout the continent. And then there is the second cloud of the Ukraine-Russia and the tensions associated with that as well as the

sanctions.

I do think -- and my firm, Partners Group, this there are still interesting selective investment opportunities in Russia. One has to be

careful because European markets, like American markets, have a good bit of liquidity jostling around in them, but I think that one can find selective

opportunities in Europe today, notwithstanding the fact that the economic outlook remains rather weak.

LAKE: I like how you say a little bit of liquidity sloshing around. Other people would say there are dangerous bubbles forming, Charles, and we

have to beware. What about the US? That looks like it's starting to think about getting back to a more normal environment, raising interest rates.

What's the smart money telling you? Are they concerned about valuations in the US?

DALLARA: Yes. We have seen valuation inflation, asset inflation, asset-flation, as we call it, penetrate virtually every corner of financial

assets -- public, private, debt, equity.

LAKE: Junk bonds, people are very worried about that.

DALLARA: Junk bonds -- and they've had a bit of a correction here in the last couple of weeks, which I think is symptomatic of where corrections

may come. We have not had a phasing out of QE1 or 2 without some serious correction in the equity and debt markets, and we're likely to get that

again.

I think we are approaching the end of the line for QE3, and I think that the markets have to begin to prepare and have to really be selective

in investing today for the eventual end of QE3 and the raising of rates.

I think the Fed has probably gone as far as you can go to try to use monetary policy, Maggie, to create jobs. And I think there's a limit to

that. We've got some serious structural problems in this country. The structural problems need to be addressed. Tax policy, educational policy -

- if we're really going to drive the jobless numbers down much lower than we have today.

LAKE: That's right, and a lot of people say until the Fed gets out of the picture and policy decisions will not be forced to deal with that --

(CROSSTALK)

DALLARA: I agree with that. I think that's true.

LAKE: -- and it has to come from the fiscal side, but it has to happen.

DALLARA: I think that's true.

LAKE: Charles, it's always lovely to catch up with you. Thank you so much for coming in and spanning the world with us in just a couple of

minutes. We appreciate it.

DALLARA: It's a pleasure to be here with you, Maggie.

LAKE: Charles Dallara from Global Partners.

We've got a lot more coming up. Hamas has a warning for international airlines: don't fly into or out of Tel Aviv. More after the break.

(COMMERCIAL BREAK)

LAKE: Welcome back, I'm Maggie Lake. This is CNN and on this network the news always comes first.

U.S. intelligence has determined that video released by ISIS militants showing the beheading of American journalist James Foley is authentic.

Foley disappeared in Syria in 2012. Speaking earlier to reporters, his parents say they hope his death can bring people together, not see hatred

or bitterness.

U.S. President Barack Obama says United States will do whatever is necessary to see that justice is served to those who murdered Foley. In a

news conference held in Massachusetts, Mr. Obama said Foley's life stands in stark contrast to those of his killers.

Israeli Prime Minister Benjamin Netanyahu has vowed to continue the country's military campaign against Hamas. Violence between the two has

resumed after a ceasefire officially expired 24 hours ago. In a televised address, Mr. Netanyahu said, "A long battle was ahead." We'll be live in

Gaza City in just a moment. Landslides have killed at least 27 people in a crowded part of Hiroshima, Japan. Local residents and rescue crews are

digging through mud and debris after heavy rain drenched the city. Authorities say at least ten people are still missing and fear the final

death toll could be much higher.

A grand jury in the American state of Missouri will begin hearing evidence in the death of Michael Brown, the teen shot and killed by a

police officer. This comes as U.S. Attorney General Eric Holder arrives in Missouri to check in on the federal investigation into Brown's death.

Hamas has warned international airlines not to fly in or out of Tel Aviv from 6 a.m. local time on Thursday. The group's military wing, the

Qassam Brigades made the announcement on Palestinian television. Israel says more than 100 rockets have been fired into Israel since the end of the

ceasefire with Hamas. Fred Pleitgen joins us live from Gaza City. And, Fred, what are we seeing today and what do we know about this warning?

FREDERIK PLEITGEN, CNN CORRESPONDENT: Well there certainly were a lot of rocket barrages today that went from Gaza into Israel, and those rocket

barrages actually continue. The other thing that we're also seeing is a lot of Israeli airstrikes in response to that - some very heavy airstrikes,

especially in the southern parts of Gaza City in the southern outskirts of Gaza City. And you're absolutely right, earlier today there was an address

by the Qassam Brigades, that they said that they warned all international airlines about flying into Ben Gurion Airport starting at 6 a.m. local time

tomorrow morning which is in about six and a half - a little less than six and a half hours from now.

Now, we do know that the Qassam Brigades do have rockets that can reach the area of Ben Gurion Airport, however, those rockets are very

inaccurate and you do also have the Iron Dome missile defense system which is something that we've seen in action for the better part of the day, that

apparently so far has been picking off any rockets that have been going towards populated areas - not just around Tel Aviv and around Ben Gurion,

but of course other places as well - Jerusalem as well.

So certainly that threat to the airport is something that needs to be seen both ways, whether or not that is something that is really credible,

because Qassam Brigades also warned against public gatherings in Israel -- especially around the area of Gaza. They've warned against people trying

to go back to their homes in those areas, so certainly it was a broad threat, and all this comes, Maggie, after Israel allegedly targeted the

head of the Qassam Brigades which is Hamas' military wing, Mohammed Deif, for the massive airstrike that happened here last night. The Qassam

Brigades say that the Israelis did not kill Mohammed Deif but that they did kill his wife and his seven-month-old son. In fact, their funeral took

place earlier today. Thousands of people attended that funeral. They were very, very angry of course, but it does show that both sides now seem to be

firmly on a war footing and any sort of prospect of a ceasefire seems to be quite distant, Maggie.

LAKE: It certainly does. And, Fred, what's the situation in terms of actual military boots on the ground? Does Israel seem poised to put the

military back into Gaza? We had seen them pull back, they were sitting right there, they were - up `til now, it seemed like it was an air

offensive with this threat on the airport. Would we expect to see an escalation on the ground?

PLEITGEN: Well generally, as you said, Prime Minister Benjamin Netanyahu has said they could be in for a very long war, and we do know

that the Israeli Army is amassed at the borders with Gaza, and that a ground offensive is something that could certainly still happen in the

future. One of the things that the Israelis also did aside from stepping up their airstrikes is they also called back about 2,000 reservists, that

they'd actually let go over the past couple of days. They called them right back in. And so it seems as though they are gearing up again for

what could be another ground offensive.

They certainly want to put themselves in a position where it's something they could do. However, it doesn't seem as though that's decided

yet. One of the things the Israelis keep saying is that if it's quiet, then they will remain quiet. Otherwise, they do have the means to

escalate. So we're going to have to wait and see the next couple of days what these two sides do, but it certainly does seem that both sides say

they are ready to escalate if that's something they feel they need to do, Maggie.

LAKE: All right. And as usual and has been the case, civilians caught right in the middle. Fred Pleitgen, thank you so much. You're

watching "Quest Means Business." We will be right back with more after the break.

(COMMERCIAL)

LAKE: Right now in St. Kitts in the West Indies, the cruise ship Carnival Breeze is getting ready to sail off into the sunset on her way to

Puerto Rico. And while things might look serene on the surface, below decks, a crew of 1,000 is at work. Richard went down to the labyrinth of

kitchens, store rooms and, yes, the garbage incinerator to find out just how much effort goes into helping people relax.

(BEGIN VIDEOCLIP)

PROVIN GAMA, CHEF DE CUISINE, CARNIVAL BREEZE: We have 166 chefs cooking in the galley. Total on the ship we have eight restaurants, 4,700

guests.

Female: Have a good evening, welcome back.

RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Here, precision is key.

AMAN KUMAR, FOOD AND BEVERAGE MANAGER: I'm serving around 20,000 meals in a day, which doesn't happen in the hotels, but it happen on cruise

ship. For us, it's a piece of cake.

QUEST: The fundamental challenge is ensuring you have everything on board before you set out, because there's nowhere to pull over if you run

out of milk.

PIERRE CAMILLERI, HOTEL DIRECTOR, CARNIVAL BREEZE: I load on the first day of the cruise in our home port everything I need to serve all my

guests and my crew. That's a huge loading of food, beverages, hotel supplies, spare parts, stationary, everything that I need to make this

operation work and tick 24/7.

QUEST: There are 1,845 cabins across 14 decks. More than 1,400 crew from 61 countries. And when it's full, 4,700 passengers. This is a ship

on a vast scale. The planning occurs at the morning meeting.

CAMILLERI: Upcoming cruise, 4,609 guests starting in Miami, highest count is from Florida and New York. USA, we're looking at 86 percent,

German guests 13, Spanish guests 182 and Russian guests 14.

QUEST: For those running the hotel, the most challenging day is when the old guests leave and the new ones arrive.

CAMILLERI: The last day of the cruise - 4,600 guests wake up in the morning, serve them breakfast and we ask them to be off the ship by 10:30

in the morning -- 45 minutes max to get this ship, this size ready for the next group of esteemed guests.

QUEST: The ship is in port a total of eight hours, and in that time, everything must be restocked using teams with forklift trucks to do the

heavy lifting. How much beef do you carry?

GAMA: Primarily we carry around 2,000 pounds.

QUEST: Yes.

GAMA: Then we have a flat iron steak. We carry up to 1,700 pounds of flat iron steaks. Tenderloin - beef tenderloin - we carry around 2,400

pounds.

CAMILLERI: This is the meat that is required for tonight's dinner, and definitely tomorrow's operation.

QUEST: I think I'll have that slice tonight.

(LAUGHTER)

QUEST: How many fresh eggs?

GAMA: Fresh eggs, around 3,700 dozen.

QUEST: Three thousand -

GAMA: Thousand -

QUEST/GAMA SIMULTANEOUSLY: -- seven hundred dozen.

GAMA: Yes, sir (inaudible).

QUEST: I'll work that out for you later. Forty-four thousand four hundred.

CAMILLERI: This is all the dry food that the chef would need for this cruise. This is food that does not need any refrigeration.

QUEST: Porcini powder.

CAMILLERI: Porcini powder used in four of our recipes. This is our beverage holding area - one of two. I have a liquor area which is the

harder liquor. We need to have a storage space specially designed to cater for that --

QUEST: Amazing.

CAMILLERI: -- because if it goes on fire, I need to have an area which is more protected. This is a very important room for me. This is

what I serve to my guests. This is revenue that we generate on board, so I have to make sure that this room is always well stocked.

QUEST: You needed more beer than that. They'll drink that in a night.

CAMILLERI: In a week's consumption of beer alone, is 11,000 bottles. This where all garbage lands.

QUEST: From the whole ship.

CAMILLERI: I show you how it works. We have an incinerator and we have a compactor. We compact our cans from the lever (ph) three ways.

QUEST: Yes.

CAMILLERI: We have tanks, so everything goes in tanks.

QUEST: Really?

CAMILLERI: Yes. They're called grey tanks. And then from tanks, our engineering team will process that accordingly.

Female (KNOCKING ON DOOR): Housekeeping.

QUEST: With so much going on down below, it's essential the crew keep one fact at the front of their minds. For the passengers, this is not a

boat trip, it's a holiday.

(END VIDEOCLIP)

LAKE: Well passenger numbers on cruise ships are expected to hit a record of 21.7 million this year according to the main cruise industry body

- the Cruise Lines International Association. Richard asked its president if maintaining that expansion will take work.

(BEGIN VIDEOCLIP)

CHRISTINE DUFFY, PRESIDENT AND CEO, CRUISE LINES INTERNATIONAL ASSOCIATION: When you look at the highest guest satisfaction rate that the

cruise industry enjoys overall, average of 96 percent highly-satisfied vacationers that come from a cruise ship, it's among the highest in the

travel industry. So clearly the opportunity is how do we - how do we -- move those who have not considered a cruise before to take their first

cruise? Because we know they will come back.

QUEST: Fascinating. When I was doing the research for going on "Business Traveller," I was amazed, Christine, there's no other word for

it. Amazed that there's only 22 million cruise journeys taken a year. I thought it'd be something 120/130 million. I felt certain globally it had

to be a large number. It's - truth be told - it's peanuts-ly small, isn't it?

DUFFY: Well, that's why we have such a great opportunity ahead of us. If you look at the numbers, this year where we're forecasting 21.7 million

people will take a cruise vacation - those numbers have grown every year over the past - since 1995. Actually in the past decade, it's increased 66

percent.

QUEST: Is there any evidence that well-publicized incidents like the Triumph or the Costa Concordia or any of the other less desirable incidents

that have afflicted the industry - have any long-term detrimental effect? Have you done any studies on this yet?

DUFFY: Well, you know, it's interesting because certainly we have had incidents and - but as we have looked at recent data where we've done

research, many of the obstacles that people talk about as to why they have not considered a cruise, go back to some of those perceptions that there's

not enough for me to do, am I going to be bored? Am I going to be over fed? So, really when we - I think people have been able to understand that

the incidents have - are - very isolated, very rare, and so I think more of the issue has been around some of the old perceptions -

QUEST: Right.

DUFFY: -- that we need to help people overcome.

QUEST: So give me an example, finally, of what it is as an industry you're going to do.

DUFFY: We've done a great job as individual brands talking about each new ship will have in terms of features and benefits and entertainment and

celebrity chefs and dining and all of the exciting things that we have on the ships. But I think we've got to do more to talk about the broader

category of cruise -- why it is such a tremendous value, not only in terms of what you get for the money compared to any other kind of vacation that

you can take and also what you get in terms of the return on the experience. And especially when we look at trends in travel with multi-

generations traveling together, with people - millennials - who are coming in who are much more well-traveled than previous generations -

QUEST: Right.

DUFFY: -- and want to continue traveling.

(END VIDEOCLIP)

LAKE: As we can see Richard running all over that ship, the question is did they let him on the bridge? Did he steer the ship? We're going to

find out. Time for our world weather forecast right now. Jenny Harrison is at the CNN International Weather Center. I certainly hope they didn't,

Jenny, but you -

JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: I know.

LAKE: -- are going to tell us -

HARRISON: I'm with you on that, Maggie. They said that - I saw him ringing the bell at some point. (Inaudible) I hope he didn't have

anything, you know - to impart to people. But, yes, let's hope he was kept off the important bit. Talking of course of being on a ship, Maggie,

probably not the bad (ph) place to be if there's going to be a volcanic eruption, and hopefully they're some distance away. And I say that

because, of course, just want to update you really as to what is going on with the Iceland volcano. This is the situation yesterday. It hasn't

changed. It is still at the same level, escalating unrest (ph). And you remember it's one of over 30 volcanoes that are monitored constantly in

Iceland. So, the main threat from this - if anything happens, it'll be something underneath the glacier, and it's really more likely to cause

flooding than anything else. So, this is what I continue to monitor. Of course if it does erupt, then there could be some - you know - some costs

in terms of what does happen if the ash actually comes into the atmosphere.

But what they have done is this - they've actually put this huge area in red to be outlined - and this is called the evacuation zone. Now, in

actual fact, there's nobody living within this area, but it is also part of a very, very popular and well-visited national park. So they've closed the

parks, they've certainly had to send people out to check of course that nobody is still in the area. But they're expecting no permanent residents

that live in this region. But if there was to be an eruption, certainly one of the main concerns would be for Iceland flooding towards the north.

And of course then if there is ash, it is how or if it gets carried elsewhere away from Iceland.

And certainly over the next few days you can see that the general flow of the air, the winds are coming down from Iceland, and just like a few

years ago - four years ago - heading across into northwest and (inaudible) these central areas of Europe. But nothing has happened yet, so are just

continuing to monitor this situation.

Meanwhile in Europe, a few more showers, a few more thunderstorms, but also the air is certainly cooling off, particularly across central and

eastern areas. But more than just cooling off across the northwest, probably feeling a little bit chilly. The temperatures here actually were

dropping to below the average for this time of year. And, in fact, on Tuesday it was the first day for 76 days that the U.K. had not had anywhere

reached a high of 20 degrees Celsius.

And in fact, as we go through the weekend, temperatures are expected to drop even further. Even across into more eastern areas, the

temperatures have been a bit above average. Coming back down to the average or just below - Kiev/Moscow a good example of that although in

Scoppia (ph) temperatures are still a little bit above in the mid-30s Celsius. There are some warnings Wednesday to Thursday for thunderstorms -

particularly into northern Italy and just pushing across into the northern Balkans. Again, heavy rain, hail, maybe some strong winds. But for the

most part, all the major airports looking fine and dry. Should be any reasons why you get held up anywhere. And as for temperatures on Thursday,

little bit cooler in London at 19, but a very nice 28 Celsius in Rome. Maggie.

LAKE: Fantastic. Thank you so much, Jenny. And we will right more - back with more after the break.

(COMMERCIAL)

LAKE: Just a few minutes from now, a nationwide curfew will go into effect in Liberia. Efforts to control the spread of Ebola led to violence

on Wednesday as crowds attempted to leave a community that has been quarantined. Liberia's president said the measures are aimed at saving

lives. A World Health Organization spokesman joins me on the phone now from Monrovia, Liberia. Aphaluk Bhatiasevi joins us. Can you give us an

update - thank you so much for being with us - can you give us an update on what the situation is on the ground there, and is this the right approach

to try to get the situation under control?

APHALUK BHATIASEVI, SPOKESPERSON, WORLD HEALTH ORGANIZATION: We're actually just finished a meeting from our office and we are on our way back

to the hotel. The streets are empty and we (inaudible) by the police. I think what I've seen in the last couple of weeks is that there is a shift

in the mood of people. In the beginning, people - we heard from many people that the people in the communities weren't taking Ebola seriously,

some of them didn't believe that it was real. But I think there is a natural shift now that they are seeing that Ebola is happening in the

country. It is real and it's natural for people to be afraid.

LAKE: Do they -

BHATIASEVI: And we're trying to work with the government. We're trying to work with the government and supporting the government in

reaching out to the communities. The government is working to raise awareness in the communities and reaching out through the community leaders

and different groups in the communities directly. And it's really important to empower people to let people know what they can do to protect

themselves and their families at this point of time where there is a spread of Ebola in the country.

LAKE: Can you talk to us about the challenges of trying to address this in an urban area in a city like this, and do the - does the government

there have the resources necessary to get a handle on this?

BHATIASEVI: As you know, the system here wasn't perfect even before Ebola. I mean, there are a lot of challenges in different areas. Right

now what they're trying to do is to try and strengthen the health system - get it up and running as much as possible as soon as possible. But as you

know, there are a lot of logistical challenges. WHO has been working closely with the government and we have deployed more than 20,000 packs of

personal protective equipment which includes masks, gloves to help in the response for Ebola to help take care of patients. And we know that is not

enough. More is coming in. There's more equipment coming in, but it all takes time because of the challenges that I've mentioned earlier.

LAKE: Absolutely. Ms. Bhatiasevi, thank you so much for joining us and bringing us up to date. We just want to remind our viewers that curfew

will be coming into effect in just about five minutes. Thank you very much for watching. This is "Quest Means Business." We'll be back with more

after the break.

(COMMERCIAL)

LAKE: (LAUGHTER). Twitter has been going crazy for Richard Quest since he took the ALS Ice Bucket Challenge, after going under the bucket.

Participants get to nominate three more people and on Wednesday "Forbes Woman" president, Moira Forbes, accepted Richard's challenge.

(BEGIN VIDEOCLIP)

MOIRA FORBES, PRESIDENT, "FORBES WOMEN" MAGAZINE: I'm Moira Forbes and thanks to CNN and Richard Quest for nominating me for the ALS Ice

Bucket Challenge. Richard, let's see if I scream as loudly as you did. In addition to making a donation, I'd like to nominate Kathy Ireland, Felicity

Huffman and Beth Brooke. Here we go. (GASPS).

(END VIDEOCLIP)

LAKE: She was pretty poised. Well, with Moira taking the plunge, we are now just waiting for marketing guru Martin Sorrell and AirAsia boss

Tony Fernandes. Fernandes took to Twitter earlier today - "Challenge accepted. And all the press and Queens Park Rangers fans will do at Loftus

Road next week." Well, we'll be looking forward to that.

And that's "Quest Means Business." I'm Maggie Lake in New York. "CNN Newsroom" live from London starts now.

END