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Fighting Escalates in Ukraine; Sanctions Hurting EU, Russia; European Economy; Hackers Leak Nude Celebrity Photos; Privacy Threat from Accidental Sync; Britain Unveils Anti-Terror Measures

Aired September 1, 2014 - 16:00   ET


RICHARD QUEST, HOST: No trading in the United States, it is a public holiday. It is Labor Day weekend, long weekend, but it is a busy Monday

elsewhere. It is Monday, it is the 1st of September.

Tonight, toughening up. The EU wants tighter sanctions despite the risks to EU economies.

Also, a massive breach of privacy. Celebrities' intimate photos are leaked, shared, and then spread online.

And the final whistle's about to blow. Clubs have two hours to seal deals that could make or break them.

I'm Richard Quest. Start of a new week, and of course, it's September, and I mean business.

Good evening. It may be a public holiday in the United States, but there are many events to bring to your attention. "A great war Europe has

not seen since World War II has come to our home." Who said that? The words today of Ukraine's defense minister as Ukrainian officials report a

Russian tank has attacked air fields in eastern Ukraine.

President Poroshenko says thousands of Russian troops are in the region helping the separatists. As the violence on the ground escalates, EU

leaders are now threatening Russia with new sanctions within a week. Russia's foreign minister says that will trigger a strong response from



PETRO POROSHENKO, PRESIDENT OF UKRAINE (through translator): We will first of all start from our own interest: protect our economy, protect our

social sphere, protect our citizens, our businesses.


QUEST: The situation is deteriorating. Diana Magnay has the latest from Donetsk. Good evening, Diana. When you get the sort of inflammatory

phrases from the Ukrainians talking about war, and then you have Russia, it's retaliating, and more sanctions. Tell me what's the situation at the

heart of it all.

DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: Well, where I am in Donetsk, Richard, which is being fairly heavily shelled over the last few

weeks and months, the people, the civilians here, are utterly dejected. You get a real sense that whoever is doing the firing on these civilian

neighborhoods -- and there has been a fair amount of it, Richard -- that whoever's doing it, the locals blame Kiev.


MAGNAY (voice-over): This feels like an exercise in futility. Citizens of Mariupol digging trenches against an enemy advance from the

east as the rebels take huge swathes of country further north. That's where in a couple of towns, Ukrainian troops have been surrounded for the

last few days by rebel forces, these men taking prisoner by them.

"We came to rescue our people who were surrounded in Ilovaisk," says this Ukrainian soldier. "We lost a lot of people."

"It's amazing you survived. Was it worth it?" the rebel soldier asks?

Quietly he responds, "No."

En route north, a group of Ukrainian medical personnel. They don't want to give interviews. They look incredibly demoralized. They say they

brought out 70 dead soldiers on Saturday and are waiting to see whether they can take out more. That this is what you look like when you stare

death in the face.

MAGNAY (on camera): We're about 15 kilometers from the town of Starobesheve, which has fallen into rebel hands as they've pushed south.

Up on the hill to my left there is sniper position and there is a Ukrainian military truck over on the other side. The land behind me appears to be

the front line.

MAGNAY (voice-over): Further on, a Ukrainian jet flies overhead and bombs targets in rebel-held territory, the first sign we've seen of

Ukraine's depleted air force in action. In Starobesheve, we film the aftermath of shelling, having been waived through the rebel checkpoint no

questions asked.

"It was Ukrainian fire," this old man says, whose roof was smashed by the shrapnel. "I'm pure Ukrainian," he says, "but you don't need to lie to

your own people. The Ukrainians came like peacemakers, and then they kill us. They're destroying the whole Donbas region."

Then, a rebel officer drives up and asks us to stop filming. Before long, more join him. We're detained and driven fast to the rebel

stronghold of Donetsk.

UNIDENTIFIED MALE: Please move your camera.

MAGNAY (on camera): We were told we didn't have the right filming permits, which is difficult when the front lines move this fast. But after

a few words with the press office of the Donetsk People's Republic, we were released. Our escorts were courteous if persistent throughout. Their

advice: not to leave the city of Donetsk to avoid the front lines at night.


QUEST: Diana, listening and watching your report closely there, what I found extraordinary was the -- there was one point in your report, you're

doing your piece to camera, you're talking, and a car just drives past in the background. A modern car just drives past. In the middle of this war

zone, there is life going on in some odd sort of fashion. I find it -- the discontinuity extraordinary.

MAGNAY: That's right. And it really is striking. When you're driving around these roads, all the way through what is effectively the

front lines, where locals wouldn't know where the Ukrainian position finishes and the rebel one begins, but they continue to try, at least, to

maintain their daily lives. There's an extraordinary resilience amongst these people. You certainly see those on the roads around town.

But today, I spent the entire day talking to people in Donetsk, who've had their neighborhood shelled, who've had their friends killed, and as I

was saying at the beginning, the mood here is incredibly despondent and is incredibly against the government of Petro Poroshenko.

And whether they're encouraged to think that it is him and the Ukrainian army who are shelling these neighborhoods, whatever it is, they

do blame Petro Poroshenko for their terrible situation, now, Richard.

QUEST: Diana Magnay, who is there for us tonight. Diana, thank you very much.

Now, the situation, of course, has become extremely complicated, because now Herman Van Rompuy and the Europeans say that new sanctions, a

list of new sanctions, will be compiled within a week.

The EU leaders are ratcheting up the pressure, and there are fresh evidence that sanctions are hurting on both sides. Join me at the super

screen and you'll see what I mean. It's very, very complicated to see the full implications and ramifications.

Let's start with that manufacturing, and there you have the problem. Manufacturing output grew at the slowest pace I some 13 months, and all the

countries highlighted in fresh lows in August. New orders, new exports, they were all considerably lower.

And if you look at German GDP growth, you'll see what I mean. Here, you have GDP growth at the first quarter, quite strong, it keeps up, and

then it just falls right away in the first quarter of this year. A reflection, an indication of what's next.

Now, in Russia, the ruble has hit a new low against the dollar, and you can see the numbers quite sharply. What's interesting was we got a

slight resurgence of the ruble. This might have been when it looked as if things were going to get more peaceful, when it looked like there was an

agreement with Ukraine with Russia and those negotiations.

But in the last few weeks, as the situation has deteriorated, look over the summer, right the way down to the low point, the ruble is

seriously -- has seriously fallen off. And GDP, of course, the GDP numbers in Germany, which I was just showing you a second or two ago, confirming

the contraction in the second year.

The Bundesbank says its earlier forecast for the second half may have been overly optimistic. Angela Merkel admits more sanctions may do more

damage to the German economy, but she says she's -- not doing anything is simply not an option.


ANGELA MERKEL, CHANCELLOR OF GERMANY (through translator): There won't be a military solution to this conflict, which I have said from the

very beginning, and which I am deeply convinced about. This is also the view of the other EU member countries.

But we cannot accept Russia's behavior, and that's why I believe it is necessary to prepare such sanctions. The disadvantages, which could also

arise for us, are no way as serious as the disadvantage not to do anything about it.


QUEST: James Shugg is the senior economist at Westpac always helps us understand what's happening. So --


QUEST: Well, it's complex, so let's begin. Let's put the military to one side. Diana Magnay dealt with that. More sanctions ratcheting up.

What would they have to do now on the sanctions list to make a difference, as you best understand?

SHUGG: Look, my understanding is based on a document that was prepared by the EU Commission is that they're going to broaden the

sanctions on the ability of Russian firms to access financial markets in other parts of the world, in the EU in particular, to make it more

difficult for defense firms to raise capital, for example, or to list their stocks on European stock exchanges.

Of course, there will be repatriation measures, as we've heard from Russia. It's tit for tat, and no one wins in this. But as Merkel has

pointed out, there really is -- it's seen as the lesser of two bad options.

QUEST: But the amount of trade with Russia, yes it's considerable, but its not enormous when you put it in the context of intra-European trade

and even transatlantic trade. So, why are we seeing this disproportionate -- yes, go ahead, please.

SHUGG: I was going to say, the impact is much more than just trade with Russia. The uncertainty that's created. The what ifs. What if this

thing does escalate? We've seen orders within Europe fall very sharply in the last few months.

The UK manufacturing survey that was out today was substantially weaker, and it's because of this sense that the European economy is going

to be impacted, not just by what's going on in Ukraine, but by this increase in uncertainty, this concern that things could get worse. That's

the big issue.

QUEST: So we can tie -- let's not have any hyperbole here -- we can tie the -- this weakness in the UK, in Germany, the sort of contraction

that we're seeing, this is not rumblings on from the eurozone. It can be firmly attached to the Ukrainian situation?

SHUGG: I would argue that the contraction in Germany in the second quarter was more about very mild weather in the first quarter, boosting

construction, and that reversed out in the second quarter. You'll see in the third quarter, Germany will grow again, as will Spain.

But for countries like France and Italy, it's more problematic. They are just growing -- or barely growing at all. France has stalled, Italy is

going backwards. So, to lose even any small amount of growth when you're already doing nothing makes it -- it puts you into recession.

QUEST: So now, we really do come to the complicated question. What will the ECB do? Because they've sat on their hands, there's the question

of QE of some variant or some description. Inflation -- the latest inflation numbers, deflation is here in all but name. Surely they can't

wait any longer.

SHUGG: Well, I think they will.


SHUGG: Draghi -- sorry, Richard, but Draghi will allude to it, he'll talk about it, the press will hammer him in the press conference, but he

won't formally announce it, we think, until October, when BlackRock, the consultants who've had more time to pull together the statistics that are

needed to persuade the more reticent Germans that a quantitative easing program is not going to be inflationary beyond the extent they want it to

be. They want to lift inflation a bit.

So, I think he'll talk about it. It's going to be clear that it's going to happen, but we won't get the full details until October. And it

may not be launched until next year. Because really, where are the assets they're going to buy? They've got to get the tigers of long term

refinancing operations into operation, into the banks, so that banks --

QUEST: All right.

SHUGG: -- can lend money to the businesses, so the ECB can then buy those loans back off the banks and print more money.

QUEST: Sir, good to see you. Thank you, as always, for coming on.

SHUGG: Thanks, Richard.

QUEST: Now, still to come. This is an extraordinary story. Some of Hollywood's elite, not surprisingly, are furious after nude photos were

leaked online. Everyone now wonders how the pictures were released. After all, they were private. It's extraordinary. We'll talk about it in a



QUEST: Some of the world's most famous women are outraged tonight over a massive breach of privacy, condemning a hacker who has leaked nude

photos of female stars on the internet. The Academy Award-winning actress Jennifer Lawrence is one of them. Others who were targeted say the photos

were doctored. The pictures were allegedly taken from iCloud accounts.

The source is an anonymous user of the website 4chan. He or she says they may have many more photos and are willing to release the files for


Now, major technology companies are so far staying quite. Apple recently fixed a vulnerability in its iPhone find my phone feature that

could have allowed hackers to access. In a request for comment, Apple didn't confirm or deny whether their software was to blame.

The Hollywood blogger Perez Hilton initially posted the pictures with a censor. He later removed the images and wrote that he made a bad

decision and wasn't comfortable keeping them up. Mr. Hilton declined our offer to be interviewed.

Greg Day is the vice president and chief technology officer at cyber security company FireEye. He joins me now from CNN London. Greg, how did

these files -- how did these pictures get out? Because some of these pictures, according to Jennifer Lawrence -- or to some of these people,

they were deleted from computers years ago. So, how did it get out?

GREG DAY, VP AND CHIEF TECHNOLOGY OFFICER, FIREEYE: Well, I think traditionally, they would've just guessed users passwords. But the volume

of this means they will have either compromised the back end architecture

For example, earlier this year, FireEye actually found there was a vulnerability within the software that we use on phones, such as iPhones,

that allowed third-party apps to actually monitor in and get things like passwords or input on that device that may have allowed access to something

like their iCloud account --


QUEST: But the --

DAY: -- or actually -- sorry, go on.

QUEST: The thing that I find extraordinary is that not only they were able to do this or whoever did it, but the size and scale of it. It's not

one or two celebrities alleged to have got their pictures, they've got -- they've obviously done a full--throttle trawling for these people, which

obviously makes sense. But it -- if true, it exposes a great weakness that we should all be concerned about.

DAY: Well, and I think we see this more and more, which is we've had 10, 20 years of this very random cyber crime attack, and now what we're

seeing is something that's more targeted, a little bit more focused.

And this is pretty typical of what we see, campaigns, whether it is focusing on certain celebrities, maybe looking at the websites that they go

to and then trying to get them to almost self-infect. And then you've got that whole target audience.

Or whether it's trying to find their e-mail addresses and then start focusing e-mails at all of those different celebrities, seeing which would

maybe click on some sort of object for attachment that would start that kind of process of en masse compromise.

QUEST: En masse compromise. Let me just read you a quote from the actress Mary Elizabeth Winstead, who tweeted -- she tweeted, "To those of

you looking at the photos I took with my husband years ago -- years ago, in the privacy of our home, hope you feel great about yourselves. Knowing

those photos were deleted long ago, I can only imagine the creepy effort that went into this. Feeling for everyone who got hacked."

Now, but this is the point that you just made elegantly. It's the question of -- the scale of the compromise. Is it inevitable, then, that

we are all going to be vulnerable to this, unless we basically lock the computer up?

DAY: Well, the sad reality we see today is about 97 percent of corporate organizations around the world are compromises, and they're not

necessarily aware of it. And I think that's the challenge. Unlike when somebody steals your wallet on the High Street and immediately you know

it's gone, in the cyber world, things are a little different.

When we delete things, are they really deleted, or are they still there? When we back them up, when we delete it on our system, have we

deleted the copy on the backup, or is that still there up in the cloud? And actually, do we know when somebody else has access to our systems?

QUEST: You've elegantly made the point. Thank you, sir, for joining us tonight. Much appreciated.

Now, as our lives are becoming increasingly synched across various devices, various platforms and clouds, these types of hacks are becoming

more and more common. And for you and me, it is even harder than ever to keep personal data off phones and tablets that we use for work.

Think of it as the accidental sync. Samuel Burke now tells us how to avoid revealing what's intended to be private in unwanted places.


SAMUEL BURKE, CNN BUSINESS CORRESPONDENT (voice-over): It pops up when you least expect it.


BURKE: And certainly when you least want it, those risque photos, that job-seeking resume, the text message you'd rather no one else read.


BURKE (on camera): This is where the accidental sync can happen. You think you're in the privacy of your own home texting, Googling, Facebook

messaging. You put in one thing here, and then the Cloud has it show up in another unexpected, unwanted place.

BURKE (voice-over): Take Apple's iMessage. You're sharing with friends photos from last night's wild party, iMessage can simultaneously

display what you're sending on all your other devices, which of course you may have left out near prying eyes. iMessage may be dangerous, but it gets


LESLIE HORN, ASSOCIATE EDITOR, GIZMODO: I think Photo Stream gets people in the most trouble because it's something that's there on all of

your devices, and if you're saving photos, they're all going to come to your Photos Stream. So, it's pretty easy to forget that they're there.

BURKE: In this era of apps syncing your content and even your web browser asking you to log in, a simple search can come back to haunt you.

Back at home, you Google something personal on your laptop. The next day, that search appears on your work computer.

In this world where you never quite know what or where something will pop up, there's one piece of digital etiquette we should all abide by.

HORN: So, if you were showing me a photo and you hand me your iPad, I'm going to look at that photo, and I'm going to hand your device back.

Don't swipe.

BURKE: Because in the era of the accidental sync, you never know what will pop up next.


QUEST: Samuel is with me now from London. If it wasn't so personal and it wasn't so -- and the consequences weren't so serious, it would

almost be humorous. But I was just looking today, Samuel, at the sheer number of places that -- because I sync up with various different things.

Contacts. Pictures. I now have no idea -- I have no idea just how they're all syncing up anymore.

BURKE: Yes. And it's done in a lot of ways that people don't imagine. Some people do it on purpose, like you with apps. But some

people don't even realize, if I'm searching something here, it might show up there.

Incognito mode can be a very good friend of yours. If you're searching something, use incognito because you don't want it to show up on

your other devices.

But sometimes the biggest problem isn't even what you're doing yourself. If somebody sends you a picture, and you didn't know what they

were about to send, and all of a sudden, it pops up, and you delete it right away, it could, then, be synced on your Cloud, and then somebody

could hack in --

QUEST: Right.

BURKE: -- maybe get it from there. So, it's not only you you have to worry about, you have to worry about your friends as well and what they're

sending you.

QUEST: Right, but let's be -- let's cut to the chase, here. Because the Cloud is coming, whether we like it -- or not coming, the Cloud is here


BURKE: Already here.

QUEST: -- whether we like -- the Cloud is here whether we like it or not. So, with that in mind, how do you prevent a risque picture somebody

sent you, which has now gone into Photo Stream, which is now up in the Cloud, which is now on a home computer, which is on the iPad or a text --

how do you prevent it happening and still use the Cloud?

BURKE: Well, one way is take off preview mode on your phone. So at least if something is being sent between different devices, if a message

pops up, at least you'll see, oh, I have a message from somebody, or something's coming in. You can see who it's from, but not what it is. So

that way, if your devices are left out.

A lot of phone makers are also looking at device -- apps and different ways of having the device be a work app, a work side, and a home side. So,

you have one BlackBerry, one Samsung, and they have a way of dividing it. If you don't have one of those phones, you can use the Divide app.

So, you're using your work phone, and then you swipe over, and it also gives you a personal side, and those two can never be combined. That's a

great way to make sure at least those won't pop up when you're trying to do your work.

QUEST: The accidental sync. Samuel, thank you. Still to come on QUEST MEANS BUSINESS, Britain's unveiling a new step -- several, in fact,

to fight terrorism at home and abroad. Airlines are being asked to play their part, and there are serious questions and consequences for those who

don't comply. In a moment.


QUEST: Now, Britain's unveiled new measures in its fight against Islamist extremists at home and abroad. The proposed legislation is going

to affect passengers and airlines flying through the UK. Police are to be given power to seize the passports of suspected jihadists at the border.

And airlines that don't comply with the no-fly list or security screenings will not be allowed to land in Britain.

In the House of Commons today, the British prime minister David Cameron stressed British values must be respected.


DAVID CAMERON, PRIME MINISTER OF BRITAIN: Mr. Speaker, we are proud to be an open, free, and tolerant nation. But that tolerance must never be

confused with a passive acceptance of cultures living separate lives or people behaving in ways that run completely counter to our values.


QUEST: CNN's London correspondent, Max Foster, joins me now from Westminster. Max, really, we can sum this up with what the prime minister

said in his press conference the other day, that we'll be fighting ISIS and we'll be fighting this sort of Islamist extremist jihadists, as he said,

for years if not decades.

MAX FOSTER, CNN LONDON CORRESPONDENT: Yes, and he's really focusing on the response today, which is very much about movement, but it's fraught

with difficulties. But the sort of things he's considering, as you say, the airlines are being asked to hand over passenger details.

If they don't, they won't be allowed to land in the UK. When it comes to traveling to conflict zones, they'll have to hand over even more

information. That's one thing.

But then, focusing very much on the alleged jihadists, homegrown jihadists. If they're in the UK, they won't be allowed to move around as

much. They will also be relocated, that's what David Cameron plans.

If they head to the airport, currently, police don't have the powers to take their passports away, so they can continue. In future, he wants to

be able to temporarily take away their passports if they're planning to go to Iraq or Syria, for example.

And if they're returning from Syria -- this is a really controversial bit -- or from Iraq, he wants to be able to take their passports away

before they arrive, so the can't come back to the UK, even if they're British. That raises all sorts of legal concerns because you're taking

away someone's statehood.

He does seem to think that the legal advice suggest that he can do so if he only does so temporarily. These are only plans at this point, but

he's been very careful to get other political parties onboard, legal advice to allow him to go ahead with this with the confidence that the courts

won't block it.

And he's even gone to the extent where he wants to be able to challenge court decisions to block government decisions. He's thought

about everything this time, because you'll remember, Richard, a year ago, he tried to get involved militarily in Syria, and this House blocked it.

He doesn't want to take any risks again. He wants to be sure he can get things through before he takes it to the House.

QUEST: CNN's London correspondent Max Foster, joining us from the houses of parliament at Westminster.

In a moment, it dominates their life and haunts their dreams. For its front line health workers, Liberia is now Ebola country. Our report,

exclusive, next


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


NATO says it expects to form a new force that could deal with Russian aggression in Eastern Ukraine. The Secretary General of NATO says the

response force would include several thousand troops who could in their words travel light but strike hard if needed.

As you are hearing, the British Prime David Cameron has unveiled new measures to fight the threat from Islamic extremists. The powers would

give police major authority to track terror suspects and prevent them from traveling to or from Britain. And that includes ceasing passports at

borders. At least 13 people have been killed and dozens more were injured after a double car bombing in Bagdad. The two explosions came in quick

succession, targeting two commercial streets in a largely Shiite area of the Iraqi capital.

In Pakistan, the military was called in to protect a state-run broadcaster amid protests that have shaken Islamabad for weeks. The

demonstrators are demanding the Prime Minister Nawaz Sharif resignation. An official says he agreed to meet military leaders to discuss the idea of

stepping down temporarily. Others say reports of that meeting are baseless. The sister of Kenneth Bae, the U.S. citizen being detained in a

North Korean labor camp has called for his release after CNN aired an interview with him and two other American detainees. Terri Chung has

called on North Korean and U.S. officials to free Bae who is serving a 15- year prison sentence. They told CNN he was working 48 hours a week at a labor camp and said he is being treated humanely.

The World Health Organization is sending hygiene kits to fight Ebola in Senegal after declaring a top priority emergency. As the virus spreads,

Nima Elbagir, our correspondent, was in a medical team in Liberia enjoying a busy and dangerous work day. This is our exclusive report from what the

locals are now calling Ebola country.


NIMA ELBAGIR, INTERNATIONAL CORRESPONDENT FOR CNN BASED IN NAIROBI: The local county health team are on their way out. Gloves, gowns and

bleach are going with them. The locals here call this "Ebola country." For months, Alpha Tamba and his team have been called out every day to

suspected cases. Today, we're going with them.

A woman suspected of Ebola has died and they're going to bury her. To come anywhere near the body, we have to suit up as well. First, the team

leader sprays her house with bleach. Then, and only then, can the rest of the team enter. As the body is carried out, the family mourns from a

distance. This is the closest they'll get to a goodbye.


ELBAGIR: Everything that has come in contact with the body or with any surroundings that the deceased woman might have touched before she died

has to be thrown in and has to be disposed of. It is the only safe way. From the burial, the team traveled to Zango Town. Half the population here

have either died or fled, many not even stopping to carry their belongings. Why are these houses abandoned?

Casalee (ph) Johnson (ph) told us he lost his eight-month pregnant sister, his brother, niece, and many others. Too many to name.

Male: They died, they died. There were nine persons living in this house, seven of them died.

ELBAGIR: From Zango we go further into the jungle through a quarantine gate into nearby Barkedu. Some 8,000 people live here. No one

has been allowed to leave. This community has been completely isolated. Of the over 1,000 deaths from Ebola in Liberia, 20 percent have died right

here in this town. The town chief tells they're worried if the virus doesn't kill them, hunger and disease will.

This is what it's like across Lofa, locked in, afraid and alone. Sometimes the county health workers are called in to investigate a case,

and when they get there, they discover it's actually one of their own. This clinic had to be locked up after all the health workers in it

contracted Ebola. Only one of them survived.

ALPHA TAMBA, EBOLA RESPONSE COORDINATOR: It's heartbreaking. Sometime we go to bed with dream of nothing else but Ebola - Ebola, nothing


ELBAGIR: You have nightmares.

TAMBA: Yes. Yes.

ELBAGIR: In spite of the risks and the fear, Tamba says he and his team will continue to do whatever they can.

TAMBA: Stay at home or running away from Ebola is not a solution.

ELBAGIR: Nima Elbagir, CNN Lofa County, Liberia.


QUEST: Because the news never stops, and neither do we. This is CNN.


QUEST: Now just coming in to CNN, Apple has responded to the reports we brought you earlier that a hacker's use of iCloud accounts may have led

to the intimate photos of celebrities being leaked online. Apple is now saying - and I'm going to quote directly - "We take user privacy very

seriously and are actively investigating this report." That's all we've got from Apple so far - user privacy very seriously.

The weather forecast now - Tom Slater's with us at the World Weather Center. Good evening.

TOM SATER, METEOROLOGIST FOR CNN INTERNATIONAL: And hello, Richard. We're going to start in Iceland - give you a little update on our Icelandic

Volcano, Bardarbunga which had its third eruption in a week Sunday morning. Since then of course, later in the day was back to a level of orange. But

look what we have here - another volcano. This name is Askja. Askja is now yellow because maybe the magma underneath the earth's surface is

starting to slide toward that volcano. So we'll keep an eye on it. They had a terrible day weather-wise thought too. This is all snow, this is all

rain, as what was Hurricane Cristobal up the east coast of the U.S., made its way right over this area. Scientists that were taking pictures of the

lava field had to flee because of the sandstorm.

Look at this, this is the center of what was the hurricane. It's now extra tropical, but we watch it. Boy, they've had enough of everything.

Another area of low pressure sliding across Germany has triggered some heavy rainfall from Austria to southern Sweden.

We had pictures over the weekend - tremendous flooding in southern Sweden. Even in Copenhagen like this taxi driver - he's walking away

wondering what this is going to cost him, but heavy rainfall in that area to say the least, and now we're going to watch all that energy - even

though there's not much here. It's damp in Berlin right now, a little isolated shower or two passing across the channel. What we're watching is

most of the energy is going to be quite fierce where we may have some good flooding in parts of the (AUDIO GAP) countries. In fact, in the southeast,

already on the coast of the Adriatic, Southern Croatia - we had some waterspouts that were - already have been seen.

Bucharest 31 for your Tuesday, Rome 28, Paris 24, look at Madrid - 38. What a day they've had there. In fact, the heat in Portugal, from Bejas

(ph) 38 degrees to 41 in Cordova. So just incredible heat. They're waiting for fall. And they're waiting for the southern U.S. - 34 - these

are current temperatures in Dallas, 32 in Atlanta - steamy, humidity is high. But where they're meeting and clashing with drier air from Canada is

right along this front. At one point 40 million Americans who are looking at the threat for severe weather - it slides very quickly across the

northeast but the heat along with the dry conditions continue. California looking at the third year of a severe drought, the water levels continue to

fall there.

Here's the eruption of thunderstorms - will put it in motion. A few little watch boxes for severe weather. Haven't seen anything just erupt

just yet that would cause any flights to be canceled. We'll watch Detroit later on this evening, but then we're going to be watching areas like

Cincinnati to Pittsburgh and then slowly sliding toward the East Coast as we get into Tuesday evening. So large hail and a few isolated tornados.

The heat will continue with parts of the Southeast. Atlanta average of 31, you're looking at 34 by Wednesday. St. Louis, the heat up to 35, New York

as well, -- you're looking at 31, and now we're going to head down to the tropics where we have a pretty good chance of our next named storm in the

Bay of Campeche. This one looks like it'll slide across the government of Mexico and most likely produce some flooding there. So, a lot to watch

around the world - just a few continents for you there, Richard.

QUEST: Thank you very much. It took me four hours delay to get back from West Virginia --


QUEST: -- to New York. I was on assignment - four hours delay just because of those thunderstorms. Thank you, I don't blame you, but --

SATER: Nature's (ph) such a virtue.


QUEST: Oh, yes. The transfer window's about to close on football clubs across Europe. The Italian window closes in just moments' time at

the top of the hour. Teams are already breaking spending records. Let's get the latest from CNN's Christina MacFarlane who joins me from CNN in

London. It's a record.

CHRISTINA MACFARLANE, REPORTER FOR CNN INTERNATIONAL: Absolutely, Richard. We've seen incredible sums of money thrown around in this

transfer window - more so than we've seen in the entirety of last year's transfer season. As we stand now, just one - just over one hour until this

final deadline. We haven't actually seen as many last-minute deals as we expected here today, but the deals that have been done have been centered

around one club and one player in particular, Richard, which is Colombian striker, Radamel Falcao who we believe is expected to sign to Manchester

United in the next hour. It's come down right down to the deadline for this player. We saw his private jet fly into Manchester City United just a

few hours ago, and it's been a move here in the football world that has really shocked. I have to say. And that's because Manchester United have

really been spending the cash freely this summer. But they're still in desperate need of defensive support, and yet Falcao is a striker.

So it seems to be a bit of a strange move on their part. And also a strange move for Falcao. He's opting to leave a club Monaco who are in the

Champions League for a club who are not in the Champions League. Manchester United who also had a terrible start to the season , but such is

the pulling power of Manchester United even at this late stage -


MACFARLANE: -- that they command such a player, Richard. And -

QUEST: And -

MACFARLANE: -- and also one other -

QUEST: Yes, please do.

MACFARLANE: -- to mention - is that we were hoping to hear news of Arsenal as well this evening. Many of the fans hoping that they'll be

signing a striker, but Arsane Wenger seems to have done it again for the third year running - unless something happens - something dramatic happens

in the last hour here, they will be without yet again another striker and Arsenal fans are pretty upset about it.

QUEST: Christina, thank you. Joining us in London, Christina MacFarlane with that part. Now, records have already been broken in this

summer's windows. According to Deloitte, the total transfer spending in the Premier League was at a record $1.2 billion - even before today's

deadline deals. The looming club on the looming window forces clubs to act quickly and make moves at any cost. Simon Kuper is the author of

"Soccernomics" and a columnist for "The Financial Times," joins me now. Good evening, Simon. Good to have you - thank you for joining us this

evening. The logic - anybody watching - the logic of a transfer window - the tight, very febrile atmosphere that it creates, is it still justified?

SIMON KUPER, CO-AUTHOR, SOCCERNOMICS: It's very exciting, it makes for great television. What happens is a lot of buying clubs want to wait

until the last minute, so they go to the selling club and say 'we want to buy your guy now - there's only four hours left.' It makes it hard for the

selling club to line up another buyer and create an auction. So the buying clubs often hope to suppress the price of the player by going in at the

last minute. And that's why this day is such an exciting one.

QUEST: And coming on the back of a World Cup - because you've obviously looked into this in terms of the sensibilities of deals done in

years when there has been a World Cup. What have you found?

KUPER: Well, World Cup stars tend to be overvalued. Players who'd shown even if it was one goal or just a couple of moves see their transfer

price in place and often they can't justify it. Alex Ferguson said in his memoirs that with hindsight he shouldn't have bought players off the year

'96, and he said players often get themselves up for a tournament like that and afterwards they latch back. So we are seeing very big deals for

players who looked good in Brazil like Angel Di Maria who was bought by Manchester United for a record price.

QUEST: On a pure soccernomics basis, does it make sense to buy and sell players in this way, creating what as you've just said, is a very and

artificial auction or an artificial market?

KUPER: You have to do it in some way, and to some degree when a club buys a player, it's not really pursuing solid business sense. It's making

a show for its spectators, for its fans and for the media showing, you know, we are serious, we do mean business. So a lot of football is the

entertainment business. You can't keep having deals throughout the season it was decided because clubs at some point you need a successful (ph) team.

So they've gone for this world (ph) artificial cutoff point of September 1st which is already when the season has started. And, yes, it is very

confusing and it probably does inflate the price of (inaudible).

QUEST: Excellent. Thank you, sir. Appreciate you joining us tonight to -

KUPER: Thank you.

QUEST: -- put it into perspective.

KUPER: Thank you.

QUEST: Thank you very much indeed. Now, still to come on "Quest Means Business." Europe introduces new wheels on vacuum cleaners. Russell

says there's no need to blow a fuse. We'll be vacc-ing it up in a moment.



QUEST: Oh! It's never done - the household work always takes some time. Now, they say cleanliness is next to Godliness. Thank goodness we

haven't carpeted the whole studio up here all week. Europeans who live by that idiom rushed to stores this weekend. They are Hoover-ing up the last

of the high-powered vacuum cleaners. Under new E.U. regulations that came into effect today, vacuums that use over 1,600 watts are now banned.

So what's everybody getting excited about? It's no shock to the manufacturers as the ban was five years in the making. And it's just the

beginning of the E.U.'s drive to improve energy efficiency. The European Commission says banning high-powered vacuums would save enough energy to

power 5 and 1/2 million households by 2020. Jim Boulden spoke to Marlene Holzner, the European Commission's spokesman who said that powerful vacuums

can be just as good and they save money on the electricity bills.


MARLENE HOLZNER, EUROPEAN COMMISSION SPOKESWOMAN: We want to help consumers save money because we know that electricity prices will go up in

the future, and if consumers have vacuum cleaners, washing machines and other equipment which actually do really use less energy, they save money.

The second goal we have is that Europe as a whole saves energy because the energy you do not use does not emit CO2, and we have made a calculation

that because of all these rules which cover not only vacuum cleaners, but for 20 years we've covered also the washing machines and freezers. That

will really help us to cover one third of the energy savings we won't achieve by the next couple of years until 2020.

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: I'm sure you're aware this has not gone down well in the U.K., as most E.U. regulations don't go

down well here in the U.K. Are you surprised by that and have you seen that kind of reaction elsewhere? Or have people been preparing? After

all, we've known about this coming for five years.

HOLZNER: I believe there is a misconception, and that is that if you have a high voltage of vacuum cleaner, that also means that it has a lot of

power to suck the dust, but this is not the case. There's no automatic link. If you buy one which has 1,200 watt, you're spending less money on

your electricity bill and it can (inaudible) exactly same power to suck the dust as at 1,600. What also is something that citizens believe is that

they do have less choice because these products are out of the market. But what you will have with our regulation is that you will have an informed

choice. Yes, the 2,600 voltage are not there on the markets anymore, but if you go to a shop, now you will have labels. Labels classify each

individual model between A and G. A is the best, not only in terms of energy savings but also the best in terms of the power to suck in the dust

and also in terms of how noisy or less noisy a vacuum cleaner is.

BOULDEN: But aren't these -

HOLZNER: So the consumer is --

BOULDEN: -- labels self-regulated? I mean, aren't the companies deciding whether it's A to G? Who's checking that these labels are


HOLZNER: It's national authorities who have really the duty to check that in the shops. It's exactly the same system you have for all other

products that are regulated by E.U. regulations.

BOULDEN: But a lot of people here will say you just have to vacuum for longer because they feel that without more power, they will actually

not be able to pick up as much dust. You're saying that's wrong.

HOLZNER: Yes, we have used standardized tests. There are tests on the market that actually really help you to determine that how powerful a

vacuum cleaner is. These tests are used and you can compare easily. It has nothing to do with a feeling, it is a test, you can measure that and

you can measure and you can really prove that a 1,200-watt vacuum cleaner can be as powerful in terms of sucking as a 1,600-watt. That is just a



QUEST: What an extraordinary complicated business. Who ever knew vacuum cleaners were quite that exciting? Anyway, what it does mean, it

means you can't get a powerful vacuum cleaner, so you'll just have to put up with the one that you've got at the moment. @richardquest is where we

can continue our discussion when you and I are having our nightly business conversation. And do be assured I do follow closely what you're tweeting

to me and wherever I can, I will tweet back. It's @richardquest.

The markets (RINGS BELL) - the U.S. is closed, it is Labor Day which is the official end if you like. You can no longer wear white I'm told in

the Hamptons after today. I wasn't planning on going to the Hamptons anyway, and if I was, I might not be wearing white. But that's not the

point. The markets were up, they were up in Zurich, they were up in the MICEX and there were smidgeon gainses - smidgeon 'gainses'! - maybe I

should go to the Hamptons! The FTSE was up as was the Xetra DAX.

The amazing - what's interesting about those markets is shrugging off the rising tensions against Ukraine. Later of course we've got the ECB

later in the week and on this stimulus package. So, moving on. When we come back in a moment, a "Profitable Bro - a "Profitable Moment."


QUEST: Tonight's "Profitable Moment." The story of the celebrities whose nude photographs are now being bandied around the world should give

every one of us pause for thought. Not because our pictures may end up on the internet or there might be some scandal, but more seriously because it

raises the question of what happens with the cloud. In doing research for today's program, I suddenly realized - my contacts which are in my phone go

to the iClouds and then go somewhere else and then goes somewhere else, because of course we all want to make sure that we never lose any data if

the machine gets lost or stolen.

Add this to photos that go to Photo Stream which might then be synched with a computer, which might then be synched to somewhere else, and you

rapidly realize that once information, data, photographs, whatever - once it goes into a device and up to the Cloud -- you could rue the day in years

gone by. Just have a look, just think of where all your information is going, and then decide would you really like it to come back to haunt you

in six months or two years' time. The automatic synch will be the bane of our lives. And that's "Quest Means Business" for tonight. I'm Richard

Quest in New York. Whatever you're up to in the hours ahead, -- (RINGS BELL) - I hope it's profitable. I'll see you tomorrow.