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Quest Means Business

Volatility and Fear in Stock Market; Investors Feeling Extreme Fear; World Health Organization Warns Ebola Cases to Increase Dramatically; Lessons From Nobel-Winning Economist; Germany Cuts Growth Forecast; Russian Economy Feels Sanctions Impact; Toll of Russian Sanctions Cuts Both Ways; Leadership Lessons from Boston

Aired October 14, 2014 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(NEW YORK STOCK EXCHANGE CLOSING BELL)

RICHARD QUEST, HOST: The market gave away good gains on the session, negative toward the close, ekes out a small loss when all is said and done.

Volatility! Volatility! Volatility! That's the story of the day. It's Tuesday, it's October the 14th.

Fear is back. Markets reach peak volatility after late selling.

Germany says don't panic. Russian sanctions take hold, and Berlin denies it's heading for a recession.

And work now, start that family later. Facebook and Apple tell their women employees, we'll pay to freeze your eggs.

I'm Richard Quest, I mean business.

Good evening. The story continues, it's one of volatility and big swings for the US stock markets. Quite clearly, the volatility may be

back, but with this volatility is coming fear. Join me at the super screens and you'll see exactly what I mean.

We'll talk about the volatility index in just one second, but just look at how the day traded. After rising more than 100 points, pretty much

carbon copy of the last 24 hours or what we saw this time yesterday. In the last hour, the gains disappear, it slips negative, ekes up a bit, and

that is the story.

But the volatility index, how this reflects over several days and weeks, it's near the highest point in two and a half years. It's up 70

percent so far this year. Look at how we had a relatively peaceful and quite summer, volatility falling to remarkable lows. And then, this spike

in the last few days.

We'll go through the reasons at the moment. Alison Kosik is at the New York Stock Exchange and joins me. Alison -- I saw at 3:30 the market

head down. I wondered if we were going to have a repeat of yesterday. But the reason's pretty much the same.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Reason's pretty much the same. It kind of was a repeat from yesterday. Look, stocks really got a

strong start. We saw the Dow get as high as 150 points higher. And then, in the last half hour of trading, poof! All the gains just go away.

I talked to one trader about this, and he told me, you know what? As long as stocks continue repricing, and they are, there is going to be

volatility. That is really going to be the trend.

Now, it really started to pick up -- I'm talking about volatility -- picked up in July. But it really came to a head this month. But some

things to remember to put this in perspective, the VIX was double as much when the US was downgraded in 2011, and in the depths of recession in 2008,

it was quadruple.

So, while the volatility is a lot for Wall Street in this current environment, historically, we've seen much worse, and it wasn't that long

ago, Richard.

QUEST: The CNN Money Fear and Greed Index, which in the last few days has also hit sort of some very disturbing levels. I mean, fear and greed

disturbing necessarily in the markets by their very nature. But Alison, what's it going to take to put things a little bit more steady?

KOSIK: You know what? It's going to have to come from earnings for one. The guidance is going to have to be strong. It's also going to have

to come from that macro data. The data's going to have to be strong, too. And in some cases, depending on who you talk to, they want to see earnings

outpace the data, depending on which you put your weight on there.

But that's really going to be -- that's really going to be the lynch pin to getting this market back on its feet. But what you're seeing is a

repricing.

Talking with these traders today, they said there's been a lot of technical damage done in the past week or so, and you're seeing the market

try to find its footing, and you're going to see a lot of volatility while the market tries to find its footing again, Richard.

QUEST: Alison Kosik with the technical side, the market side, from the New York Exchange. Away from the technicalities of it, what we're

seeing, both Europe and in the United States, are markets responding to a cocktail of risks. Let me show you what those cocktails are.

First of all, we have the rumors and the news about -- and the warnings about the spread of Ebola. Now that, of course, has made things

extremely uneven, questioning the rate of growth in Africa, the horrific numbers that we are seeing.

In Europe, we are seeing fears of declining growth and uncertainty about the best way to fight it. German numbers were worrying, growth has

been reduced. We know PMI numbers are lower, the market is extremely unsteady on European growth.

Worries about the effect of sanctions and counter-sanctions with Russia, as regards to Ukraine, particularly as it relates to Germany. And

in Iraq and in Syria, the rapid rise of ISIS and the plummeting price of oil.

Throw into this very toxic cocktail, China over at the far corner, with China's slowdown after years of strong growth. Combine all the

factors together, and that is the word that clearly is what's driving the markets at the moment: fear.

Diane Swonk is chief economist at Mesirow. She joins us now from Chicago. It's about fear, but I wonder, Diane, how deep is that fear? Is

it entrenched yet?

DIANE SWONK, CHIEF ECONOMIST, MESIROW FINANCIAL: Well, I don't think it's entrenched yet, but certainly it is affecting markets. The question

is, how much will it affect the economy?

And the issue there is the strong dollar has a leg in it, and so the effects to the dollar in terms of its negative consequences on both

disinflationary -- deflationary risks and on the US economy are 12 to 18 months down the road.

The flip side, the sort of silver lining to this horrible could you just described, which you described quite eloquently, is that, of course,

oil prices are plummeting, and 2.19 on the long bond in the US. We've got mortgage rates plummeting again, and mortgage applications for both

refinancing and actual purchases are picking up.

So, the silver lining is, it could be a little more growth today as consumers get a lot more disposable income from those lower prices at the

pump. And most consumers do not anymore hold stocks like they once did.

QUEST: But that only leads to a bifurcation or a divergence of economic growth between the US, with those points. I'm looking now at your

themes on the economy that you published yesterday.

Talking about Europe, you say, "Mario Draghi's promise to do whatever it takes, the markets are starting to realize that he can't do it legally

or politically." Well, since "do whatever it takes" was the silver bullet, has it now been found to be full of paper?

SWONK: That's exactly right, and I think that the emptiness of his remarks -- for a long time, I've heard my friends here in the US that are

in the Federal Reserve say, "How can he say all this stuff without backing it up? The proof is in the pudding."

Well, for Europe, there is no pudding, and they're hungry now. And I think that's the key issue is that markets are finally realizing -- it's

funny, I saw someone say, well, we've got to replace Mario Draghi. It's not Mario Draghi that's the problem. It's the system that's the problem.

The European Central Bank doesn't have the tools that it needs currently, the institutions that Europe needs, to defend the euro --

QUEST: Right, just --

SWONK: -- in the way that it should.

QUEST: Don't you find it extraordinary six years after, yes they've got the two-pack, yes they've got the four-pack, or whatever it is, or the

six-pack, and they've got -- they're moving towards a single supervisory and a single resolution. But after all these years, you're basically

saying it's still dysfunctional in the way it operates.

SWONK: It's still chewing gum and rubber bands. This is still not a functional currency zone, and that's what's being revealed today. And the

bet was, it was always a put on Mario Draghi being able to break the law and do what ever it takes, and an Angela Merkel delivering Germany to back

up the rest of the bonds in the region, and that's not what we're seeing right now.

QUEST: All right.

SWONK: In fact, we're seeing push back.

QUEST: So, dollar. Because once we talk about the dollar, we're into the deep weeds of technicalities and fundamentals. Now, that stronger

dollar, based on better prospects for US economy and higher interest rates, it's good for inflation, because obviously it brings things in at a cheaper

price. But it's bad for exports.

SWONK: And it's bad for a Federal Reserve that's running too cool on inflation, from its prospectus, right? This is a Federal Reserve that

today we heard John Williams say maybe we're not done with quantitative easing. If we have to, we'll do that again.

So, clearly, disinflation, lower inflation, and deflation fears are out there because of the stronger dollar, the lags in the effects of the

dollar, and what it means down the road --

QUEST: Right.

SWONK: -- in terms of can we be Atlas to the world? Our consumer -- it doesn't have the braces on its back it once did of consumer credit to

keep the world going.

QUEST: In a word, your forecast, now, for first rise in US rates?

SWONK: I'm still betting late in the third quarter, and that's going to be very gradual.

QUEST: Thank you very much. Lovely to see you, as always. Thank you so much. Diane Swonk joining us --

SWONK: Thanks, Richard.

QUEST: -- from Mesirow Financial. Now, something you may have missed in the course of your busy day. The World Health Organization is warning

that by the beginning of December, up to 10,000 people in West Africa could be catching Ebola every week.

Now, so far, there have been more than a dozen confirmed cases in the US and in Europe. This is a CNN graph showing you exactly where things

are. It includes patients who've recovered and those who are in treatment.

So, you've got the recovered in the UK, Norway's in treatment, you've got these cases in Germany where you've got one of each. France we know

about, Spain, you're familiar with what's happened there, and the United States has a geographical spread as well.

Stopping the outbreak will take doctors, drugs, drugs, and dollars. One thing to note: Mark Zuckerberg has said -- he of Facebook said he will

donate $25 million to the US Centers for Disease Control Foundation. The Facebook founder says his donation is minuscule compared to the billions

that will be needed if this goes -- the epidemic goes unchecked.

On Facebook he wrote, "Our problem right now is that most people, including government leaders, don't realize we are at such a critical

turning point."

Western sanctions against Russia have made for some strange bedfellows. European business leaders and the Kremlin suddenly find

themselves aligned on one issue, and that's next. It's on QUEST MEANS BUSINESS, Russia, sanctions, and economic growth.

(RINGS BELL)

(COMMERCIAL BREAK)

QUEST: Welcome back. Time for an economics lesson, and the lesson comes from the Nobel Prize winner, Professor Jean Tirole, who we'll be

listening to today, and who will be covering a variety of issues. We're going to start with the first one, which is privatization.

(WRITING ON CHALKBOARD)

QUEST: We're going to hear from Jean Tirole, who has spent the best part of 30 years studying how small number of large firms can dominate the

markets that they cause, especially when they are privatized. Well, I asked the good professor, the Nobel winner, to explain what has changed

since he started suggesting how government should respond.

(BEGIN VIDEO CLIP)

JEAN TIROLE, 2014 NOBEL ECONOMICS PRIZE LAUREATE: It's true that the conception of industry intervention by the government has changed, so we

don't see the government as intervening into production nowadays.

We seeing the government as being some kind of referee who is going to enforce the rules of the game so that anti-trust is going to allow fair

access to the bottom next. That's regulation, so we think about, for example, in telecom, the access to local loops, the access to the power

grid for electricity, to the tracks and stations of the railroads.

And what the government does is basically to be a regulatory authority, which is independent and defines the rules of the game, and then

also checks that they are obeyed.

(END VIDEO CLIP)

QUEST: Privatization and the whole question of monopoly may have been the reason why he won the Nobel, but the important thing is, his work had

real, live, practical benefits and effects for the current economic thinking. This was real economics, which he taught us about.

(WRITING ON CHALKBOARD)

QUEST: Which is better than my handwriting. Those real economics, very different from the theoretical economics of many who usually win the

Nobel. He says real and theoretical are part of the same food chain.

(BEGIN VIDEO CLIP)

TIROLE: It's a food chain, and we have to think. And I learned at MIT, we have to think as different fields in economics as being interlinked

and feeding each other. That's my view of economics, and it's not a series of fields which are disconnected. It's really people who should be

working, working together to achieve the final goal.

(END VIDEO CLIP)

QUEST: Privatization, real economics. It may have got him the Nobel, but what everybody was concerned about in the last few days are his views

on his home country, France.

(WRITING ON CHALKBOARD)

QUEST: Which, as you will well be aware, is about to put forward a budget to the European Commission which many believe will be rejected

because of the lack of budgetary discipline and the high deficit that it's putting forward.

Now, the professor, who's won the Nobel, is not keen to get involved in politics, but he does has some strong views on his native France.

(BEGIN VIDEO CLIP)

TIROLE: My wish is that France will change its attitude. Less -- the parties should get together, or at least not criticize each other too much.

I want to see the reforms which have been made in Germany. In Germany, that was by the socialist and then the right-wing government of Angela

Merkel basically confirms those reforms did happen.

It happened in Sweden and many countries, you need a bipartisan effort to solve those extremely difficult problems. And I think France, actually,

has very good assets, so it should be able to do it.

So, I'm not pessimistic, but for that, we need to have a different attitude, and we need for political parties to get together and really say,

no, we have to tackle those issues before things -- before it's too late.

(END VIDEO CLIP)

QUEST: Professor Jean Tirole, privatization, real economics, and France, who won the Nobel. Now, this already gloomy prognosis for Europe's

biggest economy, take a look at the numbers that we saw on this.

Germany growth is now forecast to be down to 1.2 percent. It's a reduction from 1.8 percent. Next year's forecast was also cut as well.

The officials in Berlin cited geopolitical crises -- Ukraine, for a particular one. The German economy minister, despite this reduction, says

don't panic.

(BEGIN VIDEO CLIP)

SIGMAR GABRIEL, GERMAN ECONOMY MINISTER (through translator): Ladies and gentlemen, there is therefore absolutely no reason for alarm. There is

also no reason for the German government to abandon or change its course on economic, financial, social, or labor market policy.

(END VIDEO CLIP)

QUEST: The reason given, of course, was the sanctions on Ukraine. Germany as a major exporter, the principal exporter in Europe, is being

very badly hit. The German machine is being hit, and also, as other countries in Europe are being hit, so Germany is, too.

What about the -- from the other side of the equation, from the eastern side? Russia's finance minister, Anton Siluanov, told me his

country is also hurting as a result of Western sanctions.

(BEGIN VIDEOTAPE)

ANTON SILUANOV, RUSSIAN FINANCE MINISTER (through translator): Of course we are feeling the impact of the sanctions. First of all, it

concerns the limits on the inflow of capital for projects which were previously agreed and were being carried out.

Undoubtedly, the sanctions are bad not only for Russia, but for the countries that introduced the sanctions, because these countries made money

out of Russia, invested resources in Russia, and Russia also used this money to develop its economy.

But I would like to stress that everything will be fine. Russia still has the strong balance of payments and a budget surplus. I want to stress

that these shocks that we have experienced have not fundamentally impacted the situation in terms of budgetary performance and macro economics.

QUEST: So, on that question, can Russia avoid a recession either at the end of this year or into next if the issue is not resolved? Will you

avoid recession?

SILUANOV (through translator): You know, the speed of economic growth has slowed down, and we expect the slowdown to continue next year.

However, this is the same trend that the IMF is also planning for, as we heard during our discussions of the development of the global economy. The

speed of growth in the global economy is also slowing.

We need to stimulate economic development by stimulating small and medium-sized businesses, by creating the conditions to support business.

This is what we are doing now.

(END VIDEOTAPE)

QUEST: There is a difference between the politicians and the real economy. The man in the middle of it all is the Russian foreign minister

Sergey Lavrov. CNN's Matthew Chance now reports from Moscow.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Russia's foreign minister doesn't much like being questioned, especially on

the sensitive issue of sanctions.

CHANCE (on camera): Mr. Lavrov, any expectations that these sanctions may soon be lifted?

SERGEY LAVROV, RUSSIAN FOREIGN MINISTER: Introduce yourself.

CHANCE: Yes, sir, Matthew Chance, from CNN.

LAVROV: Nice to see you. I'm off. I'm late.

CHANCE (voice-over): Late after this speech to European business leaders. Russia is pressing hard for Western sanctions, imposed over the

country's actions in Ukraine, to be eased.

LAVROV (through translator): Sanctions are harmful, and they're unlawful. Brussels' decisions, particularly on imposing sanctions against

Russia, were taken under America's strong pressure.

CHANCE: But Russia's trade relationship with Europe far outweighs that with the United States, and economic sanctions are cutting both ways.

Russian and European economies are both being hit. It means European businesses and the Kremlin are at least here on the same side, calling for

sanctions to end.

FRANK STRAUFF, ASSOCIATION OF EUROPEAN BUSINESSES: We have called for, let's say, diplomatic measures, diplomatic talks in order to solve the

crisis. We are generally in favor of de-escalation, and you also see that sanctions are not helpful in de-escalating the situation.

CHANCE (on camera): Do you believe that diplomatic talks would be helpful in de-escalating the situation, or indeed, in returning Crimea to

Ukraine?

STRAUFF: Well, I suppose at this -- what else can we do than talk in diplomatic circles?

CHANCE (voice-over): At the end of this month, European Union officials say they'll decide whether to ease their Russian sanctions or

keep them in place. But Russian officials aren't holding out much hope.

CHANCE (on camera): Do you accept at all that it's Russia's actions that may determine whether the sanctions are lifted or not?

(LAUGHTER)

CHANCE (voice-over): Not an admission, it seems, Russia's foreign minister is willing to make.

Matthew Chance, CNN, Moscow.

(END VIDEOTAPE)

QUEST: We're going to return to the question of fear. When we come back, Boston's longest-serving mayor has some strong views on that

question. Fear is power, he believes. "I owed it to my city to keep fear alive." He will explain what he means after we come back in a moment.

Fear.

(COMMERCIAL BREAK)

QUEST: We've already had our economics lesson tonight, so now we go from the economics department to the government and politics for a lesson

in leadership and power, and it comes from this man.

For two decades, Thomas Menino oversaw the transformation of Boston. After beginning his final term, he didn't want anyone to know he wouldn't

be in City Hall much longer. He put it eloquently and elegantly: "Fear is power. I owed it to my city to keep fear alive."

The power would be concentrated in his own hands, not those of appointed bureaucrats. He's written that city planning was too important

to be left to the city planners -- too important.

And when terrorists set off two bombs at the Boston Marathon's finishing line, Menino, who was in hospital, checked himself out and spent

the next week overseeing relief efforts from a wheelchair. With the manhunt for the suspects still ongoing, the mayor pulled himself up to

speak to his constituents.

(BEGIN VIDEO CLIP)

THOMAS MENINO, FORMER MAYOR OF BOSTON: Nothing can defeat the heart of the city. Nothing. Nothing will take us down, because we take care of

one another. Even with the smell of smoke in the air and blood on the streets, tears in our eyes, we triumphed over that hateful act on Monday

afternoon.

(END VIDEO CLIP)

QUEST: Mr. Mayor joins me now. And sir, we thought that you might feel a little more comfortable if we made some adjustments. You'll feel

more at home. You're also suffering from a bit of a sore throat --

MENINO: That's right.

QUEST: -- at the moment, so apologies for that. Now, when you say "fear is power," I can understand that in a theoretical sense, but you put

it into practice, didn't you?

MENINO: Yes, because somebody has to be in charge of the city. If you want to turn it over to all the bureaucrats, nothing would get done.

Who should make the ultimate decision? The mayor of Boston had to do that. That's who I was for 20 years. I made sure that things got done. If we

let the bureaucrats -- they're having to (inaudible) every day.

QUEST: So, the bureaucrats -- did you feel the bureaucrats frustrate your efforts, or are they just being bureaucrats?

MENINO: Both. Some of them were restraining my efforts, some are just bureaucrats, they just want to keep going and keep going -- forever.

If you want to get something done.

QUEST: You were mayor -- you were at the top for 20 years. You were the mayor for decades, too long, perhaps, some might say.

MENINO: No, it's not too long. I thought I did the job well for 20 years. The only reason I left it is because I had a schedule of about 18

hours a day. I had a mayor's schedule, when you're at 9 or 10 hours. I couldn't do it Menino's schedule. That's why I left the job as mayor.

QUEST: How does somebody know when it's time to leave a job like that?

MENINO: Well, your instincts. Your instincts tell you that.

QUEST: But if you've got enough people saying yes, Mr. Mayor, no, Mr. Mayor, and as they used to say about Margaret Thatcher, if the traffic

lights always turn green when you get to them, doesn't that become a very heady cocktail?

MENINO: Of course. You'd certainly want to stay there forever, it's an advantage. But you have to understand, what's the advantage to the

city, and can you do the job that's necessary to get it done? That's what I find. I had the will, I didn't have the energy.

QUEST: We're seeing, some would say at the moment, a lot of politics, and I'm thinking about in the Ebola case as well, a lack of leadership, a

lack of somebody taking command. You took command as much as one could after the Boston. You led your city. Do you think the world at the moment

is lacking real leadership?

MENINO: I think we're lacking real leadership in major points. Somebody has to be in charge, say we're going to do this, let's get it

done. Let's not have all these discussions, bring all these experts in, nothing gets done. If it's TV time, we got to show a great thing. How do

we get things done?

Somebody has to show strong leadership, make tough decisions. Sometimes those decisions aren't the most popular decisions, but it's

getting the job done.

QUEST: Tough decisions, getting the job done. Sir, thank you very much --

MENINO: Thank you very much, thank you.

QUEST: -- for joining us tonight, I much appreciate it. Talking of tough decisions, degrade and destroy. That's the United States' plan to

take on ISIS. For the bystanders on the ground, the cost of the mission is all-too-painful. You're going to hear that after the news headlines, which

is next.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There's more "Quest Means Business" in a just moment. This is CNN and on this network the news always comes

first.

ISIS fighters have surrounded one of the largest airbases in Iraq according to a police captain in the Anbar Province. Sources say the

militants are preparing to launch an attack on a military air base close to the city of Hit. Police in the region say ISIS fighters are getting into

position using rocket launchers and tanks.

The World Health Organization says there could be up to 10,000 new cases of Ebola a week in West Africa by the end of the year, and the Ebola

epidemic brought a comment from President Obama today that he's personally lobbying countries to help the dealings with the disease at its source.

President Obama also said the resources are surging into Dallas to learn how a nurse who had treated Thomas Eric Duncan managed to contract the

disease herself.

After five weeks of speculation about his whereabouts, new photos of the North Korean leader Kim Yong Moon have surfaced. The photos show the

leader walking with a cane. The state media said he was giving field guidance. The North Korean leader has not been seen in public since early

September.

The second day of the Oscar Pistorius sentencing hearing has ended with defense witnesses arguing that prison is an inappropriate punishment

for the disabled Olympic track star. The double amputee was convicted of culpable homicide last month for killing his girlfriend Reeva Steemkamp.

In Mexico, hundreds of protesters have set fire to a local government building. They're angry over the search for missing students, 43 of whom

disappeared two weeks ago. Witnesses have accused the police of orchestrating and participating in the shootout involving the students.

The police denied the claims.

Fears over weak economic growth that we were talking about earlier in the program have sent oil prices to their lowest level in almost four years

(RINGS BELL). Look at the barrel of Brent - it's not $83 a barrel, and the International Energy Agency is predicting we'll use much less oil this

year, it's cut its forecast and demand by 2015 by more than 20 percent. The IEA says OPEC countries are still not planning to ease up on

production. The only oil producer which has been forced to scale back is ISIS where U.S.-led airstrikes have drastically cut the amount of oil that

the militant group's able to produce - around 20,000 barrels a down. It's down heavily - it was at 70,000 a day over the summer. Locals caught in

the crossfires are sorry to see vital infrastructure destroyed, no matter who benefits. CNN's Arwa Damon is close to the Syrian border in Turkey.

(BEGIN VIDEOCLIP)

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: The intent was to take out one of ISIS' cash resources - oil. Bombing the refineries ISIS

controls. For Saad, it was like watching his child being killed.

SAAD ALSHAREA, PETROLEUM ENGINEER, TRANSLATED BY DAMON: "When I left I could have blown them up, but I couldn't bring myself to do it. I built

them," he says.

DAMON: The petroleum engineer had built them from scratch. He fled when ISIS took over. Near here, he says, he used to produce around 4 to

600,000 barrels of crude a day. When free Syrian army rebels took over the fields, a combination of damage to the wells and lack of expertise saw

production plummet 90 percent and the refineries -- far away -- were in regime-controlled areas. So Saad built his own.

ALSHAREA, TRANSLATED BY DAMON: "When the refineries were under the control of non-ISIS groups, they helped the population. We delivered

refined products for free to the medical clinics, the water stations," he tells us.

DAMON: Crude was also sold locally, refined and cobbled together, so- called civilian refineries like these.

ALSHAREA, TRANSLATED BY DAMON: "Three quarters of a barrel is filled with crude - to here," Saad explains. "The crude is heated, the vapor

rises through pipes running underground, cooling and condensing the vapor into the various crude oil byproducts. And so the population in rebel-

controlled area got by." "Interestingly," he says, "when it came to the gas field, a deal was done with their enemy - the Assad regime." "The

Conoco Gas Field sends the gas to the regime's (Junta) Station," he tells us, "and the station in return sends electricity back to the areas under

rebel control. That arrangement," he says, "still holds -- even with ISIS taking over."

DAMON: Afta Dahfmans (ph) tried to control one of the smaller fields - in Deir Ezzor, lost to ISIS after pitch battled some four months ago.

Abu Omar al-Shishani was in charge of the battle he recalled.

AFTA DAHFMANS (ph), TRANSLATED BY DAMON: "Al-Shishani, the notorious feared ISIS Emir. He came to see how the field was operating. He put

guards and closed off the whole field, leaving only one entrance," Afta Dahfmans (ph) says. "He also put an accountant in. They even have a

minister of oil - he came as well. He's Egyptian." "ISIS," he says, "doubled the price of crude, selling to traders from Iraq and traders who

smuggled to Syrian regime and neighboring Turkey."

DAMON: Afta Dafmans (ph) arrived in Turkey, a week before we met, shortly after the refinery at his field was hit by coalition air strikes.

But bombing natural resources themselves would have devastating consequences in Syrian - for the environment and the population which

leaves ISIS with the crude and plenty of it. Arwa Damon, CNN Urfa, Turkey.

(END VIDEOCLIP)

QUEST: Shows the complexity in the whole situation in terms of bombing the resources being used by ISIS to fight them during its war (ph).

He's fighting fire with fire in a moment. The man on this website says he didn't invent Bitcoin. He's just happy to use it to fund his fight with

the magazine which says he did. It's complicated and we'll explain. (RINGS BELL).

(COMMERCIAL BREAK)

QUEST: The man who "Newsweek" said created Bitcoin is now preparing to sue the magazine, and of course he's using a bitcoin to so do. He's

Dorian Nakamoto and he's using this website to generate funds for his legal fight. The usual forms of payment are included as well as Bitcoin. In

March, "Newsweek" named him as the elusive founder of the crypto currency. It's a claim that Nakamoto has strongly denied. The magazine's neither

retracted the article nor responded to our requests for comment. Bitcoin today traded at $402 a bitcoin. And it opened at $388, it went as high as

$409 at range. It's closed up 3.6 percent.

What exactly is Bitcoin? Bearing in mind earlier this year it was up at $1,200 each. I sat down with the author Jeffrey Robinson. He's just

written "The Naked Truth About Bitcoin," an excoriating account of this virtual currency. I asked him why he thinks Bitcoin is a fraud.

(BEGIN VIDEOCLIP)

JEFFREY ROBINSON, AUTHOR, "THE NAKED TRUTH ABOUT BITCOIN": I am very doubtful about the pretend currency aspect of it which gets traded like a

pretend commodity. And the - and that section of the bitcoin community who are the delusional lunatics - the anarchists - who say that bitcoin is

going to take over the entire planet.

QUEST: Right, but strip out the delusionals and you do have something that could function - assuming proper regulation which they don't want -

but you do have something that could function as a virtual currency.

ROBINSON: Well, virtual currency is the future - there's no doubt about that, and digital payments are the future. Bitcoin is not that.

Bitcoin is a step along the way and will eventually disintegrate in atrophy. But, yes, digital currencies and digital payments are the future.

QUEST: From your research in your book, where did Bitcoin go wrong if the original block chain, the original mining, the original algorithm is

genius?

ROBINSON: Yes, the original genius of Satoshi is this block chain on which you can do all sorts of things, and in the Silicon Valley, they are

building businesses off the back of it. When Bitcoin I think went wrong, is in the hype and the misinformation about this pretend currency. You

have to put it all into perspective. They will tell you there are five (AUDIO GAP) wallets in the world - Bitcoin wallets. What they don't tell

you is most of them are empty. There are probably only about 250,000 people holding on to Bitcoins. And that's me who says that, that's

Coinometrics who track these things.

Now, 250,000 people globally - there are more people who are members of the Kuwait Airlines frequent flyer club than holding Bitcoins. And if

you look at Bitcoin as a world currency, this currency that is making the dollar tremble and governments wince with the future pain. You look at it,

you understand that as a currency, it's almost negligible against anything. It can't stand toe-to-toe with the non-convertible Cuban peso.

QUEST: But, even if you're right - and you're now being excoriated as a critic of Bitcoin.

ROBINSON: By the lunatic delusional people who have built this into a cult, and you can't ever criticize somebody's religion.

QUEST: But they just simply say you don't understand the potential. You are unenlightened, Jeffrey.

ROBINSON: No, I understand the potential. What I don't grasp and what I don't buy into are their delusions. It is not going to take over

the world. There is - transactionally there are fewer companies actually put Bitcoin on their books and keep it and hold it than there are piano

tutors in Canada. You know, there is no there there. When you pull the curtain back, you see with Bitcoin, the pretend currency, what you see is

not what you get.

QUEST: So why has it become perverted, if you like? What Toshima (ph) must have started as a really good idea -

ROBINSON: (Inaudible) regulate it.

QUEST: -- where did it go wrong?

ROBINSON: The get rich quick kids. They got into it and everybody saw a huge profit. You've got people like the Winklevoss twins who are

pumping this thing because they're now holding 1 percent of all the Bitcoins. They're pumping and they're saying $40,000 a coin. Well, the

theory of the greater fool comes in here. You know, if you've been foolish enough to buy that many, they only way you're going to get out is to find

greater fools to buy it from you. That's where it went wrong.

(END VIDEOCLIP)

QUEST: Jeffrey Robinson on the Bitcoin. There was very little evidence of foolish impetuosity on Wall Street on Tuesday. The mood as

we've been talking about throughout the program is cautioned, and most particularly, fearful if you take a look at how the Dow ended. Well we

need to take a moment to meet real investors. Forget the Bitcoiners, forget the day traders. It once took teams of traders - specialists,

runners, market makers - call them what you will - investment bankers - to do what one person can do at home with a simple computer. With this, you

are your own brokerage. Isa Soares met an investor for today's "Future Finance."

(BEGIN VIDEOCLIP)

ISA SOARES, REPORTER AT CNN INTERNATIONAL: Robbie Burns took up share trading 13 years ago. He's one of a growing band of investors who decided

to do it himself.

ROBBIE BURNS, SHARE TRADER: I just literally started trading and in that year I made more money trading than from my job. I thought, OK, I

want to give it a go -- in 2001. I've never had a boss since and it's been fabulous for me.

SOARES: Boss-less and office-less, Robbie trades from the comfort of his Riverside home. He's made over $1.6 million.

BURNS: What I'm looking for is either a really good company profits are going up or really, really bad company with profits going down and it's

in a really bad way. But again, I always have a failsafe stop loss in place if I get it wrong and it goes down, I get out fast and take some

loss. Very rarely do people go short-term shares - it's very easy to do these days. I find that at the moment I'm making as much money from

betting on bad companies to go down than good companies to go up.

SOARES: I mean, you've been in this industry for - you've been doing this how long?

BURNS: 2001.

SOARES: For quite a while. What do you - what do you think - has changed?

BURNS: Oh, in the last three or four years it's robots that've take over. So, if you're trading short-term, what you're up against is

effectively -- if you've seen a casino - effectively robots - so you versus robots, and these robots are very good. And in small traders now at home,

you can have access to something called 'level 2' so you can see the robots in action. You can see what other people in the marketplace are doing

behind the share price. Some people are buying, trying to get their robots near the exchange. Their robot gets in there 20 seconds quicker than

another robot, and it's a crazy race. And at the moment, it looks like the (inaudible) want to make a TV film where all the robots just kill each

other.

SOARES: As it is, robotic trading, this is the way we're going now - is this how you see it?

BURNS: I see that more and more because in 1998 for example, it was just market makers so you'd have someone sitting in a bank who would give

you a price. Now you can get a price from market makers but also everybody else in the market is quoting a price. If I want to go straight to the

market and quote a price, I can, sometimes do. So it's really - it's you against me as well as us against the banks. So it's really - it's actually

people power in a way.

SOARES: What would you say are the risks?

BURNS: Well, the risks are gambling. You go in all excitedly and you trade like crazy and you want to beat your machine. What I say to people

is it's not a hobby. If you're going to run it at home, it's a business. And as in any business, you want the profits and not the losses, so get rid

of losses quickly. Think to yourself you'll Mr. Spock from Star Trek. You got no emotion and that's it. You know, you're looking at a company

completely unemotionally. Emotions get in the way of making money trading.

SOARES: Where do you think it will go - trading, kind of trading from home? Where would you like to see it going?

BURNS: I would like more and more people to be able to do it, but the more robots you have in, the harder it gets. And what you might find is

that people will gradually move into social media - obviously Twitter and Facebook - people will gradually get together and form trading clubs.

Maybe even five or ten years - power of the small investor trader will be much bigger than it is now when they get together in big groups.

SOARES: Do you envisage newer technology coming in?

BURNS: I wonder whether there'll be giant trading exchanges where people bet on shares and currencies as well as they do on sports. So it

would be you versus me, so you give me a price, I'll give you a price, and we'll be -- sort of robot spot each other actually (inaudible) people.

Maybe we can just do deals between us on social media - maybe it'll go that way. That'd be quite interesting idea for the future. OK, Isa, let's see

how competitive you are.

SOARES: Tactics, a competitive spirit, keeping emotions at bay are what Robbie hopes will keep him ahead of the game in the changing world of

share dealing.

BURNS: I think you're going to make a good trader honestly.

(CHEERS)

(END VIDEOCLIP)

QUEST: All of which reminds me of the 19 - early 1990s when it was the .com boom, everybody was day trading and many people lost their shirts

and walked. It's about free food. Concierges, nap pods, the perks of working for Silicon Valley companies. And now special insurance coverage

that some critics say put women - would let women put work ahead of motherhood. Or is it about options? (RINGS BELL).

(COMMERCIAL BREAK)

QUEST: Arguably this is the most unusual employment benefit that we've heard about or at least that could become the norm. Facebook and

Apple are to begin offering their female employees a new perk. It's a chance to freeze their age. Facebook says it's already offering coverage

for the procedure. Apple told NBC news it plans to so do in January. Denise Restauri is the CEO of the consulting firm Girlquake and author of

"Their Roaring Thirties." All right, you're in favor of it or not?

DENISE RESTAURI, FOUNDER AND CEO, GIRLQUAKE: I'm in favor of it.

QUEST: Good, so now we know where you stand on that?

RESTAURI: That's right.

QUEST: You're in favor of it - why?

RESTAURI: Because I think it's an option that women need to have. And the reason I think that - and I learned a lot of this as I was

interviewing women for the book "Their Roaring Thirties." I interviewed over 100 women in their 30s. And what I consistently heard was they want

to have children - the ones who want to have children - they're waiting until they're later for many reasons. And I'll get into that in a moment.

But they don't - they don't have the options. Many have said -

QUEST: Now, do you think - they don't have the options - what do you mean by that.

RESTAURI: Yes, so they want the option to have children later in life.

QUEST: Right.

RESTAURI: Many of them are not getting married until their later, many want to be married before they have their children, and they want that

option. But your childbearing years - you're best childbearing years according to some research - I'm sure doctors can debate this a little bit

- 20 to 28 years old.

QUEST: We won't debate that, I think not, I think most people will accept that to be a medical fact -

RESTAURI: Right.

QUEST: -- for the purpose of this. But this is all fair and good, providing it's a real option and not an option that the company or the

employee feels pressured to use a book career first. Surely that's the danger here.

RESTAURI: Yes, but are they putting you in handcuffs and, you know, hauling you off and saying 'we're going to freeze your eggs' or are they

giving you an option.

QUEST: It's a little bit - but it might not be a real option. Because they may say, 'Do what you like,' but of course you know that your

career requires you to do this because you won't progress. So it's an option in name only. Instead of saying - surely the better policy is to

say - yes, you can freeze your eggs, but also here's an entire raft of policies that you're - a year off, proper maternity benefits, proper

childcare benefits. That's a real option.

RESTAURI: But it's also an option because women, if you want to freeze your eggs in your 20s, many woman can't afford it. It's expensive -

it's $10,000, $500 a year to store those eggs, and when you talk with these women, they're looking - one of the main things that keeps them up at night

are finances. One of the main reasons are their college - is their college debt. So here you have women in their 20s, they're in college, that's the

optimal time to freeze their eggs, they can't afford, they're getting out of college or starting a job, they're not making the income. This gives

them an option. So until we see those companies come back and say we're going to penalize you because you didn't freeze your eggs. I'm in favor.

Now if it turns and they say we're going to penalize you, have me back on and I'll talk to you more about it.

QUEST: Well, no we need to have you on a lot more often to talk about these issues. Thank you so much.

RESTAURI: Thank you so much.

QUEST: Wonderful to have you on the program. Thank you so much indeed --

RESTAURI: Thank you.

QUEST: -- to help us talk through these. This is a subject that's going have people @richardquest - the whole question of the freezing of

eggs in - I mean, as a perk in the work place. Fascinating discussion. Tom Sater at the World Weather Center. We're going to take you to some

much thicker ice. Skate to thicker ice, and I think two men discussing this subject is a very poor idea by anybody's definition --

TOM SATER, METEOROLOGIST FOR CNN INTERNATIONAL: (LAUGHTER).

QUEST: So let's talk about the weather.

SATER: We move right along, don't we, Richard. All right, let's talk about business travelers and the weather. It doesn't look like there's

much of a chance of delays. We'll start in Europe where again the chances are slight. We'll work our way to North America where you have a much

better chance. Mainly some low clouds. You may have more of a problem with volume than really weather. There is some unsettled weather - there's

no doubt about it. The satellite picture shows a vigorous storm system. Look at this spin with its association cold front. More gales, more

unsettled weather across the northwest. And we continue to have that conveyor belt of moisture that's been plaguing parts of Southern France in

toward now Central Italy. Croatia's had their fair share

The numbers in the last 24 hours - yesterday we had 45 millimeters in London and now the U.K.'s still getting a good 40, 72 in Croatia. The more

violent weather seems to be in central areas of Italy - not like it was just yesterday. Time to get the sailboats in to shore - unless you need a

good gust of wind to help you get there. The rain pattern just off in the distance there.

When we look at the rain, again, it's been heavy in central parts of Italy. We're watching an area of low pressure. Yesterday was East Anglia

moving in now to a northern area of the Netherlands, losing its punch, but the leading edge of that vigorous cold front is going to start to spread

through the region. And, again, setting the stage for, again, almost this conveyor belt of rain showers that will be heavy at times. North central

areas of France - that'll move in toward areas of Germany as well.

In the U.S., look out. We've already had well over 150 delays in the hub in Atlanta. Charlotte is not on here - Charlotte, North Carolina,

Baltimore problems. Washington, D.C., New York as well. Cold front really that's been pounding areas of the Southern Plains, moves across the

Southeast. Lot of lightning, powers out, heavy amounts of rain - 100 to 150 millimeters. Two fatalities. First time in October deadly, severe

weather in the U.S. since 2009. I don't think it's going to be severe up to the north, but we still have tornado watches in effect, Richard, so any

incoming flights a little bit later this evening could be delayed. There may be a little stall pattern in the areas of Washington, D.C., New York

down to Charlotte. We'll keep you posted.

QUEST: We will indeed. Thank you very much. Tom Sater at the World Weather Center. A "Profitable Moment" for you is ahead.

(COMMERCIAL BREAK)

QUEST: Tonight's brief "Profitable Moment." It doesn't matter where we look, the uncertainty is certainly everywhere, and that's what's being

reflected in the stock market at the moment. What we can tell you is how long it's going to last, or indeed what it will take to stop this

volatility and this fear. Until we know and we get better direction, it's here to stay. 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.

END