Return to Transcripts main page
QUEST MEANS BUSINESS
Total CEO Dies in Moscow Plane Crash; Dow Rallies; European Markets Up; China's Economy Slows; Hong Kong Leaders, Protesters Talks Unsuccessful; New US Travel Restrictions
Aired October 21, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
MAGGIE LAKE, HOST: The closing bell rings remotely from San Francisco today as Charles Schwab marks a milestone. The Dow posts a triple-digit
gain. It's Tuesday, the 21st of October.
In France, he's been hailed as a great industry captain. President Putin says Russia has lost a real friend. We reflect on the life and
legacy of Total's chief executive, Christophe de Margerie following a tragic accident in Moscow.
Also tonight, China grows at its slowest pace since the financial crisis. I'll be joined by Ken Rogoff.
I'm Maggie Lake, this is QUEST MEANS BUSINESS.
Good evening. Tonight, the business community is mourning a titan of the oil industry. Christophe de Margerie, the charismatic CEO of Total,
has died in a plane accident in Moscow. He is being remembered tonight as a leader with panache and as someone whose spirit was unanimously
De Margerie's plane collided -- private plane collided with a snowplow while taking off from Moscow's Vnukovo Airport, killing him and three crew
members onboard. Christophe de Margerie had spent four decades with Total. He was 63 years old.
Total employees held a minute silence as workers arrived to the company's headquarters this morning. Staff are remembering a lively boss
who had a kind word for everyone.
(BEGIN VIDEO CLIP)
MARIE-FRANCE CASAVIA, TOTAL EMPLOYEE (through translator): He was accessible, he spoke to us. He said "hello" at the very least. I don't
have much to say, but that's how I perceived him, because whenever I met him, he was smiling and welcoming. So this morning, we were all very
troubled to learn of his death. But he was a very accessible person, and we have lost a good man at Total.
(END VIDEO CLIP)
LAKE: An investigation is underway into what happened on that airport runway. Russian officials are saying the snowplow driver was drunk. They
are also investigating other possible causes of the accident, such as pilot or air traffic control error. A spokesman for the Russian investigative
committee says whatever happened, it was a crime.
(BEGIN VIDEO CLIP)
VLADIMIR MARKIN, SPOKESMAN, RUSSIAN INVESTIGATIVE COMMITTEE (through translator): It is already clear that the reason for what happened was not
a terrible and tragic combination of circumstances as the representatives of the airport are trying to suggest, but a criminal connivance of those in
charge, who were unable to coordinate the actions of the airport staff.
(END VIDEO CLIP)
LAKE: Russian president Vladimir Putin has sent a telegram to his French counterpart, Francois Hollande. Mr. Putin expressed his condolences
and praised de Margerie's role in laying the foundation for fruitful cooperation between the French and Russian energy sectors. Mr. Hollande
remembered de Margerie for his independence, original character, and dedication to his country.
CNN's senior international correspondent Jim Bittermann joins me now from Paris. And Jim, what is the reaction tonight there? This was a man
who had spent decades at one company, which is unusual these days.
JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Totally unusual, and very unusual for France as well, Maggie, because a lot of
times here the big companies are run by people who graduate from the right schools and are parachuted in at the top. But de Margerie started at the
bottom and worked his way up over four decades.
He was known to everybody at the company, and one of the reasons that I think there was such sadness out in the Defense, where Total's
headquarters is located, is the fact that people really did get to know him. When they crossed him in the elevator and whatnot, he always had a
kind word, and he was a part of the company.
And I think from the country's standpoint, one of the things that they will miss is his directness. He was always a man who defended the
interests of France. Total is the fourth-largest oil company in the world, and it got there because of the fact that in part of Mr. de Margerie's
feistiness at defending French interests.
Now, that set him in good stead with many here. The politicians of both right and left today were singing his praises. The finance minister,
Michel Sapin, had this to say about his colleague.
(BEGIN VIDEO CLIP)
MICHEL SAPIN, FRENCH FINANCE MINISTER (through translator): He was a great CEO. He was also a great personality -- I will say almost a big
mouth -- with a capacity to speak his mind without any fear of bothering whoever he was speaking to. Whoever they were, heads of state, big CEOs,
or French political leaders, to whom he knew how to speak frankly.
(END VIDEO CLIP)
BITTERMANN: But not everyone shared that praise, Maggie. In fact, some on the extreme left here, who don't have such great faith in the oil
companies and particularly in Total, were critical about the way that de Margerie was being eulogized today.
One left-wing member of parliament, in fact, went out so far in a tweet as to call Mr. de Margerie a bloodsucker. That brought an immediate
rebuke from the prime minister, who raised it in the parliament today and said that that member of the Socialist Party should resign. Maggie?
LAKE: Jim, you do bring up a good point, though. There are people who are very upset about the economy. We know the French economy is
struggling. This is a time when you lean on business veterans to bridge the gap, to jump-start the economy. Presumably, there will be a whole in
BITTERMANN: Well, absolutely. And amazingly, this is -- it's sort of an accidental circumstance, but now, we have the top energy companies in
this country are now changing leaders. The Electricite de France is changing its leader, the Gas de France is changing its leader. Areva, the
big atomic energy company, is going to have a new CEO. And now, Total is going to have a new CEO.
So, they're going to have four energy companies with new leaders coming onboard. Whether that's going to have an impact, these companies
are huge, they have succession apparatuses in place.
And in fact, just hours after the death of Mr. de Margerie today, the secretary-general of Total came out and held a news conference and said,
look, we have mechanisms in place, Total is not going to be fazed by this. We'll keep going forward. But nonetheless, there is an amazing transition
here going on, Maggie.
LAKE: There certainly is. Jim Bittermann, thank you so much, live for us tonight in Paris.
Well, de Margerie spent 40 years at Total, including 7 as CEO And 4 as the company's chairman. Total's secretary-general told the media they
would move on with his legacy.
(BEGIN VIDEO CLIP)
JEAN-JACQUES GUILBAUD, SECRETARY-GENERAL, TOTAL (through translator): Christophe de Margerie dedicated his life to the promotion of the company
in France and throughout the world, and to its 100,000 employees. And as he would have wished, Total has to continue to move forward. The group is
ready to ensure continuity of his legacy and his policies to respond to this tragic event.
(END VIDEO CLIP)
LAKE: John Hofmeister is the former president of Shell Oil Company. He joins me now from Houston, Texas. John, thank you so much for being
with us. As we've heard in all the comments we just played, this was such an iconic figure in an industry that's known for attracting pretty bit
personalities. What have you -- what do you make and what are your thoughts on the legacy of de Margerie?
JOHN HOFMEISTER, FORMER PRESIDENT, SHELL OIL COMPANY: The first thing I think about, Maggie, is what he did to put Total into a more competitive
global position relative to the other major oil companies, including cleaning up some bad business practices that unfortunately had worked their
way into Total's operations, particularly in far-flung countries that you don't hear about very often.
And I think it took a person of great courage, a person of determination, a person who was steadfast in putting the ethics and
integrity model that's necessary to compete at the global business level in today's world, with all the anti-bribery legislation that exists, to put
that company in a much better place.
I think he will remembered by that across the industry, because it made a big difference in the way Total has earned respect from the rest of
LAKE: John, do you -- we just heard the company saying they plan to carry on his legacy. What do you think the biggest challenge facing them
right now is as they transition? It's hard enough in good times to make a transition like this. What do you think the biggest challenge they face
HOFMEISTER: Well, its incumbent upon any leader of an organization to make sure that the systems, the processes, the structures are in place,
because no one's indispensable. And an institution has to find its own way.
The leader is very much the personal stamp on the organization, and the organization may show some of the characteristics of the leader, but
underlying that -- and I know some people in Total who worked hard on a establishing those systems and process, those structures, which would carry
on regardless of who the CEO is.
CEOs come and go. No one, as I said, is indispensable. So, you have to have that underlying strength. And I have no doubt whatsoever that
Total is as well-positioned as any company could be, despite having had this magnificent individual at the top.
LAKE: And this is, of course, against a backdrop where there are shifting sands, if you will, in the oil landscape. A lot going on in terms
of new production coming online, the rise of the US, conflict taking place in many areas. Do you think that they will fill the position from inside?
Is that the right move, or should they look for an external candidate?
HOFMEISTER: They've had a good succession planning process. It's important in the oil and gas industry, if you're going to be at the top of
the organization, to both understand the business that is, and the business that is meant to be.
Because everything in the oil and gas industry is about either developing the future, which Christophe was a master at, but also running
operations. You have to be able to do both.
And I think that's where the people he would have appointed or who would have been growing up in the organization during his tenure, will
probably be more value-adding to Total than trying to find somebody from somewhere else in the industry.
There has really not been a good example that I can point to in one of the major companies -- 100,000 employees, which means with contractors,
probably half a million people or more work for Total.
And to run that kind of an organization not knowing anything about the organization, I can't remember a single instance of an outsider coming in
and just carrying on the organization without great disruption and oftentimes dysfunction.
HOFMEISTER: And so, I think they're wiser to go inside, provided they have the talent. And I don't doubt that they do. They've been around a
long time. The French are very good, organizationally in multiple industries, of developing internal talent for succession.
Of course, France also has this political appointments problem -- I say it's a problem, they probably don't see it as a problem -- where
politics gets into business. But I think in the oil and gas industry, the politics of France really doesn't play much, because France doesn't have
any natural resources --
HOFMEISTER: -- to speak of in the oil and gas world. And so, you really have an independent who will run the company. And I suspect they
have the internal talent to do so.
LAKE: John, those are all excellent points. And I know I include you when I say that our thoughts and our prayers, of course, are with his
family tonight. John Hofmeister, thank you so much.
HOFMEISTER: Thank you.
LAKE: Well, we'll have more coverage of the death of Christophe de Margerie later in the show. QUEST MEANS BUSINESS will continue in just a
LAKE: A star turn from Apple's results, plus speculation the European Central Bank may boost economic stimulus mean the Dow is taking bows today.
Is last week's sell-off fading from memory? CNN Money digital correspondent Paul La Monica is with me now.
I'm sort of smirking as I say that, Paul. I don't think we think volatility's over, but certainly there does seem to be a sentiment change.
PAUL LA MONICA, CNN MONEY DIGITAL CORRESPONDENT: Clearly. And volatility, remember, volatility can be on the up side as well --
LAKE: That's right.
LA MONICA: -- as well as the down side. The past couple of days, luckily for everyone, it's been up. I think you do have great numbers from
Apple reminding people that, oh yes, a lot of people are still doing well. This isn't just all doom and gloom. IBM clearly flip side of that. Their
numbers were terrible.
But as you mentioned, the ECB as well, it's one of those weird, we're back to bad news is good news again. Because Europe's economy is a mess,
that's an understatement. Everyone's hoping the ECB comes in with more stimulus.
So that just means more easy money. It's kind of repeat of what the Fed did with QE. And that keeps traders happy, because it means more
liquidity, more cheap money. But oh yes, the only reason they're doing it is because Europe's economy is a mess. Did I mention that?
LAKE: Yes, that is a problem, isn't it? So, we're going to -- so for now, a positive, watch and see. And I know you and I will talk this week
about whether they meet those expectations. It is a chronic problem for the ECB.
LA MONICA: Yes, Mario Draghi pledges whatever it takes, but his definition of "whatever it takes" --
LAKE: And the timing of what things take in Europe --
LA MONICA: -- is now what traders always want.
LAKE: -- and traders is different.
LA MONICA: Exactly.
LAKE: So, that's our cautionary tale, but we'll take that 200 points.
LA MONICA: Yes.
LAKE: Paul, thank you very much.
LA MONICA: Thanks, Maggie.
LAKE: European markets enjoyed a day of strong gains, as you can imagine, based on what we just said. Investors took heart from those
reports that the European Central Bank could start buying up corporate debt. That would widen its asset-buying program, which began on Monday.
It's hoped the extra stimulus will help rekindle growth. And the CAC, there, looks like the best performer.
China's economy, meanwhile, has suffered its worst quarter since the global financial crisis more than five years ago. It expanded by 7.3
percent in the third quarter versus the same period last year. That kind of growth rate would be the envy of many countries around the world, but
for China, it signals a slowdown.
So, is China's languishing economic expansion the new normal for Beijing? Former IMF chief economist Ken Rogoff joins us live from
Cambridge, Massachusetts, where he teaches economics at Harvard.
Ken, great to see you, thanks so much for being with us. Before we talk about China, I do want to --
KEN ROGOFF, FORMER CHIEF ECONOMIST, INTERNATIONAL MONETARY FUND: Thank you.
LAKE: -- touch on the ECB with you, because it does look like those expectations really are what fueled the market today. Can the ECB prevent
recession from happening in Europe?
ROGOFF: Well, they're in recession and have been for several years now, for all practical purposes. But there's been political paralysis.
It's not just the ECB, obviously. Structural reform in France, and Germany allowing more breathing space in the deficits from Germany, the ECB doing
And I think -- you said the bad news is good news. They seem to need a push every time to move ahead, and maybe they will. I think the bank
results, the stress tests, the asset quality reviews they're doing, that could lead to some change, too, a strengthening of the banking system would
LAKE: It would certainly help. Those -- labor reforms seem very tough to push through, and I know they're going to be critical, too, and
that is holding us back. For right now, that's not in the markets' view. China certainly is, though.
LAKE: And let's get to that. The engine of growth, it's slowing down. But Ken, to a certain extent, this is an engineered slowdown, at
least in some areas. Can the Chinese officials achieve this soft landing they seem to be looking for?
ROGOFF: Well, it's hard to bet against them, having had more than three decades of spectacular growth. But they are facing bigger challenges
than ever. They have demographics, the global economy no longer supports the export growth they had, they're running into diminishing returns in a
lot of their investment.
So, they're going to slow down over the next five or ten years no matter what. You can pick a number. But more like 5 or 6 percent instead
of the 10 percent. They're trying to move into it gracefully and slowly. It's not easy, and who knows?
We do know that in Western economies, when they try to slow the economy, hard to do it gradually. Look how scared everyone is about just a
little blip in the federal funds rate, if the Federal Reserve raises its interest rates just a little bit.
And trying to do it in China without the market signals, frankly, without the information, it's not easy. I suspect they're slowing more
than the official numbers report.
LAKE: Which would be a problem for the global economy, but also have huge implications for China, doesn't it? I know one of the things people
worry about as they -- if they are slowing more rapidly is credit.
Do they have a credit bubble? Is there a danger lurking in China that we're not aware of that has systemic risks for the global economy, Ken?
It's the elephant in the room that everyone's afraid to talk about.
ROGOFF: It is. I mean, it's different. It's much more of a planned economy. They have a lot of assets to bail people out. The sort of
conundrum is, they've been growing through massive credit. Even if they slowed -- even as they slow credit down, it's still growing a lot faster
than income is growing.
And the question is, can they get a soft landing on the credit without getting a hard landing on the economy? It doesn't have to end immediately
in massive defaults. It is not easy to engineer. The problems are much, much bigger than they faced, say, 12 years ago after the Asian financial
crisis. They're not growing as fast, the debt's much larger.
The same people are in charge as in the last 8 or 10 years, and it's just hard to know how much they're just sort of sticking their thumb in the
dike and how much they're really doing a soft landing. I think it's hard to do. I think they'll end up slowing more than they want to. They may
not tell us the real number at any point.
LAKE: That's an excellent point, really, the transparency is, perhaps, the most unnerving thing for investors in this environment. Ken,
always great to catch up with you, thank you so much. Ken Rogoff for us.
In Hong Kong, no breakthrough, but plenty of angry words. Frustrated pro-democracy leaders went back to their supporters tonight after
unsuccessful talks with government leaders.
Demonstrators are demanding full democracy for Hong Kong, and they've been occupying the territory's major traffic arteries for weeks to get
their point across. CNN's Paula Newton is in Hong Kong and reports on today's face-off.
PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT (voice-over): By any measure, it was extraordinary, protesters sitting down, listening to a live
stream as their leaders were face-to-face with a Hong Kong government that so far has ignored their pleas for democracy.
The dialogue was sharp and steeped in the finer points of Hong Kong law. It was the t-shirts verses the suits, and the establishment made
clear their patience is dwindling.
CARRIE LAM, HONG KONG CHIEF SECRETARY FOR ADMINISTRATION (through translator): Some people say that Hong Kong has been torn apart.
Relationships between people in Hong Kong are also becoming very strained.
NEWTON: But the student leaders shot back, saying the government refuses to even consider reform, and has offered no concrete concessions.
"The government report seems to be a document calling for responsibility, but what is the next practical step?" he asks. "Is there a timetable or
road map showing Hong Kong people the future direction of constitutional reform?"
Hong Kong's number two, Carrie Lam had a pointed comeback. The protesters, she said, need to face reality.
LAM (through translator): Hong Kong is a special administrative region. It is not an independent country, not an independent form of
government. We cannot decide independently on our political system.
NEWTON: What the government did put on the table, more talks and a promise that Hong Kong's next election in 2017 wouldn't be a dead end for
reform, but that democratic process would be gradual.
NEWTON (on camera): The protesters say this is what they've been waiting for. They've been waiting for dialogue, they've been waiting for
the government to actually hear their demands and give them some kind of legitimacy.
NEWTON: The issue here -- and you can see that they kind of react to everything that's said, as if it's a sporting event. The issue remains, is
this still going to be a stalemate? Will these protesters remain in the streets?
UNIDENTIFIED MALE: So we are calling them the human recording machines.
NEWTON: So, you just think they're on a loop. They're saying the same thing to you over and over again.
UNIDENTIFIED MALE: Yes, exactly.
UNIDENTIFIED FEMALE: I have stayed since the first day we have occupied here. So, I'm a university student. This is my own -- my
responsibility to strike for our democracy in Hong Kong.
NEWTON: And you will stay?
UNIDENTIFIED FEMALE: Yes, of course I will stay here.
NEWTON (voice-over): They say they want one person, one vote, and the right for Hong Kong to choose its own candidates, free from Beijing's
meddling. But so far, it's all fallen on deaf ears. Student leaders renewed an emotional plea to the government.
LESTER SHUM, HONG KONG FEDERATION OF STUDENTS (through translator): You were the chosen officials at the time. Whether you will be a
responsible, courageous, brave, and skillful fighter who pushed forward Hong Kong's democratic political system, or becoming sinners in history who
killed Hong Kong's people's future and democracy, I believe the choice is with you officials and not us.
NEWTON: These talks were peaceful and pointed, but still, a classic stalemate.
NEWTON: Protest leaders got the rock star treatment when they arrived back at the barricades. There is no doubt they will remain on the streets,
and Hong Kong will remain transfixed by a movement that shows no end.
Paula Newton, CNN, Hong Kong.
LAKE: Up next on QUEST MEANS BUSINESS, new guidelines for air travelers in the fight against Ebola. We'll be live at Dulles
LAKE: The US Department of Homeland Security says all travelers from Ebola outbreak countries in West Africa will have to arrive at just one of
five airports. You'll see the five US airports on the map on the screen. They've enhanced screening procedures. For the time being, if you're
traveling from Liberia, Sierra Leone, and Guinea, these are the choices you have.
We are joined, now, by CNN aviation correspondent Rene Marsh, who's live for us in Washington Dulles Airport. So, five choices, Rene. What is
it going to mean for travelers?
RENE MARSH, CNN AVIATION CORRESPONDENT: Well, essentially, if you are coming from one of those Ebola hot spots, you are going to be funneled
through a very specific airport. Dulles, where I am at at this point, one of the five airports.
So, again, the way this is going to work is if you're a passenger coming from one of those three countries, Liberia, Sierra Leone, or Guinea,
the Department of Homeland Security said today they will be working with airlines to track passengers, track their itineraries to make sure that if
they originate in any one of those three countries, they have to land at one of the five US airports where we're seeing that enhanced screening.
You remember just last week, we talked about all five of those airports are rolling out the enhanced screening, which consisted of
temperature checks, also a very detailed CDC questionnaire about the type of physical contact that they had with people while they were over in West
The reason why they focus on these five airports is because the administration said 94 percent of the people coming from those three West
African countries came through those five airports. But you remember, the question was, well, what about the other 6 percent?
Well this measure that DHS announced today is ensuring 100 percent of the people who are flying from those Ebola hot spots will land at an
airport where enhanced screening is underway.
They do not believe that this will be a difficult task. That's what someone from DHS told me today, because we're talking about roughly 150
passengers a day. They believe they can handle that, as far as tracking them.
And we also know now fresh numbers from Customs and Border Protection today. They told us just how many people have come from those hot spots
since the roll-out of this enhanced screening. We know that some 521 people to date have landed at these five US airports.
But, Maggie, only three of them had elevated temperatures. Only four of them had to be taken to the hospital for further examination. And at
the end of this all, none of those turned out to be Ebola cases. So, just some perspective one what they've been able to achieve as it relates to the
enhanced screening since it's been rolled out, Maggie.
LAKE: All right, the important thing is to keep everyone safe. Rene, thank you so much.
There seem to be some glitches with Apple's new Apple Pay transaction system. It just debuted Monday, and you saw it on the show, but already,
our reporter, Samuel Burke, has found a problem. We'll have more.
LAKE: Welcome back, I'm Maggie Lake. This is CNN, and on this network, the news always comes first.
Jeffrey Fowle, one of three Americans detained in North Korea has been released and will soon be reunited with his family. He was arrested in May
for leaving a Bible at his hotel. A senior U.S. official says Fowle was released Tuesday and flown to Guam on a U.S. government plane.
Oscar Pistorius has been sentenced to five years in prison for killing his girlfriend Reeva Steemkamp. He must serve at least ten months before
he can be considered for parole. A Syrian opposition group says U.S. airdrops over Kobani this week may have inadvertently armed ISIS. It says
at least one crate of weapons intended for Kurdish fighters is now in ISIS. U.S. Central Command acknowledges one parcel airdropped Sunday went astray,
but says warplanes then destroyed it.
A new round of talks in the Russia/Ukraine gas dispute is planned for next week. Today's negotiations faltered. The European Commission which
brokered the discussions, insist there was significant progress.
Well, there seemed to be some glitches with Apple Pay which debuted on Monday. CNN's Samuel Burk joins me now. Samuel, we talked about it, you
went out yesterday. What happened today?
SAMUEL BURKE, BUSINESS CORRESPONDENT: I told you here on "Quest Means Business," on your show this morning, that it went off without a hitch when
I was trying it out. I took it off the phone and then I went to my bank account this morning, just to make sure that everything was all right. I
had been charged twice for everything I purchased - at the grocery store where we saw that I made the purchase yesterday, at the pharmacy as well.
I made three transactions and so I was charged six times.
I checked on Twitter and I saw other people with my same thing - had the same problem. So I called up my bank, they said, `no, no, no, you have
to call Apple.' Apple said, `no, no, no, you have to call the bank.' I got them both on the line. Interesting though because Apple says - they've
always said this is secure, we don't keep any information, we don't keep records of the transaction. And they said, `look, there's nothing that we
can do because we don't have any records of this transaction.' In the end, my bank has turned - has given me back the money for now while they try and
fix the problem. But I just want to show you some of the tweets that we're seeing form other people in the same situation that I have - that they've
been charged two times. We have Trudi here on Twitter. She says, "Great, Apple charged my account twice for this software because of course I have
free money to pay double for whatever I buy. Sigh." And trust me, I was sighing for the hour and a half I spent between my bank and Apple.
LAKE: And I saw you trying to troubleshoot that as I was racing around the newsroom. This is so important, Samuel, listen - it's a new
product, things happen, but we are talking about Apple which had a problem with the rollout of the IOS system which was a major, some major problems
and inconveniences which they've now fixed, and this is exactly the kind of the thing that if you have these problems out of the gate, it could deter
that mass adoption that we talked about.
BURKE: I only saw this from about a half dozen people on Twitter, but in all fairness, only people with the iPhone 6 or 6 Plus can do it, and then
from that group, only the people who decided to go through with the process -
BURKE: So, this could be another difficult rollout if this proves to be a problem. Again, I only saw this people with my same bank. But we
want to wait and see just what happens. We haven't heard from Apple just yet.
LAKE: Yes, and now that they know about this, Samuel, thanks to you maybe they're going to get in front of it and try to find out what's going
on. But we will check in on that again and keep everyone posted. Meanwhile, we have to talk about Yahoo. Earnings coming out after the bell
- there's a lot of interest on this on Wall Street.
BURKE: Yes, a little bit of a surprise. Earnings per share -- $.52 versus estimates of $.30. People were thinking it was going to be $.30 and
now it's $.52. Marissa Mayer saying, "our revenue in mobile is now material. In Q3, we saw mobile revenues in excess of $200 million. We
estimate that our gross revenues in mobile will exceed $1.2 billion in revenue this year." My question and other analysts who I've seen talking
BURKE: What does our revenue in mobile is now material mean exactly? Where is it turning from?
LAKE: Where is it coming from? Where is it coming from?
BURKE: Because Tumblr we know is a very sexy product that she purchased, but isn't particularly mobile. So, where is this coming from?
I'm going to be on the call. I want to hear what she has to say about it because we really need to make sense of where this is all coming from.
LAKE: We do, and there had been a lot of questions about whether she has the strategy. So if there are results and they're real, this could be
a turning point. We'll look back at this and say this was the turning point, or if people are disappointed, then there's something suspect here.
It's going to be real problem for Marissa Mayer. All right, Samuel, lots to watch. Thank you very much. And again, we are going to keep you posted
on Apple Pay situation and we will be back with more "Quest Means Business" in a moment.
LAKE: Hello. The stock exchange has not escaped the volatility we've seen recently. World markets is a real benchmark index closed up eight
points in Tuesday's session. However, you can see that the past 25 has been on a largely downward slope over the past month. Volatility comes
with the territory in that region of the world, and my next guest embraces it as part of the reality of a dynamic and vibrant market. Yossi Beinart
is the CEO of the Tel Aviv Stock Exchange. Thank you so much for being with us today.
YOSSI BEINART, CEO, TEL AVIV STOCK EXCHANGE: Good to be with you.
LAKE: Every market chart looks like that as we know.
LAKE: But what do you make of the volatility we've seen and are you concerned that it is going to continue and really hurt investor sentiment?
BEINART: No, not really. I think global events that happened in the last few weeks create - increase volatility. I think markets have come
down a bit. If you look historically at the Israeli market and the Israeli economy, --
BEINART: -- we're much more affected by global events like the downturn in 2008 than we are by local security events. And this has been
dominant, and it's mostly because the Israel's economy is export-based, and what affects us most is what happens in the global economy and not things
that happen in the region.
LAKE: Do you think that disconnect can continue? There has been a lot of talk about this recently, because Israel, certainly the economy,
benefits from the fact that the pressures that come with conflict don't hit the economy in the way they do in other places. Is that - do you think
that that could continue? Some question that.
BEINART: No, I know, but I think the main reason this is potentially OK is because if you look at Israel expenditure on security in the last 30
years, it's gone down dramatically - from around maybe 20 percent in the 80s to less than 5 percent of GDP. (Missing days) so, though, obviously
everybody's very unhappy that have to spend money on security when you can spend it elsewhere. As long as it can be maintained at a reasonable,
controllable level, then we can live with it. But the key is being a high- tech economy with 38 or so percent exports to - worldwide - but emphasis (ph) are more - what stresses us more -- is an economic event like 2008,
and not the local issues that we may have.
LAKE: There has been so much attention on the vibrant tech community in Israel and the fact that many of these companies we've see that have
been bought up for billions start in Israel. It's been a boon for the economy, it's been a boon for your index. Is Israel - has Israel become
overly reliant on technology?
BEINART: Oh, I don't think so. The old days when all we did was just oranges, exporting them to the world - they're gone. We now export high
technology and - I'm sorry, technology. And what we should do even more than we do today is try to nourish those smaller companies - Israel has
created 600 startups in 2013. This is a very, very high number when you look at its size and even in the actual number. And by definition, many
startups of course don't make it. But the ones that do, we have to make sure that there is enough funding for them that they can get into public
markets in Israel to grow and become large companies like the ones you see here and the ones that go public on Nasdaq or in Europe or in London.
LAKE: Well, it's certainly been fascinating to watch, and we've certainly seen a trend where a lot of the companies that start there now
stay there in Israel -
LAKE: -- which is an interesting development. You'll come back again next time and talk to us about it.
BEINART: I'd be happy to.
LAKE: Thank you so much for joining us today.
BEINART: Thank you very much.
LAKE: Shares in Apple ended the day close to an all-time high, and despite what we were saying earlier about potential problems with Apple
Pay, it's a technology that is in demand. In this week's second edition of "Future Finance," Oisin Lunny explains why we better get used to it.
OISIN LUNNY, MOBILE STRATEGIST, OPENMARKET: Money, it makes the world go `round for many people. But somehow it's more ethereal than ever. The
coins in your pocket represent an idea of value, regulated by the central banks. They don't represent a stack of gold bars gathering dust somewhere.
Money is virtual - millions are traded in milliseconds over dedicated networks. On many everyday transactions such as London busses, don't
accept physical cash anymore. Money is increasingly a non-physical or digital unit of value, and the way we choose to access digital stuff is
transforming rapidly. Predictions for PC growth over the next four years are flat-lining. In contrast, the uptake of mobile devices globally is
skyrocketing. According to futurist Gerd Leonhard, 80 percent of the world's internet traffic will come from always-connected mobile devices
within four years while Google are predicting that close to 100 percent of the world's population will be online by the year 2020.
So, mobile devices are the world's portals of choice for most of our digital interactions. And finance is increasingly digital. But what can
we expect from the future? Firstly, innovation. Member (ph) fintech startups like Simple and Moven provide banking without the overheads,
contextual banking and even behavioral finance. Secondly, disruption. M- PESA transformed money transfer in Kenya, Tanzania and now South Africa with limited bank involvement by using mobile devices.
Startup Mobino aims to bring peer-to-peer mobile finance to $5 billion people globally and the central banks. In contrast, TransferWise and Azimo
offer money transfer services that cut out the banks all together. Meanwhile, the mobile phone networks are forecast to lose $386 billion in
revenue. Clearly, the telecos have to be at the heart of the new finance ecosystem to survive.
Finally, engagement. The key to all of this is enterprise mobile engagement. Companies that provide a frictionless user journey from sign
up to purchase to customer service will win consumer's hearts, minds and ultimately their bank accounts. As Brett King said, for today's consumers,
banking is no longer somewhere you go, it's something you do. And indeed, to experience the future of finance, we don't need to go anywhere. It's
already in our hands.
LAKE: The fashion world is mourning the death of Oscar de la Renta, renowned for his use of this silhouette. These are two of his most beloved
creations. We'll show you the full color of his beautiful work after the break.
LAKE: We return now to our top story tonight. The CEO of Total, Christophe de Margerie, is being mourned by the global community which he
spent decades as a powerful player. Leaders of all kinds have taken to Twitter to pay tribute. Lord John Brown wrote, quote, "A very sad day.
Christophe de Margerie of Total was a creative, inspiring breath of fresh air. Severely missed by me and the oil industry." Richard Haass, the
president of the Council on Foreign Relations tweeted, "Stunned indeed, devastated by the news of the death of Christophe de Margerie of Total.
Friend and colleague, a wise and good man we will all miss." Christophe de Margerie was only - one of only - Western CEOs who traveled to St.
Petersburg for this year's Economic Forum. Other leading figures refused to be seen near Russia at a time of controversy over its foreign policy.
Total has several operations in Russia, both in oil and natural gas. The company says it was hoping to double its Russian oil output, making Russia
its biggest oil producer by 2020.
Earlier I spoke to CNN's emerging markets editor John Defterios and asked him about de Margerie's relationship with Russia.
JOHN DEFTERIOS, "CNN'S EMERGING MARKETS" EDITOR AND ANCHOR OF "GLOBAL EXCHANGE": He took a very hard line over a year ago, Maggie, to try to
keep the Russian market open even though that fell on deaf ears in Brussels and in Washington. He in fact died trying to open up new supplies for oil
and gas in Northwest Siberia. He met with Prime Minister Dmitry Medvedev the night before the crash, trying to pursue a $27 billion deal in
Northwest Siberia. His goal, Maggie, by the end of the decade was to try to double oil and gas supplies from Russia for his company even though the
sanctions are in place.
Now, he's known for his mustache and his big smile, but in fact, he was a hard-nosed businessman making it the fourth largest oil company by
market cap in the Western world, and the second largest company in France. The accolades came out back at home. The Prime Minister Manuel Valls said
in a statement, "France is losing a great industry captain and a patriarch." As a journalist, we interviewed him several times, Maggie. I
caught up with him at the St. Petersburg International Economic Forum last May. It was a very delicate meeting because many CEOs decided not to keep
company with Vladimir Putin. I remember approaching him in the front row during the panel, saying, `Are you willing to talk?' and he said, `Why
not?' This is what he had to say.
CHRISTOPHE DE MARGERIE, TOTAL CEO: There are no sanctions, as far as I know, against Russia as far as oil and gas business is concerned. I've
been always participating to this forum. I was probably the first non- Russian CEO in this forum. So not to come would be a political move.
DEFTERIOS: Now, de Margerie in fact tried to keep politics and oil very separate. In fact, he struggled to do that in many markets around the
world and did not work in Russia as the sanctions came into place in August and September, Maggie.
LAKE: John, it's interesting, I suppose not surprising that he would be willing to talk if he had a reputation as a risk-taker. This is a very
critical time as you and I have been discussing in the show. This is a landscape in terms of, you know, oil majors, oil countries that is changing
rapidly. It is very political at this time. What does this mean for Total and where are they positioned in the world?
DEFTERIOS: Well, there's a question over the legacy going forward because at 63-years-old he was not ready to retire and he did have such a
big presence. What we're hearing in the discussions within the company that there'll probably be a person found within the company. Will they be
as aggressive going overseas?
Now, Christophe de Margerie, quite interestingly, made his name here in the Middle East in the 1990s when he was running this company for Total
and had big discoveries including here in Abu Dhabi. They had a 40-year concession which was up for grabs, and in fact he was here last year trying
to make sure that that concession goes through. This decision will not be made now before his tragic death.
But in the last three or four years, he was going after risky fields in Nigeria, Eastern Siberia, into Angola. They have not paid off just yet,
but he wanted to get the daily production up to three million barrels, and then ran into this very delicate time when oil prices started to fall. So
there was some pressure, but did not get him off track trying to go after Russia and some of those more risky emerging markets going forward. It
will be interesting to see whoever fills the shoes for Christophe de Margerie, if they pursue that strategy - also interesting, Maggie, -- it's
unusual in today's corporate environment. This is a man who graduated in 1974 and served 40 years at the same company, came up from the lower ranks
and worked his self up to CEO and also chairman over the last four years as well.
LAKE: Turning now to fashion icon Oscar de la Renta, who has died at the age of 82. De la Renta dressed first ladies and Hollywood's most
famous celebrities. We showed you two silhouettes on the fashion legend's creations which range from big skirty gowns, to slender dresses. That is
actress Sarah Jessica Parker at a benefit in New York just a few months ago. It was splashed all over the front pages, and that is the first lady
Laura Bush after her husband, President George W. Bush was inaugurated for his second term in 2005.
Oscar de la Renta was diagnosed with cancer in 2006, though the cause of his death on Monday is unknown. The designer left a big mark on the
fashion world. CNN's Jason Carroll takes a look back at the man who put high society in haute couture.
JASON CARROLL, NATIONAL CORRESPONDENT FOR CNN: Dressing women from the red carpet to the White House for nearly 50 years. Legendary fashion
designer Oscar de la Renta has died, the cause currently unclear.
SHERRI SHEPHERD, TELEVISION PERSONALITY: You are stunning in your Oscar de la Renta dress.
Female: Thank you so much.
CARROLL: de la Renta's style spanning generations. Hollywood's elite form Taylor Swift to Oprah Winfrey, draping themselves in his haute
couture. HBO's hit series Sex and the City even centered an entire episode around one of his stunning creations.
SARAH JESSICA PARKER AS CARRIE BRADSHAW ON SEX AND THE CITY SHOW: "Oscar de La Renta sleeveless silk, fine -- now that is pure poetry."
CARROLL: The fashion icon's final masterpiece - Amal Clooney's gown for what was dubbed the celebrity wedding of the year.
ERIC WILSON, FASHION NEWS DIRECTOR, INSTYLE MAGAZINE: Oscar de la Renta was the ultimate diplomat for American fashion. He was among the
generation of designers in post-war America who really came out from the back rooms and put their own names on the label.
CARROLL: Originally from the Dominican Republic, de la Renta moved to New York in 1965, launching his own label and stitching his way into
America's history forever.
OSCAR DE LA RENTA, FASHION DESIGNER: I am an unbelievable lucky man. I live in the best country than a human being can live.
CARROLL: Though he had a reputation of dressing New York socialites, de la Renta also dressed every first lady since Jacqueline Kennedy.
Hillary Clinton wore one of his gowns to Bill Clinton's second inauguration, as did Laura Bush for George W. in 2005. Even the current
first lady Michelle Obama could not escape the sultan of suave, donning her first de la Renta just this month.
DE LA RENTA: I think that it's a compliment to women that in the United States we want to be proud of our first lady, of how she looks.
CARROLL: Jason Carroll, CNN New York.
LAKE: Time now for a check of the weather. Jenny Harrison is at the CNN International Weather Center. Hi there, Jenny.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Hey, Maggie, yes we're talking about very windy conditions first of all, in particular to
the northwest of Europe. And this is actually the remnants that was Hurricane Gonzalo. This of course is the system that headed its way across
Bermuda, the eastern side of the Canadian Maritimes, and then as you can see, it really has now passed across the U.K., and has been - really
beginning - to impact much of Scandinavia and Central Europe and will continue to do so over the next 24 to 36 hours. Some very, very strong
winds, damaging winds - and in fact, one death has been reported even in Central London because a tree came down on a lady, very sadly.
And you can see the current winds. Pretty strong right now into Amsterdam. Glasgow 46 kilometers an hour and of course as you might expect
with winds like this throughout Tuesday, there have been all sorts of travel delays. And look at some of the gusts that have been reported 100
kilometers an hour in Northern France, Amsterdam 90 kilometers an hour, Dublin 87, and London itself 72. So we have had many long, lengthy delays
at the airports. Also the train system in the U.K. was severely impacted as well -- many cancellations and delays there. This is what it looked
like just off the coast of the Western Scotland in South Ayrshire. So, some pretty good big waves, but the rain of course also came in. So, we
have had some pretty high accumulations. At Amsterdam 24 millimeters in the last 24 hours and 42 over there in Capel Curig which of course is in
Wales in Snowdonia, so it's a fairly high peak that one, but as I say, the winds have been very strong.
Now reports of power outages, but dozens of trees have been brought down all the way across parts, even here as you can see into Central
London. That, as I say, is where the lady died - a tree came down on her. So the winds will stay strong, but the strongest winds moving into central
and northern areas, but then there is another system coming by on the backside of that. Winds won't be as strong, but, again, as we continue
into Wednesday, just be prepared for all those major airports that still have some delays because of such a knock on effect after such a bad day
this Tuesday. Strong winds, rain across Central Europe. Also some snow, so we also have some warnings out there for potentially more very severe
weather. You can see here this area in red - we could well see those (springs) to be doing some damage. A heavy amount of snow and also chance
of tornados. Look at this snow working its way across much of central Eastern Europe and some pretty good accumulations across the line of the
LAKE: All right, Jenny, thank you so much. Jenny Harrison. We'll have a quick recap of a strong day for the stock markets when we come back.
Stay with us.
LAKE: Some news just in to CNN - automaker Daimler has sold its 4 percent stake in Tesla. The companies say that future cooperation between
any joint projects will not be affected. Meanwhile, it has been a healthy day for U.S. stocks. A solid triple-digit gain for the Dow - that was
despite a bout of indigestion brought on by some rather unpalatable fast- food results. McDonald's shares finished lower after it said profits fell by 30 percent in the last quarter. Sales in Asia were down 10 percent in
the wake of a food scare in China and Japan. Investors washed that news down with some rather disappointing earnings from Coca-Cola. Shares
finished down more than 6 percent after missing targets in Europe and Brazil. And Chipotle, the fast - Mexican fast food chain - also dropped
after it predicted slower growth in 2015.
Yahoo stock meanwhile are up 2 - more than 2 percent in after-hours trade after the strong earnings they released this hour. I'll have to wait
for that conference call, though, so watch that space closely. European markets enjoyed a day of strong gains. Investors took heart from reports
that the European Central Bank could start buying up corporate debt that would widen its asset-buying program which began on Monday. And that is
"Quest Means Business." I'm Maggie Lake. Thanks for watching. Amanpour is next.