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QUEST MEANS BUSINESS
Space Probe Lands on Comet; Banks Fined for Rigging FX Markets; Window Washers Rescued at One WTC; Dow Closes Fraction Lower; European Markets Down; Brazil Drought Lifts Coffee Prices
Aired November 12, 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 has eked out a very small gain in the last moments of trading. In fact, that gain has evaporated just in the
past few seconds. It's been that chippy-choppy sort of day. No record for the Dow, but the close has been -- hit the gavel, and all is over. It's a
Wednesday, it's November the 12th.
Remember this day. A landmark for human endeavor and enterprise. Humanity lands a probe on a speeding comet.
Bankers behaving badly again. The damning transcript that shows traders conned the markets.
And a hostage of geopolitics. Tonight, I speak to the head of one of Russia's biggest banks and find out how he's weathering the sanctions
I'm Richard Quest, we have a very busy hour, and I mean business.
Good evening. The financial world can wait tonight. One of humanity's most remarkable technological feats happened a few hours ago.
So remarkable, we've decided tonight, forget the dollar and the Dow, they will take care of themselves. Because it took 10 years and a trip of 4
billion miles. And today, a spacecraft dropped a probe onto the surface of a comet.
Now, the spacecraft involved, well, the comet is about as wide and long as New York's Central Park, and the comet is traveling at 85,000 miles
and hour, and that's the size of a washing machine. So, land a washing machine in Central Park at 85,000 miles an hour.
It's been described like throwing a grain of sand from Darmstadt to Rome, or hitting an atom. The US Rosetta project manager at the Jet
Propulsion Lab said the comet was moving 40 times faster than a bullet. Now, here's what it sounded like when it touched down and they got the
(BEGIN VIDEO CLIP)
(END VIDEO CLIP)
QUEST: These are the first pictures of the descent to the comet's surface. The director of the European Space Agency summed up the event in
just a few short words.
(BEGIN VIDEO CLIP)
JEAN-JACQUES DORDAIN, DIRECTOR, EUROPEAN SPACE AGENCY: I would like at this stage to repeat what I say after each success: the biggest problem
of success is that it looks easy.
(END VIDEO CLIP)
QUEST: It looks easy, it is hard. It's almost, paraphrasing President Kennedy. Fred Pleitgen's live for us at the European Space
Agency headquarters in Darmstadt. Good evening, Fred. What an amazing day! This is real history.
FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: This is absolutely real history, Richard. And there's so much more to it. As he
just said, it looks easy, but it was even more difficult than you said before.
It's not only about dropping this thing on the comet, a model of which I have right here. The problem was also as they dropped the lander, the
Philae lander, which I also have a model here, they couldn't steer this thing at all.
So they basically -- they dropped it out of the orbiter, which is called the Rosetta, and slowly went down here. Because it weighs 100
kilograms on the Earth. However, it only weighs one gram in space.
Now, what happened next is that it took seven hours for the thing to drop. Again, no way of steering this thing as we're going very, very fast
through space. It then landed, and there was a slight hitch during the landing, Richard.
What happened was, apparently, is that it landed -- it might have bounced again, they believe, because there's almost no gravitational field
around the comet, very, very little gravity. And so therefore, it might have bounced.
There were harpoons that were supposed to deploy. Apparently, those didn't deploy immediately. I've just gotten word from one scientist that
he believes they have deployed now, and it appears to be anchored on the comet.
Data is already coming back. What's going on right now as we speak is that because the spacecraft that's going around the comet has gone into a
different trajectory, they can't see it right now, so they're not receiving data at this point. It's a completely normal thing. They believe that in
a couple of hours' time, they will start receiving data from the lander again.
So, we haven't seen any images yet of the surface of the comet, but we have seen images of it coming close to the comet. And what the scientists
here are saying is that everything is in order, it's working, it sent data back to Earth. An amazing feat by any stretch of the imagination, Richard.
QUEST: Fred, you spend much of your working life dealing with the miserable parts of man's inhumanity to each other, in war zones and
terrorist attacks, all the sort of --
QUEST: -- the nasty stuff that people in your business have to deal with. What was it like being there when that happened?
PLEITGEN: It was pretty amazing. I have to say, it was pretty remarkable. What you have to imagine is that they dropped this thing off
the Rosetta orbiter, and they had no way of influencing anything.
So, for seven hours, they were essentially out of the loop of where this thing was actually headed, whether or not they were on the right
Then, after it went to Earth, the other thing that we have to -- that went onto the comet, the other thing we have to keep in mind, Richard: it
takes 30 minutes for every signal that this thing sends out to reach planet Earth, because that signal has to travel 510 million miles -- million
And so therefore, there was an agonizing wait that happened in between, but yes, dealing with that, looking at that, you can see that many
of the problems we have on the Earth are probably solvable if we just came together.
QUEST: Fred Pleitgen, who is in Darmstadt for us tonight.
Now, Charles Liu is the astrophysics professor who joins me at the City University of New York.
CHARLES LIU, ASTROPHYSICS PROFESSOR, CUNY STATEN ISLAND: Hello, Richard.
QUEST: It's a good day for you, sir.
LIU: It is a wonderful day.
QUEST: Were you pleased by all of this?
LIU: More than pleased. You have to understand --
QUEST: Come on. Yes, come on.
LIU: -- how excited we are about this. First of all, the technical aspect, as you described it. It's geometrically equivalent to having Rory
McIlroy stand on the moon and hit a hole in one at St. Andrews. So, imagining that kind of technology over ten years' of travel time is
LIU: But the science is even beyond that scale. I'd love to talk to you more about that.
QUEST: Well, you're here to talk about it!
QUEST: So, let's get talking about it!
LIU: All right.
QUEST: Look, what do we hope to learn from this? Because these comets -- and I know nothing about comets, other than what I've read in the
last few -- as these comets, they were there at the birth of Earth.
LIU: Precisely. When the Earth was formed and the sun ignited, there were leftover bits of dirt and ice that collapsed and formed these
LIU: And they are small and they are cold. They're like deep-frozen storage lockers of the stuff of the things that made us. So, if we want to
know the origins of our planet, of life on Earth, that's where we look.
QUEST: Is it your understanding that Philae is in the right position? It's going to be able to get on with its work? And will we see real
pictures, real examples, real experiments?
LIU: Great question. The first 64 hours will tell the tale as to whether or not Philae, this lander, will actually be successful. It was
designed so that it can land on a 30-degree angle without any trouble.
So, it looks like that maybe one of the systems that anchors it to the surface might not have succeeded completely, but the other did. But we
don't know that for sure. This object is the size of the Rock of Gibraltar --
LIU: -- this comet. So, if you take a running start, you and I take a running start off this thing, we're headed to deep space. So, it really
needs to be anchored.
QUEST: Obviously, it's worth it.
QUEST: But --
QUEST: You didn't even think of a --
LIU: Look, 1.4 billion euros --
LIU: -- give or take, right? Thousands of jobs in the high-tech industry, millions of people --
LIU: -- excited about this, right? We're learning about the origins of humanity.
QUEST: I'm going to give you a geopolitical rather than geophysics question here.
LIU: All right.
QUEST: As between Europe --
QUEST: -- the USA, NASA, who have congratulated, as one would expect they would --
QUEST: -- the Chinese --
QUEST: -- and the Indians. Does this give bragging rights for the Europeans in the global space world?
LIU: To some extent, certainly. But really, the space world is linked like never before. You can't hardly send anything up in space, now,
or to the rest of the solar system and claim that any one nation or even one consortium of nations can claim credit completely for it.
The European Space Agency is to be lauded for taking the lead for this one. But in another one, they might take a secondary role, in another one
a tertiary role. Everybody is linked. India, China, United States, Europe, everyone.
QUEST: Charles, finally --
QUEST: Professor, if I man.
LIU: Of course.
QUEST: Come on, be honest.
QUEST: Did you think this was going to succeed. When you were watching this in real --
QUEST: Did you think -- ?
LIU: Of course! The success of this thing looks easy, but all success looks easy. There are a thousand different places over the past
decade or more when this mission could have failed. But scientists and experimenters like us, doing astronomy, we're used to that kind of risk.
And every once in a while, it fails, but that's all right. Even from failure, we learn. It is really OK. Just like an entrepreneur who's
trying to start a new business, failure is not a problem. We're willing to keep going at it, and that's what's really successful about this. When it
works, we learn more than we can imagine.
QUEST: Sir. I'm so glad you came into talk to us about this.
LIU: Thank you so much, Richard.
QUEST: Thank you very much, indeed.
LIU: My pleasure.
QUEST: Thank you.
LIU: My pleasure.
QUEST: Now, from the very best of human endeavor, in a moment, some appalling behavior where the evidence is damning, and it reminds you of
just how man's behavior can get. This is chummy traders, it's fixed and manipulated currency exchanges, and banks paying fines.
QUEST: All right, put the rubber gloves on and get out the disinfectant. The subject we're going to talk about now is downright
nasty. It's Libor, sub-prime mortgages, just add to the list, foreign- exchange trading.
Some of the world's biggest banks have been found guilty again of conning the financial markets over several years. They've been colluding
to inflate profits -- their profits -- at the expense of you and me and, potentially, everyone who has financial -- uses financial services. If you
join me -- if you've got a strong stomach for miscreant behavior, join me at the super screens.
Let's begin. Because what we have here are regulators in the United States, the United Kingdom, and Switzerland. And what they've done is
slapped fines on these banks. The fines are worth billions of dollars: HSPC, Bank of America, RBS Royal Bank of Scotland, UBS, JPMorgan Chase, and
And these are the sort of numbers that have been slapped, a billion and a billion, 634, 800, 250, 618 million. It totaled about $4.3 billion.
And Barclay's is also involved. The UK says it's continuing to investigate the potential wrongdoing at Barclay's.
What were they doing? Well, put it bluntly, every minute of every day, someone somewhere, might be you, might be one of the banks, it might a
big bank, is buying and selling currencies, dollars for euros, yens for pounds, pounds for dollars, $5 trillion a day -- $5 trillion a day. The
FOREX market globally is by far and away the largest in the world.
CNN's Jim Boulden joins me from CNN London. Jim, I'm going to hold my nose at the stench --
QUEST: -- of basically insider trading here.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Yes. It is. And because it's so important to the London market, because here you have
something called the Fix. Ironic that it's called the Fix, but at 4:00 every day, they fix the rates, the value between currency.
And throughout the day, what's been happening for the last few years is that these foreign-exchange traders have been manipulating it just a
little bit to their advantage. So, what we thought we would do, we'd look at some of the e-mails that were found in these chat rooms that the
regulators had been looking at.
So, let's go through one of them. Well, so these are two bankers who worked for different banks, competing banks. One of them says, "I prefer
we join forces."
Banker at the other bank: "perfick" -- love that spelling -- "let's do it, let's double team them." In other words, go after another bank.
Banker W: "Yes, let's do it."
Let's look at another one, this is a very interesting one, I think. This guy is trying to convince another one from another bank to do the --
"Come on," other banker, "We can do this. We can fix it at 07," just a number.
So, we have, "Ha! Keeping seeing that Citibank on the bid."
Two minutes later, he sends another message that says "Nice work."
What does this mean, Richard? This means they were colluding with each other in chat rooms and other places to try to just manipulate the
number a little bit, and that would give them a little bit more profit than they would normally have, Richard.
QUEST: What I find extraordinary about this -- and the reason, maybe, I'm being so harsh tonight -- is that a lot of this activity, the so-called
relevant period in the documents, is when they already knew about Libor, Euribor fixing. So, even knowing about this, Jim -- you've been talking to
the regulator -- these traders thought --
QUEST: -- it was OK to manipulate the market. What did the regulators say?
BOULDEN: Well, they were investigating this up until October of last year, so we're talking about from the beginning of the crisis all the way
through October 2013, when they were already being investigated.
And I talked to Martin Wheatley from the Financial Conduct Authority, and he admitted they haven't even looked beyond -- before 2008, and they're
continuing to investigate to see how high this goes up. Let's listen to the interview.
MARTIN WHEATLEY, CHIEF EXECUTIVE, FINANCIAL CONDUCT AUTHORITY: Well, what we have found specifically is that the banks did not have adequate
systems and controls to manage the conflicts that exist on the trading floor.
And that conflict was, frankly, that the traders could make a lot of money if they shared information with other banks, and then they traded
against their clients, which is what the traders did. So, that specifically is what we've taken action on against these five banks today.
BOULDEN: And you found this was going on in chat rooms between the traders and the foreign exchange markets. And it's been going on for how
WHEATLEY: Well, the period that we have announced our findings on for a five-year period between 2008 and October 2013, frankly, we didn't look
before 2008. It may well have been going on before 2008.
And people were using various chat rooms and meeting after the day's events in a wine bar and creating code words, and then sharing those code
words, and then communicating every more frequently the closer it got to the 4:00 period, and 4:00 is when the price was set at FOREX.
BOULDEN: Did you find that the bank managers, the chief executives, the global people that we know, they were not aware? How far up the chain
did this go?
WHEATLEY: We haven't yet completed our investigation as to how far up the chain the individual connections went, and that's something we will
continue to do. We're satisfied that we understand the scale of the problem across the banks, and that the action that we've taken is
appropriate, given the scale of the problems within the banks.
BOULDEN: One bank that was not mentioned today specifically being fined is Barclay's, but you are still investigating Barclay's Bank, which
of course is based just a few doors down from here in the Docklands. When will we hear about Barclay's? How big could that fine be?
WHEATLEY: It -- first, it's impossible to say when. So, what we started with six banks was a desire that we would reach settlement with six
banks and a range of agencies. But we made it quite clear to the banks that if we couldn't achieve the range of agencies, we would still like to
There are some of the US agencies that have said they're not ready. Five banks said, well, that doesn't matter, they're prepared to settle
anyway. Barclay's said they'd rather wait.
BOULDEN: You mentioned Libor, which is sort of a complicated inside the banks trading system, which also was manipulated. We now have the
foreign exchange market manipulated. Both very important to the city of London. How damaged is the city of London, and what can you do to help
that reputation be repaired?
WHEATLEY: I think every time there is a scandal and there is public outrage, which clearly there is, it damages reputation, I don't think
there's any question about that. London has significant parts of global volume of lots and lots of assets.
So, in terms of FOREX, it is 50 percent of the global FOREX market. So, inevitably, a lot happens in London, and where there are scandals,
those scandals are going to be large, frankly.
BOULDEN: But these banks can pay these fines. It's not going to damage these banks. What are they going to do that's different? What are
you demanding from them, besides just money?
WHEATLEY: There's two key things that we're demanding that is different. One of them is, we're actually saying we want to check your
systems and controls now, and we want you to attest that they're changed. And we'll go in and we'll look and we'll kick the tires.
And then, the second thing we're doing is putting more responsibility on individuals. Because at the end of the day, whilst organizations can
have poor systems and controls, it's individuals who do bad things.
And the more those individuals know that we will hold them to account, the more somebody will think twice before they share inappropriate
information or try to trade in a way that they shouldn't.
BOULDEN: Now, Richard, we should point out that more banks are expected to be fined, and there are criminal investigations here in the UK
against some of these traders. So when people say no one ever goes to jail, well, we're not there yet. We're talking about the fines now.
Criminal investigations continue. Richard?
QUEST: So, pick a pocket, and you end up in the criminal courts. Swindle a couple of million and hundreds of millions and rig a market worth
$5 trillion, and we've just got criminal investigations.
BOULDEN: And do it for years and years and years. And we also know from the press releases today from these regulators, that people inside the
banks knew this was going on. One person at the Bank of England even had a sniff that something was going on, and yet, it still continued.
QUEST: Jim Boulden with that story for us in London tonight.
Just a few hours ago, New York fire crews rescued two workers who were trapped. The window has now been broken. They were trapped in a hanging
window sash -- scaffolding outside the 69th floor of the World Trade Center.
They had to break through the window to get the men out. At one point, the basket was sort of well and truly over.
CNN's Miguel Marquez joins us now from lower Manhattan. When I looked at the pictures, Miguel, earlier, it was diff -- it looked horrific in the
sense that they were always hanging --
QUEST: -- on the vertical. What's your understanding of how dangerous it was?
MIGUEL MARQUEZ, CNN CORRESPONDENT: Well, you're way up there, and this is certainly extraordinarily dangerous. But these are guys who know
what they're doing. I can tell you that the scaffold itself has been righted at this point. They were able to pull up that left side of it.
The two individuals on there, the fire department says were tethered to a safety rope, and then New York Fire had two different plans, Plan A
and Plan B. They went with Plan A, actually got them out. But they had individuals on the 68th floor that were cutting through glass.
At the same time, and as the camera moves all the way up to the top, to the 104th floor, you can see that arm sticking out with the two sort of
forks. One of those cables -- it did not snap, but it became slack. And that basket, or that scaffold or rig, as they call it, went nearly
vertical. I can imagine their stomachs must have been in another place in their bodies when that happened.
They were able to hang onto there. The fire department then lowered one cable down to them to secure them again, so that they were completely
secured from a separate system. And then they were able to lower a radio down to them so that they could communicate with them.
They were able to cut through two panes of gas, about a four-foot by eight-foot hole in the glass, one three-quarter of an eight inch, and the
other one, three-eighth inch. That's the tough part that they had, getting through that glass was the difficult part they had, and then getting them
out of there into safety, and then to the hospital.
Apparently, they only suffered mild hypothermia. These window washers, very, very tough guys. Richard?
QUEST: Mild hypothermia -- it was me, I'd have had a mild heart attack. I'd have to change my underwear afterwards.
QUEST: Thank you. Miguel Marquez, joining us from New York. Many thanks.
A quick check of the markets, and look at this. We nearly made a record, and then it all just sort of fell down around at the end of the
last 30 seconds. The Dow closed a fraction lower. It flirted with the record. After the close of trade, Cisco has reported better-than-expected
results, shares are about 2 percent higher.
The European markets in Europe, it was losses for the bank shares, which dragged the markets down. Maybe they were just hanging their heads
in shame after some of those deeds by bankers. Barclay's down 2 percent after it opted out of settling with the regulators on interest rates. Bank
of England governor Mark Carney said -- or signaled that a rise in borrowing isn't likely anytime soon.
Coffee lovers, unexpected jolt coming from your morning cup. The price of quality caffeine is on the way up.
QUEST: As we continue our nightly conversation, a crippling drought in Brazil is sending coffee prices soaring to the highest level in two
years. Brazil, as you'll be well aware, is the country and the world's biggest coffee producer.
Shasta Darlington has been to discover the damage to growers of Brazil's finest arabica coffee. And, of course, to see how it's going to
affect us all, coffee drinkers everywhere.
SHASTA DARLINGTON, CNN BRAZIL BUREAU CHIEF (voice-over): Slurping, savoring, spitting. Tasting coffee made from top quality arabica beans in
Minas Gerais. "In terms of taste, this year was very good," he says. The problem is the size of the 2014 crop and the beans themselves, shrunken by
lack of rain.
The worst drought in decades has taken its toll on Brazil's Coffee Belt. As the biggest producer and exporter of coffee in the world, what
happens here affects coffee drinkers everywhere.
Global coffee prices jumped to two-year highs when this year's harvest came in below forecasts. Coffee drinkers shouldn't expect them to come
back down anytime soon. According to the president of the Cooxupe Coffee Cooperative, the 2015 crop was also damaged during its flowering stage.
"There is no doubt that it won't be a normal harvest," he says. "We just don't know how big the loss will be."
Southern Minas Gerais, a region producing some of Brazil's best arabica beans, tends to rely on nature, not irrigation.
DARLINGTON (on camera): Here on the Santo Paulo Plantation, it was already hit hard by the drought. This year's crop was down 20 percent.
But if you look at these dry branches, which should have leaves and flowers, you can see next year's crop could be just as bad.
DARLINGTON (voice-over): Brazil needs about 54 million bags of coffee in 132 pounds each for exports and domestic consumption. The 2014 crop was
just 45 million bags, according to producers. They say next year could be about the same, thanks to the drought.
But don't worry about a global shortage. Brazilian growers can always dip into their stockpile, if the price is right.
Shasta Darlington, CNN, Guaxupe, Brazil.
QUEST: And why do I somehow just know in my heart of hearts and in my wallet, it'll be you and me that'll be paying more for our morning cup of
Now, when we come back, you're going to hear some extremely straight talk from the man who runs the second-biggest bank in Russia. The bank is
VTB, and the chief says his business is being held hostage by politics.
(BEGIN VIDEO CLIP)
ANDREY KOSTIN, CEO, VTB: We're going to be either killed or paid out or something should -- will happen. But I'm afraid we have to adjust.
(END VIDEO CLIP)
QUEST: Hello, I'm Richard Quest. There's more "Quest Means Business" in just a moment. This is CNN, and on this network the news always comes
NATO's Supreme Allied Commander in Europe says Russian tanks and troops and artillery are all on their way to Ukraine. General Philip
Breedlove says new forces are heading in to assist separatists already in Ukraine. Russia's defense ministry has denied sending troops to Eastern
Ukraine to help the separatists.
A space mission that took ten years to reach its target made history today. The European Space Program made the first-ever landing by a man-
made object on a fast-moving comet. These images were taken during Philae's descent onto Comet 67P.
A female suicide bomber has burned herself up at the Teacher Training College in northwestern Nigeria. Witnesses say one other person was killed
and seven injured. Earlier this week at least 49 students have been killed in another suicide attack. It's been blamed on the militant Islamist group
Palestinians claim Jewish settlers have set fire to a mosque near Ramallah in the West Bank. Worshipers were able to put out the fire.
Violent incidents have increased in the last few weeks. Tensions are very high over disputes because of access to a holy site in Jerusalem.
Regulators in three countries have imposed fines totaling $4.3 billion on six banks. The regulators say they failed to stop traders in trying to
manipulate the global currency market. The traders discussed tactics in online chatrooms, coordinated the buying and selling to improve prices in
their favor. These are the first fines levied since the investigation began a year ago.
The man who runs the second largest bank in Russia compares his situation to being held hostage. Andrei Kostin is president and chairman
of VTB Bank, and he didn't mince any words when he spoke to me earlier. Mr. Kostin said these are serious times for him because of the sanctions
the E.U.'s placed on Russia's state-owned banks. I asked Andrei Kostin how much pain there is.
ANDREI KOSTIN, PRESIDENT AND CHAIRMAN, VTB BANK: It does harm us, but at the moment we can cope with the help of the Russian Central Bank. Of
course we each provide additional refinancing for Russian banks including VTB and also the Russian government. The Russian treasury also provide
QUEST: If you're going to grow your global business, you have to hope that these sanctions are lifted and soon.
KOSTIN: Richard, of course. Of course you are right. But, you know, we did not invent the sanctions. We did not introduce the sanctions. So
we are the hostage or we believe geopolitical situation. So as any hostage, we can't very much influence the situation. We going to either be
killed or paid out or something should - will - happen. But I'm afraid we have to adjust to the situation now in trying to continue our business.
QUEST: When you said last week that you were considering a delisting from the London Stock Exchange because of very technical and complicated
regulation differences. Was that a threat or was it a promise?
KOSTIN: Oh, it was a threat of course. But we shouldn't do it. Actually the U.K. listing authorities will do it for us for free, because,
you know, they went beyond the sanctions actually, beyond what was a U.S. (inaudible) it's saying for example. They're forbidding to swap Russian
stocks into ADR in London, and it's been and sooner or later, there'll be no ADR - the one stock exchange. And of course that's created a problem
for investors. And it's very unfortunate. As I said, this goes beyond the sanctions implemented by both E.U. and the United States.
QUEST: Are you and your fellow chief execs - are you making representations to government, to the president, to President Putin? To
anyone who'll listen maybe that the situation with Ukraine is getting serious for the economy and for your business?
KOSTIN: Richard, we have quite a different view what's happened in Ukraine. Unfortunately, I mean, unfortunately we see that this was done
with a great assistance. It was an artificial problem and it was done by the West, and we don't know why. We very much would like to change the
situation. We're very much concerned that the more the sanctions taking place is the more we have a situation we might lead to - it might lead to -
the situation of hostility between Russia and the West - between the Russian people and the Western people. And we of course, the businessmen,
we would like to avoid the situation. We know that - I'm meeting the businessmen from Ukraine, from the West, from America. We all want to
continue business. We don't understand why we should combat each other. We would like to continue as peaceful as possible. We want cooperation
(ph) we want global oil economies developed. So, now the sooner it ends, the better. But we have completely different opinion unfortunately or who
started it and how to resolve this issue.
QUEST: You see that's the problem, isn't it, sir? You neatly put your finger on the problem. We have here a global situation where business
wants to get on with doing business, and arguably the politicians on both sides are playing their own political game.
KOSTIN: I've just come back from China and I participated in certain meetings with Mr. Putin. And he explained his position and I think he was
also - he showed he's interested in settling down this situation. So, just - we just hope that sooner or later Mr. Obama and Mr. Putin would meet in
Brisbane or somewhere else and they start to talk and they will discuss the issue, they'll find some kind of solution. I'm sure business people are
ready for this.
QUEST: Today is no ordinary Wednesday. Not only did a probe land on a comet for the first time - that's worth a bell - (RINGS BELL). It's also
the day the U.S. and China reach a landmark deal on climate change. Worth another one - (RINGS BELL). And as you're going to hear, this is a day
where history has been made. The U.S. says it will cut carbon emissions by more than 25 percent by (ph) the year 2025. China isn't promising to
reduce emissions just yet. It's (inaudible) a vow in that it will stop growing after 2030. The deal between the world's top two carbon emitters
may even prepare the ground for a new global climate change agreement which is due to take place - or the meeting is due to take place - in Paris next
The U.S. is going through its own energy revolution thanks of course to shale gas. We've spoken on that many times. I spoke to Fatih Birol the
chief economist at the International Energy Agency asking him if Washington and Beijing had now set realistic targets on emissions.
FATIH BIROL, CHIEF ECONOMIST, INTERNATIONAL ENERGY AGENCY: First all, it's a historical commitment. Historical for two reasons . First of all,
these two countries - China plus United States - they are responsible almost half of the emissions which cause climate change, number one.
Number two, after these countries commit themselves to address the climate change, plus the European commitments which has already been done a few
years ago, I think we can well go to Paris. There's a big meeting in Paris in 2015 for the climate change with a lot of hope. So therefore, from a
global picture, this is a very realistic, very historical step.
QUEST: The United States of course reaching what some would say near- energy independence, has largely upset all the calculations. The shale gas revolution - whether you believe it's got sustainability or not, has, to a
large extent, put OPEC on the back foot.
BIROL: I mean this shale revolution of the United States in terms of gas, in terms of oil, they were a real game changer -- especially for gas.
It's very good news for the United States and for the rest of the world. For example in Europe, it provided alternative to Russian gas in Europe
together with the gas coming from Africa and other countries. In terms of shale oil, it is not a victory source as much as the shale gas - the shale
oil in the United States. But it is the very reason why we have seen the crisis coming down and providing a breathing space for the global economy
QUEST: Do you think that underpinning, or if you like, that downward pressure on prices, remains? Or can you see in the next 12 months an OPEC
deciding to cut production even though it may harm their own revenues to cut production to build a new and higher floor?
BIROL: I think oil prices with the European prices being about $80 now, this is a good news for the global economy - for the economic
recovery. But at the same time, if the prices remain at these levels, we may well see that the investments in the United States for the so-called
shale oil may decline.
QUEST: The one thing we've seen in the last three to six months - the last few months - the use by ISIS - ISIL, the Islamic State, -- whatever
you want to call it -
QUEST: -- the use by ISIS of oil makeshift refineries. Now, I understand that the amounts involved are small and they're insignificant in
the global context. But it does point up the huge significance, once again, of oil and its resources in the wrong hands.
BIROL: When we look at the next few years, we, like many other institutions, expect about half of the growth in the Middle East production
need to come from Iraq. And each year in order to see this production growth in Iraq, there's a need of investment of $15 billion U.S. dollar.
But given the insecurity caused in Iraq by ISIS and others, the appetite for investment in Iraq is close to zero now which worries me for the oil
security. Oil markets around 2020s very badly need the production of oil coming from Middle East, especially from Iraq. For me, the instability in
the Middle East is a major risk for the oil security for many years to come.
QUEST: When we come back, the chief executive of Lufthansa says his company cannot stick to the privileges of the past, and he'll do whatever
it takes to restructure the German airline group. A TV exclusive interview with Carsten Spohr in a moment.
QUEST: The "Business Traveller Update," and there are comfortable ways to think about travel. It may not be economy, and it's not quite
business. It's somewhere in between. It's premium economy, and now finally of the major global airlines, Lufthansa is launching its premium
economy product. It's going to include - it's going to launch it earlier.
The perks include two free checked bags instead of just one as for others in economy, access to Lufthansa business lounge as you wait for your
flight to board. You do have to pay for that - it's something like 25 euros, but at least you're not with the hoi palloi in the terminal. And
Mile High Meals served in high style on china tableware. It's this premium economy. No flat bed, but no knees `round your ears at the back of the
For Lufthansa, with its 747-8, its A380s - it's a massive restructuring of the group which includes Lufthansa, Swiss, Austrian and
Brussels. And there's unrest within the workforce. Lufthansa, you'll be well aware, has had numerous strikes. The pilots are in angst against the
management. I spoke to the chief exec Carsten Spohr in a television exclusive and asked him if he was prepared to face down the striking
CARSTEN SPOHR, CEO, LUFTHANSA: There's no choice. To maintain the leading position our customers know us for, the markets we serve, you know,
have served us so well in this premium positioning we've established, we cannot stick to the privileges of yesterday to find the futures of your
challenges of tomorrow. So basically this question is no question. We have to maintain competitiveness, also on the cost side and we do what it
takes for that.
QUEST: Even if that means more industrial unrest. Even though you obviously don't want that, if that's what it takes, that's what you'll
SPOHR: The more I talk to my pilots, the more I find people in our corporate understanding that only a positive outlook for the company
creates a positive outlook for themselves. So, I'm quite convinced that we'll - we're - looking at more peaceful times in the next months to come.
QUEST: Everyone's fascinated by the cost concept of low-cost long- haul, and you have chosen to dangle, tantalize it, haven't you? I mean, it's Germanwings that you're going to be doing it with. I mean, can you
succeed with low-cost long-haul where no one has so far?
SPOHR: Well, Lufthansa over its 60 years history has proven in many, many cases that we are the most innovative airline in many regards. So,
yes, there is fascination about this, there's personal fascination by myself. I think there is new markets, new customer groups to reach out
for, the market is ready for it, and Lufthansa is the one who should put this outfit together. We'll be announcing more to the public over the next
QUEST: Next month?
SPOHR: Well, actually by early December we hope to be out with more details.
QUEST: Oh, come on.
SPOHR: Yes, (LAUGHTER).
QUEST: Come on.
SPOHR: No, no. We need to keep the interest up here. But believe me, whenever we do something at Lufthansa we usually do it right. This
will also apply to this morgear (ph).
QUEST: Your predecessor - sometimes it almost seems he was waging a single-handed battle against the Gulf Three. He never missed an
opportunity on the anti-competitiveness, the protectionists, whatever I'm - is this something you're going to continue? Are you going to bash away at
the perceived unfairness of Etihad, Emirates and Qatar?
SPOHR: Well, I've been in this industry long enough to take any competitor serious, and competitors build on their strength, and those
mentioned competitors build on the strength that they are very much supported by the government. So, my key message actually is to European
governments - if you want the European aviation industry to flourish, to grow again, you need at least to take some of the head winds away where
others enjoy tail winds. And that's my key message. When it comes to the competition in general, I believe now is when the customer will decide.
And the superior quality of our products I think will provide an answer in itself.
QUEST: Finally, you've been CEO now for how long?
SPOHR: Six months.
QUEST: As I always ask any CEO, are you enjoying it?
SPOHR: Oh, very much so.
QUEST: What do you enjoy? What's different about when you get into the office and you sit down and say, `oh, I'm the CEO now.' You know, it's
my decision. What do you enjoy most about that?
SPOHR: Well, believe it or not, the thing I enjoy most is working for Lufthansa even more than being CEO. I wanted to work for this airline
since I was a little boy. I started there after engineering school, I learned how to fly at Lufthansa, I flew planes at Lufthansa. So this is
the most exciting thing - to even be responsible now for 120,000 people, 600 airplanes of course is a new dimension of joy, but it just added up to
something which I have experienced over the last 25 years.
QUEST: That's quite a lot, isn't it - 120,000.
SPOHR: It is, but it's exactly what Lufthansa's success is based on. There's no such thing in an airline with a superior product, designer have
designed, engineers have put together. Our product is delivered every day, every night by those 120,000 people facing our customers. And that's what
makes it so exciting. It's a great leadership job because it's those people who make the difference.
QUEST: Chief executive of Lufthansa Carsten Spohr talking to me. On "Quest Means Business" the First World War amid the heartbreak and loss, it
left a legacy that goes on saving lives every day as we continue our special series the "War of Invention." (Inaudible).
QUEST: The International Red Cross collects more than 100 million blood donations across the world each year. Today our series, "War of
Invention" will take us into the battlefields. It's going to take us to the medics, the wounded and the field hospitals of the First World War
where invention was born of the most dire necessity. It was during the war that new strides were made in blood transfusions, thanks to the hospitals
of Flanders Fields. CNN's Jim Boulden reports.
Male: Can I just swap the hand there for you, sir?
Male 2: (Inaudible), chap.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Blood transfusions today are commonplace. But 100 years ago, it was a pioneering way to save
wounded soldiers, a medical breakthrough recognized at the World War I Galleries and London's Imperial War Museum.
LOUISE MCFARLANE, WWI CURATOR, IMPERIAL WAR MUSEUM: The Royal Army Medical Corps -- or RAMC actually - once they picked up on blood
transfusions which was sort of mainly pioneered by American and Canadian surgeons, they actually identified it as feast of the soul (ph), the
greatest medical advance during the war.
BOULDEN: As far back as the 17th century, transfusion experiments between animals and humans ended in death. It became safer once blood
groups were discovered. And once a way was found to preserve stored blood - by adding anticoagulant - it became safer to use. During the war,
surgeon Geoffrey Keynes built this portable kit before refrigerated supplies became more common.
MCFARLANE: The science behind indirect transfusions of having stored blood - refrigerated blood - available in enough (inaudible) meant that
many men - men's - lives could be saved.
BOULDEN: Posters appealed for more blood donors to donate during World War II. And while the technology has moved on, the idea remains the
same. In Wales, a state-of-the-art clinic collects, processes and distributes donations to local hospitals. Incoming supplies are carefully
processed, screened for diseases and kept refrigerated until they are needed.
CHLOE GEORGE, SENIOR SCIENTIST, WELSH BLOOD SERVICE: I think people's generosity when it comes to giving blood donations is amazing. It's done
purely on a voluntary basis. So one thing hasn't changed over the years that people have been giving blood donations is that we're still 100
percent reliant on the general public coming forward and giving blood donations.
Male: Can I have a little look, sir?
BOULDEN: The whole operation depends on volunteers like Tudor Williams.
Male: Looking really good.
BOULDEN: In return for their donation, they are rewarded in time- honored British fashion with a cup of tea and a biscuit.
TUDOR WILLIAMS, BLOOD DONOR: (Inaudible) thank you.
BOULDEN: It's a small thank you for giving up the time and to steady the nerves.
WILLIAMS: It shows the importance. I think it's important that so we continue to do it. It's important for myself, it's important for me really
to try and find time to do it, but it is painless. I think today I was told it's my 16th time that I've given blood, you know, and I hope to
continue doing so.
BOULDEN: The generosity of donors over the years lives on today from the spirit of comradeship among soldiers a century ago. Jim Boulden, CNN
QUEST: "War of Invention." We'll have more of that tomorrow and on Friday as we look into it. A "Profitable Moment" is ahead.
QUEST: Tonight's "Profitable Moment." On this program, we've heard the best of human endeavor. But of course the spacecraft and some of the
worst with the traders who've been fined for fixing the foreign exchange markets. When it comes to the spacecraft, the men and women who spend
decades to achieve their own personal goal and to move society forward. When it came to the traders who fiddled the markets, they had only personal
greed and enrichment in their minds. And whilst we can admire one and abhor the other, what is most distressing tonight is that seemingly those
traders never learn. Because while the scientists will battle on, you and I know only too well that the traders who are determined to fiddle the
system - there'll still be another one tomorrow. And that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up
to in the hours ahead, thank you for joining us (RINGS BELL). I do hope it's profitable and I'll see you at the CNN Center tomorrow.