Return to Transcripts main page

Quest Means Business

OPEC Prepares for Crucial Summit; Dow Hits New Record; Juncker's Plan to Boost EU Growth; European Markets Mixed; Ferguson Protests Spread; UK Debates Anti-Terror Internet Laws

Aired November 26, 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 closing bell's ringing, the gavel's about to be hit. The Dow is up 17 points.

(GAVEL POUNDS)

QUEST: They always do three hits on the gavel. Whatever happened to the fourth? I can tell you the Dow is at a record at the close of business

on Wednesday, the 26th of November.

Tonight, O stands for oil, OPEC, and from what we're hearing, zero chance at a change in output.

Also, it's hard to follow the pope. Jean-Claude Juncker gives it his best try.

And if you're vlogging, be careful what you're flogging.

I'm Richard Quest. We have an hour together, and I mean business.

Good evening. Top oil producers are about to decide whether they believe less is more and how they would implement such a decision. It's

one of the most important meetings of the year for OPEC, and everyone, the world is watching to see if the oil-producing cartel can agree productions.

This is the reason, very simple from there to there, a fall of some 30 percent since June in the price of a barrel of Brent. To the point now

where we're in the mid $70s from where we were just over $115. And the belief is that prices could fall even further, perhaps even just $60 a

barrel if production is not reined in.

In the coming days, these 12 countries will be the ones that'll be making the decisions. They have competing interests against each other,

and they're going to try and agree a price plan to get the prices back up again.

The core point, of course, is all the countries rely heavily on oil for their revenues, and at the current prices, the majority of them aren't

balancing the books, whether it's Venezuela or Ecuador over here, Angola, Nigeria, all would seek to have higher prices. It's probably only the big

countries here, maybe Saudi, that can make decent money at these prices.

In the past, OPEC has raised or lowered production to keep prices in check. And the country -- the country most involved is Saudi Arabia. So

far, it has refused to tighten the taps. CNN's John Defterios is in Vienna for us this evening.

John, I need you to stand by for one second in that beautiful, very festive scene behind you, while I just explain the difficulty and the

challenge for OPEC. Because OPEC's influence is waning, largely thanks to an increase in production. All taking place thousands of kilometers away.

In 2003, the US produced 7.4 million barrels a day, whilst Saudi produced 10 million. But if you move forward to 2013, now look at these

numbers. Saudi's at 11.5, but the US has ramped up its production dramatically to 10 million barrels a day.

And of course, what this all means is that it goes forward, the amount of oil being -- if you come in here -- the amount of oil being produced is

going up dramatically, the amount of oil being consumed is going down as economies slow down. So, John, that's the scenario that OPEC deals with:

an emboldened US --

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Yes.

QUEST: -- an increase in production, and a slowdown in demand. What will they do?

DEFTERIOS: Well, it's interesting, Richard, the strategy seems to be let's not panic despite the 30 percent fall, or $40 a barrel we've seen

since June. And the strategy that is emerging right now -- this is coming from the very highest levels here at OPEC, Richard -- is to shift that

burden to other players, including the United States and Russia.

There's a widely-held belief here at OPEC that the US shale producers can't survive below $80 a barrel, particularly trying to bring new fields

online. We know that Russia needs $105 a barrel to break even.

So here at the Grand Hotel, where the Saudi oil minister, Ali Al-Naimi stays, he convened the Gulf producers. They make up one third of OPEC. He

emerged from that meeting very confident that tomorrow, OPEC will come out with a cohesive strategy. Let's take a listen to what he said.

(BEGIN VIDEO CLIP)

ALI AL-NAIMI, SAUDI ARABIAN OIL MINISTER: The power of convincing will prevail tomorrow, I hope, and we will take a unified position. And I

am confident that OPEC is capable of taking a very unified position.

(END VIDEO CLIP)

DEFTERIOS: So, the Saudi oil minister is suggesting when their back is against the wall, they can make tough decisions. Richard, this is a

tough decision, by not taking any action.

The difficulty will be convincing all members of OPEC -- Venezuela needs a higher price than Russia to balance its budget, Nigeria is

suffering immensely from the lower oil revenues. They had to raise interest rates to protect the currency because their oil revenues are down.

So, this is not a slam-dunk for the Saudi strategy. But they're suggesting here with the Gulf producers having $2.5 trillion of savings,

why are we worried right now? Let's put the pressure on those who need a higher price. If they're really serious, the US and even Russia would come

to the table with cuts to offer, not just OPEC at this stage.

QUEST: John, the -- we -- the scenario, OPEC is always difficult to understand to begin with, but since in the last five years, this increase

in production in the US is the game-changer, which raises the question: is this meeting a game-changer, a watershed, whichever phrase you want to use?

Is the power shifting from OPEC elsewhere?

DEFTERIOS: Well, there's a real danger of that, Richard, and I think they're extremely aware of the fact they don't have the power they did even

a year ago. And I saw your chart earlier about the comparisons of US production. Let's add Russia to the mix, and OPEC overall, but

particularly Saudi Arabia. They're almost level peg right now, between 9 and 10 million barrels a day.

That is a game-changer in itself. And even by the own accounts of OPEC, they're suggesting today to produce 30 million barrels. They're

suggesting by 2017 it would be 24.

But high level sources here tell me, look, that calculation was done on $80 to $85 a barrel. If we're talking about $70 a barrel, they don't

think the US can sustain that sort of level of US shale production, because it's very expensive. So, I asked the UAE energy minister, is there any

reason tomorrow for OPEC to take a rush to judgment? This is what he had to say.

(BEGIN VIDEOTAPE)

SUHAIL AL MAZROUEI, UAE ENERGY MINISTER: If we learned, we learned one thing: that if you try to fix the market, that's going to be a short

fix. If you let the market stabilize itself, that's a long fix, and it's going to last. I don't think it's fair to just ask one player to play the

role to fix the whole market. That is not fair.

DEFTERIOS: I see that OPEC crude, a basket of crude is trading around $74, $75 a barrel. Is that a fair price to sustain investment within OPEC?

There should be no panic and discussions of prices going down to $60 a barrel?

AL MAZROUEI: The problem, John, in the past four years, all of the investments were done on the basis of $100. Let's not talk about a price

for us as producers. I think who is going to dictate the price and set the price is going to be those newcomers that are producing the most expensive

crude, and they need to set the price that is attractive for that level of investment to continue.

DEFTERIOS: So are you suggesting, Minister, here, that the new shale producers, for example, not just flood the market with crude? They need to

play a role as well, in terms of taking some production off the market if they want a higher price to sustain their production?

AL MAZROUEI: I think so. And I think they will do it. Either they like it, they do it either planned or by force. The question is not what

you have today. The question is what you should have two years, three years from now. The question is, the level of investments you need to put

this year and next year in order to see it in a few years.

So, if there is a decline in the price, that level of investment is not going to be there. And that's the worry, to tell you the truth.

DEFTERIOS: Doesn't this play perfectly into about a third of the OPEC producers, the Gulf producers, who have $2.5 trillion of savings? They can

ride out this storm. This is the reality right now. Not the shale producers, not Russia, not Iran. Not Nigeria.

AL MAZROUEI: Everyone has a role to play. If there is an expectation that someone should take -- should be the fixer and do more than the others

because of any other circumstances, I don't think that is a fair assessment.

DEFTERIOS: Have we entered a new normal, Minster --

AL MAZROUEI: I don't know.

DEFTERIOS: -- where maybe $80, $75 is the new normal?

AL MAZROUEI: I don't know. That's what's to be tested in 2015. We believe that a sustainable price is going to be something that is higher

than what we have seen today, not because it works for us or it's not going to work for us. I think it's because the further investments in the shale

or unconventional oil I think is going to be questionable at the current price.

(END VIDEOTAPE)

DEFTERIOS: Suhail Al Mazrouei, Richard, the UAE energy minister. You heard the strategy right there. We'll test it in 2015. We don't think

that the price will be sustainable enough for the US shale producers to continue. So, quite a battle between OPEC, the United States, and Russia.

One final point, Richard. Monday night, you and I talked about the shuttle diplomacy. Russia, Mexico, Venezuela, and Saudi Arabia got

together last night to see if they could put offers on the table.

It was unsuccessful. They left it saying let's try to revisit that topic in three months' time. I don't think we'll see anything from OPEC

tomorrow, the status quo, although they do sometimes surprise us, Richard.

QUEST: All right, John Defterios, who is in Vienna and will be at the OPEC meeting.

The markets -- the Dow ended the day, it was a new record. It was the last full trading day of the week. That's how the Dow moved, down all

through the session, and then ekes out this 12.8 gain in the last 30 minutes or so. CNN Money's digital correspondent is Paul La Monica, and

he, sir -- you, sir, will explain what happened here. Suddenly turned that red into that green.

PAUL LA MONICA, CNN MONEY DIGITAL CORRESPONDENT: We didn't go from really down that much to up that much.

QUEST: Right.

LA MONICA: It was pretty much a flat day, but this seems to be a market that just doesn't want to go down. It's stunning after the

volatility we had in September and October, we've had these just quiet, slow gains pretty much most of November.

QUEST: A quiet day, Thanksgiving holiday is tomorrow. Friday is -- Friday is a crucial day in the retailing world of the US.

LA MONICA: Without question. Black Friday, you're going to have a lot of focus on Walmart, Target, Best Buy, many iconic US retailers, to see

how strong their sales are. Are consumers coming out and spending? Or are they holding back, waiting for better deals?

I think you're going to get a sense that the deals are already out there, because this is an abbreviated shopping season. Thanksgiving's

about as late as you can possibly get in the calendar, so a lot of companies have already been aggressive. So, it'll be interesting to see

whether or not you're going to get strong consumer turnout on Black Friday or not.

QUEST: And you'll help us understand it as the week goes on and into Cyber Monday. Black Friday and Cyber Monday. A happy Thanksgiving to you,

sir.

LA MONICA: Thank you, Richard. Appreciate it.

QUEST: Thank you as always.

When we come back in a second or three, it's a big plan -- it's a very big plan. And the idea is to boost European growth. The goal is to get

the private sector putting the money. The European Commission's vice president talks about how he's going to raise $300 billion on QUEST MEANS

BUSINESS.

(RINGS BELL)

(COMMERCIAL BREAK)

QUEST: A big plan to boost European growth. The new president of the European Commission has unveiled his blueprint. It's intended to create a

million jobs. Jean-Claude Juncker admits it's an ambitious target.

(BEGIN VIDEO CLIP)

JEAN-CLAUDE JUNCKER, PRESIDENT, EUROPEAN COMMISSION: Today, Europe is turning a page after years of fighting to restore our fiscal credibility

and to promote reform. Today, we are adding the third point of the virtuous circle, and ambitious yet realistic investment plan for Europe.

Europe needs a kick-start, and today, the Commission is supplying the jump cables.

(END VIDEO CLIP)

QUEST: A kick-start with the jump cables. And it begins with something known as the European Fund for Strategic investments. Think of

that as a fancy way, a posh way of saying seed money.

Some of it comes from the European Investment Bank, slightly more comes from loans guaranteed by the EU. And the EU wants the private

sector. It's classic. Think of it also as an upside-down pyramid.

So, the actual real hard money, 21 billion euros, that comes from the European Commission, the EIB, and guarantees. That money -- that's the

only real money. But the EU says it will allow them to make loans worth $63 billion.

Now, take that and the other money, and that should attract four times as much private capital, making a total pyramid of 315 billion euros, about

$400 billion.

So, you've got real money here, leverage money here, private money at the top. The skeptics are saying the big dreams are nothing more than

illusions.

(BEGIN VIDEO CLIP)

GEROFF ANNEMANS, MEMBER OF EUROPEAN PARLIAMENT (through translator): It's hocus-pocus, abracadabra. The great magician Juncker is burying us in

fake money.

(END VIDEO CLIP)

QUEST: I spoke to the vice president of the European Commission, Jyrki Katainen, and asked him if the plan could live up to such high

expectations.

(BEGIN VIDEOTAPE)

JYRKI KATAINEN, VICE PRESIDENT, EUROPEAN COMMISSION: This is not the magic wand which would take all the tendencies away from the European

economy, but at the same time, it really makes a change.

QUEST: The core of the project immediately -- never mind the longer- term reforms and structural changes -- the core is this new fund, this European Investment Fund. Now, this relies on 8 billion or so of cash, of

EU cash, leveraged to 16 billion. But really, you're hoping private sector's going to carry the weight here, aren't you?

KATAINEN: The basic structure is as following: in the European new fund, EFSI, there will be 21 billion capital from EIB, the European

Investment Bank, but also from the European budget. And this will enable the new vehicle to lend 63 billion euros to the projects.

And according to historical data, this will attract private investments so much that the overall figure of investments in real economy

will be 315 billion. So, we are using, when counting, multiplier figures, or when using multiplier figures, we are using the historical data from the

European Investment Bank.

QUEST: You have to hope that the private sector does use that seed capital and joins in. Because if they don't join in, or if they don't join

in to the extent you expect, then your 300 billion will never materialize.

KATAINEN: Yes, that's true. But that is exactly what we are -- how we want to construct this issue, because there is no room for additional

public debt.

QUEST: What is interesting, Mr. Vice President, is this is a shift in philosophy from grants, from straightforward regional aid. You are using

the financial sector to, if you like, leverage itself. And that's different from previous ways.

KATAINEN: Yes, well, actually, there is one fundamental change. So far, we have used the EU budget mostly providing grants to member states

for various projects. But now, we are using -- or we have proposed to use more EU budget as a guarantor as a financial instrument. So, we can

leverage the EU budget more than giving just grants.

Another big issue which I want to mention is that this EFSI new financing facility will have first loss practice. So, by using first loss

practice, we can reduce the risk of private sector. And I'm sure that this will attract the private investors to participate with the infrastructure

projects.

(END VIDEOTAPE)

QUEST: That's the vice president Katainen talking to me earlier. Of course, first loss for the Europeans. Let's see if the taxpayers feel like

that if all things go wrong. The European stock market --

(RINGS BELL)

QUEST: -- and how they finished the session. The DAX was higher. It's the tenth successive day, its longest winning streak in 18 months.

The DAX up half a percent. The FTSE just barely off a tad, same with Paris, and Zurich gained as well. So there you have, two up and two down.

The anger over the Ferguson decision continues to spread coast-to- coast across the United States. The protests have taken to the streets in scores of cities calling of justice to be done over the killing of a black

teenager. We'll be live in Missouri.

(COMMERCIAL BREAK)

QUEST: More outrage, less violence. Protesters in the US city of Ferguson, Missouri are back on the streets today. Their anger has inspired

demonstrations across the United States after a grand jury decided not to bring any charges against the white police officer who shot and killed the

unarmed black teenager.

Chris Welch is live in Ferguson for us this evening. The National Guard, 2,200 of them were brought out in Missouri. I suspect, Chris, that

that weather behind you is going to do more to deter any protests than maybe 1,000 or so of the National Guard.

CHRIS WELCH, CNN CORRESPONDENT: You might be right about that, Richard. You can take a look behind me. It's snowing pretty heavily here.

And so a lot of folks thinking, well, maybe this will be a good thing tonight.

Obviously last night, things much, much calmer here in Ferguson than they were the night before, when we saw violent protests, we saw arson, we

saw more than 20 buildings and structures go up in flames. You saw rows of cars at a car dealership go in flames. Police cars.

Last night, things much, much different. As you mentioned, 2200 National Guard troops, that's what they had on hand yesterday. Now, that's

a far cry from what they had the day before. Monday night, when we saw all this unrest, there were 700 National Guard troops on hand.

So, what happened was, essentially, a lot of people here on the ground, including Ferguson's own mayor, James Knowles, criticizing the

governor for not deploying the National Guard early enough and with enough troops early on Monday night. So, obviously we saw that change yesterday.

So, that combined with, obviously, the weather here today could be a very good thing for folks here in Ferguson tonight.

QUEST: Right. Fundamentally, as these demonstrations and these protests take place in other parts of the country and in Ferguson, now the

grand jury has spoken, Chris. What is it that they want to happen. Obviously, the federal government can look at bringing civil rights

charges. But what is it that they want in Ferguson now?

WELCH: Well, I think, obviously, the investigations that are still pending, there's number one, there's an internal investigation from the

Ferguson Police Department into their own officer, Darren Wilson.

And then, as you mentioned, there's the federal investigations. There's the civil rights investigation into Darren Wilson, and there's also

a larger investigation into police interactions with the minority community here in general.

But I think the community here is trying to make a change on a much bigger scale. We're talking about race relations, we're talking about

community-police relations, and that's one thing that we've heard from Michael Brown's parents throughout all of this is they want change on that

type of level.

This isn't just about this one incident. They say it's -- the one incident being Michael Brown's killing back in August. They're saying this

is what we want, we want to expose people to the broader change. They went to the UN just a few weeks ago to try and spread their story here and try

and encourage a broader dialogue.

We've seen Attorney General Eric Holder come out, we've seen President Obama come out on a number of occasions to discuss race relations. But I

think a lot of people after the other night, last night, protests around the country maybe feeling, all right, we might need to hear --

QUEST: All right.

WELCH: -- hear more and have a bigger dialogue than just have a few of these people speaking to us. We need to have a dialogue with them

ourselves.

QUEST: Chris Welch, who is in Missouri tonight in Ferguson, where the weather, of course, is looking like it's deteriorating as the Nor'easter

comes up through the central and northeast part of the United States.

A grieving family is hitting out at Facebook for failing to prevent a brutal murder, in their view. Lawmakers in the UK are considering how to

make web companies take more responsibility. And a former spy says it's a bad idea, in a moment.

(COMMERCIAL BREAK)

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

first.

Michael Brown's mother and stepfather have spoken to CNN about the grand jury decision not to indict the police officer who killed their son.

Lesley McSpadden said when she heard the decision, she felt as though she had been shot.

The start of the Thanksgiving holiday has been delayed for millions of Americans across the northeast as a weather system is bringing more snow to

the region. Around 600 flights have been canceled. Many more are delayed.

Two brothers have become the first British citizens to be convicted of terrorism offenses after returning home from Syria. The men were found

guilty of conspiring to attend a terrorist training camp. One will serve three years behind bars and the other, four and a half years.

The Australian cricketer Phil Hughes is still fighting for his life tonight in a hospital in Sydney. Hughes spent a second day in an induced

coma after he was struck behind the ear by a ball during batting. His condition remains, obviously, critical.

British lawmakers are considering giving their security services new powers that would force Internet companies to help track extremists online.

As the British family of the soldier murdered in London last year lashed out at Facebook.

The family is blaming Facebook for not alerting the authorities about a series of posts in which one of the Lee Rigby murderers suggested killing

a soldier.

Rigby's sister, Sarah, told the "Sun" newspaper, "Facebook have my brother's blood on their hands. I hold them partly responsible for Lee's

murder." She continued, "It's totally clear from the report that this information, so vital, could have alerted our security services to this

terrorist plot." The British prime minister David Cameron says Internet firms must do more.

(BEGIN VIDEO CLIP)

DAVID CAMERON, PRIME MINISTER OF BRITAIN: We've taken action, we have passed emergency legislation, and we will continue to do everything we can.

But crucially, we expect the Internet companies to do all they can, too. Their networks are being used to plot murder and mayhem. It is their

social responsibility to act on this, and we expect them to live up to that responsibility.

(END VIDEO CLIP)

QUEST: Joining me now, Richard Barrett, former counterterrorism chief at MI6, which is the U.K.'s secret intelligence service. Good evening, Mr.

Barrett. Good to have you with us. Do you agree with the British prime minister and with the Parliament - new laws to make to enforce social media

companies - Internet companies - helping the security forces?

RICHARD BARRETT, FORMER MI6 COUNTER-TERRORISM DIRECTOR: Well, if those laws would work, they might be a good idea, but I just can't see how

they would work. I mean, the - a company like Facebook which is the company in question here, operates probably in all countries of the world.

It has 1.3+ billion members. You know, there's about 5 billion posts a day.

QUEST: But I'm surprised that you say this. I would have thought as a former chief spy, you'd be the first person saying, `Hand over your

data.'

BARRETT: Well hand over your data is a different matter of course from, you know, preventing people from posting things or, you know, somehow

regulating the Internet. I mean, the Facebook and those other companies I think are quite good at setting algorithms with throw up people who are,

you know, posting stuff with like beheading videos or other criminal activity - that's fine. And of course you can press a button or so on, on

the screen to say - to alert the company to inappropriate content. But that is different, I think from asking a company to make the decision

itself as to what may cross the line. I mean, there has to be very clear -

QUEST: Right. In this case, numerous accounts by the men involved had been deleted automatically because of the algorithms threw it up. So

we're really talking about this conversation that wasn't picked up. Should the algorithms be made stricter do you believe?

BARRETT: Well, again, you know, what standards are we going by. Either something breaks the law or it doesn't break the law. And I don't

think it's up to the company itself to say where that boundary lies. It's up to the politicians to decide, you know, what is legal and what is

illegal.

QUEST: Do you think - again, moving slightly away from this - but do you think as a matter of principle these companies are doing enough. Are

they standing on their holier than thou principles? The CIA director basically called out Google and others, saying you've got to do more. Is

he right?

BARRETT: Well, yes, sure. We would all like them to do more of course, but then I think the public at large might have questions about

that. You know, and they after all serve the public - they are commercial companies. But - and they can do more, they can do more to help, but I

think the question I would ask is, `OK, so we're happy for them to help CIA. Are we happy for them to help every intelligence (ph) and security

service around the world? You know, why should they help CIA more than another? And I think that's where the difficulties begin. So, these

things are not straightforward and I think it has - really has to be down to politicians to the international community to decide where the

boundaries should lie and not up to the Internet companies.

QUEST: We're in a new world here - whether it's the awfulness of ISIS' beheadings, the returning - you know - look at the - in the news I

just read - two brothers become the first British citizens to be convicted of terrorism offenses returning from Syria. Is it your understanding on

side the hacking, on ISIS, on all these issues that we are making progress or are we just literally treading water?

BARRETT: Well I think we're making progress because I think there's much more awareness now of the problems of radicalization, the ways that

people get radicalized. But, we still have to make more progress. You know what is the appeal of the Islamic State? Why would people want to

leave the United States or the United Kingdom to go and join it? We have to ask ourselves some pretty serious questions about that I think.

QUEST: And coming back to social media. Finally, sir, what do you believe is their responsibility? You heard me read what, you know, the

sister - perhaps understandably - is extremely critical in what she says - `they've got blood on their hands.'

BARRETT: Sure. Well the responsibilities in social media platforms is to obey the law. That's what their responsibility is. And I think they

do that best through algorithms and so on to do that. Maybe they could do a little bit more, maybe stuff gets through. But if as a responsibility

for them, it is to obey the law.

QUEST: Good to see you. Thank you for making sense of this for us tonight. Thank you.

BARRETT: Thank you.

QUEST: A security analyst tells CNN two Western governments seem to be behind a recently-discovered piece of spyware that's been imbedded on

countless computers around the world. On Monday we reported here on "Quest Means Business" Symantec, the online security company was calling attention

to the Regin bug and say it's been silently watching what users get up to in cyberspace. The experts say it's painstakingly designed to stay under

the radar and carry out mass surveillance. It eavesdrops on telecoms, networks, businesses in at least ten countries. Our business correspondent

Samuel Burke's in London for us tonight. We talked about Regin earlier in the week. But now the names or at least the nationalities of those

governments involved is known - or believed.

SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: Richard, when you - that's right. When we first started reporting on this, we talked about some of

the highest infection rates in computers being in Russia, Saudi Arabia but also Belgium. And it appears that the Belgian telecommunications company,

Belgacom, was one of the telecoms companies that was targeted. Now, they brought in a Dutch cyber security firm which is very well known, and the

CEO of that firm tells me that he and his team are convinced, Richard, -- those are his words - that the United States government and the government

of the United Kingdom are behind this spyware. Now, I have of course been in touch with NSA there in the United States. They tell me that they don't

comment on such speculation. Downing Street here in London, Richard, they tell me they don't comment on security matters. But Belgacom is saying

that they feel like they have been the victim of this, that they were -

QUEST: Right, but -

BURKE: -- they don't want to speculate, at least in public who the perpetrators are. But they do say that they're working to remedy this

problem, Richard.

QUEST: Sam -- Samuel, the - let's be clear. These - for the purposes of my question - let's assume it's the U.S. and the U.K.

BURKE: Yes.

QUEST: They're doing this for what purpose? They're not doing it to spy on Belgacom, they're doing it to spy on the people using Belgacom?

BURKE: That's right. All of the security experts I've talked to who've been pouring over this code say really Belgacom is like an

intersection where they can look at all the calls, the internet connections, the e-mails going through. They're not after really Belgacom,

they're after the people - all the customers like you and like me, Richard.

QUEST: Right, but I just want you to bring this full circle because hopefully you were listening to my discussion with the former head -

BURKE: I was.

QUEST: -- of MI6, the counterterrorism. This is getting very messy for the companies. You've got the CIA saying hand over more information,

you've now got the British Parliamentary Committee saying well they could certainly do more, and you've got Rigby's sister saying they've got blood

on their hands. And the best that Facebook can put up in return is to say, well, it's not our responsibility.

BURKE: You really have two stories showing the two extremes here, Richard. On the one hand people saying social media could have done more,

and then the other hand people might see this spyware that could be from the United State, the United Kingdom spying really on all parts of the

world and that could make people very uncomfortable. So you have this spectrum, and we're seeing both ends of this very large spectrum in these

two stories.

QUEST: Good reporting tonight, Samuel. Keep up on this one please and come back to us when there's more to report. Samuel Burke is in London

tonight. A vehicle that can take you through a warzone and help you survive an assassin's bullet. We're going to take you to the factory in

Ukraine where they'll make your vehicle to order and at a price - (LAUGHTER) - (RINGS BELL).

(COMMERCIAL BREAK)

QUEST: Time for today's "Business Traveller" update. We told you at the beginning of the program oil is down 30 percent over the past year. A

German minister said to Reuters that airlines should lower their fuel surcharges to reflect lower crude prices. So, it's something that a lot of

people are asking. Surcharges go up very easily. Why aren't they coming down just as fast. We asked American Airlines and of course the Airlines

for America. They - the trade group of course is Airlines for America - A4A - who say fuel prices are still higher than they were five ago.

They're about gallon - a dollar a gallon - higher than they were then.

Meanwhile, British Airways' parent company IAG said the decrease in fuel prices does not have an immediate, noticeable impact on our airline

given that we hedge. In other words, there's going to be no quick reduction in fuel surcharges there and China Southern - well some carriers

do seem be able to pass on the savings. China Southern has reportedly cut its fuel charges by 26 percent earlier this month. One or two other

airlines, particularly in Asia, have been very fast to cut their surcharges, which of course does beg the question, why others haven't.

And maybe - look at this. These are the airport delays at the moment as a result of the awful weather we've been seeing in the United States.

We'll talk about the delays. Boston's got an hour and 25, New York Kennedy an hour 50, LaGuardia two hours. Look at Newark - Newark is 3 hours, 15

minutes. Ivan, the weather -

IVAN CABRERA, METEOROLOGIST AND WEATHER ANCHOR FOR CNN INTERNATIONAL: Yes.

QUEST: -- is sad, the delays are bad and tell me will they get worse?

CABRERA: They are going to hold at least for the next few hours. In fact, that report there in Newark, 3 and 15, that has been at 3 hours for

the last 6 hours here. So they have not moved at all. It has been a nightmare there for folks across portions of the northeast. The storm's

actually moving north now of D.C., so conditions beginning to improve there. But most of the airports still reporting rem (ph) (AUDIO GAP) get

specific here and show you what the delays are as Richard just showed you there.

The issue is we still have ground stops, particularly in Teterboro right now, still to about 6:15, and that means that airplanes trying to get

into Teterboro are being held until they can say that's OK to come in. And so that's causing delays inbound and then of course that also creates

delays outbound as well. Look at the ground delays in Boston here now approaching 2 hour delays across Logan and Newark still at 3 hours and 15

minutes. So it's going to be a while before you can get to wherever you're headed - 1,249 cancellations, and delays upwards into 6,000 now. This is a

mess and it has been here because as you know, this is the busiest -we've been telling you - the busiest travel day in the United States in the

entire year, this Wednesday before Thanksgiving holiday. And it's still snowing pretty good.

Philly to the west - again, this is going to be a 95 storm. That means that along the 95 corridor, people that are traveling - so you get

off the plane and then you have to get into a car? Well that's going to be a problem for you if you're going west of 95 because it is heavily snowing

there and the roads are covered. Right now temperatures are falling. We'll begin to get into sunset here, and as that happens, any rain will

turn over to snow and any water on the roadways will begin to freeze up.

Here's the storm as it heads into Thursday morning, Thanksgiving day holiday. It's still snowing and it's going to be a big storm for New

England. But at this point, things beginning to improve from D.C. and it will continue heading out towards the north as far as the improvement and

the delays. Richard.

QUEST: Ivan Cabrera, you'll be watching and keep us informed as the hours move on. Now for a new meaning to the old phrase `get out and push,'

have a look at this. Get out and push the airplane. It actually happened in Siberia. The passengers had to get out and give their frozen plane a

push at the airport. The temperatures were minus 50 Celsius, it's minus 58 Fahrenheit. Oil in the plane's landing gear had frozen. It was a case of

everybody grab a wing and shove. The plane and passengers reportedly able to take off, touching down in the relatively warm areas where the

temperatures were just minus 11. That is after they'd pushed the plane.

From air ground to traveling on the ground and business travelers want to get there fast and safely. In some parts of the world, the well-heeled

traveler now goes by armored car, previously the purview of government ministers and royalty. Now, you need a car that doesn't look like it's

armored. I was in Ukraine recently to see what it takes to make a vehicle really secure.

(BEGIN VIDEOCLIP)

QUEST: And these are the men making the machines that'll keep you save in a war zone. Sculpting, welding, filing a couple of centimeters of

solid steel. This steel will stop a bullet. Armoring vehicles begins by stripping them back to bare bones.

ULIA BORISOVA, DIRECTOR, PRACTIKA: Female: First we develop the armoring to - in with the wood and then you make the design of these. And

then the flojma (ph) cuts the armored steel, and you just weld it as it's huge for the body.

QUEST: Once one is complete, the design is computerized. And then mass production can begin.

BORISOVA: We can produce about 100 per month. It depends on the order.

QUEST: Really?

BORISOVA: Really. It's not a problem for us.

QUEST: A hundred a month?

BORISOVA: Yes, we can.

QUEST: That's quite a lot. Part of the reason you only cover the bits where a bullet can do real damage.

BORISOVA: We arm more the engine compartment from the inside. This cover is not armored.

QUEST: Right.

BORISOVA: And we armor the compartment where people - the crew - is seated and the guards inside. This middle compartment is armored.

QUEST: Heavy.

BORISOVA: Yes, it is.

QUEST: Inside this vehicle, it's no frills. Now this is what you call an armored vehicle. The lack of visibility's quite amazing. But the

actual vehicle itself is quite easy to drive. While Practika's bread and butter might be armoring for the military, a civilian in a no-go zone is

much more likely to see the inside of one of these. An armored executive vehicle, most often a Land Cruiser.

Just like military vehicles, it's essential to ensure every nook and cranny of the cabin is armored. What's different is with the private care,

you hope the vehicle looks as normal as possible. How much weight does armoring add?

BORISOVA: About 7/800 additional kilograms.

QUEST: So the whole thing is nearly a ton when it's finished?

BORISOVA: Yes, yes, yes, yes mostly. That's why we need to reinforce the suspension and the brake.

QUEST: Who needs an armored vehicle? I mean, a prime minister, a minister the police -

BORISOVA: Police, those bandits sometimes, a businessman - depends on the problems that they have.

QUEST: Do you ever ask them why they need an armored vehicle?

BORISOVA: It's so private. Often I didn't know who's my customer. Sure, only their guards are ever coming - their representatives and that's

it.

QUEST: They're not bomb-proof but they'll keep you safe from an assassin's bullet. And the glass - now what will this protect against?

BORISOVA: It protects against calakafa (ph) and also sniper eye food (ph).

QUEST: It's amazing. Hundred thousand dollars?

BORISOVA: Yes. Something like - maybe 85.

QUEST: A discount for cash.

BORISOVA: (LAUGHTER).

QUEST: A discount for cash -- $100,000 as we continue in our nightly conversation of business and economics. These YouTubers have been given a

stern warning over a video of a biscuit. And the question is have the new advertising rules got teeth?

(COMMERCIAL BREAK)

QUEST: The U.K.'s advertising watchdogs criticized some of Britain's most popular YouTube stars because they promoted Oreo biscuits without

saying they were being paid to so do. Five videos were named in the complaint to the Advertising Standards Authority, and take a look (RINGS

BELL).

(BEGIN VIDEOCLIP)

Female: They have sent me some of their new biscuits which is the Oreo double-stuffed. In the spirit of the campaign, they have asked us do

a lick for it challenge.

Narrator: You will be pitted against each other in an ultimate Oreos lick race of course.

Male 1: Naked biscuit -

Male 2: Look!

Male 1: Naked biscuit -

Male 2: No!

Male 1: Dunk, dunk!

Male 1 and Male 2: Aw! (LAUGHTER).

(END VIDEOCLIP)

QUEST: Mondelcz of U.K., the maker of Oreos said it didn't mean to mislead anyone, and the vloggers were told to make it clear the video was a

promotion. So, to Chyaz Samuel. Now, Chyaz Samuel has more video watchers than most - a fashion and beauty vlogger. She joins me now form Skype -

via Skype from Manchester in the United Kingdom. Would you, Chyaz, would you have done what they did with the Oreo cookies?

CHYAZ SAMUEL, BEAUTY AND FASHION VLOGGER: I think that the thing is that up until now it hasn't been really clear what vloggers are and aren't

meant to say when they're disclosing it is video-sponsored. So, I think the thing is, and people have done what they think's right up until now,

but these new guidelines are going to help people be actually right.

QUEST: Let's have a look at some of your work, Chyaz, and see exactly how you have handled this situation if we take a quick look.

(BEGIN VIDEOCLIP)

SAMUEL: Lovely, lovely people from Paris very kindly sent me a parcel with some goodies therein to try out and obviously I wanted to show you

them today.

(END VIDEOCLIP)

QUEST: Now in this case, you're quite transparent that you got the goods free, but I don't know whether any money changed hands in that case.

Did it?

SAMUEL: No, not at all. So Claire's sent me these products and they sent me another gift and I really loved them so I decided to share with my

viewers.

QUEST: Right. Now, here's the point - because at the end of the day, just as much as I'm talking to my viewers tonight, you're talking to your

viewers when you do your vlogs. You have a duty to be honest, fair, transparent, but most of all, would you agree to have integrity?

SAMUEL: Absolutely. That's something I've tried to do from the very, very beginning on YouTube. I started making videos about five years ago

and from the word go, I was always incredibly honest with my viewers.

QUEST: Great.

SAMUEL: And I started from there. I'd love to continue, oh you know, as long as I make videos. So, these guideline checks (ph) will be very

helpful.

QUEST: How will they change? I mean, let's say for example, Claire's sent you something that you didn't like or somebody said something that you

thought actually that's a lot of old rubbish. Would you have the gumption to say to your people, `Well look, I love this product by this company, but

frankly the other one's a bit of old rubbish.'

SAMUEL: I have done that in the past, so I have made videos where I've shown a collection of say makeup products and one of the products has

been amazing and the other one has been a little bit rubbish. And I very openly said that I've got to be as honest as possible, I didn't get on with

this product. So, I have done that in the past and I would do it in the future.

QUEST: And how do you make your money?

SAMUEL: So, it varies really. So, some of the times a company will sponsor me to create a particular video, I can make a tutorial, or I'll

have full creative control over what I actually do but they'll sponsor the video. I - they provide in the product store and just generally funks

range (ph) and ads on the YouTube video in general or I'll make videos with brands to bag (ph) each to channel to.

QUEST: Right. And finally, as you move into this - because you're in a new world that old fogeys like me can barely understand, let alone handle

and know where it's going. But as you move forward, what would you say to any viewer who wants to vlog?

SAMUEL: I think the main thing is that you've got to be yourself, you've got to be honest, you've got to be likable and friendly, and as long

as you're creating content that people want to watch, you know, doing it in your own way, being unique and you can't really go wrong.

QUEST: Chyaz, when you're in New York, we've got a seat for you here on the desk. We look forward to you joining me -

SAMUEL: Thanks.

QUEST: -- to give me a couple of fashion tips.

SAMUEL: (LAUGHTER).

QUEST: Update my wardrobe for me. Thank you very much for joining us tonight. Be your own, be yourself. We'll have a "Profitable Moment."

(RINGS BELL) after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's "Profitable Moment." We open a hornet's nest when we talk about fuel surcharges. When the price of oil goes up, airlines put

surcharges higher. When the price of oil goes down, airlines come up with an entire variety of reasons why they can't reduce the surcharges - they're

only just making money, it's only a small part, there's hedging, you name it, any excuse. The reality is of course that we know what's going on.

The surcharges go on to improve the balance sheet, the surcharges don't go off because they're improving the balance sheet. The truth is if you ever

try and find out what the surcharges are - how long they've been and when they'll be removed - good luck to you, you'll need a degree. The truth

what we need in the future is a bit more transparency and a bit of honesty. And that is "Quest Means Business" for tonight. I'm Richard Quest in New

York. As always, whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. Let's get together tomorrow.

END