Return to Transcripts main page
Quest Means Business
Deadly Anti-Terror Raid in Belgium; Swiss Franc Soars as Currency Cap Lifted; Surprise Swiss Move Ripples Through Economy; US Eases Travel Restrictions to Cuba; Airbus A350 Makes First Passenger Flight; Make, Create, Innovate: Controversial Cancer Treatment Divides Doctors
Aired January 15, 2015 - 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: US stocks fall into the red after markets got a huge, swift surprise. It's Thursday, January the 15th.
Tonight, a tsunami from Switzerland. The central bank shocked the markets by letting the franc trade freely.
Next stop, Havana. The US makes it easier for Americans to travel to Cuba.
And we'll take you aboard the A350's first commercial trip with some very important passengers.
I'm Maggie Lake. This is QUEST MEANS BUSINESS.
Good evening, I'm Maggie Lake filling in for Richard Quest. We'll have the day's business news in just a moment, but first, we begin with
breaking news out of Belgium. An anti-terror operation in the east of the country has left two suspects dead. A third was injured and taken into
custody.
Belgian officials say the group was planning major attacks in Belgium and Europe. Police believe at some of the individuals have ties to ISIS
and had recently traveled to Syria. A spokesman for the federal prosecutor in Belgium spoke to the media about the counter-terrorism operation in the
last hour.
(BEGIN VIDEO CLIP)
ERIC VAN DER SYPT, SPOKESMAN FOR BELGIAN FEDERAL PROSECUTOR (through translator): The investigation made it possible to determine that the
group was about to carry out major terrorist attacks in Belgium imminently at Verviers. The suspects immediately and for long minutes fired, using
war weapons and hand weapons before being neutralized.
(END VIDEO CLIP)
LAKE: Let's get out to John Berman in Paris for the very latest. And John, obviously the story developing, what do we know? And I suppose
importantly, do we know whether there is any link to what happened where you're standing in Paris?
JOHN BERMAN, CNN CORRESPONDENT: Our senior national security correspondent Jim Sciutto told me just moments ago, right now they believe
there is no direct connection between what has happened here in Paris just week ago and what happened over the last few hours in Belgium.
I did listen to that news conference, Maggie, from Belgium. Belgian officials say this raid, this anti-terror raid was directed at what they
called an "operational terror cell" that was planning an "imminent major attack" inside Belgium. Those are chilling words.
This cell was made up of individuals who had returned from Syria, and our analysts say had been fighting alongside ISIS in Syria. And again,
what our analysts have heard from Belgian officials there is that it was ISIS who directed these men to go back from Syria to Belgium to conduct
terror operations there against the West in response to the coalition airstrikes against ISIS in Syria and Iraq.
Belgium is part of that anti-ISIS coalition. Our Paul Cruickshanks told me moments ago this is a watershed moment for ISIS. Up until this
time, they'd been more of an inspirational terror group around the world, telling their followers who might be faraway places to rise up and commit
acts of violence.
But it is a much different thing to bring people to Syria and Iraq and have them fight alongside you and train them, and then send them back to
these nations in direct terror operations back at their homes.
This one was happening in Belgium, part of ten separate raids, we're told, around the country in four separate cities. And interestingly
enough, that news conference from Belgian officials was very brief. They said they could not tell us much, leaving the impression that these raids,
these operations, perhaps, still ongoing overnight in Belgium. Maggie?
LAKE: Yes, and that is an important distinction you bring up, John, about this being a watershed moment. Where do we go from here if we are in
this new chapter? What happens next? And they have a suspect in custody.
We know in France, they're also pursuing another suspect related to the issue there. Do we know how wide this is? And I'm sure they're on
high alert for something to happen.
BERMAN: We're told that all across Europe right now they have been on alert, looking for the possibility of people coming home from Syria, from
Iraq, to conduct just this type of terror operation.
Now again, what's going on in Belgium, we are told, is separate than what was going on here in France. The Belgians still conducting this
operation, perhaps looking for more pieces of this cell or more people engaged, perhaps, in trying to conduct terror acts against Belgium there.
Of course, here in Paris, still very much hunting for possible accomplices to the two terror attacks here. One, the first of places,
Charlie Hebdo, the offices of the satirical magazine. The other at the Kosher supermarket.
We're learning a lot more about those investigations. The suspect in the Kosher market attack, Amedy Coulibaly, had traveled to Madrid in Spain
the week before that attack before driving back to Paris. His girlfriend was with him in Spain. She flew to Istanbul.
And Maggie, that just gives you a sense, the international scope right now of terror in Europe. You have people conducting investigations in
Madrid. Now, obviously, in Belgium, where there was just this raid. Here in Paris. There was a man arrested in Bulgaria who was believed to have a
connection to the Charlie Hebdo attackers. And of course, everything that's going on in Syria.
Not to mention, to add one more, al Qaeda in the Arabian Peninsula in Yemen, which claimed credit for directing the Charlie Hebdo attack.
Maggie?
LAKE: A lot of threads to pull together. John Berman for us in Paris tonight. Thank you, John. And we will bring you the latest developments
in that story as we get them in.
Meanwhile, Switzerland has stunned the global markets after its central bank let the Swiss franc run free. Now, a cap preventing the
currency from appreciating against the euro has been removed, and it sent the franc skyrocketing.
Queues stretched outside currency exchanges in Geneva as people rushed to change their francs for euros. Investors were predictably spooked, and
Swiss markets took a nosedive. It was one of its biggest single-day drops in decades, roughly $90 billion was wiped off the Zurich SMI. The Swiss
National Bank chairman, Thomas Jordan, defended the move, saying the cap was no longer sustainable.
(BEGIN VIDEO CLIP)
THOMAS JORDAN, CHAIRMAN, SWISS NATIONAL BANK (through translator): The Swiss National Bank decided that it doesn't make sense to carry on with
a policy that is not sustainable and that can only be carried out by constantly intervening in the market.
(END VIDEO CLIP)
LAKE: If you want to know how much of a surprise this was, listen to the reaction from the Swiss business community. In an e-mail statement,
Nick Hayek the chief executive of Swiss watchmaker Swatch said, quote, "Words fail me. Today's Swiss National Bank action is a tsunami for the
export industry and for tourism and finally, for the entire country."
For more, our Jim Boulden joins us now, live from London. And Jim, this was an absolute shocker. We saw investors really scrambling, barely
knowing, really, how to react.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Yes.
LAKE: Talk to me about the ripple this had, because it wasn't just currency markets, was it?
BOULDEN: No, not at all, and it wasn't just some stock markets. Now that the Swiss National Bank has ripped this band-aid off, allowing the
Swiss franc to soar, Maggie, there are so many ripple effects.
Why did Swiss shares fall so hard? Well, because from watches to chocolate to pharmaceuticals, Swiss products just got a whole lot more
expensive. Meaning they will certainly find it harder, of course, to export their products. You think of all these companies that just export
around the world. It's all gotten a lot more expensive.
What about tourism? Well, just think of all those world leaders and the business elite heading to Davos for next week's World Economic Forum.
Their money is not going to go as far as it would have earlier this week. Well, an expensive country just got a whole lot more expensive.
That also means people who might have booked a skiing holiday to Switzerland might instead switch to go to France or to Italy, with a nice,
cheap euro.
And finally, gold. Like a lot of commodities, gold has gone off the boil, but not on Thursday. Gold hit around a four-month high, up some 2
percent, because the franc took off. There's nothing like a safe haven, and there's nothing like gold when people aren't really clear, Maggie,
what's going on.
LAKE: Yes. And they are not comfortable, that is for sure. Jim Boulden, thank you so much, in London.
Joining me to discuss this is Sebastian Galy. He's senior currency strategist for Societe Generale. Thank you so much for coming in today.
You must be exhausted. This was -- this came absolutely out of the blue. People were surprised. Just walk me through what the reaction was that you
saw on the markets today and how some of your colleagues responded.
SEBASTIAN GALY, SENIOR CURRENCY STRATEGIST, SOCIETE GENERALE: Absolutely stunned would be the short version of it. Essentially, what
happened is the market collapsed. It ceased to exist for minutes up to hours, there were effectively no Swiss franc exchange rate. Nobody could
figure it out.
There was an extreme panic amongst people who trade derivatives, because it's much more leveraged. And what we saw is a move that we
haven't seen even in the Russian ruble, which collapsed itself over the past few months.
So, a lot of very heavy stress. And the thing is, we haven't really seen the full consequences of this. We don't really know what the actions
of many corporates and others will be in the next few days. They didn't have time to do anything.
We don't know what the credit consequences are. A lot of people lost very large amounts of money, and we can only guess who and by how much it
is. And the consequences could be somewhat difficult.
LAKE: And I want to explain why that's so important. Because anytime we see something this disorderly and people taking major losses, they then
often have to turn around and sell or liquidate other holdings they may have in order to cover those losses, and then you sort of get this
spiraling effect.
It seems that -- in the global economy where we are now, financial regulators, authorities, policymakers, do everything they can to avoid this
sort of disorder. Why did they pull the rug out in this manner, not tell anyone, not communicate, not coordinate? It would seem the IMF didn't know
about it. It would seem that this doesn't make sense, based on everything we've seen happen in recent years.
GALY: Well, the argument that then SNB would make is like a general going into a war, they're not going to reveal the plans and when they need
to change it.
LAKE: Right.
GALY: And so, they follow the original plan. When they have to change it, of course, they're going to surprise. They've know that for the
past few months that they were going to change their policy. The market was starting to anticipate that there would be eventually such a change.
The objective of the SNB, of course, was to hold the floor and therefore to maintain the original strategy. Therefore, it has to surprise
the market. What it may have been surprised with is the intensity of the move in the Swiss franc and the potential liabilities that it means in the
rest of the financial system, and particularly for the corporate space. I think the consequences are fairly dreary
LAKE: So, what should we be worried about? If we haven't really seen the fallout yet, what will happen?
GALY: Well, for the Swiss economy itself, you're going to see -- we're talking about tourism in Davos and other places. I love to -- I
lived many years in Switzerland, it's wonderful, right? They're going to suffer tremendously.
But also, long-term investments in Switzerland suddenly have become extremely expensive. Within the Swiss financial community, the labor
costs, or the costs of employing people like me has increased significantly. Better be in Singapore, better be in the US than being in -
- or go to Frankfurt.
So, the consequences will be assessed in the next few weeks, and there might be some very hard-hit on the Swiss economy. The Swiss believe -- or
the SNB believe that the Swiss was -- Swiss economy was very resilient because it had done very well with a strong Swiss franc. I think it has
underestimated the impact of its latest decision.
LAKE: And how much further to go in some of the core movements? We're talking about fallout there, but we saw the Swiss franc appreciate so
sharply today, but as you're saying, there wasn't really a functioning market. We saw the stock market in Switzerland have its biggest drop in
decades. Are you expecting that to continue? How far will that currency move?
GALY: Well, probably what's going to happen in the next few days is probably the reverse. We might see the Swiss franc weaken a little bit
because the move has bee outsized, and you get some normalization. However, it doesn't really indicate much regarding the direction.
And the direction will be a function of A, some potential credit event. Number 2 is the willingness of the SNB to intervene in the Swiss
market. They were sick of intervening. They will intervene a lot more going forward, unfortunately for them.
And it also depends, of course, mostly on the dollar. The Swiss franc may become a funding currency for investors going into the US market.
Everybody wants to be in the US. And the Swiss might get lucky and the Swiss franc becomes a main funding currency, therefore, weakening the
currency.
LAKE: An awful lot of unknown, Sebastian, and we know how investors feel about that. Thank you so much for coming in after what was, I'm sure,
a very trying day for you as well.
GALY: Thank you so much for having me.
LAKE: Sebastian Galy from Societe Generale.
Well, a new era in ties between the US and Cuba. When we come back, the details of new American regulations that will make travel easier to
Havana and the rest of Cuba.
(BEGIN VIDEO CLIP)
(CUBAN MUSIC)
(END VIDEO CLIP)
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
(CUBAN MUSIC)
(END VIDEO CLIP)
LAKE: The White House released details to day of how it will ease trade and travel restrictions to Cuba. American tourists will find it
easier to visit the island country just 140 kilometers away from the US mainland. Senior White House correspondent Jim Acosta is in Washington,
Karl Penhaul is in Havana for us.
Let's start with Jim in Washington. Jim, I'm sure, like many of us, I've stood at that point in Key West and looked at that sign that said 90
miles away.
JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Right.
LAKE: I think there is this sense where we see these headlines that the airplanes are going to be full and we're all going to be booking our
vacations in Cuba. Not quite the case, is it?
ACOSTA: Not quite the case. But you will be able to book trips to Cuba in, perhaps, the near future. I was on a background conference call
with administration officials earlier today who were walking through these new regulations, and essentially what they're talking about is really
loosening the restrictions on American travel to Cuba.
US citizens will be able to travel there for a whole range of reasons: cultural, historical, religious, journalistic. People can even go down
there and watch a baseball game, attend athletic competitions.
The one thing that US travelers will not be able to do, they will not be able to go and lie on the beach and sip mojitos. That is not authorized
travel against -- under these new regulations. And as one administration official told me earlier today, that is a violation of US law.
So, there are still some quirky restrictions here that Americans are going to have to deal with, but they will be able to in the near future buy
a plane ticket or book tickets through travel agents to travel to Cuba without needing the permission of the US government first, and that is a
new development.
LAKE: Jim, these -- after decades and decades of this policy, the relations seem to be thawing so quickly, but there is still resistance,
isn't there, in Washington? Not everyone's happy about these developments.
ACOSTA: That's right. Cuban-American politicians up on Capitol Hill, like Senator Marco Rubio from Florida, Republican, potential presidential
contender. He said that this is just going to inject cash into Cuba and prop up the Castro government. He's very much against this, as well as
Cuban-American lawmakers up on Capitol Hill.
What the White House said today, and they were asked about this today, is that they -- that the United States has tried this embargo approach for
50 years, and it just hasn't worked. And that is why the president is determined to go in this new direction.
So, in addition to people being able to travel to Cuba, bring back $100 worth of cigars and Cuban rum with them -- that's one of the other
restrictions -- that the US is moving forward with opening up a US embassy in Havana.
Now, those Cuban-American lawmakers up on Capitol Hill are going to try to stand in the way of that, but it's not exactly clear they will be
able to at this point, Maggie.
LAKE: Extraordinary. All right, Jim, thanks very much.
ACOSTA: Sure.
LAKE: Karl, the view from Cuba, what is this likely to mean for Cubans? What is their reaction? What it effect will it have, especially
on that economy?
KARL PENHAUL, CNN INTERNATIONAL CORRESPONDENT: Well, I think there are several potential impacts, and some of them we will find out over the
coming weeks and coming months. But in terms of tourism, as Jim rightly says, this is not a general permit for American tourists to come to Cuba,
but essentially, they can come here, jump on a plane, and come here, as long as they fit under 12 categories, they can self-license.
That basically means, given that the US authorities aren't going to be on Cuban soil checking whether they're on the beach or drinking mojitos,
essentially, as long as they get back to US soil with 12 excuses why they've been in Cuba, they can come here.
And so, the Cuban government is planning for an influx of potentially 1 million new US tourists next year. That would be added to the 3 million
international visitors Cuba already has, so it's a 25 percent boom in tourist numbers.
And that is where opponents in the United States are saying that that will give valuable new income to the Cuban government. But at the same
time, what it will also mean is that some of those tourist dollars also end up in private hands, people who provide tourist services, people who have
private small businesses and restaurants.
Also, what we shouldn't forget is the new decision by the Obama administration to allow a fourfold increase in remittances that Americans
can send to their relatives here in Cuba. And that really does put a lot more cash in hands, in private hands in Cuba.
And although, yes, I do understand the claims that in the short term this could help the Cuban government, in the long term, what it is going to
do in Cuba is stoke economic class divisions. We're going to create classes where there are haves and have-nots.
And that, in the longer term cannot but fail to provoke political class divisions as well. Maybe this is a back door at chipping away at
Cuba's socialist system, Maggie.
LAKE: The beginning of many, many big changes for both countries. Karl Penhaul for us in Havana and Jim Acosta in DC. Thank you so much to
both of you.
Well, Airbus has taken a special journey of its own. The company's new aircraft, the A350, has taken its first commercial flight, and you'll
never guess who was invited along for the inaugural trip.
(BEGIN VIDEOTAPE)
RICHARD QUEST, CNN INTERNATIONAL (voice-over): This is the new plane on the block, and everything had to be scrubbed, polished, and buffed for
its first day on the job. In the early hours before the sun was up, the plane was prepped and prettied, ready to make aviation history.
QUEST (on camera): Recognizing the A350 at an airport is easy, even for the newbie. It's got this beautiful swept wing at the end.
QUEST (voice-over): This is an aircraft that simply looks cool, like it's wearing sunglasses. On any inaugural flight, you can guarantee the
aviation geeks will be out in force, and here they were, ready to board, snapping, admiring.
UNIDENTIFIED MALE: Beautiful, isn't it?
QUEST: Also onboard, two particular chief execs. The one on the left is the head of Airbus. He built the plane. The one on the right is the
head of Qatar Airways. He paid for it.
A picture-perfect takeoff, and for the aviation geeks, a chance to explain why they wanted to be onboard.
UNIDENTIFIED MALE: I'm an av geek, so I love chasing planes, chasing new airlines, chasing new airplanes. It's exciting.
BEN SCHLAPPIG, BLOGGER, ONE MIKE AT A TIME: It's the romance of flight. It has to be that. It's the excitement, it's the energy level,
and it draws the enthusiasts from around the world, and it's a great feeling.
QUEST: That great feeling was also felt by Airbus's chief executive.
FABRICE BREGIER, CEO, AIRBUS: It's a very emotional flight for me because we have been working for ages to get to this first flight. And
it's a lot of effort, it's a fantastic aircraft, it's a fantastic cabin. And this is a 50 pursuit of a future at Davos.
QUEST: It doesn't matter if it's the comfort and space of business or the coziness of economy, for Qatar's chief executive, romance has to be put
aside for the moment.
AKBAR AL BAKER, GROUP CEO, QATAR AIRWAYS: I'm very pleased. You can see that everything is perfect, all the amenities for the passengers are
around. Seats are comfortable, flight is full. What more do you want from a CEO?
QUEST: Pack them in to make money can probably wait for the moment as we mark this aviation milestone.
QUEST (on camera): So the A350 is flying with paying passengers for the first time, and at just a year or so late, in aircraft terms, it's
pretty much on time. With nearly 800 of these planes on order, this aircraft is coming to an airport near you.
Richard Quest, CNN, onboard the A350.
(END VIDEOTAPE)
LAKE: And we will be right back with more in just a moment.
(COMMERCIAL BREAK)
LAKE: The parents of five-year-old Ashya King when they pulled him from an English hospital hoping to get him controversial treatment for his
brain cancer. Ashya is now receiving proton therapy in the Czech Republic, a method which has divided doctors. Ashya's parents say that without it,
their son would have died. In tonight's Make, Create, Innovate, Nick Glass meets the pioneer behind the protons.
(BEGIN VIDEOTAPE)
NICK GLASS, CNN INTERNATIONAL CORRESPONDENT (voice-over): We all know someone with cancer, a relative or a friend. The standard treatments,
chemotherapy and radiotherapy, are draining. And while they can be effective, they also destroy healthy tissue.
GLASS (on camera): I'm here in Belgium to meet a pioneer of an alternative way of treating some cancers, a method that's very precise and
with minimal side effects.
GLASS (voice-over): Yves Jongen is from Belgium. Unusually, he's both an engineer and a nuclear physicist, complimentary disciplines for his
day job: playing with protons.
YVES JONGEN, IBA: I started designing the equipment to make proton therapy of cancer, and that was a radically new idea.
GLASS: Down we went into a bunker with two-meter-thick concrete walls, a radiation shield around Jongen's device, the Cylcotron. And here
it is: 200 tons of steel and copper all needed to generate a proton beam to treat a cancer patient.
JONGEN: In this space, we accelerate the protons, and we give them a higher and higher velocity until they each two-thirds of the speed of
light, 200,000 kilometers per second. And this acceleration takes place in the shape of a spiral, but that's needed if you want to be able to
penetrate one foot in the body of a patient.
GLASS: Once the proton beam has been generated, it's piped off into a treatment room like this. The patient lies on a bed, the tumor is targeted
and then bombarded with a stream of protons, deliberating a powerful dose of radiation only to the cancerous cells.
JONGEN: So basically, you can do the same tumor destruction while doing a lot less collateral damage to the patient. That's the great thing
about proton therapy.
GLASS: But there is drawback. It's only effective against certain types of cancer.
JONGEN: There is a number of cancers which are not localized. If you look at leukemia, leukemia, which is a cancer of the blood cells, well,
there is nowhere to shoot. It's in all the body.
GLASS: Jongen's cyclotrons are all manufactured on site in Belgium at his company IBA. Each system and the bunker needed to house it doesn't
leave much change out of $125 million. But they have developed a smaller, cheaper model that they hope will make proton therapy more accessible.
JONGEN: So, it would be much less expensive, and therefore much more possible for a hospital to afford the smaller system. And actually, the
smaller system could treat already a relatively large number of patients per year.
GLASS: Currently, only 1 percent of cancer patients are treated this way. But Jongen is hopeful that this will increase substantially with
time.
GLASS (on camera): As a pioneer in proton therapy, you must have had thank you letters from people.
JONGEN: Yes.
GLASS: What do they say?
JONGEN: Well, I have a number of letters of parents of young kids saying if it had not been for this treatment, we would have lost our kid.
And that's something I cherish and keep graciously. And when I feel a bit depressed for whatever reason, I go back to those letters, and they are
very exciting.
(END VIDEOTAPE)
LAKE: Empty shelves and long lines in Venezuela, they are becoming a way of life, and that's got tempers flaring and violence erupting on the
streets. We'll have the details next.
(COMMERCIAL BREAK)
LAKE: Welcome back, I'm Maggie Lake. In the next half hour canceled projects, delayed investments -- energy companies change course in response
to falling oil prices. And why making money won't win you an Oscar. The nominations are in, but first here are your top world headlines.
Police in Belgium have raided a group suspected of plotting major terror attacks in a city east of Brussels. The anti-terrorism operation in
Verviers left two people dead and one wounded. It's believed the alleged Jihadists were linked to the Sunni extremist group ISIS and had just
returned from Syria.
Funerals were held in France Thursday for five more victims of last week's terror attacks. Those laid to rest included two "Charlie Hebdo"
cartoonists as well as the policeman killed at the magazine's offices. Pope Francis has weighed in on the events surrounding the "Charlie Hebdo"
attack. Arriving in the Philippines at the beginning of a five-day tour, the Pontiff said freedom of expression and religion are right but one
cannot insult other people's faith.
The Swiss franc was sent soaring against all major currencies after the Swiss Central Bank announced it will be allowed to trade freely against
the euro. The bank lifted a cap on the currency that had been in place since 2011 to prevent rapid appreciation. The move sent Switzerland's
stock market plunging.
The nominations are in for this year's Academy Awards. Among those getting the nod for best picture - Boyhood, Birdman and The Grand Budapest
Hotel. A swag of nominations went to independent films and left out a number of this year's blockbusters for any major awards. The ceremony will
be held on February 22nd.
More on our top story tonight -- IMF chief Christine Lagarde says she was a bit surprised that the Swiss National Bank chairman did not contact
her before making the decision to lift the cap on the Swiss franc and let it trade freely against the euro. The Swiss markets were certainly taken
by surprise. UBS, Julius Baer, Richemont and Swatch, all Swiss companies, posted massive losses. This all happening just ahead of the European
Central Bank's January meeting were the announcement of a monetary stimulus program is widely anticipated. Earlier I spoke to Ken Rogoff, a professor
of economics at Harvard University. I asked him to explain why the Swiss Central Bank chairman made the sudden move.
(BEGIN VIDEOCLIP)
KEN ROGOFF, PROFESSOR OF ECONOMICS, HARVARD UNIVERSITY: The floor that Switzerland had put on its exchange rate has been regarded by many as
the most successful intervention ever by a Central Bank because they seemed to do something impossible -- with this huge flight to safety, prevent the
Swiss franc, which is considered very safe, from going even higher. But the problem is as the euro falls and falls - and I think it looks less
likely/it's less likely (ph) to fall further, -- they are pegged against the euro, not the dollar and inevitably had to abandon it. By the way,
they had accumulated massive reserves in this process. Think of it as three times what the U.S. Federal Reserve did, and that was finally just
getting to be too much of an issue.
LAKE: So, as we said in the intro, it seems to be now sort of, you know, a foregone conclusion that we are going to get something from Mario
Draghi. It's important perhaps to remind everyone we have - the market - has been terribly disappointed in the past. Will the ECB finally deliver
on massive stimulus? And will it be big enough, will it be impressive enough to finally help revive what seems to be an increasingly worrying
picture for the Eurozone economy?
ROGOFF: Yes, well I mean some of the reason they have deflation right now is because oil prices are falling which is fantastic for Europe. But I
think Mario Draghi's going to use that as leverage to push his fellow council members into taking more dramatic steps than they have. You know,
the ECB has disappointed. I think it's hard to predict what they will do because quantitative easing doesn't mean the same thing and the Eurozone
which doesn't have a single euro bond that it does in the United States.
But I think the best chance is that they will move pretty aggressively, do something where they buy all the Central Bank - all the
funds from all the countries - maybe in proportion to their shares in the ECB - raises a question mark, but I don't think it's the big picture which
is just is he going to say as much as it takes, is he going to give a fixed amount that they're going to buy? I hope of course it's the former.
(BEGIN VIDEOCLIP)
LAKE: The oil glut is causing a slowdown and in some cases the halt to production projects around the world. A $2 billion project off the
coast of the Falkland Islands, Premier Oil's so-called Sea Lion fields will be delayed. The firm says that since oil prices recover. In western
Canada, Canadian Natural Resources is deciding to slash spending at its Kirby Oil sand project. In Greenland, Norway's Oil deciding to give back
three off-shore oil and gas exploration licenses. In Qatar, Qatar Petroleum and World Dutch Shell scrapping plans to build a $6.5 billion
petro chemical plant. And off the coast of Mauritania the Tullow Oil writing off more than more than a billion dollars in exploration drilling
and spending.
Well when you boil it all down, the global oil business is really like a game - supply and demand mixed with the reality of recession and economic
booms. It's a gamble that can generate billions of dollars or put you out of business.
I recently matched with Richard Quest in a showdown. We played - what else? - the Oil Game. Yes, it actually exists.
(BEGIN VIDEOCLIP)
RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Be prepared and be afraid.
LAKE: Bring it on.
QUEST: In the game of oil the stakes have rarely been higher. Oil! Crude is piling up, prices are low.
LAKE: We are the rival oil companies sitting on piles of cash.
QUEST: We've got all this cash. The question is how to spend it to beat you.
LAKE: Well, we've got falling oil prices, so that's going to make exploration more expensive and riskier. So I am just going to go for a
couple of wells. Instead, I'm going to make my real investment in refineries.
T. BOONE PICKENS, FOUNDER & CHAIRMAN, BP CAPITAL ENERGY: You'll start to see the rig count in the United States come down.
QUEST: I am going to go for some margins. The real money is going into gas stations. Consumers always have to go to them, and I can sell
them coffee and doughnuts when prices go down.
Oil companies can control how much capital they spend or save. Once thing they can't control - which economy card they are dealt. In the
United States, we're in recovery mode. For now, circumstances could change.
All I need to do is roll (inaudible) it can (inaudible) any time.
(LAUGHTER)
QUEST: I got a one. I am going to change the state of the economy to recession.
LAKE: Well it's a good thing I've got my refineries --
QUEST: What space is refineries?
LAKE: -- and some cash in the bank, Richard.
QUEST: The truth is recession could be very bad for both of us.
ALAN VALDES, DIRECTOR OF FLOOR TRADING, DME SECURITIES: It's that global slowdown, and that's going to affect our exports, that's going to
affect our earnings coming up in the next earnings cycle.
LAKE: The game is heating up and there's another factor in play - the news deck. Bad weather, taxes, the threat of climate change - they can all
affect oil prices. It says, "Unpredictable as rolling a double." (ROLLS DICE). That is going to trigger a news event. "Uncertainty in world
markets and high U.S. strategic petroleum reserve." Uncertainty sends crude oil prices falling further, and that hits the consumer market.
Gasoline, Richard, decrease is by five red spaces. Ooh it's not looking good for the gas station owner, is it, Richard? (LAUGHTER).
MARIA VAN DER HOEVEN, EXECUTIVE DIRECTOR, IEA: You don't know how the market is going to react. What we have seen is now the steep fall in oil
prices. This volatility has its own sequence.
LAKE: In a market like this, each piece on the board is a calculated risk.
QUEST: To win at this game, like the oil market itself, it requires a little luck.
(END VIDEOCLIP)
LAKE: Now two of the biggest oil powers are plotting their next moves then as well as President Nicolas Maduro stopping off in Russia to pow-wow
with Russian President Vladimir Putin. The visit comes at a critical time for both leaders. Matthew Chance has that story from Moscow.
(BEGIN VIDEOCLIP)
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: You know, Russia and Venezuela are two of the biggest losers in this global oil price
crash. Venezuela is the world's biggest crude reserves and Russia is one of the world's biggest exporters. So you think that Vladimir Putin and his
Venezuelan counterpart Nicolas Maduro would be looking to forge a common strategy. However, they're coming at this issue from two very different
directions.
President Maduro has been on a diplomatic offensive, touring oil- producing nations like Saudi Arabia and Algeria. It's not likely though that President Putin is going to be listening. Russian officials have said
time and again that trimming production in their deep Siberian wells is technically hard if not impossible. You just can't switch on and off the
oil flow in these places. The main reason though for Russian reluctance is money. The oil price may have crashed but it's still Russia's main hard
currency earner. And the country needs as many dollars as it can get right now to ride out this deep economic crisis. Matthew Chance, CNN Moscow.
(END VIDEOCLIP)
LAKE: Meanwhile, in Venezuela with oil prices sinking, shortages of food and other essentials are worse than ever. Massive lines at local
stores are a sign of increasingly difficult situation. Rafael Romo reports.
RAFAEL ROMO, CNN CORRESPONDENT, MEXICO CITY: A heated argument between a police officer and a shopper outside a store in the Venezuelan
capital of Caracas, a scene that is increasingly becoming common at supermarkets across the South American country.
Female, INTERPRETED BY ROMO: "I've been looking for milk and laundry detergent for four days," says this woman. "All I could find was fabric
softener."
ROMO: At a Caracas supermarket the line to buy food was several blocks long. People waited for hours under a scorching sun for the chance
to buy the basics but there are no guarantees. In some places, things have gotten out of hand. In Miranda State, shoppers vandalized and looted a
supermarket. There was little police could do to stop them. About a dozen demonstrators were detained last weekend when protesting the shortages. The
situation has become so tense that Carlos Osorio, a top government official in charge of food production and distribution, felt the need to address the
issue publicly.
CARLOS OSORIO, INTERPRETED BY ROMO: "Our preliminary inventories show," the minister said, "that we have enough supply for at least the next
three to four months in all food products."
ROMO: Venezuelan Vice President Jorge Arreaza says the shortages stem from what he calls an economic war waged against the Venezuelan government
by the opposition in foreign interests. It's the same claim made by President Maduro who spent the last week on a tour of China and several
oil-producing countries.
Male, INTERPRETED BY ROMO: "I asked President Maduro what are you eating up there?" asked this man. "All we have down here is long lines."
ROMO: The Venezuelan government publishes a so-called scarcity index. Last time it was published, early last year, it was nearly 30 percent,
meaning 30 out of every 100 products are unavailable or scare. On social media, people say the situation is best explained with pictures showing
supermarkets like this one with empty shelf after empty shelf. Rafael Romo, CNN Atlanta (ph).
(END VIDEOCLIP)
LAKE: After deadly terror attacks, France is now hit by cyberattacks and it's drawing the attention of hacker collective Anonymous pledging to
track down the hackers.
(COMMERCIAL BREAK)
LAKE: French officials have confirmed to CNN that there has been a massive wave of cyberattacks on websites across France. They've described
this scope as unprecedented. Samuel Burke is here with more. And, Samuel, do we know what they're targeting? Is it once again the media?
SAMUEL BURKE, BUSINESS CORRESPONDENT: Well, the head of cyber defense for France says that it is unprecedented not just in the amount but all the
different types of websites they're going after from military to civilian. The list they gave - businesses, religious groups, city government and
universities - all of their websites, and they said it's never been like this before in the history of France and they're putting pro-Islamic images
across these websites. Now it's interesting that this is happening at the same time that Anonymous announced that they would go after - that they
would go after Jihadist websites as they called them in retribution for the "Charlie Hebdo" attacks. You have two separate types of attacks going on
right now. Let's just play a clip of what Anonymous posted online.
(BEGIN VIDEOCLIP)
Male Voice: Attacking freedom of speech is attacking Anonymous. We will not permit it, and the organizations and the enterprises linked to
those terrorist attacks should expect a massive reaction from Anonymous. We are tracking you down.
(END VIDEOCLIP)
BURKE: So just to make it clear, you have Anonymous attacking Jihadist websites and then on the other side it looks like you have Islamic
groups attacking French websites. And the reason I bring it up is because a lot of people said, `Oh, this is so great that Anonymous will be doing
something good - they'll be going after Jihadist websites.' But cyber security experts told me once you start that type of thing, you'll get this
back and forth - this cyber battle - and that's exactly what we're seeing playing out in France right now.
LAKE: Samuel, I mean it seems obvious that it's linked to the attack in Paris, but do we know that and are any of the groups claiming
responsibility as we've seen?
BURKE: Well it's interesting because the French government didn't provide any evidence to show that it's directly linked to the attacks, that
it wasn't part of the cell necessarily that carried out these attacks at "Charlie Hebdo" and the kosher supermarket. But they did say that these
are Islamic groups - some of them known, some of them unknown to the French authorities previously. And so this is really part of the aftermath of
every type of conflict we see now, Maggie, whether it's Ukraine and Russia. After that conflict, then there were these cyberattacks that were carried
out online. This previous battle between Gaza and Israel and now from the streets of Paris to French websites - no matter what happens offline
nowadays, eventually something happens online as well.
LAKE: So redefining what we think of as the frontline -
BURKE: Absolutely.
LAKE: -- in these conflict zones. All right, Samuel, thank you very much and of course you'll stay on top of that and bring us any developments
as they come in. Now after the break, why films that received praise and awards from the industry don't always rake in big bucks at the box office.
(COMMERCIAL BREAK)
(MUSIC PLAYING)
LAKE: Love that music, right? In the U.S. it seems the amount of money a movie makes doesn't have much bearing on the accolades it receives.
Here are the top grossing films of 2014 that are nominated for best picture at the Oscars. "The Grand Budapest Hotel," under $60 million, "The
Imitation Game," just above $40 million, "Birdman" around $26 million and "Boyhood" about $24 billion (ph). Now if you add all of those up, it still
doesn't come close to "Guardians of the Galaxy" which raked in more than $330 million. I think I gave somebody a billion - that should have been a
million, but you get the idea. Ramin Setoodeh as the film editor for "Variety" joins us now. I think I came close.
RAMIN SETOODEH, FILM EDITOR, "VARIETY": (Inaudible) you almost had it, yes.
LAKE: OK, fantastic. So this is interesting. There's been a lot of discussion about how nobody sees films anymore, nobody wants to go. But
part of it is that some of the films that seem to be really circulating, getting a nod at the Oscars anyway are things that we would've considered
sort of independent or limited release another time.
SETOODEH: Right. It's essentially these nominees are all movies that are going to get nominated or have been nominated for the independent
Spirit Awards which celebrate small movies. And the Oscars in years in which they celebrate big movies like Titanic or Lord of the Rings, a lot of
people watch the Oscars those years. And in years in which they celebrate these smaller movies, not as many people watch, which is why in 2009 after
The Dark Knight the Batman movie got snubbed. The Academy said you know, we'll allow up to ten movies for best picture, but that doesn't seem to be
working either because this year they had up to 10, they nominated 8 -
LAKE: And they're all so small.
SETOODEH: And they're all so small movies.
LAKE: What - is it just that no really big sort of gigantic - was it just the release schedule didn't sort of stack up? I mean, you know, we
mentioned Guardians of the Galaxy -
SETOODEH: Yes.
LAKE: But that's not usually going to be Oscar material.
SETOODEH: But why not? I feel like - here's the thing - there years - there were movies this year that were big hits that could've been
nominated - Gone Girl, David Fincher's movie, made close to $170 million - that should have been a nominee. Why don't they nominate the Hunger Games?
Lord of the Rings was nominated, Hunger Game is very entertaining and it was a lot - biggest grossing movie of last year - and this new one looks
like it's going to be the biggest grossing movie of 2014.
LAKE: So are you saying they're snobby, that they're behind the times?
SETOODEH: There's a - there's a - some people say that the Academy is a little elitist. It's made up about 5-6,000 voters, primarily white men
and maybe they're a little out of touch with movie-going audiences. Because there popular movies this year -- --
LAKE: Yes.
SETOODEH: -- they just didn't nominate them.
LAKE: It's none-and some - you know - some of the movies that were nominated - sometimes it can give them a boost if they sort of slipped
under our radar, but maybe they're worthy and this can sort of create a little bit of a groundswell for them (inaudible) -
SETOODEH: But you need a combination of the big and small absolutely.
LAKE: Yes.
SETOODEH: Boyhood which is Richard Linklater's movie that he spent 12 years making, it's a small movie, it's made about $24 million domestically.
A lot of people will now see it because it was nominated for an Oscar, but you can't have eight movies that are the size of Boyhood. You need to have
some bigger movies too.
LAKE: Is next year going to be different because we've got Star Wars coming out? I mean, it sounds like there's blockbuster after blockbuster.
Pixar has got two movies coming out. Is it going to look different do you think next year?
SETOODEH: I mean, we'll have to see. Hopefully the Academy will learn its lesson. But they could've nominated the Lego Movie this year - it
was huge movie, it's really entertaining -
(CROSS TALK)
LAKE: I know (inaudible) everything is not awesome.
SETOODEH: Everything is not awesome, people were really upset about that, and people loved that movie. It was one of the biggest grossing
movies of the year and I think those extra spots are - were - designed for movies like that.
LAKE: It's interesting, isn't it because this is happening at a time when the industry is in some ways under threat - people are streaming,
there are all these new technologies, there are all these new content - you know - outlets --coming up that are challenging Hollywood's dominance.
SETOODEH: And it was a difficult year for Hollywood because of the Sony hack, it was a really tough year because they went through a lot.
Robin Williams passed away, Philip Seymour Hoffman passed away -
LAKE: Yes.
SETOODEH: -- it was a really tough year for Hollywood and a tough year for the business. Box office was down by 5 percent. So I think it's
a shifting. Things are shifting in the business. In the movie-making business are movies that on VOD or on demand - are those eligible for
Oscars? They're not now but one day they could be.
LAKE: Yes. That's a good point because will all (ph) may be demand. We can't let you go without putting you on the spot and asking you for a
prediction. What do you think is going to get best film?
SETOODEH: I think Boyhood's going to win best film, I think Eddie Redmayne who plays Stephen Hawking in The Theory of Everything is going to
win best actor and I think Julianne Moore who's been nominated five times is going get - win finally for Still Alice.
LAKE: Yes, and it's surprising that she hasn't. I kind of think of her -
SETOODEH: Right?
LAKE: -- as an Oscar winner, but -
(CROSS TALK)
LAKE: -- you forget it's just nominations and not -
SETOODEH: (Inaudible). She hasn't been nominated in a while.
LAKE: A lot of people feel really strongly about that movie too because it touches on something that's affecting a lot of people -
Alzheimer's - and it's sort of bringing it to much-needed attention. And hopefully it may be some fun to that as well.
SETOODEH: Right.
LAKE: It's going to be so fun to watch. Come back after to let us see what you think -
SETOODEH: Sure. (Inaudible).
LAKE: Thanks so much.
SETOODEH: Sure.
LAKE: We will be back in just a moment. Stay with us.
(COMMERCIAL BREAK)
LAKE: The big news in markets today. The Swiss National Bank's decision to abandon the franc's cap against the euro. The Swiss franc
soared against the euro, as a result the euro fell across the board. That move in the Swiss franc put a lot of pressure on the Swiss stock market.
It was down more than 8 percent. It was one of the biggest drops in Swiss stocks, in fact, in decades.
However, if you take a look at other European markets, they actually closed higher. You could see the CAC 40 one of the better performers of
the day. Now queues stretched outside currency exchanges in Geneva as people rushed to change their francs for euros.
IMF chief Christine Lagarde said she was a bit surprised that the Swiss National Bank chairman did not contact her before making the decision
to lift the cap on the Swiss franc and let it trade freely against the euros. So to say it was a surprise is an understatement -- the Swiss
markets certainly taken by surprise. UBS, Julius Baer, Richemont, Swatch, all Swiss companies, posted massive losses, and in fact talking to an
analyst earlier, he believes the fallout - we haven't even begun to see the fallout from that move. Corporates really didn't have a chance to react
today, so that is going to continue in the day ahead. The Swiss National Bank chairman Thomas Jordan defended the move saying the cap was no longer
sustainable.
(BEGIN VIDEOCLIP)
THOMAS JORDAN, CHAIRMAN, SWISS NATIONAL BANK, VIA INTERPRETER: The Swiss National Bank decided that it doesn't make sense to carry on with a
policy that is not sustainable and that can only be carried out by constantly intervening in the market.
(END VIDEOCLIP)
LAKE: In the U.S., the Dow Jones Industrials closed lower. The Dow in the end fell by more than 100 points to $17,320. Helping set the mood
for the day where disappointing earnings from Bank of America and Citigroups - a mixed economic news as well.
Just to remind you of the breaking news out of Belgium we are following this hour. An anti-terror operation in the east of the country
has left two suspects dead. A third was injured and taken into custody. Belgian officials say the group was planning major attacks in Belgium and
Europe. Police believe at least some of the individuals have ties to ISIS and had recently traveled to Syria. We'll have more on the story in the
hours ahead. For now, that's "Quest Means Business," I'm Maggie Lake.
END
