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Quest Means Business

Football Finances; China Currency Debate; Changing Channels; Pope Visits London

Aired September 16, 2010 - 14:00   ET

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

RICHARD QUEST, CNN INT'L. ANCHOR, QUEST MEANS BUSINESS: It's a red alert. The WTO warns high unemployment will breed protectionism.

Raising the red flag the U.S. says China is moving too slowly on its currency.

And those Red Devils, Manchester United's commercial director on the program tonight. What did he learn from the financial crisis.

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

Good evening.

You can't keep a good thing down. And world trade is on the upswing despite the uneven economic recovery across the globe. Tonight on this program the head of the World Trade Organization, the WTO, will tell me governments must resist temptations to protect domestic industries and jobs as they grapple with high unemployment. It is the big talking point for the WTO.

And the numbers tell their own story. This year global trade is picking up vigorously, as sharply as it fell off last year. And the WTO expects volumes of trade to grow by 10 percent. There are, though, serious roadblocks to recovery.

If you will come with me to the library you will see the hazards facing global trade. They were much in the news today. Wherever we looked there was take of trade, currency manipulation, and worries.

For instance, Tim Geithner, the U.S. Treasury secretary, on Capitol Hill. He was talking about he didn't use the word currency manipulation, but he was talking about how the Chinese have refused to let the yuan appreciate as they had promised. And he said that the U.S. had things that they could to help sort things out.

The Japanese prime minister reaffirmed that the Japanese government would intervene. Resolute action was Prime Minister Kan's comment, in terms of intervening to deal with the value of the yen and allow that to change. The Doha world trade talks, after eight years there is still little progress. Pascal Lamy tells us tonight there is a new dynamic energy concerning this. He says that they will reevaluate what will happen there in October.

And overall, the worry is protectionism. According to the G20, 17 nations have introduced protectionist measures. In some cases it is subsidies for the auto industry. And that was worth $48 billion. In another case it was EU subsidies on dairies.

Across the globe, then, the issue of world trade and how that will affect things is going to be the story for the future. Earlier I was joined by Pascal Lamy, the head of the World Trade Organization. And I asked him how worried he was about this protectionist trend and the threat to the global economy and recovery.

(BEGIN VIDEOTAPE)

PASCAL LAMY, DIRECTOR-GENERAL, WORLD TRADE ORGANIZATION: Thanks to the WTO disciplines, we haven't had any of that expected wave of protectionism. So far, so good. But-but, and that probably is the reason why we have this big pick up of trade this year, after the big drop we had last year. But-but we are not out of the woods. Protectionist temptations are rooted in social demands for protection. And the social demands for protection are rooted in unemployment.

So, world trade is doing much better, but unemployment is not doing much better. And as long as unemployment will be as dire as it is, for the moment, we will remain in the red danger zone.

QUEST: And in many ways that is the-we are now in the more worrying period for protectionism. Because after the immediate crisis suddenly entrenched slow growth with entrenched unemployment now you get political calls to put up the barriers.

LAMY: You are right. We have had that consistently for the last two years. Thanks to, again, the existence of a strong international system of disciplines governments have resisted. And they were right. They decided they would resist. We had a clear G20 proclamation to do that.

QUEST: Right.

LAMY: And roughly, roughly not 100 percent all right, but roughly they've done it.

QUEST: The Doha Round, the meetings that are just starting, uh, you know, one does wonder. And I've asked you this before. You and I will have both retired by the time-we'll be collecting pensions by the time the Doha Round comes to fruition. Isn't it time, Director General, just to shut up the shop and say it is not going to happen?

LAMY: Uh, I mean, it is an interesting intellectual view of what we should do. That is not what our members say. None of our 153 members has ever said it is too painful, let's leave it aside and start something different.

QUEST: But are you prepared to talk to leaders, through me, and get on, get it done, put our political capital behind it?

LAMY: Not yet. And the reason for that is that on the few issues that still remain to be closed, the level of technical maturity is not such that ministers could decide on clearly identified political options, but we probably will be there in the coming month.

QUEST: Are you prepared to say, now, when you expect the Doha Round to be concluded?

LAMY: I am certain it will not be done before the end of this year, which is why we have structured the process so that a positive concluding outcome becomes possible for '11.

QUEST: Finally, we've had dispute panel board rulings in Boeing and Airbus. And we've had it in Airbus and Boeing. And frankly, I am none the wiser about who won and who lost, except the lawyers probably made a fortune. Didn't Boeing/Airbus show us the deficiency in the disputes process?

LAMY: Well, first, Richard, sorry, but as you know, I'm-I'm prevented from by statute from any public comment on the dispute settlement findings. It remains to be seen what the parties, i.e., U.S. and EU, Boeing and Airbus, will do in order to settle the case.

But you're perfectly right, this case has been a big contribution to services trade, between American lawyers and European lawyers.

(END VIDEOTAPE)

QUEST: That is Pascal Lamy, the director-general of the World Trade Organization, talking to me earlier.

Now, job creation in the wake of the economic crisis, stricter financial regulation mean accountants could be soon be cashing in. The global chief executive of Deloitte, joins me on the program in just a moment.

(COMMERCIAL BREAK)

QUEST: Out of work consultants, accountants, the lot, get your resumes and CDs ready, Deloitte is announcing plans to hire a quarter of a million people over the next five years; 40,000 of those will be hired in the next year alone. The accounting firm has reported record-or at least revenue figures rising, too.

Things are looking up. Sales up 1.8 percent to more than $26 billion. It all seems to be rather well for Deloitte, the Global Chief Exec Jim Quigley joins me now.

Jim, well, you are not employing all of those people at once and I suspect the devil is in the detail and it is not so-but why are you making such a bullish claim, about employment prospects in the future?

JIM QUIGLEY, GLOBAL CEO, DELOITTE: Well, our confidence is growing and I'm pleased with how our business has performed and I'm optimistic about where we are headed. And to see our hiring plans return to pre- crisis levels, I think is a very strong signal.

QUEST: It's a strong signal, but of course it comes at variance to what we're seeing in global economics when we just see this sluggish, trudging along, almost treacle-like economy. Now your clients must be telling you they're seeing the same thing. Is there any optimism?

QUIGLEY: Well, you have to look hard, because certainly the signals are mixed. But I do see some growing optimism. And I think people no longer talk seriously about the double-dip recession. We're going to have a sustained recovery growth is going to be slower than what we have experienced before. But I believe business believes that broadly expansion is going to begin. And Deloitte certainly feels that way.

QUEST: And as we look, of course, at those-at the geographical spread, I suspect you are like every other chief exec that comes on this program. It is developing and emerging markets where you are starting to shift the emphasis.

QUIGLEY: Well, there is no question that the growing opportunities in the emerging market cannot be ignored. And their increasing share of projected global GDP will create a professional services market we want to participate in. But the Deloitte growth story is not limited to the emerging markets.

QUEST: So what is on your worry pad, if you like? We know that there is going to be higher taxes, probably, in the U.S.-or the prospect of higher taxes in the U.S. We know that austerity measures in the European Union are here for the foreseeable future. We know there is going to be high unemployment. But what are you particularly worried about?

QUIGLEY: Well, there is no question that regulation is going to be enacted. And there is going to be an effort on the part of public policy makers to try to reduce the risk of a recurrence of this global financial crisis. And I certainly hope that that regulation will not take the wind out of the sales of innovation and job creation that his needed. And rather will just simply help to restore trust and confidence to these markets.

QUEST: It's a fine line, Jim, between restoring trust and confidence and over regulating. You could hardly blame-we only yesterday, you'll know the EU came out with their proposals. You've got Dodd/Frank on the books in the U.S. Are we going-are the regulators going too far in your view?

QUIGLEY: Well, I think they are going to walk that fine line and I think the pragmatism of business input and the need for job creation is going to temper that appetite for increased regulation. And I hope that we will be successful at truly walking that fine line.

QUEST: You hope, but have you got more than hope? Or is there a real risk they get it wrong. I'm forcing you down the road here, Jim, of concern.

QUIGLEY: Well, we definitely have a risk that we could suffocate innovation and really thwart the efforts of the financial system to be able to fuel the capital flows needed for businesses to expand and businesses to grow. But the pragmatist in me, I think, temper the views of those that actually want to, perhaps, engage in what we might one day label as overregulation.

QUEST: Right.

QUIGLEY: We do need to temper, sometimes, the enthusiasm that the leverage-driven expansion brought us.

QUEST: Jim, many thanks. Jim Quigley at Deloitte, global CEO. Save one of those jobs for me, of the quarter of a million. You never know, I may need it before too long.

QUIGLEY: We'll-

QUEST: Go on.

QUIGLEY: We'll be ready to talk this afternoon, if you'd like.

(LAUGHTER)

QUEST: Salary negotiations before tea time. All right. Many thanks, Jim Quigley joining me from New York.

Let's go to Glasgow, at the moment. The pope has now left, the mass, the outdoor mass that was being held in Glasgow. Pictures there, of him just driving off.

Meanwhile, Susan Boyle, the reality show star, is singing I'm told. Let's dip in for a moment or two.

(BEGIN LIVE FEED, IN PROGRESS)

(APPLAUSE)

(END MUSIC)

(END LIVE FEED)

QUEST: Yes, well, the pope has left, we'll leave. Susan Boyle has left, or she's finished. I do apologize. I do suspect if I hadn't asked that last question of Jim Quigley, you might have enjoyed Susan Boyle. But then you wouldn't have heard Jim Quigley talking about protectionism. So there you have it, you pays your money, you takes your choice.

(DESK BELL CHIMES)

Wall Street has been digesting a fresh unemployment report this Thursday. New claims for jobless benefits were at a two-month low. Alison Kosik is at the New York Stock Exchange for the details.

Since we missed Susan Boyle singing you can always give us a song then.

ALISON KOSIK, CNN FINANCIAL CORRESPONDENT: I'm a good stand in.

QUEST: Yes, good stand in.

KOSIK: I can give you a song and dance.

(LAUGHTER)

QUEST: Tell me, let's stick with the market numbers tonight.

KOSIK: Well, right now I'll tell you the market is very flat. Not going anywhere at this point. You know the market is highly unimpressed by the data that it has gotten today on jobless claims. The bottom line is Wall Street is looking for these numbers to be better than good, before they actually trade on them. The less bad numbers, the OK reports, it is really not working for the market anymore.

So what we found was that jobless claim numbers, they declined 3,000 to 450,000 last week. Sure, it is lower, but that number is still too high for most. And we've kind of been stuck in that tight range. And the economists are saying there is-you know, there is little reason to celebrate the recovery until these weekly claims head below the 400,000 mark. You know, they haven't been below that mark in more than two years.

And the numbers overall aren't inspiring confidence in everyday investors either. You know the volume, or the number of trades that come through here, at the New York Stock Exchange, it is very low. And the reason that people are keeping their money on the sidelines, Richard. They are not confident to trade in this market at this point, until they see stronger data that gives them more direction, Richard.

QUEST: Alison Kosik, in New York, with the numbers with the numbers on the exchange. Many thanks indeed.

And the one interesting thing to bring to your attention. I was just looking, funnily enough, stop, think, and breathe. Now that is the economic advice from Barbara Streisand, in a blog that she wrote for "The Huffington Post". She says, "I believe Americans want a government that represents the middle-class and working families, not the extremely rich, the bankers and the chief executives."

Economic advice from Barbara Streisand; read her blog. I've posted it at Twitter.com/RichardQuest, Twitter.com/RichardQuest.

Babs, of the voice, on the economics of politics. European stock market numbers, for you-oh, me bell's gone a bit funny. For some reason it's come a bit undone. These are the numbers.

(DESK BELL CHIMES)

Modest losses on all the major indices, third session of losses for the SMI, banking shares badly off. Credit Agrico down 2.8. Boucher (ph) down nearly 3, even that Peugeot, Renault lost 2 percent each. Reversing yesterday's gains.

QUEST MEANS BUSINESS, the biggest and the best names in business. A league table has been redrawn. We'll look at the winners and the losers. It's a battle of the brands, after the break.

(COMMERCIAL BREAK)

QUEST: I want you to have a look at these. They are instantly recognizable brands and these three have been ranked as the three best in the world. Interbrand has released is annual list, global 100 brands. The brand value is calculated at three aspects: Money they make, how the brand status affects what you buy and the strength of the brand to make money in the future.

These three unchanged from the future. Coca-Cola has been the top every year. And there is always IBM, and Microsoft, as well, is high up there. You'll probably recognize the rest of them as well. These are the major brands that came out, overall. Of all of them, interestingly, in the top 10, uh, the tech shares dominates them. Google is fourth, up from seventh last time. There is Google, catching up with Microsoft as well.

HP is in the top 10 for the first time. It comes in at No. 10. And we'll talk to the chief marketing officer from HP, shortly. Toyota out of the top 10, just missing also, BP was off the list. It was 83 last year and has made it just now. But this is fascinating. Jez Frampton of-is the chief executive of Interbrand. He joins me from New York.

Jez, the first thing is, I mean, should I be terribly surprised that Coca-Cola, IBM, and Microsoft are the three most recognizable brands or valuable brands?

JEZ FRAMPTON, CEO, INTERBRAND: I think it is testament to the strength of their brands and their and their ability to hold the attention, and of course, the pocketbooks of their customers. And Coca-Cola, every year, people say how do they stay on the top. They constantly reinvent themselves, and they are absolutely obsessed about understanding their customers.

QUEST: But what are you looking for? I mean, you heard me give an introduction, which sounded rather wooly and rather grandiose, but what do you really look for when you value these brands?

FRAMPTON: What we are trying to do is put a fixed dollar value on the asset. How much is this thing really worth to the company? The things that really drive it are to do with understanding how important the brand is in purchase decision making. It is about choosing individual brands.

QUEST: Right.

FRAMPTON: On that basis these three do extremely well.

QUEST: But when we see that BP and Toyota fell down or out of the list.

FRAMPTON: Yes.

QUEST: You're effectively saying, not only do the scandal hurt the brand, but it is how you handle the scandal.

FRAMPTON: Absolutely. And I think if you look at Toyota versus BP. It is very interesting. BP did a very bad job of giving people a clear indication of where it was going into the long term. And brands are really about the long-term potential of a company. In the instance of Toyota, they actually reminded us all that quality and safety were at the top of the list.

QUEST: Social media is mentioned. Social media is perhaps the biggest opportunity and the largest risk, in terms of protecting your brand, at the moment.

FRAMPTON: Absolutely. I mean, we all walk around now with the ability to get information and opinion from 10s of thousands of people around the world from social networking sites. And, of course, brands now have to engage in a dialogue with every single individual, all the time. It makes it much harder to manage what you are about. And you really can't get away with brand washing people anymore.

QUEST: Oh, yes, hang on. Hang on. Hang on, hang on.

(CROSS TALK)

FRAMPTON: We are much more interested in what people do as well as what they say.

QUEST: Let me challenge you on that. Let me challenge you on that, because the world and the list is replete with companies that are-of which the critics could be highly critical of what they do. And yet, you-those brands are still very valuable. So what underpins that?

FRAMPTON: What underpins the value? It is-I mean, it is quite simply, it is our desire to choose. I mean, ultimately, brands make our lives a lot easier. They are a short cut to understand what you are going to get from that offer. That is very, very powerful.

QUEST: Yes.

FRAMPTON: Because one of the things that human beings are is lazy. They don't like to change. They like things made easy for them and that is what brands do.

QUEST: Yes, your list-

FRAMPTON: You can capitalize on that.

QUEST: Yes, your list has one very serious omission. You seem to have missed out, QUEST MEANS BUSINESS-

(LAUGHTER0

As a brand that is clearly worthy of considerable value.

Jez, next year please.

FRAMPTON: We'll see what we can do, Richard, but of course you are going to have to encourage your parent company to break out the finances of QUEST MEANS BUSINESS.

QUEST: Thank you, touche to you, too. Jez Frampton joining me from New York.

We are going to take a closer look at the number 10 company on the Interbrand list. Next, HP came in at 31 places above its archrival Dell. The company's chief marketing officer will join me after the break. QUEST MEANS BUSINESS, good evening to you.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. QUEST MEANS BUSINESS, this-and of course, on this network, CNN, the news always comes first.

(NEWSBREAK)

RICHARD QUEST, HOST: A team of Chinese experts has arrived in Japan to investigate the death of a panda, 14 year old Kou Kou was on loan from China. His heart reportedly stopped beating last week while he was sedated for an artificial insemination procedure.

Chinese media reported that the Chinese experts are questioning why the Japanese zoo was trying to breed Kou Kou outside its mating season.

As we've been mentioning, some of the world's biggest brands on "Quest Means Today" and in the sports world, they don't come much bigger than Manchester United Football Club.

Well, one look at recent headlines and you'll see things aren't pitch- perfect. No, it's not just on the sports pages. In fact, wherever you seem to look, Manchester United is much in the news.

Now, let's not join in the library, come and join me over at the stands. Club debt has risen $1.1 billion of debt. The debt has been growing ever since the club was taken over by the American Glazier family.

A family incidentally that seemed to have been lowered by most of the hardcore funds since they made the process. Glazier took control in 2005 for $1.5 billion. Near $800 million bond scheme has been recently forward. The idea ultimately, of course, is to help pay for new plans.

Some (fans) want to see the back of the owners, trying to choke the club's revenue streams. They launched the Green and Gold campaign, the original scheme colors. Season tickets are also down.

Interestingly, how about this, more than 2,000 short of target this year. Not all fans are disappointed. That is one of our producers. It's actually James Parkington, a die-hard fan, frankly die before you do against Manchester United with the manager, Alex Ferguson.

Some are saying (Man-U) is not worth as much as it once was. It's not necessarily the value. It's the prospect of the future. I talked this to the commercial director, Richard Arnold.

(BEGIN VIDEOTAPE)

RICHARD ARNOLD, COMMERCIAL DIRECTOR, MANCHESTER UNITED: The way that other people value our business is not - is not something we concentrate on heavily. We focus on what we are doing and the things are going very well.

QUEST: How does it affect your ability to do the job. The fact you are by most measures the most valuable brand in the world for football?

ARNOLD: For us - you know, talking about the fantastic style of play we've known for. We don't need to - you know, we don't sell off the back of our evaluation. It's all about what we can do for the brands we work with and the platform we offer worldwide.

QUEST: As you look at your empire, which commercial strategies are you focusing upon and which do you think are very much the future for you?

ARNOLD: We get two to three billion viewers a year watching our games. So for us the exciting part is the development of digital media and the partnership that we're opening up. The partnership we're opening up is the some of the most exciting markets in the world.

QUEST: What I don't quite see is how does a company in Indonesia or in Singapore, Thailand, Vietnam, wherever - how do they partner with you and how do you like gain from that?

ARNOLD: We offer an incredible platform to some companies who are phenomenally successful, innovative, very capable of doing things and we've got a very good track good of being able to take some of the most famous companies in the world.

QUEST: If we take your (shirt) sponsorship, of course, you used to have AIG as the sponsor, which exploited somewhat spectacularly, you must really wonderful (inaudible).

ARNOLD: And that was a difficult period, but for everyone around the world to know waking up and wondering whether your bank would be there (inaudible) or indeed your government. It was a time where a lot of fundamental principles re-examined.

QUEST: As the man in charge of commercial operations, what did you - what did the team learned from that?

ARNOLD: Yes, one of the lessons we've learned is that in difficult times, (inaudible) to quality and that have been good for us. You know, it wasn't a great time to be going to market.

I think everyone would accept, but yes, in that period, we were very, very successful and that - this two will pass, you know, all bad things come to an end and we're looking forward to growth in the future.

QUEST: In the battle for sponsorship, you have yourself, you have (Rel Madrid), you have all the big teams. What do you think is the retreading factor between when a company decides to go with one or the other especially when it's involved in that particular country?

ARNOLD: I think football is the global game and one of the most telling statistics I've heard is that there are more members of FIFA than the United Nations. So - you know, from a sponsor's point of view, is the language that everyone can speak.

You go to pretty much any part of the world, you can engage in a conversation around football. And if you'll that relevant to the way people live and what they do, it's easy to then translate that into to make a massive difference to their business and the performance of their business.

(END VIDEOTAPE)

QUEST: The commercial director of Manchester United. One of the big brand, in fact one of the most valuable brand in - the most valuable I suppose some might argue (inaudible).

Currency crunch time, Washington is demanding faster appreciation of China's Yuan. We're going to get the grip with what happens if it doesn't happen.

(COMMERCIAL BREAK)

QUEST: The gloves are off, Treasury Secretary Timothy Geithner is criticizing China's policy on its currency saying the Yuan is still undervalued and the move towards a flexible rate is too slow.

Maggie Lake is in New York and well, you know, tell me something we don't know, Maggie. The question - 1 percent appreciation in the Yuan since China said, it was prepared a more flexible rate.

MAGGIE LAKE, CNN INTERNATIONAL BUSINESS CORRESPONDENT: Yes, it just doesn't cut it as certainly the message coming from you as lawmakers and listening to the hearing today, the Treasury secretary pretty much agreeing with them.

There's clearly building frustration in Washington as oppose to the administration and the lawmakers who were questioning Geithner today, many of them from states with a manufacturing base were really pushing for a change, more of a change coming from China. Have a quick listen to part of it.

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: China is running a set of policies that are designed to keep the currency undervalued. It is undervalued. They are moving to let it rise, but not very quickly.

UNIDENTIFIED MALE: Are not very much too.

GEITHNER: Not very much either and the impact of that has the effect of providing a relative disadvantage to companies that compete with products that the Chinese make.

(END VIDEO CLIP)

LAKE: You know, for much of his tenure, our Treasury secretary is used to getting beat up by these lawmakers. It's very rare to hear them all agreeing, but they certainly were on that fact that China is in the wrong.

But, listen, this is a very complicated, did you know, situation and there are risks and benefits for both countries. Let's just sort of talk about broadly what economists are focusing on.

The U.S. is pushing for the Yuan appreciation and certainly the feeling is that it would create jobs, a little bit of disagreement on whether that's the case. But some economists are out saying, around these hearings, that it could create as many as a half million jobs.

And in an environment right now, that would certainly be needed, but others point out, hey, watch what you wish for. Yes, it may create some manufacturing jobs, but it also might result in a big increase in the cost of a lot of different consumer products.

We've been all gotten used to being able to get a lot of those, you know, cheap apparel, toys, all sorts of things from China.

QUEST: All right, hang on. Geithner says that the U.S. still has options and that the U.S. will do something. What?

LAKE: Well, Richard, as you know, that they could come out formally and name China as a currency manipulator. It would come with automatic, you know, a trade - penalties that come along with that.

It is a root that the administration has not wanted to go down. China has made it clear that it does not want to be told what to do. That that would only, some people say, create an escalating trade war between the two countries, which no one would benefit from.

But it is an option on the table, and if nothing happens, you could argue that that didn't work.

QUEST: Right.

LAKE: We want to try something else. What's more likely though is that the U.S. is going to put more pressure on G20 partners to put that at the top of agenda. Get a coordinated push from them. Not just the U.S. to push China to do something, some believe, that would be more effective. Clearly going to be a huge talking point as that meeting approaches in November.

QUEST: Maggie Lake in New York. I fear that you and I are going to talk about this one many times before we're finished. Maggie Lake is in New York.

We've talked a lot about a bill to help small businesses in the U.S. that has just cleared a major hurdle. Dana Bash is in Washington, and Dana joins me now.

How much of this bill, this small business bill is good economics or rather how much is good politics and bad economics?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: The bad economics, you know, you ask different people and you'll get different answers. More specifically, you ask Democrats, they say, it's great. You ask Republicans, they say it's horrible.

Good politics, there's no question. Democrats think this is good politics. If I may, let me just sort of quickly tell our viewers what exactly we're talking about.

It's $42 billion bill. It's $12 billion in tax cuts, $30 billion in a government lending fund and that lending fund is specifically geared for - to infuse capital into community banks. Community banks, which tend, of course, to give the most to small businesses, small businesses that can't get money right now. So that's - that's the bottom line there.

On the political question, the big, big raging political debate right now heading into November's election especially for Democrats is whether or not they will extend the Bush-Era tax cuts.

Republicans say extend all of them. Democrats say just for the middle class.

QUEST: Right.

BASH: And as you know, Richard, what Republicans are saying is if you don't extend those tax cuts for the higher upper brackets, you're going to hurt small businesses.

So this particular bill is a Democrat's way to say, look, we're not trying to hurt small businesses. Look at what we're doing for you. All you small business owners out there who, from their perspective, they hope will think twice and maybe vote for Democrats.

QUEST: But even small business is a bit (inaudible) between on whether this is any good. I mean, there's no - this is toxic I think is the word. To best describe the environment at the moment as you head towards the midterms.

BASH: So toxic. There's no question about it. I mean, just take - separate from this, but just the idea of the Bush-Era tax cuts in general. I just came from standing in a hallway outside of the meeting the Democrats were having there in the Senate and the House trying to figure out what to do.

Whether or not they're even going to have a vote on extending these tax cuts, which at least for the middle class, everybody agrees they want to do that.

Whether it's now or before they expire on December 31st, but then there's the whole political question of whether the people are going to get, you know, hammered back home especially conservative Democrats -

QUEST: Dana -

BASH: Yes -

QUEST: I'm just going to interrupt you -

BASH: Go ahead.

QUEST: I'm just going to interrupt you because I want to show our viewers, if you'll forgive me, I need to show our viewers some pictures coming to us from Glasgow where the pope - we can just about see his holiness the pope, sitting on his plane.

Well, there you are, you see him sitting on the plane there. He just boarded the aircraft, third window from the left if you're having difficulty working out where he's sitting.

And the pope is now aboard his plane where he is - he'll be flying down to London tonight and then on to Birmingham. The pone has been holding a mass, has finished open air mass in Glasgow.

Dana back to you briefly if we may, apologies for just - the way from that. So, Dana, how much - let's forget the economics.

BASH: OK.

QUEST: How much nastier does this whole environment of politics in the U.S. get between now and November the 2nd?

BASH: It's going to get nastier. I mean, it's - there's no question. It is the way politics works in the United States and you know, no question other places around the world.

The closer you get to Election Day, the more nasty it gets. That that people here who are turning on their TVs and seeing more and more advertisements will see even more.

And look, especially as many of these races get closer, get tighter, the more nasty it is going to get. It always happens and especially in a year like this year where Democrats who just won the majority here in the United States Congress four years ago are threatened - they threatened to lose it. It's going to be tough.

QUEST: Many thanks, Dana Bash. Economics and politics in one go and I just want to remind you, of course, about that (inaudible) Barbara Streisand who's joining the political tray saying she talked about stop, think and breathe.

I post it on my Twitter page. It's at twitter.com/richardquest where, of course, you can have a read of that and join in that debate.

The weather forecast now where you might be around the globe at the moment. Guillermo is at the World Weather Center. Guillermo, I've been busy - busy today and are we still hurricane watching?

GUILLERMO ARDUINO, CNN INTERNATIONAL WEATHER CORRESPONDENT: Yes, very much so. We have one very near Mexico. That's perhaps the most important one right now. It's (inaudible) because we have three hurricanes, named hurricanes.

Igor continues to be quite intense and it's closing on in Bermuda and closing in on Bermuda and then we have Julia there, but Julia is going to go nowhere so I think I'm not going to talk about it.

But we have Igor in here, very clearly defined center of this system, very strong indeed, 222 kilometers per hour. It's going to continue like that. It's Category 4 system. This is the time of the year when we get nervous and busy because September is a very busy month when it comes to tropical activity.

Bermuda is there, three days - three and a half days from now, it's going to go there. No doubt about it. We turn to (inaudible) model no change, no doubt. Now, Carl is very close to making landfall again because remember it went through (Quintanar Row) here in the (inaudible) Peninsula.

Now watch out, (Kalapa, Martina, Lator, Papantra, Costa Rica, Tampico, Vera Cruz) all those area also (inaudible) are going to see the impacts of the system. It's a massive system. It will hurricane still when it makes landfall a day and a half from now.

But before then we see the impact here, (Vera Cruz) careful because that city gets flooded all the time. So we're going to see a lot of rain associated with this and also significant - very significant winds. Look at the accumulations, half a meter in many spots.

We're talking again in between (Tampico) and (Vera Cruz), but (Vera Cruz) is going to see the floods certainly. Well, I'm going to not talk about Julia because it's going nowhere. We're going to focus on Europe a little bit.

We see some bad weather now in the south, a little bit of a change in the Central Med and the Eastern Med looking fine for our viewers who are watching from a cruise right now.

Also, the (Voltix) is getting a little bit better if you're in a cruise liner right now because there is some bad weather there, but for a little bit you will have a break.

The storm number one is moving away from Britain moving into the (Voltix) then storm number two from the north is bringing heavy rains and strong winds.

So Friday, it's not going to a nice day in the north. It's nto going to be a nice day if you are in the north (inaudible) sea, you know, it's quite choppy and along with it, temps start to decrease.

So you see - look, Richard, we're going to see the high temperature of the day around 15 degrees. Goodbye to the 20s now, forget about it because we'll see them in the south, but not anymore in the north. So enjoy it while you can.

QUEST: You are - you are malicious.

ARDUINO: Me?

QUEST: You - you took real pleasure in saying that.

ARDUINO: No, not at all. I commiserate with all of you.

QUEST: You'll be on a holiday. You'll be off in one of your many holidays.

ARDUINO: Perhaps.

QUEST: Thank you. Guillermo at the World Weather Center. He keeps promising to buy me a present or send some pictures.

All right, we'll be back in a moment. I've got a profitable moment later in the program. Well, once again, we'll be thinking about those brands and the pope is sitting on his plane waiting to fly to London.

(COMMERCIAL BREAK)

QUEST: For years, TV shopping channels were synonymous with tacky products and over excited sales people. Now, U.S. channel QVC says, enough is enough.

It started using top designers on its airwave and sold some 166 million products worldwide last year. That's an enormous amount of stuff being sold over the airwaves.

QVC of course, with all that Zirconian diamonds in the past, but now, Alina Cho looks at the channel's new image.

(BEGIN VIDEOTAPE)

ALINA CHO, CNN NATIONAL CORRESPONDENT (voice-over): It was a little shaky in the early days -

UNIDENTIFIED FEMALE: Everybody wants this ladder. I live in an apartment with vaulted ceilings -

CHO: That was then.

HARRY SLATKIN, QVC DESIGNER: But they're not in Kansas anymore as they would have said in the Wizard of Oz, they've arrived. Last minute gift if you're living the (front).

CHO: This is now. Founded in 1996, QVC, the 24-hour TV network for at- home shoppers is now an $8 billion business. But here's the real news, among the big name designer set, QVC is suddenly cool.

ISAAC MIZRAHI, QVC DESIGNER: It's mesmerizing, but on top of that now, it really looks great.

CHO: QVC is so selected. It's reported thousands apply for just a few spots like Isaac Mizrahi, Diane (inaudible) and Vivian (Tam).

Dennis (Basso) furrier to the stars is on Madison Avenue and on QVC selling faux fur amounting to tens of millions in sales and it's not just designers.

Even the Kardashian sisters are getting into the game, but in order to stay, you have to sell.

(on camera): The pressure is on. When you're on, it's like sell, sell, sell.

KIM KARDASHIAN, QVC DESIGNER: Yes, you have to sell so (inaudible) give as much information as we know about the product and why we love them, why we created it, what's the fit is like, what's the cost like and (inaudible) for them to see it on us.

CHO: It's all part of the game.

FERN MALLIS, STYLE EXPERT: They psyched into the consumer in a way that nobody does. They know - they know how to move goods. It's a fascinating to watch.

CHO: Show host caress handbags and what about candles? How do you sell products you can't smell?

There are tricks to selling.

SLATKIN: Well, tell me when I'm saying something to go back and say it because the customer reacts to it.

CHO: Then there's the interaction with designers that customers don't get in a store like a product, don't like it? Call in.

UNIDENTIFIED FEMALE: Are you getting our today's special value?

UNIDENTIFIED FEMALE: Yes -

CHO (on camera): I mean, they get to talk to you on the phone.

UNIDENTIFIED MALE: That's my favorite part. That is my favorite part.

CHO (voice-over): And that connection breathes loyalty, 95 percent of QVC's revenue comes from repeat customers.

MIKE GEORGE, PRESIDENT AND CEO, QVC: And our numbers tell us that if you make two or three purchases on QVC, you will be a customer for life.

CHO: New designer Coralie Charriol Paul is in the luxury jewelry business, but when she started her own brand, she wanted to go affordable. Selling handbags on QVC. Her task on this night, sell 800 in 15 minutes.

(on camera): When you hear that this color is not available anymore, you're like, yes! Somebody likes what I'm doing.

(END VIDEOTAPE)

QUEST: QVC going up market. Who knows? One day maybe (inaudible). Let's go back to Glasgow. Let's go back to where the pope's plane.

We saw him sitting there - why am I reckoning. I think his holiness is sitting in Seat 1B or 1C anyway whatever it might be. The Airbus 319 is taxing out now from Glasgow. His holiness will fly to London, Heathrow.

(Inaudible) Heathrow - well, Heathrow Airport was where one of the cardinals of the Vatican has said arriving in Heathrow (inaudible) like landing in the third world. That cardinal didn't come on the trip.

The pope is visiting the U.K. on the first state visit. At Hollywood house, he was greeted - he was met by her majesty the Queen and two leaders, global in their own right, birth octogenarians.

Interestingly, the Queen in her address or in her speech to his holiness said that she has actually been Vatican four times and of course, had met the pope's predecessor John Paul II. The pope in his - in his mass said that he, of course, warned against sex pornography and other things - and temptations, which could take young Catholics astray.

The New York stock market, Dow Jones barely changed. The World of (inaudible) hasn't moved much. We just got 9 points for investors on the Dow Jones Industrial 10,582 and in a moment, I will have a profitable moment (inaudible) all about the big brands.

(COMMERCIAL BREAK)

QUEST: Finally, tonight's profitable moment, the world's most valuable brands. We learned tonight one, two and three, Coca-Cola, IBM and Microsoft.

The (inaudible) brand list of a hundred also includes Ford. It's includes Pizza Hut. So what is it tell you about anything. I hear you say, you know those names. You buy their products in many cases.

Well, what it tells us is that for most companies the very name and what they stand for are a crucial importance. And as BP and Toyota have learned this time around, troubles with the company can do expensive damage to the brand.

Both suffered in the past 12 months, which is why companies spend fortunes guarding their brands and rightly so, but perhaps the most important thing to remember is a brand without delivery is just hot air.

There has to be substance and integrity behind the brand to give it real value. Integrity, for instance, "Quest Means Business." Now here's a brand - a brand of business you can really rely on.

And that's "Quest Means Business" tonight. I'm Richard Quest. Whatever you're up in the hours ahead, I hope it's profitable.

END