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Quest Means Business
Sell-Off on Wall Street; Fight for Survival; European Debt Crisis; Bernanke Bashed; I-Beatles; The Boss; Prince William's Engagement Announced
Aired November 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: CNN Breaking News. Tonight it is time to hear from Prince William and his fiance Kate Middleton in their own words. The prince is to marry his girlfriend in the spring or summer of next year. She is now wearing the ring that once belonged to his mother, Princess Diana. Tom Bradley (ph) began by asking Prince William how and where he proposed.
(BEGIN VIDEOTAPE)
PRINCE WILLIAM: It was about three weeks ago on a holiday in Kenya. We had a little private time, away together with some friends. And I just decided it was the right time, really. We had been talking about marriage for a while. So it wasn't a massively big surprise. But I took her out somewhere nice, in Kenya, and proposed.
LADY KATHERINE: Very romantic. There is a true romantic in there.
(LAUGHTER)
PRINCE WILLIAM: There is.
TOM BRADLEY, CNN INTERNATIONAL CORRESPONDENT: And you said yes, obviously?
LADY KATHERINE: Of course, yes, yes.
BRADLEY: And you knew you were going to do this from day one of the whole day, or you waited `til the end?
PRINCE WILLIAM: I had been planning it for a while. But as every guy out there will know, it takes a certain amount of motivation to get yourself going, so I was planning it. And it just felt really right out in Africa. A beautiful time and I did have a bit of planning to show my romantic side.
BRADLEY: Kate, you had been on holiday a while so did you see this coming, was he getting a big nervous and jumpy?
LADY KATHERINE: No, not at all. No, because we were out there with friends and things and I really didn't think of it at all. I thought he might have, maybe thought about it, but no. It was a total shock when it came, and very excited.
BRADLEY: And he produced a ring?
LADY KATHERINE: Yes.
BRADLEY: There and then?
PRINCE WILLIAM: Yes, I had been carrying it around with me in my rucksack for about three weeks before that. And I literally would not let it go, wherever I went I was keeping a hold of hit, because I knew this thing, if it disappeared I'd be in a lot of trouble. And, yes, because I planned it. It sort of-it went fine, as you know, you hear a lot of horror stories about proposing and things go horribly wrong. It went really, really, well, and I was really pleased she said yes.
BRADLEY: And it's a family ring?
PRINCE WILLIAM: It is a family ring, yes. It is my mother's engagement ring. So I thought it was quite nice because obviously she's not going to be around to share in any of the fun and excitement and all of it, so this is my way of keeping her sort of close to it all.
BRADLEY: I guess we had better have a look at it. What kind of ring is it? Are you an expert on what-
PRINCE WILLIAM: I'm not an expert. That's all. I have been reliably informed that it is sapphire with some diamonds. But I'm sure everyone recognizes it from previous times, so.
LADY KATHERINE: It's very beautiful.
BRADLEY: And, Kate, you are going to be the envy of many, I'm sure.
LADY KATHERINE: I just hope I look after it.
PRINCE WILLIAM: She looses it, she's in big trouble.
LADY KATHERINE: It's very, very special.
BRADLEY: It has to be said you both look incredibly happy and relaxed.
PRINCE WILLIAM: We are, we are. We are like sort of ducks, very calm on the surface, but little feet going under the water. But no, it has been really exciting. We have been talking about it for a long time. So for us it is kind of, it is a real relief. And it is really nice to be able to tell everybody. Because especially the last two or three weeks, it has been quite difficult not telling anyone, keeping it to ourselves, for reasons we had to. And it is really nice to finally be able to share it with everyone.
BRADLEY: And you obviously have kept it a secret. So when did you- did you ask Kate's dad? And what did he say? And what did your respective parents say when you told them?
PRINCE WILLIAM: Well, I was torn between asking Kate's dad first, and then the realization that he might actually say no, dawned upon me. So, I thought if I ask Kate first then he can't really say no. So I did it that way around. And I managed to speak to Mike, sort of soon after it happened, really. And then is sort of happened from there.
BRADLEY: Kate what did your Mom say?
LADY KATHERINE: I think as any mother would be she was absolutely over the moon. And actually had quite an awkward situation because I knew and I knew William had asked my father. But I didn't know if my mother knew. So I came back from Scotland, and you know, my mother made is sort of-didn't make it clear to me whether she knew or not. So were sort of there (ph) sort of looking at each other and feeling quite awkward about it. But it was amazing to tell her and obviously she was very happy for us.
BRADLEY: You are-actually only one thing that has been clear actually for a long time is that you, very evidently have a close, close- knit family. And family is very important to you.
LADY KATHERINE: Yes. It is very important to me. And you know, I hope we'll be able to have a happy family ourselves. Because it has been- you know, they have been great over the years, helping me with difficult times, and you know, we see a lot of each other. And they are very, very dear to me.
BRADLEY: People are bound to ask, you know, it is a bit of a (INAUDIBLE) question, but child? Do you want lots of children? Is, you know, see what comes? What's your?
PRINCE WILLIAM: I think we'll take it one step at a time. We'll sort of get over the marriage thing first and then maybe look at the kids. But obviously, you know, we want a family. So, you know, we'll have to start thinking about that.
BRADLEY: Going back to the start, because I think people, as I say, will be very curious about the totality of your relationship. When did you first set eyes on each other and when did you think?
PRINCE WILLIAM: Well, it is a long time ago now, Tom. Trying to wrack my brain about it all, but we were obviously, we met at university, at St. Andrews. And we were friends for over a year, first. And it just sort of blossomed from then on. We just spent more time with each other and had a good giggle. Had lots of fun and realized we shared the same interests and just, you know, had a really good time. She has a really naughty sense of humor, which kind of helps me because I have a very dead sense of humor. So it was good fun. We had a really good laugh. And then things happened.
BRADLEY: OK, what did you think of William? I mean, he's clearly not quite the same as meeting your average, you know, university student, maybe he was I don't. But what was your first impression.
LADY KATHERINE: Well, I-actually I think when you said turned bright red when I met you and sort of scuttled off feeling very shy about meeting you. But actually William wasn't there for quite a bit of the time, initially. He wasn't there for the first (ph) week. And it did take a bit of time for us to get to know each other. But we did become very close friends from quite early on.
BRADLEY: There is a story that goes around that you had a picture of him on your wall.
PRINCE WILLIAM: It wasn't just one, it was like 20.
(LAUGHTER)
LADY KATHERINE: He wishes.
(LAUGHTER)
LADY KATHERINE: No, I had the Levi's guy on my wall. Not a picture of William, sorry.
(LAUGHTER)
PRINCE WILLIAM: It was me in Levi's honestly.
(LAUGHTER)
BRADLEY: So you ended up, sort of in the same flat, was that-if you don't mind my asking-before you were going out, or?
PRINCE WILLIAM: No, we moved in together as friends, and then because we were living together, we lived with a couple of others, as well. And it just sort of blossomed from there really. We just saw more of each other, and you know, hung out a bit more and did stuff, yeah.
LADY KATHERINE: He helped me cooking.
PRINCE WILLIAM: My cooking is all right. It got better.
(LAUGHTER)
BRADLEY: Does William ever cook, or indeed do anything useful around the house?
(LAUGHTER)
PRINCE WILLIAM: Define useful, Tom.
BRADLEY: Let's not go there.
LADY KATHERINE: He does actually. He did cook quite a bit at university. And it would always come with a bit of angst, you know, anger if something had gone wrong. And I'd have to wander in and save-save something that was going-
BRADLEY: So, being honest, is that a skill that is declining over time, or improving?
PRINCE WILLIAM: I would say I'm getting better cooking. Kate would say I'm getting a lot worse.
LADY KATHERINE: I think you haven't had enough chance to practice.
PRINCE WILLIAM: No, that's true. I get quite lazy about cooking, because you know, when I come up from work and stuff it is the last thing I want to do really is spend the time cooking. But when I was trying to impress Kate, I was trying to cook these amazing fancy dinners and all that happened was I burn something, something would overspill, something would catch on fire. And she would be sitting in the background just trying to help and basically taking control of the whole situation. So, I was quite glad she was there at the time.
BRADLEY: Slightly awkward for the other flat mates? Or OK?
PRINCE WILLIAM: No, to be honest they were used to it, watching me sort of catching things on fire and, you know, they found it very amusing.
BRADLEY: But I mean, having the two of you going out in the flat, or did they just not bat an eyelid?
PRINCE WILLIAM: I think at first they were a bit surprised that it all happened. And then they realized that it was really nice and it was good fun. And we got on really well. They were good friends of ours as well. So we had a good giggle with them as well.
BRADLEY: Now I suppose a lot of people are going to wonder, the first meeting with the families. Again, not necessarily your average meeting. Kate, what was your first impression of the family?
LADY KATHERINE: Well, I was quite nervous about meeting William's father. But you know, he was very, very welcoming, and very friendly. So, yes, it couldn't have gone easier, really, for me. But, uh-
BRADLEY: Meeting the grandmother, the queen, not, again like your average meeting with the grandmother. Was that, you know, nervous about that, too, or?
LADY KATHERINE: Well, I first met her at Peter and Whorton's (ph) wedding. And, again, it was in a month (UNINTELLIGIBLE) and she was very friendly and it was fine.
PRINCE WILLIAM: She was very welcoming. She knew it was, you know, it was a big day and everything was going on. Peter (UNINTELLIGIBLE) and she had wanted meet Kate for a while. And so it was very nice for her to come over and say hello and we had a little chat and they got along very well.
BRADLEY: You clearly are tremendously fond of each other's families and I'm guessing that is going to be a big part of your life going forward, both your lives.
PRINCE WILLIAM: Definitely will, as you know, Kate's family, she has a very, very close family. And I get along really well with them. And I'm very lucky that they have been so supportive. Mike and Carol (ph) have only been, you know, really sort of loving and caring and really fun. And have been really welcoming towards me. So I felt really a part of the family. And I hope Kate's felt the same with my family.
BRADLEY: People are bound to ask, you leave university, you have been going out a bit, and you split up, famously, all over the papers. What was all that about. I mean, people are bound to want to know.
PRINCE WILLIAM: Well, I think to be honest I wouldn't believe everything you read in the paper. But in that particular instance we did split up for a bit. But that was just, you know, we were both very young. It was at university, and we were sort of both defining ourselves as such and being different characters and stuff. It was very much trying to find our own way and we were growing up. And so it was just sort of, you know, a bit of space and bit of things worked out for the better.
LADY KATHERINE: I think at the time I wasn't very happy about it, but actually, it made me a stronger person. You find out things about yourself, that maybe you hadn't realized or I think you can get quite consumed by a relationship when you are younger. And you know, I really valued that time for me as well. Although I didn't think it at the time, looking back on it, I think-
BRADLEY: A chance to re-center yourself? Is that what you?
LADY KATHERINE: Yes, definitely, yes. All that.
(LAUGHTER)
BRADLEY: Did you always kind of have at the back of your mind that you wanted to marry each other? Did that come slowly? Did you suddenly decide a couple of weeks ago? I mean people have assumed you are going to be married for a long time. How did you both come to it in your head?
PRINCE WILLIAM: Well, from my point of view, when I first met Kate I knew there was something very special about here and I that I knew there was possibly something that I wanted to explore there. But we ended up being friends for a while. And that just was sort a good foundation, because I do generally believe now, especially if it is being friends with one another is a massive advantage. And it just went from there. And over the years I knew things were getting better and better. And we went through a few stumbling blocks as every relationship does, but we picked ourselves up and carried on and we, you know, from where you have the odd problem when you are first getting to know each other. Those are all gone and it is really easy just being with each other and it is really fun. And I'm obviously extremely funny and she loves that.
(LAUGHTER)
And so, it's all good.
LADY KATHERINE: You speak (ph) for yourself.
BRADLEY: Kate, you were obviously upset when you split up, but all of your friends, both of your friends talk about this is, this is a very substantial love that has built up over a very long period of time. You know, that is part friendship and obviously more than that.
LADY KATHERINE: Well, I think if you-when you go out with someone for quite a long time, you do get to know each other very, very well. You go through the good times, you go through the bad times. You both personally, but also within the relationship, as well. And you know, I think if you can come out of that stronger, and you know, learn, as I said, things about yourself, and you know, it is certainly-it's been a good, a good how many years?
PRINCE WILLIAM: I don't know?
BRADLEY: He did take his time, it must be said.
(LAUGHTER)
BRADLEY: Did you ever went him to, come on?
LADY KATHERINE: Well, we have had our conversation, but I think, it was-
PRINCE WILLIAM: We have talked about today, for a while, haven't we? We talked about this happening for a day. So Kate wasn't in the dark over it all. We have been planning it for at least a year, if not longer. It was just finding the right time. And that was what, you know, people say with couples it is all about timing and I had my military career and I really wanted to concentrate on my flying. And I couldn't have done this if I was still doing my training. So, I've got that out of the way. And Kate's in a good place, in terms of work and where she wants to be and stuff. And we just both decided now was a really good time.
BRADLEY: You're obviously going to enter this family, the most famous royal family in the world. William's mother was this massive iconic figure, the most famous figure of our age. Is that worrying? Is that intimidating? Does that-do you think about that a lot, both of you? You particularly, Kate?
LADY KATHERINE: Well, obviously, I would have love to have met her. And she obviously, she is an inspirational woman to look up to. And obviously to this day and going forward and things. You know it is a wonderful family, they have achieved a lot. And you know very inspirational. So, yeah, I do.
PRINCE WILLIAM: (INAUDIBLE) Because like Kate said, it is about carving your own future. No one is going to try, you know, no one is trying to fill my mother's shoes. And what she did is fantastic. It is about making your own future and your own destiny and Kate will do a very good job of that.
BRADLEY: This a life, you know, in the public domain, to a degree that you can't escape. You both know that. You were obviously very-you know it better than Kate does.
PRINCE WILLIAM: Yes.
BRADLEY: You are obviously very protective of her.
PRINCE WILLIAM: (UNINTELLIGIBLE) Of course, her and her family, I really want to make sure that they have the best, sort of guidance and a chance to see what life has been like or what life is like in the family and that is almost why I have been waiting this long. Is I wanted to give her a chance to see, and to back out, if she needed to.
(LAUGHTER)
PRINCE WILLIAM: Before it all got too much. Because, you know, I'm trying to learn from lessons done in the past. And I just wanted to give her the best chance to settle in and see what happens the other side.
LADY KATHERINE: I'm honestly glad that I have had the time to sort of grow and understand myself more, as well. So, hopefully, hopefully get to
PRINCE WILLIAM: Does that mean I've (ph) done well (ph)?
LADY KATHERINE: Yes.
PRINCE WILLIAM: Good.
BRADLEY: So, you know, there has been a conscious-I mean, part of the reason it has taken you this long is that you have both spent a long time contemplating the future, being calm about it, pondering about it, pondering it, thinking about it? Is that right?
PRINCE WILLIAM: It is. Yes, we have talked about it lots of ways. So it is something we have always had a good chat about. And like I said, both of us, we have come to the decision, you know, pretty much together. I just choose when to do it and how to do it. And obviously, being a real romantic, I did it extremely well.
(LAUGHTER)
BRADLEY: Kate, just coming to a close. People have put, you know, placed some criticisms of you, you know, about your work and so on. Does that hurt? How do you respond to people who say those things?
LADY KATHERINE: Well, I think, I know I have been working very hard for the family business. And sometimes those are long days. And, you know, if I think-I know I'm working hard and, you know, pulling my weight both at work, and playing hard at the same time, you know, I think everyone who I work with, I think, I can see that I am now pulling my weight and that is really what matters to me.
BRADLEY: You know, your family, as you have said, you are very close. Does it hurt what has been said, or do you let it run off you, or all your collective backs, on the ground if that is just what you have to live with?
LADY KATHERINE: Well, again, I think if you-the people around home are very supportive to us. And, you know, those are the people that really matter to us, our close friends and close family. And I think if they sort of feel that you are doing the right thing, you can only be sort of true to yourself and you sort of have to ignore a lot of what is said. Obviously, take it on board, but you have to be yourself, really. And that is how I've stuck by it really.
BRADLEY: It is a massive thing you are going into now, obviously, marriage is a big thing for everyone. But it is, you know, in such a public way. Are you excited? A little bit terrified?
PRINCE WILLIAM: I'm actually excited. Quite happy when everything is over.
(LAUGHTER)
But no, we are hugely excited. And it is, you know, we are looking forward to spending the rest of the time, you know, the rest of our lives together. And seeing what the future holds.
BRADLEY: And Kate, for you, you have had a long time to sort of contemplate this moment. Do you-
PRINCE WILLIAM: Let's not over emphasize (ph) the long time.
(LAUGHTER)
LADY KATHERINE: It is obviously nerve wracking because I don't know what I'm-I don't know the ropes, really, obviously. But no, I'm willing to learn quickly and work hard.
PRINCE WILLIAM: She'll do really well.
LADY KATHERINE: Yes.
BRADLEY: A lot of opportunities, obviously, within the family. You know, you have a huge ability to change people's lives for the better. I guess that is something you must have contemplated as well.
LADY KATHERINE: Yes. Well, I really hope I can make a difference. You know, even in the smallest way. And you know, I'm looking forward to helping as much as I can.
(END VIDEOTAPE)
QUEST: Prince William and Kate Middleton in their first joint interview that was released just 17 and a half minutes ago.
Let's talk about this and their relationship, and the pitfalls to some extent that, perhaps Kate, more than William, face as they go forward. The public relations specialist Max Clifford joins me now to talk about this.
Max, many thanks indeed. If there is one person, your clients have included Frank Sinatra, Muhammad Ali-sorry, Muhammad Al Fayed, Marvin Gay, and Simon-
And Muhammad Ali.
QUEST: And Muhammad Ali. So, you know the lay of the land here. As you look at these couples, what do they need to be careful of next?
MAX CLIFFORD, MAX CLIFFORD ASSOCIATES: Well, I mean, it is really living your life in the public eye. A lot is expected from the royals. William has been, you know, that's all he's ever known. He will have learned a lot, he's a bright lad. He's an instinctive lad. He understands image, public relations, far more so than his grandparents ever would or could. And he will have learned a lot from his mother. And what happened to his mother.
Kate has got everything to learn, because although she's been thereabouts for sometime now she is suddenly right in front of everything. So, I think it is going to be very important for her to breathe in, breathe out, when they say that she can. And when they say that she can't, that she doesn't. To listen to listen to everything that the people around William tell her, and be very careful of, if I'm going to do this it is going to upset the roles. If I'm going to do that, I would naturally want to so this, but could that offend someone.
QUEST: So the challenge of being rebellious, or even being truculent, no longer exists in that sense.
CLIFFORD: Well, it is a challenge, but you know, I think that such is the kind of control of public relations these days, everything is image over substance, that you have to be incredibly careful. It was a lot easier for Fergie, and to some degree for Diana, than it is for Kate Middleton.
QUEST: Really? I mean, because we think of the phenomenal and ferocious press that took place over Diana, between the engagement and the wedding.
CLIFFORD: It is a lot more ferocious now, believe me.
QUEST: Really?
CLIFFORD: Yes, if you thought it was bad then, you just watch.
QUEST: You see, I'd have thought-I'd have thought that the fact that Middleton, Kate Middleton has already been to the law, to the press complaints commission, and they have already taken injunctions and all those sort of things against, would have set perimeters that the press now know we don't mess around with.
CLIFFORD: Absolutely right. And as long as, you know, they are the popular, the fairy tale marriage, then the press are going to behave themselves, because it will backfire on them. But you know, for example, suddenly she will find an awful lot of close friends, many of them she's never met in her life, coming out and saying she said this, she said that. And of course, the more controversial, the more likely it will make the front pages. So, you know there is a much wider perimeter. She is walking into a media minefield. And she has to be aware of that. And she has to make sure that there are people around her that understand that and protect her.
QUEST: Has the royal family itself changed, post Diana, in the sense that, you know, we-the days of locking Diana up in the palace in Clarence House, before the marriage, of leaving her on her own. They seem to be much more, we're going to support you in any way we can. Or is that just me with the rose-colored spectacles?
CLIFFORD: I think that they have learned that that is how it has to be. They are moving with the times in a way that they never used to do. And that is good for her. And it is certainly good for William. I think that the fact is that Prince William is the star of the royal family and in many ways the future of the royal family and their popularity worldwide will depend on him.
QUEST: That is so different to what it was with Diana, wasn't it? When Diana came along, she became the star, now it is still William. I mean she was the biggest royal star, worldwide, particularly in the States, and many other countries. But of course, he is the son of his mom. And that gives him a wonderful position to start from.
QUEST: Does Kate Middleton, and I ask this question with respect, but does Kate Middleton need to be afraid of people like you? In the sense that somebody coming along with a story that doesn't-
CLIFFORD: She has got to be afraid of everybody that is closely involved with the media. She has been aware of people who, like me, everybody comes to all the time with stories. You know, I've probably broken more stories in this country than any journalists in 20 years, because everybody comes to me. So she has got to be aware. Personally, she certainly got no worries from me, because what little I see I really like. But there is going to be plenty of people out there that will see an opportunity to make an awful lot of money. And the media loves those people.
QUEST: And you-if somebody came to you and said, I've got a bit of dirt on Kate. I'm not even saying what it might be, but I've got a bit of dirt, would you say, not today.
CLIFFORD: No, I mean, it is very simple Richard. If I believe what they are saying and what I think has got some substance, then I'll look at it. But you know, just for the sake of it, absolutely no way. She is going to need far more protection than anything else, believe me.
QUEST: I don't want to end an interview with you, Max, on a sort of a down or sour note. So, I think we can both agree though, it is a splendid day for the British monarchy.
CLIFFORD: Oh, it's a happy event. And of course, you know, he is a star. You know, the royal family are being brought in to the current century whether want to or not. He's the person to do it, far more so than his father. His father is always going to struggle with the media. He finds it very natural and very easy. He's the best chance they've got of a very bright future.
QUEST: And we thank you for coming in this evening to talk to us.
Many thanks, Max Clifford. Lovely to get your insight and perspective on this.
CLIFFORD: Thank you.
QUEST: Now we'll talk more about the happy couple, the role, the ring, and we'll be live at Buckingham Palace. And of course, we'll have a half an hour of business news as well. Stay with us.
(COMMERCIAL BREAK)
QUEST: So we have the announcement, the betrothment, we have seen the ring, and now we have heard from the couple themselves. Saying, which I think the classic line of all, was that since the announcement we are like ducks, calm on the surface, feet going underneath. Keeping it to ourselves has been really difficult.
But ultimately, of course, it has their day. And CNN's Max Foster has been following the day's excitement form outside Buckingham Palace.
It is a cold evening now, Max, but love is in the air and that warms the cockles of your heart. As you listened to what you have seen of the day, Max, what struck you most?
MAX FOSTER, CNN CORRESPONDENT: Well, I have to say it is not a surprise to you or to me that this announcement was made. You know, the timing perhaps sort of came out of the blue. That was always going to happen. It happened on Facebook, that was a bit of a surprise. But the big surprise has to be seeing the ring. When the cameras went down to Kate's hand, you saw Princess Diana's ring there. And a lot of people, I have to say, round here, pretty touched by that moment.
And then we had the interview, which has been playing on your program of course. And this is an ordinary couple and a love couple. He carried his ring in a rucksack. He was nervous about asking her father. It was an ordinary couple, a couple clearly with chemistry, clearly in love. And I think this is what is going to be the memory of today, really. The British public, the Commonwealth public getting a sense of the couple as they are, their first, two on one interview. And it was exciting to see, it is romance. It is a fairytale.
QUEST: Oh, hang on. But also, as I thought, as we saw the day, this longevity of relationship, this eight years, nine years, since they first met. Which is such stark contrast to that which was with Diana and Charles.
FOSTER: Yes, and you have to remember that Kate has nearly 10 years on Diana, when she got married. So, she's had more experience of the royal household. More experience of life. She is more grown up. She knows what she's getting into more. And this is a couple whose relationship flourished on its own. There was not pressure from the palace at all. They just met at university and they got on really well and the relationship stood the test of time. So the different relationship, but inevitable parallels with Diana.
QUEST: Two middle aged, well one middle aged, one younger one, standing here, sitting here, talking about the stuff of love and royalty. Max Foster, who will be presenting CONNECT THE WORLD, from outside Buckingham Palace. And there won't be a dry eye in the house. Max Foster joining me there.
Now, after all that lovey-dovey stuff, we must turn our attention back to business. Another desperate day for the Dow Jones, it has been slipping under the 11,000 mark. It is back over that slightly. But the market is still down 190 odd points. We'll take you to the New York Stock Exchange to see exactly why this is happening, in a moment.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN. And here, the news always comes first.
And news of love and romance tonight, leading all stories. Newly engaged Prince William and Kate Middleton have been talking about his proposal and their future life together, as they unveiled the ring that William has given her as an engagement ring last month in Kenya. It is a sapphire and diamond ring that belonged to the prince's late mother, Diana, Princess of Wales. The couple, of course, plan to be married in London in spring or summer of next year.
The alleged international arms dealer known as the Merchant of Death is on his way to the United States after Thailand's prime minister cleared the final hurdle for his extradition. Viktor Bout faces U.S. terrorism charges. Russia has called it an illegal extradition and Bout says he's innocent.
The British government is paying out a settlement to a group of former Guantanamo Bay detainees. The men say British security forces were complicit in their torture. The British justice minister says the settlement is not an admission of liability. The amount hasn't been revealed. It's reported to be millions of dollars.
Now to Wall Street, where the major averages are sharply lower. In fact, over 200 points down at one stage. Now, they've come back quite a tad, just off 190 or 180 or so.
Alison Kosik is at the New York Stock Exchange to tell us why.
Why, all of a sudden, on an average Tuesday in November?
ALISON KOSIK, CNN CORRESPONDENT: Well, it has everything to do about the global economy, Richard, specifically Ireland and China. Investors are uncertain how things are going to play out with Ireland's debt crisis. You know, many are expecting Ireland to go ahead and take a bailout, much like what we saw Greece go through.
And, of course, there are concerns about China, you know, what steps is China going to take to cool its hot economy?
Investors are expecting that China is going to go ahead and raise interest rates. And, of course, that's a concern to the business community, because as China tries to put a lid on growth without a strong recovery happening in other countries like the U.S., that can hurt global demand for goods, cutting into companies' earnings, ultimately hurting stocks.
So Wall Street's bottom line is worried about this domino effect.
We've also got the stronger dollar in play. That's weighing on stocks. We've seen this inverse relationship happening of late. So it's been the dollar dictating which way the market goes instead of the other way around -- Richard.
QUEST: Alison Kosik in New York with the falling Dow Jones.
The European Union is fighting for its own survival, according to the president of the Council. Herman Van Rompuy talked of a survival crisis within the EU, warning that the problems with one or two members could bring down the whole union.
As finance ministers gathered in Brussels to discuss debt in Ireland, Van Rompuy said members need to work together to keep a single currency alive. He told a news conference the end of the Eurozone would mean the end of the European Union. He's confident, though, both can survive and he's ready to do whatever it takes.
(BEGIN VIDEO CLIP)
HERMAN VAN ROMPUY, PRESIDENT, EUROPEAN UNION: The first year of the Lisbon Treaty has been clearly marked by the crisis of the Eurozone. It was not a period of vision, it was a period of survival. And it's not over yet.
This does not make 2010 into a crisis year. On the contrary, we have shown how to deal with the crisis and we are coming stronger out of it. We are not complacent knowing the problems in some E.U. countries, but we are confident to overcome them.
We also have the necessary instruments to intervene with, if needed, and if requested.
(END VIDEO CLIP)
QUEST: Herman Van Rompuy.
Ireland is saying it again, it is not asking for a big bailout from the European Union. The prime minister (INAUDIBLE), speaking before the parliament, says the country has not made a plea for external support.
CNN's Jim Boulden reports from Dublin.
(BEGIN VIDEOTAPE)
JIM BOULDEN, CNN CORRESPONDENT (voice-over): It's another lunchtime at the Day Centre on Bow Street (ph) in Dublin. Volunteers get ready to serve meals to the homeless and to families and the working poor -- anyone who needs a hot meal, no questions asked.
one thing that is sure to those who work here, a lot more people are coming through the door these days.
BROTHER KEVIN CROWLEY, CAPUCHIN DAY CENTRE: It is because the recession that we have noticed that the number of people coming who are not homeless and the people who can afford to live in what they're -- in what they're getting from -- from, or shall we say, through social welfare is probably not sufficient. Even to keep their families going is difficult.
BOULDEN: Patrick has been homeless and out of work for years, though he's only 21.
PATRICK DUNNE, UNEMPLOYED WORKER: It's still hard, you know, because we're still (INAUDIBLE), you know what I mean, there's still (INAUDIBLE).
BOULDEN (on camera): You still need to come here for lunch?
DUNNE: Yes, I come here for lunch, because I haven't got a job. I'm just in college, you know what I mean, so I'm tired and homeless in the last three years.
BOULDEN (voice-over): Far away from those worries, Grafton Street (ph), where shops are hoping Dubliners will open their wallets this Christmas, no matter the economy or the worries about faltering banks and talk of a potential bailout.
(on camera): While the economy and jobs are certainly on the minds of Dubliners, some say going to the European Union for a bailout would be like going cap in hand, losing some sovereignty to Europe. Others say a bailout could be the very thing that kick starts the economy.
(voice-over): That's what 46-year-old I.T. (ph) worker Derrick Burn (ph) wants to see -- money for the banks. He was unemployed for more than a year and has only just found full-time work.
DERRICK BYRNE, I.T. WORKER: I think it would help because they are borrowing at a very high percentage rate at the moment. The IMF would be a cheaper way to get us out of trouble, I believe.
BOULDEN (on camera): And then if the banks were able to get money at a cheaper rate, then maybe they would be lending more?
I mean is that how you see it?
BYRNE: Exactly. Yes. Yes.
BOULDEN: And small and medium companies would get something?
BYRNE: They would survive, yes.
UNIDENTIFIED MALE: Enjoy. Thank you.
BOULDEN (voice-over): There is one small business in Dublin surviving nicely. Forty-nine-year-old New Zealand born Barista Buzz Stendel (ph) opened his second cafe in the teeth of the recession. It seems Dubliners could not do without his espresso.
(on camera): Do you see things getting better?
Do you think Ireland sort of hit the bottom and (INAUDIBLE)...
BUZZ STENDEL: Oh, God. Most definitely. I think people spending a little bit more. And one thing that we are seeing is that a couple of years ago, as you walked around Central Dublin, you would not have seen posted outside restaurants, cafes and things like that, "work wanted." Now, we are seeing all of that type of thing.
BOULDEN (voice-over): Besides creating jobs, Buzz (ph) says he plans to carry on putting smiles on top of his coffees and the faces of customers, as Ireland waits to see what can drag this economy out of the doldrums.
(END VIDEO TAPE)
QUEST: Now, the -- as I said, the Irish prime minister, Leticia (ph), has been speaking in parliament. He said: "The cost of money is simply too high. We have to find further initiatives within the euro area to deal with that matter."
Jim Boulden is still in Dublin and joins me now live.
He -- look, is it just a nuanced difference, Jim, between applying for a bailout and talking about ways to deal with the debt?
BOULDEN: Yes. Yes. I think it is, Richard. The prime minister chose his words carefully. They weren't dissimilar to his words last night, when he went on national television. But he said things like they needed credible, efficient, workable solutions.
So you think of those words. He's not going to use the word bailout, he said last night and again, this is not a bailout. He wants to see a European wide solution to help the banking system, because it's about credibility, he thinks. It's about how do we get the markets to calm down, how do we get to rebuild trust in the markets so there isn't a problem in Portugal, there isn't a problem in Spain?
If that means that there has to be money pumped into British banks from the European Union, I think then so be it, that will be the solution.
But you don't get the sense that that's what they're looking for tonight. Maybe tonight, maybe tomorrow, we'll hear more about it. But at this moment, they're not going cap in hand to Brussels. And they're trying to make that very clear to the Irish population.
QUEST: Jim Boulden.
Jim Boulden live for us in Dublin tonight.
A major gap in the iTunes music catalog has now been filled.
(MUSIC)
QUEST: The Beatles are going digital and we'll discuss why it took Liverpool's finest so long to join the download party, in a moment.
(COMMERCIAL BREAK)
QUEST: Welcome back.
The U.S. Federal Reserve has come under coordinated fire from top economists over its QE2 policy. Twenty-three conservative economists penned an open letter to the chairman Fed -- the chairman of the Fed, Ben Bernanke.
Now, this is what they said. It was in "The Journal" and "The New York Times." It says: "We believe the Fed's large scale" -- QE2, in other words -- "should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable."
It says it will distort financial markets, will not promote employment.
Now, you'll remember, of course, QE2 pumps another $600 billion on top of the $1.75 trillion that's already gone into the economy. It will buy U.S. government securities. It was very much a divisive issue at the G20. The German fin min called it "clueless." South Africa, China, Brazil were not happy with it, either.
So, one of the authors of that letter was Douglas Holtz-Eakin, a former director of the U.S. Congressional Budget Office.
He joins me now from CNN Washington.
Douglas, look, we all know that there are problems inherent in QE2. Bernanke admits that it's untried and untested.
But frankly, if this is the only game in town, surely it has to be played.
DOUGLAS HOLTZ-EAKIN, PRESIDENT, AMERICAN ACTION FORUM: No, I don't think so. I mean there's a -- a serious issue of whether this is advisable, because the benefits are small. Even the proponents would argue that this is going to lower medium to long rates by 30 or 40 basis points, at most, and add substantial costs. It costs the Fed in that it -- it gives up the opportunity to do this later in the event of an adverse shock. So you -- you lose some policy flexibility.
It will create some more inflation. The Fed claims it's not too worried about that. I'm more skeptical of having inflation expectations become a bit unhinged. It certainly has created the downward pressure on the dollar and while the Fed would say it's not trying to get into competitive devaluations, it raises international tensions at a time when we need better international economic performance.
QUEST: Right.
HOLTZ-EAKIN: So you've got something which has more cost than benefits. And in those circumstances, you shouldn't do it.
QUEST: But if part of the Fed's mandate is unemployment, as well as price stability, and we know that growth at its current level has no chance of denting the 9 percent unemployment rate, then what would you prefer them to be doing instead?
Fiscal policy is just as moribund as monetary policy would be.
HOLTZ-EAKIN: Well, monetary policy is not going to dent the unemployment rate. So they're not making progress on one part of their -- their mandate. It's likely to create more inflation. So they're going the wrong way on the second part of their mandate. They really should stand still and hold steady.
That doesn't mean that fiscal policy shouldn't be more proactive. It should. And I believe that with the recent elections, we have seen a real swing in the business climate in the United States. The worst excesses of the liberals will now be checked by Republicans in Congress. And there is great hope that we will see...
QUEST: But...
HOLTZ-EAKIN: -- a new effort at getting the budget deficit under control and clearing the way for faster economic growth.
QUEST: And forgive the impertinence of this question, but it...
(LAUGHTER)
QUEST: -- it's -- is it really helpful for economists to be weighing in, sticking the boot firmly into the groin at a time when, frankly, the best hope has to be that it works because the policy is now in force?
HOLTZ-EAKIN: It is fair game for the Federal Reserve to be criticized. It is a -- a wing of the U.S. government. It has an enormous influence on the economic -- the economy. And I believe that if they -- they can't be big enough to take a bit of criticism, then they shouldn't be in those jobs.
That's a far cry from saying that someone else should do monetary policy. I don't believe the Congress, which has made a mess of fiscal policy, should be in this business. But I do think the Federal Reserve has an obligation to -- to stand up to criticism. And we believe that they're on the wrong track and we believe that inside the Fed, there's been a vigorous debate. And if this strengthens the hands of those who are opposed to this policy...
QUEST: But...
HOLTZ-EAKIN: -- then that moves us in the right direction.
QUEST: Douglas, we'd love to talk more about this, but today was a day when a prince married a -- or became engaged to a commoner. Say...
HOLTZ-EAKIN: No competition.
QUEST: -- and you've got it, mate.
You've got it, mate.
Economics or a royal wedding, you've lost.
Many thanks for joining us.
HOLTZ-EAKIN: Enjoy the wedding.
QUEST: Thank you.
Many thanks for joining us.
Douglas joining us from Washington.
And we'll talk to him more about these wider issues, of course, of economics.
Now, two giants coming together over Beatles' tunes. Apple Corporation has struck a deal to sell The Beatles' back catalog on iTunes. They may be the biggest selling band in history. They're latecomers to this digital age. It will be the first time the Fab Four's songs are available online.
Michael Copeland is senior writer at "Fortune" magazine.
He joins us now from CNN -- from San Francisco.
Michael, why did it take The Beatles so long to actually join this revolution?
MICHAEL COPELAND, SENIOR WRITER, "FORTUNE": Well, I mean you've got to remember that since the late '70s, the holding corporation for The Beatles, Apple Corp. (ph), has been suing Apple Computer, now Apple, Inc. Over various trademark infringements. So there's been legal entanglements over the years. I think, you know, in the end, I think the last legal battle was finished in 2007.
And so all the -- the remaining members of The Beatles and their heirs had to get together and really decide they wanted to do this.
QUEST: Right.
COPELAND: And, apparently, finally, they did.
QUEST: The -- there's not -- I read an interesting article that basically said, hang on, anybody that wants The Beatles on their iPod or MP3 player merely burned it onto a disc and then transferred it to their computer. Big yawn that they're available on iTunes.
COPELAND: I -- you know, you're right. I mean The Beatles are on -- if you're a Beatles fan, it probably -- they probably already are on your iPod. But Steve Jobs has said -- and we know -- for years, he said he wants The Beatles. He's a huge fan. And I think this is one of those things where Steve Jobs wanted it to get done and it's finally gotten done.
And -- and so for Apple, it's more symbolic than it is anything else. It's not going to help their bottom line. It might help them sell more iPods, which is how they make their money. But it's not going to be a huge money maker for them.
QUEST: All right, Michael, many thanks, indeed.
Now, listen, I -- I hail from Liverpool, so, frankly, that piece of -- that sort of music is -- is in my blood, mother's milk and The Beatles, as they would say.
Michael joining me from San Francisco.
When we come back in just a moment, what a busy day. But we do have time to meet The Boss next. You've met the team, now see our three CEOS get on with some work.
(COMMERCIAL BREAK)
QUEST: Welcome back.
On QUEST MEANS BUSINESS, we are much more than just the market numbers. It's very important that we take a look at the people in the driving seat of business. We've been following three chief executives from the world of food and fashion. Now, we've met them and now we need to see them in action.
It's episode two of The Boss
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: (voice-over): Last week on The Boss, FreshDirect CEO, Richard Braddock, told us what it took to turn the company around.
RICHARD BRADDOCK, CEO & CHAIRMAN, FRESHDIRECT: We were pretty close to being out of business.
UNIDENTIFIED MALE: Sarah Curran of my-wardrobe.com revealed her own insecurities.
SARAH CURRAN, CEO, MY-WARDROBE.COM: More than anyone, I'm probably the most critical person about the brand and the (INAUDIBLE) and the products and the new styles.
UNIDENTIFIED MALE: And Michael Wu, the chairman of Hong Kong Maxim's Group set out his big plan to enter China.
MICHAEL WU, CHAIRMAN & MD, HONG KONG MAXIM'S GROUP: Change is actually quite difficult to implement in a company of our size.
UNIDENTIFIED MALE: It's morning in Hong Kong and Michael Wu is meeting the managers who run his various brands. This is the only time during the week when they all get together.
WU: This Tuesday morning is the time when nobody goes on business trips, nobody has their own internal meetings and it's just an hour-and-a- half with me.
UNIDENTIFIED MALE: The time gives executives the chance to air their concerns.
UNIDENTIFIED MALE: My way of doing it is with a centralized purchasing and food department.
UNIDENTIFIED MALE: For Michael, it's an opportunity to listen to his employees and to set his policy.
WU: Communication, I think, is very important. Our company has 14,000 people and it's very easy for our message to get lost.
Mainland China someday.
UNIDENTIFIED MALE: At the top of today's agenda, China. Hong Kong Maxim's Group entered the mainland market five years ago, with their bakeries. Now, they're ready to expand. For Michael, tackling this major market will require a smart strategy that starts in this boardroom.
WU: I want to explain this. Why do we need this?
Because in three or four years, we need to be here. This is our goal.
UNIDENTIFIED MALE: This is Michael's biggest challenge, his biggest gamble.
Is this where the boss really earns his stripes?
WU: Change is quite easy for us. It's in our blood. We try new things every year. We do new things every day. And we have a whole organization which is geared toward change.
UNIDENTIFIED MALE: In Central London, a cue is forming outside Somerset House. It's London Fashion Week and these followers of fashion are waiting to see the latest creations.
For Sarah and my-wardrobe, London Fashion Week is one of the busiest weeks on her calendar.
SARAH CURRAN, FOUNDER & CEO, MY-WARDROBE.COM: My hours are pretty much 24-7. There is no switch off. That really means I have no work-life balance. But, you know, for me, it feels quite natural.
UNIDENTIFIED MALE: The London, New York and Paris fashion shows are Sarah's greatest challenge. This is when her judgment comes into play.
CURRAN: Sometimes I wake up in the morning and I'll say to myself, which city am I by, where am I. But yet you've really got to keep ahead. And that's why, again, trends are very, very important.
UNIDENTIFIED MALE: Today, she's on the lookout for those key fashion pieces that will make or break her collection next season.
CURRAN: It's really important before you go to any -- any of the Fashion Weeks that you understand brands, even if not bought (ph) and -- and also the budget you're going to attribute to that brand, because what you don't want to do is get to the end of the buying season or get to the end of your open to buy, which is your buy budget that season, and that you not have any buying budget left.
UNIDENTIFIED MALE: Sarah will have more buying budget this time around. Her buying power for the spring-summer 2011 collection is being doubled. As the boss, Sarah knows she needs to be strategic here.
CURRAN: It's very, very planned and sometimes you can -- you want to get away -- you know, get carried away and bring on all these brands. But, actually, you've got just to keep looking back at, you know, how much you spent, what is your buying budget left.
UNIDENTIFIED MALE: Equally important during Fashion Week, the opportunity to network -- an opportunity for Sarah to build her brand. For some, like Sarah Jessica Parker, the attention comes naturally. Not so for the boss.
CURRAN: My natural sort of comfort zone is not, you know, is not in front of the camera. As the business grow, there's sort of a certain amount of -- I wouldn't say pressure, that would be kind of wrong, but there's -- but there's -- there's a lot of sort of demand for me just to be more -- be more present.
UNIDENTIFIED MALE: Perhaps for Sarah, leaving the comfort zone is the ultimate penalty of being the boss.
BRADDOCK: I think this is going to be a -- a great re-launch. And I think...
UNIDENTIFIED MALE: In New York, Richard is meeting with his creative team. The issue -- the online revamp of the four minute meal, one of the company's most important products.
BRADDOCK: Why doesn't someone hold up a before and after package. Well, we enhanced the -- the -- the taste appeal of the product dramatically and...
UNIDENTIFIED MALE: The four minute meal is about to cross the Hudson River. New Jersey is its next market.
BRADDOCK: We're headed to probably two expansion markets. In the short-term, we're out raising money for that to demonstrate to people we can do this not just in New York.
UNIDENTIFIED MALE: So you'll notice the editorial content at the top is now abbreviated.
UNIDENTIFIED MALE: On the shelves and online, Richard knows the new market requires a fresh push. For that, he's counting on his team to make the message digestible to new customers.
UNIDENTIFIED MALE: I did a story board for my story board.
UNIDENTIFIED MALE: A new online video of the product is in the works by one of his team members.
UNIDENTIFIED MALE: I'm so upset. It's a 60 second video of (INAUDIBLE) in the script. But no wait and no waiter. Four minute meals made fresh daily, exclusively at FreshDirect.
BRADDOCK: It will definitely get you a super duper promotion so...
UNIDENTIFIED MALE: (INAUDIBLE).
BRADDOCK: Yes, it's good.
UNIDENTIFIED MALE: For Richard, getting the team to think about expansion is his top priority.
BRADDOCK: When you ask your people to think everyday about how to make the business better, you create a mind set that -- that says, in fact, I can make it better and then you, through the process of them seeing that the things they try actually work on a short-term basis, you create a lot confidence.
UNIDENTIFIED MALE: Next week on The Boss, new markets and new customers -- but will New Jersey work for FreshDirect?
And Sarah has the product, but how will she sell it online?
(END VIDEO TAPE)
(COMMERCIAL BREAK)
QUEST: And that is QUEST MEANS BUSINESS for tonight.
I'm Richard Quest.
Whatever you're up to in the hours ahead, I hope it's profitable.
"WORLD ONE" starts is now.
END
