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Quest Means Business
Torrential Rains Paralyze Australia's Coal Mining Industry; Mikhail Khodorkovsky Gets 6 More Years Added to Sentence; Ray of Hope in the U.S. Job Market
Aired December 30, 2010 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, HOST, QUEST MEANS BUSINESS: Torrential rains paralyze Australia's coal mining industry.
Six more years of hard time, a Russian judge throws the book at former oil tycoon Mikhail Khodorkovsky.
And a ray of hope in the job market, as U.S. jobless claims fall below the key benchmark for the first time in over two years.
I'm Max Foster in for Richard Quest. This is QUEST MEANS BUSINESS.
Hello to you.
Torrential rains across Australia's Queensland state have left the country's coal mines struggling to cope. Just look at the scene across Queensland. Cars and buildings flooded, people trapped inside their homes. Huge areas of land completely covered in water. This all affected one of the most important mining areas in the world. Queensland is Australia's largest coal producing region. Anglo-American is the latest mining company in the state's coal zone, known as the Bowen Basin, to declare force majeure, or act of God. They declared force majeure at five of their mines. It limits their legal liabilities if they miss contracted deliveries of coal.
Well, how significant is this weather to Australia's coal industry and coal exports across the world. Well, Jim Boulden can talk us through that.
Jim.
JIM BOULDEN, CNN FINANCIAL CORRESPONDENT: Max, yes, it is believe some 30 percent of Australia's exports are now under force majeure. It is about $51 billion a year industry, now being affected by all of this. Now, you see here. Just wanted to show you the top coal exporters in the world; Australia is No. 1 in the world, 2, Indonesia, Russia, Colombia. But Australia very big on the coal that is used in places like Japan, when it comes to heating homes, and making electricity. So, Australia exports are crucial not only to the Australian economy but in Asia as well.
Now what companies are affected? So far this week, BHP Billiton, Anglo-American, Rio Tinto, have all said that they are affected. We have not heard from Estrada yet, but these are the companies that are force majeure in the Queensland area. And BHP says that any impact to its bottom line will be revealed on January 20, when it puts out its results.
Now, let's look at the exports. I said earlier, you see Japan, by far gets the majority of the exports. Then Korea, Taiwan, China, Indonesia. No surprise, really, that 88 percent of Australia's exports go to Asia, just a fraction goes to Europe.
Now there is about 40 percent of the world's coal production is made for energy. The rest goes to steel. So it is affecting both the steel industry and those who need to make electricity, as well. How long will this last? Well, the companies say, no idea who long this force majeure will stay in. But it is sure that oil prices-I'm sorry, coal prices, of course, will be on the rise.
Now, it is not just coal mines that are being hit by these floods. Some affected areas are major producers of sugar, cotton, and other crops. Australia's ag core (ph) says consumers could face higher prices for bread, beer, cereals and biscuits, because sugar cane crops have been damaged. Megan Lewis of the ABC has been speaking to farmers. She says their losses will be massive.
(BEGIN VIDEO CLIP)
MEGAN LEWIS, REPORTER, AUSTRALIAN BROADCASTING CORPORATION: In 2008, when that flood came through it was absolutely devastating to local crops. Mainly cotton and grain crops around this area. So of course, farmers are expecting massive crop losses again this time around. And at this stage it is just a matter of wait and see how high the water goes and how devastating those crop losses are.
(END VIDEO CLIP)
FOSTER: OK, thank you to you, Jim.
Well, sugar, wheat and coal contribute billions to the Australian economy and much of it comes from Queensland. It is too early to say how much money the three industries will from this flooding, but to get an idea let's first take a look at sugar. It's value to the Australian economy, about $1.75 billion a year. The Queensland government says the state produces 95 percent of country's raw sugar. It also produces approximately a million tons of wheat; it's a major winter crop.
But mining is the major contributor to the Queensland economy and the economy at large, with more than 30 billion tons of black coal reserves in the state, a huge figure.
Let's find out what's in store for the industry and the people of that region. Let's go to Guillermo, who is at the weather center.
Hi, Guillermo.
GUILLERMO ARDUINO, CNN METEOROLOGIST: Hey, Max, the rain is in the north. The problems are here towards the southeaster corner of Queensland. I'll give you those details in a second. I'm going to zoom into Brisbane. So you see the area where we do not have significant rain, but we have had a lot of rain before. So I'm going to take now, one router, I'm going to show you one element that we find on the Internet.
First, let me tell you that the flooding is unprecedented. We had heavy rainfall for months and now the landfall of a cyclone on Christmas Day, in the north. These red triangles indicate major flooding, especially when it comes to river conditions. Flood warnings are in effect, in this part of Queensland for over 12 rivers. And approximately 300 roads are closed and two major highways in Brisbane. So you see the red is where we see excessive, or the major flooding. Then more (UNINTELLIGIBLE) is the yellow, and the situation is-and let's go back to my maps, please.
The situation is much better here to the south, uh, in terms of the weather. The observations that we had before, on Tuesday, of the rain is more than what we see in a month. And on top of that we have seen last month, 400 percent over the average of the precipitation in this part of Australia. And this is Queensland, this is New South Wales. And this brim around the major area is 200 percent over the average. The good thing is that the precipitation is not expected to be significant where we had the major flooding. Or we see more rain that is seasonal in the north.
But the rivers are overloaded with water and they are trying to discharge all that water into the ocean. And that is going to take a week or so. But the pattern is in the area of interest drying out. That is very important to say. The floods will prevail for a week, Max.
FOSTER: OK, Guillermo, thank you very much.
ARDUINO: Sure.
FOSTER: We'll be back with the global weather picture a little later in the show. While Australia grapples with the cost of those unprecedented floods, the blizzard in the U.S. is being described as a budget buster.
Christine Romans joins us now from CNN New York.
Christine, this is affecting people and organizations on every level, isn't it, at this point?
CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Oh, absolutely. From governments and city managers who are trying to figure out how to pay for the snow to be removed, to the airlines and to the retailers. The retailers, by one estimate, lost $1 billion in revenue-a billion-the billion-dollar blizzard, of that day after Christmas and the day after, two very brisk shopping days here in the U.S. That is according to Shopper Track, an organization which actually tracks shopper traffic. And it found that in the Northeast, for example, where we had that huge deluge, that Nor'easter just slammed the Northeast, shopper traffic down more than 40 percent.
Now the question, Max, is whether this is lost revenue forever, or whether the retailers will be able to get some of that back. Whether it is just postponed revenue. And here in the U.S. you could see some-you could see some more clearance sales as retailers try to entice people back in.
There you can see online sales also very strong; $30.8 billion spent online. It doesn't matter if there is a blizzard to spend money online, right? That's up 13 percent from the same period last year. Those numbers are for the entire 2010 holiday season. That is from a different group called Comscore. So on the one hand, where the blizzard really nailed retailers, on the other hand you had very strong retail sales online.
Also we are trying to tally the loss to the airline industry. Maybe $150 million, as you know it is the first airline-the best airline profit for the overall industry in about 10 years. So they got hit there a little bit.
And budget busting for many of the city managers in counties and states, I told you. Some of them, Max, have already spent half their snow removal budget for the year. And it is not even January yet. So a lot of people are hoping that there will not be a couple of more big ones like this one, or they are not going to be able to figure out how to pay for it, with their strapped budgets.
FOSTER: Yes, you talk about those shoppers. You like to go to the shops, don't they? Because they assume that all the bargains are actually in the shops. But have those been transferred over to the Web sites? Are homebound shoppers finding deals there?
ROMANS: Not quite yet. I'm going to tell you something, you know, one of the things that is lost forever with the day after Thanksgiving- Christmas, and the day being snowed in, is those impulse purchases. You know, when you are excited, you are returning one thing, or using a gift card, and you buy a couple of other things. That is something that the retailers have lost for good. That is done. Now the question is, how much of that billion dollars can they recoup with just regular walk in sales, over the next week or two, Max.
FOSTER: Christine, in New York, thank you so much for that.
Now, Mikhail Khodorkovsky knew he would be spending this new year in prison. After today's sentencing in Moscow, now he faces the prospect of many more to come. We'll discuss Russia's most controversial convict in just a moment.
(COMMERCIAL BREAK)
FOSTER: (AUDIO GAP) He will remain in prison until 2017, by our calculations. The former Russian oil tycoon and his business partner, Platon Lebedev, where given 14-year sentences after being found guilty of massive oil theft earlier this week. That means six extra years in prison for Khodorkovsky. His sentence begins in 2003, so he has effectively already served half his time.
But as the controversy over this case continues Khodorkovsky's lawyer insists the former Yukos boss will appeal. A few hours after Mikhail Khodorkovsky was found guilty on Monday I spoke to his elder son, Pavel. He said, although he was sadly expecting more prison time his father would stay strong.
(BEGIN VIDEO CLIP)
PAVEL KHODORKOVSKY, OIL TYCOON'S SON: Even after spending seven years in jail, it is still a big-it's still a big shock. My father is very realistic and he said, already, that he will probably spend some other years in jail. But he is ready for that sacrifice, because he is fighting for an ideal. And he is fighting for something more than his own and Platon Lebedev's freedom.
(END VIDEO CLIP)
FOSTER: Generally, no shock that this was out, really. Our Senior International Correspondent Matthew Chance has been following this story throughout the year. Earlier I asked him what justification the Moscow judge had given for this sentence.
(BEGIN VIDEO CLIP)
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Max, the judge said, when he passed down this 14-year sentence, that the only way that Mikhail Khodorkovsky and his business partner Platon Lebedev could be rehabilitated, is if they are isolated from society for a sentence of 14 years. He did say that the sentence would run from 2003, which is when Mr. Khodorkovsky and Mr. Lebedev were first put into prison. So that means that they'll be let out, on my calculations, in 2017. So it is a pretty severe sentence. Indeed it was the harshest penalty the judge could have imposed for the crimes that he's now been convicted of.
FOSTER: Khodorkovsky's son told me they weren't surprised at the verdict, but was there any reaction from Khodorkovsky himself to the sentence?
CHANCE: I haven't seen that reaction, but certainly the expectation has been amongst the legal team, of Mikhail Khodorkovsky, and I expect the man himself, I mean, the man himself. That the judge was going to give the harshest sentence possible.
The legal team have got no faith whatsoever in the legal system, at the moment, in Russia. In fact, one of the lawyers, Huey Schmidt (ph), came outside the courthouse, shortly after the sentence was handed down, saying that the verdict and the sentence was illegal. He said that it showed that the whole trial had been politically motivated. And that they intended, very much, a soon as possible to appeal.
FOSTER: And they do have some support, don't they? From foreign governments it seems, who have criticized the verdict, at least. Have we got some response to their view of the sentence?
CHANCE: Yes, certainly, the case of Mikhail Khodorkovsky enjoys considerable support, or his case enjoys considerable support from human rights groups, like Amnesty International, from foreign governments as well, the United States, the Germans, the European Union, the British as well. Amongst the many who have been criticizing the political nature of this trial.
Interestingly, in Russia, itself, only about a third of people in Russia, according to the latest opinion polls, pay any attention at all to what is happening to Mikhail Khodorkovsky, which is quite surprising. Because this is an incredibly important trial, an incredibly important case and it has been seen as deciding not just the fate of one man, or two men, but in fact the commitment of the Russian government to the rule of law. And so it is surprising how much support there is internationally, compared to how little support there is for Mikhail Khodorkovsky within Russia.
FOSTER: And we know that he will be appealing. What sort of process do we go into from here, then?
CHANCE: It is a convoluted process, I think, is fair to say. Within the next days he has to, his lawyers have to lodge and appeal. That will certainly be done. The problem is, of course, that there is a state holiday, a national holiday from January 1, in this country, until January 10. So that could be delayed for some time.
In the meantime, we understand from the court that he will be held in Moscow, in the same prison as he has been held at for the past several months. And he won't be shipped out to a penal colony in Siberia until he begins his sentence in earnest, and properly, in the new year.
(END VIDEOTAPE)
FOSTER: Well, the U.S. State Department has had more concerns over Khodorkovsky's case. A statement released after the sentencing today said, "We remain concerned by the allegations of serious due process violations and what appears to be an abusive use of the legal system for improper ends."
Now, celebrate your staff, give back to the community, that the message from three veterans of the corner office. Tonight, we are in New York and Hong Kong, in our special series, "The Boss".
(COMMERCIAL BREAK)
FOSTER: All week we have been trying-taking an insiders view of running companies worth millions of dollars. We've seen a fly on the wall with-we've been a fly on the wall with three business leaders on three continents. And let me remind you who exactly they are.
As CEO, Richard Braddock is the head of U.S. company, FreshDirect. He is in New York. He is also one of three business leaders who have been helping us put a human face on company life in the U.S., Europe, Asia, for our series, "The Boss".
Now we're also in London with the founder and CEO of My-Wardrobe.com Chief Sarah Curran says, let your confidence develop.
And in Hong Kong, it is all about recognizing great employees for Michael Wu, there. He runs Hong Kong's Maxim's Group. One of the territories biggest catering firms.
On today's episode, of "The Boss", I can tell you, give back to your community, to your employees. And one thing is true for all of them, put these people first, or their people first, then crunch the numbers, but put the people first.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Previously on "The Boss": After months of planning Richard Braddock took FreshDirect into a new market.
RICHARD BRADDOCK, CEO, FRESH DIRECT: You can't change without taking risks. You can't grow without taking risks.
UNIDENTIFIED MALE: In Hong Kong Michael Wu motivated his staff by celebrating their performance.
MICHAEL WU, CEO, MAXIM'S GROUP: I think recognition is a key element of motivation.
UNIDENTIFIED MALE: Michael Wu is meeting with two of his pastry chefs.
WU: Tell me what we have today, what we're trying?
UNIDENTIFIED MALE: We have a newly developed, like chocolate (INAUDIBLE)
WU: Yes?
UNIDENTIFIED MALE: He's testing out possible new products. Including a new cake that he believes will become Maxim's signature offering.
UNIDENTIFIED MALE: We have three Swiss rolls.
UNIDENTIFIED MALE: For Michael there is no more important role than being in charge of his products.
WU: The chef present me with products, occasionally, say, monthly. And what I'm looking for in a new product is I expect a cake to be flavorful, rich, authentic, light, and not so sweet, for the Hong Kong palette.
UNIDENTIFIED MALE: Michael is, "The Boss". Only he knows what he wants. After all it is his job to determine what will sell.
WU: Very good, charcoal sesame roll.
UNIDENTIFIED MALE: For the chefs, it means listening closely to what he has to say.
WU: We have never produced a black cake before, have we?
UNIDENTIFIED MALE: No.
WU: I like to hear the message direct from the front line. Particularly things which relate to our core business, such as product development, concept development. I think these things are very important that I get involved in. That I give the right direction.
UNIDENTIFIED MALE: Being in charge is a tremendous responsibility. He has to have the confidence and the bravado to know that he's right.
WU: This one, the sesame flavor is not as rich as it could be. I think this is an acquired taste, of knowing what would sell, and what people like.
UNIDENTIFIED MALE: Since taking the helm, Michael has helped breathe new life into Maxim's Group. He has introduced new concepts and brands, which have attracted a younger crowd.
WU: Very good.
UNIDENTIFIED MALE: By doing so he has challenged himself and those around him.
WU: I'm excited to try this, because I think this will-done right- could be our next signature product.
UNIDENTIFIED MALE: As the chief executive it is also his prerogative to give it a name.
WU: Based on the name of the chocolate, Verona (ph) Chocolate Cake.
UNIDENTIFIED MALE: But the chief executive should not be a dictator. He needs to know when to include his staff. So, he's letting them decide, whether the cake should be made with Swiss or French chocolate.
WU: I'm going to do blind testing, to our staff at first, particularly office staff. And see what they think about it. And that is a very subjective comment. And I want to hear those comments. It is good. It's not good. And once I get that feedback, if everyone thinks it is good, which normally is the case. Then I think it is time to roll out.
UNIDENTIFIED MALE: Whether it is an expansion into China, or a new cake, Michael Wu knows what he wants.
WU: This one is very good. It has a good green tea flavor.
UNIDENTIFIED MALE: We're going to line up here, going this way. If you have a card, you have a turkey. All right?
UNIDENTIFIED MALE: The American holiday of Thanksgiving is just around the corner. And on Manhattan's Upper East Side, Richard Braddock is engaged in charitable giving.
UNIDENTIFIED MALE: This is Rick Braddock. He is the CEO of FreshDirect.
RICHARD BRADDOCK, CEO, FRESH DIRECT: You know the only thing wrong with you is you are a Yankee fan.
UNIDENTIFIED MALE: His company, FreshDirect, is today giving away 100 Thanksgiving turkeys to those less fortunate.
BRADDOCK: We are actually going to donate, I think, about 1,000 turkeys over the course of the Thanksgiving holiday.
(APPLAUSE)
UNIDENTIFIED FEMALE: All right.
BRADDOCK: OK?
UNIDENTIFIED MALE: Richard has put in place an ambitious charitable program. For every Thanksgiving order of $300 or more, the company donates two turkeys to charity. That is 1,000 turkeys in all.
As the chief executive Richard knows the importance of charitable giving both within the community and within the business.
BRADDOCK: Well, there are a lot of outreach things in this job, whether you are giving food to a mayor in a city you are going into, or giving a donation to the needy like this, which are part and parcel of why it is a fun place for me to work.
They are all the same size.
UNIDENTIFIED MALE: FreshDirect is a growing company. And Richard wants to show that the company is socially responsible. This has been his choice.
BRADDOCK: They're heavy, they're heavy.
Oh, here comes that Yankee fan.
UNIDENTIFIED MALE: OK.
BRADDOCK: Here you are. Help her with that one, to get it on her-
UNIDENTIFIED MALE: Thank you very much.
UNIDENTIFIED MALE: So who is waiting? Come on up.
BRADDOCK: You are a good looking guy.
UNIDENTIFIED MALE: Thank you.
UNIDENTIFIED MALE: Happy Thanksgiving, you're welcome.
UNIDENTIFIED MALE: For FreshDirect it is welcome marketing. For Richard, it is time in the public eye, a part of the job he greatly enjoys.
UNIDENTIFIED MALE: Thank you very much.
BRADDOCK: Thank you.
We're doing more of it as we grow, because we are obviously more engaged and involved and more capable of doing this as an affordable and positive thing we can do.
(END VIDEOTAPE)
FOSTER: And you can keep up with the series, that brilliant series, "The Boss", over 2011, lots to look forward to on that series.
Now, if your Christmas vacation is coming to an end and you are heading back to work, next week, you are not alone. Jobless claim numbers in the U.S. have turned up a welcome surprise, it seems. We go live on Wall Street in just a moment for the insight on that.
(COMMERCIAL BREAK)
FOSTER: Welcome back. I'm Max Foster. QUEST MEANS BUSINESS continues in just a moment, but first a check on the headlines this hour.
(NEWSBREAK)
FOSTER: We head now to Wall Street where the market is still struggling to pick up any real momentum. Alison Kosik is standing by that New York Stock Exchange.
You manage to get there, at least, Alison. What's going on?
ALISON KOSIK, CNN FINANCIAL CORRESPONDENT: Well, we are in the second to the last day-the last trading day of 2010, Max, and the market is not moving in the direction we'd like. Actually, it is really not moving at all. You know, a lot of traders and investors, they have already closed their books on 2010 or they're just taking the week off, which is why we've been seeing such razor thin volume.
But, you know, overall, it's really been a fantastic year. All three of the major averages are looking at gains of 11 to 17 percent. And today we finally have some substantial economic data to read over.
We found out that job claims fell by 34,000 last week, to 388,000. We've been seeing a continued improvement in the job market. And 400,000 really was a key level for claims to fall below. You know, we -- we've been waiting to see this for two years. But, of course, you know, economists would like to see these claims numbers drop even more.
We also got a report on pending home sales. We found out that they rose 3.5 percent in November. That's far better than what everybody had expected, though it's still lagging from where the figure was a year ago -- Max.
FOSTER: The few people who are there, what's the expectation for next year -- Alison?
KOSIK: You know, I'll tell you what, on the floor here at the New York Stock Exchange, I could say there's definitely some cautious optimism. In fact, one of the traders I talk to regularly down here says, you know, hopes are high for an economic turnaround, after we've been getting some data that show things that are moving that way.
For one, the average work week for U.S. employees has been on the rise. And this is important, Max, since companies had been cutting back dramatically on workers' hours during the recession. So having them work more suggests that sustained job growth could be on the horizon.
Also, corporate spending is on the rise. Lots of companies are investing more in equipment and other supplies.
Also, we've had a really nice surge in stock prices over the last year -- an increase of U.S. dollars in circulation. It's a very good sign that we're on the rebound, as well.
Of course, you know, it's going to take a while for a lot of Americans to really feel the recovery because it's going to be extremely slow. But, you know, there do seem to be greener pastures ahead -- Max.
FOSTER: OK, good stuff.
Thank you very much and Happy New Year to you.
Thank you so much, Alison, for that.
And now from predicting what may come to pass in 2011 to assessing the year that's just ending. 2010 saw billions of dollars spent to jump start a U.S. economy in crisis, whilst U.S. unemployment stayed above 9 percent.
As CNN's Christine Romans shows us, it's been the year of epic change.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Stimulus, jobs, health care reform and soul searching -- the year started trying to find the root of the economic crisis and assess some real blame when no one, apparently, wants to take any. Even the maestro, only under pressure, looking back.
ALAN GREENSPAN, FORMER CHAIRMAN OF FEDERAL RESERVE: I was wrong 30 percent of the time and there were an awful lot of mistakes in 21 years.
ROMANS: The golden boys at Goldman Sachs defending their role in the crisis, even as the government was suing them.
LLOYD BLANKFEIN, GOLDMAN SACHS, CEO: I think we, in our behavior, got caught up in and participated, and therefore, contributed to elements of froth in the market.
ROMANS: In an epic effort to stimulate an ailing economy, never had more money been spent in so little time.
And don't forget BP -- an environmental and public relations disaster.
TONY HAYWARD, FORMER CEO, BP: We're sorry for the massive disruption it's caused to their lives. And, you know, we're -- there's no one who wants this thing over more than I do. You know, I want my life back.
ROMANS: He wanted it to be over. She wanted the change she was promised.
VELMA HART, CONCERNED CITIZEN: I'm exhausted of defending you, defending your administration, defending the mantel of change that I voted for and deeply disappointed with where we are right now.
ROMANS: Change did come for her and many others -- in the form of unemployment, an emergency condition that turned chronic in 2010. So far, 19 months -- that's how long unemployment has been above 9 percent.
All of this against a backdrop of monumental reform -- credit card reform, banking reform, student loan reform and health care -- an epic legislation that fueled a new political force.
In a year in which everything seemed to change, one thing didn't -- your income taxes -- Bush era tax cuts extended for all.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Jobs must be our number one focus in 2010.
ROMANS: More than a million jobs were created this year, but ask anyone, even the president, and it wasn't enough.
(END VIDEOTAPE)
FOSTER: Well, here in New York, traders are about ready to close their books for the year. It was a largely negative session, actually, today. The DAX and the CAC Courant both lost more than 1 percent. The FTSE was off by almost .5 of 1 percent. Obviously thin trading here, as well.
All this week, we've been checking up on how the major markets did this year. So let's take a look at the European picture.
And it's been a very strong year for the Xetra DAX. It's up a shade over 15 percent for 2010. Remember, Germany is running that trade surplus right now and car makers BMW and Volkswagen have had good years. They're both up more than 85 percent for the year. So those investors are happy.
Here in London, the FTSE has also gained more than 10 percent. In fact, only one share in the FTSE 100 lost more than 8 percent in value this year and that was BP. No prizes for guessing why they had a bad year, but not that bad considering.
Across the English Channel, it wasn't an impressive year, really, for the CAC 40, but not that bad, either. Financial stocks have been dragging and the Paris index down more than 2 percent in 2010.
Earlier, I asked Todd Benjamin what he made of the trading year just gone.
(BEGIN VIDEOTAPE)
TODD BENJAMIN: I think the markets have been a pleasant surprise for a lot of people. Obviously, there are people out there who thought it would be a good year for the markets, with all the fiscal stimulus from governments.
But I think given the Eurozone crisis that we had, beginning with Greece and then just sort of stretching on, I think the result is quite a - - quite a good result, especially if you look in places like Germany or here in the U.K.
FOSTER: It sounds as though we've made a lot of fuss about nothing, when we've been talking about the euro crisis all year and the markets are up quite significantly.
BENJAMIN: Well, it's true. But I still think the fuss has gone away. I think this is in the background. And, you know, right now, it's under control. You know, Greece had a bailout earlier in the year. Ireland, of course, had to go for funds. And, you know, I think the next in line will be Portugal. And then the big wild card is -- and the big worry is Spain, because it's a much larger economy. You know, if that cracks open, then I think people will start to get very worried again.
FOSTER: And the key question for the markets, I guess, is has that been factored in, because if it happens, people will be wondering what impact that will have on the market.
BENJAMIN: No, I don't think it's been factored in at all. And that's why I think that it is something definitely to watch. Also, here in the U.K., I think even though the market had a very good year this year, you know, going...
FOSTER: The cuts are going to kick in.
BENJAMIN: The cuts are going to kick in. You have the VAT going to 20 percent. You know, so things are going to be a lot tighter. You know, lending remains tight in -- in a lot of places. So I think there are some challenges to overcome.
The good thing is the global economy. You know, it seems to be picking up. The Fed is keeping monetary policy very loose. I think that works in favor of the markets on the other side.
FOSTER: And can the -- the sort of booming German economy manage to outweigh the -- the weakening economies within the Eurozone, do you think?
BENJAMIN: Well, it has so far. And I think it can continue to. You know, confidence remains good there. And, also, with the global economy in relatively good shape, that bodes well for their exports.
FOSTER: And every economy in the world has to worry about what the U.S. is doing at any one time. It's not just what is going on within Europe, for example.
So what would you expect from the U.S. and what impact will that have on Europe?
BENJAMIN: Well, look, I think the general consensus is that the dollar will weaken further. And, of course, I think that's because the Fed will leave monetary policy loose. I think, also, because the deficit is still a huge issue. This really has to be tackled and I think the market is going to be watching this very carefully.
(END VIDEO TAPE)
FOSTER: Well, it could be a miserable start of the new year for thousands of people in Northern Ireland, meanwhile, as officials scramble over the ongoing inability to deliver water. Businesses wonder how they're going to cope, too.
(COMMERCIAL BREAK)
FOSTER: Where's the water?
That's the heady question for thousands of Northern Ireland residents and they're asking it to their government. It held an emergency meeting over the region's water crisis. Some 30,000 properties still have nothing coming out of their taps after frozen pipes burst during the recent thaw.
CNN's Carol Jordan says businesses that need to hear their tills ringing on New Year's Eve wonder how they're going to cope.
(BEGIN VIDEOTAPE)
CAROL JORDAN, CNN PRODUCER (voice-over): This has become a familiar scene in many towns in Northern Ireland this week -- cues of people lining up at temporary water pumps so they can collect a container of water for the everyday basic tasks of washing, cooking and drinking.
There have been water distribution problems in the region for over a week now, after cold weather caused pipes to burst resulting in over 40,000 properties left without water.
Today, more than 30,000 properties are still without running water. Hospitals are also affected. Northern Ireland Water, the organization responsible for ensuring the water supply, has been criticized for not being able to handle the crisis effectively.
UNIDENTIFIED MALE: Of course, I take responsibility. Of course I take responsibility, because my prime concern at the minute is to get through the situation and get the results. That's what I'm focusing on.
JORDAN: Families and businesses alike are making do, though millions of dollars are expected to be lost.
Adrian Marley (ph) runs the Patrice Restaurant in Banbridge, County Down. This week should be on of his busiest of the year, but no water means no business.
ADRIAN MARLEY: Our water went off on Christmas Day and we're out of water now for almost a week. And the implications are we've -- this is the busiest time of the year, between Christmas and new year, for shoppers. And we've had to close our doors. So we've had no trailers at all this week.
JORDAN: Warnings have now been issued that some customers may be without running water for days yet to come -- signaling a bleak start to 2011 in Northern Ireland and an even more miserable beginning for local businesses.
Carol Jordan, CNN, London.
(END VIDEO TAPE)
FOSTER: Well, earlier this week, Carol had been traveling in Southern Ireland.
When she got back to London I asked her about that region's extreme weather. They're suffering both in the north and in the south, it seems.
(BEGIN VIDEOTAPE)
JORDAN: Well, essentially, it's the same weather system in both Northern and Southern Ireland. I spent Christmas in Southern Ireland. It was very, very cold when I got off the plane. And, of course, we were in danger of the pipes freezing in my parents house, which is out in the country. My dad, actually, he installed a heater up in the attic. He lined the pipes outside and he...
FOSTER: Because you've had this problem before?
JORDAN: Last year they had over a week without water. So they were just, you know, obviously very aware of the fact that they had many visitors coming from Christmas and didn't want, you know, the water to run dry when people needed to shower and use the toilet, cook. It's not until you lose your water that you actually realize just how much you use it and how badly it's needed.
And particularly because they're out in the country, it's not so easy to just nip down to the shop and buy bottled water. So they, you know, instead of watching the Christmas movies, my dad was watching his thermostat, which he had connected to the heater, which he had placed in the attic and made sure that the temperature didn't go below freezing.
So that worked really well. But the next issue was -- and this happened, you know, right across the board, there was a sudden cold. So Saint -- Saint -- what we call Saint Stephen's Day, Boxing Day, on the 26th, the temperature, when we woke up that morning, was minus six degrees Celsius. The following day it was plus eight.
So as you can see, that's like a -- a difference of 14 degrees. And therefore, that -- that can cause pipes to burst.
When we went to Cork City to stay with my sister on Monday, the 27th, she had no water. And that was right in the city. And we were -- and it was really surprising. And we just had a bit of a nightmare getting through to emergency numbers. There were no temporary stations.
FOSTER: And your dad is a bit of a -- a master around the home. He must be, because wasn't it the only house in the area which actually kept the water running.
So what was going on around you?
JORDAN: It was. I mean really, people -- you know, people were just completely taken by surprise. Even when I got off the plane, I couldn't believe how cold it is. And I think, you know, they were just really learning from experience their pipes, as discovered last year, are quite close to the ground. So they were actually in more danger of freezing than other pipes around them. But, of course, because they took the extra precautions this year, they were fine.
But, you know, it's a question of infrastructure. And it's a question of learning. And they learned by experience, I guess.
FOSTER: But these things do happen.
Shouldn't the -- is there a sense that the water company should -- they can't keep the pipes in good order, have some sort of backup system and then have all those sort of tankers full of water just come out and rescue people, as it were?
JORDAN: Well, that -- you've just hit the nail on the head -- the water company. And the thing is, in Southern Ireland, I don't have one uniform water company. So it's a question of accountability and responsibility.
Each local authority or each county council, as we call them in Ireland, of which there are 26, is responsible for its own water allocation and distribution system, which means that things can be quite disjointed sometimes. It's not a particularly efficient system.
(END VIDEO TAPE)
FOSTER: Carol Jordan, who's considering having her Christmas in England next year.
Now, we all know what it's like to be on the receiving end of a traffic ticket. But spare a thought for the person who has to walk the walk of a traffic warden. Tonight, sticking to the rules and wearing your heart on your sleeve in our special series, World At Work.
(COMMERCIAL BREAK)
FOSTER: It's not personal -- those words from a London traffic warden, who's a true pavement artist when it comes to keeping drivers calm and the city's streets open for business.
We take a closer look in our special series, The World At Work.
(BEGIN VIDEOTAPE)
CHERELLE LANDER, CIVIL ENFORCEMENT OFFICER: Good afternoon, Whiskey 05786.
Can I have a radio check, please?
Over.
UNIDENTIFIED MALE: Hello. It sounds fine.
LANDER: Thank you.
My name is Cherelle Lander.
My title is a civil enforcement officer. And what I do is deal with contravention in the streets.
And I've been doing this job for over two-and-a-half years now. And I find it quite rewarding on one hand. And here, every day is different.
No, no, no, no, no. Put that back in there. If he takes it out, I'm going to have to issue him, I'm afraid.
Do you see the loading sign?
Now can you reverse -- if you just reverse. The curb marks specify that there are loading restrictions. If you stay here, I'll issue you, OK?
UNIDENTIFIED MALE: All right. Yes.
LANDER: Thank you.
Take care.
UNIDENTIFIED MALE: Thank you, too.
LANDER: Nobody likes to be charged unnecessarily, right, if they can try and get out of it. So it's really for you -- it's for you to be smart enough to be able to do the job and then make the person understand at the same time that how -- how I've done the job. It's only a job that I'm doing. It's not -- nothing personal.
When I come up the street and the cars that are parked in a single line, they haven't paid in the day but they're in -- they're inside the vehicle.
UNIDENTIFIED FEMALE: Yes.
LANDER: As soon as I get around the corner, the engine starts.
Hi, there. You are in a resident bay without a permit, sir.
UNIDENTIFIED MALE: Sorry, lovely.
LANDER: Yes, um-hmm.
Men do try to charm me so I don't write them a ticket. They call me baby, darling or comment -- oh, the color of your eyes. And I say if you want to leave, then you're quite welcome to. If not, I'm going to have to issue the ticket.
You do have to have a thick skin. You have to have patience. You have to have a good sense of humor and be able to relate to people.
And you're just on the phone and that's 60 pounds for that call.
UNIDENTIFIED FEMALE: Oh, but no, I'm not on the phone. I'm just -- I just -- no, I'm going.
LANDER: Bye.
I would say I like what I do. I wouldn't say I love what I did, because, oh, there is a sense -- a slight sense of guilt when you -- when you've actually enforced the law on someone.
Why I'm issuing the taxi is because the taxi license isn't valid until half past six this evening. I'm placing the (INAUDIBLE) on the vehicle.
People have to understand there's a person underneath the uniform. And it's actually the uniform that they can't stand, not the -- the person. It's my job and I know I'm supposed to do it. But, yes, I mean I have a got a heart. Yes.
(END VIDEO TAPE)
FOSTER: The positive face of being a traffic warden here in London.
Let's check out what the weather has in store in Europe. It's a -- it's a lot milder than it was last week -- Guillermo.
GUILLERMO ARDUINO, CNN METEOROLOGIST: Good to hear that. And, actually, we -- when we look at the maps and the trends, that's what we see in here. It is milder. The air is slipping in and it's much warmer than what we see on the other side here, where it's much colder, especially to the north.
The locations that are reporting snow right now are some in Germany, not many; but on the weekend, on Saturday, we will get colder air invading into Germany. Ramstein is reporting that; also, Helsinki in Finland is reporting the -- the snow showers.
The jet stream is still obsessed with the east, where we have the -- the colder conditions and along with that low pressure center, especially in Russia, is where we see most of the snow. Even, I was checking out, Gatiantepanaka (ph) in Turkey are reporting snow.
Madrid reporting rain. And I don't find anybody on the west, where we have some snow to report on. It's basically Central Germany eastward and especially as we move into the Baltics, Belarus and Ukraine. Of course, here in the Carpathian Mountains, you're going to see some more.
Bucharest is reporting snow showers as we speak, as well.
But compared to what we saw last week, look, nothing -- rain in Scotland a little bit. In France, we see rain here off the coast. That's about it.
The Low Countries not reporting very rainy conditions.
And then we see temperatures cold, of course, in the east. But Berlin getting a little bit of a break. The high of 1 degree.
The problems in the States persist, especially on the West, where we have the cold air in place and the snow. Ski operators and skiers are happy. We are seeing rain developing in the south. Snow, especially in the Cascades, in the Rockies and in the Sierras. The significant precipitation is going to be recorded, especially in the Northern Plains.
Delays, as we speak, in Chicago, O'Hare one hour and 30 minutes, ground delay program, which means that they are stopped. Those planes are stopped at the point of origin and they are not allowed to take off until they are cleared to land at their destination and 45 minutes in New York.
Well, the situation in the States is much better weather-wise. We see that. We're getting now rain, especially in the south. That system is advancing and you see behind the system the temperatures continue to be very cold.
So if you are coming to the States in the next days, especially this area, it's where you will go -- you are going to see the snow and the cold conditions, much milder on the other side.
The high for Friday in New York is 2 degrees.
We're also covering the situation in Australia. The rain is coming to an end in general. Nothing compared to what we saw in Queensland. But those rivers are going to be overloaded with water at least for a week -- back to you, Max.
FOSTER: OK, thanks very much -- much for that, Guillermo.
ARDUINO: Thank you.
FOSTER: Now, when you hear the word sustainable, you might think of green energy, green jobs.
But what about green cows?
Well, a U.S. producer of organic yogurt, along with dairy farmers in Vermont, are trying to make their cows green -- really.
Photojournalist Bob Crowley visited one of the farms to see how they're doing it.
(BEGIN VIDEOTAPE)
NANCY HIRSHBERG, V.P. NATURAL RESOURCES FOR STONYFIELD FARM: Vermont has a long history of being a huge milk state.
My name is Nancy Hirshberg.
I am the vice president of Natural Resources for Stonyfield Farm.
We make organic yogurt and dairy products.
UNIDENTIFIED MALE: Go on, girl.
HIRSHBERG: The Fortiers are of about 180 organic dairy farms in the state of Vermont.
UNIDENTIFIED MALE: We can milk up to eight at a time.
HIRSHBERG: He is one of the 1,400 dairy members of Organic Valley Crop Cooperative. The Stonyfield Farm Greener Cow project was an effort on our behalf to find a way to reduce the greenhouse gas emissions from milk production.
UNIDENTIFIED MALE: Come on, girl.
Let's go.
Come on.
HIRSHBERG: We thought our factory was going to be the biggest part of our contribution to climate change. And lo and behold, it was actually the milk production, the cows themselves and their burps. Cows release methane, which is a very potent greenhouse gas. A lot of people think when they hear about gas from cows that it's coming from the rear end. But it's actually coming from the mouth in silent burps.
This is a cooked flax. We're adding just a few pounds a day to their diet. And what it does, is it rebalances their stomach so they actually produce less methane.
UNIDENTIFIED MALE: The numbers that we've got so far on this farm are somewhere in the range of 12 to 15 percent improvement reducing methane emissions from the cows.
There's been a huge health benefit, as well. We were able to increase the omega three in the milk by almost a third.
UNIDENTIFIED MALE: I want to do my share. This is part of the reason why we farm in a sustainable manner. And this just makes it better.
HIRSHBERG: The benefits are not only for the greenhouse gas emissions but it is for the animal's health and for our human health, as well, as well as the planet.
(END VIDEO TAPE)
FOSTER: There you are.
Now, you're watching QUEST MEANS BUSINESS.
Just ahead, we'll check the global markets for 2010.
(COMMERCIAL BREAK)
FOSTER: 2010 is almost over, would you believe?
So let's have a look at some of the final tallies for the year.
As we were telling you earlier in the show there, the London FTSE and the Xetra DAX made decent gains over the year despite some predictions. And the FTSE is going to finish 2010 more than 10 percent higher. The DAX has done even better. It's looking at a 15 percent gain on the year.
But in Paris, the CAC 40 has lost around 2 percent.
Into Asia and it's another mixed picture. In Hong Kong, the Hang Seng gained more than 5 percent this year. Japan had a rocky economic year, particularly when it comes to the strength of the yen. As a result, the Nikkei -- the Nikkei finished the year down around 3 percent.
Meanwhile, in Australia, the ASX 200 will finish the year off by around 1.5 percent.
Now, more lights than heat -- the Times Square New Year's Eve ball is set to usher in 2011 with brighter bulbs and virtually no addition to global warming. The New York icon had its dress rehearsal earlier today, showing off more than 32,000 LEDs. And they're thrifty, as well as glam. They use around the same amount of energy as two household stoves. Unbelievable.
That is QUEST MEANS BUSINESS for the year.
I'm Max Foster in London.
Thanks for watching.
"WORLD ONE" starts right now.
END
