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Quest Means Business
Fitch Downgrades Italy, Spain; Interview the Jim O'Neill, "Occupy" Protests Spread; Alabama's New Immigration Law; Africa 2.0
Aired October 07, 2011 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, HOST: A double downgrade spells double trouble. Italy and Spain have their ratings cut.
There is growth in the U.S. jobs, but not much.
And turning long-haul into short-haul. We meet the man who aims to make the London to Sydney route less than a two hour flight.
I'm Max Foster in for Richard Quest. This is QUEST MEANS BUSINESS.
Good evening.
Well, it is the sour cherry topping off a rocky week. A double downgrade from Fitch cutting both Spain and Italy's credit ratings. It is a one-two punch that shows just how fast Europe's debt crisis is intensifying. Now the bad news started just after Europe's markets close to the week and Italy's long-term credit rating cut one notch to A-plus. It's short-term rating was cut, too. In Fitch's own words that reflects an intensification of the Eurozone crisis. It also said the Italian government's slow response to the crisis has eroded markets' confidence.
Just a few minutes later Spain was downgraded, this time by two notches, to AA-minus. Fitch says Spain's escape route is politically and technically complex at a time when its growth prospects are falling. Wasn't done there either. Fitch then moved onto Portugal, that dodged a bullet though, and didn't get downgraded. But Fitch is keeping it on a negative rating watch.
Now Jim O'Neill says Europe needs to ring fence Italy and Spain right now. The chairman of Goldman Sachs Asset Management said Europe's leaders have been dithering in recent months and now need to take serious action to put things right. Before news of these downgrades emerged I asked him what exactly the needed to do.
(BEGIN VIDEO CLIP)
JIM O'NEILL, CHAIRMAN, GOLDMAN SACHS ASSET MANAGEMENT: Well, I think the state that we've now got to in the whole game requires three things. Partly because of what you ask.
Greece needs to default, restructure, call it whatever you want. The banks need to have more capital, not least to be able to withstand that. And thirdly, we need to ring fence, certainly Italy and maybe Spain. And they have to do all three things now. Six months ago just doing (UNINTELLIGIBLE) would have been fine, but the markets are very worried about the amount of capital facing all of the European banks. Each week it creeps on the more it becomes a bigger problem.
FOSTER: So it will affect the banks, but we have just got to help deal with it? And the European Union needs to support it with liquidity?
O'NEILL: I think that is right.
FOSTER: When you talk about Italy and Spain, you are talking about the exposure of the European banks of those two countries, suggesting potential for financial contagion could be large. Now they are frightening words from leading economists. What do you saying there?
O'NEILL: Well, Italy has debt to GDP of 120 percent, of its own GDP. It is the eighth largest economy in the world. Italy's debt is 25 percent of the Euro area's GDP. It is more than eight times more than Greece. And with all-one of the consequences of globalization is that everybody is interconnected. And there are lots of banks all over the world that have counter-party risks with European banks, whether it is directly with Italy or through the French banks, it (UNINTELLIGIBLE) of where we are. And so if Italy were to be in the state that Greece now is, it would have severe consequences everywhere.
FOSTER: Are we heading that way?
O'NEILL: Uh, we were heading that way, pretty violently, and in some ways leaks of some kind of possible big bank (ph) that emerged out of the IMF meeting in Washington, two weeks ago, appear to given us a bit of a respite. But I think we have a window to the November G20 meeting which is what, now four weeks off? If there is nothing by then we are in for a tough winter.
FOSTER: But do you think there is the political will, or sort of the organization in Europe, to b able to look at Italy and reassure the markets and people like you? Do you think it is there? Are you going to be reassured?
O'NEILL: I would like to think so. But there are further complications. The fact that Berlusconi is struggling to keep his coalition alive is an insignificant dilemma either. Because there are people inside of Italy that are quite happy with aspects of this crisis, so they hope that Berlusconi can be encouraged to go. So, in a strange way some of them probably don't want the crisis to disappear very quickly.
And then, of course, an even bigger issue is the whole framework of policy in Germany. What does Germany really want? It likes to claim it is European, but also obviously doesn't want to pay for the problems elsewhere. And Germany has got to figure out a stronger stance in all of this stuff.
FOSTER: If investors believe that a country faces potential solvency issues they will shun the country's debt and precipitate in an actual solvency crisis. When do we get to that point? Are we close to that point?
O'NEILL: We are pretty close. As I say, I think, the markets have had some relief in the past week. There has been various comments suggesting that policymakers are now more closely looking at injecting capital into banks. Barroso talked about a European-wide one; quite how you can do that quickly, I don't know. But Merkel made a very interesting comment on Thursday suggesting that she think the case is there to look at capital injections in Germany. These things have been taken quite well by the markets.
One of the problems, also often with European policymakers, they talk so often, is that we go through these periods of raised expectations, but they seemingly never have the ability to deliver beyond what is expected. So, we have a window here where I think the next few weeks, they've got to act.
FOSTER: So when we get to the G20 is there a particular statement that you need? Or a particular comment, or a movement of some sort? What are you looking for?
O'NEILL: I mean, I would be looking for three things. I would be looking for further evidence that this is now the whole world looking in together, so to speak, so we have got to-
FOSTER: So, you want Obama to be very clear?
O'NEILL: Obama, and the Chinese to be all collectively saying, we all need a shared solution to this problem, because we are in it together.
Secondly, with that, I think, some monetary policy efforts by the Chinese, and maybe the other BRIC countries, to lower interest rates would be rather helpful. And but at the core of it, we need the Europeans to say, here is the solution.
(END VIDEOTAPE)
FOSTER: We'll have more from Jim O'Neill later. And in a moment, the latest reading on the U.S. economy. America hiring and faster than expected. We'll explore why it is still not enough, though.
(COMMERCIAL BREAK)
FOSTER: Now tonight, the U.S. economic machine is moving up a gear, as hiring picks up speed. The U.S. economy added 103,000 in September. It is more than analysts polled by CNN were expecting. And last month we told you the August jobs number was zero. That has not been revised along with the July figure. All together the U.S. economy added another 99,000 jobs in those two summer months. Still not enough to keep pace with population growth, though. The rate of unemployment remains unchanged at 9.1 percent. And 14 million people are still out of work in the U.S.
U.S. senators are due to vote next week on President Obama's $447-billion jobs bill. On Thursday, before these latest numbers came out, Mr. Obama spoke out again for the measure, saying the U.S. is at a risk of another slowdown.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: People really need help, right now. Our economy really needs a jolt right now. This is not a game. This is not the time for the usual political gridlock. The problems Europe is having today could have a very real affect on our economy at a time when it is already fragile. But this jobs bill can help guard against another downturn, if the situation in Europe gets any worse.
(END VIDEO CLIP)
FOSTER: Phil Tyson is head of strategy at MF Global. I put it to him that U.S. payrolls were surprisingly good, actually.
(BEGIN VIDEO CLIP)
PHIL TYSON, HEAD OF STRATEGY, MF GLOBAL: It definitely came in stronger than anticipated. So that was a positive surprise for the markets, if you like. But having said that it was stronger, but it was still fairly consistent with reasonably weak U.S. growth. You have to remember as well that today's data are factored in the return to work about 45,000 telecommunications workers who had been on strike in August and weren't included in August data.
So if you strip that effect out, the underlying growth was fairly fragile and consistent with fairly modest economic growth going forward. But at least it shows that the U.S. economy isn't falling off a cliff. And it should help to ease fears that a recession is just about to begin.
FOSTER: And interesting to note a pickup in temporary employment. Because that can lead to full time jobs, right?
TYSON: Yes, exactly. I mean that was another encouraging aspect of the report, because temporary employment tends to lead to permanent employment. And it tends to be a sort forward looking indicator. So you did see a pick up, as you say in temporary employment this month. In fact, you know, we are used to an upward revision to temporary employment in the last couple of months. So that does suggest that firms are maybe becoming slightly more confident about the future, and they are maybe testing the water by taking on some temporary employees before they maybe move to hiring more permanent employees.
FOSTER: And your predictions then, going from here, I presume the Eurozone is the big crisis point, the big risk. But what are you predictions going ahead in terms of the fragility of the U.S. economy?
Well, I mean, I think it is going to remain fairly weak. As I say, I don't think we are going to go into recession. I think growth could pick up into the next quarter. You are seeing some indications that may be sort of consumption has picked up a bit. And the trade deficit has been a narrower. I think some of the previous factors which have been holding the economy back and beginning to unwind like the higher energy prices we saw earlier this year. The unwinding of the impact of the disaster in Japan, and all of the sort of infighting over the debt limit. That is definitely helping.
So we could see some modest pickup in growth in the next quarter. But beyond that, you know, the economy is still struggling to create jobs, ultimately. I mean, the unemployment rate is still pretty high. It is at over 9 percent. And the global demand outlook is still pretty fragile. So that doesn't bode particularly well going forward.
And also the big unknown, as you were saying is the Eurozone debt crisis. That is still far from resolved.
(END VIDEOTAPE)
FOSTER: Well, those numbers initially gave investors in New York something to cheer about. Alison Kosik joins me now from the NYSE.
Did it reflect in share prices, Alison?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It did at the beginning of the session today, at the opening bell, but since then it has been a bit a bumpy session, Max. You know, before the opening bell stock futures were down. That jobs report brought things right back into positive territory. The Dow has gained triple digits in each of the past three sessions. We saw the blue chips get close to that in early trading, but right now we are seeing that rally has fizzled out. The Dow is down 37. The Nasdaq is off more than 1 percent and the S&P 500 is down about 1 percent.
You know, Wall Street had pretty low expectations for this employment report. They were expecting somewhere between 50,000 and 65,000 jobs added. So the reading came as a nice surprise. But the traders I've talked with say they have a long way to go. That the U.S. has a long way to go before the economy can really see a change in the unemployment rate for the better, Max.
FOSTER: And whatever we make of the jobs numbers, the unemployment rate is actually staying the same, isn't it? So is that what people, investors, are focusing on?
KOSIK: They are. They are focusing on the bigger picture here. The fact that, you know, 14 million Americans still remain out of work. The under employed number, that includes people who are discouraged workers. People who are working part time who want to work full time and those who are simply unemployed, that number is at 16.5 percent. Some say that is the real unemployment number. And then you talk about the unemployment number that we all see every day on the headlines. That has been assessed at 9 percent or higher, for the past six months. And it is really been stuck I that range for much longer than that.
So, when you see what happens with the market today, how it jumped at the open and now we are seeing it fizzle out. It is because you are seeing investors really look at the big picture. The jobs picture which still remains pretty grim, Max.
FOSTER: OK, Alison, thank you very much, indeed for that.
Now, next, travel's final frontier. We'll look at how a space start up SXC, is hoping to give you long-haul trips in short-haul time, with a view that is out of this world.
(COMMERCIAL BREAK)
FOSTER: Now he is already a Formula One tycoon, now Michiel Mol is venturing into tourism's final frontier, and that is space travel. Along with Dutch Airline KLM, he has founded a space expedition company called SXC. Initial flights are set for 2014, taking off from a Caribbean island, and taking passengers into a sub-gravity sub-orbit.
Now the next step is even more ambitious. Right now a typical flight from London to Sydney will take more than 20 hours. With orbital passenger flights, SXC hopes, eventually to cut that to just one hour and 45 minutes. And link any two cities, anywhere in the world in less than two hours. Initially, a craft called Lynx made by XCORE Aerospace in California, is to take passengers up. SXC co-founder, Michiel Mol, told me how the reusable craft is shaking up the space industry.
(BEGIN VIDEOTAPE)
MICHIEL MOL, CO-FOUNDER, SXC: It is a revolutionary new spaceship, which fits just a pilot and a co-pilot. So there is one passenger, so to say.
FOSTER: So there is just two people on board.
MOL: Just the two of you, yeah. And it has four revolutionary new rocket engines, which makes it so special. It is a really small engine. In reality it is not more than this. And it is extremely powerful and efficient. So with those four small engines we can take it to an altitude of over 100 kilometers.
FOSTER: Which makes you and astronaut.
MOL: Exactly.
FOSTER: Officially.
MOL: Officially, you get your astronaut wings, and the official title you can use. And it accelerates from the runway like a normal plane, but then more like and F-16 with the after-burner speed. And that means you go straight up into the air. And within a minute you break the sound barrier. And in three minutes you are going Mach 3, so close to 4,000 kilometers an hour and you are actually in space already.
In four minutes the engine stops. You are weightless. You float to an altitude of over 100 kilometers. The ship turns upside down, and on the whole top is a glass canopy. So, you have this beautiful view of the earth. The sky is black, of course, you are really in space. You see this earth with this thin layer of atmosphere. I have not been there yet, but I've talked to a number of astronauts who have been there. And they all claim that it is really-
FOSTER: Quite magical.
MOL: A life-changing experience. The two of you up there.
FOSTER: Yeah?
MOL: 7 billion people down there. It makes you an ambassador for Mother Earth itself immediately.
FOSTER: And then you come back down, so how long would it take you to go on a trip around the world then, on the other side of the world?
MOL: Yes, this first version takes you down to the same place you started. And the total flight takes about an hour. But the next version of this ship will be able to take you orbital, to what we call sub-orbital.
FOSTER: Yes.
MOL: When it takes you orbital you can be anywhere in the world within two hours. So, let's say the London/Sydney, one hour and 45.
FOSTER: Unbelievable isn't it? And this is going to happen? You've got backing from KLM.
MOL: Yes, KLM is one of our partners.
FOSTER: And you've already sold some tickets.
MOL: Yeah, we started ticket sales April 12, which was exactly 50 years after Yuri Gagarin, was the first man in space. And about-
FOSTER: And about $100,000, right?
MOL: Yes, $950,000 U.S., and we have sold close to 40 in the past few months.
FOSTER: And when is the first flight going to be then?
MOL: The spaceship, itself, will be start-it will start its test program next year. And we think that early 2014 we will be able to start to fly commercial.
FOSTER: So now we have an industry, don't we?
MOL: Yes.
FOSTER: Because you have Richard Branson out there doing the same thing. There are two of you.
MOL: Yes, I think that is-
FOSTER: And at half the price, you are.
MOL: Yes, and the-
FOSTER: Undercutting him?
MOL: No, I think the experience is a bit different. He has a bigger ship with six people on the deck. And we have just one person in front. So, I think they're version is like a small business jet. And we are like an F- 16 going to space. We are going the same altitudes and we both land as a glider plane. So there are a lot of similarities, but I without Richard Branson, nobody would have believed me doing this.
(LAUGHTER)
FOSTER: But how long until there are going to be flights? This is obviously an experience at the moment.
MOL: Yes.
FOSTER: But when does it become a functional service, as in I've got a meeting in Sydney and I need to be there in two hour's time.
MOL: Yes, I think it will take at least another 10 or 15 years before first test flights, but that version will take less. And then probably at least another 10 years, but I'm starting to guess, now.
FOSTER: Not that far away?
MOL: Now, we will experience this in our lives.
(END VIDEOTAPE)
FOSTER: Not long now. Now back here on earth airlines say they will continue to fight a new European carbon tax on flights to and from the European Union. China says a tax, due to be introduced in January, will cost its aviation industry $125 million every year. As Andrew Stephens now reports, the European policy is proving to be a problem for businesses that operate on a global level.
(BEGIN VIDEOTAPE)
ANDREW STEPHENS, CNN INTERNATIONAL CORRESPONDENT (voice over): Aviation is one of the most competitive industries in business. But in Hong Kong a show of solidarity against a common enemy; a new European law that comes into force next year.
UNIDENTIFIED FEMALE: I think the global airline industry is united against the EU tax (ph). It is the wrong approach.
STEPHENS: From the beginning of next year, under Europe's new emissions trading scheme, or ETS, any airline that lands or takes off in Europe will be charged for its carbon emissions. Those emissions will be calculated not just over European airspace, but from wherever the plane starts or ends its journey.
(On camera): So, for example, if you are flying from say, Hong Kong, to London. You are going to be paying for your emissions all the way. Not just in European air space. And it will be exactly the same for the return flight. And that, the airlines say, is unlawful. They say the EU is intruding on other countries' sovereignty.
(Voice over): It is not the cost, which will add only around $20 to the price of a return ticket, between Europe and the U.S. It is not even the scheme itself. The problem, says IATA, the aviation group that represents more than 90 percent of the world's airlines, is that it is not a global solution.
TONY TYLER, INT'L. AIR TRANSPORT ASSOCIATION: We don't have a problem with emission trading schemes. But by doing it this way, as a regional thing, which has actually territorial application, the Europeans are actually driving a wedge between countries, who should be working together to put a global scheme in place. And that is what we are advocating.
STEPHENS: But Europe has, apparently, little appetite for change.
MARY VERONICA, TOVSAK PLETERSKI, EUROPEAN COMMISSION: I think that there are lots of misunderstandings out there, how the EU functions. Probably also, because this is a new thing, to many of the airline operators, and we are ready to explain and clarify this misunderstanding.
STEPHENS: But this dispute looks anything but a simple misunderstanding. One of the persistent phrases, at the Green Skies, gathering in Hong Kong recently, was "trade wars".
UNIDENTIFIED FEMALE: If the EU persists, and going forward with the trading obligation, that begins on 1 January, other countries will retaliate. It is just a matter of time.
STEPHENS: The U.S. Congress is now considering a bill that would ban U.S. carriers from complying with the EU legislation. And China says it will take action against Europe, although it is not clear yet, what form that will take. But any sort of new trade dispute can only damage the airline industry. And only be another headwind for a global economy already struggling to find common ground, on how to kick start growth. Andrew Stephens, CNN, Hong Kong.
(END VIDEOTAPE)
FOSTER: Now that Britain's banks face a downgrade, will the U.K. government really let its lenders fail? We'll hear more from Jim O'Neill at Goldman Sachs, in just a moment.
(COMMERCIAL BREAK)
(NEWSBREAK)
FOSTER: Today marks the 10th anniversary of the U.S.-led war in Afghanistan. It began with an air campaign and the goal of ousting the Taliban and dismantling the Al Qaeda terror network.
Britain's Stop the War Coalition says it is expecting a huge turnout tomorrow at a protest against the war here in London. And hundreds of revolutionary fighters in Libya are storming Sirte, the hometown of ousted Libyan leader, Moammar Gadhafi. Revolutionary field commanders say a number of fighters on both sides have been killed or wounded. The pro- Gadhafi forces control tall buildings in the city center and have been attacking from rooftops.
Spain and Italy have both been hit with a credit rating downgrade by Fitch. The ratings agency says the Eurozone's debt crisis has intensified and it has doubts that the countries will fix their huge deficits.
Right before those countries were hit by Fitch, it was British banks really feeling the wrath of the downgrade. And this time it was by -- by Moody's. It cut the ratings of no less than 12 financial firms in the U.K., saying the British government is now more likely to let some banks fail. Some of the country's biggest names were included. They included Lloyds and Santander. They were cut by one notch. And RBS, over here, was cut by two notches, along with the building society, Nationwide.
Moody's says some of the more important banks could still get help if they run into trouble. But the government's recent actions suggest they won't necessarily come running.
Now, Europe's main markets just kept their heads above water. The banking sector took a big hit around the region. Royal Bank of Scotland and Lloyds led those losses in London. Those searches were down more than 3 percent. And Commerce Bank and Deutsche Bank were also heavily down over in Frankfurt.
Now, Jim O'Neill says Europe's banking situation is looking like a so quickly to the credit crunch.
I asked him what would happen to the world's credit supply if the European countries got much deeper.
(BEGIN VIDEO TAPE)
JIM O'NEILL, CHAIRMAN, GOLDMAN SACHS ASSET MANAGEMENT: I think we -- we then would be looking at something unfortunate, which would be comparable to '08 in that the -- the credit available to ultimately consumers all over the world would be severely curtailed because banks would -- would really worry about each other's solvency.
FOSTER: In terms of the banks, are we right to continue focusing on the banks, because Moody's is downgrading these banks today, and that was a bit of a shock to the markets?
And it doesn't look as though they will be bailed out in the same way that they have in the past.
But they're looking vulnerable again, aren't they, right now?
O'NEILL: Well, it's a vicious cycle. We've got this difficult link between sovereign debt and the bank's holdings of that debt. And as the sovereign debt goes down in price, it makes the banks' capital situation worse...
FOSTER: Why should...
O'NEILL: -- which...
FOSTER: -- the world worry about that, it's just the same...
O'NEILL: Because, at the end of the day, the banks sit -- sit in the core of a -- of a basic function in life. Their job is to intermediate between savers and borrowers. And it's the same whether it's a company or -- or individuals. And if they need more capital and they face liquidity changes, the only way they can respond is by tightening their belts and not lending as much money.
FOSTER: This week we saw the Bank of England creating a whole load of fresh money.
At what point does that strategy actually run out and they have to start actually printing money, creating money and handing it over to the treasury?
O'NEILL: Well, this -- this is -- this is the step...
(CROSSTALK)
O'NEILL: -- this is a step closer.
FOSTER: Yes.
O'NEILL: You know, it -- I -- I think the banks' move is -- is understandable given everything that's been hinted at and leaked over the past few weeks. You know, the U.K. doesn't live in its own planet. It lives in the same planet as everybody else. And so unfortunately, there's not a lot the U.K. can do unless you sort out the European situation. These countries, even though we're not in E.U., are hugely important to Britain. And we have to hope that, from a British perspective, the European crisis clears itself up.
FOSTER: So it's all about the G-20 right now?
O'NEILL: I would say the G-20 meeting coming up is a big, big thing.
(END VIDEO TAPE)
FOSTER: And talking of bailouts, the movement against corporate greed is gaining momentum. Next, we'll look at why Occupy Wall Street isn't just Wall Street anymore.
(COMMERCIAL BREAK)
FOSTER: Now what started 21 days ago as Occupy Wall Street is now becoming occupy everywhere. You're looking at Occupy Philadelphia, a demonstration there today. Some of these protesters camped out outside city hall last night. The leaderless movement says it won't tolerate the greed and corruption of America's richest 1 percent.
The movement is spreading across the country. Protesters are also taking their message to the White House, demanding that the government represent the 99 percent, not the 1 percent, as Andrew Spencer reports, the movement's message is getting louder.
(BEGIN VIDEO TAPE)
(VIDEO CLIP)
ANDREW SPENCER, CNN CORRESPONDENT (voice-over): The protests that started on Wall Street are now flooding Main Street. New ones are popping up just about everywhere, including this one in Philadelphia.
UNIDENTIFIED FEMALE: We're here to say that we matter, we have a voice, we're not powerless.
SPENCER: Anywhere from a few dozen to hundreds of people are showing up in cities from coast to coast to protest a variety of issues, corporate greed among them.
ELEANOR WALKER, PROTESTER: It's time for the people to wake up and realize that we do have power.
UNIDENTIFIED FEMALE: That's right.
WALKER: We've got power.
UNIDENTIFIED FEMALE: Yes!
WALKER: And we can take back our power from these greedy politicians and these corporations.
SPENCER: There have been clashes between police and protesters in New York, along with arrests, but most of the rallies have been peaceful and protesters say they want the government to start looking out for the little guy.
UNIDENTIFIED MALE: I'm not expecting miracles but I'm expecting something.
SPENCER: Their message has even reached the White House.
JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: The core is the American people do not think the system is fair or on the level. That is the core of what you're seeing on Wall Street.
SPENCER: There has been a lot of anger, but no clear demand. Still, protesters say they want their voices heard and they have no plans of stopping their campaign any time soon.
I'm Andrew Spencer reporting.
(END VIDEO TAPE)
FOSTER: Now, as you've seen in our U.S. reporting, the protests are taking place near Wall Street in New York. But people around the world are picking up on the idea and want "Occupy" demonstrations to go global, actually, on October the 15th.
This Facebook page, Occupy London, is gaining followers pretty fast. And this page in Australia is also taking on the "Occupy" mantra, as you can see.
We've posted a story on our Facebook page, as well, looking at the places using social media to plan protests. And that's all at Facebook.com/cnnquest.
Right now, though, we're going to get the weather from Guillermo.
He's going to tell us what those demonstrations are sort of -- what are the conditions they're going to be in around the world as they -- they hit the streets.
GUILLERMO ARDUINO, ATS METEOROLOGIST: The demonstrators must be very happy in the States. The weather is gorgeous.
Now I wonder how you like the change. And this is a question that I'm putting to you, Max. how do you like the change in Europe?
What did you see?
FOSTER: Well, it's been very strange, hasn't it, because it's extremely hot and within a few days, it got into autumn and all the leaves were falling off.
ARDUINO: I think...
FOSTER: And that's the truth.
ARDUINO: -- I think...
FOSTER: I like it because it -- it's sunny but it's chilly.
ARDUINO: Well, I think it's getting that way and it's going to be quite dramatic. Perhaps this weekend we will see moderate conditions in England, in -- in Britain and Ireland.
But elsewhere, you see, especially Central and Eastern Europe is where we see the big change. So temps are dropping down. They're going down big time and quickly. We are talking about 15 degrees below what we saw before.
London, in the last 24 hours, didn't see any change, because a big change came before. But try to convince those in Poland, in the Czech Republic, in Hungary, in Austria, into the Balkan Peninsula, too, and Northern Italy of the change, because that's quite significant.
A 9 degree change in Munich, so -- for the worse, because it's cooling down. And along with that, we get the winds, and also, we get the rain and in some instances, some snow. So we are seeing a big change right now. And I have pinpointed a couple of places -- Wendelstein in Germany, 102 kilometers per hour. So the temperature feels totally different when we have that. And try to drive along a highway at 200 kilometers per hour with those winds.
Sisco in Corsica, 144, even worse. And 111 in Chasseral in Switzerland.
So we obviously see a difference compared to what we have seen lately in Europe that was fantastic, especially those tourists who are lucky enough to get a break and see different conditions from the norm.
And look at here, the comparison between Thursday and Friday. So Vienna, Munich, Prague and Zurich as an example. And you see that the change is quite dramatic. So the '20s are long gone.
Also, a big change coming into Turkey. We have seen and we still see nice conditions. The front is going to arrive there and it's going to bring some blustery conditions. And the change will come, also, with different temperatures. So it's a matter of time, two days or so, and we get -- we'll get to it.
And if you are planning to fly out or in on Saturday, pay attention to these airports. Nothing really significant, but you may have some issues because of the winds, especially, and also some rain showers, affecting even Spain, where we see a change in temperatures.
But I said that in the United States, things are much, much nicer. We have welcome rain in Texas after the fire situation that is really devastating. And we will see significant accumulations, especially in the north. If you're coming to Miami, you will see some rain, as well, Miami, all the way up into Daytona Beach, for example, even in South Carolina, you will see that.
But it's much more pleasant, Max, in the United States, where temperatures way above the 20s. Dallas at twee, Atlanta at 24. New York is very nice, at 18.
FOSTER: Enjoy, Guillermo.
ARDUINO: Thank you.
FOSTER: Twenty-four your -- thank you.
The U.S. Justice Department, meanwhile, wants a federal appeals court to block Alabama's tough new immigration law. Several civil rights groups are fighting the law, too. And as for the farmers affected by it, well, they say it puts their livelihoods on the line.
Here's Rafael Romo.
(BEGIN VIDEOTAPE)
RAFAEL ROMO, CNN SENIOR LATIN AMERICAN AFFAIRS EDITOR (voice-over): It was supposed to be an informational meeting, but the conversation quickly heated up.
UNIDENTIFIED MALE: What is your answer to our problem?
SCOTT BEASON (R), ALABAMA STATE SENATE: I don't think there is an answer for the short term.
UNIDENTIFIED MALE: Well, so, we go broke while...
BEASON: I said the (INAUDIBLE)...
UNIDENTIFIED MALE: -- you're sitting there.
ROMO: These farmers in Alabama say they're facing a crisis. Their fruits and vegetables are rotting in the fields because there aren't enough farm workers. They say that a law that cracks down on illegal immigration has scared away the Hispanic immigrants they once relied on.
FRANK MCGEE, ALEX CANTOS FRUIT COMPANY: After we did everything we could do to replace them, nobody -- nobody wants the jobs. That is a misconception.
LANA BOATWRIGHT, HUSBAND IS FOURTH GENERATION FARMER: Basically, this law is shutting us down. And that's the money that we live on.
ROMO: Listening to their concerns is Alabama state senator, Scott Beason, the Republican who wrote the immigration law.
BEASON: I don't think you can write it to say agriculture is exempted or anything like that. It either has to be you're going to decide what you're going to do with the illegal aliens that are in the state -- are you going to make it easy for them to stay here or not easy for them to stay here. And my position is to stay with the law that we have.
ROMO: Farmers in Georgia, where a similar immigration law was approved, reported they were 11,000 workers short over the summer. To bridge the gap, state officials had felony probationers work at the farms. But the 10 hour days in 90 degree heat drove most of them away.
In Alabama, farmers are making desperate efforts to replace the Hispanic migrant workers who left, including offering to increase pay. But they've had little success.
For decades, Giuseppe Peturis and his family have relied on migrant labor at their farm.
GIUSEPPE PETURIS, ALABAMA FARMER: The Americans are not going to get out in the heat and work. They're not going to bend their back all day long. And they're not going to work -- they're not as hard of workers as Hispanics.
(END VIDEOTAPE)
FOSTER: Well, there you are.
That is QUEST MEANS BUSINESS.
I'm Max Foster in London.
Thank you for watching.
Have a good weekend.
"MARKETPLACE AFRICA" is up for you next.
(COMMERCIAL BREAK)
ROBYN CURNOW, HOST: Hello, you're watching MARKETPLACE AFRICA.
I'm Robyn Curnow here in the hills of the Eastern Cape region of South Africa.
And in villages like this, women still carry firewood on their heads, collect water from the stream. Not much has changed. Opportunities are few.
Even though there is a large number of women in South Africa's parliament and a liberal constitution protecting them from abuse and violence.
Well, our guest on FaceTime this week is Wendy Luhabe. She calls herself a social entrepreneur and thought leader. She shares with me some of her more radical thoughts on women in the workplace.
(BEGIN VIDEOTAPE)
CURNOW: So what's a thought leader?
WENDY LUHABE, SOCIAL ENTREPRENEUR:
Someone who changes the rules of the game, who challenges the status quo. An example of that would be a wild thought that I've been entertaining for a while that mothers who choose to be at home should be paid a salary, 10 percent of their husband's earnings should be attributed or contributed toward the mothers.
CURNOW: A mommy salary?
LUHABE: A mommy salary as a way of giving value to the work of bringing up children, so that it's not a resentful choice that women have to make.
CURNOW: Particularly career women, who feel like...
LUHABE: Yes.
CURNOW: -- they have to make their choice...
LUHABE: Yes.
CURNOW: And a lot of women just don't have that choice?
LUHABE: Of course. Of course.
CURNOW: And we're talking here about...
LUHABE: That's right.
CURNOW: -- a specific type of woman who decides...
LUHABE: Exactly.
CURNOW: -- that they're going to stay at home?
LUHABE: Yes. It applies to those women.
CURNOW: Do you think the work of women at home is undervalued?
Obviously, that's the underlying thesis there.
LUHABE: Yes. That is the underlying principle, that it is undervalued. And because it's undervalued, it becomes, for some women, I think, a resentful choice. And so -- and money is -- is the currency that we use to define value of a contribution in the world.
So why shouldn't we do the same for the work of bringing up children, which I think is probably the most important contribution that the world should be valuing.
CURNOW: So, on the flip side, what's your assessment of the growing number of women, us included, who choose to work, as well as having kids?
Do you -- do you feel that women are stretching themselves too -- too thin, particularly working mothers?
LUHABE: I don't think they are. I just think that we need to create an environment that allows women to make the choices that they want to make. If women choose to have children, they must be able to have the support structure that they're required to do that joyfully so that we can bring up children who are healthy, because the opposite side of that is we have children who are growing up without parents.
CURNOW: Raised by nannies?
LUHABE: Who are raised by nannies. And that creates its own problems in society.
So if I had to choose, I would choose a society where women make the choice to be at home to bring up their children, because they know that...
CURNOW: As a career move?
LUHABE: -- that contribution will be valued. And, secondly, when they go back to work, they won't be penalized for having taken some time off to go and bring up children.
So it's really an idea that needs to be embraced by society, not so much for the benefit of women, but because we recognize that creating a society where children are properly brought up, preferably by their mothers, would create a -- a much healthier society, a more stable society.
CURNOW: A lot of people watching this will listen to you, sort of maybe agree with you, depending where they are and who they are. And a lot of people will just write off this idea as utterly absurd.
LUHABE: But the world was never changed by people who have normal ideas. The world is always changed by people who have absurd ideas.
CURNOW: You say you're a thought leader.
What, for you, is going to be the biggest -- the biggest issue you ponder about when you -- when you go to sleep?
LUHABE: When I'm pondering, I don't ponder about anything when I'm going to sleep. My mind is ---
(CROSSTALK)
LUHABE: -- empty...
CURNOW: -- think far too much. But where...
LUHABE: Those are the privileges of being self-employed, is you can manage your time and you can manage your thoughts.
I ponder about the growing unemployment in the world, not just in South Africa. And the assumption that we will resolve unemployment by expecting companies to create more jobs is completely unrealistic.
What we should be focusing on is -- is the world economy. One is to shift our education system to encourage more people to become entrepreneurs, because that would create a much greater contribution to society.
(END VIDEO TAPE)
CURNOW: Up next, how this small group of young entrepreneurs hopes to impact millions across the continent.
(COMMERCIAL BREAK)
CURNOW: With the green rolling hills and the beautiful beaches, this part of South Africa is called the Wild Coast. It's beautiful, but it's also one of the most poorest areas in the country. And it's problems around poverty that are the focus for advocacy group, Africa 2.0.
Here's Isha Sesay with a group of young entrepreneurs and what they want to do about some of Africa's most pressing problems.
(BEGIN VIDEOTAPE)
ISHA SESAY, CNN INTERNATIONAL CORRESPONDENT (voice-over): If there's any doubt that Africa is open for business, check out these figures. Last year, Africa's economy grew by nearly 5 percent. Six of the 10 fastest growing economies in the world are African. And now, some reports indicate Africa's growth will outpace China's in the next two decades.
UNIDENTIFIED MALE: This is where Africa is growing.
SESAY: Figures like these are what motivate the members of Africa 2.0, an advocacy group promoting a unified vision for the continent by 2020.
MAMADOU TOURE, FOUNDER, AFRICA 2.0: If you think about it, China has an agenda for Africa. India has an agenda for Africa. Europe and America have an agenda for Africa. It's about time, also, that we, as Africans, set an agenda for ourselves. And the idea was to involve the next generation and involve, also, senior leaders so that we have a dialogue and a strategy that is built by the combination of those two groups.
SESAY: The group recently met in Mombasa, Kenya, bringing together some 200 leaders and entrepreneurs to strategize ways to move the continent forward.
VERA SONGWE, ADVISER, THE WORLD BANK: Africa 2.0 is essentially, I think, an initiative of bringing together young Africans who are interested in seeing the country grow, who are interested in giving the country a different image and help present African leaders who are on the continent to make sure that, one, the message that Africa is changing, that Africa is a different place to do business.
UNIDENTIFIED MALE: And Africa 2.0 I cannot (INAUDIBLE).
SESAY: Entrepreneur Bright Simons knows all about the challenges and opportunities of doing business in Africa. He started mPedigree Network, an organization using mobile technology to fight counterfeit prescription drugs.
BRIGHT B. SIMONS, PRESIDENT MPEDIGREE NETWORK: To be effective and to be competitive globally, we have to use new models, models that they haven't had time to, you know, discuss about and to talk about and to think about in the West, are extremely relevant here, because the cond -- the initial conditions for every business venture is extremely different.
SESAY: Organizers insist the symposium was not just another initiative hung up on talk. They aim to get their ideas endorsed by government leaders and put plans in place to execute them.
UNIDENTIFIED MALE: We are, first of all, an advocacy group. As such, we are positioned as a think tank that mobilizes and implements. And we are actually driven.
Now, our key outcome, also, is to proper a Vision Africa 2.0 manifesto that will be released by the last quarter of this year. And that manifesto is actually the legacy of young emerging leaders, evolving senior leaders and proposing an agenda for Africa.
SESAY: That agenda includes pushing for the proposed Africa Free Trade Area, a bloc that would span 26 countries. It also includes a plan for better governance and stronger institutions. And while there's much that can be improved, some say change is on the way.
SONGWE: We've now just seen, recently, good elections in a couple of countries. We saw, in a couple of countries, also, that they've changed their regulations. Many more are doing better and in the Doing Business Index, which means that the institutions are strengthening.
SESAY: The deadline to fully implement their ideas is only eight years away. But with endorsements from Africa's younger generation, political leaders and economic institutions, the group is determined to take advantage of the opportunities presented by Africa's growth.
Isha Sesay, CNN, Atlanta.
(END VIDEO TAPE)
CURNOW: Thanks to Isha for that report.
Now, let's take a look at what's trending in African business news this week.
(BEGIN VIDEOTAPE)
CURNOW (voice-over): Diageo, the world's largest spirits group, is preparing to up its presence in East Africa's growing beer market. The London-based distiller has won a bid to buy Ethiopia's last remaining station brewery for $225 million. Diageo, which outbid Heineken and SAB Miller, says it will expand the East African brewery and introduce new products.
And Mozambique is turning to its vast reserves of coal to meet rising power demand. Mozambique is allowing India's Jindal Steel & Power to begin studies on building a $3 billion coal-fired power plant in Tete Province. The region is home to some of the world's largest untapped coal reserves. Officials say the plant will begin producing electricity for domestic and regional markets in 2015.
(END VIDEO TAPE)
CURNOW: A reminder, you can find us online at CNN.com/marketplaceafrica. You can find a link to my Twitter account, as well as all of our stories and interviews.
Well, that's it for me, Robyn Curnow, here in the Wild Coast.
Good-bye.
END
