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Quest Means Business
Leveson Inquiry Reveals Possible Impropriety Between British Business Minister and Murdochs in News Corp's Attempt to Buy Out BSkyB; Outgoing Dutch Prime Minister Tries to Avert Crisis; Greece's Shrinking Economy; Study Says American Millennials Worried About Economy
Aired April 24, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Ill-informed over illicit tactics. James Murdoch insists he was in the dark.
The Dow forgets Europe to focus on earnings, and tonight, we bring you the Q25.
And out of this world, or on another planet. I speak to a company that wants to mine asteroids.
I'm Richard Quest. I mean business.
Good evening. Tonight, questions of power and influence as the media empire of New International collides with the makers of UK laws. James Murdoch has revealed the British government was in close contact with News Corp during its failed bid for BSkyB.
Murdoch's evidence at the Leveson Inquiry into media ethics is piling pressure on lawmakers. The minister in charge of giving the bid the green light, or at least deciding what was going to happen, is fending off calls for his resignation. News Corp's founder Rupert Murdoch is due to take the stand tomorrow.
Straight into the days events, Dan Rivers is with me here, and Maggie Lake is in New York, and Maggie, you're outside News Corp headquarters there, we'll talk to you in just a moment on how this is shifting across the Atlantic.
First, though, Dan, what we heard at Leveson today was a bit of tittle-tattle, a bit of gossip, some odd e-mails. But the suggestion that all was not honest and fair in the BSkyB bid.
DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Exactly, and that's what's really damaging for the British government and for News Corp, as well. They were trying to buy back in June 2010 the remaining chunk of BSkyB that they didn't already own. They already had 39 percent of it, they wanted the whole lot.
That got referred first of all to Vince Cable, the business secretary, who got caught on camera saying he declared war on Murdoch. So, that was taken away from him. Jeremey Hunt took over.
Now, it's been revealed in all these e-mails that Jeremey Hunt had very close contact, according to his critics, passing information back to the Murdoch camp while he's supposed to be independently weighing up this decision.
Don't forget, as minister here, he had a semi-judicial role. So, he's like a judge trying to weight up the evidence of the case, whether it should go ahead, this merger, or not. And now, he's been caught passing information to one side.
QUEST: Had anything that Murdoch said today give us an insight into whether those allegations are founded? Or how did he perform today?
RIVERS: I think he did pretty well. In terms of phone-hacking, he was reiterating what he'd already said, which is basically, "I didn't know what was going on, I didn't read the e-mails, I wasn't there."
But in terms of the BSkyB merger, he was pretty robust. He was basically sort of saying, "Of course we were lobbying, of course we wanted it to go ahead," pretty open about his support of the conservative government.
QUEST: And he denies that there was anything improper between him and the culture secretary?
RIVERS: Well, he was trying to sort of to say that this was just a bit of fun and so on. But on one e-mail they were -- from their director of public affairs, Fred Michel, who admitted that some of this information that they got the day before Jeremey Hunt was supposed to speak was absolutely illegal.
(BEGIN VIDEO CLIP)
JAMES MURDOCH, NEWS CORP EXECUTIVE: There's absolutely not a quid pro quo for that support, and the decision-making around the "Sun's" policy and who they support, which political parties, et cetera, I've described to you, and it had absolutely nothing to do with other business interests around the place.
The -- and the negotiation, the lengthy negotiation and regulatory process, rather, political process around the Sky transaction was entirely separate. I simply wouldn't make that trade. It would be inappropriate to do so, and I just don't do business that way.
(END VIDEO CLIP)
RIVERS: So, he's basically saying there that he didn't offer backing in the "Sun" newspaper for David Cameron in exchange for this deal being nodded through by Jeremey Hunt.
QUEST: Stay where you are, Dan Rivers. Maggie Lake is in New York. The -- the -- Maggie, the way in which we are now hearing evidence of the close ties with politics and business, how will this be received by those seeking a US investigation into News Corp?
MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: Well, here's the issue near-term in terms of what people are watching, and importantly, what officials here are watching with these proceedings, Richard.
In that if it is proven that employees of the British publications of News Corp paid off Scotland Yard officials as part of this phone-hacking program, it could put News Corp in violation of Foreign Corrupt Practices Act, which makes it illegal for an US company to pay bribes to foreign officials in order to further their business interests.
If that turns out to be true, if they are in violation, they could face multimillion-dollar fines. And in the most extreme case, it might put their broadcast license in jeopardy. Now, experts I talk to say that is extremely unlikely. They don't think that will happen.
If they are found in violation, they do think it's possible that they'd face multimillion-dollar fines. It's not something they want to see, but News Corp is a company with deep pockets. That is something they could handle.
As this progresses longer-term, different story, and those looking to move this legal case to the US are going to be looking at the bulk of the evidence, of discovery, of what people are saying to try to support a case on the ground here, Richard.
QUEST: All right, Maggie, stay there. Finally, to you, Dan, we have Mr. Murdoch, Sr., Rupert Murdoch, giving evidence tomorrow. That's Wednesday. What are we going to be listening out for then?
RIVERS: Well, I think this BSkyB takeover is going to be a big chunk of the evidence tomorrow. He is the man at the top of this whole organization, don't forget, even though his son is obviously important. But how much did he know about the back and forth, the back channel to Jeremey Hunt?
And also, Jeremey Hunt himself is due to speak in the next couple of hours. Will he survive the night or not passing potentially market- sensitive information back while he's supposed to be weighing this up, it's pretty serious stuff.
QUEST: Dan Rivers, there. Back to you, Maggie. Finally, we look at this and we see a worsening morass. Now, whether it is the Foreign Corrupt Practices Act, whether it is any of the other litigation, investors are still sticking with News Corp. They know that is what they have bought, they bought into a Murdoch enterprise.
LAKE: They are sticking by it, Richard, because aside from the newspaper business, particularly in the UK, but the newspaper business general, News Corp's other entities are doing quite well.
I will tell you what will change that is if this -- it's found in all of this that any kind of phone-hacking, any kind of illicit activity was happening here at US publications. That is a line that cannot be crossed. It would be a complete game changer, it would put News Corp in its entirety.
As long as this remains contained, it's expensive, they don't like it, but as long as it remains contained in the UK, it is something that News Corp can deal with and something that investors will live with, Richard.
QUEST: Maggie Lake is in New York for us tonight. Dan Rivers is here, and Dan will be -- you'll be there tomorrow, won't you?
RIVERS: Of course.
QUEST: We know what your assignment is tomorrow.
(LAUGHTER)
RIVERS: I think that's beyond doubt.
QUEST: Beyond doubt. You'll be there at Leveson. And hopefully, Rupert Murdoch will not suffer the same indignity -- appalling indignity, actually -- that he suffered when he gave evidence before the select committee -- Commons Select Committee.
RIVERS: I think they'll be checking for custard pies before anyone's allowed in.
QUEST: Cut off foam and anything else.
RIVERS: Exactly.
QUEST: Right. You'll be there.
RIVERS: Yes.
QUEST: And you'll be here.
RIVERS: And then here.
QUEST: Good. He's got his work cut out for him.
(RINGS BELL)
QUEST: Resignation, red ink, and intensive responsibility. When we come back, the Dutch prime minister, Mark Rutte will fight to keep the wheels of government turning. It's Europe's mess, and we'll get some analysis on are the wheels coming off the wagon again. QUEST MEANS BUSINESS, good evening.
(COMMERCIAL BREAK)
QUEST: Right. Outgoing Dutch prime minister Mark Rutte is urging lawmakers in the Netherlands to work together to stop the country descending into a debt crisis. He's asking Parliament to support $20 billion-worth of cuts and, in the words of the outgoing or caretaking prime minister, "do what is necessary for the Netherlands."
The coalition crumbled after the Freedom Party refused to back the cuts, and it's all because the deficit in the Netherlands is going to be 4.6 percent forecast this year, which is higher than the 3 percent target and, of course, as mandated by Maastricht and the fiscal compact, now.
So, that's the situation in the Netherlands, which has been giving hiccups and a lot of cause of indigestion in the markets.
In Hungary, now, the prime minister, Viktor Orban, says he is close to breakthrough in aid talks with the European Commission. After informal meetings with the president, Barroso, Mr. Barroso says the talks were constructive.
You'll remember, the European Commission has threatened to withdraw cohesion funds worth many hundreds of millions of euros to Hungary because of what they perceive as the -- poor judgment in the new constitution and rules relating to the Central Bank. Things, of course, the government there denies.
Greece -- the situation seems to go from bad to worse. There's a forecast, now, of a GDP contraction in 2012. That's worse than the 4.5 percent forecast. But you've really got to put this into context. It comes on top of the 7 percent contraction that took place last year. Greece's Central Bank governor says the country must become competitive again.
(BEGIN VIDEO CLIP)
GEORGE PROVOPOULOS, GOVERNOR, BANK OF GREECE (through translator): In this critical environment, the Greek economy is being called upon to make stable steps toward progress. Complete readiness is required from the first day after the elections so that the war can be won on all fronts, beginning with the building of a decisive and flexible state that will serve both the competitive operation of the market and social cohesion.
(END VIDEO CLIP)
QUEST: Now, the Athens index was the only one of Europe's major bourses to fall on Tuesday. Banks were some of the worst performers there. The block's other indices ended the session reasonable gains, although not enough to make up for Monday's sell-off. And those are the numbers. Gains in London, Frankfurt, and Paris, and Athens was off.
Barclays and Lloyds up more than 3 percent, Lufthansa 2.3 percent. Lufthansa is going under restructuring and has been upgraded. So, that's the way the markets are looking.
Vanessa Rossi is global economics advisor to Oxford Analytica. Vanessa's with me now. When we look at the litany that I have just gone through, they do not -- or are we headed down again? Are we headed to another precipice?
VANESSA ROSSI, GLOBAL ECONOMICS ADVISOR, OXFORD ANALYTICA: I think every time I come here, we seem to be off another cliff, don't we? And every time there's yet another one to go. So, at the moment, I think we're rolling over yet another bank. It's rather like you've begun a sort of spiral fall and you don't quite cling onto anything to stop yourself.
So, I think probably we'll go down a leg, and then in another few months, we'll be back again with another problem. And it's going to go on for some time. The truth is that getting out of these kinds of problems takes time. You need to restore growth, which there's absolutely no signs of yet, and that means that the fiscal positions are going to be worse this year.
Now, the way Europe's moving, that means they'll be cutting more, chasing their tail, and we're going to find it so much more difficult to get out of this debt problem.
QUEST: So, what sort of growth policies would you like to see, or is -- people like, economists like yourselves and the market looking for?
ROSSI: Well, I think we firstly have to hope there's something there. One thing that's clear, and we take this Dutch fiasco now about the -- well, fiasco or not, whichever this lead rows about the Netherlands.
In the Netherlands' case, they could actually afford to spend more this year. The Netherlands' debt is actually not far off the Maastricht limit. It's only a little bit above the 60 percent. They could afford to spend 4, 5 percent this year. And if that would help to keep growth going, it would be good.
QUEST: So --
ROSSI: Put that together with Germany, which is still targeting to get its fiscal deficit down to 1 percent very quickly. Now, these countries could actually have a bit of leeway to soften up.
QUEST: So, what you're saying is in countries like the Netherlands and certainly Germany, we know, really you're looking for a nod and a wink from the Commission and from the bureaucrats and Eurocrats in Brussels to say go ahead and do it, this is part of the solution, rather than fiscal, fiscal, fiscal, austerity, austerity, austerity all the way.
ROSSI: They've got a problem with this message because you can't easily let up on those countries which have clearly got to a debt crisis. So how do you have your cake and eat it here? Because you want to be able to tell one side that they can ease up, and you need to tell the other side that they've got to keep on the pressure.
QUEST: But that's exactly the message that Christine Lagarde and the IMF were saying last week. It's what the OECD has been saying. So why can't the Europe --
ROSSI: True. The problem --
QUEST: -- why can't they implement it?
ROSSI: But the problem is that the people who listen to this most are those countries which most need to cut their deficit. And this will, in a sense, be seen as letting, say, France off the hook. We look at these elections in France, what happens if the Socialist party come in promising that we don't have to cut so much after all because we're going to restore growth?
Now, it begs belief quite where they think this magical growth will come from. If we look at the past performance of France, there's no great magic as to where you can find growth that you didn't find it in the last ten years.
So, there's going to be a lot of hard work to do to restore any kind of growth -- growth momentum in these countries.
QUEST: As you look tonight at the situation, are you worried, very worried, desperately worried, or not at all concerned?
ROSSI: Well, you have to put this in the context of my long-standing worries about these things.
QUEST: Right. Which is why -- right.
ROSSI: In my sense, I'm probably sort of worried, but I know where this is coming from. I think other people who've thought everything was all going well, that growth would be coming back, that the deficits were all under control --
QUEST: Right.
ROSSI: -- are going to be very desperately worried. And there'll be quite a lot of people in that camp.
QUEST: Vanessa, many thanks, indeed.
ROSSI: Thank you.
QUEST: Very well. Many thanks.
All right. As we head on, a Currency Conundrum. Here's a question for you. It's even a form of a history lesson. Now, it's our Currency Conundrum tonight. China has been using early forms of currency since 1200 BC. But which of these objects was the first to be used in the currency? Was it A, the cowry shell? B the Jade disc, also known as the bi? Or C, a piece of stone?
And while you're working that out, more modern currencies today. In Europe, the same way as the European stock markets, the euro and the Swiss franc both up around a third of a percent against the dollar. Those are the rates to the break.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: It turns out, today's Millennials aren't only worried about themselves. A Harvard study found out today says 20-somethings are more concerned about the economy than anything else.
Now, if you look at this, you've got the economy, a whopping, great big chunk of the pie, 58 percent it was the most serious problem. This is in the United States. They're concerned about things like jobs, financial stability.
Just like Millennials we follow elsewhere. So when you look at their concerns, it is economy, health care, national security. But the economy and how they will survive throughout is their overarching worry.
Just like what we're going to hear form Michael, our Millennial. Michael is living in a tiny apartment, working part time just to keep his hopes of stardom alive. Milli's taking on so much, she thinks she could be about to burn out. It's time for the Millennials.
(BEGIN VIDEOTAPE)
UNIDENTIFIED CORRESPONDENT (voice-over): Previously on The Millennials, in Johannesburg, Milli Bongela admitted that being the face of her business can take its toll.
MILISUTHANDO BONGELA, FASHION BLOGGER: I find it difficult to keep the homeless mini-me vibe going. Obviously, it's like a show sometimes.
UNIDENTIFIED CORRESPONDENT: And in New York, Michael Burbach revealed his fighting Millennial spirit.
MICHAEL BURBACH, ASPIRING ACTOR: In this business, things don't fall into your lap. If you want it, then you have to go and get it, and you have to keep knocking on doors until someone listens to you.
UNIDENTIFIED CORRESPONDENT: To make it on Broadway, Michael knows he must live in New York. But as any young wannabe actor knows --
BURBACH: Delicious, cheap, and one block away from my house.
UNIDENTIFIED CORRESPONDENT: Making ends meet in a city filled with temptation can be tough.
BURBACH: Can I get the oatmeal raison cookie, please?
UNIDENTIFIED CORRESPONDENT: For many struggling students, a spacious apartment is completely out of the question.
BURBACH: And here we are at my apartment building.
UNIDENTIFIED CORRESPONDENT: Instead, it's a case of settling for a humble little room. And that's exactly what Michael has done.
BURBACH: So, welcome to my tiny studio apartment. This is my little kitchenette and my stove and my fridge and everything. This is my bed, but it also doubles as my kitchen table.
UNIDENTIFIED CORRESPONDENT: Even in this small space, Michael dreams big.
BURBACH: The walls are covered with things that inspire me. These are show posters from some of my favorite Broadway shows.
UNIDENTIFIED CORRESPONDENT: Everything else takes second place. To make it here, you need to eat and breathe your dream.
BURBACH: Debt and money -- it's crazy. I know a lot of people my age who are really worried about their finances. And trust me, it's always on my mind.
UNIDENTIFIED CORRESPONDENT: To help pay for necessities and the shows that are his lifeblood, Michael Burbach has found himself a lifeline.
BURBACH: Right here. Patrick McMullan's office. My boss.
UNIDENTIFIED CORRESPONDENT: Working part time as an assistant to Patrick McMullan, one of New York City's best-known society photographers.
PATRICK MCMULLAN PHOTOGRAPHER: Did they give you a list of who's coming?
BURBACH: I believe so.
UNIDENTIFIED CORRESPONDENT: Michael helps Patrick with everything, from scheduling --
MCMULLAN: You've got to call Black and get the -- who is coming.
UNIDENTIFIED CORRESPONDENT: To his music play lists.
MCMULLAN: Because you kind of know what song.
UNIDENTIFIED CORRESPONDENT: To more creative endeavors.
MCMULLAN: I want this kind of glamor, this kind of look.
UNIDENTIFIED CORRESPONDENT: In return, Michael makes key contacts.
MCMULLAN: I know he likes Lady Gaga. When I was invited to do her personal party, I didn't tell him anything until that day, and I said, "You know, there's a party I think you really should come with me to."
UNIDENTIFIED CORRESPONDENT: And learns from one of New York's most well-known movers and shakers. Only a few weeks ago, Patrick gave Michael the run of his studio for this professional photo shoot. Michael hopes Patrick's connections can help in new ways, as well.
BURBACH: I definitely hope that I can -- meet some cool people through my job and maybe open some more doors and more opportunities for me to keep going.
UNIDENTIFIED CORRESPONDENT: As for Patrick, he says Michael has that special something that he sees so often on the red carpet.
MCMULLAN: I could see Michael being one of the stars. And he'd probably say to me, "Yes, I do remember you."
(LAUGHTER)
UNIDENTIFIED CORRESPONDENT: At 22 years of age, this kid has made important connections. The rest is up to him.
BURBACH: It is a job, and it's not always just about glamor, and it's not just about fame or money. It really is about hard work.
UNIDENTIFIED CORRESPONDENT: Milli Bongela also knows a thing or two about hard work. For her, it means keeping the Miss Milli B show alive. Today, she's doing just that, with an appearance at South African Fashion Week.
BONGELA: How can you non-fashion people sitting here and ask fashionistas to be sitting elsewhere?
UNIDENTIFIED CORRESPONDENT: For some, this may be a bit of fun?
BONGELA: What are you wearing?
UNIDENTIFIED MALE: I'm wearing my own design.
BONGELA: Sorry?
UNIDENTIFIED MALE: My own design.
BONGELA: Your own design?
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED CORRESPONDENT: For Milli, this is a day's work.
BONGELA: Where do you sell the stuff?
It probably would be easier to have a 9:00 to 5:00 job, but I fear that I might be bored to death.
UNIDENTIFIED CORRESPONDENT: As she takes her seat for the main show - -
(MUSIC)
UNIDENTIFIED CORRESPONDENT: Milli gets straight down to work, taking photos and posting them immediately on Twitter.
BONGELA: People really respond to it. It's positive, I've got a lot of people that follow me who say that they have boring office jobs and they really like to come in in the morning and see what I've been up to.
UNIDENTIFIED CORRESPONDENT: Milli clearly loves what she does. She even has an opinion or two on the industry itself.
BONGELA: I personally would like to see a less fragmented (ph) industry. I would like to see a fashion council in South Africa, where the direction of where we're going as an industry comes from one unified body.
UNIDENTIFIED CORRESPONDENT: But with so much on her plate, this Millennial acknowledges that it's impossible to do it all.
BONGELA: I actually did burn out last year for a brief period, and it wasn't fun. And it's because I realized I took on too much, and I couldn't delegate. I was too much of a control freak. And yes, that is the unhealthy side to living my life like this, that there's no balance, because I'm constantly working.
But I have since found new ways to deal with how I work. I can't say that there won't be another burnout in another year. It's just a risk I have to take.
UNIDENTIFIED CORRESPONDENT: Next week on The Millennials, Michael Burbach prepares to take center stage.
BURBACH AS DEMETRIUS, "A MIDSUMMER NIGHT'S DREAM": Consent to marry with Demetrius.
UNIDENTIFIED CORRESPONDENT: As he takes his last bow as a student. But will nerves get in the way? Only on The Millennials.
(END VIDEOTAPE)
QUEST: The Millennials. If you are a Millennial, tell us which issue concerns you most. And if you would also like to join and be one of our next set of Millennials, e-mail us at millennials@cnn.com or you can e-mail me directly, it's quest@cnn.com.
We are looking for our next group of Millennials that we will be following in the weeks and months ahead. Wherever you are in the world, it's quest@cnn.com and we will maybe include you as part of our series.
(RINGS BELL)
QUEST: The Dow is back above 13,000, and it's got corporate earnings to thank for this. We'll take you through our Q25 in a moment.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in a moment. This is CNN, and on this network, the news always comes first.
The former News International chairman James Murdoch has told a U.K. inquiry into media ethics he never saw an email showing the extent of the phone hacking at the now-defunct tabloid "News of the World" newspaper and his subordinate failed to keep him properly informed.
Mr. Murdoch has also denied claims the British culture secretary Jeremy Hunt acted as a cheerleader for the company's bid for BSkyB.
Video posted online shows fresh anger in Syria's Idlib province. An opposition group says troops removed 20 bodies from a hospital there after hearing U.N. observers were arriving. Meanwhile, the government is blaming a car bombing in the capital on armed terrorists.
Reuters news agency is reporting Sudan is willing to talk with South Sudan in order to prevent a return to full-scale war. South Sudan's president earlier said Khartoum had declared war on his country after Sudanese war planes bombed the south's oil-rich border region.
The outgoing Dutch prime minister Mark Rutte is urging parliament to support his budget cuts so the Netherlands can avoid a debt crisis. He also says he expects elections to be held in September. Mr. Rutte and his government resigned on Monday after a far right walked out of the austerity talks.
Chelsea and Barcelona kick off the second leg of their Champions League semifinal, just a half an hour from now. Chelsea won the first leg 1-0, and they only need a draw to guarantee reaching the final. The English club has only made it to the final once in the last nine years.
(MUSIC PLAYING)
QUEST: Stocks in the United States are getting a solid boost from the latest corporate earnings numbers. We've seen strong numbers today and as we delve deeper into the earnings season, we're giving you a more detailed coverage through the Q25. Now there are 25 companies, 25 sets of results and two colors, the red and the green.
We decide who gets what, and there are the usual criteria, the criteria you'll be well familiar with. It all depends on things like earnings growth, revenue growth, QoQ warnings, earnings growth, (inaudible) and animal instinct. Analysts estimates, talking of animal instincts, Felicia Taylor is with me this evening, doing -- well --
FELICIA TAYLOR, CNN CORRESPONDENT: I knew you were going to make that connection. I just knew it.
(LAUGHTER)
QUEST: You weren't wrong . You were -- let's look at some of the reports from the big three companies in the Dow, each of them did more or less as we had expected.
AT&T had record smartphone sales with profits and revenues up slightly, which was roughly in line with expectations. 3M upgraded its forecast for 2012 after a record first quarter for sales, though its chief execute called the environment challenging. While United Technologies did better than expected with profits continuing (inaudible) 22 percent.
There were big losses on discontinued operations. Let's do AT&T first. Felicia, we're going to go through these quite quickly. AT&T, you take the totality of it. What's your gut feeling?
TAYLOR: Honestly, I think it's a red, because, look, they've got market saturation. They've got a slowing market. That means more competition from Verizon. And the thing about this company in this particular quarter is while iPhone sales were strong, they had to shell out less in subsidies.
So they're paying less to Apple. So that affected the bottom line. However, the market likes what it sees in this company because right now the shares are up about 4 percent. But I still vote red.
QUEST: And we had a vote on this, and so this is what we call a double R, a reluctant red for AT&T because even though the numbers were good, there was just something not quite sure what was not quite right, which was a bit in the opposite direction for 3M.
It made three of our five criteria, so that gives us a debate, the three, it didn't have earnings growth, it didn't rev growth, its QOQ was good. It beat (inaudible) analysts and it had a positive outlook. I would have given 3M a red, but you, you argued against.
TAYLOR: I did argue against it, and the reason is because they've raised their forward guidance. This is very important for any company right now. No, seriously, all we care about right now is moving forward. They've also had strength in their U.S. auto and industrial demand. That means that they've been able to sort of diversify all across their markets.
It's a good window into the U.S. economy, sort of like GE. They've got strong growth in Latin America and Canada. OK, great. No surprise in Latin America. But Canada. And the CEO says that it's managing a challenging environment. The market right now also likes what it sees. It's up about, well, not that much. OK.
QUEST: All right.
TAYLOR: It's up 11/2 percent.
QUEST: Which is why -- yes, I -- which is why it's a double G, what we call a grudging green. You're getting an idea that the numbers are coming in and we are not totally convinced with what we are seeing. United Technologies, here it's slightly different. There really isn't much debate on United Technologies. It beat all the (inaudible). It's a straightforward strong green for UT.
How about Coach? This is the luxury goods company, not the coach and horses. You -- your feeling on Coach?
TAYLOR: I give it a green, but I'm a little grudging on this one, too. It did raise its dividends 33 percent. That's huge. It has seen profit growth over the last two years on global expansion in North America.
That's also huge, because it's obviously been a very difficult marketplace. It's also diversified, offering more men's products, so now they've got stores that are offering more men's products. However, it's got weaker growth in the United States and worldwide growth could still be of concern.
QUEST: The --
TAYLOR: (Inaudible) as well.
QUEST: Their numbers in the U.S. were pretty -- I mean, their actual numbers were not good at all.
TAYLOR: They're pretty good. Right. I mean, the sales in the U.S. is not -- is not that good.
QUEST: We had it --
TAYLOR: Positive business outlook, and it did beat the street. And look at sales in China. They're up 60 percent.
QUEST: We had to have a vote on this in the end, because we couldn't agree. I lost. It got a green, although it's a grudging green.
Finally, Texas Instruments and there wasn't much debate on Texas Instruments because it was down on profits, down on revenue, down on QOQ. Yes, it did a bit of guidance, Felicia, but I'm sorry. I'm sorry. It's a red.
TAYLOR: No. This one -- this one is -- it's a red. I'm with you on it. It's -- first quarter orders rose 13 percent. It upped the ante for the second quarter. But however, you know, it's not really doing that well. It's -- might going to be, you know, a position to benefit from a rich product mix.
But that's about -- I mean, there's not a lot to say about this company. And, frankly, the street doesn't like what it sees, either. It's down fractionally at the moment.
QUEST: Felicia, many thanks. Just let me put a bit of background into all of this. So at this point in the earnings season, we're now seeing roughly for what the number of the S&P 500 companies, we are starting to see more companies beating their estimates than traditionally. Normally, it's 60-70. So a slightly higher than otherwise, and that is just marginally reflective.
But what we are seeing is the worries on the reds are almost equal to the greens, and that tells us quite a lot about what we should expect as this season moves forward. We are by no means on the gangbusters of a Q25 where the greens are storming ahead. We've got more companies that will be joining us in here as the week goes on.
In a moment, they've got the backing of the tech billionaires, and it looks like science fiction might just become science fact. Next we speak to the men who want to do mining of asteroids. Whoo! In a moment.
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QUEST: Time for the answer to today's "Currency Conundrum." We asked what the first form of currency in China was in 1200 B.C., and the answer is the cowry shell, a coveted species of shell traditionally worn by your royalty in the Pacific Islands and used as currency in Africa.
Currency of the past. It's now a business venture, perhaps that takes us as far in the opposite direction to the future as you can possibly get, futuristic, indeed. Forget about the flying car. A new company called Planetary Resources is planning to tap the mineral riches of asteroids, and it's going to do so with space traveling robots.
This is the paper-only pipe dream. The company's founders told me they've got the financial clout to launch their first prospective spacecraft within the next two years. Asteroid-smashing space robots might sound more like a film plot than a real business venture. But the company's founders told me that throughout history the plans of pioneers have often been called barking mad and crazy.
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PETER DIAMANDIS, PLANETARY RESOURCES: Every aspect of human exploration ever, whether it was the Europeans heading to the Americas or the early American settlers going across the Great Plains, has been driven a search for resources, for spices, for gold, for oil, for timber, for land.
And every one of those was probably viewed as stark raving, you know, as crazy in the beginning, but the day before something is truly a breakthrough it's a crazy idea. And really, these are the vast wealthy things in humanity that nations fight wars over, access to metals, minerals, energy, (inaudible), water. And you know, these are things that are in near infinite quantities in space.
QUEST: Do you have all the money that you currently need to get this project sort of off the ground, pardon the pun. And before you ask, no, I'm not going to -- I haven't got any that I can throw in after this (inaudible) of this project.
ERIC ANDERSON, PLANETARY RESOURCES: Yes, we do. We are very fortunate to have some truly visionary investors, some of the folks who have created not only companies but industries, people like Larry Paige (ph) and Eric Schmidt from Google and Ross Perot Jr., my friend and colleague and business partner, Charles Simone (ph), who is the chief architecture of Microsoft.
QUEST: Really, when do you think you would bring something back from space? And not necessarily commercially viable, but bring some form of mineral resource back that shows the viability of your project, not necessarily the profitability?
DIAMANDIS: Well, in this next, you know, two to five, six years, we're really focused on building our Arkyd series of spacecraft, the 100, 200 and 300 series, which are going to be, first of all, imaging these near-Earth-approaching asteroids to identify which are the ones that we want to go after, and then ultimately going out to them to place beacons, to do the full reconnaissance, to understand their makeup, and then ultimately is going to be the prospecting, to begin to get resources.
Our first step really is going to be to process these resources -- water in particular, which is propellant rocket fuel -- in fuel depots that will remain in space and be accessible to government partners, private industry that's doing Earth-moon or Earth-Mars transportation. And then of course, after that, beginning to bring strategic metals and minerals back to Earth.
QUEST: Right. So, Eric, this is a -- this is not just a mining operation. You're turning into the logistics industry for space.
ANDERSON: Well, I think that's a great insight, Richard. I think that it is -- it is a mining operation. It is a resource play. It is also a play that makes use of a very unique capability that we're developing, which is very high performance, extremely low cost deep space robots.
And so that capability does not exist today. We're going to be able to do -- we'll cut the state-of-the-art cost performance curve by a factor of 100.
QUEST: All right. I am 50. Will I get to see any fruits of your work before I drop dead?
ANDERSON: Let's not forget: just 10 years ago, Peter and I started -- Peter and I had just started Space Adventures. And before that time, no private citizens had been to space. Since then, we have a number of people pay $50 million to visit the space station.
We have billions of dollars invested in private capital in space tourism. We've got a number of thousands of people signed up for suborbital flights. And let's be clear. Resources and energy is an industry that's 100 times bigger than tourism. So this next decade and the decade afterwards going to be very interesting, Richard. Stay healthy.
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QUEST: The men who will go to space and mine the asteroids and see what comes back.
Jenny Harrison is at the World Weather Center with some interesting pictures for us this evening. And you're rather bright and beautiful.
JENNY HARRISON, CNN METEOROLOGIST: Well, thanks very much. That's enough for you today, so I didn't know you're 50. I needed to get that in quickly, obviously. We know that's not the case, I know. There you go.
Look, come back to me. Yes, before I get onto the pictures, which are beautiful, I'm going to talk to you about this, because a geomagnetic storm happening, going on right now, moderate is the trend of this particular one. So what that really means in terms of areas of concern is that we shouldn't really have any of them. Just minimal impact on satellites.
But what the good thing is, of course, is we have these auroras, the borealis aurora, the Northern Lights, Aberdeen, Oslo, Hobart (ph) even, down there in Tasmania, Australia. But have a look at this. This is what Richard is talking about, because just spectacular. The images or this time-lapse was taken from the early hours of this Tuesday morning.
And in fact, the different colors, just in case you've never been quite sure, they're determined by the gases in the Earth's atmosphere. And the solar particles attempt to collide with the different gases at the different heights. So look at the purple and the blue you can see. That is actually gases much higher up in the atmosphere, such as hydrogen, helium, that causes the blue and the purple.
And the more common sort of yellow to green, that is generally oxygen colliding with particles at much lower altitudes, at about 100-300 kilometers. So that is what it looks like and, as I say, we could see more of this over the next sort of 24 hours, maybe even 48 hours.
This morning, the morning hours of Tuesday, was a very, very good event. It was up to number 5 on the scale. But look at this. As we go into the next 24-48 hours it will be weakening. But all of these areas, all the countries, all these locations in the Northern Hemisphere should, if the weather, of course, cooperates, have a pretty good view. So head out for that if you can.
Now having said that, it does come down to the weather. The next big system heading into western Europe, we see nothing but rain, thunderstorms and snow for the last few days. The winds have been strong, nearly 130 kilometers there on the west coast of France, and all the systems have been taking the same route, which is why, of course, it just seems to be going on and on forever.
So this is the next system coming in. And once again, we're looking at some very, very strong winds. There are warnings in place already and very heavy amounts of rain into some of the areas of the U.K. These are the winds right now. They're not too bad into the (inaudible) but they will be getting stronger as the system gets closer.
And, again, the far northern shores of the U.K. It's a bit clearer when you look at it like this. So as the system comes up, that's the center of the low pressure system, the winds change, the bigger, the darker the arrows and some of the colors. That will the stronger winds.
And, again, of course, they will be very strong as that system gets closer to the (inaudible). But the winds are very extensive across Europe and it does mean some pretty long delays across many of the major airports, London, Heathrow, but also across into Dublin, some long delays there, Brussels as well. And you can see all of that today because of the wind coming in from the west, Richard.
QUEST: You know, I actually saw the Northern Lights, the aurealis (sic) whatever it is, on that, flying across -- yes, flying across the Atlantic one night. (Inaudible). Well, you know, you get that far north, you know, towards Iceland and Greenland, you really get a very good view of it, on a good night.
HARRISON: Indeed you do. And I'm glad that you can take off your list then, because now you're 50. So before you're dead, at least you've already seen the far-off (ph) Northern Lights. (Inaudible) that off your list.
QUEST: Bright little cheerful ray of sunshine. All right. Thanks for your Northern Lights. Turn her lights off in a minute. Jenny Harrison at the World Weather Center, after the break, QUEST MEANS BUSINESS (inaudible).
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QUEST: China's auto market may not be seeing the growth it's experienced in recent years. It is seeing a rising demand for larger, more extravagant models, though. And those consumers are eyeing up top-end vehicle brands. And if you look at the overall trend, it can be quite clearly defined as bigger being better. Eunice Yoon brings us the buzz. She's in Beijing.
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EUNICE YOON, CNN CORRESPONDENT: I'm Eunice Yoon in Beijing. Here at the Beijing Auto Show, carmakers from all over the world are showing off their latest models. And this year the focus is on luxurious cars, even as the industry worries about a possible slowdown.
TORSTEN MULLER-OTVOS, CEO, ROLLS-ROYCE MOTORCARS: You can feel that there is, let's say, maybe not any longer those explosive growth patterns as we have, let's say, experienced them the years before. But especially when you look midterm and long term, I'm highly confident about the Chinese market, especially for our super luxury segment.
YOON: China is the world's largest auto market with double-digit growth for the past several years. But last year, car sales rose by 2.5 percent from a year ago. And this past quarter sales fell. But with the U.S. and Europe still weak, car giants are heading here, hoping to make big profits off of bigger, fancier cars.
SUVs are all the rage at the show. Lamborghini is getting in the race with its ultra-high end sports utility vehicle.
Range Rover showed off their limited edition Victoria Beckham design with a rose-gold grille, and Ford Motor unveiled three new SUVs.
JOE HINRICHS, PRESIDENT, FORD Asia Pacific: SUVs are a strength for Ford globally, and here in China, the SUV segment is one of the fastest growing segments of the industry. So put the two together, Ford SUVs, three new models here at the show. We'll have four SUVs to sell here in China, very exciting times.
YOON: Ford is opening a new plant in China, doubling its production. But what's surprising is the lack of buzz over new energy vehicles. Only a year after the big push for environmentally friendly models, green cars are taking a back seat as Chinese consumers shrug off high gas prices in favor of their next big set of wheels.
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QUEST: Sensible woman, Eunice Yoon, at the Beijing Motor Show, wearing sensible shoes. And I bet she's been doing more walking as she goes down that place. (Inaudible) absolutely vast. It takes you forever to get around them.
OK, the market's open and up 74 points, where as it were, in a big flirting up and down through 13,000. It is going to be the story of the next few weeks, and that is what we are seeing today, up 75 points. But it is a tenuous grasp on 13,000 that the market has at the moment.
When we return, QUEST MEANS BUSINESS, it has a "Profitable Moment."
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QUEST: Tonight's "Profitable Moment," 160 years ago, the pioneers of the past had set off across the American frontiers, and they had only one thing on their mind, resources and gold. Today, the pioneers are looking for the same kind of precious resources, only now the places they are heading to are literally out of this world.
We are talking about the final frontier. And the prospectus at the Planetary Resources, mining asteroids for their minerals sounds like science fiction. Well, actually, it is science fiction. And yet such is the ambition, such is the vision that they've managed to attract billionaire investments and make it a reality, and that in itself is a staggering achievement.
What happens from here is where it gets interesting. We all know how the first Gold Rush ended. It worked wonders for some; it ruined many others. And while the company told us tonight it's interested in human prosperity, their investors are worried about profitability.
Ha! Think about it. The last thing anyone wants to do is see that capital end up lost in space. I'm not cynical about this one. I've seen it happen all too often, a good idea that goes into the future.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. As always, whatever you're up to in the hours ahead, I do hope it's profitable. I'll have the headlines next.
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QUEST: These are the news headlines.
Video posted online shows fresh anger in Syria's Idlib province. An opposition group says troops removed 20 bodies from a hospital there after hearing U.N. observers were arriving. Meanwhile, the government is blaming a car bombing in the capital on armed terrorists.
Reuters is reporting that Sudan is willing to talk with South Sudan in order to prevent a return to full-scale war. South Sudan's president earlier said Khartoum had declared war on his country after Sudanese war planes bombed the south's oil-rich border regions.
The former News International chairman James Murdoch has told a U.K. inquiry into media ethics he never saw an email showing the extent of phone hacking at the tabloid "News of the World." Murdoch has also denied claims the British culture secretary, Jeremy Hunt, acted as a cheerleader for the company's bid for BSkyB.
The outgoing Dutch prime minister Mark Rutte is urging Parliament to support his budget cuts so the Netherlands can avoid a debt crisis. Mr. Rutte and his government resigned on Monday after a far right ally walked out of austerity talks.
Those are the news headlines. This is CNN. Now, "AMANPOUR."
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