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Quest Means Business
New Greek Government Sworn In; Bailout Battle Begins; European Markets Rise on Expectations of US, UK Stimulus; US Fed Continues Operation Twist
Aired June 20, 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: There's a new prime minister with a prime objective to renegotiate the bailout terms for Greece.
A case of shake, rattle, and bankroll. The Fed Twists again.
And time for a lie-down. The outgoing Air New Zealand CEO tells us of his proudest achievement, the Sky Couch.
I'm Richard Quest. I mean business.
Good evening. The coalition is confirmed and now the bailout battle will begin. After some 200 days in limbo, Greece has now sworn in its new prime minister, Antonis Samaras. He'll lead a government made up of his New Democracy party, the socialist PASOK party, and the smaller Democratic left.
And top of their agenda is to soften the terms of the hugely unpopular bailout agreement. Our correspondent Matthew Chance --
(RINGS BELL)
QUEST: -- is in Athens and joins me tonight. Matthew, so, the composition of the government first, before we talk about the bailout. Is it pretty much as we expected?
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, as we expected in the sense that we've got Antonis Samaras as the prime minister, but no real cabinet posts yet have been officially confirmed.
Neither of the other two coalition partners, as I was, I think, talking to you about last night, have agreed so far, at least publicly, to have any of their MPs as cabinet ministers. Usually when you have parties talking about a coalition agreement, they're usually lobbying for the Foreign Ministry portfolio, the Defense portfolio. Not this time.
All of these parties see this government as potentially a very unpopular government because of the economic reforms they've got to pass in the country and force through. And so all of them, while they say they'll support the government in a vote of confidence, all of them are trying to keep their actual MPs out of the high-profile cabinet positions.
And so, that hasn't been confirmed yet, they're still negotiating it. We're probably going to get confirmation on that tomorrow. But nevertheless, it doesn't bode well, does it, for the idea that this government's going to last a long time?
QUEST: Is it a -- I suppose, then, I ask, is it a coalition or is it a government of confidence and supply where the other parties have just agreed not to bring it down and support on certain measures? Or is it some hybrid in between?
CHANCE: Well, the truth is, the coalition agreement is still being hammered out in the Parliament building just a short distance from now -- from here. There are representatives from all of the three parties, New Democracy, PASOK, and the Democratic left, sitting in that Parliament even now, trying to hammer out the exact terms of what this coalition agreement is going to look like.
I think it's certainly true that, on the one hand, certainly parties like the Democratic left, the smallest party in this coalition, want it to be just a government of loose affiliation, where they give support so it passes votes of confidence. But that's not necessarily something that New Democracy wants --
QUEST: OK.
CHANCE: -- or Antonis Samaras, the newly-sworn-in prime minister wants. He wants this to be as broad a coalition as possible.
QUEST: And we've got a eurozone meeting -- a eurozone group meeting, which the outgoing team will attend. And then, we've got the summit, the EU summit of leaders, later in the month, next week. The new government, I believe, will attend that one.
Oh, and one other thing, Matthew. I see tonight reports that Chancellor Merkel has already invited Mr. Samaras to go to Berlin. Wow. That's going to be a meeting and a half.
CHANCE: Absolutely. The 28th and the 29th of this month, his first meeting, we expect will be, according to his spokesman, with Angela Merkel. The German chancellor, of course, one of the big challenges for this government here in Greece is to present its proposals to the European Union.
First and foremost, of course, Angela Merkel, on what kind of wiggle room they're looking for. What kind of extensions, what kind of easing they can get on the very tough austerity measures --
QUEST: All right.
CHANCE: -- that the international creditors have imposed here.
QUEST: Matthew Chance in Athens for us tonight. We thank you, Matthew, for that.
European markets had a strong session. There was relief that Greece now has a government and some anticipation of the Fed's move to stimulate the US economy. We'll talk about that in just a second.
The London -- in London, the Bank of England's latest minutes suggest it's close to restarting QE. The governor was in the minority on the voting, 5-4 against. The UK jobs growth is at its highest level in more than three years.
And in Spain, the yields on ten-year government bonds slipped back below 7 percent largely on the thought that further help will come in some form of ESFF -- EFSF -- bond-buying program being proposed by the eurozone, which has been rumored at the G20.
When we come back in a moment, the Fed Twists, investors shout. Ben Bernanke is due to speak in just a few moments. We'll bring you that news conference after the break.
(RINGS BELL)
QUEST: QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: All right, now, welcome back. The US economy is struggling, and the Fed has revealed part of its solution. Besides saying it will take further action, it says it'll do more of Operation Twist. If you join me at the super screen, you'll see what I'm talking about.
Now, the goal of Operation Twist is really to lower long-term interest rates. This is what we call -- you'll be familiar with it -- it's the yields curve. It's low interest rates at the short end and the interest rates get steeper and steeper and steeper the further out you go.
And what the Fed's trying to do is twist long-term interest rates down. I'll show you exactly how it works in reality.
The Fed, since September of last year has been selling short-term debt. The Fed's been getting rid of its short-term, two-year notes. In doing so, just marginally moving the short end of the curve.
But with the $400 billion that it has been using for this, it has been buying ten-year bonds and above. In fact, it's been buying everything from three-year and above.
And of course, as you will well know, price and yield and inversely related. So, as it's been doing this, the yield has come down. And it has come down quite a bit by a couple of percentage points. Not a huge amount, but at a time of slowing economies, the goal has been to bring down long- term interest rates.
And if you look at the yield curve over the past few months, it has dropped from four and change to where it is now, 1.6, 1.8. There have been other factors, I won't deny you, there have been some other factors, namely the eurozone flight to quality and all of the things. But $400 billion of spending has certainly had an advantage, and the yield is now flatter.
Alison Kosik is in New York. I think I just about described the Twist.
ALISON KOSIK, CNN CORRESPONDENT: I think you did. I think you did very, very well. I love your props, always love your props, Richard.
QUEST: Right. So, what's the market make of --
KOSIK: You know --
QUEST: -- of -- what does the market make of this decision to extend the Twist to the end of the year?
KOSIK: OK. So, you know how the market sees it, that the Fed did the least it could do without doing nothing. And sure, you saw that knee-jerk reaction as soon as the announcement came out, the Dow dropped almost 100 points immediately after news came out.
But clearly, it's come back a little bit. Now, it's kind of sitting flat, kind of ho-hum. Not really a huge surprise here. It really was the most likely scenario that the market had expected.
Also, some of it was built in. You've seen this run-up for stocks at least over the past week on the hope that the Fed would announce some sort of stimulus. And while this wasn't the big bazooka that the market had necessarily hoped for, it was something instead of nothing. Richard?
QUEST: All right. So, if it wasn't a big bazooka, it was something. But the Fed said in its statement, besides -- and incidentally, I ought to point out, the Fed has also downgraded its view of economic growth from 1.9 to 2.4 percent this year.
But the Fed talked about further action. Now, that's more than just - -
KOSIK: Right.
QUEST: -- saying the composition of maturities in its maturities program. What do they mean, Alison, by further action?
KOSIK: Well, that could be the big bazooka, that if the economy here in the US gets any worse, that the Fed will pull that tool out of its tool shed and possibly use it.
So, what you're essentially saying -- what the Fed essentially said, rather, was that, look, we stand ready to take further action if needed, so that door to QE3 is still open.
And that's why in a couple of minutes when this press conference gets underway with Fed chief Ben Bernanke, we're going to get a better idea about that outlook, that if the economy gets any worse, really, will the Fed certainly keep the door open? And by that statement, it certainly seems that way, Richard.
QUEST: Interestingly. So, in this scenario, we're getting just marginally better economic numbers in some areas. We've got a Fed that's now saying it's prepared to take further action. We've had some profit warnings from some corporate giants in recent days. And Alison, is the market basically waiting and seeing?
KOSIK: That's really what it is, now. Now, it's sort of the look ahead to see, is Greece going to get its act together? Is Spain going to get its act together? What is Fed chief Ben Bernanke going to say during this news conference that gets underway in the next few minutes.
Look, the data here coming out of the US, it's nothing great to write home about.
QUEST: Right.
KOSIK: GDP has been knocked down a few notches, manufacturing's slowing, job growth is slowing. It's growing, but it's also slowing. So, it's really not getting any better right now. So, the fact that the Fed is likely to leave the door open, that's a good sign for the market and probably why you're seeing the market in a holding pattern right now.
QUEST: Alison Kosik in New York for us tonight.
(RINGS BELL)
QUEST: We thank you for that, Alison joining us there.
Whilst we wait for Fed chairman Ben Bernanke to start his press conference, it should be happening any moment, now -- there is the room. Once he does -- the door's not open, but the desk is there, the lights are on, and everybody's waiting.
So, while we wait for that to get underway, and the moment it does, we will bring it to you, the uncertainty that was restored in Greece as a result of the new government, well, the effect in Spain, the government in Spain is still insisting it doesn't need a bailout, despite soaring borrowing costs.
And that's not Spain's only problem. Thousands of striking miners in the north began marching to Madrid today in a protest over the cuts they say are destroying their industry. Al Goodman is in Madrid and joins me.
Al, you're with the marchers. They know the austerity -- what do they actually want?
AL GOODMAN, CNN MADRID BUREAU CHIEF: Hi, Richard. Well, these are the two main trade unions in Spain, convening yet another large protest, as you can see. This is a pretty sizable one here.
And they are trying to get the government to change course. They say they understand there have to be austerity cuts, but they say the cuts, for instance, have been too deep in education and health and some other areas.
And they say, look, the government says it's going to take a bailout for the banks. The government says it's hoping to stave off a bailout for the entire country, but it has agreed to take a bailout for the banks, only the government doesn't call it that. The unions say, how can you bail the banks when you do this austerity on the people's backs? So, that's why they're out here again.
Now, the miners is a different protest, and they will be down to the capital in the coming days. But what is what we have right now. Richard?
QUEST: And the effect that austerity is having at the moment, Al?
GOODMAN: You can see it every day, and we caught up with a man -- what the Red Cross is seeing is an increasing number of Spaniards having to go to their food banks. Here's the story of one man. Let's listen.
(BEGIN VIDEOTAPE)
GOODMAN (voice-over): Valentin Garcia lost his job as a waiter two years ago in Spain's deep economic crisis. Since last year, he's been coming to the local Red Cross to get food.
The line forms here, in Tres Cantos, a suburb of Madrid. Most people asked us not to show their faces. Garcia says he agreed to talk only because he hopes it might help him find a job.
VALENTIN GARCIA, UNEMPLOYED WAITER (through translator): I am willing to work at any hour. I have experience in working any shift. I am not asking much. If there is just part time work, fine. At any hour, any job, even if I have to learn it from scratch. That's all I ask.
GOODMAN: He's 48, has worked since he was a teenager, and lives alone. And his unemployment benefits have run out.
GARCIA (through translator): Right now, my mother is helping me. But as we say, I am bleeding and I don't want this situation.
GOODMAN: Neither do they. Spain's Red Cross for years has given food to homeless people or poor immigrants, but with Spain's jobless rate now over 24 percent, so many more are in need.
JOSE CHAI, SPANISH RED CROSS: Now, people who are normal middle class are coming and asking for help.
GOODMAN: Ready to take anything they can get.
GOODMAN (on camera): There's spaghetti, there's rice, there's soup, there's juice. Over here, there's flour. Just a variety of the basic foodstuffs that is expected to last them for a while.
GOODMAN (voice-over): But this handout is given only once a month to each family, and it's not much. These Red Cross volunteers say they're surprised to see so many Spaniards asking for help.
JULIA DOCASAL, RED CROSS VOLUNTEER (through translator): There used to be fewer people, but now there are a lot. They don't have jobs.
CHAI: It's a little bit scary because you realize that it can happen to you. You realize it's happening to friends, to family, to neighbors, and it can happen to yourself, and nobody's safe from the crisis.
GOODMAN: Garcia says he never expected to find himself in this situation. He isn't optimistic.
GARCIA (through translator): They talk about years, maybe next year or in 2014 it might get a little better. But what are people like us supposed to do until 2014?
(END VIDEOTAPE)
GOODMAN: The union marchers here, Richard, are trying in part to keep people like Mr. Garcia -- future Mr. Garcias away from the food bank. They're trying to keep them employed, save the jobs. Richard?
QUEST: Al Goodman with that report and with the demonstrators tonight in Madrid.
So, it's an evening of economics, in Greece with a government, in Spain with a march, and in Washington, with the Fed chairman speaking now.
BEN BERNANKE, CHAIRMAN, US FEDERAL RESERVE: After a thorough discussion of those views and of the ongoing uncertainty and risks surrounding the outlook, the FOMC, as I mentioned, maintained its collective judgment that economic conditions are likely to warrant exceptionally low levels to the federal funds rate, at least through late 2014, and it agreed to provide further support to the economy by continuing the maturity extension program.
The committee is prepared to take further action as appropriate to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability. Thank you. I'll be glad to take your questions.
STEVE LIESMAN, CNBC CORRESPONDENT: Mr. Chairman, looking back on the last four years of Fed policy, I think it's probably fair to say it's been bold, and yet at the same time, halting. You did QE1, and then you stopped. Then you did QE2. You did Operation Twist and you told us it was going to end in June, now you've extended it.
How would you respond if, several years from now, a young MIT graduate student came forward and said, "You know what the problem with Fed policy was during this period is it was too incremental," and that the reason why the economy underperformed was because of that incrementalism. And what do you think the dangers are right now that today's action is also too incremental?
BERNANKE: Well, of course we cut the federal funds rate in a continuous fashion until December of 2008, and since then, we've been operating with nonstandard monetary tools, including asset purchases and extension of maturities.
By their nature, these tend to be lumpy. We haven't done them in a continuous way. But our view of the effects of these programs on the economy is that the total stock of outstanding securities in our portfolio is what determines the level of accommodation that the economy's receiving.
So, in that respect, it wouldn't be really a start and stop. Rather, whenever we have stopped purchasing the level of accommodation that was already in the system remains there until conditions warrant further action.
Now, underlying all this, of course, is the fact that the outlook has changed.
QUEST: Ben Bernanke, now answering questions. And you heard the important bit, that the FOMC considers -- obviously the extension of the maturities program, further action if necessary, and slower growth.
Joining us now from the University of Chicago, Professor John Cochrane, professor at the Booth Business School. Professor, good to have you with us. First of all, that question that was just asked really goes to the nerve of the Fed's policy, doesn't it? A little bit here, a little bit there, and you do wonder whether and when they'll put their hands around and throttle instead.
JOHN COCHRANE, PROFESSOR, UNIVERSITY OF CHICAGO BOOTH SCHOOL OF BUSINESS: Well, I'd say it's -- I would almost side with Bernanke on that. It's a lot here and a lot there. It's a trillion here and a trillion there.
And the real question of the Fed -- that question was asked was why aren't you doing more? Really, the Fed is almost powerless right now, and that's the real question to ask him.
QUEST: OK. The Fed is powerless, so it comes up with this Operation Twist, which I've been using my little prop to try and explain the -- $400 billion to try and bring down the yield curve. But -- and yes, if you look at the yield curve, it has come down 2 or 3 percentage points. But that is largely as a result of other factors, as well as Twist, such as a eurozone crisis --
COCHRANE: Yes.
QUEST: And a -- a flight to quality of US treasuries.
COCHRANE: Yes, exactly. The reason the rates are coming down is because everyone in Europe, for the moment, wants to buy US bonds. They may change their mind at some point.
But let's ask the question: what is the problem with the US economy? We're growing slowly. Employment is awful. But is that because long-term interest rates are too high? Long-term interest rates are incredibly low already. That just doesn't strike me like the central problem with the US economy right now.
QUEST: So, answer your own question, professor. What is the problem with the US economy right now?
COCHRANE: Well, we've got lots of problems, just like Spain and Greece have lots of problems. But they really don't involve monetary policy. When you think about this Operation Twist, the diagnosis there is that the central problem with the American economy is that the treasury issued too much long-term debt and the Fed's going to buy it up again.
No, we have the same problems other people have. We have sand in the gears, regulation, taxes, deficits. All that sort of stuff that, really, the Fed doesn't have anything to do with.
QUEST: Right, but the Fed may not have anything to do with it, but -- like it, lump it, or not, the Fed is the only game in town that can pretty much unilaterally deal with these problems without the gridlock that a divided government on Capitol Hill and the White House face.
COCHRANE: No, but the Fed can't deal with the problem. The central problems, the fiscal problems, the regulatory problems, the tax problems, those are problems the Fed can't do anything about.
Instead, you're sort of rearranging the maturity structure of government debt. That's sort of like taking away your green M&Ms, giving you red M&Ms and thinking that's going to help your diet.
QUEST: So --
COCHRANE: It's not going to have anything to do with stimulus --
QUEST: Right, right --
COCHRANE: But there is a danger in what they're doing.
QUEST: Right, so would -- you would've --
COCHRANE: Richard?
QUEST: No, no, no, no! I apologize for interrupting you professor. So, you would agree, then, that Mario Draghi and Ben Bernanke are right when they say they can only do so much, and actually, the real work has to be done elsewhere?
COCHRANE: Absolutely. And I think Bernanke -- if anything should be even more modest. He should be saying, "Look, guys, don't count on us. We don't have the tools to do what you want. You've got to get the house in order, here."
QUEST: Professor, thank you very much indeed for joining us. We appreciate you tonight. It'll be interesting to know -- you can send me an e-mail -- whether you would have been able to answer our Currency Conundrum tonight. Here's a great little one, just what we heard, this one coming up.
There are US silver $5 certificates that were introduced in the late 1890s, and they were not a success. Our question: why did these certificates not catch on? Was it because they were difficult to print, the notes were tainted with controversy, or the public hoarded them incorrectly, believing they were worth more than their face value? Those are your options. We'll have the answer for you later in the program..
the Euro gained ground against the dollar second straight session. It's at $1.27. Cable's unchanged. Those are the rates --
(RINGS BELL)
QUEST: -- this is the break.
(COMMERCIAL BREAK)
QUEST: They rewrote the rule book with Napster and helped Facebook become the world's biggest social network. Now, Sean Parker and Shawn Fanning have a new enterprise online. It's called Airtime. It's a video chat network that lets you share content with friends or complete strangers. I needed to ask more about this.
(BEGIN VIDEOTAPE)
SEAN PARKER, CO-FOUNDER, AIRTIME: It really came from just observing where we'd ended up on the internet after the last couple decades of innovation, and identifying some gaping holes in terms of the way people interact.
And also, just looking at some of the really important trends over the last few years, in terms of live video, the fact that 800 million webcams will ship this year, which is nearly double last year, that we now have a billion people -- close to a billion people on Facebook.
And there's really no great, easy way to video chat with your friends, live video chat with your friends and actually share content with your friends. So, the ability for me to call my fiance --
QUEST: Right.
PARKER: -- well, video call my fiance and actually play a YouTube video and then watch her reaction to it live. This is just something you couldn't do.
QUEST: OK. Now, Shawn Fanning then, I can certainly see the idea of -- we're all used to Skype and other video phone call systems. And I can certainly see that this is a development. But it's the idea of not just talking to your friends, but talking to complete strangers. What's the appeal of that?
SHAWN FANNING, CO-FOUNDER, AIRTIME: Well, I think we all have an interest in growing our network. I think once you leave college, it becomes increasingly more difficult to build new relationships.
And I think what we realized was, having met online through IRC, which is sort of an older chat technology, we realized that there really needs to be a better way to get outside of the social graph and meet -- and interact with people that have similar interests and share experiences.
First, the fact that the modern social web is considered social is a bit -- is a bit difficult to understand when you realize that, ultimately, you're doing everything asynchronously. And with Airtime, what you're doing is, you're able to actually share video content and experience it together, as if you're in the same room.
QUEST: Sean Parker, you mentioned you're a shareholder in Facebook, so I need to ask you, are you content with the way Facebook is progressing, bearing in mind since the IPO, and obviously the embarrassment of the IPO?
PARKER: The Facebook IPO was something that had to happen eventually. There's investors who need liquidity, there's regulatory reasons why it needs to happen. So, the company didn't see it as a -- didn't see -- did not see it as a -- anything other than a necessary evil.
Going public is -- going public is seen by the press as this massive event. It's seen by the world as a historical milestone. And as a result, there was tremendous pressure and expectation placed upon the company.
I think a lot of that expectation was misplaced. It was --
QUEST: Right.
PARKER: -- speculative enthusiasm on the part of retail investors who thought they could get rich quick off of a pop in the value of the stock.
Now, I think we're actually in a good place where that speculative enthusiasm has died down. I think that was bound to happen eventually. It was going to happen either over six months, or it was going to happen over two days.
(END VIDEOTAPE)
(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.
Party leaders in Greece have finally pulled together a coalition government. The prime minister, Antonis Samaras is the only cabinet member to be picked so far. That's amongst equals on his own. Well, the new government's first priorities will be to seek revisions to the European bailout package.
The U.S. Federal Reserve will continue its so-called "Operation Twist" program to bring down long-term interest rates. The plan involves buying up long-term bonds and selling short-term ones at the same time. A few moments ago, the Fed chairman, Ben Bernanke, said monetary policy alone was not going to solve the United States' economic problems.
French police say all of the hostages taken at a bank in southern France have now been freed, and the man who was holding them at gunpoint has been wounded. Police intervened after hours of negotiations. The sources described the gunman as "very agitated." He claimed to be a member of Al Qaeda.
The health of the former Egyptian president, Hosni Mubarak, has reportedly improved and his lawyer says the former leader is off life support. There have been conflicting reports about Mr. Mubarak's health. Meanwhile, the results of Egypt's presidential runoff are expected to be announced on Thursday.
We're waiting to see if British police will try to arrest the founder of WikiLeaks, and if so, how. They say Julian Assange has violated the terms of his bail by seeking political asylum at the Ecuadorian embassy in London. Diplomatic protocol prevents the U.K. authorities from entering foreign embassies. Assange is fighting extradition to Sweden.
(MUSIC PLAYING)
QUEST: The Japanese power company TEPCO has admitted what most people have known all along, that it was not prepared for the crisis of Fukushima after last year's earthquake in Japan. In its final report on the nuclear accident, the power company says there weren't enough measures in place to prevent a disaster taking place.
TEPCO says the events leading up to the crisis were, in their words, "far beyond the company's expectations." Three reactors went into meltdown after the earthquake and subsequent tsunami. It forced tens of thousands of people from their homes.
TEPCO admits it failed to give the public enough information about the incident, although it now denies that it deliberately hid the truth, instead blaming power loss at the plant. The Japanese government's own report into the incident said workers at the plant were poorly trained and could have acted sooner to prevent the meltdown.
More than a year after the disaster and people living near Fukushima plant are still living with the devastation left behind. As Kyung Lah now reports, for some, it has simply been too much to bear.
(BEGIN VIDEO CLIP)
KYUNG LAH, CNN CORRESPONDENT (voice-over): Mikyo Watanabe returned home to the house of his dreams and of his nightmares.
"I can still see it in my eyes," he says. His wife of nearly 40 years, on fire.
"Her legs and this part of her body was still on fire," he says. "I tried to put it out. I burned my hand, but her body was already stiff."
Hamaka Watanabe had doused herself in kerosene and lit herself on fire. Her husband, too far away to react in time.
The Fukushima nuclear disaster changed everything, says Watanabe. The triple meltdown last year rained radiation down in their home and their community, forcing them into an evacuation center. Their jobs, lost. Their home where they raised their three children, only safe for brief visits.
The happy and loving grandmother changed. The joyful person Watanabe met in elementary school became unrecognizable, in a deep depression. Before her suicide, she begged her husband for one last visit to their land.
"We lost everything," he says. "We were forced to evacuate. We lost our jobs. I lost my wife in such a terrible way. I really lost everything. I feel an unspeakable rage. If I don't do something, my wife is just another suicide case."
Who do you blame for this?
"If there was no nuclear accident, we wouldn't have gone through this terrible thing," he says. "This is TEPCO's fault."
In a landmark case, Watanabe is suing TEPCO, the owner of the crippled plant, blaming the utility for his wife's suicide. Watanabe hopes his lawsuit will push TEPCO and the government to stop treating the nuclear accident like it's a natural disaster. Instead, compensating and treating victims for a manmade accident. TEPCO says in a statement to CNN that it will not comment on lawsuits filed against the company.
TEPCO is continuing to clean up the world's worst nuclear disaster in 25 years, working with the government to decontaminate the surrounding communities. It's a massive effort, impacting a huge region, 10 times the size of Manhattan Island, with more than 160,000 evacuees. Acre by acre, crews bag soil contaminated with radiation.
LAH: This is hardly a sign of hope. Evacuees have no real timeline, no real answers as to when it'll ever be safe to live here again. That sense of hopelessness is what Watanabe says drove his wife to commit suicide. He and his attorney believe what happened to her is just the tip of the iceberg.
LAH (voice-over): Watanabe's case is very symbolic, says his attorney. All of Fukushima feels the same way, their despair and their anger that they have no foreseeable future stands behind this case.
There have been a dozen high-profile suicides among evacuees since the nuclear disaster, but no one is officially keeping track of how many evacuees are killing themselves or how many families are struggling with this loss.
Watanabe continues to visit his home at least twice a week, walking amid memories and filled with regret. He refuses to carry one more, that his wife's suicide is ignored -- Kyung Lah, CNN, Kawamata, Japan.
(END VIDEO CLIP)
QUEST: And we'll be back.
(COMMERCIAL BREAK)
QUEST: This week's "Business Traveller" review and Air New Zealand has named its new incoming chief executive. He is Christopher Luxon, and he will pilot the company from December when the current CEO, Rob Fyfe steps down. He comes from within Air New Zealand ranks, holding the title of group general manager international at the airline.
The incoming chief has some very big shoes to fill. Rob Fyfe has achieved something of rock star chief exec status in the airline business. It's his personal touch. It can be seen in just about every aspect of Air New Zealand, which is a relatively small carrier that punches way beyond its weight. Ayesha Durgahee got to see Rob Fyfe in action at London's Heathrow Airport.
(BEGIN VIDEO CLIP)
AYESHA DURGAHEE, CNN CORRESPONDENT (voice-over): It's not every day you get your boarding pass checked by the head of the airline you're flying with. Rob Fyfe has always had a hands-on approach as chief executive of Air New Zealand, from personally answer customer questions on Facebook to taking part in the safety demonstration videos.
RICHARD SIMMONS, FITNESS GURU: Safety hazards and so the captain says let's kick butt.
ROB FYFE, OUTGOING CEO, AIR NEW ZEALAND: For me it's about expressing your personality. So many CEOs, so many companies try to be very buttoned down and very serious and very corporate. We're trying to be different. We're actually trying to be very human. Ever since about the end of the year (inaudible) fun. I'm very creative by nature, entrepreneurial, I love innovation.
DURGAHEE: And you're going to be stepping down at the end of the year. Why have you decided to resign?
FYFE: I've got some really good, talented people on my team. And if I don't create space for them to grow, then I'll lose them and they'll go somewhere else.
A lot of our innovation is in premium economy and economy, because we're predominantly a luxury airline. Interestingly, when we looked for a product, we couldn't find a decent product that we liked on the market, so we ended up designing this ourselves.
DURGAHEE (voice-over): It was right at the back of the plane, though, that was a top priority for Fyfe.
FYFE: I gave my team the challenge of saying I want people to be able to lie down in economy. You can't have any more space for their seat. So we've created what we call the Sky Couch (ph).
DURGAHEE: You want to lie there, then?
FYFE: Yes. Yes, sure.
So this is almost like another class of travel. So it allows us the flexibility. We can sell these as three normal seats. We can sell them as a Sky Couch (ph). So we can flex the proposition to reflect the level of demand.
It's a far, far more efficient way of running an airline than creating more (inaudible) cabins and then finding you don't have enough demand for what one cabin you're upgrading people or you've got too much demand, for example.
DURGAHEE: And has that been a problem since 2008, where the financial crisis but there has been inconsistent demand?
FYFE: It has been and it's -- once you've configured an aircraft, you're stuck with it, really. So it was part of our challenge to say how do we create the flexibility to reflect different demand cycles, different times of the year.
You know, we get different demand at peak times versus off-peak times and so on. And this is -- yes, we're really thrilled with it. It's one of the innovations I'm most proud of with my time at the airline.
DURGAHEE (voice-over): For making business class even wider and longer, to reinventing premium economy and enabling the unthinkable, lying down in economy, every seat on the aircraft has had a revamp.
FYFE: Have a look in here and (inaudible).
DURGAHEE: Wow!
FYFE: A really simple idea.
DURGAHEE (voice-over): Ayesha Durgahee, CNN, London.
(END VIDEO CLIP)
QUEST: Well, it's not every day that you see that. Now on the plane, particularly from the chief executive.
Jenny Harrison is with us at the World Weather Center. You're more of a front-of-the-plane woman, aren't you?
JENNY HARRISON, CNN METEOROLOGIST: Well, it has to be said, I do like to be up there, yes, Richard, as close to the pilot as possible. Now then, weather --
(LAUGHTER)
HARRISON: Yes, well, it's assumed to be the safest place to be.
Weather wise, you have got some more rain heading in, no surprise there. I hear you say, but really it's the heat in the eastern Europe that we're still talking about. You can see here this is a temperature trend for the next couple days. So what it shows you is where the temperature's going to cool off and where it is actually warm and, in fact, above average. That's indicated by that shading there.
So and towards the northwest, bit a clue really that there's another system coming in. This is it. So not only, of course, bringing cooler air, but also the cloud and the usual round of rain showers.
And meanwhile across central and eastern Europe, quite a lot of thunderstorms in the last few hours, particularly impacting Germany, that whole system heading of course towards Poland there. And then look at these thunderstorms that have been erupting the last few hours, pushing up into the southwest U.K. and again kind of making a beeline for Wales, where we have already seen quite a bit of flooding in the last week or so.
One system moving eastwards, very slow moving, that system, across eastern Europe, still very warm across the south and the east. And then this is the next system bringing the rain across much of the northwest. But that system working eastwards, still some pretty strong thunderstorms likely to be embedded within that.
So more strong winds, that damaging hail and, of course, more heavy rain as well from time to time. The winds will be on the increase, too, with that system in the northwest, particularly strong through the English Channel and across southern regions of the U.K. And when it comes to temperatures, have a look at what some cities reach this Wednesday, 34 in Vienna, 34 as well in Budapest, the same in Bucharest and Kiev, 32. So all these temperatures between about 7 and 10 degrees above average.
Now talking about the football Euro 2012, probably quite good that today is a rest day. You can see again the difference in temperatures, northern Poland is where we've seen a lot of cloud and rain showers the last few days, temperatures much lower there now. These are the current temperatures, Wales across into Ukraine, those temperatures are a lot higher.
But there's quite a bit of rain and thunderstorms pushing in through Poland in the next 24 hours. That does mean likely on Thursday we will see some tests for the Czech Republic against Portugal. It'll keep the temperatures down as well. It should be a drier day certainly on Friday for Germany against Greece in Gdansk and then the temperatures, because of that cloud, again, they're going to be on the low side, probably pretty good though for playing a game of football.
But there's the next system pushing into the U.K., very heavy rain, as I say, and those strong, gusty winds, 30 in Vienna, still that warm air in place there, and 34 Celsius in Rome. Meanwhile, the United States, better conditions in the last 24 hours across the Four Corners region, in particular for this.
This is the Hyde Park fire in Colorado. It's now 55 percent contained, but even so, 189 homes have been lost and so far the current cost in fighting this fire alone is $17.2 million, or about 2,000 firefighters currently fighting that blaze. But as I say, conditions are improved, lower temperatures and a bit of an increase in humidity as well. So pretty good news slowly but surely out there, Richard.
QUEST: Many thanks, Jenny Harrison, at the World Weather Center. We look forward to the rain -- not. Many thanks for that.
Now when we come back after the break, if I want a room in a hotel tonight and I want it cheap, there's a new app that claims it will slash the cost. We'll put it to the test and talk to chief execute, Hotel Tonight, after the break.
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QUEST (voice-over): The answer to today's "Currency Conundrum," we asked you why the U.S. silver $5 certificates failed to catch on in 1890s. The options were they were extremely difficult to print, the notes were controversial or the public hoarded them, believing they were worth more.
The answer, controversy, society ladies in Boston thought there was too much heaving bosom in the 1896 notes and they refused to accept them. The 1899 note featured a Sioux Indian chief, and they got that wrong because his headdress was (inaudible) a rival tribe, which didn't go down well, either. Talk about make mistakes even before the Internet age.
Got their chances of heaving bosom on the air. Don't get to say that every day on a business program. Business travel's unpredictable if meetings run late you find yourself stuck in a city far from home without a bed. As Apple would say, there's an app for it. It's called HotelTonight.
Now, as the app suggests, it finds you a room on the very same day with discounts of up to 70 percent. Doesn't necessarily tell you the whole story, because what it does is it opens up hotels for that city at noon of the day.
So before that, you couldn't find in New York until noon Eastern time, Los Angeles, for example, it's still not offering until for another 10 minutes. Joining me now is the chief executive to talk more about this, Sam Shank, the founder of HotelTonight.
This is selling distressed stock on the cheap, (inaudible), sell it cheap.
SAM SHANK, CEO, HOTELTONIGHT: That's right. These rooms are going to go empty, so the hotels work with us to make sure that they can fill them and we bring them great guests through the app.
QUEST: OK. Are you always guaranteed? I mean, you know, if I'm going somewhere, can I rely on being able to find a room in that city? Or am I going to find out, you know, nothing available?
SHANK: We always have stuff at noon. It may sell out if the city's very busy, if it's Super Bowl or the Olympics here. But we are going to have things, great things over the Olympics, always starting at noon.
QUEST: So how do you manage -- because you made a case of going to the hotels and literally doing the deal with them so they put them on yourselves rather than say Priceline or Expedia or hotels.com.
SHANK: That's right. We work with them directly, every day before noon. That's why we launch at noon, is we work to get them to load that inventory and they tell us how much they want to sell it for. They compete against each other and we show the three best deals for each city that day.
QUEST: So you may have 15 or 20 hotels in New York or in Miami, but only the top three get shown?
SHANK: That's right. We want to bring the best deals to you.
QUEST: Which, of course, is very clever because it's from the hotels' point of view, there's an incentive, literally, to race to the bottom.
SHANK: I wouldn't say that. The --
QUEST: Oh, yes, otherwise, they're not going to make it.
SHANK: Well, the other reason that we show only three is that we want to protect the hotel from giving a discount. If the same hotel was on display every day, nobody would book in advance for that hotel. So we rotate the display.
QUEST: This is obviously a fascinating interest, because my director is always -- is already asking me a question to ask you.
Once the first -- one of the first three are sold out, does a fourth one then come in? Or if you don't make the initial cut at 12:00, you're not in?
SHANK: No, it's a queueing system. So the fourth place would get put in as one sells out, and they will keep going until all 20 or 30 are sold out.
QUEST: How many cities do you hope to have on this?
SHANK: We want to have every city in the world --
QUEST: Oh, come on. You've got how many at the moment?
SHANK: We're 43 as of today. We just launched London today.
QUEST: You launched London today, which is why you're in London and talking to us. It's interesting. I'm going to give it a try and I'll give you my honest opinion after I've tried it.
SHANK: Thank you.
QUEST: (Inaudible) indeed --
SHANK: All right.
QUEST: -- for joining us. Many thanks indeed.
We will have our "Profitable Moment" on the twist after the break, QUEST MEANS BUSINESS, good evening.
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QUEST (voice-over): Chubby Checker with "Twist Again," and tonight's "Profitable Moment". The Fed has decided to twist again. The U.S. economy's twisting in the wind and it's clear from the latest Fed that they're also twisting, warning signs flashing, particularly in the job market. There is elevated unemployment in their words.
There's a slowdown in employment growth. Investors may have been disappointed not to see QE3 emerge today to save the day. Some say it's not necessary yet. But in this dual mandate that The Fed has of inflation target and an unemployment, if the job situation does not improve and The Fed says it will concentrate on unemployment, Ben Bernanke's the first to admit monetary policy cannot solve all the problems. It'll take more than a bit of twisting to get the economy back on track. Just as Europe is looking to its central bank for salvation. So when you talk about the Twist, then this may not be The Fed's final hand in this game of stick or twist. The central banks have played their role and once again, it's now back to the politicians.
Twisting along, that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I do hope it's profitable.
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QUEST: The headlines and news coming in to CNN, Egypt's Nile TV is reporting that the final runoff presidential election will be delayed. They're expected on Thursday. There's no word yet on why or indeed when we will get these elections results.
Ahmed Shafiq is the last prime minister to serve under the deposed president, Hosni Mubarak, and Mohammed Morsi, the Muslim Brotherhood candidate, are both claiming victory. Meanwhile, the health of the former Egyptian president, Hosni Mubarak, has reportedly improved. His lawyer says the ex-dictator is now off life support.
Party leaders in Greece have finally pulled together a coalition government. The prime minister, Antonis Samaras, is the only cabinet member who has been selected so far. One of the government's first priorities will be to seek revisions in the European bailout package.
The Federal Reserve will continue "Operation Twist" to bring down long-term interest rates. The plan involves buying up long-term bonds and selling short-term ones.
And French police say all of the hostages taken at a bank in southern France have been freed. The man who was holding them at gunpoint has been wounded.
Those are the news headlines. You are up to date. Now, "AMANPOUR."
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