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Quest Means Business
New York Struggles On; Power Issues; Wall Street Rallies on Upbeat Economic Data; President Obama Resumes Campaigning; American Quest: Political Mood of the Nation; Euro Slips, Pound High; "Lagarde List" Journalist Acquitted; European Markets Up, Athens Down
Aired November 01, 2012 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Tonight, the financial capital struggles. New York getting back to work after Sandy.
The mettle of the markets. Jobs and consumer confidence figures push stocks higher.
And on trial for his tax expose. A Greek journalist says the government should be in the dock.
I'm Richard Quest and, yes, I mean business.
Good evening. As wounded New York struggles back to work, the aftermath of the hurricane is just about everywhere you choose to look. The state has taken much of the brunt of the hurricane, 44 of the people that we now know to have died across the United States are from New York.
Half of the city's subway lines are spluttering back into action in some shape, form, or description. This video shows just how badly the flooding was only yesterday. Governor Andrew Cuomo says public transport travel will be free of charge until Friday night, including buses and commuter rail lines.
And these are live pictures to take the pressure -- the idea is take the pressure off New York's near gridlocked streets and roads, avenues and lanes. With some of the city's major routes closed, too many cars are trying to squeeze down too few roads.
On top of that, drivers are trying to contend with the traffic light system, which isn't working effectively or efficiently, and it makes some junctions a dangerous free-for-all. That's Columbus Circle that you're looking at.
There are long lines at fuel stations, and not all those queuing are motorists. Around a million and a half New Yorkers were without power. Many are using gasoline to fuel electricity generators.
Despite the obstacles, New Yorkers are returning to work. Demand for transport is high, as you can see from the lines of people waiting for buses in Brooklyn. The queue actually stretched right around two sides of the Barclays Center stadium.
Our correspondent, CNN's Rob Marciano, is in Manhattan and found that commuters have had to come up with new ways of getting to the office.
(BEGIN VIDEOTAPE)
ROB MARCIANO, AMS METEOROLOGIST: Day three of the lower Manhattan blackout and mass transit situation, which has the subway shut down everywhere from 34th Street south, and that would include the Brooklyn Bridge/City Hall station, where the green lines converge down here.
On the other side of lower Manhattan, you've got the red lines into the Wall Street area. You also have some municipality buildings, the court houses here, they're shut down. This is the New York City municipal building, which is pretty much the heartbeat of the city, City Hall over there, none of which has any sort of real power.
And then you have the transportation issue. Yesterday, we had huge, huge congestion because of all the cars that were trying to get around town because the subways were shut down. Well, you have to have a carpool of three people or more, so the traffic from the Brooklyn Bridge, not too bad.
But the pedestrian traffic, it's streaming in pretty good. We caught up with a number of folks who are making the trip today by foot. Here's what they had to say.
UNIDENTIFIED FEMALE: Today, everybody's trying to get in and get back to the normal thing.
MARCIANO: Do you normally walk over the Brooklyn Bridge to go to work?
UNIDENTIFIED FEMALE: No, I don't, but this morning, I thought that was my best bet.
UNIDENTIFIED MALE: Normally an R train, 35 minutes door-to-door. So, I'm expecting a 2 hour work. But it's a beautiful day out.
MARCIANO: So, you're okay with the walk today.
UNIDENTIFIED MALE: Absolutely. I'm worried about getting home. After a long day of work, trying to get back home. But hopefully, trains and buses start working. So, we'll do it.
UNIDENTIFIED FEMALE: Started off walking the bridge. I hope to find a bus on the other side, and then the subway at midtown. That's the plan. I don't know how long it'll take, but that's the plan.
MARCIANO: I cool, crisp, sunny day, so for the most part, New Yorkers in good spirits about the walking commute. But if this goes on for another week, that situation may change. The city slowly starting to come back to life. Tourists and workers getting their morning and afternoon snacks.
But the power situation's still an issue here, especially in the mid- to-high-rise buildings, where you have older or immobile people that have to go up and down those stairs to get supplies.
And also the temperatures are dropping this weekend. So, survival through the cold, with temperatures near freezing at night is going to be an issue.
Rob Marciano reporting from lower Manhattan. Back to you.
(END VIDEOTAPE)
QUEST: In all of this, we have to remember that New York is the world's financial capital. It is the center, if you like, of global markets. New York's governor says power should be restored in Manhattan by Saturday.
The energy company, ConEd, said it could be a week or more before everyone is back on the grid. Vast parts of the city have now been without electricity for four days. You can see here -- just look at that -- there we are. That's the moment when the lights went out.
It's quite dramatic, particularly if you bear in mind the circumstances and the way in which there was the explosion at the East Village transformation -- transformer system.
Seth Guikema is an assistant professor at Johns Hopkins University, geography and environmental engineering department, and in many ways predicted that Sandy would knock out power for 10 million people across the state. He joins me now.
I realize, of course, there's no "I told you so" about this, and you take no pleasure in having predicted such devastation, in a sense, but you're not surprised. And what I need to understand from you, if it's all so predictable, why did anybody let it happen?
SETH GUIKEMA, JOHNS HOPKINS UNIVERSITY: Well, once the storm's coming, you can't do that much to keep the power from going out. You can prepare to restore power as quickly as possible, and that's the goal of our model is to help people do that.
But once the storm's coming, you have the system you have, and the storm's going to impact it, and you're going to --
QUEST: Right.
GUIKEMA: -- people losing power.
QUEST: So, I suppose -- sorry, forgive my ill-phrased question. What I meant was, this has been an accident waiting to happen, if I understand your point of view correctly. A lack of investment, an aging infrastructure, global warming. We can put any ingredient into this cake that we like, but once it's baked, this is the result.
GUIKEMA: Well, we certainly have -- potentially had a lack of investment in our infrastructure, but there's really cost and benefits to everything.
And the utilities are struggling with balancing those costs and benefits as best they can when there's an awful lot of uncertainty about what's going to happen in the future, potentially with global warming and other things that may or may not be influencing the frequency and intensity of these sorts of storms.
QUEST: If we look at your forecast that we received that you kindly sent us, it shows that the middle bit in the colored -- it was the very colorful bit, is the bit the -- the fraction without power. You knew this was going to be as grim as it's turned out to be.
GUIKEMA: Well, we were estimating about 10 million people without power as the storm was off the coast of North Carolina. Certainly, there's uncertainty in those estimates. There's uncertainty there. But yes, we had a pretty good inclination up front that this was going to be a major event.
QUEST: All right. So, if we're not to just take this as an academic exercise, I need you to explain to me what should be done so that the next time there's a storm, it may be 10, 15 years down the way, of comparable size, we don't end up with 10 million or worse in a lower storm.
GUIKEMA: Well, it really depends on how much we're willing to invest in our infrastructure. Yes, we can go through in those areas with lots of trees and above-ground line and bury the tree -- the power lines. We can go through and trim the trees. It all costs a lot of money.
There's very much a cost-benefit analysis that each utility is going to have to do on a case-specific basis and decided, does it make sense for them?
QUEST: OK. So, let me drill right down, finally. Are you saying that, bearing in mind that cost-benefit analysis, we might be better off to accept the 10 million without power for a limited length of time? Is that really what it might come down to?
GUIKEMA: Well, it's a question of who bears those costs? The utilities don't bear the full cost of the power outage. They bear the cost of the restoration and the lost power provided. They don't bear the full societal cost of these prolonged outages.
So, there's a question of what can the government do to help incentivize, perhaps, more investment in the energy infrastructure when we know that those utilities aren't internalizing all of those costs.
QUEST: Thank you for talking to us, and interesting surveys.
GUIKEMA: You're welcome.
QUEST: And we'll talk more about this as we look at the questions of what to be done next. I thank you for joining us tonight from Washington.
Now, after the break, the Dow jumps on jobs 130 points. Bearing in mind that the US and world financial capital is hamstrung and almost paralyzed, but the Dow still manages to go up 130 points. We'll find out, it's all about jobs. QUEST MEANS BUSINESS.
And also, we've got those undecideds.
(BEGIN VIDEO CLIP)
PATRICK BROWER, VOTED FOR BOTH PARTIES: They will vote, absolutely. They're not apathetic.
(END VIDEO CLIP)
QUEST: The undecideds, the apathetic, and me on a horse. American Quest.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: The US market opened to a stack of good data. First-time jobless claims are down. Consumer confidence is up. The ADP number was encouraging. And Wall Street likes what it sees, even though we've still got 24 hours before we get the official job numbers.
I'm going into all of this -- I'm stealing Alison Kosik's thunder because I don't want you to tell me the numbers, Alison. I want you --
ALISON KOSIK, CNN CORRESPONDENT: No numbers.
QUEST: I -- well, the market, maybe, but not the jobs. I want you to tell me why Wall Street likes what it sees from these numbers.
KOSIK: Well, first of all, the number for ADP, it seems to be good enough for a rally. Remember, this rally that you're seeing with the Dow up 129 points, it is on low volume. You'll also seeing a lot of pent-up demand, because remember, the stocks have been closed, the market has been closed for much of this week. But it's a rally nonetheless.
Besides jobs, there's another report that came out today, consumer confidence, and this number hit a four-year high. And the reason you're seeing the market rally on this number is because Americans seem to be more optimistic about the very thing that's dragging down the economy.
They're more confident about the labor market, and they seem to be in good spirits as they head toward the holiday season. True, it is in sharp contrast to how the business world feels, but it seems to be enough to keep the rally going, at least for today.
QUEST: We have an enormous number of conflicting strands, here. You have a terrible earnings season, or at least not a good earnings season.
KOSIK: Right.
QUEST: You've got rising consumer confidence. You do have consumer spending holding up, if you look, overall. You've then got jobs. Does anybody really -- and that GDP third quarter number of 2 percent. Where does it leave us overall, do you think?
KOSIK: It leaves us wondering what the heck is going on with the economy? What is the main driver for the economy? And that's the problem, there really is no leader in this economy. At first we thought maybe housing was leading the way, but maybe not. Manufacturing is definitely not doing. Consumer spending isn't really doing it, either.
So, you're not seeing an economy really operate full-throttle at this point. You're seeing all of these engines sort of starting to turn in the right direction. They're just not turning fast enough where you're seeing the economy improve faster. But the good thing is is that they are moving in the right direction, Richard.
QUEST: Care to have a guess -- good, bad, or indifferent -- on tomorrow's jobs number?
KOSIK: I'd say good. I'd say good.
QUEST: All right. Good.
KOSIK: Positive. Glass half full.
QUEST: I promise you -- I promise you we won't throw that back at you tomorrow. Alison Kosik --
KOSIK: OK.
QUEST: -- who's in New York.
Barack Obama will hit three battleground states today in his final push to remain in the White House. He stopped in Wisconsin. He vowed to pursue a common sense agenda and accused his rival, Mitt Romney, of disguising old ideas as innovations.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now, in the closing weeks of this campaign, Governor Romney has been using all his talents as a salesman to dress up these very same policies that failed our country so badly. The very same policies we've been cleaning up after for the past four years. And he is offering them up as change.
(LAUGHTER)
OBAMA: He's saying he's the candidate of change. Well, let me tell you, Wisconsin, we know what change looks like.
(CROWD CHEERS)
OBAMA: And what the governor is offering sure ain't change.
(END VIDEO CLIP)
QUEST: His Republican challenger spent the day in Virginia, where he'd canceled appearances earlier in the week because of the storm. There, he hammered his rival for suggesting he'd appoint a secretary of business.
(BEGIN VIDEO CLIP)
MITT ROMNEY (R), US PRESIDENTIAL CANDIDATE: We don't need a secretary of business to understand business, we need a president who understands business, and I do.
(CROWD CHEERS)
ROMNEY: And that's why I'll be able to get this economy going.
(END VIDEO CLIP)
QUEST: There's not only the candidates who've been touring. I've been doing my own tour of America, traveling by the California Zephyr and gauging the political mood in the leads of the election.
On American Quest today, we're in the frontier state of Colorado. Here, it's the independent and the undecided voters who could make all the difference. So much so, that Barack Obama will be campaigning there later today. It's day two, three, and beyond of our American Quest.
(BEGIN VIDEOTAPE)
(TRAIN WHISTLE)
QUEST (voice-over): We have traveled through the night. In the dark hours, Nebraska came and went. And now, Colorado calls. The California Zephyr is winding through the Rockies, where we seek the first snows of winter.
UNIDENTIFIED MALE: Hello, Richard. Welcome to Grand View, Colorado.
QUEST (on camera): Thank you, Paul. Not much of a stop.
QUEST (voice-over): In this state, which is firmly described as "battleground." Within hours of arriving at the C Lazy U Guest Ranch, I swapped the iron horse of the railway for the saddleback of the real thing.
QUEST (on camera): Is Colorado a philosophy, in terms of its independence and the way people think?
CONNIE DORSEY, GENERAL MANAGER, C LAZY U GUEST RANCH: Oh, they're -- yes, they're very open-minded and independent-type people. They don't necessarily get into that groove where there's -- everyone thinks a like. Absolutely not. Totally -- totally independent people in this state.
QUEST (voice-over): To discuss Colorado's election, I've invited three local political experts.
WILLIAM HAMILTON, CONSERVATIVE COLUMNIST: What's unique about this election is that it's going to depend on the undecideds. And Felicia and I think it's about 5 percent right now.
FELICIA MUFTIC, LIBERAL COLUMNIST: There is also a huge factor inherent in the Hispanic vote. It has gotten larger over the years, and particularly this year. About 20 percent of the electorate is Hispanic, that is leaning heavily, probably over 70 percent, for Obama.
QUEST (on camera): But why at this late -- relatively late stage, when the issues are relatively clarified, do you think that people are undecided?
BROWER: Well, I think it's not real obvious. In some cases, both candidates seem to be -- emphasizing the economy. For Coloradans, I think the economy is definitely hurting, but not for all of them.
HAMILTON: I think they're looking for someone that can -- they're tired of all this -- partisanship and these ugly TV ads. They're looking for someone that can pull everybody together.
QUEST: So, they will take part, those undecided, come crunch day?
BROWER: They will vote. Absolutely. They're not apathetic.
QUEST: So, what's their deciding factor? What are they deciding upon the basis?
HAMILTON: This is where the ground game is so important, getting out the vote. Which side can turn out their base plus 51 percent of the 6 percent.
QUEST: So, what are the undecideds looking for? What do they want?
MUFTIC: The new America poll that was taken show that they will not vote for the challenger. It's going to be harder. They have to be convinced that the challenger will do a better job.
QUEST: Ooh, hang on. That makes it very difficult for Romney.
HAMILTON: I suppose.
QUEST: If that becomes the litmus test.
HAMILTON: But with respect to Felicia, if you start back with Samuel Labelle (ph) in the 50s tracking why certain precincts voted certain ways, you'll find that the undecideds break toward the challenger. They don't vote for the incumbent.
QUEST: You've both just given me a statistic that says exactly the opposite.
BROWER: Right.
QUEST: You say they'll go for the challenger, you say they go for the incumbent.
BROWER: I say they're going to go for the guy they like the most. Period.
QUEST: I want you to all forget the polls. All right? Enough polls. I want your gut feeling.
HAMILTON: Well, I think Romney will win.
MUFTIC: My gut feeling is that Obama's going to win by one percent.
BROWER: My gut feeling is that Colorado is extremely independent in the way most voters think.
QUEST: The undecided.
BROWER: Yes.
QUEST (voice-over): We're going in circles, like this tight election. So, enough politics. Before I leave, I must enjoy a Colorado sunrise. Restored, invigorated, enthused.
Back to the tracks of the California Zephyr. Good-bye, Grand V, Colorado. Next stop on our American Quest, Utah. As we head towards the Republican-leaning state of Utah, I can restore my vigor and vim, looking at the canyons of Colorado passing by.
(END VIDEOTAPE)
QUEST: And more of that American Quest tomorrow.
Some breaking news to bring you. It's now being reported that the journalist who published the names of more than 2,000 Greek people with Swiss bank accounts has been acquitted on Thursday of breaking data privacy laws.
According the judge, Maria Volika, Reuters reports, "The court has ruled that you are innocent." It roused international concern. In his defense, Vaxevanis had argued that politicians were hiding the truth and protecting the untouchable, so he published the names instead. We'll have more on that in a moment.
A Currency Conundrum for you. This one's more of a currency connection. I'm on my way to Utah on American Quest. It may follow Colorado, but what does Colorado hope to follow Utah? Introducing a separate currency to its state? Legalizing gold and silver coins? Or returning to the gold standard? The answer later in the program.
The euro's slipping against the dollar because of more uncertainty. Sterling is hitting a two-week high and has eased back. And the Japanese yen is lower. Those are the rates --
(RINGS BELL)
QUEST: -- this is the break.
(COMMERCIAL BREAK)
QUEST: So, the Greek journalist who published the names of Greek banks has -- or Greeks with Swiss bank accounts has been acquitted of breach of privacy. In the last few minutes, the court ruled Costas Vaxevanis is innocent.
Now, this is not just about whether he's guilty or not. He claims officials knew about the list two years ago, when it was given to them by the then-French finance minister, Christine Lagarde. Let's talk about it with Diana Magnay.
Di, the -- OK, so he's acquitted. Tell me the circumstances of the acquittal. Is this a judgment on the legal bits, really, if you like? Or is the court saying something more?
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: Well, the court is simply saying that the charge that was brought against him after publishing that list, that he'd abused personal data and that that wasn't in the public interest has been overruled.
And really, to acquit him at this time is pretty much the response that you would want to see by the public, also who felt that to pull this journalist, effectively, before the dock with a kind of ungainly speed when it's not just Vaxevanis himself who alleges it.
But when it's known that that list has sat with the Finance Ministry and with ministry officials for two years, now, and nothing was done about it, it's certainly been a sense amongst the public in this country that Vaxevanis deserves to get off. And that is obviously what the court ruled in this instance, also, Richard.
QUEST: So, is this a -- is this a black eye for the prosecution, obviously yes. But also for the government, which might have had a hand in it in the first place?
MAGNAY: Also for the government, and that is why Mr. Vaxevanis felt he was justified, felt that it was in the public interest to put this list that he managed to get his hands on out there, because it has been discussed for a long time who might the names be?
Effectively, he dumped the names out there, these 2,000 names, and you could argue, Richard, that he should have done more due diligence on it as a journalist. He should have investigated whether those names were actual -- actually tax dodgers or not, rather than just putting it out there in a kind of WikiLeaks-style fashion.
But that's the path that he chose to take, and his justification is that it is in the public interest that these names are out there.
QUEST: So, just to full circle this. We know that -- I've obviously with Super Storm Sandy and the US election, we're apt to forget where we stand with Greek bailouts and troikas, and now government being lambasted for names. Where do we stand, Diana, in a word?
MAGNAY: Well, let's just talk about the Athens Stock Exchange, lost 5 percent today because of uncertainty about the status of those talks. You've got two days of general strike next week, the coalition looking very, very shaky. And they have to push that bill through parliament next week, or it's all over for Greece.
QUEST: I guess you're not leaving Greece anytime soon. Diana Magnay, who is our correspondent in Athens for us tonight.
Those -- the Athens market down very sharply, continuing the falls. European shares were actually higher over all. The were pepped up by UK companies and strong earnings reports.
Lloyds Bank wasn't one of them. They made a loss, a third quarter loss, after it put aside an extra $1.6 billion, compensating customers for missold payment protection insurance. That's another sewer, a cesspit of issues.
The FTSE and the DAX are both up more than 1.2 percent. A different story in Athens, as Di was alluding to. The fears it won't enact the austerity measures needed to get the EU aid. This is 5 percent in one day after 10 percent that we'd already seen off the market. Factoring it all together, you start to see how Athens is in deep trouble, the market is, at the moment.
Coming up next, dark, damp, but not defeated. The Big Apple's small businesses defy the super storm. One restaurant, the owner is with me after the break, and we'll talk about how she's cooking breakfast.
(RINGS BELL)
(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.
(BEGIN VIDEO CLIP)
QUEST (voice-over): The number of people who died from the storm in the northeast U.S. has risen to 88. The new number comes after New York State reported 44 deaths. Two deaths have been reported in Canada and 67 in the Caribbean. The total is 157.
Staten Island authorities have confirmed that they've found the bodies of two young boys that were swept away from their mother by the storm's surge.
The images, new at the moment, show the extent of the damage in New Jersey. It's the town of Seaside Heights, and you can see the iconic boardwalk has almost totally been wiped out. Most of the waterfront rides are gone. This is what's left of the roller coaster, a twisted mass submerged now in the Atlantic.
Terrifying: the sounds of shelling in the Syrian province of Daraa. The opposition is accusing the regime of using vacuum and cluster bombs in the urban areas. Military experts say vacuum bombs, which are also known as thermobaric explosives, are more destructive than conventional weapons because they produce a longer blast wave. Activists say 103 people were killed today across Syria.
There's been a road accident in Riyadh in Saudi Arabia, which has killed 22 people and injured more than 100 more. Officials say a fuel truck hit a bridge at a busy intersection and that caused a gas leak. The tanker then burst into flames.
In the last hour, the Greek journalist who was on trial for publishing the names of Greeks with Swiss bank accounts has been acquitted. The court ruled Kostas Vaxevanis is innocent of the charges that he broke privacy laws. The journalist claims officials have had the names for two years and failed to check on their tax affairs. The case struck a nerve in Greece where tax evasion is rife.
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(END VIDEO CLIP)
QUEST: We are focusing in our program today about how New York is doing its best to get back up and running. Earlier, we talked about the big picture, the financial industry. Now small business is also trying to start up. It's not easy. More than a million customers are still without power across the state.
Basic necessities, food for instance, hard to find. And stores that are open have no lights. One business is a Sicilian restaurant called Eolo, has so far been able to stay open in Chelsea -- that's right, in the heart of the blackout zone. It's owned by Melissa Muller, and she joins me from our New York studios.
Melissa, Eolo, I'm reading, it's actually, according to your description of Eolo, it's all about the myth of wind, which perhaps -- I mean, one hates to sort of --
(LAUGHTER)
QUEST: -- draw humor out of this, but rather ironic that you've got a restaurant all about wind and you've been nearly blown off the map.
MELISSA MULLER, OWNER, EOLO RESTAURANT: No, actually, we haven't been blown off the map. That's what -- that's the advantage of having the wind on our side, actually.
QUEST: Right.
MULLER: But I don't like to put humor on it, either. It's been very difficult situation for our neighborhood. So.
QUEST: So as I look at your website, you've had the Hurricane Sandy's Monday morning breakfast, and you've been doing enormously good work. But tell me what your struggle is like at the moment to run a restaurant.
MULLER: Well, most employees, up till today, most employees couldn't get to work. Some did arrive here, bicycled from Brooklyn yesterday and the day prior. We need to keep all our food on ice in coolers.
Actually, I should specify; it's not all our food. A lot we've had to -- we've had to dispose of. And other food we're able to keep in those coolers. But the actual act of just getting the ice is such a -- so difficult.
(CROSSTALK)
QUEST: OK. Let me ask you, are people grateful that you are at least open; you are at least doing what you can?
MULLER: Of course.
QUEST: You are at least providing that essential service?
MULLER: Yes, the restaurant's actually turned into almost a refuge for those who are looking for not only food or comfort food, but a place to actually just sit and enjoy company rather than a dark apartment. And we're really happy that we've been able to stay open for that reason.
QUEST: Any idea when things will get better for you, power, food, supplies, any idea?
MULLER: Well, my voyage up here today is one of the first trip outside of the -- what we're calling the Dark Zone. So every -- any info that I'm hearing is really just a customer will come in and tell me something.
So I have really no idea. I haven't heard from Con Edison. The most I know is that one person tells me 10 days; another person tells me it'll be two more days. And we're just riding out the storm, so to speak.
QUEST: Melissa, hope to be in New York next week; I shall pop in for a bite -- a bite --
MULLER: Please do, Richard.
QUEST: -- (inaudible).
MULLER: Thank you.
QUEST: Enjoy the taste of the food from the wind.
MULLER: Thank you.
QUEST: Melissa joining me from New York, @RichardQuest is where you can give us your thoughts, if you are a business owner, large or small, in the area affected or you've had similar experiences, @RichardQuest. It's where you and I have a dialogue on what happens on the program and we will read out some of your responses.
One note to bring you, Mayor Michael Bloomberg in New York has endorsed Barack Obama as president or for the next presidency of the United States. He says he's done it on climate issues. That, of course, will be somewhat of a raised eyebrow perhaps, perhaps not. Mayor Bloomberg at some stage has been a Democrat and a Republican and now an independent.
Coming up next. Tokyo's secret weapon against flooding, the ability to suck down the equivalent of a swimming pool in one second flat. (Inaudible) nearly 70 times in the past 10 years. The answer to the "Conundrum" as well, coming up in a moment.
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(COMMERCIAL BREAK)
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(BEGIN VIDEO CLIP)
QUEST (voice-over): The answer to the "Conundrum," what changed as Colorado hoped to follow Utah? The answer, the legalization of gold and silver coins. (Inaudible) currency option last year. More than a dozen states, including Colorado, are now pushing the plan.
(END VIDEO CLIP)
QUEST: The flooding from Sandy was unprecedented. You heard us talk about it earlier in the program and what might have been done to prevent it. Other cities see it far more often. In Japan, 27 typhoons on average bringing gale force winds, but there they have a different system that literally can suck the life out of the disaster in seconds. Alex Zolbert explains.
(BEGIN VIDEO CLIP)
ALEX ZOLBERT, CNN CORRESPONDENT (voice-over): Below these fields on the outskirts of Tokyo, through a door behind a government building sits a remarkable feat of engineering, an elaborate complex and a massive tunnel aimed at preventing widespread flooding in this low-lying area.
Takashi Komiyama explains to us how the system works.
"A tunnel running more than six kilometers or nearly four miles connects five underground shafts that collect water from above."
And how big are these shafts or tanks? They're about 70 meters or about 230 feet deep.
ZOLBERT: To put that into perspective, that's big enough to fit a space shuttle or the body of the Statue of Liberty.
ZOLBERT (voice-over): At the heart of the system are these: four turbines, powered by jet engines, similar to those used on a Boeing 737. When set in motion, they can drain the equivalent of a 25-meter swimming pool in one second, able to funnel water from the tunnel and tanks to a nearby river.
This system cost roughly US$3 billion to construct, and it's been used nearly 70 times over the past 10 years.
ZOLBERT: As you can see, the size of this complex is simply staggering. It is something that few major cities could ever really accommodate underground. The room I'm standing in right now is bigger than a soccer pitch and more than five stories high.
And when we asked Takashi about the flooding in the United States, he recognizes, this system is built to cope with heavy rains, not a storm surge off the ocean.
Still, the idea could help engineers think about what may be possible when it comes to trying to contain Mother Nature -- Alex Zolbert, CNN, Saitama Prefecture, Japan.
(END VIDEO CLIP)
QUEST: Extraordinary.
Jenny Harrison's at the Weather Center. I mean, that's a report that's extraordinary, not Jenny Harrison.
(CROSSTALK)
JENNY HARRISON, CNN METEOROLOGIST: Ah, yes, we get it. We know what you mean.
And now look, talking about heavy rain, it's not just (inaudible) the U.S. or, in that case, across Japan that we were just sitting about and hearing about. But central regions of Europe, the central Med and in particular the southeast, the last few hours have seen a fairly vigorous storm system head its way across these areas.
Look at some of these totals in Croatia in particular, have had some flooding and in many areas along the coast, and also some high wind gusts, 112 kph, rain of 118 millimeters an hour -- millimeters in total. Have a look at these pictures coming out of Italy, because before the storm headed in Croatia, it really did batter some of the coastline.
This is Capri in Italy. But again in Croatia, many of the towns along the coast have been flooded, ferry lines interrupted, big cause of damage because trees came down. One of the towns, Trogir, (inaudible) up on UNESCO's World Heritage site, they had water for 30 centimeters in the street. So this storm system has caused a few problems.
Let me show you, though, where it is heading next, because it is pushing out of the picture and then making way for this very large area of low pressure. This is going to continue to bring some brisk winds, scattered amounts of rain, varying amounts. And with the cold air, some snow flurries as well. But look at how this is spreading into western and central areas of Europe.
We could see some heavy rain at times. There are some warnings in place, in particular through northern France and the Low Countries because of that heavy rain, maybe even some damaging hail. And then still in the southeast, as we go into Friday morning, we could actually see a few more problems pushing into western areas of Turkey, just because of the rain and those winds that are coming with it.
So this is just how far the winds will be reaching. The cold air means temperatures below average. We've got some snow to the mountains. Be prepared on Friday, Richard, pretty much all of mainland Europe will see some delays because of those blustery winds. All the airports are showing sort of 45-minute delays.
QUEST: Don't talk about those delays. We thank you for that, Jenny Harrison at the World Weather Center.
And I thank you for joining us today. That is QUEST MEANS BUSINESS. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable. MARKETPLACE EUROPE is next.
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QUEST: From the CNN Center in Atlanta, this is MARKETPLACE EUROPE. I'm Richard Quest. The trade relationship between the United States and European Union is worth several hundred billion dollars each and every year. It is one of the most important in the world. Now as America prepared to go to the polls, we find out what does European business want from the next president, coming up.
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QUEST (voice-over): The American appetite for English pottery that's putting a profitable glaze on exports at this Staffordshire crockery company. And the former minister of state for U.K. trade and investment, Lord Digby Jones.
DIGBY JONES, MINISTER OF STATE FOR TRADE AND INVESTMENT: The deficit has to come down; otherwise the creditors of America just won't be happy in lending it anymore.
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QUEST: The numbers are absolutely staggering. Between them, the E.U. and the U.S. account for just about half of the world's GDP. Now with Europe suffering from the sovereign debt crisis and the U.S. economy perhaps enjoying a bit of a slowdown, there are worries about this transatlantic trade relationship.
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ROSIE TOMKINS, CNN CORRESPONDENT (voice-over): The fires have long been out in these bottle kiln factories, which line the Staffordshire canals. The industry may be recovering, led by potteries like Steelite International, which have picked up the pieces and are firing up a stronger future. The company cases for hotels and restaurants, a market which crashed when the downturn hit in 2008.
KEVIN OAKES, CEO, STEELITE INTERNATIONAL: I think the secret to dealing with any downturn is making pots quickly and deeply enough. And regrettably, we have to make up to those sorts of decisions. And it's inevitable, when you lose 40 percent of your order book overnight.
TOMKINS (voice-over): But those days are gone. Steelite says it's hired back many of those who were let go and it's recorded record turnover in the last two years, largely due to surging demands from America's hospitality sector.
OAKES: This is a very brutal -- it can be a very brutal environment. We're supply cruise liners; we're supplying major casinos in Las Vegas, so some very demanding locations, where the product really has to stand up to the rigors of the industry.
The States is a huge market. But it's a difficult market. It's an expensive market to do business in. And one of the reasons that I believe that we have seen an accelerated growth, certainly since the recession, is that many of our competitors have found it very difficult, very expensive to continue to do business there. And they have pulled out of the market. We have taken exactly the opposite stance.
TOMKINS (voice-over): The company has a booming export market, selling 60 percent of its products to North America. Twenty percent are sold in its domestic market and the rest go all over the world. Despite competition from cheaper manufacturers in Asia, Kevin believes the "Made in England" stamp is a valuable selling point.
OAKES: Certainly there's a lot of kudos (ph) associated with "Made in England," because it underlines the quality. It underlines the service. It underlines, I think, the integrity. Certainly, a customer can go out and buy something that is less costly. But our product last six and 10 times longer. So overall, it's a better long-term investment. That's how we compete.
TOMKINS (voice-over): This factory is turning out half a million pots and plates a week, exporting to 130 countries. It's very labor-intensive work. Each piece goes through 36 pairs of hands. Once mixed, the clay is put into molds and then it's off to the settling station, where the sharp edges are removed and the clay is sponged down.
The crockery then heads into this kiln, burning at nearly 1300 degrees centigrade. Seven and a half hours later, it's ready for glazing and decorating. It's an old-fashioned process, but with the focus on investment and innovation, Steelite hopes it can break the mold and bring large-scale pottery production back to Britain.
OAKES: For too long, we've relied upon service industries. And I think the message has now dawned that this country does need company, such as ours to do great things and making great products that we can sell all around the world. And that will help us come out of this difficult situation that we're in.
TOMKINS (voice-over): And to that end, the company is investing $19 million in the new factory next door, creating jobs, upping capacity and perhaps helping Britain to manufacture and export their recovery.
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QUEST: Cracking the pots and plates perhaps with the English pottery industry.
When we come back after the break, we'll crack the issue of the U.S. election and what European business wants from an American president, Lord Digby Jones is next.
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QUEST: Welcome back to MARKETPLACE EUROPE at the CNN Center. We are less than a week to the U.S. presidential election and the economic policies of the two candidates perhaps couldn't be more different. Mitt Romney with his five-point plan and cutting taxes; Barack Obama with his emphasis on tax increases for the very wealthy.
As for the transatlantic trade relationship, I discussed that with Lord Digby Jones.
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QUEST (voice-over): As the director general of the U.K. employers' organization, the CBI, Lord Digby Jones was the U.K.'s voice of business for six years. He was appointed minister of state for U.K. Trade and Investment in 2007, traveling widely overseas. Now he runs his own business, holds a number of chairmen posts, directorships and advisory roles across British industry.
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JONES: Globalization has meant that leaders, democratically elected leaders, cannot stray beyond certain strictures laid down by global markets, laid down by supply, demand, laid down by deficit, borrowing, laid down by markets and supply.
It's all about within those confines perhaps tweaking it differently or probably just being somebody who's more attractive to the voter. So I'm not too sure that whether it's President Obama or President Romney after a couple of weeks' time, whether really it's going to be much different for the British business scene or, indeed, the American business scene.
QUEST: Except in one respect: at some point the U.S. is going to have to deal with its budget deficit in a way that may be not as draconian or with as much austerity as Europe is having to deal with theirs.
JONES: I mean, every single electorate from the West Coast to California, to the Ural mansions of Russia, from the Arctic Circle to the toe of Sicily, they've all been lied to since the Second World War by presidents, by prime ministers, by chancellors, whoever it may be, of all parties at all times. They've been told they can have it all.
And of course what that means is that they borrow the difference between the spending and the taxation. And now, all over the world, people who actually lend that money have said I haven't got any more to lend you. At the end of the day, there is only so much they can do and that means the deficit has to come down.
Otherwise, the creditors of America just won't be happy in lending it anymore. And it's not a -- it's not a function of whether you're Republican or Democrat. It's a function of whether you want an economy that exists in a globalized world.
QUEST: If we looked at (inaudible) the companies of which you are now involved, how have the feeling the, if you like, the slowdown, the sluggish growth that is now taking place in the U.S. economy, because this is an engine everybody hopes will drag everybody along. But it is a sclerotic engine at best.
JONES: The American consumer has always been important to British exporters of both goods and services. But of course, what we've done in the last few years, we've got after that other big group, economic group, that are getting richer every day, the ones that want to buy our stuff. And that, of course, is Asia.
Also, you know, Latin America, especially Brazil as well. Now because of that, if the American consumer goes off the ball for a few months, we don't like it, but actually we can cope with it in a way we couldn't have coped with it five years, 10 years, 15 years ago.
QUEST: Those awful questions that are impossible to answer, but which I ask anyway, which is more important, the presidential election or the change in power that'll take place in China?
JONES: At any time up to now, I have always said the American president. But it is in the interest in America, it's in the interests of Britain, it's in the interests of the European Union that China's transition of power is seamless, peaceful and that the economic growth story continues.
We want a China that welcomes more and more investment, welcomes more trade and actually welcomes World Trade Organization rules. Now in that respect, who would I take more worry about it? Perhaps someone was elected more than somebody else or chosen more than somebody else.
I think it's actually probably the more important one is now China. I don't think the American people will like that. I think quite a few people will find it a surprise. But in a democratic, capitalistic, developed economy, there is only so much that a Romney or Obama can do different to the other.
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QUEST: Voting is November the 6th. Whoever wins, we can be sure of one thing, that relationship between the E.U. and the U.S. will remain at the heart of both sides of the Atlantic.
And that's MARKETPLACE EUROPE for this week. I'm Richard Quest at the CNN Center. Whatever market you're in, I hope it's profitable. I'll see you next week.
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