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Quest Means Business
Bangladesh Protests; Last Survivor Rescued from Bangladesh Building Collapse Speaks Out; Safety in Garment Industry; Eurozone Financial Crisis; European Markets Mixed; EU-US Trade Talks; Dow Pulling Back; Dollar Above 100 Yen Mark; Home-Grown Production; Ireland Full Steam Ahead
Aired May 13, 2013 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NINA DOS SANTOS, HOST: Tonight, a pledge, a plan, and a protest. Bangladesh's deadly factory collapse brings change.
Sorry for snooping. Bloomberg apologies to its own clients.
And the sound of success, why a deep voice could be the key to a big salary.
Hello, I'm Nina Dos Santos, and this is QUEST MEANS BUSINESS.
Good evening. Tonight, we begin in Bangladesh, where around 100 garment factories are to close indefinitely because staff are refusing to turn up for work. Well, according to the Manufacturers and Exporters Association, the workers do eventually show up, they slam their cards down, and then they leave without giving any reason for doing so.
The death toll from last month's building collapse now stands at more than 100 -- 1,100 people and counting, and this is why these people are protesting. The 19-year-old survivor, Reshma Begum has vowed never to work in the garment industry again. Let me remind you that Reshma is the young woman who was pulled out alive from the rubble after 16 days being buried.
Well, she was the last person living to be found, and authorities over there say that the recovery effort is now winding down. Reshma tells her story for the first time. Leone Lakhani has more from Bangladesh.
(BEGIN VIDEOTAPE)
LEONE LAKHANI, CNN INTERNATIONAL CORRESPONDENT: The nightmare is over, but the wounds are still fresh. Reshma has been treated at this military hospital since Friday, when she was miraculously pulled out of the rubble after a 17-day ordeal. Today, she gave a formal press briefing in which she described some of that ordeal.
RESHMA BEGUM, FACTORY COLLAPSE SURVIVOR (through translator): I could see light. I screamed so that people would know there was a person alive down here. I did not have any food to eat. I had four biscuits and some water in 17 days.
The people who were with me under the rubble died. I heard people screaming. "Save me! Save me!" they screamed, but I couldn't find them. I tried, but I could not find them.
LAKHANI: She said she moved to Dhaka in 2010 -- June of 2010 and only joined this garment factory in April of this year. She said she was working on the third floor when the building collapsed, and she was slowly able to crawl down to the basement.
She said by the time she got there, many of her clothes had shredded off, and she found other clothes there that she changed into. She survived by eating dry food and water that she found along the way in her surroundings.
Now, she says that she earns 4,700 takas a month, which is about $60 US, twice the average, but Reshma says after this ordeal, she's not going back to the garment industry once again.
Leone Lakhani, CNN, Dhaka, Bangladesh.
(END VIDEOTAPE)
DOS SANTOS: As you just heard, there were some retailers who are under mounting pressure to improve working conditions in Bangladesh, and now a few big names, it seems, are eventually leading by example. CNN's Jim Boulden joins us now, live in our London studio with more. Jim?
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: That's right, Nina. Well, this group, a group called Labour Behind the Label, has been pushing for companies to sign up to a fire and safety pledge in Bangladesh. They've been doing this for months and months and months because it became a major effort after that fire last year that killed more than 100 garment workers.
Well, popular European retailer H&M has signed up to this accord on Monday, along with the owner of the chain Zara. Now, they joined previous signatories, like Germany's Tchibo and also the owner of the high-end Tommy Hilfiger and Calvin Klein labels, they're known as PvH, they themselves have been calling for other labels to follow them.
And on late Monday, Labour Behind the Label announced that two more big European retailers are signing up to this. One is Primark, very low- cost company based here in the UK. Also, C&A, they say they will sign up to the binding agreement to look at fire and safety rules for the factories they use in Bangladesh, Nina.
DOS SANTOS: So, it's one step in the right direction, but of course, the bitter irony, Jim, is that we've been here before in Bangladesh. They were discussing this just months ago.
BOULDEN: They were, indeed. I think something has changed. All the labels I talked to, even the pressure groups I talked to, the NGOs, say they think something different.
But don't forget, the last time that workers went on strike, when they came off of strike, they were then forced back into some of these buildings to try to make up the work. So, that is another bitter irony.
For some of these workers, once the strikes are over, they then have to work extra hours in unsafe conditions to make it up so that we can buy our clothes in the West, and that's something we have to see if that will change once these workers go back to work.
DOS SANTOS: The "we" is the ultimate question, isn't it? It comes back time and time again towards the consumer, a lot of people saying, well, if you are buying things at stores where you're buying a t-shirt for $2, you've got to have some pretty serious questions about how could it be made that cheaply?
BOULDEN: But I've talked to some experts who said don't blame the consumers in the West, and I thought, well, you were going to tell me the opposite, and he said, look, nobody in the West is saying I want slave labor to make my clothes. No one ever says that, and we don't need that to happen.
And you hear from time to time if you were to -- even if you were to double the income of some of these workers and make the places safe, the costs would be miniscule for us because you've got trade rule issues as well.
And also, you have other countries who are very willing, unfortunately, to take it away from Bangladesh if they don't clean it up and if the labels move, which is what a lot of NGOs say they don't want to have happen.
DOS SANTOS: Which must be extremely worrying for Bangladesh, it's something like the world's second-largest --
BOULDEN: Yes.
DOS SANTOS: -- textile market in the world. Thanks so much, Jim Boulden, there. Well, after the break here on QUEST MEANS BUSINESS, the numbers are big and the stakes are equally high. We'll take a look at the latest euro group bailout.
(COMMERCIAL BREAK)
DOS SANTOS: Hello and welcome back, you're watching QUEST MEANS BUSINESS on CNN. The eurozone's rescue fund has handed Cyprus nearly $2.6 billion. It's the first chunk of nearly $13 billion worth of EU emergency money destined for Nicosia. Another $1.3 billion worth of the cash infusion is due for this country by the end of June.
On the whole, bailouts will be topping the agenda at a Brussels meeting that's going to be taking place this evening with the euro group finance ministers as they gather there in the Belgian capital. They're trying to avoid any further middles in the eurozone -- muddles, I should say, sorry -- in the eurozone's financial crisis.
Let's remind you that 5 out of the 17 member countries have already had full bailouts or partial bailouts, and right now, many people have their eyes firmly fixed on Slovenia, which they say could be the next one to require emergency assistance.
Well, a short time ago, I spoke with Bob Parker, senior analyst at Credit Suisse. I asked him why there's still life in the eurozone. He's pretty optimistic, but don't get too excited too fast, he says. Take a listen.
(BEGIN VIDEOTAPE)
BOB PARKER, SENIOR ANALYST, CREDIT SUISSE: I think we've still got some way to go in the eurozone economies. We've had companies sitting on record levels of cash --
DOS SANTOS: And that's been going on for years, the last five years, or so.
PARKER: Absolutely. Absolutely.
DOS SANTOS: It's not just the companies, it's the banks as well.
PARKER: Well, we've had deleveraging of the banking system, and actually, I think this is why the American economy will outpace the eurozone economy over at least the next year because the process of recapitalization, repairing the banking system, has actually taken place in the United States. It's still work in progress in Europe.
DOS SANTOS: How confident are you about Europe, though? Because this is the interesting thing: we seem to be getting sort of mixed signals here. The stock markets going from one record high to the next --
PARKER: Correct.
DOS SANTOS: -- tons of money going in there, and already if you speak to any investment advisor, they'll say there's still cash to come into the stock market.
PARKER: Now, there is certainly still a lot of cash sitting on the sidelines.
DOS SANTOS: But the economic fundamentals aren't particularly positive at the moment.
PARKER: Well, I think two factors. I think the first factor is that we are seeing signs of recovery in the German economy. And yes, the eurozone for the first quarter was still in recession, but the recession is getting much less bad. I wouldn't say it's getting better, but certainly the extent of the recession shows signs now of forming a base.
And I think one thing that we might be surprised by is a German-led recovery of the eurozone in the second half of the year and possibly later in the year, those economies which have really been hit hard, like Spain and Italy, could emerge from recession, and we certainly, I think, first quarter of 2014 we could start to see positive growth numbers.
DOS SANTOS: But wouldn't you acknowledge that you're far less pessimistic than many people out there on the markets?
PARKER: I probably am optimistic, and the reason for that is, I think, globally, central banks are maintaining still very easy monetary policies. We saw the action by the ECB last week, we've had action by other central banks, such as the Reserve Bank of Australia.
I think the American quantitative easing program is on track, at least for the next six months. It may be tapered off later in the year, but we've got very easy monetary policies at a time --
DOS SANTOS: Not worried about the dangers that that creates, though?
PARKER: Not at the moment, because they key danger which worries people is obviously the threat to inflation. And yes, we might have a threat to inflation in two to three years' time, but inflation at the moment is actually very muted, indeed.
So, I think another factor is actually the political agenda, coming back to Europe, is clearly changing. We are shifting from an austerity agenda to a growth agenda, and that's been reflected in a whole raft of official statements recently.
DOS SANTOS: OK, so let's translate this into somebody's sort of investment portfolio, so to speak. I was recently in a meeting with the chief executive of one of the world's largest banks, probably like to remain anonymous.
First thing he told me was bonds, don't invest in them for the next three years, because obviously the interest rate perspective is going to change, inflation's going to be hitting people, the bond market is certainly one to be clear of for the moment.
PARKER: Well, I completely agree with that. Now, our exposure's to global bond markets are very low, indeed. And we've got low nominal yields, we've got low, real -- negative real yields in many cases, and I don't see a massive bond market sell-off, but I do think the theme for the next two to three years is that bond yields will be edging up and, consequently, you will generate capital losses on those bonds.
(END VIDEOTAPE)
DOS SANTOS: Well, coming off a strong performance last week, the FTSE 100, as you can see on the chart behind me, managed to extend its winning streak after erasing some earlier losses in the day.
When it comes to the rest of the markets on the continent, as you can see, it's a very different picture, particularly stocks in France and also in Switzerland slipping. Remember that the Swiss benchmark was closed for a day or so last week for a public holiday, so when it has reopened, it has fallen.
Now, President Barack Obama and David Cameron say that trade talks between the United States and the EU could start within months. The US president met with the British prime minister, his counterpart, at the White House on Monday morning.
And Mr. Cameron said, as you can see there, there's a real chance that these talks could get going before they actually meet for the G8 Summit, which will be taking place in Northern Ireland in five weeks' time.
He says that these talks are a precious opportunity that if you put a quantitative figure to that could add about $15 billion to the UK economy, not to mention a whopping $97 billion to US GDP. The rest of the world, he also says, should not be left out, with potential gains standing at around about $132 billion. So, there's plenty for everyone to share around.
Now, clinching a deal, though, some analysts say will be easier said than done because Washington has long been frustrated by the EU's restrictions, particularly on things like farm produce.
So, sticking points are likely to include genetically modified crops, poultry washed in chlorine as well as growth hormones in beef, all of which may be acceptable in the United States, but they're not actually acceptable across the European Union.
Well, Europe has its own beef: the US has yet to lift a ban in place since 1997 on a number of animals, exports, as well as exports of animal products over concerns about mad cow disease, otherwise known as BSE, which you may remember the United Kingdom had big problems with in the 1990s.
Let's get more on the meeting at the White House between Obama and Cameron. Our senior international correspondent Matthew Chance joins us now, live in our London studio, and you've been following events.
This is a huge, huge trade deal. Trade is, of course, important. But the UK isn't necessarily the portal to Europe anymore.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it is at the moment, perhaps, from the US point of view, but it may not be, and the irony has not been lost on people watching this, that David Cameron, as you mentioned there, was in Washington in part to talk about the possibility of these negotiations starting fully on a European-US free trade agreement.
But at the same time, there are big question marks still hanging over whether Britain in the future will remain part of that union itself.
The president, actually, said that he thought it was right in this joint press conference that David Cameron should try to get a better deal for Britain. David Cameron also restating his position that there would be a referendum on British membership of the European Union after the next general election, possibly before, 2017 Take a listen.
(BEGIN VIDEO CLIP)
DAVID CAMERON, PRIME MINISTER OF BRITAIN: Well, there's not going to be a referendum tomorrow, and there's a very good reason why there's not going to be a referendum tomorrow, it's because it would give the British public I think an entirely false choice between the status quo, which I don't think is acceptable.
I want to see the European Union change, I want to see Britain's relationship with the European change and improve, so it would be a false choice between the status quo and leaving.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think the UK's participation in the EU is an expression of its influence and its -- its role in the world as well as, obviously, a very important economic partnership.
(END VIDEO CLIP)
CHANCE: Prime Minister Cameron, Nina, is likely to have been very grateful for that presidential endorsement, because back at home, of course, here in the UK, he's facing something of a rebellion amongst his own ranks on the issue.
DOS SANTOS: Yes. Well, the euro skepticism is getting particularly pronounced here in the UK, hence the reason why I said the UK may no longer be the portal to Europe that the United States is counting on.
But the reality is, Matthew, the UK can't afford to be left out of this trade agreement. If and when eventually it gets going, it will be gargantuan.
CHANCE: Absolutely -- what? -- 10 billion pounds, $15 billion to the British economy, that's according to the calculations the government have made. And really, there's no question that David Cameron very much wants Britain to stay in the European Union. He wants a few tweaks in the relationship, some changes that he can sell to the electorate.
There's a lot of pressure here domestically coming from far-right parties, euro-skeptic parties like the United Kingdom Independence Party, which gained a lot of seats at recent local elections, for a referendum to be held. But I think the general view is amongst the government Conservative Party is that Britain would be better off inside.
DOS SANTOS: I was recently talking with Bob Zoellick, the former president of the World Bank, about this issue, who also was responsible at one point as the US trade representative for negotiating these kind of free trade agreements, and what he said was it's one thing suggesting it, but it's going to take years to get it up and running.
And here we have David Cameron saying we could have some kind of framework in place by the G8 in a month's time. That's looking awfully unrealistic.
CHANCE: I think so. This kind of talk about the possibility of negotiations starting has been going on for years and years, possibly decades. But as you mention, there are a lot of obstacles in the way.
On the one side, it would liberalize all sorts of things, like air traffic, trade between the two countries. But again, those red lines that each side has, you mentioned meat products with hormones, unacceptable in Europe. European beef, British beef, in particular you've got over there with mad cow disease potentially. There's a lot of -- issues that stand between now and a future agreement.
DOS SANTOS: Matthew Chance, our senior international correspondent, thanks so much for that here in our London studio.
Stock markets on Wall Street have been pulling back from record highs. Let's have a look at how the Dow Jones Industrial Average stands, as you can see, down around about 47 points at the moment, or about a third of one percent.
The talk on the trading floor Stateside is all about if and when the Fed is eventually going to scale back on its support for the US economy. The "Wall Street Journal" has been reporting that officials are now considering an exit strategy.
Let me remind you that the US central bank currently buys about $85 billion per month worth of mortgage-backed securities in an effort to try and cushion the blow to the US economy of the financial downturn.
That's been going on for an awful long time, and some people say eventually it will end. Bets are now on, perhaps some might say, for when it will end, and that is having its effect on stock markets there.
And now, time to turn to tonight's Currency Conundrum. The Royal Australia Mint has released a commemorative three-sided $5 coin to mark the 25th anniversary of Parliament House in Canberra. So, our question for you this evening is, why is it triangular?
Is it A, to mark the building's flag mast? Is it B, because the building's lobby is triangular-shaped? Or C, could it have something to do with the building's car park? I'll have the answer for you later on in the program.
Well, speaking of currencies, the US dollar is currently up against both the British pound, but it's actually flat against the euro and the yen. It's well above the 100 yen mark, as you can see, which is an important psychological point for Japanese exporters, and as you can see, those are the rates, we'll be back with plenty more QUEST MEANS BUSINESS after this.
(COMMERCIAL BREAK)
DOS SANTOS: Hello and welcome back. A situation that might sound familiar to you out there: you look at the label on a new t-shirt you bought and boldly stitched in the letters it reads, say, "Made in Vietnam." And then you glance at your iPhone, inscribed clearly on the back, "Made in China." Bottom of your coffee mug -- well, you get my drift.
Offshore manufacturing is nothing new these days, but now there seems to be something of a push to bring some of it back a bit closer to home. As such, this week, we're looking at places where reshoring a growing trend. And in the spirit of staying local, I started out by checking out things made right here in London.
(BEGIN VIDEOTAPE)
DOS SANTOS (voice-over): The Conran Shop, a design collective that's become a symbol of quality. Every fixture and furnishing sets the tone.
DOS SANTOS (on camera): They look design-y, but also functional.
JASPER CONRAN, DESIGNER: Yes.
DOS SANTOS: It's a stool, but it looks cool.
CONRAN: It's a cool stool.
DOS SANTOS: Yes.
(LAUGHTER)
DOS SANTOS (voice-over): The company, started in 1975 by Sir Terrance Conran, has entered a new era. It's now being steered by his son, Jasper.
CONRAN: And what I want to do is lay it out as the ultimate Conan apartment.
DOS SANTOS: He wants to go back to his British roots and promote home-grown designers.
CONRAN: Increasingly, what I'm trying to do is create a forum whereby they can come to us, and we can manufacture and retail their work. So, that's my great push over the next two, three years.
There is a demand now for made-in-Britain. There is this demand, specifically and ironically form China. In a sense, we've got a clout that we didn't have, say, 20 years ago.
DOS SANTOS (on camera): Do you think that British products, especially niche luxury products like some of the ones here on this floor, can command more because "made in Britain" is now cool?
CONRAN: I think they want good quality, great design, made in Britain. The cache of that is something that, perhaps, we in this country have forgotten about, because our manufacturing has been so diminished in the past.
DOS SANTOS: Is the "made in" wherever it is brand becoming more important during times like these?
CONRAN: What is great for us as a company is that we are able to be exporting British goods now, instead of just important Italian goods, as we probably were some time ago. Now, it's all about exporting.
You've got India, you've got South America, you've got China, these are all markets that didn't exist for us before.
DOS SANTOS (voice-over): The manufacturing landscape of this country is changing, and Conran wants to be a part of Britain's modern-day industrial revolution.
Nina Dos Santos, CNN, London.
(END VIDEOTAPE)
DOS SANTOS: Well, it's not just the UK seeing this kind of trend. On Tuesday, we're going to be hopping the pond and finding out about one American manufacturer that's bringing production jobs back onto US soil. Do tune in for our Made In series all this week here on QUEST MEANS BUSINESS.
Well, straight ahead on this show, smiles from Ireland: the eurozone's poster child for austerity provides the euro group with some pretty interesting food for thought.
(COMMERCIAL BREAK)
DOS SANTOS: Hello and welcome back. I'm Nina Dos Santos, this is CNN, and it's time now for a roundup of the main news headlines.
Protests erupted in the Turkish border town of Reyhanli after the weekend bombings that left some 50 people dead. The demonstrators are calling on the prime minister, Recep Tayyip Erdogan, to step down. The Turkish government says that the bombings are linked to the Syrian regime.
The young Bangladeshi woman who spent more than two weeks buried in the rubble of a collapsed building says that she'll never work in the garment industry again. At least 1100 people died when a factory building collapsed last month. Meanwhile, officials have shut down 100 garment factories around Dhaka because workers weren't showing up.
We're still waiting for the official results from the weekend's election in Pakistan, but Nawaz Sharif appears to have won a decisive victory, and he's already working to try and secure a majority government. In Karachi, stocks soared to a record high on the back of hopes of an economic revival for the country.
Manchester United fans are celebrating their latest Premier League championship. They're also saying good-bye and thanks to Sir Alex Ferguson, who's stepping down after more than 26 highly-successful years as manager.
As the eurogroup finance ministers in Brussels debate bailouts for countries like Cyprus and Greece, they might want to take a look a thousand kilometers towards the west for one apparent success story of a country that's had financial assistance. There are at last three reasons, many say, to be cheerful in Ireland these days.
First of all, the European Commission president Jose Manuel Barroso here saluted Dublin on his last visit, saying that the Irish economy was, according to him, quote, "turning the corner" and that its efforts should be rewarded.
Well, in 4th quarter of 2010, the economy in Ireland showed employment growth for the first time since all the way back in 2008, even if that unemployment growth was, some might say, a little bit anemic standing at just around about 0.1 percent.
But Ireland is also back in the bond markets. In fact, it's something of a comeback kid here, outperforming the likes of Spain and also Italy, and that's a key sign some say that this country is now finally returning to financial health.
Well, across the border in Northern Ireland, Ellis Skillen (ph) will be the host of the G8 summit, which will take place next month. Businesses are predicting a $60 million windfall when Barack Obama and David Cameron, as well as other leaders like Vladimir Putin of Russia do roll into town.
I'm joined now by Barry O'Leary, who's the CEO of the IDA, which is the Industrial Development Authority of Ireland, people who are rebuilding this economy after the bailout.
Welcome to QUEST MEANS BUSINESS and thanks on the show.
BARRY O'LEARY, CEO, INDUSTRIAL DEVELOPMENT AUTHORITY: Thanks, Nina.
DOS SANTOS: How far along is Ireland with its rebuilding (inaudible)?
O'LEARY: Well, we're about three-quarters to 80 percent. We've taken a lot of the budgetary measures. But they were very, very severe, but there was a lot of political consensus. We'd taken a lot of money out of the taxation system.
Obviously, the expenditures are both capital and current. But we've got a payback for that in the sense that the loans have been rescheduled and that's certainly helped our financial situation.
DOS SANTOS: The loans have been rescheduled, but you're still paying a lot more interest than other countries, like Greece and Cyprus. How does that make Ireland feel? Ireland has been rather able to try and turn a corner. But then you see other countries being bailed out by the month, it seems.
O'LEARY: Sure. Well, I think you ought to go back. We were the first country really or the second country to have to enter into the bailout. And a lot of this was new at the time. Whether one would do today what one did at that point in time.
DOS SANTOS: Would you?
O'LEARY: No. But, I mean, that's in hindsight (inaudible). Exactly what would happen subsequently and what the stakes were. But I think what really is important, with certain things in our control that we're doing, and we're doing all of those. We're meeting all of the troika requirements. And there is a third tranche of the financing in Ireland that has details; the negotiations need to continue on that.
DOS SANTOS: One of the things that's been a thorn in the side here has been Brussels, sort of demanding that Ireland revises its favorable corporation tax or corporate tax regime. That has arguably been the success though, for Ireland, to encourage businesses to invest in the country, despite the fact that obviously it has been in financial dire straits.
O'LEARY: Sure. Well, I mean, there's an important aspect of taxation. Taxation is only one part of Ireland's value proposition. Clearly if you don't have the --
(CROSSTALK)
DOS SANTOS: It's a big one, though.
O'LEARY: Well, if you don't have the talent pool or if you're only going by tax, you wouldn't end up in Ireland. After all, Switzerland, Singapore, parts of the Netherlands, in fact, U.K. is introducing low corporate tax rates. So it's only one aspect of it. Without the talent pool, we would not win the degree of foreign direct investment that we do.
DOS SANTOS: Now the deficits coming down slowly. It's still way up there. It's something like 7.5 percent. When is it going to be back down towards technically what is the limit for the European countries, which is 3 percent?
Are you on track for that? When's it going to be back down (inaudible)?
O'LEARY: Yes, we're on track for 2015. But of course, a lot will depend on the state of the European market, because European markets are flat. You know, when these predictions were made, it was on the basis of further growth taking place in the European Union.
DOS SANTOS: Yes, well, this is -- this goes back to the issue of the so-called fiscal multiplier, doesn't it? It makes it even more difficult to meet your deficit targets when, of course, your economy is shrinking rather than growing. So is that going to throw you off course?
O'LEARY: Well, actually, we're in the growth pattern and we have been for the last 18 months, albeit we've been 1.0 percent to 1.3 percent. I think what differentiates Ireland is that we've been off a lot of the technology and the life sciences investments. They're all export-led.
Eighty percent of the exports come from the multinationals. So even in the flat European market, there are new business models and new technologies that we're capitalizing on because we have most of the world's leading multinationals there.
DOS SANTOS: Mr. O'Leary, thank you -- Sir Barry O'Leary, thank you ever so much for joining us there. That's the chief executive of the Industrial Developmental Authority of Ireland.
Well, let's change tack.
Matt Winkler, the editor-in-chief of "Bloomberg News" has apologized after admitting that his reporters had access to sensitive information about Bloomberg's own clients. He said the error is inexcusable. Here's what reporters, it seems, actually had access to on the Bloomberg terminal.
First of all, they could see a user's login history and when that login was actually created. They could also see what's been called certain high-level types functions depending on what sort of keys on the Bloomberg people are using as they're looking at bonds or equities or where not specifically which bonds and equities they were looking at.
Now they could also seen information about help desk inquiries and conversations that were logged there. That has been one of the more damaging allegations that Goldman Sachs and JPMorgan has leveled towards Bloomberg.
Well, Bloomberg customers reportedly pay a whopping $20,000 per year for a subscription to one of those famous terminals. Clients include the likes of the Federal Reserve, banks like JPMorgan and also Goldman Sachs.
For more, let's bring in Felicia Taylor at CNN New York.
So this is damaging stuff, Felicia.
FELICIA TAYLOR, CNN CORRESPONDENT: Oh, there's no question about it. I mean, this is a question of privacy and obviously about patterns of use by certain clients of Bloomberg terminals. Keep in mind that they have major clients with the Federal Reserve, the ECB, the U.S. Treasury. There are 315,000 subscribers worldwide to Bloomberg terminals.
Here's allegedly what happened. A reporter questioned somebody at Goldman Sachs about an individual's employment history, whether or not they were still employed. Based on the login history that they had seen or not seen and then wondered whether or not their employment status was still intact.
That's not the kind of information that reporters like you and I would necessarily know without having that kind of access to the Bloomberg terminals.
Now as you well know, Matt Winkler has come out and apologized, and he's also said that at no time did reporters have access to trading, portfolio monitoring, blotter or other related system. Nor do they have access to clients' messages to one another. They couldn't see the stories that clients were reading or the securities clients might be looking at.
But nevertheless, this is access to client information that normally journalists wouldn't have. So that would allege that these journalists would have a leg up on some of the other stories and can watch patterns as to what people are doing to see what they're looking for out there. And that could give them an edge, certainly, in following a story.
DOS SANTOS: And I suppose what really pours salt in the wound is the fact that these clients are paying a hefty price -- $20,000 per terminal -- to have Bloomberg's own journalists effectively be allowed to snoop on them.
TAYLOR: Yes. Well, there's no question about that. Obviously, again, this is about privacy and what Matt Winkler has done now is put something in place called the client data compliance officer.
So they've not -- they've -- no longer enabled any of their journalists to be able to access this kind of information anymore. They've put a stop to it. They've apologized for it. They will not have access to any kind of confidential customer data.
But what's interesting is he has also said this goes way back to almost the beginning of the Bloomberg terminals of the 1990s, and that was when journalists were sort of thought of as part of the sales force.
In other words, they were supposed to be tracking this kind of information to be able to sell more Bloomberg terminals. That would tell them what people were looking for. As you well know, these terminals are chock-full of information, all kinds of financial data, headlines. You can find just about anything you need to know in the world of finance on a Bloomberg terminal.
In the '90s that was being used as a way to track information that people would want in terms of being able to use and obviously sell more terminals. So it's an age-old practice. But in this day and age of high technology and information, it's simply obviously not a practice that they can afford anymore.
DOS SANTOS: I suppose considering the average person only uses 18 percent of the functions on a Bloomberg terminal, they also probably thought that they didn't necessarily need to ringfence this because it was such complicated stuff anyway.
Felicia Taylor, thanks so much for joining us there from CNN New York.
Well, coming up later on in the program, there's Alex Ferguson's celebrated -- he's celebrated into retirement a rival manager may be forced into his. The fickle world of football management, especially Manchester these days, just ahead here on QUEST MEANS BUSINESS.
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DOS SANTOS (voice-over): Time now for the answer to tonight's "Currency Conundrum." Earlier in the show we asked you why special coins in Australia have three sides. So this (inaudible) special coin actually is triangular shaped because it's to commemorate the Australia parliament's flag mast.
So that was the answer, A. It stands 81 meters high and weighs no fewer than 200 tons. And as such, it's one of the largest stainless steel structures anywhere to be found in the world.
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DOS SANTOS: Now Manchester United is saying farewell to its most successful and most lucrative manager of all time.
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DOS SANTOS (voice-over): What you're looking at now are live pictures in the city of Manchester. Sir Alex Ferguson is saying goodbye to the team that he's led for more than a quarter of a century. He'll be sure to take in his last moments of victory as well, because Manchester United has just also managed to win the England Premier League.
Ferguson's tenure at Manchester United is widely regarded as one of the most successful managerial stints ever by the head of a club. He's won no fewer than 38 cups in his 26-year reign.
And take a look at some of these other statistics. He's taken in 13 English League titles and two European championships. And that's also point out that he wasn't just soccer-savvy. He was also a pretty good businessman as well, because the club has had massive growth under his leadership. It's now worth a whopping $3 billion in total.
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DOS SANTOS: And listed on the New York Stock Exchange.
Well, on the other side another management shakeup could be on the cards at the rival club, Manchester City. It's expected to fire its manager, Roberto Mancini, after a lackluster season with no trophies to show.
Some football clubs change their managers about as often as you or I change our socks. But the constant switching can create difficulties for the incoming bosses. Earlier, I addressed this topic with Nick South, the MP of Boston Consulting Group, and I started out by asking Nick what challenges a replacement could face.
NICK SOUTH, MANAGING DIRECTOR, BOSTON CONSULTING GROUP: Whether it's in business or a football club, the same principles apply. You've got a relatively slow period at the start, where you need to really get 'round, talk to lots of people, listen hard but then quickly stamp your mark on the situation.
What's my vision for the club? What do we want to achieve? How are we going to get there? And that's a period, a critical period of two to three months where people really need to get a grip with the situation and put their mark on it.
DOS SANTOS: And what happens if they don't? What kind of signals should they be sending out to staff, the new CEO, there doesn't necessarily have the staff behind them because perhaps they had allegiances with the previous chief executive. What signal should they be sending out?
SOUTH: Yes. I mean, it's a great question. And one thing to be aware of is that you -- when you're a new CEO, everything you do is sending a signal. People are looking for the smallest thing, the smallest use of a word or the -- your body language and it sends a signal. So you have to be very aware of how closely you're being looked at and how it goes picking up the signals from that.
The main thing I think in the first month or so is just to listen very hard. Get 'round, talk to people at the frontline, talk to customers, talk to people at different levels of the organization and really listen. What's frustrating them? What do they want to achieve? And then take all that together and use it in molding your own vision for the organization.
DOS SANTOS: (Inaudible) looking on the football pitch for the FTSE 100, there has been an awful lot of change at the helm of these companies and these football clubs.
Sometimes it looks as though some of these chief executives are almost like a hamster on a wheel, if you like, or on a conveyor belt. And then they get off the conveyor belt and somebody else comes in. It's very difficult for these CEOs to differentiate themselves as well. Sometimes they appear as clones as a result.
SOUTH: Yes, absolutely. I mean, it becomes very, very difficult when organizations get into that cycle of changing too frequently because --
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DOS SANTOS: Are we seeing that often now (inaudible) say?
SOUTH: To some extent, but I think what is -- some organizations in particular, but you don't get this problem that no one in the organization believes that person's going to be around for a long time.
But the most important thing to avoid that sense of being a clone is to come in, really get your clear understanding of the situation yourself and then say this is what I want to do with this organization and this is how we're going to get there.
DOS SANTOS: As a whole, would you say that we're seeing perhaps too much change too quickly, though, without managing to accomplish something? Because often what many chief executives, many football managers will tell you is that you need usually three ideas in terms of a time horizon to leave your stamp on the place and leave a lasting legacy.
SOUTH: Yes, I think it varies from organization and sector and so on. But there's absolutely no doubt that organizations that go through cycles of repeated change too quickly it's very, very difficult to get something sustained and long-lasting.
So the most successful organizations do seem to get a degree of stability which they build on year on year and build something of a strong foundation.
DOS SANTOS: Going back to the football pitch, Chelsea, is that the ideal example of what you're saying people shouldn't emulate?
SOUTH: I think when you get through that many managers in that period of time, it's not a happy breeding ground for long-term success.
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DOS SANTOS: Let's move from sport to the world of entertainment.
Money is, of course, at the heart of "The Great Gatsby," and now fans are being given a chance to experience a slice of the high life for themselves. And for all the warnings about greed and excess, some are still pretty happy to pay up, as Nischelle Turner reports now.
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NISCHELLE TURNER, CNN CORRESPONDENT (voice-over): The Twenties are roaring. Diamonds and over-the-top parties.
TOBEY MAGUIRE, "NICK CARRAWAY": Who is this Gatsby?
TURNER (voice-over): Gatsby is in the house.
As director Baz Luhrmann's decadent 3D spin on F. Scott Fitzgerald's "The Great Gatsby" hits theaters.
LEONARDO DICAPRIO, "JAY GATSBY": I lived in all the capitals of Europe, collecting jewels, hunting big game, painting a little.
TURNER (voice-over): Catherine Martin, the film's costume and production designer and the director's wife, brought the era to life onscreen.
CATHERINE MARTIN, PRODUCTION DESIGNER: Baz is a visualist. He's incredible concerned as a director as to how things look because he says that the visuals are actually part of the storytelling process.
TURNER (voice-over): Offscreen and on the street, the movie's fueling a fashion renaissance.
UNIDENTIFIED FEMALE: The Ziegfeld collection was inspired by "The Great Gatsby."
TURNER (voice-over): Tiffany & Co. is just one of the retailers offering fans a piece of the film -- for a price.
UNIDENTIFIED FEMALE: The sterling silver locket is a piece of that collection. This is $850.
TURNER (voice-over): Brooks Brothers recreated the Jazz Age for customers after working on "Gatsby" with Martin.
UNIDENTIFIED FEMALE: The green sweater has been incredibly successful and I think (inaudible) all that.
TURNER (voice-over): And if the fashion isn't enough, enthusiasts can eat, breathe and live the film for $2,795 a night at the legendary Plaza Hotel's Fitzgerald Suite in New York.
UNIDENTIFIED FEMALE: It comes complete with (inaudible) imperial (inaudible) cocktails, a bottle of Moet champagne, breakfast for two.
TURNER (voice-over): Or bring it home.
UNIDENTIFIED FEMALE: Someone is inspired by the suite and wants to recreate a bit of Gatsby Fitzgerald Plaza in the '20s feeling in their home, they will be able to do that.
Restoration Hardware has provided all of the furniture, the bed linen.
TURNER (voice-over): The movie's star, Leonardo DiCaprio, points out the original novel presents criticisms of materialism.
DICAPRIO: In a lot of ways, what Fitzgerald is talking about, the decadence and great wealth and waste of this time period in the 1920s.
"GATSBY": I've gotten all these things for her. Now she just -- she just wants to run away.
DICAPRIO: In a way, what made this novel so famous is that he predicted the great crash of the late '20s-early '30s.
TURNER (voice-over): But for now, Gatsbymania is here to stay.
MARTIN: We need to know when enough is enough. But also there's no sin in having a little fun, either. A little party never killed nobody.
TURNER (voice-over): Nischelle Turner, CNN, Hollywood.
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DOS SANTOS: Let's turn our attention towards the weather, and it's been particularly brutal in places like Manchester, where the famous mercurial boss of Manchester United is saying goodbye to the people. CNN's Tom Sater is standing by to tell us all at the Weather Center.
How's it looking, Tom?
TOM SATER, AMS METEOROLOGIST: Looks a little damp and cold there, Nina. The winds have been kicking up, too. But they have been putting up with it, obviously. I mean, it wouldn't keep the fans away. The wind's sustained, 30-40 kph. We've got cold air in place. And with that we've even had a few hailstorms.
In fact, our very own "WORLD SPORT" reporter, Alex Thomas, who was there, temporarily interrupted by a passing hailstorm. I'll show you the radar on that. But I always thought that people lined the streets. This way, it almost looked like for a while there they were walking along with the parade. But they're having a great time, despite the chilly weather.
Let's take a look at a satellite picture from space. Here it is. Notice the patchy cloud cover. This is cold air that is sweeping behind the cold front, that first pushed the first wave of rain through. That's now making its way eastward. But see how it just kind of peppering the landscape. In fact, with this kind of cold air in place, very easy to get hail if they form. Also what we call cold air funnel clouds. They typically do not touch the ground and become a tornado but it's very possible in the unstable air.
Let me back this up just a little bit where our very own Alex Thomas was. Here is Manchester. Now we're going to shell this with a very thunderstorm that developed. There it is. This is the one that dropped hail on him during the proceedings and of course right before the festivities really began with the parade. But the winds still quite strong.
Look for the possibility of air travel disruptions in London, Glasgow as well, possibly wind in Amsterdam, 31 kph. That first wave as mentioned has moved already well to the east. But we've had problems last week and even in this weekend with river levels on the Seine here in Paris that were rising a little bit.
For the most part, the threat for severe weather really moves well to the east, up around Estonia, Latvia, up to areas of Western Russia as well. And that's where we're going to find mainly the warm summer like temperatures remain as unsettled weather will continue.
As far as temperatures go, for your Tuesday, Moscow 29 after reaching 28 degrees today. Kiev over the weekend Saturday and Sunday both 29 degrees, 24 today. This is the bigger storm. This will soon become the major weather story and our top weather story as our tropical cyclone is rapidly developing at the severe level. Right now it's moving northwest. It's a good 1,160 kilometers south-southwest of Calcutta.
And because of the topography, because of the geometry, this, along with a high populated zone, we know can cause serious catastrophe and damage. But we're going to watch this for landfall possibly by Thursday. So all eyes are going to be in areas from Bangladesh over toward Myanmar, Nina. We're going to be watching this one closely.
Back to you.
DOS SANTOS: All right, Tom Sater there at the CNN Weather Center, thanks ever so much for that.
Coming up next here on QUEST MEANS BUSINESS, how to build the perfect CEO. Never mind business acumen, gutting (inaudible) strategy. The message instead is stand tall, speak low, get bold.
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DOS SANTOS: Welcome back. It seems as though in the world of business, the secret to success is actually how you sound. A survey of male CEOs concludes with this message: those with lower voices do better.
So let's build a perfect CEO for you out there.
Well, the average male chief executive speaks at a vocal frequency as you can see there around about 125.5 Hz. And as such, the average CEO earns around about $3.7 million, according to this study that we're talking about.
The study also found that the ones with deeper voices earned even more. So the lower the Hz, the lower the tone and pitch, well, the higher the salary, as you can see here. If we go to 102, well, it's $200,000 more.
Here's an example of one actor who's the voice of this very network and speaks at around about 85 Hz.
UNIDENTIFIED MALE: This is CNN.
DOS SANTOS: Well, I think that James Earl Jones would be hard to beat. But it's not just the voice that counts, because another survey suggested that the taller you are, the more you'll also earn as well, as you can see on this chart here.
At a rate of around about $1,000 per inch or around about $1,000 per 2.5 centimeters if you're measuring it in metrics.
And this is the other thing I wanted to show you. It's not just the height and pitch and tone, it's also what's on top that's pretty important as well, because a survey claimed that men with cropped or shaven heads are seen as more masculine by the audience with greater potential for leadership skills, such as for instance, this man towards my left here, the General Motors CEO, Daniel Akerson.
And then here's another example of somebody else who's a little bit thin on top, you might say. That's DreamWorks chief executive Jeffrey Katzenberg. And we can't forget the legendary business leader here, the former CEO of General Electric, Jack Welch.
You may be wondering why women haven't featured heavily up here in the panel of people we've been talking about. Well, the survey said that there weren't actually enough female CEOs to measure and deduce proper trends and statistics from.
Up next, straight after the break, want a CEO with a low voice, but a short skirt? Why Richard Branson was forced to put a brave face on, along with a bit of lipstick and mascara.
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DOS SANTOS: Richard Branson is never shy of a photo opportunity but this time the Virgin CEO had to do something slightly different, dressing up as a flight attendant because he'd lost a bet with the CEO of AirAsia, Tony Fernandez. Branson's sporting a red pencil skirt and -- get this -- fishnet stockings, lost a wager about whose Formula 1 team would do best.
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RICHARD BRANSON, CEO, VIRGIN: It was a great honor to spend a day as a stewardess on board one of our planes. I realize that I'm now (inaudible) into civilian clothes and go back to my day job. I've always wanted to be (inaudible) but it looks like I'm just going to have to get back to (inaudible).
DOS SANTOS (voice-over): The lipstick and mascara doesn't look too bad, but maybe (inaudible) by scraping off that trademark beard, Sir Richard Branson.
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DOS SANTOS: Well, the good news is that some of the money from ticket sales for that flight will be going to charity.
And on that note, it's time to say goodbye. That's it for this edition of QUEST MEANS BUSINESS. I'm Nina dos Santos in London. Thanks for joining me. I'll be back in just a moment's time with your news headlines.
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DOS SANTOS (voice-over): Protesters -- protests erupted in the Turkish border town of Rahanle (ph) after the weekend bombings that left some 50 people dead there. The demonstrators are calling on Prime Minister Recep Tayyip Erdogan to step down and (inaudible). The Turkish government says that the bombings are linked to the Syrian regime.
The young Bangladeshi woman who spent more than two weeks buried in the rubble of a collapsed building says that she'll never work in the garment industry again. At least 1,100 people died when a building factory collapsed just last month. And in the meantime, officials have now shut down 100 other garment factories across Dhaka whose workers aren't showing up in protest.
We're still waiting for official results from the weekend's election in Pakistan but now (inaudible) won a decisive victory and he's already working to try to secure a majority government.
In Karachi, stocks soared to a record high on the hopes of (inaudible) revival.
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DOS SANTOS: Well, that's it from QUEST MEANS BUSINESS and the main headlines. "AMANPOUR" is next.
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