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Quest Means Business
Global Market Sell-Off; Wimbledon Day One; Sharapova's Taste for Business; Pound Stronger; Snowden Seeks Asylum in Ecuador; Snowden's Travel Options; Nelson Mandela Critical
Aired June 24, 2013 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: Tonight from the NYSE, we survey the damage as the global stocks continue to fall.
Also, seeking safe harbor. The man who leaked America's security secrets travels a refugee.
And Sharapova wins on day one of Wimbledon and talks to me about success off the court.
I'm Richard Quest, live from the floor of the New York Stock Exchange where, yes, I mean business.
Good evening. They're telling me they want a little more fire at the New York Stock Exchange. They want fire, we've got falls on the exchange. Look at how the market's doing at the market. Down 113 points at the moment at 14,686.
It has been another day of nauseating losses on stock markets around the world, and now the US faces a new threat from abroad. Look at the numbers as we round out the day. The Dow, the NASDAQ, and the S&P 500 all down sharply. What's worse, volatility at the highest levels of the year.
The Chinese credit crunch is what caused everybody to fall out of bed. That and the Chinese Central Bank calls for an end to risky loans. The Chinese are now starting to pull back on the credit, the squeeze is underway, and not surprisingly, in China, the Shanghai Composite, that was down some 4, 5 percent. It all adds to the fears as the US Fed is going to promise to withdraw stimulus.
The sell-off spread through Europe. European stocks at the lowest level since November. Worse losses in November -- in Asia, I beg your pardon. China now officially a bear market. The Shanghai had its worst day in four years.
Let's put perspective into this and deal with it. Joining me, Alison Kosik is with me, as is Alan Valdes of the -- director of floor trading at DME Securities. So, ladies and gentlemen, just how serious is this?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Let's ask Alan. He is the pro. What do you think?
ALAN VALDES, DIRECTOR OF FLOOR TRADING, DME SECURITIES: No. It's not the end of the world. If you think the United States is going to fold up and go away, no. We're coming into the end of the month, end of the quarter, a lot of guys are locking in profits. They had a good year in six months, so you're seeing some selling. You don't make some money until you take it off the table.
QUEST: But is this -- is this just profit-taking, or is it more than that, do you think?
KOSIK: I think -- you know what? I think that it is -- it's profit-taking and it is fear, but you also have to look at the perspective here. The market's been going up, up, up, up. It's been breaking record highs: the Dow at record highs, the S&P 500 at record highs. That's not healthy, right?
VALDES: No, and you're right. We have had a combination of bad news. Bernanke speaking last week kind of shook people up. Chinese, which you mentioned, definitely shook the markets up.
QUEST: So, you tell me this: why does the withdrawal of the stimulus by the Fed, which is a good sign because it means the economy's growing, why is that causing equities to fall?
VALDES: Well, two reasons. One, of course, interest rates go up pretty fast pretty quick. But second, a lot of economists don't really think the economy's strong enough to stand alone.
So, yes, pulling away is a good thing if the market's strong enough, but people still look at unemployment, still high at 7.6 percent. Even though inflation's not there, but we still look at the unemployment number. That's the big one.
KOSIK: But I think it is time for the Fed to take off the training wheels. At some point, the economy's going to have to learn to stand on its own.
QUEST: Except it's -- so, everybody knew this was coming, and yet, everybody sounds like -- I mean, but it is an experiment. As they withdraw stimulus from the greatest economic experiment in our lifetimes --
VALDES: Correct.
QUEST: -- basically.
KOSIK: But you saw this happen with QE1, with QE2, and now QE3, where the Fed drops the bomb and says, OK, I'm going to pull the liquidity from the market, then you see the market sell off. And this time around, the Fed may not be there to catch it, right?
VALDES: But what's interesting, too, we're just talking. No one's pulled anything yet. So all the chatter --
QUEST: And --
VALDES: -- is a good test to see what the market really thinks.
QUEST: And not only that, he's not stopping buying. He's just slowing down. So, this China, let's talk China. How serious -- China's slowing down. We've known China is slowing down.
KOSIK: You think China's a bigger deal?
VALDES: Yes, I agree. I think in the long run --
(CROSSTALK)
QUEST: What are you frightened of, though?
VALDES: -- China is a big deal.
KOSIK: The credit markets freezing up. Credit markets freezing --
(CROSSTALK)
VALDES: And they can make Lehman look like a passbook failure in somebody's bank account. China could be a big deal if, in fact, they do get into a liquidity crisis. Yes, there's no question about it.
QUEST: So, pull the strands together from Wall Street, if you will, as we start. What -- we're in the summer. What happens now as we move forward? Should we expect sideways? Should we expect volatility? What happens?
VALDES: Yes. I think you'll see a lot of volatility the rest of the summer. I think we will probably trade sideways. Remember, no real news came out. Washington's closed, Bernanke doesn't speak until the fall.
I think as we approach September, you'll see more activity hedging what he's going to say, if he's going to taper. That's where it comes in. But I think the rest of the summer, a lot of guys, like we said, locking in profits, going away.
KOSIK: I think a lot of bad-ish days are still ahead.
QUEST: Alan, thank you very much.
VALDES: Thank you, Richard.
QUEST: You come with me.
KOSIK: Oh!
QUEST: You come with me.
KOSIK: Fine.
QUEST: Look at this. The markets -- this is your home turf, isn't it?
KOSIK: Look, it's come back. See the Dow, only down 81 points. It was down as much as 250 earlier in the session. This is the kind of volatility.
QUEST: That's the sort of volatility and that's the sort of thing that we should expect to see in the days and weeks ahead.
KOSIK: I agree.
QUEST: Are you ready for the summer?
KOSIK: I am ready for the summer. Can I ring the bell?
QUEST: You want to ring the bell?
KOSIK: I want to ring the bell. I feel good. It didn't ring! What kind of bell is this?
QUEST: Now she's -- just do it gently.
(LAUGHTER)
QUEST: Just do it -- try again.
KOSIK: OK.
(RINGS BELL)
KOSIK: Yay! I feel good, now. Thanks, Richard.
QUEST: Thank you. Alison Kosik at the New York Stock Exchange. When we come back, he's the most wanted airline passenger on the planet. So, how do you manage to travel the world when your passport has been canceled and you're wanted by the US superpower? This is how you do it.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: There was a big shock on the opening day of Wimbledon in south London. Rafa Nadal was knocked out in the first round by a Belgian called Steve Darcis. No surprise in the women's competition. Maria Sharapova safely through to the second round after a comfortable win. She stays on course for the winner's prize of nearly $2.5 million.
And when I sat down with her last week, she told me she had high hopes this year of Wimbledon.
(BEGIN VIDEO CLIP)
MARIA SHARAPOVA, TENNIS PLAYER: I don't think -- if I didn't have the belief that I could, I don't think I'd ever play.
QUEST: Do you have a different strategy this time?
SHARAPOVA: I wouldn't say different. I think the work that you put in the weeks and the months before you go into a Grand Slam like that is the most crucial part of the preparation. And when you're playing, you're not thinking of -- you're going out and you're facing your opponent and you're facing your match and you're just trying to win.
(END VIDEO CLIP)
QUEST: She may not be the number one seeded tennis player -- women's tennis player in the world, but she is the number one female money earner when you put everything together. Sharapova is coining it in left, right and center, whether it's from endorsements from major companies or from her own entrepreneurial activities, in particular, Sugarpova.
This is a line of candies -- I don't seem to have brought any with me to New York -- a line of candies which she has opened and started up. She's the entrepreneur, she's the designer, she's the taster, and as she explained to me last week, it's one of her most important business ventures because it's all about what she has done.
(BEGIN VIDEOTAPE)
SHARAPOVA: But I never quite had a proper education. I was never in an actual classroom. I was never learning from a teacher, learning from my students or being in that environment where I was constantly having something to learn.
And I was always around my mother, who was quite strict with that, because she wanted me to have a proper education. She knew that it was important for me to play tennis and play the tournaments and travel so many weeks out of the year, but she wanted to make sure that I had a -- quite a good system in order to be not just successful on the court, but also have -- be smart about the choices that I make.
And not just business. You have to be smart in other aspects of your tennis career, whether it's going into a press conference and saying the right things and doing the right things. You have to be -- you have to be a pro, because at the end of the day, you're not just on the tennis court.
QUEST: It's image and it's brand, isn't it?
SHARAPOVA: I think it's a little bit of everything. It's how you see yourself and it's how you envision your career and your life and your goals. And sometimes you think of the craziest things and -- I've had goals when I was quite young.
And when you're five years old and you're thinking you want to win Wimbledon, how crazy does that sound? You think you're -- you're -- that's so unrealistic.
QUEST: Did you?
SHARAPOVA: And yet -- I did. I did. That -- but then --
QUEST: And when you won it --
SHARAPOVA: Yes.
QUEST: -- was there a second that that memory came back to you full throttle?
SHARAPOVA: Oh, for sure. For sure. You -- whenever I achieve something, whether it's a tournament or whether it's a match that I really wanted to win, I always look back to certain moments in my career and in my life, and I always --
And they don't necessarily have to -- maybe they didn't even have anything to do with the outcome of that match or that tournament, but you always go back to that certain time in your life and you're like, wow, maybe that changed it.
QUEST: Why did you do them? The sweets?
SHARAPOVA: I wanted to own something. I wanted my own brand, I wanted -- I've been part of so many great collaborations, and at the end of the day, I was always a very, very small part of that. And I wanted the pressure of making my own decisions. I wanted to be the one that was in that board meeting with my suit and tie -- no, I'm joking.
(LAUGHTER)
SHARAPOVA: But I really wanted to make those decisions that would ultimately make or break a company.
QUEST: Here's the thing. I've interviewed many celebrities, many sports people, and they all sort of put their endorsements and they all say they were involved. But you really were with this, weren't you?
SHARAPOVA: I was.
QUEST: You got your hands dirty.
SHARAPOVA: I was. Well, from the day that I heard the name Sugarpova to when we launched it in New York and Henri Bendel's, it was -- it took two years. And two years to create something that's new, I would say that's a pretty long time. So, yes.
(END VIDEOTAPE)
QUEST: That's Maria Sharapova talking to me about Sugarpova. Interesting when you hear somebody of her ilk saying she wanted to create something herself, she wanted something that she could be determined that she could make or break.
Tonight's Currency Conundrum. Ecuador officially replaced its own currency with the US dollar in 2000. The country still issues its own coins. Where are they minted? Was it Ecuador, in nearby Bolivia, or C, in Canada? No doubt, there'll be some of the things that Edward Snowden will need if he ever gets to Ecuador.
As for the rates tonight, the pound is stronger, the euro is weaker, the yen inched higher. Those are the rates --
(RINGS BELL)
QUEST: -- this is the break.
(COMMERCIAL BREAK)
QUEST: Ecuador says Edward Snowden has applied for asylum after the man who leaked America's security secrets somehow managed to fly to Moscow over the weekend. Where is Edward Snowden now? We simply don't know.
His passport has been revoked by the United States, yet he was still able to board his flight on Sunday. US State Department said he should have been stopped from making any international trips. Instead, the Hong Kong government said they had no reason to stand in his way.
Once he was in Moscow, he found a safe haven to rely on. Passengers arriving at Sheremetyevo Airport can stay in the transit down indefinitely, even without a Russian visa. Snowden have been helped by Ecuador. According to WikiLeaks, he left Hong Kong with an Ecuadorian refugee document of passage.
Now, where is he headed to? The best guess is -- bearing in mind that the Ecuadorian government has said that he has applied for asylum, Ecuador seems to be the country. The foreign minister there says Snowden fears death if he's not granted asylum.
Paula Newton is in Quito, the Ecuadorian capital. She's there for us tonight. Paula, is it the understanding there that he would get asylum now that he's asked for it?
PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: The Ecuadorians clearly won't say right now. They say they are reviewing this request and say, look, they will act not on their own best interest of the country and how it might affect relations with the United States, but on what they are calling their own moral principles.
Every indication, though, Richard, is that they will take their time to consider it and likely grant him this kind of asylum.
And at this point, many people are trying to parse exactly what Ecuador gets out of this. We've discussed many times about their relationship with Julian Assange still, at the Ecuadorian embassy there in London close to you, Richard.
And right now, Ecuador is saying look, we have an application from a man who says he will not receive a fair trial in the United States and we are doing what we can, they say, in the name of human rights. Their words, Richard. And this is all they're willing to say --
QUEST: Paula --
NEWTON: -- right now. We've been in contact with the office of the president here, Rafael Correa, and still nothing back from them as to whether or not there's an actual timeline about considering this. Richard?
QUEST: What's going on in Ecuador? They grant asylum to Assange in the embassy, and in doing so, seriously hack off the UK government. If they grant asylum to Snowden and he manages to get to Ecuador, that will -- I will say "disrupt," it could do more than that -- relations with the US. What's going on?
NEWTON: Well, they're trying to believe what they believe is a shrewd political and diplomatic game here. It scores many points in areas -- some areas of Latin America to make sure you basically go your own way diplomatically, do not toe the line that the United States might like you to toe. That's one portion of it.
And the other point that many people are making both here in Ecuador and outside of Ecuador is that they are saying that Edward Snowden should be afforded all those freedoms that some people here in Ecuador say they are not afforded by their own government.
Ecuador right now, though, not saying -- except for saying it's on moral principles, not saying exactly what their motives would be. But except for understanding that they're now at the center of what is a version of "The Fugitive." Ecuadorians here still very puzzled, Richard, some of them holding back on judgment, but still puzzled as to what is going to be in it for them and their country.
QUEST: All right. Paula, finally and briefly, how is he going to get from Moscow to Ecuador?
NEWTON: Well, apparently our first guess was wrong, that he would be on that Aeroflot flight from Russia to Havana. There are other flights, there are other destinations. Clearly there is nothing direct from there to Quito.
He could in some way, shape, or form have some type of government aircraft, perhaps from another government, like Venezuela, that has been known to basically thumb their nose at the United States to send an airplane there. Right now, that is complete speculation.
I can tell you, Richard, many people have spent a long time in that transit lounge at Sheremetyevo. I've been through it many times myself. There have been stories of people spending weeks there without a Russian visa. The Russians are right when they say that that is the procedure in that airport.
So right now, he could be anywhere, considering he could be still that transit lounge, and there are many different ways that he can get here to Quito.
QUEST: Paula Newton, who is in Quito, the Ecuadorian capital, tonight for us. From Paula to Simon Calder of "The Independent" newspaper.
Simon, explain to me, please, for somebody like myself, who every time you have to show a passport at a gate, a passport wherever you go, how does he -- how does Snowden get out of Hong Kong, get into Moscow, all on a passport that supposedly had been canceled?
SIMON CALDER, SENIOR TRAVEL EDITOR, "THE INDEPENDENT": OK, yes, absolutely right, Richard. You and me need our passport at every stage, and it's a difficult document to get hold of. But of course, things are not entirely ordinary.
Even though the United States has suspended Mr. Snowden's passport, I understand it is still in his possession. And so, from the point of view of getting on an aircraft, proving to Aeroflot, the carrier, that he is the person on their manifest and it also matches his stated identity, he can get on.
There's talk from WikiLeaks that he's traveling on a refugee document of passage, which is one of these great diplomatic maneuvers, which presumably --
QUEST: Right.
CALDER: -- can work. And there are many people going around the world without things which look like a proper passport, and they are doing it perfectly legally. However, of course, there are great Cold War overtones to this. Can you get halfway around the world without setting foot in anywhere you could describe as the West?
QUEST: Ah, but here's the point: if he does get on a plane and it does fly, say, for example, through US air space, air traffic control can ask that plane to land, but the pilot's under no obligation to, is he?
CALDER: Well, this Aeroflot aircraft, if it is going Sheremetyevo to Havana, absolutely normal scheduled route, which had actually been around for the last 40 or so years, won't be going anywhere near normal US air space.
Normally, it enters over the Canadian border near to Bangor, Maine, and routes all the way down the East Coast of the United States and landing at Havana. If you do that, under new US rules, you have to provide details of everybody who is onboard.
Now, Aeroflot and the Russian authorities aren't about to do that, so I think this is a special departure, will be taking quite a long and interesting route going over the mid-Atlantic probably to a point near Bermuda, then keeping very well clear of US air space and actually arriving in Havana from the southeast rather than from the north, which is the normal way to approach.
But it's perfectly manageable. The aircraft can do that. It'll add a couple of hours to the trip, but I think that's the least of Mr. Snowden's concerns at the moment.
QUEST: It's amazing. Simon Calder, thank you for putting that into perspective, how you can travel the world with a document that may be canceled or, frankly, may not even look like a real document in the first place. Simon Calder from "The Independent" joining us there.
QUEST MEANS BUSINESS, we're live at the New York Stock Exchange. In the second part of the program, we will update you on the situation, the grave and critical situation of Nelson Mandela in South Africa. QUEST MEANS BUSINESS, good evening.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. But this is CNN, and on this network, the news always comes first.
South Africa's leaders say doctors are doing everything they can to keep Nelson Mandela comfortable. The health of the 94-year-old took a turn for the worse over the weekend. Mr. Mandela is said to be in a critical condition in a Pretoria hospital.
His former wife, Winnie, and two of his daughters spent time with him today, and government officials paid visits as well. To Pretoria, now, for the latest. Nkepile joins me, Nkepile Mabuse, our correspondent, is outside the hospital.
Nkepile, the turn of phrase "he is critical" suggests, obviously, a turn for the worse. We know the family has been visiting, have now left. What's the situation?
NKEPILE MABUSE, CNN INTERNATIONAL CORRESPONDENT: Richard, Mr. Mandela has been in and out of hospital four times since December, and this does feel different, Richard. We've seen family members come to this hospital, visit. But we're now increasingly seeing more people connected to Mr. Mandela, government officials coming to see Mr. Mandela.
The president of South Africa has come to see Mr. Mandela twice already, President Zuma, a traditional man who has for many years avoided talking about the inevitable, like many other South Africans, is now sounding like a man who's trying to prepare this nation for the worst.
He's, of course, repeated that doctors are doing everything they can to try and help Mr. Mandela recover from this recurring lung infection, but he reminded South Africans today that Mr. Mandela is old and people need to accept that.
He's 94 years old, due to turn 95 next month. And he's had a long list of ailments, and he's been fighting in this hospital for his life for the past 17 days. So obviously, the entire country is holding its collective breath, but you do get a sense, Richard, that people are coming to terms with the inevitable. Richard?
QUEST: The -- phrase that one remembers from when it's been announced with royalty and kings and things, a life drawing to a close. And if we take what you're saying, Nkepile, it sounds like South Africa is being prepared for that moment.
MABUSE: There's so much -- there's a bit of somber resignation, in a way. There's a man in Soweto that was interviewed today, and he said the day will come when medicine, medical help, will no longer be enough.
A couple of weeks, a couple of months ago, Richard, this would not have been the kind of conversation that ordinary South Africans would be having.
So because he's been in and out of hospital and people have been living with fear that he may leave them, they have actually started to accept that Nelson Mandela, as much as they love him, as much as they want him to live forever, he is, after all, mortal, Richard.
QUEST: And that's Nkepile Mabuse, who is in Pretoria for us tonight and of course the entire team at CNN is watching and will bring you any details and events as and when they're occurring.
Nkepile, we thank you for that.
Other headlines tonight, U.S. officials say Edward Snowden, the man who leaked America's classified documents, is a wanted man. The White House spokesman, Jay Carney, said he should not be allowed to proceed any further on his global flight from the authorities. It's presumed Snowden is in Russia, where he landed on Sunday on a plane from Hong Kong.
Syria's foreign minister said the West's plan for arming rebels will just prolong peace efforts and undermine talks set to take place in Geneva. Meanwhile, the Syrian conflict continues to spill across the border. Twelve Lebanese soldiers have been killed in the southern city of Sidon.
Now onto other news. Silvio Berlusconi will appeal against his conviction for paying for sex with a minor and abusing his position. The former Italian leader has been sentenced to seven years in prison and barred from holding public office. That's a sentence that has been currently suspended.
Our senior international correspondent Ben Wedeman is in Rome.
Ben, I'm getting a bit lost at the moment with the number of convictions, appeals, sentences, suspended sentences and we always finish with the line, he's expected to serve no time in prison.
What's happening?
BEN WEDEMAN, CNN INTERNATIONAL CORRESPONDENT: Join the club, Richard.
Your confusion is shared by many people because there are so many cases against Silvio Berlusconi that it really is difficult to keep them straight. In fact, it goes back 20 years almost, to his entry into Italian political life.
Now of course, this case involving the infamous Ruby Rubacuori, "Ruby the Heart-Stealer," as she's known, the at-the-time underage Moroccan-born exotic dancer, has resulted in a conviction but he still has two levels of appeals.
Probably more importantly, however, is the media set tax evasion case involving his media empire. Now he has already had one appeal rejected by the courts. He has one appeal left and that appeal comes up in November. If in that case the courts uphold the conviction, he will be out of public life for at least four years.
He may spend some time in jail even though as a man over the age of 70, his sentence is automatically reduced. But I can reassure you, Richard, probably Silvio Berlusconi himself can't keep track of all the cases he's involved in, Richard.
QUEST: OK. I don't want to preempt or prejudge any appeal decision. But, Ben, is it your gut feeling that Silvio Berlusconi doesn't spend a night in prison?
WEDEMAN: I would not be willing to bet my gut on that, Richard. There is a very good possibility that after dodging the bullet, so to speak, for many years, that his luck may be running out. His age is in his favor, as I said before. There was a law passed by the Italian parliament to try to reduce overcrowding in Italian prisons.
Therefore, if you're over 70, you automatically have your sentence reduced. But I would not bet on it that he's not going to spend at least one night behind bars, Richard.
QUEST: Ben Wedeman, who is in Rome for us tonight.
E.U. leaders will discuss and debate the issue of youth unemployment. It is the single biggest worry facing the European Union at the moment. Almost a quarter of people under 25 are out of work and in Spain, that number is 56 percent. All this week we're going to be looking at the scourge of youth unemployment.
The crisis and what can be done: let's begin in Spain in Madrid. Our correspondent there is Al Goodman.
(BEGIN VIDEOTAPE)
AL GOODMAN, CNN INTERNATIONAL CORRESPONDENT (voice-over): A protest with suitcases in hand, nearly half a million Spaniards have left the country because of the economic crisis. These protesters at a Madrid train station dramatized the exile.
But these two friends now graduating from university say they'll be part of that exile and soon. Livia Blanco and Paloma Fernandez studied business administration and know this statistic: 57 percent of young Spaniards like them are jobless.
LIVIA BLANCO, COLLEGE GRADUATE: The situation is really bad now and we don't have a clear view of what is going to happen.
PALOMA FERNANDEZ, COLLEGE GRADUATE: We don't have any job guarantees and it's really, really scary.
BLANCO: Yes, you do have the sense of, well, I've studied four years for really nothing because if at the end I'm going to be working a cafeteria or, I don't know, it's like there's no point. I've lost four years.
GOODMAN: Do you believe in your government, that it has the capacity to get Spain out of the crisis?
FERNANDEZ: No, (inaudible).
BLANCO: No. It's getting even worse. Like they try to fix it and it's getting the worse.
FERNANDEZ: We both are thinking about going to Latin America.
GOODMAN (voice-over): At the university library, they search for jobs online. But see they're realizing just how fierce the competition is.
GOODMAN: The situation is tough for college graduates here, but it may be even tougher for another group of young Spaniards, those who only have a high school diploma or dropped out and went straight into the job market.
GOODMAN (voice-over): Like these two friends also looking for jobs online. They graduated high school just before the crisis started and easily got jobs in stores or swimming pools -- for a while, but no longer. They just turned 25.
Trying to become more competitive, Javier Prado moved to England to learn English. He's been there a year, working part-time as a dishwasher to help pay the bills. He hopes to become a hotel receptionist. We caught up with him on a visit back home to Madrid, and he t us to his boyhood park.
JAVIER PRADO, WORKING IN ENGLAND: My parents was living with good jobs, with continuing it. In my case, in the case of the young people in Spain and now it's impossible. The people are so very, very angry with the government. There aren't solutions. There are like a black future.
GOODMAN (voice-over): Back at the university, they concur.
FERNANDEZ: We are a lot of people we (inaudible) that there's no jobs. So yes, it's like a lost generation.
GOODMAN (voice-over): Which they want no part of. They get a small break. Their professor, in the middle, introduces them to a professor visiting from Chile, a country where they would like to get jobs -- Al Goodman, CNN, Madrid.
(END VIDEOTAPE)
QUEST: Tomorrow we'll continue our in-depth look at Europe's lost generation by focusing on the United Kingdom. We hear from university students who are about to graduate with few job prospects.
Before we take a break, the market has come back quite dramatically, down just 43 now, at 14,755. Why has the market come back so sharply? Good Lord; you never know who you're going to find lying around on the floor. Why has the market come back so sharply?
FELICIA TAYLOR, CNN BUSINESS CORRESPONDENT: Richard Fisher, which is one of the Federal Reserve in Dallas, governors, he has basically come back and said that, you know, maybe the tapering shouldn't happen so quickly. He's always been very hawkish. Now he seems to be taking more of a dovish stance, and that's why the market has come back.
QUEST: It's tenuous reasons for coming back.
TAYLOR: It's tenuous reasons. But in this kind of a market, anything like a headline like that will change things.
QUEST: (Inaudible) you in a moment. You never who you're going to find on the floor of the New York Stock Exchange. Well, I mean, not literally on the floor. Well, maybe -- you get the idea. When we come back in just a moment, Delta and Virgin, two airlines; they've signed the deal. Delta is now more experienced, 49 percent owned by the U.S. carrier. QUEST MEANS BUSINESS.
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(COMMERCIAL BREAK)
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(BEGIN VIDEO CLIP)
QUEST (voice-over): The answer to tonight's "Currency Conundrum," I asked which country mints Ecuador's coins? The answer is Canada, C. The Royal Canadian Mint prints the coins -- I think you mint the coins -- for Ecuador and other South American countries, including Bolivia, Venezuela and Uruguay.
Delta Air Lines and Virgin Atlantic are now together. Delta has completed its deal for 49 percent of Richard Branson's Virgin Atlantic. The two will now offer more code sharing, greater destinations and connectivity. I put it to Virgin's chief exec that by now being owned -- or at least 49 percent owned by Delta -- could crimp its expansion as a network carrier.
(BEGIN VIDEOTAPE)
CRAIG KREEGER, VIRGIN ATLANTIC CEO: I think we have a set of features and products and service that makes us an attractive airline for our U.K.-based customers. But in order to be able to offer the breadth of network to the U.K. customers, we need to get revenue from the other side and we need to be able to serve all the markets they want to go to.
And I think the Delta transaction and their relationship with Delta will really create a lot of that -- on the transatlantic basis.
But that said, we have a lot of things we need to look at elsewhere. And we have partners in many other destinations that we serve that are very important to us. And we -- and so we think we can generate value both from the U.S. and the U.K. marketplace as well as from the rest of our markets.
QUEST: Delta has done a huge job in raising its service in recent years. And you spent a shedload of money to do this on planes and service.
But there is still a service mismatch, perhaps, between, say, upper class and your elite -- and your premium product.
So is it all to bring the two products together still further?
ED BASTIAN, PRESIDENT, DELTA AIR LINES: Well, I think the goal is to bring the products into a complementary relationship. The Virgin brand's a great brand. It stands for a service offering that is a little different than Delta. Delta's a little more of a traditional carrier. It's more of a global carrier than a U.K.-specific carrier.
And so I think we bring a lot to the table. But the brands -- in the latest surveys that we see across the North Atlantic, the business cabin surveys show Virgin and Delta as being the two most preferred brands by the business travelers that we're both eyeing for.
(END VIDEOTAPE)
QUEST: That Ed Bastian of Delta and Craig Kreeger of Virgin Atlantic.
Here in New York is a Yiddish word for the temperature out there, schvitzing. It means you're literally boiling. The weather or the temperature, they use Fahrenheit in the United States, still stuck in the last century. So they say it'll be 95 degrees or 93-94 degrees.
Jennifer Delgado at the CNN World Weather Center will be able to translate that into new money for us.
JENNIFER DELGADO, AMS METEOROLOGIST: Yes, new money and you want it in Celsius, too, I'm sure.
Yes, we are talking, Richard, it is going to be hot in New York in the northeast. Temperatures are going to be in the lower 90s and that roughly means your lower 30s. But I don't know what you're complaining about, because you're inside, dealing with nice air conditioning there. So quit your whining over there.
But right now, let's talk about what's been happening across parts of Canada.
Yes, flooding there, yesterday we were talking about Alberta. Well, Alberta, you're starting to see the river levels starting to recede there. But unfortunately some areas are still dealing with some very high water levels. And we're talking right along the South Saskatchewan River, as we show you an area called Medicine Hat.
The river level there has actually risen 6.5 meters in the last 48 hours, very rapidly. And that's why so many people had to be evacuated out of the area of Medicine Hat. Let's go over to some video to show you what they're dealing with on the ground there. Rushing water everywhere, and again, homes are being flooded, businesses, people are being displaced and, of course, evacuated for their safety, especially when the river level has risen so quickly.
And you see people looking over bridges there. But we do know many of the bridges there are impassable. But this was a record crest that was set Sunday night. Now we talk about what's happening in Canada.
Yes, as we head over toward our graphic, we do have some showers out there, very light stuff, but certainly this is not what you want to see, especially when you're dealing some widespread flooding like that.
But as we go through the next couple of days, we are going to see the sunshine returning, temperatures going to be much more comfortable. I'm sure Richard would like to see something like this, in the 20s. But the reality is some areas are going to be much warmer than that.
Now we move across parts of Europe and Central Europe. We have this trough that's causing some cool weather as well as rainy conditions including parts of Prague and the areas over towards the southeast are actually enjoying the warmth.
And we're talking for areas like Sofia as well as into Bucharest, temperatures running about 5-8 degrees above average. But for Prague, it's rather cool there. And the temperature should be in the lower 20s. But we're running almost 10 degrees below average for this time of the year.
Now another story that we're following is the weather in London, because right now, I guess Richard would rather be in London where it's nice and cool, 16 degrees right now, temperatures are seasonal, but of course, Wimbledon is going on and the weather is cooperating.
And as we go through Tuesday, Wednesday and Thursday, we are going to keep (inaudible) like conditions are going to be mostly dry. But of course when we're talking about England, you could always work in a shower or two. Right now, we'll turn it back over to Richard. And speaking of a shower or two, I guess it's so hot there, he may want to run to the shower and get some relief.
QUEST: That is excellent. We will hope -- thank you very much, Jennifer Delgado. Excellent weather. Believe the temperatures aren't quite like these nice, warm temperatures --
(CROSSTALK)
QUEST: -- this sort of thing after a brutal winter in London, I can live with this for a while.
Jennifer, thank you for that.
When we come back, anybody's who been to New York knows only too well everybody has their hand out, a tip here, a tip here, a tip just about everywhere. Now one restaurant in the city has said enough's enough. We visit the restaurant where tips are shunned. QUEST MEANS BUSINESS.
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QUEST: Anyone who has been to New York or indeed any restaurant in the United States knows that moment of gut-wrenching fear when you get the bill and you have to start working out how much to tip. No longer the little nicety of Europe or Asia, just round it up or add on a couple of bucks or pounds or yen or euros.
In this city, if you don't add on 20 percent, you stand likely to be run out of the restaurant on a rail. Now one restaurant's saying enough's enough. Felicia Taylor, who always keeps her wallet close to herself, went to investigate.
(BEGIN VIDEOTAPE)
TAYLOR (voice-over): It may sound fishy, but tipping is now off the menu at New York's Sushi Yasuda. As the bill says, "gratuities are not accepted."
SCOTT ROSENBERG, CO-OWNER, SUSHI YASUDA: Customers would say, oh, my God, no more tipping. And then they'd look at each other, perplexed. And then they smile. And then the typically reaction was like, OK, neat.
It's all good.
TAYLOR (voice-over): There's no tipping in Japan. So Sushi Yasuda says it shouldn't be done here.
ROSENBERG: Our customers get to enjoy this beautiful meditative, contemplative meal. And at the end of the meal, they don't have to take out their calculator, think about, oh, what percent do --
TAYLOR: Fifteen? Twenty?
ROSENBERG: None of that.
TAYLOR (voice-over): Diners may love it, but nightlife writer Michael Musto says don't expect other restaurants to follow.
MICHAEL MUSTO, WRITER: I think this is a one-of-a-kind. I think it'll go down as a footnote in restaurant history.
TAYLOR (voice-over): After all, this is a city where everyone has their hand out. Tip jars are everywhere and, of course, cabbies always want a little something extra.
UNIDENTIFIED MALE: I think for me the New Yorker is the best tipper in -- I think in the world.
TAYLOR (voice-over): With everyone looking for a tip, some believe New York has reached a tipping point.
MUSTO: Everyone's entitled to have a tipping bowl. I might have one at my own door for whatever services I provide. But that doesn't mean you're going to get a tip. I mean, just laying over a hot dog with some sauerkraut doesn't deserve that much of a round of (inaudible), do you think?
TAYLOR (voice-over): But food cart vendors do want to feel the love.
TAYLOR: It looks pretty full.
UNIDENTIFIED MALE: Thank God.
TAYLOR (voice-over): They say the extra cash makes a difference.
UNIDENTIFIED MALE: If you're having a good day and there's two people here, you might end up going home with $10-$15 each. So it helps.
TAYLOR (voice-over): The staff at Sushi Yasuda are not getting a raw deal. Higher wages compensate for no tips. And the restaurant says there are other ways customers can show their appreciation.
ROSENBERG: By speaking to a manager, the host, going on social media.
And then all together all at once.
TAYLOR (voice-over): But if you want to flash more cash --
TAYLOR: It's sublime.
ROSENBERG: Well, thank you very much.
TAYLOR: You sure I can't leave a tip?
ROSENBERG: Can't leave a tip.
TAYLOR (voice-over): -- here's a tip, take the savings and buy more sushi instead -- Felicia Taylor, CNN, New York.
(END VIDEOTAPE)
QUEST: So what's your rule of thumb for tipping?
TAYLOR: On average -- but I mean I really do base this on service. On average 15 percent to 20 percent. But it's --
QUEST: Twenty percent?
TAYLOR: It's a lot. But I mean, you have to think about who -- I mean, for instance, a hot dog vendor. You're not going to give them 20 percent. You might round up. But nevertheless, I mean, there are tipping jars in even a dry cleaner in this city.
(CROSSTALK)
TAYLOR: (Inaudible) ridiculous.
QUEST: And there you give your loose change or you give whatever.
But this -- anyway, we'll talk about this in a "Profitable Moment."
The market's up at the moment, down, sorry; down 36 points.
Felicia, but it's come back. It's come back.
TAYLOR: We're going to be joined now by Ben Willis, who's one of the traders here at Albert Fried.
What -- how would you characterize this market? I mean, it has gone down from 217 to just 35.
BEN WILLIS, ALBERT FRIED & CO.: Volatility.
TAYLOR: Why?
WILLIS: It's -- well, many reasons. China's the most important reason today for the volatility. But that was the case Friday as well. But before that was our own Ben Bernanke. But to this week, you have the final week of the quarter. So you're ending a very profitable quarter; however, you're ending a very unprofitable month.
(CROSSTALK)
TAYLOR: Sort of like a cat on a hot tin roof.
QUEST: You go first.
WILLIS: Exactly. The market's a cat on a hot tin roof. Everything's going to move. What we had today was a virtual animal farm. You had hawks and doves and feral hogs being slaughtered. Everybody knows that.
TAYLOR: You're talking about Richard Fisher and his comments at the Dallas Federal Reserve?
WILLIS: Correct, Richard Fisher, who's a known hawk, made a comment about feral hogs. (Inaudible) bulls and bears make money; hogs get slaughtered.
QUEST: We've got 600 million shares -- several hundred million shares, give or take, that's been traded. So average (inaudible) medium heavy, not particularly heavy.
Does that tell us that people are actually trading at these sort of numbers? Or are they just shoving the stuff about?
WILLIS: Right now volume's slightly better than usual. But the last day of the month, we're hoping that that will pick up over time, as you see a rotation out of the poor investment choice of staying in bonds over this month and moving that money eventually into equities, which will pick up volume.
TAYLOR: This is also the end of the quarter. So that's going to add to the volatility.
WILLIS: Absolutely it will add to it and that's what we're seeing. Tomorrow, it'll have most portfolios will have to close their books. But then the last day of the month, you get that fun little treat called window dressing. So Friday could be a lot of fun. You have a reweighting of the Russell (ph) as well, which will add a significant amount of volume.
QUEST: (Inaudible). Our viewer -- yes, you'd better buy.
Our viewer -- or maybe you were selling. Or maybe neither. Maybe you were (inaudible).
WILLIS: Had that choice not to do it.
QUEST: Maybe you were down buying (inaudible) futures (inaudible).
WILLIS: (Inaudible) 20 percent.
QUEST: What do you think about the tipping at 20 percent?
WILLIS: Having been a bartender for many years, I tip based on service and I'll tip above 20 percent if the service is good. But I have no -- I have no problem in a very old school leaving a penny on the tab --
QUEST: Have you ever done that?
WILLIS: Absolutely if I've --
TAYLOR: Wow, really?
WILLIS: Absolutely.
QUEST: I got chased out the street in a restaurant in New Jersey once because I'd rounded it up and it had come to 17.5 percent and it wasn't 20 percent and the waitress ran after me, saying, was there something wrong? You didn't give me the 20 percent.
WILLIS: I have no problem saying, yes, there was. That's why I left a penny. Because if you're in the service business for more than a month, you know what that means. It means you screwed up.
QUEST: (Inaudible). Finally, our viewer needs to know -- the viewer -- how does one make -- briefly -- any sensible, serious investment decisions in this environment?
WILLIS: This is a time when the big money makes money. You -- when everybody else is panicking, when the hogs are being slaughtered, you stand your ground. You buy the companies. You know and understand.
And when you -- that's when you add to them. You wait for a sale to go on at Macy's. Why don't you wait for your stocks to go on sale at the New York Stock Exchange? They're on sale. Step in.
TAYLOR: So you think the market's going to (inaudible) from here?
WILLIS: It may. But why try and pick a bottom (ph)? You need to be buying (inaudible).
(CROSSTALK)
QUEST: (Inaudible) themselves over there.
We will be back in a moment. The "Profitable Moment" is next.
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(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment," I've always found the whole concept of tipping in this country to be absolutely bizarre. This idea that you have a given amount that you have to give, supposedly discretionary for good service.
And what's worse, what employers are doing, shopkeepers, restaurants, garages, what they are doing of course is transferring the onus of their wage bill from themselves to you.
If I thought for one moment that the employee did get more money as a result of this, perhaps I would be more equanimity about handing it over. But I know that the employer pays less because I pay more on the tip.
And anyway, that's not a tip. That's a salary if I'm paying it as a matter of course. The truth is tips are for good service and good service alone. And if you don't get it, I don't know whether you're in Newcastle, New York or New Delhi, you simply refuse to pay.
You may have some uncomfortable moments, but that's the way to do it. And that is QUEST MEANS BUSINESS for this Monday night. I'm Richard Quest at the New York Stock Exchange.
Whatever you're up to in the hours ahead, I hope it's profitable. I'll see you tomorrow.
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QUEST (voice-over): The headlines at the top of the hour: there's no sign of Edward Snowden, the man who leaked America's surveillance secrets. More than a day after he landed in Russia, U.S. officials say they're assuming he's still there and they're asking Moscow to send Snowden back to face espionage charges.
Meanwhile, Ecuador says it's reviewing Snowden's asylum request.
The anti-apartheid icon Nelson Mandela remains in the hospital in Pretoria in South Africa. He's described as being in critical condition. South African President Jacob Zuma released a somber statement saying doctors are doing everything possible to ensure Mandela's well-being and comfort.
The Emir of Qatar is reportedly handing over power to his son, Crown Prince Sheikh Tamim bin Hamad Al Thani, according to the Al Jazeera network. The official announcement is set for Tuesday. The emir is credited with turning a tiny desert nation into a global economic power.
The former Italian prime minister, Silvio Berlusconi, has been sentenced to seven years in prison and banned from holding public office after being found guilty for paying for sex with an underage prostitute and abusing his official powers.
(END VIDEO CLIP)
QUEST: You're up to date with the headlines. Now in New York, "AMANPOUR" is live.
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END
