Return to Transcripts main page
Quest Means Business
US Budget Battle; US-Iranian Diplomacy; JPMorgan May Reach $11 Billion Settlement; US Stocks Slightly Higher; Western Union NGO Plan; European Markets; Lloyd's Profit Slips; Pilots Caught Snoozing; Make, Create, Innovate: Miracle Material
Aired September 26, 2013 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
RICHARD QUEST, HOST: There you have it. The final flourish. Absolutely. After five days of losses, the markets are up, it's the closing bell on Wall Street, for today, Thursday, the 26th of September.
In this hour, the UN's foreign ministers meet, hoping to jump start a nuclear deal with Iran. We will have the details as it happens.
Western Union's chief executive tells us how he's making it easier to get money to far-off places in need.
And PayPal's president tells us how he's making it easier for you to pay with your mobile.
We're all about money, because I'm Richard Quest. I mean business.
Good evening. The countdown continues. It is just four days, that's how long before the US government needs to pass a budget plan and before the United States closes for business, at least the federal government.
President Barack Obama says he's being blackmailed by Republicans over the possible government shutdown. While talking about his health care plan in Maryland, the president warned the battle over the budget threatens stability across the globe.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We are the world's bedrock economy, the world's currency of choice, the entire world looks to us to make sure that the world economy is stable. You don't mess with that.
(END VIDEO CLIP)
QUEST: Now, the market was up some 50-odd points. The Dow Jones Industrial, as you just saw the closing bell a second or two, as the numbers will tick over, we'll get a final number from Alison Kosik in a moment.
But it does seem with four days to go, the market's not too concerned. Diane Swonk is live from Chicago, chief economist at Mesirow Financial. Diane, simple question: are you worried?
DIANE SWONK, CHIEF ECONOMIST, MESIROW FINANCIAL: Of course I'm worried. We don't want to see the government shut down. It could affect more than a million people this time around, much more than 1995, 96, when we had the 21-day shutdown and five days, also, in November of that year.
If we had a two-week shutdown, it would take about three-tenths off of GDP in the fourth quarter, which would take it from a 2.5 percent quarter back down to a near stall rate again kind of quarter.
But the more important issue is, this is just a prelude to the showdown over the debt ceiling, which is also rapidly approaching.
QUEST: Right.
SWONK: We've got -- not had a budget in four years --
QUEST: OK.
SWONK: -- and this is real problems here.
QUEST: But your contacts and what you're hearing -- and let's face it, Washington, the treasury, the Fed, they like to keep people like you onboard, so are they -- are you getting messages from Washington and from decision-makers on this debt ceiling issue?
SWONK: What I'm hearing on the debt ceiling is that if all else -- push comes to shove, that the president could use his executive fiat and raise the debt ceiling to avoid an actual default, that it could actually get down to -- which would be very -- a lot of uncertainty for financial markets the world over -- that it could get that ugly that the president may have to do that.
That would trigger a whole line of suing by Congress, it would take years to play out, and so certainly beyond the term of the current presidency. So, that would be one way to get around it, but not a very pleasant way.
I think the other issue that's really interesting is all the political handicappers that I know in Washington, everyone who's closest with their ears to the ground, I have never seen so many people who say we just don't know what they're going to do come Monday night. Will we have a government shutdown?
And that's really stunning. Usually you get a much better sense by now that we won't have a government shutdown, and actually, that's not the case at all right now, some putting it as high as 50 or more percent of a government shutdown risk --
QUEST: But --
SWONK: -- for Tuesday morning.
QUEST: But the interesting thing is, the real danger in these is not what might happen, but the unexpected.
SWONK: Yes.
QUEST: And I'm thinking of the Triple-A, when the US lost its Triple- A --
SWONK: Right.
QUEST: -- and when Congress didn't vote for the TARP. You can predict certain things, but it's this volatility that comes out of nowhere when suddenly there's an accident that -- basically, an accident happens because nobody was watching.
SWONK: Right. And I think you made a good point, especially on the TARP. And a lot of Wall Street, the disconnect between Wall Street and Capitol Hill is quite large at this point in time. They say, oh, they're crying wolf, we've been through this many times, it's not going to really happen.
And then when it really does, the market absolutely falls apart, and I think that's the real risk we're running here is that even a short-term closure of the government and flirting with the fact that we may default on our debts or social security checks may not be delivered if the debt ceiling's not raised quickly enough, even flirting with those possibilities has huge dangers for Main Street and actually Wall Street volatility.
And that, actually, does feed through, the financial economy is the backbone of the real economy. Without money, we don't have a capital economy to go on -- to move on.
QUEST: Finally -- all right. So, why is the market not more disconcerted about all of this?
SWONK: I think there's really a desensitivity out there. I think they really think that Washington's crying wolf. We've been down to these last-minute things before, we've gotten over the hurdles.
But there also is a disconnect of how messy it was. Remember, we did get our debt actually downgraded. It was largely ignored the world over. That's nice.
QUEST: All right.
SWONK: But it's not clear that it will be as nice next time around.
QUEST: Diane Swonk joining me from Mesirow Financial. We thank you for that. As the countdown continues, we will continue to keep in touch with you.
Now, tonight, a crucial milestone for US-Iran relations. We're about to see the highest level talks between the two countries since 1979. The US secretary of state John Kerry and Iran's foreign minister will meet with leaders from the so-called P5+1 -- Russia, China, the UK, France, and Germany. And it'll address Iran's nuclear program.
Earlier at the United Nations, the Iranian president Hassan Rouhani, called for a nuclear-free world. This is what he said. "The world has waited too long for nuclear disarmament. The indefinite possession of nuclear weapons cannot be tolerated nor can their complete elimination be further delayed."
Nick Paton Walsh is at the United Nations for us. Nick, so, they're having this meeting. Now, in the past, whenever they've had this meeting, Iran wasn't there, or Iran was the person they were -- country they were talking about. So, this is an absolute sea change to have them there while they discuss Iran.
NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Richard, the sea change we've also seen has been the rhetoric from the Iranian new president, Hassan Rouhani, a very moderate message here, selling peace, selling the fact he wants a deal within three to six months. He told "The Washington Post" even might compromise a bit on their uranium enrichment.
But the real issue we're waiting to see, this meeting getting underway any moment now, we haven't yet seen the permanent five members actually walk into that meeting room. But the issue is what substance is there inside any discussion. We've seen this symbolism, the highest-level meeting in 34 years. The closest they got was 2001 when Colin Powell just shook the hand of his counterpart.
This is the actual face-to-face conversation that comes on the back of all Rouhani's comments this morning, saying they, as he said before, they don't want their nuclear power -- they don't want any nuclear weapons in the Middle East at all, most importantly pointing out the fact they think Israel should become of the nonproliferation treaty. The point is, what's going to be substance of these talks, Richard.
QUEST: OK. So, with all of this taking place, because Israel -- if you look at what the prime minister of Israel said after Rouhani's speech to the UN, basically it's not just verify, it's we don't believe you. So, where does the onus of proof lie in this?
WALSH: Well, what I heard from one diplomat after the meeting between the French president, Francois Hollande, and Rouhani, which happened on Tuesday, is one of the things actually getting to the Iranians is the sense that they have to prove their innocence rather than having their guilt proven.
And that, of course, brings in the role of inspectors. That may be a key feature of these talks. We know enrichment will be on the table. We know inspectors could go in, perhaps, on a more stringent regime. That's certainly what many of the Western powers will want to see.
But certainly, I think that sense of the onus being on them to prove their innocence goads them slightly, although at this point --
QUEST: All right.
WALSH: -- we are seeing a significant change in their posture, Richard.
QUEST: Nick Paton Walsh from the United Nations. And Nick, we'll be back with you and we'll be talking about that when that meeting takes place and we get the first pictures of it.
When we come back, we'll look at the markets. The Dow is up -- oh, 50-odd points. It broke a losing streak, a five-day losing streak, just up 55. Alison Kosik will be at the Exchange in a moment. QUEST MEANS BUSINESS.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: JPMorgan's CEO paid a visit to the US Justice Department today. Jamie Dimon is looking to settle a slew of outstanding claims. It's all about missold mortgage securities. Alison Kosik is at the New York Stock Exchange.
The pictures I've seen, Dimon showing his path as he goes in, having direct negotiations with the attorney general of the United States, Eric Holder, which tells us all we need to know, I think, about the seriousness.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Oh yes. If you ask Jamie Dimon what he wants to happen, if he has his way, Richard, all of these -- what? -- dozen or so state and federal investigations would be over in one fell swoop. But to make these -- all these investigations kind of go away, JPMorgan's going to have to pay up big, possibly $11 billion.
JPMorgan's really been under quite the microscope, accused of packaging and selling these bad mortgage-backed securities.
QUEST: Right.
KOSIK: Jamie Dimon, yes, he does seem to be in good with them, but they -- don't be surprised if they ask him to pay up, Richard.
QUEST: And we have one day of -- gains, not good gains, and I'm guessing they've got gains, it's one of those days, Alison, the market went up because it didn't go down.
KOSIK: That is part of it. And not a lot of investors really diving in today.
QUEST: Right.
KOSIK: We watched the market kind of swing back and forth, mostly on headlines and not really anything else, Richard.
QUEST: Alison Kosik at the New York Stock Exchange watching over there. Now, just across the town, uptown from Alison, across town from me, the Clinton Global Initiative has been underway all week. The annual event brings together the top minds in business and leaders from around the globe, and the goal is to find solutions to the world's most pressing challenges.
Western Union is expanding a service to get money to rapidly aid workers in remote parts of the world, especially in times of disaster. The chief executive, Hikmet Ersek, joins me now over in the C Suite this evening. Good evening, sir.
HIKMET ERSEK, CEO, WESTERN UNION: How are you?
QUEST: Good to see you. Thank you for coming in.
ERSEK: Thank you.
QUEST: What's the problem? People have always been able to transfer money with Western Union, so why have you had to put -- have you come up with this plan to get the money to those aid workers?
ERSEK: To the last mile -- we overcome the last mile. What happens is that if you send money -- an NGO sends money for aid workers, it takes time. It's not transference. Sometimes, the money disappears.
Sometimes -- I'll give you an example. What happens is that a teacher that teaches students has to leave the classroom and go and pick up the money, and that's a day trip. So, students can't be taught, and the money doesn't come there.
So, we came up with a solution called NGO Pay, which we really sent money from the NGO direct to the teacher, so the teacher doesn't have to leave the classroom in the rural areas.
QUEST: So, the NGO pays the teacher.
ERSEK: Yes.
QUEST: And the NGO then gets the money back from you.
ERSEK: Yes.
QUEST: Sounds simple. Why has it taken you so long?
ERSEK: Well, it didn't take us too long. I think it --
(LAUGHTER)
QUEST: I'm being uncharitable.
ERSEK: What happened -- well, what happened is that -- I have to say, my compliments to the Clinton Institute, because President Clinton was pushing us to give a commitment here, and saying that, OK, we have to come up with solutions that satisfy the NGOs.
QUEST: How -- let's just talk about more generally at the moment, if we may, we're facing a US government shutdown next week, we've got an economy that's weak, global economy's weak, you're at the heart of payment transfer systems globally, aren't you?
ERSEK: We are. We are for certain customers, our customer is the base of the pyramid, and then always look, where is the base of the pyramid? For instance, in developed countries, the migrants are the base of the pyramids, which they support their families back in the emerging markets.
Actually, the fifth-biggest nation worldwide has no borders, has no anthem, has no flag, growing by 40 percent the last 10 years, are the migrants. You see them as the fifth-biggest nation.
QUEST: Right. And what are you seeing in what they are doing at the moment? How are they weathering coming out of the global economic crisis?
ERSEK: It's interesting. It's dependent on the places. In Europe, for instance, Spain, Spain was one of our up countries. You spend money, attracted the migrants, you did spend money from Spain to Morocco, to Romania, to other countries.
However, now Spanish people are immigrating to Germany, to other places, and they support their families back -- so, it's changing.
QUEST: Right. But are they the beneficiary -- I suppose what I'm saying is, you know the old phrase, never waste a good crisis. Are you one of the beneficiaries of the crisis that we had that people are starting to use what you sell
ERSEK: I think we did see also some slowdown after 2009, 2008, 09 crisis. I think that unemployment rate doesn't -- the low employment --
QUEST: Yes.
ERSEK: -- it's not helpful. I think job creation is very important for us that they're rebuilding the houses, the service industry attracts migrants, it attracts a workforce that helps our business also.
QUEST: We could talk much more. We haven't even touched on fraud and the problems you've got with that, so that mainly means you have to come back again on a future occasion.
ERSEK: Sure, I will do so.
QUEST: Many thanks, indeed.
ERSEK: Thanks.
QUEST: Now, European markets, they finished the day mixed. Milan's FTSE fell back more than 1 percent after Italy's government lurched closer to crisis. Members of Silvio Berlusconi's party -- just look at that, three down, one up. The party threatened to quit en masse from the ruling coalition if the 76-year-old is stripped of his senate seat over tax fraud convictions.
The head of the world's oldest insurance market says profits fell in the first half despite a relatively quiet period for claims. Lloyd's of London -- that's the insurance, not the bank -- they reported interim profits 2.1. That's down nearly 12.5 percent from the same period. Lloyd's chairman, John Nelson, told Jim Boulden why they had these results.
(BEGIN VIDEOTAPE)
JOHN NELSON, CHAIRMAN, LLOYD'S OF LONDON: Well, they fell because our investment returns fell significantly. The return in the first six months was 0.5 percent versus 1.2 percent in the previous year.
And the reason for that is very simple, that we -- the assets that are held by the Lloyd's market, because we're a general specialist insurer, are held to pay claims. So, they have to be held in very liquid form. So, roughly one-third is in cash or letters of credit --
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Yes.
NELSON: One third in corporate bonds, one third in sovereign bonds. And what actually happened was apart from the very low interest rates at the short end, we also saw some outward yield shift in the bond market.
So on a market-to-market basis, the income -- or the return came down as those bonds fell in value. That is a pattern which you've seen throughout the insurance industry over the last few months.
But the good news is that if we do begin to see interest rates tick up, from the insurance industry point of view, that will be helpful, because it will then improve on a more long-term basis our investment returns and give us more cushion.
BOULDEN: So, you didn't get any benefit, obviously, from holding cash, because there's no interest rate returns in the market, but because the Fed was thought to have tapered -- or would be tapering by now, bond yields rose, and that hurt you on the other side.
NELSON: That affected the bond yields, but not as much as it will of some other institutions, because of what I've just said about liquidity --
BOULDEN: Yes.
NELSON: -- the maturities on our bond yields -- on our bonds tend to be quite short.
BOULDEN: The first six months of last year, we saw the Costa Concordia --
NELSON: We did.
BOULDEN: -- major, major disaster, but Lloyd's wasn't hit that hard. Why?
NELSON: Well, it was hit. It was the biggest marine hull loss in history, and the cost of recovery are very high, and you've seen on the television some graphic pictures of what a wonderful job they've done in recovering it.
But in terms of the loss of a hull like that, which might be in total of the order of north -- probably north of a billion dollars, we will only take -- when I say we will only take -- we will take a loss of several hundred million dollars. But that in relation to the kind of losses we take on natural catastrophes is quite small.
BOULDEN: So, Lloyd's right now, your CEO is outgoing. By the end of the year, he will be gone. What process -- where in the process of replacing the CEO are you at the moment?
NELSON: Well, when we announced that he was going to go at the end of the year, we started the process just at the end of the summer to start a process of selection. It's a very thorough process, it's an international process, and I anticipate us making an appointment before the end of the year.
(END VIDEOTAPE)
QUEST: Chairman of Lloyd's talking to Jim Boulden. A row -- a nasty one -- has broken out over the two pilots who were sleeping in the cockpit. Now, the pair who work for an airline that's believed to be Virgin Atlantic, both fell asleep. Some reports say they fell asleep at the same time. And that is, in fact, the crucial question.
The UK Civil Aviation Authority and Virgin both say the pilots took it in turns to snooze, and one of them was always awake at the time of the incident of August the 13th. They were flying an Airbus A330, which was on autopilot en route to London. The pilots claim they'd not had enough sleep because of longer duties than normal.
Now, this is the thing. British pilots are allowed to sleep in the cockpit under certain circumstances. The -- actual rules of pilot rest are frighteningly complicated. It's to do with the number of hours, whether it's an overnight flight, the amount of rest, the number of days off.
But it is all dependent on the nature of the flight and how long they have been working. Sometimes, it can be a maximum duty of 14 hours at least, it requires breaks.
Then you add into the fact that the airline pilots' association says the CAA -- that's the British regulator -- has been far too complacent, they say, about tiredness, and a former pilot said it's not unusual for pilots to nod off.
(BEGIN VIDEO CLIP)
ALASTAIR ROSENSCHEIN, FORMER COMMERCIAL PILOT: I can't put a figure on it, but I think you'd find that it'd be very rare to find a pilot who hasn't fallen asleep at some point during a flight. These are long, tedious flights, long-haul, and it could be 12, 13-hour flights.
(END VIDEO CLIP)
QUEST: So, new rules are coming into force on both sides of the Atlantic. In the European Union, the rules will be concerning landing aircraft after 22 hours flying, two crew on long-haul flights, seven early starts in a row.
The pilots say that these new rules could jeopardize safety. The regulators say they don't. A vote is scheduled on the new rules on Monday, and as to exactly what did happen aboard that A330, frankly, there are only two people who know, and they're not giving interviews.
When we come back, it's been hailed as a miracle material that will change the world. After the break, Make, Create, Innovate.
(COMMERCIAL BREAK)
QUEST: Right now in laboratories across the world, scientists and engineers are coming up with new uses for the so-called wonder material of graphene. Harder than a diamond, stronger than steel, and more conductive than silicon, and so thin it's two-dimensional. In tonight's Make, Create, Innovate, Nick Glass meets the man who discovered it in the garbage can of his laboratory.
(BEGIN VIDEOTAPE)
NICK GLASS, CNN INTERNATIONAL CORRESPONDENT: A pencil and a roll of Scotch tape. Hard to believe that these were the basic tools for an extraordinary discovery of a wonder material that scientists didn't believe could exist.
ANDRE GEIM, PROFESSOR, UNIVERSITY OF MANCHESTER: Graphene is a material that is one atom thick, and this is a kind of material we have never seen before.
GLASS (voice-over): Extracted from graphite, the discovery of graphene won Andre Geim and his PhD student, Konstantin Novoselov, the Nobel Prize in 2010. Their experiments began with a mission to make the world's thinnest material, the first-ever 2D structure, and the strongest material on earth.
GEIM: We were struggling to make it thinner than 10,000 layers. We used Scotch tape on a regular basis to make the surface of graphite thing, and this Scotch tape went into a litter bin. The crucial moment at that time was to look what was in the litter bin, take this tape, and look in microscope. That was kind of a small eureka moment.
GLASS: Under the microscope, the flakes look more like an abstract painting, blocks of black, gray, and white. But in the corner, an almost transparent later.
GEIM: This piece is probably graphene, one layer thick.
GLASS: Graphene's structure is what has excited so many. A simple honeycomb or chicken wire arrangement of carbon atoms are responsible for its remarkable properties.
GEIM: In the thinnest material you can possibly imagine is the strongest material we're aware of. It's stronger than diamonds. It conducts electricity a thousand times better than copper. And the list goes on.
GLASS (on camera): Unbelievable to think that in the scratchings of a humble pencil on a page, a valuable commodity had been born.
GEIM: This material was literally in front of our eyes and under our noses for -- what? -- 500 years.
GLASS: It looks like a disc of the thinnest black paper. This is made of graphene, a thousand layers of it.
GLASS (voice-over): Coat a piece of plastic in graphene and it can run a current. And its strength means it's already creeping onto the market in a few tennis racquets.
GLASS (on camera): And soon, it's said, onto the screens of our mobile phones.
UNIDENTIFIED MALE: Take a look at this flexible mobile prototype.
GLASS (voice-over): Hundreds of patents have been taken out by companies like Samsung for different uses of graphene, here with its bendable phone screen.
UNIDENTIFIED MALE: Imagine the products you could design with this.
GLASS: So, can we predict a graphene-coated future?
GEIM: I'm a scientist, I'm not a politician. I can accurately predict only the past, and I can compare it only with the case of discovery of plastics. The next stage, when they come into consumer product and bring billions in terms of sales, I don't know when it will happen, but it'll probably happen.
(END VIDEOTAPE)
QUEST: That has to be the quote of the day for me, "I'm a scientist, I can only predict the past."
When we come back, McDonald's is known worldwide for its golden arches. The company wants to get you to know McHealthier options. The chief executive of McDonald's after the break. QUEST MEANS BUSINESS.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: Right now in laboratories across the world, scientists and engineers are coming up with new uses for the so-called "wonder" material of graphene. Harder than a diamond, stronger than steel and more conductive than silicone and so thin it's two-dimensional. In tonight's `Make, Create, Innovate,' (Nick Glass) meets the man who discovered it in the garbage can of his laboratory.
NICK GLASS, CNN INTERNATIONAL CORRESPONDENT FROM VIDEOCLIP: A pencil and a role of scotch tape. Hard to believe that these were the basic tools for an extraordinary discovery of a wonder material whose founders didn't believe could exist.
ANDRE GEIM, PROFESSOR AT UNIVERSITY OF MANCHESTER: Graphene is a material that is one atom thick, and this is a kind of material we have never seen before.
GLASS FROM VIDEOCLIP: Extracted from graphite, the discovery of grapheme won Andre Geim and his PhD student Constantine Novozhilov the Nobel Prize in 2010. Their experiments began with the mission to make the world's thinnest material, the first ever 2-D structure and the strongest material on earth.
GEIM FROM VIDEOCLIP: We were struggling to make it (inaudible) safe 10,000 layers. We used scotch tape on a regular basis to make the surface of graphite clean and this scotch tape won't enter a litter bin. The crucial moment at that time was to look what was in the litter bin save this tape and look in microscope. That was kind of a small `eureka' moment.
GLASS FROM VIDEOCLIP: Under the microscope the flakes look more like an abstract painting. Blocks of black, gray and white, but in the corner, an almost transparent layer.
GEIM FROM VIDEOCLIP: This piece is probably graphene, one layer thick.
GLASS FROM VIDEOCLIP: Graphene's structure is what has excited so many. A simple honeycomb or chicken wire arrangement of carbon atoms are responsible for its remarkable properties.
GEIM FROM VIDEOCLIP: In the thinnest material you can possibly imagine is the strongest material where it's stronger than diamonds. It conducts electricity thousand times better than copper. And the list goes on.
GLASS FROM VIDEOCLIP: Unbelievable to think that in the scratchings of a humble pencil on a page, a value commodity had been born.
GEIM FROM VIDEOCLIP: This material was literally in front of our eyes and under our noses for - what? Five hundred years.
GLASS FROM VIDEOCLIP: It looks like a disc of the thinnest black paper. This is made of grapheme, a thousand layers of it. Coat a piece of plastic in grapheme and it can run a current. And its strength means it's already creeping on the market in a few tennis rackets, and soon, it's said, onto the screens of our mobile phones.
Male FROM VIDEOCLIP: Take a look at this flexible all lead prototype.
GLASS FROM VIDEOCLIP: Hundreds of patents have been taken out by companies like Samsung for different uses of grapheme. Here, with its bendable phone screen.
Male FROM VIDEOCLIP: Imagine the products you could design with this.
GLASS FROM VIDEOCLIP: So, can we predict a grapheme-coated future?
GEIM FROM VIDEOCLIP: I'm a scientist, I'm not a politician. I can accurately predict only the past. And so I can convey only was the case of discovery of plastics. The next stage when they come into consumer product and bring billions in terms of sales, I don't know when it will happen, but it's probably happen.
QUEST: That has to be the quote of the day for me. "I'm a scientist . . . I can only predict the past." When we come back, McDonald's is known worldwide for its golden arches. The company wants to get future (inaudible) with healthier options. The chief executive of McDonald's after the break. "Quest Means Business."
(COMMERCIAL BREAK)
QUEST: (Inaudible) Quest, there's more "Quest Means Business" in just a moment. This is CNN, and on this network the news always comes first. The highest-level talks between the United States and Iran since 1979 are due to begin soon. U.S. Secretary of State John Kerry and Iran's foreign minister will sit down with a handful of world leaders to address Iran's nuclear program. Earlier today at the United Nations the Iranian President Hasan Rouhani called for a nuclear-free world. Authorities in Pakistan say 356 people have now died from the powerful earthquake that hit the southwest of the country. Rescue efforts are underway. Survivors are having to cope with high temperatures and a lack of drinking water. Interpol has issued a "Red Notice" for the British woman Samantha Lewthwaite at the request of the Kenyan authorities. She is known as the "White Widow" who is believed to be linked to the Islamist militant group al-Shabaab. There has been widespread media speculation over her potential involvement in the Kenya Mall attack.
J.P. Morgan's chief executive paid a visit to the U.S. Justice Department today. Jamie Dimon is looking to settle a slew of outstanding claims relating to mortgage securities said to have been mis-sold. He could be willing to part with up to $11 billion according to some reports. That will be the largest settlement to come out of the financial crisis.
They may be hours old and probably a little soggy, but there really is nothing quite like the taste of McDonald's French fries and the like. Now, the company has just announced a global effort to make their Happy and Value Meals a little bit healthier. The plans for 20 major markets were unveiled moments ago at the Clinton Global Initiative here in New York. Value meals include salad, vegetable or fruit substitute for fries and will vary based on the country. Happy Meals are no more soda on the menu boards, or at least advertising them as such. Instead, they will promote water, milk and juices. So, soda will not be used. Children's advertising in future will have 100% to include nutrition message. Now you just saw that -- in that video you just saw the head - the chief executive of McDonald's along with the head of the Alliance for a Healthier Generation on the program. They were introduced by President Bill Clinton as of course its initiative between CGI, McDonald's and the Alliance for Health.
The chief executive of McDonald's and the chief Dr. Howell Wechsler from the Alliance joined me earlier today. And all I needed to know is healthier meals - what took you so long?
DON THOMPSON, CEO OF McDONALD'S FROM VIDEOCLIP: We've been evolving for a number of years probably as you know, Richard, and we've been modifying our menus, we've been adding more fruits, more vegetables, whether they be wraps or smoothies or apples in Happy Meals. So we've been continuing to evolve over the years. This is just a great opportunity to accelerate that evolution.
QUEST FROM VIDEOCLIP: And on the Value Meals front, I can now ask for fruit or salad instead of fries, and on the Happy Meals we're going to be giving juices or water instead of sodas.
THOMPSON FROM VIDEOCLIP: So our top 20 markets around the world that represent 85 percent of our sales, you'll be able to ask for either a fruit or a vegetable - it may vary based upon the markets - but you'll be able to ask for a fruit or a vegetable or a different dairy-based product in lieu of french fries if you like.
QUEST FROM VIDEOCLIP: You're going to keep him honest. I mean, that's a fair way of putting it, isn't it? You've been brought along, Dr., to make sure he does what he says he's going to do.
DR. HOWELL WECHSLER, CEO OF ALLIANCE FOR A HEALTHIER GENERATION FROM VIDEOCLIP: We have worked with them throughout this process. We're very excited about it. It is going to increase access to fruits and vegetables for children and their families around the world, and it's going to harness the marketing might of McDonald's to motivate children to choose fruits, vegetables, water, low-fat milk - the healthy choices they need.
QUEST FROM VIDEOCLIP: Yes, in theory, yes, but if he doesn't live up to his promises, will you be on the phone to him saying `Oy, oy, get on with it'?
WECHSLER FROM VIDEOPCLIP: You can count on it. We have long history of working with companies. We have brokered agreements with over 100 food and beverage companies to improve the nutritional quality of what they send to schools in the United States. So we have a lot of experience with doing this, and monitoring it, and making sure that we work with the companies to keep the commitments.
QUEST FROM VIDEOCLIP: You might think this is an unfair question, but I don't - there will be people who will say you are merely putting right the mess that you helped to create. Is there any truth in that do you think?
THOMPSON FROM VIDEOCLIP: I don't think there's truth to it. And I don't because McDonald's has always been in the business of satisfying the needs of customers, and what customers would like to have - we're a restaurant-based business. So we sell burgers and fries and salads and chicken and parfaits and smoothies. We've always done that and we've always evolved the menu. So, for those that would say you're righting something that has been out there for a while, we've never believed that we're the cause or the issue around obesity, but we do believe we can be part of the solution and that's what this strategic partnership was so important.
QUEST FROM VIDEOCLIP: There are huge changes. The U.S. market is mature, Europe is mature and you are still expanding. What is going to be your goal now? What are you looking forward to now?
THOMPSON FROM VIDEOCLIP: Well, relative to this announcement, we're looking forward to what we've always looked for at McDonald's, which is a continuing and an evolving nature to making sure we satisfy the needs of customers. So, this announcement and this partnership is really about that. This is an ongoing piece, and by the way, Richard, we wouldn't be doing this if this weren't at the core of what we believe at McDonald's. So, this announcement is just an - it's an evolution of us continuing to satisfy those needs.
QUEST: That's the chief executive of McDonald's with the Happy Meals. Never mind the Happy Meals, look what I've got for you - when it comes to spending money, well, you can always do this, the old folding stuff never goes out of fashion. And of course you have the potential to use credit cards. Let me just say, do not bother -we've covered up the numbers except for that rather fetching picture of me from the 1990s. But other than that - so credit cards , cash, checks, but these won't really work in the computer and internet age, which is why Ebay is buying a new online payment service to give its own business PayPal added muscle on the mobile side. Paying $800 million for Braintree which handles $12 billion worth of transactions a year. About a third of those are made by mobile phones. And Ebay hopes the move will help PayPal grow as more people pay for things on their Smartphones and do away with all this sort of stuff. (Michael) (Inaudible) talked to PayPal's president, David Marcus, and asked what Braintree brought to the table.
DAVID MARCUS, PRESIDENT OF PAYPAL FROM VIDEOCLIP: Well Braintree has really the best in-class solution for developers in the market, so developers wanting to build great payments experiences inside of mobile apps or web sites can tap into the SDKs, the software development kits, and APIs provided by Braintree. Companies like Uber, Airbnb, Fast Grab It, Hotel Tonight, all of these companies that are creating the future are tapping onto Braintree's platform to build great experiences, and we feel really, really strongly about PayPal being the payments operating system on top of which innovators build great companies and that's why we connected with Braintree and now we're excited to welcome to the PayPal family.
Female FROM VIDEOCLIP: And for those of us who are you know laypeople, does that mean that you're getting access to consumers - especially those using Smartphones and tablets that maybe you weren't connecting with before?
MARCUS: So it's in a different way, so you're PayPal is available on almost every single merchants out there - millions and millions of merchants, 190 markets, 140 million consumers, but there are lots of applications out there that also accept credit cards. But the best consumer experience to accept credit cards on those apps is actually provided by Braintree. And they also offer a great range of solution and services to startups and those companies developing the future. And that's what made it so appealing to us. Female FROM VIDEOCLIP: David, you and I have talked before about the fact that consumers, although they're using these you know mobile payment systems, digital wallets - they're a little slow to adapt. I've seen some studies that suggest that only 16 percent of Smartphone owners have used a digital wallet in the last six months. What's going to change that?
MARCUS: Well, it's all about where can you use it? How many locations can you use a digital wallet at - and when I say digital wallet - that's really mobile payments in the real world, and we're expanding now really, really fast. But you need to have a certain density of coffee shops, of restaurants, of retail stores and grocery stores that accept mobile payments. And I don't know whether you saw that but you know we announced Beacon, a new technology that we're big believers in, two weeks ago and it will enable you to literally pay completely hands free. So you walk into a store and your phone vibrates or emits a little sound and you know that you can just say `I'm paying with PayPal' and you pay hands free. And it's really a magical user experience and we feel really good about our ability to roll that out in years to come so that you have enough density and with density of available services, you'll have more and more people using these services because they're more convenient.
QUEST: Ebay, PayPal and the president thereof. Now it's the weather forecast, Jenny Harrison, who is never backward or forward at getting her wallet out, and out comes the moths at the same time.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Oh, you're so wrong, you're so wrong. Listen, talk about things coming out of the woodwork, got a bit of snow for you in Europe.
QUEST: No, no already.
HARRISON: Richard, I know you're not in Europe, but I know it's a bit of snow. The first yet - I know, it's very early, isn't it? - the first of the season and we're not talking about high elevations either. It's a bit of a (inaudible) to look in Europe. We've got some sunny skies out there as well and of course tomorrow, fly away Friday, we'll have a nicer forecast for you so we can have some (inaudible) and sunshine this coming weekend. Temperatures right now, given the time of day across the (inaudible), 14 in London, 18 in Paris, 24 in Madrid - that is of course where the warmer weather is. But it's really this region of Europe we need to talk about because the snow flow is coming down, mainly because we've got some rain and some pretty cold air in place as well - temperatures well below the average. Meanwhile, across the west, we've got that air of low pressure bringing some pretty heavy rain across parts of (Porchville) in particular. Warm air in between the two. We've got some glorious weather still going on in parts of northern and central Europe - look at this - Pickering and the Yorkshire Dales - the Yorkshire Moors actually, I should say, in the UK. The sheep seem to be enjoying it, they normally do. We've got the colors changed here of course again it's that time of year, isn't it? The leaves are changing, it's all looking very nice - in between the rain showers, that is. This system coming into the coast of (Porchville) -- this is where we've also got some warnings in place. Perhaps some severe storms at times. The rain could be heavy and there's always the treat, believe it or not, of tornadoes as well, particularly coming in off the ocean. Now, where it's warm, you've got temperatures above the average, particularly Madrid and also Paris - look at this - glorious for the next few days. Where the cold air is in place, look at this - Kiev, well below the average by day. Moscow as well just in single digits. This is where, Richard, we could have the snow and in fact causing some delays at the airport in the (overnight house) - so be prepared for that tonight into tomorrow.
QUEST: I'm looking forward to seeing the pictures of the first (forays) of the year. Jenny Harrison at the World Weather Center. And that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable.
(END OF QUEST SHOW)
ISA SOARES, REPORTER AT CNN INTERNATIONAL: Hello and a very warm welcome to Berlin where Angela Merkel is starting out an historic third term as chancellor. This is a country that calls its leader ("Mutter ") or "Mother," and for good reason too. She has steered her country away from the financial crisis and has fought to keep the euro together. So on this week's program, what Angela Merkel's return means for Europe and those who do business with it. Coming up, I travel from the east of Germany to the west, measuring business reaction to the election on the way. And I speak to the CO of one of Germany's biggest consumer names - Henkel - about what still needs to be done to get Europe moving towards prosperity. Now, it may look cryptic, but everyone knows who this is - Angela Merkel, of course. The chancellor has won reelection on a safe pair of hands. But the reality is, reforms here have been slow and have big idea to do away with nuclear power. (Whilst) it has been (inaudible) for wise, it has come at a price. Diana Magnay has the story.
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: There's something magical about flying a kite -- the power of the wind in your hands. But it takes a real leap of imagination to think of harnessing that power for electricity, making the kite as ubiquitous a source of wind energy as a winds turbine.
Male: We just thought about a design where we skip all the parts are not needed except those highly efficient parts and a generator. And just we work without a tower and the basement which eats up like 90 percent of the resources of such a system.
MAGNAY: He says it could be a cheaper alternative to winds turbines one day in the future. Germany has made huge investments in new offshore wind parks, but some of them, like (Riscat) in the north sea, stands motionless, still not connected to the mainland. Installers say that's because of problems laying the deep sea cables to connect them to the grid. Since Chancellor Angela Merkel's decision to phase out nuclear energy after the nuclear disaster at Fukushima, eight of the country's 17 operational nuclear power stations have been switched off. The goal is no more nuclear by 2022, with a much higher share of renewables in the German energy mix. The trouble is, experts say, upgrades to Germany's grid aren't keeping pace.
CLAUDIA KEMFERT, GERMAN INSTITUTE FOR ECONOMIC RESEARCH: While we need a grid extension especially from the north to the south, and we need smart grids on the decentralized level. And we are doing some powers but not everything and this is we have a time lag, and this is a problem, especially in the north sea where we want to install offshore wind pipes, and they are ready but the grid not.
MAGNAY: But another problem is that wind and solar energy is difficult to rely on for the simple reason that the sun doesn't always shine or the wind always blow. The grid needs a stable base load to make sure the lights don't go off. For now, the shortfall is being made up for by lignite, brown coal. We visit the control room at 50hertz, one of Germany's four main grid operations.
GUNTER SCHEIBNER OF 50HERTZ: With the biggest nuclear power plants are located in the southern part of Germany. There's a part where the load is the highest in Germany. We have to produce energy for this area, and if you don't have any wind, you have to produce this energy and can come only from the brown coal from the coal-fired (pump).
MAGNAY: The German consumer pays the highest electricity prices in Europe, and they're expected to keep on rising. This, despite the fact that on days when the sun or the wind is strong, renewables feed a massive surface of electricity into the grid - pushing the wholesale price right down. A great idea badly managed, experts say.
KEMFERT: Investors are indeed very nervous because they don't get the right policy signals. Politicians give wrong signals - they say while on the one hand we would like to have the energy transition, on the other hand, what they do and what they propose is the opposite. So, nobody really knows if it's even wanted by the government or not, and this makes investors especially nervous.
MAGNAY: Which is why a little blue sky thinking and the management of the energy transition wouldn't go amiss so Germany can continue to be a pioneer - not just in developing renewable energy technologies, but in making sure they become reality.
SOARES: Diana Magnay there with a look at Germany's energy problem. Still to come though on Marketplace Europe. I get election reaction from an unusual place - I meet a global leader in (brands) (inaudible) Hancock about going for growth.
(END VIDEOTAPE)
END
