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Quest Means Business
US Jobs Report Falls Well Short of Expectations; Fischer at the Fed; Janet Yellen; US Markets Muted; European Markets Up; Heathrow Charges Row; World's Safest Airline; 2013 Safest Year for Flying; Target Data Breach Affects 70 Million Customers
Aired January 10, 2014 - 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)
MAGGIE LAKE, HOST: We end the week on a weak unemployment report. It's the closing bell on Wall Street. It's Friday, January the 10th.
Hopes are raised, then dashed. The US created far fewer jobs in December than expected.
Target in the firing line. Up to 70 million customers have their details stolen from its database.
And the battle of bitcoin. We speak to the CEO who wants to accept them and the regulator who wants to control them.
I'm Maggie Lake, you're watching QUEST MEANS BUSINESS.
Good evening. The latest US jobs report caught a lot of people on Wall Street by surprise. December turned out to be the weakest month for job growth in almost three years. The economy added just 74,000 jobs last month, far short of the 193,000 predicted in a CNN Money poll.
Unusually cold weather may have been a factor. Take construction, for example. The sector lost 16,000 jobs in December. The unemployment rate fell from 7 percent to 6.7 percent. Sounds like good news, but it was because more people left the labor force.
The monthly jobs report is as closely scrutinized in Washington as it is on Wall Street. One Republican lawmaker says it's just not good enough.
(BEGIN VIDEO CLIP)
REP. KEVIN BRADY (R), CHAIRMAN, HOUSE JOING ECONOMIC COMMITTEE: The best monthly private sector jobs report of the Obama recover is lower than the equivalent of the average private jobs report of the Reagan recovery. In other words, not a single month of the current recovery matches even the equivalent of an average month of the Reagan recovery, and that's disappointing. We all know we've got to do better.
(END VIDEO CLIP)
LAKE: The surprisingly weak jobs report is a sign that the economic recovery may be losing momentum. Take a look at this chart. It shows that the last five months of job growth -- you can see August, 285,000, looking good. September, 175,000. October, 200,000. November, 241,000. A nice trend developing.
And then you have December. Only 74,000. The one bright spot in the jobs report may be more of a false dawn: the unemployment rate fell below 7 percent for the first time since November 2008. The reason behind it, more people have stopped looking for work.
This graph shows that the labor force participation rate since 2000 -- and you can see, the last time it was this low was in 1978 when Jimmy Carter was president.
In December alone, 347,000 people dropped out of the workforce, and that pushed the percentage of the population in the labor force down to 62.8 percent.
Now, I spoke to Thomas Perez, the US labor secretary. I asked him what he made of the jobs report and what it says about the economy.
(BEGIN VIDEOTAPE)
THOMAS PEREZ, US LABOR SECRETARY: I always look at trend data. You look at the last three months, for instance, we've seen average growth of 177,000 jobs, including 241,000 jobs last month. We've seen 46 months of consecutive private sector job growth to the tune of 8.2 million jobs.
And so, again, one month does not make a trend. And what we've seen over the course of the last 46 months is consistent movement in the right direction. But we've got to pick up the pace, without a doubt.
LAKE: The unemployment part of the report dropping to 6.7 percent. On the surface, that looks like good news. A lot of people very concerned about the trend, not just this month, but the trend that people are dropping out of the workforce. You see a lot of details there at the Labor Department. Are you concerned about that?
PEREZ: Sure.
LAKE: And why is that happening?
PEREZ: Roughly two thirds of the drop in the unemployment rate is the labor force participation. And there's a couple forces there. The population is aging, and so there's been a longterm trend toward lower labor force participation.
But also, we need more jobs, plain and simple. At the height of the recession, there were seven workers for every job. We're now at three workers for every job. Moving in the right direction, but we need to pick up the pace.
And what one of the most important things we can do to increase labor force participation is to extend emergency unemployment compensation because as you know, one of the requirements for receipt of emergency unemployment compensation is that you have to be looking for a job.
Now, the average duration of unemployment right now is 37 weeks, and the longterm unemployment rate is at a historic high. And so, that's why we need to extend this. And when we extend these benefits, you will see labor force participation increase because people have to look for a job in order to get those benefits.
LAKE: And yet, there are many in Congress, especially on the Republican side, who say we can't afford higher spending. If we pass that, we have to find a way to pay for it. Is the president supportive or behind any attempt to offset the cost of extending --
PEREZ: Sure.
LAKE: -- those unemployment benefits?
PEREZ: The majority leader, Harry Reid, has put forth a plan to pay for this, and it takes a page out of the playbook of Congressman Ryan, who offered a similar pay for in the context of the budget agreement that was just reached.
So, there are proposals on the table, and they're proposals that are difficult for, I'm sure, many Democrats to accept. But that's what principle compromise is about. And so, those issues have been raised, and the thing we have to do is move forward fast.
Because I've met too many longterm unemployed, including people that I met this week. They're suffering. They're not sitting home watching television. They're working and looking every day. The work of finding work has been so difficult because for them, the longer you're unemployed, the harder it is to get a job.
And so, we need to extend that lifeline. It would be literally unprecedented, given the current rate of longterm unemployment that we have, for Congress not to act to help.
(END VIDEOTAPE)
LAKE: The jobs data will complicate Janet Yellen's job when she officially becomes chairwoman of the Federal Reserve on February 1st, but she's getting some help. President Obama has tapped Stanley Fischer to be Yellen's number two at the Fed. The 70-year-old Fischer was previously head of Israel Central Bank from 2005 to 2013.
President Obama said in a statement, "Stanley Fischer is widely acknowledged as one of the world's leading and most experienced economic policy minds. I am confident that he and Janet Yellen will make a great team."
Fischer says he is deeply honored that President Obama nominated him. Fischer is a global superstar in policymaking, and he is connected to some of the most influential central bankers and economists.
First up, Ben Bernanke. You know that name. He's the outgoing Fed chairman, of course. Bernanke was Fischer's student at the Massachusetts Institute of Technology in the 1970s. Bernanke thanked Fischer in his doctoral thesis for his advice and encouragement.
Fischer also taught Mario Draghi, the current president of the European Central Bank. Another one of Fischer's former students, US treasury secretary -- former US treasury secretary Larry Summers.
Then, of course, not to be left out, there's Mark Carney, the Bank of England governor. Fischer served on the financial stability board when Carney was the governor of the Bank of Canada. Carney praised Fischer's nomination saying he -- that Fischer should be an immense source of insight and wisdom.
Janet Yellen will begin her four-year term as Fed chairwoman in three weeks. She is featured on the cover of this month's "Time" magazine. Janet Yellen, the $16 trillion woman. She spoke exclusively to Rana Foroohar, "Time's" assistant managing director. And Rana joins us now here. She is history-making and comes with quite a title, the $16 trillion woman.
(LAUGHTER)
LAKE: But she faces a tough job, doesn't she?
RANA FOROOHAR, ASSISTANT MANAGING EDITOR, "TIME": She does, absolutely.
LAKE: Especially in light of what we're learning about the jobs market. What kind of economy does Janet Yellen think she's inheriting?
FOROOHAR: Well, it's interesting. She was more optimistic than I thought she would be when I interviewed her. She said that she's hopeful that the first digit of growth in the US, of GDP growth, will be 3 rather than 2.
As you know, we've been in a 2 percent economy, people call it the new normal. It doesn't feel too good, it does not feel like a recovery. She's hoping it's going to be more like 3 percent.
But these latest jobs number really do make her job tough. She's got to walk such a fine line between pulling back on that asset-buying program, which has been keeping stocks up and keeping the economy going, and really looking at employment and making sure she's striking that balance.
LAKE: And we know that's important to her. It's fear that -- I don't know who would want this job. It's unprecedented, we've never been here. There is absolutely no playbook. Does she feel confident that she can sort of put into place this exit, execute this exit form this quantitative easing, from this experiment, without causing major dislocation in the economy?
FOROOHAR: She's cautiously optimistic, and one of the things that history will tell you, if you look back through decades of financial history, when the Fed is doing a good job of communicating to the markets and telling the markets, here's what we're going to do, here's when we're going to do it, pulling back from a period of easy monetary policy tends to go pretty well.
When they don't do such a good job, things can really go awry. The good news is that Janet Yellen is really known for being a great communicator. She was one of the people that put front and center this 2 percent inflation target.
She's been one of the chief architects of quantitative easing, so if there's anybody that can do this, it's probably her.
LAKE: That's right. She knows where everything is. She was at Ben Bernanke's --
FOROOHAR: That's right.
LAKE: -- side. Now she's got Stanley Fischer with a lot of experience coming in as well. This is a difficult time to communicate, though, because you can't make everyone happy. She's got to soothe the markets --
FOROOHAR: Yes.
LAKE: -- she's got to deal with the Federal Reserve, which is a kind of quirky institution that is --
FOROOHAR: Right.
LAKE: -- much more like an academic group debating things. And she's got to deal with Washington. We saw the grilling and the pummeling that Ben Bernanke used to face and take all the time giving those addresses to a very politicized Washington. That's a lot of people to communicate to.
FOROOHAR: It absolutely is, and she's no fan of Beltway politics. She is a low-key academic, she's somebody who's used to working in a university environment. There's also an increasingly independent group of governors, many of whom are sort of pushing their own personal brands --
(CROSSTALK)
LAKE: Who go to the media --
FOROOHAR: -- or getting -- they go out --
LAKE: -- which would never happen under Greenspan.
FOROOHAR: That's right. And you know, one of the reasons they're doing that is Bernanke actually encouraged more independence in terms of opinion. He said, I want to hear people's voices, I want to hear dissent. But that, of course, can go too far. And she said to me specifically that she wants the markets to understand that she represents the consensus and her view is the one they should listen to.
LAKE: We can't end this conversation without sort of talking about the fact that she is the first woman. She is a widely-respected economist, but she is going to be looked at in a different light because of it. Is she thinking about that? Anytime I talk to a woman CEO, they say, oh, I don't even think about the fact that I'm female.
FOROOHAR: Yes.
LAKE: But everybody else is thinking about it.
FOROOHAR: Yes.
LAKE: Did she address that at all? How is she approaching that?
FOROOHAR: Well, it's interesting. I don't think she thinks about being the first woman in the job. But one thing that struck me is that she was very willing to talk about how she had done it as a woman at the highest levels of policy.
And she spoke to me about what a partnership she and her husband, the Nobel prize-winning economist George Akerlof have. They have a son who's also an economics professor. She said they were total co-parents together. We talked about who was diapering the children when they were younger, and that's a conversation you might not have had with Alan Greenspan or Ben Bernanke.
LAKE: It is -- it is a modern age.
(LAUGHTER)
LAKE: Modern parenting skills.
FOROOHAR: Absolutely.
LAKE: And interesting in a time when women are playing an increasingly important role in the economy. We'll see if that makes a difference, the fact that she has to see things through a slightly different prism.
FOROOHAR: Absolutely. And she's all about kitchen table economics. She wants to reach the real world.
LAKE: Which we need help with. All right, fantastic stuff, Rana, can't wait to read it. "Time" magazine, The $16 Trillion Woman on your newsstands now. This is arguably the most powerful woman in the financial community. We want to understand what she's thinking. Thank you so much.
FOROOHAR: Thank you.
LAKE: Well, US markets were left in limbo following the release of that jobs number. The Dow, the S&P, and NASDAQ were all muted as traders digested the news. Investors are wondering how it will affect the Fed's tapering timetable, as we just said. You can see the Dow down there just marginally, ending the week with a loss of a fraction of one percent.
European stocks, meanwhile, made modest gains. Investors didn't seem too troubled by that jobs news from the US. Lufthansa shares were the standout gainers in Germany of nearly 9 percent on a rise in passenger traffic and the prospect of a lower fuel bill. They really outperformed -- as you can see, pretty decent-looking gains across European markets.
Well, if you're a nervous flier, you might want to pay attention. Independent reviewers have named the top ten safest airlines in the world. We'll tell you which one took the top spot next.
(COMMERCIAL BREAK)
LAKE: The operator of London's Heathrow Airport has slammed a price cap limiting how much it can charge airlines, calling the move draconian. Britain's Civil Aviation Authority has ruled that from April, airline charges at Europe's busiest airports can only rise by 1.5 below inflation.
Heathrow has blasted the cap, warning it may have to curb investments as a result. The Aviation Authority disagrees, saying lower costs for airlines will mean lower airfares for passengers.
Earlier, I spoke to Iain Osborne, the director of the regulatory policy at CAA, and I asked him if this would make Heathrow less competitive globally.
(BEGIN VIDEOTAPE)
IAIN OSBORNE, DIRECTOR OF REGULATORY POLICY, CIVIL AVIATION AUTHORITY: Not at all. This is a really good story for anybody who flies through Heathrow. We've put a hard challenge on the operating efficiency of the company, but we're also creating a really benign climate for them to invest money and continue to improve the service quality.
LAKE: When you say it's good news for fliers, how so? What guarantee do you have that they'll be the ones who actually benefit from this?
OSBORNE: Well, they win either way. Every pound that doesn't go to airport charges is available to the airlines. And sometimes the airlines will use that to compete harder on price. Sometimes it'll go to fund refurbishment and improvement in service quality, new planes, opening up new routes. Either way, it's passenger benefit there.
LAKE: Airlines in general do complain that the fees that they have to pay at British airports are still too high. Does this go far enough to try to address that concern? Is it the start of a new, aggressive policy we should expect to see?
OSBORNE: Heathrow is an expensive airport, and charges have more or less doubled in the last decade. This is a hard challenge to the efficiency of the airport. They're going to have to work hard in order to hit these rates. But we didn't want to cut into service quality. It's been improving very well in the last five years, and we want to continue to see that coming through.
And the investment program that this price control will support includes improvements for passengers in the terminals and it includes improvements to the operational resilience of the airport, things like de- icing capability or more fuel storage.
LAKE: The opposition -- the criticism that's coming, especially from certain airlines, is that this is overreach on the part of regulators and that they're playing favorites, that Stansted, for example, does not have to face the same requirements. What do you say to that?
OSBORNE: Well, if there's competition there, then we want to get out of the way, because we think competition's better, ultimately, than regulation. But we only regulate if we think competition isn't really going to be there to protect passengers.
At Stansted, we've seen the airport agree to longterm contracts with its major customers, deals that they wouldn't have done if they had the market power. Whereas nobody really thinks the competition's protecting the people who fly through Heathrow. It's just too big in the UK market.
So we are tailoring regulation to match the circumstances, and as much as possible, we're allowing the airlines to determine -- to go back to the airports, say this is what we want, and it isn't the same for everybody.
(END VIDEOTAPE)
LAKE: Qantas has been named the world's safest airline. It was given the top ranking by researchers at Airline Ratings.com. The website cites Qantas's fatality-free flying record since the start of the jet era in the early 1950s.
In recent years, Qantas has hit some turbulence in profitability. Despite those problems, the carrier received seven stars, as did the top ten rated airlines. They include Air New Zealand, Emirates, Singapore Airlines, Virgin Atlantic, and All Nippon Airways to name a few.
And here are the lowest-ranked airlines, according to Airline Ratings.com. The Afghan airline Kam Air, the Kazak carrier SCAT airlines, and Blue Wing Airlines based in Suriname.
Well, nervous fliers shouldn't fear so much after 2013 was named the safest year on record. That's according to the Aviation Safety Network. Rene Marsh gives us the facts.
(BEGIN VIDEOTAPE)
RENE MARSH, CNN AVIATION AND GOVERNMENT REGULATION CORRESPONDENT (voice-over): A camera rolling when a Russian airliner crashed and exploded, 50 people killed in 2013's deadliest crash.
UNIDENTIFIED MALE: Oh, my God! Oh, it's an accident!
MARSH: Oceania Flight 214 killed three and injured 180 in San Francisco. Two of the 29 fatal plane crashes around the world last year. But as horrific as these were, 2013 was one of the safest years to fly on record. The safest in fatalities and the second-safest in number of crashes.
STEVEN WALLACE, FORMER DIRECTOR, FEDERAL AVIATION AUTHORITY: Flying - - there are a million analogies that you're more likely to die from a fall in a bathtub or a bee sting, and those are all actually true.
MARSH: Steven Wallace led the FAA's Office of Accident Investigations. He says data proves flying is still the safest mode of transportation. According to Aviation Safety Network, there were 265 fatalities worldwide last year, a record low. Wallace says better technology is one reason.
WALLACE: Things like pressurized airplanes that were able to fly above most of the bad weather. The jet engine, which was way more powerful and way more reliable. We came up with electronic devices that catch human errors.
MARSH: Seventeen years ago, a White House commission published a dire prediction: unless the global accident rate is reduced by the year 2015, an airliner will crash somewhere in the world almost weekly. The dire prediction never materialized.
WALLACE: The way the aviation community is looking now to do -- to take an excellent safety record and make it even better is to see trends in the data before those trends become catastrophic events.
MARSH (on camera): Because the number of accidents has trended down so much, the challenge now is finding data to analyze to further improve safety. So the industry is encouraging pilots and others to self report incidents and behaviors that could be dangerous. They're looking for trends in that data to detect problems before they cause a crash.
Rene Marsh, CNN, Washington.
(END VIDEOTAPE)
LAKE: Bigger than first thought. Target reveals how many people it now thinks had their card details stolen in a recent hacking. We'll tell you the jaw-dropping number next.
(COMMERCIAL BREAK)
LAKE: We now know that the data breach at Target is much bigger than first thought. The retailer says US customers who shopped in the weeks following Thanksgiving may have had their credit or debit card information stolen.
Target today revealed that 70 million customers had been affected. That's more than the population of France. The firm says the hacked information included addresses, phone numbers, and e-mail addresses. Experts are advising customers to get new debit or credit cards with new account numbers.
Target CEO Gregg Steinhafel issued this apology. He said, "I know that it is frustrating for our guests to learn that this information was taken, and we are truly sorry they are having to endure this."
Target has admitted holiday sales fell sharply after the hacking news was announced. Its share price fell in Friday's trade as well.
Let's bring in John Simpson, the Privacy Project director at Consumer Watchdog. He joins me from CNN Los Angeles. John, what do you make of this new disclosure, the number bigger. A little unclear exactly how much of any individual's information was compromised, but how worried should consumers be?
JOHN SIMPSON, PRIVACY PROJECT DIRECTOR, CONSUMER WATCHDOG: Well, people need to be aware that all this data is out there, and I think it's a wakeup call for companies to put more security, cyber security measures into place.
I think by and large, if consumers do several things, they can be fairly safe. First of all, they don't have any liability for purchases that might be made against the debit cards or the credit cards, but they have to watch out and make sure the charges that they did not incur show up on their bills. So, they need to be vigilant about that.
This latest additional information that was grabbed seems to have been mostly names, e-mail addresses, and possibly normal street addresses. And it's likely that that data might be used for so-called phishing scams. It probably would not result in someone's account being charged with a specific amount of money.
LAKE: John, I've been asked this question. Does this -- after this was disclosed, is it safer to use a credit card as opposed to a debit card? A credit card, of course, you get the bill, you pay it. A debit card does have a link to your bank account. Is it clear here that one is preferable to the other, given that we know that there was the massive breach?
SIMPSON: Well, in this case, it probably -- if it's the information that's been taken, the consumer has no liability. If the card is stolen, then it's -- and the physical card has been taken, a credit card you have liability of only up to $50.
With a debit card, potentially, if you don't report it soon enough, you can have unlimited liability. So -- and it is also tied to your bank account and can give access to that money, so probably a credit card is somewhat safe.
LAKE: That's certainly the conclusion I seem to be coming from after this. How do you grade Target's handling of this? There's been a lot of criticism. Of course, they would probably point to the fact that they're sort of trying to grapple with this. In terms of transparency, it seems so important, and companies continue to seem to be late to get us this information. How do you grade their performance?
SIMPSON: Well, I think they must have done something horribly wrong before the incident. They got hacked. They obviously did not have appropriate cyber security measures in place.
That being said, I think once it was discovered, they behaved very well, very responsibly. They've communicated with their customers. They're now going to be offering free credit monitoring for a year that might include identity theft insurance. Details of that are supposed to be out next week.
I think they've gotten it right as far as what they did afterwards. Where they got it wrong was that this breach happened in the first place.
LAKE: A lot more investing seems to need to be done. All right, I'm sure it's not the last we've heard of. John Simpson from Consumer Watchdog, thank you so much.
A virtual store is going to start accepting a virtual currency. We'll ask the CEO of Overstock if bitcoin has any real benefits when we come back.
(COMMERCIAL BREAK)
LAKE: Welcome back, I'm Maggie Lake. These are the top news headlines we're following this hour.
There have been celebrations in the streets of the Central African Republic after the interim president and prime minister stepped down. The resignations leave a power vacuum in a country embroiled in sectarian violence. French and African troops are on alert, with tanks spotted outside the presidential palace. France is calling for the swift replacement of the president.
An Indian diplomat whose arrest strained ties between the US and India is back in New Delhi. Devyani Khobragade was allowed to leave the US under an immunity deal. She's accused of lying in a visa application about how much she paid her New York housekeeper. Her arrest and strip search outraged Indians.
The US economy added just 74,000 jobs in December, extremely disappointing as economists were expecting and forecasting 193,000. Speaking to me on this program, US Labor Secretary Thomas Perez said one month does not make a trend.
French president Francois Hollande is threatening legal action after a magazine alleged he's been having a relationship with an actress. Mr. Holland's office reportedly did not deny the claim, but accused "Closer" magazine of violating his privacy. The magazine subsequently said it was removing the story from its website. Mr. Holland is in a longterm relationship but is not married.
European Union says it's made very good progress in nuclear talks with Iran. Negotiators are in Geneva working on a deal on the country's controversial nuclear program. In November, Iran made the agreement in exchange for an easing in sanctions.
Overstock.com has given Bitcoin a big endorsement. It is the first major online retailer to accept the controversial digital currency. Overstock isn't keeping the currency, it immediately trades it back to dollars. CEO Patrick Byrnes joins me now from Salt Lake City. Wonderful to see you this evening. Thank you so much for being with us. Tell me what's behind this -
PATRICK BYRNE, CEO, OVERSTOCK.COM: Maggie, nice to see you.
LAKE: -- same here -- is this a publicity stunt or are you a true believer in Bitcoin?
BYRNE: Oh, I'm a true believer I'm in -- I come from Austria and economics -- my background -- which we're the guys who like gold or gold- based money. We don't like fiat currency, love Bitcoin. It's like digital gold, it has all the advantages -- or lot of the advantages -- of gold. Not at all a publicity stunt. We want to tap in first to that market of consumers who we know are really committed to Bitcoin.
LAKE: Yes. You're accepting Bitcoin but you're not holding it as we mentioned in the lead, do you? You're immediately transferring it into dollars, so you're not actually taking the risk. Are you concerned about Coinbase -- the payment companies -- are you concerned about the volatility we've seen? Does it worry you at all?
BYRNE: Well, it really doesn't because we're always hedging out of the risk, either through Coinbase who's been our partner or -- well, if its (fit) derivatives market develops in dollar Bitcoin, we'll enter that. There'd be no reason for us to hold it unless we can start paying our suppliers in it. And so it's kind of a chicken and egg problem.
LAKE: Yes.
BYRNE: We'll start off not holding it, we're accepting it, and then the day may come when some suppliers let us payment in it, and at that point we'll start holding more of it and converting less of it, and it should spin up.
LAKE: Yes. Do you expect other retailers to follow your lead?
BYRNE: You sound doubtful, Maggie. Yes, I actually think that this forces the hand of Amazon and some other big players. They have to follow suit. You will see them follow suit -- I'll be stunned if you don't because they can't just cede that part of the market to us. If we're the only main, large retail site taking Bitcoin, they'd either have to start taking it or they're just giving away a piece of the market. And that piece of the market is growing at, I think, about a rate of 30 percent per month. It's still a tiny -- it's 20 bits or 30 bits or something -- you know, tiny fraction of a percent, but it's growing quickly.
LAKE: Patrick, you're right, I am a little skeptical. I understand why people like the idea. I'm a little skeptical about this ability of Bitcoin to go mass market because it's so confusing how you get it -- i.e., people go to the bank, they get a credit card, people sort of understand and the sort of barrier to access for that is you know pretty low for the most part in most parts of the world. Bitcoin, however is complicated -- you have to mine it. That seems to me to sort of keep it as a very niche, you know, commodity among a very well-educated sort of technology group. What makes you think it's going to go mass market? How do you overcome that hurdle?
BYRNE: Well, Maggie, I would respectfully disagree. I would suggest your readers go to one of three sites -- Coinapult, Bitpay or -- or Coinbase -- which is the one that we went through. Take you about a minute to open a wallet and connect it to your credit card or your bank account and then from then on when you shop online, you don't have to enter your details in a bunch of different sites. It's secure in that sense. So, you just go to one of those -- Coinbase, Bitpay or Coinapult and it'll take you a minute to get an account.
LAKE: Yes, the sort of middlemen are starting to enter now in that could be a game changer certainly and make it a little more accessible. You know, the sort of regulators -- we're going to be speaking to one in just a moment -- are concerned about transparency, concerned about some of the clientele that may be using it, about recourse for individual investors, about people cornering the market, just to name a few of the concerns. Do any of this -- those -- things worry you? Are you worried about your ability, if there's a problem, to go to the authorities for some sort of recourse?
BYRNE: No, we don't think so. It's so secure and its fundamental design is so secure and avoids central institutions that can be corrupted. So, I don't -- you know, I know it came out of the world of silk road and out of the world of arms, bazaars and drug-dealing and stuff online, but it -- you know, so did the dollars used for funding terrorism and drug deal -- they used the dollar too. So, there's nothing inherently seedy about Bitcoin, and in fact has some real advantages as to digital currency. And I think just by nature it will emerge and the government will hate it. The government likes its monopoly on money -- central planning our money supply. So, they're going to hate it but it's going to be hard to see how they're going to stop it.
LAKE: And last question, Patrick, what kind of response have you seen? Have you had a lot of people buying things in Bitcoin? What kind of traction so far?
BYRNE: Enormous. It seems that it's gone out over the whole Bitcoin community to go and buy at Overstock so as to -- so as to show their support or something. We had about $100,000 last night since the -- in the hours after the announcements. So just $100,000 like that from Bitcoin people all over the country.
LAKE: All right, Patrick, you'll have to come back in a few months and let us know if it continues to see that kind of growth. Patrick Byrne, thank you so much for joining us today from Salt Lake City, Utah.
BYRNE: Thank you, Maggie.
LAKE: Well, we just heard Patrick say the government's going to hate it. Let's hear about that and New York's financial regulator says it will hold a public hearing on the regulation of virtual currencies like Bitcoin. The Department of Financial Services has already announced an inquiry into how to regulate them. The Department's superintendent Benjamin Lawsky joins us here in the seat.
Benjamin, thank you so much for being with us today. This is what we hear from the Bitcoin community -- 'the government wants a piece of it, they want to control us, they're going to hate this right from the outset.' What's your concern? What's the point of the hearings?
BENJAMIN LAWSKY, SUPERINTENDENT, NEW YORK DEPARTMENT OF FINANCIAL SERVICES: Look, I think the point of the hearings is not about hating Bitcoin, it's not about liking Bitcoin, it's about how do we regulate this new area that's emerging in financial technology which is virtual currencies. It's not only Bitcoin, there are others. And the question is, can we put in the rules of the road to make sure that we don't have money laundering, the financing of terrorism, things that all of us really care about. But at the same time, put those rules of the road in in a way that is smart and modern and allows these new technologies to thrive and to continue and to potentially become more and more ubiquitous if possible.
So, I think that the challenge, and that's why we're going to hold on January 28th and 29th, two days of pretty extensive hearings -- to really dig down deep and get a 360-degree view of everything Bitcoin, everything virtual currency. We're going to talk to people on the technology side, we're going to talk to people in the industry, we're going to talk to academics, we're going to talk to people that like it and some that hate it and really try to learn everything we can so we can regulate in a smart way.
LAKE: Does it worry you that retailers like Overstock aren't waiting to hear what you guys think about it and aren't waiting for sort of the rules of the road -- they're just jumping in and accepting it now and it's sort of starting to reach that mass market already? Does that concern you?
LAWSKY: No, I mean, look, it's out there. And there are -- there's a market for it already, it's significant. There are very significant players investing in Bitcoin right now as well, and I think there's a lot of focus both on the state level where we are but also on the federal level as to how we're going to regulate this and what we should do and how do we act carefully and in a smart way. So I think -- I think it's fine that it's emerging, and we'll continue to see whether it becomes what it could become which is something very, very significant in the future or whether it's you know a bubble that bursts. And we'll have to wait and see.
LAKE: What would you advice be to individuals who are looking at this? Because you mentioned the money laundering, and I know there's a terrorism concerns but I've also people -- heard people -- express a lot of concerns about whether individual investors understand this enough, and consumers -- not just investors who might be thinking about buying Bitcoin like you'd buy gold as an investment. But consumers might say, 'Oh, I'm going -- I want, you know, I want to get some of this, I want to try to use it to try to buy things, I think it's just like PayPal.' It's not exactly like that. What's your advice to them?
LAWSKY: Well, I think there are a lot of people out there who don't understand exactly what Bitcoin is and how it works, and that's one of the reasons we're have the hearings -- to really dig down deep into that. There are -- there is a community, clearly, that is very well versed in everything Bitcoin and how it works, how the mining happens, what the price fluctuations mean or don't mean --
LAKE: Yes.
LAWSKY: -- and I think -- I guess the only -- I don't give financial advice, but the only advice I would give is know which category you fall into, and if you fall into the category of someone who is not so clear on how all this works, you know, tread carefully and we're going to continue as a regulator to not only figure out how we're going to regulate this in a smart way, but part of what we do is consumer education as well. So, that'll probably be a backend process for us once we figure out how this should be regulated, where we go in terms of consumer education.
LAKE: You sound very open to the idea and very sort of neutral about this as you're approaching it. This is a community that developed this because they don't want the government involved at all, they don't want it to be regulated, they don't want oversight of this. Is it possible to work with the community, or the very fact you start to put a fingerprint on it sort of defeats the purpose to begin with?
LAWSKY: Well, we're going to see. You're pointing out a real irony but I think any time you have a place where massive amounts of money can trade and where you can have things like narco-terrorism being funded -
LAKE: And no one knows who created it.
LAWSKY: and no one knows -
LAKE: -- that should be pointed out -- still.
LAWSKY: -- who created it, (inaudible). You know, either you're going to -- the government is going to get involved. I think it's inevitable, and the question is, is government going to get involved with a very, very heavy hand and just -- or a heavy foot and stomp it out? Or is government going to approach it in a neutral way -- try to be encouraging of the development of new technology?
LAKE: A partner I guess you could -
LAWSKY: Potentially, and that's how we think of ourselves as a regulator, you know. Law enforcement has a different role. The regulator has a role of how do we put in the rules of the road -- it's just like a referee in a basketball game. You want everyone to play hard, you want the game to modernize over time, but you want everyone to know what's out of bounds and what the rules are, and if you violate one of the rules, we call foul. So, but it gets more and more interesting when you have a new technology, and we're seeing a ton of that around the world --
LAKE: Yes.
LAWSKY: -- but especially in New York. These new financial technologies emerging, and we want to encourage them. We want people of these companies to come to New York and thrive here. We also just want to make sure we're not creating a place where a lot of money laundering can go on.
LAKE: That's right. There is no play book, that's for sure, so you're going to be instrumental in helping write it. All right, Benjamin, we're going to be watching those hearings closely. Please let us know how they go.
LAWSKY: Thank you, will do.
LAKE: Benjamin Lawsky, thanks so much. Well, starving and abandoned nearly four years from the start of the conflict in Syria, we report on the lost generation of child refugees.
(COMMERCIAL BREAK)
LAKE: This past week alone 482 people have been killed in clashes between Syrian rebels and the Al Qaeda-linked Islamic state in Iraq according to activists. The tally is said to include 85 civilians. For those who fled the conflict in Syria, the situation is growing worse by the day. Jim Clancy has the latest on the plight of Syria's refugees.
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JIM CLANCY, ANCHOR ON CNN INTERNATIONAL AND ANCHOR OF "THE BRIEF" SHOW: Syria is hurdling toward a fourth year of conflict that has left towns and cities devastated and forced more than two million civilians to flee outside their homeland for safety.
DICK DURBIN, CHAIRMAN, SUBCOMMITTEE ON HUMAN RIGHTS: This is the world's worst ongoing humanitarian crisis and the worst refugee crisis since the Rwandan genocide in 1994, and perhaps since World War II.
CLANCY: This week Durbin chaired a U.S. Senate hearing on the crisis that focused on how worst-case scenarios were again and again being exceeded. Lebanon and Jordan now hosting the majority of Syrian refugees are in danger of destabilization as the sheer numbers and needs of those refugees overwhelm them. An estimated one million, or about half of the total number of refugees, are children. The U.N. and private aid groups are launching a massive campaign to save what many fear is becoming Syria's lost generation.
NANCY E. LINDBORG, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT: This is a generation of Syrian children traumatized by bombs, who've -- many of them lost their homes, their families, their friends.
CLANCY: But how to help? Already the refugees make up 20 percent of Lebanon's population. Schools are operating on double shifts, rents are up, salaries are down. Jordan warned it will deport Syrians working there illegally, and some lawmakers fear both Jordan and Lebanon may be forced to shut their borders completely as the crisis grows more unmanageable. The good news, the U.S. estimates its food aid is reaching more than four million people still inside the country. But the hearing heard how a Syrian government is still blocking aid to opposition enclaves.
LINDBORG: Most concerning, there's an estimated 250,000 people who have been completely and deliberately cut off from humanitarian assistance for many months now in areas that are besieged by the regime as you noted in campaigns that are unconscionable -- kneel or starve.
CLANCY: The government points to car bombings carried out by its opponents like this one Thursday that it says killed at least 16 civilians, including women and children. In talks with the World Food Program, a government minister said this week Syria supported food aid shipments -- in her words -- to the people worthy of it. Jim Clancy, CNN.
(END VIDEOCLIP)
LAKE: Time now for a check of our global weather. Jenny Harrison is at the CNN International Weather Center. Jenny, we had snow this morning. I wasn't expecting it. What's going on everywhere else?
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: I know, but you -- (inaudible) this morning. I messaged you, and I was watching you from home like a snow globe, it was looking at (inaudible) snow.
(LAUGHTER)
HARRISON: It was very nice. Now, of course it seemed really mild today where you are up there in the northeast, but let's just cast our line back a couple of days. This is from the 5th to the 7th of January. And you cans see of course that the remarkable difference in temperature -- a 30-degree difference basically from these dark red areas. Alaska, for example, is as much as 15 degrees above the average, and of course then you head down to the South. Look at these dark blues where it was certainly as many at 15 degrees below the average for that time of year. I mean, if you spin the globe you can see that there's an awful lot of red on here. Most of Europe also has been throughout that period and is still actually well above the average for this time of year.
Now, in terms of the snow cover, as you might expect, because it seems so mild, there's nowhere near as much snow as we would normally have. For the most part, it really is just on those higher elevations -- the Alps -- and of course when you head further east through much of Russia and also quite a bit of Turkey has got quite a bit of snow at this point. But all these areas in pink is where we really should have snow at this time of year. So, it's been so mild, we've had a little rain come through, and as I say, that is what happens. And of course I showed you this picture yesterday. So, just a reminder, one of the regions where we should have plenty of snow and they're just relying on the fake stuff, is here in Germany. But, thankfully of course, there are plenty of places you can go to, to get some really good skiing in.
So, how about this weekend? May be short notice, so quickly find yourself a flight. Head off to Andermatt in Switzerland. Really excellent conditions on the (peaks) here, we've got mostly cloudy with some snow flurries on Saturday and then on Sunday a glorious day for taking in all of this lovely snow. Look at that -- the depths now on the lower (peaks) -- 56 centimeters of snow. It'll be sunny, temperature just above freezing, no snow on Sunday but actually over the next nine or ten days, about nine to ten centimeters of snow is expected. And even more than that coming down in western Canada. The next ten days, probably about 90 centimeters of snow. Right now on the lower levels -- 111 centimeters, and we've got snow on Saturday. A little bit of light snow on Sunday and again temperatures of course as you might expect, a little bit lower across that side of the Atlantic.
But it's still very unsettled for the most part in Europe. More rain of course has been coming through, bit of a brief calm and then again through Saturday more rain. The problem and (frankly) across the U.K. is that in the south the River Thames really has been breaching its banks in some areas, and so although we've got a bit of a respite from the rain, the rivers are so very full, there's still over 200 warnings in place. And of course once again there is some more wind coming in with that next system. I'll continue to keep you well updated. Maggie, have yourself a good weekend.
LAKE: Thank you, you too, Jenny. Thanks so much. Critically- endangered and in huge demand. After the break, we're in the forests of the Republic of Congo on the search for the vanishing western lowland gorilla, The final part of our exclusive series on the ivory trade is next.
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LAKE: All this week, CNN has been looking at the illegal trade in ivory. Our crew spent time on patrol with park rangers in the Republic of Congo chasing poachers and finding out how ivory is smuggled to market. Yesterday, we met a man who was born into poaching but had a change of heart. He's now one of 76 eco-guards protecting the Odzala National Park. Elephants are not the only animals fighting for their survival there. Here's Arwa Damon along with photographer (Peter Rudin) and producer Brent Swails in the final part of our exclusive series.
(BEGIN VIDEOCLIP)
ARWA DAMON, SENIOR INTERNATIONAL CORRESPONDENT FOR CNN: We're searching for the western lowland gorilla, a critical endangered species. Park (inaudible) Zephirin Okoko motions for us to put on our masks and (be quiet). We've reached the tree. They're absolutely incredible and what allows for us to be this close to the gorillas is the fact that they have been habituated but it's a lengthy and painstaking process. If a troop is friendly like this one was in the beginning it takes around three years but it can take up to ten. Otherwise, the gorillas would have run away as soon as they heard the sounds of our footsteps in the forest. It is a unique experience, one that Okoko knows is becoming more rare.
ZEPHIRIN OKOKO, TRACKER, WITH DAMON TRANSLATING: I feel the gorillas as my family, my children, he tells us. When I see people kill gorillas, when I see that, it brings me to tears.
DAMON: At stake, not just the survival of this species, but the survival of Republic of Congo's Odzala National Park, a stunning mosaic of open and closed-canopy forest and Savanna, also home of a vanishing population of forest elephants. Its protection from 13,500 square kilometers or the size of Connecticut falls on just 76 eco-guards. From the slashes and markings in the vegetation, the men figure out the direction of their targets. They take cover in the undergrowth, barely visible. This is a training exercise, but the war out here against elephant poachers and bush meat traders is very real.
MATHIEU ECKEL, ANTI-POACHING AGENT, AFRICAN PARKS: So for me, it's like doing your work -- you must make two job -- law enforcement that convince people to (inaudible).
DAMON: At this community meeting, Eckel, who heads the park's anti- poaching division, is attempting to do just that, though not with much success. He's trying to get new recruits for his program. It gives poachers amnesty, that's if they give up their guns and confess. Though the villagers are wary, this is still progress. It was just a month ago that Eckel and his men were being chased out of these areas. But everything out here takes time.
On patrol, they move slowly, carefully, pausing to listen to the sounds of the forest, searching for clues of the poachers' activities and documenting every detail. Every single time they find a casing, they GPS its specific location, and they're also constantly keeping track of the endangered, need-to-be protected species. So if they hear the sounds of chimpanzees, gorillas, elephants, they'll also take note of that and try to determine exactly how big the group is. Because they're still trying to map out this entire massive forest.
A painstaking process to discover, preserve and appreciate one of the last-remaining Edens on the planet. Arwa Damon, CNN Odzala National Park, Republic of Congo.
(END VIDEOCLIP)
LAKE: You can watch the exclusive series and find much more on the ivory trade and our investigation. It's all on our website at cnn.com/international. We'll be right back after the break.
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LAKE: While much of the world's population is struggling with mounds of debt, Norwegians all became crown millionaires this week, at least on paper. The money, which works out to $136,319, comes courtesy of the country's sovereign wealth fund. Established in 1990, it owns around 1 percent of the world's stocks as well as bonds and real estate from London to Boston. The fund was started with the money earned after Norway found oil in the North Sea in 1969. Sadly, Norwegians won't be getting a check in the post -- the money is being squirreled away for what else? A rainy day.
And a reminder of how investors here in the U.S. reacted to that jobs report -- you can see -- not overly concerned, but still it did take the wind out of any rally that looked like it was shaping up on this Friday -- the Dow down about seven points -- that's just a fraction of 1 percent. Investors didn't seem too troubled by the jobs news from the U.S. If you look at Europe, gains across the board, Lufthansa shares were the standout gainer in Germany -- up nearly 9 percent on a rise in passenger traffic and the prospect of a lower fuel bill. The markets also did well elsewhere. And that's "Quest Means Business." I'm Maggie Lake. Have a great weekend.
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