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Quest Means Business

Cease-Fire in Ukraine; NATO Confirms Commitment to Ukraine; NATO Defense Spending Disparity; NATO Approves Spearhead Force; Unresponsive Plane Crashes Near Jamaican Coast; US Jobs Growth Disappoints; Bright Spots in Jobs Report; Economic View from the Street; Jobs Report; Dow Gains; Most European Markets Down; Apple Promises Major Security Changes Coming; Alibaba Sets IPO Price

Aired September 05, 2014 - 16:00   ET



NINA DOS SANTOS, HOST: Stocks are up at the end of a choppy week for the markets as the closing bell rings on Wall Street. It's Friday,

September the 5th.

Cease-fire takes effect in Ukraine as NATO members pledge to spend to ensure stability.

A summer sting for the US jobs market. It's the lowest number so far this year.

And a reality check for iCloud. Apple says that it's making big changes.

I'm Nina Dos Santos in for Richard Quest, and this is QUEST MEANS BUSINESS.

Good evening. Well, tonight, we're just five hours into a cease-fire between Ukraine and separatist leaders. It's a shaky first step towards

resolving the biggest threat to Europe's stability in decades.

This was the scene on the ground near Mariupol just before the cease- fire actually took hold. A CNN team says that fighting has since quieted down in this area. However, reports of some explosions near Donetsk

further north are still sparking concerns that this truce won't last.

US president Barack Obama told leaders at the NATO summit in Wales that he's hopeful but still skeptical. The Ukrainian president, Petro

Poroshenko, for his part, said that his country is committed to stopping the fighting.


PETRO POROSHENKO, PRESIDENT OF UKRAINE: I can assure you that from Ukrainian side, we really do our best to keep peace and stability in

eastern part of Ukraine because this is a very important challenge, not only for Ukraine, not only for the region, for the whole world about



DOS SANTOS: Diana Magnay is live in Mariupol. Let's go straight to her now. So, Diana, a few hours into the cease-fire so far. Is it


DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: It's quiet for now, and it has been since 6:00 PM local time, which is when that cease-fire

went into effect, yes. And it was after a day of extremely intense shelling, so it was very noticeable when the guns, as it were, fell silent.

But let's not forget that the last cease-fire, which was negotiated in June, broke down after ten days. So, I think people are very cautiously

optimistic about whether this cease-fire actually is followed through on the ground with actions rather than just words.

Remember that you will have -- there is no talk of disengagement effectively, Nina. So, what you have is still heavily-armed people on the

Ukrainian side, volunteer battalions who work alongside the Ukrainian armed forces, and rebel forces on the other side, manning numerous checkpoints

dotted, crisscrossed around this part of southeastern Ukraine.

It will be very difficult to monitor any kind of cease-fire, and of course, if one side puts a step wrong, then they can just pick up the

fighting where they left off.

The other political dimension is also very complicated, Nina. It's very clear that President Poroshenko, the Ukrainian president, his priority

is not to compromise in any way on Ukraine's territorial sovereignty.

And yet, the separatist leaders said after this cease-fire went into effect, that they were not going to compromise on the independent republic

and refer to common status of the Donetsk People's Republic and the Lugansk People's Republic.

So, we will have to see whether this cease-fire is followed up with political discussions that actually amount to anything. Nina?

DOS SANTOS: There's real fears here, Diana, aren't there? Presumably also on the ground, those fears are really heightened. But this doesn't

really solve the situation. This seven-point plan that has been agreed to put forward by Vladimir Putin doesn't really get to the heart of the reason

why people are fighting over there.

MAGNAY: Well, that's right. We don't know, actually, that it is wholly built on the seven-point plan that President Putin devised, the so-

called Putin Plan. We believe that this one has 12 points. And we only know elements of it so far.

For example, an amnesty for all those involved, a prisoner exchange, hostages, as they're called by the Ukrainian president, and there are some

400-plus who the Interior Ministry here says have been held by the rebels.

But if you listen to what President Poroshenko says, he's offering to the rebels the chance to protect their cultural and their linguistic

rights, a more decentralized existence, really, in this part of Ukraine. That's things he's talked about since the word go, since he came in as

president. So, it doesn't feel as though much has changed.

So, I think what this will depend on is whether the Russian president really gives his sanction, as it were, to talks going ahead and to the

separatists really having to sit there and accept that they will have to negotiate alongside President Poroshenko. And that will be determined as

to whether he feels that sanctions on his own country are something that he wants to -- that he feels he's had enough of.

So, I think although President Putin says he doesn't -- isn't party to this peace plan in any particular respect, in actual fact, his behind-the-

scenes role is crucial here, Nina.

DOS SANTOS: All right, Diana Magnay, live in Mariupol this evening. Thank you very much for that.

Well, NATO has affirmed its support for Ukraine at the summit that took place this week in Wales. President Barack Obama said that the main

members nations of this bloc would send non-lethal military aid while the United States and, of course, the European Union work on a broader list of

sanctions against Russia, as Diana was mentioning before.

NATO's own secretary-general as well said that when it comes to dealing with Ukraine and the threat of ISIS as well, all this will be

pretty expensive.


ANDERS FOGH RASMUSSEN, SECRETARY-GENERAL, NATO: In this dangerous world, we recognize that we need to invest additional effort and money. So

today, the alliance made a pledge on defense investment. We agree to reverse the trend of declining defense budgets and raise them over the

coming decade.

We will direct our defense budgets as efficiently and effectively as possible and aim to move towards the NATO guideline of spending 2 percent

of gross domestic product on defense and with a view to meeting NATO capability priorities.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The alliance will update its defense planning. We will create a new, highly-ready, rapid

response force that can be deployed on a very short notice. We'll increase NATO's presence in Central and Eastern Europe with additional equipment,

training, exercises, and troop rotations.


DOS SANTOS: Well, NATO set a 2 percent of GDP as a benchmark for military spending. Only four countries, though, actually reach that

benchmark among the 28 members here. The United States at 4.4 percent, the UK and Greece at just over 2 percent each, and Estonia at around about 2

percent as well.

Let's have a look at the other NATO countries that spend less than 2 percent. Clearly, they're the vast majority, as you can see behind me. A

number of them that are actually in green are the ones that aren't actually spending that amount of money.

Earlier, I spoke with Ivo Daalder. He's a former US ambassador to NATO. I asked him what the announcement of NATO's new spearhead force

actually means for the organization.


IVO DAALDER, FORMER US AMBASSADOR TO NATO: I think it's a very significant set of moves. I think this was the most important summit

meeting we've had since the end of the Cold War, and NATO had to do a number of things.

Most importantly, it had to demonstrate that collective defense, a defense of NATO territory, is not only a core mission, but is something

that all allies are willing to do. And I think we've seen a number of specific announcements like the rapid reaction force, like the commitment

to forward deployment of equipment and improving infrastructure, and to start the increase in defense spending.

That was all necessary to underscore to every ally that their security is fundamental to the security of the alliance, and to underscore that

Russia, that whatever their doing in Ukraine, they should never think about doing anything like that in the rest of Europe.

DOS SANTOS: We've heard a lot of mention of Article 5, which defends the borders and interests of the people who are inside NATO members. But

crucially, you mention Ukraine there, and Ukraine does not form part of Article 5. And indeed, it wishes to join NATO, but isn't a member. Will

what we see today, in terms of this rapid response unit, extend towards Ukraine, do you think?

DAALDER: No, this is all for the moment about the defense of NATO territory against security threats to that territory. At the same time, I

think there were some significant statements and agreements coming out of the meeting with regard to Ukraine.

A commitment by all 28 members nations to provide assistance, whether lethal or not, to help to fund improvements in logistics capability and the

modernization of armed forces in command and control. Individual nations will continue to provide intelligence information, all of which are


In addition, and it was very clear statements made by NATO as a whole by individual leaders, including President Obama, that the continued

violation of Ukraine's territorial integrity and sovereignty is unacceptable, and that sanctions and other measures to increase the cost

and punish Russia will be not only continuing in place, but will be increased in order to seek a reversal of the policy for Moscow.

DOS SANTOS: All of this, obviously, will cost money, and only the United States and a couple of other countries around the world actually

withhold that gentlemen's agreement to spend 2 percent of their GDP on NATO. Do you think we'll actually come to a state where we'll see all of

these 28 member states eventually forking out their part to pay for this new NATO?

DAALDER: Well, I think this is perhaps one of the disappointments. There was no agreement by all 28 countries that they would increase their

defense spending to 2 percent of GDP within the decade. What they said is they would aim to do so, but they were not obliging themselves collectively

to do so.

And I must say that, as one of the people who've been working on this for a long time, when a country says it aims to do so, that's easy to say

on paper. It doesn't generally translate into something in reality.

So, there is still a question for NATO here, which is, do you take the security challenges that you confront in the south -- to the south, to the

east, seriously enough to start investing in a real sense in your defense?

And that's true, I think the answer for many in Eastern Europe and other parts, including the United States, the answer is yes. But for a few

countries, the answer is not yet yes, and I think that's a disappointment.


DOS SANTOS: In other news, the Federal Aviation Authority says that a small plane has crashed off the coastal waters of Jamaica. A US C-130

aircraft is currently flying towards the crash site in an effort to participate in a possible search and rescue operation.

The downed plane took off from Rochester, New York, en route to Florida. It became unresponsive and ended up flying over Cuban air space.

The US Air Force scrambled a pair F-15 Eagle fighter jets to try and intercept the plane off of the Florida coast. The jets broke off their

pursuit, though, when this unresponsive plane entered Cuban air space.

For more, let's go over to CNN's aviation correspondent Rene Marsh, who joins us now, live from Washington. What more do we know at this early

stage, Rene?

RENE MARSH, CNN AVIATION CORRESPONDENT: Well, we know, according to Jamaican authorities and the island main newspaper, "The Jamaican Gleaner,"

there, they have dispatched a rescue team to the crash site. So, that is happening as we speak to you.

We do know that this plane crashed in the water off the coast of Jamaica about 14 miles from Port Antonio, Jamaica, which I can tell you is

the northeastern part of the island, about 60 miles from the capital of Jamaica, which is Kingston.

What we also know is that this business jet, as you mentioned, it flew from Rochester to New -- New York to -- and it was supposed to go to

Naples, Florida. However, we know that around 10:00 this morning Eastern Time, that's when things started to go wrong, because according to the FAA,

the pilot was no longer responding to radio calls.

We also know that the pilot did make a call to air traffic control when the plane was over North Carolina. The pilot in that conversation

with air traffic control said they needed to reduce or drop down in altitude. So, we know that. But we don't know a lot of detail about the

nature of the issue in which they wanted to drop in altitude.

As you mentioned, many of the authorities became very concerned because after they were unable to make any sort of contact with this pilot,

there was the concern of what was happening in the cockpit.

Very early on, they said that they did not believe it was a security issue, but they feared instead that something was wrong with the pilot

there, possibly hypoxia, loss of oxygen, leading to this pilot being knocked unconscious.

But we now know how this story ends. Again, this plane crashing into the water about 14 miles off the coast of the island of Jamaica. Nina?

DOS SANTOS: All right, Rene Marsh, thank you very much for that, bringing us the latest, now, at that developing story, news of that crash

just off of the coast of Jamaica.

Now, job market growth in the United States softened in the month of August, disappointing analysts and job seekers alike. Mind you, it's not

all bleak news, especially if you're a builder. We'll talk about what these numbers actually mean, up next.


DOS SANTOS: Let's bring you some news just coming into us here in CNN. The Chinese e-commerce giant Alibaba has not set its pricing for its

Initial Public Offering in New York at a price of between $60 and $66 a share.

Now, the stock is expected to make its debut in the United States later on this month. One of the most keenly-awaited IPOs. We'll get far

more analysis, hopefully, from CNN's Cristina Alesci later on throughout the course of the show.

Now, in other news, and staying with things Stateside, it's an unwelcome surprise for the United States economy. We've seen a slowdown in

jobs growth over the last month. The US managed to add 142,000 jobs for the month of August. That's still well below many economists'


Although the unemployment rate did tick down to around about 6.1 percent, that decline was largely due to a drop in the number of people

actually entering the labor force, and many view this as yet another sign that job seekers are losing hope and not bothering to apply.

The August number also represents an eight-month low for job creation as well. It follows six months worth of job growth at around about

200,000-plus. Economists had been expecting a similar figure for the month of August, hence the big disappointment today.

Well, the Labor Department has cautioned, though, against focusing too narrowly on just one month of weak growth for jobs.

Now, while the quantity of jobs created was disappointing, the quality of some of these jobs did provide a little bit of hope, and I'm going to

show you why. The professional business services sector saw some pretty strong gains for the month of August. And remember that these are jobs

that typically pay pretty well.

Health care is another sector, which tends to pay well as well. That one saw growth creation of around about 34,000 jobs. This has actually

been one of the strongest sectors to perform since the end of the recession.

And as a whole, the economy added around about 20,000 new construction jobs for the month of August, and this is a really good sign for the

continuing recovery in the housing market, which many people have said has just underpinned the support of the United States economy the last two or

three years as it's edged into recovery.

The numbers only tell us so much, though, and of course, we wanted to know how the real people on the streets are feeling about the economy

themselves. So, we've been asking a few New Yorkers.


UNIDENTIFIED MALE: I think that it goes through cyclical ups and downs, just like anything else.

UNIDENTIFIED MALE: This country should be ashamed of itself. It really should be ashamed of itself. The money's here, it just isn't --

it's just not shared, that's all. It's selfishness, that's it.

UNIDENTIFIED FEMALE: I see that people are losing more jobs as the days go by, and they can't find jobs as quickly as they would before. I

have a good stable job, yes, I do. But not many people are as lucky as I am.

UNIDENTIFIED MALE: I feel that there's been some job growth in the city. I feel good about that. As you walk around, you see a lot, and it

seems to be improving.

UNIDENTIFIED MALE: We're not improving at all, I don't think. But then, I'm a stagehand, I'm not an economist.


DOS SANTOS: Right. Well, the Federal Reserve chairman, Janet Yellen, has repeatedly insisted that the jobs market has not fully recovered from

the big recession over the last six years. The latest report eases some of the pressure, though, on the Fed to raise interest rates, which is good

news for the markets, some might say.

John Silvia is the Wells Fargo chief economist, joining us now, live from Charlotte, North Carolina. So, John, these numbers disappointing.

The Labor Department is telling everybody don't read too much into it because it could just be an anomaly, but how much are you worried about

140-odd thousand?

JOHN SILVIA, CHIEF ECONOMIST, WELLS FARGO: Well, it's a bit of an anomaly, but clearly, the labor market, as you suggested from Chair

Yellen's point of view, certainly has not healed. There's a lot of long term unemployment, there's a lot of under-employment, people working part-

time jobs, really would like to have full-time jobs.

And you were also right to focus in on the fact that different sectors are improving at different rates. And for example, on construction, these

are above-average wage workers. And again, there's very significant differences between sectors. And some of the better sectors that are

performing well also happen to be high-wage sectors.

DOS SANTOS: So, quality versus quantity, but the reality is that that the United States is a huge place with millions of people entering the

labor market every single year. More jobs need to be created, and they also need to be better jobs as well.

SILVIA: We're not creating the jobs at the pace that is necessary. You also hinted earlier in your comments about the actual labor force

declined, and labor force participation rates also declined.

It's very disappointing to see that labor force participation rates continue this low, in part because some people are discouraged from looking

for jobs because we are not creating jobs at the rate that labor force would traditionally grow, given our demographics.

DOS SANTOS: So, where does this leave the US economy for the rest of the year? The Fed, obviously, tapering back. Presumably, numbers like

this will not jeopardize the current trajectory that the Fed is on. But would you have to reassess when you were thinking about interest rates

rising in the United States, based on these data? If you saw another couple of months like this?

SILVIA: Well, I think that what you'll see is a number of analysts will reassess that number. A number of people thought it would be the end

of this year. Some people thought it would be by March of 2015. I think a lot of those estimates are going to go by the wayside.

The Fed will complete its tapering by October, November of this year. But when they start raising rates, I think it's going to be more likely

delayed until June, at the earliest, of next year. So yes, you're quite right, these numbers will force a reassessment by some people about when

the Fed may be raising rates.

And even within the Fed, there will probably be a reassessment saying hey, starting at the beginning of the year 2015, probably too early.

DOS SANTOS: All right, John Silvia, thank you so much for joining us, there. Chief economist at Wells Fargo.


DOS SANTOS: Have a great weekend, joining us this Friday afternoon from Charlotte, North Carolina.

I just want to look at how US stock markets reacted to this, and indeed, markets around the world. They overcame early losses to finish the

day on an upbeat note. As you can see, the Dow Jones Industrial Average putting on a gain of four-tenths of one percent, or 67 points.

Investors are largely betting that the Fed, as John was just telling us before, will put off raising interest rates in the near term. Tesla

shares fell around about 3.5 percent, that was after the company's chief executive, Elon Musk, said that the share price was, quote, "kind of high."

Over here in Europe, stock markets, though, reversing some of Thursday's gains after the ECB's surprise cut on interest rates.

Investors, it seems, are just not willing to put their faith in the Ukrainian cease-fire that was announced today.

BP shares also rose today, rebounding after a steep drop on Thursday after it was announced that that company was probably going to have to

spend far more fighting claims for the Deepwater Horizon disaster.

So, let's move along and bring you the rest of the news. Apple is doing more to protect its users privacy following some embarrassing

intrusions of late. The CEO,Tim Cook, warns his engineers can only do so much, though, to spare its users (inaudible).


DOS SANTOS: Now, Apple has announced it's making some big security changes to its iCloud service after hackers gained access to nude celebrity

photos. Users will now receive alerts when someone tries to change their accounts or passwords or to access them from an unfamiliar device.

The company says that this breach happened because hackers were able to try and guess celebrities' passwords and answer their security

questions. It seems that the iCloud itself, it says, wasn't hacked.

Apple stock had been at all-time highs before this, but the stock has since dipped to as much as 5 percent since the photo scandal emerged

earlier on in the week. This major PR crisis comes just days before Apple is expected to launch a whole new raft of products that will ask users to

send even more of their private information up to its iCloud.

Now, Samuel Burke has been following this story very closely and joins us now, live in our London studio. Samuel, I suppose is Apple finally

accepting the blame, and what are they going to do? Because some of these measures that they're announcing are pretty basic, some people might think.

SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: Very basic. It's interesting, they're saying we're not at fault, but we're announcing all

these new security measures. So, I think that says it all.

This is a real PR crisis. That stock chart that you just showed? They've wiped off $25 billion in market value for Apple. So much so that

the CEO, Tim Cook, has had to sit down with "The Wall Street Journal" and lay out what these new security measures are. He says they're coming in a

few weeks.

Number one, they say they're going to send you an e-mail notification if you or anybody else tries to change your password. So, even if it's

just you, they're just going to make sure that you know. Very important, very basic.

Number two, they'll also send you a notification if somebody tries to restore Cloud data on a new device. That means take your photos off the

iCloud and try to put them on a new device, something that I would do if I were buying a new phone. But again, just in case, they're going to send

you a notification.

And finally, they're going to give you a notification if someone tries to connect an unfamiliar device to your Apple account. So, if I steal your

Apple account and try to put it on my phone, they're going to let you know, Nina.

But I think most important of all, they're going to up two-factor authentication. That's when you try and type in your passwords on your

bank's website, you get it wrong, they look you out for a second, or maybe they don't recognize your device.

So they send you a message to your iPhone or whatever device that you use with a text message code just to make sure, OK, that's Nina's phone,

this is her account, we'll send her a message and just make sure. That's very important and very basic.

DOS SANTOS: All right, Samuel Burke, thank you very much for that, bringing us the latest, there, on those new announcements from Apple, as we

were saying, just before another key product launch.

Now, we also want to bring you more news on the world of technology, and this time, it concerns Alibaba, which as we told you earlier on this

hour, set a price for its IPO. CNN Money's Cristina Alesci joins us now, live from New York. So, Cristina, something like $60 to $66 a share?

CRISTINA ALESCI, CNN MONEY CORRESPONDENT: Yes. In fact, it's a pretty wide range, but if you actually look at it, if the IPO does price at

the top end of that $66 range that we talked about, that means a $24 billion IPO. That's going to be the biggest IPO in the US since Visa went

public in 2008. So, a pretty big offering there.

But that's not the most impressive part of this offering. It's not just the size here that's going to make this complex. It's the fact that

you've got investors from around the world wanting to buy a piece of Alibaba, potentially. Or at least wanting to hear the sales pitch.

So, the investment bankers, the team that's actually going to sell this offering to investors, is going to hit the road starting on Monday to

try and market this deal, but the complexity really is going across the globe to sell this offering and bringing it back to the United States to

put what we call "the book" together that will determine where the price ultimately falls.

DOS SANTOS: All right, Cristina Alesci, thank you very much for that there. Alibaba just getting that piece of news in after the markets

closed, pricing its shares at something like $60 to $66 a piece for its eagerly-awaited IPO in the United States.

Now, when we come back, the president of Georgia tells me that conflicts can hurt Russia just as much as they hurt everyone else.


DOS SANTOS: Hello and welcome back. I'm Nina dos Santos. This is CNN and it's time to update you on the latest world news headlines.

A piece of breaking news coming in to us here at CNN this hour -- a charter plane which was ordered to land in Iran should be able to take off

soon according to U.S. officials. The plane had taken off from Bagram Airfield in Afghanistan with 140 people onboard. Iranian officials ordered

it to land, saying that its flight plan was out of date. U.S. officials say that the plane was a 'fly-to buy' a charter plane. Around 100 of those

onboard are American citizens.

A ceasefire agreement aimed at ending the fighting in Eastern Ukraine appears to be holding so far. The deal was hammered out during

negotiations between the Ukrainian government and pro-Russian separatists at a special meeting taking place in the capital of Belarus which is in

Minsk. Russia's incursion into Ukraine spurred NATO leaders to create something that their calling, quote, "A spearhead reaction force."

Thousands of ground forces will be able to deploy within two to five days when a crisis erupts.

The Federal Aviation Administration says that a small plane has crashed off of the waters off of the coast of Jamaica. A U.S. C-130

aircraft is currently flying to the crash site and anticipates a possible search and rescue effort. The downed plane took off from Russia to New

York and it was en route to Florida.

The World Health Organization says that more than 2,000 people have now died from Ebola in West Africa. Medical experts are discussing using

the blood of Ebola survivors now to potentially create a cure. A third American doctor who was infected with the deadly virus in Liberia has now

arrived in the U.S. for treatment.

The European Union has agreed on a package of additional sanctions against Russia on Friday according to an E.U. source. The measures are set

to be adopted on Monday while earlier today, Britain's prime minister said that Russia would be made to pay for its recent actions.


DAVID CAMERON, BRITISH PRIME MINISTER: There has been a clear message sent out from this conference to Russia that while President Putin is doing

is indefensible and wrong. While we meet here in Newport, a package of sanctions is being finalized in Brussels that will further increase the

economic costs to Russia for its behavior.


DOS SANTOS: While Georgia's president tells me that Russia risks hurting itself if it gets involved in any other conflict with its

neighbors, it's six years since Georgia itself experienced the kind of conflict that Ukraine is facing today. NATO today reaffirmed its

commitment to allowing Georgia to try and join the organization. I asked Giorgi Margvelashvili if he was willing to forego the territories above

Abkhazia and South Ossetian for that goal.


GIORGI MARGVELASHVILI, GEORGIA PRESIDENT: NATO is - was - never considered as any kind of solution for these problems. We find solution

for those problems internally in Georgia, in building Democratic and prosperous Georgia, and engaging our citizens living in Abkhazia and

Ossetian in building unified European state. So I think that that's a very positive message to our citizens living among those territories, a positive

message which engages and invites them into a country that has recently signed their cessation agreement which will have positive dynamics in

economics which will have positive dynamics in our visa (ph) liberalization. So this is really the tool that we are trying to use in

this context.

DOS SANTOS: Either way, though, Mr. President, we do have a situation here where we have frozen conflict in your part of the world. Inside

Georgia's border, we now have frozen conflicts potentially inside the Eastern part of Ukraine. How is this going to affect the economics and the

geopolitics of the region where you are?

MARGVELASHVILI: Well, definitely those frozen conflicts are not beneficial for anyone engaged. Let me tell you that those conflicts are

problematic for people living on those territories of the conflicts, because they don't have an intensive potential for development. Those

conflicts are tragic for nations like Georgia or Moldova because they hinder our statehood. But those conflicts are also problematic for

Russia's Federation because on the borders of Russian Federation, we see that there are territories that are basically uncontrolled where you have

drugs, where you have trafficking, where you have illegal arms, and naturally this destabilizes future development of - the future development

of Russian Federation. So I think that those conflicts are problematic for everybody engaged and that's why more stability, more security is going to

bring more stability not only to Ukraine or Georgia or Moldova or other countries, but it's going to bring more security and stability and

prosperity to Russian Federation as well.

Actually that is what we witnessed through NATO expansions that Russia was enjoying trade exceptionally. Portions of military partnerships with

European states and NATO states, and they were enjoying more safe borders. So this is the message that we are trying to send, this is the positive

attitude that we are trying to spread - among all partners and among every parties involved. The future is stability, future is in peaceful

development. We acknowledge that and we want everyone to buy into same attitude.

DOS SANTOS: Do you envisage that Georgia has a future outside of NATO at all? Does it have a future if it doesn't manage to clinch NATO

membership? And if Russia's reaction is one of aggression and you find yourself caught in a bigger conflict between East and West, how would you

respond as a country

MARGVELASHVILI: Well, Georgia's a country that has up to 3,000 years history and we've been parts of alliances historically. And if we go to

part of our past, we've been part of global geopolitical games that were happening in our very loaded region, including crusaders, including great

gain. And so definitely Georgia has a past and future, it has a positive past and future, and it will fight for its past. Actually, I would - if we

look at the global and bigger picture, let me tell you that Georgia is already a part of the bigger picture, and global stability in the world.


DOS SANTOS: U.S. politicians Chris Christie and Hillary Clinton don't have much in common, but tonight they're both in Mexico. We'll explain

what they're up to after the break.


DOS SANTOS: (Inaudible) the United States, presidential candidates are touring Mexico today. Hillary Clinton sat down with Carlos Slim, the

world's richest man. The former secretary of state spoke optimistically about the future of Mexico and issued a challenge to the country's youth.


HILLARY CLINTON, FORMER U.S. SECRETARY OF STATE: I think - and I'm not just saying this because I'm here with you today - I think Mexico has

one of the brightest, smartest futures of any country in the world.


CLINTON: Now, whether that bright, smart future is realized, is up to the Mexican people and particularly young people.


DOS SANTOS: Well meanwhile, Chris Christie, the outspoken governor of New Jersey, met with Mexico's own President Enrique Pena Nieto and they

discussed immigration issues. Elsewhere in Latin America, in Brazil the presidential election over there is just months away. The race is looking

even tighter than it's ever been. New polling suggests that the challenger of Marina Silva here in the middle could not only defeat the incumbent

Dilma Rousseff over there in a runoff vote. A third candidate here, Ancio Neves, remains in last place. Investors are excited about the prospect of

the changing government because it's seen as a chance for more market- friendly policies.

Richard sat down with Arminio Fraga, the former central bank governor of Brazil who is an advisor to this man Mr. Neves. Richard asked him what

the central economic challenges for Brazil are today, regardless of who becomes the next president.


ARMINIO FRAGA, FORMER CENTRAL BANK GOVERNOR OF BRAZIL: It's a combination I really think is ideological - that's what you're alluding to,

and there is also a fair amount of lack of execution ability as well going on. So it's a combination ideology, execution and that has to change.

We're just - I mean - if you go to fly to Brazil and you check out our infrastructure, everything about it - airports, roads, you name it -

they're very deficient - very. The government however has stretched its finances, spending quite a bit on social security, education, health, etc.

It doesn't have any money left.



FRAGA: Indeed, indeed. But doesn't mean it's good and actually what's going on right now is one of those situations where a somewhat

populous government is being challenged, and exactly for the reason you point out - defeating a populous government is not - it's hard.

QUEST: Isn't your problem though - even if the president - President Rousseff loses, it won't be your candidate that wins because your

candidates in number third - is in third - at the moment?

FRAGA: That's true. That could change though. And nonetheless, I still feel he's playing an important role in just being there with good

ideas, with proper - with a proper - view of how to run the country because you never know.

QUEST: Brazil's finance minister - the Brazilians have not been backward but coming forward criticizing global monetary policy at the

moment and the backwash that is being effected to emerging markets. We're seeing this ever stronger now with the dollar. The dollar rampages on and

you're feeling the effect in Brazil.

FRAGA: Yes, we are but, look, Brazil - it's too bad for us - but Brazil is not a very open economy. Our main problems are domestic.

Period. This moves us up and down a bit but it is nothing compared to having low productivity rate, having people not getting a proper education

and really not having enough capital to work. That is what matters in the end.


DOS SANTOS: Let's turn our attention towards the weather and that volcano in Iceland -- apparently it's still erupting about a week or two

on. Jenny Harrison is standing by with all the news you need to know at the CNN World Weather Center. Hi there, Jenny.

JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Hey, Nina, thought I'd keep you up to date because you never know with this thing. Of

course for the last three weeks now it has been raised to that imminent unrest level.

So this is a picture from a couple of days ago, and you can see this is the fissure that they talk about. There's various fissures and of

course it's all this magma that has been actually coming up, bubbling up to the surface. And it's been producing a fair amount of steam. And this is

a picture showing you from up there above space what we're actually looking at. So in fact this has increase over the last couple of days. All of

this you can see of course is the steam. There's no real ash in there. But the fissure eruption itself has become a lot bigger again. It's much

more visible now. This is a special image displayed on top so you can see the heat. Of course the blue is where it's colder and the red shows you

very clearly how that fissure has actually grown. This is an image coming from NASA, so what you're seeing here is the main fissure itself, then you

have all of this lava that's flowing away from it and then off to the west of it if you like. That's plume, even though it's showing as read - of

course because it is warm. That is actually all of the steam and the smoke coming up.

So, this is how it has spread since the beginning of September. So that was that area there. Then on the second it was this other bright area

of red and then really kind of spreading either way from beneath that. We've actually got on top as well since the third of September this. And

then in fact there's a new - you can see what it says here - new extent of the lava is actually gone all the way to here by this Friday morning, and

the southern tip of the new fissure that's just been spotted this Friday, is actually way down here. So, given another couple of days, and the ice

and the melt off will have just added to that particular graphic.

So, as we know, this all really began three weeks ago when the number of earthquakes actually began it increase. But they have come down over

the last couple of days. This is all that's occurred since the early hours of Friday morning. It's still 170 of them and that just shows you the

extent of the activity over the last three weeks. So, we've still got this - it's still as I say at escalating unrest and then we've got the Askja

volcano as well, which of course has been raised up to elevated unrest - all the activity there that spread there. And the reason we keep an eye on

this is because of this - the upper level winds. And you can see if this were to erupt in the next day or so, the winds would indeed head all of

that ash across to Northern Europe. It hasn't happened yet. Let's hope it doesn't, but we'll keep a very close eye on it. Nina.

DOS SANTOS: Fingers crossed for any travelers out there for the weekend.

HARRISON: Absolutely.

DOS SANTOS: Thank you very much. Jenny Harrison joining us live from the CNN World Weather Center. Well, Apple is right now the world's most

valuable brand. Even so, as you well know by now, it took a pretty big knock towards its confidence this week. Brands can make or break a

business, especially now in the age of social media where experiences can be shared instantly. The idea of branding inching (ph) the merchants these

days (ph) is changing. In today's "Future Finance," Jonathan Salem-Baskin, a veteran brand-builder, thinks that we're entering something of a new era.


JONATHAN SALEM BASKIN, BRANDING CONSULTANT: My prediction about the future of brands is that it'll look a lot like the past. No, not my past,

and not even the last 100 years. I'm talking about all of history. You see, before the 20th century, brands didn't exist. People bought and

valued things of course, they interacted directly, frequently and shared their experiences within their communities. Their relationships with

businesses were as real as they were with one another. And then mass media changed all that.

Technology made it possible to sell things over greater distances, so there was a gap between businesses and connecting with their customers.

Brands were invented to fill that gap. Suddenly, brands could use new media like TV to claim what they stood for, separate from those

relationships that had defined businesses for centuries prior. Free from the vetting of communities, they flourished -- their symbolism crafted by

creative marketing. Not anymore thanks to the internet.

Now consumers can again know what a product or service really offers, share those insights, and thanks to smartphones, do so in real time.

Businesses can know their customers as if they were neighbors again, even if they might live on the other side of the world. They, we don' need

brands filling a gap that no longer exists. So does this mean that brands go away in the future? No, I don't think so. Rather, they return to being

the ongoing narrative of business performance. Brands will still be symbols, but they'll represent real distinctions of uniqueness, quality and

reliability - not ones that are made up or inferred.


DOS SANTOS: When we come back, see what happened when Richard met the late, great Joan Rivers.


DOS SANTOS: -- be held on Sunday in New York for the comedian Joan Rivers. Fans have been leaving flowers and cards at her star on the

Hollywood Walk of Fame. The New York City medical examiner's officer has now completed its autopsy, but has also been saying that more studies are

needed from hereon to determine the exact cause of .death. The family says that the 81-year-old Rivers died peacefully in a New York hospital on


Even before her death, though, Joan Rivers had her funeral, it seems, all planned out. In 2012 she wrote that she wanted it to be a real show

business affair and quote, "I want paparazzi and I want publicists making a scene." "I want Meryl Streep," she went on to say, crying in five

different accents." And of course Rivers also wanted to keep up appearances. Quote, "I want a wind machine," she asked, "so that even in

my casket my hair is blowing just like Beyonce's."

Joan has some advice for our very own Richard Quest. The two of them sat down in 2005 for a conversation on beauty.


QUEST: Do you accept that it is just skin deep?

JOAN RIVERS, COMEDIAN: Oh, yes. Oh, no question. I don't want to hear, 'Oh, it's inner beauty.' I spit on inner beauty. You can have all

the inner beauty you want. No, it is surface and shallow.

QUEST: That's very harsh.

RIVERS: But it's true. You - I mean - who would a man rather dance with - Claudia Schiffer or Margaret Thatcher?

QUEST: But what about that inner beauty though?

RIVERS: What about it?

QUEST: Well it sort of - it's erupts and makes somebody a beautiful person.

RIVERS: Yes, yes - wake me up when it's over. Yes. It's nonsense.

QUEST: There's actually been a book that says beautiful women get more, earn more, have more success.

RIVERS: It's power.

QUEST: It's not fair.

RIVERS: It's not fair but it is. And I think the thing that really isn't fair is that we are bringing our children up saying this is not so.

It is so, and deal with it and look good.

QUEST: I have to say, if I may be honest.


QUEST: I'm on very uncomfortable ground here because I'm asking a lady of a certain age -


QUEST: -- about what she might've had done.

RIVERS: Well, I came out and talked about it because so many of our actresses would sit there and say, 'I've done nothing.' And that is a lie.

And they'd be talking through the parts in their hair that'd been pulled so far up. So, I came out and said do what you want to do to feel better

about yourself. I've had two facelifts in my life, and I'm thrilled I had the money to have them done.

QUEST: I can't see the joint (ph) and they've worked very well.

RIVERS: No, you can't see. I did "Nip/Tuck" which is a television show about plastic surgery, and my part was to go to these plastic surgeons

and say put me back the way I would've been without my facelift. And they did it on the computer. And it was wonderful to see what I would've looked

like without this.

QUEST: You must see examples though of women of a certain age who've gone too far and you want to say to them, my dear, what were you thinking?

RIVERS: Yes. But it's not about you looking at a woman and saying she's gone too far. It's about that woman feeling good about walking into

a room, and that's truly what plastic surgery's about - making you have confidence that you look better. I've had friends who have had nose jobs

that I can tell you when they're going to sneeze four hours before it happens. Their nostrils are so up and big. But if they think they're

better looking, they walk in differently. I always say to a woman, get your face done. Better a new face coming out of an old car than an old

face coming out of a new car. Put your money where it counts in our society.

QUEST: So you didn't have any qualms about going under the knife?


QUEST: It was something you - and you'd do it again if -

RIVERS: I will do it again when the time is right. Botox - thank God - every third woman now has Botox.

QUEST: Have you ever had Botox?

RIVERS: Of course I've had Botox. Everybody just about has had Botox in the group that I run in.

QUEST: So, just a few lines here and maybe -

RIVERS: A little up here on your forehead would not kill you.

QUEST: Right.

RIVERS: And a little here is not going to hurt you at all.

QUEST: What else would you think I should have done?

RIVERS: Turn sideways. No, your chin line is still wonderful. Take off your glasses and look down. You've got about another four years then

you've got to get that done.

QUEST: What?

RIVERS: You're going to have terrible bags in about four years. Right now you're still fine. But definitely the forehead.


DOS SANTOS: Well that was the legend Joan Rivers who died on Wednesday. And Richard's producers have asked me to say that nine years

on, he has not yet taken up Joan on her advice apparently. Now, "Quest Means Business" will be back in just a moment's time with a look ahead to

the weekend. Do stay with us for that.


DOS SANTOS: From running an airline to owning a Premier League football club, Tony Fernandes has a myriad of responsibilities. The

entrepreneur made history when he transformed AirAsia into the first no- frills carrier in Malaysia. On this weekend's "Best of Quest," Tony Fernandes explains why he's studying history in "Reading for Leading."


TONY FERNANDES, CHAIRMAN, QUEEN'S PARK RANGERS: Very rarely do I read books. I am actually reading one book now which is the history of Queen's

Park Rangers, would you believe. Catching up and understanding the club that I and other shareholders own.

QUEST: You may be the current chair, you may be the current boss, but how important is it for you to understand the history?

FERNANDES: It's so important. Football is a religion for our fans and I think our fans, even though they may not own the club, other

shareholders own the club.


DOS SANTOS: And just a reminder here that you can catch up on the "Best of Quest" only here on CNN on Saturday at 12 p.m. London time if

you're tuning in from the U.K. And that's it for this edition of "Quest Means Business." I'm Nina dos Santos. Thanks for joining me. Have a

wonderful weekend (inaudible).