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Quest Means Business
Russia Threatens to Cut Ukraine Gas; Shaky Cease-Fire in Ukraine; European Stocks Close Mixed; Airbus Shares Soar; US Economic Growth Revised Down; February Good Month for Stocks; US Homeland Security Showdown Looms; Former AIG CEO Benmosche Dies; Weight Watchers Shares Shed Value
Aired February 27, 2015 - 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: February finishes with a fall as markets slip on Wall Street. It's Friday, the 27th of February.
Tonight, turning off the gas. As Russia threatens Ukraine, I'll speak live with Ukraine's energy minister.
Homeland Security shutdown. A crucial funding deadline is just hours away in Washington.
And a Vulcan onscreen, a philanthropist at heart. Remembering the legacy of Leonard Nimoy.
I'm Maggie Lake. This is QUEST MEANS BUSINESS.
Good evening. Tonight, Ukraine is essentially living paycheck to paycheck as it strives to keep Russian gas flowing into the country.
Russia has threatened to cut the supply unless Kiev pays for it in advance.
On Friday, Gazprom says it got $15 million from Ukraine, according to Russian state media. The report said that was only enough to pay for one
day's supply. Russia's energy minister warned deliveries to Ukraine could be halted in the coming days.
On Monday, EU, Russian, and Ukrainian officials are set to discuss the situation at a meeting in Brussels. Ukraine's energy minister will lead
those talks, and he joins me live from Kiev. Sir, thank you very much for being with us this evening. What can be achieved at these meetings?
VOLODYMYR DEMCHYSHYN, UKRAINIAN ENERGY MINISTER: Hello, Maggie.
LAKE: There are pretty serious accusations going back and forth. Russia is saying that you're cutting off supplies to the eastern part of
your country. You're saying Russia is putting supplies in without your permission. How can you bridge these differences at this meeting?
DEMCHYSHYN: Well, Maggie, Ukraine is under attack, and unfortunately, Russia is using all possible means to put pressure on us. And this time,
this is gas. Since last October, Ukraine is prepaying for gas, and at this point in time, we still have sufficient amount prepaid for -- to consume --
to buy gas from Gazprom.
However, Gazprom apparently is pumping 15 million cubic liters into the war zone, and they want to get paid by us for this gas. Unfortunately,
we don't -- we're not able to measure whether they are pumping or not. That's the biggest problem.
From our side, the buy plan is working. So, we also provide gas to the area. So, we don't see any reason for Gazprom to pump the gas into the
area.
LAKE: Well, I'm sure Russia probably --
(CROSSTALK)
DEMCHYSHYN: On the other side, you see, there is --
LAKE: I just want to say, Russia, apparently, has a different view --
DEMCHYSHYN: Yes, I'm listening.
LAKE: -- from what we've seen in the media. I'm sure they're going to present that to you at the table. If you cannot come to an agreement --
DEMCHYSHYN: Sure.
LAKE: -- do you have options to replace that gas that's been cut off, or are we going to be looking at shortages or haltages or rationing to your
customers?
DEMCHYSHYN: No, I don't think there will be such big problem, because everything that we are discussing now is just under supply to Ukraine. So,
the transit flow is going well. At this point in time, Ukraine has been receiving only 40 percent of the requested volume of gas, but for our
consumption.
We are receiving gas from reverse flow from Europe. We extract gas locally. So, given the temperature is going up, I don't think we have --
we also have gas in the storage, a sufficient amount to go for at least for next two months. So, I don't see any problem with that.
However, this is another means -- another way to put pressure on us before negotiating extension of the agreement for the second quarter and
third quarter of 2015. Therefore, Russians are using various strategies to negotiate.
LAKE: There are going to be representatives --
DEMCHYSHYN: But I'm sure that at the table, we will be able to clarify it.
LAKE: Right. There are going to be representatives from Europe at the table.
DEMCHYSHYN: Yes.
LAKE: Have you been getting enough help from your European partners?
DEMCHYSHYN: Yes. European Union and the European Commission are supporting us very strongly. Mr. Savkovic (ph) is in permanent discussions
with the Russian side and with us, so I think with their support, we should be fine at that table.
And based on my understanding, our arguments are well-prepared and well-based. So, I think we are a reliable partner, and the European Union,
European Commission is monitoring everything that is done here, locally, in terms of transit. As I said, there is no risk that transit flow will be
anyhow impacted by these negotiations.
LAKE: Ukraine's energy minister joining us tonight live from Kiev. Thank you very much for being with us tonight, sir.
DEMCHYSHYN: Thanks.
LAKE: Now, violence between pro-Russian separatists and the Ukrainian military seem to be decreasing two weeks after a deal was agreed for a
cease-fire in the east of the country. Both sides have begun withdrawing heavy weapons from the front lines. However, Diana Magnay reports clashes
are continuing in some places.
(BEGIN VIDEOTAPE)
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT (voice-over): There's not much life on these trashed streets. Nearly every home has been hit. A
few elderly men left, making sandbags.
MAGNAY (on camera): When was the last time that this area got badly hit?
OLEG, DONETSK RESIDENT (through translator): Yesterday.
MAGNAY: Yesterday? And whereabouts?
OLEG (through translator): Right here. Right about here. And it's happening even right now. Can't you hear this?
MAGNAY (voice-over): This conflict's various cease-fires all sounded noisy here. That's what comes of living in this part of town, right beside
Donetsk's contested airport.
"We're all the same Ukrainians," this man says. "And it wasn't even me who said that. It was somebody who considers himself our president.
Nobody has a right to kill other people. Nobody, especially not a president who claims to represent peace. If this is peace, let him come
live here."
But peace seems more possible now, both sides pulling back their armor under the watch of European monitors. We follow a convoy of Grad rocket
launchers out of Donetsk. The rebels keen to point out they started the process first.
"It looks like the Ukrainian side have heard us," says rebel commander Eduard Basurin. "It seems they want peace as much as we do. But we'll see
how things go."
(EXPLOSION)
MAGNAY: But around the airport, the artillery is staying put, neither side prepared to risk losing their positions in one of the conflict's major
battlegrounds.
MAGNAY (on camera): The runway runs from behind me towards the village of Pisky in that direction, which is about two K down that road.
The rebels have the airport pretty much encircled except for that one village. And that's why despite this cease-fire, there is still fierce
fighting down that road.
MAGNAY (voice-over): A truce of sorts, and a chance for all sides to shore up their defenses in case it doesn't last.
Diana Magnay, CNN, Donetsk, Ukraine.
(END VIDEOTAPE)
LAKE: European shares were mixed Friday. Stocks got a boost from encouraging earnings reports. Investors are looking forward to the
beginning of quantitative easing by the ECB.
Airbus shares surged more than 7 percent Friday after it announced a sharp rise in operating earnings. Jim Boulden asked the CEO, Tom Enders,
why 2014 was such a strong year.
(BEGIN VIDEOTAPE)
TOM ENDERS, CEO, AIRBUS GROUP: First of all, the group operational performance, we had a record number of large aircraft deliveries. We had a
pretty good year in terms of order intake. Net order intake was more than 1400 aircrafts. That contributes to good PDP flows, improved cash
management.
All in all, that has resulted in a pretty good number for our habits, as well as for cash flow. And that translates into a dividend proposal of
120 euros, which I hope our shareholders are content with. By the way, that's a 60 percent increase over 2013.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Would you say that this is a one-off year, 2014? A lot of airlines wanting to modernize.
Obviously, the economy's improving somewhat in many places, especially the US. Or can you continue this in 2015? Are we in this sort of golden era
now for new airplane manufacturing and purchasing?
ENDERS: Well, I certainly don't believe it's a one-off year. We are six years on a continuous improvement path year after year in terms of
profitability. And 2014 is just one year in a row. We certainly target to improve earnings per share, dividends per share.
Also in the coming years, we also intend to boost our profits. It doesn't feel really like one year because we're dealing with strong
challenges still. Ramping up production is not a piece of cake. This is exactly what we need to do on various aircraft models.
BOULDEN: You mention aircrafts bumping up numbers. The A320, the sort of single-aisle workhorse, if you will. A lot of orders coming
through for that one. Does that tell -- what does that tell us about airlines and how they're feeling going into the second half of this decade?
ENDERS: Well, this is obviously a segment that is particularly strong. This is not a short-haul or a domestic aircraft. The 320 family
is a very competitive one. We're currently improving that family with new engines.
Our order backlog is more than 6,000 aircraft at -- 5,000, more than 5,000 single-aisle aircraft. So, we certainly have a strong demand for
ramping up production to 50 and maybe even further in the odd years.
BOULDEN: I recently flew in the A380. Loved it, I have to say. But it still doesn't make you any money. What is your projection for when the
A380 will make Airbus profit?
ENDERS: Well, I'm glad you asked that question, because this year, 2015, is the break-even year, and that's a very important milestone in this
program after heavily investing into the 380 aircraft for 15 years. And guess what? We just don't want a one-off event in terms of profitability.
We want to keep it break-even or profitable in the coming years.
(END VIDEOTAPE)
LAKE: US stocks close out February with a whimper. We'll examine what changed after a month full of new highs.
(COMMERCIAL BREAK)
LAKE: The US economy ends the month with a warning light as growth slows and the price of oil rebounds. The commerce department has revised
down its growth estimate for the fourth quarter of last year. It now says the economy grew at a rate of 2.2 percent.
In the oil market, crude prices are up more than 4 percent for the day and nearly 30 percent since the beginning of the month. It is the first
monthly gain since June.
And despite today's drop for the Dow, the index ends the month 4 percent higher. In Europe, the DAX and the FTSE also hit new highs in
February.
Rana Foroohar is Time Magazine's assistant managing editor, and she joins me now in the studio. Rana, a lot of people looked at that GDP
figure and got a little nervous, but then we had to remember, there's a lot that's been going on. Should we be concerned about the fact that growth
seems to be being revised backwards?
RANA FOROOHAR, CNN CONTRIBUTOR: Well you know, when you compare it to third quarter growth, which was this incredibly rocketing 5 percent, it
looks not so great, 2.2 percent is sort of eh.
But when you look under that headline number, the consumer spending figure is actually up. In fact, it's the highest that it's been since
early 2006. That's really good, because about two thirds of the US economy is consumer spending, and that's really what we wanted to see start ticking
up.
LAKE: So why -- what is the weak spot? Is it one of these things that looks weak on paper but actually means the economy's recovering?
FOROOHAR: It's basically shaking out evenly. There was an expectation that there were going to be greater business inventories being
purchased in the fourth quarter. That didn't happen. Some of this statistical. And in economics, three is a trend.
LAKE: Right.
FOROOHAR: If you see sort of three bad quarters of growth, that's time to get concerned.
LAKE: Right. And when you see 5 percent growth, you have to even that out. Sometimes it steals a little ahead from the --
(CROSSTALK)
FOROOHAR: That's right.
LAKE: -- the next quarter.
FOROOHAR: That's right, that's right. We knew that we were going to be down from the third quarter. And in fact, we weren't down as much as
economists were predicting. So, that's good news.
LAKE: So, what do you make of this bounce in oil? What are the things feeding all the consumer confidence and spending?
FOROOHAR: Yes.
LAKE: People have been saying, was that big, what we call that tax breaks from the lower gas prices? Should we be concerned they're moving in
the other direction? And do you think this is the start of this trend, where we are looking at higher?
FOROOHAR: We've seen a little bit of an uptick, but oil is still very low compared to what it's been for the last couple of years. Last year, we
were in $90 territory, even higher than that.
And as you know, oil prices and their decline, it's like a $100 billion tax break for the American consumer, and you really are starting to
see that. I think that's one of the reasons why spending was as strong as it was in the fourth quarter.
LAKE: A little bit later in the program, we're going to be talking about a struggle in Congress again, two sides going head to head again on
cutting down spending. Washington was such a headwind for growth at some point.
We haven't talked about that in a long time, but now that we're entering what is the beginning of the election and the two sides arguing
again, showdowns over spending, is Washington going to be a problem for this economy once again?
FOROOHAR: It's a great question. I think the politicians have learned their lesson in terms of the debt ceiling debacle, in terms of the
really negative impacts of shutting down the government, and the US credit being downgraded. We're not going to see anything like that this time
around, I don't think.
On the other had, the Fed, which had picked up a lot of the slack the last time around with its quantitative easing program, that's all ended
now. So you don't have that firepower being thrown at the economy either.
Vice chair Stanley Fischer, vice chair of the Fed Stanley Fischer said today, actually, that he expects the biggest impact of QE to be this year
in 2015. So, we still have some good news ahead of us and probably into the election cycle.
LAKE: Which is good if we get a little more tailwind, because in a perfect world, you'd like to see the Fed be able to step out and our
politicians step in and start to do the hard work on the fiscal side that they have neglected --
FOROOHAR: That's right.
LAKE: -- for so long. Unfortunately, if you're talking about presidential politics, the chance of that happening is probably pretty
slim.
FOROOHAR: Absolutely.
LAKE: So, we're going to have to watch that carefully. Rana, great to see you as always. Thank you so much.
FOROOHAR: Thank you.
LAKE: Well, February was actually one of the best months for the stock market in several years. Alan Valdes is directly of floor trading at
the Investment Bank DME Securities. He's standing by on the floor of the New York Stock Exchange.
And Alan, it's lovely to see you again. We're starting the day and ending the day together today. What happened today? Why did we see the
selling?
ALAN VALDES, DIRECTOR OF FLOOR TRADING, DME SECURITIES: Well, there are a couple of things. One, like your previous guest mentioned, GDP was a
little weaker than expected, even though you dig into it and you see the consumer spending was a little better than expected.
But then you had jobless claims which were a little higher than expected. Home sales were a little better than expected, but then Chicago
PMI was a little worse than expected.
So overall, it was a mixed signal day. Nothing to -- investors could wrap their arms around. So, we just traded down. We had the best month,
as you mentioned, in four years. So, they were just taking some money off the table, selling on the way out, basically.
LAKE: Right. And we should remind everyone that markets do move in both directions. And I know you guys like to see this sort of orderly
consolidation, gives people a chance to step back in. Alan, we had such a different perspective from January to February.
January it was horrible, this was the big sell was coming. February, new record highs. The rest of the year, is it going to look more like
January, or is going to look more like February? What can we expect?
(LAUGHTER)
VALDES: Well, I think we're going to have an OK year. I think the year -- we're going to end higher than we are today. I can see the NASDAQ
getting a little high. Remember, NASDAQ's been acting very well. S&P and Dow, like we mentioned, at a four-year high, here.
So, I think -- a great month here. So, I think you're going to see the year continue the way you are. And the main reasons is, we're in the
best house in the worst neighborhood. Where else are you going to put your money? We'd like to see a little more volume on that tape. That's the
only thing we're worried about, that the volume still remains very, very light.
LAKE: Alan, when we've talked in the past, this is a market that's been very short term. People are in and out quickly, they don't hold
positions for long because they didn't seem to have a lot of confidence in the longer-term clarity. Do you have a sense of where those long-term
money managers are? Do they have their money at work in the market? Are they fully participating?
VALDES: No, a lot of them are on the sidelines on that watch. They're obviously in the Apples and things of that nature, the bigger
stocks. But a lot of them are watching it. They're very nervous, things in Europe, things here in America. So everyone's standing on the
sidelines. That's why the volume stays very light, so it's easier to push up the market.
Last week, the Dow was up, I think, 80 points at one point on two stocks. So, I mean, you can move this market pretty quickly on light
volume in just a few stocks. It's very deceiving sometimes when you see the Dow's up 100 points, and in fact, it's only four stocks.
LAKE: Yes, we have to really keep that in mind. Alan, always great to talk to you. Thank you so much, have a terrific weekend.
VALDES: Thanks, Maggie, have a great weekend.
LAKE: Thanks.
Well, there are less than eight hours left to avoid a shutdown of the US Homeland Security Department, so what Rana and I were just talking
about. Earlier on Friday, the US Senate passed a bill to keep the department running. That bill funds the department for the rest of the
year and does so without blocking the president's executive actions on immigration.
The House does not plan to take up that bill. If the department shuts down, thousands of workers will be furloughed without pay. The Obama
administration warns a shutdown may damage America's security over the long term. Short-term effects are likely to be minimal.
Athena Jones is live in Washington. And Athena, you know, the average person looks at this, given the stories in the headline about ISIS, about
the threat of terrorism worldwide, and thinks this cannot actually be happening.
ATHENA JONES, CNN CORRESPONDENT: That's right, Maggie. The average person is shocked at what's going on, but we've seen this over and over
again, things coming down to the wire in Congress, and here it happens once again.
Right now, on the House floor, they are debating this plan to pass just a three-week funding bill, a bill that would just fund the Department
of Homeland Security for three weeks.
There are a lot of folks, not just Democrats, but also some moderate Republicans, who would really like to see the House take up that bill the
Senate passed earlier today that would fund the Department of Homeland Security for the rest of the year. A so-called clean bill all the way
through the end of the fiscal year. A bill that, as you mentioned, does not do anything to block the president's executive actions on immigration.
And that's really what all of this has been about. House Republicans, many of them, especially conservatives, are angry about the moves the
president announced last November, and they want to make sure that DHS, the agency that would help carry those out, can't do so.
That's been the debate. Democrats, of course, don't want to block the president's moves on immigration, and the president himself would not sign
any bill that does that. And so, here we are down to the wire. The House has decided that they are going to pass, hopefully, in their view, this
three-week bill to fund the Department of Homeland Security. But that's not a sure thing.
Earlier today, they were supposed to have voted on this, before -- around noon, they were supposed to have had this vote, but it looked very
unclear whether the Republicans could get together enough Republican votes to pass it. Democrats aren't going to join in.
So, that's what were' going to be watching in the next 15 minutes or half an hour or so, we expect to see whether the Republicans can pass this
bill in the House, send it over to the Senate, but all it does is kick this can down the road. In another three weeks, we'll be at this again, trying
to figure out if there's going to be another short-term bill or, perhaps, a longer bill. But that doesn't look likely. Maggie?
LAKE: That is incredibly frustrating for a lot of people. Athena Jones with the latest from Washington, thank you.
JONES: Thanks.
LAKE: Well, Wall Street has lost a well-known figure. The former president and CEO of AIG, Bob Benmosche, has died. The insurance company's
chairman said Benmosche was "one of the most inspirational and successful leaders in corporate America."
He had been suffering from lung cancer since 2010. Benmosche came out of retirement to lead AIG through the 2008 financial crisis. Benmosche,
the former head of AIG, is dead at 70.
(SILENCE)
(COMMERCIAL BREAK)
LAKE: It's never good for a stock to be underweight, even when that stock is Weight Watchers. Shares of the company took a beating on Wall
Street today, down more than 30 percent after its forecasts fell well short of expectation.
The company's been struggling to keep up with the latest trends in the dieting industry. Richard Quest is our lean, mean reporting machine.
(BEGIN VIDEOTAPE)
RICHARD QUEST, CNN INTERNATIONAL: How many calories have you eaten today?
SHELLY PALMER, AUTHOR, "DIGITAL WISDOM": A hundred forty-five.
QUEST: Wow.
QUEST (voice-over): Shelly Palmer is a technology consultant known for his on-air expertise, and even the occasional food metaphor.
PALMER: Apple is in a little bit of a -- kind of pickle.
Stick a fork in it, it's done, over.
QUEST: Once off-screen, for Shelly Palmer, food is a much more serious issue.
PALMER: So, I fought with weight my entire life, Richard. It's something that I literally did my whole life. And I got a couple of years
ago up to 252 pounds.
QUEST: You name a diet, Shelly's tried it.
PALMER: Jenny Craig, Weight Watchers, diet center. The moment -- the literal moment -- you stop the routine in any way, you vary from it even a
little bit, it was over.
QUEST: Technology was his savior.
PALMER: If you use some kind of fitness band or if you use an app, you're going to find yourself training yourself to change your lifestyle.
QUEST: For weight watchers like Shelly, the lower the number, the better. For Weight Watchers the company, the problem is keeping the
numbers up.
From its peak four years ago, the stock has shed around 80 percent. With online subscriptions and meeting attendance in decline, Weight
Watchers market value has slimmed from $6 billion in mid-2011, to a skinny $1 billion today.
ANNA PERKIN (ph), WEIGHT LOSS CONSULTANT: Now, they're focusing much more on healthy eating, so they actually are up with the times. In my
opinion, the program is better now that it's ever been before.
QUEST: Weight loss consultant Anna Perkin is a lifetime member.
PERKIN: I think there's accountability in going week after week, knowing that you're going to be there. On the actual program, I lost about
40 pounds.
QUEST: She became a meeting leader, a brand ambassador.
PERKIN: I think that they should really invest in training their people and the leaders.
QUEST: Weight Watchers is in the middle of an overhaul, launching new features, like a personal weight loss coach.
UNIDENTIFIED MALE: Glazed, iced, fried.
QUEST: And a hard-hitting ad in the Super Bowl.
PALMER: Here I have my grilled chicken breast. What the technology has enabled me to do that no meeting ever enabled me to do was quantify
what I am doing in a way that made it a game for me.
QUEST: It's a game that Weight Watchers must learn to play fast. Because just like the scales, the numbers don't lie.
Richard Quest, CNN, New York.
(END VIDEOTAPE)
LAKE: As talks to normalize relations between the United States and Cuba enter a second round, we'll be live with our man in Havana after the
break.
(COMMERCIAL BREAK)
LAKE: Hello, I'm Maggie Lake. Coming up in the next half hour, we're live in Havana as talks are held about opening the economy to US business.
And how Buzz Fees almost broke the internet with the help of an eye- catching dress. We'll hear from the designer.
Before that, here are the top news stories we are following for you this hour. Ukraine's energy minister says Russia is using gas a weapon
against his country. The Kremlin has warned Ukraine it could suspend gas supplies if Kiev doesn't make further payments in the next few days.
In Canada, authorities are looking for at least four teenagers who may have flown to the Middle East to join ISIS. Three of them were students at
a college in Montreal. The school has now suspended its lease agreement with an Islamic group after finding evidence of what administrators call
hate speech involving one of the group's leaders.
An American writer has been killed in a brutal attack on the streets of Bangladesh. Avijit Roy, a blogger and the author of several books was
hacked to death with machetes as he was walking with his wife in the capital Dhaka. Roy's life had been threatened a number of times over his
writings on secular freedom. Police say they are investigating a hardline religious group that praised the killing online.
Leonard Nimoy has died at the age of 83. The actor was famous for his role in "Strek Trek" as Mr. Spock - half Vulcan, half human. He passed
away at his family's home in California after suffering from lung disease. His co-star William Shatner paid tribute to him on Twitter saying, "I loved
him like a brother."
Cuba's top representative in talks with the U.S. says progress was made today in the second set of meetings but no date yet has been agreed
for an official renewal of diplomatic ties.
Washington and Havana are edging toward a new start after more than five decades as bitter rivals. For Cuba, a top priority is convincing the
U.S. to take it off a list of countries labeled as state sponsors of terrorism. While it stays on that list, officials say no banks in the U.S.
will do business with Cuba. CNN correspondent Patrick Oppmann joins us now. He's live in Havana.
And, Patrick, we've been watching these talks so closely. This issue of getting off this list of terrorism - so, so important to Cuban
officials, isn't it?
PATRICK OPPMANN, CNN CORRESPONDENT: It really is because of those economic impacts as well - higher interest rates, transactions are very
closely monitored because in essence Cuba is treated like a country that supports terrorism.
Now they say and other countries say - even some U.S. diplomats will quietly tell you that that there's no evidence that that continues anymore,
that yes, in the past they supported Colombian rebels, that they supported Basque terror groups in Spain.
But of course Spain and Colombia now have very warm relations with Cuba, so why not the U.S. You're told by many diplomats that it was just a
question of politics over the years.
But you know Secretary of State John Kerry said this morning that really the terror list is a separate negotiation even though President
Barack Obama seemed to give indications that he supported taking Cuba off the terror list. That is a process the State Department has to recommend
it and that's where we are and that it's not part of this negotiation.
What really talks today focused on was the nuts and bolts of reopening embassies after 53 years. The U.S. would like its diplomats to be able to
travel outside Havana. They'd like to - Cuban police to pull back from the gauntlet they have around the intersection here in Havana once it becomes
an embassy, and that they would like Cubans to have free access to a future U.S. embassy.
But, you know, diplomacy it takes time, Maggie, and talks are inching forward, progress is being made but not the breakthrough that so many
people are hoping for.
LAKE: That's right. And it's important to point that out because this is a massive shift after decades. It is going to take some time.
Some of the pressure of course, Patrick, is coming from businesses on both sides who are so eager to throw open those doors because they see so much
opportunity. We certainly have heard from people here in the U.S. that's the case. What is the feeling in Cuba?
OPPMANN: Oh, absolutely. People feel that there's an opportunity here. Let's remember, Cuba is next to the largest market in the world.
Cuba has lots of products, and you know, just think about cigars - they sell cigars, it have a large shares - majority shares - around the market -
everywhere pretty much but the United States, the largest market for cigars in the world, so they are very eager to break in that business.
We've seen a lifting of some restrictions but, you know, people who sell cigars, Cuban cigars, are hungry for much more.
(BEGIN VIDEOCLIP)
OPPMANN: Harvesting cigar tobacco - Cuba's green gold -- one leaf at a time. Long banned in the U.S., the island's legendary cigars bring in
hundreds of millions of dollars - a bright spot in an otherwise teetering economy.
But many more Americans may soon be lighting up a legal Cuban cigar. Following a change in U.S. regulations that now allows U.S. citizens
visiting Cuba to bring back up to $100 in Cuban tobacco.
Tobacco farmer Maximo Perez says the loosening of restrictions presents a huge opportunity.
MAXIMO PEREZ, TOBACCO GROWER, INTERPRETED BY OPPMANN: "The first thing we have to do with the Americans," he says "is create an appetite for
our product because they have lost that. But since what we make is excellent, as soon as they try it, they will see the difference."
OPPMANN: The question now is whether Cuba can begin to supply a new market for their famed smokes. Much of the work on this tobacco farm is
done by hand, the way it's been done here for generations. Cuban producers say that they make some of the best cigars in the world, but that means
they can't cut any corners and meeting rising U.S. demand could take years.
At Cuba's yearly cigar festival, the air is filled with smoke and the realization that the industry needs to prepare for the eventual lifting of
all U.S. economic sanctions on Cuba.
DAVID SAVONA, EXECUTIVE EDITOR, CIGAR AFICIONADO: There's obviously built-up demand and excitement in the United States for people to smoke
Cuban cigars. They haven't been able to smoke them legally for more than 50 years. I think all cigar smokers in America are probably going to want
to give a legal Cuban cigar a try.
OPPMANN: Executives with the Spanish-Cuban company that sells Cuba's cigars say that within a few years of the lifting of the U.S. embargo, they
could control some 70 percent of the U.S. market without compromising the product.
JAVIER TERRES, HABANOS SA, INTERPRETED BY OPPMANN: "Quality is something we can never give up," he says. "Entering any market, including
the U.S. market will happen with a product of maximum quality.
OPPMANN: Cuba's cigar producers say their tobacco doesn't like to be rushed which means that Americans may have to wait a little longer before
they can fully quench their taste for the island's once-forbidden cigars.
(END VIDEOCLIP)
OPPMANN: And, Maggie, even though we have no clear date of when the U.S. trade embargo could be lifted, Cuban cigar executives tell us they're
already making preparations for that date. They have to plant fields, hire more workers, plan up marketing for obviously the U.S. market which doesn't
know Cuban cigars - at least not legal ones because even though the diplomacy here is its taking time, cigar-making also takes a lot of time
and they're very eager though that as soon as they can, they can break into this new crucial market for Cuban cigars. Maggie.
LAKE: Patrick Oppmann for us in Havana. Thanks, Patrick. Leonard Nimoy whose character was known to say, "Live long and prosper" has passed
away. We'll look back at Mr. Spock's legacy in space and hear how it lives on here on earth.
(COMMERCIAL BREAK)
("STAR TREK" ORIGINAL THEME SONG PLAYS)
LAKE: Leonard Nimoy has left earth for the last time. The actor found fame playing the half-Vulcan science officer Mr. Spock in the "Star
Trek" series. He passed away earlier on Friday. Family members say the cause of death was chronic obstructive pulmonary disease.
Jason Carroll looks back at Leonard Nimoy's long and prosperous live.
(BEGIN VIDEOCLIP)
LEONARD NIMOY AS SPOCK: That is quite logical, Captain.
JASON CARROLL, CNN NATIONAL CORRESPONDENT: Leonard Nimoy was and will always be remembered as Spock, the half human, half Vulcan he portrayed for
more than four decades on the big screen and the small screen where his character debuted in the original "Star Trek" series September 8, 1966.
NIMOY AS SPOCK: That may be correct, Captain.
CARROLL: Spock's life on board the Star Ship Enterprise took him to many worlds. In reality, Nimoy's love for acting began right here on earth
in his home town.
NIMOY: I started acting when I was a little boy, about eight years old in neighborhood settlement houses in Boston and kind of grew up into
it.
NIMOY, "SPOCK": Live long and prosper.
(CHEERS AND APPLAUSE)
CARROLL: As beloved as Spock is with his audiences, in his earlier career, Nimoy played a lot of characters audiences loved to hate.
NIMOY: I had done a lot, yes. I pushed a lot of people around and got my comeuppance in the end of the show.
NIMOY AS ANOTHER CHARACTER: The banks have a built-in radar for box stoppers - they can smell a winner.
CARROLL: Nimoy's big break came when a producer took notice of the young actor in an episode of the 60s Marine Corps drama, "The Lieutenant."
That producer? Gene Roddenberry who, like the cast, saw something special in Nimoy's Spock.
WILLIAM SHATNER, "CAPTAIN JAMES KIRK": He invented that character, they had made a earlier pilot in which nobody had grasped the edges of the
character.
GEORGE TAKEI, "SULU": With his imagination and his innova - his creativity - made that character one interestingly humanized and so
rivetingly intriguing.
NIMOY, "SPOCK": -- nose doctor.
CARROLL: Despite all the "Star Trek" spinoffs, a dozen movies, five series, countless conventions -
NIMOY, "SPOCK": All scanning stations manned -
CARROLL: -- the first "Star Trek" series lasted only three seasons, 79 episodes.
NIMOY: My favorite episode was called "Amok Time." In the episode, we saw - we heard the words "live long and prosper" for the first time and
we saw Spock do this (HAND SIGN) for this time.
CARROLL: Nimoy went on to star in a number of TV shows following the series. He also pursued other passions - photography and poetry,
publishing a book in 1977. In the 90s, Spock appeared in "Star Trek, the Next Generation." And when J. J. Abrams rebooted the movies in 2009, again
in 2013, the original Spock was there too.
NIMOY: Thirty-five years ago, I met (ph) the Enterprise for the first time.
CARROLL: NASA's shuttle Enterprise, named after the starship and when it retired in 2012, Nimoy was there to talk about it. Tell us about what
you're feeling today.
NIMOY: It feels like a reunion.
CARROLL: In Nimoy's later years, he spoke about the dangers of smoking after being diagnosed with a lung disease.
NIMOY: I quit a long time ago - why is this happening to me? But it's a lesson that I had to learn.
CARROLL: His character Spock may have prided himself on being emotionless, but in the end, that could not be further from who the man was
to his family and friends.
NIMOY, "SPOCK": I am and always shall be your friend.
SHATNER: First and foremost it's a long and deep friendship -- love - that I have for Leonard. He is in essence the brother I never had.
SHATNER AND NIMOY: (LAUGHING).
NIMOY, "SPOCK": Live long and prosper.
(END VIDEOCLIP)
LAKE: Well Nimoy was an actor, writer and director, but he was more than that. He was also a philanthropist. With his wife, Leonard Nimoy
established the Nimoy Foundation. It's made hundreds of thousands of dollars in donations to fund the arts.
In 2001, Leonard and Susan donated $1 million to help renovate the Griffith Observatory in Los Angeles - an auditorium - and the building now
bears his name. Mark Pine is the deputy director at the Griffith Observatory and he joins us on the line from Los Angeles.
Thank you so much for joining us today. You know, he's so associated with that Spock character and so many Trekkies love him, I don't think a
lot of people know about this other side of him.
MARK PINE, DEPUTY DIRECTOR, GRIFFITH OBSERVATORY: Well, it's good to join you, Maggie, and obviously it's always good to talk about Leonard
Nimoy. And in fact you're exactly right, and having the theater named after him is just a small tribute to the contributions he made to society.
And as someone who is always obviously working in space, if you could say that, and interested in astronomy and the impact that it had on
society, it's kind of a natural for that theater to be located at the most- visited public observatory in the world.
So we're enormously grateful to him and Susan for everything they did. When they made that donation, we were at the beginning of our renovation
project and as much as the money, the fame that he had then transferred on to our project and gave us visibility that enabled that campaign to be
successful.
LAKE: You know, true, you know sometimes actors are annoyed when they are so associated with one character - they're never really able to break
away. It seems that Leonard Nimoy really embraced this and became an ambassador in a lot of ways for both space travel and for the arts.
PINE: I completely agree, and I think one of the things that was most notable about him was that he didn't see that there was a hard boundary
between science and the arts and in fact - and tried to find ways where you could bridge those sorts of things where you were being entertained while
at the same time being educated.
And we use his - the theater with his name on it - for our school programs, for our lectures, for our public demonstrations - things that
combine science and information and entertainment in a way that he lived his life by.
LAKE: And I'm so glad you mentioned that, Mark, because in that way he was really ahead of his time as of course we all try to engage our
children in more sciences and more math as they prepare for their future. Mark Pine from the Griffith Observatory, thank you so much for your work
and for helping us remember Leonard Nimoy today. Thank you.
PINE: You're so welcome, thank you.
LAKE: Leonard Nimoy's final tweet earlier this week has struck a chord with millions of his fans. He passed away this morning at his home
in California at the age of 83.
(COMMERCIAL BREAK)
LAKE: And it's a viral marketing hit unlike anything we've seen before. Forget the Super Bowl blackout and forget Thursday's llama
breakout - anyone - all anyone - is talking about is the internet dress freak out. The tantalizing question - what color is it? Some say blue and
black, others say gold and white. The debate went totally viral late Thursday night and kinds of brands, as you can imagine, were eager to jump
on board. Lego tweeted out a picture of two Lego women wearing a dress of each color combination - quick on the draw. Guinness meanwhile tweeted a
picture of two pints saying they're proud to be black and white or white and black.
So what color is the dress really? Nina dos Santos spoke to the dressmaker's fashion director to find out.
(BEGIN VIDEOCLIP)
MICHELLE BASTOCK, FASHION DIRECTOR, ROMAN: I can officially compare to the color age (ph) by a blue with black trimming. So, yes.
NINA DOS SANTOS, NEWS ANCHOR AND CORRESPONDENT BASED IN LONDON FOR CNN INTERNATIONAL: So blue and black, right. We have your word for it. Let
me ask you whether you're going to make a white and gold version because it sounds like there's a big market for that too.
BASTOCK: Definitely. Well, have already called in white and black, but if the public wants white and gold, definitely we can have it there in
six months, no problem.
DOS SANTOS: How transformative has this been for your business? How surprised are you that this dress of yours that you designed - I might say
it retails for a relatively modest price here as well. It's quite affordable -
BASTOCK: (Inaudible).
DOS SANTOS: -- it's literally gone viral.
BASTOCK: Well, we're really surprised and really happy. Everyone is buzzing here in the company. It's just amazing. But it really so
incredible because when you look at it on the screen, it - some people see a white and some people see a blue. It's just crazy, it's amazing.
DOS SANTOS: How has your company responded to this then? Because I've noticed you've changed your website just this morning and updated
that. What else are you doing to capitalize on the interest?
BASTOCK: (LAUGHTER). Well, certainly all the stores are putting a forward face and keep a vision (ph). We are really delighted that everyone
liking it, that everyone's talking about it. Oh, it's just so fabulous. It's just amazing!
DOS SANTOS: How has your website coped, Michelle? Because obviously the traffic must have been huge. This is one of the most trending topics
on Twitter out there yesterday and today.
BASTOCK: So far we're coping OK. You know, we are prepared for things like this, so (inaudible), we are OK.
DOS SANTOS: Have you seen a boost in business of orders - have this dress gone out the window?
BASTOCK: Definitely, yes. With such media cover worldwide, we're really busy. All the team on the website are going crazy.
DOS SANTOS: How aware are you of the history of the person who wore this dress? It seems as though somebody wore this dress to a wedding - I
believe it was actually in Scotland - and that's where the picture originally comes from.
BASTOCK: Yes, it is a love girl - a young girl and her name is Kaitlin Monte, I believe. And she was purchasing it for a wedding, tweeted
a friend and they just start debating about the colors. You said it's blue, no it's white, no it's blue, it's white, and suddenly it had gone all
viral around the world, and it's just crazy!
(END VIDEOCLIP)
LAKE: I'm thinking she thinks that she won the lottery today. Well one thing that isn't an illusion is how the dress went viral in record-
breaking way. Now it started on Tumblr where a user posted the picture and asked people to give their view on its true color.
Then someone from BuzzFeed spotted it and posted it there. It just went crazy after that, drawing over 16 million visitors to the site - at
one time than ever before. The debate filled Twitter feeds everywhere -- #thedress is still trending worldwide as we speak.
And it wasn't long before mainstream media sites including us here at CNN jumped on board. How could we not? Our senior media correspondent
Brian Stelter joins us now from Los Angeles. Brian, this is just - it's incomprehensible really. We talked about that dressmaker feeling like she
won the lottery. I have a feeling that BuzzFeed comes out a winner here too.
BRIAN STELTER, SENIOR MEDIA CORRESPONDENT: Absolutely. I wore blue and black for this conversation, Maggie.
LAKE: (LAUGHTER).
STELTER: BuzzFeed last night - they - their servers actually had a hard time keeping up with all of the traffic, and that's something
remarkable given that BuzzFeed is one of the biggest websites in the world already. It was a moment where I think we saw the power of Facebook and
Twitter to drive traffic to websites, including BuzzFeed but many others as well.
At one point last night BuzzFeed had 670,000 people simultaneously on their website. Now that's cable news type traffic. We are used to seeing
this kind of audiences for television, but to imagine that kind of simultaneous audience on the internet is something that's more new, and so
their servers were straining under all the traffic. It's also important to point out most of the traffic was on mobile devices. We can see that's
where the future is going and last night we could see that as most people were looking at these pictures, sharing them and engaging in all this on
their phones.
LAKE: Yes, it' amazing and it's funny you mentioned that - I have a feeling #thedress is going to make into Twitter's next presentation to
investors -
STELTER: (LAUGHTER), yes.
LAKE: -- as they try to explain why they matter, why they're important. One that that occurs to me though, Brian, in this is that so
many people want to harness that power, but this just proved how hard it is to predict about what's going to go viral. It kind of reminds me like -
why this? I was thinking to myself today. I mean, yes, it's interesting but why did this break the internet as opposed to something else that we
would've talked about. Just like we were wondering why the ALS Bucket Challenge went so viral -
STELTER: Right.
LAKE: -- and so many other good causes didn't. It's hard to predict what's going to sort of light on fire, isn't it?
STELTER: It is. It is almost impossible to predict it. I mean, even sites like BuzzFeed which exists to try to figure it out have a hard time.
And, you know, they've published so many different stories not knowing which ones are going to stick. The key for a site like BuzzFeed or frankly
for a CNN is to once something starts to be trending, to jump on it, to capitalize on it.
BuzzFeed posted more than a dozen stories last night about this thing and they're still going at it today. You know, it's to be able to
capitalize on it that is key. I would also say there's a couple of things we can point to as indicators. This story went online about 6 p.m. eastern
time last night. So that's about prime time for peak web traffic.
They were able to ride this at 7, 8, 9, 10 p.m. It started to slow down around midnight because people started to go to bed. So they were -
they didn't time this on purpose. But the timing worked out pretty well for them.
It's also worth pointing out it was a very simple, entertaining story. Everybody could have an opinion about it, everybody does have an opinion
about it. It was so digestible and so entertaining and obviously things like that are going to resonate with lots and lots and lots of people.
LAKE: Yes, it's a good point. And a lot of people were talking about too the fact that there is so much bad news in the headlines right now.
It's a difficult time, there's a lot of other things that are out there are beheadings and just really, really tough, difficult stuff. And maybe
everybody needed a little bit of levity for a moment.
STELTER: Absolutely. It's why the llama chase was a big story yesterday and all evening newscasts with the llamas last night because it
was a moment of levity. And we've always had that in media, you know. You're online, you can see a lot of criticism about the coverage of the
llamas and the coverage of the dress and I understand it but there's always been a comics page in the newspaper, there's always been a style section,
there's always been those sorts of more entertaining options in the news media. This is just a 21st century version of what that part of the news
business is.
LAKE: Absolutely. And the people have spoken, Brian. We listened to them, it's what they wanted to talk about for a change and we weren't going
to deprive them of that. I also think it proves it needs to be organic because it came from somebody posting on Tumblr -
STELTER: That's true.
LAKE: -- whether some - instead of something we fed them. Brian Stelter, --
STELTER: Yes, I'm glad it wasn't some advertiser that created this and set it up, you know? I'm glad that it was more organic.
LAKE: That's right. And for the record, I see white and gold, Brian, I don't know about you, but -
STELTER: Oh. Black and blue --
LAKE: -- there you go!
(LAUGHTER)
LAKE: Brian, thanks so much. Nobody can agree. We'll be back in just a moment.
(COMMERCIAL BREAK)
LAKE: Finally tonight, that blue and black dress is not the only gown in the headlines. This $150,000 Calvin Klein original that actress Lupita
Nyong'o wore at the Oscars on Sunday has vanished. The gown was apparently stolen on Wednesday from her hotel room in West Hollywood. Detectives are
investigating and the hotel is helping the police in the case.
Representatives from the hotel are calling it a terribly unfortunate situation. And that's "Quest Means Business." I'm Maggie Lake in New
York. Have a wonderful weekend.
END
