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Quest Means Business

Putin Orders Suspension of Flights to Egypt; Black Boxes Point to Bomb on Plane; Investigators Detect Explosion on Plane; Deadly Mudslide after Dam Bursts in Brazil. Aired 4-5p ET

Aired November 06, 2015 - 16:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[16:00:00]

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RICHARD QUEST, CNN HOST: The closing bell is ringing on Wall Street. The Dow up about just 40-odd points. Small gains at the end of the week. Air

Products doing the business.

Oh, dear. All right. You can stop now. A lot of wimpy gavels on Friday, November 6th.

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QUEST: Tonight: it's no accident. Investigators say the black boxes leave them convinced there was a bomb onboard the Metrojet 8321.

It's no longer in the pipeline: the U.S. puts an end to Keystone XL once and for all.

And it's devastation in Brazil (INAUDIBLE) collapsing dam that floods an entire village.

I'm Richard Quest. Of course, I mean business.

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QUEST: Good evening. Tonight, breaking news: investigators are maintaining the crash was "not an accident." That's their words. The

broadcast of France 2, a CNN affiliate, says that's the conclusion that's been reached by European experts, particularly, of course, the BEA.

(BEGIN VIDEO CLIP)

QUEST (voice-over): Those experts have analyzed the black boxes from the Metrojet wreckage and the report says the cockpit voice recorder points to

an explosion. They're convinced it wasn't due to a mechanical failure.

(END VIDEO CLIP)

QUEST: And there's also been a turn-around in Russia. We've learned that Vladimir Putin's decision to halt all air traffic came after the U.S. and

U.K. shared intelligence with Russia.

Let's start with that part of the story. Matthew Chance, our senior international correspondent, is in Moscow.

A dramatic about-turn and largely because we're told the intelligence was shared. But, Matthew, the Russians haven't just restricted Sharm el-

Sheikh; they have restricted the whole of Egypt.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: They have. From tonight, in fact, local time here in Moscow, they said there will be no

further flights to Egypt from Russia, which, of course, leaves them with a problem.

They've got 50,000 Russian citizens on the ground in the Sinai Peninsula, not just in Sharm el-Sheikh, in other areas as well. It's a popular

holiday destination for Russians at this time of the year, to catch a bit of winter sun before the winter really sets in in this part of the world.

Logistically it will be difficult to get them all back home. So that's one of the tasks as well as the suspension of the flights.

The other task is to get those people back home. And so it's a big logistical effort as well as a dramatic U-turn, which the Kremlin doesn't

often make. So pretty significant events this evening.

QUEST: Now in terms of the British and the Americans, do you think they were stung by the Russian accusation?

I think the word that the PR woman from Russia said, she it was "shocking," I think is what she said yesterday, that they wouldn't share the

intelligence.

CHANCE: Yes, it was Maria Zakharova (ph), the spokesperson for the Russian foreign ministry, who said those words. She said if there was any

information that the U.K. has -- and she was talking about the U.K.'s suggestion that it may have been a bomb onboard that plane -- if there's

any information that they have, it is shocking, she said, that they haven't shared it.

That message appears to have been taken to heart or listened to in London because when I spoke to the Kremlin earlier this evening, they told me that

certain information has now been shared. And it was shared, it seems, before that decision was made to suspend the flights. So it was obviously

a factor.

We still don't know what that intelligence was that was shared. And of course, the Russians are still not saying they believe this was a bomb.

But the fact that they turned the about-face in this way, there cannot be many other explanations for it.

QUEST: Matthew Chance in Moscow for us tonight.

Les Atwood is a former 777 captain and is CNN's aviation analyst, joins me now.

Les, I need to focus on this part of the story tonight. The analyzing of the black boxes and the CVR, there's something on it that they believe

shows an explosion.

What is that likely to be?

LES ATWOOD, CNN AVIATION ANALYST: Well, it's got to be some quick, audible sound that's similar to an explosion. They might have tracked different

patterns of audible signals. That's all I can think of. There might be just a little bit left on the digital flight data recorders, just

instantaneously --

[16:05:00]

ATWOOD: -- before the explosion occurred and took all the power out.

QUEST: With crashes, and it's a unique signature in the sense that, with crashes or explosions, the power goes, doesn't it?

It tends to because it tends to rupture both the power lines and the data lines.

ATWOOD: Well, it looks to me that the tail came off in this particular circumstance. So as we know, all the data recorders are in back of the

tail. So the minute the tail -- if the tail comes off immediately after the explosion, you lose all power to that data.

QUEST: I'm not being unduly distasteful, I believe, when I ask you, as a captain, I mean, how does one ever train for the scenario of an explosion?

ATWOOD: Richard, you can't. You really can't.

In this particular circumstance, here's what I could imagine, if it was my cockpit. I would feel an explosion or depressurization in my ears and that

would go right away for my checklist, my explosive depressurization checklist, which involves putting on an oxygen mask. Immediately that's

what I would do.

And I would communicate to the gentleman or gal next to me. And then I would probably want to start the airplane down.

Well, obviously we know the circumstances of the plane was starting down on its own. But my immediate reaction in this particular case on A321, grab

the side stick, then control my aircraft. We know probably what happened at this point. They had no control of that aircraft.

But I would think they would be wanting to respond to that airplane as quickly as possible. And then, to no avail in this particular

circumstance.

QUEST: You -- and I put myself in the same category -- have hoped beyond hope in many ways, that it was, you know, that there were other options on

the table. When you hear what we're reporting tonight -- and feel free to completely disagree with it -- but when you hear what we're reporting

tonight, is there many now left, do you think?

ATWOOD: Well, listen, I'm a pilot. I'm always skeptical about information that comes across in this way, because, as you know, the Egyptians have not

really followed the ICAO procedures as far as press briefings are concerned. It's been total, absolute clandestine, in almost all ways,

about press briefings.

And you've been to some of these press briefings yourself on tragedies like this. But, you know, at this point, you know, I'd like to believe that the

whole circumstance with reference to the forensics is going to be -- is to corroborate the data that we already have.

QUEST: Right. And if we look at the nations involved, because international incidents always have multiple nations. Here we've got the

Russians, who are clearly, at some extent, they're not driving the investigation; the Egyptians are.

But I'm getting an impression that the French are playing a very large role, the BEA?

ATWOOD: The BEA seems to be. And they are very well respected, as well respected as the NTSB is here in the United States. But at the same token,

I really want to see the fragmentation; I want to see absolute evidence that this is an explosive device extraneous to the airplane.

QUEST: We're going to be talking about airport security in just one moment, which is coming up after the break.

But as we go into this break, as a captain, how aware, how are you of airport security?

Or do you tend to believe if your airline has said it's OK to fly there, you just get on with it?

ATWOOD: Essentially, we just get on with it, Richard. I mean, it's -- we have our doubts. We check the people onboard that are -- I mean, there are

certain things that we can do ourselves.

But we're talking -- you know, the airplane that I fly, it's a big airplane. It's hard to manage absolutely everything. So it's a difficult

task. It's a difficult task.

QUEST: Good to see you, sir. Thank you. Fly safe.

ATWOOD: Thank you, sir.

QUEST: Coming up after the break, we'll look at that question of airport security. If it's not an accident, then what on Earth do you do to try and

secure airports that we'd already been told were safe and secure?

QUEST MEANS BUSINESS on a Friday.

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QUEST: Governments and airlines appear to be losing faith in security at Egypt's airport. If you take a look, you'll see the U.S. says it's

enhancing security for commercial flights from some airports overseas. And it says they'll be increased screening of luggage and other cargo and extra

assessments of the airports themselves. This shows you the range of countries.

Now if you look at in Europe and in Russia at the moment, so let's look at the countries that are suspending flights at the moment.

Well, obviously you've got Russia, which is suspending all flights as we're talking about in the last hour, basically from tonight, as the cause of the

crash is determined. President Putin saw or at least was briefed on the U.S. and the U.K. intelligence.

The United Kingdom, which led the way, in a sense, in making the first announcement when the prime minister said it may be a bomb, has also halted

flights to Sharm el-Sheikh. Rescue flights, so-called repatriation flights for British tourists are underway.

Some of those were actually diverted from Sharm el-Sheikh because of the limited slots available and the amount of congestion and also the sheer

amount of luggage that is now building up because it's having to be transported by other means.

Other airlines are taking measures into their own hands. You've got Germany, for example, Lufthansa and subsidiaries are suspending flights to

Sharm el-Sheikh. You've got the Netherlands, where you have restrictions; KLM is banning checked bags from cargo and allowing hand baggage only.

In fact, if you look at all of those, these are the other countries that have got restrictions.

In Turkey, you have flights between Istanbul and Sharm restricted to daylight hours only.

I'm not entirely certain the significance of that. I can't see that it makes that much difference but anyway that's what Turkey is doing at the

moment.

Martin Aggar is aviation director for G4S Security joins me now.

Sir, well, you've obviously heard the news as it's developed over the last hour or so.

If this is -- I mean, I think we can go from an "if," almost like to whether it's accurate, the security question at the airport has always been

amongst the weakest links in aviation security, hasn't it?

MARTIN AGGAR, AVIATION DIRECTOR, G4S SECURITY: Indeed.

QUEST: And with that in mind, what does one do?

What does one now do?

AGGAR: Obviously, in situations like this, a full review will take place at the security at that airport to understand where the issues of --

ultimately resulted in this incidence taking place.

Under the U.K. government, they've sent some specialists out to review the security at that airport to understand what measures are in place prior to

the event taking place and will put some additional measures in place to give comfort for passengers that will travel out of there, particularly for

the repatriation flights.

Obviously the national aviation security program for that country will be under review. But more importantly, the supervision and the audit and

compliance process will be --

[16:15:00]

AGGAR: -- looked at in more detail, to ensure that the compliance is being fully met in line with the ICAO --

(CROSSTALK)

AGGAR: -- International Civil Aviation Organization requirements. So all of that will be part of the review.

QUEST: See, and this is a fascinating aspect and I'm glad to have your perspective on this because, ultimately, what has to happen is, if you have

got an airport where you thought everything was safe but something transpires not to be, then really you either improve the airport or it's up

to every airline and every government when they send their planes there to ensure the safety individually, isn't it?

If you can't be relying on the systemic security of the destination?

AGGAR: Absolutely, which is why ICAO do carry out regular audits in various locations around the world. And the U.K. government, as an

example, will carry out specific audits of airports where U.K. registered aircraft are flying in and out of.

To give comfort, the security processes overseas are in line with the international requirements. It's a constant review process.

QUEST: A two-part question here, sir.

Firstly, how surprised were you that Sharm has been found potentially to be deficient?

And secondly, how many Sharms do you think there might be?

AGGAR: I can't speak specifically around Sharm itself. It's not an airport I've visited.

I have visited airports in various locations around the world where, yes, I have had concern for some of the security processes and procedures that

I've seen and witnessed taking place.

So I think there is other examples around the world where the states need to really look at their security process and procedures that are in place.

But it's more to do with the compliance and the audit and the supervision of the process rather than whether or not they've got the processes in

place.

QUEST: Martin, thank you for joining us. We appreciate your analysis for us this evening.

Nima Elbagir is live in Sharm el-Sheikh with us this evening.

We have much ground to cover, Nima. And the first, of course, is this leak, this report that's coming out of Cairo.

If true, then Sharm el-Sheikh has some very -- the airport has some very serious questions to answer tonight.

NIMA ELBAGIR, CNN CORRESPONDENT: Well, we have been speaking to airport officials, Richard, and they believe that they don't. They believe that

their airport security is up to international standards and has been certified as such. And they're speaking to the position that the Egyptian

government has maintained throughout, which is that there is nothing wrong with the security here.

Although, of course, there is palpably, given the shifts in the positions ranging from the U.K. coming out initially, then the U.S., and now with

President Putin's statement about Russian tourists coming back home and suspending flights between Russia and Sharm el-Sheikh.

What they are conceding is, though, although they believe they are to international standards, they are allowing other governments to come in and

check their carriers, the first of which is this British team which has been going over the British carriers with a fine-toothed comb, we

understand, of course, and were the first to instate this restriction on hold luggage.

But the Egyptians so far are maintaining that they don't believe that anything went wrong here as yet.

QUEST: And the repatriation flights, well, some of them didn't take place, because the airport's slot congested. I believe that the luggage is

building up in the storerooms because the luggage is being transported back to the U.K. and elsewhere by military flights. It does sound a little bit

chaotic.

ELBAGIR: I think "a little bit chaotic" is a massive understatement. We've been standing here for hours now, watching busload after busload of

tourists of various nationalities, including a group of Brits, who came back three separate times, each time being reassured that you will get on

this flight, only to be told by the end of the day, for example, that all flights to Gatwick had been canceled.

The screens have absolutely no reflection on the reality on the ground. It shows this beautiful picture of departures that are supposed to head all

around the world, none of which is actually materializing.

As far as I can see, the only nationals that have left so far have been the Russians, who did move out quite quickly on the scheduled flights that came

out as soon as President Putin's statement came out. But the Brits are absolutely livid. They're livid.

And, Richard, they're really scared because they feel like nobody's telling them anything. And if this is an insecure situation, then this is the last

place they want to be on holiday with their families.

QUEST: Nima, thank you for that frank and forthright assessment of the --

[16:20:00]

QUEST: -- situation in Sharm el-Sheikh tonight.

So I'm afraid there is so much to bring you this evening. And most of it is not of a pleasing nature.

Much of a town has been washed away and at least two lives lost. It's in Brazil. The dam burst in the middle of the night. We'll take you to Rio

to hear the details of what happened. It's QUEST MEANS BUSINESS and this is a Friday.

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QUEST: Rescue operations underway in Brazil after a dam burst in the small town of Bento Rodrigues, about six hours north from Rio de Janeiro. More

than a dozen people are missing and two are confirmed dead.

The dam was holding back wastewater from an iron ore mine. Mudslides swept through the village below. Many homes have been washed away entirely or

buried up to their roofs in mud. Shares in the two companies that owned the mine, not surprisingly, are sharply down. The two companies are BHP

Billiton and Vale. And you can see they're down over 5 percent.

Andrew McKenzie is the chief executive of BHP Billiton and offered his company's full support to the local community.

(BEGIN VIDEO CLIP)

ANDREW MCKENZIE, CEO, BHP BILLITON: We have, of course, offered our full and complete assistance to the Samarco team and to the local authorities

and in the first instance, to manage the immediate rescue efforts and then to help, of course, with the very important cleanup and, afterwards, the

investigation.

(END VIDEO CLIP)

QUEST: Shasta Darlington is in Rio for us tonight.

Shasta, what happened?

SHASTA DARLINGTON, CNN CORRESPONDENT: Well, we certainly would all like to know that, wouldn't we, Richard?

Obviously they're still investigating the cause here. We know what happened after this dam burst. Literally a tsunami of sludge flooded this

town of Bento Rodrigues. More than 500 people have been left homeless. And of course, there are about 13 people still missing.

So the expectation, unfortunately, is that the death toll will continue to rise. Many of those, they believe, were the workers at the mine itself.

Now, as far as what caused it, what we heard from the company, Samarco, which is jointly owned by BHP Billiton and Brazil's Vale, as you mentioned,

is that they're investigating it.

[16:25:00]

DARLINGTON: And one of the issues that they started taking a look at today was the fact that there were some very slight tremors, four of them, right

around the time that the dam broke.

Now, they were so light, that people in the region didn't even feel them. It's not clear if they're related but it's certainly something they say

they're going to look at.

And the mining company is really going to be in the spotlight, Richard, because not only are we talking about a rising death toll but this was

wastewater. The people who have been pulled out and who are now at safety, they've had to be decontaminated.

There's concerns that this contaminated river, that they'll see health repercussions and environmental repercussions. So this won't go away

overnight.

QUEST: And without obviously forecasting great loss of life, more than 2 dozen people are missing, two confirmed dead, I don't think I'm being

unrealistic when I say that number is going to rise.

DARLINGTON: Richard, it's actually hard to say. It was an agricultural area, except for this town of Bento Rodrigues. In the area that was hit,

was an area with about 200 homes. But a lot of people weren't home. So at this point, the number of -- the confirmed number of missing is 13.

Could that rise?

It certainly could. The numbers have been all over the place. The 13 is really just referring to those workers. So we don't know how soon we'll be

able to come up with an official number. Also because, if people were killed, they're likely buried under so much mud that it will take quite a

while to, unfortunately, find their bodies -- Richard.

QUEST: Shasta, thank you for bringing us that.

The pictures are very disturbing when you see that wall of water coming over the dam after it collapsed.

In just a moment, after this very short break, I'm going to update you again on what the latest situation is; the Russians have suspended all

flights to Egypt, not just Sharm el-Sheikh. The Europeans now saying that the cockpit voice recorders and data recorders indicate that there was a

bomb onboard. And tourists are still stranded in Egypt's Red Sea resort tonight.

It's QUEST MEANS BUSINESS on this Friday night.

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[16:34:37] RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Hello, I'm Richard Quest. There's more

"Quest Means Business" in just a moment when U.S. labor secretary tells me the jobs recovery has now reached the middle class.

And President Obama signals the end of the Keystone pipeline project.

Before all of that, this is CNN and here on this network the news always comes first.

Investigators believe Metrojet flight 9268 was brought down by a bomb and not because of an accident. The broadcaster France 2, a CNN affiliate,

says that's the conclusion reached by European experts who've analyzed the flight recorders.

All flights from Russia to Egypt have now been suspended. President Vladimir Putin authorized the move. The head of Russian security services

said tourists should be protected until answers are found.

(BEGIN VIDEOCLIP)

ALEXANDER BORTNIKOV, DIRECTOR, FSB, VIA INTERPRETER: Until we establish the real reasons of what has happened, I think it is reasonable to suspend

the flights of the Russian aviation to Egypt.

This concerns first of all the tourist channel. On the other hand, it is necessary to actively cooperate with the Egyptian authorities a

continuation of our mutual work on the investigation of this catastrophe.

(END VIDEOCLIP)

QUEST: The United States says it will step up security for flights heading to the U.S. from the region. The U.S. joins a number of governments and

airlines that have decided to change their security arrangements.

Speaking to me on "Quest Means Business," a Lufthansa representative said it wasn't yet clear how soon normal service could be resumed.

(BEGIN VIDEOCLIP)

VOICE OF BARBARA SCHADLE, HEAD OF COMMUNICATIONS, LUFTHANSA: We're working closely with the authorities to figure out if and how the security

situation can be developed so we can start flying again.

Because it is really, really important for us that we continue to offer this service to all our customers and of course we're taking care that

those people who have been flying with Lufthansa Group Airlines to Sharma El Sheikh get back home safely whenever they want to.

(END VIDEOCLIP)

QUEST: An international watchdog said mustard gas was used over the Syrian town of Marea earlier this year. The Organization for the Prohibition of

Chemical Weapons does not say who was responsible but says the incident occurred on August the 21st and could have led to the death of a baby.

A town in Brazil's been inundated with mud and water after a dam burst. The dam had been holding back wastewater from an iron ore mine.

Firefighters involved in the rescue efforts say at least two dozen people -- I beg your pardon - say at least two people are dead with more than a

dozen more missing.

Straight to Downing Street, our correspondent - senior correspondent - is Fred Pleitgen. He's at the British - outside the British Prime Minister's

home.

Fred, lots to catch up on and lots to go through so we'll go at a fair old clip. Firstly, did the Brits and the Americans share intelligence with the

Russians as the Russians are now suggesting?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, they, I mean certainly that is what the Russians are saying and there really isn't

any reason to doubt that.

And I think one of the big things that points to that, Richard, is if you look at the measures that the Russians have put in place, since they have

suspended their flights from and to Sharm El Sheikh is they said we're going to try and get our passengers out of there.

There are of course still some flights that are going, but what is going to happen is that those passengers are not going to be able to take any sort

of luggage inside the cargo hold. They're not going to be able to take any check-in luggage with them. That check-in luggage will be brought later.

That of course is exactly the same thing that the Brits are doing as well. And it's really interesting to see that even in light of all the

differences that these countries have, vis-a-vis what's going on in Syria.

Of course also the situation in Ukraine as well where both the United Kingdom as part of the European Union and the U.S. had put sanctions on

Russia, they're still able to share intelligence on a matter like this one which is of course of very high importance to try and get to what's

happened here.

So this is something that clearly indicates that the intelligence was shared. And also the reports that we've gotten from the BBC that are

saying that U.K. intelligence sources tell them that they believe - very highly believe - that it was probably a bomb that was put inside the cargo

hold of the plane.

[16:35:08] That of course also seems to indicate why so much emphasis is being put on the passengers being taken back but no check-in luggage being

on those flights, Richard.

QUEST: And the British were the first to come out saying they believed it was a bomb, but the repatriation of British citizens is as Nim (ph) puts

it, in Sharma El Sheikh, is chaotic at best.

How aware are they, the Brits or the British government, that, you know, things are difficult?

PLEITGEN: That it's difficult - they're very aware of that fact, and they've acknowledged that. They said, listen, we understand the

frustration of the many tourists that are down there, the Brits that are down there, but they also have put out a statement today at Downing Street

number 10 now saying listen, this is a highly complex and difficult situation that we're in.

One of the things that they're saying is that of course at this point in time with so many empty aircraft flying to that - I wouldn't say it's a

small airport - but it certainly is not necessarily one that very easily takes it a lot of additional traffic.

That of course there's going to be backlogs, there's going to be restrictive use of the slots there. That's why some of the flights that

have been heading out towards Sharma El Sheikh have had to divert.

One of them of course to Larnaca, to Cyprus. Others have had to turn back and go back here to the United Kingdom. That certainly is something that

they're aware of.

So on the one hand it's the limit of slots there in Sharm El Sheikh but also of course the additional security measures that have been put in

place.

It'd simply take a lot more time to actually get people on their planes and get them up in the air. It's something that very much the British

government says it is aware of.

Of course British Ambassador is also down there in Sharma El Sheikh speaking to people there and trying to calm them down a little bit.

But of course they also said, listen, at this point you have to understand the situation that safety comes first and that there will be times when of

course people are going to be frustrated, they're going to have to wait longer.

Many of them of course have wanted to come back from their holidays several days ago but it's simply at this point in time, in light of the security

situation there and in light of what's happened, that is simply the only way to do it at this point in time, Richard.

QUEST: Fred Pleitgen outside Downing Street where it's half past nine into the evening. Fred, thank you.

Those are strong jobs reports in the United States which seem to have shaved away (ph) for an event (ph) not seen in nearly a decade.

U.S. rate rise before the New Year - while it's a live possibility according to Janet Yellen. But now it might be more than live, it might be

kicking and screaming. In a moment.

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[16:40:18] QUEST: Well if you look at the numbers, they tell their own story, that the case for a December rate rise of interest rates in the U.S.

is much stronger after the U.S. jobs report smashed expectations.

There it is - 271,000 jobs - extra jobs, new jobs - were created.

September was revised downwards, August was revised up, but it follows - this 271 - is the best performance that we have seen, the strongest of the

year.

And it's 90,000 more than economists had expected. Unemployment in terms of the global - in terms of the percentage fell to its lowest level since

2008.

And this is crucial to those naysayers who believe that it's all just smoke and mirrors. Wages grew at their fastest pace in more than six years.

With so many jobs, the quantity is there. Speaking to me earlier, the U.S. Labor Secretary said job quality is also coming back.

(BEGIN VIDEOCLIP)

THOMAS PEREZ, U.S. LABOR SECRETARY: You see the highest area of growth is business and professional services. So those who say that the recovery now

is only low-wage jobs, you look at the jobs that are being created now, construction, they're good middle class jobs.

The biggest growth area over the last year has been business and professional services, and by and large those are good middle-class and

above jobs.

And you look at education and health - a lot of good jobs there as well. So we're moving in the right direction. The last two months, even when you

factor in those lower-than-expected job numbers, we're still over 200,000 for this year.

You look at the wage growth and the last 12 months have been the best 12 months for real wage growth since 2009.

You look at the number of people working part-time for economic reasons. In other words, they're working part-time but they want to work more.

That's down 1.2 million over the last year.

So a lot of good bellwethers of an economy that continues to move in the right direction. A lot more work to do, Richard, as you know.

QUEST: How realistic is it to get something meaningful done? Not just to tread water and continue with the same policies, bearing in mind the split

nature of congress and the presidential election where the campaigns have become febrile.

PEREZ: Well I think there are a number of things that can get done. I'm heartened by the fact that there was a bipartisan budget framework bill

that was passed.

We just saw a bipartisan transportation infrastructure bill passed that includes the reauthorization of the Ex-Im Bank. So I think there - I think

the - a long term infrastructure bill will happen in the next few weeks.

I think the Ex-Im Bank reauthorization will happen before the end of the year. We will continue to fight for increases in the minimum wage.

A lot got done. A lot can get done if you muster the will to do it and we're going to continue fight like heck because the most important thing I

hear from Americans that I meet in the course of my travels is "I need a raise - I'm working 50 hours a week -

QUEST: Right.

PEREZ: -- and I can't make ends meet." And that's not fair and we know what the solutions are for those challenges. We simply need the

Republicans to muster the will to listen to their constituents.

QUEST: Right.

PEREZ: And when they do that, I think we can make progress.

(END VIDEOCLIP)

QUEST: Well, I think that the Labor Secretary may as well have just taken a poll amongst some people that I've been talking to today who had all

seemed to agree with his particular view - "I need a raise."

Janet Yellen, talking of raises, says a rate rise is a live possibility. And now you have this jobs report. Well, let's go to the traffic lights.

So if you look at the jobs on how it stands in terms of when the Fed gets ready to do the raise, remember the Fed has its dual mandate of employment

and inflation. It has to promote some form of stability in the market.

So, on the jobs, it would seem to suggest now when you look at that sort of number, 5 percent is considered full employment.

Yellen's warned of a weak wage growth, but that might now be changing if you look at average hourly earnings.

Market volatility much less extreme than it was during the summer. That hard landing in China is subsiding and China does - at least for the moment

- seems to be getting a better grip on things with more QE coming in Europe from the ECB.

And then finally on inflation. Now this is a biggie. The Chicago Fed president says wages would push up inflation, the Fed - basically you're

looking for 2 percent - 2 percent inflation.

Now inflation is remaining under that level consistently and likely to be for some time to come. So on the inflation front, you may be actually

suggesting not really having a wage rise - an interest rate rise - so far.

[16:45:12] Expectations - look and see how the market down for most of the session. A couple of peaks and troughs of gains over the course of the

day, and a gain of 46 percent on a quarter of a percent.

Diane Swonk is with me, chief economist at Mesirow Financial. Well, Diane, this jobs number - I know there's another one still to come in November,

another one late in the month, we've got one more to come, but on the basis of this number, Janet Yellen's live possibility is kicking and screaming to

get out of the door.

DIANE SWONK, CHIEF ECONOMIST, MESIROW FINANCIAL: It certainly is and I think the important issue here is that, you know, relative to yesterday,

although I had a December rate hike in my forecast, I feel much more confident about it today.

I think the important issue is not only was this number a robust number, but you mentioned the wage gains. And although they move in fits and

starts and it may not be as consistent as we'd like, the just sheer magnitude in the number after coming off a very soft summer numbers as you

noted earlier, and really seen that catch up -

QUEST: Right.

SWONK: -- along with wage gains, those things together are enough. The Fed was already primed to pull the trigger in the month of December. I

think now what you're actually doing is pulling in some of the people who were naysayers into more of the pulling the trigger mode, at least not

dissenting on it.

QUEST: Looking at the chart which is on the screen next to you, that gain 271, we haven't seen a number even like that - 260 - since the early Spring

or since the Spring. What was the driving factor that made 271?

SWONK: You know, we saw a lot of things was outsized gains -- the professional services mentioned earlier. These are really a lot of entry

level higher-wage jobs. That was a big driver of gains. We also saw a surge - hospital construction has bene up and along with hospital

construction, a lot of hospitals are obsolete.

Now we've also had a lot of the fastest-growing part of the population happens to be 80 and over and they tend to need -

QUEST: Right.

SWONK: -- a lot more hospitals.

SWONK: And so we're seeing that kind of hiring but we also saw retail hiring. The construction hiring doubling is recent trend -

QUEST: But, OK, right. But -

SWONK: That was a real outlier.

QUEST: But why now? What has changed in the environment that it allows all this to take place?

SWONK: You know, I'm not sure that a lot has changed. Over the summer we were draining inventories which made the situation with China and the

strong dollar look even worse in the manufacturing sector and have spillover effects to other sectors as well - we had 1 1/2 percent growth.

And although the underlying consumer held up, what you really saw in October was that comeback of the consumer as well - hiring in areas where

really acknowledging - remember Halloween is our second largest holiday in the United States, and I think you saw a lot of that. The going out to

restaurants, hiring for discretionary spending.

So there's some consumers really kicking up their heels. And I would add onto that we've seen a lot of increases in low wage pay at the state and

local level.

Minimum wages have been increased at the state and local level. And almost all of the improvement in consumer sentiment in the month of October came

in low wage jobs. That's something very unusual for the course of this recovery.

And it suggests we're finally starting to broaden the sense that we're getting somewhere in the recovery. We're not there yet. I think we still

have a long way to go, and I am actually in agreement with Cherion (ph) that we should push the unemployment rate even lower.

But to finally see some movement in wages and also some of those low wage jobs get a bit of a boost at the state and local level from minimum wages

going up - that is making people feel a little better and able to spend.

QUEST: Excellent. Thank you. We will look forward to the December to your forecast and to the results. Thank you. Have a lovely weekend.

SWONK: You too.

QUEST: Seven years of deliberation and the end is a rejection for the controversial Keystone XL Pipeline. Supporters of the project are crying

foul. We will have that story from both sides after the break. "Quest Means Business." (RINGS BELL).

(COMMERCIAL BREAK)

[16:51:56] QUEST: It has been one of the most controversial environmental projects, and now the U.S. is saying there is no long-term economic

benefit.

And that's why President Obama says his reject - his administration is rejecting - the Keystone XL Pipeline. Unfortunately, the decision came

more than seven years after the controversial project was first proposed.

The presence of the pipeline would have little effect on gas prices and would undercut U.S. initiatives on climate change.

(BEGIN VIDEOCLIP)

BARACK OBAMA, U.S. PRESIDENT: America's now a leader when it comes to taking serious action to fight climate change.

And frankly, approving this project would have undercut that global leadership.

(END VIDEOCLIP)

QUEST: What did it actually do? Well the pipeline would have brought oil from Canada's Tar Sands to the Gulf of Mexico.

It's 1,200 miles, it's across six U.S. states. You're talking about 800,000 barrels a day. Environmentally Tar Sands oil is dirtier than oil

from other sources. The Republicans and the labor unions were strongly against the decision.

Canada's new Prime Minister Justin Trudeau said he was disappointed by the decision. Paula Newton is in the Canadian capital. She's in Ottawa for us

tonight.

Newly-elected Prime Minister Trudeau only just taken office this week and all of a sudden - I mean, why was he so much in favor other than economic

grounds of selling Canadian oil but couldn't convince the President otherwise?

PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: Well look, he's on the job two days - Justin Trudeau - but he was never going to go against this kind

of a project. You just don't do that in Canada, Richard.

This was very important to our oil projects out West. Having said that, he didn't speak out that much in favor of it either.

What is going on here now is that you have a government that's much more closely aligned with President Obama's goals on climate change. In fact we

just renamed the department here instead of the Environment, it's Environment and Climate Change.

Having said all that, what many people here who back this pipeline are hoping is that a better relationship here in Canada fostered in the United

States will actually eventually in years to come lead to some kind of pipeline from Canada into the United States.

Still a tough sell, but some people are hoping that, look, in the years to come, that might still happen.

QUEST: What was the principal objection? Because if you're going to - is it extraction of the oil in the first place or is it the pipeline and the

risks that go with it?

NEWTON: You know, this issue became so highly politicized, it was absolutely both. And you're talking about a star-studded opposition to

this from both sides of the coin.

And to be honest, Richard, the pipeline - although pipelines are, you know, in most cases a very safe way to transport oil, a lot of those accidents

that have been happening recently with those pipelines have not made things any easier.

[16:55:01] You know one thing that sends shivers through the spines here in Ottawa and also out West was when Obama labeled it right there - you just

did it right now in your script - dirty crude.

And many people believe that the Tar Sands - they're not called Tar Sands here, they're called Oil Sands - that if this project had been sold more on

its merits of national, international, U.S., Americans, Canadians, national energy, security that the deal would have been done.

I mean, let's face it, Richard, transporting oil is not a safe business and we had a very terrible rail accident here, the Lac-Megantic, where the

tankers exploded. That wasn't exactly safe either. Those trains originated -

QUEST: Right.

NEWTON: -- in the United States. Too much of a political hot potato, Richard. We discussed this many times on your show and this will continue

to be a political issue on the radar on both sides of the border.

QUEST: Paula Newton in Ottawa. Thank you. A "Profitable Moment" after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's "Profitable Moment. If the news we are reporting proves accurate, then the aviation industry has a very serious issue on its hands.

Airports that have been deemed to be safe and secure and now apparently a bomb was able to be installed onto a jetliner with the disastrous results

we have now seen.

The question is what do you do about it? How do you ensure that you keep aviation safe and secure but at the same time allow the industry simply to

get the planes in the air?

And that's "Quest Means Business" for tonight. And I'm Richard Quest in New York.

END