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Quest Means Business
ING to Split; Markets Down; 'World at Work' Goes to the Zoo
Aired October 26, 2009 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ADRIAN FINIGHAN, CNN INTERNATIONAL ANCHOR: Divided we stand, ING is ready to split itself in two.
A bumpy start to the week, stock markets stumble off the blocks.
And animal spirits, the office ruled by the law of the jungle, your "World at Work" at the zoo.
Hello, I'm Adrian Finighan, in for Richard Quest. This is QUEST MEANS BUSINESS.
Good evening. So ING is going back to basics with a seismic shake-up. It's being seen as an example of the pressure that banks will find themselves under when they reach for help from the state. Let's show exactly what is happening with the biggest Dutch financial services group, which is to break itself apart.
In a surprise announcement today, Netherlands-based ING has unveiled major restructuring plans. It is to split its banking and insurance arms. It aims to spin off the insurance business by 2013. And part of the restructuring deal -- it's all part, rather, of the restructuring deal with the E.U. while it investigates the legality of ING's state bailout last year.
Now ING plans to launch an $11.3 billion rights issue. Now investors are going to vote on that plan at a meeting on November 25th. Now the big question, of course, is, what on earth is all of this for? Well, it's to pay back the Dutch government, 50 percent of its state aid, ahead of schedule.
The bank plans to pay back close to $7.5 billion by December. And ING received a total of nearly $15 billion from the Dutch government back in October last year. Well, the plan too would reinvent ING is far more drastic than anyone expected. Another European bank which got state aid -- state support could also come under pressure to make sweeping changes too.
CNN's Jim Boulden joins me now live on this ING split.
It's not doing this, Jim -- let's get this straight. It's not doing this for pure commercial reasons or out of the goodness of its heart, it's because the E.C. is breathing down its neck.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Yes. And it's very clear that the new CEO came in and he said, things have got to change, we can't be what we used to be. One of the main reasons is European Commission is very concerned that some of these banks that got state aid are having an unfair advantage over some of the other banks.
And, OK, they're going to give the money back earlier than expected, but I think it's more drastic that they're going to split itself -- they're going to become a very European bank. They're going to get rid of its U.S. arm as well. This is part of the deal. So it's going to become a smaller, more friendly, if you will, more boring bank.
FINIGHAN: Hang on. Isn't this what the governor of the Bank of England was talking about only last week. I mean, the question is then, if ING is doing it, who else?
BOULDEN: Well, of course, that's exactly what shareholders are thinking today, will it be the Royal Bank of Scotland? Will it be Lloyds Group here in the U.K. ? You know, we -- Commerzbank has already said it's going to split itself basically in half. So that's one other bank that said it's going to do this.
So it seems that this is what some of the CEOs have decided is the easiest way -- if you want to call it easy, raise money, get this stuff off the books, give some money back, and become much more manageable and satisfy any future regulators -- regulations that might come down the road.
FINIGHAN: We're going to talk about banking stocks having fallen today. I guess that's the main reason why today then. But ironically, one of the big banks, Barclays, is doing exactly the opposite today.
BOULDEN: Well, whenever we say, what banks didn't get government money? We always say, well, Barclays is a very good example. It then, of course, bought Lehman Brothers in bankruptcy in the U.S. for an incredible deal.
Today it's buying a very small U.K. bank for about $369 million, and it's a little savings and mortgage, and so it's going to add about 10 percent to the mortgage book here in the U.K. But the important point is, Barclays is continuing to get bigger.
FINIGHAN: Right. And this time last week, of course, when we were talking about the governor of the Bank of England, hinting that he would like to see banks do what ING indeed has announced that it's going to do, we also talked about tighter regulatory frameworks that are being put into place, not just in Britain, but across Europe.
And an interesting meeting (ph), the FSA, the people who regulate banks here in the U.K. today announced some new rules.
BOULDEN: Yes, they did. And let's look at the -- a comment from the FSA. This is a very important note. They said, this is about reporting disclosures. They basically think that investors, when looking at the annual results, can't understand what they're talking about.
And one bank says one thing about its results, and another bank says another thing, and you can't compare them. They want to come up with a blue print that's very clear of how you say what your results are, how people read them, what are the disclosure rules, comparable data.
That's critical here. How would you compare Barclays with Lloyds, for instance? And so the banks that have gotten together, the big boys, HSBC, Barclays, Lloyds, Standard Chartered, have agreed in principle with the FSA to go with these rules.
FINIGHAN: All right. But as far as you're concerned, then ING may be the first, it's certainly not going to be the last.
BOULDEN: No. Not at all.
FINIGHAN: OK. Jim, many thanks, indeed. CNN's Jim Boulden reporting there.
Well, stock markets here in Europe got off to a pretty bleak start this week. News of those radical changes at ING helped drive many banks deep into the red this session. In London, Lloyds Banking Group tumbled by more than 7 percent.
In Frankfurt and Paris, Deutsche Bank and Credit Agricole both fell more than 4 percent today. ING itself was down more than 18 percent. In Amsterdam, airlines were also among the weakest performers today, British Airways fell nearly 5 percent, and Lufthansa ended the day more than 3.5 percent down.
Well, investors here in Europe were also gearing up for a big earnings week this week. I asked David Buik, from BGC Partners, what we can expect and how it might affect the mood on the markets.
(BEGIN VIDEOTAPE)
FINIGHAN: It's a big week this week. Just how important is it?
DAVID BUIK, BGC PARTNERS: It's the most important week of the quarter, without any question or any doubt, because it is the key companies within the framework of the FTSE 100 starting tomorrow, obviously, with BP and Reckitt Benckiser.
And then as we go through the week, we hear from the likes of British American Tobacco, we also hear from BG Group, we hear from Royal Dutch Shell, we hear from WPP, we hear from GlaxoSmithKline, and also AstraZeneca.
FINIGHAN: We've got Reckitt Benckiser making gains today, preempting those results. What should we be looking out here -- for here? Are we going to get a good set of results or a mixed bag?
BUIK: I think most of those companies that I've mentioned, you're going to get a very good set of results, because comparing this time last year when the world's economy had virtually fallen off the precipice, they're bound to be very good.
Also, in the case of the oil companies, we've got to remember now that anything over $65 a barrel, oil companies should be making absolute pay. BP is a huge recovery story, particularly in the United States where for so many years they were in rags. They've now recovered.
All of these oil companies are also looking for alternative forms of energy very aggressively, and I think from Tony Hayward tomorrow you're going to hear some very positive views on where they're actually going from.
And I think these are the important things that we're actually looking for. You've got to remember with the FTSE 100, there is very little correlation between that and the U.K. economy. The U.K. economy is incredibly weak.
FINIGHAN: I want to ask you about that, because we've got a well- respected business (INAUDIBLE) -- business confidence survey out today which shows that confidence is running at an 18-month high. I mean, how does that correlate, that sense of optimism, what is happening on the stock market too, with the fact that the economy is still in dire straits, as indicated by those terrible figures that we had last week showing that the recession is deeper and more prolonged than anyone first thought?
BUIK: Well, if you take yourself 18 months back, it was about the first time that we saw the real signs of anxiety from subprime lending. We hadn't heard, obviously, from Bear Stearns and Lehman Brothers, but the writing was on the wall. HSBC told us it was a horror story, they were the first to put their hands up with household (ph).
So clearly confidence at that time, just before that, was at a high. And it has literally cascaded downhill. So to say that it's at its 18- month high, I think we need to put it into perspective that it is from a very, very low base.
Let's not kick ourselves into touch (ph) one more time, but it needed to be better because as we had endorsed last week, we're far from out of the woods with that, GDP figure still recession minus 0.4 percent, when we hoped for just plus 0.2 percent.
FINIGHAN: And yet, British groups at the moment are cheap as far as foreigners are concerned. To what extent is the weak pound perhaps contributing to that feel-good factor that we're beginning to see now then?
BUIK: Adrian, it should be good, but we have to remember that this country, well, this government from the last 12 years, has backed the service sector right to the hilt, banking and insurance, ignored industrial production and manufacturing output to its cost.
So to say, gosh, the pound is weak, we should be able to export like (INAUDIBLE), my retort to that, export what? Because it isn't as strong as we would like to make it out to be. There are certain things that we are very good at, but industrial production, manufacturing output in terms of exporting goods is extremely limited, so we shouldn't hang our hat on that too much.
(END VIDEOTAPE)
FINIGHAN: David Buik putting in his penny-worth, always great value for money, David. And of course, it's not just the pound that's at lows at the moment, the dollar touching a 14-month low against the euro earlier today. We'll be talking about that a little later here on QUEST MEANS BUSINESS.
Right now though, let's get you up to date with what is making news around the world. Fionnuala Sweeney joins us live from the London newsroom.
FIONNUALA SWEENEY, CNN INTERNATIONAL ANCHOR: Adrian, a look at the top stories. Judges at The Hague say the war crimes trial of Radovan Karadzic will go forward Tuesday with or without the former Bosnian Serb leader. Karadzic was a no-show Monday, and proceedings were adjourned after only 15 minutes. Karadzic faces 11 counts of genocide, war crimes, and crimes against humanity.
Helicopter crashes in Afghanistan claimed the lives of 14 U.S. service members, including three agents of the U.S. Drug Enforcement Administration. One accident followed a raid on suspected drug traffickers, 10 people died in that crash. The other four fatalities happened when two helicopters collided in midair.
The trial has begun of a man accused of murdering a pregnant Egyptian woman in a Germany courthouse. It's a case that has attracted attention throughout the Muslim world. Prosecutors say the Russian-born defendant stabbed Marwa al-Sherbini in front of her young son at a July hearing. She had sued him for (AUDIO GAP) and abuse.
The Saudi king has pardoned a female journalist who a judge had ordered to be flogged. Rozanna al-Yami had worked on a TV show exploring sexual taboos. Last week a court sentenced her to 60 lashes and banned her from traveling outside Saudi Arabia for two years. Several colleagues still face flogging sentences and prison time.
And those are the headlines, be sure to join me later for "WORLD ONE," we have a special "In Focus" report on life after serving in Afghanistan.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I've missed a lot. There are certain things like my daughters crawling for the first time. I wasn't here for that. Their first smiles, stuff like that, I miss all of that. I just want to make sure that I don't miss another thing again.
(END VIDEO CLIP)
SWEENEY: Home from war, we'll have more on "WORLD ONE" at 8:30 p.m. London time. In the meantime, back to you, Adrian, in the studio.
FINIGHAN: Fionnuala, many thanks.
Now just less than a year ago, the American dollar was on a high and going strong. But ever since then, it has been on a downward drift and things don't seem to be getting much better for the world's reserve currency. See what exactly is behind the dollar's decline next on QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
FINIGHAN: So the U.S. dollar is picking itself up off a fresh floor that it hit earlier this session. A few hours ago, the greenback touched a 14-month low against the euro. Now China holds massive reserves of the dollar, it is still seen as the world's reserve currency. But a central bank researcher has been quoted in the Chinese press as saying that he thinks Beijing should think about hedging its currency bets and up its holdings of the euro and the yen.
Plus, there is speculation that the U.S. may lag behind other major economies when it comes to raising interest rates. And that's all driving the greenback lower. Let's get the latest now on what is moving the markets in the U.S., stock markets in particular. Susan Lisovicz joins us live from New York.
And, Susan, surviving on about, what, three hours' sleep was it? We had an NFL game here in London, Tampa Bay and the New England Patriots, but that wasn't your game, the one that made you so sleepy.
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: No, because I'm reporting to you, Adrian, from New York. And the game of the evening was the New York Yankees clinching the series championship with -- against the Anaheim Angels. So now going to the World Series against the Philadelphia Phillies, which a lot of folks here are calling a "Turnpike Series" because it's basically two local teams. So it should be of interest mainly to people in about two states.
But it was a great game. And you know, the market seems a little fatigued as well. You know, we started off with a rally, Adrian, but really couldn't hold it. So it's basically extending the losses that we saw on Friday.
Why is that? Not a whole lot of news today, but we are seeing lower commodities prices. So oil settling down about 2 bucks. What you see there is energy stocks, for instance, like ExxonMobil and Chevron falling in the commodities sector.
Also, something that is of note, an individual stock, shares of ING that trade in New York, tumbling right now, 19 percent. The Dutch financial services company says it will spin off its insurance business and sell more than $11 billion in stock to pay back some of the government bailout money it took last year. So that's a big mover.
And unfortunately, we're seeing in this final hour of trading -- we're seeing moderate losses for the three major averages. The Dow is down 1 percent, triple-digit losses, certainly below 9,900. The Nasdaq is down about two-thirds a percent. The broader S&P 500 is down 1.25 percent.
Only one earnings report of note to tell you about. That is Verizon. It is a Dow 30 company. It did see its quarterly revenue rise 10 percent. But that was mainly due to its purchase of a wireless company. Its profit, meanwhile, topped Wall Street's estimates, despite dropping nearly 30 percent because of higher cost.
Verizon, like a lot of phone companies, continues to deal with the drop in its traditional phone business, because more and more customers are disconnecting landlines in favor of cell phones. In July the company said it would cut more than 8,000 employee and contractor jobs by the end of the year.
Verizon shares right now are down 1 percent. So not a big deal. But we are hearing from a lot -- many, many more companies later this week, about a third of the companies in the S&P 500 -- Adrian.
FINIGHAN: All right. Susan, many thanks, indeed. I'll tell you, I wish I could look as fresh as you do on three hours' sleep. I have a full eight, and I still look wrecked.
(LAUGHTER)
FINIGHAN: Thanks very much, indeed.
So 80 years ago this week, Wall Street experienced its worst crash in U.S. history when the Dow hit a new low in 1929, so did investor confidence. And then, of course, came the Great Depression. CNN's Richard Roth now examines the similarities between the great panic of the past and the financial turmoil of today.
(BEGIN VIDEOTAPE)
RICHARD WARSHAUER, WALL STREET AFICIONADO: This is where everything started and for centuries this is where everything happened.
RICHARD ROTH, CNN SENIOR CORRESPONDENT (voice-over): The crash. No, not last year's stock market plunge, but the great crash. It all went down 80 years ago this week.
WARSHAUER: 1929 was the greatest fall in the Dow Jones over a two-day period. In today's terms, it would be like a 2,200-point drop.
ROTH: Richard Warshauer and lifelong friend Jim Kaplan give tours every anniversary of the great crash.
JIM KAPLAN, WALL STREET AFICIONADO: This whole area was filled with people who had come down to see what was going on.
UNIDENTIFIED MALE: The tremendous crowds which you see gathered outside the stock exchange are due to the greatest crash in the history of the New York Stock Exchange and market prices.
ROTH: Quite a shock, especially because the Friday before, following a large drop, newspapers proclaimed the stock market crisis was over.
UNIDENTIFIED MALE: But in October, 1929, the Wall Street bubble burst.
ROTH: The historic collapse was just starting, eventually leading, many believe, to the Great Depression.
UNIDENTIFIED MALE: And then it actually loses 89 percent of that value in the stock market crash in 1929.
ROTH: At the Museum of Finance on Wall Street, a ticker-tape machine from the crash days, the end of a mania for stocks based on easy credit.
RICHARD SYLLA, ECONOMICS PROFESSOR: It's leverage. I mean, we learned in the latest financial crisis that firms and individuals can take on too much leverage. That's exactly what they did in the 1920s.
ROTH: A familiar replay to someone born during the crash years.
HILDA HEIN, MUSEUM VISITOR: It did have just the smell of the same thing happening again.
ROTH (on camera): And what are some of the more popular questions that the tours ask you about the crash?
WARSHAUER: They always ask the same question, where did the people jump out of the windows?
ROTH: Where did they?
WARSHAUER: Vastly exaggerated.
ROTH: Never happened? No suicides?
WARSHAUER: Oh, I'm sure there were one or two, but it became part of the popular lore.
ROTH (voice-over): The crash, experts say, another famous story is true: at the market's peak, tycoon Joseph Kennedy, patriarch of the Kennedy clan, hearing stock tips from a shoeshine man and selling stocks short, making a fortune.
(on camera): Do you give out stock tips to anyone like the famous shoeshine man of 1929?
LINWOOD HARRIS, SHOESHINE MAN (laughing): No, I don't. No, I don't.
ROTH (voice-over): But he did shine the shoes of Kennedy's grandson, John Kennedy Jr. Linwood says he is the last shoeshine man left on Wall Street.
(on camera): I really had a bad year in the market, so I can't pay you right now. But I'm -- no, I'm going to pay you.
HARRIS: (INAUDIBLE).
(LAUGHTER)
ROTH (voice-over): Richard Roth, CNN, New York.
(END VIDEOTAPE)
FINIGHAN: And Richard has that great voice for the black and white newsreel footage, doesn't he? That booming voice of his.
Now as Wall Street remembers a grim anniversary then, they are eyeing yet another scary prospect right now. No, it's not Halloween, it's new pay cuts for major financial players, cnnmoney.com's Poppy Harlow joins us now from New York with all of that -- Poppy
POPPY HARLOW, CNNMONEY.COM: Yes, Adrian, it seems like the announcement last week out of the president's pay czar, Kenneth Feinberg, was just the beginning of what we are likely to see a lot of on and off Wall Street for American corporations, and that is reining in corporate compensation. What we saw last week with the top 25 highest-paid employees at these seven companies, take a look here, that received that bailout money.
Whether you're talking about the automakers or Citigroup or Bank of America, they're getting their pay cut. The pay czar is now reviewing the top pay of the 75 next most highly paid employees at those firms that you see on your screen. The decision in terms of this is expected in December or early next year.
So what this is showing us is that it didn't stop at those top 25 employees at these firms. What we're likely going to see is at these bailed out companies, more and more reining in of executive compensation -- Adrian.
FINIGHAN: But what about companies that didn't get TARP money? Are we likely to see any changes to the compensation structure in companies like that?
That's a great question, what we have already seen is some companies taking it upon themselves, changing their compensation policies. Take Morgan Stanley, for example, also Goldman Sachs, both of these Wall Street firms have instituted clawbacks, essentially the right to take back money they paid to an employee if their actions may have resulted in a profit for the firm in the short term but two or three years down the road, as we saw in this financial crisis, resulted in a loss.
They can take that money back. So that's what we're seeing more and more of. Also more restricted stock compensation. You're likely to see more of that. Some critics, though, are saying the only way to really solve this problem is give the shareholders more say over the people that sit on these boards -- on these compensation committees of each of these publicly-traded companies.
Nell Minnow, she is the chair of The Corporate Library here in the U.S., she is an activist shareholder. She has been pushing for reforms and compensation for decades now. She met with Treasury Secretary Geithner in June. We talked to her this morning. Here is her take on the issue.
(BEGIN VIDEO CLIP)
NELL MINNOW, CHAIRMAN, THE CORPORATE LIBRARY: Right now the consumers of CEO pay, the shareholders, have almost no ability to send any kind of signal back. You can't replace the directors who do it wrong, you can't say no to these outrageous awards. It's unthinkable to me. It's unfathomable to me that directors who served on the bailout companies continue to serve, directors who have approved compensation awards that have created all kinds of perverse incentives continue to serve.
(END VIDEO CLIP)
HARLOW: All right. Well, Congress here in the United States, looking at a bill right now reviewing what they could allow, is letting shareholders vote on executive pay. The issue there, if it passes, it still would not be binding.
But giving shareholders more say over who sits on these boards and decides on executive compensation, it's not easy and you need deep pockets. You need a lot of money, because to do that, right now shareholders have to spend huge sums of money, sometimes up to millions of dollars, issuing those proxy statements to get the votes they need to do away with board members.
Other than that, the only thing you can do is really apply public pressure. That's what we saw in the case of Ken Lewis, as you'll remember, Adrian, being stripped of his chairman title of Bank of America, a narrow margin there, that he was voted out of that position with. But again, that was that public pressure coming into play. So it seems as though in the United States, at least, the executive compensation issue, it's really just beginning right here -- Adrian.
FINIGHAN: Absolutely. And as you say, it's no easy task though. Many thanks, indeed, Poppy. Poppy Harlow from cnnmoney.com.
Now, rejection after rejection. Looking for a job may often seem impossible at times. But for these guys, giving up isn't an option. We'll catch up with CNN's job-seekers in our latest installment of "JobQuest."
And monkey business, see how the job of one zookeeper is not only serious work, but has a global impact too. We'll be right back.
(COMMERCIAL BREAK)
FINIGHAN: Hello, again.
Now, as you know, here on QUEST MEANS BUSINESS, we often shine a light on some of the working world's unsung heroes. This week we drop in Tamara Harris Smith, who is a zookeeper at London Zoo, or ZSL, to give its proper name.
For much of the time, though, her work -- her "World at Work" is a South American rainforest enclosure.
(BEGIN VIDEOTAPE)
TAMARA HARRIS SMITH, KEEPER, LONDON ZOO: I would say most people would love to be zookeepers, and most people think it's a really glamorous job. It's hard work. And you need to love what you do.
Hello, sweetheart.
I find animals that generally are solitary in the wild, they tend to require a little bit more attention. They would be what I'd call high maintenance. Also, the solitary animals tend to kind of almost edge their way into your life more than what a group of the same kind of animals would do. But I can't honestly say I have favorites.
There's a good girl.
They are animals that need to be preserved in their natural way so that we can encourage breeding. And in particular with golden lion -- the lion tamarin, as well as the titi monkeys, they are part of a breeding program.
Right. Now these feeding coconuts are really cool because it's basically just a coconut which we've cut a hole in it and we've hollowed out the coconut, and that encourages them to perform natural foraging type behaviors.
The pond is a water source, also some of the birds like to -- the trumpeters in particular like to go in and sort of waddle around.
We identify our animals using microchips and sometimes facial colorations or body colorations and things like that. We don't really have names for them. And to be honest, in this building, 200 animals to remember names could become quite a problem.
Here we are.
I'm very fortunate that I work for an organization which is not just a zoo, we also have preservation programs where we are actually making a difference out in the wild.
They didn't ask to be here, but they are really important in terms of the worldwide conservation scheme. And that just drives me on a daily basis, the fact that I know that even the little bit that I'm doing here is potentially making a difference in the bigger picture. It's something that makes me passionate and gets me up in the morning.
(END VIDEOTAPE)
FINIGHAN: Fantastic. What a great lady. Tamara Harris Smith, zookeeper at London Zoo, (INAUDIBLE), just said to me in my ear, you've been upstaged by a sloth. I don't mind a bit.
Now here's something for job-seekers to smile about. At last, for the first time in a long time, new economic data out of the U.S. says that companies are doing more hiring than firing. We'll be right back on QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
FINIGHAN: Welcome back.
Live from London, this is QUEST MEANS BUSINESS from CNN.
In for Richard Quest, I'm Adrian Finighan.
Now, the Dow Jones not off to a -- a brilliant start for the -- for the week. Actually, today, it got off to a flying start. The Dow Jones led out of the gate, shot up and has eased back since on worries that U.S. lawmakers may be about to withdraw assistance for U.S. homebuyers -- a tax credit for homebuyers might be withdrawn. And, also, that Bank of America might be forced to sell shares to pay off its bailout. As you can see, the Dow Jones now down about 96 points as we speak.
There is today fresh hope for anyone struggling with unemployment, though. The National Association for Business Economics says that U.S. companies plan to invest and hire more staff in the future. The percentage of firms adding jobs doubled from an all time low of 6 percent to 12 percent in October. Twenty-four percent of those surveyed said that they expect unemployment to rise over the next six months, while 56 percent expect no change in employment.
Well, I'm sure that news is going to be welcomed by our Job Questers, especially Rodrigo Medina in Barcelona, who's got some disappointing news this week. He's been looking for a sales position for the past year. And, of course, Les Young in Atlanta has been busy working the phones. He's been trying to start his own business while still looking for something in insurance sales.
It's week six in our new installment of Job Quest.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Last week on Job Quest...
UNIDENTIFIED MALE: (INAUDIBLE).
UNIDENTIFIED MALE: The local hangout.
RAJI: It's a good place to pick up the pulse of the city. You get a lot of word of mouth, someone would know someone who (INAUDIBLE).
RODRIGO MEDINA: It's a good way to make networking here in Barcelona, because usually the -- the guys who are playing tennis are the ones that might be able to get me to find a job. So I'm trying to play a ways here and make some money.
(SPEAKING IN SPANISH)
(ON SCREEN)
Rodrigo is going to the unemployment office to apply for an extension to his benefits.
(SPEAKING IN SPANISH)
(ON SCREEN)
He found out he's not eligible.
LES YOUNG, ATLANTA: Now this -- this particular job came from Career Builders. I saw the -- the ad. They were looking for an insurance agent. And it appears that they were paying a salary. So this particular job I'm going to go ahead and apply online for and they will get the results of the profile that I put out there.
Karen is a good person to talk to. She'll tell me exactly what I need to apply and who to call.
Yes, Karen Finley (ph), please.
Karen, this is Les.
How are you today?
Good. Good. Because I know we spoke just a little while ago, but I'm still in the job search. I'm over here. Now tell me, where do you know of anything that might fit my, you know, my credentials or some of the things that we've talked about?
I am working on that -- I'm doing some online courses to get that -- to get that degree.
Well, I do appreciate it, Karen. I really -- I really appreciate your help.
And I'll call Dwayne (ph) and see if there's any job opportunities that he knows of. Mr. Smith, not in. (INAUDIBLE).
UNIDENTIFIED MALE: Do you ever feel like just throwing the towel in?
YOUNG: No. You can't throw the towel in. You cannot throw the towel in. That's impossible. You cannot do that. You are nuts...
UNIDENTIFIED MALE: What keeps you driving?
YOUNG: The thing that keeps me driving is that there is a light at the end of the tunnel. Everybody's going through something and my situation is not different. And I will overcome.
I've got you.
MEDINA: Today is Monday and I have an interview with a pharmaceutical company here in Barcelona. It's a sales position so hopefully it will be good and hopefully they open a door for me. So we'll see. I'll let you know when I'm done.
The interview went well. It was very fluent, very cordial. And it was a very interesting project, too. It was an area manager for a pharmaceutical company here in Barcelona.
And my personal impression was they were looking for someone with more experience in the pharmaceutical sector, which I don't have. So we'll see. He told me that if they're interested, they'll call me in a couple of weeks. So I'll just keep waiting and then work on other processes, because I really need to.
Yes, this week I have a rather interesting project for a sales manager position. And I think on that one, I've got a pretty good chance, because I have experience on the field for four years.
(INAUDIBLE) I'm trying to work through networking -- giving people calls, meeting people and meeting people through people. So that's one of the ways I'm trying to find a job. So this week should be interesting. So we'll see what happens. It's only Monday, so I have four days to work on that.
(END VIDEO TAPE)
FINIGHAN: That's Rodrigo in Barcelona.
You've got to admire both men, especially Les, for his positive mental attitude. But it's -- it's tough.
We'll continue to -- to keep up with both Rodrigo's and Les' job quest right here on QUEST MEANS BUSINESS.
Now, looking back in order to look forward, 80 years on from the Wall Street crash, we're asking what lessons we can learn from the biggest financial crisis in history and how it might aid our recovery.
(COMMERCIAL BREAK)
FINIGHAN: Now, past and present collide this week in the U.S. It is the anniversary of the Wall Street crash, as Richard Roth was telling us earlier and the week in which U.S. GDP data will reveal whether America is out of the greatest economic crisis since then.
So, in this week's Biz Clinic, we're finding out what we can learn from the Great Depression.
CNN's Eunice Yoon sat down with historian Niall Ferguson.
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EUNICE YOON, CNN CORRESPONDENT: Is there anything unique at this recession versus past economic crisis?
NIALL FERGUSON, FINANCIAL HISTORIAN: I think this isn't a recession, is the first point to make. It's a neo-depression. In fact, I am calling it a slight depression to distinguish is from the Great Depression of 1929- 33. And the unique thing is that we nearly repeated history. In other words, we nearly repeated the Great Depression, but we avoided it with massive monetary and fiscal stimulus.
So we are in new territory.
YOON: Based on your study of financial crises, when does government intervention work and when does it not work?
FERGUSON: We're talking very specifically here about two policies. One is the use of central bank money creating power to avoid a liquidity crisis that crunches the entire banking system. But the other kind of government intervention, which is slightly more problematic, is the sort in which the government runs a large deficit in order to stimulate the economy by building roads and building bridges in order to get people back to work in the hope that in doing that, it will generate a recovery.
And, to some extent, this has been effective. But the problem is that in the United States, you're adding a stimulus on top of an already huge structural deficit in the public finances. And the prospect of a trillion dollars of new borrowing every year for the decade ahead, that scares me. And I think it should scare everybody.
YOON: Can financial crises be prevented?
FERGUSON: The idea that you can regulate financial crises out of existence in a free market is a fantasy. The trouble is that financial markets are a reflection of human nature. And we as only human beings, are subject to euphoria and depression -- to mood swings. And what markets do is they magnify that human tendency to swing from greed to fear.
YOON: What advice would you give policymakers who are trying to reform the global financial system?
FERGUSON: Nobody dares risk another Lehman Brothers. So if any of the big five or six institutions gets into trouble, it's kind of automatic that they'll be bailed out. But that's not a state of affairs we can really live with. It's not healthy that there should be only up side for the bankers and only down side for the taxpayers.
So I think we need to phase out that guarantee to bondholders and make it very clear that if an institution is as large as a Citigroup or a Bank of America, it can't count on a government bailout.
The real problem here was excessive leverage. Institutions that had assets equivalent to 25 or 30 times their tangible equity were not stable institutions, because really quite a small decline in the value of their assets wiped out the equity.
So we need to be more Canadian. The Canadians were among the very few people whose banks were more strictly regulated. And that's the single one respect, that they were not allowed to become excessively leveraged. And that's -- that's actually a really sensible approach.
YOON: So would you suggest the Canadian model could be a blueprint?
FERGUSON: Canada is said to be rather a boring country and its banks especially boring. But I'm in favor of boring banks. I think a lot of the things that banks do should be boring. They should take deposits from us, they should make loans to us and they should not blow up the world economy.
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FINIGHAN: Niall Ferguson speaking there with CNN's Eunice Yoon.
Right. Let's get some weather.
Guillermo is at the CNN World Weather Center.
And it is, of course and in the Northern Hemisphere, we have the season of mists and (INAUDIBLE) fruitfulness -- the leaves falling off the trees. A lot of us here, of course, at the weekend here in Europe, we -- daylight savings ended, so we're back to GMT here in London.
But -- but not everyone in the world did the same.
GUILLERMO ARDUINO, CNN METEOROLOGIST: No.
FINIGHAN: So I've just had -- people have been Tweeting me saying why is -- why is QUEST MEANS BUSINESS on an hour earlier today?
ARDUINO: Oh, right.
FINIGHAN: So that's the reason why. Yes.
ARDUINO: Because CNNI goes globally. So we can't...
FINIGHAN: Yes.
ARDUINO: ...(INAUDIBLE) at the same time. But next week, I think Sunday, 2:00 a.m. Our time, we go back one hour, too, and then we'll catch-up.
Now, some of the countries -- I'm from Argentina. And, you know, the country decided not to do it this year. They have enough power saved. They said, forget about it, we're not going to do it.
And you mentioned the weather, Adrian.
I have to ask you a question.
FINIGHAN: Yes?
ARDUINO: Did you get a little bit of a sampling of winter these days?
FINIGHAN: No, actually. What we did, we had a -- I thought we were - - we were heading toward winter. It got cold and windy and wet. And -- and now we're enjoying rather mild, gorgeous late summer weather again.
ARDUINO: I may have some nice news, because I think that it's going to warm up even more here. And the reason -- we have a jet stream and this yet it's going to move northwards, so it would -- will allow the warm air mass to stay in here, including London. So we're going to see temperatures close to 20 during the day and the high -- the low is going to be like 10 degrees. I mean it's crazy, but it is.
Now, on the other side, people here in Scandinavia, in Poland, in the Baltics, in Ukraine, in Russia, are not seeing that change. On the contrary, it's going to be below normal. So this is what's going to happen. Of course, it's not going to be picture perfect, because we see winds and the rain in Ireland. But we are going to see below double digits for London and also the high double digits. So close to 20 degrees, which is great.
Thursday maybe some sunshine over there and then the system will come and go. But it seems that we are in good shape, at least here. France, or to look at Paris, 16 for tomorrow; Madrid, 25, wonderful; and then Berlin 12.
We have some rain right now and also we have alerts here into the Rijeka region and Split in Croatia. We'll see rains in Spain. We'll see, also, some windy conditions in Acalunia (ph), Ponte Vedra (ph) and Wiego (ph). Dublin, as I said, with winds; maybe some delays over there. London with clouds; Berlin with clouds. But it's not that bad, gutsy. It is not that bad.
Copenhagen with rain. And we have rain, as we speak. Helsinki has rain. Buterschloe (ph) in Germany; Hamburg; Braunschweig and Munnerstadt with rain.
Now, where the weather is worse is in Greece and I was mentioning here, Croatia. But we are going to see in Festalia (ph), in Epilus (ph), all the way down into Crete here, alerts, because of rain and thunder and also affecting parts of Southern Turkey.
So in Antallia (ph), for instance, we're going to see bad weather. In both Chancali (ph) here in the north, the Aegean Sea and the Mediterranean Sea, some clouds moving on into Cyprus, as well.
And before I go -- and this is very important -- the Philippines is now enjoying a little bit of a break. But I have some bad news. We have time, maybe the forecast will change, but there is a newly formed tropical storm that is moving that way. It's very near Saipan and Guam. And in five days, toward Saturday, it all appears to indicate that we will see landfall as a typhoon in the -- in the altitude, in the vicinity of Manila. Of course, it's on the other side.
But I want you to know that we're looking at this story very closely because of what happened lately. We have some time with this (INAUDIBLE) to get ready. This may change, but we need to be responsible and to follow this closely, should it confirms that it's going that way.
So I'll let you know later.
Now, stay with CNN.
Of course, after the break, Adrian will come back with more news.
I'm done from Atlanta.
See you later.
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FINIGHAN: Welcome back.
I was just going to hear about what Guillermo was saying about the clocks not changing this year in Argentina. Well, it makes a lot of sense, actually. And I wish we could do it, too, here in -- in Europe, because it certainly, to me, feels a lot later than it is.
Anyway, "This Is It" and it is out, Michael Jackson's double disc album of hits -- his biggest hits -- has been released four months after his death. It kicks off a week of celebrations honoring the king of pop.
CNN's Morgan Neill asked his fans here in London what they think about the postu -- posthumous come back.
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MORGAN NEILL, CNN INTERNATIONAL CORRESPONDENT (voice-over): Taking a quick peek into this London music store, it was easy to think, is this it?
The launch of Michael Jackson's new album here decidedly low key.
UNIDENTIFIED FEMALE: I didn't actually know it was coming out until I saw that -- the advert (INAUDIBLE). Yes, I didn't really came to get it, but I'll probably end up spending a lot more money than I was supposed to.
NEILL: She wound up buying two copies and a t-shirt. Others were just as surprised and just as delighted.
UNIDENTIFIED MALE: (INAUDIBLE) number one (INAUDIBLE). He was amazing. But this is just all the classics you owned. I mean, "Man in the Mirror."
NEILL: In this store, you can also find calendars and t-shirts, some clearly made for Jackson's sold out London shows canceled after his death. But there was no repeat of the emotional scenes that followed.
(on camera): In the days just after his death, fans flooded stores like this one looking for anything from Michael Jackson. By way of contrast, this new album's release has been relatively understated, the retailer saying they're expecting big sales.
(voice-over): Later in the week, an exhibition of the star's memorabilia in London and the worldwide release of the documentary about his last months, also called, "This Is It".
UNIDENTIFIED MALE: I think this time around we're not going to see quite the same intense response, but we will see people buying it regularly over a period of time, particularly once the exhibition kicks off, which is happening this week. The film comes out, as well, of course. So that's going to generate a huge amount of awareness.
NEILL: Stores like this one are hoping to turn that awareness into big Christmas profits.
Morgan Neill, CNN, London.
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FINIGHAN: Fantastic stuff.
But don't forget, you can follow Richard Quest and the QUEST MEANS BUSINESS team on our own Facebook page here at -- at CNN. Just search for QUEST MEANS BUSINESS. There it is right now on the screen. Galen Church (ph) is under the weather. She's been writing on there today.
Have you been -- written anything today Galen (ph) (INAUDIBLE) on Facebook?
No. Not -- not yet, she says, but she will. And, of course, you can get Richard on Twitter at rquest -- at rquestcnn. What is Twitter at -- oh, you'll find it if you want to find it, I'm sure. I'm sure you will.
Stay with us on QUEST MEANS BUSINESS.
We'll be back with what's happening in the markets in just a few moments.
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FINIGHAN: Galen Chance says I'm in trouble for forgetting Richard's Twitter address. @richardquest is where you'll find him. And I'm afinighancnn.
Right. Before we go, let's show you what happened on the stock markets today.
Beginning the week on a decidedly down beat note here in Europe. London's FTSE, for instance, banks led the declines after news of major changes at ING over in the Netherlands. Lloyds down more than 7 percent, RBS down more than 5.5, Barclay's falling 2.5 percent despite announcing that its banks (INAUDIBLE).
British Airways was down 5 percent today on reports that it may have to give up takeoff and landing slots.
Frankfurt's DAX was also down Deutsche Bank down more than 4 percent today. Commerce Bank down 3.8 percent.
The Paris CAC, the same story for the banks there. Credit Agricol down close to 5 percent. BNP Paribas close to 4 percent.
And here's a look at what happened on Wall Street or what is happening on Wall Street -- not a good day there either. The Dow down 72.33 points.
That is it from QUEST MEANS BUSINESS.
Stay tuned for Christiane Amanpour right after the headlines next from the I Desk.
See you tomorrow.
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