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Quest Means Business

Olympic Countdown; South Atlantic Oil; Mourning McQueen

Aired February 12, 2010 - 14:00   ET

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

RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Too cold for green shoots, Europe's economic recovery starts to freeze over. Wall Street in the red as growth hopes recede. And a world at work for Valentine's Day. We meet the people who put the sweet into sweetheart.

I'm Richard Quest. This won't last the hour, because I mean business.

Good evening.

Germany, France, Spain, and Italy -- the big Eurozone economies will foot the bill if Greece has to be helped out of its debt crisis. But those countries may be in no position to offer much financial support. At least if the latest data tells us anything. In fact, giving handouts to neighbors -- the last thing they probably want to do right now.

Economic recovery in Europe has skidded to a halt. Germany, and France -- across the union growth has slowed quite dramatically. Come and look at these numbers, and see exactly the way in which things have moved. Germany, the largest economy in the region stood still in the fourth quarter. It's -- is exactly zero -- zero. It was a shot to many analysts who were forecasting another quarter of rising production from the anchor, the single most important economy in the industrial powerhouse.

Italy, down here, performed even worse. It slipped back into recession. It's economy shrank by .02 of a percent. Spain also in decline -- it's contracting economy by .1 driving the country deeper into recession, and at the same time of course, that terrible unemployment rate. And the Greek economy over here down .8 of one percent. Declining the best part of 1 percent in the fourth quarter.

If you look at the overall union, the Eurozone, it's a terrible blow to economies which desperately need to grow to overcome debts. And those faltering economies nearly drug the whole of Europe and the recovery off to the track. The Eurozone and the E.U. as a whole both saw expansion at north .1 percent. That's north .1 percent for the last three months.

Now compare that to the principal trading partners -- particularly the United States. In Q4 the E.U. -- lots of jargon here, so do forgive me. But Q4 E.U. .1 Q4 U.S. 1.4 percent. This is the situation in many cases, and in many ways that analysts, and economies -- economists have dreaded when it came to the European Union. The third quarter strong numbers faltering in the fourth quarter compared against other economies.

Traders were understandably discouraged by those numbers. The big three markets all ended the day in the red. Investors were also focusing on China. The government there told banks to hold more cash in reserve, and not lend so much of it out. Up -- 50 basis points. Worrying for anyone who does business in China.

Shares in Lloyd's Banking Group, British Airways amongst the hardest hit. Frankfurt Infineon came off worse after naming a new chairman in the teeth of opposition from shareholders. And in Paris it was the market and the automakers Renault and Peugeot which sank to the bottom of the -- the board.

On the foreign exchanges, the Euro continues to trade close to its nine month low against the U.S. dollar. It's now lost around 7 percent in the past two months. All as Greece comes back onto the market and its teetering pile of debt. After the latest numbers, the prospect of Greece growing its way out of trouble seems very remote indeed.

Gillian Tett is the capital markets editor of London's "Financial Times." Gillian now compares what we're seeing in Europe on the question of sovereign debt to the early days back in 2007 -- 2008 of the sub-prime mortgage crisis. And she told me, governments are simply providing sticking plaster solutions without tackling the fundamental disease.

(BEGIN VIDEOTAPE)

GILLIAN TETT, CAPITAL MARKETS EDITOR, "FINANCIAL TIMES": The core issue is that you have country that grew for -- like (ph) Greece which have issued far too much debt far too cheaply for too long, because they were tied into the Eurozone, and able to issue debt cheaply. Yet they've had falling productivity. Their economies have essentially become weaker in many ways. And you have a currency union, which does not have either the fiscal union, or the political mechanisms in place to ensure that that currency union works in times of stress.

QUEST: Does it get worse before it gets better?

TETT: I think it probably is going to get worse before it gets better, because what the governments have done so far is probably not going to be enough to convince the markets that they really have the will to act decisively. Now maybe -- just maybe we'll see some more crises happening. Many crises that actually prod meaningful action.

But the danger is -- right now with the sovereign debt crisis -- is that it will end up being too little too late. That there'll be endless procrastination, and denial, and it will take a really full grown crisis to actually prod the governments in Europe to act properly.

QUEST: Or let me suggest one other scenario -- that it just muddles on through. Economic growth returns. Things don't look so bad. The deficits come down through natural evolution of -- of growth, and the whole thing is swept under the carpet. Is that just realistic or me being fanciful?

TETT: Well that is certainly what an awful lot of European leaders are hoping, if not praying for right now. And maybe they will get lucky. But right now if you look at the wider global economic climate, these (ph) is not a conditions which are conducive to stability. I mean you've seen China delivering little jolts to markets today. And that could have plenty more potential to produce some surprises.

So the chance of us having a long period of calm, quiet, steady growth, which will allow these problems to be swept under -- under the carpet. I would argue those chances are not very high.

QUEST: And if it's not Greece today, or Portugal tomorrow, or Spain next week, eventually it becomes the U.K. with its high budget deficit, and poor plan vote (ph) for cutting down. Eventually, I mean at its most extreme it becomes the U.S. with its high budget deficit.

TETT: Well what unites all of these situations, and what unites a sovereign debt problem with say the mortgage crisis two years ago, is that when the goings were good during the credit bubble, there was too much leverage acquired too cheaply. In the last couple of years it's been really governments that have been leveraging up while the private sector has been deleveraging a bit, but not that much.

But the fact is that too much leverage cannot go on forever. At some point there's going to have to be resolution. For my money though, one of the really interesting things to watch in the next few weeks will be the degree to which Europe starts having a backlash against speculators, against hedge funds, against markets like the sovereign CDS sector. Because right now you have a lot of people out there in the markets that are placing bets using say sovereign credit derivatives. And some of those markets are pretty immature -- pretty thin. And there is certainly a chance you're going to see more of a clamp down -- more of a backlash against those kind of areas of activity going forward.

QUEST: In your paper this morning one of your columnists was writing exactly on this point, but suggesting from the opposite point of view that this crisis is not a real crisis of sovereign governments, but actually a crisis of market bankers, brokers, and hedge funds attacking.

TETT: Well there certainly is a pretty popular view going around in Europe right now, among -- from the European leaders, which says that what we're seeing right now is a speculative attack -- a concerted attack. You had Spanish ministers recently talking about a deliberate organized attack on the Euro. And people are likening (ph) this to say George Soros' attack on Sterling a couple of decades ago.

That may be the case, but the reality is there wouldn't be anything to attack if there wasn't the problem...

QUEST: Yes.

TETT: ... in the first place.

(END VIDEOTAPE)

QUEST: Gillian Tett of the Financial Times joining me earlier.

On Wall Street there were numerous and interesting -- FORE down 78 points just 10.657 (ph). The reasons were European economic growth, which of course means markets for U.S. exports will be limited. China's decision to raise liquidity requirements for banks. That is a de facto tightening of the Chinese economy as it limits bank -- at it limit bank loans. Of course if China is slowing down, then that just has ripple effects around the world.

All of which aimed at preventing an over -- an overheating Chinese economy. The market at the end of the week deeply seemingly unhappy.

You're up to date with how the financial world looks. How does the real world look? The news headlines from Max Foster.

(NEWSBREAK)

QUEST: We thank you Max Foster at the CNN News Desk.

The opening ceremonies of the Winter Olympics will take place in just a few hours from now in York, Vancouver in Canada. Their host city has been having unseasonably warm weather. Now if you're a little short of snow, then you just simply ship the stuff in. Tons of it will be arriving from elsewhere in Canada by truck, and even by helicopter.

CNN's World Sport Team is there to bring us all the updates as the 21st Winter Olympic Games unfold; Mark McKay joins us.

Now, Mark, I mean you -- we're obviously going to see the opening ceremony, but a simple question. Does it make any difference if it's natural snow, manmade snow, or snow that had to be brought in?

MARK MCKAY, CNN SPORTS CORRESPONDENT: No it doesn't. As long as the venues are set, Richard. Olympic -- both the International Olympic Committee and Vancouver organizers say they're not really concerned about the pictures that we've seen. These huge dump trucks going from the city into the mountains with snow all week long.

Now weather is a concern. We're not worried about it here in Vancouver proper. This is the winter in the Pacific Northwest, Richard. Cloudy, cool, rainy -- but as you get up to the higher altitudes, Cypress Mountain, just outside of downtown Vancouver is hosting snowboarding and freestyle skiing. That is where they've had to ship the snow into.

Whistler Mountain, which of course is hosting the Alpine events, not without weather worries. Heavy fog, and overnight rain has forced downhill training to be canceled on the men. Then they pushed the women back. So yes there are weather worries. But officials here, Richard, don't seem too concerned.

QUEST: Now is there any risk that -- I mean, I'm not a huge aficionado of -- of the Winter Olympics. So I don't know the full range of sports. But is there any sport that might not take place, or any sport which simply might not be very good as a result of it?

MCKAY: Well snowboarding might not be very good, because the halfpipe could have a bit of, let's say, warming. And there could be more water than ice on there. But that's a very good question. Officials here are concerned about the Alpine events. If you have fog shrouding a mountain, the skiers can't come down, and they can't see where they're going.

The World Cup circuit came here in the '90s. The World Cup circuit is all over Europe. It's -- used to come to British Colombia. They bypassed it because of constant concerns in the past over fog, and rain in the Alpine mountains. So yes they are worried per se about the Alpine events - - the downhill and such, because if the skiers can't see where they're going, that is a problem -- Richard.

QUEST: Vancouver is one of my favorite cities in the world. I -- I don't know if you've been there before. They're -- it -- it is just simply a magnificent place to visit winter or -- or summer. But -- so I should imagine, Mark, that whatever the -- the Olympics -- whatever records may not be broken this time around, you're in for a good time. And I'm jealous.

MCKAY: Well I can tell you what, Richard. The Vancouverites got up before dawn this morning to watch the Olympic torch relay as it makes its way to O.K. Place (ph). One -- one interesting note. They don't have to worry about the opening ceremony tonight, Richard. It will be held indoors for the very first time in the Winter Olympics -- indoors at O.K. Place (ph), a 60,000 seat arena.

So weather concerns not a worry over the next few hours as we count down to the opening ceremony here in O.K. Richard?

QUEST: We thank you, Mark McKay joining us from Vancouver. I shall try not to grit my teeth as I think of you enjoying the delights of that -- of the Pacific Northwest.

When we come back, QUEST MEANS BUSINESS in just a moment. Nearly three decades ago they fought a war in the South Atlantic. Now Argentina and Britain are at loggerheads again. It is about oil. It was perhaps always going to raise its issue when it comes to what the Brits call the Falklands, the Argentineans, and the lobbyists in a moment.

(COMMERCIAL BREAK)

QUEST: A dispute over oil in the South Atlantic is heating up Argentina, and the U.K. are at loggerheads over an old battleground. The Falkland Islands, which the Argentineans call the Malvinas. Argentina has detained the ship, which it says has been carrying supplies intended to help Britain drill for oil in waters around the islands. Argentina claims those islands as its own. And I say the area could turn out to have some of the world's biggest oil and gas deposits that could amount to billions in barrels of oil.

Oil companies have known for more than a decade there's evidence of oil in the sea bed around the islands. In the late 1990s, Shell, and a number of other companies did drill test wells there. Those were the days of crude oil fetching little more than a tenner a barrel. Well, if you move on a bit at that price dragging it up from remote fields in difficult circumstances -- economic disaster.

Now, though, at $73.00 a barrel, very different story. After 10 years of steadily improving technology at this price that oil suddenly becomes interesting. Some of the oil prospectors going to work in the area today think that this could be the new Kuwait.

Our Brian Burns with this dispatch.

(BEGIN VIDEOTAPE)

BRIAN BURNS, CNN INTERNATIONAL CORRESPONDENT (voice-over): For two centuries the British residents of the rugged Falkland Islands have lived off the sea and the land, fish, and sheep serving as sustenance. But now there's something even more valuable to be called from the surrounding waters -- oil.

British companies planned to begin drilling this month for oil reserves off the island's north coast. Estimates say upwards of 60 billion barrels of oil could sit below the sea bed, which could make the South Atlantic a hot bed for oil excavation this decade.

MANDUCHEHR TAKIN, CENTER FOR GLOBAL ENERGY STUDIES: Oil and gas companies are going around the world looking to find oil. And there are not many prizes left. Off shore Falkland Islands with a thick sedimentary basin over a very large area is one particular case that still is available.

Of course, there's a risk they might find nothing, or they might find a huge prize, which could be several hundred million barrels or a few billion barrels of oil. And that's why they are very keen to go.

BURNS: But Argentina is not happy about this development. Las Islas Malvinas, as they are known in Spanish, sit just 500 kilometers off the Argentine mainland, and Argentines believe them to be their own.

(on camera): The Falklands have been under British rule since 1833, but Argentina has always claimed sovereignty. The two countries went to war over the islands in 1982. This memorial is dedicated to the 649 Argentine soldiers who died; Britain lost more than 250 of its men. Now nearly three decades later, the sovereignty issue remains a volatile one for both sides.

(voice-over): Argentine leaders have called the British company's drilling plans illegitimate and illegal. Ruperto Godoy is a member of the Argentine Congress' Foreign Relations Committee.

"Those companies that are planning to explore and exploit gas and oil are going to be met with legal challenges, because they are doing it on a continental shelf that Argentina maintains is our own," he says.

The issue has soured diplomatic relations between London and Buenos Aires. Analysts in Argentina say President Christina Fernandez de Kirchner will continue to push the case at the U.N., and use it to drum up much needed political support at home.

FEDERICO THOMSEN, POLITICAL ANALYST: I doubt very much, very much that this will take any military aspect. But it will be easy to at least (INAUDIBLE) or allow civilian protest of the type of thing that Greenpeace sometimes does. Civilian vessels disturbing, floating around, and the government nodding at that.

BURNS: The oil rigs are on their way. Drilling will begin soon for the riches below and for the time being, both countries will continue to agree to disagree.

Brian Burns for CNN Buenos Aires.

(END VIDEOTAPE)

QUEST: The Falklands is just one of several new hot spots for off shore oil exploration. Take a look at this, and follow me if you like with the map. The Santos basin off the coast of Sao Paulo -- down here. The topiary is said to contain eight billion barrels of oil. The problem here is it's known as deep water. It's -- it's very, very deep stuff out there.

Major new finds deep in the Gulf of Mexico. Got two for two such as the further (ph) prospect that may hold three billion barrels of the coast of Greenland. Well there of course it's estimated there are tens of billions of barrels of oil and gas. However and faulty that (ph) is truly -- it's deep. It's difficult. And that becomes extremely expensive.

Going over towards Ghana, and you have estimates of 1.8 billion barrels. Now you -- you'd hardly be surprised that the Persian Gulf, 70 kilometers from Dubai. That of course is not as surprising. But in the Northern Kanavin (ph) basin off Australia's -- I'm getting out -- I'll be out of the picture at this rate. It's off Australia's northwest. Somewhere over here just -- it's off towards Perth, and in that region. There you have again potentially very large barrels -- eight billion barrel's worth of oil.

When we come back in just a moment -- after the death of the designer Alexander McQueen. His fashion empire is large. The question is what happens to it now its lost its principal creative force in a moment.

(COMMERCIAL BREAK)

QUEST: The Flagship, Alexander McQueen's store in Central London, was obviously closed today, one day after the designer was found dead at his home. A makeshift memorial has sprung up overnight where flowers were lain, a flag was flown at half mast. Those similar scenes outside his New York store -- fans honoring the man who was once

(AUDIO GAP)

(JOINED IN PROGRESS)

MONITA RAJPAL, CNN INTERNATIONAL CORRESPONDENT (voice-over): ... Queen brand from the designer in 2000. Reports indicated he was paid more than $20 million for the acquisition. For years the business operated on a loss. It was only the year ending February 2008 that it turned a profit. And for a publicly held company where millions of dollars were at stake, the concerns are there.

TIM GADOFFRE, LUXURY BRAND ANALYST: Clearly there's -- there needs to be an executive decision quickly regarding a response to shareholders about what's going to be done to fill the void left behind Alexander McQueen.

RAJPAL: But a brand without its namesake, and creative head isn't without precedent. The key is finding the right designer to carry on the creative torch. Gianni Versace's label went on after the designer's murder with his sister Donatella taking over.

Chanel with Karl Lagerfeld, and Yves St. Laurent with Tom Ford at the helm. The difference with them compared with Alexander McQueen may be the timing.

GADOFFRE: If we take St. Laurent it's probably a very good example. There are some timeless, and unique elements about St. Laurent that have been able to -- to last beyond him. They were established and -- and then built, and -- and finely tuned. It's an art. Not a science. And I think that that is perhaps one of the things -- not the only thing, but one of the things that makes a difference between a brand that will come and go with the founder, and those that live on to becoming absolute mega brands in -- in the world of the luxury industry.

RAJPAL: In a statement to CNN, Gucci Group says that they are quote, "Not talking about business issues at this time. The tragedy of Thursday's events is still very profound. We will talk about the business at the appropriate time."

When that appropriate time is, only they can determine. However, brands are only as good as the strength of the creators ideas and a lasting image -- ideas that can stand the tests of time and consumer tastes. For McQueen himself, it came down to being bold and unique.

ALEXANDER MCQUEEN, DESIGNER: Fashions have to change and times change. And it's not always about commerce at McQueen, you know? Sometimes it's about the avant-garde or -- as a designer, you -- your aim is to push fashion forward.

RAJPAL: Without him though the question now is how.

Monita Rajpal, CNN, London.

(END VIDEOTAPE)

QUEST: In just a moment it's with the snow, now the Dow. Everything just coming tumbling down in New York. Time for a look at what the future holds for the U.S. economy. We'll hear from one man who predicted the global economic crisis. And he believes that unless we restructuring happens, there'll be another on its way in a moment.

(COMMERCIAL BREAK)

QUEST: Good evening. I'm Richard Quest, QUEST MEANS BUSINESS. This is CNN.

The markets that are open and in doing business -- they're in New York, and this is how the Dow Jones Industrial Average is trading at the moment. It is down 33 points at the moment. It is worries about slow economic growth in Europe where of course exports would not be -- well, imports and exports. Relationships between the two continents will cause huge problems and slow growth for the U.S.

Stocks are being pressured after Japan -- China's bid to limit loans. China told banks to raise reserves for the second time in a month. It's all part of an effort to slow lending, and avoid economies from overheating.

When we talk about the economy, we need to talk to Richard Duncan, the author of a new book called "Corruption Capitalism."

Now, Mr. Duncan predicted the last dollar crisis. His book was "Dollar Crisis" in 2003.

Richard joins me now.

We start -- let's start with the immediate, if we may.

RICHARD DUNCAN, AUTHOR, "THE CORRUPTION OF CAPITALISM": Yes?

QUEST: People are saying -- and I heard the eminent economist, Robert Prechter say it the other day, I've heard others say it -- that we have still got another leg to go down on this particular crisis.

Where do you stand on that?

DUNCAN: At the moment, the global economy is being supported by government deficit spending. So in the U.S., the budget deficit is 10 percent of GDP. Without that stimulus, the U.S. would certainly go back into a severe recession. So the U.S. Government and governments around the world are going to have to continue supporting their economies with fiscal deficit spending for years to come. We're on government life support.

QUEST: Do you see either another market fall or another market major sell-off in this particular crisis?

DUNCAN: Not a severe one, because I believe that the -- in particular, the U.S. Government does have the capacity to support the economy through very large budget deficits. As long as the government keeps spending there won't be a new severe dip or a dip in asset prices.

QUEST: Now, I'm assuming -- and it's -- and you know what they say about people who assume -- but that you don't object that once this crisis happened that they had to do what they've had to do. Otherwise, you would have gone over into the financial abyss.

DUNCAN: That's right. If they had not had a 10 percent budget deficit in the United States, the GDP would have contracted by not just 2 percent...

QUEST: Right.

DUNCAN: -- but by 15 percent.

QUEST: Right. Right. So -- so you're not questioning what was done to -- to get us out of the mess?

DUNCAN: No. Once the crisis happened, they have to spend the money or have a depression.

QUEST: When we look at what needs to be done next to prevent the next crisis, you believe there needs to be a major restructuring of the U.S. economy?

DUNCAN: That's right. This crisis is not a cyclical crisis and this crisis is not over. This is a structural economic crisis, because the U.S. economy simply doesn't work as it's currently structured. It makes very little that the rest of the world can't buy somewhere else much more cheaply, because wages -- manufacturing wages in the U.S. are 40 times higher than they are in China.

QUEST: Now, as Laura Tyson once famously wrote, the only time people will buy American shoes is when they're prepared to pay more for amer -- to buy shoes. So you're not clearly suggesting that Americans go back to the old form of economy?

DUNCAN: No, that's right. What I'm suggesting is instead of wasting this government stimulus building bridges to nowhere, the way that Japan has done, instead, the government should spend the money wisely, restructuring the economy and investing in future technologies -- solar, genetic engineering, nanotechnology -- so the country can produce things that other countries really want to buy and can't buy anywhere else at any price.

QUEST: The two are not mutually exclusive, though. The immediate stimulus wouldn't necessarily have benefited by that particular plan. You're talking about something more long-term.

DUNCAN: That's right. Over the next 10 years, the debt is going to increase by $10 trillion. If they spend $3 trillion more over this period, they could restructure the economy and solve this crisis at its core.

QUEST: So why won't they?

One assumes that they're bright men and women like you are.

So why won't they?

DUNCAN: Well, I think they would prefer to think that this crisis is going to be resolved in the short-term. But instead, they should look to Japan and learn from Japan's experience. When a jay -- a giant bubble pops, the government has to support the economy with deficit spending for far longer than anyone would like.

QUEST: You see, is there not a danger that this crisis does abate and we get back to something approaching trend growth and that, as you write and say -- I mean the need to restructure gets lost in the noise?

DUNCAN: I don't think we're going back to trend growth. We are dependent on government deficit spending to keep the economy afloat.

QUEST: But that won't last forever.

DUNCAN: The private sector is crippled. The U.S. Economy was being driven by the increase in household sector debt, which was growing at $1 trillion a year. Now that households are broke, they have no collateral to borrow against, they can borrow nothing now. And that's why the has to step in and borrow and spend.

QUEST: It's a very pessimistic outlook that you've got.

DUNCAN: It's a very realistic outlook and everyone needs to look at it realistically so we can find the correct solution to resolve the crisis prominently.

QUEST: Richard, many thanks, indeed.

DUNCAN: Thank you.

QUEST: Many thanks, indeed.

When we come back in just a moment -- and hang on a second.

Well, they're fairly simple little things, but um. The ingredients of a perfect Valentine's Day go as follows -- eggs, sugar, butter, a dash of velvet and a great deal of calories. They go into making these scrumptious and romantic treats. We'll reveal the secret. We have a World At Work in a moment.

(COMMERCIAL BREAK)

QUEST: Even for an old misery guts (ph) like me, Valentine's Day is very nearly here. Time for a spot of sweetness on QUEST MEANS BUSINESS.

We're not all profit and loss, misery and mayhem. These little delicious treats came to me from the London Hummingbird Bakery. Somebody knows the way to my heart.

Well, we decided if you make something delicious like this, clearly you obviously have a passion for your trade and a trick for how you make them. We needed to find out about the cupcake World At Work.

(BEGIN VIDEOTAPE)

PAULINA BYRNE, HEAD BAKER, HUMMINGBIRD BAKERY: Cupcakes, to me, are special because of their individual sizes. Every single one is unique in its own way. You can take a tray and make every one look different -- flavor wise, design wise, colors. It's fun working with cupcakes.

As a business, it's keeping ahead of the competition, always doing what the others are doing so that you do the same or even better, keeping up with trends, fashions, seasons. Right now we're doing Valentine's cupcakes. We have been producing Valentine's cupcakes for over two weeks now.

I think one of the most pleasurable things is working in the shop, watching customers coming and just, you know, staring at the display and everything is so cute.

I am going to make the red velvet cupcake, which is our best seller cupcake. Ingredients, this is the butter, (INAUDIBLE) sugar, fresh eggs, plain flour, buttermilk, salt and the baking soda.

One should always remember that baking is a science. It's not about throwing ingredients, you know, together anyhow. Follow the recipe, follow the quantities using the freshest ingredients. And no matter how many times you've done it, every single day you have to be on top of your game.

A cupcake is very -- is a very personal thing. You can write on cupcakes, you know, names and dates and addresses and this and that and, you know, a little nice box. It just -- it just shows how much thought you put into, you know, creating a gift for somebody rather than just buying a large cake they can get anywhere.

These are the red velvet cupcakes we need to make. Put them in the oven, bake them. This is the finished product of the red velvet sponge. But like I said, we -- they're not ready yet. You can decorate them, personalize them as you wish to make them unique to whatever occasions or for whomever it is. And just as a treat, I will personalize with you -- for you.

Red velvet cupcakes are frosted with cream cheese frosting, which is made up of icing, sugar, cream cheese and butter.

I did not originally come from a baking background, so I'm one of those cases where you change careers drastically. I've been doing this for about three years. I just love baking and never complained once, never will. It's just -- it's just fun for me.

(END VIDEO TAPE)

QUEST: And that's what you call a cupcake for a Friday.

We want to know how you earn and spend your money. You can send us pictures of your World At Work. You find us on Facebook at questmeansbusiness. You can find us by e-mail at quest@CNN.com and, of course, at Twitter @richardquest.

If you can't find us, well, we'll find you.

Now, one for me, none for you. One for me -- Eboni Deon is at the CNN World Weather Center.

You don't like cupcakes.

EBONI DEON, CNN METEOROLOGIST: I do. I love cupcakes, especially red velvets. I'm a little bit jealous, Richard.

But certainly not jealous of those weather conditions that we're finding across Europe because it has been very active and it's going to stay unsettled. We're talking about some wintry weather as well as the threat of severe storms.

We've been watching an area of low pressure that has been moving across the Mediterranean. It's going to continue to kick out toward eastern areas of Europe. And as it does, we're going to see some snow on the northern side of it. But for now, we're watching this area very closely across the Eastern Mediterranean on into the Adriatic Sea and into Western Turkey, because this is an area where thunderstorms could fire up through the overnight hours into the early part of Saturday. And that's what we're expecting to see, possibly a few tornadoes.

Also, large hail and very, very gusty winds, as well as some heavy rainfall. Those threats can't be ruled out. But, of course the snowfall is what we've been dealing with across many areas, including Rome, where we got a bit of a dusting of snow -- enough just to create a pretty picture out there and even around the Vatican City. Definitely a nice scene to behold. But it did make travel difficult and so we are not really expecting to see any more snow adding up.

But still some travel concerns. We'll have to watch out for that around Milan during the morning hours. Rome, it looks like mainly just the cloud cover will stick around for you. And into the evening hours, it will be gusty. But those flight delays don't like they're going to be a problem.

Berlin, though, throughout the day it could be a bit of a slow go. And all the airports in Germany looking a little bit problematic for your Saturday, as we are going to see snow around Frankfurt right through much of the afternoon.

In Munich, more of a mix. So those evening flights could be delayed. And in Vienna and Zurich, some hefty delays expected there.

As far as temperatures go, we're going to keep it pretty chilly all across Europe. We're definitely seeing below average in Paris, only getting up to the freezing point. Zero for you.

London getting up to four; Madrid eight; and nine degrees in Rome; Athens topping out around 14.

The winter weather, well, we've also been dealing with it here across the U.S. The Northeast finally quiet, but it's the Southeastern snowstorm that has been wreaking havoc across Texas, now moving out (INAUDIBLE) across much of the Southeast. And we are seeing a number of advisories posted. Of course, this was one for the record books, especially in Dallas, picking up 32 centimeters of snowfall. And now we're expecting to see more of that snow piling up here in Atlanta -- Richard, back to you.

QUEST: We thank you, Eboni, for that.

And now, finally, Connect the World I need to tell you about, has a fascinating interview that you'll not want to miss. The super model, Naomi Campbell, spoke to Becky Anderson. No topic was off limits.

(BEGIN VIDEO CLIP)

NAOMI CAMPBELL, MODEL: Nobody wants to look in the mirror and face their demons and say I want to fix this. Nobody does. It's a scary thing to do. And everybody has demons. And I had to look in the mirror and face mine. And until I did that, there was not going to be a change in my life. And I didn't want to be the way I was. And I'm a -- I mean I'm a work in progress. Every day is a new day. I take it a day at a time. And every day I learn something new.

But I know that I'm taking a step forward rather than backward.

(END VIDEO CLIP)

QUEST: Naomi Campbell talking about everything from life as a super model to her relief efforts in Haiti. Hear what she has to say, Connect the World, with Becky Anderson, 21:00, 22:00 in Europe.

And that just about does it for QUEST MEANS BUSINESS for this week.

I'm Richard Quest in London.

I thank you for your time and attention.

And whatever you're up to in the hours ahead, I hope it's profitable.

"MARKETPLACE MIDDLE EAST" is next.

END