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Quest Means Business
Protests in Brussels; Portuguese Prime Minister Resigns
Aired March 24, 2011 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Indeed, thank you, Hala.
Over the next hour we will report on the tussles in Brussels as the protesters have had their say, now it is the turn of the politicians.
In Portugal the prime minister has resigned. Borrowing costs are soaring. We'll discuss what that means.
And they are clearing up the snow drama over at Heathrow. The airport's operator pledges millions of dollars to make sure it never happens again.
I'm Richard Quest and this is QUEST MEANS BUSINESS.
Good evening.
Tonight in Brussels European Union leaders are working on a plan that they believe will haul Europe, once again, from the financial brink. The last 24 hours have proven that action is urgently needed. Portugal is facing a cash crisis, a political crisis and now a credibility crisis. Fitch has cut its credit rating from A minus to A minus (sic).
Portugal's prime minister, who tendered his resignation last night, is at the table in Brussels. He knows the bailout he fought so hard to avoid could be weeks, if not just days, away. CNN's Jim Boulden is in Brussels tonight.
The European leaders have got a lot on their agenda. So, obviously, Libya and all these other issues swirl into the mix. But, Jim, what are they going to do about Portugal?
JIM BOULDEN, CNN FINANCIAL CORRESPONDENT: Yes, Portugal certainly is the sticking point here, Richard. The leaders have only been meeting for a few hours and everyone is talking about Portugal. And everyone is now, many people here are saying there simply cannot be any major agreements because not only because of Portugal, but also because of problems in Germany, in Finland and in Ireland. I can tell you that so many politics back home in so many countries are causing issues here. Portugal, of course, one of the biggest ones.
Though it is unlikely that Portugal will be getting, or needing, or asking for a bailout at this meeting. It has even become less likely that the European leaders will be able to make major announcements on a full- time, permanent stability fund that will come into place after 2013.
Now, earlier today Jose Manuel Barroso, of the European Commission, talked about Portugal. And he, like many other leaders, is saying that Portugal must stick to its guns when it comes to austerity.
(BEGIN VIDEO CLIP)
JOSE MANUEL BARROSO, PRESIDENT, EUROPEAN COMMISSION: It is important for the confidence in the Portuguese economy that the consensus that I believe exists in Portugal, regarding the need to achieve fiscal consolidation, structural reforms, is clearly a reaffirmed. The targets that euro area summit has supported, regarding fiscal consolidation, structural reforms, are indeed in this indispensable for the confidence on the European economy.
(END VIDEO CLIP)
BOULDEN: So, Richard, it is unlikely for Portugal to have a new government before, what? May. There may not be a new government in Finland for several months. We just have a brand new government in Ireland. And Angela Merkel, in Germany, is having trouble with agreements to increase the stability fund. So, I have to tell you it is not looking like this meeting is going to have a major breakthrough. Even though they still are going to be meeting tonight and tomorrow morning.
QUEST: OK. But, Jim, we-time and again, Europe has been to the brink of this crisis, the Euro Zone, the EU. First with Greece and its inactivity, then with Ireland, pushing Ireland to bailout; how much more can this system take before they are prepared to say it is broken?
BOULDEN: Well, this is what is interesting, if you look at how the euro has been performing, it is actually doing quite well. It is a lot stronger against the dollar than it was during the Irish crisis, for instance. People tell me that there is enough money in the current temporary fund, if-if-if-Portugal were to ask for a bailout. So, that could be sorted if it were to be asked for by the next government. So, the money is there for that. The question is, does this help the credibility of the euro the European Commission, the European Union? Most people would say, absolutely not. But we would have to wait to see what the final statement comes up with.
QUEST: Jim Boulden, who is in Brussels tonight, watching events.
Jose Socrates, attended the EU summit as Portugal caretaker prime minister, having resigned last night. Parliament rejected the government's austerity plan. It leaves the country in political limbo. Our Madrid Bureau Chief Al Goodman has been watching and covering the events. He joins me now.
Look, the difficulty here is they can't go to the union asking for a bailout, even if they wanted to, without a credible austerity plan in place.
AL GOODMAN, CNN MADRID BUREAU CHIEF: And that is it. And there is the economic crisis that already existed with the specter of the bailout heavy over Portugal. And then, as of Wednesday night, with the resignation of the prime minister, and this caretaker government now in place, as you say, now you have a political crisis. So you are seeing both the Socialist Party, that is prime minister's party, Socrates' party, and the main opposition Social Democrats, the center-right Social Democrats, jockeying for position this day. Both giving out-
QUEST: Right.
GOODMAN: -very, very public statements saying they are going to work very hard to make sure that Portugal doesn't get a bailout. And they are going to make them work very hard to get an austerity plan. But they just had a plan that was voted down and there doesn't seem to be any movement towards a political agreement on that austerity plan. The problem, the Fitch downgrade, which you mentioned, the two notches down to A minus. Fitch is saying, look, how are they going to get a policy implemented if they don't have a government? And how are they going to raise the money they need. Because they have been raising money, but they have to pay back more money. They have $13 billion in debt repayments due by June. And although they were able to raise money-
QUEST: Al?
GOODMAN: It is a very high interest rate, 7 percent on a 10-year bond, Richard.
QUEST: Al, look, are they now-has feared gripped yet, or translated itself across to Spain? Do they fear they are next?
GOODMAN: Well, Moody's, just hours after the resignation of the prime minister in Portugal, next door, downgraded the ratings on 30 Spanish banks, but three of them basically on junk bond status. Left the three biggest banks, including Santander, alone; but it says that the Spanish banks are going to need to raise $70 billion to recapitalize. The Bank of Spain says it is a much lower figure, but look, the Spanish banks-and Spain is holding $98 billion in exposure to Portugal. About a third of all Portugal's exposure overseas, outside of Portugal, is right here in Spain.
So, they have been saying, analysts have been saying Spain has been doing its homework. It has been putting in some breathing room, but clearly there are renewed fears. Although the Madrid stock market, this day, closed slightly up. So that part of the fear is not showing up, right there, Richard.
QUEST: Al Goodman, who is in Madrid for us tonight.
Now, in just a moment or two, we'll be talking to Nick Firoozye, the head of European interest rates at Nomura.
You will be putting it into context for us, what we have been talking about.
But we actually look and see the situation in the markets. And how things did indeed end the day. So, if you will just like to join me over here. You can see Portugal's bonds, 10-year bond yields, were up some, were up some 0.5 of a percentage point, 7.7 percent for Portugal's yield. Now they say that 7 percent is the magic number. Once it gets to 7 and 8 percent it becomes unsustainable.
(COUGH) Excuse me.
And Portugal is pretty much at that position. However, the European stock market shrugged it off. Particularly the DAX in Germany, which saw the best gains of the session.
(COUGH) Excuse me.
Up some 2 percent. Paris was also higher.
Thirty banks were downgraded in Spain. Moody's said no blank check would be given to the Spanish banks at the moment.
Let's put this into some context. Nick Firoozye is with me, the head of European interest rate strategy at Nomura.
(COUGH) Do beg your pardon, Nick.
Now, is there an inevitability that Portugal does take a bailout? That is the core question that everybody is asking at the moment.
NICK FIROOZYE, HEAD OF EUROPEAN INTEREST STRATEGY, NOMURA INT'L.: We tend to think that it is more likely than not that Portugal will take a bailout It won't happen right away. Because Socrates has resisted and the opposition has resisted, as you have heard. And it is the fact is they don't need a bailout immediately. They are fine through their April redemptions. It is more likely what will happen is they'll wait up `til June.
QUEST: Right. But if they need it, why not just do it? Why, once again, is Europe going to the brink?
FIROOZYE: Europe has a history of going to the brink. Europe gets by, and that is what we are seeing today, in Portugal. And just, you know, there is drama in every step of the way.
QUEST: And even the meeting in Brussels, we have the stability facility. They haven't managed to put in place the permanent mechanism, although there is an agreement on that.
FIROOZYE: No, this is-today and tomorrow, in Brussels, we expect treaty change to take place. And treaty change only has to take place by agreement among the council members. That will put in place the stability mechanism.
QUEST: It's fiddling, though, isn't it? Mechanism facility, it is the same money, it is still designed-one's a permanent, one's a temporary?
FIROOZYE: Well, the facility was really just-it was a kludge. It was a way around the rules. Right now Germany is facing constitutional court challenges to the bailout packages. This is their way of dealing with it. It is a German challenge right now, they need the treaty change first, then they can start funding it.
QUEST: But the core question, that I think people need answering tonight, what will it take before this crisis is over? We look at other countries, the United States is getting their act together. We look at other places in the world that are getting their act together. Europe is not.
FIROOZYE: Europe is taking a considerable amount of time. There is no question. Europe is in for the long haul. Mostly because we don't want to face up to the losses the banks could be making. It is-we're going to have to throw good money after bad for some time before this works its way out.
QUEST: So is Europe's crisis, is it a liquidity crisis? Is it a capital adequacy crisis? Or is it now a crisis of real confidence?
FIROOZYE: Well, I'd say it is a combination of it. Because we look-I mean, look at, you know, for instance, Greece. Greece is clearly a solvency issue. Ireland, it is questionable; you know, Ireland could take haircuts at some point. Portugal, we would say it is a liquidity crisis, because Portugal comes from a much better base.
QUEST: When does it end?
FIROOZYE: We're in for the long haul, really. It takes a-I expect that all the packages will be in place by the-by June, as expected. And then we're expecting it will never go back to where it was before.
QUEST: Really?
FIROOZYE: It will never go back. That is part of Germany's plan, really. Is that spreads will stay relatively wide from now on.
QUEST: Hopefully you'll come back. We're can invite you back to come and join us again in the future to help us understand what is happening.
FIROOZYE: All right.
QUEST: Many thanks, indeed.
Now when we come back in a moment, the Goldman Sachs boss has had his say, now wiretaps could hold the key to the Galleon insider trading case. We'll be in New York after the break.
(COMMERCIAL BREAK)
QUEST: The largest U.S. insider trading trial in decades is in a critical phase. This week at the Galleon trial the Goldman Sachs Chief Lloyd Blankfein took the stand for the government in its case against the former hedge giant, Raj Rajaratnam. The government has now played audio tapes that they say proves guilt.
Maggie Lake is in New York.
Ah, Blankfein did, really, basically a day on the stand?
MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT: Yes, Richard, this is proving to be-we have a very good idea now, from watching the proceedings this week, exactly how the government is going to try to win this case. And remember, critical here, when you talking about understanding is getting a jury of ordinary men and women to get their head around the concept of insider trading.
They want to prove that Raj Rajaratnam had information, inside tips, that no one else had, that he traded on. They played some of the wiretaps. Have a listen to this.
(BEGIN VIDEO CLIP)
RAJ RAJARATNAM: I'm calling you because I'm meeting with Jerry Cohen (ph) on Thursday.
UNIDENTIFIED MALE: Yes?
RAJARATNAM: And there is a rumor that Goldman might look to buy the commercial back.
UNIDENTIFIED MALE: Uh-huh?
RAJARATNAM: You know? And you know this guy, Bob Steele, who was a fini (ph) guy at Goldman was undersecretary.
UNIDENTIFIED MALE: Yes.
RAJARATNAM: And went to Wachovia. And they have a large deposit base in all of that.
UNIDENTIFIED MALE: Yeah?
RAJARATNAM: Have you heard anything along that line?
UNIDENTIFIED MALE: Yes, this was a big discussion at the board meeting.
RAJARATNAM: Uh-huh?
UNIDENTIFIED MALE: On whether we-
RAJARATNAM: Buy a commercial bank?
UNIDENTIFIED MALE: Buy a commercial bank. And, you know, it was a divided discussion in the board.
RAJARATNAM: Uh-huh?
UNIDENTIFIED MALE: I think more people saying, why? Because in essence it is a lower return business.
(END VIDEO CLIP)
LAKE: Now, Gupta, the board of directors-the person on the Goldman board at the time when on to say they thought about buying an insurance company, AIG. He named Wachovia as a commercial bank. I mean, naming names, but critical here was not just the jury listening to that, but then they brought in Blankfein. Today it was a Morgan Stanley investment banker. They are making the link. That was inside information. Nobody knew about that. And that is what is critical. Because remember, the defense is claiming this was good old fashioned research that Rajaratnam was doing, end rumor, everything else everybody on Wall Street was doing.
The government being very methodical about trying to know that down, and Richard, they do not have a good track record when it comes to insider trading. Remember, this is a criminal case, they've got to convince those jurors, beyond a reasonable doubt.
QUEST: It is interesting, Maggie. Because I mean we can't-we can speculate to our hearts content, but obviously Raj Rajaratnam knew Wachovia, knew the background, knew what the various possibilities were. So the question will-it's going to turn on whether or-on this question of how valuable and of a certainty of the information became.
LAKE: That's right. And again, that is why they are establishing, I asked many questions about Goldman's board, who makes it up? The government understands that this is the Achilles' heel in the past. So they want to, again, every time drive home the fact that these were the conversations. Nobody else was having them. This was not public information. So they are being very methodical here. Again, it is going to be very critical, and this is not usual. They hear the wiretaps, but they are not resting on that. They are going the extra mile to try to seal the deal, but remember the defense is going to get their turn. And they are going to try to knock it down and make it-confuse the jurors. That is what this is all about. They do not want it to be a gray area.
QUEST: Right.
LAKE: When it comes to insider information, Richard.
(DESK BELL CHIMES)
QUEST: Yes, Maggie, let us not forget those magic four words, "beyond a reasonable doubt."
LAKE: And innocent until proven guilty, as well. We have to remind everyone of that. Listening to this tape is damning, but the trail is not over yet.
QUEST: Absolutely. By the halfway point, Maggie Lake, who is in New York, and we're going to talk more about this many times.
Now, whatever the outcome of that trial, the fraud investigators say they are loosing. American's SEC says it is short of funds, the cost of keeping Wall Street honest, in a moment.
(COMMERCIAL BREAK)
QUEST: Fraud on Wall Street is obviously a major concern for the U.S. government. Budget problems at the very group supposed to be looking out for malpractice, perhaps making that more difficult. Poppy Harlow is in New York to explain.
We know the SEC missed, along with everybody else, Bernard Madoff, numerous times.
POPPY HARLOW, CNN FINANCIAL CORRESPONDENT: Of course, we do. Actually, Richard, when you look at the special investigators' report on the SEC after the Madoff fraud there were numerous whistleblower warnings over 16 years that were either ignored or not followed up on. Now, Wall Street reform has tried to change that by mandating a whistleblower unit be created within the SEC, be fully staffed, be operational, within the next few weeks. That is their deadline.
But the bottom line is the SEC says they simply don't have the money to staff this unit or five other key units. And what is very interesting, Richard, is this is critical, perhaps the most forward facing part of the SEC for everyday investors. And it is not getting the staff, critics say, that it needs. And it comes down to politics, and it comes down to money. So we went down to Washington to find out more. Take a look.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: I'm in Minneapolis. I'm pretty sure I just stumbled over a Ponzi scheme, call me back here is my number.
HARLOW (voice over): That is the message Ty Slocomb (ph) says he left for the Securities and Exchange Commission in 2009, when he blew the whistle on a more than $190-Ponzi scheme.
(On camera): So, who called you back?
UNIDENTIFIED MALE: Nobody, initially.
HARLOW (voice over): Situations like this beg the question: Who is following up on whistle-blower tips?
We are receiving a significant increase in high quality tips.
HARLOW Wall Street reform granted the SEC a much bigger badge to police the multi-trillion dollar financial industry; mandating the creation of a whistle-blower unit. The SEC named the head of that office, but says it can't hire any staff, because the money is just not there.
UNIDENTIFIED MALE: We not only can't hire, but we can't even fill the positions that become vacant.
We're staffing it through borrowing resources, from other parts of the enforcement division.
STEPHEN KOHN: You don't staff a baseball team with football players and hockey players.
HARLOW: Stephen Cohen has been representing whistleblowers for more than two decades.
(On camera): The SEC says, we don't have the funding. We need more funding. They can't get it, at least not right now?
KOHN: Well, thy have to make priorities. They have to get employees with expertise in whistle blowing. Maybe they have to lay off other employees.
HARLOW: Do you think there will still be a whole where you are saying, look, we need the funds to bring in the right people to fill these holes.
Look, I think there will still be shortfalls. If you don't have sufficient staff, if you don't have sufficient expertise, the consequence is backlogs, and things do get addresses as quickly.
HARLOW: And when you are talking about fraud, and massive Ponzi schemes, time is of the essence.
UNIDENTIFIED MALE: That's true. That is absolutely right. We have learned that lesson.
HARLOW: Remember, Madoff? It was the SEC that failed to follow up on numerous tips about the Madoff fraud over 16 years, including multiple warnings from now films whistleblower, Harry Markopolos.
HARRY MARKOPOLOS, MADOFF WHISTLEBLOWER: About my repeated and detailed warnings to the SEC. They should have been able to shut him down right then and there.
HARLOW: Under financial reform, the SEC is supposed to get more money, $1.3 billion in 2011. But Congress hasn't signed off on it and some Republicans are even calling for cuts to the existing budget.
KHUZAMI: I think it is penny wise and pound foolish to deny the relatively small amounts of money that the commission needs in order to do its job.
HARLOW: Are we ripe for another Madoff?
KOHN: It's going to happen. It's going to happen.
HARLOW: Why?
KOHN: Because it's the nature of cheating on Wall Street. Fraud pays.
(END VIDEO TAPE)
HARLOW: And, Richard, as for that whistleblower you saw at the beginning of the story, he called the SEC, didn't get a call back until about two years later. He is now working with the SEC. They've filed a civil suit in the fraud that he blew the whistle on.
But, bottom line, this is very political. Some Republicans saying look, the SEC has tripled the funding we've given them over the last decade, they haven't been effective. You've got Democrats saying Republicans are trying to undermine, under control Wall Street reform by not funding the SEC to the level that President Obama has asked for -- Richard.
QUEST: Poppy Harlow with the whistleblowers tonight for us.
Many thanks, Poppy Harlow.
We will have more QUEST MEANS BUSINESS, including the markets, which, as you can see from your screen, the Dow is having a good day.
Back in a moment.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN. And tonight, as always, the news, on this network, comes first.
And there's been a powerful earthquake to hit Myanmar early on Thursday near the borders with China, Thailand and Laos. It was a magnitude 6.8. A strong aftershock followed after half an hour. There are reports one person was killed in Thailand as a roof collapsed.
A hospital in the Libyan city of Misrata is reportedly under attack by Moammar Gadhafi's forces. A doctor there has told CNN snipers are keeping people from getting in and out and they're shooting at ambulances. The same doctor says more than 100 people have been killed in recent fighting.
A Syrian cabinet minister and adviser to the president says Bashar al- Assad did not instruct security forces to shoot at people, but it's possible mistakes were made. She says Syria's aim is for citizens of different ethnicities to live together peacefully with safety and security. The country's leadership will work to raise living standards.
Ukraine has charged a former president in connection with the murder of a journalist in the year 2000. Leonid Kuchma is accused of abuse of power. Prosecutors say he gave the orders that led to the journalist's death. News reports suggest he won't face prison time, even if convicted, because the crime was committed, allegedly, more than 10 years ago.
The owner and operator of London's Heathrow Airport says it will invest more than $80 million to make sure that the chaotic scenes caused by cold weather last Christmas never happens again. Now, thousands of passengers suffered disruption last December when more than 4,000 flights were canceled due to snowy weather. The post-mortem into the mess, published today, says it in simple terms, that the company involved, BAA, didn't take heed of the weather forecast, wasn't prepared for the problems and too slow to respond.
The report says Heathrow is too important to air travel in the U.K. and worldwide for it ever to happen again. It says: "Heathrow should close only if there's an immediate safety threat."
So $80 million, 50 million pounds, quite a bit of money. If you join me in the library, you'll see where they're planning...
(COUGHS)
QUEST: -- excuse me -- to do it.
First and foremost, better snow plan. That's the core of what they're going to be looking at. "Listen more closely to the weather forecast and the advice and assume the worst."
Now, it sounds -- look, I can hear you saying, isn't this all very obvious, Richard?
And perhaps it is. But, also, it's working with airlines and civil aviation authority. All plans had been generic. They say the new plan needs to be much more simple.
"Sort out communications with a new control center that's needed," the sort of thing that they have at Madrid or LAX. Apparently, Heathrow's control center couldn't even see the runways, let alone do anything.
"Confusing and conflicting messages and better infrastructure, real time reactions, more snow clearing equipment, better welfare, better FELFAT (ph) teams fully trained around the clock. It's a particularly damning indictment of the airport that says and is the world's busiest international airport.
BAA's chief exec, Colin Matthews, forgave his bonus last year.
Ayesha Durgahee asked him how BAA would move on with these proposals.
(BEGIN VIDEOTAPE)
COLIN MATTHEWS, CEO, BAA: You know, we didn't plan for as much snow as felt -- as fell. We didn't have that much in the past. Now we've had it once. Of course, we need to be prepared for that or more in the future. So the first is about better snow clearance.
The second is about better command and control, better crisis management capability for the entire airport, together with the airlines. And with that, better communications, because one of the things that passengers were most fed up about in Christmas was the fact that if they called airlines or asked, they didn't always get exactly the same information. We have to be able to pull that together into a single coherent message.
And then the third one is about specifically how we take care of passengers best.
AYESHA DURGAHEE, CNN CORRESPONDENT: The disruption in December, whose fault was that?
MATTHEWS: Well, the key thing about December is we had thousands of passengers who experienced, really, a miserable time just before Christmas. So my job is to make Heathrow better. That's why I sent out the report -- the panel whose report was published today, not to look backward, but to look forward.
What can we do to make sure that doesn't happen again, to make sure that Heathrow provides better service to passengers in the future?
Switzerland is famous for its snow. Geneva was shut for 36 hours. Frankfurt was shut. Paris was shut. Amsterdam was shut. Brussels was shut. New York was shut. We weren't the only airport who was in difficulty.
But my concern is to make Heathrow work better. And we will do so. We have since December -- we didn't wait for the report that was published today. We went ahead and bought more equipment, to make sure that, faced with more snow, we will cope much better. And we will.
DURGAHEE: So in terms of the 50 million, can you break down what you're going to do with that money and how you're going to spend it?
MATTHEWS: Ten million has all been -- already been spent. And that is on snow moving equipment. The rest is amounts that we expect to have to spend. But, you know, we'll only do it if airlines completely agree it's the right thing to do, because for passengers to be well served, we have to be utterly integrated together with them.
So, for instance, one of the questions that the report raised is should aircraft be de-iced at the stand, which is how Heathrow has done it in the past, or should we have a central kind of drive-through facility?
Big airports that have regular snow events typically have those central drive-through capabilities.
And if airlines agree -- by the way, it's airlines who are responsible for aircraft de-icing -- if they agree that that's a better way to operate at Heathrow, then we'll go ahead and do so.
That would be a multi-million pound investment. It wouldn't happen overnight. We'd get on and do that.
Another suggestion, recommendation in the report, is that we have one single integrated command and control center for the airport that would pull together information from airlines and the airport so that we can give customers the best information, so we've got the best possible information about how all of the different bits of Heathrow are hanging together and manage crises better in the future.
We did have enough de-icer. We did clear the runways relatively quickly. That isn't where the challenge came. But our opportunity is to be better coordinated with the airlines in the future, to react quicker, in advance of events which are going to limit the amount of capacity we have at Heathrow. We're short of capacity at Heathrow.
So when we're faced with reductions for any reasons -- high winds, fog -- we have to be able to react very quickly with the airlines to say well, if we're going to have a reduction of 25 percent in our capacity, we need to have a corresponding reduction in the timetables that airlines are planning to fly. Otherwise, we have many passengers coming go the airport and not being able to leave.
You know, there wasn't one single thing that went wrong and there are -- we -- we need to improve how Heathrow works in total, together with the airlines.
(END VIDEO TAPE)
QUEST: Colin Matthews, the head of the BAA.
Meanwhile, America's Federal Aviation Administration has today suspended an air traffic controller at Washington's Reagan National Airport. Two flights are reported to have landed early on Wednesday morning without any communication with the airport. And now officials want to know why the only controller in the tower failed to respond.
The Transport secretary, Ray LaHood, has ordered the FAA to schedule two controllers on overnight shifts.
For months now, CNN's Suzanne Malveaux shines a light on life in the control tower and recent lapses in air safety.
(BEGIN VIDEOTAPE)
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): In air transportation, there are no second chances. But there have been a number of close calls and even tragedies that have been cause for alarm.
UNIDENTIFIED CHILD: JetBlue 171, cleared for takeoff.
UNIDENTIFIED MALE: Cleared for takeoff, JetBlue 171.
MALVEAUX: Like the case of the controller's kids landing planes at New York's JFK last year.
UNIDENTIFIED CHILD: Contact departure. Adios, amigos.
UNIDENTIFIED MALE: Adios, amigos. Over to departure, JetBlue 195.
MALVEAUX: The controller was put on leave.
And an even more disturbing case, the air traffic controller on a personal phone call when he should have been manning his post. A helicopter crashed over the Hudson River in 2009 that left nine people dead.
UNIDENTIFIED MALE: Calling heavy 777 short final.
MALVEAUX: And then there have been cases where exhaustion and demands of a nerve-racking job have taken their toll. According to "The Washington Post," nationwide, reported mistakes by air traffic controllers were up 51 percent last year.
But as federal authorities began their investigation into what happened at Reagan National, it's clear that human error is an inescapable part of life in the tower.
Suzanne Malveaux, CNN, Atlanta.
(END VIDEOTAPE)
QUEST: Human error may be to play -- play a part, provided you're not on the plane that's affected.
The Dow is up today. After the break, we'll explore the reasons why.
QUEST MEANS BUSINESS.
Good evening.
(COMMERCIAL BREAK)
QUEST: Now to Wall Street, where the major indices are solidly in the black or the green, depending on which analogy you want to use.
Alison Kosik is at the New York Stock Exchange for us this evening -- good evening.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Richard, you're all choked up.
You OK over there?
QUEST: I am.
(COUGHS)
QUEST: Yes. I -- I really must apologize. Not a -- I don't know, I'm a bit chesty this evening, I think.
But the markets -- the markets, now, they are sailing clear.
KOSIK: They really are. You know what, it looks like investors are putting their concern about Japan's recovery and the unrest in -- in the Mideast kind of on the back burner. Analysts are saying, you know, investors may be kind of getting used to all the turmoil in the news headlines these days. We're even watching the VIX. It's tumbled 30 percent, Richard, over the past five days. It shows that fear in the market is subsiding. This, as the Dow rises about 85 points right now.
You know what, the bulls seem to be running in the tech sector. Red Hat seems to be leading the way on the S&P 500. Its shares are up 16 percent.
Micron Technologies also had a strong earnings report. Those shares are up over 7 percent -- Richard.
QUEST: Now, as we look at the Exchange itself, the merger with Deutsche Boerse is moving on and regulators are looking into it on both sides of the Atlantic, particularly in Europe.
But in New York, has it dawned on them yet?
KOSIK: You know, I think it has sunk in by now. You know, they -- the traders here know the change is coming. And, you know, we've had all these people writing the obituary for the trading floor when this impending merger supposedly happens. And traders say un-unh, not so fast on that obit just yet. The NYSE has gone through many changes already and you know what, it's used to rolling with the punches.
(BEGIN VIDEOTAPE)
KOSIK (voice-over): At the New York Stock Exchange, the traditions are the same.
(VIDEO CLIP)
KOSIK: But the business of how stocks are traded has changed.
BEN WILLIS, DIRECTOR OF FLOOR OPERATIONS, SUNRISE SECURITIES: The sound used to have a great deal to do with how we traded on the floor of the New York. You could feel the market move by the increase in volume on the -- on the trading floor.
KOSIK (on camera): What do you say to the people who are calling for the death of the trading floor as we know it?
WILLIS: Don't buy the flowers yet.
KOSIK (voice-over): And if you ask one of the younger traders, it's the human component here that makes the NYSE so unique.
JOE GRECO, MANAGING DIRECTOR, MERIDIAN EQUITY PARTS: Human interaction, I think, is -- is the backbone of making a deal. Boil it down. You're -- you're dealing with millions and tens or hundreds of millions of dollars of other people's money and there's a fiduciary responsibility to make sure that that's handled properly.
KOSIK (on camera): There's a little less noise and a lot more elbow room here on the trading floor of the New York Stock Exchange, if you compare it to decades ago. But that's nothing new.
What is new is some companies are actually planning to bring even more people to work here.
(voice-over): Sunrise Securities is moving its trading desk from midtown Manhattan to the floor of the Exchange, in part because of the credibility factor.
WILLIS: We think adding the New York Stock Exchange brand name as a - - as a stamp of approval, we'll be able to tell our customers we have met the most stringent standards for trading in the world.
KOSIK: The global brand of the NYSE plays a key role in the pending merger with Germany's Deutsche Boerse. The deal will give the Exchange's customers access to a bigger variety of stocks and other financial products.
But what will it mean for the people who work here?
GRECO: I think the people who are here are going to be doing more business because of all the technology, the capabilities and I think the enhanced vision of the world.
KOSIK: Joe Greco expects the NYSE to be a part of that world for decades to come.
GRECO: In my career, we've had tremendous, tremendous change and innovation. And that's pretty cool. And I look forward to, you know, relaying that to someone 30 years from now and -- and telling them and they go, oh, thanks a lot, old timer.
(END VIDEO TAPE)
KOSIK: And social networking has also changed the landscape of how business and trading is done here on Wall Street. You know, rumors and ideas get out faster with Twitter and Facebook because those rumors and that speculation wind up moving the markets. You know, a week ago, there was a false rumor about Moammar Gadhafi, that he was stepping down. And it started affecting the market until the guys on the floor realized the information actually came from a completely non-credible source from Twitter.
So, you know, the guys down here are going to tell you it takes a human element to sort of what's true and what's not true in the marketplace -- Richard.
QUEST: Alison Kosik, interesting stuff, from the floor of the New York Stock Exchange.
Many thanks, indeed.
KOSIK: Thank you.
QUEST: Alison is talking about those Twitters and Tweets. While we bring you the credible ones. The Twitters -- the Tweets come from all over the place. But these are today's Tweets from the Top.
Let's start with the chief exec of Manpower, Jeff Joerres, who Tweets today on the question of numbers: "More good news. Four week moving average of job claims the lowest in two-and-a-half years. Very good sign."
Steve Case is the founder and former chief exec of AOL. And he's quoting a pal of his, Warren Buffet, on philanthropy: "If you succeed in everything you're doing, you're attempting things that are too easy."
Somehow that rings true.
Finally, chief exec of AirAsia, Tony Fernandes, who says that he is in Manila: "Cool roads now open in Manila on the skyway, past Gending (ph). This country will go places. Perfect timing for AirAsia."
One can always rely on Tony Fernandes to get the commercial in right at the end.
Good to see you, Tony.
And for the Tweets from the Top on this program, if you want to see who we are following, then you can go to Twitter.com/richardquest and you and I can have our own conversation about -- well, you name it.
Look, the spring-like weather has settled over much of Europe. You'd never know it to hear me cough and splutter my way through this evening. But don't worry, it's not catching -- Pedram.
You don't need to worry about that. It's just a bit of -- a bit of a tickle in the throat.
PEDRAM JAVAHERI, CNN METEOROLOGIST: Yes, I think it's the pollen count, probably. The temperatures, Richard, have been...
QUEST: Oh...
JAVAHERI: Yes. I think that's what it is. I was looking into it and the warmest temperatures in London since the fifth of November, 2010. So if you're counting, 140 days since it's been as warm as it has been in the past 24 hours, getting up to 17 degrees out there, the air temperature over the past couple of days.
And, of course, looking at the satellite imagery here, the graphics, and showing you what's happened -- a very, very quiet weather conditions left in place. And with that said, we're seeing clear skies and also the warmer temperatures.
And take a look at the air mass that's been parked in place here, the warmer air. And that's going to begin to change here over the next couple of days as we have a northerly flow. A front begins to come in. So from north to south, starting Saturday afternoon into Sunday morning, a gradual cooling trend. And by the time we get to Sunday afternoon, you're going to notice very much, five to seven or so degrees cooler, perhaps eight degrees cooler than what it had been and that high pressure has sat in place, causing that air to sink, causing the air to compress. And any time you compress that air, you're going to warm it up.
But again, here comes that cold front. The temperature is going to cool off. And to the south, a possibility of some showers. But this is certainly going to help mix up the atmosphere a little bit.
So the chesty Richard was complaining about the feeling he's getting in his throat there, certainly it could get better if we mix that atmosphere and get the particulates to move around a little bit.
But take a look. If you're traveling around Europe, you're going to expect fairly clear conditions out there as far as travel conditions are concerned. And getting up to Dublin, perhaps a layer of fog in the morning hours. But again, it should clear up by the afternoon, causing very minimal delays, if anything.
And the forecast looks as such -- gorgeous conditions on tap. For Friday, increasing cloud cover. That causes the temperatures to cool off and it remains cool air. But again, we'll begin to see it moderate back out as we approach early next week. The average temperature is 13 for this time of year. And Wednesday's 17 goes in the books there as the warmest day we've seen in several months.
And even for the south in Paris, it has been about eight or so degrees above average. We should begin to see it cool down here, closer to the average temperature as we approach early next week, Richard.
So, hopefully, we're going to be feeling better in the next couple of days out there.
QUEST: I'm feeling better already.
JAVAHERI: Good.
QUEST: Pedram, many thanks, indeed.
Now, if this afternoon...
(COUGHS)
QUEST: I spoke too soon.
If this afternoon, you could hear some noises over in Washington, DC, that was the sound of the crashing of history, because it's been announced in Washington, D.C. -- it's been announced in Washington, D.C. that the Federal Reserve is to start holding press conferences by Ben Bernanke.
Apparently, according to the press release, there will be four press briefings a year. The first one will be on April the 27th, then June the 22nd, then November the 2nd. They will be shortly after the FOMC has its regular meetings.
Now, this is very much along the lines, it's the sort of thing that Jean-Claude Trichet has been doing at the ECB in Frankfurt. But for the Fed to be actually having this is really quite an extraordinary shift in -- in policy. We'll talk more about that tomorrow.
Some people will be wanting to know the markets and how they are trading, up 81 points, at 12167. That is a gain of just over half of a percent.
I suspect the market, it will be just as excited by this announcement that the Fed is going to be having press conferences.
Felicia Taylor is with me in New York -- Felicia, I mean what can we say?
This is -- this is the temp...
FELICIA TAYLOR, CNN CORRESPONDENT: I mean...
QUEST: Well, what did you think when you saw this announcement?
TAYLOR: Like, really?
Are you kidding?
I mean this is a total break from tradition. You've got to remember, Ben Bernanke has only done this twice before. And those were in times of financial crisis. So this is clearly an attempt by the Federal Reserve to be more transparent and basically answer questions from the critics about possibly how they're going to exit from QE2 or, indeed, if they're going to continue into QE3. That's a question we still don't have any idea about.
So as you mentioned, the Federal Reserve is now going to be holding four press briefings after their meetings. And that will happen quarterly, the first of which will begin at the end of April.
Very timely, because obviously QE2 begins to unwind, if it's going to, in June.
QUEST: Right. But you see the fascinating part is, look, no journo sitting in that press briefing is going to say, please, Mr. Bernanke, when are you going to put up interest rates?
But the -- the nuance...
(LAUGHTER)
QUEST: I mean, well, you're not, let's face it. But you're going to ask a question that's going to elicit that nuanced answer that we often get from Jean-Claude Trichet in Frankfurt.
TAYLOR: Right. I mean you have to admit, Ben Bernanke hasn't done this before. I mean the Bank of Japan and the ECB have been doing these kinds of press briefings. And -- and we all know, Ben Bernanke, has that lovely Fed speak that we've seen before.
But this is history attempt to try and be a little bit more transparent for the Federal Reserve.
You have to admit, we -- we have no idea, really, what the reasoning has been up until now. Sure, we've gotten some indications about things. But there's been tremendous dissension lately, especially by two of the -- the new bank presidents that have voting rights -- as to whether or not they're going to continue on this path of quantitative easing.
We shall find out. I mean, obviously, this is an attempt from them to try and change that by holding these press conferences -- Richard.
QUEST: Felicia, lovely to have you with us to talk about that.
Many thanks, indeed.
Anybody who watches the Fed as closely as Felicia and myself does will perhaps be getting terribly excited about this, maybe more excited than you are about it.
When we come back in just a moment, we'll turn our attention back to our lead story of the day, the mess that is the EU's financial affairs in Portugal.
It's a Profitable Moment, after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment.
The European leaders are talking and once again, the continent is in financial crisis. That's supposed to be an inability to get ahead of the sovereign debt debacle. Too many parties, too many vested interests and we are always met by the old line -- you heard it on this program earlier -- well, this is the European way of doing things. This is the way Europe does things.
Well, obviously, the politicians will move before the worst happens. But there is something else to think about.
While they talk, while this situation bumbles along, Europe does not recover as fast as it could. Potential is lost. Citizens experience slow growth. It's a real cost to this slow action. Far from having a dynamic bounce back, things muddle along, maybe not double dip, but it's just a shame that we deserve better than this lurching from one crisis to another.
And that's QUEST MEANS BUSINESS for tonight.
I'm a chesty Richard Quest in London.
Whatever you're up to in the hours ahead, I hope it's profitable.
"PIERS MORGAN TONIGHT" is ahead after the headlines.
END
