Return to Transcripts main page
Quest Means Business
US East Coast Braces for Sandy; Public Transport Shut Down; Flight Disruptions; Crane Breaks Above West 57th Street, Manhattan; Hurricane Watch; Sandy Slams New York; Wall Street Closed; Businesses Affected; Euro, Pound Down; Greek Tax Scandal; European Markets Down; New York Evacuates
Aired October 29, 2012 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Massive and dangerous. Hurricane Sandy heading for the US East Coast. It arrives a few hours from now.
Shut down. US stock markets are closed. First time in a decade.
And business and travel grinds to a halt, 7,000 flights at least disrupted.
I'm Richard Quest at the CNN Center where tonight, I mean business.
Good evening. Tonight, 60 million Americans are bracing themselves for an unprecedented storm. Already 300,000 people, homes are without power and Hurricane Sandy has yet to make landfall on the east coast of the United States.
It is a different version of QUEST MEANS BUSINESS tonight. We're examining the preparations and the economic impact. We're live with reporters along the length coast as this eye of the storm moves closer.
And with just eight days from presidential election, Barack Obama will be acutely aware of the importance of his handling of the crisis. We look at how the hurricane is affecting the campaign.
There are 100-mile-an-hour winds, 11-foot-high waves, and 60 million people in its path. Also, some of the most important cities in the United States and crucial cities to the global economy.
Hurricane Sandy is moving northwards towards the US East Coast, and there's a few hours of daylight left, and we know the worst may be yet to come. These are the pictures we've been seeing --
(RINGS BELL)
QUEST: -- in the last few hours.
(BEGIN VIDEO CLIP)
(WIND BLOWING)
(END VIDEO CLIP)
QUEST: Three hundred thousand people already without power across seven different states, two thirds in New York and New Jersey. Another state has declared a state of emergency in the past half hour, that is West Virginia.
Even though the hurricane hasn't officially made landfall, the effects up and down the East Coast are striking. Let's look at New Jersey: the streets flooded, and you can see how the water's moving and just how fast the winds are accelerating.
Huge waves have been hitting this pier in Virginia for hours. We are expecting a storm surge at around midnight, that is in just over nine hours from now, under night hours. It could raise the water levels to 11 feet higher than a normal high tide.
And this is the vision from space. NASA took this footage of Hurricane Sandy from the ISS, the International Space Station, earlier on Monday.
So, you are up to date with the current position as it stands at the moment. The waves are rising, the winds are howling, and the president of the United States, Barack Obama, says people's lives are at stake if they choose to ignore the evacuation warnings.
Mr. Obama is now back at the White House. He's been in the situation room, and he's canceled campaign events in Orlando in Florida. It's all about safety.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If the public's not following instructions, that makes it more dangerous for people, and it means that we could have fatalities that could have been avoided.
(END VIDEO CLIP)
QUEST: Barack Obama. The state of Delaware just south of New York has declared a state of emergency. Brian Todd is at Rehoboth Beach in Delaware and joins me now. Brian, we need first of all, overarching view. How bad is it, and how bad is it likely to get?
BRIAN TODD, CNN CORRESPONDENT: It's pretty bad already, Richard. A driving rain, and the rain keeps switching directions on us. Right now, it seems to be coming a little bit from inland toward the surf here behind me. This is the boardwalk in Rehoboth Beach, Delaware. Officials here very worried about the state of this boardwalk and whether it's going to hold up.
I'll walk along the boardwalk and show you some of the damage here. Not too much damage yet. They've had some sand wash up on this boardwalk - - just went out of your sight for a second past the gazebo, here -- but they are worried about this getting worse, and some of this boardwalk maybe -- could be compromised later on if the storm surge gets too bad.
As I walk toward the surf here, our photo journalists Chris Turner can kind of zoom out and show you a wide shot of just how bad some of the surf is. Now, when it was high tide earlier today, it was much worse than this, actually. The waves were higher and the surf was up right about to where I'm standing.
There will be another high tide later, and so the water will come up here. And that's going to be a problem. I was just standing on the boardwalk a second ago. They're worried about this. There are a lot of hotels and residences along this part of the beach in Rehoboth Beach, Delaware.
A lot of people come here for the summer. That's the good news: they are not here now. This city shrinks in population drastically at this time of the year. But just a short time ago, I spoke to the city manager of Rehoboth Beach, Greg Ferrese. He talked about what they've lost and what they could lose.
(BEGIN VIDEO CLIP)
GREG FERRESE, CITY MANAGER, REHOBOTH BEACH: We had a beautiful beach this summer. Beach replenishment ended in Many. Our beach was about 300 - - 350 feet wide. We lost most of the beach now.
This is the worst storm that I have experienced in my 30 years here, and if it wasn't for beach replenishment, we would have structural damage to our businesses on the boardwalk.
(END VIDEO CLIP)
TODD: So, they're very worried about this boardwalk, because there are a lot of businesses along the boardwalk, and as he mentioned, they did expand this beach. They reconstructed it, reconstituted the dunes here earlier this year. They expanded it 300 to 400 feet out toward the ocean.
Well now, a lot that could be going way, because they're really concerned about beach erosion here, and that could really just wash up along here, take a lot of the beach away, and it could start to -- I guess erode away some of the boardwalk, even, or maybe break it apart.
They did mention that 20 years ago there was what they call a Nor'easter here, which basically just tore apart a lot of this boardwalk. It's very dependent upon this boardwalk, here, for tourism in this town, Richard, so they are very, very worried here.
QUEST: Quick question to you: you alluded to the fact, once the hurricane makes landfall, Brian, how much worse does it -- is it expected? Or are we, in some sense, seeing the wind field, which is the damaging part for where you are?
TODD: Well, the wind right now, Richard, not so bad, but as you mentioned, it is -- it hasn't made landfall yet, and it's going to very shortly. When it does, it could be a really bad situation here, because there could be a lot of trees coming down in this area.
Many of the houses here, what they call these old Cape Cod-style houses, mostly made out of wood, and those are very fragile in those heavy winds, of course.
Inland flooding is also a big danger. We've already had a lot of it here in a place called Lewes Beach not far from here. A lot of roads are closed. I walked into some inland flooding on some of the flooded roads. The water came up to about my knees, and it's supposed to get worse. So, Richard, that's how it could be worse in the hours ahead.
QUEST: Brian Todd, we'll leave you so that you can at least get under some cover for the time being whilst we continue to see those -- the winds lashing the beach at Rehoboth in Delaware.
Now, people in the affected cities have no way of getting around via public transport. That might seem so obvious to say, but come over to me to the CNN super screen and you will understand what I mean.
There has been a total shutdown in New York, New Jersey, Boston, and Washington. Transit closed in, basically, from Washington, DC; Philadelphia; New Jersey; up to New York and up to Boston.
And that is closed until further notice, which is a fair bet to say that it will be another two or three days. It's only the second time in history in New York that the MTA -- Metropolitan Transit Authority -- has been shut due to weather.
Eight and a half million riders a day are affected, but it's not just here, because obviously, as things move out, you end up with the East Coast services canceled, the East Coast services affected. These are, of course, Amtrak, which goes up and down, it's known as the Corridor, the Acela Corridor. Greyhound has also been affected.
If you're on the ground, that is the way the situation is. If you are in the air, I want you to look at this particular issue. This is a map, if you like, of the United States at this moment. It is a radar map. The light blue are the planes in the air. They're over the midwest: Chicago, Detroit, Minneapolis on the way down towards the South: Houston and Dallas.
Look at the green. That is the northeast. Barely a plane in the sky. And the reason, of course, thousands of flights have been canceled. In fact, flights have been canceled across the United States. And I want -- this is worth pointing out, when we see just on the international front how things are likely to be affected.
First of all, all the flights from Europe -- and there are hundreds every day, 45 flights just alone from the UK, from London Heathrow across to the United States northeast -- so, European flights very badly affected.
The Middle East flights are also affected, along with the Gulf -- that would be your Etihads, your Qatars, your Emirates. They have been very badly affected.
From Asia, note how these go. They go in the opposite direction, of course. They go over the polar and over the Pacific, again into New York. And, of course, the Americas from Argentina, from Brazil, from Chile, from Peru, up to New York.
That diagram on its own shows you the extent. If you are traveling, by the way, with a European airline, you may be entitled to the care and comfort rule. It's known as -- I'm going to put it up here so you can see -- EU -- if I can actually get myself to work on here. Here we go. EU 261. It is the European rule that allows people to have care and comfort as a result of European legislation.
If you are traveling with a European airline and you are stranded in any of these places or you're stranded on the other side as a result of what's happening with Sandy, you could be entitled to compensation as a result.
Some live pictures I need to bring to your attention at this moment. This is a crane attached to a building that is under construction. It's only blocks away from the Time Warner Center, and it has broken off. Not the Time Warner Center, the crane. Look at it, right at the top at your 12:00 on the screen. The arm is dangling above West 57th Street. It's an example of how strong the winds are.
Tom Stater is at the CNN World Weather Center for us for the moment. Tom?
TOM SATER, CNN METEOROLOGIST: Yes?
QUEST: You and I have had many conversations about this in the last couple of hours. You said on the eastern side, it was going to be the surge, on the western side, it was going to be the rain and the downpour.
SATER: Yes.
QUEST: Is that still how it's playing out?
SATER: And the snow.
QUEST: The snow?
SATER: And the snow.
QUEST: All right. But concentrate for the moment on what's happening in the major metropolitan area New York City.
SATER: All right, let's give you the very latest, Richard. Currently, it's 255 kilometers from New York, but it's not going to make landfall in New York. It was hundreds of kilometers away when we started to see the effects of the storm surge.
New York City could possibly look a little like Venice, Italy, in the hours ahead, parts of lower Manhattan. We're having the flooding, the strong winds, power outages everywhere. The storm surge is unprecedented. In fact, the benchmark for storms goes back to 1938, what's called the Long Island Express.
This storm is larger in its size, the pressure is lower in the millibar reading -- that's scientific, I know -- but we've never had a storm with this kind of low pressure in the history of recorded weather north of the outer banks.
So, this is something that's going to continue to make -- landfall, looks like maybe two and a half to three hours. High tide comes this evening. So, in New York and, let's say Philadelphia in other areas, high tide times do vary, about 8:00 to 9:00 PM local time. You can toss in additional third of a meter just with high tides. But it's going to run through several cycles -- several tide cycles.
Notice this turn to the right, as it banks. This is not a very quick process. This is a slow process. Inundation of heavy amounts of rainfall. We want to thank WDDT for this. Now, this is a model, which some hydrologists believe the amounts of rainfall in your outer areas, a 10 to 50-year flood --
(QUEST RINGS BELL)
QUEST: Tom, Tom, hang on! Hang on, I've got a question for you.
SATER: Yes?
QUEST: I've got a question for you. When that surge hits, in that -- those hours, let's really drill this down.
SATER: All right, take a look at it, right here.
QUEST: Right. Let's drill this down. When that surge hits, what is the risk of -- what's the damage and where's it going to be?
SATER: The surge itself -- we're talking about, when we talk about Italy, up to the north. Here's Long Island. When that surge in the winds come in parallel to this area, not to mention that the coastline, Richard, is perpendicular.
Landfall is down in southern areas of Jersey, but because it's turning counterclockwise, we're going to find water inundating areas five, seven, maybe ten blocks inward. And it gets --
QUEST: Are you just being alarmist here?
SATER: Some hydrologist, Richard, believe that inland rainfall, which causes the most fatalities in hurricane systems like this, could possibly see a one-in-500-year flood.
The amount of economic loss from winds alone -- we had computer models, Richard, that wanted to give us $2.5 billion yesterday. With winds now, just 20 minutes ago, wanted to give us $17 billion loss. That's just with winds.
QUEST: Tom, many thanks, indeed.
SATER: Sure.
QUEST: Tom Sater at the World Weather Center. I'm surprised he's still awake, he's been up all night.
Now, we're heading to New York, where Hurricane Sandy has shut down the tunnels, the transport, and the trading, the three Ts: tunnels, transport, and trading, when we come back.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: Two of Manhattans three main road tunnels are now closed because of the risk of flooding from Hurricane Sandy. New York mayor Mike Bloomberg has ordered low-lying areas of the city to be evacuated, it affects the best part of 400,000 people. The mayor's asked those within the affected zone to leave as soon as possible.
(BEGIN VIDEO CLIP)
MICHAEL BLOOMBERG, MAYOR OF NEW YORK: -- in Zone A and can find a way to leave, leave immediately. Conditions are deteriorating very rapidly, and the window for you getting out safely is closing. As the winds start building this afternoon, it gets more and more dangerous to go outside.
And so, you're sort of caught between a rock and a hard place. You should have left, but it's also getting to be too late to leave. If you really experience an emergency, 911, we will send our first responders in, although we'd love very much not to have to put their lives at risk, and you can control that by getting out now.
You can look outside and say, "Oh, this is not bad." That's correct. But it is going to be.
(END VIDEO CLIP)
QUEST: And that's really the message of tonight. The New York Stock Exchange is closed because of Hurricane Sandy. It's not expected to reopen until Wednesday at the earliest. It's the first time the big board's been closed because of weather in 27 years. Then, it was Hurricane Gloria last did the city. The Exchange says safety must be its first priority. The NASDAQ's also closed on Monday and Tuesday.
Teddy Weisberg is the founder and president of brokerage Seaport Securities. He's on the line, now, from New York. Teddy, even you don't remember the 1985 closure, surely.
THEODORE WEISBERG, FOUNDER AND PRESIDENT, SEAPORT SECURITIES (via telephone): -- what I did yesterday, but I was certainly there, because I've been active on the trading floors as a member for 43 years, so --
(LAUGHTER)
QUEST: All right.
WEISBERG: I guess if you tell me it happened, it happened. I'll take your word for it.
QUEST: All right. Teddy, let me ask you. The closure -- in its simplest state, the closure of the market at this particular time in this particular way, it's obviously a major event. But does it have any long- term implications, do you think?
WEISBERG: Well, no, I don't think so. We -- it's highly unusual that the markets would close for any weather-related event. I didn't recall it in the mid-80s, but as you said, we did close then. But in the 43 years that I've been there, I think other than the time for Gloria, this is the only other time I can remember being closed.
Now, it is true that we closed for the week after 9/11 and reopened on September 17th, but that was obviously highly unusual and hopefully those circumstances will never be repeated again.
QUEST: Right. And the interesting thing here, of course, is that although -- effectively, I know you're on the floor of the -- a floor trader -- although the market could trade electronically, it is simply not either safe for the staff to be there or, perhaps, it is not right in an era of transparent markets, to have markets trading in such strange circumstances.
WEISBERG: Well, it could be the latter, but I think it's actually the former, because let's not forget that even though we have electronic trading everywhere, a lot of this electronic trading is basically being supported by human beings in office buildings not only in Manhattan, but up in Stanford, which is a suburb of New York City, and over across the Hudson River on the New Jersey side.
And so, I think it impacts potentially tens of thousands of people that work at these financial institutions that could basically be supporting electronic trading networks. So, the fact is, they still have to get to work, and the issue is just safety of -- safety of those folks that need to get back and forth.
QUEST: Finally, Teddy, it's always good to hear your perspective. Whereabouts are you in the northeast at the moment, and what's happening outside the front door?
WEISBERG: Well, I'm in the upper East Side of Manhattan on 72nd street close to Central Park, and as I look at the window, it's finally started to rain. We really haven't had a lot of rain, and the wind is beginning to pick up. And the city is not completely deserted. There are cabs and cars in the street and people --
QUEST: For the moment.
WEISBERG: -- there are actually people walking around, but basically, most stores and shops are closed.
QUEST: Stay safe, Seddy (sic), we'll talk -- stay safe, Teddy --
(LAUGHTER)
QUEST: -- we'll talk to you after this is over. Teddy Weisberg joining us on the line from New York.
It's not only the big board that's closed because of Sandy, Pfizer postponed the release of its earnings report until Thursday. They'll now come out -- due until tomorrow. Power companies Entergy and NRG Energy have delayed their reports. Google canceled its Android event, due to show of its new Nexus 4 phone, Nexus 10 tablet, an update, and its software.
And Sandy is effecting Facebook's plans. It had to cancel two New York-based events this week, an engineering open house and an announcement about its gift-giving service.
Now, the story we're following that you -- showed you, remember look at your 12:00 on the screen and look closely at the crane. It's atop a luxury skyscraper under construction. It has partially collapsed, and it's leaving the arm perilously close, hanging over New York City's West 57th Street.
I suppose that -- there's no good news about that, save for the fact that everybody's indoors and the streets are pretty much deserted anyway. But I tell you something for nothing: if that crane comes apart and comes down, there'll be more than a mess on 57th Street.
Members of both New York Police and Fire Departments are on the scene, and parts of the street's been closed off. One 57 is an ultra high-end skyscraper under construction topping some of the most expensive apartments in the city.
Now, the currencies and how they are trading. The euro is down by almost half a percent against the US dollar. The pound has fallen even further. The yen is weaker against the American currency. Even though the US isn't the center of Forex trading, this sort of an event will have an effect.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: And now to some pictures. It may seem as if it's hard to tell where anything is coming from. This is from Maryland further down the eastern seaboard. It is the beach, obviously. And you can really start to see that as the hurricane comes closer -- the signal breaks off every now and again. Nothing much we can do about that.
What you are seeing, because we now know, and Tom was telling us, and we've been hearing, we now know that landfall for this hurricane will be somewhere along that juncture of Delaware north -- south New Jersey.
And that will happen in the next three to four hours, give or take -- it's not a precise science -- and that's when, of course, everything gets really nasty, in the dark hours. We'll follow that.
Let's take our other stories to bring to your attention while we continue. A Greek journalist has been arrested for publishing the names of Greek citizens with Swiss bank accounts. Costas Vaxevanis says it's the same list Christine Lagarde, when French finance minister, gave to her Greek counterpart.
The authorities say it's a breach of privacy. Vaxevanis says he's acting in the public interest. The reluctance of the authorities to name and shame possible tax evaders has infuriated the country's international investors and, increasingly, ordinary Greeks. Diana Magnay is our correspondent, and she's in Athens for us tonight.
(BEGIN VIDEOTAPE)
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: Now the Lagarde list is a list of some 2,000 wealthy Greeks holding Swiss bank accounts at the HSBC branch in Geneva, and that list was handed to Greek officials by French authorities in 2010.
There is, of course, nothing illegal about holding a Swiss bank account, but the suggestion is that many of those names are tax evaders, and there are questions being asked in this country as to why none of the names on that list have been pursued for tax evasion, as they have, for example, in France and Germany.
Now, Costas Vaxevanis, an investigative journalist in this country, has now published the list of names in a magazine, "Hot Doc," over the weekend, been arrested as a result, and is facing a court today on misdemeanor charges and the abuse of personal data. He said it was not him who was criminally responsible but, rather those who failed to act on the contents of the list.
COSTAS VAXEVANIS, JOURNALIST, HOT DOC EDTIOR (through translator): I did nothing more than what a journalist is obliged to do: I revealed the truth they were hiding. If anyone is accountable before the law, then it is those ministers who hid the list, lost it, and said it didn't exist. I only did my job. I'm a journalist, and I did my job.
MAGNAY: There is a parliamentary committee currently investigating what happened to that list. They've questioned both the then-Greek finance minister George Papaconstantinou and his successor, Evangelos Venizelos, to see why the names were not pursued closer once they actually had the documents in their hands.
Greeks owe some $70 billion in unpaid tax to the Greek state, and this is one of those structural reforms that the troika has been pressing Greece to push through over the last three years, which hasn't really happened yet.
LOUKAS TSOUKALIS, PROFESSOR, ATHENS UNIVERSITY, EUROPEAN ORGANIZATION: We know that's -- OECD tells us, that if we had the tax revenue capacity of the average OECD country, our tax revenues would be high, above 5 percent of GDP.
We have not done much to improve the situation in the last three years. Apparently, we are ready to do it now. OK? I hear, for example, there are going to be sweeping changes in tax offices and so on. Better late than never, but it should have been done earlier.
MAGNAY: This comes, of course, at a very sensitive time. Greek people are very angry that there can be such a culture of tax evasion at the highest levels of Greek society whilst they are being asked to push through yet another round of austere spending cuts.
Diana Magnay, CNN, Athens.
(END VIDEOTAPE)
QUEST: Stock exchange in Athens plunged more than 6 percent after the Greek government ruled out a bond swap with the EU's new rescue fund, and the financials dragged down broader markets. Look at the down -- Athens, obviously, they were the ones worst hit. Paris, Frankfurt, and London also sharply off, as well.
There's no trading in New York. That much you know. Yet, the big board, the NASDAQ, the options, the CME, they are all affected by what's been happening. Ashleigh Banfield is in Battery Park on the southern tip of Manhattan, that's facing New York Harbor, and Ashleigh Banfield joins me now. She can't hear me, but she's now going to tell us the current situation.
ASHLEIGHT BANFIELD, CNN CORRESPONDENT: Richard, I can't hear anything you're saying. If you've asked me a question, I couldn't hear it, but let me tell you a couple of things that are happening down here on the southern tip of Manhattan.
We're now under a mandatory evacuation in the zone that I'm in, called Battery Park City. But 400,000 New Yorkers have been ordered by the mayor to get out, get to safer ground. Come with us over here so that the microphone's not quite a windy.
One of the big issues with Manhattan, as you'll well know, we're at sea level and we're expecting somewhere around a 12-foot surge. Richard, take a look down here. (Inaudible) 8 feet down, the water. So by 8 o'clock tonight, when we're expecting the highest tide, that might have it up to about here. So I mean, you can imagine what that could do to a city with this many people in it.
And I want to direct your attention over to that high-rise over there. That's about 60 stories. So here's what happens when 80-mile-an-hour winds come on shore here.
Thirty stories up, it changes remarkably to 96 miles an hour -- sustained. And then if we add another 20 stories on that building, at 80 stories, that goes up to 104 miles an hour -- sustained, not even including any of the gusting that we're expecting.
Take a look over here as well. Just if you, would, Rich (ph), go ahead and take a look at that boat that's just drifting down the Hudson, we've been seen very, very little traffic. We saw a police boat earlier; that boat, unusually, drifting broadside down the Hudson. I saw last night loads of freighters and tankers getting up the Hudson to better ground.
But like I said earlier, we have so many people under evacuation in five boroughs, I cannot explain to you, Richard Quest, why there are people out here in 45- to 60-mile-an-hour gusts. Look around here, Rich (ph).
Take a look at these guys. Take a look at these guys, running. (Inaudible) over here. I can't explain to you why on Earth, while police are patrolling and telling them to get out and the National Guard is en route, 1,100 strong, they seem to think this is a bit of a tourist attraction. I am here to tell you it is not. Not in the least.
QUEST: There we'll leave --
BANFIELD: Here comes Santa, Richard. I don't know if you can see it, but --
QUEST: Oh, my goodness gracious me.
BANFIELD: All righty.
QUEST: I mean, I hesitate to show you these pictures, bearing in mind the seriousness --
BANFIELD: Only in New York.
(LAUGHTER)
QUEST: Thank you, Ashleigh Banfield.
BANFIELD: Only in New York.
QUEST: Sums it up perfectly, only in New York.
I assure you, I suspect they won't be running in Santa costumes or anything else in the hours ahead, at least as the storm finally arrives.
The Tappan Zee Bridge, which is another major crossing that -- one of the major crossings that links the whole of New York with New Jersey and upstate New York, the whole -- look, you know. It's a warren of bridges and tunnels and connecting bridges.
The Tappan Zee Bridge is closed, beginning at 4:00 pm due to weather conditions. That's in just about 25 minutes from now, according to Mario - - I'm sorry, Andrew Cuomo.
If I've made that mistake once over the years, I should do it with a dollar every time I get his name wrong. (Inaudible) to Mario Cuomo.
As Hurricane Sandy races towards the United States, it's turning life upside down.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in a moment. This is CNN and, here, the news always comes first. And there is only one story that we're bringing to you at this hour.
Hurricane Sandy is pounding the United States' Eastern Seaboard ahead of landfall expected in around five hours from now. This live video from Ocean City, Maryland, shows the state of affairs -- darkening clouds, increasing winds, rising waves.
Hundreds of thousands of people throughout the region have now been evacuated from their homes. The governor of Connecticut says Hurricane Sandy has the potential to cause unprecedented damage.
This crane is on top of a luxury skyscraper under construction and has partially collapsed. Its arm is precariously perched over New York's 57th Street -- West 57th.
President Obama has scrapped all campaign appearances for the foreseeable future. He's at the White House as the storm picks up speed. It's unclear when he will begin hitting the campaign trail again.
Other news that is happening in your world, Syria's holiday truce came and went, each side blaming each other for the violence that's come as a result of the collapse of the temporary cease-fire. A car bomb in Damascus claimed at least 10 lives. Opposition groups report government airstrikes on residential neighborhoods.
And the European election monitors have labeled Ukraine's presidential election a step backwards. President Viktor Yanukovych remains on course for an absolute majority. Monitors have criticized the poll, citing abuse of power.
The latest outbreak of sectarian violence in Myanmar has left more than 22,000 people homeless. The United Nations says fighting between Buddhists and Muslims has caused large-scale destruction. Last week clashes between the two groups killed at least 84 people.
(MUSIC PLAYING)
QUEST: Hurricane Sandy -- you know about it. It is just about to arrive on the Eastern Seaboard of the United States. And you can see here, New York's deserted transit stations, public transport has also been shut down in Washington, Philadelphia and Delaware.
In Connecticut, state highways have been closed to all except emergency vehicles. Airlines have canceled thousands of flights. If you are planning to or from the Eastern Seaboard of the United States, you are not going to travel today, tomorrow and maybe not even Wednesday; Thursday's looking more likely. Let us bring you it live right now.
Maggie Lake is in the path of Hurricane Sandy. She's in Asbury Park in New Jersey.
Maggie?
MAGGIE LAKE, CNN CORRESPONDENT: Hey there, Richard. Just going to cheat it a little bit because we have horizontal wind and rain hitting us. I just want to show you what is over my shoulder. We are in the shadows of the historic Convention Center here in Asbury Park. A lot of Bruce Springsteen fans around the world will recognize that name.
We are looking at a surf now that has waves that are reaching about 10 feet. The tide is starting to come in. This is what we have been concerned about, high tide's about 8 o'clock here. Will it come over and wash away the boardwalk? We've already seen damage down south in Atlantic City on those barrier islands. So they're bracing here. We think we're going to be on the north side.
I just wanted you to take a look at what else is happening here already. And again, we are hours out from the storm. A layer of sand is now starting to come on the boardwalk here (inaudible) that blowing horizontally, which is why I'm going to sort of keep my back to you.
Major concerns about flooding; there has been mandatory evacuations for most coastal communities here, many people have left but many are also staying. They said they left for Irene last year; this area was spared. They're worried about where to go because the storm is so big. So some are staying put. That is concerning to many officials.
The other big concern, aside from flooding, of course, is power outages. Not only here in the coastal communities that are going to suffer flooding but also beyond that. This is a very populated area. Neighborhoods that have been around for a long time, large trees everywhere.
We just spoke to the official from the fire department here in Asbury Park. And he said that there were a couple of reports already of downed limbs. They're starting to get calls of power is mostly on in this area, but some 300,000 residents already out of power because of this in the south end of New Jersey alone.
So officials are getting ready, Richard. We are hours away from this thing hitting, most long-time residents of this area say they've never seen anything like it. They're getting concerned, Richard.
QUEST: Maggie, in that regard, if that is the situation, is there a feeling of how much worse it gets once this thing, once this hurricane arrives?
LAKE: Absolutely. I mean, it feels like the hurricane now, Richard. And that's what, to a person that we talked to, officials as well, say if this is what it's like now, what is going to happen when this thing makes landfall?
Again, we're anticipating it to be large and to come as a rainmaker. And we knew it was coinciding with a nor'easter and coastal flooding. But it feels much stronger than they had talked about earlier in the week in terms of power of the wind gust. I mean, we are standing here now, but it is difficult to see it on this boardwalk.
And we are actually sheltered by a building that's not far from us. If you were out in the open, you're really getting blown around. And, again, we're hours away from really the center hitting. And again, the concern, not only for those who stayed, the elderly, many of them have nowhere to go; many of them have been here for a long time.
We understand there is a building full of them near us that we're going to check on in just a bit. But a lot of concern about that, a lot of concern about first responders getting out to help people, Richard.
QUEST: Maggie Lake, who's in Asbury Park, New Jersey, as the evening gets worse, Maggie will obviously be back to tell us more about it.
The hurricane's packing winds of up to 140 kph. The damage alone could cause more than $7 billion. That's speculative. No one really knows.
Alison Kosik has more from CNNMoney.
Alison, we know yesterday they were talking $2 billion to $3 billion. Now they're talking about $7 billion to $10 billion. I mean, it really is a case of just think of a number and double it. Nobody really knows.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Exactly, nobody really knows. I mean, estimates are all over the place, you know, many of them well above $7 billion at this point. But here's some of the numbers that we are seeing so far.
The overall economic impact of this monster storm, it could range anywhere from $10 billion to $20 billion. That includes insured losses and property damage as well. Some firms and economists are -- that we're talking to agree with this $10 billion to $20 billion figure. Also there's concern about losses of businesses.
And this is harder to measure. You know, there's the cost of shutting down business . You know, the doors have been closed Sunday, closed today, they'll be closed Tuesday, maybe they'll be open Wednesday. So that's lost business you can't get back. That's really hard to measure. You know, I was out at Asbury Park overnight, Richard.
And one woman I talked to just owns a burger place, place to go get hamburgers. She estimated she'd be closed until Tuesday. This is before we knew that the hurricane would hit later. She estimated $10,000, you know, just for her couple of days. But now you're probably going to have to tack on more money than that.
So small business owners are really going to feel the impact of this hurricane and also on a wider scope, economists say this storm is really going to be enough to reduce GDP this quarter. And you know what? That's kind of bad timing because the economy here in the U.S., it only grew at a 2 percent rate last quarter. We're not at full throttle. This hurricane could only make it worse in that respect, Richard.
QUEST: And in that regard, there's almost nothing that anyone can do about it, Alison.
KOSIK: Right.
QUEST: (Inaudible). All right. Many thanks.
Alison Kosik, who is in New York for us.
These are the pictures you've been seeing. (Inaudible) Maryland, (inaudible) say they are starting to mirror Hurricane Katrina -- after the break.
(COMMERCIAL BREAK)
QUEST: So the hurricane is just about arrived, and U.S. campaigning has been put largely on hold as Sandy bears down on the East Coast. Katrina's memories are strong and the candidates' handling, of course, could have a significant impact on the election outcome.
But besides just the election, at the moment, at this hour, the core of it all is how they have -- Ali Velshi is touring in the key swing state.
Ali, Ali, I can see you in the middle there. It looks pretty grim. Well, very grim, frankly.
ALI VELSHI, CNN HOST: Yes. Yes, it's pretty bad. I'm here in Atlantic City, New Jersey -- by the way, New Jersey's not considered a swing state, so I've taken a bit of a detour off the bus. (Inaudible) as you know, the election express. It can't handle winds like this, so we sent that to Ohio and I came over to Atlantic City.
Richard, right behind me, about 1 kilometer, as far as you can see on the camera, you can see these winds blowing up the water. There's a flashing light in the background. That's a police vehicle. That's the ocean. And the waves are crashing up there. We're at about 7 feet above sea level. The ocean's going to probably -- the surge is probably going to be about 91/2 feet over the next few hours.
You can see the winds gusting here. About half an hour ago, they were gusting about 90 mph. These gusts are significantly stronger now. So I wouldn't be surprised if it's over 100 mph gusts. There's nobody here (inaudible).
QUEST: Well, we're obviously having some --
VELSHI: (Inaudible) emergency or utilities.
QUEST: We're having some difficulty hearing Ali. But I think it's worth just staying with that picture of Ali Velshi.
Ali, if you can still hear me, I think the core we need to know, to understand from yourself is, as opposed -- there's nobody around except yourself. And everybody's waiting for this landfall in about two to three hours from now.
VELSHI: That's correct. The only people here are emergency workers, who are making sure there's nobody here and those utility workers who have to be here in order to get things back on track once the power goes out.
I'm quite certain you can't hear me very well because of all this wind. You can see this is about 100-mile-an-hour gust right now. There are not people wandering around for no particular reason anymore.
QUEST: All right.
VELSHI: You can't get out of here. If you haven't left already, you cannot get out. The road in has now flooded. So right now, if you're here, there are about 400-500 people who are in shelters in this county. But here in Atlantic City, at this point, police are making sure there's a travel ban that comes into effect --
QUEST: Ali?
VELSHI: -- 6:00 pm. So we've got 21/2 hours, and then there will be a curfew and a travel ban, Richard.
QUEST: Right. Ali Velshi, who is in Atlantic City.
Further down south, Maryland is being battered as well. Much of the Ocean City is flooded. The pier's been destroyed or is rumored to be. CNN's Sandra Endo is there.
And looks a little bit calmer than what we've seen when we were with Ali Velshi. Is that because you're in safer ground? Or the storms already moved a bit further up? Or is it the calm before the storm?
SANDRA ENDO, CNN CORRESPONDENT: Certainly no calm before the storm here, Richard. For 24 hours now we've just been getting hammered with pelting rain and severe wind gusts. And it's only getting worse. We've had to seek shelter to protect ourselves and the equipment. We are seeing wind gusts of up to 60 miles per hour here in Ocean City, Maryland.
And we just saw -- if you can take a look down below us, you can see (inaudible) for yourself that we just saw debris flying down the street. We presume it's part of a roof, Richard. That is the type of thing (inaudible).
QUEST: Right.
ENDO: Take a look at the ferocity of this storm and look at those waves. They're fierce, they are pounding the shoreline. We are seeing this beach erode in front of our eyes. All those wooden posts you see along the beach line, that used to be supports for a wooden (inaudible).
QUEST: We seem to be having -- not to worry -- not to worry. We seem to be having a few problems there. You get the idea of what is happening at the moment.
The story we've been following above, of course, on Manhattan, I want to show you this crane atop a luxury skyscraper again. While we're looking at that, I'm going to bring in Tom Sater.
Stay looking at this picture.
Tom, you can see this picture as well. Now, look, I'm not asking you -- you're not a construction expert any more than I am. But this is the sort of thing, bearing in mind what you told me earlier about how the winds on the northern and eastern side of this, this is the sort of thing we could see more of and could be very dangerous.
TOM SATER, AMS METEOROLOGIST: You know, this is a great picture to look at. I've got a graphic to help explain the difference in the wind strength from ground level and the higher in elevation you go in some of these high-rise buildings.
First of all, the radar, where Ali was in Atlantic City, it's just 80 kilometers away, so the brunt of the strongest winds, really, we don't want to focus on a center core, because they're over, you know, 16 kilometers wide. I mean, this is -- if this was a country, it would be the 20th largest country in the world. Snow's on the back edge.
But you were talking about the winds, take a look at this. And we're going to break this down for you, because ground level winds, let's say it's 120 kph, like where it is with Ali. The higher you go -- and these are, of course, apartment complexes and businesses, 30-story building, you're looking at 144 kph wind.
Those that live at 80-100 -- believe me, there are thousands of them - - the winds increase dramatically. So power outages, maybe broken-out windows. They're all elements that we're going to be talking about.
Now you asked, though, Richard, earlier about the crest in the storm surge. I went back into history. It was 1960 in Battery Park, Hurricane Donna, a 3.2-meter storm surge -- and we're expecting 3.5. So it gives you a little bit of an idea -- this is unprecedented. The pressure is lower than we've ever seen a storm -- watch this.
This little eye, as it moves in, you'll start to see the wind field weaken. And then the eye moves over Lake Erie, and it gets in the water, and the winds start to expand again. That's something we haven't seen. This is brand new. Could it continue to strengthen a little bit? We talked about the power outages and the economic loss.
Everything in red -- this is the path -- everything to the right, to the north, is where the winds are the strongest. But there are refineries, nuclear plants. There are power plants, not to mention the residents. And it wants to give us a $17.6 billion loss? Yesterday, it was a $2.3 billion. And that's an economic loss, Richard, only due to winds.
Most of your problems are inundation and then the flooding that occurs inland. And that's where we have the loss of life. So it's moving quickly, expect landfall most likely in about two hours. Again, but the size is so large, as it connects with the cold air, we're talking snow at a half a meter to a meter.
But when it banks to the right here, it's going to be a slow process. And this is where we're going to find, most likely, thousands of calls to emergency personnel. If you figure, well, there's a rescue, one rescue for every eight calls to emergency rescues, there could be well over a thousand water rescues.
So think about the tens of thousands of law enforcement and first responders that are going to be busy and working not only overtime, triple and, you know, on and on.
QUEST: To be clear, you say you've never seen anything quite like this?
SATER: Yes.
QUEST: And you've been doing this how long?
SATER: Oh, for 25 years or so.
QUEST: And you've really not seeing anything like this?
SATER: Not in any textbook, either.
QUEST: Tom, thank you.
We'll be back after the break. QUEST MEANS BUSINESS. Good evening.
(COMMERCIAL BREAK)
QUEST: This is a story that is told by its pictures and by the people who are affected. In this case, it is Maryland, the waves coming in, beating down on the shore, even before the hurricane has made landfall. As Tom said, the thousand kilometers for the wind field and the dramatic effect of already 400,000 people without power. And this thing hasn't even arrived.
Once it arrives, it continues to pound with rain and with wind and on its western side with snow. And it's likely to stay that way for several days as it loses -- finally loses steam.
So with a crane dangling over New York, with the beaches being beaten up over the Eastern Seaboard, and with New York City itself in the eye of what will be the most powerful storm in decades, this is CNN.
(COMMERCIAL BREAK)
QUEST: Finally, Hurricane Sandy's like no other storm. Look at the pictures. We're used to dramatic numbers on this program. You and I talk about them every night. Sandy is single-handedly shifting our perspective. The winds, 110 miles an hour; the insurance cost of it, billions of dollars; 300,000 people already without power. And all this before the storm's even made landfall.
Meanwhile, the presidential campaign blown off track. The president's in the Sit Room. Mitt Romney's campaign's on hold. The way this storm is handled by the authorities could be a factor in next week's poll.
For now, then, the priority is to keep everyone who happens to be in Sandy's (inaudible) way safe and secure. And that's QUEST MEANS BUSINESS for tonight, because the news never stops. Neither do we. This is CNN (inaudible).
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST: Hurricane Sandy, pounding the U.S. Eastern Seaboard; heavy flooding, destructive winds, (inaudible) 250 kilometers southeast of New York, around three to four hours from now.
In New York, a crane atop a skyscraper partially collapsed. Authorities have asked residents to evacuate immediately the lower floors.
The president scrapped campaign appearances, now in the White House as the storm picks up speed.
What other stories? Syria's holiday truce came and went with each side accusing the other of violating the temporary cease-fire. The latest example, a car bomb in Damascus, claiming at least 10 lives.
Now live to New York, "AMANPOUR."
END
