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Quest Means Business
Stock Market Sell-Off; US Markets Fall; Back to Business; Transitioning to Obama's Second Term; Protests in Greece; Euro Down, Pound Up; Eye on Namibia: Land Reform After Apartheid
Aired November 07, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUST, HOST: Coming up on this program on QUEST MEANS BUSINESS tonight, Draghi drops a bombshell. The Dow also falls sharply.
There are thousands on the march in Athens' parliamentary square as lawmakers prepare for a crucial cut.
And tonight on this program, I'll be speaking to Greece's Tourism Minister, the economist Ken Rogoff, and PIMCO's CEO, Mohamed El-Erian.
I'm Richard Quest from the CNN Center, where I mean business.
Good evening. It's a decisive election result in America, and that result, well, we thought we'd be talking about it a great deal, but it has actually given way to unrest in Europe and uncertainty on the markets.
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QUEST: That's the way the board looks at this hour. On the day after Barack Obama was reelected, the Dow has dropped by more than 300 points. It is now below 13,000. But here's the point. It's not the outcome of the election that has investors worried. It's something -- grim forecasts from Europe.
The markets had a dire afternoon. Look at that. Nearly 2 percent in Germany, 2 percent in Paris, 1.5 percent in London.
The European Commission today predicted rising unemployment and barely any growth for the eurozone in the next year. The ECB president, Mario Draghi, says Germany's starting to feel the effects of the weakness in the rest of the eurozone, and there's violence on the streets of Athens. We'll be speaking to a cabinet minister later this hour.
So, we need to get straight to the two issues, the core issues on the markets and in the financial world. Mohamed El-Erian is the co-chief exec of bond-trading company PIMCO. He joins me now from Newport. Good to see you, Mohamed, as always, to put some perspective.
Difficult to know where to begin, but we should start, I think, with the president and the reelection. What should be the number one item on his agenda besides pulling back from the fiscal cliff?
MOHAMED EL-ERIAN, CO-CEO, PIMCO: So, as you say, the number one item is really reaching out to Congress and leading them into a solution of the fiscal cliff. Otherwise, the US goes into recession.
If he does that -- and we think he can get a mini bargain -- not a grand bargain, Richard, a mini bargain. If he does that, then he can pivot to what is critical for this country, which is promoting growth, and there are a number of issues that he can do from the labor markets to the credit markets.
Number one, so --
QUEST: Right.
EL-ERIAN: Do no harm. Get rid of the fiscal cliff. And second, pivot to doing good.
QUEST: You're not expecting the US to go over the cliff.
EL-ERIAN: We're not, and maybe we are naive, but we think there's a 60 to 70 percent probability that our politicians will agree to a mini bargain.
But before people say wow, that's high, I always say, well, look at the inverse. That means there's a 30 to 40 percent chance that they don't, which is like me telling you, Richard, there's a 30 to 40 percent that I get into a big accident. Why don't you come with me in the car? You won't. I'm so --
QUEST: I -- I'm --
EL-ERIAIN: That --
QUEST: Yes, I was going to say, I wish we could talk about the long- term Obama strategy, but unfortunately, today is the day when the markets decided to fall out of bed over Draghi's comments. Stay where you are, Mohamed. I want to go to Alison Kosik at the New York Stock Exchange. Alison is with me. We'll be back with Mohamed in a minute to get some thoughts and some markets --
Alison, when we look at the markets, off over 300 points at one stage, are they really that concerned because Mario Draghi stated the obvious and says Germany's now being --
ALISON KOSIK, CNN CORRESPONDENT: Richard --
QUEST: -- as affected.
KOSIK: -- I cannot hear you, but I'm assuming you're throwing to me, and I want you to hear what Art Cashin has to say, because we were talking about the irony of today. We're seeing the Dow, Art, fall 260 points.
We saw something similar when President Obama was reelected, as well. Right after Election Day, the Dow dropped 5.3 percent, 468 points. Is this Wall Street telling us that they don't like this decision?
ART CASHIN, DIRECTOR OF NEW YORK STOCK EXCHANGE OPERATIONS, UBS: Well, I don't think that's quite the way, but it is highly ironic. Ordinarily, Election Day is a mild up day in the market, usually a half a percent, maybe three quarters of a percent.
But the first time Obama got elected, on Election Day, the market over traded. It was up significantly more than average, as it was yesterday on Election Day. And the day after in 2008, as you said, it dropped precipitously, just as it's doing today. So, we have to get these Obama elections figured out, but they keep repeating the same pattern.
KOSIK: What's going on here today in the markets? Are we seeing the sell-off because of what Mario Draghi said?
CASHIN: That's part of it. This is a kind of multiple impact. People are beginning to realize that the fiscal cliff is still there. Without Romney, the Republicans really don't have a titular head, not that he was the titular head, but whose function is it going to be? Is it John Boehner, or are they going to lager heads as they did before?
And the rumor mongers are out, even claiming that this kind of stress will force somebody to cut the ratings on US securities.
KOSIK: OK, Art Cashin, thanks so much. Richard, back to you.
QUEST: Alison Kosik, who's put the market point from the view of the traders. Mohamed El-Erian was listening to that and is still with us from PIMCO.
So, the market has got this vast variety of issues, including the Draghi comments that Germany is now feeling the effects. Give me the big picture.
EL-ERIAN: So, it is Germany that caused us to trade down this morning, and you can see it on the intraday. And somehow, the US market had forgotten about Europe, and this morning it woke up to not only Draghi's comments that Germany's weakening, but in addition, violence in the streets of Greece.
So, the markets suddenly remembered that Europe was still a problem. It shouldn't have forgotten, but it did. And then, we undid all the profits from yesterday, and then we started talking about political problems and the fiscal cliff.
So, we had a sell-off that fed on itself. But fundamentally, we must not forget that we are still living in a very uncertain global environment.
QUEST: I'd go further. I think you're perhaps -- you're perhaps being a little gentle. In your last answer, Mohamed, you have basically put on the table all the issues: fiscal cliff, deficit, long-term deficit, Germany's slowing down, Greece bailout, eurozone. We are no -- we may have been distracted by the election, but it's back to business and bad business is normal.
EL-ERIAN: Absolutely. I call it the Groundhog Day. Deja-vu all over again. Remember, central banks have been very good at kicking the can down the road. They have been providing a bridge -- not a destination, a bridge -- and somehow, the markets believed the journey was the destination.
And now, the market is starting to realize that until our politicians step up to their responsibilities, we're going to have these periodic concerns and sell-off and intense volatility.
QUEST: OK, I need to end on a fairly optimistic note or we'll both be running for the door before the day is out. Is President Obama -- is he now in a situation where he can move ever so slightly away from full-scale crisis management to actually advancing the agenda that he kept talking about that he'd not been able to do?
EL-ERIAN: I think he is, for the simple reason that Republicans are going to go through a fundamental soul-searching. They're going to wonder why is it that they lost an election that they believe they should have won.
And the reason is, because too many people see them as simply the party of "no." So I think Obama will be able to find a more responsive Republican Party, and we're going to be able to move forward.
QUEST: That's a -- always good to end on a more optimistic note, even though as -- there's not a lot of cause for optimism tonight, certainly with the situation in Greece. But good to see you, Mohamed. Thank you, as always. Just the man -- just the voice we needed to hear from this evening as we factor these factors in.
We have plenty more election coverage in this hour on QUEST MEANS BUSINESS. We'll explore the balance of power in Washington. We'll talk about the divided Congress that could define Obama's second term, and Ken Rogoff from Harvard University on the challenges of the next four years.
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QUEST: President Barack Obama still does not know if he's carried every swing state in this year's election. Florida is too close to call, even with 97 percent of the vote counted. But every other battleground state went the president's way, which was enough to give him the comfortable majority.
Mr. Obama will return to Washington from Chicago later this afternoon. When he gets there, awaiting his arrival at the White House will be our Jill Dougherty. She's already ahead of the president.
So -- there's no real transition. They have an official transition, don't they, because they have to do it? But there's no real transition. It's business as normal at the White House.
JILL DOUGHERTY, CNN WORLD AFFAIRS CORRESPONDENT: Yes, it is, Richard. I mean, look. He comes back to the same White House, to the same office, to the same desk, and to the same inbox of issues. And really, a lot of them are economic.
He comes back to this so-called fiscal cliff that we've been talking about, which is -- has implications not only for the United States but internationally for the United States.
And there is this theory out there that somehow both sides, Republicans and Democrats, will be more willing to work together because the Republicans might be, let's say, chastened or at least thinking about why they lost.
QUEST: Right.
DOUGHERTY: But that's not necessarily correct. There are other -- there's another narrative that says they might, some of them, who are, let's say, more conservative might blame their own candidate, Romney, for being too weak and not take any lesson from this election.
So, you never know how it's going to cut. We'll have to see what the message will be after these, let's say, olive branches have stopped being tossed over to each other.
(LAUGHTER)
QUEST: Lovely -- a lovely vision. The president, Harry Reid, and John Boehner tossing olive branches, which -- we'll leave it there on that particular note. Jill Dougherty at the White House.
Now, while the world focuses on the United States, we're seeing very grim pictures and protests on the streets of Athens today.
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QUEST: Those are obviously Molotov cocktails. And in return, you will see the teargas. It's the protesters venting their anger over the latest round of austerity measures, which Greek lawmakers are discussing now. Police say up to 70,000 people joined a peaceful demonstration in Syntagma Square. Many of those went home when the trouble began.
These are the pictures now outside. So, it's quiet, but one shouldn't mask the fact that the demonstrators have been cleared away. That's the parliament building. Inside, the crucial vote is set to take place in a matter of hours, and the politicians are debating the latest package of austerity measures worth around $17 billion.
Unions say it could have a devastating effect on people's lives. If it isn't, it could breach the fragile coalition and threaten the next bailout installment.
Olga Kefalogianni is Greece's Tourism Minister, and the minister joins me now from London. We'll talk later in the program on tourism matters, but we do need to talk about the very real issues of the further austerity package. That now it might or it might not pass parliament by a very small majority.
OLGA KEFALOGIANNI, GREEK TOURISM MINISTER: Well, the voting is tonight, and we are very confident that we will have the majority needed to pass the bailout package. And then we have another crucial vote on Sunday for the budget, the 2013 budget.
And this week's crucial vote will then lead us to actually be able to get the next tranche of the bailout package --
QUEST: Right.
KEFALOGIANNI: -- which is so important for the Greek economy right now.
QUEST: But you see -- the thing is, yes. So, the bailout package and you will get the extra time that's part of the agreement, or at least there'll be a minor extension of the time. But what do you believe will be the damage and harm, or at least the effect, of a further $17 billion in cuts over several years?
KEFALOGIANNI: Well, this government, the Greek government, is committed to bringing Greece back to its feet. First of all, we need to stabilize the political situation, and I think that this coalition government is already taking the necessary steps towards this.
Second, we need to secure the economy, and this bailout package will definitely help secure the economy. And of course --
QUEST: So tell me, how does it --
KEFALOGIANNI: -- safeguard social cohesion.
QUEST: How -- no. No, no, just a minute, Minister. How does it help you secure the economy? It certainly helps you secure the bailout cash. That much is clear. But in terms of the economy, there are people in Greece -- you know it much better than I do -- who say they cannot take any more.
KEFALOGIANNI: Well, the truth is that Greece -- the Greek government and Greeks -- have voted for remaining within the eurozone. And we definitely need to take all the necessary steps to ensure that Greece will remain within the eurozone and that we will have the necessary assistance from our partners in order to be able to get back to the path of growth.
Of course, we know that this is going to be a very difficult road, but I think that we are -- on a very good path to get back to our feet again.
QUEST: When all is said and done, and we'll talk more later in the program about the tourism aspects of this, the -- we keep coming back to this idea of when do you believe -- not you personally, but when does the government believe there will be a significant improvement in the economic position in Greece?
KEFALOGIANNI: I think that it's very important to get these bills passed by the parliament this week because this will definitely help us in receiving the tranche and recapitalizing the banks and bringing back liquidity to the market, which is essential right now.
Of course, you have to remember that we are also undertaking a lot of structural reforms and changes, which are necessary to secure the economic but also the political conditions in our country. And therefore, we are also working towards bringing growth back to our country. Tourism is one of those sectors that can actually help us go back to the path of growth and prosperity.
But we are interested in exploring all the possibilities of having investments in our country, privatizations, and I think that we are definitely committed in putting Greece back to the path of growth.
QUEST: We thank you very much, minister, we'll see you later in the program when we're going to be talking more about the -- the issues why you're in London, which is the WTM and the tourism industry. So, we'll talk about that later in the business traveler update.
Now, a Currency Conundrum.
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QUEST: Before the euro, the Greeks used the drachma. What does the ancient Greek word "drachma" actually mean? Is it something precious, a handful, or a piece? We'll have the answer later in the program.
The dollar gained against the euro. It buys roughly $1.27. But interestingly, if you look at sterling, sterling seems to have put on a bit of weight, $1.61. Those are the rates, this is the break.
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QUEST: We're focused on Namibia this week as we take a closer look at that country's economy and the industries that it is relying upon. It's located in the southwestern region of Africa, Namibia's home to the world's oldest desert.
On CNN's Eye On series, we take a look at its famous diamond mining industry, the big business of beer, and its German influences, and we explore how Namibia is trying to protect its fishing stocks while making the industry a source of work for its vast pool of unemployed.
So, today, we go down to the farm to see how black farmers as they look for their own piece of land. It's all part of post-apartheid Namibia.
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ROBYN CURNOW, CNN INTERNATIONAL CORRESPONDENT (voice-over): Driving onto her dusty farm in the Kalahari to check on her prize cattle, Clara Bohitile is the new face of Namibian farming. A trailblazer, but one rooted in African tradition.
CLARA BOHITILE, FARMER: In Namibia, cattle are important to most of us. Our grandmothers stay in the villages, our grandfathers, our aunts stay in the villages. They make a living out of their cattle. They raise their children from the money that they make from the cattle.
CURNOW: Under colonial and apartheid rule, the vast majority of productive land here was reserved for whites. Black people could only farm on a small scale in communal ares. But after independence in 1990, black land ownership was encouraged by affirmative action, favorable bank loans, and government support.
CURNOW (on camera): Land reform in southern Africa is a very emotive issue, but observers say that the process in Namibia is far-better managed than in neighboring South Africa and far less politically explosive than it is in Zimbabwe.
CURNOW (voice-over): Some would dispute that, pointing out that three quarters of farmland in Namibia is still in white hands.
BOHITILE: The percentage of black farmers is still very small, I should say. No, it is in comparison to the white families.
Because in most cases, the white farmers sell a second or a third farm. They sell cheap the first farm. But yes, indeed, we are entering that market where entering the commercial sector as black farmers. We go through a lot of training, we do practicals on farms and we just get wiser and wiser and we try to do the right thing.
CURNOW: But on a neighboring ranch, doing the right thing is proving difficult. It's a former white-owned farm, where eight black families are now trying to make a living. This man and his family have been on the farm since 2002.
NAFTALI KATJIUONGUA, FARMER: Well, we are making money, but the money we are making is just for our livestock. But it's not enough to help us with everything. This is very expensive. We need more help from the government.
CURNOW: And more training.
BOHITILE: It is just poor grazing management simply because probably they were not yet trained on how to manage their grazing. And so they are overgrazing the land. That is why it looks like that.
CURNOW: There's hope. Naftali and his family are now getting professional advice thanks to a program sponsored by German aid money and administered by the Namibian Agricultural Bank, a state-owned company.
KATJIUONGUA: And he was here just last week, so he told us, "How can we feed our cattle? How can we treat our goats and everything?" When he comes, there will be an exchange.
CURNOW: Especially as foreign markets open up to more imports of Namibian beef, which is renowned for its high quality. Already, the beef goes to South Africa, Norway, and the European Union. But Clara, who runs the largest meat exporting company in Namibia, wants greater access to supermarket shelves across the world.
But that won't help black farmers unless they get training and more land. The government recently announced a controversial plan to hike taxes to speed up land reform. The challenge for Namibia is to avoid what happened in Zimbabwe, to keep farming expertise and tap into new export markets while also addressing the thirst among black farmers for their own piece of land.
Robyn Curnow, CNN, Namibia.
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QUEST: For more information on our stories from Namibia this week, you can visit cnn.com/eyeon.
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QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in a moment. This is CNN, and on this network, you would expect the news to always come first.
The Dow Jones is heading for its biggest one-day loss of the year. It's currently set for a triple-digit fall. Investors are focusing on grim forecasts from Europe. The ECB president says Germany is starting to feel the effects of the eurozone crisis. The Dow is currently off more than 200 points.
Barack Obama is preparing to return to the White House having celebrated his election win at a victory rally in Chicago in the early hours of the morning. 303 electoral votes so far. Mitt Romney's claimed 206. Florida has still to report its final results.
There were protests and clashes with police in Athens tonight. Molotov cocktails are being met with teargas. Protesters are venting anger over the latest round of austerity measures. Greek MPs are due to vote on the bill worth about $17 billion in cuts in the next few hours.
Guatemala's president says he's heard reports of deaths after an earthquake off the country's coastline. Otto Perez Molina says 125,000 people are without power because of the 7.4 magnitude quake. He said homes and schools in western Guatemala have been destroyed.
China is poised to name its first new leader in a decade in less than an hour. Then Xi Jinping will be formerly endorsed as the party secretary, replacing President Hu Jintao. He's expected to face a growing calling for economic and political reform.
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QUEST: Barack Obama returns to Washington this afternoon. There is that solid mandate to lead the United States for four more years. Fareed Zakaria is at CNN in New York, and I suspect, Fareed, your voice is almost as hoarse as the rest of us, having been up all night, battling on through, as we saw the results.
But Fareed, what, for you, on the agenda, is the single biggest issue that the president needs to get to grips with now?
FAREED ZAKARIA, CNN HOST: Well, the most urgent issue, clearly, is dealing with the fiscal cliff, figuring out how to create some kind of deal in Washington that will prevent the United States from falling off this cliff. The metaphor is actually quite apt.
And the deal is pretty simple; it is, as the Republicans will accept some tax increases, there is a deal to be had. It would take the lines of something like Simpson-Bowles or some variation on it. The question is: will the Republicans play ball?
QUEST: So on that issue, neatly and nicely, bearing in mind they lost the election but substantially Congress remains exactly as it was. It is your gut feeling they are more likely to compromise and do a deal? Or will there -- will that element of stubbornness on either side remain?
ZAKARIA: I think there will be a deal. Let me put it in the passive voice, Richard. I think, you know, Churchill once said you can count on the United States to do the right thing after it has exhausted every other possibility.
We're currently in the exhausting every other possibility phase. Whether that comes because the Republicans decide to compromise or whether it happens because Obama allows the Bush tax cuts to expire, in a sense, forces their hand and they then come to the table, I think at the end of the day, the United States will have a deal.
QUEST: Does the president -- and you've interviewed him -- does the president -- we know he's frustrated at his inability to have advanced an economic agenda because of crisis management over the past four years, does he now, do you think, is he able to turn his attention to doing some of the things he wants to do?
ZAKARIA: Well, again, we get back to the question of the Republican Party. I think that he is going to try -- I hope he is going to try to push for something that we urgently need in the United States, which is a big, big plan to rebuild America, an American infrastructure plan.
Ten years ago we used to be fifth in the world, ranked fifth in the world in infrastructure. We're 25 now and dropping fast. So the question is will he be able to present this as a bipartisan opportunity? It will also have the effect, by the way, of boosting growth because unemployment in the construction industry is 12 percent, the highest in America.
QUEST: Care to suggest a time, finally, Fareed, when we will stop thinking about the Iowa caucuses?
(LAUGHTER)
ZAKARIA: Oh, I think it's already happened. Unfortunately, because of the way in which you have to raise money in this country, I guarantee you Paul Ryan is already, you know, setting up his mini PACs or super PACs or whatever you want to call them.
QUEST: Fareed Zakaria, good to have you on the program, as always, talking to us on QUEST MEANS BUSINESS.
Ken Rogoff is the former chief economist at the IMF, now professor of economics at Harvard. He joins me.
Ken, when we need to understand what's happening, we need you. Look, we've -- we have got -- we've got hell in a handbasket. The market's down 300-odd points because it's worried about Germany.
We've got a fiscal cliff that we're heading rapidly towards that somebody doesn't need to stop, and we've got a whole variety of deficits that nobody wants to deal with, with Greece still looking for an extra bailout.
KEN ROGOFF, PROFESSOR OF ECONOMICS, HARVARD UNIVERSITY: Well, I mean, I think the big picture's this didn't change much. I mean, we have the -- pretty much the same Congress. I do think it's significant that President Obama not only won the Electoral College but he won an overall majority of the vote.
But it's hard to know, you know, how will the Republican Party react; what kind of deals will they cut? They couldn't cut one before. I'm very skeptical that they'll think of what to do going forward before they hit this fiscal cliff. They don't agree. President Obama says not wants these tax cuts and they don't want tax hikes.
QUEST: They're going to have to do something, though, and isn't the big -- all right. There's two dangers. Firstly, they do nothing, which is the nuclear danger, where everything goes over.
But the other danger is they fudge and they fiddle. At some point the U.S. has to deal with its debt, structural deficit. They've had the pass card not to do it now. When do they deal with it?
ROGOFF: Boy, you know, I don't think they deal with it anytime soon. I think the U.S. also has to deal with this completely dysfunctional tax system and way of passing taxes. Will they deal with that? I don't think they're going to have a plan that will really bring the deficit down. I think at the very best, it will rise at the same rate.
QUEST: Germany is feeling the effects of the slowdown and the periphery crisis and the debt crisis -- shock! Horror! Hold the front pages! If you and I had said that, nobody would -- well, maybe if you'd said it, people would listen. If I'd said it, nobody would pay any attention.
Mario Draghi says it and the market falls 300 points.
ROGOFF: Yes, well, I mean, they're clearly in the birth of a nation here in Europe. I don't think it's all about Germany. I think it's also about France. I mean, you need to have a stronger central government in Europe. And France is very, very reluctant to let go.
France is very reluctant, you know, to make its government leaner and more efficient. So it's -- this isn't all about Germany. The short run, it's Germany, but over the longer term it's just as much France.
QUEST: And yet in Europe, because let's talk about Europe, we've got the LMT that's in place, ready to start; we've got the ESM that's in place, ready to start. The troika has just about agreed with Greece. Rajoy in Spain says he's still thinking; he hasn't written off going for a bailout plan.
Is there no reason that you think we should be optimistic on the Eurozone?
ROGOFF: Written off is the big word. I don't think these debts are going to get paid in full. And it's not just Greece; Spain, even some of the darlings like Ireland, if you're talking about the senior bank debt, I don't think this is over until there's been a big restructuring of these debts.
You just can't be in a recession forever. So we're nowhere near the end game. They're inching towards it. Draghi is giving them liquidity, but it's not solving the solvency problem.
QUEST: You're right, Ken, and we have to have another crisis, Lord help us, before we would get those big write-offs that you're talking about, because write-offs only come when we're about to go into Armageddon.
ROGOFF: Yes, I mean, that's why I think it probably will get worse before it gets better because the -- a lot of the big decisions, they're trying to just do a little bit to inch along, because their voters aren't there; they haven't led them there. And of course, Germany has an election coming up towards the end of next year.
QUEST: Well, not exactly the most optimistic forecast for the next 12 months, but is a -- it's a realistic one. And as always, Ken, we thank you for joining us, helping us understand.
Ken Rogoff, putting it into common sense and understanding what we need to know.
When we come back, we've already spoken to Greece's tourism minister about the state of urgency. Now we're going to talk about actually what's she's in London talking about: how do you get -- how do you get holiday makers when, frankly, your economy is in a depressed state of affairs?
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QUEST: And Jenny Harrison, we've got another storm that kicking the U.S. Eastern Seaboard. Jenny with us as well.
JENNY HARRISON, CNN METEOROLOGIST: And well, Richard, it's the big storm; this one is known, of course, as the nor'easter.
This is it, been working its way up the northeast coast in the last few hours, already the snow beginning to accumulate, the rain showers along the coast, some pretty strong gusty winds. I'll have all the latest on this and what you can expect, what it might do to your travel plans in a few minutes from now, so stay with us.
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QUEST: On our "Business Traveller" today, we'll also take a look at the tourism industry, the turmoil in Greece that's hitting the industry hard. The Greek tourism minister Olga Kefelogianni is on a mission to restore her country's reputation amongst the world's top holiday destinations. She's starting in London.
It's WTM in London, the World Travel Mart. The minister's with me again, this time, Minister, we do need to talk about -- all right, we know the numbers have been down and we know that some of its prices have come down as well.
So the core issue is what can you do -- and this is not a reflection on the excellent product or the weather or the enjoyable times that people may have in your country. What can you do to stimulate demand?
OLGA KEFELOGIANNI, GREEK TOURISM MINISTER: Well, first of all, let me just start by saying that tourism has shown to be very resilient sector through the crisis and through the recession, and actually numbers are not down.
Numbers are up in terms of arrivals. 2012 is not over yet, because we're still receiving visitors. So I'm not able to give you the exact figures but the trend has shown that despite us beginning with a slow turn, we ended up having so many people visiting our country.
And the most important is that the message they had to convey after visiting our country was a very positive one. So this is important. You know, word of mouth, people coming to Greece and having the best time ever and being able to share this with their friends and families.
QUEST: Well, you say --
KEFELOGIANNI: On the other --
QUEST: -- I know. (Inaudible). I mean, you say the numbers are up, but you know as well as I do that's a certain sophistry with the numbers. The fact of the matter is, the spend, the total numbers, the arrivals, in some cases, but the long -- the expensive spend tourism numbers are under pressure.
KEFELOGIANNI: OK, well, what is important, first of all, for the traveler is to know that Greece provides great value for money. And I think that this was the case for this year and it shows that this will be the case for 2013.
What I'm saying is that tourism is definitely a success storm for Greece and it's important, you know, to showcase not just the grim side of the problems that you're having, but also the positive side.
QUEST: Right, but what I need to hear from you --
KEFELOGIANNI: -- put a positive sector --
QUEST: -- what I need to hear from you, minister, is, though, how do you encourage people when they see on the screens -- and I know Athens is a long way from the islands, but they see on the screens the sort of pictures we're seeing tonight of violence.
They hear about the depressed environment and how people are suffering. Who wants to go on vacation in a place where there's 25 percent unemployment? And what I need from you to explain is what's your strategy for, if you like, countering that image?
KEFELOGIANNI: OK, first of all, we definitely have a very concrete strategy about where we want tourism to go and we are aiming very high, because we have seen that tourism can actually help us in this path of growth that we want Greece to be following. But it's also important just to say that there were millions of people who visited our country this year and had no bad experience.
They actually had a very good experience and the feedback from the market is very positive. And this is something that I was -- I have been having as feedback from the WTM, the World Travel Market, where I participated these days.
But I think that you should always see the exaggerated part of what is shown on our screens, because these are demonstrations; we can all understand that a society going through these sacrifices may have such reactions.
But I wanted to come back to Athens tomorrow. I want you to show sunshine Athens, the Acropolis museum, the Parthenon and I want you to show that visitors in Athens have a great time, not only in the islands to (inaudible) tourist destinations.
QUEST: Minister, always -- unfortunately, my recent visits to Greece have been for other reasons. But on the holiday visits that I've had, I've always enjoyed it thoroughly. Thank you very much indeed; the warm welcome that one always does get --
KEFELOGIANNI: Thank you, (inaudible).
QUEST: -- it's good to have you on the program and thank you on what's been a busy day for you and for your country.
When we come back, New York is bracing for another storm. Schools are closed, flights have been canceled. We'll have an update for you after the break. Jenny Harrison has her work cut out for her. (Inaudible).
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QUEST (voice-over): The "Conundrum" and the answer: the drachma was the currency used in Greece before it switched to the euro. We asked you what does it mean in ancient Greek. I should have asked the minister.
Perhaps not.
It means literally -- a drachma, a handful. That is B, is the answer.
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QUEST: Despite Barack Obama's convincing victory, the two chambers of Congress are still divided, one in Republican hands, the other in Democrats.
Jon Mann is with me to discuss this.
If we are in the situation that we are, we are no different to the situation that we were.
JONATHAN MANN, CNN CORRESPONDENT: Six billion dollars later, $6 billion in election spending, the most expensive election in U.S. history and, in fact, you're absolutely right. There was a Democrat in the White House; we know today there will be a Democrat in the White House for the next four years.
In the House of Representatives, you alluded to it, there was a strong majority held by the Republicans -- 435 seats. There were some gains. There were some pickups. But the bottom line is 233 seats are still held by Republicans. Have a look; it is a healthy majority. The Republicans hope to make it dramatically bigger, but the massive gains that we saw two years ago weren't repeated.
In the Senate, which is really the symbol of paralysis in Washington because the Democrats had a small majority, but not enough to control the Senate under its own rules, where a 60 percent majority is needed for any serious work, 100 seats; the Democrats now have 53 of those seats. The Republicans have 45. The balance of power hasn't really changed.
And so you're talking about $6 billion? How does $6 billion get spent and do nothing? Let's give you an indication from the U.S. Senate. A very closely fought race, perhaps the most expensive Senate race in U.S. history was culminated yesterday. It could have been the race for the presidency of a large-size European country.
Elizabeth Warren and Scott Brown fought it out for what was traditionally a safe Democratic seat. Scott Brown held it for two years. The Republicans wrestled it away from the Democrats two years ago after the death of iconic Senator Edward Kennedy. Brown held it; Warren wanted it back for the Democrats.
And you know what, Richard, they spent $68 million getting a safe Democratic seat Democratic once again. That's why elections cost $6 billion; this is why things don't change.
QUEST: OK. Let's go -- and we can move back to your Senate and your House maps. If you're right, which you are on the numbers, and look at those numbers, why should we have any confidence that the future ability of president and Congress to do a deal will be any different in the future if the numbers are the same?
MANN: You know, there's as strong an argument for skepticism as there is for confidence. Flip a coin. I don't particularly have any great confidence. The one thing about the United States -- and I'm not the first person to say it; it was first said centuries ago -- is that the United States will always do the right thing after it's exhausted every other possibility.
If the crisis is imminent enough and the pain seems real, lawmakers and the executive branch will come to some kind of agreement only because the alternative is unthinkable. As long as the alternative is not unthinkable, the alternative will probably be pursued.
QUEST: You're in excellent company, Jon Mann. It was Winston Churchill.
MANN: Indeed it was.
QUEST: And we've had it quoted once already on this program.
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MANN: Worth remembering on a daily basis when you consider American domestic affairs or international relations.
QUEST: Many thanks indeed.
If you wondered why it's all so serious, look at this number from today. This is the Dow Jones industrials and where we stand at the moment. We are off 283 points, well off the lows of the day, under 13,000.
You can perm any one of five or six reasons why, primarily Draghi on Germany, fiscal cliff in the United States, gridlock government, Greece bailout -- it's all giving a spout of indigestion to the markets. We will have Jenny Harrison after the break. Beg pardon; not after the break. Jenny Harrison is next. Do forgive me, Ms. Harrison.
HARRISON: Oh, Richard, it's quite all right. I forgive you, always.
You know what, I wish I had some better news, but I don't think I've got any good news, either, to add to all of that. It is, of course, all about this nor'easter been working its way across into the northeast or affecting the northeast, I should really say, in the last few hours. The actual center of the system is offshore, but it's been producing the rain and also the snow.
And have a look at this, because we're talking about some fairly significant snow. We might have some records broken before the day is done. We're not talking historic snowfall, but enough that it'll certainly really coat things quite properly. But this is the storm system. So continue to push out towards the northeast throughout Thursday.
The winds are the concern, of course, as well as the fact it's so very cold. But these winds, that does mean that we could actually see -- in fact, there's a picture for you -- that's actually snow; looks a little -- well, you can see it just about coming down. But in actual fact here it's not really settling. It's very wet.
And so a lot of this is just melting once it makes contact with the ground. But of course the concern with the winds in this particular region is that it could once again bring down some power. And also we have got so many buildings and so much damage up there that it could actually just cause a problem again.
When it comes to the storm surge, not such a big concern as last time, certainly a week ago, because the actual tides are very low at the moment. So even if we get some storm surge with this system, not really an issue. But it's far enough offshore. But this is what I mean about the rain, the snow, also these are the winds, so pretty breezy up there in Boston right now.
Now how about travel? Well you can see that Philadelphia, San Francisco, actually posting some ground delays.
However, it's not quite that straightforward as you know. So far, over 600 flights have been canceled; in particular Philadelphia's impacted but also the three airports in New York: Newark, LaGuardia and JFK. So it's caused a lot of the airlines as well. So the usual thing, the Port Authority, of course, control the airports; they are saying be sure to check ahead if you're not sure already.
Now this is the current temperatures with the wind factored i. So it feels like -2 in New York, but I have got some good news -- finally, I do, because once all this is done -- and this is what I mean about (inaudible) amount of snow, look at that, just over 6 centimeters in New York, Boston about 6.5 centimeters. So this is a lot.
We don't usually see this much this time of the year, but there are some warnings in place. We've got coastal flood watches out. At the same time, we've got wind watches. We could have some pretty high gusts in there.
And we have got warnings for the snow. But the good news is that temperatures are really set to improve as we head into the weekend. And that means, Richard, we could actually have temperatures towards the end of the week -- Friday, Saturday -- around 20-21 degrees.
And the most important thing, the overnight temperatures above average, back up into double figures. So that is some good news in the wake of everything that has impacted the northeast of the U.S. --
QUEST: Guess where I was supposed to fly to tomorrow morning from the CNN Center in Atlanta?
HARRISON: It's not hard to guess, is it? I think we probably know that this is all coinciding with your two planned trips. So, yes, you're heading up to New York.
QUEST: I was, by flight. I'm not. Instead, I fell in love with the train; I'm taking Amtrak, 18 hours from Atlanta to New York.
HARRISON: Yes, well, good luck with that. I'll look forward to hearing all about it. Not sure -- yes, let me know what the train's like compared to the Zephyr that you were on.
QUEST: Thank you very much. Jenny Harrison.
Now I'll have a "Profitable Moment" after the break.
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QUEST: Tonight's "Profitable Moment": confident, statesmanlike and always presidential, the president made looking winning relatively easy right up to the end. In no doubt, though, this was a victory against the odds. He snatched success out of the economic storm of high unemployment, shaky stock markets and that weak recovery.
After four years, he knows what's coming next, already a storm is brewing. Whether it's snow and storm or turbulence from Europe, whether or indeed the fiscal cliff. In the midst of it all, he has just weeks left to make a deal to prevent America from being blown over that cliff. There's no question: this battle was won, but the fight is only just beginning.
And if you have any doubt about the significance, look at the market. Just on the day of victory, down 265 points. I promise you this: the election may be over, but the issues behind it are far from being dealt with.
And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest at the CNN Center. Whatever you're up to in the hours ahead, I hope it's profitable.
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QUEST (voice-over): The news headlines for you at this hour: the Dow is heading for its biggest one-day loss of the year, currently set for triple-digit loss; investors are focusing on grim forecasts from Europe. The ECB president says Germany is feeling the effects of the Eurozone debt crisis.
The president Barack Obama is preparing to return to the White House. This is how he celebrated his win. He cemented his second term with 303 electoral votes so far. His rival, Republican Mitt Romney claimed 206. Florida still to report.
Fire and fury in Athens as protesters clash with police. Molotov cocktails were met with tear gas as protesters vented their anger over the latest round of austerity measures. Greek MPs are due to vote on the bill which is worth around $17 billion within hours.
Guatemala's president says he's heard reports of deaths after an earthquake off the country's coastline. President Otto Perez-Molina says 125,000 people are without power because of the 7.4 magnitude quake. He said homes and scores in the west of the country have been destroyed.
You are up to date with the news headlines at this hour. Now we go live to New York and "AMANPOUR."
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