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Quest Means Business
France Train Derailment; Heathrow Dreamliner Fire; Big Bank Profits; Wall Street Earnings; US Markets Higher; Dollar Up; Fitch Downgrades France; US-EU Trade Talks
Aired July 12, 2013 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: At least seven people are killed as a train derails outside Paris. We will bring you an update from the French capital in just one moment.
Heathrow Airport reopens its runways after a fire aboard a Boeing Dreamliner.
And the banks beat the Street. JPMorgan and Wells Fargo both report strong quarterly numbers.
It is a Friday. I'm Richard Quest, and I mean business.
Good evening. We will, of course, have a roundup of the business news in a few moments. Before we go a moment further, you need to be brought up to date with the events in northern France, where an intercity commuter train has derailed south of the capital, Paris. At least seven people have been killed, dozens more injured, according to the French Interior Minister.
The train was on its way from Paris to Limoges with about 370 people onboard when it came off the tracks at Bretigny-sur-Orge. It wasn't scheduled to stop at that station. Emergency crews are now on the scene. The priority at the moment is to help passengers. The cause of the accident is still far from clear.
Let's get to TV3's Christian Malard, who's monitoring developments in Paris. Christian, appalling pictures, a horrific incident. What more do we know, both in terms of fatalities and injuries?
CHRISTIAN MALARD, JOURNALIST, FRANCE 3 TV (via telephone): Well, what we -- Richard, what we can confirm now, as you said, was in this train we had 370 persons taking an intercity train which left Paris at 11:40 Eastern Time in the US and heading for Limoges in the center of France.
And the derail -- there were six wagons which derailed in Bretigny- sur-Orge, which is in a very packed, crowded area of the suburbs of Paris, the southern suburbs of Paris, close to the highway leading to the French Riviera on highway number six.
So, as you said, the Secretary of Interior, Mr. Valls, confirmed we have seven to eight dead people, casualties, but when I just heard a few minutes ago, the chairman of the French railroad service, Mr. Pepy, said we have to be very cautious on the number of casualties. We might get more. Concerning the reasons of the derailment --
QUEST: Right.
MALARD: -- now everybody's very cautious. Some --
QUEST: Sure. Let me -- let me jump in here. Let me just jump in here, Christian, because I just want to question you. This will take weeks, no doubt, before a formal reason is given for this, but give me an idea.
A Friday evening, an intercity train heading towards the south of France, going through the middle of the country. The -- this is the sort of -- I mean, it would have been a very crowded evening --
MALARD: Oh, yes.
QUEST: -- particularly as we come to the middle of July and the start of --
MALARD: You are right.
QUEST: -- the start of the holidays.
MALARD: You are right, Richard. You are totally right, Richard. We are in the midst of July on the even of the 14th of July, which is the Bastille Day, the national day in France. A lot of French people are leaving for vacation, taking this part of the village road on the way to the south.
But this intercity train, as I said, was not heading for the south, where a lot of people -- a lot of French people go for vacation, it was going to the center of France.
But still, what I wanted to tell you is, there are three investigations right now, and as you said, it might take time. We have the Secretary of Transportation, which is investigating, Secretary of Justice, and French Railroad Service.
But the detail I wanted to give to you: according to some rumors, or let's say allegations, it seems this part where we got the derailment, it was on repair, and it seems that the train -- and I'm very cautious -- might have gone too quick, too fast, not respecting the speed which was limited in this area.
It might be -- I just say might be -- one of the reasons provoking the derailment. We are not sure. Probably it will take time, as you say, Richard. And I know what I can confirm to you is that the French president, French President Hollande, is going to arrive on the spot of the tragedy in the next coming five to ten minutes, as we have been told.
QUEST: The French railways, of course, more than any other -- well, maybe not more than any. Of all the major European countries, the French railways, the SNCF, the Vitesse, they're very much the backbone of the infrastructure for travel in France. Huge amounts of money's been spent on French railways, and that's very much -- high-speed rail is the way to get around the country, correct?
MALARD: Well, we have the famous TGV, as you know, Richard, which is very modern. It has been part of the modernization of the French railway system, no doubt about that.
But I must admit that with Great Britain, the French railway system has been very criticized during the last few years, and a lot of people working inside the French railroad company, SNCF, have been recently complaining about a kind of deterioration of the material of the rail system.
So, you've got linked, connected with what happened tonight on Bretigny-sur-Orge. It's too early to say, of course. But I know that inside the railway system, the French SNCF, a lot of people, Richard, have been complaining that it has been deteriorating and we should have modern railing.
QUEST: Christian Malard from TV 3. Always good to have your perspective on this. We'll come and talk to you again --
MALARD: Thank you, Richard.
QUEST: -- later. Please come back.
MALARD: Thank you.
QUEST: As soon as -- Christian, if Francois Hollande says anything when he visits there, then we'll need you, of course, to help us understand the significance. But good to talk to you, Christian.
MALARD: All right.
QUEST: Many thanks, indeed. Christian Malard.
MALARD: Thanks, Richard.
QUEST: There -- in the last couple of hours, there was another major breaking news story. It was a Boeing 787 Dreamliner, which -- I mean, there's no other way to say -- it caught fire at Heathrow Airport. No one was onboard. The fire broke out inside the aircraft. It was parked and empty at the time.
Heathrow's firefighters doused the jet with foam and both of the airport runways were closed earlier in the afternoon as a precaution. There were delays to both arriving and departing traffic. Both runways are now open.
Now, join me over at the super screen, and we can put this into a little bit of perspective. The incident happened late in the afternoon, so we really don't know much more than what happened. We know it's a Dreamliner, a 787, Ethiopian, one of the first airlines in the world to actually have the 787, and also the first one to actually put the aircraft back into the air.
The aircraft -- what we are seeing now has been some scorch marks just about here on the plane. The significance of those scorch marks, no one can say. But it also leaves out -- because most of the foam is on the right side of the aircraft as well, where the firefighters, of course, have been -- have put out the fire.
We know that the plane was empty and we know -- and we know that, of course, because it had arrived from Addis Ababa early this morning and it wasn't due to return to Addis in Ethiopia until just about two hours from now.
Ethiopian has confirmed the incident. The NTSB of the United States is sending over a representative to assist in the investigation.
It all comes at a critical time for Boeing, which had been battling to restore confidence in the Dreamliner. The plane has had battery issues, which led to it being -- which led to a suspension in flying.
As you can see, Boeing share price was down around 4 percent. An hour ago, it was off some 7 percent. The company tonight issues a brief statement saying that they are aware of the event and that we have Boeing personnel -- "We are aware of the event, we have Boeing personnel on the ground at Heathrow and are working to fully understand and address this issue."
As I say, the NTSB, which is now not only investigating the San Francisco crash, there's an Alaskan crash, and now there is this, where they'll be sending an accrediting representative to London to assist in the investigation. A busy day one way and another as we continue our look at what's been happening.
In the United States, the earning season has roared into life. And here's the point: the results that we're seeing come at the same time as the stock market is rising -- has risen to record heights. We'll put it into context.
(RINGS BELL)
QUEST: It's QUEST MEANS BUSINESS, it's after the break.
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QUEST: So, the US earning season is underway, and two of the US biggest banks have done better than expected. Let's start with JPMorgan Chase. The profit surged in the second quarter, up 31 percent. Now, that exceeded expectations. Forget all the criticisms of JPMorgan, with the London Whale and the trading and the losses.
The bank itself is perceived to be on firm footing, but perhaps this number does need to be taken with a tinge of caution, because bank loans fell slightly, and the profits came from accounting entries rather than strong growth in business. Even so, JPMorgan is still believed, under Jamie Dimon's leadership, to be strong.
Wells Fargo, of course, is a very fast-growing bank and reported record quarterly net income, shaking off the recent slowdown. Profits up 19 percent to $5.5 billion for the quarter to July, around a fifth up on the previous year.
Overall, it marks a positive season, a positive beginning to the Wall Street reporting earnings season. Maggie Lake is with me, joins me now. Maggie, when the banks are making money and are not taking charges against bad loans --
MAGGIE LAKE, CNN INTERNATIONAL BUSINESS CORRESPONDENT: Yes.
QUEST: -- we should be saying hurrah, should we?
LAKE: Yes, Richard. And also, when you're looking at the stock market, if you think we can continue to rally, if we're going to see another leg of this bull market, you've got to have financials participating. Can't do without them. So, that's why we focus so much on this sector.
Some of the people who closely follow the banks have a little bit of issue with the fact that some of this was from lower loan reserves, sort of moving the money around a little bit.
But listen, I think there was a lot of fear heading into these earnings because people were very concerned that the rise in interest rates we've seen here in the US was really going to start to hit housing, which has been a source of strength, and then the economy. So, we were really looking to see what the banks said.
And according to JPMorgan and Wells Fargo, it's not hurting, at least not that much yet. In the case of JPMorgan, they did see mortgage business, lower refinancing because of that rise in rate, but they were able to make it up with much better trading activity.
That was a real surprise. They had strength there. In the case of Wells Fargo, very big in the housing market. Again, it did have an impact on refinancing, but they did grow their loans, and they saw strength in things like auto sales, which have been very strong, credit cards, commercial. So, overall, that made analysts feel a little bit more settled.
And very importantly, this is always about what they say about the future, and have a listen to Jamie Dimon.
(BEGIN VIDEO CLIP)
JAMIE DIMON, CHAIRMAN, PRESIDENT, AND CEO, JPMORGAN CHASE AND COMPANY: I think we just have a moderate recovery, but I personally -- our view at JPMorgan is that it's actually strengthening, it's very broad based, there's almost no sector -- large company, middle market companies, small business, consumers, housing -- there's nothing that's not going to look better.
So, if we're a little lucky and we get a little back wind next year from the fiscal -- on the fiscal side, you may see stronger growth in America.
(END VIDEO CLIP)
LAKE: Now, that was Jamie Dimon talking on CNBC earlier today. Jamie Dimon, he says it like it is, he lays it on the line, Richard, so he sounds pretty optimistic. And so, even though the market is down a little bit today and those shares aren't taking off, I think people looked at that and said, hey, maybe this isn't going to be as bad as we thought.
QUEST: There's something going on in the US economy at the moment, isn't there? There's a strength there that we are not seeing anywhere else, really. I mean, yes, the fiscal issues, the sequester may be having a drag and the Fed talked about it, but Jamie Dimon makes a strong point in what he just said.
LAKE: He does. And I'm going to tell you two things, Richard. I spoke to a trader today who said, listen, we think we have a long enough runway domestically here in the US that these companies can grow profits even if Europe and China are weak, which is interesting.
And the other theme, I think, we're going to see here related to that come out of earnings -- because you and I always try to widen it out and look for the big theme of an earnings season -- I think it's going to be companies that are exposed domestically to the US economy, are going to do well, maybe better than expected --
QUEST: Interesting.
LAKE: -- those multinationals who are really leveraged toward that emerging market growth, they may struggle a little bit.
QUEST: Maggie Lake's in New York. Thank you, Maggie, for the wider picture on the economic front. Alison Kosik is at the New York Stock Exchange. Record territory -- I hate that phrase. The market closed at -- it's a high -- it's a meaningless phrase. The market closed at a record. There, let's put it in plain --
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: But wait, hold on. Why is it a meaningless phrase? You saw the Dow, you saw the S&P reach fresh record highs --
QUEST: Yes. No --
KOSIK: -- so what's meaningless about that?
QUEST: No, no, no. I just hate the word "territory."
KOSIK: And yesterday.
QUEST: I just hate the word "territory," when people say "it closed in record territory," as if there was anywhere else for it to --
KOSIK: Oh.
QUEST: That's all I was saying. No, no, not the -- no --
(LAUGHTER)
QUEST: -- far from meaningless that it closed at a record. Absolutely. Tell me about it.
KOSIK: Yes, it's a -- we're not seeing stocks make it beyond that record territory, as you don't like to call it. Although I'm looking at the Dow, the Dow is still over its record from May 28th.
I think what you're seeing are the bulls taking a breather after the big run-up yesterday after Fed chairman Ben Bernanke kind of calming the markets, letting everybody know, look, the stimulus isn't going to come to a sudden halt, that it's -- the spigot's going to keep on flowing.
And I brought in here managing director of Albert Fried and Company, Ben Willis, to talk more about this. We're seeing these new record highs for the Dow, for the S&P 500. Does the market really have more room to run when you look at how second quarter earnings season is kind of taking off?
WILLIS: Absolutely, it has. And I think the second quarter earnings season is probably being a little overplayed right now. During the days when each company reports their earnings, you'll have a market of stocks.
But that was early on in the session when the bank stocks carried the markets and the futures a little bit higher, but the -- right now you have JPMorgan, Bank of America, all the money center banks trading higher, but the major indices are all trading lower.
So, I think the real way to look at the market right now is in a much larger stock market in the terms of the major indices hitting record territories, and they will continue to do that.
We may see some minor pullbacks, but there is too much money on the sidelines right now ready to come into the US equity market to buy on any kind of weakness and pullbacks that we've been seeing. The pullbacks have been very minor and short-lived. I would like to see stronger pullbacks, quite frankly, but we're not seeing them.
KOSIK: But these aren't numbers that we're seeing in these indices, these aren't numbers -- that we're seeing these record numbers. They're not really based on fundamentals, are they? And not even based on earnings season so far. Take JPMorgan, take Wells Fargo, case in point. These weren't stellar earnings.
WILLIS: Correct. And -- but again, the second quarter traditionally is the one of -- if not the weakest quarter of earnings for most of the major reporting companies. So, that has to be taken with a grain of salt.
The overriding factor in the investment world today, whether it's stock or bonds, the central banks are ruling the roost in the marketplace. We had the markets correct themselves when Ben Bernanke explained to the world that tapering is not tightening, as if we need an explanation, but the stock market told you we did need one.
So, that's what we're seeing. So, you have to keep an eye on the bigger money flows. So, while we'd like to see, as Maggie said, the financials need to lead, they really don't. This market started on the way up earlier in the year being led by more defensive issues. The utilities, for example, traditionally not a great leader of the market, but they did, in fact, lead.
The money we're seeing move around now at Albert Fried is mother that's being for higher, better science --
QUEST: Ben.
WILLIS: -- in the technology sector. Yes?
QUEST: Ben, let me jump in here. As we come to the end of the week and we try and put all the strands together, who are you -- who are you listening to most? Are you listening to the FOMC?
WILLIS: Ben Bernanke.
QUEST: I was going to say or are you listening to Ben?
WILLIS: Yes, absolutely.
QUEST: And are you optimistic?
WILLIS: I -- I think that the voices that need to be heard are all the central bankers throughout the world, and that chorus is being directed by Ben Bernanke. So, you have -- what he has -- the commentary he makes, when you hear from him next week, he'll stand in front of Congress, where our clowns --
I mean, Congress listens to what they -- what he has to say and try and figure out what the professor in a school they couldn't get into is going to tell them about the economy. But you'll also hear commentary from the ECB. Keep a very close ear out for whatever comes out of China.
QUEST: Right.
WILLIS: China moves this market when they sneeze. That's what you have to watch.
QUEST: We'll watch it closely, and I'm declaring QUEST MEANS BUSINESS a "territory" free zone. There will be fines --
(LAUGHTER)
QUEST: -- fines for the charity box for everybody if they have any more "record territory." Good to see you both.
(RINGS BELL)
QUEST: Have a lovely weekend. Tonight's Currency Conundrum for you. Singapore Central Bank is warning people to avoid doing what to one of its $1 coins? Swallowing them, damaging them, or copying them? The answer later in the program.
As for the currencies, the dollar is up against the pound, euro, and the yen. Those are the rates --
(RINGS BELL)
QUEST: -- this is the break.
(COMMERCIAL BREAK)
QUEST: France is getting deeper into debt than expected, according to the ratings agency Fitch. It cut France's issue and default rating. That's meant to reflect how likely a country is to default. It moves down a notch from AAA to AA+. The outlook remains stable.
Fitch says French government debt will peak above 96 percent of GDP. Debt's set to look for a long, slow decline. Fitch, of course, was the -- amongst the latest or the last of the agencies to downgrade France.
Round one of the multitrillion-dollar between the US and EU have come to an end. The talks began in Washington earlier this week. They closed in the last few hours, and both sides admitted hard bargaining ahead to reach a deal by the goal date of late next year.
(BEGIN VIDEO CLIP)
IGNACIO GARCIA-BERCERO, CHIEF NEGOTIATOR, EUROPEAN UNION: We have set out our approaches, and in many areas, our ambitions. We have identified certain areas of convergence across various components of the negotiation.
And in areas of divergence we have begun to explore how such divergences can be reconciled. In short, we have paved the way for a substantive second round of negotiations in Brussels.
DANIEL MULLANEY, CHIEF NEGOTIATOR, UNITED STATES: So, we're going to move quickly, but we're also going to move carefully. It's important to us that we arrive at a deal quickly, but it's also even more important that we get the agreement right.
GARCIA-BERCERO: I fully agree with what Daniel just said.
(END VIDEO CLIP)
QUEST: So, Robert Shapiro is a former US undersecretary of commerce for economic affairs in the Clinton administration. Joins me now live from Washington.
Robert, you know as well as I do, all they were doing on this meeting, they were learning where the coffee machine was and learning how to shake hands with each other and look into each other's eyes. This is the foreplay, if you like, before they actually get down to business.
ROBERT SHAPIRO, FORMER US UNDERSECRETARY OF COMMERCE: Well, it is the foreplay, but I think the most important thing we know at this moment is that among most of the players, at least, there is the political will that this succeed. And that's the single most important element in any trade negotiations. Do both sides, in fact, want an agreement?
And there's a lot of basis for agreement here. It is a genuine win- win in different ways. The United States has certain advantages -- labor costs, energy costs. So, to get into the European market would be very attractive.
QUEST: OK, now, let's --
SHAPIRO: And there's --
QUEST: I just want to pause you for a second, because I want you to listen to what Dominique Strauss-Kahn said to me earlier this week.
SHAPIRO: Yes.
QUEST: He basically was talking about these trade talks, and he said Europe must not be naive about the Americans' desire, with already having a Pacific deal, to want an Atlantic deal. Listen to what he says.
(BEGIN VIDEO CLIP)
DOMINQIUE STRAUSS-KAHN, FORMER MANAGING DIRECTOR, IMF: An agreement is a good thing. The problem is, this agreement so far is looking like something which is much more beneficial for the US than for the rest, and especially for Europe.
The US already has an agreement with the Pacific minus China. They want to have the same kind of agreement with Europe, and then they will be able to define the standards. And the biggest question in this story are standards.
If you are able to define the standards as yours, then you're dominating the world. And that's what the US wants to do, and I think the Europeans should not be that naive.
(END VIDEO CLIP)
QUEST: So, do you think the Europe -- A, do you think he's right, that they are trying to define the standards? And B, the Europeans would end up squabbling amongst themselves. Divide and rule for the Americans?
SHAPIRO: Well, everyone wants to define the standards. Of course the United States does, and of course Europe does. The question is, is there enough benefit for Europe?
It's clear there are benefits for the United States, and actually, Dominique mentions one of the -- implicitly, one of the great benefits for Europe, and that is because the United States has a free-trade or is pursuing free-trade agreements with Asia, the United States then becomes a platform from which Europe can, in effect, leap off into Asia.
QUEST: Oh --
SHAPIRO: Look, the great problem --
QUEST: That's -- that's dominating, that's having your cake and eating it.
SHAPIRO: Well, look. The fact of the matter is that Europe has a great problem. Europe -- foreign direct investment by European companies is overwhelmingly in other European countries.
QUEST: Right.
SHAPIRO: They have not -- they have reached out to the United States, but not to the developing world. This puts European companies at an increasing disadvantage in global competition. They really need to engage with the rest of the world.
QUEST: All right.
SHAPIRO: And perhaps this will -- this could be a step in that direction for Europe. It could be a step in the opposite direction. It could lock Europe into investment only in other advanced economies, in which case, Europe will continue to fall behind.
QUEST: We'll talk more about it. It's the first round in a long game, and --
SHAPIRO: It's a very long game, Richard.
(LAUGHTER)
SHAPIRO: We have a lot to talk about for a long time.
QUEST: Excellent. I'm looking forward to it already. Thank you, Robert. Have a lovely weekend. Robert Shapiro talking to me from Washington.
Ahead -- at some point, one of us ought to do a time capsule, and when we think these talks will come to an end.
QUEST MEANS BUSINESS continues after this break. This man made millions in car parts business. Now the rumor is he wants to play some British football. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
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QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. But this is CNN and, on this network, the news always comes first.
(BEGIN VIDEO CLIP)
QUEST (voice-over): A rescue operation is underway outside of Paris where a commuter train has come off the tracks. The French interior minister says seven people have been killed and dozens more injured in the derailment.
The regional train was traveling from Paris to Limoges when it derailed in Bretigny-sur-Orge. The cause of the accident's unknown. The train wasn't scheduled to stop at that station.
Heathrow Airport has reopened following a fire inside an empty Ethiopian Airlines Boeing 787 Dreamliner. The airport's runways were closed while firefighters tackled the blaze. They have now reopened.
Ethiopian Airlines says the jet had been parked for more than eight hours. Signs of damage are apparent on the roof of the jet. Both Boeing and the NTSB say they are investigating to find out what happened.
The American intelligence leaker Edward Snowden is asking Russia for temporary asylum. The Kremlin says Snowden could hypothetically stay in Russia if he stops issuing leaks that damage the U.S. and if he asks Russia directly for asylum.
Meanwhile, Barack Obama plans to speak with the Russian President Vladimir Putin later today.
A 16-year-old girl who died in the Asiana Airlines Flight 214 crash was run over by a fire truck, according to San Francisco police. It remains unclear whether she was still alive at the time. San Francisco airport has announced that the runway will be open on Sunday after the wreckage of the plane has been removed.
A teenaged Pakistani activist who survived an assassination attempt by the Taliban has delivered a speech at the United Nations on her 16th birthday. Malala Yousafzai has called on the developed nations to support education for girls in the developed world.
Now one other story to bring to your attention: in the last few moments, the jury has begun deliberations in the case against George Zimmerman, who is accused of second-degree murder. The jury have been told by the judge they may consider a lesser crime of manslaughter. In all cases, the verdict must be unanimous. If guilty, Zimmerman faces a maximum life sentence in prison.
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(END VIDEO CLIP)
QUEST: In the last few moments, Reuters have just reported -- and I want to bring it to you -- General Electric -- GE -- says that the fire on board the Ethiopian plane at London's Heathrow doesn't involve the engines.
This is a storied statement from Reuters. The company makes the engines for the jet through its GE aviation subsidiary. Since we're telling you so much about it, I thought it was important we brought that to your attention.
Other news: London's oldest football club could be about to get a new owner from overseas. It's reported the owner of the American NFL team Jacksonville Jaguars is poised to buy Fulham FC from Mohamed al Fayed (ph).
Jim Boulden joins me.
Is he or isn't he?
Well, first of all, first of all is al Fayed (ph) -- is Mohamed (ph) rumored to be selling or not?
BOULDEN: Yes, he's already sold Harrods and the rumors are that he wants to sell Fulham FC which he bought for very little money a long time ago. So looks like he'd make a huge profit.
Why? Well, Fulham is London's oldest football team, founded in 1879. They played Craven Cottage (ph) on the north bank of the Thames at a stadium with just a capacity around 26,000. You know it's very close to the Chelsea ground. And of course, Chelsea, much bigger club, much more well-known. But Fulham is there as well.
What do we know about the reported buyer, the billionaire Shahid Khan? Well, he was born in Pakistan and came to the U.S. aged 16. He's the owner of a car parts chain Flex-N-Gate. It's America's fourth largest auto supplier.
He also sells to markets here in Europe and in Asia. But most importantly, he owns the Jacksonville Jaguars. This is the -- he is the first foreign-born owner of any NFL team. Now Khan paid a reported $760 million for this floundering NFL franchise in 2011. It's considered the least valuable franchise of all NFL teams. And it hardly sells out its own stadium in Florida.
So Khan is banking on the NFL's growing popularity to turn the Jags into a global brand. He cites London as a logical jumping-off point for this global strategy. Some say there could be, in fact, a franchise here one day. But the Jags have agreed to play on one game every season for the next four years at London's Wembley Stadium starting this October.
Now if he does buy Fulham, Khan, of course, would join the growing list of American billionaires who have taken control of English football sides (ph) like Manchester United, Liverpool and Arsenal.
QUEST: Now hang on a second. I don't know much about (inaudible).
BOULDEN: I know.
QUEST: You're not supposed to agree with me.
(LAUGHTER)
QUEST: Just pretend.
How have Fulham done? How have -- what's their record?
BOULDEN: When he bought them, they were the fourth tier. They were very small London club. Like I said, Chelsea overshadowed them forever. They have gone up to the Premier League to the top tier.
They don't win anything but they don't get relegated. He's done a really good job. He spent hundreds of millions of pounds for a club that nobody hates and he has gotten permission to expand the club, expand this stadium along the Thames.
So he's got a nice piece of property there as well.
QUEST: Right. In a word, why does he want to sell?
BOULDEN: Oh, he's in his 80s. He sold Harrods. He lives in Scotland most of the time. It's probably time to give it over to somebody else. And it's interesting that he wants to give it to somebody who owns an American football team.
QUEST: Interesting.
BOULDEN: Yes.
QUEST: Thank you. Have a good weekend.
BOULDEN: Oh, we'll try.
(LAUGHTER)
QUEST: It could be a very busy weekend, one way and another. Each time we just think it's going to quieten down, all of a sudden, it takes off again.
Right. Now talking of things taking off, Taiwan is bracing for Typhoon Soulik to lash the island. At the World Weather Center, we will bring you up to date. Just proof there's an enormous number of news, weather and sport (inaudible).
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(BEGIN VIDEO CLIP)
QUEST (voice-over): The answer to tonight's "Currency Conundrum," what Singapore central bank is -- why is Singapore central bank urging people not to do to its $1 coin? It should (inaudible) in the first place. The answer is damage them.
There have been reports that coins have been deliberately mutilated by having the center knocked out of them. And that's a criminal offense in Singapore. It would probably be wise not to swallow them, either.
Can anybody tell me @RichardQuest why are people damaging them?
(END VIDEO CLIP)
QUEST: No. We'll find out, @RichardQuest. Does anybody know why people should be damaging the new $1 coin in Singapore? And you -- having the center knocked out of them? I'd be interested to know more.
Samantha Mohr is at the CNN World Weather Center. I'm guessing you can't help me on that particular issue. But you will be able to help me, of course, on the weather.
SAMANTHA MOHR, AMS METEOROLOGIST: Ah. We'll be talking about this typhoon for the next few days, Richard. This is Typhoon Soulik and as you can see, moving very briskly towards the northern tip of Taiwan. It's about 85 nautical miles to the east, the northern tip of Taiwan it is moving very briskly.
And you can see how the rain here is on the increase as it goes over the mountains, that spine of mountains that runs through Taiwan. So of course, that adds lift. And we end up seeing these tremendous amounts of rainfall.
So there you can see it here on the satellite picture, showing those max sustained winds at 160 kph, with those gusts even higher, up around 195, moving to the west-northwest at around 22. So you could see how well organized this system still is and these bright colors indicate where we are seeing the heaviest bands of rainfall.
There is the cone of uncertainty, taking it into the coast of China and then on up to the north as we head into the weekend. So this is going to affect millions of people over the next 2-3 days. Now you can see how at times out here on Saturday morning, you can see how that center of circulation is going to be over Taipei. Then it continues its movement through the straits of Taiwan here.
That will increase the winds as it heads to the west towards the coastline here of mainland China and then it will bring in some very heavy rain to the coast as well. And it stays unsettled, clear through Sunday. So this is going to be an incredible rainmaker.
We do have warnings out for extremely torrential rain that's 350 millimeters or more, especially when you get that orographic lifting. There is the cyclone as it moves off to the west. The typhoon bringing in all that moisture, orographic uplift will cause a lot of heavy rain, of course.
Taiwan is used this kind of rainfall and they're going to see it once again this time around, along those incredible winds. We've had many cancellations of around 40 cancellations so far as far as flights go. And we're expecting to see those delays around 60-90 minutes.
OK from a heated typhoon to a heat wave over much of Europe, 3-5 degrees above average across Portugal and Spain and that heat extending into London as well, Richard. You're going to be sweating it out here over the course of the weekend as the heat is on, running several degrees above average. Stay well hydrated.
QUEST: I refuse to complain about the hot weather. Many thanks indeed.
Now if you missed our exclusive interview with Dominique Strauss-Kahn, you have another chance to see it over the weekend. The former IMF managing director speaks openly and candidly -- it's a wide-ranging exclusive interview and you can see it at these times over the weekend.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable.
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ROBYN CURNOW, CNN HOST: Hello and welcome to MARKETPLACE AFRICA. I'm Robyn Curnow. Now for this week's show, we're going to focus on the business of conservation. We're going to start in Gabon, a country long dependent on oil but now looking to ecotourism to help diversify their economy.
But in Central Africa, security is still a problem. So the Gabon government has turned to the military for help and not just any military. As Vlad Duthiers now explains.
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VLADIMIR DUTHIERS, CNN CORRESPONDENT (voice-over): Flying high above seemingly endless rain forests --
LEE WHITE, DIRECTOR, GABON PARKS: Gabon is a rain forest country. It's 88 percent rain forest in fact. So it's the second most forested country on the planet.
DUTHIERS (voice-over): -- forest that for decades have been left virtually untouched as Gabonese instead flock to coastal cities. The country's economy driven by offshore oil. But the oil is drying up. So we're headed away from the coast, deep into the forest where Gabon's president says his country must now look for economic growth.
ALI BONGO ONDIMBA, GABONESE PRESIDENT: (Inaudible) is natural for us to make it our strongest asset. More than oil, more than other mineral resources. That one can last forever. You have -- and that's the opportunity for tourism. People come; they want to see the real jungle. It means that you are going to develop an industry.
DUTHIERS (voice-over): Dr. Lee White is in charge of the country's 13 national parks.
WHITE: And so over the next five years, we're going to be developing about 15 really nice lodges in beautiful sites close to some of these natural spectacles that we think people will get very excited about.
DUTHIERS (voice-over): But here developing an industry means patrolling borders. So we've come to see Gabonese security forces on a training exercise. They are learning to patrol, protect and defend the nearly 1,600 mile-long border Gabon shares with Cameroon, Congo and Equatorial Guinea.
UNIDENTIFIED MALE: But also if you're reached a rally point --
DUTHIERS (voice-over): Their instructors, United States Marines and sailors.
UNIDENTIFIED MALE: -- has a static position.
DUTHIERS: (Inaudible) right behind me, what you've -- what you're seeing here is they've actually captured people that are obviously playing the role of poachers that they've captured a couple of poachers here in the Gabonese jungle. And they're interrogating them.
DUTHIERS (voice-over): Gabon's neighborhood, Central Africa, has been historically unstable. Political unrest and poaching have decimated the region's wildlife.
DANTE PARADISO, DEPUTY CHIEF OF MISSION, U.S. EMBASSY GABON: And what we're trying to do is get ahead of problems in a place like Gabon before you have larger problems like you see as most recently in the collapse of Central African Republic or other states that have really had great turmoil.
DUTHIERS (voice-over): Gabon has fared somewhat better. It still has half of the world's remaining forest elephant population and some of Africa's last remaining virgin forests.
WHITE: There's this link between natural resources, governance management and decent security in Africa that's very tangible. And we believe very strongly that if we keep control of our natural resources, that's going to guarantee our -- or go as far as we can to guaranteeing peace and security in Gabon.
UNIDENTIFIED MALE: And see that these rocks represent rapids.
DUTHIERS (voice-over): Both countries hope this joint exercise will lead to economic stability, not just in Gabon but throughout Central Africa.
PARADISO: What you're trying to do is help reformist nations, emerging economies stay secure and stable so that they can grow and that we, the U.S., can participate in that growth.
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DUTHIERS (voice-over): Both countries hope this joint exercise will lead to economic stability, not just in Gabon, but throughout Central Africa, growth that Gabon hopes will come with tourism. For now, though, it's the soldiers walking through these forests -- Vladimir Duthiers, CNN, Libreville, Gabon.
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CURNOW: Now it was back in 2002 that Gabon's former president, Omar Bongo, established the national parks there. Here in South Africa, the national parks system was established way back in 1926. So while there might be more history, some of the problems are the same, poaching and, in particular, rhino poaching is forcing the South African government to take some drastic measures.
After the break, we speak with South Africa's environment minister.
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CURNOW: Welcome back. Now poaching is big business here in Africa, often run by sophisticated criminal networks. While here in South Africa, the country is battling an increased demand from Asia for a supply of rhino horn. While hundreds of rhinos are slaughtered every year, it seems like any option is on the table.
As the environment minister tells me, they are considering a once-off sale of South Africa's rhino horn stockpile.
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EDNA MOLEWA, ENVIRONMENT MINISTER, SOUTH AFRICA: We have actually looked at this thing, this whole economies of rhino. The reality is that there are people who believe, just like I believe that some of us who are Christians believe that Jesus Christ died for my sins, who believe that this thing has something for them.
We have to convince then otherwise. But we are convinced that convincing them otherwise will not just be an easy thing. It'll not take us a year, two years, 15 years or so. So by the time we're still doing this convincing and mobilization, and actually awareness and education that this thing won't do what you think it does, our rhino population will have decimated.
And then what?
CURNOW: What's the (inaudible)?
MOLEWA: The year 2026 we see that as a real, real bottom rock time.
CURNOW: What, that rhinos will be extinct by them?
MOLEWA: Will be near extinct. By that time, we'll be really blowing hot and cold. It's scary. I don't want us to get to that point.
CURNOW: I mean that's not far away.
MOLEWA: It's not far away. It's around the corner. This is why we think you want (inaudible).
We don't want to really be caught napping. And this is why we are saying because there is a demand out there, we also have surprise by the over 60,400 or so childrens (ph), yes, in South Africa, of dead rhinos, already died. We stockpiling them. So would it not perhaps be one of the measures we're considering that could actually help us to alleviate this problem --
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CURNOW: (Inaudible) legal (inaudible)?
MOLEWA: (Inaudible) legal sale of that which we have controlled under very strict measures, obviously within the rules that the sites (ph) will determine as parties (ph) but we think that that could help.
We have done so, by the way, with ivory. When we were in big trouble, we did once-off sale. In South Africa there's not been poaching of ivory at that last states (ph), one or two maybe if there is anything like that.
But taken from those lessons and that lesson, we think that this is probably one of the measures that can actually help us alleviate this problem. Because if once they have it, they probably won't be this killing anymore. But that doesn't mean by the way -- let me emphasize -- that we will stop all the measures, any of the measures that we applied right now.
CURNOW: But a once-off sale many critics will say, well, that proves that rhino horn is a commodity and in a way fuels the trade even more.
MOLEWA: It may well be. We don't know. But we are saying also in the same vein that it hasn't happened in the case of ivory. Maybe it won't happen.
But if it happens, we would like to think together with our every other person who may have a such (inaudible) or an idea but sitting back and just not doing more than what we're doing additional looking at an additional measure like (inaudible) in trade would for us actually be carrying very high repercussions for us as a country and for the world. We think that we should try it.
If it does stimulate, obviously we will have to, you know, ahead of time think about what else can be done in order to ensure that it doesn't stimulate this. But at least there is that kind of (inaudible) supply.
Because as I said, this is such a stubborn thing that convincing people will take us time. We all have to go into it. That battle together in convincing people that this doesn't really work as they think, but will that happen before 2026? That's a question; I doubt.
CURNOW: In a country where there's such inequality, why does saving the rhino matter? Does it make business sense for South Africa as a nation?
MOLEWA: You see, there are two things that I think we need to consider very, very seriously. Rhino is part of our heritage. It's not just that rhino population that is being poached in South Africa.
We have all other species and many other species, let me say, being poached, ranging from ordinary lizards, special species lizards that are found in South Africa, to apes, plants, and everything, cycairs (ph) and so on. But they are not being poached in the high magnitude as poaching (inaudible) rhino. It is also not happening in such a violent manner as it is happening with our rhino population.
This is very, very high. This is, by the way, part of our heritage. That's the first thing. That entire (inaudible) -- and remember South Africa is actually the third most (inaudible) diverse country of the world -- after Brazil and Indonesia. So if we sit back and look at our heritage being actually poached as it does, it's a big problem. So it's a matter of protecting our own heritage firstly.
Secondly, it's also a security issue. This is a -- one of the things that actually undermines the security o the country. It shouldn't happen and be allowed to happen as it does, because very soon it can happen on any other thing.
So for those two reasons, we see this as very, very serious. And that doesn't mean that we should underplay the issues about poverty, of education. By the way, we should actually be using the rhino as a population to increase our ranges for those communities that are poor. They actually become rich.
This is part of our industry and the sustainable use of our natural resources. It's part of the policy of this country. It should be utilized to also fight poverty. And this is why we are fighting so much. We can't let the security of the country be undermined as it does. We can't sit back as we're seeing the heritage of our country actually being poaches as it does at this rate.
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CURNOW: Some tough decisions there that need to be made by South Africa's environment minister.
Well, you can watch that interview as well as much of our other content online at CNN.com/MarketplaceAfrica. I'm Robyn Curnow. See you again next week.
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