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Quest Means Business

Vodafone-Verizon $130 Billion Deal; Vodafone Deal's Impact on UK Economy; Stronger PMI Boosts Stocks; Economy in Focus; Football's $132 Million Man; Spain's Reaction; Dollar Mixed; South African Mining Strike

Aired September 02, 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: From the Abu -- from Abu Dhabi to New York, where tonight's QUEST MEANS BUSINESS. An historic deal between two telecommunications giants tops our stories. Vodafone is selling its 45 percent stake in Verizon wireless back to Verizon. The price is $130 billion in cash and stock. It was a widely anticipated announcement, which came after the markets in Europe had closed.

Let me dot the Is and cross the Ts for you on this particular deal. Vodafone says it will return $84 billion to its shareholders and set aside $9 billion for new investments. What does Verizon gets? It gains full ownership of its wireless business, which is the most profitable in the United States.

The deal is the third-largest M&A deal ever done. Actually, Vodafone also had the largest-ever. That was the takeover of Mannesmann. Those of us who are old enough to remember the year 2000. And of course AOL's purchase of Time-Warner, Time-Warner parent company of this network, which happened a year later.

So, it's taken the best part of 10, 11, 12, 13 years for an M&A deal to reach those sort of levels of $130-odd billion. And the Vodafone- Verizon deal is so big it hasn't just got corporate ramifications, it's expected to provide a significant boost to the UK economy.

Jim Boulden is with us in London. Jim, explain, how does a corporate deal, even one of this magnitude, actually have macro economic implications?

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Well, I'll start with one of the things we saw happen in the markets today here in London, that was that sterling, the currency, actually rose just a little bit on the market during the day. It increased in value.

And one reason is that investors will be bringing some of that money back, obviously, to the UK market through the dividends and through the shareholders. And so a lot of that money will be coming back. And so, people were saying that's going to be an amazing amount of money absorbed into the economy, so you actually saw sterling rise.

How does it happen, Richard? Well, obviously, $84 billion returned to shareholders, 40 percent, apparently, of the individual shareholders reside here in the UK. So, what do they do with that money? Well, they can buy other stocks, so they can put it into the stock market, move it around their portfolio.

They could spend it, they could feel wealthier. So, not just spend that money, Richard, but actually spend other money because they might feel like they've got something special here. And if they get it in time for Christmas, they might do it then.

So, the idea that you can see tens of billions of dollars coming back to this economy and, of course, would they be paying any taxes here? That's one of the big questions we still have.

QUEST: Now, yes, this question of taxation, the way the deal has been structured through a Central European -- or a Netherlands, I believe, holding company, there might be some tax money paid, but certainly nothing that one would expect on a deal of this magnitude. It's almost tax neutral.

BOULDEN: Yes, I think Vodafone said they're going to have to pay $5 billion in US taxes on the deal, so that's a pretty straightforward number. But here, there's a thing in the law that allows a company to not pay capital gains tax if they're selling shares in a subsidiary overseas.

And that's something that would make sense, I think, for Vodafone to use that tax efficiency. And we'll find out about that in the fullness of time. But no, they're not going to be just bringing back $130 billion or a little bit less than 100 billion pounds and just paying 25 percent tax on that. That's certainly not going to happen.

QUEST: Jim Boulden in London with the deal of Vodafone and Verizon. As for the markets, investors took inspiration from some stronger-than- expected economic data. It's called a PMI, the Purchasing Managers' Index.

Now, the PMI's an interesting one because it's an example of manufacturing activity. In Europe, the UK was the best performer in August, up 57.2. A figure above, by the way, 50 signals expansion. Greece just a laggard at 48.7, still the best number for some three and a half years.

In China, signs that the economy is stabilizing. According to official figures there, the PMI climbed to 51, and another separate measure was also well over -- oh, not well over, but was just a smidgeon over 50.

The PMI's reports stoked a rally in Europe. The main indices closed higher, a positive start to September after losses in August. Just look at that. Paris, London, Zurich, Switzer -- sorry, Paris, Frankfurt, Zurich, and London. You don't see days like that very often.

Bob Parker, they're all up over 1 percent, some of them are up nearly 2 percent. Bob Parker at Credit Suisse in London. What a day, what a rally.

BOB PARKER, SENIOR ADVISOR, CREDIT SUISSE: Well, that rally, of course, is against a background, as you mentioned, of the markets reversing in August because primarily of fears of Fed tapering. And also, I think, investor concern about developments in the Middle East.

I think investors today, there is somewhat of a relief rally on this delay and the vote in Congress on Syria. But obviously, the main driving factor today is that investors are sitting on very significant amounts of cash. And as you say, those economic numbers coming out of Europe are very positive.

And after six quarters of recession in Europe, we came out of the recession in the second quarter, and I think what's impressing investors is that the recovery in the eurozone now seems to be accelerating.

QUEST: On this point, the main driving force for the markets at the moment, is it geopolitical with Syria? Is it economic, in the sense of growth has returned? Is it simply the date? It's a new month, and therefore after rebalancing the books at the end of the old month, people are taking new positions?

PARKER: Well, I think you have a number of very conflicting factors at the moment, which is why I don't expect in September and October that we are going to have a straight line rally in global equity markets.

There are number of negatives out there. First of all, how will the markets react when the Fed finally announces tapering? How will the market react if there is a further dispute in the US over the debt ceiling and the future of fiscal policy?

And we shouldn't forget that in Europe, we've got a number of risks. The Italian government, that coalition is very fragile, indeed. And it's a not a near certainty that the German election will result in a victory for Mrs. Merkel, backed by her coalition partners. So, there are a number of factors, ex Syria, which actually could derail markets in September.

QUEST: So, my usual question to you, Bob Parker, as we come to the end: in this environment, what's the best strategy? Where do you go?

PARKER: Well, my view is very straightforward, which is that at the end of the year, global equity markets will be higher. But, as I mentioned, there are a whole raft of risk factors in September and October.

And I think at least for the next few weeks, investors should actually sit on the sidelines and probably wait until middle of October for a decisive buying opportunity when, I think, ideally you go back into very cheap emerging markets and also you go back into cyclical sectors in Southern Europe, which is very cheap.

But should you be doing that this week or next week? The answer is no, and sometimes it's right to retreat from markets, and frankly, the next few weeks, I think, is one of those times.

QUEST: Bob Parker, thank you for joining us, making some sense of it all --

PARKER: Thank you.

QUEST: -- and putting into perspective the various different factors moving markets. Now, if I've done my sums correctly, and no doubt some of you @RichardQuest will point out that I have not, I've worked out that the new transfer from Tottenham to Real Madrid is one percent of the value of the Vodafone deal, the Vodafone-Verizon deal. In other words, after the break, why this man is worth one percent of Verizon's wireless deal.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GARETH BALE, NEW REAL MADRID WINGER: I had this shirt when I was 9, 10, 11 years old. I followed them until now, and yes, it's an absolute dream come true to be here and I can't wait to fill in the white strip. Hala Madrid!

(CROWD CHEERS)

(END VIDEO CLIP)

QUEST: Gareth Bale is the $132 million man. That's the price of the transfer from Tottenham to Real Madrid. It makes the Welsh midfielder the most expensive footballer in the world. It's a staggering sum in a summer transfer window marked by a frenzy of football mega-deals.

Edinson Cavani, $85 million, Napoli to Paris Saint-Germain. Falcao at $80 million, Atletico Madrid to Monaco. And Neymar, $76 million from Santos to Barcelona. And let's not forget -- it seems almost cheap chump change -- James Rodriguez, $60 million from Porto to Monaco.

The deal is totaling up a new spending record. It's passing the half billion dollar sum from 2008. Our sports correspondent Alex Thomas is live from London.

OK, Alex, it was the deal that was the biggest open secret that didn't take place. An extraordinary amount of money.

ALEX THOMAS, CNN SPORTS CORRESPONDENT: It is an extraordinary amount of money, and we've been waiting long enough for the deal to go through, haven't we, Richard?

And what are Real Madrid getting for that $133 million, or less than $130 million, depending on who you listen to? Real Madrid say it's not a world record free, Tottenham Hotspurs say it is. Maybe it's all based around the ego of Real Madrid's current star, Cristiano Ronaldo.

Certainly, Gareth Bale isn't quiet as good as Ronaldo by most people's standards, Ronaldo a former world player of the year, and he's finished runner-up to Lionel Messi, the Barcelona star, the last four years, and Gareth Bale would not be put above those two players as far as world terms are concerned.

But he's a 24-year-old, he's a Wales international, he's got Champions League experience, he spent the last six seasons at a top English Premier League side, and the English Premier League's one of the biggest and best in the world.

And certainly, he's got the sort of pace and goal-scoring ability that can turn the fortunes of matches in a split second, and Real Madrid hope that will be difference --

QUEST: All right.

THOMAS: -- between them, not winning -- or not winning their tenth Champions League title, which is a big goal for them this season.

QUEST: And as we look at this particular transfer season and all those numbers I've just pointed out, 85, 80, 76, 60 million. Give me some perspective on how this year compares to previous years, and are you surprised that seemingly so many large dollar deals?

THOMAS: I am a little surprised, although football clubs, as we've been reporting over the last two or three years ourselves, Richard, have bucked the global economic recession better than some other business.

And certainly, as far as England's Premier League is concerned, it's going to be a record figure in terms of total transfer fees. Not necessarily the case in other countries. But yet overall, a surprisingly large amount of business being done across Europe amongst some of the top clubs, Richard.

QUEST: Alex Thomas with the deals that have been done in this transfer window. And $132 million for one 24-year-old football player.

Meanwhile, 56 percent of young people under the age of 25, which is just the -- roughly the age of Bale, are unemployed in Spain. It's an extraordinary dichotomy, a contradiction, in many ways. Al Goodman joins me now, live from Madrid. Al, $130 million for one 24-year-old while 65 percent of 25 or under in Spain are without work.

AL GOODMAN, MADRID BUREAU CHIEF: Richard, I think you just called Gareth Bale the one percent man, based on that telecoms deal. Well, this is where he wowed them, and the people who showed up here, about 20,000 people in the scorching heat, they didn't really care that he was so expensive. Here's what a few of them had to say about that deal.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: In my opinion, I think it's a real expensive player, he costs us a lot of euros. I think he's going to be a really good player for Real Madrid, but now he has to play good, so he has to achieve the goals for Real Madrid, the Champions League, but I think he'll be a good player, so welcome Bale.

UNIDENTIFIED MALE: Oh, I think he's a great player. He's hopefully going to be a great player, and Real Madrid, too, with Ronaldo, is going to be quite dangerous, so this year, we'll get into tenth for sure. For sure, definitely. After ten years, it's our time.

(END VIDEO CLIP)

GOODMAN: The thing is, Richard, despite the good words of the prime minister saying nobody's talking about the recession and the economic crisis, many people still are. The only signs of life in the economy are tourism, and the old tourism standard, and exports. But this guy, Gareth Bale, is an import, and an expensive one. Richard?

QUEST: And Al, putting this together, obviously it's a great boost to the local economy and it's a great boost to the morale in Spain and in that part of Spain.

But I do wonder and I do question and ask you to question how Real Madrid justify this in the economic situation of the country. Will there not be some raised eyebrows, or is football such a religion that this is merely worshiping at the altar of the game?

GOODMAN: It's worshiping at the altar of this particular church, the Real Madrid church, because the chairman, the construction magnate Florentino Perez is known for these kinds of deals, and people sort of forgive and put aside.

But the general economy is not in a good position, and you see the dichotomy just in the football clubs. There are a few rich clubs -- Madrid, Barcelona -- and then you have a lot of clubs in the first division and certainly in the second division where the players are not even getting paid, even though they're playing. Richard?

QUEST: Al Goodman, who's in Madrid tonight. Al, we thank you. Now, another football legend of sorts is the focus of tonight's Currency Conundrum. Paul the octopus. Yes, Paul the octopus.

He rose to fame in the 2010 World African Cup -- in the African World Cup when he accurately predicted the winner of several matches, including the final. Which country minted a coin in Paul's honor? Was it his native Germany? Was it Spain, the winner of the Cup? Or Liberia? The answer later in the program.

The dollar is trading higher against the euro and the yen and lower against the pound. Those are the rates --

(RINGS BELL)

QUEST: -- this is the break.

(COMMERCIAL BREAK)

QUEST: The price of gold is edging higher today as investors are waiting on news of a possible US strike on Syria. That's the economic effect of what's happening. Spot gold is trading slightly up in London at more than $5 an ounce, $1385 on the currency. Investors bought into the safe haven investment last week, and it drove prices to a three-month high.

The price has had a rough ride. Now, it's down more than 26 percent since it reached its record two years ago. But the actual industry itself and the sector in South Africa is bracing for strike action, which is planned on Tuesday.

Weeks of talks between the NUM, the National Union of Mineworkers, and the gold companies failed again last week. The union wants a 60 percent pay rise for miners just starting in the industry. Producers say they can't afford that, and they blame a slump in the price of gold.

Errol Barnett's following developments. He's in Johannesburg and joins me now. So, we're at this stalemate where frankly, is this strike going to go ahead?

ERROL BARNETT, CNN INTERNATIONAL CORRESPONDENT: Richard, at this hour, all expectations are that this strike will, indeed, go ahead. By this time tomorrow, it will already be underway. So, we've talked about the gold sector. This is in addition to strikes we've already seen in the automotive and construction sectors in this country.

The gold sector employs around 140,000 people. So, for even those who do want to go to work tomorrow, they won't be able to. Some of the mine owners we've spoke to will be locking people out to avoid violence.

So, while this is all about wages, in the collective South African memory, there's the so-called massacre from last year still hanging in the balance.

(BEGIN VIDEOTAPE)

(GUNFIRE)

BARNETT (voice-over): Police fire on workers after an illegal strike at the Marikana Platinum Mine last year. Thirty-four were killed in violence, which shocked the nation and exposed to the world South Africa's economic Achilles' heel.

(CROWD CHANTING)

BARNETT: Low-paid workers are increasingly dissatisfied with wages. Previously stable labor unions are engaged in turf wars as a result. All as the South African economy grows at a slower pace than expected. Economists say these factors make current strikes more perilous.

AZAR JAMMINE, ECNONOMETRIX: Not only will they bring down the relevant companies, but also a lot of people are going to go hungry.

(CROWD CHANTING)

BARNETT: And it could get worse. On Tuesday, many of South Africa's 140,000 workers at gold mines are expected to strike, according to the National Union of Mineworkers, or NUM. It's pushing for wage increases of up to 60 percent.

(CROWD CHANTING)

BARNETT: But its more militant rival, known as AMCU, was pushing for a wage increase upwards of 150 percent for its members, putting the NUM in a difficult position.

FRANS BALENI, NATIONAL UNION OF MINEWORKERS: Unfortunately for the employer side, they are taking for account their losses of last year, in 2012, and they are very minimal in their approach. What has been offered is actually below the work high inflation.

GRAHAM BRIGGS, CEO, HARMONY GOLD: We think what we've put on the table is a reasonable offer.

BARNETT: Graham Briggs is the CEO of Harmony Gold, which employs more than 30,000 workers. He says the industry's offer of a 6.5 percent wage increase is on par with inflation, but blames union rivalries for the stalled talks.

BRIGGS: We can't just negotiate with one union above the other. This is a repeat of rivalry that we've seen on mines, which we don't want.

BARNETT: To prevent clashes, Brigs says he may need to lock out all workers come Tuesday, regardless of their union.

BARNETT (on camera): Now even as talks stall and fears of possible violence abound, most are hoping for a peaceful resolution. In the words of one mining executive, South Africans could once again prove that peaceful outcomes are possible even during the darkest hours.

(END VIDEOTAPE)

BARNETT: And Richard, I can also add that behind the scenes -- and we have been in contact with the largest union and some of the mining executives -- behind the scenes, conversations, negotiations, discussions are still underway. But the clock is ticking. As I say, fewer than 24 hours now to come to some kind of resolution with each side appearing to really dig their heels in.

QUEST: Errol Barnett in Johannesburg for us this evening. Errol, thank you.

After the break, the Syrian president, Bashar al-Assad, has been speaking out over speculation of the possible US strike on his country. We'll talk to the French journalist who spoke to Mr. Assad after the break. QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. This is CNN and, on this network, the news always comes first.

(BEGIN VIDEO CLIP)

QUEST (voice-over): President Obama is continuing in his push for congressional approval for the use of force in Syria. The president is currently meeting with two key Republican senators at the White House. Top administration officials are making phone calls to House and Senate members as well.

Russia's foreign minister says Moscow is totally unconvinced by the evidence presented by the United States and her allies.

France says it has evidence of its own that proves Damascus carried out the chemical attack. A source says it appears to have been an attempt to take back territory.

And Syria's president has spoken out for the first time since the threat of a U.S. strike on his country emerged. Bashar al-Assad told French newspaper "Le Figaro" that the Middle East is a powder keg that will explode if Syria is attacked.

And one other story to bring to your attention at this hour: Diana Nyad has become the first person to swim from Cuba to Florida without using a shark cage or flippers. Nyad, who you can see here, is 64 years old. It's her fifth attempt. She said it was her fifth and last attempt and she did the crossing in just 53 or so hours. President Obama has tweeted already, "Congratulations to Diana Nyad. Never give up on your dreams."

(MUSIC PLAYING)

QUEST: President Obama's pressing for congressional approval for military intervention in Syria. That much we know. Two key Republican senators are at the White House this hour for a meeting.

Athena Jones joins us now from the White House.

Everyone knows the arguments; so what persuasive talent is the president bringing to bear?

ATHENA JONES, CNN CORRESPONDENT: That's a good question.

Hi, Richard.

Certainly the president himself, as well as other White House officials, have been hard at work here. They've certainly stepped it up since the weekend, talking to Congress, consultations, briefings, on the phone, classified, declassified. In person today, the president is meeting with, as you mentioned, two Republican senators, John McCain and Lindsey Graham.

These are two people the White House hopes can help convince their colleagues on Capitol Hill to pass this resolution authorizing military force. Now we know the White House has said the president doesn't have to have Congress' approval here. But now that he's put this on the table, the idea that he's seeking Congress' approval, he and other members of the administration are going to be working very, very hard to make sure that they put this through.

Now I should mention that both McCain and Graham have been folks who wanted to see the president go further. They want to see President Obama lay out a clear plan and strategy for military action in Syria.

QUEST: All right.

JONES: And they think the goal should be to shift the balance of power against Bashar al-Assad. That of course is not the White House's goal. The White House's goal is not regime change but to punish Assad for chemical weapons.

QUEST: Let me jump in here and take you deep into the weeds of constitutional congressional and presidential protocol and etiquette.

Everybody wants to know what happens if, A, Congress doesn't, both houses don't give him the authority? Or, B, one does and one doesn't?

I mean, surely the general counsels and the constitutional counsels now are absolutely looking at what the permutations must be.

JONES: Well, there are different possibilities of what could emerge. And we haven't, quite frankly, gotten a straight answer from the White House about what they'll do if this gamble doesn't pay off on Capitol Hill. I mean, we do know what I said, that the White House believes the president doesn't have to have congressional approval in order to act.

But the fact of the matter is, he's hoping that Congress will approve this resolution, giving him the power, the authority to act militarily because, quite frankly, it'll give him some cover. And we already know that this is illegal on the world stage, but at least domestically has the support of Congress. They feel that it'll put them in a better position, Richard.

QUEST: We thank you for that, Athena Jones joining me from Washington.

Angela Merkel has been making her case to hold onto power in Germany. She faced her rival in a televised debate ahead of the nation's crucial elections. We'll talk about that after the break.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

QUEST: We were talking earlier in the program about the interview that Bashar al-Assad has given to "Le Figaro," the French newspaper.

Well, the journalist, Georges Malbrunot, interviewed President Assad and Georges is on the line now from -- on the phone from Damascus.

Tell me, how was President Assad? Did he seem at all concerned that he might on the receiving -- or at least part of his country might be on the receiving end of U.S. Tomahawk missiles?

GEORGES MALBRUNOT, "LE FIGARO": Richard, Bashar al-Assad, whom I met this morning, was calm but extremely concerned by the situation. And he wanted to show that he was not leaving in a boom cur (ph). I met him in a house on the -- on a hill behind -- beside the presidential palace, but with a very limited security system . I was not -- there was no checked security before I got there, just one in the car. And I think he wants to show that he is obviously concerned by the seriousness of the situation and the stone (ph) was tough mainly against France, (inaudible) United States. He told me France would become an enemy of Syria if France participates with the strikes. And he was saying that President Barack Obama is a weak leader and he would advise the U.S. Congress then to look if it's in their interest, in their interest to vote (ph) --

(CROSSTALK)

QUEST: OK.

MALBRUNOT: -- for a U.S. strike. And also he was threatening that entire Middle East, saying that the Middle East is boiling and the fire is getting close and close with this threat of strikes. And he didn't say anything about Israel --

(CROSSTALK)

QUEST: Let me just jump in here. Let me just jump in here one second, Georges, because on the core question of who actually did gas the people in the eastern Damascus, now we've heard the U.S. evidence, or part of it. And we know that Assad denies that evidence.

So who does he say did it?

MALBRUNOT: I asked him the question and he didn't answer. What he told me that there was no logic that it's army at this time was progressing, actually, from progress in the Juta (ph) in the neighborhood of Damascus which is true, according to independent sources. There was no logic that his own army, his own regime used non-conventional weapons, while conventional weapons bring some progress. And if Mr. Obama and Mr. Hollande had any proof, to show the world that there are evidence of this attack.

QUEST: And is it -- did you get the impression of a man in control of events? Or a man who is being led by events?

MALBRUNOT: You know, it's hard to tell, but he didn't give me the impression that he was not in control (ph) of the situation. He is completely assuming all that the violence which happen in his country for the last two or three years, he completely closed the door to any political settlement. I asked him if he would be ready to welcome the opposition in Damascus to bring them, to give security grounds. (Inaudible) know now it's a matter of fighting terrorism and we have to liquidate the terrorists. And after we'll talk about launching a political process.

So absolutely no virtue (ph) on his -- in his speech and mainly warning that U.S. and naming France, Jordan and Turkey or so have been warned by Bashar al-Assad. So absolutely no, no, he's not -- he is worried, obviously, but he -- and the people with whom I talked in Damascus also told me that Bashar al-Assad, he is in control and he is leading the country, more than he used to (inaudible) perhaps three, four, five years ago, while there was this assertion that Bashar had to share the power with his brother, his brother-in-law, et cetera.

QUEST: All right. Georges, many thanks indeed for joining us, Georges Malbrunot, who met and interviewed Bashar al-Assad. Good to talk to you. Thank you, sir, for taking time to come and talk to us.

Angela Merkel has been defending her European policies in a televised debate ahead of elections. Her rival, of course, is the social democrat Pierre Steinbruck, accused her of deadly austerity. and Ms. Merkel had an answer for that.

Diana Magnay is live in Berlin for us.

No knockout punch, Diana. But who had the upper hand?

DIANA MAGNAY, CNN CORRESPONDENT: Well, no knockout punch; a lot of media commentators have been calling it a draw. I think, though, that Pierre Steinbruck, he was good. He was very good. He impressed really -- call members of his -- of the SPD, the Social Democrat following, a lot of the media, who've been giving him a very hard time to date, and positioned him really -- himself really as a sort of true Social Democrat, a man of the people, fighting for social justice.

And a lot of the commentators today have said, you know, he really positioned himself as someone who could be a chancellor candidate.

The trouble is he has so far to go before he can compete with her because she can sort of rest on her laurels and say, look, my party is 16 percent ahead in the polls. Germany is doing incredibly well. Unemployment is at record lows. And you, the German people with me, know that you'll get more of the same, and it could get better.

So he's got a very, very tough battle to fight. And he was good. But he would have to be staggeringly good if he's going to make it into the chancellor's position. It's all about the makeup of the coalition. And at this point, it looks as though Pierre Steinbruck is trying to get a cause sort of red mark within that coalition, even though he actually says he doesn't want a brand coalition (inaudible) --

(CROSSTALK)

MAGNAY: -- any favors first time 'round.

QUEST: Diana, Diana, you have -- we've got to talk about Merkel's secret weapon that she employed last night.

The secret weapon.

MAGNAY: Well, exactly. Europe is her secret weapon because basically the German people are pretty happy with the way she's been handling Europe. They believe that she has been treading this fine line between preserving their interests and keeping the whole thing intact.

So when Pierre Steinbruck attacks her and says it's been a complete failure, you've crushed Southern European economies because of your austerity, and we haven't seen enough growth, she can turn around and say these things don't happen overnight. We're seeing the first strands of growth.

And by the way, you always back my votes in the parliament to offer these bailout degrees.

So how can you say it's a failure when you're behind it anyway?

QUEST: Quickly, Diana, that necklace that we've just been looking at, interesting choice of jewelry for the German chancellor.

MAGNAY: Black, red and gold; they're the colors of the German flag. And that did cause quite a lot of discussion on Twitter within half an hour of the debate, it had its own Twitter hashtag, #schlandkette, which is short for Deutschland, Germany, neck. So it got almost as much as comment as the actual debate did, Richard.

QUEST: Diana Magnay, who is in Berlin for us tonight.

Now Tom Sater is at the World Weather Center.

About an hour ago, Tom, I got an emergency alert on my phone, which I'd never really got one before, which sort of suggested that hell and damnation was about to arrive on our heads by the weather in New York.

What was it all about?

TOM SATER, AMS METEOROLOGIST: It's wanting to know if you have your snorkel and fins with you, so you can swim back to your humble abode later today after work.

QUEST: Oh.

SATER: Flash flood warnings in effect, right where you are, Richard, flash flood warnings.

For all the boroughs in New York, now for you business travelers, if you are (inaudible) around, these are current ground stoppages. That means LaGuardia, JFK, they are not coming in; they are not landing. The rain is quite heavy. What's the ground stoppage in Philadelphia for a while, now it's just an hour and a half.

Here's is a cold front. It's got a lot of real estate to cover. But ahead of that, we've got the heavy rainfall right where Richard is. In fact, all the boroughs, as mentioned, midtown Manhattan, heavy amounts of rainfall expected, the Bronx and Brooklyn and all the others, some flash flooding occurring out by Las Vegas, in the U.S. But overall, still looking at summer warmth. If you are traveling into the U.S. expecting someone to come in, here's what you can expect, about 29 in Atlanta for Tuesday. in Europe, we've got an area of low pressure coming across the Baltic Sea, low clouds will be a problem. Cooler temperatures with the unsettled weather to the north, but still summer hanging on to much of the western parts in the countries of Portugal and Spain, above normal, even into Paris, looking at temperatures well above their average, London, too. Slight chance of the delay mainly due to possibly some low clouds, some fog, some areas such as Prague, Vienna, not a big problem, not expected to be a big problem; 23 is the average in Paris. You're looking at 27 on Tuesday, 21 is the average in London. About 26.

Here's where you're going to have some problems. Look at the thunderstorms activity in Manila, Kuala Lumpur, Singapore. But Osaka, in fact, we had a tornado yesterday during the afternoon. And just 25 kilometers north of Tokyo. And now we have Toraji, another tropical storm that will inundate the entire country. Look at that, all of Japan is looking at about four days' worth of heavy rainfall. Keep the severe weather to a minimum after that tornado yesterday in Tokyo. They're looking at 32 on Tuesday, Shanghai rainfall, and 29 degrees. Elsewhere for you, if there's any problems, it's going to be down under. Cairns, heavy rain, winds that is, 31 kph winds, causing some slight delays, possibly could for the next 24 hours. Possibly some rain into Perth as mentioned, not a big tropical system to worry about. There is another cold front on the way, but it's been a rather warm winter down under, Richard.

There you have it, around the world in about two minutes.

QUEST: Excellent. Tom Sater.

Tom Sater went around the world in just a couple of moments. Diana Nyad went from Cuba to Florida in just over 53 hours. For me, this is the only story, the best story of the day. It's a story of human achievement, human endeavor. She's 64 years old. We'll talk about it after the break.

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QUEST (voice-over): The "Conundrum" for you tonight, which country minted a coin immortalizing Paul the Octopus from South Africa's World Cup? The answer, Liberia. His image was minted on a $5 coin honoring the psychic sea creature.

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QUEST: So Diana Nyad has become the first person to swim across the Florida straits from Cuba without a shark cage or flippers.

John Zarrella is on the beach in Key West in Florida.

John, this is amongst the most treacherous waters in the world. She did it in just over 50 -- it's the best story of the day, this.

JOHN ZARRELLA, CNN CORRESPONDENT: Ah, absolutely, Richard. There's no doubt about it. What an unbelievable accomplishment. This was the fifth time in 35 years that Diana Nyad has tried this. She said this would be her last attempt. Her other attempts had been thwarted by, the last time, a year ago, box jellyfish with the stings that really got to her and forced her out of the water.

But just before 2 o'clock this afternoon, she made it ashore here at Smathers Beach in Key West, ending a 110-mile swim. She got out of the water on her own, then fell into the arms of one of the people that is on her team, that's been with her all throughout this entire endeavor.

And then she even had the strength to talk about what it was like.

DIANA NYAD, LONG DISTANCE SWIMMER: I have three messages. One is we should never, ever give up.

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NYAD: Two is you never are too old to chase your dreams.

Three is, it looks like a solitary sport, but it is a team.

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ZARRELLA: Diana Nyad chased her dream and she caught it today here in Key West, Florida, that 110 miles done in just over 50 hours and, of course, she broke all kinds of records, the first person ever to do this.

You know, and along the way, the last, she had great weather conditions, which certainly helped her. The waters just absolutely flat; she didn't have to worry about swells or waves making it even more difficult for her to accomplish her goal. So that was in her favor.

Everything worked out perfectly, the stars aligned for her and she has done it, accomplishing what many people thought she never would, Richard.

QUEST: John Zarrella in one of the most beautiful parts of the world, Key West off the coast at the southernmost tip of Florida.

Many thanks, John.

I will have a "Profitable Moment" after the break.

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QUEST: Tonight's "Profitable Moment": there are three big stories besides, of course, Syria, which we've been talking about on tonight's program.

The first, of course, Vodafone and Verizon, $130 billion deal which, of course, absolutely blew out of the park.

The second, the 1 percent of that deal you could have Gareth Bale, $130 million, buys you Bale as he went from Tottenham to Real Madrid. It's an extraordinary amount of money.

And then, of course, you have the third story, which happened just a couple of hours ago, and one which is frankly taken everybody by surprise, attention and delight, Diana Nyad on her fifth attempt at the age of 64, she manages to swim from Cuba to Florida in just 34 hours. And she has a message, which perhaps we can go with both Vodafone, Verizon and Bale, never give up and you're never too old.

Eat that, Gareth Bale, at age 24.

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 as profitable.

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QUEST: The headlines at the top of the hour:

QUEST (voice-over): The U.S. president is holding a key meeting at the White House with two powerful Senate Republicans. It's part of his drive for congressional approval for using force in Syria in response to alleged chemical weapons attack by the Damascus regime.

Russia's foreign minister says Moscow is totally unconvinced by the evidence presented by the United States and allies.

France says it has evidence of its own that proves Damascus carried out the chemical attack. And a source says it appears to have been an attempt to take back territory.

A blockbuster buyout in the telecoms industry, Verizon says it's agreed to pay $130 billion for Vodafone's 45 percent stake in Verizon Wireless. (Inaudible) a decade-long effort by Verizon to win control of America's most profitable mobile phone provider.

Fifth time for the charm for Diana Nyad. The 64-year-old American endurance swimmer was mobbed by supporters as she reached the shore of Key West in Florida after a grueling swim from Havana in Cuba. It took her more than 50 hours.

You're up to date with the headlines. Now "AMANPOUR."

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