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Quest Means Business
Dow Jones Is Up; Google's Soft Power; Sponsors React to Biggest World Cup Controversy
Aired June 25, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: The bells are ringing, the Dow Jones is up, a brewer is ringing the closing bell. Let's see if he's
drunk.
(APPLAUSE)
QUEST: I think he's had one over the eight if he hit it like that. It is today, it is Wednesday, it's June the 25th. Tonight, GDP - Gross Domestic
'Problem.' America's winter slowdown turns out to be a slump. We'll talk about that. Also, think of your home, your car, your TV the spirit of
Google's soft power. And what price a quick bite. Sponsors react to the biggest World Cup controversy. I'm Richard Quest live in New York. Of
course I mean business.
Good evening. Tonight the U.S. economy notched up its worst performance in five years. GDP shrank at a 2.9 percent - 3 percent between friends.
That's the annualized rate seen in Q1, the first three months of the year. It was the first downturn in 12 quarters. Look at the graph - it makes it
clear. And it was worse than the early second estimate of 1 percentage drop. The cheaper spending grew less than previously thought, exports
tumbled at a rate of nearly 9 percent. The Whitehouse says the numbers show there's still a lingering chill from the recession.
Now of course, the big economic story in the first quarter and the reason why everybody says that number was so bad. (RINGS BELL). It was the
weather. So, join me please, if you will, in the "Quest Means Business" Weather Center where Ms. Harrison may not be here, but allow me to show you
the meteorological reasons why we might have had GDP discomfort.
Let's start in the United States. We had a very cold winter in the United States, and that led to the GDP number being down the best part of 3
percent. But as you move across, you have a warm front that came into the U.K., and that had a rather strong, spring feel about it - GDP was up
nearly 1 percent. By the time you get into southern Europe and the main part of the continent where it was a lot warmer, GDP number has improved
not so much - it's down, just up two-tenths of 1 percent. You get the idea of how once you get down here, you're getting much stronger numbers. Tom
Sater is at the World Weather Center. Put it into perspective. I can see the numbers, you tell me the weather.
TOM SATER, METEOROLOGIST FOR CNN INTERNATIONAL: Well, Richard, -2.9, a little lower than expected, but this winter was quite harsh. Records were
set for cold and for snow. Just to give you a picture, a reminder - this was February in the city of Chicago with Lake Michigan frozen over. And
that wasn't the only lake. The Jetstream pretty much like you said with Europe warming up, the western part of the U.S. was warm and above average.
But the Jetstream diving southward, a deep trough well below average. Remember, Richard, the term earlier this year - the polar vortex? We
talked about that. The coldest air -
QUEST: Right.
SATER: -- making its wall all the way down to the deep South. Not just the top 15 coldest as far as the years go, but overall for the U.S., the
average temperature this winter was the coldest we've seen since 1985 - that's almost 30 years. The Great Lakes were freezing over, merchandise
could not be taken and from its destination to point to point. We saw the satellite pictures of the ice. And this is what's interesting. The
records for the ice - the worst icing over the Great Lakes was in 1979 - it was at 95 percent. But this is the second worst at 92 percent, and we just
lost the last bit of it just a few weeks ago. But it was not just the cold, which by the way, when you talk about freight on railways, it was
buckling the tracks, so we couldn't get the merchandise just in the U.S. on the rail systems, and then you toss in cities which had their snowiest year
on record the first quarter. But Philadelphia the second, Chicago the third, Indianapolis. In fact, the snow totals were so great, hundreds of
cities blew their budgets for snow removal for salting the roadways. We even had problems in Atlanta as well. So, not to mention we got people
can't get to work -
QUEST: Oh!
SATER: -- it costs more to heat the businesses - what a mess.
QUEST: What a mess, what a reason and that is why we see the numbers very clearly - that -2.9 and better performance in Europe. But now let's look
forward and see what it's likely to be and have an economic forecast. So, you have in Q2 2 and 1/2 percent. A top point here, 4.1 percent. Then
you've got this fall and this fall, but if the economists are right, then by the time we get to Q2 in 2014, we should be seeing a number of 3.4
percent. Sunny weather as we go.
William Lee is a managing director of global markets at Citigroup. He join me now. William, I can see the forecast. The first quarter was grim, but
Q2 will be better.
WILLIAM LEE, MANAGING DIRECTOR, CITIGROUP GLOBAL MARKETS: Absolutely, Richard. In fact, you said it right before when you said it's a great
Gross Domestic 'Problem' - a problem of the past for the economy, but a big problem for BEA in its mis-measurement of GDP. Going forward, we also look
at 3 and 1/2 or better growth going forward. More importantly, we have investment kicking in. That means the economy's not only getting stronger,
the recovery itself is getting more broad-based.
QUEST: Right.
LEE: But the problem is the measurement of GDP, and this is an example where BEA really blew it. They thought healthcare spending was very strong
and they thought it was going to grow in fact at a 10 percent annual rate with their first estimate. And that was based upon their Obamacare
numbers. But post-Obamacare, with the diversions --
QUEST: Right.
LEE: -- that have come out -
QUEST: But -
LEE: -- we discovered that healthcare spending has been really disrupted.
QUEST: Let's look at this in terms - how much of Q2 is merely make-good from Q1? Because if you do get a number of, say, 3 to 4 percent, that's a
robust performance. But you're not forecasting 4 percent or anything like it for GDP 2014, are you?
LEE: No, 2014 because of the drag in the first quarter, we have a two handle on growth, maybe even less depending on how bad that first-quarter
number is. But the rebound going forward, we have 3 and a 1/2 percent plus easily going to the second, third quarter and 3 percent plus going into
next year. And that gives up the confidence to say that not only is economy becoming more robust -
QUEST: Right.
LEE: -- but more broad-based because investments going to kick in.
QUEST: And if we talk about FOMC dots - you know what I'm talking about.
LEE: Absolutely.
QUEST: Dots and plots on the graph. We're talking now into 2015, aren't we? Where's your best guess? Looking at the first quarter, which was an
aberration, but looking for the rest of the year, where do you think FOMC raises rates for the first time?
LEE: I believe Janet Yellen and not the dots. She told us ignore the dots and I really believe her. I'm looking at where the markets are putting the
rate increase. And the best guess on part of the market and our best guess is September of 2015.
QUEST: Whoa.
LEE: That's enough time for the economy to take hold and that's a time when we are starting to think about normalizing monetary policy at a very
slow pace. And we believe that it'll be at a slow pace sometime in September.
QUEST: 2014 - 15 September. Interesting one. Good to see you. Well thank you so much for joining us. I appreciate it as always. The markets
- look at how they traded. There was a little bit of blip at the beginning of the session, it was down. Who knows? Bit of congestion in the markets
I suspect. But otherwise it was a strong session throughout. Alison's at the New York Stock Exchange. A modest claw back from yesterday's losses?
ALISON KOSIK BUSINESS CORRESPONDENT FOR CNN BASED IN NEW YORK: Yes, and you know what? There wasn't one thing that moved the markets, but GDP did
factor in but obviously not in the direction that you would expect. Many believe what's happened here is that the number had already been factored
into the trade, especially, you know, listening to all the earnings and economic reports come out in the first quarter, droning on and on about how
the weather made everything slower. And we ger (ph) also the GDP reported backward looking. So many are, as you just heard from your guest just now,
everybody feeling better about the second quarter's going to look, especially seeing that there's improvement in other reports - from housing
to manufacturing, to jobs. So you tell your investors seize on the positive, stocks sending in the green. Richard.
QUEST: Alison Kosik at the New York Stock Exchange. That's quite enough talk about cold weather as we move into the hot summer sun. In just a
minute, old school broadcasters take on the online upstarts and so far, the broadcasting establishment have the courts on their side. The full story
after the break. This is "Quest Means Business" live from New York. (RINGS BELL)
(COMMERCIAL BREAK)
QUEST: Google has been showing off what it hopes we'll all be wearing sometime soon. It's the latest version of Android that goes way beyond
smartphones and tablets. Laurie Segall joins me now. Good to see you, good to see you. Look, all this smart stuff , in other words, smartwear
we're going to be wearing. What have they announced today there in conference?
LAURIE SEGALL, TECHNOLOGY CORRESPONDENT FOR CNNMONEY: What's so interesting is the idea that they are trying to unify their technology
across all platforms - like right what you just said. And what they did was the kind of talked about wearables. We've all been waiting to hear
more about the smartwatch, everybody wants to know Google, Apple. And they talked about Androidwear. Now that's their platform of pushing Android
operating system into the smartwatch, and they -
QUEST: What's the whole purpose of it? I mean, I see behind you the pictures we've got. We've obviously got the wear - which is with the phone
-
SEGALL: Yes.
QUEST: -- we've got the car, we've got all these different wearables and usables that are a long way from what I'm used to.
SEGALL: Well, think about the smartwatch. People - you know, we've seen this come out and everyone's like OK, why do we really, really care? Well,
I want to play you a demo that showed some of the cool features, that they're actually able to use with this new technology. Take a look.
(BEGIN VIDEOCLIP)
DAVID SINGLETON, DIRECTOR OF ENGINEERING, GOOGLE: It's finally possible to make a powerful computer small enough to wear comfortably on your body all
day long. Throughout the day, if Jeff receives a notification which buzzes his phone, his watch will vibrate on his wrist and show him what's up at a
glance. When it comes to take-out, I'm a creature of habit. Around the same time I made an order last week, they post a notification suggesting I
order again. Then I can quickly swipe to see and repeat my last order. Just one more tap to pay, and when there's a page indicator, Jeff can swipe
horizontally to see more details. When you swipe away a notification on the watch, it disappears from the phone as Jeff is showing now.
(END VIDEOCLIP)
QUEST: I don't know whether I like all this.
SEGALL: It doesn't look like you're buying what they're selling. But they're going on sale today if you want to buy them.
QUEST: What've we got here.
SEGALL: All right, so one of big announcements was the Android TV. So Google has been trying to give - get - into the TV market for a very long
time, but their first initial Google TV was actually very complicated. This is the remote - you're looking at it right here -
QUEST: Right it looks like a sort of calculus --
SEGALL: -- it always looks (CROSS TALK) -
QUEST: -- thing you used to use when you were at school.
SEGALL: In all fairness, it is from 2010, but that being said, let's look at Apple TV's remote right here.
QUEST: Right.
SEGALL: Very simple. Apple TV has been doing very well -Tim Cook said they sold over a billion dollars' worth of Apple TVs in the last year. So
Android TV was a big announcement. This is - this is supposed to be a set top box, you put on - you can connect it - to lots of - to streaming
services and that kind of thing. So this is to - this is in direct competition with Apple TV. So a lot of folks excited about this, Richard.
QUEST: All right. Many thanks, delight. Good to see you. I'm not sure wearables. When you've got a wearable watch, please come back.
SEGALL: I will, I will. Noted.
QUEST: Actually what other sort of watch could you have besides a wearable watch the more I think about it? When you're gone, we look forward to
seeing you then.
Now, shares in America's top television companies are rebounding. The U.S. Supreme Court has ruled a streaming service called Aereo - I think I
pronounced that right. Somebody will tell me anyhow. You know, I am right - it is Aereo, sounds Aereo, it must be Aereo. It violates broadcasters'
rights. CBS was the biggest winner on the stock market, up more than 6 percent. Twentieth Century Fox and Disney also rose over 1 and 1/2
percent. Aereo scoops up freely-available, accessible signals broadcast by local TV stations and relays them to subscribers, smartphones, tablets,
computers using antennas that they rent. The Supreme called that a breach of copyright. Time Warner which owns CNN was not party to the lawsuit
against Aereo, however, Time Warner supported the broadcasters.
Speaking in April, Aereo's top investor Barry Diller said a ban might endanger the evolution of TV.
(BEGIN VIDEOCLIP)
BARRY DILLER, AEREO INVESTOR: If they stop it, which they very well may, then I don't think it's the end of any world because we'll probably not
really know because you can't put yourself 20 years, you know, you can't make that leap on a maybe, kind of. But what I think will happen is if
it's stopped, it will have profound effects on the development of technology.
(END VIDEOCLIP)
QUEST: That's Barry Diller. Now, Magine is the name of the European equivalent of Aereo. The big difference is they actually work with the
broadcasters. The chief exec and founder, Mattias Hjelmstedt, joins me from Stockholm. Good evening, Mattias for joining us this evening at this
late hour. Were you surprised that Aereo actually lost?
MATTIAS HJELMSTEDT, CEO AND FOUNDER, MAGINE TV: Yes.
QUEST: Because when I look at their argument, it's quite clear - they were taking somebody else's copyright material and using it for their own
purposes. It's not groundbreaking, is it?
HJELMSTEDT: Well, we're not super surprised. I mean, at Magine TV, we've done work in this space for a long time. We founded everything on top of
doing it with the broadcasters and with the content industry, and we've been doing it for years. And they are actually supportive of doing it the
right way, and if you're not in line with what they want to do, and you're hijacking it when they are actually willing to talk to you about doing it
the right way, it's not a big surprise that the verdict became what it became.
QUEST: So, as we look forward now to this whole concept of the streaming using these devices, using third parties, what is the way forward do you
believe?
HJELMSTEDT: I mean, the way forward, I mean, if it shows something it's that there's customer demand to be able to consume content wherever they
want and whatever screen they want, and whatever time they want, at whatever place people want. That is where the world is heading, and at
Magine and in Europe, and in Germany and Sweden and Spain where we're actually live and doing things - that is exactly what we're doing. But
we're doing with the right holders and the broadcasters. So, it can happen. It doesn't stop innovation. It's actually doing the innovation
together with what's good for the industry and the ones producing TV, creating TV - is the way forward. That actually gives more innovation
because we actually can do more -
QUEST: But -
HJELMSTEDT: -- than extending a cord.
QUEST: Right, but if -- the role, though, of saying Aereo, the disrupter that has to force a change that moves things forward. Anybody can act with
everybody's consent. But if you want to create and be disruptive, you - I mean - the old argument - it's the old line, you can't make an omelet
without breaking eggs.
HJELMSTEDT: Yes, true. I mean, it depends on whose eggs you're breaking, right? I mean, the ones that produce content like this show is doing it
because they want to reach users. And reaching users in more ways, which is what we do, is actually in line what's important for this industry. The
disruption needs to happen on the distribution forum, because that one is old and they today can only watch it on the TV, whereas the consumer might
be able to watch this program afterwards.
QUEST: Oh.
HJELMSTEDT: You actually can on Magine.
QUEST: Excellent. I'm sure, I'm sure your viewing figures rise immeasurably when "Quest Means Business" is on air. Quick question finally
to you - do you - we were talking a moment ago about wearables. Wearable watches, machinery, the smartphones that go toward it. Do you think that
is the future? The wearable is the future?
HJELMSTEDT: I mean, anything that makes users or people's time and to save time to do the things they want to do - for instance for us, a wearable
that you could watch is a screen and the user wants to watch the content and an item at a screen, they don't really care about what screen and
where. So, I mean, wearables that help you save time and make more things available for you to do within that time, of course there's a future for
all of that. I mean, --
QUEST: Right.
HJELMSTEDT: -- not all of the wearables are going to be great though, but it's evolution.
QUEST: Evolution, not revolution. Thank you, sir, for joining us. Much appreciate it, good night in Stockholm. I appreciate it.
HJELMSTEDT: Thank you.
QUEST: There were clandestine conversation in Warsaw restaurants. Polish ministers have been caught out apparently saying things - unkind things -
about the British and the Americans. It's a secret recording scandal that's threatening to bring a government down. In a moment. (RINGS BELL).
(COMMERCIAL BREAK)
QUEST: Some breaking news now. Poland's government has survived a parliamentary confidence vote over a secret tapes scandal that's
embarrassed the prime minister, Donald Tusk according to Reuters News Agency out of Warsaw tonight. Tusk's administration is being rocked by
elite recordings that appear to reveal his ministers' true thoughts about Polish allies.
(BEGIN VIDEOCLIP)
DONALD TUSK, POLISH PRIME MINISTER, VIA TRANSLATOR: Outside of Poland we need certainty that the Polish state functions effectively and that it also
manages this unusual and serious crisis. A day ahead of negotiations in Brussels, the Polish government has a mandate deriving from elections at a
parliamentary majority.
(END VIDEOCLIP)
QUEST: Now of course a Polish magazine says the tapes showed the foreign minister Radoslaw Sikorski described Poland's alliance with the U.S. as
'worthless.' Hardly the thing you want to see when you've got pictures with the U.S. Secretary of State John Kerry. It also says E.U.'s an
expletive to mock David Cameron, the British Prime Minister's handling of Europe. You won't hear that word on a family program like ourselves.
Sikorski is said to have described Mr. Cameron as resorting to stupid propaganda to appease the Eurosceptics. Pawel Swidlicki from the group
Open Europe joins me now from London.
The vote, Pawel, is 237 to 231. So he got by - the Prime Minister - only just. He got by. But how damaged is Donald Tusk as a result of this
scandal?
PAWEL SWIDLICKI, RESEARCH ANALYST, OPEN EUROPE: I think Tusk is definitely damaged. His government is damaged. And although he survived the vote of
confidence today, there are definitely longer-term questions arising from the scandal. No one really quite knows who exactly is behind it, and
although his junior coalition partner lends him their support today, they themselves have said they want answers and possibly also they want the
cabinet reshuffled to get rid of some of the ministers who have so compromised themselves.
QUEST: Now, we don't want to get too much into the minutia of the Polish domestic political scene, certainly not when we have Euro summit, a council
meeting to discuss Jean-Claude Juncker. Now, Poland's comments against Cameron's attempts to stop Juncker. We believe that was some time ago.
But how weakened is Tusk when he goes to the summit now?
SWIDLICKI: I think Poland's actually been quite critical of David Cameron's E.U. form(er/ of) strategy for a while, so, although the comments
were much more forthright and colorful than they would be in private, they don't come as that much of a surprise. Although, again, we need to
remember this was about business in the spring. Don't know exactly when, but in the spring, and since then we've had the crisis the Russia and in
Ukraine which has, I think, forced the Polish and the U.K. governments to work through the crisis together. And it's actually paradoxically helped
to - helped to strengthen ties between the two countries.
QUEST: Good to see you, Pawel. Thank you very much for joining us from London this evening.
SWIDLICKI: Thank you.
QUEST: Etihad's signaled its intention to buy a 49 percent stake in the troubled Italian airline Alitalia, and Alitalia's agreed. We don't know
how much money is on the table for the stake, but it's necessary if Alitalia is to survive. Our emerging markets editor, John Defterios, takes
a closer look at the deal.
(BEGIN VIDEOCLIP)
JOHN DEFTERIOS, CNN'S EMERGING MARKETS EDITOR AND ANCHOR OF "GLOBAL EXCHANGE" SHOW: Etihad is spreading its wings yet again by agreeing to the
49 percent stake in Alitalia. The two parties put out a joint statement, but financial details were not disclosed. Italy's transport minister said
when the Alitalia board gave a green light ten days ago, that Etihad would make an investment of $1.7 billion by 2018 with over $700 million
straightaway. This represents the biggest foreign stake in a European carrier, taking it to the limit set by the European Commission, and as a
result, Etihad becomes the biggest shareholder.
Etihad executives who spoke on background during the talks told me they would not agree to a deal without favorable terms on job cuts, reported to
be around 2,200, and Alitalia's $1.3 billion of debt. Alitalia staff has resisted layoffs, even though losses continue to mount. The Italian
government along with two major Italian banks stepped in with a $680 million bailout in 2013. Etihad has grown through its deal-making
including stakes in Air Berlin, Air Serbia and Aer Lingus in Europe, and Jet Airways of India and Virgin Australia.
Etihad kept a low profile today but CEO James Hogan spelled out his strategy when he placed a huge plane order at the Dubai air show late in
2013.
JAMES HOGAN, CEO, ETIHAD AIRLINES: Having that network offering is key. But why do we have to duplicate their overhead. Why can't we have centers
of excellence? And where you get the lowest unit cost - whether it's reservations, whether it's pilot training - unit cost reduction is as
important as exceeding our guests' expectations.
DEFTERIOS: The challenge for Hogan is proving not only that he can pick up passengers, but he can turn around loss makers like Air Berlin, and now
Alitalia. John Defterios, CNN Abu Dhabi.
(END VIDEOCLIP)
QUEST: As you know, we cover aviation quite closely on this program -- one of our dearly beloved subjects. And one of the issues of course in the
industry at the moment is very much whether Etihad can actually turn 'round those airlines in which it's taken stakes. Or is it doomed to lose further
money?
European markets all closed lower. Have a look at the numbers irritate - (LAUGHTER) -- I'll try that again - the deteriorating security situation in
Iraq, now that's weighing on the market sentiment. If you look at the numbers, the Paris CAC crop (ph) was down one and quarter percent. All the
other markets were off quite sharply as well.
The Twitter @ richard quest - I said to you earlier that you and I can have an off-air chat about. As always, I'll do me best to sort of tweet back
personally -- @richardquest is the Twitter name. When we come back, FIFA says it's investigating a very serious incident of Luis Suarez biting.
With loads of money at stake, we look at the endorsements that may be on the line that he might just have taken a chunk out of.
(COMMERCIAL BREAK)
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.
Iraqi officials say at least 57people have been killed in attacks by Syrian war planes. This amateur video's believed to show the aftermath of one of
those attacks in Al-Qaim (ph). Syrian state media is saying the reports are completely baseless.
Officials in Nigeria say at least 21 people were killed and 17 injured in an explosion at a busy shopping mall in Abuja in Nigeria. It's not
immediately clear what caused the blast. Investigators are combing the area for signs of explosives. The U.S. economy had its worst quarter since
the recession ended five years ago. The Commerce Department revised down its first quarter estimate and showed the economy shrank at an annualized
rate of 2.9 percent. It was much worse than earlier estimates.
Reuters is reporting that Poland's prime minister has just survived a vote of confidence following a bugging scandal that's embarrassed his
government. Meetings between government ministers including the foreign minister, finance minister and the head of the Central Bank appear to have
been secretly recorded. A Polish magazine reported details of alleged conversations.
In Wednesday's World Cup matches so far, Argentina's defeated Nigeria 3-2. Both teams will advance to the round of 16. Bosnia has beat Iran 3-1.
While that was Bosnia's first ever World Cup win, both they and Iran are out. It was bragging rights only. I'll have a full report and an update
on the games in progress in just a moment.
At the world cup today, everyone is still talking and not surprisingly about Luis Suarez, the Uruguayan star who appeared to bit an Italian player
during a match on Tuesday. Now today, the captain of the Uruguayan team says the story is being overblown because the British media have a grudge
against Suarez.
(BEGIN VIDEOCLIP)
DIEGO LUGANO, URUGUAY CAPTAIN, VIA TRANSLATOR: The British media has a persecution against Suarez. This is not new, they sell these daily
(inaudible), otherwise you wouldn't even be here. But why (ph) against Italy, but why (ph) against Colombia. I don't know what a British
journalist is doing here talking about Suarez.
(END VIDEOCLIP)
QUEST: If in doubt, blame the British media. Now, Suarez has a number of sponsors. He represents Adidas, the 888poker website, and recently did an
advert for the headphone company Beats. Join me at the Super Screen where flags - we will be removing some of these flags from the floribunda before
the week is out. Anyway, back to Suarez. These are some of the sponsors that he is with. His Premier League Club, EPL has tie-ups with Standard
Charter - the bank, the Warrior Sportswear brand and the airline Garuda in Indonesia. Some sponsors have already commented. 888 says it's seriously
reviewing its relationship with the player, as we will not tolerate any unsporting behavior." Adidas says it is aware of the incident. Adidas
says, "We await FIFA's full investigation into this matter and will respond accordingly.
The main sponsor for the Liverpool Football Club which is the bank Standard Charter says, "Give it's an ongoing investigation, this is a matter for
FIFA." A sort of mealy-mouthed statement if ever you saw one that hedged their bets suitably and diplomatically. Amanda Davies is in Rio for a
World Cup update. So, Amanda, I think as a Brit you're responsible according to the Uruguayan team. It's all a plot by the British media.
AMANDA DAVIES, CNN SPORTS CORRESPONDENT: Absolutely, Richard, because bearing your teeth and digging them into somebody else's shoulder is
absolutely acceptable on the football pitch even if it isn't acceptable anywhere else in life. What ridiculous nonsense as far as I'm concerned.
QUEST: (LAUGHTER).
DAVIES: What I can tell you, Richard, is the deadline passed half an hour ago for Luis Suarez to have his say, to put his defense forward to World
Football's disciplinary committee. We haven't heard anything from them as yet. We understand they're reviewing the evidence. What can they do if
anything? Well, the maximum suspension they can give Luis Suarez under their rules and regulations is 24 matches or a two-year ban from football
as a whole. On the whole, FIFA bans that we've seen in the past around World Cups have just been international bans, not domestic bans, because of
all the legalese that comes around essentially dealing with players who are product on bay (ph).
QUEST: Right.
DAVIES: But the bans that Suarez has received in the past for his two previous biting incidents, have both been less than ten games each. So,
the call here is that this one really needs to make an impact and be much, much tougher.
QUEST: In other words, we need to take a bite. Actually we mustn't make a joke about this because it's a serious - it is a serious matter in terms of
discipline and (inaudible). Now, on today's matches - Bosnia played - how did the matches? Because it was basically a lot of the matches now are no
more than bragging rights, aren't they? 'I won, you lost.'
DAVIES: Yes, absolutely. There's basically four games a day this week. They're coming down to who goes through and who goes home, it's as simple
as that. But it's really been a tale of two strikers today, Richard. Whilst there's been all the controversy around Luis Suarez, Argentina's
Lionel Messi has been letting his feet do the talking. He scored another two goals for Argentina -- his fourth goal of the tournament to help
Argentina through as you mentioned. Argentina beats Nigeria 3-2. His first goal after just 2 and 1/2 minutes smacked the ball into the roof of
the net. And then there was a very Messi-esque spectacular pre-kick, just on the stroke of half time. But he's now scored ten goals in eight games.
A lot of people were saying that this was the World Cup, he needed to step up to take -
QUEST: Right.
DAVIES: -- that mantle from Diego Maradona. He's certainly done that. So, Argentina through, Nigeria through, Bosnia got the three points that
they wanted - their first ever World Cup points - but they and Iran going home.
QUEST: And we hope you'll help me in the days - before the week is out - as I have to unpick some of these flags from our flag tree in the studio
with my knowledge of flags. What is the scientists or name for the science of flags? I'll have to find out what that is. Amanda Davies, thank you in
Rio de Janeiro. There is a name for the art of flags, the science of flags. Somebody will tweet me it before we are finished.
Time for an update on the "Quest Means Business" Footy 32 index. You'll be aware this is where the value of each team in the World Cup rises by $10
million for each goal scored and falls by $10 million with every goal that they let in. So, we're going to look at Uruguay - we're going to look at
Uruguay today, and that's right in the middle. And you can see that the value of Uruguay has not increased and it has not - it's exactly a zero.
The base value remains $242, and that's why - because - Uruguay has scored four goals and it has conceded four goals. And now of course Uruguay has
the problem of Luis Suarez could be suspended for possibly for the rest of the tournament. So in corporate-ese terms, the futures points lower in
terms of Uruguay.
Now in terms of Iran, we need to go to the bottom - right at the bottom, look at Iran. Get down here, come on. Iran is down 72.9 percent. Why?
Because Iran has scored one goal but conceded four. So its net value has dropped 40 - from $41 million according to Lloyd's. The Quest Footy 32 has
now Iran worth just $11.1 million. They are set to delist by the end of the week.
The Iranians did find the back of the net today - they scored their first goal in the World Cup. Now, all - all the teams - let's have a look at all
the teams - have now scored at least one - at least once. Finally, to Costa Rica. Costa Rica is right at the top. Costa Rica - look at this.
Costa Rica. Get in there. Costa Rica showing a gain of 97.4 percent, and you'll see why. The base value is $30 million according to Lloyd's list,
but they have scored four, only conceded one, their value's gone up $30 million. We count this as clearly a startup success. It's got proven
titans, Italy and England. The team's got investors young and old much to cheer about. The stock is clearly up some 90-odd percent in just two weeks
into the tournament. And the fans of course not surprisingly have been celebrating, you can imagine.
Now, chief executive of Qatar Airways is a man driven by details. He's always perfecting. Next, Akbar Al Baker will show me his brand new
terminal - no - his brand new airport and explains why everything went just fine.
(COMMERCIAL BREAK)
QUEST: Now on Monday, the chief executive of Qatar Airways, Akbar Al Baker, was on hand to greet Britain's Queen Elizabeth. When Her Majesty
opened the new terminal - T2 Heathrow Airport - the reason Akbar was there is because Qatar owns part of the company that owns Heathrow Airport. So
he was representing the shareholders. We don't know if Mr. Al Baker gave Her Majesty any tips on new airports, but he was fresh from her opening an
airport in his own country. And what an airport that he devoted a lot of energy to perfecting. When I visited Doha's new airport, Akbar Al Baker
himself showed me around. It's this week's "Business Traveller" update (RINGS BELL).
(BEGIN VIDEOCLIP)
QUEST: Qatar Airways began 17 years ago as a regional carrier under the leadership of Al Baker. Just known as the Chief, it's quickly grown to
become one of the world's major airlines - part of the global shift to the Gulf. It's transformed Doha into a dominant hub.
AKBAR AL BAKER, CEO, QATAR AIRWAYS: We had small glitches but nothing substantial. We had an issue with our baggage system which is - which
absolutely notorious. We had software issues which we already had a plan B. The whole concept is getting into a mall. This becomes a destination
for people.
QUEST: The airport is huge, around a third of the size of Doha itself. Once fully operational, Hamad International will handle up to 50 million
passengers a year. Where are we going now?
AL BAKER: We are going to the business class lounge. It is not yet open so I will give CNN the privilege of seeing it -
QUEST: Thank you.
AL BAKER: -- the first time. It's around 11,000 square meters. You can see that these are cocoons where, you know, friends can sit in seclusion.
All over here, these are - they're areas where you get flight information display and you can also watch a program. And all these seats and
furniture here is by designers like B&B, Technol (ph), Machio Grasse (ph). There is nothing like this anywhere in the world and I can say this with
confidence.
QUEST: I'd visited Hamad two years ago. The one thing I remember from that time was the Chief's eye for detail.
AL BAKER: This should be both male and female.
QUEST: Today, he's as meticulous as ever.
AL BAKER: Look at the details here - the match between the plaster and the stone. Look at the quality, look at the shape to see how is the surface.
This is deliberate, the shadows. You can see the quality, you can see touches, you can see the detail. And we will not compromise. And this is
what is making us ahead of everybody.
QUEST: Did you have a nervous moment the night before it opened and your planes were due to arrive here?
AL BAKER: I have always nervous moments, and I really enjoy being nervous because that keeps me - keeps my eyes on the ball.
(END VIDEOCLIP)
QUEST: One of the great CEOs in the aviation business - Akbar Al Baker and his nervous moments. Tom Sater is at the World Weather Center. Tom, I
just got back to New York after being out of the city with someone. Good grief, in the few weeks I was gone, who turned up the heat?
SLATER: (LAUGHTER)
QUEST: I mean 'schmitzing'(ph) isn't the word)!
SLATER: The last two weeks have been the hottest that we've seen. The humidity is just rising. Unfortunately, now you've got rain in your
forecast as well. We'll get to the U.S. and we'll start with areas of the U.K. No real reports of - or any expectations, let's say - of travel
delays based on weather in most locations. Now, across Europe, there are two storm systems that we're going to talk about. One's a nuisance, just
moving into parts of the northwest. Currently it's 17 in London, Paris is 17, Berlin 11 degrees which had a pretty good downpour. Show you the
radar, but here's the two systems - a nuisance and then a better risk, or maybe some property damage, large hail. This system's had history of some
damaging winds as well.
But I want to point out this little spin right here in eastern Germany. The radar even shows some pretty good returns as we've had some health
reports of heavier rain, even some small hail. The next batch with this nuisance shower activity could produce I think possible delays for
Wimbledon maybe into Friday and to Saturday as well. But here's where we're watching the threat again for the storms to really blossom, and
they've had a history of producing 100 millimeters in just four hours in southern France. 3.5 centimeter diameter hail.
So, again, the history proves that once this system moves across one of the Balkan countries here, it'll slide to the northeast and things'll clear
out, and it'll be much better. But it's going to be a very rough 24-hour period. Not only do we have a level 1 or a level 2, but there's a large
area of real estate here from Sarajevo to Bucharest with a level 3. When that happens, you can almost expect the stronger storms to prevail. Here's
the high temperatures across parts of Europe - Kiev 18 degrees on Thursday, 38 in Athens, the heat is on in Greece as well.
In the U.S., here's where this rain comes in, a possibility of some low clouds. Again, New York, D.C. - we're watching it right now start to
really come down from the Dallas Metroplex over toward the Houston area, around New Orleans. All of this moisture, Richard, will be sliding to the
east. Again, you can see the shower are very close, it's just going to add to your humidity and your heat as well. Maybe a passing shower will cool
you down the next 24 hours.
QUEST: Tom Sater, thank you very much indeed. Appreciate it. Tom Sater joining us from the World Weather Center. A busy day for Tom one way and
another. A new report says climate change will have a far bigger impact on our planet and the economy than previously thought. Crop yields are set to
fall dramatically, and property worth hundreds of billions of dollars could soon be submerged. We seem to hear the reports and we hear the warnings
again and again, but now the level of detail in the report is surprising. Because it's backed by two former U.S. treasury secretaries who spoke to
CNN's Christine Romans.
(BEGIN VIDEOCLIP)
Male 1: This is not saying 'this will be the outcome,' because no one knows what the outcome will be -
CHRISTINE ROMANS, CNN'S CHIEF BUSINESS CORRESPONDENT AND THE HOST OF "YOUR MONEY" SHOW: Right.
Male 1: We're dealing with risk, and we need to take out risk insurance. And the fact that this study uses risk modeling methodology that is widely
accepted by this business, I think will make a big difference. But we - we're going to need to just take the study and build on it because
businesses I believe need to show more leadership, show more leadership in the actions they're taking to protect themselves to - from - the immediate
- more immediate impacts of climate change where they're just going to have to invest in resilience. Also they're going to have to - I believe - that
they should press their national government to take policy action.
ROBERT RUBIN, FORMER U.S. TREASURY SECRETARY: Almost all business leaders see this is a serious issue, but the problem is, I don't think they've
internalized the effects that this can have on their businesses and also society more broadly to the extent necessary to cause them to coalesce
around this. Not only with respect to the way they run their own businesses, but I think in some ways even more importantly to engage with
political leaders which they do all the time to try to move the political system toward dealing with this.
(END VIDEOCLIP)
QUEST: Vexillology. Many of you replied quickly telling me what it was. It is of course the study of flags. When we come back after the break,
GoPro cameras have revolutionized the art of filming extreme sports. We took one trapeze-ing. The company is now going for its biggest trick yet.
(END VIDEOCLIP)
SAMUEL BURKE, BUSINESS CORRESPONDENT: Holy Moly. Whew!
(END VIDEOCLIP)
(COMMERCIAL BREAK)
QUEST: Now these cameras have shown us extreme sports from the angle of competitors. As the staff of QMB know only too well, this program is an
extreme sport. We mounted this little camera on our floor director's chest. This is what the beginning of the show looked like from her point
of view. Some reports say GoPro's IPO which happens on Thursday will be the biggest consumer electronics debut in more than two decades. It could
raise more than $400 million for the company. Samuel Burke is here to tell us if the hype over the little camera is justified.
BURKE: Well we're expecting it to price at any moment now between $21 and $24 a share. And you guys didn't just put that camera on your director,
you also put it on me and sent me to trapeze school.
(BEGIN VIDEOCLIP)
BURKE: Whether it's daredevil tots, fetching canine or an out-of this world beep from the edge of space - GoPro is taking the camera industry to
new heights. And now, ten years since the sale of its first ultra-portable cameras, investors have a chance to snap up shares.
MAX WOLFF, CHIEF ECONOMIST, CITIZEN VC: There's some real questions about how viable it is as a long-term investment because it's awfully specialized
in a niche, and it's coming into a somewhat pessimistic market as relates to high-tech offerings, but I do think it's in the wearables space and that
space is hot.
BURKE: GoPro's story began with a real splash. San Diego surfer dude Nick Woodman's goal - to create breathtaking sports videos and share them with
his fans. The camera's lightweight, wearable, mountable - it fits in the palm of your hand and gives people a bird's eye view of all the action.
Holy Moly! Whew! With GoPro, Woodman is now a self-made billionaire, revolutionizing the world of video, selling more than 8.5 million cameras.
But not everything is sky-high for GoPro. Revenues declined in the first quarter of this year, it's facing growing competition from much larger
camera companies like Sony and Samsung, and tech watchers wonder if smartphones and smartwatches might replace GoPro, the way they did the flip
cam.
PAUL LAMONICA, CNNMONEY: You really would need a phone that can withstand a lot to replace the GoPro, but I wouldn't rule anything out. Obviously
Google and Apple are looking at every single consumer market and, you know, they're finding interest in just about everything right now.
BURKE: Even if GoPro can't capture investors' hearts forever, videos like these keep capturing everyone else's heart.
(END VIDEOCLIP)
QUEST: Now, this is the little GoPro camera that works - or assuming I don't touch anything improperly. Samuel, why do you think this is going to
be a success when others like it have not been successful.
BURKE: Well I'm actually a bit of a skeptic, Richard, because I think what's going to stop me one day from just mounting my smart phone on
myself. You know, flip cams came and knocked - were knocked out - by smartphones. So I think one day a smartphone, smart watches, smartglasses
really might give GoPro a run for their money.
QUEST: But except you're not going to put your smartphone on your body if you're going to be doing that trapeze stuff.
BURKE: Well, what if I have a little case that I can just slip it in, and what if the phones get more durable ?
QUEST: So are you saying that this thing is passe? It's going to have obsolescence - beaten like the flip cam?
BURKE: No, no, no, no - I'm not saying that. I'm saying not yet.
QUEST: Not yet?
BURKE: Not yet.
QUEST: When? When is it priced by the way? I'm trying to see if it's already priced.
BURKE: Not yet, its -
QUEST: You like that word phrase to say 'not yet.'
BURKE: Not yet - between $21 and $24 dollars not yet. No, I think that Google Glass might give it a big run for its money. When people have a
pair of glasses mounted to their head that they're comfortable doing, some things like trapeze schooling, and then it'll give it a run for its money.
But now yet.
QUEST: Now, wait a minute - I think we've finally got a picture out of the camera. Yes, there we are. We finally managed to get a picture. Ha, ha,
ha. When we come back after the break, I will have a "Profitable Moment" which just proves you can go to all sorts of places with one of these.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." The Truman Show has truly come of age. On this program tonight, we not only showed you about wearable
watches, but we've also told you about GoPros - cameras that will literally follow and show you everything that's happening in your life. But I
question and I wonder - how much of this is just generating a society that knows the price of everything and the value of nothing. When you're life
is defined by what you see down the lens, never mind it being a job, what price is the value that comes from it? Think about that next time you want
to GoPro somebody in the face. And that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hour
ahead, (RINGS BELL) I hope it's profitable. I'll see you tomorrow.
END
