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Quest Means Business
Disagreement Over Who Will Lead the EU; FIFA Bans Suarez For Four Months; Interview with Lord Browne
Aired June 26, 2014 - 00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(CLOSING STOCK EXCHANGE BELL RINGS)
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: (inaudible) all of the session but it did recover towards the close. Small group on the balcony
from BEE, and the big man's going to hit the - no he's not.
(APPLAUSE)
QUEST: Go on! Go on! Oh, dear. Talk about a wimpy gavel. It's Thursday, it's June the 26th. Tonight, the controversial Mr. Juncker.
The Union disagreement over who will lead the E.U. Also, the sanctioned Mr. Suarez. FIFA lands him a four-month ban, and lessons from Lord Browne,
the former chief of BP tells me honesty really was the best policy. I'm Richard Quest in New York and I mean business.
Good evening. Tonight European leaders are meeting to decide who will take charge of the European Commission for the next five years. If they
pick anyone but this man, it will be a major surprise. He's Jean-Claude Juncker, a politician from tiny Luxembourg. He seems all but assured of
getting the top job. A long list of European leaders have now said they will back Mr. Juncker. The British Prime Minister David Cameron has vowed
to fight to the end to keep Juncker out of the top job. CNN's Jim Boulden now explains what the standoff is all about.
(BEGIN VIDEOCLIP)
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Steady as she goes. That's how you could describe the likely appointment of Jean-Claude Juncker
as the next president of the European Commission. The former Luxembourg prime minister is a European insider, a deal-maker who was seen as one of
the architects of more power for Brussels in the wake of the economic crisis.
JEAN-CLAUDE JUNCKER, FORMER PRIME MINISTER OF LUXEMBOURG: This is a great day for European democracy.
BOULDEN: Juncker is the leader of the largest group to emerge from last month's European Parliament elections. For the first time, candidates
for president have come from the Parliamentary Party nominations. They even held a little-watched debate before the elections - another first for
the E.U.
JUNCKER: -- but I don't have a project of austerity. I'm in favor of sound public finances.
BOULDEN: The whole process is roiling British Prime Minister David Cameron, who wants a wider list of candidates - not just those chosen by
the European Parliament. Cameron also wants a fundamental shift of power away from Brussels and back to national capitals, a move not supported by
Eurocrats like Juncker. All this even though the president has limited power.
TOM USHERWOOD, UNIVERSITY OF SURREY: The commission president doesn't decide things, he can make proposals, but he's got to get the rest of the
commission to agree with him or at least a majority, and then you've got to get the Parliament and the member states to agree through the legislative
procedure. So, actually, it's a lot of fuss over something that probably has a fairly minimal impact.
BOULDEN: Reportedly, behind closed doors, Juncker has lost the backing of Germany and Italy among others. But publically, these countries
are now officially backing Juncker.
SARA HAGEMANN, LONDON SCHOOL OF ECONOMICS: All of this comes as part of a package deal as well, so we've already seen moves from other
governments that would back Juncker if they got something in return. Now, Cameron hasn't played that card.
BOULDEN: This debate is coming to a head during the two-day summit on the block's agenda for the next five years, and this fight is being seen in
many circles as damaging to Britain's standing within the E.U.
USHERWOOD: He can't really succeed. He's in a distinct minority. He hasn't got enough allies, he's annoyed a lot of people, and in the end I
think Juncker is very likely to get elected this week.
BOULDEN: But Cameron losing the vote may help him at home.
HAGEMANN: It is a two-level game, absolutely, and Cameron is very much playing to a domestic audience. We have elections next year and we
have a very heated E.U. debate in the U.K.
BOULDEN: If he wins his own election next year, Cameron has vowed to hold an in/out referendum on E.U. membership in 2017. The Juncker vote
seen as just one more step to a possible British exit from the E.U. Jim Boulden, CNN London.
(END VIDEOCLIP)
QUEST: There are enormously complicated and different arithmetic problems involved. And they're not simple for the European leaders. Join
me at the Super Screen and you'll see the complex calculations that they are making. This is our very own "Quest Means Business" Euro calculator.
So, Chancellor Merkel wants to add budget flexibility, giving member states leeway to tackling problems and meeting targets. So she adds in
flexibility. Fredrik Reinfeldt of Sweden, he wants the results when all's said and done - he wants to see the result of the election and says he'll
go along with the majority come what may. However, there is a question with the additions and the results.
What happens if you subtract the United Kingdom? Well they may leave the E.U. because David Cameron is looking increasingly isolated. Put it
all together and you get a larger and a smaller, and you end up with countries like Estonia where the prime minister says he's more in favor
than against Jean-Claude Juncker. I asked Estonia's prime minister whether European leaders were ready to rubber stamp Mr. Juncker.
(BEGIN VIDEOCLIP)
TAAVI ROIVAS, ESTONIAN PRIME MINISTER: I wouldn't call it rubber- stamping. I think if European Council wouldn't agree on a particular candidate, they wouldn't name him. So I think that European Council does
have a say in this process and I do feel that there is majority of European political leaders behind Jean-Claude.
QUEST: One of the big issues for ordinary Europeans is that they really don't know what Mr. Juncker will stand for. They don't know his
reformist credentials. The election that took place sent a strong message in many countries. And what seems to now be appointed is one of the old
school.
ROIVAS: Well, what all Europeans do know is the impressive track record that Jean-Claude Juncker has as a long-time prime minister of
Luxembourg but also eight years representative of the Eurogroup which was also a tremendous job. Of course it is partly up to us European prime
ministers to agree on the agenda that is given to the Commission as the plan for the next five years.
QUEST: But are you concerned as a leader that this decision which might alienate the United Kingdom, and David Cameron saying that there are
- there will be - consequences to this, could drive the U.K. further away from Europe - the E.U.?
ROIVAS: I was in London last week meeting David and also other politicians from U.K., also Nick Clay (ph), and I do understand them, but I
do see also that now we have had developments on the agenda for the next Commission, and I do see several things that should be positive outlooks
also for Britain. I think in the agenda there are several things that the Brits consider theirs or they consider good for Europe.
QUEST: We need to talk about Russia and the E.U., Prime Minister. Let me ask you, do you believe it is realistic that Russia would attempt to
destabilize any of the Baltic countries, any E.U. country?
ROIVAS: Well first of all it's important to understand that the neighboring E.U. countries are also members of NATO, and it is not
thinkable that anyone would wish to destabilize a NATO country. But of course I think all of Europe should look very concernedly what is going on
in Ukraine. I think once we have a country in Europe who thinks that it is OK to change borders by force in the 21st century. I think we should be
worried and I do see that European leaders are very worried.
(END VIDEOCLIP)
QUEST: That's the prime minister of Estonia joining me and speaking to me earlier today. The stock markets now - I'm on my very best behavior.
Far from being down in the stock exchange today, Alison Kosik is with us. How lovely to have you with us this -
ALISON KOSIK, BUSINESS CORRESPONDENT FOR CNN BASED IN NEW YORK: It's good to be here.
QUEST: Now look at this map - graph - whatever.
KOSIK: (LAUGHTER).
QUEST: What happened? Something happened here but then it sort of dwindled back up again.
KOSIK: It did, it did. So what happened was where you see that dip, that's when the Dow fell a little over 100 points.
QUEST: Why?
KOSIK: Because Saint Louis president James Bullard came out to another network and said that because the economy seems stronger, he thinks
that interest rates are going to be raised -
QUEST: Right.
KOSIK: -- and the first quarter of next year. That spooked investors because the Fed has only said they're going to go ahead and raise interest
rates next year so everybody wasn't thinking that, 'oh, next year means middle or end so they were spooked.
QUEST: That's what happens if you flirt with other networks.
KOSIK: But he's a non-voting member so maybe why you saw things settle out.
QUEST: If he carries on speaking like that to other networks, he'll remain that way.
KOSIK: (LAUGHTER).
QUEST: Let's talk about GoPro - closed up 30 percent.
KOSIK: What a day for GoPro. This company is really hot. In fact, one analyst saying this is clearly a hot brand that is on fire because of
the popularity. So this is an IPO that priced at the high end at $24, as you said, closed at $31 a share today. But not all IPOs are perfect. In
the first quarter, GoPro sales have dipped a bit. Also, you've got a lot of competition coming. Rivals are trying to, you know, create their own
wearable gear -
QUEST: Don't rain on their parade for today.
KOSIK: Well, you know, that's the reality of it. There's hot competition in this wearable sector.
QUEST: You're a hard woman, hard woman. Alibaba - Alibaba has filed with the SEC, where's it going?
KOSIK: Oh it's going to the NYSE, the New York Stock Exchange -
QUEST: Yes, they're going to be pleased.
KOSIK: -- of course they are. The New York Stock Exchange, yes, say "We are pleased to welcome Alibaba Group to the New York Stock Exchange
where they're going to grow, where they're going to join our network of the world's best companies and leading brands." The NASDAQ losing out. This
is a huge shocker, even though this was rumored -
QUEST: Right.
KOSIK: -- to have happened. You know, the NASDAQ is traditionally the place where tech companies go. It's really been losing its edge - look
at Twitter. Guess where Twitter listed - it was at the New York Stock Exchange. So this is going to be a big one.
QUEST: You want to, don't you?
KOSIK: I want to touch the bell. Hey, it didn't ring. Oh, my God, how embarrassing!
QUEST: Try again.
KOSIK: (RINGS BELL). Yay!
(LAUGHTER/APPLAUSE)
QUEST: FIFA has handed out their heaviest punishment in World Cup history. And we trust her to do the stock market for us. We have a live
update from Rio and give Luis Suarez's finances a checkup. "Quest Means Business," we are back in just a moment.
(COMMERCIAL BREAK)
QUEST: I'm over here - behind the flags. That's me - yes. FIFA has banned Luis Suarez for nine international matches today, and suspended him
from football for four months. It's payback time for that bite - the most talked-about moment of the Brazil 2014 so far. It means of course we won't
see Suarez play again in this tournament. Now there's money at stake. Last season, the Uruguayan took in $4 million from sponsors according to
"Forbes." Look - there are to be $4 million. Adidas is one brand it promotes. It says it's removing him from marketing for the rest of this
World Cup - that's big of them.
And unless there is a successful appeal, Suarez will also miss up to 13 matches for Liverpool - his English Club, that is if he stays at
Liverpool. Several reports say Barcelona want him and could pay for it with $135 million. For that sort of money, Liverpool could very well have
their own bite. Suarez is said to be the 20th best-paid footballer in the world. His appetite for opponents' flesh is surely putting his earning
potential in jeopardy. Amanda Davies is in Rio tonight. Amanda, OK, let's just - he's out for the rest of the World Cup, he's got this four-month
ban, but for the third or fourth time, this man has bitten somebody.
Now, one arguably says he should be facing proceedings in the magistrates court for, you know, bodily harm. It doesn't sound like a
terribly serious sanction for what could have been a very serious event.
AMANDA DAVIES, CNN SPORTS CORRESPONDENT: I'm absolutely with you , Richard, there are some people who were saying that because this is not
just a Uruguayan ban but also a ban that will affect his club football with Liverpool, it's actually quite tough. But I personally don't think it is.
We've seen him receive a ten-game ban for his biting of Branislav Ivanovic last year. That obviously didn't work. And I've just spoken to Jeffrey
Webb who's one of the FIFA vice presidents - the president of the CONCACAF region and he himself has come out and said he feels Luis Suarez has been
lucky, that this does not go far enough because it is his third offense.
The Uruguayans on the other hand, feel that they have been hard done by -
QUEST: Right.
DAVIES: -- they would say that, wouldn't they? But there's some ridiculous statements, I have to say, coming out from the Uruguayans. The
Uruguayan captain, Diego Lugano, Richard, has said "Indignation, impotence. I think these are what we all feel. Everyone would like a more just world,
but this world simply doesn't exist." So they are not showing too much more.
QUEST: Right. We'll move on tonight. I just kind of have a feeling that if you bit somebody in a pub on a Thursday/Friday night, you'd be
facing the police rather than just a FIFA ban of a few months. Look, let's talk about the matches. I've got one word for you, it begins with S - the
word is soccer. We have to use that of course - the U.S. was playing. Who else? I don't know why they insist on calling it soccer, but they do. Who
else was playing and what's the end of the group stage look like?
DAVIES: Yes, it's been a fascinating day, the final day of group action. We went into the day with three spaces and the last 16 still up
for grabs. We've now only got one because the U.S.A. and Germany both booked their places from group G. They knew that a draw would be good
enough for both sides to make it through, but Germany were going for the win despite the fact that Jurgen Klinsmann, the U.S. boss, helped Germany
to win the World Cup back in 1990. They were going for the win, Germany got it - 1-nil thanks to Thomas Muller. But because Portugal beat Ghana in
the other match in the group and Portugal had been doing so badly -
QUEST: Right.
DAVIES: -- in their opening games, that meant that the U.S. still go through on goal difference.
QUEST: I never, ever, ever want to hear one of you sports presenters and sports correspondents criticizing financial journalism for being
complicated with numbers, having had to go through -
DAVIES: (LAUGHTER)
QUEST: -- the machinations of who goes through on goal difference. Do you understand, Ms. Davies?
DAVIES: I absolutely understand, but I will worry about that. You can worry about your business news.
QUEST: Right.
DAVIES: And I don't know whether you ever found the name for a flag expert yesterday - did you?
QUEST: Of course we did. What's the word, the word is -
DAVIES: Aww!
QUEST: Vexillology.
DAVIES: Vexillologist.
QUEST: Vexillologist in the studio. Thank you very much. See you tomorrow. Right. Now, we need to get an update from our vexillogists on
the "Quest Means Business" Footy 32 index. This is where we value each of the World cup teams according to how they perform. Remember, you get an
extra $10 million for every goal scored and it falls off with every -- $10 million - with every goal that you let in. These are the current
valuations. They're based on Lloyd's Insurance on how Lloyd's calculates the value of each of the players based on the insurable value. So it's all
about - it's really very simple. It's insurable value + goals won - goals lost.
And for that we're going to start with the United States, and the United States right in the middle - and there is the United States. What's
interesting here - the United States in corporate-speak had flat earnings. Because although it's got a value of $186, it has scored four, it's
conceded four, therefore it has a net net no earnings result. They engaged maybe, perhaps the only good thing is they did engage in a bit of PR.
Remember, PR doesn't get you very far but Coach Jurgen Klinsmann tweeted an excuse note for USA fans who wanted to get out of work to watch the match.
It said to bosses, "I understand this absence may reduce the productivity of your workplace but I can assure you it is for a good cause." The only
good cause you need to see - flat earnings from the United States.
Now on to Germany the -- where Germany is - oopsie daisy - there we go. Germany - there is Germany. It's showing a 4.6 percent increase. In
corporate terms it's got corporate rivalry because the coach of the U.S. team is a former coach of Germany. Now, in terms of the goals, look at
that -- brilliant earnings! Germany has powered ahead, it scored seven, it only conceded two, therefore on simply corporate analogy, it's got a great
corporate rivalry and earnings are stupendous. That's the way the whole lot looks. We will show you the more over the next day. Costa Rica's
still the most valuable, Honduras is now virtually bankrupt.
Tomorrow we'll show you which teams we will be delisting and we will be removing some flags in our own bit of Vexillology. Coming up after the
break, when work colleagues chat about what they did on the weekend, some people can't join in that conversation. The man who ran one of the world's
biggest companies - he talks frankly about being out of work when he was in the closet.
(COMMERCIAL BREAK)
QUEST: Seven years ago, Lord John Browne was the chief executive of BP. And then his career suffered a career-ending event. He lied to a
court as he tried to prevent a newspaper from outing him as gay. Now, once the lie was exposed and his sexuality was made public, he apologized and
felt that he had no option but to resign and also that the board accepted his resignation. His book, "The Glass Closet" now asks why do so many LGTB
people feel they cannot be honest about their sexuality. And he has some extraordinary views on where he believes responsibility lies in the
workplace where he says coming out is good for business.
(BEGIN VIDEOCLIP)
JOHN BROWNE, FORMER BP CHIEF EXECUTIVE: I wrote this book for three reasons. One is to tell my sorry so no one could repeat it. I don't want
anyone to do that. Secondly, and very important, rather practically talking to about 100 people to talk about case histories and role models so
that people identify with people and get confidence. And thirdly and most importantly, to write a letter to all the straight people of the world -
and that's most of the CEOs of course because there's I think no openly gay CEO in the top 700 companies in the S&P Index. So to give them perhaps
some advice on how they could make the environment in their companies much better.
QUEST: You've been asked a million times do you think you could have become a CEO of BP if you'd been out. I want to turn that slightly
differently, and ask you, "Do you think you'd have been a better CEO if you'd been out?"
BROWNE: I think I would have had better relationships with people. One of my friends who I talk about/talk to in this book - a woman -
bisexual woman - always said, she said to me we knew there was something wrong because you were so reserved. And reserved people do not share what
they do outside business with other members of the team. Because all straight people share that. They have photographs on the desk, they have a
wedding ring, they talk about the weekends. I didn't talk about any of that because it was so complicated to talk about it in a way which did not
make me seem gay or be gay.
QUEST: Your advice to chief executives is what? Because as I read your book, there are two sides to this equation. There's the leadership
and the employee. And you need both sides to actually make this thing work.
BROWNE: You can't have employees as victims. They've got to have confidence. But the most important thing - I mean I'd say this about
anything is that leaders have to set the tone. And more than set the tone, they need to say what they want and measure it. Go back and do surveys and
say, 'How's it going?' so that nobody in the hierarchy can stop their intention.
QUEST: In the multitude of issues on the chief exec's desk, where do you put this?
BROWNE: Let me say this, my experience with all chief executives including myself is that we spend too much time on the hard numbers, hard
facts, hard strategy and too little time on the human dimension which is the team, the people inside the company actually are the most important
thing, and you have to spend more time on it. So in terms of the agenda of people which needs to be bigger in, I think, any leader's - any leader's
sort of kit, this inclusion including gay people - LGBT people in particular - needs to be higher on the agenda.
QUEST: You're almost fighting a - there's an almost internecine wall between the various areas, now are there, between gender versus race versus
single parents versus LGBT. Everybody wants to have their -
BROWNE: I think most of it goes under the heading of inclusion and diversity, but you've got to take the tough things and keep pushing them.
I think if one gets solved, another follows. So we started with gender - in a way I started in business. There were no women in business. Now
there are women in business without enough of them at senior level. Now we need - now I think - what needs to go on LGBT issues? And if you crack
that, if you really can make it an inclusive organization for gay people, then I think people will say, 'OK, you've done something which is really
important and it will matter to many other sectors of society.
(END VIDEOCLIP)
QUEST: Lord John Browne, former chief executive of BP. In a moment, as Ukraine moves towards closer ties with the European Union, an exclusive
interview with CNN for the president of Petro -- President Petro Poroshenko.
(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.
The U.S. is unlikely to carry out military strikes of any kind against ISIS extremists in Iraq for now. That's what we're hearing from American
officials who say Iraq must form a new government first. The authorities are struggling to contain militants who seized control of much of northern
Iraq.
Australian officials overseeing the search for Malaysia flight 370 say they believe the plane was on autopilot before it ran out of fuel. If so,
it's not clear why. Today they outlined a new search area in the Indian Ocean. Authorities believe the crew was unresponsive during the flight's
final hours.
The German government says it will no longer use the telecomm services operated by Verizon because it's worried about U.S. snooping. Germany is
concerned Washington could force the U.S. company to handover sensitive communications.
The Uruguayan footballer Luis Suarez has been banned for nine international matches by the sport's governing body FIFA. It's punishment
for biting an opponent during his team's match against Italy. Suarez was also fined more than $100,000 and banned from any football-related activity
for four months. Meanwhile, in the World Cup today, Germany defeated the United States 1-nil, but both teams will still advance to the knockout
round. Portugal beat Ghana 2-1. It was redemption for Portugal's star Cristiano Ronaldo who had a World Cup win, but both teams will be heading
home early. In the matches underway at the moment, Belgium is locked with Korea at nil-nil and Russia is over Nigeria 1-nil as the game nears
halftime.
Ukraine is expected to sign a deal with the E.U. on Friday, eight months after the previous president turned his back on the very same deal.
That particular action led to Viktor Yanukovych being overthrown and the country descending into open conflict. The agreement lowers barriers to
trade between the Ukraine and the European Union which should be good for the Ukrainian economy. It's estimated it will contract sharply. In his
first interview since becoming president, Petro Poroshenko told Christiane Amanpour about the importance of tomorrow's deal.
(BEGIN VIDEOCLIP)
PETRO, POROSHENKO, UKRAINIAN PRESIDENT: I think this, under my estimation, second important event in the history of my country. First was
getting the independence, second is signing up association agreements for the European Union. Because this is a civilization choice. This is the
robicon (ph), when we cross the robicon (ph) to he Europe and left in the past - our Soviet past.
CHRISTIANE AMANPOUR, CNN's CHIEF INTERNATIONAL CORRESPONDENT AND ANCHOR OF "AMANPOUR" SHOW: What do you expect President Putin to do? What
do you expect his reaction to do? Some are saying they will drop Ukraine from favorable trade status, impose tariffs.
POROSHENKO: From the legal point of view, this is simply impossible because we have not only bilateral agreement from the 1993 and 1997, but
also Moldova (ph) agreement for the status of the CIS free-trade zone. But -
AMANPOUR: So you're not worried about that.
POROSHENKO: No, no, no, I'm really worried and while I think that the - it will be best way now to have FTA agreement, this FTA agreement with
the European Union, and have the same regime with Russia. Because it seems to me that in year 2008, it would be President Putin who said that he want
to build up free trade agreement from Lisbon to Vladivostok. Now is the right time to make it evident that this is a true choice. And Ukraine
would be the perfect bridge for that. But at the same time, if it would be some negative economic reaction of President Putin, unfortunately, this is
possible even not taking into account that in Normandy president promised not to undertake these steps.
AMANPOUR: So he said to you in Normandy -
POROSHENKO: Yes.
AMANPOUR: -- he would not punish you economically?
POROSHENKO: He promised that we will have a negotiation in a trilateral format together with the European Union representative, and so
we do not expect any immediate negative reaction, and we try to do our best to find out a compromise at least Ukraine from our side. And I'm
absolutely sure that European Union from their side do their best to find out a compromise because this agreement bring nothing wrong to Russia.
(END VIDEOCLIP)
QUEST: You can see the rest of Christiane's exclusive interview with the Ukrainian president, his first since taking office at the top of this
hour which is 10 in London, 11 in central Europe in Berlin. And of course it's on CNN.
Shares in Barclay's have fallen sharply after a new accusation of financial misconduct worried investors. The stock fell more than 6 percent
in London. On Wednesday, the New York attorney general Eric Schneiderman charged Barclay's with fraud saying it deceived investors when it
encouraged them to pitch money into so-called dark pools.
(BEGIN VIDEOCLIP)
ERIC SCHNEIDERMAN, NEW YORK ATTORNEY GENERAL: In e-mails cited in our complaint, one high-level Barclay's employee expressed a willingness to
"take liberties with the marketing document portraying the composition of trading activity in its dark pool." And, boy, did they take liberties.
Among other things, they created a chart to market to investors conveying that their pool was safe and there was very little predatory, toxic,
aggressive trading by HFTs. In fact, this document was altered to conceal the most aggressive conduct and the largest, most active high-frequency
trader in the pool was deleted entirely from the analysis.
(END VIDEOCLIP)
QUEST: Now, dark pools are places where big investors can buy and sell. They are very different to traditional exchanges for example that
we're familiar with by the New York Stock Exchange. Here there is a huge amount of transparency. Dark pools, though they are for anonymity. They
contact anonymous buyers with anonymous sellers. It's all done lurking underneath. Fifteen percent of stock trades apparently happen in such dark
pools. Now the AG says Barclay's fraudulently told potential investors there was nothing threatening in the waters.
What could be threatening? Well it could've been things like highly- aggressive, high-frequency traders. Barclay's is accused of lying to investors, favoring its own dark pools when routing and client orders. The
bank said it's cooperating with the AG and is carrying out its own internal investigation into allegations like the inquiries on how they assisted each
other. Shares of another U.K. bank fell sharply today. Standard Chartered issued a profit warning. The stock fell more than 4 percent. Standard
Chartered's blaming tough conditions in the markets. This was the overall picture in Europe. The governor of the Bank of England Mark Carney's
comments on the housing market had little impact. The FTSE was up just a fraction. Helping to draw the strands together of the markets was Bob
Parker, the senior advisor for Credit Suisse. I put it in the issue of the day. When are interest rates going through a rise? Because Mark Carney,
for example, suggests recently - just last week - that U.K. rates could rise sooner rather than later and now says maybe it's later rather than
sooner. Which is it?
(BEGIN VIDEOCLIP)
BOB PARKER, SENIOR ADVISOR, CREDIT SUISSE: Should I actually personally think the situation is reasonably clear? I think first of all
in the U.K., although Mark Carney has sent a number of confusing signals to investors and to markets, but given the strength of the U.K. economy, given
the lack of spare capacity in the U.K. economy which is no longer an issue I think, I think there's a very high probability that the interest rates
will start to increase later this year. And I would pencil in November or December. And of today, no, they've taken action which logically should
cool down the housing market and clearly by any definition in certain parts of the U.K., we have a real estate bubble.
QUEST: So what's your biggest concern at the moment? Because geopolitically, there's still obviously Ukraine and the prospect obviously
of what happens there and the disagreements between the U.S., Europe and Russia. But now we have a worsening situation in Iraq, all of which could
feed into energy prices.
PARKER: All the noise coming out of Ukraine and Russia is - the problem's not going to go away completely, but I think that, you know, the
level of conflict probably will calm down somewhat. With respect to Iraq and Syria, yes, the news from the region is obviously very worrying. But
for investors the key question is what's the impact on the oil price? I actually think that assuming the ISIS and their Sunni allies stay roughly
where they are at the moment, the impact no Iraqi oil production and exports will be minimal.
As you talk about confidence, and it's very interesting - if you look at the data, speculative loan positions in the oil market are already very
elevated. So one has to look at what a market's discounting and markets are already discounting trouble in the oil market. So, you know, the
confidence, if you like, has already gone away and we've seen that in a small jump in oil prices, with Brent up at close 114.
QUEST: The New York Attorney General's decided to have a bash at Barclay's, this time over dark pools and deep pools and black pools of
money. How worried should we be that banking is about to get sloshed over the head again by regulators?
PARKER: Well you say sloshed over the head again. Let's not forget that in recent years American regulatory fines on banks worldwide - not
just U.S. banks - is now close to $100 billion U.S. dollars. And that excludes, you know, the fine that we will probably get agreed over the next
week with BNP Paribas which, you know, with the market talk at the moment, is that that fine could be somewhere in the region of $8 to $9 billion.
So, you know, the fines are getting very large. Barclay's which you mentioned obviously has been hit by a number of regulatory issues here in
the U.K. I guess the biggest regulatory issue was -
QUEST: Right.
PARKER: -- over the Libor fixing scandal and investors are very sensitive to further regulatory problems and further fines which are
getting larger and larger.
(END VIDEOCLIP)
QUEST: That's Bob Parker joining me earlier. Not everyone's having to struggle in these times of austerity. Take Her Majesty the Quest for
example - one of the lucky ones. She got a rather generous pay raise last year, and we'll show you how she spent it, after the break. (RINGS BELL).
(COMMERCIAL BREAK)
QUEST: (PUNCHING CALCULATOR). Plus 4 - 3 million, add 42 million. Just doing quickly the British royal finances. The royal household
sovereign grand report has just been brought out, it has been published. Now, look, there was $4 and 1/2 million for travel, there was then $45
million for property - ooh my goodness gracious me - for property refurbishment. But if you look overall, what the British royal family
spent - more than 6 percent more than last year. Where did the money go and how did they manage to overspend? Our royal correspondent Max Foster
has been doing the numbers himself.
(BEGIN VIDEOCLIP)
MAX FOSTER, CNN INTERNATIONAL ANCHOR AND CNN'S ROYAL CORRESPONDENT: Last year the Queen received 36 million pounds - about $60 million from the
government to carry out her public duties, but also for the upkeep of several palaces including this one. And here at Buckingham Palace, there's
a massive backlog of maintenance work which will take 15 years to complete. So a lot of the money is going towards that.
The way the royal household uses the funds is up to them. And they chose to spend more than $7 and 1/2 million on creating a new official
residence for the Duke and Duchess of Cambridge at Kensington Palace. There are more than 20 rooms in apartment 1A which is where they're now
living. And the Duke and Duchess wanted to make it perfect so they put in hundreds of thousands of dollars of their own money as well. So they
wanted a second kitchen for example and they paid for that themselves.
What's it like inside? Well I can't tell you because we weren't allowed in, but a royal household source says it's a very ordinary level of
furnishing, nothing opulent he said. Prince Charles' finances are also under scrutiny after it was revealed he spent more than $420,000 on a
private jet to get him to Nelson Mandela's funeral. But Carriage House says he didn't have any other options to get there on time. So what does
the British monarchy cost the public all together? Well it's about $1 per person, but that doesn't include the cost of security which remains secret.
Max Foster, CNN Buckingham Palace, London.
(END VIDEOCLIP)
QUEST: Now to the weather forecast. Still toasty in New York? Tom Sater is at the World Weather Fore - Tom, you know where you are, tell me
what the weather is.
TOM SATER, METEOROLOGIST FOR CNN INTERNATIONAL: All right, sir, yes. We're going to start with the travelers' forecast. The good news as we go
to Europe first -
QUEST: Right.
SATER: -- much of the colors are green, so no major delays although I would not be surprised if late Friday into Saturday we'll start to see
colors of maybe yellow or red for parts of the U.K. and specifically London. We do have a storm system that'll be spreading heavy rain and the
threat for severe weather there as well. Currently our numbers 17 in Paris - they've had some light rainfall, Berlin 15 which is nice, Bucharest 18,
Athens not quite as warm - 28 degrees. Of course they've been in the low 30's.
But here's the satellite picture. Once system exits - Ukraine in toward Russia, another wave of moisture with some downpours expected as it
moves across the Adriatic. But I want to focus more into the northwest. The U.K. Met Department has issued several yellow alerts for the
possibility of thunderstorms, maybe dropping some hail-the possibility, also with the storm moving in -- you see it's spinning on the edge of your
screen - could produce rainfall rates of 40 millimeters in just a matter of hours.
Rainfall did move in toward London of course for Wimbledon. It's suspended match play for four matches. They will resume play tomorrow,
much like Monday night when it moved in right around 7:30 local time. And even our future-cast, if you look at the possibility of the rain, we
continue to see that just the moisture and the waves move through the area. So, most of the yellow alerts are for parts of Wales and South England.
But on a broader scale, at least things start to dry out in the Balkan countries after a rough couple of days. Some of the reports that we've had
from Southern France and the heavy rainfall - over 100 millimeters there - hail even into Bosnia-Herzegovina, up to 7 centimeters in diameter. That's
the system however that is pushing off very quickly towards the east. High temperatures - here you go on Friday - Istanbul 26, Bucharest 25, Kiev 19,
Vienna 26.
In the U.S. it'll be winds possibly causing delays in Las Vegas. Chicago looking at some very rough weather. Same system that produced some
flooding rains in Minneapolis yesterday - torrential downpours flooding out the streets and now we've got more moisture making the way to the south.
So if you have flights maybe toward around New Orleans, isolated thunderstorms, Atlanta. These are also going to continue, and the rainfall
becomes widespread across the U.S. in the next 48 hours. A quick look at your temperatures there as well. If you are departing for the States or
are expecting someone to leave Dallas warm at 32, Atlanta 30, Washington, D.C. 30 degrees as well.
Elsewhere, Tokyo, Manila, there's a system off the coast there that could cause some problems. A good 60 millimeters fell in Shanghai over
toward Western Japan. Tokyo -
QUEST: (Inaudible).
SATER: -- there a chance of a slight delay as these systems start to lift a little bit to the north, Richard -
QUEST: Thank you.
SATER: -- but for the most part as mentioned, the Philippines is looking at the possibility of some heavy rain as well.
QUEST: You're being kept busy I'm pleased to say - no -
SATER: Yes.
QUEST: No hand - whatever it is about making work for idle hands or whatever that phrase is. I'm sure somebody'll remind me.
SATER: (LAUGHTER).
QUEST: Anyway, you've got your work cut out for you. Now, I'm well aware that this program is over far too soon. In fact, if we could keep
talking in our nightly conversation on economics and business, we'd probably both be very happy. But now there's app to shorten the show that
seems to go forever. We'll show you how it works after the break.
(COMMERCIAL BREAK)
QUEST: So, your friends are talking about the latest hit show and you know nothing about it. There's a program now that summarizes the shows
that you don't have time to watch. It reduces a single show to two minutes, and indeed, you could take a whole season of shows to just half an
hour. You want to see how it can work? Look at what it did with ten minutes of last night's "Quest Means Business."
(BEGIN VIDEOCLIP)
SATER: Two point 9 - a little lower than expected, but this winter was quite harsh. Records were set.
WILLIAM LEE, MANAGING DIRECTOR, CITIGROUP GLOBAL MARKETS: -- Going to grow in fact at a 10 percent annual rate with their first estimate. And
that was based upon their Obamacare numbers. But -
QUEST: -- your best guess? Looking at the first quarter, which was an aberration, but looking for the rest of the year, --
ALISON KOSIK BUSINESS CORRESPONDENT FOR CNN BASED IN NEW YORK: -- but obviously not in the direction that you would expect. Many believe
what's happened here is that the number had already -
QUEST: -- after the break. This is "Quest Means Business" live from New York. (RINGS BELL).
(END VIDEOCLIP)
QUEST: I'm not sure anybody has any idea what we were talking about. But the man behind the technology is Vasu Srinivasan who joins me now from
Sunnyvale, California. How does it do it? How does it do it - just it just randomly sample? I mean, it can't know what are the crucial points in
a drama, in a comedy or in a news program.
VASU SRINIVASAN, FOUNDER AND CEO, SKIMO TV: Richard, video summarization is already hard problem -- there are 14 major approaches
available. We took an octagonal view. The walls between art and engineering is only in your minds. So basically we think artists are
engineers whether deliberately or not, they have patents, algorithms -
QUEST: Never mind the algorithms - no, no, no. Why bother doing it? Why bother doing it? I mean, you either want to watch the program or you
don't. What purpose does summarizing it in this way do?
SRINIVASAN: That's a great question, Richard. We are not in Kansas anymore. Because six billion hours of video uploaded in YouTube every
month. So people don't have time - they want to catch up, you want to sample videos. There are 900 billion views just in the United States last
year of videos.
SATER: Right.
SRINIVASAN: Thirty percent of all the videos are long form, so -
SATER: Right. So is there not an - is there not a recipe that basically says you know - you know that old saying 'you know the price of
everything but the value of nothing.' So you've watched everything, but you haven't enjoyed any of it.
SRINIVASAN: That's a great point. We live in a continuous partial attention culture, so we want people to savor the entire TV show.
Unfortunately, there are too many good shows, so we point in affordance (ph) if you would like to catch up on TV shows.
SATER: It's been very, very popular, hasn't it? I mean, it says more about society today, I think, than perhaps about the content that's being
produced. Would you agree with me, sir, finally?
SRINIVASAN: Absolutely, absolutely. So in this continuous partial attention culture, you need to have the affordance (ph) in every online
video. That you should be able to watch the summary if you'd like to. Again, technology is a tool.
QUEST: Technology is a tool, and we thank you, sir, for bringing it to our attention tonight. Many thanks indeed for joining us.
@richardquest - that's one I'm not sure that you actually get much from all of these things. I'm not saying it's wrong. I'm not saying you get much,
but it does make us think. Anyway, we'll have more in a moment. @richardquest is where you can join us, and we can continue the debate.
(RINGS BELL). "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." Lord John Browne speaking on tonight's program makes the very powerful argument for why coming out of
the closet and admitting one's sexuality is good for business. He does so from a strong position. As a man who was dragged out the closet forcibly
in a scandal some years ago, he's in a good position to know exactly the benefits of making it clear and adjusting for honesty.
But, his position and his point is this - it's people when they're at work are most productive when they are able to bring their full attention -
bring their full selves, if you like - to the workplace. This is not a question of sexuality. It is a question of people turning up for work, as
one person in his book puts it, and bringing all their mind, not halving part of it off trying to keep something of them secret.
As anybody who's faced this is well aware, when you make the decision to move forward in the workplace, productivity does get better. And Lord
Browne is in a strong position to talk about this. And that's why whether it's race or gender, whether it's sexuality, whatever the issue - even
harassment and bullying - the moment it becomes open in the workplace, the bottom line quite literally - benefits. And that's "Quest Means Business"
for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL) hope it's profitable. I'll see you tomorrow.
END
