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Quest Means Business
Humanitarian Crisis Relief in Iraq; Israel-Gaza Cease-Fire Violated; World Stock Market Rally; Bursting the Stock Bubble; $300 Million Fine for Standard Chartered; Google Stock Turns 10; Google's Next Decade
Aired August 19, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEW YORK STOCK EXCHANGE CLOSING BELL)
PAULA NEWTON, HOST: And the Dow closes off its highs, up about a half a percent, but who can complain, really? This market shows no end, even
with all the volatility. It's Tuesday, the 19th of August.
A huge aid operation by air, land, and sea. Help is on the way for half a million Iraqi refugees.
Not up to standard at Standard Chartered. The bank's been fined $300 million.
And raising buckets of cash. The chief executive of the ALS Therapy Development Institute tells us what they will do with all that cash.
(BEGIN VIDEO CLIP)
ARNOLD DONALD, CEO, CARNIVAL CORPORATION: Richard Quest with CNN, bring it on.
(WATER POURING ON HIM)
DONALD: Oh! Man!
(END VIDEO CLIP)
(LAUGHTER)
NEWTON: Carnival CEO has thrown down the gauntlet. Richard -- yes, Richard -- will be live later this hour. Does he mean business? I'm Paula
Newton, and this is QUEST MEANS BUSINESS.
Tonight, help for 500,000 displaced Iraqis will come by land, see, and air. The United Nations is set to launch one of the largest aid operations
in a decade Wednesday. The relief effort aims to provide shelter, food, water, and basic medical care and will last for about ten days.
Now, more than 1.2 million Iraqis have already fled their homes this year alone. Countries in the Middle East, Europe, and the Americas, are
supporting the effort. The private sector is also involved, particularly Ikea, a UNHCR corporate partner.
Now, UN peacekeeping officials and activists rang the opening bell at the NASDAQ Tuesday to mark World Humanitarian Day. The EU commissioner for
international cooperation, humanitarian aid, and crisis response told me that the need for help will just keep growing.
(BEGIN VIDEOTAPE)
KRISTALINA GEORGIEVA, EU COMMISSIONER FOR HUMANITARIAN AID AND CRISIS RESPONSE: We are seeing exceptionally harsh days ahead of us because on
one hand, there is more extremism, more conflicts than since the Second World War. And on the other hand, the force of nature, the impact of
climate change is already upon us.
The dual hammer, the explosive cocktail of these two factors has driven victims of humanitarian emergencies up and up and up. And yes,
money is going up as well. In 2000, the world spent $2 billion. This year, 2014, we are not even yet in the third quarter of the year, and we
already spent over $10 billion, and it is not enough.
So, we have to find ways to raise more attention, raise more money, bring new donors, bring the emerging economies to take their fair share.
With more wealth, there is more responsibility.
NEWTON: All good advice. Do you worry, though, still about donor fatigue? You're there in Iraq, where so many donors have contributed.
We've got a continuing crisis in Gaza, that will need to be rebuilt -- again. Do you get the sense of donor fatigue?
GEORGIEVA: The problem is that it should be more investment in preventive action so we don't have to save children where they are at the
verge of dying. That we prevent crises before they are to be happening.
And we can do that if we shift more of our development funding and our political attention to conflict prevention, conflict resolution. If we
engage much more forcefully in the fight against climate change and help communities to adapt to what is going to be more frequent droughts and
floods and hurricanes, then we would be more successful to reduce humanitarian suffering in the future.
Unfortunately, it is so very difficult to raise money before the crisis is already upon us, and that is where mobilization internationally
is absolutely paramount.
NEWTON: Do you see anything on the horizon that gives you hope that that prescient behavior, anticipating what will happen, will start to
trickle down to concrete policy?
GEORGIEVA: We are running from one crisis to another to another with no time to spare to think about the systemic factors, the root causes of
crisis and what we can do about them. Am I optimistic that we would get this mobilization to act?
Well, I am. We have seen humans being able to create solutions to all kinds of problems. When it comes to our own survival of civilization, I do
believe this creativity will come to service.
(END VIDEOTAPE)
NEWTON: Our senior international correspondent Nick Paton Walsh joins us now on the line. He is also in Erbil, Iraq. Nick, if we even put the
worst of all the cynicism and the pessimism aside, I don't think anyone could have predicted that this many people right now today would be in this
kind of trouble, 1.2 million now. How great is the need? And they're still fighting, right, Nick?
NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT (via telephone): Correct. Some territories still changing hands on a
frighteningly regular basis. What we've seen today just passing through the town of Dohuk is, as you heard described there, families just having to
live in construction sites.
They're hanging up their washing up between half-built buildings, people living on the carpets they've borrowed from neighbors or carried out
with them. It's an extraordinarily tough conditions from here with the heat. There's a sandstorm blowing through part of this region at the
moment.
And it's the scale, really. With this stage, we're seeing not just normal Iraq, of course, reeling from the most recent crisis, entire region
in flux. And what started as the Syrian civil war, that's put a million refugees in Lebanon. Many into Jordan as well. And now, this latest
crisis in Iraq, of course, pushing hundreds of thousands of people out of their homes into northern Iraq in this area of Kurdistan.
Impossible for any area to try to deal with that influx of individuals so badly in need when they arrive. And the question, really, of course is
how long do they have to stay here? How long will ISIS continue to hold such (inaudible). And whether people can, in fact, ever hope to return to
their homes in the months ahead.
NEWTON: Yes, all important questions, and still, as you said, a very dire situation in Iraq. Nick, we appreciate your time.
Now, the fragile cease-fire between Israel and Gaza collapsed Tuesday. Israeli delegates were instructed to leave peace talks in Cairo. According
to one official, the order came after Israel's military said Gaza militants broke the truce.
Now, a CNN team saw what appeared to be three rockets fired into Israel. Hamas denies launching missiles across the border. Israel
responded to the rocket attacks, striking targets once again in Gaza.
Now, the deterioration of the cease-fire complicates the efforts to relieve the humanitarian crisis in Gaza. Pernille Ironside is the chief of
UNICEF Gaza, and I thank you for being here. Obviously, sobering circumstances. When you look at the situation in Gaza, I have heard people
say that this is worse than any other time that we've seen it. Would you agree with that assessment?
PERNILLE IRONSIDE, CHIEF, UNICEF GAZA: I absolutely agree. In fact, the cumulative impact of this latest conflict is more than the combined
impact of the previous two conflicts. I'm talking both in terms of the child fatalities, number of injuries, the number of homes and residential
infrastructure that has been devastated and rendered unusable at this stage.
NEWTON: When we look at -- I was just speaking about the issue of donor fatigue. Our Nick Paton Walsh pointed out highlighting all of the
crises in that region right now, adding Gaza to it. Are you fearful that this time around, you won't even get the time needed to get in there and
actually rebuild Gaza if there isn't any kind of a longterm peace agreement on the table?
IRONSIDE: Look, people were still rebuilding from the last conflict in 2012, and even in some cases from 2009. So, absolutely, this is a
critical issue. There's been some calculations done that if, based on the number of residential structures that have been devastated and rendered
uninhabitable at this stage, it could take 18 years based on the current restrictions --
NEWTON: Eighteen years --
IRONSIDE: -- to rebuild, 18 years. So, cease-fire is insufficient. There needs to be a fundamental shift in the terms of engagement, in the
lifting and opening up of Gaza to the rest of the world in order to allow people to live a normal life.
NEWTON: In terms of what you've seen on the ground there in Gaza, what kind of permanent damage, though, has been done that can't be
recovered? And I'm talking about, certainly, interruptions to education, but also health care and things like that that just have been missed.
Missed opportunities with children, with families.
IRONSIDE: What we're seeing with UNICEF is the deep physical and psychological scars that this conflict has had on children. And bear in
mind that any child over the age of seven has now survived three conflicts in a very short time span.
These -- this impact lasts a lifetime. Yes, UNICEF has our psycho- social teams on the ground giving immediate support and coping skills to those families who have lost loved ones and whose homes have been destroyed
and who have had to flee in the middle of the night.
But this is ongoing for a long time. Where are these people going to go home to? There's already a housing shortage, a massive housing
shortage. We have hundreds of thousands of people still in the schools. School is meant to resume in just a few weeks, which in turn would help
children recover faster.
And so, our teams are there doing extra curricular activities, working with families, providing water and other basic needs, but this is a much
longer endeavor that requires action.
NEWTON: And you can't really get started in earnest yet, given the situation on the ground right now. We'll continue to check in with the UN
just to see how developments there on the ground can help the population that desperately needs it. Appreciate your time today.
IRONSIDE: Thank you.
NEWTON: Still to come, the US stock market is set for its best month -- yes -- since February. Why economists say, though, it's a bubble that
just can't last.
(COMMERCIAL BREAK)
NEWTON: All right, as you can see, markets closed in a sea of green Tuesday. Investors in Europe were encouraged by easing tensions in
Ukraine, and European markets also got a boost from the shipping giant, Maersk, which reported incredibly strong earnings.
Now, in the US, as you can see, the Dow is on track for its best month since February. And that's strong -- that's thanks to strong earnings and
an improving economy. And as we said, geopolitical shocks from Iraq to Ebola have been short-lived.
And I just want you to take a look at this chart here, up more than 12 percent. And again, record territory not out of the question before the
summer days end.
Now, leading economists, though, are warning that all this green could easily turn to red. Nobel Prize-winning economist Robert Shiller says
valuations are at worrisome levels. He joins us now, live from Yale University. Shiller, thanks so much for being here with us.
You've brought up the B word. There it is again: "bubble." What convinces you now? Because so many people have thought about even taking
money off the table, and yet it hasn't happened. It seems that this market has so much wind in its sails.
ROBERT SHILLER, PROFESSOR, YALE UNIVERSITY: Yes. And I'm not saying that I know how to forecast where it will be in six months or a year. But
it is looking very pricey.
The measure that I use, which is cyclically-adjusted price-earnings ratio, has just past 26. Quite high. My historical average for the 20th
century was around 15. And that kind of high level has generally been followed by poor stock market performance.
NEWTON: I think for someone like you, as an economist, looking at the fundamentals, I've been talking to so many market people that say the
fundamentals don't seem to matter. And what they point to is the ten-year today hitting 2.39. Are you in new, uncharted territory as an economist?
Are you looking at the fundamentals here and saying it just doesn't make any sense?
SHILLER: Well, that's the problem, that were are in kind of uncharted territory. When the ten-year Treasury rate hit its bottom in 2012, it was
down to 1.4 percent. It's not quite at the bottom anymore. But that's an incredibly low -- it's an historically low yield. It's never -- it never
happened before. I have data on longterm bonds back to 1870s. We've never seen it so low.
So, that's another issue, now, about the bond markets. So, should you switch from stocks to bonds? I'm not so sure about that, either.
Quantitative easing is coming off. What is going to happen to these bond yields? So, it's just not a great time to be an investor.
NEWTON: Yes, you basically no refuge at this point, unless you hold everything in cash or take everything off the table, and people that have
done that have gotten burned.
Now, as you say, I know it's not your job to forecast where investors should be putting their money, but would you say that you feel more
confident about fundamentals despite problems in Europe, despite a lot of problems that we're having around the world with geopolitical events? Are
you seeing good things coming forward from that crisis that we had in 2008, 2009?
SHILLER: Well, I suppose as an economist, I tend to think of these crises as all self-limited and eventually will correct, even without the
Fed policy. Back in the 19th century, we had financial crises. Reinhart and Rogoff say it takes ten years. Well, our crisis is already six years
ago. So, things, they should be starting to mend.
NEWTON: And, indeed, we have no idea if they actually are, and it's a bit scary when people start to say that perhaps even central bankers around
the world have lost a lot of the power that they have over their own economies. I thank you for your insights, and we'll continue to listen to
a lot of what you're saying there. Appreciate it.
SHILLER: OK. Good night.
NEWTON: Now, Standard Chartered Bank is to pay $300 million for not cracking down on money laundering. The British bank has already been fined
twice for breaking sanctions and also for not doing enough to stop money laundering.
Cristina Alesci joins me now with more. And Cristina, I think the first issue here is $300 million? Is that really a dent? Is that really a
deterrent here? And I know that it was a deal in the making. Is it a good deal, though, for the regulators?
CRISTINA ALESCI, CNN CORRESPONDENT: For the regulators, they wanted to send a clear message: it's not enough just to pay fines, you have to
keep up with compliance, and you have to make good on the promises that you made in the original settlement.
As you alluded to, this is a story that goes back to 2012 when the bank paid a $700 million settlement on those money laundering charges. And
what the New York regulator said today was look, you missed some -- you missed flagging some pretty suspicious activity, and you're not living up
to the agreement.
So, this is a statement. Maybe the $300 million, as you suggested, isn't enough, but it is a statement that the regulators will keep on
monitoring these banks to see whether or not they're complying with the -- with what they promised to comply to.
NEWTON: And in fact, if you read beyond the fine, there are some things that the regulator is looking for in the coming weeks and months
from Standard Chartered that they say they're going to be monitoring.
ALESCI: Oh, yes. And US regulators have been so focused on money laundering and also banks that are helping avoid wealthy Americans to pay
taxes. We've seen a slew of settlements come out. You remember BNP Paribas, $9 billion sent shockwaves throughout the financial system.
Again, in that case, regulators were cracking down on money laundering.
And this is going to become an even bigger issue as new sanctions come out against Russia, because the banks have to comply with those sanctions
and make sure that they're not providing any services to the parties that are listed on those sanctions lists.
So, it's going to get even more complicated, and banks are very scared now to do business. Not to mention the fact that for the first time ever,
you had US regulators force a bank to admit to wrongdoing when Credit Suisse came out and said they -- that it had acted criminally in helping
Americans avoid -- wealthy Americans avoid taxes.
So, you see the regulators really getting tough. Some people would say not enough, but it's certainly more than we've seen in the past.
NEWTON: Well, the question is, will it be wholesale culture change at those organizations? That has yet to be determined, so we'll see.
ALESCI: Well, when you speak to some of these banking executives, they will tell you it's not an issue of culture, it's an issue of one or
two bad actors. But certainly popular sentiment is to say that there's an issue of culture there, too.
NEWTON: OK, thanks for the update on this, appreciate it.
Now, ten years ago today, Google's stock launched. Yes, it's been a decade. The company has conquered search, e-mail, and online video, and
it's moving into the real world with self-driving cars and smart thermostats. After the break, we'll look at what Google will take on in
the next decade.
(COMMERCIAL BREAK)
NEWTON: Now, few stocks can match Google's epic rise. Take a look at this. You're a happy investor if you got on this bandwagon. It's up more
than 1300 percent since it debuted ten years ago today, and the company has grown enormously in that time as well.
Now, we want to take a look, though, at the differences here. Have a look. The home page hasn't changed that much in the last decade. Search
is still clearly the focus, but Google is much more than just a search engine.
And we want to take a look at what's behind the home page in 2004. Take a look, not too much. It was the g-mail, the Google News, and Orkut,
which I hadn't heard of it. Many people haven't. It was a social media thing that is now defunct.
Now, that all speaks to how Google's stated purpose, that the company says we may be the only people in the world who can say yes, our goal is to
have people leave our website as soon as possible.
Now, take a look, though, here at 2014, and you can see it's not really the case anymore. The company is trying even harder to get you into
its ecosystem and keep you there. Joining g-mail and Google News, Google Plus, there's YouTube, Maps, and Drive, Chromebook computers, Android, and
the Chrome web browser -- I'm breathless with all this -- all designed to drive users to Google.
Then there are the projects, like the Google Loon and the self-driving car. But the financial support for all these projects comes largely from
the same place. It has not changed in a decade. Now, revenue has soared, of course, but it comes from advertising. From in 2004, 99 percent to now,
90 percent, still absolutely a hefty proportion.
Here to talk to us about this is Shelly Palmer, he is the author of "Digital Wisdom." Shelly, thanks for talking to us about this. I want to
go first to that last stat. Is this going to be the whole defining thing about Google? I mean, 99 percent in 2004, 90 percent in 2014. Hasn't
changed much in terms of what it relies on to get its revenue.
SHELLY PALMER, AUTHOR, "DIGITAL WISDOM": Look, Google does one thing really well: it monetizes the currency of intention. When you go to
Google, you don't intend to be at Google, you intend to do something else.
What people are accusing Google right now, and what you just started to talk about is that now Google wants to keep you. And how do they want
to keep you? They'll give you some choices that are better curated choices that you might intend to go find, and in which case, Google will go, hey,
click on this, I'm getting paid.
So, Google actually has figured out a bunch of different ways to separate you from your hard-earned cash. What most people don't think
about is that Google is not a search engine. At no time has it ever been a search engine since it went public.
It's an advertising optimization engine. That's all it does. And it only needs to be better than the next best search engine, which by the way,
is there one?
(LAUGHTER)
NEWTON: Hardly.
PALMER: So --
NEWTON: Hardly anymore. Shelly, you make a good point, which is why it is so pervasive in the market --
PALMER: Yes.
NEWTON: -- strong revenue growth. But also margins about about 20 percent. So, let's talk about the next ten years. What will Google look
like in 2024? What does it hope it will look like in 2024?
PALMER: First of all, anyone who tries to project out ten years is going to not only miss the mark, but it will be far less interesting than,
really, what ten years is going to look like, which should be wondrous and remarkable.
But let's just be clear: Google is the most innovative tech company of all of the innovative tech companies. They've got an unbelievable war
chest of cash. You mentioned Project Loon, you're looking at the self- driving cars.
Imagine a world where not only do you have Google Maps and Google Earth, you type in a search for a restaurant and the car pulls up and takes
you there without a driver. That's the kind of world you could look at, all courtesy of Google. And they're thinking the same thing.
Google's also -- actually, there's one kind of super-important point about Google. It's one of the few companies, maybe the only company on
Earth, as the internet grows, it will actually grow in a correlative way.
Right now, you've got something like 2.7, 2.8 billion people connected to the public internet. They say that by the end of 15, we're going to
have about 3 billion, and by the end of 20, about 4 billion.
Google will literally that much bigger as the internet grows, because what do you do as soon as you get connected? You go to search for stuff.
And where do you search? There's really only one place.
NEWTON: And I have to ask you, Shelly, is that a bad thing for consumers, for internet users, if all of this consolidation, as you say,
happens at Google? It's basically truly the heart of the internet right now.
PALMER: Wow. First of all, you're above my pay grade. Is this anti- trust? Is this whatever? You'll have to ask somebody who's an expert in that. What I will tell you is that right now, Google's do no evil, don't
be evil, I'm not evil, we're Google rings kind of true.
At some point, absolute power corrupts absolutely. At some point, really, there's going to be Google and everything else. To be fair, if you
look at Facebook, if you look at Twitter, if you look at Yahoo!, if you look at some of the pure-play tech companies that sell advertising, each
one of them has a slightly different way to aggregate people and a different way to bring in advertiser value.
Google right now is actually struggling in mobile, because people don't tend to follow through on a mobile click the way they do on a
desktop. When you search for something on a desktop, you actually intend to go do something about it.
On mobile, you kind of don't transact past a point. You're kind of on your way to do something and you're psychologically not quite in the same
place. This isn't a technological problem, it's a human behavior issue, right? You're on the go, and you're just not parked trying to accomplish a
task.
So, Google's not the only game in town, but they're a great game, and if I was going to bet money is their next ten years going to look like the
last ten years from a growth standpoint, like a 30 percent annual rate of return adjusted, I'd go, yes, pretty much.
NEWTON: Wouldn't bet against it, would you, Shelly?
PALMER: I wouldn't bet against it anyway, no.
NEWTON: Thanks so much for your perspective.
PALMER: My pleasure.
NEWTON: Appreciate seeing you. Google's stock, now, isn't the only one doing well. Apple shares have closed at a new high -- yes, a new high.
The shares have topped $100 for the first time since the seven-for-one shares split in June.
That move was aimed at making the stock more accessible to investors. Apparently that's happened. The previous closing high was before the
split, $700 in September of 2012.
Now, not so long ago, a giant ash cloud -- I remember it well -- caused chaos for travelers. Now, Iceland's on alert once again for a
volcanic eruption. After the break, could history be about to repeat itself?
(COMMERCIAL BREAK)
NEWTON: Welcome back, I'm Paula Newton and this is CNN. We want to bring you the news not up to the minute.
Days of intense peace talks are in jeopardy after an Israeli- Palestinian ceasefire broke down. Now in the past few minutes, Hamas confirmed it had fired several rockets into Israeli territory, including
one aimed at Ben Gurion Airport in Tel Aviv. Israel launched new airstrikes on Gaza after three rockets it southern Israel. Israeli
negotiators have been ordered to return home from the talks in Cairo.
A massive humanitarian aid effort is set to begin soon in Iraq. The U.N. is planning one of its largest aid deliveries in years to help the
nearly 500,000 refugees forced from their homes by ISIS militants. It will include air and sea shipments of food, water and shelter.
Police in Missouri have shot and killed a second young African- American man. They say he approached officers brandishing a knife. The shooting took place in St. Louis, not far from Ferguson where violent
protests followed the death of black teenager Michael Brown.
In the last hour, protestors have reached the high-security government zone in the Pakistani capital of Islamabad. They're trying to force the
Prime Minister, Nawaz Sharif to resign.
Iceland is bracing itself for a possible volcanic eruption after hundreds of earthquakes were recorded. The country has raised its aviation
warning to its second highest level. The Bardarbunga volcano, one of the island's largest, is being monitored very closely. The orange warning
means Bardarbunga shows heightened or escalating unrest with increased potential of eruption. Now, in 2010, ash clouds from Iceland cost airlines
a fortune in cancelled flights.
And, Jenny Harrison, you'll remember well it cost us - a lot of us - our patience, it cost us money, many people were frustrated and stranded,
and so, Jenny, we're asking -- what is the likelihood of this kind of an eruption? As you said, it's a very large volcano.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: It is a large volcano, but you're right, we've got such vivid memories of what happened,
as you say, four years ago. There was a huge impact of course, not just across Europe but across into North America, across into Asia as well. We
can just compare the two first of all. They're not in the same location in Iceland. The one we're talking about now is actually under a glacier, so
for Iceland, for the people locally, some concern here there could be some glacial flooding.
But this is that one, then we've got the one back in 2010 - you can see the pictures there. Of course we've seen the huge plumes of ash that
came up from that. So last eruption was 2010, before that it was 1823. But with this latest volcano, the last eruption was 1910. So, again, not a
lot to worry about (ph), this is over 100 years ago. High elevation. Both the same type of volcano - it's a Stratovolcano, so the ones we typically
see or are more familiar with - the ones with the cone shape - the same actually as Vesuvius and also Krakatau, although I'm not saying this --
it's going to be like that.
So, obviously you mentioned the earthquakes. Well, this is why we've seen - this is why we've seen earthquakes cold (ph) start, because we've
got these two plates. Eurasian plate, the North American plate, and guess what? - they literally join right the way underneath by the Bardarbunga
Volcano sits right there. So, this is why there's been activity, but the fact there has been this increased activity since Friday it began, and it
was on Saturday they had the strongest magnitude - it was over four magnitude. That's the strongest since 1996. So, all the signs are there
for all the seismologists. All the experts actually think, well, you know, is this a precursor to a big eruption. So, there it is. There are over 30
that they monitor constantly in Iceland, and this is what they're saying - it's escalating unrest.
The next one is imminent and that obviously is the warning they'll put in place as and when there are signs of an eruption. Right now, there's
some ongoing magnet movements - that's exactly what it sounds like. So they're watching that. We've had these earthquake swarms ph, but again,
you know, sometimes in the past we have these earthquakes swarms, and actually nothing happens thereafter. But there are signs. There's sort of
no sign of actually possible eruption, but it is still possible. I want to just take your mind back to this - this is back in 2010. This was when it
was at its worse truly in terms of the ash. All the different colors that were made in the different levels from surface, way up there into the
atmosphere. Even if this particular volcano does erupt, a few things to take into consideration - how much ash comes out, how far up it goes and
also the size or particles. The smaller they are, the worse it is, the further it gets dispersed. And of course one of the things that really
then controls the ash is the weather conditions in the region.
But this is what it looks like on a normal day. These are all transatlantic flights coming to and from North America. This is typically
of course a very, very busy route, then we've got all the aircraft across in Europe as well. There is Iceland of course. This is where we're
watching and, as I say, really is a lot to do with the actual weather systems in place. So there is Iceland in the last few hours. As typical,
we've had the winds and its systems come down from that region spread across into Northern Europe. But, Paula, it hasn't erupted yet. It is
just whether or not it does - if it looks like it will, they will raise that level to red, and that is when it's called imminent. So we're just
going to watch it very closely in the hours and days ahead.
NEWTON: You bet. Travelers and everyone in Iceland involved will be watching it very closely. Thanks so much, Jenny. Appreciate your time.
We want to bring some breaking news to you now - an update about what's going on in Israel. An IDF spokesperson tweets that two rockets hit a Tel
Aviv area, four near Be'er Sheva, three near Sderot (ph). Now, the IDF Home Front Command says it has not issued orders to open the bomb shelters
within a range of 40 to 80 kilometers of the Gaza Strip, and that means that many Israelis right now are on high alert. That is late into the
evening there in Israel. We'll bring you more of those developments as soon as we have them. In the meantime, after the break on "Quest Means
Business." An environmental crisis is unfolding in Mexico. Two rivers have been contaminated with acid. One of Mexico's largest copper mines is
under investigation. We're live in Mexico City, back after the break.
(COMMERCIAL)
NEWTON: India's Prime Pinister, Narendra Modi has pledged to provide financial services for every Indian family. Now, that's not going to be
easy in a country where around half a billion people don't even have a bank account. In this week's "Future Finance," Mallika Kapur examines how new
technology could possibly help a new generation of Indians manage their money.
(BEGIN VIDEOCLIP)
MALLIKA KAPUR, CNN'S MUMBAI-BASED INTERNATIONAL CORRESPONDENT WITH COVERAGE IN INDIA: India's financial capital India is young. Half of its
billion plus population is under the age of 25, compare it to some other Asian countries, the median age in China is 35, in Japan it's 45. In just
another six years, India will become the youngest country in the world with an average age of 29. India's youth will become a formidable demographic.
How will it handle personal finance? Before we look ahead, Reuben Abraham says it's important to take a step back and understand why traditional
banking has not worked in India. He says 60 to 65% of the country remains outside OF the financial system with no bank account.
REUBEN ABRAHAM, CEO, IDFC INSTITUTE: We've been building branches. Now, you know, if you think about it for a second, I mean, branches are
very expensive.
KAPUR: Yes.
ABRAHAM: So there's a - you're getting hit on two sides. One is the cost of a branch and the second is the size of a transaction. Now, you
could absorb the cost of a branch if the size of the transaction was large enough. But unfortunately most Indians don't bank at those kind of levels.
KAPUR: Instead of the expensive bricks and mortar approach, what India needs, financial experts say, is mobile banking aided by technology.
That'll make it both cheaper and easier, especially for young entrepreneurs like Vaibhav Lodha - always on the go.
VAIBHAV LODHA, LODHA GROUP: One of the products maybe for the fateets (ph) would be more like retail banking that is there in the U.S. which is -
we're still developing, but you go into a bank, they're only two or three people there, everything is computerized. So you don't really have to wait
in a queue for a way, way long time.
KAPUR: From paper to plastic, the next step for money may be cell phones, a good option for a country that's the world's second largest
market for mobile phones.
LODHA: One of the examples that is (inaudible) in the world , like now has been the case with M-Pesa which is in Kenya. Your mobile number is
actually an account number. People they actually have a credit and debit (ph) account and they keep transactioning -- transitioning -- that money to
other people. And that's almost has three million people already on board. And that's a huge number. So if we have something like that coming into
India as well, I think that can make a huge difference.
KAPUR: What could also make a big difference is the AADHAAR card, a government-issued identity card based on the person's biometrics. People
can now use it to open a bank account.
LODHA: That can really lead to a lot of people who are unbank (ph) right now to be included in the banking system.
KAPUR: There are several ways India can embrace financial inclusion. According to VEPA (ph) this is the time to think of creative solutions
involving technology, telecom and consumer products.
LODHA: In the next ten years, we'll be looking at them - the millennium (ph) generation - which has never, ever banked before. So,
their risk appetite is much more, and I think that is a product that we can definitely look at. And I think there'll be much more tech savvy also.
ABRAHAM: Asking them to go to a branch is --
KAPUR: (Inaudible).
ABRAHAM: -- would be rather silly. It's like asking them to go buy a magazine.
(LAUGHTER)
KAPUR: A new generation needs new solutions, and India needs to bring more people into its financial networks if it wants to become an economic
powerhouse. Mallika Kapur, CNN Mumbai.
(END VIDEOCLIP)
NEWTON: Mexico's government is pressing charges against a copper mine for spilling water contaminated with acid into a river. Now, the country's
environmental agency says heavy rain over a mine in the town of Cananea caused acidic water to flow into a river and nearby waterways. Now, it's
thought as much as 40,000 cubic meters of contaminated water leaked out. Our Nick Parker joins us now live from Mexico City with the details. I
mean, Nick, I'm noticing that this really is affecting the community around there. I mean, schools remain closed. How significant is this spill?
NICK PARKER, CONTRIBUTOR, CNN.COM INTERNATIONAL: Yes, very much so, Paula. I mean, this is the week where Mexico goes back to school. You
know, the kids are all supposed to be beginning their new academic year. And we've heard from local authorities that some 6,000 children are not
able to be going back to school in some 89 schools because of this incident.
You know, at the heart of this basically is Mexico's environmental watchdog suing and effectively pressing charges against Grupo Mexico which
is the owner of this particular mine and an absolute corporate giant here in Mexico. It's the country's largest mining company and one of the
largest producers of copper in the entire world. So a hugely significant case, you know, by any standards. The company does accept that these
40,000 - a huge amount - 40,000 cubic meters of this copper sulfur - excuse me - copper sulfate acid solution - do want to get that right - did leak
into these waterways and created this extremely vivid orange color that you're seeing in many of these pictures. They claim that it was due to
heavy rains which ultimately breached a dam that was under construction.
The government maintains that there was a fault pipe in the situation, and ultimately this by-product of mining which is highly toxic, was not
being properly monitored. The government is pointing to the possible effects on the ecosystem, particularly water life. The company is trying
to bring down the level of acidity, but the government says that it is still toxic.
ARTURO RODRIGUEZ, DEPUTY ATTORNEY, PROFEPA, VIA TRANSLATOR: It's an acidic residual that could, in laymen's term, burn membranes and mucus from
the respiratory passage and the digestive system. As this acidity decreases, the pH increases, and the danger of this will increase.
PARKER: Now, Paula, Group Mexico, if found guilty, could face fines of up to $3 million and any person responsible could face a jail term of
nine years.
NEWTON: Yes, and hopefully many people are -- in the community there I'm sure - hoping that it does have a deterrent effect. Nick, thanks for
the update on this, appreciate it. Now, still to come on "Quest Means Business," Richard will join me to take part in the phenomenon that's
taking over, yes your Facebook feed. It's the Ice Bucket Challenge. Richard, I've been waiting all day for this. It'd better be good.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Oh it will be good, Paula. Once I was challenged,
the answer you'll find out after the break. But also, we will show you the do's and don'ts when it comes to doing the Ice Bucket Challenge. Just
after the break.
(COMMERCIAL)
NEWTON: Now, it's a phenomenon that is overloading your Facebook feed and the Twitter. I'm talking about the ALS Ice Bucket Challenge. Now,
participants dump a bucket of icy water right over themselves and challenge three more people to do the same or make a $100 donation to the ALS
Association within 24 hours. Now, the biggest names in sport, entertainment and of course business have gotten involved - from Martha
Stewart to Elon Musk to David Beckham.
Now, the money is pouring in - and yes, you guessed it - buckets. The ALS Association reports it has raised now nearly $23 million over the last
three weeks. That's more than - get this - 12 times the usual total. Now joining me is Steven Perrin, he is the president and chief executive of the
ALS Therapy Development Institute. I can't thank you enough for joining us. The figures are staggering. I want to talk a moment though about this
disease. You must be so happy that it is bringing more awareness to really a disease that can have a devastating diagnosis attached to it.
STEVEN PERRIN, CEO, ALS THERAPY DEVELOPMENT INSTITUTE: It's incredibly exciting and truly unprecedented. You know, when we used to go
out and talk to people before about what the Institute tried to do, you'd spend the first 15 minutes educating them on what ALS was and that's now
changed forever. The entire world knows what it is, it's now a household name. We'll never have to go back again.
NEWTON: In terms of this as a charitable organization as yours is, people are calling it a game changer. If it's a game changer, what do you
intend to do with all this money that you have now and that continues to pour in, shall we say?
PERRIN: Well, that's the most important part of it is you know we don't have an effective treatment for ALS. The only FDA-approved drug
really doesn't impact quality of life, and the ALS Therapy Development Institute here in Cambridge, its goal is to take these types of funds and
move those promising treatments that we're working on in animal models and do patients as quickly as we can. And this extra 10 X bump in revenue that
we're seeing from the Ice Bucket Challenge is going to allow us to do just that.
NEWTON: If -- talk about the disease for a moment, and it really is absolutely insidious. You're talking about a diagnosis - you're impaired,
you continue to be trapped in a body that just won't function the way it used to. Most people will die within three to five years. What do you
hope to do? What are some of the more promising therapies that this money will allow you to actually perhaps put more research into?
PERRIN: So, it's going to allow them to (ph) expand new programs that are just becoming reality in the last couple of years -- programs like our
precision medicine program where we're going to try to unite a patient's medical records, for instance, on how their disease is progressing,
sequence their entire genome at sequencing centers like the Broad Institute here in Boston and develop induced peri-(ph) potent stem cell lines from
these patients to bring those as research tools into the lab and try to identify medicines that will treat each patient as an individual, because
ALS is a very heterogeneous disease where every patient experiences something a little bit different.
NEWTON: All right, we thank you for explaining that to us. We continue to watch the videos with great interest and amusement, and we will
continue to follow its progress. Appreciate your time. Thanks. Now, it's not just the quality of video that's the variety that has been really
striking in this campaign, and we're of course about to add our very own Richard Quest. And you just couldn't stay away from vacation. I know you,
Richard, you will do anything for a good cause, and believe me, I'm going to enjoy this.
QUEST: Oh, you and many other people will enjoy it. There I was on vacation when the challenge was made. And you're right, you have only 24
hours to accept, which you'll find out in a minute. But before we get to the challenge, let us consider some of the do's and don'ts when it comes to
the Ice Bucket Challenge. The first do - most simply, make sure you have big bucket. We learned that from Mark Zuckerberg.
(BEGIN VIDEOCLIP)
MARK ZUCKERBERG, CO-FOUNDER AND CEO, FACEBOOK: All right, here we go. That was really cold.
(END VIDEOCLIP)
QUEST: The object is to get drenched. So, Melinda Gates, why were you wearing a hat? Don't.
(BEGIN VIDEOCLIP)
MELINDA GATES, CO-FOUNDER OF THE ?BILL & MELINDA GATES FOUNDATION: (SCREAMS). You're next!
(END VIDEOCLIP)
QUEST: If you're going to do this, you want to make sure all the water ends up where it's supposed to. So a puddling pool - welcome Tony
the Tiger. Jeff Bezos!
(END VIDEOCLIP)
(CHEERING)
JEFF BEZOS, CEO, AMAZON.COM: (LAUGHTER).
(END VIDEOCLIP)
QUEST: It is crucial that when you do the Ice Bucket Challenge, you do not suffer quietly, Oprah Winfrey.
(BEGIN VIDEOCLIP)
OPRAH WINFREY, TALK SHOW HOST AND ACTRESS/PRODUCER: I am ready for the ice now. (SCREAMS). (PANTING)
GAYLE KING, CO-ANCHOR OF "CBS THIS MORNING" SHOW AND FRIEND OF OPRAH WINFREY: Is it cold?
(END VIDEOCLIP)
QUEST: I will be making no such noises. Make sure the person you nominate or the persons -- you do so carefully as the CEO of Carnival
Cruise Group made clear. Go on, Arnold.
(BEGIN VIDEOCLIP)
ARNOLD DONALD, CEO & PRESIDENT, CARNIVAL CORPORATION: I accept your ALS Ice Bucket Challenge. And in turn, I challenge Richard Quest with CNN.
Bring it on.
(END VIDEOCLIP)
QUEST: Arnold, I accept your challenge. I accept your challenge to the ALS Ice Bucket Challenge. And in return, I nominate Sir Martin
Sorrell, the chief exec of WPP, the world's largest advertising company, Tony Fernandes, the chief exec of AirAsia and chairman of Queens Park
Rangers and Moira Forbes, the publisher of "Forbes Women." Those are my three nominations. Now, before I actually do the challenge, the first
question we have to establish - jacket on or jacket off?
(CROWD CHEERS)
QUEST: On or off?
(CROWD CHEERS)
QUEST: All right. The `ons' have it.
Female: The microphone.
QUEST: Shelly Palmer is here.
SHELLY PALMER, AUTHOR, "DIGITAL WISDOM": Oh, glasses on, glasses off? A bucket of ice water.
(CHEERS)
QUEST: Oh, Mother. Whew! Whew! (SCREAMS).
PALMER: (Inaudible) me too, because that's pretty cold. Pretty cold.
QUEST: Are you still there, Paula?
NEWTON: (LAUGHTER). I wiped that stiff upper lip off your face! Oh my gosh! Richard, how do you feel? How do you feel, Richard?
QUEST: Oh, God. That was - there are bits that are freezing that shouldn't be freezing!
(LAUGHTER)
QUEST: I tell you -- that was brisk for this time of the year. Well it was for a good cause. I'll be making the donation later in the day.
Now, Sir, Martin, Moira and Tony, it's up to you for your Ice Bucket Challenge.
NEWTON: Richard, you are nothing but a good sport. Thank you so much. We will be back with more here on "Quest Means Business."
(COMMERCIAL BREAK)
NEWTON: OK, so pardon the pun, but it seems consumers are turning their noses up at some brands of celebrity fragrances. Now, Elizabeth
Arden has reported a sales slump. Mass retailers like Walmart have reported a slowdown in labels bearing famous names. Now, such of those
that were branded Justin Bieber and Taylor Swift. Perhaps customers are feeling less inclined to want to smell like them, and because of that and a
lack of new products to sell, Elizabeth Arden sales fell 28 percent in the last quarter. The company reported - get this - a loss of nearly $156
million.
And now, what you've been waiting for - that slow motion action replay of Richard Quest taking on the Ice Bucket Challenge.
(PLAYS VIDEOCLIP)
NEWTON: I cannot get enough of that. That is incredible. That stiff upper lip wiped completely off his face. We have to say he's a good sport.
Look at that. (LAUGHTER). It's like he didn't think it was going to be cold. (LAUGHTER). Great sport, and that is "Quest Means Business." I'm
Paula Newton. We will see you again next time.
END
