Return to Transcripts main page

Quest Means Business

US Building Broad Coalition; 13th Anniversary of 9/11 Attacks; Russia Threatens to Retaliate on Sanctions; Russia Opposes US Action in Syria; ROSATOM: No Sanctions; European Markets Down; Dow Closes Lower; Return from Space Station; Make, Create, Innovate: Capturing the Sun's Power

Aired September 11, 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)

RICHARD QUEST, HOST: Consider today a sign of the times. Look, the market was down for the whole trading session, finally just coming down 19

points at the close. The geopolitical system and the worries -- ew. And a very timid, wimpy little gavel at the end on Thursday, it is September the

11th.

Tonight, a "broad coalition." International support is building for President Obama's ISIS strategy.

Also, call it the sanctions spiral. Russia is now threatening retaliation as the US and the EU up the ante again.

And taking the high road. Big banks say if Scotland splits, they will, too.

I'm Richard Quest. We have an hour together, and I mean business.

Good evening. It is 13 years since the 9/11 attacks, and today, the world is opening a new chapter in the battle against terrorism. The United

States is leading a major international operation to dismantle and ultimately destroy ISIS. The extremists have murdered innocents and

claimed territory across Syria and Iraq. And of course, paraded the brutal slaughter of two American journalists for all to see.

The US secretary of state, John Kerry, is traveling through the Middle East. If you join me at the super screen, you will see what his goal is.

His goal is very simple, as set out by President Obama last night. It is to build this "broad coalition," and the secretary of state is to meet a

"unifying threat," as they call it, with a unified response.

So, how is this broad coalition looking? More than 40 countries have pledged humanitarian and military assistance. Obviously, of course, all

the European countries, the NATO members: UK, France, Germany.

In the Asia Pacific, you have Japan, you've got South Korea. And the ten Arab nations, including Saudi Arabia, Egypt, and Qatar.

It goes from the northern swathes of the Scandinavian and Nordic countries, right the way through Europe, down through the Mediterranean,

into the Gulf, into the Middle East. And that, of course, remains the main fighting ground, or will be the fighting ground, that which is in Iraq and

that which is in Syria.

President Obama outlined this strategy on Wednesday night when he spoke to the American people, and by that, spoke to the world.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We will continue to draw on our substantial counter-terrorism capabilities to prevent ISIL

attacks. Working with our partners, we will redouble our efforts to cut off its funding, improve our intelligence, strengthen our defenses, counter

its warped ideology, and stem the flow of foreign fighters into and out of the Middle East.

And in two weeks, I will chair a meeting of the UN Security Council to further mobilize the international community around this effort.

(END VIDEO CLIP)

QUEST: The need for a complex, comprehensive response is obvious when you look at the terror group's recent advances across the Middle East.

I'll show you that in just a moment.

Juan Zarate served as the deputy national security advisor for combating terrorism during George W. Bush's administration. He joins me

from Washington. And we can see, Juan, the sort of movement of ISIS.

You and I a couple of weeks ago spoke about how this happened without anybody really noticing. Well, guess what? As they used to say, what have

you done for me lately? That was then, this is now. So, how realistic is the president's ambitions as expressed last night?

JUAN ZARATE, FORMER US DEPUTY NATIONAL SECURITY ADVISOR: Well, Richard, the president has declared the strategy to degrade and destroy

this group, and I think the degradation of the group is possible, dislodging them from areas they control, in particular in Iraq, possible.

But the reality is, they are entrenched in Syria, they're entrenched in parts of Iraq, and to destroy this group is going to take months if not

years. And I think what the president laid out is a reasonable strategy, but the question is, is the United States ready, willing, and able, and are

its allies and coalition partners ready, willing, and able to execute properly?

QUEST: All right. When you have a Gulf war, whether it's early 90s or 2003, you have a -- you put together this coalition, hundreds of

thousands of troops mass, they go into war, for better or worse, there is a result one way or the other, and the effects linger on.

But this is going to be very different, because we're not going to be able to see on a day-by-day basis, incremental benefits or gains.

ZARATE: Well, I think you might be able to do that. We've seen that in recent weeks with the dislodging of ISIS militants around the Mosul Dam,

key infrastructure, key areas that they control. So, you may be able to put dots on a map to know whether or not progress is being made.

But your larger point is the right one, Richard, which is the question of what comes in a place like Syria, and how do we assess success there --

QUEST: Right.

ZARATE: -- is going to be very hard.

QUEST: And when we hear there is some dispute now, because originally, the British foreign secretary said that the UK would not be

involved in the bombing of Syria, because of course, the UK had a parliamentary vote and that was not going to be revisited.

Now, David Cameron is suggesting otherwise. But the point is made: if Syria or activity in Syria is an essential part of that campaign, then

they're in trouble.

ZARATE: I think that's right. I think what makes this campaign, either the coalition-building or the actual execution of the strategy, so

complicated is the Syrian dimension. For a number of years now, the American administration has not wanted to get involved into the quagmire of

Syria, and now, it's going to have to --

QUEST: Right.

ZARATE: -- if it is to deal with ISIS. And that's really the challenge here, because how do you define the battle lines? How do you

define the actions that may be taken that would inadvertently strengthen Assad? These are key political and strategic calculations that now have to

be taken into account.

QUEST: Effectively, the president last night, without -- let's not get into any technical phrases of the War Powers Act here in the United

States. We have neither time nor energy for that discussion. However, he effectively declared war on ISIS, in a fashion, said he was going to put

together this coalition, he's got his coalition.

But he's got the midterms this year, and in two years' time, a full general election. How can you prosecute this campaign in the febrile

political environment of the US?

ZARATE: Well, in the first instance, I think there's now popular support for taking action against ISIS. If you look at recent polling,

there's actual public support for getting engaged much more aggressively than in the past. And so, you do have some popular opinion backing the

president's position.

You also have to get bipartisan support, there's no question about this. And there's also a realization -- I think this is coming from both

the administration and from Capitol Hill -- that this is going to take many years and will certainly outlive this administration. And so, how do we do

this properly, how do we set the strategy right, and how do we execute with our allies?

This certainly is a war. The administration isn't going to call it that, they're purposely not using that terminology, as you heard in the

president's speech, but that's what's happening with the airstrikes, with the ground forces, and certainly with more American advisors going to Iraq.

QUEST: Juan, we're glad you're here to help us understand what's happening. Thank you, sir, for taking time --

ZARATE: My pleasure, Richard.

QUEST: -- in your busy day. We appreciate it.

And we, now, need to just take a pause, as indeed the United States paused to remember today the victims of the vicious terror attacks on

American soil 13 years ago, when nearly 3,000 people died in the 9/11 attack.

This is a live picture of One World Trade Center, the Freedom Tower, as it was meant to be and is often called.

(BELL TOLLS)

QUEST: At the White House, the president and the vice president took part in a moment of silence.

(BELL TOLLS)

(SILENCE)

QUEST: There was a moment of quiet reflection at the New York Stock Exchange.

(SILENCE)

QUEST: Poppy Harlow was at the commemoration in New York.

(BEGIN VIDEOTAPE)

POPPY HARLOW, CNN CORRESPONDENT: Hi, there. You know, it's hard for any of us to believe that it has been 13 years since this nation was

attacked on 9/11, taking nearly 3,000 innocent American lives. And some of the families that we've spoken with have said it seems like it was just

yesterday. The time does not make the pain go away in any respect.

We spoke with a young girl this morning who was four when her father was killed in the attack. She's 17, now, and she comes to read the names

of those lost, because it makes her feel closer to her father. Many of the families gathering in lower Manhattan by the 9/11 Memorial this morning for

the memorial service. Many families grieving privately in their own way.

At the same time, New York City was and continues to be on high alert, as it always is, for any potential terror threat. I can say, and it is

very important to note, that the head of the NYPD says there is no imminent threat to New York City around this 9/11 anniversary, although many police

officers all around New York monitoring potential targets like bridges, tunnels, and the subway system.

I did have a chance earlier today to speak with Homeland Security secretary Jeh Johnson to ask him about any potential threat facing the

United States, specifically asking him about ISIS and if he feels that the American people are getting the message that the administration and the

president are sending. Listen.

JEH JOHNSON, US HOMELAND SECURITY SECRETARY: What we've said is that there is no specific intelligence of a plot by ISIL to attack the homeland

at the moment, but that does not end the story for Homeland --

HARLOW: They're no imminent threat now?

JOHNSON: We know of no specific intelligence of a plot by ISIL to attack our homeland, but again, that's not the end of the story. ISIL is a

very dangerous organization that has demonstrated a willingness to kill Americans because they are Americans.

HARLOW: And Jeh Johnson also saying there is always the concern about any potential domestic-based terror attack, like the Boston Marathon

bombing, so officials, of course, monitoring in every way that they can.

But again, here in New York City, it has been a day for families, loved ones to reflect on what happened to this city 13 years ago. But a

very strong sign of our resolve is One World Trade Center standing 1776 feet tall, a very important number for this country. It is set to open a

little bit later this year. Back to you

(END VIDEOTAPE)

QUEST: This is CNN.

(COMMERCIAL BREAK)

QUEST: The US is signing up to a new round of EU sanctions on Russia. The measures are due to take effect on Friday. Now, what do those measures

include? Restrictions on access to EU capital markets in terms of financing restrictions. Basically, nothing more than 30 days is going to

be allowed in terms of bond purchasing, brokering, sort of -- anything to do with the financial community.

There's restrictions on Russian defense and energy companies, asset freezes, travel bans on a further 24 people -- more than 100 are now banned

from the EU. Russia has promised to retaliate. CNN's senior international correspondent Matthew Chance is in Moscow. Matthew, good evening to you.

The response, we know, is coming. The only question is whether Moscow chooses to be proportionate or go off the deep end.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, what they say is that they're not going to go off the deep end. They say

they're going to introduce their own sanctions, which are, in their words, "commensurate with the economic losses" caused by these latest EU

sanctions.

They haven't specified exactly what they're going to do, although the indications we're getting from officials is that a package has already been

discussed in detail and will be announced pretty soon. Remember, these latest EU sanctions will come into force tomorrow on Friday, local time.

Now, having said that, the Russia state media has gone on the air within the past couple of hours saying look, one of the things that may be

done is a ban on imported motor vehicles from the European Union. That would obviously be an enormous sanction and affect companies right across

the board, companies like Mercedes Benz, Fiat, all the others that sell vast amounts of cars inside Russia.

Another interesting and slightly odd possible sanction, according to Russian state media, is that there could be a ban on clothing items that

Russia can produce itself. So, that may raise some eyebrows in the fashion world.

QUEST: Right. Now, this is very interesting, because if we look at the list of sanctions, highly technical from the EU about banking bonds,

trading, brokerage, 30-day limits and the like. And we look at he defense and the oil restrictions, Matthew. Of those, which will be of more concern

in Moscow tonight? The oil, the defense, or the banking?

CHANCE: I get the impression the biggest problem -- although, remember, the Kremlin aren't looking away on this -- the biggest problem is

going to be access to Western funds, particularly for the big oil majors.

Rosneft is already -- that's the state oil monopoly -- it's already had to turn to the government for a refinancing loan of more than $25

billion. Normally, it would get that money on the Western financial markets. That's being cut off from it.

And so undoubtedly, these sanctions are causing economic pain to Russia. The ruble plunged to a new low against the dollar today as well.

But again -- and we've said this before -- this is not about economics for Vladimir Putin. He seems to be untouched by the damage it's causing.

QUEST: I need to take you into other areas, if I may. Forgive me. But ISIS, president's speech last night, President Obama's speech, already

a comment from Russian defense officials that if the US attacks Syria without a UN mandate, that would be illegal and unlawful.

So, how is the Kremlin going to balance the need to be seen to be onboard with something against ISIS with its pro-Syrian policy?

CHANCE: Yes, it's going to be an interesting balancing act to watch, isn't it? Because the Kremlin is no friend of ISIS. They've described the

actions of that group as "absolute evil."

And one of the reasons they say they back the regime of Bashar al- Assad in Syria is that he is fighting terrorism, in their eyes, such as the Islamic State, which what they say they've been telling the West all along

but have been ignored up until now.

The big concern, of course, in Moscow is that these airstrikes against ISIS could expand into airstrikes against government positions held by the

regime, be a pretext for airstrikes against the government.

For years now, the West, in the eyes of Russia, has been trying to carry out a regime change in Syria, to carry out airstrikes. Russia has

managed to thwart it each and every time through its veto in the Security Council, but this time, it's kind of out of its control.

QUEST: Matthew, thank you, making that very clear and going through that very succinctly. Appreciate it. Matthew Chance, who is in Moscow for

us tonight.

As the EU prepares those sanctions on the Russian energy sector, a top executive at the Russia State Atomic Energy Company assured his company

should be left out. ROSATOM controls 17 percent of the global nuclear fuel market, and the company's deputy director for international business told

Jim Boulden it's business as usual for now.

(BEGIN VIDEOTAPE)

KIRILL KOMAROV, DEPUTY DIRECTOR GENERAL, INTERNATIONAL BUSINESS AND DEVELOPMENT (through translator): The position of our company is that in

any conditions, we've always fulfilled our obligations. And in relation to this, even today, when we have a difficult situation with Ukraine, we

continue to supply nuclear fuel, and we continue to collect the spent fuel to Russia, back to Russia.

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: When it comes to European Union, your competitor, Westinghouse, has been asking for what

they say would be to break up your monopoly of the Eastern European nuclear power. Do you think the European Union is going to be looking at that very

seriously, and has the Ukraine issue made that more likely that they may be investigating?

KOMAROV (through translator): I think that monopoly here only exists in the imagination. Because over the last 20 years in the countries of the

EU, there were about ten tenders where both ROSATOM and Westinghouse participated, and all of these tenders were won by us, by the way,

absolutely based on the honest and open market conditions.

Moreover, today's regulation system provides for the contract, even if it was won at the tender, to be approved by EURATOM. In other words, this

is always under the supervision and under the control of the European Union.

BOULDEN: But maybe the mood has changed in Brussels, and maybe there will be some changes made because of political reasons, because of Ukraine,

not just because of business reasons. You know it's not all just about business.

KOMAROV (through translator): I cannot predict the decisions of the European Union. I can only say that we're an honest company, and we never

gave any reasons to think otherwise. We also see many projects in Europe, and we participate in those. But I think that the question here is that

such limitations and sanctions will first of all affect European consumers and not us.

BOULDEN: But you're not worried that some of those contracts -- future contracts may dry up because of the current, very cold climate

between Russia and the European Union?

KOMAROV (through translator): Again, I'm hoping that common sense would prevail. And in this sense, business is business.

(END VIDEOTAPE)

QUEST: Business is business, and that's why we need to go to the markets.

(RINGS BELL)

QUEST: In Europe, the stocks closed mostly lower. Well, it was only the Zurich SMI, and that was barely budged up. The largest losses, as you

can see there, were London and the FTSE. The FTSE ended down ahead of the new sanctions coming into force.

The city of London will be affected. It does much of the trade and the brokerage and the bond issuance of Russian companies. Shares in the

fashion retailer Next fell, plunged like a neckline after missing estimates.

The Royal Bank of Scotland rallied after it said it would move its registered office to England if Scotland votes to leave the United Kingdom.

We're going to talk about that in a moment. To the Dow.

(RINGS BELL)

QUEST: It closed lower. It had gained a bit -- look at the Dow -- the numbers of people, if we take a look at the number of people filing for

first-time jobless benefits unexpectedly rose. Investors looking ahead to the meeting of the Fed. The Dow was off 19 points at the close. It's

barely catching onto 17,000.

Now, when we come back in just a moment, a simple recipe: take some hydrogen, mix it up, heat it to a rough 150 million degrees, and what you

get is the sun on a small scale. Unlimited power. Unlimited!

(COMMERCIAL BREAK)

QUEST: Now, as tensions are mounting between the United States and Russia over Ukraine -- we talk about it every night -- there is one place

where things do seem to be working, and that's in space.

An American and two Russians have just returned from the International Space Station. Remember, of course, the only way they can get there is on

a Russian rocket, and they spent six months conducting scientific experiments. NASA's Steve Swanson touched down in Kazakhstan along with

two cosmonaut companions.

These days, you don't have to go to space to get closer to the sun. As Nick Glass found out, the sun and the scientists in Britain, the two are

coming together. They're attempting to recreate the science behind our nearest star. And they're doing it here.

(BEGIN VIDEOTAPE)

NICK GLASS, CNN INTERNATIONAL CORRESPONDENT (voice-over): We simply can't live without it: the sun. That great galactic fireball that gives

us light and heat every day. You'd think it could hardly do much more.

GLASS (on camera): And yet, here, near Oxford, one of the great scientific experiments of our time continues, to somehow mimic the sun and

create an Earthbound star to power our future.

STEVE COWLEY, PROFESSOR, CULHAM CENTRE FOR FUSION ENERGY: Fusion is the process that happens in stars whereby you take small nuclei, you join

them together and make bigger ones. And you can liberate enormous amounts of energy this way.

GLASS (voice-over): Steve Cowley is a physicist. He was first captivated by the idea of fusion power as a teenager.

COWLEY: I was in high school, secondary school, in the 1970s, and the oil shock hit. There was that realization, the way we were powering our

lives was going to come to an end at some point, because oil was going to run out. And I read an article in "Look and Learn" about fusion and was

absolutely fascinated by the idea.

GLASS: The process all boils down to a simple equation: take two forms of hydrogen gas, raise the temperature to 150 million degrees. This

causes atoms within the gasses to ricochet about at tremendous speeds and to collide violently with each other. This fusion creates helium, a

neutron, and a massive amount of energy.

And this is where his team is trying to make that happen, in a special chamber called JET. We arrive in the control room just in time for another

test, or shot, as they call it.

COMPUTER VOICE: Three, two, one, zero.

GLASS: The screens light up and, for 20 seconds or so, we witness fusion.

GLASS (on camera): It's -- to my mind, unpicturable. One knows the sun is hot, but that's hotter than the sun?

COWLEY: That's actually about ten times hotter than the middle of the sun.

GLASS (voice-over): The project has guaranteed EU funding over the next five years, almost $1 billion. But the challenge is making fusion

commercially viable.

COWLEY: Fusion is the perfect energy source. It can't have a catastrophic accident because it doesn't produce any long-live radioactive

elements. And because it doesn't produce any CO2. And therefore, no impact on the climate.

GLASS: This is where they're trying to prove it can work on a larger scale. At Cadarache in southern France, 35 nations are involved in helping

the world's first fusion plant, Iter, take shape.

COWLEY: Towards the end of the 2020s, I'll be sitting in the control room in southern France, watching that machine burn. And for me, that'll

be the culmination.

GLASS: The JET experiment started just over 30 years ago. They're still learning how this extraordinary energy source behaves and how to

harness it. But for Cowley, it has and will have been energy well spent.

COWLEY: It'd be nice to look back and see the world powered by fusion systems and say, we solved that problem.

(END VIDEOTAPE)

QUEST: Fascinating. You heard it here. And you never know, it's one of those things that all of a sudden, it'll be there everywhere.

As some in Scotland campaign to end the three-century union with the UK, business is worried about what independence means. We're going to take

the high road and show you the low effects to Scotland, next.

(COMMERCIAL BREAK)

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

U.S. officials telling CNN the United States is currently flying surveillance flights over Syria. The aim is to build up intelligence for

future airstrikes as outlined in President Obama's address last night. Syria says unauthorized U.S. airstrikes in Syria would be considered an act

of aggression.

(BEGIN VIDEOCLIP)

BOUTHAINA SHAABAN, POLITICAL AND MEDIA ADVISER TO SYRIAN PRESIDENT: The strategy that I read by Obama it really has many loopholes and it needs

a lot to be desired. And he would benefit a lot from cooperating with the Syrian government against terrorism because we have been truly fighting

terrorism for the last four years.

(END VIDEOCLIP)

QUEST: U.S. Secretary of State John Kerry's enlisting support for the battle against ISIS in the Middle East. Mr. Kerry met with the Gulf

leaders in Jeddah and will continue building a regional coalition. He's stopping at Ankara, Turkey and Egypt's capital, Cairo. In an interview

with CNN, the Secretary said the U.S., in his words, "wasn't at war with ISIS," calling it a very significant counter-terrorism operation.

Oscar Pistorius has been found not guilty of premeditated murder of his girlfriend Reeva Steenkamp. Pistorius could still be found guilty of

culpable homicide and of course he faces three weapons charges. The rest of the verdict's expected to be delivered on Friday.

The U.S. and the E.U. are to hit Russia with more sanctions over Ukraine. The sanctions come into force on Friday. The President Obama says the

additional measures will target Russia's financial, energy and defense sectors. It comes as NATO says it believes 1,000 Russian troops are still

inside Eastern Ukraine. Russia has said it will retaliate with tit-for-tat sanctions.

In Catalonia, citizens are taking inspiration from the Scottish referendum on independence. The Catalans want a chance to vote on whether to secede

from Spain. Hundreds of thousands have waved the Catalan colors in Barcelona, demanding a ballot of their own on November the 9th.

So, as Scotland now ponders severing ties with United Kingdom, business is straddling both sides of Hadrian's Wall - both sides of the border are

speaking out. And the warnings signs are there for voters that a yes vote would cause so much confusion, it could put the economy at risk. In the

words of the old song "The Bonnie Clyde Scotland" - you take the high road, and I'll take the low road.

Let's take both roads to Scotland and let's look at the warning signs as we head up the A1 towards Edinburgh. Today we got warnings from URBS,

Clydesdale, TSB, Lloyds, Standard Charter, HSBC - all the big banks queuing to leave Scotland, saying they plan to move their registered offices, the

legal headquarters to the U.K. Some may go further and move operations. They all say they will continue to have Scottish operations, but pews (ph)

are likely. Independence would most certainly mean a slippery road ahead for Scotland's

currency. Even the amber spirit - Scotch whiskey could be in jeopardy. The Scotch Whiskey Association says whiskey relies on tax advantages and

predictable policies from a government in Westminster. And then you've got the hangover from independence - a splitting headache for splitting

pensions both in Scotland and in England. Separating them out -- whose got the assets? Who's got the obligations? Who's got the duty to pay? - would

be highly complicated Finally, as you drive that road to independence in Scotland, be warned rising prices, so say many retailers - a steep gradient as Scottish

consumers are not only in the U.K. but are in the E.U. With potential currency difficulties, it would all lead to greater risk for retailers and

prices go up. Business leaders are saying to Scots, `Try your brakes.' Scotland's First Minister Alex Salmond says the business community has

overblown the negative consequences.

(BEGIN VIDEOCLIP)

ALEX SALMOND, SCOTLAND'S FIRST MINISTER: I think the people of Scotland have moved beyond these warnings and scare-mongerings,

particularly when there is a clear evidence that while the prime minister was busy telling us what a wonderful nation we were, his business adviser

was busy desperately trying to get any business he possibly could to say something negative about independence.

(END VIDEOCLIP)

QUEST: Now, Scotland and the potential for independence is one of the factors that's creating great volatility in the foreign exchange markets -

(joy) all feeding into each other. Join me in the "Quest Means Business" bureau de change - yen, dollars, euros, pounds. We need to look at the

graph, and let's start with the pound against the dollar, and you see straightaway this very sharp fall. What is happening of course is that

currencies are becoming volatile. Now, there may be a slight recovery against the dollar after a sell-off, but the polls are showing us sudden

tightening in the race and that means who knows what. So we turn to the dollar. Now, dollar investors are pouring in, not

surprisingly. Look at the way the dollar against the euro is trading. And then you've got the Fed coming along, which of course a rate hike is

expected next year - no wonder the dollar is also volatile. But most volatile of all, the Russian ruble, which is now at an all-time - or recent

- low against the dollar. It would all be serious enough just to have the ruble bouncing around from that, but if you now add in what's happening

with the dollar and the pound, and you add in sterling as well, you start to see that these exchange rates are exceptionally volatile. And that's

what's causing one of the big issues. Joining me now from CNN in London, Jamie Jemmeson, head of trading at Global Reach Partners. There is no question - volatility in foreign

exchange is one of the core concerns now in the financial markets.

JAMIE JEMMESON, HEAD OF TRADING, GLOBAL REACH PARTNERS: Yes, that's correct. If we look at the way that sterling has performed against the

dollar particularly, just since the turn of this month, we've seen sterling-dollar trade in the range of about 3 percent and it's all due to

uncertainty. And it's not just uncertainty here, it's uncertainty across the globe.

QUEST: Why should sterling be threatened by - I mean, you say uncertainty - but the rump of the U.K. is there, the Bank of England is

still there, they've promised to pay the debt run-up so far. They've got high taxing ability and Scotland's only 10 percent of the economy. So tell

me why sterling is feeling the threat?

JEMMESON: It's for a number of reasons. Nobody actually really knows the real impact that GE - that Scotland's - going to have on the GDP

figures. Ultimately, lots of the figures that we look at nowadays are for the United Kingdom as a whole, not just independently Scotland. Then

there's also the budget issues as well with regards to debts and how much Scotland would be willing to pay.

QUEST: And so now we've got a euro dollar story, we've got a ruble dollar, we've got a sterling dollar, we've a sterling-euro story - how does

this play out? What does the market want most now?

JEMMESON: The market just wants a sense of direction by - of - what's going on, and next week we should get that. On the 17th we've got the Fed

meeting, and what the markets are looking for is the removal potentially of two words - considerable time. And the markets might -

QUEST: Right.

JEMMESON: -- use that as an indicator as to when interest rates go up from the U.S. So that would solve one issue straightaway. The next thing

is the outcome from the referendum on the 18th.

QUEST: Thank you very much for joining us, sir, from London. We'll watch it closely. I appreciate it. Now, when we come back in a moment,

she's at the helm of one of the most closely-followed trials in recent memory. After the break, the rise of Judge Masipa.

(BEGIN VIDEOCLIP)

NOMAVENDA MATHIANE, RETIRED JOURNALIST: This is a woman from the dusty streets of the township. Today, he -- she -- is trying a white boy -

in my lifetime.

(END VIDEOCLIP)

(COMMERCIAL)

QUEST: Judge Thokozile Masipa began delivering her verdict in the Oscar Pistorius trial on Thursday, and the whole world was watching. Just

like the defendant, her life has been about succeeding against the odds. And M'Lady, as she has now become globally know, is famous for it. CNN's

Robyn Curnow reports.

(BEGIN VIDEOCLIP)

CURNOW: A high-profile trial full of characters --

Male: Why are you getting emotional now?

CURNOW: -- with the potential of becoming a media circus. But sitting above the fray, --

JUDGE THOKOZILE MASIPA, JUDGE IN OSCAR PISTORIUS CASE: If you do not want to adhere to the rules, you are free to leave and security will make

sure that you leave.

CURNOW: -- the judge, Thokozile Masipa.

MASIPA: It's important that you should be all here when are in that witness box. Do you understand that?

Male: I do, M'Lady.

CURNOW: Stern, yet at times compassionate, inscrutable throughout.

SUZETTE NAUDE, LAW CLERK: She's a bit of a different person in court than in the office.

CURNOW: Masipa is a study of contrasts says her clerk.

NAUDE: I've been working with her since January and she's just always smiling, almost like working for an angel. In the mornings she will say,

"Good morning, how are you?"

CURNOW: Now her courtroom is again broadcast to the world and her judgment - not just deciding Pistorius' fate, but for many here, an example

to the world of justice in democratic South Africa.

NAUDE: She told me from the beginning we will treat this case a normal case, as all other cases. And she's not really showing much emotion

about the case.

CURNOW: Perhaps because she's a judge who's faced far greater challenges. It was here in Soweto in the late 1970s at the height of

apartheid that Matilda, as she was then known, became part of a new class of female journalists, ready to risk everything to report on the political

violence and the fight for democratic freedom.

MATHIANE: We were writing those stories. We were writing about the people who were activists, people who had been detained, people who had

been tried, you know.

CURNOW: Nomavenda Mathiane was a fellow journalist and part of that close-knit group.

MATHIANE: We were doing things and Matilda was not there. After work Matilda would go to the library and study.

CURNOW: Other than the newsroom, Thokozile Matilda Masipa was detached, but Mathiane says it was because she was driven - focused on a

future few could imagine.

MATHIANE: I mean if you look at where she comes from and where she is now, it just shows that she knew that one day we are going to be there and will

I be ready when we get there?

CURNOW: The journey that's taken her from a once-segregated Soweto to the high court.

MATHIANE: This is a woman from the dusty streets of the township. Today, he -- she -- is trying a white boy - in my lifetime. I never

thought that would happen.

CURNOW: Robyn Curnow, CNN, Pretoria.

(END VIDEOCLIP)

QUEST: And M'Lady will be concluding her judgment on Friday and we'll have all the details and the life coverage of course here on CNN you can

find the details. Now, talking of M'Lady, well, Mistress of Weather for us this evening -

JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: (LAUGHTER).

QUEST: Mistress Harrison is with us at the World Weather Center. Good evening, Ma'am.

HARRISON: Evening to you, Richard. Yes, I'm going to start of course with the latest update on Pakistan and India - flood conditions. Now,

there's a slight improvement really in things in India because we've got quite a bit of rain, but it's beginning to recede. Now it's hard to

believe it might be when you see pictures like this in Srinagar and it is so very widespread, but it is beginning to recede. It's a bit of a

different problem across in Pakistan because it really is about the river, and in particular the Indus, and where now is it going to crest downstream.

So this is Peer Kot in Pakistan off the (arc) of the floodwaters, and I wanted to show you this - this is a Google earth image. So you can see

obviously what it looks like. It's a fairly significant town of size and of course it is right there - right in between the Jhelum and Chenab

Rivers, and guess what? It is right in amongst pretty much the widest area of floodwaters - well over 20 kilometers in width. That is where it's

situated. So we know of course already it's peaked upstream - Marala - that was on Sunday, working its way downstream. It has now finally peaked

along the - through that Trimmu Barrage. You can see it's beginning to sort of hold steady. It's not really coming down just yet. But at least

we know the peak has reached that particular point. And of course it will continue to work its way downstream as we continue throughout the week.

So, as the waters are advancing ahead of that, the warnings are in place. We've got these five districts - 12 million people in this warning area.

Multan there - that's the fifth biggest city in Pakistan. About 6 million people live in that city alone. So, it is really very crucial now as to of

course all the preparations, evacuations in order. People obviously need to be made very aware of what's going on. Just one or two light showers.

The rain will continue across the north and central areas of India although there are no warnings in place there. And of course the other

consideration is the temperature - the actual weather conditions with all of that standing water. Some scattered thunderstorms Friday in Multan and

then Saturday and Sunday it's dry. Pretty much the same for the whole region - dry conditions. Temperatures are typical for this time of year -

39 degrees Celsius. So, just over 100 Fahrenheit. It feels more like 42 which about 106 because of the humidity. We'll keep you updated of course

with the progress of that flow of water. Meanwhile, central Europe very heavy amounts of rain here as well, a very

slow-moving area of low pressure. This coming on top of several areas of stubborn low pressure - 165 millimeters in just 18 hours (inaudible)

Croatia. And also you can see further to the south - 118. So that's enough certainly to cause some flooding. This is the low moving very, very

slowly. It's pretty warm ahead of that system. In fact, temperatures are above the average. But because you've got that cooler air to the west,

you've got that warmer air in the east, we have got some warnings in place, so possibly some strong thunderstorms, maybe some flooding rains. It will

continue to add up as you can see. And as I say, the one thing though in order - this is some nice warm September sunshine further to the east.

Kiev, Warsaw and Bucharest, temperatures a good five degrees above the average. Richard.

QUEST: I'm going on my holidays next week to Spain.

HARRISON: Oh, Spain. Rain falls mainly on the plain. Yes. Very nice and warm there for you. I shall give you a personal forecast before

you go.

QUEST: Thank you. Tomorrow night's when (inaudible) comes from London. Thank you now very much. Jenny Harrison at the World Weather

Center. As the stilettos march down the catwalks for the last day at New York Fashion Week, we're going to tell you how one designer went from

sleeping in Central Park to the most exclusive circle in the fashion world. That's next. It's "Quest Means Business."

(COMMERCIAL)

(VIDEOTAPED SONG): We're all so beautiful, you are so sexy. Work it, work it.

QUEST: Ha - fashion week in New York is drawing to a close. Now for those of you who didn't make it to the front row of the catwalk shows, we

wanted to give you a short digest of some of the trends that we've seen, some of this year's key fashion themes. Firstly, things are slightly more

demure. Here's Victoria Beckham and Tory Burch knitwear. As you can see, hemlines are well and truly lower. Animal prints were all the rage this

year. Soriano Williams (ph) Designs of course showed some of them off and even wearable technology made it to catwalk. Wearable technology was all

over the place and indeed we'll see much more of it as we move through the years with the Apple Watch.

Well if you've made it to New York Fashion Week, you can pretty much make it anywhere - so the saying goes. For one designer, getting there was

harder than most. Brooke Baldwin met Elie Tahari as he showed off his latest collection.

(BEGIN VIDEOCLIP)

ELIE TAHARI, FASHION DESIGNER: Can't help it, but this colors makes me happy.

BROOKE BALDWIN, ANCHOR OF 2 -- 4 P.M. EDITION OF "CNN NEWSROOM": It's hard to imagine. Multi-million-dollar designer Elie Tahari arrived in New

City more than 30 years ago with just $100 in his pocket. Today, his fashion is on display across five continents in more than 600 stores.

ELIE TAHARI: (LAUGHTER). We're going to make it together.

BALDWIN: But the designer himself wasn't always dressed for success.

TAHARI: My father was 25, four teeth and no job, so it's - and I was a second child so I get the second clothes.

BALDWIN: You got the hand-me-downs.

TAHARI: Right.

BALDWIN: Elie Tahari wearing hand-me-downs --

TAHARI: All the time.

BALDWIN: -- as a child. After his family fled Iran for Israel. Tahari was raised in an orphanage and he eventually served in the Israeli

Air Force. He moved to New York City in his 20s with nothing - homeless and sleeping on park benches. Did you appreciate sleeping in Central Park?

TAHARI: I appreciated the air I breathed in Central Park. I always was in a mode of survival.

BALDWIN: By day he worked as an electrician. By night, he sold women's clothing. And then the light bulb went off. He wanted to make the

clothes himself.

TAHARI: When I came to New York, I worked in a woman's boutique because I liked, you know, -- I never been around women.

BALDWIN: You liked the ladies?

TAHARI: Absolutely.

BALDWIN: (LAUGHTER).

TAHARI: So it was - it's an attraction.

BALDWIN: His big break - 1978. Studio 54, Elie Tahari's first fashion show.

TAHARI: But we launch our brand Elie Tahari in Studio 54.

BALDWIN: What was that like - that first moment for you?

TAHARI: Well, I always appreciate what I did and I loved what I did. The challenges - you love it so much that you don't mind doing it, you

don't mind sweeping the floor -

BALDWIN: You swept the floor?

TAHARI: I did everything.

BALDWIN: We have Elie Tahari to thank for the popularity of the tube top in the 1970s, he gave women their first tailored suits in the 1980s,

and today his clothes are synonymous with the successful career women.

TAHARI: Women are best the way God created them. When I was in ego (ph), I used only skinny, tall models and my business went down.

BALDWIN: Yes.

TAHARI: So ego is not good for business.

BALDWIN: I like it.

TAHARI: Right.

BALDWIN: Thank you for dressing us normal gals.

TAHARI: That's right.

BALDWIN: At what point across your lifetime here in Manhattan did you realize `I made it'?

TAHARI: Well, that's a tough question because I haven't felt that feeling. The older I get, the more I love what I do, and the more I feel I

have work to do.

BALDWIN: At his New York Fashion Week presentation, his designs evoked the latest trends in technology and edge. He even has R&B queen

Mary J. Blige singing his praises.

MARY J. BLIGE, SINGER: When I feel professional, I feel comfortable most of all.

BALDWIN: Work that.

BLIGE: Work that - (LAUGHTER).

BALDWIN: So from the sleeping in Central Park to showing his new collection on Fifth Avenue, has Elie Tahari finally arrived? Everyone's

staring at your beautiful designs. You're still telling me you haven't made it in the fashion world?

TAHARI: This is after a lot of hard work, so to stand here and to think `we arrived,' it's only the beginning of more to come.

BALDWIN: Brooke Baldwin, CNN New York.

(END VIDEOCLIP)

QUEST: Next year we need Elie Tahari in the C Suite to advise me what's the latest in pinstripes. We'll have a "Profitable Moment" after

the break. (RINGS BELL).

(COMMERCIAL)

QUEST: Tonight's "Profitable Moment." Are the companies who are warning of adverse effects interfering in the Scottish democratic process?

I think not. Those companies involved have a duty to employees, to customers, to shareholders, to all the stakeholders of their companies.

And if warning that a yes to independence would have an adverse effect, then they have a duty to say so out loud. Maybe it's not politic to do so

a week before the vote, but there's nothing wrong with warning the voters about the consequences of their actions. That is what democracy's really

all about. And that is "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL)

I hope it's profitable. I'll be in London and join me there tomorrow.

END