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Quest Means Business
Ebola Fears Spook US Markets; US Airline Shares Fall on Ebola Fears; How to Contain Ebola in US; Ebola Drug Research Stocks Rally; Companies Racing to Develop Vaccines; Protest Crowds Grow in Hong Kong; Hong Kong Protesters' Phones Targeted; Modi Makes Sanitation Push in India
Aired October 01, 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)
MAGGIE LAKE, HOST: A desperate day on Wall Street as Ebola fears send markets deep into the red. It's Wednesday, October the 1st.
Tonight, as the Ebola death toll rises, Western companies are racing to put out a vaccine.
An ultimatum on the streets of Hong Kong. Protesters say they're ready to take over more buildings.
And do your homework. Angela Merkel tells Europe it can't cut corners on cutting the deficit.
I'm Maggie Lake, this is QUEST MEANS BUSINESS.
Good evening. Tonight, US markets slump as Ebola fears spook investors. Doctors treating the first patient diagnosed with Ebola in the
US say he is in serious condition. Health officials have identified between 12 and 18 people who may have come in contact with the man,
including 5 children.
The handling of the case is raising concerns about the spread of the disease. The man was allowed to return home for two days after reporting
to the hospital and telling nurses he had recently traveled to Liberia.
The Dow ended the day down more than 200 points. The Ebola diagnosis is helping to keep CNN Money's Fear and Greed Index pointed to Extreme
Fear.
Airlines posted some of the biggest losses. American Airlines, United, Delta, all ended down around or over 3 percent. Investors worry
Americans may start changing their travel plans if Ebola spreads further in the US. Shares of Jet Blue and Southwest ended lower as well, even though
neither airline has a major presence outside the US.
CNN has just learned the US patient diagnosed with Ebola is Thomas Eric Duncan. The head for the Center for Disease Control and Prevention
says it is crucial for US hospital staff to ask the right questions. Dr. Thomas Frieden says it is especially important to keep tabs on whether
patients have traveled to West Africa.
It was a step that was somehow bungled when the Dallas Ebola patient first came in complaining of illness and was then sent home. Frieden spoke
earlier to our chief medical correspondent Sanjay Gupta.
(BEGIN VIDEOTAPE)
SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: What is the guidance? Should that person have been tested?
THOMAS FRIEDEN, CDC DIRECTOR: We weren't there, so I can't tell you exactly what that person said --
GUPTA: You're advising public health departments. The last time I was here, there was a call with many primary care doctors to educate them
on this exact issue. That was a couple of months ago. Should this person have been tested?
FRIEDEN: We know that in busy emergency departments all over the country, people may not ask travel histories. I don't know if that was
done here, but we need to make sure that it is done going forward, that's the bottom line.
GUPTA: Because right now, there could be -- this could be playing out right now in other emergency rooms around the country, this exact situation
where there could be somebody who has a fever, ends up having Ebola, but they're not tested. As a result, they have many, many more contacts.
That's why outbreaks occur.
FRIEDEN: Absolutely. It's a big country, it's a big health care system. That's why we do extensive outreach to provide information so that
all over the country, people are thinking about that. And if people come in, get their history taken. "Have you been in West Africa in the past 21
days?" And if they have a fever, immediate isolation and testing.
In fact, we've already fielded about 100 calls about patients from around the country who may fit that description. Only 14 of them actually
met criteria for testing, and this is the first who is positive.
(END VIDEOTAPE)
LAKE: Now, while some stocks got hit on Ebola fears, others rallied, like biotech. Shares of Tekmira Pharmaceuticals surged about 20 percent.
Tekmira's experimental Ebola drug was given to Dr. Richard Sacra early last month after he returned from Liberia. Sacra is now recovering.
Shares of BioCryst Pharmaceuticals also gained nearly 6 percent. The US government recently boosted funding of BioCryst Ebola treatment. And
Sarepta Therapeutics rose 4 percent.
A company spokesman told QUEST MEANS BUSINESS that Sarepta has enough product to ship two dozen doses of its Ebola drug in the next few weeks.
He also said there's enough product in the pipeline to create another hundred doses if it gets the funding.
The World Health Organization says GlaxoSmithKline and NewLink Genetics are now working to pump out more Ebola vaccines. Glaxo currently
has an Ebola vaccine in pre-clinical development, and NewLink recently got FDA approval for phase one clinical trials of its Ebola treatment.
My next guest is at the forefront of infectious disease research. Dr. Amesh Adalja is senior associate at the University of Pittsburgh Center for
Health Security. He joins me now from Pittsburgh. Doctor, thank you so much for being with us.
First of all, are we at a situation now that this has come to the States, where we are going to see sort of a new wave, a tipping point here
in getting these drugs and vaccines on the market?
AMESH ADALJA, SENIOR ASSOCIATE, UNIVERSITY OF PITTSBURGH CENTER FOR HEALTH SECURITY: We reached a tipping point with this when this outbreak
was realized that it was -- that this outbreak was out of control, and we started to see things getting moved into phase one trials that were just at
the cusp.
Things like ZMapp, things like the Tekmira product, things like the Canadian vaccine. All of these have been pushed forward, not necessarily
because of this American case, but prior to that. And this has really been a long development since the events of September 11 to develop
countermeasures against Ebola.
LAKE: What kind of timeline are we talking about here? We know that typically it's a really lengthy product from discovery to actually getting
drugs in a plentiful way in the marketplace. What are we looking at in this case in terms of realistic timeline?
ADALJA: Realistically, to have these drugs and vaccines in ample supply is probably going to be on the scale of months to a year or so
before we can have that capacity. This won't be what's going to stop the outbreak this time.
This may change the face of how we deal with Ebola outbreaks in the future, but this outbreak is going to be stopped using tried and true
public health principles that have worked in every other Ebola outbreak.
LAKE: And I know a lot of it is prevention, a lot of it is identifying it early, and that is good old-fashioned, before you even get
to the point of pharmaceuticals. I know that the drug industry and the FDA and officials around the world are going as fast as they can. They've
speeded up the process from what we are hearing.
Is there a risk in an attempt to address this dangerous disease that we don't do the due diligence that we normally do? That we get things out
quickly in order to save people that may end up having unforeseen circumstances? Are you at all concerned about that?
ADALJA: It's definitely important to make sure that we don't cut corners, that informed consent is obtained for these patients who are
getting experimental drugs, that we try to collect safety data.
These drugs have been used in non-human primates, like monkeys, multiple times and have had good results, but sometimes safety signals
occur in humans that may not necessarily appear in earlier studies.
And it's also the fact that these have only been given to a small number of patients. When you give them to larger numbers of patients, new
side effects may emerge, and it's important that we track those.
However, I don't think that we should delay in trying to get these drugs to people because the data is very promising and we have mechanisms
in place. For example, the FDA has something called the emergency use authorization, which we exercised during 2009 during the H1N1 pandemic to
bring a new antiviral to market early.
And I think those are the kind of approaches that we're going to need to deal with this outbreak and with other infectious disease outbreaks in
the future.
LAKE: Doctor, we've been working really hard at CNN to make sure that we don't spread panic, that we inform our viewers. In terms of what you've
seen for infectious disease, is this the kind of disease that you can adequately adjust through vaccine?
Or is it one of those that just is hard to pin down? It morphs, it changes quickly, and that there's going to be a risk that vaccines even
won't be enough? Where does this fall on that line?
ADALJA: We have vaccines in development that have shown really great results in animal models, and they've been given to a couple humans in
trials, and we're starting this big trial at the NIH. I do believe that we will be able to control Ebola with vaccines once we get the appropriate
vaccine.
It's not -- the challenge will be to make sure that the vaccine is effective against all strains of Ebola. There are four strains that infect
humans and cause disease, and the vaccine needs to be tailored to that specific strain. But I do believe that this is something that could be
theoretically controlled with a vaccine and change the face of how we deal with Ebola in the future.
LAKE: Well, it's already had a crippling human cost, and we're glad the medical community is doing everything it can at this point to try to
get ahead of it and stop it. Doctor, thank you so much for joining us today.
ADALJA: Thanks for having me.
LAKE: Still to come, pro-democracy protesters in Hong Kong threaten to escalate their campaign if their demands are not met within 24 hours.
We'll go there live, next.
(COMMERCIAL BREAK)
LAKE: Protesters in Hong Kong have issued an ultimatum. The Hong Kong Federation of Students says it will widen its campaign of civil
disobedience and occupy government buildings if the city's embattled chief executive does not step down. Both sides are digging in.
As China marked its National Day, celebrations in Hong Kong were canceled. Protesters took to the streets in unprecedented numbers, calling
for Beijing to stop meddling in the city's elections. Hong Kong chief executive C.Y. Leung, meanwhile, urged residents to accept the deal over
the 2017 elections as it stands now.
Senior international correspondent Ivan Watson has the latest from the center of the protests. Ivan, we know that the numbers were large once
again today, and the students seem to be wanting to take more aggressive action. Is there agreement about that among the many, many protesters that
you're standing with?
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, there is a bit of a contradictory message coming out right now, Maggie, because on the
one had, this -- what's turning into an encampment now -- it really has changed, there are more tents, more kind of fixed little structures that
have evolved here and been built up in the last 24 hours.
There's this one message, which is "No violence, peace, love," which is kind of put up everywhere in these signs, and it's a message that's
being repeated again and again. But on the other hand, you've got some of the protest leaders calling for an escalation of their campaign of civil
disobedience and for trying to occupy, potentially, more government buildings.
Which would put protesters, potentially, in confrontation with the police and the security forces. Now, what happened last Sunday was that
the police, they used teargas, they used pepper spray against unarmed demonstrators.
And that appeared to have given the protest movement the upper ground morally speaking. They were able to occupy the moral high ground, and they
won a lot of sympathy from people in Hong Kong. But if the protesters then try to invade government premises, that perception of them may change.
Now, it's important to try to get a sense of what some other people outside of this kind of protest bubble think about this protest movement,
and what's important to note is what mainland Chinese think.
This is, again, a national holiday, the anniversary of the founding of the People's Republic of China. It's a time when traditionally many people
from mainland China come to Hong Kong to shop, to go on vacation.
We know that the media is very heavily censored in mainland China, so we've been going out trying to talk to some mainland Chinese to hear what
they think of this protest movement. Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE (through translator): I saw some people turning the Chinese flag upside-down. We think it's fairly disrespectful. Even
though we are from China, Hong Kong is still part of China, and they are Chinese too.
UNIDENTIFIED FEMALE (through translator): I think the Hong Kong people are of a high quality. They're very polite, and they don't get in
the way of our shopping.
UNIDENTIFIED MALE (through translator): Many of us came here for a holiday from different places. A lot of us came to shop. It's very
inconvenient to walk around.
UNIDENTIFIED MALE (through translator): We are a bit scared here. This is not good, and it's not good for the image of the city. I thought
Hong Kong was civilized.
(END VIDEO CLIP)
WATSON: And important to reiterate the position of the Hong Kong government and the Chinese central government, that they have indicated
they're not going to compromise, that they will -- they view this encampment as illegal. And of course, the calls for the top official here
in Hong Kong to step down, well, that's been pretty firmly rejected by the Hong Kong authorities. Maggie?
LAKE: Ivan, I'm curious. Do you see any police presence around? We are expecting that if there is some sort of movement or attempt to occupy
government buildings, there will be a swift crackdown. That would cause one to think the police are somewhere nearby. Have you seen any? Is there
any increased presence of them since the students have made that declaration?
WATSON: Difficult for me to judge. The police are in the background, they're protecting the government headquarters here. But they really have
taken a much less visible role since the clashes, since they used teargas and pepper spray on Sunday in the early pre-dawn hours on Monday.
And have effectively ceded some of these spaces -- this highway, for instance, and some other spaces in Hong Kong to the protesters, to the
demonstrators. It remains to be seen if the protesters try to move into new areas, particularly government buildings, what reaction will come from
the security forces. But at this time, they are quite passive, and they have pulled back.
LAKE: Thank you so much. Ivan Watson for us in Hong Kong.
Well, trading floors in Hong Kong are closed Wednesday and Thursday for public holidays. The protests have already taken their toll, though.
The Hang Seng is down more than 7 percent over the past month, and businesses are concerned about economic damage. As far back as June, major
accounting firms took out full page ads warning protests could force companies out of Hong Kong.
Jimmy Lai is a Hong Kong media mogul who owns one of the city's biggest newspapers. He's also a rarity: a major business figure who is
firmly and vocally pro-democracy. Our own Kristie Lu Stout asked him if the demonstrations have escalated to a dangerous level.
(BEGIN VIDEOTAPE)
JIMMY LAI, CHAIRMAN, NEXT MEDIA LIMITED: I don't know what they're thinking, really, because maybe so many people get involved with the Occupy
Central now that they feel the urgency to push the issue because the kids have to go back to school. They can't always keep on protesting.
And maybe the pressure to finish this, to get something done, has pressure to unite them to take this move. Whether this is too hasty or
not, I have no comment.
KRISTIE LU STOUT, CNN INTERNATIONAL CORRESPONDENT: How are you feeling right now about this protest movement and where it could head next?
LAI: I'm very excited. I'm very touched by these young people. I really see the hope of Hong Kong, because if the government resists to give
us democracy, they have to prepare to fight with these kids for 30 years, because they are still so young.
And what really moved me a lot is all those kids are supposedly from foreign family, supposedly spoiled kids. And these are the spoiled kids:
they're full of spirit to fight for justice. This is something that nobody expected. Everybody wished to have spoiled kids like this. This is
wonderful. It makes Hong Kong such a wonderful city.
STOUT: You call this a very exciting time for Hong Kong, and yet, the business establishment here had been pretty silent about the protesters or
even the use of teargas. They're probably people that you've done business with, your close friends --
LAI: Right.
STOUT: -- your cohorts.
LAI: Right.
STOUT: Behind the scenes, are they quietly supporting the protest movement? What's the feeling among the business establishment?
LAI: I'm sure the business establishment is very apprehensive about this.
STOUT: Yes.
LAI: They don't like any disturbance to the flow of making money. And to a lot of people, this city is so poor that we're only left with
money.
STOUT: Yes.
LAI: We can't have a conscience. We can't have a spirit for justice. I find it very funny, those guys, maybe they have made so much money,
they've become numb. Maybe I'm not a tycoon. I'm just a business -- I'm just a newspaper man.
STOUT: You own the newspaper and then some.
LAI: Yes, I'm just a newspaper guy.
(END VIDEOTAPE)
LAKE: We've heard this week how much mobile technology and social media are playing into these protests. Demonstrators are using apps to
stay connected and avoid censorship. Now, security companies say hackers on mainland China may be using Trojan horse apps to spy on protesters.
Samuel Burke has been following the story. He joins me now. Samuel, what do we know about this? And do we ultimately know who is behind this?
SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: This comes in the form of a phishing attack. So often you get those e-mails, it looks like your bank,
but it's not actually your bank, and you click it, and what the protesters in Hong Kong were receiving were links via WhatsApp, that messenger we talk
about so often that Facebook is purchasing.
Links that made it look like they were going to be directed to new apps for Apple and for Android, but they were really phishing attempts.
That means that these apps could actually get their contact information, their browser history from their phone, their GPS location, record the
audio on their microphone, and even get their phone call history.
That's all according to Lacoon Mobile Security, which is an American- Israeli security company which unearthed all of this.
LAKE: It must have a chilling effect on the protesters, I would think, especially many of them students. We've covered through the week
many of them there against the wishes of their family. To think that they are somehow being tracked, all of their information, has got to be
worrisome.
Samuel, we've covered a lot of protests and the role social media has played in organizing some of them. This is the first time I remember
something like this. Are we looking at a new stage in this relationship between the protest movements and social media?
BURKE: We've covered the role of social media in places like Egypt, Venezuela, you and I talked about many times when they've had protests
there not long ago. And what we see oftentimes is cutting off the connection, all the sudden people can't get on.
But this is the first time in my memory that actually they're being spied on, it would seem, through these fake mobile apps, according to this
security technology company. And I think what's most interesting is that the CEO of this company, Lacoon, he told me on a phone call that they
dissected the code, and when they dissected this code, all the servers pointed back to mainland China.
LAKE: Which is all we know. It's -- as we see anytime we see any kind of cyber security breach, it's incredibly hard to track this. Do we
think that this is going to have an effect on the protesters?
This is an organization -- and it's worth pointing out, isn't it? -- that many times when we see these protests, they're in the developing world
and access to information. This is happening in a highly-connected, highly-sophisticated population that live on their mobile phones. Are they
savvy enough to understand what's happening and work around it?
BURKE: A very tech-savvy community, but the problem is, as soon as some type of hurdle comes up, people are quick to download the newest app.
You and I have been talking about FireChat app. That app that lets people communicate, text messages and photos, without an internet connection.
And as soon as they had slow internet, they said OK, we're going to quickly go to this app. That is the nature of my generation, even savvy
people when they're out protesting, they hear about a new app, they download it, and that's probably what's been happening here.
People saw a link, it looked like it was coming from other protesters, and they used it. So I imagine the next few days, people are now going to
be much more cautious about what they download, whether it's one of these fake impostor apps or even just a new legitimate app, I think people are
going to pause and really think twice before they click that link.
LAKE: It's an extraordinary development and once again shows the rapid, changing nature of social media --
BURKE: That's what it is.
LAKE: -- intersecting with politics in this case. Samuel, thank you so much for that, Samuel Burke.
Well, Gandhi was famous for saying the best way to find yourself is to lose yourself in the service of others. On Thursday, India's new prime
minister and all government employees will spend the day cleaning India. We'll explain after the break.
(COMMERCIAL BREAK)
LAKE: India is celebrating Mahatma Gandhi's birthday. It's typically a public holiday, though not for Prime Minister Narendra Modi. For him,
it's time to get back to work. Taking a cue from Gandhi's teaching, Mr. Modi has ordered government employees into the office to clean up. It's
all part of a nationwide cleanliness effort. Improving sanitation was one of his key election promises.
This is just a day after Modi met with US president Barack Obama and several top CEOs on his first Stateside visit as prime minister. Anand
Mahindra is the chairman and managing director of the Mahindra Group. He was listed among the world's 50 Greatest Leaders of 2014 by "Fortune"
Magazine, and he joins us now. Thank you so much for being with us this evening.
ANAND MAHINDRA, CHAIRMAN AND MANAGING DIRECTOR, MAHINDRA GROUP: Thank you.
LAKE: There was so much media attention around Modi's meeting with Obama, and much talk about rebooting that relationship. Give me your
assessment. Do you feel like Modi achieved what he needed to on the visit here?
MAHINDRA: There's been a lot of talk about what exactly was the objective of this trip, and naturally, there was talk about US trade
relationships, US-India political relationships. I, frankly, think it was first and foremost about Narendra Modi's debut on the world stage.
And what better place to choose for a debut than New York? It does metaphorically and literally have the world's largest stages, whether it's
Radio City or Rockefeller Center or Madison Square Garden, where he came in.
I think that debut, a lot of people asked me in the Indian media, was it too much hype? And frankly, when you win an election with a majority
after 30 years, in an election where 550 million people vote, I think the hype was deserved. I think he did need to come out onto the world stage
and tell people he is a bold new leader with an agenda to change one of the world's most populous nations.
LAKE: It's interesting. I want to ask you this, because when we talk to business leaders, very often they don't care about the politics. They
want to talk about the policies, the result, what is it going to mean for my bottom line?
This is a theme I hear again and again from India's businessmen. The image matters. Why does it matter so much to you? Why is it so important?
MAHINDRA: Well, some of the most successful presidents in the US economically have been great communicators. They change perception.
Nobody's forgotten Reagan out here. Clinton, Obama, they all have very charismatic leadership. And that does pay dividends.
Nobody is going to come to India if we persist with an image which is stereotyped or prehistoric from our point of view. And a lot of people ask
me about these toilets. Well, even Mr. Modi himself when he made his speech on Independence Day said, you'll probably find it funny that a prime
minister's talking about toilets.
I think the man is very savvy. He understands that one of India's biggest image problems is cleanliness, is sanitation. And any pretensions
we have to becoming a global super power, you're going to have somebody when asked that will have this bubble in his head thinking, yes, sure. Do
you have enough toilets for your people?
LAKE: Right.
MAHINDRA: So, I think he's very astute about what he's doing, and I back that completely.
LAKE: He's creating a mandate. So, let me ask you, as his reputation grows, so will expectations. The challenges are enormous. Can he address
growing the economy, making India, rebuilding infrastructure, and wean a population off of subsidies?
That's an enormous task. What makes you think he's going to be able to do it, and what should the priority be? To show he means business.
MAHINDRA: First of all, Maggie, I'm delighted somebody's setting stretch goals in India after a long time. Thank God somebody's setting
aspirations which are going to be hard to follow up on.
One of the things India's lacked is we've not had enough ambition. We've not had enough vision. We've not enough goals. Nobody in the world
has asked, will you do this? Will you deliver? Because there was no aspiration being articulated.
So, I think half the battle's won just by creating an ambition. And frankly, the jury is out. The next six months, I think, are going to be
critical. Because he's made a number of promises here.
And you know what's more important to me? It's not the promises he might have made to President Obama or to the CEOs here. It's to the
promises he made to the Indian diaspora in Madison Square Garden.
He looked them in the eye and he said, "I am never going to give you any opportunity to hang your head in shame for being an Indian." Can you
think of a bigger promise than that? He's going to have to deliver.
So, I think he will deliver more because of that, his promise to his people, than promises to businessmen and investors.
LAKE: Well, we know that you are all going to hold him to it in the business community, and we hope you'll come back and let us know very
frankly how you think he's doing.
MAHINDRA: We will.
LAKE: Anand Mahindra, wonderful to see you.
MAHINDRA: Thank you so much, Maggie.
LAKE: Well, France has just had about enough of austerity. The new budget is out, and it is unlikely to please EU officials. We'll explain
next on QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
LAKE: Welcome back, I'm Maggie Lake and this is CNN, and on this network, the news always comes first. The number of people killed by Ebola
in West Africa has risen to nearly 3,040. The World Health Organization says there are now more than 7,000 confirmed cases. Liberian State News
says the man diagnosed with the virus in Dallas, Texas flew to the United States from Liberia traveling via Brussels. The American man being treated
for Ebola in Dallas, Texas hospital has been named. He is Thomas Eric Duncan the patient's half-brother told CNN. He is the first person to be
diagnosed with Ebola in the United States. Duncan is said to be in serious but stable condition.
We want to warn you that our next story contains some graphic images. At least 40 children have been killed in Homs, Syria after a car bombing
and a suicide bombing outside a school. The two blasts hit as the children were leaving school for the day. This was an Alawite neighborhood in the
city which is now controlled by the Assad regime. There's been no claim of responsibility so far.
Ukrainian officials say at least ten people were killed when shells landed near a school and on a bus in Donetsk. The shelling comes despite a
cease-fire agreement between Kiev and pro-Russian separatists last month. It's not known who fired the shells.
Protests in Hong Kong are continuing. These are live pictures. Student leaders are demanding that Chief Executive C.Y. Leung step down in
less than 24 hours or they will occupy government buildings. They continue to occupy the city's financial district demanding a fully democratic
election in 2017.
The head of the U.S. Secret Service has stepped down. Julia Pierson quit following a major Whitehouse security breach that saw an intruder make
it deep inside the building. Pierson endured a withering question and answer session before a congressional panel Tuesday. She had been with the
agency 30 years.
The French government is refusing to take anymore austerity and defying E.U. budget rules. It's just-announced budget which will see the
French economy miss E.U. deficit targets for at least the next two years. The government is cutting spending but it won't be enough to get the
deficit below 3 percent of GDP until 2017 at the earliest. And France's finance minister says he won't squeeze the economy any harder.
(BEGIN VIDEOCLIP)
MICHEL SAPIN, FRENCH FINANCE MINISTER, VIA INTERPRETER: Our economic policy is not changing but the deficit will be reduced more slowly than
planned due to economic circumstances -- very weak growth and very weak inflation. We take responsibility for the seriousness of the budgetary
situation. We refuse austerity.
(END VIDEOCLIP)
LAKE: France's biggest problem is trying to stick with this no- austerity policy while at the same time trying to shrink the budget gap. France's deficit in 2015 will be 4.3 percent - that is well above the
E.U.'s target of 3 percent for member states. The deficit still won't be on target by the next year - the forecast for 2016 is 3.8 percent. It
won't be until 2017 that the French deficit will fall below the E.U.'s mark when it is projected to reach 2.8 percent. Finance Minister Sapin said
countries like Germany can do more to help Europe in the meantime. The German Chancellor Angela Merkel says credibility of Europe is at stake and
it is time for each individual country to do their job.
(BEGIN VIDEOCLIP)
ANGELA MERKEL, GERMAN CHANCELLOR, VIA INTERPRETER: We're not at the point where we can say the crisis is fully behind us. Therefore, it is now
important for everyone to everyone to fulfill their commitments and obligations in a credible way. This can only be done by the member states
themselves. It is the responsibility of each state to do their homework to boost their competitiveness.
(END VIDEOCLIP)
LAKE: There are signs today Europe' slowdown is hurting manufacturers. Here are the September PMI figures. Anything above 50
means growth, anything below means contraction. After 14 months of steady growth, Germany's manufacturing has come sliding to a halt. Activity
dropped in France though this figure is slightly improved from August. And while the Eurozone as a whole continues to grow, it has hit a 14-month low
and is creeping toward stagnation. Joining me now from CNN London is Christian Schulz. He's a senior economist at Berenberg Bank. Christian,
thank you so much for being with us. Let's get right to the heart of the matter. Is Europe sliding back into recession?
CHRISTIAN SCHULZ, SENIOR ECONOMIST, BERENBERG BANK: Well, probably not recession but certainly stagnation for the rest of the year. And we
certainly cannot exclude even a recession because core countries, the countries that went through the euro crisis in a relatively healthy state
like Germany and France are now the laggards while those countries which were in crisis in 2012 like Spain or even Italy are now actually doing
better than the average. You mentioned the PMIs here. Spain is well above 50 and even Italy is seeing well. So things have changed quite
dramatically in the Eurozone.
LAKE: Christian, what's going on? Is this because of Russia and the sanctions?
SCHULZ: Well, if you look at the timing of when each country hit the peak and then declined, you'd quickly see that the first country to decline
was Germany which pretty much hit the peak in March and then declined. Now what happened in March of course was the annexation of Crimea by the
Russians, so there is some relationship there. There is an external factor, but overall the Eurozone is fragile as well. It's not just these
external events, it's also (inaudible) inflation is very low which bears down on companies' profitability, unemployment is very high. So the entire
Eurozone is in a fragile state, and this external event - the Russian crisis or the Ukrainian crisis - just made things a lot worse.
LAKE: And so what does this mean for the European Central Bank?
SCHULZ: Now, that's the really interesting question. Tomorrow of course we have the meeting at - in Naples in Italy by the European Central
Bank. Expectations are very high. The ECB has said in September that it will start buying assets - not like the Feds, so they're not going to buy
sovereign bonds probably but they are going to buy all sorts of instruments in financial markets including asset-backed securities, mortgage-backed
securities, covered bonds. The number is hopefully going to be quite high so that markets are impressed. In anticipation of this move already the
euro has declined, which in itself is a stimulus to the economy. So hopefully Mario Draghi, the president, will deliver something significant
tomorrow.
LAKE: He's got to get the bazooka out. And, Christian, I can tell you investors here in the U.S. are very concerned about the weak state of
Europe. It's part of what weighed on the market today. Christian Schulz from Berenberg. Thank you so much.
Argentina's main index ended the day down more than 8 percent. That was driven by rumors that Argentina's central bank governor, Juan Carlos
Fabrega, has offered to resign. There's been no confirmation of that - it remains a rumor. But it was enough to move the market.
Well, it was the gateway to the United States for generations of immigrants. Now the tired, poor and huddled masses yearning to breathe
free who passed through Ellis Island are the focus of a new art installation. We'll take you there after the break.
(COMMERCIAL BREAK)
LAKE: Time for today's "Business Traveller" update. Many hotels have made history in their time, but very few are known for being economic
landmarks. If it wasn't for the Vermont Washington Hotel in the U.S. state of New Hampshire, the IMF and World Bank may not even exist as we know it.
It was at that hotel in 1944 where economists like John Maynard Keynes created a new economic framework for the 20th century at the Bretton Woods
Conference. Richard went along for a quick history lesson.
(BEGIN VIDEOCLIP)
RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: Vermont Washington is a grand old hotel - a true
witness to history nestled in the White Mountains of New Hampshire. It was during the summer of 1944 when history came calling. The allies were
feeling competent they would win the second World War. And the man who controlled the world's money came here to usher in a new era of
international finance.
Delegates from 44 countries traveled to the White Mountains, many by train to this remote resort. It was a conference that had been in the
works almost two and a half years. There are many hotels that could have hosted this conference. The U.S. government picked this one for particular
reasons. Stephen Hilliard is the managing director of the Mount Washington Resort.
STEPHEN HILLIARD, MANAGING DIRECTOR, MOUNT WASHINGTON RESORT: This hotel was chosen for a couple of reasons. One is it had great train
access. And so transportation wasn't going to be an issue. There were 50 trains a day that had come in and out of here pre - you know - pre World
War II. So it was easy to get people in and out of, it was remote and so therefore easy to secure - that was an important piece. And interestingly
enough, one of the things is it was open to people of all faiths, and that was not true in those days.
QUEST: Getting the hotel ready for the conference was neither easy nor cheap. The hotel had been closed during the war. It was in a horrible
state.
DICK HAMILTON, PRESIDENT, WHITE MOUNTAIN ATTRACTIONS: Paint was peeling off, things were - ceilings were dropping, and you know, everything
was - it was really a mess. They spent over a million dollars in - they painted the entire place.
QUEST: This was a U.S. government bailout of hotels of sorts, and in the nick of time. This hotel wouldn't have reopened.
HILLIARD: That's correct. Yes, everyone that we talked to has said that this hotel would never, ever have reopened had it not been for the
conference.
QUEST: For three weeks, the delegates met often late into the night. This was no social event. Great economic minds like Lord John Maynard
Keynes from the United Kingdom or Conrad Emmis Stephanoff who headed the Soviet delegation, and of course U.S. Treasury Secretary Henry Morgenthau.
The countries which had the most clout on the world stage 70 years ago were very different from today. The U.S. and the U.K. were seated next to each
other on the top table, surrounded by Bolivia, Iceland and Iraq. Further down the table were China and previously Nazi-controlled France.
HAMILTON: The important delegates stayed here. The less important delegates were the Secret Service and the FBI took over the neighboring
hotels also. Because there was 770 people and this could only hold about 250.
QUEST: What was agreed at Bretton Woods would last for decades - not least setting the gold standard. Where the U.S. dollar was tied to the
price of gold at $35 an ounce and the United States currency became the world's number one.
HAMILTON: It makes your hair stand on end to think that his room was the place where a lot of our future was - in the financial world - was
decided on.
QUEST: Now the hotel's opened year-around and it's filled with families, hikers and those looking for a weekend getaway. Sitting on the
veranda, taking in the view. The Mount Washington Hotel played its part in history, and this rich legacy is not over yet.
(END VIDEOCLIP)
LAKE: It was called a hospital for all nations - the Immigrant Hospital at Ellis Island off the coast of New York City - was where
hundreds of thousands of migrants hoping to enter the United States were screened for infectious diseases. It has been almost untouched for 60
years, apart from one addition. An art exhibition bringing the former inhabitants of the hospital back to life. Clare Sebastian reports.
(BEGIN VIDEOCLIP)
CLARE SEBASTIAN, SENIOR PRODUCER FOR "QUEST MEANS BUSINESS": If you were a patient at the Ellis Island Immigrant Hospital, you were guaranteed
only one thing - a truly magnificent view. Now, after 60 years, that view is back. And thanks to French artist J.R., so are the ghosts of Ellis
Island.
JANIS CALELLA, PRESIDENT, SAVE ELLIS ISLAND: I feel like I'm in the presence but very possibly behind the walls, you're seeing just a glimpse
of the past. My hope is that his work will inspire people to think about the people who passed through Ellis Island.
SEBASTIAN: The life-sized photographs seem to grow out of the crumbling walls. From the patients in the psychiatric ward to the children
with a suspected scalp disease. The photographs are really the only thing that's change here in the last 60 years. Everything else is basically as
it was left in 1954. Eve this, the old autoclave - the original machinery used to sterilize mattresses.
TONY MROZINSKI, TOUR GUIDE, ELLIS ISLAND: This is the morgue. Bodies were stored in these refrigerated units over here. The doctors would have
set in the front here. Stadium seating --- this was a teaching hospital.
SEBASTIAN: It's here the emotion of working in this place is shown.
MROZINSKI: This was - OK, how do we make it better? If they didn't care, they wouldn't have died.
SEBASTIAN: How many people died at Ellis Island?
MROZINSKI: On Ellis Island, 3,500 people passed away. Fourteen hundred were children.
SEBASTIAN: Less shocking when you consider 1.2 million people were treated in this hospital, one in ten of those who passed through the
Island. Three hundred and 55 babies were also born here. And ultimately the facility did achieve its goal - to protect the public health of the
United States.
BARRY MORENO, ELLIS ISLAND MUSEUM HISTORIAN: There was no epidemic that really stemmed from here, no. This played a very big role in
screening immigrants so that these kinds of diseases could not get into the country.
SEBASTIAN: Those deemed fit enough to enter the U.S., are the ancestors of an estimated 40 percent of Americans today. Clare Sebastian,
CNN on Ellis Island.
(END VIDEOCLIP)
LAKE: Parts of the Middle East are suffering from severe drought. Jenny Harrison is at the CNN International Weather Center and she joins us
now. Hi, Jenny.
JENNY HARRISON, WEATHER ANCHOR FOR CNN INTERNATIONAL: Hey, Maggie, I know we're always talking about drought, aren't we? Or we're talking about
flooding rains. There just doesn't seem to be any happy medium at the moment. But in particular, before I get on to the actual Middle East, let
me just draw your attention to the Aral Sea. Now, this used to be the fourth largest lake in the world. Well, it hasn't been that way for some
time now, and this what it looks like currently. But I'm just going to take you back a little bit and show you the progression of the drought over
the last ten or so years.
Now first of all, though, you'll notice this black line that's been drawn around here. Well, this was pretty much the size of the lake back in
1960. But then things began to happen. So you've got these two sort of branches of the lake, and basically this water was fed by two rivers. And
in the 1960s - in fact, in 1960, look at this - the water diminishing over the years. The Soviet Union as it was then decided to divert these two
rivers and they wanted to create this area for water to actually obviously produce crops to grow - crops to grow - cotton, this sort of thing. But
look at what's happened over the years - this is what it look this year. All we have let now is this sliver of water down here.
You'll notice this line as well. That was actually a dam - a bit of a last-ditch attempt by Kazakhstan to try and preserve the water, and really
all it's done is it just became a death sentence for this particular area. But just shocking to think that this was at one time completely full of
water. And of course not only the communities that live there did their livelihoods dry up. But also, it has had an influence on the local climate
because a huge body of water like this has a real influence on the climate.
So for example, in the winter, it wouldn't have been as harsh. Now winters are much colder, much dryer as well. And in the summer months, it
is now hotter because, again, there's no cooling influences coming off this water. So this is obviously what happens when things are interfered with
shall we say in nature. But this is the state across much of the Middle East, certainly towards the West, you can see these areas in exceptional
drought.
But in particular, look at Iran because, again, a huge majority of the country here is under some form of drought. Certainly a moderate
drought. Now it's very typical within the summer months we have some dry weather conditions - nothing unusual there. But they have had a very, very
dry year so far. However, in the last couple of days, they have had some substantial rainfall. Look at this - 139 millimeters, 91. But
unfortunately you get heavy rain like that on very dry ground, and of course it does lead to flash flooding and localized flooding as well. But
we'll keep an eye on that. Because as I say, that's the situation with the drought there.
And meanwhile in Europe, there hasn't been a drought across the south. In fact, again, Italy was seeing some very heavy amounts of rain. Here's a
couple of totals for you - 100 millimeters and 63. The good news is, Maggie, this rain is pushing away from Italy, pushing into the southeast.
Still mild across much of Europe. Another system on its way to the northwest and more rain still across the western end of the Mediterranean.
LAKE: All right, Jenny, thank you so much. Jenny Harrison for us. We have news just coming in to CNN. Argentina's president has accepted the
central bank governor's resignation. We mentioned it earlier, it was a rumor, it's now confirmed. Argentina's main index ended the day down more
than 8 percent on those rumors that Juan Carlos Fabrega had offered his resignation. Bruising day for them.
After the break, we will hear from the editor of the ("Chinese Vogue"). She'll explain why those big luxury brands might just be going
out of fashion in China. That's after the break.
(COMMERCIAL BREAK)
LAKE: Paris Fashion Week is drawing to a close. Industry bosses will be hoping designs like these will appeal to international buyers and in
particular, to Chinese fashion fans. Chinese consumers account for almost 1/3rd of luxury goods and fashion sales worldwide. And when they need
advice about what to buy, they turn to Angelica Cheung, editor of "Vogue China." She's been talking to Myleene Klass about China's increasingly
sophisticated tastes.
(BEGIN VIDEOCLIP)
(MUSIC PLAYS)
MYLEENE KLASS, HOST OF "FASHION SEASON: PARIS": Angelica Cheung is the most powerful player in Chinese fashion. She launched "Vogue China"
nine years ago. It has become the brand's most successful publication outside of America. Four additional issues have to be published each year
to cope with the volume of advertising. As editor-in-chief, Cheung has helped catapult young Chinese designers like Hoi Shang Zangh (ph) onto the
international state.
ANGELICA CHEUNG, EDITOR, "VOGUE CHINA": The fact that we're very successful in China was sort of - it's great - but in China you should do
well. It's a great time, great place. And what I'm particularly quite proud of is the fact that we really gained the respect from the
international fashion and creative ().
KLASS: Chinese style has undergone a revolution in the past ten years. Under the austere communist rule of the Mao era, luxury was
scorned, and expressions of individualism were suppressed in favor of uniformity. But with the first flush of economic reform, fashion began to
flourish.
CHEUNG: When someone has been starving for long time, the moment you see food, you don't want - you don't pick and choose, right? So when the
country opened up and luxury products started to flood in, people were not sophisticated or educated enough about luxury, about fashion. They went for
something they could easily understand which was symbols/logos. Now suddenly they feel that, 'Hold on a second, I want to decide what actually
suits me.'
KLASS: As Chinese style evolved, so too did the industry.
CHEUNG: In 2005, I was struggling through three or five Chinese designers whose work would not look to awkward next to the Diors, the
Chanels and the products in a magazine. And now we have so many Chinese designers. Ten years ago, everything - everybody - wanted was modern -
Western. What I find with the young generation of design is that now they are increasingly more interested in their own heritage.
I'm very conscious of our role in educating our readers about something that is classic, something that is traditional, something that is
not particularly new to the Western world, but it's probably quite new to the Chinese. When this education is complete, the Chinese will begin to
make their own fashion history, and Angelica Cheung, as ever, will be on the front row watching. Myleene Klass, CNN Paris.
(END VIDEOCLIP)
LAKE: And when we come back, we'll update you on how stock markets ended today here in the U.S., and we'll have an update on the resignation
of Argentina's central bank governor. Stay with "Quest Means Business."
(COMMERCIAL BREAK)
LAKE: We have an update to the situation in Argentina. The country's president Cristina Kirchner has accepted the central bank governor's
resignation. Alejandro Vanoli, the president of the National Securities Commission has been named as the replacement. Argentina's main index ended
the day down more than 8 percent on rumors Juan Carlos Fabrega had offered his resignation.
And we want to bring you a final check of the markets. It's not a pretty picture. The Dow had one of its worst days this year. It ended
down 238 points as Ebola fears spooked investors. Airlines were among the hardest hit - American Airlines, United and Delta all ended down around 3
percent. Investors worry Americans may start changing their travel plans if Ebola spreads farther in the United States.
Shares of JetBlue and Southwest ended lower as well, even though neither airline has a major presence outside the U.S. And that's "Quest
Means Business." I'm Maggie Lake. "Amanpour" is next.
END
