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Quest Means Business
Ebola Virus Spreads in Spain; ISIS Advances Toward Turkish Border; Turkish Prime Minister Disappointed in US Vice President's Comments; Biden Apologizes to Turkey, UAE; US Allies Crack Down on ISIS Funding; US Stocks Fall After Early Surge; Hong Kong Protest Crowds Thinning; Fitch Warns on Long-Term Hong Kong Prospects; Brazil Stocks Rally on Neves Finish
Aired October 06, 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: It's a chip-chop day on Wall Street. Those early gains gave way to afternoon sellings, but small movements throughout
the course of the session. The Dow is down at the close. When the man hits the gavel -- I tell you that it is Monday, it is the 6th of October.
Tonight, for the first time, someone outside West Africa has contracted Ebola. We'll be live in Madrid with the latest details.
Also tonight, at odds with the allies. Turkey's prime minister's responding to claims his country has helped ISIS.
And it's make or break for HP. That's the company. Well, now the company is separating in two.
The start of a new week. I'm Richard Quest, and of course, I mean business.
Good evening. We begin tonight in Spain, where an assistant nurse has become the first person to contract the Ebola virus outside of the African
continent. The health worker was infected while treating a missionary who'd returned to Spain after falling ill in West Africa. These are the
details according to the Spanish health minister.
Our correspondent in Madrid is Al Goodman. Al joins me now from the Spanish capital. Al, how on Earth does a nurse in a modern, state-of-the-
art facility contract Ebola when treating a patient suffering from it?
AL GOODMAN, CNN MADRID BUREAU CHIEF: Well, the health minister and all of the other officials at the Healthy Ministry who've just come from
there, Richard, said that all of the proper protocols and procedures were followed, and they just don't know. That's what they're saying right now.
Now, they have put the 30 other members of the medical team who treated the two Spanish missionaries who caught Ebola in Africa in Liberia
and Sierra Leone. One of them died in August in this hospital in Madrid where this nursing assistant worked, the other died in September. She was
on both teams, and she has gotten it now.
Now, her role was to go and take the temperature. She went into the room after the missionary who'd died in September was gone to help remove
the effects. But they just don't know. They have put the 30 other people -- that's doctors, nurses, and others, including nurses' assistants, like
her -- on watch.
QUEST: Right.
GOODMAN: They're checking their temperature twice a day, and they're also looking at the ambulance crew who took her to the hospital yesterday,
Richard.
QUEST: Now, we've been told time and again by the WHO, they put out an announcement even today saying how you could contract it, how you
couldn't, the infectious versus contagiousness of the virus. So, Al, when you get this sort of situation, how are the Spanish Health Ministry -- I
suppose they've basically got to play it down in a sense that you still can't catch Ebola during the normal course of everyday events.
GOODMAN: That's exactly -- that was the message repeated time and again from the health minister on down to all of her senior officials
there. But they really don't know what went wrong. And this was not just any hospital. In addition to being modern here in the Spanish capital, it
was the reference hospital for infectious diseases. So, they really don't know what went wrong.
Now, this nurse's assistant is at a different hospital, and so they're trying to find out what happened with her. She's married, she doesn't have
any children. They're looking at the people she's been around. She fell ill a few days after the last missionary died, and has been under watch,
but she went to the hospital yesterday.
She is going to be taken from this other hospital in the south Madrid suburb to the reference hospital --
QUEST: Right.
GOODMAN: -- and we're not sure which team is going to now try to treat her. Richard?
QUEST: And in a word, Al, is there a sense that this is under control in Madrid?
GOODMAN: Well, we've just talked to some people on the street, and we've talked to some people who said, well, there's reason to be quite
worried. Another one, an older lady said, well, if we get all nervous and anything, nothing's going to work, so we have to try to stay calm.
Richard?
QUEST: Al Goodman, who's our correspondent. Al, thank you for that. Later, Madrid. We appreciate it.
Now to our other main story tonight: ISIS fighters appear to be on the verge of capturing the strategic Syrian city of Kobani close to the
border with Turkey. The militants' black flag, as you can see, is now flying in two locations on the eastern outskirts. One is on the top of a
building. The other is on the top of a hilltop. There you see the flag.
ISIS is battling to capture the town from the Kurdish forces, and they're doing so by pounding with heavy artillery fire. Taking Kobani
would give ISIS an uninterrupted stretch of land between the Turkish border and the self-declared ISIS capital in Raqqa, as you can see. That
corridor, which would be so strategically important, some 60-odd kilometers long deep into Syria and into Iraq.
In an interview with Christiane Amanpour, Turkish prime minister insisted his country would help those fleeing the fighting, and said he was
disappointed by comments made over the weekend by the US vice president, in which he blamed Turkey for fueling the rise of ISIS.
(BEGIN VIDEO CLIP)
AHMET DAVUTOGLU, PRIME MINISTER OF TURKEY: It was really very disturbing for us, and we explained everything to our American friends.
Suddenly, after all these good meetings, when a leader from an ally, such as the United States, accusing us, this was unbelievable and unacceptable.
I immediately responded that it is unacceptable and nobody can blame Turkey because of the mistakes committed by P5 in not responding to such a
humanitarian crisis when we received millions of refugees.
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Is it OK now?
DAVUTOGLU: Now, yesterday, when he called our president, we were together with President Erdogan in his home for celebrating Eid, and I
personally said yes, he apologized, and now it is over. But I hope no other leader in the future will accuse a country who worked so hard to
respond to a humanitarian crisis.
(END VIDEO CLIP)
QUEST: The US vice president Joe Biden has since apologized to Turkey and also to the United Arab Emirates, the UAE, for his comments.
(BEGIN VIDEO CLIP)
JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: Our allies in the region were our largest problem in Syria. The Turks were great friends,
and I have a great relationship with Erdogan, which I just spent a lot of time with. The Saudis, the Emiratis, et cetera. What were they doing?
They were so determined to take down Assad and essentially have a proxy Sunni-Shia war, what did they do? They poured hundreds of millions
of dollars and ten thousands of tons of weapons into anyone who would fight against Assad. Except that the people who were being supplied were al-
Nusra, and al Qaeda, and the extremist elements of jihadis coming from other parts of the world.
(END VIDEO CLIP)
QUEST: Jim Sciutto is CNN's chief national security correspondent, joins me now from Washington. Jim, you're now firmly in my area, which is
finance. Did Joe Biden merely speak the truth that dare not speak its name? This is man who is a national, international security expert.
JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Listen, he spoke some truths, with some caveats, and also some distinction among the
various allies in that part of the world.
We know for sure that there's an enormous pipeline of financing going from several Arab countries into the hands of extremist groups, not
particularly ISIS, but some of the other groups on the ground there: al- Nusra Front, which is an al Qaeda-tied group, and others.
The thing is, in general, this flow of money is through private channels rather than government channels. But what the allegation is that
the governments turn a blind eye to what's happening in the private channels.
But there are particular countries that are doing a better job versus a worse job. It is understood that Kuwait is the main transit point for
this kind of money. Qatar has also been accused of it, although I've been told that Qatar is doing a better job in recent months of fighting that
flow of money.
And of course, that's the trouble there. Because it's going through private hands, it also allows for plausible deniability, but the fact is,
it hasn't been policed well enough, and that goes for both the money and the flow of foreign fighters.
QUEST: Jim, thank you. We're going to continue talking about the money side of it. Jim Sciutto is in Washington. Now, the Washington
Institute calls ISIS "the world's best-funded terrorist group," and that funding comes through extortion, kidnapping, smuggling. And it makes
shutting down the money very difficult. If you join me at the super screen, you'll see what I'm talking about.
The countries that are in gold here are the ones that the US vice president has accused in some shape or form or directly or indirectly in
aiding ISIS. You're talking about Qatar, the United Arab Emirates, Saudi Arabia, and Turkey.
Now, ISIS gets around $2 million a day from oil, much of it which makes its way to Turkey itself. The oil comes through, it's -- Turkey
itself, now, is cracking down on those smugglers, trying to stop not only the oil coming across the border, but also, of course, the way in which
people are purchasing and moves on.
Moving further around the region, and you see in these things, like a couple of the Arab states, Saudi Arabia, the UAE, and Qatar, are also
cracking down on private donations. The Washington Institute says hundreds of millions has been funneled to extremist groups, as you've just been
hearing, and the Treasury in the US calls Kuwait one of the epicenters for fundraising groups.
In Qatar itself, you're talking about -- this is a direct quote from the State Department that says "Qatari-based terrorist fundraisers were
significant terrorist financing risk." All of which shows that even though those countries are now making quite clear their distaste and their lack of
financing -- Juan Zarate joins me now to talk about this, former US deputy national security advisor.
Juan, what it shows when we look at the maps, when we look at who's funding who and the deniability, is just how complicated this is. That the
people you financed three months ago, thinking they were the good guys, have turned into the bad guys, or potentially the villains of tomorrow.
JUAN ZARATE, FORMER DEPUTY ASSISTANT TO THE PRESIDENT: Without a doubt, Richard, the environment has grown more complicated. Groups like
the Islamic State have developed a hybrid fundraising model, using the local economy, running a war economy, as you and I have talked about
before, and as you've laid out, in addition to relying on foreign sources of funding.
But with ISIS, what's interesting is they've really predominately relied on their ability to run the oil smuggling, run the local economy, as
opposed to relying so heavily on the external donors. But without a doubt, their movement, the establishment of the caliphate, their momentum has
rejuvenated many of the fundraising networks that had long been suppressed.
QUEST: Right. So, why are the -- we just heard Jim Sciutto, you may have just heard him in your ear, Jim Sciutto talking about the private
financing of many of these organizations. Well, when you say that, who in these regions, which private person, for what purposes are funding the
other organizations, not ISIS, per say? Who and why?
ZARATE: Well, much of this started out initially as both a campaign to help with the humanitarian issues in Syria. Obviously, the millions of
displaced individuals and the hundreds of thousands of refugees that have flowed across borders.
But in addition, to support fighters who were willing to topple Assad, and to effect regime change. And so, there was a coalescence of interest,
and that rejuvenated charities, deep-pocket donors, and others who were willing to fund these groups.
The US Treasury has made this pretty clear. They've been designating individuals and entities for a number of months now. A week and a half
ago, they designated additional individuals, in places like Qatar and Kuwait. And so, this is not new. But certainly, it's a very difficult
problem to get our hands on.
QUEST: Forgive my naivete in this next question, but anybody looking at ISIS, anybody looking at the situation, looks at the map, simply says
how did this get so bad so quickly? And I realize that somebody with your expertise is going to say, Richard, we were warning about this for a long
time, but to the ingenue amongst us, this has deteriorated with a distressing speed.
ZARATE: It has. And part of it is they've grown under the cloak of chaos in Syria, where there were so many groups fighting, so much chaos, a
lot of safe haven growing, but they were growing with alacrity and momentum, finding resources to run their economy, letting men go from
prisons, jihadis that they were able to let go from prisons, attracting foreign fighters, as well as gaining material that they needed.
And then they popped up very aggressively again in Iraq and have conjoined their efforts and have become a real fighting force. And I think
this is a real wake-up call, because this is a group that has erased the borders and been able to grow its reach and continues its momentum.
QUEST: And we're grateful that you're here with us, sir, to help us understand, and you'll be in the future as we weave our way. Because one
of the key things we're very keen on, sir, is to look at the money, follow the money. Keep looking at it. Thank you for joining us tonight.
ZARATE: That's right.
QUEST: And we will continue to follow the money, not just, of course, in the stock market, where -- but with ISIS, with the funding of terrorism,
it's one of the things which is crucial.
Look at the market. It started up rather robustly. It went down -- do you like our new graphics? Aren't they nice and colorful? I mean,
green still means up, red still means down. It then went up and down, up and down, and Alison Kosik is at the Exchange to explain why was this
volatility.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Indecision was the name of the game today, Richard, and we did see stocks seesaw really most of the
session, as you see, ending in the red.
There are a lot of worries weighing on investors' shoulders, you can't really pin it on one thing. There's economic growth concerns, there's
Ebola, there's the interest rate hike coming from the Federal Reserve. And of course, we've got third quarter earnings season kicking off this week.
Ah, yes, a lot to think about. You're seeing investors really wait on the catalyst, Richard.
QUEST: And we will look -- we've got earnings season around the corner. We'll talk about that --
KOSIK: Yes.
QUEST: -- in the days ahead. Alison, good to see you, thank you for joining us.
Now, after the break, in Hong Kong, protesters are still on the street, despite official ultimatums. We'll ask the effect that scenes like
these can have on trade and what the long-term implications for the perception of Hong Kong.
(RINGS BELL)
QUEST: QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: The crowds of protesters are noticeably thinner tonight in Hong Kong. The so-called "Umbrella Revolution" is well into its second
week. Pro-activists for democracy gave up some ground on Monday when they allowed government workers to return to their offices. A dwindling number
of protesters are defying official demands to withdraw.
Hong Kong's chief executive told those who remain to leave what he called the "highly dangerous area." C.Y. Leung said the likelihood of
clashes between groups holding different views is increasing. He added that the police would take action at a suitable time.
Merchants say they're angry with the protesters, they're driving the customer away. And one ratings agency is warning the situation in Hong
Kong could even resolve to lasting business damage. Fitch said the disruptions could even flare up again in the future and undermine Hong
Kong's perceived attractiveness as a place to invest.
This follows warnings also given by the chief executive and the Hong Kong monetary authority, that said reputational was very much one of the
issues. Ian Bremmer is with us, the president of the Eurasia Group. Good to see you, sir.
IAN BREMMER, PRESIDENT, EURASIA GROUP: You, too, Richard.
QUEST: So, they're all talking about reputational risk, but do you see that reputational risk coming through?
BREMMER: Sure. I've already talked to a number of CEOs in the past week that have said they'd be thinking long term about Hong Kong. I've
talked to a major manufacturer that was thinking about leaving a region of great instability, and Hong Kong was the number one choice. They're now
rethinking it. Large company.
Long term, Hong Kong had been the sort of gateway into mainland China. It is vastly less important in that role economically today. And suddenly,
it has this large political risk attached to it. A lot of people are going to say, I'm not sure how comfortable I feel with Hong Kong. This is
definitely a hit for them. I don't know how much of it a hit it is for China particularly.
QUEST: Not at all, because --
(CROSSTALK)
BREMMER: It might be not at all, yes.
QUEST: -- because ultimately, they have Shanghai, which can act as a conduit into the country as well, and other places as well.
BREMMER: Well, you're going to pick. Going forward, you're either going to do your Shanghais and your Guangzhous, or you're going to do
Singapore. But Hong Kong, which was -- during the handover, 1997, Hong Kong was roughly 16 percent of Chinese GDP. Today, it's about 2.5 percent.
So that shift -- it's not that Hong Kong's done badly, it's just that China has exploded.
And meanwhile, what the Hong Kong people want is not let's get rich, it's we want political liberalization. That's not coming.
QUEST: But if there is a fundamental contradiction between China's interpretation of the basic law and universal suffrage and what the
protesters want, which is to pick the candidates that they're going to vote for, then that doesn't get resolved and this continues.
BREMMER: Well, it's not going to get resolved. But it's not a difference of interpretation. It's a difference in power. The Chinese
government has decided that they're not going to allow political liberalization.
And even if there was an agreement in 1997 with the Brits that they were going to provide universal suffrage, they have single-handedly changed
their understanding. They've told the protesters, we'll negotiate with you. How about nothing? Does that work for you? Well, as we've seen
today --
QUEST: But then, this is going to continue, is what I'm getting to. And therefore, as a major banking sector, yes it will always have major
banks there, but the instability is now inherent in Hong Kong.
BREMMER: That may be overstated. We've made a lot out of these demonstrations in the West because they're very articulate, they're non-
violent, they're students, a lot of them speak English. We did that with Egypt, too, in the early days. I'd be careful.
The Hong Kong government came down and they gave an ultimatum. They said if you don't clear out by Monday and you don't allow the government to
govern, we're going to hurt you big time. I looked today -- you're talking about a thousand demonstrators on the ground there. That's not nothing,
but we're not talking about Ukraine. This is small.
And they also said it could be dangerous, we're going to have to stop it. It's a dangerous situation --
(CROSSTALK)
QUEST: But --
BREMMER: -- we're going to be fighting. The fighting they're talking about is between the demonstrators and between pro-China folks who probably
the government will support. And then they have to come in and restore order. I could see this playing out in a way that we're going to stop
talking about Hong Kong in a few weeks. Don't underestimate the ability --
(CROSSTALK)
QUEST: In a few weeks --
BREMMER: -- the ability to repress.
QUEST: -- we might stop talking about it --
BREMMER: We might.
QUEST: -- but does it come back? Is this merely delaying a dispute that eventually happens, yes?
BREMMER: I -- interesting. In Hong Kong itself, there's a very big divide.
QUEST: Right.
BREMMER: Lots of folks in China -- in Hong Kong really believe that they want the economy to just run back to normal. The real problem here is
not liberalization, it's that lots of folks in the middle class in Hong Kong don't have the opportunities they used to. Those aren't going to be
provided for them. So, it probably does come back.
QUEST: And hopefully, so will you, sir.
BREMMER: I will.
QUEST: Thank you very much.
BREMMER: Good to see you, Richard. Yes.
QUEST: When we come back -- because we're coming back as well -- in Brazil, it's been called the most unpredictable election in years. The
left-leaning president will now take on the business-friendly opponent. We'll be live in Sao Paulo after the break.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: The Brazilian stock market rallied on Monday after a pro- business presidential candidate unexpectedly made it to the final round of elections. Look at the market, it was up some 4 percent right from the
open and really only gave back just a few little bits of it. If you take a one-year look on the graph, you'll see just how today really put the market
back into a bit of turbo thrust.
Preliminary election results show Aecio Neves finished with more than 33 percent of the first round vote. Neves is an economist and vows to
fight inflation. He will now face, of course, the president, Dilma Rousseff, who got 41 percent. The run-off is set for October the 26th.
Shasta Darlington is live for us tonight in Sao Paulo. Now, this is fascinating because here you have diametrically-opposed political
philosophy that's going to be put to the test.
SHASTA DARLINGTON, CNN BRAZIL BUREAU CHIEF: That's true, Richard. This is diametrically opposed, but it's also the traditional face-off that
we've seen for the last 20 years, pretty much every election. It's the Workers' Party against the Social Democrats.
So, in some ways, when the environmentalist and socialist Marina Silva was ahead in the polls, it really mixed things up. Now we're back to where
we expected to be maybe three months ago.
And yet, part of the reason you're seeing markets so euphoric today is because, really, Aecio Neves did much better than the pre-election polls
had predicted, and Dilma Rousseff did much worse. So, they're hoping that he can now capitalize on some of those votes that went for Marina Silva,
really get some support going, and perhaps defeat Dilma, end after 12 years of the Workers' Party.
QUEST: What does conventional wisdom of Silva's political base, where does it suggest those votes will go?
DARLINGTON: There is no conventional wisdom. She's so out there. She actually isn't even from the socialist party. She tried to create her
own party. There was so much bureaucracy involved that she ended up joining this alliance.
But traditionally, she came from the Workers' Party. So on the one hand, the sort of poorer sectors of the country that were supporting Marina
Silva will probably now go towards Dilma Rousseff.
Whereas the middle class, the students, these kinds of people who wanted change, who wanted a new direction in the economy, and really wanted
to combat corruption in politics, they'll go for Aecio Neves.
It would obviously help if she would come out and explicitly back one of these candidates, and she implied that she might do just that in the
case of Aecio Neves, Richard.
QUEST: All of which means, Shasta Darlington, that you have your work cut out for you in the days and weeks ahead as we continue to watch this.
Thank you very much for joining us.
Now, it's a story of heartbreak, it's in Silicon Valley. HP is breaking itself up, and investors love a good corporate breakup.
(RINGS BELL)
(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.
Spanish officials have confirmed a nursing assistant has been infected with Ebola. She's the first known person to have contracted the deadly
virus outside of West Africa. Officials say the health worker took care of a Spanish priest who died of Ebola in Madrid.
The black flag of ISIS is flying in the eastern outskirts of Kobani as the militants intensify their cat fight to capture the strategic Syrian
town from Kurdish forces. A senior US Defense official told CNN more airstrikes are planned to try and stop the ISIS advance.
Meanwhile, a 19-year-old from the Chicago suburbs has appeared in a US federal court accused of attempting to provide aid to ISIS. Mohammed
Hamzah Khan was arrested at O'Hare International Airport over the weekend. US officials say he was heading to Istanbul en route to Syria and planned
to join ISIS. He could face up to 15 years in prison.
In Hong Kong, pro-democracy protesters remain on the streets, defying an official deadline to disperse. There are, though, fewer demonstrations
than before. Protesters have allowed government workers to enter the central government headquarters, and they've opened up key buildings
nearby.
The US Supreme Court has refused to hear cases from five states seeking to keep their same-sex marriage bans in place. It means that
states such as Virginia, Utah, and Oklahoma will allow same-sex marriages from today. Indiana and Wisconsin are likely to join that list, and six
more states in the United States could lift their bans.
"Breaking up is hard to do," so goes the song. Well, not if you're Hewlett-Packard, HP and a variety of other corporations that have all been
in the vogue of splitting themselves apart. Because this Silicon Valley icon is splitting itself up. Now, you'll be very familiar in the office.
Officers are well familiar with HP's printers and PCs - just take a look here at we've got here. Well, these are - the PCs are not, but if you get
down here with me, you'll see the towers. Well there's an HP. And of course, printers are so prevalent in the HP world. There's one over here
there's another one over there. They're pretty much more computers -you name them. Well, all these printers - although they will be part of the
divisions will be become part of HP Inc., which'll be roughly equal in size to the corporate software services business. Now that will be called HP
Enterprises.
So you have these two companies. You have HP Enterprises and the old printers and the split should be complete by the end of 2015. The company
says the split gives value for the company's focus, it will raise stock values for shareholders and the chief financial hints of more mergers and
splits in the company years. So, if recent history is any guideline, breaking up is not difficult in this situation.
2014 is shaping up to be the biggest year for spinoffs since the millennium. Last week of course eBay announced it would spin off its unit
of PayPal following Carl Icahn having a very nasty proxy battle, investors had pushed for the PayPal spinoff for some years.
CVS has spun off its very lucrative billboard business covering outdoor plans to convert itself into a real estate trust - an REIT as
they're called. And if you - just to prove that we're honest and transparent, of course - our own parent company Time Warner has spun off
Time Inc., divisions that followed failed talks that would have seen Time Warner keep some popular magazines. Of course we also spun off AOL - the
least said about that private grief, the better, and of course Warner Brothers Musics. CNNMoney's Paul Lamonica joins me now. Good to see you,
Paul.
PAUL LAMONICA, CNNMONEY: Good to see you as well.
QUEST: Let's start if we may with the whole question - why is HP doing this? Because we also need printers, so what do they gain by doing
this?
LAMONICA: I think with HP, the real challenge for them is that the printer business - even though we still need them - it's a brutally
competitive business. You've got Epson and Canon are very tough rivals. And then on the PC side, Dell, Lenovo are very tough as well, but HP
doesn't really have that much of a mobile strategy. So everyone talks about PCs in the office, but people are using tablets, and where's the HP
tablet strategy? They don't really have one.
QUEST: Well they did, didn't they -- it was a somewhat disastrous -
LAMONICA: It was, and then they bought Palm a couple of years ago -
QUEST: -- which was even more disastrous -
LAMONICA: Another big, big fail.
QUEST: Right, right. But either close it down which you're not going to do, or just keep it because, what 's - I understand this question of
focus. It diverts focus, it creates shareholder value. But what I don't understand what they gain from splitting.
LAMONICA: I think what they have come to realize is that HP really tried to be this one-stop shop for tech services, and they thought for a
long period of time that, 'Oh, well we can go to our corporate customers and say we've got PCs, we've got printers - we can sell you all of that.'
IBM is probably HP's toughest competitor. I jokingly refer to HP as IBM Lite or Little Blue. IBM got rid of PCs a while ago - they sold them to
Lenovo and they've been just fine. So I don't think you need the PC business, but there are other companies -
QUEST: Right.
LAMONICA: That can run them more efficiently.
QUEST: Right.
LAMONICA: Like Lenovo with the old IBM business.
QUEST: And if you then have these two - one old school, one new school - I mean, old school has revenues - roughly a 50 percent of the
company, -- it has dividends, but do you go with the old or the new?
LAMONICA: If you're an investor that cherishes dividends and, you know, predictability, that PC printer business probably is going to be that
proverbial cash cow, but it's the services, the software - that's where things are very exciting, that's why you see Microsoft embracing the cloud
--
QUEST: And that's why their equipment's going on that side.
LAMONICA: -- equipment's going on that side. What I think is going to be very interesting to watch is will there be companies that try and
scoop up the enterprise business?
QUEST: Right.
LAMONICA: Oracle would be very juicy since Mark Hurd, now co-CEO of Oracle, used to be CEO of HP.
QUEST: Oh dear. Be sad (ph) about Mark Hurd - I think the better Finally, these things go in waves. We talked about eBay, we talked about
what Time Warner, parent company of ourselves, has done, now what HP's doing. Is this just vogue to split the company to focus?
LAMONICA: I think it is. Very much on Wall Street you have this kind of copycat - copycat this philosophy. And many companies are realizing
right now that they're being rewarded for slimming down. GE selling off its credit card unit, they rebranded it Synchrony and that has been a
pretty solid --
(CROSS TALK)
QUEST: And it's Electrolux (inaudible) -
LAMONICA: Electrolux - yes, they're selling that.
QUEST: Absolutely.
LAMONICA: So I think people realize on Wall Street that when companies see their stock prices go up, 4, 5, 6, 7 percent on these spinoff
announcements, any CEO and CFO has to take a hard look at their corporate assets and say maybe we start trimming things down.
QUEST: Until of course the wheel turns and it's all about conglomerate.
LAMONICA: Yes. Well you probably need a more favorable anti-trust regulator in place for that to happen. I think you can't escape that
either.
QUEST: Good to see you, sir, thank you --
LAMONICA: Thank you.
QUEST: -- as always. CNNMoney's Paul Lamonica. Mickey Mouse is lending a billion dollars to his cousin in Europe. For the second time in
three years, Walt Disney's having to bail out Euro Disney. It's the operator of Disneyland Paris. This came at the tab of $1.25 billion.
Disney owns around 40 percent of the entity. It's been a lifeline for the struggling theme park during the crisis. Visitor numbers are expected to
fall by nearly a million this year to 14 million. Euro Disney stocks sank nearly 10 percent on the news. Jim Boulden's live in London for us
tonight. I mean, they're putting another billion into it. What's gone wrong with Euro Disney?
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Again.
QUEST: Or Disneyland Barrhead as they now call it.
BOULDEN: It's never been - it's never really been that successful, Richard. I was there in 1992 when it opened. I can remember the fanfare.
This was a great idea for Disney to expand internationally. All American companies wanted to do it, didn't they? But they put it in Northern France
where it's very cold and rainy, and it's never really been that successful. It's only been profitable once and that was in 2008, and we remember what
happened just after that - economic crisis hit. So, really it has been bailed out time and time again. It's gotten private bailouts, it's gotten
bailouts from Disney.
One of the things that could happen here, Richard, is in this new idea, if enough shareholders don't agree to it, Disney might have to
increase its stake and take a majority stake in Disneyland Paris. And that would mean they would have full control or most of the control of this
brand - this huge theme park outside of Paris. But still as you said, the numbers are falling, number of people are going is falling and it's hard to
see what they can do differently. It just hasn't been a sparkling success for Disney as its other theme parks have been.
QUEST: Jim, they're putting a billion in, it'll add to the billion that they've already - or whatever money they've put in. But you've got to
do more than just pump up a losing asset. So what structural changes are planned short of shoring off Minnie Mouse's or Mickey Mouse's tail?
BOULDEN: What they're hoping to do here is to lower the debt burton - burden. It has a 1.75 billion euro debt burden that it's built up because
of all these problems that it's had. And so it's been servicing the debt. Now, who owes a lot of the debt? Is Walt Disney in the U.S., and so
they're just helping them not have to pay back so much debt servicing to the U.S. company and using that money they hope into refresh-ening (ph) the
brand and hopefully bringing more people into Euro Disney. But you know, we've been talking about this all day, Richard. When Europeans think of
Disney, they like to go to the U.S. where the sun shines. You see a lot of Europeans who are going to Florida to see Disney. It's not the same to go
to the one here, and I'm hard to believe that many Americans actually come to France to go to the Disney here. So it's always been a struggle to get
people to think Disney - think Disneyland Paris.
QUEST: And you - even you - you called it Euro Disney, Disneyland.
BOULDEN: (LAUGHTER).
QUEST: And even there we've got your - what is correct title?
BOULDEN: Disneyland Paris but it was changed a few years afterward to Euro Disney - sounded like Eurostar and it sounded like the euro currency.
QUEST: Hey! Hey! Hey! Leave off the Eurostar! I like the Eurostar.
BOULDEN: (LAUGHTER).
QUEST: I like it. And in fact, the Eurostar stops at Disneyland Paris.
BOULDEN: Sure does, absolutely. That's been one of the nice things about going from London there. You can just take one train.
QUEST: Maybe it's an indication. I've never been to Euro Disney or Disneyland Paris - maybe I need to rent some children to take with me to
the - (LAUGHTER). No, I'm not taking yours, Jim. I'm not taking yours.
BOULDEN: No, no, we've done it.
QUEST: Thank you. Jim Boulden joining us from - I was going to say Disneyland London , but CNN London. The Waldorf salad is a tasty morsel,
the Waldorf Hotel is even tastier to the Chinese. (RINGS BELL).
(COMMERCIAL BREAK)
QUEST: The Waldorf Astoria - that grand gam of hotels on Park Avenue here in New York. To quote, "It carries great tradition in national
hospitality. And exhibition of courage and confidence to the whole nation." Now that was how the U.S. President Herbert Hoover described the
Waldorf when it opened on Park Avenue in 1931. Incidentally, Hoover lived there, and in fact he died there after he was president. Now, Hilton which
has announced it's selling the Waldorf Astoria to the Chinese insurance company Anbang Insurance Group. It's a deal worth nearly $2 billion.
Hilton will operate the Waldorf for 100 years. Now the hotel has been an icon of the United States for many years. Hilton will still operate the
Waldorf. The legend has it that the maitre d' invented this - the Waldorf salad in 1896. It's got chicken, it's got raisins, it's got walnuts.
Every U.S. president since Hoover has stayed at the Waldorf, including Obama. And that's because at the side of it over here, you have the towers
and the Waldorf Towers have special security. And in 1945 there was a film starring Ginger Rogers which was called "Weekend at the Waldorf." Anyone
for dinner? Now from the Waldorf in New York to the Four Seasons in Dubai, Becky Anderson has become the first guest to enter a new hotel in Dubai.
It is the Four Seasons and if you're going to visit a new hotel, then you'd better get a tour from somebody who really knows what it's like. The chief
executive of course.
(BEGIN VIDEOCLIP)
SIMON CASSON, REGIONAL VICE PRESIDENT, FOUR SEASONS HOTELS: Good morning, Becky.
BECKY ANDERSON, CNNI ANCHOR AND HOST OF "CONNECT THE WORLD" SHOW: Well good morning, Simon, how are you?
CASSON: Warm welcome into a sneak peek of the soon-to-be-opened Four Seasons.
ANDERSON: Fantastic. Great.
CASSON: Come on in.
ANDERSON: Thank you.
CASSON: You're the first guest actually to be walking through these doors.
ANDERSON: I feel incredibly privilege. Thank you very much indeed. So, where are your clients coming from?
CASSON: Really all around the world but the big feeder markets into Dubai are from China, from Russia, from Regional GCC, obviously Saudi
Arabia is the major economic force in the region, but also a lot from Europe.
ANDERSON: OK, well I know you're not open yet, but let's get our (inaudible).
CASSON: Come on, I have a show arranged. Here we are. This is a standard guest room. At 70 square meters including the balcony, it's
amongst the largest in the city. Let me show you outside onto our balcony.
ANDERSON: Thank you. What makes this hotel so special do you believe (ph)?
CASSON: Especially look at this I'm mean, we're really in an unforgettable location. You know, over my many years with Four Seasons,
I've found that if you can marry an unforgettable location with a phenomenally intuitive, warm service staff, then you have a winning mix.
We're not in the rocket science business.
ANDERSON: This is a very competitive market, though isn't it?
CASSON: Yes. Oh, yes. But you know, you'd want to be in a market that is competitive if you're going to be at the top of your game.
ANDERSON: Where's the growth in this market?
CASSON: Well, you know, the next year you're going to see other than the Four Seasons open, you'll see another phase of Jumeirah and Jumeirah 4,
you'll see a Bulgari Hotel, a Mandarin Oriental Hotel, so really a city that's going to have all the world's great hotel brands.
ANDERSON: Well, Simon, Richard would tell you I'm a bit of a spa connoisseur. I've been to hotels all over the world. I need these
facilities, so what makes this any different?
CASSON: Big pressure on my shoulders. I lead global spa for Four Seasons. So if didn't do a great one here in Dubai, I'm in trouble. But a
whole host of aqua-thermal features. So you have a saunating (ph) ice mist with crushed ice and cold air blowing at you, and then going on to a
thermal tunnel where you have different light energies to bounce the chanquas (ph) as well as tropical warmness, balancing your body meridics
(ph).
ANDERSON: Balancing the -- ?
CASSON: The meridian.
ANDERSON: The meridian (inaudible).
(LAUGHTER)
ANDERSON: There is a reason why Forbes recently listed Dubai as the seventh most influential city in the world. That's pretty much it - that's
the skyline.
CASSON: That's Dubai, and Dubai is an incredible place. And, you know, I think the influence comes from visionary leadership and ability to
make things happen. There's a very short timeline from inception of ideas to the actual launch of them, and so this really is an incredible shop from
the roof part of the hotel here.
(END VIDEOCLIP)
QUEST: Becky Anderson who looked far too comfortable at the Four Seasons in Dubai with the general manager - not the chief exec - the
general manager showing her around, and I suspect that the GM probably had to almost pries her out of the hotel when all was said and done. Tom
Sater's at the World Weather Center for us this evening. I was in Oslo last week where it was four degrees Celsius.
TOM SATER, METEOROLOGIST FOR CNN INTERNATIONAL: Right.
QUEST: And New York's a little chilly. I'm guessing Ms. Anderson in the Gulf is enjoying more warmer climes.
SATER: A sultry 32 degrees -
QUEST: Oh, good Lord!
SATER: Yes. (LAUGHTER). Which is about 90 Fahrenheit - no rain just yet.
QUEST: Still, still.
SATER: Yes. A little lower than average.
QUEST: Right.
SATER: Here you go. For you, Richard, we've got a few renewed chances of rain and for all those traveling in New York.
QUEST: Yes, yes, yes. Right.
SATER: A little bit tomorrow morning, late Tuesday, again on Friday. We had about 4 millimeters fall in London today - 6 at the airport, heavier
amounts - 35 to 40 up in Scotland. But it's 6 in Dublin right now. Copenhagen's at 11. It gets a little warmer of course for Madrid all the
way over toward around Budapest. We've got a couple of systems we're watching. We'll come back to the one in the northwest in just a moment.
But it has been coming down into areas of Greece as it's been sliding a little bit to the east/northeast. Impressive totals but most of the rough
weather was just offshore. Notice the patchiness of the cloud cover here. This is a signature on satellite of colder air. It's called cold cumulus,
and so when that flies again, renewed chances of rainfall if you didn't get it a little bit today.
Down around Paris 4 to 7 millimeters fell. Again, the heaviest amounts were closer to that area of low pressure. As this system spins for
a while, we're going to find ourselves really seeing this thing elongate, and that means heavier amounts - a larger precipitation shield that'll
stretch into Northern Portugal and then it'll make its way into areas of course of west central France, moving up through Central Germany as well.
That'll continue to move to the east/northeast.
But we had some pretty good totals last week for the most part. But now we're seeing heavier amounts. Let's look at the temperature trend,
because back behind the front we'll have some cooler weather as well. Notice London average temperature 18. So 15 on Tuesday, 16 Wednesday,
getting back to near average on Thursday. Amsterdam, you're going see your numbers start to slide up as the cooler air moves in and then exits the
region. So, for Tuesday, in Vienna 18 degrees, Kiev 13, Budapest 14 degrees, Athens 26.
In Japan, wow, what a brush with another typhoon. Again, another season where one after another has been brushing Mainland Japan. And the
winds were quite strong - just to the southwest of Tokyo. We had winds that were up to 164 kilometers per hour. But this system originated near
Guam, brushing a course the entire area - 1.2 million had evacuations orders just before landfall. And the rainfall totals were impressive. We
had the wettest October day in history in a few locations. There's that 164-kilometer per hour wind. The strongest ever in Tokyo? 1938 - that was
the Tokyo Typhoon where they had winds up to 168. So this is the next one, though, Richard, and it's going to follow the same path, the same footsteps
-
QUEST: Right.
SATER: -- towards Japan again in about six days.
QUEST: And you've got a busy few days ahead of you. Thank you, sir for joining us. Some of the temperature where we are, are where you are
tonight. Oslo has thrown in the towel and is not going to bid for the Winter Olympics. You also wouldn't try too hard if you knew some of the
demands of the International Olympic Committee.
(COMMERCIAL BREAK)
QUEST: The head of Norway's Olympic Committee says the spiraling cost of the Sochi Winter Games was partly to blame for Norway deciding to pull
its bid for the 2022 Winter Games. So far now only Beijing and Almaty in Kazakhstan remain in the running, Oslo having dropped out. The bid was
already unpopular in Norway and got even more so when a list of requests from the IOC became public. And some of them - look at what they're
wanting (RINGS BELL) - They wanted an audience with the king, completed with a cocktail reception afterwards that will be paid for by the royal
family, (RINGS BELL), they want reserved traffic lanes for IOC members - London had something similar, (RINGS BELL), free Samsung phones for every
IOC delegate. I asked Inge Andersen if it was these demands or indeed the cost that forced Norway out.
(BEGIN VIDEOCLIP)
INGE ANDERSEN, NORWEGIAN OLYMPIC COMMITTEE: We wanted also to bring the Winter Olympic Games back to the nature, back to the roots. I think
one of the main reason that the Norwegian people were so skeptical was also what we saw in Sochi - the big spending of money in Sochi made a lot of
people in Norway really afraid. And therefore it was a growing dote here in Norway if we could bring the Winter Games back to the roots. Because
the people in Norway, you know, it's very sport-interested, the people and winter sport, it's in our soul.
QUEST: What's interesting now of course is that the Norwegian bid would have been the most natural in terms of geography, in terms of winter
sports, in terms of everything. Now it looks like it's between Beijing and Almaty, and once again the Winter Games will be about how much money you
can spend to make a grandstanding exhibition. That's now the problem for the Games, isn't it?
ANDERSEN: Yes, I think that is - it's a big challenge. It's - of course we will wish Beijing or Almaty all the best for the bidding process,
but of course it's a third time now that it will be Olympic Games in Asia. We have Johnchung (sp) and then we have Tokyo and then we have Almaty or
Beijing. And Norway and Oslo was the sixth country in Europe that went out of the bidding process, and I hope that this will lead to a good discussion
now in the IOC.
(END VIDEOCLIP)
QUEST: A "Profitable Moment" is ahead.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." HP is splitting into two sides - the older-fashioned printers and the more sexy, the newer business
services. This idea of splitting companies to focus on core attributes is something that's not new. It goes in cycles - it's a vogue. Sometimes
companies believe they need to get bigger, conglomerates are formed so that one bits doing well when another is through. Well, you diversify your
risk, and then the wheel turns and suddenly the investors saying, 'Sell out, beg off - it's not core, it's taking away your attention. Cut down to
the absolute basics. We're now in the cycle of cutting back eBay, HP - you name them, the companies including our own Time Warner has cut back to
their core. It's a cycle that will turn. You've just got to wait. And that's "Quest Means Business" for this Monday. I'm Richard Quest in New
York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable. Let's get together this time tomorrow.
END
