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Quest Means Business
Sharp Sell-Off on Wall Street; Lagarde: Get on with Reforms; Italy, France under Pressure for Reform; "War Game" Tests Central Bank Readiness; Securing U.K. Financial Stability; Tomorrow's Cars
Aired October 13, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN HOST (voice-over): Good grief! Things went bad late in the day, the Dow suddenly falling very sharply as we head towards the
closing bell. Fiat is ringing the closing bell, CEO and chairman. But what a day to be ringing the numbers. And that's to celebrate Fiat
Chrysler automobiles.
The Dow is down. It's Monday. It's October the 13th. We'll talk about the markets straight off the top.
Also the head of the IMF tells me Europe needs to get on with its structural reforms and don't waste time.
Also tonight the battle of Wall Street. The world's top central bankers are staging financial war games in Washington.
And it's a deadly disease that's made worse by a crisis of leadership. Health workers say Ebola could create a world of failed states.
It's a very busy day. It's Monday. I'm Richard Quest. I mean business.
(MUSIC PLAYING)
QUEST: Good evening. We begin tonight with another sharp selloff in the U.S. markets. Look at the numbers. The market fell disastrously sharply
in the last hour or so of trade, between 3 and 4. The market just couldn't make up its mind throughout the trading day.
If you come in, you'll see. Up and then a period of down. Then up and a down. And it held its nerve right the way through until you get right to
the end and about 3:30 it falls off exceptionally sharply.
Alison Kosik is -- Alison, down 220 points. When I came into the studio about 45 minutes ago, it was about 80-odd points.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Oh, yes. It literally fell off the --
(CROSSTALK)
QUEST: Why?
KOSIK: -- in the last -- well, you know why? Because there's a lot of uncertainty about third quarter earnings season. It really revs up this
week with a big bang. So you've got Bank of America. You've got Citigroup. You've got Wells Fargo. You've got those worries, the same
worries that were there last week; they're continuing into today. I'm talking about the worries about slow growth in Europe, especially Germany.
So just to give you some stuff about what happened in that final hour, we were watching and holding our breath, watching that red on the screen. In
three minutes, the Dow dropped 85 points and then in a 15-ohur -- 15-minute span of time in that last hour, falling 130 points.
QUEST: Now this is computers. This is -- what we used to call in the old days program trading. Now you call it high-frequency trading.
Is that what's behind such a rapid move?
Because there's no justification for this.
KOSIK: Right. I mean, you see these technical levels. And once these computers, as we can call them, these computers hit these technical levels,
then things just sort of start rolling over. And that's really what you saw in the final hour of trading today.
QUEST: The impossible question, which I won't hold you to, bearing in mind what we saw last week, are we seeing just volatility where tomorrow it's
likely to bounce back?
Or is the prevailing view that we're seeing a rout?
KOSIK: I think you're seeing a rout. I mean, a lot of the traders I've talked to said we're -- the trend really is lower. Now they're not
certain, though, that it's going to go into correction territory. One thing that can keep it from going lower, Richard, are those earnings.
If earnings come in good and they come in better than the expectations, you're going to see the market go up again.
QUEST: You'll be here.
KOSIK: I will.
QUEST: Either at the exchange or sitting opposite me, because you're going to help us understand this earnings season and really get to grips with it.
KOSIK: You've got it.
QUEST: Alison, thank you very much indeed -- Alison Kosik joining me now.
So tonight, we also have a very stern message from the managing director of the IMF.
Christine Lagarde could not have put it more bluntly when she said to European countries involved -- or any country involved in structural
reform, "Get on with it." At Europe's finances meet in Luxembourg, Italy and France are on a collision course with the E.U. The two countries are
preparing to send their budgets to Brussels by Wednesday.
Critics say those budgets don't go far enough in cutting deficits.
Christine Lagarde told me the need for structural reform isn't just limited to those two countries.
(BEGIN VIDEOTAPE)
CHRISTINE LAGARDE, MANAGING DIRECTOR, IMF: My priority as managing director of the IMF is to make sure that the teams here are focused on
serving the community -- that is the entire membership -- and what I got out of those meetings, across the board, surprisingly, is that they all
want and need structural reforms.
They all want and need investment in infrastructure. So we need to really drill down into these two areas to figure out how it can best be done
without losing the benefit of the fiscal discipline that has been observed and that needs to continue to be observed.
That's, you know, for what we need to do.
QUEST: Structural reform for the membership is hard graft. It's hard work and it ain't sexy.
But it's -- you've got to get on with it.
LAGARDE: You know, I think it's part of these meetings, there's no one theme that is really sexy or really theory, but all of them know that they
have to roll up their sleeves and get on with the work and reform.
I'll give you one example: Mexico. Mexico has done that and they explained the story. It was low growth; it was a coalition. It was
political courage, clarity of intent, transparency and their reforms, telecommunication, energy, education, fiscal -- not bad.
And telling the story to colleagues at the table is one of the benefits of these annual meetings.
QUEST: One of the worst offenders is Europe and the Eurozone. Lots of talk, very -- quite a few promises, very little delivery.
And I know there's been some major cases. But your country, France, one of them; Italy is another.
What do they need to do?
LAGARDE: Get on with it and do it.
Apply the Mexican formula in a way. And it's not just the Eurozone. There are many other countries. But within the Eurozone, too, clarity of
purpose, political courage and then thorough and steady implementation, like the Mexicans did it, like Rwanda did it, like Canada did it. And it's
-- it is not very sexy. But it's got to be done.
Potential growth is low and lower than we had thought. That needs to be fixed.
QUEST: Are you getting exasperated at having to say this every year to the countries, get on with your structural reform? Maybe exasperated is
putting it a little high.
Frustrated?
LAGARDE: Well, you know, we've got to lift growth. And we've got to build resilience in the system. They are the players. They have to do it.
(END VIDEOTAPE)
QUEST: Get on and do it. For the European finance ministers who are meeting in Luxembourg, the issue of reforms is at the top of the agenda.
It's Italy and France where, of course, there is particular worries, especially France, which is under pressure to meet spending and deficit
targets. E.U. officials are now warning there will be no special treatment for France. But of course it's all in the interpretation of what actually
France says it needs and what it's prepared to do. You'll hear about that in a second or two.
As for Greece, Greece is hoping to exit the bailouts early after passing the E.U. budget test. Finance ministers in Luxembourg are skeptical about
Greeks' long-term prospects. And indeed, the IMF itself on the weekend was still warning Greece to keep a safety net to prevent further unease.
As for the meeting itself, the Eurogroup, that is, of course, headed by Jeroen Dijsselbloem, has proposed the carrot and stick approach for
members. The president of the group believes extra funding should be made available for countries who push on with reforms.
(BEGIN VIDEO CLIP)
JEROEN DIJSSELBLOEM, PRESIDENT, EUROGROUP (through translator): I have proposed that there would be an extra investment facility; for example,
from the European investment bank. Then it should namely be used for those countries that are willing to put in an extra effort to carry out reforms
to support their reform agenda.
(END VIDEO CLIP)
QUEST: Now Jyrki Katainen will be on the receiving end of the Italian and French budgets when they arrive on Wednesday. The E.U.'s economic and
monetary affairs commissioner took over from Olli Rehn. He'll soon be the official responsible for jobs and growth.
He's been outspoken calling for these reforms in economies. He's cautious and he won't say what he thinks of France, but he is the man who'll have to
make the decisions.
(BEGIN VIDEO CLIP)
JYRKI KATAINEN, EUROPEAN ECONOMICS COMMISSIONER: I cannot project the situation yet. We have to look the figures of the two countries and all
the countries (INAUDIBLE) without saying anything in public.
Italy is doing lots in structural reforms so -- and I'm sure that it will help them to get into the economic recovery quite fast.
QUEST: Can France expect a sympathetic understanding when it puts its budget forward in terms of flexibility?
KATAINEN: Well, we are using the maximum flexibility, what we can do. The -- of course there are limits. And it's not only a question of doing
(INAUDIBLE) consolidation because it's not an end itself. But it's a means to strengthen credibility.
And all the member states of Eurozone are in charge of the person individual credibility but also they are in charge of the whole world wider
credibility of the currency of the union.
QUEST: If you have to, you'll reject it.
KATAINEN: No, I will not protest. I -- the commission --
(CROSSTALK)
QUEST: It was -- there was an if in my question.
KATAINEN: Yes, it's -- commission's role is to interpret the rules and make sure that all the member states are treated equally. So it's our core
job and our duty also (INAUDIBLE).
QUEST: In your new job, (INAUDIBLE) you'll take over -- it's growth, it's jobs, it's ensuring fundamentally it's really the future of the whole
project, isn't it? Because everybody's so disillusioned that if you can't get jobs and growth going and you can't get some movement as Vehamis Kavisi
(ph) said, the Europe -- this is the last chance for the European project.
Do you agree with him?
KATAINEN: Yes, there are basically three points I want to make. The first one is that the member states have considered budgets quite well during
last few years. So if you look at the figures, the companies have returned to Europe.
So for instance the government quantities (ph) have come down drastically and it's a precondition for sustainable growth.
Now we are turning to another phase, in which the structural reforms of member states are the most important thing because many countries are
lacking of competitiveness. So many member states are doing those.
And the final point is that we also need European input, meaning that we will trade nearly 300 billion investment program, meaning that there some
more liquidity for the public and private investments, but also better single mining (ph) in order to create new market for these -- the
(INAUDIBLE) energy sector.
QUEST: Is this the last chance for the European project?
KATAINEN: I wouldn't like to use this kind of -- pick words like "last chance," but everybody's no -- again, recognize that the economic growth is
uneven. The countries who have done big reforms lately of growing fastest and the other countries are not employing them properly.
So we need fresh European into this but also structural reforms in (INAUDIBLE). We will survive.
(END VIDEOTAPE)
QUEST: That's nice to know, "We will survive."
I think there's a song by that title.
Maybe it was "I Will Survive."
Anyway, that's the story for another day.
European stocks stabilized after weeks in the red, airline stocks (INAUDIBLE) got a lift from a fall in oil prices. Air France and Lufthansa
both entered the session 1.5 percent higher; Middle Eastern producers say high production, low prices are here for the foreseeable future.
Even though the IMF meeting is over, the world's most powerful central bankers are sticking around in Washington. They're playing a financial war
game. The governor of the Bank of England, Mark Carney, says it's a sign of how far we've come since 2008. You'll hear him explain how the game is
played.
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(COMMERCIAL BREAK)
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QUEST: Sharp falls on the Dow and behind the closed doors of Washington, the top central bankers from the U.S. and the U.K. are playing the first-
ever financial war games. It's a veritable who's who of regulatory banking taking part. You've got Janet Yellen, the chair of the Fed; Jack Lew, the
Treasury Secretary; the U.K. Chancellor -- that's George Osborne -- and the governor of the Bank of England.
Now they're testing their decision-making in the event of another collapse of a major bank. They're actually going to do various scenarios. If it's
a U.S. bank, if it's a U.K. bank, what should be sold off? What should be -- what assets? The whole concept is it happens over the weekend and how
do they react for when trading starts again on Monday?
I asked the Bank of England governor, Mark Carney, to explain what questions he believes the exercise will answer.
(BEGIN VIDEOTAPE)
MARK CARNEY, GOVERNOR, BANK OF ENGLAND: What happens if a bank makes a series of mistakes, goes to the wall and has to, over a weekend, be
resolved? And that's what we'll go through.
And my basic point is that authorities at the highest level, including the Chancellor of the Exchequer, myself, the head of the FDIC, the head of the
Federal Reserve, the U.S. Treasury Secretary, work through these processes to make sure that they actually will work.
QUEST: What will you be doing? I mean are you all going to sit on the phones and sort of say, let it go; no, save it; bail it out? I mean, how
realistic is this going to be?
CARNEY: Well, it's as -- we're giving up our Columbus Day to do this, Richard. I'm sure you have the day off. But we're giving it up to go
through -- to go through the specifics of an institution is moving towards failure. Which bits of that institution are going to be saved, so to
speak, so they'll be continuing function?
Where equity holders going to be written down? Probably written off. Which members of the capital structure are going to become the new equity
holders? How is funding going to happen into resolution, a series of crucial, technical decisions that have to be taken over the course of a
weekend to ensure that on the Monday -- in this case we're doing it on a Monday, but it starts on the proverbial Friday -- so on the Monday that
there is a continuing institution that depositors in which they want to keep their deposits, that customers, whether they're retail customers or
businesses still want to transact with and that market participants have -- in which they have confidence but also in a way that doesn't involve public
funds and it ensures that management and shareholders and, if necessary, debt holders bear the consequences of that failure.
QUEST: Have you ever done one of these before?
CARNEY: We have done similar -- at the FSB, we're reviewing all the resolutions --
(CROSSTALK)
QUEST: -- full-scale with central banks --
CARNEY: -- this is the first time that the principals -- so at the chancellor level, the central bank governor level, et cetera, that are --
we're getting together to do it.
But this is a sign of how much progress we've made and how seriously we take this task.
QUEST: You're going to be the governor during an election campaign, which is effectively underway now in the U.K.
How much will you go -- are you -- you're obviously aware of it. But how much is that going to play into some very significant decisions that you
and the MPC -- and the bank generally is going to have to take in exceptionally political terms -- at times?
CARNEY: Well, you know, this'll be I think my fourth -- I've lost count -- fourth or fifth election campaign in which I've been governor. And my
experience is that you just keep it simple. You do the right thing. You analyze the economy just as you would if it were in the middle of a
majority government. You make decisions that are grounded by the remit. You make those decisions -- in our case, inflation targeted objective --
you make them in a timely fashion. As soon as you start to take into calculation the timing of an Election Day, then you become political. And
so you just ignore it.
(END VIDEOTAPE)
QUEST: Let's see if Mark Carney can ignore the result.
I spoke to the U.K. Chancellor of the Exchequer, George Osborne, who was also in the IMF meetings. I asked Chancellor Osborne what policies he
plans to prioritize.
After all, that general election is only months away in May.
(BEGIN VIDEOTAPE)
GEORGE OSBORNE, CHANCELLOR OF THE EXCHEQUER: I'm here at the IMF, representing the country which is the fastest growing of the G7 economies,
a country that has pursued a clear economic plan when many told us to change that plan. I've been on this show and you quite rightly asked me,
your critics say you should abandon the plan, go for a plan B.
We didn't do that and we have strong growth and we have unemployment falling, jobs being created and economic security. Now I think what we
have to show is that that plan not only has taken us out of crisis but delivers economic security in the future. We do that by continuing to
stabilize the public finances, by sharpening the incentives on work so that hard-working people get their just rewards. We've set out, just in the
last couple of weeks, wage-boosting tax cuts that would do that. And we've got to rebalance our country, deal with the historic problems so that, for
example, the north of our country shares in future economic prosperity and we have plans for the northern pass to deliver that.
So lots of things we're doing at the moment. In fact, if you look to British politics at the moment, it is the government in the form of the
conservatives who've got the ideas and got the forward momentum.
QUEST: What financial stability -- because there's a new commission. They'll be looking at regulation again. And some might cruelly say that
the man who was looking over the commission for the economics, Michel Barnier, has gone and you've got a much more favorable regime in Brussels.
But you need to make sure that financial stability means that the city of London can't ever come close to blowing up the British economy again.
OSBORNE: Well, Britain wants to be the global center of finance, the home of the -- strongest financial institutions, the most innovative finance.
But we also want to make sure that if institutions fail they don't bring down the British economy with them and they'll cost the British taxpayer a
lot of money.
So we're taking domestic action to ring fence our retail banks from their investment banking arms. We've taken action to make sure that when
institutions fail, it's the creditors who are bailed in, not the taxpayer. And we've got global rules to make sure that this is --
(CROSSTALK)
OSBORNE: -- different jurisdictions -- all those things will work together to produce a dynamic financial sector but a safer financial sector than the
one that I inherited four or five years ago.
QUEST: And what do you now want to do, assuming you're looking forward to next year, what measure will you -- what measure will let you sleep
comfortably at night that the city can't blow up the economy?
OSBORNE: Well, I mean, you know now that our banks are being ring fenced, our retail banks. And you know that it's the creditors that get bailed in,
not the taxpayers that get bailed in under the laws that we passed at the European and domestic level.
(END VIDEOTAPE)
QUEST: That's George Osborne, the U.K. Chancellor of the Exchequer, the U.K. election will be of course in May of next year.
It's a truism when a moment inattention on the road can be fatal. Computers don't do inattention. And thanks to new technology it might
sooner be safer to literally take -- let the car take the wheel.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST: All the major automobile companies have said hands-free driving is on a way to a motorway near you. Now Tesla, which unveiled its new Model D
on Thursday is rolling out a semi-self drive system. It's calling it the autopilot. Cars will be able to change lanes, keep to the speed limit and
park themselves without the guiding hand of the driver.
The system could be in some Teslas as soon as next year, according to "The Wall Street Journal," other brands without doubt will follow.
So in this week's "Tomorrow Transformed," let us examine how technology is helping us to stay safe on the road.
(BEGIN VIDEOTAPE)
(MUSIC PLAYING)
QUEST (voice-over): No sooner had we taken to the road in cars than we became all too familiar with the car crash. Before long, it became clear
the number of deaths and serious injuries were happening far too often, making road travel safer was essential if the motorcar wasn't to become a
menace.
ROGER BLIDH, RESEARCH ENGINEER: If you go back into the mid-'60s, you will find that the fatality rate per 100 million vehicle miles traveled was
about 5.5. If you compare that to today, you'd see that the fatality rate has dropped to only 1.04.
QUEST (voice-over): Getting that number down in the U.S. required a rethink on vehicle safety. Front and foremost using impact testing to
understand what happens when cars crash. The crash test dummy became famous.
Today testing is being taken even further at the Texas A&M Transportation Institute. They're able to scan vehicles, part by part, to simulate crash
tests.
AKRAM ABU-ODEH, RESEARCH SCIENTIST: You can see us building the profile in the computer.
BLIDH: We're creating models of new systems and performing predictive simulations before we ever go out on the test track. We have found in the
course of doing this work that you can achieve a very high degree of fidelity and accuracy with the proper use of the modeling techniques and
technologies.
QUEST (voice-over): Now we know more about what happens during car crashes than ever before. Tomorrow's future goal is to avoid the crash in the
first place.
Picture cars that talk to each other. It's called vehicle-to-vehicle technology and it's already being tested in some cities.
Technology is making our cars smarter. It means human and machine can work in harmony and this ensures tomorrow's roads are safer for everyone.
(END VIDEOTAPE)
QUEST: In just a moment, the resources may now be being provided by the governments. The question is who's doing the leadership in the battle
against Ebola in West Africa?
(MUSIC PLAYING)
(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.
ISIS fighters are gaining ground in Iraq and in Syria. Iraqi officials say the militants now control 80 percent of Anbar province on the doorstep of
Baghdad. You can see it on your screens there. They overran a key military base in the city of Hit and clashed with security forces 13
kilometers from Baghdad airport.
Three men have been arrested in central London as part of a terrorism investigation by the metropolitan police. The men were all in their 20s
and came after five men were arrested last week by British police on suspicion of terrorist offenses. Two of those men have been released on
Monday.
The husband of the Spanish woman suffering from Ebola has written a letter, calling for the resignation of Madrid's regional health minister. The
letter claims that nursing assistant Teresa Romero Ramos had barely any time to learn how to put on her protective suit and that she would probably
not be in danger had she been quarantined.
A new document from the Vatican says Roman Catholics should welcome and appreciate homosexuals. The report considers whether the Church should
accept gay people and points out the positive qualities in same-sex relationships. However, it does reaffirm the Church's opposition to gay
marriage.
Sentencing is now underway for the former Olympic track star Oscar Pistorius. Pistorius was in court on Monday as a judge began to consider
his sentence. The athlete has been convicted of culpable homicide in the death of his girl Reeva Steenkamp but was acquitted of pre-meditated
murder.
Tonight there are questions over the quality of leadership in the fight against Ebola. The Whitehouse has refused calls from U.S. lawmakers
to appoint a so-called `tsar' to manage the U.S.'s efforts. The Centers for Disease Control is calling for a rethink on its Ebola protocol. After
all, it's still unknown how a nurse in Dallas contracted the virus. The patient has been identified as 26-year-old Nina Pham. The CDC director Dr.
Tom Frieden has rejected calls to ban travel from West Africa to the United States. In Liberia, health workers are threatening to strike if pay and
conditions do not improve.
Meanwhile, the director general of the World Health Organization has warned the virus could contribute to potential state failure, particularly
in these four countries. Speaking on this program last week, the World Bank President Jim Yong Kim highlighted the need for global leadership.
(BEGIN VIDEOCLIP)
JIM YONG KIM, PRESIDENT, WORLD BANK: You know, unfortunately still we've got a ways to go in terms of the clarity of leadership. I hope that
that evolves in the, you know, next few weeks to, you know, -- a few weeks minimally. But you're right, Richard. There has to be clarity. We don't
have complete clarity yet. It's getting a lot better.
(END VIDEOCLIP)
QUEST: Now my next guest has experience leading the world through natural disasters and health crises. He's Lieutenant General Russel
Honore, and as you will see, he headed a task force to respond to the devastation caused by Hurricane Katrina in the United States. The General
is also an expert on disaster relief. While at the Pentagon, he also dealt with SARs, bird flu and anthrax. We're delighted to have Mr. Honore -
General Honore with us now. Sir, you just heard the president of the World Bank say that there is a question of the - of leadership at the moment in
Ebola. So, tell me what needs to be done?
RUSSEL HONORE, FORMER LIEUTENANT GENERAL U.S. ARMY: Well, I think we need to take the same approach, Richard, as we've taken with the terrorism
fight. You saw world leaders come together in the developed NATO partners as well as with major airline in the Middle East who put a coalition
together. We haven't seen that coalition led by global leaders, by presidents and prime ministers. I think this has to go to that level of
discussion. In an emergency meeting even at the U.N., like we do with wars and prevention of wars, to bring the discussion to the right level -
because we need a global response.
QUEST: Right, but does it - but does it require - to use horrible phrase `the tsar, the general,' does it require the world - because at the
moment Margaret Chan from the WHO seems to be leading an exceptionally competition lady, experienced doctor she is too. But does it need somebody
to say, `I am in charge of this. I am putting the plan together'?
HONORE: I think we would help ourselves if we had a person of that stature, but we have to understand that many of the fumbles and mis-catches
have been inside the medical community. I think we need a statesmans of sort who can operate cross-government. Because this problem is too big to
be left in the hand of doctors. This is a national security problem that could cause irreparable damage in developing countries or economies in West
Africa and it could have a global implication as this disease spread. So I think we need somebody who can work with the World Health Organization, but
to pull together all of government response. We need to be able to flood that region with medical support, with food and humanitarian support, and a
base to isolate and keep the economy going in those countries, because if the economies don't keep going, they're going to have a failure.
QUEST: I don't mean this in a militaristic sense, I'm talking purely logistics now. Frankly, the only people who can do that - who have the
experience of large-scale statistical maneuvers are military.
HONORE: Well that and the fact that, Richard I mean, you've got some great companies that can move stuff, but few of them they can have people
like put on personal protective equipment and go into a place that you know that's high risk that you could come up with something that could probably
kill you - that's what differentiate your military between you civilian contractors. And in this particular case, yes, this is job for the
military to go in and help the World Health Organization to help USAID, Doctors Without Borders and those local governments to stand up the
logistics, us an expeditionary capacity that put in hospitals, that put in their down locations and to be able to deal with the technical testing that
needs to happen so people can get quick results so you could move to isolation, you can move to quarantine and you can handle the remains.
QUEST: Sir, thank you for coming in and talking to us, giving us your experience and your perspective. It's much appreciated tonight, sir. At
the IMF meetings in Washington, the managing director, Christine Lagarde told me it's crucial that countries hit by Ebola do not fall into economic
catastrophe.
(BEGIN VIDEOCLIP)
CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: There'll be economy consequences also which is why I'm wearing this thing.
"Isolate Ebola, Not Countries." Those countries have to continue their economic life, and they have to continue to respond to the population's
needs. So that's the reason why the IMF put money on the table right away in budgetary supports -- $130 million cash in the bank within a few days.
Now, I'm worried about those countries that face it, and even if the disease is contained rapidly, they will be facing economic decline and we
will have to give them a hand and help them out - to face economic hardship, to build or rebuild the health infrastructure that would be
needed to just help the population.
(END VIDEOCLIP)
QUEST: A strike by health workers in Liberia would be a major blow if there wasn't enough to the country's healthcare system which is already
completely overwhelmed. Nima Elbagir reports from Monrova - Monrovia.
(BEGIN VIDEOCLIP)
NIMA ELBAGIR, CNN CORRESPONDENT: Racing through the streets of Monrovia, an ambulance transporting a suspected Ebola case. Inside, a
scared and helpless patient. He waits and waits and waits, and no one comes. This is the reality of a system on the brink of collapse. Over the
weekend, angry healthcare workers clashed with the Liberian president over wages. They'd had enough -- hazard pay and improved equipment among the
demands. A work slowdown is in effect at two of the city's four treatment centers, and they're threatening to strike if the demands aren't met.
Ambulances have already been turned away here.
DR. SOKO MOSES, JFK EBOLA CARE UNIT: Currently we have 3,000 deaths multiplied out by five - so you have 15,000 dead in the next four weeks if
it is not handled very soon.
ELBAGIR: But given those consequences, why do you still want to strike?
MOSES: I don't want to strike. But the president has to listen to the massive (inaudible) out there. There are 100 people. You don't want
to have 100 people knocking at your doors when (inaudible) in an emergency situation. So the president hasn't listened and act very fast.
ELBAGIR: An overstretched healthcare system beginning to crack when it can least afford to. The president personally now asking healthcare
workers to stay on the job. Doctors Without Borders MSF run the city's fourth treatment center - the largest in the world. But they are nowhere
near full. Not because people aren't getting sick - the worry is because they may no longer become full (ph).
Female: So now we have enough beds, but the system is not good enough and it's taking time to build - rebuild the trust in the system.
ELBAGIR: Trust that they won't be turned away like so many have in the past, and that they'll get the treatment they need. Rebuilding that
trust is another layer of complication and one that could undo what gains have been achieved here. A lot has been said about the international
community's response - that these are the men and women who have been risking their lives and staunching the worst since the beginning of this
crisis, and now they're asking that the world does not forget about them. Night falls and the ambulance remains, waiting. Nima Elbagir, CNN,
Monrovia, Liberia.
(END VIDEOCLIP)
QUEST: And this is "Quest Means Business."
(COMMERCIALS)
QUEST: The world has a new Nobel Prize-winning economist. He's the French economist Jean Tirole, and he's been recognized for his work on
regulating monopolies - those parts of the economy where companies have disproportionate power. Mr. Tirole argues that regulating powerful
companies requires a tailored approach. It's a critical body of work in an era of Google and Amazon, as indeed it was a critical body of work in the
era of privatization of many national monopolies. The French Prime Minister Manuel Valls tweeted, "The award is one in the eye for the French-
bashers." Tirole himself had some advice for his French compatriots.
JEAN TIROLE, ECONOMICS NOBEL PRIZE LAUREATE: I think we have a lot of human categories as I said. So I think there's a lot of potential for
France. But it has to modernize itself and dedicate to a number of reforms - reduce its public debt and all those things so as to give a brighter
future to the young people.
(END VIDEOCLIP)
QUEST: Strong words from a man who made his entire career and now receives the Nobel from telling the world how to handle monopolies and
monopoly situations - the situation, not the game. The irony of course of having a Frenchman win the prize for his work on monopolies is not lost on
the country's former industry minister. Arnaud Montebourg vowed to crack down on monopolies, this year saying they were costing the French economy
around $7 and 1/2 billion. He was of course made to remove from his position because he criticized the government's economic policies.
Now compare that to the United States where the Justice Department says it's stepped up the number of prosecutions in anti-trust cases.
They're up 60 percent over the past five years. President Obama made tackling monopolies one of his main priorities in the first term, and
strengthened the Sherman Act which had been watered down under President Bush. That was the major legislation against - in the United States -
against monopolies. And the European Union - well it does have some notoriously tough punishments. It can fine up to 10 percent of turnover if
guilty of monopoly. Microsoft was fined three quarters of a billion last year.
So, the U2 frontman Bono says Ireland's commercial corporate tax laws have brought his country the only prosperity we've known. Those are the
same tax range which the E.U. says may constitute illegal state aid. And the commission investigating whether Apple's avoided billion in taxes
gained illegal advantages, as Jim Boulden spoke to the commissioner.
(BEGIN VIDEOCLIP)
JOAQUIN ALUMNIA, EUROPEAN COMPETITION COMMISSIONER: We discovered some of these cases that selective advantages were given in our view to
some particular companies and this is a subsidy that needs to be investigated by us.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: But one of these deals between Apple in Ireland was signed in 1991. Did no one in the E.U. say
any time before a year and a half ago that that was probably in your view or the view of the Commission illegal state aid?
ALUMNIA: Well, I cannot tell you what happened here more than ten years ago - I was not here. But in any case, when I started to receive
information and some signals that this kind of tax avoidance could give a selective advantage to a company, I am obliged to request for further
information, and if the doubts continues to be on my desk, I need to open up an in-depth investigation is what I was waiting the last weeks and
months. We have opened so far four cases, and I don't exclude that new cases will be investigated also by the Commission.
BOULDEN: Your office, I would say, is one of the most high-profile as far as commissioners go, and now of course you're leaving after five years.
How would you write the Competition Commission side of things and the European Commission over your time there?
ALUMNIA: Well, before I came here to this job, and now that I am leaving, I can tell the same thing regarding their high professional level,
high efficiency and outstanding results over the anti-trust enforcement in the E.U. During my years as Competition Commissioners, I've been receiving
a lot of comments and from the most important ranking of competition authorities. In the world during my years, the E.U. Commission as anti-
trust agency has been rated number one. So I am very proud of this. This was the case before my arrival and I am sure that this will be the case
with Mrs. Vestager as commissioner for competition.
(END VIDEOCLIP)
QUEST: The outgoing commissioner on competition. Competition. Tom Sater is a the World Weather Center, which I must say, with your very fine
suit is competition.
TOM SATER, METEOROLOGIST FOR CNN INTERNATIONAL: (LAUGHTER). Uh, dress for success, right, Richard?
(CROSS TALK)
SATER: That's what we have to do.
QUEST: That Windsor knot, I tell you, it's perfect.
SATER: Ah, you know practice makes perfect. You've been there, you're there as well. We're going to start in Europe and go over to North
America where we've got some rough weather. This is the transition seasons in between winter and summer, summer and winter where we find the
atmosphere kind of fighting a little bit. Paris is 12, London as well - unsettled weather there. Seventeen in Berlin. Currently Istanbul's at 16.
Look at this conveyor belt of moisture. I mean, it continues just to flow. Look at the bright orange (inaudible) watch here. Southeastern
areas of France into Northern Italy as it continues to just make its way northward. It's going to remain this way for a while, and a vigorous cold
front moving into Portugal and Spain. This seems like it's been an ongoing story for the last three weeks. The totals of rainfall are just staggering
amounts. I mean, we've even had some pretty large hail at five centimeter in diameter. But 360 millimeters? Again, it is amazing to see the amount
of rain as we continue to find one thunderstorm after another. Let me show you the video again. This is very close to Montpelier like we had - just
to the north and east near the city of Nimes - torrents of water. The third time in three weeks, the same region has been inundated with
flooding, of course destruction to walkways, bridges, roads and in some cases just disrupting normal lives just trying to communicate or even just
make your way around.
We've got an unsettled area of low pressure right East England as well. You watch the spin here as it continues to rotate. So it's going to
remain a little on the damp side, to say the least. The threat for severe weather in those two main areas - again with our cold front - isolated
tornadoes, a level two into parts of Northern Italy. High temperatures for your Tuesday look like this - Kiev 21, Budapest 22, Madrid 18.
Into the U.S., again, another battle of air masses as cold air plunged to the South. We have a set up right now - a long stretch of severe
weather from the Gulf Coast up to the Great Lakes. These are all tornado watches. Lightning struck an oil well in a county in Texas, but I want to
show you video in Arkansas because it was in the very early morning hours that unfortunately a life was lost - a father of this home. Total
destruction. His wife and two children were injured, but they did survive. An isolated tornado, and for the most part in the U.S., tornadoes are very
down as far as the number count. One of the lowest we've had in many, many years.
But we'll continue to find this area yet a little - you know - kind of unsettled. And that will be making its way eastward - just few isolated
showers for you, Richard, in New York City.
QUEST: Thank you very much. Tom Sater's with World Willis -- from the World Weather Center. Not easy to say. Now, the new Fiat Chrysler
made its debut on the New York Stock Exchange today. It was Columbus Day and there of course is the magnificent statue of Columbus just outside our
headquarters here in New York. We'll tell you why Christopher Columbus and Fiat aren't so very different.
(COMMERCIAL BREAK)
QUEST: It's a landmark day for one of the big three U.S. carmakers. Fiat Chrysler, formed after Italy's biggest automaker rescued Chrysler, has
made its debut on the New York Stock Exchange.
(BEGIN VIDEOCLIP)
(APPLAUSE)
(NEW YORK STOCK EXCHANGE BELL RINGS)
QUEST: Closing bell time for CEO Sergio Marchionne and the chairman John Elkann. They had the honor of ringing the closing bell moments ago.
You saw it at the top of our program. As for the share price itself, well, after the first days it was coosie-coosie (ph). Shares opened at $9.00,
gained and then ended down just off nearly 1 percent at $8.92. It is only the first day. The ticket stock number on the ticket stock is - stock
ticker even - is FCA. Fiat deliberately - Fiat Chrysler I must call it - deliberately chose today (RINGS BELL) to list on the stock exchange - it's
Columbus Day. And just as Columbus bravely set out in 1492, Columbus sailed the ocean blue from Europe to seek riches and prosperity, the new
company's hoping today is the start of an historic turnaround. One of the many. And throughout its troubles, one little car has been able to turn
`round Fiat's fortunes.
(BEGIN VIDEOCLIP)
QUEST: When turning `round a carmaker, there's much to be learned from turning `round the car.
SERGIO MARCHIONNE, FIAT CHRYSLER CEO: Our moment is to go back in and start making cars that people like and to make - sell them at a profit.
QUEST: It's simple - a new car, like a new company, must be attractive to buyers. The original Fiat Cinquecento in 1957 got that just
right. Delightfully compact, the car was inspirational to a post-war Italian market. By 1975, it had sold almost 4 million cars. That brings
us to timing - critical to any turnaround strategy.
JOHN ELKANN, VICE CHAIRMAN, FIAT: We have this great project called Cinquecento.
QUEST: Who?
ELKANN: Cinquecento.
QUEST: Right.
ELKANN: And that's the revival of the old Cinquecento.
QUEST: The Fiat 500 as it's now called came in 2007. As Fiat was completing major restructuring. He needed a little of the old magic. Oh,
dear. Well terribly exciting no matter how attractive and well timed, when bringing or car or company to market, slow and steady is best.
MARCHIONNE: We need to wait for the resolution of the ultimate capital structure of (inaudible) on the one hand, and we need receptive
capital markets to do the operation.
NARRATOR FROM COMMERCIAL: One day you realize that the size of your car doesn't matter at all. What really matters is the size of your yacht.
QUEST: What really matters to the Fiat chief executive, Sergio Marchionne, is the size of the profits. Fiat sales rose 13 percent in
2007. It was largely propelled by the new 500. The car's family has grown and so did the corporate family.
(BEGIN VIDEOCLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: A court has approved the Chrysler/Fiat alliance, paving the way for a new Chrysler to emerge
from bankruptcy in the next few days.
(END VIDEOCLIP)
QUEST: A good turnaround strategy never really ends. Cinquecento or 500, it's Fiat's top seller in Europe. Here in the U.S., there's more to
be done.
(BEGIN VIDEOCLIP)
MARCHIONNE: As one observer put it, Chrysler is most likely to be liquidated for three sticks of gum and a roll of pennies. But we dare to
dream big and we have begun delivering on that dream.
(END VIDEOCLIP)
QUEST: Big dreams, small packages - a true turnaround tale.
(END VIDEOCLIP)
QUEST: And a little car to play with. A "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment" or maybe not so profitable looking at the way the Dow closed tonight. Volatility heat is back, that
much is clear looking at last week and this. But it's more than that because although we know there are undercurrents of growth and Ebola and
issues and worries about economies. What the market is telling us in the fear and greed index of CNNMoney is that something is wrong, and that
unless attention is paid and things are done -- economies transformed - then this could become the new normal for the foreseeable future. (Nobody)
in time tonight. And that's "Quest Means Business." I'm Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope
it's profitable. See you tomorrow.
END
