Return to Transcripts main page
Quest Means Business
Greece's Creditors Back Plans for Reforms; OECD Pledges Support for Greek Reforms; Eurozone Backs Greek Reforms; Dow Closes at Record High; Yellen Says No Rate Hike Imminent; DAX, FTSE Hit Record Highs; Date Change Proposed for 2022 World Cup; London Fashion Week Wraps Up; Mannequin Makeover
Aired February 24, 2015 - 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: There are records all over the markets tonight. The Dow Jones has closed at a record. Other indices have as well. The
closing bell is ringing. He hasn't hit the gavel -- he's four seconds late. But that's the head of BT International, bringing trading on a
record day to a close on Tuesday, it's the 24th of February.
The man helping Greece to reform tells me it's time for the nitty- gritty. You're going to hear from the head of the OECD on this program.
A winter World Cup. It sends the chills down the spines of advertisers.
And patience is a virtue. Janet Yellen helps push the markets to all- time highs.
I'm Richard Quest, tonight in London, and of course, I mean business.
Good evening. As Greece's plan for the future gets the approval by the institutions formerly known as the Troika, tonight, the head of the
OECD tells me it's time for the Greeks to roll up their sleeves and get on with the reforms.
Now, what happened during the course of this busy day, the European Central Bank, the International Monetary Fund, and the European Commission
all said the Greek blueprint was good enough to continue funding and to start the negotiations for the extension over the next four months.
There were, though, lingering doubts. Look at the sort of comments that came. The vice president of the European Commission called the list
of reforms "sufficiently comprehensive" although it was only a starting point.
Christine Lagarde of the IMF noted that the reform plans were "not very specific," especially I some of the most important areas. And Mario
Draghi of the ECB, he wrote that Greece was not able to elaborate, "not possible to elaborate concrete commitments." And he urged the Greeks to
act swiftly.
But it doesn't really matter, because those three institutions all gave their stamp of approval, which means eurozone finance ministers will
now start the approval process themselves, and the four-month extension will go into force in the next few days.
This brand-new and inexperienced Greek government is taking on a massive task. It'll have the advice and support for the Organization of
Economic Cooperation and development, the OECD.
Earlier this month, the OECD secretary general met Alexis Tsipras, the Greek prime minister, and the secretary general offered his backing for the
struggles ahead. He said the road to recovery would be long and hard.
(BEGIN VIDEO CLIP)
ANGEL GURRIA, SECRETARY GENERAL, OECD: Our message to you, Mr. Prime Minister, is count on the OECD to support your reform program, your
structural adjustment over time. Some of these measures take time. Some of these measures do not show results immediately.
(END VIDEO CLIP)
QUEST: Now, those comments were made within hours of the election. Now, of course, the approval has been given. Angel Gurria joined me, and I
asked him, since everyone signed off on Greece's reforms, what happens next?
(BEGIN VIDEOTAPE)
GURRIA: Well now, we get on with it. And that means that first of all, there's a bridge financing in order to refinance some of the more
immediate maturities.
But most importantly, we can focus on the medium and long term, the real reform process, and how to get the Greeks to collect their taxes, how
to fight corruption, how to have more competition, how to have real transformation, modernization, public administration. This will actually
make Greece sustainable over the medium and long term.
QUEST: This list, as I read them, is pretty basic, fundamental structural reform. Collect your taxes. Stop evasion. This is not
revolutionary stuff.
GURRIA: No, but that is why it caused so much frustration, because it was so basic, and it was not being addressed. Now, what we've got to do is
give the benefit of the doubt for the new government with an agenda that is precisely focused on those issues.
QUEST: But this is all about the detail, now. We're beyond highfalutin words of policy.
GURRIA: Yes, it's about detail and it's about implementation. It's about the right measures, about the right policies. And we are helping
there. The OECD is helping there. We were there on the 11th of February, 10 hours after they were confirmed by the parliament, in order to have a
work program that will allow us to support the reform process.
QUEST: What will you be doing there? Because if you look at the eurogroup's original statement, there's lots of talk about how the IMF will
be able to help in certain areas. What will you -- what's your area of specialty in this?
GURRIA: Basically, they got the checkbook. And what we do is we help with the policies. Greece is a member of the OECD, we've been working with
them for years and years, and whether it's about education, if it's about innovation, it's about more competition, it's about R&D, it's about the tax
structure, it's about health systems, whatever. This is where we come in and we help them with the best practices.
QUEST: This is nitty-gritty stuff, isn't it?
GURRIA: Yes, absolutely nitty-gritty. You roll up your sleeves and you get on with it.
QUEST: Will you blow the referee's whistle if you don't like the look of what they're doing?
GURRIA: I think we will tell the Greeks very clearly --
QUEST: Honestly?
GURRIA: -- where they are working well, where they are delivering, and where they're not. And that is part of the job that we are expected to
do. This is part of the design of the work that the prime minister told us that we should be doing going forward, and we're going to be happy to
provide that services.
QUEST: Why should the Germans, the Slovakians, the Finns, what -- they signed up today, but why should they believe that Greece is any more
serious in implementing reforms just because they provided a list within 48 hours?
GURRIA: Well, first of all, we all have a lot at stake. And they have a lot at stake, because they've invested a lot of money in Greece,
among other places. They've helped Greece, they've lent money to Greece.
And if this works, it will prove that these types of measures, these types of mechanisms, this type of organization institutionally work in
order to get a country out of its difficulties and into sustainable medium and long-term growth.
(END VIDEOTAPE)
QUEST: Angel Gurria, secretary general of the OECD on the deal and the announcement of the reforms. The good news for Greece was that it was
also good news for Greek stocks.
(RINGS BELL)
QUEST: The Athens market was up almost 10 percent. Banking shares rose as much as 20 percent on the market. The Bank of America Merrill
Lynch says if negotiations stay confrontational for the rest of the year, it most definitely could impact growth. Athanasios Vamvakidis forecasts
currency trends for BOAML, and before that, he was at the IMF for 13 years. He's with me now.
I was taken, sir, when I read your briefing note. You forecast exactly what the deal would be on Friday, pretty much. You said it would
be about reform, you said it would be a four-month extension, not a six- month extension. So you're the man to tell us what happens now.
ATHANASIOS VAMVAKIDIS, FORMER IMF STRATEGIST: Well, we can say the difficult part starts now. So far, they were discussing the road map for
the negotiations.
Now, they have to discuss the policies, they have to finalize the dictates of the reform list that the government has just announced. They
have to put together a new program, which then has to be approved throughout Europe, and will include more money for Greece.
QUEST: But this is at the end of the four months. But there's still some money to come to Greece, isn't there, at the end of the four months?
VAMVAKIDIS: Well, they need definitely to get money from the rest of Europe by the end of June, because they need to repay the IMF, they need to
repay bonds to the ECB. So, they absolutely need to reach a deal by May in order to get more funds by June.
QUEST: So, they need money by June to help pay the debts that are already there, and they need this longer-term deal. When you -- that goes
into the future. How long do you -- what sort of length of program do you think we're looking at? Are we looking at two, three, four, five years?
VAMVAKIDIS: Most likely two years, and at least 20 more billion.
QUEST: Twenty billion on top of the 300 and --
VAMVAKIDIS: Total official lending has been about 300, including the EC partners and the IMF.
QUEST: A lot of people watching us tonight might well say $300 billion for a country that's only 3 to 4 percent of the zone is an
extraordinary large amount of money. Where's it gone?
VAMVAKIDIS: It is huge debt. It is the second-highest percent of GDP after Japan. A lot of it went to repay private sector debt. But also when
we started, Greece had a deficit of about 15 percent of GDP.
QUEST: Tell us -- you saw the reforms. I read the list. There was nothing -- it was motherhood and apple pie. There is nothing in that list
with which you could disagree with. But there's not enough specificity. You heard from the ECB, you heard from the Commission.
VAMVAKIDIS: It almost reads to good to be true, but these are reforms that the country needs. They are consistent with the reforms in the
existing program. Of course, part of the negotiations will be to finalize these debates. Many people are raising questions, will a left government
be able to do these reforms? But if they do it, Greece can recover. If they don't, the crisis will be back.
QUEST: You don't believe this crisis is over, do you?
VAMVAKIDIS: Absolutely not. We still have a long way ahead of us. But at least this government is trying to persuade the rest of the world
that they don't need this much austerity because they will do the reforms.
QUEST: Athanasios, great to see you. Thank you so much.
VAMVAKIDIS: An honor, thank you, Richard.
QUEST: Thank you very much, indeed. Now, we're going to talk about Chairwoman Yellen. When she spoke before Congress, US markets soared. You
can see the numbers there, up 92 points. The Dow closed at a record high.
Investors were relieved to hear the good news from Greece, but perhaps more likely, it was the testimony from the chair, Janet Yellen. She
indicated -- actually, she's more than indicated, she said in blunt terms - - rates are going to stay low for the next few -- or stay where they are for the next few Fed meetings. They could possibly rise as early as June.
And she stressed the Fed will be flexible. Markets will make a decision on a meeting-by-meeting basis, paying close attention to the
economic indicators.
(BEGIN VIDEO CLIP)
JANET YELLEN, CHAIRWOMAN, FEDERAL RESERVE: We do have an economy that fortunately appears to be recovering, and we do have to be forward-looking
in setting monetary policy, but I want to assure you, we want to see that recovery continue.
We don't feel the labor market is fully healed, and that's a process we want to go on, and we don't want to take policy actions that will hamper
that. But monetary policy is very accommodative at the present.
SEN. CHARLES SCHUMER (D), NEW YORK: Thank you. I urge caution.
(END VIDEO CLIP)
QUEST: The reality, of course, is she was much more open than previously. Alison Kosik is at CNN in New York. Alison, she said no rate
rises for the next few meetings. She said that even when rates started to move, they weren't going up fast. She basically gave the game away.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: She gave the game away, but if you really listened closely, she also hedged a lot. On the one hand,
she said the labor market is improving. She was bullish on the labor market. But she tempered that with, there's still work to be done, there's
still improvement to be had in the labor market here in the US, along with wage growth.
And then she talked about inflation as well. Inflation, obviously, below the target 2 percent. And there is some question as to whether the
data is still there. Because if you remember in those past statements, a lot of what the Fed is going to do is data dependent. And I don't know,
you tell me. The data really isn't there just yet.
So, on the one hand, she was a hawk, and on the other hand, she was the dove. But I'll tell you this, the one piece of revealing information
that I got today as far as when that rate hike will happen is when that forward guidance language changes, that's when you know that a rate hike
could be around the corner, especially if she takes out that being patient or drop the word patient from the statement, Richard.
QUEST: Ah! But don't be too previous, Ms. Kosik. She also said just because the word goes does not mean it's happening at the next meeting.
Alison Kosik --
KOSIK: Exactly. I'm going to ring my bell for you.
(KOSIK RINGS BELL)
QUEST: Ooh.
(LAUGHTER)
KOSIK: I one-up you.
(QUEST RINGS BELL)
KOSIK: Whose is better?
QUEST: Thank you.
KOSIK: Ooh, mine just broke! Your --
(LAUGHTER)
QUEST: That'll teach you. That'll teach you to play with your bell in the studio.
(LAUGHTER)
QUEST: Alison Kosik, who's in New York.
It's not just the US markets that are spiking. Join me at the super screens and you'll see exactly what -- look how it went. All the major
markets were up. The Greek government and the agreement pushed the DAX and the FTSE, that and that are both at record highs. The previous FTSE
record, this shows, was set in 1999. Yes, I remember it. 1999 was the previous high, and that's where it was now.
The FTSE was boosted by a 6 percent rise in BHP Billiton shares. Despite steep drops in profits, the fall was not as bad thanks to cost-
cutting and hurting. This was BHP Billiton's, up 6.2 percent, the shares at 16.4, and those were the results.
On to airlines. Aer Lingus reported an operating profit of 18 percent. Good numbers. And management repeated its support for the IAG
takeover, that's the owners of British Airways, Iberia, and Vueling. Willie Walsh wanted to take over the airline of which he was -- used to be
the CEO.
But if management is supporting it, well, the Irish government is certainly proving far more difficult to sell their 25 percent stake to IAG.
It's demanding more information on job cuts, it's wanting more guarantees on fixed connections between Heathrow and Ireland before it even agrees to.
And there are many people tonight believing that perhaps the whole deal is filtering. Filtering -- faltering.
Now, when we come back, the most controversial World Cup gets more controversial, if that were possible. And this time, it has people saying
I told you so. It's QUEST MEANS BUSINESS, we're live in London.
(RINGS BELL)
(COMMERCIAL BREAK)
QUEST: FIFA is moving the goalposts on the 2022 World Cup, due to be held in Qatar. A task force has recommended shifting the tournament to
November and December rather, of course, than the summer months, when the heat would be oppressive, if not dangerous and deadly.
The panel is siding with a large number of commentators who say Qatar's original plan isn't workable, playing football matches in air-
conditioned stadia when summer temperatures regularly top 40 degrees Celsius.
So, look at the diary, and you start to see how they came to the dates. You exclude the summer months, because it's too hot. January and
February are out because of a potential clash with the Winter Olympics.
The task force also wanted to avoid the Muslim holy month of Ramadan, which falls in April. The rules and the law requires it to be held in
2022. It can't go into January of 2023. And anyway, then you have the Africa Cup of Nations. So, you're left with October, November, December.
FIFA's dates went right into other major events. Jim Boulden is with me. It's the Europeans --
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Yes.
QUEST: -- in their league games and matches and championships.
BOULDEN: Well, it's a very important part of Premier League here in the UK. You also have, obviously, Spain and France and Germany. They're
going to have to stop playing for an entire month.
The top teams, who will have TV contracts in their countries, will stop playing for an entire month. Or they have to play without the top
players. Which of course, why would I pay all that money to watch them if they're not going to be playing their leagues.
So, for the first time ever, these leagues are going to have to stay, well, we're going to have to change our entire ethos. We're not going to be
playing in the lead-up to Christmas.
QUEST: What happens now? Because the Europeans are objecting --
BOULDEN: Yes.
QUEST: -- to November. But they don't really have a better proposal themselves.
BOULDEN: No, they want compensation. They're telling FIFA, if you're not going to let us play, and our guys are going to be over in Qatar,
you've got to give us the money to make up for what we're going to lose in revenue.
QUEST: But this was inevitable.
BOULDEN: It is. We always knew it was never going to be the same time as the Winter Olympics. We always knew it had to be in 2022. We
always knew it wasn't going to be in the summer. We'll find out next month exactly when they will decide whether it will be all of November, go into
December.
Some people were thinking, wow, maybe a final on Christmas Day. I seriously doubt they will do that. But if it goes into December, than the
African Nations Cup in January might have to be put off.
But also, Richard, NFL. It's growing in the US. We know how much it's doing well in the US, the World Cup, the other football. The NFL,
also, December and November very important to them.
Fox has the rights to the NFL, will have the rights, probably as well, to the World Cup. And so, you're going to have a competition in a place
like America as well. What do you show on a Sunday? What do you show?
QUEST: Oh, and the European leagues.
BOULDEN: That's very big. Because it's the opening -- it's sort of the preliminary rounds of the Champions League, which we've just seen going
on tonight as well here in the UK. So, that will also have to be put off. But let's be honest. It is very eurocentric, the FIFA World Cup.
QUEST: Well, 70 percent of the players all come from Europe.
BOULDEN: Yes, but they always want to say, let's do different things. The Olympics, going to Rio, going to China. They want to try different
things. FIFA wants to go to different places. So the idea is, let's not be so worried about Europe.
QUEST: Right.
BOULDEN: Let's get the other parts of the world interested in the World Cup.
QUEST: This is not a question about corruption or bribery --
BOULDEN: No.
QUEST: -- or anything like that. I'm not about to ask you that. What I am asking about, though, is this was not only foreseeable, it was
foreseen. People said you can't do it. So, doesn't FIFA bear any blame for allowing -- the Australians are objecting to the fact --
BOULDEN: Yes.
QUEST: -- because they bid for a summer games.
BOULDEN: Right, but Qatar in 2010, when they were awarded this -- remember, they awarded to Russia in 2018 --
QUEST: Yes, yes.
BOULDEN: -- and Qatar in 2022. Qatar said we will play in the summer. We're going to build incredibly new, efficient stadia that are
going to have air conditioning that will descend on the players and on the fans, and it will be OK. But now, of course, that's not going to be the
case.
QUEST: All right. Jim Boulden, thank you very much, indeed.
BOULDEN: Yes.
QUEST: See you, Jim. As London Fashion Week comes to a close, what about the unsung heroes of the clothing industry, who vogue like never
before? Forget the ones who are -- got live kicking and breathing down the catwalks. Think of the statuesque who stand there the same way.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
(VOCAL MUSIC)
(END VIDEO CLIP)
QUEST: London Fashion Week came to an end, and it has given us some seriously unconventional catwalks of one description or another, whether it
be the singers, the photographers or, indeed, the models.
The designer Anya Hindmarch showed her bags and women's wear at the old Billingsgate Market, and she did so with the help of the London Gay
Men's Chorus, who dressed as construction workers, which all gave a different tone to the fashion industry.
Not all designers were lucky enough to get a show with live models and a choir singing in the background. High Street shops still rely on the
shop window dummy. And as Clare Sebastian now reports from New York, when it comes to modeling clothes, even the modern mannequin is getting a
makeover.
(BEGIN VIDEOTAPE)
CLARE SEBASTIAN, CNN CORRESPONDENT (voice-over): The mannequin. For more than a century, this staple of the shop window has humbly stood by and
let the clothes do the talking. Now, things are changing.
SEBASTIAN (on camera): Mannequins are facing up to a new reality. It's no longer just enough for them to wear the clothes. They have to
actually be part of the fashion statement. And that means a new face for every season.
DAN EVANS, PRESIDENT AND CREATIVE DIRECTOR, GOLDSMITH'S: All the parts can be removed as well with a little magnetic portion. The lips can
be pulled out.
SEBASTIAN (voice-over): Customization is key here at Goldsmith's, one of New York's biggest mannequin manufacturers.
EVANS: The modern Mr. and Mrs. Potato Head.
SEBASTIAN: Each mannequin costs between $750 and $1200, and stores aren't scrimping.
EVANS: Most stores will have not just one, two, or six, they'll have dozens if not hundreds of mannequins.
SEBASTIAN: US retailer Target brought in mannequins for the first time in 2013. They're now in 650 of their stores. And Macy's has recently
doubled the number in their flagship New York store to around 700.
EVANS: We know that, at at this point, a mannequin will outsell any other form of display inside the store. It's almost assured.
SEBASTIAN: It's making for heady days here at Goldsmith's. They've had record sales the last two years, topping 200,000 last year. Realism
still sells, like this, the Voluptuous Collection. Right now, though, abstract mannequins are on the rise.
EVANS: You see here a very young expression and --
SEBASTIAN (on camera): Well, there's no expression.
(LAUGHTER)
EVANS: Exactly. We actually shop the industry. We really try to find out what's happening with our clients in the retail fashion industry.
SEBASTIAN (voice-over): For this growing business, there's no time to stand still.
Clare Sebastian, CNN, New York.
(END VIDEOTAPE)
QUEST: A mannequin in every department store.
In Washington, a dispute over immigration could shut down the Department of Homeland Security. We'll tell you about that story in just a
moment. This is QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in a moment, when a US Congress has three days to head off a shutdown at
the Department of Homeland Security. We'll bring you the details from Capitol Hill in Washington.
You'll meet the new face of diversity for Apple. It gets an emoji update.
But before we have any of those details, this is CNN, and on this network, the news always comes first.
The European Commission, the IMF, and the ECB have all signed off on Greece's proposed reforms. Some of the institutions warned serious
concerns remain. Christine Lagarde of the IMF said the reform plans were not very specific, especially in some of the most important areas.
Speaking to me earlier, the head of the OECD said it's time for the Greeks to roll up their sleeves and get on with the reforms.
(BEGIN VIDEO CLIP)
GURRIA: Importantly, we can focus on the medium and long term, the real reform process, and how to get the Greeks to collect their taxes, how
to fight corruption, how to have more competition, how to have real transformation, modernization, public administration. This will actually
make Greece sustainable over the medium and long term.
(END VIDEO CLIP)
QUEST: A gunman has opened fire in a restaurant in the Czech Republic, killing eight people before turning the gun on himself. The man
burst into the restaurant during the lunchtime rush hour, firing indiscriminately. The government said it was not a terrorist attack.
Dozens of people were injured when a train came off the rails in California. The train hit a truck between the cities of Oxnard and
Camarillo. Five rail cars left the tracks and ended up on their sides. The driver of the truck fled the scene and was later found unhurt and taken
into custody.
A FIFA taskforce has proposed playing the 2022 Qatar World Cup in November and December. It would mean the players would avoid the searing
summer heat. The schedules of the European Football Leagues would be massively disrupted as a result.
The head of the OECD says he's got a way to kick off a revolution and change the world. In the second part of our interview, Angel Gurria told
me recent allegations of massive tax evasion at HSBC is a scandal and it showed the time to change tax laws is now.
(BEGIN VIDEOCLIP)
ANGEL GURRIA, SECRETARY GENERAL, OECD: Richard, this only proves the fact that we have to go for automatic exchange of information which is
precisely the agenda that we're pushing in the G20 and we also go for base erosion and profit shifting.
This is an enormous scandal. This raises - it's an alarm. It's a big wake up call to say for heaven's sake, get on with it, it is absolutely
imperative that this should not be repeated.
QUEST: But do what? Because there's plenty of laws on the books supposedly designed to prevent this.
GURRIA: We never had automatic exchange of information -
QUEST: Between governments or -- ?
GURRIA: Between governments. That means you create an account in a third country, the authorities - but the bank in which you create the
account will inform the local authorities, the local authorities will tell your authority in your country of origin that you would have created an
account and if you reported it, then fine, and if you didn't then your authorities may invite you to have a cup of tea.
QUEST: Well, (LAUGHTER).
GURRIA: It's going to change the world, it's a revolution. It's a revolution.
QUEST: It'll never work. It'll never work.
GURRIA: It will work absolutely. It's working already - 37 billion euros have come in to the coffer already even before it starts because
people are saying nowhere to hide! They realize they're going to be put in jail so maybe while amnesty (ph) is going on, they take advantage and they
move in.
QUEST: What about privacy? What about privacy?
GURRIA: This is not to put in the newspapers. This is for the tax man to discharge his duty. Privacy vis-a-vis the taxman doesn't exist as a
concept. If you avoid telling the taxman that you have income and you don't pay your taxes on the income, you are committing a crime.
QUEST: Isn't the truth of this that many jurisdictions like HMRC - Her Majesty's Revenue and Customs - like the IRS - they don't come to this
table with clean hands. They have done deals with certain companies, they have done certain obligations which perhaps has allowed some people to be
more advantageously treated. And they turn 'round - they turn 'round to the tax (inaudible) the so-called havens -
GURRIA: Ah. No, thus base erosion and profit-shifting project -- the G20 OECD Project which basically is to fight these. We just arrived at an
agreement between Germany and the U.K. on what they call patent boxes which is benefits that we're giving to countries for research, OK?
Now, that has now been extended to 44 countries, it is best practices and automatic exchange of information's going to come in -
QUEST: Right.
GURRIA: -- in 2017. So, as I said, this is a revolution. The tax structure is going to suffer its greatest transformation in 100 years.
(END VIDEOCLIP)
QUEST: That's Angel Gurria. Rarely does one see anyone so enthusiastic on the question of tax reform. And it's always good to have
the secretary-general on the program.
The United States Congress in the midst of a budget showdown and it could force airport security staff and other government employees to work
without pay.
Funding for the Department of Homeland Security is due to run out on Friday, and if a bill to renew funding is not passed, well the DHS says it
will mean terrible disruption for Americans and by that everybody else who travels through U.S. airports.
Thousands of people will be furloughed, others will be required to work without pay. The Democratic Senator Barbara Boxer says a shutdown
would be an embarrassment.
(BEGIN VIDEOCLIP)
BARBARA BOXER, U.S. SENATE DEMOCRAT: They're shutting down the program that funds our police officers back home, our firefighters, our
first responders. So any way you look at it, this is a national disgrace.
And think about what our friends abroad and those who are not our friends are thinking about this.
(END VIDEOCLIP)
QUEST: The stalemate has little to do with whether it's right to pay for homeland security, it's about the add-ons to the funding bill.
Republicans are trying to include all variety -- they're Christmas-treeing. The bill with measures to block funds for President Obama's immigration
orders.
John Hoeven is a Republican senator and says passing a funding bill will be easy if the Democrats take a stand on immigration.
(BEGIN VIDEOCLIP)
JOHN HOEVEN, U.S. SENATE REPUBLICAN: There's been a number of Democrats who agree with us that the President has exceeded his authority
which is executive order on immigration last year.
If they join with us and address that issue, then obviously the funding piece gets easier. If they don't, then what I'm saying is that
funding bill - we're going to have to see if there's some way to tie it to the Federal District Court's decision. Because remember at the end of the
day, we've got to be able to pass something though both the Senate and the House that gets enough support.
(END VIDEOCLIP)
QUEST: The senate majority leader Rich McConnell announced he'll bring a separate immigration bill to Congress this week which could mean a
funding bill could pass without the controversial amendment. Dana Bash is live in Washington.
I'm sitting here in London, Dana, and frankly I - it's bewildering exactly what is going on as I suspect it is maybe in Washington. But this
is - this is politics pure and simple.
DANA BASH, CNN'S CHIEF CONGRESSIONAL CORRESPONDENT: Yes, I'm sitting here in the Capitol and it is equally if not more bewildering about what's
going on. But I can tell you first of all, yes, it has been politics pure and simple. But to be a little bit more fair perhaps, policy differences
between the two political parties and on the issue of immigration which is always very difficult.
Over the past couple of hours we have seen a change and you might say that Mitch McConnell, the new senate majority leader, cried Uncle because
he understands that there is a lot of pressure on him as one of the new Republican leaders and Republicans having control of the United States
Congress - pressure to govern.
And so he's been balancing the pressure to govern with the pressure to please his conservative base and he seems to have chosen governing. In the
past, again hour or two, announcing that he is going to pass a bill or at least he will allow a bill to come to the senate as a clean funding bill
that will only fund the Department of Homeland Security.
And then later they will have that vote on what they really want on the conservative base which is to do away with the President's executive
order allowing millions of undocumented immigrants to stay here. We think that the Democrats are going to take yes for an answer, but it is not that
easy as you've seen many times before when this threat (ph) has happened. And there are people on both flanks of both parties who can still slow it
down, maybe even pass the Friday deadline.
QUEST: And we've got this other interesting development - the President vetoing the Keystone XL pipeline - his first veto in several
years - in some five years. But this was inevitable again because obviously the new Republican-controlled Congress is determined - this was
their first measure -
BASH: Right.
QUEST: -- and they were determined to ram as many things down the President's throat as they can.
BASH: It's true, you know, it's you know obviously basic American government civics that Congress passes bills and the President either
vetoes them or signs them.
But because the President since he has been in office has had control of the Senate in his own party's hands, in the Democrats' hands, he has
gotten very few bills that have made it to his desk that he doesn't like enough to veto them.
That has changed since January when Republicans have taken again full control of Congress and this was the very first - as you said - the first
example of what we'll probably see several more to come of him actually having to pick up his pen and use it to issue a veto.
It was the Keystone Pipeline, something that Republicans have been pushing for, for a very long time. A lot of Democrats voted for it. We do
not think though that there will be enough votes to actually overcome that veto. It would have to be 67 in the Senate - he simply doesn't have that.
Or - we think he's going to use that veto pen maybe ten more times in the next couple of months, and as you said, he's only used it just a few times
in six years which is very rare for a president.
QUEST: Fascinating politics getting nastier in Washington. Dana, thank you for helping us understand what's going on. Thank you.
BASH: Thanks for having me.
QUEST: Apple's Emojis are getting an overhaul and little smiley icons really reflect a serious situation like race. But when you look at the new
ones, you start to ask what's next?
(COMMERCIAL BREAK)
QUEST: Apple says it cares deeply about diversity so it's updating is Emoji icons to look more like the real world. Now, this of course is the
Emoji. Their icons originated in Japan and of course were used by Apple with software. They were added to the Apple software in 2011.
Now in a nod to diversity, they are introducing a variety of different ones. For example, you have somebody wearing - a man wearing a turban, you
have same-sex couples holding hands, and you have a man in a traditional Chinese hat. This is all a nod to diversity.
There had been criticism at the lack of racial diversity. In fact, so many Emojis went out people were saying well actually they didn't look like
anything around the world. Not surprisingly, lots of fuss and fury. So, new more diverse Emojis are going to be added, including a black Santa, and
an entire variety of other ones.
Does it matter what the Emojis look like? One question for Samuel Burke who joins me now. Good evening to you.
SAMUEL BURKE, BUSINESS CORRESPONDENT: Good evening.
QUEST: Don't touch the bell. Does it matter?
BURKE: It does matter actually to thousands of people because a couple of years ago many people signed a petition on dosomething.org saying
that they weren't represented by these emoticons and even Miley Cyrus, the singer, she got this campaign to go viral by tweeting about it.
And now Apple two years later is finally fulfilling their promise to follow through (inaudible) with this.
QUEST: But why - all right -but why should it take so long? Because I can't see, you know, a company like Apple - you get any of these
emoticons - just shell them out, the more the merrier. There's dozens of them - just, you know, you can go online, there's hundreds of them.
BURKE: There's actually a computation reason behind this. They couldn't just simply update it, they had to go through the Unicode standard
that any software company would have to go through. That company actually worked with a dermatological scale to try and figure these out -
QUEST: Right.
BURKE: Interesting, they added - they were already some gay ones, and now you have the gay family, two moms, two dads. So a lot of people are
rejoicing - it was one of the top trends on social media today because people finally feel that they're represented by the little smiley faces
that they send.
QUEST: This Emoji or emoticon - where's does it come from? Where does the name come from? Where does the word come from?
BURKE: It all comes from Japan. It was invented in the 90s. What fascinates me is that the Japanese actually pay millions of dollars for
these emoticons. There's a company similar to Whatsapp where the company's actually making tens of millions of dollars in revenue each quarter selling
these, Richard, though Apple doesn't sell them.
QUEST: Now I remember when Skype started. And I used to say - and I said to them - with all the free - (inaudible) now of course Skype is part
of Microsoft - but before that when it was - I said to the CEO how do you make any money?
And he said selling emoticons - selling these sort of things. It's - I've never bought one in my life, have you?
BURKE: I haven't, but it's a huge business but more so -
QUEST: Who buys them?
BURKE: -- more so in Asia, but what this -
QUEST: Who buys them?
BURKE: A lot of women, a lot of children, but it's not just the (inaudible). Then a lot of people with a lot of different colors and
sexual orientations clearly. But it actually gets to something that's one of the core principles of Apple now the most valuable company in the world.
They need their IOS - their operating system to make everybody happy, to be as smooth as possible and that's why people are choosing Apple over
Android because they like the operating systems. That means every little detail must be manicured perfectly, including manicuring those little
faces.
QUEST: Finally, pull the strands together here because you rightly point out Apple is the most valuable by stock market valuation. Tim Cook
now regarded - I think - I think - not only for his becoming out but for the way he's handled as a success. Would you agree?
BURKE: Absolutely. And I think that these type of things are important. If you're a gay family, why should you have to send a picture
of a straight family? If you're a black man, why should you have to send a white 'thumbs up'?
People are sending a 'thumbs up' tonight because it matches who they are.
QUEST: Thank you very much. 'Thumbs up.' Samuel Burke. There is one thing that's puzzling the Fed right now - people like Samuel Burke -
millennials. In her testimony to lawmakers in Washington, U.S. Fed chief Janet Yellen said she thought they were operating in some very strange
ways.
(BEGIN VIDEOCLIP)
JANET YELLEN, CHAIR, U.S. FEDERAL RESERVE: Well I think we're just beginning to understand how the millennials are behaving. They're
certainly waiting longer to buy houses, to get married. They have a lot of student debt. They seem, you know, quite worried about housing as an
investment, they've had a tough time in the job market.
And, you know, exactly as the economy strengthens, I expect more of them to form households of their own and buy homes, but we've yet to really
see how this is going to affect that generation.
(END VIDEOCLIP)
QUEST: The issue of millennials and how they are responding has bosses having to think of new ways to keep their millennial employees
happy. CNN's Lisa Soares looks at a British company that's taking office creativity to a whole new level.
(BEGIN VIDEOCLIP)
ISA SOARES, REPORTER AT CNN INTERNATIONAL: From the outside it looks like another quaint Victorian house. But inside it's far from ordinary.
Here, creativity is in abundance.
Female: This is a project that spans money markets around the world.
SOARES: The team at design company Pearlfisher gathered daily in this break room to brainstorm.
Female: Yes, it was all about using really playful icons.
SOARES: And every time they seem to have a ball.
(GROUP TALKING AND LAUGHTER)
SOARES: That's because they're sitting on 81,000 white balls. An office now entirely converted into a giant plastic adult playground that
promotes the power of play.
Female: An app for the Hala (ph) Foundation.
SOARES: And where its staff can work, unwind and clear their minds, all in a low-pressure environment.
JACK HART, SENIOR CREATIVE STRATEGIST, PEARLFISHER: I think it's to capitalize on this idea of being a bit of fun - this is a completely non-
goal-orientated environment. I think the worst thing businesses can do is ask them to say this is going to be the outcome - this is how much revenue
it's going to generate.
It's about getting away from those kind of targets and goals. And I think what that does mean is that you actually come out being more
productive, more refreshed, more connected and more energized.
SOARES: The jump-in installation follows the likes of Google, Facebook, Yahoo, among many others who have added slides, interior gardens,
pool tables and game rooms to their offices.
Do you think that here in U.K. and the rest of Europe there's still a long way to go in terms of creative this sort of environment?
HART: There's been a real desire for something like this in businesses because people like to talk and say they work in creative
environments, but bean bags doesn't really cut it anymore.
SOARES: What this space really does is help create a playful environment which then helps foster the creative process. It's all about
embracing a childlike mindset and for me, letting off some steam. (LAUGHTER). Isa Soares, CNN London.
(END VIDEOCLIP)
QUEST: Speechless. After the break. (RINGS BELL).
(COMMERCIAL BREAK)
QUEST: The FBI and the U.S. State Department are offering a reward of up to $3 million. They want information that could help them arrest
suspected cybercriminal Evgeniy Bogachev. He's accused of infecting countless computers with malware, including something known as
gameoverzeus.
Investigators said he's believed to be in Russia. In the U.K., London's iconic BT Towers recently was the scene of a simulated cyber
strike. Now the whole idea was to test some of the country's top amateur code breakers. Could they defend Britain from cybercrime groups? Kellie
Morgan reports.
(BEGIN VIDEOCLIP)
KELLIE MORGAN, CNN CORRESPONDENT: The iconic BT Tower rises above the London skyline. An international communications hub that in this story
has fallen victim to hackers.
Automated Voice: Your buildings are under our control, the power is out. The control server is ours.
MORGAN: Inside the tower, realization sets in - lunch is left uneaten, fingers begin to tap. Amid a cacophony of noise, these cyber
warriors zone in on their screens. The race is on to regain control of the system and turn the power for this vital piece of infrastructure back on.
Male: We could also try reforcing (ph) the app and page.
MORGAN: Well fortunately this is all just a simulation, the cyber attackers fictitious and these codebreakers here are actually contestants
in a competition that's designed to find the very best people to defend Britain in cyberspace because the threat of this kind of scenario is very
real.
STEPHANIE DAMAN, CEO, CYBER SECURITY CHALLENGE U.K.: I mean you've only got to look at some of the attacks that you see every month - big
companies, huge amounts of space (ph) to compromise. And that's happening again and again and again and it's all around, not having the right
protections in place. And in many cases it's all about not having the right people for those protections in place.
MORGAN: This website from U.S. security firm Norse provides a map of cyberattacks happening around the world in real time. Millions occur every
day, costing the global economy an estimated $400 billion a year. Experts say more people are needed to counter the problem.
ROBERT PARTRIDGE, HEAD OF SECURITY ACADEMY, BT: Twenty-seven percent of the cybersecurity industry will be at retirement age within the next ten
years. That leaves a huge gap at the earlier - for the younger generation that isn't currently being filled.
MORGAN: His competition, designed to tap into those amateur self- taught codebreakers who might otherwise remain undiscovered or even tempted to use their skills in a more unethical manner.
PAUL CRICHARD, HEAD OF CYBER RESEARCH, RAYTHEON UK: These are the ones who are really spending their own time to be skilled, to understand
what is going on in the IT world and where the risks are. And those are the people we can't find by normal recruitment because perhaps they don't
feel they're good enough.
MORGAN: For this challenge is was an hour before they could neutralize the hackers, turn the power back on and send the tower into a
360-degree rotation. A rewarding view of the bigger prize could be more security online. Kellie Morgan, CNN London.
QUEST: Now we've been telling you about Janet Yellen's testimony in Washington. Well she was talking mostly about economics, interest rates
and patience. But she also warned that cyber threats -one of the biggest concerns for business around the world -
(BEGIN VIDEOCLIP)
YELLEN: Well I think it's on everyone's top list of - the top of the list of concerns that we have about the financial system, about the
problems facing financial organizations and I would include the Federal Reserve in that too. It's a top concern of our own.
(END VIDEOCLIP)
QUEST: Well she's nothing if not varied in her comments - whether it's interest rates, monetary policy, millennials or indeed the question of
cyber security. Well the chairwoman's other comments on monetary policy did help push the stocks up and that's the way they actually traded - up 92
points. It is at a record. The broader market is also at a record.
In Europe, the FTSE and the DAX are at records, and in London's case, it is the highest level for the FTSE since 1999. Now, some monies - it's
the numbers in to CNN (RINGS BELL) after the bell. HP - the old Hewlett Packard - revenue down 5 percent over the year, earnings per share down as
well. The strong dollar's hurting the outlook.
Remember Meg Whitman is responsible. She says she's turning HP 'round on track. It's preparing to split the enterprise and PC and printing
businesses. Whitman has her work cut out for her. HP's been under many reorganizations - none of them successfully -- and the stock is once again
under pressure.
We will have a "Profitable Moment" after the break. It's "Quest Means Business" from London.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." It was an interesting exchange today on Capitol Hill with Janet Yellen when she gave her view on how
millennials are affecting the economy especially as it relates to house purchases, setting up families and the economic effect.
What's fascinating about that is that now the chairman of the Fed also has to account for these millennials - these 21 to 30-year-olds that are
having a revolution within the economy. Think about it - they've already revolutionized the music industry, the film industry. Everyone who's ever
had a millennial intern knows how difficult they can be.
And as for the - what they've done to the travel industry - the airlines, the hotels, the fashion industry - just about every sector of the
economy. We talked about Emojis earlier in the program - so many of those are being changed because of the millennial generation.
And now the Fed chair also says this is an economic force with which she has to reckon. And she admits she doesn't understand. Well let me
tell you, anyone who's had a millennial intern - or a millennial colleague - most certainly knows no one understands the mind of the millennial.
That's "Quest Means Business" for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, (RINGS BELL) hope it's
profitable. Tomorrow night we're in Madrid.
END
