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Quest Means Business
Dow Jones Loses Nearly 1.5 Percent; Apple Announces New TV Era; Fed Investigation Forces Out United CEO; Queen Elizabeth's 63 Years on the Throne. Aired 4-5p ET.
Aired September 09, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[16:00:00] RICHARD QUEST, HOST: The day started so well and it ended so badly down 232 points a loss of nearly one and a half percent for the Dow
Jones Industrials. A firm gavel but still a thumping great loss on Wednesday, September the 9th.
Apple wants to get comfy right in the heart of your living room. A new era for United as a sprawling Fed investigation forces out the CEO.
And a record reign. 63 years of changes for her Majesty the Queen and British Business.
(END VIDEO CLIP)
QUEST: I'm Richard Quest, we have an hour together and I mean business.
Good evening tonight a battle royal is getting underway for your living room. Apple says it will redefine how we watch television at its product
event in California a few hours ago Apple has introduced a new version of Apple TV.
It features voice controls, it's got streamlined access to apps like Netflix and ITunes and it has an operating system that will accept new
apps. This is how it was revealed.
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TIM COOK: We believe the future of television is apps.
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QUEST: The future of television is apps. Tim Cook says the new Apple TV is the foundation for the future of television, thank goodness Mr. Cook that
we have a future in television. Keep in mind Apple, once called Apple TV a mere hobby. Released in 2007 but low cost competitors have since flooded
the market.
Well join me in the sitting room and we will enjoy perhaps exactly what might be coming next.
Oh in the old days all we had was a good old fashioned television that you twiddled the knobs, but then along came Apple TV, you've got Amazon Fire,
you've got Apple TV of course, you've got the (inaudible) streaming stick, a tiny stick, big entertainment. And then you've got Google Chrome Cast.
All driven by the popularity of streaming. And the devices have one goal and one goal only; to take the content and put it onto the big screen.
The big screen without any wires. So let's pull this together. Gene Munster is a Senior Research Analyst at Piper Jeffery joins me from San
Francisco, California.
The Apple TV Play - Good afternoon. The Apple TV Play is a big one, but where's it going for Apple?
GENE MUNSTER, SENIOR RESEARCH ANALYST, PIPER JEFFREY: Well it's going, we spend a lot of time in the living room and Apple really hasn't had a play
there and ultimately what they're doing is laying the foundation for people to cut the cable and find it easier to get the content that they want and
do what they want with the TV. And so, this is a big step as you mentioned.
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MUNSTER: The first update in three years for Apple TV and probably going to be something that you're going to hear more and more about over the next
few years.
QUEST: Right, but the idea is to integrate, besides obviously getting Netflix and getting apps onto it, the idea is to integrate this concept of
Siri, so I just say I want to watch news. I want to see a good movie with a western theme.
(END VIDEO CLIP)
MUNSTER: Yes, the discovery is one of the big things, the interface around the TV, the channel guide is going to go away over the next few years.
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MUNSTER: But discovery, how you find different content. You used to surf the channel guide but as you mentioned Siri is going to play a part in
that. And they are allowing Siri to overlap between Netflix, Hulu at HBO now and Showtime.
QUEST: So when I've got on - I've got on with me here all the others.
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QUEST: I've got Google Chrome Cast, I've got the firestick, I've got (Loroqu) should - who's going to win this battle? I mean Apple TV has tens
of billions in the bank from the Apple Corporation, so it's got huge resources behind it. Is this going to be a case of the bully with the
biggest wallet wins the battle?
[16:05:00] MUNSTER: I think so. And I think if you look at these other players they obviously have a niche within this. But when you look at the
resources as you mentioned that Apple has and second is they have a huge community of users, about 400 million use ios devices daily.
And that obviously ties into and easier to get those people to adopt the living room.
(END VIDEO CLIP)
QUEST: OK. And the other announcements that we had today, the iPhone 6S, and the iPhone. What do you make of this larger iPad, what do you make of
the other developments? Are they incremental or was there anything just to get excited about?
MUNSTER: Well the iPad is something that's a pretty big deal because it's about 80% bigger than the other iPad and the iPad business has been
struggling, it's been down year over year for Apple.
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MUNSTER: And so this is going to allow a new business class, enterprise class, so I think that's important. And the changes to the iPhone, the 6S
is going to be more subtle. They'll have a new interface but ultimately this is going to allow Apple to gain share. This is something more for
investors and I think there was enough substance to keep this story going.
(END VIDEO CLIP)
QUEST: Sir, thank you for joining us. These are developments. The only thing I can say thank you for joining us. The only thing I can say is
thank goodness the television still works or at least it does if I fiddle around with it long enough.
When we come back in just a moment you can always get something good on the box. When we come back in just a moment the CEO who lost his job all
because of the flight that was designed for purposes other than most passengers.
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QUEST: United Chief's Exec, in a moment.
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QUEST: Shares in United Airlines managed to edge a smidgen higher as the company's start (inaudible) with a new Chief Executive. As we told you
last night Jeff Smisek left with immediately effect after apparently being caught up in a Federal investigation. Where did this investigation come
from?
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QUEST: Well, it all began with something known as Bridgegate where the New Jersey governor accused of creating on George Washington Bridge to make
problems for political rivals.
Now it started in New Jersey but it ended up at Newark Liberty International Airport when claims were unearthed that United had tried to
carry favor with a Port Authority Chairman, David Samsung.
From the bridge to the airport, all the way down to the Carolinas where we end up. `Cause United arranged a regular flight to Columbia in South
Carolina, to Columbia Metropolitan Airport. It's a remote airport but it was close to Samsung's holiday home.
So that flight from Newark to Columbia became known as the Chairman's Flight. Now it was only running on a Thursday night and a Monday morning,
perfect for the Chairman to go and visit his holiday home at Aiken, South Carolina.
Why would you go to Aiken you may wonder, to go from there down to here. What is there in Aiken? It's the home of the Aiken observatory, it's a
thoroughbred hall of fame, and it's the - of course of the train and railway museum. What's fascinating about the whole issue is the flight,
the Chairman's flight was discontinued four days after Samsung resigned.
[16:10:00] As for Jeff Smisek, don't feel too sorry, he may have lost his job but he does get a $4,875,000 payoff. He also gets free flights for
life. There will be a claw back law that will apply.
Jacob Frenkel is a former enforcement lawyer at the U.S. Securities and Exchange Commission and I asked him if the way United had handled the case
suggested they're expecting to hear some bad news.
JACOB FRENKEL, FORMER ENFORCEMENT LAWYER, U.S. SECURITIES AND EXCHANGE COMMISSION: In the current world of major corporations and proper
corporate compliance when you conduct an internal investigation even at times when there's the appearance of impropriety you end up hearing about,
and talking about, separation resignations and sometimes terminations.
I mean we've had chairman's of the board, senior executives terminated for having inappropriate relationships with their - you know with their
secretaries or other staff. So we're in a very different time and culture when it comes to corporate compliance.
In an organization like United who did absolutely the right thing, often is part of that compliance and remediation if there is an air and appearance
of wrongdoing and I'll be real quick with this, and that is the government expects to see the individuals who are implicated removed from those
positions. So this likely is part of it but we just don't know how much fire there is around this smoke.
QUEST: You know the allegation, and we don't know whether it's true or not, but it's - we'll go there anyway about "The Chairman's Flight." The
Chairman's Flight which they ran from Newark to Columbia Metropolitan Airport. If their intent was just to keep him happy, not to have any
specific goal, just you know the chairman lives there, fine we've got a spare plane, run the plane, what difference does it make. Is that wrong?
FRENKEL: Well, you know wrong is relative. Because for there to be a criminal case there has to be criminal intent. And the Statutes that are
potentially implicated here which are the Honest Services Fraud Statute, the Travel Act Statute, and even you know there's a - there's another
similar statute that falls in between relating to Federal program fraud funds that has a "bribery" component. The issue is whether there is
criminal intent.
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FRENKEL: If the purpose of creating this route was in any way a quid pro quo, or some type of kick back in exchange for the considerations that were
being sought by United, then it's problematic and it could rise to a - could rise to a level of criminality.
Having said that everything we've read so far was United did not get what it was looking. So that in and of itself suggests not only is there a
defense but there's a compelling argument that maybe there was no criminal intent because they did not receive what they potentially sought to
receive.
(END VIDEO CLIP)
QUEST: You're a former SEC Enforcement Lawyer .
FRENKEL: And Former Federal President for the criminal prosecutor.
QUEST: Even better sir, even better. Do you expect there to be prosecutions here?
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FRENKEL: No way of knowing but what we can say is there are the three statutes that are implicated are statutes that have been used effectively
and frequently.
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FRENKEL: You know it's a very aggressive office that's conducting this investigation and we can be certain that if there is fire there and the
Prosecutors believe at the end of the day that there is grounds to prosecute we will see a prosecution.
QUEST: Jacob Frenkel on the woes of United.
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QUEST: Well look how the day went, it was a nice open robust beginning on Wall Street. A bit of a something weird happened around 12 o'clock, and
then something really nasty happened shortly after lunch. The stocks turned lower late in the session and the market closed at the lowest point
of the day.
The Dow was off 239 points, a loss of 1.45% and every Dow stock was down including obviously Apple. If all of them are down, Apple was one of the
bigger losers in the Dow, it was down some 2% overall despite the announcements coming out of California.
Looking at the Nikkei, and earlier what the impetus of the market had been was that 7.7 rise for the Nikkei, and it was straight out the gate.
Straight up and it never looked back for the whole session. It was the biggest one day gain in seven years and it was that which propelled all the
other markets, Shanghai, Hong Kong, Europe was up across the board. So it was really only the Dow, the U.S. markets just couldn't. And look you see
how the movement.
[16:15:03] There's another side of the volatility that's plagued markets this year. Everybody's looking ahead to the Fed, U.S. Central Bank is set
to hold a two day policy meeting next week and the news will be whether this is the moment to start raising rates. The first time they will have
initiated a raising, tightening cycle for the best part of two decades.
With me now let's talk about with what you do with your portfolio is Jim Hayward. Good to see you sir.
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JIM AWAD: My pleasure.
QUEST: Thanks for coming in. Chairman of Investment Firm Plimsoll Mark Capital.
So, we know that the investor stays in, you don't sell in a losing market.
AWAD: Absolutely.
QUEST: But now we've had a few weeks of this so you should be thinking, or one should be thinking about rebalancing portfolios perhaps.
AWAD: Yes, well what you have to look at is a market that might work its way higher, should work its way higher but the risks are to the downside.
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AWAD: The risks aren't that the market's going to go up a lot more than we thought. The risk is that the wheels come off China - I call them the
China complex which is oil commodities and that pulls the world into a recession.
So you should go higher but if you don't it's going to be because of China and the China complex decelerates.
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AWAD: So how do you - what do you do as an investor? You tighten up on quality on the equity side. The old momentum stocks that drove the market
until July .
QUEST: . such as.
AWAD: . the social media companies, the bio-tech companies, they were the stocks - there were really half a dozen stocks that were driving the market
and the NASDAQ higher.
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AWAD: They're broken, it's very hard to value them, their momentum stops and .
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QUEST: But if you go for quality you end up going for those very companies like Caterpillar, like GE, (inaudible) those very companies who could be
susceptible to an investment slowdown in China.
AWAD: Well the China part of their business will affect them but they are globally balanced with bulletproof balance sheets, tremendous excess cash
flow generation and they're a lot less exposed to China than say the other Asian markets.
QUEST: Would you switch out of your Asia exposure maybe - or switch within Asia say for example from China to India or even Brazil or .
AWAD: Well I would lighten up my exposure on the whole area because they're all going to be affected by what's going on in China. But the one
that is most healthy and where the fundamentals are doing the best right now is India. Not to say that it won't get carried along but they don't
have so much trade with China say as compared to Brazil, and Russia, and other countries.
QUEST: Would you go for a flight quality or safety for example bombs. I mean is it time to rebalance the percentages?
AWAD: Right, so here's what .
QUEST: . Assuming you're not heading to a (inaudible).
AWAD: Yes, you should have quality bonds not junk bonds, sell your junk bonds, sell your high yield bonds, sell your low quality bonds, you can buy
five year corporates and get a little under 4%. And that - (inaudible) account that's tax free premium to inflation.
QUEST: Right, so finally. Gold.
AWAD: Gold as well in periods of higher inflation or chaos. I don't think we're going to go through either. What's going to prevent us from chaos is
the strength in the United States. What's going to prevent us from higher inflation is the deceleration in China.
So I think high quality common stocks and high quality bonds will do better than gold.
QUEST: See you sir.
AWAD: Until next time.
QUEST: (inaudible) absolutely.
Now we're going to continue after the break. It was very easy to think of the Ashley Madison hack as being one of those stories that everybody sort
of had a quick giggle about. Well now the tragedy in the wake of the hack.
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QUEST: We're talking to the family of the pastor who felt he had to take the most drastic ultimate step when his name was revealed.
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[16:20:20] QUEST: Life is short, have an affair. That's the motto of the cheating website Ashley Madison. Well for a pastor and professor at New
Orleans Baptist Theological Seminary, it certainly meant that, the end of his own life.
The pastor committed suicide after he was ousted by hackers who exposed the names of millions of people who had signed up for the cheating website.
The hackers have called themselves "The Impact Team." Now they made this announcement before releasing the names in the summer. And remember this
is what they said.
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QUEST: "Shutting down Ashley Madison will cost you, but non-compliance will cost you more."
Laurie Segall is here with me now to show us the true human cost of this attack.
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LAURIE SEGALL, CNN MONEY TECH CORRESPONDENT: You know we've seen its effect isn't victimless, there are real pain, there's real loss, and
families are beginning to open up to - about this. And one of those families spoke to me about their pain. Take a listen.
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SEGALL: A pastor, a husband, father of two, a seminary professor with a sense of humor.
TREY GIBSON, SON OF JOHN GIBSON: My dad was a great man, he was a great man with struggles. My dad reached a point of such hopelessness and
despair that he took his own life.
SEGALL: It was just six days after hackers exposed the names of millions signed up for Ashley Madison, a website for people seeking affairs.
Gibson's name was on the list.
CHRISTI GIBSON, WIFE OF JOHN GIBSON: I came home from work, and I began to notice clues around the house that things were not what they were supposed
to be. Eventually I discovered him and I - it was a moment I've - that life doesn't prepare you for. How do you - how do you tell your kids that
their dad is gone and that he took his own life.
CALLIE GIBSON, DAUGHTER OF JOHN GIBSON: I think that the hardest thing for me to deal with was that he honestly doubted the fact that I would love him
enough.
SEGALL: In his suicide note Gibson wrote about being on Ashley Madison. Do you mind sharing a little bit of what he said in that note?
GIBSON: He talked about his depression, he talked about having his name on their and he said he was just very, very sorry. He poured his life into
other people but somehow or other he couldn't extend that to himself.
SEGALL: Facing the harsh reality of loss Christi says there's also forgiveness.
GIBSON: It wasn't so bad that we wouldn't have forgiven it and so many people have said that to us. But for John, it carried with him such shame,
and he just - he couldn't see that.
SEGALL: With a hack that left 32 million names of potential adulterers exposed Christi has a message for communities grappling with infidelity.
GIBSON: Don't underestimate the power of love. Nothing - nothing is worth, the loss of a father, and a husband, and a friend. It just didn't
merit it, it didn't merit it at all.
(END VIDEO CLIP)
QUEST: I can hear some saying dreadful story but it is an extreme example but you're going to tell me that there have been other cases and the misery
that its caused.
SEGALL: Yes, the Toronto police have come out and said that they're investigating two suicides that they believe are linked to Ashley Madison.
You have these people who are now being extorted because of this.
At the beginning of this I think a lot of us were thinking this isn't victimless, these people were cheaters, they were looking to do something
bad. But if we look at this story through the lens of life as not being black and white, and people not being good or bad, I think it's easier to
digest it.
QUEST: And in all of this Ashley Madison stays open, the company continues, a new CEO, but it seems to have no remorse.
SEGALL: You know actually I want to read you what they said, they just came to me with a statement moments ago and Avid Life Media, this is the
parent company of Ashley Madison.
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SEGALL: They said "Avid Life Media expresses its deepest condolences to the family of Dr. John Gibson. Dr. Gibson's passing is a stark heart-
wrenching reminder that the criminal hack against our company and our customers has had very real consequences for a great many innocent people."
QUEST: Yes, but they don't I mean I'm not going to dwell certainly not - but it was there poor security that allowed this to take place.
[16:25:03] SEGALL: Yes, and we still, and I will say this, we still haven't heard about them putting out different security measures. We still
haven't heard from a new CEO. We know that the old CEO stepped down. But the loss. I hope that in putting out this story people know that this
isn't hopeless, that this list isn't something that we need to be gossiping over at the water cooler, this is something that's people's real lives and
I think you saw that with Christi and her family.
(END VIDEO CLIP)
QUEST: Excellent reporting. Thank you very much.
The power of technology. We've talked about it tonight, you've heard about it with Apple TV, you've heard about it with the downside with Ashley
Madison where it can unite as well as divide. We're looking at Israel's fast growing tech scene. Arab Israelis say they have found it tough to
break into the tech industry.
Samuel Burke met a man who is hoping to change all of that and thinks working together could improve relations.
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SAMUEL BURKE, CNN TECH CORRESPONDENT: Israel, an ancient land with a modern day dilemma. Finding good jobs for its young Arab citizens having
trouble getting started in tech.
Entrepreneur (Imad Telhami) says they've been shut out of Israel's booming tech scene for too long.
IMAD TELHAMI, CHARIMAN BABCOM CENTERS: Israel is a startup nation country. Arabs are 20% of this country, they are part of the nation, they are not
part of the start-up, these are already start up.
BURKE: Telhami is a Christian Arab Israeli and founder of Babcom a software development and call center company that's aiming to create a
diverse tech workplace for Jews and non-Jews alike.
When he was a young man entering the workforce Telhami's co-workers protested when they discovered he was Arab. In time he earned their trust
and with the help of his boss, Jewish Israeli business (inaudible) Telhami climbed the corporate ranks.
TELHAMI: He was really my godfather that was my mentor, my boss, and my friend.
BURKE: Inspired by (Lautmann's) spirit of togetherness Telhami has built companies with the aim of creating jobs for minorities.
TELHAMI: We have Arabs and Jews. We have all kinds of religions, Muslims, Jews, Christian. We are here all as a one family. We created Babcom as a
one family business that we all live here as one.
BURKE: For Telhami's employees the jobs create a workplace where much of Israel's tensions are at ease.
UNIDENTIFIED FEMALE: We all work together, Jewish and Arabs, and there's no discrimination at all.
BURKE: And for Imad Telhmai companies like Babcom have a wider significance.
TELHAMI: It's a big win for the Israel economy and then there is another great win for the Middle East because we can bring the best technologies to
the Arab countries and that way the Israeli Arabs can become the real - a great bridge for peace in the Middle East.
BURKE: After decades of politicians failing to create a lasting peace, Telhami believes entrepreneurship is now the region's next best chance.
Samuel Burke, CNN, (Inaudible) Israel.
(END VIDEO CLIP)
QUEST: The President of the EU Commission urgently calls for binding refugee quotas in Europe to deal with the intensifying migrant crisis.
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[16:31:34] QUEST: Hello, I'm Richard Quest. There's certainly more "Quest Means Business" in just a moment when I'm going to show you how British
Airways prepares its staff and passengers to evacuate aircraft.
And 63 years of boom and bust - the City of London through the record reign of Her Majesty the Queen. But before all of that, this CNN and on this
network the news always comes first.
The European Commission president Jean-Claude Juncker says E.U. member states must accept mandatory quotas and share the burden of 160,000
refugees.
The new proposals were distributed to 60 percent of the refugees now residing in Italy, Greece and Hungary across Germany, France and Spain.
Countries refusing to take on the burden would face financial penalties. Juncker said now is the time to treat the refugees with the dignity they
deserve.
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JEAN-CLAUDE JUNCKER, EUROPEAN COMMISSION PRESIDENT: This is not the time to take fright. It's a time of humanity and of human dignity. We
Europeans - all of us - I thought before interruption (ph). All of us we should remember well that Europe is a continent where nearly everyone has
at one time been a refugee.
(END VIDEOCLIP)
QUEST: Prince Ali Bin al-Hussein of Jordan says he will run again for the FIFA presidency. He hopes to succeed Sepp Blatter.
Prince Ali says he's the only candidate with the courage to confront corruption in football's governing body. This will be the Prince's second
attempt to win football's top post.
Queen Elizabeth has reached an historic milestone on Wednesday, becoming the longest reigning British monarch in history. Her Majesty has been on
the throne for 63 years and 216 days, overtaking her great-great grandmother Queen Victoria.
The Queen spent her historic day opening the border's railway line in Scotland.
Hillary Clinton has announced her support for the nuclear deal with Iran. The U.S. Democratic presidential candidate and former secretary of state
said if elected she would strictly enforce the agreement. And she warned the U.S. needs to take a distrust-and-verify approach towards Iran.
(BEGIN VIDEOCLIP)
HILLARY CLINTON, U.S. DEMOCRATIC PRESIDENTIAL CANDIDATE AND FORMER U.S. SECRETARY OF STATE: Either we move forward on the path of diplomacy and
cease this chance to block Iran's path to a nuclear weapon or we turn down a more dangerous path leading to a far less certain and riskier future.
That's why I support this deal. I support it as part of a larger strategy toward Iran.
(END VIDEOCLIP)
QUEST: Despite a plea for unity from the E.U. Commission President Jean- Claude Juncker, the countries to actually do more - well some nations like Hungary, Poland, Slovakia and the Czech Republic are strongly opposed to
refugee quotas.
And they're taking measures to keep people from crossing their borders. CNN's Arwa Damon's been reporting on a group that broke through police
lines at a holding center in Hungary.
The government there is now taking steps to reinforce its border as Arwa explains.
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ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: This is the wall that Hungary is building, it's attempt to try to control or stop the flood
coming across its borders. And in the near future, this key transit point for so many of the refugees, most who have fled the wars in Iraq, Syria and
Afghanistan and the economic migrants it will be almost completely shut down.
These are the train tracks that people follow from Serbia into Hungary. At this point they would have walked anywhere from four to nine hours. And at
the end of these railway tracks is where they enter a field that is the holding area.
You do see quite a few of them stopping before moving on, wanting to rest up a little bit, wanting to get a bit more information about what's
happening now.
Over the last few days in this holding area we have seen a number of attempts where people have tried to break through the police lines and
break out simply set up with the wait and the conditions that they're having to wait.
And earlier in the morning one group did break through. They made it a distance down the road then they were finally stopped by the police. And
they negotiated - came to an agreement that saw food and water being brought to them as well as a bus that was intended to take them to the
Austrian border.
And among this group was a woman who was carrying an 11-day-old baby. She told us that her dinghy from Turkey to Greece landed on the shores and she
couldn't keep going. She gave birth and then carried her baby girl this entire way because she, like so many others, believes that this is the only
chance for a future.
Arwa Damon, CNN on the Hungary-Serbia border.
(END VIDEOCLIP)
QUEST: OK, after the break we're going to show you the British Airways plane that caught fire just before takeoff. And the passengers had the
pilot and crew to thank for a safe exit.
(COMMERCIAL BREAK)
QUEST: Ah, you can't beat good old-fashioned economy stuck in row 96J with turbulence. Welcome back to "CNN Business Traveller." Now while this
cabin may be positively roomy, not every flight is as comfortable. In the United States up to 30,000 people signed an online petition calling on
Congress to put in place legal minimum space between passengers.
The desire to get more space in economy and at the same time shove more passengers in, has led some companies to come up with some very creative
solutions.
I went to visit Zodiac. They're the company that's come up with the idea of going knee to knee to knee, back to front in economy. The idea - make
economy a little more economical.
(BEGIN VIDEOCLIP)
QUEST: Just when you thought economy class couldn't get any tighter, the design studio ZEO, part of Zodiac Aerospace, has created something quite
different - a seating arrangement which has some of you facing your neighbor.
[16:40:02] So let's put the HD31, better known as the knee-to-knee, to the test. So this idea was what?
(UNKNOWN MALE): You know today everybody faces forward , everything is very conformed. But to really create more space, you have to start to
redistribute people. That should change their orientation.
QUEST: It's certainly got an interesting concept about it, hasn't it? I mean this idea that we'd all be sitting like this. Hello.
Male: Hello.
QUEST: You all right?
Male 2: Hello.
QUEST: Morning.
Male 3: Morning
QUEST: What's been the reaction?
(UNKNOWN MALE): It's been positive. I mean, anybody who tries this can actually feel immediately the amount of space that gets generated.
QUEST: It gives me more space where?
(UNKNOWN MALE): It's really about looking at a person, actually understanding that their shoulders are the widest part of their body, you
know. Sitting up here that your knees are actually the narrowest.
And through positioning people almost in a knee-to- knee configuration. That allows you to really stretch out, move around, you know, cross your
legs without actually interrupting the person beside you.
QUEST: Well everybody do a little bit of stretching out. There we are. There is only one downside which is quite societally difficult and that is
we're looking at each other. Now maybe just because I'm British.
(UNKNOWN MALE): But is this because you're unaccustomed to do this in an aircraft?
QUEST: Yes.
(UNKNOWN MALE): It's something you don't fell particularly uncomfortable on a bus doing or on the train or on the Tube in London. It's part of our
everyday life. It's about having an association of how you should feel in a particular type of vehicle.
But a plane today should be thought about is like catching the train or catching a bus. We fly between cities so frequently now that we have to
start to almost reprogram our brains.
QUEST: And that's what this is really all about, isn't it? It's concept to the idea that challenge everything you're thinking about.
(UNKNOWN MALE): Yes. If we don't challenge everything we do, we'll never move forward.
(END VIDEOCLIP)
QUEST: That's certainly going to challenge some of you. We're getting new details about the British Airways plane that caught fire as it was about to
take off from Las Vegas.
The pilot has been named as Chris Henkey. He's veteran pilot who was actually on one of his final flights before retirement. Passengers have
praised Henkey and the flight's crew for the way they handled the emergency. The takeoff was aborted and the plane was evacuated.
It's believed one of the engines caught fire. Thirteen passengers were injured, most of them of course as always in these cases after they slid
down the emergency shoots onto the runway.
British Airways actually has simulated courses to help prepare staff and passengers who are prepared to pay to learn for incidents during flight.
A few years ago I went to see for myself and got a chance to see how you can prepare and how the airline puts safety first.
(BEGIN VIDEOCLIP)
QUEST: The B.A. Flight Training Center is used by the airline's 3,00 pilots and 14,000 members of cabin crew to train and refresh safety
equipment procedures or SEPs.
Female Announcer: In the event of landing on water, remove the life jacket from the container and screw it into your hand (ph). Pass the tapes around
your waist and tie them securely in a double bow to the side.
QUEST: After an introduction in the classroom, this is where the course really begins - in a simulator, embarking on what feels like any other
flight. We know something's about to happen. We're all eyes and ears.
Female Announcer: Thank you for your attention.
Male Pilot: This is the captain. This is an emergency. Brace! Brace!
Crew: Brace! Brace! Brace! (VOLUMINOUS TIMES).
Male Pilot: This is an emergency! Evacuate! Evacuate!
Crew: Unfasten your seatbelts, come this way! Unfasten your seatbelts, come this way! (Inaudible).
Female Crew Member: Go that way! Go that way! (NUMEROUS TIMES). (Inaudible) checked.
Male Crew Member: Toilet checked. Rear cabin checked.
Female Crew Member: Jenny leaving the aircraft.
Male Crew Member: Aircraft's clear.
QUEST: By continually shouting `brace,' the crew ensure we stay in the safest position until the plane finally stops.
After our simulated emergency landing, we're back onboard for a debrief. The top three points that everyone believed were most useful - learning the
correct brace position, making sure your seatbelt is not twisted and that the oxygen masks will only come down when pressure is lost and not in a
fire.
So now we are prepared as best we can, but there may come a time when it's time to leave the plane through the door and down the slide.
We're wearing overalls to this exercise to prevent friction burns on the way down. We receive a briefing at the bottom of the slide.
[16:45:06] Here we have the luxury of taking our time. We get an idea of what it's like before we actually jump.
Female: OK, lean forward.
QUEST: There are strict rules about how the slide must deploy. It must unfurl in winds of up to 28 miles an hour in just six seconds whatever the
temperature.
(END VIDEOCLIP)
QUEST: And when you go down the slide, I promise you it's never a pleasant experience.
Coming up next on "Quest Means Business" - long may she reign.
(BEGIN VIDEOCLIP)
CROWD: Hip-hip hooray! Hip-hip hooray! Hip-hip hooray!
(END VIDEOCLIP)
QUEST: As Britain cheers its longest-reigning monarch, we'll look at the city of London as Queen Elizabeth has seen it from post-war hardship to
Cool Britannia.
(COMMERCIAL BREAK)
(BELLS TOLLING)
QUEST: Today Britain the Commonwealth is celebrating the longest-reigning monarch, particularly for the U.K. - 63 years, 216 days. That's how long
Queen Elizabeth II has been on the throne, overtaking her great-great grandmother Queen Victoria.
Queen Elizabeth was in Scotland for the official opening of a new railway line. Even after cheers and words of praise, the Queen chose not to dwell
on the milestone.
(BEGIN VIDEOCLIP)
QUEEN ELIZABETH II: Many including you, First Minister, have all have also kindly noted another significance attaching to today although it is not one
to which I have ever aspired. Inevitably, a long life can pass by many milestones. My own is no exception.
But I thank you all and the many others at home and overseas for your touching messages of great kindness.
(END VIDEOCLIP)
QUEST: When the young Princess Elizabeth became queen in 1952, butter was still being rationed in Britain. Joseph Stalin was in control of the
Soviet Union and Winston Churchill was her first prime minister. For Queen Elizabeth II, an historic reign began with person grief, of course because
she became queen at the death of her father.
(BEGIN VIDEOCLIP)
MALE ANNOUNCER: The tragic news reached Princess Elizabeth and her husband while in Kenya.
(END VIDEOCLIP)
QUEST: It was the first day of a lifetime of service. King George had died and the 25-year-old queen set aside her grief, prepared for duty.
For a nation weakened by World II, Elizabeth II brought hopes of renewal. Winston Churchill called it "the new Elizabethan age."
(BEGIN VIDEOCLIP)
RICHARD FITZWILLIAMS, ROYAL COMMENTATOR: I think that this famous phrase was supposed to signify Britain having helped to win the war, reviving and
becoming a country rather akin to its 16th century predecessor the famous Elizabeth I.
[16:50:06] QUEST: The 1950s, an age of austerity. Many food items were still rationed and weakness in Britain's finances was having a severe
impact on Britain's already-diminished empire.
(BEGIN VIDEOCLIP)
FITZWILLIAMS: Much of the empire went before she actually ascended the throne. There is the question undoubtedly of declining military power.
(END VIDEOCLIP)
QUEST: Anti-British feeling was heating up in the Middle East. In 1952 deadly protests erupted in Egypt over Britain's control of the Suez Canal.
And there was an even greater strain on British morale and finances.
(BEGIN VIDEOCLIP)
DWIGHT DAVID EISENHOWER, FORMER U.S. PRESIDENT: With speed and honor I shall go to Korea.
(END VIDEOCLIP)
QUEST: In 1952 as Dwight Eisenhower was elected U.S. president, 100,000 British troops were fighting alongside their U.S. allies in Korea. It was
a war now as old as the queen's reign itself.
June 1953 as the coronation got underway, news reached England that Edmund Hillary and Tenzing Norgay had conquered Mount Everest, one of the great
feats of the 20th century.
Queen Elizabeth, staying the course, came naturally. She had made a promise between God, queen and country.
(BEGIN VIDEOCLIP)
ELIZABETH II: I declare before you all that my whole life, whether it be long or short, shall devoted to your service and to the service of our
Great Imperial Family to which we all belong.
(END VIDEOCLIP)
QUEST: Britain's financial industry has seen a vast revolution in the time that the Queen has been on the throne. I'm joined by Brian Caplen, the
editor of "The Banker," who joins me from London.
Good evening, sir, thank you for being with us. All right, so -
BRIAN CAPLEN, EDITOR, "THE BANKER": Hi, Richard.
QUEST: -- pinstripe suits, umbrellas and bowler hats. Now I'm just about old enough I can remember it, but - and you, sir are just about old enough
that you remember that was the traditional way of the man in the city.
CAPLEN: That's absolutely right. So actually this is a very good topic, Richard, for "The Banker" magazine because "The Banker" magazine and the
Queen are exactly the same age.
We were both created in 1926 and we'll both be 90 next year. But as you say, I mean, when she started to reign and the coronation, the city was a
very sleepy place. It was a sort of gentlemen's club, long lunches, long weekends in the country and it was about who you knew not what you knew.
And since then we've seen, you know, successive waves of deregulation. We saw one in the 1960s when we saw the advent of the Eurobond market when
banks could raise money in any funds internationally in dollars and sterling -
QUEST: And - and -
CAPLEN: -- and we saw the Big Bang in 1986.
QUEST: Right, I was just going to say Big Bang in 1986. That's when the floor of the Exchange - they tried to keep on, they tried to keep it for a
few years - but it soon withered away.
But that's when the floor of Exchange when it became a completely screened based. Did it change the culture?
CAPLEN: Completely, yes. So that's when you basically opened the door to international firms, especially the big American banks came into London.
They were attracted by a level playing field and also a lighter-touch regulation than they had in the U.S.
And all that sort of gentlemanly behavior went out of the door. It was all about shareholder value, it was about big bonuses and it became aggressive.
QUEST: Right.
CAPLEN: So in some ways some of the problems that we had later on were begun in that year.
QUEST: And fascinating because on those problems, the Queen famously - I think when she was visiting the Bank of England I think it was - said
during the Great Financial Crisis - you'll remember the quote better than me. Correct me if I've got it wrong, "Why didn't anybody see this coming?"
or some like that she said.
CAPLEN: Oh absolutely right. And it was a very good question to ask, wasn't it? And we've been asking ourselves in the city many, many times
since then.
But, you know, I think seriously, you know I mean, the regulation - the deregulation - or the liberalization went too far and, you know, the
seeking of shareholder profits became too much and, you know, we've had a massive correction over the years.
But that was not the first black time that we've seen. I mean, you mentioned, you know, six decades of boom and bust. I mean, we had Black
Monday in '87, we had a collapse of bearings in '95, you know, and leading up to the collapse of Lehmans in 2008.
So I think both, yes, --
QUEST: And of course you had the -
CAPLEN: -- both the Queen and the city now they're kind of maturing and they're becoming quieter, a bit more respectable, you see.
QUEST: Quieter and a bit more respectable. Sir, thank you on that note. Quieter and more respectable. And a very happy birthday to you for your
90th. We must come and -
[16:55:10] CAPLEN: Thank you very much.
QUEST: -- we must have you back to celebrate with a cake as we were on. The Queen Elizabeth who has been on the throne for more than 63 years, the
longest-reigning monarch, with major changes in the city of London.
We will have a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." How many of us have ever made a promise or dedicated ourselves to something or actually made a commitment
that we've kept perhaps for more than just a few days, weeks or years.
But that's what Her Majesty Queen Elizabeth II did in the 1950s when she said I dedicate my life, be it long or short, to the service of my people
and the country's involved.
And since that time, Her Majesty has kept her word. Why do I raise that with you tonight? After all, it's a well-known fact, she's been the Queen
for 63 years and so many days - the longest now. Because it speaks to something about dedication, commitment, the ability to make a promise, to
say you'll do something and then you'll do it and keep to it.
In an era where we are so disposable, where Apple TV comes today and goes tomorrow, where the laptop is disposable and the iPhone is changed every
year, how refreshing that somebody like the Queen says I'm going to do it for the rest of my life and that's exactly what she's done.
And that's "Quest Means Business" for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's
profitable. Let's get together tomorrow.
END
