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QUEST MEANS BUSINESS
Markets Up on Views of Recession End; World Bank Reminds not to Forget Africa; Virgin Air Fears Trans-Atlantic Merger Squeeze
Aired September 16, 2009 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ADRIAN FINIGHAN, CNN INTERNATIONAL CORRESPONDENT: Bouncing back, markets take heart as the end of the recession comes into view.
But there is not enough action to help the poor, the World Bank tells CNN that more must be done.
And race-fixing in Formula 1, the scandal that could see Renault banned from the grid.
Hello, I'm Adrian Finighan, in for Richard Quest. This is QUEST MEANS BUSINESS.
Good evening. The policy-makers have spoken, and markets seem to like what they're hearing. Word is that the recovery on the horizon has perked up investors. Even though the effects of the recession are still uncomfortably visible as we head towards next week's G-20 summit, the crucial one in Pittsburgh, we ask, are we now bouncing along the bottom of the downturn and ready to start climbing our way back?
If we check what is happening right now on the Dow Jones Industrials, that's certainly, it seems, the thought on Wall Street. As you can see, the Dow up by some 99 points right now. Let's go live to the New York Stock Exchange, CNN's Susan Lisovicz is there.
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Good afternoon, Adrian.
Well, we are seeing a rally that is gaining traction with less than two hours to go to the closing bell right now. Stocks are higher for a third straight day. Comments from the Federal Reserve Chairman Ben Bernanke on Tuesday helped give this week's gains some momentum.
And we have a few economic reports out today offering actual evidence of recovery. Consumer prices in August rose just under half a percent. That was slightly more than expected, and largely due to higher gas prices during the month.
But overall, prices have fallen 1.5 percent over the last year. So there is still relief for now on the inflation report.
Another report, this one from the Federal Reserve, shows industrial production rose for the second straight month. The 0.8 percent gain better than the Street's estimates. The industry got a lift from an increase in automobile production, results of the U.S. government's very successful "Cash for Clunkers" program.
Factories also boosted production of machinery, food products, clothing, and other goods, so obviously broad-based. The increase in production boosting shares in some major industrial companies in today's session, including General Electric, GE shares, a Dow 30 stock, are up 6 percent.
Alcoa, the big aluminum-maker, up 3.5 percent, another Dow component. So let's take a quick look at the three major averages and see the rally for ourselves. The Dow industrials right now triple-digit gains, up 100 points, or 1 percent. The Nasdaq and broader S&P 500 each at least 1.25 percent.
And, Adrian, all three averages are at their highs for the year -- Adrian.
FINIGHAN: All right. So, Susan, some good news. There is some good news out there about the economy right now. But investors have been warned not to get ahead of themselves. Is nobody worried there that this rally that we've seen over the past six months is perhaps overheated?
LISOVICZ: I think so. I think that has been a debate, frankly, that has been going on for some time, Adrian. But you know, we have had some very encouraging news this week. And I would have to say one of the major headlines of this week so far is consumer spending.
We saw retail sales, even after you strip out auto sales, we saw broad-based gains showing that consumers are actually buying things they don't absolutely need. But even when you -- you know, you respond -- we see these rallies and you see the response to it, just consider this, going into the weekend a year ago that Lehman failed, the Dow Industrials were above 11,000, 11,400. So we're still well off that right now.
We're not even at 10,000 that the Dow first hit 10 years ago. So we have a lot of ground to make up. And, frankly, we have a lot of information that will be coming out now for the remainder of the third quarter, and then of course, that all-important fourth quarter with the holiday shopping season.
FINIGHAN: Absolutely. All right. Susan, many thanks, indeed. Susan Lisovicz live at the New York Stock Exchange.
Well, stock markets here in Europe made their biggest gains in more than a week on hopes that the recession is finally fading away. Encouraging words from Ben Bernanke that Susan was telling us about and others helping to extend the long summer rally even as the autumn leaves begin to fall here in Europe.
Take a look at the DAX in Frankfurt, it's at fresh 11-month highs. Adidas adding 6.8 percent today. Commerzbank up 4.7 percent. Deutsche Bank, 3.5 percent. And Daimler adding nearly 3 percent.
In Paris, the CAC 40 also at an 11-month high, French banks and automakers doing particularly well. SocGen adding 5 points, 7 percent. BNP Paribas, Credit Agricole, and Dexia all up today by about 5 percent. Renault up 5.5 percent, and Peugeot up almost 3 percent, up almost 3.75 percent.
Now here in London the FTSE, its highest close in nearly 12 months, energy and mining stocks performing well, thanks to rising raw materials. Tullow Oil up more than 9 percent today. Eurasia National Resources up 6.5 percent. Randgold up 5 percent too. And clothes retailers Next gained 7 percent on profits. Banks rising too here in London.
HSBC and Lloyds both up more than 4 percent. That rally coming despite grim U.K. unemployment figures, almost 2.5 million people are out of work here in the U.K. Now that's the biggest unemployment total since 1995, another 200,000 people joined the jobless queue in the three months to July. The unemployment rate is now at 7.9 percent here in the U.K.
Now then, stocks got a boost then this session from the world's most eagerly followed investor, Warren Buffett, the so-called "Oracle of Omaha" says that he is putting new money into shares. Now Buffett sat down with Poppy Harlow from cnnmoney.com.
She asked him if he thought the recession was over.
(BEGIN VIDEO CLIP)
WARREN BUFFET, CEO, BERKSHIRE HATHAWAY: I don't know the answer to that. I don't hold myself out as an economic seer or anything. And I don't worry about it too much. I mean, I -- we're buying stocks this morning, I can tell you that. I'm not buying them based on whether we're going to come of the recession in three months or six months or a year, I'm buying them because I think we're getting good value over time.
And I think it's a mistake for investors to focus on business forecasts instead of looking at the intrinsic value of a business.
(END VIDEO CLIP)
FINIGHAN: Well, Buffett said reforming the financial rules will be an important element of the recovery. And he thinks better regulations can make the people who run big institutions run them better.
(BEGIN VIDEO CLIP)
BUFFETT: I think you can change the system in such a way that the people running them run them a lot better. In terms of thinking about the downside and the problems that can be associated with certain kinds of behavior, you can discourage and encourage different types of behavior within those institutions.
I'm not sure you can get rid of the institutions.
(END VIDEO CLIP)
FINIGHAN: Well, joining us now, Stephen Roach, chairman of Morgan Stanley Asia.
Stephen, it's good to see you again. Thanks for being with us on QUEST MEANS BUSINESS.
STEPHEN ROACH, CHAIRMAN, MORGAN STANLEY ASIA: Good to see you, Adrian.
FINIGHAN: Now you said in a recent interview that the U.S. economic recovery will be, quote, "anemic and prone to a relapse." Explain what you meant by that.
ROACH: The biggest piece of the U.S. economy is the overextended American consumer, Adrian. More than 71 percent of the GDP goes to consumption, a record by any standards of the imagination. Yet consumers are short of income. They've suffered massive wealth shocks to property and equities. They're overly indebted.
Their savings are inadequate for their retirement needs. Jobs shock, the unemployment rate 9.7 percent or rising. This sector, in my view, is moving into the early stages of a protracted, multi-year consolidation. That will leave the recovery anemic, lacking the cushion that it needs to withstand the periodic blows that always seem to come. And there could be a relapse in that environment.
FINIGHAN: OK. Well, what happens when the economic stimulus measures that have helped the economy, begin to recover, what happens when they're unwound?
ROACH: Look, this is a patient right now that is on artificial life support. And when you take those life support measures off, again, it just underscores the vulnerability. Look at Japan, you know, 20 years after its big bubbles burst, this economy is going nowhere.
And I think the Japanese experience, sadly, is a rather unfortunate and painful reminder of what could lie ahead for post-bubble crisis-torn America.
FINIGHAN: So what do you make of what we've seen on Wall Street, this buoyant mood that we were talking about with Susan Lisovicz? And has this rally outpaced prospects for growth?
ROACH: Adrian, you know, hope springs eternal in liquidity-driven markets. We've see the biggest liquidity injection in modern world economic history, and that has certainly come against a backdrop of unusually weak economic activity.
So liquidity goes somewhere, it goes to repair balance sheets, but it sloshes back in to asset prices, and we're seeing a huge uplift in asset prices. One or two things are going to happen. The markets will be right and we'll see a vigorous or V-shaped recovery, or the markets will be wrong and the recovery will remain anemic and the markets will correct.
FINIGHAN: Amidst everything that has happened, Stephen, over the past year, you've found time to write a book, you've got it there with you. It's called "The Next Asia." "It's a timely assessment," I'm told, "of Asia's potential to provide a new source of growth for a post-crisis global economy."
What I want to ask you, among all of the questions I could ask you about, about Asia, is a shift eastwards in economic power now inevitable?
ROACH: Look, I think it's going to occur and I think it will be a very exciting development for the world economy and for Asia. But keep the champagne on ice. This has not happened yet. Asia is an export machine that relies heavily on demand in the developed world.
And that demand is under significant pressure because of the U.S. consumer. Asia has got to transform itself to more of an internally driven, consumer-led growth model. And when it does, watch out. But it hasn't happened yet.
FINIGHAN: Stephen, as always, great to talk to you. Many thanks, indeed. And many happy returns. Your birthday, today, I understand.
ROACH: How about that, yes. Thank you very much.
FINIGHAN: Thank you.
ROACH: Well, we appreciate you coming in to talk to us on this day, of all days, many thanks indeed. Stephen Roach, chairman of Morgan Stanley Asia.
FINIGHAN: Right. Time to get you up-to-date with the news headlines, Fionnuala Sweeney joins us live from the London news room.
FIONNUALA SWEENEY, CNN INTERNATIONAL ANCHOR: Adrian, election observers in Afghanistan are questioning about 1.5 million votes in last month's presidential election. An E.U. team says that number, about a quarter of the ballots cast, are suspicious. But President Hamid Karzai calls the finding "irresponsible." Afghan election officials also announced Mr. Karzai got 54 percent of last month's vote. But before results can finalized, the country's election complaints commission must finish investigating voter irregularities.
Are anti-Barack Obama rallies racist? That's the charge by a former U.S. president. Jimmy Carter told NBC News outbursts like Congressman Joe Wilson's "you lie" show many aren't ready to accept an African-American president. Some protesters against health care reform have displayed images like this, portraying Mr. Obama as an African witch doctor.
Investigators in Italy have located a sunken ship that could be leaking toxic waste. A head prosecutor says an informant told police local mafia was hired to dump the vessel and its potentially radioactive cargo. Police are still trying to find out what's inside the barrels on the ship.
And a new political era in Japan, Yukio Hatoyama has been formally named prime minister, overturning the Liberal Democratic Party's five- decade grip on power. The 62-year-old head of the Democratic Party of Japan has named key members of his new cabinet. He says the focus will be on kick-starting the economy. But he also pledges a more independent foreign policy relationship with Washington.
And those are the headlines. Back to you, Adrian, in the studio.
FINIGHAN: Fionnuala, many thanks. We'll be talking a little more about the new government in Japan and its economic policies a little later here on QUEST MEANS BUSINESS.
Calling on the world's wealthy nations, the managing director of the World Bank tells CNN developing countries need more help.
(BEGIN VIDEO CLIP)
DR. NGOZI OKONJO-IWEALA, MANAGAGING DIRECTOR, WORLD BANK: These countries can be part of the solution. They shouldn't just be looked upon as destinations for aid.
(END VIDEO CLIP)
FINIGHAN: Ngozi Okonjo-Iweala, on the economic crisis in the developing world, that's in just a moment. You're with QUEST MEANS BUSINESS.
FINIGHAN: Welcome back to QUEST MEANS BUSINESS. Just before the break, we looked at how stock markets are reacting as evidence of an economic recovery starts to build. Now G-20 ministers will be taking stock of progress when they meet in Pittsburgh next week. Let's take a look at some of the issues that are waiting for them.
Regulation and reform, they want to change the way that banks are regulated, create financial stability, strengthen transparency, and accountability. Now as far as bonuses are concerned, they want to make the financial sector less risky. G-20 ministers meeting in September suggested clawing back bonuses if short-term profits lead to longer-term losses.
It is meant to remove the incentive for bankers to take excessive risks. In 2008, nine of the largest U.S. banks paid $32.6 billion in bonuses, mostly to top executives. Now the G-20 will be looking to stem the jobless surge after the OECD report. The Organization for Economic Cooperation and Development says that job losses will continue even as the recovery continues.
It's predicting that 57 million people will be out of work in its 30- member countries by the second half of next year. The OECD says that the unemployment rate could hit a post-1945 high of 10 percent.
Now Angel Gurria, the secretary-general of the OECD, told CNN what needs to be done to limit the damage.
(BEGIN VIDEO CLIP)
ANGEL GURRIA, SECRETARY-GENERAL, ORGANIZATION FOR ECONOMIC COOPERATION & DEVELOPMENT: Basically coordination, to focus precisely on the jobs crisis, the financial crisis turns to an economic crisis, and it turns into a job crisis.
And we're saying let's focus on the ways in which we can reduce the impact of the crisis on jobs, in which we can protect those that still have a job so that they won't lose it. And those who have lost it, how can we do the best for them in terms of getting them back into jobs by activation policies or retraining programs? And of course, protecting them socially so that they will not suffer in the downturn.
This is not just a question about exit strategies or the recovery of the economies, it has to be focused and directed to the labor market in particular. And maybe an opportunity lies in those big stimulus packages, they can be further addressed towards the question of labor probably they could be a very productive, healthy, short-term impact.
(END VIDEO CLIP)
FINIGHAN: Angel Gurria.
Well, let's introduce you to a woman who is pushing the G-20 to do more for Africa's poorest countries. Ngozi Okonjo-Iweala is managing director of the World Bank. She has also served as finance minister and foreign minister of Nigeria. Her achievements as finance minister earned her international recognition.
She led the team that negotiated the cancellation of $18 billion of Nigeria's external debt. Well, Richard caught up with her and put it to her that the G-20 has already done quite a bit for the developing.
He asked if she is now more relaxed about what needs to be done.
OKONJO-IWEALA: While a lot has been done for many -- for the emerging market countries, not as much has been done for the poorer ones, the low- income countries. And I think that this is where the G-20 will need to pay additional attention, because we're hearing from the leaders of these countries, countries in Africa, and elsewhere that, you know, they are still suffering the impact of this crisis.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: We knew that. So what more do you want them to do?
OKONJO-IWEALA: Well, first, you may know it, but it needs to be acknowledged, because some of these countries have -- you know, their exports are suffering, they have severe shortfalls in revenues. They are experiencing falls in remittances. So what more can they do?
I think the G-20 needs to look at what additional help the countries need to maintain core expenditures. We're talking about 90 million more people that may fall into poverty as a result of this crisis, people living under $1.25 a day.
So what can these countries do to maintain spending on health, to be able to pay their health workers, to pay teachers to stop the roads from deteriorating further.
QUEST: You and I have talked about this before, but I just want to refer -- I mean, if you look at the G-20 communique from finance ministers: "In the period ahead, we need to focus on providing resources to low-income countries to support them."
Again, the G-20, government ministers in April recognized that crisis had a disproportionate impact on vulnerable countries. Are you saying that they're talking but not doing?
OKONJO-IWEALA: Yes. I'm saying that they actually need to do more. And there are some encouraging signs. For instance, there is an initiative in agriculture that was started at the G-8, which should be blessed by the G-20, and resourced so that the $20 billion that was talked about can actually flow to these low income countries to help them cope with this crisis and with the food crisis, which had hit them before this time.
I'm also saying that we should remember that jobs, these countries are losing jobs.
QUEST: But you're putting a lot on the table here, Ngozi. You're putting a lot on the table. You know, is it aid? Is it trade? Is it jobs? Is it more important that the developed world get its act together and gets back to some sustained economic growth?
OKONJO-IWEALA: Richard, it's all of the above. If the developed world gets it act together and recovers, it's also good for the developing countries and for the low-income countries because that means that, you know, the trade will come back.
They will have the ability to sell their exports. And if trade revives, this helps these countries enormously. And at the same time, aid is important. I mean, the countries need to keep the commitments they made earlier.
But private investment also needs to come back. And I say to you this. These developing countries have done well to keep on the reform path even during the time of crisis. They've not fallen away from reform.
In fact, if you look this year, you see that Rwanda, one of the low- income countries, is at the top of the "Doing Business" index.
QUEST: Yes, I saw that. I saw that report.
QUEST: The 2010 report from the World Bank that showed the reduction in trade or in business impediment.
OKONJO-IWEALA: Right. And that is good. I mean, to think that these countries have not fallen away from looking at improving their policies. To think that they still believe in the market as a way of guiding the economy, I think that that is laudable.
Many of them have done the right things.
QUEST: So what is the one thing that you now want G-20 ministers to do? Because you're only going to get one shot at this.
OKONJO-IWEALA: The one thing that I would want them to do is to think of putting additional resources to these four countries so that they can be able to maintain what we call "core expenditures," which is to pay teachers, be able to maintain their payment to teachers so that children can go to school, people can get basic health care. We're saying that.
QUEST: Aid, aid.
OKONJO-IWEALA: No -- in addition, not just aid, in addition. I want to say something important. These countries can be part of the solution. They shouldn't just be looked upon as destination for aid.
What are you going to do in the future? You know, when -- are we still going to expect the U.S. consumer to carry the world? Are we going to expect China to continue being the biggest saver?
You know, we need to develop other centers and poles of growth. And these low income countries and the developing countries as a whole can form important sources of growth.
So, so you need to invest in them, not just because, it's from a humanitarian point of view, but because they can actually contribute to the solution for the world economy.
QUEST: Is now the right time to be investing in them or merely sustaining them? I come back to this point again that unless the developed world gets back on an even keel, you're whistling in the wind for the developing world.
OKONJO-IWEALA: It's not either/or. You need to -- they need to get back on the even keel. But at the same time, they need to be encouraging investment in these countries, because they're part of the solution to the global economy.
We're now in such an integrated world that you can't say, well, let's leave these ones behind and just focus on ourselves. And then when we get back, we will focus on them. I think you have to do both.
I understand that the developed countries have their own constituencies, their own problems, we want them to get better. But at the same time, I think the sums that are needed to get the developing countries also to healing, they're not that significant.
FINIGHAN: Ngozi Okonjo-Iweala, arguing for a fairer share out.
And our next guest would say that he's after the same thing in his fight against the airline giants.
(BEGIN VIDEO CLIP)
SIR RICHARD BRANSON, CHAIRMAN, VIRGIN GROUP: They want to get together so they can crush Virgin Atlantic, and so they can crush the few remaining small competitors.
(END VIDEO CLIP)
FINIGHAN: Find out who Richard Branson thinks is out to get Virgin in just a moment.
FINIGHAN: Now international airlines must wait a little longer to find out if they can form a partnership to boost their profits on trans- Atlantic routes. British Airways, American Airlines, and Iberia are asking the U.S. to give its blessing to a tie-up that would let them operate joint services.
They've asked the U.S. Department of Transport (sic) to give them immunity from prosecution under anti-trust laws. Now U.S. lawmakers were due to discuss the case right about now in Washington. But they've postponed the hearing due to other pressing business.
The airlines are also waiting to find out if European authorities will block the deal. Well, earlier, I spoke to Richard Branson, the founder and president of Virgin Atlantic. Virgin competes with British Airways on trans-Atlantic routes. And Branson is desperate that BA's deal with AA and Iberia to be stopped.
I asked him to spell out why.
BRANSON: If British Airways and American Airlines get together, they will have a stranglehold over travel agents, a stranglehold over corporate. And they will be able to charge what they want, like any monopoly. And they will damage Virgin Atlantic.
I mean, we wouldn't be spending hours and hours trying to stop this if we didn't feel we were going to be damaged. But, you know, what the competition authority should realize is that if Virgin Atlantic are damaged, that's not good for consumers, because I think the very existence of Virgin Atlantic, the last 25 years, have kept British Airways and American Airlines honest across the Atlantic.
FINIGHAN: But since OpenSkies, I mean, surely anyone can compete for slots. It -- and they're open to do it as -- in any which way they can. There have been other alliances that have got anti-trust immunity, so why shouldn't BA-AA?
BRANSON: Well, the difference is that Heathrow is full, and therefore -- and nobody can compete. So, you know, British Airways and American Airlines together will have something like 60 to 75 percent -- actually up to 85 percent of the capacity on a lot of the routes across the Atlantic.
And we cannot get slots there. If we wanted to get a slot to increase the amount of services to Los Angeles or to New York, we just couldn't do that.
FINIGHAN: One of the arguments that BA and AA are putting forward is that they need to get this anti-trust immunity granted to get through what is an incredibly tough economic time. Virgin, I suppose, has an upper hand here being a much smaller outfit. It's much leaner and fitter, perhaps.
BRANSON: It's very easy for two enormously powerful carriers to try to cry poverty to the American and British governments and say, look, this is difficult times, you've got to let the two of us get together.
They want to get together so they can crush Virgin Atlantic, and so they can crush the few remaining small competitors. And you know, there is a considerable danger that if they are allowed together -- to get together, that we will be crushed.
And you know, we can compete on a level playing field. We can't compete when the playing field is on a -- you know, is bat-shaped.
FINIGHAN: Are things still tough economically? Do you sense any -- any improvement in the situation?
BRANSON: Well, it's strange. I mean, in our other businesses, we're finding that, you know, we're doing generally very well. In the airline business, things are very tough, and it's tough for Virgin Atlantic, it's tough for British Airways.
We're not asking governments for favors. We're not asking governments to, you know, let us merge with this airline, or let us merge with that airline for us to survive.
All we're saying is, look, keep a level playing field, we will survive, we will compete, we will offer the consumer a good value for money, but for God's sake, make sure that the same applies to British Airways and American Airlines.
FINIGHAN: Richard Branson. Well, Branson says he has written to President Obama about the row. There has been no definitive response. But Branson says he expects the U.S. Department of Justice to take the issue seriously.
Now imagine this. You've just come through one of the world's best business schools. You've landed a dream job making six figures on Wall Street with a promise of some serious bonuses down the truck. And then it's gone. That's what many of Lehman Brothers' youngest workers faced a year ago. And we'll meet some of them right after this.
FINIGHAN: Welcome back.
Live from London, this is QUEST MEANS BUSINESS on CNN.
In for Richard Quest, I'm Adrian Finighan.
Now, unemployment here in the U.K. is higher than it's been in 14 years. We were talking about that a little earlier on. Nearly two-and-a- half million people are out of work in Britain. That's the most since 1995.
More than 200,000 lost their jobs in the three months to July. And young people have been hit the hardest. Nearly one in five is out of work in the 16 to 24 age group.
Now, the unemployment rate across the country stands at 7.9 percent.
Now, wherever you are, if you're struggling to find a job yourself, all the talk of the recovery that we're hearing at the moment is probably getting pretty hard to take. But some people are showing that there can be life after redundancy, as Christine Romans reports now from New York.
UNIDENTIFIED FEMALE: House lights go. House lights go. House lights go.
CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Mimi Connery traded pinstripes for black leather.
Avi Yashchin went green.
AVI YASHCHIN, FORMER TRADER: Yes, I think it's a good idea.
ROMANS: And Ryan Stroker looked on the sunny side. It's been quite a year for those fired Wall Streeters.
MIMI CONNERY, FORMER INVESTMENT ANALYST: I'm pretty grateful, personally, for these (INAUDIBLE) I had.
ROMANS (on camera): You're grateful for...
CONNERY: Not for...
CONNERY: -- bankruptcy and the market going under and lost jobs, but for the business background.
ROMANS (voice-over): New gig for this former investment banking analyst at Lehman Brothers -- she's on tour with the rock band Third Eye Blind, running the Lead Singer Foundation.
CONNERY: Going on tour with the band was quite an experience. It's not that different than investment banking in terms of hours.
YASHCHIN: We can just do it under us.
ROMANS: Avi once spent long hours trading credit default swaps for Lehman. He now says he felt lost when it crumbled.
YASHCHIN: I immediately started calling my friends, trying to find out what the next big thing is. And -- and everyone said the same thing, you know, green. You have to be in a green industry.
ROMANS: He sees green as a modern day gold rush. He started a company to sell the tools -- training and education to help people get these jobs.
YASHCHIN: You need a bigger box.
ROMANS: And Ryan, a former Merrill Lynch subprime mortgage trader, recently launched a new line of BluBlocker sunglasses with his girlfriend.
RYAN STROKER, FORMER TRADER: This quickly separates the people who had talked about doing something for so long.
ROMANS (on camera): Right.
STROKER: So you quickly find those who actually have taken advantage of that. And that's fun to see.
ROMANS (voice-over): These three all took advantage, taking what they learned on Wall Street, a place they never thought they'd leave.
YASHCHIN: I couldn't sleep for -- for a week when I found out that I got my offer. I was very excited. It was -- it was my -- my dream and my goal.
ROMANS: Hard work and the lure of big money.
STROKER: A guy who was 27 and sat next to me was brought over from Bear Stearns, made 750.
ROMANS (on camera): $750,000 for a bonus?
ROMANS (voice-over): But Wall Street blew up before these three could get that far.
So what have they learned?
CONNERY: That when you go to work, you should actually be passionate about what you're doing and that's not just the day to day tasks. And I think it's important to take a step back and actually see what you're contributing to the world.
ROMANS (on camera): What would Gordon Gekko be doing right now, a year after the collapse of Lehman, I wonder?
Would he be in green technology?
STROKER: He'd be selling BluBlockers along with me.
ROMANS: He would be selling BluBlockers.
YASHCHIN: That's -- that's very possible.
ROMANS (voice-over): Christine Romans, CNN, New York.
(END VIDEO TAPE)
FINIGHAN: All right, let's get you up to date with what else is making news around the world right now.
Fionnuala Sweeney joins us once again with the headlines.
FIONNUALA SWEENEY, CNN CORRESPONDENT: Adrian, heavy rain in Indonesia unleashed deadly flash floods in North Sumatra. Authorities there have recovered the bodies of 11 people since Tuesday. That's when floodwaters as high as two meters uprooted trees and inundated houses in six villages. Environmental activists blame logging for a higher frequency of floods and landslides there.
A Mexican city considered the battleground in the border drug wars hits a grim milestone. Officials in the City of Juarez (ph) says the number of drug-related deaths has reached 1,647 this year. With three months left in 2009, that figure already surpasses the number of murders there last year.
Hundreds of supporters of former Maoist rebels clash with police in Nepal. Several people were injured in the anti-government protests outside a university in Kathmandu. Protesters were beaten with batons after reportedly throwing rocks at the prime minister, attending a graduation ceremony there. The Maoists are demanding the government step down over failure to integrate former rebels into the armed forces.
And do not adjust your sets. That is white milk and not water. Dairy farmers in Belgium sprayed tankers full of the stuff on a field to protest plummeting prices -- three million liters in all -- part of a milk strike across much of Europe to pressure politicians for tougher quotas. Analysts say the protests may lead to higher prices in markets by next week.
And those are the headlines -- back to you, Adrian, in the studio.
FINIGHAN: Fionnuala, many thanks, indeed.
Now, Formula One has suffered another critical blow to its reputation. Flavio Briatore, the boss of the Renault F 1 team and one of the best known figures in motor sports, has left the organization amid allegations of race fixing.
Now, this latest scandal does not bode well for Renault.
As CNN's Justin Armsden reports, the team could face heavy penalties and even be kicked right out of the sport.
JUSTIN ARMSDEN, CNN CORRESPONDENT (voice-over): Formula One's reputation is spinning out of control. The latest and most dramatic twist of the season has seen Renault team boss Flavio Briatore and his engineering off-sider, Pat Symonds quit over race fixing allegations.
The controversy surrounds former driver Nelson Piquest, Jr.'s claims this week that he was asked to crash his car during last year's Singapore Grand Prix in order to help his teammate, Fernando Alonso, win the race. Alonso, a two time world champion, did take the checkered flag. Renault said in a statement Wednesday: "The ING Renault Formula One team will not dispute the recent allegations made by the FIA concerning the 2008 Singapore Grand Prix."
UNIDENTIFIED MALE: Obviously, Formula One has always been a sport where people have bent the rules and -- and sometimes broken them. But to actually physically ask one of your drivers to crash their car is -- I never thought was actually possible. And it appears it is. And, yes, we're all absolutely shocked in the office.
ARMSDEN: Fifty-nine-year-old Briatore joined the fast-paced life of Formula One in 1988. The Italian oversaw Michael Schumacher's world title triumphs in 1994 and '95. He was team principal of Renault when Alonso won his driver's titles in 2005 and '06.
Since then, he has become one of the most high profile figures in the sport.
UNIDENTIFIED MALE: He's a very colorful character. And Formula One needs that. There's -- you know, there's too many people who have -- are sort of like light bulbs -- you -- you slot them in and then they do their job. But Briatore has also been very good at -- for the Formula One Teams Association. He's been a very outspoken voice about what the teams need and want.
And so it is -- it's very sad to lose him.
ARMSDEN: The latest jolt in Formula One's merit comes in one of the most turbulent years in the sport's history. At the start of the season, teams were locked in a dispute over technology used by Brawn GP on its car that took weeks to settle. Then world champion Lewis Hamilton was docked points for not giving stewards a truthful account during a race inquiry.
The sport nearly split in two in June, when the Teams Association and the FIA locked horns over a budget dispute. And just when the season looked set for a dramatic finish to the driver's title, the race fixing controversy blew up.
(on camera): Although Renault won't be contesting the allegation that they asked Piquet, Jr. to crash in Singapore, the team will still face an FIA inquiry in Paris on Monday. The move by Briatore and Simons appears to be aimed at softening the expected penalty that could see the team kicked out of Formula One.
Justin Armsden, CNN.
(END VIDEO TAPE)
FINIGHAN: Now, to another big fish, which also has a big question mark over its future. One of the most popular dishes in Japan could soon be off the menu. We take an inside look at bluefin tuna, when we come back.
FINIGHAN: Welcome back.
The world's second largest economy has a new chief executive. Japan's parliament elected Yukio Hatoyama as the country's new prime minister on Wednesday and nobody underestimates the challenges that he faces, taking the reigns of an economy suffering a 20-year economic slump.
CNN's Morgan Neill has more.
MORGAN NEILL, CNN INTERNATIONAL CORRESPONDENT (voice-over): Japan's Diet has officially elected Yukio Hatoyama, leader of the Democratic Party of Japan, as the country's new prime minister. Mr. Hatoyama's party takes power after more than 50 years of nearly uninterrupted rule of the Liberal Democratic Party.
Diet members met in a special session to elect the new prime minister after outgoing prime minister, Taro Aso, resigned earlier in the day.
Mr. Hatoyama said the challenges ahead were daunting.
YUKIO HATOYAMA, JAPANESE PRIME MINISTER (through translator): I would like to call on the people to be generous with us. This is like entering the unknown and we're stepping into a world we've not experienced before. To create a politics that's truly led by the people and communities, we'll have to use trial and error. We hope that you, the people, can support this new government with patience.
NEILL (on camera): The DPJ won control of the Diet's lower house after an election last month in which they took 308 of 480 seats. Now, many of the new members are serving for the first time. And after such a convincing victory, public expectations are high.
(voice-over): Later in the afternoon, the new prime minister announced the makeup of his cabinet. As finance minister, he named Hirohisa Fujii, who had served in that post in the short-lived coalition government led by the DPJ in 1993 and '94.
As foreign minister, Katsuya Okada, a proponent of a more equal relationship with Japan's ally, the United States.
Now Mr. Hatoyama said he felt excited at the prospect of changing history, but also that he felt the weight of the responsibility that now lay on his shoulders.
Morgan Neill, CNN, Tokyo.
(END VIDEO TAPE)
FINIGHAN: Well, Prime Minister Hatoyama certainly has his work cut out for him in the battle to revive the economy. Japan has pulled out of recession, but economists fear that the recovery will be a weak one, with the potential for a so-called double dip recession. Deflation is a major concern for the incoming government. The Bank of Japan warns that the country faces two more years of falling prices.
Hatoyama's stimulus proposals will be costly at a time when there are fears that the government debt is exploding.
Well, joining me now on the set to discuss the challenges ahead for the new Japanese leader is an old friend of the program, Seijiro Takeshita, a director at Mizuho International.
And you and I -- we were just working it out -- have been talking about Japan's economic woes for much of the last 20 years.
FINIGHAN: Japan, Seijiro, now has a 77-year-old finance minister, albeit a very experienced man. He spent two decades at the Finance Ministry.
Given his age, though, does he have the fresh ideas needed to put the -- the Japan economy back on track?
SEIJIRO TAKESHITA, DIRECTOR, MIZUHO INTERNATIONAL: I think we have to see, however, he does have a lot in his hand. I mean he has such a big homework to do.
One of the attractions of DPJ was basically coming up with all of these wonderful policies, at least in writing. But nobody knew who was going to pick up the tab. And he's the one who's going to have to figure out how they're going to do this. And this is a big question that still is not being answered by DPJ.
The Japanese public did vote for DPJ. But let's not forget that they didn't vote for DPJ, it was a rejection to LDP.
So, basically, a lot of voters out there in Japan, I'm sure, are still looking at DPJ with skeptical eyes.
FINIGHAN: And, of course, he's going to wrest control of the -- the finance ministry away from the bureaucrats...
FINIGHAN: ...which have been in control of it for the last 20 years.
That will be his first big test, won't it?
TAKESHITA: It will be almost an impossible task. It's not only the ministry of finance, but all others. They're coming into this strategic alliance where they're making a department where they're trying to regress the power back to the politicians. That itself is good. Now, let's throw away the vested interests. Let's throw away the waste and let's go for the new Japan -- or the new forward-looking Japan.
But all the implementations of Japanese policies are done by bureaucrats. Without their help, they would not move forward at all.
FINIGHAN: All right. So supposing he does make inroads on -- on the bureaucracy, he manages to get I don't -- I don't know, their cooperation, say, rather than complete control.
Can he get the Japanese economy going again without blowing what is already the largest debt burden in the -- in the industrialized world?
TAKESHITA: That's very true. We already have a large amount of debt. And with our demographics, it certainly doesn't look well in the future, as well.
The problem with DPJ's policy, I think, is, of course, they're coming up with all these stimulus programs. And they're saying this is directly for the individuals.
But what they're forgetting, I think, is that the Japanese individuals do not start spending on the back of cash income. They have to have security on back of them. And to rejuvenate that confidence, what's most important, I think, is to get them back the -- the track of especially the corporations and industries.
So even though it seems indirect, that methodology -- the latter methodology is certainly better for Japan. Because I think DPJ is making a very grave mistake here and they might be spending something at a large amount without much multiplying effect.
FINIGHAN: Yes, they -- they've said that -- that some of the stimulus packages, the measures implemented by the -- the previous administration are wasteful and they're going to reallocate funds. They're going to try to get...
FINIGHAN: And unemployment is a big problem.
But what about the -- the risk of deflation, as well?
I mean wherever you -- wherever it turns, it seems, this new government is staring problems in the face.
TAKESHITA: Well, that's very true. I don't think they can turn the ship around. It is a big ship. And, also, as we talked about the implementation process, it is going to be very difficult for them to turn around this big ship.
So, for the first year, I think we will be facing, with the fear of a deflationary state coming back in, especially toward the end of the year, when we see the private consumption falling down quite severely because of, as you said, our jobless rate rising. And they do have a lot of problems. And also the reputation side, as well. I don't think the formation of the cabinet itself will give a very good nod, especially to the foreigners, especially having names like Mr. Kamei, who had been extremely anti-reform.
But at this point, we need scrap and build reform. We still do. That still hasn't changed. But, unfortunately, I think that may give a very wrong message to the world.
FINIGHAN: And one of the things -- the interesting things that I -- that I saw today was that -- I mean as we previous administrations, the new finance minister today said that he's opposed to -- to government intervention in the -- in the currency market -- well, all well and good -- and that he didn't support a -- a weak yen.
And what happened then?
The -- the yen strengthened today.
TAKESHITA: I think, you know, all these delegates are going to learn how important their words will be. They haven't been in power -- and Mr. Hatoyama already made this mistake himself, by giving some very grave words to the American government now, which he denied later. And now they will have to learn that their words do have a revelation. They are going to be looked at and at -- that's one of the very first learning curves that they have to go through.
FINIGHAN: Seijiro, it's always great to talk to you. It's been too long.
Many, many thanks for coming in tonight.
That's Seijiro Takeshita from Mizuho International.
Now, let's get some weather.
Guillermo Arduino is on duty at the CNN International Weather Center tonight. And we had a nasty day here in London yesterday, but it's OK today. A nice fall day here in London.
GUILLERMO ARDUINO, CNN METEOROLOGIST: Now, I think that it's a little bit of a change. And, also, it's not going to be as bad as we have it in the Pacific, because behind me, I have a super typhoon. You see the menacing eye of the system over there. Of course, the strongest precipitation, the strongest convection, the most intense winds and the stormy weather, in general, is around the eyewall over here. So you see it. It's very clearly defined. It is too close to Japan for comfort, but at the same time, it's moving away from Guam and Saipan.
So let's see the winds -- 259. That's putting it in a Category 5 in the Atlantic. So for you to get -- to get a little bit of perspective. The environment is conducive for a little bit more intensification and then it will start to weaken a little bit. So from super typhoon (INAUDIBLE) one we will still -- we will soon see a typhoon. So and it's going to move in a northward direction. It is getting a little bit closer to Japan. We have Iwo Jima and Hahajima in its way. Updates coming up.
Also, Australia -- look at the winds here in W.A. Coastal parts. In -- in the Southern Hemisphere, what we see right now is the transition into a warmer climate. Contrary to what Adrian is saying that is going on in the Northern Hemisphere -- in the Northern Hemisphere, we see now more autumn like weather conditions. Here, we're going to start seeing spring like weather conditions very soon. September 21st is the official day of the transition into spring.
So back to reality, back to autumn-like conditions, we see these storms that are affecting Italy anywhere from the north into coastal parts, also, all the way up into Southern Germany and Austria, southern parts of France and into the Barcelona area.
But London appears to be OK now for the next two or three days. So if you're going there, it's going to be 21, 22 degrees -- pretty good -- with windy conditions, because we have a high pressure to the north and the low here in the south. That combination is bringing the winds. So choppy seas here for people going from Ostender into Dover or Tale (ph) to Dover, the usual ferry service over there and into the Zut Islands (ph) there in northern parts of Germany, as well.
Let's put all that together and convey airport activity and weather effects on the airport activity. Not much going on. Perhaps it's in Italy, the Baliaracs (ph), where the problems are going to be. Barcelona, there you go, the Mediterranean Sea. Madrid with rain showers. Madrid -- you know, we don't see it so much raining in Madrid often. Vienna with clouds. I told you, Germany -- Austria and Northern Italy is where we have some problems.
But you see the radar -- Britain looking fine. Adrian is with no rain. And the last traffic that I show is the forecast. The clouds are going to be especially in the north.
We'll see you on the other side of the break.
FINIGHAN: Now, for years, Japan has been butting heads with conservationists over whaling. But now it may be on course for another clash.
As Lawrence McGinty reports, it's all about a mismatch between demand and supply of bluefin tuna.
LAWRENCE MCGINTY, CNN CORRESPONDENT (voice-over): It's the most expensive fish in the ocean and the applause that greets the arrival of the bluefin tuna at this Tokyo sushi restaurant explains why. Japan's love affair with the king of sushi's pink and fatty raw flesh has made it an iconic national dish, eaten not just on sunshine days like weddings and birthdays, as it used to be, but almost every day.
These diners told us they eat bluefin twice a week, especially toro, the choicest cut.
The problem is most bluefin tuna eaten in Japan comes from the Mediterranean, and over fishing there means it's a species whose survival is as precarious as the giant panda.
(on camera): This is the delicacy that's creating all the fuss -- bluefin tuna. Eighty percent of the tuna caught in the Mediterranean ends up here in Japan. And some scientists say that population of fish will disappear entirely in the next three years.
(voice-over): Some bluefin does come from Japan's own fishing fleet. This is an auction of Pacific bluefin, frozen at sea, in Yaizu, Japan's second biggest fishing port. These modest sized fish were fetching around 300 pounds each. The record is over 100,000 pounds for one fish.
Pacific bluefin, however, is a separate species. But it, too, is over fished. And now there are calls for bluefin to be listed under the international law that bans trade in endangered species.
(on camera): It seems Japan is once again heading for a major international row on a conservation issue. Britain, France, the United States have all called for a ban on this -- the trade in bluefin tuna. And that could leave Japan's sushi restaurants without their star attraction.
UNIDENTIFIED MALE: Pleased to meet you, sir.
MCGINTY (voice-over): Masayuki Komatsu is Japan's leading fisheries expert. For 13 years as a fishing minister, he defended Japanese whaling.
Now out of government, he, surprisingly, supports a total ban on fishing for Mediterranean bluefin.
PROF. MASAYUKI KOMATSU, FORMER JAPANESE FISHERIES MINISTER: I think a total ban in the Mediterranean, which is a spawning ground, is, you know, one of the biggest, you know, step forward for rebuilding.
MCGINTY: Would that save the species, do you think?
KOMATSU: I hope so. And I expect so.
But it's far better than doing nothing.
MCGINTY (voice-over): There are plenty of other tuna species in the world's oceans. These are yellowfin tuna being unloaded at Yaizu. The numbers of tuna being landed here have declined dramatically and Professor Kamatsu warns that even yellowfin stocks are close to depletion.
But for bluefin, time is running out. Unless rampant over fishing is curbed very soon, these predators of the sea -- the marine equivalents of lions and tigers -- will simply vanish.
Lawrence McGinty, News at 10, Yaizu, Japan.
(END VIDEO TAPE)
FINIGHAN: I don't know, you can't win. Nutritionists tell you to eat more oily fish because it's good for your ticker. It's not so good for the fish, though.
That's it for this edition of QUEST MEANS BUSINESS.
I'm Adrian Finighan in London in for Richard Quest.
Hala Gorani up next at the International Desk.
As the man himself would say, whatever you're up to in the hours ahead, I do hope it's profitable.
See you tomorrow.