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QUEST MEANS BUSINESS
How to Buy Gold; How Is World Economy?; Polaroid's Last Hurrah
Aired October 9, 2009 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: The end of a golden week. Commodities cool after days on the march.
As the scales tip, the U.S. dollar claws it back on reassurance from the Fed.
Plus, it's more than just cobbling it together, your "World at Work" at the cobblers.
I'm Richard Quest, it may be Friday, but we have time together to do business.
Good evening. The shine may be slipping, the burnish is still bright underneath, in a week where we've seen gold hit record after record, and a trend take hold across the commodity markets, leading commentators say the run is not over yet.
Tonight on this program, what the rally means for the recovery and how it underlines Asia's emerging in the economic world order.
Also, I'll be showing you how one of these gold coins, the value, and why what you may pay may not be what you see in the markets. That is in just a moment.
We're at the end of what has been an extraordinary thing for all things that are bright and shiny. Gold, aluminum, maybe not as shiny, tin, it all made for a fascinating week in the commodity markets.
Now gold rose from $1,000, where we started, to over $1,050. It broke three records across three days, up by more than 4 percent on the week. Now there were a variety of factors. You really can perm (ph) any reason this week.
It could be because oil might no longer be priced in dollars, say some, denied. It could be that there were worries about inflation, denied. It could be simply economic growth, denied. Whatever it was, gold was in play and still is tonight.
Also, copper was another -- was another currency that we saw. That much more in relation to, for example, economic growth in China, deep worries about what might be happening, Australia, China, all of it meant copper went higher.
Tin was in the market news this week. Tin, there was a shortage, a squeeze on the market. Some -- one buyer, whether it was a fund or an individual, we know not yet, more than 90 percent of the physical product was bought by one purchaser.
So all in all, aluminum also another market mover. The three month contract in "aluminium" or aluminum, if that's your taste, up 4 percent, $1,900 a -- a barrel...
QUEST: Nineteen hundred dollars for aluminum. So gold, pretty much everything that was metal moved markets this week. But this is the one that we've all secretly been longing to get our hands on, and for good reason, Steven Flood is director of at GoldCore, international bullion dealers. Steven joins me now.
Good evening to you.
STEVEN FLOOD, DIRECTOR, GOLDCORE: Good evening, Richard.
QUEST: How are you tonight?
QUEST: First of all, thank you for coming in. Now before we get to the shiny stuff on the desk, on the philosophy and on the economics, you heard me sort of going through some reasons. What do you think is the reason why?
FLOOD: Well, I think it's a finite currency, and that's what people - - that's why people are investing in it today. If you could put all of the gold in the world into a 20-meter-high cube, and when you consider that and the backdrop where world central banks are actually printing money with great reckless abandon, they are creating an inflation monster.
So investors are concerned. They're saying, where can we put our money today to secure its buying power into the future, and gold, a finite currency, is the answer.
QUEST: So I mean, we can ramble on at great length about the dollar up, the dollar down, commodities. But you are really going back to some pretty fundamental philosophies, a worry about if things go pear-shaped, you had better have something physical.
FLOOD: Absolutely. The future is unknown. No one knows what is going to happen. So if the future is unknown, it makes sense to have some form of insurance. You should look at gold as a form of financial insurance.
Now we don't advocate you put all of your money into gold, but we do say that in the globalized world that we exist in today, where a lot of our countries' economies are interconnected, and something that happens in China or in Washington can affect us far faster today than any point in our history, allocation of maybe 3 or 10 percent of your portfolio into gold makes sense.
QUEST: OK. Let's talk about gold and how are you getting to it? Because first of all, let's look at this, this marvelous -- this is a straightforward -- I ought to emphasize that this is a -- well, for want of a better word, it's a prop. It's not -- but it's very real to the real thing.
Tell me about this, it says 10 ounces (INAUDIBLE) gold, it has got the number at the at the bottom of purity.
FLOOD: Yes, well, I mean, it's just here for -- just for show, but basically a large...
QUEST: This is how -- this is how banks would buy it.
FLOOD: Well, a little bit bigger than that, they're called 400 ounce gold bars, London Good Delivery Bars. They are held in vaults all around the world. Central banks hold gold, and they do so for a very good reason, it creates a floor for their currencies. The thing that we question right now is China has built up a supply of 2,000 -- or $2 trillion. They have very little gold, only dollars.
QUEST: So if they get -- so if they decide to get into gold, then that will really boost it. But, when banks start dealing with gold between each other, they don't sort of -- I mean, you and I can't go and buy the same gold. You were talking about the chain of integrity.
FLOOD: No, absolutely. I mean, something like this would stay in a vault and the ownership would pass from one party to the next. But investors tend to buy something like investment grade coins like this. They also...
QUEST: (DROPS GOLD)
FLOOD: That's OK.
QUEST: I think I've just (INAUDIBLE).
FLOOD: It's indestructible. Essentially...
QUEST: That's (INAUDIBLE)...
FLOOD: A lot of investors in our company, goldcore.com, would buy what is called Perth Mint Certificates, which are guaranteed by the Western Australian government. The gold is held in their vault, and there is no storage charges at all into the future.
QUEST: So these -- now, all right, let's put this into perspective for you. This is what -- how much was in that weight?
FLOOD: That's one ounce of gold.
QUEST: So that is one ounce, which closed tonight at about...
FLOOD: A thousand and forty-seven.
QUEST: Seven. So you're telling me that this one coin that I'm just (INAUDIBLE) is worth how much?
FLOOD: One thousand and forty-seven dollars. And in 2001 it was worth about $250.
QUEST: That's the point!
FLOOD: Well, this is...
QUEST: That's the point.
FLOOD: Well, you could see, gold, it's a barometer of risk. And you could argue that risk has increased exponentially since 2001. And that's why gold has risen in response.
QUEST: But at $1,040, this could be back at $500 by Easter.
FLOOD: Well, you know what, if you put that 3 percent of that, of gold in your portfolio, you hope the 97 percent actually works and you're getting a return. It's a form of financial (INAUDIBLE).
FLOOD: It takes the volatility out of your portfolio -- or removes it.
QUEST: So why is this one worth so much, which is gold, and this rather motley beast of silver is worth how much?
FLOOD: Seventeen dollars or thereabouts, yes. Yes, I guess...
FLOOD: Well, no, I mean, I think silver is -- it wouldn't have the currency credentials that gold has. But the thing to remember about this one ounce of gold is, in the time of the Romans, this was worth -- this could buy a gentleman one good -- a good suit of clothing. In the time of the Romans, 2,000 years ago, and today, at a $1,000, you could buy a good suit of clothing. It holds its buying power throughout time.
QUEST: But it's not the same quality of gold as might be in a ring or a watch or a pair of earrings.
FLOOD: No, I mean, jewelry is...
QUEST: And people get disappointed.
FLOOD: Absolutely. And jewelry, you pay a huge premium, maybe 300 percent over the spot price for jewelry so it's not to be confused with investments. This is investment grade bullion.
QUEST: You can't bite it. All right. (INAUDIBLE) bite it, look. Thank you -- (INAUDIBLE) don't worry, it's going to go back in your pocket (INAUDIBLE). Thank you very much. This is brass, by the way.
No gold there. Thank you very much, Steven. Have a lovely weekend.
FLOOD: Great to be here.
QUEST: Thank you. Excellent.
Fionnuala Sweeney at the CNN news desk. Now I believe that the medal, of course, that Mr. Obama is going to get is gold. And I suspect it's worth every bit the price of this sort of gold. Tell us about what has happened.
FIONNUALA SWEENEY, CNN INTERNATIONAL ANCHOR: Yes, indeed. And he won't be giving that away, but he has said he will be giving the money -- the prize money to charity. And, yes, of course, you're talking, Richard, about the surprise announcement of the year from Oslo, that President Obama has won the Nobel Peace Prize just nine months into his first term.
The president himself seems just as surprised by the award. Speaking at the White House, Mr. Obama said he didn't deserve to be in the company of past peace prize winners.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I know that throughout history, the Nobel Peace Prize has not just been used to honor specific achievement, it has also been used as a means to give momentum to a set of causes. And that is why I will accept this award as a call to action, a call for all nations to confront the common challenges of the 21st Century.
(END VIDEO CLIP)
SWEENEY: Well, the prize money is worth $1.4 million, and the White House saying that it will be given to charity.
Well, Mr. Obama was far from a frontrunner for the award, and this morning's announcement by the Nobel committee triggered quite a reaction in Oslo.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)
(END VIDEO CLIP)
SWEENEY: Reaction the president's win is pouring in from the Middle East, Europe, and Asia. Some are hailing the committee's decision while others say the award is premature and undeserved. Our correspondents have been hitting the streets.
We begin with Ben Wedeman in Cairo.
BEN WEDEMAN, CNN SENIOR CORRESPONDENT: When Barack Obama came to Cairo in June to address the Muslim world, Egyptians were wildly enthusiastic. Many had fallen in love with the new young American president with the Arabic middle name. Some even took up the slogan "yes, we can."
But that was then and this is now and the love affair is beginning to go sour. One Egyptian analyst I spoke with, who is normally quite well- disposed to the United States, said he was shocked at the news that he had won the Nobel Peace Prize. He said that none of the promises made by the new U.S. president have been achieved. That the Arab-Israeli conflict is, if anything, getting even nastier. In short, he said he has done nothing.
Now Egyptians look at this administration as a work-in-progress. But in a region where war is always looming, where the U.S. often flexes its military might, the feeling among many Egyptians is, it's a bit too early to be handing out the laurels.
Ben Wedeman, CNN, Cairo.
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: I'm Diana Magnay in Berlin.
Now here in Germany, people say there are surprised that President Obama should have been awarded the Nobel Peace Prize at this stage in his presidential career. He is, of course, an extremely popular figure here in Germany. He drew enormous crowds when he came to speak here before he was elected.
And the Germans are very much behind him on such issues as climate change, the closure of Guantanamo, and his attempts to mediate peace in the Middle East.
That said, the presence of German troops in Afghanistan is extremely unpopular, and America and President Obama are very much seen as the leaders of that initiative.
JOHN VAUSE, CNN SENIOR INTERNATIONAL CORRESPONDENT: There has been no official reaction from Beijing, but officials here might just be breathing easy now that the U.S. president has won the Nobel Peace Prize. It has spared them the potential embarrassment of the prize being awarded to a jailed dissident, Hu Jia, who, for the second year running was considered a leading contender who is currently serving three-and-a-half years in jail for subversion.
He was arrested in April last year in what critics describe as a coordinated pre-Olympic crackdown on activists. If Hu had won, he would have been the first citizen of communist China to win the Nobel Peace Prize.
Twenty years ago, the exiled Tibetan spiritual leader, the Dalai Lama, won the peace prize, and back then Beijing was outraged. Now that Mr. Obama has won this award, there could be an expectation that he will push Beijing harder on issues like human rights, greater religious freedoms, and freedom of the press, especially when he meets one-on-one with China's president, Hu Jintao, next month.
John Vause, CNN, Beijing.
SWEENEY: A quick look at some of the other stories in the headlines. A suicide bomber driving a car stuffed with 50 kilograms of explosives struck a crowded market in the northern Pakistani city of Peshawar. The noontime attack killed at least 49 people and wounded more than 130. A government official says it's the deadliest suicide attack ever to hit Peshawar.
They gathered in London 's St. Paul's Cathedral to honor British men and women who served and died in Iraq. Queen Elizabeth joins government and military leaders, plus those who fought in the war and their families. One hundred and seventy-nine Britons have been killed during the six-year war in Iraq.
Rescuers in the Philippines are struggling to clear blocked mountain roadways. The heavy work is giving them access to villages buried by dozens of mudslides. More than 160 people in two northern provinces were killed when rain-soaked mountainsides gave way. The death toll from back- to-back storms that lashed the Philippines has now risen to more than 450.
And what do you get when you slam two spacecraft into the Moon? Not much, at least not yet. The U.S. space agency NASA was hyping the lunar one-two punch saying it expected a spectacular impact and a 10 kilometer high plume of dust. Still, NASA scientists say they have tons of new data. They hope it will tell them about the presence of water on the Moon.
And those are the headlines. Don't forget to tune in for more on the day's biggest stories, "WORLD ONE" at 8:30 p.m. London time, at 9:30 in Central Europe.
Richard, in the meantime, back to you in the studio.
QUEST: "WORLD ONE" with Fionnuala. Many thanks, look forward to that.
Now it might have been a golden week for commodities, the other side of that coin was the U.S. currency. We also had something quite rare these days, intervention by certain countries. What was going on? After the break we'll explain.
QUEST: Welcome back. Let's go to Wall Street, the markets have been open and doing business.
We need to bring you up-to-date with the Dow Jones Industrials up 43 points, 9,829. Fascinating, this, because it seems to be no matter what happens it will not go to 99 and over to 10,000. So there is clearly a psychological -- I don't -- regular viewers here will know, I don't hold a lot of water with this psychological barrier nonsense, but there is something going on that is preventing a market which has risen 40 percent since March (INAUDIBLE) breaking that 10,000. Up half a percent on the Dow Jones.
Investors watching the dollar, which recovered some of its recent losses, some early strength in the tech sector, Apple was up, BlackBerry- maker RIM, Research In Motion was up, good performance in pharmaceutical stocks as well.
It was a flat Friday for the Euro bourses where we saw in London mines squeezed. The commodities coming off the top saw -- they took the wind out of Anglo-American, Xstrata, and Eurasian. In Paris, Alcatel-Lucent, and France Telecom were down. Perhaps no surprise on that one.
BP -- BNP Paribas, German banks felt pressure, Commerzbank, which has a had superb run of recent months and weeks, Deutsche Bank finished lower, Hong Kong's luxury resort company Wynn Macau closed 7 percent higher on its debut. There were solid gains, as you like, as the dollars -- rising dollar gave exporters a break. In Sydney, profit-taking in the mining sector tipped the main index into the red.
Now the dollar is bouncing back the session after the (INAUDIBLE). It has been a fascinating ride for the currency. We've seen it under pressure. We've seen intervention. And we've seen support coming, not only from Ben Bernanke and some rather obscure comments, but also Larry Summers, one of President Obama's top economic advisers also riding to the rescue.
We'll talk with Bob Parker in a second. Let's give you a bit of background. The dollar against the euro is off just 1 percent. So it's not as much as you'd think considering all of the noise and hoopla that we're making about it. A dollar buys you about 68 euro cents. But it's the trend and it's the extent and extremities of it.
Against the yen, virtually unchanged. But remember, against the yen - - a lot of Asian currencies, we saw intervention in Asia, which perhaps may have canceled out some of this. It had been done nearly half a percent against the Japanese yen.
This is what perhaps turned the tide on Friday. Larry Summers was President Obama's adviser, you know, whenever they say a strong dollar is in America's interest, reflect fundamentals, it often sounds like a rote phrase, it is. But it does actually have an effect, as did the words of Ben Bernanke, the chairman of the Fed.
(BEGIN VIDEO CLIP)
BEN BERNANKE, CHAIRMAN, FEDERAL RESERVE BOARD: At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road.
Overall, the Federal Reserve has a wide range of tools for tightening monetary policy when the economic outlook requires us to do so. We will calibrate the timing and pace of any future tightening together with a mix of tools to best foster our dual objectives of maximum employment and price stability.
(END VIDEO CLIP)
QUEST: Ben Bernanke speaking there. Bob Parker is vice chairman of Credit Suisse Asset Management. Bob is with me to make good sense of what is happening.
Bob, first of all, the dollar came under pressure for no obvious reason.
BOB PARKER, VICE CHAIRMAN, CREDIT SUISSE ASSET MANAGEMENT: Well, the dollar has been under pressure for some weeks now. It's under pressure for a number of reasons. First of all, the trade deficit is staying stubbornly high. Today we had the trade deficit number for the month over $30 billion.
QUEST: But exports were up.
PARKER: Exports were up and actually, quite interestingly, the weakness of the dollar is, I think, having a positive impact because German exports, actually, are starting to come off. So that weakness of the dollar against the euro I think is having a good economic impact.
The second reason for the dollar weakness is very low interest rates. And this is why Ben Bernanke's statement I think was very interesting, because he was reminding everybody that at some stage, and I would argue some stage is going to be next summer, interest rates are going to up.
QUEST: So Bernanke's comments, rather than actually trying to raise the dollar, he was trying to put a floor underneath it.
PARKER: Well, I think he was...
QUEST: Along with Larry Summers, as well.
PARKER: Well, also, don't forget, we've had a series of other statements. You've had repeated statements from the European Central Bank that they want a stronger dollar because they don't like the impact of the strong euro on the Euroland economy, which remains very fragile.
QUEST: And this intervention that we suddenly saw from Asian economies, was this a play against the dollar?
PARKER: I think you've actually got a different agenda there, which is, look at the Asian currencies against the Chinese renminbi. The Chinese renminbi has been pegged for some time now against the U.S. dollar at around 6.8.
QUEST: Overvalued, according to some...
QUEST: Oh, undervalued, sorry.
PARKER: Yes. The Chinese renminbi is on our models the most undervalued currency in the world. So the other Asians are obviously protesting the strength of their currency against China.
QUEST: Yes, right. And they're doing that through...
QUEST: Through intervention. But you'd agree, intervention is a sledgehammer tool that we don't often see. So when you saw it this week, it raised eyebrows, even if the extent of intervention wasn't that dramatic, or the amounts involved, but what...
QUEST: It was the mere fact they did it.
PARKER: The fact they did it, I think, was a signal not to the Americans, I think it was a signal to the Chinese.
QUEST: But the Chinese are impervious to (INAUDIBLE)...
PARKER: Well, arguably yes, but having said that, I think the currency to watch in 2010 is going to be the Chinese renminbi. And I think it is inevitable that at some stage we will see a revaluation of China.
QUEST: Right. Let's turn our attention to equities.
QUEST: Or -- and we know economic growth is going to be slow in most countries.
PARKER: Yes, but positive.
QUEST: But positive, right. Well, it should be after the amount of money that has been poured into...
QUEST: ... (INAUDIBLE). There was something seriously wrong with everybody.
QUEST: And we know that is going to take place. We also are now getting warnings about increases -- monetary tightening at some point next year. But we're about to enter the third quarter reporting season.
PARKER: The third-quarter reporting season, I think, will show a continued uplift in corporate earnings. And if you go into 2010, our forecast is that both American and European corporate earnings growth will be at the order of 20 percent.
So this is not just, you know, a one-quarter or two-quarter...
QUEST: Twenty percent over?
PARKER: Over 2009.
QUEST: From a low base.
PARKER: Yes. Albeit from a low base. But that is still a very positive development. And that's why equities will outperform other asset classes next year.
QUEST: If you're right, then that 20 percent gain on earnings justifies the sort of gains that we've seen in markets. It puts concrete under the market.
PARKER: Well, also there are other factors, like the amount of liquidity in the markets, investors are sitting on cash, credit markets remain reasonably robust, underpinning equities.
QUEST: Traffic light.
QUEST: You can take your pick. Would you want to do equities, economies, which would you -- which would you prefer? Which one are you doing today?
PARKER: Well, I actually think we can have a pause in equity markets for the next month or two. So if you like, that's a yellow. But that's taking it one to two months' view.
PARKER: If you want to look longer, let's say 12 months, let's have a green for Asian equities.
QUEST: Green for Asian equities.
PARKER: That's where the next bubble is going to be, probably.
QUEST: You really -- you believe -- oh, then it's red.
PARKER: Well, it depends on how we go. As you build up to the bubble, it's green.
QUEST: It's green. All right. We'll leave it as a green. So Asian equities is where the action is, but it's bubblish.
PARKER: It will be at the end of next year. Certainly not yet.
QUEST: Can we record this and play this back?
QUEST: Bob, many thanks, indeed. Have a lovely weekend.
PARKER: Thank you. Thank you.
QUEST: Thank you very much. Bob Parker, always a treat (INAUDIBLE).
Now for photography purists like my producer, it's a sad day. Smile...
... the much-loved Polaroid is having a last hurrah in London. We'll have a report on that in a moment. QUEST MEANS BUSINESS (INAUDIBLE).
QUEST: Welcome back. Today there was mourning in the photographic world, a kind of. The last batch of the old analogue Polaroid film expired. Polaroid stopped production of the much-loved film last year. Traditionalists fear not, Polaroid art lives on, rejuvenating galleries and cash registers.
The ultimate irony of all of this, when Polaroid came out, they were thought of as being something heinous that would destroy the art. CNN's Jim Boulden.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT (voice-over): It's instant film and the process instantly recognizable to many.
And it has been a medium for artists like Andy Warhol and Robert Mapplethorpe since Polaroid instant film was invented in the late 1940s. Production of the last analogue film ended in June of last year. Friday marked the day that batch officially expired, giving the owner of London's Atlas Gallery an idea.
BEN BURDETT, OWNER, ATLAS GALLERY: It was just a nice idea to have a show of -- a photography show where we're selling unique works, which is obviously unusual in photography because usually you have multiple prints from a negative. But with Polaroids, they are -- each one is a unique work of art.
BOULDEN: Some of the Polaroids here sold within hours of the show opening, including this Warhol.
(on camera): Prices range from around $16,000 for this Andy Warhol self portrait, right down to less than $2,000 for contemporary British artist Marc Quinn.
(voice-over): While it's unlikely these works of art were created after shaking the film, this is exactly what so many of us did with later versions, to the horror of one Polaroid fan.
SHARON KEAN, POLAROID USER: No, you never shake them. Never. Don't listen to that song that tells you to shake them, that's a bad habit.
ANDRE BENJAMIN, MUSICIAN (singing): Shake it like a Polaroid picture.
BOULDEN: Most people can't help themselves, even if they can afford to buy the ever-dwindling supply.
KEAN: As soon as Polaroid said they were going to stop making it, the prices went up and everyone started hoarding it and buying it off eBay. And so I've got a few packets left, but I fear that's kind of the end for me.
BOULDEN: Last year, Italian artist Maurizio Galimberti bought thousands of dollars of Polaroid film in one go. He makes a living taking and manipulating Polaroid photos.
MAURIZIO GALIMBERTI, PHOTOGRAPHER: I hope Polaroid, there is possible production.
BOULDEN (on camera): They may change their mind and...
(voice-over): But fear not, so says gallery own Burdett.
BURDETT: Although today marks the sort of end of one chapter of Polaroid, it's possible, very, very possible, if not likely, and so we will let you know more when we have the information, that the end of the show could well mark the beginning of the next chapter.
BOULDEN: There are sites on the Internet claiming to have nearly cracked the Polaroid process, with promises to start making compatible analogue film in 2010. So shaking Polaroids may not be a thing of the past after all.
Jim Boulden, CNN, London.
QUEST: Oh, absolutely brilliant. I can even remember the days when you had to pull the thing out, never mind the motor that ejected the film. The Polaroid.
Skills that transcend generations, low-tech enjoying a resurgence thanks to a sluggish economy. The "World at Work" at the cobblers.
QUEST: Good evening.
I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN.
On Wall Street, a positive end to the week.
Susan Lisovicz at the New York Stock Exchange -- I thought, Susan, when I heard Ben Bernanke's comments, I saw what was happening to the dollar, you had Alcoa, I thought the market would be a bit strong and more robust than it does appear to be today.
SUSAN LISOVICZ, CNN CORRESPONDENT: Well, that's a good point. You would think so. The gains that we're seeing are modest. And not only that, the volume is so light for this late in the session, Richard, I like it's like a souffle coming out of the oven -- if you move, it will deflate. That's how paper thin it is.
Having said that, look what we have this week. The three major averages up now four out of five days -- the best gains for the Dow since July. Not too bad at all.
And, oh, by the way, Richard, you know this is a very special day on Wall Street. It is an anniversary -- the second anniversary of the Dow closing at its all time high, 14164. Two years ago today, the S&P 500 at its all time high, 1565.
QUEST: So why is the Dow having such difficulty getting that last 150 to 10000?
Susan, let me -- let me nail my colors to the mast. I've never subscribed to psychologically important rubbish. I don't believe in that nonsense. But there seems to be something in it.
LISOVICZ: Well, I agree with you because you and I both covered this 10 years ago when the Dow was trying to breach 10000 for the first time.
Why is it happening now?
Well, I mean, I -- I think it's a far different universe, let's face it. I mean, there are a lot of Edwins (ph), to use -- to use an expression I hear a lot on Wall Street. And I think right now, I think that in the next couple weeks, I think the blue chips could finally get over that hurdle, because we're just in it. We're at a point of discovering a lot about the third quarter and how corporate America fared.
QUEST: Another bauble from the Lisovicz collection, I think. No longer a necklace. We've got the diamonds, the sapphires. Don't zoom in. We'll all get in a bit of trouble if the cameraman zooms in there. But just -- it's a little bauble of gold, I assume.
LISOVICZ: You know, somebody has got to keep the U.S. Economy afloat, Richard. This was one, actually, I purchased a few years ago. So at the time, I was helping to keep the economy afloat. But remember, a diversified portfolio is the best.
QUEST: Yes. It's the first piece of jewelry you've heard -- the first piece of jewelry we've heard from you that you both yourself.
Susan Lisovicz, have a great weekend.
We'll see -- speak to Susan on Monday.
We're making every effort on this program -- you know, the importance. We all go to work. It's an important part of our lives. The World At Work is core to QUEST MEANS BUSINESS -- how you earn and spend your money.
Today, one of our U.S.-based photo journalists, Hota Crowley (ph), ventured inside an American classic -- the shoemaker, better known as the cobbler. The rise of cheap throwaway shoes has cut into the business. Ron Hassell is not ready to give up. This is the cobbler's world of work.
RON HASSELL, COBBLER: I'm a cobbler. People don't know what that is, though. A shoe repair technician, I tell them. I used to be the youngest that I knew of, because when I started when I was 20, it was all old guys doing it. Because I'm close to 50 now, I still probably am one of the youngest around.
I work with my grand -- my grandfather. He did this, oh, I don't know, I'd say 100 years, but not quite.
This is the shoe I don't want to tackle. I tried to talk out of fixing it, believe it or not. It will look brand new when I'm done.
I had this machine take my shirt off one time when I got too close, (INAUDIBLE) grabbed my shirt and pulled the shirt right off of me.
Some guys, they get a favorite pair of shoes -- as you can tell, this guy wore this one to death. They want to keep them at all costs. It's a niche business. I think people who use cobblers use cobblers. People who don't, don't.
It's definitely picked up since last year. Maybe there's more and more people now -- now using cobblers that didn't before because of the economy.
You know, and I thought they were going to come out. The shoe runs about $125, maybe a little more. And for $12.50, you can have new heels put on. I mean you can't throw that shoe away. So it makes economic sense to me. You know what's pretty cool is when the customers actually -- they get pretty happy.
No, they're the same heels that were on there.
UNIDENTIFIED FEMALE: You're beautiful.
HASSELL: That's the same material that we used before.
UNIDENTIFIED FEMALE: As usual, you're beautiful.
HASSELL: You know, you get that all the time and that makes you feel good. We just did the corners for you.
UNIDENTIFIED FEMALE: Right.
HASSELL: Would you like a bag?
You're doing something and you're appreciated.
UNIDENTIFIED FEMALE: Don't go out of business now.
HASSELL: All right, thank you.
UNIDENTIFIED FEMALE: Take care.
Have a good day.
(END VIDEO TAPE)
QUEST: I think I'll take my shoes in there. The last time I had some soles redone, just a couple of weeks ago, it was nearly $50 -- a good pair of English brogues. You wouldn't like to find it on your dinner plate or, indeed, in the (INAUDIBLE). This hair is a big business. In a moment, we'll explain why these humble locks have potential buyers all shook up.
QUEST: The king's hair is up for grabs -- a clump of Elvis Presley's hair -- if you're in the market for such a thing. I'm not sure if you can believe me -- it's on sale, as Jeanne Moos has more of Elvis' jailhouse rock -- I mean, so locks.
JEANNE MOOS, CNN CORRESPONDENT (voice-over): Elvis may have left the building...
MOOS: But he left some hair behind and now you can bid on it. Ask the auctioneer.
(on camera): So what's it like to run your hands through Elvis' hair?
LESLIE HINDMAN, PRESIDENT, LESLIE HINDMAN AUCTIONEERS: It's very exciting, Jeanne. Really exciting.
MOOS: Is it soft?
Is it course?
HINDMAN: It's kind of course. And, you know, he dyed his hair.
MOOS: Dyed or not, he had a great head of hair, be it young Elvis singing his "Heartbreak Hotel" or old Elvis saying aloha from Hawaii.
MOOS: The haircut we all remember came in 1958.
UNIDENTIFIED MALE: Recognize Elvis?
He lost his hair to the Army.
MOOS: Private Presley gave some of that hair to the president of his fan club, Gary Pepper. Pepper had cerebral palsy.
HINDMAN: And Elvis befriended him and kind of took care of him his entire life.
MOOS: Pepper died years ago and now his nurse has put Pepper's collection up for bid at Leslie Hindman Auctioneers. The hair is the highlight.
(on camera): Did you smell it?
Did you smell his hair?
HINDMAN: It doesn't smell like much, Jeanne.
MOOS (voice-over): It's been authenticated by the world's foremost hair collector -- the same man whose clump of Michael Jackson's hair is being turned into carbon and made into diamonds. Yes, that's possible. It was a charred clump of hair picked up and saved after that Pepsi commercial accident, footage of which was obtained by "US Weekly."
(on camera): So how much is a clump of Elvis' hair worth?
Well, on the low end, they're saying maybe $12,000, but they're hoping for over $100,000.
MOOS: "Blue Suede Shoes" may not be up for bid, but other odd Elvis items have been auctioned elsewhere, from prescription pill bottles -- minus the drugs -- to Elvis' American Express card. And hair has been auctioned before. But a hunk of hair like this is rare.
(on camera): Do you comb it?
HINDMAN: No, I don't comb it.
MOOS (voice-over): It's hard to imagine that 51 years after this haircut, treat me nice still applies.
MOOS: Jeanne Moos, CNN, New York.
QUEST: And to think I had a haircut only this week. I could have made rent if I'd collected it.
The weather forecast now if you're traveling -- I am. I'm going down to Delhi on Saturday in India.
Guillermo is at the World Weather Center.
GUILLERMO ARDUINO, CNN METEOROLOGIST: I'm going to tell you what's going on. Also, I'm inviting your viewers again that if they're coming to the States, get ready for winter weather, because we have this arctic air mass that is descending here, along with another low pressure center. And especially in the Midwest here, we're going to see 15 degrees below average all the way to five. And we're talking about Wisconsin very close to Chicago. So Chicago is going to get it, as well. And this is this weekend.
Now, if you are going to other areas of the United States, get ready for the rain. Not that inviting, I think this weekend over here. We have actually flood alerts here, because it's going to rain like crazy. And the moisture is coming from the Gulf, so that's why it's a little bit muggy. And we start here in Missouri; also Arkansas and Kansas. So you see the numbers, they're pretty high, indeed.
And that's going to be (INAUDIBLE).
Now, in England, I was checking what was going on, especially because you see -- well, this is the next 48 hours. So it's going to improve a little bit. But look at the reds in here, especially through London. I couldn't pick up any -- any airport in London reporting rain or thunder right now, but some other -- especially in the southern counties, many cities and in the midlands, as well -- Manchester, or, like they say in the States, Manchester, here in mid-portions of the U.S. -- of the United Kingdom, with some rain. And, also, in Ireland, a lot of rain now is easing.
Now, back to London. We're going to see a better Monday, but temperatures are, indeed, going down. And that's because of that area that we have here that is descending. And it's bringing actually a big change.
Look at Stockholm for tomorrow, Saturday. If you're going to Scandinavia for the weekend, get ready. It's going to be cold. Also, Germany here -- Vienna still in better shape, 21 degrees. Remember, on Thursday we had a record set at 28.5. So conditions are cooling down, but still it's holding up very nicely.
Eighteen in Paris; 25 in Madrid. It rained like crazy but now it appears to be much better.
So back again, you see the low countries (INAUDIBLE) Amsterdam, as well, or in Belgium, the coastal parts, we're going to see some bad weather. But the severest of the storms are going to be in Italy and into the Balkan Peninsula now. So improving for Iberia, finally, and for Portugal, as well. The Bilbisque (ph) here with some clouds, but, again, this is the most dangerous area.
As we go to the east, I have to say that, actually, Turkey and Cypress look fine again. Paris with some rain showers. Brussels, some rain showers. Zurich with some clouds. And Rome, that's where the bad weather is going to be, especially in the north.
So let's see, Turkey looking fine. A great weekend for the south here. Anatolia, for instance; Marmaris (ph); Baldram (ph); all those beautiful resorts and into Cypress and the Middle East looking fine, as well.
The winds are going to stay in the Gulf of Bosnia, all the way up there. Choppy seas in the North Sea, as well. So, again, Scandinavia, the northern parts of Europe are not looking very good.
Well, but in the States so far, the South appears to be OK. The problems are, again, Richard, into the North, the Midwest. But it's going to be good for skiers. You know, Denver or Colorado is getting a lot of snow. That's a good foundation for the ski season.
QUEST: I'm going to India.
All right, Guillermo, many thanks indeed.
QUEST: ...at the World Weather Center.
Now, that's QUEST MEANS BUSINESS.
I'm Richard Quest in London.
I'll be in India next week with the program.
"MARKETPLACE MIDDLE EAST" is next with John Defterios.
Whatever you're up to, I hope it's profitable.
I'll see you next week.