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QUEST MEANS BUSINESS
Oil Spill Emergency
Aired April 30, 2010 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, ANCHOR: In the porter, BP facing a huge bill for devastating oil spill in the Gulf of Mexico. The Barclay's Blues, profits up. Investors don't like what they see and Goldman Sach slumps taking a bit more of the shine off the market. We'll explain why.
I'm Richard Quest. It's Friday and I still mean business.
Good evening. Tonight, a massive oil slick is beginning to wash up on the Gulf Coast of the United States. It's threatening catastrophic to the environment and it's getting worse because oil is still gushing from a ruptured at the rate of 5,000 barrels a day. That computes to 200,000 gallons. I had one report suggested that would fill an average family car 20,000 times.
BP, the British company that trades over around the world, which owns the well in the Gulf of Mexico and operated the rig is promising to ramp up preparations for major protection and cleaning effort. The financial cost that's expected to run into billions of dollars, of course, the cost of the environment is less easy to quantify.
Let's get our first report from Louisiana in CNN's Reynolds Wolf.
REYNOLDS WOLF, METEOROLOGIST: A county from Venice, Louisiana where we have been seeing all kinds of activity in the shipping channel, of course, the docks all around us. They've been moving a lot of those mud sea supplies to help stem the flow of that oil throughout the region.
A couple of things they'd been using have been that emergency boom. The protective booms that they have been putting out, 175,000 has already been deployed on parts of Louisiana coast line and points further to the east. They're expecting to move even more.
In fact, up to half a million of it will be moved to help stem the flow of oil coming from parts of the Gulf of Mexico. Places most vulnerable? Right behind me, you see this leads all the way off to some grasses, natural lands, including the Delta National Wildlife Refuge. One of 10 that happened to be in the area, not just here in Louisiana, but also in the Mississippi and those are places that are very vulnerable to the spread of this oil.
You've got over 400 species of animal that could be affected by this oil as it comes closer, moving out of the Gulf of Mexico at a rate around 5,000 barrels per day. Reynolds Wolf, CNN, Venice, Louisiana.
QUEST: And if it continues to leak at the current rate, this spill would certain eclipse the Exxon Valdez disaster in 1989. The tanker ran aground off the coast of Alaska in the Prince William Sound. It's still America's worst spillage to date more than 250,000 barrels of crude escaped into the sea.
Now, David Oesting is a lawyer who led a class action lawsuit against Exxon on behalf of 30,000 people. He won more than $5 billion in damages for his clients and Mr. Oesting joins me now on the line from Anchorage, Alaska.
Mr. Oesting, it's very early days, but already some people are starting to have issued proceedings in the Louisiana case. What would you advise them with your hindsight of an experience?
DAVID OESTING, LAWYER (via telephone): I think the first order of business, given the massive logistical problem they'll face by the numbers of claimants is to organize a unitary legal team as we did in the Exxon litigation to address the over arching conflict if you will between claimants and BP. That would be my first piece of advice because otherwise it will just be (inaudible) a lot of wasted resources.
Secondly, I think they need to look long and hard at the new paradigm or regime that governs oil pollution under the Oil Pollution Act of 1990, which was put in place after the Exxon Valdez oil spill because of the serious deficiencies in the legal system's ability to address an oil spill.
QUEST: But what are the interesting things about - I mean, I actually went to Prince William Sound a few years after Exxon Valdez and I was surprise the share amount of oil even though they said it was inert that was still there. But the legal cases are still (inaudible) even 20 years old.
OESTING: Yes, that's quite correct and that's a clear demonstration of the inadequacy of the court systems and of our legal rules that we're affected that time from clarity and application standpoint that Exxon exploited heavily that lead to (inaudible). That in fact that it was begged off for that period, simply informs us that the system was not in any way shaped or formed capable of efficiently handling the aftermath a natural disaster like --- of an oil spill disaster like this.
QUEST: When does - in this sort of spill that we're now seeing, would you expect and I know it's very early days and forgive the speculative nature of the question, sir, but would you expect this case and this claim to be on (inaudible) not bigger than Valdez?
OESTING: Well, yes, and I think the principle reason for that is that I think the natural resource damages will be substantially less because you're not covering 600 miles of shoreline at least not yet, and we had 1,200 miles oiled. But I think the population density and the business and human activity intensity in that region is vastly, vastly greater than Alaska, which is quite (inaudible).
QUEST: So to bring that full circle sir, can you imagine that the people down in Louisiana frankly have got - with your hindsight of experience have got no idea really what they are about to face either environmentally, commercially and certainly legally.
OESTING: I think that is absolutely true. They haven't even seen the tip of the iceberg yet.
QUEST: David Oesting, let me give you an invitation (inaudible) gets way through, we hope you'll come back on our program and help us understand the ratifications. Many thanks for joining us on the line from Alaska.
OESTING: My pleasure.
QUEST: Thank you, David. Now, Jim Boulden is with me. Jim, I can see you. You just David Oesting saying quite clearly and quite categorically there is - they don't know what they're getting themselves into -
JIM BOULDEN: It's called the Oil Pollution Act of 1990 and that's exactly what our guest was just speaking about. That changes this paradigm completely from what happened with the Exxon Valdez because BP is responsible - BP and its partners for the full cost of the clean up. That includes whatever the U.S. government has to do this, whatever the U.S. states have to do.
So it's a very different paradigm here. Now, earlier today the CEO of BP said that they would cover the cost and they would be very aggressive about covering the cost. So they've come in very quickly to say that they will be doing this. Now, let's go back and remember the Exxon Valdez. I've seen a lot of different numbers on what this (inaudible) Exxon.
But from Exxon itself, they say the total cost to them just under $4 billion that's $3.8 billion cost in total. That includes everything. That includes fines. That includes more than $2 billion for clean up. That includes $900 million trust fund. That's still putting money out and spending money for the people who face some of the damages. Now let's look at what I call - this is called MC252. That's the name of the well. That's where the oil leak is and that's the name you'll be hearing more and more of, MC252.
BP and its partners say, it's costing them $6 million a day, the cleanup cost right now, BP owns 65 percent of this well. Let's see how that's been affecting the stock markets. BP shares down 8 percent this week. Now, they're down heavily yesterday. The worst one day fall for BP in 16 months, however they had not such a bad day yesterday or today, down 12 percent since this leak was first announced.
BP profits though the first quarter this year, very important to notice, $5.5 billion and Richard, I wanted to say that the Exxon Mobile made more money in the first quarter this year and gave more money back to shareholders the first quarter of this than it paid out for the entire Maldives disaster.
QUEST: OK, Jim, it raises the question, two brief questions. First of all, even with these numbers, can BP afford it?
BOULDEN: Yes, absolutely. They had $7 billion in cash from operations that went into the bank the first quarter of this year. So you're talking about a company that made $5.5 billion in profits, $7 billion in the bank, and I think it was $26 billion last year went in the bank.
QUEST: And the second question, of course, is the reputational crisis that cannot be quantified in quite the same way as dollars in the bank.
BOULDEN: You remember the Texas City Oil Refinery fire 2005. A number of employees were killed. A lot of lawsuits. It got very nasty. Some people say that was part of the reason why (Lord) Browne lost his job at the end of the day as a CEO of BP. Tony Hayward, the new CEO came in and said he was going to clean up the act in the U.S.
QUEST: One final - quick question. This is more complicated not just BP because they were the operators of this rig, somebody else owns it so another legal mess.
BOULDEN: You've got (Holly Burton) who they say was impossibly dealing with the (inaudible) of this well. You've got the company that owns the rig that sank. You got BP and its other partners because you know in the oil business, you get together with the competitors - because these wells are very risky. This was an exploration well and so they try to share the cost.
QUEST: Jim Boulden. Many thanks. We'll watch this in the days and weeks ahead. We're going to carry on Quest Means Business at the end of the week.
The quarterly earning season is taking a pretty distinct shape by now. The Q-25 probably the best way for you and I to understand what these earnings means. We'll wrap up the week in just a moment.
QUEST: Good evening. Quest Means Business. The news headlines now, Becky Anderson. Good evening, Becky at the desk.
BECKY ANDERSON: Good evening to you. China's state run news agency is reporting yet another attack on school children in the country. In the city of Weifang, police say a man injured five children with a hammer before setting himself on fire. This follows at least three similar attacks in China recently including last month's rampage in which a former doctor stabs and killed eight elementary school children.
Leaders of Thailand's Red Shirts are apologizing after some of the antigovernment protesters stormed a busy hospital in Bangkok. They were searching for security personnel. They've suspected to have taking up positions overlooking the Red Shirt barricades. Now, patients were evacuated and routine surgeries suspended, but no government forces were reported inside the hospital.
The race to (inaudible) is entering the homestretch. The majority of polls following Thursday's final debates gave the win to the Opposition Leader David Cameron. According to (inaudible) poll, 35 percent of viewers support the Conservative Party leader, 29 percent siding with the Labor Prime Minister Gordon Brown and 27 percent say Liberal Democrat Nick Clegg won the last debate.
New opposition to a Belgian (villain), it's banning Burqa- type clothing in public. Belgium's Muslim Council and Amnesty International condemned the proposal and the decision by the country's House of Representatives to support it. Proponents argue that the clothing is a security threat and that everyone in public must be recognizable. The bill now moves to the Senate.
Those are the news this hour, all the headlines. Richard, back to you.
QUEST: Have a good weekend, Becky. See you next week.
The U.S. economy kept growing at a steady pace in the first three months of this year. The Commerce Department said GDP rose at an annual 3.2 percent. That was pretty much as expected. Not as strong as the previous quarter with its rate of 5.6 percent. That's three straight quarters of economic growth for the U.S. economy, and you get a chance to see the numbers as a foot forward.
A separate report that Americans understand that recovery is underway, but it's going to be slow. The Consumer Sentiment Index from Reuters and the University of Michigan fell slightly this month, but significantly more than it was a year ago.
It's the end of the week and our last look at the Q-25. Now, you know the Q-25 and you know how it works. There's Maggie Lake in New York (inaudible) herself and getting ready, but Maggie, I'm just putting - and this shows where we stand so far.
The green is vast. Nothing we do tonight can really affect the overall outcome, but it can affect, of course, the perception. So where you would like to start.
MAGGIE LAKE: Why do we start with Chevron. Another big energy name out. Of course, a lot of us are focused on the spill in the gulf, but investors are looking at the earnings and they look good for Chevron. This is definitely going to be a green balloon, Richard. Profits doubled. They beat expectations and we talked a little bit about this with one of our other energy names.
I think it was Exxon. The weakness in refining, but in Chevron's case, the oil and gas investments, the investments in what they call upstream and production more than offset that weakness in refining. So they had a very nice report, green balloon.
QUEST: You don't tinge that green with anything because of offshore or anything to do with what we might be seeing as a result of Louisiana?
LAKE: Yes, that's a very, very good question. I think it's a little bit too far out in terms of the recovery story that we're trying to talk with the Q-25, certainly everyone in the energy sector saying, this is going to halt all those plans for the moment until everyone regroups and get the chance to look at it. So it is a risk, good point.
QUEST: Next is - let's do MetLife, and MetLife, what you believe MetLife should be showing us tonight.
LAKE: Yes, MetLife - when we think of MetLife as the insurance company. They've got the peanuts as their representative. Don't kid yourself though. These are all complex financial companies. Having said that, they did really well, sixfold jump in operating profits. That's quite extraordinary.
What's driving it? The credit market thaw. It's helping their investment portfolio and to underscore what I'm talking about like you know, why would a life insurance company - why would the credit market matter to them?
In particular, let's focus on one little (inaudible). The commercial real estate markets are looking for a rebound there. They've got $35 billion in commercial real estate bond and other 16 in mortgage back assets so these are financial companies. They're benefiting from the improved financial markets, Richard.
QUEST: We give them a green? But the balloons are getting a little bit falling there. I'm going to quickly give to Total a red balloon. A general feeling on Total. There was an earnings rise of some 14 percent, but the results are lagging behind Pears especially on the question of return to growth so that one gets a red and Barclays. Dear old Barclays, well, what you think on Barclays?
I mean, when I heard Barclay's results this morning on the radio, it sounded like a gangbuster's go ahead, they're going to get a green, but as the day wore on and the market gave their results and then investment numbers didn't look (good), what did you think?
LAKE: Richard, I think Barclay's is a good example of what's happening here and you see the light revenue is the problem, and maybe the surest sign that we've sort of turned the corner from when we first started this Q-25. The bar is being raise. You can't just sort of beat the estimate, beat what you did a year ago. Barclay's, a lot of their competition came out with very good looking numbers.
So if you have some weakness, you're not going to stock up and you're going to fall short.
QUEST: And so Barclay's with its share price down to 6 percent. One of the largest losers on the FTSE today gets a red, and Maggie, we've now got the Q-25. I think it's Q-24 because of Felicia Taylor's rather annoying yellow that she insisted that we put in, and we put back the green yesterday.
But - what is it? Pull (inaudible) together for me what does it tell us as well look at that.
QUEST: I think you have to say for all the concerns - the fact that maybe uneven, we're really looking at a recovery story here. Corporate - all that downsizing, the restructuring is really paying off and corporate balance sheets are benefiting. The question is when is they are going to translate to Main Street, right?
When a personal finance is going to catch up? That's the equation that we don't know about yet, but on the corporate side, we're certainly looking on recovery.
QUEST: Maggie Lake, is it worth during the Q-25 next quarter, that's not a question for you or for me, it's a question for you, email@example.com@richardquest. We'll post that question. Do you want us to do the Q-25 next quarter round? Maggie Lake in New York. Have a lovely weekend.
As we continue on this program, Greece never wanted to hold out a begging (inaudible). Now, that it have, getting a hand look certain (inaudible) a few sacrifices. The future promises and the start of existence. We'll live in Athens.
QUEST: Greece is within touching distance of the cash it needs to remain solvent making the final steps is no easy matter. (Inaudible) Athens and now up to $160 billion in emergency loans is a clear commitment to further government spending cuts, austerity is the word.
The program must be agreed on before Greece gets the cash and its bound to inflict new hardship on an already disgruntled nation. CNN's correspondent, Diana Magnay is in Athens where the negotiations take place and where the deal is taking shape.
DIANA MAGNAY: Hi, Richard. Well, the Greek prime minister is trying as hard as he can even before those austerity measures are announced to shell the package to the Greek nation. He said today in parliament that it should be considered a national duty to implement these financial measures for the future of the whole country. He said that they were the most important fiscal measures and a huge - largest fiscal measures that Greece had ever had to take.
But the people that we've spoken to are extremely worried about what exactly the impact of these measures would be on their lives.
MAGNAY (voice-over): The Greece's debt is rated as junk by the international financial market. It doesn't mean much to Nicos who makes a living collecting junk of Athens' streets. But his country's debt problems have already (inaudible) a 12 percent cut in benefit as Greece moves to (inaudible) spending and he is worried what new austerity measures might mean in the years to come.
UNIDENTIFIED MALE (through translator): I've been working for 40 years already and I was hoping I'd be getting a pension (inaudible). If I have to work another 18, I can't take that because I'm on my feet all day.
MAGNAY: In Greece, many public sector workers retire at 60 earlier than some other European countries. Nicos thinks that's fair enough.
UNIDENTIFIED MALE (through translator): If only Greece was like the rest of Europe, I collect a ton of rubbish every day. I went to Germany. I couldn't even see a piece on the ground. I work all day. People here just don't understand how difficult it is.
MAGNAY: Things are difficult for (Sarkis Grasas) too. The furniture repair business he owns with his brother was their father's before them. They're hoping to pass it on to (Sarkis') nephews (Spirov) if it survives the crisis.
UNIDENTIFIED MALE: We like to work, but we have not work. We do not have customers. We have not orders. We have not anything.
MAGNAY: (Grasas) has already cut his workforce by half since the Greek financial crisis took hold. Next month, he'll ask the four who are left to work one day less each week. He says the Greek government needs more than a short term fix.
UNIDENTIFIED MALE: There's not a solution that European has to give us some money. Some money does to pay the problem of Greece is the people who is working for governments, for mayors.
MAGNAY: The Greek government is trying to back pedal fast to pull the country out of its debt crisis.
MAGNAY: Richard, we are expecting to hear that austerity package announced this coming Sunday. From people that we have spoken to have been (inaudible) to those talks (inaudible). They do not include the kind of structural reforms that we were hearing were required from people in Greece. It will be measures cutting the public sector, cutting things like taxes, affecting also salaries, pension, benefit within the private sector, but only reforms that will tie Greece over and after that structural reforms will have to implemented. That's what we've been hearing from people close to the talks - Richard.
QUEST: Diana Magnay reporting for us live tonight from Athens.
One man who has a thorough understanding of the problems now facing Greece is the former Finance Minister, George Alogoskoufis. Some people even say he was one of the men who cause them. After all, he held the country's (inaudible) between 2004 and 2009 and it seems a lot of mistakes were made or at least at the most charitable definition, things weren't put right.
I asked him whether it was fair that he should take part of the blame?
GEORGE ALOGOSKOUFIS, GREEK FINANCE MINISTER, 2004-09: No, that's fair because actually when - I will take my part of the blame because everybody who has govern Greece for the last 30 years has some blame for what has happened. Others because they increase the debt. Others because they did not do enough to reduce it. Others because they suffered deficits, et cetera.
But what happened in Greece between 2004 and 2008 when I was the finance minister essentially was two periods. Before crisis, when Greece was doing really well. It was reducing its deficits. Growth was very fast and then there was a period after the crisis when Greece suffered like every other European Union and world economy.
QUEST: So what should you have done that you didn't do?
ALOGOSKOUFIS: I think what should have been done was after 2008, when we could see the crisis coming, Greece should forget about growth, should forget about recovery and -
QUEST: Between `04 and `08, why did you lose control of government spending?
ALOGOSKOUFIS: No, between '04 and '08, we reduced deficits from 8 percent in 2004 to something like 3 percent in 2007. But that was not enough because Greece was burdened by a very high debt even from the `80s.
QUEST: (Inaudible) pretty sad the current situation and the way -
ALOGOSKOUFIS: It does and I think that, you know, everybody must take their part of the blame, but now we should look forward, learn from our mistakes. Now there is a situation of crisis, which is understood by the Greek people.
QUEST: Is it? Is it?
QUEST: No, no, I don't agree. If it's understood by the Greek people, why are they protesting?
ALOGOSKOUFIS: Well, it's normal to protest. Nobody wants to see their living standards -
QUEST: But it is not protesting that's causing the crisis of confidence because the market doesn't believe that any form of austerity measures can be put in place.
ALOGOSKOUFIS: I don't think so. I think that the - because I have a lot of experience now in Greece and I think that compared to the past, people now realized that we are in crisis. They're prepared - of course, there will be minorities and even majorities that will be protesting, but the great majority of Greeks understand that we have to do something and probably our living standards have to go down for some time before we go back on the road to prosperity.
QUEST: We'll keep following that story in Greece. When we return in just a moment, Fiorena the former head of HP will be joining us. Now, a perspective politician hoping to be senator for California (inaudible) after the break.
QUEST: Hello. I'm Richard Quest. Quest Means Business. This is CNN. Our top story tonight, of course, is the oil spill off the Gulf Coast in the United States. Richard Lui joins me from Dauphin Island off the coast of Alabama, and Richard, the first question of course, the oil is catching closer and it seems to be inevitable that there will be serious damages. Is that your understanding there tonight?
RICHARD LUI, CNN CORRESPONDENT: That is what we are hearing right now. In fact, we're just looking at one of the deployment points, just about 200 yards to my right, where they were putting together some of the booms or continuing to do to try to mitigate some of the potential damage coming from that oil spill, which is hundreds of square miles by many estimations.
And one of the results of that potential damage, as that oil slick gets closer to the coast, even here in Alabama, but all across the Gulf Coast is because, of course, the impact on small businesses. They depend on the product that comes from the Gulf Coast -- shrimp, oysters.
And when we talk about oysters, what we thought we'd do is go down and take a look at one business. And that one business that we're going to be looking at is Linski's Oyster House (ph). Where we were there at Linski's Oyster House, what we found was that, you know, they -- the last time, when Hurricane Katrina came through, they had a drop of about 30 percent in the availability of oysters. And this time, it could be much, much worse.
But aside from small businesses here, Richard, there's also the concern of a way of life, what you're used to doing each and every day as you get up.
We spoke with one gentleman.
His name is Michael Wallace.
And what he told me is that he's going to have to reconsider his future, his lifestyle, if things come to pass in the next couple of days.
This is what he told me.
(BEGIN VIDEO CLIP)
LUI: What does fishing mean to you?
MICHAEL WALLACE, FISHERMAN: It means a lot. I've been doing this for a lot of years. You know, my grandparents taught -- taught me to fish and stuff like that. And -- and this is what I do.
You know, I love to do it, you know?
And to take this from me, it's just like, you know, not having anything, because this is all I do is fish.
LUI: It's not like having anything?
WALLACE: Not like having anything.
(END VIDEO CLIP)
LUI: That's all he does, Richard. He does it eight hours a day. He does it seven days a week. He catches 80 to 100 feet -- 80 to 100 fish. And he takes them home, he puts them in the freezer, he gives them away to family, he gives them away to those who don't have enough money to buy fish.
But this is the way of life that he has. And interestingly, enough, where he's fishing right there is right in the shadow of what could be one of the oldest rigs in Alabama, on the right hand side there. And that is a gas rig. And you see many of those off the coast of Alabama here in Dauphin Island -- Richard, that's what we're seeing right here.
Back to you.
QUEST: Thank you.
Richard Lui, who's in Alabama.
And, please, as this crisis progresses, Richard, you and I will talk next week and we want to get to the bottom, of course, and see the real effect of what's taking place.
Other news now. Goldman Sachs is losing a little more of its luster with every passing day. That's the stock market view. Investors are offloading Goldman hand over fist. Media reports says there's now an ongoing criminal investigation into the bank. Wall Street's most profitable firm is already facing civil charges from the SEC of defrauding investors in a mortgage-linked product. That, of course, Abacus ACI.
The shares are now down some 9 percent. The total value of market share has plunged by $20 billion in the past two weeks. And that's the problems facing Goldman Sachs.
Let's talk to somebody now who knows about the questions and the tough times in leadership.
Carly Fiorina led Hewlett Packard when the dot-com bubble burst.
She's the former chairman and CEO of HP and is the only woman to date ever to lead a Fortune 20 company.
Ms. Fiorina has got her eye on the U.S. Senate.
And she joins me now from Washington.
Carly, many thanks for -- for joining us tonight.
There's a lot we need to talk about, but particularly on leadership questions.
Let's first of all begin with the oil spill in Louisiana.
We know that there will potentially be a ban on future oil -- new offshore drilling until this -- they work out what was the cause of this.
Is this something you support?
CARLY FIORINA, REPUBLICAN SENATE CANDIDATE, CALIFORNIA: I do not support a ban on offshore drilling. Look, this is a tragedy that's going on here. It's an economic tragedy for people such as you just interviewed on your show. It's certainly an environmental tragedy. It is also true that there have been a great deal of offshore drilling that has continued in an environmentally responsible way.
And so while I believe it's critically important that we get to the absolute bottom of what happened here and pass regulation, if necessary, to ensure that it never happens again, I think it would be a gross over reaction to say let's ban offshore drilling, let's suspected offshore drilling until we understand what happened here.
And I hope that people will not turn this into a political football.
QUEST: It's inevitability going to become a political football, isn't it?
Mid-terms that you're hoping to fight -- fight in. You have a -- an environmental disaster literally about to take place.
FIORINA: Well, look, I think it's vitally important that we strike the right balance between protecting our environment and protecting our economy. Both of those goals are equally important. And there are ways to achieve both. And while this accident is a terrible thing, it ought not to throw us off from the reality that we need, in the United States, to produce more of our own energy to fuel job growth and to lessen our dependence on foreign oil.
QUEST: Let's talk Goldman Sachs and financial regulation. It's -- I think you Americans have a wonderful phrase, shooting fish in a barrel, when, you know -- and, at the moment, with Goldman Sachs on Capitol Hill doing the fairly poor job that they did, it's quite easy to make the case for future regulation, isn't it?
FIORINA: Well, unfortunately, it's a little too easy. But let's look at the facts.
The facts are that there was an insufficient transparency and accountability leading up to the crisis and Wall Street is certainly culpable. And I have not defended them in any way. In fact, I have said that any institution that takes American taxpayer money ought to tender the resignation of its CEO and its entire board immediately.
It is also true, however, that we had 20 plus agencies who were responsible for...
FIORINA: -- predicting this kind of thing and preventing this kind of thing. And when taxpayers find out that we had an SEC official who makes $225,000 a year and is watching porn eight hours a day...
FIORINA: -- at their expense, they get a little upset.
FIORINA: Nothing in this bill deals with those 20 agencies and nothing in this bill deals with Fannie or Freddie, who were also a huge part of this problem and who own...
FIORINA: -- over half the mortgages in this country and are in conservatorship.
QUEST: Would you -- because we've been talking a lot in Europe about bankers' bonuses, bankers' levies, actually doing something.
As a leadership question, would you tax banks more and would you do something to prevent the bonus culture?
FIORINA: As a leader, what I have called for consistently and what I did as a CEO is to put CEO pay up for shareholder vote each and every year, ahead of time, not after the fact. I don't believe the government should be setting CEO pay. I don't believe regulations should cap CEO pay.
But I do believe that the owners of a company, the owners of every company, ought to determine what a CEO is paid and that there should be no surprises. All aspects of a CEO's pay ought to be voted on by shareholders...
QUEST: All right...
FIORINA: -- each and every year.
QUEST: Finally, you -- did -- the discrepancy between running a major company and standing and -- and grubbing for votes or asking for votes are...
QUEST: -- are
QUEST: -- well, to use a -- are you looking forward to it?
Are you enjoying, basically, being vox populi, voice of the people?
FIORINA: Well, first, there aren't as many discrepancies as you might think. You will recall that when I acquired Compaq, we went through a major proxy battle. And that required me to get shareholders' votes. Of course, there are some obvious differences.
But look, business is a team sport. Politics is a team sport. Politics is all about reaching out and communicating with people. That's what business leadership is about...
QUEST: All right...
FIORINA: -- too, at its best. But, yes, I'm enjoying it very much. California is going through very, very tough times. We have unemployment rates of 12.6 percent. We have eight counties with unemployment rates above 20 percent. Our government is out of control. And what voters in California are looking for now is not the usual professional politician, but maybe a citizen -- that's what by, for and of the people means in our constitution...
QUEST: All right...
FIORINA: -- maybe a citizen who knows how to create jobs.
QUEST: In a word, a yes or a no, would you have bought Palm, as HP did this week, or is that an unfair question?
FIORINA: It's an unfair question. I'm not there anymore. But I will say this, thank goodness that HP acquired Compaq. And thank goodness that that merger was successfully executed, because it is a company of great strength...
FIORINA: -- that can choose its acquisition targets.
QUEST: Carly, please come back and help us talk about these leadership issues in the future.
Lovely to have you on the program this evening.
Carly Fiorina joining me there from Washington.
We'll have the weather after the break.
This is CNN, QUEST MEANS BUSINESS.
QUEST: What about the wind and which way it is blowing in the Gulf of Mexico?
Guillermo is at the World Weather Center tonight to bring us up to date.
GUILLERMO ARDUINO, CNN METEOROLOGIST: It is blowing toward the coast, unfortunately. We forecast this. We knew it was going to happen. We were happy when it was not happening. Now it is happening. And, also, the other complication is that the wind is blowing quite strongly. So we have like 55 kilometers per hour right now that the wind speed. And that is pushing, at least on the surface, the oil slick closer to the coast.
Remember that we have not only the state of Louisiana compromised in this case,. You're going to see where the other states are. The oil slick then getting closer there, because of the wind direction. At the same time, the currents are pushing that stain, let's call it, toward the coast.
Well, what other states?
We have Louisiana here, of course; then Mississippi; Alabama; and Florida. Georgia is up here, but it doesn't have a coast here on the Gulf of Mexico.
And here you see a progression of the days now -- Saturday, then Sunday and Monday.
Now, concerning the -- the lifespan of these winds in the area, we're expecting at least 24 hours at the same rate, 55 kilometers per hour, in the same direction. So we need to see any significant change, unfortunately, in the coming hours.
And this -- these are the variables that we have to take into account -- the type of oil and also it's a very thin layer on top. That's why it's easier to contain in some aspects and some areas; then the location, of course; the species that are being affected in the area; and the weather, both at sea and the ocean currents.
Now, if you're watching from Europe, I'm going to tell you, I see a little bit of a change, especially for the west now. We see how systems come and go. The weekend is going to be extremely rainy in London, I think. Saturday and Sunday will be two days, along with this low pressure center, very rainy conditions, the northern parts of France and into Germany later on, as well.
Remember that we were enjoying nice conditions?
Well, those nice conditions are shifting now into the Balkan Peninsula and the Black Sea and Turkey. And that low -- that high, then, is moving away. And it's allowing the system -- the low pressure centers under the storms to go down and to descend into other parts of Europe that were OK before.
Along with it, we will see the winds, especially, Saturday and Sunday. You will notice in London the rain showers and at the same time the windy conditions.
Amsterdam, no doubt, is going to see some rain showers. And Germany will see intense winds across the board throughout the night -- Richard.
So that's what we are looking forward to.
QUEST: Guillermo, many thanks.
ARDUINO: Thank you.
QUEST: Have a good weekend.
ARDUINO: Same to you.
QUEST: See you next week.
And that is QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I do hope it's profitable.
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I'll see you next week.