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Fed Chief Says He's Ready to Keep Economy on Track; Bidding War for 3PAR

Aired August 27, 2010 - 14:00:00   ET


RICHARD QUEST, HOST, QUEST MEANS BUSINESS: The Fed's fighting talk. Ben Bernanke says he's ready to act to keep the recovery on track.

I'll see your $27 a share, and raise you 3 bucks. Hewlett-Packard raises the stakes. It is a bidding war for 3PAR.

And are we there yet? If you live in dread of the family holiday, tonight, a survival guide coming up.

Because I'm Richard Quest. And I mean business.

Good evening.

The U.S. Fed chief Ben Bernanke today vowed to step in and prop up growth to support the U.S. economy that is looking ever more fragile. The economic recovery is grinding perilously close to a halt. Revised figures show GDP grew at an annualized rate of 1.6 percent in the second quarter. This shows the story as seen so far.

The initial number for there had been 2.4. It was well off the mark. It is a serious slowdown. And you can see that ever since growth returned in Q3 of '09, the growth has gone up in '04. That was the high point, and then a 3.7 percent in Q1. Now, rather than a sustained recovery what appears to be happening is a sharp slowdown following a spurt in growth. Stagnant corporate profit gains and an increase in imports along with anemic exports, all lead to that 1.6 number. It wasn't all bad news though. Economists were expecting an even sharper revision. They had been expecting a 1.4 percent.

And consumer sales were stronger in the first estimate, rising slightly. But the focus with that number-come over to the library and you'll see. The focus, really, was a speech by him. The chairman of the U.S. Fed, at Jackson Hole, Wyoming. It's a Fed-it's a central bankers get together. Its their annual conference. And in this speech, some 20-odd pages, Ben Bernanke says that in 2010 and into next year he expects the recovery to remain at a modest pace, which would have a pick up in 2011. He specifically says that deflation is not a risk in his view for the U.S. economy at the moment.

On the question of the slowdown, which he admits is because consumers are tapped out. He says that Fed-that the Fed when asked, does the Fed have tools at it disposal, the words, "we do". And then Mr. Bernanke went on to listen an entire raft of nonconventional methods, more quantitative easing, changing the Fed statement, to use more expansionary words. He even talked about excess reserve interest pays on excess reserves. He dismissed the idea of changing the U.S. inflation target.

Overall, this is the problem in the United States at the moment. Consumers are now saving 6 percent of their money. They are deleveraging, but the confidence crisis is what's causing problem. Banks are lending to big companies, but small- and medium-sized enterprises simply don't have the wherewithal to get the cash.


Jon Hilsenrath is the chief economics correspondent at "The Wall Street Journal". He is in Jackson Hole. He joins me now. Live on the phone.

Jon, it was a very detailed speech, but in many ways he is setting out an agenda that if necessary he has the tools to do the job.

JON HILSENRATH, CHIEF ECON. CORRESPONDENT, "WALL STREET JOURNAL": Oh, yes, absolutely. And you know it was detailed for a reason. There has been a lot of uncertainty in the financial markets in the last few weeks about what the Fed is going to do next. The economic data that we've seen suggests that, you know, it was reported today that not only did the economy slow in the second quarter, but it looks like it might have continued to slow or it stayed at slow-a slow rate in the third quarter.

Everyone wants to know, what does Bernanke stand-

QUEST: I'm going to have to interrupt you. I'm going to have to interrupt you. Do forgive me.

We are now going live to pictures from Boston where the former U.S. President Jimmy Carter and a 31-year-old American citizen, who had been detained in North Korea, have just arrived in Boston. They are at Logan Airport. These pictures-Mr. Carter-former President Carter on the left there, the family reunion that you can see immediately in the front of the screen.

The worrying part, obviously, for this family was that the prisoner had been-it had been thought he was-he had been sentenced to eight years of hard labor for entering North Korea illegally and unspecified hostile act. It is Aijalon Mahli Gomes. The officials agreed to an amnesty for Mr. Gomez at former President Carter's request. The exact negotiations, what may or may not have been promised is by no means clear in this respect.

Certainly, whether or not North Korea returned, or agreed to return to multi-party talks, what might have been offered in return, or whether this was purely a full humanitarian mission. This isn't the first time that President Carter has been on humanitarian missions to get people in prisons released.

The pictures there, obviously very hard-we are just waiting to see whether or not the president and Mr. Gomes are going to actually say any words.

The interesting thing about this was Mr. Gomes was prosecuted, imprisoned, he faced eight years in North Korea. But it was the unspecified hostile act, which of course gave pause, and gave roundings of what was actually taking place.

Jon Hilsenrath is still with us in Jackson Hole, Wyoming.

Jon, I do apologize if I have to interrupt you again. It is the nature of the beast today.

Was there a feeling with Ben Bernanke's speech that ultimately, quantitative easing, and more nonconventional methods, it is just a question of time. It is not if, it's when?

HILSENRATH: Well, you know, he certainly did set it out that way. And let me just be a little bit more explicit about what we're talking about. So, the idea on the table is that if the economy slows more the Fed might need to go in the market and buy up a bunch of Treasury bonds, a bunch of mortgage-backed securities to try to drive down long-term interest rates. That is his main policy option. But it depends on how the economy performs. If this is a temporary slowdown he's hoping he's not going to have to do it. You know, if you talk to people in the market a lot of them think he's going to have to do it. And he opened the door more widely to that today.

QUEST: And the mood from other central bankers who may have been watching. I mean, this is their annual get together, isn't it?


QUEST: This is when they sort of, as Paul Donovan puts it, from UBS in Britain, he says this is when they all sit around the campfire singing monetary songs.

HILSENRATH: Ah, yes, you might say that. They sit in a conference room and talk about econometric models. But it is interesting, the mood here, in terms of other central bankers, it is quite diverse. You know, I was talking to one last night, who is-you know, I won't name names-but his economy is growing a bit more robustly than ours and his view was, hey, everybody, you know, calm down. It is not like the world is ending. You have had a little bit of a slow down in growth, but it is nothing to panic about.

And, you know, there is a lot of Asian central bankers where right now and they're concern is that their economies are growing very hot and they are trying to figure out what to do about speculative bubbles. It is a very diverse atmosphere.

QUEST: Jon, many thanks indeed, enjoy the weekend as best you can in Jackson Hole, a beautiful part of the world, even with central bankers 10 a penny.


Michael Gapen is the senior U.S. economist for Barclays Capital. He joins us now.

Michael, I'll give you the same apology I gave Jon. If I have to interrupt you if former President Carter starts speaking.

So we will continue our discussion on economics. What surprised you about the GDP number and about the way Bernanke spoke today?

MICHAEL GAPEN, SR. U.S. ECONOMIST, BARCLAYS CAPITAL: Well, I think the GDP number there was some good news and there was some bad news. The bad news, obviously, as you mentioned, is that GDP was revised downward from 2.4 percent to 1.6. So, obviously things have slowed much more than they were in earlier quarters. If there is good news in this report it was the downward revision was much less than people had expected. And there was some uptick in consumer spending, as you had earlier noted. So there is some good news and bad news here. But clearly the economy has slowed.

In terms of Ben Bernanke's speech, in Wyoming, the take away from that, I think, is on one hand he raised the bar a bit on further Fed action. Relative to what bond markets were expecting. I think many in markets were expecting something soon, and something big. He pushed back on that a little bit. But he remains open to doing much more if the U.S. economy needs it and clearly spelled out that the he thinks that would come in additional purchases of Treasury securities to support housing markets.

QUEST: Let's take this. He says he doesn't-I mean, he effectively says you know, by talking about modest pace of growth he's saying there is going to be effectively he doesn't believe there is a double dip. And he says that he doesn't think the risk of deflation. Where do you stand on that?

GAPEN: I would say we share a similar view. This is certainly below trend growth and it is not growth that is likely to generate much improvement in the U.S. job market. But it is still a pretty significant away from a double dip and a deflationary outcome. So, it is certainly an inflection point. We're past the inventory rebound, and now it is really up to a pick up in final demand and consumer spending.

QUEST: This number of consumer savings, of 6 percent versus 4 percent. I mean, that is the original double-edged sword, isn't it? They're saving, so that is good. And they're deleveraging, but it is bad because you need the consumer, two thirds of the U.S. economy, to be spending.

GAPEN: Indeed. That is exactly the trade off that we face right now. So, certainly households are engaging in balance sheet repair. And that is good. Additional federal stimulus, whether from the Federal Reserve or the Treasury, to improve the ability of household to refinancing would be welcome, but what you are seeing is simply a cautious consumer that needs to repair its balance sheet.

QUEST: Right.

GAPEN: After a difficult housing market and a difficult equity market.

QUEST: Do you-do you believe that before we're finished, there will be more non-conventional easing, in other words a bit more QE?

GAPEN: Well, I think that the Fed is standing ready. So, I think, on balance if we see continued softness in the data, so for example, if we get a weak non-farm payroll report next week, I think, yes, you are likely to see the Fed in action at the moment. I think it is roughly on balance at this point. If we do see a better-than-expected outcome, the Fed may stay on the sideline. But I think it certainly is ready to act.

QUEST: Michael, many thanks. Michael Gapen joining me from Barclays Capital. Have a lovely weekend. Many thanks for joining me tonight.

Now on this question of recovery in today's numbers which are clearly showing a faltering economy. Paul Krugman, the Nobel prize winner and the American economist, questions whether it is right to call it a recovery at all. Fascinating piece that I read in "The New York Times" that really goes to the heart of it. I posted it at You can read it there. Rather interesting stuff.

In a moment a message from under the earth. Miners trapped in Chile send a video to the surface. The families are preparing to sue the company that sent them below ground in the first place.



QUEST: Emotional messages from the miners trapped 700 meters underground in Chile. Three weeks since the mine collapsed, the worried families got to see their faces, hear their voices, for the first time in this video. In it, the miners give a tour of the cramped conditions and some are laughing and even managing to make jokes.

Above ground the Sun Esteban Mining Company is facing very serious allegations. Two lawsuits have been filed on behalf of the families of the trapped men. Our correspondent, Karl Penhaul is following the developments form Copiapo in Northern Chile, near to the mine. Karl joins me now.

Firstly, the miners have now been told the extent and delay that there might be before the come to the-come above ground again, haven't they?

KARL PENHAUL, CNN INT'L. CORRESPONDENT: Absolutely. Now there are a couple of interesting developments that have just come in the last few minutes. But first is that, that in a conversation last night between the 33 miners and the coordinator of the rescue operations. He told them quite clearly what the exact plan was to rescue them. And also exactly what the timetable was. He told them, we estimate on the current plan it will be three to four months. Previously, because of to protect their psychological, mental health, they had only been given clues to that. So that is one key thing.

But also, key, the same coordinator of the rescue services said the rescue workers are working on a plan B. Now, he said he didn't want to give too many details at this stage. The plan was still being devised fully. I talked then to a government representative, minutes after, and she said, plan B would be an effort to get the miners out quicker. She wouldn't say how much quicker and she said that she wouldn't give any additional details either for fear of fueling speculation, Richard.

QUEST: Karl, when I looked at the pictures, the terrible circumstances that these men are in, but the area that they are encapsulated within, is larger in many ways than we had first thought. Not that that means it is in anyway comfortable or anything like that, but it is a bigger area where they can move around, isn't it?

PENHAUL: Yes, I think what we clearly see from this video is that there is certainly a group of very experienced miners down there. These are fish in the water, not fish out of the water, so to speak. They clearly know what they're doing down there in terms of how to survive in that kind of space. But the miner who takes us around with the video camera shows us the shelter, which is that sitting room area-sized location.

But also because we see a vehicle, it is either a truck or possibly a vehicle as big as a backhoe, moving through one of the tunnels. And that tunnel is very large to permit that kind of movement. Off camera, also, one of the miners mentions that there is 30 meters between one area and another area. So it looks like they have much more space than we initially expected to stretch their legs.

Also one of the miners talks about a problem that some damp has been leaking into the shelter. And he says that they may move their camp to another area. So it does seem that they have somewhat space. The shelter is really very hard safe area. The tunnels a bit more dicey, because of the possibility of other cave-ins, Richard.

QUEST: Karl Penhaul, in Chile, many thanks.

Now the mine collapse has put mines security and safety in the spotlight once again. We need to explore these possibilities and the pressures that they place on companies. Glen Ives joins me, the director of North American Mining for Deloitte, and chairman of Deloitte, Canada.

Glenn, many thanks. We see it again and again, that as commodity prices rise so the barrier for entry goes down, and more people are prepared to dig and excavate, aren't they?

GLENN IVES, DIR., NORTH AMERICAN MINING, DELOITTE: Absolutely. You know, the mining industry, there is different segments of it. And sophisticated mining companies, that are in the business all the time, metal price volatility is just part of the business. When you get to high prices, inevitably less sophisticated miners, mining companies, and miners start up and you end up in situations that are, perhaps, not as safe as they would be.

QUEST: I mean this is a fundamental issue that is going to be investigated, and we don't want to prejudge that, but whether it is for example, again, you know, Deepwater Horizon with BP, or a Chilean mine disaster, or whatever it might be. Commodity-the race to get commodities out of the ground has now become an unending rush.

IVES: I would say for the most part that perhaps that is a bit of an overstatement. Because in many cases, you know, sophisticated companies operating globally, they're not rushing to do anything. Again, I'm not an oil expert. I don't know exactly what happened in the BP situation. But it is, you know, it does happen at the fringes of the mining industry, where you do get these unsophisticated miners, perhaps taking risks that more sophisticated people wouldn't do.

QUEST: And that, of course, takes us into the area of-if, the mining companies, those who are prepared to take those-those unsophisticated companies prepared to take those risks, go forward. Then it really becomes a question of regulation, doesn't it? And what we're seeing and what we're also seeing is regulation, national regulation, has to be strict and strong.

IVES: Absolutely, there is regulation now. Chile is a country with fantastic mining history and heritage and it actually has pretty strong mining regulation. Again, I don't know the facts in this situation. (AUDIO GAP) And it will be interesting to see as this investigation unfolds.

QUEST: Many thanks, Glenn. We are having one or two troubles broadband. Many thanks indeed, though, for joining us tonight.

In a moment, a bidding war. The Rolling Stones" won't sing, "Hey, you, get off my cloud." That is what Dell is thinking as a bidding war picks up over 3PAR and it is cranked up a notch. Jim is back in a moment.


QUEST: The bidding war over the storage company 3PAR really hotted up today. HP has now raised its bid to $30 a share. It values 3PAR at $2 billion. This came after Dell had matched HP's previous offer and the company had already agreed to accept Dell's offer.

Confused? Jim Boulden is here to explain what 3PAR is and why these two companies, HP and Dell are prepared to fight hell to leather to get it.

JIM BOULDEN, CNN FINANCIAL CORRESPONDENT: And fighting every hour of the day over this company, 3PAR. And I have to tell you this is a company that till a week ago I had not even heard of. And now HP says it is worth $2 billion.

Well, what is 3PAR? Well, it is a very sophisticated data storage company. It is part of this thing called cloud computing. Cloud computing means that companies would access their data and store their data on computers that are sort of out there, on-over the Internet. It is accessing the stuff over the Internet. And 3PAR is part of this. It is a very, very sexy part of the IT now.

You've got companies like Google, Microsoft, IBM, of course. They are all into this game. HP and Dell are into this game a little bit and want to be into it a lot more. So that is why 3PAR has become very interesting, very quickly. Analyst say you can't just build one of these companies from scratch.

It's been around since 1999. And in IT services that's pretty-that's a long time. Now, Dell it is in the cloud computing side of things but not that much. So it is trying to get companies access to the cloud computing side. Michael Dell hasn't done really well lately. And he didn't do very well the last time he was re-voted up as the CEO. Some analysts say this is his chance to try to move into other areas than just, of course, building PCs and laptops. So he wants 3PAR in order to get revenue on other parts of the fast-growing IT sectors.

Why does HP want it? HP wants it because it doesn't want Dell to have it. That is one answer. And the second answer, HP doesn't have a CEO right now. The board is looking for new ways of going out. There you have a huge side of this cloud computing. Don't get me wrong. Big services, IT services company, you know, it is the old HP, it is the old Compaq, but it is also EDS, so it does these services going to against a company like IBM. It, too, wants to have to increase the hardware side of cloud computing.

I hope that was-I hope you understand that?

QUEST: It was. It was fascinating. And the most fascinating part, Jim, is that they don't have a CEO. They're considered to be a bit in trouble. And this is a company we have never heard of until this week.

Have a good weekend.

BOULDEN: Take care.

QUEST: I'll be back in just a moment.


QUEST: Hello, I'm Richard Quest. QUEST MEANS BUSINESS, this is CNN. And on this news network the news always comes first.

The top stories.

The former U.S. president, Jimmy Carter, has arrived in the United States, along with an American who had been imprisoned in North Korea. Mr. Carter went to Pyongyang on the humanitarian mission to secure the release of Aijalon Gomes. Mr. Gomes had entered North Korea legally. He was granted an amnesty at Mr. Carter's request.

Nairobi, where Sudan's president, Omar al-Bashir, defiantly appeared at the signing of Kenya's new constitution. Defiant because the International Criminal Court has issued a warrant for his arrest. He's wanted on charges of genocide and war crimes. But a Kenyan spokesman said al-Bashir was invited as head of a friendly neighboring country, in their words.

New flooding has displaced another one million people in Pakistan's soaked Sindh Province. The UN's humanitarian affairs agency says the already colossal disaster is getting worse and requiring an even more colossal response. Unusually heavy monsoon rains have caused the Indus River to burst its banks. And unfolding tragedy has claimed 1,600 lives.

On Monday on this program, we'll hear how one Pakistani billionaire hopes to help hundreds of thousands of his countrymen in need. The chairman of Bahria Town, Malik Riaz Hussain, tells me he's willing to donate 75 percent of his considerable financial assets -- up to $2 billion -- to help Pakistan in the wake of the catastrophic floods. Hear that interview. It is QUEST MEANS BUSINESS. It is Monday at 7:00 London, 8:00 Central European time.

Now to South Africa, a story we are continuing to following very closely, where you'll be aware that crippling strike could be about to expand. The South African Mineworkers Union, its biggest, is threatening to join the massive public sector walkout for one day next week. The job action has already shut schools. It's left hospital patients without crucial, sometimes intensive care.

CNN's Robyn Curnow in Johannesburg now, looking at the long-term impact.


ROBYN CURNOW, CNN CORRESPONDENT (voice-over): A sick man walks to his clinic, hoping to get medication. Simon Mabe has tuberculosis, a highly infectious and deadly disease. He's not taken his medication for two weeks, since the public sector workers went on strike. He can't collect his pills because the clinic is closed, as nurses and hospital workers are among those on strike.

Clinics like this one, then, are empty, soulless places, where doors are shut in patients' faces.

Back home, dejected, scared, Simon knows what it means if he doesn't take his T.B. tablets.

SIMON MABE, T.B. PATIENT: He said, because if I don't take the treatment, I'll end up losing my life. It worries me a lot, because I want to finish the treatment so I can do like other people.

CURNOW: He's already feeling the effects of being off his medication.

MABE: Now, I'm starting to lose weight and I'm starting to cough. But not a lot, just but I can feel that there's something that I'm missing.

CURNOW: His family not only worry about Simon's health, but also their own -- fearing his coughing could infect them all with T.B.

(on camera): The long-term effects of the strike are also being felt in South Africa's schools. School gates like this one remain padlocked shut, as the education system is all but paralyzed as teachers take to the picket lines or are too scared and intimidated to go to school.

(voice-over): So the children loiter on the streets, playing with empty beer bottles like these kids. Like the clinics, the schools are desolate, empty places. Students who do want to learn and come to school for study groups say they are intimidated by union officials.

UNIDENTIFIED FEMALE: I go to school. Normally, they let her in and then the S.A.G.E. people come. They chase us away sometimes. They beat us up.

CURNOW: The unions and the government have strongly condemned the violence and intimidation, but it continues regardless. Meanwhile, parents worry about their children's futures because crucial end of the year exams have been postponed.

CHRISTINA MOKWENDA, MOTHER: This place is shutting. Our children are not coming to school altogether. They are just lingering. They are doing nothing at all.

CURNOW: While the strike intensifies and the teachers and the nurses protest what they say are much needed higher wages, lives are in danger and futures are on hold.

Robyn Curnow, CNN, Johannesburg, South Africa.


QUEST: and I will be back with more in just a moment.


QUEST: No rest for the wicked -- the final Friday night of August and I'm working. And, of course, as you can tell, now we're turning to the question of our holidays and the question of the precious summer fortnight.

To help you make the most of it, all week we've been working flat out, checking the pros and the cons of staying in touch with work when you're on holiday. We've been looking at who gets how much time off and we've been offering up ways to take the sting out of those extra charges that governments and airlines insist on thrusting on our bills.

We're not done yet. Tonight, we have saved the toughest and most important for last -- surviving the family holiday.

How do you control the tantrums, the arguments, the constant choruses of, "Are we there yet?"

First of all, you need to set some ground rules. When going away with the family, you need to have ground rules, be -- have a plan and be prepared to change it. And for those alpha males or alpha females out there, D-E-L-E-G-A-T-E -- delegate. It will make you happier.

Let the kids blow off steam, so long as they're considerate of others. And that means letting you have an afternoon off. Take a load of mini vacations. It's easier to handle the family rather than one long one. And if it rains on your parade, relax. It's still a parade regardless of whether you're on holiday.

Now, if you work hard, you probably play hard, too. This is not my idea of any form of holiday. I cannot for the life of me see why people would want to get involved in the business of camping.

But our clinical psychologist, Dr. Jeff Gardere, joins me to -- from - - on the other side, from New York.

Doctor, for a business executive who suddenly has to be with the family, this is intensely stressful, isn't it?

JEFF GARDERE, CLINICAL PSYCHOLOGIST: Because, Richard, their mindset is about business, business, business. And somehow, they can't seem to get this dichotomy out of their head that they can be a good businessperson but still have a relationship with family. It doesn't have to be either/or.

As a matter of fact, studies show that people who have a balance at the workplace as well as with the family tend to produce...


GARDERE: -- better and make more money.

QUEST: So what's the biggest risk when you suddenly find yourself on holiday with your family?

GARDERE: I would say the biggest risk is going back to the old habits -- and they die very hard -- of getting to that cell phone, thinking that you have to respond to every emergency. All you end up doing, Richard, is making your family unhappy, because you promised them that vacation...

QUEST: Well, ah...

GARDERE: -- and you're not delivering.

QUEST: Ah. But what if -- what if, when you get on vacation -- look, there's you, your wife or your wife and your husband or whatever -- whatever -- you're both working, you're both exhausted. This is a holiday you've looked forward to and it's not going well.

GARDERE: Well, the bottom line is, it's not always going to be smooth. And that's part of what we need to understand, just like business, where everything is not prescribed and you have to learn to compromise and you have to learn to be able to improvise, the same thing with a vacation that is not going well. It doesn't have to be about perfection all the time, the same way that we see it in business.

QUEST: Ah, but at some point, you've got to -- I love this idea of you saying you've got to set the ground rules.

What do you mean?

GARDERE: Well, when I'm talking about ground rules, it's basically we're -- what we all need to do together as a family in order to get along, in order to make the vacation somewhat successful, but we're talking about behaviors, behaviors for us as businesspeople, as to what it is that we need to do to keep it a vacation. And, of course, rules for the kids, so they don't make us insane so that we can, in fact, enjoy this vacation. And we all do need the vacation as a family and as businesspeople.

QUEST: Doctor, where -- where are you going on holiday?

GARDERE: Well, you know what I do, Richard?

I take...

QUEST: Going...

GARDERE: -- a lot of these little mini vacations...

QUEST: Oh. All right.

GARDERE: -- because no working, no money. So I have to go to the beach every weekend.

QUEST: Oh, now that -- now, but you -- you're not the sort of person to have a tent and do a bit of camping.

Doctor, many thanks, indeed.

Enjoy your vacation when you get to it.

GARDERE: Thank you, Richard.

QUEST: Now, we've loved seeing your own holiday snaps and showing you them.

Guarabani (ph) of Pakistan tells us he had a wonderful experience in a city by the bay. He sent us a picture of his beloved Asra (ph) and little Rabu (ph) having a grand time in San Francisco.

And what would summer be without the sojourn in the sand?

Seeva (ph) says she's enjoyed a beach holiday with her daughter and sent us this -- I think this is great -- picture to mark the occasion.

And we're off to the Philippines with the joyous Grace, who traveled from Vienna to the award-winning beach at Boracay.

Finally, this picture was sent to us from Richard Cohen. It's a picture of his mother in Bali. Richard says his mother suffers from Lou Gehrig's Disease and we're delighted to see she's doing better and enjoying her vacation.

Now, Guillermo is at the World Weather Forecast -- Guillermo, please, I need some inspiration.

GUILLERMO ARDUINO, CNN METEOROLOGIST: And I'll tell you how to get inspirational with that camping gear over there. My God, that's awful. Awful. I'm a great barbecue expert, but in my summer home, never in a tent, ever.

OK. Let me tell you what's going on in London now, because I see -- oh, how can I put it?

The weekend, at the beginning, Saturday and Sunday, is going to be nice. And then clouds are going to form and all that. But when you compare London with the rest of Europe, especially here to the east, you know, London looks like a good place.

We have some spots here and there, rain showers. It's going to be a great night tonight. Friday night in London, beautiful, just some clouds.

Tomorrow, it's going to be a nice day. So, you know, if you're planning to go out and run in Hyde Park, you can do it in the morning. Then you will see the clouds on the increase. The same on Satur -- on Sunday.

But the rain is in Amsterdam and Dublin and Brussels. But it's nothing big, you know. It's going to be fine. Twenty the high for tomorrow in London, 16 in Berlin, 34 -- still very warm, indeed, there, in Madrid. Everywhere else here, the central parts of Europe, is where we have the problems.

Now, no problems at the airports. Vienna a little bit breezy.

You know, Richard, it's all going to be about hurricanes very soon, because this is the time of the year when we see the highest activity. And that is my concern.

But this weekend, so far so good -- back to you and have a nice one.

QUEST: Guillermo, many thanks, indeed.

Revenge for the fact that I said I hate camping.

That's QUEST MEANS BUSINESS for tonight.

I'm Richard Quest in London.

Thank you.

Normal service resumes next week.

Whatever you're up to in the hours ahead, I do hope it's profitable.

"MARKETPLACE MIDDLE EAST" starts right now.