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QUEST MEANS BUSINESS
HSBC Bank Names New Chairman, New CEO; Cyber Threat Targets Industrial Systems
Aired September 24, 2010 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, HOST, QUEST MEANS BUSINESS: Gulliver travels: There is a new man at the top of HSBC.
Beware the worm. A new kind of cyber threat with some very hard targets.
And Twitter tremors. Why a fake earthquake is gripping social media.
I'm Max Foster in for Richard Quest. This is QUEST MEANS BUSINESS.
Hello to you.
Europe's biggest bank is changing its top team as the industry faces up the threat of radical upheaval. Tonight, HSBC has both a new chairman and a new chief executive as it prepares to fight to remain one bank. The job of chairman goes to Douglas Flint, the bank's finance director. And Stuart Gulliver the head of HSBC's investment bank takes over as chief executive.
Gulliver is an Oxford graduate who has been with HSBC for 30 years now. He ran the investment bank in Asia and took over as head of global investment banking in 2006.
Jim Boulden joins me now because he's been on a conference call with the man in question.
What did you make of what they had to say?
JIM BOULDEN, CNN FINANCIAL CORRESPONDENT: Well, what is really interesting about this is none of this was supposed to be made public until next week in Shanghai, on Wednesday. But because of the intense media speculation and what HSBC says was, frankly, wrong information over the last few days about this succession issue.
FOSTER: There was a bust up (ph) wasn't there? That is what we've been reading?
BOULDEN: You wouldn't know that from this conference call.
FOSTER: Come on!
BOULDEN: Which was very interesting.
BOULDEN: You had Stuart Gulliver on the phone from Hong Kong. You had Geoghegan, the outgoing CEO in Singapore. You had Stephen Green on the phone from London in this conference call. So that shows you the global nature of this bank, doesn't it?
And they were trying to put this all together. And they are putting a united face on this. At least from their point of view, was that Geoghegan, the outgoing CEO was never going to become chairman. Now the press speculation the last few days was that he was angry he wasn't going to become chairman so he decided-
FOSTER: He walked out.
BOULDEN: to quit as CEO. He says he decided 10 days ago because a new chairman was coming in anyway, that it was time for a big change and that maybe both positions should be replaced. Because he came in with Stephen Green in 2006, and he thought he'd go out with him in 2010. That is how HSBC sees it.
The important thing here really is, most interesting to me, is that Gulliver comes from the investment bank side. It is an internal appointment, of course, so they're not going through this massive change. And he brings a lot of his people up with him. And he gets a lot of credit for helping HSBC weather the whole economic crisis. Not, put it into trouble like we saw so many banks.
FOSTER: But like Barclays they are promoting the investment banker in the business.
FOSTER: And that is pretty controversial isn't it? Or am I just reading something into that?
BOULDEN: Well, if you believe everything you've read, the man has made an amazing amount of money over the last few years, as the investment side of the bank, as did the incoming Barclays CEO. So I thought it was very interesting, way down in the press release, down here. They do talk about his compensation. They say he'll make $1.9 million as the new CEO next year; $1.9 million. Then you have all the bonuses and stuff. But they say that Stuart Gulliver's total compensation is expected to be less than he currently receives.
FOSTER: It could be more, could it?
BOULDEN: Well, he-
FOSTER: Rumor has it, is it 9 million pounds, or $9 million?
BOULDEN: It is 9 million pounds. But that means he's taking a pay cut, basically.
BOULDEN: To become the new CEO of this global bank.
BOULDEN: One that he has obviously been working for, for a very long time. And in this new era there was a lot of press speculation that the U.K. government would be upset that an investment banker is taking over HSBC.
FOSTER: (UNINTELLIGIBLE) he's getting less money.
BOULDEN: That is what they can say.
FOSTER: Still a lot of money isn't it? OK, Jim. Thank you very much indeed for that. It is fascinating. It is fascinating to read, nothing in all that speculation.
Now, Stuart Gulliver is just the latest investment banker to take a top management job. The U.K. Business Secretary Vince Cable might call them "spivs" and "gamblers". At least some of them, but the fact is they are taking over. Gulliver joins a coterie of top bankers who cut their teeth on the trading floor. It includes Bob Diamond, the former head of Barclays Capital, who is taking over as CEO of the bank, as Jim was saying just now. And the former British Business Secretary described him as the "unacceptable face" of banking.
Now Spain proposes to slash spending and tax the rich as it seeks to earn credibility in the financial markets. The government plans to trim its budget for the next year, by nearly 8 percent. Finance minister Elena Salgado warns it will feel more like 18 percent when you take into account other costs.
Now, Spain's top earners are to be asked to do their bit by paying more into the public purse. Anyone with an income of more than $160,000 a year will see their tax still rise under the plan. Many other costs saving measures have already been announced, such as public sector pay cuts and a pension freeze. It is now up to Spanish lawmakers to approve or reject the plan.
Finance minister Salgado says the cuts would put Spain on track to slim down its budget gap to just 6 percent of GDP by the end of 2011.
(BEGIN VIDEO CLIP)
ELENA SALGADO, FINANCE MINISTER, SPAIN (through translator): This is an austere budget, a budget that includes social programs and it is a budget that pushes economic growth. And that change in the economic model that we are trying to push with help of businesses and workers, along with measures taken by the government, and where necessary approving laws in parliament.
(END VIDEO CLIP)
FOSTER: Austerity may be a bitter pill to swallow but it is working wonders in Europe, according to the president of the European Commission. Jose Manuel Barroso says it is time to exit crisis mode and start focusing on recovery. Barroso says a degree of cautious optimism has taken root and today we saw one more reason to be cheerful and a few others to be worried.
In Germany, business confidence is up higher, higher since June 2007, according to the IFO Institute, in its monthly survey of firms. Now analysts had expected a drop from August. In Romania, 6,000 police officers are protesting over austerity measures. That is another consequence of all of this and police outside the presidential palace demanded the president come out. When he didn't, they threw their hats into the yard.
Now France is growing at a faster rate than we thought. Revised GDP numbers show the economy expanded 0.7 percent in the second quarter. That is more than the previous estimate and the French prime minister expects annual growth to beat current government forecasts, that is according to Reuters.com.
Now European stocks ended the week posting strong gains after today's U.S. durable goods data eased worries about a global slowdown. Sentiment had already been lifted by the German IFO business sentiment survey, which unexpectedly touched a three-year high. Shares in ARM (ph) Holdings surged on a boast that Larry Ellison told analysts that Oracle might like to buy the U.K. chipmaker. And Adidas got a boost after U.S. rival Nike reported strong orders for the first quarter.
Now, the Dow is currently up. We'll be live at the New York Stock Exchange later in the program for more on what is driving those gains. It has been an interesting day for Wall Street today.
Now, when a worm is more than a soft bodied animal, it might even threaten a nuclear facility in Iran. It is getting pretty serious according to some speculation. We'll explain after the break.
FOSTER: Now a cyber weapon on a scale never seen before. The Stuxnet Worm is the first of its kind. It targets the real world, for example, industrial controls made by the German group Siemens for cooling systems and turbines so this is different. Take a look at this information from Symantec about the locations of infected machines. Nearly 60 percent are in Iran. The experts don't know for sure but there is increasing speculation that the worm may be an attempt to sabotage Iran's Bashir Nuclear Plant.
Lending credence to this view is the complex worm and it has to be well-funded, because it is so complex. And that might only be possible with a backing of a national government, so lots of speculation around this story.
Let's just explain how it works. It can travel by USB. That makes it different. This is not about cables and interconnected networks already. It can actually move between devices which aren't connected by cables, infrastructure like industrial machinery or cooling turbines. And what this actually can do is make readings appear normal when actually they are not. So you have weird readings coming out of machines because something has got into those machines via the USB port. And it is confusing people because the machines might not actually be connected by networks.
Now, Roel Schowenberg is a senior malware researcher at Kaspersky Lab, which makes security software. He joins us live from Boston with his expertise on this.
ROEL SCHOWENBERG, MALWARE RESEARCHER, KASPERSKY LAB.: You have been aware of this for some time, haven't you? But just explain why it is so different from what we have seen before.
There are a lot of different reasons, to be honest. First of all, this malware is taking advantage of an unprecedented amount of previously unknown vulnerabilities in Microsoft Windows. Secondly, it is the first of its kind that actually steals certificates belonging to legitimate companies pretending to-it is like it pretends to be from these companies. So it looks really legitimate. And, thirdly, as you were pointing out, this is targeting critical infrastructure, which we haven't seen in the public before at all. So it is really-really untypical.
FOSTER: And that infrastructure isn't protected is it, as a result? This is attacking things that haven't need to be protected before?
SCHOWENBERG: I think the industrial control world has been considering these kinds of threats for a while now. But yes, this definitely brings-brings a new need, a new need for awareness and it will definitely further increase security in these organizations.
FOSTER: Just explain how it works, because it sits in the background, doesn't it, of the machinery? But it tinkers with the controls. So give us an example of how it may affect the running of a machine?
SCHOWENBERG: So, what Stuxnet does is when it gets into a control system network, it will basically scan this network to see if there are certain hardware, certain control systems it can reprogram. And if it is able to find these machines it will reprogram them. But Stuxnet at the same time sits at basically this supervisory level of the plant. So, for the operator, when he looks at his controls everything looks fine. Everything looks within operational parameters. But in reality this is valve, or this engine, or whatever is running out of specs.
FOSTER: OK, and you work in this business. How much manpower? How much brainpower would you need to make this happen?
SCHOWENBERG: Uh, to make the entire Stuxnet attack possible you need a lot of funding and you will need quite a big team with lots of different areas of expertise. There are really-because the threat is basically very diverse in what it is trying to accomplish. And you need, thorough Windows experts, you need thorough Skada (ph) experts, you need industrial control system experts and something to tie it all together. It is a very big operation, definitely.
FOSTER: OK, well, thank you very much indeed, Roel Schowenberg from Kapersky Lab.
And we are going to speak now to Ross Anderson. He is a professor of security engineering at Cambridge University. He joins us live from Cambridge in England.
Thank you very much indeed for joining us. We were just hearing there how advanced this worm is. And this is leading to speculation that it was sponsored by a state. Do you think that is likely? Or is that just pure rumor and speculation? And will we ever find out?
ROSS ANDERSON, PROF. OF SECURITY ENGINEERING, CAMBRIDGE UNIV.: Well, there is definitely a lot of speculation going about. But I agree, I think, with the analysis by Symantec, and with our previous speaker, that this is something that has involved multiple heavyweight experts. But because on the one hand you have a very, very sophisticated infection mechanism, which uses multiple zero day (ph) vulnerabilities, and on the other hand there is some domain knowledge in industrial control systems which is one of the areas that we are interested in.
It is not entirely clear that this morning's press reports of its being designed for attack are substantiated on the basis of what we heard. But I am certainly prepared to believe that it was created in order to gather detailed intelligence of industrial control systems.
FOSTER: But that is what is so interesting, isn't it? Because often these sort of viruses, worms, whatever you wish to call them, are produced for financial gain and this doesn't appear to be doing that. It appears to be attacking machinery which is important. And it is very complex so that is where all these rumors seemed to have emerged from.
ANDERSON: Well, the world of online operations appears to be segmenting into quite different businesses. On the one hand there is the mass market business where people send out millions and millions of phishing e-mails in the hope that somebody will type in their bank credentials and so they'll be able to steal a few 100 bucks, or whatever.
On the other hand there are people who do targeted attacks. Now we've seen that up until now targeted attacks happening, for example, during the Peking Olympics and the private office of the Dalai Lama. We have seen them happening increasingly against the treasurers of businesses, being organized by criminals who are trying to transfer out money. And this is clearly in the targeted attack business. Now, not everybody who does targeted attacks is a nation-state. The Chinese did against the Dalai Lama, but the people who have been attacking, you know, chief financial officers of businesses are basically criminals.
Now, given that criminals have got relatively little motive to go and collect detailed intelligence on industrial control systems, and given that the malware has been largely found in Iran, I think it is reasonable to run as a hypothesis.
ANDERSON: That this is a national intelligence agency trying to find out what the Iranians are up to.
FOSTER: Professor Anderson, we're going to leave it here, because there seems to be some sort of glitch with your system as well. I think someone was trying to call you. We're going to let you take that call now. Thank you very much indeed for joining us on the program.
Now turning up the heat on China. The U.S. takes steps to retaliate against the undervalued yuan. We examine the implications and the consequences.
FOSTER: Now a U.S. Congressional panel has turned up the heat on China over the yuan. It has approved a bill that would allow the United States to slap duties on goods from countries with undervalued currencies. The chance of quick final passage appears slim. Yet it could stoke trade tensions and further complicate the currency jigsaw. Let's start with the yuan.
The U.S. says China is unfairly undervaluing the currency to boost exports. China disputes that and says any quick devaluation will lead to widespread bankruptcies and job losses. Although the dollar's relative strength against the yuan has made Chinese exports more competitive, that is not the whole picture. The dollar is currently weak against another major Asian currency and that is the yen.
Now it's strength has been a major source of worry for Japan. Today the Japanese currency fell back with traders speculating that Japan is intervening in the markets to protect its many exporters. Maggie Lake has more on this debate, in Congress, and where it is all going. She joins us now from New York-Maggie.
MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT: Oh, it is a complicated picture, Max. But let's focus on what happened in Congress today. We have been watching this all week, and basically the-this bill passed through committee which means it can go to a full vote in the House as early as next week. It has pretty good chances of passing that.
Very, very important to point out here; that the same process is not happening in the Senate, the upper house. It doesn't look like a vote is scheduled there anytime at least before the mid-term election. So it doesn't mean-that means that even if the House votes yes next week and it passes the full floor vote, it doesn't just become law. It has got to make its way through the Senate and make its way to the presidency before that would happen.
Having said that, it is significant because we are really seeing the rhetoric on this issue flare up. Have a listen to the debate today.
(BEGIN VIDEO CLIP)
REP. SANDY LEVIN, CHAIRMAN, U.S. HOUSE WAYS & MEANS CMTE.: The status quo is unacceptable and unsustainable. And this legislation is a responsible and necessary step toward addressing the persistent imbalance created by China's undervalued currency and its impact on American businesses and American workers, therefore, this is a jobs bill.
REP. DAVID CAMP, (R) MICHIGAN: Congress has heard enough. It is time to produce results. The administration must step up its efforts to work with Europe, Japan, Brazil, India, and other Asian countries and set a clear timeline for action. The first step is to put the issue of global imbalances, which naturally includes China currency policy on the agenda at the November G20 meetings in Seoul, as a prominent item.
(END VIDEO CLIP)
LAKE: There you go and that is really what this is all about trying to push the president into action. We saw Obama and Wen talking in a bilateral meeting this week. The administration would like to try to use diplomacy to resolve this. They too are frustrated with how slow China has been moving on it. Of course, there are a chorus of experts and economists who say this type of action is only going to make the situation worse and sort of entrench them.
So getting it on the agenda at that G20 meeting seems to be what Congress is pushing for. This certainly complicates things for the president. They want progress too. We'll see if it takes shape for November. But also remember, Max, this is taking place against the backdrop of a very election here. So a lot of political, domestic politics playing a role on this international issue.
FOSTER: Yes, a very big story. Maggie Lake, thank you very much indeed.
We're going to stay in New York. We are going over to Wall Street, where stocks are continuing to rally, actually. Alison Kosik is standing by at the New York Stock Exchange.
Alison, this is mostly because of some very upbeat economic news. It has had a great response, hasn't it, for the end of the week.
ALISON KOSIK, CNN FINANCIAL CORRESPONDENT: It really has, Max. You know the bull came charging out of the starting gate and has yet to look back. It is really a nice rebound after we have had two days of losses. And as you mentioned it has mostly to do with them promising economic figures that we got earlier today. We found out that durable goods orders, they fell almost 1.5 percent in August. Now, we never like to report the kinds of-in this kind of report, but the figure is slightly better than forecast.
And when you exclude transportation out of the equation for durable goods, it showed that there was an increase in business spending. And that is really something investors always want to hear about. It is really the part of the report that they are latching on to. Durable goods include everything from refrigerators to computers. You know, all of those big ticket manufactured items.
July's figures were also revised higher. And that is also another reason we're seeing the gains right now in the stock market.
We also got numbers on the housing front. We found out that sales of newly constructed homes, those were unchanged in August. Missing forecasts for an increase. Now Wall Street isn't worrying about that-about that number too much right now since new home sales account for just 10 percent of the market, versus 90 percent for existing home sales. So we pay more attention to the existing home sales numbers.
Now those durable figures seem to be enough for Wall Street today to go ahead and carry on this rally. We could see this rally carry out through the closing bell, Max.
FOSTER: Yes, big help by the corporate news as well. Tell us about Apple. That is an interesting story.
KOSIK: Yes, Apple, you know has officially become the second largest company in the world when it comes to market value. Apple shares, gosh, they have soared 37 percent so far this year. Right now they are up around 1 percent. The company started the year in fifth place, but has jumped past Microsoft and two Chinese companies. It has really been on quite the tear since the inception of the iPhone and the iPad. And the iPhone currently represents about 30 percent of the company's revenue. You know, who is number one? You guessed it. So, you know, Apple has really taken the cake at this point, Max.
FOSTER: OK, Alison, thank you very much indeed for joining us.
FOSTER: The (UNINTELLIGIBLE) in trades for the week.
Now, social media sites are buzzing with news of a major natural disaster, but don't panic. It's only a drill. Next we'll tell you about this simulation and why its creators hope it might help save real lives.
FOSTER: Welcome back. I'm Max Foster in London. More QUEST MEANS BUSINESS in just a moment. But first here are the main news headlines.
Now, social networkers are reacting to a major virtual natural disaster in California. A few hours ago, a phony quake struck California a part of a drill called X24. They were a test of how social media could be used to respond to disasters. The public are being asked to visit various sites to see how easily relief information spreads through social networks.
Here are some of the Tweets the organizations -- organiza -- organizers, rather -- have put out so far. To avoid real panic, they all preceded by, "X24 is a test, not real."
Now, this week reads: "TV said large wave headed toward coastline. Everyone get out."
Here's another: "Cali offshore oil well reporting rapid loss of pressure. Does this mean another oil spill?
Well, Akshay Pottathil works at San Diego State University in Southern California.
He's director of the Vis Lab's adaptive spatial information analysis project, which is conducting the drill.
He joins us from San Diego now.
Thank you so much for doing this.
What have you learned so far from this process, because it's got great potential, but it's also got some -- some worries associated with it?
AKSHAY POTTATHIL, SAN DIEGO STATE UNIVERSITY: Absolutely. It's a very real thing, especially in Southern California, where we have quite a bit of earthquakes.
We are looking into this in multiple ways. One of the things that we want to see is where there a failure to connect the dots. You know, there is two dots, where do we make -- you know, where do we miss to connect it?
We want to identify that particular point.
The second thing we're looking for is more on the agency level. We're trying to figure out where the gaps are and when there are gaps, we want to be able to bridge those gaps.
These are two points that we're actively trying to -- and the exercise is right now happening. It's live and we're in the midst -- we're still getting data. We're still trying to figure it out. We're putting out social and metric networking as a key part of this. We're using social media -- Twitter, Quotes Manager. They're all working together to get out -- get this information out there, to see where the links are, how it's being dispersed and distributed.
FOSTER: The great difficulty is that you can't have a way to rely on what the information you get from social media. This is not always checked out.
So how do you -- do people tell the difference between the legitimate Tweets and messages from the ones that aren't malicious, but aren't well founded?
POTTATHIL: Absolutely, that's one of the purposes of this exercise, as well. You know, one of the -- we are looking to see where that comes in. You know, who is delivering those (INAUDIBLE). And the fact that we have local, state, federal and also international collaboration, there -- there is a check and balance that comes in where we're picking this up or someone is getting up in one car going, hey, you know, this is happening and we don't know about it and they're responding back. They're Tweeting back or they're getting this message sent back to them, saying, well, this is not correct.
So there is a check and balance that happens just because everybody has collaborated. And this collaboration is really what is being tested.
FOSTER: Yes, but is -- aren't you also running a risk here, because if all the information is out there, then it could be scaring people unnecessarily?
You need to be very careful about the information that goes out, so people aren't over duly worried.
So what are you -- what are you trying to ascertain from this exercise in terms of that?
POTTATHIL: We want -- we want to know where -- where those gaps are?
You know, if there are people getting alarmed in a particular reason, why did they not know about it and who was responsible for informing them?
And we want to figure that particular gap out and try to fill it in case we have an emergency in the future.
FOSTER: And the other concern is this exercise will be worrying people. I know you're -- there are some checks on there and you're trying to be as clear as possible, but there are going to be people who don't necessarily have English as their first language who are going to be panicked like this.
How are you reassuring people that there won't be any panic?
POTTATHIL: Sure. We -- we're I'm in, in this building, like one of the key things is being so close to Mexico, we have a lot of Spanish speaking communities here. And we have people who are on board who are native Spanish speakers who are communicating back to the community and so on. And we're trying to get as much as possible. But again, this exercise is a way to figure those out more in detail so we can have it in place in the future.
FOSTER: And do you really expect people to be -- if there is, you know, you're -- obviously you're in California, so an earthquake is first in your mind.
How much do you expect people to rely on the social media, actually, in those situations?
POTTATHIL: It's -- social media has -- as we have seen from past disasters, every time there is a disaster, it's joined. We saw -- we witnessed that in Haiti, where there is a lot of social media input -- that came into the picture. So we're -- we -- you know, we start to see more and more use of social media in different disasters.
Akshay Pottathil, thank you very much, indeed for joining us from California.
We'll wait to see how that project develops, because it's obviously at the very early stages and no conclusions just yet, but very interesting.
Now, off the walls and under the hammer -- a multi-million dollar art collection that once adorned the offices of Lehman Brothers. It's about to be auctioned off.
FOSTER: Now, when the London-based European operations of Lehman Brothers called in the liquidators, the accountants found the treasure -- a treasure trove of art and antiquities. After two years in storage, it's been deemed the right time to auction off the art to get a good return.
So, where will the money go?
Jim Boulden reports.
JIM BOULDEN, CNN CORRESPONDENT (voice-over): It's been more than two years since this sign hung over a solvent investment bank. And like everything else being auctioned off by Christie's, this sign was taken from Lehman Brothers European headquarters in London. These walls, filmed last year, once held numerous works of art.
WILLIAM PORTER, CHRISTIE'S: Whilst there is the ephemeral side of the sale, and, indeed, the infamy of -- of Lehman's close some two years ago has certainly generated increased interest. But, indeed, there are some very serious works of art on offer here, too.
BOULDEN: Modern British art, 19th century maritime paintings, plus photographs, antique furniture, books and a number of Lehman signs -- 300 lots in all go under the hammer, with estimates ranging from around $400 to more than $200,000 per item.
This sign from the lobby, complete with the name of one Gordon Brown, could go for more than $2,000. This sale is organized by PricewaterhouseCoopers, in charge of selling Lehman's U.K. assets.
BARRY GILBERTSON, PRICEWATERHOUSECOOPERS: We had this art in store for two years. We started to put it in store on day two of the administration and now we believe the art market has recovered enough that we can capitalize on the market two years on from the administration and hope to get the best possible prices.
BOULDEN (on camera): So even though it's art, even though it's interesting, it's beautiful pieces of furniture, you have to treat it like other assets, because it's about realizing the potential, not fire sales?
GILBERTSON: No, absolutely not fire sales.
BOULDEN (voice-over): In fact, Christie's estimates more than $2 million could be raised from the auction.
GILBERTSON: I think it's absolutely critical that the creditors around the world can see that we're taking every opportunity to realize money to improve their dividend at the end of the insolvency.
BOULDEN: This option is just one small asset sale to help pay off Lehman's creditors.
(on camera): This puzzle, with pictures of fruits and ice cream and baseballs and cookies, is the last lot in the Lehman's auction. It's estimated to go as high as $7,500. And I'm told that it stood right outside of the canteen and could have been the last piece of art seen by many of those employees on that fateful day when they cleaned out their desks and headed out into Canary Wharf with their boxes.
Jim Boulden, CNN, London.
(END VIDEO TAPE)
FOSTER: We'll update you on how it goes.
Now, Central America faces the imminent landfall of Tropical Storm Matthew.
Guillermo is at the CNN International Weather Center to brig us the latest on that -- worrying times.
GUILLERMO ARDUINO, CNN METEOROLOGIST: Yes. And imminent it -- at any time, we -- we can say maybe one hour, maybe less. The important thing is that most of the storm is already there. And we turn to numerical models to see what's going to happen in the next days or so, because we'll have it there for four days. So it's going to cause a lot of rain. We're talking about probably 50 centimeters, half a meter. It's going to linger over Honduras, Nicaragua, parts of El Salvador to Guatemala, Belize and Yucatan for four days.
Look at the size. And the problem here is more rain than winds. You see the winds are going up in speed. Pay attention to (inaudible), because the landfall is going to happen or is happening in between the border from Nicaragua and Honduras. So it's been soaked for a long time there. We may see landslides. We may see floods, of course. It is not going to remain on a tropical storm basis for a long time, because with the interaction of the land and the mountains that we have in the area, we are going to see a decrease in the forwards -- in the speed, the maximum sustained winds. And that's what actually gauges the size of the system.
But look at the precipitation. I said half a meter, especially in the northern parts of Honduras. We'll see the terrain now -- something very important. We have some mountains, therefore, some landslide. Especially the higher mountains are on the other side, on the Pacific coast.
But here on the Atlantic coast, where we see the imminent effect, in La Sava have, for example, these -- these mountains are prone to give in when we see a lot of rain, right?
The -- the saturation of the terrain, that's our main concern.
All right, let me tell you, the temps are going down. I see evidence of it here, especially in the North Sea and in Britain. We are going to see -- to continue to see some more rain here. It's improving a little bit, especially from west to east. And look at Italy. Look at the Alpine Region. In the higher elevations, we're going to see snow and significant accumulations. So the first snow event of the year, probably, but we're talking about the mountains especially.
While the rain will prevail all around this low pressure center and the cool conditions in the northern sections.
So this is, perhaps, the beginning of a cooler season after all. And we're not in the summer anymore.
Sixteen the high for Paris, with lots of cloudiness; 14 in London; and now we're talking about low 20s, for example, in Madrid, something we have not seen lately. So this obviously, Max, a big change going on in Europe - - back to you.
OK, thanks very much for that, Guillermo.
ARDUINO: Thank you.
FOSTER: we're going to take you to Wall Street now, because it's doing rather well at the end of the week. The Dow is up almost 200 points. It's up 1.85 percent. It's storming ahead there.
There's been a slew of upbeat data, that's the reason why. Durable goods sales, for example, fell less than expected, but also new home sales fell. So it's turning out to be a really positive end to the week on Wall Street.
The European markets also ended the week posting strong gains after today's U.S. durable goods data. Sentiment had already been lifted by the German Ifo Business Sentiment Survey, which unexpectedly touched a three year high.
They're all looking pretty positive around the world now.
Shares in ARM Holding surged over, of course, that Larry Ellison told analysts that Oracle might like to buy the U.K. chip maker.
Adidas also got a boost after U.S. rival, Nike, reported strong orders for the fourth quarter, hoping to rub off some demand from Nike.
Now, just a quick recap of our top story tonight. The rise of an investment banker to lead Europe's biggest bank. Stuart Gulliver, former head of HSBC's investment banking division, is to become the new chief executive. The current chief, Michael Geoghegan, is to retire. The banking industry is facing a period of turmoil, as lawmakers in Britain debate whether to break banks up, separating retail from investment banking. And some people are making something of the fact that HSBC and Barclays now are being headed up by the former heads of the controversial investment banking arms.
That's getting to rumble on over the weekend. We'll update you on all of that on QUEST MEANS BUSINESS on Monday.
But that means the end of QUEST MEANS BUSINESS for this week.
I'm Max Foster in London.
Richard is back next week.
"MARKETPLACE MIDDLE EAST," though, starts right now.