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Jobless Recovery Could Hurt Dems in U.S. Elections; RIM's UAE Deal; MGM: Gone with the Wind?

Aired October 08, 2010 - 14:00:00   ET


RICHARD QUEST, HOST: It's a jobless recovery. Democrats were hoping for a pre-election boost. They are disappointed tonight.

Who is afraid of a currency war? Finance chiefs meeting in Washington, they certainly are.

And no blackout for BlackBerry, a deal with the UAE.

I'm Richard Quest. It's a Friday but I still mean business.

Good evening.

Yes more evidence today that the U.S. recovery is moving at a snail's pace. September was a bad month for jobs and the timing was even worse. Tonight on QUEST MEANS BUSINESS, what it means for the U.S. economy; the upcoming midterm elections, and the market and how it reacted. Because the job numbers, worse than expected; 95,000 U.S. jobs were lost in September, according to the federal government figures. That is quite a leap from the 57,000 that was shed in August.

The unemployment rate was unchanged at 9.6 percent. But that probably more likely reflects the fact that so many people have decided they are either out of benefits or it is not worth looking for a job.

When we look closely at the numbers as you can see here. The blue is the business hiring. The green is the government hiring. It is a tale of two sectors. Private payrolls, that is the blue number, the blue chart. They have been on the rise for nine months in a row. And that is the encouraging part. In September 64,000 new jobs, slightly less than the previous month, but still positive, but if you look at the drop in public sector jobs, remember, that was lost from the census. There was some lost from teachers and other state workers. So, net-net against that, and you see how you'd get your 90-odd, thousand, net loss. So did the winding down of the numbers so it clearly showed when you look at it, that it is private versus public.

This is the last report we'll get out of the congressional midterm elections. President Obama wasted no time in putting political spin on the numbers.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I should point out that these continuing layoffs by state and local government, of teachers, and police officers, and firefighters, and the like, would have been even worse without the federal help that we provided the states over the last 20 months.

Help that the Republicans in Congress have consistently opposed. I think the Republican position doesn't make much sense. Especially since the weakness in public sector employment is a drag on the private sector as well.


QUEST: Now, we'll be looking at the political implications as put by President Obama, in just a moment.


But the market that is open is the Dow Jones, at the moment. We were over 11,000 for the first time since May the 4th. Now, just pull back 10 points off that. And the Dow is still --it is still 22 percent of its all- time high, back in 2007, but 11,000 is certainly, possibly, within grasp of tonight. Some analysis, we do need to talk about these numbers.

Julia Coronado is the chief North American economist for BNP Paribas, joins me now from the trading floor in New York.

Julia, you know, you and I could get into the minutia of the numbers but that wouldn't help us really understand what does the gut feeling say about them?

JULIA CORONADO, CHIEF ECONOMIST, BNP PARIBAS: Well, it is a pretty worrisome report overall. As you noted there was some decent reasonably OK, private sector hiring numbers. But even private sector hiring has slowed in the last few months, as the manufacturing sector has cooled off a little bit. And in the meantime the service sector really isn't beginning to pick up the slack. And that is what we look for at this point in the cycle, is that rotation from the manufacturing sector to the service sector. And that is just not happening, so it is a little bit worrisome from that point of view.

The state and local governments situation was another --it was a huge drag. More than 80,000 jobs lost in that sector this month; and given the budget situation that doesn't look like we're in for a big improvement in the near future either. So, I'd say it is pretty worrisome for the policymakers.

QUEST: At what point does this become a self-defeating spiral? People, the numbers create worries about jobs, spending slows down. Therefore, it creates more unemployment. Are we at that stage yet, do you think?

CORONADO: We're not at that stage yet, but it certainly looks like that is the direction we're going in. Another sort of disappointing detail of the report was that aggregate hours worked, so the total hours worked by all workers in the economy was flat in September and wages were flat. So that means no growth in income. If you look at sort of where we have been trending, we got some pretty decent increases in hours worked and income, in recent months. And that is really starting to slow. That raises questions about the process for spending in Q4, for the consumer.

QUEST: So, although we've got some --

CORONADO: So, yes, at some point this becomes self defeating.

QUEST: Right. We've got some weeks before the Fed meets again, in fact, the day after the November midterms. These numbers suggest that the ground that is being prepared for QE2, not makes it almost a certainty.

CORONADO: Absolutely. I really think that the bar had already been met before this number. The pervasiveness of the slow growth that we've been seeing over the last six months suggests that this is not just a slow patch. This is something a little bit more structural.

QUEST: Right.

CORONADO: And so I don't think there is any reason for the Fed to hold back here. I think they absolutely go in November.

QUEST: Julia, bearing in mind that people have been talking about should the Fed, should they not, should-they, should-they-not, could the Fed now be regarded as negligent for having waited so long. Whether for political reasons, because of the midterms or not. But they should have gone in October, or even in the summer?

CORONADO: I think what the Fed has been doing is approaching this very cautiously and laying the groundwork very carefully. Remember that we started talking about this as early as June. And then they have carefully laid out the options, evaluated the costs and benefits of each option. This is not a trivial undertaking to expand the Fed's balance sheet.

I think they wanted to evaluate the costs and benefits of each option and prepared the market for what they're going to do. So I would definitely not say that they have been behind curve or negligent. I think that they have actually been proactive in seeing this is the problem, and this is the direction they needed to go in.

QUEST: Julia, many thanks. Have a good weekend, as you plough through the real --the real minutia of the numbers. Page 47, Appendix III, sub-paragraph 7, or whatever. Many thanks indeed, Julia Coronado, in New York.

Unemployment is the big election, hot topic. And as we mentioned, it is the last report before the congressional midterm elections. Dan Lothian is at the White House.

A president going into midterms, that already looks dodgy, where the House, control of the House is in danger. Spinning this, is spin indeed.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: It is. And I should say, tough, that this particular report gives both Republicans and Democrats, and the president in particular, some ammunition. The White House, for example, is focusing on the increase in those private sector jobs, as proof that what this administration is doing is working. Yes, there is still a lot of work ahead, but that things are better than they were before.

Republicans, on the other side, are focusing on the fact that unemployment still remains high, unchanged at 9.6 percent. And that despite what the president and this administration has been dong, this economy has failed, so far, to get on fire. To really show any sort of long-term turn around potential. And so take a listen, first of all, to the president who really tried to be cautiously optimistic about what these numbers meant.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This morning we learned that in the month of September our economy gained 64,000 jobs in the private sector. In July and August private sector job numbers were revised upwards. So, we have now seen nine straight months of private-sector job growth. In all, more than 850,000 private sector jobs gained this year. Which is in sharp contrast to the almost 800,000 jobs that we were losing, when I first took office.


LOTHIAN: Now the Republican House Minority Leader John Boehner, who has been a fierce critic of the president when it comes to the economy, fired back almost immediately, essentially saying that these numbers show that no matter what the administration says about stimulus, and other things they have been doing, it is simply not working. Take a listen.


REP. JOHN BOEHNER, MINORITY LEADER: It looks a lot like the reports we've seen every month since President Obama signed the stimulus spending bill into law. Unemployment is high, and millions of Americans are out of work. Private sector job creation remains flat.


LOTHIAN: So, Richard, you know, when these politicians go out on the campaign trail here, over the next few days and weeks, they will be touting the fact that -- Democrats at least will be touting the fact that, listen, the administration is making some headway, here, telling voters to give us a chance to really turn this around. Republicans, on the other hand, will be saying, it ain't working, time to get these folks out.

QUEST: Dan, this may seem --I realize you cover this morning, noon, and night. So this may seem somewhat of a naive question, but from this side of the Atlantic, one simple question. How much trouble is President Obama in?

LOTHIAN: Well, you know that is really difficult to tell. You have heard, you have heard some people predicting that Republicans are really going to make some major headway and some big victories in the midterm elections, on the other hand, I was talking to someone yesterday who said, listen, you know, all of this sort of bloodletting that you are hearing about is simply not going to happen.

I think the only way you can really answer that question is, we'll have to wait and see till after the midterm elections. I mean, if Republicans do make significant gains in the midterm elections, as some people do suspect, and expect, then the president will be in some trouble here. Because it will be difficult for him to get anything significant passed through Congress, in particular, some of the things that he ran, on such as immigration reform. So it will be very difficult for the president, but again, the only way I think we can really answer that question is after election day.

QUEST: Dan, it looks like a lovely fall day in Washington, D.C. You have a good weekend. Whatever the numbers, beautiful day. Have a lovely weekend.

LOTHIAN: It is a beautiful day, beautiful day. Thank you, you too.

QUEST: Dan joining us from Washington.

Now, you may well be asking the question, why is it so difficult new jobs in this recovery? Why are we calling it a jobless recovery? Not just in the U.S. but this also applies to Europe as well.

It is a fascinating article in Newsweek", which came across my iPad. It looks at whether the numbers are because of a weak recovery or whether it is structural. I've posted the article so you can enjoy it yourselves, a bit of weekend reading. Well there is always time to read an article or three., become a fan and friend of the program. Enjoy the article and --well, you'll see what we're talking about.

Now, as we move along on our Friday program, a strong economy, a strong investment, and a strong currency. Which country am I talking about? Well, it has to be Australia. And the Australian treasurer and deputy prime minister Wayne Swann will talk to us after the break. He's at the IMF.


QUEST: Tonight, the men and women in charge of the world's money are attempting to avert a war. It is, of course, the much talked about currency war and the diplomatic efforts and the peace efforts taking place are at the IMF and World Bank, in Washington, D.C., where the annual meetings are, about to get underway. Everybody agrees that a currency war will be a bad thing. But some nations can't but help to try and stop the flows of the rising currencies, by taking whatever measures they can.

If you join me in the library, I'll show you one or two examples, the sort of examples we have been hearing about. Now this is, people talk about Brazil. It was the Brazilian finance minister who said that the world was walking towards a currency war, earlier this week. And really ignited the debate. And this is the reason why he did it. Because the royal versus the dollar, has risen by 12 percent since just June of this year.

The reason of course, is the cheap flow of money into Brazil, which is now looking for a home, from the U.S., Europe, China, a variety of places; because of the better rates of return, interest rates, and the perceived BRIC benefit in that. So that is a reason why Brazil, in defiance, has been buying more dollars. It has been building up its reserves. It has stopped raising interest rates, and it has raised taxes on foreign investors.

But that number is still at a two-year high against the dollar. You know well enough about the Chinese yuan versus the dollar. It is a fixed currency, a pegged currency, whatever we like to call it. The Chinese did agree just before the G7, G8, back in the summer, that they would allow an appreciation. But the reality is, 2 percent. Well, that is hardly going to get them off their back, in the U.S. Congress and the administration, which believes that China is manipulating its currency. The Chinese do this by intervening, by getting the central --by getting the various Chinese banks to intervene. And by playing against the reserves involved.

The Japanese yen has risen 14 percent against the U.S. dollar, since June of this year. Now, what is happening with the Japanese is even more interesting, because they have intervened into the foreign exchange markets to bring down that value. They would say that they are not manipulating or massaging the currency, they are getting rid of the external volatility. Three examples, there, of the sort of currency manipulation we're talking about.

Maggie Lake is in Washington for the IMF meetings. Currency wars is too simplistic?

MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT: Yes, you know, Richard, it is. But the striking thing is dominating and the striking thing is the difference in tone we are seeing. Remember back in the financial crisis it was all about cooperation and coordination and they did that quite well. This time it is completely been replaced by the tension over currencies. And more broadly, as you say, that is putting it simply. Really it is disagreement over economic policy. How they are all addressing the fact that, you know, two year on from the crisis growth is still anemic and they're under pressure at home.

U.S. Treasury Secretary Timothy Geithner addressing the group today, his repaired remarks emphasize the need for cooperation. Everyone recognizes it has fallen apart. But he also added, almost immediately that the U.S. was believed that the global rebalancing is not progressing as well as needed. He went on to say more needs to be done by countries running external surpluses. And you can read in parentheses there, China. And that is the problem.

Everyone is talking about coordination, but they are also increasing their rhetoric, criticizing policies and really pointing a finger toward China. China has been pushing back on that, so on the one hand you talk, talk of cooperation but you have this rhetoric which does not seem to be leading in that direction toward anybody getting on the same page.

Clearly a lot of meetings happening here this weekend; we'll see if they can lay a little bit of groundwork to sort of bring the situation back to a more cooperative stance. But without China, looks unlikely.

QUEST: Maggie, you have your work cut out for you this weekend. Maggie Lake, who is in Washington tonight.

Now, the country, the currency and the economy that is perhaps doing the best of the major G12, the G20, the developed nations. You are looking at a life, a year in the life of the Australian dollar, as traded against the U.S. dollar. The two currencies, traditionally it --this is the bit we really need to focus on here. And it goes up, from the low point in the mid-'80s, or the low-'80s, all the way up to '98, and indeed tourists at the moment are now getting parity and beyond; the situation which hasn't existed since 1982.

It is rising for the same fundamental reason as the yen and the royal. Money flows to where it can get the highest yield. And compared to the rest of the developed world, Australia's interest rates are pretty high, over 4 percent.

Wayne Swan is Australia's treasurer and deputy prime minister. I asked him if the Aussie's rise is a worry.


WAYNE SWAN, TREASURER, AUSTRALIA: Well, of course, we have a number of very important issues on the agenda here at the International Monetary Fund, and of course, through the G20. And part of the reform agenda is the framework for sustainable and balanced growth, which the G20 is looking at. And of course, exchange rate reform is part and parcel of a broader reform agenda, which we must put in place if we are to deal, over time, with imbalances in the global economy. But as you are aware, Richard, it was this weekend two years ago --

QUEST: Right.

SWAN: --when the G20 finance ministers meeting, came together with then-President George Bush, which put in place a coordinated global response to the global financial crisis, and what became the global recession. So, in dealing with these matters there is a good track record, at the international level. And I'm optimistic that we can deal with some of these challenges as we go forward.

QUEST: The Australian dollar has seen a dramatic appreciation, some 20 percent against the U.S. currency since the middle of this year. I know you make --you have made a virtue of not commenting on currency speculation. But please, are you satisfied with what's happened?

SWAN: Well, I don't, as you know, speculate about the value of the Australian dollar, but the Australian economy is very strong. If you are sitting around the table here at the IMF, Australia's economy is one of the strongest among advanced economies. We didn't go into recession. We have had very strong employment growth. Unemployment in Australia is about half that in the United States. We have a very strong pipeline of investment happening in Australia. And of course, we are back on track to bring our budget back to surplus by 2013.

I think the value of the currency tends to reflect the underlying strength of the Australian economy and the view that international investors have of the Australian economy despite all of the international uncertainty that we experience.

QUEST: And the uncertainty that came from the election, from the very narrow majority, smallest majority of the prime minister, do you think as you look out to the length of this parliament, A, the government can sustain a full parliament? And, B, investors can be confident of that?

SWAN: Yes, I do. We've are a minority government, but nothing will change without strong economic management, our strong fiscal consolidation, and our understanding of the need to invest in the capacity of the Australian economy so we can grow sustainably. So whilst we have a minority government and we need the support of Independents, nothing will change when it comes to our approach to economic management, as we go forward.

QUEST: Wayne Swan, the Australian treasurer. In a moment we're back in Washington from the IMF. The head of the Swedish central bank will be talking these matters: exit strategies and what comes next?


QUEST: The meetings of the IMF and World Bank in Washington take place this weekend. And central bank governors and finance ministers from member nations are there. Stefan Ingves is the governor of Sweden's central bank. He joins me now, live, from Washington.

Governor, many thanks indeed.

We know the market now believes that a tightening of rates might be nearer, rather than further, in the case of Sweden. Is the market right to take that indication?

STEFAN INGVES, GOVERNOR, SWEDEN CENTRAL BANK: Whether the market is right or not, then time will tell, because we have a few more weeks until we have a monetary policy meeting. But generally speaking, when it comes to what is going on in the Swedish economy developments have been pretty good. Particularly considering what we went through last year.

QUEST: Right. The economy is picking up steam. Do you perceive and are you concerned in what you might --in what many are seeing as a currency war, a race to the bottom. That is potentially developing?

INGVES: Well, we'll see what will come out of this. One way of expressing what is going on now is that these conversations took time out for a couple of years while quite a number of countries were struggling with their financial sectors, in one way or the other. Now, when the acute issues have been taken care in the financial sector, this conversation comes back, because now we are back into discussing how to deal with global imbalances. And one of the consequences of global imbalances, of course, also conversations about exchange rates and currencies. And that is where it seems to be right now.

QUEST: The --I suppose, you know, there --I have to just basically just ask the blunt question, do you think that it is inevitable that there will have to be an agreement to rebalance and in some cases, say for example, with the dollar, accept that there will be a depreciation?

INGVES: It is very hard to tell what is going to happen going forward because people have been talking about global imbalances for let's say at least 10 years by now. And that means that these issues sort of tend to move to the surface and then apply (ph) on the agenda, once a year, once every six months, a little bit depending on what is going on, in the world. This has happened to be one of those instances where --

QUEST: Right.

INGVES: When it is time to talk about these issues again.

QUEST: The ECB talked about expecting a moderate rate of growth for the rest of this year. So clearly double dip is not on the agenda, but from your perspective Governor, does unemployment still remain to be the biggest issue across the continent?

INGVES: Yes, that is going to be an issue for quite some time to come, in Europe --but it will also actually very, I think, from country to country, because what we see right now is that some countries have problems on the fiscal side, others countries are quite successful when it comes to exporting goods and services. Some countries have a very favorable fiscal situation (ph) --

QUEST: Right.

INGVES: Which is the case in the Swedish case. And that means that over time, we are likely to see quite a varia -- quite a variety here when it comes to what happens on the unemployment side. But it's going to be an issue for some years to come.

QUEST: Governor, many thanks, indeed.

Have good meetings in Washington this weekend.

Governor Ingves joining me from Washington, the governor of the Swedish -- the Riksbank, the Swedish central bank.

Now, when you and I come back together after a very short break, the UAE has dropped a ban on BlackBerry.

What did BlackBerry offer to stay in service, in a moment.


QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.

This is CNN. And on this network, the news always comes first.

He's been called a man of unique courage. Human rights groups say that's a description of this year's Nobel Peace Prize winner. Liu Xiaobo is a leading Chinese dissident who's currently serving an 11 year prison term. Government and human rights leaders around the world are hailing the choice. China has called it "a blasphemy against the Peace Prize."

Chile's mine minister says the main rescue shaft should reach those trapped miners within the next 24 hours. The 33 men have been stuck 700 meters below ground since August the 5th. Early estimates said it might take until Christmas, in late December, to reach them.

A blast killed an outspoken governor and 19 other worshippers at a mosque in Northern Afghanistan during Friday prayers today. Some reports say it was as suicide bombing. Others say it was a mine that had been planted earlier. Mohammed Omar, the governor of the neighboring Kunduz Province had survived several previous Taliban assassination attempts. He had spoken out recently about Taliban attempts to unsettle his previously peaceful northern province.

BlackBerry users -- if you are a BlackBerry user in the UAE, tonight you are breathing a sigh of relief. Your machine is going to carry on working. The Gulf federation has canceled its threat to ban the Smartphone BlackBerrys. The UAE was planning to shut off service -- messaging, e-mail and Web browsing on Monday. Now, it says a deal has been reached with Research In Motion, the Canadian maker of the co -- of the machines.

BlackBerry service uses encrypted signals that are hard or impossible for governments to monitor. When contacted by CNN, Research In Motion said it couldn't and wouldn't discuss the details of confidential regulatory matters.

So what actually did BlackBerry agree to do to maintain service in the UAE?

The question to our correspondent, Errol Barnett, in Dubai.

ERROL BARNETT, CNN CORRESPONDENT: All the government would say when they made the announcement today is that Research In Motion, which makes BlackBerry, is now in compliance with their regulatory framework. We could not get more information than that.

However, a source of ours that's familiar with these talks tells us that this deal will allow the Emirati government to secure BlackBerry information through a hardware solution. So if we think about what the hardware is, we're talking about servers. These are the physical representations of the Web. They're the transit points for information to be shared through BlackBerry around the world.

Now, at the moment, all of Research In Motion's servers are outside the UAE. And that information is encrypted. It's coded. So only Research In Motion can give you that key to encryption. So if a server was, indeed, here in the UAE, it would allow the Emirati government to go through still a core process, show some evidence that they believe certain communications are leading to crimes and then possibly get access to that encryption information.

QUEST: The -- the argument, of course, is that whether or not the standards of which they can -- can go to court and get that information is less or higher than elsewhere.

But I wonder, Errol, was it ever realistic that the UAE would switch off BlackBerry service there?

BARNETT: Well, that's a good question, Richard. I mean, BlackBerry has about around 50 million, are the estimates, users around the world. Only half a million of them are here in the UAE. But keep in mind, Dubai and Abu Dhabi, these are considered, you know, the major business hub of the Middle East. So it's half a million BlackBerry users, but we're talking about multinational corporations, banks, security companies.

And so the clientele here is not the kind of people that they would want to scare away. Etisalat and Du (ph), the telecommunication companies here, were trying to figure out ways to help people with their deals --

QUEST: Right.

BARNETT: -- and their contracts. So there was a lot of suspicion that this ban would have never happened and that, in fact, the Emirati government was threatening a ban to bring Research In Motion to the table, to get some kind of deal. And it appears that it worked.

QUEST: Errol Barnett in Dubai.

An empire that was led by movie moguls and Hollywood starlets. MGM is now asking its debtors to OK a pre-packaged bankruptcy, in just a moment.


QUEST: It's a case of how the mighty have fallen. MGM, the Hollywood studio empire that brought us classic movies such as "Gone with the Wind" and the James Bond franchise, is filing for Chapter 11 bankruptcy. It's a pre-packaged plan with creditors under the bankruptcy laws in the U.S.

The company is trying to rid itself of $4 billion in debt. Now, that's a sizeable amount of money. The deal would give debtors 95 percent of MGM and hand the helm to Spyglass Entertainment.

Maggie Lake has more on MGM.


LAKE (voice-over): The roar of MGM's mighty lion has been reduced to a whimper. Once a powerful emblem of Hollywood's golden age, the studio was a production machine, thrilling audiences with stars and lavish musicals, such as "The Wizard of Oz".


LAKE: Now the home of the lucrative James Bond franchise can't afford to make the next installment. "Variety's" Peter Bart, an executive at MGM in the 1980s, knows the saga inside and out.

PETER BART, EDITORIAL DIRECTOR, "VARIETY": I think most Hollywood insiders have just thrown up their hands and said that MGM is a thing of the past.

LAKE: MGM's troubles aren't new. In the last 40 years, the company has changed hands multiple times, sold and bought three times alone by Las Vegas investor, Kirk Kerkorian. Though Kerkorian made a tidy profit, MGM has been hurt by a lack of leadership and the fact that many of its investors misjudged the movie business.

TUNA AMOBI, STANDARD & POOR'S: Three years ago, when just about everyone who -- who could breathe was jpg into, you know, film financing and the studios were all too happy to open their arms and -- and spread their risk. So fast forward to today. You know, the -- the market is not what it used to be. The business has changed and continues to change at a very rapid clips.

LAKE (on camera): One of the biggest changes, film libraries. DVDs used to be cash cows for studios. Revenue from the older titles would help fund new productions.

But the digital revolution has changed that. Now, instead of going to a store, buying a DVD and waiting until they get home, consumers have the option of downloading it from the Web and watching it anywhere -- even on their mobile phone.

(voice-over): As they struggled to adjust, studios have been playing it safe, funneling resources toward the surer hits.

AMOBI: I think we're seeing the likes of Disney and -- and Time Warner. And these guys concentrate on -- on branded films, kind of the event type tempo (ph) film that these conglomerates can, you know, exploit across multiple platforms. And that's where I think MGM is somewhat lacking here, where, you know, they don't have the theme parks or the broadcast networks.

LAKE: The ownership of MGM's vast library was also diluted slightly in the 1980s, when Turner Broadcasting, CNN's parent company, bought virtually all the MGM films made before 1986. But Peter Bart points out that Hollywood is the town built on relationships and the right management team just might breathe new life into MGM.

BART: Large conglomerates are big, clumsy operations, very often, that can't adapt to changes in the pop culture. That's the problem with big corporations.

But Spyglass can keep MGM as a relatively autonomous entity, even though its pictures are going to be released by a major. If they can do that, then their chances are much better.

You know, Leo the lion, it's a great tradition, isn't it?

It's a great brand. People understand MGM. And I think the audience worldwide would like to support it, if they were given something to support.

LAKE: Whether the makers of "Rocky" can stage a comparable comeback remains to be seen.

Maggie Lake, CNN, New York.


QUEST: The weather is upon us for this weekend.

Pedram Javaheri is at the World Weather Center.

And I'm hoping that you have a little bit of good cheer.

PEDRAM JAVAHERI, AMS METEOROLOGIST: I think the broad scale of it has some good news in there for you, Richard.

But the immediate forecast, a few showers out there we'll talk about momentarily.

But speaking of showers, take a look at the what's been happening over in Colombia. An isolated complex of storms rolled right through portions of Pamplona, Colombia and some video coming out to show you the destruction left in place. Again, a nice area there, a tourist destination -- 100,000 people call it home. We've had 11 reports of vehicles being washed away and a lot of injuries. Fortunately, no fatalities with this storm system.

But again, one of those convective type storms you see this time of year as it rolled through Colombia.

And let's take a look at other parts of the world. We have a lot to get to here.

And portions of Europe especially getting some showers and mainly around Portugal, Spain, a front beginning to roll on in here. Broad circulation offshore, but waves of energy are going to bring in a few showers and an isolated shower or two possible in the Southern U.K. and northern areas within, say, Paris.

But the general forecast here past tomorrow afternoon, pretty nice out there. We're looking at mostly sunny skies. Temperatures closing in on about 20 degrees, say around London.

Tomorrow, again, very light to moderate delays, if anything. Just some showers and breezy conditions. But, again, high pressure in place. As that moves on in here, some quiet weather ahead. But you can notice some of those thunderstorms to the south and also around Istanbul, Turkey and the Black Sea getting some stronger storms moving in onto that part of the world.

And another area getting very active weather, that being around the island of Hainan there in China, getting some very heavy rainfall. And some video quickly coming out of this part of the world showing the destruction, again, picking up record rainfall -- over 1,300 millimeters in portions of China. And this video out of Vietnam here, where they picked up several hundred millimeters of rainfall in the last couple of days. And their forecast, unfortunately, looks to keep some moisture in there, Richard, with some heavier rainfall to the northeast there in Hainan, up to 25 centimeters possible in the next 24 hours or so.

QUEST: Pedram, many thanks.

JAVAHERI: Absolutely.

QUEST: With that, have a good weekend yourself.

And that is QUEST MEANS BUSINESS for tonight and this week.

Thank you for making time to be with us.

I'm Richard Quest in London.

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