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QUEST MEANS BUSINESS

Voting on Jobs; Waiting for the Fed; Austerity in Athens; Cargo Checks; Security Upgrades

Aired November 2, 2010 - 14:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The threats are real. The stakes are high. And we must, and we will, prevail.

(END VIDEO CLIP)

RICHARD QUEST, CNN INT'L. ANCHOR, QUEST MEANS BUSINESS: Cleverer, smarter, the U.S. view on the future of aviation security.

I'm Richard Quest, tonight, live from Frankfurt, in Germany. Where, yes, I mean business.

Good evening.

Tonight, from Frankfurt, where IATA the aviation organization is holding its forum on aviation security, AVSEC. That is the reason we came, because following the attacks, and the attempted attacks from Yemen, this was a good chance to hear about the future of aviation security and what needs to be done.

Little did we know that while we were in Germany another bomb would be sent, this time to the Chancellor of Germany Angela Merkel. It has been received at the chancellery and this device, which did not explode, traveled on a cargo plane. We need to find out more about the details of this device. Our correspondent in Berlin, tonight, Diana Magnay joins me on the line.

Diana, we know now it traveled on a cargo plane, it didn't explode, what more do we know?

DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: Richard, what we now know about this suspicious package, which arrived at the chancellor's office around eight hour ago, now, is that it did contain explosives. Police carried out a control explosion on it. The interior minister say that it was obviously intended to cause harm. That it was addressed to the German chancellor by name, and that it originated from Greece, sent from Greece two days ago.

And he said that this explosive package had to be looked at in the context of this series of letter bombs and explosions that we have been seeing targeting foreign embassies in Greece, in Athens, over the last couple of days. The interior minister said two people have been arrested in connection with those series of attack in Greece. And they belong to a left-wing militant group that uses explosives and has done since 2008, but that this is the first time that this kind of attack has been carried out, outside of Greek soil. So that is what we know about that suspicious package.

The authorities here have also raised the alert, and issued warnings to states around the country, to government ministries around the country, asking them to really be on the lookout for any posts that might come in, and any posts coming from Greece, Richard.

QUEST: The question tonight, though, because also whilst we are on the air I'm also seeing reports, bear with me, that in Greece two suspicious packages are in the cargo section of Athens airport. Police are checking those at the moment. Airport traffic is not affected.

Diana, do we know, are we able to say, without rampant speculation, whether there is a connection with the Yemeni devices? Is it coincidence? What can we say tonight?

MAGNAY: Well, the interior minister did respond to that question and he said so far we cannot see any connection with those packages from Yemen, other than that this package also arrived through cargo, via a plane. So that has been the only connection that they can see at the moment. And obviously, after those packages from Yemen, after the alert was raised last week, and they did of course come via Cologne, the interior ministry has been looking at any possible sort of security lapses that do exist in the German cargo system. And obviously that will also be looked at, especially in reference to anything that comes out of Greece right now.

QUEST: All right. Diana Magnay, our correspondent in Berlin. When there is more to report, Diana, please come back to us here in Frankfurt.

Appropriately and timely, we are, of course, talking about aviation security at the AVSEC conference, the aviation security conference of IATA. And joining me is the Director General of IATA, Giovanni Bisignani.

Director General, tonight, more devices carried by cargo. The call must be, surely now, for greater security of cargo.

GIOVANNI BISIGNANI, DIRECTOR-GENERAL, IATA: Absolutely. Yes, what are the numbers? 26 million tons of cargo, is handled by freight. In value terms it is 35 percent of the total freight is handled by air. What can we do to improve? We have a supply value chain that is effective in many countries, U.S., U.K., and many others. In other countries, we as IATA, are help in order to improve it.

QUEST: But you would agree that this has been the weak link of the industry, that has now been exposed.

BISIGNANI: Weak, also if we are putting into place some very effective system, but we see that something must be improved. And there is space and room, especially in many countries we are helping them in order to increase the security value chain, because we have seen we have some gaps.

QUEST: Giovanni, you said in your speech today that you did not want a situation where there would just be rampant legislation, new rules for the sake of it. But isn't it inevitable that there does need to be more rules?

BISIGNANI: I would say that first of all have a clear assessment of what has happened, in the case of Yemen and in those ones. As soon as we know this, and this is information that intelligence governments will provide, we will work with governments in order to see what can be implemented. For example-

QUEST: But you fear what? You fear just rules that will hit the industry?

BISIGNANI: I have to see. If they are rules that are important and can be managed (ph), we have to assess them. We have to make a risk assessment on what can be handled in an effective way. For example, information is key. We have seen that the intelligence has worked very effectively in this case. We as IATA can provide much more accurate information with a new system that we have, eFreight. We all the information digitally handled and it is up to customs to start requiring this and it is a great tool.

QUEST: Cleverer, smarter, was what we were hearing earlier.

BISIGNANI: Yes.

QUEST: Giovanni, many thanks indeed.

BISIGNANI: Thank you.

QUEST: Cold night in Frankfurt, but many thanks for joining us here.

Giovanni Bisignani, the director general of IATA. As Giovanni was saying, more rules and regulations, but of a different kind, cleverer and smarter. That was the message from the head of the U.S. Transportation Security Administration, John Pistole, who was giving a keynote speech. The head of the TSA was quite clear. Something needed to be done but it couldn't just be a cookie cutter approach. I spoke to him after the speech and wanted to know what needed to be done.

(BEGIN VIDEO CLIP)

JOHN PISTOLE, TSA ADMINISTRATOR: We are looking at a very determined enemy. We know that they are using creative design both for the type of device, the IED, and the concealment method. And the fact that they have targeted now cargo shipments on cargo planes does take it to a different level.

QUEST: Within the industry it has been an open secret, though, that cargo was the weak link in the chain, here. That is true, isn't it?

PISTOLE: There are a number aspects to that, as we know, and it is clearly the screening for cargo worldwide. It is not the same as it is for passengers, especially, in the U.S. and Europe, and other areas. So it is something that we have been looking at, but it is a significant challenge in trying to provide the same type of screening and security to air cargo as it is for passengers, obviously.

QUEST: The Yemen plot was discovered because of intelligence. Does that mean, can we say, the scanning if you like, failed?

Well, no, I would say the specific and credible intelligence that the Saudi authorities developed is what lead to it. Obviously, we try to be risk-based, intelligence driven. So if we have specific and credible intelligences as we did over the weekend, that obviously greatly helps us take action. That would disrupt a possible plot.

But there is many different types of screening, including the physical hands on type of screening, the X-ray and advanced technology X-ray, the explosive trace detection, K-9s, any number of things. I have heard some reporting that K-9s would not have picked on this PETN. That is not the case. Dogs can pick up on PETN.

QUEST: The TSA and the Homeland Security is directive, from the 100 percent of cargo and passenger planes screening, even in the recent memo, that was put out by the TSA earlier this year, admits, downstream, down route, in foreign countries, that is not possible.

PISTOLE: Well, I wouldn't say it is not possible. It is just the challenge of are we using a risk-based intelligence driven approach? So we look at the supply chain. Are there trusted forwarders of freight and cargo? How do we verify that? And so we have a high level of confidence that packages that are assessed as being high risk, that are on cargo planes, at least coming into the U.S., are being properly screened. But is that universe of packages that go on cargo planes themselves, not just passenger planes, but they go worldwide, that we do not yet have that high level of confidence.

QUEST: What do you believe is a realistic regime, for cargo?

PISTOLE: I think it is important here, to work with the private industry. To work with government authorities in civil aviation, to ensure that whatever we do has a practical import so that it is not something that we would just issue and edict, that is literally not capable of being complied with in the near term. So we look at phasing in different layers of security, as we have done, for example, we put in the ground hold on packages coming out of Yemen. We have a team at Yemen that is looking at their policies, procedures, and protocols. How they are screening. And so that is part of it.

And then we are looking worldwide on high-risk packages. Again, we don't define that publicly, because we don't want the terrorists to say, OK, here is what I'll do to avoid being a high-risk packaged deliverer. So we are looking at what makes sense with our partners in private industry in other government agencies to accomplish that.

(END VIDEOTAPE)

QUEST: That was John Pistole, the head, the administrator of America's Transportation Security Administration talking to me earlier. We'll deal with more of these security matters later in the program.

But when we come back, in just a moment, Americans are voting across the United States, in the midterm elections. Within 24 hours we'll know if the U.S. Fed is going to introduce quantitative easing. We'll talk about those after the break. QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: Voting in the United States is brisk and underway. And the Democratic Party, if poll are believed, are headed for what seems to be for defeat in the crucial midterm elections. The elections are expected to hand the Republicans control of the House of Representatives and if there was to be some sort of landslide, the Senate would go, too.

This is the scene as Christine O'Donnell voted. She is one of the main Tea Party candidates. The conservative, grassroots movement has turned public dissatisfaction with the economy to its advantage. It is part of the reason Republicans are expected to gain around 50 seats in the House. Now that is far more than the 39 or so, 36 that they need for a majority.

Campaigning has been fierce and expensive. In all, the two sides have spent more than $3.5 billion o reaching out to voters. It is the costliest non-presidential campaign ever.

If the Democrats do lose control of the House, then it makes President Obama's task for the two remaining years of his first term that much more difficult. It raises questions of what can be done? Maggie Lake is with us now from New York.

Maggie, we mustn't pre-empt the good voters of the United States, but it doesn't look good for Obama.

MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT: It doesn't, Richard. And that is why you are seeing stocks rallying throughout the day. The market is getting excited about the prospect of Republicans making big wins. But you know, we've been talking a lot about opinion polls. Let's see what happens when people actually have to put their money behind what they are thinking. We have been checking out some online trading sites.

Intrade, for one, they have been sort of handicapping what they think is going to happen, or how people are betting on the outcome of this market. And take a look at this: 94 percent chance right now, that the Republicans take the House. We sort of knew that. That was a given, we expect big gains there.

The real wild card is, of course, the Senate. And this has been very interesting to watch all day. It has sort of been bouncing around. You could say almost too close to call. Right now the current betting has about a 53 to 54 percent chance that the Republicans take the Senate. Now that is not being reflected in opinion polls, or some of the polls by political pundits, and again, that has been moving. We can expect that part of this trade to sort of pick up as we get some of those key races start to come in. Again, the polls don't close for a while.

But listen, we should point out, and you know this as well as I do, that the investment community tends to lean to the Republican side. But I was talking to a trader an I asked him why that is? Why do the traders or investors want to see the Republicans win? Here is what they had to say.

(BEGIN VIDEO CLIP)

LINCOLN ELLIS, STRATEGIC FINANCIAL GROUP: What is going to happen with the expiration of the Bush-era tax cuts? And that is really what is at stake. Whether or not the Republicans gain both the Congress and the Senate-or the House and the Senate, rather, is rather immaterial and it statistically shows that as well. But I do think that the floor, or Wall Street, in general, would like to see a little bit less expansionary policies out of government, and that would be a net positive for the markets going into this third year of the Obama administration.

(END VIDEO CLIP)

LAKE: There you go lower taxes, less regulation, and also a little bit of what is seen as sort of the anti-business sentiment. They are hoping that would be rolled back with a Republican win. But, Richard, I have to tell you, that may be on the wish list for Wall Street. But even if Republicans take the gains it is not clear that the business community is going to get the lower taxes they are looking for. Remember we have a huge deficit issue. It is something we talk about a lot. And you are going to have to find the money if you are going to cut taxes. That is going to be very, very difficult to do. So it could be a sobering reality for Wall Street, but right now they are certainly pinning their hopes on a Republican victory.

QUEST: Maggie Lake, who is in New York for us, tonight.

Maggie, many thanks.

Let's go up the Eastern Seaboard to Cambridge, Massachusetts. Our old friend, Ken Rogoff, the professor of public policy at Harvard. Professor Rogoff joins me now.

Always good to have you, Ken, and we thank you for giving time today.

KEN ROGOFF, PROF. PUBLIC POLICY, HARVARD UNIVERSITY: Thank you.

QUEST: The risk and the dangers to the U.S. economy of a split government, with Congress one way, or at least the split Congress, even, and the president of another party? What's the risk?

ROGOFF: Well, the obvious risk is paralysis at a time when the economy is hurting. You might want to see decisive action in some areas and they might not be able to do anything. On the other hand, I do think it will pull President Obama to the center that is a good thing.

QUEST: But if that-if he does move to the center, or there is a shift across, is that the right thing? Or do you believe that there needs to be another stimulus, there needs to be more quantitative easing, there needs to be more activity to push the economy further, which won't happen if there is a split government?

ROGOFF: There definitely needs to be another stimulus, but I think in the form of infrastructure, spending, things to promote growth, education, and not this short-term making the government bigger, which is what we saw in the first round. The United States needs to look at the longer term and I think that kind of stimulus spending, perhaps with some lower taxes would be welcome.

QUEST: The quantitative easing that we are expecting from the Federal Reserve, about this time tomorrow, to be announced, is it necessary? And if it is, what sort of sum do you think they are going to come up with.

ROGOFF: Well, there is definitely necessary. Prices are very soft. We are virtually facing Japan-style deflation. The Federal Reserve needs to move decisively. I don't think it so much about how much they are going to spend, as communicating to markets what they are trying to do. Because I'll tell you, Richard, people are confused. I get e-mails from all over, you know, thinking the Fed has gone crazy, it is the end of the world. It is not, but they really need to be clear that we're not trying to fix everything with quantitative easing. We're just trying to prevent prices from falling, from being too soft. We are trying to prevent monetary policy from making it worse. We are not going to solve all of your problems.

QUEST: And that, of course, is a very valid point, Ken, to this question of getting growth moving again. Because quantitative easing at these levels is unlikely, bearing in mind the current economic situation, to do much for growth is it?

ROGOFF: Well, that is absolutely right. But if they don't do anything then the big debt around the American economy could become a bigger burden, because if prices and wages are falling it costs more to carry that debt. They don't want that to happen. They don't want monetary policy to make things worse, as it did in Japan.

QUEST: Finally, and this is the $64 billion question, did President Obama fluff the whole economic agenda, with what he did. In the sense of if he does get a drubbing tonight, is it a justified drubbing?

ROGOFF: You know, honestly, I think his single biggest mistake was telling people if you do it my way things are going to get better pretty quickly. Laying out too optimistic a scenario, not looking enough at the history of financial crisis, and now because of that instead of saying it is going to be slow, we are going to do our best, he owns this recession. People are mad. And unfortunately, it was a political mistake more, I think, than an economic mistake that he made. Although, certainly he expanded government more than I would have liked to see.

QUEST: Ken Rogoff, who is in Cambridge, Massachusetts.

Ken, lovely to have you on the program, as always. We thank you for joining us tonight.

ROGOFF: Thank you, Richard.

QUEST: When we return on QUEST MEANS BUSINESS from Frankfurt, our agenda turns from economic fear to the real fear of terror. Tonight, that is in Germany, it is in Greece, and we will explain why. QUEST MEANS BUSINESS live.

(COMMERCIAL BREAK)

QUEST: Now earlier in the program we told you about that package sent to the office of the German Chancellor Angela Merkel. Authorities say the package originated from Greece, well, while we learned that fact, in Greece itself there has been a spate of bombs over the past few hours.

Let me update you. The latest two suspicious packages, which have been found at the Athens airport cargo terminal; but it is not just that. Bear with me I'll tell you more. Earlier today, parcel bombs outside the Swiss and the Russian embassies exploded. No one was hurt. Police also intercepted other devices addressed to the Chilean, Bulgarian, the Germany embassies, these attacks began yesterday. When a package addressed to the Mexican embassy exploded in the hands of a courier, causing her minor injuries. Three additional letter bombs were found and detonated by police. Two men suspected of plotting the attacks were arrested.

Greece, you know will know, has been suffering financial hardships and acute austerity measures in the run up to the local elections this week. Political pressures are rising. The police suspect that the local left- wing extremists are behind these attacks. If that is the case, then this is an interesting and serious turn. Elinda Labropoulou is in Athens for us tonight.

It is one thing to say Greek extremists were involved, but the size and scale, and the number of devices, is very worrying tonight, Elinda?

ELINDA LABROPOULOU, GREEK JOURNALIST: It is worrying. I mean, you have been counting, and we have had more than a dozen in the last two days. Now, that is a lot. And it has been causing chaos in the city as well; because obviously we are talking about police running from one site to the other. We are talking about people worrying about what is going on around them. So it hasn't caused a-it hasn't created a very good climate ahead of elections. Or the stability that Greece has been looking at-

QUEST: Right.

LABROPOULOU: -in order to get across to the rest of the world the image of a stable country, which is what it needs-

QUEST: Right.

LABROPOULOU: -in order to attract-can you hear me?

QUEST: Right, I can Elinda, I can just hear you. But let me ask you this question. Tonight, these two suspect packages at the Athens airport, what do we know about them? And is there, as I asked Diana Magnay earlier, is there any suspicion of a Yemeni connection to any of this?

LABROPOULOU: At the moment, we-there doesn't appear to be a connection. I mean, the Greek authorities, the police have not seen a link between the two. And experts here are saying it is more likely to be the work of local groups. That is partly because of the arrests that we had yesterday. The two people that were arrested, although they were armed, they were able-they did not use their weapons-they left a lot of traces, they were not able to flee the premises. So from that viewpoint, it all points towards the work of amateurs. Which would not lead to any connections as such.

Now, the two parcel bombs that, or potential, the two packages in the airport, we don't know very much about them yet. We don't know what they contain at this point.

QUEST: Elinda, please, the more you do find out more about those devices at Athens airport, please come back to us. Elinda Labropoulou there, in Athens for us tonight. As you can tell there is a lot on the security agenda. And that is one of the reasons why we are here in Frankfurt tonight, where the aviation security conference of IATA, the airline organization, has been taking place.

When we return in just a moment, the Democrats are in trouble in the election. And one of the reasons was the jobless rate at more than 9 percent. Is it inevitable that jobless numbers will remain high for the foreseeable future? Head of Manpower, after the break.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest, tonight live from Frankfurt in Germany, QUEST MEANS BUSINESS.

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

And there is much we need to tell you tonight.

Blast after blast after blast and dozens of lives lost -- that's the situation in Baghdad today, after 14 explosions rocked the city. The string of coordinated attacks appeared to have targeted Shia neighborhoods. At least 50 people were killed. The number of wounded has climbed to 180. Most of the explosives were placed in cars. Three were roadside bombs.

It is election day in the United States, what many predict will be a day of reckoning for President Obama and his Democratic Party. American voters frustrated with the slow pace of economic recovery and the fact that millions of Americans are still out of work, they may be poised to hand Republicans control of one, and maybe both, houses of Congress.

Here in Germany, the interior ministry has confirmed that explosives were found in a suspicious package that turned up at the office of the chancellor, Angela Merkel. The parcel was discovered during a routine inspection of the mailroom. No one was injured. The minister says the parcel's construction resembled other suspicious packages found at the German embassy in Greece and had been sent to Germany two days ago from the country.

An American-born militant cleric was charged in abstentia in Yemen today. Prosecutors accuse Anwar al-Awlaki of incitement to kill foreigners. The authorities are linking Anwar al-Awlaki to the Fort Hood shootings and the Christmas Day bomb attempt. He's a top figure in Al Qaeda in the Arabian Peninsula, the group suspected in the weekend plot to smuggle bombs in air cargo shipments.

Now, we'll have more from the security conference here in Frankfurt in a moment.

But let's turn our attention to mid-term elections in the U.S., where they are voting at the moment. In fact, it is just mid-afternoon in the Eastern Seaboard of the United States. The big issue, of course, has been the economy. And the overriding topic, jobs -- or, perhaps I should put it more bluntly, the jobless. As you can see from these charts, things have been bad for a while and they're not getting better any sooner. U.S. unemployment remains stubbornly high, even though the economy is growing. Voting is underway. This was the scene in a key state, Ohio, earlier, a key battleground. Former President Bill Clinton was among the Democrats campaigning to reach these voters in Westchester.

We need to talk about the jobless situation.

And joining me now on the line, Jeff Joerres is the chairman and chief exec of Manpower, one of the world's leading recruitment companies.

He joins me now from Milwaukee in Wisconsin, another one of those states that we will be watching in the hours ahead.

Jeff, normally we do talk an international agenda with Manpower.

JEFF JOERRES, CHAIRMAN & CEO, MANPOWER: Right.

QUEST: But tonight I'll think you'll forgive me if we focus on the United States.

Jeff, 9.6 percent and not coming down any time soon. This is the reason or one of the reasons for the Democrats' troubles today.

JOERRES: Oh, no doubt. I think that it's the prime reason. When people talk about the economy, it becomes very personal. And the personal part is am I employed?

Am I feeling good about my employment?

Is my neighbor or brother or sister unemployed or employed?

And -- and that's really what's going on right now and the sentiment of -- of what's happening in -- in today's voting.

QUEST: With that in mind, where are the jobs?

Because, obviously, temporary employment is one of those areas that normally picks up the slack and is an early barometer that things are getting better -- temporary, longer working, over time.

Are you seeing that yet?

JOERRES: Oh, no doubt. I think what we're seeing in the U.S. is some structural changes. And -- and there's -- they're in a couple of areas. One is, is that companies are global and companies need to be agile. That global and agile comes down to what is their workforce looking at and how are they looking. So what you're seeing is we've been up in the U.S. in light manufacturing almost 50 percent year over -- year-over-year for the last three quarters. Our business in total is up over 30 percent -- it was closer to 35 percent.

What we're seeing is companies are not going to hire in anticipation of demand. Very different than previous recoveries.

QUEST: Right.

JOERRES: So you need to stimulate demand before you get employment.

QUEST: You're talking about a chicken and an egg situation, because to stimulate demand requires the QE that we may see from the Fed, a possible stimulus package from the U.S. Congress, which is likely, bearing tonight's results.

Factor that in, Jeff. Unemployment is not coming down any time soon.

JOERRES: Right. So the -- one of the ways to look at that is when does the consumer -- because employment -- hiring more people creates more disposable income, which fuels the economy, which fuels the production. Because we don't have the employment, you're right, it is the chicken and the egg.

But what we are seeing is -- is consumer savings is going up and that there is more of a comfort level in spending and we are getting some CAPEX spent.

So it is moving the -- the economy forward slowly, but forward. So what we would anticipate is, is that we are in this slow growth mode for a few quarters, maybe two or three, and then we're going to start to see the consumer kick in. And then you're going to start to see more employment.

But we are probably in, you know, 8 -- 7, 8 percent unemployment for some period of time, which is very unusual for the U.S.

QUEST: And with that thought in mind, those days of 4 -- 3, 4 percent, the -- the new definition of full employment, probably no time soon either, at least maybe not in the next three to five years.

JOERRES: I think when you look at three to five years, you may be right. I'm not convinced that -- that the U.S. can't get back to that 5 percent bar or a little bit less than 5 percent. It's just going to take a lot more work in the job creation and the way jobs are being done and the work practices are going to change during that period of time.

QUEST: Jeff, thank you for talking the U.S. Next time we talk, of course, we will widen our agenda more globally. But tonight, of course, it makes appropriate sense, with the mid-terms.

Jeff Joerres joining me from Wisconsin.

A buying mood on Wall Street, but is that buying mood predicated by the fact that President Obama might be in trouble?

Stephanie Elam is at the New York Stock Exchange for us tonight.

A slightly perverse way that the party in power is about to lose power, but that's what it seems to be.

STEPHANIE ELAM, CNN CORRESPONDENT: Yes, Richard, and that generally is not something that is seen as a bad thing around these parts. The markets like a little bit of gridlock. They think that's a good thing because there has to be compromise there.

And you take a look at the market today, the Dow had been pretty much hanging out in positive territory all session long. In fact, the Dow is actually pretty close to its highest level in more than two years. So we're keeping our eyes on that.

But you're right, today is all about elections across the country. The Fed meeting is also going on right now. The Federal Reserve has started its meeting. Stocks are really being held down by the lower U.S. dollar, which fell after moves by Australia and India to raise their interest rate.

So all of these things factoring in here. That weak dollar really actually helping out the markets -- Richard.

QUEST: Now, we need to talk about that weak dollar. I was looking on my -- one of my apps about -- I mean, if you take the Aussie dollar, the U.S. is now parity, similar with the Canadian dollar. The pound has gained some 15 percent against the U.S. currency. Look, if QE2 comes in tomorrow, that pushes down the dollar, because long-term rates comes down, too, doesn't it?

ELAM: Yes, this is -- this is something that's been going on for a while. If you just talk to any trader down here over the last three months, they've mentioned the dollar and basically said, hey, look, if the dollar is up, stocks will be down. And if it's down, then stocks will be up.

And so we actually went ahead and put it on a chart so that you could see actually what it looks like. And look at that cross angle that you have between the two there. You'll see, for the most part, the dollar has fallen, the market has risen. And the main reason here is the Fed. One day, Wednesday, we expect the Fed decision to come out, but it's already been factored into the market since late August. And the market expects the central bank to announce a plan to buy up to about $500 billion in Treasuries over the next six months. And that means 500 billion new dollars will be coming into the economy if that happens. That could hurt the overall value of the dollar, but it also makes stocks worth more. So that's a relationship that we've been seeing there. And that trend is likely to continue.

Of course, Richard, that's based on the fact that if the Fed does exactly what everyone thinks it's going to do.

QUEST: And you and I will probably be talking about that at this time in 24 hours from now.

Stephanie Elam, who is in New York tonight, at the New York Stock Exchange.

It's a busy day, as you can tell.

And when we have -- we haven't finished, by a long way.

When we come back in just a moment, we will not devalue, we will not rescheduled. We will take our painful medicine and we will put things right -- the views of the Greek prime minister. You'll hear him next on QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

QUEST: welcome back to QUEST MEANS BUSINESS, live tonight from Frankfurt in Germany.

Throughout the program, we've been talking about the dozen or so improved devices -- explosive devices that have gone off in Greece. We are still waiting further information on that -- the causes and those people behind it.

Greece, of course, has been a country beset by woes and problems, mainly financial and economic, as the country came close to bankruptcy. But the Greek government has said throughout that it will not default on its debt. It goes further and says it will not restructure the debt, but will take the painful necessary -- medicine necessary to put things right.

Now, last week, I spoke to the Greek prime minister.

I asked him if it was possible for Greek economic recovery to remain on track bearing everything that was taking place.

(BEGIN VIDEOTAPE)

GEORGE PAPANDREOU, GREEK PRIME MINISTER: Not only are we on track, but we have -- we have promised to -- to cut our deficit by 5.5 percent. That's a huge cut. I don't know how many countries do that. And we will actually be exceeding that, even though the starting point will be slightly different.

QUEST: So for absolute clarity, any talk of rescheduling of debt is - - is still completely and utterly not on your agenda?

PAPANDREOU: Absolutely. Mr. Quest, I'm very -- I'm very clear on that. We -- we believe also that as -- as the -- the signs are showing and the way we're going, we'll be on track in the next few years and in 2012 we will have a very low primary deficit -- debt, sorry. And -- and we are looking to see growth in 2012. And that makes our debt burden very sustainable.

QUEST: A final question, Prime Minister. We've had strikes and demonstrations in Greece. We've had them in Spain. We've got them in France. The U.K.'s just introducing some very severe austerity measures.

Prime Minister, is there a danger of fragmentation within European society?

PAPANDREOU: Well, that's a good question, Mr. Quest. The -- I would say, first of all, that in Greece, the Greek people have shown great maturity, obviously painful. These were very painful changes. But they've shown great maturity in -- in realizing that this crisis is real and a dire one and that we needed to take difficult measures. And we are seeing results.

But you are right that we don't have this balance that could create problems of cohesion, problems of splintering. But I do hope we have the - - the -- the tenacity and the -- and the capability to understand.

(END VIDEO TAPE)

QUEST: That was the Greek prime minister talking to me last week. And I emphasize that conversation took place before, of course, the events of today, with the various devices that have been found and exploded in Greece.

Now, talking of explosives, we are in Frankfurt because this has been the scene of AVSEC, the IATA Aviation Security Conference. And when we come back in a moment, we're going to talk about what needs to be done on the policy front and show some of the gadgets that keep us safe in the air.

QUEST MEANS BUSINESS live in Frankfurt.

Good evening.

(COMMERCIAL BREAK)

QUEST: We're here at the AVSEC security conference in Frankfurt, where after the discovery of bombs carried as air cargo last week, everyone is in agreement that something needs to be done and that security for air freight, often the Cinderella of the aviation industry, something needs to be done to tighten it and make it more secure, certainly for when air freight is traveling on passenger cargo planes.

Germany's deputy interior minister explained to me earlier why it's a tough task to sort this out.

(BEGIN VIDEOTAPE)

OLE SHROEDER, GERMAN DEPUTY INTERIOR MINISTER: It's just difficult, because the amount of cargo is so big and -- and the cargo, having cargo and sending cargo around the world is of great interest to all of us.

QUEST: We're now getting to a situation where passengers are angry because of delays in airports, cargo seems to be a great risk once -- a new threat, security within airports and within travel seems to be something of a bit of a mess.

SHROEDER: I don't think so. We -- we need security out of...

QUEST: We need it, but it is being done?

SHROEDER: -- out of one hand and -- and if we -- we are still on the way. We have to evaluate the system from day to day and we have to improve the system every day.

(END VIDEO TAPE)

QUEST: Germany's interior ministry spokesman.

And I need to make it clear, we, of course, spoke to him this morning, and that was before the explosive device was found at the office of Chancellor Angela Merkel.

Security for the traveling public has become a pain in the proverbial, often seeming to be more officious than efficient, with lines that can stretch to the parking lot. It's a worry as to what can be done.

But as Ayesha Durgasee -- Durgahee has been discovering right here at this conference in Frankfurt, there are new technologies on the way that might make the whole thing a lot easier.

AYESHA DURGAHEE, CNN CORRESPONDENT: With security measures very much on the agenda, the latest screening technology is also on show here, like one of these -- the -- I'm sure you recognize this. This is a swab sampler that you see at the baggage screening areas at airports, where they swab clothes and baggage. And the people who are attending the conference here can actually see how this technology works and what the air -- the airport workers are actually looking at on the screen.

So, Daniel (ph), if you can just show me what actually happens to the swabs.

UNIDENTIFIED MALE: Oh, absolutely. So the operator would take a sample of the item using the swab sampler. The particles are picked up by the swab itself. The swab is introduced into the system. It's just an analysis of the particles. Within eight to 10 seconds, they'll have a readout and identification of the potential threat, in this case, it's PETN. And as you see, the screen actually turns red as we want to give them a visual alarm.

DURGAHEE: One of the frustrations that passengers have is having to take off their shoes and put them on again at screening areas at airports. But with this machine, they scan the footwear without having to take them off, which speeds up the screening process.

One problem that transit passengers often face is that when they buy their

(INAUDIBLE) at one airport, they find they can't take it on board when they are flying out of another. But new E.U. rules next year will change all of that. And there are machines that are designed to scan the larger bottles.

Is that right, Angus?

ANGUS DE VILLIERS, KROMEK SECURITY: That's absolutely right, Aisha.

This is a system which makes a fundamentally complex process very simple.

We take the bottle.

DURGAHEE: Yes.

DE VILLIERS: We scan the bar code, which tells the system what the bottle is. We place the bottle in and we close the lid. We press our search button, which identifies from the bar code the bottle is a bottle of Smirnoff vodka. And we press scan.

Now, what's happening now is the x-ray system is moving the bottle within to an optimum scanning position. And it's putting an x-ray beam through and it's measuring the x-ray response of that bottle, comparing it to a known good bottle and it's saying whether it passes or fails, because, from a security point of view, it's far simpler to ask the question, are you what you say you are, than what are you?

And, as you can see, the bottle has failed, which means it's not Smirnoff vodka. And the point is that with the normal human senses, if you look at that, it looks like a bottle of vodka, it's the same weight as a bottle of vodka, but it's not until you actually use your sense of smell that you can see that it's actually paintbrush cleaner.

DURGAHEE: Quite

DE VILLIERS: Which is a flammable liquid. And that's how we do that.

DURGAHEE: So with all the gadgets and the technology on show here, it's all about the three Ss -- being searched, screened and scanned.

QUEST: Ayesha Durgahee with the gadgets that will make it easier for us to travel in the future.

Now, I'm not sure I need the next gentleman too much.

Guillermo Arduino at the World Weather Center. It is cold in Frankfurt. It's probably chilly over large parts of Northern Europe and it's not going to get warm any time soon.

Is that the gist of it?

GUILLERMO ARDUINO, CNN METEOROLOGIST: Yes, it is. And you -- you may get some rain tomorrow and the next day. A 50-50 chance. I think that Friday is the only day when you're going to see OK conditions. It is the arrival of these systems over here. But I want to focus on the low pressure center in south in Italy -- bad. Look at this landslide in Mesta (ph). It's toward the northern sections of the country. All across the peninsula we have bad weather. We have had rain. We have had winds. And we will continue to see, unfortunately, the -- the rain. And irregular terrain is where we have -- we may see problems we saw lately there in Italy with the landslides.

Also in Britain, London is OK. You know, it's going to be breezy, rainy in the Midlands and in the southern parts of Scotland. There are some storms popping up right now. So these two areas also very windy in Amsterdam here, in the coastal parts especially.

So Frankfurt, no complaints taken, because compared to the north and the south, you're doing really nicely. Fourteen in Vienna, 14 in Berlin, 12 in Kiev, a little bit warmer in the south. That's about it.

Let's see airports now. I told you, Amsterdam here with the winds; maybe some delays at Dublin and Brussels, with windy conditions. London, no delays but some rain showers. Copenhagen, again, all coastal sections there with very windy conditions. Zurich and Vienna looking OK. Rome much better after so many days. Berlin here with some windy conditions. Rain here and there and some fog in Madrid.

So that's about it -- Richard, Friday the best shot for you.

QUEST: Many thanks, indeed, Guillermo at the World Weather Center.

And when I come back in Frankfurt, we'll have a Profitable Moment. And security is our major concern.

QUEST MEANS BUSINESS.

Good evening.

(COMMERCIAL BREAK)

QUEST: Tonight's Profitable Moment.

Cleverer, smarter intelligent space -- that's the goal of good aviation security, as John Pistole, the American TSA head, told us on this program tonight. It's a tremendous task to redesign the architecture of the security systems, but one that needs to be done. For too long, security procedures have been led one on top of the other, responding to the latest crisis -- shoes, liquidity and now cargo. It just adds layers of checks and delays. This piecemeal approach can only go so far. And as Giovanni Bisignani told us tonight, we can't have security lines all the way to the car park.

Everyone agrees it's time to start from scratch. It's the only way if security is not to bring commerce to a grinding halt.

And that's QUEST MEANS BUSINESS for tonight.

I'm Richard Quest in Frankfurt.

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

Fionnuala Sweeney is right now.

END