Return to Transcripts main page


Ireland's Austerity Plan Spreads The Pain To Welfare, Public Job Cuts, Higher Taxes; Mining Dangers; Insider Trading Arrest; Passenger Protest; Housing Gloom; Debt Gap

Aired November 24, 2010 - 14:00:00   ET


BECKY ANDERSON, GUEST HOST: The cuts of the Irish, the prime minister says no one will escape the pain.

From Lisbon to London, unrest over austerity spreads.

And closing in, a major insider trading probe leads to its first arrest.

I'm Becky Anderson in for Mr. Richard Quest. This is QUEST MEANS BUSINESS.

Good evening from London.

Ireland is beginning four years of hardship, the painful price of fixing its broken economy. We knew the axe was about to fall and now we know where. The government is to slash welfare, wages and thousands of jobs as it struggles to rid itself of the biggest budget deficit in Europe. Now, this is what austerity looks like for you. The government is cutting $20 billion between and now 2014. Two thirds of those savings will come from spending cuts, the rest are going to come from tax rises, welfare spending and public sector wages will take the biggest hits.

And income tax will kick in on lower salaries bringing in more money; 45 percent of workers don't pay income tax at the moment. And that is about to shrink to around 35 percent. And get this, the minimum wage is going to fall to just over $10 an hour, in a drive to stimulate job creation.

You can see these cuts are pretty steep by anyone' s standards. Ireland's savings are equivalent to 4 percent of it's annual GDP. The U.K. making $128 billion of cuts; about 4.5 percent of projected GDP, in 2014, according to the "FT", at least. And Germany cutting more than $100 billion over four years, 3 percent or so, of GDP by 2014.

Well, the Irish prime minister is trying to rally spirits in a small country which now shoulders a heavy burden of austerity.


BRIAN COWEN, PRIME MINISTER OF IRELAND: It is a time for us to pull together as a people. It is time for us to confront this challenge and to do so in a united way. To do so in a way which ensures those who have most, will make the most contribution. Those who have least will be protected to the greatest extent we possibly can, knowing that the size of the crisis means no one can be sheltered from a contribution that has to be made toward national recovery.

We are smart, resilient, proud people and we are going to come through this challenge because it is we love our country and we want to make sure our children-(AUDIO GAP)


ANDERSON: Well, his words of encouragement fell on deaf ears in Dublin.


ANDERSON: As anger on the streets for how the government has handled this crisis, however, protests in Dublin so far been on a much smaller scale than anything we have seen in France, in Greece, or indeed, in Portugal.

The government will attempt to put the first part of the austerity plan into practice in just under two weeks' time. That is when the budget for 2011 will be unveiled. And if that is past it could finally unlock that badly needed bailout cash. Now, Ireland's prime minister suggested today that it could be on the order of $113 billion. So let's join Jim Boulden now, live, in Dublin-Jim.


Yes, this is it. It is 136 pages. The Irish people have been waiting several months to get their hands on this and to understand what the pain will be here. You went through some of that, but just to understand, of course, we are talking about thousands of job losses for the public sector that have already seen job cuts. We are seeing pension cuts. We are seeing the minimum wage cut, as you said. A rise in the value-added tax, the national sales tax. Even now they are going to start measuring and charging people for the amount of water they use. And that is something the Irish are going to have to get used to.

So a lot of changes here, but the government says, overall, each family, on average should only be about 200 euros worse off every year. Of course, some people will suffer much more. They would like to see more people paying income tax. One of the interesting things here is the government says that 40 percent of the people, in this country, who don't pay income tax. And they want to change that for very good reasons.

Now, earlier I spoke with the enterprise minister, Batt O'Keeffe. And he said that despite all this austerity Ireland is still very much open for business and they very much want to see companies coming here.


BATT O'KEEFFE, TRADE MINISTER, IRELAND: We are a very proud people. And as you know, we had the Celtic Tiger era. And if you will look at us in terms of our ranking within the world, we rank about fourth in the world in terms of the labor pool, and the skills that are available within that labor pool. Because we have put a great emphasis on education in Ireland, and having followed on from that, we continue that into the third level, and into innovation, research, and development.

BOULDEN: So, you have been able to preserve the education, R&D enterprise side of things in this four-year plan?

O'KEEFFE: I think the important thing for us is that we would safeguard, in the middle of this recession, education. And we would safeguard all research and development. We are developing a smart economy. And we are still appealing very much to the multinational companies, particularly, in the U.S.A. I'm only back from a visit to the U.S.A., where we visited 13 multinationals. And I would say 10 of them will be locating, either expanding business here, or locating as new entities here over the next number of years.

So we are fit for that purpose in that all of the foreign direct investment coming in now, there is 50 percent of it has an R&D add on to it. And that is particularly important to us because that means that those companies are going to stay here, they are going to innovate here. So, as part of this year's budget I have been able to persuade the minister of finance and the Taoiseach, of the country, that we have got to continue our level of spending in research and development.

BOULDEN: And you have kept the 12.5 percent corporate tax rate?

O'KEEFFE: Absolutely, that is a constant with us, and what makes us very attractive as well, is that if you are in a smart economy, you must look at lean management. You must look at how you can introduce new processes, new by products, and new products, and innovate continuously. And therefore we also give those companies who want to innovate, and who are here, a 25 percent tax credit, relating directly to innovation, a new process and new by-products, within the country. So we have very special and good deals available to fund direct investment coming into this country.

BOULDEN: But wasn't it one of the complaints that labor costs rose so high here?

O'KEEFFE: During the Celtic Tiger era, we lost our competitiveness. And it is for this reason that ideal (ph) Ireland can now target multinationals in the States at high-end manufacturing, as a location here in Ireland.

We have diversified very much as well, because we have always been exceptionally strong in the ICT sector. But now we are into providing jobs in the games sector, and in animation, and in medical devices, in clean technology. And, of course, we have an outstanding opportunity in terms of natural energy sources as well.


BOULDEN: Now despite pressure from Germany and France, Ireland is not raising its corporate tax rate at 12.5 percent. Many countries think it is an unfair advantage. Ireland says it is one of the best ways for them to retain companies and to be able to, hopefully, increase employment, Becky.

ANDERSON: All right, Jim. Thank you there. Jim Boulden is on the ground for you in Dublin.

Constantin Gurdgiev is an economists and lecturer in finance at Trinity College, Dublin, and he joins you now, from Dublin, as well.

Listen, when is a minimum wage not a minimum wage, I guess, is the new question. The answer, when it is in Ireland, 12 percent. That is a huge cut, isn't it?

CONSTANTIN GURDGIEV, ECONOMIST, TRINITY COLLEGE, DUBLIN: It is a huge cut but we have to recognize two facts there. First of all, the Irish economy is in a dire condition. We need to stimulate any sort of job creation, especially at the lower end of the spectrum of skills, where the job losses have been gargantuan. If you look at, for example, our construction sector, which shrunk by about 80 percent; most of those workers are now unemployed. They are facing, really, the bad area of the minimum wage, in order to enter the job market and acquire skills on the job. So, when we are talking about the significant cut in terms of percentage terms, the decline itself has been from 8.65, euro an hour, to 7.65 euro an hour. And that leaves Ireland way ahead of its competitors, in terms of the minimum wage.

ANDERSON: I get it. All right, no rise in the rate of corporation tax which stands at quite a low, at 12.5 percent, critical, of course, in attracting investment to Ireland. But given the huge deterioration in tax revenues is that sensible?

GURDGIEV: I think it is sensible. I think it is important to recognize that, again, once again, we have to go back to stimulation of the economy to growth in the economy, growth in the private sector in particular. And of paramount importance, growth in exporting sectors. Corporate tax is just one of the measures which is important. And it is good that the government renews its commitment to it. Other areas, for example, in terms of the removal of the patent tax reliefs, would probably be more hurtful. Also, on the investment side there has been a significant uptick in capital gains tax and capital positions (ph) tax as well.

ANDERSON: All right. OK, public spending cuts, benefit cuts, tax rises, I mean, these are swinging measures, but are they enough?

GURDGIEV: Well, that is the problem. They are not enough, because if you look at the actual underlying assumptions that the government has built into its budget projections, the government is expecting at 2.75 percent average annual growth, from 2011 through 2014. It looks like, given the structure of the economy, and given the adjustments that we are facing from IMF and the ECB, alone itself, that we are about to take onboard, as well, we are looking at a growth rate, a maximum of 0.75 to 1 percent over the same period of time. So it is clear that the adjustments are not enough.

Let me give you just a very quick comparison in terms of relative figures. If we take the amount of the funds in the current (ph) government will have raise in order to pay for the programs it has listed in the plan itself, plus for the banks, plus for other debts and financing that it will be facing. The interest deal on that amount, by the end of the 2014, the amount of our debt will be somewhere in the region between 11 and 15 billion, every year. We are talking about now, about an adjustment of 15 billion. That is pretty much will all go (AUDIO GAP).

ANDERSON: Yes. All right. Constantin, with that, we are going to leave it there.

Ireland's government on borrowed money and possibly on borrowed time, as far as the legislators are concerned, and possibly the prime minister. Well, some of Ireland's biggest banks could soon be part of the state. Financial shares continue to plunge in Dublin this session as rumors swirled around these markets. Shares in the Bank of Ireland dropped 11 percent this session, taking its market value to around $600 million. That is remarkable isn't it?

While shares in Allied Irish Bank gained just a little bit more than 3 percent, as speculation both could soon be nationalized, joining Anglo Irish Bank under the wing of the state. The head of Ireland's central bank said all Ireland's banks are effectively up for sale.

Europe's main stock indices showing strong gains for the first time in a week. Let's take a look at those. Banking and mining shares some of the top performers actually, there was also a feel good factor from Germany. The IFO index, as it is known, which measures German business confidence, it is 109.3 in November. That is the highest since reunification. So there are some pockets of optimism across Europe at the moment.

Austerity measures, designed to save money of course. But there is also a price to pay. We are going to look across Europe, next, at the side effect of these spending cuts.


ANDERSON: Welcome back. You are watching QUEST MEANS BUSINESS, with me, Becky Anderson today.

So Ireland has a plan, at least, to get its spending back under control, but on the streets and on the markets, Europe's debt problems are still very much in focus. There are huge fears of contagion. Bond yields in Spain and in Portugal, and in Ireland, are all on the rise. Portugal's debt problems spilling onto the streets, a general strike against austerity measures, what we are seeing there.

The euro suffering as a result of all of this; 1.34 against the dollar. Close to what is a nine-week low. And austerity protest in cities across the U.K., as well, against allowing a tripling here of tuition fees. It is the second major student protests this month. And we are going to have more on that for you, in a moment.

But let's get back to Portugal, shall we? Just for the time being. Unions there are holding what they say is the country's biggest ever general strike. They are rallying against the deep austerity measures aimed to slash the country's budget deficit. You have heard it all before, haven't we?

CNN's Al Goodman joining us now, live, from what is a very noisy Lisbon this evening.


AL GOODMAN, CNN INT'L. CORRESPONDENT: Hi, Becky. We are at one of the numerous rallies that have been held to support the unions. In fact, the leader of the largest union , Mr. Cuvio La Silva (ph), just finished his speech to this crowd of hundreds, here, saying that this was a huge success; that 3 million Portuguese, out of the 5 million workers, or 60 percent of the workforce, went out on strike, he says. This is what he said a few hours ago, at union headquarters. He came out to the crowd tonight to say that again.

Now, what he is not saying is whether he thinks this strike will force the government to change course on its austerity measures. He hopes so. The government, at this hour, is holding its news conference. It's second of the day, in which it has said, yes, this was a broad strike, but not as big as the unions claimed it was, Becky

ANDERSON: All right. It's noisy there, Al. We thank you very much indeed-but not violent, as you can see. And thankfully for that.

Well, the second time this month students here in the U.K., taking to the streets, angry at plans to allow universities to triple their tuition fees. It is all part of the big plan, of course, the U.K. government hopes the measure, along with scraping some student subsidies, will help trim the country's deficit.

Protestors say they will price many students out of higher education. Our Atika Shubert was at the London protests. Let's take a look at what she found.


ATIKA SHUBERT, CNN INT'L. CORRESPONDENT (on camera): You can see, we are here in the heart of the protests in Central London. A number of the students have lit up a bonfire. We are actually at White Hall, right before Parliament Square, just in front of Westminster there. And the students have taken over this part of the road, in their protests.

And you can see over here, there is actually a police van that they attacked. They have scrawled graffiti all over it. Earlier they were rocking it back and forth. They have managed to smash in a window or two, but there are no police inside it. So, it was an unruly protests at its height, but police still seem to have everything under control.

I want to just take you around a bit now and show you what is happening. A lot of these students here, not just university students, but high school students, who say that when they graduate they are going to be affected by this hike in tuition fees. Not just any hike. Almost a tripling of tuition fees and a lot is due today. They do not have the kind of saved up college fund to afford a tripling of tuition fees. And that is why they say they are protesting.

And amazingly enough, a lot of their parents apparently supported them coming out to the protest day. Not only that, but a lot of students have told us that their teachers also supported them. Saying they have authorized absences to walk right out of the classroom.

Here is what some of those students said.

UNIDENTIFIED MALE: I think each individual protest can't make much of a different, but the protests are going to keep going on until this stops.

UNIDENTIFIED MALE: Scrap tuition fees, make education free for everyone. Education is a right.

UNIDENTIFIED FEMALE: This was specifically designed to be where we didn't want to be violent. We don't want to make-be unruly or anything like that. We are here to say we are upset about it. We are angry. We're not here to make a mess, or like, get in the way of people's lives.

SHUBERT: Now some of the protest organizers have called this a carnival of resistance and that is definitely what appears to be happening. In fact, if anything, they have pumped up the music. It's a bit like a rave. They've got Michael Jackson playing now. So, there is a lot of anger, but this is clearly also an opportunity for a lot of students to basically hold a kind of street party. Will this have any effect on the government? That remains to be seen.

But clearly they are going to be feeling the pressure from the street because these protests, this will not be the last one. Students say they will be continuing their protests and that they are hoping these protests will reach out more than to just students. They are hoping to get the unions involved as well.

Atika Shubert, CNN, London.


ANDERSON: Not sure when the last time Michael Jackson was played at a rave. But anyway, there you go.

U.S. stock markets closely watching Europe, of course. Investors in the U.S. have been on edge all week because of events overseas. Alison Kosik is at the New York Stock Exchange for you.

Alison, what is the effect there of what is going on over here?

ALISON KOSIK, CNN FINANCIAL CORRESPONDENT: You know what, Becky, for at least today investors are putting all those worries about Ireland, Portugal, Spain, North Korea, South Korea, they're putting all those worries to the side. Because the focus today is on the jobs picture and the jobs picture is getting brighter.

Here is what we learned today, Becky. We found out that the number of people signing up for new jobless claims fell 34,000 to 407,000. Now it has really been a while since we have been in this range. In fact, the last time we were in this range it was July 2008. So we are getting close to that 400,000 level. And that has really been the benchmark that analysts say claims have to fall below so that the unemployment rate goes down. So it shows the labor market is making some headway and investors definitely like to hear that.

We also got some numbers on personal income and spending, both edged up about a 0.5 percent in October. With private sector wages, listen to this, jumping $33 billion last month. Compare that to a rise of $8 billion in September. That is huge. That means that people here in the U.S. have more money in their pockets to spend, especially around the crucial time of the holidays, Becky.

ANDERSON: Does that mean that Americans are going to spend more, do you think? As we get into this critical holiday shopping period?

KOSIK: And that is really the $6-million question here, Becky. But you know, if you think about it, since being stung by the recession, people here in the U.S. are saving more than they are spending. But they are spending a little more at this time than they were last year. And that is of course a really good sign for the holiday shopping season. Tomorrow is Black Friday. Retailers, you know, they have just been rolling out the marketing pitches for weeks now. They are trying to reel in buyers nice and early so they can make sure that they make those sales.

Now just like companies have their money on the sidelines, so do consumers. So retailers are really hoping that all this pent up demand is going to be spent in the next few weeks. Sales are expected to be good, not great. There are a couple of surveys out that show that consumers are expected to spend a little more than they did last year. But it still looks like it could be an improvement from the past couple of years. And that is what retailers are banking on.

ANDERSON: All right. With that we wish you a Thanksgiving, for tomorrow, Thursday.

KOSIK: You, too.

ANDERSON: Alison Kosik, for you in New York.

For when going to work feels like a day at the circus. We are going to step into the ring, after this.


ANDERSON: A very warm welcome back. I'm Becky Anderson in London for you. Step into the ring, this week, in "World At Work" series. We are going to follow the ringmaster at Zippos Circus. Now, if you feel sometimes like your work is tricky, try working with these clowns.



Well, originally my father was a farmer, lived in Yorkshire. And all the animals on the farm, he taught them to do circus tricks. And then he sold his farm, joined the circus. I came a long much later, so I've only ever been in show business.

Welcome to Zippos Circus, 2010.

There are clowns, there are acrobats, there is jugglers, beautiful horses, Palomino horses. The ponies of course, the budgies are there. There is a marvelous high-wire act, the wheel of death. Of course, I still get a little bit nervous before the performance starts. And if you don't have nerves you don't care about what you are doing.

UNIDENTIFIED MALE: Are you a clown?

BARRETT: I'm not a clown, I'm the ringmaster.

Sometimes the audience is with you from the start, and off you go, and that is a bit difficult and a bit hard. So you have to work really hard at them. And then when they come to your way of thinking, by halfway through the show, wonderful feeling.

There are many hair-raising experiences. People fall off trapezes, people do acrobatics and miss the summersault and land in a horrible heap, and there have been ambulances, an all things like that. And then, many, many years ago I was in the Black Futar (ph) Circus, and a lion trainer was mauled. And that was very, very scary. And we did everything we could for him and we got him out. And it wasn't till the end of the performance that I really broke down.

But we are in a risk business. Every day, any artist can break a leg, or arm, doing what he does. You know, it is a risk business. But that is part of the thrill of people coming to a circus.

On the right (ph) the Wheel of Death, the daredevils of the circus, let's have thunderous applause, please. Our (UNINTELLIGIBLE)

This is taking me back a few moons when I used to do a juggling act. I've done lots of crazy things in my life. You know, I even wear odd cuff links. And the reason they are odd cuff links, is because many, many years ago I was standing at the ring doors, at the circus, and somebody said to me, "Do you always wear cuff links the same?" I said, "Everybody does.". He said, "You know, it's unlucky?" I said, "Don't be so stupid." Once in the ring, the horse lashed out and broke my arm.

Nothing is going to go wrong, Lovey, hey!

Started in February this year, and we do two performances most days, three on Saturdays and Sundays. And I stand there, and I am never, ever bored. I am passionate about what I do.

Yeah! Ha! Thank you.


ANDERSON: Fantastic. You are watching QUEST MEANS BUSINESS. I'm Becky Anderson in London with you. Your headlines, after this.


ANDERSON: Welcome back.

I'm Becky Anderson.

More QUEST MEANS BUSINESS in a moment.

But it's just after half past 7:00 in London.

Let's get you a check of the headlines this hour.

We have to reduce spending, grow the economy and move on -- that message from Ireland's prime minister as he took the wraps off a tough four year recovery plan that includes reducing the minimum wage by a euro and introducing new property taxes. The proposed cuts come just three days after Ireland admitted it's seeking a bailout from the IMF and the European Union.

Well, the U.S. aircraft carrier George Washington is heading toward the Yellow Sea for training exercises with South Korea, a move that's likely to anger Pyongyang. North Korea's state-run news agency says the South's, quote, "reckless military provocation" triggered the deadly clash on Tuesday. Two South Korean marines and two civilians were killed when the North shelled a South Korean island.

Well, the death toll is rising from Monday's stampede in Cambodia. More than 450 people were killed in the crush on a suspense bridge at the end of the country's water festival. Eight hundred are injured. Government investigators gave their initial findings today. They say the crowd panicked when the bridge started to sway. Witnesses have said police fired water cannon to move them along.

And a heartbreaking conclusion today to days of waiting in New Zealand. The rescue effort at the Pike River Mine has turned into a recovery mission. The official in charge says no one survived a second explosion on Wednesday afternoon. Twenty-nine miners had been trapped in the coal mine since an explosion on Friday.

Well, the New Zealand mine disaster puts the question of safety very much in the spotlight once again.

According to the International Labor Organization, miners make up about 1 percent of the global workforce, yet 8 percent of fatal accidents at work happen in this industry. That's around 1,200 lives a year.

Well, earlier, I spoke to the former assistant secretary of the U.S. Mine Safety and Health Administration.

His name is Davitt McAteer.

And I asked him why we continue to see such tragedies.


DAVITT MCATEER, FORMER ASSISTANT SECRETARY, U.S. MINE SAFETY AND HEALTH ADMINISTRATION: I don't have a good answer for you. And I don't think there is a good answer of why we're continuing to see disasters in 2010. We've known how to mine safely for decades and we have mines that do it consistently day in and day out. And yet we continue, around the world, and not just in -- in New Zealand, but in the United States, in China, in the Ukraine -- we continue to have these terribly catastrophic events.

ANDERSON: And you -- and you're right to give it a -- a worldwide context. And yet, according to the Bureau of Labor Statistics, mining remains the second most dangerous industry in the United States. That probably doesn't surprise you, but it surprised me.

MCATEER: Well, in point of fact, it is a dangerous occupation. But we know how to deal with the dangerous and we've developed systems, over a period of time, to be able to reduce the amount of people that are killed and injured. And in point of fact, we have, in years -- in some years, in the United States, less than 30 individuals who die in the mines all across the country, of all kinds -- of all kinds of mines, I should say.

And that suggests to me that if we know how to do it, we ought to be doing it right and we ought to be sharing that information around the world.

ANDERSON: One life lost, of course, is one life too many.

You only, sir, have to look at the spike in coal prices or, for example, I want to show our viewers the recent spike in copper prices to see what sort of pressure there is on those supplying these -- these commodities -- these miners.

Are there parts of the world where that pressure has a bearing on health and safety?

MCATEER: No question about that. It has a bearing on health and safety in all parts of the world. When, in fact, you have an increase in - - in the price, as you've seen in the last five or 10 years, for these commodities, it -- it encourages people to get into the business. And it also encourages people to get into the business who don't have the capital to be able to support a -- a sophisticated and safe process.

In addition, it causes those who are in -- already in the business -- to increase their productivity. And sometimes that productivity is being increased at the sacrifice of the safety and health of the miners.

ANDERSON: Listen, you're an expert in the mining industry.

Is it feasible, do you think, to get the international mining community to adopt and adhere to international safety laws and practices?

Or am I just being naive here?

MCATEER: No, I think you're absolutely right. We have to get the international mining community to address this question. I don't believe that, in country after country, that we're going to continue to allow mining to process -- the mining to exist if, in point of fact, we can't do it in a safer way.

We know how to do it in a safer way and we just haven't adopted that.


ANDERSON: Your expert on what has been a very sad day in New Zealand.

Well, when we come back, the corporate crime watch marches on. We have brand new developments in a growing insider trading investigation in the United States.

Plus, UBS in the crosshairs in the Bernie Madoff case -- why attorneys want a Swiss bank to pay billions to Madoff's victims.

That, after this.


ANDERSON: All right, there's been a major development in a growing insider trading probe unfolding in the United States. Officials on Wednesday made a big arrest in what is being called a vast three year investigation.

Maggie Lake is in New York for you with the story -- Maggie.

MAGGIE LAKE, CNN CORRESPONDENT: Yes, that's right, Becky. Don Chu, a 56-year-old executive at a so-called expert firm, expert network firm, has been arrested. You can see there, Primary Global Research. He's been charged with one count of conspiracy to commit securities fraud, one count of conspiracy to commit wire fraud. They carry a maximum penalty of between five and 25 years, respectively, as well as heavy fines.

Now, he has been -- he's the first to be arrested in connection to this expert network crackdown. But he may not be the last.

US attorney, Preet Bharara, made it clear a year ago that insider trading was his top priority.


PREET BHARARA, U.S. ATTORNEY: The casual betrayal of corporate secrets by insiders threatens the integrity of our markets and victimizes the companies they owed a duty to honestly represent. It makes a mockery of our system.

Now, I expect one of you will probably ask just how pervasive is insider trading these days?

Is this just the tip of the iceberg?

We don't have an answer yet, but we aim to find out.


LAKE: They certainly do remember that face. He may be the most feared man on Wall Street right now. Feds have raided three hedge fund offices this week and top firms like Wellington, Citadel, sac have all been subpoenaed as part of this very far-reaching investigation inside -- into insider trading. And Becky, it's interesting that, at this point, they seem to be really focusing on this expert network. It's very controversial. A lot of people say some of these firms just provide very detailed research into specific industries and sectors.

What the Feds are going to have to prove is that it's not just that, that that -- the information being passed along is illegal, it's inside information that no one else has public access to and that's enabling these funds to really profit.

So it's sort of a -- a new and gray area that we haven't really touched on before, but it seems to be where the focus is right now.

ANDERSON: Yes, good luck to them. It's a tough one.

Maggie, all this coming amid what is a significant development in another major financial fraud case. And it's an infamous one, of course. That's the Madoff case.

What's going on there?

LAKE: Oh, yes, Bernie Madoff. He's still on the list of lots of focals -- folks in financial circuits as the legal drama continues.

Irving Picard, you know that name. He's a trustee that was given the task of trying to recover money for the victims. He is now alleging UBS committed fraud and is suing the Swiss bank for $2 billion. That is a lot of money. And they say that Madoff would not have been able to pull off this scheme if the bank had not agreed to look the other way.

UBS coming out saying the allegations are, quote, "completely unfounded and without merit."

Picard is sort of facing a deadline here to get any legal action out there, to try to recoup some of the money, $20 billion, at least, in principal that those victims lost from what we know now was the biggest Ponzi scheme in U.S. history.

And just in case you forgot, Madoff himself, we still haven't heard from him. He's serving a 150 year sentence. And bail has been set for his former secretary, just this week, at $5 million.

So the saga continues -- Becky.

ANDERSON: Well, all right. Watch this space.

Maggie Lake in New York.

We thank you very much, indeed.

Always a pleasure, of course.

Now, both Europe and the United States are dealing with winter weather conditions and travel delays this week.

Let's find out what's going on.

Pedram is your weather person in the house tonight at CNN's International Weather Center.

What's the -- what's the story, mother (ph)?

PEDRAM JAVAHERI, CNN METEOROLOGIST: Oh, plenty of cold air. You know, they say pack your patience this time of year, especially across the United States in one of the busiest travel weeks, typically, beginning this Wednesday and going on through Sunday.

And you can take a look. We have a lot of weather to blame with what's been happening out there. And a broad feature -- a very cold air mass behind it, producing some record amounts of snowfall across the Northwestern United States, Northern California into some of those great ski resorts around Lake Tahoe getting some heavy snowfall.

And then work your way to the East Coast of the country, some more delays, but not necessarily weather-related right now. We have delays out of Newark, New Jersey; D.C. National Airport out there, about 30 minute delays. There's a gate hold in Teterboro, New Jersey. Up to an hour-and- a-half of delays out there. And even LaGuardia in the last couple of minutes coming in with volume delays, as folks are starting to get off work. So it's certainly something to keep in mind here as the weather patterns shift into a winter mode and everyone begins to travel for the holiday season.

But, you know, speaking of those winter like temperatures, take a look at this. Great Falls, Montana in the last 24 hours, 30 below zero. Get on a flight, travel from 2,400 kilometers to the south to Texas, Brownsville, 31 degrees above zero there Celsius. That's about 100 degrees or so Fahrenheit difference between Brownsville and out there out -- there in Montana, with temperatures being about 30 below zero. So it shows you the wide variance in temperatures.

And in Europe, certainly not an exception, from Norway down to Greece, temperatures ranging from 30 below to 24 above. And that's the pattern right now that's going to persist. And toss in a little bit of moisture, you're talking a few flakes.

Look at this -- some of those altocumulus clouds, those speckled-like features we track for you on satellite imagery, that's a great sign of an unstable air mass, a cold air mass. And, again, the moisture on the back side of this, a few embedded features that are going to bring in a few showers and in the form of flakes. It's going to cause some travel delays around Paris by tomorrow afternoon. Up to about an hour delay out there around Paris, Budapest and also Milan getting about 15 or 30 minute delays with some snowflakes in the forecast.

But the kids certainly not complaining in Germany. Look at this. The kids having fun with their father out there. That lady going on a ride. And you take a look at the Thursday's travel delays for other parts, around Frankfurt, a few snow showers, as well. London, it will be breezy, but again, the storm system begins to move out of here and a smaller feature drops in. But we if you pick out, parts of Paris that could get a few flakes, and, again, the eastern portions of Europe certainly accumulating snow in the forecast, as winter quickly is upon us here across parts of Europe and even the United States -- Becky.

ANDERSON: Yes, Pedram I invested in a very glamorous pair of ear muffs today. So I'm glad I did. I think that was prescient timing, as it were.

Thank you, sir.


ANDERSON: It's -- it's getting cold, isn't it?

A hoped for national protest against heavy-handed airport security in the United States looks like it's going nowhere fast. Opponents of the security procedure are calling on travelers to refuse to go through body scanners. Instead, they want them to request a pat-down, which could take a lot longer. So far, it looks like there are few, if any, delays.

Brian Sodergren is the organizer of what he's calling National Opt Out Day.

I asked him what his problem is with these security measures.


BRIAN SODERGREN, ORGANIZER, OPT-OUT DAY PROTEST: For me, the fundamental issue is, what do you consent to when you purchase a plane ticket?

Do you consent -- is purchasing a plane ticket consent for the government to look under your clothes explicit photo


For you?

So, you know, I think there's certain issues -- fundamental issues, you know, with -- is there a reasonable suspicion, reasonable cause to be looked at --

ANDERSON: All right --

SODERGREN: -- or touched in certain ways?


SODERGREN: So, you know, that's really the heart of the issue.


SODERGREN: And, you know, I think the pol -- the policy is what needs to change.

ANDERSON: All right, midway through the day, on the day before Thanksgiving, which is the biggest traveling day of the year, of course, you'll be disappointed, I'm sure, to hear that travelers seem to be pretty consigned to these -- these pat-downs.

Are you disappointed?

SODERGREN: No, not -- you know, not at all. I kept getting asked, Well, what's going to happen?

Isn't this going to be chaos?

Look, one, I wasn't tracking or signing anybody up. So, you know, I'm watching just like everybody else.

But, two, you know, I expected the weather to have more of an impact than people that didn't want to go through the scanners. You know, I'm happy. I think we're -- we've succeeded. The message has gotten out there. It -- you know, this has always been about educating the public and advocating to change the policy. And let's take a step back and see if we have any more sensible solution so --

ANDERSON: All right --

SODERGREN: -- in that regard, I think -- I think we're being -- we're, you know, it's been a great success.

ANDERSON: Yes, John Pistole, who is the head of the TSA, has conceded that he agreed to look at how they do this screening going forward.

Ultimately, is that enough, at least a concession from the head of the TSA, who says that we'll look at this?

SODERGREN: Yes, you know, I mean we'll -- we'll have to see what becomes of it. You had scientists a couple of days ago that have worked on the machines that said, you know, this whole privacy issue could have been avoided. There's an easy algorithm you can do and it would make into a funhouse mirror sort of an image rather an explicit image.

So, you know, he brought that to the government's attention four or five years ago.

so, you know, I think there's a couple of quick fixes that can probably be done that would, you know, make people a little bit more easy about this sort of thing.

But, I think, you know, overall, we need to, you know, just like I said, take a step back and -- and see. You know, our -- we have limited resources.

Are we using them in the best way as to the other ways we can do this?

So, you know, I'm -- I'm ecstatic that we are actually having this conversation nationwide and -- and maybe that will get some positive change --

ANDERSON: All right, OK, Brian --

SODERGREN: -- that enhances our security and protects our rights.

ANDERSON: What about the bigger picture here?

Is going through a body screener or having a pat-down not a small price to pay to secure our travel?

SODERGREN: Well, look, I -- you know, I -- I think it's a false proposition. I don't think it's either/or. I think you can have a -- a secure flight and -- and find ways to go about security without these intrusive pat-downs and violating people's privacy rights with -- with the body scanners with the explicit images.

So, you know, I -- I don't think it's an either/or as it's -- as it's trying to be positioned. I think you can have both. And I think the TSA is now stepping back and saying, you know, yes, that may be right, we could probably do that. Let's take a look at what we can do.


ANDERSON: Well, all right. There you go.

Well, up next, a closer look at one of the major factors in Ireland's current crisis -- the collapsing property market. Stay with us as we delve into a problem that stretches from homeowners right up to the High Street.


ANDERSON: Well, a major collapse in Ireland's property market is one of the key factors in its current financial crisis. For homeowners facing big public spending cuts, it is a double blow.

CNN's Jim Boulden met one man who's had to take a big loss on the house he can no longer afford to live in.


JIM BOULDEN, CNN CORRESPONDENT: Brendan Fagan is an I.T. specialist at a local hospital and a union activist. As a government worker, he has already seen a 20 percent cut in salary and fears the next wave of austerity measures will mean even further pain.

So he sold his house to move to a cheaper home about 150 kilometers away, cutting back like the rest of the country.

BRENDAN FAGAN, IT SPECIALIST: We are now in a position where we have to meet the bills, we have to do whatever is necessary. As a failed genius (ph), I shouldn't be saying these things -- but I am a realist and a pragmatist, as well.

BOULDEN: Fifty-two-year-old Fagan put his house on the market for 280,000 euro. He's selling for 150,000 euro.

But moving much farther west, Fagan will cut his mortgage greatly. After travel costs, he hopes to save 400 to 500 euros a month.

FAGAN: Because I've been brought up in an era where one met one's commitments, one pays one's bills. That's the position I want to maintain.


ANDERSON: Well, that's a look at the residential market for you.

A major challenge to commercial property markets is what's known as the debt funding gap. A report by DTZ Research puts it at $245 billion globally, with Europe shouldering about 51 percent of that. And it also says that Ireland's debt gap makes it the most vulnerable commercial property market in the world.

Hans Vrensen, global head of research at DTZ, joins us now.

Before we move on, in the words of one syllable, what do we mean when we talk about a debt funding gap?

HANS VRENSEN, HEAD OF RESEARCH, DTZ RESEARCH: The debt funding gap is a difference between the debt that is in place and that is maturing over time versus what we think is available to refinance this debt. So the difference is the gap.

ANDERSON: And what's available is becoming less and less and the gap is getting bigger and bigger, one assumes.

VRENSEN: Yes and no. It is a big gap. It is not necessarily getting bigger, because banks are actually extending the maturities on their loans. So they're -- they're moving the problem into the future. And that's (INAUDIBLE).

ANDERSON: How does Ireland stack up against other parts of the world, Hans?

VRENSEN: Well, the -- the absolute funding gap for Ireland is actually relatively small. It's only $6 billion U.S. But, since the Irish market is quite small, on a relative basis -- and this is why Ireland doesn't score very well -- on a relative basis, it's -- it has got the highest one, at 16 percent of the total market.

Compared to all the other markets globally, that is the highest percentage.

ANDERSON: OK. A big percentage. The numbers, though, in Japan and various other places are higher, aren't they?

VRENSEN: Yes. Japan is the biggest single country gap. And you said already Europe is the biggest on a regional basis. The U.S. comes out, actually, quite positive. It's got a -- a relatively small funding gap and there are some reasons that we -- that we found on that.

ANDERSON: OK. So why don't we look at these numbers?

We look at these numbers, one assumes, to see how the property market is doing -- and the property market, which has been such a big sort of benchmark for where we are going in this recession.

Does what we are seeing, given what you've just said, suggest a double dip recession going forward?

VRENSEN: Actually, it doesn't. And another piece of research that we've done illustrates that there is sufficient capital available to actually bridge this gap. So we have about a ratio of one to five -- 1.5 to available capital versus the gap that we have.

So there is enough money available, it's just that the money that's available needs to meet up with the gap that we have. And that is what is happening at the moment. It's taking a bit of time. Different countries have different approaches to this. Sometimes there's a government that steps in and takes care of this problem. In the case of Ireland, we see NAMA (ph) taking charge of this problem.

In other countries, like in the U.K., for example, we -- we don't see a central government agency. Every bank does it in a different way and it's a sort of a messy, prolonged workout that we're in the middle of at the moment.

And that has a big impact on our clients at DTZ, which are active in the commercial property market.

ANDERSON: Yes, it's fascinating stuff.

I was going to ask you what your -- companies like yours were advising as this gap was getting larger, but I'm not going to make you answer that question. I'm sure it was all the right things.

That's the end of the show.

We thank you very much, indeed, for joining us.

We'll have a quick check after the markets -- of the markets -- sorry -- after this very quick break.


ANDERSON: Over in the U.S., it's the day before Thanksgiving. And there's been a lot to be thankful for in the markets.

Let's check them out for you, shall we?

Better than expected economic data painting a -- a fairly refreshing picture for you. You can see there at close it's around -- or it's certainly trading around 1.2 percent higher. Unemployment improving. Consumer confidence getting stronger and the Dow holding up. Down about 150 points yesterday, though. Do remember that. So, really, just rebounding from what it lost yesterday.

There's the number for you. It is 68 minutes past 7:00 in London now for you.

Now, before we leave you, have you heard of the 99ers?

They are the unemployed Americans whose benefits expired after the 99 week limit. We've posted an article about grassroots activist groups who are working to get those benefits extended. And you can find that story at It's one slice of the more than 14.8 million unemployed Americans.

It looks like some of the good news on the European markets -- sorry. The U.S. markets feed into the European markets, as well, even though Ireland announces a harsh austerity package and fears of contagion in the Eurozone, they haven't subsided, but they're certainly not affecting the markets.

So let's take a look at those for you. The major stock indices showing gains for the first time this week. The CAC 40 up .6 percent there. The FTSE up 1.5 percent and the Xetra DAX up today about 1.75 odd percent, 1.77 percent. Some decent numbers out from Germany today.

And that is QUEST MEANS BUSINESS with me, Becky Anderson for you in London.

"WORLD ONE" starts right now.