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From Blizzards to Ash Clouds to Terror Threats, 2010 Has Been a Tough Year for Air Travel; High-Speed Trains Can Edge Out Air Travel With Punctual, Hassle-Free Service Throughout Europe; US Housing Prices Decline; Four Veteran Traders Talk About New York Stock Exchange.; Makeup Artist Talks About Her World at Work; Nor'easter Still Causing Problems in Northeastern US; Profitable Moment, Planes or Trains?

Aired December 28, 2010 - 14:00:00   ET


RICHARD QUEST, CNN ANCHOR: It's a case of 2010 on the tarmac. Blizzards on the U.S. East Coast is rounding off a stormy year for air travel.

The weakest link. U.S. house prices take a beating and that has raised fears again in the strength of recovery.

And the highs and lows of the trading floor. We meet the veteran traders who have seen it all.

I'm Richard Quest. We have an hour together to chew these things over. And I mean business.

Good evening.

The storm may be clearing this evening, but in the United States airports are still under strain. As the airlines on the Eastern seaboard are playing catch up after days of disruption from blizzards.

New York City's three main airports are open and yet the experts say it will be the weekend before many stranded passengers finally manage to leave and get on a flight. Alternatives are proving hard to come by. Some people looking for a backup plan have been quoted thousands of dollars by car rental companies.

And the after Christmas sales snowed out. Stores have lost revenues on some of their busiest shopping days of the year. But strong retail figures out today show that the blizzard may be more of a nuisance than a catastrophe.

Now one man who has been staying put for us at New York's LaGuardia Airport, is Allan Chernoff. A few moments ago he joined me and I asked him what was moving, what wasn't, and when is it seemed, there, things would get back to normal.


ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Richard, it is going to be a very gradual recovery. Mother Nature really packed a punch knocking down the airports to the canvas. And they are just slowly getting up off of that canvas.

So, for example, this morning during the first six hours here at LaGuardia Airport there were 100 flights, departures and arrivals. That is just a little bit more than the number of departures and arrivals that typically occur during a one hour span. So, it is going to take some time.

The general manager here told me it will be a couple of days until the schedule is fully back.

QUEST: When we think of what happened at London Heathrow, before Christmas, when snow was compounded by ice and a difficulty in getting the planes moving. The authorities in New York will want to make sure they get on top of this very fast.

CHERNOFF: Oh, yeah. The authorities at the airports here, they are run here in New York by the New York Port Authority, New York New Jersey Port Authority. They took this very seriously. They had their crews on 12-hour shifts, 12 hours on, 12 off. They were just working through incredible conditions. Not only a huge amount of snow, but vicious, vicious winds. That were running at 60 miles an hour out on runways, the taxiways. And the general manager here told me that as soon as they would clear off a taxiway, the snow would just pile right back on. So that was a huge, huge challenge for them.


QUEST: Allan Chernoff, at LaGuardia Airport. Aviation and airlines are usually a wonderfully efficient mode of transport, but try telling that to someone caught in this week's and this year's winter weather storms. If you throw in security scares, the ash cloud, it has been a terrible year in one way or another for those in the air. Scott McCartney is the travel editor of "The Wall Street Journal" and the man behind "The Middle Seat", air travel column, he joins me now from Dallas.

The core question: These crisis are very intense, they are very sharp, and they happen very suddenly. But if you take the year, overall, Scott, has it been any worse than usual?

SCOTT MCCARTNEY, TRAVEL EDITOR, "THE WALL STREET JOURNAL": You know, I think it has, Richard. It has been a very difficult year for a couple of reasons. I think when we have these crisis the airline industry is stretched so thin that there is very little ability to recover and we're seeing that right now in New York, as we saw during the ash cloud crisis, as we saw in London, during the snowstorms.

There just aren't the empty seats to rebook people, there aren't the spare airplanes to put on extra flights. The staffs are so thin that there aren't the extra employees to bring in or to put on the phone lines. So it is very difficult when something goes wrong. But a lot has gone wrong this year and some of it Mother Nature, and some of it man-made.

QUEST: But it is interesting, the whole system is creaking to the point of capacity. But I saw-you and I were saying a second ago, I saw yesterday, Alfred Kahn passed away. He was the architect, the father, if you like, of American airline deregulation in the 1970s. Have we now pushed the system to its absolute limits, do you think?

MCCARTNEY: I think we have. Although I worry that next year we'll be a year when demand for air travel increases, and yet airlines still are reluctant to add in capacity, to spend large sums of money behind more airplanes. And we have had delays from manufacturers that have made the capacity crisis even worse. You know, Alfred Kahn was all about competition.

And in some ways what surprises me is there hasn't been a particular airline that has come along and said, we won't run as full as somebody else. We are going to have some extra capacity. We are going to have the spare airplanes. We'll have the extra baggage handlers. Our fairs may be higher, but I think people are at the point now where they will pay more to have a little bit more room on the airplane, to have a more reliable schedule. And nobody has come forward to sort of stake out that claim in the competitive landscape.

QUEST: Scott, fascinating topic. You and I will talk more about that, you can guarantee, in 2011.

Scott McCartney joining me there, via broadband, from Dallas, in Texas.

One traveler who regularly and religiously takes the train over the plane is the man in Seat 61. And we're talking to him next. Tonight, Mark Smith joins us via Skype. Instead of on the train he joins us from the Eastern Netherlands.

Marc, the train, we know, is a preferential way of travel on shorter distances, but the investment to build high-speed rail is still not forthcoming, is it?

MARK SMITH, FOUNDER, SEAT61.COM: Well, the investment certainly is-has been forthcoming in many countries in Europe. And certainly in the U.K., as well, it looks as if we're going to invest in high-speed rail to the north of England and Scotland as well.

They have progressively shortened journey times on many city pairs in Europe. For example, you can now get from Paris to Amsterdam in just 3 hours, 20 minutes. Or Madrid to Barcelona in 2 hours and 40 minutes.

QUEST: Right, but-I mean, just taking this point on the expenditure, the H.S.2 in the U.K. isn't due to come into force until 2025, if that. And if you look at what has happened in the United States, where states like Wisconsin and Ohio have turned down, or had their high-speed rail funds withdrawn, because governors simply didn't want the money.

So, there is a-although it makes sense, the political argument is not completely made.

SMITH: Well, high-speed rail is a long-term investment. And it is an investment, not of the conventional financial sort, but the investment in the infrastructure of a country. And where the investment has been made, in France, Spain, Italy, and so forth. It is proving extremely successful in keeping people moving and getting people out of planes and onto center to center trains.

QUEST: What do you think is the rough rule of thumb for how long plane versus train, even allowing for check in an all of that, what is the rule of thumb, do you think for the number of hours?

SMITH: Well, funnily enough, that has changed over the last few years. The magic figure used to three hours. And that competed on a level playing field, with a half an hour to the airport, the hour check in, the hour flight, and the half an hour back into the city center.

The head of French railways said, only a year or two ago, that that magic three was now four or even five hours, even for business travel. Partly because of the increased security on airports and the extra time it takes to check in. But also because of the productivity, a business can actually get work done with Wi-Fi and power sockets for laptops on a train journey; and also because of things like punctuality. Trains, high-speed trains, typically achieve 90 percent on time. Short haul air struggles to achieve 63 to 68 percent on time.

QUEST: Mark, many thanks, indeed. I have proof positive of that. I took the Eurostar back from Paris this morning, and sure enough, left on time, arrived on time. And I even managed to have a bite of lunch on the way.

Mark, joining me there from Eastern Europe.

Now, what do you think is the rule of thumb, when you think, train versus plane; @RichardQuest. We'll take a couple of Tweets and Twitters, before the end of the end of the program. When do you think train versus plane? Number of hours, particular journey, @RichardQuest. And I will get to some of those before now and the top of the hour.

For me, I think it is about four hours. Anything over four hours, even though, the plane may be more cumbersome, I like the feeling of doing something, jetting in, going in, anyway, you get the idea.

When we come back, in a moment, the right time of the year to take stock of the stock market. There has been little French player on the CAC 40 during the year, why it is just about unchanged, and possibly a la rouge, in just a moment.



QUEST: Welcome back.

European stock markets seem to be finishing 2010 with a whimper rather than a bang. Different countries stock markets, we're going to look at them, in the course of the week, and see what really moved markets. We are going to start in France today. Nothing to do with me having been on the Eurostar Paris.

But let's join-join me in the library. The bibliotheque I think, is perhaps a little bit better. I'm sure someone is going to correct me, but what you won't want to correct me on is the market which was down, 1.97 percent for the year.

Excuse me.

Barring a last minute rally, the market in Paris was at 3,858. Now that is a disappointing finish compared to obviously, the DAX, which is up 15 or 16 percent. And even the London FTSE up nearly 10 percent. And the reason why the CAC currant has been so poor is where you have got to dig into the sectors.

First of all, the manufacturing sector provided some rays of light. For example, EADS, the owners of Airbus, finished up some 31 percent, despite the problems at the Airbus subsidiary. Perhaps it could have been so badly beaten down in previous years, a 30 percent gain was very good. Renault was up, as indeed was Peugeot, they were both up by more than 20 percent. So they are the winners.

Now look at the laggards, and you will see, of course, not surprisingly they came from the financial sector. LVMH, for example, had the best year of all, it was up about 60 percent. LVMH increased its stake in the luxury goods company, Hermes, just last week.

Other losers, of course, the financials were way down on the CAC, Axa was down 24 percent. Credit Agrico was down 21 percent. Societe Generale was down 15 percent. The overarching approach in France, a market that was extremely segmented; if you made money, you made it well, but otherwise the losses were quite severe.

Now, I spoke to Alain Bokobza, the head of global asset allocation strategy at Societe Generale. And I asked him why the CAC has had such a miserable 2010?


ALAIN BOKOBZA, HEAD OF GLOBAL ASSET ALLOCATION, SOCIETE GENERALE: On the one side, the French economy has not delivered too much growth. It was not negative in 2010, but nevertheless you have less growth, in France than you had in Germany. Which was more than 3 percent, and less than the U.S., which in the end of the year had a rising growth profile. And it is important for the development on the equity market on one side. On the other side, when we compare equity markets we need to also to focus on the sector components. And especially when you compare the German, the DAX, and the French, the CAC 40 indices. The CAC 40 is much more weighted and in sectors which have suffered in 2010. Part of it was the global energy sector, not the energy suppliers.

QUEST: Right.

BOKOBZA: But the oil majors, like Total. You have no oil company in Germany. Also the French equity market is more weighted in financials which suffered in 2010. And in Germany you have fewer of them. The vast majority of the banks are not quoted companies in Germany.

QUEST: Right, but that-hang on, hang on. That doesn't necessarily-energy and banks doesn't necessarily flow and follow through. If we say, compare the French market to say the London market, which of course is similarly weighted with very big banks, and mining, and commodity, and energy companies.

BOKOBZA: I think for the U.K. market, we need to be careful as you have big banks in the U.K., however, some are not fully nationalized. Some are partially nationalized, no? So the weight of banks within the FTSE is significantly less than 10 percent now. And it is much bigger in the CAC 40. So as you know, all the equity, and this is market cap weighted. So they are according to the market capitalization of the corporations. So within the FTSE it is a smaller in debt. We need to be careful about this.

QUEST: Right, but I think you would agree, surely, that the French market has not been a stellar performer, during the course of 2010?

BOKOBZA: It is indeed the case, so the-part of the difference, again, was on the-not negative, but low level of GDP growth we had in France in 2010. And part of it was the sector components. Nevertheless, when you look at some bigger French corporations, at least quoted in France, some had a spectacular rise. The automobile sector had a very good rise, like in Germany, the Peugeot, the Renault, part of the Michelin. You also had another segment of the French equity market, which had a stellar performance, which was the luxury segment, including LVMH, which had an outstanding performance against the global peers (ph) and against the sector.

So we need to be careful when you talk about equity index. On one side, which is enough right, of different sectors, and some key components of it. Some of which did very good performances.


QUEST: And that, of course, is the CAC currant. And we will be looking at the other markets in the days ahead, as we put (UNINTELLIGIBLE) where the money should go in 2011.

Taking the strain: Tonight our special series, "The Boss", looks at the leaders who know all about grace under pressure, in just a moment.



"Don't sweat uncertainty. It can create opportunity." Those are the words of a chief executive who has transformed a troubled company into a success story despite tough times as we continue with "The Boss".

And these are the three bosses that have become part of our weekly look into the running of the C suite. The CEO Richard Braddock is the head of the U.S. company, FreshDirect. He is one of the three leaders who have been helping us put a human face on company life, in the U.S., Europe, and Asia.

In London it has been Sarah Curran, the founder and chief executive of My- She says let your competence develop.

In Asia, Michael Wu has been the man we've been watching. And he believes it is all about recognizing great employees. He runs Maxim's Group, one of the territory's biggest catering firms.

Across all three areas we have been learning how they cope with pressure. We'll see how stays fleet of foot and ahead of the trends. Also, FreshDirect's chief shows us how he embraces a big expansion. Because all three of them are truly "The Boss".


UNIDENTIFIED MALE: Last week, on "The Boss": Sarah hit the runway in London in search of exciting designers and new trends.

SARAH CURRAN, CEO, MY-WARDROBE.COM: You've really got to keep ahead and that's why, again, trends are very, very important.

UNIDENTIFIED MALE: And in New York, Richard and his team revamp the packaging of the Four-Minute Meal.

RICHARD BRADDOCK, CEO, FRESHDIRECT: I think this is going to be a great re-launch.

UNIDENTIFIED FEMALE: Good morning, Rick. We're going to New Jersey.

BRADDOCK: Right after I get some coffee.

UNIDENTIFIED MALE: It is 7: a.m. in New York and it is a big day for FreshDirect and its Chief Executive Richard Braddock.

BRADDOCK: How you doing today?

UNIDENTIFIED MALE: Good morning, sir.

BRADDOCK: You know anything about New Jersey?

UNIDENTIFIED MALE: Where FreshDirect is about to dramatically expand its business, tripling its presence in the States.

BRADDOCK: You can't change without taking risks. You can' grow without taking risks. Because you are dealing with some degree of uncertainty and getting your people to believe where that uncertainty exists, opportunity can be created.

UNIDENTIFIED MALE: Richard is, of course, the public face of the expansion.

BRADDOCK: How do I look?


BRADDOCK: Ready to work for the day?


BRADDOCK: Well, it is fun to be running a business that is expanding and growing. And this is another indication of our success. So we feel good about today and our future in New Jersey and elsewhere.

UNIDENTIFIED MALE: As he promotes his product. Getting the message out means the boss has to press the flesh. First it is the mayor of the township of Montclair (ph).

BRADDOCK: Hi, there.


BRADDOCK: Rick Braddock, how are you?

UNIDENTIFIED MALE: Good to meet you.

BRADDOCK: Nice to be here with you. I put my hat on for you and everything.

UNIDENTIFIED MALE: I can see that.

BRADDOCK: Here, you are going to put this food to good use.

UNIDENTIFIED MALE: Don't want you to throw out your back. What do you got in here?

UNIDENTIFIED MALE: Richard offers the mayor a sampler of FreshDirect produce and other products.

BRADDOCK: And we've got some, I don't know, some cheeses. We have very good cheeses, and soups. They did pretty well for you, here.

UNIDENTIFIED MALE: These are the staples of FreshDirect, whose business model is simple. The company buys directly from local farms and fisheries and then delivers them directly to customer's homes.





UNIDENTIFIED MALE: Back at Montclair, Richard is totally on message when he talks to the press.

BRADDOCK: We buy from the local farm direct, we buy from slaughter house direct.

I don't look like I'm holding anything but-

UNIDENTIFIED MALE: The message never wavers over five hours and three mayors.

BRADDOCK: This is really, in our mind, a rolling expansion.

UNIDENTIFIED MALE: After all, for Richard, this expansion is crucial to his plans for the company.

UNIDENTIFIED MALE: I'm going to have to take a bite out of whatever is in here.


UNIDENTIFIED MALE: He's pleased with the way this launch has gone.

BRADDOCK: We got, I think, a great reception, and we've got a-I think we helped a couple of mayors in their reelection campaign. And I think we did great out here.

UNIDENTIFIED MALE: It is a reception of a different kind in London. My- management is meeting.

CURRAN: It is really important as a trend-led site that we understand what the media are calling and what everyone is talking about.

UNIDENTIFIED MALE: Before the meeting gets going Sarah has a new recruit to welcome.

CURRAN: OK, morning everyone. So, firstly, if I can introduce you to Fiona, who joins today as our creative director.

UNIDENTIFIED MALE: For Sarah there is no greater responsibility than hiring the right people.


UNIDENTIFIED MALE: Her business relies on this investment.

CURRAN: I think as we are undergoing this sort of big process of repositioning of the brand, it is really important to surround yourself with experts. And I've never been shy of that. I've always made sure that within the buying team, that within the PR, I brought on the best person that I think you know, can do that job.

UNIDENTIFIED MALE: My-Wardrobe launched in 2006. Today it is one of the leading online retailers of everyday luxury wear. As a trend-led site the My-Wardrobe team need to make decisions fast.

UNIDENTIFIED FEMALE: I think we should hold off until everybody goes big with their features.

UNIDENTIFIED MALE: This meeting will help them decide where they are going wrong.

UNIDENTIFIED FEMALE: We have these items coming in this week. This is what everyone needs to be shouting about.

UNIDENTIFIED MALE: What they are missing out on.

UNIDENTIFIED FEMALE: They are totally what you would never expect anyone to go out with. They are unbelievable.

CURRAN: We haven't got too much to worry about.

UNIDENTIFIED MALE: And what products deserve more attention.

UNIDENTIFIED FEMALE: We've got the dress, we have coats.

UNIDENTIFIED MALE: It is this immediacy they hope will bring customers to their Web site.

UNIDENTIFIED FEMALE: Everybody knowing their style (INAUDIBLE)

UNIDENTIFIED MALE: Lauren is My-Wardrobe's head of PR. And she is in charge of keeping a close eye on what the industry has been talking about.

UNIDENTIFIED FEMALE: Now, the cape, the cape is now everywhere. I went through and made sure that every segment described our cape, because I think that last time we created it that sometimes the terms were all a bit different. So it could be that the shade was tan but it could have been named camel.

CURRAN: Leanne, can you speak to the product writers and make sure that the terms are consistent.

UNIDENTIFIED MALE: Sarah says that her priority is to inspire and empower her team. She believes that this is the key to winning.

CURRAN: As we're growing we're getting to that next level in turn over, next level of in terms of even, awareness out there. It is really important that the team is totally focused on it.

UNIDENTIFIED MALE: Next week, on "The Boss".


UNIDENTIFIED MALE: Sarah tells us why it is wise to know your business inside out.

And in Hong Kong, Michael Wu motivates his staff with a little reward.


QUEST: "The Boss", and our bosses are answering your questions at One of our Facebook friends, Anielle Myeng Mewei Karoke (ph) wanted to know, how CEO Sarah Curran of how she deals with competitors. So we put that question to her.


CURRAN: I think the one thing with competitors is you can't spend your life watching what they are doing all the time. Because actually what is more important is that you define your own position within the market. I think it is important that you are aware of what they are doing. And we have a lot of KPIs that we track, to see what we are doing against what our competitors are doing, across PR, across marketing, across buying. Otherwise if you spend too much time focusing on, you know, what your peers are doing, then you are just going to lose focus on your own road. And that, for me, is more important.


QUEST: Sensible advice from Sarah Curran, on not taking too much concern on what the oppo is up to. The rest of Sarah answers to your questions, you can find at

And I was looking just a short while ago, at that address, where we are now over 10,000 on our friends. Let's see if we can make it 10,500 before the too long. Who knows? Anyway, join in and find out the goss, the gossip, of what happens on QUEST MEANS BUSINESS.

In a moment, after the break, it is the season for stock taking. Four veterans Wall Street traders remember the boom and bust years and tell us about surviving the toughest test of all, the test of time.


QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS. This is CNN and, on this network, the news always comes first. So, I need to tell you, the embattled government of the Ivory Coast president Laurent Gbagbo has canceled a planned youth rally for Wednesday, saying it wants to give political negotiations a chance.

The leaders of the three West African nations met with Mr. Gbagbo in the past few hours to present an ultimatum demanding he resign or face military action. Most international observers believe opposition Alassane Ouattara won the Ivory Coast recent presidential election.

Russia is telling the West to mind its own business -- excuse me -- following the conviction on Monday of a former Russian oil tycoon. The US and Germany have sharply criticized the verdict, saying Mikhail Khodorkovsky is the victim of selective prosecution. Khodorkovsky's supporters say the Kremlin is going after him because he supported opposition political parties. Russia says it's the West that is pressuring the court.

Half of Queensland, Australia, has been declared a disaster zone after record-breaking floods submerged whole towns. Australian officials are calling the situation dire. More rains are expected over the next few days, and hundreds of homes have been evacuated.

Sixty-three-year-old Sir Elton John and his longtime partner, David Furnish, are now the proud parents of a baby boy. Their son, Zachary Jackson Levon Furnish-John was born to a surrogate mother in California. The couple are keeping the details of the surrogate -- surrogacy arrangements private. The baby was born on Christmas day, just like the baby in Elton John's 1970s hit "Levon."

Now, to Wall Street. The traders have managed to get to work following big blizzards. Alison Kosik is at the New York Stock Exchange, and we need to start off with this. This home price numbers, which seem to be going in the direction that we don't want to see at the moment. So, tell us what's actually underneath these figures.

ALISON KOSIK, CNN CORRESPONDENT: Yes, Richard, you're absolutely right. With the latest reading on home prices in the US show that the housing market here, it continues to take a real beating at this point. The S&P/Case-Shiller index says prices across 20 US cities declined about one percent in October.

In fact, the chairman that's behind this reading is saying that the double- dip in the housing sector is, quote, "almost here." Prices, of course, have been trending downward recently, so it's no surprise that they're down, but this far down is really causing much concern.

Of course, the high jobless rate, the sluggish economy, and questions over the flawed foreclosure process are really making many people nervous, and the decline in these prices really winds up being good news if you're looking for a house, but it's really not great for the overall recovery, Richard. If you think about it, the housing sector, it's where all the problems got started in the economy, and we really need to see a rebound in the housing sector if we want to see a substantial recovery take hold. Richard?

QUEST: It -- getting underneath that, there's more to it, isn't there, Alison? Because one of the big complaints -- I was recently in the United States, and one of the big complaints I heard is that mortgage companies are either, A, requiring very high deposits and B, refusing to lend that much. And the rate for long-term mortgages are still relatively high.

KOSIK: They are. And they -- just talking about the mortgage rates, you think about the Fed announcing that it's going to buy up $600 billion in bonds, the whole point of that was to lower those long-term rates. We're talking about the ten-year note, because those mortgage rates are reflected in the ten-year note and those rates, so, that's sort of counterproductive with what the Fed wanted to do.

And then, we talk about how hard it is to get a loan. Sure, it's really hard to get a loan these days. Number one, a lot of people, obviously, millions of Americans, are out of work. And then, there even has to be a desire to want to buy a home. At this point, Richard, think about it. People really just don't want to make the commitment at this point and make that long-term commitment.

We saw everybody go out and shop over the holidays. That's a short-term commitment by spending on clothing and jewelry, but by buying a house, we're not going to see that for a very long time. Richard?

QUEST: Have you worked out, yet, Alison, how much you spent on the holiday season presents?

KOSIK: Me personally? About a few hundred bucks. Nothing really too huge. But I did at least contribute to helping the economy this year.

QUEST: I shall assume that mine is stuck in the Christmas mail somewhere, zealously crossing --

KOSIK: It is, how did you know?

QUEST: I guessed. I guessed. Alison Kosik, who is in New York, and we are pleased to see her, as always.

Now, in case you think a day on the trading floor of the New York Stock Exchange is dull, after all, it's all about numbers, think again. CNN's Felicia Taylor got a group of four veteran traders -- that probably means they're over 50, whenever you see the word "veteran" used, it means -- to talk about what they've seen. The highs, the lows, the bulls, and the bears, and how the world has changed before their very eyes time and again.


FELICIA TAYLOR, CNN CORRESPONDENT (voice-over): The New York Stock Exchange has been a bastion of corporate America. A free and open marketplace to buy and sell thousands of stocks.

The current building on Wall Street opened its doors in 1903. A place where a nod and a look of the eye confirmed a trade.

But with the passing of times comes progress, and the floor is no longer the same bustle of people. Rather, now, it is men and women armed with electronic terminals. A few veteran traders who have survived the test of time and witnessed monumental events help us remember the old days.

Art Cashin is a legend on the floor. Part historian, who is highly respected, and he works for UBS. Teddy Weisberg is an independent broker who has built his business from the ground up. Doreen Mogavero is an ambitious risk-taker, who has also built her own business on the floor. And Kenny Polcari is a long-established broker with ICAP Corporates, known for his morning note and insight.


ART CASHIN, TRADER, ISB: First came as a member in swaddling clothes at the age of 23 in 1964.

TEDDY WEISBERG, TRADER, SEAPORT SECURITIES: I came over in 1969, May of 1969. And I remember it like it was yesterday. I mean, the very first order I had was in this stock, and it was a wild stock. And then -- I just stood there and froze. I didn't know what to do.

And then, of course, somebody grabbed the order out of my head and executed it for me, and they gave it back to me, and they said, "Kid, you'd better figure out what you're doing before you come back in here again." And I've been trying to figure it out for 41 years.

TAYLOR (on camera): Doreen, you're one of the first women --

DOREEN MOGAVERO, TRADER, MOGAVERO, LEE, & CO.: One of the top ten, probably.

TAYLOR: Yes. That's a huge --

MOGAVERO: I'm not sure of the number. When I was told that I was coming into the New York Stock Exchange, I kind of went in, walked around, looked. It looked pretty scary, but a lot of guys and my husband, but we ended up being the first married members. It was slightly intimidating, I think.

TAYLOR: Were you tough enough, really?

MOGAVERO: I didn't start out that way, but I ended up that way.

WEISBERG: Oh, you were tough enough.

KENNY POLCARI, TRADER, ICAP: No, no. You started out that way.

WEISBERG: You were tough enough, who you kidding?

CASHIN: It took nearly three hours.


MOGAVERO: There were very big firms at that time, we did very big positions. And so, we had huge orders. So, I was very unique insofar as the orders that I got were enormous. I mean, they were bigger than most of the orders the men had. Honestly.

CASHIN: This is an agency-side business. She's not trading for herself. Someone put their faith in her to get the very best price she can get for them. And that makes you naturally aggressive. You don't stand and say, "No, no. You were here first, you go first." OK?


TAYLOR: You guys have lived through some of the most unbelievable market swings. I mean, you've lived through history. Kenny, what was it like to be on the floor in 1987 on October 19th?

POLCARI: I've got to tell you, 1987 I was -- I had -- I was basically a new broker. I had gotten my seat in 1985. I was 27 years old. It was just unbelievable. But you came to work, and every single order you got was a sell order. They were red and black, right? Black was buy, red was sell.

CASHIN: Very good that you remember that.



POLCARI: That's right, that's right.

MOGAVERO: I was going to say, yea for you. Good job.

POLCARI: It was all manual, right? There was no electronics, so it was all manual. So, you had crowds of people, and everybody was on the same side of the market.

I just remember, at the end of that day, and we would -- the bell rang at 4:00, and we're still there at 6:30, 7:00 at night just picking up the paper and trying to figure it all out. And I remember going home and looking at my wife saying, "It's over. We just -- we're going to lose everything."

CASHIN: For a business in which $500 million could change hands on one trade, there was never a contract, never a lawyer, never an accountant, never a witness. I looked in his eye and said, "Sold." I never handed him a piece of paper, he never handed me one. He made note of my number, I made note of his.

TAYLOR: Is there more uncertainty now with the advent of electronic trading?

WEISBERG: Well, I would say, first of all, back to 87, for most of us that were there, it was the worst day we've ever experienced. The closest the institution ever came to a panic.

The flash crash in May, that is the result of a brand-new market system, which nobody really understands. And the scary thing is, I think it will happen again, and again, and again. Now, it's all about computer trading and high-frequency trading, and the public interest be damned. And I don't quite understand it, but that's the new marketplace. And so, the flash crash was scary because there was nobody to look at it. There were no eyes to look at it.

MOGAVERO: I think that we are in a period of transition in the marketplaces, and I think the pendulum always swings too far to one side. And I think, as evidenced by the flash crash, we are now starting to see that there is a need for speed bumps. There are -- there's a need for unity. Things will start to change, and the pendulum will swing back to the middle somehow.

And I think with that will bring more human interaction and more human judgment. I mean, obviously, electronic trading is here to stay, I believe.

POLCARI: It will never be what we remember.


POLCARI: An open outcry, very energetic. You know, 5,000 Type A personalities all in the same room at the same time.

MOGAVERO: The only place where people that know each other for 30 and 40 years will kill each other for an eighth of a point for people they've never even met.

CASHIN: There's an incredible sense of energy in matching wits with the entire world and some very, very talented people you see around you every day. I always say that a good broker is part detective. You look up at that tape and you see things happening. I've been in positions where you could predict almost an imminent war that was happening by watching which stocks were moving.


TAYLOR: We were all there September 11th. I remember coming down to the Exchange, and I was here for every day for three months afterward. And it was such a hard day, because you really didn't understand what was happening.

POLCARI: I have mixed emotions, because my office was on the 55th floor of the second tower of the Trade Center, and I had been in that office at 7:00 that morning, and I was there up until about 8:20. And I only left because the guys that I worked with wanted to have breakfast. And they left on their own, because I told them, "We'll have breakfast," that they should go ahead without me, and I'd meet them.

One of them got down to the -- when he got down to the lobby, looked out, saw it was a beautiful day, and came back and said, "You know what? I'm going to go back and get Kenny." We walked out the east side of the building.

You saw that scene, the real scene of the towers engulfed in these flames. And although we were far away, you could see these -- the falling objects. And we turned around and looked, and then you saw -- you saw the first building collapse. The first building that collapsed was actually the building that -- where my office was.

TAYLOR: So, you shouldn't be here.

POLCARI: And I -- and I went for a long time, I kept saying to myself, "Why did he come back for me?" Because, by rights, I told them to go. And they left, and I was there by myself in that building. I don't know.

For a long time, it bothered me that -- not that he came back to get me, I'm -- thank God he came back to get me. But I thought to myself, "Why did he come back to get me, but yet, the other people in the building were in the building?"

WEISBERG: We also went in the street, gathered our whole firm in front of 60 Broad Street, and my daughter was crying, and it was very surreal, covered in the dust. People running and crying everywhere. It was like a movie -- it was like a horror movie.

POLCARI: On the Monday, we all came to work. And it was a difficult day.

UNIDENTIFIED MALE: Ladies and gentlemen. Our heroes will now open the marketplace.

POLCARI: But yet, when the bell rang at 4:00, it was, probably for me, one of the proudest days of my life, that we did it. Yes, the market was down 700 points, whatever it was it ended up that day. But you know, when the bell rang at 4:00, the system worked, we worked, we were back in business, you were proud to be an American.


POLCARI: One of the greatest days in my life was the day that I became I member. The greatest day of my life. I remember -- I mean, I'm a kid form Boston, I didn't grow up here. This was all very new to me, and all of a sudden, here I found myself as a member of the New York Stock Exchange, thinking to myself, "I cannot believe I'm actually here."

MOGAVERO: I think it was the day that I actually bought my seat. I'll liken it to buying a house. It's that feeling that you belong to the club. You finally, finally, belong.

WEISBERG: The floor is a unique place to work. I can't think of a better work environment anyplace. And it's really all about the people. And that's what makes it so much fun. Every day is different, every day is exciting. If we were open seven days a week, I'd be there seven days a week.

MOGAVERO: Really, no, we were the luckiest people in the world.

POLCARI: We were, absolutely.

MOGAVERO: Because that will never -- really.

WEISBERG: Never say never.

POLCARI: Right, right.

WEISBERG: Anything is possible.


QUEST: That was a fascinating look at the people who are the traders on the floor of the New York Stock Exchange. Which, frankly, if you ever do get a chance to visit, there is an energy and a life there. The market truly is a being in its own right. We'll be back after the break.


QUEST: Throughout the course of the year, it has been our treat and privilege to bring you a series of World@Work, looking at people and celebrating the jobs that we do. Color, texture, and Andrew Lloyd Weber, it's all in a day's work for the makeup artist Debbie Goodship. When she took part in our series, The World@Work.


(MUSIC - "Til I Hear You Sing Once More")

DEBBIE GOODSHIP, MAKEUP ARTIST, "LOVE NEVER DIES": My name is Debbie Goodship. I am a makeup artist for the show "Love Never Dies" in the West End. I do the makeup for the Phantom and I also do the wigs for the show, as well as a team of three other people.

I really enjoy makeup. It fascinates me, because it can change the way people look for fashion, TV, especially theater, what I'm doing now. It's quite specialized. I'm using old aesthetic makeup, which is made out of silicone, so it completely changes the face.

(MUSIC - "Til I Hear You Sing Once More")

GOODSHIP: This is Ramin Karimloo. He is playing our Phantom, and we are going to make him into makeup now.

We are going to start by applying the bald cap. For the main character, the Phantom, it takes about 45 minutes to complete. My favorite part is the scarred side of his face, just because it's completely different to what Ramin looks like. You can experiment a little bit more with color and texture, and it just fascinates me. I love it.

The Phantom's makeup is made up of four pieces. There's -- first, we put on a bald cap, which goes straight over the hair. And then, we've got a piece which goes over the nose and up to the eye socket. And then, we've got a piece which goes over the ear. We've got to actually glue his ear back to actually apply this piece, here. And then, we've got a head piece, as well.

(MUSIC - "Til I Hear You Sing Once More")

GOODSHIP: When I was younger, I was always terrified of Freddy Krueger. And it was only when I watched "Nightmare on Elm Street" that I sat down and said, "How do they do that? That's makeup." And then, as soon as I saw that, I was questioning how they did it, how they created the monster. And that's why I went into makeup.

(MUSIC - "Till I Hear You Sing Once More")

GOODSHIP: A lot of people think that it -- it's a really, really cool job. And I -- it is. It's amazing. So, I don't think a lot of people realize how much goes into it and how many hours you do a day or a week. But it is, it's an amazing industry to get into.

And this is the finished Phantom.

(MUSIC - "Til I Hear You Sing Once More")


QUEST: Ah, by jingo, we'll have more World@Work as we celebrate the jobs that we all do in the World@Work in 2011.

If you've got a flight booked in this chilly winter weather, you'll want to stay with us. We'll have a weather forecast in just a moment.


QUEST: Well, the forecast demands our attention. Karen Maginnis is at the World Weather Center at CNN Center. Karen, Northeast is bad. What's the weather? Are they expecting more, or does it get better?

KAREN MAGINNIS, AMS METEOROLOGIST: It is getting better, but it is going to take a while for things to return to normal. That is going to be the difficult aspect of this nor'easter.

We've talked about nor'easters, and for the northeastern of the mid- Atlantic coast of the United States, these are significant weather systems that can really hamper not just road travel, but as we have seen over the last several days, air travel, as well.

Here is that northeastern and New England coast of the United States. And we head toward the Canadian Maritimes and, there, they're getting walloped with the high winds and the heavy amounts of snowfall. And we did see some problems in Maine, where some skiers were trapped with the high wind gusts that kind of snapped a cable there.

Some of the snowfall totals. Now, you can see, LaGuardia, 36 centimeters there, and they're still dealing with huge delays because of the backlog of flights that didn't take off for days. Some people have been stuck in the airport, now, for days.

And, as you can imagine, when this kind of situation arises, especially at the holidays, it is just exacerbated. Here's a view of New York City, and one person that is trying to dig his car out of the snowfall.

This is that view of the ski resort in Maine, and there are the people trying to get down. You can see this line that goes up to the ski lift. It snapped and stuck hundreds of people on a ski lift when a high wind gust just kind of jolted the ski lift shut.

Well, this is a view across New York's Central Park. A pretty view, surrounded by the trees and in the snowfall. Some of the wind gusts really have calmed down considerably from when the height of the storm whipped the winds up to blizzard conditions, meaning, we had almost no visibility in a lot of these areas, and that's why the airports were shut down.

We look at Europe now. You probably heard about Moscow? Had an ice storm over the weekend, and that has still shut down the airport. Here's a view of the Kremlin, there's a picture of Moscow, encased in ice right now. Richard, back to you.

QUEST: Thanks a lot, Karen Maginnis at the World Weather Center with the chilly weather around the world.

When we come back in just a moment, we'll consider the economics of aviation. It's a Profitable Moment, after the break.


QUEST: I was asking you about when you would take the train rather than the plane. Jesse Sanchez tweeted, "I love planes, but I would take the train if it is under two hours." I support you 19, "If the journey is greater than five or six hours, then I'd rather fly." And SCgra (ph), "We won't mind taking a 22-26 hour train journey in India. The differentiation is the cost."

Well, tonight's Profitable Moment. I'm suffering a certain amount of guilt. I've taken a series of flights through some of the worst-affected airports. Heathrow, Dulles, Atlanta. And everything went like clockwork. Planes pushed back on time, some even arrived early.

When aviation works as it should, it's a treat. Many of today's problems are because too many airlines are chasing the same airspace at the same time. One of the men responsible for that died on Monday. He was Alfred Kahn, the architect of deregulation in the United States in 78. It was his plan that lets any airline fly to any destination at any price, and truly opened up airspace for all of us. And that has been followed around the world. More planes to more places.

And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable. "World One" starts now.