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QUEST MEANS BUSINESS
Galliano Fired; Insurance Companies Can No Longer Offer Deals Based on Gender
Aired March 1, 2011 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN ANCHOR, QUEST MEANS BUSINESS: John Galliano fired. And Dior condemns his anti-Semitic comments.
The price of equality, insurance companies can no longer offer deals based on gender.
And the Fed readies itself for a fight in case oil prices threaten to choke the economy.
I'm Richard Quest. I mean business.
Good evening to you.
Women may have to pay more for men's mishaps on the road. There are no jokes in this particular story and there is certainly not a lot funny, but it is all in the interest of fairness. The European Court of Justice said that insurers shouldn't-and can't-discriminate between the genders when they are setting premiums, even if you are statistically a better risk because of your gender. It no longer means fewer, lower fees. And that is just the start of what could be a seismic shift for European insurers and their customers.
Now, the ruling doesn't come into force until the end of 2012. And that would allow existing insurance contracts to run their course. The companies involved have known about this for some time. But it is a seismic shift, nonetheless. And certainly the insurance companies will have to start making plans and provisions for when it happens.
It doesn't just cover the old joke about who are better drivers, women or men, and age versus beauty, and all that. No, let's start first with motor insurance premiums because this was the big one. Women under 25 years old loose the most. Because their premiums tend to be about 30 percent lower than say a unisex or a men's premium. So, one of two things have to happen, either men's premiums will go down, or the women's premiums will go up. Overall, over a period of time, it is probably felt that things will balance out. But men are still the bigger risk.
The same again, if you look at annuities and on this occasion it is often felt that women's rates may rise. And the reason for that, women tend to live longer and therefore when buying annuities for insurance policies they have to pay more because they have bigger claims over the course of the policy. Men will obviously get a slight differential they may get 5 to 10 percent over their annuities.
And life cover, exactly the same thing again. Life cover, women could see their costs by 20 percent, men tend to drop dead a bit earlier. They tend to see their drop-their premiums drop a bit more.
Now, let's come back to motor insurance premiums, because this is the one that we all think about most, when we talk perhaps about the gender gap. Is it really true in this day and age that that gap is actually as wide as it seems when it comes to car insurance. To put it to the test my colleague from "CONNECT THE WORLD", I hasten to add is a few years younger then me. But nonetheless, we both sat down to see what the price of insurance would be for a car.
QUEST: Men pay more for car insurance than women.
UNIDENTIFIED FEMALE: Yes, they do. Or they did.
QUEST: According to-and it is unfair. We are both 24.
UNIDENTIFIED FEMALE: Lying.
QUEST: Let's see. And we have the same car, which is a Mini.
UNIDENTIFIED FEMALE: Uh-huh.
QUEST: And let us see exactly just proves-exactly how much it is. Confirm. Right. It's working it out.
UNIDENTIFIED FEMALE: Uh-huh.
QUEST: And we'll see it over here. Wow!
UNIDENTIFIED FEMALE: Oh.
QUEST: That insurance would cost me 2,000 pounds. And for you?
UNIDENTIFIED FEMALE: 1,703.
(LAUGHTER) QUEST: Diamond is 1,714, and doesn't even quote for me.
UNIDENTIFIED FEMALE: Maybe your driving record.
QUEST: Hey, hey.
Elephant, 2,018 pounds, you're a mere 1,725. So we're looking at about 300 pounds difference or around about $500.
QUEST: Absolutely. That is quite a bit of difference, isn't it? Yeah. And some of them won't even supply a quote. Whereas you do get a quote from most-look at that-you get a quote from most of yours, but I don't.
Now, let's re-change it slightly. So you are-how do I do this? Oh, now I'm going to 1941!
UNIDENTIFIED FEMALE: 1971 and be done with it, shall we?
UNIDENTIFIED FEMALE: Right.
QUEST: And I'll add another few years onto my driving. I'll say I've been driving for 10 years. OK?
UNIDENTIFIED FEMALE: Right.
QUEST: Next step. And hit there.
UNIDENTIFIED FEMALE: Yes.
QUEST: Now, I need to do the same for yourself. And I shall avert my gaze, so what age are you? 1972?
UNIDENTIFIED FEMALE: 1972, there you go. So we'll both be 40 next year.
UNIDENTIFIED FEMALE: Wouldn't that be nice?
QUEST: I'll add 10 years onto your driving-where is that. Driving history? Oh, there we are, 10 years. Here we go.
UNIDENTIFIED FEMALE: One more down.
UNIDENTIFIED FEMALE: You have to take the bottom. There you go.
UNIDENTIFIED FEMALE: There are too many producers in this world.
QUEST: Yes, I couldn't even find the car.
Oh, look at this! You're more expensive!
UNIDENTIFIED FEMALE: 748.80 for Richard, and 885 for Becky.
UNIDENTIFIED FEMALE: That's ridiculous.
QUEST: Why do you think it becomes more expensive the older we get? You get more expensive?
UNIDENTIFIED FEMALE: All right.
QUEST: Is it because-
QUEST: You are looking at the shops and playing with your-
UNIDENTIFIED FEMALE: It used to be the mobile phone and the sandwiches.
These days I guess it is the driving glasses I need.
QUEST: When you are younger the men pay more.
UNIDENTIFIED FEMALE: Uhmmm.
QUEST: When you are older.
QUEST: Thank you.
QUEST: So, the rule of thumb is, at the younger age, the men pay more, and older, the women pay more. But is this ruling a victory for equality, or a cruel blow to women drivers. On the streets of London people have little doubt.
UNIDENTIFIED FEMALE: I don't think women should pay less. Because it is the women-it's an individual. It's not-you can't generalize. I don't think women should pay less.
UNIDENTIFIED FEMALE: It is the reason that women have less accidents than men. So, I think we should pay less into it.
UNIDENTIFIED MALE: I think that it is all down to the person rather than the gender.
UNIDENTIFIED FEMALE: I think it depends. I think some women can be better drivers, some women aren't. Just as some men are worst drivers than other men.
UNIDENTIFIED MALE: I don't think they are worse drivers than men, I just think that they drive less. And because they drive less miles, then men, maybe that is why they have less accidents.
QUEST: OK, I was joined earlier by Malcolm Tarling, from the Association of British Insurers. And I put it to him, that this ruling, although, as you can hear, there may be some equality in terms of fairness of gender, does it really fly in the face of common sense?
(BEGIN VIDEO CLIP)
MALCOLM TARLING, ASSOCIATION OF BRITISH INSURERS: We disagree with this judgment. We think it is fair and reasonable for insurance companies to take into account a person's gender, where it is actually relevant to the insurance risk. We're not interested in what sex you are, unless it is actually relevant to the risk. Now this is why we successfully lobbied for an opt out of the original gender directive back in 2004, which is now been overturned, of course, by today's judgment.
QUEST: How do you think it is going, across Europe, it is going to pan out? Is it going to be women paying more, or men paying less?
TARLING: Well, different countries have different approaches to this issue. In some countries the use of unisex rates is much more common place than it may be in the U.K. In the U.K., we estimate that young female drivers could end up paying as much as 20 or 25 percent more for their motor insurance because we can't take gender into account. And for life insurance, we could find that some will end up paying more, up to 20 percent more for their life insurance.
QUEST: But hang on. Why should the women pay more and the men not pay less?
TARLING: Well, that isn't necessarily the case, because what is going to happen is that insurance companies need to consider this judgment very carefully. And they are going to look, where it is relevant, they are going to look at the male-female split in a particular type of insurance. And it could mean, in some cases, the males may pay less for their insurance, for their motor insurance for example, we calculate that some young males may pay up to 10 percent less for their motor insurance than some young females, up to 25 percent more. Then we, across the board, don't actually think that is fair.
QUEST: Finally, the industry must be quite steamed up about this. You sort of don't believe it is fair, do you?
TARLING: We don't believe it is fair. And we are disappointed for the judgment. We are disappointed for our customers, but of course, it is going to be the law. And we are going to have to comply. There is no come back to this. There is no appeal.
QUEST: One, final, final question just occurred to me. In the example I've just shown, all of a sudden, when we're 40, Becky ends up paying more than me. Why-this is a dangerous question isn't it? Why do older women pay more than men?
TARLING: Well, it is not necessarily the case. It is all down to claims experience. Insurance companies will look at whether or not a person's gender is relevant. In motor insurance, it tends to pan out, younger ages, women are much better risk. Later on in life the differences between the sexes is a lot closer. Now that is either because women are getting better or men are getting worse. We are not going to go there on that argument.
But certainly across the board, gender can be relevant. And of course, this judgment means that from December 2012, we can't take it into account. We think that is going to give U.K. consumers a worse deal than they should be getting.
QUEST: So, now you know about it.
The market that is open is in-
(DESK BELL CHIMES)
New York. Need to bring this to your attention, 12,000 looking a little risky. Down 118 points, just some 1 percent. And the reason is manufacturing stocks in New York are quite a bit lower today. It is because of the spike in oil prices, which is now feared that it could well crimp what economic growth there is and take the shine off it. So the oil feeding into the manufacturing stocks and the wider economy, and the Dow is off nearly 130 points.
When we come back in a moment, John Galliano has been fired, or the process has begun at Dior. His comments described as deeply offensive. We'll talk about those, and what it means for Dior, in a moment.
QUEST: The fashion house Dior, has begun the process of sacking its chief designer, John Galliano. It follows footage that was revealed last week of him using racist language which appeared online, yesterday. Galliano, of course, has been in trouble-he was arrested in a separate incident last week when he allegedly made anti-Semitic comments to a couple at a restaurant in Paris. Now, Dior suspended him after that. This new video, of course, it takes it to a different league. It is arguably the straw that broke the camels back.
He says, Dior says, it is terminating Galliano's contract after seeing this footage.
(BEGIN VIDEO CLIP)
JOHN GALLIANO: I love beautiful people.
UNIDENTIFIED FEMALE: Are you blond? Are you blond with blue eyes?
GALLIANO: No. I love Hitler. People like you would be dead today
UNIDENTIFIED FEMALE: Yeah?
Your mothers, your forefathers would be (EXPLETIVE DELETED) gassed and EXPLETIVE DELETED) dead.
UNIDENTIFIED FEMALE: Oh, my God. Do you have a problem?
GALLIANO: With you? You're ugly.
UNIDENTIFIED FEMALE: With all people. You don't want peace? You don't want peace in the world?
GALLIANO: Not with people who are ugly.
UNIDENTIFIED FEMALE: Where are you from? Where are you from?
GALLIANO: You're (EXPLETIVES DELETED).
(END VIDEO CLIP)
QUEST: The Oscar-winning actress Natalie Portman has condemned Galliano's comments. Portman, who is herself Jewish, said she was shocked and disgusted by the footage and wanted nothing to do with the designer, which of course, is somewhat bearing in mind that she is the face of Dior's perfumes, but pointedly did not wear a Dior dress to Sunday night's Oscar ceremony. That kind of reaction is a major problem for Dior, just days before their ready-to-wear show, during Paris Fashion Week. Galliano has been their chief designer since 1976.
Let's put this into context. Dior is owned by LVMH, which is the world's largest luxury goods group. Now the group's Chairman and Chief Exec Sidney Toledano issued a statement saying, "We unequivocally condemn the statements made by John Galliano which are in total contradiction to the long-standing core values of Christian Dior."
Aside from the Dior brand itself, LVMH owns luxury brands Moet Chandon Champagne, Vuitton, Tag Heuer watches, and of course the Galliano brand, itself. The group's profits in 2010 were over 4 billion euros, and more than half of that came from the fashion and leather goods division.
LVMH shares closed the 0.9 percent up, having said that, they were off the day's highs in the final hour of trading. And certainly it was a rocky session.
"Women's Wear Daily" was the first publication to break the scandal. Its editor, James Fallon, is with us from CNN New York.
And I just need to correct one thing, I think, Galliano has been the designer since '96. I misspoke a moment a two ago there. So that's clear.
James, we talked about this, didn't we, last week? And you said that there was very little doubt what had to happen and I'm guessing once this video came out, why did it take them 24 hours to fire him?
JAMES FALLON, EDITOR, "WOMEN'S WEAR DAILY": I think, obviously, they wanted to be cautious and wait until his appearance at court yesterday, in the original lawsuit that was filed and the original police hearing. But I think the more that the video spread across the Internet and got reaction. And then, obviously, Natalie Portman's reaction this morning. They really were left with no choice. The case would have dragged on for months, they would have been dragged through the mud of every allegation. And who is to say there aren't more videos or allegations to come.
QUEST: This was-I mean, it will be seen as preservation of the brand, by Dior, to take this swift measure. Have the done enough and quickly enough, you think?
FALLON: I think probably they have. I mean, obviously the next step is what Galliano himself does. We don't think there will be a statement today. It is more likely to come from his lawyers tomorrow. He'd already sued the original couple in the altercation in Paris for defamation, whether that suit goes on, etc cetera. But they really just sort of almost cauterized the wound and it is like, OK, let's move on. They'll hold the show this weekend. And then they'll get a new designer in and it will probably blow over, eventually, depending upon what happens in that original case.
QUEST: Should they hold the show? Because obviously, that is a debate now taking place in Paris, isn't it? I mean, is it appropriate to hold the show?
FALLON: Uh, tough call. I think that on the one hand a significant business is involved in holding that show. A lot of investment, a lot of jobs are at stake and so forth. Galliano's statements obviously are inexcusable. But it is still a business. And so by canceling the show I'm not quite sure what also would be gained in that apart from, you know, in a sense, almost trying to hide. Saying they have something to hide, which Dior, itself, doesn't really do. I mean, they are relatively, if not completely blameless in this. Apart from perhaps not acting quickly enough originally.
QUEST: OK, now, let's talk about the replacement for Galliano. The names in the frame, or the names out there that were referred to. There is no one of, obviously, his stature or experience. So Dior becomes in a- perhaps in a difficult position? Or not?
FALLON: It is and it isn't. I mean, actually, I would slightly disagree. They do have a large bench of significant talent. I mean, Mark Jacobs is at Louis Vuitton, which is really their powerhouse brand within the LVMH Group. So the question is do you take your star designer from Louis Vuitton and move him over to Dior, which they could possibly do. They have a lot of-Riccardo Tisci is at Givenchy.
Peter Dundas is another name we hear. So they have a lot talent from within the group. There is a lot of talent outside the group as well. Albert Albas (ph) at Long Van (ph), Hider Ackerman (ph) is a name everyone is watching. So, you know, it is-yes, Galliano is a supreme showman, but there are a lot of talented designers out there who could step in and within a few season, if not almost immediately regain the momentum of the house.
QUEST: And finally, if Galliano-I mean, I assume, no major-one can never assume in the fashion industry, I realize, that I'm making a somewhat-or anyway, but no major house touches Galliano for the foreseeable?
FALLON: I don't think so. The question also is what really also even happens to his own label, which LVMH does own. Do they really even go ahead with that?
FALLON: You're right. I mean, this is a name that is going to be a big radioactive for quite a while to come.
QUEST: James, thank you for coming in on a busy day. Which I know you'll be busy looking at this story. I appreciate it. James Fallon, joining me, the editor of "Women's Wear Daily", WWD, from New York.
In the U.S., the actor Charlie Sheen continues media appearances to defend his own headline grabbing behavior. Sheen insists he is the real victim after the trouble with the law in a series of tirades which has resulted, of course, in the U.S. television network suspending his show.
On PIERS MORGAN TONIGHT, Sheen says he doesn't consider himself an addict. He proclaimed himself focused and clean and thanks to epiphanous awakening.
(BEGIN VIDEO CLIP)
CHARLIE SHEEN, CELEBRITY: There are a couple of things I wish I hadn't started. One of them is smoking cigarettes. But now I had a C T scan, I have the lungs of a non-smoker, which is a little bit weird. You know, two packs a day for 25 years. Of course, you can't hear it in my voice or anything.
PIERS MORGAN, CNN ANCHOR, PIERS MORGAN TONIGHT: What about drugs and alcoholic drinks?
SHEEN: Drugs, yeah, but I-you know, I guess there is some school of thought that dictates that we are the sum total of all our experiences, both good or bad, win or lose, or draw. You know, like that. So, I don't think I would trade any of it. Because I'm still alive, which is pretty cool.
QUEST: Charlie Sheen, on "PIERS MORGAN TONIGHT", later.
QUEST: Expanding your horizons and learning to let go. That is what two of our featured chief execs are getting to grips with in tonight's edition of "The Boss". Richard Braddock is branching out from the Big Apple. He's going from New York back to New Jersey. Sarah Curran is in London, and she's delegating responsibility and it is proving easier said than done. Can she delegate? You'll find out in tonight's edition of "The Boss".
UNIDENTIFIED MALE: Previously on "The Boss", Sarah Curran urged her team to think out of the box.
SARAH CURRAN, CEO, MY-WARDROBE.COM: Every part is so important. Because this is us presenting our new phase, our new direction.
UNIDENTIFIED MALE: And a new product in New York for a new client. Richard Braddock sets a challenge with a line of kids meals.
RICHARD BRADDOCK, CEO, FRESHDIRECT: It is all about healthy eating today, every way you slice it.
UNIDENTIFIED MALE: Richard Braddock is back in New Jersey, a market they first entered last year.
BRADDOCK: Rick Braddock.
UNIDENTIFIED MALE: Rick, Rob Laberro (ph).
BRADDOCK: Yes, how are you?
UNIDENTIFIED MALE: Very good. Welcome to Paramus.
UNIDENTIFIED MALE: This is Richard's latest trip since FreshDirect entered a new market last October. Today's he's making a return. And Burgin County is a continuation further into the state.
BRADDOCK: This is a new expansion for us.
UNIDENTIFIED MALE: Well, it's great to have you and I trust that you'll be successful.
UNIDENTIFIED MALE: FreshDirect has been feeding New York City for years, but with more and more families in the Garden State requesting their services the suburbs have become a profitable business.
BRADDOCK: The suburbs are everything we thought they'd be. And it is one of the proof-points for our business that we could exist not only in urban environments, but out in the suburbs.
UNIDENTIFIED MALE: Oh, look at this.
BRADDOCK: OK, so let's look a little bit at what you have in here.
UNIDENTIFIED MALE: Continuing the tradition, Richard delivers a box of FreshDirect produce to local mayors. And works his charm offensive.
BRADDOCK: We're excited to be here and it is a, for us, another part of New Jersey, but of course for you it is the most important part of New Jersey.
UNIDENTIFIED FEMALE: Of course.
BRADDOCK: Well, we'll probably continue expanding into other markets in New Jersey. We're headed toward Philadelphia and we don't have dates on that yet, but that is our intention. And we'll probably expand further up into Connecticut and the rest of Westchester, too, over time.
UNIDENTIFIED MALE: One week and counting, and Sara Curran is piling the pressure on her team before the re-launch of her web site.
UNIDENTIFIED MALE: Sarah, thought it (UNINTELLIGIBLE) everyday luxury.
UNIDENTIFIED MALE: Today, she's been called away for an important meeting overseas. And she is leaning on her staff to make some key decisions.
UNIDENTIFIED MALE: I'm thinking, no.
UNIDENTIFIED MALE: For Sarah, this means letting go.
CURRAN: I have to delegate more. I am very passionate about the brand, the direction, the vision. And I do keep quite tight control on that. But I have to allow my exec team to own the areas that they have, because that is the way the business is going to grow.
UNIDENTIFIED MALE: For the team, it means deciding what to serve their guests on the big launch night.
UNIDENTIFIED FEMALE: Is that tuna?
UNIDENTIFIED FEMALE: Yes.
UNIDENTIFIED FEMALE: That looks amazing actually.
UNIDENTIFIED MALE: Letting go is fine in principle, but in practice, it is a different matter.
CURRAN: I left that team the sort of enviable task of doing the tasting for the canapes and cocktails and drinks, etc cetera, for the event. And I am-I'm a bit of a control freak. But I left quite clear instructions, even down to the size of the canapes.
UNIDENTIFIED MALE: From the canapes, to the drinks, to the location, Sarah is micromanaging every detail of this party, after all, it is her company.
For Sarah there is more to this than just champagne and canapes. More than anything she wants her team to understand her direction for My- Wardrobe.
CURRAN: There is no doubt that every member of the team understands our new directions, which is everyday luxury. It is reflected in the team, in the way that they dress, and what they want from My-Wardrobe, equally, as customers.
UNIDENTIFIED FEMALE: (UNINTELLIGIBLE)
UNIDENTIFIED FEMALE: I don't know.
UNIDENTIFIED MALE: Sarah, simply can't let go. A week later she is back in London checking in on the venue for her party. It seems trusting her team only goes so far.
CURRAN: All I want is for my wardrobe to be the most phenomenal success. So I -- I have to let people own it. It's the one way that I'll get people's dedication and passion is if they feel ownership of -- of my wardrobe, as well. UNIDENTIFIED MALE: Next week on The Boss, nerves and excitement -- Sarah Curran unveils her new direction for my-wardrobe.
(END VIDEO TAPE)
QUEST: The Boss only here on CNN, QUEST MEANS BUSINESS.
Now, this gentleman poured his heart from prison. Few hearts are bleeding, though, for what Bernie Madoff had to say. As victims show their anger, we'll speak to the man who got the exclusive, after the break.
QUEST: Hello. I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN. And on this network, the news always comes first.
The U.N. says a humanitarian catastrophe could be unfolding on the Libya-Tunisian border. Refugees are streaming into Tunisia to escape the violence from Libya's uprising. Officials expected 15,000 to come through on Tuesday alone. Border authorities and aide workers are overwhelmed and say more help is needed immediately.
Germany's popular defense minister has resigned in the wake of a plagiarism scandal. Karl-Theodor zu Guttenberg has been accused of cheating on his doctoral dissertation. At a news conference in Berlin on Tuesday, he said it was the most painful step of his life.
(BEGIN VIDEO CLIP)
KARL-THEODOR ZU GUTTENBERG, FORMER GERMAN DEFENSE MINISTER (through translator): When I become the center of attention at the expense of the soldiers who I am responsible for, then I cannot justify remaining in office. Because the German Army, the academic community and the parties who back me in are danger of being damages, I am taking the step that I would expect others to take.
(END VIDEO CLIP)
QUEST: Christian Dior has announced it's begun the process of firing John Galliano after video was released of the designer making anti-Semitic remarks. The French fashion house issued a statement calling his comments "deeply offensive." The video shows Galliano saying, "I love Hitler," amongst other things. The designer's lawyer says Galliano denies that he is anti-Semitic.
Victims of Bernie Madoff's Ponzi scheme are expressing their anger about an interview that the disgraced financier gave from his prison cell. The 67-year-old, whose permanent -- Stephan Halio (ph), whose retirement fund was wiped out by Madoff's scheme, told CNN, "The man is a monster, a liar, a thief with absolutely no morals, no regrets and no shame."
Now, in the interview with "New York Magazine," Madoff accused the investigator -- investors who lost money of being greedy. He went on to say he just went along. Madoff even dismissed suggestions he had left investors in financial ruin.
(BEGIN VIDEO CLIP)
VOICE OF BERNARD MADOFF, IMPRISONED FINANCIER: All of my friends, all of my -- most of my clients, the individual clients, all are not -- they're losers.
UNIDENTIFIED MALE: Yes.
MADOFF: You know, they -- I made a lot of money for them. I was making 20 percent return for them doing arbitrage.
Did people lose profits that they thought they made?
Yes, you know. But did they lose capital?
I'm sure -- I'm confident when this thing is all finished, very few people, if any, will lose their principal.
(END VIDEO CLIP)
QUEST: Madoff also suggested the banks and hedge funds he dealt with had to know about the scheme. But he says they demonstrated willful blindness toward his activities.
Apparently, it was Bernie Madoff who first made contact with my next guest, Steven Fishman, contributing editor for "New York Magazine".
And I'm delighted that Mr. Fishman joins me from New York.
Thank you, sir.
It's an excellent, excellent article that you've written in the magazine.
But let's just go through this at a -- at a clip.
Did Madoff -- did you get the sense that he was sorry, that there was this remorse, that the -- it was deep?
STEVE FISHMAN, CONTRIBUTING EDITOR, "NEW YORK MAGAZINE": Yes, there - - there was -- let's -- let's put it this way. He said the words that he is -- takes responsibility, nothing justifies it. You know, at the same time, I think responsibility is something that Bernie Madoff wants to share with a lot of people, as you said in your introduction.
So that -- that, in a certain way, you have to believe that his sense of responsibility is compromised.
And the -- the whole question of the -- the enormous pressure that he was on -- under during the years of this Ponzi scheme, when he knew, at any point -- you tell an interesting story about how he knew -- he couldn't even sell his business for a billion dollars because he was going to -- he was fearful it would all come out.
FISHMAN: That's true. And at various points, he had offers, he told me. And the -- the lowest offer, said Madoff, was $1 billion. I know from speaking to people close to the family that they were just livid -- their word -- livid that the offer wasn't accepted. And, of course, their father, their sons worked for him, Bernie Madoff, could not at that point tell them why. He said simply, "That's what I've decided."
QUEST: I -- I'm being remiss, in a sense, if I haven't reminded our viewers, of course, that one of his sons, Mark, committed suicide, tragically.
Within the context of this awfulness, how did you find Madoff to talk to?
FISHMAN: Well, of course, that's the surprising thing, is that, you know, you speak to a guy who is an evil mastermind, certainly billed that way, and yet he comes across as avuncular, even upbeat, a guy who speaks plainly and explains himself well. And I think as you -- your viewers heard, you know, he doesn't duck any questions. He may have his own particular answer, but you don't feel like you're speaking to somebody cagey.
QUEST: You will have been asked this question a gazillion times, so - - and I apologize for asking it again. I mean, obviously, Madoff maintains and he says to you that he did it on his own, that his family didn't know.
FISHMAN: I actually believe that his family didn't know. And part of the reason that I believe that is, having spent a lot of time thinking about and investigating and interviewing people about the family dynamics, you have to understand that Bernie really was the patriarch and he was quite a tyrannical patriarch, both at the head of the family and the head of the business for which his sons, his brothers, his son-in-law, worked, so that he would give -- make decisions and the -- his reasons would be...
FISHMAN: -- I -- it's because -- because it's the way I want it. So it -- it's very easy for me to believe that something that he wanted to keep secret, he could.
QUEST: And -- and, finally, Steve, the old journalist's question.
When you picked up the phone and it was a collect call from Bernie Madoff in prison, how did you feel?
FISHMAN: Well, you know, we're cynical people, journalists. So part of me was thrilled. A good -- a good part of me was thrilled. And, listen, the -- the one person who hasn't been heard from in -- in all of the millions of words that have been written and broadcast about this scandal is Bernie Madoff. And we wanted to hear from him. And -- and there he was on the other end of the phone explaining himself.
It -- I've written about him before. He's the guy that I always wanted to speak to.
QUEST: Steve, we're very grateful that you've spoken to us today.
Steven Fishman from "New York Magazine," joining me from New York.
We thank you.
Now, somebody else who's been talking -- in a slightly more public forum -- is the head of the U.S. Fed. It's Ben Bernanke. I'm not sure it's entirely appropriate to use Ben Bernanke and Bernie Madoff even in the same sentence, but the Senate Banking Committee has been listening to the chairman of the Fed, an upbeat assessment. It won't all be plain sailing, in a moment.
QUEST MEANS BUSINESS.
QUEST: Ben Bernanke says the recent surge in oil and other commodity prices isn't likely to have a major impact on the U.S. economy.
But that's not the way the markets are responding at the moment. It is the high rise in oil prices and that potential effect that is having this -- down now 146 points, 1.2 percent. We have been off over 150 a moment or two ago. So that's the way things are at the moment.
As I say, Ben Bernanke was on Capitol Hill giving his regular testimony.
Maggie Lake is in New York -- Maggie, the -- the chief of the Federal Reserve may not think that the -- that -- or he may be more upbeat, I have to tell you, but his numbers are not.
MAGGIE LAKE, CNN BUSINESS CORRESPONDENT: Yes, that's right. Investors very focused on -- on the potential for the -- the rising energy prices to hit the economy, hit the bottom line. The Fed chairman not so much, although he did talk about it at great length.
Basically, the message from -- from his testimony today, he sees no reason, giving no hints that he plans on scaling back the stimulus program they have in place, that quantitative easing, and no particular hints he plans on embarking on another one.
And I have to tell you, Richard, like the markets, much of this testimony was focused on higher energy prices. The -- the senators grilled the chairman again and again about the impact, especially gasoline prices. Their constituents feel that very hard. And Bernanke said that they are watching it, but he felt like the U.S. economy could handle it, as long as it was temporary.
Have a listen.
(BEGIN VIDEO CLIP)
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: The most likely outcome is that the recent rise in consumer prices will lead to, at most, a temporary and relatively modest increase in U.S. consumer price inflation, an outlook consistent with the projections of both FOC (ph) participants and most private forecasters.
That said, sustained rises in the prices of oil or other commodities would represent a threat both to economic growth and to overall price stability.
(END VIDEO CLIP)
LAKE: Now, that is the issue there, sustained. And Bernanke made it very clear that if that were to become the case, the Fed takes it very seriously. It doesn't plan to let get out of control. It says it is still part of its mandate and it paying attention to it.
But right now, really not a front burner issue. And, Richard, once again, the chairman spending much of the testimony defending himself, defending the Federal Reserve and their policy, saying they can ease back and exit from the stimulus program when they feel it's necessarily.
But, clearly, they have a lot of doubters out there -- Richard.
QUEST: Now, we do need to just touch on one other event concerning insider trading, which has been taking place all -- alleged -- insider trading is alleged to have taken place, but there have been some events.
LAKE: Yes, that's right. And the markets, by the way -- the trading floor is very much talking about this, as well, today, a very high profile figure, the SEC announced civil charges against a man named Raj -- Rajat Gupta. He's a forming man -- a former managing director of McKinsey & Company, served on the board of many big companies, including Goldman Sachs. And regulators are alleging that he passed along confidential information about those companies to Raj Rajaratnam, the -- the Galleon hedge fund owner, who is facing a trial -- a criminal trial next week. We're going to be coverage that for you, Richard.
I should point out, part of, by the way, what -- what the fellow today, Rajat Gupta, supposedly passed along, that $5 billion Warren Buf -- investment Warren Buffet made in Goldman Sachs during the financial crisis. That is just one of the events and pieces of information he has said to have passed along.
He, Gupta, vigorously denying those charges. And they are SEC civil charges, not criminal charges. But he is a very big player.
So this government's attempt to crack down on insider trading really taking on another proportion today. The story just crossing this after. And there will be a lot more coming out on it. But this is very serious. The investigators made...
QUEST: All right...
LAKE: -- clear this is a top priority. And, again, this feeds into the trial, which begins next week, which we will watch for you.
QUEST: So you'll have your hands full with that.
Maggie Lake in New York.
Now, Maggie was just talking a moment or two ago about Ben Bernanke on Capitol Hill.
If we turn to this side of the Atlantic, interest rates may rise in the European -- in the European Union this week. It's thought the ECB could move to curb inflation, at least there is just the possibility of that. Prices are rising at an annual rate of 2.4 percent in the EU. That's above what the ECB believes is its target rate. And it's the highest level in more than two years.
The commission is forecasting that inflation will average 2.2 percent for the whole of the year, which is all above the target rate, still, which is 2 percent.
Price rises are threatening to eat away at economic growth, although, that, too, is picking up. The commission has raised its forecast for growth in the Union by 1.2 -- to 1.6 percent, an improvement on November's predictions.
In the U.K., the governor of the Bank of England was telling U.K. lawmakers that things are getting better in Britain.
(BEGIN VIDEO CLIP)
MERVYN KING, GOVERNOR, BANK OF ENGLAND: Exports are growing rapidly. Exports of good have grown by over 10 percent a year. Manufacturing looks fairly strong. The surveys that we have for the beginning of this year suggest that activity did pick up in the first part of this year. Whether that applies to the economy as a whole, right across the service sector -- because it was the service sector that was weak in the end of last year -- remains to be seen.
(END VIDEO CLIP)
QUEST: Now, while we've been on air, the news conference has been taking place at the Pentagon in Washington, including the U.S. secretary of Defense, Robert Gates, and the chairman of the Joint Chiefs of Staff, Admiral Mike Mullen. They've been commenting about the unrest in Libya. A few months ago, Secretary Gates said he has directed several U.S. Naval ships to the Mediterranean.
Apparently the idea is for them to provide support for evacuation and humanitarian relief as and when it is needed.
Secretary Gates added that no decisions have been made about whether to impose a no fly zone over Libya.
We will keep you involved and informed of events as they go.
So, to your European weather forecast. Well, truth be told, a good old-fashioned bit of self-interest. We all really care...
QUEST: Well, it's true, Guillermo. All we really care about it is where it is where we are. And it's fine for me today, thank you. So I'm all right, Jack. Pull out the ladder.
GUILLERMO ARDUINO, CNN METEOROLOGIST: And it's going to be fine for the rest of the week, I think. Of course, you know, you're in London and you may see here very small events like a couple of rain showers here and there. But it look -- it's looking fantastic. And it's not looking that cold, either, even though, you know, at night, we see three or four degrees. But look at the temperature trend. Looking fine.
The east, I mean when is Russia going to get a break?
At the same time, watch out. If we have foreign nationals trying to leave Libya and they were in other parts and they are going to Tripoli to finally move into Malta or Italy, twee -- we were anticipating there was a low pressure center that was going to bring some winds. And, actually, that happened last week. The -- the other two low pressure centers that we have are bringing winds, but it's not that bad. So we don't think that it's going to be a disruption for all those shipping operations here in Libya and also the air traffic, either. It's going to be fine.
So the forecast is as follows -- party sunny skies, 16 degrees to 18 degrees, looking fine. So Tripoli, if you have plans to -- or if you're expecting family or relatives who are pulling out of Libya, the weather is going to be OK, unlike what we saw last week, though the rain will be quite intense in Italy. And that's the same low that is very slow moving and it's bringing a lot of rain into Sicily, into Italy overall, into Corsica, Sardinia and Malta, too. Tunisia is getting some rain, as well.
That said, Europe, in general, looks OK. Amsterdam with some windy conditions, Paris also. But you see the -- the green boxes. That means operations at these airports are OK. Munich, in the evening, may see, tomorrow, some foggy conditions. Rome with the same low that I was talking about. We may see some rain and -- but -- but it's not bad. You know, we will see rain, but not bad.
I want to show you, though, delays at the airports in Europe. Looking fine, I'm so happy to be delivering good news here. Manchester with some delays, and Luxembourg, as well. Let's see why. We have moderate delays in here. No reason so far. And -- oh, I -- I noted that, also, in Helsinki, we have snow. Gothenburg, cloudy skies, minus two, with moderate delays.
Maybe volume, you know?
It's not necessarily associated with weather.
In the States, more snow in Washington, in Oregon.
But remember the storm from yesterday?
Gone. It is totally gone. That's why we have no delays. A green light in the United States for airports right now. Tomorrow it's looking OK from Houston to New York to Dallas, Chicago, Atlanta, Los Angeles, Vegas, Phoenix, San Francisco, looking OK -- Richard.
QUEST: Well, I'm sure you missed a few airports out there, but we won't hold you to it after...
QUEST: -- you know, the -- the moment you say no delays, Guillermo, hostage to fortune.
QUEST: There will be somebody e-mailing you, even as we speak...
ARDUINO: Yes, but weather de -- weather-induced delays we are not likely to have any. Now, volume or mechanical issues, that's another thing.
QUEST: Brave man. Brave man, though.
Forward the e-mails to me.
Guillermo, many thanks.
ARDUINO: Thank you.
QUEST: A Swedish name with Chinese owners, Volvo's got new international ambitions and new cars. The chief exec of Volvo.
(PICTURE OF CAR ON SCREEN)
And that's the car, in a moment.
QUEST: Volvo announced it's investing $10 billion in China. And today, we've seen one of the cars that it is hoping to sell there. Volvo unveiled its brand new V60 Plug-in Hybrid at the Geneva Auto Show. And the car can run on electricity, it's hybrid, it's -- well, we'll hear about it in a second.
Volvo is a Chinese-owned company, after Ford sold it. It believes and hopes to sell 200,000 cars in China by 2014, which in more than five times as many cars as it sold last year.
Volvo's chief exec, Stefan Jacoby, joined me on the line from the Geneva Auto Show.
And I asked him if customers even wanted a new generation of hybrid cars.
STEFAN JACOBY, PRESIDENT & CEO, VOLVO CARS: This is a logical further development of a black (ph) in hybrid. And, again, it offers everything. It offers luxury and premium, but it offers, also, responsibility and environmentally friendly driving.
I think it is a new milestone in the automotive industry to combine luxury, performance with environmentally friendly and low fuel consuming vehicles.
QUEST: Now, where do you hope, obviously, the biggest sales of this will be?
Pru -- before you -- you were bought out, the U.S. was your largest market, after Sweden.
Do you anticipate the U.S. remaining your largest market for these vehicles?
JACOBY: We will not have a ranking within our company who is the biggest market and who is, then, the second biggest market and so on. The United States will remain one of the most important markets. We have initiated a comeback in the U.S. market. It is working very well in the first two months. We are very optimistic and we want to have, of course, a stronger base than we had achieved last year in the United States.
Here, we are talking about 100,000 vehicles. The United States will remain important to us. The same with Europe.
But, of course, one of our core markets will be China. China offers a lot of opportunities. We are investing, also, in an industrial footprint in China...
JACOBY: -- and we intend to plan more than 200,000 vehicles by the year 2015.
QUEST: And that, of course, reflects your new ownership.
How is that going?
You're now seven, eight months into the new structure, the new ownership?
Is that working as well as you would expect it?
JACOBY: Yes. It works with -- as with every other ownership on this globe. There is no difference. I'm very hopeful that with the no -- new owner, with Li Shufu, we have an entrepreneurial -- we have a specialist in the automobile industry who understands how important branding is, how important investment into future technology is. And with that, I think Volvo will have a very bright future toward sustainable growth and profitability.
QUEST: Right. But, obviously, there is a shift in emphasis. Your earlier answer made that clear. There is a shift in emphasis in terms of where you are hoping to do business, clearly. That's a given.
JACOBY: Hmmm. No, I don't think so. We are investing in all markets. In total, we are investing $11 billion U.S. over the next five years in our new product strategy. And we are growing at all market areas, from Brazil to the United States, in Europe, but also in China. This has the same attention.
And, of course, with our Chinese ownership, we have maybe more opportunities and can gain quicker momentum than our competitors in their very important Chinese market.
(END VIDEO TAPE)
QUEST: That is the chief executive of Volvo joining me from the Geneva Auto Show earlier today.
When we come back in a moment, let's stick with that theme of cars.
Women and men paying the same for insurance -- it's well worthy of a Profitable Moment.
QUEST: Tonight's Profitable Moment.
It's official -- insurance companies will no longer be able to take gender into account when deciding our premiums. When all the facts are the same, men and women, well, we all have to pay the same amount. This is upholding the European Treaty in its strictest way.
But does it make sense?
Insurance companies base their whole industry on actuarial tables. Young men have more accidents than young women. Smokers generally die younger than those who don't smoke. Sorting and pricing risk is a science and an art. And now, of course, the European Court has upheld the treaty in a very strict sense. And it seems to fly in the face of the entire industry.
In the end, though, principles are not policies and it's that what counts. And it's that what counts. And if it is unequal and possibly unfair, then it has to go.
Now, the issue becomes do women pay more or men less?
And that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I do hope it's profitable.
"PIERS MORGAN TONIGHT" is ahead after the headlines.