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Rise Of Technocrats In Greece, Italy; Markets Rally, For Now; Modern Warfare Record; Illegal Trade in Rhino Horns; Eco-Tourism in Africa

Aired November 11, 2011 - 14:00:00   ET


MAX FOSTER, CNN ANCHOR: Crisis? What crisis? The markets look bright, but the assessment of Europe is still grim.

"Call Of Duty" makes $400 million on day one. I'll be speaking to the company's chief executive about his blockbuster game.

And the worse they behave the better they are to draw. Cartoonist Joel Scar gives us the week in pictures.

I'm Max Foster. This is QUEST MEANS BUSINESS.

The light at the end of the tunnel may have just got a little brighter for Italy. It's senate has approved a crucial set of austerity measures. Both the stock and bond markets can sense the progress. Incredible results really. Yields on Italy's 10-year bonds have closed at the lowest point since this time last week. Now at 6.5 percent yields. Not thing to start cartwheels about, but this is the second straight day where they have fallen and quite sharply at that.

Perhaps it's a sign that Italy hasn't necessarily passed the point of no return and can get its borrowing costs under control. All this has done wonders for those equity markets. You would never have believed it if we had told you on Wednesday. But markets have actually finished the week up higher overall, although, only just in the case of the FTSE. It is all thanks to a last minute surge off the back of that Italian senate vote.

The main index in Milan was up almost 4 percent. The DAX and the CAC are not too far behind. And a similar picture, too, on Wall Street, again, hard to believe the Dow could recover from the near 400 percent sell off on Wednesday. But look at it today. We are back above 12,000 and on course to finish up on the week overall.

Alison is at the New York Stock Exchange. I mean, what a week for you, you must be exhausted?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: I am exhausted. I was thinking that exact thing, Max.

Yes, this is day two of some big gains for stocks. We are also watching the VIX. That measures the fear index-that is the fear index that measures the volatility, the sort of sentiment on Wall Street. This is sliding more than 8 percent right now. And that is, of course, all thanks to the progress being made in Greece and Italy. Now there is some hope that those new governments, in both of those places, will take a harder stance on putting austerity measures in place.

Now, we know that the market has been controlled all week by Europe. One negative headline and the market plunges. A positive one and we see the market climb. And analysts say expect this to continue to be the case with one analyst, Max, saying that we are basically getting a fresh shock every few days. So, obviously no shocks to the negative side today, Max.

FOSTER: Keeps life interesting. Alison, thank you very much indeed.

Well, for Italy the comeback starts here. It is halfway to passing a crucial set of reforms as the senate approves an austerity deal that, once passed, by the lower chamber, will spell the end of Silvio Berlusconi's rule. It is a crucial step in the right direction.

Matthew Chance is in Rome.

And, Matthew, you have been watching all of this unfold. And actually the progress, the political progress has been surprising effective over the last week, right?

MATTHEW CHANCE, CNN INTERNATIONAL CORRESPONDENT: Yes, they are moving with lightening speed, aren't they? The Italian lawmakers absolutely desperate to show that they are truly committed to getting these austerity measures through. That that they are committed to putting their economy back on the track. They have already passed this austerity budget, in the senate, remarkably quickly. They have called a special session of parliament for tomorrow, for Saturday, where they are like to pass that budget bill into law, paving the way for Silvio Berlusconi to step aside.

And therefore easing yet more pressure that the markets have been placing on Italy; not believing that Silvio Berlusconi was the right person to lead the country through these very difficult economic times. And so what we could be seeing now is by the end of the weekend, a new government put in place with an eminent economist at its head to steer Italy through these very difficult austerity measures and these very difficult economic times, Max. So, a lot of progress.

FOSTER: OK, Matthew, thank you very much, indeed.

Not over yet, well, as Europe's debt crises escalates an executive at one of the U.K.'s top asset management companies is warning a 2008 scale crisis could be just months away. Alan Brown is the chief investment officer at Schroders. We spoke earlier about the potential unraveling of the Eurozone, despite all of this progress. And as dramatic as the scenario maybe Brown told me that currency union break ups are more common than you might think.


ALAN BROWN, CHIEF INVESTMENT OFFICER, SCHRODERS: In the narrowest of definitions, 69 currency unions have come to an end between 1945 and 2007. And I'm not including things, for example, like when sterling left the exchange rate mechanism in 1992. But if you think back to that time, when we fell 25 percent, actually that heralded in 15 years of non-inflationary growth.

It is true that our Greek holidays, if you like, got a whole lot more expensive, but that is not what we remember. What we remember is a healthy economy with pretty full employment. And the trouble is with Greece locked into the exchange rate system, as we improve public sector finances it is all coming at the direct expense of the private sector. If we could drop the exchange rate there would be a hope that they could improve their external trade position, improve their current account. And if you like, reduce the strain on the working population.

FOSTER: So, should we let go of this ideology and just look at the reality of the situation and accept that Greece, for example, maybe even a couple of other countries should just leave the currency union and it won't be that bad for everyone, actually.

BROWN: Well, I think that is right, but provided that a strong enough firewall is put in place to make sure that we then don't get rampant contagion leading to a sort of domino collapse of all of the other peripheral countries.

FOSTER: What does that actually mean? What is the firebreak?

BROWN: I think the only realistic firebreak that would be strong enough to do this, relies on the participation of two institutions, Germany, as a country, and the ECB, as the financial vehicle with sufficient clout. And that is difficult. It is difficult for Germany to accept and it is difficult for the ECB to do it at the moment, because it would be in direct breech of the Lisbon treaty.

FOSTER: On a practical level, an example that keeps being brought up is a Greek with a euro-based mortgage, with a bank in France, for example. And that is very complex system to unwind, and people say that is where the real problems will be. How do you resolve that basic level problem?

BROWN: Yes, that indeed is a complex issue. How do private contracts get redenominated? Do they get left as they are as euro obligations, which might bankrupt companies or individuals in Greece? Or do they get redenominated in new Greek drachmas, which causes problems at the other end. That is all a part of the negotiation of splitting the currency up, or splitting Greece away from the single currency. And it would need to be done with an aid package, precisely to take care of those kinds of situations.

FOSTER: Do you think there will be some sort of orderly break up of it, or are you more negative than that?

BROWN: I really do fear that we are getting very dangerously close to a disorderly collapse. We see early signs of a credit crunch within the Eurozone area. And if that happens, you know, we risk a very sharp downturn in economic activity, which will spread beyond the Eurozone to bring, for example, the U.K. potentially back into recession next year as well.

FOSTER: How close are we to a 2008 scenario?

BROWN: I think we have all of the makings of it there. I think we are in the end game, which will be resolved in a matter of-no more than a couple of months or so.


FOSTER: It's a very grim, outlook, isn't it? But increasingly common.

Now when we come back as Greece swears in an unelected prime minister will look at what the Eurozone crisis has done for the continent's political landscape.


FOSTER: The Eurozone crisis produced fears of a domino effect with one country after another sliding into a crisis that certainly-well, that is certainly what seems to be happening to at least some of the continent's political leaders. With Italy's Berlusconi set to be the next one to step aside. Emily Rubin looks at the personnel changes in the Eurozone's leadership.


EMILY RUBIN, CNN INTERNATIONAL CORRESPONDENT (voice over): For almost two decades Italy's Prime Minister Silvio Berlusconi was rich pickings for the political satirists. But this week the consummate survivor of scandal both political and sexual appears to be on his way out. One of the biggest victims yet of the Eurozone crisis.

JOHN PRIDEAUX, "THE ECONOMIST": Italy is very uncomfortable if you are somebody who, you know, likes democracy and would wish to triumph in undemocratic places like China. And Silvio Berlusconi has effectively been forced out by the bond market, rather than by Italian voters.

RUBIN: Prime Minister Berlusconi's offering to step down after parliament approves new austerity measures, was aimed at averting a Eurozone bond market meltdown. But critics say it should be up to the people to vote leaders in and out, rather than what they see as political change brought about to save the euro.

Berlusconi could be the second leader to fall victim to the crisis in the past few days. Greece's Prime Minister George Papandreou has gone, but before his exit he tried to put the bailout question to voters, calling for a referendum on the country's EU/IMF rescue package. It outraged European leaders and caused turmoil in the markets. Papandreou reversed course and headed for the door.

MATS PERSSON, DIRECTOR, OPEN EUROPE: We see in Greece that the Greek government cannot-it has become a sort of implementing institution, implementing policies that have been already decided by politicians and officials sitting in other countries. And as a voter, then, it becomes an extremely frustrating situation. And at the end of the day, you wonder how long that can hold, because-as a voter-if you feel that the entire political class is just sort of going in one direction and doesn't really respond to voters, concerns voters will look for alternatives.

RUBIN: But supporters of the European project say rather than the crisis threatening democracy. It is democracy in action. Stronger countries like Germany and France pulling together to help weaker member states like Portugal and Greece and sometimes paying a political price with their own voters.

ANGELA MERKEL, CHANCELLOR OF GERMANY: I think it is very important and it seems to be the case that Italy regains its credibility. That the austerity package is being implemented and that the political leadership is clarified fast. That is, I believe, very important for the credibility of Italy.

Germany has had only one aim for months now, since we have had the euro debt crisis, to stabilize the Eurozone, as it is now.

RUBIN: Since this Euro family photo session, the faces are changing pretty fast. Italy's prime minister is almost out. The Greek prime minister gone. Portugal's prime minister resigned earlier this year and Spain's Zapatero won't stand again with austerity measures eroding support for his party. The Eurozone crisis is sweeping away the old faces, but by the time the ink dries, no one yet knows what the new European landscape will really look like, or for how long it might last.

Emily Rubin, CNN, London.


FOSTER: The author of those cartoons, Joe Scarf (ph), will be featured in the show later on to give us some of his ideas of the last week. Interesting stuff.

So, what will the changes of leadership mean for the Eurozone? Well, earlier today I spoke to Martin Wolf, he is the chief economics commentator for the "Financial Times". And I asked him what the rise of the technocrats says about European democracy?


MARTIN WOLF, CHIEF ECONOMICS COMMENTATOR, "FINANCIAL TIMES": It looks rather like the European economic empire, doesn't it? Essentially, the people that really run it, the people who have the purse, are putting in to the troublesome provinces, reliable, local dignitaries, who are reliable as far as they are concerned, not necessarily as far the people are concerned.

So it is an expression of the fact that is actually inherent in the whole model. That once you go into a currency union, and you get-you turn out to be rather weak within that union, you need support, you essentially loose sovereignty. And that is what is happening to them. These new prime ministers-alleged prime ministers, basically have to do what the people who put them there tell them to do. And they are not either Greek or Italians.

FOSTER: So at the moment it seems like a positive solution all around, but do you think once this news, and the reality sinks in, for Greeks and Italians, they are not going to like what has happened in their countries and their sovereignty and their democracy.

WOLF: Well, I think what is going to happen is pretty clear. In both cases the governments are going to have to do very tough and unpopular things, both in terms of fiscal policy and in terms of so-called structural reform. What do structural reforms mean? It means allowing people to fire workers, it means cutting people's wages, so these governments are going to do very, very unpopular things.

The effects in the short-run will be to make things worse. Then they are not going to suddenly generate lots of growth-far from it, in either case. And what it is surely going to happen in fairly short order, is there are going to be protests against these governments and they are going to say, you are not our government, you are Germany's government. You are the government that our paymasters have put in place. We don't recognize your legitimacy. And I just don't see how they can answer that. Admittedly, the parliament will support them for a while, but even that isn't completely clear.

So, I don't think this solves the problem at all. I think the problem is just kicked down the road a little while, until we start getting some real trouble.

FOSTER: And once those realities set in and that trouble starts, what is going to be the alternative perspective from Germany, for example, thinking right, this is the best option for the Eurozone. What is going to happen then? Is that when the Eurozone starts falling apart, or being recreated?

WOLF: I think this is the real danger. Let's suppose-if it works, that is fine. And I could go through scenarios in which it works. If it doesn't work-which seems to be extremely likely-they get lots of trouble. The economies don't recover. The bond markets have a bounce upwards and then start depressing again, falling again, as they realize how much trouble there is. You get all this protests in the streets. Then, it seems to me, very, very likely-though it is not certain-that the core countries, or the core country above all will say, that was the best shot we had.

These people are just not going to do what they are supposed to do. We are not going to allow the European Central Bank to print money to bail them out. And we are not going to change our own policies. So actually, one way or another we are going to have to dismantle this. But of course, it can't be dismantled with any-so, at this point it becomes a monstrous crisis. But this is just another throw in this long game. It certainly doesn't resolve it. And it could lead to an even bigger head on political and economic crisis a few months or a year down the road.

FOSTER: And as the political sort of crisis continues the markets perhaps will run out of patience at some point. And some analysts already suggesting that sings of a credit crunch are already showing in the markets. And actually a 2008-style credit crunch is just a couple of months away.

WOLF: Well, we have been seeing this now for some time in the funding of banks. In fact, if it weren't for the ECB, which has been very free and rightly so, I think as a lender of last resort, the European banking system would have been in quite considerable trouble. If this turns out to be a relief rally and no more, if confidence is not restored- indeed, gets worse, because people begin to realize, well, even this isn't going to work. Yes, there is a very good chance that liquidity will dry up for many, many financial institutions. This will affect the whole world and we will be in a very, very serious crisis again.

And as things stand at the moment, the ammunition needed to stop that sort of crisis does not really exist. There isn't-it's available, you could use the European Central Bank, but the politicians are very resistant to allowing it to throw all of its weight into the crisis. So we don't know what would then happen.


FOSTER: A very gloomy prospect today, isn't it? On the Eurozone and what the commentators are saying about it right now.

Anyway, we are going to bring you some light relief at this point. Because the votes have been counted and the new Seven Wonders of Nature have been announced. Now, remember, about 1 billion votes went into this. It is not an academic sort of judgment. It is a popular vote, but here are the provisional results based on the initial count of votes that the each received. And here they are in alphabetical order, as they say.

The Amazon, in South America, is there; a popular choice. Halong Bay, in Vietnam, another one. Now the Iguazu Falls in Argentina and Brazil make it into the final seven, as does Jeju Island, in South Korea; Komodo Island, in Indonesia, and the Puerto Princessa Underground River system in the Philippines.

And finally, what's it going to be? Table Mountain, in South Africa. The organization behind the contest says the final results will be out in early 2012, but that is the top seven as we know it. And there will be many people around the world, I'm sure, very frustrated that their favorite wasn't chosen. None of the American (UNINTELLIGIBLE) see the Grand Canyon, but not there. Interestingly, out of this, it emerged that a lot of votes came from smart phones in Asia. So that might indicate some of those entries.

Now, in just a moment we'll look at how the crisis in Europe could play into those lost decades in the United States. It is all about exposure. Maggie Lake will have more on that for us, next.


FOSTER: The crisis here in Europe could play into those lost decades in the United States. It is all a question of exposure as Maggie has been finding out, from New York.


MAGGIE LAKE, CNN BUSINESS CORRESPONDENT: Yes, you know, Max, we have been asking a lot of questions with all the concerns about the global banking system. When we watch what is unfolding in Greece and Italy. Very controversial, very hard to get people to talk about one set of figures when it comes to U.S. bank exposure to Europe. I sat down today with Michael Mayo. He has been a long-time outspoken critic of banks; putting sell ratings on them when very few people would. He has a new book out called, "Exile on Wall Street". And I asked him just how worried we should be.


MICHAEL MAYO, BANKING ANALYST: There is good news and bad news. The good news is the disclosed numbers seem very manageable. I mean it is not going to break the system. We have had some regulatory disclosures in the last few days and no unexpected surprises. But, you know, first we had M F Global, and that reflected the ongoing fragility of the system.

Second, don't forget about the secondary and tertiary exposure. So the bank will tell us their direct exposure, but what about when the banks have exposure to another company that has exposure in the European system.

And third, you have the whole situation, it is like a disaster recovery system that has never been tested with the credit default swaps. Which is insurance on your exposure, but you are finding out that insurance might not work exactly as planned. We don't know what we don't know. Again, there is no regulatory disclosure or anything. But just like M F Global snuck up and bit us. That is what I think about each morning when I wake up. What am I missing? What else should I be analyzing?

LAKE: Is there any bank, in particular, that we should worry about more than others when we are talking about our list of worry, when it comes to a potential for a default in Europe. And let's hope we avoid that, but is there a firm that is-bears watching more than others?

MAYO: My whole theme is risk off. Let me go for the highest quality banks, the ones that have the track record, the management, the systems in place. And so to answer the question, which are the most risky banks, they are the ones that haven't gotten the job done for the last three, five, 10 years. And so that would include Citigroup, Bank of America, and Morgan Stanley. Unfortunately, they are trying. But those are the ones that had some of the biggest problems in the last few years and therefore I think it is not appropriate to give them the benefit of the doubt at this time.


LAKE: Now, Max, the thing he said there that is so important. It is not the disclosed, exposure to an individual country, per se. But it is this idea of the secondary, the connectedness that we saw fall apart in '08, when there was that liquidity crunch, that you were just talking to with Martin Wolf. What happens then? There is where the sort of real concern comes in, counter party risk. Your insurance is only good if the other party you have it with is still standing. I think that is where investors are prone to get very spooked.

Michael Mayo, along with a lot of other people would like to see a lot more transparency on a lot of these issues. And we are going to come back again next week and talk a little bit more about what he thinks should be done with the industry, to try to move us there. So today, a good day, but underneath it, Max, a lot of worry still about the global banking system.

FOSTER: OK, Maggie, thank you very much indeed. We are going to keep on top of that. It is something that we should be watching.

Now, less than two weeks after declaring bankruptcy collapsed financial firm, M F Global announced today that it is laying off all of its remaining brokerage staff; more than 1,000 employees. M F Global which was headed by former Goldman Sachs Chairman Jon Corzine, declared bankruptcy after placing bad bets on Eurozone debt. Outside M F Global headquarters a short time ago, one laid off executive told reporters what he would tell Corzine.


PIERRE-YVAN DESPARIOS, FORMER M F GLOBAL EXECUTIVE: Corzine, you screwed up pretty well. You know, you put a lot of people, you know, into a very uncomfortable position. I have a mortgage to pay. I have two mortgages, actually, one is rented, but still, you know.

You put us out of work on a-the worst economical times, you know? That this country has envisioned so far, as experienced since the Depression. So, you know, I don't know what to say to Corzine. I don't know. I don't know if he sleeps at night.


FOSTER: Well, the search is on for more than $600 million worth of customers' money that went missing from the company's accounts.

Meanwhile, winning the sales war, we'll talk to the chief executive of the company behind the phenomenally successful "Call of Duty" games, next.


FOSTER: Welcome back.

I'm Max Foster.

The news headlines this hour.

The markets are ecstatic about apparent progress on the Eurozone debt crisis. Italy looks set to fast track its budget reforms. Earlier today, the Italian senate approved new austerity measures by a landslide. The vote goes to the lower house of parliament on Saturday. Prime Minister Silvio Berlusconi has promised to resign when the measure is passed.

In Greece, Lucas Papademos has inherited the prime minister's post and the country's massive debt crisis. He was sworn in today by the heads of the Greek Orthodox Church. Mr. Papademos and his cabinet must get tough budget cuts approved to secure the next round of European bailout money.

Thirty people have been pulled from the rubble since Wednesday's earthquake in Eastern Turkey. However, the official death toll has risen to 22. Many residents are choosing to stay in tents out of fear that their homes might collapse.

Mexico's highest ranking official after the president has been killed in a helicopter crash. Interior Minister Jose Francisco Blake Mora was one of nine people killed in the crash outside Mexico City. His ministry oversees the police force fighting drug cartels in Mexico.

Now, it is already one of the most successful computer games of all time. Now the latest Call of Duty game has broken another sales record. Modern Warfare 3 made $400 million on its first day of release, selling more than 75 copies a second. And that's just in North America and the U.K., would you believe?

It breaks the record set by the previous two Call of Duty games. And remember, this is not just a record for computer games, it's for all forms of entertainment.

Eric Hirshberg, the president and CEO of the game's developers, Activision, joins me now from Los Angeles.

I mean the figures are extraordinary enough, but you're only talking about two regions, as well, right?

ERIC HIRSHBERG, PRESIDENT AND CEO, ACTIVISION PUBLISHING: That's just for the U.S. and -- and the U.K., yes.

FOSTER: So what are you expecting global figures to be?

HIRSHBERG: Well, I -- I -- we can't predict them, but the fact that we've broken the record for the largest entertainment launch in history for the third consecutive year with just those two regions is pretty remarkable news.

FOSTER: But you must admit it -- you've actually sold the product, so you've made some predictions and you've had enough product to sell.

So how ambitious are you for -- for the rest of the launch?

HIRSHBERG: I -- you know, when you get into this kind of rarified era where you're just defying gravity, you know, and setting new precedents, it's -- I think it would be hubris to -- to make further predictions. But the performance that we've announced so far, we're really happy...

FOSTER: Were you...

HIRSHBERG: Obviously.

FOSTER: -- were you expecting $400 million?

HIRSHBERG: I -- like I said, I don't know if we knew what to expect. When, you know, we've broken entertainment launch records two years running, which was unprecedented. And now we've done it a third time, which is unprecedented again.

So there is no precedent, there is no playbook for -- for this level of success. And we're focusing on making the best games that we can and marketing them as -- as best we can. And the good news is we have this incredibly engaged fan base that keeps growing every year.

FOSTER: I want to ask you about the fan base, because who is it buying these products, because you've overtaken Star Wars and Lord of the Rings as franchises. It's more valuable now, your franchise, but it's not as widely known as the other two brands, I would argue.

So who is buying the product?

HIRSHBERG: Well, I think that one of the things that is sort of magical about Call of Duty is the fact that it's a game that -- that appeals to core gamers, which is, you know, our primary foundation and the people that we make the games for. But it's a franchise that's been able to bring new people in every year, and bring new people into gaming, people who might not think of themselves as being interested in a battle-based game or -- or video games at all are -- are, you know, trying Call of Duty. And I think that's been one of the -- the marketing feats we've been able to pull off with this brand and -- and also with the game itself.

FOSTER: There was concern, as you'll know, about the -- the -- the two co-creators left the company, didn't they.

But is this evidence that you've managed to overcome that?

HIRSHBERG: Well, there are many people who have -- have co-created this franchise over the years and -- and certain people referred to were -- were key among them.

But I think that the strength of the franchise, the strength of the studios that we have in our stable and the talent that's leading them speaks for itself.

We launched this game with a 90 plus rating and we've got the best developers in the world at Infinity Ward and Sledgehammer Games and Triarch managing this franchise for us. And they're doing a superb job.

FOSTER: I know that they're -- I know they're -- they're not particularly happy with the situation, though. And when you see these sort of products, they're going to be less happy, the co-creators, aren't they?

I know you -- I know you're caught up in some lawsuits with them.

Are you pretty confident that you're going to be able to win out on those?

HIRSHBERG: You know, I really don't want to comment on that. Everything you're referring to happened before I joined the company about a year ago, so I -- I really don't have any, you know, anything to add...


HIRSHBERG: -- to what's already been said about it.

FOSTER: Eric Hirshberg, thank you very much, indeed.

And congratulations on that immense launch.


FOSTER: It's pretty phenomenal.

Thank you very much.

Well, next, a more light-hearted look at the key players of the Eurozone crisis. Cartoonist Gerald Scarfe is back in just a moment.


FOSTER: Earlier, we saw the political cartoonist, Gerald Scarfe, with the violet -- with the violent turns of Europeans' -- or or Europe's debt crisis.

This week has seen some of his favorite characters in the spotlight. He must have been having some fun.

Let's take a look at how he brings them to life in two dimensions.


GERALD SCARFE, CARTOONIST: There's no point in doing a caricature of someone unless the public know who it is, you know? of course, there's my old sort of beta noire here, Tony Blair. This one is the -- during the Iraq inquiry, I think, and the finger is saying "J'accuse" and he's cringing away there from the darkness that's enveloped him ever since.

High finance is a very, very boring subject, to me, anyway, certainly. I mean, of course, I like money, but I don't understand high finance. And it -- it's tedious.

But it's really the co -- the characters, like Sarkozy, Merkel and -- and Berlusconi here, who make it colorful.

This is Sarkozy up here as a waiter. But this one here is of -- of Sarkozy as the French cockerel, you know, the symbol of France. So he's -- he's good fun. He's good material.

I'll be sorry to lose Berlusconi. You know, he's a wonderful face to draw. I mean, the worse they are, the better -- the better subjects they are all -- or simply I find that.

Berlusconi has been there a long time. I can't quite remember who was there before him. He's been there for three terms, hasn't he?

Unbelievably, you know, with his background and his so-called shady dealings and, you know, I know the -- you know, the culture down there is well, I know, yes, this sort of thing goes on, but, you know, let's not worry too much about it.

A cartoonists always deal with the sort of dour side, the dull side of life, you know. I mean the -- the way -- the down side. They don't deal in good news in general.

So wherever there's bad news, there you'll find cartoonists.


FOSTER: He's a bit of a genius, isn't he?

He's been around for years.

Now, extreme heat and pres -- a persist droughts are to blame as hundreds of brush fires spread across South Africa.

And Pedram has been looking at that for us.

What's the latest on that -- Pedram?

PEDRAM JAVAHERI, CNN METEOROLOGIST: Yes, Max, you know, we've spent much of the summer across the Northern Hemisphere talking about the droughts and the concerns across the Horn of Africa around Somalia, of course, with the famine concerns they've had. But all the way to the south there, extreme heat beginning to shape up.

And you take a look at your calendar in the Southern Hemisphere, we are in the spring season, summer not too far away.

But this NASA MODIS imagery shows you some of those thermal hot spots or signatures of fire in the past 24 hours.

We've detected over 200 of them, active flames actually the northeastern corner of South Africa now, right around portions of Limpopo Province and Limpopo Valley in this area, getting a very dangerous situation. I've heard reports, over 1,000 sheep killed, a lot of farmland, a lot of homes destroyed because of the fires left in place. And now we have an excessive heat that is in effect here.

And would you believe some of these temperatures?

You're in 50 degrees this early into the season for them, 49 degree high temperature. And, again, concerns that another hot summer on tap here for folks across South Africa. And you can take a look. The southern tip of the continent there, around Cape Town, some cool temperatures on tap the next few days. But overall, it's around this area that we have the fire concerns, we're still looking some extreme heat to take place because that's been a -- the weather pattern that's dominated this region in recent months.

But to the north, I want to show you a storm system out over Western Europe. Take a look. That's the cold front beginning to push in. And a very, very good looking storm system that's kind of going to park offshore here for a few days. But the radar imagery coming out of Western Europe, around the western end of the U.K., Liverpool, Manchester, Belfast, Glasgow, very heavy rainfall here and those showers going to taper off here in the next few hours, as we approach the east, toward London. But still, don't be surprised a few rattles of thunderstorm activity in your forecast there over the next couple of days as soon as this weather feature begins to move in. And, again, the showers mainly a Saturday concern and also going to be very breezy here.

But Sunday looks to improve the weather, since high pressure stays put across the central regions of Europe.

Now, take a look at this, a few weather oddities. The observations coming in for current readings, of course, you may have heard today, it's 11/11/11. The current temperature in London, it's 11. Glasgow, it's 11. It's been the same temperature for the past three hours across portions of Western Europe there. And you can take a look.

The coldest air where the skies are clear right now in Central Europe. And that's going to change here in the next couple of days as we have some milder afternoons on tap as the temperatures begin to warm up.

Sixteen in Paris for you on Saturday. London warms up, so a few degrees above average there, 15 degrees on Saturday. But, again, Sunday into Monday look to the better end of the forecast here, Max, as we're going to see improving conditions.

But a few weather oddities I thought I'd share with you there on this Friday -- Max.

FOSTER: OK, Pedram.

Thank you very much, indeed, for that.



I'm Max Foster in London.

Thank you for watching.

We're going to show you the Dow first, though, because we should. It's up more than 2 percent. That's -- and crucially, above the 12000 mark. So after all the ups and downs this week, it's actually ending the week up. So a positive end to the week.

But as we were looking at earlier, thanks a lot negativity and concern about the longer-term future of Europe and what that will mean throughout the U.S., as well. So the markets won't necessarily be up the whole time.

And let's have a look at the European markets. They're all up as well, largely due to political progress in Italy. But tomorrow is another week and we'll be following that for you.

That is QUEST MEANS BUSINESS, for my second time.

I'm Max Foster in London.

Thank you for watching.




I'm Robyn Curnow.

We're in the Sabi Sand Game Reserve in the Kruger Park, lucky enough to see some rhinos over there.

Now, this week, we're going to focus on the economic impact of the illegal trade in rhino horns. These animals are being poached across Southern Africa and their very existence is being threatened.


CURNOW (voice-over): You can still see white and black rhinos in the wild. But two species have recently been declared extinct, poached for their horns, which are believed in Asia to have medicinal qualities, fueling a market that environmentalists warn will soon kill off one of the big five African animals.

(on camera): So what are the long-term costs of rhino poaching here in South Africa?

Well, I think a good person to ask is Mike Miller.

He's a ranger at the Londolozi Private Game Reserve.

And we really want to know what the impact is here on the ground.

MIKE MILLER, LONDOLOZI GAME RANGER: Well, I think the first impact is from a safety point of view. I think the world's economy has reduced the number of global travelers. And travelers don't want to -- to visit areas that are potentially unsafe. And, obviously, areas that are being poached have been publicized and -- and people try to avoid or shy away from those areas.

Secondly, people spend a lot of time, money and effort getting to Africa to see the elusive big five. And without the rhino, the big no longer exists. And I think that will have a ripple on effect in that people won't come here and will -- and will look to go elsewhere.

CURNOW: You're on the front lines.

Do you feel like this war is being won?

I mean it -- it doesn't feel like that from...

MILLER: No. It...

CURNOW: -- from where I'm standing.

MILLER: No, I think the -- the numbers show that, you know, the manner and the speed at which rhinos are being poached, you know, we're not going to be talking about this in four or five years' time, because they won't be here.

So it's a war that we need to win now. And -- and no, I think at -- at this stage, Africa is losing the war. But we need to globally win this war.

CURNOW (voice-over): Just about every day, a new rhino corpse is discovered -- horns shaved off, bodies discarded as trash in the bush.

But why the increase in poaching in the past few years?

ANDREW PARKER, CEO, SABI SAND GAME RESERVE: It's a scourge nationally.

CURNOW: Andrew Parker is the CEO of the Sabi Sand Private Game Reserve. He believes the illegal trade might have spiked when it became tougher to hunt rhino legally.

PARKER: With the -- the hunting scenario becoming too regulated, it forced, you know, the -- the -- the suppliers to -- to get their -- their horn through -- through other mechanisms. That's the one argument. And the other argument is that, obviously, Southeast Asia has become a more affluent region and that, you know, there's more buying power in the region. And another interesting hypothesis, which is not well known or -- or possibly not well supported, is that it's being used as alternative to the lack of foreign investment, because if you look at -- at -- at a composite of the Southeast Asian stock market tradings, you know, there's a steep drop-off in 2007-2008, which is -- it coincided exactly with the time that, you know, poaching has collected.

So, you know, it -- people may view it as a hedge against, you know, currency volatility, you know, stock market volatility, something like that.

So there's any number of arguments as to why it suddenly spiked. But certainly there's a demand, whether it's being driven by one or two syndicates that are stockpiling, or whether it's just because there are more African people, you know, we're not 100 percent certain.

So those are the things that -- that need to be tested and -- and -- and really elucidated.

CURNOW: Across the country, there's a growing sense of helplessness.

DR. BRETT GARDNER, JOHANNESBURG ZOO: Get rid of the trade in Asia. It's the only way. We're wasting time and funds and things trying to do it here. You know, we're -- we're possibly slowing down the -- the actual extinction of the rhino, but they're not going to stop it.

CURNOW: Even the Johannesburg Zoo is home to a poached rhino called Pila, who was shot and dehorned twice.

Brett Gardner is the vet looking after her.

GARDNER: And in total, she received between eight to nine shots, surviving all of it. And then eventually, after the final poaching, coming here for her last bit of care and recovery.

In South Africa, where we've got good protection of our rhinos, we've got good reporting of when they're getting shot. We're losing approximately one every 21 hours.

CURNOW (on camera): I mean that's a staggering number and -- and that gives you some sense, I suppose, of just how much of a trophy those are.

GARDNER: Yes. And the prices vary and I don't really like to quote them, because they're all normally sort of bogusly inflated. But if you consider that they were willing to shoot her a second time, after she'd been de-horned, for the stump, it just shows you...

CURNOW (on camera): So for that much worth of -- of rhino horn, probably, they shaved off the second time?

GARDNER: Exactly. And that was at a secure balmar (ph) where she was guarded.

CURNOW (voice-over): Exact prices are hard to gauge. Some say a kilogram of rhino horn is more valuable than gold, commanding tens of thousands of dollars on the black market. Others say it's not nearly that valuable. Either way, on of Africa's most iconic animals has become a highly sought after commodity.

(on camera): Let's take a look at some more numbers.

Now, the World Wildlife Fund estimates that more than 340 rhinos have been poached in South Africa this year. That already surpasses last year's record of 333.

Now, this increase in poaching is really pushing the black rhino toward extinction. It's estimated there are only 4,200 of those animals left in the wild.

Up next, the economics of eco-tourism -- the business model behind one of Africa's most famous luxury lodges.


CURNOW: We're on a game drive here in the Londolozi private game reserve in the Kruger Park, a place that Nelson Mandela called a model for what he saw as the future of conservation in Africa.

Now, the lodges here offer luxurious accommodation amidst this wildlife haven. And that, of course, draws a lot of people interested in eco-tourism.

Well, our guest on FaceTime this week is Dave Varty.

He owns Londolozi.

And we chatted about how he balances profit and conservation.


CURNOW: So how's business?

DAVE VARTY, OWNER, LONDOLOZI GAME RESERVE: Business is tough, but we're a standalone operation, Londolozi, family run, and because we've been around a long time, we haven't felt the downturn. But our market, generally, the number of beds in this area has increased and the number of heads or the number of arrivals has decreased. We're all battling. But I'm happy to say, Londolozi is holding its own in this market.

CURNOW: So how do you differentiate yourself?

You're not the only one out there, are you?

VARTY: To maintain focus on the guest experience, single operation, family run. We don't subscribe to big chains of lodges. But mostly people, people, animals and mission make us different, in our view, to other lodges.

CURNOW: So how do you balance profit and conservation?

VARTY: I think they complement and support each other, particularly in a world now far more enlightened to the issues and the pressures of environment. Londolozi means the protector of all living things, so in our DNA is conservation. And over the years, we moved from a for-profit in the '70s, which was like, you know, we were wildlife mercenaries in those days. We then exported the model under the umbrella of the former president, Mandela, gave us, you know, carte blanche and support to go into other African countries with the same for-profit model, which involves local communities and draws in people in terms of their career and in terms of the functionality of family life in a rural area.

Then we returned from the corporate world to the family business again and we've had a big focus on people, people training, people up-skilling and the appropriateness of education.

So that's the people model. And now we're moving into social enterprise.

CURNOW: And what is that?

Explain that to our -- our viewers.

VARTY: (INAUDIBLE). A social enterprise says that the reason for our being is to contribute to society and to the immediate social area and social issues around us. That's our reason for being.

Because that is our reason for being, people who work with Londolozi are fully engaged. They have similar values and similar desires and similar wishes to contribute.

The guests, the visitors, find that same thing and become involved. So now they've become connected to our organization way beyond big five safaris. They now feel part of a greater movement.

And the result of all of that is that we are more profitable.

So a social enterprise which we think follows on from the capitalist model is one that will be more profitable, will be more sustainable and more appropriate in society and will have happier, more engaged work forces. That's the definition of a social enterprise.


CURNOW: Dave Varty there of the Londolozi Private Game Reserve.

Now, let's take a look at what's trending in Africa's business news this week.



Africa's Mobile Market

Africa is the world's fastest-growing mobile phone market in the world, according to a report from the Groupe Speciale Mobil Association.

The survey said the number of mobile phone users in Africa has grown by nearly 20 percent every year for the past five years.

Geothermal Deal.

Kenya has awarded two firms from Japan and South Korea a contract to build a new geothermal plant, in a deal worth about $400 million.

Currently, nearly half of Kenya's power supply is from water, but recent droughts have prompted the country to find alternative power sources.

CURNOW: Well, that's it for this week's show.

I'm going to leave you to watch these magnificent animals.