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QUEST MEANS BUSINESS

Interview with Colombian President; Germany Hit by Bond Failure; Interview with Swedish Finance Minister

Aired November 23, 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, HOST, QUEST MEANS BUSINESS: It's a bond failure that leaves Germany shaken and stirred. Tonight Colombia's president tells me, Europe, swallow the same medicine you dished out years ago. And when guests become pests, hotels are told, upgrade me or get a bad review online. We have an hour together. I'm Richard Quest and I mean business.

Good evening tonight. Europe's debt crisis is beating on Germany's door, as the sale of 10-year German notes has gone horribly wrong. It's been described as a disaster and a calamity and investors not buying the safest bonds on the block.

If you join me in the library, I'll show you exactly why this is so serious and what's been happening. We start with the 10-year note, actually, 10-year note. Six billion of them were intended to be sold by the Bundesbank. In reality, only 3.6 were sold, raising less than $5 billion.

In total, of course, the rest will be left with the Bundesbank or those banks that were guaranteeing the underwriting, and so they had to eat what was left. But the mere fact that the Bundesbank couldn't sell all the bonds that it intended, the safest of them all got a 1.98 yield, just under 2 percent, shows the picture.

And if you'll join me over here, 10-year bond yields, this shows the picture. Germany is now over 2 percent. You see the sort of contagion that's now got France at 3.7, Spain at 6.7 and Italy once again flirting, yields all rising.

And even Fitch is warning now that France may lose its triple-A because of the pressure on the fiscal position where there is little room for further adjustment. Not surprisingly, this sort of story, bond yields rising, the swap markets are falling, the London FTSE up 1.25, Xetra DAX down sharply, the Paris CAC are down also. Wherever you look at the moment, the markets are in some disarray.

Germany's failed bond sale could be seen as a case of an investors' strike, a protest against policymakers' failure to resolve the crisis, as some finance ministers are facing criticism.

In Sweden, Minister Anders Borg is being praised for cutting through the fog. The "Financial Times" has ranked him top of his game, praising him for perfect domestic policies and a pillar of virtue. Minister Borg joins me now from Stockholm.

First of all, congratulations. I mean, the laudatory comments, you must be very pleased at what's been said about you. But the situation today with German bonds, what went wrong?

SWEDISH FINANCE MINISTER ANDERS BORG: Well, obviously, we're very proud of the fact that the Swedish economy is still on a very stable footing. And, I mean, we are trading some 30 basis points below Germany. So, so far, we have not been hit by this. But I basically don't think that this is a story about Germany.

It might be some uncertainty stemming from the commission arguing that we're now heading for Eurobonds, because that obviously makes it more uncertain what would actually able (ph) this. But to my mind, this uncertainty stems from Italy and Spain, and we need to see the new -- two new governments clarify their pathway forward.

I mean, the markets are very undramatic (ph). There will be no honeymoon for this --these governments. They will start to dig in -- will have to start to dig in and do the heavy work directly.

QUEST: I wonder, on that theme, how long there is before this -- I mean, you had the August stock market crisis. We've had the October- November referendum debacle and the two governments are falling in, and now a changing government. How long, Minister, do you believe -- put some time scale on it -- before time is up?

BORG: Well, I do think that the market turmoil is quite likely to go on for some time. In my mind, this could be for the next three to five months. And that, I think the issue is basically boiling down to the fact that fiscal plans need to have support in the parliaments in these countries, and they have to be long-term.

And at the same time, we need the firewall to be in place. But, I mean, the firewall will not be credible unless Italy and Spain and some of the other countries are starting to deliver in a credible manner.

QUEST: Can the European procedures, as they currently are, with all the messiness -- and I know that, obviously, Sweden's outside the Eurozone, but can the Eurozone do this? Surely critics and skeptics are entitled to say now that they can't, that it's out of control.

BORG: Well, I think we actually have to see all the options on the table. I mean, there has been discussions on whether the ECB can do further measures to boost, to stabilize the market and to support growth. And that's obviously one discussion.

I mean, we've seen -- we need to see further commitments of the indebted countries. And we are probably needing to see some much clearer structure for the FSF (ph) if this is going to trend (ph) any where in the near future. So to my mind, we have some weeks ahead of us, and probably months ahead of us, until this is stabilizing.

QUEST: That's a very pessimistic, albeit accurate, perhaps, and truthful analysis of the situation. But it can't tonight surely be very optimistic to people watching.

BORG: Well, I think this is a problematic period. And the fact that the commission is proposing, for example, Eurobonds is not helping. I mean, that will make the unclear (ph) less certain. And if the -- if the middle doesn't hold, we are pretty -- we can be pretty clear that the flanks will not. So we need to see the fact that Germany is the anchor of this process, and they have to remain in that manner.

QUEST: OK. Finally, on this Eurobond question, if the idea, of course, we'll be talking more about in a second, but the Eurobond idea, it's not helpful when you have Barroso and the commission and all these other people putting forward plans that have got no hope of getting started, because Germany won't allow it, the ECB doesn't particularly want it.

So one's left, once again, Minister, with this feeling of disarray, left hand and right hand.

BORG: Well, I mean, it's quite clear what -- why there is a lot of skepticism in Germany. The fact is that this will mean increasing mortgage costs for all the house owners in the northern European countries that has kept their house in order. So, obviously, this would undermine any political support for other type of measures that are necessary.

So I think it's more logical to look to ECD, monetary policy and liquidity and other measures for stabilizing the situation. And, obviously, to my mind, the responsibility lie in Rome and Madrid, not in Berlin.

QUEST: Finally, Mr. Borg, will you take some jokes and joshing and will your fellow finance ministers, when you finally meet up with them at your next council meeting, at the next Ecofin, you're going to have to take a bit of ribbing and a bit of jokes, aren't you, at your new elevated status, as the -- as the leader of the pack?

BORG: Well, I mean, we do have a very collegial tone between us. So, yes, there will be some -- there will be some remarks and some jokes about this, though I have no doubt about that. But I probably should have done the same as Christine Lagarde, to get in the first vote (ph) and then leave. But that's not the case for -- on -- for my side.

QUEST: Minister, as always, lovely to have you on the program, thank you for making time for us tonight. Andrus Borg joining me tonight from Stockholm, we were talking there just about the Eurobond issue. Now the commission has unveiled proposals for a common Eurozone bond.

It's an idea that could draw the finances of different European nations closer together. It would require a treaty change and certain governments are very much (inaudible), particularly Germany. As Jim Boulden explains, even if the idea takes off, don't get excited. A Eurobond isn't appearing in your portfolio any time soon.

(BEGIN VIDEO CLIP)

JIM BOULDEN, CNN REPORTER: Despite meeting after meeting after meeting, despite the removal of five prime ministers in troubled economies, despite vows to protect the euro at all costs, the European Commission has not yet decided exactly what kind of common euro area bond could be or should be created.

Wednesday's proposals are, for now, blue sky thinking.

JOSE MANUEL BARROSO, EUROPEAN COMMISSION PRESIDENT: We are trying to have a rational, reasonable, serious, intellectually and political serious debate. We believe that this document does precisely that, and we encourage all parties now to tell their opinion.

BOULDEN: So how would a bond, a Eurobond, work? The commission has three ideas. One includes scrapping all individual country bonds and having only one common Eurozone bond. There are also controversial proposals on whether all of Europe's debt should be pulled, meaning Germans would be, in part, responsible for the debt of, say, the Greeks or the Irish.

The commission is no longer calling it a Eurobond by the way. It wants it to be known as a stability bond. Barroso denied a change of name was, in some way, to change perceptions in Germany. Barroso also denied that Germany is dead set against the common bond. It's more about first making sure countries showed they were seriously cutting their deficits.

BARROSO: It means there is no position regarding our principle.

BOULDEN: Does all this mean that Europe is closer to getting a Eurobond? Well, not really. These proposals will be debated until January. Then the commission will decide what to do next. A quick fix it ain't, but maybe it will help to restore confidence -- Jim Boulden, CNN, London.

(END VIDEO CLIP)

QUEST: Tomorrow may be Thanksgiving in the United States -- that's for Thursday. Not a huge amount to be thankful for. The Dow is off nearly 2 percent, flirting with 11,300, off 201 points. The Dow has been down pretty much consistently since trading began. When we come back, "it's time to go, son," (ph) is the message. James Murdoch distanced himself from his father's U.K. newspapers, in a moment.

(COMMERCIAL BREAK)

QUEST: South Africa's ruling party, the ANC, is threatening action against lawmakers who broke ranks over a new information law. In all, 30 ANC lawmakers disobeyed the three-line whip, and they voted against the so- called secrecy bill.

The ANC, which won the vote anyway, is accusing its rebel MPs of ill discipline. But the question must be ill discipline from what? Joining me from Boston, Andrew Meldrum, the regional editor for "Africa," at the "GlobalPost."

So 30 ANC MPs vote against this bill, which is widely condemned, but is being rammed through anyway. What does it tell us about the state of democracy and freedom of information in South Africa now?

ANDREW MELDRUM, GLOBALPOST'S DEPUTY MANAGING EDITOR: Well, Richard, many are mourning the death of democracy because they say this bill is really the end of democracy.

And I think what we're seeing, what you have pointed out, is the ANC is not only content with getting the bill passed through parliament, but now they're being vindictive, and they're going to back to any of their members who voted against it and really threatening them about it. So it's a double whammy. It's even worse that it seemed yesterday when the bill passed.

QUEST: OK. But all countries have, to some extent, secrecy laws, whether it's the U.K. with its "The Official Secrets Act," even the U.S., in some cases, has had Supreme Court decisions that have allowed, in many cases or in certain refined circumstances, isn't this a case not about the law, but how it might be executed?

MELDRUM: Well, absolutely. And what -- but the law itself does not give adequate provisions for, let's say, journalists who are on trial to argue that they were doing it in the public interest.

In many of the other countries where -- that you mentioned, like the United States or in Europe, there is always a provision that says if you can prove that it was in the public's interest that this gets out, then it mitigates your being found guilty.

And in South Africa, they don't have that, so that they feel that that is a danger. The other danger is that it -- this is not just top secret at the level of the president or the -- or the cabinet. It goes on down to actually local administrators. And so they say there's a -- you know, it's a real danger to have it go down that far.

QUEST: So the law is passed, and there may be other procedural things that have to take place and, no doubt, it'll end up somewhere in the constitutional court.

So what I'm wondering, what do you think is fundamentally behind this law? Yet, last night -- I'll tell you why I ask. Last night on this program, you know, Justice Malala was talking about corruption and the wish to hide corruption, the wish to hide (inaudible). But that's very much a sledgehammer, isn't it?

MELDRUM: The wish to hide corruption -- I think another aspect is, is that the ANC does not value South Africa's lively press. They actually see the press as white-owned, although it is not. They see it as a nuisance to their aims.

And they don't value the fact that the press uncovers corruption. There have been many corruption scandals that have been uncovered by the press, but the ANC doesn't like that. They actually see that as trouble, and they don't want to be held accountable and so I think this is an important step against -- into really trying to stifle South Africa's lively press.

QUEST: Andrew Meldrum, joining me from Boston. With that, we will say many thanks, Mr. Meldrum. We will say with the question of the press, on a slightly wider issue, James Murdoch of News International has stepped down from the board of directors from two companies which publish in Britain.

He's left his seat on the board of the Times Newspapers, which obviously, as it must sounds (ph) is the "Times" and the "Sunday Times," and News Group Newspapers, which is the "Sun" and the old "News of the World," which was closed over the phone hacking scandal. They're both part of the News Corp. empire.

The junior James Murdoch remains chairman of News International, the main subsidiary of News Corp. All very complicated stuff, which shows the difficulty, perhaps.

And what we do know is when it comes to the parent company, News Corp., it's unlikely to be affected by these resignations as it makes little profit from its newspaper divisions. The more important areas now are those such as television and other aspects.

Joined by Atika Shubert now, because not only today have we had James Murdoch leaving his job, but we had a lot of evidence at the so-called Leveson inquiry. This is the media inquiry that's focusing on phone hacking.

ATIKA SHUBERT, CNN REPORTER: Right, sparked, of course, by the scandal that started with "News of the World." But the inquiry is much wider and it's really looking to press culture and ethics.

And today we had the McCanns, and the McCanns talked about how their relationship with the press initially was good looking for Madeleine McCann, but then turned sour. And they particularly brought up "News of the World," saying that they were berated by the editor, Colin Myler.

And then after being berated for not giving "News of the World" an interview, they then published her personal diary, Kate McCann's diary. And she said she felt totally violated.

QUEST: OK. So what's the scenario now? Because we've had several days of Leveson. We now have James Murdoch leaving, or we know he left in September. Do we know why they didn't publicize Murdoch's departure, when there was so much fuss about it? (Inaudible) you know, waving a piece of paper, saying he's gone, he's gone.

SHUBERT: Well, you know, the timing of it is interesting. Remember, it happened in September.

QUEST: Right.

SHUBERT: He was (inaudible). In July, he had testified with his father, Rupert Murdoch, at Parliament. And this is when pressure for him to resign was at its highest. But at the same time, they were trying to show that James Murdoch was still very much in charge of things. He was still very much in control. So perhaps they wanted to keep that image, but keep it quiet.

QUEST: Finally, I just want to go back to this Leveson inquiry. And you've been there. What's the atmosphere like?

SHUBERT: You know, it's very interesting. I mean, it's very tense. Everybody's waiting to see what the next word is going to be. But it's also a very cathartic experience for many of the people coming forward, particularly for families like the McCanns and for the Dowlers, but you have in this mix celebrities who finally are able to sort of vent their anger at the tabloid press that they've been building up for years.

So it is this sort of national catharsis on the state of the British tabloid press. But where does it all go? This is what everyone's asking. It's going to take at least a year, maybe more, and then maybe we get recommendations for some regulations. But that still doesn't guarantee anything concrete.

QUEST: Talking shop, many thanks indeed, Atika Shubert. Many thanks.

Take your own medicine. That's the message from Colombia's president to the United States and Europe. Juan Manuel Santos, on this program, after the break.

(COMMERCIAL BREAK)

RICHARD QUEST, HOST, QUEST MEANS BUSINESS: The message is "Please do what you told us to do 10 years ago. Do what you say." That's the message from Colombia's president to the U.S. and Europe. Juan Manuel Santos says these countries and continents need to put their financial house in order. Otherwise, he sees an economic hurricane sweeping the industrialized world.

Colombia is very much in a position to wag the finger, expected to grow 5.5 percent this year, even though the South American country didn't make the BRIC or BRIC's club of emerging economies.

It's now in the so-called CIVETS group, which, of course, as you'll be well familiar, is Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa. And, interestingly, Turkey -- South Africa is now in both CIVETS and BRICs. But we're sticking with CIVETS, particularly with Colombia.

I sat down with the president and started by asking him what advice he would give the U.S. and Europe.

(BEGIN VIDEO CLIP)

COLOMBIAN PRESIDENT JUAN MANUEL SANTOS: We're saying what they said to us 10 years ago: put your house in order, because your disorder is affecting us. Take the decisions that are necessary. Have the political will and the political capacity to take unpopular decisions but necessary decisions, because you're going to affect the whole world if you continue with this uncertainty.

QUEST: What is your fear? Is it that you won't have export markets? Is it the Brazilian fear of a currency appreciation? What is Colombia's fear if the U.S., particularly, and the E.U. doesn't get its act together?

SANTOS: All of the above. First, they don't get their act together and they try to get out of the recession through monetary policy and creating money, that money will not stay, because that money will go after a better return that we are having.

And so they will appreciate our currencies and create unemployment and hurt our competitiveness. Also, they don't grow, we still export the majority of our products to Europe, to the United States, to Japan, to the industrialized countries, and the export might go down.

I'm not so sure what is going to happen with the commodities, the price of commodities, because that's going to a different phenomenon.

QUEST: The other countries, the U.S. and the E.U., they're not listening, are they? I mean, you can be as diplomatic as you like, Mr. President. But the reality is, before the G-20, we had a G-20 FinMin meeting, where they were given a warning. We had the G-20 in Cannes. We've just had the failure of the super committee. You've got the failure of the E.U. process.

SANTOS: You're right. They're not -- they're not hearing or they're hearing, they're not capable of delivering. I think it's more the latter. They're hearing. And they know that they need to take tough decisions. But this is a crisis that has a big political element there.

QUEST: As I look at your economic situation at the moment, in the short and medium and maybe even in the long term, the cards are in your favor. You've got robust growth. But you have only got growth -- and I say only -- of 5.5 percent. Is that sufficient for an emerging economy like yours?

SANTOS: Yes, we -- in our national plan -- development plan, we set of a goal of about 5 percent year-after-year, and we made all our accounts using a 5 percent growth. With that, we can finance the infrastructure we need. We can finance the social investment that we need.

Of course, we would hope for higher growth, and we are aiming at a bit -- a bit higher. But the minimum is 5 percent to be able to attain our objectives.

QUEST: Obviously, security is a key emphasis of any leader. But your emphasis is primarily on building a Colombia that is economically sound and stable.

SANTOS: I say that my plan, my national plan has three words: more employment, far more employment, less poverty and more security. And we're going in the right direction. For example, Colombia has created, in the last 13 months, 1,085,000 jobs. No other country in the region has done this.

And we're creating jobs at a high rate. This is extremely important for us. We're taking out of extreme poverty 350,000 families, which we have already identified. We have them in a computer, their needs. And we're, item by item, doing this. We need to have growth, but with social - - with a social emphasis, because Colombia and all Latin America (ph) were very unequal countries.

QUEST: So, finally, Mr. President, as you look at your agenda with those three pillars, what could send it all wrong? What's your biggest worry?

SANTOS: I would say the -- an international crisis, another recession, could lower (ph) our growth and put us in trouble, you know, obtain very ambitious objectives. But on -- in general, we're quite well protected. Our reserves are very high. Our financial system is very sound. We have low inflation. Our internal demand is strong. We are covered, to a point.

(END VIDEO CLIP)

QUEST: The president of Colombia talking to me yesterday.

Now, in a moment, we're getting back to the creeping threat of Europe's debt crisis. The German bond auction was a disaster. That's not my judgment. That's the judgment of others who watch these things. Top economist Vicky Pryce tells us what went wrong after break.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest, more QUEST MEANS BUSINESS in a moment. This is CNN, and here the news always comes first. And Yemen's president has signed a deal in Saudi Arabia that ends 33 years of rule. Ali Abdullah Saleh agreed today to transfer all powers of his vice president. It grants amnesty to Saleh, that the deal does, some many protesters in Yemen are opposing.

The U.N. Secretary-General Ban-Ki Moon says Saleh will next go to the U.S. for medical treatment.

To Cairo, where protesters are rallying in Tahrir Square, on what's become the fifth day of clashes, earlier the military moved in and seemed to calm everyone down. A few hours later, the rock throwing and tear gas resumed.

Egypt's grand mufti and the country's highest religious official has called on police to put down their weapons.

Bahrain's king is promising better protect human rights after an inquiry found excessive force and torture were used against protesters earlier this year. Human rights advocates are urging the kingdom to act quickly on the recommendations of the inquiry. The protesters, were rejoicing (ph) in Bahrain today, as the reports came out.

Tough times at Nokia Siemens. It's a joint venture network equipment maker which says it will cut 17,000 jobs. Yes, you did hear me say that number correctly, 17,000, 23 percent of its workforce. It will save $1.3 billion. The company says it will also refocus on mobile and broadband equipment as it struggles to find a way back to profitability.

(COMMERCIAL BREAK)

QUEST: The flames are licking, the winds are blowing, it doesn't really matter which analogy that you want me to use tonight. All the signs are telling us that Europe's debt crisis is worsening and, if not out of control, it's certainly heading in that direction.

Today, the safest country of the lot, Germany, the safest bet on the bond block, failed, failed to auction off 6 billion euros of 10-year notes. It sold just half, just over 3.6 billion euros. And bond yields in Germany and across Europe crept higher. And the effects were felt on the markets around the world.

The market that is open at the moment is in New York, and the Dow Jones is off more than 200 points. I agree, I know it's Thanksgiving tomorrow, and we are seeing quiet markets or at least quiet in terms of volumes, with thin trading, which you would expect on a big holiday week like this. But, certainly, off 200 points is an indication of the worries.

Vicky Pryce is the senior managing director of FTI Consulting. She's a former chief economic adviser to the U.K. Department of Business. She told me what she thinks is behind the failure of Germany's bond sale.

(BEGIN VIDEO CLIP)

VICKY PRYCE, FTI CONSULTING: I think it reflects general nervousness. We've seen what's happened elsewhere. I think everyone's deserting Europe in a big way. And the strange thing, though, is that Germany, which, until now, has been looked at as being the most, you know, safest of them all, in the Eurozone, seems to be having difficulty raising money, too.

And I can only imagine it is, because (inaudible) are thinking ahead possibly. If we are going to see a resolution to the crisis, it is going to be Germany, whether we like it or not. We're just going to have to bear the brunt of the whole cost of some sorting out (ph) Europe.

QUEST: But when you think that Germany is the gold standard -- the Bund is the backbone -- the failure to get what was a very small amount of money into the market, phrases like "disastrous and calamitous" maybe become justified.

PRYCE: Well, I think there may be. And I think Germany, of course, has been the main problem why Europe hasn't quite solved its situation right now, because (inaudible) sort of pretty difficult about it.

And I think there is a concern that, A, (inaudible) see us in a breakaway group with German sort of currency, whatever it ends up being, actually being suddenly rather strong and therefore very uncompetitive, or B, are we going to find Germany actually being the one that steps in all the time to help the rest of Europe, which means that its own debt situation is going to get worse?

I mean, you've got the banks, which have lent very substantially in the periphery (ph) countries, also bearing (ph) right now a disproportionate share of the debt problems.

QUEST: So it's fair to say, isn't it, that unlike the Greek situation, where there's a real worry you're not going to get your money back, or the Italy situation, where (inaudible) what happens next, nobody is afraid that they're not going to get their money from Germany. This is the canary in the mine.

PRYCE: Well, it is. I think what people probably would want is to be recompensed for some of the risk that they're taking...

(CROSSTALK)

QUEST: ... more than 1.9 percent, basically.

PRYCE: Yes, they want better returns for actually going into Germany, because now they're associating -- or they're beginning to associate Germany with Europe.

QUEST: So why didn't the Bundesbank push yields up to get the full bond away (ph)? Because they could have done that.

PRYCE: Of course, they could have done. Can you imagine what it would mean politically, that actually, you know, would show that the way things are going, have some of the concerns about how Germany will end up, in fact, being very, very important in what happens to the rest of Europe. It would be justified.

QUEST: And there we have the conundrum, because from the Bundesbank's point of view, you either raise the rates to get the bond auction away, or you accept the phrase "disastrous," that you're left eating half of it.

PRYCE: I'm afraid so, and this is where we got to. And I think the sooner this situation is resolved, and there is some agreement as to the way forward that pacifies (ph) the markets, the better it will be. But I think the markets will be testing it constantly. Until we get the whole financial institution framework right, I think the markets will be testing even Germany.

(END VIDEO CLIP)

QUEST: That's Vicky Pryce, and, indeed, in one fell swoop, you see the conundrum that's taking place. It really is a case of on the one hand, on the other hand. Does the Bundesbank actually raise the rate it's prepared to pay and then contagion is clear? Or does it have a failed bond auction? Damned if you do and you know how that goes.

When we come back in moment, forget turkey and tradition. We will be in New York ahead of the Thanksgiving holiday. It's going to be a case of shop till you drop, after the break.

(COMMERCIAL BREAK)

QUEST: Count your blessings when it comes to turkey and traditions. The U.S. is gearing up for one of its most important annual holidays. It's the American Thanksgiving season, but of course friends like this -- hello -- will be all over the place before the big day itself. There's quite a long to-do list for this lot. The U.S. president always pardons a turkey.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: All right, girl (ph). You are hereby pardoned. Give them a round of applause.

(END VIDEO CLIP)

QUEST: So those two birds won a Thanksgiving turkey jackpot, which meant those two birds do not become one of these. Yes, as you can see. We're very tasteful on this program tonight. You don't go from the White House to the cooking pot.

President Obama made sure that Liberty and Peace, as those two birds were known, will be headed for life on the gravy train as George Washington's historic Mt. Vernon in Virginia, as you can tell. They have escaped a rather serious fate.

Thanksgiving is know for Black Friday, which is the day after the day itself, and America kicks off the Christmas shopping season. The National Retail Federation is -- says that people will be parting with cash in record numbers despite the economic climate. There is some backlash over early store openings.

Maggie Lake, who has a bob or two to spend, Maggie, and I know that you'll be spending well this year, keeping the economy afloat. You've been out finding more about it.

MAGGIE LAKE, CNN REPORTER: Absolutely, and the first task at hand, of course, is what do you get the man who has everything? That's right, Richard, never too early to start shopping for your Christmas present. I'm out here in the mall, and I am not alone. There is -- the Christmas carols are around. The people are flooding in. And you might call me organized and early, but I'm not the only one. Have a listen.

(BEGIN VIDEO CLIP)

As millions of Americans sit down for their Thanksgiving feast this Thursday, many others will spend their evening in a much-less tranquil setting. Don't look now, but Black Friday is fast turning into Black Thursday.

Among the chains opening their doors Thanksgiving Day, Walmart, where stores are offering holiday deals beginning at 10:00 pm, and Toys 'r' Us, where most stores open at 9:00. Macy's, Target and other chains that used to open early Friday morning will now open at the stroke of midnight. Some who follow the retail scene call this a troubling trend.

TIFFANY YANNETTA: Like where is it going to stop? Are we going to, you know, be open all night on Christmas Eve? Are we going to be open Christmas Day? Are we even going to have Thanksgiving next year? Or is everybody just going to be at Target?

LAKE: A backlash has already begun, thousands have signed a petition, to get Target to open later. But with budgets tight, and Americans already shopping online on Thanksgiving, analysts say retailers have no choice.

HOWARD DAVIDOWITZ, DAVIDOWITZ & ASSOCIATES: I would say you'd better do everything you can to get those customers as early as possible. They've only got X dollars to spend. That's all they're going to spend. So the idea that the stores had is we'd better get those dollars first because once they spend it, they're done.

LAKE: Still, shoppers in Times Square are not happy at all with the prospect of trading dinner for deals.

UNIDENTIFIED MALE: To have to weigh, am I going to get together with - - for Thanksgiving with my family or go save a couple bucks, it's a shame, I think.

UNIDENTIFIED MALE: I think they should wait unit the day after, you know, 8 o'clock in the morning, 9 o'clock in the morning, instead of ruining people's holiday.

LAKE: But in Florida, shoppers are already camped out, in hopes of being first in the door. Big crowds are expected by Thanksgiving afternoon.

DAVIDOWITZ: I think there's going to be tremendous lines. I think there's going to be fights over the door busters. The stores aren't doing anything wrong. They're offering the consumer more convenience, more time to shop, more deals. What are they angry about?

LAKE: Never underestimate the power of an eye-popping deal, especially in these troubled economic times.

(END VIDEO CLIP)

LAKE: And Richard, honestly, I don't know where they get the energy from. The most I'm able to do is roll myself away from the table onto the sofa. But they do pour out in hordes.

It's a tradition for many, and seriously, on the economic side of things, what we're going to watch to see is whether this sort of extends the holiday season and let's the retailers rack up more sales or whether we're just stealing it forward into November, and you're going to see a real tail-off as we head into the holiday stuff.

Richard?

QUEST: All right, Maggie. And do think more Bergdorf and Tiffany's than Target or Macy's for my -- for my little Christmas bauble. You're one of the most organized people...

LAKE: I'll keep that in mind.

QUEST: Please do. Please do. You're one of the most organized people I know. When do -- I'm going to follow this in the weeks ahead. When do you hope to have all your Christmas shopping done by?

LAKE: I'll tell you, I used to be more organized. I've got two small ones, so I'm pretty disorganized. But it's all about online for me. No way am I dealing with those crowds, and I don't believe the deals are as good as they say, a very limited inventory, so all online. But I'd better be done by December 15th, Richard, or I'm in trouble.

QUEST: All right. All right. We now have a deadline on QUEST MEANS BUSINESS. If Maggie Lake has not got her Christmas shopping done by December the 15th, well, one or other of us will have words. Maggie, we are watching. Many thanks indeed.

And foggy day, if you've been traveling, every morning this week it seems to have been foggy in London, which Jenny Harrison told us earlier in the week was all about clouds forming on the ground, which I didn't know about.

Pedram, if you are traveling to or from the United States, what's going to happen? Are we expecting trouble delays?

PEDRAM JAVAHERI, CNNI METEOROLOGIST: You know, we're going to talk about it. I want to know, Richard, where have you been? You look like you've got a nice tan going there. It looks like you've been spending time out in the tropical regions of the world. It doesn't look like you've been in a fog.

QUEST: I'll tell you, there was no -- there was no fog except for when I came back, and secrets will remain secrets.

JAVAHERI: Oh, OK. Well, I'll respect that. All right.

Yes, you were talking about the travel plans across the United States Thanksgiving Day weekend, and you take a look, it's actually rather quieter quickly going that way here.

We do have a few showers across the western United States, so from Seattle down towards Portland and areas of Los Angeles a few showers possible come Thanksgiving Day, but it's the eastern U.S. there, where some storms at times heavy have brought in some nice rainfall towards portions of New York City.

Upwards of about 40 or so millimeters outside of where Maggie is out there in New York, but the conditions, again, are going to improve. Look at this: up to the north in the high country of New York State there, picking up 30 centimeters of snowfall in the past 24 hours.

But we do have some travel spots right now, some problems out of Logan International Airport in Boston, a hour and five minutes ground delays out there. And conditions out there -- I don't know if we lost a connection on that graphic there, but travel delays also in Newark, New Jersey, as well, but 23.2 million people -- incredible number, that 23.2 million traveling by air across the United States this holiday weekend.

But you take a look. That's a 2 percent drop from 2010, and the concern, of course, we have fewer sales available. We have less flights available. And, of course, the economy not helping out with high unemployment rates and also high energy prices.

And we know that the fuel prices have gone up some 40 percent in the first few months, half -- first half of 2011. So, certainly, a few reasons why conditions are a little quieter than typical for the United States.

But this is what Richard was talking about. We had fog in place. We do have a weak storm system pushing in, just a few storms, one after another, over the next couple of days that are going to really a mix out the fog and really we want calm conditions.

You want clear skies for fog to being to form. These showers have really mixed the atmosphere well, so the fog had now tapered off at least for the immediate hours there. But some fog could certainly form in the morning hours across portions of London and if you're traveling out of Glasgow, Dublin, we are going to see breezy conditions.

Expect some 30- to 45-minute delays there, even Stockholm with gusty conditions come Thursday there, Richard, upwards of an hour delay possible across that part of the world. I'll send it back to you.

QUEST: Gusty conditions in Stockholm. Now there's a thought for you. Watch out -- watch out, Anders Borg, if you're traveling. All right, many thanks, Pedram. After the break, bed, board and blackmail. Hotel owners say they're being held to ransom by their own guests. Tell us, give us an upgrade or who knows what we'll do?

(COMMERCIAL BREAK)

QUEST: Now one of the biggest travel review websites is under fire from some outraged hotel owners. Hundreds of innkeepers say TripAdvisor, the website, is unfair because it allows anonymous reviewers, often without supporting evidence. And, interestingly, some guests have reportedly threatened to write bad reviews in it unless they get discounts and upgrades.

TripAdvisor says it takes allegations of guest-driven blackmail very seriously because criticism costs business. Just ask Riverside Hotel in the English market town of Evesham. The owner, Deborah Sinclair, says business slumped massively because TripAdvisor has accused her of writing bogus favorable reviews for her hotel.

We'll talk to TripAdvisor in a moment about the wider issues. Before we came on air, I asked Deborah Sinclair about what happened.

(BEGIN VIDEO CLIP)

DEBORAH SINCLAIR, OWNER, RIVERSIDE HOTEL & RESTAURANT: Basically, the phone went dead and bookings went dead, and then a customer came in to the hotel and said, well, haven't you see what's on the Internet on your site? And I checked, because this company didn't actually tell me they were going to do that. So that was the first I knew.

QUEST: And as you -- as you've made representations to TripAdvisor, and you're now -- you're now suing to get them -- to get them to take it off, they continually refuse to take it off.

SINCLAIR: Yes, rather arrogant, isn't it?

(LAUGHTER)

SINCLAIR: It's -- you know, the company's attitude is quite unbelievable. They've never -- only 48 hours ago did they actually write to me and we responded back, explaining that the hotel doesn't have a secure, you know, Wi-Fi system. Anyone can come in and phone onto it if they need to use Wi-Fi like you would in any, you know, cafe or anywhere, really.

QUEST: Right so you're clearly caught -- you're clearly caught in the TripAdvisor vise, if you like, between one and the other. You can get it taken off, and you can't prove your point.

SINCLAIR: No, so it's a very difficult situation to be with an American company that only very recently, apparently, has put a telephone line up for hoteliers and restaurateurs to contact them. I think that's only happened in the last week or so as a result of the publicity that they've received.

QUEST: Now, I've got the TripAdvisor senior director of global communications, Angus Struthers, with me, joining me.

Angus, first of all, let's talk about the allegation that you've put something up on -- you put a red flag on this property, or, indeed, any other property and it's very difficult for those property -- those landlords, those hoteliers to say, whoa, time out, you've got it wrong.

ANGUS STRUTHERS, TRIPADVISOR: So TripAdvisor takes its responsibilities very seriously here. What must be noted is that a red badge, we never apply one lightly. There would have to be significant evidence for us to have reasonable cause to suspect a pattern of manipulation of abuse.

The Riverside property that was just being mentioned there, as with all properties that have a red badge, was giving a warning before the activity -- before the red badge was applied. We have responded at length to them with -- regarding every allegation that has been made, and why we substantiated the red badge being placed in the first place.

QUEST: Right. So but have you got a procedure in place that, if somebody feels they are unfair, the badge -- or there is unfair treatment, you can deal with it? Or is it really TripAdvisor that has the last word, because TripAdvisor is now larger than just a company in terms of the way in which people use it.

STRUTHERS: Absolutely, no, as I said, we wouldn't apply a red badge lightly. In every case, we encourage the owners to get in contact with us.

QUEST: Do you have independent adjudication of these situations? Would that be something you would look at?

STRUTHERS: At this stage, I don't think that that is something we need to look at.

As I said, we wouldn't apply any sort of red badge until there is -- there is sufficient evidence to suggest that there is a property -- and I think what's interesting to note as well is that only a fraction of a percent of the over a million businesses on the site have penalties applied against them. So there's less than 100 on the site at any one time. This isn't something that's prolific (inaudible).

(CROSSTALK)

QUEST: Right. But the (inaudible) now -- this is an interesting -- when did you first become aware that hoteliers were saying, people are threatening us with bad TripAdvisors if we don't give them a discount or if we don't give them a free meal or we don't give them an upgrade?

STRUTHERS: TripAdvisor is absolutely against using the threat of blackmail and using TripAdvisor...

QUEST: But you're aware of it?

STRUTHERS: We are aware of it. Absolutely, and we encourage every owner and manager that suspects that there's going to be a blackmail, a review posted on their property by a blackmail to get in contact with us. We will investigate every opportunity and we will have open dialogue with them. And if we find -- if we find that a review is as a result of blackmail, we will, of course, take it down.

QUEST: Finally, briefly, in a word, you've now become a very powerful force in the (inaudible). I was about to say -- ha, ha -- for good and bad.

STRUTHERS: So, I...

QUEST: You have to take that responsibility.

STRUTHERS: Absolutely. We're the world's largest travel website. We have over 50 million people coming to our site every month. And that -- it's as much as good for their businesses as it is for the consumer.

QUEST: We'll talk more about this in the future. Good to have you on the program.

STRUTHERS: Thanks.

QUEST: Tonight when we come back, a profitable moment when I get to grips with the question of, frankly, whoever does just take one bit of guidance when you're online? (Inaudible) in a moment.

(COMMERCIAL BREAK)

QUEST: Tonight's profitable moment, regular travelers frequently use TripAdvisor. I certainly do. So the idea that some are using blackmail to get upgrades and TripAdvisor's being stern with alleged subterfuge, it's worrying. Surely, though, none of us use one review, good or bad, to make a decision.

We look at the totality. You get a feel what people are saying. How many people found hair in the shower, old socks under the bed and rudeness at check-in? Today there's a wealth of useful, valuable information online and with apps.

Skytrax on airline quality, SeatGuru on which seat to get on board, Room 77, a growing database of hotel rooms around the world. There will be more to come. And to be sure, some reports are suspect, others dishonest. But come on, with a good dose of common sense, we can surely work out which ones to trust.

And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. If you're celebrating Thanksgiving, I wish you well. Otherwise, whatever you're up to in the hours ahead, I hope it's profitable. The news continues. This is CNN.

END