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QUEST MEANS BUSINESS

High Holiday Spirits: Italian Bonds Raise $14 B; A Charitable Giving How-To; Investor Game Plan For 2012

Aired December 28, 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 INTERNATIONAL ANCHOR: Spirits are high, yields are low. Italy gets a needed vote of confidence from the markets.

Staying with spirits, the spirit of giving, who gives to whom, and by how much, tonight?

And another bit of spiriting away, this time, one blogger is told his Twitter followers are no longer his own.

In the spirit of the season, I'm Richard Quest. I mean business.

Good evening.

Italian borrowing costs have plummeted as the bond market buys up Italy's short term debt. It is the red arrow they needed to see in the market. The yield on six-month Italian bills fell to 3.25 percent. That is half the yield they paid last month. Demand was better, too. Altogether it raised around $14 billion in short term debt. And yet Italy still has to refinance more than $500 billion worth of debt. That matures over the next 12 months. Particularly at the beginning half of the year.

Even so, it is the first full scale Italian debt sale since the ECB offered up billions of dollars in extra loans to Europe.

And if you join me over at the super screen, you will see exactly why this particular event today is so significant and how we can factor it in. Let's begin with what they actually did. Now, you'll remember of course that the ECB just about, oh, two or three weeks ago, the ECB has a long- term refinancing operation that basically gave cheap three-year loans to improve liquidity. The money came out from the ECB to more than 500 banks across the Eurozone. In all, 489 billion euros was loaned out in three- year money, at a rate of just 1 percent, an interest rate of 1 percent.

Now, the money went into the European monetary system, in its wider sense. The banks got a hold of it. And the hope was that some of that money did indeed get leant to government and to sovereign lenders like Italy.

Not necessarily always the case, because if you look at other numbers that we saw, about 452 billion of that money came back to the ECB, quite literally they lent the money out and then a week later the banks re- deposited most of that money back with the ECB. That much we know, so far. And, indeed, that number there, that 452, that is a record number for overnight deposits at the European Central Bank.

So you may well be asking, if so much money came how come Italy's bond yield did actually fall? Well, we do know that Italy did have lower yields because of new leadership, of Mario Monti; austerity measures, that his new government has introduced; and that ECB money that we have been talking about. That is the scenario as to how the money moved around. Italian stocks fell during the course of the session. The MIB index, of Milan, was off by more than 0.85 percent. Banking stocks took the worst losses.

As for the rest of Europe, it was pretty much flat line across the board until the last few hours of trade and then they began to fall back again. The DAX hit hard, off 2 percent. Major German banks and carmakers suffered the most; the scenario with which we are now -- need to talk about it.

Joining me now Professor Francesco Giavazzi, professor of economics, at Milan's Bocconi University. He joins me via Skype and broadband.

Professor, we certainly saw yields halve, so it is not an exaggeration, surely to say that he ECB's money has actually filtered through in some small way?

FRANCESCO GIAVAZZI, PROFESSOR OF ECONOMICS, BOCCONI UNIVERSITY: This is true, but what happened today might be all an illusion. Because it is true that six-month bills fell from 6.5 to 3.2 percent. But in the same session the spread between Italian 10-year bonds and German 10-year bonds went up, 15 basis points, which means that there are really two different sets of investors.

There are Italian banks that are flooded with ECB cash, that buy short and build, and there are serious international investors out there who invest in bonds. And if anything, today, are a bit more worried about Italy than they were yesterday.

QUEST: In that scenario, all that has happened is that the ECB cash, that I was just talking about, that 489 billion, is just really washing its way around the system and actually if you are right, professor, won't do any good for the long-term bonds?

GIAVAZZI: No, I mean, Italy has in excess of 200 billion to roll over between now and the summer. And most of those 200 billion are medium- , long-term bonds. Bonds that are purchased precisely by those investors who today ask a higher yield to buy Italian bonds, notwithstanding the ECB flooding the banks with money.

QUEST: So, can you not see any good that came out of the financing operations. I mean, at least they are not paying 6, 7 percent for short- term debt.

GIAVAZZI: Well, I think there is a deeper dimension in which the ECB cash works. I mean what it really needs is to start growing again, after 10 years of essentially zero growth. And if the cash given to the bank clearly goes into the real economy filters to Main Street, to the companies, and these start investing again, then this will access the real issue in the Italian economy. Until that happens, buying short-term treasury bills doesn't really do much.

QUEST: You don't believe that is going to happen, do you? Or that the money will filter through. What you are talking about there is the traditional banking function of lending to small, medium and large-size enterprises.

Now, if Italy goes back into recession, Spain is in recession. Greece, we know is a basket case. Eurozone has a recession. There is no incentive for the banks to lend it out.

GIAVAZZI: Well, they are very much exposed to this company. So by not lending out and stopping lending to these companies, they are sort of committing suicide. So to many of these companies that are still solvent, the banks would have an incentive to lend. And in this dimension the ECB cash helps.

QUEST: It is an extremely obscure, convoluted, difficult way that the ECB is actually managing to refinance, or at least to get growth started, isn't it?

GIAVAZZI: Yes, I think growth is the name of game. If the ECB operation helps lending and helps growth in Italy and Spain, in Portugal, then we can see the light at the end of the tunnel. If growth doesn't resume I think we are in deep trouble.

QUEST: Professor, we thank you for joining us from Italy this evening. Francesco Giavazzi, many thanks indeed. We'll talk more about this, no doubt in the weeks and months ahead. Always good to have you on the program.

QUEST: One of the world's top bond traders says the world investors are looking to the ECB. Later in the show we'll hear from Tony Crescenzi, the executive vice president of PIMCO. He tells CNNMoney's Poppy Harlow about what the rest of world is hoping for.

(BEGIN VIDEO CLIP)

TONY CRESCENZI, EXECUTIVE VICE PRESIDENT, PIMCO: The world is still de-risking playing a game of hot potato with European bank assets and government bonds. And the only player that has the oven mitts, to handle these hot potatoes, is the European Central Bank, the so-called lender of last resort. But it is not playing that game. So investors are very nervous about who will hold those potatoes that investors still want to toss around.

(END VIDEO CLIP)

QUEST: Hear more of that later. Now it was supposed to be a quiet day on Wall Street, often is between Christmas and New Year. But this is the way things stand on the Board. Off nearly 1 percent, 119 points, 12,000 is still looking steady. It has been in the red for most of the session. The Dow is basically showing a gain of about 6 percent for the whole of 2011.

When we return, it is the art of giving. We'll look at the most generous nations in the world, after the break.

(COMMERCIAL BREAK)

QUEST: `Tis that time of the year when many of us really start to think about giving back, giving to those who are less fortunate. And if we didn't do it in 2011, then in 2012 we should be now making our plans.

Because it is not just the central banks that are in a benevolent mood at this time of the year, the season of good will creates a planning process where we should now consider where we donate our money.

Some background, first of all, the United States is the most charitable nation, if you determine charity by money in donations. According to Charities Aid Foundation, the U.S. gets the highest score on the index. Here is an interesting thing. Ireland is at No. 3, despite the austerity. Overall there has been a slight worldwide increase and also an increase in volunteering. But the U.S. remains at No. 1.

Even though its last couple of years have been difficult, companies do still give during tough times. U.S. corporate donations up 13 percent from last year, according to the "Chronicle of Philanthropy." Wal-Mart gave $319 million. But it will be interesting to see, remember 2010 was one of the bounce back years from the recession. It will be interesting to see if 2011's giving has maintained that upward momentum, being a much more difficult year.

When it comes to giving forget the corporates, the celebrities give big. Lady Gaga is the most charitable, says DoSomething.org. She donates 25 percent of the clothing range, Gaga soon to launch, Born This Way Foundation.

Now, Justin Bieber is at No. 2, according to the survey. So, the celebrities are giving, the corporates are giving. And we now know which countries are giving.

All of us can give something. And if you are a celebrity then the profile and the bank balance means you can probably bring more to the table. In a moment we will give you some strong advice on the art of strategic giving.

First to CNN's Alina Cho, who caught up with the comedy A-lister, Will Ferrell, to find out about a cause that is close to his heart.

(BEGIN VIDEOTAPE)

WILL FERRELL, ACTOR: Stop what you are doing and listen. Cannonball!

ALINA CHO, CNN INTERNATIONAL CORRESPONDENT (voice over): On the big screen, and small --

FERRELL: Stratee-gery.

(LAUGHTER)

CHO: Will Ferrell has won the hearts of fans everywhere, by making us laugh.

UNIDENTIFIED MALE: At 10 am, Santa's coming to town.

FERRELL: (SCREAMING) Oh, my, God!

CHO: Cracking jokes comes naturally to Ferrell, but surprisingly he just as easily shows a serious side.

FERRELL: A quarter of a million dollars each time.

CHO: On the set of his new movie, "Dogfight" we sat down to talk about Cancer for College, a charity founded in 1993, by his USC fraternity brother Craig Pollard, a two-time cancer survivor.

Cancer for college awards scholarship money to young cancer survivors. Ferrell is its unofficial goodwill ambassador.

(On camera): What kind of impact does that have?

FERRELL: Well, it has a huge impact, especially considering, that when you think about most of these families are just trying to survive something like this. Ferrell got involved early on, when he was just starting his career, as a new cast member on "Saturday Night Live."

UNIDENTIFIED FEMALE: Hey, Saddam.

FERRELL: Monica, you never call me anymore.

(LAUGHTER)

FERRELL: No knowing if I was going to be fired at any moment, I think I wrote a check for $50, that was my first donation. Playing it very conservatively.

CHO: Safe.

(Voice over): Not long after that Ferrell attended Cancer for College's annual golf tournament, something he says changed his live.

FERRELL: When I got to meet the scholarship winners, and their families, that's when the whole thing really kind of -- kind of hit me.

CHO: So, Ferrell go to work, donating his time and money.

FERRELL: How much have we raised?

UNIDENTIFIED MALE: $300,000.

FERRELL: Wow!

CHO (on camera): So, you do have a megaphone that a lot of people don't have.

FERRELL: Honestly, I think that is -- the only thing fame is really good for, in a way. My wife and I talk about the fact that we've gotten to experience a lot of amazing things and we have been to the Oscars and the Golden Globes and all these fancy things that every dreams of -- but that one night a year when we get to give out the scholarship checks is, you know, supersedes all of that.

(END VIDEOTAPE)

QUEST: We can't all give the sort of money that Ferrell and Gaga and Wal-Mart give, but that doesn't mean we should all try. And while we are talking about it tonight is, of course, it is that time of the year when we should all be thinking about what we will do next year. Eileen Heisman is the chief exec of the National Philanthropic Trust in the U.S., Eileen joins me now from New York.

First of all, we know the U.S. gives so much, and we need to understand what philosophy one should have when deciding how, where, and when to give.

EILEEN HEISMAN, CEO, NATIONAL PHILANTHROPIC TRUST: I think one of the most important things is start teaching it to your children, or friends, or people that are young, as soon as you can. Because when you embed it in somebody, when their early and young, early in their lives, it stays with them forever.

I mean, one of the things I say to people when they ask me, and I get asked often, is to really make a plan. I mean, we plan everything else. We plan our vacations. We should plan our charitable giving. We should start it with a budget.

And I don't mean it has to be a rigid budget, but you should have a general sense of what you want to give. It could be $1,000, $10,000, $1 million, wherever your wealth is, is where you should decide. Some people set a percentage. Some people set a dollar figure. I don't think it matters that much.

And then you should decide what is most important to you. Some people give only with their heart. I've seen some people only give due to metrics. But most people give with their heart and with their mind, and their analytical skills. So, I really encourage people to do some background research, and not just to give to the first person, or entity that has been asking you for a gift. I think that is really important.

QUEST: So, you choose -- you decide what you, you know, the causes that are important to you. But then you have the problem of deciding the best way to give, don't you? Whether it is volunteering your time, whether it is volunteering cash, whether it is donations -- I mean, there are all sorts of ways in which you can give, aren't there?

HEISMAN: There is. You can give time if you are in a position in your life where you have spare time. It is great to give. A lot of people have, you know, two working spouses and little kids and they can't give. So they have to find other ways. You can give through the Internet. You can give directly to charities. You can give property, personal property. And I think you just have to decide which of those best fits your lifestyle.

QUEST: Now, let's talk about this. Exactly. This idea of what is best to give; which is the best -- what are the causes close to one's heart. But you know, you know, Eileen, when I ever think about this, you know, you sort of think, well, I -- there's always the cancer, then there is the poor children in Africa, and then there is HIV-AIDS charities. And then there is the Salvation A -- Oh, Lord!

(DESK BELL CHIMES)

And before long, you are thinking well, a pound, a dollar to each? Or the lot to one? What would you suggest?

HEISMAN: A lot to one, or maybe a lot to three. I always say narrow it down to two or three, and give fewer, larger grants to them. Or few larger gifts, because when you spread it out too thin, it is not that the $5 doesn't count, or the $10, but it is a lot more strategic to give fewer, larger gifts. And then stay with them for awhile. Don't be fickle. Don't change every year. Because it costs charities a lot of overhead to raise money and if you can stay with the organization you like or causes you like, it actually allows them to spend more money on programs and that is what you want your money to do anyway.

QUEST: You just used one word there I was waiting to hear from you, that I need you to explain. You said, "strategic."

HEISMAN: Yes.

QUEST: What do you mean when you say the giving has to be strategic?

HEISMAN: You know, that's a great question. Strategic means different things to different people. Strategic might mean that you are giving to a cause that is most important to you. Strategic might mean that you are looking for outputs, or outcomes, from the charity, measurements that are meaningful to you. It might mean that you are giving to something that you know from your friends does a great job.

So strategic can mean a lot of different things. You know for some people strategic is micro-lending. Or giving globally to low-income countries that impact investing, or actually giving through business investment. So, it really depends on what is of interest to you and what you really want to do with your own money.

QUEST: I've learned something today and I thank you for joining us. Particularly this idea of giving more to few, do it strategically, and stay with the charity.

HEISMAN: Yes.

QUEST: And would you recommend following up with the charity in the weeks and months ahead, see what they are doing with your money? Or does that sort of, a bit like, "I've given this money. I want to know what you've done with it!"

HEISMAN: I think you should follow up with a charity, but certain social problems take time to have an impact. So, you need to be patient, especially if you are taking a risk with your dollars. And I really suggest people take risks with their philanthropic dollars. So, if you are funding a new organization, you may not see the outcome for two or three years. And you should be patient with that. If you really need to see immediate outcomes, you should probably give to more tried and true, where you know the statistics will come out and you can read them more quickly.

QUEST: Eileen, thank you very much. You've given a really good hard-nosed spin to an interesting and difficult subject for us to talk about on this business program. Eileen Heisman, joining me from New York, tonight.

And I will be writing an article on what she said, so if you want to actually follow up on that, we'll have some of that advice for you.

After the break from Dracula to Dorian Grey. It is a city steeped in literature, with an accolade to prove it. The last "Future Cities" from Dublin, after the break.

(DESK BELL CHIMES)

(COMMERCIAL BREAK)

QUEST: There is an old saying in Dublin, you can't throw a stick without hitting a poet. Joyce, Beckett, Wyle, just some of the names that make up the city's writing history. In fact, it was Joyce himself who famously said, "When I die Dublin will be written in my heart." You can barely walk through a park, across a bridge, order a pint, without feeling the legacy of poetry and prose, which is why UNESCO has named Dublin a "City of Literature.

For the last time, "Future Cities" is in Dublin. Jim Boulden reports.

(BEGIN VIDEOTAPE)

THEO DORGAN, WRITER & POET: "Night Prayer": So far from me tonight across the city, the arms, the huddled terraces of brick, past the prism of hospital, through the markets, shopping mall, over the river, the fashionable streets into the back lanes, past the (UNINTELLIGIBLE), the museum, the library, the gallery.

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT (voice over): Dublin has inspired countless great writers. The Irish capital has given the world stacks of spellbinding literature.

DORGAN: Storytelling is woven into the fabric of life here. And a great deal of that story telling, but by no means all of it, makes its way out into the printed word. And it is something to do with scale. It is something to do with Dublin's sense of its own history. It sense of itself as a storytelling city.

BOULDEN: Dublin is proud of its legacy and celebrates its heroes openly. All around town, there are plagues and statues dedicated to writers.

(On camera): Dubliners are so proud of their literary icons, they even name their bridges after them.

(voice over): Samuel Beckett, James Joyce, and Sean O'Casey are immortalized between the banks of the River Liffey. Recently the Irish capital's love for writing was recognized by UNESCO, with a "City of Literature" designation. It confirmed what many Dubliners already knew.

JANE ALGER, DIRECTOR, DUBLIN UNESCO CITY OF LITERATURE: We know we are a city of writers. Knowing it ourselves is one thing, but being told you are, by an internationally recognized organization is something else. So it has brought huge pride to city at a time when we need it.

BOULDEN: The accolade could also give the city a financial lift by attracting tourists. Historic sites like the old library at Trinity College have brought people to Dublin for many years.

(On camera): This is the largest library in Ireland. Home to the famous "Book of Kells."

(Voice over): The extravagant manuscript dates back to 800 A.D. and attracts visitors from all over the world.

Though Dublin cherishes its literary history the city wants to shake off its dusty image.

ALGER: We appreciate our literary past, and so does UNESCO, and we are not a city of dead writers. There are all sorts of literary activities going on.

BOULDEN: Dublin's literary community is working hard to promote the written word. Eibhlin Evans runs a book club. She says UNESCO is motivating Dublin to turn a new page in literary tourism.

EIBHLIN EVANS, FLYING BOOK CLUB: We have to be inventive now. We don't have the resources that we once had as a culture, as a state, which can support the arts to the extent that it would like to. So, we have to find innovative schemes.

BOULDEN: And Dublin is doing this by taking literature out of the museum. The city's "Great Writing In Great Places" series, brings together readers and writers in an exclusive setting.

UNIDENTIFIED FEMALE: Half starved and clad in ragged clothes.

BOULDEN: Don't be fooled, what looks like a courtroom case, is in fact a discussion on crime writing at Dublin's Poor (ph) Court. For those who prefer their Godot with a Guinness, there is the long-running "Literary Pub Crawl."

UNIDENTIFIED MALE: Is the Irishman the only man in the world who would climb across 20 naked women to get to a pint of Guinness.

(LAUGHTER)

BOULDEN: Two actors introduce Dublin's most famous pubs and the literary greats that once drank in them. It is a history lesson come to life. And the kind of experiential tourism Dubliners want to see more of.

DORGAN: If cultural tourism means that bringing people into contact with that living culture, then I think it is an unambiguously a good thing. If we attempt to museumize our literature and our culture, it is unambiguously a bad thing.

BOULDEN: Dublin has a refreshing approach to literature and a thriving contemporary scene. UNESCO's designation is a testament to this and should help Dublin remain a cultural capital well into the future.

(END VIDEOTAPE)

QUEST: The City of Dublin, our "Future City."

Coming up after the break, a top bond analyst says investors are playing a global game of hot potato. Now we need to discover who has the oven mitts to handle it, after the break.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in a moment. This is CNN and on this network the news always comes first.

(NEWSBREAK)

QUEST: Two successful Italian bond auctions eased fears over the immediate stability of the country in the Eurozone. Yields on bonds halved since the last auction, a month ago. Today's sales suggest investors are willing to buy Italian securities as the new government in Rome introduces tough austerity measures.

(DESK BELL CHIMES)

So, this is what happened. We saw a fall, a red arrow. Italian six- month bonds, or bills, fell to 3.25 percent. Half of what they were being demanded last year (sic). Cover was good, too, 1.5 percent. Altogether around $14 billion raised. Italy is faced with more than $500 billion worth of debt it needs to refinance.

The MIB index, in Milan, was off by more than 0.75 percent. Banking stocks took the worst of the blows.

Now, you may think well, this all seems rather good. Everything is off the boil. You'd be wrong. Despite these signs investors may be willing to spend a little bit more. European instability is still the major worry into next year. CNNMoney's Poppy Harlow joins me now from New York.

One of the things I have been seriously impressed about is how on your side of the Atlantic, Poppy, they give such credence and importance and worry and concern to the Euro crisis.

POPPY HARLOW, CORRESPONDENT, CNNMONEY.COM: Absolutely. As they should, Richard, I mean, if we have learned anything from the past three years it is that our crisis in the U.S. is inescapable around the globe and a euro crisis in Europe is inescapable here.

I had a chance this week to have a long conversation with Tony Crescenzi, he is the executive vice president of PIMCO. Talked to him about whether Europe is the number one focus heading into 2012 and what investors should do in what he has deemed a global game of hot potato. Take a listen.

(BEGIN VIDEOTAPE)

TONY CRESCENZI, EXECUTIVE VICE PRESIDENT, PIMCO: No question it is what people on Wall Street call the left tail risk, which is to say that it is the big event that could occur to upset markets. Europe is taking action, but it is taking action very slowly to solve its problem. It still has what many consider a cash flow problem.

In other words, money is bleeding out of Europe. U.S. money market funds, for example, had large amounts of money invested in Europe, but they have been pulling it out and today have no exposure to Portugal, Ireland, Italy, Greece, or Spain. And have reduced exposures to Germany and France.

And so the world is still de-risking playing a game of hot potato with European bank assets and government bonds. And the only player that has the oven mitts, to handle these hot potatoes, is the European Central Bank, the so-called lender of last resort. But it is not playing that game. So investors are very nervous about who will hold those potatoes that investors still want to toss around.

HARLOW: What's not getting enough focus heading into 2012, that you think should be talked about more among investors?

CRESCENZI: Well, we are recognizing at PIMCO that the global growth story is not very favorable. It is not a disaster, but it's not that great. But we want to, of course, pay attention to the potential to be selectively offensive while we are being generally defensive, as Mohamed El-Erian has said.

So we want to also pay attention to the potential for upside. And I think that is where there isn't a lot of attention paid. And so while we want to be very defensive, and that is the best thing to do, is to guard capital this year. Do look for opportunities where economies could outperform. And the United States is a good example of that where growth recently has beat expectations. There are a lot of upside surprises and so don't shut the door on the idea that things could get better, while being very defensive.

HARLOW: What are your three big calls heading into the new year?

CRESCENZI: Well, to be the main idea forwarded by Mohamed El-Erian, which is to be generally defensive and selectively offensive; and so this means paying attention to both sides and this will, one, first, guard your capital against losses and large losses potentially, because of market volatility. This is very important to avoid catastrophic losses, big losses with associated with volatility. But it also gives you a chance to participate in the upside with that sort of idea.

And secondly, this means to fortify portfolios with the various characteristics I mentioned about being high in quality and high in the quality structure, etc cetera. Also, pay attention to the new frontiers. Africa is growing in terms of attention and people are looking, focusing there more. So you want to take a look at that opportunity over the -- because over the long run it might present itself to be a very fabulous one, if one considers the possibilities and is a long-term investor.

And so the third one, I'd say, if you had to add in, is not knowable. You just have to wait and see and probably take advantage of an opportunity that arises and so you want to be quick to move when markets afford you the opportunity in 2012.

(END VIDEOTAPE)

HARLOW: Richard, what stood out to me in our conversation was he said, yes, in 2012 guard capital. Be generally defensive, but also be selectively offensive. So what is he talking about? One example that he gave is in emerging economies. Take Brazil for example, he has been very bullish on Latin America, all through 2011. He said when you look at the short end of the yield curve in emerging economies you have great opportunity there for bond investors.

Because there is still a lot of room to cut on interest rates; that is going to benefit folks in terms of holding that short term debt for emerging economies. That is one place where he is bullish in 2012, Richard.

QUEST: Poppy, one of the things that just comes back to me again and again, and we can talk more about this tomorrow and the rest of the week. Listening to what he says and factoring it in to ordinary investors, not big bond investors, what it basically means is you can no longer just sit on it and hope it will take care of itself. You have to play and you have to move things around.

Poppy Harlow, who is in New York for us tonight, with an interesting interview there. We thank you for that and the insights that followed.

After the break, bitter over Twitter. A legal row in the U.S. It has cast doubts on who actually owns Twitter accounts, professionally and personally. The case, worth 100s of 1,000s of dollars, in a moment.

(COMMERCIAL BREAK)

QUEST: Sounds such a simple and obvious question: Who owns your Twitter account? Ah, sounds so easy. A legal case in California raises questions about ownership. Where the account is being used for personal and professional Tweets. You have seen the story: PhoneDog, a Web site devoted to mobile products is not suing a former employee, Noah Kravitz (ph), for $340,000. It is alleging his use of the Twitter account, after leaving the company damaged the business.

Kravitz told CNN the case came as a complete surprise.

(BEGIN VIDEO CLIP)

NOAH KRAVITZ, SUED BY FORMER EMPLOYER: My last day at work was Friday October 15, 2010. I submitted my final post, they choose to run them on the following Monday, the 18th, I believe was the date, when I was no longer officially and employee.

And both my written post and the video on the YouTube channel both direct people, you know. "Hey, I don't know what I'm up to next, but, if you want to keep tabs on me, go to @NoahKravitz. So, they knew about the account change.

You know, like I said, they brought it up and said, yes, it is your account. Would you Tweet for us from time to time? And perhaps naively I said, yes, of course. Because we had such a great working relationship and I was a fan of what they are doing.

(END VIDEO CLIP)

QUEST: This is one that has been rumbling around the office all day. Joining us now, via Skype in California, the technology blogger Robert Scoble.

Robert, we do not want to get too close into this particular case, because the facts are always where the judgment lies. But did you ever have any doubt as to owned a Twitter account?

ROBERT SCOBLE, TECHNOLOGY BLOGGER: I didn't in my case because I made it part of my contracts with my employers. I worked at Microsoft as a blogger. At "Fast Company" magazine, with my Twitter account, and now I work at Rack Space Hosting, and it is very clear who owns what.

I like Google + approach, which is use your personal name for your personal account and use you make a company account for your brand or for your company. And the two are separate and when you leave the company and the company account belongs to the company and your personal account belongs to you.

QUEST: Ah, but then you end up with people like myself, who obviously have a good few, not as many as Piers Morgan, but a good few followers, who follow me because they like to know whether I'm sitting in first class, business class or by the lavatory at the back of the plane. Are they my followers? Or are they CNN's followers?

SCOBLE: It gets muddled when you put CNN into your Twitter account name. If it was just your name, I would say it is your followers. But it depends what kind of agreement you made with your employer. CNN seems like it has a pretty lax policy because they let Rick Sanchez take his followers off and he even had the name CNN as part of his Twitter account. But it is not so clear.

QUEST: Right.

SCOBLE: And when you mix somebody else's trademark into your brand, you really put yourself into legal hot water.

QUEST: Right. Now, the interesting thing I think also, is -- again, not necessarily specific about this particular case, but it does show that corporations are literally grasping and grappling with the new way of doing business. We don't yet have rules of the road for how corporations, how individuals and how social media should all behave, do we?

SCOBLE: No we don't. And each company believes different things, right? At Apple you are not allowed to Tweet, period; as long as you are identified as an Apple employee, you are not allowed to Tweet. That is in their social media guidelines. Whereas, like when I worked at Microsoft we had hundreds of people who were blogging and Twittering and doing all this fun stuff.

QUEST: So, we are at the forefront of technology. We are making it up as we go along. There is no clear definable rules as there are, for example, don't use private stationary from the stationary cupboard. Don't make off with the pencils and don't put things in the internal post. You know, the usual things that we get used to in a company where there are established rules.

What would you say -- what would you say would be the first and foremost rule, then, to anyone watching tonight, who has a Twitter account?

SCOBLE: If I was doing it sort of mixed with my business I would make -- I would send an e-mail to my boss and get her or him to spell out exactly who owns that account. And you know, get it into just a simple e- mail will be defensible in a court like this.

I would not put anybody else' brand name on my Twitter or Facebook account, right? So, I'm not RobertScoble (underscore) RackSpace, or RackerRobert, or something like that. I'm RobertScoble, period. Or Scobalizer, which is my own personal brand that I've built and it is separate.

QUEST: We thank you for joining us, Scobalizer. We thank you for joining us from California. Many thanks, indeed.

Now, we have had the QUEST MEANS BUSINESS Facebook community up in arms about this all day. I think this is an interesting Tweet that we got from Shabez Sikandar, who basically makes -- which I thought when I saw it -- "This guy only had 17,000 followers so to sue over 17,000 followers does seem to be a little bit extreme."

Shane Bodd, has Tweeted, "I believe if the account is in the name of the individual it belongs to the individual."

I guess there is a certain logic in that.

And Barbara Levy says, "It would seem to depend on the contractual agreement between the employee and the company?"

All of which remarkably good common sense. And if you and I sat down and thought about it over a cup of tea, we would probably come to those conclusions. However it does seem that common sense is a bit lacking here, which is why the case is heading towards court.

If you want to join the community on Facebook: Facebook.com/cnnquest. Something tells me that according to those rules that this one might not be mine. But then we'll have to argue that one out in the future.

After the break, forget the financial market turmoil. We are in a food market in France, where business is booming. Turkeys to truffles, everything is on the holiday menu.

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QUEST: Economic turmoil has dominated Europe throughout the year, there is one market which has remained strong throughout. It concentrates on food rather than finance, and the French are noted for their gastronomic extravagance. The Christmas period is the perfect excuse for a little foie gras, which I simply adore -- smoked salmon, also pretty good, and lobster. Our gourmand Jim Bittermann reports from Rungis, where thousands of Parisians have been stocking up on these holiday essentials.

(BEGIN VIDEOTAPE)

JIM BITTERMANN, CNN INTERNATIONAL CORRESPONDENT (voice over): It is before dawn on a frigid December morning but already hundreds of trucks have been converging for hours on the gigantic Rungis market, southwest of Paris; 120,000 tons of food and perishable products will be coming through here this month. And before this day is out 20 million French, through their wholesalers, their retailers, their shopkeepers and restaurateurs, 20 million people will have, in effect, done their shopping here.

(On camera): They call this the biggest food market in the world and it is difficult to overstate the size of this place. Nearly 500 acres of individual stands, with a yearly turn over close to 8 billion euros; it supplies the food for nearly one-third of France that comes through every day.

(voice over): And so, this holiday season, is there any sign of an economic crisis here? Very little.

THIERRY MAIA, REYNAUD SEAFOODS (through translator): In France people have the habit of giving themselves pleasure during the holidays. I think it will be a big New Year's despite it all.

BITTERMANN: Despite it all takes in a lot since many cases food prices are way up this year. Lobsters and oysters, for instance, holiday favorites here, are up anywhere from 20 to 40 percent.

PATRICK LENORMAND, J'OCEANE SEAFOODS (through translator): This year is different because a storm passed through last week. And there have been 15 days of very, very bad weather. And because of the shortage of product, prices have risen a lot.

BITTERMANN: Nonetheless the market's directors expect 6,500 tons of seafood products alone to pass through here this month. Up in, in some cases, by as much as 30 percent. Sales and prices of other delicacies from poultry and to suckling pigs have also been rising. As have been those black diamonds, truffles; this year selling retail at about 2,600 euros, $3,500 a kilo. For some merchants there is a lot at stake.

FREDERIC MASSE, MASSE FOODS: In December it is 25 percent of the whole year, just in December. So it is very important to make you to have a very good month.

BITTERMANN: From all indications at the Rungis Market, it will be a good month for the merchants, no matter what the economic crisis globally. But beyond the end of the year, few are making positive predictions. It may just be the natural worriness of these small and mid-size business owners, but a great many believe after the high living at the year's end, French consumes will have to do some serious belt-tightening in 2012.

Jim Bittermann, CNN, Rungis, France.

(END VIDEOTAPE)

QUEST: Wow, that really shows you the size and scale of the place. I must confess I always think truffles are a little overstated. I'm sure some of you probably think it is heretic to say that. I think they are very strong and often not pleasant.

All right. Just as well, plebian tastes from Quest.

The weather forecast, Tom Sater at the World Weather Center for us tonight.

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QUEST: Tonight's "Profitable Moment": The time of the year devoted more to reflection than action. A time to count profits and losses, and once you've weighed up the lot, the next question is what to do with the gains. Money can always be put to good use. And when you give it charity it should never be an afterthought. As told you tonight, deciding where, when and how to donate, deserves as much attention as your everyday investments.

And with all the worthy causes out there, get a strategy. Draw up a budget, set targets to be identified and make long-term commitments to needy people. Sometimes I'm often told I'm too materialistic because I ask you to have a profitable time. The truth is there is no shame in being profitable.

So that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you are up to in the hours ahead --

(DESK BELL CHIMES)

I hope it is profitable. I'll see you tomorrow.

END