CNN CNN


 

Return to Transcripts main page

QUEST MEANS BUSINESS

Fed Statement Expected; Bundesbank Warns ECB Not to Exceed Mandate; Greek Cuts Agreed; Olympic Badminton Scandal; Playing to Lose; US Fed Maintains Interest Rates; Euro Up, Pound Down, Yen Unchanged; Federal Reserve Statement; US Markets Unchanged After Fed Statement; Analysis of Fed Statement; European Markets Mixed; Profits Up for Standard Chartered; Manufacturing Weakness

Aired August 1, 2012 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


NINA DOS SANTOS, HOST: Central banks in the spotlight. In 15 minutes' time, the US Federal Reserve will show its hand.

Unsporting behavior on the badminton court. With eight players disqualified, we assess the tactics in sport and business and take a look at why sometimes it pays not to do your best.

Also on the show, a US fast food chain becomes an unlikely flashpoint for opponents and supporters of gay marriage. We're going to look at what happens when business takes a stand.

I'm Nina Dos Santos, and this is QUEST MEANS BUSINESS.

Good evening. Tonight the Fed, tomorrow the European Central Bank. We're entering a crucial 24 hours for investors as central banks in the United States and also in Europe decide whether to take fresh action to ease the eurozone debt crisis and also to kickstart the faltering global economy.

Well, the markets are braced for word from the US Federal Reserve, and in about 15 minutes' time, they'll actually get it. But the big question is, what will the Fed do to try and support the faltering global economy.

It's got several weapons at its disposal. It could, on the one hand, tweak the interest rates that it pays on bank deposits. Now, lowering that would be an incentive for banks to lend out more cash instead of hoarding it on their balance sheets.

The Fed could also pledge to keep benchmark interest rates at their ultra-low levels for even longer to come. And a third round of quantitative easing could also be an option that they have at their disposal.

Now, in just a few moments' time, we'll know exactly which of these weapons the Fed is ready to fire off, but in the meantime, let's speak to our next guest. Robert Shapiro is the chairman of Sonecon, and he's also a former Undersecretary of Commerce for Economic Affairs under President Clinton's administration in the 90s. He joins us now, live from Washington.

Robert, thanks so much for coming on QUEST MEANS BUSINESS. What do you think the Fed will do --

ROBERT SHAPIRO, CHAIRMAN, SONECON: It's a pleasure.

DOS SANTOS -- and what do you think the Fed should do?

SHAPIRO: Well, there's nothing like making a conjecture when you could be proved wrong in ten minutes. I think the most likely outcome here is a statement that they will maintain low interest rates for a very long time, perhaps into 2015 --

DOS SANTOS: We already know that they're going to main --

SHAPIRO: -- and I think there's some --

DOS SANTOS: We already know that they're going to maintain interest rates at this kind of record low level until July 2014, don't we? So you think that's a realistic possibility?

SHAPIRO: Yes.

DOS SANTOS: Extending that by one year? What would be the difference?

SHAPIRO: Well, the difference is that it assures buyers in particular of a longer-term securities that the -- that credit conditions will remain accommodative. And so I think there's some importance to that. I think it is also possible that they could announce the -- their willingness to undertake additional quantitative easing.

The fact is, we are now looking at some contradictory signs from the economy. Consumer spending is weak, industrial production is weak. On the other hand, we got good news on housing markets, which is very important for consumer spending. We also have good news on consumer confidence.

So the fact is, there's no absolutely clear course right now for the Fed. At the same time, I think if I were in that committee, I would say, if we're going to do it, better to start it now than to wait 6, 8, 12 weeks down the road.

DOS SANTOS: But -- here's the problem. What we've got is all these central banks hinting at action, building up everybody's hopes, and if we don't have that, what's going to happen to the markets tomorrow?

SHAPIRO: Well, my concern is not so much what happens to the market tomorrow, my concern is the basis for growth over the next two years. And for that, the real -- the area in the hot seat is not the United States, it's the eurozone.

What the United States needs, what Asia needs, and of course what Europe needs, is greater assurance that the eurozone will not allow a sovereign debt default in Spain or Italy.

DOS SANTOS: OK, Robert Shapiro, thanks so much for joining us from CNN Washington. We really appreciate you coming on this show, a little bit under pressure to give us your views ahead of that key state -- that Fed decision.

Well, the head of Germany's Bundesbank has warned the ECB not to go too far. President Jens Weidmann said that the Central Bank shouldn't exceed its mandate when it comes to guarding against inflation. He said that European governments, quote, "overestimate the Central Bank's possibilities."

Weidmann also reminded the bloc's monetary guardians of the importance of keeping Germany's central bank on side. He said that the Bundesbank is the largest and most important central bank in the entire eurozone, and his comments are being seen by many as a warning shot to Mario Draghi, the ECB president, against stepping up his response to rescuing the single currency.

Well, Greece has worked out where a fresh $14 billion round of spending cuts will be coming from. The finance minister, Yannis Stournaras, says that coalition leaders have accepted the prime minister's austerity proposal. As such, the cuts are a condition of Greece's bailout.

Disagreements over the time frame for these kind of measures had been threatening to bring down the entire coalition government earlier on in the week. And let me just remind you that that entire coalition was formed just six weeks ago after a fraught second round of elections for the country.

The leaders of France and also the United States have spoken out about their common interest in boosting Europe's economy. President Francois Hollande's office has been saying this, quote: "They had a detailed exchange on the international economic situation and expressed their common interest in growth in Europe and also in stability of the eurozone."

These kind of factors, they went on to say, are necessary for the recovery of the global economic activity.

After the break, when badminton goes very bad, indeed.

(BEGIN VIDEO CLIP)

SEBASTIAN COE, CHAIRMAN, LONDON OLYMPIC ORGANIZING COMMITTEE: Depressing. Who wants to sit through something like that?

(END VIDEO CLIP)

DOS SANTOS: Eight athletes are kicked out of the Olympics. We'll ask if it every pays not to try your best.

(COMMERCIAL BREAK)

DOS SANTOS: Eight badminton players have been disqualified from the Olympics, not because they bent the rules to win, but because they deliberately tried to lose. Zain Verjee is standing by at the Olympic Park in London to tell us all. Zain, why exactly did it seem as though they were appearing to lose?

ZAIN VERJEE, CNN INTERNATIONAL CORRESPONDENT: Hi there, Nina. Well, basically, they were missing the easiest shots in the world, and then they weren't able to get them back or they would serve directly into the net.

And pretty soon, every spectator in the room knew what was going on, and they were just booing the South Korean, the Chinese, and the Indonesian badminton players that were out there supposedly trying to win, because isn't that what the Olympics is all about? You come in, you try and win your match and you move on, and if you lose, you lose.

But apparently, even though they had qualified into the next round, what it meant was if they were to lose or just kind of throw the game, they would then be up against a weaker opponent. So, it was tactical as well, and it was part of the whole strategy, but it went really sour.

The IOC spokesman came out and said that this was just not acceptable. Sebastian Coe, the Olympic Games chief here said this was depressing and unacceptable.

And just a short while ago, Nina, the Reuters news agency managed to speak just outside Wembley stadium with the president of the Badminton World Federation, who said, "I'm very sorry this incident every happened. We will investigate and make sure it doesn't happen again."

So, as far as the situation stands right now, it seems as though they've been booted out of the competition. There will be a disciplinary hearing, and it doesn't also seem as though any appeal will be tolerated.

DOS SANTOS: All right, Zain Verjee at the Olympic Park, thanks so much for the latest on that.

Well, other than upholding the integrity of the Games, there was very little incentive for these players to win, as Zain was just telling us there. And there are times in the world of business when sometimes it also pays to lose.

Rita McGrath is a professor at Columbia Business School, also an expert on corporate strategy, so it's great to have her on this show. Rita, the corporate world often looks at the sporting world for ideas about strategy and takes its cues from there. But this isn't the most positive example at all, is it?

RITA MCGRATH, PROFESSOR, COLUMBIA BUSINESS SCHOOL: No, it really isn't. Although it's frighteningly accurate in terms of what sometimes happens in business, in the sense that there are often times when it's tactical not to lead with your best offer, not to lead with your best product. And there are several examples of when that might be a sensible strategy. For instance --

(CROSSTALK)

DOS SANTOS: Give us some of those examples.

MCGRATH: -- the packaged goods manufacturer. Sure. There's a package goods manufacturer that I know of that actually had developed some very innovative new ways of packaging materials and ingredients but that were slightly more expensive.

And so, they basically kept that stuff on the shelf until a little entrepreneurial company introduced something similar, and then they, whomp, came out into the market and introduced that exact product and knocked the little firm right out of the game. So, that's an example of perhaps holding back something that you could have introduced but decided not to.

A second reason why companies might hold back on something or not give their best effort is they don't want to alert the competition to what they're doing until they're really well and ready to make a compelling move. So, you might keep something -- on the shelf, as it were, until you know what the competitive playing field's going to be.

Similarly, sometimes companies hold back in a market that they feel is not all that attractive to try to induce their competitors to go into that market. That's another reason you might hold back.

DOS SANTOS: Rita, the other thing I suppose we should contemplate is that some people in the corporate sphere might be saying if you look at those badminton players, all they're trying to do is make the matches the most efficient possible.

Surely that's something that we should replicate in the corporate world. It's not worth spending all of your energy on an opponent that perhaps is too difficult to beat.

MCGRATH: Well, there's a big debate about that, right? When you think about competitive dynamics, one of the core ideas is when you're matching up with someone, especially in multiple markets, sometimes you can actually cause them to divert resources the way that you want them to when, in fact, if it was all straight-out competition and everything was on the level, you'd never see that kind of behavior.

DOS SANTOS: Again, just going back to the issue of sports and business, what are the positives we can learn, though? Because obviously, this is -- as we were saying, this is a rather negative example. It's not as if they were cheating, but it's been viewed as very unsportsmanly behavior.

MCGRATH: Right.

DOS SANTOS: But from -- what is it that really -- that works in the - - from the competitive arena in the Olympics that translates well to the business arena, if you like?

MCGRATH: Oh, I think the idea of having integrity and common values and striving for something where the rules of the game are observed and treated equally by everybody. I think what people are objecting to here is that there is both an explicit and an implicit rule about sportsmanlike behavior that was violated here.

So, I think -- I think one of the things business people can take away from it is you can't go too far from what people consider to be fair and equitable practice without getting your head handed to you.

DOS SANTOS: OK, Rita McGrath, there. Do stay with us, Rita McGrath is a professor at Columbia Business School, also an expert on corporate strategy, and she's going to be staying with us throughout the course of the next hour to discuss exactly what we can learn from some of the Olympics and also other issues that we're going to be going through in the show.

I also want to bring you what the Federal Reserve has decided. The US Fed has decided to maintain interest rates unchanged at a level of between -- zero percent and a quarter of one percent. So, it's decided to keep them unchanged at their current low of between zero and a quarter of one percent.

Many economists were expecting that. We're waiting to see what it says in terms of other sort of finer details coming out of this statement. I can also tell you that it has just said further down the statement that US growth is decelerating.

Obviously, we know that the United States is not in a recessionary period like some European economies, but it has been showing signs of slowing, and that is what the Fed has been saying. It's holding its fire when it comes to further stimulus. That was what the markets were looking for.

We'll have plenty more from the Fed statement, that crucial statement, later on throughout the course of the store.

We've got a Currency Conundrum for you now. Olympic rules state that a team must pay a fee if it decides to appeal a decision. As such, South Korea handed over cash to appeal that disqualification of its badminton players today, and yesterday the Japanese team did the same to appeal a gymnastics score, which eventually won them the silver medal.

Today's Conundrum: how much cash did they hand over? Was it A, $100, $500, or $1,000? We'll have the answer to that later on throughout the course of the program.

Well, the US dollar is edging ever lower against the euro thanks to that Federal Reserve decision and the statement. It's still up around about, as you can see there, a little bit against the British pound, adding about half of one percent so far in today's session.

Not a stellar performance, but still the pound losing its strength against the US dollar ever so slightly and the dollar gaining against it. When it comes to the Japanese yen, for once, it's almost unchanged. We'll be back after this.

(COMMERCIAL BREAK)

DOS SANTOS: Welcome back, you're watching QUEST MEANS BUSINESS. We've heard that crucial Fed decision after its two-day meeting, and what it's decided to do is keep interest rates on hold at their historic low of 0 percent to 0.25 percent.

So, we're talking about that crucial range of zero percent to a quarter of one percent, that's where they've been since back in 2008 when the credit crunch hit.

And they also said that the growth in the United States is decelerating at pace, and they said that they're going to be holding fire when it comes to more money printing, more monetary stimulus, that is the key statement there that the markets were waiting for, and they may well be disappointed.

Let's go over to Alison Kosik, who's standing by to tell us about market reaction at the NYSE. Presumably, this isn't unexpected, but it may well disappoint many, Alison.

ALISON KOSIK, CNN CORRESPONDENT: I'm not sure about the disappointment yet. The markets really haven't moved all that much. They did move a bit lower since this decision came out, but not much new about its language, only some minor tweaks.

But one certainly stands out, and that is about possible quantitative easing coming. You look back in June when the Fed met and came out with its policy statement, and it said that it was prepared to take action as needed.

Well, that language changed to the following. It's saying that the Fed will provide "additional accommodation as needed to promote a stronger economy." So what it looks like the Fed is sort of moving towards is that possibility is getting a bit stronger that it could provide that stimulus for the economy more so than we saw happen in June.

So, it stands to reason that when the Fed meets on September 12th and 13th coming up and it will also have its press conference, by the way, that the Fed maybe wants to see a couple more jobs reports and see if maybe the jobs market picks up a little more steam before it comes to a decision whether or not there would be another QE.

But as I said, not much change in its language except for the fact that this statement, Nina, definitely seems much gloomier than it did in June, especially with the Fed saying that the economy did decelerate in the first quarter. Nina?

DOS SANTOS: Yes, really is the key issue. The outlets of the US economy, which is of course the world's largest. Thanks so much for that, Alison Kosik.

KOSIK: Sure.

DOS SANTOS: There on the floor of the New York Stock Exchange. Let's get an insider's perspective on the Fed statement now. Randall Kroszner is a professor at the University of Chicago Booth School of Business, and he's also a former member of the Federal Reserve Board of Governors. He joins us, now, live, from Chicago.

Randall, first of all, what do you make of this statement? Because what we haven't seen is more quantitative easing, we haven't seen an extension of those record lows of interest rates yet. But what we have seen is, perhaps, the extension of Operation Twist, which hasn't had that much of an effect.

RANDALL KROSZNER, UNIVERSITY OF CHICAGO BOOTH SCHOOL OF BUSINESS: Well, I think it has had an effect, and remember, the Fed just decided to extend that in the previous meeting. It only got a little bit more information about the economy since the last meeting.

So, I think it makes sense the Fed has -- is keeping its powder dry because it wants to see where the economy's going to evolve.

But the statement, I think, is a little bit more forward-leaning. Instead of saying they would be prepared act, they now said they will provide more accommodation if they don't see the economy moving. So, I think they're providing a foundation for providing a little bit more stimulus in September.

DOS SANTOS: So, on the one hand, what they're saying is that the perspective is weakening. We've had confirmation that when it comes to the US economy, it is weakening, and that may prepare us for some kind of stimulus in September. How do you think the markets are going to react to a statement like this? On the economic front, as Alison was just telling us, that's the gloomy bit.

KROSZNER: True. Well, unfortunately, we already knew the gloomy bits already, so the job market has not been very robust. We have been creating jobs in the US, but not at a rate that's fast enough to bring down the unemployment rate.

I think we're in what I've been calling a sideways slide. We've had the unemployment rate at around 8.2 percent for a long time. I don't think there's much prospect that it's going to go significantly down rapidly. It'll bounce around a little bit around -- around 8 percent.

And I think the Fed is very frustrated with that, and they're now providing a foundation that if we don't see a lot of improvement in the job market and the end of this week and in the report the beginning of next month, we're going to act.

DOS SANTOS: There is a saving grace, here, a silver lining to this cloud. Is the fact that gasoline prices have been coming down significantly -- those are one of the big threats to the US economy -- how much will that help to sort of mitigate the issue here and prevent the United States from eventually flatlining in terms of growth?

KROSZNER: Well, it certainly helps. I don't think it's the key thing that's affecting our growth rates right now, but it's certainly helpful to have some of those energy prices coming down. Food prices had come down, but now they're reversed a little bit and started to move up.

But the inflation rate is very well contained. The inflation expectations are very well anchored. So that gives the Fed a little bit more breathing room to try to provide more accommodation, because the main cost if they provide more accommodation is the concern about inflation. But that doesn't seem to be there right now, given the weakness in the economy.

DOS SANTOS: Yes, that's the absolute thing, isn't it? Printing more money obviously pushes prices up eventually and causes concerns about what that money is worth. The US can't afford that, because it's got the de facto world currency, doesn't it?

Where do you see the dollar going from here, though? Because obviously, against the euro, well, European companies are having a much easier time, as long as they can stay afloat, because the euro is weakening, it's becoming more competitive for their exports.

KROSZNER: Yes, the euro has gradually been weakening over the last few months as the challenges in the eurozone continue to be challenges and haven't been worked out. Obviously, all eyes are now going to turn to Mario Draghi and the ECB tomorrow, given the Fed did not provide any more accommodation.

And so, I think the key to what is going to go on is what will the ECB do tomorrow? Will there be enough support? They'll be seen as important for trying to save the euro? Or are they still having enough debates between the Germans and the Italians and the French that they're not really going to make much progress?

DOS SANTOS: OK, Randall Kroszner, thanks so much for joining us, there, from the Chicago Booth -- Chicago University School of Business. Thanks for that.

Now, European markets were mixed ahead of the Fed's announcement, and this is how they closed today. Germany's DAX finished in the red. We also saw weak manufacturing data. And of course, those comments from the German Central Bank is capping some of the gains in several of the major markets as well.

London's FTSE 100 managed to reverse early losses on strong earnings from some of the biggest bellwethers in the UK. In Paris, we also saw that French Bank BNP Paribas adding about 1.8 percent at the close, while on the other hand, its rival Societe Generale closed half a percent higher despite a worse than expected earnings report.

And at the moment, just to bring you up to date with trading on the Dow Jones Industrial Average, given what the Fed just said in the last ten minutes or so, we've got the Dow down about 16 points at the moment after paring its earlier gains.

Now, banks which do most of their business outside of Europe are doing quite a bit better these days, and profits at Standard Chartered actually grew by a full 9 percent in the first half of 2012. That's the tenth straight year that this company has reported profit growth in the first half of each year. I asked its CFO how they're managing to come up with these kind of results.

(BEGIN VIDEOTAPE)

RICHARD MEDDINGS, CHIEF FINANCIAL OFFICER, STANDARD CHARTERED: Certainly this has been a very good first half for us. They'd be strong results in any circumstances. Actually against a slow macro economic background in the global economy, against regulatory pressures, against negative Asian exchange rates, I think they're excellent results.

How is it happening? I think it's important to understand two things about us. One, our businesses are in Asia, Africa, and the Middle East, and those businesses and those countries continue to grow at strong levels of GDP.

And secondly, what the bank does is at its heart is retail banking and commercial banking within our wholesale banking division. So, we offer good support to our customers, and our business grows as our customers grow their business.

DOS SANTOS: Nevertheless, a lot of people are saying that the China situation is worsening vis-a-vis its economy. It's now the second largest economy in the world.

You're very exposed to China and Southeast Asia as well as other emerging markets. Do you think that we're seeing a soft landing, or could there be a harder landing further down the road, and how would that impact your bottom line going forward?

MEDDINGS: There's split views on this. I think there are some commentators clearly who believe China's in for a hard landing. We do not believe that. We think that China has the depth of financial resources, the policy tools, a technocratic government able, I think, to make very good executive decision, actually, to ensure that China's landing is a soft landing.

You are, however, seeing a slowdown in the global economy if you take trade -- global trade in particular is now growing at under 5 percent. And in Asia, intra-Asian trade is now growing at about 7 percent. Two, three years ago, it was growing at over 20 percent and over 30 percent. So, you are seeing a slowdown across our markets.

We, however, continue to take market share, so we're gaining significantly new business flows even though the market itself is slowing.

DOS SANTOS: Let me ask you about the Fed's decision, also the ECB's decision and the Bank of England. Quantitative easing. Are you expecting more of it, and what will be the effects of that? Because in the long term, it could do more harm than good.

MEDDINGS: Well, I think the central banks are clearly using significant firepower now in terms of their very good efforts, I think, to maintain underlying economic resilience. I think each time now that, if you take LTROs, for example, it was undoubtedly very necessary the first time.

But actually for a trillion euros, one would have hoped for a longer feel-good factor than simply a matter of a few weeks. And I think now, as these policy tools are rolled out, they have less and less effect. So, the challenge, if anything, if anything grows.

(END VIDEOTAPE)

DOS SANTOS: That is the CFO of Standard Chartered Bank speaking to me earlier today.

Well, as the global economy limps forward tied to the ball and chain of Europe, manufacturers across the world are feeling the heat these days. The Market's Purchasing Managers' Index is an indication of how well the manufacturing sector is doing globally. And let me just tell you how to read this indication.

A number above 50 indicates growth. Anything under 50 indicates a contraction. Let's start out with where things are worst. When it comes to the eurozone, for this region as a whole, as you can see, the number came in at 44. Now, that marks a 12th month of contraction. It also represents a 37-month low for this region.

We also saw the declines in places like the UK, France, Germany, also Spain, being some of the steepest since mid-2009. There was actually only one bright spot here for this region, and it is this country, Ireland, one of the three to have been bailed out so far. It came in with a reading of over 50 at 53.9.

Let's head over to the world's largest economy. The Institute for Supply Management Index over there in the US came in at a reading of 49.8. Now, that is below the 50 mark. It's up just one tenth of one percent from the month of June and it does mark a second month of contraction for the US.

Economists were actually expecting this number to be above 50, indicating growth for the United States. No surprise to see that Ben Bernanke has said that the economy over there has been decelerating.

And if we head over to the world's second biggest economy, which is now China, manufacturing growth there almost ground to a halt last month. As you can see, the official government figures actually show it fell to 50.1 from a reading of 50.2 for the month of June.

This just goes to show how far the ripples of the eurozone crisis are currently spreading across the rest of the world.

Up next here on QUEST MEANS BUSINESS, a U.S. chicken chain is drawing crowds, not for its food but instead for its (inaudible) on gay marriage.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

DOS SANTOS: Hello and welcome back. I'm Nina dos Santos. These are the main news headlines this hour.

A Syrian opposition group says at least 117 people have been killed today nationwide. This video posted online appears to show some of the victims from a suburb of Damascus called Jdeidet Artouz. We're also seeing what looks like new shelling in Zabadani. That's another suburb of the capital. More than half of those killed this Wednesday died within the Damascus area.

(Inaudible) international health experts are working to contain an Ebola outbreak in Uganda. Sixteen people have now died from the virus and nearly two dozen others are infected. Hospitals are setting isolation sections for people who are being treated for Ebola.

China sports delegation in London says that it fully respects the IOC's decision to disqualify two of its badminton players from the Olympics. The Chinese pair, along with teams from South Korea and Indonesia, were banned after being accused of trying to throw their matches to manipulate the quarterfinal draw. All appeals have been either denied or withdrawn.

British fans are celebrating the first two gold medals for Great Britain at the games. Well, the Tour de France winner Bradley Wiggins (ph) won the men's individual cycling time trials while earlier Helen Glover (ph) has had a standing one, the women's pair rowing. Time on these medal table with no fewer than 15 golds in total.

(MUSIC PLAYING)

DOS SANTOS: You might not have heard of Chick-fil-A. This is a fast food restaurant chain that isn't actually widely known outside the United States. But it's now at the center of an international storm because of its CEO's opposition to the issue of gay marriage.

Well, Dan Cathy has proudly proclaimed the chain, quote, "true to its conservative roots, has donated to anti-gay groups." Former Republican presidential candidate Mike Huckabee has thrown his weight behind him now and has decided declaring today "Chick-fil-A Appreciation Day," and urging supporters to let their views be known in the world of social media.

The gay rights group GLAAD has now designated Friday "Same-Sex Kiss Day," to be celebrated in Chick-fil-A restaurants and it's also urging supporters to take to the world of social media. Let's get a little bit more on all of this, because of course, Chick-fil-A isn't the only company taking a stand on the issue as the same-sex marriage.

Just last week what we saw was Amazon's founder, Jeff Bezos, donating $2.5 million to help pass a referendum on same-sex marriage in Washington State. Now we also saw General Mills announcing that it would oppose a proposed amendment that would ban gay marriage in the state of Minnesota.

And after coming under fire for supporting politicians that oppose gay marriage, Target actually released this advert for wedding lists this year.

Google also launched a "Legalize Love" campaign as well, and we also saw, last but not least, Oreo posting a rainbow-filled cookie on its Facebook page for Gay Pride month. Must also mention this one, which is a famous, favorite one of mine. And Ben & Jerry's has renamed its popular Chubby Hubby ice cream, as you can see, Hubby Hubby, showing its (inaudible) here.

Now let's bring in a corporate strategy expert, Rita McGrath, who joins us. She's going to be joining us over here -- excuse me.

(LAUGHTER)

DOS SANTOS: And she's going to be talking to us about exactly whether companies should be engaging in, let's say, taking a stand. When is taking a stand a good thing, Rita, and when is taking a stand perhaps opportunistic?

RITA MCGRATH, CORPORATE STRATEGIST: Well, I think it's good to take a stand if it's something you genuinely feel and believe in and it's true to your brand and it's part of your authentic identity. For example, when the Boy Scouts said that they couldn't support equal rights for gays, people understood that that was part of their ethos. It's part of who they are.

But I think it's much trickier for a corporation that has to appeal to many constituencies to know exactly where to draw that line. I think another thing that makes this particularly concerning to a lot of people is, as you know, in the U.S., there was a Supreme Court decision which basically said corporations are people, and that opens up the spigots of vast amounts of corporate money.

So if a corporation is prepared to take a public stand, they can often back that up with, you know, lots and lots of donations and contributions. And that, in turn, can have a distorting effect on the political system.

DOS SANTOS: I was just about to come to the political system now, because of course we've had Mike Huckabee getting involved in all this. Again, that blurs the line, doesn't it?

MCGRATH: It really does. And you really have to wonder whether companies whose job is selling doggie treats or fast food or whatever really has much of a business trying to influence public policy in that way. I mean, that's why we have politicians, isn't it?

DOS SANTOS: It certainly is. And then, again, some politicians are funded by the corporate world, aren't they?

I just want to go back to this idea of opportunism, because obviously we all applaud people who would like to do something to make sure everybody has equal rights, et cetera. But as you just said, if you've people who are manufacturing pet food, throwing their weight behind certain policy decisions, it dilutes the message as well, doesn't it, for real activism?

MCGRATH: Well, it does, and I think sometimes you can see companies sort of hopping on popular bandwagons for their own benefit. A famous historical company that did this a lot was the Body Shop. You know, they had a policy of always engaging in these causes. But if you look at what the causes were that they supported, they were all sort of politically correct.

I think what's going on with the gay marriage issue is actually more interesting, because whereas the Body Shop's causes nobody could really object to saving the whales or being green or whatever it was, you know, there are people with deeply felt sentiments on both sides of that particular issue.

DOS SANTOS: OK. Rita McGrath, thanks so much for joining us here on QUEST MEANS BUSINESS from the Columbia Business School. Been great to get your views this evening.

After the break, Richard gets -- they've been talking with the aid of a few interesting apps.

RICHARD QUEST, CNN HOST: We request that you pass by bridge -- the bridge.

DOS SANTOS: Well, that's on "Business Traveler," next. Do stay tuned for that.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

DOS SANTOS: The latest smartphone apps promise to make it a breeze to navigate a Russian supermarket or instead order, say, in a Greek restaurant. And as such, we wanted to know if an app really can take the place of a trusty old phrase book. As such, we sent down Richard Quest to Beijing to put the latest ones to the test.

(BEGIN VIDEO CLIP)

QUEST: So we've made it to China, and now need to get around and try and understand the language that's, frankly, all Chinese to me. Today we're putting three translation apps to the test.

First up, Pleco, a large app that has an optical character readout. The question is whether it can read and translate this sign.

Pedestrian traveler on foot.

QUEST (voice-over): It takes patience and a strong arm.

QUEST: We request that you pass by --

QUEST (voice-over): But we get there in the end -- sort of.

QUEST: -- the bridge. The bridge. (Inaudible). So this is basically saying a message to pedestrians crossing the street, we request that you use the bridge, and there is the bridge. Whew!

QUEST (voice-over): No Internet connections required and no roaming fees, which is a big plus. But at over $50 for the basic package, I'm not convinced.

QUEST: Pleco doesn't really work if you've got to ask another person for something. It's only good if you're trying to translate a word, and even then, your arm gets tired holding the camera.

QUEST (voice-over): Next, the audio approach. It sounds promising.

QUEST: What time is it, please?

UNIDENTIFIED FEMALE: (Inaudible).

QUEST: Oh, excuse me, excuse me.

QUEST (voice-over): And at just $5 Jibbigo repeats the phrases back to you in Mandarin.

QUEST: Oh, she speaks English. Good food?

Whew! Cold food. Remember speak clearly.

Four tickets, please.

QUEST (voice-over): It's rather good once you get going. And this one presents the added opportunity to make acquaintances as well.

QUEST: Ha. (Inaudible).

Please cut it.

This one. This one. That's the (inaudible).

QUEST (voice-over): When it comes to bargaining, it's back to English.

QUEST: Thirty.

UNIDENTIFIED MALE: Thirty, 30.

QUEST: Thirty.

UNIDENTIFIED MALE: Yes.

QUEST: That's a lot of money.

(CROSSTALK)

QUEST: I like Jibbigo . Jibbigo, providing you don't use the voice so people have to hear, if you type it in, Jibbigo works. Just keep your questions simple. Don't ask about monetary policy in the People's Republic of China.

QUEST (voice-over): Next, Google Translate, another audio app.

QUEST: Excuse me. (Inaudible).

QUEST (voice-over): Although the app is free, using it is most definitely not. You need an Internet connection and without wi-fi the roaming bells go off and the roaming bills go up.

QUEST: So in the translation app rap, Pleco has a huge dictionary and is good for single words. But its optical reader is difficult to use and not reliable in the field.

Google Translation, the app may be free, but think of the roaming charges. Do you really want to run up the risk?

As for Jibbigo, I used it, sometimes with odd results, but by and large, got what I wanted and it was fun.

(END VIDEO CLIP)

DOS SANTOS: Richard Quest there in Beijing, testing out all those key apps, some of them with mixed results, it should be said.

Well, the first A380 flight to Texas has just touched down. Lufthansa and state officials are at George Bush International Airport to mark the event. Passengers believe the plane by a new double-decker jet bridge. The inaugural flight of the Lufthansa 440 left Frankfurt earlier today. The return flight will depart later on tonight for exciting times for that airline.

We'd like you to -- we'd like to know your essential travel apps and also give us your thoughts on the stories that we've covered on the show tonight. You can, of course, send them to us via Twitter @questcnn or post them on our Facebook page, which you should know the address is CNN.com -- CNN Facebook/CNN/questmeansbusiness.

Now let's go over to our meteorologist Jennifer Delgado at the CNN International Weather Center to see what the picture's like weather-wise especially for all you business travelers out there.

Hi, there, Jen.

JENNIFER DELGADO, AMS METEOROLOGIST: Oh, absolutely and especially for those who've been traveling into London for the Olympics. And that's what we're going to look at today. I want to show you on the radar, over the last 12 hours, overall, we saw a few light showers passing through. But you can see really heavier rainfall came through areas including the very northern parts of France.

So what is in the forecast for the U.K. as we go through the next 24- 48 hours? I want to stop the clock tomorrow for Thursday at 10:15. Notice we do have a chance for some showers out there. And, again, they're not going to be heavy downpours.

But today you saw a lot of sunshine out there. You saw drier conditions and that was a vast improvement. In fact, let's go to some of this video. And I want to take you over and just kind of show you a nice little time lapse as we go through the evening into the day. You can kind of see the clouds clearing out.

But that was a nice looking shot, because you didn't see any showers out there, and that's what we certainly like to see. But the reality is, as I take you back over to our graphics, there are going to be a few out there, as I said.

It looks like another storm system is going to be arriving as we head into later this week, and it's going to start to swing over towards the east. As I show you your forecast for Thursday, as well as into Friday, and Saturday we are going to see those rain chances increasing for Thursday. We're talking a 30 percent chance of rainfall. And then on Friday, 20 percent.

And notice those high temperatures are going to be right around 20 degrees with overnight lows -- this is not a mistake -- right at 15 degrees for really the next three days. By Saturday, we have that storm system that potentially could bring more heavy rainfall. And I show you the layout here for all of Europe. It'll start off right now with the U.K. and what's happening off the coast of Ireland.

Notice this low is what's going to be dipping down and as I said to you, into Friday as well as even into Saturday, that's where the wet weather will be.

And as we go through central Europe as well as over towards areas including Lithuania, Latvia, we're talking about some scattered afternoon storms, you know, the ones that come when you have the afternoon heating and it's going to get warm for areas especially down towards the south.

We're talking high temperatures generally are going to be in the upper 20s as well as a few lower 30s out there for you Thursday. High of 26 degrees for Warsaw, for Kiev, 31 degrees and then for Paris a comfortable 27 and 28 in Munich. Oslo, you're a cool spot along with Glasgow with temperatures in the upper teens. Send it back over to you, Nina. You like that time lapse, didn't you?

DOS SANTOS: I did. I also like the temperatures in the double digits.

DELGADO: I know.

DOS SANTOS: (Inaudible).

DELGADO: (Inaudible) get a little bit warmer.

DOS SANTOS: Just a little bit. Still not warm enough for me.

DELGADO: I hear you.

DOS SANTOS: For the month of August. Thanks so much for that, Jennifer Delgado, there at the CNN Weather Center.

Now they're no strangers to getting the results away from home, but Man United's latest foreign trip might be their most important yet. We'll have more on the Red Devil roadshow after this break.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DOS SANTOS (voice-over): Let's bring you the answer to today's "Currency Conundrum" now. How much does it cost to file an appeal against the gymnastics score in the Olympics? That was the one we spoke to you about half an hour ago. And the answer is it depends how many you've had before.

It came into $300 that's required for a first appeal, $500 for the second and $1,000 for the third appeal. The money is refunded if the appeal is successful.

(END VIDEO CLIP)

DOS SANTOS: Now one of England's biggest football clubs is taking another big step towards the New York Stock Exchange. Manchester United are going public. Jim Boulden in here in our studio with all the details. Jim?

JIM BOULDEN, CNN CORRESPONDENT: Thank you, Nina. Yes, well, after many false starts, it's finally happening for Manchester United. The roadshow begins today, traveling through Asia, Europe and the United States. Man U needs to try to persuade investors to buy its shares when they finally lift on the New York Stock Exchange.

Well, one group that's not really happy about all this, of course, is fans. The fans are very angry and they have been for the last seven years about the American owners. You see here flags like this, "Love United, Hate Glazer."

One of the supporters' trusts calls this IPO a "slap in the face," why? Well, the shares won't pay any dividends and the proceeds will either go towards the debt that has been accumulated by the Glazers, some $650 million, or straight to the Glazers themselves. Fans have also spotted something called a equity incentive award plan.

What does that mean? It means, in short, a windfall for senior members of the club staff by setting aside 16 million shares. Together, that could be worth some $320 million. It doesn't say who will exactly benefit from it, but certainly this man, the manager, Alex Ferguson, may get something.

And interestingly, of course, Ferguson has defended the Glazers from all the criticism in the past, even though Man United won nothing in the last campaign and it lost its title to its close crosstown rival, Nina.

DOS SANTOS: Now, Jim, here's a question for you. Who's going to be buying the stock? Presumably it's going to fans rather than the hard-nosed investor --

(CROSSTALK)

BOULDEN: I think so, too, yes. I think the banks are going to have a hard sale with this. Remember first they tried to have this IPO in Asia. That didn't work. In Singapore there was of it going to Hong Kong. Now it's going to be New York. Look, no dividend.

The Glazers control the voting continually and do Americans really like football? That's the question. I think it'll be die-hard fans who just want to get a piece of that club back, even if they don't get voting rights.

DOS SANTOS: It's a really difficult time to be listing any company on the stock market at the moment. Manchester United hasn't had a very good run of late, so that might make it even worse. And it could be a financial (inaudible).

BOULDEN: Well, the interesting thing is that the Glazers need money for transfers. So they've racked up this debt and everyone said seven years ago it's exactly what they were going to do, and they did it. Now they need money for transfers.

How are they going to get it? They hope to get it from this IPO. The question really is is -- are they going to get enough money to be able to do that and pay down the debt, and then be able to use the money to buy transfers? That's why fans are all so upset about the Glazers.

DOS SANTOS: What's the future like for this company, then? There's a listed company. It's going to have to (inaudible).

(CROSSTALK)

BOULDEN: Yes. Well, you know, it has no peers in the U.S., because U.S. sports teams don't really list on the stock exchange. So we can't compare it to other companies. And then you have to say to yourself, why would Americans be buying the shares?

Others will have to go into and buy dollars to buy the shares. The thought was originally, go to Asia, tap that market, because that's where the fans are, and that that would solve the Glazers' problem. But that didn't work.

DOS SANTOS: Who says that you can't mix sport with business? There you go, Jim Boulden there in our London studio. For more on that. Well, if you couldn't make it for the London Games, watch them, well, like these people in the Olympic Park, you might want to think twice about sneaking (inaudible). We'll tell you why in just a moment.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

DOS SANTOS: If you've been watching the Olympics at work today, well, just be grateful that you don't work for the City of Los Angeles, because according to the "L.A. Times," (inaudible) asked its staff to stop watching the Games on office computers.

Now according to the "Times," an email went out to staff on the head of information technology or I.T., saying quote, "We are experiencing a high volume of traffic due to people watching the Olympics online."

This went on to say, "I respectfully request that you discontinue this as it is impacting city operations," at the moment. If your workplace has let you watch the Games, do let us know. You can get in touch with our show by our Twitter handle, which is @quest/CNN. You can also get in touch with us on Facebook at the address as I was mentioning before is Facebook.com/cnnquest.

Now when you host a world event like the Olympics, you might find yourself stepping out of your comfort zone every now and then, or even perhaps flying. London Mayor Boris Johnson took a ride on a zip wire today as part of the celebrations. He was high above Victoria Park and everything seemed to be going fine -- that was until he got stuck.

(BEGIN VIDEO CLIP)

BORIS JOHNSON, LONDON MAYOR: It's very, very well organized. What they do. Get me a ladder.

(END VIDEO CLIP)

DOS SANTOS: The mayor was left dangling from his harness for about five minutes. He told reporters the operator, quote, "might have left the brake on or something," end quote. But he still recommends the ride. I can certainly tell you that a lot of people seem to think it was rather fun.

And that's it for this edition of QUEST MEANS BUSINESS. I'm Nina dos Santos in London. Thanks so much for joining us.

(MUSIC PLAYING)

DOS SANTOS: These are the top stories this hour.

A Syrian opposition group says at least 117 people have been killed nationwide today . This video posted online appears to show some of the victims from a suburb of Damascus called Jdeidet Artouz. We're also seeing what looks like new shelling in Zabadani. That's another suburb of the Syrian capital. More than half of those killed this Wednesday died within the Damascus area.

In just the last hour, the U.S. Federal Reserve has left the interest rates unchanged at close to zero and reaffirmed the commitment to keep them at these historic low levels until at least 2014. The Fed says that weaker employment and a depressed housing market all contributed to the (inaudible).

China sports delegation in London says that it fully respects the IOC's decision to disqualify two of its badminton players from the Olympics. The Chinese pair, along with teams from South Korea and Indonesia, were banned after being accused of trying to manipulate the quarterfinal draw. All appeals have been either denied or withdrawn.

British fans are celebrating the first two gold medals for Great Britain at the Games. The Tour de France winner Bradley Wiggins (ph) won the men's individual cycling time trials while on the other hand Helen Glover (ph) has had a standing, won the women's pair rowing.

"AMANPOUR" is next here on CNN.

(MUSIC PLAYING)

END