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QUEST MEANS BUSINESS
Standard Chartered Accused of Hiding Transactions With Iran; Eurozone Tensions; European Markets Up; German Reaction to "Psychological Dissolution" Comments; US Downgrade One Year On; US Markets Since Downgrade; Euro, Pound Down
Aired August 6, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Branded a rogue institution. Standard Chartered accused tonight of defying US sanctions on Iran.
There's an A for anniversary. One year on, we assess the impact of S&P's downgrade on the US.
And a battle of man versus Mars as man takes a leap forward.
I'm Richard Quest. Together, we start a new week, and I mean business.
Good evening. Standard Chartered tonight is accused of secretly conducting a quarter of a trillion dollars' worth of illegal transactions with Iran. The announcement and the revelations came as a surprise, and they came a few hours ago.
New York prosecutors say that for nearly a decade, the UK-based bank ran an executive-approved scheme called Project Gazelle. Now, this is no little money matter. Gazelle is alleged to have hidden roughly 60,000 transactions for Iranian banks and eased them through the financial system.
Of course, $250 billion worth is said to have been at stake. Transactions that were subject to US economic sanctions.
The court order says the rogue institution -- that's the phrase they use -- the rogue institution even wrote up a manual on projects to help staff avoid detection. Standard shares have plunged more than 6 percent in London.
Now, we have asked Standard for a -- or Standard Chartered for its comments on the story, and they have so far -- well, Emily Reuben is here. What have they said?
EMIL REUBEN, CNN INTERNATIONAL CORRESPONDENT: Well, I think this has slightly taken them by surprise, to be honest, because when I rang the press office here in London, they said they were in the process of drafting a statement.
They e-mailed that over to me just a few minutes ago, and in it, it says that the group is conducting a review of its historical US sanctions compliance, and it's discussing that review with US enforcement agencies.
But let's be clear, Richard. These do seem to be pretty serious allegations. I just came off the phone with a senior government official here who said that it sounds like a pretty big deal.
Now, we're not talking about the bank stumbling unwittingly into dealings with Iran. We're talking about them actively making these dealings and then trying to cover them up. And let's be clear, the law in America is absolutely clear on this. No US business or citizen can do business with Iran.
QUEST: All right. All right. All right. We've got the complaint here. It runs for some 20 --
QUEST: Twenty-seven pages.
QUEST: And judging by your notations, you've been already plowing through it at speed. Fundamentally, what are they alleged to have done?
REUBEN: Well, they're pretty serious allegations. What they are alleged to have done is to pursue willful and egregious violations of US law. Let me just read you this -- the main body of this, which I think pretty much sums it up.
So, it says, "For almost ten years, Standard Chartered bank schemed with the government of Iran and hid from regulators roughly 60,000 secret transactions involving at least $250 billion, and reaping millions of dollars in fees."
It goes on to say that "These actions left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins, and corrupt regimes."
QUEST: All right. There is one -- there's the statement. Now, there is one particular e-mail that everyone's talking about tonight, isn't there? There's one e-mail that sort of allegedly -- I'll throw that in a dozen times, because Standard Chartered says they're still looking into it -- allegedly tells -- it's rather crude.
REUBEN: It is rather crude. I mentioned earlier that the press office has been taken unaware, but it seems from these documents that people within the bank knew very well what was going on.
There was one e-mail sent from the CEO for the Americas to the group exec director in London, and he said that he believes that the Iranian business -- I think we've got a graphic on it here -- needs urgent reviewing.
He raised those concerns that then regulator claims that an employee heard one of the directors in London say, "You Americans, who are you to tell us, the rest of the world, that we're not going to deal with Iranians?" I think that's going to get somebody in trouble. Potentially.
QUEST: Where does it go next?
REUBEN: Well, the New York regulators want to revoke SCB's license in New York and suspend its dollar clearing operations. Now, of course, this comes in the wake of some pretty serious scandals to hit the city of London.
First of all, we have Bob Diamond resigning from Barclays over the libor scandal. Incidentally, Peter Sands came out last week saying that Standard Chartered was not in the frame for that libor situation.
QUEST: Oh, great! Right, fine. So, it's not in the frame for libor, it's just in the frame for alleged misdeeds with Iranians and breaking US sanctions.
REUBEN: Well, it -- that was good news for Peter Sands last weekend. And don't forget that the bank -- part of it's sort of raise on debt or as you -- one of the things it says on its website is that it's "trusted worldwide for upholding high standards of corporate governance. So, these allegations put that in a slightly different light, I think.
QUEST: Emily, keep watching this. I'll take this. Bit of bedtime reading. Emily Reuben.
Coming up next, signs of psychological dissolution of Europe. Those stirring words -- and strong words -- from Mario Monti of Italy that put pressure on Europe's strained relations. We'll have that after the break.
QUEST: QUEST MEANS BUSINESS, good evening.
QUEST: It maybe August and the summer, but the Italian prime minister, Mario Monti, has lit a fuse that has sparked outrage in Germany and exposed the frayed wires that are just about holding Europe together.
If you join me in the library, you'll see exactly what Mr. Monti was saying. It was in an interview with "Der Spiegel," the German newspaper. Now, he said the tensions that have accompanied the eurozone in recent years are already showing signs of a "psychological dissolution of Europe."
So, what did he mean about that? Was he saying, this psychological dissolution, that countries are now almost psychologically accepting that the eurozone may break apart? He said government had to educate their parliaments as they try to reach agreements on the eurozone futures.
Did Mario Monti speak a truth that dare not say its name? Well, if you turn to the German foreign minister, Guido Westerwelle, he didn't directly refer to Monti, but he did say arguments are taking on a very dangerous tone and, in his words, "we must be careful not to talk Europe down."
Whether they were talking Europe down or not, structurally and philosophically on the markets, it seems like -- look at that. This view that Spain is going to get some form of bailout eventually, that the government will -- Rajoy will ask for help, sent the market in Spain, the IBEX, up 4, nearly 4.5 percent. Good gains elsewhere, as well as the Milan MIB index.
Banks and mining shares were amongst the top performers, particularly in Italy, where S&P has reaffirmed the grading -- sorry, reaffirmed some of the banks -- 50 banks, 50 were downgraded.
Now, as we move to discuss what Westerwelle said and the reaction, of course, how it will be played out, Fred Pleitgen is with me now from Berlin. I'm guessing that Monti's "psychological dissolution" comment must have gone down rather badly in Berlin.
FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: Oh yes, it certainly did, Richard. There's a lot of German politicians who are firing back at Mario Monti, not just for talking about the "psychological disengagement -- or dissolution" of the eurozone, but also for talking about the role that German Parliament has in the whole bailout, where he was saying that politicians and especially governments need to have their parliaments under control.
A lot of German politicians are calling those remarks undemocratic, saying that absolutely their parliament needs to have a role in this whole bailout. Mario Monti has already clarified those remarks, however. He said he did not call for the undermining of national parliaments.
But I think one of the things that he's also talking about, when he talks about the eurozone sort of breaking apart, if you will, it's two things, really. The one thing is sort of the northern countries pitted against the southern countries, the ones that are financially stable and the ones that are actually having troubles.
But also, a new push towards nationalism, and that's certainly something that Guido Westerwelle is talking about today, but he also sees comments that German politicians have made in the past couple of days, Richard.
QUEST: Fred, look. Is this just the noise, the regular diet of noise and verbiage that we are hearing, or do we think this is going any further?
PLEITGEN: Well, I think Mario Monti is absolutely serious about what he's saying. On the other had, you have to look at the German politicians who are making some of these remarks.
One of them is a man called Markus Soeder, who's very well-known here in Germany. He's part of Angela Merkel's governing coalition of the Bavarian wing of the Christian Democratic Union.
He's someone who's known for very strong remarks, someone who's been called a rhetorical firebrand many, many times. He's the one who said that he believes that Greece will exit the eurozone, that Germany needs to make an example of Greece, and that no further taxpayer money should go to Greece.
You look at people also from the Liberal Democratic party here in this country, who are also saying that Greece going bankrupt is not something that would surprise them or that would worry them very much. So, certainly, a lot of it is due to the fact that politicians are trying to make noise during the summer break.
But nevertheless, there is a reason. If Germany's foreign minister comes out and says we really have to tone this debate down, he doesn't only mean Mario Monti. He also means politicians here in this country.
And it clearly shows that he's worried about where this is going and possible rifts that it's causing within Angela Merkel's government that of course is tasked with trying to save the euro, or is at least the most important player in it, Richard.
QUEST: That about sums the evening in politics from Berlin. Fred Pleitgen watching events there.
Now, it was unprecedented, it was unforgettable and, frankly, and it was almost unbelievable. It was a year ago today that S&P, Standard and Poor's, downgraded the United States' credit rating. It lost the triple-A, the vaulted -- or much vaunted triple-A.
Twelve months on, have the effects been as predicted? Well, if you take Treasury yields, absolutely not at all. A year ago, they were 2.3. Now, it's under 2, near 1.7 or so. They're at an all-time low. US government can borrow money cheaper than anybody else.
And the yields have fallen every month since the downgrade. Two reasons. Firstly, the Fed, of course, has been buying. And secondly, safe haven. They are the -- the Japanese have bought, the Chinese have bought, everybody is plowing in to US long bonds and, indeed, the banks, as well, with their surplus cash.
But, wind the deck and you still -- corporations still trusted. The triple-A US companies have kept hold of their status. Normally, if a country loses it, all those subordinate will often lose their triple-A as well.
That has not been the case here. Microsoft, ADP, J&J, have all kept their triple-As even though they could be parasitic upon the US triple-A.
Wind the deck. The dollar has continued to advance against the euro. This again, safe haven, euro weakness. All these issues take their toll. It's up 16 percent and, of course, it's the euro more than the dollar that's the story, here.
The Dow is more than 1,000 points higher than it was this time last year. Alison's at the New York Stock Exchange. I was in Washington. I covered the story a year ago. People said financial Armageddon, this was the fiscal cliff that happened. But a year on? The truth is, Alison, this is more a testament to issues elsewhere than what's happening in the US.
ALISON KOSIK, CNN CORRESPONDENT: Oh, yes. And that's an excellent point, Richard. Because you know what this really shows? It shows the debt ceiling crisis, it was pure politics, and the S&P downgrade may have been that as well.
Not to say it's been smooth sailing for US markets since last summer. But stocks are up for the year, and the Dow has recovered from last summer's losses. And investors for sure have not run from US debt. In fact, it's been the exact opposite.
One way of thinking about it, Richard, is things are worse in the rest of the world, and the US is just the prettiest ugly girl at the party. Richard?
QUEST: All right. But how much of that low, long bond rate, 1.7 or 1.65 or whatever it is on the 10-year bond, how much of that is really safe haven, and how much is technical factors? The Fed has been in the market buying bonds. Every bank's in the market buying bonds because of rates. So, the German -- sorry, the Japanese, the Chinese. There are technical reasons why the bond didn't suffer.
KOSIK: There are. But then, there's also the simplistic answer here, and that's investors still don't see a safer alternative to US Treasuries. You look at these interest rates, they're bargain-basement lows. So, when you look at it that way, it really -- you think about the downgrade, it didn't have any effect.
QUEST: OK. Has no effect. However, I have two words for you, Ms. Kosik, this Monday. "Fiscal cliff."
KOSIK: Yes. That would be bad for stocks for sure. We've already seen concerns about uncertainty in the second half of the year in some of the earnings reports we've gotten this season.
Even -- you look at even the months leading up to the fiscal cliff, they could be really bad for stocks, as well, because there's all that uncertainty over what Congress is going to do to limit the plan -- what Congress is going to do, and that could limit the plans companies can make, it puts a huge damper on consumer spending.
But all of this uncertainty means investors are still going to be looking for that safe haven, and chances are, that safe haven is going to be Treasury bonds. So, what could happen is, we could see these yields go even lower, even if another downgrade results from another round of Congressional inaction. So, the trend is lower when it comes to these yields, Richard.
QUEST: I might be contrariran, and I'll take you on on that on another day. Alison Kosik, who's in New York for us tonight.
QUEST: Tonight's Currency Conundrum, and it's all about the Mars rover. NASA's Curiosity touched down on the red planet earlier today. Our question, Currency Conundrum: why is there a penny onboard? A, for luck? B, as an instrument for scale? And C, to be left for future generations? A penny on Curiosity, later in the program, the answer.
The euro lost ground at $1.24. Sterling down against the dollar. The yen remains strong. Those are the rates --
QUEST: -- this is the break.
QUEST: You don't need me to tell you -- or if you do, you haven't been anywhere for the last few weeks -- here in London, nations are competing in the name of sport, and tonight on QUEST MEANS BUSINESS, we have our own Quest-athlon. We are competing in the name of economics.
It is the inaugural -- I think we need a cheer -- the inaugural Quest- athlon that we have here in London, where five of the top economies of the world are going to compete. We are going to put them through their paces over the next week.
We have the host, Great Britain. We have the next host, Rio 2016, from Brazil. China, which of course is the medal leader, the powerhouse. Germany, which is the eurozone powerhouse, whatever anyone might say. And the United States, which is still the world's number one economy and also, of course, the safe haven.
Now, you get five -- there are five economic events, five points, and there'll be one winner at the end of the week in our Quest-athlon.
So, today's, it is the event number one. Who wins the growth forecast, according to the IMF? Let's start with the United States. The United States comes in at, what? Two percent!
Great Britain has just two tenths of a percent. Germany comes in at 1 percent. Brazil, the next hosts, at 2.5 percent. But for today, China clearly wins. Clearly, China gets the first in our pentathlon, and as the -- the next one would be Brazil, and then it would be the United States. So, we go into tomorrow with China already racing ahead, like Usain Bolt, with 8 percent economic growth.
Plenty of other action going on at the Olympics this week. Becky Anderson is at the Olympic Park for us this evening. Good evening.
BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: A very good evening to you. And I thought I'd provide you with some sporting analogies for this economic story that you're looking at in your Quest-athlon, as it were. Roar from the crowd, perfect timing. I think it's the women's shot put going on behind me in the Olympic Stadium.
Let me just give you those five countries and give you a sense of where they stand in the medal count today. Let's kick off with China. Great growth numbers that you've just given us there. Topping the medal count with 31 golds and 54 medals in total, dominating, Richard, surprisingly in the diving.
Now, let's hope that that is not a sign of things to come for the global superpower, because when it comes to taking the plunge, China on course for a clean sweep in the diving competition. That would be terrible, wouldn't it, for the rest of the world, if they were headed for a plunge?
The US number two in the medal count, making waves in the pool, but when it comes to the sprints, the American athletes have been left wanting slightly. The Jamaicans by far the greatest sprinters, as we've seen. Certainly, the 100 meter dash both in the women's and men's. So, no short distance fix for the US economy if the Olympics is anything to go by.
GB, what can I say about the host nation? If the economy here was anything like as successful as the athletes have been at these host Games, we wouldn't be worrying about inflation or the risk of higher interest rates.
Or, perhaps we would be, in fact, we'd be worrying about them, because they would be looking at cutting off demand, cutting off this kind of growth in the economy. But we are looking here, as you and I know at a triple-dip recession.
ANDERSON: So, a lost decade of growth. Oh, my goodness. Top three for you. Doesn't really play out, does it?
QUEST: It -- well, now, you say it doesn't play out. You say it doesn't. But I'm -- a lot of us are spending a lot of time trying to find the correlation between economic growth and medal relationship, and you're right, your UK sort of seems to be the odd one out.
Becky, Usain Bolt. We won't go to the economics of that, but what a - - I mean, what a what a!
ANDERSON: Let's keep the economics at bay, shall we, tonight? Because that is one of the most electrifying performances. I had Donovan Bailey, the 1996 gold medal winner, with me just earlier on here.
Now, Usain Bolt at the Beijing Games broke his Olympic record, and then he went on to break his own Olympics record last night. It was an electrifying performance. You could -- should have heard the crowds here at the Olympic Stadium. Quite remarkable stuff.
And Yohan Blake coming in second, the Americans coming in third, fourth, and fifth, of course. But the Jamaicans out and out victors in this 100 meter dash, both in the men's and, of course, in the women's.
QUEST: I couldn't get out of my chair in the time he ran 100 meters. Becky Anderson with "Connect the World" later this evening from Olympic Park. We look forward to seeing you then.
In a week's time, it will all be over for the athletes, and that's when the next hard work starts for the people behind the scenes. Rio 2016 is just 14 -- four years away, I should say. I spoke to Max Siegel, the chief executive of US Track and Field, and asked him how he can keep the huge interest going in athletics beyond the Games.
MAX SIEGEL, CEO, USA TRACK AND FIELD: We'd like to capitalize on the momentum that the Olympics has and the platform that our athletes have, growing the sport across the world, and getting people engaged. And commercial partners is clearly a top priority for us.
So, the performance that the athletes have on this world stage and really just capitalizing on that and creating opportunities and really elevating our sport around the world is our top priority.
QUEST: How do you do that? Because we've certainly seen in the UK in the last few days a lot more interest, a lot more excitement. But ensuring that lasts beyond the Olympic flame in the cauldron is going to be more than just easy.
SIEGEL: Yes. For us, people do often look at track and field as a sport that happens every four years, but we have grassroots program with our youth throughout the country and really developing content, television properties.
We have very interesting athletes, both on the track and off. So, really, doing things to elevate our brand, tell the story of our athletes, and really develop their careers is important.
And on a yearly basis, the track and field meetings and really getting integrated into the community is something that I think will sustain us beyond the Olympic years.
QUEST: And as the chief exec, do you see it as part of your responsibility to encourage and to bring in more sponsors to build that link between business and sport? Which seems to only survive where success is involved.
SIEGEL: Well, absolutely. It is one of my top priorities and responsibilities to align ourselves with sponsors. And when you look at the sporting platform, it creates an opportunity for the sponsor to get exposure for their brand and support programs and our athletes.
And again, from the youth, where it starts, and develop from an athletic standpoint on the lifestyle stage, and certainly associating with some of the most dynamic athletes in the world. So, increasing those resources is really a top priority and responsibility of mine as the chief executive officer.
QUEST: That's the CEO of the Olympic track and field organization. After the break, is it a dark and stormy night? Knight Capital has found a way to carry on, though it didn't come easily. The deal is complicated, which brings in new parties, and we'll explain after this.
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.
We've been getting conflicting reports over the departure and whereabouts of Syria's prime minister. Riyad Hijab is the highest-profile official to leave the regime. An opposition spokesman says he defected and will be heading to Qatar soon. The Syrian government says he was sacked.
Meanwhile, opposition activists say violence in Syria has claimed a further 103 lives on Monday. We're told 30 of the victims died in Aleppo, the country's largest city.
Both Egypt and Israel have condemned an attack on an Egyptian army checkpoint near the border with Gaza in which 15 Egyptian soldiers were killed. Militants reportedly seized two armored vehicles, then drove them to a nearby crossing with Israel. Israel says its forces killed five of the gunmen.
U.S. authorities are learning more about the man they say opened fire at a Sikh temple in Wisconsin on Sunday. They say Wade Page was the only gunman and there was nothing in his background to suggest he might carry out such an atrocity. Police say Page killed six people, ranging in age from 39 to age 84.
Fans at London's Olympics Stadium are getting ready for another night of blazing speed. Now see the finals of the men's 400 meters and the men's 400-meter hurdles. James Kirani (sic) could be come Grenada's first-ever Olympic medallist, that is if he can break into the top three from the 400 meters.
QUEST: A group of U.S. investors has ridden to the rescue to save the Knight itself, Knight Capital, that is. The investors are coming up with $400 million and they will pick up the pieces of last week's catastrophic trading errors. It all comes at a high cost to the existing shareholders, who see their stakes highly diluted.
Maggie Lake's been following the story in New York and joins me now.
When they said last week that Knight needed capital, Maggie, did we really expect them to come up with the capital quite so quickly?
MAGGIE LAKE, CNN CORRESPONDENT: You know, I think it was a real risk. People were very concerned over the weekend, Richard, but I think the fact that they were able to do it shows that people really felt like this is a firm that needed to be saved to preserve the integrity of the market. Remember, they are a big market maker.
So take a look at the names who came into save them, TD Ameritrade, one of their biggest clients is one of them, along with Blackstone, big private equity player, global player; Stifel Nicolaus, Jefferies, both well-known, well respected boutique firms, investment financial firms, and GEICO is actually a competitor who does high-speed trading of itself.
It actually got some of the business last week. That is going to now shift back now that this group of investors actually is going to be a 70 percent owner. So this was a big deal. They got a big chunk of this company. They'll own 70 percent of the firm now and it was structured in a way that they basically got bonds that will enable them to buy shares valued at $1.50.
Remember, those shares were trading at $10 before this happened. They're going to get about $1.50. In an interview with CNBC earlier today, the CEO, Tom Joyce, just coming off knee surgery he had the day before this happened, if you could believe it, when he spoke to them, he defended the deal. Have a listen.
(BEGIN VIDEO CLIP)
TOM JOYCE, CEO, KNIGHT CAPITAL: The most important thing is we got our clients out of the way. We made the mistake, the mistake hit us. Fortunately, we were capitalized enough to handle the mistake. Now we have revamped capital structure. So we're inarguably better financial shape than we were maybe a week ago.
But the most important thing is we were looking out for our clients in a moment of stress. There was a problem. We took the consequences. None of our clients took the consequences. And importantly, the industry didn't suffer.
(END VIDEO CLIP)
LAKE: He was very clear on that distinction, that, yes, investors paid the price, but other clients of the firm did not. That was earlier today. Those shares about $3.12 now. That's still down 23 percent. Joyce also went on to say he doesn't think there's a need for congressional hearings.
And interestingly, in another interview later in the day, Stifel Nicolaus' CEO, one of the firms that bought in and came to the rescue, said that this is an industry that needs to take a step back and needs to pull back from the need for speed, all the emphasis on computer trading and focus more on stability. They acknowledge that (inaudible) are hurting investor confidence.
QUEST: They can acknowledge it all they like, Maggie. They are maybe not Stifel per se, but all these people involved are all part of the problem in the sense of they are pushing the -- they are pushing the boat as fast and hard as they can. Which one of them is going to be the first one to turn `round and say, yes, we'll go a bit slower? After you, please.
LAKE: You're right.
Here's the thing, though, Richard, you're absolutely right. It's all been about reducing costs and trying to get an edge up and make money. Listen, there's no shortage of headlines that sort of serve as evidence that banks will do anything to make a buck.
The problem is, when you look at the withdrawals from equity funds and equity mutual funds, it has been staggering. Investors have been pulling their money out by the billions. These had to look at that, and that is going to impact their industry.
So if you're the first to the finish line for an industry that's shrinking and dying, you're not going to win anything. So they're beginning to sort of at least talk about this openly in a way that they didn't when the flash crash happened. Are they converts? I'm skeptical myself. But it is a conversation that's starting to happen out in the open now.
QUEST: Maggie Lake, skeptical Lake in New York for us tonight. Good to see you as always. We'll talk more about this as we continue.
A giant leap forward in the hunt for life on Mars. This is a story that I don't care where you are at the moment, it's fascinating. A look at the NASA rover that might satisfy our scientific curiosity.
(BEGIN VIDEO CLIP)
QUEST (voice-over): The answer to the "Conundrum" question, why is there a penny on board the Mars rover? The answer is A, no, B, for scale. Especially selected 1909 Lincoln penny is attached to Curiosity's camera. It will be used to gauge the size of samples that the robot collects.
(END VIDEO CLIP)
QUEST: It took a fair few pennies to get Curiosity to Mars, $2.6 billion, to be precise. And it's took a half a billion kilometer journey.
Now a robot has touched down on Mars. Like something from the start of a Bond film, the car-sized vehicle was dropped from a crane, a sky crane. It was attached to the solar system's biggest supersonic parachute.
Its mission: to satisfy our curiosity and find out if Mars has ever been capable of supporting life. So that's what it -- but now it's on the -- well, on the moon; now it's on Mars. Join me at the CNN superscreen. And you'll see this is it.
So let's just take a bit -- let's first of all look at the size of this thing. It's about the size of a mini Cooper, so you get the idea, 2.8, 3 meters or so long, and it's four times heavier. So this is quite a hefty little beast.
But those wheels, are six of them, and they move independently which will allow for maximum maneuverability, which means it could take up to obstacles of 75 centimeters and 200 meters per day.
When you want to know about the power that it can do, it's got a nuclear battery -- nuclear, mind -- and it will last a Martian year, which is 687 Earth days, obviously about the time it takes for the Mars to -- well, you know, a Martian day, Martian years. It's 687 Earth days, and it will last. So it's going to last quite a long time.
And this is interesting as well. The toolkit on board, it has a hi- res camera, robotic arm and laser and 10 science instruments. All is this you get for your $2.5 billion, and of course, the amount of distance that it took to get up to Mars itself.
Curiosity has a full suite of sophisticated tools for exploring Mars, including the cameras and the lasers that can look at the composition of rock, many, many -- and send the pictures back many, many miles. Our correspondent John Zarrella is at the Jet Propulsion Laboratory in California, where this magnificent creature, from where it will be operated.
(BEGIN VIDEO CLIP)
JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): Seven long agonizing minutes in Mission Control the Mars Science Lab team could do nothing but wait for the signal to reach them from 154 million miles away. Then suddenly, euphoria and eruption of emotions.
UNIDENTIFIED MALE: Touchdown confirmed. Received (inaudible).
ZARRELLA (voice-over): The Curiosity rover, the centerpiece of this $2.5 billion mission was alive on the Martian surface. It had survived the harrowing seven-minute ride through the Martian atmosphere, an incredible image taken from an orbiting spacecraft shows Curiosity's parachute during the descent.
UNIDENTIFIED MALE: All those things that kept me and the rest of the team awake for years, we don't have to think about it. We don't have to dream about it anymore. We don't have to -- it doesn't have to haunt us everywhere we go. And so it's a great thrill and a great relief for all of us.
ZARRELLA (voice-over): Minutes later, the first picture, one of the rover's six wheels sitting on the surf, a blurry image taken through a dust cover to protect the lens during landing. The second, a tantalizing slice of the landing site, a place called the Gale Crater.
ZARRELLA (voice-over): In New York's Times Square, people watched and cheered as the landing drama unfolded. Here, the landing team stoked by the success.
. cheered and marched across the courtyard. Curiosity had threaded the needle, right on target, between a mountain inside the crater and the crater wall.
UNIDENTIFIED MALE: And if anybody has been harboring doubts about the status of U.S. leadership in space, well, there's a 1-ton automobile-sized piece of American ingenuity that is --
UNIDENTIFIED MALE: -- and it's sitting on the surface of Mars right now.
ZARRELLA (voice-over): The science team chose this spot because they believe that in the planet's ancient history, water might have flowed here, and it might have been a time when perhaps some sort of life existed here and might still. Curiosity does not have the ability to detect life, but it will hunt down the signatures, the building blocks of life -- water, carbon, methane gas.
JOHN GROTZINGER, MISSION MANAGER: It's a question that you can't help to ask yourself, you know, was there life there? Did it ever evolve? And that's the emotional part of it. Of course you hope it was there. It would be one of the greatest discoveries that we could ever make.
ZARRELLA: Then it's down to business, answering that age-old question, was Mars ever hospitable enough for life to have taken hold? John Zarrella, CNN, Pasadena, California.
(END VIDEO CLIP)
QUEST: The most extraordinary debate there has been around the world as these events have taken place, and the kind of technological advances which allowed us to land on Mars were also being used to enhance our own bodies.
Here in London there's a new exhibition which is looking at our drive to become natural and to overcome natural flaws, become superhuman. It's all taken on a new importance and prescience with the Olympics in the Bay (ph) City. I went along to see where we might end up.
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QUEST (voice-over): To see how far we can go, we've got to look back from where we've come.
LUKE CURRALL, PROJECT MANAGER, SUPERHUMAN: We start off with Icarus, and that gives us a story of hubris, of taking in enhancement, of taking winds to take a body to another form. But then taking it to a level where possibly you need to be a little bit more cautious, because Icarus ultimately crashes into the sea (inaudible) his father, Daedalus, escapes (inaudible) and uses his wings perfectly.
QUEST (voice-over): From Greek mythology to missions to Mars, it's the question of whether the age of the superhuman is upon us already.
CURRALL: It seems like something of comic book, a fantasy that, well, actually, we're kind of living that now. We have contact lenses. We have implants. We have someone like Professor Kevin Warrick (ph) from the University of Reading (ph), who had a microchip implanted in his body to communicate with his wife or to open doors or to turn on light switches.
So we are enhanced already. We are living this stuff of (inaudible) that some reason we kind of have a detachment to us, where we are at the moment in the planet. And as humanity.
QUEST: And yet we're still very small in other areas, aren't we?
CURRALL: We're very small in other areas. When you look at some of the interviews at the end, which still we're transhumanists in the (inaudible) era, the human body taking on technology and taking on microchips for using enhancements to become something where, you know, living for 100 years doesn't seem as an obstacle, the idea of immortality maybe isn't an obstacle, or the idea of having an unlimited amount of memories or intelligence, which is what an iPhone does as well. So already we have this kind of level of superhero kind of life.
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QUEST: Fascinating. More on that in a "Profitable Moment" at the end of the program.
Coming up next, British readers fall in love with ebooks as the steamy novel "Fifty Shades of Grey" heats up Kindle sales. Ooh, Mother!
QUEST: Ooh. You know, you can't beat a good book, whether it's a great bodice-ripper or perhaps it's a whodunit. Maybe you like a bit of non-fiction. Well, I've got news for you. Books as you and I once knew them are on their way out, gone. Kindles are taking over. Amazon's ebooks are outselling printed books in the U.K. and elsewhere.
There are 114 -- 114 ebooks sold for every one of the traditional one printed. Now it only took two years in the U.K. to reach this milestone, four in the U.S. So there is clearly a momentum. The snowball is going down the hill and it is gathering moss, to mix my metaphors.
Most popular author is "Fifty Shades of Grey," with the writer E.L. James. It's sold more than 2 million books in four months, 2 million. Think about how many that would have to take if it was on paper and binding. Isa Soares now takes a look at the book that seems to be changing habits worldwide.
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ISA SOARES, CNN CORRESPONDENT (voice-over): It's one of the hottest novels around in more ways than one.
UNIDENTIFIED MALE: Every time it comes in, it goes right back out.
SOARES (voice-over): And now, also the biggest book juggernaut since Harry Potter.
UNIDENTIFIED MALE: It's good for us that it's such a steamy hot seller.
SOARES (voice-over): The novel is "Fifty Shades of Grey," the romantic trilogy luring in millions of mostly female readers around the world.
AMANDA HAYWARD, THE WRITER'S COFFEESHOP: Basically moms have really taken this book on board and really just started talking about it at schools and in hushed sort of voices.
SOARES (voice-over): The trilogy, which tells the story of a 27-year- old billionaire and a college student is smashing records quicker than you can turn a page. In the U.K. and its overseas territories, it has sold more than 4 million copies in traditional and ebooks combined. In the U.S. and Canada, it's sold 50 million copies in the first three months it went on sale. Reports now put it close to the 20 million mark.
MARTEL MAXWELL, AUTHOR, "SCANDALOUS": There are so many critics who are quite snobbish about it and say, you know, it's never going to win a (inaudible). But that's now what E.L. James was intending to do ever. What she was intending to do was hook the reader, to titillate them, to turn them on.
SOARES (voice-over): The tantalizing, page-turning plot may entice women.
SOARES (voice-over): But it's electronic readers that's helped the more conservative readers sample the book unnoticed, and that started a trend.
SCOTT PACK, DIRECTOR OF DIGITAL, HARPER COLLINS: (Inaudible) if we decided to branch out and look at doing a whole imprint that just published erotic fiction, it launched with 15-20 titles and there are several new titles being added every month. So it's going to grow and grow.
SOARES (voice-over): To feed demand, mainstream publishers are launching digital-only erotic labels. Harper Collins in the U.K. only recently launched "Mischief Books." Its tagline, "Private pleasures with a handheld device."
E-readers are also fueling a different type of urge, self-publishing. "Fifty Shades of Grey" became a best seller without starting off with a traditional publisher. Now others are doing the same.
MAXWELL: Anyone can be an author, and the important thing is one person might like to (inaudible) and that's nice. As an author, you just want other people to read it.
SOARES: Even with the racy subject matter, what's most shocking to the publishing industry is the word-of-mouth buzz this book has generated, (inaudible) perhaps the business for books is no longer black and white -- perhaps a shade of gray -- Isa Soares, CNN, London.
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QUEST: Now as you know, I love a good book, and I've become quite attached to ebooks as well. Patricia McDonald says she just finished reading "Fifty Shades" trilogy on her Kindle great summer reading.
What'll you be taking on yours to the beach, to the seaside, up and maybe a bit of surfing? Are you a battered old paperback or do you love the crinkle of the paper? Or do you like something more modern?
The email address and the Twitter address as always, @richardquest -- @richardquest. That's also the place where you and I can have a good discussion, a dialogue and, believe me, as you can see on the computer, I look at all of them.
The tropics continue to heat up on both sides of the world. Jennifer is with us at the CNN World Weather Center. And parts of the Yucatan Peninsula are under a hurricane warning, hurricanes? I thought we were a bit soon for the hurricane season.
JENNIFER DELGADO, AMS METEOROLOGIST: No, absolutely for the Atlantic, we go all the way through November 30th. So we still have a ways to go. So I'll show you on the satellite, here is our tropical storm.
This is Ernesto, very likely to become a hurricane as we go later into the evening. You can see some of the rain trying to creep in right along the border of Honduras as well as Nicaragua. The winds right now, 102 kilometers. It's going to be moving over towards the west, as I said.
And here's the track of the system, very likely to get very close to the Yucatan Peninsula, right near the border of Mexico as well as Belize, as we head into early Wednesday. Now I also want to point out to you, 24 hours out, it's just to the north of Honduras.
So that means potentially we could see roughly about 13 centimeters of rainfall coming down across that region as it moves into the Yucatan, of course, we're really going to be concerned about the potential for some serious flooding lows there.
But here's an update right now on the warnings and the watches out there for the tropical storm warning area. You can see conditions are expected anywhere in blue for Honduras, for the warning that means conditions expected within 36 hours and Mexico is getting ready for this potential system.
So head towards their direction as I show you. And the Pacific Ocean, we have been following another tropical storm that has now become a typhoon. And this system right here affecting parts of Taiwan as well as even into Okinawa yesterday. The winds right now at 120.
Haikui right now is going to continue to move very slowly over towards the west. Right now it's located and say about 300 kilometers northeast of Taipei. Now 24 hours out, it's still offshore .
But it looks like this is going to make landfall as we head into Wednesday morning, very close, Richard, to the two storms that made landfall last work, the one we talked about the typhoon, the tropical storm right along China's coastline that happened on Friday within 24 hours of each other, well, this system right now looks like it's going to be heading towards the Zhejiang province, just to the south of Shanghai.
This whole area has really been dealing with a lot of flooding, an incredible amount of rainfall has been pulled out of this system, and talking about some heavy rain, still working into parts of Taiwan.
But I want to leave you update on the Olympics, so what's going to happen for the next three days? For Tuesday, we're talking a 40 percent chance of showers; Wednesday, a 30 percent chance of showers and then 20 on Thursday. So the plus side here is the numbers are going down, the chances from 40 to 20. That's a positive. And also have to (inaudible) -- hmm?
QUEST: Everything's been just fine so far. Many thanks --
When I come back, "Profitable Moment."
QUEST: Tonight's "Profitable Moment," in the past 24 hours we have witnessed two key moments of import. Usain Bolt once again became the first man in modern times to retain his title. He is the fastest man on Earth.
And then out of this Earth, under its supersonic parachute, the Curiosity rover landed on Mars. I have been fascinated by both stories all day, because they are both examples of achievement at the extremities of human endeavor.
Now, look, Bolt is not simply talented. He's the product of the very latest breakthrough in sports science, nutrition and training. And yet when it comes to landing on Mars, we're still novices. It took 10 years and $2.6 billion. And that's the state-of-the-art. And all we've done is land a small, highly sophisticated car on the surface of our next-door neighbor in space.
No matter what we have done, how much further we've got to go, we have barely taken the first steps, let alone run the 100 meters. It's a fascinating day for both (inaudible).
And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable.
QUEST: The news headlines at this hour.
We're getting conflicting reports about the departure and whereabouts of Syria's prime minister. Riyad Hijab is the highest-profile official to leave the regime. An opposition spokesman says he has defected and will be heading to Qatar some time soon. The Syrian government says he was sacked.
Meanwhile, opposition activists say violence in Syria has claimed 103 lives on Monday. We're told 30 of the victims died in Aleppo, the country's largest city.
Both Egypt and Israel have condemned an attack on an Egyptian army checkpoint near the border with Gaza, in which 15 Egyptian soldiers were killed. Militants reportedly seized two armored vehicles, then drove them to a nearby border crossing with Israel. Israel says its forces killed five of the gunmen.
President Obama says Americans would recoil against ethnicity as a motivation for Sunday's shooting at a Sikh temple in Wisconsin. U.S. authorities say there was nothing in the background of the alleged shooter, Wade Page, that would suggest that he might carry out such an attack.
You are up to date with the headlines at the top of the hour. Those are the stories we're watching for you on CNN. Now, live to New York and "AMANPOUR."