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QUEST MEANS BUSINESS
Standard Chartered Settles With New York Regulators; "Cost of Business"; Eurozone Economy Struggles; Eurozone Slowdown; Rajoy Coy on Spain Bailout; European Stocks Rise; US Stocks Up Slightly; Groupon Shares Plunge; Pound at Two-Week High; The Millennials: Childhood Ambitions Steer Future; In-Store Facial Recognition Cameras
Aired August 14, 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: In the last few minutes, Standard Chartered announced it's reached settlement with the New York regulators that's a penalty of $340 million. We'll have details in a second or two.
Also tonight, the core of the problem. Europe's strongest economies, they're not strong enough.
And New York to London in an hour. The US puts hypersonic dreams to the test.
I'm Richard Quest. We start a new week. And of course, I mean business.
Good evening. The e-mail is timed just 20 minutes ago. It comes from the DFS, which is the Department of Financial Services in New York. It announces that Standard Chartered has agreed a settlement with the regulators in New York over the alleged deals for Iranian banks, the sanction-busing deals of which they were accused.
The Department of Financial Services will receive $340 million from StanChart, and there will be monitors put into the bank for future details. Forgive me for reading, we have just literally got that.
It's the penalty of $340 million, monitors for two years. DFS examiners placed on the bank. And the bank, Standard Chartered, shall permanently install personnel in New York to oversee and audit offshore money laundering diligence. All this before StanChart's chief exec was to face hearings from regulators. Maggie Lake is in New York and joins me.
You're digesting this as fast and as furiously as I am. Is it game, set, and match to the regulator?
MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: For Benjamin Lawsky, certainly a vindication for him and for all the critics who accused him of sort of making these outlandish accusations to further his political career.
It would seem that, Richard, as you and I were talking right before we went to air, as part of this agreement, the parties have agreed that the issue involved transactions of at least $250 billion. You remember Standard Chartered at one point saying that it was more in the ballpark of $14 million. So, this very much along what Lawsky was saying, and it would seem to bolster, certainly, his case.
Standard Chartered investors will probably be relieved, even though it's $340 million, that it seems to be moving on and take some of the uncertainty out of it. $340 million not a lot of money for a company that in 2011 made record profits of something like $4.5 billion.
This may not be the end of the fines, we should point out. This is coming from New York state. It is possible that you will have federal fines being levied on top of that, so we should --
QUEST: OK. All right --
LAKE: -- emphasize that that isn't the final tally on that.
QUEST: Maggie, I'm -- let me jump in here, Maggie. Politically -- well, no. Practically, the rail politic of it, Peter Sands, the CEO, gets out with $340 million, he does not risk losing his license.
But politically, Standard Chartered said that the original complaint was a load of nonsense and that it was only $14 million. You don't get your checkbook out and write a check for $340 million now. This is -- this is embarrassing for Standard Chartered and a victory for the regulator. It's as simple as that, come on.
LAKE: Absolutely. But I'll tell you what is a failure, some would say, Richard, for other regulators. For the federal regulators in particular, who'd have decided not to go after criminal charges.
I want to read you something. I just got off the phone with a lawyer, someone who formally worked in enforcement with Treasury, has been around these circles for a long time, and he said, listen. This is absolutely indefensible when someone other than bank officials willingly, knowingly, repeatedly do this kind of conduct, they go to jail.
It seems there are different rules for banks, and we've moved from too big to fail to too big to be prosecuted. These are decisions that happen high up in Treasury and the Department of Justice, and there are questions that are going to be answered, Richard, why now you've seen six, seven banks admit to wrongdoing, to violating these sanctions, and not one bank official has been charged criminally.
This is not a good day for federal regulators. It might be a good day for Lawsky, Benjamin Lawsky, the state regulator, but not a good day for federal regulators.
QUEST: OK. So, we take -- so -- let's widen it out a little bit here, Maggie. We take Barclays paid -- I'm looking at the details to get them right. Barclays pays $450 million for libor. HSBC has set $700 million aside for money laundering. Now Standard Chartered, $340 million. We're in the billions here, and we ain't finished yet.
LAKE: But it is the cost of doing business --
LAKE: -- and it seems a cost --
LAKE: -- that they are willing to pay --
LAKE: -- if you listen to people who are critical of this, Richard. I don't think it deserves an "oh!" These people -- admit to wrongdoing, of breaking sanctions, of money laundering, and no one's going to jail. Really, name me another industry where that would happen.
QUEST: No, I'm agreeing with you. It's a -- but to call it a cost of business is a total injustice --
LAKE: Absolutely it's a cost of business. These banks made billions. They paid millions. $340 million is someone's compensation, an executive at a bank. This is not -- this is not crippling their ability to do business.
QUEST: I agree! I think we're on the same side, here. I'm saying it's an indictment of an industry when your "cost of business" is calculated as a fine versus the reputational damage.
LAKE: That's right. And we haven't seen the end to reputational damage, though, Richard. This is one thing that we've talked about, even when we were talking about the financial crisis and it wasn't in this area.
You can put a number on fines, you can take the charge. But what does it do to clients? There are some clients who don't want to be associated with this kind of behavior. That's going to be a cost that's much harder to sort of -- to pull out right now out of the headline. That's going to be something we tally up later.
QUEST: Maggie Lake's in New York. I think actually we both agree on this, we're both horrified that --
QUEST: -- that it did. Maggie, good to see you. Come -- listen. In the next hour while we're on air if there's any more to report on this, come straightaway back to us. We'll take you immediately --
LAKE: Will do.
QUEST: -- and live. The other big story we were planning to lead tonight's program on -- shows how things change in the space of five minutes or less -- Europe's road to recovery's taken a detour, and it's heading back into recession.
QUEST: The latest GDP numbers show eurozone contracting once again, and in some parts, the wheels may be coming off altogether. Join me at the super screen. Now. We've divided Europe into pretty much three groups: There's the Grows, the Slows, and the Woes.
So, if you take bearing in mind the total EU was minus 0.2 percent, so it's just about in recession again. The growing countries, Germany, Austria, and Slovakia, they show moderately strong growth. Forgive me, I'm just going to grab my notes so that I can put some detail into that for you.
If you take the German figure, 0.3 percent. Austria, also, just at 0.2 percent. So, they're the Growers, as such.
Now, the Slowers -- well, we need to talk about that. You've got Finland. Finland, which went negative by 1 percent. France, which is zero, stagnant, going nowhere. And Belgium, which is minus 0.5 percent.
And then, you've got those countries with the ongoing recession. These are quarterly numbers, and they are the Woe countries: Portugal, Spain, Italy, Greece. Greece's number -- this is from the GDP numbers -- if you look at Greece, they haven't reported for the quarter, but we know that overall it's going to be pretty grim.
So, the Woes, the Grows, and the Slows. And what's worrying here is the contagion. It is moving north. Every so slowly, it is actually now starting to go right into the heart of the rest of the eurozone, and that's the worrying part about it.
Many economists feel now only the European Central Bank can stop this. Gilles Moec is the co-head of European Economic Research at Deutsche Bank. The Grows, the Slows, and the Woes. I asked him if things are taking a turn for the worse.
GILLES MOEC, DEUTSCHE BANK: Yes. The risk is on the downside, especially for the northern European countries. Germany, surprised on the upside in Q2, but if you look at the latest soft data, it really points to a deterioration.
And we know that in France, for instance, which is in kind of a -- how to say? -- somewhere in between the south and the core, core countries, there's a turn toward more -- towards a tighter fiscal policy in the next few quarters. So, yes. It's clear to us that we have not hit the trough right now.
QUEST: But the point remains, if at some point somebody somewhere doesn't do something, this is going to go down the tubes.
MOEC: Yes, but the something -- we're closer to the something that you're alluding to than we were two months ago when this GDP was actually produced. The big difference to me in the positive response that we have right now is that we have a central bank which is now clear on its role as a lender of last resort, and this is, to me, a game changer.
It doesn't mean that we have all the ingredients. We still need Italy and Spain to formally request support, and we still have some legal issues to deal with in Germany waiting for the Constitutional Court decision on the 12th of September.
Thus, the fact that we had more than a consensus, an overwhelming majorities of the ECB's governing council to consider they were signed to up the game, gives a sense of security that we didn't have two months ago.
QUEST: Finally, you are putting an enormous amount of faith in that last ECB meeting and that they actually act in the future. The house is being bet on this, isn't it?
MOEC: As it was bet on the Fed's response to the duration and macro conditions last year in the US. There is no --
QUEST: But the Fed acted.
MOEC: -- sort of difference --
QUEST: The Fed acted. The Fed acted. The ECB dithered.
MOEC: The ECB forthcoming the result in what the ECB will do. I cannot believe that Mr. Draghi, who certainly is a very shrewd operator, took the risk in London on the 25th of July to be so straightforward in his communication and, again, during his press conference on the 2nd of August. I cannot think that he's not effectively ready to deliver, and to deliver what I would call a Big Bertha.
For him and for his institution in general, the loss in credibility of not acting on his communication would be absolutely disastrous.
QUEST: Gilles Moec talking to me earlier. Mariano Rajoy of Spain is waiting for the ECB's next move for deciding whether or not he's going to ask help from the EU. According to Mr. Rajoy, no decision has been made on fresh bailout funds. The Spanish prime minister will be meeting King Juan Carlos, and he says he is prepared to play the waiting game.
(BEGIN VIDEO CLIP)
MARIANO RAJOY, PRIME MINISTER OF SPAIN (through translator): When we have more clarity about what the ECB is planning to do, because they have many things to do, from buying bonds in the secondary market, or they can give loans to credit companies for them to buy public debt, all of them are possibilities that remain open. And until we know what decision the ECB has taken on this matter, we aren't going to take one, either.
(END VIDEO CLIP)
QUEST: Bearing in mind the disappointing numbers on the economy, you may wonder why the markets were all higher, particularly the German DAX -- Xetra DAX you see there twice on the screen. The GDP reading was marginally better than expected. Greece did have a good sale and raised more than $5 billion.
But the real reason, of course, is after you see the numbers of economic numbers and you see the market numbers, you start to believe people think the ECB will move sooner rather than later, and not a moment, perhaps, too soon.
In a moment, Wall Street. Investors also in a good mood. It is the summer. It's not too exciting. QUEST MEANS BUSINESS.
QUEST: US investors were heartened as well, today, after retail sales rose in July for the first time in four months. Alison's with us, as always, at the Stock Exchange to see that. Look, we don't want to get too excited at this point. You have 18, 19 points or something. It's hardly a rip-roaring session. But --
ALISON KOSIK, CNN CORRESPONDENT: I know.
QUEST: I know. But better than it could be.
KOSIK: Exactly. And you have to remember, there's thin trading, so you're not going to see much activity here with the markets, but let's focus on that retail sales report. There is good news in it. Sales rose 0.8 percent in July. As you said, it's the first increase, Richard, in four months. Finally, consumers are getting out there and spending money.
And you look at the report, you see demand rose across the board for everything from furniture to sporting goods. And basically, the hope is with this report, Richard, is that this means that he slowdown that we saw in GDP in the second quarter will just be temporary.
That is really the hope. Because you know that consumer spending is really the lion's share of economic activity here in the US. Richard?
QUEST: When I saw the Groupon results late last night, the first thing, of course, I thought, well, they did beat the expectations. But then I realized it was all special factors and one-offs. Underlying --
QUEST: You really -- the devil was in the detail. But they -- Groupon seemed confident.
KOSIK: It really is. Yes. But Wall Street's clearly worried. Just look at the price of this stock right now, just dropping like a rock. Groupon shares tumbling 27 percent. Shares are actually at a record low. They're sitting at $5.50 right now.
Wall Street's worried about Groupon, clearly, because, like Facebook, Richard, Groupon has a lot to prove as a newly public internet company. It's got to show it can grow its business and deliver consistent profit.
And here's one of the issues. Groupon gets more than half of its revenue from outside of North America. Most of it comes from Europe. And guess what? Europe has a really weak economy. And that really led to Groupon's lower sales growth, especially in the high-cost areas, like laser hair removal --
QUEST: All right.
KOSIK: -- luxury hotel stays. When times are stuff, you're not going to go run and get laser hair removal, Richard.
QUEST: All right. Alison, I've got a Currency Conundrum for you tonight that I want you to have a think about. Don't answer it. Only one woman has ever appeared on a US bank note. Martha Washington, Eleanor Roosevelt, or Elizabeth Truman?
There's absolutely no Googling for the answer on that. Which is the woman on a dollar bill? Martha Washington, Eleanor Roosevelt, Elizabeth Truman? I'll answer a little late later in the program.
The rates: sterling's at a two-week high against the dollar. Look at that, $1.50 -- nearly $1.57. It dropped a bit. Those are the numbers. The euro's around $1.23. Those are the rates --
QUEST: -- this is the break.
QUEST: Take a look at this picture, and particularly this young fellow. Well, he was only ten at the time, and it was the school choir. Recognize any similarity?
Anyway, if you look at the difference in the separation of generations, one thing is clear. Back then, I knew I wanted to work in broadcasting and I wanted to be a journalist. I wanted to do something similar to this.
Michael Burbach had his heart set on being an actor at about the same age. It's the drive that's pushing the Millennials into knowing what they want to do early on in life. And it goes to show, you make the choices in childhood that shape you, perhaps, for the rest of your life.
UNIDENTIFIED CORRESPONDENT (voice-over): From a young age, they've been told they're special. They can achieve whatever they set their mind to. Now, they're taking over the workforce and already gunning for that corner office. They're The Millennials, and this is their earlier years.
Michael Burbach has fond memories of his childhood.
MICHAEL BURBACH, ASPIRING ACTOR: I love this picture. It's me when I -- I guess I would be like three or four there -- and my dad, Tony. Best dad in the world.
UNIDENTIFIED CORRESPONDENT: Born in 1989 in the US state of Iowa, he grew up in a large family where noise and laughter were the order of the day.
BURBACH: This is my siblings when we were all little. My little sister and me. Older sister, older brother.
UNIDENTIFIED CORRESPONDENT: For Michael's parents, Tony and Mary --
MARY MURDOCH, MICHAEL'S MOTHER: When Michael was born, it turned our lives around.
UNIDENTIFIED CORRESPONDENT: -- Michael's birth was a godsend.
MURDOCH: About a month after I got pregnant with him, my husband Tony got cancer. So, the entire pregnancy was tough and radiation and going through just horrible stuff. So, it was kind of like when he was born, everything turned around for us. He was -- we call him our joy. He was our joy, our little joy baby.
UNIDENTIFIED CORRESPONDENT: Their little joy had surprised them twice over the years.
MURDOCH: Michael was always very creative and he always had a lot of passion. My mom said he had a zest for life, and I think that's true.
UNIDENTIFIED CORRESPONDENT: But like many parents, they always knew he was special.
MURDOCH: When he was in kindergarten, he took a liking to "The Wizard of Oz," and he watched the movie over and over. Actually, he was probably about three or four.
UNIDENTIFIED CORRESPONDENT: From then on in, Michael showed in interest in the spotlight.
BURBACH: This is me on the box of Kraft Macaroni and Cheese.
UNIDENTIFIED CORRESPONDENT: First as a model.
(BEGIN VIDEO CLIP)
BURBACH AS A CHILD: And when I saw it, I'm like, "Oh, my gosh." It's sort of -- it's really exciting, but then at the same time, it's like, I'm on the back of macaroni and cheese. It's so weird.
(END VIDEO CLIP)
UNIDENTIFIED CORRESPONDENT: Then as an artist.
MURDOCH: Michael drew a picture of a Chinese horse and won a contest for National Geographic. So, they're sending us to Hong Kong for a week.
UNIDENTIFIED CORRESPONDENT: Even at this ripe age of seven, his drive was noticeable.
UNIDENTIFIED FEMALE: Michael is very, I would say, intense as a first grader. He has a really high maturity level, and anything that interests him, he takes to the fullest.
UNIDENTIFIED CORRESPONDENT: Yet despite his parents' efforts to try new things --
TONY MURDOCH, MICHAEL'S FATHER: I tried a lot of different things, tried to get him in sports and stuff, and found out that his passion was the arts.
UNIDENTIFIED CORRESPONDENT: -- Michael knew exactly what he wanted.
(BEGIN VIDEO CLIP)
BURBACH AS A CHILD: I want to be an actor.
(END VIDEO CLIP)
UNIDENTIFIED CORRESPONDENT: He may have found inspiration from his parents.
M. MURDOCH: All along the way, I had been in community theater, so I dragged my kids to the theater. Whenever I had rehearsal, they'd be dragged along with me, so they kind of got to love the theater because I did so much community theater. So, I think he kind of got the bug there. Because by the time my show was over, usually he knew every line.
UNIDENTIFIED CORRESPONDENT: The confidence came from within. Soon, he started learning the skills.
M. MURDOH: He played the piano and did a lot of singing.
UNIDENTIFIED CORRESPONDENT: Now, in New York, all his hard work is starting to pay off.
BURBACH AS DEMETRIUS, "A MIDSUMMERSUMMER NIGHT'S DREAM": Where dost thou hide thy head?
UNIDENTIFIED CORRESPONDENT: His parents may be glad at the peace and quiet.
(VIDEO CLIP OF MICHAEL AS A CHILD SINGING)
M. MURDOCH: I'm sure the neighbors were shocked when he went off to college, because the show tunes weren't blasting from his room every day.
UNIDENTIFIED CORRESPONDENT: But deep down, they're anxious for their little boy, who's continuing to dream big.
M. MURDOCH: I'll say to him, I understand that's what you want, that's awesome, but you've got to find a way to do it, then. We've done our job. We've gotten you through college. Now, you've got to fly. You've got to make it work.
UNIDENTIFIED CORRESPONDENT: Next week on The Millennials. All work and no play.
MILISUTHANDO BONGELA, FASHION BLOGGER: There have been times when I've been -- I've said no to the human relationship because I was on a highway to success.
UNIDENTIFIED CORRESPONDENT: Milli and David tell us why they're putting their career before love. Only on The Millennials.
QUEST: And you can join The Millennial conversation online using the hash tag #cnnmills. And our thoughts on Millennials or apply to be a Millennial yourself, also @RichardQuest.
Now, the next story seems to be more relevant to Millennials than the privacy purists out there. An advertising agency is testing Face Deals, a system where in-store cameras can recognize you from Facebook. They take your picture -- obviously, they recognize the face, they get it to Facebook, and offer you personalized deals based on they know your likes and preferences.
Tim McMullen is the founder of the ad agency redpepper. He joins me now via Skype from Nashville. Tim, when we -- we had a discussion about this, have I basically got it right? There's a camera on the entrance to the shop. It looks at me, it can recognize me, it crosschecks it to Facebook, and you can tailor offers to me. Is that the gist of it?
TIM MCMULLEN, FOUNDER, REDPEPPER: That is the gist of it. Probably one small detail is we take pictures from Facebook and you allow them into the application. So, we don't actually source Facebook every single time. It's kind of like an application that you allow, and it pulls the photos in.
Once those photos are in, the imagery actually checks against those faced -- against those photos, not Facebook itself.
QUEST: Right. So, I have to opt in with this app. I basically give my Facebook pictures or give you access to my Facebook page, correct?
MCMULLEN: That is correct.
QUEST: Isn't this a -- I can see why in your limited case you are -- you've created a position where I have to give access. But you can see where when we go onto it, we're on a slippery slope here, aren't we, Tim?
MCMULLEN: I think as long as the -- I think there's always a comfort line that's sort of moving where people are comfortable with what they allow technology to do for themselves versus what -- what they allow it to do automatically versus do it themselves. And bringing facial recognition into it is one of those lines that I think is moving pretty quick.
QUEST: OK. And do you think there is an age gap difference between some middle-aged man like me that will recoil -- those of us over 50 will know what I'm talking about -- and the Millennials, the 22-to-30s, the 15- to-20-year-olds, who are much more relaxed on this issue of privacy online?
MCMULLEN: Well, I think there's -- it's not just privacy online, it's marketing privacy. People sign up for little cards, membership cards for their grocery store, and that at first was something people were very scared of, but now everybody in the States has a grocery card store -- a grocery card, and it tracks their preferences and sends them deals specific to them. And so, we're just using this similar concept.
QUEST: All right. Finally, would you encourage -- one of the big fears is ultimately, the opt-in clause will be buried on page 196, sub- paragraph 14, mini paragraph 11, on four web searches after three cups of tea.
MCMULLEN: Well, just to be clear, we're not Facebook, and this application is not affiliated with Facebook. So, you actually have to engage in the application itself to even have it work. So, the act of allowing the app to pull in photos and then you selecting and putting them, basically the little white box around your face -- there's so many -- that whole process is opting in. It's going to be very, very clear.
QUEST: We had a debate about it in the office. Tim, good to have you on the program. Come back. Once you -- once your test is over, come back and talk to us about it. Let us know more about it.
We had a good debate about his in the office and whether or not we thought -- @RichardQuest, of course, is the Twitter area, Twitter name where you can give me your thoughts. Would you happily have your face opt in so that a shop can recognize -- you get the idea.
When we come back, the experimental plane that's three times faster than Concord. Will we ever see it in my lifetime? In a moment.
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.
(BEGIN VIDEO CLIP)
QUEST (voice-over): Opposition activists say at least 70 people have been killed across Syria today. This video purported shows rebel fighters in the commercial center of Aleppo. Clashes have continued there for some time now for control of key districts. CNN can't independently verify the authenticity of the video.
The U.S. has lifted sanctions against the former prime minister of Syria. A Treasury statement says the action was taken because Riyad Hijab is no longer a senior official of the Syrian government. Hijab defected and fled to Jordan earlier this month.
Violence has claimed dozens of lives today across Afghanistan. Militant attacks and bombings in three provinces killed more than 40 people and injured more than 100. The Taliban is claiming responsibility for the most deadly attack that's happened in a usually quiet region.
French authorities say overnight clashes injured 17 police officers and damaged a number of public buildings in the northern city of Amiens. Local media are reporting that young people fired at police with buckshot fireworks and projectiles. The French president, Francois Hollande, is promising a tough response.
And as we've been reporting, Standard Chartered has agreed to pay $340 million to New York regulators over alleged illegal deals with Iranian banks. The bank reached a settlement for the Department of Financial Services a day before its chief executive was to face a hearing for the regulators.
The New York governor, Andrew Cuomo -- I beg your pardon -- says the result shows the effectiveness and leadership of the DFS.
QUEST: Not just about a minute (ph) from now, the last flight will be leaving from London heading to New York. It's about 8 o'clock at night; it takes eight hours, just about, to cross the Atlantic. Concorde used to get you there in three hours. Eight to three? In the future, it could take as little as one hour.
Today, somewhere off the California coast, an unmanned craft called the X-51A WaveRider will be dropped from the wing of a B-52 bomber. If all goes according to plan, it will fly for 300 seconds at Mach 6, six times the speed of sound before it crashes into the Pacific Ocean.
The WaveRider is being developed by U.S. military. I'm joined now from Washington by our Pentagon correspondent, Chris Lawrence.
Chris, this is exciting stuff, isn't it? I mean, you know, all right. Three hundred seconds at Mach 6 and crashes into the ocean. It's a long way from carrying my aching bones across the Atlantic. But Mr. Lawrence, it is a start.
CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Richard, as many times as you have been crammed on a transcontinental flight, you know what time means, you know, especially to a lot of weary business travelers out there. I mean, talk about three hours, imagine flying from Heathrow to JFK in 46 minutes, or Paris to Tokyo in 21/2 hours.
I mean, long-term, way long-term, it could revolutionize global travel. But right now, we're talking, again, about something that's unmanned. The Air Force would be absolutely thrilled if it stayed out there for five minutes. If it could get five minutes of flight, that would double the amount of time that the WaveRider has ever flown before. So they're still very much on baby steps right now.
QUEST: Baby steps -- now I know something about this sort of HTV (ph) technology or, you know, the principle. Does it -- is this one of these things that goes right the way up and it's then intended to go almost to the -- just about the extremity, almost ballistic to the extremity in space, and then come back the other side? Or is it going to be more conventional, it just goes a lot faster?
LAWRENCE: The idea eventually is to get it more conventional, because what the military wants is sort of a global strike capability without going nuclear. Right now the only thing that the United States and other nations have that can go this fast are long-range hydrogen bombs. Well, that carries all sorts of repercussions with retaliation.
This would be immediately identifiable as a non-nuclear attack. But the U.S. could conceivably strike in areas of, say, Russia or China at very, very short notice. So it has some very real military projections here.
QUEST: OK, Chris, the final last impossible question, because you know, what -- is anybody even remotely speculating as when or how this might ever come into commercial operation?
LAWRENCE: They are. I mean, you'd have to simply because of the way that it could transform global travel and the money to be made in that area. The problem is -- I've been talking to a couple of experts today.
They said with this hypersonic technology the problem is size. The smaller you make it, the better it works. The larger you make it, the worse it has tended to work. And so when you're talking about making it large enough to carry our bags and cargo and passengers, that's going to be a challenge. And it's probably going to be something our descendants are struggling with, probably 50-60-70 years from now.
QUEST: Right. Thank you. Thank you, Chris. By the way, if you see the defense secretary on your way out of the Pentagon, will you book a ticket for me on the first flight? Just tell him -- I'll send him -- my credit card is good.
Chris Lawrence is at the Pentagon.
LAWRENCE: (Inaudible) --
QUEST: Now -- oops, he's gone.
From hypersonic transport to one of these, just as difficult, maybe. Show any one of these, I'll tell you it's the famous black cab. It's a dependable London icon. Today, the wheels well and truly came off for its maker, the Manganese Bronze company. In a moment, the full story.
QUEST: Ah, welcome back to London; in this case, the meter is ticking. This, of course, is one of London's famous London cabs. Well, the company's called Manganese Bronze, has had a few problems of its own, a $6 million black hole. That's a hell of a -- that's a hell of a meter, taxi, $6 million.
The company lost a third of its value on Tuesday and it was all because of a part of it -- the company's own part, of course, by a Chinese company, Geely, and the problem -- the problem was an I.T. system that went badly wrong.
Now the share price has fallen dramatically in recent days because, of course, obviously, now people are wondering whether the cab is still going to be good for a ride. Well, when it comes to these cabs, Manganese Bronze has built 1,500 of them a year. They're not only used in London, they're used in around the world as well.
Still we get underway we have been to the manufacturer in Coventry to find out how they make them. Get the map.
(BEGIN VIDEO CLIP)
PAUL WILLIAMS, PRODUCTION SUPERVISOR, LONDON TAXI COMPANY: This is exactly how they arrive. They have cling film over the bodies not only as a protection but also to encapsulate the parts inside.
JOHN RUSSELL, CEO, MANGANESE BRONZE: We took the decision to bring the bodies from Shanghai because we had a new set of tooling there, which was a significant improvement on the tooling we had in Coventry. And economically it made no sense to build the bodies in two locations.
UNIDENTIFIED MALE: This is the green room area. The fellows here can see if there any issues with the metalwork. So it actually highlights the high spots or the deficiencies in the metal.
The process of painting one cab will take 50 (ph) minutes. That includes the main body and the detail bit as well. After the paint process, we go into the lacquer booth, a similar process. It's just spraying over the lacquer, which protects the paint work. That's a 50 (ph) minute process. And then it goes into the oven for another 50 (ph) minute process of drying up.
UNIDENTIFIED MALE: There's roughly 10 of these cabs put together every day over a four-day period. So we do 40 for the week.
WILLIAMS: At this point, this is the end of the first part of the assembly process. What we do then is we use a hoist which transfers the body onto the chassis.
(Inaudible) the chassis is. At this point, there's a number of location points that we use to locate the shell onto the chassis. This is nine operators on this track, and they all have 50 (ph) minutes of work. So it's quite a -- it's quite a skill process.
This is the final part of the assembly area, and this is where the bigger panels get fitted. So you get all the seats, you get the carpets, you get the -- a lot of the print (ph) interior, the drivers (ph), you know, the steering wheel and the driver's seat. All that is fitted.
RUSSELL: I think we just love to take this great icon that is so valued and appreciated and admired throughout the world, and actually take it to as many cities in the world as we can.
(END VIDEO CLIP)
QUEST: The London taxi -- Bill (ph), the driver. (Inaudible) a bit embarrassed. (Inaudible). Don't worry about it. (Inaudible). I'll send somebody down to see you right. Tomorrow, yes, tomorrow. My, yes (ph).
Now, as you can see, glorious evening in London. I'm not trying to do her job for her, but with this spectacular summer evening, even though there's no Olympics any more, Jill Brown's at the World Weather Center.
And the only question is, Jill, before you tell us anything else, is this going to continue?
JILL BROWN, AMS METEOROLOGIST: Yes, I think we've got a little more we can squeeze out of it before some storms come in. Sometimes that's the best way to check the weather, is just look out the window and see how it looks right now.
But what's coming up, of course, is always the next question. (Inaudible) high pressure here and warmer than average temperatures, good holiday weather all along the Mediterranean. Look at Rome, 34, a little on the toasty side. Paris is warm as well, London, beautiful evening and a nice day expected again tomorrow.
But we do have some storms lurking to the west with an area of low pressure here. And then look at this one. You can really see the spin. In between is that big (inaudible) of high pressure where you see the sunshine. And it will last.
But here's what we think is coming up in the next couple of days as this area of low pressure starts to spin up. We could see some isolated thunderstorms, northern and western sections of Spain as well as France over here, Belarus. Looks like we might see some thunderstorms as well, maybe into eastern Poland.
OK. This low just kind of weakens but doesn't really move. Then this area of low pressure is going to spin that front in. So it may take a little time. It may not be an all-day rain, but it looks across France and then heading up into Germany a chance of some rain and some thunderstorms maybe, a little bit of severe weather.
Speaking of severe weather, we have had that for sure as we head up toward the Philippines, where it was just about a week ago where we had very heavy rain and flooding problems. And the past 24 hours, look at the rain that we have had, 89 millimeters to over 200.
And here's the culprit. You can see -- you hardly tell what you're looking at on the map because it's covered with this huge mass of convection that associated with this tropical storm. Last report from the joint (inaudible) warning center is it has made landfall in northeastern sections of Luzon. So the center of circulation is over land. That will weaken in a little bit.
After that, it's going to head out over open water and probably gradually getting a little bit more strength. But the real concern immediately is the amount of rain that we will get in an area we've already had some severe flooding in the past week. A lot of folks are out of their home and it looks like more flooding is on the way. We could see several centimeters of rain.
After that, here we go, again, it'll pass over the northern Philippines and then over the open water. It's going to get a chance very warm water, so it's going to get a chance to strengthen, perhaps to typhoon level before making landfall late in the week east of Hong Kong, perhaps about Friday morning. It's far enough out that we'll have to keep an eye on it.
Across Japan, we also had some heavy rain in the last 24 hours. And that wasn't associated with a tropical system, just a slow-moving front. And there's another on the way, so one moving out. Here comes the next one across Korea and Japan. We have the chance of more heavy rain and the next day or so, Richard, back to you.
QUEST: Many thanks for that. (Inaudible) somewhere. Or maybe we were both just dreaming.
Coming up next on QUEST MEANS BUSINESS, a look at the trailblazing life. There was only one original "Cosmo" girl. She's Helen Gurley Brown. And after the break, we'll remember her legacy.
(BEGIN VIDEO CLIP)
QUEST (voice-over): The answer to today's "Currency Conundrum," who was the only woman ever to appear on a U.S. banknote? Martha Washington. Her portrait featured on the $1 bill or silver certificate, as was known, in 1886, 1891 and 1896. No other woman has been on a U.S. note in the entire 20th century. I'm sure that is one fact that must have absolutely riled Helen Gurley Brown.
(END VIDEO CLIP)
QUEST: She, of course, the pioneering editor of "Cosmo." And Ms. Gurley Brown died at the age of 90. Her career took off -- now here's the fact. Helen Gurley Brown's career began on the year I was born in 1962 with her first book, which pleased and appalled feminists with her book, "Sex and the Single Girl."
The book was followed by 31-year career, transforming "Cosmopolitan" into what it is today, and it made her a force for women. Before she got to "Cosmo," the magazine was about to fold.
(BEGIN VIDEO CLIP)
HELEN GURLEY BROWN, FORMER EDITOR, "COSMOPOLITAN": I stopped working for a while to write books, but I was getting all this mail from a whole lot of constituents out there, because at the time, there wasn't anybody giving advice to single girls.
If you were having sex with a man of any persuasion, you were supposed to go throw yourself in Grand Canyon or put your head in the oven or get it over with. And I just said that wasn't the case. So I'm getting, you know, single women were having a good sex life, probably better than their married friends and they --
LARRY KING, TV JOURNALIST: Really, Helen?
BROWN: Yes. And they weren't in bad trouble at all. So I'm getting so much mail, David said, "Why don't you try to start a magazine?" We didn't know you couldn't do that.
So we did up a format and it got across town to "Cosmo," which was failing, and they said we could try the format on their old, dying magazine.
(END VIDEO CLIP)
QUEST: Helen Gurley Brown told women they could have it all, love, sex, money, careers. But it would not be effortless.
"Get up and do it if it needs to be done, even if you hate it."
"The only thing that separates successful from people from the ones who aren't is the willingness very, very hard."
And I love -- this is my motto -- "Money, if it does not bring you happiness, will at least help you be miserable in comfort."
Kate White is the current editor in chief of Cosmo U.S. She joins me now from New York.
A celebration of the life of Helen Gurley Brown -- what do you think was her biggest and most significant contribution for women?
KATE WHITE, EDITOR IN CHIEF, COSMOPOLITAN MAGAZINE U.S.: I think she absolutely ushered in the sexual revolution in conjunction with an empowerment for women. And they went hand in hand. You could have the job you wanted, the career you wanted and the sex life you wanted.
And up until that point, as Helen said, if you were having sex, you'd throw yourself into the Grand Canyon if you weren't married, because you were ashamed of it. But she told women you can have sex and enjoy it.
QUEST: And the fascinating part is this contradiction. She was feminist because she told people you could have it, and some would say she was anti-feminist because she also promoted the whole idea of using the beauty and womanly charms when it came to pay or to need to be.
WHITE: Right, that man-pleasing aspect of "Cosmo." But I think in hindsight what she did was assure women that if you did go after what you wanted in terms of your career, it didn't mean that you had to give up men.
And I think early on in the feminist movement, there were some women that worried that you'd have to make that sacrifice. And she basically was saying that men should be a part of your life if that's what you wanted.
QUEST: I have to say, it's not very often on QUEST MEANS BUSINESS we get to discuss sex in such -- in such exciting detail. Who knew that this could be so interesting in the business world?
WHITE: Well, you know, if you were a marketer, she had such an important lesson, because she said if you tap into your consumers' needs -- and she really listened to women -- and you come up with a unique selling position, and you stick with it, you can make an awful lot of money. And that's exactly what she did.
"Cosmo" today, of course, have made many changes. But the DNA is the same, and that's why we're number one in terms of magazines in the U.S. and also worldwide with women; 64 editions of "Cosmo" around the world.
QUEST: Sixty-four editions? And Helen Gurley Brown, in many ways, was the instigator of much of it. Many thanks indeed. Thank you so much for coming on the program --
WHITE: Thanks for having me.
QUEST: -- giving us a chance to explore these issues that we often don't normally talk about. I appreciate it.
QUEST: The editor in chief of Cosmo U.S. on the, of course, Helen Gurley Brown, who I actually met and interviewed just once in her office in New York. She must have been in her late `60s, early `70s. But the dynamo and power of that woman and femininity at the same time, it simply was overwhelming.
I'll have a "Profitable Moment" on some more Eurozone material after the break.
QUEST: I was tempted to do tonight's "Profitable Moment" about Helen Gurley Brown and her legacy for women. But frankly, even I'm not that brave. So instead, let's go to our usual bailiwick.
Tonight's "Profitable Moment," there were 27 members of the European Union, and of those that have reported second quarter numbers so far, 10 are either stagnant or contracting. Seven have yet to report and 10 more are growing. What an indictment of economic policy four years after the crisis began.
Some countries have seen negative growth for three or four quarters, and even Germany's now sputtering. Contagion is rolling across the continent. While we digest these numbers, the political leaders are planning their travels again, Monti on the move, Rajoy on the road, Merkel covering miles. What are they talking about? The issues are well-known. The problem's everlasting.
In 1944, it took the Bretton Woods Conference just three weeks to restructure the global financial system. Back then, there was political will and leadership. In Europe, we have neither. 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 headlines: Standard Chartered, the bank, has agreed to pay $340 million to New York regulators over alleged illegal deals with Iranian banks. The settlement was reached with the Department of Financial Services just a day before the chief exec was to face the regulators.
New York's Governor Andrew Cuomo says the result shows effectiveness and leadership.
Opposition activists say at least 70 people have been killed across Syria today. This video purportedly shows rebel fighters in the commercial center of Aleppo. Clashes have continued for some time now. CNN can't independently verify the authenticity of the video.
Violence has claimed dozens of lives across Afghanistan. Militant attacks and bombings in three provinces killed more than 40 people and injured 100 more . The Taliban is claiming responsibility for the most deadly attack that's happened in a usually quiet region.
French authorities say overnight clashes injured 17 police officers and damaged a number of public buildings in Amiens. Local media report that young people fired at police with buckshot and fireworks. The French president, Francois Hollande, is promising a tough response.
You are up to date with the headlines at this hour. Now, to New York and "AMANPOUR."