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QUEST MEANS BUSINESS
Antony Jenkins Named New Barclays CEO; France and Spain Committed to the Euro; Merkel in talks with the Chinese Premier, Wen Jiabao, Wall Streeters Await News From Bernanke from Symposium Discussion; Mexico Suffers Egg Shortage; Iran Ramping up Nuclear Program; South African Miners Charged With Murder
Aired August 30, 2012 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NINA DOS SANTOS, CNN ANCHOR: Less sparkle, more scruple, Barclays changes direction with Bob Diamond's replacement. Small step toward a big solution. (INAUDIBLE) for new calls for ACD action. And, ask me anything. Obama opens up online to woo the tech crowd.
Hello Nina Dos Santos. This is QUEST MEANS BUSINESS. Good evening. Well, the corner office at Barclays has a new name on the door. Antony Jenkins has been named the bank's new chief executive officer and now he has to deal with the aftermath of, of course, that crisis that forced his predecessor, Bob Diamond out. Now Jenkins already has a new potential scandal at the company, and our very own Jim Bolden is here to tell us what we know about Antony Jenkins. Take it away.
JIM BOLDEN, CNN CORRESPONDENT: Well, I have to say, we don't know a lot about him. I don't think you could be mistaken to say that you haven't heard of this guy, but let's look at -- look at his resume, his CV.
Well, Antony Jenkins has been at Barclays for a very long time. He has been dealing with the retail banking. Maybe some would say the (INAUDIBLE) or boring side of banking. I think that's what the board was looking for. For instance, he used to run the Barclay Card branch of Barclays. This is a very successful credit card, Nina.
DOS SANTOS: It certainly is. The other thing I want to talk about, Tim, next is the kind of legacy that has been left with him. Plenty in his in box, I would have thought.
BOLDEN: If you remember, he's going to make $1.7 million, a lot less than Bob Diamond. But Bob Diamond has left him a very full in box. I think there are a couple of things here. Well the most important will be that he has to deal with building the reputation of Barclays back up. And he said today -- Jenkins said that he has a unique opportunity to restore Barclays reputation, but he said that journey will take a long time, and there's a lot to do. Boy, he's right about that.
DOS SANTOS: Yeah, and a lot of people are already saying given the fact that he's a retail guy, that in itself helps to restore Barclays reputation. But it's customers -- what about that waste paper basket there? It's looking suspiciously empty, but I bet it's really full.
BOLDEN: The former investment banker, Bob Diamond, has left a lot of things for Jenkins that he would like to see put in the bin as soon as possible. We all know about the Libor scandal. That's, of course, what cost the job of Diamond and the outgoing chairman.
But last night, we also learned that there's a serious fall off this investigation. This is the part of the government that only investigates extremely serious fraud allegations and possible criminal allegations. And what we've learned is that Barclays is now under investigation for certain payments made when the country of Qatar invested $3 billion into Barclays in 2008.
Now we're not saying that we know any more about that because Barclays hasn't said any more. The SFO hasn't said any more. But it does mean that there are now two issues that the new CEO has to handle.
DOS SANTOS: Yeah, he certainly has got his work cut out, doesn't he? He's not the only person to be joining the helm of Barclays. We've got a new chairman as well for new management here in the top position. So Barclays is going to look pretty different in the future, isn't it?
BOLDEN: I think that's the whole point of it, isn't it -- a clean slate, but also a retail guy coming in to say, look, we're going to focus more on investors; we're going to focus more on the customers; we're going to focus more on the Barclays you and I see every day, which is the high street banking and the credit cards.
But still, it's a huge bank around the world that has a lot of influence in Africa, the U.S. and so that's not going to change. But what we will see is maybe Jenkins putting a different face on it than we saw with the American, Bob Diamond.
DOS SANTOS: That's right. He's likely to be less flamboyant, isn't he, one would have thought, Jim?
BOLDEN: Yeah, you know, I'm stressing all day, you know, British- born, been with the bank for a very long time, somebody who's worked on the executive committee, somebody the bank knows very well, so internally, the 140,000 people who work at Barclays will say, we're not being led by a guy who knows what it is that we do.
And he's also telling them, I think, we're going to be looking at the retail side. We're going to be looking at all these other things that Barclays should be doing better.
DOS SANTOS: Great stuff. Jim Bolden here in our London Studio. Thanks so much for bringing us that and (INAUDIBLE) there of Mr. Jenkins.
Well, Brian Caplen is the editor of "The Banker" magazine, and he told me that the appointment of Antony Jenkins is basically a fresh start for Barclays and from here on the only way is up.
BRIAN CAPLEN, EDITOR, "THE BANKER:" I think for some time you've had some bankers who've hid behind this idea that their business is much too complex for anybody outside of it to understand. I think it'll be very refreshing for somebody to come in, intelligent guy, long track record in banking broadly, and say, well, what about this business, you know. Does this work? Does this make money? Do we need to keep this? Do we need to do this and that?
I think it'll be a fresh start for Barclays having someone like him in charge.
DOS SANTOS: Yeah, they might have a new CEO and a new chairman coming in, but not entirely a clean slate because, of course, they've got the serious fraud (INAUDIBLE) investigation as well.
CAPLEN: That's right. Definitely that's got some where to run, and it is very serious. Barclays were first coming out of the woodwork with the Libor stuff, so in some ways, that's out the way. Again, I think in some senses you might say Antony Jenkins has got a bit of an advantage in the bad news is out there, and things are pretty dire at Barclays at the moment.
So you can say the best way he can take it -- the only way he can take it really is up.
DOS SANTOS: How significant is it from a political point of view in terms of Barclays' image with the government that they have somebody who's a retail man at the helm here?
CAPLEN: I think it's very significant because the view of the public and politicians is that it's the investment bankers that got the banks into trouble and brought down the economy. And the word has gone out that we want to see a more consumer-focused retail banking model.
So someone from the retail side like Antony Jenkins is the right guy to guide those kinds of changes.
DOS SANTOS: What kind of direction do you think that the two new people at the helm of Barclays will be taking this company in?
CAPLEN: They've got to find a way to make the thing make money, all right? That's the problem in banking at the moment. The returns on capital that we saw at banks, you know, in the run for the crisis were just phenomenal.
Now, we're seeing very meager returns across the board so they've got to find a way of making it make money at the time as the regulations are asking them to hold more capital and economies are hardly growing at all. So that's a major, major challenge, which every bank faces.
DOS SANTOS: But are we going to see a completely different type of Barclays emerging from all of this, perhaps slightly more stayed, less aggressive bank that is more reluctant to push the boundaries as it was during Bob Diamond's time in bat.
As Bob Diamond has famously said repeatedly, help to steer them out of government hands during the crisis and also help to make them a lot of money during the bull years.
CAPLEN: Well, I think it's contentious as to whether it really helped them stay out of the government bailouts, but definitely it makes money for them. But it's not going to make money for their future because the regulators now have stamped down on that sort of excessive trading culture.
DOS SANTOS: Do you think people want to see a different type of bank these days, perhaps, to be frank, a more boring bank that just does what it says on the (INAUDIBLE).
CAPLEN: That's absolutely right. Boring is good in banking these days. People would like that. But clearly, the banks have got a do a number of things. They've got to recover the public's trust in them with things that people find attractive savings in investment products that people want to buy.
And they've got to do this, again, all of the time when the regulators are stamping down on them and making it more difficult saying you've got to have more capital. You've got to be more careful in dealing with consumers. Barclays does have some advantages in that it also has some big overseas retail franchises. It has a very big franchise in South Africa, a fast-growing emerging market, right? So that's going to help. It's got good operations in Africa, other parts of the world. But it's still a big, big challenge.
DOS SANTOS: Brian Caplen there, the editor of "The Banker" magazine, speaking to me earlier today.
Let's take a closer look now what Antony Jenkins is actually getting paid to get a grip on things at Barclays. As Jim Bolden was just mentioning before, the new CEO's base salary is $1.7 million per year, plus he'll also receive a bonus of more than $4 million on top of that. That's modest in comparison to his predecessor's take-home pay, perhaps another sign some say that the culture surrounding executive salaries these days is shifting.
And no one knows that better than the head of the advertising agency, WPP. Martin Sorrell talked to CNN about the companies shareholders basically rejecting his $11 million pay deal.
MARTIN SORRELL, CEO, WPP: Clearly, the consultation process with the institutions which took place actually in the previous year was cut off ironically because of discussing it in the media or the media newspapers were discussing it. And the board felt that it wasn't appropriate to have those sort of discussions if they were continued to be leaked.
So I think that was a mistake, and that consultation process should have gone on. That consultation process is now going on. I think in fact that it is still going on, and we'll see what comes out of it.
DOS SANTOS: Some shareholders say that pay should go hand in hand with performance. And speaking of which, WPP is actually cutting it's annual revenue growth forecast. The world's biggest advertising agency now says that clients in the United States and in Western Europe are just becoming more cautious about spending money.
WPP, which owns the Gray Group and also (INAUDIBLE) agencies, says that sales will grow about 3 and a half percent this year. That's down from a previous forecast of 4 percent for the period. Shares of WPP, as you can see, they're flipped around about 1 and a half percent in Thursday's trading session on London.
Up next, (INAUDIBLE) debt crisis intensifies (INAUDIBLE) cry for help.
DOS SANTOS: (INAUDIBLE), the leaders of France and Spain, say that they're committed to the irreversibility of the Euro. After the meeting, Spanish Prime Minister Mariano Rajoy said that he's not ready to ask for a full-blown bailout at the moment. Instead, he's urging the European Central Bank to help lower spiking borrowing costs with the country to unlimited bond buying purchases.
His first official visit to Spain, the French President Francois Hollande also offered his support to countries like Spain, acknowledging that the countries borrowing costs are just too high at the moment. And he said the ECV has a duty to intervene.
FRANCOIS HOLLANDE, PRESIDENT OF FRANCE (through translator): One of the missions of the European Central Bank is the price stability. Another ECB mission is the monetary policy. When you see such wide gaps in yields without a justification from the economic point of view, I think that could be a justification for an intervention in the name of monetary policy.
DOS SANTOS: Well, today the region of Valencia announced that it's going to be seeking $5.6 billion to cover its bills, more than previously indicated by that region. And it's just exemplified by the fact that Spain's 17 autonomous regions are buckling under the strain of their increasing debts these days.
And this chart gives you an idea of some of the big ones. But of course, a lot of these regions have hefty debts as well, starting out with Catalonia. As you can see here, this has an economy as big as neighboring Portugal in terms of its total size. This region asked for $6.2 billion Tuesday from the emergency fund.
Then, what we're expecting is Castile La Mancha, near Madrid, to ask for help next. That's what a lot of people have said might happen. This region, remember, posted the worst regional deficit last year out of any of the regions in Spain.
This kind of financial help will be coming from a $22.5 billion bailout fund or emergency liquidity provision as it's being dumped in Spain, and some of that money will actually be coming from the Spanish lottery fund. As you can see, some of the other big black holes in the finances include Andalusia were just shy of $18 billion worth of debt. Even Galicia up there in the North West has nearly $9 billion.
Well, economic confidence as you'd expect with these color figures is falling in Europe. The European Commission's own economic sentiment index actually fell by two points in August to a reading of 87, and as you'd expect, well the drop was most pronounced in places like Spain.
Its own individual index was down nearly five points. And the UK sentiment also fell by around about three points as well, but I must point out that the job wasn't totally universal because what we saw was in places like France, the gauge actually rose by nearly half a point.
Let's have a look at how the stock markets across Europe closed this Thursday. What we saw was more or less red arrows across the board after yesterdays mixed performance. And look at these losses coming from all of the various sectors. Mining (ph) shares (ph) particularly hardly hit. (INAUDIBLE) and Anglo American each losing about 3 percent.
Those are stocks that are listed on the London FTSE 100, and as you can see the FTSE posting another day of declines on the (INAUDIBLE).
(INAUDIBLE) was one of the worst performers in Spain, falling by just over 3 percent as I was saying. The region of Valencia asking for financial help after Catalonia just doesn't help when it comes to investor confidence these days.
Well China has pledge to keep investing in Europe despite the region's deepening debt crisis. It's precisely the kind of reassurance that the German chancellor Angela Merkel has been wanting to hear. She's been in talks with the Chinese Premier, Wen Jiabao, to convince him that Europe is committed to fixing its ongoing debt crisis.
As Stan Grant reports, Mrs. Merkel's trip to Beijing has already provided some pretty valuable deals.
STAN GRANT, CNN SENIOR INTERNATIONAL CORRESPONDENT: Germany and China need each other. That is the bottom line. Last year, they did about $170 billion in trade, and those expected to rise even more. They've just done a deal for Germany to sell 50 Airbus planes to China. That's worth $3.5 billion.
China, of course, is the biggest economy in it's region, Germany the biggest economy in Europe. At the same time, though, China is concerned about the ongoing European debt crisis. Chancellor Angela Merkel comes here to try to see if China will use its very deep pockets, its enormous reserves of currency and wealth to be able to help out with that problem.
The problem for China, though, is that it's concerned about just how serious the countries are in Europe with tackling this problem. It's worried about Greece pulling out of the Euro. It's also concerned about whether Italy and Spain are prepared to take the spending measures to pull back on their spending enough to be able to make differences in their economy.
But there is a lot riding on this for China. China needs markets to sell into. It's an export-driven economy here, and Europe when you take Europe as a whole, it is China's biggest export market, bigger than the United States.
China has been affected by the slow down in Europe. It's meant that the economy here has started to pull back as well. In fact, it's growing as one of its slowest rates in many, many years. So China has an incentive to be able to help out with Europe. Its concern, though, about whether how serious Europe is in tackling its own problems.
At the moment, though, China does hold many billions of dollars in European bonds. Away from the economy, now there is expected to be talks at a high level between Angela Merkel and President Hu Jintao here in China. She's also expected to meet the potential or the likely incoming president when they have a leadership transition here later, Xi Jinping.
And away from economic issues of course is that ongoing concern about Syria, and China's move so far to veto any U.N. moves to be able to bring that situation under control. Those discussions likely to happen behind closed doors. As far as everything else, it's all about the economy. It's all about trade. Stan Grant, CNN, Beijing.
DOS SANTOS: Wall Street traders may have been wary today. They were waiting to hear from what the Federal Reserve Chairman Ben Bernanke will be saying at Jackson Hole Wyoming tomorrow because that's when he's going to be meeting with some senior central bankers at the Feds' annual symposium.
Maribel Hebert is standing by at the New York Stock Exchange with all the latest action for us this evening. So Maribel, finally some movement on the market, but I'm afraid to say, it matches the color of your outfit. It's in the wrong direction.
MARIBEL ABER: It is, Nina, and sad to say, I am wearing the red, going in the wrong direction here. The dow is trading low, we're about 88 points right now. Essentially, though, we're right back where we started the month at, and it's partly due to those jitters you were talking about ahead of that Bernanke speech.
Now many on Wall Street now think the Fed will not announce further stimulus. There's one analyst saying that people's expectations have been dialed down. You know, the market is starting to adjust expectations that (INAUDIBLE) just might not happen. But at the same time, investors are also focusing on the fact that they don't want the punch bowl to be taken away just yet.
It's part of the reason that we're seeing stocks fall right now. I mean, now we also have some disappointing economic news out today. We learned before the opening bell that weekly jobless claims were completely unchanged last week at 374,000, so that's after that prior week was revised up.
Analysts had been expecting a decline here. And you know, we'd really like to see them get down closer to 350,000 mark. That's a level associated with a healthier job market, so definitely have a lot of work to do there, Nina.
DOS SANTOS: We also have more bad and mixed economic news, don't we? That's what's making it so difficult for the Fed to decide whether to (INAUDIBLE) or not.
ABER: There you go, Nina. It is this mixed bag. I mean, we have numbers on personal income and spending that came in. We learned that spending rose almost half a percent in July, and in the meantime, incomes rose 1/3 of 1 percent. So both of those figures were about in line with forecast and at least give some hope that economic growth could pick up this quarter.
But then, you know, Nina, you balance it out with where we are with the jobs and we're still a little bit murky there. The crystal ball, not so crystal, Nina.
DOS SANTOS: OK, Maribel Aber, thanks so much there at the New York Stock Exchange with all the latest. Time now for our currency conundrum for you out there.
Why are U.S. Bank notes green? Is it A) to stand out from other currencies, is it B) because greening is the cheapest, or is it C) green coloring has a higher resistance to chemical changes? We'll have the answer to that interesting currency conundrum later throughout the course of the program.
Let's have a look at how the world of currencies is doing at the moment. The British pound is currently falling against the greenback. Yes, the U.S. dollar, that is. Traders are wary of weak U.K. economic data that could be coming out throughout the course of the next couple of days.
And we're also seeing the Euro losing ground as well. One Euro currently is around about worth 1.2598. As you can see, 1.2498, I should say at the moment in the currency market. We're seeing a safe haven, Japanese yen rising yet again at around 78 yen and a half to the dollar. We'll be back after this.
DOS SANTOS: Welcome back. You're watching Quest means business. Here's an interesting story if you're out there. Mexico, it turns out, is suffering a severe shortage of eggs, which are an essential part of the diet of most consumers worldwide, aren't they?
Well, Mexico currently buys more than 2 and a half million tons of this commodity every single year. Egg supplies have been dropping, but prices soaring. And all of this follows a summer outbreak of bird flu, which swept through Mexico's poultry industry, detonating the chicken stock.
Well, the government is dropping tariffs on egg imports to try and stop these price hikes. Nick Parker shows us now what all this means if you're struggling to feed your family.
NICK PARKER, CNN CORRESPONDENT (voice over): It's just after dawn in Mexico city. Evan Garcia (ph) is setting out on his journey to a poor neighborhood with a special delivery. We carry cheap merchandise to help the people, he says. So they're excited, and I like that. His truck is carrying around 2,000 kilos of eggs, which are in hot demand after a bird flu outbreak in June forced Mexico to kill nearly 11 million chickens.
Egg prices doubled, helping to drive national inflation well above the 4 percent target range.
FELIPE CALDERON, PRESIDENT OF MEXICO (through translator): The egg we know is one of the main foods for Mexicans and constitutes a central part of their diet, especially in the poorest regions of the country. Therefore, these unjustified increases in a basic product threatened millions of homes and, of course, undermined their quality of life.
PARKER (voice over): President Calderon suspended tariffs on imports and announced aid of more than $200 million, which is helping to subsidize egg prices for those hardest hit.
PARKER (on camera): So the truck is now open for business. It's about 9 a.m. here in this neighborhood and there's been a constant queue of around 30 or so people that have been waiting patiently to pick up their allowance. Each person is allowed one kilogram or about 15 eggs per person.
But they'll have to make it last. This is the only trip this truck is doing to this neighborhood. Maria Del Carmen (ph) is here with her daughter and grandchild.
MARIA DEL CARMEN, MEXICAN RESIDENT (through translator): We are poor people, minimum wage. The wage of my husband is not enough so we are searching for places where eggs are cheap to feed the children because it's the only thing we can buy.
PARKER (voice over): With only two trucks to supply a city of 22 million people, it's a piece mill attempt.
RAYMUNDO COLLINS, MEXICAN OFFICIAL (through translator): It's not a matter of money, this official says. It's a question of production. Eggs are expensive because they're being hoarded to increase the price.
Back at home, Maria begins preparing a late breakfast with the eggs she bought at half the inflated price. Mexico is the biggest per capita consumer of eggs in the world. For her, the reason is simple.
DEL CARMEN (through translator): This is what we Mexicans eat. We use them for everything. Vegetable omelets, batter, stuffed chilies.
PARKER (voice over): Officials expect prices to ease as supply begins to flow again in the coming weeks. But for now, the deliveries are a life line to a much loved staple for some families. Nick Parker, CNN, Mexico City.
DOS SANTOS: You get all sorts of people on Internet chat rooms and not all of them are who they say they are, are they? Well, this particular user had a tough time convincing people that he was the real deal. We'll explain why after the break.
DOS SANTOS: Hello. Welcome back. I'm Nina Dos Santos. These are the main news headlines. Authorities in the U.S. states of Louisiana and Mississippi have issued a mandatory evacuation order for areas near a dam that's in danger of being breached.
Well, this dam is holding back flood waters from Tropical Storm Isaac and has been badly damaged. Officials are planning an intentional breach to keep it from breaking.
Iran has ramped up its nuclear program at the Parchin military base according to the United Nations. The U.N. says production of high grade enriched uranium has been increased by around about 30 percent since the last count. It also claims that Iran is building new roads around the base and is blocking further U.N. inspections.
Two hundred and seventy miners on strike at the Lonmin mine in South Africa have been charged with murder after 34 of their colleagues were shot dead last week by police. They're being charged under a South African law that covers incidents in which lead to police opening fire on civilians. There'll be more on that story in tonight's CONNECT THE WORLD in around about an hour and a half's time.
Ahead of his speech at the U.S. Republican Convention, this is the first look at Mitt Romney's campaign plane. Romney will accept the Republican Party's nomination to run for president during tonight's speech before unveiling his new plane and (inaudible) with his running mate, Paul Ryan, on Friday morning.
DOS SANTOS: Samsung appears to be forging ahead, despite losing a $1 billion claim to Apple in the biggest patent case in decades. Now today in Berlin, this company revealed a new version of its Galaxy Note. Samsung says that this smartphone is faster and thinner than the last one. Well ,the screen is larger and brighter. CNN's Diana Magnay reports.
(BEGIN VIDEO CLIP)
DIANA MAGNAY, CNN CORRESPONDENT (voice-over): After last week's devastating court ruling Samsung clearly keen to market territory at Berlin's huge IFA consumer electronics show. Just one brief reference to that unpleasant patent dispute with Apple and the $1 billion fine Samsung was ordered to pay at the head of mobile communications unveiled the new Galaxy Note II.
JK SHIN, PRESIDENT, IT & MOBILE COMMUNICATIONS, SAMSUNG: Regardless of any interest Samsung will continue to provide outstanding innovating and unique products that stand out in the telecom industry.
MAGNAY (voice-over): Samsung's hoping that hindrance will go away. It's expected to appeal the U.S. court's verdict that it violated a number of Apple patents in the creation of some of its smartphones. In the meantime, there's a lot of talk here about new categories. The Galaxy Note II building on the surprise hit, the Galaxy Note was last year.
HENRIK ROONEMAA, DIGI PRESSHOUSE: It's a stupid and crazy idea, but it works.
MAGNAY: Why? To have such a big (inaudible)?
ROONEMAA: Yes, it's (inaudible) doesn't matter. But just the same, I mean, it's enormous.
MAGNAY (voice-over): Even the pen's now ergonomically improved.
STEPHEN TAYLOR, BRAND V.P., SAMSUNG EUROPE: You can find this a little bit thin. It's got a bit thicker.
MAGNAY (voice-over): It feels like Samsung's putting a lot of emphasis on how to be different after it was accused of being too similar.
TAYLOR: The innovation and range of what we have to offer is probably unparalleled. So it's about giving consumers, you know, all the features they want and at multiple price points.
MAGNAY (voice-over): It's press day at the show and Samsung's still building. The world's assembled tech journos giving their first reviews of the new product on show.
ANDRZEJ TOKARSKI, TABLETBLOG.DE: I think rumors are that (inaudible). So everyone is (inaudible) devices.
MAGNAY: One thing that I am (inaudible) back here, very excited about, is the Samsung camera. And on the back, it's literally like a screen that you can shoot, edit here, immediately send to your friends, because it has wireless connectivity, 3G, 4G connectivity. But all the good functions of a proper camera.
MAGNAY (voice-over): Samsung, eager to prove it can engage consumers with new high-tech offerings, even as it continues its battle with Apple -- Diana Magnay, CNN, Berlin.
(END VIDEO CLIP)
DOS SANTOS: (Inaudible) the technology world, last night was a big night for Internet users, too. Reddit is an online community best known for viral videos and animal pictures. But on Wednesday, well, it was a little bit different. (Inaudible) introduced himself with this (inaudible) introduction. "Hi, I'm Barack Obama, President of the United States," and as you can see, he said, "Ask me anything."
Mr. Obama posted a picture of himself to prove that it really was him, and then answered 10 questions on everything, from Internet freedom to (inaudible).
It only took an hour, but the president got some pretty major exposure here, 1.8 million people subscribed to this thread. And Reddit had around 200,000 people both at the page at any one time. That's enough to nearly take down the whole of the website.
Perhaps more importantly for the president's election campaign, for November 2011, he won some serious kudos from the online community. The general manager of Reddit, Erik Martin, joins me now live from New York to talk about this.
This is a bit of a coup for you, isn't it, Erik?
ERIK MARTIN, GM, REDDIT: Yes, we used to joke about having an Obama "ask me anything" and, you know, it just happened, so it's quite exciting.
DOS SANTOS: OK, so hang on. You say "it just happened." Did you know about it before?
MARTIN: We knew it was a possibility last week, and then that turned into a more likely possibility and then we knew for sure it was going to happen maybe 24 hours ahead of time.
DOS SANTOS: So let's run through some of the questions that people asked the president. I mean, he was surprisingly candid, wasn't he, and surprisingly easy to relate to online. He even cracked a few technological jokes that only insiders would know.
MARTIN: Yes, no, he definitely -- even down to, you know, there were -- there were a few typos in there and people corrected him, which is -- which is a little bit cheeky, but you did get the feeling that he was really, you know, answering the questions and then just, you know, typing away like anybody else would.
DOS SANTOS: But obviously he had to post a picture of himself at the computer to convince everybody that it really was Barack Obama, because that's one of the things that people like him must have to put up with these days, you know, a lot of people try to impersonate him, especially online.
MARTIN: Yes, no, the -- we definitely talked a lot about how do we -- since we only had half an hour with the president and he's obviously extremely busy, how do we make -- how do we prove it right off the bat so that there's no question and none of the time or energy gets wasted arguing about if it's real or not, so we were glad the picture was able to happen.
DOS SANTOS: Let's take the gloves off and find out how important this is, really, for the president's technological and youth-savvy credentials. Now he famously won the last election basically a lock on the back of a huge social media campaign, on the back of a huge online presence. This really is his forte. How important is it to people like him to gel with the young and tech-savvy crowd?
Ah, apologies for that.
Well, my question must have been so long that Erik Martin, I'm afraid, went offline. The gremlins of technology. What can you say? We'll have the latest on Tropical Storm Isaac after the break. Do stay with us for that.
(BEGIN VIDEO CLIP)
DOS SANTOS (voice-over): Time now to answer that "Currency Conundrum" for you. Earlier in the show, I asked why are U.S. dollar notes green. Well, the answer to this is C, the green ink used is highly resistant. It can't be destroyed by acid or any other agent.
Also it used to be hard to copy as a color. And when using green or using old-fashioned printing techniques, it made it harder to counterfeit these kind of bills. And that's the reason why green is the color of the greenback.
Authorities in the U.S. states of Louisiana and Mississippi have issued a mandatory evacuation order. It's for areas near a dam that's in danger of being breached at the moment. The dam is holding back floodwaters from Tropical Storm Isaac, and it's been badly damaged.
And officials say that thousands are currently being told to leave towns near New Orleans. And up to 1 million households in several other U.S. states have lost power due to the hurricane turned tropical storm that is called Isaac. Let's go over to Jenny Harrison at the CNN International Weather Center to tell us more about what conditions this area is going to be experiencing.
So, Jenny, it's been downgraded to a tropical storm, but that doesn't mean the danger is over by any means.
JENNY HARRISON, CNN METEOROLOGIST: It really doesn't, you know, Nina, and it's still a tropical storm. And in fact, it'll probably remain a tropical storm for the next few hours as well. And look at the size of this storm. So what you can see from the satellite is it is now losing a lot of its deep convections.
So (inaudible) more scattered, the cloud is more broken. But look how far it stretches, in fact, all the way from Texas right the way across to the Carolinas. Now the storm, as you say, it has been downgraded. It's just at about tropical storm strength. But we have got some high gusts in there at around 90 kilometers an hour.
And you can see here that even 24 hours from now, it'll be a depression, an area of low pressure. But look at this, it is still forecast (inaudible) to move on its journey northward and push all the way through into Missouri and on into Illinois. And as it continues to do that, the rain is still going to go with this storm as well.
Now the winds along these coastal areas, they really have eased off. There are still some high gusts in there, but of course as the storm works its way through more central and northern areas of Louisiana, we will see some pretty strong winds there as well, not necessarily tropical storm strength, really just in the eye of this storm.
But even so, the rain of course, beginning to finally pull away from New Orleans. But you can see where the bulk of it has been to the north, the eastern quadrant, and again, of course, look at this, still got these tornado watches in place.
There are some strong thunderstorms on the eastern side, all this red and yellow you can see those are very strong thunderstorms and they are the sort of storms that can produce tornadoes. So far, 510 millimeters of rain to New Orleans. So over half a meter and in inches it is just over 20 inches in Gulfport, 258 millimeters.
So this is the radar in the last few hours. So the eye is up here, but of course all of this rain continuing to push onshore, still getting some (inaudible) and pulling it all in from these warm waters along the Gulf.
And in fact, New Orleans, in fact, you can see this line of thunderstorms, it is -- which is on its way, so still this is the sort of weather we're going to see over the next 24 hours. And then once it really clears out of Louisiana, it really does move a lot quicker, covering those next three states in the next 72 hours, still some pretty notable accumulations there.
It has to be said, you can see certainly the purple areas at Arkansas, that's about 150 millimeters of rain, and of course it will continue to cut a bit of a path all the way through this particular region. The only good thing with this is that so many states across the U.S., particularly here, are in desperate need of some water.
So this should be fairly well received. Gusty winds with that, as I say, but the rain certainly not to be taken too lightly.
Just to show you again that dam that you're talking about, Nina, because indeed, what they've done is they've begun to actually pump the water over the top of this dam, and at the same time, they're going to create a hole literally in the side of this dam to release the water at a slower, controllable pace, because what they want to do is just slowly raise the river levels, very hard to make out but over here it is on the satellite and the Google Earth, and then it kind of disappears in the trees.
What they want to do is raise the river levels, controllably, because eventually what happens, of course, all this water continues to go southwards, passing all these towns, all of this farmland. You can see here the river looks a whole lot wider.
And eventually so a lot of towns have had towards New Orleans, and eventually that water will drain into Lake Ponchartrain. So that is the plan, Nina. They want to do this, control it, because obviously any other than that could be disastrous. So let's hope it does work.
DOS SANTOS: OK. Jenny Harrison monitoring the situation at the CNN International Weather Center, thanks so much for that.
Well, stocks on Wall Street are firmly fixed in the red this session. Let's have a look at how the Dow Jones industrial average is trading, just another trading day and a bit to go before we close this week.
And as you can see, it's been a bit lackluster performance today. The Dow has finally started to pick up volume, pick up pace. But unfortunately, as I was saying (inaudible) before, it's in the one direction, isn't it. It's down about three-quarters of 1 percent.
Everybody poised to hear what Ben Bernanke, the head of the U.S. central bank, the Federal Reserve, has to say at the Fed's annual symposium in Jackson Hole, Wyoming, tomorrow.
Now what do you think about that kind of market performance? What did you think about Barack Obama getting online and saying, "Ask me anything"? You can tweet us, of course, at my hashtag is @NDosSantosCNN -- or the Twitter handle, rather. And Richard's of course is @QuestCNN. Wishing him a good vacation. He's currently on holiday, which is why I'm presenting the show.
And that's it for this edition of QUEST MEANS BUSINESS. Thanks so much for joining me. I'm Nina dos Santos in London. MARKETPLACE EUROPE (inaudible) on CNN.
JULIET MANN, CNN HOST: Welcome to MARKETPLACE EUROPE. I'm Juliet Mann in London. This week we look at two companies who've grown through the economic downturn by investing in innovation, new product and cutting edge technology.
(BEGIN VIDEO CLIP)
MANN (voice-over): Coming up, as London plays host to the Paralympics, I speak to the founder of Ekso Bionics, a company that's created an exoskeleton for paraplegics to walk in.
And the CEO of Sennheiser tells me why he won't be lured into creating cheaper products to cut costs.
JORG SENNHEISER, CEO, SENNHEISER: We are driving these mass markets now with quality products. We are not into the cheap plastic junk, as we call it.
(END VIDEO CLIP)
MANN: Science and technology are important elements for any sport and any athlete, but for the Paralympics, they're essential. It all began at the first Paralympics in 1948, after the Second World War, it was harder for rehabilitation programs for injured veterans.
Since then, engineers have consistently pushed the boundaries of possibility. We're no longer surprised by carbon fiber prosthetics, running blades or lightweight racing wheelchairs. I went to Ekso Bionics, a company pioneering a bionic future.
(BEGIN VIDEO CLIP)
MANN (voice-over): Strapped into his high-tech, high-powered suit, Iron Man, the comic strip superhero, is a prized military asset in the movie. He's the ultimate soldier.
Hollywood styles it as futuristic fantasy, but decades of research, development and considerable investment have made bionic technology a reality. This wearable exoskeleton has helped Suzanne Edwards back on her feet. She broke her spine in a fall and has been confined to a wheelchair ever since.
SUZANNE EDWARDS: It's an amazing feeling to be told you're never going to walk again and then to be up and walking so quickly and easily. And it feels so natural and normal. You know, you can't really fault (ph) it.
MANN (voice-over): From a project that started out with around $25 million in military-related grants, California-based Ekso Bionics has now moved out of the lab and into the mainstream, setting up shop in Cambridge in the U.K., their European base.
MANN: Wearing an exoskeleton like this gives Suzanne extra power, which means you wouldn't qualify for the Olympics or the Paralympic Games. But if this is the future of mobility, perhaps there will be a bionic Olympics to showcase how this technology can enhance what the human body can do.
MANN (voice-over): Helping the paralyzed out of wheelchairs is just the first step.
EYTHOR BENDER, CEO, EKSOBIONICS: I mean, you're working with soldiers, helping the most able body you can imagine to carry more weight and to reduce the likelihood of back injuries. And there are everybody in between that somehow need for some reasons power to (inaudible) this in construction workers.
They need to hold up tools to become more productive or simply you and me, if you want to go and walk Kilimanjaro and be (inaudible) extra power from a bionic leg.
MANN (voice-over): The exoskeleton also comes with a bionic price tag, $130,000.
BENDER: Considering that you have (inaudible) people to walk again, I think it's pretty cheap.
MANN (voice-over): Ekso Bionics have sold 16 devices to rehabilitation centers and hospitals in the U.S. and expect that to rise to 45 by the end of 2012. In Europe, they've sold one so far, in Italy, and expect to deliver another 15 to 20 this year.
BENDER: Our business case is really much based on we would be a medical device company, (inaudible) what we are doing here, helping in the beginning, spinal cord injured to walk. Then move over to stroke and other pathologies next year. And then over to the personal market following that. This alone will allow us to build a very sustainable company in the hundreds of millions of dollars.
MANN (voice-over): The company plans to sell the suits off the rack and get prices down to around $80,000 within 24 months.
EDWARDS: At the starting point, this is absolutely incredible and where it will go in the next five to 10 years is going to be so exciting for people like me.
MANN (voice-over): People like her will be following the company's developments with keen interest. And with a little help on their own two feet.
(END VIDEO CLIP)
MANN: Coming up, I speak to the boss of audio technology company Sennheiser, the medium-sized family-owned business in Germany, amplifying their international reach.
MANN: Welcome back to MARKETPLACE EUROPE. The latest figures show that the Eurozone's deepening fiscal and banking crisis is hitting both business and consumer confidence. Yet the CEO of Sennheiser says that it's at times like these that consumers are actually paying a little bit more for a quality product that lasts.
(BEGIN VIDEO CLIP)
MANN (voice-over): Sennheiser products are manufactured in Germany, Ireland and the U.S.A. and are sold all over the world. With a workforce of more than 2,000 people, the company had a turnover of $650 million last year, growing by 13.5 percent.
SENNHEISER: The talent that we see today is that we have to drive technology in many corners of the technological world, and we have such a multitude of different technology when you look into the manufacturing here, that it is almost impossible to manage.
And so we have to take decisions for investments in certain areas and we have to be quite certain that these investments pay off. So we have to earn the money first, then we invest. And then we have the fruits from the investment.
MANN: You are quite a specialized company in a specialized industry. Looking at the competition, it appears a lot of them have gone mass market with cheaper microphone systems. Have you missed a trick?
SENNHEISER: No, no. We have not missed a trick. Actually, we are driving these mass markets now with quality products. We are not into the cheap plastic junk, as we call it. So we try to define the minimum quality that is necessary to buy -- to build a decent microphone or a decent headphone. You cannot do it for as low a price as some of our customers really want.
And we have made the experience, especially in the past years, where money was not so much available for our customers. They rather would invest into a Sennheiser quality product because it will last. If they buy a cheap product, well, after a certain period, a few months or so, you have to throw it away. And so you have to throw your money away.
MANN: You can have high quality and still keep up with latest trends, new colors, new sizes, a cheaper range (ph).
SENNHEISER: We do all that. And if our customers want Swarovski crystals on it, they will have it. They can have it on their microphone or their headphones. And they even pay an extra premium for that because the trend of individualization of a product is unbroken. It will continue within the next years. And people are willing to pay extra to have a very special, unique product of their own.
MANN: Your family runs business. How important is that to the growth of the company?
SENNHEISER: Growing turnover is not our main objective. We want to care for the company, that the company is safe and sound and can withstand all the crises that we have to overcome now and in the future.
MANN: What about the broader economic picture in Europe and on a global scale? How does that affect the way you do business?
SENNHEISER: Well, it depends on what kind of product or market you're looking at. Consumers can be effective. We felt that all over the world, but not at the same time.
So we always find markets which are still well selling, and if money is scarce, people have a tendency to concentrate on high-quality products, for instance, from our company. And so we enjoyed a rather good or stable business when other companies had severe drawback.
MANN: Of course the markets are very worried about Greece, also about Spain and Italy. The list goes on. Would any of the Eurozone members exiting the euro have an impact down the line on a business like yours?
SENNHEISER: I don't see an impact there really. Actually, I do not expect Greece to leave the euro. There will be a different approach now, although I think the remedies being used today, especially by the politicians, are just more of the old-fashioned one again.
And this will not solve the problem. So we all, everybody in Europe or in the world has to pay the bill at a certain period. And we are preparing ourselves for all these possibilities in the future so that we don't run into trouble with our company. So we have a war chest, so to speak, with money put aside for those things that we cannot influence.
(END VIDEO CLIP)
MANN: Jorg Sennheiser there.
Well, that's it for this edition of MARKETPLACE EUROPE. Do join us again next week when I'll get a taste of the European wine trade. Goodbye.