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Dow Falls on Poor Earnings; European Markets Extend Slide; Push for the White House; BBC Scandal; "Daily Mirror" Hacking Claims; Watching Wall Street; Euro Down; Outlook Monaco: Unraveling the Tax System

Aired October 23, 2012 - 14:00   ET


RICHARD QUEST, HOST: A sharp sell-off on Wall Street as disappointing earnings hit stocks.

A culture of abuse, which could flourish. The head of the BBC admits serious failings.

And the mini makeover. Apple unveils its latest lineup. We'll have the details in this hour.

I'm Richard Quest. Tonight, at the CNN Center, and I mean business.

Good evening. Tonight, stocks on Wall Street are deep into the red as investors are bracing for what could be the worst earnings quarter in just about three years.


QUEST: The Dow Jones Industrials, there's the number, down 208 points, just over 1.5 percent. And nearly every stock listed on the Dow is showing a loss.

The reasons why the Dow is off this time, we know and now are quite clear: it's earnings, earnings, earnings. The chemical maker DuPont reporting a sharper fall in profits than expected. It plans to lay off 2 percent of its global workforce to cut costs, 1500 jobs.

Winding on, 3M earnings were as expected. The company's weakening sales and lower forecast investors are worried about.

UPS was one of the few companies that didn't have a nasty surprise, its results in line with expectations. But even so, in this environment, it is not enough just to meet, it is the forecast ahead.


QUEST: Alison Kosik is at the New York Stock Exchange. Alison, even though we knew for the earnings season it was going to be poor, the market reaction is brutal. Why?

ALISON KOSIK, CNN CORRESPONDENT: Yes, that's interesting, isn't it? The writing -- you're right, it has been on the wall. Everybody expected third quarter earning season not to be so stellar. And -- but here's the thing is that usually when you see analysts lower these expectations, a lot of times these companies beat what the Street's expecting, even on those lower expectations.

And the problem you're finding now is that these companies are missing on these lowered expectations. You talked about DuPont. DuPont right now, shares, as you can see, falling almost 9 percent.

Interesting tidbit in its earnings report to tell you about, Richard. Did you know titanium dioxide, demand for titanium dioxide, something that DuPont makes, is down? That is actually hurting its earnings as well. Titanium dioxide is a component made in paint that is used to mark roads, to paint roads.

That's just one example of one of the issues for DuPont. It shows that infrastructure spending is down, especially in Europe. And so, do you see how the European debt crisis is affecting companies like DuPont, and it sort of has that domino effect.

QUEST: OK, we're going to talk to Ali Velshi a little -- in a little while. But Alison, on the political front, from your vantage point on the market floor, are people talking and relating the market to the presidential election yet?

KOSIK: They're not yet. They're not getting that close. I think the fiscal cliff has a bigger impact on how you're seeing the trade, on how you're seeing how many investors are jumping in and how many are jumping out. I think that has a bigger impact.

I think that when we get even closer to election day in a couple of weeks, I think you're going to see that impact the markets a little more, but not today. Not based on the debate, no.

QUEST: And after the bell -- I've got to make sure my watch is on the right time -- after the bell, which is in two hour's time, we get Facebook earnings.

KOSIK: Right. And actually, expectations aren't that high for Facebook, although shares, the last time I looked, were higher, with just hours to go before Facebook reports, yes.

QUEST: Alison Kosik at the New York Stock Exchange. We'll have those results when they come out in a little while time. Alison, many thanks for that.

Now, worries over weak earnings and Spain's debt crisis took its toll on European stocks. As you can see, the market in Europe was off. The worst losses were in Frankfurt, which was off -- I beg your pardon, in Paris, where the market was off 2.2 percent.

Thirteen days to go until the US presidential election. Barack Obama and his opponent, Mitt Romney, hitting the road. Romney's campaign is focusing on the battleground states, Nevada and Colorado this Tuesday. For President Obama, it's Ohio and Florida.

In the Sunshine State's Delray Beach earlier, the president ramped up his attack on what he says are Romney's shifting positions.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We've come up with a name for this condition.


OBAMA: It's called "Romnesia."


OBAMA: We -- had a -- we had a severe outbreak last night.


QUEST: By "last night," he meant the third presidential debate, where once again both candidates spoke of leveling the playing field with China.


MITT ROMNEY (R), US PRESIDENTIAL CANDIDATE: By holding down artificially the value of their currency, it holds down the prices of their goods. It means our goods aren't as competitive, and we lose jobs. That's got to end.

They're making some progress. They need to make more. That's why on day one, I will label them a currency manipulator.

OBAMA: China's both an adversary but also a potential partner in the international community if it's following the rules. So, my attitude coming into office was that we are going to insist that China plays by the same rules as everybody else.


QUEST: We'll be talking more about the election and the debate and factoring it into the markets a little later in the program. If you missed the live broadcast of the debate, we are replaying the debate in its entirety at 9:00 in London, 10:00 in Berlin, midnight in Abu Dhabi, right here on CNN, which by my reckoning is just about two hours from now.

When we come back, a so-called culture of abuse. But this time, it's at the world's biggest public service broadcaster, the BBC. Lawmakers take the head, the DG of the BBC, to task over the Jimmy Savile scandal. That story --


QUEST: -- in a moment.


QUEST: The BBC is accused of fostering an environment where child abuse was allowed to flourish. Today, the head of the UK broadcaster admitted ten employees are being investigated over allegations of abuse during the 1960s, 70s, and 80s.

Now, that was when Jimmy Savile was working as a disc jockey and presenter at the corporation. The British police have labeled the late children's television presenter as a "predatory sex offender." The BBC's director-general admitted to UK lawmakers today that the corporation did nothing to stop Savile.


GEORGE ENTWISTLE, BBC DIRECTOR-GENERAL: There is no question that what Jimmy Savile did and the way the BBC behaved in the years -- that the culture and practices of the BBC seemed to allow Jimmy Savile to do what he did, will raise questions of trust for us and reputation for us. There's no question about that.

This is a gravely serious matter, and one cannot look back at it with anything other than horror, frankly, that he -- his activities went on as long as they did undetected.


QUEST: George Entwistle was giving evidence to a committee of lawmakers from the UK, and we'll be speaking to one of them in just a moment. First, though, our correspondent Dan Rivers takes us through the damage done to some of Britain's most revered institutions because of the alleged actions of one presenter.


DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): His face was on TVs across Britain for decades, but now that eccentric jokey figure from years past suddenly seems more sinister. Sir Jimmy Savile, disc jockey, TV personality, fundraiser and, now, alleged to have been a predatory child abuser with more than 200 victims, according to the police.

The alleged victims have accused the organizations he worked for of complicity in the horrific crimes. They include the BBC, a shattering revelation made worse by suggestions of a cover up after a BBC expose on the affair was axed.

A new BBC documentary on its own handling of the scandal says top BBC bosses failed to explain a decision to drop an earlier special news report on Savile, who died a year ago. Now, the editor of that news program has stood aside pending an inquiry.

JOHN SIMPSON, BBC WORLD AFFAIRS EDITOR: This is the worst crisis that I can remember in my nearly 50 years at the BBC.

RIVERS: Esther Rantzen is a veteran BBC broadcaster and founder of ChildLine, a call center set up to help abused children.

ESTHER RANTZEN, FORMER BBC BROADCASTER: That all of us were put in the position of colluding with Jimmy Savile, we who helped him -- I appeared on "Jim'll Fix It" on occasion, and I -- I just wish that we had seen through that mask, that disguise, so much earlier.

RIVERS: But it appears the alleged look-the-other-way culture in the 1970s didn't stop at the BBC.

STEVE HEWLETT, MEDIA COMMENTATOR: We now know that it extends to prisons, hospitals, and other -- and children's charities, and so on. So, they won't be alone in that. It'll be difficult, because remember, they made him the star that he is.

RIVERS: But there are also damaging questions for the National Health Service, which gave Jimmy Savile special access to hospitals for which he raised money. The NHS is not commenting while it conducts its own investigations.

He was even appointed to temporarily run an NHS hospital for the mentally ill, Broadmoor, where at least one former patient has accused him of sexual abuse. This is Jimmy Savile sitting at the director's desk.

DAVID DERBYSHIRE, DIRECTOR, ACTION FOR CHILDREN: It's rare. It's not a common thing for people to seek to work with children or have contact with children in order to abuse them, via charities or via any other organization. But, of course, it does happen.

RIVERS: Savile also visited a notorious children's home in Jersey, Haut de la Garenne, where a staff member and a resident were convicted of abusing dozens of children. A lawyer for the victims says investigators are looking into allegations that Savile also abused children there.

RIVERS (on camera): The police have now launched a criminal inquiry into whether Savile had accomplices in a pedophile ring that may have corrupted other institutions.

Dan Rivers, CNN, London.


QUEST: Now, Auntie Beeb is not alone in being engulfed in a scandal. For the first time, a newspaper which is not part of the Murdoch empire, is embroiled in allegations of phone-hacking itself.

"The Daily Mirror," a British tabloid, is being sued by four people, including the former England soccer manager, Sven-Goran Eriksson. The claims relate to a period when the newspaper was edited by Piers Morgan, who know hosts a talk show, of course, on CNN. Morgan has vigorously denied ever hacking into voice mails or ordering such activities.

The news wiped about $27 million off the value of the paper, its publishers, Trinity Mirror in London. The shares closed down more than 10 percent.

Now, the markets that we've been telling you about and on the larger - - on the back of the earnings --


QUEST: -- reports, not to say, of course, the unease in the general economic situation, and what's happening in Spain and in the eurozone. On Wall Street, that sell-off continues, down nearly 1.75. So, it's actually escalated just a slight smidgen since we've been talking. Investors are seriously worried about the weak earnings and worries about the global economy.

And what, of course, is concerning them is if economies are slowing down even further, then the future earnings stream looks just as weak. If the future earnings stream is poor, then share prices also will take another tumble.

Earlier I talked to Ali Velshi, who's taken the CNN election bus through US swing states in the run-up to the election. Ali told me he's not surprised Wall Street's reacted in an aggressive way over poor profits, especially when giant names are involved.


ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: I am much less concerned about hanging my hat on earnings, because that's exactly where you're supposed to hang your investing hat. You're supposed to say, if earnings are bad, you sell off. If earnings are good, you buy in or you take your profits. What confuses me is when markets go up and down for no good reason.

Look, this sell-off on DuPont today is quite spectacular. It's unusual to see big sell-offs like that in this modern market. But I'm not too worried about this right now. I'd be worried if it were tomorrow and the next day and the next day.

QUEST: Right.

VELSHI: Remember, the Dow and the S&P 500 have actually done quite well in 2012, so this retreat is an unusual event. I'm glad to be back in a world where this kind of market activity is an unusual event, Richard, because we had too many years where this kind of thing was a daily event. If that doesn't happen --

QUEST: All right --

VELSHI: -- nobody gets hurt and, frankly, it doesn't hurt Obama -- President Obama much, either.

QUEST: You're on the road now for a couple of weeks, you're going to be traveling around.


QUEST: We are in Velshi's salad days.

VELSHI: Yes, we are. I just started the trip. It's 1800 miles. We're going from here all the way through -- we're going to go pass by you in Georgia, we're going to go to South Carolina, North Carolina, which is technically a battleground state, then into Virginia, where they don't want government spending cuts because they prosper from government spending, and finally into Ohio.

The eating is going to get substantially worse. I started off with a salad last night. By midnight, I had tucked into a big plate of nachos. It's all downhill from here. But what do you think of the dressing, Richard? At least I'm dressing the part?


QUEST: What can one say? All I do know is that by the time we finish with Ali Velshi after he's been through his swing states, Lord knows what he'll be eating. So now, a Currency Conundrum.


QUEST: The United States mint has honored each of the nation's 50 states with a special limited-edition quarter, a different design for each state. What image was chosen to represent the state where I am tonight, the state of Georgia?

Is it a peach, a peanut, or a PEEcan -- or a peeCAN? A peach, peanut, or a pecan? And it's not as obvious as you might think, or maybe it's more obvious than you realize. Answer later in the program for you.

To the markets, the euro fell below the key $1.30 level. Moody's downgraded five Spanish regions. Those are the rates --


QUEST: -- this the break.


QUEST: Now, it's less than two square kilometers in size, yet Monaco generates a GDP of around $5 billion. This week on Outlook Monaco, we'll see how the country works. Over the next four days, you and I will meet the most influential business leaders and will speak to its current prince, Albert II. Let us begin with CNN's Nina Dos Santos, who's been unraveling Monaco's controversial tax system.


NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT (voice-over): Early October in Monaco is still bathed in glorious sunshine. In the harbor, boats -- big, of course -- bob contentedly. In the cafes on the central square, the conversation is carefree.

The sports cars that fill the parking spaces are fast, and their drivers are dressed by designers. With such obvious attractions are offered, it's easy to see why this tiny principality has been a magnet for millionaires around the globe for years.

But there is another, far less visible side to Monaco that also lures the super rich to the principality. For years, Monaco's complicated and controversial tax system -- residents pay no income tax -- has attracted some of the world's wealthiest people, but it has also attracted some very unwelcome headlines.

The country's finance minister is Marco Piccinini. This week, he resigned from his post, but he's been asked to carry on until a successor is appointed. He's all-too-aware of the accusations that Monaco is a haven for tax exiles.

MARCO PICCININI, FINANCE AND ECONOMY MINISTER, MONACO: It's a legend that in Monaco, physical persons are tax-exempt. If a physical person carries out a commercial activity which is significantly across border, more than 25 percent is the crucial law, more than 25 percent elsewhere, a physical person is liable for payment of commercial profit taxes, as well as a company.

DOS SANTOS (on camera): Isn't that a disincentive, though, for residents to move to Monaco? Or does it just attract a different type of clientele?

PICCININI: Based on what we can see, it's not the case, because I think it's a well-balanced tax system. The thing that people must understand is that Monaco is the opposite of an offshore jurisdiction. We are more an onshore jurisdiction where the tax system is intended, is structured in order to encourage people to invest, to work, and be active essentially in the country.

DOS SANTOS: Are you a tax haven?

PICCININI: Generally speaking, Monaco cannot be considered as a tax haven for several reasons. One, I just mentioned, is it is definitely the opposite of an offshore jurisdiction. It's an onshore jurisdiction. It's not a place where you come to hide your money, because everything is very visible.

Our tax -- our banking system is under joint supervision with the Banque de France. And, of course, the money gets totality. As I say, we derive more than 70 percent of our budget from taxation, so it's not a tax haven.

DOS SANTOS (voice-over): The banking system he referred to also attracts international attention. The chairman of an association which represents financial operations in the principality believes that Monaco's reputation means that it has to be even more rigorous than other countries when it comes to deciding who it will do business with.

ETIENNE FRANZI, CHAIRMAN, ASSOCIATION FOR FINANCIAL ARCHIVES, MONACO (through translator): Monaco must be even more careful than any other place because, obviously, if something happens in a small, little town or in the middle of Italy, no one would care.

But when it happens in Monaco, it gets very important, and the media coverage is way superior to what it actually should be. So, we really need to be particularly careful.

DOS SANTOS: For the head of government, all the talk of tax avoidance distracts from the idea he has of modern-day Monaco.

RICHEL ROGER, MINISTER OF STATE, MONACO (through translator): We're doing our best to be a modern state, respecting the rule of law, in total compliance with the international standards for finance. We are not blacklisted in any kind of list, gray or black. We are acting against corruption and for transparency so a state, respecting the rule of law, a neutral state, not engaged in conflicts.

And we want this state to be open, to be renewed, and to welcome the 120 different nationalities present on our territory.

DOS SANTOS: In Monaco, the powers that be seem to feel that, while the lifestyle on offer makes the country appealing to some, it also makes it fair game for others to attack it.

Nina Dos Santos, CNN, Monaco.


QUEST: Now, in just a moment, more anger in Spain and Greece. We're live in the middle of the eurozone crisis. Also, big Bond yields, and I don't mean the sort on the market. We're live for another type of Bond, the "Skyfall" premier in London. QUEST MEANS BUSINESS, good evening.



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

The US presidential debates are done and finished. Now, it's back to the campaign trail in those all-important battleground states. A CNN poll gave Barack Obama the edge over the Republican Mitt Romney in last night's foreign policy debate. It's unclear whether that will translate into more votes.

After several days of bloodshed and tension, Beirut is calm on Tuesday. Tanks and troops are still on guard. The EU's foreign policy chief has been meeting with the Lebanese prime minister and offering support. The prime minister is under pressure to resign after the assassination of one of Lebanon's top intelligence officers.

Scientists worldwide are condemning an Italian court for finding six earthquake experts guilty of manslaughter. The court said they made an inaccurate prediction before a powerful quake rocked the town of L'Aquila in 2009. It killed more than 300 people. The men face six years in prison and $10 million in fines.

More than 8,000 miners have been fired by Goldfields. The South African mining company says they were striking illegally. Goldfields says it issues a final return to work warning last Friday.

In London, a committee of lawmakers has been questioning the head of the BBC over a scandal involving the TV presenter Jimmy Savile. The DG, George Entwistle, admitted the culture at the BBC allowed Savile to go on abusing children and young teenagers for years. He denied allegations that there'd been a cover-up at the BBC, and you can hear one of those lawmakers on QUEST MEANS BUSINESS next.

Damian Collins was one of the select committee members who questioned the BBC's director-general, George Entwistle today. He tried to get to the heart of why the flagship "Newsnight" program dropped its investigation into Savile late last year.


DAMIAN COLLINS, BRITISH MP: And what's the point the director general being (inaudible) because he doesn't have (inaudible) what's going out in the (inaudible) company's name.

GEORGE ENTWISTLE, DIRECTOR-GENERAL, BBC: The director-general has editorial responsibility and accountability for what goes out in his name, but he doesn't have direct editorial control. Editorial control has devolved (ph) throughout the BBC.


QUEST: So Damian Collins me now, live from London.

Thank you for taking time and talking to us.

The core question here is what do you -- what do you think was going on at the BBC when they took that decision to shelve "News Night"? Do you believe it was just one of those things or do you think it was because they had tribute programs to Savile and they didn't want to sully those tributes?

COLLINS: Well, it's not -- I mean, today's evidence, it doesn't make our question any clearer. I think there are some extraordinary gaps of knowledge which George Entwistle, the director-general, displayed today. One is the fact that he had been -- he was, of course, in charge of the Christmas scheduling and the tribute programs about Jimmy Savile that had been prepared.

He was told -- he was told that the BBC "News Night" team were in the process of putting together an investigation into Jimmy Savile's life and he didn't ask any questions about that at all, which seems extraordinary.

It's also extraordinary, I think, looking at the behavior of the editor of the "News Night" program that the BBC not only decided not to run the program but they dropped the investigation altogether.

QUEST: What --

COLLINS: And that investigation included --

QUEST: Yes, well, sorry. So what do you want? I mean, there's enough -- there's enough investigations to sink a ship now between police investigations, which obviously look at the criminal side, the BBC's got two investigations underway, one into the "News Night" decision and one into the culture that took place during those years.

So what is it more that you would like?

COLLINS: Well, I think there are probably three big failures that we're looking at. The big one, of course, is how did Jimmy Savile get away with committing these sex crimes against underage girls for decades without being picked up? I think that's one.

The second is how did "News Night" get away with sort of pulling the investigation without letting anyone know, you know, what they got, really sharing that information at all, not passing any of that information onto the police.

And I think thirdly, you know, how come, when the BBC tried to, you know, cut the presenter an open and honest view of what had gone wrong, why did they get their facts wrong? Why were key points about the "News Night" investigation not made public at the time?

And so I think -- and I think the reason these things are important is we -- until those question can be answers, until there can be clear why the BBC failed in those areas, (inaudible) after that --

QUEST: Let --

COLLINS: -- broadcasting the tribute program about Jimmy Savile --

QUEST: -- yes, let me just --

COLLINS: -- we won't be able to restore trust.

QUEST: -- let me -- do you believe that fundamentally -- I mean, all the people who are now at the top, whether it's the head of news, whether it's the director-general, whether it's the head of "News Night," all these people were part of that decision-making process. And if that -- if your argument follows to its logical conclusion, then one other or all should be thinking about their position.

COLLINS: Well, I think that's right. I think -- I certainly think with whoever made the ultimate decision to drop the "News Night" investigation, if they -- if they -- if our person made the decision that no further work should be done, that was a very big mistake and that person should lose their job.

QUEST: Damian Collins, before we finish, I mean, this is not to detract or deny from the terrible allegations and the horrendous events that took place, but there are people in your party and elsewhere who will use anything as a cudgel to beat the BBC into the bejeebers.

COLLINS: Well, no, I think to be fair, though, we had a massive investigation last year and earlier this year, looking at, you know, practices within News Corporation and these international newspapers here. We're very critical of senior management of not understanding what was going on in their organization. I think we're applying the same sort of rigor to clear failure of process and policy at the BBC.

QUEST: Damian Collins, good to have you on the program, QUEST MEANS BUSINESS, thank you.

COLLINS: Thank you.

QUEST: We'll talk more about this in the days and weeks ahead.

Damian Collins joining me there from London.

Tonight, Spain's recession is deepening. The bailout pressure is growing. And the country's reputation in the market is sinking. Moody's downgraded five Spanish regions, and Greece time's running out. Leaders there fail to agree on more austerity cuts. They need to do that, of course, to keep the rescue money coming in.

Now let's go our correspondents.

CNN's Al Goodman is in Madrid for us tonight.

Diana Magnay is in Athens for us.

First to Spain, where the government is bracing for more protests.

Al, what is -- I mean, we've had protests. We've had noise on the street. Rajoy is sticking to his plans. So what's different?

AL GOODMAN, CNN CORRESPONDENT: What's different tonight, Richard, at the fourth protest that aims to surround the parliament is that this one is considerably smaller than the three that happened last month.

And one of those, the first one back on September 25th turned violent. Thirty-five people arrested, 64 people injured. So far this has been going on for hours. We don't see any sign of that. But clearly it is smaller now.

Just up the street is parliament, which is where the debate on the 2013 budget has started, and that's why they're out here. They don't like that budget. But it surely will pass, because the prime minister has a majority in parliament, Richard.

QUEST: Diana in Greece, look, I mean, you know, the troika's been, the troika's gone. The money's there, the money's running out. The austerity plans ,the situation is OK today. But time is running out.

DIANA MAGNAY, CNN CORRESPONDENT: Time is running out. Apparently the government's coffers will be empty mid-November. But the troika and the coalition have been in discussions ever since the elections and Greece hasn't had any fresh money from the bailout since April.

So it really feel as though, as is normally the case with Greek politics, they're really pushing it until the absolute limit, because none of those parties want to be seen to be the one to compromise to the troika. And it's really the issue of labor relations, which the junior coalition partner says that it --


QUEST: OK, but Diana --

MAGNAY: -- labor relations, issues like, you know --

QUEST: -- hang on. Is there any progress? Is there any actual real feeling of things moving forward? Or is it just going 'round in the same circles?

MAGNAY: Well, you always hear from both sides, from the IMF and the troika, from the government, that they are making progress. The government, the leaders in the three parties in the coalition all came out making comments today, basically emphasizing to the people that the troika has been forced to compromise on various issues.

You know, so it's really a sort of question of political posturing for all of them. They all want to save face. But in the end, they're probably going to have to agree, because as you say, there's not enough money. What happens if they don't?

QUEST: Al Goodman on the street in Madrid, they're all going to have to agree. Are we any closer to Rajoy deciding on whether or not he's going to ask for money from the bailout funds from the new ESM and go into a program?

GOODMAN: Well, publicly, we are no closer. But clearly, he won a big regional election, his party did, on Sunday. And that gave a lot of wind to his sails as he goes up to Europe to his partners in Europe . He can say look, I've got austerity cuts. I've got tax hikes.

And in my own region, I still won. My party won again the regional presidency. So that gives him a little more breathing room, Richard. Now there's some analysts who say he's going to wait until after the U.S. elections and that's about where we are so far.

QUEST: Our correspondents covering this crisis for us tonight, Diana Magnay is in Athens; Al Goodman is in Madrid.

Coming up next, 100 million tablets. That's what the doctor ordered. Ha! More like the investors. Apple puts its money on Mini, the newest and smallest iPad yet. But wait a minute, there's actually developments on the full size motion (ph).




QUEST (voice-over): Now the answer to today's "Currency Conundrum," we asked you what image was chosen to represent the state of Georgia on their limited edition state quarter? The peach. Georgia's nickname is the Peach State, because of the importance of the fruit in the state agricultural economy. It also features the state tree, which is the live oak, and the state motto, "Wisdom, justice, moderation."

In fact, every street in this city, Atlanta, seems to lead eventually to Peachtree (inaudible) Peach Avenue, Peach something.


QUEST: On Wall Street the selloff continues unabated. And investors have been shaken by weak earnings. This is the Dow at the moment and worries over the global economy.

The market has been hovering down between 220 and 240 and now we're just at 216. So we're off the worst levels of the day. But there's certainly by no means any enthusiasm for stocks at the moment. Du Pont, of course, shocked the market and took a very hefty tumble.

And earlier in the week, we had results from Caterpillar. All these companies with strong global earnings potential have met or at least just exceeded earnings. But it's given a lot of concern.

Europe was also very sharply down with Paris off more than 2.2 percent.

Apple has unveiled the iPad Mini. The Mini model has a 7.9 inch screen, 7.9 inch screen, 7 point -- I make it about that, sort of, as opposed to that, sort of, which is the whole thing.

Anyway, it compared to the regular iPad's nine inches, 23 percent thinner, the same thickness as a pencil, according to Apple, and it's 53 percent lighter than previous models. The iPad Mini will cost from $329 for the basic model, cheaper than the iPad II. It will start shipping in November the 2nd.

With the new model, Apple's broadening out the gadget line. It's proven to be a runaway global success.


TIM COOK, CEO, APPLE: I'm thrilled to tell you that two weeks ago we sold our 100 millionth iPad.


COOK: That's 100 million in just 21/2 years.


QUEST: So what does it look like? This is the new iPad Mini. Without perspective, it really doesn't look much different from the iPad full. I only suppose when you actually are putting it in your hands, so to speak.

Shelly Palmer is host of Shelley Palmer Digital -- the Digital Living -- joins us now from New York. When we need -- when -- Shelley, when we need to understand these matters, I need you. Hey, hey. So what else have you done for me lately? Listen, Shelly, look at Apple. Look at what they've announced with the Mini. It's an -- is this a me, too, to the Kindle Fire and the others?

SHELLY PALMER, HOST, "SHELLY PALMER DIGITAL LIVING": This is anything but a me, too. What they've done is they've listened to consumers -- which Apple is not great about doing; they generally lead without listening. Here, they saw that the form factor, seven inches, was a preferred form factor.

People like e-reading; people like the Nexus 7 . They like the Nook. They like the Kindle Fire. And they decided that the form factor was right for consumers, this 7-inch form factor. But what they did was kind of impressive.

They took it up to 7.9 inches, which literally makes the display, depending on the portrait or landscape size, anywhere from 33 to 67 percent larger when you use it. They've really redesigned this thing to not be a little scrunched-down iPad; they've made it a really good iPad.

QUEST: All right. But they've also actually tinkered with the system of the iPad itself, haven't they? Now anybody who's just bought the iPad 3 might be feeling a little burned, since they've made changes to that, too. I mean, well, 3, if you know what I mean.

PALMER: Yes. Not a little burned, very burned, because the connector on the bottom of the iPad, the third generation iPad, is the older connector. This is the new lightning connector or whatever they're calling it, and it's horrifying. It's the one that's in the iPhone 5. They're looking forward, so they've changed the accessories.

Look, Apple never looks back. They just keep looking forward. Now the accessories are all going to match. You're going to have the current generation iPad's full size one, which they're calling iPad with a retina display. The new iPad Mini and the iPhone 5 are all going to be compatible accessory wise. They also run the same programs.

I mean, it's very important to understand that the little 7-inch iPad Mini, 7.9-inch iPad Mini, really runs full-up iPad programs in a beautiful way. So these are not scaled-up phone programs. It's going to -- or apps. It's going to run apps that run on the big iPad and they're going to look really good.

QUEST: We're going to talk about, later in the week, no doubt, the surface and Windows 8 --

PALMER: Absolutely.

QUEST: -- and that's obviously -- said something we do need to keep a very close eye on.

But what's your gut feeling, Shelly? You look at this much closer than most. Do people buy the iPad Mini or the iPad or do they -- the mini- me or the big me, or do they buy both or do they buy one or the other? And if you've got the big one, will you buy the little one? You know where I'm going with this.

PALMER: Yes, I do, and what I think is going to happen is you can type standing up with a 7-inch iPad Mini. You cannot do that with a 10- inch. You've got to find a desk somewhere or a seat where you can sit down and put this thing in your lap.

So for people who ride trains, people who take cabs, people who stand on the street waiting for a bus, you need to -- you can type with your thumbs. We've learned to do that pretty well.

This is going to be a slightly different experience. It's the full browsing experience. And it allows you to really get into this thing in different ways. So I think it's going to sell extremely well. And you know, Richard, like every product, consumers are going to vote with their checkbooks. They always do.

So we're going to stay tuned and see, but I have a feeling Apple's got this one right, and I think people are going to like it a lot.

QUEST: And I'm going to want to hear your views on the surface as we move on through the week, because that's also --

PALMER: You bet.

QUEST: -- development.

Shelly, good to see you as always in New York --

PALMER: Always great to see you, Richard.

QUEST: -- joining us from New York.

OK. The weather forecast. Now, listen, Jenny Harrison is at the World Weather Center. Here's (inaudible). Now here's a story for you, Jenny. Is -- don't, no, no. I was in Lake Tahoe yesterday when the first snows arrived on the Sierras and had to put some chains on the car, wheels of the car, which I wasn't very good at doing.


QUEST: Anyway.


QUEST: Snow, it's arrived.

HARRISON: It has arrived. You know, Colorado, actually is the first place last week that opened a ski resort. And you're right, Sierras, yes, good old dusting in the last 24-48 hours. I'd love to see you put some chains on your car.

Now there's been some snow in Europe, of course. I'm going to start talking about that first of all. And be prepared for weather conditions to change over the next few days. It really is going to feel much more like winter than even sort of mid- to late autumn.

And by the way, Richard, you know, I don't know (inaudible) 12 Celsius London right now or 24 degrees and the sunny skies, which is what it is here in Atlanta. But good, clear skies still across much of central Europe, because high pressure still in control. Those rains, of course, finally cleared away from the southwest.

But be prepared for this, because there's another system just waiting in the wings, heading across the southwest. But this is going to be the main story, really, across much of northern and central Europe, those temperatures are going to plummet over the next few days.

But across the south, we've still got a few warnings in place, not sort of really high risk. But there's still the chance some heavy rainfall at times, and bearing in mind this rain with some potentially strong winds is going to fall on that saturated ground which, as we know, was falling on very drought-ridden ground traditionally, through sort of the flooding.

And we could see some severe thunderstorms so possibly tornadoes which over the water of course appear as waterspouts. But the temperature's been well above average for the last couple of days, Brussels, London and Paris. But as we get towards the end of the week, not too bad in London. It just manages to stay clear of this colder air. You can see the blue there.

But look at Brussels, 8 Celsius by Friday, 9 in Paris so below the average. But also feeling a lot colder because it's been above the average for the last couple of days. There's the rain pushing into the southwest. And there, of course, is the snow across much of Scandinavia and, again, just sweeping across the north and west of Russia.

So that's where the cold air already is in place, 7 in Stockholm this Wednesday, 24 degrees in Rome. Now it's this time of year you could be trying to get away for some nice sunshine, near the end part of the year, certainly in the northern hemisphere. And you think, well, let's head to the Caribbean. Should be pretty good this time of year.

But remember, we aren't yet out of the woods. It is still the hurricane season. And this is Tropical Storm Sandy, winds are 80 kph. The next 24 hours heading directly for Jamaica. This will be a hurricane, that is pretty much in the forecast. All the models are in agreement.

The winds will be very strong and strengthening, but the warnings are in place. We are going to have some very heavy flooding, Richard, across the Caribbean over the next couple of days.

QUEST: We'll talk more about that as that hurricane develops in the days ahead, along with other matters.

Jenny Harrison at the World Weather Center, we'll have more in just a moment, QUEST MEANS BUSINESS. Good evening.


QUEST: There's 22 films involved, $5 billion at the box office and there's still that martini. Half a century on, and the appeal of James Bond is stronger and more profitable than ever. The latest movie installment is called "Skyfall," and it has its premiere in London tonight. The film is said to be an altogether darker, more melancholy take on the 50-year-old franchise. And it's already being tipped for Oscars.

Neal Curry is at the red carpet and joins me.

People have been saying that Daniel Craig has brought a darker side to Bond since he walked out the water.

NEAL CURRY, CNN CORRESPONDENT: He has indeed, Richard, but where have you been? It's like the day after the Lord Mayor's parade now here. They're ripping down this carpet; everyone's packing away. We've had a right royal occasion here, and I know how you like right royal occasions. Prince Charles has been here with the Duchess of Cornwall.

And of course, as you mentioned, Daniel Craig's been here. He does bring a darker side to these Bond films. People are now beginning to think of him as the definitive Bond, perhaps even more than Sean Connery. Anyway, we had a little word with him about how he's managed to raise the bar.


DANIEL CRAIG, ACTOR: I, as an actor, that's why I want to do every time you make a movie, you always try and make the best movie you can. You know, this was a long -- you know, it was a collaborative process. We got to, you know, the best people we could for the job and you just hope for the best.

CURRY: Now many people now regard you as their definitive Bond. I wonder, after 50 years, could you reflect a little on the other actors who helped shape this character?

CRAIG: Well, I think that's what's so special about it. Each individual -- each individually they added to the whole thing. And, you know, I'm a fan of all of them. And it's just an honor to be, you know, a part of it.


CURRY: And there has been a sense of occasion here about the 50-year- long franchise. And, Richard, I've -- (inaudible) course of the last three weeks, I watched all 23 films, including "Skyfall," and I can say, my opinion, along with a lot of the other critics, this is certainly one of the best.

And I think traditional Bond fans are going to love this, and I think it also reboots the franchise as well to a certain degree. There's lots of new things happening, and lots of surprises, too, Richard.

QUEST: All right. Neal Curry, privileged enough to be on the red carpet, which will now get the vacuum cleaner out and just give it a quick vaccine before they need it again.

Neal, many thanks indeed at "Skyfall."

Over the next few weeks, as I'm here in the United States -- and you may have questions about the U.S. election or, indeed, what's been going on and what we're talking about, our way of talking to each other besides every evening in our nightly digest of business and economics is via Twitter and Facebook @RichardQuest is where you and I can talk to each other.

Any questions, brickbats that you've got, certainly as we move to this election process.

I will have a "Profitable Moment" after the break. QUEST MEANS BUSINESS.



QUEST: Tonight's "Profitable Moment," or maybe unprofitable if you were long in the market today, as once again the Dow Jones took another tumble on the back of earnings.

It's not surprising, of course, when earnings are bad, then the Dow will fall. And indeed, I agree with my colleague, Ali Velshi, when he says it is nice to see earnings and the market coming back in line again. But there's one other big event we need to keep in mind over the next few weeks, the race for the White House. Began a year ago and it ends just a couple of weeks.

The candidates have cleared their final hurdle in the television debates. From now on, it's a straight road to the ballot box. We've heard the zingers, the sound bites that we remember. And on the economy, on domestic issues, on foreign policy and ultimately it will come back to the economy.

And as we have been seeing from the corporate reporting season, in this time, things are very worrying. Those results are not good and it is the failure of those results which is pulling the market down and you start to see how it all goes 'round again.

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the hours ahead, I hope it's profitable.


QUEST: The headlines at this hour: Apple has unveiled the new iPad Mini with a 7.9-inch screen, weighs around half as much as the full size model. It will start shipping on November the 2nd with prices at $329.

After several days of bloodshed and tension, Beirut is calm this Sunday -- this Tuesday. Tanks and troop are still on guard. News foreign policy chief has been meeting with the Lebanese prime minister on offering support. The prime minister is under pressure to resign after the assassination of one of Lebanon's top intelligence officers.

More than 8,000 miners have been fired by Goldfield. The South African mining company says they were striking illegally. Goldfield says it's issued a final return to work warning last Friday.

In London, a committee of lawmakers has been questioning the head of the BBC over the scandal involving the TV (inaudible) Jimmy Savile. George Entwistle has admitted the culture of the BBC allowed Savile to go on abusing children and young teenagers for decades. He denied allegations that there has been a cover-up at the BBC.

You are up to date with the news headlines at the top of the hour. Now live to New York and "AMANPOUR."