Return to Transcripts main page


Fiscal Cliff Feud; Grover Norquist's Tax Pledge; Dow Slightly Down; Green Light for Greek Deal; Steelworks Standoff; Fixing France; EADS Cuts Jobs; European Stocks Flat; Euro Up on Greek Deal; Hyatt's New Focus; Examining the SAC Insider Trading Investigation

Aired November 30, 2012 - 14:00   ET


NINA DOS SANTOS, HOST: On a cliff edge. President Obama accuses Republicans of holding the middle class hostage.

Edging closer. Germany approves the latest Greek debt deal.

And 30 years of "Thriller." Michael Jackson's landmark album finally comes of age.

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

Good evening. Well, the quest to avoid the fiscal cliff is going nowhere fast. The top Republicans in the US Congress admit that those budget talks are currently fixed in a stalemate, and they don't even see President Obama's plan as being particularly serious.

There are now 32 days to go before we hit that fiscal cliff, and that also includes weekends and holidays. After some pretty fruitless talks on Thursday, today was all about trading warnings. Now, in a speech to factory workers in Pennsylvania, President Obama told his rivals not to play games with ordinary people's taxes.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's not acceptable to me, and I don't think it's acceptable to you for just a handful of Republicans in Congress to hold middle class tax cuts hostage simply because they don't want tax rates on upper income folks to go up.


DOS SANTOS: Well, the top Republican in the House of Representatives says that we're currently almost nowhere with those talks. John Boehner claims that the president's plan would hurt the US recovery.


REP. JOHN BOEHNER (R), US SPEAKER OF THE HOUSE: Increasing tax rates draws money away from our economy that needs to be invested in our economy to put the American people back to work.

It's the wrong approach. We're willing to put revenues on the table, but revenues that come from closing loopholes, getting rid of special interest deductions, and not raising rates.


DOS SANTOS: Well, the president is adamant that the wealthiest American citizens must bear the brunt of his budget reforms, but Republicans, on the other hand, are calling his plans, quote, "unbalanced and also unrealistic."

Mr. Obama wants to extend tax cuts for most Americans, but to let them expire for the wealthiest of people in that country. He also wants a minimum tax rate of 30 percent on incomes that are worth more than a million dollars a year. That's something that is known as the Buffet Rule, named after the legendary investor, Warren Buffet.

Then, there's a plan to put a limit on tax breaks as well, here. Again, that would mainly apply to higher-earners in society.

Now, Republicans would rather compromise on tax breaks than see those go up, and that's why they're so disappointed -- with Thursday's talks with the treasury secretary, Tim Geithner. They say that Obama's plan is based on a round about $1.6 trillion worth of tax increases and only $400 billion in spending cuts. Hence the term "unbalanced" that is being used.

Ali Velshi joins us now from CNN New York to put all this into context. Ali, you and I have often discussed the fiscal cliff over the last few weeks.


DOS SANTOS: Are you getting any sense that they're making any kind of headway, or is this kind of horse trading just likely to go on until the end of the year when we automatically almost hit the fiscal cliff.

VELSHI: Right after the election, there was what Senate majority leader Harry Reid, who's a Democrat, called "happy talk." Everybody was saying, oh, I think we got the message from the American people, we need to make a deal.

But what you heard from John Boehner, who is the speaker of the House, he's the lead Republican in the House of Representatives, was that they don't want tax increases. Currently, the highest earners in the United States pay an income tax -- federal income tax rate of 35 percent if they pay taxes.

President Obama wants that to go to 39.6 percent, which is what it was during the Clinton era. What the Republicans are saying is we don't want the taxes -- tax rate to increase. We're prepared to accept closing of loopholes and other credits.

Why? Because they all are beholden to this man Grover Norquist, whose name we have heard many times before. Grover Norquist is the author of something called the tax pledge that has made them all pledge that under no circumstances will they support a net tax increase. Let me tell you a little bit about Grover.


GROVER NORQUIST, TAX LOBBYIST: Taxes went up, spending didn't go down.

VELSHI (voice-over): He's been called a kingmaker, a patriot, and the ideological godfather of the Tea Party.

UNIDENTIFED MALE: I am an avid follower.

VELSHI: Since the mid-80s, Grover Norquist, the founder of Americans for Tax Reform, has been the driving force behind the anti-tax movement. His goal: to take big government and, in his words, "drown it in the bathtub."

Norquist's weapon is the Taxpayer Protection Pledge, which was at one point signed by 95 percent of GOP members of Congress.

BRET BAIER, MODERATOR, REPUBLICAN PRIMARY DEBATE, FOX NEWS: Will you raise your hand if you feel so strongly about not raising taxes --

VELSHI: On the campaign trail this year, only one Republican presidential candidate, Jon Huntsman, dared to cross him. Norquist has clout. He's called the most powerful unelected man in American today. But since the November election, his fortunes have changed.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I will violate the pledge.

REP. PETER KING (R), NEW YORK: A pledge you sign 20 years ago, 18 years ago, is for that Congress.

SEN. BOB CORKER (R), TENNESSEE: I'm not obligated on the pledge.

VELSHI: Republicans in Congress are jumping ship and supporting unspecified revenue hikes to help cut the deficit. And big businesses now resigned to higher taxes. Here's Goldman Sachs's Lloyd Blankfein.

LLOYD BLANKFEIN, CEO, GOLDMAN SACHS: If we had to lift up the marginal rate, I would do that.

VELSHI: Norquist's response?

NORQUIST: To be fair to everybody, some of these people have had impure thoughts. No one has pulled the trigger and voted for a tax increase.

VELSHI: To be sure, Norquist is still raking in big bucks. According to, he shelled out almost $14 million to defeat Democratic opponents in this past election cycle.

NORQUIST: We've run ads to let people know who's taken the pledge and who doesn't, we'll do phones into letting people know who's taken the pledge and hasn't.

VELSHI: Norquist's big backers are powerful Republican operatives. Crossroads GPS, the Super PAC led by GOP kingpin Karl Rove, and the Center to Protect Patient Rights, closely tied to the ultra-conservative Koch brothers. Those groups account for the majority of the Norquist budget, and there's no sign that they're running scared.

Norquist truly believes that the best way to grow the economy is to tame big government. He told me recently he will be vindicated, no matter how many politicians break the pledge.

VELSHI (on camera): What happens if they break the pledge? Because you've got money behind you, so do you pile on and try and get them defeated in the next election?

NORQUIST: These are self-enforcing. Why? Because the American people elect people who they want to reform government rather than raise taxes --

VELSHI (voice-over): Norquist is clearly looking toward the 2014 midterm elections, but one high-profile figure from the Fix the Debt movement believes that Norquist's clout is clearly waning.

STEVE RATTNER, CAMPAIGN TO FIX THE DEBT: I don't view this as some -- as the end of Grover Norquist. I don't think he suddenly disappears, never to be seen of again. But I think his aura of invincibility has been largely shattered.

VELSHI: Grover may not be over just yet. But voters will deal his movement a shattering blow if they become more tolerant of those willing to break the Norquist pledge.


VELSHI: And Nina, keep one thing in mind. The average tax burden for Americans is 29 percent. Average tax burden for Europeans, 42 percent, and in some countries, it's above 50 percent.

So there must be a lot of people watching this play out in the United States who are saying, what are you talking about? You're talking about taking the top 2 percent of earners in the United States up to 39.6 percent. And by the way, not on all their income, Nina. This is the marginal income above $250,000. So, if you're a Martian on Earth, you're thinking this is kind of a puzzling discussion.

DOS SANTOS: Yes. And indeed, during the presidential election campaign, one took a look at Mitt Romney's tax return when finally he made it public --

VELSHI: Right.

DOS SANTOS: -- and of course, many people in Europe probably had the same reaction. Just going back to Grover Norquist. To talk about --


DOS SANTOS: -- people being tempted to raise taxes as "impure thoughts," is that not slightly ridiculous and overblown, Ali?

VELSHI: It is quite remarkable. Grover Norquist not elected, and he is -- he's a threatening presence. But you saw the issue is that he spent $14 million against candidates who wouldn't take the pledge. So, he carries a big stick. He's an unassuming guy who carries a big stick.

The discussion of impure thoughts: he has told representatives, the House of Congress -- House of Representatives members, I hope you keep the pledges you make to your wives, I hope you understand that your marriage is not a short-term commitment. The language going on here is really, really quite remarkable, Nina.

DOS SANTOS: It certainly is. Ali Velshi, thanks ever so much for bringing us all of that in that interesting piece, there, about Grover Norquist from CNN New York.

Well, it's striking how much the US stock market seems to be moving in sync with the kind of comments that we're hearing coming out of the United States on that issue of the fiscal cliff.

As you can see, the Dow Jones Industrial average on this Friday's session before the close is trading slightly lower, is barely holding over the 13,000 mark, just 11 points above that 13,000 mark. As you can see, down around about just 0.08 percent, so basically flat.

Now, we learned today that consumer spending declined by a fifth of one percent for the month of October in the United States. It's also the last trading day of November.

Remember that the Dow is still heading for a slight loss on the month, but given the kind of apocalyptic scenarios that some of these people are suggesting if we do go over the fiscal cliff, it hasn't yet been reflected in Friday's flat stock market.

Now, Greece is one step closer towards receiving its bailout cash, this after Germany approved a plan. There are still plenty of roadblocks ahead, though, for the stricken country to get its money. We'll look at some of them after the break.


DOS SANTOS: Hello and welcome back. The German parliament has given the green light to a Greek debt deal. Its approval now clears the way for the release of $57 billion in promised aid for this country. Jim Boulden joins us now to take a look at the road ahead for Greece and, of course, the rest of the eurozone. Jim?

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: That's right, Nina. We're going to look at some of the road signs. Well, we have, of course, Greece preceding with caution after it got the German go-ahead.

The vote was a test for Chancellor Merkel's authority for sure, but the bailout was only approved because opposition MPs voted with the coalition. But there were 473 votes in favor, only 100 against.

Now, there still needs to be parliamentary consent from Finland and the Netherlands, so that's a caution. But there are plenty of bumps in the road. The IMF said Thursday it can't disburse Greece's bailout money until the country completes its voluntary bond buyback. That's a plan to wipe out $38 billion from Greece's debt burden.

Now, the Institute for International Finance says it's uncertain the buyback will be successful. Greece says anyway it has a backup plan. We don't know what it is, and the IMF expects the results by December 13th. So, there's still a few more weeks to go for that one to be clarified.

Another slowdown, well, eurozone unemployment hit a record high in October: 11.7 percent, or nearly 19 million people out of work. That's the highest since data was collected starting in 1995. No surprise, Spain was the worst, over 26 percent. Greece 25.4 percent unemployed in October, and for youth under 25 in Greece, 57 percent are now unemployed. Nina?

DOS SANTOS: Those are some staggering statistics there. Any sense whether this bailout cash will just give them the reprieve that they need for the next couple of years or so, Jim, or will we find ourselves in this situation again?

BOULDEN: I think even after the meeting's just ended with -- the latest meetings in Brussels, there's a lot of feeling that this may be kicking the can down the road, but that's not necessarily a bad thing. It's giving time, giving breath to the whole situation.

But in a couple years' time, a lot of people say these governments are going to simply have to say to Greece, you don't need to pay us back. That's one of the very strong theories at the moment.

DOS SANTOS: Yes, the so-called dreaded "haircut" --


DOS SANTOS: -- that we've already seen for Greece before. Thanks so much, Jim Boulden joining us in our London studio.

Well, the standoff between France and the world's largest steelmaker is reaching a head. ArcelorMittal has until midnight to find a private buyer for two furnaces in Eastern France. If it doesn't, the French government says that it will take them over, so effectively nationalizing them temporarily.

As we go to air, there are reports of concessions on both sides but, alas, no concrete deal. Michel Landel is the chief executive of the French multinational company Sodexo. The services company employs about 420,000 people in 80 countries. It's a company that reported a $600 million profit for the fiscal year. Michel Landel told Richard that nationalization in this case is not the solution to saving those French jobs.


MICHEL LANDEL, CEO , SODEXO: I know France has a lot of strengths. We have a very highly-educated workforce, state-of the art infrastructure, a lot of good strengths in France.

But clearly, there is a question of competitiveness, and the public spending is 56 percent of GDP, which is a world record, and really, that has to be addressed. The cost of the labor is too high. When an employee gets 100 euros, the company has to pay 250.

The flexibility of the labor laws needs to be -- so we have challenges in France, and I hope that the government is going to really tackle those issues.

RICHARD QUEST, CNN INTERNATIONAL: When -- let's just cut straight to it, sir. When President Hollande threatens nationalization of private industries, I understand there are arguments both sides about these steel plants, but when there's a threat of nationalization, that seems to suggest a shift to the left, not a shift to the sort of free market that you want to see.

LANDEL: Well, as a matter of fact, it was a surprise for me, as well. I think nationalization is absolutely not the solution. The solution is to make France attractive for investment, for companies to create jobs, to create opportunities for people, because that's what would regenerate French industry and also reestablish the trade deficit, which is a massive issue.

So, it's not about nationalization, it's about working and making sure that the structural challenges of French industry are really taken into consideration.

QUEST: With such a vast reach, so many different services, so many employees, what is your single biggest challenge in managing and focusing the company?

LANDEL: Well, a company like that needs to have a very strong culture to gather everyone, all the people, with the same spirit. And frankly, that's one of the big strengths of Sodexo, having this extremely strong culture, which give a sense to what we do.

What we do is, we help organizations to improve the quality of life for the employees, and the 420,000 people of our company is really focused on that specific challenge every day, and that's what give sense to what we do.


DOS SANTOS: In another blow for France, Franco-German civil aviation giant EADS plans to shut up to 850 jobs. The owner of Airbus says that it will make those cuts, and they will save around $260 million every year. In Paris, shares in the company closed up around about 2 percent.

More broadly, the Paris CAC 40 actually finished the session down instead by around about a third of one percent at the final trading day of the week. The FTSE 100 and the DAX, as you can see, were basically flat as investors weighed uncertainty over the Greek bond buyback program and also the money it's going to be getting from the eurozone against the positive vote from Germany.

Time now for a Currency Conundrum for you out there. British royals have graced Fiji's currency since all the way back in 1934, but not for much longer, it seems. The Reserve Bank is replacing the queen on the 2nd of January.

And as such, our question to you this evening is what with? A, flora and fauna, B, the country's military rulers, or C, could it be with the Southern Cross constellation. We'll have the answer for you later on in the program.

Germany's approval of Greece's debt deal has managed to send the euro to a five-week high against the US dollar. The single currency is also at a seven-month peak against the Japanese yen. When it comes to the dollar, that currency is also stronger against the Japanese yen. The British pound, though, is fairly flat.


DOS SANTOS: Hyatt Hotels is looking beyond the United States for its ten-year plan. The CEO Mark Hoplamazian says that the group has 175 hotels currently in development, and 75 percent of them, it turns out, are outside the United States.

The Andaz Amsterdam Prinsengracht is one of the Hyatt's latest ventures. Mark Hoplamazian was there earlier, and he told me it brings a local flavor to a very international brand.


MARK HOPLAMAZIAN, CEO, HYATT HOTELS: The idea of the brand is to really be -- have each hotel be representative of the immediate neighborhood and the community in which it's located and bring that into the experience during their stay, so you're very much a part of the neighborhood and the community in which you're located.

We've really eliminated a lot of the -- what you would consider to be a traditional hotel experience, with a front desk and a concierge desk and bellmen and the like, and made it much more a flow of activity that doesn't really revolve around one check-in desk.

DOS SANTOS: You have been adding to your assets and your properties, but obviously, it's very capital-intensive to build a hotel. It takes years of economic planning, and we've got this issue called the fiscal cliff that certainly muddies the horizon.

HOPLAMAZIAN: The euro crisis over the past year and the -- fiscal cliff that's upon everyone at this point is having an impact on the near- term outlook for economic activity, and we're seeing some of that impact. In the United States, for example, corporate customers have been quite cautious in terms of making forward commitments.

In terms of the importance of the US to Hyatt, it's actually quite important. It represents more than two-thirds of our total enterprise, in terms of earnings base and activity-based. That will change going forward. We have a significant number of hotels under development outside the US. So, we have 175 properties under development across the world, 75 percent of them are outside the US.

DOS SANTOS: So, what would be your message to Congress and to the United States leaders about how they can resolve the fiscal cliff impasse? Are you confident that they will, and what would you like to see them do as the CEO of a major organization in the hotel industry?

HOPLAMAZIAN: Look, there's no question that it needs to be resolved, so I'm confident it will be resolved. I think the disruption that is -- that we see is really the result of the sense of compromised confidence among corporate customers. And I think that the quicker it gets resolved, the more quickly we can get back to focusing on making investments for the future.

We're starting to see some elements of recovery that I've been focused on for several years now, namely the housing market. It is starting to show signs of some -- recovery that you can track over a number of months.

It's not a full-blown robust recovery yet, but we're stating to see the beginning of it. And this is an unfortunate time to have a situation in which people are sitting back and being cautious and waiting. So I would say time is of the essence. The key, in my mind, is really a dialogue in which there's compromise on both sides, and that's what I'm hoping we will see.


DOS SANTOS: Next, circling SAC. We'll tell you who's caught in the crosshairs of regulators in what's being described as the most lucrative insider trading ever to be seen.


DOS SANTOS: Hello and welcome back. I'm Nina Dos Santos, these are the main headlines this hour.

Anti-government protesters are rallying in Cairo this Friday. You're watching live pictures there. As you can see, people piling into Tahrir Square to vent their anger at the Egyptian president Mohamed Morsi. Critics are furious after an Islamist-dominated assembly rushed through a draft constitution which they say undermines basic freedoms.

New video shot by our CNN team in Syria shows widespread disruption of Aleppo. Our Arwa Damon on the scene there says residents are beginning to return to rebel-held neighborhoods as, of course, the winter starts to move. She spoke to one woman who waited in a bread line for three hours just to get food there.

Iraqi police say gunmen have kidnapped a group of 20 young men on a highway. The men were in the process of joining the Iraqi army. They were abducted near the city of Baiji, which is around about 200 kilometers north of Baghdad.

A bridge has collapses in the US state of New Jersey, sending a train crashing into a creek below. Several of its cars were carrying a toxic chemical, which is now leaking into the water. Residents have been evacuated and schools put on lockdown. So far, 80 people have been treated for respiratory issues.


DOS SANTOS: U.S. regulators describe it as being the most lucrative case of insider trading literally in history. And the story is almost as complicated as the trades on these four screens. Let me run you through it.

The Securities and Exchange Commission is pointing the finger at this hedge fund, SAC Capital, with an illegal $276 million windfall. Now this man, SAC former portfolio manager, Mathew Martoma, has been charged with fraud as a result, though it could be that the man at the top of that (inaudible) person that regulators really have their sights set on.

For years, SAC's founder has literally dazzled Wall Street with exceptional returns. Maggie Lake has more now on the man and the myth that he may now soon find himself in.


MAGGIE LAKE, CNN CORRESPONDENT (voice-over): He's one of the most successful hedge fund managers on Wall Street today. His name: Steven A. Cohen, the Connecticut-based multibillionaire whose firm SAC is entangled in a massive insider trading investigation.

Cohen isn't charged in the case. His name isn't even mentioned in the complaint. But the arrest of former SAC portfolio manager Mathew Martoma has attracted worldwide attention. And experts say it's no secret who the government is really gunning for, Steven A. Cohen himself.

JACK COFFEE, COLUMBIA LAW SCHOOL: If the government could flip Mr. Martoma, they have a very good chance of being able to prosecute Mr. Cohen successfully.

LAKE (voice-over): Martoma is charged with an alleged scheme netting $276 million for SAC, a scheme prosecutors call the most lucrative case of insider trading ever uncovered.

PREET BHARARA, U.S. ATTORNEY: Ordinary investors were cheated. The market was corrupted and the rule of law took a back seat to illegal profit.

LAKE (voice-over): According to prosecutors Martoma received inside information about secret Alzheimer drug trials conducted by drug makers Wyeth and Elan. They say SAC bought massive stakes in the firms when those trials looked promising and dumped shares when the trials ran into problems.

Most problematic for Cohen, late July 2008; July 20th prosecutors say Martoma emailed his hedge fund manager, assumed to be Cohen, and writes, quote, "It's important that we speak." The two men speak for 20 minutes over the phone.

And July 21st, according to the complaint, SAC traders began dumping Elan and Wyeth shares and shorting their stock.

WILLIAM COHAN, AUTHOR: I've read the complaint. I've read the FBI investigator's report. It is pretty damning.

LAKE (voice-over): Some say the case strikes at the heart of the SAC mystique, how Cohen gets his eye-popping returns.

COHAN: Steven A. Cohen has made himself a multibillionaire by consistently beating the market by wide margins. I mean, the returns to these had year after year after year, 50-60 percent. People always scratch their heads and say, how could he do that? He must not -- he must be cheating, in effect.

LAH (voice-over): SAC says, quote, "Mr. Cohen and SAC are confident that they have acted appropriately and will continue to cooperate with the government's inquiry."

Former SAC employees have been charged with insider trading before. Three have pleaded guilty. But experts say Martoma, a 38-year-old family man, poses the biggest risk ever to Cohen.

COFFEE: This is the standard Department of Justice playbook. You find an intermediary, and you give the intermediary a very stark choice: either plea bargain and name someone else higher up in the food chain or face very long sentences, here as much as 15 years or more.

LAKE (voice-over): Martoma has so far refused to cooperate, but pressure on him to do so in the coming days will clearly be intense -- Maggie Lake, CNN, New York.



DOS SANTOS (voice-over): Time now for the answer to today's "Currency Conundrum," what is Fiji replacing the face of the Queen with on its banknotes (inaudible)? Well, the answer is A, flora and fauna. Fiji Reserve Bank governor says that he was removing the monarch's image but he did say he was saddened doing that, but that it was time to move forward.


DOS SANTOS: Now 30 years ago today, "Thriller" literally transformed the landscape of contemporary pop. It's still a bestselling album of all time. We'll look at details after the break.



DOS SANTOS: It was November the 30th, 1982, as something wicked was about to be unleashed. Thirty years ago today, Michael Jackson released "Thriller," and several stunning dance routines later, it has become the best-selling album of all time.

As Kareen Wynter now reports, "Thriller" helped to change the shape of the entire music industry.



KAREEN WYNTER, CNN CORRESPONDENT (voice-over): Seven of the nine tracks would become Top 10 Hits, and 30 years later, "Thriller" is still the best-selling album in the world.

COMMON, MUSICIAN: It didn't matter if you were Asian, black, Hispanic, white. It was just like we all knew "Thriller."

PHIL GALLO, SR. CORRESPONDENT, "BILLBOARD": It didn't matter if you had a huge punk collection or a huge R&B collection, or Frank Sinatra was your favorite singer. For some reason, you owned "Thriller."


WYNTER (voice-over): Although videos like "Billie Jean", "Beat It" and "Thriller" quickly became the gold standard for MTV, "Billboard's" Phil Gallo says the network was reluctant to place Jackson's music into rotation.

GALLO (voice-over): They present a video to MTV of "Beat It," and the president of Epic Records says, you don't get any other videos unless you play Michael Jackson.


GALLO: So it was sort of a smart threat at the time. They went and played it and, of course, the response was staggering.


WYNTER (voice-over): Michael Jackson became the first African-American added to what was then an all-rock lineup on MTV. "Thriller" broke new ground with a hybrid of pop, R&B and rock, with a guitar solo on "Beat It" by surprise guest Eddie Van Halen.

Van Halen says it started with a phone call from producer Quincy Jones.

EDDIE VAN HALEN, MUSICIAN: He says how would you like to come down and play on Michael Jackson's new record? And I'm thinking to myself, OK. "A, B, C, 1, 2, 3," and me. How's that going to, you know, how's that going to work?

Lo and behold, when I got there, there's Quincy and there's Michael Jackson and engineers, and they're making records.

WYNTER (voice-over): "Thriller" went on to win seven Grammys. But more importantly, it was a cultural touchstone that transcended age, ethnicity and musical genre.

GALLO: This is the masterpiece. This is the pop classic in many ways sort of defined the music of his later years.

WYNTER (voice-over): Kareen Wynter, CNN, Los Angeles.


DOS SANTOS: So although Michael Jackson is no longer with us, his legacy certainly lives on.

Well, let's take a look at this. Back in 1982, while what they were going through today makes today's fiscal thriller look rather tame by comparison, let me just give you some examples here.

The U.S. economy was in a bit of a horror show all the way back then, 30 years ago. Ronald Reagan was the president ,and at the time, the U.S. was mired in the midst of a really deep recession. In fact, economists say that that recession bottomed out in November, which by coincidence, is just the time when "Thriller" hit the stores.

The national debt had topped $1 trillion for the first time in the country's entire history, although again, that is -- pales in comparison to the likes of $16 trillion that we're seeing today in terms of the national debt.

And unemployment was also a huge problem for America, arguably more so than it is today. This is because joblessness was as its highest since World War II and after "Thriller" came out, the unemployment rate actually peaked at about 10.8 percent. So something of an economic horror story, you can say all the way back then 30 years ago.

Let's go over to Jenny Harrison, who, like me, is probably somebody who remembers "Thriller" when it hit the stores. What kind of climactic thrillers do you have for us out there or the weather, Jenny?

JENNY HARRISON, CNN METEOROLOGIST: You're right, Nina, I felt kind of (inaudible) yes, of course, I remember. My goodness, it was amazing, wasn't it? Still is, really, (inaudible). But yes, weather wise, well, maybe we could even top "Thriller," I don't know. It's been a very wintry couple of days so far across much of Europe.

And just look at this, there's just cloud absolutely everywhere you look. And guess what weather isn't any cloud, I have to say there's a little bit of weather to come with it despite that. But the temperatures, the thing about these the last couple of days, and this is why we're seeing so much snow, of course, all the moisture is turning to that snow.

Right now with the wind factored in, it feels like -10 in Stockholm, - 2 in Copenhagen. Just a degree above freezing in London. Actually, at freezing in Birmingham in England and -17 up in Helsinki.

So for the last few hours, (inaudible) wintry showers across northern regions of the U.K. but largely it has been dry for the last couple of days. But Germany still holds snow in the last 12 hours.

Nothing like, though, thankfully, we saw in the last couple of days. This gives you an idea, of course, what it is like to try and deal with all this snow and, oh, I haven't got any video to show you. But there's some good video, too, of all the trucks that are really trying to make on the icy roads, because (inaudible) what happens, the snow comes down.

And with temperatures so low, it just freezes and means that really there's very, very dangerous to drive, if indeed you can at all. But look at the snow that's come down in the last 24 hours, 16 centimeters in the Czech Republic. And then in Moscow, 22.

And in fact this is probably pretty much a record for this time of year, for so much snow to have come down just at the end of November. And, again, some pictures to show you of trying to deal with all that snow in Moscow and of course, so very deep. But again, because it's so very cold, it really is going to hang around for quite a while.

But that's not the only problem across eastern Europe. We've got more snow to go through the next day or so across central Europe, but fairly light, very widespread, but quite light. But then across into western Russia, not only have you got the heavy snow, you've also got the freezing rain to deal with.

And this occurs when you've got below freezing temperatures at ground level and then you have all this moisture and it's coming down where it's milder. And as soon as that rain hits things that are below freezing, it literally freezes. And that's when you get that coating of ice of the cars, the roads, the power lines, just about everything.

So it really can actually being transport to a halt. But this is the snow still to come across western Russia, across into Finland. You can see there across to the Baltics as well. And then the ice, quite a line of that. Seems to be just to the east of Moscow.

But we have certainly had some of that. But it's not all doom and gloom, because if you're in, say, Val Thorens in France, this is actually the highest resort in Europe. Well, there's plenty of snow and people have been enjoying it. In fact, I've probably got -- let me just show you that. Here we go, a webcam, a live webcam from Meribel, which is pretty close to there of course as well. So as I say, not bad for everybody, but there's more to come.

Look at all this snow. We've got rain across the Mediterranean and (inaudible) those Saturday temperatures, well, it's going to feel chilly, 4 in London, 3 in Paris, just 1 Celsius in Berlin, Nina. Wrap up well.


DOS SANTOS: So I supposed you could say it's less like a "Thriller" and more like a "Chiller." Have a good weekend (inaudible) --


HARRISON: (Inaudible). You, too.


DOS SANTOS: Well, you know, I've had the whole week to come up with that one, Jenny.


DOS SANTOS: Thank you ever so much for that. Jenny Harrison, have a great weekend there at the CNN Weather Center.

That's it for QUEST MEANS BUSINESS. Thanks for joining me. I'm Nina dos Santos in London. MARKETPLACE AFRICA is next.





This week, we're in Cape Town to talk to one of the world's largest shipping companies about trends in African trade.


CURNOW: This is the largest inland container depot in Africa, and it's operated by Maersk, the Danish shipping company. Well, we're here to interview Lars Reno Jakobsen. He's the vice president for Africa for Maersk.



CURNOW: So Maersk, huge global empire originating from a small fishing nation, Denmark, essentially. How many of these containers does Maersk have around the world?


CURNOW: And I know that, because I'm sure many people, whatever they're traveling, there's always a Maersk container. (Inaudible) Coca- Cola.

JAKOBSEN: As we say, it's like a household name, not least in Africa. I don't think you can find that many places in Africa where you'll not encounter a Maersk container. We have around 600,000 containers in our global fleet, out of which about 15 percent are regularly trading in Africa.

CURNOW: And as your containers are shipping in, trucked in across the African continent, what are the trends that you've seen? Have -- has it changed, the landscape, over the last 10 years, for example?

JAKOBSEN: Well, having been involved in Africa myself for more than 12 years, I definitely see the huge positive change. I really see a different pattern emerging in terms of trade. We see new commodities moving and we see new (inaudible) opening up businesses.

CURNOW: What is imported into Africa? What are the -- what are the big things?

JAKOBSEN: The middle income countries you will increasingly see (inaudible) consumer goods. You even start to see a lot of flat screen televisions, electronics coming in. If you come to the lower income countries, there's still very much basic foodstuffs, even (inaudible) some countries. So I would say it has the whole spectrum of cargo coming in.

CURNOW: Infrastructure is still a problem, isn't it, getting from A to B and then to C and then to zed.

JAKOBSEN: Yes. I would never call it challenges. We would call it opportunities because this is really what we are here for; that is, to make sure that the supply chain can work as efficiently as possible and we are putting a lot of investments in. Actually, in Africa, there is an increasing need to make sure that infrastructure can keep pace with the very positive economic growth.

Africa is growing around 6 percent per year, which is fantastic and but that also requires a huge investment. And that is really where our group is ready and prepared to engage with governments and authorities to make sure that these investments are very timely so that it doesn't hamper future growth.

CURNOW: And also the huge criticism that there's not enough intra- African trade.

JAKOBSEN: No, I mean, if you take Europe as an example, more than 70 percent of Europe's trade is into European. But if you take Africa's trade, it's 10 percent in total and only 5 percent for containers, actually. So that's a huge opportunity to develop more trade between African countries.

And we definitely see that as one of the opportunities for our group in the coming years, both our waterways but also over land, so make sure that we can facilitate an increasing trade between the African nations as they innovate, develop different expertises.

CURNOW: If you look ahead at the next 10 years, what do you think more Africans will be exporting?

JAKOBSEN: I definitely see a trend towards adding more value to the richness of raw materials that exist in Africa. But interested of exporting it in a raw form, we will actually see an increasing amount of value added on in Africa.

CURNOW: The big story for many people has been an issue of piracy. There seems to have been a drop in piracy off the east coast. But it picks up on the west coast.

How has Maersk dealt with that?

JAKOBSEN: Well, it's a huge concern for us. We think it's actually not an issue that can be solved by the shipping lines per se. It's really an international community issue and something that has to be dealt with on land, to deal with what this really is is organized crime, as far as we see it. And the downfall -- downside of this is, of course, it adds a lot of cost.

And in the end, that cost is passed onto the consumers in these countries. And that's not really what Africa needs at the moment. We need to continue the positive growth we have so we have (inaudible) extremely concerned. And we like to see that issue dealt with more decisively by authorities and international bodies.


CURNOW: Well, that was Lars Reno Jakobsen from Maersk, talking about growth in Africa.

Well, after the break, we're going to look at how South Africa is looking to compete with India as it tries to grow its call center industry.




CURNOW: Cheap labor and good English speakers -- that's what initially attracted companies to open up call centers in India. Well, now, those same companies are looking to South Africa for exactly the same reasons.


CURNOW: You call your bank's customer services number or someone rings you, selling financial services. The person at the end of the phone may be sitting in a room like this. They'll very possibly have an Indian accent. But as the government here tries to grow its call center industry, they hope the person calling you in the future will be a South African.

UNIDENTIFIED FEMALE: (Inaudible) speaking to (inaudible). I'm calling you from direct China.

CURNOW: (Inaudible) is famous for its beaches. But it could become known for its call centers like this one that has recently opened up by a British company.

Philip Lightfoot is the CEO of Coracall. He chose to open in South Africa over other international call center destinations.

PHILIP LIGHTFOOT, CEO, CORACALL: We looked at India, three destinations throughout India. We looked at the Philippines. The main reason for coming to South Africa was the pool of talent that was available to us.

CURNOW (voice-over): The 300 staff working here, many of whom happen to be from Durban's large Indian community, are calling the U.K. asking about customer satisfaction for major car companies. Philip Lightfoot says a call from South Africa is not palatable for some of their customers.

LEIFERT: For the U.K. in particular, there has been a stigma around the Indian accent. South Africa as a destination, because it has such a neutral accent and especially Durbanites having such a neutral accent, means that the U.K. population is receptive to speaking with individuals from South Africa.

CURNOW (voice-over): But some staff say not all calls go smoothly.

UNIDENTIFIED MALE: I do have a lot of calls where I do have trouble being understood, whereby people do not understand exactly what I'm trying to say.

UNIDENTIFIED FEMALE: Usually, our Scottish customers have a bit of a difficulty understanding us, I guess, because of their accent itself. They're used to communicating with people of their same accent.

CURNOW (voice-over): There may be some miscommunication in this fledgling call center, but the South African government has been quite explicit. It wants this industry to grow and to compete with the likes of India and the Philippines.

And it's starting to.

The industry grew over 85 percent from 2007 to 2010. Ten thousand people are employed in the center, but this is estimated to rise to 40,000 by 2015.

(Inaudible) two examples of large companies now using South African call centers.

UNIDENTIFIED MALE: The industry's grown exponentially over the past 10 years. We are a new comer into this industry. I've seen the industry grow from a few thousand agents to tens of thousands.

CURNOW (voice-over): (Inaudible) runs this call center in Johannesburg. They have offices in Durban and Cape Town. He attributes the growth of the (inaudible) to the incentives put in place by the government. This includes grants for investment, training and tax breaks for creating jobs.

UNIDENTIFIED MALE: it's had a massive impact. It's made the industry much more competitive in terms of attracting offshore investment into the country. We can now, you know, compete with other offshore locations, such as India and the Philippines much more favorably.

CURNOW (voice-over): (Inaudible) South African government, there are incentives, too. This is a labor intensive industry and one that is proving lucrative. Between 2009 and 2010, the industry made nearly $250 million in exports. Other African countries are beginning to look at this industry with interest.

UNIDENTIFIED MALE: It's incredible, the amount of commitment that African countries are making through this industry.

CURNOW: (Inaudible) call center provides services for Samsung and a satellite television provider, Multichoice (ph). His company has started providing the technology for businesses opening their own call centers in other parts of Africa.

UNIDENTIFIED MALE: The growth in this industry is phenomenal. And if you look at the prospects that we're faced with over the next 4-5 years, it's a very exciting space to play in.

As a result of that, the African states are particularly the neighboring states have started to notice this.

CURNOW: According to (inaudible), it's not just the size of the industry that's changing. He says picking up a phone is verging on antiquated.

UNIDENTIFIED MALE: Contacts into agents -- and notice I use the word contact, not call -- because it's now a customer contact, and it can come in a different form of contact -- email, Web, self-service or Web chat. It can come in as a fax for that matter. We don't really care.

It can come in as a tweet or it can come in as a Facebook post. Any of these transactions are now being managed on our platforms over and above just taking the calls.

CURNOW (voice-over): These are all the things that this man had to learn fast. He was working as a security guard at the call center when he heard they were recruiting. He had never used a computer.

UNIDENTIFIED MALE: They gave me a computer in the guard room and what I didn't know, with the help of I.T. guys and the training department, they were ultimately help me to learn a lot. So when I was given that opportunity then I grabbed it with both hands.

CURNOW (voice-over): India's call center industry remains the world leader and even with its growing labor costs, South Africa is unlikely to compete head-to-head. That's what people like Mazhinzi (ph) is providing better job prospects. And for some U.K. customers, it's also offering a welcome alternative on the accent.

UNIDENTIFIED FEMALE: Is there anything else (inaudible) that you wanted me to assist you with?


CURNOW: Well, that's it from us here in Cape Town. Thanks so much for watching. Remember, you can always find us online at But for me, Robyn Curnow, see you again next week.