CNN CNN


 

Return to Transcripts main page

QUEST MEANS BUSINESS

Obama Rejects Republican's Fiscal Cliff Plan B; Canadian Finance Minister Says Fiscal Cliff Will Be Bumpy Ride; US, European Markets Up; Instagram May Sell Your Photos Without Compensation; Euro, Pound Up; Christmas Rush; Singapore Trade Hub; Romeo Beckham for Burberry

Aired December 18, 2012 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


RICHARD QUEST, HOST: It's being called a quick fix on the fiscal cliff, and it has already fallen flat. Also --

(BEGIN VIDEO CLIP)

JIM FLAHERTY, CANADIAN FINANCE MINISTER: Well, I think we need to fasten our seatbelts, quite frankly, because it could be quite a bumpy ride.

(END VIDEO CLIP)

QUEST: It's a warning from Canada's finance minister that the U.S. is dicing with danger on the cliff.

And your photos, their opportunity. Instagram's new terms. It sparks an instant backlash.

I'm Richard Quest. We have an hour together, and I mean business.

Good evening. We start with the fiscal cliff, and President Obama has rejected the Republican so-called Plan B to avoid going over the cliff. The president said the plan would never have made it through the Senate.

So, what was this Plan B? It was a short-term deal that would have kept the Bush tax cuts for every American except those earning $1 million or more.

With two weeks to go until the deadline, the House speaker John Boehner had wanted a stop-gap measure to protect the vast majority of wage earners in case Congress failed to reach what they're calling the grand bargain. But just bear in mind: there are just 14 days to go, and we will monitor them on the fiscal cliff.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I think -- we all know that every income tax filer in America is going to pay a higher rate come January the 1st unless Congress acts. So, I believe it's important that we protect as many American taxpayers as we can.

And our Plan B would protect American taxpayers who make $1 million or less and have all of their current rates extended.

(END VIDEO CLIP)

QUEST: Dana Bash is in Washington for us tonight and joins me now. Good to see you. We -- the fiscal cliff, the Plan B, was it ever a runner, or was it just the Republicans putting something into the field?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: I think it's something -- it's for sure something that Republicans are putting into the field, but this, it's just -- the latest negotiating tactic, but a very, very aggressive one.

This is the speaker's opportunity, or at least his decision to try to push the president on what he wants even further. And what he wants, of course, are bigger spending cuts and lower tax revenues to get to that about $2 trillion that both sides are looking for to deal with the national debt, or the deficit here in the United States.

Democrats I talked to say that they simply -- they're not even sure it will pass the House. Probably will, but it is likely dead on arrival when it gets to the Senate. And it's pretty clear that the speaker is just trying to use it as a way to, as I said, push the president to come more his way on their big picture talks.

QUEST: So, gut feeling, because you've covered Congress and you know Washington, people are digging in on both sides, but we see some movement already. So, ultimately, where -- who's winning and who's losing, I suppose is the core question?

BASH: Well, politically, it really depends on how this shakes out. The Republicans clearly understand that they have a losing hand right now. The Democrats have the leverage if for no other reason, Richard, that if nothing is done, if there's no deal and nothing is done, everybody's taxes will go up on January 1st, and Republicans, politically -- look at every single poll -- will get the blame for it.

And nobody wants that on a policy level, either. So, that's why the speaker is trying to sort of inoculate himself politically by pushing this million-dollar bill. And we expect a vote on that on Thursday, so he can at least say, "Aha! I tried, I tried to prevent everybody from getting a tax increase except for those millionaires."

But I like to be an optimist. I've covered this place long enough that I have watched all the sausage being made and the machinations going back in forth, but at the end of the day, you do get some sort of deal.

Having said that, that might be nostalgia for the way it used to be around here in Congress, and more recently, the big question is, will they get a deal? Not what kind of deal they will get.

QUEST: Dana Bash, 12 days before the fiscal cliff deadline. We will watch it and count them down one by one. Dana Bash joining me from Washington.

So, Plan B. If it doesn't work, then everything hinges on the so-called Plan A. The shape of that deal has become a lot clearer over the last few days.

Now, this was the Plan B -- I'm sorry, the Plan A, Obama and Boehner gradually starting to come together on the question of taxes and the big movement that is actually being made, particularly by the speaker of the House, John Boehner, who was reluctant to raise any taxes to begin with.

No one -- but there we go. Now, he's moved forward and he has said he will have tax raises on anyone over $1 million a year. So, that's on that side.

The president has also moved towards. He'd originally said he wanted higher taxes on anybody over $250,000. Now, the president has come forward and said it's $400,000 before he would accept that.

So, you start to see under Plan A that they are coming closer together. It's not only on the tax side of the equation. If we look at the cuts as well, here again you see Boehner, John Boehner, the speaker, was seeking $800 billion in spending cuts, social security, and health care. The president had said he only wanted $400 billion, only $400 billion. And the president's now put social security cuts.

All in all, put it all together, and he's promised an extra $130 in other cuts. The two sides are moving much further together. Bearing in mind also that they have to keep their own constituencies onboard at the same time.

So, in that scenario, where you do have some very entrenched positions, the rest of the world is looking on with askance and worry. Canada's finance minister says the next few days will be a bumpy ride. Jim Flaherty told me on the line from Canada that business there is already worried about the gridlock south of the border.

(BEGIN VIDEOTAPE)

FLAHERTY: Well, I think we need to fasten our seatbelts, quite frankly, because it could be quite a bumpy ride in the first quarter of next year if the Americans don't deal with this issue.

We've had conversations -- of course, I have with the administration and with Republican leaders. We're hopeful they will at least have a patch in place for January and February. Otherwise, it'll be a slow first quarter in the U.S..

QUEST: Does a patch do the trick, or does it just buy time, which would have to be then put in place for a bigger deal, which of course nobody can realistically expect in the short amount of time left.

FLAHERTY: I think that's right, Richard. The danger is that this goes on for a prolonged period of time, and then we see what Ben Bernanke has talked about, that is a 4 to 5 percent drop in U.S. GDP growth next year, and that would affect, of course, my country negatively.

So, what we need to see is progress, and so during the early part of the year that they get to an agreement on taxed and on spending entitlement issues in the U.S..

QUEST: Are Canadian business leaders now telling you that they are worried and that they are starting to make or put off investment decisions or altering their plans because of what could happen with the fiscal cliff?

FLAHERTY: What's happening is that they're hesitating. There's too much uncertainty, there's a lack of confidence. That's true not only in Canada, but also in the United States.

There's a huge amount of capital sitting on the balance sheets of corporations in the U.S. and in Canada, trillions of dollars, and we need to get that money into the economies of North America -- and the globe, for that matter -- so that we can have more economic growth, more job creation around the world.

QUEST: What's going to be your biggest concern, do you think, as the year turns?

FLAHERTY: As the year turns, it's certainly the fiscal -- not cliff, but fiscal decline in the United States if this is not dealt with.

There's some brinksmanship going on there, which I hope will be set aside so that we have a good first quarter in the United States, which will be good not only for Canada, it will be good for Europe, it will be good for the entire global economy, and create that confidence and lack of uncertainty that will get the American corporations reinvesting in their economy.

Once we get that swoosh of capital into the American economy, the results are going to be very positive around the world.

(END VIDEOTAPE)

QUEST: And we'll hear more from the finance minister of Canada later in the program.

Wall Street's been optimistic. The big board is up, it's up 114 points. Now, that's quite an impressive performance, since there's not much economic or corporate news to actually entice or extract for the market. Instead, it is fiscal cliff, and it's up 114, which is nearly 1 percent.

European markets also felt the benefit. A bit of optimism pushed all four indices. I'll get out of the way. Not the best of gains, just a half a percent in Frankfurt, similar sort of amounts in London. The lowest, of course, was in Zurich and the SMI.

One piece of news after the close: S&P's raised Greek rating. It's no longer in selective default. It is now at a new rating of B Minus.

Now, look, we have to put that into context. We knew it was going to happen. It follows the discounted buyback, the bond buyback, which has now come to a conclusion, so we knew that was going to take place, but it's a positive move nonetheless for the Greek economy.

Coming up next, it's a case of your photos and their rules. Instagram: the memories, the private moments, the artistic compositions, and they're going to flog them.

(RINGS BELL)

(COMMERCIAL BREAK)

QUEST: From January the 16th, your Instagram photos will be for sale and you won't receive a penny piece for them. These are the new terms and conditions for the photo effects and sharing site.

Now, there are 18 pages of them, the sort of boilerplate stuff that we're well used to reading with these things. But I would draw your attention to page 4, under the section on rights, where it says that Instagram does not claim ownership of any content you post, but does say that you will agree "that a business or other entity may pay us to display your likeness and photos without compensation to you."

What does that mean? Facebook, which bought Instagram for $1 billion this year, doesn't claim ownership of your content, either. It does specify that you can control how your content is used through privacy settings.

Twitter says you retain your rights to any content you submit. And like Instagram's new rules, Twitter says that it does have a right to use or share your photo without compensating you, but you can opt out.

What has people up in arms about this lot is that it says, well, there's no opt out. You can get rid of your account or you have to let them use your likeness if they so wish.

Jeffrey Cole is the director of the USC Annenberg School Center for the Digital Future. He joins me now from New York. What do you make of Clause 2 in the rights section?

JEFFREY COLE, USC ANNENBERG CENTER FOR THE DIGITAL FUTURE: It's absolutely -- it's outrageous. Facebook and Instagram know that. When Facebook bought or made the deal to buy Instagram for $1 billion, a surprising number of Instagram users closed their accounts because they didn't want to be bound by Facebook's policies.

The idea that you lose all rights, that even people under the age of 13 or your friends who happen to be in your pictures, can find themselves in an advertisement is absolutely shocking. I don't think it's going to work.

QUEST: But it's --

COLE: I think you're going to --

QUEST: Hang on. The sheer number of pictures on the site. They say here that they can advertise around them, so they can put adverts on the page. But is it your understanding that Instagram could literally flog the pictures to be used by third parties in non-Instagram sites and magazines or newspapers or whatever?

COLE: There's nothing in the rights that prevents that. It's clear they can be used for any purposes. It's not just their members. And think about -- we now know that the iPhone's the biggest-selling camera in the world. So, we know that these are pictures people are taking in everyday activities.

Think about Newtown, Connecticut. If you had a family of a child who was murdered who took a picture and sent it, it could theoretically -- not even theoretically -- it could end up being used in an ad or some inappropriate place. The idea that you lose complete control is counter to everything we're seeing in privacy today.

QUEST: OK. In -- the rules -- we'll pause for a second. The rules are getting a mixed reaction and reception online. Twitter users say, Common Sense in Alberta writes, "Dear Instagram. Do note, any kid with $200 can build a system to replace you. You are not rocket science."

Jeffrey Graham in Atlanta is writing, "Reminder: if you aren't paying for the product, you are the product."

And Andrea Caumont from Arlington tweets, "I wish I was so rich I could pay a billion bucks for something and then smash it to bits."

Back to Jeffrey Cole. Look, all these people are hot under the collar, but the fact is, are they going to vote? Are they likely to vote with their feet and close their Instagram accounts?

COLE: We think they are. We think they will vote. We think Instagram will probably respond to this. But take a look at one of your tweeters talked about choice. Take a look at one of the biggest photo sites out there right now, Snapchat, which has its own problems.

But Snapchat works because you send a picture to somebody and it disappears within ten seconds. Put aside the concerns about risky behavior it might engender. But we are seeing now people may want sites where they can control or make sure the pictures disappear.

QUEST: Jeffrey, my final question is then, how did Instagram think that they were going to get away with this? I've read their statements. Their statement says it's to make Facebook and Instagram work better, it's for a better user experience, and all the usual things. How do you think they thought they were going to get away with it?

COLE: We have absolutely no idea. Pinterest tried something like this and had to back off. As I'd mentioned, when Facebook took over, Instagram users, some of them, said we don't want to be in this Facebook world with no privacy.

I would have to think that sliding it in December 18th and hoping that it got sort of caught up in all the news that's going on and holidays maybe they thought nobody would notice, but in an internet world, that's a pretty foolish idea.

QUEST: Jeffrey Cole, we can always rely on you to come on QUEST MEANS BUSINESS and talk good common sense on the question of the newfangled social media.

COLE: Thank you, Richard.

QUEST: Good to see you, Jeffrey Cole joining me.

@RichardQuest is where you can, of course, have your point of view, and you and I can have a discussion and a debate on what we're talking about, @RichardQuest. We may as well use social media since that's what we are talking about.

Time now for our Currency Conundrum. The U.S. Mint has announced the design selections for the 2013 presidential dollars, four coins featuring past presidents. They're released every year. The program started in 07.

Who is the first president to feature next year? William McKinley, Theodore Roosevelt, or Woodrow Wilson? You've 25 minutes to work it out. Not sure you can work it out. Might have to be a guess.

The fiscal cliff optimism pushing up the euro and the pound. The single currency is at a seven-month high against the dollar. The pound has put a third on of a percent. Those are the rates --

(RINGS BELL)

QUEST: -- this is the break.

(COMMERCIAL BREAK)

QUEST: There's just one week to go until Christmas. If you haven't sent your parcels to Mum in Mexico or Dad down under, well, it's probably just about too late to do it. Well, almost certainly by regular mail.

However, DHL's Christmas deadline for UK postage is today. The delivery giant's been moving parcels between Singapore and Europe for four decades. Yesterday, we took a look at the planning on the parcels front. Today, the coordination of containers.

Maersk is the world's biggest shipping company: 500 vessels, nearly 2 million containers. When I was in Singapore, I went to find out what it takes to make this massive operation work.

(BEGIN VIDEOTAPE)

BJARNE FOLDAGER, MANAGER FOR SINGAPORE, MAERSK LINE: We have about 40 ships that cause Singapore every week, 40 container ships, bringing -- connecting the continent between Asia and -- Europe and Asia and North America.

The Thuro Maersk can carry about 15,500 20-foot containers, and they carry everything we need in everyday life: DVD players, TV screens, kitchen goods, clothes.

QUEST: How much does this ship cost?

FOLDAGER: The value of the goods aboard the ship is probably a higher value than the ship itself.

QUEST: They call this part of the ship "monkey island," and from up here, you see the size and scale. It's really quite simple: you take the containers from Europe and you drop them into Singapore, and then you take the containers from the dockside and put them back onboard. Oh, and you've got to do it all as fast as possible.

STOICA MARIAN, SECOND OFFICER: We don't waste time. We do our best to finish in time and to leave for the next port. Small problems, you always fix them.

QUEST: How many containers will you change here in Singapore?

MARIAN: 6,500 moves we have.

QUEST: What do you do if the one you want to take off is right at the bottom?

MARIAN: Normally, the planning is done in such a way that the container you have to discharge has to be on the top, so there's no inconvenience. But if there is any inconvenience, there's a number of vistas you have to do before you can take the one on the bottom. And of course, these vistas are not very good, because it costs money.

FOLDAGER: The longer time the ship's on port, that means that we have shorter time out at sea. Shorter time at sea means we need to sail faster, and that means more fuel.

We probably start shipping the goods for Christmas here in August, September so it arrives in time. Even those goes on the containers here.

QUEST: It's quite an extraordinary size and scale. I know you do this every day.

MARIAN: Yes.

QUEST: But do you ever stop and think about just how big this thing is and how much is being moved?

MARIAN: You get used to it.

(END VIDEOTAPE)

QUEST: Now, when we come back, I will have a full update on the news headlines and also we'll look at, in the wake of the Friday school shooting how some investors have decided that the firearms industry is no longer to be part of their portfolio.

Not only is this a watershed in the political arguments on gun control, but also gun ownership of the companies themselves. QUEST MEANS BUSINESS, good evening.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. This is CNN and, on this network, the news always comes first.

Barack Obama has backed a bill to ban assault weapons. There's been increasing pressure on the White House to tighten gun laws after a school shooting left 26 people dead on Friday.

(BEGIN VIDEO CLIP)

QUEST (voice-over): Funerals continue today for the victims of the shooting. Mourners held services for 6-year-old Jessica Rekos, and James Mattioli was also laid to rest.

Schools in Newtown, Connecticut, are open today, except for Sandy Hook Elementary, which remain a crime scene. Twenty children and six adults were killed there, as you're aware. It isn't clear when the survivors will return to classes at different school buildings.

Two Iraqi officials say President Jalal Talibani has had a stroke. The 79- year old was rushed to hops on Monday night and is in intensive care. The president's office will only say it had a health emergency. Talibani was elected president in 2005.

A team from the American news network NBC has escaped from their captors in Syria. The chief foreign correspondent, Richard Engel, and his team were held captive for five days by armed gunmen who threatened to kill them. The journalists escaped during a firefight at a rebel checkpoint.

A U.S. federal judge has ruled that Samsung can keep selling phones which infringe Apple patents. In a separate ruling, the same judge denied Samsung's request for a retrial. The case relates to its (INAUDIBLE) pay Apple more than a billion dollars in damages for infringing patents.

(MUSIC PLAYING)

(END VIDEO CLIP)

QUEST: Cerberus Capital Management is selling its stake in Freedom Group. That's the company that makes the rifle that was used in Friday's school massacre.

In a statement today, the private equity firm said, "We believe this decision allows us to meet our obligations to the investors whose interests we are entrusted to protect, without being drawn into the national debate."

Maggie Lake is in New York.

Maggie, let's -- nothing we say now will in any way detract from obviously the events or, indeed, the sadness of a day of more funerals. So why did Cerberus decide to do this now? And what's the motive, the real motive behind it, do we -- do we believe?

MAGGIE LAKE, CNN CORRESPONDENT: Yes, well, we -- from what we can discern from what they said, Richard, you get a sense -- you know, everyone's been asking, is this a tipping point in the gun conversation in the U.S.? And that is going to be an answer that takes a long time to get to.

But from what we can see from the commercial side, the financial side of things, there certainly seems to be change happening and fallout happening.

So Cerberus is a private equity firm. They say they're responding to their clients. The client we believe they're referring to is the California -- large California pension fund for teachers, if you can believe that. Calsters, they're known as. When you have $154 billion under management, when you talk, your clients listen. And they are investors in Cerberus, directly.

They released a statement today, saying after this incident, and in direct response to this incident, they went and reviewed all of their holdings, saw this was (INAUDIBLE) portfolio and decided that change needed to be made, because it's not just about the financial potential, but also social and environmental.

And you can imagine as a teachers' pension fund, this is not a group that they wanted to be holding onto. And Cerberus responded immediately.

QUEST: If we take the industry overall now, retail sales, I mean, the sale of guns in America, we know, of course, that sometimes they will go up for fear of more legislation and restrictions and also some people will be buying them because they believe that they're about to form a defense following on from the recent atrocity.

On the other side, we also know that there's more rules coming on.

So Maggie, pull the strands together for me tonight.

LAKE: Yes, so, Richard, you know, anecdotally what we're hearing, especially from small gun shop owners is that they are seeing increased gun sales as we have seen in other incidents like this, a lot of it this time seems to be stemming from the fact that because of the outcry, because of some of the things that we are seeing, some of the politicians who are formally for guns, pro-gun, are now saying, you know what, maybe we need to rethink this. They seem to be shifting their position, that people are going out and buying.

However, you are seeing some retailers change whether they're willing to sell. Dick's Sporting Goods is a big nationwide sporting goods shop here. A lot of parents go to buy baseballs and basketballs. But in the U.S., these stores also sell guns. They are now banning the sale of certain semi-automatic rifles across their stores in response to this incident in sympathy with the families.

QUEST: Maggie, we've got to be brief here, but from what you're seeing of the debate in the United States -- I understand you're seeing it, you know, it's your assessment, if you like, are people -- is there a consensus yet on whether this is the tipping point?

LAKE: There's not consensus, but there is a lot of evidence pointing to the fact that it is some sort of tipping point, Richard. You're hearing things from people who haven't said it before; you're seeing financial repercussions, whether we're talking about the stock drop, whether we're talking about the policy change from retailers. These are things that had not happened after these other mass shootings. They're happening now.

Whether it continues is another issue. I will just end on the point that you cannot underestimate the influence and money of the NRA. They are a big part of this. They have been silent. Let's hear -- see if we hear from them before we can decide whether it's a tipping point.

QUEST: Maggie Lake, who will continue to watch this side of the story for us on QUEST MEANS BUSINESS, Maggie, good to have you as always.

A new start on a new continent. Canada's finance minister tells me after the break why Mark Carney is up to the challenge of being the next Bank of England governor. It's QUEST MEANS BUSINESS. (INAUDIBLE).

(MUSIC PLAYING)

(COMMERCIAL BREAK)

QUEST: Canada's finance minister says the Canadian economy can keep growing despite the challenges for around the rest of the world. It's having to weather the fiscal cliff storm to the south from the U.S. And across the Atlantic, the Eurozone crisis. I asked Jim Flaherty if the main threats to Canada's economy these days came from outside its own borders.

FLAHERTY: That's where the sharks come from, that's for sure. But you know, we control what we can control within Canada and a lot of our spending, of course, is domestic, the spending. And we're very conscious of our obligation to control that. We're moving back to balanced budgets after a big stimulus program during the Great Recession, so we're on track and our provinces are on track, too. So we're in a good place relatively speaking. The Canadian brand is strong; we have lots of foreign direct investment in Canada. And we have lots of trade expansion happening.

QUEST: The fragility in your potential growth -- I saw this morning the numbers Deutsche Bank came out with their forecast for G-8 countries. I mean, you are forecast next year and the year after to grow faster than everybody else. But the risk, of course, is on the downside for you.

FLAHERTY: And, yes, that's right, Richard. And I've been -- I've been in this job for about seven years now, and I'm used to forecasts and I'm used to forecasts not coming true. So we do forecast in a conservative way here, in a modest way. We listen to the private sector economists. We are anticipating modest growth for Canada next year. But we plan on that. And we know that we can manage the finances of the country, keep things going in the right direction, even with modest growth.

QUEST: You're going to lose your central bank governor next year, as Mr. Carney goes across to the Bank of England. You'll be sorry to see him go?

FLAHERTY: Well, yes. You know, the Bank of Canada, the governor has done a very good job here over the course of the years. I've known Mark for a long time. He was my senior associate deputy minister before we made him the governor of the bank, and as you know he's involved with the Financial Stability Board as the chair there. So he's had important roles; he has important roles. He's done a good job at the Bank of Canada and we wish him well.

QUEST: What do you think he brings? One central banker I spoke to privately said that Mark Carney was one of the brightest central bankers of his generation. What has he brought to your table?

FLAHERTY: Stability. The Bank of Canada has a limited mandate. The Bank of England is going to have a much larger mandate next, next year in terms of regulatory powers. But here in Canada, our bank is responsible for controlling inflation pursuant to an agreement with me and with the government, and also with maintaining monetary policy that the Canadian dollar and interest rates.

So it's a more limited mandate than he'll have with the Bank of England, which will be a large challenge.

QUEST: It's been one of those interesting days where there's been lots of lively stories in the business world. A bit of this, a bit of that, and a bit of the other. Iceland, for example, is a step closer to joining the European Union -- not a big step, just a little itsy-bitsy step. The country's now opened talks in 27 of the EU's 35 policy areas known as the "Chapters". And it has completed 11 in its bid to become a member of the EU.

The Icelandic government, though, is still deeply divided on EU membership. Earlier last month, I asked Iceland's president whether or not he's in favor of EU membership.

(BEGIN VIDEO CLIP)

OLAFUR RAGNAR GRIMSSON, ICELANDIC PRESIDENT: We are here in the middle of the North Atlantic. Our neighbor to the east, Norway, is outside the European Union. Our neighbor to the west, Greenland, decided to leave the European Union. And when you look to the future of the Arctic, which is gradually becoming one of the most important playing grounds in the 21st Century world economy, I believe Iceland is better placed to benefit from the future of the Arctic by maintaining our present position rather than to let the European Union speak on our behalf.

QUEST: If it came to a decision on EU membership, would you insist that it goes to a referendum?

GRIMSSON: Absolutely. Absolutely. That's what I said in the presidential election earlier this year. And I was voted back into office for the fifth time on the basis of this promise.

QUEST: So you'd wield the veto pen again.

GRIMSSON: Absolutely, absolutely.

(END VIDEO CLIP)

QUEST: President Grimsson there. Iceland has now started negotiations on more chapters.

Deutsche Bank today told us that Europe and the United States are holding back the global economy in its outlook for 2013. It expects just 1.1 percent growth in G7 countries next year. Now if the U.S. goes over the fiscal cliff, Deutsche says 25 million jobs worldwide could be lost.

The chief economist said that the shape of the next 12 months will be decided in the next few days.

(BEGIN VIDEO CLIP)

PETER HOOPER, CHIEF ECONOMIST, DEUTSCHE BANK: The events in just the days and weeks ahead critical to how we start the new year, critical to how much fiscal drag and, more important, how much uncertainty, policy uncertainty, there is. This is what's been holding back growth during 2012. We expect it to be there but somewhat diminished in the first half next year. And then there is -- there are some important milestones along the way as we go through the winter and the spring, but no question that events in the very near term will be setting the stage.

QUEST: Anybody watching tonight who will be wondering what on earth to do next year with their portfolio, with their risk balance, with their appetite for investments, is it -- is next year, is 2013, going to be a year for gains in one's portfolio or just once again capital preservation?

HOOPER: I look for 2013 to be a year of transition in a favorable direction. Yes, there's a lot of challenges and there's certainly a good deal of risk out there, but the movement we're starting to see in the direction of compromise in the U.S. is encouraging dealing with the fiscal cliff. Going to be a major challenge to deal even more effectively with the mountain of debt beyond, but I think, near term, it's going to take some pressure from the markets, it's going to be painful, but my expectation as we get into a second half of next year, it is -- it will look better and the market is going to end substantially higher by the end of 2013.

(END VIDEO CLIP)

QUEST: And you can be sure of just one thing -- we will of course be playing that back as the year goes on and let's see if he still is correct as the year moves forward.

The Queen, Queen Elizabeth II, has become the first British monarch to attend a Cabinet meeting of the British government since 1781 during the U.S. war of independence. That is, of course, a peacetime Cabinet meeting.

The Prime Minister David Cameron welcomed her to the session. He noted that Anglo-American relations have improved somewhat since then. The Queen, who actually sat in the Prime Minister's chair, met with ministers who presented her with a set of 60 placemats to mark her 60 years on the throne.

I suppose if you're the Queen, you often have 60 guests. You'll have plenty of room and have need for 60 placemats.

Anyway, while she was there, she went across to the Foreign Office, the Department of State, and part of Antarctica is also to be named in her honor. Queen Elizabeth Land, which was previously unnamed, is almost twice the size of the U.K. There are no permanent habitants apart from several species of seals and penguins.

Now, if the Queen was to visit her new land in Queen Elizabeth Land, just how cold is it? How miserable is it? Meteorologist Jennifer Delgado is at the CNN World Weather Center. This new Antarctica bit she's got as a gift -

JENNIFER DELGADO, AMS METEOROLOGIST: Yes, it is a gift. And you know, you ask me how cold is it? Well, keep in mind it's Antarctica, so it's summer down there. So, Richard, it's actually pretty nice. We're talking about a lot of sunshine out there as we help you visualize this trek from England all the way down to Antarctica. Of course, this is a long trek. You've got to pass over the Equator, and when you get down south, there is Queen Elizabeth Land.

So you want to know is the weather better there now in comparison to you? In fact, it is, because we're actually seeing temperatures being the warmest for any time of the year. And that's because we have 24 hours of sunlight. So the penguins and the seals that Richard was just talking about, they're soaking up the sun.

Now let's talk about weather across parts of Europe and we do have some very active conditions out there. We're watching a low -- that is spinning, you can see, just to the east of the Adriatic Sea. This has been producing a lot of snow and we're talking more snow on the way.

Let's go to some video coming out of Poland. And wouldn't you know, more of it continues to come down. People are asking, "Will we see a White Christmas?" Well, in Poland, I think it's a pretty good chance that snow's going to be on the ground for the next couple of days. It has been building up. In some of these locations, it's about 25 centimeters.

As I take you over to our graphic. For England, well, guess what? We have a low out towards the west and it looks really impressive right now but we are going to see more showers working in for areas including Ireland, Northern Ireland. It's really not going to be bad in comparison to how much snow's been felt through parts of central as well as southeastern parts of Europe. Look at that.

For new snow for some of these locations, we're talking 13 centimeters and more of that's going to stick around through midweek. As this low shifts over towards the east, it is going to continue to bring more of that snow and it's also going to be affecting areas like eastern parts of Turkey. But for Sofia, I don't know if a lot of people are going to be traveling in this direction, Richard, there's going to be a lot of travel delays there. We're talking in some of locations about 30 centimeters of snowfall.

It's actually pretty mild over there where you are right now and it's going to stay that way.

QUEST: And we like that.

DELGADO: For the next couple of days. Not forever.

QUEST: We'll see you in a couple of days. Thanks. Jennifer Delgado at the Weather Center.

QUEST MEANS BUSINESS, we're back in a moment.

(COMMERCIAL BREAK)

QUEST: The answer to today's Currency Conundrum. Who will feature on the first 2013 presidential dollar next year? The answer, A, the 25th U.S. president, William McKinley. He'll be followed by Theodore Roosevelt, William Howard Taft, and Woodrow Wilson.

There was a time many years ago when I could right through all the presidents in order.

Romeo Beckham is the new face of Burberry. The 10-year-old is stepping into the flashbulbs, part of the spring campaign. He's widening the Brand Beckham to a whole new audience as Jim Boulden explains.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: A cheeky smile plus an umbrella and 10-year-old Romeo Beckham takes center stage for Burberry's Spring 2013 campaign.

Romeo is already one of the world's most photographed children, whether at sports matches in Los Angeles or just walking through airports. Romeo already made "GQ's" Best Dressed Men's List in 2011.

Romeo, of course, has a pedigree. Footballer father David and mom Victoria both have modeling in their resumes. And Burberry lined up an all star cast with photographer Mario Testino and Burberry's chief designer, Christopher Bailey, behind this campaign. Bailey has used other British celebrities in recent Burberry ads, most notably former "Harry Potter" star Emma Watson for the Spring 2010 campaign.

EMMA WATSON, ACTRESS: I've always loved fashion.

BOLTON: There were a few eyebrows raised then because well known faces can take the focus off of the clothes. But it's all part of Burberry's renaissance with huge new flagship stores built or remodeled in key cities around the world. It's also moved heavily into pricy children's clothing.

The brand behind the checkered pattern now using the son of Posh and Becks, the ultimate British celebrity couple, to tell the well off that 10-year- olds might just want a very British Burberry raincoat.

Jim Boulden, CNN, London.

(END VIDEOTAPE)

QUEST: But will he win pinstripes?

Profitable Moment, next.

(COMMERCIAL BREAK)

QUEST: So tonight's Profitable Moment -- Instagram wants to profit from selling your photographs and not surprisingly there's a backlash. The critics say it's all about money-making for its owners, Facebook. Instagram says it's the price of keeping the site free.

I'm guessing there will be a number of people threatening to close their accounts but not many actually will. Remember, we are more likely to get divorced than change our banks. We often promise but never actually do what we say.

As Jeff Reifman in Atlanta said, "If you aren't paying for the product, you are the product."

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

The news headlines are next.

END