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QUEST MEANS BUSINESS
Facing the Fiscal Cliff; Spain's Prime Minster Warns of Rough 2013; Surviving the Spanish Slump; European Round Up; Breaking News: Monti Willing to Lead Coalition; Author Says Volatility Good; Team Quest's, Viewers' 2013 Predictions
Aired December 28, 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: A cliff edge conference. The US president is hosting crisis talks at the White House anytime now.
An austere new year. Spain's prime minister says 2013 will be tough.
And feeling fragile. The author of "The Black Swan" celebrates volatility.
I'm Richard Quest. It may be Friday, but of course I mean business.
Just about an hour to go and America's political leaders will begin urgent talks aimed at keeping the US economy from falling over the fiscal cliff. Live pictures at the moment. This is -- well, you don't need me to point out it's the White House, and it is there that President Obama will gather the entire congressional leadership.
If Republicans and Democrats can't reach a deal in the next few days, come January the 1st, that series of tax hikes and spending cuts will kick in, and economists are warning it could push the economy -- US economy back into recession. These are the people --
QUEST: -- who'll be assembling with the president. There's the House speaker, John Boehner. He is the leading member, of course, in the House, along with fellow-Republican Mitch McConnell, the Senate minority leader. Those are the two at the top.
At the bottom of the screen there is Harry Reid, the Democratic Senate majority leader, and the House minority leader, Nancy Pelosi.
Now, in those four people on the right with the president you have the executive and the legislative leadership of the United States, and they are the five people that have to put together the deal. Of course, legislators then have to approve it, and we know that's not easy.
Four days to go before the measures take effect. After months of political deadlock, the chances of making a deal seem slim.
QUEST: Ali Velshi's in New York for us this evening. Ali, all right. Best-case scenario. The very minimum that needs to be done. What could they do?
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Think about this in two ways. It's a ledger. You've got income issues -- taxes -- and you've got spending issues. They have to deal with both of them, but the political wrangling is about the taxes right now.
The top income tax rate for Americans is 35 percent, the marginal tax rate. The Democrats want to raise that to 39.6 percent, back where it was before these Bush-era tax cuts came in 12 years ago. Republicans say no to that. So, that's going to be what the big battle is.
Now, that they can actually get a deal on. They can agree it's going to be 36 percent or 37 percent, they can agree on the threshold. People will pay it above a quarter million or half a million or a million. That's the kind of thing that they can hammer out.
The spending out is the bigger, bigger problem because all you can come up with are broad numbers. You can call it a trillion or a trillion-three, but the discussion comes down to what you cut. There is zero chance that they're going to hammer that out by Sunday night.
The logistics are that the Senate is in session, they can vote on anything at any time, as soon as a bill is written up. The House of Representatives, which is where the problem really is -- this is where John Boehner and Nancy Pelosi reside -- they will not come into session until Sunday evening, so that's the earliest at which we'll have some kind of a deal, and it would be that kind of a bare-bones deal probably at best.
QUEST: OK. So, the bare-bones deal. But even if they do a -- a patch, a fix, that gets them over this, and there's no grand bargain, whichever way we slice this, Ali, there is going to be austerity, and it really is just a case of how much.
VELSHI: Well, there's two ways you can do this without austerity. You're probably right, Richard, but if I were trying to be creative here, I would say there are two things you could do.
One is, you can make an absolute pledge to reform taxes in the United States, which would actually lower rates and broaden the base, so you'd have as much money coming into the government, but applied more fairly.
The other thing you can do is you can goose growth. The United States is probably 2.75, maybe 3 percent. This could be a hot economy in 2013 because of natural gas, oil, housing, and the possibility of a real, calculated infrastructure build.
So, Republicans would like to say that you can get more revenue out of growth without imposing austerity. They don't want austerity, they just want the government to spend their money more effectively.
Democrats say spending money more effectively is going to hit poor people disproportionately, and that's why they don't want to do it.
QUEST: But if we look at the range, back to your two sides of it, the revenue side, the taxing side, and the spending side.
QUEST: There are so many different, small, itsy-bitsy bits that have to either be renewed, reversed, changed that --
QUEST: -- whichever way this falls, there will be spending cuts in America --
VELSHI: Sure. Sure.
QUEST: -- and there will be tax rises in America. And that is -- that will have a contractionary effect.
VELSHI: Right. It probably is not going to end up being -- and I guess part of the issue is we associate austerity with the most recent examples that we've seen throughout Europe, and I don't think we're looking at anything of that flavor, because it won't be that drastic.
Look. If the Democrats get everything they want, people earning more than $250,000 a year will pay 4.6 percentage points more on every dollar above $250,000 a year. That is not catastrophic by any stretch. And in fact, it's lower than what most Europeans say. So, you're right in your definition. It's just not got that degree of severity attached to it.
QUEST: Ali Velshi's in New York and will be working over the weekend, and we'll see Ali on Monday when, of course, the last moments for the cliff. Ali Velshi joining us, many thanks, Ali, good to see you, have a good weekend.
We will have a special edition of QUEST MEANS BUSINESS on New Year's Eve, when we will be bringing the latest developments.
Jessica Yellin is at the White House for us this evening. So, so -- mise en place -- the parties are all in place. The scene is set. Can they get a deal?
JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, Richard, you're an optimist, so I will say yes for you, they can. But will they? There is not a lot of optimism here. This meeting is very important. It is sort of game, match, set. If they don't do it here, they won't do it before New Year's.
But it all -- if it all sounds too good to be true, what they'd have to have is the leaders agreeing to a deal, the senators agreeing that no one in their party will block it when it comes to a vote tomorrow, and the House members agreeing both to bring it to a vote in the House and that all the Democrats will come out and vote yes. It does sound a little bit too much to hope for, Richard.
QUEST: So, we go over -- or you, or we, the global economy, it doesn't really matter, we're all in this sinking boat together -- we go over the cliff and then they've really got to do a deal, and then they've got to try and backtrack on the -- on the damage that's done.
Jessica, is it your feeling it gets even more difficult after the weekend - -
QUEST: -- and after we go over the cliff? Because if you like, the old thing about virginity, once it's gone, it's gone. We could arguably say the same, once you're over the fiscal cliff, why bother worrying too much about it? Let's see what happens.
YELLIN: I like your analogy. The thinking -- the conventional wisdom in Washington is the opposite of what you suggest. The conventional wisdom is that once -- should we go over the cliff, the pressure will be so great on members that they will instantly forge a deal and get it done.
And that the only stumbling block for Republicans is that they cannot vote to raise taxes. But because going over the cliff will instantly trigger an increase in taxes, that will no longer be a problem for them.
However, I agree with you, and I think that there is a lot of logic to the thinking that this -- going over the cliff could make it even harder, because each side will get locked into their own position even more firmly.
QUEST: Were you planning on having a quiet weekend at home walking the dog and sort of taking in a couple of movies?
YELLIN: Yes --
QUEST: Maybe just doing a bit of cleaning out the sock drawer?
YELLIN: I was going to the Caribbean, but I'm told you cannot cover the White House from the Caribbean.
YELLIN: As it turns out. Oh, well. So, I'll be talking to you on New Year's Eve, I think.
QUEST: Many thanks. Jessica Yellin, who is at the White House for us this evening. Ali Velshi will be covering the business side of it. As you can see -- Jessica, we thank you. As you can see, we have the sort of team coverage, the depth, the range, the contacts, that frankly leaves everybody else standing here on CNN.
QUEST: It's already there, you can see the numbers. Just at 13,000, off nearly three quarters of one percent because of the flurry of activity.
Let's come back to this side of the Atlantic after the break as Spain's prime minister, Mariano Rajoy, hopes his austerity policies are starting to pay off. We speak to three people who have yet to see the benefits. They are in for an exceptionally hard 2013. QUEST MEANS BUSINESS, good evening.
QUEST: Spain's prime minster, Mariano Rajoy, has warned next year will be very tough, but he remains optimistic about the second half of 2013. As his country struggles to find a way out of recession, the prime minister has not ruled out asking the ECB to buy Spanish bonds. For now, he says, the help is not needed.
(BEGIN VIDEO CLIP)
MARIANO RAJOY, PRIME MINISTER OF SPAIN (through translator): We are not thinking about asking the European Central Bank to intervene in the secondary market by buying bonds, but this is a very useful option, which is there at the disposal of every country in the union.
And if Spain and its government think it is necessary to use it, then do not doubt that we will. But to this day, we do not have that in mind, but we do not rule out doing so in the future.
We still have a very hard year ahead, especially the first half, and we must persevere with the reforms we have taken on. The Spanish economy will continue in recession for some time, although we hope it shows improvement in the second half of 2013.
(END VIDEO CLIP)
QUEST: Now, if Rajoy fears 2013 will be a year of recession, you can see from where he is coming. Spain's unemployment rate hit 25 percent at the end of September. That number gets even worse. The youth rate is 52 percent, almost twice that, and factoring in, the outlook is gloomy.
The OECD predicts a 1.4 percent decline in economic output next year. It'll bring little comfort to job seekers in an increasingly crowded market. Our correspondent, Al Goodman, in Madrid, spoke to three people who have spent the year searching for work.
AL GOODMAN, CNN MADRID BUREAU CHIEF (voice-over): Jose Antonio Melgar was laid off nearly five years ago, around the time Spain's construction boom went bust. His unemployment benefits have run out, and his corner of Madrid provides just about his only income.
JOSE ANTONIO MELGAR, UNEMPLOYED CONSTRUCTION WORKER (through translator): Sometimes I have to leave here, because I'm depressed. My spirits are so low.
GOODMAN: In December, he finally got a job that lasted four days, guarding a factory being dismantled.
MELGAR (through translator): They pay me well, with lodging and meals. They gave me 100 euros a day.
GOODMAN: Now, he's decorated his jobless sign with the holiday spirit, despite a drop in his earnings at this corner.
MELGAR (through translator): Many of my clients, as I call them, have ended up like me, without a job.
GOODMAN: Simone is a Brazilian immigrant who works part-time in homes cleaning or caring for the elderly. She's lived six years in Madrid without a residency card and doesn't want her face shown. But she's been outspoken about thousands of illegal immigrants largely excluded from Spain's public health care system. A threat to her own recovery from breast cancer.
SIMONE, BRAZILIAN IMMIGRANT (through translator): I talk with my husband and children, who say, "Mama, be calm. There will be a solution." Well, I can only hope for one.
GOODMAN: Simone had surgery before her public health card expired last May. Since then, she's hunted for cracks in the system to get seen by doctors. In November, she got a break. A Spanish family sponsored her residency application.
SIMONE (through translator): My hope now is my working papers. Without them, the hospital won't see me.
GOODMAN: She might get residency early next year, and after that, a new health card.
Many others are not so optimistic. We met Valentin Garcia last June at a Red Cross distribution center in a Madrid suburb. He lost his job as a waiter nearly three years ago.
VALENTIN GARCIA, UNEMPLOYED WAITER (through translator): I am willing to work at any hour. I have experience in working any shift. I am not asking much.
GOODMAN: We talked to him again in October.
GARCIA (through translator): I don't know. I think it's gotten worse. To go around and see more stores, restaurants, and businesses closed.
GOODMAN: And in December, he was still without a job. Just three people caught up in the vast crisis in Spain, where the jobless rate tops 25 percent. Spaniards and immigrants alike may take comfort they made it through 2012, but 2013, experts say, could be even worse.
Al Goodman, CNN, Madrid.
QUEST: Now, let's take a look at some of the key readings on Europe's financial health, and you'll see exactly the sort of situation. Join me over in the library -- the Christmas library, a seasonal library, where I'm afraid there's not a huge amount of seasonal cheer.
France's third quarter GDP was revised down, according to the statistics agency. Now, it was up, and then it was down, and the number involved is a really rather small, up 0.1, down 0.1, so the best definition is to describe France's economy at the moment as stable. But there is no doubt that the slowdown is taking place in consumer spending, and that's a worry in the French economy third quarter.
Some more encouraging news: Italy's first big test since Mario Monti resigned. The country sold $4 billion worth of ten-year bonds at a rate of 4.48 percent. Now, if you remember that that rate was over 7 percent at the beginning of the year, 4.4 shows how much encouragement has come back into the market, largely because, of course, Mario Draghi has said he will do whatever it takes, and it will be sufficient.
European stock markets were down. Paris was the lowest of them all, down 1.47 percent, largely on the back, of course, of those numbers, GDP. But keep in mind, also, people are very concerned about the fiscal cliff, and yet we mustn't make too much of one day's numbers with it being the new year.
Look at the year-to-date. Now, this is really interesting. I would say poor on the FTSE, moderate on the Paris and the Zurich, and skunking -- skunking gains seen on the Xetra DAX, up the best part of 30 percent. That, of course, comes largely as a result of what had been happening in very sharp falls last year.
News just in from Rome at the moment: the outgoing Italian prime minister, Mario Monti, says he's willing to accept the leadership of the coalition of centrist parties, which are made of the people who support his reform agenda. Parliamentary elections are being held at the end of February. Monti says the coalition could get a significant result.
When we come back, QUEST MEANS BUSINESS, a case of shock and disruption. We speak to one author who thinks a bit of volatility is good for us. And trading secrets: your predictions for the year ahead.
QUEST: I'd like you to take a look at this graph. It's Wall Street's measure of volatility. We call it the VIX Index, and today it's up -- today it's up 4.5 percent, not surprisingly with the fiscal cliff, the debt ceiling, and the uncertainty in Washington at the moment.
If you listen to the author of "The Black Swan," fragility, instability, and fear -- the sort of thing VIX monitors -- isn't such a bad thing. Nassim Nicholas Taleb's new book is called "Antifragile." It's a term he uses to describe the good that can come from unexpected events, things like VIX and volatility.
Nassim says one example is the economy. He told me how financial markets could all thrive from volatility.
NASSIM NICHOLAS TALEB, AUTHOR, "ANTIFRAGILE" AND "THE BLACK SWAN": Most of the harm has been done not by the stressors but by removing stressors. And let me give you an example. The modern life, you remove physical stressors, and end up with diabetes and all these kinds of -- syndrome X that come with it, and many more diseases from having too much supply of food.
But quite centrally, the economy, Mr. Greenspan removed -- tried to manufacture stability. The attempt of him and Gordon Brown wanted to have no boom and bust. So, what did they do? They did what people -- the mistake commonly made in a forest. If you prevent every small forest fire, very flammable material accumulates, and then the big fire blows the thing up.
QUEST: Are you not in favor of any form of artificial stability?
TALEB: No, I am in a form of -- I am in favor of -- I'm not in favor of smoothing out the mood of children by giving them medication, what big pharma does. I'm in favor of what I call emergency room surgery.
QUEST: But then, you will accept, surely, the consequent damage that comes from the lack of intervention. The weak --
TALEB: No, the lack of --
QUEST: The weak might get hurt.
TALEB: Well, no, no. This is something I insist on. I am not Darwinistic in a moral sense.
QUEST: You must be, by virtue --
TALEB: No, no, no, no. I don't believe -- I believe something called the naturalistic fallacy. I want to protect the weak. And actually what happens is that the systems -- say, for example, what's happening now, we bail out banks and everything.
Who are we bailing out? We're helping bankers, not hairdressers, not salon owners, not restaurant owners. We're helping the powerful by stabilization, not the very weak.
QUEST: Just sitting here listening to you --
QUEST: -- I suddenly felt I have to hear your views and I have to get your perspective, because it's so topical, on for example this incredible austerity that is now being imposed on large parts -- large societies in Europe, in the United States --
TALEB: OK. Let me tell you what bothers me about it, all right? What bothers me about it is that the people who inflicted the harm on us -- namely, the bankers -- not only they got away scott-free, absolutely unharmed by the events, but on top of that, they paid themselves in 2010 big bonuses. That was our taxpayer money.
If we took measures to prevent bankers who bailed out from ever collecting bonuses, if we did this, then people would put up with any austerity, provided you can justify it. Because then it feels fair.
QUEST: Nassim Nicholas Taleb talking to me earlier. We've been doing a little crystal ball gazing of our own here at QUEST MEANS BUSINESS. Now, I promise you, we'll play these back as the year goes on, but take a listen at the thoughts of the people who put this program together, the producers and the writers on QUEST MEANS BUSINESS, about their predictions for the winners and losers of 2013.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: So, in 2013, I think Germany will be warned on its credit rating.
UNIDENTIFIED MALE: In 2013, I predict oil will reach an all-time high.
UNIDENTIFIED MALE: In 2013, I predict Manchester City will win the English Premier League and also the FA Cup, with a winner score by Mario Balotelli.
(MUTED TRUMPET "LOSER" SOUND EFFECT)
UNIDENTIFIED MALE: I'm going to be bullish about the US economy in 2013, I'm going to say the Dow is going to finish the year above 14,000 points, and the Fed's going to end all quantitative easing measures.
UNIDENTIFIED MALE: I predict that in 2013, the UK will lose its Triple-A status from at least one of the major ratings agencies.
UNIDENTIFIED FEMALE: In 2013, Japan will bail out Sony, Panasonic, and Sharp.
(END VIDEO CLIP)
QUEST: I promise you, most of their predictions were right when we did this a couple of years ago. We will play those predictions as the year goes on at the end of next year and see who got them right.
We asked you for your predictions. Mohammad Shoaib says, "The US economy will roar and will be on top. Europe will also grow, especially the southern periphery."
Jaikumar Hundlani says "2013 will revolve around China, the United States, and Europe." Well, there's not a lot of the world left after that.
And Morgan McCabe says "Manufacturing will gradually move back to the EU periphery as China becomes uncompetitive." I like that interesting one.
Keep the predictions coming. You can tweet your predictions. It is, of course, @RichardQuest, and I promise you, we might put them to one side and play them back and embarrass you as the year goes on.
Still ahead, QUEST MEANS BUSINESS, at the end of this week. The White House crisis talks are just half an hour away, and there's still hope a fiscal cliff deal can be reached. One congressman has his views after the break, QUEST MEANS BUSINESS.
RICHARD QUEST, CNN HOST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in just a moment. This is CNN and, on this network, the news always comes first.
(BEGIN VIDEO CLIP)
QUEST (voice-over): It's about half an hour or so and the U.S. president and key members of Congress will try once again to forge that compromise to avoid going over the so-called fiscal cliff. Other senators and House members are cutting their holiday short and returning to Washington in case a deal is reached.
Syria's opposition says rebel fighters are shelling an army base in Maaret al-Numan in the country's Idlib province. At least 101 people have been killed in violence today across the country. The violence continues unabated despite some moves on the diplomatic front. Russia's foreign minister says he's now ready to meet the leader of Syria's main opposition group.
There's discouraging news from doctors in Singapore about the condition of the victim of multiple rape from India. They say the 23-year-old woman has taken a turn for the worse and that her vital signs are deteriorating. The woman was brutally assaulted earlier this month on a bus in New Delhi.
The U.S. State Department says it deeply regret a new law signed by the Russian president that prevents Americans from adopting Russian orphans. It's widely seen as retaliation for a new U.S. law that punishes Russians accused of human rights violations. Dozens of adoptions already in progress could be halted.
Nelson Mandela's granddaughter says the former South African president is very alert and doing well. She tells CNN that rumors Mandela has returned home to die are not only false but hurtful. The 94-year-old Mandela has undergone surgery for gallstones and endured a long hospital stay.
(END VIDEO CLIP)
QUEST: What happens if America goes over the fiscal cliff? One fact seems to be clear: 90 percent of Americans will see their taxes go up. That's according to the Tax Policy Center. And it will ordinary workers and families who feel the pinch first.
(BEGIN VIDEO CLIP)
QUEST (voice-over): The 2 percent payroll tax is due to expire at the end of December. Paychecks could be smaller for 160 million workers.
Let's put this into context. Someone making $50,000 a year might get around $83 a month less. Families are set to lose four key tax breaks, including a very popular child tax credit that gives parents up to $1,000 in tax breaks for each child under the age of 17.
And again, according to the Tax Policy Center, the average household faces a tax increase of $3,500 for the year.
(END VIDEO CLIP)
QUEST: So this is clearly quite serious business, costing most Americans quite a bit of money.
I've been speaking to the top Democrat on the House U.S. Budget Committee. I asked Congressman Chris Van Hollen if he really believes a deal will be reached.
(BEGIN VIDEO CLIP)
REP. CHRIS VAN HOLLEN, D-MARYLAND: Well, I still think that we have a chance of avoiding the tax portion of the fiscal cliff in the next four days. That will depend on the outcome of the meeting today at the White House between the president and the Republican and Democratic leaders from the House and the Senate.
QUEST: But of course if they don't manage it, what do you believe is the best that we can hope for?
VAN HOLLEN: Well, I think there's right now about a 40 percent chance of getting an agreement in the next four days to at least avoid portions of the tax fiscal cliff. Now that will depend on a couple things. That will depend, first of all, on Speaker Boehner at least allowing the House of Representatives to have an up-or-down vote on whatever proposal is put forth.
So far, he has refused to allow the full house to vote on any agreement that doesn't have at least half of Republican members, even though it could pass with half of the votes in the House.
Second, Mitch McConnell, the Republican leader in the Senate, will have to agree not to use procedural delaying tactics to get in the way of a majority in the Senate doing its will.
QUEST: You've been in the House now a good few terms, Congressman. From the time that you've been there, is this the most bitter?
VAN HOLLEN: I have to say yes. Ever since the 2010 election, which didn't just bring a Republican majority -- we've had Republican majorities before and people have been able to do the people's business, obviously with disagreements and to-and-froing, but getting work done.
But in 2010, you had the election of a Tea Party group of Republicans whose view has been and effort has been to really obstruct the process, to gum up the works, to really prevent government from working.
We saw the first real indication of that back during the first debt ceiling crisis in the summer of 2011, where you had this group threatening that the United States would, for the first time in its history, not make good on its debts.
And when you have that kind of mentality, you -- and you have a Speaker who's willing to sort of surrender control of the House to that group, then you have the kind of problem that we see today.
QUEST: Is the U.S. system of government dysfunctionally broken when repeatedly there is a failure on such important issues?
VAN HOLLEN: I do not believe it's permanently dysfunctionally broken. I do have some hope that at the end of the day, whether it's in the next four days or sometime by mid-January, people will come to their senses and allow democracy to work its will in both the House and the Senate.
What I mean by that is allow bills to come for an up-or-down vote and allow a majority to determine the outcome. As you know, in parliamentary systems, the government is represented in parliament with a majority. We have a different system here, which, over time, has actually been able to work; it works imperfectly, but it does work.
But when you have a group in the House of these Tea Party elements that is more committed to trying to break down the system than try and make it work and a lack of unwillingness to reach compromise, you obviously have trouble.
But what I hope is that at the end of the day, the Speaker will recognize he has to allow majorities to work their will; we need that to happen in the Senate and the House.
(END VIDEO CLIP)
QUEST: Congressman Chris Van Hollen talking to me earlier. We'll have a "Profitable Moment" after the break.
QUEST: Now the weather and more weekend rain could push the United Kingdom into record territory. (Inaudible) Karen Maginnis is at the CNN World Weather Center, whether it's raining in the U.K., storms in the U.S., cold in Europe, you can tell it's winter in the Northern Hemisphere.
KAREN MAGINNIS, AMS METEOROLOGIST: Yes, and it hasn't been winter for that long. And already we're setting records. And we've watched just band after band after band of rainfall for months now, across much of the United Kingdom. And for England, that means about 20 or 1,200 millimeters of rainfall for the year, just kind of an average, just for England.
But if we receive just over 46 millimeters of rainfall coming up for the next several days -- and we're looking at record territory across the United Kingdom -- with the wettest year on record. And it doesn't look like we're going to be too far from that. We'll come very close because there will be bands and bands of precipitation moving through.
Over the last 12 hours you can see just kind of this stormy path with that moisture, a long stretch of it, coming up off of the Atlantic. But there's another ingredient that will add to this, and that's an area of low pressure just kind of stuck way up across the North Sea.
And that's going to usher in some pretty heavy rainfall into Scotland as well. If you see any of these amazing pictures coming out of the U.K., there have just been areas across west central England that have really suffered quite a bit, a lot of people out serving their damage. It's going to take some time for that water to go down because there's just no place for it to go.
In London, you could see delays coming up for Saturday afternoon that could be fairly length. But not just there. Also to Glasgow, Amsterdam, Dublin, Copenhagen and into the Benilux region, we can anticipate delays. It's going to be windy and we'll look at low visibility because of this long stretch of moisture, as I mentioned.
Look at this. This coming out of west central England and even though the sunshine is materialized, at least in this picture, it does not look like that's going to be for very long. And then we talk about Canada and record-setting snowfall, all-time record.
In Montreal, where streets are covered, they've sent out 6,000 people to kind of clean up. But it looks like it's going to be a while because we've got so much snowfall that it's clogged the roads. It's knocked out power and they are trying to clear those roads off. But it is quite the quagmire.
Take a look at Vermont, 69 centimeters there; Montreal, 45 centimeters. And in Ottawa, 26 centimeters and even in Kingston, Ontario, they've seen about 30 centimeters of snowfall as well.
Well, even into the Canadian Maritimes, some windy conditions, but look at what happens in our forecast going into Sunday. Area of low pressure, just kind of sweeping across the southeast, got a lot of moisture with it; could see some storms in the month of December that took the lives of about a dozen people in the United States.
Area of low pressure treks up the northeastern Seaboard, becomes a nor'easter on Sunday. And really wallops at least according to a couple of our computer models, with very significant snowfall that is going to snag some of the holiday travel coming up into the next 48 hours or so.
So Richard, plenty to talk about all across the globe.
QUEST: We did. Good grief, you've got a busy time ahead of you, a busy winter.
Karen, we thank you for that.
Before we go, we need to take a last look at the -- at Wall Street. We are down 95 points, 13,000 is extremely dodgy at the moment on the Dow Jones. The market's off nearly 3/4 of 1 percent. The fiscal cliff negotiations are taking place.
And let me remind you that we will be here on New Year's Eve, a special edition of QUEST MEANS BUSINESS, which will actually be done on New Year's Eve as we look at the ramifications of the fiscal cliff.
Tonight's "Profitable Moment," so I've just received this certificate from the Plain English Campaign, winning the Best Communicator Award for Business, for being an engaging and clear guide in dire economic times.
It's particularly gratifying because although I do write much of what you hear me say every night in our conversation, a great deal more is written by our exceptionally talented team of writers, the people who strive each day to make this program the bewildering language of business relevant and understandable.
It's their call to abandoned business-speak and jargon and do whatever it takes, which is why we show you that these stories, like the fiscal cliff, that matter so much in the global economy. What I hope we've shown this year is that business news is not boring.
After all, this year brought us the never-ending Eurozone crisis, LIBOR, bank bailouts and the fiscal cliff, surely evidence that our nightly agenda is part of all our lives.
And that is why we are proud of this recognition.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable.
ROBYN CURNOW, CNN HOST: With its diverse population, compelling history and natural beauty, South Africa has long been renowned as a tourist destination. But how about also coming here for a little bit of a nip and tuck and then recovering from surgery while on safari?
You're watching MARKETPLACE AFRICA. I'm Robyn Curnow. And in this week's show, we're going to explore South Africa's medical tourism industry and how the country is now attracting a new sort of visitor.
(BEGIN VIDEO CLIP)
JULIA QUINN (PH), COSMETIC SURGERY PATIENT: That's when I had my eye done again, a bump taken out of my nose.
NKEPILE MABUSE, CNN CORRESPONDENT (voice-over): There isn't much cosmetic surgery that Julia Quinn hasn't had done after a bad experience in the U.K., she started coming to South Africa. She says there's quality treatment here and value for money.
QUINN (PH): You get a lot of good surgeons, dentists out in South Africa.
It's like a holiday. I mean, you're looked after; the weather's fine.
MABUSE (voice-over): And in January, she'll be flying out to South Africa again, this time for a mini-facelift and more lipo.
MABUSE (voice-over): And this is where she'll be recuperating. Lorraine Melville started her surgeon and safari business back in 2000.
LORRAINE MELVILLE, PLASTIC SURGERY ENTREPRENEUR: For most people in this world, economy's like the U.K. and especially in America, the biggest desire is to go on an African safari. And yet the greatest want in their life was to have plastic surgery.
Why not come and recuperate here and you can go back to the States and tell everybody that, you know, Africa looks good on you? "I went on a safari."
UNIDENTIFIED FEMALE: A few days and then what?
MABUSE (voice-over): She's had people from all over the world coming to her to facilitate their surgery and perhaps a safari. But despite her initial success, the company proved far from recession-proof.
MELVILLE: When there was a greater volume of people coming through, then it was people that were borrowing money, for example, or using their credit cards to pay for the plastic surgery. So they weren't necessarily as educated or as financially secure. They weren't the typical baby boomers.
So when the economic recession came along, that was the first market that dropped away, because obviously there was a credit crunch.
MABUSE (voice-over): But while the U.S. and the Eurozone have languished, the superrich and the emerging middle classes in Africa have been buoyed by double-digit growth figures in some places. And Lorraine says this is proving lucrative for her.
MELVILLE: There is a huge increasing market that's coming out of Africa for elective surgery. I would say one of the biggest countries is Zambia. There's quite a bit market coming out of Angola, Tanzania, Kenya, Ghana.
So I think it'll actually map out. If you look at the economics of how these countries are actually emerging economically, which it all ties in. They obviously are more prosperous; their economies are growing. So therefore, the middle class is growing and therefore the need increases.
DR. PATEL: So this is a liposuction syringe. And it's inserted via a small incision in the skin.
Essentially then that through a mechanical motion, fat is aspirated from the area that the deposit is not wanted.
MABUSE (voice-over): (Inaudible) Patel has been a plastic surgeon in this private clinic in Johannesburg for three years. In that time, he says, he's also seen an increase in clients flying in from across sub-Saharan Africa for cosmetic surgery.
PATEL: In terms of the greater African market, certainly we've seen people from very high income groups, from a regional African point of view, countries such as Nigeria, Ghana, the DRC, all play an important role where certainly socioeconomic factors dictate that there are more and more people who can afford this sort of surgery.
And so we're seeing a larger amount of those people coming certainly to Johannesburg for that surgery.
MABUSE (voice-over): And Dr. Patel says his clients are very clear about what they want done.
PATEL: But they're not in two minds about what they want. So for instance, they would come, saying, "I would like to look." "I would like to have Jennifer Lopez' butt." Or "I would like to look like Kim Kardashian."
And the obvious body features of those two individuals are curvaceous hips and thighs, together with an augmented or, you know, accentuated buttock. So those are the kind of things that people say.
MABUSE (voice-over): Like any surgical procedure, plastic surgery is not without its risks. In 2005, the wife of the former Nigerian president, Olusegun Obasanjo died after having liposuction in a Spanish clinic.
Risks aside, for the vast majority of people on the continent, these kinds of procedures remain utterly unaffordable. But Dr. Patel believes -- or at least hopes -- that this won't always be the case.
PATEL: It's not a necessity. It's a luxury. So I see the claims in the next 5-10 years certainly increasing amongst local African people as well as people from the rest of Africa.
QUINN (PH): And of course, then, after all the -- all the work that I feel these are probably the two best photos I've ever had taken of me at my daughter's wedding, because my eyes look nice; my teeth look nice and I can smile happily.
MABUSE (voice-over): Quinn (ph) says she's looking forward to arriving in South Africa next month to have her surgery and to get some sunshine.
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CURNOW: Thanks to Nkepile Mabuse for that report.
Now coming up after the break, I speak to the U.S. Commerce secretary about doing business in Africa.
CURNOW: China has extensive interests in Africa, (inaudible) endless headlines. But what of America? Have U.S. businesses missed opportunities that have been seized by others? Well, I recently put that question to the acting U.S. Commerce secretary, Rebecca Blank. She's been in South Africa and Kenya to promote President Obama's "Doing Business in Africa" campaign.
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CURNOW: So what is "Doing Business in Africa" campaign?
REBECCA BLANK, SECRETARY OF COMMERCE: So this is an effort to really increase the knowledge and the involvement of U.S. businesses in business opportunities in Africa.
So for instance, we are going to take the U.S. ambassadors to Africa and some of our foreign commercial service staff, bring them over to the U.S. and put them in front of U.S. businesses to talk about the opportunities and best practices and how do U.S. businesses enter the African market.
We are going to be training our domestic advisers (inaudible) who work for the Commerce Department, who work with U.S.-based companies as they expand overseas on what is possible here in Africa, how do you enter the African market so they can also provide that sort of advice.
We're going to create an African portal on our website that specifically designed interest businesses here in Africa. So the idea here is that let people know the enormous growth opportunities and through that, market opportunities for businesses who come to Africa.
CURNOW: Some might say it's a little bit too late, because a lot of other countries have been here for years --
CURNOW: -- message.
BLANK: So U.S. businesses have been here for years as well. I was out visiting the Ford Motor Company plant outside Pretoria and they first entered South Africa in 1904. Our interest is to expand everyone (inaudible) we already have hundreds and hundreds of U.S. businesses in the African economy in various ways.
But we want more. We want to build even closer ties and we do think that as President Obama has said, there's a real opportunity for Africa to be the next great economic success story and we want the U.S. to be part of that.
CURNOW: When it comes to doing business in Africa, China, perhaps Chinese businesses, don't offer or demand perhaps the same political strings attached to some of the deals that the U.S. or that perhaps other Western companies would.
Does it make the playing field unlevel in a way?
BLANK: So I'm not sure that different countries come in with, you know --
CURNOW: Basically China perhaps doesn't ask as many questions or doesn't have so much questions that have to be answered back home from business men doing business here.
BLANK: So, you know, the U.S. is a country that has a number of pretty serious regulations. They want their businesses to be responsible. They're quite adamant that their business does not engage in corruption (inaudible) bribery for instance.
CURNOW: (Inaudible) for example.
BLANK: And you know, I can't speak to other countries and how they behave. But you know, we're serious that we want our companies to be good corporate citizens. And we think in the long run, that is going to win them more friends and more business opportunities than other sorts of behavior.
CURNOW: So this is an initiative, "Doing Business in Africa," there's not an African country that's excluded? There's no -- ?
BLANK: No, not at all.
CURNOW: -- blacklist here?
BLANK: No, not what (inaudible).
CURNOW: (Inaudible) encouraging businesses to go to Zimbabwe, go to Congo, go to Angola? Many of these places have human rights issues, you know, the governments are not necessarily democratic. This is in a way a shift. How do you (inaudible) working in those environments and encouraging trade in those environments?
BLANK: So businesses have to decide where they think they can operate effectively.
And one reason why the "Doing Business in Africa" and the trade and investment pieces of the president's strategy are so tied to the other pieces is that peace and security, you know, economic development and human development are often very much related to a stable, economic and political environment that attracts business investment.
So we can't force businesses to go into environments that they think their assets may be threatened. So as, you know, different African countries prove themselves to have this sort of stable political and economic environment, it's going to make it that much easier for us to encourage U.S. businesses to enter.
CURNOW: What's the Americans is key? What do you want from Africans, in a sense?
BLANK: So, I mean, I actually think this is a two-way street, that we want to do a variety of -- create a variety of partnerships with different countries in Africa that both help the African country and help the United States. And of course, that's exactly what trade and investment is all about, is that both countries grow and generate more jobs as a result of that.
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CURNOW: Rebecca Blank there, the U.S. Commerce secretary.
Well, that's all from me, Robyn Curnow, here in Johannesburg. See you again next week. In the meantime, please do go online. We're at CNN.com/MarketplaceAfrica. Goodbye.